480 P.3d 1075
Utah Ct. App.2020Background:
- In 2015 R4 Constructors contracted to build a yoga studio for InBalance; disputes arose and InBalance stopped paying while alleging construction defects.
- R4 completed work, secured a certificate of occupancy, and sued for unpaid contract amounts; InBalance counterclaimed for defective work and asserted multiple defenses but did not plead lack of licensure in its answer.
- During discovery R4 asked for a detailed computation of InBalance’s damages; InBalance replied with a bare figure ($185,723.79) referencing costs but provided no detailed calculation or expert disclosure.
- The deadline to designate experts passed without InBalance naming any; its late motion to extend and to permit an expert was denied by the district court (hearing transcript not included on appeal).
- R4 moved for summary judgment (arguing InBalance lacked expert proof and damages); InBalance cross-moved to dismiss R4’s claims under Utah Code § 58-55-604 (contractor licensure). The district court granted R4’s motion, dismissed InBalance’s counterclaims, denied InBalance’s cross-motion, and awarded fees to R4.
- On appeal the court affirmed denial of the expert-extension motion and affirmed dismissal of InBalance’s breach counterclaim for lack of damages proof, but vacated the judgment for R4 on its affirmative claims (licensure issue) and remanded to decide whether any common-law exception permits R4 to recover despite initial lack of licensure.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| 1. Did the district court abuse its discretion in denying InBalance’s late motion to extend the expert-disclosure deadline? | InBalance: excusable neglect under Utah R. Civ. P. 6(b)(1)(B); denial unsupported by findings. | R4: district court acted within discretion; appellant failed to provide hearing transcript. | Affirmed: appellant failed to include hearing transcript; appellate court presumes regularity and cannot find abuse of discretion. |
| 2. Is noncompliance with Utah Code § 58-55-604 (licensure) a waivable affirmative defense or an element of the claimant’s cause of action that must be alleged and proved? | InBalance: § 58-55-604 deprives an unlicensed claimant of capacity to sue or is a waivable defense; thus R4 waived it by not pleading lack of licensure. | R4: licensure is an affirmative defense and was waived when InBalance did not plead it in its answer. | Held: § 58-55-604 creates a pleading and proof requirement (part of the cause of action), not a waivable affirmative defense; district court erred treating it as waived. Vacated judgment for R4 on affirmative claims and remanded to consider common-law exceptions. |
| 3. Was summary judgment for R4 on InBalance’s counterclaim proper because InBalance failed to disclose a computation of damages and designate an expert? | InBalance: it provided sufficient evidence and documents to avoid summary judgment; Schnabel’s declaration showed damages. | R4: InBalance offered only a bare damages number and no admissible evidence tying damages to breaches; thus no genuine issue of material fact on causation/damages. | Affirmed: InBalance failed to present admissible evidence tying damages to breaches (no specific documents or expert testimony cited); R4 entitled to SJ on InBalance’s breach claim. |
| 4. Are appellate attorney fees owed to InBalance? | InBalance sought fees on appeal as prevailing party. | R4 asserted it was prevailing below and entitled to fees under the contract. | Denied: because part of the district court’s judgment was vacated and no prevailing party exists after remand; district court’s fee award vacated. |
Key Cases Cited
- Lignell v. Berg, 593 P.2d 800 (Utah 1979) (discusses licensure/nonrecovery rule and remedies)
- Olsen v. Reese, 200 P.2d 733 (Utah 1948) (plaintiff must allege and prove contractor licensure to state a cause of action)
- George v. Oren Ltd. & Assocs., 672 P.2d 732 (Utah 1983) (dismissal/remand where plaintiff was not licensed)
- Pacific Chromalox Div. v. Irey, 787 P.2d 1319 (Utah Ct. App. 1990) (statutory nonrecovery interpreted alongside common-law exceptions)
- A.K. & R. Whipple Plumbing & Heating v. Aspen Constr., 977 P.2d 518 (Utah Ct. App. 1999) (statutory bar does not preclude common-law exceptions)
- American Rural Cellular, Inc. v. Systems Commc'n Corp., 890 P.2d 1035 (Utah Ct. App. 1995) (discussion of exceptions to nonrecovery)
- Salo v. Tyler, 417 P.3d 581 (Utah 2018) (summary judgment burden-shifting where nonmoving party bears the burden of proof)