High Desert Estates LLC v. Arnett

2015 UT App 196THE UTAH COURT OF APPEALS
HIGH DESERT ESTATES LLC AND BRETT FOLKMAN,
Plaintiffs and Appellants,
v.
PATRICIA ARNETT AND CATHERINE ARNETT,
Defendants and Appellees.
Opinion
No. 20140146-CA
Filed August 6, 2015
Fifth District Court, St. George Department
The Honorable James L. Shumate
No. 090502405
Justin R. Elswick and Justin D. Heideman, Attorneys
for Appellants
N. Adam Caldwell and Bryson R. Brown, Attorneys
for Appellees
JUDGE MICHELE M. CHRISTIANSEN authored this Opinion, in
which JUDGES J. FREDERIC VOROS JR. and JOHN A. PEARCE
concurred.
CHRISTIANSEN, Judge:
¶1 High Desert Estates LLC and Brett Folkman appeal from
the trial court’s ruling that they had failed to demonstrate
mutual mistake in the formation of a real estate purchase
contract. Because the record evidence supports the trial court’s
ruling, we affirm.
BACKGROUND
¶2 This case concerns a parcel of land in Veyo, Utah, that
Catherine Arnett sold to Brett Folkman (the Property). Folkman
is a managing member of High Desert Estates LLC. High Desert
High Desert Estates LLC v. Arnett
owns a large tract of land adjacent to the Property, which it
sought to develop. To facilitate development, High Desert
sought an easement from adjacent landowners, including
Patricia and Catherine Arnett,1 to build a road connecting High
Desert’s property to the nearby public highway. When none of
the landowners were willing to grant an easement to High
Desert, High Desert approached the Arnetts to purchase the
Property. Folkman executed a real estate purchase contract for
the Property (the REPC) in June 2007, and he recorded an
easement in favor of High Desert across the Property in October
2007.2
¶3 In early 2009, Folkman contacted the county regarding the
Property’s suitability for building houses. He discovered that a
previous owner had subdivided the Property from a larger
parcel without recording a subdivision plat amendment, in
violation of county ordinances. This improper subdivision
prevented Folkman from building houses on the Property. High
Desert and Folkman (collectively, the Developers) filed a
complaint seeking rescission of the REPC, arguing that there was
a mutual mistake between the parties regarding whether a house
could be built on the Property ‚as is‛—without further zoning
modifications or plat amendments.3 The REPC contains no
1. Though Patricia Arnett did not own the Property, she met
with representatives from High Desert to discuss the sale of the
Property and otherwise acted at times as an agent for Catherine
Arnett. We therefore refer to the two collectively as the Arnetts
except where the distinction is material to our analysis.
2. Initially High Desert itself sought to purchase the property
from the Arnetts. However, before the contract was executed,
Folkman substituted himself as the purchaser and executed the
REPC in his own name.
3. The Developers also raised a number of other claims, all of
which were dismissed or denied by the trial court. The
(continued)
20140146-CA 2 2015 UT App 196High Desert Estates LLC v. Arnett
warranties or representations regarding the suitability of the
Property for building houses.
¶4 The case proceeded to a bench trial, and the trial court
ruled that the Developers had failed to prove a mutual mistake
that would justify rescission of the REPC. First, the court
determined that because the parties were sophisticated buyers
and sellers of real estate, they could be properly charged with
constructive knowledge of both the recorded documents—the
plat map describing the Property as recorded—and the relevant
zoning ordinances. The court therefore found that the parties
had constructive knowledge that absent a replatting or rezoning
of the Property, ‚the zoning laws and designations in effect at
the time of purchase proscribed building homes on [the
Property+.‛ Second, the court found that even if the parties were
mistaken about whether a house could be built on the Property,
the Developers had not proven that the Property’s suitability for
building a house ‚as is‛ was a ‚basic assumption or vital fact
upon which the parties based their bargain or that the mistake
related to a material feature of the parties’ agreement.‛ The
Developers appeal from the trial court’s ruling.
ISSUES AND STANDARDS OF REVIEW
¶5 First, the Developers argue that this court lacks
jurisdiction to hear the appeal because the trial court’s order is
nonfinal. ‚The question of whether an order is final and
appealable is a question of law.‛ Powell v. Cannon, 2008 UT 19,
¶ 9, 179 P.3d 799 (citation omitted). We therefore decide as a
matter of law whether the trial court’s order is a final judgment
and whether we have jurisdiction over this appeal.
(…continued)
Developers have not challenged the trial court’s rulings on any
of these claims, and they are therefore not relevant to this
appeal.
20140146-CA 3 2015 UT App 196High Desert Estates LLC v. Arnett
¶6 The Developers next argue that the trial court erred in
finding that the Developers had not proven a mutual mistake
justifying rescission of the REPC. A trial court’s findings of fact
will be set aside only if clearly erroneous. Vandermeide v. Young,
2013 UT App 31, ¶ 14, 296 P.3d 787. We will therefore affirm the
trial court’s findings unless they are ‚‘against the clear weight of
the evidence’‛ or we reach ‚‘a definite and firm conviction that a
mistake has been made.’‛ Id. (quoting State v. Walker, 743 P.2d
191, 193 (Utah 1987)).
ANALYSIS
I. The Trial Court’s Order Is Final and Appealable.
¶7 As a threshold issue, we address the Developers’
argument that we lack jurisdiction over this appeal because the
trial court’s order is not final and appealable. Generally, a party
may appeal only ‚‘final orders and judgments’ from a district or
juvenile court, except as otherwise provided by law.‛ Powell v.
Cannon, 2008 UT 19, ¶ 11, 179 P.3d 799 (quoting Utah R. App. P.
3(a)). ‚The final judgment requirement is jurisdictional,‛ and if
the order appealed from fails to satisfy this requirement, ‚we
lack jurisdiction over the appeal and must dismiss it.‛ Id. ¶ 12.
¶8 After trial, the Arnetts submitted a proposed order. Seven
days later, the Developers filed an objection to the proposed
order. Two days after that, the trial court signed the proposed
order and entered the final judgment. The Developers argue that
because the trial court never explicitly ruled on the Developers’
objection, that objection ‚is still pending and remains
unresolved,‛ and the trial court’s order is therefore nonfinal.
¶9 This court rejected that very argument in Western States
Development, Inc. v. Prestige Cleaners, Inc., 2011 UT App 174, 254
P.3d 773 (per curiam). There, Prestige Cleaners, the appellant,
contended that ‚there [was] no final, appealable order because
the district court never resolved its objection to the proposed
20140146-CA 4 2015 UT App 196High Desert Estates LLC v. Arnett
order.‛ Id. ¶ 3. We explained that this court ‚treats such
objections as having been implicitly overruled by the entry of the
proposed order.‛ Id. Thus, we held that ‚the entry of the order
by the district court implicitly overruled Prestige Cleaners’s
objections to that order.‛ Id.
¶10 Here, the Developers filed an objection to the proposed
order. The trial court signed and entered the proposed order two
days later. As in Western States, the trial court’s signing and entry
of the proposed order implicitly overruled the Developers’
objection. See id. The trial court’s order is therefore final, and we
conclude that we have jurisdiction to consider the merits of the
Developers’ appeal.
II. The Record Evidence Supports the Trial Court’s Findings.
¶11 The Developers next argue that the trial court erred in
finding that they had not proven the elements of mutual
mistake. ‚A party may rescind a contract when, at the time the
contract is made, the parties make a mutual mistake about a
material fact, the existence of which is a basic assumption of the
contract.‛ GeoNan Props., LLC v. Park-Ro-She, Inc., 2011 UT App
309, ¶ 12, 263 P.3d 1169 (citation and internal quotation marks
omitted). The proponent of a mutual-mistake claim must prove
the elements by clear and convincing evidence. Vandermeide v.
Young, 2013 UT App 31, ¶ 12, 296 P.3d 787. The trial court here
found that the Developers had failed to prove by clear and
convincing evidence either that the parties made a mutual
mistake in the formation of the REPC or that any such mistake
was material to their agreement.
¶12 We first address the Developers’ challenge to the trial
court’s finding that any mistake regarding the Developers’
ability to build a house on the Property ‚as is‛ was immaterial to
the parties’ agreement. To prevail on this point, the Developers
must demonstrate that ‚‘the finding is without adequate
evidentiary support or induced by an erroneous view of the
law.’‛ Id. ¶ 14 (quoting State v. Walker, 743 P.2d 191, 193 (Utah
20140146-CA 5 2015 UT App 196High Desert Estates LLC v. Arnett
1987)). However, ‚*t+he existence of conflicting evidence does
not give rise to clear error as long as evidence supports the trial
court’s decision.‛ Hale v. Big H Constr., Inc., 2012 UT App 283,
¶ 60, 288 P.3d 1046 (citation and internal quotation marks
omitted). Thus, we will not reweigh the evidence presented at
trial but will instead ‚defer to the trial court’s advantaged
position to weigh that conflicting evidence‛ absent a showing
that the trial court’s findings lack evidentiary support. Bonnie
& Hyde, Inc. v. Lynch, 2013 UT App 153, ¶ 18, 305 P.3d 196.
¶13 The trial court made a number of subsidiary findings
pertinent to this issue, including findings that the Developers
purchased the Property ‚to serve as a conduit or second access
to the High Desert Property‛; that the evidence ‚preponderates,
but is not clear and convincing, that [the Developers] also
contemplated building homes on *the Property+‛; and that any
plans to build homes on the Property ‚did not necessarily
require that *the Property+ be buildable ‘as is,’ i.e., buildable
without a zoning change or plat amendment.‛ The trial court
therefore concluded that ‚there is not clear and convincing
evidence that a material feature or basic assumption of the
parties’ agreement was *the Property+ being buildable ‘as is,’ i.e.,
buildable without a plat amendment or zoning change.‛ There is
sufficient evidence in the record to support the court’s findings.
Specifically, Patricia Arnett testified that the Developers sought
to obtain either an easement or ownership of the Property to
build a road for access to High Desert’s property, that an agent
of the Developers told her that the Developers were ‚just going
to include *the Property+ as part of the whole subdivision plat,‛
and that the same agent suggested that the ability to build
houses on the Property itself ‚would just be a bonus.‛
¶14 The Developers have not attempted to demonstrate that
the trial court’s findings lack legally sufficient evidentiary
support. Instead, the Developers merely cite other evidence that
could support a finding in their favor and assert that ‚*t+he facts
and testimony cited . . . establish[] by clear and convincing
evidence that the ability to build a home on [the Property] was a
20140146-CA 6 2015 UT App 196High Desert Estates LLC v. Arnett
crucial and material aspect of the negotiations.‛ But we will not
reweigh the conflicting evidence so long as there is evidence to
support the trial court’s findings. Hale, 2012 UT App 283, ¶ 60.
We therefore conclude that the Developers have failed to
demonstrate that the trial court clearly erred in finding that the
ability to build on the Property ‚as is‛ was not a material feature
of the parties’ agreement.
¶15 Because the trial court’s finding regarding materiality is
supported by the evidence, we need not address the Developers’
argument that the trial court clearly erred in finding there was
no mistake. The Developers’ failure to prove that the alleged
mistake was material to the parties’ agreement is fatal to their
claim for mutual mistake. See GeoNan Props., 2011 UT App 309,
¶ 12. We therefore affirm the trial court’s determination that the
Developers failed to prove mutual mistake by clear and
convincing evidence.
III. The Arnetts Are Entitled to Attorney Fees Incurred on
Appeal.
¶16 The Arnetts have requested an award of their attorney
fees reasonably incurred on appeal. Generally, ‚when a party is
entitled to attorney fees below and prevails on appeal, that party
is also entitled to fees reasonably incurred on appeal.‛ Dillon v.
Southern Mgmt. Corp. Ret. Trust, 2014 UT 14, ¶ 61, 326 P.3d 656(citation and internal quotation marks omitted). The trial court
concluded that the Arnetts were ‚entitled to costs and attorney
fees under the REPC.‛ Because the Arnetts have prevailed on
appeal, they are also entitled to an award of their attorney fees
reasonably incurred on appeal.
CONCLUSION
¶17 The trial court’s signing and entry of the proposed order
implicity overruled the Developers’ objection to that order. The
trial court’s order was therefore final, and we have jurisdiction
20140146-CA 7 2015 UT App 196High Desert Estates LLC v. Arnett
to consider the merits of this appeal. We conclude that the trial
court did not clearly err in finding that the Developers failed to
prove mutual mistake by clear and convincing evidence. We
therefore affirm the trial court’s order, and we remand to the
trial court to calculate and award to the Arnetts the amount of
attorney fees they reasonably incurred on appeal.
20140146-CA 8 2015 UT App 196