Jeppesen v. Bank of Utah

2018 UT App 234
THE UTAH COURT OF APPEALS
LUKE D. JEPPESEN ,
Appellee,
v.
BANK OF U TAH , HARRY M CM URDIE, AND S HIRA M CM URDIE,
Appellants.
Opinion
No. 20170062-CA
Filed December 20, 2018
Fourth District Court, Provo Department
The Honorable Christine S. Johnson
No. 150401095
John D. Luthy and Marty E. Moore, Attorneys
for Appellants
Bryan H. Booth and John W. Mann, Attorneys
for Appellee
JUDGE DIANA HAGEN authored this Opinion, in which
JUDGES GREGORY K. O RME and R YAN M. HARRIS concurred.
HAGEN, Judge:
¶1 	Bank of Utah, Harry McMurdie, and Shira McMurdie
(collectively, the McMurdies) appeal the district court’s grant of
summary judgment in favor of Luke D. Jeppesen (Jeppesen). In
2001, 	Jeppesen’s 	father, 	Zane 	Jeppesen 	(Zane), 	persuaded
Harry McMurdie (Harry) to invest $500,000 in a real estate
project 	in 	exchange 	for 	a 	promissory 	note 	secured 	by 	a
trust deed to real property Zane owned in Utah County (the
Alpine 	Property). 	Zane 	defaulted 	on 	the 	note 	in 	2003, 	but
negotiated three subsequent agreements promising to pay the
McMurdies by an extended due date. Many years later, the

Jeppesen v. Bank of Utah
20170062-CA 	2 	2018 UT App 234
McMurdies foreclosed on the Alpine Property, which Zane had
since conveyed to his son through a quitclaim deed.
¶2 	Jeppesen brought a quiet title action. On cross-motions for
summary judgment, the district court ruled that the six-year
statute of limitations barred the nonjudicial foreclosure sale of
the Alpine Property. Because we determine that there were
genuine issues of material fact as to whether (1) the 2001 Note
was extended or superseded by the subsequent agreements, and
(2) 	Jeppesen 	was 	estopped 	from 	asserting 	the 	statute 	of
limitations as a defense, we conclude the district court erred in
granting 	summary 	judgment. 	Accordingly, 	we 	reverse 	and
remand.
BACKGROUND
¶3 	Between 1998 and 2004, Zane worked as an agent of
Beverly 	Hills 	Development 	Corporation, 	a 	real 	estate
development company engaged in a widespread fraud scheme
(the Beverly Hills project). During that time, Zane acquired a
total of 134 Utah investors for the Beverly Hills project, raised
approximately 	$8 	million, 	and 	earned 	nearly 	$1 	million 	in
compensation. Most of the investments offered or sold by Zane
took the form of unsecured promissory notes. In some cases,
however, the promissory notes sold to investors were secured by
trust deeds recorded against the Alpine Property. This case
concerns the nonjudicial foreclosure sale of the Alpine Property
by one of those investors.
¶4 	Harry had known Zane for several decades. In 2001,
Zane 	approached 	Harry 	about 	investing 	in 	the 	Beverly
Hills project. Zane assured him that his investment would be
secured by a first-position trust deed on the Alpine Property, a
five-acre parcel which Zane claimed was worth $500,000 per
acre.

Jeppesen v. Bank of Utah
20170062-CA 	3 	2018 UT App 234
¶5 	Harry agreed to invest some of his retirement funds held
by the Bank of Utah (the McMurdie IRA) in the project. On
September 24, 2001, Zane personally executed a promissory note
for a $500,000 loan from the McMurdie IRA, secured by two
trust deeds1 recorded against the Alpine Property (collectively,
the 2001 Note). The 2001 Note required Zane to make monthly
payments of $5,000, with the entire unpaid principal and twelve
percent interest due on March 24, 2003. The 2001 Note provided
that “the makers, sureties, guarantors and endorsers hereof . . .
consent to any and all extensions of time, renewals, . . . or
modifications that may be granted by the holder hereof with
respect to the payment or other provisions of this note.”
¶6 	From 	October 	2001 	through 	March 	2003, Zane 	made
regular payments of $5,000 per month to the McMurdie IRA. But
on the maturity date of the 2001 Note, Zane executed a new
promissory note (the 2003 Note). The 2003 Note stated that the
full principal and interest would be due on March 24, 2004. Zane
did not create a new trust deed, but the 2003 Note listed the
Alpine Property as the “Property Address.”
¶7 	From 	April 	2003 	through 	March 	2004, 	Zane 	made
payments to the McMurdie IRA. When the maturity date on the
2003 Note arrived, Zane executed two new promissory notes,
one 	for 	the 	original 	$500,000 	investment 	and 	a 	second 	for
$200,271.11 in interest already due and owing on the original
debt (collectively, the 2004 Notes). The 2004 Notes stated that “a
Mortgage, Deed of Trust or Security Deed . . . dated the same
date as this Note, protects the Note Holder from possible losses
which might result if I do not keep the promises which I make in
the Note.” Again, Zane did not record a new trust deed, but the
2004 Notes listed the Alpine Property as the “Property Address.”
1. The second trust deed is identical to the first and appears to
have been inadvertently recorded.

Jeppesen v. Bank of Utah
20170062-CA 	4 	2018 UT App 234
The 2004 Notes stated that the full principal and interest would
be due on March 24, 2005.
¶8 	In early 2005, Zane was charged with two counts of
securities fraud, two counts of dealing unregistered securities,
and two counts of sale by an unauthorized agent based on his
work for the Beverly Hills project. He pled no contest and
entered into a Stipulation and Consent Order with the Utah
Division of Securities, restricting his ability to deal in securities,
prohibiting further fraudulent conduct, and requiring him to pay
a fine.
¶9 	In 	September 	2005, 	Zane 	filed 	for 	bankruptcy. 	The
McMurdies were aware of the bankruptcy filing, but they did
not challenge the discharge of Zane’s underlying debt and did
not seek relief from the automatic stay so as to commence
foreclosure proceedings at that time. See generally 11 U.S.C. § 362
(2012). Zane assured Harry that “he had gone to considerable
expense with an attorney to carve . . . [the Alpine Property] and
[the McMurdies’] note out of the bankruptcy” so the McMurdies
were still “safe with these instruments” and could “plan on
being repaid.” On December 14, 2005, the bankruptcy court
entered 	an 	order 	of 	discharge 	for 	Zane, 	extinguishing 	his
personal liability for the debt.2 Although not evident from the
2. Ordinarily, a secured creditor “is not limited to foreclosure on
the 	mortgaged 	property 	should 	the 	debtor 	default 	on 	his
obligation; rather, the creditor may in addition sue to establish
the debtor’s in personam liability for any deficiency on the debt
and 	may 	enforce 	any 	judgment 	against 	the 	debtor’s 	assets
generally.” Johnson v. Home State Bank, 501 U.S. 78, 82 (1991)
(italics omitted). A discharge in bankruptcy “extinguishes only
‘the personal liability of the debtor.’” Id. at 83 (quoting 11 U.S.C.
§ 524(a)(1) (2012)). But “a creditor’s right to foreclose on the
mortgage survives or passes through the bankruptcy.” Id.

Jeppesen v. Bank of Utah
20170062-CA 	5 	2018 UT App 234
record, 	the 	bankruptcy 	trustee 	apparently 	abandoned 	the
bankruptcy estate’s interest in the Alpine Property, presumably
because 	the 	secured 	interests 	exceeded 	the 	value 	of 	the
property.3
¶10 	Several years later, unbeknownst to the McMurdies, Zane
executed and recorded a quitclaim deed, conveying his interest
in the Alpine Property to his son, Jeppesen.
¶11 	In 2011, aware that the repayment deadline under the
2004 Notes had passed on March 24, 2005 and that a six-year
statute 	of 	limitations 	had 	begun 	to 	run 	from 	that 	date,
Harry 	approached 	Zane 	to 	discuss 	the 	outstanding 	debt.
The parties executed two documents extending the maturity
date of the 2004 Notes to March 24, 2013 (collectively, the
2011 Modification Agreement). These documents indicate that
the “Start Date of [the] Original Contract” was “24 September
2001,” the date of the 2001 Note. The recitals explain that
the 	2001 	Note 	was 	secured 	by 	two 	trust 	deeds, 	which
“remain 	liens 	of 	record 	against” 	the 	Alpine 	Property, 	and
that “the parties hereto desire to enter into this Modification
Agreement for the purpose of . . . memorializing the terms
by 	which 	the 	[trust 	deeds] 	will 	be 	released.” 	The 	2011
Modification 	Agreements 	include 	an 	“Extension 	of 	the
Maturity 	Date” 	to 	March 	24, 	2013. 	The 	parties 	signed
3. “Property of the debtor in which a creditor has a security
interest becomes property of the debtor’s bankruptcy estate
subject to the lien or encumbrance, even where the lien or
encumbrance equals or exceeds the fair market value of the
property and the debtor, therefore, lacks equity in the property.”
9A Am. Jur. 2d Bankruptcy § 1243 (2018). “Encumbered property
remains in the estate until the secured creditor obtains relief
from the automatic stay to proceed against the property or until
the property is abandoned from the estate by the trustee.” Id.

Jeppesen v. Bank of Utah
20170062-CA 	6 	2018 UT App 234
the agreements on March 22, 2011, two days before the statute of
limitations was to run on the McMurdies’ claims.
¶12 	When 	the 	maturity 	date 	of 	the 	2011 	Modification
Agreements approached, Zane and Harry agreed to extend the
maturity date by another three months (the 2013 Extension
Agreements). The 2013 Extension Agreements again list the start
date of the original contract as “24 September 2001” and set a
new maturity date of June 24, 2013. Zane testified that the
purpose of the document was “[t]o keep Harry McMurdie from
foreclosing for three more months.”
¶13 	When 	Zane 	failed 	to 	pay 	the 	principal 	and 	accrued
interest by June 24, 2013, the McMurdies initiated nonjudicial
foreclosure 	proceedings 	against 	the 	Alpine 	Property. 	A
foreclosure sale was held on July 23, 2015, and a trustee’s deed
conveying the property to the McMurdie IRA was recorded on
July 28, 2015. Jeppesen filed this quiet title action one day before
the foreclosure sale.
¶14 	Jeppesen argued that the six-year statute of limitations
barred the nonjudicial foreclosure sale because the last payment
on the 2001 Note was received on March 18, 2004. On cross-
motions for summary judgment, the district court ruled that the
statute of limitations barred the McMurdies’ foreclosure sale and
granted 	summary 	judgment 	in 	favor 	of 	Jeppesen. 	The
McMurdies appeal.
STANDARD OF REVIEW
¶15 	In reviewing a grant of summary judgment, “we accord
no deference to the [district] court, but review its conclusions for
correctness.” McNair v. Farris, 944 P.2d 392, 394 (Utah Ct. App.
1997) (quotation simplified).

Jeppesen v. Bank of Utah
20170062-CA 	7 	2018 UT App 234
ANALYSIS
¶16 	On appeal, the McMurdies argue that the district court
erred in granting summary judgment in favor of Jeppesen on the
basis 	of 	the 	statute 	of 	limitations. 	Summary 	judgment 	is
appropriate 	when 	“there 	is 	no 	genuine 	dispute 	as 	to 	any
material fact and the moving party is entitled to judgment as a
matter of law.” Utah R. Civ. P. 56(a). At the summary judgment
stage, the district court must “view all facts and reasonable
inferences in the light most favorable to the nonmoving party.”
Pugh v. Dozzo-Hughes, 2005 UT App 203, ¶ 26, 112 P.3d 1247.
Under this standard, “a district court is precluded from granting
summary judgment if the facts shown by the evidence on a
summary judgment motion support more than one plausible but
conflicting inference on a pivotal issue in the case,” especially if
the inferences depend upon the parties’ intent. Telegraph Tower
LLC v. Century Mortg. LLC, 2016 UT App 102, ¶ 24, 376 P.3d 333
(quotation simplified).
¶17 	The McMurdies advance two alternative arguments for
reversal. First, the McMurdies claim that there is a material issue
of 	fact 	as 	to 	whether 	the 	parties’ 	subsequent 	agreements
extended the maturity date of the 2001 Note to June 24, 2013, so
that the statute of limitations did not begin to run until that date.
Alternatively, the McMurdies contend that there is a genuine
issue of material fact as to whether Zane induced Harry to forgo
initiating 	the 	foreclosure 	within 	the 	limitation 	period 	and
whether Jeppesen should be estopped from asserting the statute
of limitations based on his father’s actions. We agree that there
are material issues of fact on both issues that preclude summary
judgment.
I. Issues of Fact Regarding Extension of the 2001 Note
¶18 	The first issue on appeal is whether there are material
questions of fact as to when the statute of limitations began to

Jeppesen v. Bank of Utah
20170062-CA 	8 	2018 UT App 234
run 	on 	the 	McMurdies’ 	foreclosure 	cause 	of 	action. 	The
nonjudicial foreclosure sale of the Alpine Property was based on
the trust deeds securing the 2001 Note. “A trust deed secures the
obligations due under a note by transferring a security interest in
real property to a trustee to be held until the debt is repaid.”
DiMeo v. Nupetco Assocs., LLC, 2013 UT App 188, ¶ 7, 309 P.3d
251. “In other words, the pledged property is used as collateral
for the obligation and can be foreclosed in the event of default.”
Id. An action to foreclose the trust deed must be commenced
“within the period prescribed by law for the commencement of
an action on an obligation secured by a trust deed.” Utah Code
Ann. § 57-1-34 (LexisNexis Supp. 2018).
¶19 	Here, because the trust deeds secured the 2001 Note, the
parties agree that the six-year limitations period applies for
actions “upon any contract, obligation, or liability founded upon
an instrument in writing.” Id. § 78B-2-309(2) (2012).4 The statute
of limitations begins to run “when the contract was breached—
that is, the date of the first missed payment, or upon the
maturity 	date 	of 	the 	loan, 	if 	no 	action 	has 	been 	taken 	to
accelerate payment prior to that date.” See Goldenwest Fed. Credit
Union v. Kenworthy, 2017 UT App 191, ¶ 7 n.4, 406 P.3d 253
(citation omitted).
¶20 	In 	granting 	summary 	judgment, 	the 	district 	court
concluded that the statute of limitations began to run on March
18, 	2004, 	the 	date 	the 	last 	payment 	was 	received 	by 	the
McMurdies. 	Accordingly, 	the 	court 	ruled 	that 	the 	six-year
statute of limitations had long since run when the trustee’s sale
4. Neither side has argued that the six-year statute of limitations
for negotiable instruments under the Uniform Commercial Code
applies, which has potentially different triggering dates. Cf.
Deleeuw v. Nationstar Mortgage LLC, 2018 UT App 59, ¶ 12, 424
P.3d 1075.

Jeppesen v. Bank of Utah
20170062-CA 	9 	2018 UT App 234
occurred in 2015. In a subsequent order, the court rejected the
McMurdies’ argument that the subsequent agreements had the
effect of extending or renewing the 2001 Note.5
¶21 	Whether the subsequent agreements extended the 2001
Note secured by the trust deeds is a question of fact for trial. A
new note does not “extinguish the debt for which the original
note was given unless it clearly appears that it was the intention
of the parties that the execution of the 	new note and the
cancellation 	of 	the 	old 	note 	should 	extinguish 	the 	debt
represented by the old note.” First Sec. Bank of Utah v. Proudfit
Sporting Goods Co., 552 P.2d 123, 124 (Utah 1976) (quotation
simplified).
¶22 	In this case there is conflicting evidence regarding the
parties’ intent. As the district court noted, the 2011 Modification
Agreement 	states 	that 	the 	“2001 	Note 	was 	replaced 	and
superseded by” the 2004 Notes. The court also noted that the
2004 	Notes 	“substitute 	different 	parties 	(Harry 	and 	Shira
McMurdie 	and 	the 	McMurdie 	Family 	Trust 	in 	lieu 	of 	the
5. The McMurdies did not raise this argument initially because
they had elected to void all agreements that followed the 2001
Note on the basis of fraud, thereby avoiding a provision in the
2011 Modification Agreements that might have released any
securities fraud claims against Zane. In a motion to revise or
vacate the court’s summary judgment ruling, the McMurdies
reversed their prior position and elected to ratify the 2003 Note,
2004 Notes, and the 2011 Modification Agreement. Although it
would have been well within the district court’s discretion to
refuse to entertain the argument based on the McMurdies’
belated change of heart, the court chose to address it on the
merits. The court declined to revisit its summary judgment
ruling only after concluding that the McMurdies could not
prevail on the merits of their alternative argument.

Jeppesen v. Bank of Utah
20170062-CA 	10 	2018 UT App 234
McMurdie IRA) as well as different amounts (the $200,271.11
interest which had accrued on the 2001 Note) and different
interest rates (sixteen percent compounded in lieu of twelve
percent).” This evidence supports the district court’s conclusion
that the subsequent agreements were “new obligations which
supersede and satisfy the 2001 Note.”
¶23 	However, the McMurdies also presented ample evidence
to support the opposite conclusion. The 2001 Note provided that
it could be extended or renewed by the parties. According to
Harry’s affidavit, at Zane’s request, he agreed to “extend” his
investment when the 2001 Note was due to expire in March
2003. 	Although 	Harry 	invested 	no 	additional 	money, 	Zane
executed a second promissory note for $500,000, listing the
Alpine Property secured by the trust deeds and setting a new
due date of March 24, 2004. The content of the 2003 Note and the
circumstances surrounding it could support a finding that it was
intended to extend by one year the due date of the 2001 Note
secured by the trust deeds.
¶24 	Harry explained that when the new due date arrived,
Zane again proposed that he “extend the debt on the original
$500,000 	promissory 	note 	investment 	by 	one 	year.” 	Zane
executed 	two 	more promissory 	notes, 	one 	for 	the 	$500,000
principal invested in 2001 and one for the interest that had
accrued since 2001. These 2004 Notes stated that they were
secured by “a Mortgage, Deed of Trust or Security deed.”
Although no new trust deed was recorded, the 2004 Notes again
listed 	the 	Alpine 	Property. 	In 	his 	own 	testimony, 	Zane
confirmed that the 2004 Notes were “extending” his debt to the
McMurdies. The extension of the due date by exactly one year,
the promise to pay both the original principal of $500,000 plus
the interest accrued since 2001, the representation that the note
was secured, the reference to the Alpine Property, and the
testimony of both parties all support the conclusion that the 2004

Jeppesen v. Bank of Utah
20170062-CA 	11 	2018 UT App 234
Notes were intended as a further extension of the 2001 Note
secured by the trust deeds.
¶25 	Finally, the evidence regarding the 2011 Modification
Agreement supports a finding that it was intended to extend
the 	2001 	Note. 	The 	2011 	Modification 	Agreement 	explains
that the trust deeds securing the 2001 Note remain liens of
record 	against 	the 	Alpine 	Property 	even 	though 	Zane’s
personal 	liability 	for 	the 	debt 	had 	been 	discharged 	in
bankruptcy. It further states that in the event of a default,
“the 	sole 	recourse 	of 	the 	McMurdies 	is 	a 	non-judicial
foreclosure 	against 	the 	Secured 	Property.” 	The 	2011
Modification 	Agreement 	states 	that 	it 	is 	for 	the 	express
“purpose of modifying, extending and changing the terms of the
2004 	Notes 	and 	memorializing 	the 	terms 	by 	which 	the
[2001 	trust 	deeds] 	will 	be 	released” 	and 	includes 	an
“Extension of the Maturity Date” of the 2004 Notes to March 24,
2013. Because only the 2001 Note was expressly secured by a
trust 	deed, 	the 	acknowledgement 	that 	the 	McMurdies’
investment remains secured by the Alpine Property is strong
evidence 	that 	the 	2011 	Modification 	Agreement 	and 	the
intervening notes were intended as extensions of the original
secured debt.
¶26 	In 	addition, 	the 	2011 	Modification 	Agreement 	was
signed 	two 	days 	before 	the 	six-year 	statute 	of 	limitations
period would have expired based on the prior maturity date.
The final page, titled “Contract Extension Agreement,” lists the
start date of the original contract as “24 September 2001”and
expressly states, “The intent of this contract is to continue with
an extension from the last two contracts that were dated 24
March 2004 and were to mature on 24 March 2005.” Based on
this plain language and the surrounding circumstances, a fact-
finder 	could 	reasonably 	conclude 	that 	the 	prior 	written
instruments—the 2003 Note and the 2004 Notes—were intended
as an extension of the original 2001 Note and that the 2011

Jeppesen v. Bank of Utah
20170062-CA 	12 	2018 UT App 234
Extension 	Agreement6 	was 	intended 	to 	“continue” 	that
extension before the statute of limitations elapsed.
¶27 	There are material issues of fact precluding summary
judgment in this case. If the parties intended the subsequent
agreements to extend—rather than supersede—the 2001 Note
secured by the trust deeds, the statute of limitations would have
been triggered when Zane failed to pay the debt by the extended
maturity 	date 	of 	March 	24, 	2013, 	in 	which 	case 	the 	2015
foreclosure action would be timely. Because the parties’ intent is
a disputed and material question of fact, the application of the
statute of limitations cannot be resolved on summary judgment.
Accordingly, we vacate the district court’s order and remand for
trial or such other proceedings that may now be appropriate.
II. Issues of Fact Regarding Equitable Estoppel
¶28 	The McMurdies separately contend that the district court
erred in granting summary judgment because a question of fact
remains concerning whether Jeppesen is estopped from asserting
the statute of limitations. Specifically, the McMurdies argue that
genuine 	issues 	of 	material 	fact 	exist 	as 	to 	whether 	Zane
fraudulently 	induced 	Harry 	to 	forego 	timely 	initiating 	a
foreclosure sale and whether that conduct can be imputed to
Jeppesen.
6. It is unnecessary to consider the effect of the 2013 Extension
Agreements because the foreclosure sale occurred within six
years 	of 	the 	maturity 	date 	set 	in 	the 	2011 	Modification
Agreement. But the 2013 Extension Agreements, which also
listed the original contract date as “24 September 2001,” as well
as Zane’s testimony that the purpose of that agreement was “[t]o
keep Harry McMurdie from foreclosing for three more months,”
may provide additional evidence of the parties’ intent to extend
the original obligation.

Jeppesen v. Bank of Utah
20170062-CA 	13 	2018 UT App 234
¶29 	The McMurdies framed this issue below as an application
of the “equitable discovery rule,” and the court addressed it in
those terms. On appeal, however, the McMurdies’ argument is
based on the “equitable estoppel doctrine.” The McMurdies
maintain 	that 	they 	adequately 	preserved 	this 	argument 	by
providing 	the 	district 	court 	“with 	legal 	authority 	for 	the
equitable estoppel argument they make here.” Jeppesen does not
dispute this assertion, and instead concedes that “the equitable
estoppel argument asserted by [the McMurdies] is a part of the
equitable discovery rule asserted by [the McMurdies] before the
district court.” While we acknowledge that the two concepts are
related and accept the parties’ agreement as to preservation, we
take this opportunity to distinguish the two doctrines.
¶30 	Under the equitable discovery rule, a statute of limitations
“may be tolled until the discovery of facts forming the basis for
the cause of action.” Russell Packard Dev., Inc. v. Carson, 2005 UT
14, ¶ 21, 108 P.3d 741 (quotation simplified). In other words, “the
equitable discovery rule may operate to toll an otherwise fixed
statute of limitations if a plaintiff does not discover the cause of
action 	due 	to 	the 	defendant’s 	concealment 	or 	misleading
conduct or due to other exceptional circumstances that would
make the application of the limitations period unjust.” Young
Res. Ltd. P’ship v. Promontory Landfill LLC, 2018 UT App 99, ¶ 27,
427 P.3d 457.
¶31 	In granting Jeppesen’s motion for summary judgment, the
district court ruled that the equitable discovery rule did not
apply. The district court acknowledged that “[t]he McMurdies
may have been persuaded not to file a claim or seek foreclosure”
due to a “string of acts, primarily on the part of Zane Jeppesen,
which convinced the McMurdies that their investment was safe
and they would receive payment.” Nevertheless, the court ruled
that the discovery rule did not apply because the McMurdies
“were fully aware that Zane Jeppesen was in default” and were
“aware that they could” file a claim. Because the McMurdies

Jeppesen v. Bank of Utah
20170062-CA 	14 	2018 UT App 234
could not make the initial showing that they “did not know and
could not reasonably have known of the existence of a cause of
action in time to file a claim within the limitation period,” the
court 	ruled 	that 	neither 	the 	concealment 	prong 	nor 	the
exceptional circumstances prong of the discovery rule tolled the
statute of limitations.
¶32 	In reaching this conclusion, the district court did not
apply the related doctrine of equitable estoppel. The doctrine
provides:
Unlike equitable tolling, which is invoked in cases
where the plaintiff is ignorant of his cause of action
because of the defendant’s fraudulent concealment,
equitable estoppel is invoked in cases where the
plaintiff knew of the existence of his cause of action
but the defendant’s conduct caused him to delay in
bringing his lawsuit.
Ellul v. Congregation of Christian Bros., 774 F.3d 791, 802 (2d Cir.
2014) (quotation simplified). Equitable estoppel prevents a party
from “lull[ing] an adversary into a false sense of security thereby
subjecting his claim to the bar of limitations, and then be heard
to 	plead 	that very delay 	as a 	defense 	to 	the 	action 	when
brought.” Rice v. Granite Sch. Dist., 456 P.2d 159, 163 (Utah 1969).
In other words, “where the delay in commencing an action is
induced by the conduct of [one party], or his privies . . . [the
delay] cannot be availed of by [that party or his privies] as a
defense.” Id.
¶33 	To 	estop 	a 	defendant 	from 	asserting 	the 	statute 	of
limitations as a defense, a plaintiff must establish three elements:
(1) a statement, admission, act, or failure to act by
one party inconsistent with a claim later asserted;
(2) reasonable action or inaction by the other party

Jeppesen v. Bank of Utah
20170062-CA 	15 	2018 UT App 234
taken on the basis of the first party’s statement,
admission, act, or failure to act; and (3) injury to
the second party that would result from allowing
the 	first 	party 	to 	contradict 	or 	repudiate 	such
statement, admission, act, or failure to act.
Travelers Ins. Co. v. Kearl, 896 P.2d 644, 647 (Utah Ct. App. 1995)
(quotation simplified). The McMurdies have presented sufficient
evidence to demonstrate material issues of fact concerning each
of 	these 	elements. 	Viewing 	the 	evidence 	in 	the 	light 	most
favorable 	to 	the 	McMurdies, 	a 	reasonable 	fact-finder 	could
conclude that Zane acted inconsistently with a later assertion of
a 	statute 	of 	limitations 	defense 	and 	that 	the 	McMurdies
reasonably relied on those actions to their detriment.
¶34 	First, based on Harry’s testimony, Zane’s testimony, and
the documents in this case, a jury could reasonably conclude that
Zane made “a statement, admission, act, or failure to act” that
was “inconsistent with a claim later asserted.” Id. (quotation
simplified). Specifically, the evidence could support a finding
that 	Jeppesen’s 	assertion 	of 	the 	statute 	of 	limitations 	is
inconsistent with Zane’s assurances to Harry that his investment
remained secured by the trust deed and that the subsequent
instruments merely extended the maturity date of the 2001 Note.
¶35 	Second, 	the 	McMurdies 	produced 	evidence 	of
“reasonable action or inaction by [Harry], taken on the basis of
[Zane’s] 	statement, 	admission, 	act, 	or 	failure 	to 	act.” 	Id.
(quotation simplified). To that end, Harry testified that he was
aware he was nearing the end of the six-year limitation period in
2011 and approached Zane about the debt before the statute of
limitations had run. A jury could find that Harry had reasonably
delayed in initiating a foreclosure sale at that time based on
Zane’s assurances. More importantly, a jury could find that it
was 	reasonable 	for 	Harry 	to 	do 	so 	in 	light 	of 	the 	2011

Jeppesen v. Bank of Utah
20170062-CA 	16 	2018 UT App 234
Modification Agreement, executed two days before the statute of
limitations would have otherwise expired.
¶36 	Third, 	a 	jury 	could 	reasonably 	conclude 	that 	the
McMurdies 	would 	be 	injured 	by 	“allowing 	[Jeppesen] 	to
contradict or repudiate such statement, admission, act, or failure
to act.” Id. (quotation simplified). If Jeppesen is allowed to assert
the statute of limitations, the foreclosure sale will be invalid and
the McMurdies will have no recourse to recoup their loss.7
Because the McMurdies have produced evidence to support each
element of equitable estoppel, genuine issues of material fact
preclude the entry of summary judgment.
¶37 	The remaining question is whether Zane’s conduct can
estop Jeppesen from asserting the statute of limitations as a
defense.8 Under the equitable estoppel doctrine, “[i]f the actions
of 	a 	defendant, 	its 	agents, 	or 	its 	privies 	induced 	delay 	in
commencing an action, the court will not allow any of them to
assert such delay as a defense.” Dansie v. Anderson Lumber Co.,
878 P.2d 1155, 1160 (Utah Ct. App. 1994); see also 51 Am. Jur. 2d
Limitation of Actions § 367 (“The doctrine of equitable estoppel
7. Zane’s underlying debt to the McMurdies was discharged in
bankruptcy. As a result, the McMurdies’ only recourse was
foreclosure on the Alpine Property. See Johnson v. Home State
Bank, 501 U.S. 78, 82–83 (1991) (explaining that a bankruptcy
discharge does not affect a secured creditor’s right to foreclose
on a lien, but does extinguish the right to sue the debtor
personally for any deficiency).
8. Jeppesen claims that the McMurdies did not preserve the
argument that Zane’s conduct can be imputed to Jeppesen. We
disagree. In the district court, the McMurdies moved the court to
treat Jeppesen as Zane’s agent, citing the same evidence upon
which they rely on appeal.

Jeppesen v. Bank of Utah
20170062-CA 	17 	2018 UT App 234
may 	deprive 	a 	defendant 	of 	the 	defense 	of 	the 	statute 	of
limitations if the plaintiff is induced to delay timely action by the
promises of the defendant or the defendant’s agent to settle, pay,
perform 	or 	otherwise 	carry 	out 	the 	obligation 	or 	duty 	in
question.”).
¶38 	In this context, privity means more than “a mutual or
successive relationship to the same right or property.” Glen Allen
Mining Co. v. Park Galena Mining Co., 296 P. 231, 233 (Utah 1931),
rejected on other grounds by Rawcliffe v. Anciaux, 2017 UT 72, ¶ 16,
416 P.3d 362. For example, we have held that equitable estoppel
may not be asserted against an innocent successor in title, where
there is no allegation that the successor was involved in the
fraudulent conduct or wrongdoing. See Christensen v. American
Heritage Title Agency, Inc., 2016 UT App 36, ¶ 30, 368 P.3d 125.
Instead, to assert equitable estoppel, the McMurdies must point
to facts other than mere succession of title “sufficient to show a
connection 	between 	[Jeppesen] 	and 	the 	dilatory 	tactics 	of
[Zane].” See Dansie, 878 P.2d at 1160.
¶39 	Here, the McMurdies have produced sufficient evidence
from which a reasonable jury could conclude that Zane and
Jeppesen “maintained [the] type of relationship or engaged in [a]
course of conduct such that it would be proper to impute”
Zane’s 	actions 	to 	Jeppesen. 	Id. 	In 	his 	deposition, 	Jeppesen
testified 	that 	he 	knew 	criminal 	charges 	and 	administrative
proceedings 	had 	been 	brought 	against 	his 	father, 	Zane 	for
obtaining “a lot of money” by selling promissory notes to
investors 	on 	behalf 	of 	the 	Beverly 	Hills 	project. 	He 	also
understood that the McMurdies had given his father $500,000 in
exchange for a promissory note secured by the Alpine Property.
¶40 	While Jeppesen was serving an ecclesiastical mission in
2010, Zane asked him if it was okay to put the Alpine Property in
his 	name. 	Zane 	transferred 	the 	property 	to 	his 	son 	via 	a
quitclaim deed for no consideration. Jeppesen has never seen the

Jeppesen v. Bank of Utah
20170062-CA 	18 	2018 UT App 234
Alpine Property, does not know where it is located, and knows
nothing about it other than “[i]t’s 5 acres up on a hill.” When
asked why he was suing the McMurdies, Jeppesen responded,
“For my dad’s sake. He claims it’s his property. . . .” He testified
that it was Zane who asked him to file the lawsuit, and that he
was not personally involved in making the arrangements.
¶41 	When 	viewed 	in 	the 	light 	most 	favorable 	to 	the
McMurdies 	as 	the 	nonmoving 	parties, 	this 	evidence 	was
sufficient to create a genuine issue of material fact as to whether
Zane’s delaying tactics should be imputed to Jeppesen. The
disputed issues of fact on the question of equitable estoppel
precluded the entry of summary judgment.
CONCLUSION
¶42 	Because there were genuine issues of material fact as to
whether (1) the 2001 Note was extended or superseded, and
(2) Jeppesen 	was 	estopped 	from 	asserting 	the 	statute 	of
limitations, 	the 	district 	court 	erred 	in 	granting 	summary
judgment. We therefore reverse the district court’s summary
judgment order and remand the case to the district court for
further proceedings consistent with this opinion.