Federated Capital Corporation v. Deutsch
2018 UT App 118
| Utah Ct. App. | 2018Background
- Federated Capital (Michigan corp.) sued Neal Deutsch (Florida resident) for breach of a credit‑card contract, alleging unpaid balances and contractual interest; the contract designated Utah law and Utah courts as the exclusive forum but required payments to be made in Pennsylvania.
- Defendant moved for summary judgment arguing Utah’s borrowing statute required dismissal because the cause of action arose in Pennsylvania and Pennsylvania’s four‑year statute of limitations had run.
- The district court granted summary judgment for Deutsch applying Utah’s borrowing statute. Federated appealed, arguing the causes of action arose in Utah because the contract selected Utah law and forum.
- Federated distinguished an earlier Utah Supreme Court decision involving the same contract, Federated Capital Corp. v. Libby, by asserting here that the contract’s controlling‑law clause made the place of breach Utah.
- The Court of Appeals declined to reach the merits because Federated had not preserved the specific legal theory (that choice‑of‑law changes the place where a cause of action "arises") in the district court; the court affirmed and remanded to determine defendant’s appellate attorney fees.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Utah's borrowing statute is inapplicable because the contract's choice‑of‑law/forum clause makes the causes of action "arise" in Utah | Federated: Controlling Law & Jurisdiction Clause means breaches are deemed to arise in Utah, so Utah's 6‑year contract statute applies | Deutsch: Cause of action arose in Pennsylvania (place of performance); Pennsylvania's statute had run so borrowing statute bars suit | Not reached on merits — Federated failed to preserve this legal theory below; appeal affirmed on preservation grounds |
| Whether the district court correctly applied Utah's borrowing statute to import Pennsylvania's limitations period | Federated: borrowing statute should not rewrite enforceable forum clause; Utah procedural rules govern | Deutsch: borrowing statute applies because cause arose in PA and PA statute expired | Court of Appeals followed preservation rule and did not resolve the substantive conflict anew; outcome leaves district court's dismissal intact |
| Whether an unraised legal theory may be considered on appeal despite related arguments below | Federated: appellate briefing presents logical extension of arguments made below | Deutsch: appellant did not specifically present the legal theory to trial court; fairness and judicial economy weigh against new theory | Issue unpreserved; exceptions to preservation not invoked; appellate court declines to consider it |
| Whether prevailing party on appeal is entitled to appellate attorney fees under reciprocal‑fee statute | Federated: (implicit) fees not warranted | Deutsch: contract permits fees; he prevailed on appeal | Deutsch awarded reasonable appellate attorney fees; amount to be determined by district court on remand |
Key Cases Cited
- Federated Capital Corp. v. Libby, 384 P.3d 221 (Utah 2016) (holding forum‑selection clause selecting Utah law made the case governed by Utah law and that borrowing statute could apply)
- State v. Johnson, 416 P.3d 443 (Utah 2017) (preservation rule: issues must be specifically raised and supported below to be reviewable on appeal)
- Orvis v. Johnson, 177 P.3d 600 (Utah 2008) (standard of review for summary judgment)
- Federated Capital Corp. v. Haner, 351 P.3d 816 (Utah Ct. App. 2015) (prevailing party in contract action may recover appellate attorney fees under reciprocal fee statute)
- Patterson v. Patterson, 266 P.3d 828 (Utah 2011) (preservation policy considerations: judicial economy and fairness)