Mounteer Enters., Inc. v. Homeowners Ass'n for the Colony at White Pine Canyon
422 P.3d 809
Utah2018Background
- HOA contracted with Mounteer (2006, renewed 2010) for snow-removal; contract required $7M aggregate liability insurance (specific per-policy limits) and contained an antiwaiver clause preventing failure to inspect or identify deficiencies from being construed as waiver.
- During the 2006–2010 contract Mounteer submitted certificates reflecting only $5M aggregate coverage; HOA continued to pay.
- A new similar four-year contract was executed in 2010. Months later HOA sought to reduce Mounteer’s route; after Mounteer refused, HOA discovered the $5M coverage and terminated for breach of the insurance requirement.
- Mounteer sued for breach of contract and breach of the covenant of good faith and fair dealing, arguing HOA implicitly waived the insurance requirement by accepting certificates and paying despite noncompliance.
- District court denied HOA’s summary-judgment motion and motion in limine, instructed the jury that an antiwaiver clause can itself be waived, and a jury returned a verdict for Mounteer; HOA appealed.
Issues
| Issue | Plaintiff's Argument (Mounteer) | Defendant's Argument (HOA) | Held |
|---|---|---|---|
| Whether HOA waived the contract insurance requirement by accepting $5M certificates and making payments | Mounteer: HOA’s repeated acceptance of deficient certificates and payments amounted to implied waiver of the insurance requirement | HOA: Antiwaiver clause precludes treating failure to inspect or pay as waiver; no clear intent to relinquish rights | Court: Mere failure to enforce or inspect does not prove implied waiver of the underlying provision; HOA did not waive the insurance requirement |
| Whether an antiwaiver clause can be waived by conduct | Mounteer: Conduct (inaction) can implicitly waive even an antiwaiver clause | HOA: An antiwaiver clause requires clear, intentional relinquishment to be waived; mere inaction is consistent with the clause | Court: Antiwaiver clauses can be waived, but waiver of both the antiwaiver clause and the underlying provision requires clear, intentional conduct—mere non-enforcement insufficient |
| Whether proof of prejudice is required to prove waiver | Mounteer: (argued waiver; prejudice not central in briefing) | HOA: Even if waiver occurred, no prejudice shown | Court: Prejudice is not an element of waiver; waiver depends solely on intentional relinquishment of a known right |
| Remedy and fees: whether Mounteer was prevailing party entitled to fees | Mounteer: Verdict made it prevailing party | HOA: If verdict reversed, HOA should be prevailing party | Court: Reversed district court verdict; Mounteer not prevailing; remanded for award of fees to HOA |
Key Cases Cited
- USA Power, LLC v. PacifiCorp, 372 P.3d 629 (Utah 2016) (standard of review for judgment notwithstanding the verdict)
- Wilson v. IHC Hosps., Inc., 289 P.3d 369 (Utah 2012) (waiver requires intentional relinquishment of a known right)
- Meadow Valley Contractors, Inc. v. State Dep’t of Transp., 266 P.3d 671 (Utah 2011) (discussing implied waiver and intentional relinquishment)
- ASC Utah, Inc. v. Wolf Mountain Resorts, L.C., 245 P.3d 184 (Utah 2010) (extensive litigation participation can operate as waiver of arbitration/rights)
- Calhoun v. Universal Credit Co., 146 P.2d 284 (Utah 1944) (express waiver can waive related clauses)
- Soter’s, Inc. v. Deseret Fed. Sav. & Loan Ass’n, 857 P.2d 935 (Utah 1993) (formulation of waiver as intentional relinquishment)
- In re Estate of Flake, 71 P.3d 589 (Utah 2003) (cases referencing prejudice in waiver analysis)
- Interwest Constr. v. Palmer, 886 P.2d 92 (Utah Ct. App. 1994) (source of prejudice requirement cited in later cases)
- Lane Myers Constr., LLC v. Nat’l City Bank, 342 P.3d 749 (Utah 2014) (waiver discussion without mentioning prejudice)
- Nunley v. Westates Casing Servs., Inc., 989 P.2d 1077 (Utah 1999) (prejudice as element of estoppel, not waiver)