R4 Constructors v. Inbalance Yoga ( 2024 )

2024 UT App 121THE UTAH COURT OF APPEALS
R4 CONSTRUCTORS LLC,
Appellee,
v.
INBALANCE YOGA CORPORATION AND JENNIFER SCHNABEL,
Appellants.
Opinion
No. 20220735-CA
Filed August 29, 2024
Fourth District Court, Provo Department
The Honorable Christine S. Johnson
No. 170401436
Justin D. Heideman and Justin R. Elswick,
Attorneys for Appellants
Cody W. Wilson and Andrew L. Berne,
Attorneys for Appellee
JUDGE DAVID N. MORTENSEN authored this Opinion, in which
JUDGES MICHELE M. CHRISTIANSEN FORSTER and RYAN M. HARRIS
concurred.
MORTENSEN, Judge:
¶1 In an earlier appeal of this case between R4 Constructors
LLC (R4) and InBalance Yoga Corporation and its owner Jennifer
Schnabel (collectively, InBalance), this court reviewed a number
of the district court’s rulings, including rulings on cross-motions
for summary judgment. We affirmed much of the court’s analysis,
yet on the question of the cross-motions for summary judgment,
we concluded that the court had erred. But we did not reverse.
Instead, we vacated those rulings, noting that recovery by R4
would turn on whether certain common-law exceptions to a
nonrecovery statute applied. And because the applicability of the
R4 Constructors v. InBalance Yoga
common-law exceptions had not been tackled by the district
court, we remanded the case for the narrow purpose of
addressing this issue.
¶2 On remand, the district court did just that and concluded
that two common-law exceptions to licensure applied as a matter
of law under the facts that the court determined to be undisputed.
Therefore, the district court granted summary judgment again.
InBalance appeals, and we vacate the summary judgment grant
and remand the case for further proceedings.
BACKGROUND
¶3 As stated, we are visiting this case for the second time. See
R4 Constructors LLC v. InBalance Yoga Corp., 2020 UT App 169, 480
P.3d 1075. This dispute stems from InBalance contracting with R4
to build a yoga studio. Sometime after construction began,
disputes arose regarding the work, and InBalance refused to pay.
Upon completion of the studio, R4 sued over the missing
payments. InBalance responded with an answer and
counterclaims. R4 filed summary judgment motions on both R4’s
claims and InBalance’s counterclaims. InBalance also filed a
motion for summary judgment regarding R4’s claims, asserting
that the claims were statutorily barred due to R4’s lack of a
contractor’s license at the time of entering the contract and that
none of the common-law exceptions to that statutory bar applied
here. See Utah Code § 58-55-604 (“A contractor . . . may not . . .
commence or maintain any action in any court of the state for
collection of compensation for performing any act for which a
license is required by this chapter without alleging and proving
that the licensed contractor . . . was appropriately licensed when
the contract sued upon was entered into, and when the alleged
cause of action arose.”); A.K. & R. Whipple Plumbing & Heating v.
Aspen Constr., 1999 UT App 87, ¶¶ 16–20, 977 P.2d 518 (discussing
the common-law exceptions). Following a grant of summary
20220735-CA 2 2024 UT App 121R4 Constructors v. InBalance Yoga
judgment in R4’s favor, InBalance appealed. A fuller recitation of
the facts can be found in the opinion from the first appeal. See R4
Constructors, 2020 UT App 169, ¶¶ 2–5.
¶4 In the first appeal, we vacated “the district court’s
judgment denying InBalance’s cross-motion for summary
judgment and granting judgment to R4 on its affirmative claims.”
Id. ¶ 25. We vacated instead of reversing the judgment because
InBalance could be entitled to the relief it sought “if the court on
remand determine[d] as a matter of law that no common law
exception to the nonrecovery provision applie[d].” Id. The parties
had briefed the issue in their original summary judgment motions
leading to the first appeal, but the district court had not addressed
it; thus, we remanded the issue “for the district court to consider
the remaining arguments raised in InBalance’s motion regarding
R4’s ability to recover as an unlicensed claimant.” Id. We explicitly
stated that the “vacatur of the district court’s judgment in favor of
R4 [was] a narrow one.” Id. ¶ 25 n.4. “We vacate[d] the court’s
order only inasmuch as it permitted R4 to recover without R4
either satisfying the requirements of section 58-55-604 or meeting
an exception thereto.” Id.
¶5 On remand, R4 filed a new motion for summary judgment
addressing the issue of licensure, asserting that under facts it
claimed were undisputed, some of the common-law exceptions to
the statutory nonrecovery provision applied here. InBalance filed
a memorandum in opposition and, in the alternative, moved to
allow additional discovery. See Utah R. Civ. P. 56(d). The district
court granted R4’s motion and denied InBalance’s request for
additional discovery. InBalance appeals for a second time.
ISSUES AND STANDARDS OF REVIEW
¶6 InBalance raises three issues on appeal. First, InBalance
argues that the district court erred by allowing R4 to rely on the
20220735-CA 3 2024 UT App 121R4 Constructors v. InBalance Yoga
common-law exceptions to licensure in its motion for summary
judgment even though R4 had “never previously raised or relied”
on them as “an avoidance, affirmative defense or otherwise
until after the close of fact discovery.” Second, InBalance
argues that the district court erred by determining that
InBalance had admitted key material facts supporting R4’s
argument in its motion that an exception to licensure applied. We
review InBalance’s first two issues for correctness as they concern
“the district court’s ultimate grant or denial of summary
judgment.” Far West Bank v. Robertson, 2017 UT App 213, ¶ 15, 406
P.3d 1134 (cleaned up). “We give no deference to the district
court’s legal conclusions and consider whether the court correctly
decided that no genuine issue of material fact existed.” Id.(cleaned up).
¶7 Third, InBalance argues that the district court erred by
denying its rule 56(d) request, see Utah R. Civ. P. 56(d), to conduct
additional discovery. “We review the denial of a request for
further discovery for abuse of discretion.” Deeter v. Deeter (In re
Estate of Deeter), 2020 UT App 65, ¶ 10, 465 P.3d 1164.
ANALYSIS
¶8 We circle back to the narrow issue we remanded—the
applicability of any exceptions to the nonrecovery provision.
Section 58-55-604 of the Utah Code states that a contractor may
not seek “collection of compensation” in court for any work that
requires a license if, at the time the contractor entered into the
contract, the contractor was not licensed. R4 was not licensed at
the time it entered into the contract with InBalance. However, as
we already explained in the first appeal, “our understanding of
[this] provision is informed by certain exceptions to nonrecovery
that arose under the common law,” and “when an exception
applies, the nonrecovery provision does not bar the claim.” R4
Constructors LLC v. InBalance Yoga Corp., 2020 UT App 169, ¶ 20,
20220735-CA 4 2024 UT App 121R4 Constructors v. InBalance Yoga
480 P.3d 1075 (cleaned up). Our court laid out four exceptions in
A.K. & R. Whipple Plumbing & Heating v. Aspen Construction, 1999
UT App 87, 977 P.2d 518:
First, unlicensed contractors have been
allowed to recover when the party for whom the
work is to be done possesses skill or expertise in the
field. . . .
Second, an unlicensed contractor may
recover if the work it performed was supervised by
a licensed contractor. . . .
Third, if the reason a contractor fails to obtain
proper licensure is minor and does not undermine
its ability to perform its work, the unlicensed
contractor may recover. . . .
Finally, courts have considered whether the
contracting party relied on the subcontractor’s
representations that he was properly licensed and
whether the subcontractor has posted a
performance bond.
Id. ¶¶ 17–20. For simplicity, we refer to these common-law
exceptions as the Whipple exceptions.
I. Summary Judgment
¶9 InBalance argues that the district court erred in granting
R4’s motion for summary judgment because (1) R4 untimely
raised and relied on the Whipple exceptions and (2) the court relied
on disputed factual allegations. We address each argument in
turn.
20220735-CA 5 2024 UT App 121R4 Constructors v. InBalance Yoga
A. Reliance on the Whipple Exceptions
¶10 InBalance contends that the district court erred by allowing
R4 to “raise and rely on the defenses to licensure as set forth in
[Whipple] even though [R4] had never previously raised or relied
on the Whipple exceptions as an avoidance, affirmative defense or
otherwise until after the close of fact discovery.” InBalance argues
that the Whipple exceptions are an avoidance under rule 8(c) of the
Utah Rules of Civil Procedure and “should have been raised
during the pleading stage of the litigation.”
¶11 We addressed a related issue in this case’s first appeal. In
the initial litigation, the district court denied InBalance’s cross-
motion for summary judgment based on R4’s lack of licensure
because the district court determined that the argument was an
affirmative defense that InBalance waived when it did not raise
lack of licensure in answer to R4’s complaint. R4 Constructors, 2020
UT App 169, ¶ 14. As a matter of first impression in Utah, we
determined that licensure is part of the cause of action and, as
such, “objection to lack of an opposing party’s license” falls under
“failure to state a claim upon which relief can be granted.” Id.¶¶ 22–24 (cleaned up). We cited rule 12(h) of the Utah Rules of
Civil Procedure, see id. ¶ 24, which allows the defense of failure to
state a claim upon which relief can be granted to “be made by a
later pleading, if one is permitted, or by motion for judgment on
the pleadings or at the trial on the merits.” Utah R. Civ. P. 12(h).
We explicitly stated that lack of licensure was not an affirmative
defense that falls under rule 8(c). R4 Constructors, 2020 UT App
169, ¶ 24. And we remanded the matter for the narrow purpose of
allowing the district court to determine whether any of the
Whipple exceptions apply. Id. ¶ 25.
¶12 An avoidance, which InBalance now contends the Whipple
exceptions constitute, also falls under rule 8(c). The rule states, “A
party must set forth affirmatively in a responsive pleading . . . any
. . . matter constituting an avoidance or affirmative defense.” Utah
20220735-CA 6 2024 UT App 121R4 Constructors v. InBalance Yoga
R. Civ. P. 8(c). While rule 8(c) “does not define or explain what
constitutes an avoidance or an affirmative defense,” Prince v. Bear
River Mutual Ins. Co., 2002 UT 68, ¶ 31, 56 P.3d 524, we know that
they are functionally similar, if not synonymous, compare Jones,
Waldo, Holbrook & McDonough v. Dawson, 923 P.2d 1366, 1374
(Utah 1996) (“A rule 8(c) affirmative defense . . . raises [a] matter
outside the plaintiff’s prima facie case.” (cleaned up)), with
Creekview Apartments ex rel. Hedman Invs., Inc. v. State Farm Ins. Co.,
771 P.2d 693, 695 (Utah Ct. App. 1989) (explaining that a “defense
independent of the allegations in the pleadings . . . constitutes an
avoidance”). As stated, we already determined that InBalance had
not waived the right to claim lack of licensure as a bar to recovery
because it failed to plead that as an affirmative defense in its
answer to R4’s complaint. We held that the issue of licensure is
not controlled by rule 8(c), see R4 Constructors, 2020 UT App 169,
¶ 24, and, as such, could be raised in a later pleading, in a
dispositive motion, or at trial.
¶13 In the context of the present appeal, where the issue is
whether R4 waived its right to rely on the Whipple exceptions to
the statutory bar by not raising the exceptions in either its
complaint or in its reply to InBalance’s counterclaim, we similarly
decide that rule 8(c) does not apply. First and foremost, rule 8(c)
has no application to what litigants have to plead in their own
affirmative complaint for relief; instead, it sets requirements for
things that have to be pled in responsive pleadings (such as
answers to complaints or replies to counterclaims). Thus, R4 could
not, by definition, have violated rule 8(c) by failing to plead
something in its own affirmative complaint. Second, R4’s own
licensure is an issue that has nothing to do with InBalance’s
counterclaim asserting that R4 performed substandard work;
rather, it is an issue that is connected to R4’s ability to recover
from InBalance the cost of services rendered and material
provided. Indeed, the Whipple exceptions are not an affirmative
defense or avoidance to anything InBalance was asserting, simply
20220735-CA 7 2024 UT App 121R4 Constructors v. InBalance Yoga
because they apply only in the context of an unlicensed
contractor-plaintiff seeking “collection of compensation” in court
for work completed that required a license. See Utah Code § 58-
55-604. Thus, R4 would have had no reason to raise the Whipple
exceptions as a defense in a reply to InBalance’s counterclaim.
¶14 Further, even if R4 did have a pleading obligation with
regard to its license status, see Utah R. Civ. P. 8(a), R4 satisfied
those “liberal” requirements, Berg v. Berg, 2012 UT App 142, ¶ 10,
278 P.3d 1071 (cleaned up), when it pled, in its complaint, that it
was a Utah LLC “licensed and duly authorized to conduct
business in the State of Utah.” Timing-wise, we also note that it
was InBalance, not R4, that introduced the lack of licensure
argument, including the Whipple exceptions, to this litigation
ahead of the first appeal. InBalance made this argument in its
favor as part of its summary judgment motion without ever
claiming that the Whipple exceptions couldn’t be considered by the
court due to a defect in the pleadings. For all of these reasons, we
reject InBalance’s argument and determine that consideration of
R4’s arguments regarding the Whipple exceptions is appropriate
in this case at this stage in the litigation.
B. Merits of the Summary Judgment Motion
¶15 InBalance argues that the district court incorrectly granted
summary judgment because the court reached its conclusion by
“determining [InBalance] admitted ‘key facts.’” The court’s order
concluded that “at least the first Whipple exception” applied by
relying on “key facts” it determined that InBalance “admitted” in
its response to R4’s summary judgment motion. Those facts and
InBalance’s responses are as follows:
18. Ms. Schnabel testified that she acted as her own
general contractor in building two of her own
homes, and that she built two additional homes in
Spanish Fork in the 2008 time frame.
20220735-CA 8 2024 UT App 121R4 Constructors v. InBalance Yoga
Response: Admitted. However, regardless of any prior
experience, [InBalance] specifically hired [R4] to be the
“General Contractor” for the construction work.
19. Ms. Schnabel was in control of the schedule and
quality of the job.
Response: Admitted that Ms. Schnabel was in charge of
the “schedule.” Denied that the “quality” of the job was
Ms. Schnabel’s sole obligation. Article 5 of the Contractor
Agreement specifically requires that [R4] perform in a
“workmanlike manner,” in “compliance with all building
codes,” and in accordance with [Schnabel’s] expectations,
applicable laws and industry standards.
On appeal, R4 also directs us to facts 16 and 17. InBalance argues
that because the district court did not rely on these two additional
facts to reach its decision, they are not relevant on appeal.
However, we give a district court’s grant of summary judgment
no deference. Far West Bank v. Robertson, 2017 UT App 213, ¶ 15,
406 P.3d 1134. As such, our only question on appeal is whether
summary judgment was properly granted. Accordingly, we are
free to consider the entirety of the record, including facts 16 and
17. Those facts and responses are as follows:
16. The contract required Ms. Schnabel to perform
her own supervision of the jobsite.
Response: Admitted. However, “supervision” does not
obviate [R4’s] contractual obligations concerning its
licensure status, obtaining an appropriate bond or other
professional duties imposed by statute. Furthermore,
Article 5 of the Contractor Agreement requires that
[R4’s] work should meet the “Owner’s expectations,”
and comply with building codes, applicable laws and be
performed in accordance with industry standards. There
are previously recognized disputed material facts whether
20220735-CA 9 2024 UT App 121R4 Constructors v. InBalance Yoga
[R4] complied with these contractual obligations. Further
discovery is required to ascertain [the owner of R4’s (and
an associated contractor’s)] understanding of their duties
and obligations vis-à-vis Jennifer Schnabel—particularly
since the first Whipple exception applies “when the party
for whom the work is to be done possesses skill or expertise
in the field.”
17. R4 contracted to have Ms. Schnabel perform her
own supervision because she represented to [R4’s
owner] that she had construction experience, and
she wanted to cut costs as much as possible.
Response: Denied. Pursuant to Utah R. Civ. P. 56(d)
[InBalance] requires additional discovery to adequately
respond to this allegation. In particular, [InBalance]
needs to query [the owner of R4] as to the specifics of this
alleged “representation” and his understanding of his
own duties under the Contractor Agreement.
We give no deference to the court’s legal conclusions on summary
judgment, but even if we assume that the district court correctly
construed InBalance’s responses as admissions, we must reverse
for the reasons identified below.
¶16 InBalance argues that after determining that the facts were
undisputed, the court failed to draw all reasonable inferences
from those facts in InBalance’s favor as the non-moving party. To
support this argument, InBalance quotes our supreme court in
USA Power, LLC v. PacifiCorp, 2010 UT 31, 235 P.3d 749, which
explained, “Even if the moving party’s objective statement of the
facts are agreed upon, reasonable inferences made from those
undisputed facts can indeed create a genuine issue of material
fact. That the objective facts are undisputed does not mean that no
genuine issues remain as to those facts.” Id. ¶ 33. InBalance
contends that the district court “ignored the qualifications that
20220735-CA 10 2024 UT App 121R4 Constructors v. InBalance Yoga
[InBalance] gave with respect to [its] admission to [fact 18]” that
Schnabel “had acted as her own contractor on personal homes,”
arguing that this admission does not lead to the inference that
Schnabel “‘possessed skill or expertise in the field’ sufficient to
establish the first Whipple exception.” InBalance makes a similar
argument in regard to fact 19, that Schnabel oversaw the
construction schedule, which, as InBalance argues it, does not
lead to the inference that Schnabel had the appropriate skill or
expertise in the field. As we explain below, we agree with
InBalance that summary judgment is not appropriate here.
¶17 The first Whipple exception excuses an unlicensed
contractor from complying with the licensing requirement if “the
party for whom the work is to be done possesses skill or expertise
in the field.” A.K. & R. Whipple Plumbing & Heating v. Aspen
Constr., 1999 UT App 87, ¶ 17, 977 P.2d 518. Utah courts have not
yet determined what constitutes “skill or expertise in the field.”
Precedent establishes, however, that “a litigant is not a member of
the class the legislature intended to protect if the required
protection is in fact afforded by another means.” Pacific Chromalox
Div. v. Irey, 787 P.2d 1319, 1326 (Utah Ct. App. 1990) (cleaned up);
accord Govert Copier Painting v. Van Leeuwen, 801 P.2d 163, 170
(Utah Ct. App. 1990). A sufficient other means of protection has
included possessing a license “in the same trade or profession as
the unlicensed practitioner.” Pacific Chromalox, 787 P.2d at 1326;
accord Govert, 801 P.2d at 170. The Utah Supreme Court has also
held that where an individual is licensed in one field and that field
“necessarily includes some practices or activities which are
common” to another field, that individual is not required to
obtain a license in the other field unless mandated by statute.
Smith v. American Packing & Provision Co., 130 P.2d 951, 955, 958
(Utah 1942) (determining that a licensed engineer did not go
outside of his field when his job required him to accomplish tasks
common to the field of architecture). Furthermore, caselaw
explains that litigants “usurp[ing] the general contractor’s
20220735-CA 11 2024 UT App 121R4 Constructors v. InBalance Yoga
prerogatives in constructing” a building and relying “on their
own competence,” even if they do not have their own license in
the field, can be a contributing factor in determining that a
contractor’s licensing status does not preclude recovery. Lignell v.
Berg, 593 P.2d 800, 805 (Utah 1979) (determining that an
unlicensed general contractor could still recover where it “had
inadvertently permitted its license to lapse” and owners relied on
their own competence).
¶18 Here, the record is clear that Schnabel possessed some skills
or expertise in the field given that, under the contract, Schnabel
performed her own supervision of R4’s work because she
represented to R4 that “she had construction experience.”
Schnabel also controlled the schedule and quality of R4’s work but
shared that responsibility with R4. Furthermore, Schnabel
testified that she had previously acted as her own general
contractor over the building of two of her own homes, as well as
two additional homes. On this record, a factual predicate exists on
which a factfinder could potentially conclude that the first Whipple
exception applies. However, making all reasonable inferences in
favor of InBalance, a factual question still remains as to whether
Schnabel possessed sufficient skills or expertise in the field to
provide her with the protection section 58-55-604 otherwise
affords individuals against unlicensed contractors. A correctly
instructed jury may very well conclude that Schnabel’s experience
as a general contractor over the construction of four homes gave
her the necessary “skills or expertise in the field” for the
construction of the yoga studio. But a jury could just as reasonably
decide that Schnabel’s work as a general contractor on a small
number of residential homes would not provide her with the type
of skills or expertise needed to manage unlicensed contractors on
a commercial project. Because the facts and reasonable inferences
under the first Whipple exception do not clearly compel one result,
summary judgment is inappropriate on that basis. See Medina v.
Jeff Dumas Concrete Constr. LLC, 2020 UT App 166, ¶ 20, 479 P.3d
20220735-CA 12 2024 UT App 121R4 Constructors v. InBalance Yoga
1116 (“In determining whether a genuine issue of material fact
exists, we ask whether reasonable jurors, properly instructed,
would be able to come to only one conclusion, or if they might
come to different conclusions, thereby making summary
judgment inappropriate.” (cleaned up)). Myriad cases in Utah
hold that where reasonable minds could differ on the conclusions
to be reached on undisputed facts, summary judgment is not
proper. See, e.g., Penunuri v. Sundance Partners, Ltd., 2017 UT 54,
¶ 35, 423 P.3d 1150; Jones v. Farmers Ins. Exch., 2012 UT 52, ¶ 8, 286
P.3d 301; Clegg v. Wasatch County, 2010 UT 5, ¶ 15, 227 P.3d 1243;
Nassi v. Hatsis, 2023 UT App 9, ¶ 29, 525 P.3d 117.
¶19 R4, meanwhile, urges this court to affirm summary
judgment on an alternative ground by concluding that the third
Whipple exception applies as a matter of law. This exception
allows an unlicensed contractor to recover if the reason for the
lack of licensure is “minor and does not undermine [the
contractor’s] ability to perform its work.” Whipple Plumbing, 1999
UT App 87, ¶ 19. In granting R4’s motion for summary judgment,
the district court concluded,
To the extent it is needed, the third Whipple
exception potentially applies. InBalance admitted
the statement that “R4 had not yet received its
license because of an outstanding tax debt owed [by
the owner of R4].” This admission establishes the
reason R4 failed to receive proper licensure was
minor and does not undermine its ability to perform
the work. InBalance has failed to establish a genuine
issue of material fact related to this third Whipple
exception.
We first note that the district court did not rule explicitly that the
third exception applied as a matter of law but only that it
“potentially” applied. The court was quoting the entirety of fact
22 as asserted in R4’s statement of facts in its motion for summary
20220735-CA 13 2024 UT App 121R4 Constructors v. InBalance Yoga
judgment. InBalance’s response to this statement of fact was as
follows:
Admitted. This is an admission that R4 was not licensed
as a general contractor at the time it entered into the
Contractor Agreement (contrary to the representation
that it was duly licensed and in compliance with
applicable law).
Though InBalance admitted this fact, that admission remains
silent—or at least materially ambiguous—as to the extent of R4’s
tax debt, the reason for its accrual, or how and why it prevented
R4 from obtaining a license. Without these and other questions
answered, it is impossible to determine whether a reasonable jury
must conclude that the lack of licensure was “minor” and did not
“undermine” R4’s ability to complete the contracted work. Id. The
evidentiary picture is simply insufficient to establish that the third
exception applies. We therefore cannot affirm on this alternative
basis. 1 Thus, we address this issue further in the following section
with respect to InBalance’s rule 56(d) request.
1. This result is consistent with our reading of Govert Copier
Painting v. Van Leeuwen, 801 P.2d 163 (Utah Ct. App. 1990). There,
this court held, before and similar to Whipple, that common-law
exceptions applied to a nonrecovery statute. The court stated,
“Whether [a] particular exception to the statutory bar . . . applies
must first be decided by the district court when it has the critical
facts before it and has access to the properly focused arguments
of counsel.” Govert, 801 P.2d at 170. We read this to mean,
consistent with general principles, that sufficient facts must be
presented to the district court, whether on summary judgment or
through the presentation of evidence, to show applicability of any
common-law exception. Indeed, the Govert court reversed
expressly because facts were in dispute. Id. at 171.
20220735-CA 14 2024 UT App 121R4 Constructors v. InBalance Yoga
II. Rule 56(d) Request
¶20 InBalance relatedly argues that the district court erred by
denying its rule 56(d) request to conduct additional discovery. As
previously highlighted, in its opposition to the alleged facts in
R4’s motion for summary judgment, InBalance pointed to a
number of facts it argued “required additional discovery related
to [R4’s] claim that it qualified for one or more of the Whipple
exceptions.” Because the standard of review for the denial of a
rule 56(d) request is abuse of discretion, “we will not reverse
unless the court’s decision exceeds the limits of reasonability.”
Heslop v. Bear River Mutual Ins. Co., 2017 UT 5, ¶ 16, 390 P.3d 314(cleaned up). 2 In Crossland Savings v. Hatch, 877 P.2d 1241 (Utah
1994), our supreme court upheld a district court’s denial of a rule
56(d) request. Id. at 1244. The supreme court reasoned that the
party “had sufficient information to create an issue of material fact
if such an issue actually existed.” Id. But “[i]nstead of filing an
affidavit and creating such an issue,” the party filed a rule 56(d)
motion, an action “squarely invoking the discretion of the district
court.” Id. Because the party had “unlimited access” to the
requested information, the supreme court concluded that the
district court reasonably denied the request. Id.
¶21 Here, we similarly determine that it was reasonable for the
district court to deny InBalance’s request as to information
2. Prior to a 2015 amendment, requests for additional discovery
were made under rule 56(f) rather than rule 56(d). See Heslop v.
Bear River Mutual Ins. Co., 2017 UT 5, ¶ 11 n.2, 390 P.3d 314. “The
objective of the 2015 amendments [was] to adopt the style of
Federal Rule of Civil Procedure 56 without changing the
substantive Utah law.” Utah R. Civ. P. 56 advisory committee’s
note to 2015 amendment. Thus, any cases we cite that reference
rule 56(f) are just as applicable to rule 56(d). We also change any
reference to rule 56(f) to rule 56(d) in our citations to avoid
perpetuating confusion.
20220735-CA 15 2024 UT App 121R4 Constructors v. InBalance Yoga
regarding the first Whipple exception because InBalance had
“sufficient information to create an issue of material fact if such
an issue actually existed” as to any skills or expertise in the field
Schnabel did or did not possess. Id. The district court reasonably
concluded that Schnabel, a named defendant, “could have
provided a declaration to her attorneys objecting to the allegations
that she was supervising or that she was qualified to supervise the
work,” yet InBalance chose not to submit or seek that information.
Thus, the district court did not abuse its discretion and properly
denied InBalance’s rule 56(d) request in that regard.
¶22 However, as to the third Whipple exception, the district
court should have granted the motion in order to allow InBalance
to discover the reason for R4’s lack of licensure, particularly the
truthfulness of and details concerning the owner of R4’s alleged
tax debt. Unlike information concerning the sufficiency of
Schnabel’s skills and expertise in construction, InBalance had no
access to R4’s records or any other information to confirm or deny
the accuracy of R4’s claim that the delay in obtaining licensure
was due to a “minor” tax debt as opposed to some other reason.
And R4 has pointed to no reason InBalance would have had
during discovery to investigate this issue. Nor does the district
court’s ruling identify any such reason. The issue only arose in the
context of dispositive motions. Therefore, the district court
exceeded its discretion and should have granted the rule 56(d)
request in this regard.
CONCLUSION
¶23 The district court erred by granting R4’s motion for
summary judgment, and it exceeded its discretion in denying the
entirety of InBalance’s rule 56(d) request as to the third Whipple
factor. We therefore vacate the grant of summary judgment and
20220735-CA 16 2024 UT App 121R4 Constructors v. InBalance Yoga
remand this matter for further proceedings consistent with this
opinion. 3
3. Following the district court’s grant of summary judgment, the
court awarded R4 its attorney fees pursuant to the contract
language and Utah statute. See Utah Code § 78B-5-826 (“A court
may award costs and attorney fees to either party that prevails in
a civil action based upon any . . . written contract . . . [when the
contract allows] at least one party to recover attorney fees.”).
Because we have vacated the grant of summary judgment, the
grant of attorney fees to R4 is also vacated. InBalance has
requested attorney fees on appeal, but an award of fees to either
party is improper at this juncture in the litigation because a party
“is not a prevailing party until after a determination on the merits
is made by either a jury or a trial court judge.” Cache County v.
Beus, 2005 UT App 503, ¶ 14, 128 P.3d 63 (cleaned up).
20220735-CA 17 2024 UT App 121