The Guarantee Company of North America v. Mountain Valley Glazing et al

Filing 48

MEMORANDUM DECISION AND ORDER granting 18 Motion for Writ of Prejudgment Writ of Replevin. Signed by Judge Jill N. Parrish on 9/24/24. (dle)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
THE GUARANTEE COMPANY OF
NORTH AMERICA,

MEMORANDUM DECISION AND
ORDER GRANTING MOTION FOR
PREJUDGMENT WRIT OF REPLEVIN

Plaintiff,
v.
MOUNTAIN VALLEY GLAZING, MVG
INVESTMENTS, KIM B. WARDLE,
KAREN N. WARDLE, CHRISTOPHER S.
WARDLE, and JORDAN P. WARDLE,

Case No. 2:23-cv-00588-JNP-JCB
District Judge Jill N. Parrish

Defendants.

Before the court is Plaintiff’s motion for a prejudgment writ of replevin under Rule 64 of
the Federal Rules of Civil Procedure and Rules 64A and 64B of the Utah Rules of Civil Procedure.
Plaintiff has submitted an affidavit showing that the requirements for a prejudgment writ of
replevin are satisfied, and Defendants have failed to respond. Accordingly, the court GRANTS the
motion without a hearing.
BACKGROUND
Back in 2014, Defendant Mountain Valley Glazing, a specialty contractor, sought surety
bonds from Plaintiff The Guarantee Company of North America for various construction projects.
All Defendants agreed to indemnify Plaintiff jointly and severally for any losses and expenses
incurred because of the bonds by assigning and granting a security interest in an extensive list of
personal property to Plaintiff. See ECF 18-3 (“Indemnity Agreement”) at 3.

Eight years later in May 2022, Plaintiff issued payment and performance bonds of over $2
million each for Mountain Valley Glazing’s work as a subcontractor on a project in Salt Lake City.
Plaintiff guaranteed performance of the subcontract and payment for labor and materials. At some
point, Mountain Valley Glazing defaulted on its obligations and was terminated by the general
contractor, which then made a demand on Plaintiff’s performance bond. Plaintiff also received a
demand for almost $1 million from a supplier claiming nonpayment by Mountain Valley Glazing.
Faced with potential exposure under the bonds, Plaintiff demanded that Defendants deliver
$1.2 million in collateral by August 2023 to secure their indemnification obligation. Defendants
failed to do so. 1 Plaintiff now seeks to enforce its interest in the collateral through a prejudgment
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writ of replevin.
DISCUSSION
A prejudgment writ of replevin is a remedy that transfers possession of specified property
in which the plaintiff claims an interest or ensures its presence during the pendency of the action
without determining the right to its possession. 77 MICHAEL N. GIULIANO, CORPUS JURIS
SECUNDUM REPLEVIN § 59 (2024). The Federal Rules of Civil Procedure do not themselves
authorize federal courts to issue a prejudgment writ of replevin, but Rule 64 offers federal litigants
all the remedies available under the law of the state in which the court sits to secure satisfaction of
a potential judgment. FED. R. CIV. P. 64(a). Utah law, in turn, authorizes courts to issue a
prejudgment writ of replevin if the plaintiff can prove the requirements of Rule 64A of the Utah

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It is the position of Defendants MVG Investments, Christopher S. Wardle, and Jonathan P. Wardle
(who have appeared in this action) that the other Defendants (who have not appeared at all in this
action) are responsible for posting the collateral. See ECF 40 (“Status Report”). So, Plaintiff seeks
replevin as to the property of only the other Defendants—Mountain Valley Glazing, Kim B.
Wardle, and Karen N. Wardle. See ECF 18 (“Motion for Prejudgment Writ of Replevin”) at 3 n.1.
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Rules of Civil Procedure (the rule on “Prejudgment Writs in General”) and the requirements of
Rule 64B (the rule on “Writ[s] of Replevin”). UTAH R. CIV. P. 64A(h). Rule 64A(c) first requires
the plaintiff to prove all of the following conditions:
(1) “that the property is not earnings and not exempt from execution”;
(2) “that the writ is not sought to hinder, delay[,] or defraud a creditor of the
defendant”; and
(3) “a substantial likelihood that the plaintiff will prevail on the merits of the
underlying claim.”
UTAH R. CIV. P. 64A(c)(1)–(3). In addition, the plaintiff must prove at least one of the following:
(4) “that the defendant is avoiding service of process”;
(5) “that the defendant has assigned, disposed of[,] or concealed, or is about to
assign, dispose of[,] or conceal, the property with intent to defraud creditors”;
(6) “that the defendant has left or is about to leave the state with intent to defraud
creditors”;
(7) “that the defendant has fraudulently incurred the obligation that is the subject
of the action”;
(8) “that the property will materially decline in value”;
(9) “that the plaintiff has an ownership or special interest in the property”; or
(10) “probable cause of losing the remedy unless the court issues the writ.”
UTAH R. CIV. P. 64A(c)(4)–(10). Further, the defendant must receive notice of and an opportunity
to respond to the motion for the writ and supporting affidavits before the court may issue the writ.
UTAH R. CIV. P. 64A(e)–(f). Finally, Rule 64B(b) requires the plaintiff to prove in addition that it
is entitled to possession of the property and that the defendant has wrongfully detained the
property. UTAH R. CIV. P. 64B(b).

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In support of its motion, Plaintiff has submitted an affidavit from an authorized
representative. Plaintiff served a copy of this affidavit along with a copy of its motion for the writ
upon the Defendants as to whom Plaintiff seeks the writ—Mountain Valley Glazing, Kim B.
Wardle, and Karen N. Wardle. These Defendants have failed to appear in this action at all and
have thus forfeited their opportunity to challenge the factual assertions in the affidavit.
Based on the affidavit and indemnity agreement, the court finds that all three necessary
conditions of Rule 64A(c) are satisfied here. First, the affidavit states that the collateral does not
constitute earnings and is not exempt from execution (the (c)(1) condition). ECF 18-1 (“Decl. of
Tavaglione”) at 6. Second, it states that Plaintiff seeks the writ to enforce its own rights, not hinder,
delay, or defraud Defendants or any other creditor of theirs (the (c)(2) condition). Id. The court
also concludes that Plaintiff has shown a substantial likelihood of prevailing on the merits (the
(c)(3) condition): The indemnity agreement assigned the collateral to Plaintiff (in addition to
granting Plaintiff a security interest in it) and gave Plaintiff the right to enforce its interests in the
collateral in the event of default. See Indemnity Agreement at 3–4. Event of default under the
indemnity agreement includes declaration by any project owner that Defendants have defaulted on
a contract with that project owner. Id. at 1. And the affidavit describes exactly such an event: the
general contractor for the construction project in Salt Lake City notified Plaintiff that Mountain
Valley Glazing had defaulted on its obligations. Decl. of Tavaglione at 5. Thus, Plaintiff is
substantially likely to prevail on its claim that it has a legally enforceable interest in the collateral.
As for the remaining seven conditions of Rule 64A(c), only one of which the Plaintiff must
prove, the court finds (c)(5) and (c)(9) satisfied here. The affidavit states that Kim B. Wardle and
Karen N. Wardle have been liquidating Mountain Valley Glazing’s assets and depositing the
proceeds into their personal accounts, and the court may reasonably infer from this conduct an
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intent to defraud creditors (the (c)(5) condition). Id. at 6. Moreover, the court concludes that as
secured creditor and assignee, Plaintiff has both an ownership interest and a special interest in the
collateral (the (c)(9) condition). Therefore, Plaintiff has proven the requirements of Rule 64A(c).
Finally, the court finds the conditions of Rule 64B(b) satisfied. Given Mountain Valley
Glazing’s default on its subcontract and the general contractor’s subsequent demand on Plaintiff,
Plaintiff is entitled to possess the collateral. And because Defendants have not delivered the
collateral that Plaintiff rightfully demanded, they wrongfully detain the property. Having
concluded that all the requirements are satisfied, the court grants Plaintiff’s motion for a
prejudgment writ of replevin.
In addition to a prejudgment writ of replevin, Plaintiff requests two other orders: first, an
order directing Defendants Mountain Valley Glazing, Kim B. Wardle, and Karen N. Wardle to
show cause why the writ should not issue; and second, an order granting a writ of assistance
authorizing a law-enforcement agency to use reasonable and necessary force to obtain the
collateral. The court denies both of these requests. An order to show cause is unnecessary because
those Defendants already received notice of the proceedings in this action, yet they nonetheless
declined to appear. As for the writ of assistance, Plaintiff may move the court for enforcement of
the writ of replevin if it becomes necessary, and a magistrate judge will handle the motion at that
time.
CONCLUSION AND ORDER
For the reasons above, the court GRANTS Plaintiff’s motion for a prejudgment writ of
replevin for the collateral described in the indemnity agreement as to Defendants Mountain Valley
Glazing, Kim B. Wardle, and Karen N. Wardle, DENIES Plaintiff’s request for an order to show

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cause, and DENIES the request for a writ of assistance without prejudice. The court will issue a
writ according to this memorandum decision.
DATED September 24, 2024.
BY THE COURT

______________________________
Jill N. Parrish
United States District Court Judge

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