392 P.3d 950
Utah Ct. App.2017Background
- Sun Hill Homes (Builder) developed and graded the lot and had a geotechnical firm investigate the subdivision; the parties signed a fully integrated Real Estate Purchase Construction Contract (REPC).
- Paragraph 14.3 of the REPC released the Builder from liability for future buyer improvements (walls, grading, excavation, etc.) and assigned the duty to "correctly engineer" such future improvements to the buyers (Homeowners).
- After a flood and regrading by the Builder (which added substantial soil and increased buildable area), the Homeowners bought the house and later hired a pool contractor to excavate and build a pool in the backyard.
- The pool area was outside the treated zone for expansive/collapsible soils; the pool settled significantly and the Homeowners sued the pool builder and the Builder for breach of the REPC; claims against the pool builder were resolved at trial.
- A bench trial initially awarded damages to the Homeowners based on an implied duty the court found the Builder had to investigate soil suitability after the regrading; a successor judge granted the Builder’s motion for a new trial, concluding no contractual duty existed under the REPC and awarding the Builder attorney fees; the Homeowners appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the trial court abused its discretion in granting a new trial by removing an implied contractual duty on Builder to investigate soil suitability after regrading | Mardesich: REPC was modified (or its conformity altered by post-contract regrading), creating a Builder duty to provide or investigate soil suitable for backyard improvements | Sun Hill: REPC is fully integrated; paragraph 14.3 expressly allocates responsibility for engineering future improvements to the buyers; no modification was proved | Affirmed. No reasonable basis to impose a contractual duty on Builder: paragraph 14.3 bars Builder liability for future improvements and Homeowners failed to prove a valid modification |
| Whether the trial court erred awarding attorney fees to Builder under the REPC | Mardesich: trial court erred in awarding fees (argued on appeal) | Sun Hill: REPC authorizes fees and Builder prevailed on appeal | Court did not reach the merits of the fee challenge because it affirmed the new-trial ruling; awarded Builder reasonable appellate fees |
Key Cases Cited
- Horrell v. Utah Farm Bureau Ins. Co., 909 P.2d 1279 (Utah Ct. App. 1996) (standard of review for legal conclusions when reviewing new-trial rulings)
- Tangren Family Trust v. Tangren, 182 P.3d 326 (Utah 2008) (parol evidence rule limits evidence of contemporaneous statements to vary integrated contracts)
- Westmont Residential LLC v. Buttars, 340 P.3d 183 (Utah Ct. App. 2014) (requirements for proving contract modification: mutual assent, definiteness, burden on party asserting modification)
- Allstate Enters., Inc. v. Heriford, 772 P.2d 466 (Utah Ct. App. 1989) (distinguishing implied-in-law contract terms and limits on judicially supplying terms)
- Valcarce v. Fitzgerald, 961 P.2d 305 (Utah 1998) (prevailing party entitled to reasonable appellate attorney fees)