2019 UT App 119
THE UTAH COURT OF APPEALS
JAY MERVIN THOMPSON, LORI G. THOMPSON, AND
CINDY THOMPSON,
Appellees,
v.
MICAH CAPENER AND SHAYLEE CAPENER,
Appellants.
Opinion
No. 20180333-CA
Filed July 11, 2019
First District Court, Logan Department
The Honorable Kevin K. Allen
No. 170100152
Bradley H. Bearnson, Aaron K. Bergman, and
Wayman M. Stodart, Attorneys for Appellants
Brad C. Smith and Elizabeth A. Knudson, Attorneys
for Appellees
JUDGE DAVID N. MORTENSEN authored this Opinion, in which
JUDGES JILL M. POHLMAN and RYAN M. HARRIS concurred.
MORTENSEN, Judge:
¶1 Micah and Shaylee Capener own certain real property
(Lots 1A and 1B) in Tremonton, Utah, which is part of the
Garfield Estates Subdivision–Phase 1 (Subdivision). Jay, Lori,
and Cindy Thompson, also property owners who reside in the
Subdivision, brought this breach of contract action to enforce
against the Capeners certain protective covenants (Covenants)
encumbering the Subdivision. The Capeners filed a motion for
summary judgment, asserting a statute of frauds defense that the
Covenants are not enforceable against Lots 1A and 1B because
they were not signed by one of the then owners of Lot 1—the
Thompson v. Capener
larger parcel that was subsequently subdivided into Lots 1A and
1B. The district court denied the Capeners’ motion, concluding
that the Covenants are enforceable against Lots 1A and 1B
because the statute of frauds was satisfied by other writings or
alternatively because the previous owner had ratified the
Covenants. We reverse.
BACKGROUND 1
¶2 The Subdivision contains seven lots, one of which was Lot
1. In May 2005, June C. Garfield (June) conveyed Lot 1 to Bradley
H. Garfield (Brad). 2 Brad then conveyed Lot 1 to himself and
Susan Garfield (Susan) as joint tenants. In June 2006, the
Covenants—which purported to encumber all seven lots in the
Subdivision—were signed by June and Brad, but not by Susan.
The Covenants were recorded on June 12, 2006. At no time did
Susan sign the Covenants.
¶3 In April 2014, Micah Capener entered into a real estate
purchase contract with Brad and Susan to purchase Lot 1. Lot 1
was then further subdivided creating separate lots designated
1A and 1B. An amended plat evidencing the subdivision was
signed by Brad and Susan and recorded on July 2, 2014
(Amended Plat). On July 23, 2014, Brad and Susan executed
1. Because this is an appeal from summary judgment, “we view
the facts and all reasonable inferences drawn therefrom in the
light most favorable to the nonmoving party and recite the facts
accordingly.” Ockey v. Club Jam, 2014 UT App 126, ¶ 2 n.2, 328
P.3d 880 (cleaned up).
2. As is our practice, when relevant persons share a last name,
we sometimes refer to them by their first names with no
disrespect intended by the apparent informality.
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warranty deeds conveying Lots 1A and 1B to Micah Capener
(Warranty Deeds). The Warranty Deeds stated that the
conveyance was made “[s]ubject to easements, restrictions, and
rights of way appearing of record and enforceable in law”
(Habendum Clause). Capener thereafter conveyed Lots 1A and
1B to himself and Shaylee Capener as co-trustees of their
revocable living trust.
¶4 On May 2, 2017, the Thompsons filed this action for
breach of contract, alleging that the Covenants were enforceable
against Lots 1A and 1B and that the Capeners had violated the
Covenants. 3 The Capeners filed a motion for summary
judgment, asserting that the Covenants were unenforceable
against Lots 1A and 1B because Susan had never signed them.
¶5 The district court denied the Capeners’ motion for
summary judgment and ruled that the Covenants were
enforceable against Lots 1A and 1B. The court concluded that
“[w]here the . . . [Warranty Deeds] and [Amended Plat] all
impliedly reference the . . . Covenants, and the two deeds
executed by [Brad and Susan] contain both their signatures, it is
clear there is a nexus and it was [Brad and Susan’s] intention
that Lots 1A and 1B would be subject to the Covenants.”
Alternatively, the court concluded that in signing the Amended
Plat and Warranty Deeds, Susan ratified Brad’s actions in
creating the Covenants because “there is every indication [she]
was aware of the . . . Covenants . . . [and] could have provided
that she did not wish the [S]ubdivision, let alone Lots 1A and 1B,
to be subject to” the Covenants. The district court went on to
state that based on “subsequent writings bearing both [Brad’s
3. Although not clear in the record, at oral argument both sides
acknowledged that the claimed violations were, at least in part,
related to the Capeners’ desire to keep certain livestock on Lots
1A and 1B.
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and Susan’s] signatures . . . [Susan] clearly ratified [Brad’s]
actions in creating” the Covenants.
¶6 The Capeners petitioned for interlocutory appeal from the
denial of their motion for summary judgment. We granted the
petition.
ISSUE AND STANDARD OF REVIEW
¶7 The Capeners contend that the district court denied their
motion for summary judgment in error because the statute of
frauds was not satisfied and that the Covenants are therefore
unenforceable against Lots 1A and 1B as a matter of law.
“Summary judgment is only appropriate if the moving party
shows that there is no genuine dispute as to any material fact
and the moving party is entitled to judgment as a matter of law.”
Arnold v. Grigsby, 2018 UT 14, ¶ 8, 417 P.3d 606 (cleaned up). “An
appellate court reviews a trial court’s legal conclusions and
ultimate grant or denial of summary judgment for correctness.”
Id. (cleaned up). And “the applicability of the statute of frauds is
a question of law to be reviewed for correctness.” Bennett v.
Huish, 2007 UT App 19, ¶ 25, 155 P.3d 917 (cleaned up).
ANALYSIS
¶8 It is undisputed in this case that Susan did not sign the
Covenants. Likewise, neither party disputes that this fact, taken
alone, would render the Covenants unenforceable against Lots
1A and 1B under Utah’s statute of frauds. See Utah Code Ann.
§ 25-5-1 (LexisNexis 2013); Flying Diamond Oil Corp. v. Newton
Sheep Co., 776 P.2d 618, 629 (Utah 1989). What is squarely in
dispute, however, is whether other writings—specifically the
Warranty Deeds and the Amended Plat—signed by Susan
satisfied the statute of frauds or otherwise indicated that she
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ratified the Covenants. We discuss the statute of frauds and
ratification in turn.
I. Statute of Frauds 4
¶9 “Because covenants that run with the land must be based
on some interest in land, the statute of frauds must be satisfied.”
Flying Diamond Oil Corp. v. Newton Sheep Co., 776 P.2d 618, 629
(Utah 1989); see also Utah Code Ann. § 25-5-1 (LexisNexis 2013).
The statute of frauds requires a written memorandum of an
agreement relating to real property that is executed by all the
joint owners of the property. See Flying Diamond, 776 P.2d at 629.
Utah courts have also held that “one or more writings, not all of
which are signed by the party to be charged, may be considered
4. The Thompsons urge us to affirm on the ground that the
Capeners waived the statute of frauds defense. Early in the case,
the Thompsons filed a motion for a temporary restraining order
(TRO) alleging that “[e]very lot in [the Subdivision] is subject to”
the Covenants. The Capeners, in their opposition, admitted this
allegation, but “solely for the purpose of th[at] motion.” The
Thompsons now argue that this admission constitutes a
categorical waiver of the statute of frauds defense. We disagree.
To be sure, we recognize that if a party concedes or fails to
dispute facts in a number of circumstances, waiver can be found.
But this is not one of those circumstances. The Capeners
expressly qualified that their admission was solely for the
purpose of the Thompsons’ TRO motion. Not only do we decline
to establish precedent that would discourage parties from
making admissions for the limited purpose of a given motion,
but we encourage litigants to do so when reasonable. If a party
determines that a fact is immaterial or would muddy the water
in any given motion, we see no harm in conditionally admitting
that fact to promote efficiency in resolving that particular
motion. And a party should not be punished for doing so.
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together as a memorandum if there is a nexus between them.”
Reynolds v. Bickel, 2013 UT 32, ¶ 17, 307 P.3d 570 (cleaned up). A
nexus “is indicated by express reference in the signed writing to
the unsigned one, or by implied reference gleaned from the
contents of the writings and the circumstances surrounding the
transaction.” Id. ¶ 18 (cleaned up). A nexus under the latter
instance exists if
all the writings adduced, viewed together in light
of the situation and circumstances of the parties at
the time they were written, show unmistakably
that they relate to the same matter, and constitute
several parts of one connected transaction, so that
the mind can come to no other reasonable
conclusion from the evidence so offered than that
they were each written with reference to those
concurrent or preceding.
Gregerson v. Jensen, 617 P.2d 369, 373 n.6 (Utah 1980) (cleaned
up).
¶10 The facts in Gregerson illustrate when multiple writings
can be construed together to satisfy the statute of frauds. In
Gregerson, the plaintiff orally agreed to purchase real property
from the defendant for $700. Id. at 370. The plaintiff thereafter
delivered a signed check for half of the purchase price that
contained the notation “1/2 payment on land as agreed-other 1/2
payment when deed delivered.” Id. at 373 (cleaned up). A deed
was prepared listing the plaintiff as grantee and the defendant as
grantor, but that deed was never signed by either party. Id. at
371–72. The district court later dismissed the plaintiff’s case for
specific performance on the sale of the land because the deed
was unsigned and therefore did not comply with the statute of
frauds. Id. at 372. Our supreme court disagreed, concluding that
“while not referring expressly to a specific deed, the notation on
the check evidences the expectations of the parties that a deed
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would be involved in the transaction.” Id. at 373. The deed also
expressly listed the parties to the transaction and the description
of the subject property. Id. Accordingly, the court determined
that “the two writings evidence a single transaction and should
be read together as fulfilling the requirements of the Statute of
Frauds.” Id.
¶11 Here, the parties do not dispute that neither the Amended
Plat nor the Warranty Deeds contains an express reference to the
Covenants. Accordingly, for the Amended Plat and/or Warranty
Deeds to have a nexus with the Covenants sufficient to satisfy
the statute of frauds, they must “unmistakably . . . relate to the
[Covenants], and constitute several parts of one connected
transaction, so that the mind can come to no other reasonable
conclusion” but that Susan intended to be a party to and execute
the Covenants. See id. at 373 n.6 (cleaned up). We conclude that
no such nexus exists here.
¶12 First, we disagree with the district court’s conclusion that
the Amended Plat “recognizes” the Covenants. While the
Amended Plat contains references to a “private road access
easement” and public utility easements, there is simply no
mention of covenants, much less the specific Covenants at issue
here. The Amended Plat was also signed approximately eight
years after the Covenants were signed and recorded. Thus, the
Amended Plat evidences a different transaction, the subdivision
of Lot 1. We therefore conclude that the Amended Plat lacks a
sufficient nexus with the Covenants to satisfy the statute of
frauds.
¶13 Second, the Warranty Deeds also lack a sufficient
connection to the creation of the Covenants. See id. (stating that
“writings adduced . . . [must] show unmistakably that they
relate to the same matter, and constitute several parts of one
connected transaction” (emphasis added) (cleaned up)). The
Thompsons, on appeal, presented extensive briefing and oral
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argument concerning whether the Warranty Deeds impliedly
reference the Covenants vis-à-vis the word “restrictions” found
in the Habendum Clause. This argument, however, does nothing
to show that the Warranty Deeds and Covenants “constitute
several parts of one connected transaction.” See id. (cleaned up).
Moreover, in this case, the Habendum Clause does not cause the
mind to come to no other conclusion but that Susan intended the
Covenants to be enforceable against Lots 1A and 1B. The
Habendum Clause is boilerplate language that could mean many
different things, and similar language is likely found in most
warranty deeds. Accordingly, this vague reference to
“restrictions” in the Habendum Clause does not create a nexus
sufficient to satisfy the statute of frauds. Like the Amended Plat,
the Warranty Deeds were signed eight years after the Covenants
and evidence a discrete transaction that is wholly unrelated to
the creation of the Covenants: the conveyance of Lots 1A and 1B
from Brad and Susan to Micah Capener. Therefore, we conclude
that, despite the reference to “restrictions,” the Warranty Deeds
do not constitute separate writings connected to a single
transaction that satisfy the statute of frauds.
¶14 Third, the district court’s statute of frauds analysis was
flawed because it relied on circumstances surrounding other
transactions that were unrelated to the creation of the
Covenants. In its ruling, the court correctly stated that it “can
look at all the circumstances surrounding the creation of” the
Covenants. The analysis that followed, however, related to the
circumstances surrounding the creation of the Amended Plat,
the Warranty Deeds, and the Capeners’ conveyance of Lots 1A
and 1B to themselves as co-trustees. Not only did these events
occur over eight years after the creation of the Covenants, but
these events were separate transactions that did not constitute
“writings [that] evidence a single transaction and should be read
together as fulfilling the requirements of the Statute of Frauds.”
Id. at 373.
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¶15 The standard under Gregerson requires that the writings
and circumstances taken together “unmistakably” show they
are related to a single transaction so that “no other reasonable
conclusion” from the evidence can be made. Even giving
every reasonable inference to the Thompsons, the facts before
the district court fail to meet this standard. We therefore
conclude that summary judgment on this issue was denied
in error.
II. Ratification
¶16 Ratification on these facts similarly fails as a matter of
law. “A principal may impliedly or expressly ratify an
agreement made by an unauthorized agent.” Bradshaw v.
McBride, 649 P.2d 74, 78 (Utah 1982). However, “ratification
requires the principal to have knowledge of all material facts and
an intent to ratify.” Id. Here, the district court erred by relying on
the Amended Plat and Warranty Deeds to determine that Susan
had “knowledge of all material facts and an intent to ratify.” See
id. As discussed above, supra ¶¶ 12–14, these documents are
wholly unrelated to the creation of the Covenants, do not make
reference to the Covenants, and do not contain any material facts
about the Covenants. Further, even if the Amended Plat and
Warranty Deeds did make Susan aware of the Covenants
generally—a fact not apparent in this record—that fact still falls
short of showing that Susan intended to ratify Brad’s signing the
Covenants on her behalf.
¶17 Similarly, the district court erred in concluding that Susan
ratified by silence when she did nothing to disaffirm the
Covenants. Although “[u]nder some circumstances failure to
disaffirm may constitute ratification of the agent’s acts,”
Bradshaw, 649 P.2d at 78, “the same kind of authorization that is
required to clothe an agent initially with authority to contract
must be given by the principal to constitute a ratification of an
unauthorized act,” id. at 79. In other words, “[w]here the law
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requires the authority to be given in writing, the ratification
must also generally be in writing.” Id. Accordingly, where the
Covenants are subject to the statute of frauds, Susan could not,
as a matter of law, ratify the Covenants by silence.
¶18 Finally, the factual statements of the parties do not
otherwise support any inference of Susan’s intent to ratify. The
only reference to Susan found in any of the statements of fact
note that her signature merely appears on the Warranty Deeds
and Amended Plat referenced above. There are no other facts
showing Susan’s awareness of the Covenants, nor are any facts
indicative of any circumstances where Susan acknowledged the
existence of, or remained silent concerning, the Covenants under
circumstances where one in her position would be expected to
respond. Accordingly, we cannot agree that the parties’
statements of fact indicate any awareness by Susan of the
Covenants or her intentions regarding their applicability to Lot
1, which became Lots 1A and 1B.
¶19 Where neither Susan’s silence nor the other writings
support any inference that Susan (1) had knowledge of all
material facts relating to the Covenants, (2) intended to ratify the
Covenants, or (3) ratified, in writing, Brad’s act of executing the
Covenants on her behalf, we conclude that Brad’s signing of the
Covenants was not ratified by Susan and therefore summary
judgment was erroneously denied on that ground.
CONCLUSION
¶20 We conclude that the other writings offered in this case
do not have a nexus with the creation of the Covenants sufficient
to satisfy the statute of frauds. We further conclude that the facts
and arguments presented on summary judgment below lack a
sufficient basis to show that Brad’s signing of the Covenants was
ratified by Susan. Therefore, summary judgment in this case was
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denied in error, and we reverse and remand for further
proceedings consistent with this opinion. 5
5. The Thompsons also ask us to affirm on grounds that the facts
and circumstances in this case establish an equitable servitude.
The district court did not make any ruling under this theory, and
factual issues remain as to whether an equitable servitude exists.
Therefore this issue remains outstanding and should be
addressed by the district court in the first instance on remand.
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