Farm Bureau v. Weston

2023 UT App 136

THE UTAH COURT OF APPEALS

FARM BUREAU MUTUAL INSURANCE,
Appellant and Cross-appellee,
v.
JARED H. WESTON, FARMERS INSURANCE EXCHANGE, PREMATIC
SERVICE CORPORATION, AND WILSON GREEN INSURANCE AGENCY,
Appellees and Cross-appellants.

Opinion
No. 20180699-CA
Filed November 9, 2023

Third District Court, Salt Lake Department
The Honorable Royal I. Hansen
No. 050905850

Trent J. Waddoups, Attorney for Appellant and
Cross-appellee Farm Bureau Mutual Insurance
Troy L. Booher, Beth E. Kennedy, and
Dick J. Baldwin, Attorneys for Appellees and
Cross-appellants Farmers Insurance Exchange and
Wilson Green Insurance Agency
Daniel F. Bertch, Attorney for Appellee and
Cross-appellant Jared H. Weston

JUDGE GREGORY K. ORME authored this Opinion, in which
JUDGE RYAN D. TENNEY concurred. JUDGE RYAN M. HARRIS
concurred in Parts I, II, III.A, III.B.2, IV, and V,
but dissented as to Parts III.B.1 and III.B.3, with opinion.

ORME, Judge:

¶1 This appeal is multifaceted. The threshold issue concerns
whether an insurance policy Farmers Insurance Exchange
 Farm Bureau v. Weston

(Farmers Insurance 1) provided on a vehicle was in effect at the
time the vehicle was involved in an accident in which the other
driver was killed. Following the first bench trial in this case, the
trial court held that Farmers Insurance had properly cancelled the
policy prior to the accident for failure to timely pay a premium.
Despite this ruling, the issue remained whether Farmers
Insurance nonetheless breached its duty to defend when it failed
to offer a defense for Jared H. Weston (Jared)—the driver of the
vehicle it periodically insured—in a lawsuit Farm Bureau Mutual
Insurance (Farm Bureau) initiated as the subrogee of the deceased
driver. The trial court held on summary judgment that Farmers
Insurance breached the duty to defend and, following a second
bench trial, the court awarded Jared $320,000 in damages for
emotional distress plus an additional $128,000 in attorney fees for
that breach. On reconsideration, the court reduced the damages
award to $0 and entered judgment in Jared’s favor for $105,
representing only Jared’s costs. The parties raise several issues on
appeal.

¶2 First, we hold that the arguments Farm Bureau and Jared
raise on appeal are not moot, and we therefore have jurisdiction
to consider them. We then affirm the trial court’s determination
that Farmers Insurance properly cancelled the insurance policy
prior to the accident and certain other of the court’s summary
judgment rulings. Finally, we turn to the issues concerning the
duty to defend. We affirm the court’s ruling that Farmers
Insurance breached the duty to defend and that Jared is not
entitled to damages for emotional distress, but we hold that Jared
is entitled to damages in the amount of the judgment entered
against him in favor of Farm Bureau plus attorney fees.

1. “Farmers Insurance” refers interchangeably to Farmers
Insurance Exchange in its individual capacity and to Farmers
Insurance Exchange, Prematic Service Corporation, and Wilson
Green Insurance Agency, collectively.

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 Farm Bureau v. Weston

BACKGROUND 2

Insurance Policy

¶3 Joelyn Weston (Joelyn) purchased multiple automobile
insurance policies from Farmers Insurance, including one for her
1992 Ford Explorer. On several occasions, Joelyn 3 was late in
paying the insurance premiums, resulting in several lapses in
coverage after Farmers Insurance sent notices of cancellation. In
September 2003, Farmers Insurance sent Joelyn one such notice of
cancellation, requiring payment on or before September 16.
Because Farmers Insurance did not receive full payment until
October 3, Joelyn’s vehicles were not insured from September 16
until October 3, when Joelyn reinstated the policies.

¶4 That December, a new six-month period of coverage began
for Joelyn’s vehicles. The declarations page of the policy provided

2. This appeal arises from the trial court’s grant of summary
judgment and from its findings of fact and conclusions of law
following two bench trials. Accordingly, “in reviewing a district
court’s grant of 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 [corresponding to
those issues] accordingly.” Ockey v. Club Jam, 2014 UT App 126,
¶ 2 n.2, 328 P.3d 880 (quotation simplified). And “on appeal from
a bench trial, we view the evidence in a light most favorable to the
trial court’s findings, and therefore recite the facts [corresponding
to those issues] consistent with that standard and only present
conflicting evidence to the extent necessary to clarify the issues
raised on appeal.” Linebaugh v. Gibson, 2020 UT App 108, n.5, 471
P.3d 835 (quotation simplified).

3. Because Jared and Joelyn Weston share the same last name, we
refer to them by their first names, with no disrespect intended by
the apparent informality.

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 Farm Bureau v. Weston

that the coverage for the vehicles, including for the 1992 Ford
Explorer, was for a six-month period beginning on December 3,
2003, and extending until June 3, 2004. The policy provided that
“[t]his policy with the Declarations includes all agreements
between you and us” and that “[n]o other change or waiver may
be made in this policy except by endorsement, new Declarations
or new policy issued by us.”

¶5 Instead of paying the entire amount due for the six-month
period upfront, Joelyn elected to make monthly payments.
Accordingly, Endorsement E0022 was incorporated into the
policy. Endorsement E0022 stated that “[t]his endorsement is part
of your policy” and that it “supersedes and controls anything to
the contrary.” Endorsement E0022 amended the policy period “to
one Calendar month” and provided that “[t]he premium is due
no later than on the expiration date of the then current monthly
period.” Following the first bench trial, the trial court found that
Endorsement E0022 also incorporated into the insurance contract
the Prematic Service Corporation Monthly Payment Plan
Agreement (the Prematic Agreement). The trial court found that
Prematic Service Corporation (Prematic) “is a billing system that
bills for the Farmers Policies”; that Prematic is entirely owned by
Farmers Group, Inc.; and that “all Prematic’s employees are
full-time employees of Farmers Group, Inc.”

¶6 Under the Prematic Agreement, Joelyn, who was referred
to as “Customer” in the agreement, agreed to appoint Prematic as
her “agent to budget monthly payment of premiums . . . during
the term of [the Prematic Agreement] and to make premium
payments to insurers . . . pursuant to the terms and conditions of
this Agreement.” She further agreed “to forward to Prematic by
the due dates set forth in the bill sent by Prematic . . . a sum equal
to the current monthly payment of the policy(ies) budgeted for
monthly premium payment under this Agreement and a service
charge.”

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 Farm Bureau v. Weston

¶7 Pursuant to Endorsement E0022 and the Prematic
Agreement, each monthly payment was due on the third of each
month. The first Prematic bill was for a period of 45 days of
coverage, and each subsequent bill was for a monthly period of
coverage. 4 This, “by design” according to the trial court, “resulted

4. The trial court found that “[t]he Prematic billing was calculated
so that payments were made approximately forty-five (45) days
before the premium payment was due to” Farmers Insurance.
Farmers Insurance argues that this finding was not supported by
the evidence. We need not address this issue. On appeal, both
Jared and Farm Bureau agree that Prematic’s billing practice—
whatever it was—resulted in an approximate 15-day cushion.
Jared asserted that “the Prematic billing platform billed 15 days
in advance of the period of coverage billed for.” Similarly, Farm
Bureau stated that the initial bill charged for a sum that equaled
“half the amount” of “a monthly premium installment . . . as a
cushion.”
Indeed, the evidence of record demonstrates that although
Prematic’s first bill for the six-month policy period at issue here
was sent out 45 days in advance and reflected 45 days of coverage,
that first bill “bill[ed] out until December 17th,” which was only
approximately 15 days into the new policy period that began on
December 3, 2003. Thus, only about 15 of the days billed were
attributable to the new policy period and the remaining billed
days went toward the prior policy period that ended on December
2. Prematic thereafter billed for a month’s worth of coverage each
subsequent month, resulting in an approximate 15-day buffer to
cover the ten days of coverage Farmers Insurance was statutorily
required to provide following the mailing of a notice of
cancellation for failure to pay the premium when due. See Utah
Code Ann. § 31A-21-303(2)(c)(ii) (LexisNexis Supp. 2022).
Farmers Insurance’s records coordinator testified to that effect,
and this is also consistent with Prematic’s practice of billing for
coverage periods starting on the 18th of one month and ending on
(continued…)

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 Farm Bureau v. Weston

in a practice of prepayment of insurance premiums that would
lead to a refund of insurance premiums, rather than a bill for
unpaid insurance premiums, upon termination or cancellation of
the policy.”

¶8 Prematic reserved the right to terminate the Prematic
Agreement “in the event that . . . Customer has failed to make
timely payments to Prematic.” The Prematic Agreement further
provided,

In the event that less than full monthly payment is
received by Prematic, . . . Customer authorizes
Prematic to apply any funds received or credited to
Customer’s accounts as follows:

(a) first, toward any unpaid balance from a prior
month;

(b) second, to the current Service Charge as reflected
on the current Prematic bill;

(c) third, toward the payment of any other fees or
charges shown on the current Prematic bill; and

(d) [fourth,] toward the payment of current monthly
premium amounts for any policy(ies) under this
Agreement, applied pro rata.

Customer acknowledges that less than full payment
constitutes breach of this Agreement and that
Prematic has the right to terminate this
Agreement[.]

the 17th of the next month. It also appears to be consistent with
the refund amount of $130.68 that Farmers Insurance sent Joelyn
following termination of the policy. See infra note 21.

20180699-CA 6 2023 UT App 136
 Farm Bureau v. Weston

Cancellation of the Insurance Policy

¶9 In December 2003, Joelyn received a bill in the amount of
$158.92 for what the bill purported to be the coverage period from
January 18, 2004, until February 17, 2004, for four vehicles,
including the 1992 Ford Explorer. The bill stated that it was for
“Activity processed after: 12-14-03.” Payment was due January 3,
2004, which Joelyn did not timely pay, later explaining that she
“[p]robably didn’t have the money at the time.” Sometime after
January 6 but before January 15, she mailed a check dated January
6, 2004, for $158.92. Prematic processed the check on January 15,
and payment on the check was withdrawn from Joelyn’s bank
account on January 16.

¶10 On January 14, the day before her check was processed,
Farmers Insurance issued a notice of cancellation (the Notice of
Cancellation) to Joelyn. The Notice of Cancellation indicated that
it “Includes Activity Processed Before: 1-14-04” and stated that
Joelyn’s policies, including the one for the 1992 Ford Explorer,
would be cancelled on February 3, 2004, if payment in the amount
of $220.16 was not received by that same date. 5 Joelyn received the
Notice of Cancellation “sometime before the February 3, 2004
cancellation date.” The trial court later found that Joelyn’s
“history of late payments and cancellations demonstrates she
understood that failure to pay the full amount due as set forth in
the . . . Notice of Cancellation would result in cancellation of the
insurance policy with no right to retroactive reinstatement.” In
other words, Joelyn “read and understood . . . that if $220.16 was

5. The $220.16 amount reflected the $158.92 due by January 3,
2004, plus the amount due in the bill for the following month—
due by February 3, 2004, and covering the period between
February 18, 2004, and March 17, 2004—minus a $81.88 “credit for
a coverage change to a 1989 motorhome.”

20180699-CA 7 2023 UT App 136
 Farm Bureau v. Weston

not paid by February 3, 2004, all of the Farmers’ Policies would be
cancelled as of February 3, 2004.”

¶11 Although Prematic processed the $158.92 check on January
15, it did not receive the remaining $61.24 due under the Notice
of Cancellation by the February 3 deadline. For this reason, on
February 14, Farmers Insurance cancelled all of Joelyn’s policies
for non-payment, effective February 3. The trial court later found
that “[b]ased on her history of late payments and cancellations
Joelyn Weston understood that her payment of $158.92 . . . and
Farmers’ subsequent processing of her payment did not satisfy
the terms outlined in the . . . Notice of Cancellation.” On February
18, Prematic mailed Joelyn a letter stating that because she had
not made timely payment, it was cancelling her policies pursuant
to the Prematic Agreement. It also noted that Farmers Insurance
“has cancelled your policy, or policies, in accordance with the
terms of each policy.” Prematic’s letter also included a refund
check for $130.68, which represented the $158.92 payment minus
the amount due to Farmers Insurance for the coverage it provided
until February 3 plus certain credits Joelyn was owed for changes
made to a policy on a different vehicle.

The Accident

¶12 On February 15, Jared, Joelyn’s son, was involved in an
automobile accident while driving the 1992 Ford Explorer. The
driver of the other vehicle involved in the accident was killed.
Joelyn met with her Farmers Insurance agent the following day,
and the agent informed her that the insurance policy for that
vehicle had been cancelled effective February 3. Joelyn paid to
reinstate her insurance policies that day, but they were not
reinstated retroactively to February 3.

¶13 The driver killed in the accident was insured by Farm
Bureau. Farm Bureau alleged in its subsequent complaint that it
paid a total of $111,688.96 in property damages, personal injury

20180699-CA 8 2023 UT App 136
 Farm Bureau v. Weston

protection benefits, and uninsured motorist benefits to the
driver’s heirs, whereupon Farm Bureau became their subrogee.6

The Lawsuit and the 2009 Judgment

¶14 In March 2005, Farm Bureau filed its complaint in this
matter, asserting a negligence claim against Jared. 7 It also joined
as defendants Farmers Insurance, the agent who wrote the
Farmers Insurance policy for Joelyn, and Prematic. Farm Bureau
sought declaratory judgment that Farmers Insurance’s policy
covering the 1992 Ford Explorer was in effect at the time of the
accident. Jared—represented by counsel he personally hired—
filed a crossclaim against Farmers Insurance alleging, among
other things, breach of contract, breach of fiduciary duty, and
breach of the implied covenant of good faith and fair dealing. In
its answer, Farmers Insurance raised as a defense, in relevant part,
that the insurance policy had been cancelled effective February 3,
2004, and it asserted that it was “entitled to a judgment, as a
matter of law, ruling that there is no cause of action against
[Farmers Insurance] and that [Farmers Insurance] owe[s] no
obligation to provide insurance coverage on behalf of Jared
Weston with respect to the subject accident.” 8

6. “The doctrine of subrogation allows an insurer, having paid a
loss resulting from a peril insured against, to step into the shoes
of its insured and recoup its losses from a tort-feasor whose
negligence caused the loss.” Birch v. Fire Ins. Exch., 2005 UT App
395, ¶ 7, 122 P.3d 696 (quotation simplified).

7. Farm Bureau did not name Joelyn as a defendant in its lawsuit.

8. The complicated nature of the underlying dispute and the
multi-faceted nature of this litigation have made for strange
bedfellows. Initially, Farm Bureau and Jared were adversaries,
(continued…)

20180699-CA 9 2023 UT App 136
 Farm Bureau v. Weston

¶15 In 2008, Jared and Farm Bureau arbitrated the issues of
liability regarding the accident. The arbitrator found that Jared
was at fault and liable to Farm Bureau in the amount of
$684,276.36. 9 On March 26, 2009, the trial court confirmed the

with Jared resisting Farm Bureau’s claim that he was responsible
for the death of its insured, the driver of the other vehicle involved
in the accident. When Jared lost that battle, he and Farm Bureau
became natural allies in the quest to prove that the Farmers
Insurance policy was in effect at the time of the accident involving
the 1992 Ford Explorer. Both would benefit if they prevailed on
this claim because Jared would have coverage for the judgment
obtained against him by Farm Bureau and Farm Bureau would
have a ready source of payment of that judgment via Farmers
Insurance. But after the trial court determined that Farmers
Insurance properly cancelled the policy prior to the accident, it
further determined that Farm Bureau no longer had standing to
litigate the remaining duty to defend issue because the duty
“flows directly from” Farmers Insurance to Jared. Farm Bureau
challenges the court’s standing determination on appeal.
Conversely, Farmers Insurance argues that Farm Bureau lacks
standing to litigate this issue. Jared, who undoubtedly has
standing to litigate this issue, defends the court’s separate ruling
that Farmers Insurance breached its duty to defend Jared. See infra
note 28. In one other side skirmish regarding whether the
judgment Farm Bureau obtained against Jared had expired,
Farmers Insurance and Jared joined forces against Farm Bureau.
See infra note 11.

9. This amount reflected $6,375 in funeral costs, $10,184.36 in
property damages, $217,717 in economic loss, and $450,000 in
non-economic loss. We note the significant discrepancy between
this arbitration award and the $111,688.96 amount Farm Bureau
alleged in its complaint to have paid to the driver’s heirs. An
explanation for this discrepancy has not been provided in the
(continued…)

20180699-CA 10 2023 UT App 136
 Farm Bureau v. Weston

arbitration award, see Utah Code Ann. § 78B-11-123 (LexisNexis
2018), and entered judgment against Jared in favor of Farm
Bureau in the amount of $747,233.15 (the 2009 Judgment), which
represented the arbitration award plus pre-judgment interest and
costs, see id. § 78B-11-126(1). 10 The 2009 Judgment further
provided that it “shall be augmented in the amount of reasonable
costs and attorney fees expended in collecting said Judgment by
execution or otherwise as shall be established by affidavit.” Farm
Bureau has not renewed this judgment since it was first entered. 11

briefing and is not readily discoverable in the record, but it has no
bearing on the issues before us.

10. Because the applicable provisions of the Utah Code in effect at
the relevant times do not materially differ from those currently in
effect, we cite the current version of the code for convenience.

11. In 2016, Farm Bureau filed an application for a writ of
execution to enforce the 2009 Judgment. The trial court issued the
writ in April 2016, and a constable subsequently attempted to
seize Jared’s vehicle and other possessions. Jared’s counsel had
numerous discussions with Farm Bureau concerning its collection
efforts.
In 2018, Farm Bureau moved the trial court for an award of
costs and a proposed amended judgment, seeking $11,423.04 in
additional costs. Farmers Insurance and Jared opposed the
motion, arguing that the judgment had expired in 2017—eight
years after it was initially entered. The court rejected this
argument, ruling that the 2009 Judgment “was not a final
judgment under rule 54(b)” of the Utah Rules of Civil Procedure
and it “may therefore properly be augmented to include the costs
requested in Farm Bureau’s” motion. After finding that Farm
Bureau’s requested costs were reasonable, the court amended the
judgment to include that amount.

20180699-CA 11 2023 UT App 136
 Farm Bureau v. Weston

Partial Summary Judgment and the First Bench Trial

¶16 In June 2008, Farmers Insurance sought partial summary
judgment that it did not breach the covenant of good faith and fair
dealing because its denial of coverage was “fairly debatable.”
Jared did not oppose the motion, later explaining that he “chose
not to engage” because, in his view, those arguments were
“irrelevant” in the third-party breach of fiduciary duty context.
The trial court granted Farmers Insurance’s motion on the ground
that the motion showed that Jared had “not identified facts
supporting his bad faith claim.” The court ruled that because
Jared did not oppose the motion, he had not shown that a genuine
issue of material fact barred summary judgment.

¶17 In 2013, the case then proceeded to a bifurcated bench trial.
At issue in the first phase of the trial was whether the insurance
policy covering the 1992 Ford Explorer was in effect at the time of
the accident. After four days of trial, the trial court concluded that
Endorsement E0022 and the Prematic Agreement “supersede any
provisions in the original policy contrary to the Endorsement”
and that the Prematic Agreement “was effectively a contract
with” Farmers Insurance because “Prematic is merely a billing
platform for” Farmers Insurance. The court further held that
Joelyn’s payment of $158.92 was not timely because it was mailed
“sometime after January 6, 2004,” which was past the January 3
due date. The court accordingly concluded that to receive
coverage beyond the date specified in the Notice of Cancellation,
Joelyn was required to pay what remained of the $220.16 amount.
And because Joelyn did not pay the remaining balance on or
before the cancellation date, the court concluded that Farmers
Insurance “properly canceled the insurance policy pursuant to the
terms outlined in the . . . Notice of Cancellation and the policy
provisions” and that Jared “was not insured by Farmers for the
operation of the 1992 Ford Explorer on February 15, 2004.”

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 Farm Bureau v. Weston

Summary Judgment and the Second Bench Trial

¶18 Following the first bench trial, Farmers Insurance and
Farm Bureau filed motions for summary judgment on the issue of
whether Farmers Insurance breached its duty to defend Jared
against Farm Bureau’s lawsuit. The court ruled that because Farm
Bureau alleged in its complaint that Farmers Insurance “had not
complied with the statutory requirements before cancelling the
. . . insurance coverage for non-payment,” Farmers Insurance
“was required to defend until the uncertainties could be resolved
against coverage.” The court further held that although it
“ultimately found that the cancellation notice was sufficient to
preclude Farmers’ duty to indemnify, Farmers may not now rely
on the Court’s findings to avoid its duty to defend.” Accordingly,
the court held that “by simply denying [Jared’s] tender of
defense,[12] Farmers breached its duty to defend.” The court,
however, ruled that genuine issues of material fact precluded
summary judgment on the issue of the damages resulting from
Farmers Insurance’s breach of its duty to defend Jared.

¶19 On subsequent motions for summary judgment, the court
also ruled that because the coverage issue was resolved in favor
of Farmers Insurance, Farm Bureau no longer had standing to
litigate the duty to defend issue, which obligation “flows directly
from” Farmers Insurance to Jared. The court also dismissed, with
prejudice, Jared’s claims against Prematic on the ground that the

12. “‘Tender of defense’ describes a common-law practice in
which a person or entity against whom an action is brought gives
notice of the suit to a person or entity that may ultimately be liable
for payment of the judgment, by contract or implication of law.”
Summerhaze Co. v. Federal Deposit Ins. Corp., 2014 UT 28, ¶ 3 n.2,
332 P.3d 908. “The purpose is to offer the person who may
ultimately be liable the opportunity to appear and defend the
action, because the person or entity may be bound by the
judgment.” Id. (quotation simplified).

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 Farm Bureau v. Weston

claims were precluded by the court’s prior determination “that
both Farmers and Prematic complied with the Prematic
Agreement in applying” Joelyn’s $158.92 payment.

¶20 The case then proceeded to a second bench trial on the
issue of damages arising from Farmers Insurance’s breach of the
duty to defend. The court found that Farmers Insurance’s breach
of the duty to defend “left [Jared] in a state of great worry and
anxiety after the Accident” until he retained counsel in June
2005. 13 Under the executed attorney/client contract, Jared was
obligated to pay counsel “a contingency fee of 40% of the total
present value of the settlement or judgment” but was not
obligated to pay any attorney fees if there was no recovery. The
court noted that Jared “has had no complaints about his
attorneys,” “has had full confidence in [his attorneys], . . . has been
satisfied with his attorneys’ work and efforts on his behalf, and
. . . believes that his attorneys have done a good job in all aspects
of the defense of the Accident.”

¶21 Concerning the 2009 Judgment entered against Jared, the
court stated that Jared presented “no evidence that a different
outcome would have resulted had Farmers accepted [Jared’s]
tender of defense.” The court held that Jared did not incur any
fees under the contingency fee agreement because he did not
obtain a recovery. Additionally, because Jared presented only
spreadsheets that the court ruled inadmissible, the court noted
that Jared “presented no evidence at trial of attorney fees and
costs incurred in defense of the underlying action.”

13. The court further found that although Jared “has continued to
experience emotional distress and anxiety” after retaining
counsel, “such emotional distress and anxiety is attributable
solely to [Jared’s] potential liability in the underlying case and not
to Farmers’ breach of the duty to defend.”

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 Farm Bureau v. Weston

¶22 The court did, however, award Jared $20,000 per month in
damages for the mental anguish he suffered from the time of the
accident until he retained counsel, totaling $320,000. The court
also awarded an additional $128,000 in attorney fees as
consequential damages, representing the 40% that Jared would
owe under the contingency fee agreement for his mental anguish
award.

¶23 Farmers Insurance subsequently moved to amend the
court’s judgment, arguing, among other things, that Jared “failed
to present sufficient evidence of his damages.” The court agreed,
ruling that Jared’s mental anguish “was actually caused by the
amount of the judgment and the lack of insurance coverage
therefor, and not by Farmers’ failure to provide [Jared] a defense
in this matter.” The court stated that Jared’s “intermingling of the
duty to defend issue with the issues of liability and coverage
improperly leaves the fact-finder to speculate regarding which
damages were actually caused by Farmers’ breach of the duty to
defend.” For this reason, the court held that Jared “has . . . failed
to prove the fact of damages—he has failed to present evidence
that gives rise to a reasonable probability that he suffered
damages caused by Farmers’ breach of the duty to defend.” The
court then reduced the damages award to $0 and later entered
judgment in Jared’s favor for $105, representing his costs.

¶24 The court then entered the amended judgment in Farm
Bureau’s favor that reflected an additional $11,423.04 in costs, see
supra note 11, and the $105 judgment in Jared’s favor. Farm
Bureau subsequently appealed, and Farmers Insurance and Jared
cross-appealed.

ISSUES AND STANDARDS OF REVIEW

¶25 The parties raise several issues on appeal. We first address
Farmers Insurance’s motion for summary disposition, which
challenges this court’s jurisdiction to address Farm Bureau’s

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 Farm Bureau v. Weston

appeal and Jared’s cross-appeal. See Hayes v. Intermountain
GeoEnvironmental Services Inc., 2018 UT App 223, ¶ 2, 437 P.3d 650
(“The initial inquiry of any court should always be to determine
whether the requested action is within its jurisdiction.”)
(quotation simplified). We deferred ruling on Farmers Insurance’s
motion “pending plenary presentation and consideration of the
appeal during full briefing.” In its motion and later in its brief,
Farmers Insurance argues that the 2009 Judgment expired “by
operation of the Utah Code” because it was not satisfied, stayed,
or renewed in the eight years since its initial entry. Accordingly,
Farmers Insurance argues that “Farm Bureau lacks standing and
all of the issues it raises are moot” and that “Jared’s claim
concerning Farmers’ duty to indemnify is moot because there is
no liability to indemnify.” The Utah Uniform Arbitration Act (the
UUAA) and our rules of procedure govern whether the judgment
at issue was final and enforceable at the time of entry. We review
a trial court’s interpretation of statutes and rules of procedure for
correctness. See Ross v. Ross, 2019 UT App 104, ¶ 8, 447 P.3d 104.
Furthermore, “the question of whether an order is final and
appealable is a question of law.” See Powell v. Cannon, 2008 UT 19,
¶ 9, 179 P.3d 799 (quotation simplified). Because we ultimately
conclude that we have jurisdiction over the challenged issues, we
then proceed to consider those issues.

¶26 Farm Bureau and Jared raise several issues relating to the
trial court’s determination, following the first bench trial, that the
policy on the 1992 Ford Explorer was cancelled for nonpayment
prior to the accident. “Following a bench trial, we review a trial
court’s legal conclusions for correctness, according the trial court
no particular deference.” Kelly v. Timber Lakes Prop. Owners Ass’n,
2022 UT App 23, ¶ 23, 507 P.3d 357 (quotation simplified). “We
review the court’s findings of fact for clear error, granting due
regard to the opportunity of the trial court to judge the credibility
of the witnesses.” Id. (quotation simplified).

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 Farm Bureau v. Weston

¶27 Farmers Insurance challenges the court’s summary
judgment ruling that Farmers Insurance breached its duty to
defend Jared. “We review the district court’s ultimate grant or
denial of summary judgment for correctness. We give no
deference to the district court’s legal conclusions and consider
whether the court correctly decided that no genuine issue of
material fact existed.” Phillips v. Skabelund, 2021 UT App 2, ¶ 15,
482 P.3d 237 (quotation simplified), cert. denied, 496 P.3d 713 (Utah
2021).

¶28 Jared raises several challenges regarding the trial court’s
damages award for Farmers Insurance’s breach of its duty to
defend. We review the standard employed by the trial court in
determining damages for correctness, see Diversified Striping Sys.
Inc. v. Kraus, 2022 UT App 91, ¶ 46, 516 P.3d 306, but “we review
for an abuse of discretion the trial court’s determination that [a
party] failed to introduce sufficient evidence to establish
damages, and we will not overturn the trial court’s decision
unless there was no reasonable basis for the decision,” Macris v.
Sevea Int’l, Inc., 2013 UT App 176, ¶ 26, 307 P.3d 625 (quotation
simplified).

¶29 Jared also argues that the court erred in granting Farmers
Insurance’s motion for partial summary judgment on Jared’s
breach of the duty of good faith and fair dealing claim. 14 But

14. In addition, Jared argues that the court erred in declaring his
$105 judgment against Farmers Insurance satisfied. He argues
that the judgment cannot be satisfied because he did not cash the
check Farmers Insurance tendered. But because Jared raises this
argument solely for the purpose of establishing that he did not
waive his right to appeal, see Scott Anderson Trucking Inc. v. Nielson
Constr., 2020 UT App 43, ¶ 20, 462 P.3d 822 (“If a judgment is
voluntarily paid, which is accepted, and a judgment satisfied, the
controversy has become moot and the right to appeal is waived.”)
(continued…)

20180699-CA 17 2023 UT App 136
 Farm Bureau v. Weston

because Jared did not oppose Farmers Insurance’s motion below,
his challenge is unpreserved. See Turley v. Childs, 2022 UT App 85,
¶ 29, 515 P.3d 942. In such cases, “we must review for correctness
the question of whether the movant’s papers, on their face,
indicate that the movant is entitled to judgment as a matter of
law.” Id. We do not consider “any defenses or counter-arguments
that the nonmovant might have raised in a never-filed opposition
memorandum.” Id. Furthermore, in reviewing the court’s
summary judgment ruling, we must assume that the movant’s
undisputed facts are true. See id. ¶ 31.

¶30 Finally, we address Farmers Insurance’s argument that the
court erred in amending the 2009 Judgment to include $11,423.04
in costs. Farmers Insurance asserts that Farm Bureau’s request for
fees was untimely under rule 54(d)(2) of the Utah Rules of Civil
Procedure. This presents a question of law that we review for
correctness. See Lyon v. Burton, 2000 UT 55, ¶ 76, 5 P.3d 616.

ANALYSIS

I. Standing and Mootness

¶31 Under rule 10 of the Utah Rules of Appellate Procedure,
“[a] party may move at any time to dismiss the appeal or the
petition for review on the basis that the appellate court lacks
jurisdiction.” Utah. R. App. P. 10(a)(1). Standing and mootness
both implicate jurisdiction.

¶32 “Standing is a jurisdictional requirement that must be
satisfied before a court may entertain a controversy between two
parties.” Jones v. Barlow, 2007 UT 20, ¶ 12, 154 P.3d 808 (quotation
simplified). “Under the traditional test for standing, the interests

(quotation simplified), and because Farmers Insurance “agrees
that Jared did not waive his right to appeal,” we do not reach this
issue.

20180699-CA 18 2023 UT App 136
 Farm Bureau v. Weston

of the parties must be adverse and the parties seeking relief must
have a legally protectible interest in the controversy.” Id.
(quotation simplified). See Washington County Water Conservancy
Dist. v. Morgan, 2003 UT 58, ¶ 20, 82 P.3d 1125 (stating that the
traditional test for standing “requires a plaintiff to show some
distinct and palpable injury that gives rise to a personal stake in
the outcome of the dispute”) (quotation simplified).

¶33 Similarly, the mootness doctrine “is a constitutional
principle limiting our exercise of judicial power under article VIII
of the Utah Constitution” and “is not a simple matter of judicial
convenience or an ascetic act of discretion.” Transportation All.
Bank v. International Confections Co., 2017 UT 55, ¶ 14, 423 P.3d 1171
(quotation simplified). “An appeal is moot if . . . circumstances
change so that the controversy is eliminated, thereby rendering
the relief requested impossible or of no legal effect,” Walker I Invs.,
LLC v. Sunpeak Ass’n, Inc., 2015 UT App 216, ¶ 7 n.1, 359 P.3d 675
(quotation simplified), thus rendering “anything we might say
about the issues . . . purely advisory,” Transportation All. Bank,
2017 UT 55, ¶ 15 (quotation simplified). For this reason, “in the
absence of a justiciable controversy,” we lack jurisdiction to
decide the appeal. 15 Id. (quotation simplified).

¶34 Farmers Insurance argues that we should dismiss Farm
Bureau’s appeal for lack of standing and on grounds of mootness
because Farm Bureau’s legal interest in this case arose and was

15. An exception to the mootness doctrine exists “when the case:
(1) affects the public interest, (2) is likely to recur, and (3) because
of the brief time that any one litigant is affected, is likely to evade
review.” Timothy v. Pia, Anderson, Dorius, Reynard & Moss, LLC,
2019 UT 69, ¶ 32, 456 P.3d 731 (quotation simplified). Another
exception arises when “the party seeking to survive dismissal . . .
demonstrate[s] that collateral legal consequences will flow from
the challenged issue.” In re J.S., 2017 UT App 5, ¶ 11, 391 P.3d 358
(quotation simplified). Neither exception is implicated here.

20180699-CA 19 2023 UT App 136
 Farm Bureau v. Weston

dependent on the 2009 Judgment, which Farmers Insurance
argues expired eight years after its entry, i.e., in 2017. Farmers
Insurance also contends that Jared’s arguments concerning
Farmers Insurance’s duty to indemnify him are moot because the
underlying judgment against Jared has expired.

¶35 Under section 78B-5-202 of the Utah Code, judgments
“shall continue for eight years from the date of entry in a court
unless previously satisfied or unless enforcement of the judgment
is stayed in accordance with law.” See Utah Code Ann.
§ 78B-5-202(1) (LexisNexis 2018). See also id. § 78B-2-311 (“An
action may be brought within eight years upon a judgment or
decree of any court of the United States, or of any state or territory
within the United States.”). 16 A party may renew a judgment by
filing a motion in the original action before the judgment
expires. 17 See id. § 78B-6-1802; Utah R. Civ. P. 58C(a).

¶36 “‘Judgments’ covered by [section 78B-5-202(1)] must be the
final variety.” Irving Place Assocs. v. 628 Park Ave., LLC, 2015 UT
91, ¶ 20, 362 P.3d 1241. In other words, “it cannot be said that a
nonfinal judgment shall continue for eight years from the date of

16. Our Supreme Court has clarified that “there are two different
eight-year periods at play in relation to a judgment.” Timothy,
2019 UT 69, ¶ 9 n.7. “First, section 78B-5-202(1) defines the
duration of the judgment itself. Creditors can renew their
judgments by filing a motion to renew before the original
judgment expires.” Id. “Second, section 78B-2-311 establishes the
statute of limitations to commence a separate action on a
judgment.” Id.

17. These provisions are applicable to judgments entered
pursuant to arbitration awards by virtue of Utah Code section
78B-11-126, which states that such “judgment[s] may be recorded,
docketed, and enforced as any other judgment in a civil action.”
Utah Code Ann. § 78B-11-126(1) (LexisNexis 2018).

20180699-CA 20 2023 UT App 136
 Farm Bureau v. Weston

entry.” Id. (quotation simplified). To the contrary, nonfinal
judgments “would continue for longer—for eight years after the
eventual entry of a final judgment.” Id. (emphasis in original).
This is because “a judgment cannot be enforced until it is final,”
id. ¶ 22, and section 202(1) stays enforcement of a judgment “in
accordance with law,” Utah Code Ann. § 78B-5-202(1).
Furthermore, “a nonfinal judgment is subject to modification by
the district court unless and until it becomes final.” Irving Place,
2015 UT 91, ¶ 20 n.6. See id. (stating that because “a case may
remain pending for years between the initial entry of a nonfinal
judgment and the ultimate entry of a final one[,] . . . the limitations
period cannot begin running on a judgment that is interlocutory
in nature”).

¶37 The threshold issue in this case is, therefore, whether entry
of the 2009 Judgment confirming the arbitration award
constituted a final judgment. Farmers Insurance argues that “[a]
judgment reflecting a confirmed arbitration award is a judgment
under rule 54(a) [of the Utah Rules of Civil Procedure] because
the judgment debtor has an appeal of right.” Accordingly,
Farmers Insurance argues that the 2009 Judgment was “final and
enforceable on March 26, 2009, the day it was entered.” Farmers
Insurance points to the fact that Farm Bureau even sought to
enforce the 2009 Judgment against Jared. We disagree.

¶38 Under the final judgment rule, “an appellate court does not
have jurisdiction to consider an appeal unless the appeal is taken
from a final order or judgment that ends the controversy between
the litigants.” Copper Hills Custom Homes, LLC v. Countrywide Bank,
FSB, 2018 UT 56, ¶ 10, 428 P.3d 1133 (quotation simplified). Rule
54(a) of the Utah Rules of Civil Procedure defines “judgment” as
“a decree or order that adjudicates all claims and the rights and
liabilities of all parties or any other order from which an appeal of
right lies.” Utah R. Civ. P. 54(a). Rule 54(b) further provides that
“any order or other decision, however designated, that
adjudicates fewer than all the claims or the rights and liabilities of

20180699-CA 21 2023 UT App 136
 Farm Bureau v. Weston

fewer than all the parties does not end the action as to any of the
claims or parties” and is therefore not an appealable order unless
certified by the trial court. See id. R. 54(b); Powell v. Cannon, 2008
UT 19, ¶ 11, 179 P.3d 799 (“For an order or judgment to be final, it
must dispose of the case as to all the parties, and finally dispose
of the subject-matter of the litigation on the merits of the case. In
other words, it must end the controversy between the litigants,
leaving nothing for the court to do but execute the judgment.”)
(quotation simplified).

¶39 There are three exceptions to the final judgment rule:
(1) interlocutory appeals brought under rule 5(a) of the Utah
Rules of Appellate Procedure, (2) nonfinal orders properly
certified for appeal by the trial court under rule 54(b) of the Utah
Rules of Civil Procedure, and (3) instances where “the legislature
provides a statutory avenue for appealing nonfinal orders.”
Copper Hills, 2018 UT 56, ¶¶ 13–15 (quotation simplified). Only the
third exception is at issue here, pursuant to Utah Code section
78B-11-129(1). See id. ¶ 13.

¶40 Section 129(1) appears within the UUAA and provides that
in the context of arbitration,

(1) An appeal may be taken from:

(a) an order denying a motion to compel arbitration;

(b) an order granting a motion to stay arbitration;

(c) an order confirming or denying confirmation of
an award;

(d) an order modifying or correcting an award;

(e) an order vacating an award without directing a
rehearing; or

20180699-CA 22 2023 UT App 136
 Farm Bureau v. Weston

(f) a final judgment entered pursuant to [the
UUAA].

Utah Code Ann. § 78B-11-129(1) (LexisNexis 2018). “Any ruling
listed in subsection 129(1) [gives] the parties an appeal as of right,
which should be pursued under rule 3” of the Utah Rules of
Appellate Procedure. Westgate Resorts, Ltd. v. Consumer Prot.
Group, LLC, 2012 UT 56, ¶ 12, 289 P.3d 420. See Utah R. App. P.
3(a)(1) (“[A] party may appeal a final order or judgment from a
district or juvenile court to the appellate court[.]”).

¶41 Farmers Insurance asserts that the 2009 Judgment falls
squarely within subsection (c) of section 129(1). We disagree.
Subsection (c) provides that “[a]n appeal may be taken from . . .
an order confirming or denying confirmation of an [arbitration]
award.” Utah Code Ann. § 78B-11-129(1)(c) (LexisNexis 2018).
The 2009 Judgment is not such an order. Rather, in accordance
with the UUAA, the trial court entered the 2009 Judgment after it
entered a separate order confirming the arbitration award. See id.
§ 78B-11-123 (detailing the process for obtaining an order
confirming an arbitration award); id. § 78B-11-126(1) (“Upon
granting an order confirming . . . an [arbitration] award, the court
shall enter a judgment conforming to the award. The judgment
may be recorded, docketed, and enforced as any other judgment
in a civil action.”). Indeed, only subsection (f) of section 129(1)
refers to judgments, but it limits appeals to “final judgment[s]
entered pursuant to [the UUAA].” Id. § 78B-11-129(1)(f) (emphasis
added). Because the 2009 Judgment did not resolve all the claims
of all the parties, it is not a final judgment, see Utah R. Civ. P. 54(b),
and therefore does not fall under subsection (f). 18 See Westgate,
2012 UT 56, ¶ 22. Accordingly, subsection (c)’s “statutory avenue

18. And in any event, because subsection (f) deals with final
judgments, it is not an exception to the final judgment rule. See
Copper Hills Custom Homes, LLC v. Countrywide Bank, FSB, 2018 UT
56, ¶ 13, 428 P.3d 1133.

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 Farm Bureau v. Weston

for appealing nonfinal orders,” Copper Hills, 2018 UT 56, ¶ 13
(quotation simplified), applied to the order confirming the
arbitration award but not to the subsequently entered 2009
Judgment. 19

¶42 In sum, because we conclude that an appeal as of right did
not lie from the 2009 Judgment, the 2009 Judgment was not a final
judgment under rule 54(a) of the Utah Rules of Civil Procedure
and the eight-year period under section 202(1) did not begin to
run upon entry of that interlocutory judgment. For these reasons,
Farmers Insurance’s standing and mootness arguments are
unavailing, and we retain jurisdiction to address all the issues
raised on appeal.

II. Cancellation of the Insurance Policy

¶43 Under Utah’s Insurance Code, an insurer generally may
not cancel a policy for insurance prior to the expiration of the
policy term, see Utah Code Ann. § 31A-21-303(2)(b)(i)(A)
(LexisNexis Supp. 2022), unless, as relevant here, it does so for
“nonpayment of a premium when due,” id.
§ 31A-21-303(2)(b)(ii)(A). Such cancellation “is effective no sooner
than 10 days after delivery or first-class mailing of a written notice
to the policyholder.” Id. § 31A-21-303(2)(c)(ii). Accordingly, so
long as the insurer provides written notice of cancellation and

19. The fact that Farm Bureau erroneously obtained a writ of
execution and attempted to collect on the 2009 Judgment against
Jared before it was final and enforceable is immaterial to the issues
before us on appeal. “Because there had not been a ‘final
judgment,’ a writ of execution was not available under these
circumstances, and the district court could have revisited its
decision to grant the writ” at any point. Jordan Constr., Inc. v.
Federal Nat’l Mortgage Ass’n, 2017 UT 28, ¶ 36, 408 P.3d 296. And
it may be that Jared has some recourse against Farm Bureau for
its wrongful efforts to execute on his assets.

20180699-CA 24 2023 UT App 136
 Farm Bureau v. Weston

provides coverage for a 10-day grace period thereafter, the insurer
may cancel an insurance policy for a single past due premium
payment.

¶44 Consistent with the Insurance Code, the insurance policy
on the 1992 Ford Explorer stated that Farmers Insurance may
cancel the policy for “fail[ure] to pay the premium when due.” It
further provided that Farmers Insurance would mail notice of
cancellation for nonpayment of the premium “[n]ot less than 10
days prior to the effective date of such cancellation.”

¶45 Farm Bureau and Jared raise several challenges to the trial
court’s determination that Farmers Insurance’s cancellation of the
policy, effective February 3, 2004, was valid. We address each
argument in turn.

A. Incorporation of the Prematic Agreement

¶46 Farm Bureau first argues that the trial court erred in
holding that the Prematic Agreement was incorporated into the
policy through Endorsement E0022. Farm Bureau contends that if
the Prematic Agreement was, as Farm Bureau asserts, separate
from the policy and Endorsement E0022, then Joelyn’s failure to
timely pay the full $220.16 due under the Prematic bill may have
been a breach of the Prematic Agreement, though not of the policy
itself. But even assuming, without deciding, that the court did err
in this respect, we disagree with Farm Bureau that Joelyn’s failure
to pay the full amount owed as required by the Notice of
Cancellation resulted in cancellation of only the Prematic
Agreement and not the policy.

¶47 The policy provided that it may be altered “by
endorsement.” Endorsement E0022 amended the policy period to
“one Calendar month” and provided that “[t]he premium is due
no later than on the expiration date of the then current monthly
period.” Additionally, the declarations page, which is also part of
the policy, provided that the monthly period began on the third

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 Farm Bureau v. Weston

of each month. This corresponded with the February 3 due date
under the Prematic bill. Accordingly, even if the Prematic
Agreement was a separate agreement from the policy, Joelyn
nevertheless breached the policy and Endorsement E0022 when
she failed to make the full payment of $220.16 by the due date as
provided for in the Notice of Cancellation. Indeed, in light of the
declarations page providing that the policy began on December 3,
2004, payment under Endorsement E0022 would have been due
on the second of each subsequent month, which represented “the
expiration date of the then current monthly period.” In light of
Joelyn’s failure to timely pay the $158.92, Farmers Insurance was
entitled to cancel the policy for “fail[ure] to pay the premium
when due.” Instead of doing so, the Notice of Cancellation offered
the opportunity for a cure, stating that it would cancel the policy
unless Joelyn paid $220.16—which represented a combined
payment for the January and February monthly periods—by
February 3, 2004. 20

20. At oral argument, Farm Bureau suggested that Prematic, not
Farmers Insurance, sent the Notice of Cancellation and that it
therefore purported to be only a cancellation of the Prematic
Agreement and not of the policy. But aside from the question of
what purpose could possibly be served by keeping the policy in
effect while terminating only the agreement that governed
premium payments, the assertion that Prematic sent the Notice of
Cancellation is unsupported by the record. To the contrary, the
record supports only the conclusion that Farmers Insurance sent
the Notice of Cancellation. The Notice of Cancellation made no
mention of Prematic. Instead, it mentions Farmers Insurance three
times and even lists the name of the Farmers Insurance agent who
acted as Joelyn’s point of contact with Farmers Insurance. The
Notice of Cancellation specifically informed Joelyn, with our
emphasis, that “[i]f the minimum amount due is not received by
the due date, . . . your insurance indicated by the insurance
(continued…)

20180699-CA 26 2023 UT App 136
 Farm Bureau v. Weston

¶48 Although Joelyn did pay the $158.92 sometime between
January 6 and January 15, she failed to pay the full $220.16 by the
February 3 deadline. The trial court found that based on Joelyn’s
“history of late payments and cancellations,” she “read and
understood” the Notice of Cancellation to mean “that if $220.16
was not paid by February 3, 2004, all of the Farmers’ Policies
would be cancelled as of February 3, 2004.”

¶49 Without receiving full payment from Joelyn, Prematic
could not have forwarded the full amount to Farmers Insurance
to prevent the cancellation. 21 Accordingly, regardless of whether

number(s) listed which has been issued by the undersigned
company(ies) will be canceled[.]” Additionally, although the trial
court did not specifically find that Farmers Insurance prepared
the Notice of Cancellation, it found that it was mailed by a third
party that Farmers Insurance “contracted to sort and mail notices
prepared at Farmers’ [center for printing and mailing].”
For these reasons, Farm Bureau’s assertion that Prematic sent
the Notice of Cancellation and that it merely cancelled the
Prematic Agreement—and not the policy—fails. And for these
same reasons, we reject Farm Bureau’s argument that the Notice
of Cancellation was ineffective because it was sent by Farmers
Insurance’s affiliate, Prematic, and not by Farmers Insurance.

21. Farm Bureau also argues that Farmers Insurance failed to
prove nonpayment of a premium because the Prematic
Agreement specified that “payment to Prematic . . . does [not]
constitute payment of any premium due from Customer to any
insurance company.” This provision accompanied another
provision stating that Prematic itself was not an insurance
company. But it is undisputed that Prematic forwarded the
payments to Farmers Insurance as premiums. And as mentioned
above, because Joelyn testified and the trial court found that she
did not make the payment by the January 3 due date, it was
(continued…)

20180699-CA 27 2023 UT App 136
 Farm Bureau v. Weston

the Prematic Agreement was integrated into the policy, under the
terms of Endorsement E0022 Joelyn was required to pay for each
monthly period “no later than on the expiration date of the then
current monthly period,” and her failure to pay the premium by
the February 3 due date was a breach of Endorsement E0022 and
of the policy by extension.

impossible for Prematic to timely forward the premium payment
to Farmers Insurance.
Farm Bureau and Jared also argue that Prematic did hold
sufficient funds to pay the remaining $61.24 due under the Notice
of Cancellation, as evidenced by its refund check of $130.68. But
Farm Bureau and Jared have not carried their burden of
persuasion on this issue. See Utah R. App. P. 24(a)(8). The
calculation of the $130.68 is multifaceted. The trial court’s finding
on this matter is limited to stating that the refund “was calculated
on a daily rate, back to February 3, 2004.” Without further
explanation of how the $130.68 figure was reached, we are unable
to accept the premise that Prematic had an excess of funds
sufficient to cover the additional $61.24 due under the Notice of
Cancellation. For example, neither party addresses the $81.88
“credit for a coverage change to a 1989 motorhome,” which was
used to reduce the amount due on the February premium to only
$61.24. Farmers Insurance’s records coordinator testified that
Farmers Insurance issued this credit because Joelyn had overpaid
the premium on a motorhome dating back to May 2003, which
therefore would have presumably been included in the refund
amount, leaving an excess of only $48.80 ($130.68 minus $81.88),
and which would have been insufficient to cover the $61.24 left
owing under the Notice of Cancellation. Additionally, without
offering further explanation or citing to the record, Farm Bureau
cites figures that further confuse the matter. Absent sufficient
development of this rather technical issue, we are unable to reach
the merits of this argument.

20180699-CA 28 2023 UT App 136
 Farm Bureau v. Weston

B. Notice of Cancellation

¶50 Farm Bureau and Jared both argue that the Notice of
Cancellation was ineffective because (1) Farmers Insurance did
not prove that it complied with the Insurance Code by mailing the
Notice of Cancellation 10 days prior to the effective date of the
cancellation, and (2) it was anticipatory. We address each
argument in turn.

1. Proof of Mailing

¶51 The Insurance Code provides that “[c]ancellation for
nonpayment of premium of a personal lines policy is effective no
sooner than 10 days after delivery or first-class mailing of a
written notice to the policyholder.” Utah Code Ann.
§ 31A-21-303(2)(c)(ii) (LexisNexis Supp. 2022). Farm Bureau and
Jared assert that Farmers Insurance did not prove that it mailed
the Notice of Cancellation at least 10 days prior to the cancellation
date and that the Notice of Cancellation was therefore invalid. We
disagree.

¶52 The trial court found that “[o]n January 14, 2004, more than
10 days before February 3, 2004, . . . Joelyn [was] sent a written
Notice of Cancellation.” This finding is supported by the evidence
Farmers Insurance presented at trial in the form of four business
records and the testimony of a Farmers Insurance employee. The
employee explained that the first record showed that Farmers
Insurance generated 9,411 notices of cancellation on January 14,
2004, and that the second record indicated that one of those
notices was for Joelyn. The employee further explained that the
third record indicated that all 9,411 notices were metered for
January 15 and that the fourth record showed that they were
picked up by a third party to be sorted and taken to the post office.

¶53 Although, as the court noted, Farmers Insurance presented
no evidence as to the “actual mailing date” by the third party,
which thus remained unproven at trial, Farmers Insurance

20180699-CA 29 2023 UT App 136
 Farm Bureau v. Weston

nonetheless presented sufficient evidence from which it could be
reasonably inferred that the Notice of Cancellation was mailed at
least 10 days prior to cancellation. To comply with the statutory
mandate, the third party had to mail the Notice of Cancellation no
later than January 24—nine days after receiving it from Farmers
Insurance on January 15. The Farmers Insurance employee
testified that the third party picked up mail from Farmers
Insurance “three or four” times a day. He further testified that
Farmers Insurance shrink-wrapped notices of cancellation in blue,
which served as a “red flag” to the third party “that this was a
priority job” that was to be processed as soon as it arrived at the
third-party facility. He also testified that if a problem arose with a
particular batch of mailings, he would have been made aware of
it—although that had never occurred to date. Finally, though not
dispositive, Joelyn testified that she received the Notice of
Cancellation “sometime before the February 3, 2004 cancellation
date,” thereby proving that the third party did, in fact, mail the
Notice of Cancellation.

¶54 Based on this evidence, the only reasonable inference is
that the third party mailed the Notice of Cancellation, which was
marked as “high priority,” within the nine-day window between
January 15 and January 24. Thus, under the facts of this case,
regardless of the fact that Farmers Insurance did not prove the
“actual mailing date” at trial, the nine-day window it did establish
was sufficiently large to accommodate this uncertainty. For this
reason, we affirm the trial court’s finding that the Notice of
Cancellation was mailed within 10 days of the cancellation date.

2. Anticipatory Cancellation

¶55 Farm Bureau and Jared argue that the Notice of
Cancellation was invalid because it anticipated Joelyn’s failure to
pay the February premium. But the basis for the Notice of
Cancellation was Joelyn’s late payment of the January premium.
In accordance with both the Insurance Code and the terms of

20180699-CA 30 2023 UT App 136
 Farm Bureau v. Weston

Endorsement E0022, Farmers Insurance issued the Notice of
Cancellation for “nonpayment of a premium when due.” Utah
Code Ann. § 31A-21-303(2)(b)(ii)(A) (LexisNexis Supp. 2022).
Although not so obligated, Farmers Insurance offered Joelyn the
opportunity to avoid cancellation by paying both the January and
February premiums by February 3. The payment of both
premiums was therefore a condition of Farmers Insurance not
exercising its statutory and contractual right to cancel the policy.
And because Joelyn did not comply with that condition, Farmers
Insurance then exercised its right to cancel the policy. Farm
Bureau and Jared’s characterization of the Notice of Cancellation
as anticipating the late payment of the February premium is
therefore incorrect.

C. Partial Payment

¶56 Farm Bureau and Jared next argue that Farmers Insurance
lost its right to cancel the policy when it accepted the partial
payment of the amount due under the Notice of Cancellation.
Specifically, they contend that acceptance of the partial payment
(1) constituted a waiver of Farmers Insurance’s right to cancel and
(2) estopped Farmers Insurance from cancelling the policy. We
address each argument in turn.

1. Waiver

¶57 Farm Bureau and Jared argue that Farmers Insurance
waived its right to cancel the policy when it accepted partial
payment for the coverage period in which the accident occurred. 22

22. Following the first bench trial, the trial court found that “[t]he
payment of $158.92 for the December 14, 2003 bill was due on
January 3, 2004,” and that the bill “was for coverage for the period
from January 18, 2004 through February 17, 2004.” Farmers
Insurance asserts that the trial court’s finding regarding the
coverage period was clearly erroneous. It contends that no
(continued…)

20180699-CA 31 2023 UT App 136
 Farm Bureau v. Weston

We do not discuss the parties’ arguments in detail because the
waiver argument is expressly foreclosed by the terms of the
policy. The policy expressly provided, with our emphasis, that
“[n]o other change or waiver may be made in this policy except by
endorsement, new Declarations or new policy issued by us.”
Accordingly, Farmers Insurance’s act of cashing the partial
payment could not constitute waiver. 23 See Mounteer Enters., Inc.
v. Homeowners Ass’n for the Colony at White Pine Canyon, 2018 UT
23, ¶ 19, 422 P.3d 809 (“When a contract contains an antiwaiver
provision, a party cannot waive a contractual right merely by
failing to enforce the provision establishing that right.”).

evidence supports this finding and, to the contrary, that the
evidence presented at trial actually shows that the “coverage
period ran from the third of the month to the second of the
following month.” Because this finding does not affect the
outcome of this appeal, we need not consider this argument.

23. In his reply brief, Jared argues that this policy provision is at
odds with the Insurance Code. Specifically, he asserts that Utah
Code section 31A-21-303(2)(b) “requires Farmers to accept a late
payment, so long as it is tendered within 10 days of a notice of
cancellation.” But that provision contains no such requirement.
Instead, it is limited to providing that an insurer may cancel a
policy for “nonpayment of a premium when due.” Utah Code
Ann. § 31A-21-303(2)(b)(ii)(A) (LexisNexis Supp. 2022).
Furthermore, subsection (2)(c)(ii) merely provides that such
“[c]ancellation for nonpayment of premium . . . is effective no
sooner than 10 days after delivery or first-class mailing of a
written notice to the policyholder,” id. § 31A-21-303(2)(c)(ii), and
does not provide that the right to cancel is voided if payment is
received within that 10-day period.

20180699-CA 32 2023 UT App 136
 Farm Bureau v. Weston

2. Equitable Estoppel

¶58 Jared argues that Farmers Insurance was equitably
estopped from cancelling the policy.24 Specifically, he contends
that because Farmers Insurance did not issue another notice of
cancellation after it cashed Joelyn’s check for $158.92, Joelyn
“acted in reliance on Farmers’ conduct” that allegedly suggested
that she had continuing coverage. But this argument neglects the
trial court’s finding that “[b]ased on her history of late payments
and cancellations Joelyn Weston understood that her payment of
$158.92 . . . and Farmers’ subsequent processing of her payment
did not satisfy the terms outlined in the . . . Notice of
Cancellation.” Accordingly, in light of this finding—which Jared
does not challenge on appeal—Joelyn could not have reasonably
relied on Farmers Insurance’s act in cashing her partial payment
as a basis for believing that the policy was no longer at risk of
immediate cancellation.

D. Retroactivity

¶59 Jared contends that the cancellation was ineffective
because it was retroactive. Specifically, Farmers Insurance
cancelled the policy on February 14—the day before the fatal
accident for which Jared was responsible—retroactive to

24. The elements of equitable estoppel are:
(1) a statement, admission, act, or failure to act by
one party inconsistent with a claim later asserted;
(2) reasonable action or inaction by the other party
taken on the basis of the first party’s statement,
admission, act, or failure to act; and (3) injury to the
second party that would result from allowing the
first party to contradict or repudiate such statement,
admission, act, or failure to act.
McLeod v. Retirement Board, 2011 UT App 190, ¶ 21, 257 P.3d 1090
(quotation simplified).

20180699-CA 33 2023 UT App 136
 Farm Bureau v. Weston

February 3. In support of this argument, Jared cites a section of
the Insurance Code:

An insurance contract insuring against loss or
damage through legal liability for the bodily injury
or death by accident of any person, or for damage to
the property of any person, may not be retroactively
abrogated to the detriment of any third-party
claimant by any agreement between the insurer and
insured after the occurrence of any injury, death, or
damage for which the insured may be liable. This
attempted abrogation is void.

Utah Code Ann. § 31A-22-202(1) (LexisNexis 2017) (emphasis
added). But because the alleged retroactive cancellation occurred
neither “by agreement between the insurer and the insured” nor
“after the occurrence” of the accident, this statute does not apply
to the situation before us. Indeed, even if Farmers Insurance had
cancelled the policy effective February 14, the policy still would
not have been in effect on February 15 when the accident
occurred.

¶60 Similarly, Farm Bureau argues that the policy should have
“remained in force through . . . at least the date of the refund.” In
support of this assertion, Farm Bureau cites Utah Code section
31A-21-305(2)(d), titled “Cancellation upon request of a premium
finance company,” which provides,

Whenever a financed insurance policy is cancelled,
the insurer shall return any unearned premiums
due under the insurance policy to the insurance
premium finance company for the account of the
insured, and this action by the insurer satisfies the
insurer’s obligations under the insurance policy
which relate to the return of unearned premiums. If
the crediting of return premiums to the account of
the insured results in a surplus over the amount due

20180699-CA 34 2023 UT App 136
 Farm Bureau v. Weston

from the insured, the premium finance company
shall refund that excess to the insured if it exceeds
$5.

Id. § 31A-21-305(2)(d). The statute is entirely silent on whether the
policy remains in place until any refund is issued. Accordingly,
we affirm the trial court’s determination that Farmers Insurance
properly cancelled the insurance policy prior to the accident. 25

III. Duty to Defend

¶61 “A policy containing motor vehicle liability coverage
imposes on the insurer the duty to defend, in good faith, any
person insured under the policy against any claim or suit seeking
damages which would be payable under the policy.” Utah Code
Ann. § 31A-22-303(5) (LexisNexis Supp. 2022). See Restatement of
the Law of Liability Insurance § 13(1) (Am. Law Inst. 2019) (“An
insurer that has issued an insurance policy that includes a duty to
defend must defend any legal action brought against an insured
that is based in whole or in part on any allegations that, if proved,
would be covered by the policy, without regard to the merits of
those allegations.”). Under this duty, the insurer is required “to
protect the insured’s interests as zealously as it would its own.”
Black v. Allstate Ins. Co., 2004 UT 66, ¶ 25, 100 P.3d 1163 (quotation
simplified). In the third-party context, 26 the duty to defend is

25. In the event we reverse the trial court’s ruling that Farmers
Insurance properly cancelled the insurance policy on the 1992
Ford Explorer, Farm Bureau seeks an award of attorney fees
under Utah Code section 78B-5-825. Because we affirm the court’s
ruling, we also necessarily reject Farm Bureau’s request for
attorney fees.

26. In the third-party context, insurers contract “to defend the
insured against claims made by third parties against the insured
(continued…)

20180699-CA 35 2023 UT App 136
 Farm Bureau v. Weston

elevated to a fiduciary duty because “the insurer controls the
disposition of claims against its insured, who relinquishes any
right to negotiate on his own behalf” and because “the law
imposes upon all agents a fiduciary obligation to their principals
with respect to matters falling within the scope of their agency.”
Beck v. Farmers Ins. Exch., 701 P.2d 795, 799–800 (Utah 1985). See id.
at 799 (stating that in the third-party insurance context, “the
contract itself creates a fiduciary relationship because of the trust
and reliance placed in the insurer by its insured”).

¶62 “An insurer’s duty to defend arises solely under the terms
of the” insurance policy, which is “merely a contract between the
insured and the insurer.” Equine Assisted Growth & Learning Ass’n
v. Carolina Cas. Ins. Co., 2011 UT 49, ¶ 8, 266 P.3d 733 (quotation
simplified). See Fire Ins. Exch. v. Estate of Therkelsen, 2001 UT 48,
¶ 22, 27 P.3d 555 (“The duty to defend arises solely under
contract.”) (quotation simplified). Accordingly, when
determining whether an insurer has a duty to defend an insured
against certain claims, “the test is whether the complaint alleges a
risk within the coverage of the policy.” Benjamin v. Amica Mutual
Ins. Co., 2006 UT 37, ¶ 16, 140 P.3d 1210 (quotation simplified). See
Equine Assisted Growth, 2011 UT 49, ¶ 8 (stating that the duty to
defend “is triggered whenever the insurer ascertains facts giving
rise to potential liability under the insurance policy”) (quotation
simplified).

and to pay any resulting liability, up to the specified dollar limit.”
M.A. v. Regence BlueCross BlueShield of Utah, 2020 UT App 177, ¶ 16
n.10, 479 P.3d 1152 (quotation simplified). This stands in contrast
to the first-party context, which “refers to an insurance agreement
where the insurer agrees to pay claims submitted to it by the
insured for losses suffered by the insured.” Id. (quotation
simplified).

20180699-CA 36 2023 UT App 136
 Farm Bureau v. Weston

¶63 Because “an insurer’s duty to defend is broader than its
duty to indemnify,” 27 “an insurer may have a duty to defend an
insured even if . . . the insurer is ultimately not liable to indemnify
the insured.” Estate of Therkelsen, 2001 UT 48, ¶ 22 (quotation
simplified). An insurer may refuse to defend against an action
only if “a comparison of the policy with the underlying complaint
shows on its face that there is no potential for coverage.”
Summerhaze Co. v. Federal Deposit Ins. Corp., 2014 UT 28, ¶ 38, 332
P.3d 908 (quotation simplified). But “if the underlying complaint
alleges any facts or claims that might fall within the ambit of the
policy, the insurer must offer a defense.” Id. ¶ 36 (quotation
simplified). See Equine Assisted Growth, 2011 UT 49, ¶ 8 (“Where
factual questions render coverage uncertain the insurer must
defend until those uncertainties can be resolved against
coverage.”) (quotation simplified). In other words, “when in
doubt, defend.” Benjamin, 2006 UT 37, ¶ 22 (quotation simplified).

A. Breach of the Duty to Defend

¶64 Farmers Insurance challenges the trial court’s ruling on
summary judgment that it breached its duty to defend Jared
against Farm Bureau’s complaint. 28 The court held that its prior
determination that Farmers Insurance had properly cancelled the

27. “This is because the duty to indemnify is determined by the
underlying facts of the case, while the duty to defend is controlled
by the allegations in the complaint against the insured.”
Summerhaze Co. v. Federal Deposit Ins. Corp., 2014 UT 28, ¶ 36, 332
P.3d 908 (quotation simplified).

28. Farmers Insurance also argues that Farm Bureau lacks
standing to litigate this issue. But because Jared—who clearly
does have standing—likewise presents argument on the duty to
defend, and because we do not base our holding on this issue on
any argument solely attributable to Farm Bureau, we need not
consider this argument.

20180699-CA 37 2023 UT App 136
 Farm Bureau v. Weston

insurance policy on the 1992 Ford Explorer prior to the accident
was immaterial to this issue because Farm Bureau’s complaint
alleged that Farmers Insurance “had not complied with the
statutory requirements before cancelling the . . . insurance
coverage for non-payment” and that Jared was insured by the
policy at the time of the accident. Accordingly, the court
concluded that Farmers Insurance was “required to defend until
the uncertainties could be resolved against coverage”—i.e., until
the court determined that Farmers Insurance had properly
cancelled the insurance policy—and that by not doing so, Farmers
Insurance had breached its duty to defend.

¶65 Farmers Insurance challenges this ruling, contending that
an insurer has no duty to defend in the absence of a contract. It
asserts that because the insurance contract is the source of the
duty to defend, the duty cannot exist if there is no contract.
Accordingly, because there was no active policy on the 1992 Ford
Explorer at the time of the accident, Farmers Insurance did not
have a duty to defend Jared against Farm Bureau’s lawsuit.
Although we agree that an insurer generally does not have a duty
to defend when an event occurs after an insurance policy was
cancelled, see 14 Steven Plitt et al., Couch on Insurance § 201:3 (3d
ed. June 2023 update) (“It has been held that an insurer has no
duty to defend . . . where the alleged event occurred . . . [b]efore
the policy went into effect” or “[a]fter the policy had been
cancelled.”), we nonetheless hold that because a genuine issue of
fact existed regarding whether the insurance policy had been
properly cancelled, Farmers Insurance still had a duty to defend
Jared until that issue had been resolved in its favor.

¶66 Farmers Insurance is correct that generally “the duty to
defend arises solely under contract.” Fire Ins. Exch. v. Estate of
Therkelsen, 2001 UT 48, ¶ 22, 27 P.3d 555 (quotation simplified). As
discussed above, it is for that reason that “the duty to defend is
controlled by the allegations in the complaint against the
insured.” Summerhaze Co. v. Federal Deposit Ins. Corp., 2014 UT 28,

20180699-CA 38 2023 UT App 136
 Farm Bureau v. Weston

¶ 36, 332 P.3d 908 (quotation simplified). Thus, until an insurer
can establish that the claims against the insured fall outside of
policy coverage, the insurer is obligated to defend an insured in a
lawsuit whenever “the complaint alleges a risk within the
coverage of the policy.” Benjamin v. Amica Mutual Ins. Co., 2006 UT
37, ¶ 16, 140 P.3d 1210 (quotation simplified). See id. ¶ 25; Equine
Assisted Growth & Learning Ass’n v. Carolina Cas. Ins. Co., 2011 UT
49, ¶ 8, 266 P.3d 733. For this reason, the duty to defend may exist
in situations where “the insurer is ultimately not liable to
indemnify the insured.” Estate of Therkelsen, 2001 UT 48, ¶ 22. We
see no reason to stray from these well-established principles in a
situation where genuine issues of fact exist regarding whether an
existing insurance policy was in effect at the relevant time.

¶67 This holding is likewise in line with the Restatement of the
Law of Liability Insurance, which provides:

An insurer that has the duty to defend . . . must
defend until its duty to defend is terminated . . . by
declaratory judgment or otherwise, unless facts not
at issue in the legal action for which coverage is
sought and as to which there is no genuine dispute
establish that . . . [t]here is no duty to defend because
the insurance policy has been properly cancelled.

Restatement of the Law of Liability Insurance § 13(3)(e) (Am. Law
Inst. 2019) (emphasis added). Cf. 14 Steven Plitt et al., Couch on
Insurance § 201:3 (3d ed. June 2023 update) (stating that where
“doubt exists whether the claim against the insured arguably falls
within policy coverage, such doubts must be resolved in favor of
the insured”). Thus, an insurer may properly decline to offer a
defense on the ground that the insurance policy had been
cancelled only when there is no genuine issue of fact regarding
the cancellation. This was not the case here.

¶68 There is no question that a contract did exist for Farmers
Insurance to insure the 1992 Ford Explorer. Additionally, both

20180699-CA 39 2023 UT App 136
 Farm Bureau v. Weston

Jared and Farm Bureau alleged that Farmers Insurance
improperly cancelled the insurance policy. It was not until after
the first bench trial—held some four years after the trial court
entered the 2009 Judgment against Jared—that the court resolved
this factual dispute in favor of Farmers Insurance. Thus, because
a genuine dispute of fact existed regarding whether Farmers
Insurance properly cancelled the insurance policy, Farmers
Insurance was still obligated to defend Jared until that issue was
resolved, and Farmers Insurance breached its duty to defend by
failing to do so. See Equine Assisted Growth, 2011 UT 49, ¶ 8
(“Where factual questions render coverage uncertain, the insurer
must defend until those uncertainties can be resolved against
coverage.”) (quotation simplified); Estate of Therkelsen, 2001 UT 48,
¶ 22 (stating that an insurer may have a duty to defend in
situations where “the insurer is ultimately not liable to indemnify
the insured”).

¶69 Farmers Insurance resists this conclusion and points to our
Supreme Court’s decision in McCarty v. Parks, 564 P.2d 1122 (Utah
1977), in support of its argument that “[i]f there is no policy, there
can be no duty to defend.” In that case, an Arizona-based
employer gave permission to its employee, Parks, to take the
company car on a two-to-three-day trip to Flagstaff, Arizona. See
id. at 1123. But instead of going to Flagstaff, Parks, without the
knowledge or consent of the employer, took the car to Salt Lake
City, where he was involved in an automobile accident over two
months later. See id. A party injured in the accident sued Parks,
now an ex-employee, and a default judgment was entered against
him. See id. at 1122–23. A demand for payment was made against
the insurer of the employer’s vehicle. Id. at 1123. On appeal, our
Supreme Court, in relevant part, affirmed the trial court’s factual
determination that Parks “was not driving the car with the
permission of the insured owner.” See id. at 1124. Thus, Parks was
not covered under the employer’s insurance policy and the
insurer was therefore not liable for the damages caused by Parks.
See id. Next, the Court held that because the duty to defend “only

20180699-CA 40 2023 UT App 136
 Farm Bureau v. Weston

runs to those insured under the policy” and because Parks was
found not to be covered under the policy, the insurer was not
obligated to defend Parks in the lawsuit initiated against him. See
id. The Court did note, however, that “[i]t is undoubtedly true that
where any substantial question as to coverage exists, it may
involve some risk on the part of the insurance company to refuse
to defend.” Id. But because the trial court ultimately vindicated
the insurer’s decision not to defend Parks, the Court held the
insurer did not have a duty to defend him and therefore the
insurer could not have breached the duty. See id.

¶70 We do not read McCarty as contradicting our holding. In
that case, Parks, who had been granted permission to take the
vehicle on a two- or three-day trip to Flagstaff, did not have
permission to drive to and remain in Salt Lake City for over two
months. In that scenario, in which the vehicle was essentially
stolen, there was no reasonable basis on which to conclude that
Parks was insured under the employer’s policy at the time of the
accident. This stands in stark contrast to the present case in which
a genuine issue existed as to whether Farmers Insurance properly
cancelled the insurance policy, which issue was not resolved
without some difficulty both in the trial court and on appeal.

¶71 Accordingly, we hold that Farmers Insurance had a duty
to defend Jared until the court determined that the insurance
policy had been properly cancelled. Because Farmers Insurance
did not defend Jared in the underlying action, it breached the duty
to defend.

B. Damages for Breach of the Duty to Defend

¶72 Having concluded that Farmers Insurance breached its
duty to defend, we next turn to the question of damages. Jared
raises several challenges to the trial court’s damages award for
Farmers Insurance’s breach of the duty to defend. We address
each in turn.

20180699-CA 41 2023 UT App 136
 Farm Bureau v. Weston

1. The 2009 Judgment

¶73 Jared argues that he is entitled, as a matter of law, to a
judgment equal to the amount of the 2009 Judgment entered
against him. In light of our Supreme Court’s decision in
Summerhaze Co. v. Federal Deposit Insurance Corp., 2014 UT 28, 332
P.3d 908, we agree. 29

¶74 In Summerhaze, our Supreme Court clarified that “if an
insurer has notice of a claim against an insured, and has been
afforded an opportunity to appear and defend, regardless of
whether the insurer actually appears, any judgment against the
insured will also conclusively bind the insurer.” Id. ¶ 37 (emphasis
added) (quotation otherwise simplified). See id. ¶ 38 (“An insurer

29. Farmers Insurance asserts that “[t]his argument appears to be
unpreserved” and that we should therefore “decline to consider
it.” This is incorrect. Although Jared did not cite in his opening
brief the record showing that this issue was preserved, in
contravention of rule 24(a)(5)(B) of the Utah Rules of Appellate
Procedure, he provided the requisite record citations in his reply
brief. Jared’s preservation of this issue is inarguable. He argued in
a motion for summary judgment that “[b]ecause Farmers failed to
defend, judgment should be entered against it in the amount of
the judgment against” him. The trial court also explicitly rejected
Jared’s argument, stating that it “conflate[d] the duty to defend
with the duty to indemnify.” Although Jared did not cite our
Supreme Court’s opinion in Summerhaze Co. v. Federal Deposit
Insurance Corp., 2014 UT 28, 332 P.3d 908, in his motion—indeed,
his motion predated the opinion by a matter of months—a party
need only preserve an issue, and “new arguments, when brought
under a properly preserved issue or theory, do not require an
exception to preservation.” State v. Johnson, 2017 UT 76, ¶ 14 n.2,
416 P.3d 443 (emphasis in original). This includes “citing new
authority or cases supporting an issue that was properly
preserved.” Id.

20180699-CA 42 2023 UT App 136
 Farm Bureau v. Weston

that refuses a tender of defense by its insured takes the risk not
only that it may eventually be forced to pay the insured’s legal
expenses but also that it may end up having to pay for a loss that
it did not insure against.”) (quotation simplified); Speros v. Fricke,
2004 UT 69, ¶ 52, 98 P.3d 28 (“As a general rule, when an insurer,
whose policy requires it to defend its insured, receives notice of a
suit against the insured and is allowed an opportunity to defend,
but refuses, the insurer is bound by the findings and judgment
therein.”) (quotation simplified). The Court further stated that “an
insurer may challenge its liability for the judgment, contest the
amount of damages, or set forth any other available defense that
the insured neglected to make” only if the insurer was not put on
notice of the lawsuit through tender of defense. 30 Summerhaze,

30. The dissent disagrees with our interpretation of this statement,
asserting that “[t]he quotation from Summerhaze states simply that
an insurer who does not receive a tender of defense from an
insured ‘may challenge its liability for the judgment, contest the
amount of damages, or set forth any other available defense that
the insured neglected to make.’” Infra note 46. See Summerhaze,
2014 UT 28, ¶ 37 (“[W]ithout a tender of defense, an insurer may
challenge its liability for the judgment, contest the amount of
damages, or set forth any other available defense that the insured
neglected to make.”). The dissent further states that “[n]either this
paragraph of Summerhaze nor any other ever states or holds that
an insurer who breaches its duty to defend is foreclosed from
raising coverage defenses in a second case.” Infra note 46.
Although the dissent is correct that the quote in question does
not expressly indicate that an insurer who receives notice of an
action against an insured may not “challenge its liability for the
judgment, contest the amount of damages, or set forth any other
available defense that the insured neglected to make,”
Summerhaze, 2014 UT 28,¶ 37, it naturally follows that if an insurer
who did not receive notice may do so, then an insurer who did
receive notice may not. Otherwise, such discussion on the
(continued…)

20180699-CA 43 2023 UT App 136
 Farm Bureau v. Weston

2014 UT 28, ¶ 37 (emphasis added). This is because, as previously
discussed, an insurer’s duty to defend is “broader than its duty to
indemnify.” Id. ¶ 36 (quotation simplified). Additionally, an
insurer’s duty to defend is a fiduciary duty. See Beck v. Farmers Ins.
Exch., 701 P.2d 795, 799–800 (Utah 1985).

¶75 The Court further stated that an insurer that receives a
tender of defense but believes it is not liable for coverage has two
options of how to proceed without risking breach of the duty to
defend: (1) it “may either protect its interests through a
declaratory judgment proceeding asking the court to determine
coverage under an insurance policy” or (2) “it may defend the suit
under a reservation of its right to seek repayment later.”
Summerhaze, 2014 UT 28, ¶ 38 (quotation simplified). See Farmers
Ins. Exch. v. Call, 712 P.2d 231, 237 (Utah 1985) (“When faced with
a decision as to whether to defend or refuse to defend, an insurer
is entitled to seek a declaratory judgment as to its obligations and
rights.”); General Agents Ins. Co. of Am., Inc. v. Midwest Sporting
Goods Co., 828 N.E.2d 1092, 1102 (Ill. 2005) (“Where the insurance
carrier is uncertain over insurance coverage for the underlying
claim, the proper course is for the insurance carrier to tender a
defense and seek a declaratory judgment as to coverage under the

distinction regarding notice would have been wholly
unnecessary. Indeed, the Court first stated that “[i]f an insurer has
notice of a claim against an insured . . . any judgment against the
insured will also conclusively bind the insurer,” id. (emphasis
added) (quotation otherwise simplified), which stands in contrast
to its later statement of what the insurer may do in the opposite
situation where the insurer did not receive notice. Our
interpretation is further supported by the Court’s later statement
that “an insurer that refuses a tender of defense by its insured
takes the risk not only that it may eventually be forced to pay the
insured’s legal expenses but also that it may end up having to pay
for a loss that it did not insure against.” Id. ¶ 38 (quotation
simplified).

20180699-CA 44 2023 UT App 136
 Farm Bureau v. Weston

policy.”) (quotation simplified). And as discussed above, an
insurer who fails to take these steps “takes the risk not only that
it may eventually be forced to pay the insured’s legal expenses but
also that it may end up having to pay for a loss that it did not insure
against.” Summerhaze, 2014 UT 28, ¶ 38 (emphasis added) (quoting
Hamlin Inc. v. Hartford Accident & Indem. Co., 86 F.3d 93, 94 (7th
Cir. 1996)). 31 This is because a breach of the duty to defend

31. The court in Hamlin Inc. v. Hartford Accident & Indemnity Co.,
86 F.3d 93 (7th Cir. 1996), explained that “[i]f the lack of a defender
causes the insured to throw in the towel in the suit against it, the
insurer may find itself obligated to pay the entire resulting
judgment or settlement even if it can prove lack of coverage.” Id.
at 94. But the Nevada Supreme Court took a different approach.
After quoting the same provision in Hamlin that our Supreme
Court quoted in Summerhaze, the court stated, “However, we are
not saying that an entire judgment is automatically a consequence
of an insurer’s breach of its duty to defend; rather, the insured is
tasked with showing that the breach caused the excess judgment
and is obligated to take all reasonable means to protect himself
and mitigate his damages.” Century Surety Co. v. Andrew, 432 P.3d
180, 186 (Nev. 2018) (quotation simplified). Thus, in Nevada, the
insurer may be liable for the judgment only if the insurer’s breach
of the duty to defend caused the insured to be worse off and if the
insured took mitigating actions—as opposed to merely throwing
in the towel.
But our Supreme Court foreclosed either of these approaches
when it stated that an insurer may challenge “its liability for the
judgment, contest the amount of damages, or set forth any other
available defense that the insured neglected to make” only if the
insurer did not receive notice of the lawsuit. Summerhaze, 2014 UT
28, ¶ 37. See also supra note 30. This approach is more in line with
other jurisdictions that have held that the insurer is required to
pay the resulting judgment regardless of prejudice. See, e.g.,
Consolidated Rail Corp. v. Liberty Mutual Ins. Co., 416 N.E.2d 758,
(continued…)

20180699-CA 45 2023 UT App 136
 Farm Bureau v. Weston

forecloses the insurer from challenging “its liability for the
judgment.” 32 See id. ¶ 37.

¶76 Here, as discussed in Part III.A above, Farmers Insurance
had a duty to defend Jared against Farm Bureau’s lawsuit until
the trial court terminated the duty by ruling that Farmers
Insurance had properly cancelled the insurance policy. The court
entered the 2009 Judgment against Jared approximately four
years prior to this requisite ruling. By not defending Jared until
that point, Farmers Insurance violated the duty to defend.
Accordingly, although it was later determined that no insurance
policy was in effect at the time of the accident, because Farmers
Insurance had notice of Farm Bureau’s lawsuit against Jared, it

764 (Ill. App. Ct. 1981) (“[W]here potential coverage exists and an
insurer unjustifiably refuses to defend, the insurer is contractually
estopped from denying coverage. Prejudice is not a critical
factor.”); Farmers Union Mutual Ins. Co. v. Staples, 2004 MT 108,
¶ 29, 90 P.3d 381 (stating that an insurer that breached its duty to
defend “was estopped from denying coverage and [the insured]
was entitled to summary judgment”).

32. In addition to the underlying judgment and attorney fees, an
insurer who violates the duty to defend may also be liable for
consequential “damages for injury to reputation or credit rating,
[or] damages for emotional distress,” Campbell v. State Farm
Mutual Auto. Ins. Co., 840 P.2d 130, 139 (Utah Ct. App. 1992), cert.
denied, 853 P.2d 897 (Utah 1992), as well as for punitive damages
under a claim for breach of fiduciary duty, see id.; Norman v.
Arnold, 2002 UT 81, ¶ 35, 57 P.3d 997 (“In Utah, a claim for breach
of fiduciary duty is an independent tort that, on occasion, arises
from a contractual duty, and can serve as the basis for punitive
damages.”); Beck v. Farmers Ins. Exch., 701 P.2d 795, 800 (Utah
1985) (stating that the duty to defend is a fiduciary duty and that
breach of the duty “exposes insurers to consequential and
punitive damages awards in excess of the policy limits”).

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 Farm Bureau v. Weston

could not “challenge its liability for the judgment, contest the
amount of damages, or set forth any other available defense that
the insured neglected to make.” See id. We therefore reverse the
trial court’s damages award and remand with instructions to
enter an order directing Farmers Insurance to satisfy the 2009
Judgment and additional interest on Jared’s behalf.

¶77 The dissent engages in a thorough discussion of the two
general categories of approaches other jurisdictions have taken in
addressing the issue of damages for breach of the duty to defend:
the “Illinois Rule” and the “majority rule.” See infra ¶¶ 106–08.
The approach we have interpreted Summerhaze to mandate is
more akin to the Illinois Rule, 33 in that it precludes an insurer who
breaches the duty to defend from raising coverage defenses or
otherwise challenging the judgment entered against the party to
whom it owed the duty. The dissent, however, asserts that
“several Utah cases have, in [its] view, implicitly signaled an
affinity for the majority rule,” infra ¶ 109, under which “insurers
who breach their duty to defend are not thereby estopped from
raising coverage defenses later, and that the amount of damages
an insured sustains from an insurer’s breach of a duty to defend
must, for the most part, be shown through traditional methods of
proving damages for breach of contract,” infra ¶ 105. The dissent
further contends that, in its view, “the best reading of Summerhaze
is that it does not indicate adoption of the Illinois Rule.” Infra
¶ 124. Although this issue would greatly benefit from further
clarification from our Supreme Court, we disagree with the
dissent’s conclusion that Utah case law favors the majority rule.

33. But as discussed in more detail below, because in Utah the
duty to defend is a fiduciary duty, there are also significant
potential differences between the rule interpreted in Summerhaze
and the general Illinois Rule adopted by other jurisdictions—at
least in terms of the means by which the rule is reached. See infra
¶¶ 78–80. See also supra note 31.

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 Farm Bureau v. Weston

¶78 As an initial matter, the dissent discusses that the
jurisdictions that have adopted the majority rule have leveled the
following criticisms at the Illinois Rule: (1) if the duty to
indemnify and the duty to defend “are truly separate and distinct,
then an insurer’s wrongful failure to defend should not result in
a loss of an indemnity defense,” infra ¶ 108 (quoting Flannery v.
Allstate Ins. Co., 49 F. Supp. 2d 1223, 1228 (D. Colo. 1999)); (2) the
“punitive” nature of the Illinois Rule is “out of place in the
contract law context,” infra ¶ 108; and (3) estoppel, on which the
Illinois Rule is largely based, “is conceptually not a good fit”
because “in refusing to defend a claim, an insurer makes no
misrepresentation [about coverage] on which the insured relies to
its detriment,” infra ¶ 108 (alteration in original) (quoting Polaroid
Corp. v. Travelers Indem. Co., 610 N.E.2d 912, 922 (Mass. 1993)).

¶79 Concerning the first criticism, although the duty to
indemnify and the duty to defend are “two distinct duties,” “an
insurer’s duty to defend [is] broader than its duty to indemnify.”
Summerhaze, 2014 UT 28, ¶ 36 (quotation simplified). Although
this distinction has been discussed largely in terms of when the
duty to defend is triggered, i.e., when the “complaint alleges any
facts or claims that might fall within the ambit of the policy,” id.
(quotation simplified), the duty to defend is also broader in that
the insurer may be held liable for “consequential and punitive
damages awards in excess of the policy limits,” Beck v. Farmers Ins.
Exch., 701 P.2d 795, 800 (Utah 1985). A reasonable inference would
be that the duty to defend is broader than the duty to indemnify
in that it covers not only judgments within policy limits, but also
damages in excess of the policy limits.

¶80 Also, the second and third articulated concerns carry little
weight in Utah. Although “an insurer’s duty to defend arises
solely under the terms of the contract,” Equine Assisted Growth
& Learning Ass’n v. Carolina Cas. Ins. Co., 2011 UT 49, ¶ 8, 266 P.3d
733 (quotation simplified), our Supreme Court has elevated the
duty to defend to a fiduciary one that “exposes insurers to

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 Farm Bureau v. Weston

consequential and punitive damages awards in excess of the
policy limits,” Beck, 701 P.2d at 800. This is because “the contract
itself creates a fiduciary relationship because of the trust and
reliance placed in the insurer by its insured.” Id. at 799. Namely,
“the insurer controls the disposition of claims against its insured,
who relinquishes any right to negotiate on his own behalf,” and
“[a]n insurer’s failure to act in good faith exposes its insured to a
judgment and personal liability in excess of the policy limits.” Id.
Additionally, “[w]holly apart from the contractual obligations
undertaken by the parties,” in the third-party context, “the insurer
acts as an agent for the insured,” and “the law imposes upon all
agents a fiduciary obligation to their principals with respect to
matters falling within the scope of their agency.” Id. at 799–800.
Finally, in Utah, the duty to defend is also a statutory
requirement. See Utah Code Ann. § 31A-22-303(5) (LexisNexis
Supp. 2022) (“A policy containing motor vehicle liability coverage
imposes on the insurer the duty to defend, in good faith, any
person insured under the policy against any claim or suit seeking
damages which would be payable under the policy.”). For these
reasons, despite the contractual roots of the duty to defend, the
“punitive” nature of our holding is not out of place, nor do we
read Summerhaze as imposing an estoppel-based rule.

¶81 The dissent next discusses three Utah Supreme Court cases
that, “in [its] view, implicitly signaled an affinity for the majority
rule.” Infra ¶¶ 109–20. But in our view, two of those cases, Speros
v. Fricke, 2004 UT 69, 98 P.3d 28, and Benjamin v. Amica Mutual
Insurance Co., 2006 UT 37, 140 P.3d 1210, are of limited relevance
to the question of whether an insurer who breached its duty to
defend may raise coverage defenses to the underlying judgment.
And although the third case on which the dissent relies, McCarty
v. Parks, 564 P.2d 1122 (Utah 1977), is somewhat instructive, it is
at odds with Summerhaze, which, as the more recent case, carries
the day on this issue.

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 Farm Bureau v. Weston

¶82 In discussing Speros, 34 the dissent found it “notable that the
Speros Court spent nineteen paragraphs determining whether
coverage existed before analyzing whether Nationwide had
breached its duty to defend” because “[i]f the Speros court had
intended to adopt the Illinois Rule, there would have been no
need to discuss coverage.” Infra ¶ 116 (citation omitted). But it was
not necessary for the Court to consider adopting either rule in
Speros. 35 After determining that coverage existed—which was the
main point of contention in that case—the Court turned to the
duty to defend only in the context of addressing the issue of
whether “Nationwide is entitled to litigate anew the issue of
Hiatt’s liability for the accident,” Speros, 2004 UT 69, ¶ 48, which
was the subject of a default judgment, see id. ¶ 4. The Court
ultimately determined that “[w]hen Nationwide chose not to
defend Hiatt, it forfeited its opportunity to dispute the underlying
facts of the accident.” Id. ¶ 53. The issue of damages had already
been resolved by the court’s analysis on coverage and, given the
limited duty-to-defend issue the Court was asked to resolve, there
was no need for the Court to consider whether the breach of the
duty to defend precluded Nationwide from raising coverage
issues—to the contrary, the Court had already held that coverage
existed, thereby foreclosing the need to address such an issue.
Thus, because such an analysis was entirely unnecessary in Speros,
we do not read anything into the Court’s silence on the issue.

¶83 The dissent similarly notes that in Benjamin our Supreme
Court first addressed the duty to defend before turning to the
duty to indemnify. Infra ¶ 119. The dissent asserts that

34. Because the dissent provides a detailed summary of each
relevant case, we do not do so here.

35. There is no indication in Speros that the judgment entered
against Hiatt was in excess of the policy limits, thus triggering the
need for further analysis under the duty to defend.

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 Farm Bureau v. Weston

if the Illinois Rule were in effect, or if the Utah
Supreme Court intended to adopt or apply that rule,
there would be no need to engage in any analysis
with regard to whether Amica breached the duty to
indemnify because, under the estoppel rule, once it
was determined that Amica had breached its duty
to defend, Amica would be estopped from
contesting coverage.[36]

Infra ¶ 119. But the facts of that case readily provide for an
alternative explanation for why the Court proceeded to determine
whether Amica breached the duty to indemnify after it already
held that Amica breached the duty to defend. The two coworkers
filed separate suits against Benjamin, both alleging, among other
things, negligent infliction of emotional distress. See Benjamin,
2006 UT 37, ¶ 2. The Court held that Amica breached the duty to
defend only with regard to one of the coworker’s suits. See id. ¶ 26.
But “[b]ecause Amica never discontinued its defense in the
[second] case,” the Court held that Amica “did not breach its duty
to defend in that case.” Id. Accordingly, because there was no
breach of the duty to defend in the second case, the Court was

36. The dissent also notes that “even the majority opinion in this
case attends first to the question of whether the policy was
properly canceled, before then turning to the question of whether
Farmers Insurance breached its duty to defend,” which the
dissent asserts “is a majority rule process, at root.” Infra note 45.
But we initially undertook an analysis of whether the policy was
properly cancelled because, if it turned out that it had not been,
this much more difficult issue that has been the subject of
disagreement among this panel would have been unnecessary. To
be sure, after this legal question is more conclusively resolved,
future cases in which an insurer is held to have breached the duty
to defend might be more efficiently resolved by wholly omitting
discussion of damages for the duty to indemnify. But this was not
the case here.

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 Farm Bureau v. Weston

already required to reach the issue of the duty to indemnify at
least in reference to the second case. It therefore would have been
more efficient to simply resolve the issue of damages for both
cases based on the breach of the duty to indemnify. And in light
of this alternative explanation for the Court’s decision to address
the duty to indemnify after it had already resolved the duty to
defend issue, we likewise do not read too much into the Court’s
approach in Benjamin as concerns our resolution of the issue
currently before us.

¶84 This leaves the third case on which the dissent relies,
McCarty. In that case, our Supreme Court held that the “general
rule” that “an insurer, whose policy requires it to defend its
insured, receives notice of a suit against him and is allowed an
opportunity to defend, but refuses, is bound by the findings and
judgment therein” did not apply to findings not “necessary to
determination of the controversy between the immediate parties.”
McCarty, 564 P.2d at 1123. Accordingly, because “the issue as to
whether Mr. Parks was driving with the permission of the insured
was not a material issue in the main case,” the insurer was able to
subsequently litigate and eventually prevail on that issue. Id. at
1123–24. In light of this, the dissent views “McCarty as quite
strongly signaling affinity for the majority rule.” Infra ¶ 112.

¶85 But as the dissent acknowledges, in holding that the
insurer breached the duty to defend, the Court “did not engage in
the traditional duty-to-defend analysis of comparing the
plaintiff’s complaint against the applicable policy provisions, and
did not discuss whether the plaintiff’s complaint alleged that
Parks had permission to be driving the vehicle.” Infra ¶ 111.
Instead, it resolved the issue by relying on res judicata principles.
See McCarty, 564 P.2d at 1123–24. This, in our view, insufficiently
counters the mandates our Supreme Court later set forth in
Summerhaze, namely, that “any judgment against the insured will
also conclusively bind the insurer” that breaches the duty to
defend, Summerhaze, 2014 UT 28, ¶ 37 (emphasis added)

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 Farm Bureau v. Weston

(quotation otherwise simplified), or that “an insurer may
challenge its liability for the judgment, contest the amount of
damages, or set forth any other available defense that the insured
neglected to make” only if the insurer was not put on notice of the
lawsuit, id. See id. ¶ 38 (“An insurer that refuses a tender of
defense by its insured takes the risk not only that it may
eventually be forced to pay the insured’s legal expenses but also
that it may end up having to pay for a loss that it did not insure
against.”) (quotation simplified).

¶86 For these reasons, we disagree with the dissent’s
arguments, well-reasoned though they are. We also welcome
definitive clarification on this issue from our Supreme Court.

2. Emotional Distress

¶87 An insurer who violates the duty to defend may also be
liable for consequential “damages for injury to reputation or
credit rating, [or] damages for emotional distress.” Campbell v.
State Farm Mutual Auto. Ins. Co., 840 P.2d 130, 139 (Utah Ct. App.
1992), cert. denied, 853 P.2d 897 (Utah 1992). Here, the trial court
revised its prior decision on emotional damages and reduced its
award from $320,000 to $0 on the ground that Jared had not
proven causation. Instead, the court stated that the evidence
established that his emotional distress was caused by Farm
Bureau’s lawsuit, the 2009 Judgment entered against him, and the
lack of insurance coverage—not by Farmers Insurance’s breach of
the duty to defend. The court also rejected Jared’s argument that
he suffered emotional distress because the outcome of the
underlying litigation would have been different if Farmers
Insurance had represented him, stating that this assertion
contradicted the parties’ prior stipulation that “[t]here is no
evidence that a different outcome would have resulted had
Farmers accepted [Jared’s] tender of defense—the facts
supporting [Jared’s] fault and the amount needed to make [the
deceased driver’s] heirs whole would not have changed based on

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 Farm Bureau v. Weston

Farmers’ provision of a defense.” Lastly, the court stated that
Jared’s “intermingling of the duty to defend issue with the issues
of liability and coverage improperly leaves the fact-finder to
speculate regarding which damages were actually caused by
Farmers’ breach of the duty to defend.” Accordingly, quoting
Gregory & Swapp, PLLC v. Kranendonk, 2018 UT 36, 424 P.3d 897,
the trial court stated that because “testimony that [a breach of
contract] could cause emotional damages is not enough to support
a finding that [the breach] did cause emotional damages,” see id.
¶ 43 (emphases in original), and because “an abundance of
evidence as to breach of duty cannot make up for a deficiency of
evidence as to causation” or “for a deficiency of evidence as to
damages,” see id. ¶ 44 (quotation simplified), Jared “failed to
present evidence that gives rise to a reasonable probability that he
suffered damages caused by Farmers’ breach of the duty to
defend.” See Murphy v. Whalen, 2018 UT App 215, ¶ 7, 437 P.3d 619
(“To prove the fact of damages, the party must do more than
merely give rise to speculation that damages in fact occurred and
instead must provide evidence that gives rise to a reasonable
probability that the party suffered damages.”) (quotation
simplified).

¶88 Jared argues that the trial court “erred by relying on the
causation analysis in the breach of fiduciary duty claim in Gregory
& Swapp” because it is distinguishable from the case at hand. In
that case, the plaintiff sought emotional distress damages arising
from her attorney’s breach of fiduciary duty when he concealed
from her that her personal injury lawsuit had been dismissed. See
2018 UT 36, ¶¶ 10, 40. Although a jury awarded the plaintiff a
significant sum for emotional damages as a result of the breach,
see id. ¶ 3, our Supreme Court reversed, stating that “the evidence
provided at trial shows only that she suffered emotional distress
due to [her attorney’s] legal malpractice” that resulted in
dismissal of her earlier lawsuit, id. ¶ 40, and “the jury had no
evidence upon which to base its verdict that [the plaintiff]

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 Farm Bureau v. Weston

suffered emotional distress damages as a result of [her attorney’s]
intentional concealment,” id. ¶ 45.

¶89 Jared argues that Gregory & Swapp is distinguishable
because “[t]he specific nature of the breach of fiduciary duty” in
that case “was merely informational,” and it therefore “caused no
additional harm to the plaintiff’s situation otherwise.” Whereas
here, Jared asserts, Farmers Insurance’s breach of fiduciary duty
“resulted in actual harm” because if Farmers Insurance had
“defended Jared, and settled within policy limits when the
opportunity was presented, he would not have endured the
emotional distress of a seven-figure excess judgment against
him.” In essence, Jared argues that the court erred in rejecting his
argument that his being held liable for an excess judgment caused
emotional distress. But Jared does not address his stipulation
below that “the facts supporting [Jared’s] fault and the amount
needed to make [the deceased driver’s] heirs whole would not
have changed based on Farmers’ provision of a defense.”
Additionally, Jared has not challenged the court’s finding of fact
in its original order awarding him $320,000 in emotional damages
that “[t]he outcome of the underlying action would not have
changed had [Jared] been provided counsel by” Farmers
Insurance. For this reason, Jared’s argument distinguishing
Gregory & Swapp necessarily fails.

¶90 Jared also contends that Gregory & Swapp distinguished
Beck v. Farmers Insurance Exchange, 701 P.2d 795 (Utah 1985), which
specifically discussed emotional damages in a first-party
insurance context for breach of contract, see Gregory & Swapp, 2018
UT 36, ¶ 35 n.42. Jared asserts that “an insurance contract is
different than an attorney/client retainer agreement, for purposes
of seeking emotional distress damages upon breach of contract.”
We disagree.

¶91 In Gregory & Swapp, our Supreme Court stated that just like
with insurance contracts, “an argument can be made that clients

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 Farm Bureau v. Weston

retain attorneys in personal injury cases not only to obtain
monetary compensation, but also to provide peace of mind, and
therefore mental anguish is fairly contemplated in the contract.”
Id. See also Beck, 701 P.2d at 802 (“[I]t is axiomatic that insurance
frequently is purchased not only to provide funds in case of loss,
but to provide peace of mind for the insured or his
beneficiaries.”). The Court further quoted Beck (which discussed
emotional distress damages for breach of contract in the
first-party insurance context, see Beck, 701 P.2d at 801–02) for the
proposition that, in any event, “the foreseeability of any such
damages will always hinge upon the nature and language of the
contract and the reasonable expectations of the parties,” Gregory
& Swapp, 2018 UT 36, ¶ 35 n.42 (quotation simplified), and that
based on this, “the nature and language of the contract do not
support emotional distress damages in this case.” Id. The Court
thus expressly applied Beck and did not distinguish it.

¶92 In any event, our Supreme Court’s discussion of Beck
occurred in the context of its holding that the plaintiff was not
entitled to emotional distress damages, as a matter of law, under
a breach of contract theory. See id. ¶ 36. The standard the trial court
in this case relied on fell under our Supreme Court’s discussion of
breach of fiduciary duty, see id. ¶¶ 37, 43–44, under which umbrella,
breach of the duty to defend also falls, see Beck, 701 P.2d at 799.

¶93 For these reasons, we affirm the trial court’s later
determination that Jared had not proven that he suffered
emotional distress as a result of Farmers Insurance’s failure to
defend against Farm Bureau’s lawsuit. 37

37. Because we affirm the trial court’s holding that Jared failed to
prove that Farmers Insurance’s breach of the duty to defend
caused his emotional distress, we do not address his argument
that the court “erred when it limited Jared’s emotional distress
(continued…)

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 Farm Bureau v. Weston

3. Attorney Fees

¶94 “Attorney fees may be recoverable as consequential
damages flowing from an insurer’s breach of either the express or
the implied terms of an insurance contract” as long as the fees
“were reasonably within the contemplation of, or reasonably
foreseeable by, the parties at the time the contract was made.”
Billings v. Union Bankers Ins. Co., 918 P.2d 461, 468 (Utah 1996).
“Breach of a fiduciary obligation is a well-established exception to
the American rule precluding attorney fees in tort cases
generally.” Kealamakia, Inc. v. Kealamakia, 2009 UT App 148, ¶ 7,
213 P.3d 13 (quotation simplified). Thus, when attorney fees are
awarded as consequential damages—as opposed to pursuant to a
statute or contract—the inquiry “is not whether the fee awards are
reasonable, but whether they are foreseeable.” USA Power, LLC v.
PacifiCorp, 2016 UT 20, ¶ 93, 372 P.3d 629. “[I]t is this foreseeability
requirement that justifies an award based solely on a contingency
fee.” Id. For attorney fees based on a contingency fee agreement
to be foreseeable, the party seeking attorney fees must show
(1) “that it was foreseeable that the insured party would incur
attorney fees if the insurer breached” and (2) “that the specific
contingency fee arrangement entered into by the insured party
was foreseeable.” Id. ¶ 94.

¶95 Jared challenges the trial court’s denial of his request for
attorney fees for Farmers Insurance’s breach of the duty to defend.
He argues that he “should be awarded 40% of the [2009 Judgment]
against him,” which figure reflects the contingency fee agreement
he entered with his attorneys. In light of our holding that Jared is

damages to a period during which he was unrepresented by
counsel.” We likewise do not address his argument that the court
erred in not awarding damages for impairment to his credit score
because this issue was not preserved. See State v. Johnson, 2017 UT
76, ¶ 15, 416 P.3d 443.

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 Farm Bureau v. Weston

entitled to an award equal to the 2009 Judgment plus interest, we
agree.

¶96 The trial court originally awarded Jared $128,000 in
attorney fees as consequential damages, which represented 40%
of the court’s original emotional distress award that Jared would
have owed his attorneys under the contingency fee agreement. In
so doing, the court found that (1) “[i]t was foreseeable to Farmers
that its refusal to defend would force [Jared] to obtain counsel”
and (2) “[i]t was also foreseeable to Farmers that counsel would
charge a contingent fee of 40% as a result of Farmers’ breach of
the duty to defend.” The court later reversed this attorney fees
award but did so only because it had reduced its emotional
damages award to $0. Based on our holding that Jared is entitled
to a judgment equal to the amount of the 2009 Judgment plus
post-judgment interest, Jared is likewise entitled to an award of
40% of that judgment as attorney fees—which award the trial
court has already determined to be foreseeable. We therefore
remand to the trial court to enter an award of attorney fees in
accordance with the contingency fee agreement. 38

38. Based on this award of attorney fees, we do not consider
Jared’s arguments that he is entitled to recover the “market value”
and “reasonable” value of his attorneys’ services for the litigation
he engaged in related to his liability for the accident and to the
broader issues related to cancellation of the insurance policy. This
also includes his contentions that the court erred in refusing to
bifurcate the second bench trial to determine reasonable attorney
fees separately and his assertion that the court erred in excluding
his exhibits related to attorney fees. Jared does not address the
basis, contractual or otherwise, for an award of attorney fees that
is in addition to the contingency fees he contracted to pay his
attorneys. Indeed, the above award of attorney fees represents
direct compensation for his attorneys’ efforts in establishing that
(continued…)

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 Farm Bureau v. Weston

IV. Duty of Good Faith and Fair Dealing

¶97 Jared challenges the trial court’s grant of Farmers
Insurance’s motion for partial summary judgment on Jared’s
breach of the duty of good faith and fair dealing claim. A
third-party insurer has “a fiduciary responsibility to act in good
faith and be zealous in protecting the interests of its insured as it
would in looking after its own.” UMIA Ins., Inc. v. Saltz, 2022 UT
21, ¶ 44, 515 P.3d 406 (quotation simplified). Several duties “are
inherent in the duty to act in good faith,” including the duties to
“act promptly and reasonably in accepting or rejecting the
insured’s claim for coverage, defend the insured, diligently
investigate the claims against the insured, fairly and reasonably
evaluate the claims against the insured, and fairly and reasonably
settle the claims against the insured.” Id. ¶ 45 (quotation
simplified).

¶98 The trial court granted Farmers Insurance’s unopposed
motion for partial summary judgment on the ground that the
motion showed that Jared had “not identified facts supporting his
bad faith claim,” thereby shifting the burden to Jared “to show
that genuinely disputed material facts barred the relief sought.”
See Orvis v. Johnson, 2008 UT 2, ¶ 18, 177 P.3d 600 (“A summary
judgment movant, on an issue where the nonmoving party will
bear the burden of proof at trial, may satisfy its burden on
summary judgment by showing, . . . that there is no genuine issue
of material fact. Upon such a showing . . . the burden then shifts
to the nonmoving party, who may not rest upon the mere
allegations or denials of the pleadings, but must set forth specific

Farmers Insurance breached the duty to defend because Jared was
found liable in the accident-related litigation and was therefore
not entitled to any award from which his attorneys could be
compensated 40%. Accordingly, because he has not carried his
burden of persuasion on this threshold issue, we do not consider
the issues that stem therefrom.

20180699-CA 59 2023 UT App 136
 Farm Bureau v. Weston

facts showing that there is a genuine issue for trial.”) (quotation
simplified). The court ruled that by not opposing the motion,
Jared failed to show that a genuine issue of material fact barred
summary judgment.

¶99 Jared’s argument on cross-appeal is limited to asserting
that Farmers Insurance’s motion “failed to identify facts
supporting its purported investigation,” and that “there was
nothing in [Farmers Insurance’s] memorandum which addressed
whether its duty to defend was ‘fairly debatable’ by reference to
the allegations contained in [Farm Bureau’s] complaint.” In other
words, Jared argues that Farmers Insurance failed to meet its
burden on summary judgment. But Jared does not address the
court’s reasoning in granting summary judgment, i.e., that the
burden of showing a genuine issue of fact shifted to him and that
he failed to meet this burden when he did not oppose the motion.
Accordingly, because Jared does not address the ground on which
the court based its ruling, we do not reach the merits of Jared’s
argument. 39 See Salt Lake County v. Butler, Crockett & Walsh Dev.
Corp., 2013 UT App 30, ¶ 28, 297 P.3d 38 (stating that appellate
courts will not reverse a trial court’s ruling where the appellant
does not challenge all grounds on which the court’s ruling rests).

V. Award of Costs Related to the 2009 Judgment

¶100 Finally, Farmers Insurance argues that the trial court
“erred when it allowed Farm Bureau to amend its judgment
against Jared in 2019” under rule 54(d) of the Utah Rules of Civil
Procedure. See Utah R. Civ. P. 54(d)(1) (“Unless a statute, these
rules, or a court order provides otherwise, costs should be

39. Because we do not disturb the trial court’s grant of summary
judgment on this issue, we likewise do not address Jared’s
argument that the court subsequently erred in determining that
the law of the case doctrine applied to its summary judgment
ruling.

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 Farm Bureau v. Weston

allowed to the prevailing party.”). It contends that even if the 2009
Judgment had not expired—which we hold it had not, see supra
Part I—the Judgment “could not be amended to add costs Farm
Bureau incurred during the entire litigation.” We agree.

¶101 The 2009 Judgment—which represented the arbitration
award Farm Bureau obtained against Jared for causing the
automobile accident, plus pre-judgment interest—provided that
it “shall be augmented in the amount of reasonable costs and
attorney fees expended in collecting said Judgment by execution
or otherwise as shall be established by affidavit.” Nine years later,
in 2018, Farm Bureau moved to amend the 2009 Judgment to
include $11,423.04 in costs that it incurred between 2005 and 2013.
Most of the list consisted of costs that were unrelated to collection
on the 2009 Judgment, including arbitration fees, deposition costs,
subpoena costs, and transcript costs. The court initially denied
Farm Bureau’s motion, stating that it could “discern no costs or
attorney fees detailed therein that were incurred in collecting the
2009 Judgment.” But the court later awarded Farm Bureau the
requested costs, stating that because the 2009 Judgment was not a
final judgment, it could be “properly augmented to include the
costs requested” by Farm Bureau, which the court concluded
“were necessary and reasonable given the complexity of this
litigation and are therefore recoverable in accordance with rule
54(d)(1).”

¶102 But the 2009 Judgment permitted subsequent
augmentation for the limited purpose of adding an award for,
with our emphasis, “reasonable costs and attorney fees expended
in collecting said Judgment by execution or otherwise[.]”As an
initial matter, the costs Farm Bureau claimed to have incurred
between 2005 and March 2009, when the court first entered the
2009 Judgment, could not possibly have been related to
“collecting said Judgment.” And almost all the costs Farm Bureau
incurred between March 2009 and 2013 appear to be related to
Farm Bureau’s subsequent litigation against Farmers Insurance

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 Farm Bureau v. Weston

regarding whether the insurance policy was in effect at the time
of the accident. Such litigation was ultimately resolved following
the first bench trial, and, notably, Jared and Farm Bureau were
allied at this point in seeking a judgment against Farmers
Insurance. See supra note 8. It cannot be said that the subsequent
litigation in this matter constituted efforts to collect the 2009
Judgment. And in any event, even if some of the requested costs
were related to collection on the 2009 Judgment, because the 2009
Judgment did not become enforceable for nearly a decade after its
entry, any actions taken in the interim to collect on the judgment
would have been improper.

¶103 We accordingly reverse and remand with instructions for
the trial court to strike the $11,423.04 award of costs from the 2009
Judgment.

CONCLUSION

¶104 The 2009 Judgment was not a final judgment under rule
54(a) of the Utah Rules of Civil Procedure and therefore the
eight-year period under section 78B-5-202(1) of the Utah Code did
not begin to run on entry of the judgment. Accordingly, none of
the issues Farm Bureau and Jared raise on appeal are moot, and
we have jurisdiction to address all issues raised. We affirm the
trial court’s ruling that the insurance policy on the 1992 Ford
Explorer was cancelled prior to the fatal accident, the court’s
ruling on summary judgment that Farmers Insurance did not
breach its duty of good faith and fair dealing but that it did breach
its duty to defend, and the court’s determination that Jared had
not proven that Farmers Insurance’s breach of the duty to defend
was the cause of his emotional distress. We reverse and remand,
however, with instructions that the trial court remove the award
of $11,423.04 in costs from the 2009 Judgment, order Farmers
Insurance to pay the 2009 Judgment and any related costs and
interests on Jared’s behalf, and enter an award of attorney fees
equaling 40% of the aforementioned judgment in favor of Jared.

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 Farm Bureau v. Weston

HARRIS, Judge (concurring in part and dissenting in part):

¶105 I concur without reservation in Parts I, II, IV, and V of the
majority opinion. I also concur completely in Part III.A—
concluding that Farmers Insurance breached its duty to defend
Jared in the suit filed against him by Farm Bureau—and in Part
III.B.2—affirming the trial court’s determination that Jared had
not proven that he sustained emotional distress as a result of
Farmers Insurance’s breach of its duty to defend. But I cannot join
Parts III.B.1 and III.B.3 of the majority opinion, because I believe
the best (but by no means the only possible) reading of Utah
Supreme Court case law is that, in Utah, insurers who breach their
duty to defend are not thereby estopped from raising coverage
defenses later, and that the amount of damages an insured
sustains from an insurer’s breach of a duty to defend must, for the
most part, be shown through traditional methods of proving
damages for breach of contract. 40 In this case, I would affirm the
trial court’s determination that Jared failed to satisfy his burden
of proving any such damages.

40. I am already on record, in a way, on this issue. As a district
judge, in another case, I issued a lengthy memorandum decision
on these very issues. See Fleming v. State Auto Prop. & Cas. Ins. Co.,
No. 100500504 (Utah 3d Dist. Ct., Summit County, Nov. 14, 2014).
Nothing in the briefing and argument associated with this case
has persuaded me that my analysis in Fleming was incorrect or
should be revisited. In fact, as noted below, federal judges—both
at the district court level and on appeal—viewed the relevant
issues in the Fleming cases largely the same way I did. See Auto-
Owners Ins. Co. v. Fleming, 701 F. App’x 738, 740–41, 740 n.1 (10th
Cir. 2017); Auto-Owners Ins. Co. v. Timbersmith, Inc., No. 2:12-cv-
00786, 2016 WL 3356800, at *3 (D. Utah June 15, 2016), aff’d, Auto-
Owners Ins. Co. v. Fleming, 701 F. App’x 738 (10th Cir. 2017). My
thoughts in this separate opinion therefore largely track my
previous decision.

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 Farm Bureau v. Weston

I

¶106 For years, courts across the country have wrestled with the
exact issue presented here: what are, or should be, the
consequences visited upon an insurer that breaches its duty to
defend an insured. There is no consensus on the question. Courts
in some states, most notably Illinois, have held that an insurer
whose insured has been sued on a claim that the insurer believes
is beyond the scope of the policy’s coverage has three options:
(1) seek a declaratory judgment relieving it of the obligation to
defend; (2) defend the insured under a reservation of rights; or
(3) do neither and risk a subsequent finding that it breached its
duty to defend, “a finding that would require it to indemnify the
insured for any liability the insured incurs in the underlying
action.” See Roman Cath. Diocese of Springfield in Ill. v. Maryland Cas.
Co., 139 F.3d 561, 565–66 (7th Cir. 1998) (applying Illinois law); see
also Solo Cup Co. v. Federal Ins. Co., 619 F.2d 1178, 1184 (7th Cir.
1980) (also applying Illinois law). These courts have emphasized
that their rule is grounded in principles of estoppel: “[t]he
estoppel that the insurer risks when it elects to do nothing is an
estoppel to deny coverage if it turns out that the insurance
company did have an obligation to defend and breached that
obligation.” See Roman Cath. Diocese, 139 F.3d at 566; see also
Sentinel Ins. Co. v. First Ins. Co. of Haw., 875 P.2d 894, 911 (Haw.
1994) (stating that several jurisdictions, including Illinois, “hold
that an insurer in breach of its duty to defend is precluded from
taking the position that the judgment or settlement did not
involve a covered risk”). The courts following this so-called
“Illinois Rule” emphasize that “[a]n insurer should be subjected
to some legal consequence for breaching its duty to defend an
insured,” and that insurers ought to be incentivized to “appear on
behalf of the policyholder in the underlying lawsuit.” See K2 Inv.
Group, LLC v. American Guar. & Liab. Ins. Co., 6 N.E.3d 1117, 1121

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 Farm Bureau v. Weston

(N.Y. 2014) (Graffeo, J., dissenting). The Illinois Rule has been
adopted in about a dozen states, as set out in the margin. 41

¶107 But the Illinois Rule is not followed in most of the
jurisdictions to have considered the question. 42 The opposite

41. See Underwriters at Lloyds v. Denali Seafoods, Inc., 927 F.2d 459,
462–65 (9th Cir. 1991) (applying Washington law); St. Paul Fire
& Marine Ins. Co. v. Vigilant Ins. Co., 919 F.2d 235, 240 (4th Cir.
1990) (applying North Carolina law); Jones v. Southern Marine &
Aviation Underwriters, Inc., 888 F.2d 358, 363 (5th Cir. 1989)
(applying Mississippi law); Columbus Life Ins. Co. v. Arch Ins. Co.,
No. 3:14-cv-01659, 2016 WL 2865952, at *12 (N.D. Ind. May 27,
2016) (applying Ohio law); Sauer v. Home Indem. Co., 841 P.2d 176,
183 (Alaska 1992); Missionaries of Co. of Mary, Inc. v. Aetna Cas. &
Surety Co., 230 A.2d 21, 25–26 (Conn. 1967); Farmers Union Mutual
Ins. Co. v. Staples, 2004 MT 108, ¶ 28, 90 P.3d 381; IMO Indus. Inc.
v. Transamerica Corp., 101 A.3d 1085, 1112–13 (N.J. Super. Ct. App.
Div. 2014); Dove v. State Farm Fire & Cas. Co., 399 P.3d 400, 406
(N.M. Ct. App. 2017); Conanicut Marine Services, Inc. v. Insurance
Co. of N. Am., 511 A.2d 967, 971 (R.I. 1986); Marks v. Houston Cas.
Co., 2016 WI 53, ¶ 72, 881 N.W.2d 309.

42. Although “obtaining an exact ‘scorecard’ of the states on this
issue can be difficult because of the absence of definitive authority
in many states,” Jeffrey W. Stempel, Enhancing the Socially
Instrumental Role of Insurance: The Opportunity and Challenge
Presented by the ALI Restatement Position on Breach of the Duty to
Defend, 5 U.C. Irvine L. Rev. 587, 595 (2015) [hereinafter Stempel],
commentators agree that the majority of jurisdictions do not
follow the Illinois Rule, see id. at 595–96; see also Douglas R.
Richmond, A Liability Insurer’s Breach of the Duty to Defend and the
Controversial Forfeiture of Coverage Defenses, 47 Fla. St. U. L. Rev.
583, 596 (2020) [hereinafter Richmond]; Todd S. Weiss, A Natural
Law Approach to Remedies for the Liability Insurer’s Breach of the Duty
(continued…)

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 Farm Bureau v. Weston

position—that insurers who breach their duty to defend are not
estopped from later contesting the scope of coverage—has
actually been adopted in more than twenty states and represents
the prevailing majority rule.43 At least two different judicial
opinions, as well as various commentators, have canvassed the
various cases. See Flannery v. Allstate Ins. Co., 49 F. Supp. 2d 1223,
1227 (D. Colo. 1999); Sentinel, 875 P.2d at 911; see also 1 Allan D.

to Defend: Is Estoppel of Coverage Defenses Just?, 57 Alb. L. Rev. 145,
147 (1993) [hereinafter Weiss].

43. See Scottsdale Ins. Co. v. Byrne, 913 F.3d 221, 231 (1st Cir. 2019)
(applying Massachusetts law); Colonial Oil Indus., Inc. v.
Underwriters Subscribing to Policy Nos. TO31504670 and
TO31504671, 133 F.3d 1404, 1405 (11th Cir. 1998) (applying
Georgia law); Enserch Corp. v. Shand Morahan & Co., 952 F.2d 1485,
1493 (5th Cir. 1992) (applying Texas law); Flannery v. Allstate Ins.
Co., 49 F. Supp. 2d 1223, 1227 (D. Colo. 1999) (applying Colorado
law); Alabama Farm Bureau Mutual Cas. Ins. Co. v. Moore, 349 So. 2d
1113, 1116 (Ala. 1977); Quihuis v. State Farm Mutual Auto. Ins. Co.,
334 P.3d 719, 727–29 (Ariz. 2014); Sunseri v. Camperos Del Valle
Stables, Inc., 185 Cal. App. 3d 559, 561–62 (1986); Caldwell v. Allstate
Ins. Co., 453 So. 2d 1187, 1190 (Fla. Dist. Ct. App. 1984); Sentinel
Ins. Co. v. First Ins. Co. of Haw., 875 P.2d 894, 911 (Haw. 1994); Hirst
v. St. Paul Fire & Marine Ins. Co., 683 P.2d 440, 447 (Idaho Ct. App.
1984); Foreman v. Jongkind Bros., 625 N.E.2d 463, 469 (Ind. Ct. App.
1993); Aselco, Inc. v. Hartford Ins. Group, 21 P.3d 1011, 1020 (Kan.
Ct. App. 2001); Cincinnati Ins. Co. v. Vance, 730 S.W.2d 521, 524 (Ky.
1987); Arceneaux v. Amstar Corp., 66 So. 3d 438, 452 (La. 2011); Elliot
v. Hanover Ins. Co., 1998 ME 138, ¶ 7, 711 A.2d 1310; Alton M.
Johnson Co. v. M.A.I. Co., 463 N.W.2d 277, 279 (Minn. 1990); K2 Inv.
Group, LLC v. American Guar. & Liab. Ins. Co., 6 N.E.3d 1117, 1120
(N.Y. 2014); Sellie v. North Dakota Ins. Guar. Ass’n, 494 N.W.2d 151,
155 (N.D. 1992); Timberline Equip. Co. v. St. Paul Fire & Marine Ins.
Co., 576 P.2d 1244, 1246 (Or. 1978); American States Ins. Co. v. State
Auto. Ins. Co., 721 A.2d 56, 64 (Pa. Super. Ct. 1998).

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 Farm Bureau v. Weston

Windt, Insurance Claims & Disputes: Representation of Insurance
Companies & Insureds § 4:37 (6th ed. 2023) (stating that “[t]he vast
majority of cases have properly held that an insurer’s unjustified
refusal to defend does not estop it from later denying coverage
under its duty to indemnify” and that “[t]he insurer’s breach of
contract should not . . . be used as a method of obtaining coverage
for the insured that the insured did not purchase”).

¶108 The courts following the majority rule have emphasized
that “the duty to defend and the duty to indemnify are separate
and distinct,” and have reasoned that “if the two duties are truly
separate and distinct, then an insurer’s wrongful failure to defend
should not result in a loss of an indemnity defense.” See Flannery,
49 F. Supp. 2d at 1228 (quotation simplified); see also Sentinel, 875
P.2d at 912 (“[A] blanket application of coverage by waiver or
estoppel, based upon the failure to provide a defense, subverts
any meaningful distinction between the duty to defend and the
separate duty to indemnify and, in many cases, serves no more
than to punish the insurer for the breach of a contractual duty.”).
Indeed, these courts have been troubled by the “punitive” aspect
of the estoppel rule, finding such a concept—at least in the
absence of bad faith—out of place in the contract law context. See
Hirst v. St. Paul Fire & Marine Ins. Co., 683 P.2d 440, 447 (Idaho Ct.
App. 1984) (stating that “[w]e question the propriety of utilizing
a form of estoppel as a punitive measure against an insurer for
breach of a contractual duty to defend”). They have also
recognized that “estoppel” is conceptually not a good fit, stating
that “no estoppel is involved in any traditional sense because, in
refusing to defend a claim, an insurer makes no misrepresentation
[about coverage] on which the insured relies to its detriment.” See
Polaroid Corp. v. Travelers Indem. Co., 610 N.E.2d 912, 922 (Mass.
1993). Rather than estop the insurer from contesting coverage for
the underlying judgment or settlement, the majority of courts
allow an insurer—even one that breached its duty to defend an
insured—to litigate coverage issues in a second case.

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 Farm Bureau v. Weston

II

¶109 Utah appellate courts have never issued an opinion
expressly stating whether Utah follows the majority rule or the
Illinois Rule. But several Utah cases have, in my view, implicitly
signaled an affinity for the majority rule. The situation is far from
clear, 44 but as I explain in this section, my best reading of Utah
case law is that our Supreme Court either has followed, or would
follow if the question were squarely presented, the majority rule.

¶110 The first Utah case to discuss the issue is McCarty v. Parks,
564 P.2d 1122 (Utah 1977). In that case, Parks was employed by a
car repair business in Arizona, and obtained permission from the
business owner to use a vehicle owned by the business, after
telling the business owner that he needed to make a short trip to
a neighboring town and would be back in two or three days. Id. at
1123. After “borrowing” the vehicle, Parks proceeded to drive
from Arizona to Salt Lake City, where he remained for over two
months. Id. While in Utah he was involved in an automobile
accident. Id. A third party was injured in the accident, and sued
Parks in Utah. Id. The insurer that had issued a policy to the
Arizona business owner was notified of the suit, but refused to
provide Parks with a defense, claiming that Parks did not have
the permission of the owner to be driving the vehicle and was
therefore not covered under the policy, which covered only
individuals driving the vehicle with permission. Id. at 1124.
Because the insurer refused to defend Parks, a default judgment

44. This lack of clarity has led commentators to list Utah as falling
on both sides of the debate. Compare Stempel, supra note 42, at 596
n.30 (including Utah with the states that follow the majority rule),
with Richmond, supra note 42, at 603 n.116 (listing Utah among the
states that follow the Illinois Rule). As already noted, and as
discussed below, one federal appellate court construing Utah law
considers Utah to follow the majority rule. See Auto-Owners Ins.
Co. v. Fleming, 701 F. App’x 738, 740–41, 740 n.1 (10th Cir. 2017).

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 Farm Bureau v. Weston

was entered against Parks, which judgment specifically included
a finding that Parks “was driving [the vehicle] with permission of
its owner.” Id. at 1123. The question in McCarty was whether the
insurer was bound by that particular finding of the court in the
default judgment in the first case. Id. at 1123–24.

¶111 The Court in McCarty did not engage in the traditional
duty-to-defend analysis of comparing the plaintiff’s complaint
against the applicable policy provisions, and did not discuss
whether the plaintiff’s complaint alleged that Parks had
permission to be driving the vehicle. Id. Instead, the Court viewed
the case through res judicata principles, and proceeded to analyze
whether the insurer should be bound by the default judgment
findings in the first case. Id. Ultimately, the Court determined that
the insurer was not bound by that finding, despite the “general
rule” that “an insurer[] whose policy requires it to defend its
insured, receives notice of a suit against him and is allowed an
opportunity to defend, but refuses, is bound by the findings and
judgment therein.” Id. at 1123. The Court determined that this
“general rule” did not apply to findings not “necessary to
determination of the controversy between the immediate parties.”
Id. Because resolution of the plaintiff’s tort suit against Parks did
not require determination of whether Parks had permission to be
driving the vehicle, the insurer would not be bound by that
extraneous finding, and would be “afforded an opportunity to
raise and have determined the issue as to its own liability, so long
as doing so is not inconsistent with the findings on material issues
which were determined” in the first case between the plaintiff and
Parks. Id. In the end, after considering the issue anew, the trial
court in McCarty determined that—despite the extraneous finding
in the default judgment—Parks did not have permission to be
driving the vehicle, and was therefore not covered by the policy,
and this decision was affirmed on appeal. Id. at 1123–24.

¶112 Thus, in McCarty, an insurer was allowed to contest
coverage issues in a second case, even after refusing to defend a

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potential insured, and even after the court in the first case, in the
context of a default judgment, had made a finding (albeit an
extraneous one) that compelled coverage. See id. In the course of
reaching its decision, the McCarty Court cited approvingly to a
California case, see id. at 1123 n.3 (citing Geddes & Smith, Inc. v. St.
Paul-Mercury Indem. Co., 334 P.2d 881 (Cal. 1959)), that espouses
“majority rule” principles, see Sentinel, 875 P.2d at 910 (citing
Geddes & Smith as a majority rule case). Thus, even though the
court in McCarty did not expressly state that it was following the
majority rule, I view McCarty as quite strongly signaling affinity
for the majority rule.

¶113 Our Supreme Court again discussed these issues in Speros
v. Fricke, 2004 UT 69, 98 P.3d 28. In that case, Fricke was driving a
passenger, named Hiatt, home from a nightclub on New Year’s.
Id. ¶ 2. Hiatt was in the front passenger seat. Id. On the way home,
“Hiatt suddenly and without warning reached over and grabbed
the [vehicle’s] steering wheel,” causing the vehicle to veer into
oncoming traffic and to collide with Speros’s vehicle. Id. Fricke
was insured by Nationwide Insurance Company, and Speros was
insured by West American Insurance Company. Id. ¶¶ 2–3. West
American compensated Speros for his injuries, and demanded
reimbursement from Nationwide, asserting that the accident was
not Speros’s fault. Id. ¶ 3. Nationwide looked at the case and
determined that Fricke was not negligent, and that the
Nationwide policy covering Fricke did not cover Hiatt under the
circumstances. Id. Based on this conclusion, Nationwide refused
to reimburse West American, and West American then filed suit
against Hiatt, Fricke, and Nationwide. Id. In that suit, Nationwide
defended the claims alleged against itself and against Fricke, but
refused to defend Hiatt and, as a result, West American obtained
a default judgment against Hiatt. Id. ¶ 4.

¶114 On appeal, our Supreme Court first tackled the issue of
whether Nationwide’s policy with Fricke covered Hiatt. Id. ¶¶ 31–
40. First, the Court discussed whether there was coverage for

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Hiatt under the policy and, after a lengthy analysis, determined
that “[b]ecause Hiatt had permission to ride in Fricke’s car as a
passenger, . . . he was covered as a ‘permissive user’ under
Fricke’s policy with Nationwide for the duration of the ride” and
that “Hiatt’s actions in grabbing and turning the steering wheel
did not disqualify him from permissive user status.” Id. ¶ 40.
Next, the Court took up the issue of whether the “intentional acts”
exclusion in the policy applied to the facts of the case. Id. ¶¶ 41–
47. After a lengthy discussion that included consideration of
statutes and public policy, the Court held that “the intentional acts
exclusion is unenforceable against accident victims up to the
minimum liability limits prescribed by the statute.” Id. ¶ 44.
Accordingly, the Court determined that coverage existed under
the Nationwide policy for the actions committed by Hiatt, at least
up to the statutory minimum limits. Id. ¶ 47.

¶115 Only after concluding that coverage existed for Hiatt did
the Court then turn to whether Nationwide breached its duty to
defend Hiatt. See id. ¶¶ 48–53. Unlike in McCarty, the Court in
Speros did engage in a traditional duty-to-defend analysis, and
ultimately determined that “[t]he complaint filed by Speros and
West American imposed a duty on Nationwide to defend Hiatt,”
because that complaint alleged that Hiatt’s negligent acts caused
the accident and alleged that Hiatt was an insured person under
the Nationwide policy with Fricke. Id. ¶¶ 50–51. The Court held
that when Nationwide exposed Hiatt to the risk of a default
judgment “in breach of its duty to defend, it also exposed itself to
the risk that it could lose the ability to litigate the facts giving rise
to Hiatt’s alleged liability and that it could thereafter be held liable
for the resulting judgment.” Id. ¶ 51. “When Nationwide chose
not to defend Hiatt, it forfeited its opportunity to dispute the
underlying facts of the accident.” Id. ¶ 53.

¶116 In my view, it is notable that the Speros Court spent
nineteen paragraphs determining whether coverage existed, see
id. ¶¶ 29–47, before analyzing whether Nationwide had breached

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 Farm Bureau v. Weston

its duty to defend. If the Speros Court had intended to adopt the
Illinois Rule, there would have been no need to discuss coverage,
because the conclusion that the duty to defend had been
breached—an analysis that depends on the allegations in the
complaint, not on the actual facts—would have automatically
resulted in coverage under that estoppel-based rule. 45 Second,
when viewed in tandem with McCarty, the Court’s statement in
Speros that an insurer “forfeit[s] its opportunity to dispute the
underlying facts of the accident,” see id. ¶ 53, can only be a
reference to facts vital to the determination of negligence and
related issues, see McCarty, 564 P.2d at 1123 (stating that an insurer
is “bound by the findings and judgment” in an underlying case
that it elects not to defend, but not with regard “to matters
collateral or immaterial to the essential issues involved in the
case”); see also Speros, 2004 UT 69, ¶ 52 (citing and quoting
McCarty). The fact that the Court did not automatically apply
estoppel upon determining that a duty to defend had been
breached leads me to conclude that Speros did not apply the
Illinois Rule, and that its reference to an insurer being bound was
only meant to re-state the conclusions of McCarty. In other words,
I read Speros as concluding that a breaching insurer’s loss of “the
ability to litigate the facts giving rise to [the putative insured’s]
alleged liability” in the underlying case, see Speros, 2004 UT 69,
¶ 51, does not include the loss of the ability to litigate coverage
issues not decided in, or not necessary to the result of, the first

45. Indeed, even the majority opinion in this case attends first to
the question of whether the policy was properly cancelled, before
then turning to the question of whether Farmers Insurance
breached its duty to defend. This is a majority rule process, at root;
after all, if the consequence of Farmers Insurance’s breach of its
duty to defend is that it is estopped from contesting coverage,
then we need not have spent some ten pages exploring the
propriety of Farmers Insurance’s cancellation. See supra ¶¶ 43–60.

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 Farm Bureau v. Weston

case. I therefore interpret Speros, on balance, as a case following
the tenets of the majority rule.

¶117 The next case to discuss these issues arose only two years
after Speros, and in my view provides the clearest guidance of any
of the Utah cases. In Benjamin v. Amica Mutual Insurance Company,
2006 UT 37, 140 P.3d 1210, two female co-workers of Benjamin
asserted that Benjamin had sexually assaulted them. Id. ¶ 2.
Accordingly, they filed two separate suits against Benjamin,
stating both intentional tort claims (e.g., assault, battery,
intentional infliction of emotional distress) as well as negligent
tort claims (e.g., negligent infliction of emotional distress). Id.
Benjamin tendered defense of the suits to his insurer, Amica, who
had issued him a homeowners policy. Id. ¶ 5. Amica initially
defended Benjamin, subject to a reservation of rights, in both
cases, but later discontinued its defense in one of them after
questioning Benjamin under oath about the allegations. Id. ¶ 6.
The policy did not apply to injury “which is expected or intended
by the insured,” and Amica believed that this exclusion precluded
coverage for Benjamin for the claims asserted. Id. ¶ 17 (quotation
simplified). The “undefended” case proceeded to trial, without
Amica assisting in the defense, and the jury found Benjamin liable
only on the claim for negligent infliction of emotional distress, and
found for Benjamin on the intentional tort claims. Id. ¶ 7. After
trial in the first suit, Benjamin entered into settlement negotiations
with both plaintiffs in both suits simultaneously. Id. ¶ 8. Benjamin
notified Amica of the negotiations and asked Amica to participate,
but Amica refused. Id. Thereafter, Benjamin settled both cases and
asked Amica to indemnify him for the entire amount of the
settlements, and Amica refused. Id.

¶118 Benjamin then filed suit against Amica, accusing Amica of
breaching both the duty to defend and the duty to indemnify, and
alleging that Amica acted in bad faith. Id. ¶ 9. The trial court ruled
in favor of Benjamin and found that Amica had breached both
duties. Id. ¶ 10. Amica appealed. Id. ¶ 11. This time, unlike in

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 Farm Bureau v. Weston

Speros, the Utah Supreme Court tackled the issues in the more
logical order: it first analyzed whether Amica had breached its
duty to defend Benjamin, and then turned to whether coverage
existed. On the first point, the Court compared the allegations of
the complaint with the provisions of the policy, and determined
that the policy covered negligent torts, and that the complaint
alleged at least one such tort (negligent infliction of emotional
distress). The Court stated that “Amica had a duty to defend
Benjamin until it could establish that [the negligence] claims were
not supported by the facts,” and that “[b]ecause Amica owed a
duty to defend the negligent infliction of emotional distress
claims, Amica owed a duty to defend all of the claims.” Id. ¶¶ 22,
25; see id. ¶ 25 (“When there are covered and non-covered claims
in the same lawsuit, the insurer is obligated to provide a defense
to the entire suit, at least until it can limit the suit to those claims
outside of the policy coverage” (quotation simplified)).

¶119 After determining that Amica had breached its duty to
defend Benjamin, the Court then turned to the question of
whether Amica had breached its duty to indemnify. See id. ¶¶ 27–
30. It is worth noting, here, that if the Illinois Rule were in effect,
or if the Utah Supreme Court intended to adopt or apply that rule,
there would be no need to engage in any analysis with regard to
whether Amica breached the duty to indemnify because, under
the estoppel rule, once it was determined that Amica had
breached its duty to defend, Amica would be estopped from
contesting coverage. But this is not what the Court did. The Court
examined the language of the applicable policy in an effort to
determine whether coverage existed for the claims Amica had
refused to defend. Id. In the end, the Court determined that “the
duty to indemnify is tied to the existence of covered claims,” and
“for the same reasons that Amica was obligated to defend against
the claims for negligent infliction of emotional distress, it was also
obligated to pay for the covered damages arising from those
claims for which Benjamin was legally liable,” id. ¶ 28 (quotation
simplified), an amount the Court determined to be the “amount

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 Farm Bureau v. Weston

[Benjamin] paid to settle the negligent infliction of emotional
distress claims,” id. ¶ 30 (quotation simplified).

¶120 The Court also determined that Amica was not allowed to
second-guess Benjamin’s decision to settle with the plaintiffs or
the overall settlement amount, given that Amica had been offered
the opportunity to “participate in and control” those settlement
talks and had refused. Id. ¶ 29. However, the Court recognized
that the settlement amount may well have included payments for
both covered (negligent) and uncovered (intentional) claims, but
noted that it did not have sufficient information before it to
“determine what amount, if any, Benjamin paid to settle” the
negligence claims, and “instruct[ed] the district court to hold a
factual hearing to determine that amount.” Id. ¶ 30. In my view,
this procedure is emphatically a “majority rule” procedure, and
not an “Illinois Rule” procedure.

¶121 And that brings me to Summerhaze Co. v. Federal Deposit
Insurance Corp., 2014 UT 28, 332 P.3d 908, the case principally
relied upon by the majority opinion in this case. See supra ¶¶ 73–
75 & 74 n.30. 46 In Summerhaze, an employee of a bank embezzled

46. The majority relies heavily on its application of a statement
from Summerhaze: “‘[A]n insurer may challenge its liability for the
judgment, contest the amount of damages, or set forth any other
available defense that the insured neglected to make’ only if the
insurer was not put on notice of the lawsuit.” See supra ¶ 74
(emphasis omitted) (quoting Summerhaze Co. v. FDIC, 2014 UT 28,
¶ 37, 332 P.3d 908). In my view, the majority overreads
Summerhaze. The quotation from Summerhaze states simply that an
insurer who does not receive a tender of defense from an insured
“may challenge its liability for the judgment, contest the amount
of damages, or set forth any other available defense that the
insured neglected to make.” See Summerhaze, 2018 UT 28, ¶ 37.
Indeed, the majority acknowledges that Summerhaze was not
(continued…)

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 Farm Bureau v. Weston

funds from the bank, and various creditors and affiliates of the
bank filed suit against the bank alleging that it had improperly
accepted unauthorized signatures and that it had acted
negligently. Id. ¶ 2. The bank tendered the defense of the claim to
its insurer, BancInsure. Id. ¶ 3. The bank also filed a declaratory
judgment action against BancInsure seeking to establish that
coverage existed for the claims brought by the plaintiffs, but that
action was placed on a stipulated hold pending the outcome of
the first suit brought by the plaintiffs. Id. ¶ 4.

¶122 Just a few months later, however, the bank was shut down
by regulators, and the Federal Deposit Insurance Corporation (the
FDIC) was appointed as the bank’s receiver. Id. ¶ 5. All of the
bank’s creditors, including the plaintiffs, received notice of the
receivership and were instructed that any claims against the bank
needed to be submitted by proof of claim to the FDIC by a certain
date pursuant to federal law. Id. The plaintiffs, apparently

presented with the question of whether an insurer would have
any such rights if it had received notice of the lawsuit. See supra
note 30. But in the majority’s view, “it naturally follows that if an
insurer who did not receive notice may do so, then an insurer who
did receive notice may not.” Id. In my view, however, no such
thing “naturally follows”; indeed, the majority of courts to have
taken up the question as to whether any such thing “naturally
follows” have concluded that it does not. And Summerhaze did not
purport to be taking up the relevant question. See Auto-Owners
Ins. Co. v. Fleming, 701 F. App’x 738, 741 & n.1 (10th Cir. 2017)
(referring to Summerhaze’s discussion of these issues as “dicta”
that “was not necessary to the ultimate resolution of the case”).
Neither this paragraph of Summerhaze nor any other ever states or
holds that an insurer who breaches its duty to defend is foreclosed
from raising coverage defenses in a second case, and Summerhaze
certainly does not expressly adopt the Illinois Rule. For the
reasons discussed, in my view the majority is reading far too
much into Summerhaze.

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 Farm Bureau v. Weston

believing that their pending lawsuit sufficed as “notice,” did not
file a proof of claim with the FDIC within the time prescribed. Id.
¶ 6. The FDIC then filed a motion to dismiss the plaintiffs’ lawsuit
on the ground that the state district court lacked subject matter
jurisdiction over the case due to the plaintiffs’ failure to timely
send a proof of claim pursuant to federal law. Id. ¶ 7. The trial
court granted the FDIC’s motion, and the plaintiffs appealed. Id.

¶123 At issue on appeal, among other things, was whether the
bank’s tender of defense of the lawsuit to BancInsure had
deprived the FDIC of authority to resolve the claims, thus
excusing the plaintiffs from any obligation they might otherwise
have had to file a timely proof of claim. Id. ¶ 35. The Utah Supreme
Court noted that the bank had tendered the defense of the claim
to BancInsure, but held that

[t]he tender of defense did not affect the rights of the
[b]ank or the FDIC, nor did it change the real party
in interest. The tender of defense merely triggered
the duty of defense under the Bond. The [b]ank and
the FDIC were still actively involved in the defense
of the claims. Therefore, the [b]ank and the FDIC
retained authority to resolve the claims.

Id. ¶ 39. Accordingly, the Court ruled that the bank’s tender of
defense did not excuse the plaintiffs’ failure to comply with the
federal proof-of-claim requirement. Id.

¶124 Nothing in the Summerhaze Court’s discussion of this topic
has, in substance, anything to do with whether the Illinois Rule or
the majority rule applies in Utah. However, in discussing the
bank’s tender of defense of the claims to BancInsure, the Court
included some citations to certain Seventh Circuit cases that apply
the Illinois Rule. See id. ¶¶ 36, 38 & nn.82, 91 (citing Solo Cup Co.
v. Federal Ins. Co., 619 F.2d 1178, 1183 (7th Cir. 1980)). One
quotation in particular, at least at first glance, might seem to
indicate allegiance to the Illinois Rule: “An insurer ‘that refuses a

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tender of defense by its insured takes the risk not only that it may
eventually be forced to pay the insured’s legal expenses but also
that it may end up having to pay for a loss that it did not insure
against.’” Id. ¶ 38 & n.92 (quoting Hamlin Inc. v. Hartford Accident
& Indem. Co., 86 F.3d 93, 94 (7th Cir. 1996)). In my view, however,
the best reading of Summerhaze is that it does not indicate
adoption of the Illinois Rule. This is so for several reasons.

¶125 First, the Hamlin case quoted in Summerhaze is a case out of
Wisconsin, not out of Illinois, and in that case Judge Posner,
writing for the Seventh Circuit, articulated his view that
Wisconsin, at least conceptually and at least at the time, followed
the majority rule, not the Illinois Rule. See Hamlin, 86 F.3d at 94–
95 (citing Wisconsin law to the effect that “the insured must show
that he was made worse off by the breach [of the duty to defend]
than he would have been had the breach not occurred,” noting
that this rule was “the majority view,” and that this rule was
“inconsistent with a rule of always forbidding the insurer that has
wrongfully refused to defend the insured’s case to deny
coverage”). 47 Second, the discussion in Summerhaze is by no means
one-sided; at one point the Court stated that “an insurer’s duty to
defend [is] broader than its duty to indemnify,” and “the duty to
indemnify is determined by the underlying facts of the case, while
the duty to defend is controlled by the allegations in the complaint
against the insured.” 2014 UT 28, ¶ 36 (quotation simplified).
Third, the Summerhaze Court did not even cite, let alone discuss,
our Supreme Court’s decisions in McCarty, Speros, and Benjamin.
If the Court had intended to announce that it was adopting the
Illinois Rule, it would have needed to distinguish, if not outright

47. A Wisconsin case decided since Hamlin sheds some doubt on
Judge Posner’s interpretation of Wisconsin law. See Radke v.
Fireman’s Fund Ins. Co., 577 N.W.2d 366, 369–70 (Wis. Ct. App.
1998), overruled on other grounds by Marks, 2016 WI 53. And in any
event, it is now clear that Wisconsin follows the Illinois Rule. See
Marks, 2016 WI 53, ¶ 72.

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overrule, that precedent, and it did not do so. Fourth and finally,
whether the “estoppel rule” applies in Utah to an insurer that
breached its duty to defend was not at all relevant to the issue
presented in Summerhaze. Thus, even to the extent that
Summerhaze’s citations to Seventh Circuit cases could be
construed as tacit endorsement of the Illinois Rule, such an
endorsement would necessarily be dicta.

¶126 Indeed, the United States Court of Appeals for the Tenth
Circuit agrees with my reading of Summerhaze. See Auto-Owners
Ins. Co. v. Fleming, 701 F. App’x 738 (10th Cir. 2017). In that case,
the Tenth Circuit was required to analyze Utah case law—just as
we are here—and to determine whether, under Utah law, insurers
who breached their duty to defend were thereby estopped from
raising coverage defenses. See id. at 740. The court examined the
same Utah cases I examine here, and concluded that the
discussion, in Summerhaze, regarding “estoppel and an insurer’s
duty to defend . . . was only intended to provide context to the
jurisdictional analysis and was not necessary to the ultimate
resolution of the case,” and opined that “[s]uch dicta should not
be taken to overrule the express holdings of McCarty and Speros,
which were not cited” in Summerhaze. Id. at 741 & n.1. Applying
this interpretation of Utah law, the court affirmed a federal district
court’s similar ruling and held that the insurance companies were
not “estopped from challenging coverage” merely because they
had breached their duty to defend an insured. Id. at 741.

¶127 In the end, after examination of all of this Utah case law, I
think we find ourselves in a position similar to the position in
which the Kansas Court of Appeals found itself in Aselco, Inc. v.
Hartford Insurance Group, 21 P.3d 1011 (Kan. Ct. App. 2001). There,
the court was faced with the decision whether to adopt the Illinois
Rule, and canvassed Kansas law on the topic in an effort to
determine whether the Kansas Supreme Court followed the
majority rule. Id. at 1019–21. It noted that a Kansas federal court
had already examined the issue, and had stated that

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Kansas courts have addressed situations in which
[the Illinois Rule] could have been applied if the
courts were so inclined but have not done so. In
Spruill Motors, Inc. v. Universal Underwriters Ins. Co.,
512 P.2d 403 (Kan. 1973), the insurer breached its
duty to defend the insured but the Kansas Supreme
Court dealt with the merits of the insurer’s policy
defenses anyway. A similar situation was present in
Snodgrass v. State Farm Mutual Auto. Ins., 804 P.2d
1012 (Kan. 1991), in which a jury determined that
State Farm had breached its duty to defend but on
appeal, the appellate court considered State Farm’s
policy defenses concerning coverage. In either of
these cases, had they chosen to do so, the court
could have estopped the insurer from asserting its
policy defenses after finding that it breached it[s]
duty to defend.

See id. at 1020 (quoting Johnson v. Studyvin, 828 F. Supp. 877, 886–
87 (D. Kan. 1993)) (quotation simplified). The court also noted
another Kansas Supreme Court case in which the court, “[d]espite
the insurer’s earlier refusal to provide a defense,” nevertheless
“considered the insurer’s policy arguments and held that
coverage was excluded.” See id. (referring to Patrons Mutual Ins.
Ass’n v. Harmon, 732 P.2d 741 (Kan. 1987)). In the end, the court
felt that the Kansas Supreme Court’s “actions . . . speak louder
than its words,” and determined that “[b]ecause Kansas courts
have been presented with situations in which they could have
estopped insurers who have breached their duties to defend from
denying coverage and have not done so, this court will not find
that Kansas courts would so hold.” Id. (quoting Johnson, 828 F.
Supp. at 887); see also id. (“[W]e believe the cases decided to this
point mean our Kansas Supreme Court would not adopt a bright
line rule that insurers who fail to provide a defense and reserve
their rights are inevitably equitably estopped from raising their
coverage defenses.”).

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¶128 So too here. Although the Utah Supreme Court has never
expressly stated that it has adopted the majority rule (as opposed
to the Illinois Rule), its actions “speak louder than its words.” Id.
In McCarty, Speros, and (especially) Benjamin, the Utah Supreme
Court has allowed insurers who refused to defend their insureds
to later raise coverage defenses. This was allowed in Speros and
Benjamin despite express determinations in both of those cases
that the insurer had indeed breached its duty to defend the
insured. Because the Utah Supreme Court has, three times, been
“presented with situations in which it could have estopped
insurers who have breached their duties to defend from denying
coverage and [has] not done so,” I cannot—in the absence of
something more clearly so indicating—conclude “that the [Utah
Supreme Court] would so hold.” 48 Cf. id.

48. The propriety of adopting the Illinois Rule (over the majority
rule) is one that turns on, among other things, one’s sense of
policy and related factors. Commentators have provided cogent
arguments on both sides of the question. Compare Richmond,
supra note 42, at 614, and Weiss, supra note 42, at 149, with Stanley
C. Nardoni, Estoppel for Insurers Who Breach Their Duty to Defend:
Answering the Critics, 50 J. Marshall L. Rev. 53 (2016), and Stempel,
supra note 42, at 614–15. Even the authors of the Restatement of
Liability Insurance have gone back and forth on the question. In
2014, the drafters decided to align the Restatement with the
Illinois Rule, see Restatement of Liab. Ins. § 21 (Am. L. Inst.,
Tentative Draft No. 2, 2014), taking the position that an insurer
that breaches the duty to defend loses “the right to contest
coverage for the claim.” See id. § 19(1) (Am. L. Inst., Discussion
Draft, 2015). In a subsequent draft, however, the drafters sought a
middle ground and suggested an estoppel rule that would apply
only to an insurer who breaches “the duty to defend without a
reasonable basis for its conduct.” See id. § 19(2) (Am. L. Inst.,
Tentative Draft No. 1, 2016). But in 2019, the drafters rejected the
(continued…)

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 Farm Bureau v. Weston

¶129 Thus, my best reading of Utah Supreme Court precedent—
a reading aligned with the Tenth Circuit’s—leads me to conclude
that Utah does not follow the Illinois Rule, and that under the
prevailing majority rule, Farmers Insurance would not be
estopped, merely by virtue of its breach of its duty to defend
Jared, from raising coverage defenses later.

III

¶130 The fact that an insurer that breaches its duty to defend
remains free to raise coverage defenses later does not necessarily
mean that the insurer gets off scot-free from its breach of duty. In
most cases, there remain consequences for an insurer that
breaches its duty to defend, even if those consequences do not
include complete estoppel of coverage defenses.

¶131 First of all, as McCarty and Speros clearly indicate, an
insurer may not contest the amount of any judgment rendered

Illinois Rule altogether and adopted the majority rule. See id. § 19
(Am. L. Inst. 2019) (adopting “the prevailing legal rule” that an
“insurer that breaches the duty to defend” may still contest
coverage but also “forfeits the right to assert any control over the
defense or settlement of the action”); see also Richmond, supra note
42, at 591–92 (noting that, in 2019, the Restatement drafters
“ultimately rejected the forfeiture-of-coverage-defenses rule . . . in
favor of the majority rule, meaning that an insurer that mistakenly
breaches the duty to defend retains the right to contest coverage”).
Were we operating on a blank slate in Utah, I may have something
to say in this context about which rule I think is the better one. But
as set forth in this section, I do not think we are operating on a
blank slate, and I view the Utah Supreme Court as having
implicitly signaled its affinity for the majority rule. At any rate,
this case may present a good opportunity for the Utah Supreme
Court to clarify its intentions and, in that setting, perhaps examine
which rule is the better one from a policy standpoint.

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against an insured in a lawsuit it refused to defend, nor may it
contest any findings or conclusions rendered by the trial court in
the undefended case that are necessary to the result there reached.
See Speros, 2004 UT 69, ¶¶ 51, 53 (clarifying that, when an insurer
breaches its duty to defend, it “expose[s] itself to the risk that it
could lose the ability to litigate the facts giving rise to [the
insured’s] alleged liability,” and stating that “[w]hen [an insurer]
chose not to defend [a putative insured], it forfeited its
opportunity to dispute the underlying facts of the accident”);
McCarty, 564 P.2d at 1123 (noting the “general rule” that an
insurer that breaches its duty to defend “is bound by the findings
and judgment” in the underlying case, but that this general rule
does not apply to findings and conclusions not “necessary to
determination of the controversy between the immediate
parties”). And in my view, the inability of an insurer to contest
the amount of the underlying judgment or conclusions necessary
to it was exactly what the Summerhaze Court was referring to
when it warned that “an insurer that refuses a tender of defense
by its insured takes the risk not only that it may eventually be
forced to pay the insured’s legal expenses but also that it may end
up having to pay for a loss that it did not insure against.” See
Summerhaze, 2014 UT 28, ¶ 38 (quotation simplified). As applied
here, Farmers Insurance is prohibited from contesting the amount
of the judgment Farm Bureau obtained against Jared, as well as
any findings or conclusions that were necessary to the court’s
judgment in that case. But under the majority rule, it is barred
from raising coverage defenses only to the extent that those
defenses are impaired by one or more of the findings or
conclusions that were necessary to the underlying judgment. And
that is not the case here. The court in the underlying tort suit had
no occasion to weigh in on whether the policy had been properly
cancelled due to Joelyn’s failure to pay premiums.

¶132 Second, an insurer that breaches its duty to defend is
subject to paying any damages that are the result of that specific
breach. See Signature Dev. Cos. v. Royal Ins. Co. of Am., 230 F.3d

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1215, 1222 (10th Cir. 2000) (applying Colorado law and stating
that “when an insurer breaches its duty to defend, the insured is
entitled to receive compensation for any prejudice the insured
may have suffered as a result of the breach”). Often, any attorney
fees incurred in the undefended lawsuit are recoverable as
compensation for breach of the duty to defend. See, e.g., Polaroid
Corp. v. Travelers Indem. Co., 610 N.E.2d 912, 921 (Mass. 1993)
(“Certainly the insurers are liable in contract to [the insured] for
its defense costs (up to the time that it was determined that the
[plaintiff’s] claims were not covered by the various policies).”).
Beyond that rather obvious component of damages, insureds may
recover other types of damages as well. See id. at 922 (stating that
“an insurer should be liable for the natural consequences of a
breach of contract that places its insured in a worse position”). It
is theoretically possible, for instance, that in certain cases “an
obligation to pay settlement costs could result from a breach of
the duty to defend.” Id. Or, “if an insured lacks financial resources
sufficient to maintain a proper defense, an insured’s losses in the
underlying claim could well be the result of a breach of the duty
to defend.” Id. Ordinarily, an insured’s attorney fees incurred in
the second case—the coverage case—are not causally linked to the
breach of the duty to defend, because those same fees would have
been incurred in a declaratory judgment action filed at the outset
even if the insurer had acted appropriately and filed one.
However, in some cases, it may be possible for an insured to
demonstrate that attorney fees incurred in the second case—the
coverage case—are causally linked to the insurer’s breach of the
duty to defend. See, e.g., Enserch Corp. v. Shand Morahan & Co., 952
F.2d 1485, 1495 & n.15 (5th Cir. 1992) (applying Texas law and
determining that “the findings for which we remand this case
would have been made had the insurers fulfilled their duties to
defend” the insured and, as a result, the insurer would be
obligated to pay the insured “its reasonable costs and attorney
fees for defending its side of the allocation determination on
remand”). Furthermore, an insurer that breaches a duty to defend
may also be subject to consequential “damages for injury to

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reputation or credit rating, [or] damages for emotional distress.”
See Campbell v. State Farm Mutual Auto. Ins. Co., 840 P.2d 130, 139
(Utah Ct. App. 1992), cert. denied, 853 P.2d 897 (Utah 1992). But
such damages inquiries are to be viewed not through the lens of
estoppel but, rather, through the lens of “normal contract
damages principles.” See Polaroid, 610 N.E.2d at 921; see also id. at
921–22 (“Even when an insurer’s conduct is unfair or deceptive
. . . , the insured must prove that the insurer’s conduct was the
cause of any loss it sustained.”).

¶133 In this case, the trial court determined that Jared had not
borne his burden of demonstrating that he had sustained
damages that were directly linked to Farmers Insurance’s breach
of its duty to defend. As the majority correctly notes, supra ¶ 28,
“we review for an abuse of discretion the trial court’s
determination that [a party] failed to introduce sufficient evidence
to establish damages, and we will not overturn the trial court’s
decision unless there was no reasonable basis for [that] decision,”
Macris v. Sevea Int’l, Inc., 2013 UT App 176, ¶ 26, 307 P.3d 625
(quotation simplified). On the record before us, I perceive no
abuse of discretion in the court’s damages ruling, and I would
affirm it on that basis.

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