424 P.3d 1154
Utah Ct. App.2018Background
- KeyBank financed construction of an indoor athletic facility for Athletic Performance Institute, LLC (API), owned/guaranteed by Robert Keyes and leased to Utah Baseball Academy, Inc. (UBA). Camco Construction was general contractor.
- Construction produced defects (notably a floor-elevation problem) and payment disputes; Camco filed a mechanic’s lien and suit.
- A disputed draw (Draw Request No. 6) and handling of interest payments gave rise to claims by API/UBA/Keyes against KeyBank.
- The trial court bifurcated claims, enforced a contractual jury waiver and conducted an eleven-day bench trial on remaining claims after granting summary judgment on several counts.
- Trial court granted summary judgment dismissing Appellants’ IIED, lost-profits, and fraud claims; found KeyBank breached implied covenant re: draw processing but API proved no damages from the delay; KeyBank refunded certain late fees and interest.
- Appellants appealed multiple rulings (summary judgment, jury-waiver enforcement, trial findings, denial of mistrial); the Court of Appeals affirmed in all respects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Validity of IIED claim | Keyes/API alleged IIED from KeyBank’s conduct (delays, stalking, interference) | KeyBank argued claims were derivative of corporate injury or not sufficiently outrageous | Court: IIED dismissed—corporations cannot recover for emotional distress and alleged conduct not outrageous as matter of law |
| Lost profits from delayed Draw No. 6 | Delay caused inability to fix defects and lost operating profits | KeyBank argued Camco/other factors caused defects and no causation/damages tied to bank delay | Court: Summary judgment appropriate; no recoverable damages shown from delay (moots further causation dispute) |
| Enforceability of contractual jury waiver | Appellants: waiver was unknowing, involuntary, overbroad/ambiguous | KeyBank: multiple signed waivers; sophisticated parties; failure to read is not a defense | Court: Waivers enforced—no showing waiver was not knowing/voluntary or overbroad; trial court did not abuse discretion |
| Bad faith / breach of loan duties (Draw processing, refinance cooperation, payoff demand) | Bank acted in bad faith by delaying draws, impeding refinance, and demanding excessive payoff | KeyBank: acted within documents and in good faith; some administrative confusion but ultimately refunded improper charges | Held: Court found breach of implied covenant re: draw timing but no damages from delay; KeyBank not liable for refinance cooperation or payoff claims; factual findings not clearly erroneous |
Key Cases Cited
- Overstock.com, Inc. v. SmartBargains, Inc., 192 P.3d 858 (Utah 2008) (standard of review for summary judgment)
- Jackson v. Brown, 904 P.2d 685 (Utah 1995) (elements of intentional infliction of emotional distress)
- Stone Flood & Fire Restoration, Inc. v. Safeco Ins. Co. of Am., 268 P.3d 170 (Utah 2011) (shareholders cannot recover for harms derivative of the corporation)
- FDIC v. Hulsey, 22 F.3d 1472 (10th Cir. 1994) (a corporation cannot suffer emotional distress)
- Prince v. Bear River Mutual Ins. Co., 56 P.3d 524 (Utah 2002) (outrageous-conduct standard for IIED and appropriateness of summary judgment on IIED where conduct not sufficiently extreme)