This document includes House Committee Amendments incorporated into the bill on Thu, Feb 6, 2014 at 11:57 AM by jeyring. --> This document includes House Floor Amendments incorporated into the bill on Mon, Feb 10, 2014 at 12:02 PM by lerror. --> 1
7 LONG TITLE
8 Committee Note:
9 The Political Subdivisions Interim Committee recommended this bill.
10 General Description:
11 This bill recodifies and amends Title 38, Chapter 9, Wrongful Liens and Wrongful
12 Judgment Liens.
13 Highlighted Provisions:
14 This bill:
15 . defines terms;
16 . requires a document sponsor who submits a nonconsensual common law document
17 to the county recorder for recording to:
18 . cause the sheriff to serve notice of the recording on each affected person; and
19 . initiate a judicial proceeding to determine whether the nonconsensual common
20 law document is enforceable;
21 . provides that a document sponsor who submits an unenforceable nonconsensual
22 common law document to the county recorder for recording is liable to each
23 affected person for any actual damages;
24 . provides that a recorded nonconsensual common law document is void if the
25 document sponsor does not comply with the requirements described in this bill; and
26 . makes technical and conforming changes.
27 Money Appropriated in this Bill:
29 Other Special Clauses:
31 Utah Code Sections Affected:
33 38-9a-102 , as enacted by Laws of Utah 2005, Chapter 93
34 76-6-503.5 , as enacted by Laws of Utah 2005, Chapter 93
35 78B-5-201 , as last amended by Laws of Utah 2011, Chapter 88
36 78B-5-408 , as last amended by Laws of Utah 2011, Chapter 88
38 38-9-101 , Utah Code Annotated 1953
39 38-9-201 , Utah Code Annotated 1953
40 38-9-301 , Utah Code Annotated 1953
41 38-9-302 , Utah Code Annotated 1953
42 38-9-303 , Utah Code Annotated 1953
43 38-9-304 , Utah Code Annotated 1953
44 38-9-305 , Utah Code Annotated 1953
45 RENUMBERS AND AMENDS:
46 38-9-102 , (Renumbered from 38-9-1, as last amended by Laws of Utah 2010, Chapter
48 38-9-103 , (Renumbered from 38-9-2, as last amended by Laws of Utah 2012, Chapter
50 38-9-202 , (Renumbered from 38-9-3, as last amended by Laws of Utah 2010, Chapter
52 38-9-203 , (Renumbered from 38-9-4, as last amended by Laws of Utah 2010, Chapter
54 38-9-204 , (Renumbered from 38-9-6, as enacted by Laws of Utah 1997, Chapter 125)
55 38-9-205 , (Renumbered from 38-9-7, as enacted by Laws of Utah 1997, Chapter 125)
57 Be it enacted by the Legislature of the state of Utah:
58 Section 1. Section 38-9-101 is enacted to read:
61 38-9-101. Title.
62 (1) This chapter is known as the "Wrongful Lien Act."
63 (2) This part is known as "General Provisions."
64 Section 2. Section 38-9-102 , which is renumbered from Section 38-9-1 is renumbered
65 and amended to read:
67 As used in this chapter:
68 (1) "Affected person" means:
69 (a) a person who is a record interest holder of the real property that is the subject of a
70 recorded nonconsensual common law document; or
71 (b) the person against whom a recorded nonconsensual common law document
72 purports to reflect or establish a claim or obligation.
73 (2) "Document sponsor" means a person who, personally or through a designee, signs
74 or submits for recording a document that is, or is alleged to be, a nonconsensual common law
77 property interest in certain real property, including an owner, title holder, mortgagee, trustee, or
78 beneficial owner.
80 offers a document for recording or filing with any county recorder in the state asserting a lien,
81 or notice of interest, or other claim of interest in certain real property.
82 (5) "Nonconsensual common law document" means a document that is submitted to a
83 county recorder's office for recording against public official property that:
84 (a) purports to create a lien or encumbrance on or a notice of interest in the real
86 (b) at the time the document is recorded, is not:
87 (i) expressly authorized by this chapter or a state or federal statute;
88 (ii) authorized by or contained in an order or judgment of a court of competent
89 jurisdiction; or
90 (iii) signed by or expressly authorized by a document signed by the owner of the real
91 property; and
92 (c) is submitted in relation to H. [
92a public official's
93 H. status or .H capacity as a public official.
96 (7) "Political subdivision" means a county, city, town, school district, special
97 improvement or taxing district, local district, special service district, or other governmental
98 subdivision or public corporation.
99 (8) "Public official" means:
99a H. (a) a current or former:
101 H. [
102 H. [
103 H. [
104 H. [
105a (vii) member of the Board of Pardons and Parole;
106a an elected position in:
107 (i) the executive branch of state or federal government; or
108 (ii) a political subdivision;
109 H. [
109a in a position in a political subdivision, or
110 state or federal government H. [
111 (i) H. [
111a (ii) involves:
111b (A) .H purchasing or contracting decisions;
112 H. [
113 H. [
114 H. [
115 H. [
116 H. [
117 (9) "Public official property" means real property that has at least one record interest
118 holder who is a public official.
120 present, lawful property interest in [
121 mortgagee, trustee, or beneficial owner, and whose name and interest in that real property
122 appears in the county recorder's records for the county in which the property is located.
123 (b) "Record interest holder" includes any grantor in the chain of the title in [
124 real property.
126 certain real property is recorded or filed in the county recorder's records for the county in which
127 the property is located.
129 interest, or encumbrance on an owner's interest in certain real property and at the time it is
130 recorded is not:
131 (a) expressly authorized by this chapter or another state or federal statute;
132 (b) authorized by or contained in an order or judgment of a court of competent
133 jurisdiction in the state; or
134 (c) signed by or authorized pursuant to a document signed by the owner of the real
136 Section 3. Section 38-9-103 , which is renumbered from Section 38-9-2 is renumbered
137 and amended to read:
145 chapter [
146 filed before May 5, 2008.
147 (2) [
149 not prevent a person from seeking any other relief permitted by law.
150 (3) This chapter does not apply to a person entitled to a preconstruction or construction
151 lien under Section 38-1a-301 who files a lien pursuant to Title 38, Chapter 1a, Preconstruction
152 and Construction Liens.
153 Section 4. Section 38-9-201 is enacted to read:
155 38-9-201. Title.
156 This part is known as "Recording a Wrongful Lien."
157 Section 5. Section 38-9-202 , which is renumbered from Section 38-9-3 is renumbered
158 and amended to read:
160 employment -- Good faith requirement.
161 (1) (a) A county recorder may [
162 recorder determines that the lien is a wrongful lien [
163 (b) If the county recorder [
164 with Subsection (1)(a), the county recorder shall immediately return the original document
165 together with a notice that the document was rejected pursuant to this section to the person
166 attempting to record the document or to the address provided on the document.
167 (2) A county recorder who, within the scope of the county recorder's employment,
168 rejects or accepts a document for recording in good faith under this section is not liable for
170 (3) If a [
171 is later found not to be [
172 retroactive recording priority.
173 (4) Nothing in this chapter [
174 remedy pursuant to Utah Rules of Civil Procedure, Rule 65A, Injunctions.
175 Section 6. Section 38-9-203 , which is renumbered from Section 38-9-4 is renumbered
176 and amended to read:
178 (1) A lien claimant who records or causes a wrongful lien [
180 record interest holder for any actual damages proximately caused by the wrongful lien.
181 (2) If the person in violation of Subsection (1) refuses to release or correct the wrongful
182 lien within 10 days from the date of written request from a record interest holder of the real
183 property delivered personally or mailed to the last-known address of the lien claimant, the
184 person is liable to that record interest holder for $3,000 or for treble actual damages, whichever
185 is greater, and for reasonable attorney fees and costs.
186 (3) A person is liable to the record owner of real property for $10,000 or for treble
187 actual damages, whichever is greater, and for reasonable attorney fees and costs, who records
188 or causes to be recorded a wrongful lien [
189 county recorder against the real property, knowing or having reason to know that the document:
190 (a) is a wrongful lien;
191 (b) is groundless; or
192 (c) contains a material misstatement or false claim.
193 Section 7. Section 38-9-204 , which is renumbered from Section 38-9-6 is renumbered
194 and amended to read:
196 Summary relief -- Contested petition.
197 (1) A lien claimant whose document is rejected pursuant to Section [
198 may petition the district court [
199 expedited determination that the lien may be recorded [
200 (2) [
203 (a) be filed:
204 (i) with the district court in the county of the county recorder who refused to record the
205 document; and
206 (ii) within 10 days after the day on which the person who files the petition receives the
207 notice under Subsection 38-9-202 (1)(b) of the county recorder's refusal to record the document;
208 (b) state with specificity the grounds why the document should lawfully be recorded;
212 a hearing.
214 mail, serve a copy of the petition, notice of hearing, and a copy of the court's order granting an
215 expedited hearing on all record interest holders of the property sufficiently in advance of the
216 hearing to enable any record interest holder to attend the hearing [
219 the petition.
221 finds that the document may lawfully be recorded, [
222 the county recorder to accept the document for recording. [
224 (b) If the petition is contested, the court may award costs and reasonable attorney fees
225 to the prevailing party.
233 (i) may only determine whether a contested document, on its face, shall be recorded by
234 the county recorder; and
235 (ii) may not determine the truth of the content of the document or the property or legal
236 rights of the parties beyond the necessary determination of whether the document shall be
238 (b) A court's grant or denial of a petition under this section may not restrict any other
239 legal remedies of any party, including any right to injunctive relief pursuant to Rules of Civil
240 Procedure, Rule 65A, Injunctions.
244 Section 8. Section 38-9-205 , which is renumbered from Section 38-9-7 is renumbered
245 and amended to read:
247 Summary relief -- Finding of wrongful lien -- Wrongful lien is void.
248 (1) [
250 which the document [
251 (2) The petition described in Subsection (1) shall state with specificity the claim that
252 the lien is a wrongful lien and shall be supported by a sworn affidavit of the record interest
254 (3) (a) If the court finds the petition insufficient, [
255 without a hearing.
256 (b) If the court finds the petition is sufficient, the court shall schedule a hearing within
257 10 days to determine whether the document is a wrongful lien.
258 (c) The record interest holder shall serve a copy of the petition on the lien claimant and
259 a copy of a notice of the hearing pursuant to Rules of Civil Procedure, Rule 4, Process.
260 (d) The lien claimant is entitled to attend and contest the petition.
261 (4) A summary proceeding under this section [
264 (a) may only determine whether a document is a wrongful lien; and
265 (b) may not determine any other property or legal rights of the parties or restrict other
266 legal remedies of any party.
267 (5) (a) [
268 determines that the recorded document is a wrongful lien, the court shall issue an order
269 declaring the wrongful lien void ab initio, releasing the property from the lien, and awarding
270 costs and reasonable [
271 (b) (i) The record interest holder may [
273 (ii) The order shall contain a legal description of the real property.
274 (c) If the court determines that the claim of lien is valid, the court shall dismiss the
275 petition and may award costs and reasonable attorney's fees to the lien claimant. The dismissal
276 order shall contain a legal description of the real property. The prevailing lien claimant may
277 record a certified copy of the dismissal order.
278 (6) If the [
279 lien [
280 claim or interest.
281 (7) If [
282 proceedings related to the claim for damages may not be expedited under this section.
283 Section 9. Section 38-9-301 is enacted to read:
285 38-9-301. Title.
286 This part is known as "Recording a Nonconsensual Common Law Document."
287 Section 10. Section 38-9-302 is enacted to read:
288 38-9-302. Recording a nonconsensual common law document -- Procedure.
289 (1) For a nonconsensual common law document recorded on or after May 13, 2014,
290 within five business days after the day on which an individual submits a nonconsensual
291 common law document to a county recorder for recording, the individual shall cause the sheriff
292 to serve written notice of the recording of the nonconsensual common law document upon each
293 affected person.
294 (2) A written notice described in Subsection (1) shall include:
295 (a) the name, address, and telephone number of the document sponsor;
296 (b) the date the nonconsensual common law document was recorded; and
297 (c) a copy of the nonconsensual common law document.
298 (3) (a) No later than three business days after the day on which the sheriff serves the
299 written notice described in Subsection (1), the sheriff shall submit proof of service to the
300 county recorder for recording.
301 (b) The county recorder may not charge a fee for recording a proof of service under
302 Subsection (2)(a).
303 Section 11. Section 38-9-303 is enacted to read:
304 38-9-303. Enforcement proceeding required.
305 (1) For a nonconsensual common law document recorded on or after May 13, 2014,
306 within 10 business days after the day on which a document sponsor submits a nonconsensual
307 common law document to the county recorder for recording, the document sponsor shall file a
308 complaint in district court in the county of the county recorder where the nonconsensual
309 common law document was recorded for a proceeding to obtain an order that the
310 nonconsensual common law document is valid and enforceable.
311 (2) A complaint to initiate a judicial proceeding described in Subsection (1) shall:
312 (a) state with specificity the grounds that make the nonconsensual common law
313 document valid and enforceable;
314 (b) be supported by the document sponsor's sworn affidavit; and
315 (c) name each affected person as an opposing party.
316 (3) If the court finds that a complaint filed under Subsection (1) does not meet the
317 requirements described in Subsection (2), the court may dismiss the complaint without a
319 (4) If a complaint filed under Subsection (1) meets the requirements described in
320 Subsection (2), the court:
321 (a) shall hold a hearing;
322 (b) following the hearing, shall issue an order that:
323 (i) states whether the nonconsensual common law document is valid and enforceable;
325 (ii) includes a legal description of the real property that is the subject of the complaint;
327 (c) may award costs and reasonable attorney fees to the prevailing party.
328 (5) Within three business days after the day on which the court issues a final order in a
329 proceeding under this section, the prevailing party shall submit a copy of the court's final order
330 to the county recorder for recording.
331 (6) A nonconsensual common law document is presumed invalid and unenforceable.
332 (7) A person's lack of belief in the jurisdiction or authority of the state or of the
333 government of the United States is not a defense to liability under this section.
334 (8) A court's order in a proceeding under this section does not restrict any other legal
335 remedies available to any party, including any right to injunctive relief under Rules of Civil
336 Procedure, Rule 65A, Injunctions.
337 Section 12. Section 38-9-304 is enacted to read:
338 38-9-304. Civil liability -- Damages.
339 (1) If, under Section 38-9-303 , a court finds that a recorded nonconsensual common
340 law document is unenforceable, the document sponsor of the nonconsensual common law
341 document is liable to each affected person for any actual damages proximately caused by
342 recording the nonconsensual common law document, costs, and reasonable attorney fees.
343 (2) A person who is liable under Subsection (1) for a nonconsensual common law
344 document is jointly and severally liable with each other person who is liable for the
345 nonconsensual common law document.
346 Section 13. Section 38-9-305 is enacted to read:
347 38-9-305. Failure to comply -- Nonconsensual common law document void.
348 A recorded nonconsensual common law document that is recorded on or after May 13,
349 2014, is void and has no legal effect if the document sponsor does not:
350 (1) comply with the notice requirements described in Section 38-9-302 ;
351 (2) comply with the judicial enforcement requirements described in Section 38-9-303 ;
353 (3) prevail in a judicial enforcement proceeding under Section 38-9-303 .
354 Section 14. Section 38-9a-102 is amended to read:
355 38-9a-102. Definitions.
356 As used in this chapter, "wrongful lien" refers to a lien made in violation of Section
357 76-6-503.5 , and includes [
358 (1) a wrongful lien as defined in Section 38-9-102; and
359 (2) a nonconsensual common law document as defined in Section 38-9-102 .
360 Section 15. Section 76-6-503.5 is amended to read:
361 76-6-503.5. Wrongful liens and fraudulent handling of recordable writings --
363 (1) "Lien" means:
364 (a) an instrument or document filed pursuant to Section 70A-9a-516 ;
365 (b) a nonconsensual common law document as defined in Section 38-9-102 ;
367 wrongful lien as defined in Section 38-9-102 ; or
369 encumbrance on an owner's interest in real or personal property or a claim on another's assets.
370 (2) A person is guilty of the crime of wrongful lien if that person knowingly makes,
371 utters, records, or files a lien:
372 (a) having no objectively reasonable basis to believe he has a present and lawful
373 property interest in the property or a claim on the assets; or
374 (b) if the person files the lien in violation of a civil wrongful lien injunction pursuant to
375 Title 38, Chapter 9a, Wrongful Lien Injunctions.
376 (3) A violation of this section is a third degree felony unless the person has been
377 previously convicted of an offense under this section, in which case the violation is a second
378 degree felony.
379 (4) (a) Any person who with intent to deceive or injure anyone falsifies, destroys,
380 removes, records, or conceals any will, deed, mortgage, security instrument, lien, or other
381 writing for which the law provides public recording is guilty of fraudulent handling of
382 recordable writings.
383 (b) A violation of Subsection (4)(a) is a third degree felony unless the person has been
384 previously convicted of an offense under this section, in which case the violation is a second
385 degree felony.
386 (5) This section does not prohibit prosecution for any act in violation of Section
387 76-8-414 or for any offense greater than an offense under this section.
388 Section 16. Section 78B-5-201 is amended to read:
389 78B-5-201. Definitions -- Judgment recorded in Registry of Judgments.
390 (1) For purposes of this part, "Registry of Judgments" means the index where a
391 judgment is filed and searchable by the name of the judgment debtor through electronic means
392 or by tangible document.
393 (2) On or after July 1, 1997, a judgment entered in a district court does not create a lien
394 upon or affect the title to real property unless the judgment is filed in the Registry of Judgments
395 of the office of the clerk of the district court of the county in which the property is located.
396 (3) (a) On or after July 1, 2002, except as provided in Subsection (3)(b), a judgment
397 entered in a district court does not create a lien upon or affect the title to real property unless
398 the judgment or an abstract of judgment is recorded in the office of the county recorder in
399 which the real property of the judgment debtor is located.
400 (b) State agencies are exempt from the recording requirement of Subsection (3)(a).
401 (4) In addition to the requirements of Subsections (2) and (3)(a), any judgment that is
402 filed in the Registry of Judgments on or after September 1, 1998, or any judgment or abstract
403 of judgment that is recorded in the office of a county recorder after July 1, 2002, shall include:
404 (a) the information identifying the judgment debtor on the judgment or abstract of
405 judgment; or
406 (b) a copy of the separate information statement of the judgment creditor that contains:
407 (i) the correct name and last-known address of each judgment debtor and the address at
408 which each judgment debtor received service of process;
409 (ii) the name and address of the judgment creditor;
410 (iii) the amount of the judgment as filed in the Registry of Judgments;
411 (iv) if known, the judgment debtor's Social Security number, date of birth, and driver's
412 license number if a natural person; and
413 (v) whether or not a stay of enforcement has been ordered by the court and the date the
414 stay expires.
415 (5) For the information required in Subsection (4), the judgment creditor shall:
416 (a) provide the information on the separate information statement if known or available
417 to the judgment creditor from its records, its attorney's records, or the court records in the
418 action in which the judgement was entered; or
419 (b) state on the separate information statement that the information is unknown or
421 (6) (a) Any judgment that requires payment of money and is entered in a district court
422 on or after September 1, 1998, or any judgment or abstract of judgment recorded in the office
423 of a county recorder after July 1, 2002, that does not include the debtor identifying information
424 as required in Subsection (4) is not a lien until a separate information statement of the
425 judgment creditor is recorded in the office of a county recorder in compliance with Subsections
426 (4) and (5).
427 (b) The separate information statement of the judgment creditor referred to in
428 Subsection (6)(a) shall include:
429 (i) the name of any judgment creditor, debtor, assignor, or assignee;
430 (ii) the date on which the judgment was recorded in the office of the county recorder as
431 described in Subsection (4); and
432 (iii) the county recorder's entry number and book and page of the recorded judgment.
433 (7) A judgment that requires payment of money recorded on or after September 1,
434 1998, but prior to July 1, 2002, has as its priority the date of entry, except as to parties with
435 actual or constructive knowledge of the judgment.
436 (8) A judgment or notice of judgment wrongfully filed against real property is subject
437 to Title 38, Chapter 9, Wrongful [
438 (9) (a) To release, assign, renew, or extend a lien created by a judgment recorded in the
439 office of a county recorder, a person shall, in the office of the county recorder of each county in
440 which an instrument creating the lien is recorded, record a document releasing, assigning,
441 renewing, or extending the lien.
442 (b) The document described in Subsection (9)(a) shall include:
443 (i) the date of the release, assignment, renewal, or extension;
444 (ii) the name of any judgment creditor, debtor, assignor, or assignee; and
445 (iii) for the county in which the document is recorded in accordance with Subsection
447 (A) the date on which the instrument creating the lien was recorded in that county's
448 office of the county recorder; and
449 (B) in accordance with Section 57-3-106 , that county recorder's entry number and book
450 and page of the recorded instrument creating the judgment lien.
451 Section 17. Section 78B-5-408 is amended to read:
452 78B-5-408. Judgments and awards on foreign-money claims -- Time of money
453 conversion -- Form of judgment.
454 (1) Except as provided in Subsection (3), a judgment or arbitration award on a
455 foreign-money claim must be stated in an amount of the money of the claim.
456 (2) The judgment or award is payable in that foreign money or at the option of the
457 debtor in the amount of United States dollars which will purchase that foreign money on the
458 conversion date at a bank-offered spot rate.
459 (3) Assessed costs must be entered in United States dollars.
460 (4) Each payment in United States dollars must be accepted and credited on the
461 judgment or award in the amount of the foreign money that could be purchased by the dollars at
462 a bank-offered spot rate of exchange at or near the close of business on the conversion date for
463 that payment.
464 (5) Judgments or awards made in an action on both:
465 (a) a defense, set-off, recoupment, or counterclaim; and
466 (b) the adverse party's claim, must be netted by converting the money of the smaller
467 into the money of the larger, and by subtracting the smaller from the larger, and must specify
468 the rates of exchange used.
469 (6) A judgment substantially in the following form complies with Subsection (1):
470 IT IS ADJUDGED AND ORDERED that Defendant (insert name) pay to Plaintiff
471 (insert name) the sum of (insert amount in the foreign money) plus interest on that sum at the
472 rate of (insert rate - see Section 78B-5-410 ) percent a year or, at the option of the judgment
473 debtor, the number of United States dollars as will purchase the (insert name of foreign money)
474 with interest due, at a bank-offered spot rate at or near the close of business on the banking day
475 next before the day of payment, together with assessed costs of (insert amount) United States
477 (7) If a contract claim is of the type covered by Subsection 78B-5-406 (1) or (2), the
478 judgment or award shall be entered for the amount of the money stated to measure the
479 obligation to be paid in the money specified for payment or, at the option of the debtor, the
480 number of United States dollars as will purchase the computed amount of the money of
481 payment on the conversion date at a bank-offered spot rate.
482 (8) A judgment shall be filed in the judgment docket and indexed in foreign money in
483 the same manner, and shall have the same effect as a lien as other judgments. It may be
484 discharged by payment.
485 (9) A person shall record a judgment lien, or assignment, release, renewal, or extension
486 of a judgment lien, in the county recorder's office in accordance with [
488 (a) Sections 17-21-10 , 78B-5-201 , and 78B-5-202 ; and
489 (b) Title 38, Chapter 9, Wrongful Lien Act.
Legislative Review Note
as of 11-8-13 2:44 PM