Ockey v. Lehmer

2008 UT 37
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
----oo0oo----
Scott Ockey and Catherine Condas, No. 20060142
Plaintiffs, Appellant, and
Cross-Appellee,
v.
John Lehmer; Iron Mountain
Alliance, Inc., a Utah corporation;
Iron Mountain Holding Group, L.C.;
Iron Mountain Associates, L.L.C.;
White Pine Associates, LTD; White
Pine Associates, Inc.; George Condas;
Nick J. Condas; Chris Condas; Ellen
Bayas; Alexandra Ockey; John Condas;
Susi Kontgis; Marina Condas; Hermione
Bayas; Ellen Ockey-Johnson; Keith
Kelley; Walt Brett; and Tom Guald, F I L E D
Defendants, Appellees, and
Cross-Appellants. June 24, 2008
---
Third District, Silver Summit
The Honorable Robert K. Hilder
No. 970600081
Attorneys: Eric P. Lee, Salt Lake City, for appellant
Troy L. Booher, Matthew L. Lalli, Salt Lake City, for
appellee John Lehmer
Dennis J. Conroy, Spencer C. Siebers, Salt Lake City,
for appellee Iron Mountain Alliance, Inc.
---
PARRISH, Justice:
¶1 This case arises from an intrafamilial struggle over
the division of profits from the development of a 2700-acre ranch
situated between the Park City Mountain Resort and The Canyons
Resort in Summit County. Beginning in 1976, the ranch was held
in various trusts established by members of the Condas family.
Scott Ockey (“Ockey”), one of the beneficiaries of the trusts,

1 Pack v. Case, 2001 UT App 232, ¶ 2, 30 P.3d 436.
No. 20060142 2
alleges that he was wrongly divested of his real property
interest in the ranch. He also alleges that he was wrongfully
deprived of his interest in a company, Iron Mountain Alliance,
Inc. (“IMAI”), that was dedicated to developing portions of the
ranch. Ockey filed suit, asserting a claim to quiet title to the
ranch and a claim for declaratory relief as to his ownership
therein. He also asserted claims of conversion against his
cousin John Lehmer (“Lehmer”) and IMAI, as well as a claim for
breach of fiduciary duty against Lehmer.
¶2 The district court dismissed the declaratory relief and
quiet title claims and ruled against Ockey as to the conversion
and breach of fiduciary duty claims--decisions that Ockey
appeals. We affirm.
BACKGROUND
I. FACTUAL HISTORY
¶3 The parties do not dispute the factual findings of the
district court. We therefore recite the facts in accordance with
the district court’s findings.1 The ranch property in dispute
was originally owned by John Condas, a Summit County rancher, who
left an undivided one-sixth interest in the ranch to each of his
six children upon his death in 1969. Seven years later, the
children, seeking to avoid large estate taxes, conveyed their
interests in the ranch to various irrevocable trusts. The trusts
named the third generation--John Condas’ grandchildren--as
beneficiaries.
¶4 Scott Ockey, one of those grandchildren, was the named
beneficiary under two such trusts. The first trust, settled by
his mother, Alexandra Ockey, held an undivided one-twelfth
interest in the ranch. The second trust, settled by Ockey’s
uncle, Nick Condas (“Uncle Nick”), held an undivided one-
eighteenth interest in the ranch. This left Ockey as the
beneficiary of trusts collectively holding nearly fourteen
percent of the ranch property.
¶5 Both trusts, the terms of which were nearly identical,
indicated that they would terminate upon the beneficiary’s
twenty-first birthday. Each trust could be extended, however, at
the beneficiary’s election, until he turned twenty-eight. Upon
termination, the corpus of the trusts would pass to the
beneficiary.

2 For simplicity, we will refer to both of the companies as
“IMHG.”
3 No. 20060142
¶6 Beginning as early as 1975, the Condas family sought to
capitalize on the ranch’s location by developing it. To this
end, land-owning family members leased their interests to IMAI, a
development company, in May 1989. Lehmer, one of the
grandchildren and Ockey’s cousin, represented the family in its
dealing with IMAI.
¶7 In 1993, after defaulting on its lease payments
multiple times, IMAI delivered all of its stock to Lehmer in
satisfaction of the defaulted payments. At the time Lehmer
received the IMAI stock, the sole asset of IMAI was a lease on
adjacent state lands that were critical to the future development
of the ranch (the “State Lease”). When Lehmer received the IMAI
stock, the annual payment on the State Lease was past due,
requiring the family to immediately raise funds in order to
retain the State Lease. After discussing the issue with
some--but not all--family members, Uncle Nick, the “family
communicator,” instructed Lehmer to cancel the received IMAI
stock and reissue new shares that would be sold at $1.00 per
share to representatives of each of the six families (the “1993
stock transfers”). This scheme allowed the family to raise
$6,000 to make the State Lease payment. In subsequent years,
similar stock sales provided a way to compensate family members
who were willing to invest time or money into developing the
ranch.
¶8 In 1994, in an effort to facilitate development of the
ranch, the family consolidated ownership of the ranch by
transferring their interests to a family limited liability
company, Iron Mountain Alliance, Ltd., which, in turn, conveyed
those interests to Iron Mountain Holding Group (“IMHG”), the
entity that would eventually develop the ranch.2 The transfer
was accomplished through a document in which the trustees
conveyed the trusts’ interests in the ranch to IMHG (the “1994
conveyance”). Sometime prior to the 1994 conveyance, Ockey
executed a document directing the trustees to convey his interest
in the ranch property in exchange for a partnership interest in
IMHG.
¶9 Since 1993, the ranch has become part of a successful
real estate development. All family members, including Ockey,
have enjoyed substantial profits due to their ownership interests
in IMHG, and it is anticipated that they will receive more in the
future.

3 Ockey’s cousin, Catherine Condas, initially joined this
suit but did not appeal. Therefore, we refer only to Ockey’s
claims in this opinion.
No. 20060142 4
II. PROCEDURAL HISTORY
¶10 In 1997, Ockey filed suit against fourteen family
members and IMAI.3 Ockey alleged that the 1993 stock transfers
were improper because the IMAI stock should have been split and
issued to the legal owners of the ranch, rather than sold to
family members willing to buy stock. Accordingly, he brought
claims for conversion of his stock and breach of fiduciary duty,
as well as other claims arising from the 1993 stock transfers.
¶11 Ockey also contests the 1994 conveyance, arguing that
it was void because his trusts terminated on his twenty-eighth
birthday, eight years before the 1994 conveyance, vesting in him
individually both legal and equitable title to his percentage
interest in the ranch and leaving the trustees nothing to convey.
This is the basis of Ockey’s quiet title and declaratory relief
claims.
¶12 Before trial, various settlements and dismissals
narrowed the pool of defendants to Lehmer and IMAI and narrowed
Ockey’s claims to four causes of action: (1) a declaratory
relief claim that the 1994 conveyance was void because Ockey’s
trust had terminated, vesting ownership in Ockey and divesting
the trustees of the authority to act on his behalf; (2) a quiet
title claim based on Ockey’s interest in the ranch; (3) a
conversion claim against Lehmer and IMAI; and (4) a breach of
fiduciary duty claim against Lehmer.
¶13 In 2000, the district court granted summary judgment
against Ockey on the declaratory judgment and quiet title claims,
holding that Ockey ratified the 1994 conveyance. In 2002, the
district court conducted a trial to consider Ockey’s two
remaining claims: (1) conversion against Lehmer and IMAI and
(2) breach of fiduciary duty against Lehmer. Following trial,
the district court dismissed both claims, concluding that the
conversion claim was barred by the statute of limitations and
that the breach of fiduciary duty claim failed for lack of a
remedy.
ANALYSIS

4 See Wasatch Crest Ins. Co. v. LWP Claims Adm’rs Corp.,
2007 UT 32, ¶ 6, 158 P.3d 548.
5 See Restatement (Second) of Trusts §§ 344-45 (1959)
(stating the general rule that when a trust unambiguously ends on
the happening of a certain event, the trust terminates and the
trustee retains only the authority to wind up the affairs of the
trust or to distribute the property in accordance with the terms
of the trust).
5 No. 20060142
¶14 Although Ockey raises eight issues on appeal, three are
dispositive: (1) whether the district court properly concluded
that the doctrine of ratification barred Ockey’s quiet title and
declaratory relief claims arising from the 1994 conveyance,
(2) whether the district court properly found that Ockey’s
conversion claim was barred by the statute of limitations, and
(3) whether the district court erred in refusing to fashion an
equitable remedy for Ockey’s breach of fiduciary duty claim. We
affirm the district court on all three issues.
I. THE 1994 CONVEYANCE WAS VOIDABLE AND RATIFIED BY OCKEY
¶15 The district court dismissed Ockey’s declaratory relief
and quiet title claims on summary judgment, reasoning that Ockey
ratified the 1994 conveyance of his interest in the ranch to
IMHG, the family-owned holding company created to facilitate
developing the ranch property. On appeal, Ockey argues that the
1994 conveyance was void ab initio because his trusts terminated
in 1986, on his twenty-eighth birthday, vesting both legal and
equitable title in his name and leaving nothing for the trustees
to convey in 1994. Because the 1994 conveyance was void ab
initio, he argues, it could not be ratified.
¶16 The district court’s summary dismissal of the quiet
title claim presents an issue of law that we review for
correctness.4
A. The 1994 Conveyance Was Voidable Because It
Harmed Only Ockey and Did Not Violate Public Policy
¶17 By their terms, both of Ockey’s trusts terminated, at
the latest, in 1986, when Ockey turned twenty-eight. Upon
termination, the trustees retained only the authority to wind up
affairs of the trusts and to transfer the corpus of the trusts,
the ranch property, to the beneficiary, Ockey.5 Ockey is
therefore correct in arguing that by the time the trustees
purported to convey the trust corpus to IMHG in 1994, they lacked
the authority to do so. The fact that the trustees lacked the

6 See, e.g., Consol. Realty Group v. Sizzling Platter, Inc.,
930 P.2d 268, 273 n.7 (Utah Ct. App. 1996) (“‘The term “void,”
however, as applicable to conveyances or other agreements, has
not at all times been used with technical precision, nor
restricted to its peculiar and limited sense, as
contradistinguished from “voidable” . . . .’” (quoting Black’s
Law Dictionary 1411 (5th ed. 1979))).
7 See, e.g., Mut. Benefit Life Ins. Co. v. Winne, 49 P. 446,
449 (Mont. 1897) (“A thing is void which is done against law at
the very time of doing it, and where no person is bound by the
act; but a thing is voidable which is done by a person who ought
not to have done it, but who nevertheless cannot avoid it himself
after it is done.” (internal quotation marks omitted)).
8 Wagner v. United States, 573 F.2d 447, 452 (7th Cir. 1978)
(“‘Another test of a void act or deed is that every stranger may
take advantage of it, but not of a voidable one.’” (quoting
Winne, 49 P. at 449)).
9 23 Am. Jur. 2d Deeds § 162 n.3 (2002).
10 See, e.g., Wagner, 573 F.2d at 452 (“‘Whenever the act
done takes effect as to some purposes, and is void as to persons
who have an interest in impeaching it, the act is not a nullity,
and therefore, in a legal sense, is not utterly void, but merely
voidable.’” (quoting Winne, 49 P. at 449)); Baldwin v. Burton,
850 P.2d 1188, 1193 (Utah 1993) (“[T]he general rule of
construction [is] that when an act is void as to persons who have
an interest in impeaching it, the act is not utterly void, but
merely voidable.”).
No. 20060142 6
authority to execute the 1994 conveyance, however, does not
resolve the dispute over ownership of the ranch, however, because
it does not address whether the conveyance was void ab initio or
merely voidable and therefore capable of ratification.
¶18 The distinction between void and voidable is important,
although the terms are not always used precisely.6 A contract or
a deed that is void cannot be ratified or accepted,7 and anyone
can attack its validity in court.8 In contrast, a contract or
deed that is voidable may be ratified at the election of the
injured party. Once ratified, the voidable contract or deed is
deemed valid. A deed that is voidable is valid against the
world, including the grantor,9 because only the injured party has
standing to ask the court to set it aside.10
¶19 In general, the difference between void and voidable
contracts is whether they offend public policy. Contracts that

11 Fletcher v. Stone, 20 Mass. (3 Pick.) 250, 252 (1825)
(“Acts which affect injuriously the public interest are generally
void; and those which affect only private rights are voidable.”
(citation omitted)); Black’s Law Dictionary 1604 (8th ed. 2004)
(“A contract is void ab initio if it seriously offends law or
public policy, in contrast to a contract that is merely voidable
at the election of one party to the contract.”).
12 Frailey v. McGarry, 211 P.2d 840, 847 (Utah 1949); see
also Phone Directories Co. v. Henderson, 2000 UT 64, ¶ 15, 8 P.3d
256 (“[P]eople are generally free to bind themselves pursuant to
any contract, barring such things as illegality of subject matter
or legal incapacity.”).
13 Frailey, 211 P.2d at 847.
14 14 P.2d 967, 971-72 (Utah 1932).
15 Id.
7 No. 20060142
offend an individual, such as those arising from fraud,
misrepresentation, or mistake, are voidable. Only contracts that
offend public policy or harm the public are void ab initio.11
¶20 In this case, Ockey asks us to hold that the 1994
conveyance was void because the trustees lacked authority to
transfer the ranch property to IMHG after the trusts terminated.
We decline, concluding that the 1994 conveyance was merely
voidable because the trustee’s actions were not contrary to
public policy and did not injure anyone other than Ockey himself.
¶21 In determining whether the 1994 conveyance was void or
voidable, we start with the presumption that contracts are
voidable unless they clearly violate public policy. This
presumption stems from the general rule that “the law favors the
right of men of full age and competent understanding to contract
freely.”12 For a contract to be void on the basis of public
policy, “there must be a showing free from doubt that the
contract is against public policy.”13
¶22 For example, in Millard County School District v. State
Bank of Millard County, we considered whether a contract was void
or voidable.14 At issue was whether the bank acted in excess of
its statutory power by issuing securities that were different
from those that the bank was statutorily authorized to issue.
Acknowledging that the bank exceeded its authority by issuing the
securities, we disagreed that this ultra vires act rendered the
securities void.15 “[B]y the great weight of judicial authority
it is well recognized that there is a distinction between an

16 Id. at 971-972 (citation omitted).
17 Id. at 972; see also Hatch v. Lucky Bill Mining Co., 71
P. 865, 866 (Utah 1903) (stating that corporate actions which are
“neither criminal, opposed to good morals, nor against public
policy . . . are not void, but voidable only; and a stockholder
aggrieved thereby may acquiesce in and ratify what has been done,
or may disaffirm and repudiate the voidable proceeding”).
18 366 P.2d 982, 985-86 (Utah 1961).
19 Id. at 986.
20 Id. at 985 (quoting Utah Code Ann. §§ 50-1-1, -6 (1953)).
21 Frailey, 211 P.2d at 847.
No. 20060142 8
illegal or void contract and one merely ultra vires,” which could
become enforceable by ratification or estoppel.16 We explained
that only “contracts and corporate acts and transactions which
are malum in se or malum prohibitum, which contravene some rule
of public policy, [or] violate some public duty . . . are illegal
and void.”17 Although the bank had acted in excess of its
authority, its action did not violate the general policy of the
state so egregiously that the contract was void.
¶23 In contrast, in Zion’s Service Corp. v. Danielson, we
found a contract void where the purpose of the contract was to
control prices and limit competition between the bids given by
masonry contractors.18 Finding that the contract created an
unreasonable restraint on trade, we held it void as against
public policy.19 Two elements were present in Zion’s Service
Corp. that are important to our analysis. First, the legislature
had specifically declared that contracts formed to control prices
were “‘prohibited and declared unlawful’” and would be
“‘absolutely void.’”20 Second, the contract harmed the public as
a whole--not just an individual.
¶24 Comparing Ockey’s case to these two cases demonstrates
that the 1994 conveyance was merely voidable. First, no statute
declares ultra vires acts by trustees absolutely void as against
public policy. Second, the trustees’ actions only affected
Ockey--they did not harm the general public. Finally, in light
of the freedom to contract, we have a duty to employ “any
reasonable construction” to declare contracts “lawful and not in
contravention of public welfare.”21
B. Ockey Ratified the 1994 Conveyance

22 See, e.g., Hallin v. Hallin, 596 N.W.2d 818 (Wis. Ct.
App. 1999) (holding that a contract made in violation of
trustee’s fiduciary duty was voidable and ratified by the
beneficiary).
23 Id. at 824 (internal quotation marks omitted).
24 Mahle v. First Nat’l Bank of Peoria, 610 N.E.2d 115, 117
(Ill. App. Ct. 1993).
9 No. 20060142
¶25 Whether we characterize the facts found by the district
court in the worst light or the best light, Ockey ratified the
1994 conveyance.
¶26 Placing the worst gloss on the facts found by the
district court, it is possible that the trustees engaged in self-
dealing and violated their fiduciary duty to Ockey by failing to
transfer the ranch property when the trust terminated. Even if
this were the case, the 1994 conveyance would be voidable and
ratified by Ockey. According to well-established case law, a
trustee’s violation of his fiduciary duty is voidable and capable
of ratification.22 “[A]fter a breach of trust has occurred, a
beneficiary may expressly or impliedly express satisfaction with
the trustee’s action and thereby prevent himself from claiming
thereafter that it was illegal.”23 As an Illinois court
recognized, “a trust beneficiary who consents to or approves of
an act, omission, or transaction by a trustee, may upon the
ground of waiver or estoppel be precluded from subsequently
objecting to the impropriety of such act, omission, or
transaction; this rule may arise from acquiescence, request,
participation, or notification.”24
¶27 Under this characterization of the facts, Ockey
ratified the 1994 conveyance. First, in 1993, before the trust
property was conveyed to IMHG, Ockey signed a document directing
the trustees to convey his ownership in the ranch property to
IMHG in exchange for his partnership interest in IMHG. Second,
following the 1994 conveyance, Ockey accepted the benefits
stemming from the contract. Consolidating ownership of the ranch
in IMHG facilitated the successful development of the ranch. As
a result, Ockey has received approximately two million dollars in
profits, and he stands to receive more. In 1998, Ockey entered
into a settlement agreement with IMHG’s successor, promising that
the outcome of this litigation would not affect ownership of the
ranch. The settlement agreement enabled the ranch development to
proceed and allowed Ockey to continue to profit from the

25 See Bullock v. State, 966 P.2d 1215, 1219 (Utah Ct. App.
1998) (“A principal’s retention of the fruits of a contract can
also serve as an implied ratification of the contract.”).
26 See, e.g., Zions First Nat’l Bank v. Clark Clinic Corp.,
762 P.2d 1090, 1098 (Utah 1988) (“A principal may impliedly or
expressly ratify an agreement made by an unauthorized agent.
Ratification of an agent’s acts relates back to the time the
unauthorized act occurred and is sufficient to create the
relationship of principal and agent. . . . Under some
circumstances failure to disaffirm may constitute ratification of
the agent’s acts.”).
No. 20060142 10
development. These two facts demonstrate that Ockey acquiesced
in and ratified the 1994 conveyance.25
¶28 Placing the best gloss on the facts found by the
district court, it is possible that when the trust terminated,
Uncle Nick’s role shifted from acting as a trustee to acting as
an agent on behalf of Ockey and the other family members. Of
course, actions that exceed the scope of agency are merely
voidable, not void, and therefore capable of ratification by the
principal.26
¶29 Ockey ratified the contract under this characterization
of the facts as well. Ockey owned his portion of the ranch as a
tenant in common with the rest of the family, all of whom were
interested in developing it. In order to develop the land,
specific actions were necessary. For example, the family needed
to make annual payments on the State Lease, contract with
developers, and make improvements on the state property.
¶30 In light of these responsibilities, it makes sense that
an individual within the family would take the lead. The
district court found that “in accordance with the family’s usual
business practice,” Uncle Nick took that role by acting as the
“family communicator.” Between 1969 and 1995, business decisions
concerning the development of the ranch “generally followed a
common course of dealing.” Uncle Nick contacted members of the
family, solicited their input, generated a consensus, and acted
as the family spokesperson for decisions that were made. During
this time, Ockey was “obsessed” with the ranch and “read
everything he could” about it. When Ockey asked Uncle Nick
questions about the ranch, Uncle Nick directed him to the
relevant records concerning the ranch, which were stored in an
office that Ockey and Uncle Nick shared.

27 649 P.2d 74, 78 (Utah 1982) (internal quotation marks
omitted).
28 Frailey, 211 P.2d at 845; see also Swan Creek Vill.
Homeowners Ass’n v. Warne, 2006 UT 22, ¶ 34, 134 P.3d 1122
(recognizing ratification as part of the equitable principle that
“helps to ensure that justice is met and prevents parties from
avoiding valid obligations due to technicalities”).
11 No. 20060142
¶31 As we stated in Bradshaw v. McBride, a principal “may
not be wilfully ignorant, nor may he purposely shut his eyes to
means of information within his possession and control and
thereby escape ratification.”27 Ockey was thirty-six when the
1994 conveyance took place. He had access to all relevant
records concerning his ownership of the ranch and he signed a
document directing Uncle Nick and the other trustees to transfer
his real property interest to the holding company. Ockey’s
failure to object to the 1994 conveyance constitutes
ratification--either consciously or through willful ignorance--of
the actions taken on his behalf.
¶32 The purpose of doctrines like ratification and apparent
authority is to avoid instances where a technicality can be used
to evade a contract despite the expectations of both parties. It
is well established in our case law that an individual cannot go
along with a contract for the purpose of enjoying benefits that
“although not directly conferred by the contract, are
nevertheless made possible as a result of the contract, only to
later claim a right to rescind when he discovers the benefits
. . . will not be great enough to compensate him for the loss he
will sustain by reason of the fraud.”28 Ockey’s entire argument
regarding the illegality of the 1994 conveyance rests on the
premise that when the trust terminated in 1986, ownership vested
in him, rendering the latter conveyance void. But because the
1994 conveyance was merely voidable, it was capable of
ratification by Ockey. Ockey ratified the conveyance by
directing the trustees to convey his interest to IMHG in exchange
for a partnership interest in IMHG and by accepting the benefits
of his family’s efforts to develop the ranch. For these reasons,
we uphold the district court’s determination that Ockey ratified
the 1994 conveyance and affirm the court’s summary dismissal of
his quiet title and declaratory relief claims.
II. OCKEY’S CONVERSION CLAIM IS BARRED BY
THE STATUTE OF LIMITATIONS
¶33 Ockey also alleged a conversion claim against Lehmer
and IMAI based on the 1993 stock transfers in which Lehmer

29 Russell Packard Dev., Inc. v. Carson, 2005 UT 14, ¶ 18,
108 P.3d 741.
30 See id. ¶ 39 (stating that the point at which a person
reasonably should know that he or she has suffered a legal injury
is a question of fact).
31 Utah R. Civ. P. 52(a).
32 Reinbold v. Utah Fun Shares, 850 P.2d 487, 489 (Utah Ct.
App. 1993); see also Grayson Roper Ltd. P’ship v. Finlinson, 782
P.2d 467, 470 (Utah 1989) (“To successfully attack a trial
court’s findings of fact, an appellant must first marshal all the
evidence in support of the findings and then demonstrate that the
evidence, including all reasonable inferences drawn therefrom, is
insufficient to support the findings . . . .”).
33 Utah Code Ann. § 78B-2-305(2) (2008).
No. 20060142 12
accepted the stock of IMAI from two developers who defaulted on
payments owed to the family. Rather than distributing the IMAI
stock to the family according to their proportionate interest in
the ranch property, Lehmer canceled the original stock and
reissued stock that he sold to family members in order to raise
the capital necessary for furthering development. The district
court dismissed Ockey’s conversion claim against Lehmer and IMAI,
holding that it was barred by the statute of limitations.
Because Ockey cannot invoke the equitable discovery rule, and
because his conversion claim was filed after the three-year
statute of limitations expired, we affirm the district court’s
holding.
¶34 The applicability of both the statute of limitations
and the equitable discovery rule are questions of law, reviewed
for correctness.29 The subsidiary factual determination of
whether Ockey knew or should have known about the alleged
conversion is a question of fact that Ockey argues was not
supported by the evidence.30 “Findings of fact . . . shall not
be set aside unless clearly erroneous . . . .”31 In determining
the sufficiency of the evidence supporting the district court’s
findings, “[w]e review the evidence in a light most favorable to
the trial court’s findings and affirm if there is a reasonable
basis for doing so.”32
¶35 The district court found that Ockey’s conversion claim
accrued on July 1, 1993. The statute of limitations for
conversion is three years.33 Ockey’s complaint was not filed
until June 19, 1997, several months after the statute of
limitations had run. But Ockey argues that his late filing was

34 Nolan v. Hoopiiaina (In re Hoppiiaina Trust), 2006 UT 53,
¶ 35, 144 P.3d 1129 (quoting Russell Packard, 2005 UT 14, ¶ 21).
35 Russell Packard, 2005 UT 14, ¶ 25 (internal quotation
marks omitted).
36 See Nolan, 2006 UT 53, ¶ 36.
37 Russell Packard, 2005 UT 14, ¶ 30.
13 No. 20060142
excused because the equitable discovery rule tolled the statute
of limitations.
¶36 The equitable discovery rule operates to “toll a
statute of limitations until the time at which a party discovered
or reasonably should have discovered ‘facts forming the basis for
the cause of action.’”34 There are two versions of the rule:
(1) the concealment version, requiring the plaintiff to show that
he did not know about the events giving rise to his claim due to
“the defendant’s concealment or misleading conduct,” and (2) the
exceptional circumstances version, requiring the plaintiff to
show the existence of exceptional circumstances such that
application of the general statute of limitations would be
“irrational or unjust.”35
¶37 Because Ockey has not asserted the existence of any
exceptional circumstances, we evaluate Ockey’s claim only under
the concealment version of the equitable discovery rule. To
prevail, Ockey must show that he did not know, and could not have
reasonably known, about the events giving rise to his injury
before the statute of limitations ran.36 Ockey did not raise the
alternative argument that he “acted reasonably in failing to file
suit before the limitations period expired.”37 Therefore, we do
not address this argument.
¶38 Ample evidence supports the district court’s conclusion
that Ockey either knew, or had reason to know, of the 1993 stock
transfers within three years of their occurrence. For example,
the district court found that as early as 1993 or 1994, Ockey
knew that IMAI stock had been issued to other family members
because he had ready access to all relevant records concerning
the ranch and because Ockey asked Uncle Nick if he could buy some
of Uncle Nick’s IMAI stock. Moreover, Ockey knew that family
members were being compensated with IMAI stock for their work on
behalf of IMAI. And he was knowledgeable regarding IMAI business
affairs, such as the fact that his mother was president of IMAI
and his cousin was a member of the IMAI board. Ockey had also
seen an IMAI stock ledger, shown to him by his mother, that

38 Thurston v. Box Elder County, 892 P.2d 1034, 1040-41
(Utah 1995) (holding that the availability of an equitable remedy
(continued...)
No. 20060142 14
reflected who had shares in the corporation. Based on these
facts, the district court found, as a matter of fact, that Ockey
“either knew or had reason to know of the events giving rise to a
conversion claim within three years after any conversion of IMAI
stock.” Although the district court did not clearly state when
in 1993 or 1994 these events occurred, viewing the evidence in
the light most favorable to the trial court’s findings, we must
assume that the events occurred prior to June 19, 1994.
¶39 The evidence listed by the district court is sufficient
to show that Ockey knew, or had reason to know, of the events
giving rise to his conversion claim before the three-year statute
of limitations expired in 1996. Thus, the equitable discovery
rule is not applicable, and the district court correctly
dismissed Ockey’s conversion claim as barred by the statute of
limitations.
III. OCKEY’S BREACH OF FIDUCIARY DUTY CLAIM
FAILS FOR LACK OF A REMEDY
¶40 In the district court, Ockey expressly waived the
opportunity to prove damages and elected to proceed solely in
equity, arguing that he had no adequate remedy at law for his
breach of fiduciary duty and conversion claims. As an equitable
remedy, he requested the “return” of the stock canceled in the
1993 stock transfers.
¶41 Ockey asserts that when Lehmer received the IMAI stock
as payment for the developer’s default, Lehmer should have
distributed the stock to the family members in proportion to
their ownership interest in the ranch. Lehmer’s decision to
cancel the stock and sell reissued stock in order to raise funds,
according to Ockey, amounted to conversion and a breach of
Lehmer’s fiduciary duty. As an equitable remedy, Ockey requested
the court to order that Lehmer convey to Ockey a portion of
Lehmer’s own stock in IMAI--in other words Ockey requested a
“return” of the original IMAI stock. Because Ockey’s conversion
claim is barred by the statute of limitations, we address only
his breach of fiduciary duty claim. We affirm the district
court’s conclusion that Ockey’s breach of fiduciary duty claim
fails for lack of a remedy.
¶42 The availability of a remedy is a legal conclusion that
we review for correctness.38 However, “a trial court is accorded

38 (...continued)
is reviewed for correctness but that the trial court’s
application and formulation of an equitable remedy is reviewed
for abuse of discretion).
39 U.S. Fuel Co. v. Huntington-Cleveland Irrigation Co.,
2003 UT 49, ¶ 9, 79 P.3d 945 (internal quotation marks omitted).
40 State v. Robison, 2006 UT 65, ¶ 19, 147 P.3d 448
(internal quotation marks omitted) (alteration in original).
41 Thurston, 892 P.2d at 1040.
42 Buckner v. Kennard, 2004 UT 78, ¶ 56, 99 P.3d 842; see
also Belnap v. Blain, 575 P.2d 696, 700 (Utah 1978) (“[A] resort
to equity for collection of a judgment is not authorized in the
absence of a showing of unavailability of collection by legal
(continued...)
15 No. 20060142
considerable latitude and discretion in applying and formulating
an equitable remedy, and [it] will not be overturned unless it
[has] abused its discretion.”39 Moreover, on appeal, we may
affirm the district court “on any legal ground or theory apparent
on the record, even though such ground or theory differs from
that stated by the [district] court.”40
¶43 We affirm the district court’s refusal to grant an
equitable remedy for two reasons that differ from those relied on
by the district court but that are, nevertheless, apparent from
the record. First, an adequate remedy at law exists for the
alleged breach of fiduciary duty, rendering an equitable remedy
unavailable as a matter of law. Second, even if a legal remedy
were unavailable, the remedy requested by Ockey would not be
appropriate because it would overcompensate him--granting him a
windfall at the expense of the defendants.
A. Ockey’s Request for an Equitable Remedy Fails
Because an Adequate Remedy at Law Exists
¶44 By waiving his legal claim for damages, Ockey chose to
invoke only the equitable jurisdiction of the court. However,
“[t]he right to an equitable remedy is an exceptional one, and
absent statutory mandate, equitable relief should be granted only
when a court determines that damages are inadequate and that
equitable relief will result in more perfect and complete
justice.”41 The general rule regarding equitable jurisdiction is
that “equitable jurisdiction is precluded if the plaintiff has an
adequate remedy at law and will not suffer substantial
irreparable injury.”42

42 (...continued)
process . . . .” (internal quotation marks omitted)); 27A Am.
Jur. 2d Equity § 21 (2008) (“[T]he plaintiff must affirmatively
show a lack of an adequate remedy at law on the face of the
pleading and from the evidence, and if a complaint on its face
shows that adequate legal remedies exist, equitable remedies are
not available.”).
43 2004 UT 78, ¶ 55, 99 P.3d 842.
44 Id. ¶ 57; see also Thurston, 892 P.2d at 1042 (declining
to order reinstatement as an equitable remedy for wrongful
termination where injured party did not show that damages were
inadequate or unascertainable).
45 854 P.2d 527, 531 (Utah 1993).
46 Id.
47 Id. at 532.
No. 20060142 16
¶45 In Buckner v. Kennard, deputy sheriffs in the Salt Lake
County Sheriff’s Office sought to invoke this court’s equitable
jurisdiction by requesting back pay as compensation for past pay
inequity they suffered in violation of a state civil service
statute.43 We declined to treat their claim as an equitable
claim because the deputies had an adequate remedy at law.
Furthermore, they did not argue that their injury was
substantial, irreparable, unconscionable, or caused by duress.44
¶46 Similarly, there is an adequate remedy at law for
Ockey’s claimed injury. In Broadwater v. Old Republic Surety, we
acknowledged the difficulty of fashioning a remedy for conversion
when the property converted, such as stock, fluctuates in
value.45 In light of this difficulty, we adopted the “New York
rule, which sets the measure of damages as the highest
intermediate value of the stock between the time of conversion
and a reasonable time after the owner receives notice of the
conversion.”46 This rule “provide[s] the fairest measure of
damages to all involved” by indemnifying the plaintiff, the
rightful owner of the converted stock, for his loss “without
affording a windfall at the expense of the defendant.”47 An
alternative rule, allowing the measure of damages to be
calculated at the time of trial or at the highest value of the
property between the date of conversion and the date of trial,

48 Id. at 531.
17 No. 20060142
would allow the plaintiff to “ride the stock market at the
defendant’s risk and expense until trial.”48
¶47 Although the New York rule was formulated in the
context of a conversion claim, we find it to be applicable to
Ockey’s claim for breach of fiduciary duty because Ockey’s breach
of fiduciary duty claim arises from Lehmer’s alleged conversion
of the stock. Because the two claims share the same operative
facts, we apply the same standard to Ockey’s breach of fiduciary
duty claim that we would apply to Ockey’s conversion claim.
¶48 In summary, Ockey had an adequate remedy at law, and he
waived the opportunity to pursue it because his preferred remedy
would be far more lucrative. Because equitable relief is only
available in those cases where legal relief is unavailable, we
affirm the district court’s refusal to fashion an equitable
remedy for Ockey.
B. Requiring a “Return” of the IMAI Stock
Would Overcompensate Ockey
¶49 The district court’s refusal to order the return of
Ockey’s IMAI stock is also supported on an independent basis.
Requiring that Lehmer deliver IMAI stock to Ockey would be
inequitable because it would overcompensate Ockey by awarding him
almost fourteen percent of IMAI’s stock, which is worth millions
today but was of negligible worth at the time of the alleged
conversion and breach of fiduciary duty.
¶50 When Lehmer took control of the IMAI stock after the
developers defaulted, the stock had minimal value. IMAI’s only
asset was the State Lease, an asset requiring an immediate $6,000
payment in order to retain it. At that point, development of the
ranch was not assured, and maintaining the State Lease was an
integral part of the envisioned development. Even Ockey believed
that the IMAI stock had only nominal value in 1993. The
speculative investment in IMAI made by other family members
enabled the family to keep the State Lease, which ultimately
caused IMAI’s value to skyrocket. Granting Ockey’s request would
allow Ockey to enjoy the benefits of his family members’
speculative investment, while avoiding the risks that they all
undertook in 1993.
¶51 This dynamic, where returning the allegedly converted
stock would overcompensate the plaintiff, is the same dynamic
that motivated our adoption of the New York rule. Under the New

49 Id.; see also Lysenko v. Sawaya, 1999 UT App 31, ¶ 8, 973
P.2d 445 (“If allowing the plaintiff to elect to recover the
converted property itself will over-compensate him for his
injury, then the election must be taken away from the plaintiff.”
(internal quotation marks omitted)).
No. 20060142 18
York rule, Ockey’s damages would be the highest intermediate
value between the time of Lehmer’s alleged conversion and breach
of fiduciary duty and a reasonable time after Ockey learned about
the alleged conversion and breach. Because the district court
concluded that Ockey learned about the conversion as early as
1993, his remedy for Lehmer’s breach under the New York rule
would be minimal because the value of the stock in 1993 was
minimal. Had the district court granted Ockey’s requested
remedy, it would have allowed him to circumvent the New York
rule, thereby reaping an unjustified windfall. Such a result
would be inequitable because it would effectively allow Ockey to
“ride the stock market at the defendant[s’] risk and expense.”49
Accordingly, the district court appropriately refused to fashion
an equitable remedy for Ockey that would allow him to receive a
windfall at the expense of his family members.
CONCLUSION
¶52 In summary, we affirm the district court’s grant of
summary judgment, holding that the 1994 conveyance was voidable
and capable of ratification by Ockey. We also affirm the
district court’s dismissal of Ockey’s conversion claim as barred
by the statute of limitations. Finally, the district court
appropriately refused to fashion an equitable remedy for Ockey’s
breach of fiduciary duty claim.
---
¶53 Chief Justice Durham, Associate Chief Justice Durrant,
Justice Wilkins, and Justice Nehring concur in Justice Parrish’s
opinion.