Jessup v. Five Star Franchising

2022 UT App 86THE UTAH COURT OF APPEALS
HOLDEN JESSUP AND MICHAEL KRISTY,
Appellants,
v.
FIVE STAR FRANCHISING LLC, CHAD JONES, AND D. SCOTT ABBOTT,
Appellees.
Opinion
No. 20210220-CA
Filed July 8, 2022
Fourth District Court, Provo Department
The Honorable Thomas Low
No. 200400748
Jonathan L. Jaussi and Stephen W. Whiting,
Attorneys for Appellants
D. Scott Crook and Matthew J. Morrison,
Attorneys for Appellees
JUDGE RYAN M. HARRIS authored this Opinion, in which JUDGES
DAVID N. MORTENSEN and RYAN D. TENNEY concurred.
HARRIS, Judge:
¶1 Five Star Franchising LLC (Five Star) leased commercial
property from Holden Jessup and Michael Kristy. Several years
into the lease term, after interpreting email communication from
Jessup and Kristy as an anticipatory repudiation of the lease, Five
Star rescinded the lease and later vacated the premises. Jessup and
Kristy sued Five Star for breach of the lease, but the district court
determined, on summary judgment, that they had repudiated the
lease, and on that basis dismissed their lawsuit. Jessup and Kristy
now challenge that determination, and we find that challenge to
be, at least in one respect, meritorious. Five Star asks us to affirm
Jessup v. Five Star Franchising
on an alternative ground, but we are unable to do so on the record
before us. Accordingly, we reverse and remand.
BACKGROUND
¶2 Chad Jones and D. Scott Abbott owned two businesses
together—Five Star and Canuck Ventures LLC (Canuck). Canuck
owned a piece of commercial property (the Property) located in
Spanish Fork, Utah and had leased the Property to Five Star for a
number of years. In 2015, however, Canuck decided to put the
Property up for sale. As part of the listing summary, Canuck
indicated that it anticipated that Five Star would sign a new ten-
year lease and remain a tenant of the Property.
¶3 In August 2015, Jessup and Kristy, in their individual
capacities, made an offer to purchase the Property. That same
month, Canuck (as seller) and Jessup and Kristy (as buyers)
entered into a Real Estate Purchase Contract (the REPC), which
was made contingent on the execution of a “new lease” between
Jessup and Kristy, on the one hand, and Five Star, on the other.
Per the REPC, it was anticipated that due diligence would be
completed by the end of September, with a closing to occur by the
end of November.
¶4 During the due diligence period, Five Star (as the
prospective tenant) negotiated the terms of a lease with Jessup
and Kristy (as prospective landlords). Parts of the lease were
finalized and executed in September 2015, with the final
addendum signed no later than October 12, 2015. Jessup and
Kristy are described in the lease as “landlord[s]” in their
individual capacities (“Holden Jessup and Michael Kristy as
Tenants in Common”). But because Jessup and Kristy had not yet
finalized the purchase of the Property at the time the lease was
signed, the lease was expressly contingent on the anticipated real
estate transaction being finalized, stating that “this lease is only
20210220-CA 2 2022 UT App 86Jessup v. Five Star Franchising
valid if Holden Jessup and Mike Kristy (or their assigns)
purchase[] the [Property] before January 1, 2016.”
¶5 By its terms, the new lease was to commence on December
1, 2015, the day after the purchase of the Property was to close.
The term of the lease was to be ten years, with Five Star obligated
to occupy the Property through November 2025. The lease
specified the rent amount that Five Star would be obligated to pay
each month, an amount that gradually increased each year. Jones
and Abbott each agreed to personally guarantee Five Star’s
obligations under the new lease.
¶6 Most of the terms of the lease were contained in a twenty-
five-page single-spaced document (the Base Lease), but some
terms were reflected in two short addenda (Addendum 1 and
Addendum 2) to the Base Lease. Addendum 1 contained one
enumerated modification to the Base Lease, and Addendum 2
contained fourteen more; both addenda stated that their terms
were to be considered part of the lease agreement between the
parties and that those terms “shall supersede” or “shall control”
over the terms of the Base Lease in the event of any conflict.
Addendum 2, in particular, stated that “[a]ll other terms of the
[Base] Lease not modified” in the addendum “shall remain the
same.” Only Five Star—and not Jessup or Kristy—signed the Base
Lease and Addendum 1, but all parties executed Addendum 2.
¶7 In late November 2015, as anticipated, the real estate
transaction closed, and Canuck conveyed the Property out of its
possession. As already noted, the “Buyer[s]” listed on the face of
the REPC were Jessup and Kristy, in their personal capacities. But
not all of the closing documents are contained in the record
submitted to us on appeal; indeed, as far as we are aware, the only
such document included in our record is a warranty deed, dated
November 25, 2015, by which Canuck conveyed the Property not
to Jessup and Kristy in their individual capacities but, instead, to
Jessup and Kristy in their capacities as trustees of two family
20210220-CA 3 2022 UT App 86Jessup v. Five Star Franchising
trusts (the Trusts). Under the terms of the deed, Canuck conveyed
the Property to “Holden D. Jessup and Adele K. Jessup, Trustees
of the Holden D. Jessup and Adele K. Jessup Revocable Living
Trust dated October 2, 2000,” and to “Michael Kristy and Pamela
M. Kristy, Trustees, or their successors in trust, under the Michael
Kristy and Pamela M. Kristy Living Trust, dated January 3, 1998.”
¶8 In discussing the nature of the November 2015 conveyance,
the parties use similar descriptions. In a sworn declaration, Jessup
avers that he and Kristy “initially purchased” the Property from
Canuck pursuant to the REPC, and then “asked that the
[P]roperty be titled in the names of [their] respective trusts.” And
in its appellate brief, Five Star (apparently quoting Jessup’s
declaration) states that “Jessup and Kristy purchased the Property
and ‘asked that the [P]roperty be titled’ in” the Trusts.
¶9 After the real estate transaction closed, Five Star occupied
the premises, without apparent incident, for some three years,
paying rent according to the amounts set forth in the Base Lease.
In 2016, the parties agreed to a third addendum to the lease
agreement, with Jessup and Kristy executing the addendum in
their individual capacities.
¶10 In 2018, Five Star applied for a loan that was to be
guaranteed by the federal government’s Small Business
Administration (the SBA). On May 7, 2018, Jones—on behalf of
Five Star—asked Jessup and Kristy, via email, for a copy of the
signed Base Lease that Five Star could submit to the SBA as part
of its loan application, because “having an original is something
SBA will look for.” In response, Jessup and Kristy acknowledged
that they had never signed the Base Lease and that their decision
not to sign it had been intentional, stating specifically as follows:
In reviewing the [Base Lease] for signature, we
remembered why we didn’t sign it originally: there
are a number of errors and inconsistencies
20210220-CA 4 2022 UT App 86Jessup v. Five Star Franchising
throughout the document that really need to be
corrected before we would feel comfortable signing
it.
Jessup and Kristy offered their view that, “[r]ather than spending
[time] trying to fix that old document, [they] felt it would be
easier” to negotiate a new lease, and they attached their “standard
lease agreement,” a “30+ page document” they suggested could
be used to supplant the Base Lease and its corresponding
addenda.
¶11 Five Star was apparently unsure what to make of this
response, and just a few minutes later, Jones sought clarification
by responding as follows:
It sounded like it might be the case that you never
signed the [Base Lease]. If that’s the case, as I read
your message, it sounded like you are saying you do
not agree to that original document and will instead
only sign this new version and not execute the
earlier version with which you didn’t fully agree. Is
that correct?
¶12 Over an hour later, at 4:09 p.m. on May 7, Jessup and Kristy
responded by stating as follows:
We do not have a fully-signed copy of the 2015 lease
agreement. It was never signed by us, and instead,
we all created [Addendum 2] to patch over it and its
shortcomings. We’re really uncomfortable signing
the 2015 agreement as-is, for the reasons we’ve
stated. We strongly prefer that we all sign the new
lease agreement.
¶13 Later that afternoon, Jones issued this response, which was
the final communication in the May 2018 email exchange:
20210220-CA 5 2022 UT App 86Jessup v. Five Star Franchising
Thanks for clarifying your position. Based on your
confirming the reasons for not signing, we concur
that a new agreement is preferable. . . . [W]e are
aligned in confirming that [the earlier] lease
agreement was never fully agreed to by either side.
As such, we hereby revoke our signatures to the
earlier draft agreement to match your refraining
from signing.
This creates a significant need to execute a new
agreement. We will forward your draft to counsel,
and anticipate having some redlines which we may
need to discuss moving forward. In the interim, if
acceptable, we will continue making payments
along the previous course of conduct, although
noting that these payments are interim payments
and will need to be aligned with a full lease
agreement, since you did not feel comfortable with
the earlier draft language.
The record submitted to the district court on summary judgment
contains no indication of any response by Jessup or Kristy to this
final email.
¶14 Following Five Star’s final email, the parties were never
able to agree on the terms of a new lease. Nevertheless, Five Star
continued to occupy the premises in accordance with the parties’
prior arrangement for nearly another two years, paying rent
according to the gradually escalating amounts set forth in the Base
Lease. In or about March 2020, however, Five Star vacated the
premises and refused to make further payments.
¶15 Shortly thereafter, Jessup and Kristy, in their individual
capacities, filed this lawsuit, alleging breach of contract against
20210220-CA 6 2022 UT App 86Jessup v. Five Star Franchising
Five Star and breach of guaranty against Jones and Abbott. 1
Defendants answered the complaint, denying most of the
allegations and asserting several defenses, including that Jessup
and Kristy’s claims were “barred by the doctrine of anticipatory
repudiation and/or rescission” and that the claims were “barred
because [Jessup and Kristy] lack standing to assert them and/or
they are not the real parties in interest.”
¶16 Early in the litigation, before any discovery had occurred,
Defendants filed a motion for summary judgment based on these
defenses. First, Defendants asserted that Jessup and Kristy “do
not own the Property and never owned the Property at the time”
the lease agreement was entered into, and argued that, because
the Property was ultimately titled in the name of the Trusts,
Jessup and Kristy could not have entered “into a valid and
enforceable lease.” Second, Defendants asserted that, even if the
lease were valid, Jessup and Kristy had repudiated it during the
2018 email exchange, that the parties had been operating under a
month-to-month arrangement since then, and that Jessup and
Kristy therefore had no valid claims in connection with Five Star
vacating the premises in 2020.
¶17 In responding to Defendants’ motion, Jessup and Kristy
disputed Defendants’ contention that they had never owned the
Property, relying on Jessup’s declaration that they had “initially
purchased” it before asking that it be titled in the name of the
Trusts. They also asserted that they had full authority to act on
behalf of the Trusts in any event, and that factual questions
precluded summary judgment on this issue.
¶18 But Jessup and Kristy did not make any legal argument in
response to Defendants’ second theory—that they had repudiated
1. Five Star, Jones, and Abbott are herein sometimes referred to
collectively as “Defendants.”
20210220-CA 7 2022 UT App 86Jessup v. Five Star Franchising
the lease during the 2018 email exchange. 2 They did attach—as
part of a request for the court to defer consideration of
Defendants’ motion until after discovery could be completed—a
brief declaration stating that they wished to undertake discovery
regarding, among other things, whether “the lease was . . . validly
rescinded.” But Jessup and Kristy did not mention the word
“repudiate” or “rescind” in the argument section of their
opposition memorandum.
¶19 At oral argument on the motion, Defendants’ attorney first
addressed the trust issue, noting that title to the Property was
“never conveyed to these two plaintiffs, they’ve never owned this
real estate and therefore they’ve never had an ability to convey
the bundle of rights in here into the leasehold interest in that real
estate to these defendants.” Next, Defendants’ attorney addressed
the issue of repudiation, arguing that the 2018 email exchange
“gave [Five Star] a basis upon which [it] could reasonably rely,
that there had never arisen a lease agreement and instead, there
had, throughout this time, been a tenancy at will.”
¶20 When it was his turn to speak, the attorney representing
Jessup and Kristy responded to both arguments—this time,
2. The only passing allusion Jessup and Kristy made to this issue
came in their response to Defendants’ statement of undisputed
material facts. At various points in their motion, Defendants had
quoted from the 2018 email exchange, and Jessup and Kristy
responded to some of those asserted facts by stating that “the
emails speak for themselves” and by asserting that “Defendants
mischaracterize the communications.” In particular, they stated
that they “believe the lease is valid” and offered their view that
the emails showed “that there were flaws in the [Base Lease] that
caused [them] to withhold signature until the flaws could be
corrected by addendum.” In the rest of their memorandum,
however, Jessup and Kristy made no effort to develop this
thought into any legal argument.
20210220-CA 8 2022 UT App 86Jessup v. Five Star Franchising
including the repudiation argument. With regard to that issue,
counsel admitted that the emails contained in the 2018 exchange
were “not the most clear,” and acknowledged that, in some ways,
the email exchange “does sound . . . like we’re saying we don’t
agree to the lease.” But he now offered an alternative
interpretation of the exchange: that Jessup and Kristy were
indicating they still believed the lease to be valid, and that their
signatures on Addendum 2—which they believed patched over
any perceived flaws in the Base Lease and incorporated any
unaltered terms from the Base Lease—were sufficient to
memorialize the arrangement.
¶21 Within that same argument, Jessup and Kristy’s attorney
also briefly mentioned the existence of a “sub-lease agreement”
that he asserted had been signed by the parties in 2018, just days
after the May email exchange; counsel asserted that this sublease
was indicative of Five Star’s understanding that the 2015 lease
was still in effect following the email exchange. Though the
sublease had been attached to Defendants’ motion, this was the
first time the court was informed that the sublease might be
relevant to the repudiation question. 3
¶22 After taking the matter under advisement, the district
court issued a lengthy written ruling. It was not persuaded
by Defendants’ arguments regarding the involvement of the
Trusts, stating that “little hay can be made over the fact that
[Jessup and Kristy] are suing in their individual capacities instead
of in the names of” the Trusts because the Trusts were revocable
3. The sublease had been mentioned in the factual background
section of Defendants’ motion for summary judgment and was
attached as an exhibit to that motion. But Defendants made no
mention of it in the section of their memorandum in which they
argued that Jessup and Kristy had repudiated the 2015 lease, and
(as noted) Jessup and Kristy made no response to that argument
in their opposing memorandum.
20210220-CA 9 2022 UT App 86Jessup v. Five Star Franchising
and Jessup and Kristy—“as settlors—[were] able, at any time,
to withdraw the [P]roperty from the [T]rusts.” In addition, and
in any event, the court indicated an inclination to grant Jessup
and Kristy, pursuant to rule 17(a) of the Utah Rules of Civil
Procedure, “a reasonable time to comply with the requirement
that the action be prosecuted in the name of the real party in
interest.”
¶23 But the court was persuaded by Defendants’ arguments
regarding anticipatory repudiation. It concluded that, as a matter
of law and undisputed fact, Jessup and Kristy “expressly, and
in writing, repudiated the original lease agreement: they
denied ever signing it, indicated that their failure to do so
was intentional because they did not like various unstated aspects
of the agreement, expressed their belief that they [were] not
bound by it, and proposed a new agreement.” The court
determined that, given the tenor of Jessup and Kristy’s 2018
emails, Five Star had validly rescinded the lease, and that Jessup
and Kristy had “concurred, by their silence, with [Five Star’s]
rescission.”
¶24 The court also denied the request, made by Jessup and
Kristy in connection with their opposition to Defendants’ motion,
to defer ruling on the motion until further discovery could be
had, concluding that Jessup’s declaration setting forth the
discovery he and Kristy sought to conduct was conclusory, and
that Jessup and Kristy “identify no particular evidence they
believe to exist, what they must do to obtain it, why the evidence
could not yet be obtained, or how the evidence is relevant to
Defendants’ motion.” As a result of its ruling on Defendants’
motion, the court dismissed Jessup and Kristy’s claims for breach
of contract and breach of guaranty, with prejudice and on the
merits.
¶25 Jessup and Kristy later filed a motion for relief (the Motion
for Relief) from the court’s order as it pertained to repudiation.
20210220-CA 10 2022 UT App 86Jessup v. Five Star Franchising
There, in addition to taking issue with the court’s reasoning
generally, Jessup and Kristy specifically asked the court to
directly address the sublease, which the court had mentioned only
in passing in its written ruling. They also alleged, for the first time,
that Jessup had attempted to contact Five Star via telephone—
after the 2018 email exchange—to “confirm the intention behind
this new sublease.” 4 And they made other assertions, for the first
time, that both parties had continued to perform under the lease,
even after the 2018 email exchange. The court denied the Motion
for Relief, specifically noting that, during the summary judgment
proceedings, Jessup and Kristy had made “no argument or
anything close to such an argument” regarding the sublease, and
concluding in any event that the presence of the sublease did not
change the court’s conclusion.
ISSUES AND STANDARD OF REVIEW
¶26 Jessup and Kristy now appeal, but their appeal is limited.
In particular, they do not appeal the district court’s decision
to deny their Motion for Relief, or its decision declining to
defer ruling on Defendants’ summary judgment motion
until further discovery could be had. Instead, they appeal only
the court’s original order granting the motion for summary
judgment on anticipatory repudiation grounds. For their part,
Defendants ask us to affirm the court’s summary judgment order,
either on that basis or on the alternative ground that Jessup and
Kristy do not own the Property and that any lease was therefore
invalid.
¶27 Summary judgment is appropriate “if the moving party
shows that there is no genuine dispute as to any material fact and
4. This allegation was contained in an affidavit from Jessup,
submitted for the first time in connection with Jessup and Kristy’s
Motion for Relief.
20210220-CA 11 2022 UT App 86Jessup v. Five Star Franchising
the moving party is entitled to judgment as a matter of law.” Utah
R. Civ. P. 56(a). In determining whether a genuine issue of
material fact exists, courts examine “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.” Heslop v. Bear River
Mutual Ins. Co., 2017 UT 5, ¶ 20, 390 P.3d 314 (quotation
simplified). “We review a [district] court’s legal conclusions and
ultimate grant or denial of summary judgment for correctness,
viewing the facts and all reasonable inferences drawn therefrom
in the light most favorable to the nonmoving party.” Heartwood
Home Health & Hospice LLC v. Huber, 2020 UT App 13, ¶ 11, 459
P.3d 1060 (quotation simplified); see also Salo v. Tyler, 2018 UT 7,
¶ 30, 417 P.3d 581 (stating that summary judgment is warranted
when “no reasonable factfinder could rule in the nonmoving
party’s favor”).
ANALYSIS
¶28 We first address Jessup and Kristy’s challenge to the
district court’s determination that, as a matter of law and
undisputed fact, Jessup and Kristy repudiated the lease. Because
we conclude, for the reasons discussed, that the district court
erred in granting summary judgment on that basis, we then
discuss Five Star’s request that we nevertheless affirm the court’s
entry of summary judgment on an alternative basis, namely, that
Jessup and Kristy did not own the Property and therefore the
lease was never valid.
I
¶29 In assessing Jessup and Kristy’s challenge to the district
court’s summary judgment order, we begin by discussing the
procedural parameters governing that challenge, and then
transition into a discussion of the merits of that challenge.
20210220-CA 12 2022 UT App 86Jessup v. Five Star Franchising
A
¶30 With regard to procedure, we first note that “the fact
statements of the moving and opposing memoranda constitute
the constellation of facts to be considered by the district court on
summary judgment,” and that “[t]hose same facts are to be
considered by the reviewing court on appeal.” Warrick v. Property
Reserve Inc., 2018 UT App 197, ¶ 9, 437 P.3d 439. Accordingly, a
factual assertion not introduced to the district court during the
summary judgment proceedings may not be considered by an
appellate court in reviewing the propriety of a summary
judgment order. See id. ¶ 10 n.3 (stating that “the existence of a
fact somewhere in the record does not absolve a party from its
duty to include that fact in its summary judgment
memorandum”). And while a nonmovant has the ability to
controvert a movant’s factual statement “by presenting to the
district court contrary inferences to be made from the objective
facts,” to do so properly the nonmovant “is required to
specifically state the inference to be made.” See USA Power, LLC v.
PacifiCorp, 2010 UT 31, ¶¶ 35, 38 n.6, 235 P.3d 749.
¶31 Second, in order to preserve legal theories for our review,
a party resisting an opponent’s motion must articulate those
theories for the district court. See Freight Tec Mgmt. Group Inc. v.
Chemex Inc., 2021 UT App 92, ¶¶ 36–37, 499 P.3d 894; see also id.
¶ 37 (noting that the nonmovant “did not preserve its challenges
to the summary judgment rulings because it did not oppose [the
movant’s] motion for summary judgment and, therefore, did not
bring arguments to adjudicate its respective rights and
obligations” (quotation simplified)); True v. Utah Dep’t of Transp.,
2018 UT App 86, ¶ 32, 427 P.3d 338 (stating, in the context of
reviewing the propriety of a summary judgment order, that a
nonmovant’s “argument based upon an entirely distinct legal
theory is a new claim or issue and must be separately preserved”
(quotation simplified)). The fact that the court makes a ruling on
20210220-CA 13 2022 UT App 86Jessup v. Five Star Franchising
the overarching summary judgment issue does not, by itself,
preserve unmentioned theories of opposition for our review.
¶32 In considering the merits of Jessup and Kristy’s appellate
challenge, then, we may not consider any new facts or legal
theories brought to the district court’s attention for the first time
during the proceedings concerning the Motion for Relief. We
must, instead, view the propriety of the court’s summary
judgment ruling through the lens of what was presented to that
court in connection with the summary judgment motion,
addressing only the facts and legal theories that were “presented
to the district court in such a way that the court ha[d] an
opportunity to rule on [them].” Freight Tec, 2021 UT App 92, ¶ 36
(quotation simplified).
¶33 During briefing on Defendants’ summary judgment
motion, Jessup and Kristy made no effort to resist Defendants’
legal argument that the 2018 email exchange constituted an
anticipatory repudiation of the lease. During oral argument on the
motion, Jessup and Kristy did—for the first time—articulate
resistance to Defendants’ repudiation theory. While the tactic of
raising a new legal theory at oral argument before the district
court 5 is certainly discouraged, such a maneuver is generally
sufficient to preserve the theory for appellate review, at least so
long as there is no indication—and there is no such indication
here—that the party purposely delayed raising the issue in an
effort to gain a tactical advantage. See Warne v. Warne, 2012 UT 13,
¶¶ 17–22, 275 P.3d 238. But even in such cases, the theory stands
framed, for appellate review, as the parties presented it to the
5. The rule is different with regard to legal theories raised for the
first time at oral argument before this court. We will not consider
theories omitted from a party’s appellate briefs but articulated to
us for the first time at oral argument. See, e.g., Porenta v. Porenta,
2017 UT 78, ¶ 33, 416 P.3d 487 (“We do not address issues raised
for the first time during oral argument.”).
20210220-CA 14 2022 UT App 86Jessup v. Five Star Franchising
district court. Thus, in assessing the propriety of a district court’s
summary judgment ruling, we may not consider additional facts
or context presented to the court only later, in connection with (for
instance) post-judgment motions.
¶34 In this case, Defendants certainly placed at issue the
2018 email exchange and asked the district court to interpret
those emails as an anticipatory repudiation, on the part of Jessup
and Kristy, of the 2015 lease. In evaluating the court’s
interpretation of those emails, we may consider the legal theory
Jessup and Kristy articulated, at oral argument before that court,
in opposition to Defendants’ position. And we may consider the
presence of the sublease, at least insofar as the sublease was
briefly mentioned by Jessup and Kristy’s counsel during the
district court oral argument. But we may not consider, for
instance, Jessup and Kristy’s assertion—made for the first time
during briefing on the post-judgment Motion for Relief—that they
attempted to respond to the final email in the 2018 email
exchange, through telephonic or other means. And other than the
sublease, we may not consider other aspects of the parties’ post-
2018 “continued performance” asserted now on appeal, which
were mentioned for the first time in connection with the Motion
for Relief.
B
¶35 With these procedural parameters in mind, we turn to the
substance of Jessup and Kristy’s appellate challenge to the district
court’s determination that they repudiated the lease.
¶36 “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); see
also Smargon v. Grand Lodge Partners, LLC, 2012 UT App 305, ¶ 18,
288 P.3d 1063 (“Repudiation of a contract gives rise to a claim for
20210220-CA 15 2022 UT App 86Jessup v. Five Star Franchising
total breach.” (quotation simplified)). 6 In most cases, in order for
anticipatory breach to occur, “the repudiating party must have
communicated, by word or conduct, unequivocally,
unconditionally, and positively, its intention not to perform.” 13
Richard A. Lord, Williston on Contracts § 39:37 (4th ed. 2021); see
also Restatement (Second) of Contracts § 250 cmt. b (Am. L. Inst.
1981) (“In order to constitute a repudiation, a party’s language
must be sufficiently positive to be reasonably interpreted to mean
that the party will not or cannot perform.”); 17B C.J.S. Contracts
§ 716 (2022) (“A party anticipatorily repudiates a contract when
the party provides a positive and unequivocal manifestation that
the party will not perform when a duty to perform arises.”).
¶37 There are some circumstances, however, in which a party’s
conduct “is not sufficiently positive to amount to a repudiation”
6. Utah cases have sometimes linked the terms “anticipatory
breach” and “repudiation.” See, e.g., Upland Indus. Corp. v. Pacific
Gamble Robinson Co., 684 P.2d 638, 643 (Utah 1984) (referring to
“an anticipatory breach or repudiation of the lease agreement”);
Koulis v. Standard Oil Co. of Cal., 746 P.2d 1182, 1186 (Utah Ct. App.
1987) (“A cause of action does not accrue upon an anticipatory
breach or repudiation of a contract.”). Other jurisdictions have
done the same. See, e.g., Combs v. International Ins. Co., 354 F.3d 568,
599 n.16 (6th Cir. 2004) (“The phrases ‘anticipatory breach,’
‘anticipatory repudiation,’ and ‘renunciation’ are used
interchangeably.”); see generally Breach of Contract, Black’s Law
Dictionary (11th ed. 2019) (the term “anticipatory breach” is
“[a]lso termed breach by anticipatory repudiation; breach by
renunciation; constructive breach”); 23 Richard A. Lord, Williston on
Contracts § 63:32 (4th ed. 2021) (using “anticipatory repudiation”
and “anticipatory breach” synonymously). And because the
parties here have not asserted that there is any difference between
“anticipatory breach” and “repudiation,” either generally or in
the context of this case, we use the terms interchangeably as well.
20210220-CA 16 2022 UT App 86Jessup v. Five Star Franchising
under the usual standard, but it is enough to give the other party
“reasonable grounds” to believe that it will breach by non-
performance. See Restatement (Second) of Contracts § 251 cmt. c.
In such circumstances, a different branch of the repudiation
doctrine comes into play. The Restatement formulates the rule
applicable in these situations as follows:
(1) Where reasonable grounds arise to believe that
the obligor will commit a breach by non-
performance that would of itself give the obligee
a claim for damages for total breach . . . , the
obligee may demand adequate assurance of due
performance and may, if reasonable, suspend
any performance for which he has not already
received the agreed exchange until he receives
such assurance.
(2) The obligee may treat as a repudiation the
obligor’s failure to provide within a reasonable
time such assurance of due performance as is
adequate in the circumstances of the particular
case.
Id. § 251. Utah appellate courts have adopted and applied this
branch of the repudiation doctrine. See, e.g., Bitzes v. Sunset Oaks,
Inc., 649 P.2d 66, 70 (Utah 1982); Smargon, 2012 UT App 305, ¶ 18.
Thus, under Utah law, if one party has reasonable grounds to
believe that the other party does not intend to perform its
obligations, and asks for adequate assurance of performance but
receives no (or an inadequate) response, the opposing party will
be deemed to have repudiated the contract.
¶38 The district court’s conclusion that Jessup and Kristy had,
as a matter of law, repudiated the lease was grounded in this
branch of the anticipatory repudiation doctrine. Thus, in
evaluating the propriety of the court’s order, we must examine
20210220-CA 17 2022 UT App 86Jessup v. Five Star Franchising
two questions: (1) whether Five Star had reasonable grounds to
believe that Jessup and Kristy intended to repudiate the lease and
(2) if so, whether Jessup and Kristy failed to give Five Star
adequate assurance that they intended to perform. We agree with
Defendants and the district court that, as a matter of law, Five Star
had reasonable grounds to seek adequate assurance. But we
disagree that, as a matter of law, Jessup and Kristy failed to
provide adequate assurance of their intent to perform. On that
second question, a reasonable factfinder could, on this record,
reach the opposite conclusion. Accordingly, summary judgment
on that question is inappropriate.
1
¶39 Defendants assert that—based on the 2018 email
exchange—Five Star had reasonable grounds to believe that
Jessup and Kristy did not intend to perform their obligations
under the 2015 lease. Jessup and Kristy respond by asserting that
their emails could be read in a completely different way, one that
does not betray any intent to repudiate the lease. We agree with
Jessup and Kristy that their reading of the emails is a reasonable
one, and that the email exchange is therefore ambiguous. But we
disagree with Jessup and Kristy about the effect of that
conclusion: in this specific context, the presence of ambiguity
means that, as a matter of law, Five Star had reasonable grounds
to seek adequate assurance.
¶40 We begin our analysis by reaching the rather unremarkable
conclusion that both parties’ interpretations of the 2018 email
exchange are reasonable. Defendants view those emails as clearly
indicative of an intent on the part of Jessup and Kristy to
repudiate the lease. The district court agreed, noting that Jessup
and Kristy “denied ever signing” the Base Lease, “indicated that
their failure to do so was intentional,” “expressed their belief that
they [were] not bound by it, and proposed a new agreement.”
Even Jessup and Kristy’s own lawyer acknowledged, at oral
20210220-CA 18 2022 UT App 86Jessup v. Five Star Franchising
argument before the district court, that the 2018 emails were “not
the most clear” and that, in some ways, they “sound . . . like we’re
saying we don’t agree to the lease.” And on appeal, Jessup and
Kristy do not seriously argue that Defendants’ interpretation of
the emails is unreasonable.
¶41 They do, however, assert that the emails can reasonably be
read in a different way. They acknowledge that they never signed
the Base Lease, because they thought that it contained too many
“errors and inconsistencies.” But they point out that they did sign
Addendum 2, which by its terms “incorporated” all the terms of
the Base Lease that were not modified by Addendum 2’s
additional language; indeed, Addendum 2 specifically provided
that “[a]ll other terms of the Lease not modified shall remain the
same.” In their view, their signatures on Addendum 2—which
they never attempted to disavow—indicated that there was a
binding agreement between the parties, one comprised of the Base
Lease plus any alterations made by Addendum 2. They thus assert
that their unwillingness to sign the Base Lease should not be
viewed as a disavowal of the terms of the lease, or as an indication
that they did not intend to comply with its terms going forward.
We agree with Jessup and Kristy that their emails can reasonably
be read this way. And we agree that the existence of two
reasonable interpretations means that their 2018 email responses
are ambiguous. See Mind & Motion Utah Invs., LLC v. Celtic Bank
Corp., 2016 UT 6, ¶ 24, 367 P.3d 994 (stating that ambiguity exists
where “terms are capable of more than one reasonable
interpretation because of uncertain meanings of terms, missing
terms, or other facial deficiencies” (quotation simplified)).
¶42 In many situations, a court’s legal determination that
ambiguity exists within a text leads to the conclusion that
summary judgment cannot be granted, and that a factfinder will
need to weigh in on the matter. See, e.g., Ocean 18 LLC v. Overage
Refund Specialists LLC (In re Excess Proceeds from Foreclosure of 1107
Snowberry St.), 2020 UT App 54, ¶ 29, 474 P.3d 481 (“If a court
20210220-CA 19 2022 UT App 86Jessup v. Five Star Franchising
determines, as a legal matter, that a contract is facially ambiguous,
then a question of fact exists as to the parties’ intentions.”). But in
other specific areas of the law—those where clarity between
parties is itself at issue—the presence of ambiguity cuts the other
way, and suggests that a party may be entitled to judgment as a
matter of law. See, e.g., Glenn v. Reese, 2009 UT 80, ¶ 19, 225 P.3d
185 (“Ambiguous conduct and language intended to signal
contract termination will be deemed not to have terminated the
contract.” (quotation simplified)); Geisdorf v. Doughty, 972 P.2d 67,
70 (Utah 1998) (stating that when an “optionee decides to exercise
his option [to renew a contract] he must act unconditionally and
precisely according to the terms of the option,” and that actions
constituting mere substantial compliance—as opposed to strict
compliance—will not suffice (quotation simplified)); Error v.
Benaroya, 2022 UT App 31, ¶ 8, 508 P.3d 135 (stating that, “when
the terms of the contract are ambiguous about the application of
compound interest, such ambiguity . . . necessarily means, as a
matter of law, that the contract provides for only simple interest”).
¶43 The “reasonable grounds” inquiry in this case presents one
of those instances. Regardless of whether Jessup and Kristy’s
interpretation of the 2018 emails is a reasonable one, Five Star
had—by definition—“reasonable grounds” to seek adequate
assurance so long as its interpretation of the 2018 emails was a
reasonable one. See Restatement (Second) of Contracts § 251(1).
And as noted, Five Star’s interpretation is reasonable. After
reviewing those emails, Five Star had reasonable grounds to
believe that Jessup and Kristy were repudiating the terms of the
lease. The fact that it was not certain of this, and that there existed
another possible interpretation of the emails, does nothing to take
away from the reasonableness of Five Star’s belief.
¶44 For these reasons, the district court correctly concluded
that, as a matter of law and undisputed fact, Five Star had
reasonable grounds to believe that Jessup and Kristy intended
to repudiate the lease, and therefore had the right to seek
20210220-CA 20 2022 UT App 86Jessup v. Five Star Franchising
adequate assurance from Jessup and Kristy that they intended to
perform. On remand, this issue should be considered settled, and
should not be the subject of any further litigation, at trial or
otherwise.
2
¶45 Because we have concluded that Five Star did indeed
have reasonable grounds to believe that Jessup and Kristy
intended to repudiate the lease, we must address the other
question: whether Jessup and Kristy provided Five Star with
adequate assurance that they intended to perform. On this issue,
the ambiguity in Jessup and Kristy’s email responses cuts the
other way, and we agree with Jessup and Kristy that genuine
issues of material fact preclude the entry of summary judgment in
Defendants’ favor.
¶46 Jessup and Kristy assert that their May 2018 emails—in
particular the one they sent at 4:09 p.m.—provided adequate
assurance to Five Star that they intended to perform under the
terms of the lease, as modified by Addendum 2. At least, they
assert, a reasonable jury could interpret their emails that way.
And they contend that their silence following Jones’s final email
in the chain should not be held against them, at least not if their
4:09 email is interpreted in the way they urge.7 After all, they
claim they had already provided adequate assurance in the earlier
emails, and were therefore under no obligation to provide the
same assurance a second time.
¶47 For the reasons just discussed, we agree with Jessup and
Kristy that a reasonable factfinder could read their emails in the
7. For purposes of our analysis, we do not consider any of the
evidence Jessup and Kristy presented for the first time in
connection with the Motion for Relief, and we presume that they
did indeed give no response to Jones’s last email.
20210220-CA 21 2022 UT App 86Jessup v. Five Star Franchising
manner they advance. And that alone is sufficient to defeat
Defendants’ summary judgment motion on this point. 8
¶48 In this context—as opposed to the context in which we
examine whether Five Star had reasonable grounds to seek
assurance—the existence of ambiguity applies in its traditional
sense, and cuts against the entry of summary judgment. See, e.g.,
Ocean 18 LLC, 2020 UT App 54, ¶ 29 (“If a court determines, as a
legal matter, that a contract is facially ambiguous, then a question
of fact exists as to the parties’ intentions.”). It will be up to a
factfinder to interpret the 2018 emails and determine whether
those emails do, or do not, constitute adequate assurance on the
part of Jessup and Kristy that they intended to perform under the
lease. That factfinder may well conclude that Jessup and Kristy
failed to provide adequate assurance. But a reasonable factfinder,
on the summary judgment record presented to the district court,
could also reach the opposite conclusion. And on that basis, we
reverse the district court’s entry of summary judgment on the
8. Jessup and Kristy also point to the parties’ “continued
performance” under the lease, from 2018 through 2020, as
additional support for their contention that they provided
adequate assurance. But this does not factor into our analysis.
Evidence of continued lease payments could be interpreted to
support either Defendants’ theory—that the parties were
operating on a month-to-month tenancy—or Jessup and Kristy’s
assertion that they did not repudiate the lease. The only other
specific item of “continued performance” contained in the
summary judgment record is the sublease, but the fact that Five
Star—in the absence of any new lease agreement and during a
time period in which it apparently believed it was making
“interim” payments—agreed to sublease the premises to another
entity on the same or similar terms as those set out in the 2015
lease does not tell us very much about whether the underlying
lease was still effective.
20210220-CA 22 2022 UT App 86Jessup v. Five Star Franchising
repudiation issue, and remand for further proceedings with
regard to the “adequate assurance” question.
II
¶49 Given our conclusion that the district court incorrectly
entered summary judgment in Defendants’ favor on the
repudiation issue, we proceed to examine Defendants’ request
that we affirm the court’s summary judgment order on an
alternative ground: that Jessup and Kristy did not own the
Property in their individual capacities, and therefore could not
have validly leased it to Five Star. For two reasons, we decline
Defendants’ invitation to affirm on this alternative ground. First,
we conclude that the record presented to us is not sufficiently
clear to support affirmance on the proffered alternative ground.
And second, we take note of the district court’s inclination—
stated in its summary judgment order—that, if necessary, it
would have been inclined to give Jessup and Kristy an
opportunity to bring the Trusts into the litigation as the real
parties in interest. This second issue has not been sufficiently
explored in the briefing on appeal, and provides an additional
basis for our discomfort with Defendants’ request for affirmance
on this alternative ground.
A
¶50 “A trust is a form of ownership in which the legal title to
property is vested in a trustee, who has equitable duties to hold
and manage it for the benefit of the beneficiaries.” Continental
Bank & Trust Co. v. Country Club Mobile Estates, Ltd., 632 P.2d 869,
872 (Utah 1981). A trustee therefore “has exclusive control of the
trust property, subject only to the limitations imposed by law or
the trust instrument.” Id. After a settlor creates a trust and conveys
property into that trust, “he is no longer the owner of the trust
property and has only such ability to deal with it as is expressly
reserved to him in the trust instrument.” Id.20210220-CA 23 2022 UT App 86Jessup v. Five Star Franchising
¶51 In Continental Bank, a property owner leased his property
to a tenant for a fifty-year term, and gave that tenant an option to
purchase the property at any time during the first eleven years of
the lease’s term. See id. at 870–71. In the ninth year of the lease
term, the owner, as settlor, “conveyed the subject property to the
trustee in trust for various members of his family, signing a trust
agreement and conveying the property to the trustee by a
warranty deed.” Id. at 871. The trust was revocable, with the
settlor reserving for himself “the right to revoke the trust.” Id.
More than two years later, as the eleven-year option period was
about to expire, the settlor—without consulting or obtaining the
approval of the trustee—“signed an instrument purporting to
grant the [tenant] another five-year extension of its option.” Id.
After learning what the settlor had done, the trustee brought suit
against the tenant “to quiet title” and “to determine the validity
of the attempted extension of the option.” Id. The district court
ruled in favor of the tenant (and the settlor) and declared the
option extension valid. Id.
¶52 On appeal, our supreme court reversed. Id. at 872. The
court examined the language of the trust instrument, in which the
settlor reserved to himself “the power to direct the trustee, in
writing, . . . to retain, sell, exchange or lease any property of the
trust estate.” Id. at 871 (quotation simplified). But the court
determined that, on the facts before it, the settlor had acted in
contravention of those broadly stated powers because he had
acted unilaterally and had not actually “direct[ed]” the trustee to
do anything. Id. (“We are unable to find an exercise of the ‘power
to direct the trustee, in writing,’ in an act that was not intended to
communicate and did not in fact communicate anything to the
trustee.”). As the court saw it, this was “a case where a settlor
created a trust and then chose to ignore it.” Id. at 872. The court
acknowledged the settlor’s broad reserved powers, noting that
the settlor “could have modified or revoked the trust, or directed
the trustee in writing to sell or lease the trust property,” but
20210220-CA 24 2022 UT App 86Jessup v. Five Star Franchising
observed that the settlor “took neither of these actions.” Id. The
court also acknowledged the reality that the settlor had originally
owned the property and that he retained broad powers related to
it, but noted that “[e]ven a revocable trust clothes beneficiaries,
for the duration of the trust, with a legally enforceable right to
insist that the terms of the trust be adhered to,” and concluded
that, if it blessed the settlor’s actions, it “would prejudice the
interests of the beneficiaries, blur some fundamental principles of
trust law, and cast doubt upon whether it is the trustee or the
settlor who is empowered to manage and dispose of the trust
property in a valid revocable trust.” Id. On that basis, the court
reversed the ruling of the district court and declared the settlor’s
unauthorized actions invalid. Id.¶53 In Continental Bank, the settlor and the trustee were not the
same individual. Id. at 871. But even where the settlor and the
trustee are the same person, some courts have held that trust
formalities must be observed. See, e.g., Shaffer v. Tewes, 466 F.
Supp. 3d 980, 990 (N.D. Iowa 2020); Nuell, Inc. v. Marsillet, 164
N.E.3d 768, 775 (Ind. Ct. App. 2021). 9 In Shaffer, for instance, the
court construed essentially the same trust language as was at issue
in Continental Bank: language by which the settlor reserved for
herself the power “[t]o direct in writing the retention, purchase,
sale or transfer of property of the trust.” See 466 F. Supp. 3d at
989–90 (quotation simplified). In that case, the settlor purported
to lease the property to a tenant, but did so in her individual
capacity. Id. at 985. There was no evidence in the case that the
settlor, in her individual capacity, had ever instructed herself, in
9. Courts in some other jurisdictions have held otherwise. See, e.g.,
Galdjie v. Darwish, 7 Cal. Rptr. 3d 178, 192 (Ct. App. 2003). But we
find the analysis of these cases less persuasive than the analysis
set forth in Shaffer, as well as not in keeping with our supreme
court’s analysis in Continental Bank, which emphasized the
importance of adhering to the terms of the trust instrument.
20210220-CA 25 2022 UT App 86Jessup v. Five Star Franchising
her capacity as trustee, to convey or lease the property. Id. at 991.
The court acknowledged that, “where the settlor who retains the
right to transfer property is also the trustee,” the distinction
between individual and trustee “appears frivolous and it may
seem unnecessary to require [the settlor] to direct herself in
writing about whether to convey the property.” Id. at 990. But the
court nevertheless held the settlor’s actions invalid, noting that
“trust formalities are important,” and that “[i]n exchange for
receiving the benefits of a trust, a settlor is expected to follow
specific procedures that are designed to define and distinguish
property and rights.” Id.
¶54 From these cases, we distill the legal principle that a settlor
in possession of powers to direct the trustee to sell (or otherwise
encumber or convey) trust property may not act unilaterally, in
an individual capacity, but must instead actually direct the trustee
to do so, even if the settlor and the trustee are the same person. 10
It may be that, at some point in the future, this legal principle will
10. We therefore disagree with the district court’s conclusion that,
simply because the Trusts were revocable, Jessup and Kristy, as
settlors, could act unilaterally in their individual capacities to
remove property from the Trusts. The extent of their authority
will depend on the precise language of the trust instruments, and
not just on the status of the Trusts as revocable. In this context, we
find the district court’s reliance on Pandy v. Independent Bank, 2016
CO 49, 372 P.3d 1047, misplaced. In that case, the court held that
creditors of the settlor could access assets placed by the settlor in
a revocable trust. Id. ¶¶ 18–21. But the fact that a settlor’s creditors
can access property held in a revocable trust—a fact established
in Utah by statute, see Utah Code Ann. § 75-7-505(1) (LexisNexis
Supp. 2021) (“During the lifetime of the settlor, the property of a
revocable trust is subject to the claims of the settlor’s
creditors.”)—does not tell us very much about the scope of a
settlor’s powers under specific trust documents.
20210220-CA 26 2022 UT App 86Jessup v. Five Star Franchising
be of some use to Defendants in defending against Jessup and
Kristy’s lawsuit. But on the record before us, we are unable to
affirm the district court’s summary judgment order on the basis
of this legal principle.
¶55 As an initial matter, the trust documents themselves are
not in the record, and we therefore do not know whether Jessup
and Kristy enjoyed the same, broader, or narrower powers as the
settlors did in Continental Bank and Shaffer. Defendants assert that
it was Jessup and Kristy’s responsibility to put the trust
documents in the record, and that their absence should be laid at
the feet of Jessup and Kristy and not at Defendants’. But
Defendants ask us to affirm the district court’s summary
judgment order on an alternative ground, something we are able
to do only when the record clearly supports such a result. See
Olguin v. Anderson, 2019 UT 73, ¶ 20, 456 P.3d 760 (stating that “it
is within our discretion to affirm a judgment on an alternative
ground if it is apparent in the record,” and that “for a legal theory
to be apparent on the record, the record must contain sufficient
and uncontroverted evidence supporting the ground or theory to
place a person of ordinary intelligence on notice that the
prevailing party may rely thereon on appeal” (quotation
simplified)). 11 In our view, it is not “apparent in the record” before
us that Jessup and Kristy acted beyond the scope of their authority
as settlors under the Trusts.
¶56 Moreover, the sequence of events is different in this case
than it was in Continental Bank and Shaffer, and that might matter
here, depending on facts not apparent in the record before us. In
11. Even when the record is clear enough to allow us to affirm on
an alternative ground, our decision to do so remains entirely
discretionary. See Croft v. Morgan County, 2021 UT 46, ¶ 43, 496
P.3d 83 (stating that an appellate court’s decision to affirm on an
alternate ground “is wholly discretionary, even if an alternate
ground presents a question purely of law”).
20210220-CA 27 2022 UT App 86Jessup v. Five Star Franchising
both of those cases, the property had been conveyed into the
relevant trust before the allegedly ultra vires action on the part of
the settlor. See Shaffer, 466 F. Supp. 3d at 984–85; Continental Bank,
632 P.2d at 870–71. But here, by contrast, Jessup and Kristy
entered into the lease several months before the Property was
apparently conveyed to the Trusts. Ordinarily, a tenant does not
lose its rights under a lease simply because the landlord conveyed
the property to someone else during the lease term; rather, the
new owner typically takes the property subject to the leasehold
interest of the tenant. See 52 C.J.S. Landlord & Tenant § 525 (2022)
(stating that “[t]he owner of leased property may sell or assign it
during the continuance of the lease,” and that in such situations
“[t]he vendee becomes the landlord by operation of law, and the
tenant becomes a tenant of the grantee of the reversion”); see also
Otey v. Wiley, 519 S.W.3d 515, 519 (Mo. Ct. App. 2017) (“The legal
premise that a successor in interest is bound by the terms of an
existing lease is not new.”). Thus, if Jessup and Kristy conveyed
the Property into the Trusts after the 2015 lease was already in
effect, that conveyance would likely have no effect on the validity
of the lease. And we know, from the record before us, that the
lease was entered into no later than October 12, 2015, at least
several weeks before the record indicates any involvement on the
part of the Trusts.
¶57 Indeed, the lease itself indicates that it would be valid only
“if Holden Jessup and Mike Kristy (or their assigns) purchase[d]
the [Property] before January 1, 2016.” If Jessup and Kristy, in
their individual capacities, completed that purchase, that
requirement would appear to be met, even if Jessup and Kristy
then immediately conveyed the Property to the Trusts. Stated
another way, if Jessup and Kristy owned the Property in their
personal capacities even momentarily, they would have a good
argument that the lease provision was satisfied and the lease was
therefore valid, and they would then be free—under the general
principles expressed above—to convey the Property to the Trusts
20210220-CA 28 2022 UT App 86Jessup v. Five Star Franchising
without fear of invalidating the lease. And as already noted, very
few of the documents associated with the closing of the real estate
transaction are in the record. To be sure, the warranty deed—
conveying the Property directly from Canuck to the Trusts—
indicates that the Property was never in the possession of Jessup
and Kristy personally, even momentarily. But both parties, in
describing the transaction, indicate that Jessup and Kristy
“purchased the Property” in their individual capacities and then
“asked that the [P]roperty be titled” in the Trusts. Taking that
description at face value, we find it difficult to conclude that
grounds for affirmance on an alternative ground are apparent in
the record submitted to us on appeal.
B
¶58 Second, even aside from the gaps in the record submitted
to us, we find an additional reason for caution in the district
court’s comments, expressed in its summary judgment order and
referencing rule 17(a) of the Utah Rules of Civil Procedure, that
even if there existed some standing-related problem with Jessup
and Kristy suing Defendants in their individual capacities rather
than as trustees of the Trusts, the court would be inclined to grant
them “a reasonable time to comply with the requirement that the
action be prosecuted in the name of the real party in interest.” The
parties have not sufficiently briefed the question of whether the
issues Defendants identify may be cured by resort to rule 17(a);
indeed, Five Star—the party asking us to affirm on an alternative
basis—does not mention the issue at all in its brief. And we
express no opinion on the question. But without further briefing
and argument around these issues, we are not comfortable
affirming the district court’s summary judgment order on the
alternative ground advanced by Defendants.
¶59 Thus, for both of these reasons, we decline Defendants’
invitation to affirm the district court’s summary judgment order
20210220-CA 29 2022 UT App 86Jessup v. Five Star Franchising
on alternative grounds. 12 Defendants are, of course, free to explore
these issues further in additional proceedings on remand.
CONCLUSION
¶60 Five Star had reasonable grounds, as a matter of law, to
believe that Jessup and Kristy intended to repudiate the 2015
lease. But factual questions remain as to whether Jessup and
Kristy gave Five Star adequate assurance that they intended to
perform under the lease. For that reason, the district court erred
in concluding, as a matter of law, that Jessup and Kristy
repudiated the lease. And we decline Defendants’ invitation to
affirm the district court’s summary judgment ruling on
alternative grounds. Accordingly, we reverse the district court’s
grant of summary judgment and remand this case for further
proceedings consistent with this opinion.
12. In addition, neither party made any effort, either before the
district court or here on appeal, to discuss the “general rule” that
“a tenant is estopped to deny, challenge, or dispute the landlord’s
title” to the leased property. See 49 Am. Jur. 2d Landlord & Tenant
§ 733 (2022) (quotation simplified); see also, e.g., Air-Ag, Inc. v.
F & H Santa Fe Rail, Inc., 22 S.W.3d 596, 598 (Tex. App. 2000)
(discussing the “general, well-established rule . . . that a tenant
cannot dispute its landlord’s title while in possession under that
landlord,” and stating that “a tenant is estopped to deny its
landlord’s title . . . , and it is immaterial whether the landlord had
title at the time the lease was entered”). We offer no opinion on
whether this general rule has any application here, but our
awareness of its existence provides us a third reason for
discomfort with Defendants’ request for affirmance on this
alternative ground.
20210220-CA 30 2022 UT App 86