In 2005, Jerry Cooper caused to be filed a document with the Utah County Recorder’s office.  That filing would come back to haunt him.

The document bore the title ”Administrative Judgment.”  Now, that is not a document that I’ve ever seen filed at the County Recorder’s office. What’s important to understand is that the County Recorder doesn’t really examine documents to make sure they are legal before recording them.  Unless the document has a major error on its face, the County Recorder allows the document to be filed.  It’s then up to those concerned to determine whether it is valid.

In this case, the document said that it was a $4.5 million judgment against Lynn Davis.  Apparently, Judge Davis had signed an order quieting title to a piece of property.  Apparently, that did not sit well with Jerry Cooper.  In retaliation, he caused the “Administrative Judgment” to be filed.

So what is an “Adminstrative Judgment?”  It’s nothing.  It’s something that Jerry Cooper just made up.

That type of thing isn’t unheard of. There are dozens, if not hundreds, of “constitutionalists” running around this county.  They study the constitution, and more importantly, they study each other’s interpretations of the constitution.  At the end of the day, they come up with some pretty crazy ideas.

I was saw a criminal defendant argue that the District Court did not have jurisdiction over him because the U.S. flag in the court room had a fringe on it.  That fringe, destroyed the authority of the court.  Now, I’ve studied the U.S. Constitution.  No where does it say that if a court has a flag with a fringe, that court is invalid.  Even so, that defendant was passionate in his belief that the constitution prohibited flags with fringes.

I’m not sure where Jerry Cooper’s “Administrative Judgment” came from.  I can guess that under his interpretation of the U.S. Constitution, he was able to create his own court and hold a trial where he served as judge and jury.  The result was a $4.5 million judgment against Judge Davis.

If had created his own County Attorneys office and filed his judgment there, he would have been fine.  The problems arose when he filed his “Judgment” in the Utah County Attorney’s office.

The problem arose because if Judge Davis had attempted to buy or sell real property, a title company would have found the “Judgment” and would have refused to insure the transaction.  False ”Judgments” can have serious deleterious consequences when recorded with the Utah County Recorder.

In the end, Jerry Cooper was charged with four felonies for filing a “wrongful lien” with the Utah County Recorder.  He represented hmself at trial, never a good idea, and lost.  The jury convicted him on all four counts.

On appeal, he made some decent arguments.  Even if his arguments had some traction, he still lost.  Mostly because during the trial he did a poor job of preserving issues for appeal.

The Supreme Court issued a decision today, titled Selvig v. Blockbuster.  The case involves an alleged breach of a real estate purchase contract.  In footnote 8 of the dissent, the Supreme Court cites McKeon v. Crump.  That’s a 2002 case in which I was involved as the attorney for the McKeons.

I’m still sore about that case because I lost it and I didn’t think I should. Sometimes, as an attorney, you’ve got a case that you know is tough but you’ve got a shot.  If you win it, you feel great.  If you lose it, you chalk it up as a loss that your probably deserved.  In McKeon v. Crump, that was not the case.  I thought I would win the whole thing.

What happened in that case was that I came in late.  Another attorney had already filed the complaint and started discovery.  When I got hired, I realized  that my clients had not elected the remedy.  Before filing suit, they were either supposed to return the earnest money.  If they didn’t return the earnest money, they weren’t allowed to file suit.  They were considered to have “elected” their remedy, ie. forfeiture of the earnest money.

When I got hired, I realized that.  We went forward anyway.  One day, the opposing attorney called and wanted me to concede an issue in the case.  I told him I would if he would allow my client to return the earnest money and stipulate that the earnest money was returned timely.  He agreed.

At the close of trial, the opposing attorney argued that the earnest money had not been returned timely.  I argued that he had stipulated that it had.  The judge said that the timeliness of the return of the earnest money was not open to negotiation between the parties.  I said, “the requirement to return the earnest money was created by an agreement of the parties and therefore it could be waived by agreement of the parties.  The judge disagreed and my client lost at trial.

We appealed and lost again.

That case still smarts.  Opposing counsel made an agreement and then promptly breached it.  I still think my client should have won.

A Payson woman must pay attorneys fees to the defendant for filing a frivlous lawsuit.

Kim Bowers filed a lawsuit against John Call regarding a boundary line dispute.  The case was assigned to Judge McDade in Provo.  Call hired an attorney and filed a motion for summary judgment.  When Bowers could not show any evidence to support her claim, Judge McDade granted summary judgment in favor of Call.

Judge McDade She lost the case on summary judgment.  In other words,

Arthur and Gail Benjamin sold a business in late 2003 and earned a $6,000,000 plus profit.  At the time, they lived in Sandy Utah.  Utah has a flat 5% tax rate.  If they were residents of Utah at the time of the sale, they would have owed more than $300,000 in taxes to Utah.

In order to reduce their tax liability, the Benjamin’s hired an attorney.  Mr. Benjamin asked the attorney if they could avoid paying taxes by moving to Nevada.  The attorney outlined what they needed to do to make it effective but cautioned them that even then it was a 50/50 chance of holding up in court.

Mr. Benjamin did not like the advice.  He criticized the attorney saying his advice was “by the book” and “very uncreative to boot.”  Mr. Benjamin then sought advice from an accountant.  The accountant told him to sell the Utah home, buy a Nevada home, and spend at least 183 days per year in Nevada.  Not liking that advice, Mr. Benjamin then sought advice from an investment adviser.  The investment adviser told him to set up a house in Nevada.

That is exactly what Mr. Benjamin did.  He bought a house in Nevada but continued to live mostly in his Utah home. When he didn’t pay income taxes in Utah, the Utah State Tax Commission ordered him to pay taxes on the income, plus a 10% penalty.

In a decision issued today, the Utah Supreme Court backed up the Utah State Tax Commission.

While I haven’t ever represented anyone involved in this lawsuit, as an attorney I’ve had several experiences similar to this.  One experience is very similar.

I had a young man come into my office looking for advice on investing in real estate.  He had a plan all set up.  I analyzed his plan and told him it was illegal.  He didn’t like that advice.  He told me that he learned the method at a seminar and that I was obviously wrong.  I didn’t know what I was talking about.  He told me he was rejecting my advice and would find another attorney who would agree with him.  He eventually did.

I never saw his name in the paper so I don’t know if he went forward with his plan.  I did hear about other people getting arrested for doing something similar.

My point is that when you go to an attorney or an accountant for advice and you don’t like it.  Don’t go shopping for someone who agrees with you.   That’s a good way to get into trouble.

Provo Mayor John Curtis has become involved in helping the residents of The Boulders apartment complex.  They have been without hot water and heat for a week now, due to a corroded natural gas line.  Hopefully, Mayor Curtis can help.

In the meantime, I thought this a good opportunity to post about the rights of tenants in Utah.  Unfortunately, for tenants, the law in Utah is written in favor of landlords.

Traditionally, tenants had no rights against landlords when the premises was uninhabitable.  If you think about it, that actually makes sense.  Hundreds of years ago, when the law arose, tenants generally rented raw land from a landlord.  The tenant was responsible for digging their own outhouse, digging their own well and chopping their own firewood.

Times have changed.  Nowadays, many renters expect the landlord to deliver a finished housing unit, complete with utilities.  That is especially true in apartment buildings.

In 1990, the Utah legislature passed a law that requires landlords to do just that.  The law can be found at Utah Code 57-22-4.  Among other things, it requires a landlord to maintain plumbing, heating and hot and cold water.

So what happens if a landlord doesn’t do that.  Unfortunately, for the tenant, not much.  To benefit from the law, the tenant must give written notice to the landlord.  This doesn’t sound like a big deal but many tenants are unaware of this requirement.  The written notice must contain certain information and must be served on the landlord in a specific way.  In my experience, tenants often phone or email.  When that happens, they can’t take advantage of the law.  Another problem with the law is that the tenant can only benefit from the law if the tenant complies with a long list of requirements. One of those requirements is that the tenant is current on his or her rent.  This is a problem for tenants who stop paying rent when the heat goes off.  Their failure to pay rent, relieves the landlord from any obligation to fix the problem.

Once the tenant gives written notice of the defect, the landlord gets three days to fix the problem.  If the landlord doesn’t want to fix the problem, the landlord can choose to terminate the lease and the tenant must leave.  If the landlord terminates the lease, the tenant must pay rent in full up to the time the lease is terminated.  This requires the tenant to pay rent after losing heat and hot water up until the time the landlord elects to terminate the lease.

So you might be wondering, what rights does a renter get from this statute.  Here are the tenant’s remedies:

1.  If the landlord fails to repair the problem, within three days, the tenant is allowed to either (a) fix the problem and deduct the repair price from the rent or (b) terminate the lease and move out.  In that case, the tenant gets rent refunded back to the time of the three day notice.

So how does this apply to the Boulders?  Because the landlord has failed to maintain hot water and heat, the landlord is in breach of the statute.  Each resident must give a written notice to the landlord and then give the landlord three days to fix the problem (the statute doesn’t say how long this is).  If the landlord still doesn’t fix the problem, each tenant can elect to either fix the problem and then deduct the repair cost from future rents or move out.

This isn’t much of a remedy for residents of The Boulders.  Because the repair is quite expensive, most tenants cannot afford to fix it and then deduct that cost from future rents.  Instead, their only real remedy is to move out.

The tenants have one other possible remedy.  In 1991 the Utah Supreme Court did give tenants some rights under the common law.  The court said that every residential lease automatically has a “warranty of habitability” written into it.

Boulder’s residents could argue that failing to maintain hot water and heat in the complex for an entire week is a breach of that warranty.  Further, since the landlord breached the rental contract, the tenants are entitled to leave.  If the landlord sues them for leaving early, they can raise a defense to that lawsuit and win.

The problem with this is that no appellate court has decided this exact issue.  The closest case is a 2007 case in the Court of Appeals.  In that case, the Salt Lake County Health department cited a landlord for numerous violations.  The premises were infested with cockroaches, the swamp cooler leaked, a toilet leaked and the house had many other problems.  The trial judge (Judge Iwasaki) found that the conditions were unbearable, inconvenient and uncomfortable.  Nevertheless, he said the home was habitable.  Therefore, the landlord did not breach the contract.  The Court of Appeals sustained Judge Iwasaki’s decision.

The residents of the Boulders have a slightly better argument.  The law passed by the legislature uses the word “habitbility” several times and seems to say that failing to maintain heat and water makes the premises uninhabitable.  If the courts were to apply that statutory language to the implied warranty of habitability, the Boulder tenants should win.

This incident illustrates the need for a tenants bill of rights in Utah.  Tenants need some sort of remedy that is tailored to their financial ability to comply.  Most tenants cannot afford an attorney and don’t understand the legal nuances that the law imposes on them.

The Court of Appeals affirmed a trial court order requiring Brighton Title Company to pay more than $232,000 to Cooper Enterprises.

This case started when Cooper signed a contract to buy real property.  Cooper then went out and found a buyer for the property.  That buyer was Deseret Sky Development.  Cooper apparently lacked the funds to buy the property and then sell it.  So Cooper tried to set up the transaction as a flip.  In other words, Cooper would use the funds from Deseret to purchase the property.

This type of transaction was fairly common not too long ago.  People would enter into contracts to buy property at a low price, find a buyer at a higher price and then flip the property.  The middleman could make a boat load of money and only own the property for a few minutes.

Problem was, the State decided that these transactions were adding to the housing bubble.  The State tried to stop them.  In 2007, the Utah Insurance Commission prohibited title companies from participating in land flips.  In order to get involved, a title company would be required to make sure that the two transactions happened independently and with different funds.  In other words, Cooper would be required to come up with its own money to buy the property before it could sell the property to Deseret.

So how did Brighton end up owing so much money to Cooper?  What happened was that Deseret gave earnest money to Brighton.  Brighton was supposed to hold that money and apply it to the purchase price.  If either buyer or seller breached the contract, Brighton was supposed to give the earnest money to the non-breaching party.

Unfortunately for Brighton, Brighton panicked.  Brighton realized that it could not close the transaction because of the insurance commission rule.  Brighton also realized that under State law it could not act as an escrow agent unless it wrote title insurance.   Not knowing what to do, Brighton gave the money to Deseret, the buyer.  Deseret then promptly breached the contract with Cooper, the buyer.  Cooper then sued Deseret and Brighton.

Unfortunately for Brighton, Deseret promptly went out of business.  That meant that the only way Cooper could get the earnest money was for Brighton to pay it.  Both the District Court and the Court of Appeals held that Brighton breached its fiduciary duty to Cooper.  Brighton should have given the money to Cooper since Deseret was the party who breached.

The fact that Brighton had already given the money to Deseret didn’t matter.  Brighton will now have to reach into its own pocket and give the money to Cooper.  Not only that, Brighton also has to pay interest and court costs.

Brighton can go after Deseret.  That doesn’t look hopeful.  Deseret is out of business and has a dozen lawsuits filed against it.  One of those lawsuits has already resulted in a judgment against Deseret for over $1,000,000.  The old saying goes, you can’t squeeze blood from a turnip.