Brigham Young University v. Tremco Consultants, Inc., 2007 UT 17

Summary

The Utah Supreme Court held that Brigham Young University could not use post-judgment collection procedures to impose liability for a SoftSolutions, Inc. judgment on officers, directors, and related entities that were not named parties. The court concluded that pursuing alter-ego, fraudulent-transfer, and related theories required a separate civil action with adequate notice and an opportunity to be heard. It vacated the supplemental order extending liability and held that the district court improperly denied the affected parties’ motion to intervene.

Holdings

1. The district court exceeded its discretion by denying Duncan et al.'s motion to intervene because their inability to participate as parties materially contributed to the unconstitutional deprivation of their due process rights.
2. Duncan et al. were denied due process because the district court extended liability for SoftSolutions' judgment to them through summary post-judgment collection procedures without giving them adequate notice and a meaningful opportunity to defend against the underlying liability theories.
3. Rule 17(d) is procedural rather than substantive and does not create a cause of action that can impose personal liability for a judgment entered against another entity.
4. Claims based on alter ego or fraudulent transfer must be prosecuted as civil actions, not adjudicated through abbreviated post-judgment collection procedures under Rule 69(s).
5. Section 16-10a-1408 does not authorize enforcement of a claim against a shareholder of a dissolved corporation in a summary post-judgment collection proceeding; such enforcement must occur in a civil action.

Questions Presented

1. Whether the district court abused its discretion by denying Duncan et al.'s motion to intervene.
2. Whether the district court could extend liability for SoftSolutions' judgment to nonparty individuals and entities through post-judgment collection procedures under Utah Rules of Civil Procedure 17(d) and 69(s).
3. Whether claims based on alter ego, fraudulent transfer, or Utah Code section 16-10a-1408 could be adjudicated in a summary post-judgment collection proceeding without commencing a civil action and providing full procedural due process.
4. Whether Duncan et al. received constitutionally adequate notice and an opportunity to be heard before their property was subjected to execution.

Disposition

vacated