McHUGH, Judge:
¶ 1 Chris Hogan appeals from the trial court's denial of his motion for attorney fees and its refusal to hold Utah Telecommunication Open Infrastructure Agency (UTOPIA) in contempt. We affirm in part, and reverse and remand in part.
¶ 2 UTOPIA and Hogan entered into a two-year Agreement for Professional Services (the Agreement) on May 12, 2009.
¶ 3 In a letter responding to the settlement proposal, UTOPIA described Hogan's settlement conditions as "extravagant demands" and stated, "What Mr. Hogan attempts in proposing this extravagant course, at least as he frames the matter and perceives UTOPIA's interests and vulnerabilities, go by the names of `blackmail' and `extortion.'" UTOPIA also stated its intent to enforce the Agreement's confidentiality provision. Hogan's next correspondence states that he did not intend to "extort or blackmail UTOPIA" but that if his "objectives" were not met, he would file a lawsuit to "protect the public trust by exposing what he believes is mismanagement." He further predicted that "[i]f the media, which has already been critical of UTOPIA, learns of the lawsuit, it will recommence its assault on UTOPIA."
¶ 4 On April 18, 2011, UTOPIA filed a complaint seeking to permanently enjoin "Hogan from disclosing any information obtained during the course of rendering services under the Agreement." In addition, UTOPIA requested a declaration that the Agreement would expire on May 13, 2011, and that UTOPIA had no obligation to renew the Agreement or to compensate Hogan beyond the expiration date. UTOPIA simultaneously filed an ex parte motion seeking a temporary restraining order and a preliminary injunction to prevent Hogan from releasing
¶ 5 Following an ex parte hearing on April 18, 2011, the trial court issued a temporary restraining order and an order sealing the record of the case and scheduled an evidentiary hearing to determine whether to issue a preliminary injunction. One day before the evidentiary hearing, Hogan filed a lawsuit against UTOPIA in federal court, which described Hogan's allegations of mismanagement. The trial court proceeded with the scheduled evidentiary hearing and declined to issue the preliminary injunction. In denying the injunction, the trial court stated, "It appears that all of the information that [Hogan]... threatened to disclose, is not prevented by this contractual provision," that it would be adverse to the public interest to enjoin Hogan from filing a claim, and that UTOPIA would be unlikely to prevail on the merits of its complaint. After declining to issue the preliminary injunction, the trial court set a subsequent hearing to determine whether to unseal the record. Prior to that scheduled hearing, the parties stipulated that the record could be unsealed. However, no order unsealing the record was entered at that time. On April 27, UTOPIA filed a motion to dismiss its complaint and to withdraw its motion to seal the record, which the trial court had previously granted. Meanwhile, Hogan filed a motion for $17,246 in attorney fees with a supporting affidavit. He also submitted a motion to strike UTOPIA's notice of dismissal in order to keep the attorney fee issue open.
¶ 6 On May 1, 2011, KSL.com published an article that quoted UTOPIA's response to Hogan's settlement offer in which UTOPIA had characterized Hogan's settlement demands as "extortion" and "blackmail." The article opened with the statement, "Chris Hogan ... is being accused of extortion in court documents...." The letter, which UTOPIA had submitted to the court as Exhibit E, remained under seal at the time, pursuant to the trial court's order. On May 8, 2011, Hogan filed a motion to seal Exhibit E, but to otherwise unseal the record. In support, Hogan attached an affidavit in which he claimed that UTOPIA had leaked sealed documents, including Exhibit E, to the author of the KSL.com article
¶ 7 Following a May 16, 2011 hearing, the trial court ordered that the entire record be unsealed, including Exhibit E. The trial court also struck from the record as immaterial the two paragraphs in Exhibit E relating to blackmail and extortion (the Stricken Language) under rule 10(h) of the Utah Rules of Civil Procedure.
¶ 8 Thereafter, at a June 13, 2011 hearing on the issues of contempt and attorney fees, Hogan argued that UTOPIA should be held in contempt because it had "unilaterally ... leaked" the Stricken Language, knowing that the record was sealed. UTOPIA asserted
¶ 9 Hogan next argued that he was entitled to attorney fees both because the complaint was brought without merit and in bad faith and because he had been wrongfully enjoined. The trial court declined to award Hogan attorney fees because "the inference... that the prevailing party is entitled to their attorney's fees is not merited." The trial court further ruled that the action was not frivolous or brought in bad faith because it was "an action based on contract." Hogan now appeals.
¶ 10 Hogan first claims that he is entitled to attorney fees under section 78B-5-825 of the Utah Code and under rule 65A of the Utah Rules of Civil Procedure. Generally, "`[w]hether attorney fees are recoverable in an action is a question of law, which we review for correctness.'" Anderson & Karrenberg v. Warnick, 2012 UT App 275, ¶ 8, 289 P.3d 600 (quoting Valcarce v. Fitzgerald, 961 P.2d 305, 315 (Utah 1998)). When reviewing a denial of fees under section 78B-5-825, "[t]he `without merit' determination is a question of law, and therefore we review it for correctness." Jeschke v. Willis, 811 P.2d 202, 203-04 (Utah Ct.App. 1991) (interpreting Utah Code Ann. § 78-27-56 (Michie Supp.1990) (current version at id. § 78B-5-825 (LexisNexis 2012))). "A finding of bad faith is a question of fact and is reviewed by this court under the `clearly erroneous' standard." Id. at 204.
¶ 11 Hogan next challenges the trial court's refusal to hold UTOPIA in contempt. "On review of both criminal and civil proceedings, we accept the trial court's findings of fact unless they are clearly erroneous." Von Hake v. Thomas, 759 P.2d 1162, 1172 (Utah 1988), superseded on other grounds as stated in State v. Hurst, 821 P.2d 467, 470 (Utah Ct.App.1991). UTOPIA argues that Hogan lacks standing to challenge the trial court's decision not to hold UTOPIA in contempt. Standing is a jurisdictional question, which "we have an `independent obligation' to resolve." Summer v. Summer, 2012 UT App 159, ¶ 12, 280 P.3d 451 (mem.) (quoting In re Adoption of Baby E.Z., 2011 UT 38, ¶ 36, 266 P.3d 702).
¶ 12 Hogan challenges the trial court's denial of his request for attorney fees under two separate theories. First, Hogan claims he is entitled to attorney fees under section 78B-5-825 of the Utah Code, alleging that UTOPIA's request for a preliminary injunction was frivolous and brought in bad faith. See Utah Code Ann. § 78B-5-825 (LexisNexis 2012). Hogan also contends that the trial court erred in denying him attorney fees incurred to defend against the preliminary injunction under rule 65A of the Utah Rules of Civil Procedure.
¶ 13 "[T]he court shall award reasonable attorney fees to a prevailing party if the court determines that the action or defense to the action was without merit and not brought or asserted in good faith."
¶ 15 Many of Hogan's arguments that UTOPIA's claim for specific performance lacked merit are focused on UTOPIA's alleged "purpose" of interfering with his right to file suit. While the "purpose" behind UTOPIA's action is relevant to whether UTOPIA acted in bad faith, it is not relevant to whether the action lacked merit. See Gallegos v. Lloyd, 2008 UT App 40, ¶ 15, 178 P.3d 922 ("A finding of bad faith must be based on at least one of the following three factors: `(i) The party lacked an honest belief in the propriety of the activities in question; (ii) the party intended to take unconscionable advantage of others; or (iii) the party intended to or acted with the knowledge that the activities in question would hinder, delay, or defraud others.'" (quoting Valcarce v. Fitzgerald, 961 P.2d 305, 316 (Utah 1998))).
¶ 16 In contrast, Hogan's argument that UTOPIA clearly lacked a legal basis for recovery because the Agreement was unenforceable does challenge the merit of the action. Hogan asserts that the information UTOPIA sought to protect was available to the public under state law and that as a result, UTOPIA could not enforce the confidentiality provision of the Agreement.
¶ 17 Hogan additionally argues that UTOPIA's claim for declaratory relief lacked merit because the expiration of the Agreement was not in dispute and because he "never requested to recover" beyond the expiration date. Although Hogan raised this argument to the trial court, it did not rule on this issue, instead basing its ruling on the contract underlying UTOPIA's claim for injunctive
¶ 18 Because the trial court was correct that UTOPIA's action had merit, we need not consider whether the action was brought in bad faith. See Utah Code Ann. § 78B-5-825 (LexisNexis 2012) (requiring that an action be both filed in bad faith and without merit before attorney fees may be assessed). Hogan's claim for attorney fees under section 78B-5-825 fails because UTOPIA's action was not both without merit and brought in bad faith. See id.
¶ 19 Alternatively, Hogan argues that he is entitled to the attorney fees incurred in defending against the preliminary injunction under rule 65A of the Utah Rules of Civil Procedure. The rule provides,
Utah R. Civ. P. 65A(c)(2).
¶ 20 Hogan argues that the trial court erred in denying him fees under rule 65A because he successfully defended against the preliminary injunction at a hearing on the merits of the injunction. His affidavit supporting the motion for attorney fees indicates that "$1,919.00 in attorney fees [were] related to the temporary restraining order" and "$4,825.00 ... [were] related to the opposition to application for preliminary injunction, the hearing on the application[,] and preparation of the order on the hearing." In denying Hogan fees, the trial court stated that "the inference ... that the prevailing party is entitled to their attorney's fees is not merited." UTOPIA concedes that, contrary to the trial court's ruling, Hogan is entitled to attorney fees "in theory" but argues that we should affirm because there was no actual harm to Hogan. Specifically, UTOPIA asserts that Hogan "failed to carry his burden of demonstrating what (if any) fees were actually recoverable."
¶ 21 "`If ... it is found that the injunction was wrongfully issued, the enjoined party has an action for costs and damages incurred as a result of the wrongfully issued injunction.'" IKON Office Solutions, Inc. v. Crook, 2000 UT App 217, ¶ 12, 6 P.3d 1143 (omission in original) (emphasis omitted) (quoting Mountain States Tel. & Tel. Co. v. Atkin, Wright & Miles, Chartered, 681 P.2d 1258, 1262 (Utah 1984)). "An injunction is wrongfully issued and recovery on the bond is permissible if it is finally determined that the applicant was not entitled to the injunction." Mountain States, 681 P.2d at 1262. Where, as here, a temporary restraining order is issued and a party successfully "fight[s] the wrongful enjoinder by preventing it from continuing as a preliminary injunction, ... the temporary restraining order will dissolve, either by its own terms or by order of the court, and the party will have successfully eliminated the wrongful enjoinder." See IKON Office Solutions, 2000 UT App 217, ¶ 13, 6 P.3d 1143. Thus, "the attorney fees and costs that a party incurs in this type of defense are the result of the wrongful injunction and that party may be awarded attorney fees and costs."
Id. ¶ 21 (citation and internal quotation marks omitted); see also Utah R. Civ. P. 65A(e) (stating the grounds required for issuing a preliminary injunction).
¶ 23 UTOPIA argues that we should affirm the trial court's denial of fees because "the entire evidentiary hearing [on the merits of the preliminary injunction] consisted of evidence that otherwise would have been elicited in a trial upon the merits [of the underlying lawsuit]." Additionally, UTOPIA claims that Hogan did not "apportion or separate out the recoverable fees from the nonrecoverable ones." See Eggett v. Wasatch Energy Corp., 2004 UT 28, ¶ 36, 94 P.3d 193. Contrary to UTOPIA's assertion, Hogan filed an affidavit that allocates attorney fees among specific tasks. Because the trial court ruled that Hogan was not entitled to any fees, it did not consider the amount of attorney fees available under rule 65A. We therefore remand to the trial court to determine the amount of attorney fees, if any, that should be awarded to Hogan under rule 65A of the Utah Rules of Civil Procedure.
¶ 24 Hogan also seeks attorney fees on appeal. Hogan is entitled to attorney fees on appeal only if he is awarded attorney fees in the trial court. See Valcarce v. Fitzgerald, 961 P.2d 305, 319 (Utah 1998). If, on remand, the trial court determines that Hogan is entitled to attorney fees under rule 65A of the Utah Rules of Civil Procedure, the trial court should also determine the "`fees [Hogan] reasonably incurred on appeal'" for the issues on which he prevailed. See id. (quoting Utah Dep't of Soc. Servs. v. Adams, 806 P.2d 1193, 1197 (Utah Ct.App.1991)). If the trial court determines that Hogan is entitled to attorney fees, "some adjustment may be necessary so that [he does] not recover fees attributable to issues on which [he] did not prevail." Id. We therefore remand to the trial court for consideration of whether Hogan is entitled to attorney fees under rule 65A and, if so, for a calculation of fees that Hogan reasonably incurred on appeal of that issue.
¶ 25 Next, Hogan challenges the trial court's refusal to hold UTOPIA in contempt for releasing the Stricken Language to the media while it was under seal. See Utah Code Ann. § 78B-6-301(5) (LexisNexis 2012) (stating that "disobedience of any lawful judgment, order or process of the court" is "contempt[] of the authority of the court"). The trial court ruled that no evidentiary hearing was needed to determine whether UTOPIA had acted in contempt because the issue had become moot when the court unsealed the record and because the order to seal related only to the court clerk. Hogan argues that the trial court's reasoning was erroneous and that we should remand for the trial court to decide the matter "under a proper legal standard."
¶ 26 As a threshold matter, UTOPIA argues that we should decline to address this argument because Hogan lacks standing to challenge the trial court's decision. "[I]n Utah, as in the federal system, standing is a
Chen v. Stewart, 2005 UT 68, ¶ 50, 123 P.3d 416 (quoting Society of Prof'l Journalists v. Bullock, 743 P.2d 1166, 1171 (Utah 1987)). The traditional standing test requires a party to "`allege that he or she has suffered or will imminently suffer an injury that is fairly traceable to the conduct at issue such that a favorable decision is likely to redress the injury.'" Id. (quoting Provo City Corp. v. Thompson, 2004 UT 14, ¶ 9, 86 P.3d 735).
¶ 27 Because Hogan appeals the trial court's contempt determination, the conduct relevant to Hogan's standing is the trial court's refusal to hold UTOPIA in contempt, not UTOPIA's release of sealed information to the media. See Summer v. Summer, 2012 UT App 159, ¶ 13, 280 P.3d 451 (mem.) (citing Chen, 2005 UT 68, ¶¶ 48-54, 123 P.3d 416). Thus, "[i]n determining whether [Hogan] `will imminently suffer an injury that is fairly traceable' to the trial court's decision to not hold [UTOPIA] in contempt, we must consider the effect that the contempt order will have on [Hogan]." See id. ¶ 14 (quoting Chen, 2005 UT 68, ¶ 50, 123 P.3d 416).
¶ 28 In doing so, we first consider the nature of the contempt order. "A contempt order is criminal if its purpose is to vindicate the court's authority, as by punishing an individual for disobeying an order, even if the order arises from civil proceedings." Von Hake v. Thomas, 759 P.2d 1162, 1168 (Utah 1988), superseded on other grounds as stated in State v. Hurst, 821 P.2d 467, 470 (Utah Ct.App.1991). In contrast, "[a] contempt order is civil if it has a remedial purpose, either to coerce an individual to comply with a court order given for the benefit of another party or to compensate an aggrieved party for injuries resulting from the failure to comply with an order." Id. However, when reviewing the nature of a contempt order, we look not only to its stated purpose but to the character of the sanction as well. See generally International Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 827-28, 114 S.Ct. 2552, 129 L.Ed.2d 642 (1994).
¶ 29 Neither the trial court, nor either party, has addressed whether the contempt order would have been civil or criminal in nature. Nonetheless, the distinction between civil and criminal contempt is relevant to our analysis because "a party will generally not have standing to appeal a trial court's failure to hold another party in criminal contempt because the only proper objective of criminal contempt is as punishment to vindicate the authority of a court." Summer, 2012 UT App 159, ¶ 14, 280 P.3d 451 (citation and internal quotation marks omitted). On the other hand, "where a party challenges a court's failure to hold another party in civil contempt ... standing is dependent on whether the failure to do so directly affects the moving party's interests in the litigation." Id. Accordingly, we must first determine the nature of the contempt proceedings.
¶ 30 In the Motion and at the hearing, Hogan's argument emphasized that UTOPIA should be held in contempt as punishment for its past conduct of "disclosing documents to third parties that are currently under seal." Hogan's affidavit supporting the Motion states that UTOPIA's alleged media campaign against him would likely result in rendering him unable to find employment. The Motion calls for "sanctions" against UTOPIA, "including but not limited to [Hogan's] attorney's fees incurred in this action." At the hearing, Hogan argued that UTOPIA's conduct "caused damage, but that's not necessarily the point of [the] hearing. The point... is that they had an order. They knew the order. They didn't have to go out and leak the information, but they did." Hogan asserted that the court should award attorney fees "as the sanction for the contempt." At oral argument, Hogan again argued that attorney fees should have been awarded "to
¶ 31 The only indication that the Motion sought civil contempt was that Hogan's requested relief was for attorney fees. Utah's statutory scheme allows a court discretion to sanction a party held in contempt with a fine or jail sentence. See Utah Code Ann. § 78B-6-310 (LexisNexis 2012). Additionally, if the contempt causes "an actual loss or injury to a party ... the court, in lieu of or in addition to the fine or imprisonment, may order the person proceeded against to pay the party aggrieved a sum of money sufficient to indemnify him and to satisfy his costs and expenses." See id. § 78B-6-311. The "costs and expenses" described in this section include "the attorney fees the damaged party incurred." See Foreman v. Foreman, 111 Utah. 72, 176 P.2d 144, 151 (1946) (interpreting Utah Code Ann. § 104-45-11 (Callaghan & Co.1943) (current version at id. § 78B-6-311 (LexisNexis 2012))).
¶ 32 Requests for attorney fees, when made under section 78B-6-311 of the Utah Code, are considered civil in nature. See Davidson v. Munsey, 29 Utah. 181, 80 P. 743, 745 (1905) (holding that actions seeking attorney fees under the predecessor to section 78B-6-311 were civil in nature (interpreting Rev. St. 1898 § 3368 (Young, Smith & Lee 1898) (current version at Utah Code Ann. § 78B-6-311 (LexisNexis 2012)))). However, Hogan did not request his fees under this section in the trial court,
¶ 33 Except for his specific claim for attorney fees as a sanction, Hogan's request, and the relief that would have been granted, appear to be criminal in nature. Hogan requested an order "to vindicate the court's authority," which he acknowledged would not necessarily result in the enforcement of the civil judgment. Cf. Von Hake v. Thomas, 759 P.2d 1162, 1168 (Utah 1988), superseded on other grounds as stated in State v. Hurst, 821 P.2d 467, 470 (Utah Ct.App.1991). Thus, if the trial court had held UTOPIA in contempt, it would not have been to coerce UTOPIA to obey the order sealing the record, which had since been lifted, nor would it have served to compensate Hogan for any "actual loss or injury" caused by UTOPIA's conduct. Instead, a contempt finding would have allowed the trial court to sanction UTOPIA for past conduct and to vindicate the court's own authority. As a result, the contempt proceedings were criminal in nature and Hogan lacks standing to challenge the trial court's ruling on appeal.
¶ 34 We affirm the trial court's denial of Hogan's motion for attorney fees under section 78B-5-825 because the trial court did
¶ 35 Affirmed in part; reversed and remanded in part.
Judge CAROLYN B. McHUGH authored this Opinion, in which Judges JAMES Z. DAVIS, and WILLIAM A. THORNE JR. concurred.