First American Commerce Co. v. Washington Mut. Sav. Bank, No. 860404

CourtUtah Supreme Court
Writing for the CourtDURHAM; HALL; STEWART
Citation743 P.2d 1193
PartiesFIRST AMERICAN COMMERCE COMPANY, a Utah general partnership; W. Claude Smith; Francis H. Suitter; James R. Dickson, Jr.; Sam D. Battistone; Carla Nan Battistone; Merrill Turnbow; Kurt Larsen; Sandra Lynn Larsen; Glenn A. Powell; and Carol A. Powell, Plaintiffs and Appellants, v. WASHINGTON MUTUAL SAVINGS BANK, a Washington corporation, and First Security Realty Services, Inc., a Utah corporation, Defendants and Respondents.
Decision Date21 September 1987
Docket NumberNo. 860404

Page 1193

743 P.2d 1193
FIRST AMERICAN COMMERCE COMPANY, a Utah general partnership;
W. Claude Smith; Francis H. Suitter; James R. Dickson,
Jr.; Sam D. Battistone; Carla Nan Battistone; Merrill
Turnbow; Kurt Larsen; Sandra Lynn Larsen; Glenn A.
Powell; and Carol A. Powell, Plaintiffs and Appellants,
v.
WASHINGTON MUTUAL SAVINGS BANK, a Washington corporation,
and First Security Realty Services, Inc., a Utah
corporation, Defendants and Respondents.
No. 860404.
Supreme Court of Utah.
Sept. 21, 1987.

David R. Olsen, Salt Lake City, for plaintiff and appellant Francis suitter.

Reed L. Martineau, Stephen J. Hill, Ryan Tibbitts, Salt Lake City, for other plaintiffs and appellants.

Kent H. Murdock, Larry G. Moore, Ira B. Rubinfeld, Salt Lake City, for defendants and respondents.

Page 1194

DURHAM, Justice:

In this interlocutory appeal, First American Commerce (Borrower) seeks relief from a summary judgment entered against it dismissing all but its claim for fraud against First Security Realty Services (Lender).

In evaluating the appropriateness of summary judgment, we do not defer to the decision of the trial court, but rather apply the same standard used by that court. Durham v. Margetts, 571 P.2d 1332, 1334 (Utah 1977). We view the facts in the light most favorable to the party opposing the summary judgment and grant summary judgment only if the moving party is entitled to judgment as a matter of law. Themy v. Seagull Enterprises, 595 P.2d 526, 528-29 (Utah 1979).

The facts as asserted by Borrower are that Borrower received a loan from Lender, 1 securing repayment with a deed of trust and an assignment of rents on a commercial building owned by Borrower. Under the loan documents, Lender's written approval was required on new leases and a percentage of the loan was withheld in a "hold-back" fund pending the completion of certain tenant improvements. On the day the loan documents were signed, Lender assigned the loan to Washington Mutual Savings Bank (Assignee). The assignment was made with the knowledge and consent of Borrower. Borrower desired to lease space in the building and contacted both Lender and Assignee, neither of which would give written consent. Borrower lost the opportunity to lease the space. Upon completion of the tenant improvements, Borrower made a written request that Lender release the held-back funds. Lender refused to release the funds on the theory that its duty to do so had been delegated to Assignee. Borrower sued Lender and Assignee.

Lender obtained summary judgment on the theory that when it assigned the loan documents to Assignee, it ceased to have any responsibility to Borrower, including the duty to release the held-back funds. Borrower argues that although Lender assigned its right to receive payments, it remained obligated to perform its duties under the loan agreement. In the absence of a novation agreement between Lender and Borrower whereby Assignee's performance would be substituted for that of Lender, Lender remained responsible for its duties under the loan. We believe that Borrower is correct.

A review of basic contract law vocabulary is helpful to a resolution of the issue. An assignment is the transfer of rights; a delegation is the transfer of duties. J. Calamari & J. Perillo, Contracts § 18-24 (2d ed. 1977). The term "assignment" is often used imprecisely by courts. We...

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4 practice notes
  • Imperial Hotels Corp. v. Dore, No. 00-1198
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • June 5, 2001
    ...1992); Citizens State Bank v. Richart, 476 N.E.2d 383, 385 (Ohio Ct. App. 1984); First Am. Commerce Co. v. Washington Mut. Sav. Bank, 743 P.2d 1193, 1195 (Utah 1987) ("Whether an agreement is a novation is a matter of intent," not law). Only when the fact of mutual assent to an agreement is......
  • Winegar v. Froerer Corp., No. 890160
    • United States
    • Utah Supreme Court
    • May 17, 1991
    ...An assignment is the transfer of rights; a delegation is the transfer of duties. First American Commerce v. Washington Mut. Sav., 743 P.2d 1193, 1194 (Utah 1987) (citing J. Calamari & J. Perillo, Contracts § 18-24 (2d ed. 1977)). Generally, all beneficial rights under an executory contract ......
  • Johnson v. Department of Transp., No. 20030142-CA.
    • United States
    • Utah Court of Appeals
    • August 26, 2004
    ...he contracted for guaranteeing the successful execution of the contractual duties." First Am. Commerce Co. v. Washington Mut. Sav. Bank, 743 P.2d 1193, 1195 (Utah 1987). Thus, the present contract could create a new duty of care in Granite for public safety, but the creation of Granite's co......
  • Local Government Trust v. Wheeler Machinery, No. 20050557-CA.
    • United States
    • Court of Appeals of Utah
    • December 29, 2006
    ...rain cap regardless of who actually directed Carlson to make the modification. See First Am. Commerce Co. v. Washington Mut. Sav. Bank, 743 P.2d 1193, 1194 (Utah 1987) ("[C]ourts agree that a party who delegates his duties under a contract to a third person is not relieved of 154 P.3d 179 h......
4 cases
  • Imperial Hotels Corp. v. Dore, No. 00-1198
    • United States
    • United States Courts of Appeals. United States Court of Appeals (6th Circuit)
    • June 5, 2001
    ...1992); Citizens State Bank v. Richart, 476 N.E.2d 383, 385 (Ohio Ct. App. 1984); First Am. Commerce Co. v. Washington Mut. Sav. Bank, 743 P.2d 1193, 1195 (Utah 1987) ("Whether an agreement is a novation is a matter of intent," not law). Only when the fact of mutual assent to an agreement is......
  • Winegar v. Froerer Corp., No. 890160
    • United States
    • Utah Supreme Court
    • May 17, 1991
    ...An assignment is the transfer of rights; a delegation is the transfer of duties. First American Commerce v. Washington Mut. Sav., 743 P.2d 1193, 1194 (Utah 1987) (citing J. Calamari & J. Perillo, Contracts § 18-24 (2d ed. 1977)). Generally, all beneficial rights under an executory contract ......
  • Johnson v. Department of Transp., No. 20030142-CA.
    • United States
    • Utah Court of Appeals
    • August 26, 2004
    ...he contracted for guaranteeing the successful execution of the contractual duties." First Am. Commerce Co. v. Washington Mut. Sav. Bank, 743 P.2d 1193, 1195 (Utah 1987). Thus, the present contract could create a new duty of care in Granite for public safety, but the creation of Granite's co......
  • Local Government Trust v. Wheeler Machinery, No. 20050557-CA.
    • United States
    • Court of Appeals of Utah
    • December 29, 2006
    ...rain cap regardless of who actually directed Carlson to make the modification. See First Am. Commerce Co. v. Washington Mut. Sav. Bank, 743 P.2d 1193, 1194 (Utah 1987) ("[C]ourts agree that a party who delegates his duties under a contract to a third person is not relieved of 154 P.3d 179 h......

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