Bennion v. Stolrow , 2024 UT 14 ( 2024 )

This opinion is subject to revision before final
publication in the Pacific Reporter
2024 UT 14IN THE
SUPREME COURT OF THE STATE OF UTAH
WESTON BENNION,
Petitioner,
v.
DALE STOLROW,
Respondent.
No. 20220901
Heard October 18, 2023
Filed May 16, 2024
On Certiorari to the Utah Court of Appeals
Second District, Weber County
The Honorable Joseph M. Bean
No. 180902051
Attorneys∗:
Emily Adams, Freyja Johnson, Hannah Leavitt-Howell, Bountiful,
Lindy W. Hamilton, Robert W. Gibbons, Ogden, for petitioner
Troy L. Booher, Beth E. Kennedy, Taylor P. Webb, Trystan B.
Smith, Todd A. Turnblom, Tajha L. Ferrara, Salt Lake City,
for respondent
JUSTICE POHLMAN authored the opinion of the Court, in which
CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE PEARCE,
JUSTICE PETERSEN, and JUSTICE HAGEN joined.
JUSTICE POHLMAN, opinion of the Court:
__________________________________________________________
∗ Additional attorneys: Alyson C. McAllister, Salt Lake City, for
amicus curiae Utah Association for Justice; Zachary E. Peterson, Salt
Lake City, for amicus curiae Utah Defense Lawyers Association.
BENNION v. STOLROW
Opinion of the Court
INTRODUCTION
¶1 Weston Bennion was injured when his apartment deck
collapsed. He sued his landlord, Dale Stolrow, for negligence, and
the parties eventually settled. Bennion agreed to release Stolrow
and his insurer, State Farm, 1 from all claims in exchange for
$150,000. Bennion further agreed that the settlement was subject to
related subrogation claims and healthcare liens, and he promised
to indemnify Stolrow from liability for any such claims and liens.
¶2 Before tendering the $150,000 payment, Stolrow informed
Bennion that he intended to distribute the payment in two checks:
one payable to Bennion and the other payable to a collection agency
that, according to Stolrow, had a healthcare lien on the settlement
funds. Bennion objected and filed a motion to enforce the parties’
agreement, arguing that its terms did not allow Stolrow to issue a
portion of the settlement funds to a third party. The district court
disagreed and suggested that Stolrow issue two checks: one jointly
to Bennion and the third party for the amount of the lien, and
another to Bennion for the remainder of the funds. The court of
appeals affirmed the district court’s decision, and Bennion
petitioned for certiorari.
¶3 We granted certiorari to address whether the court of
appeals erred in concluding that the parties’ agreement permitted
Stolrow to issue a portion of the settlement funds jointly to Bennion
and the third-party collection agency. Bennion asserts the
agreement requires payment exclusively to him. We agree. The
plain language of the release provides for payment to Bennion in
exchange for his release of claims against Stolrow and his
assumption of responsibility for third-party liens. Accordingly, we
reverse.
BACKGROUND
¶4 Bennion was injured when the floorboards of his
apartment deck collapsed, dropping him twenty-five feet to the
ground. Bennion claimed his landlord, Stolrow, was negligent and
was responsible for the medical expenses and other damages
Bennion incurred. After more than two years of litigation, the
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1 Although not a party to this appeal, State Farm represented
Stolrow’s interests during the litigation. For simplicity, throughout
this opinion, we refer to Stolrow and State Farm collectively as
Stolrow, except where the distinction is relevant.
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parties mediated their dispute and reached a settlement. Bennion
agreed to accept $150,000 to release his claims against Stolrow and
his insurer, State Farm.
¶5 After the mediation, Stolrow’s counsel sent a letter to
Bennion’s counsel expressing appreciation for the settlement and
including a written release prepared for Bennion’s signature.
Paragraph 2 of the release provides that in consideration of
$150,000, Bennion releases Stolrow from all claims and demands
related to the deck incident. The release further states that “the
payment made in consideration of [Bennion’s] release is intended
to and does release and discharge any claims by him in regard to
[any] unknown or future complications.” And it declares it is “a
fully binding and complete settlement” between Bennion and
Stolrow. 2
¶6 The release also contains subrogation and hold harmless
provisions. Paragraph 7 of the release, titled “Subrogation Claims
or Liens,” states:
Weston Bennion, and his counsel of record
acknowledge that this settlement is, or may be,
subject to one or more subrogation claims or health
care liens. Weston Bennion expressly agrees to
indemnify and save harmless Dale Stolrow . . . and
State Farm . . . from any and all liability for such
health care liens and from any other lien or
subrogation claim arising out of the incident which is
the subject of this release. All medical and other
expenses and losses incurred by Weston Bennion,
past, present, and future as a result of the incident
referred to above, shall be Weston Bennion’s own
responsibility. The consideration paid to Weston
Bennion for this release is intended to cover all such
expenses or losses.
¶7 Paragraph 8 of the release, titled “Hold Harmless,” states
that if any person or entity brings a claim or other legal action “of
any kind” against Stolrow arising from the deck incident, Bennion
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2 The clause in its entirety reads: “This release shall be a fully
binding and complete settlement among Weston Bennion, Dale
Stolrow and Manya Stolrow, and their companies, trusts, and
business entities; State Farm; and their respective heirs, agents,
employees, administrators, executors, successors, and assigns.”
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BENNION v. STOLROW
Opinion of the Court
agrees “to indemnify, defend and hold harmless” Stolrow “from
any and all liability, loss or expense of any kind, nature, or
description.”
¶8 In the letter accompanying the prepared release, Stolrow’s
counsel advised that he had notice of a lien for $9,103 from a third-
party collection agency, Rawlings Company for BlueCross/Blue
Shield (Rawlings). 3 Counsel also stated that Stolrow planned to
“issue a separate check for the lien and the remainder to [Bennion
and Bennion’s counsel].” Bennion signed the release and, a few
weeks later, moved the district court to enforce the parties’
agreement.
¶9 In his motion to enforce the settlement, Bennion argued
that Stolrow had “unexpectedly attempted to add an additional
term” to their agreement by insisting on making “a partial payment
to [Bennion], with the remainder of the settlement funds being
issued to . . . a third-party collections agency.” He asserted that the
terms of the release require that the $150,000 settlement payment
be made only to him. He further argued that Stolrow has no legal
obligation to any third parties, pointing to the subrogation and
hold harmless provisions of the release, in which Bennion assumed
responsibility for any and all subrogation claims and healthcare
liens. In response, Stolrow argued that he had a duty to honor
Rawlings’ healthcare lien and that he could be liable to Rawlings if
he ignored it.
¶10 The district court agreed with Stolrow. Without directly
addressing Bennion’s argument about the terms of the parties’
agreement, the court concluded based on common law that
Rawlings would have a claim against Stolrow if Rawlings’ lien was
not honored. Thus, the court instructed that Stolrow “should issue
one check to [Bennion] in the undisputed amount, and one check
to both [Bennion] and Rawlings in the disputed subrogation
amount.” The court concluded by suggesting that Bennion
negotiate with Rawlings to the extent Bennion contested the
validity of the lien.
¶11 Bennion moved the district court to reconsider. He argued
that the court’s decision was improperly designed to “avoid[] a risk
that was already considered and addressed by the parties under the
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3 Bennion questions the validity of Rawlings’ lien. The
validity of the lien was not resolved below, but for purposes of our
analysis we assume its validity in the amount Stolrow asserts.
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plain terms of the Agreement,” specifically the subrogation and
hold harmless provisions.
¶12 Although the court acknowledged that its “decision was
intended to balance the interests [Bennion] may have with his
bargaining position with the lien claimant and the interests of
[Stolrow] and his insurer in protecting against subrogation claims
and liens,” the court rejected Bennion’s argument that its decision
conflicted with the terms of the release. The court reasoned that its
decision “complied with” the release terms because, although
Bennion “is totally, absolutely responsible for indemnifying”
Stolrow, Stolrow may still be left “in a position where . . . [he] get[s]
sued by Rawlings because Rawlings can’t collect from [Bennion].”
In support, the court referenced the “subject to” language in
paragraph 7, stating that Bennion agreed that the settlement
“would be subject to one or more subrogation claims or health care
liens.”
¶13 Bennion appealed. He asserted that the district court
improperly focused on policy and substituted its preference for the
plain language of the release. But the court of appeals affirmed the
district court. Bennion v. Stolrow, 2022 UT App 93, ¶ 1, 516 P.3d 763.
It held that a joint payment to Bennion and Rawlings “was
appropriate” because “the plain language of the settlement
agreement states that the settlement is ‘subject to’ claims like that
of Rawlings” and “nothing” in the plain language “would
prohibit” or “disallow[]” distributing a portion of the settlement
funds to Rawlings as joint payee. Id. ¶¶ 15–16, 18.
¶14 Bennion petitioned this court for review. We granted
certiorari on the question of whether the court of appeals erred in
affirming the district court’s conclusion that the release permitted
Stolrow to issue a joint check to Bennion and a third-party payee
for a portion of the settlement funds.
ISSUE AND STANDARD OF REVIEW
¶15 Bennion contends that the court of appeals erred in
interpreting the parties’ agreement as one that permits payment to
Bennion and a third party as joint payees where the third party
asserts an interest in the settlement funds. “On certiorari, this court
reviews the decision of the court of appeals for correctness, giving
no deference to its conclusions of law.” ICS Corr., Inc. v. Utah
Procurement Pol’y Bd., 2022 UT 24, ¶ 14, 513 P.3d 677 (cleaned up).
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BENNION v. STOLROW
Opinion of the Court
ANALYSIS
¶16 Bennion contends that the court of appeals’ interpretation
of the release is contrary to its plain language. He interprets the
release as unambiguously providing “for $150,000 in consideration
to be ‘paid to Weston Bennion.’” He asserts that the release does
not permit Stolrow to materially change Bennion’s legal interest in
the settlement funds by issuing a portion of those funds jointly to
“some unidentified potential third-party claimant selected by”
Stolrow. 4
¶17 Because releases are contractual provisions, we interpret
them “according to well-developed rules of contract
interpretation.” Ward v. Intermountain Farmers Ass’n, 907 P.2d 264,
267 (Utah 1995). One of those well-developed rules directs that,
when we interpret a contract, “we first look at [its] plain language
. . . to determine the parties’ meaning and intent.” Brady v. Park,
2019 UT 16, ¶ 53, 445 P.3d 395 (cleaned up). We interpret that plain
language “in light of the reasonable expectations of the parties,”
Wittingham, LLC v. TNE Ltd. P’ship, 2020 UT 49, ¶ 71, 469 P.3d 1035(cleaned up), and “we look for a reading that harmonizes the
provisions and avoids rendering any provision meaningless,”
Peterson & Simpson v. IHC Health Servs., Inc., 2009 UT 54, ¶ 13, 217
P.3d 716 (cleaned up). If we conclude that the language is
unambiguous, “we interpret the contract as a matter of law.” Id. But
we will deem a contractual provision ambiguous “if it is capable of
more than one reasonable interpretation because of uncertain
meanings of terms, missing terms, or other facial deficiencies.”
Brady, 2019 UT 16, ¶ 54 (cleaned up).
¶18 Here, we conclude that the plain language of the release is
unambiguous and does not permit Stolrow to satisfy the parties’
agreement by issuing a portion of the $150,000 settlement in a check
jointly payable to Bennion and Rawlings.
¶19 The release prepared by Stolrow and signed by Bennion
contains no mention of Rawlings or a shared payment. Instead,
paragraph 2 states that in consideration of $150,000, Bennion
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4 Because Stolrow issued the check jointly to “Weston
Bennion . . . & Rawlings,” Bennion could not negotiate, discharge,
or enforce the check on his own. See UTAH CODE § 70A-3-110(4) (“If
an instrument is payable to two or more persons not alternatively,
it is payable to all of them and may be negotiated, discharged, or
enforced only by all of them.”).
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releases Stolrow from all claims relating to the deck incident.
Further, the release refers to a single payment, says nothing of
Rawlings providing consideration in exchange for a portion of the
settlement funds, and declares the settlement to be between
Bennion and Stolrow.5
¶20 The court of appeals acknowledged that these parts of the
release do not permit Stolrow to satisfy his settlement obligation by
issuing a portion of Bennion’s $150,000 settlement payment to a
third-party claimant or lienholder. Bennion v. Stolrow, 2022 UT App
93, ¶ 13, 516 P.3d 763. Still, the court of appeals rejected Bennion’s
proffered interpretation of the release as unreasonable, concluding
that paragraph 7 of the release “specifically permit[s]” payment to
a lienholder. See id. (“[W]hile we agree with Bennion that
[paragraph 2 of the release] does not specifically permit payment
to a claimant or lienholder, we cannot say the same for paragraph 7
of the [release] . . . .”). Paragraph 7 states:
[T]his settlement is, or may be, subject to one or more
subrogation claims or health care liens. Weston
Bennion expressly agrees to indemnify and save
harmless Dale Stolrow . . . from any and all liability
for such health care liens and from any other lien or
subrogation claim arising out of the incident which is
the subject of this release. All medical and other
expenses and losses incurred by Weston Bennion,
past, present, and future as a result of the incident
referred to above, shall be Weston Bennion’s own
responsibility. The consideration paid to Weston
Bennion for this release is intended to cover all such
expenses or losses.
¶21 In interpreting this provision, the court of appeals focused
on the first sentence, which provides that the settlement “is, or may
be, subject to one or more . . . health care liens.” See id. ¶ 14. The
court interpreted “subject to” to mean “affected by” and observed
that the provision “recognizes that the settlement made with
Bennion may be impacted by existing . . . health care liens.” Id.
(cleaned up). Drawing on that recognition, the court concluded that
it “was appropriate” under the plain terms of the release for
Stolrow to issue a portion of the settlement payment jointly to
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5 More precisely, the release declares the settlement to be
between Bennion, Stolrow, and others who are not relevant to this
appeal, but notably, it does not list Rawlings. See supra ¶ 5 n.2.
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BENNION v. STOLROW
Opinion of the Court
Bennion and Rawlings, a lienholder. Id. ¶ 18. But we don’t see this
as a reasonable interpretation of paragraph 7’s plain language.
¶22 To begin, we share the court of appeals’ view that
paragraph 7 reflects the parties’ recognition that the settlement is
or may be impacted by healthcare liens like the one held by
Rawlings. After all, the opening sentence of paragraph 7 states that
the settlement “is, or may be, subject to one or more . . . health care
liens.”
¶23 But unlike the court of appeals, we don’t interpret “subject
to” as meaning Stolrow could use the settlement funds promised to
Bennion to satisfy such liens by unilaterally choosing to issue a
portion of those funds to a lienholder. Rather, we interpret this
sentence as referring to Bennion’s acknowledgment—in the very
next sentence—that in accepting the $150,000 settlement payment,
he assumes responsibility for such liens. That is, immediately after
acknowledging that the settlement “is” or “may be” “subject to one
or more . . . health care liens,” Bennion “expressly agrees to
indemnify and save harmless” Stolrow “from any and all liability
for such health care liens.” (Emphasis added.) And to further
reinforce Bennion’s assumption of responsibility for all healthcare-
related costs arising out of the deck incident, the remainder of
paragraph 7 states, “All medical and other expenses and losses
incurred by Weston Bennion, past, present, and future as a result
of the [deck] incident . . . shall be Weston Bennion’s own
responsibility. The consideration paid to Weston Bennion for this release
is intended to cover all such expenses or losses.” 6 (Emphases added.)
¶24 Far from being silent about which party would bear
responsibility for healthcare liens arising out of the deck incident,
paragraph 7, read in its entirety, shows that the parties agreed that
Bennion would be responsible for any such liens. Thus, no
language in the release suggests that the parties intended Stolrow
to unilaterally designate a portion of the $150,000 settlement funds
to satisfy such liens.
¶25 Had Stolrow wanted to satisfy Rawlings’ lien as part of his
settlement with Bennion, Stolrow could have negotiated for that.
But where the release—as drafted by Stolrow—makes no mention
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6 In paragraph 8 of the release, Bennion repeats his promises
to indemnify Stolrow and to hold him harmless. Bennion further
promises to defend Stolrow in any action brought against him. See
supra ¶ 7.
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of Rawlings and includes Bennion’s express acknowledgment that,
in consideration of $150,000, he assumes responsibility for any
existing or future liens, we cannot reasonably interpret the release
as allowing Stolrow to deprive Bennion of exclusive ownership of
those funds for the purpose of satisfying Rawlings’ lien.
¶26 In reaching the opposite conclusion, both the district court
and the court of appeals expressed some concern over the potential
exposure Stolrow faced if the release did not allow Stolrow to use
some portion of the settlement funds to satisfy Rawlings’ lien. The
district court observed that although Bennion “is totally, absolutely
responsible for indemnifying” Stolrow, Stolrow may still be left “in
a position where . . . [he] get[s] sued by Rawlings because Rawlings
can’t collect from [Bennion].” And the court of appeals surmised
that if “the Rawlings claim remained unpaid,” Rawlings “could
instead bring an action against Stolrow . . . directly.” 2022 UT App
93, ¶ 17.
¶27 Yet we need not speculate about what might happen and
decide what rights Rawlings would have to recover from Stolrow
should Bennion fail to honor his obligations under the release.
Instead, all we must decide is the meaning of the release. And, as
explained above, we conclude that Stolrow agreed to pay Bennion
$150,000 in settlement of his claims and that Bennion, in exchange,
agreed to release his claims against Stolrow, indemnify him, and
hold him harmless from any liens or subrogation claims arising out
of the deck incident.
¶28 Where, as here, no one has argued that this arrangement is
unconscionable or a product of “fraud, duress, or
misrepresentation,” we must enforce the parties’ agreement as they
have made it, not as we think it should have been made. Strohm v.
ClearOne Commc’ns, Inc., 2013 UT 21, ¶ 43, 308 P.3d 424 (cleaned
up); see also Kiernan Fam. Draper, LLC v. Hidden Valley Health Ctrs.,
LC, 2021 UT 54, ¶ 27, 497 P.3d 330 (“We enforce agreements as
written.” (cleaned up)). Certainly, if Stolrow harbored concern that
Bennion could not satisfy the obligations he expressly assumed
under the release, he could have tried to negotiate a different
bargain. But we will not relieve a party from the agreement it made
simply because we think a different bargain, with potentially less
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BENNION v. STOLROW
Opinion of the Court
exposure, could have been struck. 7 See Hal Taylor Assocs. v.
Unionamerica, Inc., 657 P.2d 743, 749 (Utah 1982) (“It is a long-
standing rule in Utah that persons dealing at arm’s length are
entitled to contract on their own terms . . . .”).
CONCLUSION
¶29 The plain language of the release provides for a $150,000
payment to Bennion. It does not contemplate sharing those funds
with a third-party lienholder. Instead, it makes express that
Bennion assumes responsibility for any and all healthcare liens
arising from the deck incident. Given these terms, the parties’
agreement did not permit Stolrow to issue a portion of the funds
jointly to Bennion and Rawlings to satisfy Rawlings’ healthcare
lien. We reverse and remand.
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7 Stolrow cites Transamerica Insurance Co. v. Barnes, 505 P.2d
783 (Utah 1972), and Hill v. State Farm Mutual Automobile Insurance
Co., 765 P.2d 864 (Utah 1988), overruled on other grounds by Sharon
Steel Corp. v. Aetna Casualty & Surety Co., 931 P.2d 127 (Utah 1997),
as cases that, in Stolrow’s view, “clear[ly] instruct[]” a tortfeasor to
pay a third-party claimant directly. In his briefing, Stolrow argues
that this caselaw “is relevant only in that it further confirms
[Stolrow’s] performance was reasonable.” Stolrow revised his view
during oral argument, asserting that the caselaw is also “part of the
contract.”
Assuming our subrogation caselaw applies to Rawlings’
healthcare lien, Stolrow misinterprets this authority. In Barnes and
Hill, we did not mandate that a tortfeasor pay a third-party
claimant directly. All we indicated is that subrogation claims will
survive settlement in certain circumstances and, when they do, a
tortfeasor best protects its rights by issuing two checks rather than
one. See Barnes, 505 P.2d at 787; Hill, 765 P.2d at 867. But this was
only a suggestion. As explained above, parties are free to contract
on their own terms. Stolrow could have followed our suggestion in
Barnes and Hill, but he elected to reach a different agreement with
Bennion, and we must enforce the agreement they made.
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