Hillcrest Inv. Co. v. Dep't of Transp.

• Decision Date: 04 June 2015
• Docket Number: No. 20140377–CA.,20140377–CA.
• Parties: HILLCREST INVESTMENT COMPANY, LLC, Plaintiff and Appellant, v. DEPARTMENT OF TRANSPORTATION, Defendant and Appellee.
• Court: Utah Court of Appeals

352 P.3d 128

2015 UT App 140

HILLCREST INVESTMENT COMPANY, LLC, Plaintiff and Appellant

v.DEPARTMENT OF TRANSPORTATION, Defendant and Appellee.

No. 20140377–CA.

Court of Appeals of Utah.

June 4, 2015.

David L. Arrington, Joshua D. Chandler, Salt Lake City, and Rebecca G. Van Tassell, for Appellant.

Sean D. Reyes, Brent A. Burnett, and Randy S. Hunter, Salt Lake City, for Appellee.

Judge JAMES Z. DAVIS authored this Opinion, in which Judges GREGORY K. ORME and MICHELE M. CHRISTIANSEN concurred.

Opinion

DAVIS, Judge:

¶ 1 Hillcrest Investment Company, LLC (Hillcrest) appeals the district court's grant of summary judgment in favor of the Utah Department of Transportation (UDOT). We affirm.

BACKGROUND

¶ 2 As part of the Legacy Parkway Project in Centerville, Utah, UDOT negotiated a Right of Way Contract (the Contract) to purchase three parcels of property held by several different trusts (the Trusts). The Trusts' sole means of accessing their remaining property was via a dirt road located on one of the parcels UDOT intended to purchase. During the negotiations, the Trusts expressed this concern and UDOT represented that its plans included the construction of a frontage road on one particular parcel it sought from the Trusts, Parcel 173C. UDOT repeated this representation in several documents it supplied to the Trusts. The Trusts ultimately issued warranty deeds in accordance with the Contract. In the deeds, the Trusts reiterated the public purposes for which each parcel was conveyed, including that Parcel 173C was conveyed “for a frontage road incident to the construction of a freeway known as [the Legacy Parkway Project].”¹ Ultimately, the frontage road was removed from the final plans for the Legacy Parkway Project and never constructed. The Contract's terms describe UDOT's obligation as simply to pay the Trusts for the parcels, which the Contract identifies by referencing the warranty deeds. The Contract itself contained no reference to a frontage road.

¶ 3 Hillcrest, as successor-in-interest to the Trusts, brought suit alleging that UDOT breached the Contract with the Trusts in which it agreed to pay for and construct a frontage road on Parcel 173C. UDOT moved for summary judgment on the ground that Hillcrest lacked standing because it was not a party to the Contract. The district court granted UDOT's motion. Hillcrest appealed to this court. We reversed the district court's ruling in Hillcrest Investment Co., LLC v. Utah Department of Transportation, 2012 UT App 256, 287 P.3d 427. Specifically, we held that factual questions relating to Hillcrest's standing precluded summary judgment. Id. ¶ 1.

¶ 4 On remand, after further briefing and argument by the parties, the district court ruled that Hillcrest had standing to assert its claims under the Contract. UDOT subsequently filed a renewed motion for summary judgment, arguing that the Contract is unambiguous and does not obligate UDOT to pay for or construct the frontage road. The district court agreed and granted summary judgment in favor of UDOT on all of Hillcrest's claims. Hillcrest appeals the ruling on two of its claims—breach of contract and unjust enrichment.

ISSUE AND STANDARD OF REVIEW

¶ 5 “Summary judgment is appropriate where (1) there is no genuine issue as to any material fact and (2) the moving party is entitled to a judgment as a matter of law.” Id. ¶ 11 (citation and internal quotation marks omitted). “We review a district court's grant of summary judgment de novo, reciting all facts and fair inferences drawn from the record in the light most favorable to the nonmoving party.” Id. (citation and internal quotation marks omitted).

ANALYSIS

I. Breach of Contract

¶ 6 Hillcrest challenges the district court's conclusion that the Contract is “clear and unambiguous” and that it “does not contain any obligation, executory or otherwise, requiring UDOT to pay for or construct a frontage road on Parcel 173C.” Hillcrest asserts that the warranty deeds for Parcel 173C identify the purpose of that conveyance as “for a frontage road” and that because the deeds are incorporated by reference into the Contract, the Contract establishes UDOT's obligation to construct a frontage road on that parcel. Alternatively, Hillcrest argues that the Contract and warranty deeds are ambiguous, particularly in light of “the parties' undisputed intent at the time of contracting” that UDOT would “build a frontage road to restore access” to the Trusts' remaining properties in exchange for the Trusts' agreement to forgo “payment of severance damages.”

¶ 7 “[C]ontractual ambiguity can occur in two different contexts: (1) facial ambiguity with regard to the language of the contract and (2) ambiguity with regard to the intent of the contracting parties.” Daines v. Vincent, 2008 UT 51, ¶ 25, 190 P.3d 1269. “The first context presents a question of law to be determined by the judge,” and the “second context presents a question of fact where, if the judge determines that the contract is facially ambiguous, parol evidence of the parties' intentions should be admitted.” Id. (citation and internal quotation marks omitted). Accordingly, “the question of ambiguity begins with an analysis of facial ambiguity.” Id.

¶ 8 “A contract provision is ambiguous if it is capable of more than one reasonable interpretation because of uncertain meanings of terms, missing terms, or other facial deficiencies.” Winegar v. Froerer Corp., 813 P.2d 104, 108 (Utah 1991) (citation and internal quotation marks omitted). “When determining whether a contract is ambiguous, any relevant evidence must be considered. Otherwise, the determination of ambiguity is inherently one-sided, namely, it is based solely on the extrinsic evidence of the judge's own linguistic education and experience.”Ward v. Intermountain Farmers Ass'n, 907 P.2d 264, 268 (Utah 1995) (citation and internal quotation marks omitted). “Then, after the trial court has considered evidence of contrary interpretations, the [trial court] must ensure that the interpretations contended for are reasonably supported by the language of the contract.” Hall v. Hall, 2013 UT App 280, ¶ 12, 316 P.3d 970 (alteration in original) (citations and internal quotation marks omitted); see also Watkins v. Henry Day Ford, 2013 UT 31, ¶ 28 n. 2, 304 P.3d 841 (“The introduction of any relevant evidence does not ... allow a litigant to create ambiguity out of whole cloth or to advocate for an interpretation that is in no way supported by the language of the underlying contract.” (emphasis, citation, and internal quotation marks omitted)). “If after considering such evidence the court determines that the interpretations contended for are reasonably supported by the language of the contract, then extrinsic evidence is admissible to clarify the ambiguous terms.” Ward, 907 P.2d at 268.

¶ 9 We must first consider Hillcrest's relevant extrinsic evidence to determine whether the Contract is ambiguous. Hillcrest submitted several pieces of correspondence and documents exchanged between the Trusts and UDOT during their negotiations that indicate the parties' shared intent that UDOT would construct a frontage road on Parcel 173C and that the purchase price would reflect that obligation. Likewise, the district court acknowledged that initially the parties intended that Parcel 173C would be used for a frontage road.

¶ 10 Next, Hillcrest identifies the phrase “for a frontage road” appearing in the warranty deeds for Parcel 173C as reflecting this intent. Hillcrest asserts that the deeds are incorporated by reference in the Contract and, accordingly, that the Contract can reasonably be interpreted to require UDOT to build a frontage road.

¶ 11 The district court considered the Contract's reference to the deeds to serve the limited purpose of providing the legal description of the land UDOT purchased. Additionally, the district court interpreted Hillcrest's evidence “regarding the circumstances surrounding the [Contract]” as “merely reflect [ing] that the parties had discussions relating to the construction of a frontage road and even intended that Parcel 173C be used for that construction” but concluded that the evidence of the parties' intent was outweighed by the absence of supporting language in the final, integrated Contract.²

¶ 12 The entire reference to Parcel 173C in the Contract is as follows: “[T]he Utah Department of Transportation shall comply with the following: ... (A) Pay Cash in full to the grantor(s) for the following: ... Land as described in Warranty Deed No. 0067:173:C.” While “[p]arties may incorporate by reference into their contract the terms of some other document,” Consolidated Realty Group v. Sizzling Platter, Inc., 930 P.2d 268, 273 (Utah Ct.App.1996) (citation and internal quotation marks omitted), “if a written contract refers to another writing for a particularly designated purpose, the other writing becomes a part of the contract only for the purpose specified,” 17A C.J.S. Contracts § 402 (Westlaw database updated Mar. 2015) ; accord Housing Auth. v. Snyder, 2002 UT 28, ¶ 19, 44 P.3d 724 (requiring “specific language” in order to incorporate the terms of another document); see also Consolidated Realty, 930 P.2d at 273 (explaining that to properly incorporate the terms of another document “into the document executed by the parties, the reference must be clear and unequivocal, and must be called to the attention of the other party, [the party] must consent thereto, and the terms of the incorporated document must be known or easily available to the contracting parties” (alteration in original) (citation and internal quotation marks omitted)).

¶ 13 The Contract's reference to the warranty deeds is, by its very terms, limited to identifying the parcels of land that UDOT agreed to purchase from the Trusts. There is no specific language incorporating into the Contract any terms from the warranty deeds that would add to UDOT's obligations under the Contract, such as the “for a frontage...