Buehner Block Co. v. UWC Associates
| Decision Date | 21 March 1988 |
| Docket Number | No. 19608,19608 |
| Citation | 752 P.2d 892 |
| Court | Utah Supreme Court |
| Parties | BUEHNER BLOCK COMPANY, a Utah corporation, Plaintiff, v. UWC ASSOCIATES, a Utah limited partnership, Utah Women's Clinic, Inc., Wayne R. Newton, Grant P. Bagley, Stangl Money Plaza II, a limited partnership, and CS & G Masonry, Defendants. UWC ASSOCIATES, a Utah limited partnership, Utah Women's Clinic, Inc., a Utah corporation, as general partner of and on behalf of UWC Associates, Grant P. Bagley, Wayne R. Newton, and F.C. Stangl III, Third-Party Plaintiffs and Appellants, v. HOME SAVINGS AND LOAN, Third-Party Defendant and Respondent. |
Thomas A. Duffin, Salt Lake City, for Buehner Block Co.
Verden E. Bettilyon, John T. Kesler, Salt Lake City, for Home Sav. and Loan.
Buehner Block Co. (Buehner) initiated this action against defendants. Its complaint alleged, in pertinent part, that Buehner had furnished defendant CS & G Masonry, a subcontractor, materials to be used in constructing a building owned by the remaining defendants, that Buehner had not been paid for the materials, and that because the defendant owners had not required that a construction bond be obtained pursuant to Utah Code Ann. § 14-2-1 (Supp.1983) (repealed 1987), those defendants were liable to Buehner for the value of the furnished materials. 1 Following a June 1983 hearing, the trial court entered an order concluding that UWC Associates (UWC) was liable to Buehner for the materials, together with interest and costs. The propriety of that order is not at issue.
Appellants impleaded Home Savings and Loan (Home), the institution which had financed the construction of their building, seeking indemnification from Home for the judgment in favor of Buehner. At their September 1983 bench trial, appellants advanced three theories of recovery: first, that Home breached its contract with appellants by failing to require adequate construction bonding for the project; second, that Home breached its contract with appellants by following improper disbursement methods; and third, that Home negligently disbursed construction loan proceeds.
Appellants do not challenge the trial court's adverse rulings on either their tort or their "disbursement methods" contract theories. They only challenge the court's adverse ruling on their first contract theory, and Home cross-appeals the court's ruling denying its claim for attorney fees.
The following findings of fact and conclusions of law are relevant to the issues on appeal.
1. On or about June 1, 1980, F.C. Stangl III ("Stangl") and Grant P. Bagley ("Bagley") entered into a joint venture for the construction of a building on the Southeast corner of Fifth South and Fourth East, Salt Lake City, Utah (the "Building").
2. In furtherance of the said joint venture, a partnership known as UWC Associates ("UWC") was organized with Utah Women's Clinic, Inc., ("Clinic") as general partner and Clinic and Stangl as limited partners. The ownership of the partnership was as follows:
75% Clinic
Stangl gave a 10 percent interest in the partnership to Wayne R. Newton ("Newton") who also became a limited partner.
3. Prior to and during the construction of the Building, Stangl and Newton each undertook certain management duties and responsibilities and joined in the making of business decisions as partners of UWC and signed documents on behalf of UWC.
4. On or about June 13, 1980, UWC entered into a contract with Stangl, dba Stangl Construction Company ..., whereby the latter agreed to construct the shell of the Building to be owned by UWC.
5. On June 4, 1983, Home Savings and Loan ["Home"] gave a [Construction 6. On or about June 27, 1980, the loan transaction was closed and the following documents were executed:
Commitment Letter] ... to UWC, Bagley, Newton and Stangl (collectively sometimes hereinafter referred to as "Borrowers") for a construction loan in the amount of $750,000.00 (the "Loan") for the construction of the [B]uilding.
(a) Construction Loan Agreement....
(b) Trust Deed Note....
(c) Trust Deed....
(All of the above documents including the [Construction Commitment Letter] are sometimes hereinafter referred to as the "Loan Documents"). The Loan Documents were also executed by Bagley, Stangl and Newton as partners of UWC. These documents were also signed individually by each of the said parties.
7. The [Construction Commitment Letter] at paragraph 9 states as follows:
"Lender shall require adequate insurance and construction and other bonds be carried by the builder/developer as deemed necessary and approved by Lender, which matters shall be defined in a separate agreement."
At the request of UWC and Stangl, the bond requirement was waived by Home....
....
CONCLUSIONS OF LAW
....
5. The Borrowers waived the bond requirement contained in paragraph 9 of the Construction Commitment [Letter].
6. Stangl, in requesting that the bond be waived, acted with real or apparent authority on behalf of the owner, UWC.
7. That Stangl and Newton became general partners of UWC since their action as partners went beyond the limited scope of a limited partner.
8. Third-Party Plaintiffs are estopped to assert the waiver of the bond requirement by Home ... as a breach of Home['s] ... responsibilities under the contract.
9. Defendant, Home ... are [sic] not entitled to an award of attorney fees.
Appellants challenge the sufficiency of the evidence to support the trial court's ruling that they waived or were estopped from asserting the "bond requirement" in paragraph 9. Home argues for the first time on appeal that paragraph 9 never imposed a contractual duty on itself to require that adequate bonds be furnished. 2 Home claims that the provision was included in the construction commitment letter to protect Home by allowing it to impose a bond requirement if it saw fit to do so.
Appellants rely upon Bangerter v. Poulton 3 in support of their argument that Home is precluded from claiming for the first time on appeal that paragraph 9 did not impose a bonding requirement on the bank. 4 But application of this principle in no sense forecloses application of all other rules of appellate review. 5 One such principle is that we may affirm trial court decisions on any proper ground(s), despite the trial court's having assigned another reason for its ruling. 6 In this case, we view the trial court as having erred in construing the parties' agreement. However, as explained below, we conclude that paragraph 9 did not impose a duty on Home, and therefore we affirm the trial court's judgment in favor of Home.
The interpretation of a written contract may be a question of law determined by the words in the agreement. 7 In this regard, a cardinal rule in construing such a contract is to give effect to the intentions of the parties, and if possible, these intentions should be gleaned from an examination of the text of the contract itself. 8 Additionally, it is axiomatic that a contract should be interpreted so as to harmonize all of its provisions and all of its terms, and all of its terms should be given effect if it is possible to do so. 9 If a trial court interprets a contract as a matter of law, as was obviously the case here, we accord its construction no particular weight and review its actions under a correction-of-error standard. 10
In the instant case, the trial court did not indicate that it found the contract was not integrated and did not find it ambiguous; there are no findings of fact respecting the intentions of the parties based upon extrinsic evidence. And at one point during trial, the court stated that the construction commitment letter spoke for itself. Moreover, on appeal the parties have not argued that the contract was not integrated. Nor can we say that paragraph 9 is ambiguous. Contract terms are not necessarily ambiguous simply because one party seeks to endow them with a different meaning than that relied upon by the drafter. 11
An examination of paragraph 9 in the construction commitment letter convinces us that the provision does not impose the duty on Home alleged by appellants. If we were to agree that the phrase "shall require" mandated that Home was required to insure for bonding, then the phrase "as deemed necessary and approved by lender, which matters shall be defined in a separate agreement" would be rendered a nullity. Moreover, contrary to appellants' position at argument, the phrase "as deemed necessary and approved by lender" cannot logically be read as modifying only the terms "other bonds."
In view of our conclusion, appellants' reliance on Skousen v. Smith 12 and General Mills, Inc. v. Cragun 13 to support their argument that the construction commitment letter must be construed more strongly against its drafter, Home, is misplaced in this case. 14 As we stated in Auto Lease Co. v. Central Mutual Insurance Co.: 15
[T]hat rule has no application unless there is some genuine ambiguity or uncertainty in the language upon which reasonable minds may differ as to the meaning. That requirement is not satisfied because a party may get a different meaning by placing a forced or strained construction on it in accordance with his interest. The test to be applied is: would the meaning be plain to a person of ordinary intelligence and understanding, viewing the matter fairly and reasonably, in accordance with the usual and natural meaning of the words, and in the light of existing circumstances, including the purpose of the policy. If so, the special rule of construction is obviously unnecessary. 16
The other relevant arguments advanced in favor of reversal do not undermine our decision. By relying upon parol evidence to support their claim that paragraph 9 contains a bonding requirement, appell...
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