UDAK Properties v. Canyon Creek ( 2021 )

2021 UT App 16THE UTAH COURT OF APPEALS
UDAK PROPERTIES LLC,
Appellee,
v.
CANYON CREEK COMMERCIAL CENTER LLC,
Appellant.
Amended Opinion 1
No. 20190065-CA
Filed February 11, 2021
Fourth District Court, Provo Department
The Honorable Darold J. McDade
No. 160400059
Kenneth A. Okazaki and Bruce Wycoff,
Attorneys for Appellant
Greggory J. Savage and Gregory S. Roberts,
Attorneys for Appellee
JUDGE DIANA HAGEN authored this Opinion, in which
JUDGES GREGORY K. ORME and DAVID N. MORTENSEN concurred.
HAGEN, Judge:
¶1 This appeal stems from a disagreement as to the meaning
of the term “Responsible Owner” as used in a restrictive
covenant binding owners of parcels in a shopping center in
Spanish Fork, Utah. Canyon Creek Commercial Center LLC
appeals from the district court’s grant of declaratory relief to
UDAK Properties LLC, in which the court declared that UDAK
is a Responsible Owner and entitled to exercise the privileges
granted to such owners. Canyon Creek alleges that the
1. This amended opinion replaces the opinion issued December
10, 2020, UDAK Properties v. Canyon Creek, 2020 UT App 163.
UDAK Properties v. Canyon Creek
Responsible Owner provision is ambiguous and that the
ambiguity should have been construed in favor of Canyon
Creek. Further, Canyon Creek alleges several errors in the
court’s award of attorney fees. It also argues that the court
incorrectly determined that its tender of judgment to UDAK was
legally insufficient and justified an award of additional attorney
fees. We conclude that the Responsible Owner provision is
unambiguous and dictates that UDAK is a Responsible Owner.
We further conclude that the district court correctly awarded
attorney fees to UDAK and that Canyon Creek’s tender was
invalid. Accordingly, we affirm.
BACKGROUND
¶2 In 1999, owners of parcels in a Spanish Fork, Utah
shopping center recorded an amended declaration (Declaration)
containing various restrictive covenants that run with the land.
The Declaration designates certain property owners as
“Responsible Owners” and defines that term, in relevant part, as
follows:
“Responsible Owner” shall mean the Owner of a
Parcel or Parcels with a combined Building Area
thereon of at least forty thousand square feet
(40,000 sq. ft.) of Floor Area. Responsible Owner
shall also mean the lessee of a Parcel with a
Building constructed thereon containing a
minimum of forty thousand square feet (40,000 sq.
ft.) of Floor Area . . . .
The consent of all Responsible Owners is required before
constructing or modifying buildings in the shopping center.
¶3 In 2005, UDAK acquired several parcels in the shopping
center. Because UDAK believed it owned parcels with a
20190065-CA 2 2021 UT App 16UDAK Properties v. Canyon Creek
combined floor area of 42,945 square feet, UDAK held itself out
as a Responsible Owner. In 2014, Canyon Creek acquired parcels
in the shopping center. Canyon Creek disputed whether UDAK
qualified as a Responsible Owner.
¶4 In February 2016, UDAK filed a declaratory relief action,
seeking a declaration that “it is a Responsible Owner, and that it
possesses all the rights provided to Responsible Owners in the
Declaration.” Canyon Creek and two co-defendants
counterclaimed, seeking a declaration that UDAK was not a
Responsible Owner. In Canyon Creek’s view, UDAK’s combined
Building Area should be based on the buildings’ actual floor area
rather than their allowable floor area. The actual floor area of
UDAK’s buildings equaled only 35,808 square feet, and therefore
Canyon Creek maintained that UDAK was not a Responsible
Owner. 2 UDAK moved for summary judgment, but the district
court denied that motion. The court concluded that because
UDAK and Canyon Creek’s “contrary arguments and
contentions regarding the requirements for ‘Responsible Owner’
status . . . both appear reasonably supported by Declaration
provisions,” the Responsible Owner provision is “facially
2. UDAK owns five parcels in the shopping center, two of which
have been developed into buildings that occupy less than the
allowable Floor Area. Pad 1 “may be developed into not more
than one (1) Building, which shall not exceed five thousand
[square feet] (5,000 sq. ft.) in Floor Area,” but the Site Plan shows
a constructed or proposed building on Pad 1 of only 2,900 square
feet. Similarly, Pad 5 “may be developed into not more than one
(1) Building, which shall not exceed eight thousand square feet
(8,000 sq. ft.) in Floor Area,” but the Site Plan shows a proposed
or constructed building of only 2,965 square feet. As a result, the
actual buildings on UDAK’s parcels have a combined Floor Area
of 35,808 square feet.
20190065-CA 3 2021 UT App 16UDAK Properties v. Canyon Creek
ambiguous as a matter of law.” The court set the matter for a
bench trial.
¶5 On June 21, 2019, following the bench trial, the
district court issued a written ruling concluding that UDAK is a
“Responsible Owner” (Original Judgment). Specifically,
the court found that “UDAK’s parcels have a combined allowed
Floor Area of at least 40,000 sq. ft.” and that in “harmonizing
all of the relevant terms of the 1999 Declaration, it is evident
that UDAK is a Responsible Owner . . . as an Owner of Parcels
with a combined allowed Floor Area in excess of 40,000
square feet.”
¶6 The district court further ruled that UDAK was
contractually entitled to its reasonable attorney fees pursuant to
the Declaration’s attorney fee provision. In the Original
Judgment, the court ruled that Canyon Creek was liable for
UDAK’s reasonable attorney fees “pursuant to Article 10.04 of
the 1999 Declaration” and directed UDAK to submit an affidavit
establishing the amount of attorney fees. UDAK submitted an
affidavit and a declaration outlining its attorney fees. Canyon
Creek did not object within the time allowed by rule 73(d) of the
Utah Rules of Civil Procedure. On November 1, 2018, the court
awarded UDAK $251,498.65 in attorney fees (First Supplemental
Judgment). Canyon Creek moved for entry of additional
findings regarding the court’s award of attorney fees, but
the court denied the motion. Canyon Creek filed a timely notice
of appeal.
¶7 In an apparent effort to satisfy the judgment while
still preserving its right of appeal, Canyon Creek filed a
document titled “Tender of Judgment Amount Plus
Accrued Interest,” to which it attached a photocopy of a check
made out to UDAK in the amount of the total judgment. The
actual check was never sent to UDAK. Shortly thereafter,
Canyon Creek filed a document titled “Motion for Order
20190065-CA 4 2021 UT App 16UDAK Properties v. Canyon Creek
Abating Interest and Declaring Money Judgment Satisfied.”
After both parties had briefed whether Canyon Creek’s tender
was legally sufficient, the court entered an order concluding that
Canyon Creek had not made a valid tender and granting UDAK
additional attorney fees.
¶8 UDAK’s counsel submitted an affidavit setting forth the
additional attorney fees it had incurred in responding to both the
motion for entry of additional findings and the motion related to
the purported tender. This time Canyon Creek filed a timely
objection. After further briefing, the court partially granted
UDAK’s requested additional attorney fees, awarding UDAK
$27,979 in addition to the original award. On September 5, 2019,
the court entered an amended judgment reflecting the additional
attorney fees awarded in connection with the tender (Second
Supplemental Judgment). Canyon Creek timely filed a
supplemental notice of appeal. 3
ISSUES AND STANDARDS OF REVIEW
¶9 Canyon Creek raises several arguments on appeal. First,
Canyon Creek challenges the district court’s interpretation of the
Declaration. “Our review of a [district] court’s interpretation of a
contract begins with a question of law, reviewed for correctness:
Is the contract unambiguous?” West Valley City v. Majestic Inv.
Co., 818 P.2d 1311, 1313 (Utah Ct. App. 1991). “If it is, its
interpretation is itself a question of law.” Id.; see also Uintah Basin
Med. Center v. Hardy, 2005 UT App 92, ¶ 9, 110 P.3d 168(“Questions of contract interpretation not requiring resort to
3. Spanish Fork, UT Realty LLC filed a separate appeal, which
we also decide today. See UDAK Props. LLC v. Spanish Fork, UT
Realty LLC, 2020 UT App 164. The other
defendant/counterclaimant did not appeal.
20190065-CA 5 2021 UT App 16UDAK Properties v. Canyon Creek
extrinsic evidence are matters of law, which we review for
correctness.” (cleaned up)). 4
¶10 Second, Canyon Creek argues that the district court made
multiple reversible legal errors in awarding attorney fees to
UDAK. “Whether attorney fees are recoverable in an action is a
question of law, which we review for correctness.” Martin v.
Kristensen, 2019 UT App 127, ¶ 31, 450 P.3d 66 (cleaned up), cert.
granted, 456 P.3d 386 (Utah 2019).
¶11 Third, Canyon Creek argues that its purported tender of
the money judgment was legally sufficient and that there was no
basis for an award of additional attorney fees to UDAK in
connection with the tender. “We review a district court’s
interpretation of our rules of civil procedure, precedent, and
common law for correctness.” Keystone Ins. Agency, LLC v. Inside
Ins., LLC, 2019 UT 20, ¶ 12, 445 P.3d 434 (cleaned up). Further,
we review whether attorney fees are recoverable for correctness.
Supra ¶ 10.
4. Canyon Creek makes two additional arguments on appeal
relating to the interpretation of the Declaration. First, it argues
that the district court committed reversible error by excluding a
representative from Canyon Creek from testifying at trial
regarding its understanding of the Declaration. Because we hold
that the Declaration is unambiguous, it is unnecessary to resort
to extrinsic evidence, making the exclusion of any testimony
immaterial. Canyon Creek also argues that the district court
erred in ruling, in the alternative, that UDAK was a Responsible
Party as “a successor-in-interest to CDI,” the prior owner of
UDAK’s parcels. Because we affirm the district court’s
conclusion that UDAK is a Responsible Owner by virtue of
owning parcels “with a combined allowed Floor Area in excess
of 40,000 square feet,” we have no reason to reach this
alternative ground for its ruling.
20190065-CA 6 2021 UT App 16UDAK Properties v. Canyon Creek
ANALYSIS
I. “Responsible Owner” Under the Declaration
¶12 The key question in this case is whether UDAK is a
“Responsible Owner” under the Declaration. The district court
ruled that the Declaration was ambiguous but concluded that
UDAK was a Responsible Owner after considering extrinsic
evidence. Although UDAK agrees with the court’s ultimate
conclusion, it contends that there was no need to resort to
extrinsic evidence because the Declaration is unambiguous. 5 We
agree with UDAK that there is only one reasonable
interpretation of the Declaration and that UDAK unambiguously
qualifies as a Responsible Owner.
¶13 We reach this conclusion despite the district court’s
contrary view that the Declaration was ambiguous. Whether a
contract is ambiguous is a question of law and we afford no
deference to the district court’s conclusion. See Mid-America
Pipeline Co. v. Four-Four Inc., 2009 UT 43, ¶ 16, 216 P.3d 352. The
district court is “in no better position than is this court to
interpret the contractual language at issue here.” Level 3
5. Citing Christensen v. Christensen, 2017 UT App 120, 400 P.3d
1219, Canyon Creek incorrectly asserts that UDAK “must cross-
appeal or cross-petition if they wish to attack a judgment of a
lower court for the purpose of enlarging their own rights or
lessening the rights of their opponent,” id. ¶ 3 n.2, or should
have petitioned for interlocutory appeal. To the contrary, “if
appellees or respondents merely desire the affirmance of the
lower court’s judgment, they need not, and should not, cross-
appeal or cross-petition.” State v. South, 924 P.2d 354, 356 (Utah
1996). Therefore, it was neither necessary nor appropriate for
UDAK to appeal from the district court’s ultimate decision in its
favor.
20190065-CA 7 2021 UT App 16UDAK Properties v. Canyon Creek
Commc’ns, LLC v. Public Service Comm’n., 2007 UT App 127, ¶ 11,
163 P.3d 652; see also Lake v. Hermes Assocs., 552 P.2d 126, 128
(Utah 1976) (“[W]here the resolution of the controversy depends
upon the meaning to be given documents, the [district] court is
in no more favored position and is no better able to determine
the meaning of such documents than this court.”). Further, “it is
within our discretion to affirm a judgment on an alternative
ground if it is apparent in the record.” Olguin v. Anderton, 2019
UT 73, ¶ 20, 456 P.3d 760 (cleaned up). Because we can
determine, based on the Declaration itself, that there is no
ambiguity as to whether UDAK qualifies as a Responsible
Owner, we affirm on that basis.
¶14 “Restrictive covenants that run with the land and
encumber subdivision lots form a contract between
subdivision property owners as a whole and individual lot
owners . . . .” Swenson v. Erickson, 2000 UT 16, ¶ 11, 998 P.2d 807(cleaned up). As such, “interpretation of the [Declaration] is
governed by the same rules of construction as those used to
interpret contracts.” See id. The first step in contract
interpretation is to look within the four corners of the agreement.
See Wittingham LLC v. TNE Ltd. P’ship, 2020 UT 49, ¶ 71, 469 P.3d
1035. “Provided that the language within the four corners of the
agreement is unambiguous, we look no further than the plain
meaning of the contractual language.” Mid-America Pipeline, 2009
UT 43, ¶ 19.
¶15 A court will look to extrinsic evidence only if the contract
is ambiguous. Id. A contract is ambiguous if “it is capable of
more than one reasonable interpretation because of uncertain
meanings of terms, missing terms, or other facial deficiencies.”
Brady v. Park, 2019 UT 16, ¶ 54, 445 P.3d 395 (cleaned up).
“Under our caselaw a reasonable interpretation is an
interpretation that cannot be ruled out, after considering the
natural meaning of the words in the contract provision in
context of the contract as a whole, as one [of] the parties could
20190065-CA 8 2021 UT App 16UDAK Properties v. Canyon Creek
have reasonably intended.” Id. ¶ 55. We evaluate “the
instrument in its entirety, considering each contract provision in
relation to all of the others, with a view toward giving effect to
all and ignoring none.” Ocean 18 LLC v. Overage Refund Specialists
LLC (In re Excess Proceeds from Foreclosure of 1107 Snowberry St.),
2020 UT App 54, ¶ 21, 474 P.3d 481 (cleaned up); see also Gillmor
v. Macey, 2005 UT App 351, ¶ 19, 121 P.3d 57 (“We examine the
entire contract and all of its parts in relation to each other and
give a reasonable construction of the contract as a whole to
determine the parties’ intent.” (cleaned up)).
¶16 The Declaration defines Responsible Owner as “the
Owner of a Parcel or Parcels with a combined Building Area
thereon of at least forty thousand square feet (40,000 sq. ft.) of
Floor Area.” UDAK contends that it qualifies as a Responsible
Owner because it owns five parcels that may be developed into
buildings not to exceed a combined 42,945 square feet of Floor
Area. Canyon Creek, on the other hand, argues that this
provision refers not to the maximum allowable Floor Area but to
the actual Floor Area of the existing or proposed buildings
constructed on each parcel. If Canyon Creek’s interpretation is
correct, the combined Building Area of UDAK’s parcels would
be insufficient for it to qualify as a Responsible Owner.
¶17 The Declaration defines “Building Areas” as “the area or
areas designated and set forth within each separate Parcel on the
Site Plan, . . . which shall be established as Building Areas
pursuant to Article 3.03.” The Site Plan shows the location of
each parcel and lists the square footage of all existing or
proposed buildings. Under Canyon Creek’s interpretation, the
building measurements shown on the Site Plan establish each
parcel’s Building Area for purposes of the Responsible Owner
provision.
¶18 But Canyon Creek’s interpretation would treat Building
Area as synonymous with Building, a separately defined term.
20190065-CA 9 2021 UT App 16UDAK Properties v. Canyon Creek
“When interpreting a contract we attempt to give effect to each
provision, and we look for a reading that harmonizes the
provisions and avoids rendering any provision meaningless.”
McNeil Eng’g & Land Surveying, LLC v. Bennett, 2011 UT App 423,
¶ 17, 268 P.3d 854 (cleaned up). “An interpretation which gives
effect to all provisions of the contract is preferred to one which
renders part of the writing superfluous, useless, or inexplicable.”
11 Williston on Contracts § 32:5 (4th ed. 2020). The Declaration
defines “Building” as “the structure or structures to be
constructed within the Building Areas.” To give effect to all
terms in the Declaration, the Floor Area of the Building Area
must mean something different from the Floor Area of the
Building to be constructed within it. 6
¶19 Significantly, the Responsible Owner provision itself
distinguishes between the Floor Area of a Building Area and the
Floor Area of “a Building constructed thereon.” In addition to
“the Owner of a Parcel or Parcels with a combined Building Area
thereon of at least forty thousand square feet (40,000 sq. ft.) of
Floor Area,” the definition of Responsible Owner includes “the
lessee of a Parcel with a Building constructed thereon containing a
minimum of forty thousand square feet (40,000 sq. ft.) of Floor
Area.” (Emphasis added.) The Declaration thus draws a
distinction between owners and lessees and the Floor Area
required for each to be a Responsible Owner. If UDAK was a
lessee, it would not be a Responsible Owner because the
6. Under Canyon Creek’s interpretation, UDAK would qualify as
a Responsible Owner so long as its parcels were undeveloped,
but it would lose that status once it developed those parcels into
buildings smaller than the maximum size allowed. Such an
interpretation would treat the owners of undeveloped parcels
more favorably than the owners of developed parcels, despite
the latter’s more substantial investment in the shopping center.
20190065-CA 10 2021 UT App 16UDAK Properties v. Canyon Creek
Buildings constructed on its parcels do not contain a combined
Floor Area of at least 40,000 square feet. But, since UDAK is an
owner, the Floor Area required is not limited to that of “a
Building constructed thereon.” Canyon Creek’s alternative
interpretation, which would limit UDAK’s Floor Area to the
square footage of the Buildings constructed on each parcel,
cannot be reconciled with the plain language in the Responsible
Owner provision.
¶20 The Declaration’s other provisions similarly distinguish
between the size of Buildings and the size of the Building Area.
The Declaration contemplates that “[t]he Building Area of each
Parcel may, but need not be developed to the full gross square
footage of Floor Area as set forth” in the Site Plan or as allowed
in other sections of the Declaration. Section 4.07 provides that
each parcel “may be developed into not more than one (1)
Building, which shall not exceed” a fixed square footage “of
Floor Area.” Section 3.03 references the same fixed square
footage for each parcel and provides that, for purposes of
assigning parking spaces, “Floor Area includes the maximum”
square footage “allowed for the Building located or to be located
on” a particular parcel, “although the Buildings currently
located thereon have not been constructed to that size as of the
date of this Declaration.” Thus, the treatment each parcel
receives is based on the maximum square footage of Floor Area
allowed without regard to the actual square footage of
Buildings.
¶21 The Declaration unambiguously sets forth the maximum
square footage of Floor Area for each parcel and distinguishes
that Building Area from the Floor Area of “a Building
constructed thereon.” Based on the fixed square footage listed in
sections 3.03 and 4.07, UDAK owns parcels with a combined
Building Area of 42,945 square feet of Floor Area. Accordingly,
UDAK is a Responsible Owner and possesses all rights and
privileges granted to Responsible Owners under the Declaration.
20190065-CA 11 2021 UT App 16UDAK Properties v. Canyon Creek
II. Attorney Fees
¶22 Canyon Creek argues that the district court erred in
several respects when awarding attorney fees in the underlying
action. As an initial matter, there is no dispute that UDAK was
the prevailing party in this lawsuit and thus entitled to fees
under the Declaration. Instead, the parties dispute which fees
were authorized by the Declaration’s attorney fees provision.
¶23 In Utah, “attorney fees are awarded in accordance with
the terms of [the] contract.” Rapoport v. Four Lakes Village
Homeowners Ass’n Inc., 2013 UT App 78, ¶ 22, 300 P.3d 327(cleaned up). Article 10.04 of the Declaration states,
In the event that any suit is brought for the
enforcement of any provision of this Declaration or
as the result of any alleged breach thereof or for a
declaration of rights and duties hereunder, the
successful party or parties to such suit shall be
entitled to collect reasonable attorneys’ fees from
the losing party or parties and any judgment or
decree rendered shall include an award thereof.
On appeal, Canyon Creek argues that the court made seven
errors by awarding attorney fees for (1) pre-litigation work; (2)
work related to administrative activities, mediation, and other
settlement efforts; (3) undescribed legal work; (4) work done by
a second attorney before entering an appearance; (5) settlement
efforts made by UDAK’s successor counsel; (6) work done before
November 29, 2018; and (7) work done after November 29, 2018,
when fees were awarded during the pendency of this appeal.
¶24 Each of Canyon Creek’s first five arguments relates to the
district court’s award of attorney fees in the First Supplemental
Judgment issued on November 1, 2018. Although Canyon Creek
attempted to raise those issues below, it failed to do so in a
20190065-CA 12 2021 UT App 16UDAK Properties v. Canyon Creek
timely manner. In the First Supplemental Judgment, the district
court did not address the merits of those issues but instead ruled
that Canyon Creek “did not file an objection within seven (7)
days as required by Utah R. Civ. P. 73(d)” in response to
UDAK’s affidavit and declaration of fees. On appeal, Canyon
Creek does not acknowledge the court’s ruling or attempt to
demonstrate that the court erred by not addressing its objection
on the merits. To carry its burden of persuasion on appeal, “an
appellant must address and show error in the basis for the
district court’s decision.” Scott Anderson Trucking Inc. v. Nielson
Constr., 2020 UT App 43, ¶ 32, 462 P.3d 822. Because Canyon
Creek has not addressed the actual basis for the district court’s
ruling, it cannot establish error with respect to the First
Supplemental Judgment.
¶25 We turn to Canyon Creek’s sixth and seventh attorney-
fees arguments, both of which relate to the district court’s
Second Supplemental Judgment issued on September 5, 2019.
First, Canyon Creek argues that “UDAK’s request for additional
attorney fees incurred before November 29, 2018 is time-barred”
under the Utah Rules of Civil Procedure because rule 73(a)
requires a party to claim attorney fees “no later than 14 days
after the judgment is entered,” Utah R. Civ. P. 73(a), and rule
59(e) requires a party to file a motion to alter or amend a
judgment “no later than 28 days after entry of the judgment,” id.R. 59(e). According to Canyon Creek, if UDAK incurred
additional attorney fees, it should have requested such fees
within the time periods prescribed by rules 73(a) and 59(e),
following the entry of the First Supplemental Judgment on
November 1, 2018.
¶26 The time limits in rules 73(a) and 59(e) do not apply in
this case because the fees awarded in the Second Supplemental
Judgment were incurred in responding to motions filed after the
First Supplemental Judgment was entered. The court ruled that
UDAK was entitled to fees for work done in connection with
20190065-CA 13 2021 UT App 16UDAK Properties v. Canyon Creek
Canyon Creek’s tender of judgment and corresponding motion,
which were filed on November 7, 2018, and December 7, 2018,
respectively. 7 The timeframes in rules 73(a) and 59(e) were not
triggered by the entry of the First Supplemental Judgment on
November 1, 2018, because the fees awarded in the Second
Supplemental Judgment were unrelated to and incurred after the
First Supplemental Judgment was entered. On appeal, Canyon
Creek has not attempted to show that the attorney fees awarded
in the Second Supplemental Judgment are unrelated to Canyon
Creek’s attempted tender and corresponding motion. Therefore,
the court’s additional award of $27,979 in attorney fees was
proper.
¶27 Canyon Creek also argues that the district court lacked
jurisdiction to award attorney fees because the Second
Supplemental Judgment was entered during the pendency of
this appeal. Specifically, Canyon Creek alleges that “[i]t simply
does not make sense that a litigant such as UDAK can submit,
and a district court can enter, a judgment of attorney fees
anytime during the pendency of an appeal, including after the
filing of an initial brief.”
¶28 This court has previously rejected that argument. In
Saunders v. Sharp, 818 P.2d 574 (Utah Ct. App. 1991), we held that
“even where a [district] court is otherwise divested of
jurisdiction due to an appeal, the [district] court retains the
power to act on collateral matters.” Id. at 578. Further, we held
that the district court has jurisdiction to award supplemental
7. In contrast, the court specifically denied fees for any work
done on Canyon Creek’s motion for entry of additional findings
because it found that UDAK did not file a timely motion
requesting such fees. Accordingly, although UDAK requested
$32,123 in additional fees, the court awarded UDAK only
$27,979.
20190065-CA 14 2021 UT App 16UDAK Properties v. Canyon Creek
attorney fees arising from such collateral matters. Id. Under
Saunders, the district court had jurisdiction to award additional
attorney fees in connection with the purported tender.
¶29 Canyon Creek asserts, without explanation, that rules
73(a) and 59(e) abrogate Saunders. However, Canyon Creek does
not explain why the timeframes for seeking attorney fees in
connection with a final judgment, see Utah R. Civ. P. 73(a), or
moving to amend that judgment, see id. R. 59(e), would apply to
an award of supplemental attorney fees incurred in litigating
post-judgment collateral matters. “And although we have the
power to overrule our earlier cases, doing so requires us to
distinguish between weighty precedents and less weighty ones
by analyzing (1) the persuasiveness of the authority and
reasoning on which the precedent was originally based, and
(2) how firmly the precedent has become established in the law
since it was handed down.” State v. Sorbonne, 2020 UT App 48,
¶ 29, 462 P.3d 409, cert. granted, 474 P.3d 946 (Utah 2020). Canyon
Creek has not engaged in this analysis to convince us to overrule
Saunders. Therefore, we affirm the district court’s supplemental
attorney fees award. 8
8. Canyon Creek makes two additional arguments “irrespective
of this Saunders issue” as to why the Second Supplemental
Judgment was improper. First, Canyon Creek argues that the
district court erroneously awarded fees in the absence of a
motion. But UDAK specifically requested attorney fees in its
opposition to Canyon Creek’s purported tender and related
motion to abate interest and declare money judgment satisfied.
Second, Canyon Creek argues that these additional fees were not
authorized by section 10.04 of the Declaration, an argument we
reject in the next part of our analysis. See infra ¶ 36.
20190065-CA 15 2021 UT App 16UDAK Properties v. Canyon Creek
III. Tender
¶30 Canyon Creek challenges the district court’s conclusion
that its purported tender of the money judgment was invalid
and argues that the award of attorney fees to UDAK for work
done in connection with the tender and corresponding motion
was improper. Canyon Creek argues that its tender was legally
sufficient under Utah Code section 78B-5-802, which states that
“an offer in writing to pay a particular sum of money . . . is, if
not accepted, equivalent to the actual production and tender of
the money.” Utah Code Ann. § 78B-5-802 (LexisNexis 2017).
¶31 “Utah courts have interpreted this provision to mean a
valid tender requires an obligor to make a bona fide,
unconditional, offer of payment of the amount of money due
coupled with an actual production of the money or its equivalent.”
Shields v. Harris, 934 P.2d 653, 655 (Utah Ct. App. 1997)
(emphasis added) (cleaned up); see also Utah Res. Int’l. Inc. v.
Mark Techs. Corp., 2014 UT 60, ¶ 34, 342 P.3d 779 (“Valid tender
must be (1) timely, (2) made to the person entitled to payment,
(3) unconditional, (4) an offer to pay the amount of money due,
and (5) coupled with an actual production of the money or its
equivalent.” (cleaned up)). “A mere offer to pay generally does
not constitute a valid tender.” PDQ Lube Center, Inc. v. Huber, 949
P.2d 792, 800 (Utah Ct. App. 1997); see also Washington Nat’l Ins.
Co. v. Sherwood Assocs., 795 P.2d 665, 670 (Utah Ct. App. 1990)
(“Informing an obligee that you are ready and willing to
perform . . . is insufficient.”). Our supreme court has noted an
exception to the rule: “A party may be excused from extending
actual payment of a judgment if it is obvious that the other party
would reject it.” Utah Res. Int’l, 2014 UT 60, ¶ 35. However,
“there must be evidence that the debtor would actually make
payment but for the creditor’s refusal to accept it.” Id.¶32 The district court found that Canyon Creek “never
produced or delivered to [UDAK] the attorney fees or its
20190065-CA 16 2021 UT App 16UDAK Properties v. Canyon Creek
equivalent.” Further, Canyon Creek is not excused from
extending actual payment, as there is no evidence that UDAK
“would reject it.” Id. To the contrary, UDAK responded to the
purported tender by stating that, in its view, the tender did “not
meet all of the requirements to be a valid tender,” but that
UDAK was “willing to accept a valid tender meeting each of the
foregoing requirements if [Canyon Creek] wish[es] to make such
a tender.”
¶33 Canyon Creek argues that filing a photocopy of a check is
“actual production” of the money or its equivalent. Canyon
Creek cites section 78B-5-802 and the 1894 case Hyams v.
Bamberger, 36 P. 202 (Utah 1894), which Canyon Creek claims
excuses actual production of money when a person makes an
offer of tender in writing. However, we are bound to follow
subsequent Utah Supreme Court decisions holding that a valid
tender requires both “an offer to pay the amount of money due”
and “actual production of the money or its equivalent.” See Utah
Res. Int’l, 2014 UT 60, ¶ 34; accord Zion’s Props., Inc. v. Holt, 538
P.2d 1319, 1322 (Utah 1975); see also Ortega v. Ridgewood Estates
LLC, 2016 UT App 131, ¶ 30, 379 P.3d 18 (“We are bound by
vertical stare decisis to follow strictly the decisions rendered by
the Utah Supreme Court.” (cleaned up)). Any argument that
those opinions conflict with the language of the statute must be
directed to the Utah Supreme Court. Based on controlling
precedent, we agree with the district court that Canyon Creek
did not make a valid tender.
¶34 We also conclude that the district court’s award of
attorney fees in connection with Canyon Creek’s invalid tender
was proper. As an initial matter, we disagree with both parties
that the district court awarded these fees pursuant to Utah Code
section 78B-5-825, which requires an award of reasonable
attorney fees “if the court determines that the action or defense
to the action was without merit and not brought or asserted in
good faith.” See Utah Code Ann. § 78B-5-825. Although the
20190065-CA 17 2021 UT App 16UDAK Properties v. Canyon Creek
district court concluded that Canyon Creek’s tender and
corresponding motion was “meritless” and “lack[ed] a good
faith basis,” the court did not cite section 78B-5-825 as the basis
for awarding attorney fees.
¶35 Instead, attorney fees were authorized by section 10.04 of
the Declaration. Fees incurred in connection with litigating the
validity of Canyon Creek’s purported tender are closely related
to the underlying lawsuit brought by UDAK “for a declaration
of rights and duties” under the Declaration. As the successful
party, UDAK was entitled to an award of these fees under
section 10.04.
IV. Attorney Fees on Appeal
¶36 UDAK requests an award of its attorney fees incurred in
defending this appeal. “A party entitled by contract or statute to
attorney fees below and that prevails on appeal is entitled to fees
reasonably incurred on appeal.” Federated Cap. Corp. v. Abraham,
2018 UT App 117, ¶ 15, 428 P.3d 21 (cleaned up). Because the
district court awarded UDAK attorney fees below pursuant to
the Declaration, UDAK is entitled to fees as the prevailing party
on appeal.
CONCLUSION
¶37 We conclude that the Declaration is unambiguous that
UDAK is a Responsible Owner. We affirm the amount of
attorney fees awarded in the First Supplemental Judgment
because Canyon Creek failed to preserve the challenges related
to that judgment. We also affirm the attorney fees awarded in
the Second Supplemental Judgment as well as the court’s
conclusion that Canyon Creek’s tender of judgment was invalid.
We therefore remand to the district court only to award the
attorney fees UDAK reasonably incurred on appeal.
20190065-CA 18 2021 UT App 16