HI-COUNTRY ESTATES HOMEOWNERS ASSOCIATION, a Utah corporation, Plaintiff, v. BAGLEY & COMPANY, et al., Defendants. Foothills Water Company, a Utah corporation; J. Rodney Dansie; Dansie Family Trust; Richard P. Dansie; Joyce M. Taylor; and Bonnie R. Parkin, Counterclaimants and Appellants, v. Hi-Country Estates Homeowners Association, a Utah corporation, Counterclaim Defendant and Appellee.
No. 20090433-CA
Court of Appeals of Utah
July 29, 2011
2011 UT App 252
J. Thomas Bowen, Midvale, for Appellants. J. Craig Smith, Matthew E. Jensen, and Jeffry R. Gittins, Salt Lake City, for Appellee. Before Judges DAVIS, ORME, and VOROS.
AMENDED MEMORANDUM DECISION1
VOROS, Judge:
¶1 This appeal represents the latest episode in a course of litigation spanning a
¶2 The trial court entered an omnibus order somewhat optimistically titled Final Judgment. See id. ¶ 6. First, the court ruled that the Well Lease was an enforceable contract, neither void as against public policy nor unconscionable. See id. Second, the trial court denied the Dansies’ breach of contract claims. See id. In the context of these claims, the trial court ruled that, pursuant to a 1986 order of the Public Service Commission (PSC), the Dansies were entitled to receive water under the Well Lease only upon payment of their pro rata share of fees and costs and not, as stated in the Well Lease itself, “at no cost.” See id. Because the Dansies had refused to pay these fees, the trial court ruled that the Association had not breached its obligation under the Well Lease. See id. In addition, the trial court found no evidentiary basis for the Dansies’ claim of damages in the form of an orchard withering, loss of landscaping, and loss of property value. See id. ¶ 17. Third, the trial court awarded the Dansies judgment in the sum of $16,334.99 as reimbursement for improvements to the water system. See id. ¶ 6. Finally, the trial court denied the Dansies’ claim for attorney fees. See id.
¶3 The Dansies appealed. We affirmed the trial court‘s order that the Well Lease was not void as against public policy. See id. ¶ 13. In doing so, we stated in a footnote that, because the PSC no longer exercised jurisdiction over the Association, “we now interpret the Dansies’ rights and obligations under the Well Lease according to its plain language.” Id. ¶ 12 n. 2. We also affirmed the trial court‘s order that the Well Lease was not unconscionable. See id. ¶ 15. And we affirmed the trial court‘s denial of the Dansies’ breach of contract claims relating to the severing of the water systems. See id. ¶ 16. We did so under the rules of appellate procedure, holding that in challenging on appeal the trial court‘s factual findings on damages, the Dansies had failed to marshal the evidence as required by
¶4 After remittitur, the Dansies filed a motion with the trial court to modify the Final Judgment to conform to footnote 2 of our opinion as they understood it. The Association resisted the motion, and the trial court denied it. The Dansies appeal. We conclude that our 2008 opinion appropriately resolved the issues before us under relevant principles of appellate review. Furthermore, the trial court properly read our opinion as a complete affirmance.
¶5 “The mandate rule dictates that pronouncements of an appellate court on legal issues in a case become the law of the case and must be followed in subsequent proceedings of that case. The mandate rule . . . binds both the district court and the parties to honor the mandate of the appellate court.” Utah Dep‘t of Transp. v. Ivers, 2009 UT 56, ¶ 12, 218 P.3d 588 (omission in original) (citation and internal quotation marks omitted). “The lower court must implement both the letter and the spirit of the mandate, taking into account the appellate court‘s opinion and the circumstances it embraces.” Id. (internal quotation marks omitted).
¶6 For reasons we explain below, we do not believe the language in footnote two of our opinion conflicts with our ultimate
¶7 Mandate rule aside, we do not read our 2008 opinion as a partial reversal. Footnote two appears in section I of the opinion. We there rejected the Association‘s claim that the Well Lease‘s “provisions for free water and water connections” are void as against public policy. We explained in footnote two that, because the 1986 order of the PSC was no longer in effect, we would interpret the Well Lease “according to its plain language.” Id. ¶ 12 n. 2. We thus clarified that the precise question we were treating was whether the Well Lease as written—not as superseded by PSC directives—was contrary to public policy. We concluded that it was not. See id. ¶¶ 12-13. A contrary ruling—that the Well Lease as written was unenforceable because it was unconscionable or against public policy—would have barred all the Dansies’ past and future breach of contract claims. Our determination that the Well Lease did not offend public policy left unresolved the question of breach of contract.
¶8 We resolved the breach of contract claim in section III. See id. ¶ 16. We noted there that the trial court had addressed both breach and damages.2 We first summarized the trial court‘s ruling with respect to breach; in so doing, we noted that “[i]n dismissing the claims, the trial court relied on the 1986 PSC order.” Id. We then summarized the trial court‘s ruling with respect to damages, noting that the trial court had “determined that the Dansies had failed to prove damages proximately caused by the alleged breach.” Id. We resolved this issue on the element of damages, “affirm[ing] the dismissal of the breach of contract claims based on this failure to prove damages.” Id. We properly did so on the ground that the Dansies had not “adequately marshal[ed] the evidence.” Id. ¶ 20. Resolving the claim on the element of damages made it unnecessary for us to address whether a breach of the contract had been otherwise established. See id. ¶ 20.
¶9 Our 2008 opinion thus resolved all outstanding issues in favor of the trial court‘s order. It explicitly resolved all issues enumerated in the concluding paragraph. See id. ¶ 24. Any remaining challenges to the trial court‘s order, whether or not we addressed them on the merits, were also necessarily resolved in favor of the trial court‘s order. See Piacitelli v. Southern Utah State Coll., 636 P.2d 1063, 1065 (Utah 1981) (noting that a final order, “unless reversed on appeal, is res judicata and binding upon [the] parties“). Finally, any challenges to prior trial court rulings that the parties might have
¶10 The opinion made no attempt to resolve future issues that might arise between the parties, including future claims of damages against the Association for future breaches of the Well Lease. The opinion did establish that, so long as the PSC does not exercise jurisdiction over the water system, the rights of the parties are as set forth by the plain language of the Well Lease. The Association contends that this can never happen, because as soon as it delivers a drop of water to the Dansies at no cost as required by the Well Lease, the PSC will exercise jurisdiction and require payment. Perhaps the Association is correct.4 But none of us can foretell the future—statutes can be amended; regulations can be repealed; administrative policies and attitudes can change. Thus, our opinion wisely hazarded no guess as to whether the PSC could or would exert jurisdiction in the future, and thus made no effort to adjudicate the rights of the parties or the enforceability of the Well Lease going forward.
¶11 In sum, our 2008 opinion properly and consistently resolved all issues before us on appeal. Moreover, we see no error in the trial court‘s refusal to modify the Final Judgment after remittitur and therefore affirm its disposition.
ON PETITION FOR REHEARING
¶12 The Dansies have petitioned for rehearing, claiming that our decision is confusing because it “does not provide guidance concerning the viability of ¶ 3 of the Final Judgment which requires the Dansies to pay the pro rata costs for the delivery of the water.” We take this opportunity to resolve any such confusion.
¶13 In our 2008 opinion, we took pains in footnote 2 to explain that this payment obligation was a result of PSC regulation and that, with the termination of PSC jurisdiction over the water system, the Dansies’ “rights and obligations under the Well Lease” would be determined “according to its plain language.” Hi-Country Estates Homeowners Ass‘n v. Bagley & Co., 2008 UT App 105, ¶ 12 n. 2, 182 P.3d 417, cert. denied, 199 P.3d 970 (Utah 2008). We then quoted the provision of the Well Lease providing the Dansies with a certain number of free hook-ups and a certain amount of free water. And in the foregoing Amended Memorandum Decision we reiterated that, “so long as the PSC does not exercise jurisdiction over the water system, the rights of the parties are as set forth by the plain language of the Well Lease.” See supra ¶ 10. We expressed no opinion on the Association‘s contention that, in the future, the Dansies could never enjoy free hook-ups and free water under the Well Lease because the PSC would necessarily re-exert jurisdiction and prevent it. Rather, we noted that “statutes can be amended; regulations can be repealed; administrative policies and attitudes can change.” Id.
¶14 Thus, our affirmance of paragraph 3 of the Final Judgment must be understood as being limited to its historical context and not as “adjudicat[ing] the rights of the parties or the enforceability of the Well Lease going forward.” To be clear, the effect of the Final Judgment, as affirmed and explained in our 2008 opinion and in the above Amended Memorandum Decision, is that the Dansies are, going forward, entitled to their
¶15 I CONCUR: GREGORY K. ORME, Judge.
VOROS, Judge
HI-COUNTRY ESTATES HOMEOWNERS ASSOCIATION, a Utah corporation, Plaintiff, v. BAGLEY & COMPANY, et al., Defendants. Foothills Water Company, a Utah corporation; J. Rodney Dansie; Dansie Family Trust; Richard P. Dansie; Joyce M. Taylor; and Bonnie R. Parkin, Counterclaimants and Appellants, v. Hi-Country Estates Homeowners Association, a Utah corporation, Counterclaim Defendant and Appellee.
No. 20090433-CA
Court of Appeals of Utah
July 29, 2011
¶16 The lead opinion recognizes the rule that a trial court is constrained to implement the spirit, and not only the letter, of our prior mandate. See supra ¶ 5 (citing Utah Dep‘t of Transp. v. Ivers, 2009 UT 56, ¶ 12, 218 P.3d 588). However, in assessing whether the trial court correctly implemented our prior mandate, the lead opinion does exactly the opposite, essentially focusing only on form and not on substance. This elevation of form over substance results in an outcome contrary to that intended in our prior opinion and is manifestly unjust. I therefore do not join the lead opinion and must dissent.
¶17 First, the lead opinion takes the “affirm on all issues” language out of context in order to support its argument that we were affirming on all issues that were pending before the trial court. Although the concluding sentence of our prior opinion read, “We therefore affirm the trial court on all issues,” Hi-Country Estates Homeowners Ass‘n v. Bagley & Co., 2008 UT App 105, ¶ 24, 182 P.3d 417, the lead opinion fails to consider the phrase in context to determine what the “therefore” referenced. See supra ¶¶ 3, 6. When considering our prior opinion as a whole, it is clear that the “affirm on all issues” phrase was more limited than the lead opinion suggests. The paragraph in which the language occurs set forth four issues on which we affirmed the trial court. Then we summed up, quite unnecessarily, “We therefore affirm the trial court on all issues.” Hi-Country Estates, 2008 UT App 105, ¶ 24, 182 P.3d 417 (emphasis added). Thus, the “affirm on all issues” language refers only to our affirmance on each of the four issues that we had set forth in the previous sentences.1
¶18 Second, there seems to be some confusion regarding the breach of contract claims that were the subject of the prior appeal. The breach of contract claims included a cause of action based on the alleged breach caused by the Association separating the water systems, which requested relief in the form of damages, and a cause of action based on the Association‘s alleged breach resulting from its continuing refusal to provide free water and hook-ups, which requested relief in the form of specific performance. The section of our prior opinion entitled “Breach of the Well Lease” and the corresponding affirmance in our concluding paragraph addressed only the former—the claims for damages resulting from the 1994 separation of the water systems. See id. ¶ 16 (stating that the Dansies’ breach of contract claims “were based on the Association severing the two water systems“); id. ¶ 17 (noting that the trial court had dismissed the contract claims because the Dansies “failed to prove any damages proximately caused by the separation of the two water systems“); id. ¶ 20 (affirming dismissal of breach of contract claims based on “failure to prove damages proximately caused by the alleged breach“); id. ¶ 24 (concluding that we affirmed the breach of contract claims because “the Dansies did not prove damages proximately caused by the separation of the water systems“). And we emphasized that when addressing such breach of contract claims, reliance on the 1986 PSC Order was appropriate because “the PSC did have jurisdiction over the Association at the time the alleged breach occurred,” that is, the 1994 severance of the water systems. Id. ¶ 16. However, neither this section of our opinion nor the restated affirmance on this issue in our con
¶19 Instead, the only portion of our prior opinion that addressed the breach of contract claims requesting specific performance was footnote 2, which stated as follows:
In addressing the breach of contract claims, the trial court determined that the Association was required to provide the water “only upon payment of [the Dansies‘] pro rata share of the Association‘s cost for power, chlorination, and water testing,” and that the Association was required to provide the water connections “only if [the Dansies] pa[id] the Association for those connections at the Association‘s usual charge for such connection.” The court reasoned that such payment by the Dansies was required because “[t]he 1986 PSC Order prohibits the Well Lease from affecting the rates paid by . . . the association members.”
On February 5, 1996, the PSC revoked the status of the water system as a public utility. Therefore, from that point forward, the PSC did not have jurisdiction over the water system and the 1986 PSC order was no longer binding. Thus, we now interpret the Dansies’ rights and obligations under the Well Lease according to its plain language, which, as amended, states: “Dansie shall have the right to receive up to five (5) residential hook-ups on to the water system on the Dansie property for members of his immediate family without any payment of hook-up fees and shall further have the right to receive up to 12 million (12,000,000) gallons of water per year from the combined water system at no cost for culinary and yard irrigation use. . . .” The Well Lease also provides: “Dansie shall further have the right to receive up to fifty (50) residential hook-ups onto the water system on the Dansie property for which no hook-up fees will be charged.”
Hi-Country Estates, 2008 UT App 105, ¶ 12 n. 2, 182 P.3d 417 (alterations and omissions in original) (citation omitted). Thus, we explained in footnote 2 that the trial court had made an unqualified determination that the Dansies were not entitled to free water and we concluded that such a determination was incorrect as far as it concerned alleged breaches occurring after February 5, 1996. The lead opinion is indeed correct that we never used any word such as “modify” or “vacate” that taken alone would indicate a reversal on this issue. However, I see no authority indicating that any particular words must be employed in order to disagree with and reverse a trial court on an issue. Again, the case law is clear that context is important and that we may not simply rely on individual words when interpreting an appellate mandate. See, e.g., Coombs v. Salt Lake & Fort Douglas Ry. Co., 11 Utah 137, 39 P. 503, 506 (1895) (“‘The mandate and opinion, taken together, although they use the word, “reversed,” amount to a reversal only in respect to the accounting, and to a modification of the decree in respect to the accounting, and to an affirmance of it in all other respects‘” (quoting Gaines v. Rugg, 148 U.S. 228, 238, 13 S.Ct. 611, 37 L.Ed. 482 (1893))).
¶21 Admittedly, we failed to include in the prior opinion‘s concluding paragraph our determination from footnote 2 regarding the current obligations of the parties under the Well Lease, which resulted in some understandable confusion. This omission may have been either a mere oversight or an erroneous understanding that the issue was not yet squarely before us and that we needed only give guidance to govern issues that were very likely to arise in future proceedings. Nonetheless, I think it sufficient that both parties argue, and I would agree, that the issue was appropriately before us in the prior appeal and, as discussed above, we analyzed the issue and ruled thereon. The incomplete nature of our conclusion should not relieve the parties from being bound by our express decision on a matter appropriately before us.
¶22 Although the lead opinion recognizes that the spirit, and not only the letter, of our prior mandate must be implemented, I disagree that the opinion follows such a directive. Instead of considering the substance of our prior language, the lead opinion focuses entirely on form. The lead opinion reasons that the Dansies do not receive the benefits we referenced in footnote 2 only because (1) our prior concluding paragraph used the “affirm on all issues” language in its conclusion; (2) we did not use any words that by themselves indicate a reversal, such as “reverse” or “vacate“; and (3) the determination we made in footnote 2 was not reiterated in the concluding paragraph. See supra ¶¶ 6, 9. Indeed, the lead opinion concedes that our prior opinion “did establish that, so long as the PSC does not exercise jurisdiction over the water system, the rights of the parties are as set forth by the plain language of the Well Lease.”4 Supra ¶ 10. However, the
¶23 I would reverse the trial court‘s denial of the Dansies’ motion to modify and remand to the trial court for further proceedings.6
DAVIS, Presiding Judge
