Utah Court of Appeals hears dispute over whether buyers were bona fide purchasers after sheriff's sale

Summary

During oral argument in Skyline Holdings v. Payan and Castro, counsel disputed whether recorded judgment documents and a certificate of sale put later purchasers on notice of an unrecorded beneficiary's interest in property transferred to a revocable trust. The panel pressed competing readings of Utah recording statutes 57-3-102(4) and (5).

The Utah Court of Appeals on Friday heard oral argument in Skyline Holdings v. Payan and Castro, a dispute over whether later buyers took title free of a judgment creditor's unrecorded trust interest.

At argument, Spencer McDonald, counsel for Skyline, told the three-judge panel that the case turns on two central questions: why the "first in time, first in right" principle did not prevail and whether the buyers qualify as bona fide purchasers given recorded documents before closing. "There was a transfer from the judgment debtor in the foreclosure matter to a revocable trust in 2019," McDonald said, adding that a judgment information statement was recorded on April 28, 2021 and "that's the date on which the judgment information statement was recorded in the county recorder's office." He argued the judgment should have attached on that date and that the buyers or their agents failed to conduct judgment-index searches before closing.

Appellees' counsel Sarah Goulet disputed that the…

Utah Court of Appeals hears dispute over whether buyers were bona fide purchasers after sheriff's sale

Summary

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