Charles Albert Warner v. Albert Heber Warner, Jr.

¶1 This appeal arises from litigation that has been ongoing for

more than fifteen years over a family trust. The Defendants Albert

"Skip” Heber Warner Jr. (Skip), Vernon S. Warner, and Valeen W.

Peterson (collectively, the Trustees) appeal from the district court's

order that certain trust property be removed from the trust. They

also challenge the court's decision to require the Trustees to pay

some of the Plaintiffs' attorney fees, as well as the court's denial

of their own requests that their attorney fees be paid by the

Plaintiffs, rather than by the trust. The Plaintiffs Charles Albert

Warner, Alan Smith Warner,3 and Theron C. Warner (collectively,

the Beneficiaries)4 cross-appeal the district court's grant of

summary judgment to the Trustees on all of the Beneficiaries'

claims and the court's denial of the Beneficiaries' subsequent

motions to amend their pleadings. We reverse the district court's

order that the Trustees remove what the parties refer to as the

Smith Property from the trust and the court's denial of that portion

of the Beneficiaries' last motion to amend related to the Smith

Property and remand for further consideration. We affirm on all

other issues.

Warner v. Warner

5. In their statement of facts, the Trustees state that this occurred in

2003, contrary to the evolving positions they took in the district

court: first, they had claimed that the Smith Property was never a

Trust asset and, later, that it became a Trust asset only in 2006. The

Beneficiaries contend that the 2003 date is unsupported by the

(continued...)

20110078-CA 3 2014 UT App 16

BACKGROUND

¶2 Albert H. Warner (Father) and Joanne S. Warner (Mother)

(collectively, the Settlors) executed the Albert H. Warner Family

Trust (the Trust) in 1988 to benefit their eight children. The Settlors

named four of their children—Skip, Vernon, Valeen, and Alan—as

trustees. Father died in 1995, and Mother subsequently executed a

"Will of Joanne Smith Warner” (Mother's Will), in which she

purported to authorize Skip to take "lead responsibility in charge

of the [T]rust” and to give him her power of attorney. Mother died

in 1996. According to the Trust's terms, "[f]ollowing the death of

both Settlors all assets, except those listed below[,] remaining after

payment of debts, taxes and expenses and disposition of personal

and household effects shall be divided into equal shares.” The

excepted property—that is, the property permitted to remain in the

Trust—included "80 acres [of vacation property] . . . [to] be

established as a permanent recreation area for their family” and

"[a]ll stocks, bonds, mutual funds and similar investment assets,”

"collectively referred to as securities.” The securities were to be

used "to provide funds for taxes, expenses of maintenance and

improvement and insurance and any other expenses in connection

[with the vacation property].” When the Trust was created, the

trust corpus consisted of all the Settlors' assets, which included,

among other things, the eighty acres of vacation property and the

securities. In addition, Mother expected to inherit a 320-acre parcel

of property located in Box Elder and Cache Counties (the Smith

Property) and had prepared a special warranty deed in April 1988,

transferring the Smith Property to the Trust in anticipation of that

inheritance. The Smith Property became a Trust asset in 2003.5

Warner v. Warner

5. (...continued)

record, but they neither propose a contrary date nor offer any

substantial support for their challenge to the 2003 date. Because the

date is not pertinent to our resolution, we accept for purposes of

appeal that the Trust received the Smith Property in 2003.

20110078-CA 4 2014 UT App 16

¶3 The Beneficiaries sued three of the four trustees (excepting

only Alan) on June 5, 1998, alleging multiple breaches of fiduciary

duty. The Beneficiaries also sought an order to show cause asking

the district court to order, among other things, the Trustees to be

"restrained and enjoined from incurring additional costs and

expense” related to the vacation property, "be removed as

trustees,” and be ordered to cover their own attorney fees as

opposed to having them paid out of the Trust. The Trustees filed an

answer denying that they had breached their fiduciary obligations

and seeking removal of Alan as a trustee and payment of their

attorney fees. In their response to the Beneficiaries' request for an

order to show cause, the Trustees included a copy of Mother's Will,

presumably to demonstrate that the Settlors intended Skip to be

primarily responsible for carrying out their desires. The parties

later treated this as the Trustees' request for a declaratory

judgment on the validity of Mother's Will. The court issued the

order to show cause but, after hearing "argument and proffered

testimony,” denied the Beneficiaries' "request for temporary and

preliminary remedies.”

¶4 The Trustees then moved for "summary judgment

dismissing the complaint of [the Beneficiaries] and in favor of [the

Trustees] on their counterclaim for removal of plaintiff, Alan Smith

Warner as a trustee and for [their] attorneys' fees.” The

Beneficiaries opposed the Trustees' motion, asserting that there

were issues of fact related to the Trustees' performance of their

fiduciary obligations and the validity of Mother's Will, which

precluded summary judgment. The Beneficiaries also moved to

amend their complaint to add a claim for equitable modification of

the Trust to require distribution of all its assets. The amendment

Warner v. Warner

20110078-CA 5 2014 UT App 16

further sought to dissolve the Trust due to the continuing

animosity between the Trustees and the Beneficiaries and because

of Alan's financial need due to a recent loss of employment.

¶5 In late 1999, the district court granted partial summary

judgment in favor of the Trustees and dismissed all of the

Beneficiaries' causes of action. The court concluded that the

Trustees had not breached their fiduciary obligations because the

facts, even construed in a light most favorable to the Beneficiaries,

demonstrated that the Trustees "have exercised certain

discretionary duties which clearly do not please all the

beneficiaries, but they have acted consistent with general law

relating to trustees and consistent with [the Utah Code section

governing joint trustees] and they have substantially complied with

the Trust provisions.” The court denied the Trustees' motion for

summary judgment on their counterclaim, stating that "there are

still material questions of fact regarding the propriety and legality

of” Mother's Will, which made elevating Skip to "lead” trustee or

removing Alan "premature.” The court also denied the

Beneficiaries' motion to amend the complaint because the proposed

amendment did not "address proper issues in this case” but

nevertheless admonished that the Trustees "have not been wholly

without mistake and in the future the court will apply a very

stringent standard upon” the Trustees in conducting Trust

business, including possibly "revisit[ing the motion to amend]

upon presentation of proper evidence justifying amendment.”

¶6 Over the next ten years, the Beneficiaries made further

attempts to amend their complaint. In July 2001, they filed a second

motion to amend, in which they alleged additional trustee

misconduct and sought reformation of the Trust or partition of the

Trust property. The court denied the motion on the basis that the

Beneficiaries' claims would not be best resolved through judicial

intervention.

¶7 In August 2007, after the case had been reassigned to Judge

W. Brent West, the Beneficiaries filed a third motion to amend their

Warner v. Warner

6. In January 2006, with apparent leave from the district court, the

Beneficiaries filed their first amended petition to partition the

vacation property and to order distribution of the remaining trust

corpus, including the Smith Property. The Trustees filed an answer

and a motion for summary judgment. One-and-a-half years later,

in July 2007, without having resolved the Trustees' motion for

summary judgment, the court conducted a telephone conference

with the parties. Although the record contains a minute entry

indicating that the "[p]arties discuss[ed] the case,” the subject of

that conference is not included in the minute entry. But it can be

inferred that the subject of the conference was the Beneficiaries'

failure to have filed a motion for leave to amend prior to filing the

amended complaint because immediately following the telephone

conference, the Beneficiaries filed a third motion to amend their

petition with supporting memorandum. The motion sought to add

claims virtually identical to the causes of action asserted in their

first amended petition filed in January 2006. At the hearing on the

motion to amend, counsel for the Trustees explained that the

Beneficiaries had "filed an amended complaint,” but after briefing

was complete on the Trustees' unresolved motion for summary

judgment, "they realized there was never a motion to amend,”

rendering the Beneficiaries' complaint "not properly amended.”

Although the Beneficiaries did not dispute the Trustees'

characterization of what had happened, the record indicates that

the Beneficiaries did have permission to file the 2006 amended

complaint. The parties do not address this discrepancy, and as a

result, we accept, for purposes of this appeal, that the Beneficiaries'

first amended petition was not properly before the court when they

filed their third motion to amend.

20110078-CA 6 2014 UT App 16

complaint, in which they sought to partition the vacation property

and distribute the remaining trust corpus, including the Smith

Property.6 The Trustees opposed the motion, asserting that the

Beneficiaries "ma[d]e the same claims as in previous attempts to

amend their complaint,” all of which had been denied by the court,

and raising other procedural objections to amendment. A hearing

Warner v. Warner

7. The Beneficiaries asked for distribution of the Smith Property.

The district court appears to have ordered the property divested

from the Trust. Because our analysis does not depend on any

difference there may be in these two terms, we refer to the court's

actual order regarding the Smith Property as divestment

throughout this decision.

20110078-CA 7 2014 UT App 16

on the motion to amend was eventually scheduled for May 27, 2009

(the May 2009 hearing). The morning of the hearing, the Trustees

filed a motion for attorney fees pursuant to Utah Code section 78B-

5-825 (the bad faith statute) and subsection (1) of section 75-7-1004

(the trust statute).

¶8 During the course of the hearing, the Trustees' counsel

represented that the Smith Property was "not in the Trust” and that

the Trustees "have two separate accounts[;] . . . one, handle[s] the

Smith funds and then the remaining Warner Estate funds are

handled separately.” Following argument from both sides, the

court orally denied the Beneficiaries' motion to amend, in part

because it "ha[d] evidence today that the Smith [Property is] . . .

being administered separately” from the Trust. When the

Beneficiaries insisted that the Smith Property was still held by the

Trust, the court turned to the Trustees and told them to do

"whatever you've got to do to get that Smith [Property] out of

there.” The court denied the remainder 7 of the Beneficiaries' motion

to amend on multiple grounds, including that the causes of action

did not arise out of the same conduct as the original causes of

action, were time barred by the statute of limitations and doctrine

of laches, and were precluded under the doctrines of res judicata

and law of the case. The court further determined that the disputes

over the validity of Mother's Will and power of attorney were

moot. The district court seemed to reserve a ruling on the Trustees'

motion for attorney fees, noting that the Beneficiaries had not yet

had "a chance to look at [the Trustees' attorney fees affidavit] and

submit any counter affidavits or objections” and directing the

Trustees to "submit that” motion for decision. The court requested

Warner v. Warner

8. This version of the proposed order is not in the record, but it

seems apparent from the other evidence in the record and the

briefing on appeal that the Trustees originally submitted a

proposed order that awarded them $134,275 in fees.

9. Rule 7(f)(2) of the Utah Rules of Civil Procedure provides that

"the prevailing party shall, within fifteen days after the court's

decision, serve upon the other parties a proposed order in

conformity with the court's decision” and that any "[o]bjections to

the proposed order shall be filed within five days after service.”

Utah R. Civ. P. 7(f)(2).

20110078-CA 8 2014 UT App 16

that the Trustees prepare a written order memorializing the court's

oral ruling.

¶9 On June 5, 2009, the Trustees sent the Beneficiaries a

proposed order purporting to memorialize the decisions made at

the May 2009 hearing. The proposed order, however, contained at

least two significant misstatements of the district court's oral

ruling: First, it did not include a provision for divesting the Smith

Property from the Trust, as the court had explicitly directed at the

hearing; rather, it stated that the Smith Property was properly held

in the Trust. Second, it provided that "[t]he Court will award

attorney fees and costs to the prevailing party, the [Trustees],” in

the amount of $134,275.8 On June 18, 2009, the Beneficiaries filed an

untimely objection,9 in which they pointed out that the proposed

order "fails to contain the admonition of the court that the real

property of the Smith estate should be distributed from the trust as

the only trust corpus not for distribution would be the vacation

property [and] the stock portfolio.” The next day, the Trustees filed

a notice to submit on their motion for attorney fees. The

Beneficiaries' counsel had, at that point, left town on vacation.

Concerned because their objection had been untimely and because

they had not yet responded to the Trustees' attorney fees motion,

the Beneficiaries hired another law firm to represent their interests.

Warner v. Warner

20110078-CA 9 2014 UT App 16

¶10 On June 24, 2009, the Beneficiaries, through their new

counsel, filed a motion to enlarge the time for filing an objection

until June 30. The motion asserted good cause and excusable

neglect as grounds for permitting an extension, specifically citing

the Beneficiaries' original attorney's failure to notify them of the

deadline for objecting and counsel's ensuing departure on vacation.

On June 30, the Beneficiaries filed a new objection to the proposed

order, citing the order's failure to direct the Trustees to remove the

Smith Property from the Trust and its award of attorney fees to the

Trustees. The Trustees filed a response, opposing any extension on

the basis that the reasons offered for the Beneficiaries' failure to file

a timely objection did not constitute excusable neglect.

¶11 Without expressly ruling on their motion to enlarge the time

to object, the district court concluded that the "[Beneficiaries']

Objection to the [proposed] Order on the hearing held May 27,

2009 is well founded” and issued a written decision ordering the

Trustees to amend the proposed order to include language

accurately reflecting its rulings on the distribution of the Smith

Property. One week later, the Trustees submitted a second

proposed order, which the court signed. The second proposed

order, however, did not remedy the primary problems with the

original proposed order; it still provided that the Smith Property

was properly held in the Trust, and it still awarded attorney fees to

the Trustees, only now with the "amount of attorney fees” to be

determined. Consequently, the Beneficiaries filed a motion to alter

or amend judgment, drawing the district court's attention to the

fact that the Trustees had again misstated the court's ruling from

the May 2009 hearing even after the court had ruled that the

Beneficiaries' objection to the original proposed order was well

founded and had instructed the Trustees to prepare a corrected

order that accurately reflected the court's ruling and to submit an

affidavit on attorney fees. In addition, the Beneficiaries submitted

their own proposed order memorializing the May 2009 ruling.

Following a hearing, the court set aside the Trustees' order that the

court had mistakenly signed and executed the Beneficiaries'

proposed order, explaining that the Beneficiaries' order did

Warner v. Warner

20110078-CA 10 2014 UT App 16

"exactly what [the court] thought [it] did” at the May 2009 hearing

when it determined that the Smith Property "is being improperly

held in the . . . Trust and order[ed] the [T]rustees to immediately

transfer that property out of the . . . Trust.” The Beneficiaries' order

also indicated that the court would "reserv[e any] motions for

attorneys' fees filed by both parties for [future] determination.”

¶12 The district court later concluded that the Trustees had acted

in bad faith when they submitted a proposed order that was "180

degrees different than what [the court] ruled” regarding the Smith

Property at the May 2009 hearing. The court awarded the

Beneficiaries $37,210 in attorney fees to be paid by the Trustees

personally and not with Trust funds. The court also denied the

Trustees' pending motion for attorney fees against the Beneficiaries

for all of the attorney fees the Trustees had incurred during the

entire litigation. The court explained that it was denying fees to the

Trustees under the bad faith statute because the previous judge had

found that the Beneficiaries were acting in good faith and none of

their actions since Judge West had been assigned justified "a

finding that [the Beneficiaries] in this case were acting in bad faith

and that the[ir pleadings] were frivolous.” It also denied the

Trustees' request for reimbursement under the trust statute on the

basis that the Trust had already covered the Trustees' attorney fees

and based on its understanding that attorney fees were available

under subsection (1) only to parties who "don't have any official

status” that would otherwise entitle them to be reimbursed

attorney fees from the Trust.

¶13 The Trustees now appeal from the court's order that they

divest the Trust of the Smith Property and from its two attorney

fees rulings: the award of attorney fees to the Beneficiaries and the

refusal to award attorney fees to the Trustees. The Beneficiaries

cross-appeal the 1999 grant of summary judgment in favor of the

Trustees on all of their causes of action and the court's subsequent

denials of their motions to amend the complaint.

Warner v. Warner

20110078-CA 11 2014 UT App 16

ISSUES AND STANDARDS OF REVIEW

¶14 The Trustees argue that the district court erred when it

ordered the Smith Property to be removed from the Trust because

the court no longer had subject matter jurisdiction after it granted

judgment in favor of the Trustees on all of the Beneficiaries' claims.

Alternatively, they assert that the Smith Property was properly

held in the Trust. Whether a court has subject matter jurisdiction is

a question of law reviewed for correctness. Housing Auth. of Salt

Lake v. Snyder, 2002 UT 28, ¶ 10, 44 P.3d 724. Whether a court has

authority to resolve an issue between the parties is a question of

law. See In re Adoption of Baby E.Z., 2011 UT 38, ¶ 31, 266 P.3d 702

("[T]he concept of subject matter jurisdiction [is limited] to those

cases in which the court lacks authority to hear a class of cases,

rather than when it simply lacks authority to grant relief in an

individual case.”).

¶15 The Trustees also claim that the court improperly found

excusable neglect to justify granting the Beneficiaries an extension

to respond to the Trustees' proposed order from the May 2009

hearing. Ordinarily, we review a district court's grant of an

extension of time to respond to a motion for abuse of discretion,

Utah R. Civ. P. 6(b); see also West v. Grand Cnty., 942 P.2d 337, 339–

40 (Utah 1997). Here, the court appears to have been exercising its

inherent authority to control the parties' conduct and protect the

integrity of the judicial system. See Barnard v. Wassermann, 855 P.2d

243, 249 (Utah 1993). A court's exercise of its inherent authority is

essentially discretionary, see Chen v. Stewart, 2005 UT 68, ¶ 36, 123

P.3d 416, and accordingly reviewed for abuse of discretion.

¶16 Finally, the Trustees appeal the district court's decisions

regarding attorney fees. This issue is divided into three parts. First,

the Trustees dispute the award of attorney fees to the Beneficiaries

under the bad faith statute and the order requiring the Trustees to

pay those fees individually. See Utah Code Ann. § 78B-5-825(1)

(LexisNexis 2012) (permitting an award of attorney fees where a

Warner v. Warner

10. None of the statutes cited in this decision have been amended

since the underlying litigation. We therefore cite the current

codification of each statute for the reader's convenience.

20110078-CA 12 2014 UT App 16

party's act is meritless and not asserted in good faith).10 Second, the

Trustees contend that the district court erred in denying their own

request for attorney fees under the bad faith statute. Finally, the

Trustees assert that the district court erred in denying them

attorney fees under subsection (1) of the trust statute (section

1004(1)). See id. § 75-7-1004(1) (LexisNexis Supp. 2013) (permitting

a court to award attorney fees in "a judicial proceeding involving

the administration of a trust”). Generally, the grant or denial of

attorney fees is left to the district court's sound discretion. Fisher v.

Fisher, 2009 UT App 305, ¶ 8, 221 P.3d 845 (reviewing the denial of

attorney fees under the trust statute); Hooban v. Unicity Int'l, Inc.,

2009 UT App 287, ¶¶ 6–7, 220 P.3d 485 (reviewing the denial of

attorney fees under the bad faith statute), aff'd, 2012 UT 40, 285 P.3d

766. However, to the extent that the denial of statutory attorney

fees depends upon an interpretation of the applicable statute, the

district court's determination about what the law requires is

reviewed for correctness. Fisher, 2009 UT App 305, ¶ 8; Hooban,

2009 UT App 287, ¶ 7. Furthermore, an award of bad faith attorney

fees must be supported by a finding that the burdened party did

not act in good faith. Still Standing Stable, LLC v. Allen, 2005 UT 46,

¶ 7, 122 P.3d 556. We review the court's finding of bad faith for

clear error. Id. ¶ 8.

¶17 On cross-appeal, the Beneficiaries first assert that summary

judgment in favor of the Trustees was inappropriate because "there

were genuine issues of material fact” regarding the Trustees'

exercise of their fiduciary duties. "When reviewing a trial court's

grant of summary judgment, [the appellate court must] give the

court's legal decisions no deference, reviewing [them] for

correctness, while reviewing the facts and inferences to be drawn

therefrom in the light most favorable to the nonmoving party.”

Gudmundson v. Del Ozone, 2010 UT 33, ¶ 44, 232 P.3d 1059 (citation

Warner v. Warner

20110078-CA 13 2014 UT App 16

and internal quotation marks omitted). Reversal is warranted,

however, only if we determine that the court incorrectly applied

the law or incorrectly concluded that no material facts were in

dispute. Francisconi v. Union Pac. R.R. Co., 2001 UT App 350, ¶ 8, 36

P.3d 999.

¶18 The Beneficiaries also claim that the district court erred in

denying their three motions to amend their complaint. Although

rule 15 of the Utah Rules of Civil Procedure provides that "leave

[to amend] shall be freely given when justice so requires,” Utah R.

Civ. P. 15(a), the district court's decision on a motion to amend is

discretionary and overturned only if that discretion has been

abused, Daniels v. Gamma W. Brachytherapy, LLC, 2009 UT 66, ¶ 57,

221 P.3d 256.

ANALYSIS

I. Smith Property

A. Additional proceedings are necessary to determine whether

the Smith Property ought to be divested from the Trust.

¶19 The Trustees contend that the district court erred in ordering

that they divest the Smith Property because the court no longer had

subject matter jurisdiction after it denied the Beneficiaries' third

motion to amend the pleadings in May 2009. The Trustees rely on

the fact that all of the causes of action the Beneficiaries raised in

their original complaint had already been resolved on summary

judgment and all of the Beneficiaries' subsequent motions to

amend the complaint to include a claim to remove the Smith

Property from the Trust had been denied.

¶20 "Subject matter jurisdiction . . . is the authority of the court

to decide the case.” Johnson v. Johnson, 2010 UT 28, ¶ 8, 234 P.3d

1100 (omission in original) (citation and internal quotation marks

omitted); accord Thompson v. Jackson, 743 P.2d 1230, 1232 (Utah Ct.

Warner v. Warner

20110078-CA 14 2014 UT App 16

App. 1987) (per curiam) ("Subject matter jurisdiction is the power

and authority of the court to determine a controversy and without

which it cannot proceed.”). "The district court has original

jurisdiction in all matters civil . . . , not excepted in the Utah

Constitution and not prohibited by law,” Utah Code Ann. § 78A-5-

102(1) (LexisNexis 2012), and it is "the relationship between the

claim and the forum that allows for the exercise of jurisdiction,”

Johnson, 2010 UT 28, ¶ 9 (citation and internal quotation marks

omitted).

¶21 Resolution of disputes regarding trust administration fall

within the district court's original jurisdiction. Utah Code Ann.

§ 75-1-302(1)(c) (Michie 1993) ("[T]he court has jurisdiction over all

subject matter relating to . . . trusts.”). The district court therefore

had subject matter jurisdiction over the Beneficiaries' trust claim

with regard to the Smith Property. But "[t]he concept of subject

matter jurisdiction does not embrace all cases where the court's

competence is at issue.” Johnson, 2010 UT 28, ¶ 9; see also In re

Adoption of Baby E.Z., 2011 UT 38, ¶ 31, 266 P.3d 702 ("[T]he concept

of subject matter jurisdiction [is limited] to those cases in which the

court lacks authority to hear a class of cases, rather than when it

simply lacks the authority to grant relief in an individual case.”).

The question before us then is whether the Smith Property claim

was ever properly brought within the scope of the issues actually

before the court for resolution.

¶22 The Beneficiaries made a motion to amend the complaint

that, if granted, permitted the district court to allow the

Beneficiaries' requested relief—removal of the Smith Property from

the Trust. If the court denied the motion, however—as it certainly

appeared to do at the May 2009 hearing—then there was no claim

before the court over which it could exercise authority to provide

the requested relief. Yet the court did in fact provide the relief the

Beneficiaries requested when it ultimately ordered the Trustees to

divest the Trust of the Smith Property. In so doing, it appears that

the court fashioned a practical solution to the quandary created by

the Trustees' misrepresentation during the May 2009 hearing that

Warner v. Warner

20110078-CA 15 2014 UT App 16

the Smith Property was not held in the Trust, a misrepresentation

on which the court appeared to have based its earlier decision to

deny the Beneficiaries' motion to amend. Essentially, the court told

the Trustees to make their misrepresentation true by doing

"whatever you've got to do to get that Smith [Property] out of

there.”

¶23 The court's decision, however, bypassed an important

mechanism of the judicial system, which requires a demonstration

of the merits of a claim through the adversary process before relief

can be granted. This omission was prejudicial because the Trustees

assert that notwithstanding the Trust provision that "all assets,

except [the eighty-acre recreational property and the securities] . . .

be divided into equal shares and distributed,” another provision of

the Trust endowed the Trustees with certain "powers over

investments,” including the right "to retain any asset or property

received by [the Trust] at any time from any source” for investment

purposes. (Emphasis added.) The Trustees thus claim that the

Trust, read more broadly, permits retention of the Smith Property.

But this issue was never taken up by the district court because it

was never made a part of the proceedings through the process

initiated by the Beneficiaries, i.e., amendment of their complaint.

The mechanisms of due process set out in our rules of civil

procedure were thus never put into play; rather, the court simply

ordered the Smith Property divested, essentially without a hearing

on the merits or any of the other procedures our rules provide for

the orderly resolution of disputes. While the complicated dynamics

in which the order of removal occurred might explain the omission,

they cannot legally justify it. We therefore remand this issue to the

district court to determine whether it should have granted the

motion to amend, given that the Smith Property appeared to have

remained in the Trust contrary to counsel's representations, or

whether it is still properly denied.

¶24 Should the district court decide that the motion to amend

was properly denied, the court was without authority to order the

Smith Property divested from the Trust. Should the court decide

Warner v. Warner

11. The district court never expressly ruled on the motion to

enlarge, but it did consider the Beneficiaries' untimely objection

when it determined that the Trustees' May 2009 proposed order

was inaccurate and when it subsequently awarded bad faith

attorney fees to the Beneficiaries against the Trustees.

20110078-CA 16 2014 UT App 16

that the motion ought to have been granted, it should do so and

then allow the litigation process to resolve the dispute over

whether the Trust may continue to hold the Smith Property.

Accordingly, we vacate the court's order to divest the Smith

Property from the Trust and remand to the district court for further

proceedings.

¶25 Despite our decision to remand this aspect of the Smith

Property issue, we affirm, as discussed below, the district court's

rulings related to the Trustees' subsequent conduct in

memorializing the court's May 2009 decision regarding the Smith

Property.

B. The district court appropriately considered the Beneficiaries'

objections.

¶26 The Trustees contend that the court erred

by—implicitly—granting the Beneficiaries' motion to enlarge the

time for filing their objection when it ruled on the Beneficiaries'

objections to the Trustees' proposed order on the May 2009 oral

ruling.11 The Beneficiaries originally responded to the June 5, 2009

proposed order on June 18, after the five-day period for objecting

to a proposed order had expired. See Utah R. Civ. P. 7(f)(2)

(requiring any "[o]bjections to . . . be filed within five days after

service” of the proposed order). They filed a motion to enlarge time

on June 24 that outlined the reasons for the Beneficiaries' delayed

response to the Trustees' proposed order and requested an

extension until June 30 to file a timely objection. Their June 30

objection addressed more fully the Beneficiaries' concerns with the

proposed order, including the order's statement that the Trust

Warner v. Warner

20110078-CA 17 2014 UT App 16

properly held the Smith Property and its award of attorney fees to

the Trustees. The Trustees assert that neither the motion to enlarge

nor the objection demonstrated excusable neglect to justify

extending the time period for filing an objection.

¶27 The Trustees' focus on details of the requirements for a

motion for enlargement of time misses the larger point: A judge has

the inherent authority to ensure that his or her rulings are

accurately memorialized and can correct misstatements of those

rulings at any time, no matter how the error might come to his or

her attention. All courts of general jurisdiction have the

discretionary authority "to make, modify, and enforce rules for the

regulation of the business before the court, . . . to recall and control

its process, to direct and control its officers, including attorneys as

such,” for the purposes of "maintain[ing] and protect[ing] the

integrity and dignity of the court, . . . secur[ing] obedience to its

rules and process, and . . . rebuk[ing] interference with the conduct

of its business.” Barnard v. Wassermann, 855 P.2d 243, 249 (Utah

1993) (first omission in original) (emphasis omitted) (citation and

internal quotation marks omitted).

¶28 The Trustees submitted not one, but two, proposed orders

that stated "the absolute opposite” of the court's oral ruling

regarding the Smith Property. Both proposed orders said that the

Smith Property was properly held in the Trust, directly contrary to

the court's oral direction at the May 2009 hearing for the Trustees

to "get that Smith [Property] out of [the Trust]” and its subsequent

written decision instructing the Trustees to amend the proposed

order "to include appropriate language involving the Smith

Estate.” The Trustees attempt to justify this provision by pointing

out that, at the May 2009 hearing, the district court denied the

Beneficiaries' request to amend their complaint but nevertheless

granted the relief sought in the amended complaint. The Trustees

considered these rulings to be unjustifiably inconsistent. This

explanation is unavailing. The Trustees' decision to simply resolve

the inconsistency in their favor, rather than to raise the

inconsistency with the district court and seek further guidance,

Warner v. Warner

12. The transcript from the May 2009 hearing indicates that the

district court reserved the issue of whether attorney fees ought to

be awarded at all. At that time, the court explained that the "issue

remains” until after the Beneficiaries have "had a chance to look at

it and submit any counter affidavits or objections” and the Trustees

have "submit[ted] that” motion for attorney fees for the court's

consideration. In light of the court's subsequent statements,

however, we will assume that the court's confusion reflected a

reasonable uncertainty about whether it had ordered some award

of fees to the Trustees at the May 2009 hearing, while clearly

leaving open the question of the amount of fees to be awarded.

20110078-CA 18 2014 UT App 16

amounts to a type of self-help at odds with the judicial process. Cf.

Macris v. Sevea Int'l, Inc., 2013 UT App 176, ¶ 28 (stating that parties

may not merely disobey orders with which they are dissatisfied but

must "assert their challenges through orderly and proper

proceedings”).

¶29 Both proposed orders also awarded the Trustees their

attorney fees—$134,000 in the first proposed order and an amount

to be determined in the second. The Trustees' explanation for

including this award is also unconvincing. The Trustees assert that

the fees award resulted from some confusion over the issue that

arose because they had filed an attorney fees affidavit requesting

an award of $134,000 along with their motion for fees on the day of

the May 2009 hearing. The district court, however, called that

explanation into question, stating that it "didn't award $134,000 for

winning one motion,” it "only awarded . . . attorney's fees for

successfully winning that particular motion,” which the court

thought was around $9,500.12 Although the court's own statements

lend some support to the Trustees' claim that there was confusion

about the court's May 2009 ruling on attorney fees, the court

plainly had reason to revisit that issue after learning that the

Trustees included in the first proposed order the entire $134,000 in

attorney fees they had incurred throughout the litigation as

opposed to just the fees incurred in defending against the

Warner v. Warner

13. District courts have considerable discretion in granting a motion

to enlarge time. Stoddard v. State, 2001 UT 47, ¶ 22, 27 P.3d 546.

Under the circumstances here, which include complications

regarding legal representation, well-founded objections to the

accuracy of the proposed order, minimal delay in filing the

objections (a few days at most), and the Trustees' claim of prejudice

being that "the case could have been resolved” in their favor had

the court refused the Beneficiaries an extension of time to object, a

decision to grant the motion to enlarge seems to fall within that

discretion.

20110078-CA 19 2014 UT App 16

Beneficiaries' third motion to amend. In fact, the order the court

ultimately executed—the proposed order submitted by the

Beneficiaries—did not award the Trustees fees even for the third

motion to amend but instead reserved the issue of attorney fees for

future determination.

¶30 The court's decision to correct the order despite the

untimeliness of the Beneficiaries' objection seems to be a

quintessential exercise of the inherent power of the court "to

maintain and protect the integrity and dignity of the court, to

secure obedience to its rules and process, and to rebuke

interference with the conduct of its business.” See Barnard, 855 P.2d

at 249 (citation and internal quotation marks omitted). Therefore,

we affirm the district court's rejection of the Smith Property and

attorney fees provisions of the Trustees' proposed order as an

appropriate and necessary exercise of the district court's inherent

powers without reaching the Trustees' claim that the Beneficiaries'

filing of an objection a few days late was inexcusable.13

C. We will not disturb the district court's order that the

Trustees pay bad faith attorney fees to the Beneficiaries.

¶31 The district court then awarded the Beneficiaries $37,210 in

attorney fees incurred in connection with the dispute over the

Trustees' proposed order from the May 2009 hearing on the basis

Warner v. Warner

14. We have previously held that "[t]he plain language of section

78B-5-825 expressly limits the award of attorney fees to situations

where a party prevails with regard to an 'action' . . . and a

motion—an optional part of a lawsuit—clearly does not equate to

an 'action.'”Dahl v. Harrison, 2011 UT App 389, ¶ 42, 265 P.3d 139

(citing Utah Code Ann. § 78B-5-825 (LexisNexis 2008) (current

version at id. (LexisNexis 2012)) ("In civil actions, the court shall

award reasonable attorney fees to a prevailing party if the court

determines that the action or defense to the action was without

merit and not brought or asserted in good faith.”(emphasis

added)). However, the Trustees have not argued, either in the

district court or on appeal, that the bad faith attorney fees section

is not applicable because the district court had only considered a

motion rather than the entire action. Instead, the Trustees have

focused on the sufficiency of the evidentiary basis to support an

award of bad faith attorney fees. Accordingly, we confine our

analysis to whether there is a factual basis for such an award. See

id. ¶ 41 (distinguishing the decision in that case from the decision

in Rohan v. Boseman, 2002 UT App 109, 46 P.3d 753, where bad faith

attorney fees were awarded on a motion, on the basis that "[t]he

Rohan opinion gives no indication that the plaintiff challenged the

applicability of the relevant statute based on the fact that the trial

court had considered only a motion rather than the entire 'action'”

and that "[i]nstead, the plaintiff challenged the evidentiary bases

for the trial court's conclusions that the plaintiff's refusal to

prosecute and his renewed motion for a continuance showed lack

of merit and bad faith”).

20110078-CA 20 2014 UT App 16

that the Trustees had acted in "bad faith” in preparing a written

"ruling . . . that was 180 degrees different than” the court's oral

decision. The Trustees contend that the award was in error because

the Beneficiaries failed to establish a basis for an award of bad faith

attorney fees and because the court ordered the fees to be paid by

the Trustees individually rather than from the Trust.14

¶32 To prevail on a claim for attorney fees under the bad faith

statute, a party must demonstrate that (1) it was the prevailing

Warner v. Warner

20110078-CA 21 2014 UT App 16

party, (2) the other party's actions were without merit, and (3)

those actions were not done in good faith. Utah Code Ann. § 78B-5-

825(1) (LexisNexis 2012); Still Standing Stable, LLC v. Allen, 2005 UT

46, ¶ 7, 122 P.3d 556. A lack of good faith can be found when the

circumstances demonstrate that a party does not have "[a]n honest

belief in the propriety of the activities in question.” Still Standing

Stable, 2005 UT 46, ¶ 12. Once a party has made a showing that it is

entitled to bad faith attorney fees, the court may award the

reasonable attorney fees incurred by the prevailing party in

responding to the other party's bad faith conduct. Utah Code Ann.

§ 78B-5-825(1). See generally Valcarce v. Fitzgerald, 961 P.2d 305,

317–18 (Utah 1998) (explaining that to receive attorney fees under

the bad faith statute, the prevailing party must demonstrate that

the attorney fees are related to the successful claim or defense).

1. The Beneficiaries were the prevailing party.

¶33 The Trustees argue that the Beneficiaries were not the

prevailing party because "[t]here were dozens of motions” filed

during the fifteen years of litigation and the Trustees "prevailed in

nearly every instance.” The district court's award of attorney fees

to the Beneficiaries had a much narrower focus, however.

Specifically, the district court found that the Beneficiaries had

prevailed in vacating the erroneous order the Trustees submitted,

and the court subsequently signed, on the May 2009 hearing. This

finding is fully supported by the record.

¶34 Due to what appears to be inadvertence, the court signed the

Trustees' inaccurate proposed order, with the result that the

Beneficiaries had to file a motion to alter or amend judgment to

correct the inaccurate rulings on the Smith Property and attorney

fees. At a subsequent hearing convened to resolve the problem, the

court executed an order submitted by the Beneficiaries, which

accurately memorialized the court's May 2009 ruling, effectively

Warner v. Warner

15. Because the court "substitute[d] the Order it signed” at the

hearing for the order it had previously signed, the Beneficiaries

agreed to "withdraw [their] motion” to alter or amend judgment.

20110078-CA 22 2014 UT App 16

resolving the motion to alter or amend judgment in their favor.15

The Beneficiaries, therefore, prevailed both in bringing to the

court's attention the Trustees' misstatements of the court's ruling

and in substituting an accurate order for the one the Trustees had

supplied and the court had mistakenly signed.

2. The Trustees' order was without merit and brought in bad

faith.

¶35 The Trustees next contend that the district court's findings

that their proposed orders lacked merit and were brought in bad

faith were clearly erroneous. The Trustees explain that the court's

oral ruling that they must remove the Smith Property from the

Trust was inconsistent with the court's denial of the Beneficiaries'

motion to amend their complaint to add a claim regarding the

Smith Property. They resolved this inconsistency by submitting a

proposed order that provided, "[The Beneficiaries' argument] . . .

that the Smith Estate property is being improperly held in the

Warner Family Trust . . . is incorrect” because it "was included in

the Trust by the Settlors.” Specifically, the Trustees explain their

decision as being the product of a "good faith belief that the

[court's oral ruling] was void” based on the court's inconsistent

decisions regarding the motion to amend and the requested relief

and its "ambiguous . . . comments on the subject [at] the hearing.”

The Trustees assert that the court clearly denied the motion to

amend and that the court's order to remove the Smith Property

from the Trust was only in response to a mistaken "afterthought”

of the Beneficiaries' counsel. The Trustees claim that the

Beneficiaries' counsel's insistence that the Smith Property was

being improperly held in the Trust was based on a

misunderstanding of the Trust document that, had the Trustees

had an "opportunity to brief the matter, put on evidence, conduct

Warner v. Warner

16. A court may not award attorney fees under the bad faith statute

unless it determines "both that the losing party's action or defense

was 'without merit' and that it was brought or asserted in bad

faith.” Still Standing Stable, LLC v. Allen, 2005 UT 46, ¶ 7, 122 P.3d

556. Ordinarily, these are separate inquiries. Id. ¶¶ 7–10 (explaining

that "the mere fact that an action is meritless does not necessarily

mean that the action is also brought in bad faith”; instead, there

must be independent findings of each (citation and internal

quotation marks omitted)). In this case, however, the Trustees'

conduct, and their explanation for it, clearly demonstrate both lack

of merit and bad faith. Thus, we discuss the two components

together for simplicity, but we note that in doing so, we are

affirming the district court's conclusion that the evidence

independently supports findings of both no merit and bad faith.

20110078-CA 23 2014 UT App 16

discovery, or respond . . . in any meaningful way,” would have

been cleared up. According to the Trustees, had the court known

that the Beneficiaries' counsel was confused, it "would not have

commented that the Smith Estate Property should be removed

from the Trust.” The Trustees further argue that because returning

the Smith Property to the Trust after its removal would pose

difficulties, they "were reluctant to transfer the Smith Property out

of the Warner Trust until further clarification was available.”

¶36 The Trustees' explanation itself, however, demonstrates the

lack of merit in their actions and underscores the validity of the

court's finding of bad faith.16 The district court ruled that the Smith

Property did not belong in the Trust, and it specifically ordered the

Trustees to do "whatever you've got to do to get that Smith

[Property] out of there,” a ruling that it reiterated in response to the

errors in the Trustees' original proposed order. And when

revisiting its May 2009 ruling in conjunction with the Beneficiaries'

motion to alter or amend the inadvertently signed proposed order,

the court stated that its ruling regarding the Smith Property was so

clear that it did not "know how we could sit here, get a transcript,

listen to [the] ruling, and then have an order that comes from the

Warner v. Warner

17. The proposed order's award of attorney fees to Trustees does

not appear to have been a separate basis for the district court's

award of bad faith attorney fees to the Beneficiaries. But the

misconduct associated with the Smith Property ruling is sufficient

to uphold the bad faith finding on its own.

20110078-CA 24 2014 UT App 16

party that was asked to prepare it that is 180 degrees different than

what the court ruled.”

¶37 "Without merit” is a mild description for an action by a

party that purports to correct a perceived (or even actual) error in

a way that undermines the authority of the court and the integrity

of the judicial process. The Trustees' conduct clearly falls within the

scope of what is considered to be bad faith: the Trustees could not

have held "[a]n honest belief in the propriety of the activities in

question.” See Still Standing Stable, LLC v. Allen, 2005 UT 46, ¶ 12,

122 P.3d 556. The impropriety of the Trustees' decision to

unilaterally "correct” the district court's purported error, rather

than pursuing readily available procedural alternatives, is

apparent. The district court's findings that the Trustees' action was

both without merit and in bad faith are therefore well supported.17

Because the Trustees acted in bad faith by submitting proposed

orders for the May 2009 hearing that lacked merit and the

Beneficiaries were the prevailing party in correcting the Trustees'

errors, the award of attorney fees to the Beneficiaries under the bad

faith statute was appropriate.

3. The allocation of fees issue is inadequately briefed.

¶38 The Trustees also claim that the attorney fees award was

improper because the district court failed to limit the award to fees

the Beneficiaries actually incurred in correcting the erroneous

order. In support of this claim, the Trustees assert that the

Beneficiaries' attorney fees affidavit includes "[d]ozens of . . . items

[that] were wholly unrelated to the May [2009] Order” and

"[d]ozens more” activities that related to both the May 2009 order

and other matters without segregating out the relevant activities

Warner v. Warner

20110078-CA 25 2014 UT App 16

from those the Trustees claim to be irrelevant. But nowhere do the

Trustees identify any specific billing entries that are not related to

the May 2009 order or explain what the proper award should have

been if the allegedly unrelated charges had been eliminated.

Instead, the Trustees simply state in conclusory fashion that "[t]he

evidence did not distinguish the fees incurred in the successful

claim from the fees incurred in the unsuccessful claims” and then,

without further analysis of the district court's purported error,

direct our attention to the twelve-page objection they filed in the

district court in which they appear to have disputed sixty-six of the

Beneficiaries' claimed charges. In response to that very objection,

however, the district court determined that "[t]he attorney fees

submitted [by the Beneficiaries] are limited in scope to the grounds

for which the Court awarded attorneys' fees in the first place.”

¶39 To successfully challenge this factual determination on

appeal, the Trustees must "demonstrate that . . . the trial court's

findings are so lacking in support as to be against the clear weight

of the evidence.” Chen v. Stewart, 2004 UT 82, ¶ 19, 100 P.3d 1177

(citation and internal quotation marks omitted). The Trustees

cannot meet that burden by simply repurposing a pleading filed in

the course of the district court dispute, even if we were inclined to

allow their appellate page limits to be stretched to encompass their

district court objection. See, e.g., DeBry v. Cascade Enters., 879 P.2d

1353, 1360 n.3 (Utah 1994) (explaining that a party attempting to

satisfy its marshaling obligation cannot "enlarge the page limit of

their brief” by directing the court to "critical facts” outside the

brief). We therefore decline to disturb the court's finding that the

Beneficiaries incurred $37,210 in attorney fees related to the

Trustees' misstatements in their proposed order from the May 2009

hearing.

¶40 In summary, the district court determined that the

Beneficiaries had prevailed on all matters related to the May 2009

order; that the Trustees' two proposed orders were without merit

because they contained a provision that materially misstated the

court's rulings; that the Trustees could not, in good faith, have

Warner v. Warner

20110078-CA 26 2014 UT App 16

believed that submitting an order contrary to the court's rulings

was appropriate; and that as a result of the Trustees' bad faith in

preparing the May 2009 order, the Beneficiaries incurred $37,210 in

attorney fees. The Trustees have failed to bear their burden of

demonstrating that these findings were clearly erroneous, and we

therefore affirm the district court's award of attorney fees to the

Beneficiaries. We now consider whether the court appropriately

ordered the Trustees to be individually responsible for those fees.

4. The district court did not err in requiring the Trustees

individually to pay the attorney fees.

¶41 The Trustees assert that the district court erred when it

prohibited them from "us[ing] funds from the . . . Trust to pay

attorneys' fees and costs incurred in connection with the actions the

Court has found [the Trustees] took in bad faith in this litigation,

including . . . the award of [the Beneficiaries'] fees and costs

incurred as a result of [the] May [2009] Order.” They complain that

the court, in effect, required the Trustees to bear the costs

themselves despite the fact that the court never "found

wrongdoing or a violation of fiduciary duties” on their part. See

generally Utah Code Ann. § 75-7-1004(2) (LexisNexis Supp. 2013)

(allowing trustees reimbursement from the trust when they

"defend[] or prosecute[] any proceeding in good faith”). They thus

contend that "[t]o assess attorneys' fees against the[m] . . . as

individuals punishes them for attempting to protect the Trust.”

¶42 To support their contention, the Trustees point to the fact

that they had successfully defeated all the causes of action the

Beneficiaries asserted against them, including multiple claims that

the Trustees breached their fiduciary obligation. The Trustees again

fail to acknowledge that the court's order that they pay the

Beneficiaries' attorney fees was limited to those fees incurred in

connection with the Trustees' bad faith in preparing the order

memorializing the court's oral ruling. The district court specifically

found that the Trustees "lacked an honest belief in the propriety of

the activities in question” when they "prepare[d an order] that

Warner v. Warner

20110078-CA 27 2014 UT App 16

is 180 degrees different than what the court ruled.” We have

already upheld the court's bad faith finding against the Trustees'

challenge. See supra ¶¶ 35–37. Because trustees are only entitled to

reimbursement from the trust when they defend in good faith,

see Utah Code Ann. § 75-7-1004(2), the court's refusal to allow the

Trustees to use Trust funds to pay the fees incurred due to their

bad faith conduct was appropriate.

II. The District Court's Decision Not To Award Attorney Fees to

the Trustees

¶43 The Trustees' next contention is that the district court

wrongly denied their requests for an award of attorney fees against

the Beneficiaries. Generally, a party is entitled to attorney fees only

"when authorized by contract or by statute.” Bilanzich v. Lonetti,

2007 UT 26, ¶ 11, 160 P.3d 1041. The Trustees assert two statutory

bases for attorney fees: the bad faith statute and section 1004(1).

¶44 As previously noted, a party seeking to collect attorney fees

under the bad faith statute must demonstrate, among other things,

that the other party's claims were not asserted in good faith. Utah

Code Ann. § 78B-5-825(1) (LexisNexis 2012); Still Standing Stable,

LLC v. Allen, 2005 UT 46, ¶ 7, 122 P.3d 556. Attorney fees can be

awarded against a party under section 1004(1) when "justice and

equity” so require. Utah Code Ann. § 75-7-1004(1) (LexisNexis

Supp. 2013) ("In a judicial proceeding involving the administration

of a trust, the court may, as justice and equity may require, award

costs and expenses, including reasonable attorney's fees, to any

party, to be paid by another party or from the trust that is the

subject of the controversy.”).

¶45 The district court denied the Trustees' request for attorney

fees under both statutes. Specifically, the court found that the

Beneficiaries asserted their claims in good faith, thus precluding an

award of fees under the bad faith statute. Regarding the Trustees'

claim for attorney fees under the trust statute, the court concluded

that section 1004(1) was not applicable because it applies only to

Warner v. Warner

18. Without any citation to authority or meaningful analysis of the

statutory language, the Trustees treat section 1004(1)'s "justice and

equity” standard for awarding fees against another party as if it

were simply coextensive with the standard for an award based on

that party's bad faith under the bad faith statute. The "justice and

equity” standard may well include circumstances where one party

has acted in bad faith but does not seem to be confined to such

circumstances. See, e.g., In re United Effort Plan Trust, 2012 UT 47,

¶ 23, 289 P.3d 408 (discussing circumstances that may invoke the

(continued...)

20110078-CA 28 2014 UT App 16

"clients [who] . . . don't have any official status” that entitles them

to reimbursement of fees from the Trust. And the court reasoned

that the Trustees were entitled to have their attorney fees paid by

the Trust under subsection (2) of the trust statute, which provides

for reimbursement to a trustee of any attorney fees incurred in

defending the trust in good faith. See id. § 75-7-1004(2) ("If a trustee

defends or prosecutes any proceeding in good faith, whether

successful or not, the trustee is entitled to receive from the trust the

necessary expenses and disbursements, including reasonable

attorney's fees, incurred.”).

¶46 The Trustees challenge both rulings. The Trustees assert that

they are entitled to bad faith attorney fees because, contrary to the

district court's finding, the Beneficiaries' "conduct clearly qualified

as bad faith” where they "knew or should have known that their

attempts to amend the pleadings were lacking in propriety” and

yet they "repeatedly brought meritless claims . . . , with the only

apparent purpose being to stall the litigation and hinder the

Trustees from exercising their proper authority” under the Trust.

The Trustees also contend that the court "misconstrued” the trust

statute in determining that section 1004(1) could not apply to a

trustee. Specifically, the Trustees assert that the Beneficiaries

"should reimburse the Trust” for the attorney fees incurred by the

Trustees, and paid for by the Trust, to defend against the

Beneficiaries' "frivolous litigation.” In this regard, the Trustees

seem to equate the "justice and equity” standard with bad faith.18

Warner v. Warner

18. (...continued)

"justice and equity” standard, including among other things, the

opposing party's "'act[ing] in bad faith, vexatiously, wantonly,

or for oppressive reasons'” (quoting Atwood v. Atwood, 2001 OK

CIV APP 48, ¶ 47, 25 P.3d 936)). For purposes of this appeal, we

will assume that "justice and equity” may include bad faith for

purposes of section 1004(1).

20110078-CA 29 2014 UT App 16

Thus, the Trustees appear to rely on two different statutes to

support their claim for attorney fees, but they assert the same

standard for recovery under each: that the Beneficiaries acted in

bad faith.

¶47 The district court, however, found that the Beneficiaries had

not acted in bad faith during the course of the litigation, and the

Trustees have failed to adequately challenge this finding. See Still

Standing Stable, 2005 UT 46, ¶ 8 ("[W]hether . . . a claim was

brought in bad faith is a question of fact [that] we review . . . under

a clearly erroneous standard.” (alteration and second omission in

original) (citation and internal quotation marks omitted)). The

Trustees include, in the statement of the case section of their brief,

"Facts Regarding [the Beneficiaries'] Bad Faith,” along with some

relevant record citations. The next five-and-a-half pages only

include facts that tend to contradict the court's finding that the

Beneficiaries acted in good faith. Moreover, the Trustees do not

analyze the court's good faith finding in relationship to those facts

in any meaningful way. Rather, they simply conclude that the court

was wrong, that there was ample evidence of bad faith, and then,

to support that conclusion, they refer us to a lengthy addendum.

Our supreme court rejected just such an approach in DeBry v.

Cascade Enterprises, 879 P.2d 1353 (Utah 1994):

[The appellants] purport to marshal the evidence . . .

[by referring to] an appendix to their brief which,

together with the pages in the brief, exceeds the page

limitation allowed by Rule 24(g) of the Rules of

Appellate Procedure. This does not comply with the

Warner v. Warner

20110078-CA 30 2014 UT App 16

requirement to marshal evidence. It is improper for

counsel to attempt to enlarge the page limit of the

brief by placing critical facts in appendices.

Id. at 1360 n.3. Further, the Trustees' appendix, entitled

"[Beneficiaries'] Frivolous and Without Merit Accusations Vs.

Facts,” consists of thirty single-spaced pages describing a wide

variety of acts by the Beneficiaries—over a period that extends for

twenty-three years—that the Trustees contend demonstrate the

Beneficiaries' ill will and bad faith. This litany encompasses not

only activities during the course of the litigation but at private

family events as well. The addendum provides nary a citation to

the record to support its statements of fact, and its conclusions are

largely polemical.

¶48 This approach is inadequate to carry the burden of

challenging a court's finding of fact on appeal because, among

other things, the Trustees have violated the page limit rule, relied

extensively on facts that have no apparent grounding in the record,

and failed to even address the record evidence in support of the

district court's finding of good faith. We therefore will not disturb

the district court's finding that the Beneficiaries acted in good faith.

See Hale v. Big H Constr., Inc., 2012 UT App 283, ¶ 9, 288 P.3d 1046

(explaining that a district court's findings of fact "shall not be set

aside unless clearly erroneous,” and a "finding is clearly erroneous

only if the finding is without adequate evidentiary support”

(citations and internal quotation marks omitted)); see also Martinez

v. Media-Paymaster Plus/Church of Jesus Christ of Latter-day Saints,

2007 UT 42, ¶ 19, 164 P.3d 384 (explaining that when a party fails

to marshal the evidence, it "do[es] so at the risk that the reviewing

court will decline, in its discretion, to review the trial court's factual

findings”). A finding that a party acted in good faith is necessarily

fatal to the other party's claim for bad faith attorney fees. We

therefore affirm the district court's decision to deny the Trustees'

request for an award of attorney fees against the Beneficiaries

under the bad faith statute. And because the Trustees cite only the

Beneficiaries' purported bad faith as the basis for an award of

Warner v. Warner

19. The Trustees also contend that the district court's denial of

attorney fees under section 1004(1) on the basis that section 1004(1)

does not apply to trustees, who ordinarily are reimbursed under

subsection (2) of that statute, was error. The Trustees' position may

find some support in a case they did not cite, In re United Effort Plan

Trust, 2012 UT 47, 289 P.3d 408, where the Utah Supreme Court

explained that while subsection (2) "provide[s] the usual

mechanism for a trustee's payment for trust administration,”

subsection (1) "provides an alternative mechanism in unusual

circumstances where justice and equity require a different source

of payment” than reimbursement from the trust itself. Id. ¶ 20. But,

because the Trustees have not demonstrated that they are entitled

to attorney fees under section 1004(1) in any event, this argument

is unavailing.

20110078-CA 31 2014 UT App 16

attorney fees based on "justice and equity” under section 1004(1)

of the trust statute, the district court's decision on this ground must

be upheld as well.19

III. Cross-appeal

¶49 On cross-appeal, the Beneficiaries raise two issues. First,

they assert that the district court erroneously granted summary

judgment to the Trustees on the Beneficiaries' breach of fiduciary

duty claims. Second, they contend that the district court

improperly denied their three motions to amend. We affirm both

the grant of summary judgment to the Trustees and the denials of

the motions to amend, except to the extent that the third motion to

amend implicates the Smith Property.

A. Denial of the Beneficiaries' Motion for Summary Judgment

¶50 To succeed in their claim that the district court's summary

judgment decision was in error, the Beneficiaries must demonstrate

that there are genuine issues of disputed material fact pertaining to

the elements of the cause of action. See Utah R. Civ. P. 56(c)

Warner v. Warner

20110078-CA 32 2014 UT App 16

(explaining that a grant of summary judgment is appropriate only

when "there is no genuine issue as to any material fact and . . . the

moving party is entitled to a judgment as a matter of law”).

¶51 The Beneficiaries have not met their burden on appeal.

Nowhere in the two pages they devote to the issue do the

Beneficiaries identify the elements of their breach of fiduciary duty

claims; rather, they simply list a series of breaches alleged to have

been committed by the Trustees without any analysis of the

pertinence of those breaches or any discussion of how they create

a factual dispute of legal significance when compared with the facts

and arguments made by the Trustees in the course of the summary

judgment proceeding. The Beneficiaries' cursory and incomplete

description of the procedural, factual, and legal circumstances of

the summary judgment proceeding thus fails to provide context

sufficient for the district court's decision to permit meaningful

appellate review. Without such context, the Beneficiaries have not

persuaded us that the district court's grant of summary judgment

was incorrect. We therefore affirm the summary judgment

decision. See Allen v. Friel, 2008 UT 56, ¶ 9, 194 P.3d 903.

B. Denial of Motions To Amend

¶52 The Beneficiaries' second claim on cross-appeal is that the

district court improperly denied their three motions to amend: the

first in 1999, which sought to add a claim of equitable modification

of the Trust to distribute all its assets and dissolve the Trust due to

the continuing animosity between the Trustees and the

Beneficiaries and Alan Warner's recent loss of employment and

consequent financial need (the 1999 motion); the second in 2001,

which sought to reform the Trust or partition the Trust property

due to the ongoing acrimony between the siblings (the 2001

motion); and the final motion in 2007, which sought primarily to

have the Smith Property removed from the Trust but also included

Warner v. Warner

20. Although the Beneficiaries use different terminology to describe

their additional causes of action in each motion to amend, they

largely allege the same "misconduct” by the Trustees, including

retention of Trust assets in addition to the vacation property and

securities contrary to the provisions of the Trust, failure to

distribute liquidated Trust assets, interference with Alan Warner's

ability to participate as a trustee, and refusal to provide water

necessary to the Beneficiaries' enjoyment of the vacation property.

20110078-CA 33 2014 UT App 16

claims for distribution of other Trust assets and provision of water

to the shared vacation property (the 2007 motion).20

¶53 Under rule 15 of the Utah Rules of Civil Procedure, a party

may seek permission from the court to amend his or her complaint

and "leave shall be freely given when justice so requires.” Utah R.

Civ. P. 15(a). This means that trial courts should "liberally allow

amendments,” but certain factors, such as untimeliness, futility,

prejudice to the other side, and bad faith, "may weigh against the

trial court's allowing amendment.” Daniels v. Gamma W.

Brachytherapy, LLC, 2009 UT 66, ¶ 58, 221 P.3d 256 (citations and

internal quotation marks omitted). The power to grant leave to

amend, therefore, lies within the court's discretion, and we will not

disturb the court's decision unless the court has exceeded its

discretion and prejudice results. Id. ¶¶ 57, 60; Jones v. Salt Lake City

Corp., 2003 UT App 355, ¶ 7, 78 P.3d 988 ("We will not disturb the

trial court's ruling [on a motion to amend] absent an abuse of

discretion resulting in prejudice.” (citation and internal quotation

marks omitted)). Except to the extent that our decision to remand

for further proceedings on the removal of the Smith Property

implicates the 2007 motion, we affirm the district court's denial of

the Beneficiaries' three motions to amend.

1. The 1999 Motion

¶54 The district court denied the Beneficiaries' 1999 motion to

add a claim of equitable modification because "there is no showing

Warner v. Warner

20110078-CA 34 2014 UT App 16

that the proposed amendments to the complaint will legitimately

address proper issues in this case.” The Beneficiaries now assert

that this statement was "not correct.” They do not, however,

analyze any of the factors that the district court must consider

when weighing whether justice requires amendment. See, e.g.,

Daniels, 2009 UT 66, ¶ 58 (identifying "unjustified” as one of the

factors weighing against allowing amendment). Moreover, the

court denied the 1999 motion without prejudice, specifically

informing the parties that the "issue may be revisited upon

presentation of proper evidence justifying amendment.” Thus,

even if the court ought to have allowed amendment, the

Beneficiaries have not demonstrated any prejudice resulting from

the denial. See Jones, 2003 UT App 355, ¶ 7 (requiring a showing of

prejudice to justify reversing the denial of a motion to amend).

Accordingly, we will not disturb the court's decision to deny the

1999 motion.

2. The 2001 Motion

¶55 Two years later, the Beneficiaries filed a second motion to

amend, in which they asserted claims for reformation of the Trust

or partition of the Trust property due to ongoing disputes and

acrimony among the siblings. The district court denied this motion

because its "clear intent” was "to avoid the discretionary authority

of the trustees and other provisions of the trust” without "a proper

basis for the amendment.” The Beneficiaries argue that denial of

the 2001 motion was an abuse of discretion because the court

acknowledged that the Trustees' management of the Trust raised

"concerns” yet the court refused to address them through judicial

intervention. A review of the Beneficiaries' proposed amendments

indicates that the additional causes of action are essentially the

same as those they attempted to include in 1999. In this regard,

they appear to have taken up the district court's invitation, in

connection with its denial of the 1999 motion, to refile the motion

to amend when they could provide a more robust basis for doing

so. Yet, the Beneficiaries again simply identify the alleged

mismanagement and the court's concerns and then summarily

Warner v. Warner

21. Although the district court did not expressly state that its denial

of the 2001 motion to amend was without prejudice, it implied that

the Beneficiaries had leave to file a new motion to amend in the

future when it said that there is "presently no basis” for allowing

the relief the Beneficiaries sought. See generally Jones v. Salt Lake City

Corp., 2003 UT App 355, ¶ 7, 78 P.3d 988 (requiring a showing of

prejudice to justify reversing the denial of a motion to amend).

20110078-CA 35 2014 UT App 16

conclude that the court abused its discretion in denying the motion

to amend without analyzing the factors relevant to whether a

motion to amend should be allowed. In the absence of briefing

sufficient to demonstrate how the court abused its discretion, we

must uphold the district court's decision to deny the motion to

amend.21 See Daniels, 2009 UT 66, ¶ 58.

3. The 2007 Motion

¶56 Finally, the Beneficiaries take issue with the district court's

decision to deny their third motion to amend, seeking to remove

certain Trust assets, including the Smith Property, from the Trust

and to require the Trustees to provide water to the shared vacation

property. As discussed in part I.A. of this opinion, see supra

¶¶ 19–25, we are remanding to the district court the issue of

whether the 2007 motion ought to be allowed to the extent it

requests leave to add a claim to distribute the Smith Property. We

affirm the district court's denial of the remainder of the 2007

motion.

¶57 The district court denied the motion to amend on a number

of grounds, including that the Beneficiaries' new claims did not

relate back to the original complaint because they did not arise out

of the same conduct as the original causes of action, were time

barred by the statute of limitations and doctrine of laches, and were

barred by the doctrines of res judicata and law of the case. Except

in one footnote, the Beneficiaries do not address any of these bases

for the court's decision; rather, they simply assert that the court

Warner v. Warner

22. Even in the footnote where the Beneficiaries assert that the

court's statement that the Trust "money had been spent” did not

constitute a proper basis for denying the motion to amend, the

Beneficiaries do not provide any authority or explanation for why

the statement was insufficient to support the decision to deny the

motion. Their argument is merely conclusory.

20110078-CA 36 2014 UT App 16

"failed to articulate a sufficient basis [for] denying the motion to

amend.” This is insufficient 22 to satisfy the Beneficiaries' burden of

demonstrating error on appeal. See Utah R. App. P. 24(a)(9)

(requiring the appellant to include "contentions and reasons” for

challenging the court ruling "with citations to the authorities . . .

relied on”); see also Benns v. Career Serv. Review Office, 2011 UT App

362, ¶ 2, 264 P.3d 563 (per curiam) ("If an appellant does not

challenge the lower court's basis for its judgment, the lower court's

determination is placed beyond the reach of further appellate

review . . . .”). Accordingly, except as it relates to the Smith

Property, we affirm the denial of the 2007 motion to amend.

CONCLUSION

¶58 We affirm the district court's rulings in all but one respect.

The district court denied the Beneficiaries' 2007 motion to amend

the complaint to add a claim to distribute the Smith Property but

then ordered the Trustees to remove the property from the Trust.

On that narrow issue, we vacate the district court's order relating

to the Smith Property and remand to the district court for further

proceedings in accordance with this opinion.

ON PETITION FOR REHEARING

¶59 After issuance of our decision in this case, the Beneficiaries

filed a petition for rehearing. We now address two of the issues the

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20110078-CA 37 2014 UT App 16

Beneficiaries raise: (1) their request for reconsideration of whether

their 2006 first amended petition was properly before the district

court when it entered its ruling regarding the Smith Property, see

supra ¶ 7 n.6 (assuming that the first amended petition was not

before the court when it ordered the Smith Property out of the

Trust), and (2) their request for attorney fees incurred in defending

the bad faith attorney fees award on appeal.

I. Reconsideration of the Status Below of the 2006 First Amended

Petition

¶60 According to the Beneficiaries, the record states that they

had permission to file the first amended petition and in the absence

of any express written record entry by the district court to the

contrary, this court can only assume that the first amended petition

was properly before the district court. The Trustees counter that

there is no motion for leave to amend the petition in the record,

which supports this court's reliance on the Trustees' later

representation that the first amended petition had been withdrawn

in favor of the third motion to amend. See supra ¶ 7 n.6.

¶61 An appellate court is ill equipped to resolve a factual dispute

regarding the procedural history of a motion where there is no

explicit ruling on the motion in the record. But even if the

Beneficiaries are correct that the first amended petition had been

duly authorized by the district court prior to the time the court

ordered the Smith Property out of the Trust, they do not

necessarily prevail on appeal. The district court must still consider

the Trustees' claim that other provisions of the Trust permitted

retention of the Smith Property. See supra ¶¶ 22–23. Accordingly,

our order that this issue be remanded for further proceedings

stands, with the additional direction to the district court to resolve

the dispute regarding whether the 2006 first amended petition was

properly before the court, i.e., whether the court had granted leave

to file the pertinent amended petition.

Warner v. Warner

23. The Beneficiaries requested their attorney fees on appeal in their

original appellate briefing. But the request was made at the end of

the Beneficiaries' response to the Trustees' contentions regarding

the district court's award of bad faith attorney fees against them,

and we overlooked it in our original decision.

20110078-CA 38 2014 UT App 16

II. Request for Attorney Fees on Appeal

¶62 The Beneficiaries have also requested their attorney fees

incurred in defending the bad faith attorney fees award on appeal,

"consistent with our settled view that a party who received an

award of attorney fees below is entitled to [its] fees on appeal,”

Glew v. Ohio Sav. Bank, 181 P.3d 791, 798 (Utah 2008) (order

granting attorney fees on appeal).23 The Trustees oppose an award

of attorney fees on the basis that the Beneficiaries received their

attorney fees in the district court pursuant to the bad faith statute

and there has been no suggestion that the appeal was made in bad

faith. According to the Trustees, an award of fees would "exceed[]

the purpose of the bad-faith statute” and serve only to punish them

for seeking appellate review.

¶63 In Valcarce v. Fitzgerald, 961 P.2d 305 (Utah 1998), the Utah

Supreme Court applied the settled rule to award the prevailing

party attorney fees incurred on appeal even though the basis for

the award below was the bad faith statute. Id. at 319. And our own

court has followed Valcarce in awarding attorney fees incurred on

appeal in similar circumstances. Livingston Fin., LLC v. Migliore,

2013 UT App 58, ¶¶ 9, 11, 299 P.3d 620 (per curiam), cert. granted,

308 P.3d 536 (Utah July 10, 2013) (No. 20130337); Dantine v. Shores,

2011 UT App 392, ¶¶ 6–7, 266 P.3d 188 (per curiam). Accordingly,

based on Valcarce and our own subsequent precedent, we award

the Beneficiaries their attorney fees incurred in defending against

the Trustees' appeal of the award of bad faith attorney fees. We

remand to the district court for a determination of the amount of

fees reasonably incurred and properly allocable to this one issue.

¶64 In summary, we decline to reconsider whether the 2006

Amended Petition was before the district court when it ordered the

Smith Property out of the Trust but remand the question to the

district court to address in conjunction with its consideration of the

Trustees’ claims that they were permitted to retain the Smith

Property in the Trust. On remand, the district court should also

determine the amount of fees the Beneficiaries reasonably incurred

on appeal to defend the bad faith attorney fees award. The petition

for rehearing is otherwise denied.