*1 CONCLUSION
21 We affirm the court of appeals' deter- mination payment filing fees is jurisdictional not a prerequisite for the com-
mencement of an action under rule 3 of the
Utah Rules of Civil However, Procedure.
conclude that under the cireumstances of this case, Dipoma unreasonably delayed pay- ment of required fee, filing therefore, Dipoma's complaint, although commenced within applicable statute of limitations, properly dismissed the trial court as
a matter of law. 1122 Chief HOWE, Justice Justice DURHAM, DURRANT, Justice and Justice WILKINS concur in Associate Chief Justice opinion.
RUSSON's
No. 990521. Supreme Court of Utah. 31,
July 4(b) Utah R. Civ. P. (emphasis added). As ex- complaint 26, August until 1998-approximately above, plained Dipoma's action was commenced days after her action was commenced. 3(a)(1) under rule complaint her was filed Therefore, Dipoma even if did not unreasonably with the clerk of the court on November delay payment fee, required filing she 1997-not when filing fee paid, nevertheless failed to serve McPhie awith sum- therefore, the 120-day period in which to serve mons complaint required within the time complaint summons and began running on rule and consequently, complaint her was sub- However, that date. undisputed it is Dipo- ject to dismissal. ma did not serve McPhie with the summons and *2 was void because United had been administratively 1991, and, dissolved in therefore, could not validly enter into the agreement. appeal decision. We affirm.
BACKGROUND 12 "In reviewing grant of summary
judgment, we view the facts and all reason
able inferences drawn therefrom in
light
most favorable to the nonmoving party....
We state the facts in this case accordingly."
Tretheway v. Miracle Mortgage,
Inc., 2000
¶ 2, 12,
UT
(citations
tion, op- defendants' at voidable interest), assert (Celebration's successor agree- to void opted tion, defendants (1) con breach action: ing causes six faith good covenant ment. (2) tract, breach (4) mis fraud, negligent (8) dealing, fair gov case (6) unjust contend rescission, (5) representation, 16-10@2-204 the Utah by section erned enrichment. "Liability for entitled, section, complaint That Code. answered Defendants "All transactions," provides, preincorporation third- a counterclaim filed both of a on behalf as or to act purporting moved persons then Defendants complaint. incorpo no knowing there claims. plaintiffs' corporation, judgment summary *4 and jointly chapter, the contended this under United, defendants the ration toAs while Unit- created because liabilities void all for agreement severally liable April 1994 § 16-10a-204 Ann. three administratively dissolved Code acting." Utah so had been ed prop- therefore, not could and, that, notwithstand argue earlier years (1999). Plaintiffs Miller, toAs agreement. pre- the both governs into erly enter title, section this ing its he because that contended defendants the liabilities. post-dissolution of United president as capacity his in acted 16- assuming section However, even not he agreement, executing the fol- into contracts to applies 102-204 could therefore agreement to the party a dissolu- administrative corporation's lowing a toAs provisions. its individually enforce not ques- the address not tion, not does he did section argued that Kontes, defendants the to right the have he plaintiffs as action in the whether part of standing take tion to have 16-102-204 Section agreement. beneficiary the to the enforce third-party merely a pur- "persons lability of the only to speaks contend- plaintiffs response, In agreement. corpora- aof or on behalf as for a to act porting acted Miller that because ed by ability any to agree- refer the not to It does party a Id. tion." he became corporation, provisions contracts. its to persons to enforce ment, enabling him enforce deter- trial court plaintiffs, of behalf on "per whether of question the T9 As and, accord- agreement mined the is contracts to enforce power the have sons" for sum- motion defendants' granted ingly, 16-102-204, we scope of the beyond claims. plaintiffs' as to judgment mary issue. this to resolve law the common turn ruling. this appeal issue. this addressed previously haveWe rely on urge us hand, plaintiffs the one On ANALYSIS "mutuality of of principle law the common on raise plaintiffs only issue par where that requires which obligation," erred trial the is whether appeal given under contractually liable ty held is enforce could ruling Miller able is also cireumstances, of set into on enter purported he agreement behalf its own on contract enforce ap is Summary judgment behalf. United's Gard See cireumstances. same those under an depositions, pleadings, "if the propriate 785, 789 Madsen, P.2d v.mer admissions interrogatories, swers Mil argue, as Thus, plaintiffs Ct.App.1997). affidavits, any, show if file, with together 16-10a-204, liable, under section be ler would any issue genuine no is there "purport[{ed] he while created liabilities for is moving party fact material corpo [non-existent] aof on behalf or act as law." matter aas judgment ato entitled to enforce able id., be also ration," he would trial 56(c). review "We P. R. Civ. Utah with Celebra he entered agreement cor ruling{ ] summary judgment court's on United's to act" "purport[ed] he C tion when E & Underwriters Sur. rectness." mutuality principle behalf, pursuant We ¶ 14, 10 P.3d UT Trucking, 2000 obligation. plain- dismissal court's trial conclude third-party benefi- evidently aas clary. agreement, hand, On the other defendants fer of interest in real property citing agreement contend the cases). should be voidable at Allowing the party that misrepresen option their they had intended to contract ted identity to enforce the contract may United, with not Miller individually. compel Defen the innocent party into a contract it position dants' support finds 164(1) might otherwise be unwilling to enter as of the Restatement of Contracts. identity That see is inextricably tied to one party's states, tion "If party's manifestation of assessment of the other's capacity perform assent by induced either a on the fraudulent or a contract. This is especially true misrepresentation material where par other contract contemplates an ongoing ty upon which the recipient justified relationship rather than single transaction. relying, the case, contract is this voidable recipi between par ent." (Second) Restatement ties involved an ongoing Contracts relationship, - includ § 164(1)-(1981). Thus, ing a section, under minimum one-year employment term a contract voidable, be for both it Miller Kontes, must meet each as well as devel requirement opment of a four prong first, Vipont test: mine there over a three-year period. must be a misrepresentation, second, Whether or not the misrepresenta "the misrepresentation tion was must made knowingly,3 have been it either was material agreement. material," fraudulent or id. a, 164 emt. third, "the misrepresentation must have in *5 {14 The third requirement is duced recipient the contract," make the that misrepresentation "the must have in id., and, fourth, "the recipient must have duced the recipient to make the contract." justified in relying on the misrepresen (Second) Restatement of 164(1) § Contracts tation." Id. emt. a. Where the misrepresentation is mate {11 agree rial, We here, with defendants presume that we the that this factor is agreement met, was voidable at "in option. their the absence of facts showing the so holding, contrary." § plaintiff's Id. we 167 decline emt. b. Plaintiffs have invitation apply the principle of mutuality obligation pointed of not any facts to undermine the because, as conclusion demonstrated that the application identity the of the contracting 164(1) of party below, "induced application the [defendants] of the make the con principle of mutuality obligation of tract." in a case Id. Indeed, emt. a. the record such as this evidence great one has cited potential parties the to create makes clear a contract that party one but for representation the never intended to enter. that United owned the interest in Vipont the mine and 112 We now turn to application the capable of entering joint into a venture 164(1) to the facts of this case. The with Celebration, defendants would have had requirement first in applying that section is no reason to enter into the contract with that there must have been a misrepresenta United. Accordingly, the third prong is met. tion. Miller misrepresented to defendants Finally, for the contract that he acting in his capacity repre as a voidable, be "the recipient must have been sentative of entity when, fact, justified in relying on the misrepresentation." that corporate entity no longer existed. Id. As with the third prong, where party €13 requirement second relies on an assertion of a fact, material that that "the misrepresentation must have been presumed reliance is reasonable. Id. emt. d. either fraudulent or material." Id. The iden pointed Plaintiffs have to no record evidence tity of parties the is, a contract as a from which we could conclude defendants general rule, a part material of the contract. justified were not in relying on Miller's mis See, eg., Zurcher Herveat, v. 238 Mich.App. representation. Miller purported to act as 605 N.W.2d 336-38 & 337 n. 11 president the United, and it undisputed (1999)(noting the identity parties is an that at point some United did hold an inter essential term of a contract involvinga trans- est in Vipont the mine. Under these cireum- 3. Whether Miller had actual knowledge that tract is irrelevant to determining whether the United was dissolved when he entered the con- term is material. for the post-dissolution exist porations reason- it was only presume
stances,
canwe
affairs.
business
up their
winding
purpose
the
had
United
to believe
defendants
for
able
joint venture
the
into
enter
judgment,
summary
capability
{21
motion
In its
parties.
the
between
agreement
lacked
that United
asserted
defendants
Agree-
April
into
enter
power
see-
requirements
Accordingly,
administra-
had been
United
ment because
through
case
164(1)
inmet
tion
agreement
tively dissolved
identity of
misrepresentation
Miller's
affairs,. See
winding up its
made
not
was,
contract
the, contracting party.
Nebeker, 905
Callister,
&
Duncan
Holman
option,
at defendants'
therefore, voidable
Further, de-
(Utah Ct.App.1995).
P.2d 895
they wished
make clear
actions
defendants'
acted
Miller
that because
contended
fendants
Thus,
agree with
contract.
to void
of United
president
capacity
in his
agree-
conclusion
court's
trial
not
he was
Agreement,
April
executing therefore,
affirm
and,
ment
could
therefore
party
defen-
against
claims
plaintiffs'
dismissal
|
provisions.
its
individually enforee
not
dants.
United, as
dispute
did
22 Miller
«
it
RUSSON,
entity, was
Justice
Chief
17 Associate
T
there-
A.
Agreement,
April
ROGER
WILKINS,
Judge
Justice
post dissolution.
not contract
in Justice
could
concur
fore
LIVINGSTON
because, as
However,
contended
Miller
opinion.
DURRANT's
corpo-
a dissolved
individual,
acted
he
an
herself, Justice
disqualified
{18 Having
Agree-
April
ration, he became
herein, Third.
participate
does
Durham
provisions.
to enforce
ment, enabling him
A. LIVINGSTON
Judge ROGER
District
defendants
agreed with
The court
sat.
Agreement
found
implicitly
*6
or
liquidation
a
to
pursuant
made
not
dissenting:
Justice,
HOWE, Chief
court
Accordingly, the
up event.
winding
in em-
majority errs
The
I dissent.
into
T19
entered
United
because
reasoned
Utah
replace the
law to
common
ploying
dissolu-
the 1991
after
Agreement
Act(URBCA),
Corporation
Business
Revised
unenforceable
therefore
tion,
void
it was
law
common
replace
to
enacted
which
stated,
summarily
trial
The
by Miller.
devia-
majority's
The
principles.
corporate
Miller
the documents
from
is clear
"[T]t
interpret-
URBCA,
cases
from
tion
of United
president
contracts
signed
recognize
to
majority's failure
it,
ing
na-
capacity.
individual
in his
not
to
but
alternative
me no
leave
facts
relevant
con-
and consideration
contracts
ture
dissent.
conclusion."
no other
allow
templated
exhaustively
are
ex-
corporations
tous
requiring
Utah
appeal,
by the
dissolution
creation
from
governed
(1)
con-
whether
following issues:
amine
Ann.
Code
Utah
generally
See
URBCA.
purporting
by persons
tracts
(1998). The URBCA
§
16-10a-101
if
void
authority are
corporate
valid
with
act
report
annual
file an
corporations
administratively
requires
has
corporation
Com-
Corporations
Division
with the
relationship
(2)
dissolved;
if a contractual
Fail-
§ 16-10a2-1607.
id.
See
Code.
mercial
cirenmstances,
can
under
for
ground
a
report
annual
an
to file
ure
on behalf
act
purporting
person
§ 16-102-
id.
See
dissolution.
administrative
contract.
individually enforce
corporation
re-
annual
file
1421(2).
failed
in turn.
United
issues
these
discuss
I will
administratively
subsequently
port
did
United
August
POST-DISSOLUTION
OF
I. VALIDITY
years
two
within
reinstatement
apply for
CONTRACTS
disso-
the administrative
date
effective
personally
generally
{24
are
Individuals
See
incurable.
making the dissolution
lution,
flowing from
liabilities
cor-
contractual
allows
liable
URBCA
§ 16-10a-1422.
id.
their
dealings.
business
Creation of the cor
equitable existence of a corporation
pro-
porate shield, however, provides
exception
an
tection
personal
from
liability.
general
to this
rule. See Black's Law Dictio
27 The
provision
URBCA
eliminatingthe
(7th
nary
ed.1999).
A defining feature of de facto common law principle is section 16-
corporation
is the limitation of the liability
102-204, which, together
title,
with its
states:
of the individuals involved to the sums volun
tarily contributed.
18 Am.Jur.2d 5 Contri
Liability
Preincorporation
Transac-
(1985) (citations omitted).
bution
tions.
All persons purporting to act as or on
125 In order to
invoke
protec-
behalf
corporation,
of a
knowing there was
tion, individuals forming
must
no incorporation under
chapter,
complywith the
required
formalities
by rele-
jointly and severally liable for all liabilities
vant constitutional or statutory provisions.
created
acting.
while so
Deviation from these
might
formalities
ren-
Although the title indicates preincorporation
der shareholders unable
protection
to claim
activity as
type
conduct,
covered
under
shield.
In an attempt
have previously held
predecessor
that the
protect
individuals who had inadvertently
section 16-10a-204, which was section 16-10-
failed
comply
with the formalities of incor-
139 of
UBCA,
also applied
post-dissolution
poration, the common law developed the doe-
situ
ations.1
See Steenblik v. Lichfield,
trines of de facto corporations and corpora-
1995).
P.2d 872
Utah is not alone
tion
estoppel. The ultimate
effect of
in this conclusion. At least five other states
provide
doctrines was to
corporate pro-
with similar or identical statutes have held
desery-
tection under principles
equity
principals
post-dissolution
liable in
situations.
ing individuals.
See Murphy,
1238 post- applied 16-10-1839 section that lik Id. authority." without corporation aas
act agreements. dissolution at 80 P.2d 886 Murphy (citing 878 at wrote, from Steenblik, conclusion we in that support I draw App.1994)). Ct. v.Co. Equipment Aurora Division Equipto sug- history statutory [NJothing Utah's P.2d Yarmouth, 134 Wash.2d prein- limited is 16-10-1389 gests Section of Wash- Court Supreme the (1998), where corpora- toAs activities.... corporation state, which that a statute held that ington suspended have that tions 16-10a-204, did section to our identical is di- officers that reinstated, hold statute, former meaning of change the aof business the continue who rectors 16- section former our identical which lia- personally are corporation suspended applied statutes both 10-139, that arising from liabilities debts for all ble corporation. of a contracts post-dissolution corporation the activities types those wrote: Washington court circumstances, such Under performed. narrow- planned had committee If the continue who persons relationship of the just liability rule to the scope of ing the suspended aof operations the transactions, official the preincorporation promoters.... preincorporation like have would act] model the [to comment pursuant if act who Thus, persons a substantial mention some made author- authority after corporate valid says comment is, official As it change. re- personally suspended, ity has been sit- removing postdissolution nothing about arising from for liabilities sponsible liability scope of from uations operations. continued rule." Nat'l (citing First at 878 P.2d Steenblik did in the statute changes Minor Id. at Silberstein, .2d 398 S.W Boston Bank of the statute application not alleviate (Tex.1966)). 914,915-16 situations. postdissolution case, trial {29 instant In the al "[plarties {31 contend Defendants repealed the UBCA stated lapse should status lowing their and cases 16-10-1839 section former disregard of from their to benefit able not be post- applicable statute interpreting innocent expense of at form Re- to survive. failed situations dissolution good them dealing with parties third 16-10- former section repeal ferring to con that such majority holds faith." court stated: trial or voidable initio ab be should tracts similar is somewhat 16-102-204 corpora Section acting a dissolved party not de- of statute (language ... provides fundamentally majority I believe tion. however, specifical- leted). section This former policy behind misconstrues incor- prior taken actions ly directed current 16-10-1839 fails.... incorporation or when poration presume They seem 16-102-204. ... 16-10-189] Thus, [section the statute indi punish designed to were statutes *8 fact, recodified. not, in been aof has behalf sign contracts who viduals administratively has corporation section only former is contrary, not theOn however, law, history of The dissolved. present similar" "somewhat 16-10-1389 enacted were statutes these clear makes 16-10a-204, predecessor.2 its it is section escaping from individuals prevent order below, I would further set out For reasons See cireumstances. these liability under wording of in the difference hold Morse, at P.2d 77; 881 at P.2d 886 Murphy, to warrant insufficient is 16-10a-204 section today holding Thus, disagree with I 921. in Steenb- decision our from result a different RMBCA, subsequently was in the 2.04 history section of the examination A brief 2. 16- as section Utah in 1992 adopted verbatim edition The first helpful. 16-10-139 was added "knowingly" element A adopted 10a-204. Utah published in 1950. MBCA the section title of and the version 1984 section Act as 1950 139 section verbatim p. Derivation History, Act Model changed. See 1968, recodified 139 section In 16-10-139. Laws ch. Utah (1997 1992 Supp.); see also unchanged. 2-49 wording 146, but the as section 1, July 277, § effective section was recodified 139 In
1289
that contracts entered into on behalf of de-
section 16-10-189 an individual
signs
who
a
corporations
funct
should be void or voidable
contract for a
corporation
nonexistent
can be
policy
reasons.
a party to a contract
such,
and as
can legally
1
enforce
short,
32 In
obligations.
contractual
a
does not
exist, consistent with
16-10a2-204,
134
Gardner,
As in
White dealt directly
principal is individually Hable for contracts he
with the
rights
contractual
of individuals who
Moreover,
makes.
clearly
we
held in Steemb-
had entered into contracts on behalf of corpo
lik that
obligations
contractual
support
rations dissolved for
pay
failure to
dues and
liability and such obligations are not nullified
file annual reports.
Id. at 873 Like the
because a principal signs on behalf of a de-
Millers and United in the
case,
instant
corporation.
funct
Accordingly, section 16-
Whites were
only
shareholders of Marl
10a-204 makes the corporate principal, who
borough Properties,
Inc., which was
signs
adminis
post
contract
dissolution, a party tratively dissolved for failure to file its annu
contract;
contractual
lability presup-
report
al
pay
its dues.
poses
Subsequently,
the existence of a
and,
contract
there-
Marlborough Properties,
fore,
Inc., through
contracts in
Brian
these situations eannot be
White, entered into an option agreement
void under URBCA.
purchase real property.
In subsequent
liti
II,
INDIVIDUAL
gation
ENFORCEMENT OF
over the agreement,
held,
court
CORPORATE
"absent unfair prejudice,
OBLIGATIONS
an
pur
individual
porting to act as a corporation is a party to
33 Because Steemblik
application
involved
signed
contract
in the name of a
nonexistent
former section
post-dissolu-
16-10-189 to
corporation. As a party,
tion
individual can
contractual
lability
princi-
sue for breach of
contract." Id.
pals,
Gard-
were
required
to discuss the
mer
applied
right
reasoning
White,
principals
to individually enforce
stating:
agreements.
The majority incorrectly
holds that section
applies
16-102-204
only to
Although the individual who signs for a
liability of "persons purporting to act as or
corporation is
party
not a
to the contract,
on behalf of a corporation," and not enforce-
may
individual
become a party with
ment of the
contract
persons.
same
standing to enforce the contract by 'assum-
The court of appeals recently addressed this
ing to act as a corporation without authori-
particular issue in Gardner Madsen,
ty'...
The Washington court stated that
P.2d 785
Ct.App.1997).
case,
parties
all
to the contract undeniably in-
NUF,
Inc., was
May
dissolved in
1990 for
tended
valid,
to create a
binding contract.
failure to file an
report.
annual
In June
Even if it is later determined that one of
1990, NUF,
Inc., through an officer of the
parties
erroneously represented itself
corporation, entered into a written contract
to be a valid corporation,
the contract
for an ownership
personal
interest
proper-
still
Thus,
enforceable....
'absent unfair
ty.
only
parties to the contract were the
prejudice ...
from the use of
NUF,
defendants and
Inc. The defendants
name in
contract,
[the
pur-
individual
argued the contract was void because it was
porting to act for
corporation]
is a
a dissolved corporation and
to the contract and has an individual cause
therefore the officer couldnot enforce it. Id.
of action for its breach.
at 787-89. Relying heavily on White v. Dvo-
rak,
field, the purchasing subsequent raising efforts not was contract the because contract the re facts, we should Given property. of United. signed on behalf he when whether to ascertain trial court the mand contract the of Thus, enforcement unless unfairly prejudiced be would defendants the defendants, against prejudice unfair works contract.4 the to enforce allowing Miller contract the look simply should we See parties the rights of the determine signed was Agreement {37 April the Since 1350, Palmer, P.2d Constr. Interwest parties both must assume parties, by both par 1996) of contractual (rights the under perform time the at intended itself). the contract on are based ties L. Cor- Arthur 3A agreement. the of terms of Moreover, application even T36 (1960). Mil- Contracts, § 546 on bin, Corbin making contract the justify 164(1) does the of shareholders sole were his wife ler the all that finds majority The voidable. Miller any reason If for corporation. defunct 164(1) been have of section requirements ag- the perform, unable subsequently mis- or fraudulent met, including a material ap- the pursue Crosby, could party, grieved evidentiary hear- although no representation, con- any other as legal recourse propriate on was decided case This held. ing has been that To gone bad. arrangement tractual minimum, the At a judgment. summary contract, a to the end, party evi- their present entitled plaintiffs afforded case, not be would in this principal made were representations what as to dence he liability unless personal from protection contracting. time at the parties by the Likewise, statutory protocol. specific met the enticed Miller majority finds not be would contract to enforee right his awith contract to enter defendants no there simply because extinguished but and that corporation nonexistent agreement agreed have in existence corporation they would deception, record, formed. from clear It terms. to its well were Crosby Celebration however, which URBCA follow should We the shares ownership all Miller's aware method mandated legislatively out sets as well as defunct corporation. aas conducting business fact, in property. on liens substantial as liable principal holds URBCA held to a bank letter a June disso- into after contracts party for debts Miller against judgment 16- of section interpretation per our lution re- specifically Crosby Mine, twice Vipont contract, absent ato As a 102-204. release "complete bank quested URB- nothing in the I find prejudice, unfair asserts individually. Miller Miller," Mr. principal right of a restricts which in CA original part of always United had for itself easily determined Agreement noteworthy It is dili- its due part of administratively dissolved experi- (who substantial Crosby has signed demon- pertinent be fact would war- This gence. no banking) contained investment ence in defendants. corpo- prejudice concerning the of unfair strating a lack representations or ranties have could Celebration United. rate status *10 signing a contract for an administratively to enforceit.