Giles v. Mineral Resources International, Inc.
2014 UT App 259
| Utah Ct. App. | 2014Background
- Giles was MRI’s international sales rep (1995–2010); he signed MRI-drafted non-compete and non-disclosure agreements.
- Giles assisted HCI (an MRI regional distributor) in filing a trademark application for CMD in 2008; MRI used the CMD mark by mid-2008.
- MRI discovered the application in 2009, confronted Giles; Giles said HCI filed on MRI’s behalf. The application lapsed in 2012.
- Giles left MRI in 2010. HCI’s purchases from MRI declined ≈10% (2010–2011) and ≈50% (2011–2012) and ceased by 2013 when HCI sought other suppliers.
- Giles sued for a declaration the non-compete was unenforceable; MRI counterclaimed, including breach of fiduciary duty and contract-related claims. The contract claim was later dismissed; the fiduciary claim remained.
- The district court granted Giles summary judgment on the fiduciary claim for lack of proof of actual causation/damages and awarded Giles attorney fees under the agreements; MRI appealed.
Issues
| Issue | Plaintiff's Argument (MRI) | Defendant's Argument (Giles) | Held |
|---|---|---|---|
| Whether MRI presented sufficient evidence of actual/proximate damages from Giles’s alleged breach of fiduciary duty | MRI: circumstantial evidence (trademark dispute + subsequent reduced orders and loss of HCI) permits a reasonable inference Giles caused lost sales | Giles: MRI has no evidence linking his 2008 conduct to HCI’s later purchasing decisions—claims are speculative | Court: Affirmed summary judgment — circumstantial link is too remote/speculative to show causation |
| Whether MRI could at least proceed to trial for nominal damages despite lack of proof of actual damages | MRI: Even if compensatory damages speculative, nominal damages are available for a proven legal wrong | Giles: (implicit) nominal damages insufficient where actual damages are an essential element | Court: MRI inadequately briefed; on merits, uncertain under Utah law and generally nominal damages not available when actual damages are an element—argument rejected |
| Whether Giles was entitled to attorney fees under the agreements despite prevailing on a tort (fiduciary) claim rather than contract claim | MRI: Fiduciary claim is a tort independent of the contracts; fee clause applies only to contract disputes | Giles: Fee clause covers any legal action “arising under or relating to” the agreements; the claims arose from same transaction | Court: Affirmed fee award — contractual fee clause is broad; the litigation arose under/related to the agreements, so prevailing party fees are recoverable |
| Whether Giles is entitled to appellate attorney fees | Giles: Prevailing party who recovered fees below is entitled to appellate fees | MRI: did not contest recovery of appellate fees | Held: Remand to district court to determine reasonable appellate attorney fees |
Key Cases Cited
- Judge v. Saltz Plastic Surgery, PC, 330 P.3d 126 (Utah Ct. App. 2014) (standard of review for summary judgment and limits on speculative inferences)
- Christensen & Jensen, PC v. Barrett & Daines, 194 P.3d 931 (Utah 2008) (elements of breach of fiduciary duty claim include proximate cause and damages)
- Harline v. Barker, 854 P.2d 595 (Utah Ct. App. 1993) (proximate cause is an issue of fact; summary judgment appropriate only if no evidence supports causation)
- Energy Claims Ltd. v. Catalyst Inv. Group Ltd., 325 P.3d 70 (Utah 2014) (contract clause scope may include tort claims where language covers disputes "arising out of or related to" the agreement)
- Campbell v. State Farm Mut. Auto. Ins. Co., 65 P.3d 1134 (Utah 2001) (discusses exception allowing attorney fees for breach of fiduciary duty in some circumstances)