Fennell v. Green

• Decision Date: 21 August 2003
• Docket Number: No. 20011029-CA.,20011029-CA.
• Parties: James Ashley FENNELL II, Plaintiff and Appellant, v. Edward D. GREEN; Neil Wall aka Neil J. Wall; and GMW Development, Inc. dba Ivory North, Defendants and Appellees.
• Court: Utah Court of Appeals

77 P.3d 339

2003 UT App 291

James Ashley FENNELL II, Plaintiff and Appellant, v. Edward D. GREEN; Neil Wall aka Neil J. Wall; and GMW Development, Inc. dba Ivory North, Defendants and Appellees.

No. 20011029-CA.

Court of Appeals of Utah.

August 21, 2003.

Lavar E. Stark and Frank M. Wells, Ogden, for Appellant.

Paul M. Belnap, Andrew D. Wright, Byron G. Martin, Strong & Hanni, Brandon B. Hobbs, Christian S. Collins, Elizabeth A. Hruby-Mills, Richards Brandt Miller & Nelson, Barbara K. Berrett, and Kumen L. Taylor, Berrett & Associates LC, Salt Lake City; and David R. Hamilton, Smith Knowles & Hamilton, PC, Ogden, for Appellees.

Before JACKSON, P.J., and BILLINGS, Associate P.J., and GREENWOOD, J.

OPINION

GREENWOOD, Judge:

¶ 1 James Ashley Fennell II appeals the trial court's grant of summary judgment in favor of defendants Edward D. Green, Neil Wall, and GMW Development, Inc., dba Ivory North (Ivory North) (collectively, Defendants). We affirm.

BACKGROUND

¶ 2 Green and Wall were partners in development of the Falcon Ridge Subdivision (the Subdivision) in Layton, Utah, which included lot 31. Layton City required a soils report to be conducted on the Subdivision prior to its development. Green and Wall hired Glenn R. Maughan to conduct the required soils report. The soils report was completed October 7, 1992, with additional testing completed on lot 31 and reported on October 9, 1992. Maughan's October 9 soils report stated that a scarp existed "on the north 20 feet of Lot # [31]," which was determined to be a landfall. Maughan recommended that "the road right-of-way to Beech Adams be placed along the inside of the fence ... [which] would reduce the slope to Kays Creek ... [and that] a 45-degree angle would be sufficient... [but that] a 15-degree safety factor is recommended." Maughan's report was filed with Layton City and available for public inspection. Bill Flanders, the Layton City engineer, reviewed the soils report and determined that Green and Wall had "complied with all of the necessary regulations and standards to gain approval from Layton City for the Falcon Ridge Subdivision." Subsequently, Layton City approved the Subdivision for residential building.

¶ 3 Ivory North is a real estate developer. Fennell expressed interest in Ivory North constructing a home for him on lot 31. On May 18, 1995, Fennell entered into an agreement with Ivory North for the purchase of a home to be built on lot 31 of the Subdivision. Pursuant to the agreement, Ivory North purchased lot 31 from Wall and Green. Fennell had no contact with Wall and Green. Ivory North then built a home on lot 31 and transferred title to Fennell on December 22, 1995. In April 1998, a landslide occurred on lot 31. No one was injured and the only damage was to landscaping.¹ However, Fennell claims the value of lot 31 greatly decreased because of the landslide.

¶ 4 On April 7, 2000, Fennell filed a complaint against Green, Wall, and Ivory North alleging intentional failure to disclose, negligent failure to disclose, and breach of an implied warranty. All Defendants filed motions for summary judgment. After a hearing, the trial court granted Defendants' motions for summary judgment based on (1) Fennell's failure to comply with rule 4-501(2)(B) of the Utah Rules of Judicial Administration by not specifically controverting the facts as set forth by Defendants in the memoranda in support of their motions for summary judgment, (2) Fennell's failure to establish that any of the Defendants knew lot 31 was susceptible to landslides, (3) the economic loss rule, and (4) Utah's refusal to recognize implied warranties for residential property.

¶ 5 This appeal followed.

ISSUE AND STANDARD OF REVIEW

¶ 6 Fennell appeals, claiming the trial court erred in granting Defendants' motions for summary judgment. "Summary judgment is granted only when `there is no genuine issue as to any material fact' and `the moving party is entitled to a judgment as a matter of law.'" Bearden v. Croft, 2001 UT 76,¶ 5, 31 P.3d 537 (quoting Utah R. Civ. P. 56(c)). "In reviewing a grant of summary judgment, [this court] ... gives `no deference to the trial court's conclusions of law: those conclusions are reviewed for correctness.'" Id. (quoting Blue Cross & Blue Shield v. State, 779 P.2d 634, 636-37 (Utah 1989)).

ANALYSIS

I. Rule 4-501(2)(B)

¶ 7 Fennell appeals the trial court's grant of summary judgment in favor of Defendants based on his failure to comply with rule 4-501(2)(B) of the Utah Rules of Judicial Administration. At the time the motions for summary judgment were filed, rule 4-501(2)(B) stated:

The points and authorities in opposition to a motion for summary judgment shall begin with a section that contains a concise statement of material facts as to which the party contends a genuine issue exists .... Each disputed fact shall be stated in separate numbered sentences and shall specifically refer to those portions of the record upon which the opposing party relies and, if applicable, shall state the numbered sentence or sentences of the movant's facts that are disputed. All material facts set forth in the movant's statement and properly supported by an accurate reference to the record shall be deemed admitted for the purpose of summary judgment unless specifically controverted by the opposing party's statement.

Utah R. Jud. Admin. 4-501(2)(B) (amended November 2001) (emphasis added). It is clear that Fennell failed to comply with the rule. He did not refer to Defendants' statements of uncontroverted facts, but instead included only his own statement of undisputed facts. As a result, it was unclear what facts Fennell contended were disputed.² However, Fennell argues that the trial court violated his substantive rights and abused its discretion when it required compliance with rule 4 501. Fennell cites Scott v. Majors, 1999 UT App 139,¶ 12, 980 P.2d 214, as support for this contention. In Scott, this court stated that the Utah Rules of Judicial Administration "are not intended to, nor do they, create or modify substantive rights of litigants, nor do they decrease the inherent power of the court to control matters pending before it." Id.

¶ 8 The Utah Supreme Court, however, recently emphasized the importance of compliance with the Rules of Judicial Administration in Lovendahl v. Jordan School District, 2002 UT 130, 63 P.3d 705.³ In Lovendahl, the plaintiff sued for damages under a claim for inverse condemnation. See id. at ¶ 48. The defendant's summary judgment motion and supporting memorandum included facts and arguments that the plaintiff, in opposing the summary judgment motion, did not address. See id. at ¶ 50. The court noted that under rule 4-501(2)(B) "all facts set forth in the movant's statement of facts are `deemed admitted for the purpose of summary judgment unless specifically controverted by the opposing party's statement.'" Lovendahl, 2002 UT 130 at ¶ 50, 63 P.3d 705 (quoting Utah R. Jud. Admin. 4-501(2)(B)). Because the plaintiff did not specifically controvert the facts outlined in the defendant's motion for summary judgment, the court rejected the plaintiff's claim that there was insufficient evidence to support summary judgment. See id.

¶ 9 In addition, the trial court has discretion in requiring compliance with rule 4-501. See Hartford Leasing Corp. v. State, 888 P.2d 694, 701-02 (Utah Ct.App.1994)

(upholding trial court's exercise of discretion in refusing to accept supplemental memoranda outside bounds of rule 4-501). Utah courts have repeatedly upheld the necessity of compliance with the Utah Rules of Judicial Administration. See id.; see also Golding v. Ashley Cent. Irrigation Co., 902 P.2d 142, 148 (Utah 1995) (determining that failure to comply with rule 4-501 made additional filings moot); cf. Price v. Armour, 949 P.2d 1251, 1255 (Utah 1997) (finding trial court erred in not complying with rule 4-501 but affirming because error was harmless); Loporto v. Hoegemann, 1999 UT App 175,¶ 14, 982 P.2d 586 (reversing trial court where it did not follow notice requirement of rule 4-506 of the Utah Rules of Judicial Administration). See generally Parker v. Dodgion, 971 P.2d 496, 497 n. 3 (Utah 1998) (affirming trial court on other grounds but noting plaintiff's response to motion for summary judgment failed to conform with rule 4-501 because it failed to set forth disputed facts and did not contain numbered sentences). These cases establish that a trial court may exercise its discretion to require compliance with the Rules of Judicial Administration, particularly rule 4-501, without impairing a party's substantive rights. In this case, we do not believe the court abused its discretion in requiring compliance with rule 4-501 and thus ruling that the facts, as stated in Defendants' motions and supporting memoranda, were deemed admitted. We rely on those admitted facts in addressing the remaining issues raised by Fennell.

II. Summary Judgment as to Green and Wall

A. Fraudulent Nondisclosure

¶ 10 Fennell argues that the trial court erred in granting Wall's and Green's motions for summary judgment as to Fennell's claim of fraudulent nondisclosure.⁴ "To support a claim of fraudulent nondisclosure a plaintiff must prove the following three elements: (1) the nondisclosed information is material, (2) the nondisclosed information is known to the party failing to disclose, and (3) there is a legal duty to communicate." Hermansen v. Tasulis, 2002 UT 52,¶ 24, 48 P.3d 235. Defendants do not argue that the possibility of landslides on lot 31 is not material information. Therefore, to decide whether Wall and Green acted fraudulently, it must be determined if any nondisclosed information was known to them and whether they had a legal duty to communicate the information to Fennell. See id. ¶ 11 Given the uncontroverted facts, we determine that Fennell's fraudulent nondisclosure claim against Wall and Green fails because there were no facts presented to...