391 P.3d 388
Utah Ct. App.2017Background
- In April 2006 Kenworthy took a written Goldenwest loan to buy a vehicle; maturity date was April 15, 2012.
- Original monthly payments were $487.21; after two missed payments in 2008, Goldenwest orally agreed to reduce payments to $200/month. No other loan terms were assertedly modified.
- Kenworthy made one $200 payment then defaulted; Goldenwest sued on February 5, 2014 for the remaining balance.
- Kenworthy moved for summary judgment, asserting the action was time-barred by the statute of limitations; the district court granted summary judgment and awarded attorney fees.
- On appeal the court considered (1) whether the oral change to monthly payment converted the written contract into an oral one for limitations purposes and (2) when the statute of limitations began to run (maturity vs. last payment or acceleration).
Issues
| Issue | Plaintiff's Argument (Goldenwest) | Defendant's Argument (Kenworthy) | Held |
|---|---|---|---|
| Which statute of limitations applies: six-year (written instrument) or four-year (oral modification)? | Original loan is written so six-year applies; oral change to one term may not be material to convert the contract. | Oral reduction of monthly payment converted the controlling term, so four-year statute applies. | Court: whether the modification is "material" is unclear; lowering monthly payment may not necessarily convert the contract. Not resolved on summary judgment. |
| When does the limitations period begin to run for an installment contract with a future maturity date? | Statute begins to run at maturity if lender did not legally accelerate the debt. | Statute began earlier based on last payment or borrower default. | Held: If no acceleration, limitations begins to run at the maturity date (April 15, 2012); court found Kenworthy did not prove acceleration. |
| Did Goldenwest accelerate the debt (e.g., by collecting insurance proceeds) so limitations ran earlier? | Goldenwest did not accelerate; collection of insurance proceeds does not automatically effect acceleration and the loan agreement governs acceleration. | Kenworthy argued Goldenwest accelerated the debt by collecting insurance proceeds after the crash. | Court: Acceleration was not established in the record; Kenworthy failed to raise or support the argument below. Court did not accept automatic acceleration from collecting insurance proceeds. |
| Was summary judgment appropriate that the claim was time-barred? | No; because the claim was filed within four years of maturity and there is a question about applicable statute, summary judgment was improper. | Yes; district court held the statute had run and awarded summary judgment and fees. | Reversed: summary judgment for Kenworthy was erroneous; case remanded for further proceedings. |
Key Cases Cited
- Orvis v. Johnson, 177 P.3d 600 (Utah 2008) (summary judgment standard and requirements)
- Strand v. Union Pac. R.R., 312 P.2d 561 (Utah 1957) (oral change to a material term of written contract makes oral-contract limitations apply)
- Griffin v. Cutler, 339 P.3d 100 (Utah Ct. App. 2014) (distinguishing written vs. oral contract limitations)
- Watkins v. Henry Day Ford, 239 P.3d 526 (Utah Ct. App. 2010) (discussing prevailing-party fee determinations on remand)