Can intervening parties recover attorney fees under Utah's promissory note statute? Anglin v. Custom Steel Explained

Utah Code Ann. § 78-27-56.5 provides reciprocal rights to recover attorney fees in litigation arising under promissory notes. But does this protection extend to parties who intervene in such litigation, or only to the original parties to the note? The Utah Court of Appeals addressed this question in Anglin v. Custom Steel.

Background and Facts

Mark Anglin held a promissory note from Contracting Fabrication Machining (CFM), which dissolved in 1996 with remaining assets held by Stephen Blevins. When Anglin sued on the note and obtained a prejudgment writ of garnishment against those funds, Custom Steel intervened based on a prior settlement agreement that entitled it to one-third of the receivables. Custom Steel successfully dissolved the garnishment and sought attorney fees under section 78-27-56.5, which the trial court denied.

Key Legal Issues

The central issue was whether Custom Steel, as an intervening party in promissory note litigation, could recover attorney fees under section 78-27-56.5. The statute allows “either party that prevails in a civil action based upon any promissory note” to recover fees when the note provides attorney fee rights to at least one party.

Court’s Analysis and Holding

The court applied plain language interpretation, focusing on the statute’s use of “either party.” The court held that this language restricts recovery to parties to the original promissory note, not any party to the litigation. The word “either” directly modifies “party” and reasonably limits the statute’s scope to the note’s signatories. The court also considered the statute’s purpose: creating reciprocal attorney fee rights to level the playing field between parties to promissory notes, addressing situations where only one party (typically the drafter) has contractual attorney fee rights.

Practice Implications

This decision clarifies that statutory attorney fee recovery under section 78-27-56.5 requires actual party status to the underlying promissory note. Intervening parties, regardless of their success in the litigation, cannot invoke this reciprocal fee provision. Practitioners representing intervening parties should explore alternative fee recovery theories, such as contractual provisions in settlement agreements or other applicable statutes.