Federated Capital Corporation v. Shaw ( 2018 )

2018 UT App 120THE UTAH COURT OF APPEALS
FEDERATED CAPITAL CORPORATION,
Appellant,
v.
JAMES N. SHAW,
Appellee.
Opinion
No. 20140681-CA
Filed June 21, 2018
Third District Court, Salt Lake Department
The Honorable Denise P. Lindberg
No. 139910356
Barnard N. Madsen, Aaron P. Dodd, and Peter
Reichman, Attorneys for Appellant
Lester A. Perry, Attorney for Appellee
JUDGE MICHELE M. CHRISTIANSEN authored this Opinion, in
which JUDGES RYAN M. HARRIS and DIANA HAGEN concurred.
CHRISTIANSEN, Judge:
¶1 Two of the three contentions presented in this case are
identical to those we address in two factually similar cases also
issued today. In Federated Capital Corp. v. Abraham, 2018 UT App
117, we concluded that the appellant waived any objection to the
adequacy with which the appellee pleaded a statute-of-
limitations defense. And in Federated Capital Corp. v. Deutsch,
2018 UT App 118, we concluded that the appellant had not
presented to the district court the issue raised on appeal, and we
consequently deemed the issue unpreserved. In the instant case,
the same appellant, Federated Capital Corporation (Federated),
raises the same two claims. Because the filings and factual
background of this case are functionally identical to Abraham and
Federated Capital Corporation v. Shaw
Deutsch, we reach the same conclusions on Federated’s first two
contentions.
¶2 Federated also raises one additional claim regarding
appellee James N. Shaw’s place of performance under a credit
card contract. However, because Federated has failed to address
the basis for the district court’s ruling as to this claim, Federated
has failed to persuade us that the district court’s ruling on that
claim was incorrect. We affirm and remand for the limited
purpose of calculating Shaw’s attorney fees incurred on appeal.
BACKGROUND
¶3 Federated, a Michigan corporation, brought suit against
Shaw, a Texas resident, alleging that he had breached a credit
card contract that required him to make payments in
Pennsylvania. Specifically, Federated alleged that Shaw had
failed to make credit card payments to Federated’s predecessor-
in-interest totaling $25,901.76 and that he consequently owed
Federated that amount plus approximately five years of interest
at 34.99%. A provision of the contract specified that Utah law
applied, that Utah courts were the proper forum, and that the
parties consented to Utah courts’ jurisdiction (the Controlling
Law & Jurisdiction Clause). Shaw filed an answer, asserting that
a statute of limitations barred the suit. Shaw then moved for
summary judgment, arguing that because the place of
performance was Pennsylvania and that state’s four-year statute
of limitations had already run, Utah’s borrowing statute barred
the suit. See generally 42 Pa. Cons. Stat. § 5525(a)(8) (2002); Utah
Code Ann. § 78B-2-103 (LexisNexis 2012). 1
1. Utah’s borrowing statute provides,
A cause of action which arises in another
jurisdiction, and which is not actionable in the
(continued…)
20140681-CA 2 2018 UT App 120Federated Capital Corporation v. Shaw
¶4 Notably, many of the pleadings, documents, and exhibits
filed in the district court in this case were functionally identical
to those filed in Abraham and Deutsch. Indeed, the defendants
were all represented by the same counsel, and most of the claims
and arguments raised by the parties were worded identically.
The defendants’ answers all raised the same defenses. And the
defendants’ motions for summary judgment were also
essentially the same.
¶5 The district court held a telephonic hearing regarding
Shaw’s summary judgment motion. The court agreed with
Shaw’s arguments and, as relevant here, granted Shaw’s motion.
Federated appeals, contending (1) that the district court erred by
failing to sua sponte recognize that Shaw’s answer did not
adequately plead a statute-of-limitations defense; (2) that the
district court erred by applying Utah’s borrowing statute so as to
import Pennsylvania’s statute of limitations and by not applying
Utah’s six-year statute of limitations for actions founded on
contracts; and (3) alternatively, that the parties modified their
original contract and “chose Utah as the place of Shaw’s
performance” such that his “failure to pay in Utah constitutes a
breach of contract ‘arising’ in Utah subject to Utah’s six-year
statute of limitations” for actions founded on contracts. See
generally Utah Code Ann. § 78B-2-309 (LexisNexis 2012).
Federated’s briefing of the first contention is identical to the
briefing it presented in Abraham. And its briefing of the second
contention is virtually identical to the briefing it presented in
Deutsch. It therefore appears that this case combines the
(…continued)
other jurisdiction by reason of the lapse of time,
may not be pursued in this state, unless the cause
of action is held by a citizen of this state who has
held the cause of action from the time it accrued.
Utah Code Ann. § 78B-2-103 (LexisNexis 2012).
20140681-CA 3 2018 UT App 120Federated Capital Corporation v. Shaw
contentions raised in Abraham and Deutsch into a single case,
with one additional issue presented regarding Shaw’s place of
performance under the credit card contract. Neither party
contends that the first two issues in the instant case differ in any
significant way from the issues presented individually in
Abraham and Deutsch.
ANALYSIS
I. Waiver
¶6 Federated first contends that, “[b]y not specifying the
statute of limitations by section and reference number,” Shaw
failed to properly plead his statute-of-limitations defense and
thereby lost the right to pursue the defense. The relevant portion
of Shaw’s answer stated, “As an affirmative defense, the
defendant alleges that the plaintiff’s claims are barred by the
statute of limitations.” Shaw also asserted elsewhere in his
answer, “As an affirmative defense, the defendant alleges that
the claims of the plaintiff are barred by the statute of limitations,
which may be the four year limitations period of the
Pennsylvania statute for written contracts.” Shaw then filed a
motion for summary judgment, which included citations to the
pertinent statutes of limitations. Federated responded to that
motion on its merits, without objecting to the adequacy of the
answer.
¶7 We rejected Federated’s identical claim in Abraham. There,
the defendant’s answer stated, “As an affirmative defense, the
defendant alleges that this action fails because of the statute of
limitations.” Federated Capital Corp. v. Abraham, 2018 UT App 117,
¶ 3. Like Shaw, the defendant went on to file a motion for
summary judgment that identified the applicable statutes of
limitations, and Federated responded to that summary judgment
motion on its merits. Id. ¶¶ 3–4. Federated did so without
objecting to the adequacy of the defendant’s answer. Id. ¶ 10. We
20140681-CA 4 2018 UT App 120Federated Capital Corporation v. Shaw
concluded that, by doing so, Federated had waived any
objection predicated on rule 9(i) of the Utah Rules of Civil
Procedure. 2 Id. ¶ 11.
¶8 In both cases, the answer asserted a statute-of-limitations
defense without identifying the applicable statute by section
number. In both cases, the defendant filed a motion for summary
judgment that did identify the applicable statute. And in both
cases, Federated responded to the motion for summary
judgment without objecting to the defense’s lack of specificity as
pleaded in the answer. On appeal, Federated’s briefing of this
issue is taken verbatim from its briefing of the same issue in
Abraham (or vice versa).
¶9 We see no distinction between these cases, and Federated
does not assert that a distinction exists. We therefore see no
reason to depart from the conclusion we reached in Abraham—
that Federated waived any objection to the adequacy of the
statute-of-limitations defense raised in the answer by replying to
the defense on its merits during the summary judgment
proceedings.
II. Preservation
¶10 Federated next contends that “the parties’ choice of law
and forum is dispositive, that the case arose in Utah, and that the
borrowing statute does not therefore apply.” In Federated Capital
Corp. v. Deutsch, 2018 UT App 118, we concluded that Federated
had not presented this specific legal theory to the district court
2. Arguably, Shaw’s reference in his answer to “the four year
limitations period of the Pennsylvania statute for written
contracts” “designat[ed] the provision relied on sufficiently to
identify it” for purposes of rule 9(i), see Utah R. Civ. P. 9(i),
thereby foreclosing Federated’s argument that Shaw’s answer
was defective.
20140681-CA 5 2018 UT App 120Federated Capital Corporation v. Shaw
and had therefore failed to preserve it for appeal. See id. ¶¶ 9–16.
We reach the same conclusion here.
¶11 Federated’s legal theory on appeal is that, because the
Controlling Law & Jurisdiction Clause specified that the contract
would be “governed solely by and interpreted entirely in
accordance with the laws of the State of Utah,” the cause of
action for Shaw’s alleged breach of contract arose in Utah. And if
the cause of action arose in Utah, the borrowing statute would be
inapplicable and Utah’s six-year statute of limitations would
apply.
¶12 In Deutsch, we examined the record and concluded that
Federated had never presented this legal theory to the district
court. See id. ¶ 16. Although the case was heard before a different
judge and the filings contain some wording differences, the
record here does not differ in any significant way. In both cases,
the defendants moved for summary judgment on Pennsylvania
statute-of-limitations grounds, and Federated opposed the
summary judgment by asserting that Utah’s statute of
limitations applied because the parties had agreed to be
governed by Utah law. And, on appeal, Federated’s briefing of
this issue is virtually identical to its briefing in Deutsch (or vice
versa). In short, no relevant arguments were made in this case
that were not made in Deutsch.
¶13 Because we see no distinction between the instant case
and Deutsch, and because Federated does not assert that one
exists, we reach the same conclusion—that the legal theory now
argued by Federated was not presented to the district court and
thus is not preserved for appeal. See id. ¶¶ 16, 20.
III. Place of Performance
¶14 As an alternative argument to its second contention,
Federated asserts that “after their original contract the parties
20140681-CA 6 2018 UT App 120Federated Capital Corporation v. Shaw
chose Utah as the place of Shaw’s performance” and that Shaw’s
“failure to pay constitutes a breach arising in Utah under Utah’s
six-year statute of limitations.” In his motion for summary
judgment, Shaw asserted that Pennsylvania’s four-year statute of
limitations applied because his credit card contract with
Federated’s predecessor-in-interest “states that the defendant is
to make monthly payment on the account at the address
indicated on [his] monthly statements,” and Federated’s
predecessor-in-interest “selected Philadelphia, Pennsylvania as
the place that payments were to be sent on each and every
monthly account statement.” The district court agreed,
concluding that the contract provided that Shaw’s place of
performance was Pennsylvania, that the cause of action arose in
Pennsylvania in March 2007, and that Pennsylvania’s four-year
statute of limitations applied. Because neither Federated nor its
predecessor-in-interest had filed suit within four years of Shaw’s
March 2007 default, the district court ruled that Federated’s suit
was barred by the statute of limitations.
¶15 On appeal, Federated asserts that the parties amended the
language of the credit card contract in 2007 to specify the
procedures for electronic payments. According to Federated, the
amended contract “provided procedures for electronic
payments,” and Shaw agreed to those procedures when he
continued to use his credit card and made electronic payments.
Observing that the four payments Shaw made between March
2007 and January 2008 were “made electronically” and that his
billing statements included the notation “ELECTRONIC PYMT
THANK YOU SLC UT,” Federated asserts that Shaw’s payments
were received in Salt Lake City, Utah, and that Shaw’s billing
statements demonstrate that “the parties modified the manner
and place of Shaw’s payments” from Pennsylvania to Utah.
Thus, Federated contends, the district court “err[ed] in finding
that this case ‘arose’ in Pennsylvania and that the borrowing
statute and Pennsylvania’s four-year statute of limitations
appl[ied].”
20140681-CA 7 2018 UT App 120Federated Capital Corporation v. Shaw
¶16 “Summary judgment is appropriate when the evidence
‘shows that there is no genuine dispute as to any material fact
and the moving party is entitled to judgment as a matter of
law.’” Federated Capital Corp. v. Libby, 2016 UT 41, ¶ 7, 384 P.3d
221 (quoting Utah R. Civ. P. 56(a)). We review the grant of
summary judgment for correctness. Id.¶17 Section 6 of the amended credit card contract stated, in
relevant part:
You agree to make all payments in US dollars
payable through a US Financial Institution, either
by check or money order payable to us at the
location and in the manner specified on your
periodic billing statement or in any other manner
(such as by electronic fund transfer or wire
transfer) that we agree to and provide procedures
for.
The penultimate paragraph of section 6 stated:
Account payments are to be mailed to the address
for payments shown on your periodic billing
statement. Payment must be received by us at that
address on or before the specified time on the
Payment Due Date stated on your periodic billing
statement, and must conform to any specific
requirements for making payment which appear
with or in your billing statement. Payments tendered
to and accepted by us or our agent at a location other
than the address stated on your periodic billing
statement are not effective until received by us at the
address specified.
(Emphasis added.)
20140681-CA 8 2018 UT App 120Federated Capital Corporation v. Shaw
¶18 Shaw’s periodic billing statements provided that payment
was to be made to:
ADVANTA BANK CORP
PO BOX 8088
PHILADELPHIA, PA 19101-8088
As noted by Federated, on four of the billing statements the
notation “ELECTRONIC PYMT THANK YOU SLC UT”
appeared in the “Activity Since Last Statement” section.
¶19 The district court observed that Federated’s predecessor-
in-interest was a Utah resident and that Federated was
incorporated in Michigan. Although Federated asserted that it
(Federated) had a Salt Lake City office, it provided no evidence
to support that claim. And Federated did not assert that its
predecessor-in-interest’s rights of residency had passed to
Federated. 3 The court also noted that the credit card contract
“provide[d] that cardmembers should make all payments to
[Federated’s predecessor-in-interest] in Pennsylvania or in
another manner provided for by [Federated’s predecessor-in-
interest]. However, any such payments would only be
considered ‘effective’ upon [Federated’s predecessor-in-
interest’s] receipt of the payment at its Pennsylvania address.”
The court determined that, “even if a payment could be tendered
at another location, those payments were only deemed effective
when [Federated’s predecessor-in-interest] received the payment
at the Pennsylvania address specified in the agreement. In light of
3. Utah Code section 78B-2-103 provides an exception to Utah’s
borrowing statute when “the cause of action is held by a citizen
of this state who has held the cause of action from the time it
accrued.” Utah Code Ann. § 78B-2-103 (LexisNexis 2012); see
generally Federated Capital Corp. v. Deutsch, 2018 UT App 118,
¶ 5 n.2. The district court appears to have recognized that
Federated waived any argument regarding this exception.
20140681-CA 9 2018 UT App 120Federated Capital Corporation v. Shaw
that clear provision, it is evident that Shaw’s ultimate obligation
was required to be performed in Pennsylvania.” Thus, according
to the district court, when Shaw failed to make the required
payments, “the default occurred and [Federated’s predecessor-
in-interest’s] cause of action arose in Pennsylvania in March of
2007.” Observing that Pennsylvania has a four-year statute of
limitations for breach of contract and that neither Federated nor
its predecessor-in-interest “brought an action under the
Agreement within that timeframe,” the court granted Shaw’s
motion for summary judgment.
¶20 On appeal, Federated does not meaningfully engage with
the district court’s reasoning. Indeed, Federated ignores the
section of the contract providing that, “[p]ayments tendered to
and accepted by us or our agent at a location other than the
address stated on your periodic billing statement are not
effective until received by us at the address specified.” The
district court’s reasoning relied considerably on this provision of
the contract; however, Federated does not critique the court’s
interpretation or application of this language. Rather, Federated
simply recites the facts and contract provisions in its favor and
asserts that the district court erred. Federated’s conclusory
analysis falls short of demonstrating any error on the part of the
district court. See Hi-Country Estates Homeowners Ass’n v. Jesse
Rodney Dansie Living Trust, 2015 UT App 218, ¶ 5, 359 P.3d 655(“[A]n appellant must address the basis for the district court’s
ruling.”); Golden Meadows Props., LC v. Strand, 2010 UT App 257,
¶ 17, 241 P.3d 375 (explaining that an appellant cannot
demonstrate that a district court erred if it “fails to attack the
district court’s reasons” for the decision it made). Because
Federated has failed to address the district court’s reasoning, it
has failed to carry its burden of persuasion on appeal. See Hi-
Country Estates, 2015 UT App 218, ¶ 5. Accordingly, we conclude
that Federated has not demonstrated that the district court
erroneously granted Shaw’s motion for summary judgment.
20140681-CA 10 2018 UT App 120Federated Capital Corporation v. Shaw
IV. Attorney Fees Incurred on Appeal
¶21 Shaw contends that he should be awarded attorney fees
and costs incurred on appeal. “Under Utah’s reciprocal attorney
fee statute, courts may award attorney fees to the prevailing
party of a contract dispute so long as the contract provided for
the award of attorney fees to at least one of the parties[.]” 4
Federated Capital Corp. v. Haner, 2015 UT App 132, ¶ 11, 351 P.3d
816; see also Utah Code Ann. § 78B-5-826 (LexisNexis 2012). Here,
the contract provided for an award of attorney fees to Federated,
and the district court awarded attorney fees to Shaw based on
the reciprocal attorney fee statute. “A party entitled by contract
or statute to attorney fees below and that prevails on appeal is
entitled to fees reasonably incurred on appeal.” Haner, 2015 UT
App 132, ¶ 19 (quotation simplified). Shaw has prevailed on
appeal, and we therefore award Shaw his reasonable attorney
fees incurred in connection with this appeal in an amount to be
determined by the district court on remand.
CONCLUSION
¶22 Because the first two issues in this case are identical to
those raised in Abraham and Deutsch, because the underlying
records do not differ in any significant way, and because
Federated does not distinguish this case from those, we conclude
4. Utah’s reciprocal attorney fee statute provides,
A court may award costs and attorney fees to
either party that prevails in a civil action based
upon any promissory note, written contract, or
other writing executed after April 28, 1986, when
the provisions of the promissory note, written
contract, or other writing allow at least one party to
recover attorney fees.
Utah Code Ann. § 78B-5-826 (LexisNexis 2012).
20140681-CA 11 2018 UT App 120Federated Capital Corporation v. Shaw
that our holdings in those cases control. Federated waived its
objection to the lack of specificity in Shaw’s answer and did not
preserve a claim that the causes of action actually arose in Utah. 5
In addition, because Federated fails to acknowledge the basis for
the district court’s determination that Shaw’s obligation was to
be performed in Pennsylvania, Federated has failed to persuade
us that the district court erroneously granted Shaw’s motion for
summary judgment.
¶23 Affirmed.
5. In light of the similarities between the cases, we also adopt the
analysis and reasoning of our other conclusions stated in
Abraham and Deutsch.
20140681-CA 12 2018 UT App 120