Cea v. Hoffman

• Decision Date: 05 April 2012
• Docket Number: No. 20100728–CA.,20100728–CA.
• Citation: 276 P.3d 1178,2012 UT App 101,705 Utah Adv. Rep. 27
• Parties: Al CEA and Laura Cea, Plaintiffs and Appellants, v. Roger HOFFMAN; Modular Manufacturing, LLC; Investors Collaborative, LLC, Defendants and Appellees.
• Court: Utah Court of Appeals

276 P.3d 1178
705 Utah Adv. Rep. 27
2012 UT App 101

Al CEA and Laura Cea, Plaintiffs and Appellants,
v.
Roger HOFFMAN; Modular Manufacturing, LLC; Investors Collaborative, LLC, Defendants and Appellees.

No. 20100728–CA.

Court of Appeals of Utah.

April 5, 2012.

[276 P.3d 1181]

Alex B. Leeman, Matthew F. McNulty III, and Florence M. Vincent, Salt Lake City, for Appellants.

David M. Wahlquist, Christopher S. Hill, and Gregory S. Moesinger, Salt Lake City, for Appellees.

Before Judges McHUGH, VOROS, and ROTH.

OPINION
VOROS, Associate Presiding Judge:

¶ 1 Appellants Al and Laura Cea appeal the trial court's entry of summary judgment in favor of Modular Manufacturing, LLC, Investors Collaborative, LLC, and Roger Hoffman (collectively Appellees).¹ We affirm in part and reverse in part.

BACKGROUND

¶ 2 This case arises from the Ceas' unsuccessful attempt to purchase a modular log home and have it delivered to their property in California. In June 2006, the Ceas entered into a purchase agreement with American TimberCraft, LLC (ATC), a Utah limited liability company. Pursuant to that agreement, the Ceas made a down payment of $172,116—half the total purchase price—to ATC. ATC incurred financial difficulties and never began construction of the home. In November 2006, ATC signed an agreement with Modular in which Modular “acquir [ed] from ATC its work in progress and pending orders along with all related deposits and down payments,” including the Ceas' $172,116.

¶ 3 Six months later, Modular sent the Ceas a letter (the Modular Letter) explaining that ATC had “ceased operations,” “liquidated all company assets,” and was “no longer capable of completing or performing on its contract with [the Ceas].” However, the Modular Letter added, “all is not lost.” Modular had acquired ATC's assets and proposed two options. The first option was for Modular to complete the Ceas' log home:

Although Modular did not purchase [ATC] itself[,] as part of the asset acquisitions[ ] Modular agreed to complete all work in progress, including orders for which deposits have been taken (even if no physical work has commenced). Therefore if you had an order with [ATC], Modular has agreed to complete the work on your home for the previously agreed price, even though it did not acquire your actual contract from [ATC]....

If you decide that you would like to proceed, enter into a new contract and have your home completed, there are some minor modifications to terms and payment schedules. However the specifications for the home itself will not change nor will the price.

The second option was for Modular to refund the Ceas' deposit:

At this point in time we (as [Modular] ) will be issuing new contracts for your

[276 P.3d 1182]

home construction (regardless of what stage of construction it may be in) in order to complete and give you the assurance of a valid contract for performance. In lieu of a new contract we will be willing to pay you whatever deposits or payments you made to [ATC] for your home should you decide that you would prefer to cancel and just walk away.

The Modular Letter was sent by Modular; it appears that neither Investors nor Hoffman signed the letter.

¶ 4 The Ceas responded with a letter (the First Cea Letter) purporting to accept Modular's proposal to build and deliver the home. However, the Ceas sought to change the specifications and place of delivery of the home and sought additional terms not offered by Modular, including a new delivery date:

Please prepare a new contract for us showing the $172,116 paid in thr[ough] June 7, 2006. We wish to delete the garage. Also, please reflect the 5% of total contract to be retained by us and paid upon final setting ... of log shell.

[W]e are changing the location of the job, our frustration with this project has taken a great toll on us in more ways than you can imagine. We ... will take delivery on a new parcel ... [and] we will obtain all necessary permits....

We hope and expect our new delivery date for this shell to be on or before July 31, 2007.

¶ 5 Modular did not respond to the First Cea Letter. One week later, the Ceas sent a second letter (the Second Cea Letter) purporting to accept Modular's proposal to refund their deposit:

Upon further consideration, we respectfully request that, in accordance with your December letter, you refund the $172,116 we have paid as a deposit on our log home.

Please send a check at your earliest convenience....

This has been a very difficult decision for us, but we don't believe your company can deliver a log home to us in any reasonable time frame.

¶ 6 Modular did not respond to the Second Cea Letter, nor did it refund the Ceas' deposit. Accordingly, in February 2008, the Ceas sued a number of defendants, including Modular, Investors, Hoffman, and ATC. The Ceas alleged (1) breach of contract for failure to build and deliver their home or, alternatively, for failing to refund the Ceas' deposit; (2) fraud or intentional misrepresentation; and (3) negligent or reckless misrepresentation. These causes of action all arose out of the Modular Letter. ²

¶ 7 Appellees successfully moved for summary judgment. The trial court ruled that Hoffman “is not personally liable for the actions of Modular” because “Hoffman never made any personal representations to the Ceas and that any action by Hoffman was limited to his capacity as a representative of [Modular].” It further ruled that Investors “is not personally liable for the actions of Modular” because Investors “never made any representations to the Ceas, and that any action by Investors was limited to its capacity as a representative of Modular.” Finally, the court ruled that Modular and the Ceas never formed a binding contract and that Modular made no fraudulent or negligent misrepresentations. The Ceas appeal.

ISSUES AND STANDARDS OF REVIEW

¶ 8 The Ceas assert three principal claims of error. First, they contend that summary judgment should not have been granted, because discovery was not complete. Next, they contend that a genuine issue of material fact exists as to whether Hoffman is personally liable for his role in making distributions from Modular while Modular was insolvent. Finally, they contend that a genuine issue of law exists as to whether the Ceas and Modular formed a contract.

[276 P.3d 1183]

¶ 9 We review a grant or denial of summary judgment for correctness, affording the trial court no discretion, and we view all the facts and reasonable inferences in the light most favorable to the nonmoving party. See Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600. Whether a contract exists between parties is ordinarily a question of law, reviewed for correctness. See Herm Hughes & Sons, Inc. v. Quintek, 834 P.2d 582, 583 (Utah Ct.App.1992). However, “ ‘[a] motion for summary judgment may not be granted if ... there is a factual issue as to what the parties intended.’ ” West One Trust Co. v. Morrison, 861 P.2d 1058, 1062 (Utah Ct.App.1993) (omission in original) (quoting Winegar v. Froerer Corp., 813 P.2d 104, 108 (Utah 1991)).

ANALYSIS I. Incomplete Discovery

¶ 10 The Ceas contend that the trial court erred in granting summary judgment because, at the time the court heard and ruled on the summary judgment motion, discovery was not complete. They note that “this fact was made known to the district court in the Ceas' opposition to the Appellees' motions for summary judgment as well as in oral arguments.”

¶ 11 The Ceas argued below that the existing record demonstrated that Hoffman played a substantial role in Modular's allegedly unlawful distributions. However, they also sought to obtain through discovery additional facts to support this allegation. Because Modular's responses to their discovery requests were allegedly deficient, the Ceas filed a motion to compel. They filed the motion four months after the close of fact discovery under the scheduling order, three months after the Appellees had filed their motions for summary judgment, and one month after the Appellees had filed notices to submit their summary judgment motions for decision. While the motion to compel was pending, the trial court heard and granted the Appellees' motions for summary judgment. The Ceas contend that the court's ruling was premature because discovery was incomplete. “Had Hoffman provided the Ceas with the discovery they requested, but which Hoffman failed to provide, such discovery would have supported the Ceas' argument,” they contend.

¶ 12 “We generally review a trial court's discovery rulings for an abuse of discretion, but when a trial court does not rule on outstanding discovery motions and thereby fails to exercise its discretion, ‘the issue of whether or not it should have [decided the outstanding motions] presents a legal question which is subject to de novo review.’ ” Bluemel v. Freestone, 2009 UT App 16, ¶ 4, 202 P.3d 304 (quoting Energy Mgmt. Servs., LLC v. Shaw, 2005 UT App 90, ¶ 8, 110 P.3d 158). “Generally, summary judgment should not be granted if discovery is incomplete since information sought in discovery may create a genuine issue of material fact sufficient to defeat the motion.” Id. ¶ 5. Here, however, any possible error committed by the trial court was invited by the Ceas.

¶ 13 The invited error doctrine “is crafted to discourage parties from intentionally misleading the trial court so as to preserve a hidden ground for reversal on appeal,” as well as “to give the trial court the first opportunity to address the claim of error.” State v. Geukgeuzian, 2004 UT 16, ¶ 12, 86 P.3d 742 (internal quotation marks and brackets omitted). Under the invited error doctrine, “a party cannot take advantage of an error committed at trial when that party led the trial court into committing the error.” Id. ¶ 9 (internal quotation marks omitted). “Affirmative representations that a party has no objection to the proceedings fall within the scope of the invited error doctrine because such representations reassure the trial court and...