545 P.3d 294
Utah Ct. App.2024Background
- In 2007, Kelepi (Gary) Finau formed the Finau Corporation to support his sons Tony and Gipper’s early golf careers.
- Finau Corporation entered into a $495,000 no-interest Loan Agreement and an Equity Agreement (20% equity for $5,000) with ICON Sports; both contracts made repayment and operations dependent on the Finau Corporation’s existence.
- The Finau Corporation was dissolved by shareholder vote (favoring Finaus, opposing from ICON’s owner) in 2009.
- David Hunter, as ICON’s assignee, sued the Finaus personally in 2021, alleging breach of contract, breach of the covenant of good faith and fair dealing, and unjust enrichment based on failure to pay post-dissolution.
- The district court dismissed the claims, ruling that dissolution triggered the statutes of limitations, which had long since expired by the time of suit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When did the statute of limitations run? | Agreements not breached until Finaus earned money from golf careers; no breach at dissolution. | Dissolution of the Finau Corporation was the breach/event triggering the limitations period. | Limitations began at dissolution (2009); claims time-barred. |
| Did contract language entitle ICON to future earnings of Finaus? | Agreements entitled ICON to Finaus' personal earnings, not just through the corporation. | Agreements only covered revenue flowing through the corporation, not individual earnings post-dissolution. | Plain language did not entitle ICON to post-dissolution personal earnings from Finaus. |
| Tolling by the discovery rule | Obligations/injury weren’t discoverable until Finaus began earning substantial golf winnings post-dissolution. | No tolling—dissolution was known, and all parties aware of claims at that point. | No concealment or exceptional circumstances; limitations not tolled. |
| Anticipatory breach versus condition precedent | Dissolution was only anticipatory breach; statute should not run until actual breach/performance due. | Hunter did not preserve or argue anticipatory breach below; claims accrued at dissolution. | Hunter’s argument not preserved at trial; anticipatory breach doctrine not considered. |
Key Cases Cited
- Russell Packard Dev., Inc. v. Carson, 108 P.3d 741 (Utah 2005) (articulates statute of limitations accrual and discovery rule)
- Eggett v. Wasatch Energy Corp., 94 P.3d 193 (Utah 2004) (explains implied covenant of good faith and fair dealing)
- Clarke v. Living Scriptures, Inc., 114 P.3d 602 (Utah Ct. App. 2005) (accrual of contract claims at time of breach)
- Jones v. Mackey Price Thompson & Ostler, 355 P.3d 1000 (Utah 2015) (elements for unjust enrichment)
- Koerber v. Mismash, 315 P.3d 1053 (Utah Ct. App. 2013) (standards for review on motion to dismiss)