Articles Posted in Contracts

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Dos Lagos, LLC and Mellon Valley, LLC defaulted on a loan in which Utah First Federal Credit Union owned a fifty-two percent interest and RADC/CADC Venture, LLC (RADC) owned a forty-eight percent interest. Utah First filed a deficiency action against Dog Lagos, Mellon Valley, and several guarantors (collectively, Dos Lagos). After the statute of limitations had expired, Utah First filed an emended complaint adding RADC as a party plaintiff. The district court awarded RADC the full amount of the loan, concluding that the amended complaint related back to the date of the original complaint under Utah R. Civ. P. 15(c). The court of appeals affirmed. The Supreme Court affirmed, holding that the court of appeals did not err when it found that RADC’s claim was not time barred and awarded RADC the full deficiency amount. View "2010-1 RADC/CADC Venture, LLC v. Dos Lagos, LLC" on Justia Law

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At issue in this appeal was the scope of the “covered profession” clause of a professional liability errors and omissions insurance policy issued to Utah County Real Estate, LLC (Prudential) by Houston Casualty Company. While working as a real estate agent for Prudential, Robert Seegmiller engaged in a professional relationship with the plaintiffs in this action (collectively, Investors) on a real estate deal that went sour. The Investors obtained a judgment against Seegmiller for negligence. Rather than execute the judgment against Seegmiller, the Investors settled with him, acquiring any claims he might have against Prudential’s insurer, Houston Casualty. The Investors then brought this action alleging that Houston Casualty breached the policy by failing to defend and indemnify Seegmiller. The district court granted summary judgment for Houston Casualty. The Supreme Court affirmed on the ground that Seegmiller’s conduct in the transaction was not covered by the policy because he was not providing services “for a fee” in the transaction. View "Compton v. Houston Casualty Co." on Justia Law

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Natalie Heslop overdosed on prescription drugs. The next day, Natalie rolled her truck down an embankment. Natalie informed the responding police officer, medical personnel, her family, and an insurance adjuster that the accident had been a suicide attempt. Natalie’s insurance policy provided that it would exclude coverage to any injured person “if the person’s conduct contributed to his injury…by intentionally causing injury to himself.” Natalie and her husband, Brandon Heslop, attempted to collect from Bear River Mutual Insurance Company under both a personal injury protection claim for Natalie’s personal injuries and a property damage claim for damage to the truck. Bear River denied the claims based on Natalie's admission that she intended to drive down the embankment. The Heslops subsequently filed a complaint against Bear River. The district court granted summary judgment to Bear River as to both the personal injury claim and the property damage claim. The Supreme Court affirmed, holding that the district court did not err in granting summary judgment on the Heslops’ claims. View "Heslop v. Bear River Mutual Insurance Co." on Justia Law

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At issue in this case was (1) how Utah Code 30-3-5(1)(e) should be interpreted in correlation with Utah Code 75-2-804, and (2) the proper interpretation of “express terms” in section 75-2-804(2). Tyler Hertzske and Linda Snyder each claimed sole entitlement to the death benefits of a life insurance policy held by Edward Hertzske, deceased. The district court granted summary judgment to Tyler, concluding that Tyler was entitled to judgment as a matter of law. In so holding, the judge concluded (1) where section 30-3-5(1)(e) was not considered or included in the divorce proceedings, it did not apply, and (2) the Policy did not contain “express terms” that would except it from revocation under section 75-2-804(2). The Supreme Court affirmed, holding (1) section 75-2-804(2) creates a rebuttable presumption that a beneficiary designation in a life insurance policy is revoked upon divorce; (2) section 30-3-5(1)(e) does not apply in this instance, and, rather, section 75-2-804 governs; (3) a life insurance policy must contain “express terms” referring to divorce in order for the beneficiary designation of a former spouse to survive revocation by section 75-2-804(2); and (4) the Policy did not contain “express terms” that would except it from revocation under section 75-2-804(2). View "Snyder v. Hertzske" on Justia Law

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In 2005, Connor Libby and Elena Chapa (collectively, Defendants) signed credit card agreements with Federated Capital Corporation’s predecessor-in-interest, a Utah corporation with its principal place of business in Pennsylvania. The agreements contained a forum selection clause and choice of law provision that adopted Utah substantive and procedural law to govern any dispute under the contract. The agreements required Defendants to make monthly payments to the address specific on their billings statements, and each billing statement required Defendants to send their payments to an address in Philadelphia, Pennsylvania. Defendants defaulted in 2006. In 2012, Federated filed separate claims in separate proceedings against Defendants. In each proceeding, the district court granted summary judgment in favor of Defendants, ruling that Utah’s borrowing statute required the court to apply Pennsylvania’s four-year statute of limitations, thereby barring Federated’s claims. Federated appealed, arguing that the agreement’s forum selection clause precluded the application of Utah’s borrowing statute. The Supreme Court affirmed, holding that the borrowing statute applied to and barred Federated’s causes of action. View "Federated Capital Corp. v. Libby" on Justia Law

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Gloria and Thomas Shakespeare, GLOCO, LC, and Atlas Tower, LLC (collectively, Shakespeares) applied for permission from the Board of Trustees of the Fort Pierce Industrial Park Phases II, III & IV Owners Association (Association) to construct a cell phone tower on a lot located along River Road in the Fort Pierce Industrial Park (industrial park). The Association denied the application. When the Shakespeares proceeded to construct the cell phone tower, the Association brought suit, alleging that the Shakespeares breached the covenants, conditions, and restrictions (CC&Rs) of the industrial park. After a bench trial, the district court held that the Board did not have the right to limit the number of cell phone towers in the industrial park. The Supreme Court reversed, holding (1) the district court erred in strictly construing the CC&Rs in favor of the free and unrestricted use of property rather than applying neutral principles of contract construction; and (2) the Board had sufficient authority under the CC&Rs to deny the Shakespeares’ application. View "Fort Pierce Ind. Park Phases II, III & IV Owners Ass’n v. Shakespeare" on Justia Law

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Trans-Western filed an amended complaint in federal district court asserting claims against U.S. Gypsum for breach of an oil and gas lease and breach of the covenant of quiet enjoyment. The district court found that U.S. Gypsum had wrongfully rescinded the lease and that the rescission constituted a breach of contract and a breach of the covenant of quiet enjoyment. The court awarded nominal damages of one dollar to Trans-Western. The parties appealed. The Tenth Circuit Court of Appeals certified to the Supreme Court the question of how to measure expectation damages for the breach of an oil and gas lease. The Supreme Court answered (1) expectation damages for the breach of an oil and gas lease are measured in much the same way as expectation damages for the breach of any other contract; (2) damages may include general and consequential damages; and (3) trial courts may allow the use of post-breach evidence to help establish and measure expectation damages. View "Trans-Western Petroleum, Inc. v. U.S. Gypsum Co." on Justia Law

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USA Power, LLC developed a power plant project in Mona, Utah called the “Spring Canyon vision.” Meanwhile, PacifiCorp entered into negotiations to purchase USA Power’s Spring Canyon assets, and USA Power provided PacifiCorp with details on the entire project. PacifiCorp terminated the negotiations, however, and began construction on a power plant project in Mona that was very similar to the Spring Canyon project. PacifiCorp also retained Jody Williams, USA Power’s former attorney, to help it obtain water rights for its project, called the Currant Creek project. USA Power brought suit against Williams, asserting malpractice claims for Williams’s alleged breach of her fiduciary duties of confidentiality and loyalty, and against PacifiCorp, alleging misappropriation of USA Power’s trade secrets. The trial court granted summary judgment for Defendants. The Supreme Court reversed. On remand, the jury returned a special verdict against PacifiCorp and Williams. The trial court reduced the unjust enrichment award against PacifiCorp, granted Williams’s judgment notwithstanding the verdict motion for lack of evidence related to causation, and determined that USA was entitled to attorney fees. Both parties appealed. The Supreme Court affirmed the trial court’s rulings as to each issue presented on appeal, holding that the court did not err in its judgment. View "USA Power, LLC v. PacifiCorp" on Justia Law

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Mind & Motion entered into a real estate purchase contract (REPC) with Celtic Bank to buy a piece of property the Bank had acquired from a developer through foreclosure. The REPC required Celtic Bank to record plats by a certain date for the first phase of development of condominiums on the land and allowed Mind & Motion discretion to extend the recording deadline as necessary to allow the Bank sufficient time to record. Mind & Motion extended the recording deadline once but declined to extend it a second time. Mind & Motion subsequently sued Celtic Bank for breach of contract. The district court granted summary judgment in favor of Mind & Motion, ruling that the recording provision was a covenant, not a condition. Celtic Bank appealed, arguing that the recording provision was unambiguously a condition. The Supreme Court affirmed, holding (1) the recording provision is a covenant, not a condition; and (2) there is no latent ambiguity in the REPC. View "Mind & Motion Utah Invs., LLC v. Celtic Bank Corp." on Justia Law

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Mind & Motion Utah Investments, LLC entered into a real estate purchase contract (REPC) with Celtic Bank to buy a piece of property the Bank had acquired from a developer through foreclosure. The prior owner and received approval to construct condominium units on the land but had not recorded the plats for the first phase of development. Mind & Motion agreed to purchase the property, but the REPC required the Bank to record the plats by a certain date and allowed Mind & Motion discretion to extend the recording deadline as necessary to allow the Bank enough time to record. Under the REPC, if Mind & Motion extended the deadline, the deadline to complete the transaction would be automatically extended. Mind & Motion extended the recording deadline once but refused to extend it a second time. Mind & Motion subsequently sued Celtic Bank for breach of contract. The district court granted summary judgment for Mind & Motion, concluding that the recording provision was unambiguously a covenant, not a condition. Celtic Bank appealed, arguing that the recording provision was unambiguously a condition. The Supreme Court affirmed, holding that the recording provision was a covenant, not a condition, and there was no latent ambiguity in the REPC. View "Mind & Motion v. Celtic Bank" on Justia Law