Foster v. Montgomery

• Decision Date: 28 November 2003
• Docket Number: No. 20020817-CA.,20020817-CA.
• Parties: Shirley FOSTER; and the Myotherapy College of Utah, a Utah corporation, Plaintiffs and Appellants, v. Paul MONTGOMERY, an individual; PMA Management Services, LLC, a Utah limited liability company; Paul Montgomery, as general partner for Celestial Enterprises, Ltd., a Utah limited partnership; Capital Growth Corporation, a Utah corporation; Paul Montgomery & Associates, Inc., a Utah corporation; Garry Gee; Dennis James; and John Does I through X, Defendants and Appellees.
• Court: Utah Court of Appeals

82 P.3d 191

2003 UT App 405

Shirley FOSTER; and the Myotherapy College of Utah, a Utah corporation, Plaintiffs and Appellants, v. Paul MONTGOMERY, an individual; PMA Management Services, LLC, a Utah limited liability company; Paul Montgomery, as general partner for Celestial Enterprises, Ltd., a Utah limited partnership; Capital Growth Corporation, a Utah corporation; Paul Montgomery & Associates, Inc., a Utah corporation; Garry Gee; Dennis James; and John Does I through X, Defendants and Appellees.

No. 20020817-CA.

Court of Appeals of Utah.

November 28, 2003.

Ross I. Romero and Vincent C. Rampton, Jones Waldo Holbrook & McDonough, Salt Lake City, for Appellants.

Mark Dykes, LeBoeuf Lamb Green & MacRae, Salt Lake City, for Appellees.

Before Judges DAVIS, GREENWOOD, and THORNE, Jr.

OPINION

GREENWOOD, Judge:

¶ 1 Plaintiffs Shirley Foster and the Myotherapy College of Utah (collectively, Foster) appeal from two trial court orders enforcing a Settlement Agreement (the Settlement Agreement or the Agreement) between Foster and defendants Paul Montgomery, et al. (collectively, Montgomery). The trial court's first Order granted Montgomery's cross-motion to enforce the Agreement. A second Order to Enforce was entered eighteen months later, at the request of Montgomery, due to Foster's failure to comply with the terms of the Agreement. On appeal, Foster claims that the Agreement is not enforceable because there was no meeting of the minds and there was a failure of conditions precedent. In response, Montgomery argues that this court does not have jurisdiction to consider Foster's claims regarding the first Order because the appeal was not timely filed. Montgomery also claims there was a valid waiver of the conditions precedent at issue, and thus the Agreement was enforceable. We affirm.

BACKGROUND

¶ 2 Shirley Foster owned the Myotherapy College of Utah and the Graystone office building. Because the Myotherapy College and the Graystone building were experiencing financial difficulties, Foster and Montgomery attempted to save the businesses though a series of management agreements beginning in late 1997. However, in August 1999, Foster brought suit against Montgomery, alleging that the agreements were fraudulently induced and that Montgomery's actions violated the terms of the agreements. Montgomery counter-claimed.

¶ 3 The parties agreed to mediation, and met on June 29, 2000, to discuss their respective claims. The mediation resulted in a one-page, handwritten settlement document titled "Outline of Agreement." The document was signed by all necessary parties. At the request of Foster's counsel, Montgomery's counsel drafted the formal agreement (the Settlement Agreement or the Agreement), based on the outline signed at the mediation.

¶ 4 The terms of Montgomery's counsel's draft of the Settlement Agreement relevant to this appeal are as follows. Foster was to transfer the Myotherapy College of Utah, a massage school, to Montgomery. Foster was also required to transfer title of the Graystone office building, which housed the college, free and clear of a Zions First National Bank lien on the building. Montgomery was required to pay and hold Foster harmless from a Small Business Administration loan secured by Foster's home. The Agreement also enumerated several conditions precedent, the failure of which would render the agreement void.

¶ 5 After the draft of the Settlement Agreement was distributed, the parties corresponded about disagreement over particular terms of the Settlement Agreement. Specifically, Foster disputed terms concerning the division of assets and liabilities, and wording of the covenant not to compete. In December 2000, approximately six months after the mediation, Foster filed a motion to enforce her understanding of the agreement terms. Montgomery filed a cross-motion to enforce the draft Settlement Agreement as drafted by Montgomery's counsel.

¶ 6 The trial court reviewed the pleadings and granted Montgomery's motion, stating in a minute entry that Montgomery's interpretation of the settlement document was "more compelling." In the order, the trial court stated that the parties were to execute Montgomery's draft of the Settlement Agreement within ten days of the order's entry. Further, should any of the parties refuse to execute the Settlement Agreement, Paul Montgomery was granted the power to execute the Agreement on Foster's behalf, under Utah Rule of Civil Procedure 70.¹ The Order to Enforce the Agreement was entered April 24, 2001 (the April 2001 Order).

¶ 7 After the April 2001 Order was entered, the parties continued to correspond about the Settlement Agreement. Because Foster refused to sign the Settlement Agreement, Montgomery signed for her, as permitted by the April 2001 Order. However, the Settlement Agreement never closed, because of the parties' continued disputes. Therefore, on August 9, 2002, Montgomery filed a Second Motion to Enforce the Settlement Agreement. In Foster's Motion in Opposition, she argued that a failure of conditions precedent rendered the Agreement void by its own terms. Specifically, Foster argued that Montgomery failed to obtain accreditation for the Myotherapy College, in violation of the Agreement. She also argued that all necessary third party consents to the transfers and transactions of the Agreement were not obtained. This argument was based on the refusal of Zions First National Bank to release a lien on the Graystone building, which the Agreement required. Finally, Foster argued that because Montgomery refused to pay off the Small Business Administration loan secured by her home, she could not offer substitute collateral or pay off the Zions Bank lien on Graystone, and therefore Zions would not consent to remove the lien on Graystone.

¶ 8 After filing her Motion in Opposition to the Second Motion to Enforce, Foster requested an evidentiary hearing. This request was denied on grounds that it was untimely. At the same time the hearing was denied, the trial court entered an Order to Enforce the Agreement, on October 3, 2002 (the October 2002 Order). The October 2002 Order varies only slightly from the April 2001 Order.² Indeed, Foster's reply brief acknowledges that the terms of the second order "nearly mirror those of the first order." In the April 2001 Order, the court noted the parties' different interpretations of the mediation outline and granted Montgomery's cross-motion. In the October 2002 Order, the court merely granted Montgomery's motion.

¶ 9 Foster now appeals from the October 2002 Order, claiming that the Agreement should not be enforced because there was no meeting of the minds and because a failure of conditions precedent renders the Agreement void.

ISSUES AND STANDARDS OF REVIEW

¶ 10 Montgomery argues that this court does not have jurisdiction to consider Foster's appeal regarding a meeting of the minds because the time for appeal began to run from the April 2001 Order, the trial court's first Order to Enforce. "If an appeal is not timely filed, this court lacks jurisdiction to hear the appeal." Serrato v. Utah Transit Auth., 2000 UT App 299,¶ 7, 13 P.3d 616.

¶ 11 Because we conclude that the time for appeal began to run from the April 2001 Order, we retain jurisdiction only to consider whether there was a failure of conditions precedent, because that issue was decided by the October 2002 Order. "`Questions of contract interpretation not requiring resort to extrinsic evidence are matters of law, and on such questions we accord the trial court's interpretation no presumption of correctness.'" Sackler v. Savin, 897 P.2d 1217, 1220 (Utah 1995) (quoting Zions First Nat'l Bank v. National Am. Title Ins. Co., 749 P.2d 651, 653 (Utah 1988)).

¶ 12 Both parties request attorney fees pursuant to the contract. "`In Utah, attorney fees are awarded only if authorized by statute or contract. If provided for by contract, attorney fees are awarded in accordance with the terms of that contract.'" Chase v. Scott, 2001 UT App 404,¶ 12, 38 P.3d 1001 (quoting Equitable Life & Cas. Ins. Co. v. Ross, 849 P.2d 1187, 1194 (Utah Ct.App.1993)).

ANALYSIS

I. Jurisdiction

¶ 13 Jurisdiction is a threshold issue and we therefore address it first. Montgomery argues that Foster's appeal is untimely because she failed to file the appeal within thirty days of the entry of the April 2001 Order. Foster maintains that her timely appeal from the October 2002 Order vests this court with jurisdiction to consider both the April 2001 Order and the October 2002 Order. She further asserts that the October 2002 Order is the "final" order for purposes of appeal.

¶ 14 "An appeal may be taken from a district ... court to the appellate court with jurisdiction over the appeal from all final orders and judgments...." Utah R.App. P. 3(a) (emphasis added). A party must file the notice of appeal "within 30 days after the date of entry of the judgment or order appealed from." Utah R.App. P. 4(a). "If an appeal is not timely filed, this court lacks jurisdiction to hear the appeal." Serrato v. Utah Transit Auth., 2000 UT App 299,¶ 7, 13 P.3d 616. Once this court concludes that it lacks jurisdiction, it "retains only the jurisdiction to dismiss the action." Varian-Eimac, Inc. v. Lamoreaux, 767 P.2d 569, 570 (Utah Ct.App.1989) (citation omitted).

¶ 15 We conclude that the April 2001 Order was a final order and that the time for appeal expired thirty days after the order was entered. "The Utah Supreme Court has recognized that an order is final where `the effect of the order ... was to determine substantial rights ... and to terminate finally the litigation'...." Harris v. IES Assocs., Inc., 2003 UT App 112,¶ 56, 69 P.3d 297 (alterations in original) (citations omitted).

¶ 16 In this case, the April 2001 Order enforcing the Settlement Agreement was a final order because it determined the parties' substantial rights and terminated the litigation. The April 2001 Order...