Wilson v. Boldt
| Decision Date | 19 May 2022 |
| Docket Number | 20200762-CA |
| Citation | 511 P.3d 1247 |
| Parties | LeAnn WILSON and Mark Wilson, Appellees, v. Nancy BOLDT, Appellant. |
| Court | Utah Court of Appeals |
Douglas P. Farr, Katherine R. Nichols, Dillon P. Olson, Ben T. Welch, and Annika L. Jones, Salt Lake City, Attorneys for Appellant
Joseph C. Rust, Salt Lake City, Attorney for Appellees
Opinion
¶1 Nancy Boldt signed a commercial lease agreement for a property managed by LeAnn and Mark Wilson. At the time the lease was signed, Boldt served as the executive director of a nonprofit organization. When the rent went unpaid, the Wilsons brought an action seeking damages. On summary judgment, the district court rejected Boldt's contention that she signed the lease only as a representative of the nonprofit, and it determined that Boldt was personally liable for any amounts owing under the lease. Boldt now appeals, and we affirm.
¶2 Mark2 owns a commercial property (the Property) in American Fork, Utah, which he manages together with LeAnn. In July 2016, LeAnn signed a three-year lease (the Lease) for the Property. Boldt is the other signer of the Lease. At the time, Boldt was the executive director of a nonprofit organization, Canary Garden Center for Grieving Children and Families (Canary Garden).
¶3 In the introductory paragraph of the Lease, the named lessor is identified in the space provided as "Mark or LeAnn Wilson." The named lessee is identified as "Nancy Boldt/Canary Garden Center for Grieving." At the bottom of the document, the Lease provides signature lines next to pre-printed terms "Lessor" and "Lessee." Those signature lines are filled out with hand-printed names followed by signatures as follows:
On the same day the Lease was signed, a Rental/Credit Application (the Application) was executed. The named applicant is "Nancy Boldt/Canary Garden Center for Grieving Children & Families." Boldt's personal information, including her address and email, is included in the Application. But the banking information, which is purported to be Canary Garden's, is crossed out.
¶4 It was understood that Canary Garden would occupy the Property. Further, all payments received under the Lease were paid from Canary Garden's bank account.
¶5 During Canary Garden's occupation of the Property, American Fork City brought a misdemeanor charge against Boldt for operating without a business license. The charge was ultimately dismissed, but during its pendency Canary Garden was unable to raise funds. Canary Garden then had difficulty making timely rent payments to the Wilsons.
¶6 Canary Garden expired as a nonprofit corporation in 2015 for failure to register, meaning that it was not properly registered at the time the Lease was signed. It re-registered in 2018 and was given a new registration number.
¶7 The Wilsons eventually served a three-day notice to vacate after the nonpayment of rent. The Property was vacated in August 2019. The Wilsons then brought the current action against Boldt and Canary Garden, seeking money damages.
¶8 The Wilsons moved for partial summary judgment, arguing that the district court should conclude as a matter of law that Boldt, in her individual capacity, breached the Lease and that the Wilsons were entitled to a judgment against her. They argued that because Boldt signed the Lease without indicating that she was acting for a principal, she was personally liable on the Lease. They also asserted that given Canary Garden's lapsed registration, Canary Garden legally could not have entered the Lease in July 2016.
¶9 Boldt opposed summary judgment by arguing that the plain language of the Lease unambiguously established that Canary Garden—and not Boldt personally—was party to the Lease. According to Boldt, "Canary Garden was listed as the Lessee" and is therefore solely liable under it. Boldt alternatively asserted, based on the Wilsons’ contrary position, that the Lease was "ambiguous at the very least" and that parol evidence would confirm that the Wilsons entered the Lease with Canary Garden.
¶10 The district court agreed with the Wilsons that when Boldt signed the Lease, she did so individually and was thereby personally liable. The court reasoned that the signature line on the Lease does not refer to Canary Garden; instead, only Boldt's printed name is included where the Lease provides a signature line for the lessee. Boldt's signature then appears next to her printed name, "without any suggestion that she is signing as an agent or representative of any company." The court observed that the only reference to Canary Garden is in the Lease's introductory paragraph in the space provided to fill in the name of the lessee. And in that space, Boldt's name also appears there, "in equal footing with Canary Garden." But the lone reference to Canary Garden does not create any ambiguity. The court thus concluded that while Canary Garden and Boldt are both named on the Lease, "Boldt is the only party who signed, and she signed as an individual." Accordingly, the court saw no reason to depart from "the long-held rule that ‘individuals who fail to limit their signatures to their corporate capacity [are] ... held to be directly liable on corporate instruments.’ " (Cleaned up) (quoting DBL Distrib., Inc. v. 1 Cache, LLC , 2006 UT App 400, ¶ 13, 147 P.3d 478 ).
¶11 After the district court issued its ruling and order on the Wilsons’ motion for partial summary judgment, the parties stipulated to the entry of judgment against Boldt.3 The court therefore entered judgment against Boldt in the amount of $60,000, which included all incurred costs, expenses, and attorney fees. The judgment provided that it could "be augmented by the reasonable costs and attorney fees incurred in the subsequent collection of said judgment." Boldt now appeals.
¶12 Boldt challenges the district court's grant of summary judgment to the Wilsons, arguing that the court erred in holding her personally liable under the Lease. Summary judgment is appropriate "if the moving party shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." Utah R. Civ. P. 56(a). "We review a district court's grant of summary judgment, as well as the court's interpretation of contracts upon which the summary judgment was based, for correctness." Desert Mountain Gold LLC v. Amnor Energy Corp. , 2017 UT App 218, ¶ 11, 409 P.3d 74 (cleaned up).
¶13 Boldt contends that the district court erroneously concluded as a matter of law that she signed the Lease in her individual capacity. Pointing to the identification of the lessee as "Nancy Boldt/Canary Garden Center for Grieving" in the Lease's introductory paragraph, Boldt argues that "the plain language [of the Lease] affirmatively establishes that Canary Garden was the Lessee, and Ms. Boldt was merely acting as agent to that principal." In Boldt's view, the Lease identifies Canary Garden as the lessee, and the Lease's signature line does not "clearly indicate Ms. Boldt assumed liability personally." (Cleaned up.) Additionally, Boldt argues on appeal that the district court "improperly refused to consider extrinsic evidence."
¶14 The district court correctly recognized that under Utah law, "[i]ndividuals who fail to limit their signatures to their corporate capacity have consistently been held to be directly liable on corporate instruments." DBL Distrib., Inc. v. 1 Cache, LLC , 2006 UT App 400, ¶ 13, 147 P.3d 478 (collecting cases).4 Thus, "[t]o relieve an individual signer from liability, the signer's corporate capacity must be clear from the form of signature." Id. ; see also Boise Cascade Corp. v. Stonewood Dev. Corp. , 655 P.2d 668, 668 n.1 (Utah 1982) (per curiam) ().
¶15 The Utah Supreme Court's decision in Anderson v. Gardner , 647 P.2d 3 (Utah 1982), is instructive. Indeed, the facts of that case are strikingly similar to those of the case at hand. There, the defendant, Jay Gardner, was the general manager of radio station KMOR. Id. at 3. Gardner signed two contracts with a performer, and when two checks were not honored for payment, the performer sued Gardner for the unpaid balance. Id. at 3–4. The printed contracts identified the parties as "the undersigned employer" and "musicians." Id. at 4 (cleaned up). "The ‘employer’ was identified by name only on the signature line," which appeared as follows:
Id. The supreme court determined that the contracts were signed by Gardner personally. Id. It acknowledged that KMOR RADIO followed Gardner's name on the line marked "Employer's name," and that "[c]onsidered in isolation," those words could "signify[ ] an entity that was co-obligor or sole obligor" or they could "merely identify[ ] [Gardner's] affiliation or location." Id. The court also noted the unchallenged finding that KMOR RADIO "was not a corporation or a registered dba." Id.
¶16 "[T]he key fact," however, was that in context the "signature of employer" was "that of [Gardner] alone, without any indication that he [was] signing for any other party or in any other capacity than for himself." Id. (cleaned up). The Anderson court thus concluded that "[Gardner's] personal liability follow[ed] from that unqualified signature." Id.
¶17 We conclude that the district court got this case right. Despite the Lease's introductory paragraph identifying "Nancy Boldt/Canary Garden Center for Grieving" as lessee, the key fact here is that Boldt is identified as the sole lessee on the signature line of the Lease, and "[h]er signature appears next to her printed name, without any suggestion that she is...
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