*1 DURHAM, Associate good friends 35 Chief Justice and his two brother defendant’s DURRANT, available, Justice Justice stand, Chief they here took the WILKINS, and Justice PARRISH concur they dispute that evidence.” did not once opinion. NEHRING’s Justice such Nelson-Waggoner presents ten Mr. each need not address them statements. per-
individually they which share features as analyzed group. as a
mit them be collectively, Individually and “paucity” state- constitute comments
State’s
ments, Mr. Nelson- comments on and not Nelson-Waggoner Mr. Waggoner’s silence. UT 28 testify, three witnesses in fact have alibi did Roger EGGETT, Jr., K. Plaintiff they actually indicated that of whom none Respondent, time of the as- knew where he point clearly entitled to sault. State was also free jury. The State CORPORATION, this out ENERGY WASATCH of defense highlight Corporation, an overall shortfall a Utah Defendant Mr. Nelson- remarks which and Petitioner. evidence. closing from the State’s
Waggoner culled No. 20010786. provide examples statements argument “naturally” or may, not which must Supreme Court of Utah. interpreted “necessarily,” April 2004. he Nelson-Waggoner because Mr. convict Thus, not find that testify. Rehearing we do Denied June 2004. not did attorney Nelson-Waggoner’s rendered Mr. choosing to not ob-
ineffective assistance toor
ject the amended information to either closing argument. during made
statements did, Nelson-Waggoner has if we Mr.
Even us with presented sufficient prong second Strickland
overcome the
test, of the trial namely, that the outcome attorney had if his have been different
would objected. Accordingly, reject we Mr. fact that his attor- contention
Nelson-Waggoner’s
ney ineffective assistance. rendered findings and affirm the decision 34 We the trial court’s court. We hold that
the trial to amend its infor- to allow the State
decision plain shortly the trial
mation before 4(d) Rules of under rule of the Utah
error Procedure, that ex- nor do we see
Criminal require circumstances in case
ceptional properly preserved to consider a claim not
us also hold that defense counsel’s
at trial. We object to amendment or not to
decision closing during made the State
comments deficient, and therefore
argument ineffective assis- to the level of
does not rise
tance.
1.95 *3 Love, City, plain- Lake Perrin R. Salt for tiff. Nelson, Olson, Eriс Lake
Merrill P. C. Salt City, for defendant.
DURHAM, Chief Justice: granted 1 We certiorari this case appeals’ the court of decision affirm- review awarding plaintiff Roger ing a final $147,559.96, Eggett, (Eggett) plus at- K. Jr. torney fees. affirm.
BACKGROUND Ener- Eggett 2 In formed Wasatch (Wasatch) Corporation to market and dis- gy later, gas. years Eggett tribute natural Two employees entered into and two Wasatch Agreement, which set forth the Shareholder each, Eggett with as the allotted to shares Agreement pro- majority shareholder. Wasatch, the left vided that if a shareholder remaining purchase could shareholders purchase departing stock. The shareholder’s depart- value of the be the book price would voluntarily left ing stock if he shareholder’s if the was termi- par value shareholder par Agreement defined nated cause. original priсe shareholder value as the stock, as the -book value paid for the multiplied by the de- company’s value interest. percentage parting shareholder’s to be determined Company book statements, audited financial prepared accordance to be which were accepted accounting principles generally with (GAAP). disputes following a series of 3 In Wasatch, resigna- Eggett tendered his
with
larg-
Eggett
At that time
remained
tion.
Wasatch, with
owner-
shareholder
est
to sell
Eggett offered
ship
of 36.5%.
interest
remaining
items,
his stock to the
shareholders for
account
book value.
would have
been included
one-year holding
value under the historical
Eggett
resignation,
After
his
tendered
(3) $45,553
period,
disputed pur-
for a
cause,
Eggett
Wasatch terminated
Thus,
maintained,
chase
contract.
gave
$1,217,
par
him a check for
company book value should have totaled
check,
When Eggett
stock.
refused the
$699,778.
argued
that the book value
Wasatch cancelled his shares
its books.
(36.5% $699,778)
of his shares
was there-
¶ Eggett brought
against Wasatch,
suit
$255,419.
fore
(1)
claiming
Employment
breach of his
(2)
Special
Question
Agreement
Wasatch,
Verdict
Number 5
breach of the
(3)
Agreement,
following:
asked the
“[W]hat was
*4
Energy
the ‘book value’ of
the covenant of
as de-
dealing.
Eggett sought
compensation
fined
Agreement?”
additional
the Shareholders
“$135,671.96.”
period
1,
response
beginning January
Wasatch for
written
1997, through
resignation
Upon receiving
response,
his effective
trial
date.
sought
questioned
He
jury
also
recover the book value of
discovered
stock, alleging
his
actually
represented
his termination for
verdict
the book value
shares,
cause was a “sham.”
Eggett’s
of
company
not the total
book
Energy. Accordingly,
value of Wasatch
trial, Eggett
6 At
testified that to deter-
the court
entered
for
shares, “you
mine the book value of his
take
$135,671.61
amount of
book
value of
company
you
[book value] of the
Eggett’s
stock, $11,888.35
of
shares
for “ad-
multiply
by my
interest,
ownership
which
$60,000
compensation,”
ditional
and over
36.5%,
so we
have to
[first]
determine
attorney
costs and
fees.
company.”
[book value
of]
audited financial statements indicated a com-
pany
$75,452,
book value of
and Wasatch
STANDARD OF REVIEW
argued
therefore
Eg-
the book value of
presents
9 Wasatch
three issues for
$75,452
gett’s
multiplied by
Eg-
shares
our review:
appeals
Whether the court of
gett’s
interest,
$27,540.
ownership
36.5%
(1)
affirming
errеd in
the trial court’s
deci
however,
Eggett,
7
claimed that Wasatch
Eggett’s
sion to admit
concerning
evidence
had manipulated its financial statements in
value; (2)
company
question
decision
bad faith to reflect
company
(3)
clarify
jury’s verdict;
award
artificially
low.
claimed
attorney
of
ground
fees
that Wasatch
Wasatch,
that after he left
management
failed to marshal the
ques
changed
policy regarding
length
its
of
tion on appeal. We
review
court of
time uncertain receivables would be held in a
appeals’
correctness,
decision for
“suspense” account.
policy, Eggett
tes-
“turns on
it accurately
whether
reviewed the
tified,
always
been to hold such receiv-
trial court’s
appropriate
decision under the
year and,
ables in a
accоunt for one
Clark,
standard of review.” Clark v.
2001
they
subject
dispute
during
¶44, 8,
UT
in company book value at the end of that 10 The court appeals applies year. Eggett testified that after depar- his abuse of discretion standard of review in ture, management changed determining prop whether a trial has Parkinson, holding period years to two erly evidence, in order to avoid admitted Gorostieta including 99, certain in company 14, 1110, receivables UT 17 P.3d as well 2000 value, thereby depressing the determining as in whether a trial court has trial, Eggett shares. At properly questioned jury was al- regarding its ver dict, present lowed to Gonzales, evidence that Jorgensen see 14 Utah 2d (1) adjusted 330, (1963) value should be to include (stating 935-36 anticipated reserve for losses on a trial prerogative” by court acted “within (2) “swap oсcurred, contract” which had not “question[ing] foreman about the verdict”); dealing, quotient not whether the trial court or chance possibility of Int’l, properly interpreted Agree- F.3d also Romano v. U-Haul see (“The Cir.2000) (1st standard of ment. determination resubmission review for a questions is for abuse dis-
special verdict generally 1113 Extrinsic evidence is cretion.”); Drilling Enron Co. v. Oil & Unit vary unambiguous admissible to terms Cir.1997) (10th Co., F.3d Gas See, e.g., Winegar a contract. v. Froerer (“[I]t discretion for was an abuse of (Utah 1991) (“A Corp., 813 P.2d clarify to ask the court to refuse if, may only consider extrinsic evidence verdict.”). does not The court of .consideration, after careful the contract lan findings trial court’s factual where review the uncertain.”). Here, ambiguous or guage is findings party challenging those fails however, Eggett argues two he filed Instead, evidence. the court marshal the separate claims—one sup- “assume that the record appeals must Agreement, another breach findings the trial court.” Moon ports the faith and fair deal ¶12, 24, Moon, App UT ing that his evidence of book value was —and omitted). (internal quotations prove admissible regardless or not claim of whether it would
ANALYSIS his for of be admissible under claim breach the Shareholder I. OF EGGETT’S ADMISSIBILITY OF COMPANY EVIDENCE implied good An BOOK VALUE dealing in every faith fair inheres con Agree- According U11 to the Shareholder See, e.g., Exploration, tract. CIG Inc. ment, value to be company book was deter- 966; State, 2001 UT 24 P.3d Malibu statements mined the audited financial ¶30, 19, Sparks, Inv. 2000 UT 996 P.2d Co. per- The in accordance with prepared GAAP. good of faith and 1043. Under the covenant financial statements indicated tinent auditеd dealing, impli fair both to a contract $75,452, and is company it book edly intentionally anything promise not to do Eggett’s of undisputed that the book value to injure party’s right to receive is the is 36.5% of whatever com- own shares of the contract. St. Benedict’s benefits arg-ues value. therefore pany book Wasatch Hosp., Dev. v. St. Co. Benedict’s $75,452, is to 36.5% of Eggett that entitled (Utah 1991). of the A violation court, however, $27,540. allowed The trial is a of contract. Id. at covenant breach showing higher company Eggett’s evidence Exch., (citing Beck v. Farmers Ins. affirmed, appeals The of book value. court (Utah 1985)). 795, 798 Extrinsic evi holding such evidence was admissible for may prove to claim dence admissible Eggett’s claim for breach of cove- under good of faith and fair breach of covenant fair good nаnt of faith and example, Olympus Hills dealing. For in court did not abuse its discretion trial Center, & Ltd. v. Smith’s Food Shopping argues admitting the evidence. Wasatch be- (Utah Ctrs., Inc., Ct.App. P.2d 445 Drug appeals erred fore court that the 1994), appeals the court of held applying an of discretion standard abuse not its in admit court had abused was one of contract review because the issue ting prove claim extrinsic evidence admissibility interpretation, one of of evi- not good faith and breach of the covenant dence. though dealing, even such evidence was vary of the lease terms admissible correctly 454, 456; see also Hill contract. standard of applied an abuse of discretion 1983) Hartog, 658 P.2d The issue before that review. (“Evidence [inadmissible] which is properly admitted the trial court whethеr if it is admissible purpose cannot be excluded Eggett’s book value his evidence of purpose.”). good another [for] of the covenant of faith claim for breach ease, present ap- good 15 In court of fair dealing in the exercise of concluded, peals agree, although we that discretion. might evidence of book value ¶ Here, Agreement ob- vary extrinsic therefore inadmissible ligated book Wasatch calculate value in Agreement, the terms of the Shareholder GAAP, however, GAAP. accordance with prove Eg- nevertheless admissible range an exact science allows a gett’s Eggett breach covenant claim. possible application. values Wasatch claimed that covenant occurred opportunity employ had the some discre- in the calculation of book value and that tion of GAAP. use There was thus an the covenant breached deliber- implied covenant to act in faith and deal ately suspense changing holding account fairly Eggett its choices. While Was- period year years, thereby from one to two compliance atch’s with GAAP was a circum- artificially yielding depressed tending stance to show Wasatch acted in Wasatch’s financial statements the sole faith, compliance such conclusive. purpose depriving Eggett compen- entitled to conclude that sation prove for his shares. In order to voluntary change two-year from a to a one- setting acted bad faith in holding period, subsequent account low, Eggett present
value too
had to
evi-
Eggett’s departure,
was a
showing
dence
the correct book value
dealing,
even
figure.
larger
some
If
had not
if
change
such a
did not
presented
value,
violate GAAP.
higher
of a
his breach of covenant claim would have
argues
18 Wasatch next
if Eg-
that even
Furthermore,
failed.
if
accept
we were to
gett alleged
breach of the covenant of
argument
could not
dealing,
and even
his evi-
present
evidence of
own
dence of
prove
book value was admissible to
solely
*6
because it differs from the finan-
claim,
request recovery
failed to
statements, parties
position
cial
in Eggett’s
Special
According
Verdict Form.
entirely
would be
vulnerable
bad faith
Wasatch,
“absolutely
it is
silent
the sub-
Anytime
calculations.
a
unambigu-
contract
ject
claim],
[of the breach of covеnant
refer-
ously pointed
separate
ato
document for a
ring only to the breach of contract claims.”
specific figure,
party
power
to cre-
document,
ate manipulate
or
even if the
¶ 19
point:
Wasatch misses the critical
faith,
manipulation
clearly
in bad
could recovery Eggett sought at trial was the dif-
act with impunity
party’s
because
other
ference
between
book value shown
his
always
evidence of a different value would
evidence and the book value set forth in
grounds
excluded on the
that it varied from Wasatch’s financial
statements.
the unambiguous contract terms.
words,
supported
the same evidence that
place
covenant
the first
recently
16
We
noted
“the
—evi-
dence
higher
proved
of a
book value —also
degree
party
may
to which a
contract
to a
damages
amount
Eggett sought
of
protections
invoke the
of the covenant turns
Moreover,
recover.
we
merit
find no
to Was-
contracting par
the extent to which the
argument
atch’s
that Eggett obtained no re-
expectations
ties have
their
defined
and im
covery at
his breach of
posed
covenant
limitations on contract terms.” Smith
claim.
Expeditions,
considered and
Canyon
Grand
2003 UT
¶ 20,
decided in the affirmative the issue of
Evеn if that were
there is no reason
not in
usual
or
form
contrary
why
jury
prescribed
could not award the balance of
to custom or
rule.”
Crowe,
($108,131.96)
Eggett’s damages
was, fact, informal then ambiguous verdict. Id. at 1189. The its 47(s) rule court could the trial stated, approvef practice “[W]e ][of] jury to the verdict or send correct direct asking jury clarify meaning to when jury again. out ambiguous the court is faced with an ver- ¶29 jury disagree ... Whether intended [the also with Was dict. $70,768.02, spo “patent plaintiff] error” receive atch’s assertion or, found, nothing, as the was at exist the face trial Jorgensen ken of must said, Jorgensen very ambiguous.” Id. at 1191. The In this court least the verdict. also or not a apparent there is some indicated whether it is “[W]here verdict, depends ambiguous is on all the cir- with the verdict patent error in connection may of call matter cumstances: the court course jury’s] direct to re- attention and them [the make district court should a fair [T]hе (emphasis add at 935 deliberate.” appraisal the whole record to discern ed). requires “patent Jorgensen error is, fact, ambiguous. verdict whether the verdict,” not “patent er connection with case, potentially misleading jury In this the verdict.” ror face susceptibili- and forms instructions cases, significant. some difference is ty interpretation to an other verdict verdict” “patent error connection by the than the one arrived at district only is “apparent” will when verdict case, court, given point the facts of the light surrounding cir considered Only ambiguity ask- verdict. cumstances, specifically the evidence offered clarify ing jury verdict could the trial. A court has discretion to con trial jury’s de- court have determined the “true determining record in wheth sider whole cision.” patent “therе some error connection er with the verdict.” case, damages present awards In the jurisdictions 30 Case law jury ambiguous and by the rendered Circuit, congruent point. The Tenth on this by simply asking clarified could have been example, has indicated that trial court questions.... a few We hold surrounding may look all the facts and it was under these circumstances an abuse to determine whether circumstances court to of discretion for refuse is informal or insufficient. verdict clarify its verdict. ask Co., Drilling v. Enron Oil & Gas Unit Co. added) (citing Reso- (emphasis Id. at 1191-92 *9 (10th Cir.1997). 1186, 1191 In F.3d Unit 1548). Trust, 998 F.2d at lution sought recovery of Drilling, plaintiff the us, $157,262.36 apparent- In it was Id. at the case before for breach of contract. patent connec- there was some error jury one verdict 1189. The returned award the $70,768.02 The number on plaintiff tion with the verdict. ing the on suggested tо the trial awarding Special Form verdict Verdict contract claim and another $86,494.30. jury the book judge that the had calculated the defendant set-off shares, company the interpreted plaintiffs Eggett’s The district value appropriate way it you book value. It was therefore for I have now asked the clarify jury’s question, $135,671.96 the trial court to decision. entitled to he is you which is a to number have come ¶33 problem apparent here was be- by some pur- calculation method for the jury figure if cause had taken the for So, chase of his shares of stock. in other ($75,452) arguing which Wasatch was words, [$]135,000, figure, a repre- $296,252 suspense added the account —but figure sentative smaller due to him which adjustments Eggett sought— the other represents X percent ais would then total larger Now, right? All I to number. want $371,704. Howеver, appeared jury it had correctly be sure that I understand that multiplied figure 36.5% to arrive at that, any you disagree and if with I want $135,671.96, Eggett’s value of shares. to know that. appeared Because it the trial court that added.) (Emphasis The trial court then case, jury this was the “ask[ed] jury asked each member whether the clarify [to] its verdict ... ] the determinef $135,671.96 verdict meant that was the book jury’s Drilling, true Unit decision.” Eggett’s shares. Each member (internal omitted). quotations F.3d at 1191 jury responded “yes.” verdict, Upon reviewing ques- ¶ By questioning jury about jury tioned the its ver- as follows: dict, verify the trial able to understand, The Court: Do I Mr. Robert- fact, was, the verdict informal and insuffi- [jury son foreperson], that the deci- jury cient because answered the sion, [5], question as I’ve read this number 47(s) wrong question. point, At that rule jury this the believes authorized the court to cоrrect the ver- paid should be shares? for the dict. only The trial court “acted not within Mr. believe Robertson: We that to be the prerogative discreetly but book value. situation,” handling Jorgensen, 383 P.2d The Court: And so- and we therefore hold that the trial Mr. Robertson: Paid the shares. court properly Special clarified Ques- Verdict tion Number 5 entered there- just The Court: me [L]et sure that on. (cid:127) I talking understand what we’re about. Is you this the think value that III. [Wasatch] ATTORNEY FEES owes purchase to Mr. Finally, argues shares? awarding trial court erred Mr. Robertson: Yes. attorney fees because counsel failed right. distinguish The Court: All Now I’m going sought the recoverable fees question you jurors ask that all those that were nonreeoverable. The you concur in court of argument, that determination. did not reach that Let me go through. uphеld attorney instead the award of fees
on ground that Wasatch failed to marshal relied the trial court Okay. going The Court: poll I’m awarding attorney fees in place. the first particularly question number 5. agree appeals. the court question, problem here’s I just explain want to it to the so that I “[Attorney fees cannot be get understanding your a clear of what recovered provided unless statute decision is. Heinz, contract.” Collier v. We know from the facts of this Ct.App.1992) case that (referring to the Utah”). Mr. Eggett If I interpret 36.5[%]. owns rule as “long-standing rule in your question present case, answer to ... Eggett brought [number 5] claims $135,000.00 [company] value[, Employment Agreement both the t]hat would mean that he would be entitled Of the two *10 $135,000.00. contracts, If I only Agreement 36.5[%] understand the Shareholder attorney Ac- CONCLUSION recovery of fees. provided brought to claims cordingly, pertaining fees ¶ appeals. affirm the court of 39 We Agreement are re- court did not abuse its coverable, claims pertaining to while fees admitting Eggett’s regarding com- Agreement Employment brought under the under his claim for breach pany attorney any In to recover not. order are dealing, the covenant of all, appor- party must prevailing fees clarifying did it its discretion nor abuse separate the recoverable fees or out tion Finally, Question 5. Special Verdict Number ones. Cotton- the nonrecoverable See attorney proper. award of fees was Sine, 266, 830 P.2d 269-70 Mall Co. v. wood 1992). NEHRING, Justice, concurring: ¶ argues Eggett 37 Wasatch that apportionment require meet ¶ failed to opinion in 40 I concur the Chief Justice’s attоrney “the fee here and therefore ment separately in an to avoid and write effort as a matter of law. must be set aside” award making fog which has impenetrable more argues appeals the court of that Wasatch long enveloped implied our rejection legal this basing erred dealing jurisprudence. I feel a faith and to marshal argument on Wasatch’s failure my duty express on this particular views require marshaling “[T]he the evidence. opinion this court’s topic to ensure that challenges of factual applies only to ment Canyon Expeditions, 2003 v. Grand Smith Peirce findings, not to conclusions law.” authored, 1154, I is not UT Peirce, 7, 17 n. P.2d 193. UT obituary implied an for the cove- misread as it chal argues that since was not nant. sufficiency support of evidence to lenging dis- 41 Both Smith this case involvе (a challenge), rather factual but the award valuation, fea- putes corporate over and each asserting permissible award that no provided the valua- tured a contract that (a legal apportionment required without was to be conducted accordance tion requirement in marshaling is challenge), the accounting principles generally accepted appeals court of erred applicable (GAAP). Smith, actions In we held that the legal chal reject it to applying parties established by the met the standards lenge to the fee award. implied cove- thus the contract and determination on this The trial court’s no nant one. It found question was a factual case, howev- bearing on matter. this seg- “made proper reasonаble er, is that Mr. we have concluded claims he regation between those to which to show that Wasatch breached entitled fees, those to an award entitled fair deal- good faith and implied covenant of an is not to such to which he entitled claims ing. finding, challenge that factual To award.” ¶42 sup- holdings, two With these must “marshal the evidence challenge to our well- then findings and confronts direct port [trial court’s] consistency pre- evidence, bring desire to despite this founded demonstrate ably dictability to As the dissent lacking support the law. findings are so trial court’s reveals, opinion vulner- weight the Chief Justice’s against the clear as to be to meet evidence, charge to the fails making clearly them errone- able thus all, express 38, 15, how challenge. After could Young Young, 1999 UT ous.” (internal omitted); valuation setting term out clear see contract quotations P.2d 338 Moon, methodology “gaps” all of the fill App 1999 UT Moon also understanding expectations of the correctly court of P.2d 431. The Smith, compli- How could evi- but not here? failed to marshal the held that Wasatch cove- extinguish implied making upon in ance with GAAP trial court relied dence the Smith, yield have endured to ap- nant in Eggett properly finding factual Eggett? Mr. attorney sizeable verdict for fees. portioned recoverable *11 204 accurate, incomplete expectations. simple, 43 A and such fiable One circumstance implied present dealing here: a
answer is that the covenant is its was course be- parties reasonably very tween the which could pliable nature a doctrine. It is inher- interprеted accept- restrict ently amorphous pre- have been and evades definitional valuing able use GAAP Wasatch. place implied cision. cove- These traits directly predictability nant odds recognized 46 We have that the course of conduct, basic char- the most and cherished contracting parties may dealings between be implied acteristic of the contracts which the determining purpose, considered inten- covenant was created to serve. com- As one tions, expectations parties. and observed, mentator “While the varieties of Moore, Brown 954 quite faith those of are not as infinite as 1998). relating history Where a of conduct faith, i’eligious quite it would be extraordi- interposed to a contract term that has been nary protean concept were used “gap party as a filler” demonstrates one same sense in all instances.” assorted provision has used contract frustrate Allan, Farnsworth, E. Good Faith expectations grounded in that Perform- historical con- ance and Un- Commercial Reasonableness duct, implied covenant of Code, der Commercial 30 U. dealing properly remedy. offers a Uniform (1968). Chi. L.Rev. record here that Wasatch establishes developed Mr. a course of con- ¶ However, unsatisfactory this answer is respect duct with to the manner in which many who share view made evident disputed booked income received implied the dissent that the can too covenant from certain customers. The selected meth- easily turn away being ally an of con- od, one-year holding рeriod a antagonist. tract law and This become accounts, GAAP, complied with advanced happens when courts mishandle the subtle legitimate interests, business important invoking distinction between implications with it carried for the valuation implied compel contracting a company. of the Wasatch’s shift to a two- “agreed party to honor purpose” common year holding period explanation a defied as “justified expectations” party of another legitimate clearly business decision and was contract, to the Restatement Second Con- targeted at depressing company’s (1979), § injecting tracts 205 cmt. a Eggett’s compensation. and Mr. Such a flaw new, independent rights “establish duties filling” in “gap contract term should not agreed upon parties” “nullify or to law, beyоnd the reach of the and the court of right granted by a contract of the to one and Chief Durham Justice Nordstrom, parties.” Brehany implied ratified covenant of (Utah 1991). dealing as appropriate legal tool can reduce the risk that remedy the defect. will their contract remake and award ¶ 47 Justice PARRISH concurs the con- party one “benefits which it not bar- did opinion curring of Justice NEHRING. gain,” (quoting see States United infra rel. Coop., ex Norbeck v. Basin Elec. Power WILKINS, Justice, concurring part, (8th Cir.2001)) by bargain- F.3d dissenting part: ing for terms that limit the of un- exercise ¶48 III, I concur in section and dissent party fettered discretion or that oth- I majority opin- from sections and II of the clearly erwise purposes articulate the ion. I would appeals’ reverse the court of expectations shоrt, parties. of the affirmance of the trial court’s award parties to a contract are best when served value for his they Still, fill gaps. their own the use of a shares in Wasatch. filler, gap Smith, like GAAP here and in ipso law, extinguish implied does 49 As a matter of claim for facto may covenant. implied Circumstances exist carefully cause premised even drawn limitations on faith and fair cannot discretionary performance justi- adjusted to confound measure of *12 Eighth the The parties agreed that Id. at 795. Circuit reversed a because Wasatch of the district court’s portion value would be determined company’s book implied granted for a breach of the covenant fi- audited company’s to the with reference dealing, noting that good faith and fair statements, preparеd in accordance nancial everflowing ‘an imply covenant “does cor- agreed that parties further with The GAAP. ” duties,’ legal nucopia of wished-for and “binding and conclusive would impose general requirement “does not for a no claim upon parties.” Because party reasonably[;][r]ather, act cove- the covenant gap acts as a to deal with circum- nant filler choices, be based Wasatch’s dealing could by contemplated at stances GAAP, the choices long so as those satisfied (internal contracting.” Id. at 796 the time of a claim prove such of evidence admission omitted). that ap- The court noted citations resolution, section such a Given error. implied plying covenant would necessi- of the trial court’s clarification II’s discussion rеwriting give party one tate contract unnecessary. jury’s verdict is of the bargain.” for which it did not Id. “benefits Canyon Recently, in Smith v. Grand majority The in this case at 797-98. would Co., ¶ 22, Expeditions UT Eggett. do the same covenant of we noted ought The covenant not to be used to covenant implied is an faith and fair against merely damages be- assess “[wjhere express apply ... that will allowed it cause it made certain choices un- defines limits discretion contract term der The application ary Although its performance.” scope Agreement defines the by agreement governed GAAP buy/sell to a regard to responsibility with Wasatch’s new, previously recognized has this court agreement company. value of the Nordstrom, Brehany principle. company’s that the audited financial provides 1991), Inc., оb we statement, comports long so as it with implied served GAAP, binding measure of will be the dealing “cannot be construed party argued that Was- value. Neither new, rights or independent to establish audited financial statement was not atch’s upon by parties.” agreed duties not Thus, prepared accordance GAAP. is demonstrat application this rule Proper bargained-for contract defines limits Nor ex rel. by ed the case of United States determining Coop., 248 F.3d value, Elec. Power beck v. Basin its discretion and Wasatch exercised (8th Cir.2001), Eighth Cir by parties. Evi- wherein the limits set within law, cuit, con indicates that presented federal common applying dence holding period accounts was application implied of the fronted with years bring changed from one to two dealing to a industry in line with the standard. by part defined GAAP. contract term advo- suggested Other at 794-97. departure. change before cated Electric, dispute be- In Basin is, gap filled quite simply, no There Basin’s parties revolved around tween the good faith and fair implied covenant of ten-year over a of certain costs amortization ought not to deviate dealing. This court period used period twenty-year instead clearly expressed intention parties’ party. it was a contracts other require based valuation to allow years The amortization over ten Id. at 794. GAAP. party twenty resulted in the instead of Chief Justice DURRANT 53 Associate paying $3.6 contract an additional dissenting concurring concurs Id. at 794-95. under the contract. million WILKINS. opinion of Justice specific mandated amortiza- contract no governed tion instead provision, System of Rural
GAAP and Utilities Service rules, were violat- neither of which
Accounts period. choosing
ed a shorter amortization