Hunter v. Finau ( 2024 )

2024 UT App 17THE UTAH COURT OF APPEALS
DAVID HUNTER,
Appellant,
v.
MILTON FINAU, GIPPER FINAU, AND KELEPI FINAU,
Appellees.
Opinion
No. 20210864-CA
Filed February 15, 2024
Fourth District Court, Provo Department
The Honorable Robert A. Lund
The Honorable James R. Taylor
No. 210400604
Michael J. Petro and Leah Aston,
Attorneys for Appellant
Stewart O. Peay and John A. Wirthlin,
Attorneys for Appellees
JUDGE RYAN D. TENNEY authored this Opinion, in which JUDGES
GREGORY K. ORME and RYAN M. HARRIS concurred.
TENNEY, Judge:
¶1 In 2007, Kelepi (Gary) Finau created the Finau Corporation,
which was intended to facilitate investment into the budding golf
careers of his sons, Milton (Tony) and Gipper. That same year, the
Finau Corporation entered into two agreements with ICON
Sports (ICON) under which ICON gave money to the Finau
Corporation in exchange for future earnings and revenues.
¶2 The Finau Corporation was dissolved in 2009. In 2021,
David Hunter, the assignee of ICON, sued all three Finaus
personally, alleging that they had breached the 2007 agreements
by not paying ICON certain monies that they had since earned.
Hunter v. Finau
The district court dismissed the suit, however, concluding that the
statutes of limitations on the various claims had begun running
when the Finau Corporation was dissolved. Hunter now appeals
that dismissal. For the reasons set forth below, we affirm.
BACKGROUND 1 0F
¶3 In 2007, Gary Finau began seeking ways to fund the
nascent golf careers of his sons Tony and Gipper. On October 9,
Gary signed two related agreements with ICON, a company that
was owned at the time by Steve Gasser.
¶4 The first agreement was titled “Loan Agreement.” Under
this agreement, ICON provided a $495,000 interest-free loan to
“the Finau Corporation.” The Loan Agreement provided that this
loan was to be repaid through “50% of all Finau Corporation
revenue and winnings of participant golfers in [the] Finau
Corporation.” The Loan Agreement also stated that “[i]f for any
reason [the] Finau Corporation ceases to exist and/or operate,
ICON Sports holds a first position to any funds in [the] Finau
Corporation bank account and any future revenue until such loan
is paid in full.” And it further provided that “[i]f for any reason
[the] Finau Corporation ceases to exist and/or operate, ICON
Sports holds a first position to any assets of [the] Finau
Corporation until such loan is paid in full.”
¶5 The second agreement was titled “Equity Interest
Purchase,” and the parties have since commonly referred to it as
“the Equity Agreement.” Under the Equity Agreement, ICON
purchased a 20% equity position in the Finau Corporation for
1. “On appeal from a motion to dismiss, we review the facts only
as they are alleged in the complaint. We accept the factual
allegations as true and draw all reasonable inferences from those
facts in a light most favorable to the plaintiff.” Koerber v. Mismash,
2013 UT App 266, ¶ 3, 315 P.3d 1053.
20210864-CA 2 2024 UT App 17Hunter v. Finau
$5,000. Under a “Terms and Conditions” provision, ICON agreed
that its membership interest was “subject to the Finau
Corporation Operating Agreement with the following
understandings,” among others:
b. ICON . . . shall have the right to appoint and
maintain one seat on the Finau Corporation Board
of Directors.
c. [The Finau Corporation] further agrees that all
monies, contracts and business properties (outside
of player’s winnings) shall flow into [the Finau
Corporation] for the benefit of the corporation and
its members.
¶6 The parties to both the Loan Agreement and the Equity
Agreement (collectively, the Agreements) were ICON and the
Finau Corporation; none of the Finaus were parties to these
agreements in their personal capacities. The Agreements were
signed by Gary Finau and Molonai Hola as officers and board
members of the Finau Corporation, as well as Gasser as
representative of ICON.
¶7 When the Agreements were signed, it was understood that
the Finau Corporation would be formed “shortly thereafter,” and
the corporation was indeed formed within a few months of the
execution of the Agreements. Gary, Tony, Gipper, Gasser, and
Hola all served as either officers or directors of the Finau
Corporation. Sometime in 2009, the Finau Corporation was
dissolved. There were five board members at the time. All three
Finaus voted in favor of dissolution, while Gasser and Hola
opposed it.
¶8 As alleged in the complaint, Tony later became “one of the
highest ranked golf players in the world” and “[b]oth Tony and
Gipper have now enjoyed substantial professional success and
20210864-CA 3 2024 UT App 17Hunter v. Finau
have earned substantial amounts of money.” But the complaint
and the record are silent about when, exactly, that happened.
¶9 In the meantime, ICON’s interest in the Agreements
changed hands several times. Gasser passed away in 2010. At
some point before May 9, 2015, David Hunter obtained a minority
portion of ICON’s interest; in April 2021, Hunter obtained the
remainder of ICON’s interest.
¶10 On May 9, 2015, Hunter called Tony to “discuss[]” Tony’s
“obligations” under the Agreements. During that call, Tony
informed Hunter that he would not pay the $495,000 loan amount
or fulfill any of the “obligations” set forth in the Equity
Agreement. And, according to Hunter, the Finaus subsequently
refused multiple attempts to settle the dispute regarding Hunter’s
claims.
¶11 On May 6, 2021, Hunter filed this lawsuit naming Gary,
Tony, and Gipper as defendants in their individual capacities.
Hunter pleaded five causes of action: (1) fraud in the inducement,
(2) breach of contract, (3) breach of the covenant of good faith and
fair dealing, (4) unjust enrichment, and (5) promissory estoppel.
¶12 The Finaus responded by filing a motion to dismiss,
arguing, among others, that Hunter’s claims were all barred by
the applicable statutes of limitations. The district court
subsequently granted that motion and dismissed all of the claims
with prejudice. In its ruling, the court opined that “[u]pon
Defendants’ dissolution of the Finau Corporation, and
considering how Mr. Gasser structured the Agreements to flow
through the Finau Corporation, Mr. Gasser knew or should have
known that Defendants and [the] Finau Corporation had no
intention to repay ICON Sports and fulfill the obligations under
the Agreements.” The court then concluded that “the dissolution
of the Finau Corporation triggered the statute of limitations for
Plaintiff (or Mr. Gasser) to seek relief under the Agreements.”
Because “the breach of contract claim carries the longest statute of
20210864-CA 4 2024 UT App 17Hunter v. Finau
limitations of six (6) years,” and because Hunter didn’t file his
complaint until May 2021, a full 12 years after the 2009
dissolution, the court ruled that all of the claims were time-barred.
¶13 Hunter now appeals.
ISSUE AND STANDARD OF REVIEW
¶14 On appeal, Hunter raises a partial challenge to the district
court’s decision granting the Finaus’ motion to dismiss. In
particular, Hunter challenges the dismissal of three of his five
causes of action. 2 We review the district court’s decision for
1F
2. In his brief, Hunter made no separate arguments regarding the
court’s dismissal of his fraud in the inducement and promissory
estoppel claims, instead focusing his challenge on the court’s
decision to dismiss his claims for breach of contract, breach of the
covenant of good faith and fair dealing, and unjust enrichment. In
a few places in his opening and reply briefs, however, Hunter did
more broadly request reversal of the “dismissal of [his]
complaint” without qualification. If those requests were meant as
challenges to the dismissal of the fraud in the inducement and
promissory estoppel claims, Hunter has failed to carry his burden
of persuading us that there was any error. We thus affirm their
dismissal.
Also, with respect to the three claims that are at issue, the
parties dispute whether the Finaus can be held personally liable.
But the district court did not rule on this basis, instead dismissing
the claims on statute of limitations grounds alone. Because we
affirm that conclusion, we need not make any definitive ruling on
the Finaus’ alternative argument that they cannot be held
personally liable for violating the Agreements, although we
comment indirectly on this subject as it concerns the running of
the statute of limitations. See infra note 4.
20210864-CA 5 2024 UT App 17Hunter v. Finau
correctness. See Zubiate v. American Family Ins., 2022 UT App 144,
¶ 9, 524 P.3d 148.
ANALYSIS
¶15 On appeal, Hunter challenges the court’s dismissal of his
claims for breach of contract, breach of the covenant of good faith
and fair dealing, and unjust enrichment. For the reasons set forth
below, we conclude that the court correctly dismissed each of
those claims.
¶16 “As a general rule, a statute of limitations begins to run
upon the happening of the last event necessary to complete the
cause of action.” Russell Packard Dev., Inc. v. Carson, 2005 UT 14,
¶ 20, 108 P.3d 741 (quotation simplified). Under the “discovery
rule,” however, a statute of limitations may be tolled “until the
discovery of facts forming the basis for the cause of action.” Id.
¶ 21 (quotation simplified). Statutes of limitations serve an
important purpose in our system. They “are intended to prevent
unfair dilatory litigation against a defendant and to require that
claims be litigated while proper investigation and preservation of
evidence can occur.” Vigos v. Mountainland Builders, Inc., 2000 UT
2, ¶ 22, 993 P.2d 207. They likewise discourage “unfair litigation,”
such as through suits based on “stale claims.” Id. And they also
work to “promote justice by preventing surprises through the
revival of claims that have been allowed to slumber until evidence
has been lost, memories have faded, and witnesses have
disappeared.” Russell Packard, 2005 UT 14, ¶ 28 (quotation
simplified).
A. Breach of Contract and Breach of the Covenant of Good
Faith and Fair Dealing
¶17 We first address Hunter’s arguments regarding his claims
for breach of contract and breach of the covenant of good faith and
fair dealing. “An implied covenant of good faith and fair dealing
20210864-CA 6 2024 UT App 17Hunter v. Finau
inheres in every contract,” and a “violation of the covenant is a
breach of the contract.” Eggett v. Wasatch Energy Corp., 2004 UT 28,
¶ 14, 94 P.3d 193. Under “the covenant of good faith and fair
dealing, both parties to a contract impliedly promise not to
intentionally do anything to injure the other party’s right to
receive the benefits of the contract.” Id.¶18 The statute of limitations for an “action” “upon any
contract” is six years. Utah Code § 78B-2-309(1)(b). “In a breach of
contract action[,] the statute of limitations ordinarily begins to run
when the breach occurs.” Clarke v. Living Scriptures, Inc., 2005 UT
App 225, ¶ 9, 114 P.3d 602 (quotation simplified).
¶19 The district court concluded that “the dissolution of the
Finau Corporation triggered the statute of limitations for Plaintiff
(or Mr. Gasser) to seek relief under the Agreements.” Hunter
challenges this conclusion on appeal, arguing that the
Agreements (and, by extension, the covenant of good faith and
fair dealing) were not breached until the Finaus began to earn
money from their professional golf careers. Because there has
been no discovery yet on when, exactly, that occurred, he argues
that dismissal was inappropriate at this procedural stage.
¶20 We disagree. The plain language of the Agreements placed
the Finau Corporation into a central role in the parties’ contractual
relationship, and in light of this, Hunter’s complaint alleged that
the dissolution of the Finau Corporation constituted the breaches
at issue.
¶21 We begin with the plain language of the Equity
Agreement. That agreement states that ICON’s membership
interest in the Finau Corporation was subject to the
understanding that “all monies, contracts and business properties
(outside of player’s winnings) shall flow into [the Finau
Corporation] for the benefit of the corporation and its members.”
Once the Finau Corporation ceased to exist, however, there was
nowhere for any monies to “flow into”—which meant, by
20210864-CA 7 2024 UT App 17Hunter v. Finau
extension, that ICON would have no way of recouping its
investment. 3
2F
¶22 A similar dynamic was in play with respect to the language
of the Loan Agreement. As a no-interest loan, its key clause is its
repayment clause. And that clause provides for the automatic
transfer of “50% of all Finau Corporation revenue and winnings
of participant golfers in [the] Finau Corporation” into an escrow
account “to pay the ICON Sports loan.” When the Finau
Corporation was dissolved, however, there was no longer any
prospect of incoming corporate revenue, nor could there be any
revenue from “participant golfers in [the] Finau Corporation.” As
a result, it had now become impossible for ICON to be repaid
under the terms set forth in that agreement. 4
3F
3. The Equity Agreement also provides that ICON’s membership
interest was subject to “the Finau Corporation Operating
Agreement,” a document that is not in the record. The Loan
Agreement is impliedly (though not explicitly) governed by the
same document. Hunter argues that this document must be
examined through discovery in order to fully understand the
Agreements. We disagree. Whatever further nuances might be
revealed by the Operating Agreement, the plain language of the
Agreements and Hunter’s complaint show that the purposes of
the Agreements were defeated by the dissolution of the Finau
Corporation.
4. The Loan Agreement also stated that if the “Finau Corporation
ceases to exist and/or operate,” ICON would have “a first position
to any funds in [the] Finau Corporation bank account,” “any
assets of [the] Finau Corporation,” and “any future revenue” until
the loan was paid in full. At oral argument, Hunter made much of
the term “any future revenue,” suggesting that it implied an
alternate repayment scheme wherein the Finaus’ future golf
(continued…)
20210864-CA 8 2024 UT App 17Hunter v. Finau
¶23 Thus, the plain language of the Agreements placed the
Finau Corporation into a key position within the parties’
contractual arrangement. Given this, Hunter likewise focused on
the corporation’s dissolution as a key feature of his complaint—
winnings would continue to flow directly to ICON until the loan
was paid.
But the Loan Agreement doesn’t say this. Rather, it says
that repayment would occur through “winnings of participant
golfers in [the] Finau Corporation”; since the Finau Corporation
no longer existed after 2009, the plain language of this agreement
therefore did not entitle ICON to any earnings from the Finaus—
who were no longer “participant golfers in [the] Finau
Corporation”—moving forward. More broadly, the provisions at
issue simply established ICON as a secured creditor in the wind-
up and dissolution of the Finau Corporation. And while these
provisions entitled ICON to first position with respect to the
Finau Corporation’s “funds,” “assets,” and “future revenue,”
they said nothing about ICON having any entitlement to the
winnings, moving forward, from golfers no longer affiliated with
the Finau Corporation or from the Finaus personally. We thus
disagree with Hunter’s suggestion that these wind-up provisions
entitled ICON to the earnings of the Finaus individually after the
dissolution of the Finau Corporation, and we likewise disagree
with his suggestion that they somehow meant that the applicable
statutes of limitations did not start running at dissolution of the
corporation itself.
In a related vein, Hunter suggests that even if “the
continued operation of the Finau Corporation was a condition of
the Loan Agreement,” that requirement was “severable from the
contractual provision requiring loan repayment.” But Hunter
bases this claim on his unsupported assertion that the Loan
Agreement granted ICON “a first place position to any future
winnings of Tony and Gipper Finau” individually. (Emphasis
added.) Because we see no basis for that conclusion, we reject
Hunter’s severability argument as well.
20210864-CA 9 2024 UT App 17Hunter v. Finau
both broadly, and, more particularly, with respect to the causes of
action for breach of contract and breach of the implied covenant
of good faith and fair dealing. Before pleading these causes of
action, Hunter pleaded the following facts in the earlier portions
of his complaint:
1. “It was the intent of the parties—and an express term
of the Loan Agreement—that The Finau Corporation
would repay to ICON Sports the amount of $495,000.”
(Emphasis added.)
2. “An express condition of the Equity Purchase
Agreement was that all monies, contracts, and business
properties outside of player’s winnings would flow into
The Finau Corporation for the benefit of the Finau
Corporation and its members.” (Emphasis added.)
3. “It was understood by the Parties, including Tony and
Gipper, that all of Tony and Gippers’ [sic] earned
monies, contracts, and business properties for the
duration of their professional careers would flow into the
Finau Corporation in perpetuity.” (Emphases added.)
4. “[I]nstead of flowing all monies, contracts, and business
properties through The Finau Corporation, as was
required under the Equity Purchase Agreement, the
Finau’s [sic] voted to dissolve The Finau Corporation.”
(Emphasis added.)
5. Dissolution was “a deliberate attempt to avoid paying
the 20% equity due under the Equity Purchase
Agreement.”
6. “Dissolution of The Finau Corporation was contrary to the
Parties’ intent when the Equity Purchase Agreement
was entered into . . . .” (Emphasis added.)
20210864-CA 10 2024 UT App 17Hunter v. Finau
7. “The Finaus dissolved The Finau Corporation in a
deliberate attempt to avoid having to pay ICON Sports
a 20% interest in Tony and Gipper’s earnings under the
Equity Purchase Agreement.”
8. “Had the Finaus revealed that they had no intention of
repaying the $495,000 loan and no intention of actually
selling a 20% interest in Tony and Gipper’s professional
earnings in perpetuity, or in running those earnings
through The Finau Corporation in perpetuity, ICON Sports
would not have entered into the Loan Agreement or
Equity Purchase agreement.” (Emphasis added.)
¶24 The district court relied on these asserted facts as a basis
for its ruling, and we do as well. Both individually and
collectively, these alleged facts demonstrate that the continued
existence of the Finau Corporation was a key component of the
Agreements and the parties’ expectations when entering into
them. If it’s true, as Hunter alleged in his complaint, that the
“express” terms of the Agreements directly provided for ICON to
be repaid through the monies earned by the Finau Corporation,
and if it’s true that it was “understood by the Parties” that “all of
Tony and Gippers’ [sic] earned monies, contracts, and business
properties for the duration of their professional careers would
flow into the Finau Corporation in perpetuity,” and if it’s also true
that the Finaus’ subsequent dissolution of the Finau Corporation
was a “deliberate attempt” to avoid paying what was owed under
the Equity Agreement in particular, then it would be true that the
dissolution of the Finau Corporation constituted a breach of the
Agreements that effectively rendered continued performance of
the contracts impossible.
¶25 Hunter pleaded a single cause of action for breach of
contract, wherein he addressed both the Equity Agreement and
the Loan Agreement. At the outset of that cause of action, Hunter
“reallege[d] and incorporate[d] by reference all of the preceding
20210864-CA 11 2024 UT App 17Hunter v. Finau
paragraphs” from the earlier portions of his complaint. From
there, he alleged, among other things, that an “express condition
of the Equity Purchase Agreement was that all monies . . . (outside
of player’s winnings) would flow into The Finau Corporation for
the benefit of The Finau Corporation and its members” and that
the Finaus had breached the Equity Agreement “by failing to flow
all of Tony and Gippers’ [sic] monies, contracts, and business
properties into the Finau Corporation for the benefit of the Finau
Corporation and its members.” And with respect to the Loan
Agreement, Hunter alleged that the Finaus had breached it “by
failing to repay the loan amount of $495,000 under the terms of
the contract.” As noted, the terms of the contract guaranteed
repayment through “50% of all Finau Corporation revenue and
winnings of participant golfers in [the] Finau Corporation.” And
again, Hunter had alleged earlier in the complaint that “an
express term of the Loan Agreement” was that the “Finau
Corporation would repay to [ICON] the amount of $495,000.”
Thus, Hunter’s cause of action for breach of contract pointed to
the dissolution of the Finau Corporation as being a breach of the
Agreements.
¶26 Hunter was even clearer about this in his cause of action
for breach of the implied covenant of good faith and fair dealing.
There, he alleged that the “Loan Agreement . . . anticipated and
required that Tony and Gipper’s monies flow through the Finau
Corporation.” He alleged that the Equity Agreement “also
anticipated and required that all of Tony and Gipper’s monies
flow through The Finau Corporation in perpetuity.” And he then
alleged that the Finaus “took deliberate and calculated steps to
dissolve the Finau Corporation just two years later” “in an
attempt to avoid repayment of the loan and payment of the 20%
equity interest.” He then specifically alleged that these actions
constituted a breach of the covenant of good faith and fair dealing.
¶27 In light of all this, we agree with the district court that if
there was a breach of the Agreements or a breach of the implied
20210864-CA 12 2024 UT App 17Hunter v. Finau
covenant, any such breach occurred when the Finau Corporation
was dissolved. As a result, that’s when the statute of limitations
began running.
¶28 Hunter assails this conclusion on two principal grounds,
but we find neither availing.
¶29 First, Hunter suggests that we should not use all of the
above facts from his complaint as part of our analysis. But “our
law of civil procedure has long deferred to the plaintiff as the
master of the complaint. . . . We judges are neutral arbiters—not
advocates. To police that distinction we keep ourselves out of the
business of second-guessing the pleading decisions of the
parties.” Utah Stream Access Coal. v. VR Acquisitions, LLC, 2019 UT
7, ¶ 41, 439 P.3d 593 (quotation simplified). This is largely why
courts “accept the factual allegations” from the complaint as true
when considering a motion to dismiss. Koerber v. Mismash, 2013
UT App 266, ¶ 3, 315 P.3d 1053 (quotation simplified).
¶30 The first six facts from the numbered list above were
alleged in Hunter’s general “Statement of Facts,” and Hunter
realleged them at the outset of these causes of action, so they are
appropriately accepted as true for purposes of our analysis. And
while the seventh and eighth facts from that list were pleaded
under his fraud in the inducement cause of action, that was
Hunter’s first-listed cause of action, and in both the breach of
contract and breach of covenant causes of action, Hunter
“reallege[d] and incorporate[d] by . . . reference all of the
preceding paragraphs as though fully set forth below.” Thus, by
Hunter’s own framing, those facts are appropriately considered
to be true.
¶31 Second, Hunter argues that dissolution of the Finau
Corporation constituted “at most” an anticipatory breach. From
this, he suggests that the statute of limitations clock did not start
running until an actual breach occurred.
20210864-CA 13 2024 UT App 17Hunter v. Finau
¶32 The problem with this argument is that it was not
preserved for review on appeal. Below, Hunter argued that
payment under the Agreements was subject to a “condition
precedent”—namely, the Finaus earning money from
professional golf—and that this “condition precedent” did not
occur until some point after 2009. But condition precedent and
anticipatory breach are distinct legal theories. A condition
precedent is “an event, not certain to occur, which must occur
before performance under a contract becomes due.” Palmer v.
Allstate Fire & Cas. Ins., 2022 UT App 4, ¶ 17, 505 P.3d 517(quotation simplified); see also Skolnick v. Exodus Healthcare
Network, PLLC, 2018 UT App 209, ¶ 15, 437 P.3d 584. The condition
can fall—and, indeed, in some non-Utah jurisdictions, must fall—
outside of the control of either of the parties. 17A Am. Jur. 2d
Contracts § 447 (2024). Anticipatory breach, on the other hand,
occurs where one party “manifests a positive and unequivocal
intent not to render performance when the time fixed for
performance is due.” Jessup v. Five Star Franchising LLC, 2022 UT
App 86, ¶ 36, 515 P.3d 466 (quotation simplified). Thus, a
condition precedent analysis looks to whether an event has
occurred that would trigger a party’s contractual obligations; by
contrast, an anticipatory breach analysis looks to whether an
already-obligated party has done something to indicate that it no
longer intends to comply with its contractual obligations.
¶33 In addition to being focused on different events, these
doctrines differ as to the nature and timing of the remedies. A
party who is wronged by an anticipatory breach has a choice
whether to sue immediately or to “[t]reat the contract as still
binding and wait until the time arrived for its performance and at
such time bring an action on the contract.” Hurwitz v. David K.
Richards & Co., 436 P.2d 794, 796 (Utah 1968). By contrast, “where
the duty of the obligor to perform is contingent upon the
occurrence or existence of a condition precedent, the obligee may
not require performance by the obligor, because the obligor’s
duty, and conversely the obligee’s right to demand performance,
20210864-CA 14 2024 UT App 17Hunter v. Finau
does not arise until that condition occurs or exists.” Harper v. Great
Salt Lake Council, Inc., 1999 UT 34, ¶ 14, 976 P.2d 1213.
¶34 “This court’s preservation requirement is well-settled. An
issue is preserved for appeal when it has been presented to the
district court in such a way that the court has an opportunity to
rule on that issue.” Horne v. Horne, 2022 UT App 54, ¶ 10, 511 P.3d
1174 (quotation simplified). And to “provide the court with this
opportunity, the issue must be specifically raised by the party
asserting error, in a timely manner, and must be supported by
evidence and relevant legal authority.” Id. (quotation simplified).
“The fact that the court makes a ruling on [an] overarching”
motion “does not, by itself, preserve unmentioned theories of
opposition for our review.” Jessup, 2022 UT App 86, ¶ 31.
¶35 Here, Hunter argued below that the Finaus’ future golf
earnings were a condition precedent for the Agreements. But he
did not separately argue that the Finaus anticipatorily breached
those contracts by dissolving the Finau Corporation. Because he
did not preserve this distinct legal theory by giving the district
court an opportunity to rule on it, we have no occasion to reach it.
¶36 In short, the plain language of the Agreements and the
allegations of Hunter’s complaint all indicate that the breaches, if
any, occurred when the Finaus dissolved the Finau Corporation.
Because that dissolution occurred in 2009, and because Hunter
did not file his suit until 2021, the district court correctly
concluded that these causes of action were time-barred.
B. Unjust Enrichment
¶37 Hunter also appeals the dismissal of his claim for unjust
enrichment, which he pleaded below as an alternative to his
contract claims. But, as with the contract claims, the statute of
limitations for the unjust enrichment claim began to run with the
dissolution of the Finau Corporation in 2009.
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¶38 The elements of an unjust enrichment claim are that the
“defendant (1) received a benefit, (2) appreciated or had
knowledge of this benefit, and (3) retained the benefit under
circumstances that would make it unjust for the defendant to do
so.” Jones v. Mackey Price Thompson & Ostler, 2015 UT 60, ¶ 45, 355
P.3d 1000 (quotation simplified). The statute of limitations on a
claim for unjust enrichment is four years. See Utah Code § 78B-2-
307(1)(a); Pero v. Knowlden, 2014 UT App 220, ¶ 16, 336 P.3d 55.
¶39 In his complaint, Hunter alleged that the Finaus were
unjustly enriched as a result of “wrongfully taking $495,000 as a
loan without repayment” and “taking $5,000 for consideration
under” the Equity Agreement. The event that would render
retention of these benefits “unjust” was the Finaus’ decision to
dissolve the Finau Corporation, thereby ensuring that ICON
would not be repaid under the terms of the Agreements. Thus, for
largely the same reasons discussed above with respect to the
breach of contract and breach of covenant claims, the statute of
limitations for the unjust enrichment claim began running at the
time of dissolution. So by the time that Hunter filed suit in 2021,
it was eight years too late. The district court correctly dismissed
this claim.
C. Discovery Rule
¶40 Finally, Hunter argues that the discovery rule tolled the
statute of limitations for each of the claims at issue. We disagree.
¶41 Where a particular “statute of limitations lacks a statutory
discovery rule,” the statute of limitations may still be tolled under
the equitable discovery rule. Russell Packard, 2005 UT 14, ¶ 25. The
equitable discovery rule has two branches, applying (1) “where a
plaintiff does not become aware of the cause of action because of
the defendant’s concealment or misleading conduct” (the
concealment branch), and (2) “where the case presents
exceptional circumstances and the application of the general rule
would be irrational or unjust, regardless of any showing that the
20210864-CA 16 2024 UT App 17Hunter v. Finau
defendant has prevented the discovery of the cause of action” (the
exceptional circumstances branch). Id. (quotation simplified).
¶42 Both branches require a showing that “the plaintiff neither
discovered nor reasonably should have discovered the facts
underlying the cause of action before the limitations period
expired.” Id. ¶ 29 (a concealment case); accord Warren v. Provo City
Corp., 838 P.2d 1125, 1129 (Utah 1992) (an exceptional
circumstances case). Under the exceptional circumstances branch,
after the plaintiff makes the initial showing, a court will apply a
“balancing test to evaluate whether the application of the
discovery rule would be irrational or unjust.” Klinger v. Kightly,
791 P.2d 868, 872 (Utah 1990). Pursuant to this balancing, the
equitable discovery rule applies where “the hardship the statute
of limitations would impose on the plaintiff in the circumstances
of the case outweigh[s] any prejudice to the defendant from
difficulties of proof caused by the passage of time.” Id. (quotation
simplified). 5
4F
¶43 It is not entirely clear from the briefing which branch of the
equitable discovery rule Hunter is invoking. But the gravamen of
his claim is clear. According to Hunter, after the Finaus dissolved
the Finau Corporation, he and his predecessors lacked the ability
to “determine when the Finaus had golf winnings and monies that
would trigger obligations under the contract.” In Hunter’s view,
he had no reason to believe that the Finaus were “refus[ing] to pay
their obligations under the contracts” until the phone call he had
5. There is a further wrinkle to the concealment branch. A plaintiff
may argue that the statute of limitations should toll even though
the plaintiff “knew or reasonably should have known of the facts
underlying” the cause of action if the plaintiff can also show that
“a reasonably diligent plaintiff would not necessarily have filed a
complaint within the limitations period.” Russell Packard Dev., Inc.
v. Carson, 2005 UT 14, ¶ 30, 108 P.3d 741. Hunter did not raise that
argument here, so we do not address it.
20210864-CA 17 2024 UT App 17Hunter v. Finau
with Tony on May 9, 2015. And since the suit was filed within six
years of that call, Hunter argues that his contract-based claims
should survive under the equitable discovery rule.
¶44 But as explained above, the language of the Agreements
and the facts alleged in Hunter’s own complaint point to the
dissolution of the Finau Corporation as the breach. Hunter has not
argued, and he cannot plausibly argue, that he or his predecessors
were unaware of that dissolution—particularly given that his
predecessor (Gasser) was present at the board meeting where the
vote for dissolution occurred. As a result, whether this is viewed
as a concealment case or an exceptional circumstances case, the
equitable discovery rule did not toll the running of any applicable
statute of limitations.
CONCLUSION
¶45 Based on the allegations as pleaded in his own complaint,
the statute of limitations for each of Hunter’s claims began to run
in 2009, and we see no basis for concluding that those statutes
were tolled. Since Hunter did not file his suit until 2021, the
district court correctly dismissed each of the claims.
¶46 Affirmed.
20210864-CA 18 2024 UT App 17