Thomas v. Mattena
397 P.3d 856
Utah Ct. App.2017Background
- Afton B. Thomas, trustee of several trusts, loaned $300,000 from the trust to Bad Lands Bow Hunters LLC (Bad Lands) for building improvements and startup costs; disbursement checks were made payable to Bad Lands.
- Jody and George Mattena (the Mattenas) are individual members/owners of Bad Lands; they signed a promissory note whose language the district court found ambiguous regarding individual liability.
- Thomas sued Bad Lands and the Mattenas for unpaid loan and lease payments. The district court held the Mattenas personally liable on the lease but held only Bad Lands liable on the promissory note, finding no meeting of the minds on personal liability for the loan.
- On appeal Thomas argued that absence of agreement on personal liability meant no enforceable loan contract existed.
- The Court of Appeals concluded Thomas did not preserve that specific contract-formation argument in the trial court, so review is limited to plain-error, and found no settled law making personal-liability clauses an essential term of a business-loan contract.
- The court affirmed: the note was enforceable against Bad Lands but not the Mattenas individually.
Issues
| Issue | Plaintiff's Argument (Thomas) | Defendant's Argument (Mattenas/Bad Lands) | Held |
|---|---|---|---|
| Whether absence of agreed personal-liability term prevents formation/enforceability of the loan contract | Lack of meeting of minds on personal liability means no contract for the loan existed | The parties formed an enforceable loan with Bad Lands as obligor; omission of personal-liability term does not void the contract | Court: Not preserved below; and on plain-error review, no settled law that personal-liability is an essential term, so no relief granted |
| Whether the promissory note binds the Mattenas personally | Thomas: she believed Mattenas would be personally liable and argues they should be bound | Mattenas: note and checks show loan to Bad Lands only; they did not agree to personal liability | Court: District court did not plainly err — note enforceable against Bad Lands but not the Mattenas individually |
| Preservation of appellate issue (failure to raise contract-formation argument below) | Thomas: contends trial-court findings preserved the issue for appeal | Mattenas: Thomas did not present the legal theory (no contract due to missing personal-liability term) at trial | Held: Issue not preserved; Thomas failed to present that legal basis to the district court |
| Applicability of plain-error review | Thomas: asks Court to review unpreserved claim under plain-error doctrine | Mattenas: no obvious error; no settled law that omission of personal-liability clause is fatal | Held: Plain-error relief denied — appellant must show a legal rule so clear error should have been obvious; no such settled law exists |
Key Cases Cited
- Nielsen v. Gold’s Gym, 78 P.3d 600 (Utah 2003) (meeting of the minds is required and a contract may fail if essential terms are too uncertain)
- Cessna Fin. Corp. v. Meyer, 575 P.2d 1048 (Utah 1978) (omission of a non-specified term does not necessarily invalidate a contractual provision or the contract)