437 P.3d 539
Utah Ct. App.2018Background
- KDA sold ~40 acres secured by trust deeds; buyer defaulted and Pioneer (lender) foreclosed after litigation over lien priority.
- KDA and Pioneer executed a settlement agreement that subordinated KDA’s trust deeds to Pioneer’s and stated Pioneer was entitled to foreclose, "foreclosing out, terminating, and extinguishing" KDA’s interests.
- The agreement included a formal subordination agreement reiterating Pioneer’s priority in the pending judicial foreclosure; KDA did not expressly reserve the statutory right of redemption.
- Pioneer purchased the property at sheriff’s sale for $200,000; within 180 days KDA attempted to redeem as a subordinate lienholder by tendering $212,000, which Pioneer refused.
- KDA moved to enforce its redemption right; Pioneer moved to enforce the settlement as a waiver of redemption. The district court held KDA waived the right and awarded fees to Pioneer; KDA appealed.
Issues
| Issue | Plaintiff's Argument (KDA) | Defendant's Argument (Pioneer) | Held |
|---|---|---|---|
| Whether KDA waived statutory right of redemption by settlement | Agreement only subordinated KDA’s lien; did not clearly waive redemption | Broad language "extinguishing" KDA’s rights shows waiver of redemption | Reversed: no clear and unmistakable waiver of statutory redemption right |
| Whether waiver of statutory rights requires explicit language | Waiver must be explicit; silence cannot be inferred as waiver | Settlement language broadly terminated KDA’s interests (implied waiver) | Court: waivers of statutory rights must be "clear and unmistakable"; silence insufficient |
| Proper interpretation standard for settlement agreements | Apply contract rules; give effect to whole agreement | Same standard; Pioneer relied on plain language | Court applied ordinary contract interpretation and harmonized provisions in favor of non-waiver |
| Attorney-fee award to Pioneer as prevailing party | KDA reserved right to challenge fee award on appeal | Pioneer was prevailing below and entitled to fees under agreement | Fee award vacated on remand; court to determine prevailing party after further proceedings |
Key Cases Cited
- Bodell Constr. Co. v. Robbins, 215 P.3d 933 (Utah 2009) (settlement agreements governed by general contract rules)
- Larsen Beverage Co. v. Labor Comm’n, 250 P.3d 82 (Utah Ct. App. 2011) (will not infer waiver of statutory right from general contract language)
- Medley v. Medley, 93 P.3d 847 (Utah Ct. App. 2004) (waiver of statutory rights must be clear and unmistakable)
- Souter’s, Inc. v. Deseret Fed. Sav. & Loan Ass’n, 857 P.2d 935 (Utah 1993) (waiver requires intentional relinquishment of known right)
- G.G.A., Inc. v. Leventis, 773 P.2d 841 (Utah Ct. App. 1989) (interpret contract as a whole and harmonize provisions)