Blosch v. Natixis Real Estate Capital, Inc. ( 2013 )

2013 UT App 214_________________________________________________________
THE UTAH COURT OF APPEALS
KIRK BLOSCH, MARTIN W. MERRILL, AND DAVID O’BAGY,
Plaintiffs and Appellants,
v.
NATIXIS REAL ESTATE CAPITAL, INC.,
Defendant and Appellee.
Opinion
No. 20110315‐CA
Filed August 29, 2013
Third District, Salt Lake Department
The Honorable L.A. Dever
No. 070914778
Kathryn Collard, Attorney for Appellants
David K. Isom, Attorney for Appellee
JUDGE MICHELE M. CHRISTIANSEN authored this Opinion, in
which JUDGES GREGORY K. ORME and STEPHEN L. ROTH
concurred.
CHRISTIANSEN, Judge:
¶1 Kirk Blosch, Martin W. Merrill, and David O’Bagy appeal
from a jury verdict finding that Blosch was not a third‐party
beneficiary of a loan agreement between Natixis Real Estate
Capital, Inc. (Natixis), Schoolhouse Downtown, LLC, and
Schoolhouse Downtown’s principal (Borrower).1 Blosch also
1
Blosch, Merrill, and O’Bagy are all parties to this appeal.
However, the only issues raised on appeal relate to Blosch’s
purported rights as a third‐party beneficiary of the agreement
between Natixis and Borrower. Thus, we refer primarily to
(continued...)
Blosch v. Natixis
challenges the trial court’s denial of his pretrial motion for
summary judgment. We affirm.
BACKGROUND
¶2 On March 30, 2006, Natixis and Borrower entered into a loan
agreement (the Loan Agreement) by which Natixis loaned
Borrower $7.8 million.2 The funds were to be used for the purchase
and improvement of the Pierpont Building located in downtown
Salt Lake City. As required by the Loan Agreement, approximately
$1.2 million of the loaned funds was withheld in a reserve account
(the Escrowed Funds). The Escrowed Funds were to be disbursed
to Borrower once certain conditions outlined in the Loan
Agreement were satisfied. These conditions included the
completion, leasing, and operation of the Ruth’s Chris Steak House
restaurant space in the Pierpont Building.
¶3 In May 2006, Borrower attempted to draw from the
Escrowed Funds, but Natixis’s loan servicer denied Borrower’s
request because the contractual requirements for disbursement of
the Escrowed Funds had not been met. Around that time, Borrower
expressed frustration to Natixis over his inability to access the
Escrowed Funds, but Natixis was unable or unwilling to release the
funds prior to completion of the contractual conditions. After his
1
(...continued)
Blosch as the appellant throughout this opinion. Neither Bor‐
rower nor any entity owned or controlled by Borrower is a party
to this action.
2
Due to the voluminous record involving non‐parties and
transactions not relevant to the claims before this court, “[w]e
limit our discussion to only those background facts necessary to
resolve the issues on appeal.” See Holladay v. Storey, 2013 UT
App 158, ¶ 2 n.1.
20110315‐CA 2 2013 UT App 214Blosch v. Natixis
request to access the Escrowed Funds was refused, Borrower
solicited Blosch to borrow money in order to complete the
restaurant space and free the Escrowed Funds for disbursement.
Borrower represented to Blosch that the Escrowed Funds totaled
$1.5 million and that Borrower would need the loan from Blosch
for only ninety days.
¶4 Blosch agreed to arrange a loan of approximately $1 million
to Borrower provided that Natixis would release the Escrowed
Funds directly to an entity designated by Blosch once the
contractual requirements for disbursement were met. Borrower
arranged with a loan officer at Natixis (the Loan Officer) for the
Escrowed Funds to be paid jointly to Blosch and Borrower, which
required Natixis to “vet” Blosch as a legally permissible payee
under federal law. On July 11, 2006, the Loan Officer emailed to
Borrower a letter (the Joint Check Letter), which read, in relevant
part,
Dear [Borrower]:
This letter confirms [Natixis’s] completion of the
vetting process for Kirk Blosch. Upon satisfaction of
all requirements outlined in the Loan Documents,
[Natixis] will release the escrow funds associated
with the Ruth’s Chris restaurant via a check issued to
both you and Mr. Blosch.
¶5 On July 12, 2006, Borrower executed a promissory note to
Blosch, O’Bagy, and Merrill promising to repay on or before
October 12, 2006, the loan balance of $1,050,000, together with a
loan fee of 15%, for a total repayment of $1,207,500. Any balance
remaining unpaid after October 12, 2006, was subject to a 60%
annual interest rate. Blosch, O’Bagy, and Merrill tendered to
Borrower checks totaling $1,050,000.
¶6 In August 2006, Natixis sold Borrower’s loan to LaSalle
Bank, and Capmark Finance, Inc. (Capmark) became the new
20110315‐CA 3 2013 UT App 214Blosch v. Natixis
servicer for the Loan Agreement. Natixis did not communicate to
LaSalle Bank or Capmark that Natixis had agreed to the release of
the Escrowed Funds via joint check to Borrower and Blosch, and
did not provide LaSalle Bank or Capmark with a copy of the Joint
Check Letter.
¶7 On September 12, 2006, Borrower notified Natixis that the
restaurant was in operation and requested guidance on how to
obtain the release of the Escrowed Funds. Natixis directed
Borrower to contact Capmark to arrange for release of the
Escrowed Funds. On October 10, Borrower instructed Capmark to
release the Escrowed Funds via wire transfer to the account of
Wasatch Prime, LLC, another entity owned by Borrower. Capmark
released the Escrowed Funds in full to Wasatch Prime, LLC on
October 18, 2006.
¶8 In November 2006, Blosch contacted Natixis to find out why
he had not received a joint payment of the Escrowed Funds after
the restaurant space was completed. Natixis informed Blosch that
the Escrowed Funds had been wired directly to Borrower. Blosch
then met with Borrower, who informed Blosch that the money had
been used for other purposes and that he was unable to repay the
promissory note.
¶9 On October 15, 2007, Blosch, Merrill, and O’Bagy filed a
complaint against Natixis alleging breach of contract. Blosch
moved for summary judgment, arguing that, as a matter of law, he
was a third‐party beneficiary of the Loan Agreement as amended
by the Joint Check Letter. The trial court denied Blosch’s motion,
observing that the Loan Agreement unambiguously precludes
third‐party beneficiary claims, and stating, “Whether there was
intent among all parties to modify the Loan, is an issue of fact and
cannot be determined by this Court.”
¶10 The case proceeded to trial in September 2010, and the jury
returned a special verdict finding that Blosch was not a third‐party
beneficiary of the Loan Agreement. On December 14, 2010, the trial
20110315‐CA 4 2013 UT App 214Blosch v. Natixis
court entered an order dismissing with prejudice all of Blosch,
Merrill, and O’Bagy’s claims against Natixis. Blosch timely filed a
motion for a new trial, arguing that the jury’s verdict was against
both the weight of the evidence and the law, and that the trial court
had erred in instructing the jury regarding the effect of Natixis’s
assignment of the Loan Agreement. However, Blosch’s supporting
memorandum was struck for failure to comply with the Utah Rules
of Civil Procedure, and his motion was denied on March 7, 2011.
Blosch filed his notice of appeal on April 4, 2011.
ISSUES AND STANDARDS OF REVIEW
¶11 As an initial matter, Natixis challenges whether this court
has jurisdiction to hear this appeal. “‘[T]he issue of subject matter
jurisdiction is a threshold issue, which can be raised at any time
and must be addressed before the merits of other claims.’” Robinson
v. Baggett, 2011 UT App 250, ¶ 12, 263 P.3d 411 (alteration in
original) (quoting Houghton v. Dep’t of Health, 2005 UT 63, ¶ 16, 125
P.3d 860). “Whether this court has jurisdiction to hear an appeal is
a question of law.” McClellan v. State, 2012 UT App 316, ¶ 5, 290
P.3d 326 (citation and internal quotation marks omitted). Because
we conclude that we have jurisdiction over this appeal, we address
Blosch’s substantive claims.
¶12 Blosch first argues that the trial court erred in denying his
summary judgment motion. We review “a trial court’s legal
conclusions and ultimate grant or denial of summary judgment for
correctness.” See Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600(citation and internal quotation marks omitted). The trial court’s
denial of summary judgment was based upon its interpretation of
the Joint Check Letter and the Loan Agreement. “We accord a trial
court’s interpretation of a contract no deference and review it for
correctness.” See Encon Utah, LLC v. Fluor Ames Kraemer, LLC, 2009
UT 7, ¶ 11, 210 P.3d 263.
20110315‐CA 5 2013 UT App 214Blosch v. Natixis
¶13 Blosch also argues that insufficient evidence supported the
jury’s verdict that Blosch was not a third‐party beneficiary of the
Loan Agreement. “In reviewing a jury verdict, we view the
evidence in the light most supportive of the verdict[] and assume
that the jury believed those aspects of the evidence which sustain
its findings and judgment.” Billings v. Union Bankers Ins. Co., 918
P.2d 461, 467 (Utah 1996) (citation and internal quotation marks
omitted). “Accordingly, we will upset a jury verdict only upon a
showing that the evidence so clearly preponderates in favor of the
appellant that reasonable people would not differ on the outcome
of the case.” Id. (citation and internal quotation marks omitted).
¶14 Finally, Blosch argues that the trial court erred in instructing
the jury on the effect of Natixis’s assignment of the Loan
Agreement. We review challenges to jury instructions for
correctness, “granting the trial court no deference on its view of the
law.” Id. at 466 (citation omitted).
ANALYSIS
I. This Court Has Jurisdiction To Hear the Appeal.
¶15 Natixis argues that this court does not have jurisdiction to
hear the appeal because Blosch did not timely file a notice of
appeal. Generally, a notice of appeal must be filed within thirty
days after the date of entry of the judgment appealed from. Utah
R. App. P. 4(a). However, “[i]f a party timely files in the trial court
. . . a motion for a new trial under Rule 59,” “the time for all parties
to appeal from the judgment runs from the entry of the order
disposing of the motion.” Id. R. 4(b).
¶16 Natixis acknowledges that Blosch filed a notice of appeal
within thirty days of the trial court’s order denying his rule 59
motion. Natixis argues, however, that because the trial court struck
the memorandum Blosch submitted in support of his rule 59
motion, the motion failed to comply with Utah Rule of Civil
20110315‐CA 6 2013 UT App 214Blosch v. Natixis
Procedure 7(c)’s requirement that all motions be accompanied by
a supporting memorandum. See Utah R. Civ. P. 7(c). Natixis argues
that because the motion was unsupported by a memorandum, it
was “a nullity” and therefore did not toll Blosch’s deadline for a
notice of appeal under rule 4(b).
¶17 We do not agree that Blosch’s motion was a nullity or that
his failure to file a compliant memorandum prevented the tolling
of his time to appeal in this case. Tolling of the time to appeal
under rule 4 is triggered when a party “timely files in the trial
court” one of the motions enumerated under rule 4(b), such as a
rule 59 motion for a new trial. Id. Failure to submit a supporting
memorandum as required by rule 7 of the Utah Rules of Civil
Procedure may render such a motion insufficient. Menzies v.
Galetka, 2006 UT 81, ¶ 68, 150 P.3d 480. However, “[a] party can
timely move the court for relief despite the fact that its motion may
be insufficient.” Menzies, 2006 UT 81, ¶¶ 68–69 (holding that a rule
60(b) motion that was unsupported by a memorandum for sixteen
months after its filing was nevertheless timely filed). A trial court
faced with an insufficient motion has the discretion to deny the
motion or to allow the party who filed the motion to supplement
it. Id. ¶ 68.
¶18 Here, Blosch timely moved the trial court for a new trial
under rule 59. While the trial court struck Blosch’s supporting
memorandum for failure to comply with the requirements of the
Utah Rules of Civil Procedure, that decision rendered Blosch’s
motion insufficient, not untimely or a nullity. Notably, Natixis
moved the trial court to strike not just Blosch’s memorandum but
the rule 59 motion in its entirety. However, the trial court struck
only Blosch’s supporting memorandum and did not strike Blosch’s
motion. Instead, the trial court ruled on the motion and denied it.
Blosch’s time to appeal therefore ran “from the entry of the order
disposing of” his rule 59 motion. See Utah R. App. P. 4(b).
¶19 Because we determine that Blosch’s rule 59 motion satisfied
rule 4(b)’s requirements and tolled his time to appeal, we conclude
20110315‐CA 7 2013 UT App 214Blosch v. Natixis
that Blosch’s notice of appeal was timely and that we have
jurisdiction to consider the merits of his appeal.
II. The Trial Court Correctly Denied Summary Judgment.
A. This Court May Review the Trial Court’s Denial of
Summary Judgment.
¶20 Blosch first argues that the trial court erred in denying his
summary judgment motion. “Generally, the denial of a motion for
summary judgment is not reviewable on appeal because the
movant has had the opportunity to fully litigate [at trial] the issues
raised in the summary judgment motion[].” ASC Utah, Inc. v. Wolf
Mountain Resorts, LC, 2013 UT 24, ¶ 12 (alterations in original)
(citation and internal quotation marks omitted). However, “we do
not require parties to reargue at trial legal issues that a trier of fact
cannot decide.” Normandeau v. Hanson Equip., Inc., 2009 UT 44, ¶ 14,
215 P.3d 152. Thus, when a legal ruling made on summary
judgment is dispositive of a legal issue for trial, such that no factual
issue at trial could affect the legal determination, we may review
that legal ruling on appeal. See id. ¶¶ 12, 14 (observing that denials
of summary judgment based on legal issues the parties were
effectively foreclosed from litigating at trial are appealable).
¶21 In denying Blosch’s motion for summary judgment, the trial
court explained,
The case law provides that a third‐party may
claim contract benefit only if the parties to the
contract clearly express it. Loan Term ¶10.19
unambiguously precludes such third‐party claims.
However, the [Joint Check Letter] provides:
This letter confirms [Natixis’s]
completion of the vetting process for
Kirk Blosch. Upon satisfaction of all the
requirements outlined in the Loan
Documents, [Natixis] will release the
20110315‐CA 8 2013 UT App 214Blosch v. Natixis
escrow funds associated with the
Ruth’s Chris restaurant via a check
issued to both [Borrower] and Mr.
Blosch.
Whether there was intent among all parties to
modify the Loan, is an issue of fact and cannot be
determined by this Court.
(Citations omitted.) Blosch contends that the trial court denied
his motion for summary judgment based solely on the trial
court’s legal conclusion that it was a question of fact for the
jury whether Natixis and Borrower intended to modify the Loan
Agreement to make Blosch a third‐party beneficiary. Blosch argues
that because the trial court never found that the Joint Check Letter
was ambiguous as to the parties’ intent to make Blosch a third‐
party beneficiary, the trial court erroneously concluded that intent
was a question of fact, rather than a question of law.
¶22 We agree that the trial court’s denial of Blosch’s motion for
summary judgment was based on a purely legal issue. However,
we disagree that the trial court never determined that the Joint
Check Letter was ambiguous. It is well established that “[b]efore
the [trial] court may consider extrinsic evidence of the parties’
intent . . . it must first conclude that the contract is facially
ambiguous.” Wilson v. Johnson, 2010 UT App 137, ¶ 8, 234 P.3d 1156(citing Daines v. Vincent, 2008 UT 51, ¶ 51, 190 P.3d 1269). If the trial
court determines that the language of an agreement is facially
ambiguous as a matter of law, “the intent of the parties is a
question of fact.” Id. In light of this rule, we interpret the trial
court’s ruling as implicitly finding the Joint Check Letter
ambiguous as a matter of law as to whether the parties intended
that agreement to modify the Loan Agreement so as to make Blosch
a third‐party beneficiary. See West Valley City v. Walljasper, 2012 UT
App 252, ¶ 27, 286 P.3d 948. (“Unless the record indicates
otherwise, we presume that the trial court knew the law.”). As a
result of its ruling, the trial court denied summary judgment
20110315‐CA 9 2013 UT App 214Blosch v. Natixis
because the disputed material facts concerning the intent of the
Joint Check Letter could only be determined by the jury, and
Blosch was therefore not entitled to judgment as a matter of law.
Thus, the denial of Blosch’s motion for summary judgment was
based on the trial court’s legal determination that the Joint Check
Letter is facially ambiguous as to the parties intent, and we may
review this ruling on appeal.
¶23 Our determination that we may review the trial court’s
ruling in this case is consistent with our supreme court’s reasoning
in Normandeau, 2009 UT 44, which explained that appellate courts
may review a summary judgment ruling based on facts and legal
theories the moving party was foreclosed from arguing at trial. Id.
¶ 7. Because “[p]urely legal issues are not decided by a trier of
fact,” parties may be effectively foreclosed from raising legal issues
at trial that were decided by the trial court at the summary
judgment stage. Id. ¶ 14. In Normandeau, our supreme court cited
with approval cases reviewing pretrial denials of summary
judgment motions in which the trial court had made purely legal
rulings regarding, for example, accord and satisfaction, id. ¶ 12
(citing Estate Landscape & Snow Removal Specialists, Inc. v. Mountain
States Tel. & Tel. Co., 844 P.2d 322, 325–26 (Utah 1992)), and the
existence of a contract as a matter of law, id. ¶ 13 (citing Prince,
Yeates & Geldzahler v. Young, 2004 UT 26, ¶ 13, 94 P.3d 179). The
supreme court observed that it would have been futile for the
parties to litigate these issues at trial because “both the existence of
an accord and satisfaction and the existence of a contract in these
cases were legal issues decided by the court.” Id. ¶ 14.
¶24 Here, the trial court’s determination that the Joint Check
Letter is facially ambiguous as a matter of law was dispositive of
the issue of ambiguity. It would have been futile for Blosch to
attempt to litigate whether the Joint Check Letter was facially
ambiguous at trial because the jury could not decide this purely
legal issue. See id. ¶ 12. In other words, while the trial court denied
Blosch’s motion for summary judgment because its legal ruling on
facial ambiguity meant there were disputed issues of material fact
20110315‐CA 10 2013 UT App 214Blosch v. Natixis
as to the parties’ intent, Blosch was effectively foreclosed by that
ruling from litigating the issue of ambiguity at trial. We may
therefore review the trial court’s legal ruling that was the reason for
its denial of Blosch’s summary judgment motion. See id. ¶ 14.
B. The Trial Court Did Not Err in Denying Blosch’s Motion for
Summary Judgment, Because the Joint Check Letter Is
Facially Ambiguous as to the Parties’ Intent To Make Blosch
a Third‐Party Beneficiary of the Loan Agreement.
¶25 As explained above, because Blosch’s appeal from the denial
of his summary judgment motion comes after trial, our review
of that denial is limited solely to the legal issue on which the
trial court ruled in denying Blosch’s motion, i.e., whether the
Joint Check Letter was, as a matter of law, facially ambiguous
with respect to the parties’ intent.3 “A contractual term or
provision is ambiguous if it is capable of more than one
reasonable interpretation because of uncertain meanings of terms,
missing terms, or other facial deficiencies.” Strohm v. ClearOne
Communications, Inc., 2013 UT 21, ¶ 34 (citation and internal
quotation marks omitted). “[F]acial ambiguity with regard to the
language of the contract . . . is a question of law, while the intent of
the parties is a question of fact.” Wilson, 2010 UT App 137, ¶ 8.
¶26 With respect to Blosch’s status as a third‐party beneficiary
of the Loan Agreement, “[a] third party may claim a contract
benefit only if the parties to the contract clearly express an
intention to confer a separate and distinct benefit on the third
party.” Bybee v. Abdulla, 2008 UT 35, ¶ 36, 189 P.3d 40 (citation and
internal quotation marks omitted). For the Joint Check Letter to
unambiguously show that the parties intended to make Blosch a
3
We note that Blosch frames these issues somewhat differ‐
ently in his arguments to this court. However, our conclusion
that the Joint Check Letter is facially ambiguous is dispositive of
the challenges Blosch raises to the trial court’s denial of his
summary judgment motion.
20110315‐CA 11 2013 UT App 214Blosch v. Natixis
third‐party beneficiary of the Loan Agreement, “[t]he contract must
be undertaken for the plaintiff’s direct benefit and the contract itself
must affirmatively make this intention clear.” See SME Indus., Inc.
v. Thompson, Ventulett, Stainback & Assocs., Inc., 2001 UT 54, ¶ 50, 28
P.3d 669 (emphasis added).
¶27 The operative language of the Joint Check Letter provides,
“Upon satisfaction of all requirements outlined in the Loan
Documents, [Natixis] will release the escrow funds associated with
the Ruth’s Chris restaurant via a check issued to both [Borrower]
and Mr. Blosch.” Blosch argues that this language unambiguously
demonstrates Natixis’s and Borrower’s intent to make Blosch a
third‐party beneficiary of the Loan Agreement. However, we see
nothing in the language of the Joint Check Letter from which
Natixis and Borrower’s intent in entering into the agreement can be
ascertained. Whether or not Natixis and Borrower intended the
Joint Check Letter for Blosch’s “direct benefit,” the language of the
Joint Check Letter itself does not “affirmatively make this intention
clear.” See id. ¶ 50. This “facial deficiency” is highlighted when
compared with joint payment agreements held to unambiguously
create a third‐party beneficiary status.
¶28 In Gender Machine Works, Inc. v. Eidal International Sales Corp.,
929 P.2d 1033 (Or. Ct. App. 1996), plaintiff Gender Machine Works
(Gender) was subcontracted by Eidal International Sales
Corporation (Eidal) to manufacture a shredder for sale to
defendant Archer Daniels Midland Company (ADM). Id. at 1036.
In order to satisfy a preexisting debt to Gender, and to compensate
Gender for manufacturing the shredder, Eidal arranged with ADM
for payment on the shredder to be made payable to both Eidal and
Gender. Id. at 1036 & n.2. The operative terms of the agreement at
issue there read,
Eidal’s joint venture manufacturing partner, Gender
Machine is processing a substantial amount of work
on this project (Purchase Order B89109200083RP)
and this letter is sent to your group informing you
20110315‐CA 12 2013 UT App 214Blosch v. Natixis
that they are authorized by Eidal to submit an
invoice with Eidal allowing them to collect the sum
of $225,000.00 for work performed by their group on
this project.
Eidal and Gender will invoice jointly with one
invoice with payment to be made by ADM in both
Gender’s and Eidal’s names.
Due to our financing needs, we are requesting this
acknowledgment by your group today so that we can
get started on this expedited project. We would like
to start today.
Id. at 1036 (internal quotation marks omitted). ADM signed the
agreement and confirmed its understanding that payment should
be made to both Eidal and Gender. Id. After the shredder was
delivered, Eidal invoiced ADM without reference to Gender, and
ADM paid the full amount in a check made payable to Eidal only.
Id. Gender brought a third‐party beneficiary breach of contract
claim against ADM. Id. at 1037. The Oregon Court of Appeals
determined that the parties’ intent to benefit Gender by the
agreement was unambiguous from the language of the agreement
because it stated both that Gender was performing substantial
work on the shredder which ADM had purchased and that
payment was therefore to be paid jointly to Eidal and Gender. Id.
at 1039.
¶29 In contrast, in Eastern Aviation Group, Inc. v. Airborne Express,
Inc., 8 Cal. Rptr. 2d 355 (Cal. Ct. App. 1992), plaintiff Eastern
Aviation Group (EAG) was an investor in Burbank Aeronautical
Corporation (BAC) and was entitled by contract between EAG and
BAC to 50% of the profits generated by BAC’s sales of aircraft noise
reduction systems. Id. at 356. BAC entered into a contract to sell
such systems to ABX Air, Inc. (ABX), with a provision stating, “‘All
payments hereunder shall be in good U.S. funds and shall not be
credited to the account of the Purchaser until such funds are
20110315‐CA 13 2013 UT App 214Blosch v. Natixis
cleared in the Designated Account, which shall be designated in
writing jointly by BAC and [EAG] . . . .’” Id. at 357 (omission in
original). ABX allegedly made payments directly to BAC, rather
than into the jointly designated account, and EAG attempted to sue
ABX for violating the sales contract between BAC and ABX on the
theory that EAG was made a third‐party beneficiary by the joint
payment provision. Id. The California Court of Appeal observed,
The fact that he is incidentally named in the contract,
or that the contract, if carried out according to its
terms, would inure to his benefit, is not sufficient to
entitle him to demand its fulfillment. It must appear
to have been the intention of the parties to secure to
him personally the benefit of its provisions.
Id. (citation and internal quotation marks omitted). The court held
that ABX’s obligation was only to BAC—the provision directing
payments to the joint account was merely to accommodate BAC,
not BAC’s creditors—and EAG was therefore not a third‐party
beneficiary of the sales contract. Id. at 358.
¶30 We conclude that the Joint Check Letter is ambiguous as to
whether the intent of the parties in entering into the agreement was
to directly benefit Blosch as a third‐party beneficiary. The operative
language of the Joint Check Letter contains no expression of intent
to benefit Blosch, and instead merely directs that “[u]pon
satisfaction of all requirements outlined in the Loan Documents,
[Natixis] will release the escrow funds associated with the Ruth’s
Chris restaurant via a check issued to both [Borrower] and Mr.
Blosch.” By comparison, the language of the joint payment
agreement in Gender demonstrated the parties’ intent to enter into
the agreement to “allow[ Gender] to collect the sum of $225,000.00
for work performed by their group on this project,” due to the
“substantial amount of work” performed by Gender, and the
“financing needs” of Eidal. 929 P.2d at 1036. Absent a similarly
specific and clear expression of the parties’ intent to benefit a third
party by entering into the agreement, we cannot read the plain
20110315‐CA 14 2013 UT App 214Blosch v. Natixis
language of the Joint Check Letter, which merely directs the
manner in which payment under a contract shall be made, as
clearly expressing an intent by the parties to assume an enforceable
obligation to the third‐party joint payee. See Eastern Aviation, 8 Cal.
Rptr. 2d at 358; Bybee, 2008 UT 35, ¶ 36. While there may be other
evidence extrinsic to the Joint Check Letter from which the parties’
intent could be determined, that is a factual question and is
inappropriate for decision on summary judgment. Thus, the trial
court properly concluded that the Joint Check Letter was
ambiguous as a matter of law, and the trial court’s denial of
summary judgment was therefore correct.
III. Sufficient Evidence Supported the Jury’s Verdict.
¶31 Blosch next claims that the evidence presented at trial was
legally insufficient for the jury to determine that Blosch was not a
third‐party beneficiary. A party challenging the sufficiency of the
evidence “has the heavy burden of marshaling the evidence in
support of the verdict and showing that the evidence, viewed in
the light most favorable to the verdict, is insufficient.” State v.
Maese, 2010 UT App 106, ¶ 16, 236 P.3d 155 (citation and internal
quotation marks omitted). “The existence of conflicting evidence,
alone, does not justify overturning a verdict for insufficient
evidence because ‘we assume that the jury believed those facts that
support its verdict.’” Stevensen 3rd East, LC v. Watts, 2009 UT App
137, ¶ 49, 210 P.3d 977 (quoting Canyon Country Store v. Bracey, 781
P.2d 414, 417 (Utah 1989)).
¶32 Blosch primarily attacks the sufficiency of the Loan Officer’s
testimony at trial regarding the Loan Officer’s knowledge and
intent—and therefore Natixis’s knowledge and intent—in drafting
the Joint Check Letter. Blosch argues that this evidence of Natixis’s
intent is legally insufficient for the jury to find that Blosch was not
a third‐party beneficiary of the Loan Agreement because the
language of the Joint Check Letter unambiguously establishes
Natixis and Borrower’s intent to make Blosch a third‐party
beneficiary, and Natixis and Borrower had the right to modify the
20110315‐CA 15 2013 UT App 214Blosch v. Natixis
provision of the Loan Agreement prohibiting third‐party
beneficiaries. We have determined that the Joint Check Letter did
not unambiguously establish Natixis and Borrower’s intent to
make Blosch a third‐party beneficiary of the Loan Agreement.
Therefore, because the Joint Check Letter is ambiguous as to the
parties’ intent, evidence that Natixis did not intend to make Blosch
a third‐party beneficiary of the Loan Agreement, if believed by the
jury, would be sufficient to support the jury’s verdict.
¶33 Here, the Loan Officer’s testimony that he believed the Loan
Agreement prohibited third‐party beneficiaries, that he did not
intend to modify the Loan Agreement by entering into the Joint
Check Letter, that he drafted the Joint Check Letter to
accommodate Borrower, and that he did not know that Borrower
had asked for the Joint Check Letter to be drafted in order to
facilitate a loan from Blosch, all tend to demonstrate that Natixis
did not intend to make Blosch a third‐party beneficiary of the Loan
Agreement. Additionally, the Loan Officer’s testimony that he
believed Borrower could revoke the Joint Check Letter or otherwise
direct the disbursement of funds notwithstanding the Joint Check
Letter, can be understood to show that Natixis did not believe or
intend the Joint Check Letter to create in Blosch an enforceable
right to receive payment of the Escrowed Funds from Natixis once
the terms of the Loan Agreement were satisfied. Based on this
evidence regarding Natixis’s intent, we do not believe that the
evidence so clearly preponderates against the jury’s verdict that
20110315‐CA 16 2013 UT App 214Blosch v. Natixis
reasonable people could not differ on the outcome of the case.4 See
Watts, 2009 UT App 137, ¶ 26.
¶34 Because we conclude that there was sufficient evidence for
the jury to find that Natixis did not intend to make Blosch a third‐
party beneficiary of the Loan Agreement, we affirm the jury’s
verdict that Blosch was not a third‐party beneficiary of the Loan
Agreement.
IV. Any Error in the Jury Instruction Was Harmless.
¶35 Finally, Blosch argues that the trial court erred in instructing
the jury on the effect of Natixis’s assignment of the Loan
Agreement. “To prevail on an appeal based on instructions to the
jury, this court must find both that the instruction was inaccurate
and that there is not a mere possibility, but a reasonable likelihood
that the error affected the result.” Stevensen 3rd East, LC v. Watts,
2009 UT App 137, ¶ 28, 210 P.3d 977 (citation and internal
quotation marks omitted). Thus, even if the jury instruction was
legally incorrect, we will reverse “only if [our] confidence in the
jury’s verdict is undermined.” Wilson v. IHC Hosps., Inc., 2012 UT
43, ¶ 24, 289 P.3d 369 (alteration in original) (citation and internal
quotation marks omitted).
¶36 The challenged jury instruction (Instruction 15) reads,
“Whether an assignment of a contract includes an assumption of
4
Blosch also argues that the Loan Officer’s testimony that
Natixis sold the Loan Agreement to another lender cannot sup‐
port the jury’s verdict that Blosch was not a third‐party benefi‐
ciary of the Loan Agreement. However, the jury never reached
the issue of whether Natixis’s assignment of the Loan Agreement
to another lender was a defense to Blosch’s claims, and the jury
did not need to consider the Loan Officer’s testimony on this
point to determine that Blosch was not a third‐party beneficiary
of the Loan Agreement.
20110315‐CA 17 2013 UT App 214Blosch v. Natixis
liabilities depends on the terms of the assignment and the parties’
intent.” Blosch argues that Instruction 15 fails to instruct the jury
that “an assignment does not relieve the assignor of duties and
obligations unless otherwise stated” and that such an instruction
is compelled by Winegar v. Froerer Corp., 813 P.2d 104 (Utah 1991).
See id. at 107–08 (explaining the legal distinction between
assignment of rights and delegation of obligations under a
contract). However, assuming without deciding that the jury
instruction was erroneous, Blosch must demonstrate a “reasonable
likelihood that the error affected the result” to justify reversal.
Watts, 2009 UT App 137, ¶ 28.
¶37 Blosch recognizes that because the jury determined that he
was not a third‐party beneficiary of the Loan Agreement, it never
reached the issue of whether Natixis’s assignment of the Loan
Agreement to another lender was a defense to Blosch’s claims.
Because the jury did not reach this issue, any error in Instruction 15
could not have affected the result with respect to the effect of the
assignment. Blosch instead argues that he was prejudiced by errors
in Instruction 15 because Natixis used the instruction in its closing
argument “to mislead the jury to believe that, as a result of
Natixis’s purported sale and assignment of [the Loan Agreement],
Natixis ceased to have any obligation to Blosch under the Joint
Check Letter, such that Blosch was not a third party beneficiary of
any agreement between Natixis and [Borrower].”
¶38 We do not agree that Natixis used Instruction 15 to mislead
the jury. In its closing argument, Natixis argued that even if the
jury found that Blosch had established the elements of his claim,
the assignment of the Loan Agreement would nevertheless serve
as a defense for Natixis against Blosch’s claims. In its only specific
reference to Instruction 15, Natixis argued only that the Loan
Agreement “made it absolutely clear” that assignment of
obligations was contemplated and that the assignee therefore had
all the responsibilities and rights under the Loan Agreement.
Nothing in these statements was misleading as to whether Blosch
20110315‐CA 18 2013 UT App 214Blosch v. Natixis
was a third‐party beneficiary of the Loan Agreement, and Natixis
did not argue that the jury could find that Blosch was not a third‐
party beneficiary as a result of the assignment of the Loan
Agreement. Under these circumstances, there is no reasonable
likelihood that Natixis’s argument, to the extent it was based on the
allegedly erroneous jury instruction, affected the jury’s verdict that
Blosch was not a third‐party beneficiary of an agreement.5 See id.Because our confidence in the verdict is not undermined, we
decline to reverse on this basis.
CONCLUSION
¶39 We have jurisdiction to hear this appeal because Blosch
timely filed a rule 59 motion with the trial court, effectively tolling
his time to appeal. Our review of the denial of Blosch’s summary
judgment motion is limited to the legal ruling that the Joint Check
Letter was ambiguous, and we determine that the trial court did
not err in so ruling. Blosch has not demonstrated that the evidence
was insufficient to sustain the jury’s verdict that he was not a third‐
party beneficiary of the Loan Agreement. Nor has he demonstrated
that there is a reasonable likelihood that any claimed error in the
jury instructions affected the jury’s verdict.
¶40 Affirmed.
5
Blosch also argues that the trial court erred by refusing to
instruct the jury that “[t]he fact Natixis sold [Borrower’s] loan
obligation to a third party is not a defense to any of Plaintiff’s
claims.” However, for the same reasons explained previously, see
supra ¶¶ 37–38, there is no likelihood that this refusal, even if
erroneous, affected the jury’s verdict.
20110315‐CA 19 2013 UT App 214