447 P.3d 123
Utah Ct. App.2019Background
- CoBon Energy (formed by Covol and ICPE principals, later led by Steven and Robert Nash) licensed coal-fines bonding technology to develop synfuel briquette facilities and sought consultants to identify coal-fines sources and negotiate projects.
- AGTC Inc. and Alpine Coal Co. (A&A) provided consulting services from 1996 onward (about 6,000 hours), producing several projects that generated roughly $69 million in tax credits/revenue for CoBon.
- A written Consulting Agreement governed A&A’s work; CoBon paid A&A briefly but stopped, prompting litigation: CoBon sued A&A and A&A counterclaimed for breach of contract and unjust enrichment.
- CoBon asserted the Utah common-law “non-recovery rule” barring unlicensed engineers from enforcing engineering-service contracts; the district court found the contract required engineering services, concluded A&A’s principals were unlicensed, and granted summary judgment for CoBon on contract claims.
- The district court also dismissed A&A’s unjust enrichment claim because the parties acknowledged an existing contract; A&A appealed.
- The Court of Appeals reversed: it held CoBon could not invoke the non-recovery rule here because CoBon’s principals were licensed engineers (so CoBon was not in the protected class), and the unjust-enrichment dismissal was premature because enforceability remained in dispute.
Issues
| Issue | Plaintiff's Argument (A&A) | Defendant's Argument (CoBon) | Held |
|---|---|---|---|
| Whether the non-recovery rule bars A&A from enforcing the Consulting Agreement | A&A: Even if work involved engineering, CoBon cannot invoke non-recovery because its principals are licensed engineers and thus not the protected public | CoBon: The Agreement required engineering services; A&A’s principals were unlicensed, so non-recovery bars enforcement | Held: Non-recovery does not apply because CoBon (led by licensed P.E.s) is not within the class the statute protects; summary judgment for CoBon on contract claims reversed |
| Whether the identity/scope of engineering licensure matters (mining vs. electrical/mechanical) | A&A: Any licensed professional engineer suffices to remove party from protected class | CoBon: Its principals were not mining engineers, so they are not in the same trade as A&A | Held: The court reads “same trade or profession” broadly; having licensed P.E.s suffices to deprive CoBon of protected status |
| Whether dismissal of unjust enrichment was proper while contract enforceability was disputed | A&A: Dismissal was premature because CoBon advanced defenses that could render the contract unenforceable, so unjust enrichment must remain available | CoBon: Parties admitted a contract existed, so unjust enrichment is barred as an alternate remedy | Held: Dismissal was premature—existence of an acknowledged contract does not resolve enforceability; equitable claim must remain until enforceability is resolved |
Key Cases Cited
- George v. Oren Ltd. & Assocs., 672 P.2d 732 (Utah 1983) (non-recovery rule bars unlicensed practitioners from enforcing contracts when claimant is in protected class)
- Pacific Chromalox Div. v. Irey, 787 P.2d 1319 (Utah Ct. App. 1990) (exception: licensed professionals are not within the protected class and may not invoke non-recovery)
- Fillmore Products, Inc. v. Western States Paving, Inc., 561 P.2d 687 (Utah 1977) (reluctance to void contracts of non-licensees; licensed supervision can justify denying non-recovery)
- Ashby v. Ashby, 227 P.3d 246 (Utah 2010) (unjust enrichment unavailable when an enforceable contract governs the parties’ rights)
- American Towers Owners Ass’n v. CCI Mech., Inc., 930 P.2d 1182 (Utah 1996) (unjust enrichment is an equitable remedy intended where no legal remedy exists)
- Selvig v. Blockbuster Enters., LC, 266 P.3d 691 (Utah 2011) (where express contract covers subject matter, unjust enrichment is not available)