Watkins v. Ford
2013 UT 31
Utah2013Background
- Watkins and Henry Day Ford entered two Motor Vehicle Sales Contracts on March 4, 2002 for the so‑called '1st GT40' and '2nd GT40,' each with a $1,000 deposit, contingent on Ford allocating GT40s to Henry Day.
- MSRP was added to the contracts after initial execution, and both parties understood the subject vehicles were the production version of Ford's concept car.
- Ford later allocated GTs to Henry Day following Ford awards; Henry Day refunded Watkins’s deposits on December 31, 2002 after learning Henry Day would not receive contracted vehicles unless allocation occurred.
- Watkins deposited the refunds and began seeking other dealers to preorder GTs; Ford renamed the production car from GT40 to GT.
- District court found the contracts unambiguous and not applicable and also found abandonment by both sides, awarding Henry Day fees; the court of appeals reversed on these points, prompting certiorari.
- Supreme Court holds latent ambiguity does not excuse performance, finds Henry Day abandoned, remands for Watkins’ abandonment and damages mitigation findings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Latent ambiguity excuses performance? | Watkins argues latent ambiguity affects obligations. | Henry Day argues strict interpretation; ambiguity is immaterial. | Latent ambiguity does not excuse performance. |
| Did Henry Day abandon the contracts? | Watkins contends no abandonment by Henry Day. | Henry Day argues it abandoned by refunding deposits and statements. | Henry Day abandoned the Vehicle Contracts. |
| Did Watkins abandon the contracts? | Watkins argues he did not abandon rights; his actions may be acquiescence depending on letter interpretation. | Henry Day contends Watkins’ actions were inconsistent with the contracts. | Remand for further factual findings on Watkins's understanding and potential abandonment. |
| Mitigation of damages | If no abandonment, Watkins must mitigate damages; record insufficient. | Judicial determination required on damages after abandonment/mitigation questions. | Remand to determine Watkins's mitigation of damages. |
Key Cases Cited
- Wallace v. Build, Inc., 402 P.2d 699 (Utah 1965) (abandonment shown by unequivocal acts and acquiescence)
- Parduhn v. Bennett, 2002 UT 93 (Utah) (mutual assent or conduct may constitute abandonment; abandonment based on all circumstances)
- Soter’s, Inc. v. Deseret Federal Savings & Loan Ass’n, 857 P.2d 935 (Utah 1993) (waiver is the intentional relinquishment of a known right)
- Tangren Family Trust v. Tangren, 182 P.3d 326 (Utah 2008) (parol evidence may illuminate ambiguity when contract is integrated)
- Ward v. Intermountain Farmers Ass’n, 907 P.2d 264 (Utah 1995) (contract interpretation and extrinsic evidence considerations)
- Daines v. Vincent, 2008 UT 51 (Utah) (contract interpretation and the role of extrinsic evidence)