Hansen & Mecham Invs. LLC v. Hansen
| Decision Date | 03 February 2022 |
| Docket Number | 20191059-CA |
| Citation | 505 P.3d 1152 |
| Parties | HANSEN & MECHAM INVESTMENTS LLC, MA Squared LLC, and Patrick Henry & Associates LLC, Appellees, v. Brian HANSEN, Appellant. |
| Court | Utah Court of Appeals |
Gregory N. Skabelund, Attorney for Appellant
Joseph Pia, Salt Lake City, Attorney for Appellees
Opinion
¶1 This case began with several hundred thousand dollars in allegedly unpaid loans, and it has since spawned over a decade of litigation. As this litigation has proceeded, the district court has issued several rulings granting partial summary judgment to the plaintiffs regarding various portions of the case.
¶2 In this appeal, defendant Brian Hansen challenges the most recent summary judgment ruling. There, the court first granted the plaintiffs’ request for summary judgment on a cause of action for breach of a guaranty. But in his opposition to that motion, Hansen had filed a sworn Declaration that created a genuine dispute of fact as to whether the plaintiffs were entitled to relief on this cause of action. We accordingly reverse the district court's decision to grant summary judgment on it. In that same ruling, the district court also granted summary judgment in the plaintiffs’ favor on several other causes of action. But this ruling was also improper—this time because the plaintiffs had not actually requested summary judgment on those causes of action in their motion.
¶3 For the reasons set forth below, we reverse the district court's decisions.
¶4 In 2009, Brian Hansen joined with James and Dwayne Horsley (the Horsleys) to finance a loan to Teresa Collo. To assist with their own financing efforts, the Horsleys engaged three investment groups: Hansen & Mecham Investments LLC; MA Squared LLC; and Patrick Henry & Associates LLC (collectively, the Investors). The Horsleys received $300,000 from the Investors in exchange for three promissory notes, one for each Investor (the Investor Notes). Each Investor Note promised repayment of Investor funds by October 20, 2009, and each also contained an assignment clause in which the Horsleys "agree[d] to assign all Rights pertaining to [the Investors’] portion of said monies, as per agreements with Brian Hansen and Teresa [Collo]" to the Investors. The Horsleys then used the Investors’ money and $100,000 of their own money to loan $400,000 to Collo.
¶5 Hansen was not a party to the loan agreement between the Horsleys and Collo, but he did provide the Horsleys with a conditional guaranty agreement (the Conditional Guaranty). Under the Conditional Guaranty, Hansen promised that if Collo did "not repay the principal amount of $400,000 to the Horsleys on or before October 12, 2009," Hansen would "pay said amount to the Horsleys in full." The Conditional Guaranty, however, contained a clause—commonly referred to in the litigation below and here as "the Condition Precedent"—under which the Conditional Guaranty would only take effect if Hansen "close[d] his pending financing transaction with i-Finance (or similar financial institution) for approximately $100 million."
¶6 The repayment deadlines came and went, and the Horsleys were never paid by either Collo or Hansen. As a result, neither were the Investors.
¶7 Relying on the assignment clauses in the Investor Notes, the Investors filed suit in 2010 against the Horsleys, Collo, and Hansen. Their complaint pleaded seven causes of action, and it specified which cause of action was being pleaded against which defendant or group of defendants.
¶8 The first cause of action was for breach of contract. It only named the Horsleys as defendants.
¶9 As for Hansen, the Investors asserted in their "General Allegations" section that Hansen "failed to pay the Horsley Defendants the $400,000 under the Collo/Horsley Note pursuant to [Hansen's] Guaranty." But the Investors only named Hansen as a defendant in the fourth, fifth, and seventh causes of action, which were for fraudulent and negligent misrepresentation, promissory estoppel and detrimental reliance, and breach of the covenant of good faith and fair dealing, respectively.
¶10 In his answer, Hansen denied that he had "any obligation to repay any amount to" the Investors or that they were entitled to any benefits from his Conditional Guaranty with the Horsleys. Hansen also defended himself against the three causes of action that had been pleaded against him.
¶11 Several years of litigation ensued, during which the Investors filed several motions for summary judgment against the Horsleys, Collo, and Hansen. Four of these motions are relevant to this appeal, and we discuss each in turn below.
¶12 In August 2010, the Investors filed a motion for summary judgment against the Horsleys. This motion alleged that the Horsleys had "defaulted on several promissory notes/loans with the [Investors]," that "[t]he remaining principal amount ow[ed] under these notes [was] $300,000," and that "the notes allow[ed] recovery of additional costs and fees."
¶13 The Horsleys did not respond, and the court later granted summary judgment in the Investors’ favor. In its decision, the district court awarded the Investors "$300,000 ... together with any interest, costs, and attorneys’ fees."
¶14 In January 2011, the Investors filed a motion for summary judgment against both Collo and Hansen.
¶15 With respect to Hansen, this motion did not ask for summary judgment on any of the three causes of action that the Investors had pleaded against him in their complaint. Instead, the 2011 Motion asked the court to grant "partial summary judgment against" Hansen "for the following additional claim[ ] asserted in their Complaint: ... breach of guaranty against Defendant Brian Hansen." The Investors argued that Hansen "personally guaranteed" payment on the "Collo/Horsley Note" through the Conditional Guaranty and that he had breached that obligation by "fail[ing] to pay the Horsleys."
¶16 In a written decision issued in May 2011, the district court noted that the 2011 Motion was requesting judgment against Hansen for "breach of guaranty," and it specifically "denied" that motion "[a]gainst Brian Hansen."
¶17 In 2011, the Investors entered into a stipulated agreement with the Horsleys that settled the Investors’ claims against them for almost $350,000. Collecting on this judgment proved difficult, however, and after years of additional litigation that ultimately included bankruptcy proceedings, the Investors were still left unpaid.
¶18 In 2018, the Investors turned their focus back to Hansen, attempting to collect on the judgment against the Horsleys from Hansen through the Conditional Guaranty.
¶19 As the Investors pursued Hansen in court for this debt, Hansen failed to timely respond to almost every filing the Investors made with the district court. Hansen also impeded their efforts to schedule his deposition—so much so that the district court eventually authorized $7,500 in sanctions against him. Hansen's deposition was finally held in February 2019.
¶20 In March 2019, the Investors filed a motion for summary judgment against Hansen. There, the Investors asked for summary judgment on the three causes of action that they had pleaded against him—which, again, were for fraudulent and negligent misrepresentation, promissory estoppel and detrimental reliance, and breach of the covenant of good faith and fair dealing. The Investors supported this motion, in part, with eight pages of Hansen's deposition that they attached as an exhibit. These are the only pages of Hansen's deposition that are currently in the record.
¶21 After briefing and arguments, the court denied this motion.
¶22 At the hearing on the 2019 Motion, the court asked Investors’ counsel "why it's taken ... nine years to try to seek judgment against [Hansen]." During the ensuing discussion, the Investors’ counsel mentioned the 2011 Motion and told the court that it "actually ha[d] not been ruled on" and was "still pending."
¶23 This assertion was incorrect. As noted, the court in 2011 had specifically "denied" that motion, ruling that the Investors were not entitled to summary judgment on a "breach of guaranty" claim "[a]gainst Brian Hansen." But when counsel made this assertion during the 2019 hearing, neither the parties nor the court seemed aware of the earlier ruling. Indeed, when the court searched its database and found no indication that the 2011 Motion was pending, it assumed that this was a "question on [the court's] side of the equation." The court "apologize[d]" and suggested that the motion must have "slipped through the cracks and didn't get dealt with."2
¶24 The court accordingly instructed the Investors to resubmit the 2011 Motion. It also informed the parties that they could then file supplemental memoranda.
¶25 The Investors later resubmitted the 2011 Motion (the Resubmitted 2011 Motion). As noted, the original motion had sought summary judgment on a cause of action for "breach of guaranty against Defendant Brian Hansen." In their supplemental memorandum in support of the Resubmitted 2011 Motion, the Investors alleged a series of facts relating to the Conditional Guaranty. "Based on these additional facts and the facts and argument presented in Plaintiffs’ 2011 Motion," the Investors "request[ed] that the Court grant their 2011 Motion and enter judgment" against Hansen.
¶26 Hansen later filed an opposition memorandum, accompanied by a sworn Declaration. In his Declaration, Hansen averred that "[t]he i-Finance loan was never approved." In his memorandum, Hansen thus argued that he had no obligation to assume the Horsleys’ debt because the Conditional Guaranty had never been "activated."3
¶27 Hansen's opposition memorandum and accompanying Declaration were late, and the Investors moved to strike it as a result. But the court denied...
To continue reading
Request your trial