Telegraph Tower LLC v. Century Mortgage LLC

2016 UT App 102

THE UTAH COURT OF APPEALS

TELEGRAPH TOWER LLC AND JARED CHRISTIANSEN,

Appellants,

v.

CENTURY MORTGAGE LLC, ET AL.,1

Appellees.

Opinion

No. 20140489-CA

Filed May 12, 2016

Fifth District Court, St. George Department

The Honorable G. Michael Westfall

The Honorable James L. Shumate2

No. 100503310

Bryce D. Panzer and Brett N. Anderson, Attorneys

for Appellants

Bruce C. Jenkins and Carson B. Bagley, Attorneys for

Appellees VF Parties

Russell S. Mitchell, Attorney for Appellees Lyle

Stringham and Barbara Stringham

George A. Hunt and Timothy J. Bywater, Attorneys

for Appellee Harris Property Investments LLC

1. The parties on appeal are not limited to those listed, but also

include other parties whose names appear on the notice of

appeal or who have otherwise entered appearances in this court.

2. Judge G. Michael Westfall was assigned this case after Judge

James L. Shumate retired from the bench in March 2014. All

orders relevant to this appeal were decided by Judge Shumate.

Telegraph Tower v. Century Mortgage

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

FREDERIC VOROS JR. and SENIOR JUDGE RUSSELL W. BENCH

concurred.3

TOOMEY, Judge:

¶1 Jared Christiansen and Bradley S. Harrell, through their

company Telegraph Tower LLC (collectively, Borrowers), asked

a lending company, Century Mortgage, for a loan to complete a

construction project (the Project). Century Mortgage agreed and

sought money from various individuals and business entities

(collectively, Investors) to fund the loan. In essence, Century

Mortgage acted as a middleman between Borrowers and

Investors. It executed an agreement with Borrowers promising to

make funds available as needed for the Project. It also executed

an agreement with Investors, agreeing to service the loan,

including preparing all necessary paperwork and obtaining

information about the Project. At some point, Century Mortgage

misplaced the money4 and construction on the Project was

forced to stop for lack of funds. Borrowers sued Investors and

Century Mortgage under various legal theories. Particularly,

Borrowers claimed Investors were vicariously liable for the

tortious actions of Investors’ agent, Century Mortgage. Investors

responded that Century Mortgage was Borrowers’ agent and all

duties were fulfilled when Investors deposited their

contributions to the loan in Century Mortgage’s bank account.

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

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

4. It is unclear what happened to the loan proceeds. When

Borrowers asked Century Mortgage about the money, one of

Century Mortgage’s principals, Donald Larkin, responded that

the ‚*m+oney is where it is . . . we intend to get *it+ for you.‛

Larkin later explained, ‚Let’s just say that we tried something

and it didn’t work out like we planned,‛ and there is ‚no money

in the account.‛

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Telegraph Tower v. Century Mortgage

¶2 In this appeal, we must determine whether the district

court correctly granted summary judgment on all relevant

causes of action. We affirm in part and reverse in part. Upon

review of the issues, we conclude the court improperly granted

summary judgment before deciding an agency issue and

improperly limited Borrowers’ damages. But we affirm the

court’s conclusion that Investors are not jointly and severally

liable.

BACKGROUND

I. Factual Background

¶3 Because of the complexities of this case, we first introduce

the parties involved and describe their relationships with one

another, then describe the procedural posture that gave rise to

this appeal. We recite only the facts and procedural background

relevant to this appeal.

Century Mortgage and Borrowers

¶4 In 2008, Borrowers sought to develop real property

Christiansen owned on Telegraph Street in Washington City,

Utah. With plans to construct a commercial office building on

the property, Borrowers pursued financing from Century

Mortgage for the approximately $2.8 million needed for the

Project. Century Mortgage did not immediately agree to fund

the Project but instead reached out to various individuals and

entities to solicit their investments. This effort was successful,

and Century Mortgage eventually agreed to assist Borrowers.

¶5 By early 2010, Century Mortgage had disbursed roughly

$490,000 in funds it had collected for the Project on behalf of

Borrowers to prevent the property from being subject to

foreclosure, including approximately $475,000 for a ‚Land

Payoff‛ to Village Bank; roughly $10,000 for property taxes; and

$4,555 for closing costs.

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Telegraph Tower v. Century Mortgage

¶6 In April 2010, Borrowers executed and recorded a trust

deed and note in favor of Investors. A couple weeks later,

Century Mortgage and Borrowers executed a loan agreement

(the Construction Loan Agreement), which promised Borrowers

approximately $2.8 million for the Project. Instead of paying

Borrowers the loan in one lump sum, the agreement set forth

conditions and requirements for Borrowers to receive it in

portions as needed. Further, the agreement described Century

Mortgage as Investors’ agent in servicing the loan and executing

the agreement. Specifically, the Construction Loan Agreement

stated it was made ‚by and between the undersigned Telegraph

Towers LLC., Jared Christiansen and Bradley Harrell

individually (borrower) and Century Mortgage, as agent for

*Investors+.‛ It identified the names of each individual investor

and the percentage of interest to which each investor was

entitled. Further, the agreement provided that

[u]pon the recordation of the Trust Deed, the net

proceeds of the loan will be available to be

disbursed by [Century Mortgage5] to the

undersigned Borrower or others as hereinafter

provided which shall be conclusively deemed full

consideration for the Note and that such

consideration has fully passed and been paid to the

Borrower.

¶7 In June and July 2010, according to Christiansen,

‚Century Mortgage fully funded several draws totaling

approximately $256,389.72‛ to pay for pre-construction costs.

But by August, after major construction had begun, Century

Mortgage stopped responding to Borrowers’ requests for funds.

5. We note that, in the first sentence of the Construction Loan

Agreement, Investors are referred to as ‚investors.‛ But

thereafter Investors are referred to as ‚lenders.‛ Moreover, the

term ‚lenders‛ is often used interchangeably when referring

either to Investors or to Century Mortgage.

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Telegraph Tower v. Century Mortgage

Through their attorney, Borrowers sent Century Mortgage a

written request for a meeting. According to Christiansen, in that

meeting Century Mortgage informed them that ‚there [was not]

actually any money at all. All the money that [they] collected

ha[d] been spent.‛ At this point, Borrowers alleged, Century

Mortgage had ‚failed to fund at least $1,138,703.31 in loan

proceeds that should have been available for construction of the

Project.‛ As a result, Borrowers were unable to pay

subcontractors and suppliers, and then at least thirteen

mechanic’s liens were recorded against the property.

Century Mortgage and Investors

¶8 According to its brochure materials, once Century

Mortgage received a loan request, it would reach out to

prospective investors who had expressed interest in similar

investment opportunities and allow them to choose whether to

participate in a particular venture either by funding the entire

loan or by sharing the investment with other parties. Here,

Century Mortgage identified various individuals and entities to

contribute funds to the Project, some of whom had previously

used Century Mortgage’s services to invest in other projects.

Others agreed to invest through Century Mortgage for the first

time.

¶9 In April 2010, most of Investors executed an agreement

(the Investors Agreement) by which they promised to fund the

loan requested by Borrowers. The Investors Agreement specified

the amount each investor agreed to contribute. It expressly

stated,

Century Mortgage agrees to act as agent for the

above investors in gathering pertinent information

about the property and principals involved and

making such information available to the investors,

along with a recommendation. Century Mortgage

is not a guarantor of the note and the signers

herein agree that neither it nor its principals acting

20140489-CA 5 2016 UT App 102

Telegraph Tower v. Century Mortgage

on its behalf are liable in any way for the success or

failure of this venture except as to

misrepresentation or omission of material facts of

which they are aware. The investment decision is

solely that of the investor.

It also set forth Century Mortgage’s responsibilities:

Century Mortgage agrees to prepare, or have

prepared documents necessary to complete this

transaction in a businesslike manner. This will

include a Trust Deed, Trust Deed Note, closing

statements, and Title Insurance. The deeds and

notes will bear the investors names and the

borrowers obligation will be solely to the investors

so named. However, Century Mortgage will

service the loan for the length of its regular term,

gathering the money to be invested and

distributing it to the Title Co. for the lot (or land),

holding the balance on a construction loan and

distributing it to the contractor periodically as

needed, upon completion of each part of the home

or project, collecting monthly interest payments,

assessing necessary late fees, calculating principal

and interest, and forwarding the amount due each

investor promptly.

¶10 A few prospective investors did not execute the Investors

Agreement, or any other agreement, but nevertheless promised

to invest in the Project. One investor entered into a series of

separate contracts with Century Mortgage agreeing to invest a

total of $600,000 for the Project.

¶11 Although Investors dispute whether they are bound by

the Construction Loan Agreement, they generally agree they are

subject to the trust deed and note. Further, all Investors who

executed the Investors Agreement concede they are bound by it.

20140489-CA 6 2016 UT App 102

Telegraph Tower v. Century Mortgage

Finally, all Investors gave their respective contributions to

Century Mortgage to fund the loan.

II. Procedural Background

¶12 In September 2010, Borrowers filed suit against Investors.6

Borrowers claimed Investors breached the Construction Loan

Agreement and the integrated trust deed and note. They also

brought claims regarding the implied covenant of good faith and

fair dealing and unjust enrichment. Specifically, they claimed,

‚Investors expressly authorized Century Mortgage to act as the

Investors’ agent and to enter the *Construction+ Loan Agreement

with *Borrowers+, and to service the loan on the Investors’

behalf.‛ Accordingly, Borrowers claimed, ‚Century Mortgage,

on its own behalf and on behalf of all the Investors, entered into

the [Construction] Loan Agreement and expressly agreed,

among other things, that the net proceeds of the loan

contemplated therein would be available for disbursement and

application to the Project as appropriate requests were made.‛

As such, Borrowers assert, ‚*Investors+ breached and are in

default of the [Construction] Loan Agreement and any other

agreements ancillary thereto.‛7

6. In their complaint, Borrowers also brought claims against

Century Mortgage and its principals individually, but those

claims are not part of this appeal.

7. At the district court, three groups of investors answered

Borrowers’ complaint. The first group, the ‚VF Parties,‛ was the

largest and included more than eighteen investors represented

by the same legal counsel. The second group was a married

couple, Lyle and Barbara Stringham, referred to as the

‚Stringhams.‛ Finally, the ‚HPI‛ group consisted of Harris

Property Investments LLC and its principal, Paul Harris. To

avoid further complicating the issues, we continue to refer to the

(continued<)

20140489-CA 7 2016 UT App 102

Telegraph Tower v. Century Mortgage

¶13 After discovery closed, between October 2012 and

February 2013, the parties made various motions and counter-

motions for summary judgment. To support their various

motions, the parties raised four main issues: (1) whether Century

Mortgage acted as Investors’ agent or fiduciary, or as Borrowers’

agent or fiduciary, or both; (2) whether Borrowers could

demonstrate that Investors did not pay their respective shares,

considering that Century Mortgage commingled the funds; (3)

whether Investors were jointly and severally liable; and (4)

whether Investors were unjustly enriched.

¶14 First, the parties raised several theories regarding Century

Mortgage’s agency. On one hand, Investors argued they had no

duty under the Construction Loan Agreement because Century

Mortgage did not have authority to sign the agreement on

Investors’ behalf. Rather, Century Mortgage acted as Borrowers’

agent and fiduciary because Century Mortgage held Borrowers’

loan funds, disbursed interest payments, and paid Village Bank

to prevent it from foreclosing on the property. Investors

alternatively argued that, even if Century Mortgage was their

agent, Borrowers’ claim still failed as a matter of law for at least

two reasons: Century Mortgage’s authority was limited to

gathering information and preparing loan documents and, as

Borrowers’ fiduciary, it acted as a dual agent similar to an

escrow agent. Accordingly, Investors argued that, under

common law principles not yet adopted in Utah, Borrowers bore

the risk of loss because Borrowers entered into a fiduciary

relationship with Century Mortgage first. Further, Investors

argued that any obligation Investors had to pay Borrowers was

fulfilled under Utah Code section 22-1-2 when Investors gave

Century Mortgage their funds because Century Mortgage was ‚a

fiduciary.‛

(<continued)

various lenders as ‚Investors‛ collectively, particularly because

each group has consistently incorporated the others’ arguments.

20140489-CA 8 2016 UT App 102

Telegraph Tower v. Century Mortgage

¶15 On the other hand, Borrowers argued that ‚all of the

relevant contracts and agreements establish that Century

Mortgage was the express agent of the Investors.‛ Moreover,

Century Mortgage’s involvement in putting together the loan

transaction demonstrates it acted on behalf of Investors. They

further reasoned that Century Mortgage already had a fiduciary

relationship with those Investors who had previously invested

with Century Mortgage, and Century Mortgage agreed to

‚look*+ out for the interests of the Investors.‛

¶16 Second, Investors argued that Borrowers’ claims were too

speculative. They argued Borrowers could not point to a single

investor and establish that the investor’s funds were not already

paid for Borrowers’ benefit—especially considering that

Investors’ funds were commingled in Century Mortgage’s bank

account. Borrowers responded that ‚*b+ecause the Investors

were co-venturers or joint venturers . . . , they are jointly and

severally liable,‛ which negated the requirement to point to a

specific investor’s breach. Then Borrowers pointed out that,

because neither the Construction Loan Agreement nor the

Investors Agreement had express joint and several liability

covenants, the court should look to the parties’ intentions.

¶17 Third, Borrowers argued that the Construction Loan

Agreement, Investors Agreement, and the trust deed and note

imposed joint and several liability because each investor made a

promise involving the same performance—to lend $2.8 million.

In contrast, Investors argued that each investor did not make the

same promise as every other investor, but rather each promised

to contribute a different amount, and therefore cannot be jointly

liable. Further, Investors argued they could not be jointly liable

because, even assuming they were bound by the Construction

Loan Agreement, no investor had breached any part of that

agreement.

¶18 Finally, Investors argued that an unjust enrichment claim

was not proper as a matter of law because it ‚‘is available only

when no enforceable written or oral contract exists.’‛ (Quoting

Wood v. Utah Farm Bureau Ins. Co., 2001 UT App 35, ¶ 10, 19 P.3d

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Telegraph Tower v. Century Mortgage

392.) In contrast, Borrowers argued that the unjust enrichment

claim was appropriate against those investors who contend they

are not bound by the Construction Loan Agreement.

¶19 In February 2013, after hearing arguments on the

summary judgment motions, the court made determinations

regarding the third and fourth issues. It concluded that ‚[t]he

cause of action with respect to unjust enrichment is dismissed as

to all the defendants,‛ because it is ‚simply not legally

sustainable to anyone except [those] who are not contracting

parties.‛ More importantly, the court also concluded that ‚there

is . . . no legal justification to take these documents and create

joint and several liability for [Investors]. They have a limited

liability in this set of documents . . . . I don’t find support in the

documents or the law.‛ In denying the motions regarding ‚the

other issues,‛ the court reasoned, ‚[W]ith respect to all the other

motions for summary judgment going both directions, there’s

simply too much a conflict in fact for the Court to make any

other ruling.‛

¶20 In the written ruling memorializing its decisions, the

court concluded that ‚*i+n the event the Court determines that

[Investors have] breached a duty to [Borrowers] which is the

proximate cause of identifiable and specific damages, such

damages are limited in that these [investors] may have

individual liabilities up to the full amount of their contribution.‛

The court later reiterated that this meant that Investors’ liabilities

would be capped at the amount the investors individually

promised to contribute.

¶21 Investors again filed motions for summary judgment with

evidence demonstrating that each individual investor had

provided Century Mortgage with its respective portion of the

loan. Borrowers opposed Investors’ motions, arguing there were

still a number of disputed questions that should have precluded

summary judgment, including whether Investors were obligated

to advance the loan to Borrowers through Century Mortgage

under the Construction Loan Agreement.

20140489-CA 10 2016 UT App 102

Telegraph Tower v. Century Mortgage

¶22 The district court ultimately granted summary judgment

in favor of Investors, dismissing all claims against them and

awarding them their attorney fees. The court determined that,

based on the pleadings, there was no dispute that Investors gave

Century Mortgage the full amount each individual had agreed to

contribute. But the court never made a determination regarding

Century Mortgage’s agency. Rather, the court concluded that

Investors had no duty to pay any amount directly to Borrowers

and, therefore, Borrowers could not recover damages from

Investors, jointly or severally, even if they could prove Investors

had a duty that was breached. Borrowers appeal.

ISSUES AND STANDARDS OF REVIEW

¶23 Borrowers contend the district court erred in granting

Investors’ motions for summary judgment. First, they argue that

the ‚essential underpinning*+ to the order‛ granting summary

judgment is that ‚Century *Mortgage+ collected, received, and

held [Investors’] funds as the agent or fiduciary of [Borrowers],

and not as the agent or fiduciary of *Investors+.‛ Borrowers

argue this ‚underpinning [is] wrong, both as a legal and factual

matter.‛8 Borrowers next argue that under the undisputed facts,

‚the law implies that *Investors+ jointly promised a single

performance to [Borrowers], i.e., a loan of $2,821,000 for the

8. Indeed, Borrowers argue the opposite is true. They argue that

the district court ‚erred in failing to grant *their+ Motion for

Partial Summary Judgment [on the ground] that Century was

the agent for [Investors+.‛ They argue that the ‚contracts and

undisputed conduct of the parties established, as a matter of law,

that Century acted in the capacity as agent for [Investors], and

not as agent for *Borrowers+.‛ Because we reverse the court’s

decision to grant summary judgment in favor of Investors with

regard to the agency issue, we need not address whether the

court erred in denying Borrowers’ competing summary

judgment motion. See infra ¶¶ 25–36.

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Telegraph Tower v. Century Mortgage

construction of the Project, and they are therefore jointly liable

for the performance of the promise.‛ Finally, Borrowers argue

the court erred in limiting damages for which Investors could be

liable. Specifically, they argue the ‚court’s ruling on this point

was procedurally improper‛ because there ‚is no legal basis‛ for

this determination.

¶24 We review a ‚court’s legal conclusions and ultimate grant

or denial of summary judgment for correctness and view[] the

facts and all reasonable inferences drawn therefrom in the light

most favorable to the nonmoving party.‛ Orvis v. Johnson, 2008

UT 2, ¶ 6, 177 P.3d 600 (citations and internal quotation marks

omitted). Further, summary judgment is only appropriate if

‚there is no genuine issue as to any material fact and . . . the

moving party is entitled to a judgment as a matter of law.‛ Utah

R. Civ. P. 56(a). In other words, ‚[a] district court is precluded

from granting summary judgment ‘if the facts shown by the

evidence on a summary judgment motion support more than

one plausible but conflicting inference on a pivotal issue in the

case . . . particularly . . . if the inferences depend upon subjective

feelings or intent.’‛ Uintah Basin Med. Ctr. v. Hardy, 2008 UT 15,

¶ 19, 179 P.3d 786 (first omission in original) (quoting 73 Am.

Jur. 2d Summary Judgment § 46 (2001)).

ANALYSIS

I. Agency

¶25 Borrowers argue that Investors breached their contractual

duties under the Construction Loan Agreement. They can only

demonstrate that Investors were bound by the terms of that

agreement by showing that Century Mortgage entered into the

contract on Investors’ behalf, as their agent. But without

reaching the merits of the parties’ arguments regarding Century

Mortgage’s agency, we conclude that this issue should be

remanded for further proceedings for two reasons: (1) the

district court did not make a determination regarding Century

Mortgage’s agency and (2) Century Mortgage’s agency is a

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Telegraph Tower v. Century Mortgage

question of fact not proper for summary judgment because the

inferences to be drawn from the facts are in dispute.

¶26 First, the district court never made a determination

regarding agency. On appeal, the parties assume that the court

implicitly decided the agency issue when it concluded that

Investors no longer had a duty to pay after they deposited

money into Century Mortgage’s bank account. But, as Borrowers

point out, there is an ‚absence of a stated rationale for the

ruling‛ and ‚*n+either the transcript of the initial hearing on the

motions, nor the transcript of the hearing on [Borrowers’]

objection*s+ . . . , shed much light on the judge’s rationale.‛

¶27 As we have noted, the parties raised four main issues in

their initial efforts to obtain summary judgment. But the court

made determinations regarding only three of those issues. With

regard to the first issue—the agency issue—the court denied the

parties’ motions, expressly stating ‚there’s simply too much

conflict in fact for the Court to make any other ruling.‛

¶28 Later, in the second round of summary judgment

motions, the court made no comment and no determination

when Borrowers raised the issue of Century Mortgage’s agency.

In their opposition memoranda, Borrowers averred that even if

the ‚‘objective facts are undisputed [that] does not mean that no

genuine issues remain as to those facts.’‛ (Quoting USA Power,

LLC v. PacifiCorp, 2010 UT 31, ¶ 33, 235 P.3d 749.) Then, they

argued that Investors’ arguments ignored ‚that Century

Mortgage was the express agent of the *Investors+,‛ and that

‚[a]ny inferences about the use of *Investors’+ funds must be

resolved in favor of [Borrowers], as the non-moving party.‛

¶29 At the hearing, Borrowers argued that evidence of money

being deposited into Century Mortgage’s bank account was not

dispositive of the case. Borrowers conceded there was ‚no doubt

that money went to [Investors’] agent,‛ i.e., Century Mortgage.

The real issue, Borrowers argued, was ‚what it means to

contribute‛—whether that means to contribute directly to

Borrowers or whether the duty to contribute was satisfied when

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Telegraph Tower v. Century Mortgage

Investors deposited their funds with Century Mortgage or

authorized Century Mortgage to use funds it already held.

Furthermore, Borrowers reiterated that whether Investors

fulfilled the obligations under the Investors Agreement was

irrelevant to this case, because the real issue was that Investors

had an obligation to pay Borrowers according to the

Construction Loan Agreement, trust deed, and note. They stated,

‚it’s not of a moment to us that their agent squandered their

money. Our contract is . . . not the Investor[s] Agreement.‛

¶30 Immediately after this argument, the court granted

Investors’ motions without any explanation, and without

comment regarding Century Mortgage’s agency. In its order, the

court concluded that because Investors invested ‚the full

amount required under the Investors Agreement,[9] they ha[d]

no obligation to pay any additional sums to Century Mortgage,

LLC, nor [did] they have a duty to pay any amount directly to

[Borrowers+.‛ Thus, although the court previously

acknowledged that there was too much conflict in fact to rule on

the agency issue, the court appears to have ignored Borrowers’

arguments that the agency issue precluded summary judgment

and the reminder that the Construction Loan Agreement

controlled in this action, not the Investors Agreement.

¶31 Whether Century Mortgage acted as Investors’ agent is

crucial to this case: only if Century Mortgage acted as Investors’

agent when it entered into the Construction Loan Agreement

would Borrowers have a cause of action. Moreover, if Century

Mortgage was Investors’ agent, Investors’ obligation to

contribute to the loan may be a duty to Borrowers, not Century

Mortgage. And even if the court implicitly made a finding that

9. The court’s determination appears to be based on the terms of

the Investors Agreement, not the Construction Loan Agreement

upon which this case was brought. But because the court did not

explain its determination, it is not clear upon which documents

the court relied in making this determination.

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Telegraph Tower v. Century Mortgage

Century Mortgage was Borrowers’ agent, there is nothing in the

record to determine which factual inferences the court drew in

reaching its decision or how it came to that conclusion. Although

we do not defer to the trial court’s legal conclusions on summary

judgment, ‚we certainly may derive great benefit from the trial

judge’s views on the issue and may be persuaded by those

views.‛ Zions First Nat’l Bank, N.A. v. National Am. Title Ins. Co.,

749 P.2d 651, 654 (Utah 1988). Accordingly, a trial court’s failure

to address an issue ‚provides ample justification for refusing to

consider‛ that matter for the first time on appeal. See id.

¶32 Second, agency presents a question of fact that ‚depends

upon all the facts and circumstances of the case.‛ See Gildea v.

Guardian Title Co. of Utah, 970 P.2d 1265, 1269 (Utah 1998); accord

Adamson v. United Mine Workers of Am., 277 P.2d 972, 973–74

(Utah 1954); Vina v. Jefferson Ins. Co. of N.Y., 761 P.2d 581, 585

(Utah Ct. App. 1988); 3 Am. Jur. 2d Agency § 334 (2015). ‚A court

can find that an agency relationship exists only if the agent is

shown to have been acting on behalf and subject to the control of

the principal.‛ Zions, 749 P.2d at 654. This can be proved ‚by

direct evidence of an express contract‛ or ‚by competent

evidence which has a tendency to prove an agency.‛ 3 Am. Jur.

2d Agency § 327 (2015). Thus, ‚*w+hen the facts relied upon to

establish the existence of an agency relationship are conflicting,

or conflicting inferences can be drawn from them, the question is

one for the jury.‛ Id.; see also USA Power, LLC v. PacifiCorp, 2010

UT 31, ¶ 65, 235 P.3d 749 (stating that ‚inferences drawn from

circumstantial evidence . . . may create a genuine issue of

material fact‛).

¶33 Here, although the parties do not contest the underlying

facts of this case, they do dispute the inferences drawn from

those facts. They dispute whether the facts demonstrate that

Century Mortgage acted as Borrowers’ agent or Investors’ agent,

or both. Borrowers support their argument by pointing to the

express language of the Construction Loan Agreement and

Investors Agreement, which states Century Mortgage acted ‚as

agent for investors.‛ But Investors argue the parties’ conduct

and the nature of the transaction demonstrate that Century

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Telegraph Tower v. Century Mortgage

Mortgage acted as Borrowers’ agent or, alternatively, as both

Borrowers’ and Investors’ agent.

¶34 The parties also dispute the scope of Century Mortgage’s

agency. In particular, Borrowers argue that Century Mortgage

acted on behalf of Investors, as their agent, when it entered into

the Construction Loan Agreement. But Investors argue that,

even if Century Mortgage was their agent, Century Mortgage

did not have the ‚authority to sign the *Construction+ Loan

Agreement for them.‛ They argue that ‚Century’s role as agent

for [Investors] was limited to arranging the [loan] and then as an

escrow agent.‛ To support this argument, Investors show that

Century Mortgage’s brochure, ‚How Century Mortgage Works,‛

describes Century Mortgage as acting as an escrow agent.

¶35 More importantly, assuming Investors are bound by the

terms of the Construction Loan Agreement, the parties dispute

whether Century Mortgage’s receipt of Investors’ funds satisfies

Investors’ duties under the agreement. Investors argue that if

Century Mortgage acted on behalf of Borrowers, as their agent,

Century Mortgage’s acceptance of the funds was equivalent to

Borrowers accepting the funds. But Borrowers argue that,

because Century Mortgage already had some Investors’ funds

and accepted funds from the remaining investors as an agent,

Century Mortgage was essentially an extension of Investors and

Investors’ duties were not satisfied under the Construction Loan

Agreement.

¶36 In light of the parties’ disputes, we conclude that genuine

issues of fact exist with respect to the questions of whose agent

Century Mortgage was and the scope of its agency. See USA

Power, 2010 UT 31, ¶ 33 (explaining that ‚*e+ven if the moving

party’s objective statement of the facts are agreed upon,

reasonable inferences made from those undisputed facts can

indeed create a genuine issue of material fact‛). We therefore

vacate the order granting summary judgment and remand the

issue of Century Mortgage’s agency for further proceedings.

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Telegraph Tower v. Century Mortgage

II. Joint and Several Liability

¶37 Borrowers contend that Investors ‚were jointly and

severally liable for the performance of their collective obligations

under the [Construction Loan Agreement, trust deed, and

note+.‛ Specifically, they argue that Investors ‚jointly promised a

single performance to [Borrowers], i.e., a loan of $2,821,000 for

the construction of the Project, and they are therefore jointly

liable for the performance of the promise to deliver the total

amount.‛ Borrowers reason that ‚it makes practical sense that

[Borrowers] contracted for a complete loan, not for many

separate loans.‛ Investors disagree. They contend they are not

jointly liable because each Investor ‚did not promise the same

performance.‛ Investors argue that this is demonstrated by the

plain language of the loan documents in which Investors’ names

are ‚listed together with the amount or percentage of their

investment compared to the entire amount loaned to

*Borrowers+.‛ Rather, Investors argue, the loan was ‚essentially

a syndicated loan where the investors are only severally liable.‛

¶38 ‚Whether or not multiple promises have reference to the

same performance is entirely a question of interpretation.‛

Restatement (Second) of Contracts ch. 13, intro. note (Am. Law

Inst. 1981).

The basic rule of contract interpretation is that

intent of the parties is to be ascertained from the

content of the instrument itself, the rationale for the

rule being to preserve the sanctity of written

instruments. Each contract provision is to be

considered in relation to all of the others, with a

view toward giving effect to all and ignoring none.

It is only when ambiguity exists which cannot be

reconciled by an objective and reasonable

interpretation of the contract as a whole that resort

may be had to the use of extrinsic evidence.

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Telegraph Tower v. Century Mortgage

Utah Valley Bank v. Tanner, 636 P.2d 1060, 1061–62 (Utah 1981)

(citations omitted). ‚A contract . . . is ambiguous if it is capable

of more than one reasonable interpretation because of uncertain

meanings of terms, missing terms, or other facial deficiencies.‛

Peterson v. Coca-Cola USA, 2002 UT 42, ¶ 9, 48 P.3d 941 (citation

and internal quotation marks omitted).

¶39 ‚Whether an ambiguity exists in a contract is a question of

law.‛ WebBank v. American Gen. Annuity Serv. Corp., 2002 UT 88,

¶ 22, 54 P.3d 1139 (citation and internal quotation marks

omitted). ‚When ambiguity exists, the intent of the parties

becomes a question of fact.‛ Id. (citation and internal quotation

marks omitted). Thus, ‚*a+ motion for summary judgment may

not be granted if a legal conclusion is reached that an ambiguity

exists in the contract and there is a factual issue as to what the

parties intended.‛ Id. (citation and internal quotation marks

omitted).

¶40 At the close of the first summary judgment hearing, the

district court stated that there was ‚no legal justification to take

these documents and create joint and several liability for

[Investors]. They have a limited liability in this set of documents

according to their percentage.‛ It then concluded, ‚[T]here is no

basis in fact or law for finding joint and several liability of

*Investors+.‛ We must therefore determine whether the court’s

interpretation of the Construction Loan Agreement—the

operative document—was proper insofar as it explicitly

determined that as a matter of law Investors are not jointly and

severally liable for any breach in the agreement, and insofar as it

implicitly determined that the language of the agreement was

unambiguous.

¶41 As a general rule, ‚*w+here two or more parties to a

contract promise the same performance to the same promisee,

each is bound for the whole performance [of the contract],

whether his duty [is expressed as] joint, several, or joint and

several.‛ Restatement (Second) of Contracts § 289 (Am. Law Inst.

1981). ‚Unless a contrary intention is manifested, a promise by

two or more promisors‛ is presumed to be joint. Id. § 288(2)

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Telegraph Tower v. Century Mortgage

& cmt. c. This is the consistent view of the various treatises on

contract law and the Restatement (Second) of Contracts. See, e.g.,

Id. §§ 288, 289; 12 Williston on Contracts, § 36:1, 800–01 (4th ed.

2012). ‚A several obligation, by contrast, has the effect of

creating two separate liabilities on a single contract.‛ 12

Williston on Contracts, § 36:1, 802 (4th ed. 2012). Accordingly,

‚when a several obligation is entered into by two or more parties

in one instrument, it is the same as though each has executed

separate instruments. Under these circumstances, each party is

bound separately for the performance which it promises and is

not bound jointly with anyone else.‛ Id. at 802–03 (citations

omitted). ‚Finally, a joint and several contract is a contract made

by the promisee with each promisor and a joint contract made

with all the promisors, so that parties having a joint and several

obligation are bound jointly as one party, and also severally as

separate parties at the same time.‛ Id. at 803 (citations omitted).

¶42 The Construction Loan Agreement states:

THIS AGREEMENT, is made on April 26, 2010 by

and between the undersigned Telegraph Towers

LLC., Jared Christiansen and Bradley Harrell

individually (borrower) and Century Mortgage, as

agent for investors Jean Rankin Trust, 3.08%

interest; Doloryce Foster, 1.24% interest; Ray

Schmutz Family Trust, 2.80% interest; Hanson

Family Trust, 1.77% interest; Charles and Lorena

Lambert, 0.92% interest; Lorena Lambert, 3.54%

interest; EJ Foremaster Family Trust, 1.95% interest;

Lane and Marian Foote, 0.71% interest; The Albert

Leroy Warner Trust, 0.53% interest; Ray Schmutz

Family Partnership, 6.17% interest; Peacock

Revocable Trust, 6.59% interest; Lanyle Brown,

1.03% interest; Cox Revocable Trust, 0.82% interest;

Donald Carlyle Whitaker Revocable Living Trust,

2.48% interest; Jack W and Denise M Doxey, 1.77%

interest; Layne and Nancy Johnson, 1.77% interest;

Lyle and Barbara Stringham, 1.77% interest;

Kimberly Meredith, 0.43% interest; Jenni Meredith,

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Telegraph Tower v. Century Mortgage

0.71% interest; The Ludlow Trust, 3.58% interest; G.

Dustin Gillman, 7.09% interest; CTTZ Inv. Defined

Benefits Pension Plan, 7.09% interest; IRA Express

Inc, FBO Leland Laub, 3.51% interest; Robert

Ludlow, 1.77% interest; Delmer Harris, 0.71%

interest; Tiffany Meredith, 0.71% interest; Harris

Property Investments LLC, 21.27% interest; L

Warren Cox Living Trust, 3.54% interest; Richard

Burch, 3.54% interest and Bradley S Harrell,[10]

7.09% interest inconsideration of the granting of a

loan by lenders and as part of said loan transaction,

which loan is evidence by Note of the undersigned

for $2,821,00.00 at 12% interest dated April 26, 2010.

Attached hereto and by this reference made part

thereof, in favor of the Lenders, and secured by a

first Trust Deed on real property . . . .

The purpose of said loan is to finance a part of the

cost of construction of certain improvements upon

the described premises in accordance with plans

and specifications that have been or will be

deposited by Borrower with the Lenders. The

parties desire to set forth the terms and conditions

of this transaction, the agreement of the Parties,

and the rights and remedies of the Lenders, in

connection with the disbursement of the proceeds

and construction of the improvements.

¶43 Borrowers argue that because there are multiple parties to

the Construction Loan Agreement making the same promise—to

fund the $2.8 million loan—it is presumed that Investors are

jointly liable. Restatement (Second) of Contracts § 288(2) & cmt.

10. Harrell, one of the Borrowers, also apparently invested in the

Project through Century Mortgage.

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Telegraph Tower v. Century Mortgage

c; see also 12 Williston on Contracts, § 36:1, 800–01 (4th ed. 2012).

We disagree.

¶44 The plain language of the agreement demonstrates that

Investors did not each promise the same performance to the same

promise. Rather, each investor promised to contribute a fraction

of the $2.8 million loan. Specifically, after each investor’s name

the agreement indicates the portion of the loan that investor is

associated with by listing the percent of interest to which the

investor is entitled.11 Considering the contract as a whole, to

determine that Investors each promised to pay the $2.8 million

loan would require us to ignore the interest percentages

associated with each individual investor. See Utah Valley Bank v.

Tanner, 636 P.2d 1060, 1061–62 (Utah 1981) (citations omitted).

Indeed, this agreement harmonizes with the Restatement’s

definition of a several obligation, which states that ‚promises to

subscribe for a common purpose sums of money set opposite the

names of the promisors are ordinarily promises of separate

performances.‛ Restatement (Second) of Contracts § 288 cmt. c

(Am. Law Inst. 1981). Accordingly, we cannot agree with

Borrowers that the Construction Loan Agreement imposes joint

or joint and several liability on Investors. Rather, Investors’

liability is several because they promised separate performances,

as indicated by the percentages identified next to their names in

the agreement. On this issue, we affirm the district court.

11. We also note the Investors Agreement states that Investors

‚*a+gree to fund a loan request by Telegraph Towers LLC, Jared

Christiansen and Bradley Harrell in the amounts shown

*opposite their names+.‛ Next to each investor’s name is the

percentage and dollar amount of their investment and a

corresponding dollar amount of interest for which they are

entitled.

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Telegraph Tower v. Century Mortgage

III. Damages

¶45 Borrowers argue the district court erred by ruling that the

total amount of all possible damages for a breach of contract or

breach of the implied covenant of good faith and fair dealing

was limited to the amount of money each individual investor

promised to pay under their contract. We agree.

¶46 An injured party has ‚a right to damages for any breach

by a party against whom the contract is enforceable unless the

claim for damages has been suspended or discharged.‛ Id.

§ 346(1). ‚Contract damages are ordinarily based on the injured

party’s expectation interest and are intended to give him the

benefit of his bargain by awarding him a sum of money that will,

to the extent possible, put him in as good a position as he would

have been in had the contract been performed.‛ Id. § 347 cmt. a.

These damages can ‚include both general damages, i.e., those

flowing naturally from the breach, and consequential damages,

i.e., those reasonably within the contemplation of, or reasonably

foreseeable by, the parties at the time the contract was made.‛

Billings v. Union Bankers Ins. Co., 918 P.2d 461, 466 (Utah 1996)

(citation and internal quotation marks omitted).

¶47 The Utah Supreme Court has consistently recognized that

‚in appropriate circumstances, consequential damages for

breach of contract may reach beyond the bare contract terms,‛ id.

(citation and internal quotation marks omitted); accord Beck v.

Farmers Ins. Exch., 701 P.2d 795, 801–02 (Utah 1985), and

therefore a claimant’s award of ‚damages for breach of contract

may reach beyond the bare contract terms,‛ Beck, 701 P.2d at 801;

see also Bevan v. J.H. Constr. Co., 669 P.2d 442, 444 (Utah 1983)

(holding that ‚the loss of a favorable mortgage interest rate is a

legitimate item of compensable damage‛); Pacific Coast Title Ins.

Co. v. Hartford Accident & Indem. Co., 325 P.2d 906, 908 (Utah

1958) (holding that attorney fees are a reasonably foreseeable

consequential damage for defending a contractor’s default). This

proposition ‚is wholly consistent with the general rule of

damages which arms the trial court with the discretion to place

the litigants as nearly as possible in the position they would

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Telegraph Tower v. Century Mortgage

have enjoyed had the contract not been breached.‛ Bevan, 669

P.2d at 444. The recoverability of consequential damages turns

on a three-prong analysis. ‚*T+o recover consequential damages

in a breach of contract action, a claimant must (1) prove that he

in fact has such damages, (2) establish the amount of such

damages with reasonable certainty, and (3) show that such

damages were within the contemplation of the parties at the time

of contracting.‛ Castillo v. Atlanta Cas. Co., 939 P.2d 1204, 1209

(Utah Ct. App. 1997).

¶48 In applying the foregoing rules to this case, it is clear the

district court incorrectly ruled that Borrowers’ damages are

limited. We do not decide whether consequential damages are

appropriate in this scenario. We instead conclude that the court

must analyze Borrowers’ damages in the context of this three-

prong test, which implicitly requires the court to determine the

extent of Investors’ breach, before limiting damages.

¶49 Here, the court never reached the issue of whether

Investors breached the Construction Loan Agreement. It simply

determined that Investors were not jointly and severally liable

for any breach. Then it stated,

In the event the Court determines that [Investors

have] breached a duty to [Borrowers] which is the

proximate cause of identifiable and specific

damages, such damages are limited in that these

defendants may have individual liabilities up to

the full amount of their contribution, if they have

contributed less than their contribution as shown,

as their percentage of the total $2.8 million loan for

the project at issue in this matter.

Borrowers opposed this language and requested a hearing to

reconsider it. Borrowers argued that this ruling misstated the

court’s oral conclusion at the first summary judgment hearing.

Further, they argued that the court’s determination regarding

joint and several liability ‚did not address the quantum of

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Telegraph Tower v. Century Mortgage

damages for which a lender/investor might be held liable, but

merely whether all of the lenders/investors were jointly and

severally liable.‛ In essence, Borrowers argued that the court’s

ruling was improper to the extent that it purports to limit

Investors’ responsibility for damages to the amounts that they

were individually responsible to contribute under the terms of

the Construction Loan Agreement.

¶50 The court held a hearing to address this issue. Borrowers

argued that consequential damages could reach beyond the bare

terms of the Construction Loan Agreement and it was ‚an issue

[that would] be hammered out in trial‛ by applying the three-

prong analysis for consequential damages. But the court did not

respond to that argument and instead suggested that it might be

more appropriate for Borrowers to file an interlocutory appeal to

‚see if *he+ was right.‛ Specifically, the judge stated,

I want your clients to think about this, because we

might have to just suspend this action here, let the

Court of Appeals, or the Supreme Court if they’re

willing to keep it, take a look at this and see if my

ruling was correct and there is a 2.8 million cap. . . .

[W]e might have to just stop this case here and take

it up on appeal to see if I am right or wrong about

this kind of limit. . . .

If I can be corrected, that’s your job, and I expect

you to [appeal] it. . . . I want to know what the law

is myself.

¶51 The court later explained that Borrowers should be

entitled to recover from an investor who ‚promised to put

$15,000 into the project and only put in five.‛ The court

ultimately concluded it was ‚still convinced that the order

prepared by *Investors+ is the order that’s going to be signed by

the Court,‛ but it never explained why. We therefore reverse the

court’s limitation of damages and remand this issue for further

fact-finding.

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Telegraph Tower v. Century Mortgage

IV. Attorney Fees

¶52 Investors argue that ‚because *they+ were awarded their

fees below, they are entitled to their fees on appeal.‛ ‚‘[W]hen a

party who received attorney fees below prevails on appeal, the

party is also entitled to fees reasonably incurred on appeal.’‛

Macris v. Sevea Int’l, Inc., 2013 UT App 176, ¶ 53, 307 P.3d 625

(alteration in original) (quoting Valcarce v. Fitzgerald, 961 P.2d

305, 319 (Utah 1998) (plurality opinion)). Because Investors

prevailed below and successfully defended the joint and several

liability issue on appeal, they are entitled to an award of attorney

fees incurred on appeal for that issue. Because they prevailed

only in part on appeal, we reverse the district court’s award of

attorney fees below except with respect to the issues on which

they succeeded on appeal. Further, we remand this issue to the

district court for a determination of the appropriate amount of

attorney fees and costs incurred with regard to the joint and

several liability issue. See id.

CONCLUSION

¶53 In sum, we affirm the district court’s determination that

Investors are not jointly and severally liable for any breach of the

Construction Loan Agreement. But we conclude that Century

Mortgage’s agency is a question of fact improper for summary

judgment. Thus, Century Mortgage’s agency and the scope of

that agency are questions for the jury. Moreover, because the

court failed to address whether Investors breached the

Construction Loan Agreement and consequently failed to

determine whether that breach resulted in consequential

damages by analyzing the facts of this case under the relevant

three-prong test, we further conclude the court erred in limiting

damages. Finally, we grant Investors’ request for attorney fees

for prevailing on the issue of joint and several liability only. We

therefore reverse and remand this case for further proceedings.

20140489-CA 25 2016 UT App 102