CCAM Enterprises v. Department of Commerce

2014 UT App 79
_________________________________________________________
THE U TAH COURT OF A PPEALS
CCAM ENTERPRISES, LLC,
Petitioner and Appellant,
v.
D EPARTMENT OF C OMMERCE , D IVISION OF OCCUPATIONAL AND
P ROFESSIONAL LICENSING; AND MARK STEINAGEL,
Respondents and Appellees.
Opinion
No. 20121020‐CA
Filed April 10, 2014
Third District Court, Salt Lake Department
The Honorable Kate A. Toomey
No. 110911222
Chris L. Schmutz, Attorney for Appellant
Sean D. Reyes, Brent A. Burnett, and Tony R.
Patterson, Attorneys for Appellees
J UDGE J. FREDERIC VOROS J R . authored this Opinion, in which
J UDGES G REGORY K. ORME and J AMES Z. D AVIS concurred.
VOROS, Judge:
¶1 	This case arises from a dispute over claims for more than
$110,000 of cabinetry work. The district court ruled on summary
judgment that the assignee of these claims could not collect from
the Residence Lien Recovery Fund because, under the statutory
scheme, claims are not assignable. We reverse and remand.

CCAM Enterprises v. Department of Commerce
BACKGROUND
¶2 	Classic Cabinets performed cabinetry services for Rockin R
Enterprises, a general contractor. Classic later merged with another
company 	to 	form 	CCAM 	Enterprises. 	With 	few 	exceptions,
Classic’s 	employees, 	directors, 	officers, 	and 	owners 	became
CCAM’s employees, directors, officers, and owners. As part of the
merger, Classic assigned to CCAM its “accounts receivable, credit
agreements, and account agreements, together with all contract
rights, causes of action, and claims arising therefrom.”
¶3 	Rockin R failed to pay Classic for some of the work it
performed. CCAM, as Classic’s assignee, filed twelve claims for
payment from the Residence Lien Recovery Fund (the Fund). The
Fund was created by the Lien Recovery Fund Act (LRFA). LRFA
serves two purposes. First, it “protects homeowners from having
to pay twice for the same improvements. It does so by providing
that once the homeowner has paid the general contractor in full,
the homeowner and the home are then free from claims and liens
of subcontractors who also worked on the home.” Sill v. Hart, 2007
UT 45, ¶ 14, 162 P.3d 1099 (citing Utah Code Ann. §§ 38‐11‐102(14),
‐107(1), ‐204(3)(b)(LexisNexis Supp. 2007). Second, LRFA protects
subcontractors by making reimbursements from the Fund available
to eligible subcontractors who never received payment from their
general contractors. Utah Code Ann. §§ 38‐11‐203, ‐204. The
Division of Occupational and Professional Licensing (DOPL), a
division of the Utah Department of Commerce (the Department),
administers the Fund.
¶4 	DOPL denied CCAM’s claims for reimbursement from the
Fund.1 After DOPL denied CCAM’s claims, CCAM sought agency
review by the Department. The Department also denied the claims.
CCAM then filed a complaint in district court. The district court
1. DOPL denied three of the claims for reasons unrelated to this
appeal.
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CCAM Enterprises v. Department of Commerce
granted summary judgment in DOPL’s favor. It concluded that
CCAM could not recover on the assigned claims, because CCAM
was not a qualified beneficiary under LRFA but merely the
assignee of a qualified beneficiary.
ISSUE AND STANDARD OF REVIEW
¶5 	This appeal asks whether the assignee of a qualified
beneficiary may make a claim on the Fund. “An appellate court
reviews a trial court’s legal conclusions and ultimate grant or
denial of summary judgment for correctness, and views the facts
and all reasonable inferences drawn therefrom in the light most
favorable to the nonmoving party.” Orvis v. Johnson, 2008 UT 2, ¶ 6,
177 P.3d 600 (citations and internal quotation marks omitted).
Additionally, the Utah Supreme Court has “consistently held that
the proper interpretation of a statute is a question of law that
should be reviewed for correctness.” State v. Barrett, 2005 UT 88,
¶ 14, 127 P.3d 682.
ANALYSIS
¶6 	CCAM contends that LRFA permits the assignee of a
qualified beneficiary to make a claim on the Fund. CCAM reasons
that such claims are assignable because (1) their compensatory
nature makes them “property rights and it is presumed that they
are 	assignable, 	unless 	the 	statute 	contains 	an 	explicit 	and
unambiguous 	expression 	of 	legislative 	intent 	to 	prohibit
assignment”; (2) the common law generally allows for assignment
of claims; and (3) the Fund’s provisions and rules “do not explicitly
and unambiguously prohibit assignment.”
¶7 	DOPL responds that claims on the Fund are not assignable,
because the statute requires that the claimant be a qualified
beneficiary and CCAM is not itself a qualified beneficiary but the
assignee of a qualified beneficiary. DOPL also asserts that LRFA’s
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CCAM Enterprises v. Department of Commerce
rules illustrate that an assignee may not make a claim on the Fund.
The district court concluded that, as a matter of law, “CCAM is not
a qualified beneficiary, but rather a successor and assignee of
Classic,” and thus may not make a claim on the Fund.
¶8 	At common law, “an assignee stands in the shoes of its
assignor. . . . [T]he purpose behind the rule is that an assignee has
rights and liabilities identical to those of its assignor.” Sunridge Dev.
Corp. v. RB&G Eng’g, Inc., 2010 UT 6, ¶¶ 11, 15, 230 P.3d 1000.
Furthermore, statutory claims are assignable unless the statute
dictates otherwise. See Westgate Resorts, Ltd. v. Consumer Prot.
Group, LLC, 2012 UT 55, ¶ 35, 285 P.3d 1219. But where a statute
conflicts with the common law, the common law must yield.
Anderson v. United Parcel Serv., 2004 UT 57, ¶ 12, 906 P.3d 903.
¶9 	To interpret a statute, we begin by looking to the plain
language. In re Adoption of Baby E.Z., 2011 UT 38, ¶ 15, 266 P.3d 702.
We give effect to the “purpose the statute was meant to achieve” as
evidenced by its plain language. Id. (citation and internal quotation
marks omitted). Nevertheless, “[s]tatutes are not to be construed as
effecting any change in the common law beyond that which is
clearly indicated.” Horne v. Horne, 737 P.2d 244, 248 (Utah 1987).
¶10 	LRFA does not mention assignment. See generally Utah Code
Ann. § 38‐11‐203 (LexisNexis Supp. 2007). It states that a claimant
may receive payments from the Fund only if “the claimant was a
qualified beneficiary during the construction of a residence.” Id.
§ 38‐11‐203(1)(a). But it does not contain a statutory instruction
barring assignment. Under these circumstances, the Utah Supreme
Court’s decision in Westgate Resorts, Ltd. v. Consumer Protection
Group, LLC, permits the assignee to make the claim. See 2012 UT 55,
285 P.3d 1219.
¶11 	In Westgate, the Utah Supreme Court held that because the
Utah 	Consumer 	Sales 	Practices 	Act 	(the 	UCSPA) 	does 	not
specifically bar assignment of claims, claims under the UCSPA are
assignable. Id. ¶ 35. The UCSPA authorizes a “consumer” to bring
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CCAM Enterprises v. Department of Commerce
a claim for “[a] deceptive act or practice by a supplier in connection
with a consumer transaction.” Utah Code Ann. § 13‐11‐4(1)
(LexisNexis 	Supp. 	2012). 	Additionally, 	it 	provides 	that 	“[a]
consumer who suffers loss as a result of a violation of this chapter
may recover.” Id. § 13‐11‐19(2) (emphasis added). Consumer
Protection Group did not qualify as a consumer but held assigned
consumer claims. See Westgate, 2012 UT 55, ¶ 4. Based on the
assigned claims, Consumer Protection Group brought an action for
fraud against Westgate under the UCSPA. Id. ¶¶ 4–5. The district
court ruled that because Consumer Protection Group did not
qualify as a “consumer,” it could not bring the claims under the
UCSPA. Id. ¶ 30. The Utah Supreme Court reversed. Id. ¶ 36. The
court held that “[w]here property is sought to be recovered, claims
for fraud are assignable. This would not be true where there is a
statutory instruction to the contrary. But the UCSPA does not bar
assignability. We therefore see no reason that UCSPA claims
should not be assignable.” Id. ¶ 35.
¶12 	Likewise, we see no reason that LRFA claims should not be
assignable. Like the Consumer Protection Group, CCAM, though
not itself a qualified claimant, holds claims assigned by one. And
like the UCSPA, LRFA specifies who may make claims, but
contains no statutory instruction prohibiting assignment. See id.
Accordingly, under Westgate, CCAM may pursue its assigned
claims against the Fund.
¶13 	This reading of LRFA reinforces its twofold purpose of
protecting both homeowners and subcontractors. Subcontractors
are protected because they may assign their claims if they change
their form of business, close their doors, or for some other reason
need to assign their claims. And homeowners are protected
because LRFA still provides them protection from subcontractor
liens.
¶14 	DOPL argues that because LRFA creates a “pay‐to‐play”
program, it does not permit CCAM to make a claim on the Fund.
But DOPL has not established that the pay‐to‐play program would
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CCAM Enterprises v. Department of Commerce
be undermined by allowing CCAM to make a claim on the Fund.
Classic paid into the fund and met the statutory requirements for
a qualified beneficiary. Classic could have made a claim on the
Fund but instead assigned its claims to CCAM. So Classic paid, and
following assignment, CCAM can now play. Allowing CCAM to
pursue the assigned claims neither expands nor shrinks the pool of
claimants nor the amount needed to satisfy their claims.
¶15 	DOPL also asserts that LRFA’s rules prohibit an assignee
from claiming against the Fund. LRFA’s rules state that a registra‐
tion cannot be “transferred, lent, borrowed, sold, exchanged for
consideration, assigned, or made available for use by an entity
other than the registrant for any reason.” Utah Admin. Code R156‐
38a‐301b(4). LRFA’s rules also state that “[a]ny change in entity
status by a registrant requires registration with the Fund by the
new or surviving entity before that entity is a qualified benefi‐
ciary.” Id. R156‐38a‐301b(1). Finally, LRFA’s rules provide that a
claimant “shall not be considered a qualified beneficiary registrant
merely by virtue of owning or being owned by an entity that is a
qualified beneficiary.” Id. R156‐38a‐301b(5). But none of these rules
prohibits assignment of the claim, and this omission is dispositive
under Westgate.
CONCLUSION
¶16 	For the foregoing reasons, the judgment of the district court
is reversed and the case remanded for further proceedings.
20121020‐CA 	2014 UT App 79	6