| 7 | 13 | | 6 |
|---|
| 8 | 14 | | 7LONG TITLE |
|---|
| 9 | 15 | | 8General Description: |
|---|
| 10 | 16 | | 9 This bill amends provisions related to courts. |
|---|
| 11 | 17 | | 10Highlighted Provisions: |
|---|
| 12 | 18 | | 11 This bill: |
|---|
| 13 | 19 | | 12 <amends provisions related to civil actions in the district court in the following titles: |
|---|
| 14 | 20 | | 13 CTitle 3, Uniform Agricultural Cooperative Association Act; |
|---|
| 15 | 21 | | 14 CTitle 7, Financial Institutions Act; |
|---|
| 16 | 22 | | 15 CTitle 16, Corporations; |
|---|
| 17 | 23 | | 16 CTitle 31A, Insurance Code; |
|---|
| 18 | 24 | | 17 CTitle 35A, Utah Workforce Services Code; |
|---|
| 19 | 25 | | 18 CTitle 48, Unincorporated Business Entity Act; |
|---|
| 20 | 26 | | 19 CTitle 57, Real Estate; |
|---|
| 21 | 27 | | 20 CTitle 61, Securities Division - Real Estate Division; |
|---|
| 22 | 28 | | 21 CTitle 70, Trademarks and Trade Names; |
|---|
| 23 | 29 | | 22 CTitle 70A, Uniform Commercial Code; and |
|---|
| 24 | 30 | | 23 CTitle 78B, Judicial Code; |
|---|
| 25 | 31 | | 24 <enacts a venue provision for the Commissioner of Financial Institutions; |
|---|
| 26 | 32 | | 25 <enacts a venue provision for the Commissioner of the Insurance Department; |
|---|
| 32 | 38 | | 29 <addresses the transfer of venue for a civil action; |
|---|
| 33 | 39 | | 30 <clarifies the residence of a business organization for purposes of venue; |
|---|
| 34 | 40 | | 31 <amends venue provisions for various types of civil actions; |
|---|
| 35 | 41 | | 32 <amends provisions related to judgments entered by the district court or justice court; |
|---|
| 36 | 42 | | 33 <amends provisions related to a mileage allowance for a judgment debtor; |
|---|
| 37 | 43 | | 34 <amends provisions related to contempt by a nonjudicial officer; |
|---|
| 38 | 44 | | 35 <amends provisions related to the filing of a notice of lis pendens; |
|---|
| 39 | 45 | | 36 <repeals statutes related to court venue, jurisdiction, and procedure; |
|---|
| 40 | 46 | | 37 <repeals statutes related to a change of venue; and |
|---|
| 41 | 47 | | 38 <makes technical and conforming changes. |
|---|
| 42 | 48 | | 39Money Appropriated in this Bill: |
|---|
| 43 | 49 | | 40 None |
|---|
| 44 | 50 | | 41Other Special Clauses: |
|---|
| 45 | 51 | | 42 This bill provides a special effective date. |
|---|
| 46 | 52 | | 43 This bill provides a coordination clause. |
|---|
| 47 | 53 | | 44 This bill provides revisor instructions. |
|---|
| 48 | 54 | | 45Utah Code Sections Affected: |
|---|
| 49 | 55 | | 46AMENDS: |
|---|
| 50 | 56 | | 47 3-1-20, as last amended by Laws of Utah 1994, Chapter 202 |
|---|
| 51 | 57 | | 48 3-1-20.1, as enacted by Laws of Utah 2003, Chapter 70 |
|---|
| 52 | 58 | | 49 7-1-703, as last amended by Laws of Utah 2017, Chapter 169 |
|---|
| 53 | 59 | | 50 7-2-2, as last amended by Laws of Utah 2014, Chapter 189 |
|---|
| 54 | 60 | | 51 7-2-5, as last amended by Laws of Utah 1983, Chapter 8 |
|---|
| 55 | 61 | | 52 7-2-6, as last amended by Laws of Utah 2015, Chapter 258 |
|---|
| 56 | 62 | | 53 7-2-9, as last amended by Laws of Utah 2010, Chapter 378 |
|---|
| 57 | 63 | | 54 7-2-10, as last amended by Laws of Utah 2010, Chapter 378 |
|---|
| 61 | 67 | | 57 16-6a-117, as enacted by Laws of Utah 2000, Chapter 300 |
|---|
| 62 | 68 | | 58 16-6a-703, as last amended by Laws of Utah 2008, Chapter 364 |
|---|
| 63 | 69 | | 59 16-6a-710, as last amended by Laws of Utah 2008, Chapter 364 |
|---|
| 64 | 70 | | 60 16-6a-809, as last amended by Laws of Utah 2001, Chapters 9, 127 |
|---|
| 65 | 71 | | 61 16-6a-1405, as last amended by Laws of Utah 2015, Chapter 240 |
|---|
| 66 | 72 | | 62 16-6a-1414, as enacted by Laws of Utah 2000, Chapter 300 |
|---|
| 67 | 73 | | 63 16-6a-1416, as enacted by Laws of Utah 2000, Chapter 300 |
|---|
| 68 | 74 | | 64 16-6a-1417, as enacted by Laws of Utah 2000, Chapter 300 |
|---|
| 69 | 75 | | 65 16-6a-1604, as last amended by Laws of Utah 2008, Chapter 364 |
|---|
| 70 | 76 | | 66 16-6a-1609, as last amended by Laws of Utah 2002, Chapter 197 |
|---|
| 71 | 77 | | 67 16-10a-126, as enacted by Laws of Utah 1992, Chapter 277 |
|---|
| 72 | 78 | | 68 16-10a-303, as enacted by Laws of Utah 1992, Chapter 277 |
|---|
| 73 | 79 | | 69 16-10a-703, as last amended by Laws of Utah 2008, Chapter 364 |
|---|
| 74 | 80 | | 70 16-10a-720, as last amended by Laws of Utah 2010, Chapter 378 |
|---|
| 75 | 81 | | 71 16-10a-1330, as last amended by Laws of Utah 2010, Chapter 378 |
|---|
| 76 | 82 | | 72 16-10a-1430, as enacted by Laws of Utah 1992, Chapter 277 |
|---|
| 77 | 83 | | 73 16-10a-1434, as last amended by Laws of Utah 2010, Chapter 378 |
|---|
| 78 | 84 | | 74 16-10a-1532, as last amended by Laws of Utah 2000, Chapter 131 |
|---|
| 79 | 85 | | 75 16-10a-1604, as last amended by Laws of Utah 2008, Chapter 364 |
|---|
| 80 | 86 | | 76 16-11-13, as last amended by Laws of Utah 2000, Chapter 261 |
|---|
| 81 | 87 | | 77 16-16-202, as enacted by Laws of Utah 2008, Chapter 363 |
|---|
| 82 | 88 | | 78 16-16-1203, as enacted by Laws of Utah 2008, Chapter 363 |
|---|
| 83 | 89 | | 79 16-16-1206, as enacted by Laws of Utah 2008, Chapter 363 |
|---|
| 84 | 90 | | 80 16-16-1210, as enacted by Laws of Utah 2008, Chapter 363 |
|---|
| 85 | 91 | | 81 24-1-103, as last amended by Laws of Utah 2021, Chapter 230 |
|---|
| 94 | 99 | | 88 31A-16-111, as last amended by Laws of Utah 2000, Chapter 114 |
|---|
| 95 | 100 | | 89 31A-16-112, as enacted by Laws of Utah 2015, Chapter 244 |
|---|
| 96 | 101 | | 90 31A-16-117, as enacted by Laws of Utah 2015, Chapter 244 |
|---|
| 97 | 102 | | 91 31A-17-610, as last amended by Laws of Utah 2007, Chapter 309 |
|---|
| 98 | 103 | | 92 31A-27a-105, as last amended by Laws of Utah 2020, Chapter 32 |
|---|
| 99 | 104 | | 93 31A-27a-201, as last amended by Laws of Utah 2014, Chapters 290, 300 |
|---|
| 100 | 105 | | 94 31A-27a-206, as enacted by Laws of Utah 2007, Chapter 309 |
|---|
| 101 | 106 | | 95 31A-27a-207, as enacted by Laws of Utah 2007, Chapter 309 |
|---|
| 102 | 107 | | 96 31A-27a-209, as enacted by Laws of Utah 2007, Chapter 309 |
|---|
| 103 | 108 | | 97 31A-44-501, as enacted by Laws of Utah 2016, Chapter 270 |
|---|
| 104 | 109 | | 98 35A-4-308, as renumbered and amended by Laws of Utah 1996, Chapter 240 |
|---|
| 105 | 110 | | 99 35A-4-314, as enacted by Laws of Utah 2013, Chapter 473 |
|---|
| 106 | 111 | | 100 48-1d-111, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 107 | 112 | | 101 48-1d-116, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 108 | 113 | | 102 48-1d-901, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 109 | 114 | | 103 48-1d-902, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 110 | 115 | | 104 48-1d-903, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 111 | 116 | | 105 48-1d-909, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 112 | 117 | | 106 48-1d-1003, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 113 | 118 | | 107 48-1d-1310, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 114 | 119 | | 108 48-2e-204, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 117 | 121 | | 110 48-2e-801, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 118 | 122 | | 111 48-2e-802, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 119 | 123 | | 112 48-2e-803, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 120 | 124 | | 113 48-2e-808, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 121 | 125 | | 114 48-2e-1103, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 122 | 126 | | 115 48-3a-204, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 123 | 127 | | 116 48-3a-209, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 124 | 128 | | 117 48-3a-701, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 126 | 131 | | 119 48-3a-703, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 127 | 132 | | 120 48-3a-704, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 128 | 133 | | 121 48-3a-707, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 129 | 134 | | 122 48-3a-1003, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 130 | 135 | | 123 48-3a-1111, as enacted by Laws of Utah 2013, Chapter 412 |
|---|
| 131 | 136 | | 124 57-8-44, as last amended by Laws of Utah 2014, Chapter 116 |
|---|
| 132 | 137 | | 125 57-8a-301, as last amended by Laws of Utah 2014, Chapter 116 |
|---|
| 133 | 138 | | 126 57-17-5, as last amended by Laws of Utah 2015, Chapter 258 |
|---|
| 134 | 139 | | 127 57-19-20, as last amended by Laws of Utah 2008, Chapter 382 |
|---|
| 135 | 140 | | 128 57-21-11, as last amended by Laws of Utah 1997, Chapter 375 |
|---|
| 136 | 141 | | 129 57-22-6, as last amended by Laws of Utah 2017, Chapter 203 |
|---|
| 137 | 142 | | 130 57-23-7, as enacted by Laws of Utah 1992, Chapter 169 |
|---|
| 138 | 143 | | 131 57-23-8, as last amended by Laws of Utah 2008, Chapter 382 |
|---|
| 139 | 144 | | 132 57-29-303, as enacted by Laws of Utah 2016, Chapter 381 |
|---|
| 140 | 145 | | 133 57-29-304, as enacted by Laws of Utah 2016, Chapter 381 |
|---|
| 141 | 146 | | 134 61-1-20, as last amended by Laws of Utah 2016, Chapter 401 |
|---|
| 142 | 147 | | 135 61-1-105, as enacted by Laws of Utah 2011, Chapter 318 |
|---|
| 146 | 149 | | 137 61-2c-403, as last amended by Laws of Utah 2009, Chapter 372 |
|---|
| 147 | 150 | | 138 61-2f-403, as last amended by Laws of Utah 2017, Chapter 182 |
|---|
| 148 | 151 | | 139 61-2f-407, as last amended by Laws of Utah 2018, Chapter 213 |
|---|
| 149 | 152 | | 140 61-2g-501, as last amended by Laws of Utah 2018, Chapter 213 |
|---|
| 150 | 153 | | 141 70-3a-309, as enacted by Laws of Utah 2010, Chapter 200 |
|---|
| 151 | 154 | | 142 70-3a-402, as last amended by Laws of Utah 2010, Chapter 200 |
|---|
| 152 | 155 | | 143 70-3a-405, as enacted by Laws of Utah 2002, Chapter 318 |
|---|
| 153 | 156 | | 144 70A-8-409.1, as last amended by Laws of Utah 2012, Chapter 386 |
|---|
| 154 | 157 | | 145 70A-9a-513.5, as enacted by Laws of Utah 2015, Chapter 228 |
|---|
| 155 | 158 | | 146 78A-6-350, as renumbered and amended by Laws of Utah 2021, Chapter 261 |
|---|
| 156 | 159 | | 147 78B-1-132, as renumbered and amended by Laws of Utah 2008, Chapter 3 |
|---|
| 157 | 160 | | 148 78B-5-201, as last amended by Laws of Utah 2014, Chapters 114, 151 |
|---|
| 159 | 163 | | 150 78B-5-206, as renumbered and amended by Laws of Utah 2008, Chapter 3 |
|---|
| 160 | 164 | | 151 78B-6-110, as last amended by Laws of Utah 2019, Chapter 491 |
|---|
| 161 | 165 | | 152 78B-6-313, as enacted by Laws of Utah 2008, Chapter 3 |
|---|
| 162 | 166 | | 153 78B-6-1303, as last amended by Laws of Utah 2016, Chapter 306 |
|---|
| 163 | 167 | | 154 78B-6-1904, as last amended by Laws of Utah 2016, Chapter 222 |
|---|
| 164 | 168 | | 155 78B-6-1905, as enacted by Laws of Utah 2014, Chapter 310 |
|---|
| 165 | 169 | | 156 78B-21-102, as enacted by Laws of Utah 2017, Chapter 431 |
|---|
| 166 | 170 | | 157ENACTS: |
|---|
| 167 | 171 | | 158 7-1-106, Utah Code Annotated 1953 |
|---|
| 168 | 172 | | 159 31A-1-401, Utah Code Annotated 1953 |
|---|
| 169 | 173 | | 160 78B-3a-101, Utah Code Annotated 1953 |
|---|
| 170 | 174 | | 161 78B-3a-102, Utah Code Annotated 1953 |
|---|
| 171 | 175 | | 162 78B-3a-103, Utah Code Annotated 1953 |
|---|
| 174 | 177 | | 164 78B-3a-206, Utah Code Annotated 1953 |
|---|
| 175 | 178 | | 165RENUMBERS AND AMENDS: |
|---|
| 176 | 179 | | 166 78B-3a-201, (Renumbered from 78B-3-307, as renumbered and amended by Laws of |
|---|
| 177 | 180 | | 167Utah 2008, Chapter 3) |
|---|
| 178 | 181 | | 168 78B-3a-202, (Renumbered from 78B-3-301, as renumbered and amended by Laws of |
|---|
| 179 | 182 | | 169Utah 2008, Chapter 3) |
|---|
| 180 | 183 | | 170 78B-3a-203, (Renumbered from 78B-3-302, as renumbered and amended by Laws of |
|---|
| 181 | 184 | | 171Utah 2008, Chapter 3) |
|---|
| 182 | 185 | | 172 78B-3a-204, (Renumbered from 78B-3-303, as renumbered and amended by Laws of |
|---|
| 183 | 186 | | 173Utah 2008, Chapter 3) |
|---|
| 184 | 187 | | 174 78B-3a-205, (Renumbered from 78B-3-304, as renumbered and amended by Laws of |
|---|
| 185 | 188 | | 175Utah 2008, Chapter 3) |
|---|
| 186 | 189 | | 176REPEALS: |
|---|
| 187 | 190 | | 177 3-1-20.2, as enacted by Laws of Utah 2003, Chapter 70 |
|---|
| 188 | 191 | | 178 16-6a-1415, as last amended by Laws of Utah 2008, Chapter 364 |
|---|
| 189 | 192 | | 179 16-10a-1431, as last amended by Laws of Utah 2008, Chapter 364 |
|---|
| 191 | 195 | | 181 78B-3-305, as renumbered and amended by Laws of Utah 2008, Chapter 3 |
|---|
| 192 | 196 | | 182 78B-3-306, as renumbered and amended by Laws of Utah 2008, Chapter 3 |
|---|
| 193 | 197 | | 183 78B-3-308, as renumbered and amended by Laws of Utah 2008, Chapter 3 |
|---|
| 194 | 198 | | 184 78B-3-309, as renumbered and amended by Laws of Utah 2008, Chapter 3 |
|---|
| 195 | 199 | | 185 78B-3-310, as renumbered and amended by Laws of Utah 2008, Chapter 3 |
|---|
| 196 | 200 | | 186 78B-3-311, as renumbered and amended by Laws of Utah 2008, Chapter 3 |
|---|
| 197 | 201 | | 187Utah Code Sections Affected by Coordination Clause: |
|---|
| 198 | 202 | | 188 31A-5-414, as enacted by Laws of Utah 1985, Chapter 242 |
|---|
| 199 | 203 | | 189 31A-5-415, as last amended by Laws of Utah 2000, Chapter 300 |
|---|
| 203 | 205 | | 191 |
|---|
| 204 | 206 | | 192Be it enacted by the Legislature of the state of Utah: |
|---|
| 205 | 207 | | 193 Section 1. Section 3-1-20 is amended to read: |
|---|
| 206 | 208 | | 194 3-1-20. Voluntary dissolution -- Distribution of assets -- Proceedings. |
|---|
| 207 | 209 | | 195 (1) (a) An association may be dissolved: |
|---|
| 208 | 210 | | 196 (i) at a regular meeting, or a special meeting called for that purpose; |
|---|
| 209 | 211 | | 197 (ii) after 30 days advance notice of the time, place, and object of the meeting is served |
|---|
| 210 | 212 | | 198on the members of the association as prescribed in the bylaws; and |
|---|
| 211 | 213 | | 199 (iii) by a two-thirds vote of the members voting. |
|---|
| 212 | 214 | | 200 (b) (i) The members shall elect a committee of three members to act as trustees on |
|---|
| 213 | 215 | | 201behalf of the association, and the trustees shall liquidate and distribute the association's assets |
|---|
| 214 | 216 | | 202within the time fixed by the members. |
|---|
| 215 | 217 | | 203 (ii) The trustees may bring and defend actions necessary to protect and enforce the |
|---|
| 216 | 218 | | 204rights of the association. |
|---|
| 217 | 219 | | 205 (iii) Any vacancies in the trusteeship may be filled by the remaining trustees. |
|---|
| 218 | 220 | | 206 (2) (a) If an association dissolves pursuant to this section, the trustees, a creditor, a |
|---|
| 219 | 221 | | 207member, or the attorney general may bring an action [in the district court in the county where |
|---|
| 220 | 222 | | 208the principal place of business of the association is located] in a court with jurisdiction under |
|---|
| 221 | 223 | | 209Title 78A, Judiciary and Judicial Administration. |
|---|
| 222 | 224 | | 210 (b) [The] If an action is brought against an association under Subsection (2)(a), the |
|---|
| 231 | 233 | | 218 (iii) the administration of trusts or the disposition of the property held in trust by or for |
|---|
| 232 | 234 | | 219the association; |
|---|
| 233 | 235 | | 220 (iv) the sale and disposition of any remaining property of the association and the |
|---|
| 234 | 236 | | 221distribution or division of the property or its proceeds among the members or persons entitled |
|---|
| 235 | 237 | | 222to them; and |
|---|
| 236 | 238 | | 223 (v) other matters related to the dissolution. |
|---|
| 237 | 239 | | 224 (c) All orders and judgments [shall be] are binding upon the association, [its] the |
|---|
| 238 | 240 | | 225association's property and assets, trustees, members, creditors, and all claimants against [it] the |
|---|
| 239 | 241 | | 226association. |
|---|
| 240 | 242 | | 227 (3) On dissolution, the assets of the association [shall be] are distributed in the |
|---|
| 241 | 243 | | 228following manner and order: |
|---|
| 242 | 244 | | 229 (a) to pay the association's debts and expenses; |
|---|
| 243 | 245 | | 230 (b) to return to any investors the par value of their capital; |
|---|
| 244 | 246 | | 231 (c) to pay patrons on a pro rata basis the amount of any patronage capital credited to |
|---|
| 245 | 247 | | 232their accounts; and |
|---|
| 246 | 248 | | 233 (d) if there is a surplus, to distribute [it] the surplus among those patrons who have |
|---|
| 247 | 249 | | 234been members of the association at any time during the last five years preceding dissolution or |
|---|
| 248 | 250 | | 235for a longer period of time if determined by the board of directors to be practicable, on the |
|---|
| 249 | 251 | | 236basis of patronage during that period. |
|---|
| 250 | 252 | | 237 (4) After the final settlement by the trustees, the association [shall be] is considered |
|---|
| 251 | 253 | | 238dissolved and shall cease to exist. |
|---|
| 252 | 254 | | 239 (5) The trustees shall make a report in duplicate of the proceedings held under this |
|---|
| 253 | 255 | | 240section, which shall be signed, acknowledged, and filed as required for the filing of the articles |
|---|
| 254 | 256 | | 241of incorporation. |
|---|
| 260 | 261 | | 245 (1) [An association may be dissolved in a proceeding by the attorney general] The |
|---|
| 261 | 262 | | 246attorney general may bring an action in a court with jurisdiction under Title 78A, Judiciary and |
|---|
| 262 | 263 | | 247Judicial Administration, to dissolve an association if it is established that the association: |
|---|
| 263 | 264 | | 248 (a) obtained its articles of incorporation through fraud; or |
|---|
| 264 | 265 | | 249 (b) has continued to exceed or abuse the authority conferred upon [it] the association |
|---|
| 265 | 266 | | 250by law. |
|---|
| 266 | 267 | | 251 (2) [An association may be dissolved in a proceeding brought by a shareholder] A |
|---|
| 267 | 268 | | 252shareholder may bring an action in a court with jurisdiction under Title 78A, Judiciary and |
|---|
| 268 | 269 | | 253Judicial Administration, to dissolve an association if it is established that: |
|---|
| 269 | 270 | | 254 (a) the directors are deadlocked in the management of the association affairs, the |
|---|
| 270 | 271 | | 255members are unable to break the deadlock, irreparable injury to the association is threatened or |
|---|
| 271 | 272 | | 256being suffered, or the business and affairs of the association can no longer be conducted to the |
|---|
| 272 | 273 | | 257advantage of the members generally, because of the deadlock; |
|---|
| 273 | 274 | | 258 (b) the directors, or those in control of the association, have acted, are acting, or will |
|---|
| 274 | 275 | | 259act in a manner that is illegal, oppressive, or fraudulent; |
|---|
| 275 | 276 | | 260 (c) the members are deadlocked in voting power and have failed, for a period that |
|---|
| 276 | 277 | | 261includes at least two consecutive annual meeting dates, to elect successors to directors whose |
|---|
| 277 | 278 | | 262terms have expired or would have expired on the election of their successors; or |
|---|
| 278 | 279 | | 263 (d) the association's assets are being misapplied or wasted. |
|---|
| 279 | 280 | | 264 (3) [An association may be dissolved in a proceeding by a creditor] A creditor may |
|---|
| 280 | 281 | | 265bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 281 | 282 | | 266Administration, to dissolve an association if it is established that: |
|---|
| 282 | 283 | | 267 (a) the creditor's claim has been reduced to a judgment, the execution on the judgment |
|---|
| 283 | 284 | | 268has been returned unsatisfied, and the association is insolvent; or |
|---|
| 284 | 285 | | 269 (b) the association is insolvent and the association has admitted in writing that the |
|---|
| 285 | 286 | | 270creditor's claim is due and owing. |
|---|
| 290 | 291 | | 274supervision. |
|---|
| 291 | 292 | | 275 (5) If an action is brought under this section, it is not necessary to make members |
|---|
| 292 | 293 | | 276parties to the action to dissolve the association unless relief is sought against the members |
|---|
| 293 | 294 | | 277individually. |
|---|
| 294 | 295 | | 278 (6) In an action to dissolve an association, a court may: |
|---|
| 295 | 296 | | 279 (a) issue injunctions; |
|---|
| 296 | 297 | | 280 (b) appoint a receiver or a custodian pendente lite with all powers and duties the court |
|---|
| 297 | 298 | | 281directs; or |
|---|
| 298 | 299 | | 282 (c) take other action required to preserve the association's assets wherever located and |
|---|
| 299 | 300 | | 283carry on the business of the association until a full hearing can be held. |
|---|
| 300 | 301 | | 284 Section 3. Section 7-1-106 is enacted to read: |
|---|
| 301 | 302 | | 285 7-1-106. Venue for action or petition brought by commissioner. |
|---|
| 302 | 303 | | 286 If the commissioner brings an action in the district court under this title, the |
|---|
| 303 | 304 | | 287commissioner shall bring the action: |
|---|
| 304 | 305 | | 288 (1) in accordance with Title 78B, Chapter 3a, Venue for Civil Actions; or |
|---|
| 305 | 306 | | 289 (2) in the county where the office of the commissioner is located. |
|---|
| 306 | 307 | | 290 Section 4. Section 7-1-703 is amended to read: |
|---|
| 307 | 308 | | 291 7-1-703. Restrictions on acquisition of institutions and holding companies -- |
|---|
| 308 | 309 | | 292Enforcement. |
|---|
| 309 | 310 | | 293 (1) Unless the commissioner gives prior written approval under Section 7-1-705, a |
|---|
| 310 | 311 | | 294person may not: |
|---|
| 311 | 312 | | 295 (a) acquire, directly or indirectly, control of a depository institution or depository |
|---|
| 312 | 313 | | 296institution holding company subject to the jurisdiction of the department; |
|---|
| 313 | 314 | | 297 (b) vote the stock of a depository institution or depository institution holding company |
|---|
| 323 | 323 | | 305 (f) take any action that causes a person other than an individual to become a depository |
|---|
| 324 | 324 | | 306institution holding company subject to the jurisdiction of the department; |
|---|
| 325 | 325 | | 307 (g) acquire, directly or indirectly, the voting or nonvoting securities of a depository |
|---|
| 326 | 326 | | 308institution or a depository institution holding company subject to the jurisdiction of the |
|---|
| 327 | 327 | | 309department if the acquisition would result in the person obtaining more than 20% of the |
|---|
| 328 | 328 | | 310authorized voting securities of the institution if the nonvoting securities were converted into |
|---|
| 329 | 329 | | 311voting securities; or |
|---|
| 330 | 330 | | 312 (h) merge or consolidate with a depository institution or depository institution holding |
|---|
| 331 | 331 | | 313company subject to the jurisdiction of the department. |
|---|
| 332 | 332 | | 314 (2) (a) A person who willfully violates this section or a rule or order issued by the |
|---|
| 333 | 333 | | 315department under this section is subject to a civil penalty of not more than $1,000 per day |
|---|
| 334 | 334 | | 316during which the violation continues. |
|---|
| 335 | 335 | | 317 (b) The commissioner may assess the civil penalty after giving notice and opportunity |
|---|
| 336 | 336 | | 318for hearing. |
|---|
| 337 | 337 | | 319 (c) The commissioner shall collect the civil penalty by bringing an action [in the |
|---|
| 338 | 338 | | 320district court of the county in which the office of the commissioner is located.] in a court with |
|---|
| 339 | 339 | | 321jurisdiction under Title 78A, Judiciary and Judicial Administration. |
|---|
| 340 | 340 | | 322 (d) An applicant for approval of an acquisition is considered to have consented to the |
|---|
| 341 | 341 | | 323jurisdiction and venue of the court by filing an application for approval. |
|---|
| 342 | 342 | | 324 (3) The commissioner may secure injunctive relief to prevent a change in control or |
|---|
| 345 | 344 | | 326 (4) The commissioner may lengthen or shorten any time period specified in Section |
|---|
| 346 | 345 | | 3277-1-705 if the commissioner finds it necessary to protect the public interest. |
|---|
| 347 | 346 | | 328 (5) The commissioner may exempt a class of financial institutions from this section by |
|---|
| 348 | 347 | | 329rule if the commissioner finds the exception to be in the public interest. |
|---|
| 349 | 348 | | 330 (6) The prior approval of the commissioner under Section 7-1-705 is not required for |
|---|
| 350 | 349 | | 331the acquisition by a person other than an individual of voting securities or assets of a depository |
|---|
| 351 | 350 | | 332institution or a depository institution holding company that are acquired by foreclosure or |
|---|
| 352 | 351 | | 333otherwise in the ordinary course of collecting a debt previously contracted in good faith if these |
|---|
| 353 | 352 | | 334voting securities or assets are divested within two years of acquisition. The commissioner may, |
|---|
| 355 | 355 | | 336periods if, in the commissioner's judgment, the extension would not be detrimental to the |
|---|
| 356 | 356 | | 337public interest. The commissioner may adopt rules to implement the intent of this Subsection |
|---|
| 357 | 357 | | 338(6). |
|---|
| 358 | 358 | | 339 (7) (a) An out-of-state depository institution without a branch in Utah, or an |
|---|
| 359 | 359 | | 340out-of-state depository institution holding company without a depository institution in Utah, |
|---|
| 360 | 360 | | 341may acquire: |
|---|
| 361 | 361 | | 342 (i) a Utah depository institution only if it has been in existence for at least five years; or |
|---|
| 362 | 362 | | 343 (ii) a Utah branch of a depository institution only if the branch has been in existence |
|---|
| 363 | 363 | | 344for at least five years. |
|---|
| 364 | 364 | | 345 (b) For purposes of Subsection (7)(a), a depository institution chartered solely for the |
|---|
| 365 | 365 | | 346purpose of acquiring another depository institution is considered to have been in existence for |
|---|
| 366 | 366 | | 347the same period as the depository institution to be acquired, so long as it does not open for |
|---|
| 367 | 367 | | 348business at any time before the acquisition. |
|---|
| 368 | 368 | | 349 (c) The commissioner may waive the restriction in Subsection (7)(a) in the case of a |
|---|
| 369 | 369 | | 350depository institution that is subject to, or is in danger of becoming subject to, supervisory |
|---|
| 370 | 370 | | 351action under Chapter 2, Possession of Depository Institution by Commissioner, or Chapter 19, |
|---|
| 374 | 372 | | 353equivalent provisions of federal law or the law of the institution's home state. |
|---|
| 375 | 373 | | 354 (d) The restriction in Subsection (7)(a) does not apply to an acquisition of, or merger |
|---|
| 376 | 374 | | 355transaction between, affiliate depository institutions. |
|---|
| 377 | 375 | | 356 Section 5. Section 7-2-2 is amended to read: |
|---|
| 378 | 376 | | 357 7-2-2. Action to review the commissioner's actions -- Supervision of actions of |
|---|
| 379 | 377 | | 358commissioner in possession -- Authority of commissioner and court. |
|---|
| 380 | 378 | | 359 [(1) The district court for the county in which the principal office of the institution or |
|---|
| 381 | 379 | | 360other person is situated has jurisdiction in the liquidation or reorganization of the institution or |
|---|
| 382 | 380 | | 361other person of which the commissioner has taken possession under this chapter or Chapter 19, |
|---|
| 383 | 381 | | 362Acquisition of Failing Depository Institutions or Holding Companies. As used in this chapter, |
|---|
| 384 | 382 | | 363"court" means the court given jurisdiction by this provision.] |
|---|
| 385 | 383 | | 364 [(2)] (1) Before taking possession of an institution or other person under [his] the |
|---|
| 386 | 384 | | 365commissioner's jurisdiction, or within a reasonable time after taking possession of an |
|---|
| 388 | 387 | | 367shall [cause to be commenced in the appropriate district court, an action to provide the court |
|---|
| 389 | 388 | | 368supervisory jurisdiction] bring an action in a court with jurisdiction under Title 78A, Judiciary |
|---|
| 390 | 389 | | 369and Judicial Administration, to provide the court with supervisory jurisdiction to review the |
|---|
| 391 | 390 | | 370actions of the commissioner. |
|---|
| 392 | 391 | | 371 [(3)] (2) (a) The actions of the commissioner are subject to review of the court. |
|---|
| 393 | 392 | | 372 (b) The court [has jurisdiction to hear all objections to the actions of the commissioner |
|---|
| 394 | 393 | | 373and] may: |
|---|
| 395 | 394 | | 374 (i) hear all objections to the actions of the commissioner; and |
|---|
| 396 | 395 | | 375 (ii) rule upon all motions and actions coming before [it] the court. |
|---|
| 397 | 396 | | 376 (c) Standing to seek review of any action of the commissioner or any receiver or |
|---|
| 398 | 397 | | 377liquidator appointed by [him] the commissioner is limited to persons whose rights, claims, or |
|---|
| 399 | 398 | | 378interests in the institution would be adversely affected by the action. |
|---|
| 402 | 400 | | 380administrative and not judicial receivership. |
|---|
| 403 | 401 | | 381 (b) The court may not overrule a determination or decision of the commissioner if it is |
|---|
| 404 | 402 | | 382not arbitrary, capricious, fraudulent, or contrary to law. |
|---|
| 405 | 403 | | 383 (c) If the court overrules an action of the commissioner, the matter shall be remanded |
|---|
| 406 | 404 | | 384to the commissioner for a new determination by [him] the commissioner, and the new |
|---|
| 407 | 405 | | 385determination shall be subject to court review. |
|---|
| 408 | 406 | | 386 Section 6. Section 7-2-5 is amended to read: |
|---|
| 409 | 407 | | 387 7-2-5. Appointment of receiver or assignment for creditors -- Notice required -- |
|---|
| 410 | 408 | | 388Commissioner taking possession. |
|---|
| 411 | 409 | | 389 [No receiver may be] |
|---|
| 412 | 410 | | 390 (1) A receiver may not be appointed by any court and [no] a deed or assignment for the |
|---|
| 413 | 411 | | 391benefit of creditors may not be filed in [any district court] a court within this state for any |
|---|
| 414 | 412 | | 392institution or other person under the jurisdiction of the commissioner, except upon notice to the |
|---|
| 415 | 413 | | 393commissioner, unless because of urgent necessity the court determines that it is necessary to do |
|---|
| 416 | 414 | | 394so to preserve the assets of the institution. |
|---|
| 417 | 415 | | 395 (2) The commissioner may, within five days after service of the notice upon [him] the |
|---|
| 418 | 416 | | 396commissioner, take possession of the institution, in which case no further proceedings shall be |
|---|
| 420 | 419 | | 398if a receiver has been appointed or the assignee has entered upon the administration of his trust, |
|---|
| 421 | 420 | | 399the appointment shall be vacated or the assignee shall be removed upon application of the |
|---|
| 422 | 421 | | 400commissioner to the court by which the receiver was appointed or in which the assignment was |
|---|
| 423 | 422 | | 401filed, and the commissioner shall proceed to administer the assets of the institution as provided |
|---|
| 424 | 423 | | 402in this chapter. |
|---|
| 425 | 424 | | 403 Section 7. Section 7-2-6 is amended to read: |
|---|
| 426 | 425 | | 404 7-2-6. Possession by commissioner -- Notice -- Presentation, allowance, and |
|---|
| 427 | 426 | | 405disallowance of claims -- Objections to claims. |
|---|
| 431 | 428 | | 407taking possession is: |
|---|
| 432 | 429 | | 408 (i) posted in each office of the institution located in this state; or |
|---|
| 433 | 430 | | 409 (ii) delivered to a controlling person or officer of the institution. |
|---|
| 434 | 431 | | 410 (b) All notices, records, and other information regarding possession of an institution by |
|---|
| 435 | 432 | | 411the commissioner may be kept confidential, and all court records and proceedings relating to |
|---|
| 436 | 433 | | 412the commissioner's possession may be sealed from public access if: |
|---|
| 437 | 434 | | 413 (i) the commissioner finds it is in the best interests of the institution and its depositors |
|---|
| 438 | 435 | | 414not to notify the public of the possession by the commissioner; |
|---|
| 439 | 436 | | 415 (ii) the deposit and withdrawal of funds and payment to creditors of the institution is |
|---|
| 440 | 437 | | 416not suspended, restricted, or interrupted; and |
|---|
| 441 | 438 | | 417 (iii) the court approves. |
|---|
| 442 | 439 | | 418 (2) (a) (i) Within 15 days after taking possession of an institution or other person under |
|---|
| 443 | 440 | | 419the jurisdiction of the department, the commissioner shall publish a notice to all persons who |
|---|
| 444 | 441 | | 420may have claims against the institution or other person to file proof of their claims with the |
|---|
| 445 | 442 | | 421commissioner before a date specified in the notice. |
|---|
| 446 | 443 | | 422 (ii) The filing date shall be at least 90 days after the date of the first publication of the |
|---|
| 447 | 444 | | 423notice. |
|---|
| 448 | 445 | | 424 (iii) The notice shall be published: |
|---|
| 449 | 446 | | 425 (A) (I) in a newspaper of general circulation in each city or county in which the |
|---|
| 450 | 447 | | 426institution or other person, or any subsidiary or service corporation of the institution, maintains |
|---|
| 451 | 448 | | 427an office; and |
|---|
| 459 | 456 | | 434litigation involving the institution pending at the date the commissioner takes possession of the |
|---|
| 460 | 457 | | 435institution, and all other potential claimants against the institution whose identity is reasonably |
|---|
| 461 | 458 | | 436ascertainable by the commissioner from examination of the books and records of the |
|---|
| 462 | 459 | | 437institution. |
|---|
| 463 | 460 | | 438 (B) No notice is required in connection with accounts or other liabilities of the |
|---|
| 464 | 461 | | 439institution that will be paid in full or be fully assumed by another depository institution or trust |
|---|
| 465 | 462 | | 440company. |
|---|
| 466 | 463 | | 441 (C) The notice shall specify a filing date for claims against the institution not less than |
|---|
| 467 | 464 | | 44260 days after the date of mailing. |
|---|
| 468 | 465 | | 443 (D) Claimants whose claims against the institution have been assumed by another |
|---|
| 469 | 466 | | 444depository institution or trust company pursuant to a merger or purchase and assumption |
|---|
| 470 | 467 | | 445agreement with the commissioner, or a federal deposit insurance agency appointed as receiver |
|---|
| 471 | 468 | | 446or liquidator of the institution, shall be notified of the assumption of their claims and the name |
|---|
| 472 | 469 | | 447and address of the assuming party within 60 days after the claim is assumed. |
|---|
| 473 | 470 | | 448 (E) Unless a purchase and assumption or merger agreement requires otherwise, the |
|---|
| 474 | 471 | | 449assuming party shall give all required notices. |
|---|
| 475 | 472 | | 450 (F) Notice shall be mailed to the address appearing in the books and records of the |
|---|
| 476 | 473 | | 451institution. |
|---|
| 477 | 474 | | 452 (ii) (A) Inadvertent or unintentional failure to mail a notice to any person entitled to |
|---|
| 478 | 475 | | 453written notice under this paragraph does not impose any liability on the commissioner or any |
|---|
| 479 | 476 | | 454receiver or liquidator appointed by [him] the commissioner beyond the amount the claimant |
|---|
| 480 | 477 | | 455would be entitled to receive if the claim had been timely filed and allowed. |
|---|
| 481 | 478 | | 456 (B) The commissioner or any receiver or liquidator appointed by [him] the |
|---|
| 482 | 479 | | 457commissioner are not liable for failure to mail notice unless the claimant establishes that [it] |
|---|
| 483 | 480 | | 458the claimant had no knowledge of the commissioner taking possession of the institution until |
|---|
| 488 | 484 | | 461 (c) Upon good cause shown, the court [having] with supervisory jurisdiction under |
|---|
| 489 | 485 | | 462Section 7-2-2 may extend the time in which the commissioner may serve any notice required |
|---|
| 490 | 486 | | 463by this chapter. |
|---|
| 491 | 487 | | 464 (d) (i) The commissioner has the sole power to adjudicate any claim against the |
|---|
| 492 | 488 | | 465institution, its property or other assets, tangible or intangible, and to settle or compromise |
|---|
| 493 | 489 | | 466claims within the priorities set forth in Section 7-2-15. |
|---|
| 494 | 490 | | 467 (ii) Any action of the commissioner is subject to judicial review as provided in |
|---|
| 495 | 491 | | 468Subsection (9). |
|---|
| 496 | 492 | | 469 (e) (i) A receiver or liquidator of the institution appointed by the commissioner has all |
|---|
| 497 | 493 | | 470the duties, powers, authority, and responsibilities of the commissioner under this section. |
|---|
| 498 | 494 | | 471 (ii) All claims against the institution shall be filed with the receiver or liquidator within |
|---|
| 499 | 495 | | 472the applicable time specified in this section and the receiver or liquidator shall adjudicate the |
|---|
| 500 | 496 | | 473claims as provided in Subsection (2)(d). |
|---|
| 501 | 497 | | 474 (f) The procedure established in this section is the sole remedy of claimants against an |
|---|
| 502 | 498 | | 475institution or its assets in the possession of the commissioner. |
|---|
| 503 | 499 | | 476 (3) With respect to a claim which appears in the books and records of an institution or |
|---|
| 504 | 500 | | 477other person in the possession of the commissioner as a secured claim, which, for purposes of |
|---|
| 505 | 501 | | 478this section is a claim that constitutes an enforceable, perfected lien, evidenced in writing, on |
|---|
| 506 | 502 | | 479the assets or other property of the institution: |
|---|
| 507 | 503 | | 480 (a) The commissioner shall allow or disallow each secured claim filed on or before the |
|---|
| 508 | 504 | | 481filing date within 30 days after receipt of the claim and shall notify each secured claimant by |
|---|
| 509 | 505 | | 482certified mail or in person of the basis for, and any conditions imposed on, the allowance or |
|---|
| 510 | 506 | | 483disallowance. |
|---|
| 511 | 507 | | 484 (b) For all allowed secured claims, the commissioner shall be bound by the terms, |
|---|
| 512 | 508 | | 485covenants, and conditions relating to the assets or other property subject to the claim, as set |
|---|
| 513 | 509 | | 486forth in the note, bond, or other security agreement which evidences the secured claim, unless |
|---|
| 519 | 515 | | 491to a secured claim before the claim has been filed and allowed or disallowed by the |
|---|
| 520 | 516 | | 492commissioner in accordance with Subsection (3)(a). |
|---|
| 521 | 517 | | 493 (4) With respect to all other claims other than secured claims: |
|---|
| 522 | 518 | | 494 (a) Each claim filed on or before the filing date shall be allowed or disallowed within |
|---|
| 523 | 519 | | 495180 days after the final publication of notice. |
|---|
| 524 | 520 | | 496 (b) If notice of disallowance is not served upon the claimant by the commissioner |
|---|
| 525 | 521 | | 497within 210 days after the date of final publication of notice, the claim is considered disallowed. |
|---|
| 526 | 522 | | 498 (c) (i) The rights of claimants and the amount of a claim shall be determined as of the |
|---|
| 527 | 523 | | 499date the commissioner took possession of the institution under this chapter. |
|---|
| 528 | 524 | | 500 (ii) Claims based on contractual obligations of the institution in existence on the date |
|---|
| 529 | 525 | | 501of possession may be allowed unless the obligation of the institution is dependent on events |
|---|
| 530 | 526 | | 502occurring after the date of possession, or the amount or worth of the claim cannot be |
|---|
| 531 | 527 | | 503determined before any distribution of assets of the institution is made to claimants having the |
|---|
| 532 | 528 | | 504same priority under Section 7-2-15. |
|---|
| 533 | 529 | | 505 (d) (i) An unliquidated claim against the institution, including claims based on alleged |
|---|
| 534 | 530 | | 506torts for which the institution would have been liable on the date the commissioner took |
|---|
| 535 | 531 | | 507possession of the institution and any claims for a right to an equitable remedy for breach of |
|---|
| 536 | 532 | | 508performance by the institution, may be filed in an estimated amount. |
|---|
| 537 | 533 | | 509 (ii) The commissioner may disallow or allow the claim in an amount determined by the |
|---|
| 538 | 534 | | 510commissioner, settle the claim in an amount approved by the court, or, in [his] the |
|---|
| 539 | 535 | | 511commissioner's discretion, refer the claim to the court [designated by Section 7-2-2] with |
|---|
| 540 | 536 | | 512supervisory jurisdiction under Section 7-2-2 for determination in accordance with procedures |
|---|
| 541 | 537 | | 513designated by the court. |
|---|
| 552 | 547 | | 522law for final consideration by the commissioner. |
|---|
| 553 | 548 | | 523 (v) The hearing shall be conducted as provided in rules or regulations issued by the |
|---|
| 554 | 549 | | 524commissioner. |
|---|
| 555 | 550 | | 525 (vi) The decision of the commissioner shall be based on the record before the hearing |
|---|
| 556 | 551 | | 526examiner and information the commissioner considers relevant and shall be subject to judicial |
|---|
| 557 | 552 | | 527review as provided in Subsection (9). |
|---|
| 558 | 553 | | 528 (e) A claim may be disallowed if it is based on actions or documents intended to |
|---|
| 559 | 554 | | 529deceive the commissioner or any receiver or liquidator appointed by [him] the commissioner. |
|---|
| 560 | 555 | | 530 (f) The commissioner may defer payment of any claim filed on behalf of a person who |
|---|
| 561 | 556 | | 531was at any time in control of the institution within the meaning of Section 7-1-103, pending the |
|---|
| 562 | 557 | | 532final determination of all claims of the institution against that person. |
|---|
| 563 | 558 | | 533 (g) The commissioner or any receiver appointed by [him] the commissioner may |
|---|
| 564 | 559 | | 534disallow a claim that seeks a dollar amount if it is determined by the court [having] with |
|---|
| 565 | 560 | | 535supervisory jurisdiction under Section 7-2-2 that the commissioner or receiver or conservator |
|---|
| 566 | 561 | | 536will not have any assets with which to pay the claim under the priorities established by Section |
|---|
| 567 | 562 | | 5377-2-15. |
|---|
| 568 | 563 | | 538 (h) The commissioner may adopt rules to establish such alternative dispute resolution |
|---|
| 569 | 564 | | 539processes as may be appropriate for the resolution of claims filed against an institution under |
|---|
| 570 | 565 | | 540this chapter. |
|---|
| 573 | 567 | | 542strive for procedures that are expeditious, fair, independent, and low cost. |
|---|
| 574 | 568 | | 543 (ii) The commissioner shall seek to develop incentives for claimants to participate in |
|---|
| 575 | 569 | | 544the alternative dispute resolution process. |
|---|
| 576 | 570 | | 545 (j) The commissioner may establish both binding and nonbinding processes, which |
|---|
| 577 | 571 | | 546may be conducted by any government or private party, but all parties, including the claimant |
|---|
| 578 | 572 | | 547and the commissioner or any receiver appointed by [him] the commissioner, must agree to the |
|---|
| 579 | 573 | | 548use of the process in a particular case. |
|---|
| 580 | 574 | | 549 (5) (a) Claims filed after the filing date are disallowed, unless: |
|---|
| 581 | 575 | | 550 (i) the claimant who did not file [his] the claimant's claim timely demonstrates that [he] |
|---|
| 582 | 576 | | 551the claimant did not have notice or actual knowledge of the proceedings in time to file a timely |
|---|
| 584 | 579 | | 553 (ii) proof of the claim was filed prior to the last distribution of assets. |
|---|
| 585 | 580 | | 554 (b) [For the purpose of this subsection only, late filed claims] Claims filed late may be |
|---|
| 586 | 581 | | 555allowed under Subsection (5)(a)(ii) if proof was filed before the final distribution of assets of |
|---|
| 587 | 582 | | 556the institution to claimants of the same priority and are payable only out of the remaining assets |
|---|
| 588 | 583 | | 557of the institution. |
|---|
| 589 | 584 | | 558 [(b)] (c) A late filed claim may be disallowed under any other provision of this section. |
|---|
| 590 | 585 | | 559 (6) Debts owing to the United States or to any state or its subdivisions as a penalty or |
|---|
| 591 | 586 | | 560forfeiture are not allowed, except for the amount of the pecuniary loss sustained by the act, |
|---|
| 592 | 587 | | 561transaction, or proceeding out of which the penalty or forfeiture arose. |
|---|
| 593 | 588 | | 562 (7) Except as otherwise provided in Subsection 7-2-15(1)(a), interest accruing on any |
|---|
| 594 | 589 | | 563claim after the commissioner has taken possession of an institution or other person under this |
|---|
| 595 | 590 | | 564chapter may be disallowed. |
|---|
| 596 | 591 | | 565 (8) (a) A claim against an institution or its assets based on a contract or agreement may |
|---|
| 597 | 592 | | 566be disallowed unless the agreement: |
|---|
| 598 | 593 | | 567 (i) is in writing; |
|---|
| 602 | 595 | | 569 (iii) has continuously, from the time of its execution, been an official record of the |
|---|
| 603 | 596 | | 570institution. |
|---|
| 604 | 597 | | 571 (b) The requirements of this Subsection (8) do not apply to claims for goods sold or |
|---|
| 605 | 598 | | 572services rendered to an institution in the ordinary course of business by trade creditors who do |
|---|
| 606 | 599 | | 573not customarily use written agreements or other documents. |
|---|
| 607 | 600 | | 574 (9) (a) (i) Objection to any claim allowed or disallowed may be made by any depositor |
|---|
| 608 | 601 | | 575or other claimant by filing a written objection with the commissioner within 30 days after |
|---|
| 609 | 602 | | 576service of the notice of allowance or disallowance. |
|---|
| 610 | 603 | | 577 (ii) The commissioner shall present the objection to the court for hearing and |
|---|
| 611 | 604 | | 578determination upon written notice to the claimant and to the filing party. |
|---|
| 612 | 605 | | 579 (iii) The notice shall set forth the time and place of hearing. |
|---|
| 613 | 606 | | 580 (iv) After the 30-day period, no objection may be filed. |
|---|
| 614 | 607 | | 581 (v) This Subsection (9) does not apply to secured claims allowed under Subsection (3). |
|---|
| 615 | 608 | | 582 (b) The hearing shall be based on the record before the commissioner and any |
|---|
| 617 | 611 | | 584 (c) (i) The court may not reverse or otherwise modify the determination of the |
|---|
| 618 | 612 | | 585commissioner with respect to the claim unless [it] the court finds the determination of the |
|---|
| 619 | 613 | | 586commissioner to be arbitrary, capricious, or otherwise contrary to law. |
|---|
| 620 | 614 | | 587 (ii) The burden of proof is on the party objecting to the determination of the |
|---|
| 621 | 615 | | 588commissioner. |
|---|
| 622 | 616 | | 589 (d) An appeal from any final judgment of the court with respect to a claim may be |
|---|
| 623 | 617 | | 590taken as provided by law by the claimant, the commissioner, or any person having standing to |
|---|
| 624 | 618 | | 591object to the allowance or disallowance of the claim. |
|---|
| 625 | 619 | | 592 (10) (a) If a claim against the institution has been asserted in any judicial, |
|---|
| 626 | 620 | | 593administrative, or other proceeding pending at the time the commissioner took possession of |
|---|
| 627 | 621 | | 594the institution under this chapter or under Chapter 19, Acquisition of Failing Depository |
|---|
| 630 | 623 | | 596the pending proceeding with the commissioner within the time for filing claims as provided in |
|---|
| 631 | 624 | | 597Subsection (2). |
|---|
| 632 | 625 | | 598 (b) [Such a claim] A claim under Subsection (10)(a) shall be allowed or disallowed |
|---|
| 633 | 626 | | 599within 90 days of the receipt of the complete record of the proceedings. |
|---|
| 634 | 627 | | 600 (c) No application to lift the stay of a pending proceeding shall be filed until the claim |
|---|
| 635 | 628 | | 601has been allowed or disallowed. |
|---|
| 636 | 629 | | 602 (d) The commissioner may petition the court [designated by Section 7-2-2] with |
|---|
| 637 | 630 | | 603supervisory jurisdiction under Section 7-2-2 to lift the stay to determine whether the claim |
|---|
| 638 | 631 | | 604should be allowed or disallowed. |
|---|
| 639 | 632 | | 605 (11) (a) All claims allowed by the commissioner and not disallowed or otherwise |
|---|
| 640 | 633 | | 606modified by the court under Subsection (9), if not paid within 30 days after allowance, shall be |
|---|
| 641 | 634 | | 607evidenced by a certificate payable only out of the assets of the institution in the possession of |
|---|
| 642 | 635 | | 608the commissioner, subject to the priorities set forth in Section 7-2-15. |
|---|
| 643 | 636 | | 609 (b) This provision does not apply to a secured claim allowed by the commissioner |
|---|
| 644 | 637 | | 610under Subsection (3)(a). |
|---|
| 645 | 638 | | 611 Section 8. Section 7-2-9 is amended to read: |
|---|
| 646 | 639 | | 612 7-2-9. Conservatorship, receivership, or liquidation of institution -- Appointment |
|---|
| 647 | 640 | | 613of receiver -- Review of actions. |
|---|
| 649 | 643 | | 615receiver to perform the duties of the commissioner. |
|---|
| 650 | 644 | | 616 (b) Subject to any limitations, conditions, or requirements specified by the |
|---|
| 651 | 645 | | 617commissioner and approved by the court, a receiver shall have all the powers and duties of the |
|---|
| 652 | 646 | | 618commissioner under this chapter and the laws of this state to act as a conservator, receiver, or |
|---|
| 653 | 647 | | 619liquidator of the institution. |
|---|
| 654 | 648 | | 620 (c) Actions of the commissioner in appointing a receiver shall be subject to review only |
|---|
| 655 | 649 | | 621as provided in Section 7-2-2. |
|---|
| 659 | 651 | | 623insurance agency, the commissioner may appoint that agency as receiver. |
|---|
| 660 | 652 | | 624 (ii) After receiving notice in writing of the acceptance of the appointment, the |
|---|
| 661 | 653 | | 625commissioner shall file a certificate of appointment in the commissioner's office and with the |
|---|
| 662 | 654 | | 626clerk of the [district] court. |
|---|
| 663 | 655 | | 627 (iii) After the filing of the certificate, the possession of all assets, business, and |
|---|
| 664 | 656 | | 628property of the institution is considered transferred from the institution and the commissioner |
|---|
| 665 | 657 | | 629to the agency, and title to all assets, business, and property of the institution is vested in the |
|---|
| 666 | 658 | | 630agency without the execution of any instruments of conveyance, assignment, transfer, or |
|---|
| 667 | 659 | | 631endorsement. |
|---|
| 668 | 660 | | 632 (b) (i) If a federal deposit insurance agency accepts an appointment as receiver, it has |
|---|
| 669 | 661 | | 633all the powers and privileges provided by the laws of this state and the United States with |
|---|
| 670 | 662 | | 634respect to the conservatorship, receivership, or liquidation of an institution and the rights of its |
|---|
| 671 | 663 | | 635depositors, and other creditors, including authority to make an agreement for the purchase of |
|---|
| 672 | 664 | | 636assets and assumption of deposit and other liabilities by another depository institution or take |
|---|
| 673 | 665 | | 637other action authorized by Title 12 of the United States Code to maintain the stability of the |
|---|
| 674 | 666 | | 638banking system. |
|---|
| 675 | 667 | | 639 (ii) Such action by a federal deposit insurance agency may be taken upon approval by |
|---|
| 676 | 668 | | 640the court, with or without prior notice. |
|---|
| 677 | 669 | | 641 (iii) Such actions or agreements may be disapproved, amended, or rescinded only upon |
|---|
| 678 | 670 | | 642a finding by the court that the decisions or actions of the receiver are arbitrary, capricious, |
|---|
| 679 | 671 | | 643fraudulent, or contrary to law. |
|---|
| 680 | 672 | | 644 (iv) In the event of any conflict between state and federal law, including provisions for |
|---|
| 687 | 679 | | 650duty or violations of the laws of this state or the United States applicable to depository |
|---|
| 688 | 680 | | 651institutions may have caused or contributed to a condition which resulted in any loss incurred |
|---|
| 689 | 681 | | 652by the institution or to its assets in the possession of the commissioner or receiver. |
|---|
| 690 | 682 | | 653 (ii) As used in this Subsection (2)(c), fiduciary duty includes those duties and standards |
|---|
| 691 | 683 | | 654applicable under statutes and laws of this state and the United States to a director, officer, or |
|---|
| 692 | 684 | | 655other party employed by or rendering professional services to a depository institution whose |
|---|
| 693 | 685 | | 656deposits are insured by a federal deposit insurance agency. |
|---|
| 694 | 686 | | 657 (iii) Upon taking possession of an institution, no person other than the commissioner or |
|---|
| 695 | 687 | | 658receiver shall have standing to assert any such right or claim of the institution, including its |
|---|
| 696 | 688 | | 659depositors, creditors, or shareholders unless the right or claim has been abandoned by the |
|---|
| 697 | 689 | | 660commissioner or receiver with approval of the court. |
|---|
| 698 | 690 | | 661 (iv) Any judgment based on the rights and claims of the commissioner or receiver shall |
|---|
| 699 | 691 | | 662have priority in payment from the assets of the judgment debtors. |
|---|
| 700 | 692 | | 663 (d) For the purposes of this section, the term "federal deposit insurance agency" shall |
|---|
| 701 | 693 | | 664include the Federal Deposit Insurance Corporation, the National Credit Union Administration |
|---|
| 702 | 694 | | 665and any departments thereof or successors thereto, and any other federal agency authorized by |
|---|
| 703 | 695 | | 666federal law to act as a conservator, receiver, and liquidator of a federally insured depository |
|---|
| 704 | 696 | | 667institution, including the Resolution Trust Corporation and any department thereof or successor |
|---|
| 705 | 697 | | 668thereto. |
|---|
| 706 | 698 | | 669 (3) (a) The receiver may employ assistants, agents, accountants, and legal counsel. |
|---|
| 707 | 699 | | 670 (b) If the receiver is not a federal deposit insurance agency, the compensation to be |
|---|
| 708 | 700 | | 671paid such assistants, agents, accountants, and legal counsel shall be approved by the |
|---|
| 709 | 701 | | 672commissioner. |
|---|
| 710 | 702 | | 673 (c) All expenses incident to the receivership shall be paid out of the assets of the |
|---|
| 711 | 703 | | 674institution. |
|---|
| 712 | 704 | | 675 (d) If a receiver is not a federal deposit insurance agency, the receiver and any |
|---|
| 716 | 707 | | 677approved by the court for the faithful discharge of all duties and responsibilities in connection |
|---|
| 717 | 708 | | 678with the receivership including the accounting for money received and paid. |
|---|
| 718 | 709 | | 679 (e) The cost of the bond shall be paid from the assets of the institution. |
|---|
| 719 | 710 | | 680 (f) Suit may be maintained on the bond by the commissioner or by any person injured |
|---|
| 720 | 711 | | 681by a breach of the condition of the bond. |
|---|
| 721 | 712 | | 682 (4) (a) Upon the appointment of a receiver for an institution in possession pursuant to |
|---|
| 722 | 713 | | 683this chapter, the commissioner and the department are exempt from liability or damages for any |
|---|
| 723 | 714 | | 684act or omission of any receiver appointed pursuant to this section. |
|---|
| 724 | 715 | | 685 (b) This section does not limit the right of the commissioner to prescribe and enforce |
|---|
| 725 | 716 | | 686rules regulating a receiver in carrying out its duties with respect to an institution subject to the |
|---|
| 726 | 717 | | 687jurisdiction of the department. |
|---|
| 727 | 718 | | 688 (c) Any act or omission of the commissioner or of any federal deposit insurance agency |
|---|
| 728 | 719 | | 689as a receiver appointed by [him] the commissioner while acting pursuant to this chapter shall |
|---|
| 729 | 720 | | 690be deemed to be the exercise of a discretionary function within the meaning of Section |
|---|
| 730 | 721 | | 69163G-7-301 of the laws of this state or Section 28 U.S.C. 2680(a) of the laws of the United |
|---|
| 731 | 722 | | 692States. |
|---|
| 732 | 723 | | 693 (5) (a) Actions, decisions, or agreements of a receiver under this chapter, other than |
|---|
| 733 | 724 | | 694allowance or disallowance of claims under Section 7-2-6, [shall be] are subject to judicial |
|---|
| 734 | 725 | | 695review [only as follows] if: |
|---|
| 735 | 726 | | 696 [(a)] (i) [A petition for review shall be filed with the court having jurisdiction under |
|---|
| 736 | 727 | | 697Section 7-2-2 not more than 90 days after the date] a petition is filed in a court with jurisdiction |
|---|
| 737 | 728 | | 698under Title 78A, Judiciary and Judicial Administration, within 90 days after the day on which |
|---|
| 738 | 729 | | 699the act, decision, or agreement became effective or its terms are filed with the court[.]; and |
|---|
| 739 | 730 | | 700 [(b)] (ii) [The petition shall state] the petition states in simple, concise, and direct terms |
|---|
| 740 | 731 | | 701the facts and principles of law upon which the petitioner claims the act, decision, or agreement |
|---|
| 741 | 732 | | 702of the receiver was or would be arbitrary, capricious, fraudulent, or contrary to law and how the |
|---|
| 748 | 739 | | 708to the allegations set forth in a petition or response. |
|---|
| 749 | 740 | | 709 [(c)] (d) The receiver shall have 30 days after [service of the petition within which] the |
|---|
| 750 | 741 | | 710day on which the petition is served to respond. |
|---|
| 751 | 742 | | 711 [(d)] (e) All further proceedings are to be conducted in accordance with the Utah Rules |
|---|
| 752 | 743 | | 712of Civil Procedure. |
|---|
| 753 | 744 | | 713 (6) All notices required under this section shall be made in accordance with the Utah |
|---|
| 754 | 745 | | 714Rules of Civil Procedure and served upon the attorney general of the state of Utah, the |
|---|
| 755 | 746 | | 715commissioner of financial institutions, the receiver of the institution appointed under this |
|---|
| 756 | 747 | | 716chapter, and upon the designated representative of any party in interest who requests in writing |
|---|
| 757 | 748 | | 717such notice. |
|---|
| 758 | 749 | | 718 Section 9. Section 7-2-10 is amended to read: |
|---|
| 759 | 750 | | 719 7-2-10. Inventory of assets -- Listings of claims -- Report of proceedings -- Filing |
|---|
| 760 | 751 | | 720-- Inspection. |
|---|
| 761 | 752 | | 721 (1) As soon as is practical after taking possession of an institution the commissioner, or |
|---|
| 762 | 753 | | 722any receiver or liquidator appointed by [him] the commissioner, shall make or cause to be |
|---|
| 763 | 754 | | 723made in duplicate an inventory of its assets, one copy to be filed in [his] the commissioner's |
|---|
| 764 | 755 | | 724office and one with the clerk of the [district] court. |
|---|
| 765 | 756 | | 725 (2) Upon the expiration of the time fixed for presentation of claims the commissioner, |
|---|
| 766 | 757 | | 726or any receiver or liquidator appointed by [him] the commissioner, shall make in duplicate a |
|---|
| 767 | 758 | | 727full and complete list of the claims presented, including and specifying claims disallowed by |
|---|
| 768 | 759 | | 728[him] the commissioner, of which one copy shall be filed in [his] the commissioner's office and |
|---|
| 769 | 760 | | 729one copy in the office of the clerk of the [district] court. |
|---|
| 773 | 762 | | 731commissioner, shall in like manner make and file supplemental lists showing all claims |
|---|
| 774 | 763 | | 732presented after the filing of the first list. |
|---|
| 775 | 764 | | 733 (4) The supplemental lists shall be filed every six months and at least 15 days before |
|---|
| 776 | 765 | | 734the declaration of any dividend. |
|---|
| 777 | 766 | | 735 (5) At the time of the order for final distribution the commissioner, or any receiver or |
|---|
| 778 | 767 | | 736liquidator appointed by [him] the commissioner, shall make a report in duplicate of the |
|---|
| 779 | 768 | | 737proceeding, showing the disposition of the assets and liabilities of the institution, one copy to |
|---|
| 781 | 771 | | 739 (6) The accounting, inventory, and lists of claims shall be open at all reasonable times |
|---|
| 782 | 772 | | 740for inspection. |
|---|
| 783 | 773 | | 741 (7) Any objection to any report or accounting shall be filed with the clerk of the |
|---|
| 784 | 774 | | 742[district] court within 30 days after the report of accounting has been filed by the |
|---|
| 785 | 775 | | 743commissioner, or any receiver or liquidator appointed by [him,] the commissioner, and shall be |
|---|
| 786 | 776 | | 744subject to judicial review only as provided in Section 7-2-9. |
|---|
| 787 | 777 | | 745 Section 10. Section 7-5-13 is amended to read: |
|---|
| 788 | 778 | | 746 7-5-13. Collective investment funds. |
|---|
| 789 | 779 | | 747 (1) A person authorized to engage in the trust business in this state may: |
|---|
| 790 | 780 | | 748 (a) establish collective investment funds that authorize participation by fiduciary or |
|---|
| 791 | 781 | | 749trust accounts of the trust company, its affiliates, or both; and |
|---|
| 792 | 782 | | 750 (b) participate in collective investment funds established by an affiliate of the trust |
|---|
| 793 | 783 | | 751company, if: |
|---|
| 794 | 784 | | 752 (i) the affiliate is authorized under the laws of its chartering authority to establish a |
|---|
| 795 | 785 | | 753collective investment fund in which its affiliates may participate; and |
|---|
| 796 | 786 | | 754 (ii) the plan establishing the collective investment fund specifically authorized the |
|---|
| 797 | 787 | | 755participation. |
|---|
| 798 | 788 | | 756 (2) Funds held by a trust company may be invested collectively in a collective |
|---|
| 813 | 803 | | 770 (a) post in a conspicuous location on its premises that can be viewed by a person |
|---|
| 814 | 804 | | 771seeking a deferred deposit loan: |
|---|
| 815 | 805 | | 772 (i) a complete schedule of any interest or fees charged for a deferred deposit loan that |
|---|
| 816 | 806 | | 773states the interest and fees using dollar amounts; |
|---|
| 817 | 807 | | 774 (ii) a number the person can call to make a complaint to the department regarding the |
|---|
| 818 | 808 | | 775deferred deposit loan; and |
|---|
| 819 | 809 | | 776 (iii) a list of states where the deferred deposit lender is registered or authorized to offer |
|---|
| 820 | 810 | | 777deferred deposit loans through the Internet or other electronic means; |
|---|
| 821 | 811 | | 778 (b) enter into a written contract for the deferred deposit loan; |
|---|
| 822 | 812 | | 779 (c) conspicuously disclose in the written contract: |
|---|
| 823 | 813 | | 780 (i) that under Subsection (3)(a), a person receiving a deferred deposit loan may make a |
|---|
| 824 | 814 | | 781partial payment in increments of at least $5 on the principal owed on the deferred deposit loan |
|---|
| 825 | 815 | | 782without incurring additional charges above the charges provided in the written contract; |
|---|
| 826 | 816 | | 783 (ii) that under Subsection (3)(b), a person receiving a deferred deposit loan may rescind |
|---|
| 830 | 818 | | 785charges; |
|---|
| 831 | 819 | | 786 (iii) that under Subsection (4)(b), the deferred deposit loan may not be rolled over |
|---|
| 832 | 820 | | 787without the person receiving the deferred deposit loan requesting the rollover of the deferred |
|---|
| 833 | 821 | | 788deposit loan; |
|---|
| 834 | 822 | | 789 (iv) that under Subsection (4)(c), the deferred deposit loan may not be rolled over if the |
|---|
| 835 | 823 | | 790rollover requires the person to pay the amount owed by the person under the deferred deposit |
|---|
| 836 | 824 | | 791loan in whole or in part more than 10 weeks after the day on which the deferred deposit loan is |
|---|
| 837 | 825 | | 792executed; and |
|---|
| 838 | 826 | | 793 (v) (A) the name and address of a designated agent required to be provided the |
|---|
| 839 | 827 | | 794department under Subsection 7-23-201(2)(d)(vi); and |
|---|
| 840 | 828 | | 795 (B) a statement that service of process may be made to the designated agent; |
|---|
| 841 | 829 | | 796 (d) provide the person seeking the deferred deposit loan: |
|---|
| 842 | 830 | | 797 (i) a copy of the written contract described in Subsection (1)(c); and |
|---|
| 843 | 831 | | 798 (ii) written notice that the person seeking the deferred deposit loan is eligible to enter |
|---|
| 844 | 832 | | 799into an extended payment plan described in Section 7-23-403; |
|---|
| 846 | 835 | | 801deferred deposit loan including: |
|---|
| 847 | 836 | | 802 (i) the amount of any interest rate or fee; |
|---|
| 848 | 837 | | 803 (ii) the date on which the full amount of the deferred deposit loan is due; |
|---|
| 849 | 838 | | 804 (iii) that under Subsection (3)(a), a person receiving a deferred deposit loan may make |
|---|
| 850 | 839 | | 805a partial payment in increments of at least $5 on the principal owed on the deferred deposit |
|---|
| 851 | 840 | | 806loan without incurring additional charges above the charges provided in the written contract; |
|---|
| 852 | 841 | | 807 (iv) that under Subsection (3)(b), a person receiving a deferred deposit loan may |
|---|
| 853 | 842 | | 808rescind the deferred deposit loan on or before 5 p.m. of the next business day without incurring |
|---|
| 854 | 843 | | 809any charges; |
|---|
| 855 | 844 | | 810 (v) that under Subsection (4)(b), the deferred deposit loan may not be rolled over |
|---|
| 858 | 846 | | 812deposit loan; and |
|---|
| 859 | 847 | | 813 (vi) that under Subsection (4)(c), the deferred deposit loan may not be rolled over if the |
|---|
| 860 | 848 | | 814rollover requires the person to pay the amount owed by the person under the deferred deposit |
|---|
| 861 | 849 | | 815loan in whole or in part more than 10 weeks after the day on which the deferred deposit loan is |
|---|
| 862 | 850 | | 816executed; |
|---|
| 863 | 851 | | 817 (f) comply with the following as in effect on the date the deferred deposit loan is |
|---|
| 864 | 852 | | 818extended: |
|---|
| 865 | 853 | | 819 (i) Truth in Lending Act, 15 U.S.C. Sec. 1601 et seq., and its implementing federal |
|---|
| 866 | 854 | | 820regulations; |
|---|
| 867 | 855 | | 821 (ii) Equal Credit Opportunity Act, 15 U.S.C. Sec. 1691, and its implementing federal |
|---|
| 868 | 856 | | 822regulations; |
|---|
| 869 | 857 | | 823 (iii) Bank Secrecy Act, 12 U.S.C. Sec. 1829b, 12 U.S.C. Sec. 1951 through 1959, and |
|---|
| 870 | 858 | | 82431 U.S.C. Sec. 5311 through 5332, and its implementing regulations; and |
|---|
| 871 | 859 | | 825 (iv) Title 70C, Utah Consumer Credit Code; |
|---|
| 872 | 860 | | 826 (g) in accordance with Subsection (6), make an inquiry to determine whether a person |
|---|
| 873 | 861 | | 827attempting to receive a deferred deposit loan has the ability to repay the deferred deposit loan |
|---|
| 874 | 862 | | 828in the ordinary course, which may include rollovers or extended payment plans as allowed |
|---|
| 875 | 863 | | 829under this chapter; |
|---|
| 876 | 864 | | 830 (h) in accordance with Subsection (7), receive a signed acknowledgment from a person |
|---|
| 887 | 874 | | 839Subsection (1)(a) to the person receiving the deferred deposit loan: |
|---|
| 888 | 875 | | 840 (a) in a conspicuous manner; and |
|---|
| 889 | 876 | | 841 (b) prior to the person entering into the deferred deposit loan. |
|---|
| 890 | 877 | | 842 (3) A deferred deposit lender that engages in a deferred deposit loan shall permit a |
|---|
| 891 | 878 | | 843person receiving a deferred deposit loan to: |
|---|
| 892 | 879 | | 844 (a) make partial payments in increments of at least $5 on the principal owed on the |
|---|
| 893 | 880 | | 845deferred deposit loan at any time prior to maturity without incurring additional charges above |
|---|
| 894 | 881 | | 846the charges provided in the written contract; and |
|---|
| 895 | 882 | | 847 (b) rescind the deferred deposit loan without incurring any charges by returning the |
|---|
| 896 | 883 | | 848deferred deposit loan amount to the deferred deposit lender on or before 5 p.m. the next |
|---|
| 897 | 884 | | 849business day following the deferred deposit loan transaction. |
|---|
| 898 | 885 | | 850 (4) A deferred deposit lender that engages in a deferred deposit loan may not: |
|---|
| 899 | 886 | | 851 (a) collect additional interest on a deferred deposit loan with an outstanding principal |
|---|
| 900 | 887 | | 852balance 10 weeks after the day on which the deferred deposit loan is executed; |
|---|
| 901 | 888 | | 853 (b) roll over a deferred deposit loan without the person receiving the deferred deposit |
|---|
| 902 | 889 | | 854loan requesting the rollover of the deferred deposit loan; |
|---|
| 903 | 890 | | 855 (c) roll over a deferred deposit loan if the rollover requires a person to pay the amount |
|---|
| 904 | 891 | | 856owed by the person under a deferred deposit loan in whole or in part more than 10 weeks from |
|---|
| 905 | 892 | | 857the day on which the deferred deposit loan is first executed; |
|---|
| 906 | 893 | | 858 (d) extend a new deferred deposit loan to a person on the same business day that the |
|---|
| 907 | 894 | | 859person makes a payment on another deferred deposit loan if: |
|---|
| 908 | 895 | | 860 (i) the payment results in the principal of that deferred deposit loan being paid in full; |
|---|
| 909 | 896 | | 861and |
|---|
| 915 | 902 | | 866deposit loan; |
|---|
| 916 | 903 | | 867 (f) threaten to use or use the criminal process in any state to collect on the deferred |
|---|
| 917 | 904 | | 868deposit loan; |
|---|
| 918 | 905 | | 869 (g) in connection with the collection of money owed on a deferred deposit loan, |
|---|
| 919 | 906 | | 870communicate with a person who owes money on a deferred deposit loan at the person's place of |
|---|
| 920 | 907 | | 871employment if the person or the person's employer communicates, orally or in writing, to the |
|---|
| 921 | 908 | | 872deferred deposit lender that the person's employer prohibits the person from receiving these |
|---|
| 922 | 909 | | 873communications; |
|---|
| 923 | 910 | | 874 (h) modify by contract the venue provisions in [Title 78B, Chapter 3, Actions and |
|---|
| 924 | 911 | | 875Venue] Title 78B, Chapter 3a, Venue for Civil Actions; or |
|---|
| 925 | 912 | | 876 (i) avoid the requirements of Subsection 7-23-403(1)(c) by extending an |
|---|
| 926 | 913 | | 877interest-bearing loan within seven calendar days before the day on which the 10-week period |
|---|
| 927 | 914 | | 878ends. |
|---|
| 928 | 915 | | 879 (5) Notwithstanding Subsections (4)(a) and (f), a deferred deposit lender that is the |
|---|
| 929 | 916 | | 880holder of a check used to obtain a deferred deposit loan that is dishonored may use the |
|---|
| 930 | 917 | | 881remedies and notice procedures provided in Chapter 15, Dishonored Instruments, except that |
|---|
| 931 | 918 | | 882the issuer, as defined in Section 7-15-1, of the check may not be: |
|---|
| 932 | 919 | | 883 (a) asked by the holder to pay the amount described in Subsection 7-15-1(6)(a)(iii) as a |
|---|
| 933 | 920 | | 884condition of the holder not filing a civil action; or |
|---|
| 934 | 921 | | 885 (b) held liable for the damages described in Subsection 7-15-1(7)(b)(vi). |
|---|
| 935 | 922 | | 886 (6) (a) The inquiry required by Subsection (1)(g) applies solely to the initial period of a |
|---|
| 936 | 923 | | 887deferred deposit loan transaction with a person and does not apply to any rollover or extended |
|---|
| 937 | 924 | | 888payment plan of a deferred deposit loan. |
|---|
| 938 | 925 | | 889 (b) Subject to Subsection (6)(c), a deferred deposit lender is in compliance with |
|---|
| 939 | 926 | | 890Subsection (1)(g) if the deferred deposit lender, at the time of the initial period of the deferred |
|---|
| 940 | 927 | | 891deposit loan transaction: |
|---|
| 945 | 931 | | 894agency, as defined in 15 U.S.C. Sec. 1681a; or |
|---|
| 946 | 932 | | 895 (B) written proof or verification of income from the person seeking the deferred |
|---|
| 947 | 933 | | 896deposit loan; or |
|---|
| 948 | 934 | | 897 (ii) relies on the prior repayment history with the deferred deposit lender from the |
|---|
| 949 | 935 | | 898records of the deferred deposit lender. |
|---|
| 950 | 936 | | 899 (c) If a person seeking a deferred deposit loan has not previously received a deferred |
|---|
| 951 | 937 | | 900deposit loan from that deferred deposit lender, to be in compliance with Subsection (1)(g), the |
|---|
| 952 | 938 | | 901deferred deposit lender, at the time of the initial period of the deferred deposit loan transaction, |
|---|
| 953 | 939 | | 902shall obtain a consumer report, as defined in 15 U.S.C. Sec. 1681a, from a consumer reporting |
|---|
| 954 | 940 | | 903agency, as defined in 15 U.S.C. Sec. 1681a. |
|---|
| 955 | 941 | | 904 (7) A deferred deposit lender is in compliance with Subsection (1)(h) if the deferred |
|---|
| 956 | 942 | | 905deposit lender obtains from the person seeking the deferred deposit loan a signed |
|---|
| 957 | 943 | | 906acknowledgment that is in 14-point bold font, that the person seeking the deferred deposit loan |
|---|
| 958 | 944 | | 907has: |
|---|
| 959 | 945 | | 908 (a) reviewed the payment terms of the deferred deposit loan agreement; |
|---|
| 960 | 946 | | 909 (b) received a disclosure that a deferred deposit loan may not be rolled over if the |
|---|
| 961 | 947 | | 910rollover requires the person to pay the amount owed by the person under the deferred deposit |
|---|
| 962 | 948 | | 911loan in whole or in part more than 10 weeks after the day on which the deferred deposit loan is |
|---|
| 963 | 949 | | 912first executed; |
|---|
| 964 | 950 | | 913 (c) received a disclosure explaining the extended payment plan options; and |
|---|
| 965 | 951 | | 914 (d) acknowledged the ability to repay the deferred deposit loan in the ordinary course, |
|---|
| 966 | 952 | | 915which may include rollovers, or extended payment plans as allowed under this chapter. |
|---|
| 967 | 953 | | 916 (8) (a) Before initiating a civil action against a person who owes money on a deferred |
|---|
| 968 | 954 | | 917deposit loan, a deferred deposit lender shall provide the person at least 30 days notice of |
|---|
| 969 | 955 | | 918default, describing that: |
|---|
| 977 | 963 | | 925 (i) by sending written notice to the address provided by the person to the deferred |
|---|
| 978 | 964 | | 926deposit lender; |
|---|
| 979 | 965 | | 927 (ii) by sending an electronic transmission to a person if electronic contact information |
|---|
| 980 | 966 | | 928is provided to the deferred deposit lender; or |
|---|
| 981 | 967 | | 929 (iii) pursuant to the Utah Rules of Civil Procedure. |
|---|
| 982 | 968 | | 930 (c) A notice under this Subsection (8), in addition to complying with Subsection (8)(a), |
|---|
| 983 | 969 | | 931shall: |
|---|
| 984 | 970 | | 932 (i) be in English, if the initial transaction is conducted in English; |
|---|
| 985 | 971 | | 933 (ii) state the date by which the person must act to enter into an extended payment plan; |
|---|
| 986 | 972 | | 934 (iii) explain the procedures the person must follow to enter into an extended payment |
|---|
| 987 | 973 | | 935plan; |
|---|
| 988 | 974 | | 936 (iv) subject to Subsection 7-23-403(7), if the deferred deposit lender requires the |
|---|
| 989 | 975 | | 937person to make an initial payment to enter into an extended payment plan: |
|---|
| 990 | 976 | | 938 (A) explain the requirement; and |
|---|
| 991 | 977 | | 939 (B) state the amount of the initial payment and the date the initial payment shall be |
|---|
| 992 | 978 | | 940made; |
|---|
| 993 | 979 | | 941 (v) state that the person has the opportunity to enter into an extended payment plan for |
|---|
| 994 | 980 | | 942a time period meeting the requirements of Subsection 7-23-403(2)(b); and |
|---|
| 995 | 981 | | 943 (vi) include the following amounts: |
|---|
| 996 | 982 | | 944 (A) the remaining balance on the original deferred deposit loan; |
|---|
| 997 | 983 | | 945 (B) the total payments made on the deferred deposit loan; |
|---|
| 1001 | 985 | | 947chapter; and |
|---|
| 1002 | 986 | | 948 (D) the total amount due if the person enters into an extended payment plan. |
|---|
| 1003 | 987 | | 949 Section 12. Section 16-6a-117 is amended to read: |
|---|
| 1004 | 988 | | 950 16-6a-117. Judicial relief. |
|---|
| 1005 | 989 | | 951 (1) (a) A director, officer, delegate, or member may petition [the applicable district] a |
|---|
| 1006 | 990 | | 952court to take an action provided in Subsection (1)(b) if for any reason it is impractical or |
|---|
| 1007 | 991 | | 953impossible for a nonprofit corporation in the manner prescribed by this chapter[, its] or the |
|---|
| 1008 | 992 | | 954nonprofit corporation's articles of incorporation[,] or bylaws to: |
|---|
| 1010 | 995 | | 956directors; or |
|---|
| 1011 | 996 | | 957 (ii) otherwise obtain the consent of [its] the nonprofit corporation's members, |
|---|
| 1012 | 997 | | 958delegates, or directors. |
|---|
| 1013 | 998 | | 959 (b) If a petition is filed under Subsection (1)(a), the [applicable district] court, in the |
|---|
| 1014 | 999 | | 960manner [it] the court finds fair and equitable under the circumstances, may order that: |
|---|
| 1015 | 1000 | | 961 (i) a meeting be called; or |
|---|
| 1016 | 1001 | | 962 (ii) a written consent or other form of obtaining the vote of members, delegates, or |
|---|
| 1017 | 1002 | | 963directors be authorized. |
|---|
| 1018 | 1003 | | 964 [(c) For purposes of this section, the applicable district court is:] |
|---|
| 1019 | 1004 | | 965 [(i) the district court of the county in this state where the nonprofit corporation's |
|---|
| 1020 | 1005 | | 966principal office is located; or] |
|---|
| 1021 | 1006 | | 967 [(ii) if the nonprofit corporation has no principal office in this state:] |
|---|
| 1022 | 1007 | | 968 [(A) the district court of the county in which the registered office is located; or] |
|---|
| 1023 | 1008 | | 969 [(B) if the nonprofit corporation has no registered office in this state, the district court |
|---|
| 1024 | 1009 | | 970in and for Salt Lake County.] |
|---|
| 1025 | 1010 | | 971 (2) (a) A court [specified in Subsection (1)] shall, in an order issued pursuant to this |
|---|
| 1026 | 1011 | | 972section, provide for a method of notice reasonably designed to give actual notice to all persons |
|---|
| 1029 | 1013 | | 974incorporation, or bylaws. |
|---|
| 1030 | 1014 | | 975 (b) The method of notice described in Subsection (1) complies with this section |
|---|
| 1031 | 1015 | | 976whether or not the method of notice: |
|---|
| 1032 | 1016 | | 977 (i) results in actual notice to all persons described in Subsection (2)(a); or |
|---|
| 1033 | 1017 | | 978 (ii) conforms to the notice requirements that would otherwise apply. |
|---|
| 1034 | 1018 | | 979 (c) In a proceeding under this section, the court may determine who are the members or |
|---|
| 1035 | 1019 | | 980directors of a nonprofit corporation. |
|---|
| 1036 | 1020 | | 981 (3) An order issued pursuant to this section may dispense with any requirement relating |
|---|
| 1037 | 1021 | | 982to the holding of or voting at meetings or obtaining votes that would otherwise be imposed by |
|---|
| 1038 | 1022 | | 983this chapter[, the] or the nonprofit corporation's articles of incorporation, or bylaws, including |
|---|
| 1039 | 1023 | | 984any requirement as to: |
|---|
| 1040 | 1024 | | 985 (a) quorums; or |
|---|
| 1042 | 1027 | | 987 (4) (a) Whenever practical, any order issued pursuant to this section shall limit the |
|---|
| 1043 | 1028 | | 988subject matter of a meeting or other form of consent authorized to items the resolution of which |
|---|
| 1044 | 1029 | | 989will or may enable the nonprofit corporation to continue managing [its] the nonprofit |
|---|
| 1045 | 1030 | | 990corporation's affairs without further resort to this section, including amendments to the articles |
|---|
| 1046 | 1031 | | 991of incorporation or bylaws. |
|---|
| 1047 | 1032 | | 992 (b) Notwithstanding Subsection (4)(a), an order under this section may authorize the |
|---|
| 1048 | 1033 | | 993obtaining of whatever votes and approvals are necessary for the dissolution, merger, or sale of |
|---|
| 1049 | 1034 | | 994assets of a nonprofit corporation. |
|---|
| 1050 | 1035 | | 995 (5) A meeting or other method of obtaining the vote of members, delegates, or |
|---|
| 1051 | 1036 | | 996directors conducted pursuant to and that complies with an order issued under this section: |
|---|
| 1052 | 1037 | | 997 (a) is for all purposes a valid meeting or vote, as the case may be; and |
|---|
| 1053 | 1038 | | 998 (b) shall have the same force and effect as if it complied with every requirement |
|---|
| 1054 | 1039 | | 999imposed by this chapter[, the] or the nonprofit corporation's articles of incorporation[,] or |
|---|
| 1058 | 1041 | | 1001 (6) In addition to a meeting held under this section, a court-ordered meeting may be |
|---|
| 1059 | 1042 | | 1002held pursuant to Section 16-6a-703. |
|---|
| 1060 | 1043 | | 1003 Section 13. Section 16-6a-703 is amended to read: |
|---|
| 1061 | 1044 | | 1004 16-6a-703. Court-ordered meeting. |
|---|
| 1062 | 1045 | | 1005 [(1) (a) Upon an application described in Subsection (1)(b) the holding of a meeting of |
|---|
| 1063 | 1046 | | 1006the members may be summarily ordered by:] |
|---|
| 1064 | 1047 | | 1007 [(i) the district court of the county in this state where the nonprofit corporation's |
|---|
| 1065 | 1048 | | 1008principal office is located; or] |
|---|
| 1066 | 1049 | | 1009 [(ii) if the nonprofit corporation has no principal office in this state, the district court in |
|---|
| 1067 | 1050 | | 1010and for Salt Lake County.] |
|---|
| 1068 | 1051 | | 1011 [(b) Subsection (1)(a) applies to an application by:] |
|---|
| 1075 | 1059 | | 1018effective under Subsection 16-6a-702(1)[,] may petition a court with jurisdiction under Title |
|---|
| 1076 | 1060 | | 101978A, Judiciary and Judicial Administration, if: |
|---|
| 1077 | 1061 | | 1020 [(A)] (i) notice of the special meeting was not given within 30 days after[:] |
|---|
| 1078 | 1062 | | 1021 [(I)] the date of the call[;] or |
|---|
| 1079 | 1063 | | 1022 [(II)] the date the last of the demands necessary to require the calling of the meeting |
|---|
| 1080 | 1064 | | 1023was received by the nonprofit corporation pursuant to Subsection 16-6a-702(1)(b); or |
|---|
| 1081 | 1065 | | 1024 [(B)] (ii) the special meeting was not held in accordance with the notice. |
|---|
| 1082 | 1066 | | 1025 (2) If a petition is filed under this section, the court may summarily order the holding |
|---|
| 1083 | 1067 | | 1026of a meeting of the members. |
|---|
| 1086 | 1069 | | 1028 (a) fix the time and place of the meeting; |
|---|
| 1087 | 1070 | | 1029 (b) determine the members entitled to participate in the meeting; |
|---|
| 1088 | 1071 | | 1030 (c) specify a record date for determining members entitled to notice of and to vote at |
|---|
| 1089 | 1072 | | 1031the meeting; |
|---|
| 1090 | 1073 | | 1032 (d) prescribe the form and content of the notice of the meeting; |
|---|
| 1091 | 1074 | | 1033 (e) (i) fix the quorum required for specific matters to be considered at the meeting; or |
|---|
| 1092 | 1075 | | 1034 (ii) direct that the votes represented at the meeting constitute a quorum for action on |
|---|
| 1093 | 1076 | | 1035the specific matters to be considered at the meeting; and |
|---|
| 1094 | 1077 | | 1036 (f) enter other orders necessary or appropriate to accomplish the holding of the |
|---|
| 1095 | 1078 | | 1037meeting. |
|---|
| 1096 | 1079 | | 1038 Section 14. Section 16-6a-710 is amended to read: |
|---|
| 1097 | 1080 | | 1039 16-6a-710. Members' list for meeting and action by written ballot. |
|---|
| 1098 | 1081 | | 1040 (1) (a) Unless otherwise provided by the bylaws, after fixing a record date for a notice |
|---|
| 1099 | 1082 | | 1041of a meeting or for determining the members entitled to take action by written ballot, a |
|---|
| 1100 | 1083 | | 1042nonprofit corporation shall prepare a list of the names of all [its] the nonprofit corporation's |
|---|
| 1101 | 1084 | | 1043members who are: |
|---|
| 1102 | 1085 | | 1044 (i) (A) entitled to notice of the meeting; and |
|---|
| 1103 | 1086 | | 1045 (B) to vote at the meeting; or |
|---|
| 1104 | 1087 | | 1046 (ii) to take the action by written ballot. |
|---|
| 1105 | 1088 | | 1047 (b) The list required by Subsection (1) shall: |
|---|
| 1115 | 1097 | | 1055required by Subsection (1) shall be available for inspection by any member entitled to vote at |
|---|
| 1116 | 1098 | | 1056the meeting: |
|---|
| 1117 | 1099 | | 1057 (i) (A) beginning the earlier of: |
|---|
| 1118 | 1100 | | 1058 (I) 10 days before the meeting for which the list was prepared; or |
|---|
| 1119 | 1101 | | 1059 (II) two business days after notice of the meeting is given; and |
|---|
| 1120 | 1102 | | 1060 (B) continuing through the meeting, and any adjournment of the meeting; and |
|---|
| 1121 | 1103 | | 1061 (ii) (A) at the nonprofit corporation's principal office; or |
|---|
| 1122 | 1104 | | 1062 (B) at a place identified in the notice of the meeting in the city where the meeting will |
|---|
| 1123 | 1105 | | 1063be held. |
|---|
| 1124 | 1106 | | 1064 (b) (i) The nonprofit corporation shall make the members' list required by Subsection |
|---|
| 1125 | 1107 | | 1065(1) available at the meeting. |
|---|
| 1126 | 1108 | | 1066 (ii) Any member entitled to vote at the meeting or an agent or attorney of a member |
|---|
| 1127 | 1109 | | 1067entitled to vote at the meeting is entitled to inspect the members' list at any time during the |
|---|
| 1128 | 1110 | | 1068meeting or any adjournment. |
|---|
| 1129 | 1111 | | 1069 (c) A member entitled to vote at the meeting, or an agent or attorney of a member |
|---|
| 1130 | 1112 | | 1070entitled to vote at the meeting, is entitled on written demand to inspect and, subject to |
|---|
| 1131 | 1113 | | 1071Subsection 16-6a-1602(3) and Subsections 16-6a-1603(2) and (3), to copy a members' list |
|---|
| 1132 | 1114 | | 1072required by Subsection (1): |
|---|
| 1133 | 1115 | | 1073 (i) during: |
|---|
| 1134 | 1116 | | 1074 (A) regular business hours; and |
|---|
| 1135 | 1117 | | 1075 (B) the period it is available for inspection; and |
|---|
| 1136 | 1118 | | 1076 (ii) at the member's expense. |
|---|
| 1137 | 1119 | | 1077 (3) (a) [On application of a] A member of a nonprofit corporation[, the applicable |
|---|
| 1138 | 1120 | | 1078district court may take an action described in Subsection (3)(b)] may petition a court with |
|---|
| 1143 | 1125 | | 1082the members' list during the period [it] the nonprofit corporation is required to be available for |
|---|
| 1144 | 1126 | | 1083inspection under Subsection (2). |
|---|
| 1145 | 1127 | | 1084 (b) [Under Subsection (3)(a), the applicable] If a petition is filed under Subsection |
|---|
| 1146 | 1128 | | 1085(3)(a), the court may: |
|---|
| 1147 | 1129 | | 1086 (i) summarily order the inspection or copying of the members' list at the nonprofit |
|---|
| 1148 | 1130 | | 1087corporation's expense; and |
|---|
| 1149 | 1131 | | 1088 (ii) until the inspection or copying is complete: |
|---|
| 1150 | 1132 | | 1089 (A) postpone or adjourn the meeting for which the members' list was prepared; or |
|---|
| 1151 | 1133 | | 1090 (B) postpone the time when the nonprofit corporation must receive written ballots in |
|---|
| 1152 | 1134 | | 1091connection with which the members' list was prepared. |
|---|
| 1153 | 1135 | | 1092 [(c) For purposes of this Subsection (3), the applicable court is:] |
|---|
| 1154 | 1136 | | 1093 [(i) the district court of the county in this state where the nonprofit corporation's |
|---|
| 1155 | 1137 | | 1094principal office is located; or] |
|---|
| 1156 | 1138 | | 1095 [(ii) if the nonprofit corporation has no principal office in this state, the district court in |
|---|
| 1157 | 1139 | | 1096and for Salt Lake County.] |
|---|
| 1158 | 1140 | | 1097 (4) If a court orders inspection or copying of a members' list pursuant to Subsection |
|---|
| 1159 | 1141 | | 1098(3), unless the nonprofit corporation proves that it refused inspection or copying of the list in |
|---|
| 1160 | 1142 | | 1099good faith because it had a reasonable basis for doubt about the right of the member or the |
|---|
| 1161 | 1143 | | 1100agent or attorney of the member to inspect or copy the members' list: |
|---|
| 1162 | 1144 | | 1101 (a) the court shall order the nonprofit corporation to pay the member's costs, including |
|---|
| 1163 | 1145 | | 1102reasonable counsel fees, incurred in obtaining the order; |
|---|
| 1164 | 1146 | | 1103 (b) the court may order the nonprofit corporation to pay the member for any damages |
|---|
| 1165 | 1147 | | 1104the member incurred; and |
|---|
| 1166 | 1148 | | 1105 (c) the court may grant the member any other remedy afforded the member by law. |
|---|
| 1167 | 1149 | | 1106 (5) If a court orders inspection or copying of a members' list pursuant to Subsection |
|---|
| 1168 | 1150 | | 1107(3), the court may impose reasonable restrictions on the use or distribution of the list by the |
|---|
| 1174 | 1155 | | 1111 Section 15. Section 16-6a-809 is amended to read: |
|---|
| 1175 | 1156 | | 1112 16-6a-809. Removal of directors by judicial proceeding. |
|---|
| 1176 | 1157 | | 1113 (1) (a) [The applicable] A court may remove a director [in a proceeding commenced |
|---|
| 1177 | 1158 | | 1114either], in an action brought by the nonprofit corporation or by voting members holding at least |
|---|
| 1178 | 1159 | | 111510% of the votes entitled to be cast in the election of the director's successor, if the court finds |
|---|
| 1179 | 1160 | | 1116that: |
|---|
| 1180 | 1161 | | 1117 (i) the director engaged in: |
|---|
| 1181 | 1162 | | 1118 (A) fraudulent or dishonest conduct; or |
|---|
| 1182 | 1163 | | 1119 (B) gross abuse of authority or discretion with respect to the nonprofit corporation; or |
|---|
| 1183 | 1164 | | 1120 (ii) (A) a final judgment has been entered finding that the director has violated a duty |
|---|
| 1184 | 1165 | | 1121set forth in Section 16-6a-822; and |
|---|
| 1185 | 1166 | | 1122 (B) removal is in the best interests of the nonprofit corporation. |
|---|
| 1186 | 1167 | | 1123 [(b) For purposes of this Subsection (1), the applicable court is the:] |
|---|
| 1187 | 1168 | | 1124 [(i) district court of the county in this state where a nonprofit corporation's principal |
|---|
| 1188 | 1169 | | 1125office is located; or] |
|---|
| 1189 | 1170 | | 1126 [(ii) if the nonprofit corporation has no principal office in this state:] |
|---|
| 1190 | 1171 | | 1127 [(A) the district court of the county in which its registered office is located; or] |
|---|
| 1191 | 1172 | | 1128 [(B) if the nonprofit corporation has no registered office, the district court for Salt Lake |
|---|
| 1192 | 1173 | | 1129County.] |
|---|
| 1193 | 1174 | | 1130 (2) The court that removes a director may bar the director for a period prescribed by the |
|---|
| 1194 | 1175 | | 1131court from: |
|---|
| 1195 | 1176 | | 1132 (a) reelection; |
|---|
| 1196 | 1177 | | 1133 (b) reappointment; or |
|---|
| 1197 | 1178 | | 1134 (c) designation. |
|---|
| 1206 | 1187 | | 1142carry on any activities except as is appropriate to wind up and liquidate its affairs, including: |
|---|
| 1207 | 1188 | | 1143 (a) collecting its assets; |
|---|
| 1208 | 1189 | | 1144 (b) returning, transferring, or conveying assets held by the nonprofit corporation upon a |
|---|
| 1209 | 1190 | | 1145condition requiring return, transfer, or conveyance, which condition occurs by reason of the |
|---|
| 1210 | 1191 | | 1146dissolution, in accordance with the condition; |
|---|
| 1211 | 1192 | | 1147 (c) transferring, subject to any contractual or legal requirements, its assets as provided |
|---|
| 1212 | 1193 | | 1148in or authorized by its articles of incorporation or bylaws; |
|---|
| 1213 | 1194 | | 1149 (d) discharging or making provision for discharging its liabilities; and |
|---|
| 1214 | 1195 | | 1150 (e) doing every other act necessary to wind up and liquidate its assets and affairs. |
|---|
| 1215 | 1196 | | 1151 (2) Dissolution of a nonprofit corporation does not: |
|---|
| 1216 | 1197 | | 1152 (a) transfer title to the nonprofit corporation's property including title to water rights, |
|---|
| 1217 | 1198 | | 1153water conveyance facilities, or other assets of a nonprofit corporation organized to divert or |
|---|
| 1218 | 1199 | | 1154distribute water to its members; |
|---|
| 1219 | 1200 | | 1155 (b) subject its directors or officers to standards of conduct different from those |
|---|
| 1220 | 1201 | | 1156prescribed in this chapter; |
|---|
| 1221 | 1202 | | 1157 (c) change quorum or voting requirements for its board of directors or members; |
|---|
| 1222 | 1203 | | 1158 (d) change provisions for selection, resignation, or removal of its directors or officers, |
|---|
| 1223 | 1204 | | 1159or both; |
|---|
| 1224 | 1205 | | 1160 (e) change provisions for amending its bylaws or its articles of incorporation; |
|---|
| 1225 | 1206 | | 1161 (f) prevent commencement of a proceeding by or against the nonprofit corporation in |
|---|
| 1239 | 1219 | | 1173that: |
|---|
| 1240 | 1220 | | 1174 (a) the nonprofit corporation obtained [its] the nonprofit corporation's articles of |
|---|
| 1241 | 1221 | | 1175incorporation through fraud; or |
|---|
| 1242 | 1222 | | 1176 (b) the nonprofit corporation has continued to exceed or abuse the authority conferred |
|---|
| 1243 | 1223 | | 1177upon [it] the nonprofit corporation by law. |
|---|
| 1244 | 1224 | | 1178 (2) [A nonprofit corporation may be dissolved in a proceeding by a member or |
|---|
| 1245 | 1225 | | 1179director] A member or director of a nonprofit corporation may bring an action in a court with |
|---|
| 1246 | 1226 | | 1180jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve the nonprofit |
|---|
| 1247 | 1227 | | 1181corporation if it is established that: |
|---|
| 1248 | 1228 | | 1182 (a) (i) the directors are deadlocked in the management of the corporate affairs; |
|---|
| 1249 | 1229 | | 1183 (ii) the members, if any, are unable to break the deadlock; and |
|---|
| 1250 | 1230 | | 1184 (iii) irreparable injury to the nonprofit corporation is threatened or being suffered; |
|---|
| 1251 | 1231 | | 1185 (b) the directors or those in control of the nonprofit corporation have acted, are acting, |
|---|
| 1252 | 1232 | | 1186or will act in a manner that is illegal, oppressive, or fraudulent; |
|---|
| 1253 | 1233 | | 1187 (c) the members are deadlocked in voting power and have failed, for a period that |
|---|
| 1254 | 1234 | | 1188includes at least two consecutive annual meeting dates, to elect successors to directors whose |
|---|
| 1257 | 1236 | | 1190 (d) the corporate assets are being misapplied or wasted. |
|---|
| 1258 | 1237 | | 1191 (3) [A nonprofit corporation may be dissolved in a proceeding by a creditor] A creditor |
|---|
| 1259 | 1238 | | 1192may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 1260 | 1239 | | 1193Administration, to dissolve a nonprofit corporation if it is established that: |
|---|
| 1261 | 1240 | | 1194 (a) (i) the creditor's claim has been reduced to judgment; |
|---|
| 1262 | 1241 | | 1195 (ii) the execution on the judgment has been returned unsatisfied; and |
|---|
| 1263 | 1242 | | 1196 (iii) the nonprofit corporation is insolvent; or |
|---|
| 1264 | 1243 | | 1197 (b) (i) the nonprofit corporation is insolvent; and |
|---|
| 1265 | 1244 | | 1198 (ii) the nonprofit corporation has admitted in writing that the creditor's claim is due and |
|---|
| 1266 | 1245 | | 1199owing. |
|---|
| 1267 | 1246 | | 1200 (4) If an action is brought under this section, it is not necessary to make directors or |
|---|
| 1268 | 1247 | | 1201members parties to the action to dissolve the nonprofit corporation unless relief is sought |
|---|
| 1269 | 1248 | | 1202against the members individually. |
|---|
| 1271 | 1251 | | 1204 (a) issue injunctions; |
|---|
| 1272 | 1252 | | 1205 (b) appoint a receiver or a custodian pendente lite with all powers and duties the court |
|---|
| 1273 | 1253 | | 1206directs; or |
|---|
| 1274 | 1254 | | 1207 (c) take other action required to preserve the nonprofit corporation's assets wherever |
|---|
| 1275 | 1255 | | 1208located and carry on the business of the nonprofit corporation until a full hearing can be held. |
|---|
| 1276 | 1256 | | 1209 [(4)] (6) [(a)] If a nonprofit corporation has been dissolved by voluntary or |
|---|
| 1277 | 1257 | | 1210administrative action taken under this part: |
|---|
| 1278 | 1258 | | 1211 [(i)] (a) the nonprofit corporation may bring a proceeding to wind up and liquidate its |
|---|
| 1279 | 1259 | | 1212business and affairs under judicial supervision in accordance with Section 16-6a-1405; and |
|---|
| 1280 | 1260 | | 1213 [(ii)] (b) the attorney general, a director, a member, or a creditor may bring a |
|---|
| 1281 | 1261 | | 1214proceeding to wind up and liquidate the affairs of the nonprofit corporation under judicial |
|---|
| 1282 | 1262 | | 1215supervision in accordance with Section 16-6a-1405, upon establishing the grounds set forth in |
|---|
| 1286 | 1264 | | 1217 [(b) As used in Sections 16-6a-1415 through 16-6a-1417:] |
|---|
| 1287 | 1265 | | 1218 [(i) a "judicial proceeding to dissolve the nonprofit corporation" includes a proceeding |
|---|
| 1288 | 1266 | | 1219brought under this Subsection (4); and] |
|---|
| 1289 | 1267 | | 1220 [(ii) a "decree of dissolution" includes an order of a court entered in a proceeding under |
|---|
| 1290 | 1268 | | 1221this Subsection (4) that directs that the affairs of a nonprofit corporation shall be wound up and |
|---|
| 1291 | 1269 | | 1222liquidated under judicial supervision.] |
|---|
| 1292 | 1270 | | 1223 Section 18. Section 16-6a-1416 is amended to read: |
|---|
| 1293 | 1271 | | 1224 16-6a-1416. Receivership or custodianship. |
|---|
| 1294 | 1272 | | 1225 (1) As used in this section: |
|---|
| 1295 | 1273 | | 1226 (a) "Decree of dissolution" includes an order of a court entered in a proceeding under |
|---|
| 1296 | 1274 | | 1227Subsection 16-6a-1414(4) that directs that the affairs of a nonprofit corporation be wound up |
|---|
| 1297 | 1275 | | 1228and liquidated under judicial supervision. |
|---|
| 1298 | 1276 | | 1229 (b) "Judicial proceeding to dissolve the nonprofit corporation" includes a proceeding |
|---|
| 1299 | 1277 | | 1230brought under Subsection 16-6a-1414(4). |
|---|
| 1300 | 1278 | | 1231 [(1)] (2) (a) A court in a judicial proceeding brought to dissolve a nonprofit corporation |
|---|
| 1301 | 1279 | | 1232may appoint: |
|---|
| 1302 | 1280 | | 1233 (i) one or more receivers to wind up and liquidate the affairs of the nonprofit |
|---|
| 1314 | 1292 | | 1244 (ii) a domestic or foreign corporation authorized to conduct affairs in this state; or |
|---|
| 1315 | 1293 | | 1245 (iii) a domestic or foreign nonprofit corporation authorized to conduct affairs in this |
|---|
| 1316 | 1294 | | 1246state. |
|---|
| 1317 | 1295 | | 1247 (e) The court may require the receiver or custodian to post bond, with or without |
|---|
| 1318 | 1296 | | 1248sureties, in an amount specified by the court. |
|---|
| 1319 | 1297 | | 1249 [(2)] (3) The court shall describe the powers and duties of the receiver or custodian in |
|---|
| 1320 | 1298 | | 1250its appointing order that may be amended from time to time. Among other powers the receiver |
|---|
| 1321 | 1299 | | 1251shall have the power to: |
|---|
| 1322 | 1300 | | 1252 (a) dispose of all or any part of the property of the nonprofit corporation, wherever |
|---|
| 1323 | 1301 | | 1253located: |
|---|
| 1324 | 1302 | | 1254 (i) at a public or private sale; and |
|---|
| 1325 | 1303 | | 1255 (ii) if authorized by the court; and |
|---|
| 1326 | 1304 | | 1256 (b) sue and defend in the receiver's own name as receiver of the nonprofit corporation |
|---|
| 1327 | 1305 | | 1257in all courts. |
|---|
| 1328 | 1306 | | 1258 [(3)] (4) The custodian may exercise all of the powers of the nonprofit corporation, |
|---|
| 1329 | 1307 | | 1259through or in place of its board of directors or officers, to the extent necessary to manage the |
|---|
| 1330 | 1308 | | 1260affairs of the nonprofit corporation in the best interests of its members and creditors. |
|---|
| 1331 | 1309 | | 1261 [(4)] (5) If doing so is in the best interests of the nonprofit corporation and its members |
|---|
| 1332 | 1310 | | 1262and creditors, the court may: |
|---|
| 1333 | 1311 | | 1263 (a) during a receivership, redesignate the receiver as a custodian; and |
|---|
| 1334 | 1312 | | 1264 (b) during a custodianship, redesignate the custodian as a receiver. |
|---|
| 1343 | 1320 | | 1271 Section 19. Section 16-6a-1417 is amended to read: |
|---|
| 1344 | 1321 | | 1272 16-6a-1417. Decree of dissolution. |
|---|
| 1345 | 1322 | | 1273 (1) As used in this section: |
|---|
| 1346 | 1323 | | 1274 (a) "Decree of dissolution" includes an order of a court entered in a proceeding under |
|---|
| 1347 | 1324 | | 1275Subsection 16-6a-1414(4) that directs that the affairs of a nonprofit corporation be wound up |
|---|
| 1348 | 1325 | | 1276and liquidated under judicial supervision. |
|---|
| 1349 | 1326 | | 1277 (b) "Judicial proceeding to dissolve the nonprofit corporation" includes a proceeding |
|---|
| 1350 | 1327 | | 1278brought under Subsection 16-6a-1414(4). |
|---|
| 1351 | 1328 | | 1279 [(1)] (2) If after a hearing the court determines that one or more grounds for judicial |
|---|
| 1352 | 1329 | | 1280dissolution described in Section 16-6a-1414 exist: |
|---|
| 1353 | 1330 | | 1281 (a) the court may enter a decree: |
|---|
| 1354 | 1331 | | 1282 (i) dissolving the nonprofit corporation; and |
|---|
| 1355 | 1332 | | 1283 (ii) specifying the effective date of the dissolution; and |
|---|
| 1356 | 1333 | | 1284 (b) the clerk of the court shall deliver a certified copy of the decree to the division |
|---|
| 1357 | 1334 | | 1285which shall file it accordingly. |
|---|
| 1358 | 1335 | | 1286 [(2)] (3) After entering the decree of dissolution, the court shall direct: |
|---|
| 1359 | 1336 | | 1287 (a) the winding up and liquidation of the nonprofit corporation's affairs in accordance |
|---|
| 1360 | 1337 | | 1288with Section 16-6a-1405; and |
|---|
| 1361 | 1338 | | 1289 (b) the giving of notice to: |
|---|
| 1362 | 1339 | | 1290 (i) (A) the nonprofit corporation's registered agent; or |
|---|
| 1363 | 1340 | | 1291 (B) the division if it has no registered agent; and |
|---|
| 1364 | 1341 | | 1292 (ii) to claimants in accordance with Sections 16-6a-1406 and 16-6a-1407. |
|---|
| 1365 | 1342 | | 1293 [(3)] (4) The court's order or decision may be appealed as in other civil proceedings. |
|---|
| 1366 | 1343 | | 1294 Section 20. Section 16-6a-1604 is amended to read: |
|---|
| 1367 | 1344 | | 1295 16-6a-1604. Court-ordered inspection of corporate records. |
|---|
| 1371 | 1348 | | 1298nonprofit corporation if: |
|---|
| 1372 | 1349 | | 1299 (i) [a] the nonprofit corporation refuses to allow a director or member, or the director's |
|---|
| 1373 | 1350 | | 1300or member's agent or attorney, to inspect or copy any records that the director or member is |
|---|
| 1374 | 1351 | | 1301entitled to inspect or copy under Subsection 16-6a-1602(1); and |
|---|
| 1375 | 1352 | | 1302 (ii) the director or member complies with Subsection 16-6a-1602(1). |
|---|
| 1376 | 1353 | | 1303 (b) [If petitioned] If a petition is filed under Subsection (1)(a), the court may |
|---|
| 1377 | 1354 | | 1304summarily order the inspection or copying of the records demanded at the nonprofit |
|---|
| 1378 | 1355 | | 1305corporation's expense on an expedited basis. |
|---|
| 1379 | 1356 | | 1306 (2) (a) A director or member may [petition the applicable court] bring a petition in a |
|---|
| 1380 | 1357 | | 1307court with jurisdiction under Title 78A, Judiciary and Judicial Administration, against a |
|---|
| 1381 | 1358 | | 1308nonprofit corporation if: |
|---|
| 1382 | 1359 | | 1309 (i) [a] the nonprofit corporation refuses to allow a director or member, or the director's |
|---|
| 1383 | 1360 | | 1310or member's agent or attorney, to inspect or copy any records that the director or member is |
|---|
| 1384 | 1361 | | 1311entitled to inspect or copy pursuant to Subsections 16-6a-1602(2) and (3) within a reasonable |
|---|
| 1385 | 1362 | | 1312time following the director's or member's demand; and |
|---|
| 1386 | 1363 | | 1313 (ii) the director or member complies with Subsections 16-6a-1602(2) and (3). |
|---|
| 1387 | 1364 | | 1314 (b) [If the court is petitioned] If a petition is brought under Subsection (2)(a), the court |
|---|
| 1388 | 1365 | | 1315may summarily order the inspection or copying of the records demanded. |
|---|
| 1389 | 1366 | | 1316 (3) If a court orders inspection or copying of the records demanded under Subsection |
|---|
| 1390 | 1367 | | 1317(1) or (2), unless the nonprofit corporation proves that [it] the nonprofit corporation refused |
|---|
| 1391 | 1368 | | 1318inspection or copying in good faith because [it] the nonprofit corporation had a reasonable |
|---|
| 1392 | 1369 | | 1319basis for doubt about the right of the director or member, or the director's or member's agent or |
|---|
| 1393 | 1370 | | 1320attorney, to inspect or copy the records demanded: |
|---|
| 1394 | 1371 | | 1321 (a) the court shall also order the nonprofit corporation to pay the director's or member's |
|---|
| 1395 | 1372 | | 1322costs, including reasonable counsel fees, incurred to obtain the order; |
|---|
| 1396 | 1373 | | 1323 (b) the court may order the nonprofit corporation to pay the director or member for any |
|---|
| 1403 | 1379 | | 1328 (d) the court may grant the director or member any other remedy provided by law. |
|---|
| 1404 | 1380 | | 1329 (4) If a court orders inspection or copying of records demanded, [it] the court may |
|---|
| 1405 | 1381 | | 1330impose reasonable restrictions on the use or distribution of the records by the demanding |
|---|
| 1406 | 1382 | | 1331director or member. |
|---|
| 1407 | 1383 | | 1332 [(5) For purposes of this section, the applicable court is:] |
|---|
| 1408 | 1384 | | 1333 [(a) the district court of the county in this state where the nonprofit corporation's |
|---|
| 1409 | 1385 | | 1334principal office is located; or] |
|---|
| 1410 | 1386 | | 1335 [(b) if the nonprofit corporation has no principal office in this state, the district court in |
|---|
| 1411 | 1387 | | 1336and for Salt Lake County.] |
|---|
| 1412 | 1388 | | 1337 Section 21. Section 16-6a-1609 is amended to read: |
|---|
| 1413 | 1389 | | 1338 16-6a-1609. Interrogatories by division. |
|---|
| 1414 | 1390 | | 1339 (1) (a) The division may give interrogatories reasonably necessary to ascertain whether |
|---|
| 1415 | 1391 | | 1340a nonprofit corporation has complied with the provisions of this chapter applicable to the |
|---|
| 1416 | 1392 | | 1341nonprofit corporation to: |
|---|
| 1417 | 1393 | | 1342 (i) any domestic or foreign nonprofit corporation subject to the provisions of this |
|---|
| 1418 | 1394 | | 1343chapter; and |
|---|
| 1419 | 1395 | | 1344 (ii) to any officer or director of a nonprofit corporation described in Subsection |
|---|
| 1420 | 1396 | | 1345(1)(a)(i). |
|---|
| 1421 | 1397 | | 1346 (b) The interrogatories described in this Subsection (1) shall be answered within: |
|---|
| 1422 | 1398 | | 1347 (i) 30 days after the mailing of the interrogatories; or |
|---|
| 1423 | 1399 | | 1348 (ii) additional time as fixed by the division. |
|---|
| 1424 | 1400 | | 1349 (c) The answers to the interrogatories shall be: |
|---|
| 1425 | 1401 | | 1350 (i) full and complete; and |
|---|
| 1435 | 1411 | | 1359corporation's agent. |
|---|
| 1436 | 1412 | | 1360 (e) (i) The division need not file any document to which the interrogatories relate until |
|---|
| 1437 | 1413 | | 1361the interrogatories are answered as provided in this section. |
|---|
| 1438 | 1414 | | 1362 (ii) Notwithstanding Subsection (1)(e)(i), the division need not file a document to |
|---|
| 1439 | 1415 | | 1363which the interrogatory relates if the answers to the interrogatory disclose that the document is |
|---|
| 1440 | 1416 | | 1364not in conformity with the provisions of this chapter. |
|---|
| 1441 | 1417 | | 1365 (f) The division shall certify to the attorney general, for such action as the attorney |
|---|
| 1442 | 1418 | | 1366general considers appropriate, all interrogatories and answers to interrogatories that disclose a |
|---|
| 1443 | 1419 | | 1367violation of this chapter. |
|---|
| 1444 | 1420 | | 1368 (2) (a) Interrogatories given by the division under Subsection (1), and the answers to |
|---|
| 1445 | 1421 | | 1369interrogatories, may not be open to public inspection. |
|---|
| 1446 | 1422 | | 1370 (b) The division may not disclose any facts or information obtained from the |
|---|
| 1447 | 1423 | | 1371interrogatories or answers to the interrogatories, except: |
|---|
| 1448 | 1424 | | 1372 (i) as the official duties of the division may require the facts or information to be made |
|---|
| 1449 | 1425 | | 1373public; or |
|---|
| 1450 | 1426 | | 1374 (ii) in the event the interrogatories or the answers to the interrogatories are required for |
|---|
| 1451 | 1427 | | 1375evidence in any criminal proceedings or in any other action by this state. |
|---|
| 1452 | 1428 | | 1376 (3) Each domestic or foreign nonprofit corporation that knowingly fails or refuses to |
|---|
| 1453 | 1429 | | 1377answer truthfully and fully, within the time prescribed by Subsection (1), interrogatories given |
|---|
| 1457 | 1431 | | 1379(1) is guilty of a class C misdemeanor and, upon conviction, shall be punished by a fine of not |
|---|
| 1458 | 1432 | | 1380more than $500. |
|---|
| 1459 | 1433 | | 1381 (4) Each officer and director of a domestic or foreign nonprofit corporation who |
|---|
| 1460 | 1434 | | 1382knowingly fails or refuses to answer truthfully and fully, within the time prescribed by |
|---|
| 1461 | 1435 | | 1383Subsection (1), interrogatories given to the officer or director by the division in accordance |
|---|
| 1462 | 1436 | | 1384with Subsection (1) is guilty of a class B misdemeanor and, upon conviction, shall be punished |
|---|
| 1463 | 1437 | | 1385by a fine of not more than $1,000. |
|---|
| 1464 | 1438 | | 1386 (5) The attorney general may enforce this section [in an action brought in:] by bringing |
|---|
| 1465 | 1439 | | 1387an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration. |
|---|
| 1466 | 1440 | | 1388 [(a) the district court of the county in this state where the nonprofit corporation's |
|---|
| 1468 | 1443 | | 1390 [(b) if the nonprofit corporation has no principal or registered office in this state, in the |
|---|
| 1469 | 1444 | | 1391district court in and for Salt Lake County.] |
|---|
| 1470 | 1445 | | 1392 Section 22. Section 16-10a-126 is amended to read: |
|---|
| 1471 | 1446 | | 1393 16-10a-126. Petition for review of division's refusal to file document. |
|---|
| 1472 | 1447 | | 1394 (1) (a) If the division refuses to file a document delivered to [it] the division for filing, |
|---|
| 1473 | 1448 | | 1395the domestic or foreign corporation for which the filing was requested, or [its representative, |
|---|
| 1474 | 1449 | | 1396within 30 days after the effective date of the notice of refusal given by the division pursuant to |
|---|
| 1475 | 1450 | | 1397Subsection 16-10a-125(3), may appeal the refusal to the district court of the county where the |
|---|
| 1476 | 1451 | | 1398corporation's principal office is or will be located, or if there is none in this state, the county |
|---|
| 1477 | 1452 | | 1399where its registered office is or will be located] the corporation's representative, may petition a |
|---|
| 1478 | 1453 | | 1400court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to compel the |
|---|
| 1479 | 1454 | | 1401filing of the document. |
|---|
| 1480 | 1455 | | 1402 (b) A domestic or foreign corporation, or the corporation's representative, shall file a |
|---|
| 1481 | 1456 | | 1403petition under Subsection (1)(a) within 30 days after the day on which the division gives notice |
|---|
| 1482 | 1457 | | 1404of the refusal under Subsection 16-10a-125(3). |
|---|
| 1485 | 1459 | | 1406document and by attaching to the petition] petition under Subsection (1)(a) shall include a copy |
|---|
| 1486 | 1460 | | 1407of the document and the division's notice of refusal. |
|---|
| 1487 | 1461 | | 1408 (2) [The] If a petition is filed under Subsection (1), the court may summarily order the |
|---|
| 1488 | 1462 | | 1409division to file the document or take other action the court considers appropriate. |
|---|
| 1489 | 1463 | | 1410 (3) The court's final decision [may be appealed] is appealable as in any other civil |
|---|
| 1490 | 1464 | | 1411proceedings. |
|---|
| 1491 | 1465 | | 1412 Section 23. Section 16-10a-303 is amended to read: |
|---|
| 1492 | 1466 | | 1413 16-10a-303. Ultra vires. |
|---|
| 1493 | 1467 | | 1414 (1) Except as provided in Subsection (2), the validity of corporate action may not be |
|---|
| 1494 | 1468 | | 1415challenged on the ground that the corporation lacks or lacked power to act. |
|---|
| 1495 | 1469 | | 1416 (2) A corporation's power to act may be challenged: |
|---|
| 1496 | 1470 | | 1417 (a) in [a proceeding] an action by a shareholder against the corporation to enjoin the |
|---|
| 1497 | 1471 | | 1418act; |
|---|
| 1498 | 1472 | | 1419 (b) in [a proceeding] an action by the corporation, directly, derivatively, or through a |
|---|
| 1500 | 1475 | | 1421employee, or agent of the corporation; or |
|---|
| 1501 | 1476 | | 1422 (c) in [a proceeding] an action by the attorney general under Section 16-10a-1430. |
|---|
| 1502 | 1477 | | 1423 (3) In a shareholder's [proceeding] action under Subsection (2)(a) to enjoin an |
|---|
| 1503 | 1478 | | 1424unauthorized corporate act, the court may enjoin or set aside the act, if equitable and if all |
|---|
| 1504 | 1479 | | 1425affected persons are parties to the proceeding, and may award damages for loss, other than |
|---|
| 1505 | 1480 | | 1426anticipated profits, suffered by the corporation or another party because of enjoining the |
|---|
| 1506 | 1481 | | 1427unauthorized act. |
|---|
| 1507 | 1482 | | 1428 Section 24. Section 16-10a-703 is amended to read: |
|---|
| 1508 | 1483 | | 1429 16-10a-703. Court-ordered meeting. |
|---|
| 1509 | 1484 | | 1430 (1) [The district court of the county in this state where a corporation's principal office |
|---|
| 1510 | 1485 | | 1431is located or, if it has no principal office in this state, the district court for Salt Lake County] A |
|---|
| 1514 | 1487 | | 1433 (a) [on application of any] upon a petition by a shareholder of the corporation entitled |
|---|
| 1515 | 1488 | | 1434to participate in an annual meeting or any director of the corporation, if an annual meeting was |
|---|
| 1516 | 1489 | | 1435not held within 15 months after its last annual meeting, or if there has been no annual meeting, |
|---|
| 1517 | 1490 | | 1436the date of incorporation; or |
|---|
| 1518 | 1491 | | 1437 (b) [on application of any person] upon a petition by a person who participated in a call |
|---|
| 1519 | 1492 | | 1438of or demand for a special meeting effective under Subsection 16-10a-702(1), if: |
|---|
| 1520 | 1493 | | 1439 (i) notice of the special meeting was not given within 60 days after the date of the call |
|---|
| 1521 | 1494 | | 1440or the date the last of the demands necessary to require the calling of the meeting was delivered |
|---|
| 1522 | 1495 | | 1441to the corporation pursuant to Subsection 16-10a-702(1)(b), as the case may be; or |
|---|
| 1523 | 1496 | | 1442 (ii) the special meeting was not held in accordance with the notice. |
|---|
| 1524 | 1497 | | 1443 (2) The court may fix the time and place of the meeting, state whether or not it is an |
|---|
| 1525 | 1498 | | 1444annual or special meeting, determine the shares entitled to participate in the meeting, specify a |
|---|
| 1526 | 1499 | | 1445record date for determining shareholders entitled to notice of and to vote at the meeting, |
|---|
| 1527 | 1500 | | 1446prescribe the form and content of the meeting notice, fix the quorum required for specific |
|---|
| 1528 | 1501 | | 1447matters to be considered at the meeting, or direct that the votes represented at the meeting |
|---|
| 1529 | 1502 | | 1448constitute a quorum for action on those matters, and enter other orders necessary or appropriate |
|---|
| 1530 | 1503 | | 1449to accomplish the purpose or purposes of holding the meeting. |
|---|
| 1531 | 1504 | | 1450 Section 25. Section 16-10a-720 is amended to read: |
|---|
| 1542 | 1515 | | 1460beginning on the earlier of 10 days before the meeting for which the list was prepared or two |
|---|
| 1543 | 1516 | | 1461business days after notice of the meeting is given and continuing through the meeting and any |
|---|
| 1544 | 1517 | | 1462meeting adjournments, at the corporation's principal office or at a place identified in the |
|---|
| 1545 | 1518 | | 1463meeting notice in the city where the meeting will be held. |
|---|
| 1546 | 1519 | | 1464 (b) A shareholder or a shareholder's agent or attorney is entitled on written demand to |
|---|
| 1547 | 1520 | | 1465the corporation and, subject to the requirements of Subsections 16-10a-1602(3) and (7), and the |
|---|
| 1548 | 1521 | | 1466provisions of Subsections 16-10a-1603(2) and (3), to inspect and copy the list, during regular |
|---|
| 1549 | 1522 | | 1467business hours and during the period [it] the list is available for inspection. |
|---|
| 1550 | 1523 | | 1468 (3) The corporation shall make the shareholders' list available at the meeting, and any |
|---|
| 1551 | 1524 | | 1469shareholder, or any shareholder's agent or attorney is entitled to inspect the list at any time |
|---|
| 1552 | 1525 | | 1470during the meeting or any adjournment, for any purposes germane to the meeting. |
|---|
| 1553 | 1526 | | 1471 (4) If the corporation refuses to allow a shareholder, or the shareholder's agent or |
|---|
| 1554 | 1527 | | 1472attorney, to inspect the shareholders' list before or at the meeting, or to copy the list as |
|---|
| 1555 | 1528 | | 1473permitted by Subsection (2), [the district court of the county where a corporation's principal |
|---|
| 1556 | 1529 | | 1474office is located, or, if it has none in this state, the district court for Salt Lake County, on |
|---|
| 1557 | 1530 | | 1475application of the shareholder, may] a court may, upon the petition of a shareholder: |
|---|
| 1558 | 1531 | | 1476 (a) summarily order the inspection or copying at the corporation's expense [and may]; |
|---|
| 1559 | 1532 | | 1477and |
|---|
| 1560 | 1533 | | 1478 (b) postpone the meeting for which the list was prepared until the inspection or copying |
|---|
| 1561 | 1534 | | 1479is complete. |
|---|
| 1562 | 1535 | | 1480 (5) If a court orders inspection or copying of the shareholders' list pursuant to |
|---|
| 1563 | 1536 | | 1481Subsection (4), unless the corporation proves that [it] the corporation refused inspection or |
|---|
| 1571 | 1543 | | 1487 (b) the court may order the corporation to pay the shareholder for any damages |
|---|
| 1572 | 1544 | | 1488incurred; and |
|---|
| 1573 | 1545 | | 1489 (c) the court may grant the shareholder any other remedy afforded by law. |
|---|
| 1574 | 1546 | | 1490 (6) If a court orders inspection or copying of the shareholders' list pursuant to |
|---|
| 1575 | 1547 | | 1491Subsection (4), the court may impose reasonable restrictions on the use or distribution of the |
|---|
| 1576 | 1548 | | 1492list by the shareholder. |
|---|
| 1577 | 1549 | | 1493 (7) Refusal or failure to prepare or make available the shareholders' list does not affect |
|---|
| 1578 | 1550 | | 1494the validity of action taken at the meeting. |
|---|
| 1579 | 1551 | | 1495 Section 26. Section 16-10a-1330 is amended to read: |
|---|
| 1580 | 1552 | | 1496 16-10a-1330. Judicial appraisal of shares -- Court action. |
|---|
| 1581 | 1553 | | 1497 (1) (a) If a demand for payment under Section 16-10a-1328 remains unresolved, the |
|---|
| 1582 | 1554 | | 1498corporation shall [commence a proceeding] bring an action in a court with jurisdiction under |
|---|
| 1583 | 1555 | | 1499Title 78A, Judiciary and Judicial Administration, within 60 days after receiving the payment |
|---|
| 1584 | 1556 | | 1500demand contemplated by Section 16-10a-1328, [and petition] for the court to determine the fair |
|---|
| 1585 | 1557 | | 1501value of the shares and the amount of interest. |
|---|
| 1586 | 1558 | | 1502 (b) If the corporation does not [commence the proceeding] bring an action within the |
|---|
| 1587 | 1559 | | 150360-day period, [it] the corporation shall pay each dissenter whose demand remains unresolved |
|---|
| 1588 | 1560 | | 1504the amount demanded. |
|---|
| 1589 | 1561 | | 1505 [(2) The corporation shall commence the proceeding described in Subsection (1) in the |
|---|
| 1590 | 1562 | | 1506district court of the county in this state where the corporation's principal office, or if it has no |
|---|
| 1591 | 1563 | | 1507principal office in this state, Salt Lake County. If the corporation is a foreign corporation, it |
|---|
| 1592 | 1564 | | 1508shall commence the proceeding in the county in this state where the principal office of the |
|---|
| 1593 | 1565 | | 1509domestic corporation merged with, or whose shares were acquired by, the foreign corporation |
|---|
| 1594 | 1566 | | 1510was located, or, if the domestic corporation did not have its principal office in this state at the |
|---|
| 1595 | 1567 | | 1511time of the transaction, in Salt Lake County.] |
|---|
| 1596 | 1568 | | 1512 [(3)] (2) (a) The corporation shall make all dissenters who have satisfied the |
|---|
| 1599 | 1571 | | 1514residents of this state whose demands remain unresolved, parties to the [proceeding |
|---|
| 1600 | 1572 | | 1515commenced] action brought under Subsection [(2)] (1) as an action against their shares. |
|---|
| 1601 | 1573 | | 1516 (b) All such dissenters who are named as parties shall be served with a copy of the |
|---|
| 1602 | 1574 | | 1517[petition] complaint. |
|---|
| 1603 | 1575 | | 1518 (c) (i) Service on each dissenter may be by registered or certified mail to the address |
|---|
| 1604 | 1576 | | 1519stated in [his] the dissenter's payment demand made pursuant to Section 16-10a-1328. |
|---|
| 1605 | 1577 | | 1520 (ii) If no address is stated in the payment demand, service may be made at the address |
|---|
| 1606 | 1578 | | 1521stated in the payment demand given pursuant to Section 16-10a-1323. |
|---|
| 1607 | 1579 | | 1522 (iii) If no address is stated in the payment demand, service may be made at the address |
|---|
| 1608 | 1580 | | 1523shown on the corporation's current record of shareholders for the record shareholder holding |
|---|
| 1609 | 1581 | | 1524the dissenter's shares. |
|---|
| 1610 | 1582 | | 1525 (iv) Service may also be made otherwise as provided by law. |
|---|
| 1611 | 1583 | | 1526 [(4)] (3) (a) The jurisdiction of the court in which the [proceeding is commenced] |
|---|
| 1612 | 1584 | | 1527action filed under Subsection [(2)] (1) is plenary and exclusive. |
|---|
| 1613 | 1585 | | 1528 (b) The court may appoint one or more persons as appraisers to receive evidence and |
|---|
| 1614 | 1586 | | 1529recommend decision on the question of fair value. |
|---|
| 1615 | 1587 | | 1530 (c) The appraisers have the powers described in the order appointing them, or in any |
|---|
| 1616 | 1588 | | 1531amendment to it. |
|---|
| 1617 | 1589 | | 1532 (d) The dissenters are entitled to the same discovery rights as parties in other civil |
|---|
| 1618 | 1590 | | 1533proceedings. |
|---|
| 1619 | 1591 | | 1534 [(5)] (4) Each dissenter made a party to the [proceeding commenced] action filed under |
|---|
| 1620 | 1592 | | 1535Subsection [(2)] (1) is entitled to judgment: |
|---|
| 1621 | 1593 | | 1536 (a) for the amount, if any, by which the court finds that the fair value of [his] the |
|---|
| 1622 | 1594 | | 1537dissenter's shares, plus interest, exceeds the amount paid by the corporation pursuant to Section |
|---|
| 1623 | 1595 | | 153816-10a-1325; or |
|---|
| 1624 | 1596 | | 1539 (b) for the fair value, plus interest, of the dissenter's after-acquired shares for which the |
|---|
| 1632 | 1603 | | 1545with jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve a |
|---|
| 1633 | 1604 | | 1546corporation if it is established that: |
|---|
| 1634 | 1605 | | 1547 (a) the corporation obtained its articles of incorporation through fraud; or |
|---|
| 1635 | 1606 | | 1548 (b) the corporation has continued to exceed or abuse the authority conferred upon [it] |
|---|
| 1636 | 1607 | | 1549the corporation by law. |
|---|
| 1637 | 1608 | | 1550 (2) [A corporation may be dissolved in a proceeding by a shareholder] A shareholder |
|---|
| 1638 | 1609 | | 1551may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 1639 | 1610 | | 1552Administration, to dissolve a corporation if it is established that: |
|---|
| 1640 | 1611 | | 1553 (a) the directors are deadlocked in the management of the corporate affairs, the |
|---|
| 1641 | 1612 | | 1554shareholders are unable to break the deadlock, irreparable injury to the corporation is |
|---|
| 1642 | 1613 | | 1555threatened or being suffered, or the business and affairs of the corporation can no longer be |
|---|
| 1643 | 1614 | | 1556conducted to the advantage of the shareholders generally, because of the deadlock; |
|---|
| 1644 | 1615 | | 1557 (b) the directors or those in control of the corporation have acted, are acting, or will act |
|---|
| 1645 | 1616 | | 1558in a manner that is illegal, oppressive, or fraudulent; |
|---|
| 1646 | 1617 | | 1559 (c) the shareholders are deadlocked in voting power and have failed, for a period that |
|---|
| 1647 | 1618 | | 1560includes at least two consecutive annual meeting dates, to elect successors to directors whose |
|---|
| 1648 | 1619 | | 1561terms have expired or would have expired upon the election of their successors; or |
|---|
| 1649 | 1620 | | 1562 (d) the corporate assets are being misapplied or wasted. |
|---|
| 1650 | 1621 | | 1563 (3) [A corporation may be dissolved in a proceeding by a creditor] A creditor may |
|---|
| 1651 | 1622 | | 1564bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 1652 | 1623 | | 1565Administration, to dissolve a corporation if it is established that: |
|---|
| 1653 | 1624 | | 1566 (a) the creditor's claim has been reduced to judgment, the execution on the judgment |
|---|
| 1664 | 1635 | | 1576 (6) In a proceeding under this section, a court may: |
|---|
| 1665 | 1636 | | 1577 (a) issue injunctions; |
|---|
| 1666 | 1637 | | 1578 (b) appoint a receiver or custodian pendente lite with all powers and duties the court |
|---|
| 1667 | 1638 | | 1579directs; or |
|---|
| 1668 | 1639 | | 1580 (c) take other action required to preserve the corporate assets wherever located and |
|---|
| 1669 | 1640 | | 1581carry on the business of the corporation until a full hearing can be held. |
|---|
| 1670 | 1641 | | 1582 Section 28. Section 16-10a-1434 is amended to read: |
|---|
| 1671 | 1642 | | 1583 16-10a-1434. Election to purchase in lieu of dissolution. |
|---|
| 1672 | 1643 | | 1584 (1) In [a proceeding] an action under Subsection 16-10a-1430(2) to dissolve a |
|---|
| 1673 | 1644 | | 1585corporation that has no shares listed on a national securities exchange or regularly traded in a |
|---|
| 1674 | 1645 | | 1586market maintained by one or more members of a national or affiliated securities association, |
|---|
| 1675 | 1646 | | 1587the corporation may elect, or if it fails to elect, one or more shareholders may elect to purchase |
|---|
| 1676 | 1647 | | 1588all shares of the corporation owned by the petitioning shareholder, at the fair value of the |
|---|
| 1677 | 1648 | | 1589shares, determined as provided in this section. An election pursuant to this section is |
|---|
| 1678 | 1649 | | 1590irrevocable unless the court determines that it is equitable to set aside or modify the election. |
|---|
| 1679 | 1650 | | 1591 (2) (a) An election to purchase pursuant to this section may be filed with the court at |
|---|
| 1680 | 1651 | | 1592any time within 90 days after the filing of the [petition] action under Subsection |
|---|
| 1681 | 1652 | | 159316-10a-1430(2) or at any later time as the court in its discretion may allow. If the corporation |
|---|
| 1685 | 1654 | | 1595court, to purchase all shares of the corporation owned by the petitioning shareholder, the |
|---|
| 1686 | 1655 | | 1596corporation shall purchase the shares in the manner provided in this section. |
|---|
| 1687 | 1656 | | 1597 (b) If the corporation does not file an election with the court within the time period, but |
|---|
| 1688 | 1657 | | 1598an election to purchase all shares of the corporation owned by the petitioning shareholder is |
|---|
| 1689 | 1658 | | 1599filed by one or more shareholders within the time period, the corporation shall, within 10 days |
|---|
| 1690 | 1659 | | 1600after the later of: |
|---|
| 1691 | 1660 | | 1601 (i) the end of the time period allowed for the filing of elections to purchase under this |
|---|
| 1692 | 1661 | | 1602section; or |
|---|
| 1693 | 1662 | | 1603 (ii) notification from the court of an election by shareholders to purchase all shares of |
|---|
| 1694 | 1663 | | 1604the corporation owned by the petitioning shareholder as provided in this section, give written |
|---|
| 1695 | 1664 | | 1605notice of the election to purchase to all shareholders of the corporation, other than the |
|---|
| 1697 | 1667 | | 1607petitioning shareholder and the name and number of shares owned by each electing |
|---|
| 1698 | 1668 | | 1608shareholder. The notice shall advise any recipients who have not participated in the election of |
|---|
| 1699 | 1669 | | 1609their right to join in the election to purchase shares in accordance with this section, and of the |
|---|
| 1700 | 1670 | | 1610date by which any notice of intent to participate must be filed with the court. |
|---|
| 1701 | 1671 | | 1611 (c) Shareholders who wish to participate in the purchase of shares from the petitioning |
|---|
| 1702 | 1672 | | 1612shareholder shall file notice of their intention to join in the purchase by the electing |
|---|
| 1703 | 1673 | | 1613shareholders, no later than 30 days after the effective date of the corporation's notice of their |
|---|
| 1704 | 1674 | | 1614right to join in the election to purchase. |
|---|
| 1705 | 1675 | | 1615 (d) All shareholders who have filed with the court an election or notice of their |
|---|
| 1706 | 1676 | | 1616intention to participate in the election to purchase the shares of the corporation owned by the |
|---|
| 1707 | 1677 | | 1617petitioning shareholder thereby become irrevocably obligated to participate in the purchase of |
|---|
| 1708 | 1678 | | 1618shares from the petitioning shareholders upon the terms and conditions of this section, unless |
|---|
| 1709 | 1679 | | 1619the court otherwise directs. |
|---|
| 1710 | 1680 | | 1620 (e) After an election has been filed by the corporation or one or more shareholders, the |
|---|
| 1713 | 1682 | | 1622may the petitioning shareholder sell or otherwise dispose of any shares of the corporation, |
|---|
| 1714 | 1683 | | 1623unless the court determines that it would be equitable to the corporation and the shareholders, |
|---|
| 1715 | 1684 | | 1624other than the petitioning shareholders, to permit any discontinuance, settlement, sale, or other |
|---|
| 1716 | 1685 | | 1625disposition. |
|---|
| 1717 | 1686 | | 1626 (3) If, within 60 days after the earlier of: |
|---|
| 1718 | 1687 | | 1627 (a) the corporation's filing of an election to purchase all shares of the corporation |
|---|
| 1719 | 1688 | | 1628owned by the petitioning shareholder; or |
|---|
| 1720 | 1689 | | 1629 (b) the corporation's mailing of a notice to its shareholders of the filing of an election |
|---|
| 1721 | 1690 | | 1630by the shareholders to purchase all shares of the corporation owned by the petitioning |
|---|
| 1722 | 1691 | | 1631shareholder, the petitioning shareholder and electing corporation or shareholders reach |
|---|
| 1723 | 1692 | | 1632agreement as to the fair value and terms of purchase of the petitioning shareholder's shares, the |
|---|
| 1724 | 1693 | | 1633court shall enter an order directing the purchase of petitioner's shares, upon the terms and |
|---|
| 1725 | 1694 | | 1634conditions agreed to by the parties. |
|---|
| 1726 | 1695 | | 1635 (4) If the parties are unable to reach an agreement as provided for in Subsection (3), |
|---|
| 1727 | 1696 | | 1636upon application of any party the court shall stay the proceedings under Subsection |
|---|
| 1729 | 1699 | | 1638day before the date on which the [petition] action under Subsection 16-10a-1430(2) was filed |
|---|
| 1730 | 1700 | | 1639or as of any other date the court determines to be appropriate under the circumstances and |
|---|
| 1731 | 1701 | | 1640based on the factors the court determines to be appropriate. |
|---|
| 1732 | 1702 | | 1641 (5) (a) Upon determining the fair value of the shares of the corporation owned by the |
|---|
| 1733 | 1703 | | 1642petitioning shareholder, the court shall enter an order directing the purchase of the shares upon |
|---|
| 1734 | 1704 | | 1643terms and conditions the court determines to be appropriate. The terms and conditions may |
|---|
| 1735 | 1705 | | 1644include payment of the purchase price in installments, where necessary in the interests of |
|---|
| 1736 | 1706 | | 1645equity, provision for security to assure payment of the purchase price and any additional costs, |
|---|
| 1737 | 1707 | | 1646fees, and expenses awarded by the court, and an allocation of shares among shareholders if the |
|---|
| 1738 | 1708 | | 1647shares are to be purchased by shareholders. |
|---|
| 1742 | 1710 | | 1649of shares, the court shall attempt to preserve the existing distribution of voting rights among |
|---|
| 1743 | 1711 | | 1650holders of different share classes to the extent practicable. The court may direct that holders of |
|---|
| 1744 | 1712 | | 1651a specific class or classes may not participate in the purchase. The court may not require any |
|---|
| 1745 | 1713 | | 1652electing shareholder to purchase more of the shares of the corporation owned by the petitioning |
|---|
| 1746 | 1714 | | 1653shareholder than the number of shares that the purchasing shareholder may have set forth in his |
|---|
| 1747 | 1715 | | 1654election or notice of intent to participate filed with the court as the maximum number of shares |
|---|
| 1748 | 1716 | | 1655he is willing to purchase. |
|---|
| 1749 | 1717 | | 1656 (c) Interest may be allowed at the rate and from the date determined by the court to be |
|---|
| 1750 | 1718 | | 1657equitable. However, if the court finds that the refusal of the petitioning shareholder to accept |
|---|
| 1751 | 1719 | | 1658an offer of payment was arbitrary or otherwise not in good faith, interest may not be allowed. |
|---|
| 1752 | 1720 | | 1659 (d) If the court finds that the petitioning shareholder had probable grounds for relief |
|---|
| 1753 | 1721 | | 1660under Subsection 16-10a-1430(2)(b) or (d), it may award to the petitioning shareholder |
|---|
| 1754 | 1722 | | 1661reasonable fees and expenses of counsel and experts employed by the petitioning shareholder. |
|---|
| 1755 | 1723 | | 1662 (6) Upon entry of an order under Subsection (3) or (5), the court shall dismiss the |
|---|
| 1756 | 1724 | | 1663[petition] action to dissolve the corporation under Section 16-10a-1430, and the petitioning |
|---|
| 1757 | 1725 | | 1664shareholder shall no longer have any rights or status as a shareholder of the corporation, except |
|---|
| 1758 | 1726 | | 1665the right to receive the amounts awarded to him by the court. The award is enforceable in the |
|---|
| 1759 | 1727 | | 1666same manner as any other judgment. |
|---|
| 1760 | 1728 | | 1667 (7) (a) The purchase ordered pursuant to Subsection (5) shall be made within 10 days |
|---|
| 1770 | 1738 | | 1676Subsection (5)(d). The petitioning shareholder may continue to pursue any claims previously |
|---|
| 1771 | 1739 | | 1677asserted on behalf of the corporation. |
|---|
| 1772 | 1740 | | 1678 (8) Any payment by the corporation pursuant to an order under Subsection (3) or (5), |
|---|
| 1773 | 1741 | | 1679other than an award of fees and expenses pursuant to Subsection (5)(d), is subject to the |
|---|
| 1774 | 1742 | | 1680provisions of Section 16-10a-640. |
|---|
| 1775 | 1743 | | 1681 Section 29. Section 16-10a-1532 is amended to read: |
|---|
| 1776 | 1744 | | 1682 16-10a-1532. Appeal from revocation. |
|---|
| 1777 | 1745 | | 1683 [(1) A foreign corporation may appeal the division's revocation of its authority to |
|---|
| 1778 | 1746 | | 1684transact business in this state to the district court of the county in this state where the last |
|---|
| 1779 | 1747 | | 1685registered or principal office of the corporation was located or in Salt Lake County, within 30 |
|---|
| 1780 | 1748 | | 1686days after the notice of revocation is mailed under Section 16-10a-1531. The foreign |
|---|
| 1781 | 1749 | | 1687corporation appeals by petitioning the court to set aside the revocation and attaching to the |
|---|
| 1782 | 1750 | | 1688petition copies of the corporation's application for authority to transact business, and any |
|---|
| 1783 | 1751 | | 1689amended applications, each as filed with the division, and the division's notice of revocation.] |
|---|
| 1784 | 1752 | | 1690 [(2)] (1) If the division revokes a foreign corporation's authority to transact business in |
|---|
| 1785 | 1753 | | 1691this state, the foreign corporation may petition a court with jurisdiction under Title 78A, |
|---|
| 1786 | 1754 | | 1692Judiciary and Judicial Administration, to set aside the revocation. |
|---|
| 1787 | 1755 | | 1693 (2) A foreign corporation shall file a petition under Subsection (1) within 30 days after |
|---|
| 1788 | 1756 | | 1694the day on which the division gives notice of the revocation under Section 16-10a-1531. |
|---|
| 1789 | 1757 | | 1695 (3) The petition under Subsection (1) shall include a copy of the foreign corporation's |
|---|
| 1790 | 1758 | | 1696application for authority to transact business, any amended applications for authority to transact |
|---|
| 1791 | 1759 | | 1697business, and the division's notice of revocation. |
|---|
| 1792 | 1760 | | 1698 (4) [The] If a petition is filed under Subsection (1), the court may summarily order the |
|---|
| 1799 | 1766 | | 1703 Section 30. Section 16-10a-1604 is amended to read: |
|---|
| 1800 | 1767 | | 1704 16-10a-1604. Court-ordered inspection. |
|---|
| 1801 | 1768 | | 1705 (1) (a) If a corporation does not allow a shareholder or director, or the shareholder's or |
|---|
| 1802 | 1769 | | 1706director's agent or attorney, who complies with Subsection 16-10a-1602(1) to inspect or copy |
|---|
| 1803 | 1770 | | 1707any records required by that subsection to be available for inspection, [the district court of the |
|---|
| 1804 | 1771 | | 1708county in this state in which the corporation's principal office is located, or in Salt Lake County |
|---|
| 1805 | 1772 | | 1709if it has no principal office in this state, may] the shareholder or director may petition a court |
|---|
| 1806 | 1773 | | 1710with jurisdiction under Title 78A, Judiciary and Judicial Administration. |
|---|
| 1807 | 1774 | | 1711 (b) If a petition is filed under Subsection (1)(a), a court may summarily order |
|---|
| 1808 | 1775 | | 1712inspection and copying of the records demanded at the corporation's expense[, on application |
|---|
| 1809 | 1776 | | 1713of the shareholder or director denied access to the records]. |
|---|
| 1810 | 1777 | | 1714 (2) (a) If a corporation does not within a reasonable time allow a shareholder or |
|---|
| 1811 | 1778 | | 1715director, or the shareholder's or director's agent or attorney, who complies with Subsections |
|---|
| 1812 | 1779 | | 171616-10a-1602(2) and (3), to inspect and copy any records which [he] the shareholder or director |
|---|
| 1813 | 1780 | | 1717is entitled to inspect or copy by this part, [then upon application of the shareholder or director |
|---|
| 1814 | 1781 | | 1718denied access to the records, the district court of the county in this state where the corporation's |
|---|
| 1815 | 1782 | | 1719principal office is located or, if it has no principal office in this state, the district court for Salt |
|---|
| 1816 | 1783 | | 1720Lake County, may] the shareholder or director may petition a court with jurisdiction under Title |
|---|
| 1817 | 1784 | | 172178A, Judiciary and Judicial Administration. |
|---|
| 1818 | 1785 | | 1722 (b) If a petition is filed under Subsection (2)(a), the court may summarily order the |
|---|
| 1819 | 1786 | | 1723inspection or copying of the records demanded. |
|---|
| 1820 | 1787 | | 1724 (c) The court shall dispose of [an application] a petition under this subsection on an |
|---|
| 1821 | 1788 | | 1725expedited basis. |
|---|
| 1822 | 1789 | | 1726 (3) If a court orders inspection or copying of records demanded, [it] the court shall also |
|---|
| 1823 | 1790 | | 1727order the corporation to pay the shareholder's or director's costs incurred to obtain the order, |
|---|
| 1824 | 1791 | | 1728including reasonable counsel fees, unless the corporation proves that it refused inspection in |
|---|
| 1828 | 1795 | | 1731 (4) If a court orders inspection or copying of records demanded, [it] the court may: |
|---|
| 1829 | 1796 | | 1732 (a) impose reasonable restrictions on the use or distribution of the records by the |
|---|
| 1830 | 1797 | | 1733demanding shareholder or director; |
|---|
| 1831 | 1798 | | 1734 (b) order the corporation to pay the shareholder or director for any damages incurred as |
|---|
| 1832 | 1799 | | 1735a result of the corporation's denial if the court determines that the corporation did not act in |
|---|
| 1833 | 1800 | | 1736good faith in refusing to allow the inspection or copying; |
|---|
| 1834 | 1801 | | 1737 (c) if inspection or copying is ordered pursuant to Subsection (2), order the corporation |
|---|
| 1835 | 1802 | | 1738to pay the expenses of inspection and copying if the court determines that the corporation did |
|---|
| 1836 | 1803 | | 1739not act in good faith in refusing to allow the inspection or copying; and |
|---|
| 1837 | 1804 | | 1740 (d) grant the shareholder or director any other available legal remedy. |
|---|
| 1838 | 1805 | | 1741 Section 31. Section 16-11-13 is amended to read: |
|---|
| 1839 | 1806 | | 1742 16-11-13. Purchase or redemption of shares of disqualified shareholder. |
|---|
| 1840 | 1807 | | 1743 (1) (a) The articles of incorporation may provide for the purchase or redemption of the |
|---|
| 1841 | 1808 | | 1744shares of any shareholder upon the failure to qualify or disqualification of that shareholder, or |
|---|
| 1842 | 1809 | | 1745the same may be provided in the bylaws or by private agreement. |
|---|
| 1843 | 1810 | | 1746 (b) In the absence of such a provision in the articles of incorporation, the bylaws, or by |
|---|
| 1844 | 1811 | | 1747private agreement, the professional corporation shall purchase the shares of a shareholder who |
|---|
| 1845 | 1812 | | 1748is not qualified to own shares in the corporation within 90 days after the failure to qualify or |
|---|
| 1846 | 1813 | | 1749disqualification of the shareholder. |
|---|
| 1847 | 1814 | | 1750 (2) The price for shares purchased under this section shall be their reasonable fair value |
|---|
| 1848 | 1815 | | 1751as of the date of failure to qualify or disqualification of the shareholder. |
|---|
| 1849 | 1816 | | 1752 (3) (a) If the professional corporation fails to purchase shares as required by Subsection |
|---|
| 1850 | 1817 | | 1753(1), any disqualified shareholder or personal representative of a disqualified shareholder may |
|---|
| 1851 | 1818 | | 1754[bring an action in the district court of the county in which the principal office or place of |
|---|
| 1852 | 1819 | | 1755practice of the professional corporation is located for the enforcement of this section. The |
|---|
| 1861 | 1827 | | 1762 (c) [Further, if] If the plaintiff is successful in the action, [he shall be] the plaintiff is |
|---|
| 1862 | 1828 | | 1763entitled to recover a reasonable attorney's fee and costs. |
|---|
| 1863 | 1829 | | 1764 (4) The professional corporation shall repurchase shares as required by this section |
|---|
| 1864 | 1830 | | 1765without regard to restrictions upon the repurchase of shares provided by Title 16, Chapter 10a, |
|---|
| 1865 | 1831 | | 1766Utah Revised Business Corporation Act. |
|---|
| 1866 | 1832 | | 1767 Section 32. Section 16-16-202 is amended to read: |
|---|
| 1867 | 1833 | | 1768 16-16-202. Signing and filing of records pursuant to judicial order. |
|---|
| 1868 | 1834 | | 1769 (1) If a person required by this chapter to sign or deliver a record to the division for |
|---|
| 1869 | 1835 | | 1770filing does not [do so, the district court, upon petition of an aggrieved person, may order] sign |
|---|
| 1870 | 1836 | | 1771or deliver the record to the division for filing, the court may order, upon the petition of an |
|---|
| 1871 | 1837 | | 1772aggrieved person: |
|---|
| 1872 | 1838 | | 1773 (a) the person to sign the record and deliver [it] the record to the division for filing; or |
|---|
| 1873 | 1839 | | 1774 (b) delivery of the unsigned record to the division for filing. |
|---|
| 1874 | 1840 | | 1775 (2) An aggrieved person under Subsection (1), other than the limited cooperative |
|---|
| 1875 | 1841 | | 1776association or foreign cooperative to which the record pertains, shall make the association or |
|---|
| 1876 | 1842 | | 1777foreign cooperative a party to the action brought to obtain the order. |
|---|
| 1877 | 1843 | | 1778 (3) An unsigned record filed pursuant to this section is effective. |
|---|
| 1878 | 1844 | | 1779 Section 33. Section 16-16-1203 is amended to read: |
|---|
| 1879 | 1845 | | 1780 16-16-1203. Judicial dissolution. |
|---|
| 1880 | 1846 | | 1781 [The district court may dissolve a limited cooperative association or order any action |
|---|
| 1881 | 1847 | | 1782that under the circumstances is appropriate and equitable:] |
|---|
| 1884 | 1849 | | 1784an action in a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to |
|---|
| 1885 | 1850 | | 1785dissolve a limited cooperative association if: |
|---|
| 1886 | 1851 | | 1786 (a) the association obtained [its] the association's articles of organization through |
|---|
| 1887 | 1852 | | 1787fraud; or |
|---|
| 1888 | 1853 | | 1788 (b) the association has continued to exceed or abuse the authority conferred upon [it] |
|---|
| 1889 | 1854 | | 1789the corporation by law[; or]. |
|---|
| 1890 | 1855 | | 1790 (2) [in a proceeding initiated by a member,] A member may bring an action in a court |
|---|
| 1891 | 1856 | | 1791with jurisdiction under Title 78A, Judiciary and Judicial Administration, to dissolve a limited |
|---|
| 1893 | 1859 | | 1793 (a) the directors are deadlocked in the management of the association's affairs, the |
|---|
| 1894 | 1860 | | 1794members are unable to break the deadlock, and irreparable injury to the association is occurring |
|---|
| 1895 | 1861 | | 1795or is threatened because of the deadlock; |
|---|
| 1896 | 1862 | | 1796 (b) the directors or those in control of the association have acted, are acting, or will act |
|---|
| 1897 | 1863 | | 1797in a manner that is illegal, oppressive, or fraudulent; |
|---|
| 1898 | 1864 | | 1798 (c) the members are deadlocked in voting power and have failed to elect successors to |
|---|
| 1899 | 1865 | | 1799directors whose terms have expired for two consecutive periods during which annual members |
|---|
| 1900 | 1866 | | 1800meetings were held or were to be held; or |
|---|
| 1901 | 1867 | | 1801 (d) the assets of the association are being misapplied or wasted. |
|---|
| 1902 | 1868 | | 1802 (3) If an action is brought under this section, a court may dissolve a limited cooperative |
|---|
| 1903 | 1869 | | 1803association or order an action that under the circumstances is appropriate or equitable. |
|---|
| 1904 | 1870 | | 1804 Section 34. Section 16-16-1206 is amended to read: |
|---|
| 1905 | 1871 | | 1805 16-16-1206. Winding up. |
|---|
| 1906 | 1872 | | 1806 (1) A limited cooperative association continues after dissolution only for purposes of |
|---|
| 1907 | 1873 | | 1807winding up [its] the association's activities. |
|---|
| 1908 | 1874 | | 1808 (2) In winding up a limited cooperative association's activities, the board of directors |
|---|
| 1909 | 1875 | | 1809shall cause the association to: |
|---|
| 1913 | 1877 | | 1811activities, and marshal and distribute [its] the association's assets; |
|---|
| 1914 | 1878 | | 1812 (b) preserve the association or its property as a going concern for no more than a |
|---|
| 1915 | 1879 | | 1813reasonable time; |
|---|
| 1916 | 1880 | | 1814 (c) prosecute and defend actions and proceedings; |
|---|
| 1917 | 1881 | | 1815 (d) transfer association property; and |
|---|
| 1918 | 1882 | | 1816 (e) perform other necessary acts. |
|---|
| 1919 | 1883 | | 1817 (3) After dissolution and upon application of a limited cooperative association, a |
|---|
| 1920 | 1884 | | 1818member, or a holder of financial rights, [the district court] a court may order judicial |
|---|
| 1921 | 1885 | | 1819supervision of the winding up of the association, including the appointment of a person to wind |
|---|
| 1922 | 1886 | | 1820up the association's activities, if: |
|---|
| 1923 | 1887 | | 1821 (a) after a reasonable time, the association has not wound up [its] the association's |
|---|
| 1924 | 1888 | | 1822activities; or |
|---|
| 1926 | 1891 | | 1824 (4) If a person is appointed pursuant to Subsection (3) to wind up the activities of a |
|---|
| 1927 | 1892 | | 1825limited cooperative association, the association shall promptly deliver to the division for filing |
|---|
| 1928 | 1893 | | 1826an amendment to the articles of organization to reflect the appointment. |
|---|
| 1929 | 1894 | | 1827 Section 35. Section 16-16-1210 is amended to read: |
|---|
| 1930 | 1895 | | 1828 16-16-1210. Court proceeding. |
|---|
| 1931 | 1896 | | 1829 (1) [Upon application] Upon a petition by a dissolved limited cooperative association |
|---|
| 1932 | 1897 | | 1830that has published a notice under Section 16-16-1209, [the district court in the county where |
|---|
| 1933 | 1898 | | 1831the association's principal office is located or, if the association does not have a principal office |
|---|
| 1934 | 1899 | | 1832in this state where its designated office in this state is located,] a court with jurisdiction under |
|---|
| 1935 | 1900 | | 1833Title 78A, Judiciary and Judicial Administration, may determine the amount and form of |
|---|
| 1936 | 1901 | | 1834security to be provided for payment of claims against the association that are contingent, have |
|---|
| 1937 | 1902 | | 1835not been made known to the association, or are based on an event occurring after the effective |
|---|
| 1938 | 1903 | | 1836date of dissolution but that, based on the facts known to the association, are reasonably |
|---|
| 1941 | 1905 | | 1838 (2) Not later than 10 days after filing [an application] a petition under Subsection (1), a |
|---|
| 1942 | 1906 | | 1839dissolved limited cooperative association shall give notice of the proceeding to each known |
|---|
| 1943 | 1907 | | 1840claimant holding a contingent claim. |
|---|
| 1944 | 1908 | | 1841 (3) (a) The court may appoint a representative in a proceeding brought under this |
|---|
| 1945 | 1909 | | 1842section to represent all claimants whose identities are unknown. |
|---|
| 1946 | 1910 | | 1843 (b) The dissolved limited cooperative association shall pay reasonable fees and |
|---|
| 1947 | 1911 | | 1844expenses of the representative, including all reasonable attorney and expert witness fees. |
|---|
| 1948 | 1912 | | 1845 (4) Provision by the dissolved limited cooperative association for security in the |
|---|
| 1949 | 1913 | | 1846amount and the form ordered by the court satisfies the association's obligations with respect to |
|---|
| 1950 | 1914 | | 1847claims that are contingent, have not been made known to the association, or are based on an |
|---|
| 1951 | 1915 | | 1848event occurring after the effective date of dissolution, and the claims may not be enforced |
|---|
| 1952 | 1916 | | 1849against a member that received a distribution. |
|---|
| 1953 | 1917 | | 1850 Section 36. Section 24-1-103 is amended to read: |
|---|
| 1954 | 1918 | | 1851 24-1-103. Venue. |
|---|
| 1955 | 1919 | | 1852 [(1)] In addition to the venue provided for under [Title 78B, Chapter 3, Part 3, Place of |
|---|
| 1956 | 1920 | | 1853Trial -- Venue] Title 78B, Chapter 3a, Venue for Civil Actions, or any other provisions of law, |
|---|
| 1970 | 1933 | | 1865 (1) in accordance with Title 78B, Chapter 3a, Venue for Civil Actions; or |
|---|
| 1971 | 1934 | | 1866 (2) in Salt Lake County. |
|---|
| 1972 | 1935 | | 1867 Section 38. Section 31A-2-305 is amended to read: |
|---|
| 1973 | 1936 | | 1868 31A-2-305. Immunity from prosecution. |
|---|
| 1974 | 1937 | | 1869 (1) (a) If a natural person declines to appear, testify, or produce any record or document |
|---|
| 1975 | 1938 | | 1870in any proceeding instituted by the commissioner or in obedience to the subpoena of the |
|---|
| 1976 | 1939 | | 1871commissioner, the commissioner may [apply to a judge of the district court where the |
|---|
| 1977 | 1940 | | 1872proceeding is held] petition a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 1978 | 1941 | | 1873Administration, for an order to the person to attend, testify, or produce records or documents as |
|---|
| 1979 | 1942 | | 1874requested by the commissioner. |
|---|
| 1980 | 1943 | | 1875 (b) In the event a witness asserts a privilege against self-incrimination, testimony and |
|---|
| 1981 | 1944 | | 1876evidence from the witness may be compelled pursuant to Title 77, Chapter 22b, Grants of |
|---|
| 1982 | 1945 | | 1877Immunity. |
|---|
| 1983 | 1946 | | 1878 (2) If a person claims the privilege against self-incrimination and refuses to appear, |
|---|
| 1984 | 1947 | | 1879testify, or produce documents in response to probative evidence against [him] the person in a |
|---|
| 1985 | 1948 | | 1880proceeding to revoke or suspend [his] the person's license, and if the testimony or documents |
|---|
| 1986 | 1949 | | 1881would have been admissible as evidence in a court of law except for the Fifth Amendment |
|---|
| 1987 | 1950 | | 1882privilege, the refusal to appear, testify, or produce documents is, for noncriminal proceedings |
|---|
| 1988 | 1951 | | 1883only, rebuttable evidence of the facts on which the proceeding is based. |
|---|
| 1989 | 1952 | | 1884 Section 39. Section 31A-5-414 is amended to read: |
|---|
| 1998 | 1961 | | 1892been approved in advance by the board or by the shareholders. |
|---|
| 1999 | 1962 | | 1893 (c) The transaction has been reported to the commissioner immediately after approval |
|---|
| 2000 | 1963 | | 1894by the board or the shareholders. |
|---|
| 2001 | 1964 | | 1895 (2) A director, whose interest or status makes the transaction subject to this section, |
|---|
| 2002 | 1965 | | 1896may be counted in determining a quorum for a board meeting approving a transaction under |
|---|
| 2003 | 1966 | | 1897Subsection (1)(b), but may not vote. Approval requires the affirmative vote of a majority of |
|---|
| 2004 | 1967 | | 1898those present. |
|---|
| 2005 | 1968 | | 1899 (3) (a) The commissioner may by rule exempt certain types of transactions from the |
|---|
| 2006 | 1969 | | 1900reporting requirement of Subsection (1)(c). |
|---|
| 2007 | 1970 | | 1901 (b) The commissioner has standing to bring an action on behalf of an insurer to have a |
|---|
| 2008 | 1971 | | 1902contract in violation of Subsection (1) declared void. [Such an action shall be brought in the |
|---|
| 2009 | 1972 | | 1903Third Judicial District Court for Salt Lake County.] |
|---|
| 2010 | 1973 | | 1904 Section 40. Section 31A-5-415 is amended to read: |
|---|
| 2011 | 1974 | | 1905 31A-5-415. Officers', directors', and employees' liability and indemnification. |
|---|
| 2012 | 1975 | | 1906 (1) (a) Section 16-10a-841 applies to the liabilities of directors of a stock corporation. |
|---|
| 2013 | 1976 | | 1907 (b) Subsection 16-6a-825(3) applies to loans to trustees and officers of a mutual. |
|---|
| 2014 | 1977 | | 1908 (c) A director who votes for or assents to a violation of Subsection 16-6a-825(3) or |
|---|
| 2015 | 1978 | | 1909Section 16-10a-842 is jointly and severally liable to the corporation for any loss on the |
|---|
| 2016 | 1979 | | 1910distribution. |
|---|
| 2017 | 1980 | | 1911 (2) (a) Title 16, Chapter 10a, Part 9, Indemnification, applies to stock and mutual |
|---|
| 2018 | 1981 | | 1912corporations, but no indemnification may be paid until 30 or more days after sending a notice |
|---|
| 2019 | 1982 | | 1913to the commissioner of the full details of the proposed indemnification. |
|---|
| 2020 | 1983 | | 1914 (b) The commissioner may bring an action [in Third Judicial District Court for Salt |
|---|
| 2021 | 1984 | | 1915Lake County] in a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 2027 | 1989 | | 1919hazardous condition. |
|---|
| 2028 | 1990 | | 1920 Section 41. Section 31A-15-211 is amended to read: |
|---|
| 2029 | 1991 | | 1921 31A-15-211. Enforcement authority. |
|---|
| 2030 | 1992 | | 1922 (1) (a) The commissioner is authorized to use the powers established for the |
|---|
| 2031 | 1993 | | 1923department under this title to enforce the laws of this state not specifically preempted by the |
|---|
| 2032 | 1994 | | 1924Liability Risk Retention Act of 1986, including the commissioner's administrative authority to |
|---|
| 2033 | 1995 | | 1925investigate, issue subpoena, conduct depositions and hearings, issue orders, impose monetary |
|---|
| 2034 | 1996 | | 1926penalties and seek injunctive relief. |
|---|
| 2035 | 1997 | | 1927 (b) With regard to any investigation, administrative proceedings, or litigation, the |
|---|
| 2036 | 1998 | | 1928commissioner shall rely on the procedural laws of this state. |
|---|
| 2037 | 1999 | | 1929 (2) (a) Whenever the commissioner determines that any person, risk retention group, |
|---|
| 2038 | 2000 | | 1930purchasing group, or insurer of a purchasing group has violated, is violating, or is about to |
|---|
| 2039 | 2001 | | 1931violate any provision of this part or any other insurance law of this state applicable to the |
|---|
| 2040 | 2002 | | 1932person or entity, or that the person or entity has failed to comply with a lawful order of the |
|---|
| 2041 | 2003 | | 1933commissioner, [he] the commissioner may, in addition to any other lawful remedies or |
|---|
| 2042 | 2004 | | 1934penalties, [file a complaint in the Third District Court of Salt Lake County] bring an action in a |
|---|
| 2043 | 2005 | | 1935court with jurisdiction under Title 78A, Judiciary and Judicial Administration, to enjoin and |
|---|
| 2044 | 2006 | | 1936restrain any person, risk retention group, purchasing group, or insurer from engaging in the |
|---|
| 2045 | 2007 | | 1937violation, or to compel compliance with the order of the commissioner. [The court has |
|---|
| 2046 | 2008 | | 1938jurisdiction of the proceeding and has the power to enter a judgment and order for injunctive or |
|---|
| 2047 | 2009 | | 1939other relief.] |
|---|
| 2048 | 2010 | | 1940 (b) [In any action by the commissioner under this subsection] In an action by the |
|---|
| 2049 | 2011 | | 1941commissioner under Subsection (2)(a), service of process shall be made upon the director of |
|---|
| 2050 | 2012 | | 1942the Division of Corporations and Commercial Code who shall forward the order, pleadings, or |
|---|
| 2051 | 2013 | | 1943other process to the person, risk retention group, purchasing group, or insurer in accordance |
|---|
| 2052 | 2014 | | 1944with the procedures specified in Section 31A-14-204. |
|---|
| 2057 | 2019 | | 1948 (3) In an action under this section, a court has the power to enter a judgment and order |
|---|
| 2058 | 2020 | | 1949for injunctive or other relief. |
|---|
| 2059 | 2021 | | 1950 Section 42. Section 31A-16-107.5 is amended to read: |
|---|
| 2060 | 2022 | | 1951 31A-16-107.5. Examination of registered insurers. |
|---|
| 2061 | 2023 | | 1952 (1) Subject to the limitation contained in this section and the powers which the |
|---|
| 2062 | 2024 | | 1953commissioner has under Chapter 2, Administration of the Insurance Laws, relating to the |
|---|
| 2063 | 2025 | | 1954examination of insurers, the commissioner has the power to examine an insurer registered |
|---|
| 2064 | 2026 | | 1955under Section 31A-16-105 and its affiliates to ascertain the financial condition of the insurer, |
|---|
| 2065 | 2027 | | 1956including the enterprise risk to the insurer by the ultimate controlling party, or by the insurance |
|---|
| 2066 | 2028 | | 1957holding company system on a consolidated basis. |
|---|
| 2067 | 2029 | | 1958 (2) (a) The commissioner may order an insurer registered under Section 31A-16-105 to |
|---|
| 2068 | 2030 | | 1959produce the records, books, or other information papers in the possession of the insurer or its |
|---|
| 2069 | 2031 | | 1960affiliates as are reasonably necessary to determine compliance with this chapter. |
|---|
| 2070 | 2032 | | 1961 (b) To determine compliance with this chapter, the commissioner may order an insurer |
|---|
| 2071 | 2033 | | 1962registered under Section 31A-16-105 to produce information not in the possession of the |
|---|
| 2072 | 2034 | | 1963insurer if the insurer can obtain access to the information pursuant to contractual relationships, |
|---|
| 2073 | 2035 | | 1964statutory obligations, or other methods. |
|---|
| 2074 | 2036 | | 1965 (c) If an insurer cannot obtain the information requested by the commissioner, the |
|---|
| 2075 | 2037 | | 1966insurer shall provide the commissioner a detailed explanation of the reason that the insurer |
|---|
| 2076 | 2038 | | 1967cannot obtain the information and the identity of the holder of the information. |
|---|
| 2077 | 2039 | | 1968 (d) Whenever it appears to the commissioner that the detailed explanation is without |
|---|
| 2078 | 2040 | | 1969merit, the commissioner may require, after notice and hearing, the insurer to pay a penalty of |
|---|
| 2079 | 2041 | | 1970$5,000 for each day's delay, or may suspend or revoke the insurer's license. |
|---|
| 2080 | 2042 | | 1971 (3) The commissioner may retain, at the registered insurer's expense, attorneys, |
|---|
| 2090 | 2051 | | 1979 (5) If an insurer fails to comply with an order issued under this section, the |
|---|
| 2091 | 2052 | | 1980commissioner may: |
|---|
| 2092 | 2053 | | 1981 (a) examine the affiliates to obtain the information; or |
|---|
| 2093 | 2054 | | 1982 (b) issue subpoenas, administer oaths, and examine under oath any person for purposes |
|---|
| 2094 | 2055 | | 1983of determining compliance with this section. |
|---|
| 2095 | 2056 | | 1984 (6) (a) Upon the failure or refusal of any person to obey a subpoena under Subsection |
|---|
| 2096 | 2057 | | 1985(5), the commissioner may [petition the Third District Court of Salt Lake County] petition a |
|---|
| 2097 | 2058 | | 1986court to enter an order compelling the witness to appear and testify or produce documentary |
|---|
| 2098 | 2059 | | 1987evidence. |
|---|
| 2099 | 2060 | | 1988 (b) A person shall be obliged to attend as a witness at the place specified in the |
|---|
| 2100 | 2061 | | 1989subpoena, when subpoenaed, anywhere within the state. |
|---|
| 2101 | 2062 | | 1990 (c) A person subpoenaed is entitled to the same fees and mileage[, if claimed, as a |
|---|
| 2102 | 2063 | | 1991witness in the Third District Court of Salt Lake County, which fees,] as a witness under Section |
|---|
| 2103 | 2064 | | 199278B-1-119. |
|---|
| 2104 | 2065 | | 1993 (d) Fees, mileage, and actual expense, if any, necessarily incurred in securing the |
|---|
| 2105 | 2066 | | 1994attendance of witnesses, and [their] the witness's testimony, shall be itemized and charged |
|---|
| 2106 | 2067 | | 1995against, and be paid by, the company being examined. |
|---|
| 2107 | 2068 | | 1996 Section 43. Section 31A-16-110 is amended to read: |
|---|
| 2108 | 2069 | | 1997 31A-16-110. Enjoining violations -- Voting securities acquired in violation of law |
|---|
| 2109 | 2070 | | 1998or rule. |
|---|
| 2112 | 2072 | | 2000officer, employee, or agent of an insurer has committed or is about to commit a violation of this |
|---|
| 2113 | 2073 | | 2001chapter or any rule or order issued by the commissioner under this chapter, the commissioner |
|---|
| 2114 | 2074 | | 2002may [apply to the district court of the county in which the principal office of the insurer is |
|---|
| 2115 | 2075 | | 2003located, or if the insurer has no principal office in this state, then to the Third District Court of |
|---|
| 2116 | 2076 | | 2004Salt Lake County,] petition a court for an order enjoining the insurer or a director, officer, |
|---|
| 2117 | 2077 | | 2005employee, or agent of the insurer from the violation. |
|---|
| 2118 | 2078 | | 2006 (b) The commissioner may also request other equitable relief which the nature of the |
|---|
| 2119 | 2079 | | 2007case and the interest of the insurer's policyholders, creditors, and shareholders or the public |
|---|
| 2120 | 2080 | | 2008require. |
|---|
| 2122 | 2083 | | 2010acquisition, or which is acquired or to be acquired, in contravention of the provisions of this |
|---|
| 2123 | 2084 | | 2011chapter or any rule or order issued by the commissioner under this chapter, may be voted at any |
|---|
| 2124 | 2085 | | 2012shareholders' meeting, or may be counted for quorum purposes. |
|---|
| 2125 | 2086 | | 2013 (b) Any action of shareholders requiring the affirmative vote of a percentage of shares |
|---|
| 2126 | 2087 | | 2014may be taken as though those securities were not issued and outstanding. |
|---|
| 2127 | 2088 | | 2015 (c) However, no action taken at that shareholders' meeting is invalidated by the voting |
|---|
| 2128 | 2089 | | 2016of those securities, unless the action would materially affect control of the insurer or unless the |
|---|
| 2129 | 2090 | | 2017[district] court has ordered that voting invalidates the action. |
|---|
| 2130 | 2091 | | 2018 (d) If an insurer or the commissioner has reason to believe that any security of the |
|---|
| 2131 | 2092 | | 2019insurer has been or is about to be acquired in contravention of the provisions of this chapter or |
|---|
| 2132 | 2093 | | 2020any rule or order issued by the commissioner under this chapter, the insurer or the |
|---|
| 2133 | 2094 | | 2021commissioner may [apply to the Third District Court of Salt Lake County or to the district |
|---|
| 2134 | 2095 | | 2022court for the county in which the insurer has its principal place of business,] petition a court to |
|---|
| 2135 | 2096 | | 2023enjoin any offer, request, invitation, or agreement of acquisition which is made in |
|---|
| 2136 | 2097 | | 2024contravention of Section 31A-16-103 or any rule or order issued by the commissioner under |
|---|
| 2137 | 2098 | | 2025this chapter to enjoin the voting of that acquired security. |
|---|
| 2141 | 2100 | | 2027 (i) void any vote of that security if the vote has already been cast at any meeting of |
|---|
| 2142 | 2101 | | 2028shareholders[, and the court may]; and |
|---|
| 2143 | 2102 | | 2029 (ii) grant other equitable relief which the nature of the case and the interests of the |
|---|
| 2144 | 2103 | | 2030insurer's policyholders, creditors, and shareholders or the public require. |
|---|
| 2145 | 2104 | | 2031 [(3) Upon the application of the insurer or the commissioner, if a person has acquired |
|---|
| 2146 | 2105 | | 2032or is proposing to acquire any voting securities in violation of this chapter or of any rule or |
|---|
| 2147 | 2106 | | 2033order issued by the commissioner under this chapter, the Third District Court of Salt Lake |
|---|
| 2148 | 2107 | | 2034County or the district court for the county in which the insurer has its principal place of |
|---|
| 2149 | 2108 | | 2035business may, upon the notice which the court deems appropriate,] |
|---|
| 2150 | 2109 | | 2036 (3) (a) If a person has acquired or is proposing to acquire any voting securities in |
|---|
| 2151 | 2110 | | 2037violation of this chapter or in violation of a rule or order issued by the commissioner under this |
|---|
| 2152 | 2111 | | 2038chapter, the insurer or the commissioner may petition a court with jurisdiction under Title 78A, |
|---|
| 2153 | 2112 | | 2039Judiciary and Judicial Administration. |
|---|
| 2155 | 2115 | | 2041 (i) seize or sequester any voting securities of the insurer owned directly or indirectly by |
|---|
| 2156 | 2116 | | 2042that person[, and]; and |
|---|
| 2157 | 2117 | | 2043 (ii) issue orders with respect to that person and those securities which the court |
|---|
| 2158 | 2118 | | 2044considers appropriate to effectuate the provisions of this chapter. |
|---|
| 2159 | 2119 | | 2045 (c) A petitioner under Subsection (3)(a) shall provide notice that the court deems |
|---|
| 2160 | 2120 | | 2046appropriate. |
|---|
| 2161 | 2121 | | 2047 (4) For the purposes of this chapter, the situs of the ownership of the securities of |
|---|
| 2162 | 2122 | | 2048domestic insurers is considered to be in this state. |
|---|
| 2163 | 2123 | | 2049 Section 44. Section 31A-16-111 is amended to read: |
|---|
| 2164 | 2124 | | 2050 31A-16-111. Required sale of improperly acquired stock -- Penalties. |
|---|
| 2165 | 2125 | | 2051 (1) If the commissioner finds that the acquiring person has not substantially complied |
|---|
| 2166 | 2126 | | 2052with the requirements of this chapter in acquiring control of a domestic insurer, the |
|---|
| 2169 | 2128 | | 2054domestic insurer in the manner specified in Subsection (2). |
|---|
| 2170 | 2129 | | 2055 (2) (a) The commissioner shall effect the sale required by Subsection (1) in the manner |
|---|
| 2171 | 2130 | | 2056which, under the particular circumstances, appears most likely to result in the payment of the |
|---|
| 2172 | 2131 | | 2057full market value for the stock by persons who have the collective competence, experience, |
|---|
| 2173 | 2132 | | 2058financial resources, and integrity to obtain approval under Subsection 31A-16-103(8). |
|---|
| 2174 | 2133 | | 2059 (b) Sales made under this section are subject to approval by [the Third Judicial District |
|---|
| 2175 | 2134 | | 2060Court for Salt Lake County] a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 2176 | 2135 | | 2061Administration, which court has the authority to effect the terms of the sale. |
|---|
| 2177 | 2136 | | 2062 (3) The proceeds from sales made under this section shall be distributed first to the |
|---|
| 2178 | 2137 | | 2063person required by this section to sell the stock, but only up to the amount originally paid by |
|---|
| 2179 | 2138 | | 2064the person for the securities. Additional sale proceeds shall be paid to the General Fund. |
|---|
| 2180 | 2139 | | 2065 (4) The person required to sell and persons related to or affiliated with the seller may |
|---|
| 2181 | 2140 | | 2066not purchase the stock at the sale conducted under this section. |
|---|
| 2182 | 2141 | | 2067 (5) (a) A director or officer of an insurance holding company system violates this |
|---|
| 2183 | 2142 | | 2068chapter if the director or officer knowingly: |
|---|
| 2184 | 2143 | | 2069 (i) participates in or assents to a transaction or investment that: |
|---|
| 2185 | 2144 | | 2070 (A) has not been properly reported or submitted pursuant to: |
|---|
| 2187 | 2147 | | 2072 (II) Subsection 31A-16-106(1)(b); or |
|---|
| 2188 | 2148 | | 2073 (B) otherwise violates this chapter; or |
|---|
| 2189 | 2149 | | 2074 (ii) permits any of the officers or agents of the insurer to engage in a transaction or |
|---|
| 2190 | 2150 | | 2075investment described in Subsection (5)(a)(i). |
|---|
| 2191 | 2151 | | 2076 (b) A director or officer in violation of Subsection (5)(a) shall pay, in the director's or |
|---|
| 2192 | 2152 | | 2077officer's individual capacity, a civil penalty of not more than $20,000 per violation: |
|---|
| 2193 | 2153 | | 2078 (i) upon a finding by the commissioner of a violation; and |
|---|
| 2194 | 2154 | | 2079 (ii) after notice and hearing before the commissioner. |
|---|
| 2198 | 2156 | | 2081commissioner shall take into account: |
|---|
| 2199 | 2157 | | 2082 (i) the appropriateness of the penalty with respect to the gravity of the violation; |
|---|
| 2200 | 2158 | | 2083 (ii) the history of previous violations; and |
|---|
| 2201 | 2159 | | 2084 (iii) any other matters that justice requires. |
|---|
| 2202 | 2160 | | 2085 (6) (a) When it appears to the commissioner that any insurer or any director, officer, |
|---|
| 2203 | 2161 | | 2086employee, or agent of the insurer, has committed a willful violation of this chapter, the |
|---|
| 2204 | 2162 | | 2087commissioner may [cause criminal proceedings to be instituted:] refer the violation to the |
|---|
| 2205 | 2163 | | 2088appropriate prosecutor. |
|---|
| 2206 | 2164 | | 2089 [(i) (A) in the district court for the county in this state in which the principal office of |
|---|
| 2207 | 2165 | | 2090the insurer is located; or] |
|---|
| 2208 | 2166 | | 2091 [(B) if the insurer has no principal office in this state, in the Third District Court for |
|---|
| 2209 | 2167 | | 2092Salt Lake County; and] |
|---|
| 2210 | 2168 | | 2093 [(ii) against the insurer or the responsible director, officer, employee, or agent of the |
|---|
| 2211 | 2169 | | 2094insurer.] |
|---|
| 2212 | 2170 | | 2095 (b) (i) An insurer that willfully violates this chapter may be fined not more than |
|---|
| 2213 | 2171 | | 2096$20,000. |
|---|
| 2214 | 2172 | | 2097 (ii) Any individual who willfully violates this chapter is guilty of a third degree felony, |
|---|
| 2215 | 2173 | | 2098and upon conviction may be: |
|---|
| 2216 | 2174 | | 2099 (A) fined in that person's individual capacity not more than $5,000; |
|---|
| 2217 | 2175 | | 2100 (B) imprisoned; or |
|---|
| 2218 | 2176 | | 2101 (C) both fined and imprisoned. |
|---|
| 2226 | 2184 | | 2108chapter is required, after notice and hearing, to pay a penalty of $10,000 for each day's delay, to |
|---|
| 2227 | 2185 | | 2109be recovered by the commissioner and the penalty so recovered shall be paid into the General |
|---|
| 2228 | 2186 | | 2110Fund. |
|---|
| 2229 | 2187 | | 2111 (ii) The maximum penalty under this section is $250,000. |
|---|
| 2230 | 2188 | | 2112 (b) The commissioner may reduce the penalty if the insurer demonstrates to the |
|---|
| 2231 | 2189 | | 2113commissioner that the imposition of the penalty would constitute a financial hardship to the |
|---|
| 2232 | 2190 | | 2114insurer. |
|---|
| 2233 | 2191 | | 2115 (2) (a) A director or officer of an insurance holding company system who knowingly |
|---|
| 2234 | 2192 | | 2116violates, participates in, or assents to, or who knowingly shall permit any of the officers or |
|---|
| 2235 | 2193 | | 2117agents of the insurer to engage in transactions or make investments that have not been properly |
|---|
| 2236 | 2194 | | 2118reported or submitted pursuant to Subsection 31A-16-105(1), 31A-16-106(1)(b), or |
|---|
| 2237 | 2195 | | 211931A-16-106(2), or that violates this chapter, shall pay, in the director's or officer's individual |
|---|
| 2238 | 2196 | | 2120capacity, a civil forfeiture of not more than $10,000 per violation, notwithstanding Section |
|---|
| 2239 | 2197 | | 212131A-2-308, after notice and hearing before the commissioner. |
|---|
| 2240 | 2198 | | 2122 (b) In determining the amount of the civil forfeiture, the commissioner shall take into |
|---|
| 2241 | 2199 | | 2123account the appropriateness of the forfeiture with respect to the gravity of the violation, the |
|---|
| 2242 | 2200 | | 2124history of previous violations, and such other matters as justice may require. |
|---|
| 2243 | 2201 | | 2125 (3) (a) Whenever it appears to the commissioner that any insurer subject to this chapter |
|---|
| 2244 | 2202 | | 2126or a director, officer, employee, or agent of the insurer has engaged in any transaction or |
|---|
| 2245 | 2203 | | 2127entered into a contract that is subject to Section 31A-16-106 and that would not have been |
|---|
| 2246 | 2204 | | 2128approved had the approval been requested, the commissioner may order the insurer to cease |
|---|
| 2247 | 2205 | | 2129and desist immediately any further activity under that transaction or contract. |
|---|
| 2248 | 2206 | | 2130 (b) After notice and hearing, the commissioner may also order the insurer to void any |
|---|
| 2249 | 2207 | | 2131contract and restore the status quo if the action is in the best interest of the policyholders, |
|---|
| 2250 | 2208 | | 2132creditors, or the public. |
|---|
| 2255 | 2212 | | 2135commissioner may refer the [case] violation to the appropriate prosecutor. [Venue for the |
|---|
| 2256 | 2213 | | 2136criminal action shall be in the Third District Court of Salt Lake County, against the insurer or |
|---|
| 2257 | 2214 | | 2137the responsible director, officer, employee, or agent of the insurer.] |
|---|
| 2258 | 2215 | | 2138 (b) An insurer that willfully violates this chapter may be fined not more than $250,000 |
|---|
| 2259 | 2216 | | 2139notwithstanding Section 31A-2-308. |
|---|
| 2260 | 2217 | | 2140 (c) An individual who willfully violates this chapter may be fined in the individual's |
|---|
| 2261 | 2218 | | 2141individual capacity not more than $100,000 notwithstanding Section 31A-2-308 and is guilty of |
|---|
| 2262 | 2219 | | 2142a third-degree felony. |
|---|
| 2263 | 2220 | | 2143 (5) (a) An officer, director, or employee of an insurance holding company system who |
|---|
| 2264 | 2221 | | 2144willfully and knowingly subscribes to or makes or causes to be made any false statements, false |
|---|
| 2265 | 2222 | | 2145reports, or false filings with the intent to deceive the commissioner in the performances of the |
|---|
| 2266 | 2223 | | 2146commissioner's duties under this chapter, is guilty of a third-degree felony. |
|---|
| 2267 | 2224 | | 2147 (b) Any fines imposed shall be paid by the officer, director, or employee in the |
|---|
| 2268 | 2225 | | 2148officer's, director's, or employee's individual capacity. |
|---|
| 2269 | 2226 | | 2149 (6) Whenever it appears to the commissioner that a person has committed a violation |
|---|
| 2270 | 2227 | | 2150of Section 31A-16-103 and that prevents the full understanding of the enterprise risk to the |
|---|
| 2271 | 2228 | | 2151insurer by affiliates or by the insurance holding company system, the violation may serve as an |
|---|
| 2272 | 2229 | | 2152independent basis for disapproving dividends or distributions and for placing the insurer under |
|---|
| 2273 | 2230 | | 2153an order of supervision in accordance with Section 31A-27-503. |
|---|
| 2274 | 2231 | | 2154 Section 46. Section 31A-16-117 is amended to read: |
|---|
| 2275 | 2232 | | 2155 31A-16-117. Judicial review -- Mandamus. |
|---|
| 2276 | 2233 | | 2156 (1) A person aggrieved by an act, determination, rule, or order or any other action of |
|---|
| 2277 | 2234 | | 2157the commissioner pursuant to this chapter may seek judicial review in accordance with Title |
|---|
| 2278 | 2235 | | 215863G, Chapter 4, Administrative Procedures Act. |
|---|
| 2279 | 2236 | | 2159 (2) The filing of an appeal pursuant to this section shall stay the application of any rule, |
|---|
| 2280 | 2237 | | 2160order, or other action of the commissioner to the appealing party unless the court, after giving |
|---|
| 2286 | 2243 | | 2165County for writ in the nature of a mandamus or a peremptory mandamus directing the |
|---|
| 2287 | 2244 | | 2166commissioner to act or make a determination. |
|---|
| 2288 | 2245 | | 2167 Section 47. Section 31A-17-610 is amended to read: |
|---|
| 2289 | 2246 | | 2168 31A-17-610. Foreign insurers or health organizations. |
|---|
| 2290 | 2247 | | 2169 (1) (a) Any foreign insurer or health organization shall, upon the written request of the |
|---|
| 2291 | 2248 | | 2170commissioner, submit to the commissioner an RBC report as of the end of the most recent |
|---|
| 2292 | 2249 | | 2171calendar year by the later of: |
|---|
| 2293 | 2250 | | 2172 (i) the date an RBC report would be required to be filed by a domestic insurer or health |
|---|
| 2294 | 2251 | | 2173organization under this part; or |
|---|
| 2295 | 2252 | | 2174 (ii) 15 days after the request is received by the foreign insurer or health organization. |
|---|
| 2296 | 2253 | | 2175 (b) Any foreign insurer or health organization shall, at the written request of the |
|---|
| 2297 | 2254 | | 2176commissioner, promptly submit to the commissioner a copy of any RBC plan that is filed with |
|---|
| 2298 | 2255 | | 2177the insurance commissioner of any other state. |
|---|
| 2299 | 2256 | | 2178 (2) (a) The commissioner may require a foreign insurer or health organization to file an |
|---|
| 2300 | 2257 | | 2179RBC plan with the commissioner if: |
|---|
| 2301 | 2258 | | 2180 (i) there is a company action level event, regulatory action level event, or authorized |
|---|
| 2302 | 2259 | | 2181control level event with respect to the foreign insurer or health organization as determined |
|---|
| 2303 | 2260 | | 2182under: |
|---|
| 2304 | 2261 | | 2183 (A) the RBC statute applicable in the state of domicile of the insurer or health |
|---|
| 2305 | 2262 | | 2184organization; or |
|---|
| 2306 | 2263 | | 2185 (B) if no RBC statute is in force in that state, under this part; and |
|---|
| 2307 | 2264 | | 2186 (ii) the insurance commissioner of the state of domicile of the foreign insurer or health |
|---|
| 2308 | 2265 | | 2187organization fails to require the foreign insurer or health organization to file an RBC plan in the |
|---|
| 2319 | 2275 | | 2196County] petition a court as permitted under Section 31A-27a-901 with respect to the |
|---|
| 2320 | 2276 | | 2197liquidation of property of a foreign insurer or health organization found in this state if: |
|---|
| 2321 | 2277 | | 2198 (a) a mandatory control level event occurs with respect to any foreign insurer or health |
|---|
| 2322 | 2278 | | 2199organization; and |
|---|
| 2323 | 2279 | | 2200 (b) no domiciliary receiver has been appointed with respect to the foreign insurer or |
|---|
| 2324 | 2280 | | 2201health organization under the rehabilitation and liquidation statute applicable in the state of |
|---|
| 2325 | 2281 | | 2202domicile of the foreign insurer or health organization. |
|---|
| 2326 | 2282 | | 2203 Section 48. Section 31A-27a-105 is amended to read: |
|---|
| 2327 | 2283 | | 2204 31A-27a-105. Jurisdiction. |
|---|
| 2328 | 2284 | | 2205 (1) (a) A delinquency proceeding under this chapter may not be commenced by a |
|---|
| 2329 | 2285 | | 2206person other than the commissioner of this state. |
|---|
| 2330 | 2286 | | 2207 (b) No court has jurisdiction to entertain, hear, or determine a delinquency proceeding |
|---|
| 2331 | 2287 | | 2208commenced by any person other than the commissioner of this state. |
|---|
| 2332 | 2288 | | 2209 (2) Other than in accordance with this chapter, a court of this state has no jurisdiction |
|---|
| 2333 | 2289 | | 2210to entertain, hear, or determine any complaint: |
|---|
| 2334 | 2290 | | 2211 (a) requesting the liquidation, rehabilitation, seizure, sequestration, or receivership of |
|---|
| 2335 | 2291 | | 2212an insurer; or |
|---|
| 2336 | 2292 | | 2213 (b) requesting a stay, an injunction, a restraining order, or other relief preliminary to, |
|---|
| 2337 | 2293 | | 2214incidental to, or relating to a delinquency proceeding. |
|---|
| 2340 | 2295 | | 2216under this chapter, has exclusive jurisdiction of all property of the insurer, wherever located, |
|---|
| 2341 | 2296 | | 2217including property located outside the territorial limits of the state. |
|---|
| 2342 | 2297 | | 2218 (b) The receivership court has original but not exclusive jurisdiction of all civil |
|---|
| 2343 | 2298 | | 2219proceedings arising: |
|---|
| 2344 | 2299 | | 2220 (i) under this chapter; or |
|---|
| 2345 | 2300 | | 2221 (ii) in or related to a delinquency proceeding under this chapter. |
|---|
| 2346 | 2301 | | 2222 (4) In addition to other grounds for jurisdiction provided by the law of this state, a |
|---|
| 2347 | 2302 | | 2223court of this state having jurisdiction of the subject matter has jurisdiction over a person served |
|---|
| 2348 | 2303 | | 2224pursuant to the Utah Rules of Civil Procedure or other applicable provisions of law in an action |
|---|
| 2349 | 2304 | | 2225brought by the receiver if the person served: |
|---|
| 2351 | 2307 | | 2227this Subsection (4)(a), is or has been an agent, broker, or other person who has at any time: |
|---|
| 2352 | 2308 | | 2228 (i) written a policy of insurance for an insurer against which a delinquency proceeding |
|---|
| 2353 | 2309 | | 2229is instituted; or |
|---|
| 2354 | 2310 | | 2230 (ii) acted in any manner whatsoever on behalf of an insurer against which a |
|---|
| 2355 | 2311 | | 2231delinquency proceeding is instituted; |
|---|
| 2356 | 2312 | | 2232 (b) in an action on or incident to a reinsurance contract described in this Subsection |
|---|
| 2357 | 2313 | | 2233(4)(b): |
|---|
| 2358 | 2314 | | 2234 (i) is or has been an insurer or reinsurer who has at any time entered into the contract of |
|---|
| 2359 | 2315 | | 2235reinsurance with an insurer against which a delinquency proceeding is instituted; or |
|---|
| 2360 | 2316 | | 2236 (ii) is an intermediary, agent, or broker of or for the reinsurer, or with respect to the |
|---|
| 2361 | 2317 | | 2237contract; |
|---|
| 2362 | 2318 | | 2238 (c) in an action resulting from or incident to a relationship with the insurer described in |
|---|
| 2363 | 2319 | | 2239this Subsection (4)(c), is or has been an officer, director, manager, trustee, organizer, promoter, |
|---|
| 2364 | 2320 | | 2240or other person in a position of comparable authority or influence over an insurer against which |
|---|
| 2365 | 2321 | | 2241a delinquency proceeding is instituted; |
|---|
| 2369 | 2323 | | 2243time of the institution of the delinquency proceeding against the insurer, holding assets in |
|---|
| 2370 | 2324 | | 2244which the receiver claims an interest on behalf of the insurer; or |
|---|
| 2371 | 2325 | | 2245 (e) in any action on or incident to the obligation described in this Subsection (4)(e), is |
|---|
| 2372 | 2326 | | 2246obligated to the insurer in any way whatsoever. |
|---|
| 2373 | 2327 | | 2247 (5) (a) Subject to Subsection (5)(b), service shall be made upon the person named in |
|---|
| 2374 | 2328 | | 2248the petition in accordance with the Utah Rules of Civil Procedure. |
|---|
| 2375 | 2329 | | 2249 (b) In lieu of service under Subsection (5)(a), upon application to the receivership |
|---|
| 2376 | 2330 | | 2250court, service may be made in such a manner as the receivership court directs whenever it is |
|---|
| 2377 | 2331 | | 2251satisfactorily shown by the commissioner's affidavit: |
|---|
| 2378 | 2332 | | 2252 (i) in the case of a corporation, that the officers of the corporation cannot be served |
|---|
| 2379 | 2333 | | 2253because they have departed from the state or have otherwise concealed themselves with intent |
|---|
| 2380 | 2334 | | 2254to avoid service; |
|---|
| 2381 | 2335 | | 2255 (ii) in the case of an insurer whose business is conducted, at least in part, by an |
|---|
| 2382 | 2336 | | 2256attorney-in-fact, managing general agent, or other similar entity including a reciprocal, Lloyd's |
|---|
| 2384 | 2339 | | 2258agent, or other entity, or its officers of the corporate attorney-in-fact cannot be served because |
|---|
| 2385 | 2340 | | 2259of the individual's departure or concealment; or |
|---|
| 2386 | 2341 | | 2260 (iii) in the case of a natural person, that the person cannot be served because of the |
|---|
| 2387 | 2342 | | 2261person's departure or concealment. |
|---|
| 2388 | 2343 | | 2262 (6) If the receivership court on motion of any party finds that an action should as a |
|---|
| 2389 | 2344 | | 2263matter of substantial justice be tried in a forum outside this state, the receivership court may |
|---|
| 2390 | 2345 | | 2264enter an [appropriate] order to stay further proceedings on the action in this state. |
|---|
| 2391 | 2346 | | 2265 (7) (a) Nothing in this chapter deprives a reinsurer of any contractual right to pursue |
|---|
| 2392 | 2347 | | 2266arbitration except: |
|---|
| 2393 | 2348 | | 2267 (i) as to a claim against the estate; and |
|---|
| 2394 | 2349 | | 2268 (ii) in regard to a contract rejected by the receiver under Section 31A-27a-113. |
|---|
| 2397 | 2351 | | 2270claim or counterclaim is subject to this chapter. |
|---|
| 2398 | 2352 | | 2271 [(8) An action authorized by this chapter shall be brought in the Third District Court |
|---|
| 2399 | 2353 | | 2272for Salt Lake County.] |
|---|
| 2400 | 2354 | | 2273 [(9)] (8) (a) At any time after an order is entered pursuant to Section 31A-27a-201, |
|---|
| 2401 | 2355 | | 227431A-27a-301, or 31A-27a-401, the commissioner or receiver may transfer the case to the |
|---|
| 2402 | 2356 | | 2275county of the principal office of the person proceeded against. |
|---|
| 2403 | 2357 | | 2276 (b) In the event of a transfer under this Subsection [(9)] (8), the court in which the |
|---|
| 2404 | 2358 | | 2277proceeding is commenced shall, upon application of the commissioner or receiver, direct its |
|---|
| 2405 | 2359 | | 2278clerk to transmit the court's file to the clerk of the court to which the case is to be transferred. |
|---|
| 2406 | 2360 | | 2279 (c) After a transfer under this Subsection [(9)] (8), the proceeding shall be conducted in |
|---|
| 2407 | 2361 | | 2280the same manner as if [it] the proceeding had been commenced in the court to which the matter |
|---|
| 2408 | 2362 | | 2281is transferred. |
|---|
| 2409 | 2363 | | 2282 [(10)] (9) (a) Except as provided in Subsection [(10)(c)] (9)(c), a person may not |
|---|
| 2410 | 2364 | | 2283intervene in a liquidation proceeding in this state for the purpose of seeking or obtaining |
|---|
| 2411 | 2365 | | 2284payment of a judgment, lien, or other claim of any kind. |
|---|
| 2412 | 2366 | | 2285 (b) Except as provided in Subsection [(10)(c)] (9)(c), the claims procedure set for this |
|---|
| 2413 | 2367 | | 2286chapter constitute the exclusive means for obtaining payment of claims from the liquidation |
|---|
| 2414 | 2368 | | 2287estate. |
|---|
| 2426 | 2379 | | 2297 [(11)] (10) (a) Notwithstanding the other provisions of this section, this chapter does |
|---|
| 2427 | 2380 | | 2298not confer jurisdiction on the receivership court to resolve coverage disputes between an |
|---|
| 2428 | 2381 | | 2299affected guaranty association and those asserting claims against the affected guaranty |
|---|
| 2429 | 2382 | | 2300association resulting from the initiation of a receivership proceeding under this chapter, except |
|---|
| 2430 | 2383 | | 2301to the extent that the affected guaranty association otherwise expressly consents to the |
|---|
| 2431 | 2384 | | 2302jurisdiction of the receivership court pursuant to a plan of rehabilitation or liquidation that |
|---|
| 2432 | 2385 | | 2303resolves its obligations to covered policyholders. |
|---|
| 2433 | 2386 | | 2304 (b) The determination of a dispute with respect to the statutory coverage obligations of |
|---|
| 2434 | 2387 | | 2305an affected guaranty association by a court or administrative agency or body with jurisdiction |
|---|
| 2435 | 2388 | | 2306in the affected guaranty association's state of domicile is binding and conclusive as to the |
|---|
| 2436 | 2389 | | 2307affected guaranty association's claim in the liquidation proceeding. |
|---|
| 2437 | 2390 | | 2308 [(12)] (11) Upon the request of the receiver, the receivership court or the presiding |
|---|
| 2438 | 2391 | | 2309judge of the [Third District Court for Salt Lake County] court with jurisdiction under Title |
|---|
| 2439 | 2392 | | 231078A, Judiciary and Judicial Administration, may order that one judge hear all cases and |
|---|
| 2440 | 2393 | | 2311controversies arising out of or related to the delinquency proceeding. |
|---|
| 2441 | 2394 | | 2312 [(13)] (12) A delinquency proceeding is exempt from any program maintained for the |
|---|
| 2442 | 2395 | | 2313early closure of civil actions. |
|---|
| 2443 | 2396 | | 2314 [(14)] (13) In a proceeding, case, or controversy arising out of or related to a |
|---|
| 2444 | 2397 | | 2315delinquency proceeding, to the extent there is a conflict between the Utah Rules of Civil |
|---|
| 2445 | 2398 | | 2316Procedure and this chapter, the provisions of this chapter govern the proceeding, case, or |
|---|
| 2446 | 2399 | | 2317controversy. |
|---|
| 2447 | 2400 | | 2318 Section 49. Section 31A-27a-201 is amended to read: |
|---|
| 2454 | 2407 | | 2324 (i) an insurer domiciled in this state; |
|---|
| 2455 | 2408 | | 2325 (ii) an unauthorized insurer; or |
|---|
| 2456 | 2409 | | 2326 (iii) pursuant to Section 31A-27a-901, a foreign insurer; |
|---|
| 2457 | 2410 | | 2327 (b) alleging that: |
|---|
| 2458 | 2411 | | 2328 (i) there exists grounds that would justify a court order for a formal delinquency |
|---|
| 2459 | 2412 | | 2329proceeding against the insurer under this chapter; and |
|---|
| 2460 | 2413 | | 2330 (ii) the interests of policyholders, creditors, or the public will be endangered by delay; |
|---|
| 2461 | 2414 | | 2331and |
|---|
| 2462 | 2415 | | 2332 (c) setting forth the contents of a seizure order considered necessary by the |
|---|
| 2463 | 2416 | | 2333commissioner. |
|---|
| 2464 | 2417 | | 2334 (2) (a) Upon a filing under Subsection (1), the receivership court may issue the |
|---|
| 2465 | 2418 | | 2335requested seizure order: |
|---|
| 2466 | 2419 | | 2336 (i) immediately, ex parte, and without notice or hearing; |
|---|
| 2467 | 2420 | | 2337 (ii) that directs the commissioner to take possession and control of: |
|---|
| 2468 | 2421 | | 2338 (A) all or a part of the property, accounts, and records of an insurer; and |
|---|
| 2469 | 2422 | | 2339 (B) the premises occupied by the insurer for transaction of the insurer's business; and |
|---|
| 2470 | 2423 | | 2340 (iii) that until further order of the receivership court, enjoins the insurer and its officers, |
|---|
| 2471 | 2424 | | 2341managers, agents, and employees from disposition of its property and from the transaction of |
|---|
| 2472 | 2425 | | 2342its business except with the written consent of the commissioner. |
|---|
| 2473 | 2426 | | 2343 (b) A person having possession or control of and refusing to deliver any of the records |
|---|
| 2474 | 2427 | | 2344or assets of a person against whom a seizure order is issued under this Subsection (2) is guilty |
|---|
| 2475 | 2428 | | 2345of a class B misdemeanor. |
|---|
| 2476 | 2429 | | 2346 (3) (a) A petition that requests injunctive relief: |
|---|
| 2477 | 2430 | | 2347 (i) shall be verified by the commissioner or the commissioner's designee; and |
|---|
| 2478 | 2431 | | 2348 (ii) is not required to plead or prove irreparable harm or inadequate remedy at law. |
|---|
| 2479 | 2432 | | 2349 (b) The commissioner shall provide only the notice that the receivership court may |
|---|
| 2483 | 2435 | | 2351 (4) (a) The receivership court shall specify in the seizure order the duration of the |
|---|
| 2484 | 2436 | | 2352seizure, which shall be the time the receivership court considers necessary for the |
|---|
| 2485 | 2437 | | 2353commissioner to ascertain the condition of the insurer. |
|---|
| 2486 | 2438 | | 2354 (b) The receivership court may from time to time: |
|---|
| 2487 | 2439 | | 2355 (i) hold a hearing that the receivership court considers desirable: |
|---|
| 2488 | 2440 | | 2356 (A) (I) on motion of the commissioner; |
|---|
| 2489 | 2441 | | 2357 (II) on motion of the insurer; or |
|---|
| 2490 | 2442 | | 2358 (III) on its own motion; and |
|---|
| 2491 | 2443 | | 2359 (B) after the notice the receivership court considers appropriate; and |
|---|
| 2492 | 2444 | | 2360 (ii) extend, shorten, or modify the terms of the seizure order. |
|---|
| 2493 | 2445 | | 2361 (c) The receivership court shall vacate the seizure order if the commissioner fails to |
|---|
| 2494 | 2446 | | 2362commence a formal proceeding under this chapter after having had a reasonable opportunity to |
|---|
| 2495 | 2447 | | 2363commence a formal proceeding under this chapter. |
|---|
| 2496 | 2448 | | 2364 (d) An order of the receivership court pursuant to a formal proceeding under this |
|---|
| 2497 | 2449 | | 2365chapter vacates the seizure order. |
|---|
| 2498 | 2450 | | 2366 (5) Entry of a seizure order under this section does not constitute a breach or an |
|---|
| 2499 | 2451 | | 2367anticipatory breach of a contract of the insurer. |
|---|
| 2500 | 2452 | | 2368 (6) (a) An insurer subject to an ex parte seizure order under this section may petition |
|---|
| 2501 | 2453 | | 2369the receivership court at any time after the issuance of a seizure order for a hearing and review |
|---|
| 2502 | 2454 | | 2370of the basis for the seizure order. |
|---|
| 2503 | 2455 | | 2371 (b) The receivership court shall hold the hearing and review requested under this |
|---|
| 2504 | 2456 | | 2372Subsection (6) not more than 15 days after the day on which the request is received or as soon |
|---|
| 2505 | 2457 | | 2373thereafter as the court may allow. |
|---|
| 2506 | 2458 | | 2374 (c) A hearing under this Subsection (6): |
|---|
| 2507 | 2459 | | 2375 (i) may be held privately in chambers; and |
|---|
| 2508 | 2460 | | 2376 (ii) shall be held privately in chambers if the insurer proceeded against requests that [it] |
|---|
| 2515 | 2467 | | 2382 (b) An order under this Subsection (7) that notice be given may not stay the effect of a |
|---|
| 2516 | 2468 | | 2383seizure order previously issued by the receivership court. |
|---|
| 2517 | 2469 | | 2384 (8) Whenever the commissioner makes a seizure as provided in Subsection (2), on the |
|---|
| 2518 | 2470 | | 2385demand of the commissioner, it shall be the duty of the sheriff of a county of this state, and of |
|---|
| 2519 | 2471 | | 2386the police department of a municipality in the state to furnish the commissioner with necessary |
|---|
| 2520 | 2472 | | 2387deputies or officers to assist the commissioner in making and enforcing the seizure order. |
|---|
| 2521 | 2473 | | 2388 (9) The commissioner may appoint a receiver under this section. The insurer shall pay |
|---|
| 2522 | 2474 | | 2389the costs and expenses of the receiver appointed. |
|---|
| 2523 | 2475 | | 2390 Section 50. Section 31A-27a-206 is amended to read: |
|---|
| 2524 | 2476 | | 2391 31A-27a-206. Confidentiality. |
|---|
| 2525 | 2477 | | 2392 (1) (a) Except as provided in Subsection (1)(b), in a delinquency proceeding or a |
|---|
| 2526 | 2478 | | 2393judicial review under Section 31A-27a-201: |
|---|
| 2527 | 2479 | | 2394 (i) all records of the insurer, department files, court records and papers, and other |
|---|
| 2528 | 2480 | | 2395documents, so far as they pertain to or are a part of the record of the proceedings, are |
|---|
| 2529 | 2481 | | 2396confidential; and |
|---|
| 2530 | 2482 | | 2397 (ii) a clerk of the court shall hold a paper filed with the clerk in a confidential file as |
|---|
| 2531 | 2483 | | 2398permitted by law. |
|---|
| 2532 | 2484 | | 2399 [(ii) a paper filed with the clerk of the Third District Court for Salt Lake County shall |
|---|
| 2533 | 2485 | | 2400be held by the clerk in a confidential file as permitted by law.] |
|---|
| 2534 | 2486 | | 2401 (b) The items listed in Subsection (1)(a) are subject to Subsection (1)(a): |
|---|
| 2535 | 2487 | | 2402 (i) except to the extent necessary to obtain compliance with an order entered in |
|---|
| 2536 | 2488 | | 2403connection with the proceeding; and |
|---|
| 2540 | 2490 | | 2405 (A) the [Third District Court for Salt Lake County] court, after hearing argument in |
|---|
| 2541 | 2491 | | 2406chambers, orders otherwise; |
|---|
| 2542 | 2492 | | 2407 (B) the insurer requests that the matter be made public; or |
|---|
| 2543 | 2493 | | 2408 (C) the commissioner applies for an order under Section 31A-27a-207. |
|---|
| 2544 | 2494 | | 2409 (2) (a) If the recipient agrees to maintain the confidentiality of the document, material, |
|---|
| 2545 | 2495 | | 2410or other information, the commissioner or rehabilitator may share a document, materials, or |
|---|
| 2546 | 2496 | | 2411other information in the possession, custody, or control of the department, pertaining to an |
|---|
| 2548 | 2499 | | 2413 (i) another state, federal, and international regulatory agency; |
|---|
| 2549 | 2500 | | 2414 (ii) the National Association of Insurance Commissioners and its affiliates or |
|---|
| 2550 | 2501 | | 2415subsidiaries; |
|---|
| 2551 | 2502 | | 2416 (iii) a state, federal, and international law enforcement authority; |
|---|
| 2552 | 2503 | | 2417 (iv) an auditor appointed by the receivership court in accordance with Section |
|---|
| 2553 | 2504 | | 241831A-27a-805; or |
|---|
| 2554 | 2505 | | 2419 (v) a representative of an affected guaranty association. |
|---|
| 2555 | 2506 | | 2420 (b) If the domiciliary receiver believes that certain information is sensitive, the receiver |
|---|
| 2556 | 2507 | | 2421may share that information subject to a continuation of the confidentiality obligations beyond |
|---|
| 2557 | 2508 | | 2422the period allowed in Subsection (3). |
|---|
| 2558 | 2509 | | 2423 (c) This section does not limit the power of the commissioner to disclose information |
|---|
| 2559 | 2510 | | 2424under other applicable law. |
|---|
| 2560 | 2511 | | 2425 (3) (a) A domiciliary receiver shall permit a commissioner or a guaranty association of |
|---|
| 2561 | 2512 | | 2426another state to obtain a listing of policyholders and certificate holders residing in the |
|---|
| 2562 | 2513 | | 2427requestor's state, including current addresses and summary policy information, if the |
|---|
| 2563 | 2514 | | 2428commissioner or the guaranty association of another state agrees: |
|---|
| 2564 | 2515 | | 2429 (i) to maintain the confidentiality of the record; and |
|---|
| 2565 | 2516 | | 2430 (ii) that the record will be used only for regulatory or guaranty association purposes. |
|---|
| 2568 | 2518 | | 2432hours. |
|---|
| 2569 | 2519 | | 2433 (c) If the domiciliary receiver believes that certain information described in this |
|---|
| 2570 | 2520 | | 2434Subsection (3) is sensitive and disclosure might cause a diminution in recovery, the receiver |
|---|
| 2571 | 2521 | | 2435may apply for a protective order imposing additional restrictions on access. |
|---|
| 2572 | 2522 | | 2436 (4) (a) The confidentiality obligations imposed by this section shall end upon the entry |
|---|
| 2573 | 2523 | | 2437of an order of liquidation against the insurer, unless: |
|---|
| 2574 | 2524 | | 2438 (i) otherwise agreed to by the parties; or |
|---|
| 2575 | 2525 | | 2439 (ii) pursuant to an order of the receivership court. |
|---|
| 2576 | 2526 | | 2440 (b) A continuation of confidentiality as provided in Subsection (2) does not apply to an |
|---|
| 2577 | 2527 | | 2441insurer record necessary for a guaranty association to discharge its statutory responsibilities. |
|---|
| 2578 | 2528 | | 2442 (5) A waiver of an applicable privilege or claim of confidentiality does not occur as a |
|---|
| 2580 | 2531 | | 2444pursuant to this section. |
|---|
| 2581 | 2532 | | 2445 Section 51. Section 31A-27a-207 is amended to read: |
|---|
| 2582 | 2533 | | 2446 31A-27a-207. Grounds for rehabilitation or liquidation. |
|---|
| 2583 | 2534 | | 2447 (1) The commissioner may [file in the Third District Court for Salt Lake County a |
|---|
| 2584 | 2535 | | 2448petition] petition a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 2585 | 2536 | | 2449Administration, with respect to an insurer domiciled in this state or an unauthorized insurer for |
|---|
| 2586 | 2537 | | 2450an order of rehabilitation or liquidation on any one or more of the following grounds: |
|---|
| 2587 | 2538 | | 2451 (a) the insurer is impaired; |
|---|
| 2588 | 2539 | | 2452 (b) the insurer is insolvent; |
|---|
| 2589 | 2540 | | 2453 (c) subject to Subsection (2), the insurer is about to become insolvent; |
|---|
| 2590 | 2541 | | 2454 (d) (i) the insurer neglects or refuses to comply with an order of the commissioner to |
|---|
| 2591 | 2542 | | 2455make good within the time prescribed by law any deficiency; |
|---|
| 2592 | 2543 | | 2456 (ii) if a stock company, if its capital and minimum required surplus is impaired; or |
|---|
| 2593 | 2544 | | 2457 (iii) if a company other than a stock company, if its surplus is impaired; |
|---|
| 2597 | 2546 | | 2459 (i) converts, wastes, or conceals property of the insurer; or |
|---|
| 2598 | 2547 | | 2460 (ii) otherwise improperly disposes of, dissipates, uses, releases, transfers, sells, assigns, |
|---|
| 2599 | 2548 | | 2461hypothecates, or removes the property of the insurer; |
|---|
| 2600 | 2549 | | 2462 (f) the insurer is in such condition that the insurer could not meet the requirements for |
|---|
| 2601 | 2550 | | 2463organization and authorization as required by law, except as to the amount of: |
|---|
| 2602 | 2551 | | 2464 (i) the original surplus required of a stock company under Sections 31A-5-211 and |
|---|
| 2603 | 2552 | | 246531A-8-209; and |
|---|
| 2604 | 2553 | | 2466 (ii) the surplus required of a company other than a stock company in excess of the |
|---|
| 2605 | 2554 | | 2467minimum surplus required to be maintained; |
|---|
| 2606 | 2555 | | 2468 (g) the insurer, its parent company, its subsidiary, or its affiliate: |
|---|
| 2607 | 2556 | | 2469 (i) conceals, removes, alters, destroys, or fails to establish and maintain records and |
|---|
| 2608 | 2557 | | 2470other pertinent material adequate for the determination of the financial condition of the insurer |
|---|
| 2609 | 2558 | | 2471by examination under Section 31A-2-203; or |
|---|
| 2610 | 2559 | | 2472 (ii) fails to properly administer claims or maintain claims records that are adequate for |
|---|
| 2611 | 2560 | | 2473the determination of its outstanding claims liability; |
|---|
| 2613 | 2563 | | 2475time of instituting a proceeding under this chapter, it appears to the commissioner that upon |
|---|
| 2614 | 2564 | | 2476good cause shown, it is not in the best interest of the policyholders, creditors, or the public to |
|---|
| 2615 | 2565 | | 2477proceed with the conduct of the business of the insurer; |
|---|
| 2616 | 2566 | | 2478 (i) the insurer is in such condition that the further transaction of business would be |
|---|
| 2617 | 2567 | | 2479hazardous financially, according to Subsection 31A-17-609(3) or otherwise, to its |
|---|
| 2618 | 2568 | | 2480policyholders, creditors, or the public; |
|---|
| 2619 | 2569 | | 2481 (j) there is reasonable cause to believe that: |
|---|
| 2620 | 2570 | | 2482 (i) there has been: |
|---|
| 2621 | 2571 | | 2483 (A) embezzlement from the insurer; |
|---|
| 2622 | 2572 | | 2484 (B) wrongful sequestration or diversion of the insurer's property; |
|---|
| 2625 | 2574 | | 2486 (D) other illegal conduct in, by, or with respect to the insurer; and |
|---|
| 2626 | 2575 | | 2487 (ii) the act described in Subsection (1)(j)(i) if established would endanger assets in an |
|---|
| 2627 | 2576 | | 2488amount threatening the solvency of the insurer; |
|---|
| 2628 | 2577 | | 2489 (k) control of the insurer is in a person who is: |
|---|
| 2629 | 2578 | | 2490 (i) dishonest; |
|---|
| 2630 | 2579 | | 2491 (ii) untrustworthy; or |
|---|
| 2631 | 2580 | | 2492 (iii) so lacking in insurance company managerial experience or capability as to be |
|---|
| 2632 | 2581 | | 2493hazardous to policyholders, creditors, or the public; |
|---|
| 2633 | 2582 | | 2494 (l) if: |
|---|
| 2634 | 2583 | | 2495 (i) a person who in fact has executive authority in the insurer, whether an officer, |
|---|
| 2635 | 2584 | | 2496manager, general agent, director, trustee, employee, shareholder, or other person: |
|---|
| 2636 | 2585 | | 2497 (A) refuses to be examined under oath by the commissioner concerning the insurer's |
|---|
| 2637 | 2586 | | 2498affairs, whether in this state or elsewhere; or |
|---|
| 2638 | 2587 | | 2499 (B) if examined under oath, refuses to divulge pertinent information reasonably known |
|---|
| 2639 | 2588 | | 2500to the person; and |
|---|
| 2640 | 2589 | | 2501 (ii) after reasonable notice of the facts described in Subsection (1)(l)(i), the insurer fails |
|---|
| 2641 | 2590 | | 2502promptly and effectively to terminate: |
|---|
| 2642 | 2591 | | 2503 (A) the employment or status of the person; and |
|---|
| 2643 | 2592 | | 2504 (B) all of the person's influence on management; |
|---|
| 2654 | 2602 | | 251331A-16-103, substantially its entire property or business; or |
|---|
| 2655 | 2603 | | 2514 (ii) enters into a transaction the effect of which is to merge, consolidate, or reinsure |
|---|
| 2656 | 2604 | | 2515substantially its entire property or business in or with the property or business of any other |
|---|
| 2657 | 2605 | | 2516person; |
|---|
| 2658 | 2606 | | 2517 (o) the insurer or its property has been or is the subject of an application for the |
|---|
| 2659 | 2607 | | 2518appointment of a receiver, trustee, custodian, conservator, sequestrator, or similar fiduciary of |
|---|
| 2660 | 2608 | | 2519the insurer or its property otherwise than as authorized under the insurance laws of this state; |
|---|
| 2661 | 2609 | | 2520 (p) within the previous five years the insurer willfully and continuously violates: |
|---|
| 2662 | 2610 | | 2521 (i) its charter or articles of incorporation; |
|---|
| 2663 | 2611 | | 2522 (ii) its bylaws; |
|---|
| 2664 | 2612 | | 2523 (iii) an insurance law of this state; or |
|---|
| 2665 | 2613 | | 2524 (iv) a valid order of the commissioner; |
|---|
| 2666 | 2614 | | 2525 (q) the insurer fails to pay within 60 days after the due date: |
|---|
| 2667 | 2615 | | 2526 (i) (A) an obligation to any state or any subdivision of a state; or |
|---|
| 2668 | 2616 | | 2527 (B) a judgment entered in any state, if the court in which the judgment is entered has |
|---|
| 2669 | 2617 | | 2528jurisdiction over the subject matter; and |
|---|
| 2670 | 2618 | | 2529 (ii) except that nonpayment is not a ground until 60 days after a good faith effort by the |
|---|
| 2671 | 2619 | | 2530insurer to contest the obligation has been terminated, whether it is before the commissioner or |
|---|
| 2672 | 2620 | | 2531in the courts; |
|---|
| 2673 | 2621 | | 2532 (r) the insurer systematically: |
|---|
| 2674 | 2622 | | 2533 (i) engages in the practice of: |
|---|
| 2675 | 2623 | | 2534 (A) reaching settlements with and obtaining releases from claimants; and |
|---|
| 2676 | 2624 | | 2535 (B) unreasonably delaying payment, or failing to pay the agreed-upon settlements; or |
|---|
| 2682 | 2630 | | 2540 (t) the board of directors or the holders of a majority of the shares entitled to vote, or a |
|---|
| 2683 | 2631 | | 2541majority of those individuals entitled to the control of those entities specified in Section |
|---|
| 2684 | 2632 | | 254231A-27a-104, request or consent to rehabilitation or liquidation under this chapter; |
|---|
| 2685 | 2633 | | 2543 (u) (i) the insurer does not comply with its domiciliary state's requirements for issuance |
|---|
| 2686 | 2634 | | 2544to it of a certificate of authority; or |
|---|
| 2687 | 2635 | | 2545 (ii) the insurer's certificate of authority is revoked by its state of domicile; or |
|---|
| 2688 | 2636 | | 2546 (v) when authorized by Chapter 17, Part 6, Risk-Based Capital. |
|---|
| 2689 | 2637 | | 2547 (2) For purposes of this section, an insurer is about to become insolvent if it is |
|---|
| 2690 | 2638 | | 2548reasonably anticipated that the insurer will not have liquid assets to meet its current obligations |
|---|
| 2691 | 2639 | | 2549for the next 90 days. |
|---|
| 2692 | 2640 | | 2550 Section 52. Section 31A-27a-209 is amended to read: |
|---|
| 2693 | 2641 | | 2551 31A-27a-209. Effect of order of rehabilitation or liquidation. |
|---|
| 2694 | 2642 | | 2552 (1) The filing or recording of an order of receivership with the following imparts the |
|---|
| 2695 | 2643 | | 2553same notice as a deed, bill of sale, or other evidence of title filed or recorded would have |
|---|
| 2696 | 2644 | | 2554imparted: |
|---|
| 2697 | 2645 | | 2555 (a) the [Third District Court for Salt Lake County] court; |
|---|
| 2698 | 2646 | | 2556 (b) the recorder of deeds of the county in which the principal business of the insurer is |
|---|
| 2699 | 2647 | | 2557conducted; or |
|---|
| 2700 | 2648 | | 2558 (c) in the case of real estate, with the recorder of deeds of the county where the |
|---|
| 2701 | 2649 | | 2559property is located. |
|---|
| 2702 | 2650 | | 2560 (2) The filing of a petition commencing delinquency proceedings under this chapter or |
|---|
| 2703 | 2651 | | 2561the entry of an order of seizure, rehabilitation, or liquidation does not constitute a breach or an |
|---|
| 2704 | 2652 | | 2562anticipatory breach of any contract or lease of the insurer. |
|---|
| 2705 | 2653 | | 2563 (3) (a) The receiver may appoint one or more special deputies. |
|---|
| 2706 | 2654 | | 2564 (b) A special deputy: |
|---|
| 2707 | 2655 | | 2565 (i) has the powers and responsibilities of the receiver granted under this section, unless |
|---|
| 2712 | 2659 | | 2568 (c) The receiver may employ or contract with: |
|---|
| 2713 | 2660 | | 2569 (i) legal counsel; |
|---|
| 2714 | 2661 | | 2570 (ii) one or more actuaries; |
|---|
| 2715 | 2662 | | 2571 (iii) one or more accountants; |
|---|
| 2716 | 2663 | | 2572 (iv) one or more appraisers; |
|---|
| 2717 | 2664 | | 2573 (v) one or more consultants; |
|---|
| 2718 | 2665 | | 2574 (vi) one or more clerks; |
|---|
| 2719 | 2666 | | 2575 (vii) one or more assistants; and |
|---|
| 2720 | 2667 | | 2576 (viii) other personnel as may be considered necessary. |
|---|
| 2721 | 2668 | | 2577 (d) A special deputy or other person with whom the receiver contracts under this |
|---|
| 2722 | 2669 | | 2578Subsection (3): |
|---|
| 2723 | 2670 | | 2579 (i) is considered to be an agent of the commissioner only in the commissioner's |
|---|
| 2724 | 2671 | | 2580capacity as receiver; and |
|---|
| 2725 | 2672 | | 2581 (ii) is not considered an agent of the state. |
|---|
| 2726 | 2673 | | 2582 (e) The provisions of any law governing the procurement of goods and services by the |
|---|
| 2727 | 2674 | | 2583state do not apply to a contract entered into by the commissioner as receiver. |
|---|
| 2728 | 2675 | | 2584 (f) The compensation of a special deputy, employee, or contractor and all expenses of |
|---|
| 2729 | 2676 | | 2585taking possession of the insurer and of conducting the receivership shall be: |
|---|
| 2730 | 2677 | | 2586 (i) determined by the receiver, with the approval of the receivership court in |
|---|
| 2731 | 2678 | | 2587accordance with Section 31A-27a-115; and |
|---|
| 2732 | 2679 | | 2588 (ii) paid out of the property of the insurer. |
|---|
| 2733 | 2680 | | 2589 (g) (i) If the receiver, in the receiver's sole discretion, considers it necessary to the |
|---|
| 2734 | 2681 | | 2590proper performance of the receiver's duties under this chapter, the receiver may appoint an |
|---|
| 2735 | 2682 | | 2591advisory committee of policyholders, claimants, or other creditors including guaranty |
|---|
| 2736 | 2683 | | 2592associations. |
|---|
| 2744 | 2691 | | 2599 31A-44-501. Application for court order for rehabilitation or liquidation. |
|---|
| 2745 | 2692 | | 2600 (1) The department may request that the attorney general petition [a district court in the |
|---|
| 2746 | 2693 | | 2601state] a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, or a |
|---|
| 2747 | 2694 | | 2602federal bankruptcy court that has exercised jurisdiction over a provider's facility, for an order |
|---|
| 2748 | 2695 | | 2603that appoints a trustee to rehabilitate or liquidate the facility if: |
|---|
| 2749 | 2696 | | 2604 (a) the department determines that: |
|---|
| 2750 | 2697 | | 2605 (i) the provider is financially unsound or is unable to meet the income or available cash |
|---|
| 2751 | 2698 | | 2606projections described in the provider's disclosure statement; and |
|---|
| 2752 | 2699 | | 2607 (ii) the provider's ability to fully perform the provider's obligations under a continuing |
|---|
| 2753 | 2700 | | 2608care contract is endangered; or |
|---|
| 2754 | 2701 | | 2609 (b) the provider is bankrupt, insolvent, or has filed for protection from creditors under |
|---|
| 2755 | 2702 | | 2610a federal or state reorganization, bankruptcy, or insolvency law. |
|---|
| 2756 | 2703 | | 2611 (2) A court that evaluates a petition filed under Subsection (1) regarding a provider: |
|---|
| 2757 | 2704 | | 2612 (a) shall evaluate the best interests of a person that has contracted with the provider; |
|---|
| 2758 | 2705 | | 2613and |
|---|
| 2759 | 2706 | | 2614 (b) may require the proceeds of a lien imposed under Section 31A-44-601 to be used to |
|---|
| 2760 | 2707 | | 2615pay an entrance fee to another facility on behalf of a resident of the provider's facility. |
|---|
| 2761 | 2708 | | 2616 Section 54. Section 35A-4-308 is amended to read: |
|---|
| 2762 | 2709 | | 2617 35A-4-308. Bonds to ensure compliance. |
|---|
| 2763 | 2710 | | 2618 (1) (a) The division, whenever [it] the division considers it necessary to ensure |
|---|
| 2764 | 2711 | | 2619compliance with this chapter, may require any employer, subject to the contribution imposed |
|---|
| 2768 | 2713 | | 2621 (b) The bond or security may be sold by the division at public sale, if it becomes |
|---|
| 2769 | 2714 | | 2622necessary, in order to recover any tax, interest, or penalty due. |
|---|
| 2770 | 2715 | | 2623 (c) Notice of the sale may be served upon the employer who deposited the securities |
|---|
| 2771 | 2716 | | 2624personally or by mail. If by mail, notice sent to the last-known address as the same appears in |
|---|
| 2772 | 2717 | | 2625the records of the division is sufficient for purposes of this requirement. |
|---|
| 2773 | 2718 | | 2626 (d) Upon the sale, the surplus, if any, above the amounts due, shall be returned to the |
|---|
| 2774 | 2719 | | 2627employer who deposited the security. |
|---|
| 2775 | 2720 | | 2628 (2) (a) If an employer fails to comply with Subsection (1), [the district court of the |
|---|
| 2777 | 2723 | | 2630upon the commencement of a suit by the division for that purpose, enjoin the employer from |
|---|
| 2778 | 2724 | | 2631further employing workers in this state or continuing in business until the employer has |
|---|
| 2779 | 2725 | | 2632complied with Subsection (1). |
|---|
| 2780 | 2726 | | 2633 (b) Upon filing of a suit for such purpose by the division, the court shall set a date for |
|---|
| 2781 | 2727 | | 2634hearing and cause notice to be served upon the employer. The hearing shall be not less than |
|---|
| 2782 | 2728 | | 2635five nor more than 15 days from the service of the notice. |
|---|
| 2783 | 2729 | | 2636 Section 55. Section 35A-4-314 is amended to read: |
|---|
| 2784 | 2730 | | 2637 35A-4-314. Disclosure of information for debt collection -- Court order -- |
|---|
| 2785 | 2731 | | 2638Procedures -- Use of information restrictions -- Penalties. |
|---|
| 2786 | 2732 | | 2639 (1) The division shall disclose to a creditor who has obtained judgment against a debtor |
|---|
| 2787 | 2733 | | 2640the name and address of the last known employer of the debtor if: |
|---|
| 2788 | 2734 | | 2641 (a) the judgment creditor obtains a court order requiring disclosure of the information |
|---|
| 2789 | 2735 | | 2642as described in Subsection (2); and |
|---|
| 2790 | 2736 | | 2643 (b) the judgment creditor completes the requirements described in Subsection (3), |
|---|
| 2791 | 2737 | | 2644including entering into a written agreement with the division. |
|---|
| 2792 | 2738 | | 2645 (2) (a) A court shall grant an order to disclose the information described in Subsection |
|---|
| 2793 | 2739 | | 2646(1) if, under the applicable Utah Rules of Civil Procedure: |
|---|
| 2796 | 2741 | | 2648judgment, and serves a copy of the motion to the judgment debtor and the division; |
|---|
| 2797 | 2742 | | 2649 (ii) the judgment debtor and the division have the opportunity to respond to the motion; |
|---|
| 2798 | 2743 | | 2650and |
|---|
| 2799 | 2744 | | 2651 (iii) the court denies or overrules any objection to disclosure in the judgment debtor's |
|---|
| 2800 | 2745 | | 2652and the division's response. |
|---|
| 2801 | 2746 | | 2653 (b) A court may not grant an order to disclose the information described in Subsection |
|---|
| 2802 | 2747 | | 2654(1), if the court finds that the division has established that disclosure will have a negative effect |
|---|
| 2803 | 2748 | | 2655on: |
|---|
| 2804 | 2749 | | 2656 (i) the willingness of employers to report wage and employment information; or |
|---|
| 2805 | 2750 | | 2657 (ii) the willingness of individuals to file claims for unemployment benefits. |
|---|
| 2806 | 2751 | | 2658 (c) The requirements of Subsection 63G-2-202(7) and Section 63G-2-207 do not apply |
|---|
| 2807 | 2752 | | 2659to information sought through a court order as described in this section. |
|---|
| 2809 | 2755 | | 2661 (a) provide to the division a copy of the order requiring the disclosure; |
|---|
| 2810 | 2756 | | 2662 (b) enter into a written agreement with the division, in a form approved by the division; |
|---|
| 2811 | 2757 | | 2663 (c) pay the division a reasonable fee that reflects the cost for processing the request as |
|---|
| 2812 | 2758 | | 2664established by department rule; and |
|---|
| 2813 | 2759 | | 2665 (d) comply with the data safeguard and security measures described in 20 C.F.R. Sec. |
|---|
| 2814 | 2760 | | 2666603.9 with respect to information received from the division under this section. |
|---|
| 2815 | 2761 | | 2667 (4) If a judgment creditor complies with Subsection (3), the division shall provide the |
|---|
| 2816 | 2762 | | 2668information to the judgment creditor within 14 business days after the day on which the |
|---|
| 2817 | 2763 | | 2669creditor complies with Subsection (3). |
|---|
| 2818 | 2764 | | 2670 (5) A judgment creditor may not: |
|---|
| 2819 | 2765 | | 2671 (a) use the information obtained under this section for a purpose other than satisfying |
|---|
| 2820 | 2766 | | 2672the judgment between the creditor and debtor; or |
|---|
| 2821 | 2767 | | 2673 (b) disclose or share the information with any other person. |
|---|
| 2825 | 2769 | | 2675under this section for compliance with the data safeguard and security measures described in 20 |
|---|
| 2826 | 2770 | | 2676C.F.R. Sec. 603.9. |
|---|
| 2827 | 2771 | | 2677 (7) If a judgment creditor or other party fails to comply with the data safeguard and |
|---|
| 2828 | 2772 | | 2678security measures under 20 C.F.R. Sec. 603.9, the judgment creditor or other party is subject to |
|---|
| 2829 | 2773 | | 2679a civil penalty of no more than $10,000 enforceable by the Utah Office of the Attorney General |
|---|
| 2830 | 2774 | | 2680as follows: |
|---|
| 2831 | 2775 | | 2681 (a) the attorney general, on the attorney general's own behalf or on behalf of the |
|---|
| 2832 | 2776 | | 2682division, [may file an action in district court] may bring an action in a court with jurisdiction |
|---|
| 2833 | 2777 | | 2683under Title 78A, Judiciary and Judicial Administration, to enforce the civil penalty; and |
|---|
| 2834 | 2778 | | 2684 (b) if the attorney general prevails in enforcing the civil penalty against the judgment |
|---|
| 2835 | 2779 | | 2685creditor or other party: |
|---|
| 2836 | 2780 | | 2686 (i) the attorney general is entitled to an award for reasonable attorney fees, court costs, |
|---|
| 2837 | 2781 | | 2687and investigative expenses; and |
|---|
| 2838 | 2782 | | 2688 (ii) the civil penalty shall be deposited into the special administrative expense account |
|---|
| 2839 | 2783 | | 2689described in Subsection 35A-4-506(1). |
|---|
| 2840 | 2784 | | 2690 Section 56. Section 48-1d-111 is amended to read: |
|---|
| 2842 | 2787 | | 2692 (1) If a person required by this chapter to sign a record or deliver a record to the |
|---|
| 2843 | 2788 | | 2693division for filing under this chapter does not do so, any other person that is aggrieved may |
|---|
| 2844 | 2789 | | 2694petition [the district court] a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 2845 | 2790 | | 2695Administration, to order: |
|---|
| 2846 | 2791 | | 2696 (a) the person to sign the record; |
|---|
| 2847 | 2792 | | 2697 (b) the person to deliver the record to the division for filing; or |
|---|
| 2848 | 2793 | | 2698 (c) the division to file the record unsigned. |
|---|
| 2849 | 2794 | | 2699 (2) If a petitioner under Subsection (1) is not the partnership or foreign limited liability |
|---|
| 2850 | 2795 | | 2700partnership to which the record pertains, the petitioner shall make the partnership or foreign |
|---|
| 2853 | 2797 | | 2702 (3) A record filed under Subsection (1)(c) is effective without being signed. |
|---|
| 2854 | 2798 | | 2703 Section 57. Section 48-1d-116 is amended to read: |
|---|
| 2855 | 2799 | | 2704 48-1d-116. Duty of division to file -- Review of refusal to file -- Transmission of |
|---|
| 2856 | 2800 | | 2705information by division. |
|---|
| 2857 | 2801 | | 2706 (1) The division shall file a record delivered to the division for filing which satisfies |
|---|
| 2858 | 2802 | | 2707this chapter. The duty of the division under this section is ministerial. |
|---|
| 2859 | 2803 | | 2708 (2) When the division files a record, the division shall record it as filed on the date and |
|---|
| 2860 | 2804 | | 2709at the time of its delivery. After filing a record, the division shall deliver to the person that |
|---|
| 2861 | 2805 | | 2710submitted the record a copy of the record with an acknowledgment of the date and time of |
|---|
| 2862 | 2806 | | 2711filing and, in the case of a statement of denial, also to the partnership to which the statement |
|---|
| 2863 | 2807 | | 2712pertains. |
|---|
| 2864 | 2808 | | 2713 (3) If the division refuses to file a record, the division, not later than 15 business days |
|---|
| 2865 | 2809 | | 2714after the record is delivered, shall: |
|---|
| 2866 | 2810 | | 2715 (a) return the record or notify the person that submitted the record of the refusal; and |
|---|
| 2867 | 2811 | | 2716 (b) provide a brief explanation in a record of the reason for the refusal. |
|---|
| 2868 | 2812 | | 2717 (4) (a) If the division refuses to file a record, the person that submitted the record may |
|---|
| 2869 | 2813 | | 2718petition [the district court] a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 2870 | 2814 | | 2719Administration, to compel filing of the record. |
|---|
| 2871 | 2815 | | 2720 (b) The record and the explanation of the division of the refusal to file must be attached |
|---|
| 2872 | 2816 | | 2721to the petition. |
|---|
| 2882 | 2825 | | 2729 (c) to the principal office of the person; or |
|---|
| 2883 | 2826 | | 2730 (d) to another address the person provides to the division for delivery. |
|---|
| 2884 | 2827 | | 2731 Section 58. Section 48-1d-901 is amended to read: |
|---|
| 2885 | 2828 | | 2732 48-1d-901. Events causing dissolution. |
|---|
| 2886 | 2829 | | 2733 A partnership is dissolved, and [its] the partnership's activities and affairs must be |
|---|
| 2887 | 2830 | | 2734wound up, upon the occurrence of any of the following: |
|---|
| 2888 | 2831 | | 2735 (1) in a partnership at will, the partnership has notice of a person's express will to |
|---|
| 2889 | 2832 | | 2736withdraw as a partner, other than a partner that has dissociated under Subsections 48-1d-701(2) |
|---|
| 2890 | 2833 | | 2737through (10), but, if the person specifies a withdrawal date later than the date the partnership |
|---|
| 2891 | 2834 | | 2738had notice, on the later date; |
|---|
| 2892 | 2835 | | 2739 (2) in a partnership for a definite term or particular undertaking: |
|---|
| 2893 | 2836 | | 2740 (a) within 90 days after a person's dissociation by death or otherwise under Subsections |
|---|
| 2894 | 2837 | | 274148-1d-701(6) through (10) or wrongful dissociation under Subsection 48-1d-702(2), the |
|---|
| 2895 | 2838 | | 2742affirmative vote or consent of at least half of the remaining partners to wind up the |
|---|
| 2896 | 2839 | | 2743partnership's activities and affairs, for which purpose a person's rightful dissociation pursuant |
|---|
| 2897 | 2840 | | 2744to Subsection 48-1d-702(2)(b)(i) constitutes the expression of that partner's consent to wind up |
|---|
| 2898 | 2841 | | 2745the partnership's activities and affairs; |
|---|
| 2899 | 2842 | | 2746 (b) the express consent of all the partners to wind up the partnership's activities and |
|---|
| 2900 | 2843 | | 2747affairs; or |
|---|
| 2901 | 2844 | | 2748 (c) the expiration of the term or the completion of the undertaking; |
|---|
| 2902 | 2845 | | 2749 (3) an event or circumstance that the partnership agreement states causes dissolution; |
|---|
| 2903 | 2846 | | 2750 (4) [on application] upon a petition brought by a partner, the entry [by the district court |
|---|
| 2904 | 2847 | | 2751of an order] of a court order dissolving the partnership on the ground that: |
|---|
| 2905 | 2848 | | 2752 (a) the conduct of all or substantially all the partnership's activities and affairs is |
|---|
| 2910 | 2853 | | 2756affairs which makes it not reasonably practicable to carry on the business in partnership with |
|---|
| 2911 | 2854 | | 2757that partner; or |
|---|
| 2912 | 2855 | | 2758 (d) it is not otherwise reasonably practicable to carry on the partnership's activities and |
|---|
| 2913 | 2856 | | 2759affairs in conformity with the partnership agreement; |
|---|
| 2914 | 2857 | | 2760 (5) [on application] upon a petition brought by a transferee, the entry [by the district |
|---|
| 2915 | 2858 | | 2761court of an order] of a court order dissolving the partnership on the ground that it is equitable to |
|---|
| 2916 | 2859 | | 2762wind up the partnership's activities and affairs: |
|---|
| 2917 | 2860 | | 2763 (a) after the expiration of the term or completion of the undertaking, if the partnership |
|---|
| 2918 | 2861 | | 2764was for a definite term or particular undertaking at the time of the transfer or entry of the |
|---|
| 2919 | 2862 | | 2765charging order that gave rise to the transfer; or |
|---|
| 2920 | 2863 | | 2766 (b) at any time, if the partnership was a partnership at will at the time of the transfer or |
|---|
| 2921 | 2864 | | 2767entry of the charging order that gave rise to the transfer; or |
|---|
| 2922 | 2865 | | 2768 (6) the passage of 90 consecutive days during which the partnership does not have at |
|---|
| 2923 | 2866 | | 2769least two partners. |
|---|
| 2924 | 2867 | | 2770 Section 59. Section 48-1d-902 is amended to read: |
|---|
| 2925 | 2868 | | 2771 48-1d-902. Winding up. |
|---|
| 2926 | 2869 | | 2772 (1) (a) A dissolved partnership shall wind up [its] the partnership's activities and affairs |
|---|
| 2927 | 2870 | | 2773[and, except]. |
|---|
| 2928 | 2871 | | 2774 (b) Except as otherwise provided in Section 48-1d-903, [the partnership] a partnership |
|---|
| 2929 | 2872 | | 2775only continues after dissolution [only] for the purpose of winding up. |
|---|
| 2930 | 2873 | | 2776 (2) In winding up [its] a partnership's activities and affairs, the partnership: |
|---|
| 2931 | 2874 | | 2777 (a) shall discharge the partnership's debts, obligations, and other liabilities, settle and |
|---|
| 2932 | 2875 | | 2778close the partnership's activities and affairs, and marshal and distribute the assets of the |
|---|
| 2933 | 2876 | | 2779partnership; and |
|---|
| 2934 | 2877 | | 2780 (b) may: |
|---|
| 2935 | 2878 | | 2781 (i) deliver to the division for filing a statement of dissolution stating the name of the |
|---|
| 2941 | 2883 | | 2785 (iii) prosecute and defend actions and proceedings, whether civil, criminal, or |
|---|
| 2942 | 2884 | | 2786administrative; |
|---|
| 2943 | 2885 | | 2787 (iv) transfer the partnership's property; |
|---|
| 2944 | 2886 | | 2788 (v) settle disputes by mediation or arbitration; |
|---|
| 2945 | 2887 | | 2789 (vi) deliver to the division for filing a statement of termination stating the name of the |
|---|
| 2946 | 2888 | | 2790partnership and that the partnership is terminated; and |
|---|
| 2947 | 2889 | | 2791 (vii) perform other acts necessary or appropriate to the winding up. |
|---|
| 2948 | 2890 | | 2792 (3) A person whose dissociation as a partner resulted in dissolution may participate in |
|---|
| 2949 | 2891 | | 2793winding up as if still a partner, unless the dissociation was wrongful. |
|---|
| 2950 | 2892 | | 2794 (4) If a dissolved partnership does not have a partner and no person has the right to |
|---|
| 2951 | 2893 | | 2795participate in winding up under Subsection (3), the personal or legal representative of the last |
|---|
| 2952 | 2894 | | 2796person to have been a partner may wind up the partnership's activities and affairs. If the |
|---|
| 2953 | 2895 | | 2797representative does not exercise that right, a person to wind up the partnership's activities and |
|---|
| 2954 | 2896 | | 2798affairs may be appointed by the consent of transferees owning a majority of the rights to |
|---|
| 2955 | 2897 | | 2799receive distributions at the time the consent is to be effective. A person appointed under this |
|---|
| 2956 | 2898 | | 2800Subsection (4) has the powers of a partner under Section 48-1d-904 but is not liable for the |
|---|
| 2957 | 2899 | | 2801debts, obligations, and other liabilities of the partnership solely by reason of having or |
|---|
| 2958 | 2900 | | 2802exercising those powers or otherwise acting to wind up the partnership's activities and affairs. |
|---|
| 2959 | 2901 | | 2803 (5) [On the application of] Upon a petition brought by any partner or person entitled |
|---|
| 2960 | 2902 | | 2804under Subsection (3) to participate in winding up, [the district] a court may order judicial |
|---|
| 2961 | 2903 | | 2805supervision of the winding up of a dissolved partnership, including the appointment of a person |
|---|
| 2962 | 2904 | | 2806to wind up the partnership's activities and affairs, if: |
|---|
| 2963 | 2905 | | 2807 (a) the partnership does not have a partner, and within a reasonable time following the |
|---|
| 2964 | 2906 | | 2808dissolution no person has been appointed under Subsection (4); or |
|---|
| 2973 | 2915 | | 2816 (a) the affirmative vote or consent of each partner; |
|---|
| 2974 | 2916 | | 2817 (b) if a statement of dissolution applicable to the partnership has been filed by the |
|---|
| 2975 | 2917 | | 2818division but has not become effective, delivery to the division for filing of a statement of |
|---|
| 2976 | 2918 | | 2819withdrawal under Section 48-1d-114 applicable to the statement of dissolution; and |
|---|
| 2977 | 2919 | | 2820 (c) if a statement of dissolution applicable to the partnership is effective, the delivery to |
|---|
| 2978 | 2920 | | 2821the division for filing of a statement of correction under Section 48-1d-115 stating that |
|---|
| 2979 | 2921 | | 2822dissolution has been rescinded under this section. |
|---|
| 2980 | 2922 | | 2823 (3) If a partnership rescinds [its] the partnership's dissolution: |
|---|
| 2981 | 2923 | | 2824 (a) the partnership resumes carrying on its activities and affairs as if dissolution had |
|---|
| 2982 | 2924 | | 2825never occurred; |
|---|
| 2983 | 2925 | | 2826 (b) subject to Subsection (3)(c), any liability incurred by the partnership after the |
|---|
| 2984 | 2926 | | 2827dissolution and before the rescission is effective is determined as if dissolution had never |
|---|
| 2985 | 2927 | | 2828occurred; and |
|---|
| 2986 | 2928 | | 2829 (c) the rights of a third party arising out of conduct in reliance on the dissolution before |
|---|
| 2987 | 2929 | | 2830the third party knew or had notice of the rescission may not be adversely affected. |
|---|
| 2988 | 2930 | | 2831 Section 61. Section 48-1d-909 is amended to read: |
|---|
| 2989 | 2931 | | 2832 48-1d-909. Court proceedings. |
|---|
| 2990 | 2932 | | 2833 (1) (a) A dissolved limited liability partnership that has published a notice under |
|---|
| 2991 | 2933 | | 2834Section 48-1d-908 may [file an application with the district court in the county where the |
|---|
| 2992 | 2934 | | 2835dissolved limited liability partnership's principal office is located or, if the principal office is |
|---|
| 2996 | 2936 | | 2837jurisdiction under Title 78A, Judiciary and Judicial Administration, for a determination of the |
|---|
| 2997 | 2937 | | 2838amount and form of security to be provided for payment of claims that are contingent, have not |
|---|
| 2998 | 2938 | | 2839been made known to the dissolved limited liability partnership, or are based on an event |
|---|
| 2999 | 2939 | | 2840occurring after the effective date of dissolution but which, based on the facts known to the |
|---|
| 3000 | 2940 | | 2841dissolved limited liability partnership, are reasonably expected to arise after the effective date |
|---|
| 3001 | 2941 | | 2842of dissolution. |
|---|
| 3002 | 2942 | | 2843 (b) Security is not required for any claim that is or is reasonably anticipated to be |
|---|
| 3003 | 2943 | | 2844barred under Subsection 48-1d-907(3). |
|---|
| 3004 | 2944 | | 2845 (2) [Not] No later than 10 days after the filing of an application under Subsection (1), |
|---|
| 3006 | 2947 | | 2847holding a contingent claim known to the dissolved limited liability partnership. |
|---|
| 3007 | 2948 | | 2848 (3) (a) In any proceeding under this section, the [district] court may appoint a guardian |
|---|
| 3008 | 2949 | | 2849ad litem to represent all claimants whose identities are unknown. |
|---|
| 3009 | 2950 | | 2850 (b) The reasonable fees and expenses of the guardian, including all reasonable expert |
|---|
| 3010 | 2951 | | 2851witness fees, must be paid by the dissolved limited liability partnership. |
|---|
| 3011 | 2952 | | 2852 (4) A dissolved limited liability partnership that provides security in the amount and |
|---|
| 3012 | 2953 | | 2853form ordered by the [district] court under Subsection (1) satisfies the dissolved limited liability |
|---|
| 3013 | 2954 | | 2854partnership's obligations with respect to claims that are contingent, have not been made known |
|---|
| 3014 | 2955 | | 2855to the dissolved limited liability partnership, or are based on an event occurring after the |
|---|
| 3015 | 2956 | | 2856effective date of dissolution, and the claims may not be enforced against a partner or transferee |
|---|
| 3016 | 2957 | | 2857who receives assets in liquidation. |
|---|
| 3017 | 2958 | | 2858 (5) This section applies only to a debt, obligation, or other liability incurred while a |
|---|
| 3018 | 2959 | | 2859partnership was a limited liability partnership. |
|---|
| 3019 | 2960 | | 2860 Section 62. Section 48-1d-1003 is amended to read: |
|---|
| 3020 | 2961 | | 2861 48-1d-1003. Required notice or approval. |
|---|
| 3021 | 2962 | | 2862 (1) A domestic or foreign entity that is required to give notice to, or obtain the approval |
|---|
| 3024 | 2964 | | 2864or obtain the approval to be a party to an interest exchange, conversion, or domestication. |
|---|
| 3025 | 2965 | | 2865 (2) Property held for a charitable purpose under the law of this state by a domestic or |
|---|
| 3026 | 2966 | | 2866foreign entity immediately before a transaction under this part becomes effective may not, as a |
|---|
| 3027 | 2967 | | 2867result of the transaction, be diverted from the objects for which it was donated, granted, |
|---|
| 3028 | 2968 | | 2868devised, or otherwise transferred unless, to the extent required by or pursuant to the law of this |
|---|
| 3029 | 2969 | | 2869state concerning cy pres or other law dealing with nondiversion of charitable assets, the entity |
|---|
| 3030 | 2970 | | 2870obtains [an appropriate order of the district court] a court order specifying the disposition of the |
|---|
| 3031 | 2971 | | 2871property. |
|---|
| 3032 | 2972 | | 2872 (3) A bequest, devise, gift, grant, or promise contained in a will or other instrument of |
|---|
| 3033 | 2973 | | 2873donation, subscription, or conveyance that is made to a merging entity that is not the surviving |
|---|
| 3034 | 2974 | | 2874entity and that takes effect or remains payable after the merger inures to the surviving entity. A |
|---|
| 3035 | 2975 | | 2875trust obligation that would govern property if transferred to the nonsurviving entity applies to |
|---|
| 3036 | 2976 | | 2876property that is transferred to the surviving entity under this section. |
|---|
| 3038 | 2979 | | 2878 48-1d-1310. Purchase of interest upon death, incapacity, or disqualification of |
|---|
| 3039 | 2980 | | 2879member. |
|---|
| 3040 | 2981 | | 2880 (1) Subject to this part, one or more of the following may provide for the purchase of a |
|---|
| 3041 | 2982 | | 2881partner's interest in a professional services partnership upon the death, incapacity, or |
|---|
| 3042 | 2983 | | 2882disqualification of the partner: |
|---|
| 3043 | 2984 | | 2883 (a) the partnership agreement; or |
|---|
| 3044 | 2985 | | 2884 (b) a private agreement. |
|---|
| 3045 | 2986 | | 2885 (2) In the absence of a provision described in Subsection (1), a professional services |
|---|
| 3046 | 2987 | | 2886partnership shall purchase the interest of a partner who is deceased, incapacitated, or no longer |
|---|
| 3047 | 2988 | | 2887qualified to own an interest in the professional services partnership within 90 days after the day |
|---|
| 3048 | 2989 | | 2888on which the professional services partnership is notified of the death, incapacity, or |
|---|
| 3049 | 2990 | | 2889disqualification. |
|---|
| 3053 | 2992 | | 2891(2), the professional services company shall purchase the interest at a price that is the |
|---|
| 3054 | 2993 | | 2892reasonable fair market value as of the date of death, incapacity, or disqualification. |
|---|
| 3055 | 2994 | | 2893 (4) If a professional services partnership fails to purchase a partner's interest as |
|---|
| 3056 | 2995 | | 2894required by Subsection (2) at the end of the 90-day period described in Subsection (2), [one of |
|---|
| 3057 | 2996 | | 2895the following may bring an action in the district court of the county in which the principal |
|---|
| 3058 | 2997 | | 2896office or place of practice of the professional services partnership is located] the following |
|---|
| 3059 | 2998 | | 2897persons may bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 3060 | 2999 | | 2898Administration, to enforce Subsection (2): |
|---|
| 3061 | 3000 | | 2899 (a) the personal representative of a deceased partner; |
|---|
| 3062 | 3001 | | 2900 (b) the guardian or conservator of an incapacitated partner; or |
|---|
| 3063 | 3002 | | 2901 (c) the disqualified partner. |
|---|
| 3064 | 3003 | | 2902 (5) A court in which an action is brought under Subsection (4) may: |
|---|
| 3065 | 3004 | | 2903 (a) award the person bringing the action the reasonable fair market value of the |
|---|
| 3066 | 3005 | | 2904interest; or |
|---|
| 3067 | 3006 | | 2905 (b) within [its] the court's jurisdiction, order the liquidation of the professional services |
|---|
| 3068 | 3007 | | 2906partnership. |
|---|
| 3069 | 3008 | | 2907 (6) If a person described in Subsections (4)(a) through (c) is successful in an action |
|---|
| 3071 | 3011 | | 2909 Section 64. Section 48-2e-204 is amended to read: |
|---|
| 3072 | 3012 | | 2910 48-2e-204. Signing and filing pursuant to judicial order. |
|---|
| 3073 | 3013 | | 2911 (1) If a person required by this chapter to sign a record or deliver a record to the |
|---|
| 3074 | 3014 | | 2912division for filing under this chapter does not do so, any other person that is aggrieved may |
|---|
| 3075 | 3015 | | 2913petition [the district court] a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 3076 | 3016 | | 2914Administration, to order: |
|---|
| 3077 | 3017 | | 2915 (a) the person to sign the record; |
|---|
| 3078 | 3018 | | 2916 (b) the person to deliver the record to the division for filing; or |
|---|
| 3081 | 3020 | | 2918 (2) If the petitioner under Subsection (1) is not the limited partnership or foreign |
|---|
| 3082 | 3021 | | 2919limited partnership to which the record pertains, the petitioner shall make the limited |
|---|
| 3083 | 3022 | | 2920partnership or foreign limited partnership a party to the action. |
|---|
| 3084 | 3023 | | 2921 (3) A record filed under Subsection (1)(c) is effective without being signed. |
|---|
| 3085 | 3024 | | 2922 Section 65. Section 48-2e-209 is amended to read: |
|---|
| 3086 | 3025 | | 2923 48-2e-209. Duty of division to file -- Review of refusal to file -- Transmission of |
|---|
| 3087 | 3026 | | 2924information by the division. |
|---|
| 3088 | 3027 | | 2925 (1) The division shall file a record delivered to the division for filing which satisfies |
|---|
| 3089 | 3028 | | 2926this chapter. The duty of the division under this section is ministerial. |
|---|
| 3090 | 3029 | | 2927 (2) When the division files a record, the division shall record it as filed on the date and |
|---|
| 3091 | 3030 | | 2928at the time of its delivery. After filing a record, the division shall deliver to the person that |
|---|
| 3092 | 3031 | | 2929submitted the record a copy of the record with an acknowledgment of the date and time of |
|---|
| 3093 | 3032 | | 2930filing. |
|---|
| 3094 | 3033 | | 2931 (3) If the division refuses to file a record, the division, not later than 15 business days |
|---|
| 3095 | 3034 | | 2932after the record is delivered, shall: |
|---|
| 3096 | 3035 | | 2933 (a) return the record or notify the person that submitted the record of the refusal; and |
|---|
| 3097 | 3036 | | 2934 (b) provide a brief explanation in a record of the reason for the refusal. |
|---|
| 3098 | 3037 | | 2935 (4) (a) If the division refuses to file a record, the person that submitted the record may |
|---|
| 3099 | 3038 | | 2936petition [the district court] a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 3100 | 3039 | | 2937Administration, to compel filing of the record. |
|---|
| 3101 | 3040 | | 2938 (b) The record and the explanation of the division of the refusal to file must be attached |
|---|
| 3110 | 3048 | | 2945 (a) in person to the person that submitted it; |
|---|
| 3111 | 3049 | | 2946 (b) to the address of the person's registered agent; |
|---|
| 3112 | 3050 | | 2947 (c) to the principal office of the person; or |
|---|
| 3113 | 3051 | | 2948 (d) to another address the person provides to the division for delivery. |
|---|
| 3114 | 3052 | | 2949 Section 66. Section 48-2e-801 is amended to read: |
|---|
| 3115 | 3053 | | 2950 48-2e-801. Events causing dissolution. |
|---|
| 3116 | 3054 | | 2951 (1) A limited partnership is dissolved, and [its] the limited partnership's activities and |
|---|
| 3117 | 3055 | | 2952affairs must be wound up, upon the occurrence of any of the following: |
|---|
| 3118 | 3056 | | 2953 (a) an event or circumstance that the partnership agreement states causes dissolution; |
|---|
| 3119 | 3057 | | 2954 (b) the affirmative vote or consent of all general partners and of limited partners |
|---|
| 3120 | 3058 | | 2955owning a majority of the rights to receive distributions as limited partners at the time the vote |
|---|
| 3121 | 3059 | | 2956or consent is to be effective; |
|---|
| 3122 | 3060 | | 2957 (c) after the dissociation of a person as a general partner: |
|---|
| 3123 | 3061 | | 2958 (i) if the limited partnership has at least one remaining general partner, the vote or |
|---|
| 3124 | 3062 | | 2959consent to dissolve the limited partnership not later than 90 days after the dissociation by |
|---|
| 3125 | 3063 | | 2960partners owning a majority of the rights to receive distributions as partners at the time the vote |
|---|
| 3126 | 3064 | | 2961or consent is to be effective; or |
|---|
| 3127 | 3065 | | 2962 (ii) if the limited partnership does not have a remaining general partner, the passage of |
|---|
| 3128 | 3066 | | 296390 days after the dissociation, unless before the end of the period: |
|---|
| 3129 | 3067 | | 2964 (A) consent to continue the activities and affairs of the limited partnership and admit at |
|---|
| 3130 | 3068 | | 2965least one general partner is given by limited partners owning a majority of the rights to receive |
|---|
| 3131 | 3069 | | 2966distributions as limited partners at the time the consent is to be effective; and |
|---|
| 3132 | 3070 | | 2967 (B) at least one person is admitted as a general partner in accordance with the consent; |
|---|
| 3133 | 3071 | | 2968 (d) the passage of 90 consecutive days after the dissociation of the limited partnership's |
|---|
| 3134 | 3072 | | 2969last limited partner, unless before the end of the period the limited partnership admits at least |
|---|
| 3138 | 3076 | | 2972one partner, unless before the end of the period: |
|---|
| 3139 | 3077 | | 2973 (i) the limited partnership admits at least one person as a partner; |
|---|
| 3140 | 3078 | | 2974 (ii) if the previously sole remaining partner is only a general partner, the limited |
|---|
| 3141 | 3079 | | 2975partnership admits the person as a limited partner; and |
|---|
| 3142 | 3080 | | 2976 (iii) if the previously sole remaining partner is only a limited partner, the limited |
|---|
| 3143 | 3081 | | 2977partnership admits a person as a general partner; |
|---|
| 3144 | 3082 | | 2978 (f) [on application] upon a petition brought by a partner, the entry [by the district court |
|---|
| 3145 | 3083 | | 2979of an order] of a court order dissolving the limited partnership on the grounds that: |
|---|
| 3146 | 3084 | | 2980 (i) the conduct of all or substantially all the limited partnership's activities and affairs is |
|---|
| 3147 | 3085 | | 2981unlawful; or |
|---|
| 3148 | 3086 | | 2982 (ii) it is not reasonably practicable to carry on the limited partnership's activities and |
|---|
| 3149 | 3087 | | 2983affairs in conformity with the partnership agreement; or |
|---|
| 3150 | 3088 | | 2984 (g) the signing and filing of a statement of administrative dissolution by the division |
|---|
| 3151 | 3089 | | 2985under Section 48-2e-810. |
|---|
| 3152 | 3090 | | 2986 (2) If an event occurs that imposes a deadline on a limited partnership under |
|---|
| 3153 | 3091 | | 2987Subsection (1) and before the limited partnership has met the requirements of the deadline, |
|---|
| 3154 | 3092 | | 2988another event occurs that imposes a different deadline on the limited partnership under |
|---|
| 3155 | 3093 | | 2989Subsection (1): |
|---|
| 3156 | 3094 | | 2990 (a) the occurrence of the second event does not affect the deadline caused by the first |
|---|
| 3157 | 3095 | | 2991event; and |
|---|
| 3158 | 3096 | | 2992 (b) the limited partnership's meeting of the requirements of the first deadline does not |
|---|
| 3159 | 3097 | | 2993extend the second deadline. |
|---|
| 3160 | 3098 | | 2994 Section 67. Section 48-2e-802 is amended to read: |
|---|
| 3161 | 3099 | | 2995 48-2e-802. Winding up. |
|---|
| 3162 | 3100 | | 2996 (1) (a) A dissolved limited partnership shall wind up [its] the limited partnership's |
|---|
| 3163 | 3101 | | 2997activities and affairs[, and, except]. |
|---|
| 3170 | 3107 | | 3002 (a) shall discharge the limited partnership's debts, obligations, and other liabilities, |
|---|
| 3171 | 3108 | | 3003settle and close the limited partnership's activities and affairs, and marshal and distribute the |
|---|
| 3172 | 3109 | | 3004assets of the limited partnership; and |
|---|
| 3173 | 3110 | | 3005 (b) may: |
|---|
| 3174 | 3111 | | 3006 (i) amend its certificate of limited partnership to state that the limited partnership is |
|---|
| 3175 | 3112 | | 3007dissolved; |
|---|
| 3176 | 3113 | | 3008 (ii) preserve the limited partnership activities, affairs, and property as a going concern |
|---|
| 3177 | 3114 | | 3009for a reasonable time; |
|---|
| 3178 | 3115 | | 3010 (iii) prosecute and defend actions and proceedings, whether civil, criminal, or |
|---|
| 3179 | 3116 | | 3011administrative; |
|---|
| 3180 | 3117 | | 3012 (iv) transfer the limited partnership's property; |
|---|
| 3181 | 3118 | | 3013 (v) settle disputes by mediation or arbitration; |
|---|
| 3182 | 3119 | | 3014 (vi) deliver to the division for filing a statement of termination stating the name of the |
|---|
| 3183 | 3120 | | 3015limited partnership and that the limited partnership is terminated; and |
|---|
| 3184 | 3121 | | 3016 (vii) perform other acts necessary or appropriate to the winding up. |
|---|
| 3185 | 3122 | | 3017 (3) (a) If a dissolved limited partnership does not have a general partner, a person to |
|---|
| 3186 | 3123 | | 3018wind up the dissolved limited partnership's activities and affairs may be appointed by the |
|---|
| 3187 | 3124 | | 3019affirmative vote or consent of limited partners owning a majority of the rights to receive |
|---|
| 3188 | 3125 | | 3020distributions as limited partners at the time the vote or consent is to be effective. |
|---|
| 3189 | 3126 | | 3021 (b) A person appointed under this Subsection (3): |
|---|
| 3190 | 3127 | | 3022 [(a)] (i) has the powers of a general partner under Section 48-2e-804 but is not liable |
|---|
| 3191 | 3128 | | 3023for the debts, obligations, and other liabilities of the limited partnership solely by reason of |
|---|
| 3192 | 3129 | | 3024having or exercising those powers or otherwise acting to wind up the dissolved limited |
|---|
| 3202 | 3139 | | 3033 (4) Upon a petition brought by a partner, [the district] a court may order judicial |
|---|
| 3203 | 3140 | | 3034supervision of the winding up of a dissolved limited partnership, including the appointment of |
|---|
| 3204 | 3141 | | 3035a person to wind up the limited partnership's activities and affairs, if: |
|---|
| 3205 | 3142 | | 3036 (a) the limited partnership does not have a general partner and within a reasonable time |
|---|
| 3206 | 3143 | | 3037following the dissolution no person has been appointed pursuant to Subsection (3); or |
|---|
| 3207 | 3144 | | 3038 (b) the applicant establishes other good cause. |
|---|
| 3208 | 3145 | | 3039 Section 68. Section 48-2e-803 is amended to read: |
|---|
| 3209 | 3146 | | 3040 48-2e-803. Rescinding dissolution. |
|---|
| 3210 | 3147 | | 3041 (1) A limited partnership may rescind [its] the limited partnership's dissolution, unless |
|---|
| 3211 | 3148 | | 3042a statement of termination applicable to the limited partnership is effective, [the district] a court |
|---|
| 3212 | 3149 | | 3043has entered an order under Subsection 48-2e-801(1)(f) dissolving the limited partnership, or the |
|---|
| 3213 | 3150 | | 3044division has dissolved the limited partnership under Section 48-2e-810. |
|---|
| 3214 | 3151 | | 3045 (2) Rescinding dissolution under this section requires: |
|---|
| 3215 | 3152 | | 3046 (a) the affirmative vote or consent of each partner; and |
|---|
| 3216 | 3153 | | 3047 (b) if the limited partnership has delivered to the division for filing an amendment to |
|---|
| 3217 | 3154 | | 3048the certificate of limited partnership stating that the partnership is dissolved and if: |
|---|
| 3218 | 3155 | | 3049 (i) the amendment is not effective, the filing by the limited partnership of a statement |
|---|
| 3219 | 3156 | | 3050of withdrawal under Section 48-2e-207 applicable to the amendment; or |
|---|
| 3220 | 3157 | | 3051 (ii) the amendment is effective, the delivery by the limited partnership to the division |
|---|
| 3224 | 3159 | | 3053has been rescinded under this section. |
|---|
| 3225 | 3160 | | 3054 (3) If a limited partnership rescinds [its] the limited partnership's dissolution: |
|---|
| 3226 | 3161 | | 3055 (a) the limited partnership resumes carrying on [its] the limited partnership's activities |
|---|
| 3227 | 3162 | | 3056and affairs as if dissolution had never occurred; |
|---|
| 3228 | 3163 | | 3057 (b) subject to Subsection (3)(c), any liability incurred by the limited partnership after |
|---|
| 3229 | 3164 | | 3058the dissolution and before the rescission is effective is determined as if dissolution had never |
|---|
| 3230 | 3165 | | 3059occurred; and |
|---|
| 3231 | 3166 | | 3060 (c) the rights of a third party arising out of conduct in reliance on the dissolution before |
|---|
| 3232 | 3167 | | 3061the third party knew or had notice of the rescission may not be adversely affected. |
|---|
| 3233 | 3168 | | 3062 Section 69. Section 48-2e-808 is amended to read: |
|---|
| 3235 | 3171 | | 3064 (1) (a) A dissolved limited partnership that has published a notice under Section |
|---|
| 3236 | 3172 | | 306548-2e-807 may [file an application with the district court in the county where the dissolved |
|---|
| 3237 | 3173 | | 3066limited partnership's principal office is located, or, if the principal office is not located in this |
|---|
| 3238 | 3174 | | 3067state, where the office of its registered agent is located,] petition a court with jurisdiction under |
|---|
| 3239 | 3175 | | 3068Title 78A, Judiciary and Judicial Administration, for a determination of the amount and form |
|---|
| 3240 | 3176 | | 3069of security to be provided for payment of claims that are contingent, have not been made |
|---|
| 3241 | 3177 | | 3070known to the dissolved limited partnership, or are based on an event occurring after the |
|---|
| 3242 | 3178 | | 3071effective date of dissolution but which, based on the facts known to the dissolved limited |
|---|
| 3243 | 3179 | | 3072partnership, are reasonably expected to arise after the effective date of dissolution. |
|---|
| 3244 | 3180 | | 3073 (b) Security is not required for any claim that is or is reasonably anticipated to be |
|---|
| 3245 | 3181 | | 3074barred under Subsection 48-2e-807(3). |
|---|
| 3246 | 3182 | | 3075 (2) [Not] No later than 10 days after the filing of an application under Subsection (1), |
|---|
| 3247 | 3183 | | 3076the dissolved limited partnership shall give notice of the proceeding to each claimant holding a |
|---|
| 3248 | 3184 | | 3077contingent claim known to the dissolved limited partnership. |
|---|
| 3249 | 3185 | | 3078 (3) (a) In a proceeding brought under this section, the court may appoint a guardian ad |
|---|
| 3252 | 3187 | | 3080 (b) The reasonable fees and expenses of the guardian, including all reasonable expert |
|---|
| 3253 | 3188 | | 3081witness fees, must be paid by the dissolved limited partnership. |
|---|
| 3254 | 3189 | | 3082 (4) A dissolved limited partnership that provides security in the amount and form |
|---|
| 3255 | 3190 | | 3083ordered by the court under Subsection (1) satisfies the dissolved limited partnership's |
|---|
| 3256 | 3191 | | 3084obligations with respect to claims that are contingent, have not been made known to the |
|---|
| 3257 | 3192 | | 3085dissolved limited partnership, or are based on an event occurring after the effective date of |
|---|
| 3258 | 3193 | | 3086dissolution, and such claims may not be enforced against a partner or transferee that received |
|---|
| 3259 | 3194 | | 3087assets in liquidation. |
|---|
| 3260 | 3195 | | 3088 Section 70. Section 48-2e-1103 is amended to read: |
|---|
| 3261 | 3196 | | 3089 48-2e-1103. Required notice or approval. |
|---|
| 3262 | 3197 | | 3090 (1) A domestic or foreign entity that is required to give notice to, or obtain the approval |
|---|
| 3263 | 3198 | | 3091of, a governmental agency or officer of this state to be a party to a merger must give the notice |
|---|
| 3264 | 3199 | | 3092or obtain the approval to be a party to an interest exchange, conversion, or domestication. |
|---|
| 3265 | 3200 | | 3093 (2) Property held for a charitable purpose under the law of this state by a domestic or |
|---|
| 3267 | 3203 | | 3095result of the transaction, be diverted from the objects for which it was donated, granted, |
|---|
| 3268 | 3204 | | 3096devised, or otherwise transferred unless, to the extent required by or pursuant to the law of this |
|---|
| 3269 | 3205 | | 3097state concerning cy pres or other law dealing with nondiversion of charitable assets, the entity |
|---|
| 3270 | 3206 | | 3098obtains [an appropriate order of the district court] a court order specifying the disposition of the |
|---|
| 3271 | 3207 | | 3099property. |
|---|
| 3272 | 3208 | | 3100 (3) A bequest, devise, gift, grant, or promise contained in a will or other instrument of |
|---|
| 3273 | 3209 | | 3101donation, subscription, or conveyance that is made to a merging entity that is not the surviving |
|---|
| 3274 | 3210 | | 3102entity and that takes effect or remains payable after the merger inures to the surviving entity. A |
|---|
| 3275 | 3211 | | 3103trust obligation that would govern property if transferred to the nonsurviving entity applies to |
|---|
| 3276 | 3212 | | 3104property that is transferred to the surviving entity under this section. |
|---|
| 3277 | 3213 | | 3105 Section 71. Section 48-3a-204 is amended to read: |
|---|
| 3281 | 3215 | | 3107 (1) If a person required by this chapter to sign a record or deliver a record to the |
|---|
| 3282 | 3216 | | 3108division for filing under this chapter does not do so, any other person that is aggrieved may |
|---|
| 3283 | 3217 | | 3109petition [the district court] a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 3284 | 3218 | | 3110Administration, to order: |
|---|
| 3285 | 3219 | | 3111 (a) the person to sign the record; |
|---|
| 3286 | 3220 | | 3112 (b) the person to deliver the record to the division for filing; or |
|---|
| 3287 | 3221 | | 3113 (c) the division to file the record unsigned. |
|---|
| 3288 | 3222 | | 3114 (2) If a petitioner under Subsection (1) is not the limited liability company or foreign |
|---|
| 3289 | 3223 | | 3115limited liability company to which the record pertains, the petitioner shall make the limited |
|---|
| 3290 | 3224 | | 3116liability company or foreign limited liability company a party to the action. |
|---|
| 3291 | 3225 | | 3117 (3) A record filed under Subsection (1)(c) is effective without being signed. |
|---|
| 3292 | 3226 | | 3118 Section 72. Section 48-3a-209 is amended to read: |
|---|
| 3293 | 3227 | | 3119 48-3a-209. Duty of division to file -- Review of refusal to file -- Transmission of |
|---|
| 3294 | 3228 | | 3120information by division. |
|---|
| 3295 | 3229 | | 3121 (1) The division shall file a record delivered to the division for filing which satisfies |
|---|
| 3296 | 3230 | | 3122this chapter. The duty of the division under this section is ministerial. |
|---|
| 3297 | 3231 | | 3123 (2) When the division files a record, the division shall record it as filed on the date and |
|---|
| 3298 | 3232 | | 3124at the time of its delivery. After filing a record, the division shall deliver to the person that |
|---|
| 3300 | 3235 | | 3126filing and, in the case of a statement of denial, also to the limited liability company to which |
|---|
| 3301 | 3236 | | 3127the statement pertains. |
|---|
| 3302 | 3237 | | 3128 (3) If the division refuses to file a record, the division shall, not later than 15 business |
|---|
| 3303 | 3238 | | 3129days after the record is delivered: |
|---|
| 3304 | 3239 | | 3130 (a) return the record or notify the person that submitted the record of the refusal; and |
|---|
| 3305 | 3240 | | 3131 (b) provide a brief explanation in a record of the reason for the refusal. |
|---|
| 3306 | 3241 | | 3132 (4) (a) If the division refuses to file a record, the person that submitted the record may |
|---|
| 3309 | 3243 | | 3134Administration, to compel filing of the record. |
|---|
| 3310 | 3244 | | 3135 (b) The record and the explanation of the division of the refusal to file must be attached |
|---|
| 3311 | 3245 | | 3136to the petition. |
|---|
| 3312 | 3246 | | 3137 (c) The court may decide the matter in a summary proceeding. |
|---|
| 3313 | 3247 | | 3138 (5) The filing of or refusal to file a record does not create a presumption that the |
|---|
| 3314 | 3248 | | 3139information contained in the record is correct or incorrect. |
|---|
| 3315 | 3249 | | 3140 (6) Except as otherwise provided by Section 16-17-301 or by law other than this |
|---|
| 3316 | 3250 | | 3141chapter, the division may deliver any record to a person by delivering it: |
|---|
| 3317 | 3251 | | 3142 (a) in person to the person that submitted it; |
|---|
| 3318 | 3252 | | 3143 (b) to the address of the person's registered agent; |
|---|
| 3319 | 3253 | | 3144 (c) to the principal office of the person; or |
|---|
| 3320 | 3254 | | 3145 (d) to another address the person provides to the division for delivery. |
|---|
| 3321 | 3255 | | 3146 Section 73. Section 48-3a-701 is amended to read: |
|---|
| 3322 | 3256 | | 3147 48-3a-701. Events causing dissolution. |
|---|
| 3323 | 3257 | | 3148 A limited liability company is dissolved, and its activities and affairs must be wound |
|---|
| 3324 | 3258 | | 3149up, upon the occurrence of any of the following: |
|---|
| 3325 | 3259 | | 3150 (1) an event or circumstance that the operating agreement states causes dissolution; |
|---|
| 3326 | 3260 | | 3151 (2) the consent of all the members; |
|---|
| 3327 | 3261 | | 3152 (3) the passage of 90 consecutive days during which the limited liability company has |
|---|
| 3328 | 3262 | | 3153no members unless: |
|---|
| 3329 | 3263 | | 3154 (a) consent to admit at least one specified person as a member is given by transferees |
|---|
| 3330 | 3264 | | 3155owning the rights to receive a majority of distributions as transferees at the time the consent is |
|---|
| 3338 | 3271 | | 3161affairs is unlawful; or |
|---|
| 3339 | 3272 | | 3162 (b) it is not reasonably practicable to carry on the limited liability company's activities |
|---|
| 3340 | 3273 | | 3163and affairs in conformity with the certificate of organization and the operating agreement; |
|---|
| 3341 | 3274 | | 3164 (5) [on application by] upon a petition brought by a member, the entry [by the district |
|---|
| 3342 | 3275 | | 3165court of an order] of a court order dissolving the limited liability company on the grounds that |
|---|
| 3343 | 3276 | | 3166the managers or those members in control of the limited liability company: |
|---|
| 3344 | 3277 | | 3167 (a) have acted, are acting, or will act in a manner that is illegal or fraudulent; or |
|---|
| 3345 | 3278 | | 3168 (b) have acted, are acting, or will act in a manner that is oppressive and was, is, or will |
|---|
| 3346 | 3279 | | 3169be directly harmful to the applicant; or |
|---|
| 3347 | 3280 | | 3170 (6) the signing and filing of a statement of administrative dissolution by the division |
|---|
| 3348 | 3281 | | 3171under Subsection 48-3a-708(3). |
|---|
| 3349 | 3282 | | 3172 Section 74. Section 48-3a-702 is amended to read: |
|---|
| 3350 | 3283 | | 3173 48-3a-702. Election to purchase in lieu of dissolution. |
|---|
| 3351 | 3284 | | 3174 (1) (a) In a proceeding under Subsection 48-3a-701(5) to dissolve a limited liability |
|---|
| 3352 | 3285 | | 3175company, the limited liability company may elect or, if [it] the limited liability company fails to |
|---|
| 3353 | 3286 | | 3176elect, one or more members may elect to purchase the interest in the limited liability company |
|---|
| 3354 | 3287 | | 3177owned by the applicant member at the fair market value of the interest, determined as provided |
|---|
| 3355 | 3288 | | 3178in this section. |
|---|
| 3356 | 3289 | | 3179 (b) An election pursuant to this Subsection (1) is irrevocable unless [the district] a |
|---|
| 3357 | 3290 | | 3180court determines that it is equitable to set aside or modify the election. |
|---|
| 3358 | 3291 | | 3181 (2) (a) An election to purchase pursuant to this section may be filed with [the district] a |
|---|
| 3359 | 3292 | | 3182court at any time within 90 days after the filing of the petition in a proceeding under Subsection |
|---|
| 3360 | 3293 | | 318348-3a-701(5) or at any later time as the [district] court in [its] the court's discretion may allow. |
|---|
| 3361 | 3294 | | 3184 (b) If the limited liability company files an election with [the district] a court within the |
|---|
| 3362 | 3295 | | 318590-day period, or at any later time allowed by the [district] court, to purchase the interest in the |
|---|
| 3363 | 3296 | | 3186limited liability company owned by the applicant member, the limited liability company shall |
|---|
| 3366 | 3299 | | 3188 (3) (a) If the limited liability company does not file an election with [the district] a |
|---|
| 3367 | 3300 | | 3189court within the time period, but an election to purchase the interest in the limited liability |
|---|
| 3368 | 3301 | | 3190company owned by the applicant member is filed by one or more members within the time |
|---|
| 3369 | 3302 | | 3191period, the limited liability company shall, within 10 days after the later of the end of the time |
|---|
| 3370 | 3303 | | 3192period allowed for the filing of elections to purchase under this section or notification from the |
|---|
| 3371 | 3304 | | 3193[district] court of an election by members to purchase the interest in the limited liability |
|---|
| 3372 | 3305 | | 3194company owned by the applicant member as provided in this section, give written notice of the |
|---|
| 3373 | 3306 | | 3195election to purchase to all members of the limited liability company, other than the applicant |
|---|
| 3374 | 3307 | | 3196member. |
|---|
| 3375 | 3308 | | 3197 (b) The notice shall state the name and the percentage interest in the limited liability |
|---|
| 3376 | 3309 | | 3198company owned by the applicant member and the name and the percentage interest in the |
|---|
| 3377 | 3310 | | 3199limited liability company owned by each electing member. |
|---|
| 3378 | 3311 | | 3200 (c) The notice shall advise any recipients who have not participated in the election of |
|---|
| 3379 | 3312 | | 3201their right to join in the election to purchase the interest in the limited liability company in |
|---|
| 3380 | 3313 | | 3202accordance with this section and of the date by which any notice of intent to participate must be |
|---|
| 3381 | 3314 | | 3203filed with the [district] court. |
|---|
| 3382 | 3315 | | 3204 (4) Members who wish to participate in the purchase of the interest in the limited |
|---|
| 3383 | 3316 | | 3205liability company of the applicant member must file notice of their intention to join in the |
|---|
| 3384 | 3317 | | 3206purchase by electing members no later than 30 days after the effective date of the limited |
|---|
| 3385 | 3318 | | 3207liability company's notice of their right to join in the election to purchase. |
|---|
| 3386 | 3319 | | 3208 (5) All members who have filed with the [district] court an election or notice of their |
|---|
| 3387 | 3320 | | 3209intention to participate in the election to purchase the interest in the limited liability company |
|---|
| 3388 | 3321 | | 3210of the applicant member thereby become irrevocably obligated to participate in the purchase of |
|---|
| 3389 | 3322 | | 3211the interest from the applicant member upon the terms and conditions of this section, unless the |
|---|
| 3390 | 3323 | | 3212[district] court otherwise directs. |
|---|
| 3391 | 3324 | | 3213 (6) After an election has been filed by the limited liability company or one or more |
|---|
| 3399 | 3331 | | 3219 (7) If, within 60 days after the earlier of the limited liability company filing of an |
|---|
| 3400 | 3332 | | 3220election to purchase the interest in the limited liability company of the applicant member or the |
|---|
| 3401 | 3333 | | 3221limited liability company's mailing of a notice to its members of the filing of an election by the |
|---|
| 3402 | 3334 | | 3222members to purchase the interest in the limited liability company of the applicant member, the |
|---|
| 3403 | 3335 | | 3223applicant member and electing limited liability company or members reach agreement as to the |
|---|
| 3404 | 3336 | | 3224fair market value and terms of the purchase of the applicant member's interest, the [district] |
|---|
| 3405 | 3337 | | 3225court shall enter an order directing the purchase of the applicant member's interest, upon the |
|---|
| 3406 | 3338 | | 3226terms and conditions agreed to by the parties. |
|---|
| 3407 | 3339 | | 3227 (8) If the parties are unable to reach an agreement as provided for in Subsection (7), |
|---|
| 3408 | 3340 | | 3228upon application of any party, the [district] court shall stay the proceedings under Subsection |
|---|
| 3409 | 3341 | | 322948-3a-701(5) and determine the fair market value of the applicant member's interest in the |
|---|
| 3410 | 3342 | | 3230limited liability company as of the day before the date on which the petition under Subsection |
|---|
| 3411 | 3343 | | 323148-3a-701(5) was filed or as of any other date the [district] court determines to be appropriate |
|---|
| 3412 | 3344 | | 3232under the circumstances and based on the factors the [district] court determines to be |
|---|
| 3413 | 3345 | | 3233appropriate. |
|---|
| 3414 | 3346 | | 3234 (9) (a) Upon determining the fair market value of the interest in the limited liability |
|---|
| 3415 | 3347 | | 3235company of the applicant member, the [district] court shall enter an order directing the |
|---|
| 3416 | 3348 | | 3236purchase of the interest in the limited liability company upon terms and conditions the [district] |
|---|
| 3417 | 3349 | | 3237court determines to be appropriate. |
|---|
| 3418 | 3350 | | 3238 (b) The terms and conditions may include payment of the purchase price in |
|---|
| 3419 | 3351 | | 3239installments, where necessary in the interest of equity, provision for security to assure payment |
|---|
| 3420 | 3352 | | 3240of the purchase price and any additional costs, fees, and expenses awarded by the [district] |
|---|
| 3431 | 3363 | | 3250interest that the purchasing member may have set forth in the purchasing member's election or |
|---|
| 3432 | 3364 | | 3251notice of intent to participate filed with the [district] court. |
|---|
| 3433 | 3365 | | 3252 (11) (a) Interest may be allowed at the rate and from the date determined by the |
|---|
| 3434 | 3366 | | 3253[district] court to be equitable. |
|---|
| 3435 | 3367 | | 3254 (b) However, if the [district] court finds that the refusal of the applicant member to |
|---|
| 3436 | 3368 | | 3255accept an offer of payment was arbitrary or otherwise not in good faith, interest may not be |
|---|
| 3437 | 3369 | | 3256allowed. |
|---|
| 3438 | 3370 | | 3257 (12) If the [district] court finds that the applicant member had probable ground for |
|---|
| 3439 | 3371 | | 3258relief under Subsection 48-3a-701(5), the [district] court may award to the applicant member |
|---|
| 3440 | 3372 | | 3259reasonable fees and expenses of counsel and experts employed by the applicant member. |
|---|
| 3441 | 3373 | | 3260 (13) (a) Upon entry of an order under Subsection (7) or (9), the [district] court shall |
|---|
| 3442 | 3374 | | 3261dismiss the petition to dissolve the limited liability company under Subsection 48-3a-701(5) |
|---|
| 3443 | 3375 | | 3262and the applicant member shall no longer have any rights or status as a member of the limited |
|---|
| 3444 | 3376 | | 3263liability company, except the right to receive the amounts awarded to the applicant member by |
|---|
| 3445 | 3377 | | 3264the [district] court. |
|---|
| 3446 | 3378 | | 3265 (b) The award is enforceable in the same manner as any other judgment. |
|---|
| 3447 | 3379 | | 3266 (14) (a) The purchase ordered pursuant to Subsection (9) shall be made within 10 days |
|---|
| 3448 | 3380 | | 3267after the date the order becomes final, unless before that time the limited liability company files |
|---|
| 3452 | 3382 | | 3269statement of dissolution. |
|---|
| 3453 | 3383 | | 3270 (b) The statement of dissolution must then be adopted and filed within 60 days after |
|---|
| 3454 | 3384 | | 3271notice. |
|---|
| 3455 | 3385 | | 3272 (15) (a) Upon filing of a statement of dissolution, the limited liability company is |
|---|
| 3456 | 3386 | | 3273dissolved and shall be wound up pursuant to Section 48-3a-703, and the order entered pursuant |
|---|
| 3457 | 3387 | | 3274to Subsection (9) is no longer of any force or effect. |
|---|
| 3458 | 3388 | | 3275 (b) However, the [district] court may award the applicant member reasonable fees and |
|---|
| 3459 | 3389 | | 3276expenses in accordance with Subsection (12). |
|---|
| 3460 | 3390 | | 3277 (c) The applicant member may continue to pursue any claims previously asserted on |
|---|
| 3461 | 3391 | | 3278behalf of the limited liability company. |
|---|
| 3462 | 3392 | | 3279 (16) Any payment by the limited liability company pursuant to an order under |
|---|
| 3464 | 3395 | | 3281subject to the provisions of Sections 48-3a-405 and 48-3a-406. |
|---|
| 3465 | 3396 | | 3282 Section 75. Section 48-3a-703 is amended to read: |
|---|
| 3466 | 3397 | | 3283 48-3a-703. Winding up. |
|---|
| 3467 | 3398 | | 3284 (1) (a) A dissolved limited liability company shall wind up [its] the limited liability |
|---|
| 3468 | 3399 | | 3285company's activities and affairs [and, except]. |
|---|
| 3469 | 3400 | | 3286 (b) Except as otherwise provided in Section 48-3a-704, the limited liability company |
|---|
| 3470 | 3401 | | 3287only continues after dissolution [only] for the purpose of winding up. |
|---|
| 3471 | 3402 | | 3288 (2) In winding up [its] the limited liability company's activities and affairs, a limited |
|---|
| 3472 | 3403 | | 3289liability company: |
|---|
| 3473 | 3404 | | 3290 (a) shall discharge the limited liability company's debts, obligations, and other |
|---|
| 3474 | 3405 | | 3291liabilities, settle and close the limited liability company's activities and affairs, and marshal and |
|---|
| 3475 | 3406 | | 3292distribute the assets of the limited liability company; and |
|---|
| 3476 | 3407 | | 3293 (b) may: |
|---|
| 3477 | 3408 | | 3294 (i) deliver to the division for filing a statement of dissolution stating the name of the |
|---|
| 3480 | 3410 | | 3296 (ii) preserve the limited liability company activities, affairs, and property as a going |
|---|
| 3481 | 3411 | | 3297concern for a reasonable time; |
|---|
| 3482 | 3412 | | 3298 (iii) prosecute and defend actions and proceedings, whether civil, criminal, or |
|---|
| 3483 | 3413 | | 3299administrative; |
|---|
| 3484 | 3414 | | 3300 (iv) transfer the limited liability company's property; |
|---|
| 3485 | 3415 | | 3301 (v) settle disputes by mediation or arbitration; |
|---|
| 3486 | 3416 | | 3302 (vi) deliver to the division for filing a statement of termination stating the name of the |
|---|
| 3487 | 3417 | | 3303limited liability company and that the limited liability company is terminated; and |
|---|
| 3488 | 3418 | | 3304 (vii) perform other acts necessary or appropriate to the winding up. |
|---|
| 3489 | 3419 | | 3305 (3) (a) If a dissolved limited liability company has no members, the legal representative |
|---|
| 3490 | 3420 | | 3306of the last person to have been a member may wind up the activities and affairs of the limited |
|---|
| 3491 | 3421 | | 3307liability company. |
|---|
| 3492 | 3422 | | 3308 (b) If the person does so, the person has the powers of a sole manager under Subsection |
|---|
| 3493 | 3423 | | 330948-3a-407(3) and is deemed to be a manager for the purposes of Subsection 48-3a-304(1). |
|---|
| 3494 | 3424 | | 3310 (4) If the legal representative under Subsection (3) declines or fails to wind up the |
|---|
| 3496 | 3427 | | 3312consent of transferees owning a majority of the rights to receive distributions as transferees at |
|---|
| 3497 | 3428 | | 3313the time the consent is to be effective. A person appointed under this Subsection (4): |
|---|
| 3498 | 3429 | | 3314 (a) has the powers of a sole manager under Subsection 48-3a-407(3) and is deemed to |
|---|
| 3499 | 3430 | | 3315be a manager for the purposes of Subsection 48-3a-304(1); and |
|---|
| 3500 | 3431 | | 3316 (b) shall promptly deliver to the division for filing an amendment to the limited |
|---|
| 3501 | 3432 | | 3317liability company's certificate of organization stating: |
|---|
| 3502 | 3433 | | 3318 (i) that the limited liability company has no members; |
|---|
| 3503 | 3434 | | 3319 (ii) the name and street and mailing addresses of the person; and |
|---|
| 3504 | 3435 | | 3320 (iii) that the person has been appointed pursuant to this subsection to wind up the |
|---|
| 3505 | 3436 | | 3321limited liability company. |
|---|
| 3509 | 3438 | | 3323limited liability company, including the appointment of a person to wind up the limited liability |
|---|
| 3510 | 3439 | | 3324company's activities and affairs: |
|---|
| 3511 | 3440 | | 3325 (a) [on application of a member, if the applicant] upon a petition by a member if the |
|---|
| 3512 | 3441 | | 3326member establishes good cause; |
|---|
| 3513 | 3442 | | 3327 (b) [on the application of a transferee,] upon a petition by a transferee if: |
|---|
| 3514 | 3443 | | 3328 (i) the company does not have any members; |
|---|
| 3515 | 3444 | | 3329 (ii) the legal representative of the last person to have been a member declines or fails to |
|---|
| 3516 | 3445 | | 3330wind up the limited liability company's activities; and |
|---|
| 3517 | 3446 | | 3331 (iii) within a reasonable time following the dissolution a person has not been appointed |
|---|
| 3518 | 3447 | | 3332pursuant to Subsection (4); or |
|---|
| 3519 | 3448 | | 3333 (c) in connection with a proceeding under Subsection 48-3a-701(4) or (5). |
|---|
| 3520 | 3449 | | 3334 Section 76. Section 48-3a-704 is amended to read: |
|---|
| 3521 | 3450 | | 3335 48-3a-704. Rescinding dissolution. |
|---|
| 3522 | 3451 | | 3336 (1) A limited liability company may rescind [its] the limited liability company's |
|---|
| 3523 | 3452 | | 3337dissolution, unless a statement of termination applicable to the limited liability company is |
|---|
| 3524 | 3453 | | 3338effective, [the district court] a court has entered an order under Subsection 48-3a-701(4) or (5) |
|---|
| 3525 | 3454 | | 3339dissolving the limited liability company, or the division has dissolved the limited liability |
|---|
| 3526 | 3455 | | 3340company under Section 48-3a-708. |
|---|
| 3527 | 3456 | | 3341 (2) Rescinding dissolution under this section requires: |
|---|
| 3537 | 3466 | | 3350 (3) If a limited liability company rescinds its dissolution: |
|---|
| 3538 | 3467 | | 3351 (a) the limited liability company resumes carrying on its activities and affairs as if |
|---|
| 3539 | 3468 | | 3352dissolution had never occurred; |
|---|
| 3540 | 3469 | | 3353 (b) subject to Subsection (3)(c), any liability incurred by the limited liability company |
|---|
| 3541 | 3470 | | 3354after the dissolution and before the rescission is effective is determined as if dissolution had |
|---|
| 3542 | 3471 | | 3355never occurred; and |
|---|
| 3543 | 3472 | | 3356 (c) the rights of a third party arising out of conduct in reliance on the dissolution before |
|---|
| 3544 | 3473 | | 3357the third party knew or had notice of the rescission may not be adversely affected. |
|---|
| 3545 | 3474 | | 3358 Section 77. Section 48-3a-707 is amended to read: |
|---|
| 3546 | 3475 | | 3359 48-3a-707. Court proceedings. |
|---|
| 3547 | 3476 | | 3360 (1) (a) A dissolved limited liability company that has published a notice under Section |
|---|
| 3548 | 3477 | | 336148-3a-706 may [file an application with district court in the county where the dissolved limited |
|---|
| 3549 | 3478 | | 3362liability company's principal office is located, or, if the principal office is not located in this |
|---|
| 3550 | 3479 | | 3363state, where the office of its registered agent is located,] petition a court with jurisdiction under |
|---|
| 3551 | | - | 3364Title 78A, Judiciary and Judicial Administration, for a determination of the amount and form |
|---|
| 3552 | | - | 3365of security to be provided for payment of claims that are contingent, have not been made |
|---|
| 3553 | | - | 3366known to the limited liability company, or are based on an event occurring after the effective |
|---|
| 3554 | | - | 3367date of dissolution but which, based on the facts known to the dissolved limited liability |
|---|
| 3555 | | - | 3368company, are reasonably expected to arise after the effective date of dissolution. |
|---|
| 3480 | + | 3364Title 78A Judiciary and Judicial Administration, for a determination of the amount and form of |
|---|
| 3481 | + | 3365security to be provided for payment of claims that are contingent, have not been made known |
|---|
| 3482 | + | 3366to the limited liability company, or are based on an event occurring after the effective date of |
|---|
| 3483 | + | 3367dissolution but which, based on the facts known to the dissolved limited liability company, are |
|---|
| 3484 | + | 3368reasonably expected to arise after the effective date of dissolution. |
|---|
| 3566 | 3494 | | 3377witness fees, must be paid by the dissolved limited liability company. |
|---|
| 3567 | 3495 | | 3378 (4) A dissolved limited liability company that provides security in the amount and form |
|---|
| 3568 | 3496 | | 3379ordered by the court under Subsection (1) satisfies the limited liability company's obligations |
|---|
| 3569 | 3497 | | 3380with respect to claims that are contingent, have not been made known to the limited liability |
|---|
| 3570 | 3498 | | 3381company, or are based on an event occurring after the effective date of dissolution, and such |
|---|
| 3571 | 3499 | | 3382claims may not be enforced against a member or transferee that received assets in liquidation. |
|---|
| 3572 | 3500 | | 3383 Section 78. Section 48-3a-1003 is amended to read: |
|---|
| 3573 | 3501 | | 3384 48-3a-1003. Required notice or approval. |
|---|
| 3574 | 3502 | | 3385 (1) A domestic or foreign entity that is required to give notice to, or obtain the approval |
|---|
| 3575 | 3503 | | 3386of, a governmental agency or officer of this state to be a party to a merger must give the notice |
|---|
| 3576 | 3504 | | 3387or obtain the approval to be a party to an interest exchange, conversion, or domestication. |
|---|
| 3577 | 3505 | | 3388 (2) Property held for a charitable purpose under the law of this state by a domestic or |
|---|
| 3578 | 3506 | | 3389foreign entity immediately before a transaction under this part becomes effective may not, as a |
|---|
| 3579 | 3507 | | 3390result of the transaction, be diverted from the objects for which it was donated, granted, |
|---|
| 3580 | 3508 | | 3391devised, or otherwise transferred unless, to the extent required by or pursuant to the law of this |
|---|
| 3581 | 3509 | | 3392state concerning cy pres or other law dealing with nondiversion of charitable assets, the entity |
|---|
| 3582 | 3510 | | 3393obtains [an appropriate order of the district court] a court order specifying the disposition of the |
|---|
| 3583 | 3511 | | 3394property. |
|---|
| 3584 | 3512 | | 3395 (3) A bequest, devise, gift, grant, or promise contained in a will or other instrument of |
|---|
| 3585 | 3513 | | 3396donation, subscription, or conveyance that is made to a merging entity that is not the surviving |
|---|
| 3586 | 3514 | | 3397entity and that takes effect or remains payable after the merger inures to the surviving entity. A |
|---|
| 3587 | 3515 | | 3398trust obligation that would govern property if transferred to the nonsurviving entity applies to |
|---|
| 3588 | 3516 | | 3399property that is transferred to the surviving entity under this section. |
|---|
| 3589 | 3517 | | 3400 Section 79. Section 48-3a-1111 is amended to read: |
|---|
| 3590 | 3518 | | 3401 48-3a-1111. Purchase of interest upon death, incapacity, or disqualification of |
|---|
| 3591 | 3519 | | 3402member. |
|---|
| 3595 | 3523 | | 3405disqualification of the member: |
|---|
| 3596 | 3524 | | 3406 (a) the certificate of organization; |
|---|
| 3597 | 3525 | | 3407 (b) the operating agreement; or |
|---|
| 3598 | 3526 | | 3408 (c) a private agreement. |
|---|
| 3599 | 3527 | | 3409 (2) In the absence of a provision described in Subsection (1), a professional services |
|---|
| 3600 | 3528 | | 3410company shall purchase the interest of a member who is deceased, incapacitated, or no longer |
|---|
| 3601 | 3529 | | 3411qualified to own an interest in the professional services company within 90 days after the day |
|---|
| 3602 | 3530 | | 3412on which the professional services company is notified of the death, incapacity, or |
|---|
| 3603 | 3531 | | 3413disqualification. |
|---|
| 3604 | 3532 | | 3414 (3) If a professional services company purchases a member's interest under Subsection |
|---|
| 3605 | 3533 | | 3415(2), the professional services company shall purchase the interest at a price that is the |
|---|
| 3606 | 3534 | | 3416reasonable fair market value as of the date of death, incapacity, or disqualification. |
|---|
| 3607 | 3535 | | 3417 (4) If a professional services company fails to purchase a member's interest as required |
|---|
| 3608 | 3536 | | 3418by Subsection (2) at the end of the 90-day period described in Subsection (2), [one of the |
|---|
| 3609 | 3537 | | 3419following may bring an action in the district court of the county in which the principal office or |
|---|
| 3610 | 3538 | | 3420place of practice of the professional services company is located] the following persons may |
|---|
| 3611 | 3539 | | 3421bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 3612 | 3540 | | 3422Administration, to enforce Subsection (2): |
|---|
| 3613 | 3541 | | 3423 (a) the personal representative of a deceased member; |
|---|
| 3614 | 3542 | | 3424 (b) the guardian or conservator of an incapacitated member; or |
|---|
| 3615 | 3543 | | 3425 (c) the disqualified member. |
|---|
| 3616 | 3544 | | 3426 (5) A court in which an action is brought under Subsection (4) may: |
|---|
| 3617 | 3545 | | 3427 (a) award the person bringing the action the reasonable fair market value of the |
|---|
| 3618 | 3546 | | 3428interest; or |
|---|
| 3619 | 3547 | | 3429 (b) within [its] the court's jurisdiction, order the liquidation of the professional services |
|---|
| 3628 | 3555 | | 3436 (1) (a) Except as provided in Section 57-8-13.1, an association of unit owners has a |
|---|
| 3629 | 3556 | | 3437lien on a unit for: |
|---|
| 3630 | 3557 | | 3438 (i) an assessment; |
|---|
| 3631 | 3558 | | 3439 (ii) except as provided in the declaration, fees, charges, and costs associated with |
|---|
| 3632 | 3559 | | 3440collecting an unpaid assessment, including: |
|---|
| 3633 | 3560 | | 3441 (A) court costs and reasonable attorney fees; |
|---|
| 3634 | 3561 | | 3442 (B) late charges; |
|---|
| 3635 | 3562 | | 3443 (C) interest; and |
|---|
| 3636 | 3563 | | 3444 (D) any other amount that the association of unit owners is entitled to recover under the |
|---|
| 3637 | 3564 | | 3445declaration, this chapter, or an administrative or judicial decision; and |
|---|
| 3638 | 3565 | | 3446 (iii) a fine that the association of unit owners imposes against a unit owner in |
|---|
| 3639 | 3566 | | 3447accordance with Section 57-8-37, if: |
|---|
| 3640 | 3567 | | 3448 (A) the time for appeal described in Subsection 57-8-37(5) has expired and the unit |
|---|
| 3641 | 3568 | | 3449owner did not file an appeal; or |
|---|
| 3642 | 3569 | | 3450 (B) the unit owner timely filed an appeal under Subsection 57-8-37(5) and [the district] |
|---|
| 3643 | 3570 | | 3451a court issued a final order upholding a fine imposed under Subsection 57-8-37(1). |
|---|
| 3644 | 3571 | | 3452 (b) The recording of a declaration constitutes record notice and perfection of a lien |
|---|
| 3645 | 3572 | | 3453described in Subsection (1)(a). |
|---|
| 3646 | 3573 | | 3454 (2) If an assessment is payable in installments, a lien described in Subsection (1)(a)(i) |
|---|
| 3647 | 3574 | | 3455is for the full amount of the assessment from the time the first installment is due, unless the |
|---|
| 3648 | 3575 | | 3456association of unit owners otherwise provides in a notice of assessment. |
|---|
| 3660 | 3587 | | 3467 (c) a lien for real estate taxes or other governmental assessments or charges against the |
|---|
| 3661 | 3588 | | 3468unit. |
|---|
| 3662 | 3589 | | 3469 (5) A lien under this section is not subject to Title 78B, Chapter 5, Part 5, Utah |
|---|
| 3663 | 3590 | | 3470Exemptions Act. |
|---|
| 3664 | 3591 | | 3471 (6) Unless the declaration provides otherwise, if two or more associations of unit |
|---|
| 3665 | 3592 | | 3472owners have liens for assessments on the same unit, the liens have equal priority, regardless of |
|---|
| 3666 | 3593 | | 3473when the liens are created. |
|---|
| 3667 | 3594 | | 3474 Section 81. Section 57-8a-301 is amended to read: |
|---|
| 3668 | 3595 | | 3475 57-8a-301. Lien in favor of association for assessments and costs of collection. |
|---|
| 3669 | 3596 | | 3476 (1) (a) Except as provided in Section 57-8a-105, an association has a lien on a lot for: |
|---|
| 3670 | 3597 | | 3477 (i) an assessment; |
|---|
| 3671 | 3598 | | 3478 (ii) except as provided in the declaration, fees, charges, and costs associated with |
|---|
| 3672 | 3599 | | 3479collecting an unpaid assessment, including: |
|---|
| 3673 | 3600 | | 3480 (A) court costs and reasonable attorney fees; |
|---|
| 3674 | 3601 | | 3481 (B) late charges; |
|---|
| 3675 | 3602 | | 3482 (C) interest; and |
|---|
| 3676 | 3603 | | 3483 (D) any other amount that the association is entitled to recover under the declaration, |
|---|
| 3680 | 3605 | | 3485 (iii) a fine that the association imposes against a lot owner in accordance with Section |
|---|
| 3681 | 3606 | | 348657-8a-208, if: |
|---|
| 3682 | 3607 | | 3487 (A) the time for appeal described in Subsection 57-8a-208(5) has expired and the lot |
|---|
| 3683 | 3608 | | 3488owner did not file an appeal; or |
|---|
| 3684 | 3609 | | 3489 (B) the lot owner timely filed an appeal under Subsection 57-8a-208(5) and [the |
|---|
| 3685 | 3610 | | 3490district] a court issued a final order upholding a fine imposed under Subsection 57-8a-208(1). |
|---|
| 3686 | 3611 | | 3491 (b) The recording of a declaration constitutes record notice and perfection of a lien |
|---|
| 3687 | 3612 | | 3492described in Subsection (1)(a). |
|---|
| 3688 | 3613 | | 3493 (2) If an assessment is payable in installments, a lien described in Subsection (1)(a)(i) |
|---|
| 3689 | 3614 | | 3494is for the full amount of the assessment from the time the first installment is due, unless the |
|---|
| 3690 | 3615 | | 3495association otherwise provides in a notice of assessment. |
|---|
| 3691 | 3616 | | 3496 (3) An unpaid assessment or fine accrues interest at the rate provided: |
|---|
| 3693 | 3619 | | 3498 (b) in the declaration, if the declaration provides for a different interest rate. |
|---|
| 3694 | 3620 | | 3499 (4) A lien under this section has priority over each other lien and encumbrance on a lot |
|---|
| 3695 | 3621 | | 3500except: |
|---|
| 3696 | 3622 | | 3501 (a) a lien or encumbrance recorded before the declaration is recorded; |
|---|
| 3697 | 3623 | | 3502 (b) a first or second security interest on the lot secured by a mortgage or trust deed that |
|---|
| 3698 | 3624 | | 3503is recorded before a recorded notice of lien by or on behalf of the association; or |
|---|
| 3699 | 3625 | | 3504 (c) a lien for real estate taxes or other governmental assessments or charges against the |
|---|
| 3700 | 3626 | | 3505lot. |
|---|
| 3701 | 3627 | | 3506 (5) A lien under this section is not subject to Title 78B, Chapter 5, Part 5, Utah |
|---|
| 3702 | 3628 | | 3507Exemptions Act. |
|---|
| 3703 | 3629 | | 3508 (6) Unless the declaration provides otherwise, if two or more associations have liens |
|---|
| 3704 | 3630 | | 3509for assessments on the same lot, the liens have equal priority, regardless of when the liens are |
|---|
| 3705 | 3631 | | 3510created. |
|---|
| 3708 | 3633 | | 3512 57-17-5. Failure to return deposit or prepaid rent or to give required notice -- |
|---|
| 3709 | 3634 | | 3513Recovery of deposit, penalty, costs, and attorney fees. |
|---|
| 3710 | 3635 | | 3514 (1) If an owner or the owner's agent fails to comply with the requirements described in |
|---|
| 3711 | 3636 | | 3515Subsection 57-17-3(5), the renter may: |
|---|
| 3712 | 3637 | | 3516 (a) recover from the owner: |
|---|
| 3713 | 3638 | | 3517 (i) if the owner or the owner's agent failed to timely return the balance of the renter's |
|---|
| 3714 | 3639 | | 3518deposit, the full deposit; |
|---|
| 3715 | 3640 | | 3519 (ii) if the owner or the owner's agent failed to timely return the balance of the renter's |
|---|
| 3716 | 3641 | | 3520prepaid rent, the full amount of the prepaid rent; and |
|---|
| 3717 | 3642 | | 3521 (iii) a civil penalty of $100; and |
|---|
| 3718 | 3643 | | 3522 (b) file an action [in district court] to enforce compliance with the provisions of this |
|---|
| 3719 | 3644 | | 3523section. |
|---|
| 3720 | 3645 | | 3524 (2) In an action under Subsection (1)(b), the court shall award costs and attorney fees |
|---|
| 3721 | 3646 | | 3525to the prevailing party if the court determines that the opposing party acted in bad faith. |
|---|
| 3722 | 3647 | | 3526 (3) A renter is not entitled to relief under this section if the renter fails to serve a notice |
|---|
| 3723 | 3648 | | 3527in accordance with Subsection 57-17-3(3). |
|---|
| 3725 | 3651 | | 3529to which the owner or the renter is entitled. |
|---|
| 3726 | 3652 | | 3530 Section 83. Section 57-19-20 is amended to read: |
|---|
| 3727 | 3653 | | 3531 57-19-20. Injunctive relief -- Cease and desist order. |
|---|
| 3728 | 3654 | | 3532 (1) Whenever it appears to the director that any person has engaged or is about to |
|---|
| 3729 | 3655 | | 3533engage in any act or practice constituting a violation of any provision of this chapter, and that it |
|---|
| 3730 | 3656 | | 3534would be in the public interest to stop those acts or practices, the director may either: |
|---|
| 3731 | 3657 | | 3535 (a) seek injunctive relief as provided in Rule 65A, Utah Rules of Civil Procedure; or |
|---|
| 3732 | 3658 | | 3536 (b) issue an administrative cease and desist order. |
|---|
| 3733 | 3659 | | 3537 (2) If an administrative cease and desist order is issued pursuant to Subsection (1), the |
|---|
| 3737 | 3661 | | 3539that a hearing be held before an administrative law judge. If a request for a hearing is made, |
|---|
| 3738 | 3662 | | 3540the division shall follow the procedures and requirements of Title 63G, Chapter 4, |
|---|
| 3739 | 3663 | | 3541Administrative Procedures Act. Pending the hearing, the order remains in effect. |
|---|
| 3740 | 3664 | | 3542 (3) (a) If, at the hearing, a finding is made that there has been a violation of this |
|---|
| 3741 | 3665 | | 3543chapter, the director, with the concurrence of the executive director, may issue an order making |
|---|
| 3742 | 3666 | | 3544the cease and desist order permanent. |
|---|
| 3743 | 3667 | | 3545 (b) If no hearing is requested, and if the person fails to cease the act or practice, or after |
|---|
| 3744 | 3668 | | 3546discontinuing the act or practice again commences [it] the act or practice, the director shall [file |
|---|
| 3745 | 3669 | | 3547suit in the district court of the county in which the act or practice occurred, or where the person |
|---|
| 3746 | 3670 | | 3548resides or carries on business,] bring an action in a court with jurisdiction under Title 78A, |
|---|
| 3747 | 3671 | | 3549Judiciary and Judicial Administration, to enjoin and restrain the person from violating this |
|---|
| 3748 | 3672 | | 3550chapter. |
|---|
| 3749 | 3673 | | 3551 (4) (a) Whether or not the director has issued a cease and desist order, the attorney |
|---|
| 3750 | 3674 | | 3552general, in the name of the state or of the director, may bring an action [in any court of |
|---|
| 3751 | 3675 | | 3553competent jurisdiction] in a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 3752 | 3676 | | 3554Administration, to enjoin any act or practice constituting a violation of any provision of this |
|---|
| 3753 | 3677 | | 3555chapter, and to enforce compliance with this chapter or any rule or order under this chapter. |
|---|
| 3754 | 3678 | | 3556 (b) Upon a proper showing, a permanent or temporary injunction, restraining order, or |
|---|
| 3755 | 3679 | | 3557writ of mandamus shall be granted. |
|---|
| 3756 | 3680 | | 3558 Section 84. Section 57-21-11 is amended to read: |
|---|
| 3758 | 3683 | | 3560 (1) Under Sections 57-21-9 and 57-21-10, if the director, presiding officer, |
|---|
| 3759 | 3684 | | 3561commissioner, Appeals Board, or court finds reasonable cause to believe that a discriminatory |
|---|
| 3760 | 3685 | | 3562housing practice has occurred or is about to occur, the director, presiding officer, |
|---|
| 3761 | 3686 | | 3563commissioner, Appeals Board, or court may order, as considered appropriate: |
|---|
| 3762 | 3687 | | 3564 (a) the respondent to cease any discriminatory housing practice; |
|---|
| 3765 | 3689 | | 3566 (c) any permanent or temporary injunction, temporary restraining order, or other |
|---|
| 3766 | 3690 | | 3567appropriate order. |
|---|
| 3767 | 3691 | | 3568 (2) In addition to the relief granted to an aggrieved person under Subsection (1), in |
|---|
| 3768 | 3692 | | 3569order to vindicate the public interest, the director, presiding officer, or court may also assess |
|---|
| 3769 | 3693 | | 3570civil penalties against the respondent in an amount not exceeding: |
|---|
| 3770 | 3694 | | 3571 (a) $10,000 if the respondent has not been adjudged to have committed any prior |
|---|
| 3771 | 3695 | | 3572discriminatory housing practice; |
|---|
| 3772 | 3696 | | 3573 (b) $25,000 if the respondent has been adjudged to have committed one other |
|---|
| 3773 | 3697 | | 3574discriminatory housing practice during the five-year period ending on the date of the filing of |
|---|
| 3774 | 3698 | | 3575the complaint; or |
|---|
| 3775 | 3699 | | 3576 (c) $50,000 if the respondent has been adjudged to have committed two or more |
|---|
| 3776 | 3700 | | 3577discriminatory housing practices during the seven-year period ending on the date of the filing |
|---|
| 3777 | 3701 | | 3578of this complaint. |
|---|
| 3778 | 3702 | | 3579 (3) The time periods in Subsections (2)(b) and (c) may be disregarded if the acts |
|---|
| 3779 | 3703 | | 3580constituting the discriminatory housing practice are committed by the same natural person who |
|---|
| 3780 | 3704 | | 3581has previously been adjudged to have committed a discriminatory housing practice. |
|---|
| 3781 | 3705 | | 3582 (4) The division may [file a petition in a district court of competent jurisdiction] |
|---|
| 3782 | 3706 | | 3583petition a court with jurisdiction under Title 78A, Judiciary and Judicial Administration, for: |
|---|
| 3783 | 3707 | | 3584 (a) the enforcement of a final department order; and |
|---|
| 3784 | 3708 | | 3585 (b) for any appropriate temporary relief or restraining order necessary for the |
|---|
| 3785 | 3709 | | 3586enforcement of a final commission order. |
|---|
| 3786 | 3710 | | 3587 Section 85. Section 57-22-6 is amended to read: |
|---|
| 3787 | 3711 | | 3588 57-22-6. Renter remedies for deficient condition of residential rental unit. |
|---|
| 3788 | 3712 | | 3589 (1) As used in this section: |
|---|
| 3794 | 3717 | | 3593 (b) "Deficient condition" means a condition of a residential rental unit that: |
|---|
| 3795 | 3718 | | 3594 (i) violates a standard of habitability or a requirement of the rental agreement; and |
|---|
| 3796 | 3719 | | 3595 (ii) is not caused by: |
|---|
| 3797 | 3720 | | 3596 (A) the renter, the renter's family, or the renter's guest or invitee; and |
|---|
| 3798 | 3721 | | 3597 (B) a use that would violate: |
|---|
| 3799 | 3722 | | 3598 (I) the rental agreement; or |
|---|
| 3800 | 3723 | | 3599 (II) a law applicable to the renter's use of the residential rental unit. |
|---|
| 3801 | 3724 | | 3600 (c) "Notice of deficient condition" means the notice described in Subsection (2). |
|---|
| 3802 | 3725 | | 3601 (d) "Rent abatement remedy" means the remedy described in Subsection (4)(a)(i). |
|---|
| 3803 | 3726 | | 3602 (e) "Renter remedy" means: |
|---|
| 3804 | 3727 | | 3603 (i) a rent abatement remedy; or |
|---|
| 3805 | 3728 | | 3604 (ii) a repair and deduct remedy. |
|---|
| 3806 | 3729 | | 3605 (f) "Repair and deduct remedy" means the remedy described in Subsection (4)(a)(ii). |
|---|
| 3807 | 3730 | | 3606 (g) "Standard of habitability" means a standard: |
|---|
| 3808 | 3731 | | 3607 (i) relating to the condition of a residential rental unit; and |
|---|
| 3809 | 3732 | | 3608 (ii) that an owner is required to ensure that the residential rental unit meets as required |
|---|
| 3810 | 3733 | | 3609under Subsection 57-22-3(1) or Subsection 57-22-4(1)(a) or (b)(i), (ii), or (iii). |
|---|
| 3811 | 3734 | | 3610 (2) (a) If a renter believes that the renter's residential rental unit has a deficient |
|---|
| 3812 | 3735 | | 3611condition, the renter may give the owner written notice as provided in Subsection (2)(b). |
|---|
| 3813 | 3736 | | 3612 (b) A notice under Subsection (2)(a) shall: |
|---|
| 3814 | 3737 | | 3613 (i) describe each deficient condition; |
|---|
| 3815 | 3738 | | 3614 (ii) state that the owner has the corrective period, stated in terms of the applicable |
|---|
| 3816 | 3739 | | 3615number of days, to correct each deficient condition; |
|---|
| 3817 | 3740 | | 3616 (iii) state the renter remedy that the renter has chosen if the owner does not, within the |
|---|
| 3818 | 3741 | | 3617corrective period, take substantial action toward correcting each deficient condition; |
|---|
| 3819 | 3742 | | 3618 (iv) provide the owner permission to enter the residential rental unit to make corrective |
|---|
| 3824 | 3747 | | 3622 (B) the rental agreement. |
|---|
| 3825 | 3748 | | 3623 (3) (a) As used in this Subsection (3), "dangerous condition" means a deficient |
|---|
| 3826 | 3749 | | 3624condition that poses a substantial risk of: |
|---|
| 3827 | 3750 | | 3625 (i) imminent loss of life; or |
|---|
| 3828 | 3751 | | 3626 (ii) significant physical harm. |
|---|
| 3829 | 3752 | | 3627 (b) If a renter believes that the renter's residential rental unit has a dangerous condition, |
|---|
| 3830 | 3753 | | 3628the renter may notify the owner of the dangerous condition by any means that is reasonable |
|---|
| 3831 | 3754 | | 3629under the circumstances. |
|---|
| 3832 | 3755 | | 3630 (c) An owner shall: |
|---|
| 3833 | 3756 | | 3631 (i) within 24 hours after receiving notice under Subsection (3)(b) of a dangerous |
|---|
| 3834 | 3757 | | 3632condition, commence remedial action to correct the dangerous condition; and |
|---|
| 3835 | 3758 | | 3633 (ii) diligently pursue remedial action to completion. |
|---|
| 3836 | 3759 | | 3634 (d) Notice under Subsection (3)(b) of a dangerous condition does not constitute a |
|---|
| 3837 | 3760 | | 3635notice of deficient condition, unless the notice also meets the requirements of Subsection (2). |
|---|
| 3838 | 3761 | | 3636 (4) (a) Subject to Subsection (4)(b), if an owner fails to take substantial action, before |
|---|
| 3839 | 3762 | | 3637the end of the corrective period, toward correcting a deficient condition described in a notice of |
|---|
| 3840 | 3763 | | 3638deficient condition: |
|---|
| 3841 | 3764 | | 3639 (i) if the renter chose the rent abatement remedy in the notice of deficient condition: |
|---|
| 3842 | 3765 | | 3640 (A) the renter's rent is abated as of the date of the notice of deficient condition to the |
|---|
| 3843 | 3766 | | 3641owner; |
|---|
| 3844 | 3767 | | 3642 (B) the rental agreement is terminated; |
|---|
| 3845 | 3768 | | 3643 (C) the owner shall immediately pay to the renter: |
|---|
| 3846 | 3769 | | 3644 (I) the entire security deposit that the renter paid under the rental agreement; and |
|---|
| 3847 | 3770 | | 3645 (II) a prorated refund for any prepaid rent, including any rent the renter paid for the |
|---|
| 3857 | 3779 | | 3653 (II) deduct from future rent the amount the renter paid to correct the deficient |
|---|
| 3858 | 3780 | | 3654condition, not to exceed an amount equal to two months' rent; and |
|---|
| 3859 | 3781 | | 3655 (B) shall: |
|---|
| 3860 | 3782 | | 3656 (I) maintain all receipts documenting the amount the renter paid to correct the deficient |
|---|
| 3861 | 3783 | | 3657condition; and |
|---|
| 3862 | 3784 | | 3658 (II) provide a copy of those receipts to the owner within five calendar days after the |
|---|
| 3863 | 3785 | | 3659beginning of the next rental period. |
|---|
| 3864 | 3786 | | 3660 (b) A renter is not entitled to a renter remedy if the renter is not in compliance with all |
|---|
| 3865 | 3787 | | 3661requirements under Section 57-22-5. |
|---|
| 3866 | 3788 | | 3662 (c) (i) If a residential rental unit is not fit for occupancy, an owner may: |
|---|
| 3867 | 3789 | | 3663 (A) determine not to correct a deficient condition described in a notice of deficient |
|---|
| 3868 | 3790 | | 3664condition; and |
|---|
| 3869 | 3791 | | 3665 (B) terminate the rental agreement. |
|---|
| 3870 | 3792 | | 3666 (ii) If an owner determines not to correct a deficient condition and terminates the rental |
|---|
| 3871 | 3793 | | 3667agreement under Subsection (4)(c)(i): |
|---|
| 3872 | 3794 | | 3668 (A) the owner shall: |
|---|
| 3873 | 3795 | | 3669 (I) notify the renter in writing no later than the end of the corrective period; and |
|---|
| 3874 | 3796 | | 3670 (II) within 10 calendar days after the owner terminates the rental agreement, pay to the |
|---|
| 3875 | 3797 | | 3671renter: |
|---|
| 3876 | 3798 | | 3672 (Aa) any prepaid rent, prorated as provided in Subsection (4)(c)(ii)(B); and |
|---|
| 3879 | 3800 | | 3674 (B) the rent shall be prorated to the date the owner terminates the rental agreement |
|---|
| 3880 | 3801 | | 3675under Subsection (4)(c)(i); and |
|---|
| 3881 | 3802 | | 3676 (C) the renter may not be required to vacate the residential rental unit sooner than 10 |
|---|
| 3882 | 3803 | | 3677calendar days after the owner notifies the renter under Subsection (4)(c)(ii)(A)(I). |
|---|
| 3883 | 3804 | | 3678 (5) (a) After the corrective period expires, a renter may bring [an action in district |
|---|
| 3884 | 3805 | | 3679court] an action in a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 3885 | 3806 | | 3680Administration, to enforce the renter remedy that the renter chose in the notice of deficient |
|---|
| 3886 | 3807 | | 3681condition. |
|---|
| 3887 | 3808 | | 3682 (b) In an action under Subsection (5)(a), the court shall endorse on the summons that |
|---|
| 3889 | 3811 | | 3684 (c) If, in an action under Subsection (5)(a), the court finds that the owner unjustifiably |
|---|
| 3890 | 3812 | | 3685refused to correct a deficient condition or failed to use due diligence to correct a deficient |
|---|
| 3891 | 3813 | | 3686condition, the renter is entitled to any damages, in addition to the applicable renter remedy. |
|---|
| 3892 | 3814 | | 3687 (d) An owner who disputes that a condition of the residential rental unit violates a |
|---|
| 3893 | 3815 | | 3688requirement of the rental agreement may file a counterclaim in an action brought against the |
|---|
| 3894 | 3816 | | 3689owner under Subsection (5)(a). |
|---|
| 3895 | 3817 | | 3690 (6) An owner may not be held liable under this chapter for a claim for mental suffering |
|---|
| 3896 | 3818 | | 3691or anguish. |
|---|
| 3897 | 3819 | | 3692 (7) In an action under this chapter, the court may award costs and reasonable attorney |
|---|
| 3898 | 3820 | | 3693fees to the prevailing party. |
|---|
| 3899 | 3821 | | 3694 Section 86. Section 57-23-7 is amended to read: |
|---|
| 3900 | 3822 | | 3695 57-23-7. Investigatory powers and proceedings of division. |
|---|
| 3901 | 3823 | | 3696 (1) The division may: |
|---|
| 3902 | 3824 | | 3697 (a) make necessary public or private investigations within or outside of this state to |
|---|
| 3903 | 3825 | | 3698determine whether any person has violated or is about to violate this chapter or any rule or |
|---|
| 3904 | 3826 | | 3699order made by the division under this chapter; and |
|---|
| 3908 | 3828 | | 3701as the division determines, as to all the facts and circumstances concerning the matter to be |
|---|
| 3909 | 3829 | | 3702investigated. |
|---|
| 3910 | 3830 | | 3703 (2) For the purpose of any investigation or proceeding under this chapter: |
|---|
| 3911 | 3831 | | 3704 (a) the division may administer oaths or affirmations; and |
|---|
| 3912 | 3832 | | 3705 (b) upon its own motion or upon the request of any party, the division may: |
|---|
| 3913 | 3833 | | 3706 (i) subpoena witnesses; |
|---|
| 3914 | 3834 | | 3707 (ii) compel their attendance; |
|---|
| 3915 | 3835 | | 3708 (iii) take evidence; and |
|---|
| 3916 | 3836 | | 3709 (iv) require the production of any matter which is relevant to the investigation, |
|---|
| 3917 | 3837 | | 3710including: |
|---|
| 3918 | 3838 | | 3711 (A) the existence, description, nature, custody, condition and location of any books, |
|---|
| 3919 | 3839 | | 3712documents, or other tangible records; |
|---|
| 3920 | 3840 | | 3713 (B) the identity and location of persons having knowledge of relevant facts; or |
|---|
| 3922 | 3843 | | 3715evidence. |
|---|
| 3923 | 3844 | | 3716 (3) Upon failure of any person to obey a subpoena or to answer questions propounded |
|---|
| 3924 | 3845 | | 3717by the investigating officer and upon reasonable notice to all persons affected by the subpoena |
|---|
| 3925 | 3846 | | 3718or information sought to be discovered under the subpoena, the division may [apply to the |
|---|
| 3926 | 3847 | | 3719district court] petition a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 3927 | 3848 | | 3720Administration, for an order compelling compliance. |
|---|
| 3928 | 3849 | | 3721 Section 87. Section 57-23-8 is amended to read: |
|---|
| 3929 | 3850 | | 3722 57-23-8. Enforcement powers of division -- Cease and desist orders. |
|---|
| 3930 | 3851 | | 3723 (1) (a) If the director has reason to believe that any person has been or is engaging in |
|---|
| 3931 | 3852 | | 3724conduct violating this chapter, or has violated any lawful order or rule of the division, the |
|---|
| 3932 | 3853 | | 3725director shall issue and serve upon the person a cease and desist order. The director may also |
|---|
| 3933 | 3854 | | 3726order the person to take whatever affirmative actions the director determines to be necessary to |
|---|
| 3936 | 3856 | | 3728 (b) The person served with an order under Subsection (1)(a) may request an |
|---|
| 3937 | 3857 | | 3729adjudicative proceeding within 10 days after receiving the order. The cease and desist order |
|---|
| 3938 | 3858 | | 3730remains in effect pending the hearing. |
|---|
| 3939 | 3859 | | 3731 (c) The division shall follow the procedures and requirements of Title 63G, Chapter 4, |
|---|
| 3940 | 3860 | | 3732Administrative Procedures Act, if the person served requests a hearing. |
|---|
| 3941 | 3861 | | 3733 (2) (a) After the hearing the director may issue a final order making the cease and |
|---|
| 3942 | 3862 | | 3734desist order permanent if the director finds there has been a violation of this chapter. |
|---|
| 3943 | 3863 | | 3735 (b) If no hearing is requested and the person served does not obey the director's order, |
|---|
| 3944 | 3864 | | 3736the director may [file suit] bring an action in a court with jurisdiction under Title 78A, |
|---|
| 3945 | 3865 | | 3737Judiciary and Judicial Administration, in the name of the Department of Commerce and the |
|---|
| 3946 | 3866 | | 3738Division of Real Estate to enjoin the person from violating this chapter. [The action shall be |
|---|
| 3947 | 3867 | | 3739filed in the district court in the county in which the conduct occurred, where the person served |
|---|
| 3948 | 3868 | | 3740with the cease and desist order either resides or carries on business.] |
|---|
| 3949 | 3869 | | 3741 (3) The remedies and action provided in this section are not exclusive but are in |
|---|
| 3950 | 3870 | | 3742addition to any other remedies or actions available under Section 57-23-10. |
|---|
| 3951 | 3871 | | 3743 Section 88. Section 57-29-303 is amended to read: |
|---|
| 3952 | 3872 | | 3744 57-29-303. Investigatory powers and proceedings of division. |
|---|
| 3965 | 3884 | | 3755 (ii) compel a witness's attendance; |
|---|
| 3966 | 3885 | | 3756 (iii) take evidence; or |
|---|
| 3967 | 3886 | | 3757 (iv) require the production, within 10 business days, of any information or item that is |
|---|
| 3968 | 3887 | | 3758relevant to the investigation, including: |
|---|
| 3969 | 3888 | | 3759 (A) the existence, description, nature, custody, condition, and location of any books, |
|---|
| 3970 | 3889 | | 3760electronic records, documents, or other tangible records; |
|---|
| 3971 | 3890 | | 3761 (B) the identity and location of any person who has knowledge of relevant facts; or |
|---|
| 3972 | 3891 | | 3762 (C) any other information or item that is reasonably calculated to lead to the discovery |
|---|
| 3973 | 3892 | | 3763of material evidence. |
|---|
| 3974 | 3893 | | 3764 (3) If a person fails to obey a subpoena or other request made in accordance with this |
|---|
| 3975 | 3894 | | 3765section, the division may [file an action in district court] petition a court with jurisdiction under |
|---|
| 3976 | 3895 | | 3766Title 78A, Judiciary and Judicial Administration, for an order compelling compliance. |
|---|
| 3977 | 3896 | | 3767 Section 89. Section 57-29-304 is amended to read: |
|---|
| 3978 | 3897 | | 3768 57-29-304. Enforcement. |
|---|
| 3979 | 3898 | | 3769 (1) (a) If the director believes that a person has been or is engaging in conduct that |
|---|
| 3980 | 3899 | | 3770violates this chapter, the director: |
|---|
| 3981 | 3900 | | 3771 (i) shall issue and serve upon the person a cease and desist order; and |
|---|
| 3982 | 3901 | | 3772 (ii) may order the person to take any action necessary to carry out the purposes of this |
|---|
| 3983 | 3902 | | 3773chapter. |
|---|
| 3984 | 3903 | | 3774 (b) (i) A person served with an order under Subsection (1)(a) may request a hearing |
|---|
| 3985 | 3904 | | 3775within 10 days after the day on which the person is served. |
|---|
| 3993 | 3912 | | 3782 (c) The division shall conduct a hearing described in Subsection (1)(b) in accordance |
|---|
| 3994 | 3913 | | 3783with Title 63G, Chapter 4, Administrative Procedures Act. |
|---|
| 3995 | 3914 | | 3784 (2) After a hearing described in Subsection (1)(b): |
|---|
| 3996 | 3915 | | 3785 (a) if the director finds that the person violated this chapter, the director may issue a |
|---|
| 3997 | 3916 | | 3786final order making the cease and desist order permanent; or |
|---|
| 3998 | 3917 | | 3787 (b) if the director finds that the person did not violate this chapter, the director shall |
|---|
| 3999 | 3918 | | 3788vacate the cease and desist order. |
|---|
| 4000 | 3919 | | 3789 (3) If a person served with an order under Subsection (1)(a) does not request a hearing |
|---|
| 4001 | 3920 | | 3790and the person fails to comply with the director's order, the director may [file suit in district |
|---|
| 4002 | 3921 | | 3791court] bring an action in a court with jurisdiction under Title 78A, Judiciary and Judicial |
|---|
| 4003 | 3922 | | 3792Administration, in the name of the Department of Commerce and the Division of Real Estate to |
|---|
| 4004 | 3923 | | 3793enjoin the person from violating this chapter. |
|---|
| 4005 | 3924 | | 3794 (4) The remedies and action provided in this section are not exclusive but are in |
|---|
| 4006 | 3925 | | 3795addition to any other remedies or actions available under Section 57-29-305. |
|---|
| 4007 | 3926 | | 3796 Section 90. Section 61-1-20 is amended to read: |
|---|
| 4008 | 3927 | | 3797 61-1-20. Enforcement. |
|---|
| 4009 | 3928 | | 3798 (1) Whenever it appears to the director that a person has engaged, is engaging, or is |
|---|
| 4010 | 3929 | | 3799about to engage in an act or practice constituting a violation of this chapter or a rule or order |
|---|
| 4011 | 3930 | | 3800under this chapter, in addition to specific powers granted in this chapter: |
|---|
| 4012 | 3931 | | 3801 (a) the director may issue an order directing the person to appear before the |
|---|
| 4013 | 3932 | | 3802commission and show cause why an order should not be issued directing the person to cease |
|---|
| 4014 | 3933 | | 3803and desist from engaging in the act or practice, or doing an act in furtherance of the activity; |
|---|
| 4015 | 3934 | | 3804 (b) the order to show cause shall state the reasons for the order and the date of the |
|---|
| 4016 | 3935 | | 3805hearing; |
|---|
| 4017 | 3936 | | 3806 (c) the director shall promptly serve a copy of the order to show cause upon a person |
|---|
| 4022 | 3940 | | 3809business days after the order is issued; |
|---|
| 4023 | 3941 | | 3810 (e) after a hearing, the commission may: |
|---|
| 4024 | 3942 | | 3811 (i) issue an order to cease and desist from engaging in an act or practice constituting a |
|---|
| 4025 | 3943 | | 3812violation of this chapter or a rule or order under this chapter; |
|---|
| 4026 | 3944 | | 3813 (ii) impose a fine in an amount determined after considering the factors set forth in |
|---|
| 4027 | 3945 | | 3814Section 61-1-31; |
|---|
| 4028 | 3946 | | 3815 (iii) order disgorgement; |
|---|
| 4029 | 3947 | | 3816 (iv) order restitution; |
|---|
| 4030 | 3948 | | 3817 (v) order rescission; |
|---|
| 4031 | 3949 | | 3818 (vi) bar or suspend that person from associating with a licensed broker-dealer or |
|---|
| 4032 | 3950 | | 3819investment adviser in this state; and |
|---|
| 4033 | 3951 | | 3820 (vii) impose a combination of sanctions in this Subsection (1)(e). |
|---|
| 4034 | 3952 | | 3821 (2) (a) The director may bring an action in the appropriate [district] court of this state |
|---|
| 4035 | 3953 | | 3822or the appropriate court of another state to enjoin an act or practice and to enforce compliance |
|---|
| 4036 | 3954 | | 3823with this chapter or a rule or order under this chapter. |
|---|
| 4037 | 3955 | | 3824 (b) Upon a proper showing in an action brought under this section, the court may: |
|---|
| 4038 | 3956 | | 3825 (i) issue a permanent or temporary, prohibitory or mandatory injunction; |
|---|
| 4039 | 3957 | | 3826 (ii) issue a restraining order or writ of mandamus; |
|---|
| 4040 | 3958 | | 3827 (iii) enter a declaratory judgment; |
|---|
| 4041 | 3959 | | 3828 (iv) appoint a receiver or conservator for the defendant or the defendant's assets; |
|---|
| 4042 | 3960 | | 3829 (v) order disgorgement; |
|---|
| 4043 | 3961 | | 3830 (vi) order rescission; |
|---|
| 4044 | 3962 | | 3831 (vii) order restitution; |
|---|
| 4045 | 3963 | | 3832 (viii) impose a fine in an amount determined after considering the factors set forth in |
|---|
| 4046 | 3964 | | 3833Section 61-1-31; and |
|---|
| 4047 | 3965 | | 3834 (ix) enter any other relief the court considers just. |
|---|
| 4053 | 3971 | | 3839 (4) When determining the severity of a sanction to be imposed under this section, the |
|---|
| 4054 | 3972 | | 3840commission or court shall consider whether: |
|---|
| 4055 | 3973 | | 3841 (a) the person against whom the sanction is to be imposed exercised undue influence; |
|---|
| 4056 | 3974 | | 3842or |
|---|
| 4057 | 3975 | | 3843 (b) the person against whom the sanction is imposed under this section knows or |
|---|
| 4058 | 3976 | | 3844should know that an investor in the investment that is the grounds for the sanction is a |
|---|
| 4059 | 3977 | | 3845vulnerable adult. |
|---|
| 4060 | 3978 | | 3846 Section 91. Section 61-1-105 is amended to read: |
|---|
| 4061 | 3979 | | 3847 61-1-105. Remedies for employee bringing action. |
|---|
| 4062 | 3980 | | 3848 (1) As used in this section, "actual damages" means damages for injury or loss caused |
|---|
| 4063 | 3981 | | 3849by a violation of Section 61-1-104. |
|---|
| 4064 | 3982 | | 3850 (2) (a) An employee who alleges a violation of Section 61-1-104 may bring [a civil] an |
|---|
| 4065 | 3983 | | 3851action for injunctive relief, actual damages, or both, in a court with jurisdiction under Title |
|---|
| 4066 | 3984 | | 385278A, Judiciary and Judicial Administration. |
|---|
| 4067 | 3985 | | 3853 (b) An employee may not bring [a civil] an action under this section more than: |
|---|
| 4068 | 3986 | | 3854 (i) four years after the day on which the violation of Section 61-1-104 occurs; or |
|---|
| 4069 | 3987 | | 3855 (ii) two years after the date when facts material to the right of action are known or |
|---|
| 4070 | 3988 | | 3856reasonably should be known by the employee alleging a violation of Section 61-1-104. |
|---|
| 4071 | 3989 | | 3857 [(3) An employee may bring an action under this section in the district court for the |
|---|
| 4072 | 3990 | | 3858county where:] |
|---|
| 4073 | 3991 | | 3859 [(a) the alleged violation occurs;] |
|---|
| 4074 | 3992 | | 3860 [(b) the employee resides; or] |
|---|
| 4075 | 3993 | | 3861 [(c) the person against whom the civil complaint is filed resides or has a principal place |
|---|
| 4086 | 4003 | | 3870would have had, but for the adverse action; |
|---|
| 4087 | 4004 | | 3871 (b) two times the amount of back pay otherwise owed to the individual, with interest; |
|---|
| 4088 | 4005 | | 3872 (c) compensation for litigation costs, expert witness fees, and reasonable attorney fees; |
|---|
| 4089 | 4006 | | 3873 (d) actual damages; or |
|---|
| 4090 | 4007 | | 3874 (e) any combination of the remedies listed in this Subsection [(5)] (4). |
|---|
| 4091 | 4008 | | 3875 [(6)] (5) (a) An employer may file a counter claim against an employee who files a |
|---|
| 4092 | 4009 | | 3876civil action under this section seeking attorney fees and costs incurred by the employer related |
|---|
| 4093 | 4010 | | 3877to the action filed by the employee and the counter claim. |
|---|
| 4094 | 4011 | | 3878 (b) The court may award an employer who files a counter claim under this Subsection |
|---|
| 4095 | 4012 | | 3879[(6)] (5) attorney fees and costs if the court finds that: |
|---|
| 4096 | 4013 | | 3880 (i) there is no reasonable basis for the civil action filed by the employee; or |
|---|
| 4097 | 4014 | | 3881 (ii) the employee is not protected under Section 61-1-104 because: |
|---|
| 4098 | 4015 | | 3882 (A) the employee engaged in an act described in Subsections 61-1-104(2)(a) through |
|---|
| 4099 | 4016 | | 3883(c); or |
|---|
| 4100 | 4017 | | 3884 (B) Subsection 61-1-104(2)(d) applies. |
|---|
| 4101 | 4018 | | 3885 Section 92. Section 61-2-203 is amended to read: |
|---|
| 4102 | 4019 | | 3886 61-2-203. Adjudicative proceedings -- Citation authority. |
|---|
| 4103 | 4020 | | 3887 (1) The division shall comply with Title 63G, Chapter 4, Administrative Procedures |
|---|
| 4104 | 4021 | | 3888Act, in an adjudicative proceeding under a chapter the division administers. |
|---|
| 4107 | 4023 | | 3890 (a) a notice of agency action; or |
|---|
| 4108 | 4024 | | 3891 (b) a notice of formal or informal proceeding. |
|---|
| 4109 | 4025 | | 3892 (3) The provisions of Title 63G, Chapter 4, Administrative Procedures Act, do not |
|---|
| 4110 | 4026 | | 3893apply to the issuance of a citation under Subsection (4), unless a licensee or another person |
|---|
| 4111 | 4027 | | 3894authorized by law to contest the validity or correctness of a citation commences an adjudicative |
|---|
| 4112 | 4028 | | 3895proceeding contesting the citation. |
|---|
| 4113 | 4029 | | 3896 (4) In addition to any other statutory penalty for a violation related to an occupation or |
|---|
| 4114 | 4030 | | 3897profession regulated under this title, the division may issue a citation to a person who, upon |
|---|
| 4115 | 4031 | | 3898inspection or investigation, the division concludes to have violated: |
|---|
| 4116 | 4032 | | 3899 (a) Subsection 61-2c-201(1), which requires licensure; |
|---|
| 4118 | 4035 | | 3901 (c) Subsection 61-2c-205(3), which requires notification of a change in specified |
|---|
| 4119 | 4036 | | 3902information regarding a licensee; |
|---|
| 4120 | 4037 | | 3903 (d) Subsection 61-2c-205(4), which requires notification of a specified legal action; |
|---|
| 4121 | 4038 | | 3904 (e) Subsection 61-2c-301(1)(g), which prohibits failing to respond to the division |
|---|
| 4122 | 4039 | | 3905within the required time period; |
|---|
| 4123 | 4040 | | 3906 (f) Subsection 61-2c-301(1)(h), which prohibits making a false representation to the |
|---|
| 4124 | 4041 | | 3907division; |
|---|
| 4125 | 4042 | | 3908 (g) Subsection 61-2c-301(1)(i), which prohibits taking a dual role in a transaction; |
|---|
| 4126 | 4043 | | 3909 (h) Subsection 61-2c-301(1)(l), which prohibits engaging in false or misleading |
|---|
| 4127 | 4044 | | 3910advertising; |
|---|
| 4128 | 4045 | | 3911 (i) Subsection 61-2c-301(1)(t), which prohibits advertising the ability to do licensed |
|---|
| 4129 | 4046 | | 3912work if unlicensed; |
|---|
| 4130 | 4047 | | 3913 (j) Subsection 61-2c-302(5), which requires a mortgage entity to create and file a |
|---|
| 4131 | 4048 | | 3914quarterly report of condition; |
|---|
| 4132 | 4049 | | 3915 (k) Subsection 61-2e-201(1), which requires registration; |
|---|
| 4136 | 4051 | | 3917 (m) Subsection 61-2e-307(1)(c), which prohibits use of an unregistered fictitious name; |
|---|
| 4137 | 4052 | | 3918 (n) Subsection 61-2e-401(1)(c), which prohibits failure to respond to a division |
|---|
| 4138 | 4053 | | 3919request; |
|---|
| 4139 | 4054 | | 3920 (o) Subsection 61-2f-201(1), which requires licensure; |
|---|
| 4140 | 4055 | | 3921 (p) Subsection 61-2f-206(1), which requires registration; |
|---|
| 4141 | 4056 | | 3922 (q) Subsection 61-2f-301(1), which requires notification of a specified legal action; |
|---|
| 4142 | 4057 | | 3923 (r) Subsection 61-2f-401(1)(a), which prohibits making a substantial misrepresentation; |
|---|
| 4143 | 4058 | | 3924 (s) Subsection 61-2f-401(3), which prohibits undertaking real estate while not affiliated |
|---|
| 4144 | 4059 | | 3925with a principal broker; |
|---|
| 4145 | 4060 | | 3926 (t) Subsection 61-2f-401(9), which prohibits failing to keep specified records and |
|---|
| 4146 | 4061 | | 3927prohibits failing to make the specified records available for division inspection; |
|---|
| 4147 | 4062 | | 3928 (u) Subsection 61-2f-401(12), which prohibits false, misleading, or deceptive |
|---|
| 4148 | 4063 | | 3929advertising; |
|---|
| 4149 | 4064 | | 3930 (v) Subsection 61-2f-401(18), which prohibits failing to respond to a division request; |
|---|
| 4151 | 4067 | | 3932 (x) Subsection 61-2g-405(3), which requires making records required to be maintained |
|---|
| 4152 | 4068 | | 3933available to the division; |
|---|
| 4153 | 4069 | | 3934 (y) Subsection 61-2g-501(2)(c), which requires a person to respond to a division |
|---|
| 4154 | 4070 | | 3935request in an investigation within 10 days after the day on which the request is served; |
|---|
| 4155 | 4071 | | 3936 (z) Subsection 61-2g-502(2)(f), which prohibits using a nonregistered fictitious name; |
|---|
| 4156 | 4072 | | 3937 (aa) a rule made pursuant to any Subsection listed in this Subsection (4); |
|---|
| 4157 | 4073 | | 3938 (bb) an order of the division; or |
|---|
| 4158 | 4074 | | 3939 (cc) an order of the commission or board that oversees the person's profession. |
|---|
| 4159 | 4075 | | 3940 (5) (a) In accordance with Subsection (10), the division may assess a fine against a |
|---|
| 4160 | 4076 | | 3941person for a violation of a provision listed in Subsection (4), as evidenced by: |
|---|
| 4161 | 4077 | | 3942 (i) an uncontested citation; |
|---|
| 4164 | 4079 | | 3944 (iii) a finding of a violation in an adjudicative proceeding. |
|---|
| 4165 | 4080 | | 3945 (b) The division may, in addition to or in lieu of a fine under Subsection (5)(a), order |
|---|
| 4166 | 4081 | | 3946the person to cease and desist from an activity that violates a provision listed in Subsection (4). |
|---|
| 4167 | 4082 | | 3947 (6) Except as provided in Subsection (8)(d), the division may not use a citation to |
|---|
| 4168 | 4083 | | 3948effect a license: |
|---|
| 4169 | 4084 | | 3949 (a) denial; |
|---|
| 4170 | 4085 | | 3950 (b) probation; |
|---|
| 4171 | 4086 | | 3951 (c) suspension; or |
|---|
| 4172 | 4087 | | 3952 (d) revocation. |
|---|
| 4173 | 4088 | | 3953 (7) (a) A citation issued by the division shall: |
|---|
| 4174 | 4089 | | 3954 (i) be in writing; |
|---|
| 4175 | 4090 | | 3955 (ii) describe with particularity the nature of the violation, including a reference to the |
|---|
| 4176 | 4091 | | 3956provision of the statute, rule, or order alleged to have been violated; |
|---|
| 4177 | 4092 | | 3957 (iii) clearly state that the recipient must notify the division in writing within 20 |
|---|
| 4178 | 4093 | | 3958calendar days after the day on which the citation is served if the recipient wishes to contest the |
|---|
| 4179 | 4094 | | 3959citation at a hearing conducted under Title 63G, Chapter 4, Administrative Procedures Act; and |
|---|
| 4180 | 4095 | | 3960 (iv) clearly explain the consequences of failure to timely contest the citation or to make |
|---|
| 4181 | 4096 | | 3961payment of a fine assessed by the citation within the time period specified in the citation. |
|---|
| 4193 | 4107 | | 3971 (d) (i) The division may refuse to issue, refuse to renew, suspend, revoke, or place on |
|---|
| 4194 | 4108 | | 3972probation the license of a licensee who fails to comply with a citation after the citation |
|---|
| 4195 | 4109 | | 3973becomes final. |
|---|
| 4196 | 4110 | | 3974 (ii) The failure of a license applicant to comply with a citation after the citation |
|---|
| 4197 | 4111 | | 3975becomes final is a ground for denial of the license application. |
|---|
| 4198 | 4112 | | 3976 (9) (a) The division may not issue a citation under this section after the expiration of |
|---|
| 4199 | 4113 | | 3977one year after the day on which the violation occurs. |
|---|
| 4200 | 4114 | | 3978 (b) The division may issue a notice to address a violation that is outside of the one-year |
|---|
| 4201 | 4115 | | 3979citation period. |
|---|
| 4202 | 4116 | | 3980 (10) The director or the director's designee shall assess a fine with a citation in an |
|---|
| 4203 | 4117 | | 3981amount that is no more than: |
|---|
| 4204 | 4118 | | 3982 (a) for a first offense, $1,000; |
|---|
| 4205 | 4119 | | 3983 (b) for a second offense, $2,000; and |
|---|
| 4206 | 4120 | | 3984 (c) for each offense subsequent to a second offense, $2,000 for each day of continued |
|---|
| 4207 | 4121 | | 3985offense. |
|---|
| 4208 | 4122 | | 3986 (11) (a) An action for a first or second offense for which the division has not issued a |
|---|
| 4209 | 4123 | | 3987final order does not preclude the division from initiating a subsequent action for a second or |
|---|
| 4210 | 4124 | | 3988subsequent offense while the preceding action is pending. |
|---|
| 4211 | 4125 | | 3989 (b) The final order on a subsequent action is considered a second or subsequent |
|---|
| 4212 | 4126 | | 3990offense, respectively, provided the preceding action resulted in a first or second offense, |
|---|
| 4213 | 4127 | | 3991respectively. |
|---|
| 4214 | 4128 | | 3992 (12) (a) If a person does not pay a penalty, the director may collect the unpaid penalty |
|---|
| 4221 | 4135 | | 3998 (b) A county attorney or the attorney general of the state shall provide legal services to |
|---|
| 4222 | 4136 | | 3999the director in an action to collect the penalty. |
|---|
| 4223 | 4137 | | 4000 (c) A court may award reasonable attorney fees and costs to the division in an action |
|---|
| 4224 | 4138 | | 4001the division brings to enforce the provisions of this section. |
|---|
| 4225 | 4139 | | 4002 Section 93. Section 61-2c-403 is amended to read: |
|---|
| 4226 | 4140 | | 4003 61-2c-403. Cease and desist orders. |
|---|
| 4227 | 4141 | | 4004 (1) (a) The director may issue and serve by certified mail, or by personal service, on a |
|---|
| 4228 | 4142 | | 4005person an order to cease and desist from an act if: |
|---|
| 4229 | 4143 | | 4006 (i) the director has reason to believe that the person has been engaged, is engaging in, |
|---|
| 4230 | 4144 | | 4007or is about to engage in the act constituting a violation of this chapter; and |
|---|
| 4231 | 4145 | | 4008 (ii) it appears to the director that it would be in the public interest to stop the act. |
|---|
| 4232 | 4146 | | 4009 (b) Within 10 days after service of the order, the party named in the order may request |
|---|
| 4233 | 4147 | | 4010a hearing to be held in accordance with Title 63G, Chapter 4, Administrative Procedures Act. |
|---|
| 4234 | 4148 | | 4011 (c) Pending a hearing requested under Subsection (1)(b), a cease and desist order shall |
|---|
| 4235 | 4149 | | 4012remain in effect. |
|---|
| 4236 | 4150 | | 4013 (2) (a) After the hearing described in Subsection (1), if the director finds that an act of |
|---|
| 4237 | 4151 | | 4014the person violates this chapter, the director: |
|---|
| 4238 | 4152 | | 4015 (i) shall issue an order making the cease and desist order permanent; and |
|---|
| 4239 | 4153 | | 4016 (ii) may impose another disciplinary action under Section 61-2c-402. |
|---|
| 4240 | 4154 | | 4017 (b) [(i)] The director may [file suit] bring an action in a court with jurisdiction under |
|---|
| 4241 | 4155 | | 4018Title 78A, Judiciary and Judicial Administration, in the name of the division to enjoin and |
|---|
| 4242 | 4156 | | 4019restrain a person on whom an order is served under this section from violating this chapter if: |
|---|
| 4243 | 4157 | | 4020 [(A)] (i) [(I)] (A) the person does not request a hearing under Subsection (1); or |
|---|
| 4244 | 4158 | | 4021 [(II)] (B) a permanent cease and desist order is issued against the person following a |
|---|
| 4245 | 4159 | | 4022hearing or stipulation; and |
|---|
| 4246 | 4160 | | 4023 [(B)] (ii) [(I)] (A) the person fails to cease the act; or |
|---|
| 4250 | 4163 | | 4025 [(ii) The suit described in Subsection (2)(b)(i) shall be filed in the district court in the |
|---|
| 4251 | 4164 | | 4026county:] |
|---|
| 4252 | 4165 | | 4027 [(A) in which the act occurs;] |
|---|
| 4253 | 4166 | | 4028 [(B) where the individual resides; or] |
|---|
| 4254 | 4167 | | 4029 [(C) where the individual or entity carries on business.] |
|---|
| 4255 | 4168 | | 4030 (3) The cease and desist order issued under this section may not interfere with or |
|---|
| 4256 | 4169 | | 4031prevent the prosecution of a remedy or action enforcement under this chapter. |
|---|
| 4257 | 4170 | | 4032 (4) An individual who violates a cease and desist order issued under this section is |
|---|
| 4258 | 4171 | | 4033guilty of a class A misdemeanor. |
|---|
| 4259 | 4172 | | 4034 Section 94. Section 61-2f-403 is amended to read: |
|---|
| 4260 | 4173 | | 4035 61-2f-403. Mishandling of trust money. |
|---|
| 4261 | 4174 | | 4036 (1) The division may audit principal brokers' trust accounts or other accounts in which |
|---|
| 4262 | 4175 | | 4037a licensee maintains trust money under this chapter. If the division's audit shows, in the |
|---|
| 4263 | 4176 | | 4038opinion of the division, gross mismanagement, commingling, or misuse of money, the division, |
|---|
| 4264 | 4177 | | 4039with the concurrence of the commission, may order at the division's expense a complete audit |
|---|
| 4265 | 4178 | | 4040of the account by a certified public accountant, or take other action in accordance with Section |
|---|
| 4266 | 4179 | | 404161-2f-404. |
|---|
| 4267 | 4180 | | 4042 (2) If the commission finds under Subsection (1) that gross mismanagement, |
|---|
| 4268 | 4181 | | 4043comingling, or misuse of money occurred, the commission, with concurrence of the division, |
|---|
| 4269 | 4182 | | 4044may then order the licensee to reimburse the division for the cost of the audit described in |
|---|
| 4270 | 4183 | | 4045Subsection (1). |
|---|
| 4271 | 4184 | | 4046 (3) The licensee may obtain agency review by the executive director or judicial review |
|---|
| 4272 | 4185 | | 4047of any division order. |
|---|
| 4273 | 4186 | | 4048 (4) (a) If it appears that a person has grossly mismanaged, commingled, or otherwise |
|---|
| 4274 | 4187 | | 4049misused trust money, the division, with or without prior administrative proceedings, may bring |
|---|
| 4275 | 4188 | | 4050an action[: (i) in the district court of the district where: (A) the person resides; (B) the person |
|---|
| 4282 | 4195 | | 4056restraining order, and may appoint a receiver or conservator. The division is not required to |
|---|
| 4283 | 4196 | | 4057post a bond in any court proceeding. |
|---|
| 4284 | 4197 | | 4058 Section 95. Section 61-2f-407 is amended to read: |
|---|
| 4285 | 4198 | | 4059 61-2f-407. Remedies and action for violations. |
|---|
| 4286 | 4199 | | 4060 (1) (a) The director shall issue and serve upon a person an order directing that person to |
|---|
| 4287 | 4200 | | 4061cease and desist from an act if: |
|---|
| 4288 | 4201 | | 4062 (i) the director has reason to believe that the person has been engaging, is about to |
|---|
| 4289 | 4202 | | 4063engage, or is engaging in the act constituting a violation of this chapter; and |
|---|
| 4290 | 4203 | | 4064 (ii) it appears to the director that it would be in the public interest to stop the act. |
|---|
| 4291 | 4204 | | 4065 (b) Within 10 days after the day on which the order is served, the person upon whom |
|---|
| 4292 | 4205 | | 4066the order is served may request a hearing. |
|---|
| 4293 | 4206 | | 4067 (c) Pending a hearing requested under Subsection (1)(b), a cease and desist order shall |
|---|
| 4294 | 4207 | | 4068remain in effect. |
|---|
| 4295 | 4208 | | 4069 (d) If a request for a hearing is made, the division shall follow the procedures and |
|---|
| 4296 | 4209 | | 4070requirements of Title 63G, Chapter 4, Administrative Procedures Act. |
|---|
| 4297 | 4210 | | 4071 (2) (a) After a hearing requested under Subsection (1), if the commission and the |
|---|
| 4298 | 4211 | | 4072director agree that an act of the person violates this chapter, the director: |
|---|
| 4299 | 4212 | | 4073 (i) shall issue an order making the order issued under Subsection (1) permanent; and |
|---|
| 4300 | 4213 | | 4074 (ii) may impose another disciplinary action under Section 61-2f-404. |
|---|
| 4301 | 4214 | | 4075 (b) The director shall [file suit] bring an action in a court with jurisdiction under Title |
|---|
| 4302 | 4215 | | 407678A, Judiciary and Judicial Administration, in the name of the Department of Commerce and |
|---|
| 4303 | 4216 | | 4077the Division of Real Estate[, in the district court in the county in which an act described in |
|---|
| 4315 | 4227 | | 4087conviction under Section 76-6-1203, the court may: |
|---|
| 4316 | 4228 | | 4088 (i) issue a permanent or temporary, prohibitory or mandatory injunction; |
|---|
| 4317 | 4229 | | 4089 (ii) issue a restraining order or writ of mandamus; |
|---|
| 4318 | 4230 | | 4090 (iii) enter a declaratory judgment; |
|---|
| 4319 | 4231 | | 4091 (iv) appoint a receiver or conservator for the defendant or the defendant's assets; |
|---|
| 4320 | 4232 | | 4092 (v) order disgorgement; |
|---|
| 4321 | 4233 | | 4093 (vi) order rescission; |
|---|
| 4322 | 4234 | | 4094 (vii) impose a civil penalty not to exceed the greater of: |
|---|
| 4323 | 4235 | | 4095 (A) $5,000 for each violation; or |
|---|
| 4324 | 4236 | | 4096 (B) the amount of any gain or economic benefit derived from a violation; and |
|---|
| 4325 | 4237 | | 4097 (viii) enter any other relief the court considers just. |
|---|
| 4326 | 4238 | | 4098 [(e)] (d) The court may not require the division to post a bond in an action brought |
|---|
| 4327 | 4239 | | 4099under this Subsection (2). |
|---|
| 4328 | 4240 | | 4100 (3) A license, certificate, or registration issued by the division to any person convicted |
|---|
| 4329 | 4241 | | 4101of a violation of Section 76-6-1203 is automatically revoked. |
|---|
| 4330 | 4242 | | 4102 (4) A remedy or action provided in this section does not limit, interfere with, or prevent |
|---|
| 4331 | 4243 | | 4103the prosecution of another remedy or action, including a criminal proceeding. |
|---|
| 4332 | 4244 | | 4104 Section 96. Section 61-2g-501 is amended to read: |
|---|
| 4335 | 4246 | | 4106 (1) (a) The division may conduct a public or private investigation of the actions of: |
|---|
| 4336 | 4247 | | 4107 (i) a person registered, licensed, or certified under this chapter; |
|---|
| 4337 | 4248 | | 4108 (ii) an applicant for registration, licensure, or certification; |
|---|
| 4338 | 4249 | | 4109 (iii) an applicant for renewal of registration, licensure, or certification; or |
|---|
| 4339 | 4250 | | 4110 (iv) a person required to be registered, licensed, or certified under this chapter. |
|---|
| 4340 | 4251 | | 4111 (b) The division may initiate an agency action against a person described in Subsection |
|---|
| 4341 | 4252 | | 4112(1)(a) in accordance with Title 63G, Chapter 4, Administrative Procedures Act, to: |
|---|
| 4342 | 4253 | | 4113 (i) impose disciplinary action; |
|---|
| 4343 | 4254 | | 4114 (ii) deny issuance to an applicant of: |
|---|
| 4344 | 4255 | | 4115 (A) an original registration, license, or certification; or |
|---|
| 4345 | 4256 | | 4116 (B) a renewal of a registration, license, or certification; or |
|---|
| 4347 | 4259 | | 4118 (2) (a) The division may: |
|---|
| 4348 | 4260 | | 4119 (i) administer an oath or affirmation; |
|---|
| 4349 | 4261 | | 4120 (ii) issue a subpoena that requires: |
|---|
| 4350 | 4262 | | 4121 (A) the attendance and testimony of a witness; or |
|---|
| 4351 | 4263 | | 4122 (B) the production of evidence; |
|---|
| 4352 | 4264 | | 4123 (iii) take evidence; and |
|---|
| 4353 | 4265 | | 4124 (iv) require the production of a book, paper, contract, record, document, information, |
|---|
| 4354 | 4266 | | 4125or evidence relevant to the investigation described in Subsection (1). |
|---|
| 4355 | 4267 | | 4126 (b) The division may serve a subpoena by certified mail. |
|---|
| 4356 | 4268 | | 4127 (c) A failure to respond to a request by the division in an investigation authorized |
|---|
| 4357 | 4269 | | 4128under this chapter within 10 days after the day on which the request is served is considered to |
|---|
| 4358 | 4270 | | 4129be a separate violation of this chapter, including: |
|---|
| 4359 | 4271 | | 4130 (i) failing to respond to a subpoena as a witness; |
|---|
| 4360 | 4272 | | 4131 (ii) withholding evidence; or |
|---|
| 4364 | 4274 | | 4133 (d) (i) A court of competent jurisdiction shall enforce, according to the practice and |
|---|
| 4365 | 4275 | | 4134procedure of the court, a subpoena issued by the division. |
|---|
| 4366 | 4276 | | 4135 (ii) The division shall pay any witness fee, travel expense, mileage, or any other fee |
|---|
| 4367 | 4277 | | 4136required by the service statutes of the state where the witness or evidence is located. |
|---|
| 4368 | 4278 | | 4137 (e) (i) If a person is found to have violated this chapter or a rule made under this |
|---|
| 4369 | 4279 | | 4138chapter, the person shall pay the costs incurred by the division to copy a book, paper, contract, |
|---|
| 4370 | 4280 | | 4139document, information, or record required under this chapter, including the costs incurred to |
|---|
| 4371 | 4281 | | 4140copy an electronic book, paper, contract, document, information, or record in a universally |
|---|
| 4372 | 4282 | | 4141readable format. |
|---|
| 4373 | 4283 | | 4142 (ii) If a person fails to pay the costs described in Subsection (2)(e)(i) when due, the |
|---|
| 4374 | 4284 | | 4143person's license, certification, or registration is automatically suspended: |
|---|
| 4375 | 4285 | | 4144 (A) beginning the day on which the payment of costs is due; and |
|---|
| 4376 | 4286 | | 4145 (B) ending the day on which the costs are paid. |
|---|
| 4377 | 4287 | | 4146 (3) (a) The director shall issue and serve upon a person an order directing that person to |
|---|
| 4378 | 4288 | | 4147cease and desist from an act if: |
|---|
| 4380 | 4291 | | 4149engage, or is engaging in the act constituting a violation of this chapter; and |
|---|
| 4381 | 4292 | | 4150 (ii) it appears to the director that it would be in the public interest to stop the act. |
|---|
| 4382 | 4293 | | 4151 (b) Within 10 days after the day on which the order is served, the person upon whom |
|---|
| 4383 | 4294 | | 4152the order is served may request a hearing. |
|---|
| 4384 | 4295 | | 4153 (c) Pending a hearing requested under Subsection (3)(b), a cease and desist order shall |
|---|
| 4385 | 4296 | | 4154remain in effect. |
|---|
| 4386 | 4297 | | 4155 (d) If a request for hearing is made, the division shall follow the procedures and |
|---|
| 4387 | 4298 | | 4156requirements of Title 63G, Chapter 4, Administrative Procedures Act. |
|---|
| 4388 | 4299 | | 4157 (4) (a) After a hearing requested under Subsection (3), if the board and division concur |
|---|
| 4389 | 4300 | | 4158that an act of the person violates this chapter, the board, with the concurrence of the division: |
|---|
| 4392 | 4302 | | 4160 (ii) may impose another disciplinary action under Section 61-2g-502. |
|---|
| 4393 | 4303 | | 4161 (b) The director shall [commence an action] bring an action in a court with jurisdiction |
|---|
| 4394 | 4304 | | 4162under Title 78A, Judiciary and Judicial Administration, in the name of the Department of |
|---|
| 4395 | 4305 | | 4163Commerce and Division of Real Estate[, in the district court in the county in which an act |
|---|
| 4396 | 4306 | | 4164described in Subsection (3) occurs or where the individual resides or carries on business,] to |
|---|
| 4397 | 4307 | | 4165enjoin and restrain the individual from violating this chapter if: |
|---|
| 4398 | 4308 | | 4166 (i) (A) a hearing is not requested under Subsection (3); and |
|---|
| 4399 | 4309 | | 4167 (B) the individual fails to cease the act described in Subsection (3); or |
|---|
| 4400 | 4310 | | 4168 (ii) after discontinuing the act described in Subsection (3), the individual again |
|---|
| 4401 | 4311 | | 4169commences the act. |
|---|
| 4402 | 4312 | | 4170 (5) A remedy or action provided in this section does not limit, interfere with, or prevent |
|---|
| 4403 | 4313 | | 4171the prosecution of another remedy or action, including a criminal proceeding. |
|---|
| 4404 | 4314 | | 4172 (6) (a) Except as provided in Subsection (6)(b), the division shall commence a |
|---|
| 4405 | 4315 | | 4173disciplinary action under this chapter no later than the earlier of the following: |
|---|
| 4406 | 4316 | | 4174 (i) four years after the day on which the violation is reported to the division; or |
|---|
| 4407 | 4317 | | 4175 (ii) 10 years after the day on which the violation occurred. |
|---|
| 4408 | 4318 | | 4176 (b) The division may commence a disciplinary action under this chapter after the time |
|---|
| 4409 | 4319 | | 4177period described in Subsection (6)(a) expires if: |
|---|
| 4410 | 4320 | | 4178 (i) (A) the disciplinary action is in response to a civil or criminal judgment or |
|---|
| 4421 | 4330 | | 4187name, which is a mark for purposes of this section, if, without regard to the goods or services |
|---|
| 4422 | 4331 | | 4188of the person or the mark's owner, the person: |
|---|
| 4423 | 4332 | | 4189 (i) has a bad faith intent to profit from the mark, including a personal name; and |
|---|
| 4424 | 4333 | | 4190 (ii) for any length of time registers, acquires, traffics in, or uses a domain name in, or |
|---|
| 4425 | 4334 | | 4191belonging to any person in, this state that: |
|---|
| 4426 | 4335 | | 4192 (A) in the case of a mark that is distinctive at the time of registration of the domain |
|---|
| 4427 | 4336 | | 4193name, is identical or confusingly similar to the mark; |
|---|
| 4428 | 4337 | | 4194 (B) in the case of a famous mark that is famous at the time of registration of the |
|---|
| 4429 | 4338 | | 4195domain name, is identical or confusingly similar to or dilutive of the mark; or |
|---|
| 4430 | 4339 | | 4196 (C) is a trademark, word, or name protected by reason of 18 U.S.C. Sec. 706 or 36 |
|---|
| 4431 | 4340 | | 4197U.S.C. Sec. 220506. |
|---|
| 4432 | 4341 | | 4198 (b) (i) In determining whether a person has a bad faith intent described in Subsection |
|---|
| 4433 | 4342 | | 4199(1)(a), a court may consider all relevant factors, including: |
|---|
| 4434 | 4343 | | 4200 (A) the trademark or other intellectual property rights of the person, if any, in the |
|---|
| 4435 | 4344 | | 4201domain name; |
|---|
| 4436 | 4345 | | 4202 (B) the extent to which the domain name consists of the legal name of the person or a |
|---|
| 4437 | 4346 | | 4203name that is otherwise commonly used to identify that person; |
|---|
| 4438 | 4347 | | 4204 (C) the person's prior use, if any, of the domain name in connection with the bona fide |
|---|
| 4439 | 4348 | | 4205offering of any goods or services; |
|---|
| 4440 | 4349 | | 4206 (D) the person's bona fide noncommercial or fair use of the mark in a site accessible |
|---|
| 4441 | 4350 | | 4207under the domain name; |
|---|
| 4442 | 4351 | | 4208 (E) the person's intent to divert consumers from the mark owner's online location to a |
|---|
| 4443 | 4352 | | 4209site accessible under the domain name that could harm the goodwill represented by the mark, |
|---|
| 4449 | 4358 | | 4214financial gain without having used, or having an intent to use, the domain name in the bona |
|---|
| 4450 | 4359 | | 4215fide offering of any goods or services, or the person's prior conduct indicating a pattern of such |
|---|
| 4451 | 4360 | | 4216conduct; |
|---|
| 4452 | 4361 | | 4217 (G) the person's provision of material and misleading false contact information when |
|---|
| 4453 | 4362 | | 4218applying for the registration of the domain name, the person's intentional failure to maintain |
|---|
| 4454 | 4363 | | 4219accurate contact information, or the person's prior conduct indicating a pattern of such conduct; |
|---|
| 4455 | 4364 | | 4220 (H) the person's registration or acquisition of multiple domain names that the person |
|---|
| 4456 | 4365 | | 4221knows are identical or confusingly similar to another's mark that is distinctive at the time of |
|---|
| 4457 | 4366 | | 4222registration of the domain names, or is dilutive of another's famous mark that is famous at the |
|---|
| 4458 | 4367 | | 4223time of registration of the domain names, without regard to the goods or services of the person |
|---|
| 4459 | 4368 | | 4224or the mark owner; and |
|---|
| 4460 | 4369 | | 4225 (I) the extent to which the mark incorporated in the person's domain name registration |
|---|
| 4461 | 4370 | | 4226is or is not distinctive and famous. |
|---|
| 4462 | 4371 | | 4227 (ii) Bad faith intent described in Subsection (1)(a) may not be found in any case in |
|---|
| 4463 | 4372 | | 4228which the court determines that the person believed and had reasonable grounds to believe that |
|---|
| 4464 | 4373 | | 4229the use of the domain name was a fair use or otherwise lawful. |
|---|
| 4465 | 4374 | | 4230 (c) In a civil action involving the registration, trafficking, or use of a domain name |
|---|
| 4466 | 4375 | | 4231under this section, a court may order the forfeiture or cancellation of the domain name or the |
|---|
| 4467 | 4376 | | 4232transfer of the domain name to the owner of the mark. |
|---|
| 4468 | 4377 | | 4233 (d) (i) A person is liable for using a domain name under Subsection (1)(a) only if that |
|---|
| 4469 | 4378 | | 4234person is the domain name registrant or that registrant's authorized licensee, affiliate, domain |
|---|
| 4470 | 4379 | | 4235name registrar, domain name registry, or other domain name registration authority that |
|---|
| 4471 | 4380 | | 4236knowingly assists a violation of this chapter by the registrant. |
|---|
| 4472 | 4381 | | 4237 (ii) A person may not be held liable under this section absent a showing of bad faith |
|---|
| 4473 | 4382 | | 4238intent to profit from the registration or maintenance of the domain name. |
|---|
| 4474 | 4383 | | 4239 (iii) For purposes of this section, a "showing of bad faith intent to profit" shall be |
|---|
| 4479 | 4387 | | 4242sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for |
|---|
| 4480 | 4388 | | 4243consideration or receipt in exchange for consideration. |
|---|
| 4481 | 4389 | | 4244 (2) (a) The owner of a mark registered with the U.S. Patent and Trademark Office or |
|---|
| 4482 | 4390 | | 4245under this chapter may [file an in rem civil action] bring an in rem civil action in a court with |
|---|
| 4483 | 4391 | | 4246jurisdiction under Title 78A, Judiciary and Judicial Administration, against a domain name [in |
|---|
| 4484 | 4392 | | 4247the district court] if the owner is located in the state and if: |
|---|
| 4485 | 4393 | | 4248 (i) the domain name violates any right of the owner of a mark registered in the Patent |
|---|
| 4486 | 4394 | | 4249and Trademark Office or registered under this chapter; and |
|---|
| 4487 | 4395 | | 4250 (ii) the court finds that the owner: |
|---|
| 4488 | 4396 | | 4251 (A) is not able to obtain personal jurisdiction over a person who would be a defendant |
|---|
| 4489 | 4397 | | 4252in a civil action under Subsection (1); or |
|---|
| 4490 | 4398 | | 4253 (B) through due diligence was not able to find a person who would be a defendant in a |
|---|
| 4491 | 4399 | | 4254civil action under Subsection (1) by: |
|---|
| 4492 | 4400 | | 4255 (I) sending a notice of the alleged violation and intent to proceed under this Subsection |
|---|
| 4493 | 4401 | | 4256(2)(a) to the registrant of the domain name at the postal and e-mail address provided by the |
|---|
| 4494 | 4402 | | 4257registrant to the registrar; and |
|---|
| 4495 | 4403 | | 4258 (II) publishing notice of the action as the court may direct promptly after filing the |
|---|
| 4496 | 4404 | | 4259action. |
|---|
| 4497 | 4405 | | 4260 (b) Completion of the actions required by Subsection (2)(a)(ii) constitutes service of |
|---|
| 4498 | 4406 | | 4261process. |
|---|
| 4499 | 4407 | | 4262 (c) In an in rem action under this Subsection (2), a domain name is considered to be |
|---|
| 4500 | 4408 | | 4263located in the judicial district in which: |
|---|
| 4501 | 4409 | | 4264 (i) the domain name registrar, registry, or other domain name authority that registered |
|---|
| 4502 | 4410 | | 4265or assigned the domain name is located; or |
|---|
| 4503 | 4411 | | 4266 (ii) documents sufficient to establish control and authority regarding the disposition of |
|---|
| 4511 | 4419 | | 4273domain name registry, or other domain name authority shall: |
|---|
| 4512 | 4420 | | 4274 (A) expeditiously deposit with the court documents sufficient to establish the court's |
|---|
| 4513 | 4421 | | 4275control and authority regarding the disposition of the registration and use of the domain name |
|---|
| 4514 | 4422 | | 4276to the court; and |
|---|
| 4515 | 4423 | | 4277 (B) not transfer, suspend, or otherwise modify the domain name during the pendency |
|---|
| 4516 | 4424 | | 4278of the action, except upon order of the court. |
|---|
| 4517 | 4425 | | 4279 (iii) The domain name registrar or registry or other domain name authority is not liable |
|---|
| 4518 | 4426 | | 4280for injunctive or monetary relief under this section, except in the case of bad faith or reckless |
|---|
| 4519 | 4427 | | 4281disregard, which includes a willful failure to comply with a court order. |
|---|
| 4520 | 4428 | | 4282 (3) The civil actions and remedies established by Subsection (1) and the in rem action |
|---|
| 4521 | 4429 | | 4283established in Subsection (2) do not preclude any other applicable civil action or remedy. |
|---|
| 4522 | 4430 | | 4284 (4) The in rem jurisdiction established under Subsection (2) does not preclude any |
|---|
| 4523 | 4431 | | 4285other jurisdiction, whether in rem or personal. |
|---|
| 4524 | 4432 | | 4286 Section 98. Section 70-3a-402 is amended to read: |
|---|
| 4525 | 4433 | | 4287 70-3a-402. Infringement. |
|---|
| 4526 | 4434 | | 4288 (1) Subject to Section 70-3a-104 and Subsection (2), any person is liable in a civil |
|---|
| 4527 | 4435 | | 4289action brought by the registrant for any and all of the remedies provided in Section 70-3a-404, |
|---|
| 4528 | 4436 | | 4290if that person: |
|---|
| 4529 | 4437 | | 4291 (a) uses a reproduction, counterfeit, copy, or colorable imitation of a mark registered |
|---|
| 4530 | 4438 | | 4292under this chapter: |
|---|
| 4531 | 4439 | | 4293 (i) without the consent of the registrant; and |
|---|
| 4535 | 4441 | | 4295goods or services on or in connection with which that use is likely to cause confusion, mistake, |
|---|
| 4536 | 4442 | | 4296or to deceive as to the source of origin, nature, or quality of those goods or services; or |
|---|
| 4537 | 4443 | | 4297 (b) reproduces, counterfeits, copies, or colorably imitates any mark and applies the |
|---|
| 4538 | 4444 | | 4298reproduction, counterfeit, copy, or colorable imitation to labels, signs, prints, packages, |
|---|
| 4539 | 4445 | | 4299wrappers, receptacles, or advertisements intended to be used upon or in connection with the |
|---|
| 4540 | 4446 | | 4300sale or other distribution in this state of goods or services. |
|---|
| 4541 | 4447 | | 4301 (2) Under Subsection (1)(b), the registrant is not entitled to recover profits or damages |
|---|
| 4542 | 4448 | | 4302unless the act described in Subsection (1)(b) has been committed with the intent: |
|---|
| 4544 | 4451 | | 4304 (b) to deceive. |
|---|
| 4545 | 4452 | | 4305 (3) In a civil action for a violation of Section 70-3a-309: |
|---|
| 4546 | 4453 | | 4306 (a) the plaintiff may recover court costs and reasonable attorney fees; and |
|---|
| 4547 | 4454 | | 4307 (b) the plaintiff may elect, at any time before final judgment is entered by the [district] |
|---|
| 4548 | 4455 | | 4308court, to recover, instead of actual damages and profits, an award of statutory damages in the |
|---|
| 4549 | 4456 | | 4309amount of not less than $1,000 and not more than $100,000 per domain name, as the court |
|---|
| 4550 | 4457 | | 4310considers just. |
|---|
| 4551 | 4458 | | 4311 (4) Statutory damages awarded under Subsection (3)(b) are presumed to be $100,000 |
|---|
| 4552 | 4459 | | 4312per domain name if there is a pattern and practice of infringements committed willfully for |
|---|
| 4553 | 4460 | | 4313commercial gain. |
|---|
| 4554 | 4461 | | 4314 Section 99. Section 70-3a-405 is amended to read: |
|---|
| 4555 | 4462 | | 4315 70-3a-405. Forum for actions regarding registration -- Service on out-of-state |
|---|
| 4556 | 4463 | | 4316registrants. |
|---|
| 4557 | 4464 | | 4317 (1) (a) [An action to require the cancellation of a mark registered under this chapter |
|---|
| 4558 | 4465 | | 4318shall be brought in a district court of this state.] A person may bring an action in a court with |
|---|
| 4559 | 4466 | | 4319jurisdiction under Title 78A, Judiciary and Judicial Administration, to require the cancellation |
|---|
| 4560 | 4467 | | 4320of a mark registered under this chapter. |
|---|
| 4563 | 4469 | | 4322except that the division may intervene in an action filed under Subsection (1)(a). |
|---|
| 4564 | 4470 | | 4323 (2) In any action brought against a nonresident registrant, service may be effected upon |
|---|
| 4565 | 4471 | | 4324the nonresident registrant in accordance with the procedures established for service upon |
|---|
| 4566 | 4472 | | 4325nonresident corporations and business entities under Section 16-10a-1511. |
|---|
| 4567 | 4473 | | 4326 Section 100. Section 70A-8-409.1 is amended to read: |
|---|
| 4568 | 4474 | | 4327 70A-8-409.1. Replacement of lost, destroyed, or wrongfully taken share |
|---|
| 4569 | 4475 | | 4328certificate of a land company or a water company. |
|---|
| 4570 | 4476 | | 4329 (1) [For purposes of] As used in this section: |
|---|
| 4571 | 4477 | | 4330 (a) "Affected share" means the share represented by a share certificate that is lost, |
|---|
| 4572 | 4478 | | 4331destroyed, or wrongfully taken. |
|---|
| 4573 | 4479 | | 4332 (b) "Company" means a land company or a water company. |
|---|
| 4574 | 4480 | | 4333 (c) "Distribution area" means: |
|---|
| 4576 | 4483 | | 4335water; or |
|---|
| 4577 | 4484 | | 4336 (ii) for a land company, the geographic area owned by the land company. |
|---|
| 4578 | 4485 | | 4337 (d) "Original share certificate" means a share certificate that is alleged to be lost, |
|---|
| 4579 | 4486 | | 4338destroyed, or wrongfully taken. |
|---|
| 4580 | 4487 | | 4339 (e) "Person" means: |
|---|
| 4581 | 4488 | | 4340 (i) an individual; |
|---|
| 4582 | 4489 | | 4341 (ii) a corporation; |
|---|
| 4583 | 4490 | | 4342 (iii) a business entity; |
|---|
| 4584 | 4491 | | 4343 (iv) a political subdivision of the state, including a municipality; |
|---|
| 4585 | 4492 | | 4344 (v) an agency of the state; or |
|---|
| 4586 | 4493 | | 4345 (vi) an agency of the federal government. |
|---|
| 4587 | 4494 | | 4346 (f) "Replacement share certificate" means a share certificate issued to replace a share |
|---|
| 4588 | 4495 | | 4347certificate that is lost, destroyed, or wrongfully taken. |
|---|
| 4592 | 4497 | | 4349 (2) (a) This section applies to the replacement of a lost, destroyed, or wrongfully taken |
|---|
| 4593 | 4498 | | 4350share certificate. |
|---|
| 4594 | 4499 | | 4351 (b) Unless the articles of incorporation or bylaws of a company address the |
|---|
| 4595 | 4500 | | 4352replacement of a lost, destroyed, or wrongfully taken share certificate, this section governs the |
|---|
| 4596 | 4501 | | 4353replacement of a lost, destroyed, or wrongfully taken share certificate. |
|---|
| 4597 | 4502 | | 4354 (3) A company shall issue a replacement share certificate to a person claiming to be the |
|---|
| 4598 | 4503 | | 4355owner of a share certificate that is lost, destroyed, or wrongfully taken, and cancel the original |
|---|
| 4599 | 4504 | | 4356share certificate on the records of the company, if: |
|---|
| 4600 | 4505 | | 4357 (a) the person represents to the company that the original share certificate is lost, |
|---|
| 4601 | 4506 | | 4358destroyed, or wrongfully taken; |
|---|
| 4602 | 4507 | | 4359 (b) (i) (A) the person is the registered owner of the affected share; and |
|---|
| 4603 | 4508 | | 4360 (B) before the company receives notice that the share certificate has been acquired by a |
|---|
| 4604 | 4509 | | 4361protected purchaser, the person requests that a replacement share certificate be issued; or |
|---|
| 4605 | 4510 | | 4362 (ii) (A) the person is not the registered owner of the affected share; and |
|---|
| 4606 | 4511 | | 4363 (B) the person establishes ownership of the affected share, including by presenting to |
|---|
| 4607 | 4512 | | 4364the company written documentation that demonstrates to the reasonable satisfaction of the |
|---|
| 4609 | 4515 | | 4366inheritance, foreclosure, bankruptcy, or reorganization; |
|---|
| 4610 | 4516 | | 4367 (c) the assessments to which the affected share is subject are paid current; |
|---|
| 4611 | 4517 | | 4368 (d) except as provided in Subsection (5), the person files with the company a sufficient |
|---|
| 4612 | 4518 | | 4369indemnity bond or other security acceptable to the company; and |
|---|
| 4613 | 4519 | | 4370 (e) the person satisfies any other reasonable requirement imposed by the company, |
|---|
| 4614 | 4520 | | 4371including the payment of a reasonable transfer fee. |
|---|
| 4615 | 4521 | | 4372 (4) (a) If after a replacement share certificate is issued a protected purchaser of the |
|---|
| 4616 | 4522 | | 4373original share certificate presents the original share certificate for registration of transfer, the |
|---|
| 4617 | 4523 | | 4374company shall register the transfer unless an overissue would result. |
|---|
| 4620 | 4525 | | 4376share certificate, a company may recover the replacement share certificate from the person to |
|---|
| 4621 | 4526 | | 4377whom it is issued, or any person taking under that person, except a protected purchaser. |
|---|
| 4622 | 4527 | | 4378 (c) If a company elects to follow the procedures of Subsection (5), to assert an |
|---|
| 4623 | 4528 | | 4379ownership interest in the affected share, a protected purchaser shall file a written notice of |
|---|
| 4624 | 4529 | | 4380objection within the 60-day period described in Subsection (5)(d). A protected purchaser's |
|---|
| 4625 | 4530 | | 4381failure to file a written notice of objection within the 60-day period eliminates any claim of the |
|---|
| 4626 | 4531 | | 4382protected purchaser. |
|---|
| 4627 | 4532 | | 4383 (5) As an alternative to requiring an indemnity bond or other acceptable security under |
|---|
| 4628 | 4533 | | 4384Subsection (3)(d), a company is considered to have followed a fair and reasonable procedure |
|---|
| 4629 | 4534 | | 4385without the necessity of a written policy or bylaw otherwise required by Section 16-6a-609, if |
|---|
| 4630 | 4535 | | 4386the company follows the following procedure: |
|---|
| 4631 | 4536 | | 4387 (a) The company shall publish written notice at least once a week for three consecutive |
|---|
| 4632 | 4537 | | 4388weeks: |
|---|
| 4633 | 4538 | | 4389 (i) (A) in a newspaper of general circulation in the area that reasonably includes the |
|---|
| 4634 | 4539 | | 4390distribution area of the company; and |
|---|
| 4635 | 4540 | | 4391 (B) as required in Section 45-1-101; |
|---|
| 4636 | 4541 | | 4392 (ii) with at least seven days between each publication date under Subsection |
|---|
| 4637 | 4542 | | 4393(5)(a)(i)(A); and |
|---|
| 4638 | 4543 | | 4394 (iii) beginning no later than 20 days after submission of the request to issue the |
|---|
| 4639 | 4544 | | 4395replacement share certificate. |
|---|
| 4649 | 4553 | | 4403who, within the five-year period immediately preceding the day the written notice is mailed, |
|---|
| 4650 | 4554 | | 4404pays an assessment levied against the affected share; and |
|---|
| 4651 | 4555 | | 4405 (iii) to any person that has notified the company in writing of an interest in the affected |
|---|
| 4652 | 4556 | | 4406share, including a financial institution. |
|---|
| 4653 | 4557 | | 4407 (d) A notice required under Subsections (5)(a) through (c) shall: |
|---|
| 4654 | 4558 | | 4408 (i) identify the person who is requesting that a replacement share certificate be issued; |
|---|
| 4655 | 4559 | | 4409 (ii) state that an interested person may file a written notice of objection with the |
|---|
| 4656 | 4560 | | 4410company; and |
|---|
| 4657 | 4561 | | 4411 (iii) state that unless a written notice of objection to the issuance of a replacement share |
|---|
| 4658 | 4562 | | 4412certificate is filed within 60 days after the last day of publication under Subsection (5)(a)(i)(A), |
|---|
| 4659 | 4563 | | 4413including a written notice of objection from a protected purchaser: |
|---|
| 4660 | 4564 | | 4414 (A) a replacement share certificate will be issued to the person requesting that the |
|---|
| 4661 | 4565 | | 4415replacement share certificate be issued; and |
|---|
| 4662 | 4566 | | 4416 (B) the original share certificate will be permanently canceled on the records of the |
|---|
| 4663 | 4567 | | 4417company. |
|---|
| 4664 | 4568 | | 4418 (e) A notice of objection under Subsection (5)(d) shall: |
|---|
| 4665 | 4569 | | 4419 (i) state the basis for objecting to the claim of ownership of the affected share; |
|---|
| 4666 | 4570 | | 4420 (ii) identify a person that the objecting person believes has a stronger claim of |
|---|
| 4667 | 4571 | | 4421ownership to the affected share; and |
|---|
| 4668 | 4572 | | 4422 (iii) be accompanied by written evidence that reasonably documents the basis of the |
|---|
| 4669 | 4573 | | 4423objection to the claim of ownership. |
|---|
| 4670 | 4574 | | 4424 (f) If the company receives a notice of objection within the 60-day period described in |
|---|
| 4671 | 4575 | | 4425Subsection (5)(d), the company may review the disputed claim and: |
|---|
| 4672 | 4576 | | 4426 (i) deny in writing the objection to the claim of ownership and issue a replacement |
|---|
| 4677 | 4581 | | 4430 (iii) file an interpleader action in accordance with Utah Rules of Civil Procedure, Rule |
|---|
| 4678 | 4582 | | 443122, joining the persons claiming an interest in the affected share and depositing a replacement |
|---|
| 4679 | 4583 | | 4432share certificate with the court; or |
|---|
| 4680 | 4584 | | 4433 (iv) require the persons claiming an interest in the affected share to resolve the |
|---|
| 4681 | 4585 | | 4434ownership dispute. |
|---|
| 4682 | 4586 | | 4435 (g) Upon receipt, the company shall act in accordance with: |
|---|
| 4683 | 4587 | | 4436 (i) a written agreement acceptable to the company among the persons who claim |
|---|
| 4684 | 4588 | | 4437interest in the affected share; or |
|---|
| 4685 | 4589 | | 4438 (ii) a court order declaring ownership in the affected share. |
|---|
| 4686 | 4590 | | 4439 (h) The following are entitled to receive from a nonprevailing person the costs for |
|---|
| 4687 | 4591 | | 4440resolution of a dispute under this Subsection (5), including reasonable attorney fees when |
|---|
| 4688 | 4592 | | 4441attorney fees are necessary: |
|---|
| 4689 | 4593 | | 4442 (i) a prevailing person; and |
|---|
| 4690 | 4594 | | 4443 (ii) the company, if the company acts in good faith. |
|---|
| 4691 | 4595 | | 4444 (i) The person requesting that a replacement share certificate be issued shall reimburse |
|---|
| 4692 | 4596 | | 4445the company for the costs reasonably incurred by the company under this Subsection (5) that |
|---|
| 4693 | 4597 | | 4446are not paid under this Subsection (5)(i) including: |
|---|
| 4694 | 4598 | | 4447 (i) legal and other professional fees; and |
|---|
| 4695 | 4599 | | 4448 (ii) costs incurred by the company in response to a notice of objection. |
|---|
| 4696 | 4600 | | 4449 (j) A company shall comply with this Subsection (5) before issuance of a replacement |
|---|
| 4697 | 4601 | | 4450share certificate: |
|---|
| 4698 | 4602 | | 4451 (i) upon request from the person requesting a replacement share certificate be issued; |
|---|
| 4699 | 4603 | | 4452and |
|---|
| 4700 | 4604 | | 4453 (ii) if the person requesting the replacement share certificate provides indemnification |
|---|
| 4701 | 4605 | | 4454satisfactory to the company against liability and costs of proceeding under this Subsection (5). |
|---|
| 4702 | 4606 | | 4455 (k) A determination made under this Subsection (5) is considered to be a final and |
|---|
| 4708 | 4611 | | 4459writing; and |
|---|
| 4709 | 4612 | | 4460 (ii) deliver the written decision to: |
|---|
| 4710 | 4613 | | 4461 (A) the person requesting a replacement share certificate be issued; |
|---|
| 4711 | 4614 | | 4462 (B) a person who files a notice of objection under Subsection (5); and |
|---|
| 4712 | 4615 | | 4463 (C) any other person the company determines is involved in the request for a |
|---|
| 4713 | 4616 | | 4464replacement share certificate. |
|---|
| 4714 | 4617 | | 4465 (b) A person may bring an action in a court with jurisdiction under Title 78A, Judiciary |
|---|
| 4715 | 4618 | | 4466and Judicial Administration, against a company for judicial review of a decision by the |
|---|
| 4716 | 4619 | | 4467company under Subsection (6)(a). |
|---|
| 4717 | 4620 | | 4468 [(b) A decision of a company described in Subsection (6)(a) is subject to de novo |
|---|
| 4718 | 4621 | | 4469judicial review in the district court in which the company has its principal place of business.] |
|---|
| 4719 | 4622 | | 4470 (c) (i) A person may not seek judicial review under Subsection (6)(b) more than 30 |
|---|
| 4720 | 4623 | | 4471days after the day on which the written decision is delivered under Subsection (6)(a). |
|---|
| 4721 | 4624 | | 4472 (ii) If no action for judicial review is filed within the 30-day period, absent fraud, the |
|---|
| 4722 | 4625 | | 4473issuance of a replacement share certificate or the decision to not issue a replacement share |
|---|
| 4723 | 4626 | | 4474certificate is final and conclusive evidence of ownership of the affected share. |
|---|
| 4724 | 4627 | | 4475 (d) (i) In a judicial action brought under this Subsection (6), the prevailing person as |
|---|
| 4725 | 4628 | | 4476determined by court order, is entitled to payment by a nonprevailing person of: |
|---|
| 4726 | 4629 | | 4477 (A) the costs of successfully defending its ownership claim; and |
|---|
| 4727 | 4630 | | 4478 (B) reasonable attorney fees. |
|---|
| 4728 | 4631 | | 4479 (ii) Notwithstanding Subsection (6)(d)(i), an award of costs or attorney fees may not be |
|---|
| 4729 | 4632 | | 4480granted against a company if the company acts in good faith. |
|---|
| 4730 | 4633 | | 4481 Section 101. Section 70A-9a-513.5 is amended to read: |
|---|
| 4731 | 4634 | | 4482 70A-9a-513.5. Termination of wrongfully filed financing statement -- |
|---|
| 4740 | 4643 | | 4490 (A) the filing office has issued the person credentials for access to online filing |
|---|
| 4741 | 4644 | | 4491services; or |
|---|
| 4742 | 4645 | | 4492 (B) the person has established an account for payment of filing fees, regardless of |
|---|
| 4743 | 4646 | | 4493whether the account is used in a particular transaction. |
|---|
| 4744 | 4647 | | 4494 (b) "Filing office" means the same as that term is defined in Section 70A-9a-102, |
|---|
| 4745 | 4648 | | 4495except that it does not include a county recorder office. |
|---|
| 4746 | 4649 | | 4496 (2) A person identified as debtor in a filed financing statement may deliver to the filing |
|---|
| 4747 | 4650 | | 4497office the debtor's notarized affidavit, signed under penalty of perjury, that identifies the |
|---|
| 4748 | 4651 | | 4498financing statement by file number, indicates the affiant's mailing address, and states that the |
|---|
| 4749 | 4652 | | 4499affiant believes that the filed record identifying the affiant as debtor was not authorized and |
|---|
| 4750 | 4653 | | 4500was caused to be communicated to the filing office with the intent to harass or defraud the |
|---|
| 4751 | 4654 | | 4501affiant. The filing office shall adopt a form of affidavit for use under this section. The filing |
|---|
| 4752 | 4655 | | 4502office may reject an affidavit described in this Subsection (2) if: |
|---|
| 4753 | 4656 | | 4503 (a) the affidavit is incomplete; or |
|---|
| 4754 | 4657 | | 4504 (b) the filing office reasonably believes that the affidavit was communicated to the |
|---|
| 4755 | 4658 | | 4505filing office with the intent to harass or defraud, or for any other unlawful purpose. |
|---|
| 4756 | 4659 | | 4506 (3) Subject to Subsection (10), if an affidavit is delivered to the filing office under |
|---|
| 4757 | 4660 | | 4507Subsection (2), the filing office shall promptly file a termination statement with respect to the |
|---|
| 4758 | 4661 | | 4508financing statement identified in the affidavit. The termination statement must identify by its |
|---|
| 4759 | 4662 | | 4509file number the initial financing statement to which it relates and must indicate that it was filed |
|---|
| 4763 | 4664 | | 4511until 14 days after it is filed. |
|---|
| 4764 | 4665 | | 4512 (4) The filing office may not charge a fee for the filing of an affidavit under Subsection |
|---|
| 4765 | 4666 | | 4513(2) or a termination statement under Subsection (3). The filing office may not return any fee |
|---|
| 4766 | 4667 | | 4514paid for filing the financing statement identified in the affidavit, whether or not the financing |
|---|
| 4767 | 4668 | | 4515statement is reinstated under Subsection (7). |
|---|
| 4768 | 4669 | | 4516 (5) On the same day that a filing office files a termination statement under Subsection |
|---|
| 4769 | 4670 | | 4517(3), it shall send to the secured party of record for the financing statement to which the |
|---|
| 4770 | 4671 | | 4518termination statement relates a notice stating that the termination statement has been filed and |
|---|
| 4771 | 4672 | | 4519will become effective 14 days after filing. The notice shall be sent by mail to the address |
|---|
| 4773 | 4675 | | 4521electronic mail address provided by the secured party of record, if any. |
|---|
| 4774 | 4676 | | 4522 (6) (a) A secured party that believes in good faith that the filed record identified in an |
|---|
| 4775 | 4677 | | 4523affidavit delivered to the filing office under Subsection (2) was authorized and was not caused |
|---|
| 4776 | 4678 | | 4524to be communicated to the filing office with the intent to harass or defraud the affiant may: |
|---|
| 4777 | 4679 | | 4525 (i) before the termination statement takes effect under Subsection (3), request the filing |
|---|
| 4778 | 4680 | | 4526office to review the filed record concerning whether the filed record was filed with the intent to |
|---|
| 4779 | 4681 | | 4527harass or defraud; or |
|---|
| 4780 | 4682 | | 4528 (ii) regardless of whether the affiant seeks a review under Subsection (6)(a)(i), file an |
|---|
| 4781 | 4683 | | 4529action against the filing office seeking reinstatement of the financing statement to which the |
|---|
| 4782 | 4684 | | 4530filed record relates. |
|---|
| 4783 | 4685 | | 4531 (b) Within 10 days after being served with process in an action under this Subsection |
|---|
| 4784 | 4686 | | 4532(6), the filing office shall file a notice indicating that the action has been commenced. The |
|---|
| 4785 | 4687 | | 4533notice shall indicate the file number of the initial financing statement to which it relates. |
|---|
| 4786 | 4688 | | 4534 (c) If the affiant is not named as a defendant in the action described in Subsection |
|---|
| 4787 | 4689 | | 4535(6)(a)(ii), the secured party shall send a copy of the complaint to the affiant at the address |
|---|
| 4788 | 4690 | | 4536indicated in the affidavit. [The exclusive venue for the action shall be in the Third District |
|---|
| 4791 | 4692 | | 4538 (d) An action under this Subsection (6) must be filed before the expiration of six |
|---|
| 4792 | 4693 | | 4539months after the date on which the termination statement filed under Subsection (3) becomes |
|---|
| 4793 | 4694 | | 4540effective. |
|---|
| 4794 | 4695 | | 4541 (7) If, in an action under Subsection (6), the court determines that the financing |
|---|
| 4795 | 4696 | | 4542statement should be reinstated, the filing office shall promptly file a record that identifies by its |
|---|
| 4796 | 4697 | | 4543file number the initial financing statement to which the record relates and indicates that the |
|---|
| 4797 | 4698 | | 4544financing statement has been reinstated. |
|---|
| 4798 | 4699 | | 4545 (8) Upon the filing of a record reinstating a financing statement under Subsection (7), |
|---|
| 4799 | 4700 | | 4546the effectiveness of the financing statement is reinstated and the financing statement shall be |
|---|
| 4800 | 4701 | | 4547considered never to have been terminated under this section. A continuation statement filed as |
|---|
| 4801 | 4702 | | 4548provided in Subsection 70A-9a-515(4) after the effective date of a termination statement filed |
|---|
| 4802 | 4703 | | 4549under Subsection (3) or (10) becomes effective if the financing statement is reinstated. |
|---|
| 4803 | 4704 | | 4550 (9) If, in an action under Subsection (6), the court determines that the filed record |
|---|
| 4805 | 4707 | | 4552and was caused to be communicated to the filing office with the intent to harass or defraud the |
|---|
| 4806 | 4708 | | 4553affiant, the filing office and the affiant may recover from the secured party that filed the action |
|---|
| 4807 | 4709 | | 4554the costs and expenses, including reasonable attorney fees, that the filing office and the affiant |
|---|
| 4808 | 4710 | | 4555incurred in the action. This recovery is in addition to any recovery to which the affiant is |
|---|
| 4809 | 4711 | | 4556entitled under Section 70A-9a-625. |
|---|
| 4810 | 4712 | | 4557 (10) If an affidavit delivered to a filing office under Subsection (2) relates to a filed |
|---|
| 4811 | 4713 | | 4558record communicated to the filing office by an established filer, the filing office shall promptly |
|---|
| 4812 | 4714 | | 4559send to the secured party of record a notice stating that the affidavit has been delivered to the |
|---|
| 4813 | 4715 | | 4560filing office and that the filing office is conducting an administrative review to determine |
|---|
| 4814 | 4716 | | 4561whether the record was unauthorized and was caused to be communicated with the intent to |
|---|
| 4815 | 4717 | | 4562harass or defraud the affiant. The notice shall be sent by mail to the address provided for the |
|---|
| 4816 | 4718 | | 4563secured party in the financing statement or sent by electronic mail to the electronic mail address |
|---|
| 4820 | 4720 | | 4565the affiant. The administrative review shall be conducted on an expedited basis and the filing |
|---|
| 4821 | 4721 | | 4566office may require the affiant and the secured party of record to provide any additional |
|---|
| 4822 | 4722 | | 4567information that the filing office considers appropriate. If the filing office concludes that the |
|---|
| 4823 | 4723 | | 4568record was not authorized and was caused to be communicated with the intent to harass or |
|---|
| 4824 | 4724 | | 4569defraud the affiant, the filing office shall promptly file a termination statement under |
|---|
| 4825 | 4725 | | 4570Subsection (3) that will be effective immediately and send to the secured party of record the |
|---|
| 4826 | 4726 | | 4571notice required by Subsection (5). The secured party may thereafter file an action for |
|---|
| 4827 | 4727 | | 4572reinstatement under Subsection (6), and Subsections (7) through (9) are applicable. |
|---|
| 4828 | 4728 | | 4573 Section 102. Section 78A-6-350 is amended to read: |
|---|
| 4829 | 4729 | | 4574 78A-6-350. Venue -- Dismissal without adjudication on merits. |
|---|
| 4830 | 4730 | | 4575 (1) Notwithstanding [Title 78B, Chapter 3, Part 3, Place of Trial -- Venue] Title 78B, |
|---|
| 4831 | 4731 | | 4576Chapter 3a, Venue for Civil Actions, a proceeding for a minor's case in the juvenile court shall |
|---|
| 4832 | 4732 | | 4577be commenced in the court of the district in which: |
|---|
| 4833 | 4733 | | 4578 (a) for a proceeding under Title 80, Chapter 6, Juvenile Justice: |
|---|
| 4834 | 4734 | | 4579 (i) the minor is living or found; or |
|---|
| 4835 | 4735 | | 4580 (ii) the alleged offense occurred; or |
|---|
| 4836 | 4736 | | 4581 (b) for all other proceedings, the minor is living or found. |
|---|
| 4848 | 4748 | | 4592coerce the employee regarding employment because the employee attends a deposition or |
|---|
| 4849 | 4749 | | 4593hearing in response to a subpoena. |
|---|
| 4850 | 4750 | | 4594 (2) Any employer who violates this section is guilty of criminal contempt and upon |
|---|
| 4851 | 4751 | | 4595conviction may be fined not more than $500 or imprisoned not more than six months or both. |
|---|
| 4852 | 4752 | | 4596 (3) (a) If an employer violates this section, in addition to any other remedy, the |
|---|
| 4853 | 4753 | | 4597employee may bring [a civil action in district court] an action in a court with jurisdiction under |
|---|
| 4854 | 4754 | | 4598Title 78A, Judiciary and Judicial Administration, for recovery of wages lost as a result of the |
|---|
| 4855 | 4755 | | 4599violation and for an order requiring the reinstatement of the employee. |
|---|
| 4856 | 4756 | | 4600 (b) Damages recoverable may not exceed lost wages for six weeks. |
|---|
| 4857 | 4757 | | 4601 (c) If the employee prevails, the employee shall be allowed reasonable attorney fees. |
|---|
| 4858 | 4758 | | 4602 Section 104. Section 78B-3a-101 is enacted to read: |
|---|
| 4859 | 4759 | | 4603 CHAPTER 3a. VENUE FOR CIVIL ACTIONS |
|---|
| 4860 | 4760 | | 4604 Part 1. General Provisions |
|---|
| 4861 | 4761 | | 4605 78B-3a-101. Definitions. |
|---|
| 4862 | 4762 | | 4606 As used in this chapter: |
|---|
| 4863 | 4763 | | 4607 (1) (a) "Action" means a lawsuit or case that is commenced in a court. |
|---|
| 4864 | 4764 | | 4608 (b) "Action" does not include a criminal action as defined in Section 77-1-3. |
|---|
| 4865 | 4765 | | 4609 (2) "Business organization" means: |
|---|
| 4866 | 4766 | | 4610 (a) an association; |
|---|
| 4867 | 4767 | | 4611 (b) a corporation; |
|---|
| 4868 | 4768 | | 4612 (c) an institution, as that term is defined in Section 7-1-103; |
|---|
| 4877 | 4776 | | 4619 (3) "Cause of action" means the act or omission giving rise to the action. |
|---|
| 4878 | 4777 | | 4620 (4) "Principal place of business" means the place where the business organization's |
|---|
| 4879 | 4778 | | 4621officers direct, control, and coordinate the business organization's activities regardless of |
|---|
| 4880 | 4779 | | 4622whether the place is located in this state. |
|---|
| 4881 | 4780 | | 4623 (5) "Registered office" means the place within this state that the business organization |
|---|
| 4882 | 4781 | | 4624designated as the business organization's registered office in the most recent document on file |
|---|
| 4883 | 4782 | | 4625with the Division of Corporations and Commercial Code. |
|---|
| 4884 | 4783 | | 4626 Section 105. Section 78B-3a-102 is enacted to read: |
|---|
| 4885 | 4784 | | 4627 78B-3a-102. Applicability of this chapter -- Venue for the Business and Chancery |
|---|
| 4886 | 4785 | | 4628Court. |
|---|
| 4887 | 4786 | | 4629 (1) Except as otherwise provided by another provision of the Utah Code, a plaintiff |
|---|
| 4888 | 4787 | | 4630shall bring an action in accordance with the requirements of this chapter. |
|---|
| 4889 | 4788 | | 4631 (2) The requirements of this chapter do not apply to an action brought in the Business |
|---|
| 4890 | 4789 | | 4632and Chancery Court. |
|---|
| 4891 | 4790 | | 4633 Section 106. Section 78B-3a-103 is enacted to read: |
|---|
| 4892 | 4791 | | 4634 78B-3a-103. Transfer of venue. |
|---|
| 4893 | 4792 | | 4635 (1) A court may transfer venue in accordance with Rule 42 of the Utah Rules of Civil |
|---|
| 4894 | 4793 | | 4636Procedure. |
|---|
| 4895 | 4794 | | 4637 (2) A court to which an action is transferred has the same jurisdiction as if the action |
|---|
| 4896 | 4795 | | 4638had been originally brought in that court. |
|---|
| 4897 | 4796 | | 4639 Section 107. Section 78B-3a-104 is enacted to read: |
|---|
| 4898 | 4797 | | 4640 78B-3a-104. Residence of a business organization. |
|---|
| 4899 | 4798 | | 4641 For purposes of this chapter, the residence of a business organization is: |
|---|
| 4900 | 4799 | | 4642 (1) the county where the business organization's principal place of business is located; |
|---|
| 4901 | 4800 | | 4643 (2) the county where the business organization's registered office is located if the |
|---|
| 4905 | 4804 | | 4646business or a registered office in the state. |
|---|
| 4906 | 4805 | | 4647 Section 108. Section 78B-3a-201, which is renumbered from Section 78B-3-307 is |
|---|
| 4907 | 4806 | | 4648renumbered and amended to read: |
|---|
| 4908 | 4807 | | 4649 Part 2. Venue Requirements |
|---|
| 4909 | 4808 | | 4650 [78B-3-307]. 78B-3a-201. All actions -- Exceptions. |
|---|
| 4910 | 4809 | | 4651 (1) [In all other cases an action shall be tried] Except as otherwise provided by this |
|---|
| 4911 | 4810 | | 4652chapter or another provision of the Utah Code, a plaintiff shall bring an action in the county in |
|---|
| 4912 | 4811 | | 4653which: |
|---|
| 4913 | 4812 | | 4654 (a) the cause of action arises; or |
|---|
| 4914 | 4813 | | 4655 (b) any defendant resides at the commencement of the action. |
|---|
| 4915 | 4814 | | 4656 [(2) If the defendant is a corporation, any county in which the corporation has its |
|---|
| 4916 | 4815 | | 4657principal office or a place of business shall be considered the county in which the corporation |
|---|
| 4917 | 4816 | | 4658resides.] |
|---|
| 4918 | 4817 | | 4659 [(3)] (2) If none of the defendants [resides] reside in this state, [the action may be |
|---|
| 4919 | 4818 | | 4660commenced and tried] the plaintiff may bring the action in any county designated by the |
|---|
| 4920 | 4819 | | 4661plaintiff in the complaint. |
|---|
| 4921 | 4820 | | 4662 [(4)] (3) If the defendant is about to depart from the state, [the action may be tried] the |
|---|
| 4922 | 4821 | | 4663plaintiff may bring the action in any county where any of the parties resides or service is had. |
|---|
| 4923 | 4822 | | 4664 Section 109. Section 78B-3a-202, which is renumbered from Section 78B-3-301 is |
|---|
| 4924 | 4823 | | 4665renumbered and amended to read: |
|---|
| 4925 | 4824 | | 4666 [78B-3-301]. 78B-3a-202. Actions involving real property. |
|---|
| 4926 | 4825 | | 4667 (1) [Actions for the following causes involving real property shall be tried in the |
|---|
| 4927 | 4826 | | 4668county in which the subject of the action, or some part,] A plaintiff shall bring the following |
|---|
| 4928 | 4827 | | 4669actions involving real property in the county in which the real property, or some part of the real |
|---|
| 4929 | 4828 | | 4670property, is situated: |
|---|
| 4930 | 4829 | | 4671 (a) for the recovery of real property[,] or of an estate or interest in the property; |
|---|
| 4937 | 4835 | | 4676 (2) If the real property is situated [partly in one county and partly in another, the |
|---|
| 4938 | 4836 | | 4677plaintiff may select either of the counties, and the county selected is the proper county for the |
|---|
| 4939 | 4837 | | 4678trial of the action] in more than one county, the plaintiff may bring the action in any county in |
|---|
| 4940 | 4838 | | 4679which the real property is situated. |
|---|
| 4941 | 4839 | | 4680 Section 110. Section 78B-3a-203, which is renumbered from Section 78B-3-302 is |
|---|
| 4942 | 4840 | | 4681renumbered and amended to read: |
|---|
| 4943 | 4841 | | 4682 [78B-3-302]. 78B-3a-203. Actions to recover fines or penalties -- Actions |
|---|
| 4944 | 4842 | | 4683against public officers. |
|---|
| 4945 | 4843 | | 4684 (1) [Actions to recover fines or penalties shall be tried] A plaintiff shall bring an action |
|---|
| 4946 | 4844 | | 4685to recover a fine or penalty in the county where [the cause, or some part of the cause, arose.]: |
|---|
| 4947 | 4845 | | 4686 (a) the cause of action arises; or |
|---|
| 4948 | 4846 | | 4687 (b) some part of the cause of action arises. |
|---|
| 4949 | 4847 | | 4688 (2) If a fine, penalty, or forfeiture imposed by statute is imposed for an offense |
|---|
| 4950 | 4848 | | 4689committed on a lake, river, or other stream of water situated in two or more counties, [the |
|---|
| 4951 | 4849 | | 4690action may be brought] the plaintiff may bring the action in any county bordering on the lake, |
|---|
| 4952 | 4850 | | 4691river, or stream opposite to the place where the offense was committed. |
|---|
| 4953 | 4851 | | 4692 (3) Except as otherwise provided by law, a plaintiff shall bring an action against a |
|---|
| 4954 | 4852 | | 4693public officer, or the public officer's designee, [shall be tried] in the county where the [cause |
|---|
| 4955 | 4853 | | 4694arose] cause of action arises. |
|---|
| 4956 | 4854 | | 4695 Section 111. Section 78B-3a-204, which is renumbered from Section 78B-3-303 is |
|---|
| 4957 | 4855 | | 4696renumbered and amended to read: |
|---|
| 4958 | 4856 | | 4697 [78B-3-303]. 78B-3a-204. Actions against a county. |
|---|
| 4959 | 4857 | | 4698 (1) [An action against a county may be commenced and tried] Except as otherwise |
|---|
| 4969 | 4867 | | 4707 (1) [If] if the action is to enforce an interest in real property securing a consumer's |
|---|
| 4970 | 4868 | | 4708obligation, [the action may be brought only in] the county where the real property is located or |
|---|
| 4971 | 4869 | | 4709where the defendant resides[.]; or |
|---|
| 4972 | 4870 | | 4710 (2) [An action] if the action is to enforce an interest other than under Subsection (1) |
|---|
| 4973 | 4871 | | 4711[may be brought in], the county where the obligation is to be performed, the contract was |
|---|
| 4974 | 4872 | | 4712signed, or in which the defendant resides. |
|---|
| 4975 | 4873 | | 4713 Section 113. Section 78B-3a-206 is enacted to read: |
|---|
| 4976 | 4874 | | 4714 78B-3a-206. Transitory actions. |
|---|
| 4977 | 4875 | | 4715 (1) Except for a transitory action under Subsection (2), a plaintiff shall bring a |
|---|
| 4978 | 4876 | | 4716transitory action arising outside the state in the county where the defendant resides if the action |
|---|
| 4979 | 4877 | | 4717is brought in this state. |
|---|
| 4980 | 4878 | | 4718 (2) A plaintiff shall bring a transitory action arising outside the state in favor of |
|---|
| 4981 | 4879 | | 4719residents of this state in the county where: |
|---|
| 4982 | 4880 | | 4720 (a) the plaintiff resides; or |
|---|
| 4983 | 4881 | | 4721 (b) the principal defendant resides. |
|---|
| 4984 | 4882 | | 4722 Section 114. Section 78B-5-201 is amended to read: |
|---|
| 4985 | 4883 | | 4723 78B-5-201. Definitions -- Judgment recorded in Registry of Judgments. |
|---|
| 4986 | 4884 | | 4724 (1) [For purposes of this part] As used in this part, "Registry of Judgments" means the |
|---|
| 4987 | 4885 | | 4725index where a judgment is filed and searchable by the name of the judgment debtor through |
|---|
| 4991 | 4887 | | 4727 (2) On or after July 1, 1997, a judgment entered [in a district court] by a court of this |
|---|
| 4992 | 4888 | | 4728state does not create a lien upon or affect the title to real property unless the judgment is filed |
|---|
| 4993 | 4889 | | 4729in the Registry of Judgments of the office of the clerk of the district court of the county in |
|---|
| 4994 | 4890 | | 4730which the property is located. |
|---|
| 4995 | 4891 | | 4731 (3) (a) On or after July 1, 2002, except as provided in Subsection (3)(b), a judgment |
|---|
| 4996 | 4892 | | 4732entered [in a district court] by a court of this state does not create a lien upon or affect the title |
|---|
| 4997 | 4893 | | 4733to real property unless the judgment or an abstract of judgment is recorded in the office of the |
|---|
| 4998 | 4894 | | 4734county recorder in which the real property of the judgment debtor is located. |
|---|
| 4999 | 4895 | | 4735 (b) State agencies are exempt from the recording requirement of Subsection (3)(a). |
|---|
| 5000 | 4896 | | 4736 (4) In addition to the requirements of Subsections (2) and (3)(a), any judgment that is |
|---|
| 5002 | 4899 | | 4738of judgment that is recorded in the office of a county recorder after July 1, 2002, shall include: |
|---|
| 5003 | 4900 | | 4739 (a) the information identifying the judgment debtor as required under Subsection (4)(b) |
|---|
| 5004 | 4901 | | 4740on the judgment or abstract of judgment; or |
|---|
| 5005 | 4902 | | 4741 (b) a copy of the separate information statement of the judgment creditor that contains: |
|---|
| 5006 | 4903 | | 4742 (i) the correct name and last-known address of each judgment debtor and the address at |
|---|
| 5007 | 4904 | | 4743which each judgment debtor received service of process; |
|---|
| 5008 | 4905 | | 4744 (ii) the name and address of the judgment creditor; |
|---|
| 5009 | 4906 | | 4745 (iii) the amount of the judgment as filed in the Registry of Judgments; |
|---|
| 5010 | 4907 | | 4746 (iv) if known, the judgment debtor's Social Security number, date of birth, and driver's |
|---|
| 5011 | 4908 | | 4747license number if a natural person; and |
|---|
| 5012 | 4909 | | 4748 (v) whether or not a stay of enforcement has been ordered by the court and the date the |
|---|
| 5013 | 4910 | | 4749stay expires. |
|---|
| 5014 | 4911 | | 4750 (5) For the information required in Subsection (4), the judgment creditor shall: |
|---|
| 5015 | 4912 | | 4751 (a) provide the information on the separate information statement if known or available |
|---|
| 5016 | 4913 | | 4752to the judgment creditor from its records, its attorney's records, or the court records in the |
|---|
| 5019 | 4915 | | 4754 (b) state on the separate information statement that the information is unknown or |
|---|
| 5020 | 4916 | | 4755unavailable. |
|---|
| 5021 | 4917 | | 4756 (6) (a) Any judgment that requires payment of money and is entered [in a district court] |
|---|
| 5022 | 4918 | | 4757by a court of this state on or after September 1, 1998, or any judgment or abstract of judgment |
|---|
| 5023 | 4919 | | 4758recorded in the office of a county recorder after July 1, 2002, that does not include the debtor |
|---|
| 5024 | 4920 | | 4759identifying information as required in Subsection (4) is not a lien until a separate information |
|---|
| 5025 | 4921 | | 4760statement of the judgment creditor is recorded in the office of a county recorder in compliance |
|---|
| 5026 | 4922 | | 4761with Subsections (4) and (5). |
|---|
| 5027 | 4923 | | 4762 (b) The separate information statement of the judgment creditor referred to in |
|---|
| 5028 | 4924 | | 4763Subsection (6)(a) shall include: |
|---|
| 5029 | 4925 | | 4764 (i) the name of any judgment creditor, debtor, assignor, or assignee; |
|---|
| 5030 | 4926 | | 4765 (ii) the date on which the judgment was recorded in the office of the county recorder as |
|---|
| 5031 | 4927 | | 4766described in Subsection (4); and |
|---|
| 5032 | 4928 | | 4767 (iii) the county recorder's entry number and book and page of the recorded judgment. |
|---|
| 5034 | 4931 | | 47691998, but prior to July 1, 2002, has as its priority the date of entry, except as to parties with |
|---|
| 5035 | 4932 | | 4770actual or constructive knowledge of the judgment. |
|---|
| 5036 | 4933 | | 4771 (8) A judgment or notice of judgment wrongfully filed against real property is subject |
|---|
| 5037 | 4934 | | 4772to Title 38, Chapter 9, Wrongful Lien Act. |
|---|
| 5038 | 4935 | | 4773 (9) (a) To release, assign, renew, or extend a lien created by a judgment recorded in the |
|---|
| 5039 | 4936 | | 4774office of a county recorder, a person shall, in the office of the county recorder of each county in |
|---|
| 5040 | 4937 | | 4775which an instrument creating the lien is recorded, record a document releasing, assigning, |
|---|
| 5041 | 4938 | | 4776renewing, or extending the lien. |
|---|
| 5042 | 4939 | | 4777 (b) The document described in Subsection (9)(a) shall include: |
|---|
| 5043 | 4940 | | 4778 (i) the date of the release, assignment, renewal, or extension; |
|---|
| 5044 | 4941 | | 4779 (ii) the name of any judgment creditor, debtor, assignor, or assignee; and |
|---|
| 5048 | 4943 | | 4781(9)(a): |
|---|
| 5049 | 4944 | | 4782 (A) the date on which the instrument creating the lien was recorded in that county's |
|---|
| 5050 | 4945 | | 4783office of the county recorder; and |
|---|
| 5051 | 4946 | | 4784 (B) in accordance with Section 57-3-106, that county recorder's entry number and book |
|---|
| 5052 | 4947 | | 4785and page of the recorded instrument creating the judgment lien. |
|---|
| 5053 | 4948 | | 4786 Section 115. Section 78B-5-202 is amended to read: |
|---|
| 5054 | 4949 | | 4787 78B-5-202. Duration of judgment -- Judgment as a lien upon real property -- |
|---|
| 5055 | 4950 | | 4788Abstract of judgment -- Small claims judgment not a lien -- Appeal of judgment -- Child |
|---|
| 5056 | 4951 | | 4789support orders. |
|---|
| 5057 | 4952 | | 4790 (1) Judgments shall continue for eight years from the date of entry in a court unless |
|---|
| 5058 | 4953 | | 4791previously satisfied or unless enforcement of the judgment is stayed in accordance with law. |
|---|
| 5059 | 4954 | | 4792 (2) Prior to July 1, 1997, except as limited by Subsections (4) and (5), the entry of |
|---|
| 5060 | 4955 | | 4793judgment by a district court creates a lien upon the real property of the judgment debtor, not |
|---|
| 5061 | 4956 | | 4794exempt from execution, owned or acquired during the existence of the judgment, located in the |
|---|
| 5062 | 4957 | | 4795county in which the judgment is entered. |
|---|
| 5063 | 4958 | | 4796 (3) An abstract of judgment issued by the court in which the judgment is entered may |
|---|
| 5064 | 4959 | | 4797be filed in any court of this state and shall have the same force and effect as a judgment entered |
|---|
| 5065 | 4960 | | 4798in that court. |
|---|
| 5076 | 4971 | | 4808 (b) Upon the deposit of sufficient security as provided in Subsection (5)(a), the court |
|---|
| 5077 | 4972 | | 4809shall enter an order terminating the lien created by the judgment and granting the judgment |
|---|
| 5078 | 4973 | | 4810creditor a perfected lien in the deposited security as of the date of the original judgment. |
|---|
| 5079 | 4974 | | 4811 (6) (a) A child support order or a sum certain judgment for past due support may be |
|---|
| 5080 | 4975 | | 4812enforced: |
|---|
| 5081 | 4976 | | 4813 (i) within four years after the date the youngest child reaches majority; or |
|---|
| 5082 | 4977 | | 4814 (ii) eight years from the date of entry of the sum certain judgment entered by a tribunal. |
|---|
| 5083 | 4978 | | 4815 (b) The longer period of duration shall apply in every order. |
|---|
| 5084 | 4979 | | 4816 (c) A sum certain judgment may be renewed to extend the duration. |
|---|
| 5085 | 4980 | | 4817 (7) (a) After July 1, 2002, a judgment entered by [a district court or a justice court in |
|---|
| 5086 | 4981 | | 4818the state] a district court, a justice court, or the Business and Chancery Court, becomes a lien |
|---|
| 5087 | 4982 | | 4819upon real property if: |
|---|
| 5088 | 4983 | | 4820 (i) the judgment or an abstract of the judgment containing the information identifying |
|---|
| 5089 | 4984 | | 4821the judgment debtor as described in Subsection 78B-5-201(4)(b) is recorded in the office of the |
|---|
| 5090 | 4985 | | 4822county recorder; or |
|---|
| 5091 | 4986 | | 4823 (ii) the judgment or an abstract of the judgment and a separate information statement of |
|---|
| 5092 | 4987 | | 4824the judgment creditor as described in Subsection 78B-5-201(5) is recorded in the office of the |
|---|
| 5093 | 4988 | | 4825county recorder. |
|---|
| 5094 | 4989 | | 4826 (b) The judgment shall run from the date of entry by the [district court or justice] court. |
|---|
| 5095 | 4990 | | 4827 (c) The real property subject to the lien includes all the real property of the judgment |
|---|
| 5096 | 4991 | | 4828debtor: |
|---|
| 5097 | 4992 | | 4829 (i) in the county in which the recording under Subsection (7)(a)(i) or (ii) occurs; and |
|---|
| 5105 | 4999 | | 4835Section 17-21-6. |
|---|
| 5106 | 5000 | | 4836 (b) A judgment containing a legal description shall also be abstracted in the appropriate |
|---|
| 5107 | 5001 | | 4837tract index in the office of the county recorder. |
|---|
| 5108 | 5002 | | 4838 (9) (a) To release, assign, renew, or extend a lien created by a judgment recorded in the |
|---|
| 5109 | 5003 | | 4839office of a county recorder, a person shall, in the office of the county recorder of each county in |
|---|
| 5110 | 5004 | | 4840which an instrument creating the lien is recorded, record a document releasing, assigning, |
|---|
| 5111 | 5005 | | 4841renewing, or extending the lien. |
|---|
| 5112 | 5006 | | 4842 (b) The document described in Subsection (9)(a) shall include: |
|---|
| 5113 | 5007 | | 4843 (i) the date of the release, assignment, renewal, or extension; |
|---|
| 5114 | 5008 | | 4844 (ii) the name of any judgment creditor, debtor, assignor, or assignee; and |
|---|
| 5115 | 5009 | | 4845 (iii) for the county in which the document is recorded in accordance with Subsection |
|---|
| 5116 | 5010 | | 4846(9)(a): |
|---|
| 5117 | 5011 | | 4847 (A) the date on which the instrument creating the lien was recorded in that county's |
|---|
| 5118 | 5012 | | 4848office of the county recorder; and |
|---|
| 5119 | 5013 | | 4849 (B) in accordance with Section 57-3-106, that county recorder's entry number and book |
|---|
| 5120 | 5014 | | 4850and page of the recorded instrument creating the judgment lien. |
|---|
| 5121 | 5015 | | 4851 Section 116. Section 78B-5-206 is amended to read: |
|---|
| 5122 | 5016 | | 4852 78B-5-206. Mileage allowance for judgment debtor required to appear. |
|---|
| 5123 | 5017 | | 4853 (1) A judgment debtor legally required to appear before a district court [or a master] or |
|---|
| 5124 | 5018 | | 4854the Business and Chancery Court to answer concerning the debtor's property is entitled, on a |
|---|
| 5125 | 5019 | | 4855sufficient showing of need, to mileage of 15 cents per mile for each mile actually and |
|---|
| 5126 | 5020 | | 4856necessarily traveled in going only, to be paid by the judgment creditor at whose instance the |
|---|
| 5127 | 5021 | | 4857judgment debtor was required to appear. |
|---|
| 5128 | 5022 | | 4858 (2) The judgment creditor is not required to make any payment for such mileage until |
|---|
| 5129 | 5023 | | 4859the judgment debtor has actually appeared before the court [or master]. |
|---|
| 5130 | 5024 | | 4860 Section 117. Section 78B-6-110 is amended to read: |
|---|
| 5133 | 5027 | | 4862 (1) (a) An unmarried biological father, by virtue of the fact that he has engaged in a |
|---|
| 5134 | 5028 | | 4863sexual relationship with a woman: |
|---|
| 5135 | 5029 | | 4864 (i) is considered to be on notice that a pregnancy and an adoption proceeding regarding |
|---|
| 5136 | 5030 | | 4865the child may occur; and |
|---|
| 5137 | 5031 | | 4866 (ii) has a duty to protect his own rights and interests. |
|---|
| 5138 | 5032 | | 4867 (b) An unmarried biological father is entitled to actual notice of a birth or an adoption |
|---|
| 5139 | 5033 | | 4868proceeding with regard to his child only as provided in this section or Section 78B-6-110.5. |
|---|
| 5140 | 5034 | | 4869 (2) Notice of an adoption proceeding shall be served on each of the following persons: |
|---|
| 5141 | 5035 | | 4870 (a) any person or agency whose consent or relinquishment is required under Section |
|---|
| 5142 | 5036 | | 487178B-6-120 or 78B-6-121, unless that right has been terminated by: |
|---|
| 5143 | 5037 | | 4872 (i) waiver; |
|---|
| 5144 | 5038 | | 4873 (ii) relinquishment; |
|---|
| 5145 | 5039 | | 4874 (iii) actual or implied consent; or |
|---|
| 5146 | 5040 | | 4875 (iv) judicial action; |
|---|
| 5147 | 5041 | | 4876 (b) any person who has initiated a paternity proceeding and filed notice of that action |
|---|
| 5148 | 5042 | | 4877with the state registrar of vital statistics within the Department of Health and Human Services, |
|---|
| 5149 | 5043 | | 4878in accordance with Subsection (3); |
|---|
| 5150 | 5044 | | 4879 (c) any legally appointed custodian or guardian of the adoptee; |
|---|
| 5151 | 5045 | | 4880 (d) the petitioner's spouse, if any, only if the petitioner's spouse has not joined in the |
|---|
| 5152 | 5046 | | 4881petition; |
|---|
| 5153 | 5047 | | 4882 (e) the adoptee's spouse, if any; |
|---|
| 5154 | 5048 | | 4883 (f) any person who, prior to the time the mother executes her consent for adoption or |
|---|
| 5155 | 5049 | | 4884relinquishes the child for adoption, is recorded on the birth certificate as the child's father, with |
|---|
| 5156 | 5050 | | 4885the knowledge and consent of the mother; |
|---|
| 5157 | 5051 | | 4886 (g) a person who is: |
|---|
| 5158 | 5052 | | 4887 (i) openly living in the same household with the child at the time the consent is |
|---|
| 5166 | 5059 | | 4893 (3) (a) In order to preserve any right to notice, an unmarried biological father shall, |
|---|
| 5167 | 5060 | | 4894consistent with Subsection (3)(d): |
|---|
| 5168 | 5061 | | 4895 (i) initiate proceedings in a district court of Utah to establish paternity under Title 78B, |
|---|
| 5169 | 5062 | | 4896Chapter 15, Utah Uniform Parentage Act; and |
|---|
| 5170 | 5063 | | 4897 (ii) file a notice of commencement of the proceedings described in Subsection (3)(a)(i) |
|---|
| 5171 | 5064 | | 4898with the office of vital statistics within the Department of Health and Human Services. |
|---|
| 5172 | 5065 | | 4899 (b) If the unmarried, biological father does not know the county in which the birth |
|---|
| 5173 | 5066 | | 4900mother resides, he may initiate his action in any county, subject to a change in trial pursuant to |
|---|
| 5174 | 5067 | | 4901Section [78B-3-307] 78B-3a-201. |
|---|
| 5175 | 5068 | | 4902 (c) The Department of Health and Human Services shall provide forms for the purpose |
|---|
| 5176 | 5069 | | 4903of filing the notice described in Subsection (3)(a)(ii), and make those forms available in the |
|---|
| 5177 | 5070 | | 4904office of the county health department in each county. |
|---|
| 5178 | 5071 | | 4905 (d) When the state registrar of vital statistics receives a completed form, the registrar |
|---|
| 5179 | 5072 | | 4906shall: |
|---|
| 5180 | 5073 | | 4907 (i) record the date and time the form was received; and |
|---|
| 5181 | 5074 | | 4908 (ii) immediately enter the information provided by the unmarried biological father in |
|---|
| 5182 | 5075 | | 4909the confidential registry established by Subsection 78B-6-121(3)(c). |
|---|
| 5183 | 5076 | | 4910 (e) The action and notice described in Subsection (3)(a): |
|---|
| 5184 | 5077 | | 4911 (i) may be filed before or after the child's birth; and |
|---|
| 5185 | 5078 | | 4912 (ii) shall be filed prior to the mother's: |
|---|
| 5186 | 5079 | | 4913 (A) execution of consent to adoption of the child; or |
|---|
| 5187 | 5080 | | 4914 (B) relinquishment of the child for adoption. |
|---|
| 5198 | 5091 | | 4924person intends to intervene in or contest the adoption; |
|---|
| 5199 | 5092 | | 4925 (d) shall state the consequences, described in Subsection (6)(b), for failure of a person |
|---|
| 5200 | 5093 | | 4926to file a motion for relief within 30 days after the day on which the person is served with notice |
|---|
| 5201 | 5094 | | 4927of an adoption proceeding; |
|---|
| 5202 | 5095 | | 4928 (e) is not required to include, nor be accompanied by, a summons or a copy of the |
|---|
| 5203 | 5096 | | 4929petition for adoption; |
|---|
| 5204 | 5097 | | 4930 (f) shall state where the person may obtain a copy of the petition for adoption; and |
|---|
| 5205 | 5098 | | 4931 (g) shall indicate the right to the appointment of counsel for a party whom the court |
|---|
| 5206 | 5099 | | 4932determines is indigent and at risk of losing the party's parental rights. |
|---|
| 5207 | 5100 | | 4933 (6) (a) A person who has been served with notice of an adoption proceeding and who |
|---|
| 5208 | 5101 | | 4934wishes to contest the adoption shall file a motion to intervene in the adoption proceeding: |
|---|
| 5209 | 5102 | | 4935 (i) within 30 days after the day on which the person was served with notice of the |
|---|
| 5210 | 5103 | | 4936adoption proceeding; |
|---|
| 5211 | 5104 | | 4937 (ii) setting forth specific relief sought; and |
|---|
| 5212 | 5105 | | 4938 (iii) accompanied by a memorandum specifying the factual and legal grounds upon |
|---|
| 5213 | 5106 | | 4939which the motion is based. |
|---|
| 5214 | 5107 | | 4940 (b) A person who fails to fully and strictly comply with all of the requirements |
|---|
| 5215 | 5108 | | 4941described in Subsection (6)(a) within 30 days after the day on which the person was served |
|---|
| 5219 | 5110 | | 4943 (i) waives any right to further notice in connection with the adoption; |
|---|
| 5220 | 5111 | | 4944 (ii) forfeits all rights in relation to the adoptee; and |
|---|
| 5221 | 5112 | | 4945 (iii) is barred from thereafter bringing or maintaining any action to assert any interest in |
|---|
| 5222 | 5113 | | 4946the adoptee. |
|---|
| 5223 | 5114 | | 4947 (7) Service of notice under this section shall be made as follows: |
|---|
| 5224 | 5115 | | 4948 (a) (i) Subject to Subsection (5)(e), service on a person whose consent is necessary |
|---|
| 5225 | 5116 | | 4949under Section 78B-6-120 or 78B-6-121 shall be in accordance with the provisions of the Utah |
|---|
| 5226 | 5117 | | 4950Rules of Civil Procedure. |
|---|
| 5227 | 5118 | | 4951 (ii) If service of a person described in Subsection (7)(a)(i) is by publication, the court |
|---|
| 5228 | 5119 | | 4952shall designate the content of the notice regarding the identity of the parties. |
|---|
| 5229 | 5120 | | 4953 (iii) The notice described in this Subsection (7)(a) may not include the name of a |
|---|
| 5231 | 5123 | | 4955 (b) (i) Except as provided in Subsection (7)(b)(ii) to any other person for whom notice |
|---|
| 5232 | 5124 | | 4956is required under this section, service by certified mail, return receipt requested, is sufficient. |
|---|
| 5233 | 5125 | | 4957 (ii) If the service described in Subsection (7)(b)(i) cannot be completed after two |
|---|
| 5234 | 5126 | | 4958attempts, the court may issue an order providing for service by publication, posting, or by any |
|---|
| 5235 | 5127 | | 4959other manner of service. |
|---|
| 5236 | 5128 | | 4960 (c) Notice to a person who has initiated a paternity proceeding and filed notice of that |
|---|
| 5237 | 5129 | | 4961action with the state registrar of vital statistics in the Department of Health and Human |
|---|
| 5238 | 5130 | | 4962Services in accordance with the requirements of Subsection (3), shall be served by certified |
|---|
| 5239 | 5131 | | 4963mail, return receipt requested, at the last address filed with the registrar. |
|---|
| 5240 | 5132 | | 4964 (8) The notice required by this section may be waived in writing by the person entitled |
|---|
| 5241 | 5133 | | 4965to receive notice. |
|---|
| 5242 | 5134 | | 4966 (9) Proof of service of notice on all persons for whom notice is required by this section |
|---|
| 5243 | 5135 | | 4967shall be filed with the court before the final dispositional hearing on the adoption. |
|---|
| 5244 | 5136 | | 4968 (10) Notwithstanding any other provision of law, neither the notice of an adoption |
|---|
| 5247 | 5138 | | 4970persons seeking to adopt the adoptee. |
|---|
| 5248 | 5139 | | 4971 (11) Except as to those persons whose consent to an adoption is required under Section |
|---|
| 5249 | 5140 | | 497278B-6-120 or 78B-6-121, the sole purpose of notice under this section is to enable the person |
|---|
| 5250 | 5141 | | 4973served to: |
|---|
| 5251 | 5142 | | 4974 (a) intervene in the adoption; and |
|---|
| 5252 | 5143 | | 4975 (b) present evidence to the court relevant to the best interest of the child. |
|---|
| 5253 | 5144 | | 4976 Section 118. Section 78B-6-313 is amended to read: |
|---|
| 5254 | 5145 | | 4977 78B-6-313. Contempt of process of nonjudicial officer -- Procedure. |
|---|
| 5255 | 5146 | | 4978 (1) If a person, officer, referee, arbitrator, board, or committee with the authority to |
|---|
| 5256 | 5147 | | 4979compel the attendance of witnesses or the production of documents issues a subpoena and the |
|---|
| 5257 | 5148 | | 4980person to whom the subpoena is issued refuses to appear or produce the documents ordered, the |
|---|
| 5258 | 5149 | | 4981person shall be considered in contempt. |
|---|
| 5259 | 5150 | | 4982 (2) (a) The person, officer, referee, arbitrator, board, or committee may report the |
|---|
| 5260 | 5151 | | 4983person to whom the subpoena is issued to the [judge of the district] court. |
|---|
| 5261 | 5152 | | 4984 (b) The court may then issue a warrant of attachment or order to show cause to compel |
|---|
| 5263 | 5155 | | 4986 (3) When a person charged has been brought up or has appeared, the person's contempt |
|---|
| 5264 | 5156 | | 4987may be purged in the same manner as other contempts mentioned in this part. |
|---|
| 5265 | 5157 | | 4988 Section 119. Section 78B-6-1303 is amended to read: |
|---|
| 5266 | 5158 | | 4989 78B-6-1303. Lis pendens -- Notice. |
|---|
| 5267 | 5159 | | 4990 (1) (a) Any party to an action filed in the United States District Court for the District of |
|---|
| 5268 | 5160 | | 4991Utah, the United States Bankruptcy Court for the District of Utah, [or a Utah district court] a |
|---|
| 5269 | 5161 | | 4992district court of this state, or the Business and Chancery Court of this state, that affects the title |
|---|
| 5270 | 5162 | | 4993to, or the right of possession of, real property may file a notice of pendency of action. |
|---|
| 5271 | 5163 | | 4994 (b) A party that chooses to file a notice of pendency of action shall: |
|---|
| 5272 | 5164 | | 4995 (i) first, file the notice with the court that has jurisdiction of the action; and |
|---|
| 5276 | 5166 | | 4997the county where the property or any portion of the property is located. |
|---|
| 5277 | 5167 | | 4998 (c) A person may not file a notice of pendency of action unless a case has been filed |
|---|
| 5278 | 5168 | | 4999and is pending in [a United States or Utah district court] the United States District Court for the |
|---|
| 5279 | 5169 | | 5000District of Utah, the United States Bankruptcy Court for the District of Utah, a district court of |
|---|
| 5280 | 5170 | | 5001this state, or the Business and Chancery Court of this state. |
|---|
| 5281 | 5171 | | 5002 (2) The notice shall contain: |
|---|
| 5282 | 5172 | | 5003 (a) the caption of the case, with the names of the parties and the case number; |
|---|
| 5283 | 5173 | | 5004 (b) the object of the action or defense; and |
|---|
| 5284 | 5174 | | 5005 (c) the specific legal description of only the property affected. |
|---|
| 5285 | 5175 | | 5006 (3) From the time of filing the notice, a purchaser, an encumbrancer of the property, or |
|---|
| 5286 | 5176 | | 5007any other party in interest that may be affected by the action is considered to have constructive |
|---|
| 5287 | 5177 | | 5008notice of pendency of action. |
|---|
| 5288 | 5178 | | 5009 Section 120. Section 78B-6-1904 is amended to read: |
|---|
| 5289 | 5179 | | 5010 78B-6-1904. Action -- Enforcement -- Remedies -- Damages. |
|---|
| 5290 | 5180 | | 5011 (1) (a) A target who has received a demand letter asserting patent infringement in bad |
|---|
| 5291 | 5181 | | 5012faith, or a person aggrieved by a violation of this part, may bring an action [in district court] in |
|---|
| 5292 | 5182 | | 5013a court with jurisdiction under Title 78A, Judiciary and Judicial Administration. |
|---|
| 5293 | 5183 | | 5014 (b) The court may award the following remedies to a target who prevails in an action |
|---|
| 5294 | 5184 | | 5015brought pursuant to this part: |
|---|
| 5304 | 5194 | | 5024impose any relief [it] the court considers prudent, including the following: |
|---|
| 5305 | 5195 | | 5025 [(a)] (i) equitable relief; |
|---|
| 5306 | 5196 | | 5026 [(b)] (ii) statutory damages of not less than $750 per demand letter distributed in bad |
|---|
| 5307 | 5197 | | 5027faith; and |
|---|
| 5308 | 5198 | | 5028 [(c)] (iii) costs and fees, including reasonable attorney fees, to the attorney general. |
|---|
| 5309 | 5199 | | 5029 (3) This part may not be construed to limit other rights and remedies available to the |
|---|
| 5310 | 5200 | | 5030state or to any person under any other law. |
|---|
| 5311 | 5201 | | 5031 (4) A demand letter or assertion of a patent infringement that includes a claim for relief |
|---|
| 5312 | 5202 | | 5032arising under 35 U.S.C. Sec. 271(e)(2) is not subject to the provisions of this part. |
|---|
| 5313 | 5203 | | 5033 (5) The attorney general shall annually provide an electronic report to the Executive |
|---|
| 5314 | 5204 | | 5034Appropriations Committee regarding the number of investigations and actions brought under |
|---|
| 5315 | 5205 | | 5035this part. The report shall include: |
|---|
| 5316 | 5206 | | 5036 (a) the number of investigations commenced; |
|---|
| 5317 | 5207 | | 5037 (b) the number of actions brought under the provisions of this part; |
|---|
| 5318 | 5208 | | 5038 (c) the current status of actions brought under Subsection (5)(b); and |
|---|
| 5319 | 5209 | | 5039 (d) final resolution of actions brought under this part, including any recovery under |
|---|
| 5320 | 5210 | | 5040Subsection (2). |
|---|
| 5321 | 5211 | | 5041 Section 121. Section 78B-6-1905 is amended to read: |
|---|
| 5322 | 5212 | | 5042 78B-6-1905. Bond. |
|---|
| 5323 | 5213 | | 5043 (1) Upon motion by a target and a finding by the court that a target has established a |
|---|
| 5324 | 5214 | | 5044reasonable likelihood that a sponsor has made a bad faith assertion of patent infringement in a |
|---|
| 5325 | 5215 | | 5045demand letter in violation of this part, the court shall require the sponsor to post a bond in an |
|---|
| 5326 | 5216 | | 5046amount equal to a good faith estimate of the target's costs to litigate the claim under this part |
|---|
| 5333 | 5222 | | 5051held if either party requests it. |
|---|
| 5334 | 5223 | | 5052 (3) A bond ordered pursuant to this section may not exceed $250,000. The court may |
|---|
| 5335 | 5224 | | 5053waive the bond requirement if it finds the sponsor has available assets equal to the amount of |
|---|
| 5336 | 5225 | | 5054the proposed bond or for other good cause shown. |
|---|
| 5337 | 5226 | | 5055 Section 122. Section 78B-21-102 is amended to read: |
|---|
| 5338 | 5227 | | 5056 78B-21-102. Definitions. |
|---|
| 5339 | 5228 | | 5057 As used in this chapter: |
|---|
| 5340 | 5229 | | 5058 (1) "Affiliate" means: |
|---|
| 5341 | 5230 | | 5059 (a) with respect to an individual: |
|---|
| 5342 | 5231 | | 5060 (i) a companion of the individual; |
|---|
| 5343 | 5232 | | 5061 (ii) a lineal ancestor or descendant, whether by blood or adoption, of: |
|---|
| 5344 | 5233 | | 5062 (A) the individual; or |
|---|
| 5345 | 5234 | | 5063 (B) a companion of the individual; |
|---|
| 5346 | 5235 | | 5064 (iii) a companion of an ancestor or descendant described in Subsection (1)(a)(ii); |
|---|
| 5347 | 5236 | | 5065 (iv) a sibling, aunt, uncle, great aunt, great uncle, first cousin, niece, nephew, |
|---|
| 5348 | 5237 | | 5066grandniece, or grandnephew of the individual, whether related by the whole or the half blood or |
|---|
| 5349 | 5238 | | 5067adoption, or a companion of a sibling, aunt, uncle, great aunt, great uncle, first cousin, niece, |
|---|
| 5350 | 5239 | | 5068nephew, grandniece, or grandnephew of the individual; or |
|---|
| 5351 | 5240 | | 5069 (v) any other individual occupying the residence of the individual; and |
|---|
| 5352 | 5241 | | 5070 (b) with respect to a person other than an individual: |
|---|
| 5353 | 5242 | | 5071 (i) another person that directly or indirectly controls, is controlled by, or is under |
|---|
| 5354 | 5243 | | 5072common control with the person; |
|---|
| 5355 | 5244 | | 5073 (ii) an officer, director, manager, member, partner, employee, or trustee or other |
|---|
| 5356 | 5245 | | 5074fiduciary of the person; or |
|---|
| 5357 | 5246 | | 5075 (iii) a companion of, or an individual occupying the residence of, an individual |
|---|
| 5358 | 5247 | | 5076described in Subsection (1)(b)(i) or (ii). |
|---|
| 5362 | 5251 | | 5079 (b) the domestic partner of an individual; or |
|---|
| 5363 | 5252 | | 5080 (c) another individual in a civil union with an individual. |
|---|
| 5364 | 5253 | | 5081 (3) "Court" means a [district court in the state] court of this state with jurisdiction over |
|---|
| 5365 | 5254 | | 5082the action under Title 78A, Judiciary and Judicial Administration. |
|---|
| 5366 | 5255 | | 5083 (4) "Executory contract" means a contract, including a lease, under which each party |
|---|
| 5367 | 5256 | | 5084has an unperformed obligation and the failure of a party to complete performance would |
|---|
| 5368 | 5257 | | 5085constitute a material breach. |
|---|
| 5369 | 5258 | | 5086 (5) "Governmental unit" means an office, department, division, bureau, board, |
|---|
| 5370 | 5259 | | 5087commission, or other agency of this state or a subdivision of this state. |
|---|
| 5371 | 5260 | | 5088 (6) "Lien" means an interest in property that secures payment or performance of an |
|---|
| 5372 | 5261 | | 5089obligation. |
|---|
| 5373 | 5262 | | 5090 (7) "Mortgage" means a record, however denominated, that creates or provides for a |
|---|
| 5374 | 5263 | | 5091consensual lien on real property or rents, even if the mortgage also creates or provides for a lien |
|---|
| 5375 | 5264 | | 5092on personal property. |
|---|
| 5376 | 5265 | | 5093 (8) "Mortgagee" means a person entitled to enforce an obligation secured by a |
|---|
| 5377 | 5266 | | 5094mortgage. |
|---|
| 5378 | 5267 | | 5095 (9) "Mortgagor" means a person that grants a mortgage or a successor in ownership of |
|---|
| 5379 | 5268 | | 5096the real property described in the mortgage. |
|---|
| 5380 | 5269 | | 5097 (10) "Owner" means the person for whose property a receiver is appointed. |
|---|
| 5381 | 5270 | | 5098 (11) "Person" means an individual, estate, business or nonprofit entity, public |
|---|
| 5382 | 5271 | | 5099corporation, government or governmental subdivision, agency, or instrumentality, or other |
|---|
| 5383 | 5272 | | 5100legal entity. |
|---|
| 5384 | 5273 | | 5101 (12) "Proceeds" means the following property: |
|---|
| 5385 | 5274 | | 5102 (a) whatever is acquired on the sale, lease, license, exchange, or other disposition of |
|---|
| 5386 | 5275 | | 5103receivership property; |
|---|
| 5395 | 5283 | | 5110owner or mortgagee, insurance payable by reason of the loss or nonconformity of, defects or |
|---|
| 5396 | 5284 | | 5111infringement of rights in, or damage to the property. |
|---|
| 5397 | 5285 | | 5112 (13) "Property" means all of a person's right, title, and interest, both legal and |
|---|
| 5398 | 5286 | | 5113equitable, in real and personal property, tangible and intangible, wherever located and however |
|---|
| 5399 | 5287 | | 5114acquired. The term includes proceeds, products, offspring, rents, or profits of or from the |
|---|
| 5400 | 5288 | | 5115property. |
|---|
| 5401 | 5289 | | 5116 (14) "Receiver" means a person appointed by the court as the court's agent, and subject |
|---|
| 5402 | 5290 | | 5117to the court's direction, to take possession of, manage, and, if authorized by this chapter or |
|---|
| 5403 | 5291 | | 5118court order, transfer, sell, lease, license, exchange, collect, or otherwise dispose of receivership |
|---|
| 5404 | 5292 | | 5119property. |
|---|
| 5405 | 5293 | | 5120 (15) "Receivership" means a proceeding in which a receiver is appointed. |
|---|
| 5406 | 5294 | | 5121 (16) "Receivership property" means the property of an owner that is described in the |
|---|
| 5407 | 5295 | | 5122order appointing a receiver or a subsequent order. The term includes any proceeds, products, |
|---|
| 5408 | 5296 | | 5123offspring, rents, or profits of or from the property. |
|---|
| 5409 | 5297 | | 5124 (17) "Record" means, when used as a noun, information that is inscribed on a tangible |
|---|
| 5410 | 5298 | | 5125medium or that is stored on an electronic or other medium and is retrievable in perceivable |
|---|
| 5411 | 5299 | | 5126form. |
|---|
| 5412 | 5300 | | 5127 (18) "Rents" means: |
|---|
| 5413 | 5301 | | 5128 (a) sums payable for the right to possess or occupy, or for the actual possession or |
|---|
| 5414 | 5302 | | 5129occupation of, real property of another person; |
|---|
| 5415 | 5303 | | 5130 (b) sums payable to a mortgagor under a policy of rental-interruption insurance |
|---|
| 5427 | 5315 | | 5141 (19) "Secured obligation" means an obligation the payment or performance of which is |
|---|
| 5428 | 5316 | | 5142secured by a security agreement. |
|---|
| 5429 | 5317 | | 5143 (20) "Security agreement" means an agreement that creates or provides for a lien. |
|---|
| 5430 | 5318 | | 5144 (21) "Sign" means, with present intent to authenticate or adopt a record: |
|---|
| 5431 | 5319 | | 5145 (a) to execute or adopt a tangible symbol; or |
|---|
| 5432 | 5320 | | 5146 (b) to attach to or logically associate with the record an electronic sound, symbol, or |
|---|
| 5433 | 5321 | | 5147process. |
|---|
| 5434 | 5322 | | 5148 Section 123. Repealer. |
|---|
| 5435 | 5323 | | 5149 This bill repeals: |
|---|
| 5436 | 5324 | | 5150 Section 3-1-20.2, Procedure for judicial dissolution. |
|---|
| 5437 | 5325 | | 5151 Section 16-6a-1415, Procedure for judicial dissolution. |
|---|
| 5438 | 5326 | | 5152 Section 16-10a-1431, Procedure for judicial dissolution. |
|---|
| 5439 | 5327 | | 5153 Section 34-34-14, Jurisdiction. |
|---|
| 5440 | 5328 | | 5154 Section 78B-3-305, Transitory actions -- Residence of corporations. |
|---|
| 5441 | 5329 | | 5155 Section 78B-3-306, Arising without this state in favor of resident. |
|---|
| 5442 | 5330 | | 5156 Section 78B-3-308, Change of venue -- Conditions precedent. |
|---|
| 5443 | 5331 | | 5157 Section 78B-3-309, Grounds. |
|---|
| 5447 | 5333 | | 5159 Section 78B-3-311, Duty of clerk -- Fees and costs -- Effect on jurisdiction. |
|---|
| 5448 | 5334 | | 5160 Section 124. Effective date. |
|---|
| 5449 | 5335 | | 5161 This bill takes effect on July 1, 2024. |
|---|
| 5450 | 5336 | | 5162 Section 125. Coordinating H.B. 251 with S.B. 129 -- Superseding technical and |
|---|
| 5451 | 5337 | | 5163substantive amendments. |
|---|
| 5452 | 5338 | | 5164 If this H.B. 251 and S.B. 129, Judiciary Amendments, both pass and become law, the |
|---|
| 5453 | 5339 | | 5165Legislature intends that, on July 1, 2024, the Office of Legislative Research and General |
|---|
| 5454 | 5340 | | 5166Counsel prepare the Utah Code database for publication as follows: |
|---|
| 5455 | 5341 | | 5167 (1) the amendments to Section 31A-5-414 in H.B. 251 supersede the amendments to |
|---|
| 5456 | 5342 | | 5168Section 31A-5-414 in S.B. 129; |
|---|
| 5457 | 5343 | | 5169 (2) the amendments to Section 31A-5-415 in H.B. 251 supersede the amendments to |
|---|
| 5458 | 5344 | | 5170Section 31A-5-415 in S.B. 129; and |
|---|