This opinion is subject to revision before
publication in the Pacific Reporter.
IN THE UTAH COURT OF APPEALS
Kaziah May Hancock and Cindy
(For Official Publication)
Case No. 20030984-CA
F I L E D
(July 8, 2005)
The True and Living Church of
2005 UT App 314
Jesus Christ of Saints of the
Last Days, James D. Harmston,
William B. Lithgow, Keith
Larson, Daniel (Dan) Simmons,
Kay Crabtree, Jeff Hanks, Bart
Mulstrom, John Harper, and
John Does Nos. 1-5,
Sixth District, Manti Department, 980600126
The Honorable David L. Mower
F. Kevin Bond, Salt Lake City, for Appellants
Don S. Redd, Layton, and Clark R. Nielsen, Salt Lake
City, for Appellees
Before Judges Billings, Greenwood, and Thorne.
Kaziah May Hancock and Cindy Stewart (collectively
Plaintiffs) sued the True and Living Church of Jesus Christ of
Saints of the Last Days (the Church) and various associated
individuals (collectively Defendants), alleging that they had
both given substantial sums of money to the Church and had not
received promised benefits in return. These interlocutory cross
appeals arise from the trial court's rulings partially granting
and partially denying Defendants' motion to dismiss all of
Plaintiffs' claims, and denying Plaintiffs' motion for leave to
file their Third Amended Complaint. We reverse the trial court's
order denying leave to amend and remand this matter for further
The Church is a religious group founded and led by defendant
James D. Harmston in Sanpete County, Utah. Plaintiffs are Utah
residents who became associated with the Church in the mid-1990s.
Soon thereafter, both Plaintiffs were convinced to give
substantial sums of money to the Church in exchange for certain
Hancock joined the Church in 1993. In 1996, she met with
Church leaders to establish a "stewardship" for her in exchange
for her contributions of time and money to the Church. The
Church promised her that if she "consecrated" her money to the
Church, the Church would provide her with property and support.
The Church also promised certain religious benefits, including a
face to face meeting with Jesus Christ. Hancock received none of
the promised benefits and was asked to leave the Church in 1997.
Stewart joined the Church in 1995. At the Church's
insistence, Stewart liquidated her retirement savings and turned
the funds over to the Church. The Church promised full repayment
of these funds plus all costs and penalties for early withdrawal.
Stewart was never repaid, and in 1997 she was excommunicated from
In 1998, Plaintiffs sued the Church, Harmston, and various
Church leaders. Upon Defendants' motion, the trial court
dismissed several of Plaintiffs' claims for failure to plead them
with sufficient particularity. Plaintiffs filed an Amended
Complaint and the matter proceeded to a jury trial in January
2002. The jury rendered a verdict in favor of Plaintiffs, but
the trial court granted Defendants' motion for new trial on the
grounds that the information presented at trial was insufficient
to allow proper apportionment of the damages between Defendants.
After the grant of a new trial, Plaintiffs requested leave
to file a Second Amended Complaint. Defendants filed a motion to
dismiss the Second Amended Complaint. In July 2003, the trial
court allowed the second amendment without ruling on the motion
to dismiss. In August 2003, the trial court partially granted
Defendants' motion to dismiss, dismissing all of Plaintiffs'
claims except for breach of contract and unjust enrichment. The
dismissed claims included fraud, constructive fraud, negligent
1In light of the procedural posture of this case, we
determine that the most appropriate source of background facts
for this opinion is Plaintiffs' Second Amended Complaint. We
recognize that these are only allegations and that they may be
disputed between the parties.
misrepresentation, fraudulent conversion, racketeering, and
intentional infliction of emotional distress.
Plaintiffs moved for leave to file their Third Amended
Complaint. In October 2003, the trial court denied this motion,
finding that the motion was untimely, that all necessary parties
were not joined as defendants, and that the relief sought in the
Third Amended Complaint would require the court to impermissibly
judge the Church's religious doctrines. Upon the parties'
stipulation, the trial court certified its August partial
dismissal order and October amendment order as final appealable
orders. The parties now bring these interlocutory cross appeals
challenging the trial court's orders.
ISSUE AND STANDARD OF REVIEW
Plaintiffs appeal the trial court's denial of their motion
for leave to file a Third Amended Complaint. "Whether to grant
or deny a motion to amend is a matter within the broad discretion
of the trial court and we will not disturb its ruling unless the
appealing party establishes an abuse of discretion resulting in
prejudice." Pride Stables v. Homestead Golf Club, Inc., 2003 UT
App 411,¶11, 82 P.3d 198 (quotations, citations, and alterations
omitted), cert. denied, 90 P.3d 1041 (Utah 2004).
We determine that the trial court exceeded its permitted
range of discretion when it denied Plaintiffs' motion for leave
to file their Third Amended Complaint. Because the Third Amended
Complaint differs substantially from the Second Amended Complaint
upon which the trial court based its dismissal order, we decline
to address the parties' substantive arguments regarding that
order except as they may be implicated by our amendment analysis.
Rather, we remand this matter to the trial court with
instructions to accept Plaintiffs' Third Amended Complaint and
conduct further proceedings consistent with this opinion.
1. The Trial Court Abused its Discretion when it Denied the
Plaintiffs Leave to File their Third Amended Complaint
"Whether to grant or deny a motion to amend is a matter
within the broad discretion of the trial court and we will not
disturb its ruling unless the appealing party establishes an
abuse of discretion resulting in prejudice." Pride Stables v.
Homestead Golf Club, Inc., 2003 UT App 411,¶11, 82 P.3d 198
(quotations, citations, alterations omitted), cert. denied, 90
P.3d 1041 (Utah 2004). It is well established that amendments
are to be allowed "liberally so as to allow parties to have their
claims fully adjudicated." Nunez v. Albo, 2002 UT App 247,¶19,
53 P.3d 2 (quotations and citations omitted). However, "a party
may not amend a complaint to add a claim that is legally
insufficient or futile." Smith v. Grand Canyon Expeditions Co.,
2003 UT 57,¶33, 84 P.3d 1154.
Here, the trial court articulated three reasons for denying
Plaintiffs' final motion for leave to amend: untimeliness, the
court's inability to adjudicate the Church's religious doctrines,
and lack of indispensable parties. We examine each of these
rationales and determine them to be insufficient to warrant
denial of leave to amend.
A. Plaintiffs' Motion was Timely
We disagree with the trial court's conclusion that
Plaintiffs' motion was untimely. Although it was filed over five
years after the initiation of this lawsuit, the circumstances of
this case clearly render Plaintiffs' motion timely.
Plaintiffs' basic claims had not only survived one motion
for dismissal in 1999, but had supported a jury verdict in their
favor in 2002. Plaintiffs had no reason to believe that their
existing claims might be deficient until the trial court changed
its mind and partially dismissed their Second Amended Complaint
in August 2003. Plaintiffs filed their motion to amend and Third
Amended Complaint no later than September 2003.
Under these circumstances, Plaintiffs acted to amend
promptly upon becoming aware of problems with their existing
complaint. The trial court's decision that Plaintiffs' motion to
amend was untimely is not supported in the record and exceeded
the bounds of its discretion.
B. No Adjudication of Church Doctrine Necessary to Grant Relief
The trial court's second reason for denying Plaintiffs'
motion to amend was that the Third Amended Complaint would
require the fact finder to impermissibly judge the Church's
religious doctrines. Civil actions that "require the courts to
review and interpret church law, policies, or practices in the
determination of the[ir] claims are barred by the First Amendment
under the entanglement doctrine." Franco v. The Church of Jesus
Christ of Latter-day Saints, 2001 UT 25,¶15, 21 P.3d 198.
Here, Plaintiffs are alleging a variety of causes of action
arising from the same set of decidedly secular facts. Both of
the Plaintiffs assert that they gave money to the Church in
exchange for promises of future earthly benefits. Hancock
alleges that she was promised land and support; Stewart alleges
that she was promised repayment of her retirement funds including
the costs and penalties of early withdrawal.
"[C]hurches must have 'power to decide for themselves, free
from state interference, matters of church government as well as
those of faith and doctrine.'" Id. (quoting Kedroff v. St.
Nicholas Cathedral, 344 U.S. 94, 116 (1952)). But here,
Plaintiffs' claims do not necessarily implicate the Church's
government, faith, or doctrine.2 Rather, each of the claims
stated in the Third Amended Complaint is supported by allegations
of secular activity potentially amounting to violations of
generally applicable civil law. Cf. Employment Div. v. Smith,
494 U.S. 872 (1990) (upholding criminal laws of general
applicability even though those laws interfere with sincerely
held religious beliefs). Accordingly, the trial court erred when
it relied on the entanglement doctrine to deny Plaintiffs' motion
C. Jordan Not an Indispensable Party
The trial court's final justification for denying
Plaintiffs' motion to amend was that Douglas Jordan, Hancock's
husband at the time of the events giving rise to this suit, was
an indispensable party to the suit. "Under Rule 19 of the Utah
Rules of Civil Procedure, a party must be joined if that party is
necessary and it is feasible to join that party." Smith v.
Osguthorpe, 2002 UT App 361,¶47, 58 P.3d 854.
The trial court's decision implies a finding that Jordan is
a necessary party to the suit. Such a finding is unsupported by
the Third Amended Complaint, which alleges no facts that would
place Jordan within the category of an indispensable party. Even
if there are factual disputes about Jordan's role in this matter,
it is inappropriate for a trial court to resolve those factual
disputes in the course of evaluating a motion to amend. See Timm
v. Dewsnup, 921 P.2d 1381, 1389-90 (Utah 1996) (holding that a
trial court's denial of a motion to amend based on its own
factual determinations regarding the underlying evidence
constitutes an abuse of its discretion).
We conclude that Plaintiffs' motion to amend was timely
under the circumstances, that the Third Amended Complaint's
allegations do not necessarily require the adjudication of
religious doctrine, and that the trial court abused its
discretion in finding Jordan to be an indispensable party to this
matter. Accordingly, we reverse the trial court's denial of
2This is not to say that every allegation in the Third
Amended Complaint avoids conflict with the First Amendment. For
example, Plaintiffs' allegation that Hancock "never met Christ
face to face as promised" appears to be an entirely religious
matter beyond the courts' ability to adjudicate.
Plaintiffs' motion to amend and remand this matter for further
proceedings under the Third Amended Complaint.
2. Mootness of Other Issues in Light of the Third
The parties raise various other issues on appeal, but these
issues all pertain to the trial court's treatment of Plaintiffs'
Second Amended Complaint. The Third Amended Complaint, which is
now the operative pleading in this matter, contains multiple new
factual allegations and, potentially, other changes. This court
will not parse the differences between the two complaints to
determine which, if any, of the arguments raised by the parties
remain viable in light of the amendment. Rather, particularly
given the interlocutory nature of this appeal, it is appropriate
that any further litigation over the claims asserted in the Third
Amended Complaint take place first at the trial court level.
We conclude that the trial court abused its discretion when
it denied Plaintiffs leave to file their Third Amended Complaint.
Issues raised in this appeal but not addressed in our amendment
analysis are moot in light of the differences between the Second
Amended Complaint and the Third Amended Complaint. We reverse
the trial court's amendment order and remand this matter for
further proceedings consistent with this opinion.
William A. Thorne Jr., Judge
Judith M. Billings,
Pamela T. Greenwood, Judge