Nikols v. GOODMAN & CHESNOFF

MeHUGH, Judge

(concurring in result):

T17 Although I am troubled by the trial court's restrictions on Son's invocation of the Fifth Amendment, I do not believe we need to reach that issue. See generally Citizens for Responsible Transp. v. Draper City, 2008 UT 43, ¶ 15, 190 P.3d 1245 (holding that an appellate court should "avoid addressing constitutional issues unless required to do so" (internal quotation marks omitted)).

*300T18 Plaintiff admitted in the trial court and on appeal that he placed the Properties in Son's name for the express purpose of avoiding his creditors. Where that fact is not in dispute, I believe this court may rely on it even in the absence of a specific finding by the trial court. In Gardner v. Gardner, 748 P.2d 1076 (Utah 1988), the Utah Supreme Court explained, "Failure of the trial court to make findings on all material issues is reversible error unless the facts in the record are clear, uncontroverted, and capable of supporting only a finding in favor of the judgment." Id. at 1078 (emphasis added) (internal quotation marks omitted). The fact that Plaintiffs purpose in titling the Properties in Son's name was to avoid ereditors meets this test.

¶19 Thus, I would hold that Plaintiff is not entitled to the equitable protections of a purchase money resulting trust. See Horton v. Horton, 695 P.2d 102, 107 (Utah 1984) ("It is generally accepted that he who seeks equity must do equity."); Hone v. Hone, 2004 UT App 241, ¶ 7, 95 P.3d 1221 ("[A] party who seeks an equitable remedy must have acted in good faith and not in violation of equitable principles."). Furthermore, I see nothing that would limit the prerequisite of clean hands to situations where the party raising the defense is part of the class of persons defrauded by the party now seeking equity. See Jacobson v. Jacobson, 557 P.2d 156, 158 (Utah 1976) (noting that a plaintiff "who has engaged in fraud or deceit in the business under consideration" will be denied equity (emphasis added)). Here, the business under consideration is Plaintiffs placement of title to the Properties in the name of Son to avoid Plaintiff's creditors.

120 The Restatement (Second) of Trusts addresses that very issue, stating,

Where a transfer of property is made to one person and another pays the purchase price in order to accomplish an illegal purpose, a resulting trust does not arise if the policy against unjust enrichment of the transferee is outweighed by the policy against giving relief to a person who has entered into an illegal transaction.

Restatement (Second) of Trusts § 444 (1959). More specifically, the comments to section 444 state, "The most common situation in which the principle stated in this Section is applied is that in which the purchaser of property takes title in the name of another for the purpose of defrauding his creditors." Id. § 444 ert. b. There is no dispute that Plaintiff took title to the Properties in the name of Son to defraud his ereditors. Consequently, a resulting trust could not arise.

{ 21 For these reasons, I would affirm the decision of the trial court. See generally Ockey v. Lehmer, 2008 UT 37, ¶ 42, 189 P.3d 51 ("[Oln appeal, we may affirm the district court 'on any legal ground or theory apparent on the record, even though such ground or theory differs from that stated by the [district] court.'" (second alteration in original) (quoting State v. Robison, 2006 UT 65, ¶ 19, 147 P.3d 448)).