McBroom v. Child

2016 UT 38 (2016) · Supreme Court of Utah · August 26, 2016 · No. 20140929

Summary

The Utah Supreme Court affirmed summary judgment against Don McBroom and Helen Immelt in claims arising from a 1973 agreement exchanging contingent inheritance interests in R.C. Willey & Son for corporate stock. The court held that the agreement barred Immelt’s claims and most of McBroom’s claims, while McBroom’s remaining breach-of-fiduciary-duty claim against William Child was circular and his claim against KeyBank was untimely. The court also concluded that McBroom could not collaterally challenge court-approved guardianship proceedings without pursuing an appropriate independent action or Rule 60(b) motion.

Court
Supreme Court of Utah
Writing for the Court
Justice Himonas; Chief Justice Durrant; Associate Chief Justice Lee; Justice Pearce; Judge David N. Mortensen
Jurisdiction
Utah
Decision date
August 26, 2016
Docket number
20140929
Procedural posture
Direct appeal from grants of summary judgment entered by the Third District Court of Salt Lake County and certified as final under Utah Rule of Civil Procedure 54(b).
Standard of review
Summary judgment is reviewed for correctness, with no deference to the district court's legal conclusions; facts and reasonable inferences are viewed in the light most favorable to the nonmoving parties. The court may affirm on any ground apparent in the record.
Precedential value
Published precedential opinion
Parties
Don McBroom, Helen Immelt v. William H. Child, Sheldon Child, William Critchlow III, Patricia Child, William Steven Child, Shauna Child, Nancy Child, David Child, Susan Child, Tamara Child, Karen Child, Michael Child, KeyBank National Association, John Does 1-50
Disposition
affirmed

Topics

probate procedureguardianshipsbreach of fiduciary dutystatute of limitationssummary judgment

Practice areas

Probate and estate litigationGuardianshipContract enforcementFiduciary dutyCivil procedure

Questions Presented

  1. Whether the 1973 Stock Settlement and Purchase Agreement barred Immelt's fraud-related and other claims based on her contention that she was misled about the document's contents.
  2. Whether the 1973 Agreement and related guardianship orders barred McBroom from collaterally challenging the transaction without filing a Utah Rule of Civil Procedure 60(b) motion or an independent action for fraud on the court.
  3. Whether McBroom's breach of fiduciary duty claim against William Child failed because the alleged fiduciary duty arose from the same transaction that allegedly breached it.
  4. Whether the statute of limitations barred McBroom's breach of fiduciary duty claim against KeyBank and whether equitable discovery could toll the limitations period.
  5. Whether the district court properly granted summary judgment on the appealed claims.

Holdings

  1. The 1973 Agreement completely barred all of Immelt's claims because, as an adult who signed the agreement, she was charged with knowledge of its contents and could not reasonably rely on oral representations that conflicted with the written document.
  2. McBroom could not collaterally challenge the 1973 Agreement or the guardianship proceedings because the Second District Court approved them and McBroom neither filed a Rule 60(b) motion nor pleaded an independent action for fraud on the court seeking to set aside the orders.
  3. McBroom's breach of fiduciary duty claim against William Child failed as a matter of law because the alleged fiduciary duty arose only when the 1973 Agreement created McBroom's shareholder interest, making it circular to claim that the same transaction breached the duty.
  4. The statute of limitations barred McBroom's breach of fiduciary duty claim against KeyBank because he was on inquiry notice of the facts underlying the claim and failed to make the threshold showing required for equitable tolling.

Key quotations

“In Utah, “a party cannot reasonably rely upon oral statements by the opposing party in light of contrary written information.”” (¶ 21)
“Mr. McBroom cannot challenge the 1973 Agreement or the guardianship proceedings unless he pleads an independent action for fraud on the court seeking to set aside the court orders or files a rule 60(b) motion.” (¶ 26)
“The very act that created the fiduciary duty cannot be held to have violated the fiduciary duty.” (¶ 31)
“Whatever is notice enough to excite attention and put the party on his guard and call for inquiry is notice of everything to which such inquiry might have led.” (¶ 36)

Factual background

Rufus Call Willey's will created a life estate for his wife and contingent remainder interests for his children and grandchildren in the business assets and goodwill of R.C. Willey & Son. In 1973, Immelt and McBroom exchanged their contingent remainder interests for five shares each in R.C. Willey & Son, which were then sold to the business for $5,000; McBroom was a minor and was represented by a court-appointed guardian. Decades later, they sued members of the Willey family, an attorney, and KeyBank, alleging that the 1973 transaction deprived them of their inheritance. The district court entered summary judgment for the defendants.

Procedural history

McBroom and Immelt sued multiple defendants in 2011, asserting claims including quiet title, civil conspiracy, breach of fiduciary duty, conversion, intentional interference with inheritance, fraud-related claims, and negligent misrepresentation. The district court granted successive motions for summary judgment, ultimately disposing of all claims against the defendants. The Utah Supreme Court affirmed the summary-judgment rulings, while remanding for further proceedings.

Remand instructions

The court affirmed the grants of summary judgment in all respects and remanded the matter to the district court for further proceedings.

Download CaseDownload Case DataDownload Case and DataDownload AI Instructions

Court Document

Open PDF
Loading document…

More from Utah Supreme Court