Central Utah Water Conservancy District v. Upper East Union Irrigation Co.
321 P.3d 1113
| Utah | 2013Background
- CUWCD agreed in a 2008 written Agreement to fund and construct piping improvements and to remove/replace the Timpanogos Canal Company (TCC) diversion; in return Canal Companies (UEU, ERB, TCC) conveyed conserved water rights and quitclaim deeds into escrow as security.
- CUWCD substantially completed the piping work by May 2004 but never began replacing the TCC diversion and later refused to perform, citing environmental/permit issues.
- In March 2007 CUWCD offered $75,000 as payment in lieu of replacing the diversion and treated the offer as a tender unless rejected; the Canal Companies did not accept and later declared CUWCD in default and demanded delivery of escrowed quitclaim deeds per the Agreement’s damage clause.
- CUWCD sued for declaratory relief; UEU, ERB, and TCC counterclaimed. After discovery, UEU and ERB moved for partial summary judgment; the district court ordered delivery of the quitclaim deeds to UEU and ERB and ultimately entered final judgment for them under rule 54(b).
- CUWCD appealed, arguing (inter alia) that its breach was not material because UEU/ERB received their bargain, its failure was excused by impracticability, its $75,000 offer was a valid tender (or was waived), it should be allowed to amend to add DOI/URMCC, and the court should have reconsidered.
Issues
| Issue | Plaintiff's Argument (CUWCD) | Defendant's Argument (UEU/ERB) | Held |
|---|---|---|---|
| Whether CUWCD materially breached by not replacing the TCC diversion | Breach not material; UEU/ERB got piping work and thus benefit of bargain | TCC diversion was essential; UEU/ERB abandoned their own diversion and therefore did not receive the bargained-for benefit | Breach was material; UEU/ERB did not receive the benefit of their bargain and CUWCD owed them the diversion replacement |
| Whether impracticability excuses nonperformance | Environmental/permit constraints and LPRDS project made replacement impracticable | Parties knew of LPRDS and CUWCD never sought permits; CUWCD assumed permitting risk under the Agreement | Impracticability not available: event was known or foreseeable, CUWCD made no permit effort, and it assumed the risk of permits in the contract |
| Whether $75,000 payment offered in lieu of performance constituted valid tender or was accepted by silence | The cash offer was a valid, timely tender and silence amounted to acceptance/waiver | Contract required CUWCD to perform construction; offering cash was substitute performance (settlement), not an unconditional tender | Offer was not a valid tender of contractual performance; it was a settlement offer and non‑response did not accept it |
| Whether district court abused discretion by denying (a) reconsideration and (b) motion to amend to add DOI/URMCC | Reconsideration warranted due to alleged unconscionable forfeiture; joinder necessary because federal entities benefitted and had interests | No new evidence warranting reconsideration; DOI/URMCC had no present vested interest and were not necessary parties | Denial of reconsideration was not an abuse of discretion; joinder denied because DOI/URMCC are not necessary parties under Rule 19 |
Key Cases Cited
- Peterson v. Coca-Cola USA, 48 P.3d 941 (Utah 2002) (summary judgment review standard)
- Zions First Nat'l Bank v. Nat'l Am. Title Ins. Co., 749 P.2d 651 (Utah 1988) (contract interpretation as question of law when no extrinsic evidence)
- W. Props. v. S. Utah Aviation, Inc., 776 P.2d 656 (Utah Ct.App. 1989) (impracticability requires unforeseen event after contracting)
- PDQ Lube Ctr., Inc. v. Huber, 949 P.2d 792 (Utah Ct.App. 1997) (elements of valid tender of payment)
- Kelley v. Leucadia Fin. Corp., 846 P.2d 1238 (Utah 1992) (tender must be unconditional performance of agreed obligation)
- Kennecott Corp. v. Utah State Tax Comm'n, 814 P.2d 1099 (Utah 1991) (Rule 54(b) certification guidance regarding overlapping claims)