2016 UT App 46
THE UTAH COURT OF APPEALS
ROBERT E. OLSEN, MARIE T. OLSEN, CARL A. JACOBSON, AND
JENNY L. JACOBSON,
Appellants and Cross-appellees,
v.
FAIR CO.,
Appellee and Cross-appellant.
Opinion
No. 20140140-CA
Filed March 10, 2016
Fifth District Court, St. George Department
The Honorable Jeffrey C. Wilcox
No. 120500142
Shane Clifford, Attorney for Appellants
Stevan R. Baxter, Attorney for Appellee
JUDGE STEPHEN L. ROTH authored this Opinion, in which
JUDGE KATE A. TOOMEY and SENIOR JUDGE JAMES Z. DAVIS
concurred. 1
ROTH, Judge:
¶1 Robert E. Olsen, Marie T. Olsen, Carl A. Jacobson, and
Jenny L. Jacobson (collectively, Buyers) appeal from the district
court’s grant of summary judgment in favor of Fair Co. (Seller).
Seller cross-appeals the district court’s denial of its request for
1. Senior Judge James Z. Davis began his work on this case as a
member of the Utah Court of Appeals. He retired from the court,
but thereafter became a Senior Judge. He completed his work on
this case sitting by special assignment as authorized by law. See
generally Utah R. Jud. Admin. 11-201(6).
Olsen v. Fair Co.
attorney fees. We affirm both the district court’s grant of
summary judgment and its denial of an attorney-fees award.
BACKGROUND
¶2 Buyers purchased property from Seller in LaVerkin, Utah
on January 10, 2003 for $310,268. The property included a
number of mobile homes. Seller financed $210,000 of the
purchase price, with the loan evidenced by a note (the Note)
from the Buyers, secured by a trust deed on the property. The
Note set monthly payments at $2,095, to begin February 14, 2003,
and to continue through September 14, 2015. The Note also
stated that “for each $5,000 of note debt reduction,” Seller
“agree[d] to release and provide clear title to one mobile home.”
Buyers made payments in accordance with the Note and
received four of the eleven titles between February 14, 2003 and
April 14, 2004. Despite receiving additional payments, Seller
failed to provide the next mobile home title in accordance with
the Note.
¶3 At some point in 2005, Buyers sent Seller a letter stating,
“With this payment it is past time for your company to release
mobile home title number 5 and now time to release title number
6. I would appreciate them very much.” Buyers received the
following response in September 2005 from Seller: “I have
enclosed titles to number 1 and 16. You were sent the title for
Number 6 on August 18, 2004. On number 5 we do not have a
title, it was included with the property.” Over the next several
years, Buyers’ payments became consistently late and Seller did
not release any additional mobile home titles. Apparently
referring to Seller’s failure to provide mobile home titles, Buyers
informed Seller in May 2010 that they “would no longer make
payments” due to Seller’s breach of contract, and by 2011 Buyers
had stopped making payments altogether.
¶4 In November 2011, Seller commenced collection efforts
against Buyers by recording a notice of default on the trust deed,
20140140-CA 2 2016 UT App 46
Olsen v. Fair Co.
thereby initiating non-judicial foreclosure proceedings. That
same month, Seller’s attorney also sent a letter to a third party
stating that Seller had “recently obtained clear title to the last
unit . . . of the mobile home park.” On February 22, 2012, Buyers
filed a complaint against Seller alleging, among other things,
breach of contract. Buyers asserted that Seller had failed to fulfill
its obligation under the Note to transfer titles to the mobile home
units. They also alleged that the missing titles significantly
lowered the market value of the property, which they had sold
“in June or July of 2011” at what they claimed to be a much
lower price than they could have obtained had they received the
mobile home titles prior to the sale. 2 On February 28, 2012,
Buyers also filed a motion for a temporary restraining order,
halting the foreclosure sale of the property.
¶5 In June 2013, Seller filed a motion for summary judgment.
The district court heard argument on the motion in December
2013 and entered an order granting summary judgment in favor
of Seller the following month. In the summary judgment order,
the district court determined that the six-year statute of
limitations for Buyers’ breach of contract claim began running
on May 14, 2004—the date Seller first failed to provide a mobile
home title as agreed—and that the latest possible date the statute
of limitations could have begun running was April 14, 2005—the
date Buyers would have received the final mobile home title had
Seller fully performed its obligations under the Note. The district
court also determined that the statute of limitations had not been
tolled by Utah Code section 78B-2-113, which restarts the statute
of limitations on “[a]n action for recovery of a debt” in the event
“a payment is made on the debt by the debtor.” See Utah Code
Ann. § 78B-2-113(1)(c) (LexisNexis 2012). Accordingly, the
district court found that, because the statute of limitations barred
any claim filed after April 14, 2011, at the latest, the court
2. After Buyers sold the property in August 2011, additional
titles were transferred by Seller to Buyers.
20140140-CA 3 2016 UT App 46
Olsen v. Fair Co.
determined that Buyers brought their breach of contract claim
against Seller too late. In a subsequent order, the district court
determined that “neither party was held in default” and
therefore that Seller was not entitled to attorney fees. Buyers
appeal the summary judgment in Seller’s favor. Seller cross-
appeals the district court’s denial of its request for attorney fees.
ISSUES AND STANDARDS OF REVIEW
¶6 Buyers argue that the district court erred in granting
summary judgment for three reasons: (1) it failed to “treat the
trust deed note as an executory contract”; (2) it improperly
calculated the date the statute of limitations began to run; and (3)
it erroneously concluded that Utah Code section 78B-2-113 was
inapplicable. We review “a summary judgment for correctness,
giving no deference to the trial court’s decision.” Bahr v. Imus,
2011 UT 19, ¶ 15, 250 P.3d 56. “The de novo standard of review of
summary judgment applies regardless of the nature (fact-
intensive or not) of the underlying law governing the parties’
rights.” Id. ¶ 16.
¶7 Seller challenges the district court’s denial of its request
for attorney fees. “Under Utah law, attorney fees may be
recovered if provided by contract or statute. If by contract, the
award of attorney’s fees is allowed only in accordance with the
terms of the contract.” Faulkner v. Farnsworth, 714 P.2d 1149, 1150
(Utah 1986) (per curiam) (citation and internal quotation marks
omitted). Seller contends that it is entitled to attorney fees under
the Note. “The interpretation of contract language” involving
attorney fees “presents us with a question of law on which we
need not defer to the trial court’s construction but are free to
render our independent interpretation.” Id. (citation omitted).
20140140-CA 4 2016 UT App 46
Olsen v. Fair Co.
ANALYSIS
I. Buyers’ Appeal: Summary Judgment
¶8 All of Buyers’ arguments hinge on the district court’s
determination that Buyers’ claim against Seller for breach of
contract—filed in February 2012—was filed after the appropriate
statute of limitations had run and was therefore untimely.
Neither party disputes that Utah Code section 78B-2-309, which
provides a six-year statute of limitations for claims brought
under a written contract, applies here. Utah Code Ann. § 78B-2-
309(2) (LexisNexis 2012). Buyers first argue that their claim was
timely because, in accordance with Utah Code section 78B-2-113,
the applicable six-year period was tolled until 2011 when Seller
delivered the final mobile home titles. Buyers next argue that if
the district court had properly deemed the contract at issue
executory, the six-year statute of limitations would not have
started to run until November 2011, because, according to
Buyers, Seller was still “working on” its end of the contract,
making Buyers’ February 2012 claim timely. Buyers’ final
argument is that if the statute of limitations began running on
the date that the final mobile home title was due under the terms
of the Note, the district court erred in determining that April 14,
2005, was the date on which the final title was due. Instead,
Buyers contend that delivery of the final title was to be
December 13, 2007, thus bringing their February 2012 filing
within the six-year statute of limitations. We address each
argument in turn.
A. Application of Utah Code Section 78B-2-113
¶9 Utah Code section 78B-2-113 states, “An action for
recovery of a debt may be brought within the applicable statute
of limitations from the date: (a) the debt arose; (b) a written
acknowledgement of the debt or a promise to pay is made by the
debtor; or (c) a payment is made on the debt by the debtor.” Id.
§ 78B-2-113(1). Buyers contend that Seller’s “written
20140140-CA 5 2016 UT App 46
Olsen v. Fair Co.
correspondence and eventual transfer of mobile home titles in
2011 served to bring [Buyers’] breach of contract claims ‘within
the applicable statute of limitations.’” (Quoting id.) And Buyers
argue that Seller became a “‘debtor’” under Utah Code section
78B-2-113 when Seller “became obligated to transfer something
of value (i.e., title to mobile homes).” (Quoting id.) Buyers
appear to be arguing that the correspondence and transfer of
mobile home titles in or around August 2011 constituted
“payment” or an “acknowledgement of the debt” under
subsections (b) and (c) of the statute.
¶10 Seller counters that Utah Code section 78B-2-113 does not
apply, because Buyers’ breach of contract action was not an
action to collect a debt. Buyers have not persuaded us otherwise.
“‘Debt’ has been defined variously, but generally it is an
obligation to pay a fixed and certain sum of money.” Bown v.
Loveland, 678 P.2d 292, 296 (Utah 1984). A “debt” is “usually a
monetary sum” that is “owed to another.” Garner’s Dictionary of
Legal Usage 249 (3d ed. 2011). While Buyers have pointed us to
cases such as Barnes v. Lehi City, 279 P. 878 (Utah 1929), which
states that “[t]he definitions of the word ‘debt’ are many, and
depend on the context and the general subject with reference to
which it is used,” see id. at 884 (citation omitted), they have
provided no authority supporting their claim that the obligation
to provide a title in exchange for payment is the type of “debt”
contemplated in section 78B-2-113. As a consequence, Buyers
have failed to persuade us that the concept of “debt” referenced
in section 78B-2-113 encompasses more than “an obligation to
pay a fixed and certain sum of money,” see Bown, 678 P.2d at 296,
or that the principle set out in that statute applies more broadly
to extend the statute of limitations for obligations of every kind,
see State v. Rincon, 2012 UT App 372, ¶ 10, 293 P.3d 1142 (“When
interpreting statutory provisions, we first look to the plain
language of the statute. When construing a statute, words that
are used in common, daily, nontechnical speech, should, in the
absence of evidence of a contrary intent, be given the meaning
which they have for laymen in such daily usage.” (citations and
20140140-CA 6 2016 UT App 46
Olsen v. Fair Co.
internal quotation marks omitted)); see also Marion Energy, Inc. v.
KFJ Ranch P’ship, 2011 UT 50, ¶ 33, 267 P.3d 863 (“In interpreting
statutory language, our primary goal is to give effect to the
legislature’s intent. To accomplish this goal, we begin by looking
to the statute’s plain language.”). Accordingly, we are not
persuaded that the district court erred in ruling that the statute
of limitations was not tolled by Utah Code section 78B-2-113.
B. Executory Contract
¶11 Buyers next argue that the district court’s grant of
summary judgment in favor of Seller was erroneous because it
failed to “treat the trust deed note as an executory contract.” An
executory contract is “[a] contract that remains wholly
unperformed or for which there remains something still to be
done on both sides.” Executory Contract, Black’s Law Dictionary
(9th ed. 2009); see also Adams v. Reed, 40 P. 720, 724 (Utah Terr.
1895) (“A contract is executory when the thing agreed has not
been done.” (citation and internal quotation marks omitted)).
Buyers contend that both parties had obligations under the Note
until November 2011 and that their claim filed in February 2012
was therefore timely because Seller was “still working” on
“delivering clear titles to mobile homes as late as November 9,
2011.” We conclude that the district court appropriately
accounted for the executory nature of the contract at issue.
¶12 As stated, “a contract is executory when it remains wholly
unperformed or there remains something still to be done on both
sides.” High Valley Water Co. v. Silver Creek Inv’rs, 2006 UT App
90U, para. 6 (citations and internal quotation marks omitted).
Buyers correctly state that “the statute of limitations [for
executory contracts] does not begin to run until the contract is
either repudiated or complete.” “The statute of limitations on a
cause of action for breach of an executory contract generally
does not begin to run until the time for full performance has
arrived.” See State Comp. Ins. Fund v. WallDesign Inc., 132 Cal.
Rptr. 3d 352, 356 (Ct. App. 2011); see also Anticipatory Breach of
20140140-CA 7 2016 UT App 46
Olsen v. Fair Co.
Executory Contract as Starting Running of Statute of Limitations, 94
A.L.R. 455 §1 (1935) (“[T]he rule is generally
established . . . [that], where an action is brought after the time
fixed by an executory contract, for the beginning of performance
by a party who has committed an anticipatory breach, the period
of limitations runs not from the time of such breach, but from the
time fixed for performance by the defaulting party.”). However,
a party need not wait until the time for full performance to bring
a claim but may instead opt to bring suit when an anticipatory
breach of the contract occurs. “An anticipatory breach occurs
when a party to an executory contract manifests a positive and
unequivocal intent not to render performance when the time
fixed for performance is due.” Kasco Servs. Corp., v. Benson, 831
P.2d 86, 89 (Utah 1992) (citation omitted). In such cases, a
performing party “can immediately treat the anticipatory
repudiation as a breach, or it can continue to treat the contract as
operable and urge performance without waiving any right to sue
for that repudiation.” Id. (citations omitted); see also 54 C.J.S.
Limitations of Actions § 190 (“Where one party to an executory
contract repudiates it before full performance has been made by
the other, the latter is not bound to continue to perform but may
elect to sue at once for the breach, in which event the statute
begins to run from the time of the renunciation.”). Thus, Buyers
were not required to bring their claim when Seller first failed to
provide the mobile home title or announced its refusal to do so
but had the option to wait until the “time fixed for performance
[was] due.” See Kasco Servs., 831 P.2d at 89. This is essentially
what the district court recognized when, in an alternative ruling,
it determined that the statute of limitations began running, not
on the date when Seller first failed to produce the fifth mobile
home title, but on the date when the last and final title should
have been delivered by Seller had full performance occurred. 3
3. We address Buyers’ claims that the district court incorrectly
determined the date the final title should have been delivered
infra ¶¶ 14–20.
20140140-CA 8 2016 UT App 46
Olsen v. Fair Co.
Accordingly, it is apparent from the district court’s
determination regarding the statute of limitations that the court
recognized the executory nature of the agreement and applied
the law appropriately.
¶13 At the hearing on the motion for summary judgment,
Buyers also argued that the time for full performance on the
Note was September 2015, the date their final loan payment was
due. And they argue on appeal that the time for full performance
did not occur until November 2011, when Seller handed over the
final mobile home title. Essentially, Buyers argue that a contract
remains executory—and therefore the statute of limitations is not
triggered—until either the breaching party finally performs,
regardless of when the performance was actually due, or until
the entire contract has been fully performed. Buyers have failed
to persuade us that either alternative is correct. As we discussed
in High Valley Water Co., 2006 UT App 90U, a contract is
executory only when obligations remain on “both sides,” and
when one party’s obligations are wholly completed, a contract is
no longer executory and the statute of limitations may be
triggered. See id. para. 6 (emphasis added). And in the event of
an anticipatory breach, “[i]f the injured party opts to await
performance, the claim accrues from the time fixed for
performance, and the statute of limitations does not begin to run
until that time.” 54 C.J.S. Limitations of Actions § 190. Thus, a
contract is no longer executory and the statute of limitations
begins to run on a party’s failure to perform once the time for
full performance of that party’s obligation has passed or, in other
words, once that party’s contract obligations would have been
complete had they performed as the agreement required. Here,
the district court concluded that Seller was obligated under the
agreement to provide all mobile home titles but had failed to do
so. And because the time had passed for Seller’s full
performance under the agreement, its time for performance had
passed. Consequently, the contract was no longer executory with
regard to Seller’s obligations. We therefore affirm the district
court’s determination that the statute of limitations began to run
20140140-CA 9 2016 UT App 46
Olsen v. Fair Co.
on the date that Seller would have fully completed its obligation
under the Note to provide Buyers the mobile home titles had full
performance occurred. 4
C. Date When Final Mobile Home Title Should Have Been
Conveyed
¶14 Buyers claim that “note debt reduction is a reduction of
the principal balance”—in other words the amount of monthly
payment net of interest. By amortizing the amount of each
payment between principal and interest, they calculate that they
would have had to pay approximately $61,000 before they were
entitled to the final mobile home title—a total figure that would
not have been reached under the monthly payment arrangement
in the Note until December 14, 2007. Accordingly, Buyers argue
that the six-year statute of limitations did not expire until
December 14, 2013, and that their claim was therefore timely.
4. Buyers reliance on Colchester Security II, LLC v. Krispy Kreme
Doughnut Corp., No. CL-2012-1377, 2013 WL 5622248 (Va. Cir. Ct.
Aug. 23, 2012), seems misplaced. In Colchester the court stated
that “the statute of limitations does not begin to run on a claim
for breach of an entire contract, which is continuing, executory
or capable of being enforced, until its termination.” Id. at *4
(citation and internal quotation marks omitted). While Buyers do
not expand on this citation, they imply that the contract was
executory and that the statute of limitations did not begin to run
because the Note required performance on their end—continued
payments—beyond the date the final mobile home title should
have been conveyed. But in Colchester, the court clarified that the
rule identified in that case applies only to a “claim for breach of
an entire contract” when the contract is “indivisible.” Id.
(emphasis added). Here, Buyers have not alleged breach of the
contract at issue in its entirety or that their obligation to continue
to make payments on the loan is indivisible from Seller’s
obligation to provide titles to the mobile homes.
20140140-CA 10 2016 UT App 46
Olsen v. Fair Co.
They also contend that the April 14, 2005 date relied upon by the
district court is the date that the eleventh and final mobile home
title would be delivered only if “note debt reduction” was
interpreted to mean the gross amount of each monthly payment,
including principal and interest. Thus, Seller’s obligation to
provide title to all eleven mobile homes would be triggered
under the Note when Buyers had made only eleven payments of
$5,000 or $55,000 total—regardless of whether the Note’s
principal balance had actually been reduced by that amount. We
conclude that Buyers did not preserve this argument below and
have failed to adequately brief it on appeal.
¶15 Buyers did not bring this argument to the attention of the
district court. Buyers neither argued their principal-only
interpretation of “note debt reduction” nor offered an alternative
to the April 14, 2005 date Seller put forward. Accordingly,
Buyers’ arguments were not “presented to the trial court in such
a way that the trial court ha[d] an opportunity to rule on that
issue,” and therefore they are unpreserved for appeal. See 438
Main St. v. Easy Heat, Inc., 2004 UT 72, ¶ 51, 99 P.3d 801 (citation
and internal quotation marks omitted). Buyers appear to attempt
to raise the issue under the plain error doctrine. “[T]o establish
the existence of plain error . . . , the appellant must show the
following: (i) An error exists; (ii) the error should have been
obvious to the trial court; and (iii) the error is harmful . . . or
phrased differently, our confidence in the verdict is
undermined.” State v. Dunn, 850 P.2d 1201, 1208–09 (Utah 1993)
(footnote omitted). “If any one of these requirements is not met,
plain error is not established.” Id. at 1209 (citations omitted). But
Buyers’ analysis of plain error is limited to one sentence and fails
to address any of the three requirements. Accordingly, this issue
is inadequately briefed and has not been properly raised on
appeal. See Utah R. App. P. 24(a)(5)(B) (“The brief of the
appellant shall contain . . . a statement of grounds for seeking
review of an issue not preserved in the trial court.”); see also State
v. Weaver, 2005 UT 49, ¶ 19, 122 P.3d 566 (determining that plain
error was not properly raised on appeal, because it was raised
20140140-CA 11 2016 UT App 46
Olsen v. Fair Co.
only in appellant’s reply brief); Peterson v. Sunrider Corp., 2002
UT 43, ¶ 23 n.9, 48 P.3d 918 (noting that a claim is inadequately
briefed where the claim was supported by only “[a] single,
vague sentence without citation to the record or legal
authority”). Thus, we do not address Buyers’ plain error
argument, because it is inadequately briefed.
¶16 But “[e]ven if the issue were properly raised, we would
conclude that the [district] court did not commit plain error,”
Berkshires, LLC v. Sykes, 2005 UT App 536, ¶ 21, 127 P.3d 1243,
because the phrase “note debt reduction” is ambiguous at best as
to whether that reduction should be calculated in the way Seller
contends or in the way Buyers contend. Under the Note, Seller
was required to “release and provide clear title to one mobile
home for each $5,000 of note debt reduction.” Seller’s motion for
summary judgment contained the following statement: “If
[Buyers] had made timely payments of $2,095 per month for
twenty-seven (27) months, they would have paid [Seller]
$56,565.00 by April 14, 2005 and had title to all eleven mobile
home units by that date.” This statement is a mixed statement of
fact and law. It states the fact that the total of Buyers’ payments
under the loan added up to more than $55,000 by April 14, 2005;
and it implies a legal conclusion that Seller’s obligation to
convey title to each mobile home was triggered by the
cumulating total of gross payments, i.e., both principal and
interest, under the Note, rather than limited to net payments of
principal balance only. The district court, at both the hearing and
in its final written order, accepted this statement of fact as a
valid interpretation of the agreement because Buyers failed to
“set forth, by affidavit or otherwise, specific facts or other
evidence that would create a dispute.”
¶17 Furthermore, in their written response to Seller’s motion
for summary judgment, and specifically in their response to
Seller’s fact statement that the final mobile home title would
have been delivered on April 14, 2005, Buyers stated only that,
“[t]his is a disputed material fact.” At the hearing on the motion
20140140-CA 12 2016 UT App 46
Olsen v. Fair Co.
for summary judgment, the district court went through each
disputed statement of fact in Seller’s motion one by one, offering
Buyers a chance to provide additional evidence or explanation as
to why those facts should not be accepted as undisputed. But
Buyers offered no additional evidence to support their
contention that the April 14, 2005 date was not the correct date
for delivery of the final mobile home title. Moreover, Buyers did
not present the legal argument they now make on appeal,
specifically that the $5,000 in “note debt reduction” required that
the transfer of each title was limited to “reduction in the principal
balance” and not the aggregation of the “total payments.”
¶18 At the time the district court issued its order, rule 56(e)
stated,
[A]n adverse party may not rest upon the mere
allegations or denials of the pleadings, but the
response, by affidavits or as otherwise provided in
this rule, must set forth specific facts showing that
there is a genuine issue for trial. Summary
judgment, if appropriate, shall be entered against a
party failing to file such a response.
Utah R. Civ. P. 56(e) (2014) (repealed 2015). 5 Here, Buyers
offered only, “This is a disputed material fact,” in response to
Seller’s statement that the final mobile home title was due on
April 14, 2005. They did not contest the April 2005 date, nor did
they challenge the underlying legal position that the Note’s title-
transfer obligation was tied to net, not gross, payments. And
5. After the district court’s January 2014 order, the Utah Rules of
Civil Procedure were amended in 2015 with the “objective . . . to
adopt the style of Federal Rule of Civil Procedure 56.” Utah R.
Civ. P. 56 advisory committee’s note to 2015 amendment. We
cite the version of Utah Rule of Civil Procedure 56 in effect at the
time the district court granted summary judgment.
20140140-CA 13 2016 UT App 46
Olsen v. Fair Co.
they did not provide the district court with the principal and
interest amortization schedule that they included in their
opening brief on appeal, from which they now argue that the net
payments did not exceed $55,000 until July 14, 2007. This type of
“mere . . . denial[]” absent “specific facts showing that there is a
genuine issue for trial” violated rule 56(e). See id. Accordingly,
the district court was within its discretion to determine that
Buyers had failed to comport with rule 56(e) and to accept as
undisputed Seller’s statement regarding when the final mobile
home title would have been due.
¶19 Thus, any error regarding the trial court’s acceptance of
Seller’s statement would not have been obvious to the trial court
because the interpretation set forth by Seller was plausible given
the language of the Note. Cf. Berkshires, 2005 UT App 536, ¶ 21
(determining that no plain error existed because “the statutory
provisions at issue” in that case “are not entirely clear” and any
error would not have been obvious). We therefore affirm the
district court’s determination that the statute of limitations
began running on April 14, 2005.
¶20 In summary, we conclude that the district court did not
err in determining that Utah Code section 78B-2-113 did not toll
the statute of limitations or in failing to recognize the contract at
issue as executory. And we affirm the district court’s
determination that the final mobile home title was due on April
14, 2005. Accordingly, the district court’s grant of summary
judgment in favor of Seller is affirmed.
II. Seller’s Cross-Appeal: Attorney Fees
¶21 Seller contends that the district court improperly denied
its request for attorney fees. Specifically, Seller asserts that the
court erred in determining that Buyers were not in default. In
reaching its decision, the district court first relied on the
language of the Note, which states, “If this note is collected by an
attorney after default in the payment of principal or interest,
20140140-CA 14 2016 UT App 46
Olsen v. Fair Co.
either with or without suit, the undersigned, jointly and
severally, agree to pay all costs and expenses of collection
including a reasonable attorney’s fee.” The district court then
determined that under this provision, Seller was not entitled to
attorney fees without first demonstrating that Buyers were in
default. The court concluded that Buyers had “not been shown
to have been in default merely because this court has determined
that their claims are barred by limitations” and therefore
“attorney fees may not be awarded pursuant to the parties’
contract except where a default is shown.” Accordingly, the
district court denied Seller’s request for attorney fees.
¶22 We see no reason to disagree with the district court.
Before ruling on the issue of attorney fees, the district court
asked the parties to brief whether “[Seller] may still recover [its]
attorney fees under the parties’ contract” even “if [Buyers’]
claims were barred on limitations grounds.” The district court
found it “[s]ignificant[]” that “none of [Seller’s] arguments . . .
discuss[ed] the actual language” of the contract. In its ruling, the
court cited a paragraph of the Note and found that the
contractual language provided for attorney fees “[u]pon the
occurrence of any default” and that this language was consistent
with the “[o]ther attorney fee provisions in the trust deed,”
which were also “tied to default.” As part of its analysis, the
court quoted Faulkner v. Farnsworth: “The contractual language
does not award attorney fees to the prevailing party who
succeeds in enforcing the agreement, but against the defaulting
party whose default necessitates enforcement. As neither party
was held in default, neither was entitled to attorney fees.” 714
P.2d 1149, 1151 (Utah 1986) (per curiam). Here, the district court
determined that “attorney fees may not be awarded pursuant to
the parties’ contract except where a default is shown.” The court
then reasoned that because Buyers “have not been shown to
have been in default merely because this court has determined
that their claims [of breach of contract against Seller’s is] barred
by limitations,” Seller was not entitled to attorney fees under the
Note.
20140140-CA 15 2016 UT App 46
Olsen v. Fair Co.
¶23 It appears that the district court denied the request
because the running of the statute of limitations was what
allowed Seller to “succeed[] in enforcing the agreement” and did
not base its decision on the argument that Seller had shown that
Buyers had defaulted. In fact, the court also gave the impression
that it had some reservations about Seller’s actions. Specifically,
the court noted that it was concerned with the letter Seller sent
Buyers in September 2005. The court stated,
I’m focusing on that letter, September 20, 2005. You
know, the defendants—and by the defendants I
mean Fair Company and the Fairbanks said, ‘Gosh,
we can’t—we don’t have any more titles to give
you,’ and it would seem to me that that would be a
material breach at that point.
¶24 Therefore, because the district court found that attorney
fees were only recoverable in the event of a default and Seller
had not shown that Buyers were in default “merely because . . .
their claims are barred by limitations,” we conclude that the
district court did not err in denying Seller’s request for attorney
fees.
CONCLUSION
¶25 Because we conclude that the district court did not err in
granting Seller’s motion for summary judgment and did not err
in denying Seller’s motion for attorney fees, we affirm.
20140140-CA 16 2016 UT App 46