Cache County v. Beus

Decision Date25 November 2005
Docket NumberNo. 20030882-CA.,20030882-CA.
Citation128 P.3d 63,2005 UT App 204
PartiesCACHE COUNTY, a public politic, Plaintiff and Appellee, v. Leo R. BEUS, Annette Beus, Malcolm C. Young, Alice H. Young, Charles M. Young, John H. Young, William Horsley, and Susan Horsley ("The Beus Group"), Defendants and Appellants.
CourtUtah Court of Appeals

Brian G. Cannell and Lyle W. Hillyard, Hillyard Anderson & Olsen, Logan, for Appellants.

Andrew M. Morse and D. Jason Hawkins, Snow Christensen & Martineau, Salt Lake City, for Appellee.

Before BENCH, Associate P.J., DAVIS and McHUGH, JJ.

OPINION

DAVIS, Judge:

¶1 Defendants appeal the trial court's entry of judgment and award of attorney fees and court costs to Cache County. We affirm in part, reverse in part, and remand.

BACKGROUND

¶2 The facts of this case are set forth at length in our prior opinion, Cache County v. Beus, 1999 UT App 134, 978 P.2d 1043 (Cache County I), but we will briefly address those facts pertinent to this appeal. In 1994, the parties entered into a lease (the Lease), whereby Cache County leased certain property from Defendants at below-market rates for a period of ten years.1 In April 1995 Defendants attempted to terminate the Lease and demanded that Cache County vacate the property on the basis that Cache County had not paid rent and had not cured its default in a timely manner. Shortly thereafter, Cache County filed a lawsuit seeking declaratory judgment that the Lease remained in full force and effect.

¶3 The parties each filed motions for summary judgment. The trial court granted Cache County's motion for summary judgment, concluding that Cache County as a matter of law had substantially complied with the Lease and that equity principles prevented forfeiture. Defendants appealed and we reversed, holding that Cache County had breached the Lease. See Cache County I, 1999 UT App 134 at ¶ 22, 978 P.2d 1043. However, we remanded the case for a trial on the issue of substantial compliance, stating that genuine and material fact issues existed "concerning the adverse consequences of forfeiture suffered by Cache County in relation to the damages suffered by Beus" due to Cache County's default. Id. at ¶ 41.

¶4 Despite the fact that we ordered "a trial on the issue of substantial compliance," id., Defendants argued on remand that equity should not be considered in this case because Cache County's own "inadvertence and neglect" caused their failure to timely cure their default and, under Utah Coal & Lumber Restaurant, Inc. v. Outdoor Endeavors Unlimited, 2001 UT 100, 40 P.3d 581, "equity should not be applied in situations where the lessee's negligence, inadvertence, or neglect caused the failure," id. at ¶ 14. The trial court ruled that Utah Coal & Lumber applied to "option situations as opposed to bilateral contracts such as this Lease" and found in favor of Cache County, stating that "the adverse consequences of forfeiture suffered by [Cache] County overwhelmingly outweigh any damages suffered or allegedly suffered by [Defendants]" as a result of Cache County's default. In particular, the trial court enjoined Defendants from taking any action to remove Cache County, and determined that the Lease remained in full force and effect, that ejectment was not a proper remedy, and that Defendants were not entitled to any damages. Furthermore, the trial court awarded Cache County, as the "prevailing party," all of its attorney fees and court costs from the inception of the litigation. Defendants timely appealed.

ISSUES AND STANDARDS OF REVIEW

¶5 Defendants claim that the trial court erred when it: (1) purportedly admitted certain evidence in contravention of our instructions in Cache County I, (2) determined that Utah Coal & Lumber has no application to this case, (3) failed to rule that ejectment was an appropriate remedy, (4) made certain conclusions of law regarding Cache County's relocation costs, and (5) awarded Cache County all of its attorney fees and court costs from the inception of the litigation.2

¶6 "Whether the trial court properly complied, on remand, with our decision in [Cache County I] is a question of law which we review for correctness." Slattery v. Covey & Co., 909 P.2d 925, 927 (Utah Ct.App.1995). Similarly, determinations of law are reviewed for correctness, and we give no deference to the trial court's determinations. See State v. Pena, 869 P.2d 932, 936 (Utah 1994). A trial court's findings of fact, on the other hand, will not be set aside unless they are clearly erroneous. See Chen v. Stewart, 2004 UT 82,¶ 19, 100 P.3d 1177. In order to establish that findings of fact are clearly erroneous, "[a]n appellant must marshal the evidence in support of the findings and then demonstrate that despite this evidence, the trial court's findings are so lacking in support as to be against the clear weight of the evidence." Id. (alteration in original) (quotations and citation omitted). "If the evidence is inadequately marshaled, this court assumes that all findings are adequately supported by the evidence." Id. ¶7 "`Whether attorney fees are recoverable in an action is a question of law [that] we review for correctness.'" A.K. & R. Whipple Plumbing & Heating v. Guy, 2002 UT App 73,¶ 7, 47 P.3d 92 (alteration in original) (citation omitted), aff'd, 2004 UT 47, 94 P.3d 270. However, we "review the trial court's determination as to who was the prevailing party under an abuse of discretion standard," Chang v. Soldier Summit Dev., 2003 UT App 415,¶ 20, 82 P.3d 203, and the determination of attorney fees "is within the sound discretion of the trial court, and will not be overturned unless there is a showing of a clear abuse of discretion," John Holmes Constr., Inc. v. R.A. McKell Excavating, Inc., 2004 UT App 392,¶ 21, 101 P.3d 833 (quotations and citation omitted), cert. granted, 109 P.3d 804 (Utah 2005).

ANALYSIS

¶8 In their first assignment of error, Defendants argue that the trial court acted contrary to our instructions in Cache County I by allowing in evidence wherein "Cache County attempted to again review the issue of breach of the Lease." But a review of the opinion issued in Cache County I, along with the trial court's memorandum decision, findings of fact and conclusions of law, and judgment, demonstrates no such thing. In Cache County I, we remanded the case for a trial on the issue of substantial compliance alone, mandating the trial court to examine the facts "concerning the adverse consequences of forfeiture suffered by Cache County in relation to the damages suffered by Beus" due to Cache County's default. Cache County I, 1999 UT App 134 at ¶ 41, 978 P.2d 1043. We instructed the trial court to "determine the materiality of the breach, and then decide whether the breaching party had substantially complied with the `contract' (the [L]ease)," id. at ¶ 36 (emphasis omitted), and encouraged the court to use the five factors listed in the Restatement on Contracts in its analysis, see id. at ¶¶ 36-37 (quoting Restatement (Second) of Contracts: Circumstances Significant in Determining Whether a Failure is Material § 241 (1981)). The trial court spent significant time doing just that, and determined that "the adverse consequences of forfeiture suffered by [Cache] County overwhelmingly outweigh any damages suffered or allegedly suffered by Beus" as a result of Cache County's default. In short, the trial court did exactly as we asked, and no error occurred here.

¶9 In their second assignment of error, Defendants allege that the trial court erred in determining that Utah Coal & Lumber Restaurant, Inc. v. Outdoor Endeavors Unlimited, 2001 UT 100, 40 P.3d 581, has no application to this case. In Utah Coal & Lumber, the Utah Supreme Court held that "the failure to strictly comply with a lease's option renewal terms may be equitably excused only when the failure is caused by instances of fraud, misrepresentation, duress, undue influence, mistake, or the lessor's waiver of its right to receive notice." Id. at ¶ 18. Defendants here claim that Cache County's "own negligence, inadvertence, and neglect" caused their failure to timely cure their default and, therefore, under Utah Coal & Lumber, the equitable doctrine of substantial compliance is inapplicable to this case.

¶10 We disagree. The sole question on appeal in Utah Coal & Lumber was whether the trial court erred in equitably excusing defendant's failure to timely exercise its lease renewal option. See id. at ¶ 10. The court began with the general proposition that "to exercise an option to renew a lease, a lessee must strictly comply with the terms of the lease's option renewal provisions," id. at ¶ 11 (citing Geisdorf v. Doughty, 972 P.2d 67, 70-71 (Utah 1998)), and examined the doctrine of substantial compliance within that framework, see id. at ¶¶11-18. There is nothing in Utah Coal & Lumber that would expand its holding beyond lease renewal options, and indeed, other Utah cases have found that renewal options should be treated differently than bilateral contracts. See, e.g., Geisdorf, 972 P.2d at 70-71 ("[A]lthough substantial compliance is sufficient for bilateral contracts, performance of an option [to renew] requires strict compliance.").3 Here, in Cache County I, we instructed the trial court to hold a trial on the issue of substantial compliance. See Cache County I, 1999 UT App 134 at ¶ 41, 978 P.2d 1043. That ruling is the law of the case, see Thurston v. Box Elder County, 892 P.2d 1034, 1037 n. 2 (Utah 1995) ("The terminology [`law of the case'] has . . . been used to express the principle that inferior tribunals are bound to honor the mandate of superior courts within a single judicial system."), and nothing in Utah Coal & Lumber convinces us that it should not control.

¶11 In their third assignment of error, Defendants claim that they are contesting the trial court's conclusion of law that ejectment was not a proper remedy.4 In actuality, however, they are...

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