Utah Court of Appeals
Does Utah's reciprocal attorney fees statute apply to alter ego claims? Barker v. Bushnell Explained
Summary
Third-party plaintiff Bushnell sued Barker under an alter ego theory to pierce the corporate veil and hold Barker personally liable for his company’s breach of contract. The district court dismissed the third-party complaint and denied Barker’s request for attorney fees under the reciprocal attorney fees statute.
Analysis
Background and Facts
Third-party plaintiff John K. Bushnell sued Dale K. Barker under an alter ego theory to pierce the corporate veil of Dale K. Barker Co., PC and hold Barker personally liable for breach of contract claims. The district court dismissed the third-party complaint after determining Bushnell failed to establish that Barker acted as his company’s alter ego. Barker then requested attorney fees as the prevailing party under Utah’s reciprocal attorney fees statute, arguing that because the underlying contract contained an attorney fee provision, he was entitled to fees under Utah Code § 78B-5-826.
Key Legal Issues
The central issue was whether Utah’s reciprocal attorney fees statute applies when litigation is based on an equitable alter ego theory rather than directly on the contract itself. The statute requires two elements: (1) the underlying litigation must be based upon a contract, and (2) the contract must allow at least one party to recover attorney fees.
Court’s Analysis and Holding
The Utah Court of Appeals affirmed the denial of attorney fees. The court explained that although Bushnell claimed breach of contract, the actual basis for the third-party action was the equitable doctrine of alter ego that would pierce the corporate veil. Bushnell did not claim Barker was directly and personally liable under the contract. Additionally, Barker could not show he would have been entitled to fees under the contract’s provision because he was not a party to the contract and the court did not determine that Bushnell was the defaulting party.
Practice Implications
This decision clarifies that Utah’s reciprocal attorney fees statute requires the litigation to be based directly on a contract, not merely on equitable theories that could result in contractual liability. Practitioners should carefully analyze whether claims are truly contract-based or rely on equitable doctrines when determining fee entitlement. The court also reminded practitioners that rule 54(d) cost requests must be filed within five days of judgment entry and cannot be delayed until appeal.
Case Details
Case Name
Barker v. Bushnell
Citation
2009 UT App 385
Court
Utah Court of Appeals
Case Number
No. 20081035-CA
Date Decided
December 24, 2009
Outcome
Affirmed
Holding
The reciprocal attorney fees statute does not apply when the underlying litigation is based on an alter ego theory rather than directly on the contract, and the party claiming fees cannot establish they were entitled to fees under the contract’s terms.
Standard of Review
Correctness for questions of law involving attorney fees and rule interpretation; abuse of discretion for trial court’s decision to award costs
Practice Tip
When defending against alter ego claims, remember that prevailing does not automatically entitle you to attorney fees under the reciprocal attorney fees statute unless the action is directly based on the contract itself.
Need Appellate Counsel?
Lotus Appellate Law handles appeals before the Utah Court of Appeals, Utah Supreme Court, California Court of Appeal, and the United States Court of Appeals for the Tenth Circuit.
Related Court Opinions
About these Decision Summaries
Lotus Appellate Law publishes these summaries to keep practitioners informed — not as legal advice. Each case turns on its own facts. If a decision here is relevant to your matter, we’re happy to discuss it.