437 P.3d 576
Utah Ct. App.2018Background
- Al and Martha Syme signed a written Agreement with Symphony Group LLC (June 1, 2015) for construction of a custom home; some design details were to be selected later at scheduled meetings.
- Symes paid $2,000 earnest money and a $48,000 construction deposit; the Agreement also referenced a $43,000 construction deposit in one provision.
- The Agreement required the Symes to obtain written loan pre-approval within 10 days of Symphony’s acceptance or by the Color Selection Meeting (a meeting Symphony could request); failure to provide pre-approval could permit Symphony to terminate and retain deposits.
- The Color Selection Meeting never occurred; before construction or meetings proceeded, the Symes’ counsel sent a cancellation letter. Symes conceded forfeiture of the $2,000 earnest money but demanded return of the construction deposit.
- Symphony retained both deposits and moved for summary judgment; the district court granted summary judgment for Symphony on declaratory relief, breach of contract (finding Symes breached by not providing pre-approval), and implied covenant/unconscionability (Symes had no expert testimony).
- On appeal, the Utah Court of Appeals affirmed enforcement of the Agreement and affirmed dismissal of the implied covenant claim, but reversed summary judgment on the breach-of-contract claim and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the written Agreement was enforceable or too indefinite | Symes: Agreement lacked essential terms (many selections left open) so no enforceable contract | Symphony: Agreement sets essential terms (price, address, process) and is enforceable | Court: Enforceable — essential terms present; future selections do not defeat enforceability |
| Whether parties intended the Agreement to be final | Symes: Parties intended further documents/meetings to finalize contract | Symphony: Parties agreed to essential obligations and remedies in the Agreement | Court: Intent to be bound is shown; anticipation of future selections does not show lack of finality |
| Whether alleged ambiguities (construction deadlines) render Agreement unenforceable | Symes: Conflicting deadlines (180 days from excavation vs. 8 months from permit) create ambiguity requiring factual development | Symphony: Provisions can be harmonized; no material ambiguity undermining contract | Court: Provisions harmonizable; even if ambiguous, that would concern that term only and not invalidate entire Agreement |
| Whether Symes breached by failing to provide loan pre-approval such that Symphony could retain construction deposit | Symes: Color Selection Meeting never occurred (Symphony failed to follow through), so deadline to deliver pre-approval never arrived — Symes did not breach | Symphony: Symes failed to timely provide pre-approval under Agreement and thus breached | Court: Reversed summary judgment for Symphony on breach issue — viewing facts in Symes’ favor, dispute exists whether Symphony’s failure to hold the meeting excused Symes’ performance; remand for further proceedings |
| Whether the liquidated damages clause is unconscionable and requires remand | Symes: Clause unconscionable; unconscionability inappropriate to decide on summary judgment and does not require expert | Symphony: Determination of substantive unconscionability requires expert proof of local mores and business practices; Symes had no expert | Court: Symes failed to adequately brief/argue on appeal; district court did not err in dismissing implied covenant claim given Symes’ stipulation precluding expert testimony |
Key Cases Cited
- Ockey v. Club Jam, 328 P.3d 880 (Utah Ct. App. 2014) (summary-judgment fact-viewing standard and procedural context)
- ACC Capital Corp. v. Ace West Foam Inc., 420 P.3d 44 (Utah Ct. App. 2018) (contract enforceability where parties agreed on essential terms)
- Nielsen v. Gold’s Gym, 78 P.3d 600 (Utah 2003) (indefiniteness doctrine — essential terms must permit enforcement)
- Cea v. Hoffman, 276 P.3d 1178 (Utah Ct. App. 2012) (whether a contract exists is ordinarily a question of law)
- Bair v. Axiom Design, LLC, 20 P.3d 388 (Utah 2001) (elements of breach of contract claim include plaintiff’s performance)
- ZB, NA v. Crapo, 394 P.3d 338 (Utah 2017) (appellate review of summary judgment and viewing inferences for nonmoving party)
- Commercial Real Estate Inv., LC v. Comcast of Utah II, Inc., 285 P.3d 1193 (Utah 2012) (substantive unconscionability of liquidated-damages clauses requires evidence of local mores/business practices)
- Daines v. Vincent, 190 P.3d 1269 (Utah 2008) (definition of contract ambiguity and interpretive rules)
- Gillmor v. Macey, 121 P.3d 57 (Utah Ct. App. 2005) (harmonizing contract provisions and interpreting the agreement as a whole)
- Barker v. Francis, 741 P.2d 548 (Utah Ct. App. 1987) (party intent and sufficiency of essential contract elements)
- Leopold v. Kimball Hill Homes Fla., Inc., 842 So.2d 133 (Fla. Dist. Ct. App. 2003) (custom-home contracts enforceable despite selection of details post-signing)