CUWCD v. UEU
2013 UT 67
Utah2013Background
- In 2003 CUWCD agreed to fund improvements: pipe portions of UEU and ERB canals and replace the TCC Diversion; in exchange the Canal Companies (UEU, ERB, TCC) would convey conserved water rights and reconvey piping title to UEU/ERB upon substantial completion.
- The Agreement required CUWCD to place quitclaim deeds in escrow; if CUWCD defaulted the Canal Companies could demand delivery of those deeds as their sole remedy.
- CUWCD substantially completed the piped portions by May 2004 but never began replacing the TCC Diversion; CUWCD later offered $75,000 in lieu of building the diversion and claimed the offer was a tender.
- The Canal Companies notified CUWCD of default, demanded the escrowed quitclaim deeds, and CUWCD sued for declaratory relief; Canal Companies counterclaimed.
- The district court granted partial and then final summary judgment for UEU and ERB, ordered delivery of the quitclaim deeds, rejected CUWCD’s impracticability defense and its tender argument, denied reconsideration, and refused to allow joinder of DOI and URMCC.
Issues
| Issue | CUWCD's Argument | Canal Companies' Argument | Held |
|---|---|---|---|
| Whether CUWCD’s breach was material / whether UEU and ERB received benefit of their bargain | Breach not material because UEU/ERB received benefits (piping); CUWCD substantially performed | Breach was material because CUWCD failed to replace the essential TCC Diversion and UEU/ERB abandoned their independent diversion | Held: Material breach — UEU and ERB did not receive their bargained-for benefit; CUWCD owed them the diversion and failed to substantially perform |
| Whether impracticability excuses CUWCD’s failure to build the TCC Diversion | Performance excused by environmental/permitting changes (LPRDS project) making construction impracticable | LPRDS was known or reasonably foreseeable; CUWCD never sought permits and contract allocated permit-obtainment risk to CUWCD | Held: Impracticability fails — event known or foreseeable, CUWCD did not attempt permits, and CUWCD assumed permitting risk under the contract |
| Whether CUWCD’s $75,000 offer constituted a valid tender in lieu of performance | $75,000 was a timely, unconditional tender; Canal Companies waived objection by not replying | Contract required CUWCD to perform construction; tender must be of the contractually required performance, not an alternative cash settlement | Held: Not a valid tender — cash was an alternative settlement, not performance as required by the Agreement, so Canal Companies had no duty to accept or object |
| Whether district court erred in procedure (Rule 54(b), reconsideration, joinder of DOI/URMCC, and quantum meruit) | Rule 54(b) improper; court should reconsider; URMCC/DOI are necessary parties; quantum meruit available | 54(b) certification appropriate given distinct claims/remedies; motion to reconsider denied properly; DOI/URMCC not necessary parties; quantum meruit not preserved and unavailable where an enforceable contract exists | Held: District court acted properly — certified final judgment, denial of reconsideration was not abuse of discretion, joinder denied because DOI/URMCC not necessary, and quantum meruit not considered (not preserved) |
Key Cases Cited
- Peterson v. Coca-Cola USA, 48 P.3d 941 (Utah 2002) (summary-judgment standard and appellate review of legal issues)
- 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)
- PDQ Lube Ctr., Inc. v. Huber, 949 P.2d 792 (Utah Ct. App. 1997) (elements of a valid tender of payment)
- Kennecott Corp. v. Utah State Tax Comm’n, 814 P.2d 1099 (Utah 1991) (limits on Rule 54(b) certification when substantial factual overlap exists)
- Kilgore Pavement Maint., LLC v. W. Jordan City, 257 P.3d 460 (Utah Ct. App. 2011) (party who contracts to obtain materials or permits assumes related risks)