Can defendants still purchase pending claims against themselves at execution sales? Lamoreaux v. Black Diamond Explained

In Lamoreaux v. Black Diamond, the Utah Court of Appeals addressed whether defendants can still purchase pending claims against themselves at execution sales following the 2004 repeal of Rule 69 of the Utah Rules of Civil Procedure. The court’s affirmative answer provides important guidance for creditors and debtors in execution proceedings.

Background and Facts

David Lamoreaux sued Black Diamond Holdings for breach of a real estate listing agreement, seeking an 8% sales commission on a multimillion-dollar transaction. After a bench trial but before any ruling on the merits, third-party judgment creditors obtained a writ of execution against Lamoreaux’s interest in the action. Despite notice of the execution sale, Lamoreaux failed to file a reply or objection. At the judicial sale, Black Diamond submitted the highest bid and purchased Lamoreaux’s claim against itself. The district court then substituted Black Diamond as plaintiff and granted its motion to dismiss the action.

Key Legal Issues

The primary issue was whether the 2004 repeal of Rule 69 eliminated the ability to execute against and sell choses in action (intangible property rights like legal claims). Lamoreaux argued that the removal of express language referencing choses in action indicated an intent to prohibit their execution and sale.

Court’s Analysis and Holding

The Court of Appeals disagreed with Lamoreaux’s interpretation. While Rule 69 previously made express reference to choses in action in its service provisions, the court noted that even under the old rule, the definition of executable property never expressly included choses in action. Instead, it covered “all of the judgment debtor’s personal property and real property which is not exempt from execution.” The current Rule 64 defines executable property even more broadly as “the defendant’s property of any type not exempt from seizure,” specifically including “intangible property.” Since choses in action are a type of intangible property, they remain subject to execution under the current rules.

Practice Implications

This decision confirms that creditors can still use execution procedures to reach and sell pending legal claims, and defendants can strategically purchase claims against themselves to achieve dismissal. However, the case also emphasizes the critical importance of timely challenging execution writs. Rule 64E requires defendants to reply within 10 days of service, and Rule 64(e)(1) requires third-party claimants to assert their interests before the property is sold. The court rejected Lamoreaux’s attempt to raise ownership issues for the first time at the sale itself, holding that oral objections at the auction are insufficient to satisfy procedural requirements.