Hillcrest v. Department of Transportation , 352 P.3d 128 ( 2015 )

2015 UT App 140THE UTAH COURT OF APPEALS
HILLCREST INVESTMENT COMPANY, LLC,
Plaintiff and Appellant,
v.
DEPARTMENT OF TRANSPORTATION,
Defendant and Appellee.
Opinion
No. 20140377-CA
Filed June 4, 2015
Second District Court, Farmington Department
The Honorable John R. Morris
No. 080700723
David L. Arrington, Joshua D. Chandler and Rebecca
G. Van Tassell, Attorneys for Appellant
Sean D. Reyes, Brent A. Burnett, and Randy S.
Hunter, Attorneys for Appellee
JUDGE JAMES Z. DAVIS authored this Opinion, in which JUDGES
GREGORY K. ORME and MICHELE M. CHRISTIANSEN concurred.
DAVIS, Judge:
¶1 Hillcrest Investment Company, LLC (Hillcrest) appeals
the district court’s grant of summary judgment in favor of the
Utah Department of Transportation (UDOT). We affirm.
BACKGROUND
¶2 As part of the Legacy Parkway Project in Centerville,
Utah, UDOT negotiated a Right of Way Contract (the Contract)
to purchase three parcels of property held by several different
trusts (the Trusts). The Trusts’ sole means of accessing their
remaining property was via a dirt road located on one of the
Hillcrest Investment Company, LLC v. Department of Transportation
parcels UDOT intended to purchase. During the negotiations,
the Trusts expressed this concern and UDOT represented that its
plans included the construction of a frontage road on one
particular parcel it sought from the Trusts, Parcel 173C. UDOT
repeated this representation in several documents it supplied to
the Trusts. The Trusts ultimately issued warranty deeds in
accordance with the Contract. In the deeds, the Trusts reiterated
the public purposes for which each parcel was conveyed,
including that Parcel 173C was conveyed “for a frontage road
incident to the construction of a freeway known as [the Legacy
Parkway Project].” 1 Ultimately, the frontage road was removed
from the final plans for the Legacy Parkway Project and never
constructed. The Contract’s terms describe UDOT’s obligation as
simply to pay the Trusts for the parcels, which the Contract
identifies by referencing the warranty deeds. The Contract itself
contained no reference to a frontage road.
¶3 Hillcrest, as successor-in-interest to the Trusts, brought
suit alleging that UDOT breached the Contract with the Trusts in
which it agreed to pay for and construct a frontage road on
Parcel 173C. UDOT moved for summary judgment on the
ground that Hillcrest lacked standing because it was not a party
to the Contract. The district court granted UDOT’s motion.
Hillcrest appealed to this court. We reversed the district court’s
ruling in Hillcrest Investment Co., LLC v. Utah Department of
Transportation, 2012 UT App 256, 287 P.3d 427. Specifically, we
held that factual questions relating to Hillcrest’s standing
precluded summary judgment. Id. ¶ 1.
¶4 On remand, after further briefing and argument by the
parties, the district court ruled that Hillcrest had standing to
assert its claims under the Contract. UDOT subsequently filed a
1. UDOT received four separate warranty deeds for Parcel 173C,
each conveying the fractional interest owned by the separate
trusts.
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renewed motion for summary judgment, arguing that the
Contract is unambiguous and does not obligate UDOT to pay for
or construct the frontage road. The district court agreed and
granted summary judgment in favor of UDOT on all of
Hillcrest’s claims. Hillcrest appeals the ruling on two of its
claims—breach of contract and unjust enrichment.
ISSUE AND STANDARD OF REVIEW
¶5 “Summary judgment is appropriate where (1) there is no
genuine issue as to any material fact and (2) the moving party is
entitled to a judgment as a matter of law.” Id. ¶ 11 (citation and
internal quotation marks omitted). “We review a district court’s
grant of summary judgment de novo, reciting all facts and fair
inferences drawn from the record in the light most favorable to
the nonmoving party.” Id. (citation and internal quotation marks
omitted).
ANALYSIS
I. Breach of Contract
¶6 Hillcrest challenges the district court’s conclusion that the
Contract is “clear and unambiguous” and that it “does not
contain any obligation, executory or otherwise, requiring UDOT
to pay for or construct a frontage road on Parcel 173C.” Hillcrest
asserts that the warranty deeds for Parcel 173C identify the
purpose of that conveyance as “for a frontage road” and that
because the deeds are incorporated by reference into the
Contract, the Contract establishes UDOT’s obligation to
construct a frontage road on that parcel. Alternatively, Hillcrest
argues that the Contract and warranty deeds are ambiguous,
particularly in light of “the parties’ undisputed intent at the time
of contracting” that UDOT would “build a frontage road to
restore access” to the Trusts’ remaining properties in exchange
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for the Trusts’ agreement to forgo “payment of severance
damages.”
¶7 “[C]ontractual ambiguity can occur in two different
contexts: (1) facial ambiguity with regard to the language of the
contract and (2) ambiguity with regard to the intent of the
contracting parties.” Daines v. Vincent, 2008 UT 51, ¶ 25, 190 P.3d
1269. “The first context presents a question of law to be
determined by the judge,” and the “second context presents a
question of fact where, if the judge determines that the contract
is facially ambiguous, parol evidence of the parties’ intentions
should be admitted.” Id. (citation and internal quotation marks
omitted). Accordingly, “the question of ambiguity begins with
an analysis of facial ambiguity.” Id.
¶8 “A contract 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.”
Winegar v. Froerer Corp., 813 P.2d 104, 108 (Utah 1991) (citation
and internal quotation marks omitted). “When determining
whether a contract is ambiguous, any relevant evidence must be
considered. Otherwise, the determination of ambiguity is
inherently one-sided, namely, it is based solely on the extrinsic
evidence of the judge’s own linguistic education and
experience.” Ward v. Intermountain Farmers Ass'n, 907 P.2d 264,
268 (Utah 1995) (citation and internal quotation marks omitted).
“Then, after the trial court has considered evidence of contrary
interpretations, the [trial court] must ensure that the
interpretations contended for are reasonably supported by the
language of the contract.” Hall v. Hall, 2013 UT App 280, ¶ 12,
316 P.3d 970 (alteration in original) (citations and internal
quotation marks omitted); see also Watkins v. Henry Day Ford,
2013 UT 49, ¶ 28 n.2 (“The introduction of any relevant evidence
does not . . . allow a litigant to create ambiguity out of whole
cloth or to advocate for an interpretation that is in no way
supported by the language of the underlying contract.”
(emphasis, citation, and internal quotation marks omitted)). “If
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after considering such evidence the court determines that the
interpretations contended for are reasonably supported by the
language of the contract, then extrinsic evidence is admissible to
clarify the ambiguous terms.” Ward, 907 P.2d at 268.
¶9 We must first consider Hillcrest’s relevant extrinsic
evidence to determine whether the Contract is ambiguous.
Hillcrest submitted several pieces of correspondence and
documents exchanged between the Trusts and UDOT during
their negotiations that indicate the parties’ shared intent that
UDOT would construct a frontage road on Parcel 173C and that
the purchase price would reflect that obligation. Likewise, the
district court acknowledged that initially the parties intended
that Parcel 173C would be used for a frontage road.
¶10 Next, Hillcrest identifies the phrase “for a frontage road”
appearing in the warranty deeds for Parcel 173C as reflecting
this intent. Hillcrest asserts that the deeds are incorporated by
reference in the Contract and, accordingly, that the Contract can
reasonably be interpreted to require UDOT to build a frontage
road.
¶11 The district court considered the Contract’s reference to
the deeds to serve the limited purpose of providing the legal
description of the land UDOT purchased. Additionally, the
district court interpreted Hillcrest’s evidence “regarding the
circumstances surrounding the [Contract]” as “merely
reflect[ing] that the parties had discussions relating to the
construction of a frontage road and even intended that Parcel
173C be used for that construction” but concluded that the
evidence of the parties’ intent was outweighed by the absence of
supporting language in the final, integrated Contract.2
2. The district court also indicated that the parties knew at the
time of contracting “that the Legacy Parkway Project’s plans
(continued…)
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¶12 The entire reference to Parcel 173C in the Contract is as
follows: “[T]he Utah Department of Transportation shall comply
with the following: . . . (A) Pay Cash in full to the grantor(s) for
the following: . . . Land as described in Warranty Deed No.
0067:173:C.” While “[p]arties may incorporate by reference into
their contract the terms of some other document,” Consolidated
Realty Group v. Sizzling Platter, Inc., 930 P.2d 268, 273 (Utah Ct.
App. 1996) (citation and internal quotation marks omitted), “if a
written contract refers to another writing for a particularly
designated purpose, the other writing becomes a part of the
contract only for the purpose specified,” 17A C.J.S. Contracts
§ 402 (Westlaw database updated Mar. 2015); accord Housing
Auth. v. Snyder, 2002 UT 28, ¶ 19, 44 P.3d 724 (requiring “specific
language” in order to incorporate the terms of another
document); see also Consolidated Realty, 930 P.2d at 273(explaining that to properly incorporate the terms of another
document “into the document executed by the parties, the
reference must be clear and unequivocal, and must be called to
the attention of the other party, [the party] must consent thereto,
and the terms of the incorporated document must be known or
easily available to the contracting parties” (alteration in original)
(citation and internal quotation marks omitted)).
¶13 The Contract’s reference to the warranty deeds is, by its
very terms, limited to identifying the parcels of land that UDOT
agreed to purchase from the Trusts. There is no specific language
incorporating into the Contract any terms from the warranty
deeds that would add to UDOT’s obligations under the Contract,
(…continued)
were not finalized and [were] subject to change.” Hillcrest
asserts that this is a disputed issue of fact and that there is no
evidence in the record to support this assertion. Because this
argument does not affect our analysis on appeal, we do not
address it.
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such as the “for a frontage road” language relied on by Hillcrest.
Moreover, there is language to the contrary in the Contract,
indicating that “[n]o work, improvement, alteration or
maintenance will be done or made other than or in addition to
that provided in this agreement.” The Contract’s integration
clause also provides,
The parties have here set out the whole of their
agreement. The performance of this agreement
constitutes the entire consideration for the grant of
said tract of land and shall relieve [UDOT] of all
further obligations or claims on that account, or on
account of the location, grade and construction of
the proposed highway.
We agree with the district court’s assertion that the warranty
deeds are referenced in the Contract for the limited purpose of
identifying the parcels of land UDOT agreed to purchase.
¶14 Without the language in the warranty deeds for Parcel
173C, there is nothing in the Contract alluding to a frontage
road, let alone an obligation on UDOT to pay for and construct a
frontage road. Thus, we agree with the district court’s ruling that
“the language of the [Contract] and Warranty Deeds cannot
reasonably support a construction that obligates UDOT to pay
for or construct a frontage road on Parcel 173C as part of its
agreement with the [Trusts].” Accordingly, the Contract is not
ambiguous and the extrinsic evidence of the parties’ intent
offered by Hillcrest cannot vary the terms of the unambiguous
agreement. See Daines v. Vincent, 2008 UT 51, ¶ 37, 190 P.3d 1269(“[W]e do not need to resort to the admission of parol evidence
on the question of intent, because absent a finding of facial
ambiguity, the parties’ intentions must be determined solely
from the language of the contract.” (citation and internal
quotation marks omitted)).
20140377-CA 7 2015 UT App 140Hillcrest Investment Company, LLC v. Department of Transportation
II. Unjust Enrichment
¶15 Hillcrest asserts that UDOT was unjustly enriched by the
reduced purchase price that the Trusts agreed to based on
UDOT’s representation that it would pay for and construct a
frontage road on Parcel 173C. Hillcrest argues that in ruling on
its unjust enrichment claim, the district court “overlook[ed]
undisputed evidence establishing all the required elements” of
the claim, “construed the [C]ontract inconsistent with the court’s
conclusion regarding Hillcrest’s contract-based claims,” and
“disregarded authorities that allow Hillcrest to seek redress for
UDOT’s separate representations and actions in equity
notwithstanding the Contract.”
¶16 To succeed on a claim for unjust enrichment, a party must
show that a benefit has been “conferred by one [party] on
another,” “the conferee must appreciate or have knowledge of
the benefit,” and “there must be acceptance or retention by the
conferee of the benefit under such circumstances as to make it
inequitable for the conferee to retain the benefit without
payment of its value.” Allen v. Hall, 2006 UT 70, ¶ 26, 148 P.3d
939. In addition, “a prerequisite for recovery on an unjust
enrichment theory is the absence of an enforceable contract
governing the rights and obligations of the parties relating to the
conduct at issue” because “[i]f there were a contract, it, rather
than the law of restitution, would govern the parties’ rights and
determine their recovery.” Ashby v. Ashby, 2010 UT 7, ¶ 14, 227
P.3d 246 (“Recovery under [unjust enrichment] presupposes that
no enforceable written or oral contract exists.” (alteration in
original) (citation and internal quotation marks omitted)). “Our
case law, however, supports the proposition that even where
there is an express contract, an equitable claim may be viable,
under specific factual circumstances, if the equitable claim is
based on a separate representation or misleading act arising
independently of the express contract.” E & M Sales W., Inc. v.
Diversified Metal Prods., Inc., 2009 UT App 299, ¶ 8, 221 P.3d 838.
20140377-CA 8 2015 UT App 140Hillcrest Investment Company, LLC v. Department of Transportation
¶17 The district court ruled that because the Contract
indisputably relates to UDOT’s purchase of the property from
the Trusts, Hillcrest cannot recover “under an equitable theory
of unjust enrichment.” In addition, the district court concluded
that UDOT did not receive a benefit under the Contract for
which it did not provide just compensation. The court
considered Hillcrest’s unjust enrichment argument to amount to
a request that the court “‘make a better contract for the parties
than they have made for themselves,’” which the court explicitly
declined to do. (Quoting Ted R. Brown & Assocs. v. Carnes Corp.,
753 P.2d 964, 970 (Utah Ct. App. 1988).)
¶18 Hillcrest asserts that the Contract does not preclude its
unjust enrichment claim and that the district court’s conclusion
is contradictory to the court’s rejection of Hillcrest’s breach of
contract claim. Hillcrest argues that “[i]f the court’s first holding
were correct (that the [C]ontract does not involve a frontage
road), then Hillcrest’s claim for unjust enrichment would not be
precluded because Hillcrest would not be entitled to relief under
the [C]ontract.” According to Hillcrest, whether UDOT is
required by the Contract to build the road is distinct from
whether “UDOT’s separate, repeated representations and
misleading acts” “regarding the frontage road [that] induce[d] a
settlement with the [T]rusts” based on UDOT’s promise of a
road in exchange for the Trusts waiver of severance damages
supported an unjust enrichment claim.
¶19 We disagree. Hillcrest’s unjust enrichment claim revolves
around whether the Contract represents a fair bargain. 3
Although Hillcrest has presented evidence suggesting that the
parties’ intent at the time of contracting was not adequately
reflected in the terms of the final Contract, we agree with the
district court that this does not amount to unjust enrichment.
3. Hillcrest has not appealed the district court’s dismissal of its
fraudulent inducement and negligent misrepresentation claims.
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That the Contract was perhaps poorly drafted is not actionable
under the theories argued, particularly where all parties were
represented by counsel and the signed Contract was a product of
extensive negotiations. Hillcrest’s objections to the fairness of the
bargain struck cannot be remedied at this stage of the
proceedings. As the district court observed, “‘[a] court may not
make a better contract for the parties than they have made for
themselves.’” (Quoting Ted R. Brown, 753 P.2d at 970); see also
Dalton v. Jerico Constr. Co., 642 P.2d 748, 750 (Utah 1982) (“[I]t is
not for a court to rewrite a contract improvidently entered into at
arm’s length or to change the bargain indirectly on the basis of
supposed equitable principles.”).
CONCLUSION
¶20 The district court’s ruling granting summary judgment in
favor of UDOT on Hillcrest’s breach of contract and unjust
enrichment claims was not erroneous. We affirm the district
court’s ruling.
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