Federated Capital Corporation v. Shaw
428 P.3d 12
Utah Ct. App.2018Background
- Federated Capital Corporation sued James N. Shaw for breach of a credit‑card contract, alleging unpaid balances and contract interest; the contract designated Utah law and Utah courts as the forum.
- Shaw, a Texas resident, answered asserting the statute‑of‑limitations as an affirmative defense and later moved for summary judgment arguing Pennsylvania was the place of performance and its 4‑year limitations period barred the suit; he referenced Pennsylvania’s 4‑year period in his answer and cited statutes in his motion.
- Federated responded to Shaw’s summary‑judgment motion on the merits without objecting to the specificity of Shaw’s pleading or presenting the particular legal theory later advanced on appeal (that the contract choice‑of‑law/jurisdiction clause meant the cause of action “arose” in Utah).
- The district court granted summary judgment for Shaw, reasoning the contract required payments to be received at a Pennsylvania address and thus the cause of action accrued in Pennsylvania in March 2007, so Pennsylvania’s 4‑year statute barred suit.
- On appeal Federated raised three claims: (1) Shaw’s answer failed to plead the statute‑of‑limitations properly; (2) the borrowing statute should not apply because the contract chose Utah law and forum; and (3) alternatively, the parties modified the place of performance to Utah via electronic payment procedures.
- The appellate court affirmed: Federated waived the pleading‑specificity objection; the choice‑of‑law/for um theory was not preserved; and Federated failed to rebut the district court’s contract-based finding that performance (and accrual) occurred in Pennsylvania.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Adequacy of pleading statute of limitations | Shaw’s answer failed to specify the statute section hence inadequate under rule 9(i) | Shaw’s answer alleged SOL defense and later identified Pennsylvania’s 4‑yr period in motions; Federated responded on the merits | Waived—Federated’s merits response forfeited the specificity objection |
| Application of Utah borrowing statute / choice‑of‑law | Contract’s Utah choice‑of‑law and jurisdiction clause means cause arose in Utah; Utah 6‑yr SOL should apply | Cause arose where performance occurred (Pennsylvania); borrowing statute imports PA 4‑yr period | Not preserved—Federated did not present this theory to the district court; issue forfeited |
| Place of performance after alleged contract modification | Parties modified payment procedures; electronic payments were received in Salt Lake City, so performance occurred in Utah | Contract explicitly required payment to be received at the Pennsylvania address; payments effective only upon receipt there | Rejected—Federated failed to rebut district court’s interpretation that payments were effective only upon receipt in Pennsylvania |
| Attorney fees on appeal | N/A | Contract authorizes fees to at least one party; Utah reciprocal fee statute permits award to prevailing party | Awarded—Shaw entitled to reasonable appellate fees to be determined by district court on remand |
Key Cases Cited
- Federated Capital Corp. v. Libby, 384 P.3d 221 (Utah 2016) (standard of review for summary judgment)
- Federated Capital Corp. v. Haner, 351 P.3d 816 (Utah Ct. App. 2015) (prevailing party entitled to appellate attorney fees under reciprocal‑fee statute)
- Hi‑Country Estates Homeowners Ass’n v. Jesse Rodney Dansie Living Trust, 359 P.3d 655 (Utah Ct. App. 2015) (appellant must address district court’s reasons to show error)
- Golden Meadows Props., LC v. Strand, 241 P.3d 375 (Utah Ct. App. 2010) (appellant cannot prevail on appeal without attacking district court’s rationale)