Skolnick v. Exodus Healthcare Network, PLLC ( 2018 )

2018 UT App 209THE UTAH COURT OF APPEALS
SARA SKOLNICK,
Appellee,
v.
EXODUS HEALTHCARE NETWORK, PLLC,
Appellant.
Opinion
No. 20170291-CA
Filed November 8, 2018
Third District Court, West Jordan Department
The Honorable Bruce C. Lubeck
No. 150900747
Gary L. Johnson, Zachary E. Peterson, and Cortney
Kochevar, Attorneys for Appellant
Gary R. Guelker, Attorney for Appellee
JUDGE RYAN M. HARRIS authored this Opinion, in which
JUDGES MICHELE M. CHRISTIANSEN FORSTER and
DAVID N. MORTENSEN concurred.
HARRIS, Judge:
¶1 Sara Skolnick, a physician, entered into a written
employment agreement (the Employment Agreement) with
Exodus Healthcare Network, PLLC (Exodus), a medical services
company. Pursuant to that agreement, Skolnick agreed to work
in two of Exodus’s medical clinics, and Exodus agreed to pay
Skolnick for her services. Near the end of Skolnick’s first year of
employment, Exodus stopped paying Skolnick, and Skolnick
sued for breach of contract. The district court entered summary
judgment in Skolnick’s favor, and also ordered Exodus to pay
Skolnick’s attorney fees. Exodus now appeals, and we affirm the
district court’s entry of summary judgment on Skolnick’s claim
for breach of contract. We also affirm the district court’s
Skolnick v. Exodus Healthcare
conclusion that Skolnick is entitled to recover attorney fees. But
we reverse the district court’s decision to award Skolnick the
entire amount of fees she requested, and remand the case for
entry of judgment in a lower amount, as well as for
quantification of the attorney fees Skolnick incurred on the
successful portion of her defense of Exodus’s appeal.
BACKGROUND
¶2 Exodus owns and operates health care clinics in Salt Lake
County, Utah, and employs physicians to provide a wide array
of medical services. In November 2013, Exodus entered into the
Employment Agreement with Skolnick, a licensed obstetrician
and gynecologist. That agreement called for a three-year initial
term of employment, starting on February 1, 2014, with a
renewal provision that could potentially extend Skolnick’s term
of employment beyond three years. Under the agreement,
Exodus was to pay Skolnick a “[m]onthly [b]ase
[c]ompensation” payable in biweekly installments.
¶3 At about the same time, Skolnick also entered into a
separate agreement (the Recruitment Agreement) with Jordan
Valley Medical Center (Hospital), a local hospital. The
Recruitment Agreement was intended to work in tandem with
the Employment Agreement, and each incorporated the other.1
1. Skolnick, Hospital, and Exodus entered into this tripartite
arrangement in an effort to comply with the provisions of the
Stark Law, 42 U.S.C. § 1395nn (2012), a federal law which limits
the ability of physicians to refer Medicare or Medicaid patients
to hospitals with which they have financial relationships, but
contains an exception for physician recruitment. See, e.g., United
States ex rel. Bartlett v. Ashcroft, 39 F. Supp. 3d 656, 661–62, 669
(W.D. Pa. 2014); see generally 61 Am. Jur. Proof of Facts 3d 245
(2018). In this case, we are not asked to determine whether this
arrangement is in fact in compliance with the Stark Law.
20170291-CA 2 2018 UT App 209Skolnick v. Exodus Healthcare
Under the Recruitment Agreement, Skolnick promised to
maintain a medical practice within Hospital’s service area for
three years, and in exchange Hospital agreed to “loan” Skolnick
“certain benefits,” including a “[g]uaranteed [m]onthly
[a]mount.” In the Recruiting Agreement, Skolnick acknowledged
that “a portion of the benefits will be paid directly or indirectly
to” Exodus. Hospital promised to forgive the loan in its entirety
if Skolnick maintained a practice in the Hospital’s service area
for the full three-year term.
¶4 The Employment Agreement between Skolnick and
Exodus referenced the Recruiting Agreement between
Skolnick and Hospital, and noted that, pursuant to the
Recruiting Agreement, Skolnick was “entitled to receive” the
“[g]uaranteed [m]onthly [a]mount” from Hospital. The
Employment Agreement stipulated that all payments from
Hospital to Skolnick “shall be made directly to” Skolnick, but
obligated Skolnick, each time she received a payment from
Hospital, to “endorse over or pay to” Exodus “all such
amounts received from Hospital immediately upon receipt.”
Skolnick and Exodus agreed that the payments Skolnick
received from Hospital were to be used by Exodus to pay
Skolnick’s salary and benefits.
¶5 Skolnick began working for Exodus in early March 2014.
For about nine months, the arrangement proceeded uneventfully
according to the terms of the agreements—Hospital made
payments to Skolnick, who passed along those payments to
Exodus, who in turn paid Skolnick’s salary and benefits using
the funds received from Hospital.
¶6 On December 1, 2014, Skolnick sent Exodus a letter
stating that she would be terminating her employment at the
end of February 2015. After receiving word that Skolnick
intended to terminate her employment with Exodus, Hospital
stopped making its guaranteed monthly payments, and Exodus
20170291-CA 3 2018 UT App 209Skolnick v. Exodus Healthcare
stopped paying Skolnick for her services. 2 However, Skolnick
kept working and generating accounts receivable for Exodus
until January 13, 2015, when Exodus sent Skolnick a letter
terminating her employment. In the letter, Exodus stated that
Hospital had informed Exodus that it would make no further
payments pursuant to the Recruiting Agreement, and explained
that Exodus considered these events cause to terminate
Skolnick’s employment. Skolnick never received any
compensation for services rendered between November 22, 2014
and January 13, 2015.
¶7 A few weeks after her employment with Exodus ended,
Skolnick filed a lawsuit against Exodus, alleging that Exodus
had breached the Employment Agreement by failing to pay her. 3
After discovery, both parties moved the court for summary
judgment on Skolnick’s breach of contract claim. Skolnick
argued that the contract required that Exodus pay her for her
work, and that she had not been paid. Exodus countered that its
obligation to pay Skolnick was contingent on Hospital making
the guaranteed monthly payments, and because Hospital had
not made any such payments after November 2014, it was not
obligated to compensate Skolnick.
¶8 In late December 2016, after briefing and oral argument,
the district court granted Skolnick’s motion and denied
Exodus’s. The district court determined that “Skolnick
2. The last check Skolnick received from Exodus was dated
December 6, 2014, and covered the pay period between
November 22 and December 6, 2014, although Exodus stopped
payment on this check before Skolnick could access the funds.
3. Hospital also filed suit against Skolnick and Exodus, alleging
breach of the Recruiting Agreement, and that case was
consolidated with Skolnick’s suit against Exodus. Hospital has
since settled its claims against both Skolnick and Exodus, and is
not a party to this appeal.
20170291-CA 4 2018 UT App 209Skolnick v. Exodus Healthcare
performed her duties under [the Employment Agreement], [and]
that Exodus did not pay the salary Skolnick earned between
November 22, 2014 and January 13, 2015.” The court further
determined that Exodus’s obligation to pay Skolnick was not
contingent on payments from Hospital, stating that “[t]he basics
of the agreement are that Exodus shall pay Skolnick for services
rendered. The contract cannot be read, considering it as a whole,
to mean that Skolnick would work for no pay if for some reason
[Hospital] stopped payment under the Recruitment Agreement.”
The district court awarded Skolnick damages in the amount of
$35,707.92, the amount requested in Skolnick’s complaint, and
“attorney fees and costs under the Employment Agreement.”
The court then directed Skolnick’s counsel “to provide an
affidavit of fees,” and stated that Exodus “may respond as to
necessity and reasonableness.”
¶9 On February 2, 2017, Skolnick filed a motion for attorney
fees, a declaration of attorney fees, and a proposed judgment,
seeking fees in the amount of $40,894. Eleven days later, on
February 13, 2017, Skolnick filed a supplemental declaration,
identifying an additional $1,805.50 in fees. On the morning of
February 16, the fourteenth day after Skolnick filed her motion,
the district court—having seen no opposition to Skolnick’s
attorney fees motion—entered a final judgment awarding
Skolnick $42,489.50 in attorney fees. Later that same day, Exodus
filed a motion to set aside that judgment, as well as a
memorandum in opposition to Skolnick’s motion for attorney
fees. Exodus asserted that the judgment had been entered before
the time for Exodus to respond to Skolnick’s motion had run.
¶10 On February 28, in response to Exodus’s motion, the
district court entered a ruling and order setting aside its attorney
fees award, and reducing the award to $24,300 based on its
determination as to the reasonableness of the requested amount
of fees. On March 2, Skolnick filed a motion asking the court to
reconsider its February 28 ruling, arguing that Exodus’s
objections to her attorney fees motion had been untimely. On
March 27, the district court vacated its February 28 ruling, after
20170291-CA 5 2018 UT App 209Skolnick v. Exodus Healthcare
determining that rule 73 of the Utah Rules of Civil Procedure
gave Exodus only seven days—rather than fourteen—to object to
Skolnick’s fees motion. The court reinstated its February 16
judgment, awarding Skolnick $42,489.50 in attorney fees.
ISSUES AND STANDARDS OF REVIEW
¶11 Exodus now appeals, and asks us to consider two issues.
First, Exodus argues that the district court erred by entering
summary judgment in Skolnick’s favor on her claim for breach
of contract. “Questions of contract interpretation not requiring
resort to extrinsic evidence are matters of law, which we review
for correctness.” Fort Pierce Indus. Park Phases II, III & IV Owners
Ass’n v. Shakespeare, 2016 UT 28, ¶ 15, 379 P.3d 1218 (quotation
simplified). We review a court’s grant of summary judgment
“for correctness, with the facts and all reasonable inferences
drawn therefrom being viewed in the light most favorable to the
nonmoving party.” Id. ¶ 17 (quotation simplified).
¶12 Second, Exodus asserts that the district court erred by
determining that it had only seven—rather than fourteen—days
to respond to Skolnick’s attorney fees request, and by
accordingly refusing to consider its memorandum in opposition
and thereafter awarding Skolnick $42,489.50 in attorney fees.
“The interpretation of a rule of procedure is a question of law
that we review for correctness.” Gardiner v. Taufer, 2014 UT 56,
¶ 13, 342 P.3d 269 (quotation simplified).
ANALYSIS
I
¶13 Exodus’s first challenge is to the district court’s
substantive ruling on Skolnick’s claim for breach of contract.
Exodus maintains that its contractual obligation to pay Skolnick
was contingent on a condition precedent, namely, that Hospital
would provide the funds from which Skolnick’s salary would be
20170291-CA 6 2018 UT App 209Skolnick v. Exodus Healthcare
paid. Exodus argues that, because Hospital stopped making the
guaranteed monthly payments, it had no obligation to pay
Skolnick. The district court rejected that argument, and so do we.
¶14 In interpreting a contract, we “first look to the writing
alone to determine its meaning and the intent of the contracting
parties.” Nolin v. S & S Constr. Inc., 2013 UT App 94, ¶ 12, 301
P.3d 1026 (quotation simplified). If the language is
unambiguous, “the parties’ intentions are determined from the
plain meaning of the contractual language, and the contract may
be interpreted as a matter of law.” Id. (quotation simplified). “A
contractual term is ambiguous if, looking to the language of the
contract alone, it is reasonably capable of being understood in
more than one way such that there are tenable positions on both
sides.” Deep Creek Ranch, LLC v. Utah State Armory Board, 2008 UT
3, ¶ 13, 178 P.3d 886. “But terms are not ambiguous simply
because one party seeks to endow them with a different
interpretation according to his or her own interests.” Mind
& Motion Utah Invs., LLC v. Celtic Bank Corp., 2016 UT 6, ¶ 24, 367
P.3d 994 (quotation simplified).
¶15 The issue in this case hinges on whether Exodus’s
obligation to pay Skolnick is contingent on a condition
precedent, as Exodus argues, or is a simple covenant, as Skolnick
argues. “The distinction between covenants and conditions is an
important one because each imposes qualitatively different
kinds of obligations.” Id. ¶ 19. A covenant is “a promise between
the parties to the contract about their mutual obligations,” and
represents “the core bargained-for exchange of an agreement.”
Id. (quotation simplified). “Conditions are different. A condition
is an event, not certain to occur, which must occur before
performance under a contract becomes due.” Id. ¶ 20 (quotation
simplified).
¶16 Our supreme court has noted “three principal differences
between conditions and covenants.” Id. The first is that “the
parties to the contract have no duty to perform until the
condition is fulfilled, so the failure of a condition relieves the
20170291-CA 7 2018 UT App 209Skolnick v. Exodus Healthcare
parties of all of their contractual duties.” Id. “Second, the parties
have no remedy for breach of contract if a condition is not
fulfilled, because at that point there is simply no contract to
breach.” Id. “Third, conditions typically fall outside the control
of the parties to the contract, often requiring some
environmental trigger (such as ‘weather permitting’) or action by
a third party (such as ‘upon the lender’s approval’) for the
contract to begin.” Id. ¶ 21 (quotation simplified). Covenants, by
contrast, “are almost always within the control of the contracting
parties.” Id. (quotation simplified).
¶17 “To determine whether a contractual obligation is a
covenant or a condition, we examine the language of the
provision in question and the nature of the agreement itself.” Id.
¶ 22. Often, the language of the contract will provide clues as to
whether the obligation in question is conditional. For instance,
“express terms like ‘unless,’ ‘on condition that,’ ‘provided that,’
and ‘if,’ often create conditions.” Id. ¶ 23. Such language is not
talismanic; indeed, “regardless of the precise terms used in the
contract, the parties’ degree of control over the fulfillment of an
obligation remains a significant indication of whether the parties
intended a performance obligation to be” conditional. Id.
(quotation simplified).
¶18 The language of the Employment Agreement strongly
indicates that Exodus’s obligation to pay Skolnick for her work
was not conditional. Indeed, Section 3.2 of that agreement
provides that Exodus “shall pay” Skolnick her monthly base
compensation in biweekly installments. The phrase “shall pay”
is a phrase that usually denotes mandatory, unconditional
obligations. See id. ¶ 27 (stating that “shall” means having “a
duty to,” “is required to,” or “mandatory,” and that the word
“shall” in statutes “creates mandatory obligations” (quotation
simplified)). And even Exodus acknowledges that there is
nothing in Section 3.2 itself—the section containing Exodus’s
payment obligation—that indicates a conditional obligation.
Instead, Exodus argues that, in two places elsewhere in the
20170291-CA 8 2018 UT App 209Skolnick v. Exodus Healthcare
broader Section 3, conditional language is used that indicates
that Exodus’s obligation to pay Skolnick was conditional.
¶19 First, Exodus points to language in the introductory
preface to Section 3, which section is captioned “Compensation.”
In the preface, the parties agreed that, “[s]ubject to the
conditions set forth in this Section, [Exodus] shall pay” Skolnick
for services rendered. This is certainly conditional language, but
because it appears in the introductory sentence prefacing the
entire Section 3, it applies to the entire section generally, and not
to the payment obligation in Section 3.2 specifically. Section 3 is
a long section containing ten different subparts, and providing
rules for several different potential eventualities concerning
Skolnick’s compensation, including a possible switch from
simple base salary to “[p]roductivity-[b]ased [c]ompensation,”
and Skolnick’s future possible failure to repay her loan to
Hospital. The most plausible meaning of this phrase, in context,
is that Exodus should pay Skolnick according to the formula in
effect at the time of payment, as set forth in Section 3, which may
differ depending on various eventualities. Exodus’s position, by
contrast, essentially amounts to a request that we construe the
introductory language in the preface to Section 3 as transforming
every specific direct covenant contained anywhere within
Section 3—and there are many—into conditional promises. This
is not a plausible reading of the preface.
¶20 Second, Exodus points to language in Section 3.1 stating
that the guaranteed monthly payments shall be made by
Hospital directly to Skolnick, “[p]rovided” that Skolnick “shall
then endorse over or pay to [Exodus] all such amounts received
from Hospital.” This is also conditional language, but it is
limited to a specific scenario: Skolnick’s obligation to “endorse
over or pay to” Exodus the payments she receives from Hospital
is conditioned on Skolnick actually receiving the payments from
Hospital. If Skolnick does not actually receive any payments
from Hospital, she is not independently obligated to make
payments to Exodus. This conditional language has nothing
20170291-CA 9 2018 UT App 209Skolnick v. Exodus Healthcare
directly to do with Exodus’s specific obligation, set forth in a
different section, to pay Skolnick for services rendered.
¶21 Indeed, the conditional language used in Section 3.1
regarding Skolnick’s obligation to pass along Hospital’s
payments to Exodus demonstrates that the parties knew how to
make specific obligations within Section 3 conditional when that
was their intent. See Mind & Motion, 2016 UT 6, ¶ 29 (stating that
the parties’ use of truly conditional language elsewhere in the
agreement—but not in the phrase at issue—demonstrated that
the parties “understood how to consciously identify a condition
precedent when they so desired”). The parties chose not to use
such language in Section 3.2—when they easily could have done
so, had they so intended—to condition Exodus’s obligation to
pay Skolnick upon Hospital’s payment of the guaranteed
monthly amount.
¶22 Finally, Exodus asserts that the district court’s
interpretation of the agreement fails to give effect to all of its
provisions, and specifically argues that Section 3.1 of the
agreement has been rendered superfluous. We disagree. Section
3.1 retains vital importance—it indicates that, when received, the
Hospital’s guaranteed monthly payment is to be used to pay
Skolnick’s salary and benefits, and that Skolnick is not permitted
to simply keep those payments for herself but, rather, is
obligated to remit those payments to Exodus so that they can be
used for that purpose. It does no violence to that provision to
conclude that, even if Hospital’s payments do not come in,
Exodus is still obligated to pay Skolnick for services rendered. 4
4. Exodus also argues in its brief that Hospital’s “failure to
provide [g]uaranteed [m]onthly [a]mount payments frustrated
the purpose” of the two agreements and therefore “excused
Exodus’[s] performance.” Frustration of purpose is one of
“[t]hree distinct grounds for discharge of the obligor’s duty”
under a contract. See Restatement (Second) of Contracts, Chapter
(continued…)
20170291-CA 10 2018 UT App 209Skolnick v. Exodus Healthcare
¶23 For all of these reasons, we reject Exodus’s argument that
its obligation to pay Skolnick for her services was contingent on
receiving the guaranteed monthly payment from Hospital.
Under the plain language of the Employment Agreement,
Exodus made a covenant to pay Skolnick. Its failure to do so
constituted a breach of contract. We therefore affirm the district
court’s grant of summary judgment in Skolnick’s favor.
II
¶24 Exodus’s second challenge is to the district court’s
interpretation and application of rule 73 of the Utah Rules of
Civil Procedure. Exodus argues that the court erred by allowing
Exodus only seven days to object after Skolnick filed a motion to
recover attorney fees. We find this argument persuasive.
¶25 Rule 73(d) sets forth an expedited procedure for litigation
regarding the amount of attorney fees, if “liability for fees” has
already been decided. See Utah R. Civ. P. 73(d). Under that
procedure, a party seeking fees may opt not to file a motion and,
instead, may rely only on the filing of “an affidavit and a
(…continued)
11 Introductory Note (Am. Law Inst. 1981). “Frustration of
purpose differs from the defense of impossibility only in that
performance of the promise, rather than being impossible or
impracticable, is instead pointless.” Tech Center 2000, LLC v. Zrii,
LLC, 2015 UT App 281, ¶ 32, 363 P.3d 566 (quotation simplified).
It was certainly not impracticable for Exodus to pay Skolnick;
indeed, Exodus makes no argument that it lacked the ability to
pay Skolnick for her services. Likewise, it was certainly not
“pointless” for Exodus to pay Skolnick—after all, she continued
to work for Exodus and generate accounts receivable on its
behalf. Accordingly, Exodus cannot demonstrate the elements of
a “frustration of purpose” defense, and therefore we conclude
that Exodus was not relieved of its contractual obligations due to
frustration of purpose.
20170291-CA 11 2018 UT App 209Skolnick v. Exodus Healthcare
proposed order,” and if that procedure is followed, the opposing
party must file any objection to the “claimed amount” of fees
“within 7 days after the affidavit and proposed order are filed.”
Id. Because it had already decided, in its summary judgment
ruling, that Skolnick was entitled to an award of attorney fees,
the district court relied upon rule 73(d) in determining that
Exodus had only seven days—rather than fourteen—to object to
Skolnick’s claimed amount of attorney fees.
¶26 Exodus asserts, however, that the district court’s reliance
upon rule 73(d), on the facts of this case, was erroneous, because
Skolnick did more than simply file an affidavit and a proposed
order: Skolnick also elected to file a separate motion for attorney
fees. Exodus asserts that, pursuant to rule 7(d)(1) of the Utah
Rules of Civil Procedure, a party has fourteen days—rather than
seven—to file a memorandum opposing any motion, and argues
that its opposition was therefore timely. See Utah R. Civ. P.
7(d)(1).
¶27 In response, Skolnick asserts that rule 73(a) requires that
she file a motion, and not just a declaration and a proposed
judgment. See Utah R. Civ. P. 73(a) (stating that “[a]ttorney fees
must be claimed by filing a motion”). Skolnick argues that she
filed a motion for attorney fees, rather than just a declaration and
a proposed judgment, simply to fulfill this requirement, and
that, because liability for fees had already been decided, rule
73(d) controls the timing for any response to her motion for
attorney fees.
¶28 We find Exodus’s argument more persuasive, for two
reasons. First, Exodus’s interpretation of rule 73 is in harmony
with the mandates of rule 7. As Exodus points out, that rule
allows fourteen days—rather than seven—for nonmoving
parties to file memoranda in opposition to motions, see Utah R.
Civ. P. 7(d)(1), but allows only seven days for parties to “object
to the form of [a] proposed order,” see id. R. 7(j)(4). Exodus’s
reading of rule 73 imports this basic dichotomy—fourteen days
for motions, seven days for proposed orders—from rule 7 into
20170291-CA 12 2018 UT App 209Skolnick v. Exodus Healthcare
rule 73, and harmonizes the two rules in a way that Skolnick’s
interpretation does not. If a party files a motion for attorney fees
pursuant to rule 73(a), the opposing party (pursuant to rule
7(d)(1)) has fourteen days to file a memorandum in opposition.
On the other hand, if liability for fees has already been decided,
a party can elect to take advantage of the expedited process, and
may obtain quantification of previously-awarded attorney fees
simply by filing a declaration and a proposed order; if a party
elects to use this route, the opponent is allowed only seven days
to respond.5
¶29 Second, and relatedly, we note that Skolnick requested
attorney fees in her original motion for summary judgment. In
our view, this request fulfilled the requirement of rule 73(a)
that “[a]ttorney fees must be claimed by filing a motion”; there
was no need for Skolnick to later file a second, separate motion
for attorney fees, after the court had granted her summary
judgment and stated that she was entitled to fees. Indeed, the
court expressly stated, in its summary judgment order, that
“Skolnick is entitled to attorney fees and costs under the
Employment Agreement” and invited Skolnick to take
advantage of the expedited process, stating that “[c]ounsel is to
provide an affidavit of fees” and a “suggested form of
Judgment.”
¶30 We recognize that Skolnick may have filed the separate
February 2 motion for attorney fees out of an abundance of
caution, and in an effort to make sure she complied with rule
73(a). But whatever her motivation, the fact that she filed a
5. In our view, this interpretation is consistent with the
intentions of the rule’s drafters, as expressed in the language of
rule 73, although we acknowledge that the language of the rule
could potentially be worded more clearly. If our interpretation is
not in harmony with the intent of the rule’s drafters, we
encourage the supreme court, through its Advisory Committee
on the Rules of Civil Procedure, to consider revising the rule.
20170291-CA 13 2018 UT App 209Skolnick v. Exodus Healthcare
separate motion—rather than merely a declaration and a
proposed judgment, as the court asked her to do—meant that,
pursuant to rule 7(d)(1), Exodus had fourteen days to file any
opposition to that motion. Therefore, the opposition
memorandum that Exodus filed on February 16 was timely, and
the court erred by determining otherwise.
¶31 In the unusual procedural posture of this case, the district
court actually considered and ruled upon Exodus’s challenge to
Skolnick’s claimed amount of attorney fees and, in a
(subsequently vacated) February 28 ruling, determined that a
“reasonable” amount of fees for Skolnick to be awarded under
the circumstances was $24,300. Neither party challenges the
district court’s reasonableness determination on appeal, not even
as an alternative argument. Accordingly, we see no need to
remand the case for further proceedings regarding the
reasonableness of Skolnick’s claimed fees; instead, we simply
vacate the court’s March 27 order, due to the court’s erroneous
ruling that Exodus’s opposition memorandum was untimely,
and reinstate the district court’s February 28 ruling regarding the
reasonableness of Skolnick’s attorney fees, and remand for entry
of judgment in keeping with that ruling.
III
¶32 Finally, we must consider whether, and to what extent,
Skolnick is entitled to recover the attorney fees she incurred on
appeal. “When a party who received attorney fees below
prevails on appeal, the party is also entitled to fees reasonably
incurred on appeal.” Valcarce v. Fitzgerald, 961 P.2d 305, 319
(Utah 1998) (quotation simplified).
¶33 When attorney fees are awarded under a contractual
provision, the award “is allowed only in accordance with the
terms of the contract.” See R.T. Nielson Co. v. Cook, 2002 UT 11,
¶ 17, 40 P.3d 1119. The Employment Agreement states that, “[i]n
the event of a dispute between the parties arising under this
Agreement, the party prevailing in such dispute shall be entitled
20170291-CA 14 2018 UT App 209Skolnick v. Exodus Healthcare
to collect such party’s costs from the other party, including
without limitation court and investigation costs and reasonable
attorneys’ fees and disbursements.” In ordinary situations,
“determining the ‘prevailing party’ for purposes of awarding
fees and costs is quite simple. Plaintiff sues defendant for money
damages; if plaintiff is awarded a judgment, plaintiff has
prevailed.” Myrah v. Campbell, 2007 UT App 168, ¶ 32, 163 P.3d
679 (quotation simplified). However, when a party “did not
retain all of their trial victory on appeal . . . some adjustment
may be necessary so that they do not recover fees attributable to
issues on which they did not prevail.” Valcarce, 961 P.2d at 319
(quotation simplified); cf. Gilbert Dev. Corp. v. Wardley Corp., 2010
UT App 361, ¶ 52, 246 P.3d 131 (stating that “[i]f attorney fees
are recoverable by contract, a party is entitled only to those fees
attributable to the successful vindication of contractual rights”
(quotation simplified)).
¶34 In this appeal, Skolnick clearly prevailed on the issue we
discussed above, in Part I, regarding the meaning of the
payment provision in the Employment Agreement. But we
cannot plausibly conclude that Skolnick prevailed on the
attorney fees and rule interpretation issue discussed in Part II;
indeed, on that issue, Exodus substantially prevailed. We
therefore grant Skolnick’s request for fees on appeal insofar as it
pertains to her successful defense of the interpretation of the
Employment Agreement, but deny her request for fees on appeal
incurred in the defense of her interpretation of rule 73. See
generally Dale K. Barker Co., P.C. v. Bushnell, 2010 UT App 189,
¶ 19, 237 P.3d 903 (awarding fees incurred on appeal for the
“successful defense of the [district] court’s breach of contract
determinations” but declining to award fees “associated with
[the party’s] unsuccessful arguments related to the [district]
court’s original determination of attorney fees and costs”).
Accordingly, we remand this case to the district court for a
determination of the amount of attorney fees and costs
reasonably incurred and recoverable on appeal.
20170291-CA 15 2018 UT App 209Skolnick v. Exodus Healthcare
CONCLUSION
¶35 We conclude that Exodus’s obligation to pay Skolnick was
not subject to any condition precedent, and therefore affirm the
district court’s grant of summary judgment in favor of Skolnick
on her claim for breach of the Employment Agreement. We also
affirm the district court’s determination that Skolnick is entitled
to recover attorney fees pursuant to the Employment
Agreement. The district court erred, however, when it
determined that rule 73 provided Exodus only seven days to
respond to Skolnick’s separately-filed motion for attorney fees,
and therefore the district court should have considered Exodus’s
opposition memorandum. Accordingly, we vacate the district
court’s March 27 order, and reinstate the district court’s
February 28 ruling and order, and remand the case for entry of
judgment in keeping with that order, and for quantification of
Skolnick’s attorney fees incurred on the successful portion of her
defense of this appeal.
20170291-CA 16 2018 UT App 209