Premises Liability when Allowing Friends to Ride Your Horses

I recently analyzed the issue of premises liability for clients who occasionally allow friends to come ride horses on their property. Here are a few of the highlights . . . .

Under common law, you could be liable to a guest you invite to the property for either dangerous “conditions” or “activities” on the property.  As to “activities,” if the guest enters or remains on the property with your express or implied permission, and you knew or should have known that the guest would not realize the danger involved in a certain activity, and the guest did not know or have reason to know of the danger of that activity, there could be liability if the guest is injured by the activity.  As to “conditions,” if the guest comes onto your property with your express or implied permission, and you know of a dangerous condition on the property and that it presents an unreasonable risk of harm, and you know or have reason to know that the guest would not discover or realize the danger, and the guest actually does not discover or realize the danger, there could be liability if the guest is injured as a result of the dangerous condition.  These standards really boil down to an evaluation of whether your conduct was reasonable under the circumstances.  There are also some statutes in Utah that alter the common law, as discussed below.

If the guest is invited to use the property for recreational purposes and without charge, Utah statutes provide some protection against liability that could otherwise arise under the common law.  Under Utah Code 57-14-3 and 57-14-6, so long as an owner of land does not charge for entry and is not “willful or malicious” in failing to warn against a dangerous condition, use, structure, or activity, the owner “owes no duty of care to keep the premises safe for entry or use by any person entering or using the premises for any recreational purpose or to give any warning of a dangerous condition, use, structure, or activity on those premises to that person.”  This means that even where there would otherwise be a duty to warn about a dangerous activity or condition or prevent harm to a guest, if the guest is on the property without charge and for “recreational” purposes, there is not liability unless you are “willful or malicious” in failing to warn of a danger.  This basically alters the common law on dangerous conditions to protect you unless your failure to warn or prevent a danger is so blatant as to rise to the level of intentional harm.

Another statute relates specifically to agricultural activities (written for agri-tourism). Under Utah Code 78B-4-512, it is an affirmative defense to liability to a person invited on your property for recreational participation in or viewing of agricultural activities if the person “deliberately disregarded” conspicuously posted signs, instructions, or other warnings given or if the person used equipment or animals during the activity in a manner “other than that for which a reasonable person should have known they were intended.”  This does not alter your duty of care, but deals instead with the conduct of the guest.  It makes clear that if the guest is injured as a result of his/her own stupidity, you are not liable.

One other statute relating specifically to equine activities deserves the most attention.  Under Utah Code 78B-4-202, it is presumed that participants in equine activities are aware of the “inherent risks” of the activities and you will not be liable for injuries resulting from equine activities unless:

1) you provided the equipment and tack, the equipment or tack leads to the injury, and you were negligent in not realizing the problem with the equipment or tack;

2) you fail to make reasonable efforts to determine whether the animals provided to participants “could behave in a manner consistent with the activity of the participant,” (seems to mean you should not put someone on a frisky horse);

3) you fail to post warning signs regarding a dangerous condition on the property that you either knew about or should have known about;

4) you “commit an act or omission that constitutes negligence, gross negligence, or willful or wanton disregard of the safety of the participant”; or

5) you intentionally injure the participant.

This statute actually requires that you either post a sign identifying the inherent risks of equine activities or have those risks identified in a waiver signed by participants (and their parents if the participants are minors). This statute is different from the others mentioned above in the detail with which items 1 through 5 above are spelled out.  For those involved in equine activities, this statute deserves careful attention.

Whereas the recreational activities protection of Section 57-14-3 is quite broad, this equine statute pares back some of that protection with the carve outs of items 1 through 5 above.  And because the equine statute more specifically addresses the equine situation than the recreational statute, the equine statute would likely control.  Although the property owner benefits from a presumption that the participant understands and appreciates the inherent risks of horse riding, the duty to avoid negligence is revived in item 4.  There is also a specific duty to keep the tack in good repair in item 1 and to make sure the horses are suitable for riding in item 2.

In summary, you have some protection from liability just from the fact that you will take reasonable measures for the safety of your guests and warn them of conditions on the property they might not be aware of.  You have further protection under Section 57-14-3 against liability incurred by guests using your property for recreational activities and without charge.  Under Section 78B-4-512, if the activity can be categorized as “agricultural,” whether or not the guest pays to participate, the guest cannot sue for injury incurred as a result of ignoring warnings given or as a result of acting in an unreasonable manner.  When the activities involve horses or livestock, it will be presumed that participants are aware of the inherent risks of participation, per Section 78B-4-202, but you must also take care with the tack and avoid negligently causing harm.  Finally, a waiver or release is a way to ensure that participants will take seriously their own actions and will usually be enforceable.

Jacob D. Briggs is a partner with the Ogden, Utah, based law firm of Bentley & Briggs PLLC, practicing in the areas of estate planning, real estate, and commercial litigation.

Damages for Constitutional Violations

We are blessed to live in a country where constitutional rights are identified and respected.  We are also blessed to live in a country where remedies can be obtained to compensate for wrongs.  Most people might assume that if they suffer a violation of their constitutional rights, the law will also provide a remedy.

This assumption does not always prove correct.  Under current Utah law, even where a violation of a constitutional right exists, a party must  convince a court that it is also appropriate to provide a remedy for that violation.  In particular, in order for a party to receive monetary damages, it must show that it suffered a “flagrant” violation of a constitutional right and that there are no other remedies which will make the party whole.

This Article explores the advisability of the “flagrant violation” requirement and also whether a person should be required to show a flagrant violation if she only seeks damages from the State and not from an employee of the State. This whole discussion probably would strike most as academic and lacking application to everyday life.  But consider this question: do you expect that if your constitutional rights are violated by the State you will be compensated for the violation?  If your answer is an unqualified “yes,” then the issues below deserve some attention.  Also, if you have ever come across this issue, or have any insight on this issue, I’d be interested in your comments.  So let’s jump into the legal analysis:

The question of the propriety of awarding monetary damages for constitutional violations first surfaced in Bott v. Deland in the context of the Unnecessary Rigor/Cruel and Unusual Punishment Clause.  The Court, after concluding that this clause is self-executing, reviewed authorities on monetary damages from other jurisdictions before concluding that “self-executing constitutional provisions allow for awards of money damages.” 922 P.2d at 739.  As to the question of whether damages can also be awarded “against state employees or only from the state” (emphasis added), the Court concluded that “[t]o engender liability, an employee’s conduct must be voluntary and sufficiently culpable to contravene a prisoner’s right to be free from cruel and unusual punishments and unnecessary rigor.” Id. at 739-40.

It is important to note that this limitation on damages was imposed only in relation to a cause of action for damages against an employee, not in relation to a cause of action for damages against the State.  While there can be no immunity for constitutional violations, id. at 736 (citing, among others, Coleman, 795 P.2d at 630-35), the Court in Bott gave an employee of the State immunity-like protections by incorporating principles of qualified immunity into the standard for determining whether monetary damages are allowed.  To shield an employee from damages arising from “human frailty,” the Court imposed the voluntary conduct requirement. Id. at 740.  To protect the employee merely following seemingly reasonable orders from a superior, the Court imposed the requirement that conduct be “sufficiently culpable.” Id.  These principles, however, provide no justification for shielding the State from liability for the acts of the employee.

In Spackman, the Supreme Court addressed questions certified to it by the United States District Court for the District of Utah as to whether the Due Process Clause and Open Education Clause of the Utah Constitution are self-executing and allow for monetary damages. 2000 UT 87, ¶ 1.  After concluding that the clauses are self-executing, the Court elaborated on the framework allowing for monetary damages.  The Court first identified the common law as the source of its authority to craft an appropriate remedy for self-executing constitutional provisions, and then articulated the following standards:

To ensure that damage actions are permitted only “under appropriate circumstances,” we therefore hold that a plaintiff must establish the following three elements before he or she may proceed with a private suit for damages.

First, a plaintiff must establish that he or she suffered a “flagrant” violation of his or her constitutional rights. [citing Dick Fischer Dev. v. Department of Admin. 838 P.2d 263, 268 (Alaska 1992) and Bott, 922 P.2d at 734-35, 739-40)].  In essence, this means that a defendant must have violated “clearly established” constitutional rights “of which a reasonable person would have known.” (quoting Harlow v. Fitzgerald, 457 U.S. 800, 818 (1987)). . . .  The requirement that the unconstitutional conduct be “flagrant” ensures that a government employee is allowed the ordinary “human frailties of forgetfulness, distractibility, or misjudgment without rendering [him or her]self liable for a constitutional violation.” Bott, 922 P.2d at 739-40.

Second, a plaintiff must establish that existing remedies do not redress his or her injuries. . . .  This second requirement is meant to ensure that courts use their common law remedial power cautiously and in favor of existing remedies. [citation omitted].  We urge caution in light of the myriad policy considerations involved in a decision to award damages against a governmental agency and/or its employees for a constitutional violation.  Moreover, we urge deference to existing remedies out of respect for separation of powers’ principles.  In general, the legislative branch has the authority, and in many cases is better suited, to establish appropriate remedies for individual injuries.  By requiring courts to defer to relevant legislative determinations of appropriate remedies, we respect the legislature’s important role in our constitutional system of government.

Third, a plaintiff must establish that equitable relief, such as an injunction, was and is wholly inadequate to protect the plaintiff’s rights or redress his or her injuries. [citing Bott, 922 P.2d at 739 and others].  This final requirement is meant to take advantage of the meaningful role equitable relief can play in redressing constitutional injuries, [footnote omitted] while not implicating so many of the difficult policy considerations raised by a decision to award damages.

Spackman, 2000 UT 87, ¶¶ 22-25.  The first element follows from the employee-protecting considerations discussed in Bott, but inclusion of this first element with the other two elements, without clarification, implies that the first element also applies to actions for damages against the State.  The Court explicitly states that the second element applies to both actions against an employee or against a state agency. Id. at ¶ 24.  The third element, being based in similar judicial principles, would likely also apply to actions against both the employee and the State.  There is some confusion, then, as to whether a violation must be “flagrant” in order to recover damages from the State.  This question does not appear to have arisen in subsequent cases.

The Court has never articulated a policy reason which would support shielding the State from damages for all constitutional violations except those which are “flagrant.” To do so, however, would impermissibly conflict with the principle discussed in detail in Coleman that there is no immunity for violations of constitutional provisions.  In Coleman, the Court concluded that the Takings Clause is self-executing, trumping statutory or common law principles of immunity. 795 P.2d at 635.  After recognizing lack of uniformity among prior cases, the Court concluded that

these cases show[ ] that for a time the Court’s concentration on the doctrine of sovereign immunity caused it to neglect this constitutional provision, which was designed to protect individual rights. This elevation of legislation and common law principles over a clear constitutional limitation strikes at the heart of constitutional government. The people of Utah established the Utah Constitution as a limitation on the power of government. It can hardly be maintained that the doctrine of sovereign immunity, alone among all doctrines, is outside of the limitations the people established.

Id. at 734-35.  To conclude in situations of “non-flagrant” violations that the state—not just the employee—is immune even when existing remedies do not provide redress and when equitable relief is inadequate, is to elevate the principle of immunity over a clear constitutional limitation.  The effect is to leave an aggrieved individual without a remedy for a violation of constitutional rights.  It would certainly be helpful if the Court clarified that to seek monetary damages against the State, only the second and third elements of the Spackman test apply.

Jacob D. Briggs is a partner with the Ogden, Utah, based law firm of Bentley & Briggs PLLC, practicing in the areas of estate planning, real estate, and commercial litigation.

The Flexibility of a Trust

One of the more commonly under-appreciated principles of trust law is flexibility. Flexibility to determine how best to handle assets while you are alive and to direct the distribution of those assets after you die. Most of my clients realize that the trust will reflect their decisions, but do not realize the wide range of decisions which can be made. And certainly in most circumstances, the box in which they are thinking is a good default to fall back on. It’s worth reflecting, however, on how the particular circumstances of your own family and estate could best be handled both during your life and thereafter. A trust gives the flexibility to do that.

A”trust” is a legal arrangement whereby a person (as “trustor”) transfers assets into trust (to be held by a “trustee”) until a specified time, usually the death of the trustor(s). As an estate planning vehicle, it allows a person to retain control over an asset during life as the trustee of the trust, but direct how the successor trustee is to handle the distribution of the trust assets after the trustor’s death. This is a good estate transfer vehicle for the average estate.

How flexible can a trust be? There are just a few cases in which state law will override the specific terms of a trust. Here is a list of 10 items that will always be governed by state law: (from Utah Code Section 75-7-105)

1. the requirements for creating a trust

2. the trustee’s duty to act in good faith

3. the requirement that the trust must be for the benefit of its beneficiaries

4. the court’s power to modify or terminate a trust (for example, if the beneficiaries consent, if the purpose of the trust can’t be achieved, to achieve tax objectives, etc.)

5. the effect of a spendthrift provision in the trust (attempts to prevent your beneficiaries’ creditors from reaching the trust)

6. the court’s power to determine whether the trustee must post a bond

7. the effect of an exculpatory term in the trust (attempts to waive liability of the trustee for wrongdoing that might occur in the future; current law does not allow a trustee to be exculpated for acts done in “bad faith or with reckless indifference to the purposes of the trust”)

8. the rights of persons who deal in transactions with the trustee

9. statutes of limitation

10. venue and jurisdiction for court proceedings

All other provisions and terms are subject to the control and decision of the trustors.

One of the things I do to help people start thinking about the decisions which they can make is to provide my Estate Planning Worksheet to them before we even meet. A couple can sit down separately and then together to discuss their feelings on questions ranging from the theoretical (i.e. what is the proper purpose and use of wealth) to the practical (who should serve as successor trustee after your death; or how old should a child or grandchild be before receiving their share of the estate).  The Estate Planning Worksheet works wonderfully to prepare my clients to formulate an estate plan that fits their situation.

Although allowing and encouraging clients to think outside the box inevitably translates into additional work by me in drafting the trust, the satisfaction I get from tailoring the trust to the client’s specific needs far outweighs the extra work. If you think you might like to begin the process of discovering the best decisions for your estate, I would be glad to send you a copy of the Estate Planning Worksheet by email or letter.

Jacob D. Briggs is a partner with the Ogden, Utah, based law firm of Bentley & Briggs PLLC, practicing in the areas of estate planning, real estate, and commercial litigation.

Qui Tam / False Claims Act

An interesting set of cases fall under the category of lawsuits brought on behalf of the government. At common law, these were referred to as qui tam actions. Under federal law, this mechanism is embodied in the False Claims Act.

The False Claims Act has the Civil War as its origin, set up by Congress to allow private individuals to sue on behalf of the government to expose and prosecute fraud in war contracts.  Of course, it has been amended since then, with the most substantive changes coming in 1986. Whereas the Act initially targeted defense contractors, it now also commonly targets health care providers, oil and gas lessees, and government contractors in all industries.

When is the Act triggered? A typical case involves a claim for payment from the government for goods or services rendered where the goods or services were either not properly provided or overbilled. Another type of case involves fraud in the negotiation of government contracts. “False certification” cases provide another source of litigation under the Act, as those receiving payment or benefits from the government must often make certain ongoing certifications.

Penalties can be significant. If the government suffers actual damages, it is also entitled to treble damages in almost all cases. Even in cases where damages are nominal, each violation carries a penalty between $5,500 and $11,000.00. Between the treble damages provision and the statutory penalties, the damages can add up very quickly.

The private individual who files suit, called a “relator,” gets a significant share of the reward; specifically, 15-30% depending upon whether the government assists in the prosecution of the case and how significant the relator’s involvement is. On top of this amount, the relator’s attorney’s fees must also be paid under the statute.

Whistleblower protections. Finally, if a relator uncovers the wrongdoing of his or her own employer, the statute provides whistleblower protections. If an employee is fired based on actions taken in furtherance of developing a False Claims Act case, the Act can provide whatever relief is necessary to make the employee whole. This commonly translates into double back pay, interest on the back pay, and litigation costs and attorneys fees.

In short, if you are aware of wrongdoing by a person or company that deals with the federal government, the False Claims Act is a tool to remedy that wrong. An excellent resource for further study is Civil False Claims and Qui Tam Actions by John T. Boese.

Jacob D. Briggs is a partner with the Ogden, Utah, based law firm of Bentley & Briggs PLLC, practicing in the areas of estate planning, real estate, and commercial litigation.

Review and Revise Your Form Contract

I see a variety of contracts used by my clients, usually when the client is suing to enforce the contract. The content of the contract can’t be modified at that point, but if it could there would be some things I would like to change.  If you have a form contract you use over and over, you might do well to read through this list and see if there are some changes to make to your form contract:

1. Information about the parties. Your contract is not just an agreement between you and another party, it is a great opportunity to do some information gathering about the other party. This information is not only helpful if you end up needing to enforce the contract or collect unpaid money, but also so that you can serve your customer better. If you are providing services for a family, have both the husband and wife sign the contract. Here is some additional information I like to see on a contract:

-dates of birth (helps with collection but also allows you to send out letters)

-social security # or driver’s license #

-referral source (why not track how your business is getting work)

-address

-work information (collection much faster with this info)

-phone numbers

2. Attorneys fees and interest. If you have to enforce the contract, you need to be able to recover attorneys fees and interest on past-due amounts. You will almost never be able to do that if it is not written in the contract.

3. Concise and accurate. Make sure the contract accurately frames the expectations of the parties. The concern here is that you got this form contract from someone else and may be hesitant to modify the contract for your situation. Don’t be. You can have an attorney review the contract for minimal cost if you want additional assurance.

There certainly are many elements of a good contract that aren’t covered above. These are just a few of the things I often see left out of a contract. So go ahead and make a few changes to your form contract–it will pay good dividends.

Jacob D. Briggs is a partner with the Ogden, Utah, based law firm of Bentley & Briggs PLLC, practicing in the areas of estate planning, real estate, and commercial litigation.

Collections for Small Businesses

Every business owner should know a few things about collections, particularly small business owners. You won’t do very much unpaid work before you don’t get paid yourself. From the perspective of an attorney who has helped clients with collections cases, here are the top things every business owner should think about in regards to collections:

1. Avoiding. How do you keep the list of receivables small? You need to have a superb product. Particularly in businesses where your clients rely on you for ongoing or repeat service, your best leverage is your product. If your clients need you in order to run their business, and you are better than your competitors, you have incredible leverage that can translate into avoiding collections. Even one-time customers pay more faithfully when the brilliance of your work wows them.

2. Systems. Establish a system for tracking and following receivables. Your collections efforts will seem five times easier if you do. Your clients will quickly realize that their account is not one they can let slide without you noticing. And the collections system shouldn’t begin once the account is past-due. Think about integrating payment earlier in the process.

3. Small claims. Get comfortable with using the court system to collect. If the relationship with the client can’t be mended, you need to decide whether to pursue legal action to collect. There are many factors which play into that decision. If you are comfortable with the small claims procedures (see http://www.utcourts.gov/howto/smallclaims/), you will make better collections decisions. Utah small claims procedures are straightforward and efficient.

4. Attorneys. I’ll face it: you don’t want to make an attorney part of your business model. That is why the prior steps are important. But there are some cases where it makes sense. Maybe the person who owes you money actually could pay but is refusing. Maybe this is a case where you need to set a precedent. But sometimes you have to just cut your losses. A good attorney can help advise you, providing a fresh perspective. A good attorney will also efficiently handle any work you give them, making any potential recovery more meaningful (to the bottom line).

Collections are a vital part of what you do in business. If you provide an excellent service you already do 75% of what it takes to stay on top of collections. Proper internal procedures and familiarity with small claims will take care of another 15% of your collections issues. In the remaining 10% of cases, you get to decide whether to  involve an attorney. Don’t settle for a mediocre attorney; keep looking until you find someone who will work as hard on your cases as you would.

Jacob D. Briggs is a partner with the Ogden, Utah, based law firm of Bentley & Briggs PLLC, practicing in the areas of estate planning, real estate, and commercial litigation.

When Can a Loan be Prepaid?

Can any debt be prepaid without consequence? The question is likely to come up in an environment of low interest rates as borrowers seek to refinance older loans. Most consumer loans either specifically state that prepayment of the loan is allowed, or may state that the borrower will incur a specified penalty upon prepayment. Other loans, particularly between private persons, may be silent on the subject. Whatever is written in your loan documents will likely control, unless a statute in your state says otherwise. And if the loan documents are silent on the issue, then prepayment will likely not be allowed unless the lender agrees, again, subject to statutory law.

Under common law (rules given by courts), prepayment of a note is not allowed unless the note specifically provides for such. This is called the “perfect tender in time” rule. One of the reasons behind the rule is that if the creditor does not have the right to call the loan at any time, neither should the debtor have the right to prepay at any time. Promenade Towers Mut. Housing Corp. v. Metro. Life Ins. Co., 597 A.2d 1377, 1385 (Md. 1991). Additionally, given that the creditor is benefitted by a regular flow of income with a predictable rate of return, along with the assurance of not needing to reinvest capital, courts are unwilling to allow the debtor to unilaterally change the term of the loan unless the note allows for prepayment. Id; Arthur v. Burkich, 520 NY.S.2d 638, 639. A prepayment penalty is the consideration the borrower gives to persuade the lender to waive the common law rule against prepayment. Promenade, 597 A.2d at 1384-85.

There are a few states that depart from this common law rule for various reasons. In North Carolina and Missouri, there is a presumption of prepayment inferred because of certain provisions in that state’s statutes. Hatcher v. Rose, 407 S.E.2d 172, 177 (N.C. 1991); Skyles v. Burge, 789 S.W.2d 116, 119-20 (Mo. App. 1990). In Pennsylvania, the common law rule is not favored because it “restrains the free alienability of land.” Mahoney v. Furches, 468 A.2d 458, 461 (Pa. 1983).

In most states, however, there is no presumption that a loan can be prepaid. Taking Utah for an example, there is no rule against “no prepayment” clauses. Utah has rules which limit prepayment penalties in consumer loans and in high-cost residential mortgages, but there are no limits on prepayment penalties for commercial loans, and no limit on the lender’s ability to deny prepayment altogether.

So it is not the case that every loan can be paid off earlier than the term of the loan. Sometimes a lender may want to receive a steady stream of income from the borrower as opposed to an early payoff. If you encounter the question of prepayment as either a borrower or lender, look to the terms of your contract, and then consider whether statutory law in your area might alter what is in the contract. And if the loan documents contain a prepayment penalty, it will likely be enforceable unless the penalty is unreasonably high.

Jacob D. Briggs is a partner with the Ogden, Utah, based law firm of Bentley & Briggs PLLC, practicing in the areas of estate planning, real estate, and commercial litigation.

Utah Discovery Rule Changes: Proportionality

Utah has adopted sweeping changes to the rules that govern discovery in litigation. Prior posts have discussed the changes in Initial Disclosures and deadlines, and how these changes are intended to make cases move along more quickly. This post focuses on the new rule of “proportionality,” which is intended to ensure that the scope of discovery is appropriate relative to the significance of the claims in the case.

Under the new rule of proportionality, the party seeking discovery bears the burden of showing not only relevance but also proportionality.  See Rule 26(b)(3)What is proportionality and what parameters determine whether discovery sought is proportional? This is what the new rule says regarding proportionality:

Discovery and discovery requests are proportional if:

(b)(2)(A) the discovery is reasonable, considering the needs of the case, the amount in controversy, the complexity of the case, the parties’ resources, the importance of the issues, and the importance of the discovery in resolving the issues;

(b)(2)(B) the likely benefits of the proposed discovery outweigh the burden or expense;

(b)(2)(C) the discovery is consistent with the overall case management and will further the just, speedy and inexpensive determination of the case;

(b)(2)(D) the discovery is not unreasonably cumulative or duplicative;

(b)(2)(E) the information cannot be obtained from another source that is more convenient, less burdensome or less expensive; and

(b)(2)(F) the party seeking discovery has not had sufficient opportunity to obtain the information by discovery or otherwise, taking into account the parties’ relative access to the information. See Rule 26(b)(2).

If you are like me, you read the above rule and still are not sure what proportionality means. Ultimately, proportionality is an objective, and as such, it is difficult to objectively define its parameters. We may gradually get additional guidance from the judges interpreting this rule as parties in contentious cases argue over whether a request is proportional.  In the meantime, those seeking discovery must be prepared to show that the discovery requested is proportional in relation to 1) the nature of the case, 2) the benefit vs burden of the request, 3) the goals of a just, speedy, and inexpensive determination of the case, 4) the duplicative nature of the discovery, 5) whether the requests are efficiently targeted and 6) whether the requesting party could have already obtained the information elsewhere. Yes, I just restated the rule in my own words, but you are probably still just as uncertain about what it means.

If you can’t tell by now, this is not one of my favorite aspects of the new rules. The idea of proportionality is a noble objective but will almost certainly be brutalized by the reality of litigation. Proportionality will certainly mean something different to the requesting party than it does to the party fielding the request. And the requesting party must then somehow bear the burden of showing that the request is proportional. But the requesting party only has the vague parameters above to use to justify its request. Given this uncertainty, I believe that “proportionality” is poised to be the next big area of dispute in litigation. Whereas the changes to the rules were intended to facilitate the just, speedy, and inexpensive determination of each case, proportionality may well detract from these objectives by creating frustrating, drawn out, and expensive battles about what proportionality means.

Jacob D. Briggs is a partner with the Ogden, Utah, based law firm of Bentley & Briggs PLLC, practicing in the areas of estate planning, real estate, and commercial litigation.

Utah Discovery Rule Changes: Deadlines

The objective of the changes to the Utah Rules of Civil Procedure regarding discovery is to produce quicker and cheaper outcomes. The Advisory Committee notes that “the focus is on moving quickly and efficiently to the disposition of the merits of the case.” A prior blog post discussed how changes to the Initial Disclosure requirements will further this goal. This post addresses the faster deadlines and how these changes will impact the average case.

Under the old rules, the period for discovery was presumptively set to expire 240 days after the first answer was filed. In my experience, the parties almost always ended up stipulating to an even longer period of time, and sometimes multiple extensions followed. The old rules fostered a slow, methodical pace of litigation. While this was effective in “getting down to the facts,” it was not effective in fostering the speedy and efficient resolution of cases.

The new rules put each case on a  fast track to resolution. A party may commence discovery one it has satisfied its Initial Disclosure obligation. The amount of standard discovery available and the deadlines to complete that discovery vary depending on how much is at stake in the litigation. The amount at stake is determined by looking at the total of all monetary damages sought by all parties. Cases will then fall into one of three tiers, with the following limitations and deadlines for standard discovery:

Tier

Amount of Damages

Total Fact Deposition Hours

Rule 33 Interrogatories including all discrete subparts

Rule 34 Requests for Production

Rule 36 Requests for Admission

Days to Complete Standard Fact Discovery

1

$50,000 or less

3

0

5

5

120

2

More than $50,000 and less than $300,000 or non-monetary relief

15

10

10

10

180

3

$300,000 or more

30

20

20

20

210

See http://www.utcourts.gov/resources/rules/urcp/urcp026.html. The deadlines stated are calculated from the date the first defendant’s first disclosure is due (which is 28 days after the Plaintiff’s first disclosure is made, which must be no later than 14 days after the Defendant files an answer).

As seen above, for a case under $50,000, discovery moves quickly and is very limited. Only three hours of deposition are allowed, no written interrogatories are allowed, and only five each of requests for production of documents and requests for admission are allowed. These limitations are in stark contrast to the broad scope of prior discovery practice.

If discovery is required in excess of the limitations above, “extraordinary discovery” can be obtained either by stipulation or by motion. If by stipulation, the parties must submit a stipulated statement that the proposed additional discovery is “necessary and proportional” and that each party “has reviewed and approved a discovery budget.” See Rule 26(c)(6). This discovery budget is a document signed by the client that approximates the cost of the proposed additional discovery.

If the extraordinary discovery cannot be obtained by stipulation, a motion is filed by a party. The filing party must certify that the additional discovery is necessary and proportional and that a discovery budget has been approved by the client. The moving party must also certify that it has attempted in good faith to confer with the other party to achieve a stipulation for additional discovery.

The clear result of these changes will be to accelerate the resolution of cases. Litigation should also cost less on the whole. However, whereas before the cost to the client was spread over many months or even years, the expedited pace will mean that the client incurs greater cost in the first few months of litigation. The hope is that this upfront cost will translate into a greater likelihood of resolving the case quickly.

Utah Discovery Rule Changes: Initial Disclosures

Utah has new discovery rules that apply in litigation. This post explains how the changes to “Initial Disclosures” will affect a client’s case.

Prior to 2011, Initial Disclosures were a formality that only applied to cases exceeding $20,000. In reality, little beneficial information was gained from the Initial Disclosures. Sometimes a party would go above and beyond the requirement to provide documents or detailed information. But most often the Initial Disclosures were just a form document that allowed the parties to move forward with discovery.

The new rules require more detailed Initial Disclosures. Like before, the names and contact information of people likely to have information must be disclosed. Unlike before, the disclosure must also identify each witness which “the party may call” and “a summary of the expected testimony.” This will require much more upfront thought and collaboration with the client than under the prior rules. In many ways this is good because the attorney and client will be required to get a good handle on the case right from the beginning. Gone are the days of filing the case and then waiting a couple months to decide how to manage the case.

The next change to Initial Disclosures relates to document disclosure. Under the old rules, relevant documents simply needed to be identified, not actually provided to the other party. It was up to the other party to then request documents. Under the new rules, the disclosing party must actually provide copies of all “documents, data compilations, electronically stored information, and tangible things in the possession or control of the party that the party may offer in its case-in-chief (at trial).” A party must produce a copy of any document referred to in its pleadings. Again, this has the potential to really move the case along. In order to disclose the documents which will be used at trial, a party must have a good idea of what the trial strategy will be. The initial work will be greater but there is a potential for faster case resolution.

Regarding damages, a party must now disclose its computation of damages and any documents which support that computation. A party must also provide a copy of any agreement which would indemnify the party for a damage award against it. Again, the change here is that not only must information be provided but also documentation to back it up.

These disclosures come quickly. The Plaintiff must serve these disclosures within 14 days of the Defendant’s Answer. The Defendant then has 28 days to serve its Initial Disclosures. A party may not  seek additional discovery until the Initial Disclosures have been made.

So how will this change affect the typical client’s case? Whether as Plaintiff or Defendant, the client can expect the case to proceed more quickly. Having more information earlier puts the parties in a better position to evaluate either settlement or how to proceed to trial. The potential downside is that a party can expect to spend much more on the case during the first couple weeks than previously. Under the old rules, the only initial cost was to put together the Complaint or Answer and get that filed. Now a party must also assemble and disclose all relevant documents and have their case strategy in place. This will require significantly more time, but the hope is that expedited resolution will outweigh the added upfront expense.

Jacob D. Briggs is a partner with the Ogden, Utah, based law firm of Bentley & Briggs PLLC, practicing in the areas of estate planning, real estate, and commercial litigation. Watch for additional blog posts on other changes to discovery rules under the Utah Rules of Civil Procedure.