355 P.3d 243 2015 UT App 171

2015 UT App 171

D. Douglas VELANDER, Plaintiff and Appellant, v. LOL OF UTAH, LLC, and Kevin G. Richards, Defendants and Appellee.

No. 20140471-CA.

Court of Appeals of Utah.

July 9, 2015.

Samuel A. Hood, Attorney for Appellant.

Brian M. Lindquist, Attorney for Appellee.

Judge GREGORY K. ORME authored this Memorandum Decision, in which Judges JAMES Z. DAVIS and MICHELE M. CHRISTIANSEN concurred.

Memorandum Decision

ORME, Judge:

4 1 Appellant D. Douglas Velander filed an action to collect a debt against Appellee Kevin G. Richards, among others. More than four years later, the district court dismissed the case for failure to prosecute. Velander appeals, arguing that the district court *244abused its discretion by dismissing the case. We affirm.

12 On August 20, 2008, Velander filed a debt collection action in the district court on behalf of the Velander Family Trust. Richards was one of several defendants named in the complaint. Velander alleged that on August 5, 2005, LOL of Utah, LLC, executed a promissory note in favor of the trust for $71,288 and that this note was due one year from execution. Velander also alleged that Richards was one of five individuals who personally guaranteed payment of the note.

13 Richards answered the complaint on September 10, 2008, disputing that he was responsible for payment of the note. Just over four years later, on September 14, 2012, Richards moved for dismissal of the case under rule 41(b) of the Utah Rules of Civil Procedure, arguing that Velander had failed to prosecute. On December 21, 2012, the district court granted that motion.1

T4 "'[Wel do not disturb [a trial court's order of dismissal for failure to prosecute] absent an abuse of discretion and a likelihood that an injustice occurred."" PDC Consulting, Inc. v. Porter, 2008 UT App 372, ¶ 5, 196 P.3d 626 (alterations in original) (quoting Hartford Leasing Corp. v. State, 888 P.2d 694, 697 (Utah Ct.App.1994)). Velander essentially argues that the district court abused its discretion in weighing and analyzing the factors outlined in Westinghouse Electric Supply Co. v. Paul W. Larsen Contractor, Inc., 544 P.2d 876, 879 (Utah 1975).

T5 In Westinghouse, the Utah Supreme Court explained that a dismissal for failure to prosecute would constitute an abuse of discretion if there was justifiable excuse for the delay. Id. at 878-79.

Whether there is such justifiable excuse is to be determined by considering more factors than merely the length of time since the suit was filed. Some consideration should be given to the conduct of both parties, and to the opportunity each has had to move the case forward and what they have done about it, and also what difficulty or prejudice may have been caused to the other side; and most important, whether injustice may result from the dismissal.

Id. at 879 (footnote omitted). The district court organized its analysis around these factors in its December 2012 order dismissing the case and in its April 2014 order denying Velander's motion to amend the judgment.

T6 In attacking the district court's analysis, Velander specifically argues that (1) he was not required to initiate a scheduling conference and Richards's right to conduct discovery was not dependent on such a conference, (2) Richards suffered no prejudice and Velander gained no financial advantage because of the delay in prosecuting the case, and (8) the dismissal caused significant injustice to Velander.2

*24517 Under rule 41(b), a case can be dismissed "[flor failure of the plaintiff to prosecute or to comply with [the Rules of Civil Procedure]" Utah R. Civ. P. 41(b). The district court found both that Velander had "not complied with the Utah Rules of Civil Procedure" and that he had "failed to prosecute [his] claim against Richards." The court originally found that Velander had failed to arrange for a scheduling conference in accordance with rule 26(f). See id. 26(F) (2011).3 The court, in its April 2014 order, acknowledged that some of the defendants in the action were not represented by counsel and that rule 26(f) therefore did not apply. See id. R. 26(a)(2)(A). The court nevertheless determined that this change in its analysis did not "affect[ ] its original weighing of the Westinghouse factors in any way." Vel-ander's arguments on this point focus entirely on the court's rule 26 analysis, which the court rescinded in its April 2014 order. Vel-ander's arguments on this first issue are therefore moot and will not be considered further.

18 Next, Velander takes issue with the district court's analysis under the fourth Westinghouse factor-what difficulty or prej-udiee may have been caused to Richards4 See K.L.C. Inc. v. McLean, 656 P.2d 986, 988 (Utah 1982) (per curiam). The district court's

original ruling found three types of prejudice that [Velander's] failure to prosecute caused [Richards]: 1) the ever-persistent threat of damages in a law suit, 2) the continuing increase of interest owing on the debt throughout the entire span of [Velander's] delay, and 8) the higher rate of interest owed prior to judgment than after judgment.

In its April 2014 order, the court reversed its finding of the third type of prejudice, and Velander's arguments related to the same are now inapposite. Moreover, Velander does not contest the first form of prejudice. We are thus left to consider whether the district court erred in finding prejudice to Richards because of the increased interest caused by Velander's delay and whether that error, if any, affected the court's weighing of the Westinghouse factors.

T 9 There can be no dispute that the interest on the alleged debt increased significantly over time. The note provided for interest at the unusually high rate of three percent per month, compounded monthly. The longer the case went unresolved, the more interest accrued on any future judgment. Velan-der rightly acknowledges that "[the only thing that would have mitigated the ballooning interest charges for Richards would be to pay on the obligation." It is counter-intuitive, however, to expect Richards to pay on an obligation that he disputed.5 Further*246more, while Velander is right that no one can know how long the case might have taken to reach resolution, there is no real dispute that Velander's inaction caused the case to sit dormant for three years, during which three years' worth of exceptionally high interest acerued. So while the prejudice to Richards might not have been as significant as the district court originally thought (when it was under the mistaken impression that the interest rate would decrease onee the debt was reduced to judgment), the delay still caused prejudice to Richards by allowing inordinately high interest to accumulate for three years while Velander did nothing vis-a-vis Richards.

10 Finally, we consider Velander's argument that dismissal caused him significant injustice. -It is important to note that Velan-der obtained default judgments against each of the other defendants originally named in the complaint, and he did so rather expeditiously. This is not, then, a case where the court's decision not to hear Velander's case on the merits left him wholly without a remedy. And Velander has offered no legitimate excuse for why he could not have pursued his case against Richards with the same swift, ness he used in obtaining judgments against the other defendants.

{ 11 The only arguments asserted by Vel-ander that were not rendered moot by the district court's April 2014 order were those dealing with the prejudice caused to Richards and the injustice suffered by Velander. The other three Westinghouse factors, which the district court determined weighed in favor of dismissing the case, remain unchallenged. We conclude that the prejudice caused to Richards in the form of increased interest was significant-we were told at oral argument that the total debt now due on this note, with a face value just over $71,000, is some $2 million-and Velander's loss of a cause of action against Richards did not result in the sort of injustice that necessarily outweighs the other factors that 'must be considered. Accordingly, we affirm the district court's dismissal for failure to prosecute.

Velander v. LOL of Utah, LLC
355 P.3d 243 2015 UT App 171

Case Details

Name
Velander v. LOL of Utah, LLC
Decision Date
Jul 9, 2015
Citations

355 P.3d 243

2015 UT App 171

Jurisdiction
Utah

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