VR Acquisitions v. Wasatch County et al

Filing 205

MEMORANDUM DECISION and ORDER denying 177 Motion for Attorney Fees; denying 181 Motion for Attorney Fees. Signed by Judge Dale A. Kimball on 2/22/2016. (eat)

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION

VR ACQUISITIONS LLC,
MEMORANDUM DECISION
AND ORDER

Plaintiff,
vs.
WASATCH COUNTY, the
JORDANELLE SPECIAL SERVICE
DISTRICT, the JORDANELLE
SPECIAL IMPROVEMENT DISTRICT
NO. 2005-2, JAY PRICE, and DAN
MATTHEWS,

Case No. 2:15-CV-18-DAK

Defendants.
This matter is before the court on Defendants Jordanelle Special Service District, the
Jordanelle Special Improvements District No. 2005-2, Jay Price, and Dan Matthews’s Motion for
Attorney Fees. That Motion for Attorney Fees was later joined by Defendant Wasatch County.
The court concludes that a hearing would not significantly aid it in determining these motions.
The court has carefully considered the memoranda and other materials submitted by the parties.
Now being fully advised, the court renders the following Memorandum Decision and Order.
Defendants other than Wasatch County move for an award of attorney fees and costs in
the amount of $440,091.36 pursuant to 42 U.S.C. § 1988, Utah Code Ann. § 78B-5-825, and the
court’s inherent power. Wasatch County later joined in the motion seeking attorney fees and
costs in the amount of $35,422.15 pursuant to the same statutes and powers. Defendants argue
that they are entitled to attorney fees and costs because Plaintiff VR Acquisitions LLC’s
(VRA’s) claims were frivolous, unreasonable, or without foundation and because VRA brought
the claims for an improper motive. VRA claims that its arguments had a valid legal basis, were

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different than previous claims, and were not factually groundless. VRA also argues that the
Defendants did not establish that VRA acted in bad faith.
Each of the statutes and powers that Defendants cite as allowing the court to award
attorney fees and costs in this case have similar standards. In a proceeding to enforces civil rights
under 42 U.S.C. § 1983, a court “may allow the prevailing party, other than the United States, a
reasonable attorney’s fee as part of the costs.” 42 U.S.C. § 1988 (2012). The United States
Supreme Court has interpreted that provision to allow a court to exercise its discretion to award
attorney fees to a prevailing defendant “upon a finding that the plaintiff’s action was frivolous,
unreasonable, or without foundation, even though not brought in subjective bad faith.”
Christianburg Garment Co. v. EEOC¸434 U.S. 412, 421 (1978). “A complaint is frivolous where
it lacks arguable basis either in law or fact.” Blakely v. USAA Cas. Ins. Co., 633 F. 3d 944, 949950 (10th Cir. 2011) (citations and quotation marks omitted). In exercising its discretion to
award fees and costs, courts should “resist the understandable temptation to engage in post hoc
reasoning by concluding that, because a plaintiff did not ultimately prevail, his [or her] action
must have been unreasonable or without foundation.” Christianburg, 434 U.S. at 421-22. Even if
only some of the plaintiff’s claims are frivolous, unreasonable, or without foundation, the court
may award fees as to those claims. See Fox v. Vice, 131 S. Ct. 2205, 2214 (2011).
Under Utah Code § 78B-5-825, attorney fees may be awarded to a prevailing party “if the
court determines that the action . . . (1) was without merit and (2) not brought or asserted in good
faith.” For a court to award attorney fees under this statute, three requirements must be met: “(1)
the party must prevail, (2) the claim asserted by the opposing party must be without merit, and
(3) the claim must not be brought or asserted in good faith.” Gallegos v. Lloyd, 178 P.3d 922,
925 (Utah App. 2008) (citation and quotation marks omitted).

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In addition to the statutes mentioned above, the court has inherent authority to award
attorney fees. A court may award attorney fees pursuant to its inherent authority if a party “acted
in bad faith, vexatiously, wantonly, or for oppressive reasons.” Alyeska Pipeline Serv. Co. v.
Wilderness Society, 421 U.S. 240, 258-59 (1975) (citations and quotation marks omitted).
Attorney fees may also be awarded under the court’s inherent authority if the “plaintiff pursued
the litigation in bad faith or brought a frivolous, unreasonable, or groundless action.” Autorama
Corp. v. Stewart, 802 F.2d 1284, 1287 (10th Cir. 1986) (citation and quotation marks omitted).
Each of the standards for awarding attorney fees requires the claims to be without merit,
the party to have acted in bad faith, or both. Although Defendants prevailed on a motion to
dismiss, the court does not find that VRA’s claims were wholly without merit or frivolous or that
VRA acted in bad faith. The court provided four independent reasons for dismissing VRA’s
claims. Two of the reasons were that VRA’s claims were time barred by the Utah Assessment
Area Act and by the statute of limitations. Although the court eventually concluded that those
time limitations applied to VRA’s claims, VRA had an arguable basis in law and fact for
asserting that the time limitations may not apply because the claims related to the
constitutionality of statute provisions and the claims alleged fraud and bad faith related to the
statutory notice requirements. VRA’s claim that its due process rights were violated by the
allegedly faulty notice was also not frivolous. VRA argued that, as the current property owner
who was experiencing the consequences of the alleged constitutional violation, it could assert the
constitutional rights of the prior owners. Although the court concluded that VRA’s constitutional
rights were not violated because VRA did not exist at the time the notice was issued, the court
concludes that VRA’s argument was not wholly without merit. Finally, VRA’s argument that the
notice was false and misleading was not frivolous because the alleged omissions from the notice,

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if shown to be required and true, could have demonstrated that the council was biased and
prejudiced. However, the court eventually concluded that the omissions were optional pursuant
to the relevant statute. Therefore, the court concludes that VRA’s claims had sufficient merit to
preclude an award of attorney fees and costs and that this case does not reach the level of
egregiousness required to award fees and costs against the Plaintiff.
In addition to not being frivolous or without merit, the court also concludes that VRA did
not act in bad faith in bringing the present case. VRA had legitimate arguments to be in court
and, in its damages, was only seeking to be treated equally with other benefitting landowners and
was not seeking to obtain a windfall.
For the foregoing reasons, IT IS HEREBY ORDERED that Defendants’ motions for
attorney fees and costs are DENIED.
DATED this 22nd day of February, 2016.
BY THE COURT:

_________________________________________
DALE A. KIMBALL
United States District Judge

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