Wm. Douglas Horne Family Revocable Trust v. Wardley/McLachlan Development, LLC
304 P.3d 99
Utah Ct. App.2013Background
- The Trust and Wardley Parties entered into a March 2003 settlement: Wardleys would pay 1.8 million over six years with no interest for three years, then interest at the prime rate and 18% late charges; the agreement included a prevailing-party attorney fees clause.
- Wardley Parties were jointly and severally liable for the amounts due under the Agreement.
- In early 2010 Wardley Parties paid 473,422.96 as a purported final payoff, believing it settled the obligation and indicating the note should be marked paid in full once cleared.
- Trust confirmed receipt and indicated that, if the payment remained good, the Wardleys’ personal guarantees would cease to apply; no dispute that the check cleared and the payment was received.
- Eight months after receipt, Trust discovered an accounting error: it had double-recorded a 2009 payment, understating the final payoff by about 132,011.57; Wardleys refused to pay the shortfall.
- In 2011 the Trust sued for breach; Wardleys defended on grounds of payment and accord and satisfaction; the district court granted summary judgment for Wardleys and denied attorney-fee recovery to the Trust; on appeal, the appellate court affirmed in part and reversed/remanded in part.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether final tender/acceptance constituted payment or accord and satisfaction | Trust argues no accord; payment theory or mistake characters only under the contract. | Wardley contends either valid final payment (payment theory) or accord and satisfaction as alternative. | The court upheld summary judgment on the payment ground; accord and satisfaction also appeared as an alternative theory but was not dispositive since the payment ground was unchallenged. |
| Whether accord and satisfaction could govern the outcome where amount disputes exist | Trust challenges accord and satisfaction as basis; no bona fide dispute over amount exists. | Wardley argues there was a bona fide dispute and thus accord and satisfaction applied. | Court acknowledged accord and satisfaction as an alternative theory but concluded the district court conflated theories; no reversible error on the accord ground given the payment basis remained valid. |
| Whether Wardley Parties are prevailing party entitled to attorney fees under the Agreement | Trust contends no fee provision applies because only accord and satisfaction was granted. | Wardley asserts they prevailed on enforcement of the Agreement and on appeal, so fees are recoverable. | Wardley Parties are prevailing party and entitled to reasonable attorney fees under the Agreement; remanded for fee calculation. |
| Scope of attorney fees on appeal | Trust argues no fees for the appellate proceedings should be awarded. | Wardley seeks fees incurred in district court and on appeal under the contract. | Fees awarded on appeal as prevailing party, with remand for computation of reasonable fees. |
Key Cases Cited
- Hillcrest Inv. Co. v. Utah Dep’t of Transp., 287 P.3d 427 (Utah 2012) (summary judgment standard and de novo review)
- Salt Lake Cnty. v. Butler, Crockett & Walsh Dev. Corp., 297 P.3d 38 (Utah App. 2013) (appeal of independent grounds in summary judgment)
- Republic Outdoor Adver., LC v. Utah Dep’t of Transp., 258 P.3d 619 (Utah App. 2011) (alternate grounds in summary judgment context)
- Cantamar, LLC v. Champagne, 142 P.3d 140 (Utah App. 2006) (mutual mistake and accord/settlement considerations)
- England v. Horbach, 944 P.2d 340 (Utah 1997) (no accord and satisfaction where no bona fide dispute exists)
- Golden Key Realty, Inc. v. Mantas, 699 P.2d 730 (Utah 1985) (consideration in accord and satisfaction when dispute exists)
- Dishinger v. Potter, 47 P.3d 76 (Utah App. 2001) (precedent on attorney fees under contracts and accords)
- Cea v. Hoffman, 276 P.3d 1178 (Utah App. 2012) (contract formation elements and consideration)
- Gilbert Dev. Corp. v. Wardley Corp., 246 P.3d 131 (Utah App. 2010) (prevailing party fees in contract actions)
- Jones v. Riche, 216 P.3d 357 (Utah App. 2009) (attorney fee provisions and contract enforcement)