515 P.3d 466
Utah Ct. App.2022Background
- In 2015 Five Star leased commercial property from Jessup and Kristy via a Base Lease (plus Addenda); Addendum 2—signed by all parties—stated it incorporated unmodified Base Lease terms.
- Closing documents in the record show the property was conveyed in November 2015 to trustees of family trusts, though parties described the purchase as made by Jessup and Kristy then titled in trusts.
- In May 2018 Five Star sought a signed copy of the Base Lease for an SBA loan; Jessup and Kristy responded they never signed the Base Lease, preferred negotiating a new standard lease, and signed Addendum 2 earlier to “patch” the Base Lease.
- Five Star’s counsel replied it would treat prior signatures as revoked and would seek a new agreement; Five Star nevertheless continued to occupy and pay under the prior arrangement until it vacated in 2020.
- Jessup and Kristy sued for breach; defendants moved for summary judgment arguing (a) anticipatory repudiation/rescission based on the 2018 emails and (b) lack of plaintiff ownership/real-party-in-interest because title was in trusts.
- The district court granted summary judgment finding Jessup and Kristy repudiated the lease; the Court of Appeals reversed and remanded, holding Five Star had reasonable grounds to demand assurance but genuine issues exist whether plaintiffs gave adequate assurance; the court declined to affirm on the alternative ownership ground because the record and trust documents were insufficient.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Jessup & Kristy’s May 2018 emails repudiated the 2015 lease | Emails are ambiguous; signatures on Addendum 2 show plaintiffs intended to be bound and did not repudiate | Emails expressly deny signing the Base Lease, state intent to replace it, and justify Five Star’s treating the lease as repudiated | Court: Five Star reasonably interpreted emails as grounds to demand assurance, but whether plaintiffs provided adequate assurance is a factual question; summary judgment improper |
| Whether Five Star had reasonable grounds and could treat silence/lack of response as repudiation | Plaintiffs say their communications (and continued performance) provided adequate assurance | Defendants say plaintiffs’ words and lack of clear assurance justified treating the contract as repudiated | Court: As a matter of law, Five Star had reasonable grounds to request assurance; adequacy of plaintiffs’ assurance is for factfinder |
| Whether plaintiffs lacked standing/ownership because title was in trusts, invalidating the lease | Plaintiffs: they purchased the property and then caused title to be taken in trusts; they retained authority and/or could be real parties in interest | Defendants: deed shows conveyance to trusts so plaintiffs never owned the property individually and could not validly lease it | Held: Court refused to affirm on this alternative ground—record lacks trust instruments and key facts; rule 17(a) issues unresolved; remand appropriate |
| Whether facts raised after summary judgment (sublease, alleged phone contact, continued performance) could be considered | Plaintiffs: post-judgment facts show continued performance and support their position | Defendants: those facts were not presented at summary judgment and cannot be considered on appeal | Held: Appellate review limited to facts and legal theories presented at summary judgment; new facts in post-judgment motions were not considered |
Key Cases Cited
- Kasco Servs. Corp. v. Benson, 831 P.2d 86 (Utah 1992) (defines anticipatory breach/repudiation principles)
- Smargon v. Grand Lodge Partners, LLC, 288 P.3d 1063 (Utah Ct. App. 2012) (repudiation can give rise to total breach)
- Continental Bank & Trust Co. v. Country Club Mobile Estates, Ltd., 632 P.2d 869 (Utah 1981) (settlor must follow trust formalities; trustee’s title controls trust property)
- Glenn v. Reese, 225 P.3d 185 (Utah 2009) (ambiguous conduct intended to signal termination will not be treated as terminating the contract)
- Bitzes v. Sunset Oaks, Inc., 649 P.2d 66 (Utah 1982) (adequate-assurance branch of repudiation doctrine discussed)