Still Standing Stable, LLC v. Allen, 2005 UT 46

Summary

The Utah Supreme Court reviewed an award of attorney fees under Utah Code section 78-27-56 in a dispute concerning access to landlocked property. The court held that the trial court improperly conflated the requirements that an action be without merit and brought in bad faith, and that the record did not support an independent finding of bad faith. The court reversed the attorney-fee award.

Holdings

1. An attorney-fee award under Utah Code section 78-27-56 requires separate findings that the losing party's action or defense was both without merit and brought or asserted in bad faith; lack of merit alone does not establish bad faith.
2. The trial court's finding that Still Standing acted in bad faith was clearly erroneous because the record did not show that Still Standing subjectively intended to act in bad faith or that it intended to take unconscionable advantage of the defendants, delay proceedings, harass them, or increase their litigation costs.
3. The order awarding attorney fees to the defendants under Utah Code section 78-27-56 must be reversed.

Questions Presented

1. Whether the trial court properly awarded attorney fees under Utah Code section 78-27-56 when it found that Still Standing's action was without merit and brought in bad faith.
2. Whether the trial court improperly conflated the statutory requirements that an action be without merit and be brought or asserted in bad faith.
3. Whether the record contained sufficient evidence of Still Standing's subjective bad faith to support the attorney-fee award.

Disposition

reversed