2022 UT App 37
THE UTAH COURT OF APPEALS
JON F. BUTLER,
Appellant and Cross-appellee,
v.
MEDIAPORT ENTERTAINMENT INC. AND RED TOUCH MEDIA LTD.,
Appellees and Cross-appellants.
Opinion
No. 20200465-CA
Filed March 24, 2022
Third District Court, Salt Lake Department
The Honorable Andrew H. Stone
No. 130901072
Diana J. Huntsman and David C. Harless,
Attorneys for Appellant and Cross-appellee
Barry N. Johnson, Daniel K. Brough, and Ryan M.
Merriman, Attorneys Appellees and
Cross-appellants
JUDGE RYAN M. HARRIS authored this Opinion, in which
JUDGES JILL M. POHLMAN and RYAN D. TENNEY concurred.
HARRIS, Judge:
¶1 The district court excluded all evidence supporting Jon F.
Butler’s counterclaims—filed against his former employer in
litigation over the validity of a specific employment agreement—
because Butler made only vague disclosures regarding the
computation of his claimed damages. The court then summarily
dismissed those counterclaims for lack of evidence. Butler
appeals that dismissal, asserting that his damages disclosures
were sufficient or, in the alternative, that his failure to make
proper disclosures was harmless under the circumstances.
Butler’s former employer—Mediaport Entertainment Inc.
Butler v. Mediaport Entertainment
(Mediaport)—cross-appeals the denial of its motion for attorney
fees. We affirm the district court’s rulings in all respects.
BACKGROUND
¶2 In 2001, Butler founded a company—Mediaport—to
market and sell a system he invented for selecting and
downloading music tracks onto a CD or similar device. Some
years later, Mediaport was acquired by Red Touch Media Ltd.,
and Butler continued to work for the company after the
acquisition. For ease of reference, unless otherwise specified, we
refer to the company simply as “Mediaport,” regardless of
whether our reference points to a pre-acquisition or post-
acquisition event.
¶3 In 2012, roughly a year after the acquisition, Butler
provided the company’s new owners with a copy of an
employment agreement (the Agreement) that he claimed he and
Mediaport had entered into before the acquisition. The
Agreement contained provisions stating that, upon his
termination for any reason other than for cause, Butler would
“be entitled to severance in an amount equal to three (3) full
years of Base Salary,” as well as “all compensation and benefits
earned but not yet paid,” including credit for “unused vacation,
sick and personal days.” “Base Salary” is defined in the
Agreement by reference to an attached “Schedule A,” which in
turn specifies that Butler’s “Base Salary,” as of July 1, 2003, was
$130,000 per year. The Agreement also provided that “[a]ny
dispute, controversy, or questions arising under, out of, or
relating to this Agreement . . . shall be referred for arbitration,”
and that, “[i]n connection with any arbitration, the prevailing
party shall be entitled to recover its costs and reasonable
attorneys’ fees.”
¶4 In February 2013, Mediaport terminated Butler’s
employment, and Butler claimed entitlement to the severance
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Butler v. Mediaport Entertainment
benefits discussed in the Agreement. But Mediaport refused to
pay those benefits, apparently espousing the belief that the
Agreement was neither valid nor enforceable, and that it had
additionally been superseded by another arrangement. That
same month, Mediaport initiated this lawsuit, stating several
claims for relief against Butler, including damages claims, but
chiefly a request for a judicial declaration that the Agreement
was unenforceable and that Mediaport owed Butler nothing.
¶5 Butler responded by filing a counterclaim. In addition to
claims for declaratory and injunctive relief regarding the
Agreement’s validity, Butler’s initial counterclaim contained two
different claims for damages: one for breach of contract and
another for conversion. Butler later amended his pleading to
include additional damages claims; as amended, Butler’s
counterclaim stated five such claims against Mediaport. First,
Butler accused Mediaport of breaching the termination and
severance provisions of the Agreement; on this claim, Butler
sought “a sum exceeding one million dollars ($1,000,000.00).”1
Second, Butler set forth a claim for breach of the implied
covenant of good faith and fair dealing, accusing Mediaport of
“diluting his shares” of stock in the company and damaging him
“in an amount to be determined at trial, but in no event less than
$150,000.00.” Third, Butler stated a claim of conversion, accusing
Mediaport of improperly taking some of his personal items from
his office while he was away, and asserting that he had been
1. In his original counterclaim, Butler included a statement in the
“background facts” section alleging that Mediaport had “failed
to pay [him] three times his annual salary at the time
[Mediaport] was acquired by Red Touch . . . , as required by” the
Agreement. But that statement was not included in Butler’s
amended counterclaim, which superseded the original; the
amended document contains no direct references to Butler being
entitled to recover three times his salary as severance.
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Butler v. Mediaport Entertainment
damaged “in an amount to be determined by the fact-finder.”
Fourth, Butler set forth a defamation claim, accusing Mediaport
of “ma[king] and publish[ing] false statements” about him, and
damaging him in an unspecified amount. Finally, Butler accused
Mediaport of tortiously interfering with his business and
contractual relations, asserting that he had been damaged “in an
amount to be proven at trial, but no less than $200,000.00.”
Butler also sought “costs and attorneys’ fees” under the “terms
of the [Agreement].” Butler attached a copy of the Agreement to
his amended counterclaim.
¶6 Butler’s initial disclosures—which he served on
Mediaport after filing his initial counterclaim but before filing
the amended one—contained the following damages disclosure,
quoted here in its entirety:
Because of the lack of documents available to
[Butler], he cannot provide an exact calculation of
damages at this time. It is estimated that the
damages suffered by [Butler] approximate
$900,000.
Butler’s initial disclosures contained no further computation or
categorization of damages, nor any explanation of how he
arrived at the $900,000 figure. Butler produced some 150 pages
of documents with his initial disclosures, but none of those
documents purported to offer any computation of damages. And
although Butler once supplemented his initial disclosures, that
supplement did not provide any additional information
regarding computation of damages. Butler never supplemented
his damages disclosures.
¶7 During the discovery period, Mediaport asked Butler via
interrogatory to “[i]dentify all facts supporting your allegation,
contained in . . . the Counterclaim, that . . . [Mediaport is]
indebted to [Butler] for accrued benefits under the terms of [the
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Butler v. Mediaport Entertainment
Agreement] in a sum exceeding on[e] million dollars
($1,000,000).” Butler responded as follows:
All of [Butler’s] records were either turned over to
Mediaport . . . or were retained by the company
. . . . For this reason [Butler] cannot respond with
certainty to this interrogatory. [Mediaport has] the
[Agreement], which speaks for itself. Specifically,
the contract called for severance benefits, which
included, but were not limited to, payment of three
times the annual salary, compensation for benefits,
and pre-payment of legal fees in litigation to
enforce the contract. These severance benefits have
not been paid and are estimated to exceed
$1,000,000.00 in value.
¶8 Mediaport also took Butler’s deposition and asked him
questions about his claim for breach of the termination and
severance provisions contained in the Agreement. When asked
what his base salary was when he first had one, Butler
responded that it was “130.” But Butler maintained that he had
never actually been paid $130,000 per year because Mediaport
had been “deferring” some of his compensation; he also had a
hard time answering questions related to how much salary he
had actually been paid while in Mediaport’s employ.
¶9 During the deposition, Mediaport asked Butler questions
about a letter (the Hubbard Letter) that had been written by
Mediaport’s chief operating officer (COO) in 2012, just months
before Butler was terminated. That letter contained a tally of the
value of the vacation and sick days Butler had purportedly
accrued, as well as two alternative tallies of the deferred
compensation Butler had purportedly accrued. The Hubbard
Letter also contained a reference to a possible increase in Butler’s
base salary, from $130,000 to $190,000.
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Butler v. Mediaport Entertainment
¶10 The fact discovery period ended in June 2015. After that,
the litigation stagnated for several years, with neither party
taking any meaningful action to move it forward toward trial.
Finally, in early 2018, Mediaport filed a motion in limine seeking
to exclude all of Butler’s damages-related evidence, asserting
that Butler had failed to comply with the disclosure obligations
set forth in rule 26(a)(1) of the Utah Rules of Civil Procedure. At
the same time, Mediaport also filed a motion for summary
judgment, arguing that, if its motion in limine were granted,
Butler would be bereft of evidence supporting his claimed
damages and that all his claims would on that basis be subject to
dismissal.
¶11 After full briefing and oral argument, the district court
granted both motions, but only in part. The court first
determined that Butler’s damages disclosures “fail[ed] to meet
the requirements of” rule 26(a)(1). The court next examined
whether Butler’s noncompliance with the rule’s requirements
was harmless and determined that, for many of his
counterclaims, it was not. Regarding all of Butler’s claims other
than the one for breach of contract, the court concluded that
Butler’s faulty disclosures had harmed Mediaport because those
claims alleged nonspecific damages and Butler had made no
effort, during discovery or otherwise, to illuminate the amount
of damages he sought on those claims. The court therefore
excluded all of Butler’s damages-related evidence related to
those claims, and ruled that Mediaport was entitled to summary
judgment on each of them due to Butler’s inability to prove
damages.
¶12 With regard to Butler’s claim for breach of contract,
however, the district court’s ruling was more complex. The court
concluded that Mediaport was in possession of sufficient
information—through sources other than Butler’s initial
disclosures (specifically, from Butler’s counterclaim and from
information learned during discovery)—to be able to understand
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Butler v. Mediaport Entertainment
and defend against Butler’s claim for payment of three times his
base salary upon termination. In the court’s view, this portion of
Butler’s damages was “readily calculated given an existing
salary,” and therefore Butler’s failure to provide that calculation
in a formal damages disclosure was harmless. As to Butler’s
claims for payment of deferred compensation and benefits upon
termination, the court made no definitive ruling, but concluded
that Butler’s disclosure failures might be considered harmless if
Mediaport possessed evidence demonstrating that “the parties
each understood that specific amounts were owing to Butler,”
but that they would not be considered harmless if the amount of
Butler’s entitlement were “subject to factual debate.” The court
therefore allowed Butler’s counterclaim for breach of contract to
survive and proceed toward trial. Sometime later, the court
scheduled a ten-day jury trial to take place in March 2020.
¶13 Less than two weeks before the trial was scheduled to
begin, Mediaport filed a renewed motion in limine, asking the
court to reconsider its earlier decision and this time exclude
Butler’s damages-related evidence regarding his breach of
contract claim. In the motion, Mediaport asserted that a recent
opinion from our supreme court—Keystone Insurance Agency,
LLC v. Inside Insurance, LLC, 2019 UT 20, 445 P.3d 434—required
exclusion of Butler’s damages evidence and dismissal of his last
remaining claim for damages. The court heard argument on the
motion at a final pretrial conference and, at the conclusion of the
hearing, granted the motion. In the court’s view, Butler’s claims
for post-termination deferred compensation and unpaid benefits
were directly foreclosed by Keystone. The court noted that if it
were to find Butler’s disclosures harmless merely because “there
ended up being information [e.g., the Hubbard Letter] in the
possession of [the] defendant that indicated what [the] damages
were,” exclusion of evidence for faulty damages disclosures
would almost never occur, because in “most every commercial
case a plaintiff could later point to some document that supports
their [damages] theory and say ‘That’s been my theory all
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Butler v. Mediaport Entertainment
along.’” And while the court acknowledged that Butler’s claim
for payment of three times his base salary at termination
presented a closer question, the court excluded Butler’s evidence
supporting his damages on that claim too, concluding that
Butler’s disclosure had “lumped together” all of his contract
claims, and that “there is debate” about the proper salary figure
to use in the Agreement’s treble multiplier. Accordingly, the
court excluded “all evidence” supporting Butler’s contractual
damages claims, and on that basis dismissed Butler’s
counterclaim for breach of contract, with prejudice and on the
merits.
¶14 Following the court’s ruling, Mediaport agreed that,
“without a claim for breach of the [Agreement] by Butler, [it
had] no reason to try [its] claims” against him, and it consented
to dismissal of its claims without prejudice. In light of that
concession, Butler’s counsel agreed that “if there’s no damages,
[then] I don’t think there’s any case left,” and the court
determined that any decision it might make on Butler’s claims
for declaratory relief “would be an advisory opinion,” and
therefore that claim too was subject to dismissal.
¶15 Following the court’s dismissal of all claims, both sides
filed post-judgment motions. Butler filed a motion to alter or
amend the judgment, asking the court to reconsider its ruling.
The court denied that motion. For its part, Mediaport filed a
motion seeking some $200,000 in attorney fees, arguing that it
was entitled to fees pursuant to the Agreement and Utah’s
reciprocal attorney fees statute, see Utah Code Ann. § 78B-5-826
(LexisNexis 2018), even though its position was that the
Agreement was unenforceable. The court denied that motion as
well, concluding that the attorney fees provision in the
Agreement applied, by its terms, only to fees incurred during
arbitration.
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Butler v. Mediaport Entertainment
ISSUES AND STANDARDS OF REVIEW
¶16 Both sides now appeal. Butler takes issue with the district
court’s decision to exclude his damages-related evidence and on
that basis dismiss his damages counterclaims.2 Mediaport, in a
2. Butler also raises two additional arguments that do not merit
extended discussion. First, he complains that Mediaport’s
renewed motion in limine was, in actuality, a tardy and
disguised motion for summary judgment. This is incorrect. We
acknowledge Butler’s point that parties should not be able to
dodge dispositive motion deadlines by cloaking summary
judgment motions under a motion in limine label. But this is not
what happened here. In this case, not only was Mediaport’s
renewed motion in limine based on Utah Supreme Court case
law—Keystone Insurance Agency, LLC v. Inside Insurance, LLC,
2019 UT 20, 445 P.3d 434—issued after the dispositive motion
deadline, but that motion sought only exclusion of certain
evidence on entirely procedural grounds; it did not ask the court
to summarily consider the merits of any particular claim. The
summary judgment aspect came into play only after the court
granted the motion in limine, leaving Butler unable to prove
damages on any of his claims. Rather than wait until the close of
Butler’s case-in-chief to grant an inevitable directed verdict for
lack of proof of damages, the court acted appropriately, not to
mention efficiently, in choosing to take up the matter prior to
trial. Second, Butler contends that, by reconsidering its 2018
ruling and entering summary judgment in Mediaport’s favor,
the court denied Butler his constitutional right to his day in
court. Not only is this argument unpreserved for our review, it
also fails on the merits. Due process affords litigants an
opportunity to be heard, not a guarantee of a day in court; having
one’s case dismissed on procedural grounds does not amount to
a due process violation unless it can be shown that the relevant
procedural requirement “foreclose[d] [a party’s] meaningful
(continued…)
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Butler v. Mediaport Entertainment
cross-appeal, challenges the court’s denial of its motion for
attorney fees.
¶17 Regarding Butler’s appeal, we review for correctness the
district court’s conclusion that Butler’s disclosures were
inadequate, because that determination is at root a question of
interpretation of rule 26 of the Utah Rules of Civil Procedure. See
Keystone Ins. Agency, LLC v. Inside Ins., LLC, 2019 UT 20, ¶ 12, 445
P.3d 434 (“We review a district court’s interpretation of our rules
of civil procedure, precedent, and common law for
correctness.”). But we review for abuse of discretion the court’s
determination that Butler’s faulty disclosures were not harmless.
See id. ¶¶ 12, 18–19 (noting that the court, in that case, “did not
abuse its discretion in finding” that a faulty disclosure was not
harmless).
¶18 Regarding Mediaport’s cross-appeal, in assessing a
district court’s decision to award (or not to award) attorney fees
“pursuant to a contract, we review the district court’s
interpretation of the contract language for correctness.” See
Robinson v. Robinson, 2016 UT App 32, ¶ 44, 368 P.3d 147.
ANALYSIS
I. Butler’s Appeal
¶19 Before ordering the exclusion of all Butler’s damages-
related evidence, the district court made two important
(…continued)
access to the justice system.” See In re adoption of B.Y., 2015 UT 67,
¶ 27, 356 P.3d 1215 (quotation simplified). Butler does not even
attempt to make that showing; indeed, he was capable of
complying with rule 26’s disclosure requirements, but simply
failed to do so.
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Butler v. Mediaport Entertainment
determinations. First, it concluded that Butler’s damages
disclosures did not comply with the requirements of rule
26(a)(1)(C) of the Utah Rules of Civil Procedure. Second, the
court determined that Butler’s failure to comply with his
disclosure obligations was not harmless. Butler challenges both
of these determinations, and we examine each of them in turn,
following a brief discussion of the governing law.
A
¶20 Our discovery rules—in a requirement that has been in
place since 1999, and in its current basic form since 2011—
require parties, at the outset of their involvement in litigation, to
provide certain disclosures to their litigation opponents; parties
must do so “without waiting for a discovery request.” See Utah
R. Civ. P. 26(a)(1). In addition to information about witnesses
and documents supporting a party’s claims, these initial
disclosures must include information about the damages, if any,
that parties intend to claim in the lawsuit. See id. R. 26(a)(1)(C).
In particular, the rule requires parties to provide their opponents
with “a computation of any damages claimed and a copy of all
discoverable documents or evidentiary material on which such
computation is based, including materials about the nature and
extent of injuries suffered.” Id. These required initial damages
disclosures need not, in every case, contain a to-the-penny
calculation; indeed, the drafters of the 2011 amendments to rule
26 recognized that parties may not know, at the outset of a case,
exactly what their damages amount to, and that “damages often
require additional discovery.” Id. R. 26(a)(1) advisory
committee’s note to 2011 amendment. But the rules specify that
“[a] party is not excused from making disclosures or responses
because the party has not completed investigating the case.” Id.
R. 26(d)(3); see also id. R. 26(a)(1) advisory committee’s note to
2011 amendment (emphasizing that damages disclosures should
not as a matter of course simply be “deferred until expert
discovery” because “[e]arly disclosure of damages information is
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Butler v. Mediaport Entertainment
important” and “is a critical factor in determining
proportionality”). In the drafters’ view, the damages disclosure
requirement is intended to require parties to “make a good faith
attempt to compute damages to the extent it is possible to do
so,” and to “provide all discoverable information on the subject.”
Id. R. 26(a)(1) advisory committee’s note to 2011 amendment.
¶21 And the rules require timely supplementation of all
disclosures, including damages disclosures. See id. R. 26(d)(5).
Under this requirement, parties who do not possess enough
information at the outset of a case to provide complete damages
disclosures must supplement those disclosures as soon as they
discover the information needed to complete the computation.
Id.
¶22 In the years since these damages disclosure rules were
enacted, Utah appellate courts have interpreted them to require,
at a minimum, a disclosure that damages are in fact being
claimed, the categories of any such damages, and a description
of the method by which the party intends to compute those
damages. See Keystone Ins. Agency, LLC v. Inside Ins., LLC, 2019
UT 20, ¶ 17, 445 P.3d 434 (stating that “even if a plaintiff cannot
complete its computation of damages before future events take
place, the fact of damages and the method for calculating the
amount of damages must be apparent in initial disclosures”
(quotation simplified)); Vanlaningham v. Hart, 2021 UT App 95,
¶ 14 n.1, 498 P.3d 27 (citing federal cases, and quoting this
language: “Where a party fails to properly identify a category of
damages or to provide the calculations underlying it, it is within
the court’s discretion to exclude evidence relating to those
damages” (quotation simplified)).
¶23 The rule itself prescribes a penalty for noncompliance
with these disclosure obligations: “If a party fails to disclose or
to supplement timely a disclosure . . . , that party may not use
the undisclosed witness, document, or material at any hearing or
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Butler v. Mediaport Entertainment
trial unless the failure is harmless or the party shows good cause
for the failure.” Utah R. Civ. P. 26(d)(4). On this point, the
advisory committee was clear:
The penalty for failing to make timely disclosures
is that the evidence may not be used in the party’s
case-in-chief. To make the disclosure requirement
meaningful, and to discourage sandbagging,
parties must know that if they fail to disclose
important information that is helpful to their case,
they will not be able to use that information at trial.
The courts will be expected to enforce them unless
the failure is harmless or the party shows good
cause for the failure.
Id. R. 26(a)(1) advisory committee’s note to 2011 amendment; see
also Keystone, 2019 UT 20, ¶ 16 n.4 (quoting this note with
approval but recognizing that courts “attach no decisional
authority to advisory committee reports”).
¶24 Applying these rules and precedents, the district court
determined that Butler’s damages disclosures were insufficient,
and did not meet the requirements of rule 26(a)(1)(C). With
regard to whether Butler’s failure to disclose was harmless, the
court issued a series of rulings. First, in its 2018 ruling, the court
determined that, regarding all of Butler’s damages claims other
than for breach of contract, the failure to disclose was not
harmless; Butler does not appeal that ruling. Next, in that same
ruling the court determined that, with regard to Butler’s breach
of contract claim, the failure to disclose was not necessarily
harmless. In its 2020 ruling, however, the court reconsidered that
second determination and concluded, in light of Keystone, that
Butler’s failure to disclose was in fact not harmless, even as
applied to his breach of contract claim. At Butler’s request, we
now examine the propriety of the 2020 ruling, beginning with a
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discussion of the sufficiency of Butler’s damages disclosures, and
concluding with a discussion of harmlessness.
B
¶25 We need not linger very long on the question of whether
Butler’s damages disclosures were sufficient. They quite clearly
were not. As noted above, Butler’s disclosures were cursory, and
made no effort to either categorize his damages or offer any
method by which those damages might be computed. He stated
only that he was unable to provide an “exact calculation of
damages at [that] time,” but that he “estimated” that his total
combined damages, on both of his damages claims then pleaded,
would “approximate $900,000.” At the time Butler made this
disclosure, he had stated counterclaims for both breach of
contract and conversion, and his disclosure made no effort to
differentiate the damages between those claims. As was made
clear later, even his breach of contract claim encompassed
several different aspects of damages (e.g., benefits, deferred
compensation, and severance), and he made no effort to
categorize or quantify those claims either.
¶26 Butler also made no effort whatsoever to supplement his
damages disclosures, even though he later amended his
counterclaim to include three new damages claims. He did make
one disclosure supplementation—thus evidencing an awareness
of the requirement—but that supplementation had nothing to do
with damages.
¶27 Butler attempts to justify his rather spare disclosures by
relying on Williams v. Anderson, 2017 UT App 91, 400 P.3d 1071.
In that case, the plaintiff’s chief damages claim was for recovery
of 30% of the purchase price that one company paid for another.
Id. ¶ 3. In his initial disclosures, the plaintiff stated this
computation quite plainly, although he offered no final claimed
damages number and did not specify the purchase price that
would need to be multiplied by 30%. Id. ¶¶ 5, 7. We held this
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Butler v. Mediaport Entertainment
disclosure to be sufficient, noting that it “described the precise
components [that the plaintiff] intended to factor into his
damages claim,” including “both the fact of damages and the
method by which those damages would be calculated.” Id. ¶ 19.
We stated that, because the plaintiff had described “the process
for calculating his claimed” damages, it met the requirements of
rule 26(a)(1)(C). Id.
¶28 This case is quite different from Williams. In particular,
Butler’s damages disclosure was far less specific than the one at
issue in Williams. Although the Williams disclosure included a
clear formula to be used in computing the single item of
compensatory damage, Butler’s disclosure simply stated an
estimated number, and made no effort to offer any method by
which that number might be computed. Moreover, in Williams,
there was no uncertainty about the purchase price that would
need to be multiplied by 30%; the plaintiff did not know what
that price was at the time its disclosures were made, but the
defendant did. See id. In this case, there was a lot of uncertainty
about the amounts Butler was claiming as damages, even
regarding the less complex aspects of his breach of contract
claim. See infra ¶ 46.
¶29 Butler also points to documents other than his
disclosures—such as his counterclaim, his discovery responses,
and the Hubbard Letter—that contained information he claims
he intended to use to prove his damages. But while those other
sources (discussed in more depth below) may be relevant to
whether his failure to disclose was harmless, they have no role to
play in evaluating whether his disclosures—viewed on their
own—met the requirements of rule 26(a)(1)(C).
¶30 Under the circumstances presented here, Butler’s
damages disclosures were insufficient. Although they included
an estimated total figure, and thus indicated that Butler would
be claiming damages, those disclosures lumped all of Butler’s
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Butler v. Mediaport Entertainment
damages claims together and made no effort to either categorize
Butler’s damages claims or offer any method by which any of
those damages might be computed. Such a disclosure falls well
short of the mark set out in rule 26, and the district court did not
err in so concluding.
C
¶31 Because Butler’s damages disclosures were insufficient,
Butler’s damages evidence is to be excluded unless Butler’s
failure to disclose “is harmless” or Butler can show “good cause”
for his failure. See Utah R. Civ. P. 26(d)(4). In his brief, Butler
focuses almost exclusively3 on the harmlessness option, and
asserts that his failure to disclose visited no harm on Mediaport
because the company had access, from other sources, to
information sufficient to allow it to defend against Butler’s
damages claims. For the reasons discussed, we conclude that the
district court did not abuse its discretion in concluding that the
inadequacies in Butler’s damages disclosures were not harmless.
3. Butler contends, as an alternative to harmlessness, that he had
“good cause” for failing to provide adequate damages
disclosures, proffering as cause his asserted “reliance” on the
district court’s 2018 ruling. This argument suffers chiefly from
chronological infirmities: Butler’s failure to provide sufficient
initial disclosures during the fact discovery period, which ran
until 2015, cannot be justified by a 2018 court ruling. Indeed,
Butler does not adequately explain how his failure to provide
damages disclosures had anything to do with the court’s ruling.
After all, the 2018 ruling was made in response to Mediaport’s
motion challenging the adequacy of those very disclosures.
Butler appears to argue that he relied on the 2018 ruling by
“proceed[ing] with this case for two years” and by “preparing
for trial,” but these actions do nothing to explain why Butler
failed to provide adequate disclosures in the first place.
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¶32 Before delving into the merits of the harmlessness
inquiry, we pause to note two procedural hurdles that work
against Butler here. First, as previously noted, see supra ¶ 17, we
review the district court’s harmlessness decision for abuse of
discretion. Under this standard of review, “[t]he question
presented is not whether we” would have made the same
decision had we been in the district court’s shoes, but instead
whether “we find an abuse of discretion in the district [court’s]
decision.” See Stichting Mayflower Mountain Fonds v. United Park
City Mines Co., 2017 UT 42, ¶ 49, 424 P.3d 72; see also Gunn Hill
Dairy Props., LLC v. Los Angeles Dep’t of Water & Power, 2015 UT
App 261, ¶ 24, 361 P.3d 703 (Orme, J., concurring) (stating that,
under an abuse of discretion standard of review, we will affirm
even if we might not have made the same decision, so long as
the decision “was within the broad range of discretion entrusted
to” the district court). Second, Mediaport bears no burden to
demonstrate that it was harmed by Butler’s inadequate
disclosures; instead, it is Butler who bears the burden of
demonstrating harmlessness. See Keystone Ins. Agency, LLC v.
Inside Ins., LLC, 2019 UT 20, ¶ 18 n.7, 445 P.3d 434 (“Under a
plain language reading of rule 26(d)(4), the burden to
demonstrate harmlessness or good cause is clearly on the party
seeking relief from the disclosure requirements.”).
¶33 On the merits of the harmlessness inquiry, the “key
question” is “whether a plaintiff’s failure to disclose its
categories and methods of computing damages impaired the
defense’s ability to ‘properly build a defense against the
damages claimed.’” Chard v. Chard, 2019 UT App 209, ¶ 45, 456
P.3d 776 (quoting Keystone, 2019 UT 20, ¶ 20). Given the practical
realities of modern litigation, most of a party’s “defense-
building” activities take place during the discovery process.
Indeed, we have identified several factors for courts to consider
in assessing harmlessness in this context, all of which have to do
with the extent of impairment to a party’s ability to build a
defense during the discovery period and to make decisions
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about a case that are proportionate to its size and scope. See id.
Specifically, in this context courts should consider whether a
party, despite its opponent’s poor disclosures, was able to (1)
“question witnesses” during discovery, (2) figure out the case’s
“tier status” under rule 26(c), “(3) understand the nature and
quantity of the plaintiff’s claimed damages, and (4) understand
the scope and cost of the litigation pursued.” Id.; see also Keystone,
2019 UT 20, ¶¶ 19–20.
¶34 Because this inquiry is focused on whether the potentially
harmed party was able to appropriately deploy resources and
discover relevant facts during the discovery period, courts
assessing harmlessness should consider the point in time at
which additional information that may point toward
harmlessness was received by the opposing party. Where
additional illuminating information was received by an
opposing party “relatively early during the discovery period,”
within enough time to allow that party to use that information
while taking depositions and propounding other discovery
requests, then any inadequacies in a party’s damages disclosures
may turn out to be harmless. See Chard, 2019 UT App 209, ¶ 48.
But where a party “waits until the twilight hours of fact
discovery” or, worse, until “the close of expert discovery” to
provide illuminating information, thereby depriving the
opposing party of any meaningful opportunity to use, during
discovery, the information that should have been initially
disclosed, the faulty disclosures may well turn out to be harmful,
especially where no extension of the discovery deadlines is
sought or given. See Keystone, 2019 UT 20, ¶¶ 13, 19 (quotation
simplified).
¶35 In addition to considering when an innocent party receives
illuminating information, in this context we have also considered
the relative simplicity—or complexity—of the non-disclosing
party’s damages claims. Where the damages claims are simple
and easily computed, courts are more likely to conclude that an
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innocent party’s receipt of illuminating information from a
source other than initial disclosures renders inadequate
disclosures harmless. For instance, we concluded in Chard that a
faulty disclosure was harmless, at least with regard to one
discrete claim for unjust enrichment, where the non-disclosing
party was making a simple damages claim: recovery of precisely
$120,000, as described clearly in its pleadings and as set forth in
two short invoices that it had produced early in the discovery
period. See 2019 UT App 209, ¶¶ 40, 43–46; cf. Bad Ass Coffee Co.
of Hawaii v. Royal Aloha Int’l LLC, 2020 UT App 122, ¶¶ 31–37,
473 P.3d 624 (finding a party’s damages disclosures adequate, in
part because the damages theory was simple and partially
stipulated and the non-disclosing party explained its theory “in
its counterclaim and in its initial disclosures”).
¶36 On the other hand, where a non-disclosing party’s
damages theories are complex, it is more difficult for that party
to demonstrate that inadequacies in its damages disclosures
were harmless. Our supreme court’s decision in Keystone is an
illustrative example. In that case, the plaintiff sought and
identified several categories of damages, including commissions
allegedly earned, but it disclosed no damages computation at
any point during the fact discovery period. See Keystone, 2019 UT
20, ¶ 5. Instead, the plaintiff “waited until the close of expert
discovery to present, for the first time, its damage estimates and
methodologies.” Id. ¶ 13. The plaintiff argued, however, that its
failure to disclose was harmless, because the defendant had itself
generated—and produced during discovery—both a “197-page
spreadsheet” that the plaintiff interpreted as tracking the earned
commissions as well as a “document summarizing” the
spreadsheet. Id. ¶¶ 6, 22. The court rejected the plaintiff’s
“harmlessness” argument, as well as a motion to reconsider its
initial conclusions about the adequacy of the plaintiff’s
disclosures, noting that the plaintiff’s damages theories—
computation of commissions—were “more complex” than the
simple one at issue in Williams v. Anderson, 2017 UT App 91, 400
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Butler v. Mediaport Entertainment
P.3d 1071. See Keystone, 2019 UT 20, ¶ 23.4 The court stated that
the plaintiff’s “focus on [the defendant’s] possession of a
spreadsheet detailing [earned] commissions misunderstands the
burden placed on the plaintiff by rule 26.” Id. The court
characterized the spreadsheet as “a mere tool that could aid in
the calculation of damages—not a dispositive and clear recitation of
what damages [the plaintiff] was after.” Id. And it concluded that,
“[w]ithout a clear computation or theory of what [the plaintiff]
was asking for, it was left to the guesswork of [the defendant] to
determine how the spreadsheet might inform [the plaintiff’s]
theory of the case and what damages it was seeking.” Id.
¶37 And in Vanlaningham v. Hart, 2021 UT App 95, 498 P.3d
27, we reached a similar conclusion. In that case, a former patient
of a dental practice sued the clinic for malpractice. Id. ¶ 2.
Following discovery, the district court concluded that the
plaintiff had failed to satisfy her damages disclosure obligation
under rule 26 because she provided only a bottom-line damages
figure, and not a “mathematical computation or the
methodology” explaining how that figure was derived. Id. ¶ 12
(quotation simplified). The plaintiff appealed, arguing that her
disclosure was adequate or, alternatively, that any inadequacy
was harmless. Id. We rejected the plaintiff’s arguments,
4. We recognize that some of the discussion in Keystone
regarding the complexity of the plaintiff’s damages theory arose
in the context of evaluating the adequacy of the plaintiff’s
disclosures, rather than in the context of evaluating whether any
inadequacies in the plaintiff’s disclosures were harmless. See
Keystone, 2019 UT 20, ¶ 23. However, the relative complexity of
the plaintiff’s damages theories is an issue that can potentially
shed light on both the underlying adequacy of a plaintiff’s
damages disclosures as well as whether any inadequacies in
those disclosures were rendered harmless by other
circumstances.
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concluding that the disclosure was inadequate because the
plaintiff “neglected to provide [the] [d]efendants with any
information that would allow them to discern how the total was
calculated,” and because the defendants “were left to guess at
how much of [the sum total] was for past . . . treatments, as well
as what components figured into her damages claim for future
treatment.” Id. ¶ 15. We also noted that the plaintiff’s damages
theories were more complex than the theories at issue in Williams
and in Bad Ass Coffee, noting in particular that the plaintiff’s
disclosed bottom-line damages figure did “not represent a single
item” but instead was intended to be a composite figure
including both past and future treatment and other items. Id.
¶¶ 17–18. And we concluded that the plaintiff’s inadequate
disclosures were not harmless, because the defendants “were left
guessing” about how the plaintiff calculated her damages, thus
“impairing their ability to properly build a defense.” Id. ¶ 21.
¶38 In this case, Butler asserts that any inadequacies in his
damages disclosures were harmless, at least with regard to his
claim for breach of contract, because Mediaport was in
possession of information from other sources that provided
sufficient insight into Butler’s contractual damages claims. Some
of the information to which Butler points—for instance,
explanations given at the oral argument on Mediaport’s 2018
motion, and information provided in advance of the parties’
2018 mediation—was transmitted far too late to have made any
difference to Mediaport’s ability to build a defense during the
discovery period, which ended in 2015. See Keystone, 2019 UT 20,
¶¶ 13, 19. But other items of information were provided earlier
in the litigation, before the fact discovery period ended, and we
examine those sources of information in more detail.
¶39 First, Butler points to allegations he made in his original
and amended counterclaims. In the original counterclaim, Butler
alleged that Mediaport failed to pay him “three times his annual
salary” upon termination. That statement, however, was
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Butler v. Mediaport Entertainment
removed from the amended counterclaim; in that amended
pleading, Butler asserted more indirectly that he was entitled to
compensation “as called for in” the Agreement, including
“deferred salary and other compensation.” In making these
statements, Butler specifically invoked paragraphs 2 and 5 of the
Agreement, a copy of which he attached to the amended
pleading. He asserted that, on his contract claim alone, he was
entitled to damages “in a sum exceeding” $1 million. Paragraph
2 of the attached Agreement specifies that Mediaport was to pay
Butler a “Base Salary” as set forth on an attached schedule, but
which was subject to being increased over time. The attached
schedule indicates that, as of 2003, Butler’s Base Salary was
$130,000. Paragraph 5 of the Agreement is a lengthy paragraph
comprising three single-spaced pages, including seven separate
subsections that describe things that should happen in the event
that Butler’s employment was terminated. In particular, and
among other things, that paragraph states that, upon
termination, Butler would “be entitled to all compensation and
benefits earned but not yet paid,” including the value of
“unused vacation, sick and personal days.” It also indicates that
Butler “shall be entitled to an amount equal to three (3) full years
of Base Salary.”
¶40 Second, Butler points to his interrogatory responses, in
which he informed Mediaport that he was seeking “severance
benefits, which included, but were not limited to, payment of
three times the annual salary, compensation for benefits, and
pre-payment of legal fees in litigation to enforce the contract,”
and that he “estimated” that these benefits collectively “exceed
$1,000,000.00 in value.”
¶41 Third, Butler points to statements he made at his
deposition, where he told Mediaport that his base salary had, at
first, been “130” but that he had never actually been paid that
amount because Mediaport had been “deferring” some of his
compensation. But in that same deposition, he also had a hard
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Butler v. Mediaport Entertainment
time providing specific answers to questions related to how
much salary he had actually been paid while employed by
Mediaport.
¶42 And finally, Butler points to the Hubbard Letter, in which
Mediaport’s COO set out a purported tally of the amount of the
value of vacation and sick days Butler had accrued, as well as
two alternative purported tallies of the deferred compensation
Butler had accrued. The letter also contained a reference to a
possible increase in Butler’s salary, from $130,000 to $190,000.
¶43 Pointing to all of this information, taken together, Butler
asserts that Mediaport had a sufficient understanding of his
damages claims to be able to adequately deploy resources and
make decisions about defending the case. In particular, Butler
points out that Mediaport always understood this case to be a
Tier 3 case, and that it therefore understood the scope and size of
the litigation he was pursuing. We acknowledge Butler’s point,
and agree that Mediaport, as Butler’s employer, had access to a
lot of information about potential damages that Butler might
claim. But having access to information that may potentially
help form the basis for a plaintiff’s damages claims is not the
same thing as possessing a concrete disclosure from the plaintiff
regarding its claimed damages. We agree with the sentiments of
the district court when it mused that, if possession of this sort of
information were sufficient to render inadequate disclosures
harmless, then harmlessness would be present in “most every
commercial case.” Certainly, Mediaport was in possession of
information that allowed it to make some solid educated guesses
about the types and amounts of damages Butler may have
intended to claim. But that alone is not enough: “any ability on
the part of [the defendant] to guess at potential damages does
not free [the plaintiff] from its obligation to disclose a
computation of damages.” See Keystone, 2019 UT 20, ¶ 20; see also
Vanlaningham, 2021 UT App 95, ¶¶ 19, 21 (rejecting the plaintiff’s
harmlessness argument because her failure to properly disclose
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Butler v. Mediaport Entertainment
her damages left the defendants to “guess at the components of
and how [she] calculated her . . . damages claim”).
¶44 Our decision is driven, to some degree, by the relative
complexity of Butler’s damages theories, especially when
compared to the damages theories at issue in Williams, Chard,
and Bad Ass Coffee. See Bad Ass Coffee, 2020 UT App 122, ¶¶ 31–37
(stating a simple and partially stipulated theory that its damages
were $500,000 because that was the agreed-upon value of certain
in-kind services); Chard, 2019 UT App 209, ¶¶ 40, 43–46 (stating a
simple theory of unjust enrichment damages: $120,000 as
described clearly in pleadings and supported by two invoices);
Williams, 2017 UT App 91, ¶ 3 (stating a simple compensatory
damages theory: entitlement to 30% of the purchase price one
company paid for another). In this case, Butler’s damages
theories are not as simple as he claims. For instance, much of the
information Butler identifies lumped some or all of Butler’s
various—and very different—damages claims together, rather
than clearly identifying a damages computation for each
individual claim. Butler’s initial disclosures, such as they were,
asserted that he had suffered $900,000 worth of damages on his
contract and conversion claims combined. Similarly, and
somewhat contradictorily, Butler’s amended counterclaim and
interrogatory response indicated that his total damages on the
contract claim alone were in excess of $1 million—an amount
intended to include both the claimed severance payment (three
times salary) and also deferred compensation and benefits. A
plaintiff who combines several components of damages into one
composite figure has, by doing so, taken action to make the
situation more—not less—complex. See Vanlaningham, 2021 UT
App 95, ¶ 18 (noting, in determining that disclosures were
inadequate, that the proffered damages figure “does not
represent a single item”).
¶45 Moreover, Butler’s reliance on the Hubbard Letter is, as
the district court correctly perceived, foreclosed by Keystone, the
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Butler v. Mediaport Entertainment
case in which our supreme court rejected a plaintiff’s attempt to
rely on a spreadsheet in the defendant’s possession as
emblematic of the adequacy of its disclosures. See 2019 UT 20,
¶ 23. Like the spreadsheet in Keystone, the Hubbard Letter is “not
a dispositive and clear recitation of what damages [Butler] was
after.” See id. (emphasis omitted). Rather, the Hubbard Letter
was “a mere tool that could aid in the calculation of” Butler’s
damages, and left Mediaport guessing as to exactly how Butler
intended to interpret the document and how much weight he
intended to give it. See id. (stating that the spreadsheet still left
the defendant guessing as to how it “might inform [the
plaintiff’s] theory of the case”).
¶46 Finally, even Butler’s simplest component of damages—
the part of his contract claim in which he claimed entitlement to
payment of three times his salary—is not quite as simple as
Butler asserts. As noted, Butler often combined this claim with
other components of claimed contract damages, leaving
Mediaport to wonder how big a role the severance claim played
in the context of Butler’s overall contract claim. But even
assessing this component of damages separately, we agree with
Mediaport that this claim is more complex than the “30% of an
unspecified purchase price” claim at issue in Williams. First of
all, the information at issue in Williams came in an actual initial
disclosure, and not in a cobbled-together amalgam of later-
produced documents. See Williams, 2017 UT App 91, ¶ 5.
Furthermore, the information to which Butler points requires
Mediaport to follow a series of cross-references from one
document to the next, from the amended counterclaim to two
specific (and lengthy) paragraphs in the body of the Agreement
to a schedule appended to the Agreement. Finally, and perhaps
most importantly, there remained a fair bit of confusion about
the relevant “salary” figure that was supposed to be trebled.
Was it the “Base Salary” identified in the original Agreement
($130,000)? Was it an increased “Base Salary” to which Butler
apparently claimed entitlement later in his employment
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Butler v. Mediaport Entertainment
($190,000)? Or was it his “annual salary,” a phrase Butler used in
his interrogatory response, which could conceivably mean either
the salary to which he thought he was entitled, including unpaid
deferred compensation, or the salary that he had actually been
paid? As noted above, when asked how much he had actually
been paid, Butler had a hard time providing specific figures.
¶47 Butler protests that, based on all this information, it
should have been clear to Mediaport that he was seeking three
times his Base Salary (rather than his annual salary), and that by
“Base Salary” he intended the higher figure referred to in the
Hubbard Letter. At a minimum, he asserts that these relatively
minor factual distinctions should have been left for a factfinder
to sort out. But Butler—like the plaintiff in Keystone—
“misunderstands the burden placed on the plaintiff by rule 26.”
See Keystone, 2019 UT 20, ¶ 23. It is not Mediaport’s responsibility
to cull through the documents and attempt to divine what
Butler’s damages computations might be; it is Butler’s
responsibility to tell Mediaport what those computations are. It
is only in those cases where the damages theories and
computations are clean and simple, and in which the
illuminating information is produced or obtained well in
advance of the end of the fact discovery period, where we can
say that a district court abused its discretion in concluding that
an inadequate disclosure was not harmless. See, e.g., Chard, 2019
UT App 209, ¶¶ 43–46.
¶48 Our mention of the district court’s discretion brings us,
appropriately, back to the standard of review. We recognize that
assessment of harm in this context is a nuanced matter, and that
it is sometimes difficult to tell if a defendant has really been
harmed or is just feigning harm for the purposes of trying to get
the plaintiff’s damages claims dismissed on non-merits grounds
prior to trial. In this context, we recognize that a district court
will almost always have a better vantage point than we do to
make such a call; partly for this reason, we review a district
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Butler v. Mediaport Entertainment
court’s harmlessness determination for abuse of discretion. See
Keystone, 2019 UT 20, ¶ 18. On this record, the district court
determined that Butler had not borne his burden of
demonstrating that his inadequate disclosures were harmless. In
particular, the court concluded that Butler’s faulty disclosures
negatively impacted Mediaport’s ability to defend the lawsuit,
including its decisions about “allocating resources” during the
discovery phase of the case. This decision, while perhaps not the
only possible permissible decision under the circumstances, was
not outside the bounds of the court’s discretion.
¶49 We therefore affirm the district court’s decision to grant
Mediaport’s motion in limine and consequently strike all of the
evidence Butler planned to use to support his damages
counterclaims. And given that Butler therefore had no evidence
to support those counterclaims, we perceive no error in the
court’s decision to dismiss them summarily.
II. Mediaport’s Cross-Appeal
¶50 In its cross-appeal, Mediaport challenges the district
court’s determination that Mediaport was not entitled to recover
the attorney fees it incurred in this litigation. The court
determined that the Agreement, even assuming its validity,
simply did not provide for recovery of attorney fees outside the
arbitration context. We agree with the district court’s
assessment.
¶51 “In general, a party may recover attorney fees only when
provided for by statute or contract—the so-called American
Rule.” USA Power, LLC v. PacifiCorp, 2016 UT 20, ¶ 93, 372 P.3d
629. Here, although Mediaport does make mention of Utah’s
reciprocal attorney fees statute, see Utah Code Ann. § 78B-5-826,
its attorney fees claims are grounded in the Agreement. We must
therefore carefully examine the language of that document; after
all, under the American rule, attorney fees “provided for by
contract . . . are allowed only in strict accordance with the terms of
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Butler v. Mediaport Entertainment
the contract.” Giusti v. Sterling Wentworth Corp., 2009 UT 2, ¶ 73,
201 P.3d 966 (emphasis added) (quotation simplified).
¶52 Here, there are only two sentences in the Agreement that
deal with attorney fees, both of which appear in a paragraph
captioned “Governing Law; Arbitration.” The first such sentence
states that “[a]ny dispute, controversy or questions arising
under, out of, or relating to this Agreement . . . shall be referred
for arbitration,” which “shall be the exclusive and sole means of
resolving any such dispute.” The next relevant sentence states as
follows: “In connection with any arbitration, the prevailing party
shall be entitled to recover its costs and reasonable attorneys’
fees in addition to other relief granted.” (Emphasis added.)
¶53 Butler—at least now5—asserts that these provisions entitle
the prevailing party to recover attorney fees only in an
arbitration setting, and not in connection with litigation pursued
in court. We agree that the plain language of the Agreement
bears no other reasonable interpretation. The parties to the
Agreement—assuming, as noted, but without deciding, that the
Agreement is valid—chose language indicating that recovery of
attorney fees would be available to the prevailing party in any
dispute between them, but only if that dispute was resolved in an
5. Perhaps hedging his bet, Butler in his counterclaim asserted an
entitlement to recover attorney fees pursuant to the Agreement,
even though he filed that counterclaim in court and not before
an arbitrator. Now, however, Butler reads the Agreement as the
district court did, namely, providing for recovery of only those
attorney fees incurred in arbitration. But we do not hold Butler’s
change of heart against him; indeed, had Butler prevailed before
the district court, we suspect Mediaport would not be very eager
to pay attorney fees incurred during the litigation and may well
have taken a different position than it is taking now regarding
the interpretation of the Agreement’s attorney fees provision.
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arbitration proceeding. The Agreement states that attorney fees
are recoverable only “[i]n connection with any arbitration.”
Indeed, there is no mention of entitlement to recover attorney
fees outside of the paragraph captioned “Arbitration.”
¶54 Mediaport resists this conclusion by pointing out that
Butler, by filing his counterclaim in court and proceeding in
litigation, waived his right to arbitration. But even assuming the
truth of that assertion, it is irrelevant to the question at hand; the
Agreement still does not provide for recovery of fees in court-
based litigation. Had either side filed this litigation in arbitration
rather than in court, the prevailing party might very well have
been entitled to recover fees, pursuant to either the terms of the
Agreement or Utah’s reciprocal attorney fees statute. See Utah
Code Ann. § 78B-5-826; see also Hooban v. Unicity Int’l, Inc., 2009
UT App 287, ¶ 10, 220 P.3d 485, aff’d, 2012 UT 40, 285 P.3d 766.
But because neither side opted for arbitration, the Agreement
simply does not provide for any party to recover attorney fees.
¶55 Mediaport further protests that, because it took the
position that the Agreement was invalid, it could not have
availed itself of an arbitration forum—and thereby invoked the
attorney fees provision—without harming its position regarding
the validity of the Agreement. Maybe so. But even assuming that
Mediaport could not have elected arbitration on a provisional
basis, the fact that Butler retained control of the operation of the
attorney fees provision—by being able to choose litigation or
arbitration—is not necessarily unfair and is merely a function of
a plaintiff being able to play a significant role in defining the
scope of litigation. See Ramon v. Nebo School Dist., 2021 UT 30,
¶ 16, 493 P.3d 613 (referring to the claimant as “master of the
complaint,” and stating that our adversarial system of justice
allows a plaintiff “the prerogative of identifying the claims or
causes of action she seeks to sustain in court” (quotation
simplified)).
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Butler v. Mediaport Entertainment
¶56 Thus, because the plain language of the Agreement limits
any recovery of attorney fees to those incurred in arbitration, the
district court did not err in denying Mediaport’s motion for
attorney fees.
CONCLUSION
¶57 The district court correctly determined that Butler’s
damages disclosures were insufficient, and did not abuse its
discretion in determining that Butler had failed to demonstrate
that his inadequate disclosures were harmless. Accordingly, the
court did not err by entering summary judgment, for lack of
evidence of damages, on all of Butler’s damages counterclaims.
And finally, the court correctly denied Mediaport’s motion for
recovery of attorney fees.
¶58 Affirmed.
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