288 P.3d 26
Utah Ct. App.2012Background
- Davis and Sperry purchased Rock Canyon property in 1998 under a verbal partnership; title held 50/50 in their names but for the partnership.
- Davis and Sperry formed Rock Canyon, LLC to hold partnership assets; the Property was never transferred to Rock Canyon.
- Davis paid the remaining $75,000 balance in 1999, believing it constituted Sperry’s buyout of his interest.
- Sperry conveyed half of his 50% interest to Kapelow and Red Slab later exercised a Provo City option; Davis did not accept $37,500 as reimbursement and dissolved the partnership after Sperry’s conveyance.
- Davis amended the complaint in 2005 adding Kapelow, Design West, Red Slab, and Provo City; the remaining defendants moved for summary judgment.
- The trial court held the option agreement ambiguous and granted summary judgment to Red Slab/Provo City and Sperry on related issues; on appeal the Utah Court of Appeals reverses and remands.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing to challenge the option agreement | Davis has injury from Sperry's conveyances. | Davis lacks direct stake in the option. | Davis has standing. |
| Ambiguity of the option agreement and use of extrinsic evidence | Paragraph 2 fixes the deadline; extrinsic evidence disputes this. | Agreement unambiguous; extrinsic evidence not required. | Agreement ambiguous; extrinsic evidence admissible; remand. |
| Extrinsic evidence and integration/Statute of Frauds concerns | Hill/Williams testimony should be barred by integration clause/Statute of Frauds | Testimony relevant to intent; not a new term. | Trial court erred in excluding disputed extrinsic evidence; remand. |
| Bona fide purchaser status of Red Slab and Provo City | Actual knowledge of Davis’s claims negates BFP status | Notice and conduct affect BFP status differently; facts are disputed. | BFP status cannot be resolved on summary judgment; remand. |
| Conveyances to Kapelow/Design West and partnership law | Partnership property rule and authority affect validity of conveyances | Code provisions are inadequately briefed; issues unclear. | Briefing inadequate; unresolved on appeal; remand. |
Key Cases Cited
- Lee v. Barnes, 977 P.2d 550 (Utah App. 1999) (contract terms interpreted as closing date vs. payment timing)
- Plateau Mining Co. v. Utah Div. of State Lands & Forestry, 802 P.2d 720 (Utah 1990) (contract interpretation; giving effect to all terms)
- SME Indus., Inc. v. Thompson, Ventulett, Stainback & Assocs., Inc., 28 P.3d 669 (Utah 2001) (ambiguity; extrinsic evidence to determine intent)
- Willard Pease Oil & Gas Co. v. Pioneer Oil & Gas Co., 899 P.2d 766 (Utah 1995) (extrinsic evidence admissible to explain contract intent)
- Hogs R Us v. Town of Fairfield, 207 P.3d 1221 (Utah 2009) (standing deference to factual foundations)
- Lee v. Barnes, 977 P.2d 550 (Utah App. 1999) (parol evidence vs. integrated contract terms)
- Lucky Seven Rodeo Corp. v. Clark, 755 P.2d 750 (Utah Ct. App. 1988) (summary judgment and disputed material facts)
- West Valley City v. Majestic Inv. Co., 818 P.2d 1311 (Utah Ct. App. 1991) (evidence admissibility in contract interpretation)
- Green River Canal Co. v. Thayn, 84 P.3d 1134 (Utah 2003) (standards for reviewing summary judgment)
- Jones v. Barlow, 154 P.3d 808 (Utah 2007) (standing as a jurisdictional requirement; factual underpinnings)