Westmont Mirador LLC v. Shurtliff

• Decision Date: 07 August 2014
• Docket Number: No. 20130213–CA.,20130213–CA.
• Citation: 766 Utah Adv. Rep. 19,333 P.3d 369
• Court: Utah Court of Appeals
• Parties: WESTMONT MIRADOR LLC, Plaintiff, Appellant, and Cross-appellee, v. Matthew SHURTLIFF, Whitney Shurtliff, and Sydnie Shurtliff, Defendants, Appellees, and Cross-appellants.

333 P.3d 369

766 Utah Adv. Rep. 19

WESTMONT MIRADOR LLC, Plaintiff, Appellant, and Cross-appellee,

v.Matthew SHURTLIFF, Whitney Shurtliff, and Sydnie Shurtliff, Defendants, Appellees, and Cross-appellants.

No. 20130213–CA.

Court of Appeals of Utah.

Aug. 7, 2014.

Charles A. Schultz, Attorney for Appellant and Cross-appellee.

Dwayne A. Vance, Attorney for Appellees and Cross-appellants.

Senior Judge PAMELA T. GREENWOOD authored this Opinion, in which Judge GREGORY K. ORME and Senior Judge RUSSELL W. BENCH concurred.¹

Opinion

GREENWOOD, Senior Judge:

¶ 1 Westmont Mirador LLC (Westmont), Matthew and Whitney Shurtliff (the Shurtliffs), and Sydnie Shurtliff (Sydnie) raise several arguments on appeal arising from the trial court's decision on a disputed residential rental agreement. We affirm.

BACKGROUND

¶ 2 The Shurtliffs, as renters, signed a uniform residential rental agreement with Westmont, as landlord, on August 6, 2009, that expired by its own terms on August 31, 2010 (the August agreement). In conjunction with the August agreement, the Shurtliffs paid Westmont a $300 deposit, $150 of which was nonrefundable. They paid Westmont an additional $200 nonrefundable pet fee on October 19, 2009, when they got a dog. The Shurtliffs paid rent through August 31, 2010, and moved out sometime before that date.

¶ 3 Westmont filed a lawsuit against the Shurtliffs and Sydnie, in her capacity as the Shurtliffs' guarantor, based on its contention that the Shurtliffs signed a new uniform residential rental agreement on October 19, 2009, when they submitted their $200 pet fee, and that the October agreement extended the term of their lease through November 30, 2010 (the October agreement). Westmont produced a document that it claims is a copy of the October agreement, bearing the Shurtliffs' signatures. The Shurtliffs denied ever signing this agreement and disavowed the authenticity of the signatures on the document.

¶ 4 Westmont's claims against the Shurtliffs totaled $1,212.14 for breach of the October agreement. It sought reimbursement for $181.92 in lost rent, $650 for repayment of a rent special that the Shurtliffs' breach disqualified them for, $150 for the cost of re-renting the unit, $300 for damages to the unit, and $80.22 for unpaid utilities, minus the $150 refundable portion of the Shurtliffs' initial security deposit.

¶ 5 The trial court made “no finding as to whether or not the October [agreement] was a forgery or a valid contract” but noted “that there is no evidence that Westmont, or [anyone] representing Westmont either forged the October [agreement], or had any motivation to do so.” At the same time, the court declined to find that the Shurtliffs signed the October agreement and denied Westmont's claims for damages based on a breach of the October agreement. The court adjudicated the rights of the parties with reference to the August agreement and awarded Westmont $300 for damages done to the unit during the Shurtliffs' tenancy, $80.22 for the unpaid utilities, and $160 for costs incurred in litigating the case. The trial court applied the $150 refundable portion of the Shurtliffs' security deposit toward the judgment, bringing the total judgment to $390.22. The trial court recognized that the August agreement “specifically provides for the award of attorneys fees to the prevailing party” but declined to award any based on its determination that “[n]either side prevailed completely.” Westmont appeals the trial court's ruling, and the Shurtliffs and Sydnie cross-appeal.

ISSUES AND STANDARDS OF REVIEW

¶ 6 Westmont, the Shurtliffs, and Sydnie challenge the trial court's refusal to award attorney fees, each asserting a claim for attorney fees under the August agreement as the prevailing party. A trial court's determination of which party, if any, is the prevailing party entitled to attorney fees under a contract “is a decision left to the sound discretion of the trial court and reviewed for an abuse of discretion.” Giles v. Mineral Res. Int'l, Inc., 2014 UT App 37, ¶ 9, 320 P.3d 684 (citation and internal quotation marks omitted); see also Neff v. Neff, 2011 UT 6, ¶ 48, 247 P.3d 380.

¶ 7 Next, Westmont challenges the trial court's failure to find that the Shurtliffs signed the October agreement. “Failure of the trial court to make findings on all material issues is reversible error.” Hill v. Estate of Allred, 2009 UT 28, ¶ 59, 216 P.3d 929 (citation and internal quotation marks omitted). However, “[i]t is sufficient if from the findings [the trial court] makes there can be no reasonable inference other than that it must have found against such allegations.” Id. (citation and internal quotation marks omitted).

¶ 8 Last, Westmont contends that the trial court erred by refusing to impose rule 11 sanctions against Sydnie and her attorney for filing an untimely motion to alter or amend the judgment. “In reviewing a trial court's determination of whether a rule 11 violation has occurred, we apply different standards of review to different aspects of that determination. Findings of fact are reviewed under a clear error standard, while conclusions of law are reviewed for correctness.” Archuleta v. Galetka, 2008 UT 76, ¶ 6, 197 P.3d 650.

¶ 9 On cross-appeal, in addition to their claim for attorney fees, the Shurtliffs argue that the trial court erred by failing to apply the nonrefundable portion of their security deposit toward the damages the trial court awarded Westmont. “If a contract is unambiguous, a trial court may interpret the contract as a matter of law, and we review the court's interpretation for correctness.” Sharon Steel Corp. v. Aetna Cas. & Sur. Co., 931 P.2d 127, 134 (Utah 1997) (citation and internal quotation marks omitted).

ANALYSIS

I. Attorney Fees

¶ 10 “In Utah, attorney fees are awardable only if authorized by statute or contract.” R.T. Nielson Co. v. Cook, 2002 UT 11, ¶ 17, 40 P.3d 1119 (citation and internal quotation marks omitted). Here, the August agreement contains an attorney fees provision that states, in relevant part,

If legal action is taken by either party to enforce this agreement, or to enforce any rights arising out of the breach of this agreement ..., the prevailing party shall be entitled to all costs incurred in connection with such action, including a reasonable attorney's fee, court costs, filing fees, interest, and collection costs, with or without suit.

Both Westmont and the Shurtliffs assert that they were the prevailing party as to their claims against each other and that they are accordingly entitled to an award of fees under the August agreement. Sydnie asserts that she prevailed on Westmont's claim against her and is therefore also entitled to attorney fees under the August agreement.

A. Westmont's and the Shurtliffs' Claims for Attorney Fees

¶ 11 Identification of which party prevailed, for purposes of awarding attorney fees, may not be “manifestly obvious,” in which case, “when interpreting contractual ‘prevailing party’ language, a court should employ a flexible and reasoned approach” that allows room for common sense to guide a court's decision. Giles v. Mineral Res. Int'l, Inc., 2014 UT App 37, ¶ 10, 320 P.3d 684 (citations and internal quotation marks omitted). A court “should take into consideration the significance of the net judgment in the case and the amounts actually sought[,] ... balanc[ed] ... proportionally with what was recovered.” Id. (alterations and omissions in original) (citation and internal quotation marks omitted). Other factors a trial court may consider in identifying a prevailing party include,

(1) contractual language, (2) the number of claims, counterclaims, cross-claims, etc., brought by the parties, (3) the importance of the claims relative to each other and their significance in the context of the lawsuit considered as a whole, and (4) the dollar amounts attached to and awarded in connection with the various claims.

R.T. Nielson, 2002 UT 11, ¶ 25, 40 P.3d 1119. A trial court may also appropriately conclude that a case is a draw “where both parties obtain mixed results” and in those cases, it may decline to award attorney fees entirely, regardless of applicable statutory or contractual language entitling a prevailing party to fees. Neff v. Neff, 2011 UT 6, ¶ 70, 247 P.3d 380; see also A.K. & R. Whipple Plumbing & Heating v. Guy, 2004 UT 47, ¶ 22, 94 P.3d 270.

¶ 12 Here, the trial court declined to award attorney fees to either Westmont or the Shurtliffs because “[n]either side prevailed completely” and the issues on which it awarded damages to Westmont were “only remotely related to the enforcement of the lease agreement.” The court stated, “To be candid, this case should have remained in the Small Claim's Court. The attorney's fees incurred in this case, by both parties, are disproportionate to the net award.” And “prior to trial, the Court advised both counsel that the attorney's fees being incurred were disproportional to any amount that the Court would award either party should they prevail.” Both parties accepted that risk, explaining that they were interested in resolving “issues of principle.”

¶ 13 Ultimately, the court awarded Westmont less than one-third of the damages it requested, and the amounts awarded had nothing to do with the issue at the heart of its case—the validity of the October agreement. Westmont explained that its primary goal at trial was to disprove “libelous statements” that Westmont had forged the Shurtliffs' signatures on the October agreement. Because the damages awarded were unrelated to Westmont's primary theory at trial, the trial court could reasonably conclude that Westmont did not prevail and was not entitled to prevailing party attorney fees.² Likewise, the Shurtliffs did not prevail on their cross-claim that the entire $300 security deposit and the $200 pet fee should be used to satisfy Westmont's damages award and that Westmont should be ordered to refund the Shurtliffs $109.78 as the...