Jau-Fei Chen v. Stewart

Summary

The Utah Supreme Court reviewed an interlocutory appeal concerning the appointment and authority of an interim chief executive officer or special master for E. Excel International, Inc., and a preliminary injunction barring defendants from competing with the company worldwide. The court held that the defendants' challenge to the appointment did not implicate subject matter jurisdiction and was waived, and that the trial court had equitable authority to make the appointment. The court also affirmed the preliminary injunction and rejected the due process challenge.

Holdings

1. A challenge to the court's authority to appoint and empower an interim CEO in an otherwise properly filed action is not a subject matter jurisdiction challenge and is therefore subject to waiver.
2. Defendants waived their objections to the appointment, empowerment, and activities of the interim CEO by waiting an unreasonable period to object and by participating in the litigation while observing the officer's actions.
3. A trial court has inherent equitable authority to appoint an interim CEO or similar court officer with powers substantially equivalent to those of a receiver when necessary to preserve corporate assets and manage the corporation during litigation.
4. The trial court did not abuse its discretion by extending judicial immunity to the interim CEO for actions taken in the performance of court-directed responsibilities.
5. The preliminary injunction did not violate Hwan Lan Chen's due process rights because her appearance through counsel waived service, provided notice, and she had a meaningful opportunity to be heard and to challenge the evidence.
6. The trial court acted within its discretion in entering and broadly framing the preliminary injunction barring defendants from worldwide competition with E. Excel.

Questions Presented

1. Whether defendants' challenge to the appointment and empowerment of the interim CEO raised a nonwaivable subject-matter-jurisdiction issue.
2. Whether defendants waived their objections to the appointment, empowerment, and activities of the interim CEO by failing to object timely.
3. Whether the trial court had equitable authority to appoint an interim CEO with powers substantially equivalent to those of a receiver.
4. Whether the trial court properly extended judicial immunity to the interim CEO acting under the court's direction.
5. Whether the preliminary injunction violated Hwan Lan Chen's due process rights because she was not served or formally joined before some of the hearings.
6. Whether the preliminary injunction barring defendants from worldwide competition with E. Excel was an abuse of discretion or impermissibly overbroad.

Disposition

affirmed