Lebrecht v. Deep Blue Pools & Spas Inc.

2016 UT App 110

THE UTAH COURT OF APPEALS

BRIAN LEBRECHT AND ELIZABETH LEBRECHT,

Appellees,

v.

DEEP BLUE POOLS AND SPAS INC.

AND ANTHONY FINDLEY,

Appellants.

Opinion

No. 20140536-CA

Filed May 26, 2016

Third District Court, Salt Lake Department

The Honorable Paul B. Parker

No. 130900973

Marcus R. Mumford, Joshua S. Ostler, and Michelle

Q. Mumford, Attorneys for Appellants

Edwin C. Barnes and Robert D. Andreasen,

Attorneys for Appellees

JUDGE KATE A. TOOMEY authored this Opinion, in which JUDGE

STEPHEN L. ROTH and SENIOR JUDGE RUSSELL W. BENCH

concurred.1

TOOMEY, Judge:

¶1 This case involves a dispute between property owners

and the contractor they hired to install a pool and other outdoor

features in their backyard. There are two main issues on appeal.

First, we must decide whether the trial court correctly

determined that the parties entered into an enforceable

settlement agreement. And second, we must determine whether

1. Senior Judge Russell W. Bench sat by special assignment as

authorized by law. See generally Utah R. Jud. Admin. 11-201(6).

Lebrecht v. Deep Blue Pools & Spas

the court erred when it declined to sanction the plaintiffs and

their lawyer for dishonesty. We affirm the court’s decision not to

impose sanctions but reverse its ruling that the parties’

negotiations were an enforceable settlement agreement.

BACKGROUND

¶2 In February 2013, Brian and Elizabeth Lebrecht filed a

lawsuit against Deep Blue Pools and Spas Inc. and its owner,

Anthony Findley (collectively, Deep Blue Pools). Their complaint

alleged that Deep Blue Pools failed to construct their swimming

pool, built-in barbeque pit, concrete decking, and waterfall in a

‚workmanlike‛ manner. Deep Blue Pools answered the

Lebrechts’ complaint and filed a counterclaim, alleging the

Lebrechts did not fully pay for the work performed on their

property.

¶3 After nearly a year of litigation, including discovery, the

parties met twice to negotiate a settlement. Although Mr.

Lebrecht himself is a transactional attorney, neither party had

attorneys present during these meetings. During the second

meeting, Mr. Lebrecht and Mr. Findley each initialed or signed a

handwritten paper,2 dated February 18, 2014, which included

information material to the parties’ purported settlement (the

Term Sheet). The terms began with the number $125,000 crossed

out and the number $112,500 written above it. Next, among

other terms, the Term Sheet stated, ‚$20,000 on signing

settlement,‛ ‚payable . . . $56,250 in 6 mo.,‛ and ‚remaining . . .

balance due in 12 mo[.], earn 10% interest beginning in 6 mo.‛ It

also indicated that the parties were negotiating for mutual

confidentiality agreements and would tell the Utah Division of

Occupational and Professional Licensing that they had ‚settled

2. Mr. Lebrecht initialed or signed on behalf of both Lebrechts.

Mr. Findley signed on behalf of Deep Blue Pools.

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amicably.‛ Finally, the Term Sheet indicated that Deep Blue

Pools would ‚drop *the+ counter claim.‛ At the close of the

February 18 negotiations, Mr. Lebrecht told Mr. Findley he

would have his attorney ‚get *the settlement agreement+ ready

as soon as possible.‛

¶4 The next day, after Mr. Findley met with his attorney

regarding the settlement negotiations and terms, his attorney

emailed the Lebrechts’ attorney and stated, ‚Mr. Findley feels

very misled by the Lebrechts. And he does not wish to enter into

any further discussions without counsel present.‛ The Lebrechts’

attorney responded,

As you are aware, the parties reached a settlement

yesterday. Indeed, my understanding is that [Mr.

Findley] was speaking with you immediately

before [he] and the Lebrechts reduced the terms of

that agreement to writing, which they then both

signed. Utah law is clear that such agreements will

be enforced and I will be filing the appropriate

motion to enforce with the Court.

¶5 One week later, the Lebrechts moved the trial court to

enforce the parties’ purported settlement agreement, stating that

they ‚succeeded in coming to a meeting of the minds on the

terms of a settlement.‛ In support of their motion, the Lebrechts

attached to their memorandum a copy of the Term Sheet, a

declaration from their attorney, and a declaration from Mr.

Lebrecht. In his declaration, Mr. Lebrecht stated, ‚[M]y wife and

I reached a settlement with Mr. Findley that we put into writing

with both me and Mr. Findley drafting parts of the document.‛

He added, ‚The Agreement was signed by both parties. I wrote

several of the main points . . . , and Mr. Findley directly

participated in the drafting by writing a term as well.‛

¶6 Deep Blue Pools opposed the Lebrechts’ motion, arguing

that it was deceptive and false. More importantly, Deep Blue

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Lebrecht v. Deep Blue Pools & Spas

Pools revealed that Mr. Findley had recorded the February 18

meeting, and argued that the recording demonstrated that Mr.

Lebrecht had assured him the Term Sheet was ‚not binding‛ and

had threatened him and his company. In its memorandum in

opposition to the motion, Deep Blue Pools included a transcript

of the meeting, and argued that an enforceable settlement

agreement was never reached because the parties did not intend

to be bound by the Term Sheet and the purported agreement

was the result of undue influence and fraud. Deep Blue Pools

also asked the court to sanction the Lebrechts and their attorney

for dishonesty.

¶7 During an evidentiary hearing on the Lebrechts’ motion,

the Lebrechts and Mr. Findley each testified about their

negotiations and the trial court received into evidence a copy of

the transcript of the recording of the February 18 meeting. At the

end of the hearing, the court expressed three specific concerns. It

pointed out that ‚the Lebrechts almost seemed to be in an unfair

advantage at least at the start, they seemed to do all the talking,

Mr. Findley kind of respond[ed] in short one-word sentences.‛

Next, it expressed concern about ‚the tenor of the language in

the confrontation between Mr. Lebrecht and Mr. Findley.‛

Finally, the court was concerned about Mr. Lebrecht’s

assurances that the Term Sheet was ‚not binding.‛

¶8 After expressing these concerns, the court nevertheless

determined that the parties had reached an enforceable

settlement agreement. The court found it particularly relevant

that Mr. Lebrecht’s statements that the Term Sheet was not

binding occur in ‚the middle‛ of the transcript, after which the

parties’ negotiations continued. The court stated it was also

persuaded by Mr. Findley’s expression at the end of the

negotiations of his desire to settle the matter. In particular, the

court noted that Mr. Findley ‚seems to stand up for himself, he

negotiates . . . , [and] indicates several times that it was in his

best interest to get on with this . . . that he would like to settle the

matter.‛ The court also pointed out that at the end of

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Lebrecht v. Deep Blue Pools & Spas

negotiations, Mr. Findley read and agreed that the terms and

conditions listed on the Term Sheet were accurate. It stated,

‚[T]hey end up shaking hands. They affirm, not just in the points

[at the end] but the various parts of the transcription, that that is

in fact, the agreement.‛ Consequently, the court concluded,

The issue . . . is whether or not one can take the

terms and conditions as they are found on that

piece of paper and in the transcription and enforce

it against either of the parties. I am convinced that

it can, that consideration . . . was given on both

sides for the agreement. I’ll therefore find that [the

Term Sheet] is binding.

The court further stated,

I find that the parties settled. I find that the terms

are enough that they came from meeting of the

minds and agreed on the terms. . . . I believe the

term settlement agreement is enforceable and valid

and binding as it sits now. It was orally agreed

upon, it was agreed upon in writing, that’s enough

to enforce it.

¶9 Deep Blue Pools appeals.

ANALYSIS

I. The Parties Did Not Create an Enforceable Settlement

Agreement

¶10 ‚It is a basic rule that the law favors the settlement of

disputes.‛ Mascaro v. Davis, 741 P.2d 938, 942 (Utah 1987). In

general, a trial court’s ‚enforcement of a settlement agreement

will not be reversed on appeal unless it is shown that there was

an abuse of discretion.‛ John Deere Co. v. A & H Equip., Inc., 876

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Lebrecht v. Deep Blue Pools & Spas

P.2d 880, 883 (Utah Ct. App. 1994) (citation and internal

quotation marks omitted). But ‚basic contract principles affect

the determination of when a settlement agreement should be so

enforced.‛ Mascaro, 741 P.2d at 942. ‚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.‛ Zions First Nat’l

Bank, N.A. v. National Am. Title Ins. Co., 749 P.2d 651, 653 (Utah

1988). ‚Factual findings, on the other hand, are upheld ‘unless

clearly erroneous, and due regard shall be given to the

opportunity of the trial court to judge the credibility of the

witnesses.’‛ Id. (quoting Utah R. Civ. P. 52(a)). Here, based on its

order and oral ruling, the court’s determination rested on a

review of the February 18 negotiation transcript and the Term

Sheet.3 ‚A trial court’s finding about whether a party accepted

an offer or counteroffer is a finding of fact,‛ usually reviewed for

clear error. Cal Wadsworth Constr. v. City of St. George, 898 P.2d

1372, 1378 (Utah 1995). But because we are in as good a position

as the trial court to examine the transcript of the negotiation and

the plain language of the Term Sheet, we owe the trial court no

deference in that regard. Cf. State v. Arriaga-Luna, 2013 UT 56,

¶ 8, 311 P.3d 1028 (providing no deference to the district court’s

conclusion that a confession was coerced because it ‚was based

entirely on its review of the interrogation transcripts‛).

¶11 On appeal, Deep Blue Pools argues the trial court erred

when it concluded the parties had a meeting of the minds and

the Term Sheet was an enforceable settlement agreement.

Specifically, it contends the transcript and the Term Sheet

3. The trial court heard testimony regarding the February 18

negotiations. But the court’s ruling regarding whether a

settlement agreement existed was based only on the

documentary evidence; it refers only to the transcript and Term

Sheet, makes no credibility determinations, and does not draw

on the testimony at the evidentiary hearing.

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demonstrate the parties had a mutual understanding that ‚‘a

binding contract would not be entered until some point in the

future.’‛ (Quoting Sackler v. Savin, 897 P.2d 1217, 1221 (Utah

1995).) It also argues the Lebrechts did not meet their burden to

demonstrate the parties had ‚‘proceeded beyond preliminary

negotiations for a settlement agreement’‛ because they each

reserved the right to consult their attorneys regarding several of

the terms. (Quoting id. at 1222.)

¶12 The Lebrechts contend the court correctly determined the

parties had reached a binding settlement agreement because

they ‚bargained to resolve their dispute and set forth the

essential terms of their resolution in the *Term Sheet+.‛

Specifically, they argue the transcript ‚establishes that the

parties agreed on every term in the [Term Sheet] without

reservation.‛ More importantly, the Lebrechts argue that the fact

that ‚the parties intended to incorporate those terms into a final

form of agreement does not invalidate their settlement,‛ because

neither side expressly conditioned its ‚assent on a consultation

with counsel.‛ Rather, they argue, the essential terms were

agreed upon and only left the exact contours of the settlement

provisions to be reviewed by counsel.

¶13 Under the principles of basic contract law, ‚a contract is

not formed unless there is a meeting of the minds.‛ Sackler, 897

P.2d at 1220. The parties’ intentions are controlling. WebBank v.

American Gen. Annuity Serv. Corp., 2002 UT 88, ¶ 17, 54 P.3d 1139.

Two elements, among others, are necessary to form an

enforceable contract: (1) an offer and (2) an acceptance. 1-800

Contacts, Inc. v. Weigner, 2005 UT App 523, ¶ 2, 127 P.3d 1241.

‚An offer is a ‘manifestation of willingness to enter into a

bargain, so made as to justify another person in understanding

that his assent to the bargain is invited and will conclude it.’‛ Id.

(quoting Engineering Assocs., Inc. v. Irving Place Assocs., Inc., 622

P.2d 784, 787 (Utah 1980)). ‚For an offer to be one that would

create a valid and binding contract, its terms must be definite

and unambiguous.‛ DCM Inv. Corp. v. Pinecrest Inv. Co., 2001 UT

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Lebrecht v. Deep Blue Pools & Spas

91, ¶ 12, 34 P.3d 785. ‚An acceptance must unconditionally

assent to all material terms presented in the offer, including price

and method of performance, or it is a rejection of the offer.‛ Cal

Wadsworth Constr., 898 P.2d at 1376. Thus, a conditional

acceptance or a ‚proposal of different terms from those of the

offer constitutes a counteroffer, and no contract arises.‛ Id. at

1378. The proponent of the contract ‚has the burden of showing

that an offer and acceptance were more probable than not.‛

Sackler, 897 P.2d at 1222.

¶14 ‚‘In determining whether the parties created an

enforceable contract, a court should consider all preliminary

negotiations, offers, and counteroffers and interpret the various

expressions of the parties for the purpose of deciding whether

the parties reached agreement on complete and definite terms.’‛

1-800 Contacts, Inc., 2005 UT App 523, ¶ 4 (quoting Nunley v.

Westates Casing Servs., Inc., 1999 UT 100, ¶ 22, 989 P.2d 1077).

Accordingly, we first ‚look to the writing itself to ascertain the

parties’ intentions.‛ WebBank, 2002 UT 88, ¶ 18 (citation and

internal quotation marks omitted). ‚If the language within the

four corners of the contract is unambiguous, the parties’

intentions are determined from the plain meaning of the

contractual language, and the contract may be interpreted as a

matter of law.‛ Id. ¶ 19 (citation and internal quotation marks

omitted). But ‚if the language of the contract is ambiguous such

that the intentions of the parties cannot be determined by the

plain language of the agreement, extrinsic evidence must be

looked to in order to determine the intentions of the parties.‛ Id.

(citation and internal quotation marks omitted). Thus, if a

settlement agreement is ambiguous, ‚the court may consider the

parties’ actions and performance as evidence of the parties’ true

intention.‛ Id.

¶15 The Term Sheet, which the trial court determined

memorialized an enforceable oral settlement agreement, is

ambiguous on its face. It consists of several bullet-point terms

and phrases that, without the assistance of extrinsic evidence,

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are vague or unclear. These terms lack specific identifying

information, including for which party each term applies. For

instance, the first term merely states, ‚$112,500‛ with the

number ‚125,000‛ crossed out below it. Nothing defines this

number—it could be a payment, a total price, or a cost. Another

example is the next term which states, ‚$20,000 on signing

settlement.‛ From the plain language alone, it is unclear who

must pay this amount on signing. Even looking at the Term

Sheet as a whole we are unable to identify the obligor. Because

of these ambiguities, extrinsic evidence is necessary to determine

whether there was a meeting of the minds regarding a

settlement agreement.

¶16 The transcript of the parties’ negotiations make this an

unusual case. It is apparent each party made offers to settle,

demonstrating and explicitly stating an interest in resolving their

dispute instead of proceeding to trial. Indeed, the parties

discussed the terms of a potential settlement agreement for

several hours. The Lebrechts first offered to settle the lawsuit in

exchange for $150,000. But Mr. Findley refused the offer, and

later counteroffered, explaining he would be willing to pay

$112,500 if he could pay it over twelve months. The parties even

negotiated a payment structure and also discussed at length

various conditions they each wanted, including a confidentiality

clause, an agreement that Mr. Findley would drop his

counterclaims, and an agreement that the Lebrechts would not

file a complaint regarding Mr. Findley’s business license with

the Division of Occupational and Professional Licensing. Our

review of the transcript suggests they agreed on many of the

essential terms and conditions, and at one point when Mr.

Lebrecht stated he thought they reached ‚the terms of the

settlement,‛ Mr. Findley agreed.

¶17 But each time the parties appeared to agree on a term,

they continued to negotiate other terms or conditions, sometimes

revisiting terms previously decided. For example, toward the

end of the negotiations, Mr. Findley stated he wanted to settle

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because he ‚just needed to be done‛ with the lawsuit, but

immediately after this, Mr. Lebrecht attempted to renegotiate the

payment from $112,500 to $125,000. Several pages later in the

transcript, the parties agreed to delay signing the settlement

agreement until it could be drafted and so that Mr. Findley could

discuss some of the terms with his attorney. This demonstrates

that both parties contemplated additional steps before the

agreement was complete and final.

¶18 The Restatement of Contracts states, with regard to

preliminary negotiations, that ‚*a+ manifestation of willingness

to enter into a bargain is not an offer if the person to whom it is

addressed knows or has reason to know that the person making

it does not intend to conclude a bargain until he has made a

further manifestation of assent.‛ Restatement (Second) of

Contracts § 26 (Am. Law Inst. 1981); accord Sackler v. Savin, 897

P.2d 1217, 1221 (Utah 1995). It also explains that the parties’

manifestation of ‚an intention to prepare and adopt a written‛

agreement ‚may show that the *parties’+ agreements are

preliminary negotiations,‛ rather than a contract. Restatement

(Second) of Contracts § 27. This makes sense considering

‚*p+arties who plan to make a final written instrument as the

expression of their contract, necessarily discuss the proposed

terms of the contract before they enter into it and often, before

the final writing is made, agree upon all the terms which they

plan to incorporate therein.‛ Id. § 27 cmt a. ‚‘[I]f an intention is

manifested in any way that legal obligations between the parties

shall be deferred until the writing is made, the preliminary

negotiations and agreements do not constitute a contract.’‛ 1-800

Contacts, Inc. v. Weigner, 2005 UT App 523, ¶ 7, 127 P.3d 1241

(alteration in original) (quoting R.J. Daum Constr. Co. v. Child, 247

P.2d 817, 820 (Utah 1952)).

¶19 Considering both the Term Sheet and the February 18

negotiation transcript as a whole, it is clear the parties expected

to be bound by a written agreement, not an oral one. Mr. Findley

stated that, considering Mr. Lebrecht is an attorney, he felt at a

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Lebrecht v. Deep Blue Pools & Spas

disadvantage in the negotiations. For example, near the

beginning of the transcript, Mr. Findley stated, ‚You know,

the—the benefit . . . you and [Mrs. Lebrecht] have is that you

know a little bit—you’re more versed in what’s going on in this

whole courtroom proceeding and everything else. . . . I try to

depend on an attorney to help me make the decisions that are

correct.‛ At several points, Mr. Findley said he did not

understand certain proposed terms. For example, with regard to

the Lebrechts’ term ‚confession of judgment with fraud,‛ he

stated, ‚I don’t understand what it is‛ and ‚again, I am not an

attorney.‛ Later, he stated, ‚I don’t even necessarily know what

the—the term ‘confession of judgment’ entails or what . . . but I

assume that when it gets written up . . . then [my attorney] and I

will have an opportunity to sit down and he can explain it

thoroughly.‛ Mr. Lebrecht responded, ‚Absolutely.‛ Indeed, Mr.

Findley later stated he thought they were ‚close to making this

arrangement‛ but he would have to review it with legal counsel

to make sure nothing was missing. Although Mr. Findley did

not explicitly state he conditioned his assent on consultation

with counsel, he plainly stated on several occasions that he

wanted to discuss the negotiated terms with his lawyer before

signing an agreement. Thus, Mr. Findley’s lack of understanding

and expression of his intention to meet with his attorney before

signing a written agreement leads us to believe he did not

unconditionally assent to all material terms discussed in the

parties’ negotiations.

¶20 The Lebrechts’ statements also demonstrate they were

negotiating for a written settlement agreement to be signed in

the future. Near the end of the negotiations, Mr. Findley

suggested they delay ‚a bit further in signing‛ so he could try to

negotiate a deal with his subcontractors. But Mr. Lebrecht

responded, ‚I don’t want to delay the signing of the settlement

agreement.‛ After proposing that their agreement include a

mutual confidentiality clause, Mr. Lebrecht stated, ‚[W]e’ll just

see what that looks like in writing.‛ Mr. Findley suggested that

his attorney may ‚have a way to propose it in wording.‛ Mrs.

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Lebrecht then asked, ‚So do you want it delayed by one week?‛

Mr. Findley replied, ‚Yeah, one week’s fine.‛

¶21 More than halfway through the negotiations, Mr. Findley

asked if his attorney needed to draft the settlement agreement,

but Mr. Lebrecht responded, ‚I’d probably like to have our guy

do it.‛ Then, Mr. Lebrecht asked Mr. Findley to initial the Term

Sheet, stating,

Not that it’s binding, but that way . . . I can give it

to [my] guy . . . . *W+e’ll make—get a copy made,

you give it to [your attorney], and . . . at least this is

what we agreed to as we left here. Obviously, it’s

not binding . . . .

Mr. Findley then asked, ‚[H]ow quick can your guy write it up?

I mean, . . . I can make it a point to go and meet with [my

attorney+ today.‛ Mr. Lebrecht responded that it could happen

within the week. Then, he stated, ‚And if we don’t sign the

settlement agreement, then we’re back where we are right now.

And that would give us a week to get it drafted, passed back and

forth, and executed.‛ After Mr. Findley acknowledged the

parties had reached some essential terms, Mr. Lebrecht stated

‚[T]hat’s part of the reason why we put this here and you can

kind of initial it. And then you give this to [your attorney], this is

what we agreed to, you know.‛

¶22 Contrary to his position on appeal, Mr. Lebrecht’s

statements during negotiations demonstrate he understood the

parties would not enter a binding agreement until sometime in

the future. See Sackler, 897 P.2d at 1221 (explaining that a party’s

expression of willingness to enter into a bargain is not an offer if

it is clear that the party does not intend to conclude a bargain

until he or she has made a further manifestation of assent).

Indeed, he assured Mr. Findley the Term Sheet was not binding.

‚Neither real nor apparent intention that a promise be legally

binding is essential to the formation of a contract, but a

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manifestation of intention that a promise shall not affect legal

relations may prevent the formation of a contract.‛ Restatement

(Second) of Contracts § 21. Mr. Lebrecht also acknowledged that

he understood there would be further negotiations, or a ‚back

and forth‛ of the written settlement agreement, until it was

executed later that week.

¶23 Although the parties may have agreed on some of the

essential terms of their settlement, these agreements are not

dispositive. Where it is apparent from their negotiations ‚‘that

the determination of certain details is deferred until the writing

is made out’‛ or ‚‘if an intention is manifested in any way that

legal obligations between the parties shall be deferred until the

writing is made, the preliminary negotiations and agreements do

not constitute a contract.’‛ R.J. Daum Constr. Co. v. Child, 247 P.2d

817, 820 (Utah 1952) (quoting Restatement (First) of Contracts

§ 26 cmt. a (Am. Law Inst. 1932)). As discussed above, the parties

agreed to defer certain terms, such as a confidentiality clause,

until an agreement was drafted. Mr. Lebrecht assured Mr.

Findley the Term Sheet was not binding and acknowledged that

Mr. Findley wanted to have his attorney review some of the

terms before executing a settlement agreement. At no point did

either party definitely agree their dispute was settled; rather,

they made clear their intention to enter into a written settlement

agreement in the future. Thus, the parties did not merely intend

to memorialize an oral contract but planned to defer their legal

obligations until the settlement was drafted. Furthermore, even

if the Lebrechts manifested an intention to be bound by the

parties’ oral agreements, they have failed to meet the burden of

showing that Mr. Findley’s acceptance of the terms reached in

their preliminary negotiations was more probable than not. See

Sackler v. Savin, 897 P.2d 1217, 1222 (Utah 1995). Because these

were merely preliminary negotiations regarding terms of a

future settlement agreement, the parties did not create an

enforceable contract.

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II. The Lebrechts’ Motions and Conduct Do Not Warrant

Sanctions

¶24 Deep Blue Pools argues the trial court erred in denying its

motion to sanction Mr. Lebrecht for making false statements. It

argues that Mr. Lebrecht’s sworn declaration was inconsistent

with his negotiations with Mr. Findley. Deep Blue Pools further

argues that the court erroneously ‚perceived the parties as being

on equal footing‛ because Mr. Lebrecht is an experienced

transactional lawyer. It also argues that Mr. Lebrecht’s

assurances that the Term Sheet was ‚not binding‛ conflict

directly with his declaration that the parties created a binding

settlement agreement.

¶25 Deep Blue Pools asked the court to sanction Mr. Lebrecht

and his attorney under rule 11 of the Utah Rules of Civil

Procedure.4 Rule 11 states, ‚By presenting a pleading, written

motion, or other paper to the court . . . , an attorney or

unrepresented party is certifying that to the best of the person’s

knowledge, information, and belief‛ the claims or other legal

4. We note that although it asked the court for sanctions under

rule 11 of the Utah Rules of Civil Procedure, Deep Blue Pools’s

request was not properly initiated by following the requirements

of rule 11. See Utah R. Civ. P. 11(c)(1)(A) (providing that ‚a

motion for sanctions under this rule shall be made separately

from other motions or requests and shall describe the specific

conduct alleged to violate‛ subsection (b)). Here, Deep Blue

Pools’s request for sanctions was not filed as a separate motion

but was raised in its opposition to the Lebrechts’ motion to

enforce. Because neither party raises an argument on appeal

regarding whether Deep Blue Pools properly initiated its rule 11

motion, we address the merits of the parties’ arguments,

interpreting Deep Blue Pools’s argument for sanctions as an

invitation to the court to enter an order for sanctions on its own

initiative.

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contentions are supported by existing law and have evidentiary

support. Utah R. Civ. P. 11(b). This rule gives the court

discretion to ‚impose an appropriate sanction upon the

attorneys, law firms, or parties that have violated subdivision

(b).‛ Id. R. 11(c).

¶26 Different standards of review apply to our review of a

trial court’s determination of whether sanctions are appropriate

under rule 11 of the Utah Rules of Civil Procedure. Archuleta v.

Galetka, 2008 UT 76, ¶ 6, 197 P.3d 650. ‚Findings of fact are

reviewed under a clear error standard, while conclusions of law

are reviewed for correctness.‛ Id. ‚The trial court’s

determination regarding the type and amount of sanctions to be

imposed is reviewed for abuse of discretion.‛ Id. Generally,

Decisions regarding rule 11 sanctions are best left

in the hands of the trial court. We therefore accord

reasonable discretion to the trial court to determine

when sanctions are useful and appropriate. When

applying the appropriate standards of review, we

grant considerable deference to the trial court’s

factual findings and some deference to the trial

court’s application of the facts when reaching its

legal conclusions of whether rule 11 has been

violated. We also afford substantial deference to

the trial court’s ultimate determination of when,

and to what extent, sanctions are a useful tool in

controlling abuses of the judicial process.

Id. ¶ 7. Accordingly, ‚it remains within the court’s discretion to

apply sanctions under rule 11(c) even if it finds a violation of

rule 11(b).‛ See Crank v. Utah Judicial Council, 2001 UT 8, ¶ 34, 20

P.3d 307.

¶27 Here, the court determined that it ‚did not find anything,

either in the testimony or in the transcript, that [one] really could

lay [a] finger on as being false as compared to two parties

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making a reasonable negotiation without attorneys present.‛

Although we disagree with the court’s determination that the

parties had an enforceable settlement agreement, nothing

suggests Mr. Lebrecht lacked an honest belief that the parties

had reached an agreement by the conclusion of the February 18

negotiations or that their attorney filed the motion to enforce the

Term Sheet in bad faith. Given the high level of deference

afforded to the trial court’s determination, we are not persuaded

it abused its discretion when it declined to sanction Mr. Lebrecht

and his attorney under rule 11.

CONCLUSION

¶28 Because the parties mutually understood a settlement

agreement would not be entered into until some point in the

future, we conclude it was clear error for the trial court to find

that the parties entered into an enforceable settlement

agreement. Deep Blue Pools has failed to persuade us the court

exceeded its discretion when it declined to sanction Mr. Lebrecht

and his attorney. We therefore affirm the court’s decision to

reject Deep Blue Pools’s request for sanctions and reverse the

court’s determination that the parties’ negotiations created an

enforceable settlement agreement.

20140536-CA 16 2016 UT App 110