Can redemption rights be assigned after an execution sale? Cox v. Armstrong Constr. Explained

The Utah Court of Appeals in Cox v. Armstrong Constr. addressed a significant issue regarding the assignability of redemption rights following execution sales. The case provides important guidance for practitioners handling post-judgment collection and intervention motions.

Background and Facts

Cox hired Armstrong Construction to build a duplex but their relationship soured, leading to litigation. Armstrong obtained a summary judgment against Cox for $146,475.01. When Cox failed to pay, Armstrong conducted an execution sale where it purchased Cox’s interest for $5,000. Cox then assigned her redemption right to Covarrubias, who attempted to redeem the property by paying the sale price plus interest as required by Rule 69C. Armstrong refused the redemption, prompting Covarrubias to move to intervene in the original lawsuit.

Key Legal Issues

The primary issue was whether Covarrubias could intervene under Rule 24(a)(2), which requires the intervenor to have “an interest relating to the property or transaction that is the subject of the action.” This turned on two questions: whether redemption rights are assignable under Utah law, and whether the execution sale extinguished Cox’s redemption right.

Court’s Analysis and Holding

The court held that redemption rights are assignable. Rule 69C(b) allows redemption “by their successors in interest,” which the court interpreted to “clearly include assignees.” The rule also requires assignees to provide “an assignment, properly acknowledged if necessary to establish the claim” when seeking redemption. The court emphasized that redemption rights arise from execution sales rather than being extinguished by them, distinguishing the redemption right from the property interest sold to Armstrong.

Practice Implications

This decision confirms that judgment debtors can strategically assign redemption rights to third parties who may have better resources to exercise them. Practitioners should carefully document such assignments and ensure compliance with Rule 69C’s procedural requirements. For judgment creditors, this ruling highlights the importance of monitoring potential redemptions even when dealing with seemingly judgment-proof debtors who may assign their redemption rights to financially capable third parties.