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Utah A.G. ordered to make $5.6M payment in polygamous trust case

Published August 3, 2012 11:44 am

Utah high court faults A.G., orders him to pay bills owed to accountant appointed to trust.
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The state of Utah must help pay more than $5.5 million in past-due bills owed to an accountant appointed to run a polygamous sect's property trust after it was taken over by the state, the Utah Supreme Court decided Friday.

The high court unanimously upheld a lower court ruling ordering Utah Attorney General Mark Shurtleff to kick in money to help pay the four years of debts, which are primarily owed to attorneys for accountant Bruce Wisan.

"Under the highly unusual circumstances surrounding the UEP trust ... both the award of fees and the amount of the award were just and equitable," according to the high court. Shurtleff initiated the takeover of the $110 million United Effort Plan trust in 2005 amid allegations of mismanagement by Warren Jeffs and other Fundamentalist Church of Jesus Christ of Latter-Day Saints trustees.

The justices came down firmly in favor Wisan, who argued it was unfair to expect private citizens to go years without being paid for court-appointed work. He was supposed to be paid from the trust itself, but has been legally barred from selling its property to pay himself since 2008.

Wisan's "expenses were incurred for the benefit of the state because they were in the administration of a charitable trust," the justices wrote, saying he has increased the value of the trust by more than his fees by seizing property that FLDS leaders tried to transfer out.

Wisan's business partner, Val Oveson, said Friday he was "heartened" by the ruling.

"We get up in the morning and we think about protecting the rights of those people, regardless of their religious affiliation. That's what we're about and that's what we're going to continue to be about," Oveson said.

The $5.64 million payment to Wisan will require an appropriation approved by the Legislature. That could happen in a fall special session or during the next regular session in January, said Sen. Lyle Hillyard, R-Logan, who chairs the Executive Appropriations Committee.

"It appears from the last tax report there is a slight surplus, and that should be enough to take care of that money," Hillyard said, though he pointed out that the state is also facing a $47 million bill following an active wildfire season, among other costs. Still, "the lawsuit was filed. I have no say about it. We are where we are and we need to get it worked out."

The Utah Supreme Court justices in Monday's opinion faulted the attorney general who, they said, "undercut" Wisan's efforts to collect money for his fees over the years, including Shurtleff's 2009 offering of aproposed settlement that would have given almost all the trust back to the sect.

"Instead of submitting objections to the award of [Wisan's] fees after the fact, the state should have moved for the UEP trust's termination if it felt the special fiduciary was mismanaging the trust," the justices wrote.

Shurtleff disagreed with that assertion Friday, saying he always wanted to make sure Wisan was paid.

The high court also blasted Shurtleff's argument that the payment order was illegal because it amounted to one branch of government forcing another to do something.

"If this were the case, any monetary judgment against the state would be a constitutional separation of powers violation," according to the ruling.

Shurtleff said Friday he was "disappointed" in the opinion but had forwarded it on to the Utah Legislature to determine how to pay the money. The payment is designed to be a loan until Wisan can be paid from the trust itself, as was the original plan.

The repayment, however, is dependent on a separate decision from a federal appeals court, which is weighing whether to uphold a 2011 ruling by U.S. District Judge Dee Benson, who said that the takeover itself was illegal and the trust should go back to the FLDS.

Shurtleff appealed that decision, and the federal appeals court decided to send a central question in the case back to the Utah Supreme Court: Whether their own dismissal of the FLDS claims in 2010 should have barred Benson from looking at the case in the first place.

The Utah Supreme Court has not yet made a decision on that aspect of the case. If they side with the state, the federal appeals court seems likely to follow suit, leaving the trust in Wisan's hands and allowing him to sell land to repay taxpayer funds.

If that happens, Wisan has said he'll sell property located near Apple Valley, a dairy worth about $4 million, as well as complete a long-contested sale of Berry Knoll farm, worth some $2 million. Ultimately, Wisan wants to distribute the assets back to individual FLDS people by dividing the property and giving them deeds to their homes.

If the Utah Supreme Court were to side with the FLDS, however, repaying the taxpayer money might be a bit more complicated.

Despite the now-epic and expensive court battle, Shurtleff said the takeover was still the right move

"I don't regret having gone and asked the court to remove Warren Jeffs," he said Friday, though he added that more FLDS involvement from the beginning would have made things go more smoothly.

Jeffs, 56, is now serving a life prison sentence in Texas for sexually assaulting two underage girls he took as polygamous wives but is said to still control the sect and orchestrate the increasingly frequent excommunications of members.

FLDS people still live, work and play on the UEP trust, which holds nearly all the land and property in their home base of Hildale, Utah, and Colorado City, Ariz. The sect started fighting the takeover in court in 2008, by opposing the then-proposed sale of Berry Knoll farm. They won a ruling that barred Wisan from selling trust property to pay himself and his attorneys.

Wisan and the attorneys haven't gotten a full paycheck since. But last August, 3rd District Judge Denise Lindberg approved their request that Shurtleff's office make the payment.

lwhitehurst@sltrib.com Twitter: @lwhitehurs t The Polygamy Blog: http://www.sltrib.com/blog/polygblog