2026 UT App 106
Utah Ct. App.2026Background
- Hammon, an experienced real estate agent, entered multiple short-term, high-interest loan agreements with Zoom from 2006 to 2009, each secured by property and accompanied by deeds in lieu of foreclosure. 1
- The loan documents allowed Zoom to demand default interest, accelerate the debt, and record deeds in lieu transferring Hammon's property to Zoom in full satisfaction of the loans. 2
- Hammon largely stopped paying, later paid the 2009 note, then made $500 monthly payments for ten years before Zoom declared default and chose foreclosure instead of recording the deeds in lieu. 3
- Hammon and Moose sued Zoom and Taylor for breach of contract, estoppel, good faith and fair dealing, fraud, declaratory relief, and unconscionability, and obtained a preliminary injunction halting sale of the collateral. 4
- The district court dismissed the fraud claims and denied leave to amend, then granted summary judgment to Zoom and Taylor on the remaining claims. 5
- On appeal, the court affirmed most rulings but reversed summary judgment for Zoom on declaratory judgment, breach of contract, and good faith and fair dealing, remanding for construction of the contract terms. 6
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are Hammon's fraud claims barred by the economic loss rule? 7 | Hammon said the fraud claims arose from independent duties. | Zoom and Taylor said the fraud claims overlapped the contract claims. | Yes; the fraud claims were barred. 8 |
| Could Hammon amend her fraud claims? 9 | Hammon sought more allegations of fraud and nondisclosure. | Amendment would be futile and still insufficient. | No; amendment was properly denied. 10 |
| Could Hammon maintain estoppel claims? 11 | Hammon argued she had substantial evidence of estoppel. | Equitable estoppel is not an affirmative claim, and promissory estoppel is unavailable where contracts exist. | No; summary judgment for Zoom and Taylor was affirmed. 12 |
| Was summary judgment proper on declaratory judgment and unconscionability? 13 | Hammon sought a ruling on the contracts' terms and unconscionability. | No declaratory relief was needed and unconscionability was unsupported. | No; Hammon may seek declaratory relief and unconscionability must be reconsidered after construing the contracts. 14 |
| Were Hammon's contract and good-faith claims against Zoom prematurely resolved? 15 | Hammon said factual disputes precluded summary judgment. | Zoom said the contract terms defeated the claims. | Yes; summary judgment for Zoom was reversed and remanded. 16 |
Key Cases Cited
- Tuttle v. Olds, 155 P.3d 893 (Utah Ct. App. 2007) (dismissal under rule 12(b)(6) reviewed for correctness 17)
- Kelly v. Hard Money Funding, Inc., 87 P.3d 734 (Utah Ct. App. 2004) (denial of leave to amend reviewed for abuse of discretion 18)
- R4 Constructors LLC v. InBalance Yoga Corp., 557 P.3d 595 (Utah Ct. App. 2024) (summary judgment reviewed for correctness 19)
- Reighard v. Yates, 285 P.3d 1168 (Utah 2012) (economic loss rule bars tort claims overlapping contract duties 20)
- HealthBanc Int'l, LLC v. Synergy Worldwide, Inc., 435 P.3d 193 (Utah 2018) (economic loss rule turns on whether an independent duty exists 21)
- Grynberg v. Questar Pipeline Co., 70 P.3d 1 (Utah 2003) (economic loss rule bars tort claims describing the exact same conduct as contract claims 22)
- Larson v. Stauffer, 518 P.3d 175 (Utah Ct. App. 2022) (economic loss rule and first-breach principles 23)
- Former TCHR, LLC v. First Hand Management LLC, 317 P.3d 1226 (Colo. App. 2012) (economic loss rule may bar fraud claims against corporate officers or agents 24)
- Youngblood v. Auto-Owners Insurance Co., 158 P.3d 1088 (Utah 2007) (equitable estoppel is generally a defense, not an affirmative claim 25)
- Cottonwood Improvement Dist. v. Qwest Corp., 296 P.3d 754 (Utah Ct. App. 2013) (elements of promissory estoppel 26)
- Ward v. McGarry, 511 P.3d 1213 (Utah Ct. App. 2022) (equitable remedies are unavailable where an enforceable contract governs 27)
- Bleazard v. City of Erda, 552 P.3d 183 (Utah 2024) (declaratory judgment requires a justiciable, ripe controversy 28)
- Cross v. Olsen, 303 P.3d 1030 (Utah Ct. App. 2013) (first breach rule bars later contract claims after a material breach 29)
- Madsen v. Washington Mut. Bank, 199 P.3d 898 (Utah 2008) (appellate court may affirm on an alternative ground supported by the record 30)
- Bailey v. Bayles, 52 P.3d 1158 (Utah 2002) (appellate court may affirm on any legal ground apparent from the record 31)