2015 UT App 34

_________________________________________________________

THE UTAH COURT OF APPEALS

ANTHONY B. TORRES AND YVETTE TORRES,

Plaintiffs and Appellees,

v.

DOUGLAS L. MADSEN; EMMA SILL CRIDDLE; AND

DOUG AND EMMY’S FAMILY RESTAURANT AND CAFÉ, INC.,

Defendants and Appellants.

Memorandum Decision

No. 20131028-CA

Filed February 12, 2015

Second District Court, Farmington Department

The Honorable David M. Connors

No. 080700361

James E. Magleby, Attorney for Appellants

Lorraine P. Brown, Attorney for Appellees

JUDGE JAMES Z. DAVIS authored this Memorandum Decision, in

which JUDGE STEPHEN L. ROTH concurred. JUDGE J. FREDERIC

VOROS JR. concurred, with opinion.

DAVIS, Judge:

¶1 Douglas L. Madsen, Emma Sill Criddle, and Doug and

Emmy’s Family Restaurant and Café,Inc.(collectively,Defendants)

appeal the district court’s denial of their motion to reconsider the

dismissal of their counterclaim for attorney fees. We affirm.

¶2 In June 2008, Anthony B. Torres and Yvette Torres brought

a complaint against Defendants seeking to enforce a Letter of Intent

in which Defendants agreed to sell their restaurant to the Torreses.

Relying on the Letter of Intent, the Torreses retained an attorney to

prepare a Purchase Agreement. However, Defendants rejected the

Purchase Agreement and cut off negotiations with the Torreses.

Accordingly, the Purchase Agreement was never signed.
Torres v. Madsen

¶3 On September 9, 2009, the district court granted summary

judgment in favor of Defendants, determining that the Letter of

Intent was unenforceable. The court also permitted the Torreses to

amend their complaint, which they did on October 8, 2009. 

¶4 In response to the amended complaint, Defendants filed an

answer and counterclaim in which they sought to recover attorney

fees. This counterclaim was based on Defendants’ assertion that the

original complaint relied on the unsigned Purchase Agreement,

which contained a provision for payment of attorney fees. Defendants argued that because the Torreses “sought to enforce a

contract which had an attorney fee provision,” Defendants were

“entitled to recover their attorney fees and costs” in accordance

with the Reciprocal Attorney Fees Statute. See Utah Code Ann.

§ 78B-5-826 (LexisNexis 2012).

¶5 In response, the Torreses filed a motion to dismiss Defendants’ counterclaim for attorney fees, asserting that all of their

contract claims were based on the Letter of Intent, which contained

no attorney fee provision. They maintained that they never sought

to enforce the Purchase Agreement, which “was at no time

accepted, agreed to or executed by either party.”

¶6 The district court agreed with the Torreses “that all contract

related claims [in the original complaint] were based upon the 2007

Letter of Intent and not upon the 2008 Purchase . . . Agreement.”

Alternatively, the court found that the Purchase Agreement could

not be subject to the Reciprocal Attorney Fees Statute because it

was not “executed.” Accordingly, the district court granted the 1

Torreses’ motion to dismiss.

1. Defendants argue that a contract can be executed in ways other

than signing, such as “through performance of the contract’s

terms.” (Citing Black’s Law Dictionary 567 (6th ed. 1990) (emphasis

omitted).) However, even accepting Defendants’ argument, there

is no indication that the Purchase Agreement was ever performed

or otherwise executed. Accordingly, we see no error in the district

court’s determination that the Purchase Agreement was not

executed.

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Torres v. Madsen

¶7 Two years later, in October 2012, Defendants moved the

court to reconsider its grant of the Torreses’ motion to dismiss, on

the ground that the Utah Supreme Court’s decision in Hooban v.

Unicity International, Inc., 2012 UT 40, 285 P.3d 766, permitted

recovery of attorney fees under the Reciprocal Attorney Fees

Statute based on an agreement that had not been signed by the

party seeking to enforce it. See id. ¶¶ 4–6. The district court found

Hooban distinguishable and denied Defendants’ motion to

reconsider. Defendants appeal.

¶8 Defendants’ appeal turns on the question of whether the

Torreses’ contract-related claims are subject to the Reciprocal

Attorney Fees Statute, as interpreted by Hooban. A district court’s

interpretation of a statute presents an issue of law, which we

review for correctness. State Farm Mut. Auto. Ins. Co. v. Green, 2003

UT 48, ¶ 44, 89 P.3d 97. A district court’s interpretation of case law

likewise presents an issue of law, which we review for correctness.

State v. Rogers, 2006 UT 85, ¶ 7, 151 P.3d 171.

¶9 The Reciprocal Attorney Fees Statute provides as follows:

A court may award costs and attorney fees to either

party that prevails in a civil action based upon any

promissory note, written contract, or other writing

executed after April 28, 1986, when the provisions of

the promissory note, written contract, or other

writing allow at least one party to recover attorney

fees.

Utah Code Ann. § 78B-5-826 (LexisNexis 2012). The Hooban court

determined that parties to litigation implicating the Reciprocal

Attorney Fees Statute need not be parties to the relevant contract

in order to recover fees. Hooban, 2012 UT 40, ¶¶ 21–22. Instead, the

Reciprocal Attorney Fees Statute may be invokedwhenever a party

seeks enforcement of a contract that provides for recovery of

attorney fees. Id. ¶¶ 25–26; see also Bilanzich v. Lonetti, 2007 UT 26,

¶¶ 15–16, 160 P.3d 1041 (explaining that the Reciprocal Attorney

Fees Statute “requires only that a party to the litigation assert the

writing’s enforceability as basis for recovery”). In other words,

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Torres v. Madsen

even if the court ultimately determines that the relevant contract is

not enforceable as to the parties to the litigation, the prevailing

party may recover attorney fees pursuant to the terms of the

contract if the other party would have been able to recover fees had

the contract been determined to be enforceable. Hooban, 2012 UT

40, ¶¶ 25–26.

¶10 Defendants assert that the Torreses sought to enforce the

Purchase Agreement, which contained an attorney fee provision.

Had the court determined that the Purchase Agreement was

enforceable, Defendants argue, the Torreses would have been able

to recover attorney fees. Thus, in accordance with Hooban,

Defendants assert that they should be permitted to recover

attorney fees because they prevailed on the enforceability issue.

¶11 Had the Torreses actually sought to enforce the Purchase

Agreement, Defendants would have a better argument. However,

2

it is clear from the context of the complaint that the Torreses’

contract-related claims were based on the signed Letter of Intent.

The Torreses’ complaint readily admits that Defendants rejected

the Purchase Agreement “in its entirety” and makes no attempt to

assert that the unsigned Purchase Agreement was enforceable. The

district court clearly read the complaint this way as well, even

before it was asked to explicitly rule on the question when

considering the Torreses’ motion to dismiss Defendants’ attorney

fee counterclaim. The district court’s ruling on Defendants’ motion

for summary judgment indicated that the Torreses “concede that

the survival of their Contract Reliant Claims depends on the

enforceability of the October 17, 2007 Letter of Intent as a

2. The district court distinguished Hooban because the contract in

Hooban was actually signed by the defendant and another party,

whereas the contract in this case was never signed by anyone. See

Hooban v. Unicity Int’l, Inc., 2012 UT 40, ¶¶ 4–6, 285 P.3d 766. See

generally Utah Code Ann. § 78B-5-826 (LexisNexis 2012) (indicating

that the Reciprocal Attorney Fees Statute applies to “executed”

writings). We need not examine the relevance of this distinction,

however, because we conclude that the Torreses never sought to

enforce the unsigned Purchase Agreement.

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Torres v. Madsen

contract.” Its analysis addressed only the enforceability of the 3

Letter of Intent and did not even touch on the enforceability of the

Purchase Agreement. Although we acknowledge that the

complaint’s reference to two different contracts—the Letter of

Intent and the Purchase Agreement—had the potential to cause

confusion, it is clear from the context of these references that the

Torreses’ contract-related claims were basedontheLetter ofIntent,

not the Purchase Agreement.

¶12 Because theTorreses’ contract-relatedclaims were not based

on the Purchase Agreement, the Reciprocal Attorney Fees Statute

does not apply. The supreme court’s decision in Hooban does not

alterthat result. Accordingly, we affirm the district court’s grant of

the Torreses’ motion to dismiss Defendants’ attorney fee

counterclaim and its denial of Defendants’ motion to reconsider.

VOROS, Judge (concurring):

¶13 I concur fully in the lead opinion. But even if the primary

rationale of that opinion were incorrect, and Defendants’ prayer

for specific performance “according to the terms of the purchase

contract” could be read to mean that the Torreses’ action was

3. Defendants point out that the Torreses’ initial disclosures

indicated that the remedy they sought was specific performance of

the sale “according to the terms of the [Purchase Agreement].”

However, by the time the Torreses’ claims were actually put to the

test by Defendants’ motion for summary judgment, they had

conceded that their claims depended solely on the enforceability of

the Letter of Intent. While the Torreses’ ambitions may arguably

have gone beyond enforcement of the Letter of Intent at one point

in the process, neither the complaint nor the Torreses’ response to

the summary judgment motion went so far. It seems too much of

a stretch to extend the reach of the Reciprocal Attorney Fees Statute

to make irrevocable a position taken at an early procedural stage

that has been abandoned by the time of the dispositive motion that

ultimately resolves the matter.

20131028-CA 5 2015 UT App 34
Torres v. Madsen

based on the Purchase Agreement, I would nevertheless affirm

solely on the alternative ground relied upon by both the district

court and the majority opinion: the Purchase Agreement wasnever

executed. I write to explain briefly why I conclude that the

Reciprocal Attorney Fees Statute requires execution and why that

requirement was not met here.

¶14 The Reciprocal Attorney Fees Statute clearly states at least

three distinct requirements: (1) a writing executed after a certain

date, (2) a civil action based upon that writing, and (3) a provision

allowing at least one party to recover fees:

A court may award costs and attorney fees to either

party that prevails in [1] a civil action based upon

any promissory note, written contract, or other

writing [2] executed after April 28, 1986, when [3] the

provisions of the promissory note, written contract,

or other writing allow at least one party to recover

attorney fees.

Utah Code Ann. § 78B-5-826 (emphasis added). Here, the third

requirement was not at issue, but the district court addressed the

other two. It ruled that the civil action brought by the Torreses

“was not based upon” the 2008 Purchase Agreement, but the 2007

Letter of Intent. It also ruled that “the only executed document was

the 2007 Letter of Intent.” The court refused to award fees, because

the Letter of Intent contained no fee provision.

¶15 Defendants argue persuasively in their opening brief that

the term of art “executed” may, depending on context, mean

“performed” as well as “signed.” But this line of argument leads

nowhere because, of course, neither party signed or performed the

Purchase Agreement. So even under Defendants’ preferred

reading of the statute, the Purchase Agreement was not “executed

after April 28, 1986.” 

¶16 Defendants also argue that the supreme court’s opinion in

Hooban effectively abrogates the statutory requirement that the

writing be executed. However, that opinion addresses only the

20131028-CA 6 2015 UT App 34
Torres v. Madsen

statutory requirement that the action be “based upon” a writing,

not the statutory requirement that the writing be “executed.” The

court held that “an action is ‘based upon’ a contract under the

statute if a ‘party to the litigation assert[s] the writing’s

enforceability as basis for recovery.’” Hooban v. Unicity Int’l, Inc.

2012 UT 40, ¶ 22, 285 P.3d 766 (alteration in original) (quoting

Bilanzich v. Lonetti, 2007 UT 26, ¶ 15, 160 P.3d 1041). The opinion

does not mention, much less abrogate, the portion of the

Reciprocal Attorney Fees Statute limiting the statute’s application

to writings “executed after April 28, 1986.” In fact, the opinion’s

quotation of the statutory text elides that phrase. See id. ¶ 12. And

in any event, as the court itself stated, “our cases cannot be read to

override the clear terms of the statute.” Id. ¶ 20 n.4.

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