R4 Constructors LLC v. Inbalance Yoga Corp.

• Decision Date: 24 December 2020
• Docket Number: No. 20190685-CA,20190685-CA
• Citation: 480 P.3d 1075
• Court: Utah Court of Appeals
• Parties: R4 CONSTRUCTORS LLC, Appellee, v. INBALANCE YOGA CORPORATION and Jennifer Schnabel, Appellants.

480 P.3d 1075

R4 CONSTRUCTORS LLC, Appellee,

v.INBALANCE YOGA CORPORATION and Jennifer Schnabel, Appellants.

No. 20190685-CA

Court of Appeals of Utah.

Filed December 24, 2020

Justin D. Heideman and Justin R. Elswick, Attorneys for Appellants

Cody W. Wilson and Andrew Berne, Salt Lake City, Attorneys for Appellee

Judge David N. Mortensen authored this Opinion, in which Judges Michele M. Christiansen Forster and Ryan M. Harris concurred.

Opinion

MORTENSEN, Judge:

¶1 InBalance Yoga Corporation and Jennifer Schnabel (collectively, InBalance) failed to timely designate any experts, and the district court denied a motion to extend the lapsed deadline. Subsequently, the district court granted a motion by R4 Constructors LLC (R4) for summary judgment—both on its own claims for affirmative relief as well as on InBalance's counterclaims—and denied InBalance's cross-motion for summary judgment on R4's claims. The district court's grant of R4's motion rested, in part, on the conclusion that InBalance failed to disclose a computation of damages. The denial of InBalance's cross-motion was premised on the district court's conclusion that InBalance waived a licensure defense. InBalance appeals these rulings. We affirm the district court's rulings in part but vacate the entry of summary judgment granting R4's claims for affirmative relief as well as the final judgment in R4's favor, and remand for further proceedings.

BACKGROUND

¶2 In December 2015, InBalance contracted with R4 for the construction of a yoga studio. R4 subsequently began construction on the studio, and InBalance paid R4 according to the first invoice. Thereafter, disputes arose with regard to the work on the studio, and InBalance refused to pay additional amounts due. Eventually, R4 finished working on the studio, and a certificate of occupancy was issued.

¶3 R4 filed a complaint against InBalance seeking amounts owed under the contract. InBalance filed a counterclaim stemming from alleged defects in the construction and an answer asserting twenty-nine affirmative defenses, not including R4's lack of licensure. During discovery, R4 propounded an interrogatory requesting "a detailed computation" of the damages alleged in InBalance's counterclaim. In response, InBalance stated it claimed no less than $185,723.79 "based upon the original costs of labor and fixtures to perform the work as identified in the R4 contract as well as the cost of correct and functioning fixtures and the cost of repair for the items installed and/or constructed."

¶4 The litigation continued, and the deadline to disclose expert witnesses passed without InBalance having disclosed any expert witness. Several weeks after the disclosure deadline, InBalance filed a motion to extend the expert disclosure deadline and sought leave to disclose a construction expert. The court held a hearing, at the conclusion of which it denied the motion and articulated the findings underlying its decision. The court subsequently entered a written order denying the motion.

¶5 Thereafter, R4 filed a motion for summary judgment on its affirmative claims and seeking dismissal of InBalance's counterclaims, in part because InBalance failed to timely disclose an expert witness necessary to prove the alleged construction defects. InBalance filed its own motion for summary judgment for the limited purpose of dismissing R4's claims as barred by statute due to R4's lack of a contractor's license at the time the parties made the contract. The district court granted R4's motion, denied InBalance's cross-motion, dismissed InBalance's counterclaims, and entered judgment, including attorney fees, for R4 on its affirmative claims.

¶6 InBalance appeals.

ISSUES AND STANDARDS OF REVIEW

¶7 InBalance raises three issues on appeal. First, InBalance asserts that the district court erred in denying its motion to extend the expert disclosure deadline. We review a court's decision on extending the time for discovery for an abuse of discretion, reversing only "if there is no reasonable basis for the district court's decision." Berger v. Ogden Reg'l Med. Center , 2020 UT App 85, ¶ 15, 469 P.3d 1127 (cleaned up).

¶8 Second, InBalance argues that the district court erred by denying its motion for summary judgment and by granting R4's motion for summary judgment. "We review the district court's ultimate grant or denial of summary judgment for correctness. We give no deference to the district court's legal conclusions and consider whether the court correctly decided that no genuine issue of material fact existed." Far West Bank v. Robertson , 2017 UT App 213, ¶ 15, 406 P.3d 1134 (cleaned up).

¶9 Third, InBalance asserts it is entitled to attorney fees and costs on appeal. "Whether attorney fees are recoverable in an action is a question of law." Tronson v. Eagar , 2019 UT App 212, ¶ 15, 457 P.3d 407 (cleaned up). "When a party who received attorney fees below prevails on appeal, the party is also entitled to fees reasonably incurred on appeal." Telegraph Tower LLC v. Century Mortgage LLC , 2016 UT App 102, ¶ 52, 376 P.3d 333 (cleaned up). And we determine the award of costs on appeal in the first instance. See Utah R. App. P. 34(a).

ANALYSIS

I. Motion to Extend Time for Expert Disclosure

¶10 InBalance contends that the district court erred by denying its motion to extend time for expert disclosure, asserting it established excusable neglect under rule 6(b)(1)(B) of the Utah Rules of Civil Procedure. InBalance suggests the court's order warrants reversal given the lack of findings to support the court's bare written order. However, in the reply brief, InBalance acknowledges that the court made findings during the hearing on the motion and further admits that it failed to include a transcript of the hearing in the record on appeal.

¶11 Under the Utah Rules of Appellate Procedure, "[i]f the appellant intends to urge on appeal that a finding or conclusion is unsupported by or is contrary to the evidence, the appellant shall include in the record a transcript of all evidence relevant to such finding or conclusion." Utah R. App. P. 11(e)(2) ; see id. R. 11(c). This is so that an appellant can meet the obligation to "explain, with reasoned analysis supported by citations to legal authority and the record, why the party should prevail on appeal." Id. R. 24(a)(8).

¶12 In the absence of the hearing transcript containing the district court's findings, InBalance encourages this court to reconsider the issue essentially de novo, asserting that "the allegations and arguments relied upon by the parties are in the record." But such an undertaking is inappropriate under our standard of review for abuse of discretion. Because InBalance has not provided this court with the tools necessary to determine whether the district court had a reasonable basis for its decision to deny the motion, its "claim of error is merely an unsupported, unilateral allegation which we cannot resolve." Horton v. Gem State Mutual of Utah , 794 P.2d 847, 849 (Utah Ct. App. 1990) (cleaned up); see also Lamar v. Lamar , 2012 UT App 326, ¶ 5, 292 P.3d 86 (per curiam) (holding appellant could not demonstrate district court abused its discretion in its alimony award because appellant had not included a transcript of the hearing containing court's findings on appellee's financial need and earning capacity). Without the hearing transcript, we presume that the court's findings provided it with a reasonable basis for its decision, see Hoffer v. Hoffer , 2013 UT App 203, ¶ 3, 309 P.3d 277 (per curium) ("In the absence of the transcript on appeal, this court presumes the regularity of the proceedings below."), and we therefore cannot conclude that the court abused its discretion in denying InBalance's motion to extend the time for expert disclosure.

II. Cross-Motions for Summary Judgment

¶13 InBalance next argues that the district court erred by denying its motion for summary judgment, in which it sought dismissal of R4's claims due to R4's lack of licensure, and by granting R4's motion for summary judgment on its own claims as well as on InBalance's counterclaims. We address each contention in turn.

A. InBalance's Motion for Summary Judgment

¶14 InBalance contends the district court erred in denying its cross-motion for summary judgment seeking to dismiss R4's claims for R4's failure to comply with the requirements of Utah Code section 58-55-604. The district court denied InBalance's motion because it concluded that InBalance's argument constituted an affirmative defense that was waived when InBalance did not raise it in answer to R4's complaint. The court's conclusion that InBalance waived the defense allowed the court to enter judgment for R4—otherwise R4 would have had the burden of overcoming the restrictions of section 58-55-604. We hold that the district court incorrectly denied InBalance's motion and incorrectly granted summary judgment in favor of R4 on its affirmative claims.¹

¶15 Section 58-55-604 provides,

A contractor ... may not ... commence or maintain any action in any court of the state for collection of compensation for performing any act for which a license is required by this chapter without alleging and proving that the licensed contractor ... was appropriately licensed when the contract sued upon was entered into, and when the alleged cause of action arose.

Utah Code Ann. § 58-55-604 (LexisNexis 2016). Before the district court, InBalance presented evidence that R4 was unlicensed at the time it entered into the contract with InBalance, although R4 obtained its license a few weeks later while work under the contract was still occurring.

¶16 On appeal, InBalance contends that the licensure statute deprives a claimant of the legal capacity to sue unless it was licensed, as specified, and further claims that the issue constitutes both a prerequisite to commencing an action and a substantive requirement for pleading and proving a claim, and it can therefore be raised any time before or during...