Rep. Norm Thurston — Voting Record

Bill

Number

S.B. 208 (2017GS)

Sponsor

Sen. Hillyard, L.

Final action

Governor Signed 3/25/2017

Outcome

Became law — signed by Gov. Gary R. Herbert

Summary

What it does

• This bill:
• provides for the appointment of a receiver to dispose of commercial property subject to dispute under certain circumstances;
• provides rules of conduct for a court-appointed receiver;
• provides rules of conduct for an owner of property subject to receivership;
• provides an applicability date; and
• defines terms.

Every vote on this bill

Bill text

UTAH UNIFORM COMMERCIAL REAL ESTATE
RECEIVERSHIP ACT
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Lyle W. Hillyard
House Sponsor: 
 Brian S. King
LONG TITLE
General Description:
This bill enacts provisions related to commercial real estate receivership.
Highlighted Provisions:
This bill:
▸ provides for the appointment of a receiver to dispose of commercial property
subject to dispute under certain circumstances;
▸ provides rules of conduct for a court-appointed receiver;
▸ provides rules of conduct for an owner of property subject to receivership;
▸ provides an applicability date; and
▸ defines terms.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
ENACTS:
78B-21-101
, Utah Code Annotated 1953
78B-21-102
, Utah Code Annotated 1953
78B-21-103
, Utah Code Annotated 1953
78B-21-104
, Utah Code Annotated 1953
78B-21-105
, Utah Code Annotated 1953
78B-21-106
, Utah Code Annotated 1953
78B-21-107
, Utah Code Annotated 1953
78B-21-108
, Utah Code Annotated 1953
78B-21-109
, Utah Code Annotated 1953
78B-21-110
, Utah Code Annotated 1953
78B-21-111
, Utah Code Annotated 1953
78B-21-112
, Utah Code Annotated 1953
78B-21-113
, Utah Code Annotated 1953
78B-21-114
, Utah Code Annotated 1953
78B-21-115
, Utah Code Annotated 1953
78B-21-116
, Utah Code Annotated 1953
78B-21-117
, Utah Code Annotated 1953
78B-21-118
, Utah Code Annotated 1953
78B-21-119
, Utah Code Annotated 1953
78B-21-120
, Utah Code Annotated 1953
78B-21-121
, Utah Code Annotated 1953
78B-21-122
, Utah Code Annotated 1953
78B-21-123
, Utah Code Annotated 1953
78B-21-124
, Utah Code Annotated 1953
78B-21-125
, Utah Code Annotated 1953
78B-21-126
, Utah Code Annotated 1953
78B-21-127
, Utah Code Annotated 1953
78B-21-128
, Utah Code Annotated 1953
78B-21-129
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
78B-21-101
 is enacted to read:
CHAPTER 21. UNIFORM COMMERCIAL REAL ESTATE RECEIVERSHIP ACT
 78B-21-101.
Title.
This chapter is known as the "Uniform Commercial Real Estate Receivership Act."
Section 2. Section 
78B-21-102
 is enacted to read:
 78B-21-102.
Definitions.
(1) "Affiliate" means:
(a) with respect to an individual:
(i) a companion of the individual;
(ii) a lineal ancestor or descendant, whether by blood or adoption, of:
(A) the individual; or
(B) a companion of the individual;
(iii) a companion of an ancestor or descendant described in Subsection (1)(a)(ii);
(iv) a sibling, aunt, uncle, great aunt, great uncle, first cousin, niece, nephew,
grandniece, or grandnephew of the individual, whether related by the whole or the half blood or
adoption, or a companion of a sibling, aunt, uncle, great aunt, great uncle, first cousin, niece,
nephew, grandniece, or grandnephew of the individual; or
(v) any other individual occupying the residence of the individual; and
(b) with respect to a person other than an individual:
(i) another person that directly or indirectly controls, is controlled by, or is under
common control with the person;
(ii) an officer, director, manager, member, partner, employee, or trustee or other
fiduciary of the person; or
(iii) a companion of, or an individual occupying the residence of, an individual
described in Subsection (1)(b)(i) or (ii).
(2) "Companion" means:
(a) the spouse of an individual;
(b) the domestic partner of an individual; or
(c) another individual in a civil union with an individual.
(3) "Court" means a district court in the state.
(4) "Executory contract" means a contract, including a lease, under which each party
has an unperformed obligation and the failure of a party to complete performance would
constitute a material breach.
(5) "Governmental unit" means an office, department, division, bureau, board,
commission, or other agency of this state or a subdivision of this state.
(6) "Lien" means an interest in property that secures payment or performance of an
obligation.
(7) "Mortgage" means a record, however denominated, that creates or provides for a
consensual lien on real property or rents, even if the mortgage also creates or provides for a lien
on personal property.
(8) "Mortgagee" means a person entitled to enforce an obligation secured by a
mortgage.
(9) "Mortgagor" means a person that grants a mortgage or a successor in ownership of
the real property described in the mortgage.
(10) "Owner" means the person for whose property a receiver is appointed.
(11) "Person" means an individual, estate, business or nonprofit entity, public
corporation, government or governmental subdivision, agency, or instrumentality, or other
legal entity.
(12) "Proceeds" means the following property:
(a) whatever is acquired on the sale, lease, license, exchange, or other disposition of
receivership property;
(b) whatever is collected on, or distributed on account of, receivership property;
(c) rights arising out of receivership property;
(d) to the extent of the value of receivership property, claims arising out of the loss,
nonconformity, or interference with the use of, defects or infringement of rights in, or damage
to the property; or
(e) to the extent of the value of receivership property and to the extent payable to the
owner or mortgagee, insurance payable by reason of the loss or nonconformity of, defects or
infringement of rights in, or damage to the property.
(13) "Property" means all of a person's right, title, and interest, both legal and
equitable, in real and personal property, tangible and intangible, wherever located and however
acquired. The term includes proceeds, products, offspring, rents, or profits of or from the
property.
(14) "Receiver" means a person appointed by the court as the court's agent, and subject
to the court's direction, to take possession of, manage, and, if authorized by this chapter or
court order, transfer, sell, lease, license, exchange, collect, or otherwise dispose of receivership
property.
(15) "Receivership" means a proceeding in which a receiver is appointed.
(16) "Receivership property" means the property of an owner that is described in the
order appointing a receiver or a subsequent order. The term includes any proceeds, products,
offspring, rents, or profits of or from the property.
(17) "Record" means, when used as a noun, information that is inscribed on a tangible
medium or that is stored on an electronic or other medium and is retrievable in perceivable
form.
(18) "Rents" means:
(a) sums payable for the right to possess or occupy, or for the actual possession or
occupation of, real property of another person;
(b) sums payable to a mortgagor under a policy of rental-interruption insurance
covering real property;
(c) claims arising out of a default in the payment of sums payable for the right to
possess or occupy real property of another person;
(d) sums payable to terminate an agreement to possess or occupy real property of
another person;
(e) sums payable to a mortgagor for payment or reimbursement of expenses incurred in
owning, operating, and maintaining real property or constructing or installing improvements on
real property; or
(f) other sums payable under an agreement relating to the real property of another
person which constitute rents under law of the state other than this chapter.
(19) "Secured obligation" means an obligation the payment or performance of which is
secured by a security agreement.
(20) "Security agreement" means an agreement that creates or provides for a lien.
(21) "Sign" means, with present intent to authenticate or adopt a record:
(a) to execute or adopt a tangible symbol; or
(b) to attach to or logically associate with the record an electronic sound, symbol, or
process.
Section 3. Section 
78B-21-103
 is enacted to read:
 78B-21-103.
Notice and opportunity for a hearing.
(1) Except as otherwise provided in Subsection (2), the court may issue an order under
this chapter only after notice and opportunity for a hearing, as appropriate in the circumstances.
(2) The court may issue an order under this chapter:
(a) without prior notice if the circumstances require issuance of an order before notice
is given;
(b) after notice and without a prior hearing if the circumstances require issuance of an
order before a hearing is held; or
(c) after notice and without a hearing if no interested party timely requests a hearing.
Section 4. Section 
78B-21-104
 is enacted to read:
 78B-21-104.
Scope -- Exclusions.
(1) Except as otherwise provided in Subsection (2) or (3), this chapter applies to a
receivership for an interest in real property and any personal property related to or used in
operating the real property.
(2) This chapter does not apply to a receivership for an interest in real property
improved by one to four dwelling units unless:
(a) the interest is used for agricultural, commercial, industrial, or mineral-extraction
purposes, other than incidental uses by an owner occupying the property as the owner's primary
residence;
(b) the interest secures an obligation incurred at a time when the property was used or
planned for use for agricultural, commercial, industrial, or mineral-extraction purposes;
(c) the owner planned or is planning to develop the property into one or more dwelling
units to be sold or leased in the ordinary course of the owner's business; or
(d) the owner is collecting or has the right to collect rents or other income from the
property from a person other than an affiliate of the owner.
(3) This chapter does not apply to a receivership authorized by law of this state other
than this chapter in which the receiver is a governmental unit or an individual acting in an
official capacity on behalf of the governmental unit.
(4) This chapter does not limit the authority of a court to appoint a receiver under other
state law.
(5) Unless displaced by a particular provision of this chapter, the principles of law and
equity supplement this chapter.
Section 5. Section 
78B-21-105
 is enacted to read:
 78B-21-105.
Power of court.
The court that appoints a receiver under this chapter has exclusive jurisdiction to direct
the receiver and determine any controversy related to the receivership or receivership property.
Section 6. Section 
78B-21-106
 is enacted to read:
 78B-21-106.
Appointment of receiver.
(1) The court may appoint a receiver:
(a) before judgment, to protect a party that demonstrates an apparent right, title, or
interest in real property that is the subject of the action, if the property or the property's
revenue-producing potential:
(i) is being subjected to or is in danger of waste, loss, dissipation, or impairment; or
(ii) has been or is about to be the subject of a voidable transaction;
(b) after judgment:
(i) to carry the judgment into effect; or
(ii) to preserve nonexempt real property pending appeal or when an execution has been
returned unsatisfied and the owner refuses to apply the property in satisfaction of the judgment;
(c) in an action in which a receiver for real property may be appointed on equitable
grounds; or
(d) during the time allowed for redemption, to preserve a property sold in an execution
or foreclosure sale and secure the property's rents to the person entitled to the property's rents.
(2) In connection with the foreclosure or other enforcement of a mortgage, a mortgagee
is entitled to appointment of a receiver for the mortgaged property if:
(a) appointment is necessary to protect the property from waste, loss, transfer,
dissipation, or impairment;
(b) the mortgagor agreed in a signed record to appointment of a receiver on default;
(c) the owner agreed, after default and in a signed record, to appointment of a receiver;
(d) the property and any other collateral held by the mortgagee are not sufficient to
satisfy the secured obligation;
(e) the owner fails to turn over to the mortgagee proceeds or rents the mortgagee was
entitled to collect; or
(f) the holder of a subordinate lien obtains appointment of a receiver for the property.
(3) (a) The court may condition appointment of a receiver without prior notice under
Subsection 
78B-21-103
(2)(a) or without a prior hearing under Subsection 
78B-21-103
(2)(b) on
the giving of security by the person seeking the appointment for the payment of damages,
reasonable attorney fees, and costs incurred or suffered by any person if the court later
concludes that the appointment was not justified.
(b) If the court later concludes that the appointment described in Subsection (3)(a) was
justified, the court shall release the security.
Section 7. Section 
78B-21-107
 is enacted to read:
 78B-21-107.
Disqualification from appointment as receiver -- Disclosure of
interest.
(1) The court may not appoint a person as receiver unless the person submits to the
court a statement under penalty of perjury that the person is not disqualified.
(2) Except as otherwise provided in Subsection (3), a person is disqualified from
appointment as receiver if the person:
(a) is an affiliate of a party;
(b) has an interest materially adverse to an interest of a party;
(c) has a material financial interest in the outcome of the action, other than the
compensation the court may allow the receiver;
(d) has a debtor-creditor relationship with a party; or
(e) holds an equity interest in a party, other than a noncontrolling interest in a
publicly-traded company.
(3) A person is not disqualified from appointment as receiver solely because the
person:
(a) was appointed receiver or is owed compensation in an unrelated matter involving a
party or was engaged by a party in a matter unrelated to the receivership;
(b) is an individual obligated to a party on a debt that is not in default and was incurred
primarily for personal, family, or household purposes; or
(c) maintains with a party a deposit account as defined in Section 
70A-9a-102
.
(4) A person seeking appointment of a receiver may nominate a person to serve as
receiver, but the court is not bound by the nomination.
Section 8. Section 
78B-21-108
 is enacted to read:
 78B-21-108.
Receiver's bond -- Alternative security.
(1) Except as otherwise provided in Subsection (1)(b), a receiver shall post with the
court a bond that:
(a) is conditioned on the faithful discharge of the receiver's duties;
(b) has one or more sureties approved by the court;
(c) is in an amount the court specifies; and
(d) is effective as of the date of the receiver's appointment.
(2) (a) The court may approve the posting by a receiver with the court of alternative
security, such as a letter of credit or deposit of funds.
(b) The receiver may not use receivership property as alternative security.
(c) Interest that accrues on deposited funds must be paid to the receiver on the
receiver's discharge.
(3) The court may authorize a receiver to act before the receiver posts the bond or
alternative security required by this section.
(4) A claim against a receiver's bond or alternative security must be made not later than
one year after the date the receiver is discharged.
Section 9. Section 
78B-21-109
 is enacted to read:
 78B-21-109.
Status of receiver as lien creditor.
On appointment of a receiver, the receiver has the status of a lien creditor under:
(1) Title 70A, Chapter 9a, Uniform Commercial Code - Secured Transactions, as to
receivership property that is personal property or fixtures; and
(2) Title 57, Chapter 9, Marketable Record Title, as to receivership property that is real
property.
Section 10. Section 
78B-21-110
 is enacted to read:
 78B-21-110.
Security agreement covering after-acquired property.
Except as otherwise provided by law of this state other than this chapter, property that a
receiver or owner acquires after appointment of the receiver is subject to a security agreement
entered into before the appointment to the same extent as if the court had not appointed the
receiver.
Section 11. Section 
78B-21-111
 is enacted to read:
 78B-21-111.
Collection and turnover of receivership property.
(1) Unless the court orders otherwise, on demand by a receiver:
(a) a person that owes a debt that is receivership property and is matured or payable on
demand or on order shall pay the debt to or on the order of the receiver, except to the extent the
debt is subject to setoff or recoupment; and
(b) subject to Subsection (3), a person that has possession, custody, or control of
receivership property shall turn the property over to the receiver.
(2) A person that has notice of the appointment of a receiver and owes a debt that is
receivership property may not satisfy the debt by payment to the owner.
(3) If a creditor has possession, custody, or control of receivership property and the
validity, perfection, or priority of the creditor's lien on the property depends on the creditor's
possession, custody, or control, the creditor may retain possession, custody, or control until the
court orders adequate protection of the creditor's lien.
(4) Unless a bona fide dispute exists about a receiver's right to possession, custody, or
control of receivership property, the court may sanction as civil contempt a person's failure to
turn the property over when required by this section.
Section 12. Section 
78B-21-112
 is enacted to read:
 78B-21-112.
Powers and duties of receiver.
(1) Except as limited by court order or law of this state other than this chapter, a
receiver may:
(a) collect, control, manage, conserve, and protect receivership property;
(b) operate a business constituting receivership property, including preservation, use,
sale, lease, license, exchange, collection, or disposition of the property in the ordinary course of
business;
(c) in the ordinary course of business, incur unsecured debt and pay expenses
incidental to the receiver's preservation, use, sale, lease, license, exchange, collection, or
disposition of receivership property;
(d) assert a right, claim, cause of action, or defense of the owner that relates to
receivership property;
(e) seek and obtain instruction from the court concerning receivership property,
exercise of the receiver's powers, and performance of the receiver's duties;
(f) on subpoena, compel a person to submit to examination under oath, or to produce
and permit inspection and copying of designated records or tangible things, with respect to
receivership property or any other matter that may affect administration of the receivership;
(g) engage a professional as provided in Section 
78B-21-115
;
(h) apply to a court of another state for appointment as ancillary receiver with respect
to receivership property located in that state; and
(i) exercise any power conferred by court order, this chapter, or a law of the state other
than this chapter.
(2) With court approval, a receiver may:
(a) incur debt for the use or benefit of receivership property other than in the ordinary
course of business;
(b) make improvements to receivership property;
(c) use or transfer receivership property other than in the ordinary course of business as
provided in Section 
78B-21-116
;
(d) adopt or reject an executory contract of the owner as provided in Section
78B-21-117
;
(e) pay compensation to the receiver as provided in Section 
78B-21-121
, and to each
professional engaged by the receiver as provided in Section 
78B-21-115
;
(f) recommend allowance or disallowance of a claim of a creditor as provided in
Section 
78B-21-120
; and
(g) make a distribution of receivership property as provided in Section 
78B-21-120
.
(3) A receiver shall:
(a) prepare and retain appropriate business records, including a record of each receipt,
disbursement, and disposition of receivership property;
(b) account for receivership property, including the proceeds of a sale, lease, license,
exchange, collection, or other disposition of the property;
(c) file with the county recorder of the county where the property is located a copy of
the order appointing the receiver and, if a legal description of the real property is not included
in the order, the legal description;
(d) disclose to the court any fact arising during the receivership that would disqualify
the receiver under Section 
78B-21-107
; and
(e) perform any duty imposed by court order, this chapter, or a law of the state other
than this chapter.
(4) The powers and duties of a receiver may be expanded, modified, or limited by court
order.
Section 13. Section 
78B-21-113
 is enacted to read:
 78B-21-113.
Duties of owner.
(1) An owner shall:
(a) assist and cooperate with the receiver in the administration of the receivership and
the discharge of the receiver's duties;
(b) preserve and turn over to the receiver all receivership property in the owner's
possession, custody, or control;
(c) identify all records and other information relating to the receivership property,
including a password, authorization, or other information needed to obtain or maintain access
to or control of the receivership property, and make available to the receiver the records and
information in the owner's possession, custody, or control;
(d) on subpoena, submit to examination under oath by the receiver concerning the acts,
conduct, property, liabilities, and financial condition of the owner or any matter relating to the
receivership property or the receivership; and
(e) perform any duty imposed by court order, this chapter, or a law of the state other
than this chapter.
(2) If an owner is a person other than an individual, this section applies to each officer,
director, manager, member, partner, trustee, or other person exercising or having the power to
exercise control over the affairs of the owner.
(3) If a person knowingly fails to perform a duty imposed by this section, the court
may:
(a) award the receiver actual damages caused by the person's failure, reasonable
attorney fees, and costs; and
(b) sanction the failure as civil contempt.
Section 14. Section 
78B-21-114
 is enacted to read:
 78B-21-114.
Stay -- Injunction.
(1) Except as otherwise provided in Subsection (4) or ordered by the court, an order
appointing a receiver operates as a stay, applicable to all persons, of an act, action, or
proceeding:
(a) to obtain possession of, exercise control over, or enforce a judgment against
receivership property; and
(b) to enforce a lien against receivership property to the extent the lien secures a claim
against the owner that arose before entry of the order.
(2) Except as otherwise provided in Subsection (4), the court may enjoin an act, action,
or proceeding against or relating to receivership property if the injunction is necessary to
protect the property or facilitate administration of the receivership.
(3) A person whose act, action, or proceeding is stayed or enjoined under this section
may apply to the court for relief from the stay or injunction for cause.
(4) An order under Subsection (1) or (2) does not operate as a stay or injunction of:
(a) an act, action, or proceeding to foreclose or otherwise enforce a mortgage by the
person seeking appointment of the receiver;
(b) an act, action, or proceeding to perfect, or maintain or continue the perfection of, an
interest in receivership property;
(c) commencement or continuation of a criminal proceeding;
(d) commencement or continuation of an action or proceeding, or enforcement of a
judgment other than a money judgment in an action or proceeding, by a governmental unit to
enforce the governmental unit's police or regulatory power; or
(e) establishment by a governmental unit of a tax liability against the owner or
receivership property or an appeal of the liability.
(5) The court may void an act that violates a stay or injunction under this section.
(6) If a person knowingly violates a stay or injunction under this section, the court may:
(a) award actual damages caused by the violation, reasonable attorney fees, and costs;
and
(b) sanction the violation as civil contempt.
Section 15. Section 
78B-21-115
 is enacted to read:
 78B-21-115.
Engagement and compensation of professional.
(1) (a) With court approval, a receiver may engage an attorney, accountant, appraiser,
auctioneer, broker, or other professional to assist the receiver in performing a duty or
exercising a power of the receiver.
(b) The receiver shall disclose to the court:
(i) the identity and qualifications of the professional;
(ii) the scope and nature of the proposed engagement;
(iii) any potential conflict of interest; and
(iv) the proposed compensation.
(2) (a) A person is not disqualified from engagement under this section solely because
of the person's engagement by, representation of, or other relationship with the receiver, a
creditor, or a party.
(b) This chapter does not prevent the receiver from serving in the receivership as an
attorney, accountant, auctioneer, or broker when authorized by law.
(3) (a) A receiver or professional engaged under Subsection (1) shall file with the court
an itemized statement of the time spent, work performed, and billing rate of each person that
performed the work and an itemized list of expenses.
(b) The receiver shall pay the amount approved by the court.
Section 16. Section 
78B-21-116
 is enacted to read:
 78B-21-116.
Use or transfer of receivership property not in ordinary course of
business.
(1) As used in this section, "good faith" means honesty in fact and the observance of
reasonable commercial standards of fair dealing.
(2) With court approval, a receiver may use receivership property other than in the
ordinary course of business.
(3) (a) With court approval, a receiver may transfer receivership property other than in
the ordinary course of business by sale, lease, license, exchange, or other disposition.
(b) Unless the agreement of sale provides otherwise, a sale under this section is:
(i) free and clear of a lien of the person that obtained appointment of the receiver, any
subordinate lien, and any right of redemption; and
(ii) subject to a senior lien.
(4) A lien on receivership property that is extinguished by a transfer under Subsection
(3) attaches to the proceeds of the transfer with the same validity, perfection, and priority the
lien had on the property immediately before the transfer, even if the proceeds are not sufficient
to satisfy all obligations secured by the lien.
(5) (a) A transfer under Subsection (3) may occur by means other than a public auction
sale.
(b) A creditor holding a valid lien on the property to be transferred may purchase the
property and offset against the purchase price part or all of the allowed amount secured by the
lien, if the creditor tenders funds sufficient to satisfy in full the reasonable expenses of transfer
and the obligation secured by any senior lien extinguished by the transfer.
(6) A reversal or modification of an order approving a transfer under Subsection (3)
does not affect the validity of the transfer to a person that acquired the property in good faith or
revive against the person any lien extinguished by the transfer, whether the person knew before
the transfer of the request for reversal or modification, unless the court stayed the order before
the transfer.
Section 17. Section 
78B-21-117
 is enacted to read:
 78B-21-117.
Executory contract.
(1) As used in this section, "timeshare interest" means the same as that term is defined
in Section 
57-19-2
.
(2) (a) Except as otherwise provided in Subsection (8), with court approval, a receiver
may adopt or reject an executory contract of the owner relating to receivership property.
(b) The court may condition the receiver's adoption and continued performance of the
contract on terms appropriate under the circumstances.
(c) If the receiver does not request court approval to adopt or reject the executory
contract within a reasonable time after the receiver's appointment, the receiver is deemed to
have rejected the executory contract.
(3) A receiver's performance of an executory contract before court approval under
Subsection (2) of the executory contract's adoption or rejection is not an adoption of the
executory contract and does not preclude the receiver from seeking approval to reject the
executory contract.
(4) A provision in an executory contract that requires or permits a forfeiture,
modification, or termination of the executory contract because of the appointment of a receiver
or the financial condition of the owner does not affect a receiver's power under Subsection (2)
to adopt the executory contract.
(5) (a) A receiver's right to possess or use receivership property pursuant to an
executory contract terminates on rejection of the executory contract under Subsection (2).
(b) Rejection is a breach of the executory contract effective immediately before
appointment of the receiver.
(c) A claim for damages for rejection of the executory contract must be submitted by
the later of:
(i) the time set for submitting a claim in the receivership; or
(ii) 30 days after the court approves the rejection.
(6) If at the time a receiver is appointed, the owner has the right to assign an executory
contract relating to receivership property under law of this state other than this chapter, the
receiver may assign the executory contract with court approval.
(7) If a receiver rejects an executory contract for the sale of receivership property that
is real property in possession of the purchaser or a real-property timeshare interest under
Subsection (2), the purchaser may:
(a) treat the rejection as a termination of the executory contract, and in that case the
purchaser has a lien on the property for the recovery of any part of the purchase price the
purchaser paid; or
(b) retain the purchaser's right to possession under the executory contract, and in that
case the purchaser shall continue to perform all obligations arising under the executory contract
and may offset any damages caused by nonperformance of an obligation of the owner after the
date of the rejection, but the purchaser has no right or claim against other receivership property
or the receiver on account of the damages.
(8) A receiver may not reject an unexpired lease of real property under which the
owner is the landlord if:
(a) the tenant occupies the leased premises as the tenant's primary residence;
(b) the receiver was appointed at the request of a person other than a mortgagee; or
(c) the receiver was appointed at the request of a mortgagee and:
(i) the lease is superior to the lien of the mortgage;
(ii) the tenant has an enforceable agreement with the mortgagee or the holder of a
senior lien under which the tenant's occupancy will not be disturbed as long as the tenant
performs the tenant's obligations under the lease;
(iii) the mortgagee has consented to the lease, either in a signed record or by the
mortgagee's failure to timely object that the lease violated the mortgage; or
(iv) the terms of the lease were commercially reasonable at the time the lease was
agreed to and the tenant did not know or have reason to know that the lease violated the
mortgage.
Section 18. Section 
78B-21-118
 is enacted to read:
 78B-21-118.
Defenses and immunities of receiver.
(1) A receiver is entitled to all defenses and immunities provided by law of this state
other than this chapter for an act or omission within the scope of the receiver's appointment.
(2) A receiver may be sued personally for an act or omission in administering
receivership property only with approval of the court that appointed the receiver.
Section 19. Section 
78B-21-119
 is enacted to read:
 78B-21-119.
Interim report of receiver.
A receiver may file, or if ordered by the court shall file, an interim report that includes:
(1) the activities of the receiver since appointment or a previous report;
(2) receipts and disbursements, including a payment made or proposed to be made to a
professional engaged by the receiver;
(3) receipts and dispositions of receivership property;
(4) fees and expenses of the receiver and, if not filed separately, a request for approval
of payment of the fees and expenses; and
(5) any other information required by the court.
Section 20. Section 
78B-21-120
 is enacted to read:
 78B-21-120.
Notice of appointment -- Claim against receivership -- Distribution to
creditors.
(1) Except as otherwise provided in Subsection (6), a receiver shall give notice of
appointment of the receiver to creditors of the owner by:
(a) deposit for delivery through first-class mail or other commercially reasonable
delivery method to the last known address of each creditor; and
(b) publication as directed by the court.
(2) (a) Except as otherwise provided in Subsection (6), the notice required by
Subsection (1) must specify the date by which each creditor holding a claim against the owner
that arose before appointment of the receiver must submit the claim to the receiver.
(b) The date specified must be at least 90 days after the later of the notice under
Subsection (1)(a) or the last publication under Subsection (1)(b).
(c) The court may extend the period for submitting the claim.
(d) Unless the court orders otherwise, a claim that is not submitted timely is not
entitled to a distribution from the receivership.
(3) A claim submitted by a creditor under this section must:
(a) state the name and address of the creditor;
(b) state the amount and basis of the claim;
(c) identify any property securing the claim;
(d) be signed by the creditor under penalty of perjury; and
(e) include a copy of any record on which the claim is based.
(4) An assignment by a creditor of a claim against the owner is effective against the
receiver only if the assignee gives timely notice of the assignment to the receiver in a signed
record.
(5) (a) At any time before entry of an order approving a receiver's final report, the
receiver may file with the court an objection to a claim of a creditor, stating the basis for the
objection.
(b) The court shall allow or disallow the claim according to law of this state other than
this chapter.
(6) If the court concludes that receivership property is likely to be insufficient to satisfy
claims of each creditor holding a perfected lien on the property, the court may order that:
(a) the receiver need not give notice under Subsection (1) of the appointment to all
creditors of the owner, but only such creditors as the court directs; and
(b) unsecured creditors need not submit claims under this section.
(7) Subject to Section 
78B-21-121
:
(a) a distribution of receivership property to a creditor holding a perfected lien on the
property must be made in accordance with the creditor's priority under law of this state other
than this chapter; and
(b) a distribution of receivership property to a creditor with an allowed unsecured
claim must be made as the court directs according to law of this state other than this chapter.
Section 21. Section 
78B-21-121
 is enacted to read:
 78B-21-121.
Fees and expenses.
(1) The court may award a receiver from receivership property the reasonable and
necessary fees and expenses of performing the duties of the receiver and exercising the powers
of the receiver.
(2) The court may order one or more of the following to pay the reasonable and
necessary fees and expenses of the receivership, including reasonable attorney fees and costs:
(a) a person that requested the appointment of the receiver, if the receivership does not
produce sufficient funds to pay the fees and expenses; or
(b) a person whose conduct justified or would have justified the appointment of the
receiver under Subsection 
78B-21-106
(1)(a).
Section 22. Section 
78B-21-122
 is enacted to read:
 78B-21-122.
Removal of receiver -- Replacement -- Termination of receivership.
(1) The court may remove a receiver for cause.
(2) The court shall replace a receiver that dies, resigns, or is removed.
(3) If the court finds that a receiver that resigns or is removed, or the representative of a
receiver that is deceased, has accounted fully for and turned over to the successor receiver all
receivership property and has filed a report of all receipts and disbursements during the service
of the replaced receiver, the replaced receiver is discharged.
(4) (a) The court may discharge a receiver and terminate the court's administration of
the receivership property if the court finds that appointment of the receiver was improvident or
that the circumstances no longer warrant continuation of the receivership.
(b) If the court finds that the appointment was sought wrongfully or in bad faith, the
court may assess against the person that sought the appointment:
(i) the fees and expenses of the receivership, including reasonable attorney fees and
costs; and
(ii) actual damages caused by the appointment, including reasonable attorney fees and
costs.
Section 23. Section 
78B-21-123
 is enacted to read:
 78B-21-123.
Final report of receiver -- Discharge.
(1) On completion of a receiver's duties, the receiver shall file a final report including:
(a) a description of the activities of the receiver in the conduct of the receivership;
(b) a list of receivership property at the commencement of the receivership and any
receivership property received during the receivership;
(c) a list of disbursements, including payments to professionals engaged by the
receiver;
(d) a list of dispositions of receivership property;
(e) a list of distributions made or proposed to be made from the receivership for
creditor claims;
(f) if not filed separately, a request for approval of the payment of fees and expenses of
the receiver; and
(g) any other information required by the court.
(2) If the court approves a final report filed under Subsection (1) and the receiver
distributes all receivership property, the receiver is discharged.
Section 24. Section 
78B-21-124
 is enacted to read:
 78B-21-124.
Receivership in another state -- Ancillary proceeding.
(1) The court may appoint a receiver appointed in another state, or that person's
nominee, as an ancillary receiver with respect to property located in this state or subject to the
jurisdiction of the court for which a receiver could be appointed under this chapter, if:
(a) the person or nominee would be eligible to serve as receiver under Section
78B-21-107
; and
(b) the appointment furthers the person's possession, custody, control, or disposition of
property subject to the receivership in the other state.
(2) The court may issue an order that gives effect to an order entered in another state
appointing or directing a receiver.
(3) Unless the court orders otherwise, an ancillary receiver appointed under Subsection
(1) has the rights, powers, and duties of a receiver appointed under this chapter.
Section 25. Section 
78B-21-125
 is enacted to read:
 78B-21-125.
Effect of enforcement by mortgagee.
(1) A request by a mortgagee for appointment of a receiver, the appointment of a
receiver, or application by a mortgagee of receivership property or proceeds to the secured
obligation does not:
(a) make the mortgagee a mortgagee in possession of the real property;
(b) make the mortgagee an agent of the owner;
(c) constitute an election of remedies that precludes a later action to enforce the
secured obligation;
(d) make the secured obligation unenforceable;
(e) limit any right available to the mortgagee with respect to the secured obligation;
(f) constitute an action within the meaning of Section 
78B-6-901
; or
(g) except as otherwise provided in Subsection (2), bar a deficiency judgment pursuant
to law of this state other than this chapter governing or relating to a deficiency judgment.
(2) If a receiver sells receivership property that pursuant to Subsection 
78B-21-116
(3)
is free and clear of a lien, the ability of a creditor to enforce an obligation that had been secured
by the lien is subject to law of the state other than this chapter relating to a deficiency
judgment.
Section 26. Section 
78B-21-126
 is enacted to read:
 78B-21-126.
Uniformity of application and construction.
In applying and construing this uniform act, consideration shall be given to the need to
promote uniformity of the law with respect to the law's subject matter among states that enact
it.
Section 27. Section 
78B-21-127
 is enacted to read:
 78B-21-127.
Relation to Electronic Signatures in Global and National Commerce
Act.
This chapter modifies, limits, or supersedes the Electronic Signatures in Global and
National Commerce Act, 15 U.S.C. Sec. 7001 et seq., but does not modify, limit, or supersede
Section 101(c) of that act, 15 U.S.C. Sec. 7001(c), or authorize electronic delivery of any of the
notices described in Section 103(b) of that act, 15 U.S.C. Sec. 7003(b).
Section 28. Section 
78B-21-128
 is enacted to read:
 78B-21-128.
Transition.
This chapter does not apply to a receivership for which the receiver was appointed
before May 9, 2017.
Section 29. Section 
78B-21-129
 is enacted to read:
 78B-21-129.
Finality of orders.
A court order that is entered pursuant to this chapter and that resolves a discrete factual
dispute or legal issue is a final appealable order within the meaning of Utah Rules of Civil
Procedure, Rules 54(a), unless expressly stated otherwise in the court order.
Legislative Review Note
Office of Legislative Research and General Counsel