477 P.3d 472
Utah Ct. App.2020Background
- Greyhound leased space at Salt Lake City’s Intermodal Hub; Lease required Greyhound to "secure and maintain" commercial general liability insurance naming UTA as additional insured ($1,000,000 per occurrence, $5,000,000 aggregate) and assigned snow-removal responsibility to UTA.
- Utah Supreme Court (Greyhound I) previously held the Lease insurance clause required Greyhound to obtain insurance that covered UTA’s negligent acts.
- Greyhound purchased a fronting commercial general liability policy with $5 million per-occurrence limits and a $5 million deductible; the insurer agreed to defend and indemnify UTA from dollar one but retained rights to recover the deductible from Greyhound; Greyhound (not UTA) was responsible for the deductible under the policy.
- In 2013 a patron slipped on snow at the Hub; Greyhound paid the patron $1,000 to settle and then sued UTA for breaching snow-removal obligations; UTA counterclaimed that Greyhound breached the insurance procurement provision (and related duties) by buying a policy with a large deductible.
- The district court initially granted summary judgment to UTA, finding Greyhound’s fronting policy ineffective under the Lease; procedural confusion over whether that order was final led to a later district-court clarification and Greyhound’s timely appeal of the Third Order.
- On appeal the court held that (1) Greyhound’s fronting policy satisfied the Lease’s insurance requirement because the policy defended/indemnified UTA from dollar one and Greyhound bore the deductible costs; and (2) UTA failed to dispute snow-removal facts, so Greyhound was entitled to declaratory relief and summary judgment on liability for breach of the snow-removal provision, but only nominal contract damages (not recovery of the deductible).
Issues
| Issue | Plaintiff's Argument (Greyhound) | Defendant's Argument (UTA) | Held |
|---|---|---|---|
| Jurisdiction: Was appeal timely? | Appeal timely after Third Order because First Order was not final on damages; Third Order finally resolved all claims. | Second Order (dismissing implied-covenant claim) made case final; Greyhound’s later appeal was untimely. | Court found district court did not abuse discretion interpreting First Order as partial; Third Order was final; appeal timely. |
| Did fronting policy satisfy Lease insurance procurement clause? | Yes: policy named UTA as additional insured, insurer defended/indemnified UTA from dollar one, and Greyhound bore the deductible as part of "costs and expenses." | No: $5M deductible makes coverage illusory and does not meet Lease minimum per-occurrence coverage. | Reversed district court; fronting policy met Lease requirement because it provided meaningful coverage to UTA and Greyhound bore the deductible costs. |
| Did UTA breach snow-removal obligations and can Greyhound recover settlement/deductible? | UTA failed to remove snow; Greyhound entitled to declaratory relief, liability, and damages (including the $1,000 settlement). | Even if UTA breached, Greyhound’s inability to prove recoverable damages (and its obligation to bear policy deductible) bars recovering the $1,000. | UTA failed to controvert facts; Greyhound entitled to declaratory relief and summary judgment on liability; only nominal damages awarded—Greyhound may not recover the $1,000 deductible from UTA. |
| Attorney fees awarded to UTA based on First Order — proper? | Greyhound sought reversal of fee award tied to the erroneous First Order. | UTA argued it prevailed and was entitled to fees. | Fee award tied to the reversed rulings is vacated; matter remanded for district court to reassess fee entitlement consistent with this opinion. |
Key Cases Cited
- Utah Transit Auth. v. Greyhound Lines, Inc., 355 P.3d 947 (Utah 2015) (interpreting Lease insurance clause to require coverage of indemnitee’s negligence)
- Layton City v. Stevenson, 337 P.3d 242 (Utah 2014) (contract interpretation: parties’ intent controls)
- Café Rio, Inc. v. Larkin-Gifford-Overton, LLC, 207 P.3d 1235 (Utah 2009) (read contract provisions together; give effect to all terms)
- Orvis v. Johnson, 177 P.3d 600 (Utah 2008) (summary-judgment nonmoving party cannot rest on mere denials)
- Waddoups v. Amalgamated Sugar Co., 54 P.3d 1054 (Utah 2002) (nonmoving party must produce more than conclusory assertions)
- Collier v. Heinz, 827 P.2d 982 (Utah Ct. App. 1992) (attorney fees as consequential damages limited to certain third-party litigation scenarios)
- Foote v. Clark, 962 P.2d 52 (Utah 1998) (nominal damages awarded when legal right invaded but no compensable loss proven)
- Crank v. Utah Judicial Council, 20 P.3d 307 (Utah 2001) (remand for district court to determine entitlement to appellate attorney fees)