Blosch v. Natixis Real Estate Capital, Inc.
311 P.3d 1042
Utah Ct. App.2013Background
- Natixis loaned Schoolhouse Downtown (Borrower) $7.8M; ~$1.2M was held in escrow until conditions (including completion/leasing of a Ruth’s Chris space) were met.
- Borrower needed short-term financing to finish the restaurant; Blosch and two partners lent $1,050,000 to Borrower and obtained a promissory note.
- Borrower requested Natixis to permit escrow disbursement by joint check payable to Borrower and Blosch; Natixis’s loan officer sent a Joint Check Letter confirming vetting of Blosch and stating Natixis would release escrow funds by check issued to both Borrower and Mr. Blosch once loan conditions were met.
- Loan servicing was transferred; escrow funds were ultimately wired to an entity controlled by Borrower and not paid jointly to Blosch; Borrower did not repay Blosch’s loan.
- Blosch sued Natixis claiming breach based on third‑party‑beneficiary status created by the Joint Check Letter; summary judgment was denied, a jury found Blosch was not a third‑party beneficiary, and the trial court dismissed the claims. Blosch appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether appeal is timely / this court has jurisdiction | Blosch: Rule 59 motion tolled appeal deadline; notice of appeal timely | Natixis: Rule 59 motion was unsupported (memorandum struck) and thus a nullity that did not toll the appeal period | Held: Jurisdiction exists; the timely-filed Rule 59 motion tolled the appeal despite the struck memorandum |
| Whether trial court erred denying summary judgment that Joint Check Letter made Blosch a third‑party beneficiary | Blosch: Joint Check Letter unambiguously conferred an enforceable benefit on him, so summary judgment should be granted | Natixis: Letter does not clearly express intent to confer an enforceable benefit; ambiguity permits extrinsic evidence and jury determination | Held: Denial affirmed — the Joint Check Letter is facially ambiguous as to intent, a legal question, so summary judgment was properly denied |
| Whether evidence was sufficient to support jury verdict that Blosch was not a third‑party beneficiary | Blosch: Evidence (letter language) unambiguously supports beneficiary status; testimony insufficient to overcome that | Natixis: Loan officer testimony and other evidence supported conclusion that Natixis did not intend to create enforceable rights for Blosch | Held: Sufficient evidence supported the jury’s finding that Blosch was not a third‑party beneficiary |
| Whether any error in jury instruction about assignment prejudiced Blosch | Blosch: Instruction misstated law on assignment/delegation and likely misled jury | Natixis: Any instructional issue was not outcome-determinative; jury decided beneficiary issue and never reached assignment defense | Held: Any instructional error was harmless; no reasonable likelihood it affected the verdict |
Key Cases Cited
- Billings v. Union Bankers Ins. Co., 918 P.2d 461 (Utah 1996) (standard for reviewing sufficiency of evidence supporting jury verdict)
- Normandeau v. Hanson Equip., Inc., 215 P.3d 152 (Utah 2009) (circumstances where denial of summary judgment based on pure legal issues is reviewable)
- Bybee v. Abdulla, 189 P.3d 40 (Utah 2008) (third‑party beneficiary requires clear expression of intent to confer separate/direct benefit)
- Menzies v. Galetka, 150 P.3d 480 (Utah 2006) (insufficient but timely motions; court’s discretion to deny or allow supplementation)
- Winegar v. Froerer Corp., 813 P.2d 104 (Utah 1991) (distinguishing assignment of rights from delegation of duties)
- Gender Machine Works, Inc. v. Eidal Int’l Sales Corp., 929 P.2d 1033 (Or. Ct. App. 1996) (example of joint‑payment language that unambiguously created third‑party beneficiary rights)
- Eastern Aviation Group, Inc. v. Airborne Express, Inc., 8 Cal. Rptr. 2d 355 (Cal. Ct. App. 1992) (joint‑payment clause held not to create enforceable third‑party beneficiary where intent to benefit was not clearly expressed)