Hardy v. Montgomery , 428 P.3d 78 ( 2018 )

2018 UT App 133THE UTAH COURT OF APPEALS
RICHARD HARDY,
Appellant,
v.
JEREMY MONTGOMERY AND JULIE MONTGOMERY,
Appellees.
Opinion
No. 20160148-CA
Filed June 28, 2018
Seventh District Court, Price Department
The Honorable George M. Harmond
No. 140700039
Tyler A. Woodworth, Attorney for Appellant
Shane Clifford, Attorney for Appellees
JUDGE MICHELE M. CHRISTIANSEN authored this Opinion, in
which JUDGES GREGORY K. ORME and RYAN M. HARRIS concurred.
CHRISTIANSEN, Judge:
¶1 Richard Hardy appeals from the trial court’s order
awarding judgment in favor of Jeremy Montgomery and Julie
Montgomery (collectively, the Montgomerys). We affirm in part,
vacate in part, and remand for further proceedings.
BACKGROUND
¶2 Hardy owned a home in Helper, Utah. In late 2012 or
early 2013, Hardy listed the home for sale with Bridge Realty.
Before the home sold, Hardy met the Montgomerys, who were
interested in buying the home. Hardy wanted to sell his home to
the Montgomerys, but he did not want to pay a real estate
commission to Bridge Realty. To avoid paying the commission,
Hardy v. Montgomery
the parties agreed that the Montgomerys would lease the home
from Hardy with an option to purchase the home after Hardy’s
listing agreement with Bridge Realty expired. Hardy retained an
attorney, who drafted a lease agreement (the Lease Agreement).
Attached to the Lease Agreement was a real estate purchase
contract (the REPC) and a seller financing addendum. The Lease
Agreement provided that the Montgomerys would pay $700 in
rent plus $100 in “additional rent” to reimburse Hardy for
property taxes and insurance. The Lease Agreement contained a
“Non-Waiver” provision, which stated in part, “No failure of
Landlord to enforce any term hereof shall be deemed a waiver,
nor shall any acceptance of a partial payment of rent be deemed
a waiver of Landlord’s right to the full amount thereof.” Most
relevant here, the Lease Agreement contained an “Option to
Purchase” provision, which stated:
Provided Tenant is not in default hereunder,
Tenant shall have the right to purchase (“Option”)
the Premises for the Purchase Price of $126,775.00,
(“Purchase Price”) at any time after September 15,
2013 and before the end of the Term of the Lease.
As consideration for the Option, Tenant shall pay
Landlord, a non-refundable option payment of
$7,000.00 (“Option Payment”), payable on or
before the beginning of the Term, which shall be
applied to the Purchase Price and shall be counted
toward the Earnest Money Deposit. In the event
the Tenant exercises the Option to purchase the
Premises, Tenant shall execute a Promissory Note
for the balance remaining on the Purchase Price,
after the Option Payment has been applied, and the
parties shall close the transaction, as outlined in
[the REPC], attached hereto as Exhibit “A”,
together with its applicable amendments, and
addenda.
20160148-CA 2 2018 UT App 133Hardy v. Montgomery
The REPC stated that the $7,000 was an earnest money deposit
and that Hardy, as the seller, would provide financing for the
remaining balance of the purchase price.
¶3 The parties signed the Lease Agreement on April 17, 2013.
The parties did not sign the REPC at that time. Hardy declined
to sign the REPC because he allegedly had an “uneasy feeling”
about selling the home to the Montgomerys. Nevertheless, the
Montgomerys delivered a $7,000 check to Hardy as
consideration for the option to purchase the home. Pursuant to
the terms of the REPC, Hardy was required to “deposit the
Earnest Money into [a] Brokerage Real Estate Trust Account”
within four days of receipt. Instead, Hardy deposited the $7,000
into his personal checking account.
¶4 The Montgomerys paid $700 per month in rent from May
2013 to October 2013; the Montgomerys never paid the $100 in
additional rent for property taxes and insurance. Hardy never
mentioned the Montgomerys’ failure to pay the $100 in
additional rent nor advised them that this amounted to a default
of the Lease Agreement.
¶5 In July 2013, Hardy and Jeremy Montgomery spoke on
the phone, and Hardy indicated that he no longer wished to sell
the house to the Montgomerys. Thereafter, in September 2013,
Hardy’s attorney sent a letter to the Montgomerys. The letter
stated, in relevant part, that the Montgomerys still had “the
ability to exercise [the] option to purchase the residence,” but
that Hardy was “not interested in financing the purchase of the
property” based on the Montgomerys’ late rent payments in
May, June, and July 2013. The letter claimed that Hardy had no
obligation to finance the purchase of the property because the
REPC was “never executed or signed” and because the Lease
Agreement provided that “the entire agreement is contained in
the lease agreement and any additional agreement must be
20160148-CA 3 2018 UT App 133Hardy v. Montgomery
signed by all of the parties.” The letter also alerted the
Montgomerys that they were in default based on their late rent
payments and stated that it gave Hardy “the option to terminate
the entire agreement at his discretion if [the Montgomerys]
fail[ed] to remedy the breach of contract by paying all associated
late fees and damages within 7 days of this notice.” The letter
did not mention the fact that the Montgomerys had not been
paying the full amount—$800—in rent and additional rent. The
Montgomerys stopped paying rent in October 2013 but stayed in
the home until the second week of February 2014.
¶6 Hardy sued the Montgomerys in May 2014, alleging
breach of contract, unjust enrichment, conversion, and breach of
the implied covenant of good faith and fair dealing. More
specifically, Hardy claimed that the Montgomerys (1) violated
the terms of the Lease Agreement and that the REPC and Seller
Financing Addendum “should be ignored”; (2) owed rent in the
total amount of $800 per month, not $700 per month; (3) owed
late fees and liquidated damages; (4) owed Hardy damages for
the sale opportunities Hardy had to forgo from May 2013
through March 2014 because of the Montgomerys’ occupancy
and claimed rights; and (5) owed Hardy damages for missing
personal property.
¶7 The Montgomerys filed an answer and counterclaim,
alleging that (1) the REPC was incorporated into, and was a part
of, the Lease Agreement; (2) Hardy anticipatorily repudiated the
option provision in the Lease Agreement; (3) Hardy was unjustly
enriched based on his anticipatory repudiation, and the $7,000
Hardy received should be offset against anything the
Montgomerys owed Hardy; (4) Hardy provided no evidence of
any lost sales opportunities for the home; and (5) Hardy
provided no evidence regarding alleged damages to his personal
property.
20160148-CA 4 2018 UT App 133Hardy v. Montgomery
¶8 The trial court held a bench trial on October 2, 2015. In its
written findings of fact and conclusions of law, the trial court
determined that the Lease Agreement “clearly integrates the
REPC and seller financing addendum into the Lease and the
REPC is dated the same date as the Lease.” Regarding waiver,
the court determined that “Hardy never told the Montgomerys
that the rental payment was in the wrong amount” and that the
September 2013 letter from Hardy’s attorney did not demand the
additional $100 per month “even though the letter details other
amounts owing and references several provisions of the Lease.”
Thus, the court determined, “Hardy intentionally waived the
right to collect the additional $100.00 each month in rent.” The
court further determined that the Montgomerys’ June and
October rent payments had been late. Applying the Lease
Agreement’s late-fee and liquidated-damages provision, the
court determined that the Montgomerys owed $140 in late fees
and $2,420 in liquidated damages. The court rejected Hardy’s
claim that he had lost potential sales of the home, finding that
Hardy was “merely speculating that he may have been able to
sell the house.” The court also rejected Hardy’s claims that “the
Montgomerys kept or lost certain items of personal property
[Hardy] left in the house.”
¶9 The court further determined that Hardy had
anticipatorily repudiated the option agreement and that the
Montgomerys had the right to cure their default and exercise the
option. More specifically, the court determined that Hardy’s
refusal to sign the REPC, while “not amounting to an
anticipatory repudiation at that point, . . . clearly indicated
Hardy was having second thoughts about financing the
property.” The court observed that in his July 2013 phone call
with Jeremy Montgomery, Hardy had “confirmed he would not
sell the property to [the] Montgomerys.” The court also observed
that in his September 2013 letter, wherein Hardy purported to
give the Montgomerys a seven-day period to cure their default,
20160148-CA 5 2018 UT App 133Hardy v. Montgomery
Hardy confirmed he would not finance the sale of the property.
The court concluded that Hardy’s decision not to sign the REPC,
his July 2013 phone call, and his September 2013 letter “all
amount[ed] to an anticipatory repudiation.” Based on Hardy’s
anticipatory breach, the court determined that Hardy would be
unjustly enriched if he were allowed to keep the full $7,000.
After calculating Hardy’s damages and offsetting them from the
$7,000, the trial court entered judgment against Hardy for $1,990.
Hardy appeals.
ISSUES AND STANDARDS OF REVIEW
¶10 Hardy raises several arguments on appeal. First, he
contends that he “could not anticipatorily repudiate the option
agreement on which the Montgomerys had already defaulted.”
The trial court’s “[f]indings of fact, whether based on oral or
other evidence, must not be set aside unless clearly erroneous,
and the reviewing court must give due regard to the trial court’s
opportunity to judge the credibility of the witnesses.” Utah R.
Civ. P. 52(a)(4). We review the trial court’s conclusions of law for
correctness. Drazich v. Lasson, 964 P.2d 324, 326 (Utah Ct. App.
1998).
¶11 Second, Hardy contends that “[t]he REPC is immaterial
because the Montgomerys never performed the necessary
consideration to exercise the option.” In a related argument, he
contends that “[t]he parties did not intend for the terms of the
REPC to apply.” Again, we will not set aside the trial court’s
findings of fact unless they are clearly erroneous, and we “give
due regard to the trial court’s opportunity to judge the
credibility of the witnesses.” Utah R. Civ. P. 52(a)(4).
¶12 Third, Hardy contends that he “did not waive his right to
collect additional rents.” Whether a contractual right has been
waived presents a mixed question of law and fact. See ASC Utah,
20160148-CA 6 2018 UT App 133Hardy v. Montgomery
Inc. v. Wolf Mountain Resorts, LC, 2010 UT 65, ¶ 11, 245 P.3d 184.
“[W]hether the trial court employed the proper standard of
waiver presents a legal question which is reviewed for
correctness, but the actions or events allegedly supporting
waiver are factual in nature and should be reviewed as factual
determinations, to which we give a [trial] court deference.”
Pledger v. Gillespie, 1999 UT 54, ¶ 16, 982 P.2d 572.
¶13 Fourth, Hardy contends that the trial court incorrectly
calculated late fees and liquidated damages. “[T]he adequacy of
a damage award is a factual question and we will not reverse the
trial court’s findings unless they are clearly erroneous.” Tech
Center 2000, LLC v. Zrii, LLC, 2015 UT App 281, ¶ 5, 363 P.3d 566(alteration in original) (citation and internal quotation marks
omitted); see also Utah R. Civ. P. 52(a)(4).
¶14 Fifth, Hardy contends that he “is entitled to collect
expenses and his attorney’s fees.” “Whether attorney fees are
recoverable in an action is a question of law, which we review
for correctness.” I-D Elec. Inc. v. Gillman, 2017 UT App 144, ¶ 13,
402 P.3d 802 (citation and internal quotation marks omitted).
ANALYSIS
I. Anticipatory Repudiation
¶15 Hardy first argues on appeal that the trial court erred in
ruling that the Montgomerys’ alleged default in not timely
paying the amount that Hardy considered to be the full rent did
not constitute a breach of the agreement. Hardy contends that he
“could not anticipatorily repudiate the option agreement on
which the Montgomerys had already defaulted.” We disagree.
¶16 Here, the trial court concluded that Hardy’s decision not
to sign the REPC, his July 2013 phone call with Jeremy
20160148-CA 7 2018 UT App 133Hardy v. Montgomery
Montgomery, and his September 2013 letter “all amount[ed] to
an anticipatory repudiation.” The court then observed that, both
at the time of Hardy’s July 2013 phone call and his September
2013 letter, the Montgomerys “were not current with all financial
obligations” and that the Lease Agreement allowed the
Montgomerys “to exercise the option to purchase pursuant to
the REPC at any time from September 15, 2013 through the end
of the lease period, April 2014, if they were not in default.” The
court ultimately determined:
It could be argued that the option terminated upon
the Montgomerys’ default. But a default only
suspends the non-defaulting party’s performance
until it is discharged when the default amounts to
a total breach. Though the Lease [Agreement] . . .
defines a default, the Lease [Agreement] is silent as
to the right to cure the default but also does not
preclude it. Although the right to exercise the
option was suspended by their breach, the
Montgomerys had the right to cure the default,
exercise the option and purchase the house
pursuant to the REPC. Hardy’s anticipatory
repudiation breached the option agreement.
¶17 “An anticipatory breach occurs when a party to an
executory contract manifests a positive and unequivocal intent
not to render performance when the time fixed for performance
is due.” Kasco Services Corp. v. Benson, 831 P.2d 86, 89 (Utah
1992). “The other party can immediately treat the anticipatory
repudiation as a breach, or it can continue to treat the contract as
operable and urge performance without waiving any right to sue
for that repudiation.” Id.¶18 Jeremy Montgomery testified at trial that in July 2013
Hardy told him over the phone that he no longer wished to sell
20160148-CA 8 2018 UT App 133Hardy v. Montgomery
the house to the Montgomerys. Moreover, the September 2013
letter from Hardy’s attorney stated that the Montgomerys still
had “the ability to exercise an option to purchase the residence,”
but that Hardy was no longer “interested in financing the
purchase of this property” based on the Montgomerys’ late rent
payments in May, June, and July 2013. The letter further stated
that Hardy bore “no contractual (or other) obligation to finance
the purchase of the property,” that the REPC “was never
executed or signed,” and that the Lease Agreement “clearly
states that the entire agreement is contained in the lease
agreement and any additional agreements must be signed by all
of the parties.” The letter also informed the Montgomerys that
they were in “material breach” of the Lease Agreement and
provided that Hardy had “the option to terminate the entire
agreement at his discretion if [the Montgomerys] fail[ed] to remedy
the breach of contract by paying all associated late fees and
damages within 7 days of this notice.” (Emphases added.)
¶19 We conclude that Hardy’s statements to Jeremy
Montgomery in July 2013, and Hardy’s statements in the
September 2013 letter that he was “not interested in financing
the purchase of this property” and that the Montgomerys would
need to “find financing to purchase the property” constituted an
anticipatory breach of the option agreement contained within
the Lease Agreement. Although the Montgomerys were in
default based on their failure to pay the accrued late fees, we
ultimately agree with the trial court that the Montgomerys had
the right to cure their default and that their “right to exercise the
option was [only] suspended by their breach.” As the trial court
correctly observed, the Lease Agreement is silent as to the right
to cure, but it also does not preclude the Montgomerys from
curing their default. Before sending the September 2013 letter,
Hardy never informed the Montgomerys that they were in
default. Rather, in the same September 2013 letter in which
Hardy first informed the Montgomerys they were in default, he
20160148-CA 9 2018 UT App 133Hardy v. Montgomery
also informed them he was no longer going to provide financing
for the purchase of the house. Importantly, however, Hardy also
stated in the letter that he had “the option to terminate the entire
agreement at his discretion if [the Montgomerys] fail[ed] to remedy
the breach of contract by paying all associated late fees and damages
within 7 days of this notice.” (Emphasis added.) Essentially, Hardy
gave the Montgomerys a seven-day period in which to cure their
default before he would terminate the agreement. By
simultaneously reneging on his obligation to provide financing,
Hardy failed to give the Montgomerys a reasonable opportunity
to cure their default. In other words, Hardy should have actually
given the Montgomerys the seven-day period to cure that he
provided in his September 2013 letter before he reneged on his
obligation to provide financing.
¶20 The Lease Agreement states, in relevant part, “Provided
Tenant is not in default hereunder, Tenant shall have the right to
purchase (‘Option’) the Premises for the Purchase Price of
$126,775.00, (‘Purchase Price’) at any time after September 15, 2013
and before the end of the Term of the Lease.” (Emphasis added.)
Although Hardy correctly observes that the Lease Agreement
allowed him to “immediately terminate [the] Agreement” based
on the Montgomerys’ default, Hardy never sought to terminate
the agreement before he reneged on his obligation to provide
financing. Hardy did not seek to terminate the agreement in the
September 2013 letter. Instead, he explicitly stated that he would
give the Montgomerys an opportunity to cure their default
before he would terminate the agreement. Consequently, the
Montgomerys should have been able to exercise the option so
long as they cured their default within seven days of Hardy’s
letter. Because Hardy reneged on his obligation to provide
financing before giving the Montgomerys the chance to cure, we
conclude that the trial court did not err when it determined that
Hardy anticipatorily breached the option agreement.
20160148-CA 10 2018 UT App 133Hardy v. Montgomery
II. The REPC
¶21 Hardy contends that “[t]he REPC is immaterial because
the Montgomerys never performed the necessary consideration
to exercise the option.” We are not persuaded. As previously
discussed, Hardy’s anticipatory breach effectively precluded the
Montgomerys from exercising their option to purchase the home
after they had paid $7,000 to Hardy as consideration for that
option. Hardy backed out of providing financing before he
sought to terminate either the Lease Agreement or the REPC. 1
¶22 Hardy also contends that “[t]he parties did not intend for
the terms of the REPC to apply.” According to Hardy, “[s]ince
all the parties are in agreement that they did not intend for the
REPC to be binding, [he] could not anticipatorily repudiate an
obligation to finance the purchase of the property.”
¶23 In the trial court, Hardy argued that “the parties agreed
the REPC was not binding.” The trial court rejected this
argument, stating that it “did not hear testimony or receive other
evidence of any such agreement.” The court further determined
that the Lease Agreement “clearly integrates the REPC and seller
financing addendum into the Lease” and that “the REPC and
addendum are part of the Lease.” We agree with the trial court
that the REPC and seller financing addendum were incorporated
into the Lease Agreement.
¶24 The Lease Agreement provides,
Provided Tenant is not in default hereunder,
Tenant shall have the right to purchase (“Option”)
the Premises for the Purchase Price of $126,775.00,
1. This was also the reasoning for the trial court’s conclusion that
“Hardy was unjustly enriched for the full $7,000.00.”
20160148-CA 11 2018 UT App 133Hardy v. Montgomery
(“Purchase Price”) at any time after September 15,
2013 and before the end of the Term of the Lease.
As consideration for the Option, Tenant shall pay
Landlord, a non-refundable option payment of
$7,000.00 (“Option Payment”), payable on or
before the beginning of the Term, which shall be
applied to the Purchase Price and shall be counted
toward the Earnest Money Deposit. In the event
the Tenant exercises the Option to purchase the
Premises, Tenant shall execute a Promissory Note
for the balance remaining on the Purchase Price,
after the Option Payment has been applied, and the
parties shall close the transaction, as outlined in
[the REPC], attached hereto as Exhibit “A”,
together with its applicable amendments, and
addenda.
Based on the foregoing provision, we agree with the trial court
that the REPC and seller financing addendum were incorporated
into, and were a part of, the Lease Agreement. See generally
Peterson & Simpson v. IHC Health Services, Inc., 2009 UT 54, ¶ 15,
217 P.3d 716 (“Incorporation by reference requires that the
reference . . . be clear and unequivocal, and alert the non-
drafting party that terms from another document are being
incorporated.” (omission in original) (citation and internal
quotation marks omitted)).
¶25 Regarding the REPC’s binding effect, Hardy cites his trial
testimony and testimony from the Montgomerys indicating that
the parties did not intend for the REPC to be binding unless and
until the Montgomerys exercised the option to purchase the
house. Whether an agreement is a binding contract is to be
determined like any other issue of contract interpretation—from
all four corners of the agreement. Café Rio, Inc. v. Larkin-Gifford-
Overton, LLC, 2009 UT 27, ¶ 25, 207 P.3d 1235. Under the parol
evidence rule, only if a written contract is ambiguous concerning
20160148-CA 12 2018 UT App 133Hardy v. Montgomery
a specific matter in the agreement do facts and circumstances
existing prior to and contemporaneously with its execution
become relevant to clarify the intent and purpose of the contract
in that regard. See Tangren Family Trust v. Tangren, 2008 UT 20,
¶ 11, 182 P.3d 326. Parol evidence is not relevant for the purpose
of varying and nullifying a written contract’s clear and positive
provisions. Id. Stated another way, the parol evidence rule
excludes from evidence any oral testimony that would tend to
add to, subtract from, or alter the terms of a clear and
unambiguous written contract. Id.¶26 Here, the plain language of the Lease Agreement and the
REPC are clear and unambiguous and demonstrate that the
parties intended the REPC to be binding in the event the option
was exercised. 2 The Lease Agreement provided that if the
Montgomerys exercised the option to purchase the house, “the
parties shall close the transaction, as outlined in [the REPC],
attached hereto as Exhibit ‘A’, together with its applicable
amendments, and addenda.” We have already determined that
the REPC and seller financing addendum were thereby
incorporated into the Lease Agreement, and the REPC and seller
financing addendum outlined that Hardy, as the seller, would
provide financing. Thus, we agree with the trial court’s
determination that the parties’ trial testimony could not
contradict their written agreement.
¶27 Moreover, Hardy’s anticipatory breach precluded the
Montgomerys from exercising the option to purchase the home.
2. It is true that there is a difference between an option contract
and a purchase contract. But as long as the optionee has given
sufficient consideration, the optionor cannot withdraw from the
contract during the time set forth in the agreement. See Coulter
& Smith, Ltd. v. Russell, 966 P.2d 852, 859 (Utah 1998).
20160148-CA 13 2018 UT App 133Hardy v. Montgomery
Despite the fact that the Lease Agreement provided that the
$7,000 would be “non-refundable,” the trial court determined
that because Hardy “foreclosed the Montgomerys[’] exercise of
the option by his repudiation,” Hardy would be unjustly
enriched if he were allowed to retain the full $7,000. It is telling
that Hardy does not directly challenge the trial court’s unjust-
enrichment decision in his opening brief. Rather, he argues only
that the Lease Agreement provided that the $7,000 would be
“non-refundable.”
¶28 It is worth noting that Hardy contends in his reply brief
that, based upon the Montgomerys’ default, the “Buyer Default”
provision of the REPC allowed him to cancel the REPC and
retain the earnest money deposit as liquidated damages.
However, Hardy did not treat the $7,000 as an earnest money
deposit pursuant to the terms of the REPC, which required him
to “deposit the Earnest Money into [a] Brokerage Real Estate
Trust Account” within four days of receipt. Instead, he treated
the $7,000 as an option payment and deposited it into his
personal checking account. Additionally, Hardy did not
terminate the REPC; he merely withdrew his promise to provide
seller financing as outlined in the REPC. Thus, the “Buyer
Default” provision of the REPC does not help Hardy. Moreover,
as a general matter, Hardy cannot selectively apply the terms of
the REPC, i.e., he cannot persuasively argue in his opening brief
that the REPC does not apply and also argue in his reply brief
that selective terms of the REPC (those favorable to him) do
apply.
¶29 In sum, we agree with the trial court’s determination that
Hardy was bound by the terms of the Lease Agreement and the
REPC to provide financing, and that he anticipatorily breached
that agreement when he told the Montgomerys he did not want
to sell them the house and told them he would no longer provide
financing before he gave the Montgomerys a chance to cure their
20160148-CA 14 2018 UT App 133Hardy v. Montgomery
default (within the time period to cure he provided in his
September 2013 letter) and then exercise their option.
III. Waiver
¶30 Hardy contends that he did not waive his right to collect
additional rents.
¶31 The Lease Agreement provides that the Montgomerys
were required to pay $700 per month in rent, along with
“additional rent” of $100 per month “to reimburse [Hardy] for
the estimated property taxes and insurance.” The Montgomerys
failed to pay the additional $100 for the entirety of the lease.3
¶32 Also relevant here, the Lease Agreement, under a
provision entitled “NON-WAIVER,” provides that “[n]o failure
of Landlord to enforce any term hereof shall be deemed a
waiver, nor shall any acceptance of a partial payment of rent be
deemed a waiver of Landlord’s right to the full amount thereof.”
¶33 In deciding whether Hardy waived the monthly $100 in
additional rent, the trial court observed that “Hardy never told
the Montgomerys that the rental payment was in the wrong
amount” and that the September 2013 letter from Hardy’s
attorney did not demand the additional $100 per month “even
though the letter details other amounts owing and references
several provisions of the Lease.” Based on these facts, the trial
court concluded that Hardy had “intentionally waived the right
to collect the additional $100.00 each month in rent.”
3. In its written findings, the trial court observed that the
Montgomerys had testified that Hardy told them they did not
have to pay the $100 per month until they purchased the house,
but the court never made any determination about the credibility
of that testimony.
20160148-CA 15 2018 UT App 133Hardy v. Montgomery
¶34 “A waiver is the intentional relinquishment of a known
right. To constitute a waiver, there must be an existing right,
benefit or advantage, a knowledge of its existence, and an
intention to relinquish it.” Soter’s, Inc. v. Deseret Fed. Sav. & Loan
Ass’n, 857 P.2d 935, 937 (Utah 1993) (citation and internal
quotation marks omitted). “[T]he intent to relinquish a right
must be distinct.” Id. at 942. “[M]ere silence is not a waiver
unless there is some duty or obligation to speak.” Id. at 940
(citation and internal quotation marks omitted). “Under this
legal standard, a fact finder need only determine whether the
totality of the circumstances warrants the inference of
relinquishment.” Id. at 942 (citation and internal quotation marks
omitted). “While a no-waiver provision is one element to be
considered in analyzing whether waiver has occurred, it is not
determinative.” ASC Utah, Inc. v. Wolf Mountain Resorts, LC, 2010
UT 65, ¶ 37, 245 P.3d 184; see also Living Scriptures, Inc. v. Kudlik,
890 P.2d 7, 10 n.5 (Utah Ct. App. 1995) (observing that rather
than viewing a nonwaiver provision as a complete bar to a
finding of waiver, “the best approach is to view the existence of
an antiwaiver provision as merely one factor to consider in
determining whether a party has waived its rights under the
agreement”).
¶35 The trial transcript indicates that the nonwaiver provision
of the Lease Agreement was brought to the trial court’s attention
during trial. First, Jeremy Montgomery read the nonwaiver
provision from the stand during trial. Second, in closing
argument, Hardy’s counsel observed, “[Hardy] didn’t give them
a notice of default, but there is a waiver clause in the contract
that says Mr. Hardy can exercise his rights at any time.”
However, the trial court did not explicitly address the nonwaiver
provision in its findings. Given that a nonwaiver provision is a
“factor . . . in determining whether a party has waived its rights
under the agreement,” Living Scriptures, 890 P.2d at 10 n.5, the
trial court should have addressed the effect of the nonwaiver
20160148-CA 16 2018 UT App 133Hardy v. Montgomery
provision on this issue. It is impossible for us to discern whether
the trial court overlooked the nonwaiver provision altogether or
simply determined that the other evidence indicating waiver
outweighed the nonwaiver provision.
¶36 Based on the foregoing, we vacate the waiver portion of
the trial court’s decision and remand for a reconsideration of the
issue, including the entry of explicit findings regarding the
nonwaiver provision of the Lease Agreement.
IV. Late Fees and Liquidated Damages
¶37 Hardy contends that “[l]ate fees and damages were
calculated incorrectly.” The resolution of the waiver issue
discussed above directly relates to Hardy’s arguments regarding
the trial court’s calculation of late fees and liquidated damages.
The Lease Agreement provides,
Rents that are more than five days late are subject
to a late fee of 10% of the total monthly installment.
If the rental installment is paid after the 10th,
Tenant agrees to pay an additional $10.00 per day
as liquidated damages from the 10th until all rent,
penalties, cleaning and/or damage charges, utility
bills, fines and late fees are paid in full.
¶38 The trial court determined that the Montgomerys’ only
late payments occurred in June and October 2013. Because the
trial court determined that Hardy had waived the additional
monthly rent of $100, the court calculated the late fee amount
with reference to $700 per month, resulting in $140 in late fees
(10% of $700 = $70 x 2 months = $140). Upon resolution of the
waiver issue dealt with in Part III, this amount may need to be
recalculated with reference to $800 per month in rent.
20160148-CA 17 2018 UT App 133Hardy v. Montgomery
¶39 In addition, Hardy argues that because the Montgomerys
never paid the $800 called for by the Lease Agreement, the trial
court was “incorrect in determining that the Montgomerys were
only late for June and October’s rent.” According to Hardy, the
Montgomerys “should be responsible for late fees for every
month of the lease agreement.” This argument may be
persuasive if Hardy prevails on the waiver issue. Therefore, in
light of our remand for additional findings with respect to
waiver, the trial court should accordingly reevaluate late fees
and liquidated damages.
V. Attorney Fees
¶40 Hardy contends that he “is entitled to collect expenses
and his attorney’s fees.” The trial court declined to award either
party attorney fees, observing that “each party prevailed only on
certain aspects of their claims.”
¶41 The Lease Agreement provides, “Should it become
necessary for Landlord to employ an attorney to enforce any of
the conditions or covenants hereof, including the collection of
rentals or gaining possession of the Premises, Tenant agrees to
pay all expenses so incurred, including a reasonable attorney’s
fee.”
¶42 “In Utah, attorney fees are awardable only if authorized
by statute or by contract.” Wing v. Code, 2016 UT App 230, ¶ 12,
387 P.3d 601 (citation and internal quotation marks omitted).
“Under Utah’s Reciprocal 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.” Id. More specifically, Utah’s Reciprocal 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 . . . when the
20160148-CA 18 2018 UT App 133Hardy v. Montgomery
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).
¶43 Hardy asserts that “[s]ince only [his] claims are
justified, . . . reciprocity of attorney’s fees does not apply and
[he] should be entitled to collect his expenses and a reasonable
attorney’s fee.” However, the trial court determined that “each
party prevailed only on certain aspects of their claims,” and we
have affirmed several of the trial court’s decisions. Moreover, a
trial court may weigh competing claims and decide that neither
party is entitled to an award of attorney fees. Cf. Anderson
& Karrenberg v. Warnick, 2012 UT App 275, ¶¶ 13−14, 289 P.3d
600. Accordingly, we conclude that the trial court did not err in
declining to award either party attorney fees below.
¶44 Hardy also asserts that his “attorney fees should include
fees [he] incurred as a result of having to bring this matter before
the court of appeals.” Likewise, the Montgomerys assert that
they should be awarded their attorney fees and costs associated
with Hardy’s appeal. In view of our affirmance of the trial
court’s decision not to award either party attorney fees incurred
below, we decline both parties’ invitations to award attorney
fees incurred on appeal. 4
4. In light of our discussion in footnote 5, infra, regarding
Hardy’s intemperate briefing, Hardy is fortunate we are not
assessing the Montgomerys’ attorney fees against him. See Utah
R. App. P. 24(i) (“The court on motion or on its own initiative
may strike or disregard a brief that contains burdensome,
irrelevant, immaterial, or scandalous matter, and the court may
assess an appropriate sanction including attorney fees for the
violation.”).
20160148-CA 19 2018 UT App 133Hardy v. Montgomery
CONCLUSION
¶45 Hardy was bound by the Lease Agreement and the REPC
to finance the sale of the home, and we agree with the trial court
that his renunciation of that promise constituted an anticipatory
breach. However, we vacate the trial court’s decision as to
whether Hardy waived his right to collect additional rents and
remand for further findings on this issue and for possible re-
evaluation and re-calculation of late fees and liquidated
damages. Finally, we decline to award attorney fees to either
party on appeal. 5
5. We note that Hardy’s opening brief contains several
disrespectful and offensive statements directed toward the trial
court, including (1) “the lower court is either clueless,
completely negligent . . . , or it bears significant bias against
Hardy,” and (2) “the lower court was at a minimum derelict in
its duties” and was “significantly confused and erratic in its
findings.” We caution Hardy’s counsel that “personal attacks on
the integrity of judges of this or any other court or statements
that are generally disrespectful of the judiciary or ascribe
improper motives to a court or judges ‘overstep[] the bounds of
appropriate appellate advocacy,’ and may subject [counsel] to
sanctions that can include, among other things, striking the
filings in which they appear” or assessing attorney fees. Bryner v.
Department of Public Safety, 2016 UT App 199, ¶ 6, 382 P.3d 1078(per curiam) (first alteration in original) (quoting Peters v. Pine
Meadow Ranch Home Ass’n, 2007 UT 2, ¶ 8, 151 P.3d 962); see also
Peters, 2007 UT 2, ¶¶ 20, 23 (striking the petitioners’ briefs,
assessing the respondent’s attorney fees against the petitioners’
counsel, and observing that, “[e]ven where a lawyer’s
unprofessionalism or incivility does not warrant sanctions, it
often will nevertheless diminish his or her effectiveness”); Utah
(continued…)
20160148-CA 20 2018 UT App 133Hardy v. Montgomery
(…continued)
R. Prof’l Conduct 8.2(a) (“A lawyer shall not make a public
statement that the lawyer knows to be false or with reckless
disregard as to its truth or falsity concerning the qualifications or
integrity of a judge, adjudicatory officer or a candidate for
election or appointment to judicial office.”).
Hardy’s reply brief also alleges that the Montgomerys
acted in “bad faith” and made a “conscientious decision . . . to
mislead this Court.” Standard 1 of the Utah Standards of
Professionalism and Civility states, in relevant part, that
“lawyers shall treat all other counsel, parties, judges, witnesses
and other participants in all proceedings in a courteous and
dignified manner.” Standard 3 of the Utah Standards of
Professionalism and Civility states,
Lawyers shall not, without an adequate factual
basis, attribute to other counsel or the court
improper motives, purpose, or conduct. Lawyers
should avoid hostile, demeaning, or humiliating
words in written and oral communications with
adversaries. Neither written submissions nor oral
presentations should disparage the integrity,
intelligence, morals, ethics, or personal behavior of
an adversary unless such matters are directly
relevant under controlling substantive law.
We stop short, in this case, of striking Hardy’s brief or otherwise
sanctioning counsel, but we direct counsel to refrain from
making such comments in future filings.
20160148-CA 21 2018 UT App 133