2015 UT App 300
THE UTAH COURT OF APPEALS
AMERICANWEST BANK,
Appellee,
v.
SANDY G. KELLIN,
Appellant.
Opinion
No. 20140651-CA
Filed December 17, 2015
Third District Court, Silver Summit Department
The Honorable Todd M. Shaughnessy
No. 100501018
S. Brook Millard and Gregory D. Marchant,
Attorneys for Appellant
Jonathan A. Dibble, Steven W. Call, and A.J. Green,
Attorneys for Appellee
JUDGE JOHN A. PEARCE authored this Opinion, in which JUDGES
JAMES Z. DAVIS and MICHELE M. CHRISTIANSEN concurred.1
PEARCE, Judge:
¶1 Sandy G. Kellin appeals from the district court’s entry of a
deficiency judgment in favor of AmericanWest Bank (AmWest),
formerly known as Far West Bank. We affirm and remand for
calculation of AmWest’s attorney fees incurred on appeal.
1. Judge James Z. Davis participated in this case as a member of
the Utah Court of Appeals. He retired from the court on
November 16, 2015, before this decision issued.
AmericanWest Bank v. Kellin
BACKGROUND
¶2 In October 2007, Kellin individually borrowed $1,120,000
from AmWest to purchase a condominium unit, Unit 302, at the
Red Stag Lodge at the Deer Valley Resort. A deed of trust
recorded against Unit 302 secured the loan. In November 2007,
Kellin and an associate, Brent Bryson, borrowed $958,000 from
AmWest to purchase another Red Stag Lodge condominium
unit, Unit 402. A trust deed on Unit 402 secured this loan.
¶3 Kellin and Bryson planned to fractionalize their
ownership of the units into one-eighth shares and sell those
fractionalized shares at a profit. But as Robert Burns observed,
‚The best-laid schemes o’ mice an’ men gang aft agley an lea’s us
nought but grief an’ pain for promis’d joy.‛ Robert Burns, Tae a
Moose, in The Best Laid Schemes: Selected Poetry & Prose of
Robert Burns 48 (Robert Crawford & Christopher MacLachlan
eds., 2009). Kellin sold one share in Unit 302, resulting in a
partial reconveyance of the Unit 302 trust deed and a reduction
in the loan amount by $242,563. Kellin and Bryson sold no other
shares, and both loans went into default.
¶4 AmWest foreclosed its interests in both units. A trustee’s
sale of Unit 402 took place in September 2010, at which AmWest
purchased the property with a credit bid of $625,000. At the time
of the trustee’s sale, the amount owing on the Unit 402 loan—
including interest, costs, and fees—was $1,044,453. A trustee’s
sale of Kellin’s remaining seven-eighths interest in Unit 302
occurred in January 2011. AmWest purchased that interest with
a credit bid of $455,000. The total amount owing on the Unit 302
loan at the time of the trustee’s sale was $995,777.
¶5 AmWest sought a deficiency judgment against Kellin and
Bryson to recover the remaining amount owing on the Unit 402
loan after the trustee’s sale, and against Kellin to recover the
amount remaining due on the Unit 302 loan after the trustee’s
sale. Bryson settled with AmWest. AmWest obtained summary
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AmericanWest Bank v. Kellin
judgment against Kellin and thereby established the amount
owing on each of the loans and other uncontested issues. The
matter then proceeded to trial to calculate the fair market value
of each foreclosed interest at the time of its sale.
¶6 At trial, each side presented expert testimony from a
qualified appraiser.2 Both experts testified that the highest and
best use of the units was as residential condominiums, and both
experts based their valuations on a comparable-sales analysis.
AmWest’s expert, Kevin Weed, opined that Unit 302 was worth
$615,000 as a whole, but he adjusted the valuation to $538,125—a
deduction of one-eighth—to account for the one-eighth interest
that had been sold. Weed further opined that Unit 402 was
worth $580,000. Weed also testified that there was ‚no market
for eighth share units.‛
¶7 Kellin’s expert, Robert Hunt, took a different approach.
Hunt appraised the value of an individual one-eighth share in
each unit. Hunt testified that a one-eighth share of Unit 302 was
worth $150,000 and that a similar share of Unit 402 was worth
$157,000.3 Hunt testified that each one-eighth share of each unit
2. Kellin and Bryson also testified about the units’ values, but the
district court found that their personal opinions were ‚not
particularly helpful‛ in light of their ‚obvious stake in the
outcome.‛
3. The comparable sales that Hunt used to evaluate the one-
eighth shares in Units 302 and 402 were actually one-quarter
interests in units at a different lodge in Park City. Hunt declined
to adjust the one-quarter-share values in half for comparison
purposes, explaining that such a division would violate
governing appraisal standards. Nevertheless, Hunt testified that,
for a variety of reasons, he believed those quarter-interest sales
(continued<)
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AmericanWest Bank v. Kellin
had the same value because the shares were ‚fungible,‛ i.e.,
‚*t+hey’re all the same eighth share.‛ Kellin then used Hunt’s
testimony to argue to the district court that the foreclosed
interest in Unit 302 was worth $1,050,000 ($150,000 multiplied by
seven) and that Unit 402 was worth $1,256,000 ($157,000
multiplied by eight).4
¶8 The district court rejected Kellin’s attempt to value the
foreclosed interests by multiplying the value of the one-eighth
shares. The court concluded that Kellin’s approach violated the
governing Uniform Standards of Professional Appraisal Practice
(USPAP), one of which commands appraisers to ‚refrain from
valuing the whole [of a property] solely by adding together the
individual values of *its+ various estates or component parts.‛
See Appraisal Standards Board: The Appraisal Foundation,
Uniform Standards of Professional Appraisal Practice, Standards
Rule 1-4(e) (2014–2015 ed.), http://www.uspap.org/#2. The
district court accepted Weed’s testimony that the fair market
value of Unit 402 was $580,000, noting that Weed’s appraisal
‚obviously is dramatically less than the unit was worth prior to
the real estate collapse.‛ However, the district court stated that
some of its concerns were ameliorated because AmWest’s credit
bid exceeded the valuation of the unit’s fair market value. The
district court then calculated the deficiency judgment as to Unit
(