Brodkin v. Tuhaye Golf, LLC

2015 UT App 165

THE UTAH COURT OF APPEALS

TERRY B. BRODKIN,
Plaintiff and Appellant,
v.
TUHAYE GOLF, LLC; AMEAGLE PC HOLDINGS, INC.; PARK PREMIER
MINING CO.; ROBERT W. DUNLAP; AND KATHY DUNLAP,
Defendants and Appellees.

Opinion
No. 20130548-CA
Filed June 25, 2015

Fourth District Court, Heber Department
The Honorable Derek P. Pullan
No. 070500421

Steve K. Gordon and Jarom B. Bangerter, Attorneys
for Appellant
Stephen J. Hill, Attorney for Appellees Park Premier
Mining Co., Robert W. Dunlap, and Kathy Dunlap
Clark K. Taylor and Nicole M. Deforge, Attorneys for
Appellees Tuhaye Golf, LLC and Ameagle PC
Holdings, Inc.

JUDGE J. FREDERIC VOROS JR. authored this Opinion, in which
JUDGES JAMES Z. DAVIS and JOHN A. PEARCE concurred.

VOROS, Judge:

¶1 Terry B. Brodkin appeals from the district court’s grant of
summary judgment in favor of Tuhaye Golf LLC; Ameagle PC
Holdings Inc.; Park Premier Mining Co.; and Robert and Kathy
Dunlap (Defendants). The district court ruled as a matter of law
that Brodkin was not an intended third-party beneficiary of a
contract that did not mention him or purport to bestow any
benefit on him. We affirm.
 Brodkin v. Tuhaye Golf, LLC

BACKGROUND

¶2 This case concerns approximately fifty-two acres of real
property overlooking Jordanelle Reservoir in Wasatch County.
Brodkin now owns the property, but for some seventy-five years
Progress Corporation owned the property, which the parties, the
district court, and now we refer to as the Progress Parcel.

¶3 In the early 1990s, the federal government condemned
most of the land down-slope from the Progress Parcel to create
Jordanelle Reservoir. The completed reservoir inundated the
Progress Parcel’s only road access. The United States
government compensated Progress Corporation, and Progress
‚release*d+ and relinquish*ed+ to the United States any and all
easements or rights of way or access to [the Progress Parcel] . . .
taken by reason of the acquisition of land by the United States
for the construction, maintenance, and operation of the
Jordanelle Dam and Reservoir project.‛ The Progress Parcel thus
became landlocked, surrounded by property owned by
Defendants and their predecessors-in-interest in a development
known as Area B.

¶4 In the late 1990s, defendant Robert Dunlap, who owned
property within Area B, attempted to contact other Area B
property owners to coordinate a development plan for the area.
Dunlap successfully identified all the owners except Progress
Corporation. In 1999, Dunlap and the other Area B owners
(except Progress Corporation) formed EastSide Group LLC and
executed an operating agreement. The Operating Agreement
defines the ‚Members‛ of EastSide as the Operating
Agreement’s original signatories and ‚such other persons or
entities as shall from time to time join in the execution hereof.‛
Progress Corporation never executed the Operating Agreement.

¶5 The Operating Agreement specifies that EastSide’s
purpose, among other things, is, ‚*t+o engage in real estate
development activities, including, but not limited to, planning,
developing, installing and owning the infrastructure (such as

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water, sewer and roads) to serve real property in the Jordanelle
Basin.‛ The Operating Agreement expressly disclaims any third-
party rights or benefits:

None of the provisions of this Agreement shall be
construed as conferring, or allowing, any rights or
benefits upon or to any third party (including, but
not limited to, the holder of any obligation secured
by any real or personal property of [EastSide] or
any portion thereof or interest therein, or any other
creditor of [EastSide] or of any Member).

The Operating Agreement also requires each Member to
‚irrevocably covenant*+ to grant utility and road easements
across their property in Area B to [EastSide], and solely for the
benefit of its Members, at no cost,‛ for the development of
Area B. Finally, the Operating Agreement requires each Member
‚to execute a separate written agreement containing this
covenant‛ and to record that separate writing to ‚give notice
that the Members’ property in Area B shall be subject to such
easements in the future.‛

¶6 In 2001, certain Area B property owners executed another
agreement (the Area B Agreement). The Area B Agreement
defines ‚Area B Landowners‛ as: Intell Utah LLC; the United
States Bureau of Land Management (BLM); Exchange Lands
Management Company LLC; Debra Taylor Miller, Lisa Taylor-
Anani, Christian Tuft, Tamara Hokanson, and Jody K. Tuft
(collectively, Taylor/Tuft); Robert and Kathy Dunlap (the
Dunlaps); and Park Premier Mining Co. Each signed the Area B
Agreement. The Area B Agreement did not name Progress
Corporation as an Area B Landowner, nor did Progress sign the
Area B Agreement. Indeed, the signatories were unaware that
Progress Corporation owned property within Area B.

¶7 The Area B Landowners owned separate parcels within
Area B. In one provision of the Area B Agreement, the parties
grant each other reciprocal access easements:

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The parties to this Agreement hereby agree to
grant to each other reciprocal, permanent, non-
exclusive ingress and egress easements . . . .

As stated herein, the parties to this Agreement
have agreed to grant necessary easements to
provide access to, from and between the parcels
owned by the Area B Landowners . . . .

The Area B Agreement includes a map attached as Exhibit A,
showing generally each signatory’s parcel. The map does not
identify the Progress Parcel or otherwise reflect that Progress
Corporation owned any property within Area B. The Progress
Parcel lies within a parcel the map identifies as owned by
Taylor/Tuft.

¶8 The Area B Agreement also includes a provision for
attorney fees. The provision states, ‚Except as otherwise
provided herein, any party to [the Area B Agreement] may
enforce this Agreement by legal action and if that party prevails,
it shall recover costs and reasonable attorney’s fees.‛

¶9 Before Brodkin offered to buy the Progress Parcel, he
obtained a title report. The title report noted that the Progress
Parcel may lack road access. The seller also informed Brodkin
that if he wanted ‚egress *and+ ingress, you’re going to have to
work it out.‛ Before Brodkin purchased the Progress Parcel he
approached Taylor/Tuft in an effort to acquire access to the
Progress Parcel. Taylor/Tuft never executed any agreement
granting Brodkin the access he sought. Brodkin then reviewed
the Operating Agreement, the Area B Agreement (including the
Exhibit A map), and the Wasatch County Master Plan for Area B.
Based on his review, Brodkin concluded that the Progress Parcel
had road access. In April 2004 he bought the Progress Parcel for
approximately $290,000.

¶10 Sometime after the Area B Landowners executed the Area
B Agreement, Tuhaye Golf LLC acquired the Intell and

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Taylor/Tuft parcels. Tuhaye thereafter executed an agreement
with some of the remaining Area B Landowners (the 2004
Agreement). In the 2004 Agreement, ‚*t+he parties acknowledge
and agree that the [Area B Agreement] was intended to grant
and provide reciprocal easements over properties owned
by . . . Tuhaye[] and other parties to the [Area B Agreement].‛
Therefore, the parties to the 2004 Agreement ‚clarify, confirm,
and grant the easements . . . referred to and provided and to
provide for and implement the other terms and conditions
hereof and of the [Area B Agreement+.‛ Brodkin, by then the
owner of the Progress Parcel, was not a party to the 2004
Agreement.

¶11 In the next few years, Brodkin received at least two offers
to purchase the Progress Parcel, each at a price exceeding ten-
fold what he paid for it. In 2006, Brodkin received an offer from
Optimum Investments LLC to purchase the Progress Parcel for
$5 million (the Optimum Offer). Brodkin asserts that the
Optimum Offer failed because it was orally conditioned on
Brodkin’s acquiring access to the Progress Parcel from the
surrounding landowners. However, no express condition to this
effect appears in the written Optimum Offer.

¶12 In April 2007, Brodkin received an offer from Tracy Roth
for $5.5 million. The Roth offer was ‚not contingent on any
resolution of easement issues.‛ In a letter from Roth to Brodkin
summarizing his offer, Roth acknowledged and accepted the
Progress Parcel’s access issues:

From what I have been told, the easement issue has
been a thorn in the side of the sale of this property.
We are comfortable removing any ingress/egress
issues for two simple reasons. First, our intentions
are to land-bank this property. Second, if we felt
the need to sell in the immediate future, the only
party we would consider would be Talisker.
Therefore, the easement issues to us are not
important enough to delay purchase of this

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property. Yes, we would like to see them resolved
eventually so we can keep our options open;
however, we are comfortable extending an offer
excluding the resolution of those issues.

Though Brodkin accepted Tracy Roth’s offer, the sale never
closed. Brodkin eventually ‚let him walk‛ based on lack of
access because‚*i+t wouldn’t be otherwise fair or just.‛

¶13 Shortly after the Roth sale fell through, Brodkin sued
Defendants. In his complaint, Brodkin alleged four claims for
relief: (1) a declaratory judgment that he is a third-party
beneficiary to the Area B Agreement; (2) breach of contract, i.e.,
breach of the Area B Agreement; (3) easement by necessity; and
(4) condemnation. Defendants answered and moved for a
judgment on the pleadings on all claims. The district court
denied Defendants’ motion with respect to Brodkin’s first and
second claims, but granted the motion with respect to Brodkin’s
third and fourth claims.1

¶14 Defendants later moved for summary judgment on the
declaratory relief and breach of contract claims. The district
court granted Defendants’ motion. The district court ruled, in
relevant part, that the Area B Agreement did not clearly and
intentionally confer any third-party benefits on Brodkin. The
district court then ruled, in the alternative, that even if Brodkin
or Progress Corporation were intended third-party beneficiaries
to the Area B Agreement, no record evidence established that
Defendants caused Brodkin’s claimed damages, and that, in any
event, Brodkin failed to mitigate his damages. Finally, the
district court awarded Defendants costs and attorney fees.
Brodkin appeals the summary judgment and the fee award.

1. Brodkin does not appeal the district court’s dismissal of his
third and fourth claims.

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ISSUES ON APPEAL

¶15 Brodkin asserts four claims of error on appeal. He
contends that the district court erred in (1) ruling that the Area B
Agreement is unambiguous, (2) ruling that he is not a third-
party beneficiary to the Area B Agreement, (3) ruling that he
failed to prove damages for his breach of contract claim, and (4)
awarding Defendants their costs and attorney fees.

ANALYSIS

I. Summary Judgment

¶16 Summary judgment is appropriate when ‚there is no
genuine issue as to any material fact and . . . the moving party is
entitled to a judgment as a matter of law.‛ Utah R. Civ. P. 56(c).
We review the district court’s ‚legal conclusions and ultimate
grant or denial of summary judgment for correctness and view[]
the facts and all reasonable inferences drawn therefrom in the
light most favorable to the nonmoving party.‛ Orvis v. Johnson,
2008 UT 2, ¶ 6, 177 P.3d 600 (citations and internal quotation
marks omitted).

A. The Area B Agreement Is Unambiguous.

¶17 Brodkin first contends that the district court erred in
ruling on summary judgment that the Area B Agreement is
unambiguous. Utah caselaw establishes the following rules for
the use of extrinsic evidence in reviewing contractual
ambiguities.

¶18 First, if a contract contains no ambiguity,2 the court will
not consider extrinsic evidence and will enforce the contract
according to its terms. See Giusti v. Sterling Wentworth Corp., 2009

2. For example, ‚A shall pay to B $100.‛

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UT 2, ¶ 44, 201 P.3d 966 (‚Under basic rules of contract
interpretation, courts first look to the writing alone to determine
its meaning and the intent of the contracting parties.‛) holding
modified by Central Utah Water Conservancy Dist. v. King, 2013 UT
13, 297 P.3d 619; id. (‚If the language within the four corners of
the contract is unambiguous, the parties’ intentions are
determined from the plain meaning of the contractual language,
and the contract may be interpreted as a matter of law.‛ (citation
and internal quotation marks omitted)).

¶19 Second, if the contract contains a facial ambiguity,3 the
court will consider extrinsic evidence to resolve the ambiguity.
See id. (‚Only where there is ambiguity in the terms of the
contract may the parties’ intent be ascertained from extrinsic
evidence.‛ (citation and internal quotation marks omitted)); id.
(‚A contractual term or provision is ambiguous if it is capable of
more than one reasonable interpretation because of uncertain
meanings of terms, missing terms, or other facial deficiencies.‛
(citation and internal quotation marks omitted)).

¶20 Third, if a party contends that an apparently
unambiguous contract contains a latent ambiguity,4 the court
will consider extrinsic evidence to determine whether the
contract contains a latent ambiguity. See Watkins v. Henry Day
Ford, 2013 UT 31, ¶ 28, 304 P.3d 841 (‚Utah’s rules of contract
interpretation allow courts to consider any relevant evidence to
determine whether a latent ambiguity exists in contract terms
that otherwise appear to be *facially+ unambiguous.‛ (alteration
in original) (emphasis, citation, and internal quotation marks
omitted)); id. (‚While a ‘[facial] ambiguity arises solely from the
terms of the instrument, . . . a latent ambiguity is one not

3. For example, ‚A shall pay to B the usual fee.‛

4. For example, ‚A shall pay to B $100,‛ and A contends ‚$100‛
meant 100 Canadian dollars but B contends ‚$100‛ meant 100
American dollars.

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appearing upon the face of the instrument, but is developed by
extrinsic evidence.’‛ (alteration and omission in original)
(quoting Conlam v. Doull, 9 P. 568, 569 (Utah Terr. 1886)).

¶21 However, extrinsic evidence cannot be used to create an
ambiguity not reasonably supported by the text of the contract.
Daines v. Vincent, 2008 UT 51, ¶ 27, 190 P.3d 1269 (‚*A+ finding of
ambiguity after a review of relevant, extrinsic evidence is
appropriate only when reasonably supported by the language of
the contract.‛ (citation and internal quotation marks omitted)).

¶22 Fourth, if the court concludes that the contract contains a
latent ambiguity, the court will consider extrinsic evidence to
resolve the ambiguity. Fox Film Corp. v. Ogden Theatre Co., 17
P.2d 294, 296 (Utah 1932) (‚[E]xtrinsic evidence, parol or
otherwise, is admissible to explain a latent ambiguity in a
writing.‛).

¶23 Here, Brodkin contends that the district court erred in
granting summary judgment because ‚as a matter of law, the
Area B Agreement was, and is, facially ambiguous.‛ Specifically,
he argues that ‚ample evidence‛ supported his contention that
parties to the Area B Agreement intended the Progress Parcel to
benefit from its creation of reciprocal easements.

¶24 We see no facial ambiguity in the Area B Agreement. The
Area B Agreement clearly states that the parties agree to grant
‚to each other‛ reciprocal easements:

The parties to this Agreement hereby agree to grant to
each other reciprocal, permanent, non-exclusive
ingress and egress easements . . . .

As stated herein, the parties to this Agreement have
agreed to grant necessary easements to provide
access to, from, and between the parcels owned by
the Area B Landowners . . . .

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(Emphasis added.) Furthermore, the agreement defines ‚Area B
Landowners‛ as: Intell Utah LLC; BLM; Exchange Lands
Management Company LLC; Taylor/Tuft; the Dunlaps; and Park
Premier Mining Co. Thus, by its plain terms, this provision
applies only to the parties to the Area B Agreement, who
granted easements only to each other. Neither Brodkin nor
Progress Corporation was a party to the Area B Agreement or an
Area B Landowner as defined in the agreement. Accordingly, by
its own terms, the Area B Agreement grants Brodkin nothing.
Because the agreement contains no facial ambiguity, the district
court properly enforced it according to its terms.

¶25 Despite the plain language of the contract, Brodkin
maintains that the attached map could be read to grant him a
reciprocal easement as a third-party beneficiary. He argues that
the map establishes roads to and from the Progress Parcel even
though the map neither mentions Progress Corporation nor
identifies the Progress Parcel. In effect, he claims that the map
attached to the Area B Agreement creates a latent ambiguity.

¶26 We disagree. The Area B Agreement does not grant
easements to parcels, but to contracting parties. That the
contracting parties attached a map to the agreement does not
alter that fact. And even if it did, the map they attached does not
identify the Progress Parcel, because the parties to the Area B
Agreement were unaware that the Progress Parcel even existed.
So, while the map does contemplate roads to the location on the
map where the Progress Parcel exists, those roads evince nothing
more than the intent to grant access to Taylor/Tuft, together with
a mistaken belief that Taylor/Tuft owned all the property
marked with its name on the map.

¶27 Brodkin also relies on extrinsic evidence that, he argues,
demonstrates that the parties to the Area B Agreement intended
to benefit all Area B property owners regardless of their non-
party status. He points to statements by Wasatch County’s
planning director that an important consideration to Wasatch
County in approving an Area B Land Use Plan was ‚that every

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parcel was shown to have [its] own access and the plan
conclusively shows that it is possible to get from any parcel [in
Area B] to a well-established public road.‛ But, as explained, this
representation was made without any awareness that the
Taylor/Tuft parcel subsumed the Progress Parcel. So, while this
extrinsic evidence may demonstrate a factual mistake, it does not
create a latent ambiguity. Nor does it place Brodkin within the
circle of the parties to the agreement, who grant ‚to each other
reciprocal, permanent, non-exclusive ingress and egress
easements.‛

B. Brodkin Is Not a Third-Party Beneficiary to the Area B
Agreement.

¶28 Brodkin next contends that he is a third-party beneficiary
under the Area B Agreement and that the district court erred in
ruling otherwise. Because the reciprocal easements created
under the Area B Agreement unambiguously benefit only its
signatories, the district court did not err.

¶29 A third-party beneficiary is a person ‚recognized as
having enforceable rights created in them by a contract to which
they are not parties and for which they give no consideration.‛
SME Indus., Inc. v. Thompson, Ventulett, Stainback & Assocs., Inc.,
2001 UT 54, ¶ 47, 28 P.3d 669 (citation and internal quotation
marks omitted). ‚The existence of third party beneficiary status
is determined by examining a written contract.‛ Wagner v.
Clifton, 2002 UT 109, ¶ 11, 62 P.3d 440 (citation and internal
quotation marks omitted). ‚The written contract must show that
the contracting parties clearly intended to confer a separate and
distinct benefit upon the third party.‛ Id. (citation and internal
quotation marks omitted). ‚[I]t is not enough that the parties to
the contract know, expect or even intend that others will benefit
from the [contract] . . . . The contract must be undertaken for the
plaintiff’s direct benefit and the contract itself must affirmatively
make this intention clear.‛ SME Indus., 2001 UT 54, ¶ 47 (second
alteration and omission in original) (citation and internal
quotation marks omitted).

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¶30 Under these standards, Brodkin’s claim fails as a matter of
law. As we have already explained, the parties to the Area B
Agreement agreed to grant ‚to each other‛ reciprocal,
permanent, non-exclusive easements of ingress and egress. The
text of the Area B Agreement defeats any suggestion that its
parties, clearly or otherwise, intended to confer any benefit upon
any third party. Indeed—though such knowledge would be
insufficient standing alone—the parties were not even aware of
Brodkin or his predecessor-in-interest.

C. Brodkin Has No Legal Right to Enforce the Area B
Agreement.

¶31 Brodkin next contends that the district court erred in
rejecting his breach-of-contract claim on summary judgment on
the basis that he failed to prove damages. The contract in
question is the Area B Agreement. Brodkin argues the district
court erred in granting summary judgment because he
submitted evidence establishing: (1) that Optimum offered to
buy the Progress Parcel for $5 million; (2) that the Optimum
Offer ‚was expressly conditioned on Optimum being able to
obtain written confirmation from . . . Defendants that necessary
easements would be granted‛; (3) that Defendants refused to
grant access to the Progress Parcel; and (4) the Optimum Offer
failed. Brodkin’s argument assumes that Defendants had an
obligation under the Area B Agreement to grant him easements
to access the Progress Parcel, and that Defendants breached the
Area B Agreement when they refused to do so. We have already
concluded that the parties to the Area B Agreement did not
make Brodkin a third-party beneficiary. Accordingly, we
conclude that Brodkin has no legal right to enforce the Area B
Agreement against Defendants, or otherwise hold them liable for
any alleged breach. See Wagner, 2002 UT 109, ¶ 13. Accordingly,
it is of no consequence whether Brodkin failed to prove
damages, because he failed to prove the existence of a contract
that he is legally entitled to enforce.

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¶32 But even if Brodkin had a legal right to enforce the Area B
Agreement as a third-party beneficiary, his breach of contract
claim would fail. The district court explained that Brodkin’s
claim failed because no admissible evidence supported
‚Brodkin’s claim that *Defendants+ caused the Optimum Offer
not to close‛ and because ‚*b+y allowing the $5.5 million dollar
purchaser [Roth] to walk, Brodkin could have but failed to
mitigate his claimed damages.‛ We agree, at least with respect to
the Roth offer. Brodkin admitted that he allowed Roth ‚to walk‛
and he does not dispute that Roth waived any access issues.
Further, the Roth offer was for $5.5 million—the exact amount of
Brodkin’s claimed damages. Thus, Brodkin failed to mitigate his
damages. See Mahmood v. Ross, 1999 UT 104, ¶¶ 31, 36–37, 990
P.2d 933.

¶33 We conclude that the Area B Agreement is unambiguous,
that its parties did not ‚clearly express‛ an intention to confer
third-party benefits on Brodkin, that Brodkin is not a third-party
beneficiary to the Area B Agreement as a matter of law, and that
he has no legal right to enforce the Area B Agreement.
Accordingly, the district court did not err in granting
Defendants’ motion for summary judgment.

II. Attorney Fees

¶34 Finally, Brodkin contends that under Utah’s reciprocal fee
statute the district court erred in awarding Defendants their
costs and attorney fees. A challenge to an award of attorney fees
on the basis that the relevant contract or statute does not entitle
the prevailing party to fees presents a question of law that we
review for correctness. See Hooban v. Unicity Int’l, Inc., 2009 UT
App 287, ¶ 6, 220 P.3d 485, aff’d, 2012 UT 40, 285 P.3d 766.5

5. We review certain other issues surrounding the award of
attorney fees for an abuse of discretion. See Anderson &
Karrenberg v. Warnick, 2012 UT App 275, ¶ 8 (citing Reighard v.
(continued<)

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¶35 ‚As a general rule, attorney fees may be awarded only
when they are authorized by statute or contract.‛ Fericks v. Lucy
Ann Soffe Trust, 2004 UT 85, ¶ 23, 100 P.3d 1200. Utah’s
reciprocal fee statute allows a court to award costs and attorney
fees to the prevailing party in any civil action based upon a
contract whose terms allow at least one party to recover fees:

A court may award costs and attorney fees to
either party that prevails in a civil action based
upon any promissory note, written contract, or
other writing executed after April 28, 1986, when
the provisions of the promissory note, written
contract, or other writing allow at least one party to
recover attorney fees.

Utah Code Ann. § 78B-5-826 (LexisNexis 2012). Here, the Area B
Agreement provided for an award of fees to the prevailing party
in the event of a dispute:

Except as otherwise provided herein, any party to
[the Area B Agreement] may enforce this
Agreement by legal action and if that party
prevails, it shall recover costs and reasonable
attorney[] fees.

Brodkin argues that because he never claimed to be a party to
the Area B Agreement—he only claimed to be a third-party
beneficiary—the statute does not apply.

(