2023 UT App 115

THE UTAH COURT OF APPEALS

VAL PETERSON INC.,

Appellant,

v.

TENNANT METALS PTY. LTD. AND METALCORP GROUP BV,

Appellees.

Opinion

No. 20210732-CA

Filed Septembeer 28, 2023

Third District Court, Salt Lake Department

The Honorable Su Chon

No. 180906137

Trent J. Waddoups, John D. Hanover, and Hannah S. 

Goodwin, Attorneys for Appellant

Jonathan O. Hafen, Robert S. Clark, Anna Rotman,

and Grant Jones Attorneys for Appellees

JUDGE JOHN D. LUTHY authored this Opinion, in which 

JUDGES MICHELE M. CHRISTIANSEN FORSTER and RYAN M. HARRIS

concurred.

LUTHY, Judge:

¶1 This case involves the site of the Geneva Steel mill that once 

operated in Utah County. Sometime after the mill ceased 

operations, the site was acquired by Anderson Geneva LLC and 

Ice Castle Retirement Fund LLC (collectively, Geneva). Geneva 

then entered into a contract with Val Peterson Inc. (VPI) and 

Tennant Metals Pty. Ltd. (Tennant), under which VPI agreed to 

both purchase and remove about two million tons of industrial 

byproducts that remained on the site so that Geneva could 

develop the property for other uses and Tennant agreed to 

guarantee VPI’s performance by providing funding for the 
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project. Separately, Metalcorp Group BV (Metalcorp) guaranteed 

Tennant’s performance.

¶2 After VPI began its removal of the industrial byproducts, 

Tennant and Metalcorp allegedly failed to provide the promised 

funding, leaving VPI unable to perform and causing Geneva to 

terminate the contract. VPI then sued Tennant and Metalcorp 

(collectively, Defendants), and Defendants moved to dismiss 

VPI’s numerous claims for failure to state a claim upon which 

relief can be granted.

¶3 The district court granted Defendants’ motion and 

dismissed all of VPI’s claims. VPI now appeals. We reverse the 

dismissal of VPI’s breach of contract claims against Tennant, but 

we otherwise affirm the dismissal of VPI’s claims. Accordingly,

we remand this case to the district court for further proceedings.

BACKGROUND1

The Facts

¶4 Geneva owned a decommissioned steel mill site in Utah

County. The site contained approximately two million metric tons 

of industrial byproducts referred to as “Red Sea” and “Black Sea” 

(the Red Sea byproducts). Geneva wanted to hire someone to 

undertake the extraction of the Red Sea byproducts (the Geneva 

project) so that Geneva could develop the land for residential and 

other uses.

¶5 In August 2011, VPI’s president learned of the Geneva 

project. Shortly thereafter, he was introduced to a general 

1. “Because this is an appeal of the trial court’s grant of a rule 

12(b)(6) motion, we accept as true the facts alleged in the 

complaint and, accordingly, recite the facts as contained therein.” 

Williams v. Bench, 2008 UT App 306, n.2, 193 P.3d 640.
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manager of Tennant, and the two discussed an arrangement 

whereby “VPI would extract the [Red Sea byproducts] and move 

those materials to ports on the West Coast . . . and then Tennant 

would take possession of the [Red Sea byproducts] for shipment 

to and sale in China.” VPI and Tennant thereafter completed steps 

to evaluate the likely success of such a venture, including by 

conducting a feasibility study and a resource-definition study. 

These studies showed that the Red Sea byproducts “could be 

removed and sold at a price of $145 per ton for delivery in China,” 

that this would result in a gross value of over $136 million, and 

that “the cost to ship the [Red Sea byproducts] to China would be 

$86 per ton.”

¶6 On April 24, 2012, VPI, Tennant, and Geneva entered into 

an agreement entitled “Contract for Purchase of Iron Byproducts” 

(the Purchase Contract). Under the Purchase Contract, Geneva 

agreed to sell the Red Sea byproducts for $5 per ton and VPI 

agreed to “purchase and remove” all of the Red Sea byproducts. 

The Purchase Contract was lengthy and detailed, not only setting 

forth the terms related to the financial aspects of the sale but also 

specifying a number of requirements related to the removal itself, 

such as recognizing that “time is of the essence” and that Geneva 

needed the Red Sea byproducts removed “as soon as possible to 

facilitate development of the [p]roperty”; granting a limited 

license to use the property during the removal process; and 

setting benchmarks and deadlines for the removal. 

¶7 As a signatory to the Purchase Contract, Tennant 

“absolutely and unconditionally guarantee[d] to [Geneva] the 

payment and financial performance by [VPI] of all of its duties 

and obligations under [the Purchase Contract]” and 

“guarantee[d] the full and faithful payment and financial 

performance by [VPI].” Additionally, Metalcorp, Tennant’s 

parent company, executed an Acknowledgment and Guarantee 

(the Guarantee), by which it guaranteed to Geneva the 

performance of Tennant’s obligations under the Purchase 
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Contract. Thus, Tennant guaranteed the performance of VPI, and 

Metalcorp guaranteed the performance of Tennant.

¶8 VPI and Tennant also executed a Memorandum of 

Understanding (the MOU). The MOU said that it was to “serve[] 

as an [a]greement for the execution of work associated with the 

purchase and removal of [the Red Sea byproducts] from [Geneva] 

. . . and [the sale] and delivery of [the Red Sea byproducts] to what 

is anticipated to be predominantly Asian based customers.” The 

MOU specified the portions of the Geneva project for which each 

party would be responsible. It also purported to “create a Joint 

Venture between Tennant and VPI, whereby VPI [would] receive 

a twenty percent interest (20%) of Tennant’s net share of profits 

arising from [the Geneva project].” Further, the MOU spoke to 

future events, referencing “a strategic relationship between the 

[p]arties” wherein they would offer each other the first rights of 

refusal on future projects, and discussing an anticipated 

“Participation Agreement” that the parties would enter into,

“some key terms” of which were listed in the MOU.2

¶9 VPI commenced performance of its obligations under the 

Purchase Contract in late July 2012, “including but not limited to 

2. Two additional defendants not mentioned previously came into 

play at this stage: Horus Capital Incorporated and Metal 

Extraction Corporation, which is a joint venture of Tennant and 

Horus Capital Incorporated. Metal Extraction Corporation was 

created during this same general timeframe, allegedly to “lay[] off 

some of Tennant’s financial risk relating to [the Geneva project].” 

Tennant “assigned its rights and obligations under the Purchase 

Contract and the MOU” to this joint venture.

All claims against these two additional defendants were 

dismissed without prejudice under rule 4(b) of the Utah Rules of 

Civil Procedure due to VPI’s failure to timely serve them. Thus, 

we do not address on appeal any of the claims against these 

parties.
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obtaining all necessary permits for the work, obtaining required 

insurance coverages, and engaging subcontractors.” VPI was able 

to finance the first six weeks of performance “with its own capital 

and with payments from [D]efendants,” but on or about 

September 15, 2012, Defendants “failed and refused . . . to meet 

their obligations to fund VPI’s [p]roject performance and 

provided VPI with no further funding.” VPI was therefore unable 

to meet its obligations under the Purchase Contract, and Geneva 

terminated the agreement.

VPI’s Causes of Action

¶10 Nearly six years later, on August 22, 2018, VPI commenced 

this action against Defendants. Thereafter, VPI twice amended its 

complaint, the most recent version of which contains nine causes 

of action.

¶11 VPI’s first cause of action contains claims against Tennant 

for breach of contract. Specifically, VPI alleges that Tennant 

breached both the Purchase Contract and the MOU by “refus[ing] 

and/or fail[ing] to fund [the Geneva project] operations and/or [to] 

perform its other contractual obligations in the Purchase Contract 

and the MOU.”

¶12 VPI’s third cause of action3 contains claims against 

Metalcorp for breach of contract. VPI alleges that “Metalcorp 

breached the Purchase Contract and the Guarantee by failing to 

provide funding to VPI to perform its obligations under the 

Purchase Contract.”

¶13 VPI’s fourth cause of action is a third-party beneficiary 

breach of contract claim against Metalcorp. For this claim, VPI 

alleges that if “the Purchase Contract and the Guarantee did not 

create enforceable contractual agreements between [VPI] and 

3. VPI’s second cause of action is solely against Metal Extraction 

Corporation, and we do not address it. See supra note 2.
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Metalcorp,” then VPI is a third-party beneficiary of the Purchase 

Contract and of the Guarantee and was damaged when 

“Metalcorp breached the Purchase Contract and the Guarantee by 

failing to provide funding to VPI to perform its obligations under 

the Purchase Contract.”

¶14 VPI’s fifth cause of action contains breach of fiduciary duty 

claims against both Defendants. For this claim, VPI alleges that 

because of the joint venture allegedly created by the MOU, 

Defendants owed fiduciary duties to VPI, including the duties of 

good faith and loyalty, and that Defendants breached those 

duties.

¶15 VPI’s sixth, seventh, and eighth causes of action are all 

equitable claims against both Defendants. The sixth is a claim of 

unjust enrichment based on the theory of a “contract implied in 

law.” The seventh is a claim of unjust enrichment based on the 

theory of a “contract implied in fact.” The eighth asserts equitable 

estoppel. For each of these, VPI alleges that if “the Purchase 

Contract and the Guarantee did not create enforceable contractual 

agreements between [VPI] and Defendants,” then equity should 

intervene to prevent Defendants “from retaining the benefits they 

obtained from [VPI].”

¶16 Finally, VPI’s ninth cause of action asserts alter ego

liability. Specifically, VPI alleges that “there is a unity of interest 

and ownership such that there is no separation of the corporate 

personalities of [Tennant and Metalcorp]” and, therefore, that 

Metalcorp should be “liable for the conduct, actions, liabilities, 

and any judgments awarded” against Tennant.

Defendants’ Motion to Dismiss

¶17 Defendants responded to VPI’s complaint by filing a 

motion under rule 12(b)(6) of the Utah Rules of Civil Procedure to 

dismiss each of VPI’s claims against them. In their motion, 

Defendants argued that all of VPI’s claims were barred by 
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applicable statutes of limitations. They also argued that the MOU 

was not an enforceable contract, that Metalcorp owed no 

contractual duties to VPI, that VPI was not a third-party 

beneficiary of either the Purchase Contract or the Guarantee, that 

VPI’s breach of fiduciary duty claims were barred by the 

economic loss rule, that VPI’s equitable claims were precluded by 

the existence of valid contracts, and that VPI’s alter ego claim is 

not a stand-alone cause of action.

¶18 VPI opposed the motion and argued that its various causes 

of action had not, as a matter of law, failed to state claims upon 

which relief could be granted and that dismissal would be

inappropriate.

¶19 The district court held a hearing on the motion to dismiss 

and issued its ruling about three weeks later. The court ruled in 

favor of Defendants and dismissed all of VPI’s causes of action. 

The court determined that the majority of VPI’s claims were 

barred by a four-year statute of limitations, that the MOU was not 

an enforceable contract, that VPI was not a third-party beneficiary

of the Purchase Contract or the Guarantee, that the economic loss 

rule barred VPI’s breach of fiduciary duty claims, that VPI’s 

equitable claims were precluded by the existence of valid 

contracts, and that alter ego is not a stand-alone claim. VPI now 

appeals.

ISSUES AND STANDARDS OF REVIEW

¶20 VPI contests the district court’s dismissal of each of its 

claims. “When reviewing a rule 12(b)(6) motion to dismiss, we 

accept the factual allegations in the complaint as true and 

interpret those facts, and all reasonable inferences drawn 

therefrom, in a light most favorable to the plaintiff as the 

nonmoving party.” National Title Agency LLC v. JPMorgan Chase 

Bank NA, 2018 UT App 145, ¶ 7, 429 P.3d 758 (cleaned up), cert. 

denied, 432 P.3d 1232 (Utah 2018). “Because the propriety of a 
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motion to dismiss is a question of law, we review the dismissal for 

correctness.” Id. (cleaned up).

ANALYSIS

¶21 “Rule 12(b)(6) concerns the sufficiency of the pleadings, not 

the underlying merits of a particular case.” Alvarez v. Galetka, 933 

P.2d 987, 989 (Utah 1997). Thus, “a motion to dismiss should be 

granted only if, assuming the truth of the [factual] allegations in 

the complaint and drawing all reasonable inferences therefrom in 

the light most favorable to the plaintiff, it is clear that the plaintiff 

is not entitled to relief.” Hudgens v. Prosper, Inc., 2010 UT 68, ¶ 14, 

243 P.3d 1275 (cleaned up). “The district court is not permitted to 

consider dueling evidence or make findings on disputed facts.” 

1600 Barberry Lane 8 LLC v. Cottonwood Residential O.P. LP, 2021 

UT 15, ¶ 43, 493 P.3d 580. We employ these principles as we 

address each of VPI’s claims on appeal.

I. First Cause of Action

¶22 VPI’s first cause of action alleges two breach of contract 

claims against Tennant: (A) that Tennant breached the Purchase 

Contract and (B) that Tennant breached the MOU. We address 

each of these claims in turn.

A. VPI’s Claim Against Tennant for Breach of the Purchase 

Contract

¶23 VPI argues that the district court erred in dismissing—at 

this stage of the proceedings—its claim against Tennant for breach 

of the Purchase Contract as being time-barred by the four-year 

statute of limitations contained in the Uniform Commercial Code 

(the UCC). We agree.

¶24 The assertion that a statute of limitations applies to bar a 

claim is an affirmative defense. Barnard & Burk Group, Inc. v. Labor 
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Comm’n, 2005 UT App 401, ¶ 6, 122 P.3d 700. Because affirmative 

defenses “often raise issues outside of the complaint, [they] are 

not generally appropriately raised in a motion to dismiss under 

rule 12(b)(6).” Tucker v. State Farm Mutual Auto. Ins. Co., 2002 UT 

54, ¶ 7, 53 P.3d 947. But if “the existence of the affirmative defense 

. . . appear[s] within the complaint itself”—“for example, a 

complaint showing that the statute of limitations has run on the 

claim”—then “a motion to dismiss under rule 12(b)(6) may raise 

affirmative defenses.” Id. ¶ 8 (cleaned up).

¶25 Here, the parties agree, at least for purposes of the motion 

to dismiss, that VPI’s claim against Tennant for breach of the 

Purchase Contract arose on September 15, 2012, when Tennant 

allegedly refused to provide additional funding to facilitate VPI’s 

removal of the Red Sea byproducts. And VPI commenced this 

case nearly six years later, on August 22, 2018. The parties 

disagree, however, as to which statute of limitations applies to 

this claim.

¶26 Defendants argue that the Purchase Contract was a 

contract for the sale of goods—i.e., the sale of the Red Sea 

byproducts—and, therefore, that the four-year statute of 

limitations from the UCC applies to any breach of contract claim 

arising from it. See Utah Code § 70A-2-725(1) (“An action for 

breach of any contract for sale must be commenced within four 

years after the cause of action has accrued.”); see also id. § 70A-2-

102 (“Unless the context otherwise requires, this chapter applies 

to transactions in goods . . . .”). VPI, on the other hand, argues that 

the Purchase Contract is for the provision of services—i.e., the 

removal of the Red Sea byproducts—and, therefore, that the sixyear statute of limitations for claims based “upon any contract, 

obligation, or liability founded upon an instrument in writing”

applies. Id. § 78B-2-309(1)(b). When faced with these competing 

arguments, the district court determined that Utah law required 

it to assess “the primary purpose” of a contract when deciding the 
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correct statute of limitations and found that “the primary purpose 

of [the Purchase Contract] was for the sale of goods.”

¶27 Despite the parties’ contrary contentions, it is clear that the 

Purchase Contract is an agreement for both the sale of goods and

the provision of services. For such contracts, Utah has “adopted 

the one-law approach, which applies the UCC to the entire 

contract if it is predominately a contract for goods” and applies 

the common law if “the contract is primarily for services.” Salt 

Lake City Corp. v. Sekisui SPR Ams., LLC, 482 F. Supp. 3d 1177, 

1187–89 (D. Utah 2020); see also Utah Local Gov’t Trust v. Wheeler 

Mach. Co., 2008 UT 84, ¶ 30, 199 P.3d 949 (“If service 

predominates, and the transfer of title to personal property is only 

an incidental feature of the transaction, the contract does not fall 

within the ambit of the UCC.” (cleaned up)). Thus, the 

“predominant purpose test” determines which statute of 

limitations applies to VPI’s claim, and the district court was 

correct to apply this test.4 See Sekisui, 482 F. Supp. 3d at 1187–89.

4. Defendants assert that VPI “failed to preserve its predominant 

purpose argument” for appeal because it did not raise the issue 

until the hearing on the motion to dismiss and, even then, did not 

support the argument with “any analysis of supporting 

authorities.” “The fundamental purpose of the preservation rule 

is to ensure that the district court had a chance to rule on an issue 

before an appellate court will address it.” Helf v. Chevron U.S.A. 

Inc., 2015 UT 81, ¶ 42, 361 P.3d 63. Thus, we consider an issue 

preserved for appeal “when the district court was given notice of 

the issue . . . and when the court in response to such notice made 

a specific ruling on the issue.” Pratt v. Nelson, 2007 UT 41, ¶ 24, 

164 P.3d 366. Here, this issue was raised before the district court, 

the court had time to consider the issue in the several weeks 

before ruling, and the court ultimately made a specific ruling on 

the issue. Therefore, this issue is preserved for appeal.
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¶28 “To determine the predominant purpose of the [c]ontract, 

the court first looks to the language of the agreement.” Salt Lake 

City Corp. v. Southwest Pipeline & Trenchless Corp., 561 F. Supp. 3d 

1160, 1166 (D. Utah 2021). Here, the parties glean very different 

purposes from the text of the Purchase Contract. Defendants

assert that the Purchase Contract was predominantly (if not 

solely) for the sale of goods. They point to several factors to 

support that assertion: (1) the Purchase Contract is titled 

“Contract for Purchase of Iron Byproducts,” (2) the Purchase 

Contract refers to VPI by the title “Purchaser,” (3) the Purchase 

Contract’s terms frequently mention the sale of goods, and (4) the 

removal tasks assigned to VPI in the Purchase Contract have no

specific payment amount associated with them. VPI, on the other 

hand, asserts that many factors point to the opposite conclusion—

that the Purchase Contract is predominantly one for services: 

(1) the Purchase Contract emphasizes the expeditious removal of 

all the Red Sea byproducts, (2) the Purchase Contract contains 

benchmarks focused on the mechanism and speed of removing 

specified quantities of Red Sea byproducts weekly, (3) VPI was to 

purchase the Red Sea byproducts for $5 per ton when the 

potential resale value was apparently many times that amount at 

$145 per ton, (4) the Purchase Contract included a temporary 

license for VPI to use Geneva’s property during removal of the 

Red Sea byproducts, and (5) the parties were not merchants but, 

instead, included a real estate developer (which wanted its 

property cleared for development) and a construction contractor. 

Clearly, the Purchase Contract can be seen in various lights.

¶29 These differing interpretations based on the text of the 

Purchase Contract highlight that, while courts must first look to 

the text of the contract, they must also “consider facts outside of

the four corners of the contract to determine its primary purpose, 

including the circumstances of the contract’s negotiation, 

formation, and performance.” Sekisui, 482 F. Supp. 3d at 1189. And 

because the predominant purpose inquiry looks beyond the four 

corners of the contract, it cannot be resolved on a rule 12(b)(6) 
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motion when the complaint “do[es] not paint a full picture of the 

formation and performance of the [contract].” Id. This is the 

situation here. The text of VPI’s complaint and the documents 

attached to it—the only things we may look to when reviewing a 

dismissal under rule 12(b)(6), see Oakwood Village LLC v. Albertsons, 

Inc., 2004 UT 101, ¶¶ 9–10, 104 P.3d 1226—did not present the

district court with “a full picture” of the Purchase Contract’s 

negotiation, formation, and performance. Thus, a determination 

of its predominant purpose (and, by extension, the applicable

statute of limitations) was inappropriate at this stage of the 

proceedings. See Southwest Pipeline, 561 F. Supp. 3d at 1166.5

¶30 This is not to say that the predominant purpose of a hybrid 

contract cannot in some situations be decided as a matter of law. 

But if the court needs to look beyond the complaint and 

documents attached to it to determine the predominant purpose, 

dismissal under rule 12(b)(6) is improper. These principles are 

highlighted in two cases discussed in the briefs on appeal. In Salt 

Lake City Corp. v. Sekisui SPR Americas, LLC, 482 F. Supp. 3d 1177 

(D. Utah 2020), the court addressed an issue essentially identical 

to the one before us, that is, whether a “breach of contract 

crossclaim was governed by the four-year UCC statute of 

limitations for a claim based on [a] contract for the sale of goods 

or whether the crossclaim was governed by the six-year statute of 

limitations for a claim based on a written contract for services.” 

5. For this case, one significant set of facts that is still needed to 

paint a full picture of the Purchase Contract’s negotiation, 

formation, and performance is more complete information 

regarding the fair market value of the Red Sea byproducts and, 

relatedly, whether the $5 per ton price bargained for was a 

reduced price to offset the value of the byproduct removal. See 

Salt Lake City Corp. v. Southwest Pipeline & Trenchless Corp., 561 F. 

Supp. 3d 1160, 1166 (D. Utah 2021) (stating that a consideration in 

the predominant purpose test is “the cost of the goods and nongoods portions of the contract” (footnote omitted)).
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Id. at 1186. The court recognized that the predominant purpose 

test was applicable to the determination but that the test could not 

be resolved on a rule 12(b)(6) motion because “consider[ing] only 

the well-pleaded facts of the complaint,” “there [was] little factual 

context concerning the negotiation and formation of the contract.” 

Id. at 1188–89. “Perhaps most importantly,” neither the crosscomplaint nor the contract at issue “state[d] the full cost of the 

goods sold . . . or the full cost or value of the . . . services 

provided.” Id. at 1189. The court concluded that “[w]ithout this 

key information, [it could not] determine whether goods or 

services predominate[d] at [that] stage of the proceedings.” Id.

¶31 The same crossclaim (after having been consolidated with 

a separate case involving the same parties) was again addressed

by the court over a year later in Salt Lake City Corp. v. Southwest 

Pipeline & Trenchless Corp., 561 F. Supp. 3d 1160 (D. Utah 2021), 

this time when summary judgment was sought on the statute of 

limitations issue. See id. at 1164. During the intervening year, the 

parties had submitted affidavits and presumably engaged in 

other discovery. See id. at 1164, 1169. This time, the court first 

examined the language of the contract and determined that the 

contract appeared to be predominantly for the sale of goods, see 

id. at 1166–69, but the court also then considered evidence from 

outside the four corners of the contract to determine whether that 

evidence “create[d] a genuine dispute of material fact as to the 

predominant purpose of the contract,” see id. at 1169–70. When the 

court determined that the additional evidence did not create a 

genuine dispute regarding the predominant purpose of the 

contract, it concluded that the UCC’s four-year statute of 

limitations applied as a matter of law and granted summary 

judgment on the crossclaim. See id. at 1170–71.

¶32 In sum, although the predominant purpose of a contract 

may, under certain conditions, be determined as a matter of law, 

when the issue is before a court on a rule 12(b)(6) motion, a 

determination of the contract’s predominant purpose is improper 
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if the text of the contract and the allegations of the complaint do 

not present a complete picture of the circumstances surrounding 

the contract’s negotiation, formation, and performance. Because 

we determine that such a complete picture was not before the 

district court here, dismissal based on application of the 

predominant purpose test was inappropriate at this stage of the 

proceedings. We therefore reverse the district court’s dismissal of 

VPI’s claim for Tennant’s alleged breach of the Purchase Contract.

B. VPI’s Claim Against Tennant for Breach of the MOU

¶33 The district court also applied the UCC’s four-year statute 

of limitations to VPI’s breach of contract claim based on Tennant’s 

alleged breach of the MOU. For the same reasons given in Part 

I.A, dismissal on this ground was inappropriate at this stage of 

the proceedings. However, the district court additionally

determined that any contract claims based on the MOU should be 

dismissed for an independent reason: because the MOU is not an 

enforceable contract but, instead, an unenforceable agreement to 

agree. VPI contests this alternate ground for dismissal of its claim 

against Tennant for breach of the MOU. We agree with VPI that 

dismissal on a rule 12(b)(6) motion was inappropriate under this 

reasoning as well. 

¶34 “To form an enforceable contract, the parties must have a 

meeting of the minds on the essential terms of the contract.” Bloom 

Master Inc. v. Bloom Master LLC, 2019 UT App 63, ¶ 13, 442 P.3d 

1178 (cleaned up). “So long as there is any uncertainty or 

indefiniteness, or future negotiations or considerations to be had 

between the parties, there is not a contract.” Id. (cleaned up). “An 

agreement to agree at some later date is thus unenforceable.” Id.

¶ 14.

¶35 The district court’s determination that the MOU is an 

unenforceable agreement to agree was based on the following

language in the MOU regarding the parties’ intent to enter into a 

participation agreement in the future: “Tennant has agreed in 
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principle to go into a ‘Participation Agreement’ with VPI, some 

key terms of which are enumerated in this MOU. This 

participation agreement concerns profit share, risk allocation and 

funding of the Geneva project.” By this language, the parties 

clearly expressed an intention to enter into some further 

agreement that would contain the remaining “key terms” 

regarding the Geneva project. VPI concedes that the MOU 

contemplates that “further negotiations would occur” regarding 

the Geneva project, but it argues that “the principal function of 

the MOU was to create [a] Joint Venture, not to provide an 

exhaustive plan of action for the Joint Venture’s work on the 

[Geneva] [p]roject.” That is, VPI argues that even if the MOU is 

not an enforceable contract as to all of the rights and 

responsibilities of the parties regarding the Geneva project, the 

MOU is an enforceable contract to create a joint venture.6 The 

6. Defendants argue that this issue was not preserved for appeal. 

We disagree. In VPI’s opposition to the motion to dismiss, it 

argued that “rather than sell goods, the MOU, by its express 

terms, ‘create[s] a Joint Venture’ between Tennant and [VPI].” 

(First alteration in original.) Further, VPI’s counsel addressed the 

issue at some length during the hearing on the motion to dismiss, 

stressing that the focus should not be on the MOU language that 

mentioned a future agreement but, rather, the MOU language that 

created a joint venture: 

[I]t says, “Shall create a joint venture.” It doesn’t say, 

“This is a memorandum of understanding where 

we might agree to a joint venture.” . . . So it’s not an 

agreement to agree. It is saying “We agree that as 

soon as we sign the bottom line, these parties are 

creating a joint venture . . . .”

Hence, the issue was “presented to the [district] court in such a 

way that the [district] court ha[d] an opportunity to rule on that 

issue,” Brookside Mobile Home Park, Ltd. v. Peebles, 2002 UT 48, ¶ 14, 

48 P.3d 968, and the issue was appropriately preserved for our 

review on appeal. 
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MOU does certainly purport to create a joint venture between the 

parties. But this alone is not dispositive of whether a joint venture 

was actually created by the MOU; instead, such a determination 

must still assess whether the various required elements of a joint 

venture are present. See Betenson v. Call Auto & Equip. Sales, Inc., 

645 P.2d 684, 686 (Utah 1982) (“Even the use of the words ‘joint 

venture’ in a contract will not be found determinative if the 

elements of a joint venture are missing.”). 

¶36 “A joint venture is an agreement between two or more 

persons ordinarily but not necessarily limited to a single 

transaction for the purpose of making a profit.” Bassett v. Baker, 

530 P.2d 1, 2 (Utah 1974). 

The requirements for the relationship are not exactly 

defined, but certain elements are essential: The 

parties must combine their property, money, effects, 

skill, labor and knowledge. As a general rule, there 

must be a community of interest in the performance 

of the common purpose, a joint proprietary interest 

in the subject matter, a mutual right to control, a 

right to share in the profits, and unless there is an 

agreement to the contrary, a duty to share in any 

losses which may be sustained.

Id.; accord Ellsworth Paulsen Constr. Co. v. 51-SPR-LLC, 2008 UT 28, 

¶ 15, 183 P.3d 248. Thus, to ultimately succeed on its claim 

regarding the MOU, VPI will need to establish that the parties had 

reached an agreement on each of the required elements of a joint 

venture when executing the MOU. 

¶37 The MOU does not on its face specifically establish each of

the essential elements for a joint venture, but neither does it

specifically exclude them or plainly leave them for future

determination. Rather, the MOU’s language as it relates to this

issue suffers from some ambiguity—not being entirely clear as to

what exactly was encompassed in the parties’ stated agreement to
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“create a Joint Venture.” It is conceivable that after discovery 

related to the parties’ intentions, extrinsic evidence will show that

the parties intended to form a joint venture—including all of its

required elements—by their execution of the MOU. See generally

Brady v. Park, 2019 UT 16, ¶ 29, 445 P.3d 395 (“[I]f a contract term

is ambiguous, district courts should consider extrinsic evidence to

resolve the ambiguity.”). Because VPI alleges an agreement to

form a joint venture and a breach of that agreement, and because

the terms of the MOU do not specifically preclude or definitively

leave for future determination any of the essential elements of a 

joint venture, it was error for the district court to dismiss—at this

stage of the proceedings—VPI’s breach of contract claim based on

an alleged breach of a joint venture agreement under the rationale 

of an unenforceable agreement to agree. See Betenson, 645 P.2d at 

686–87 (holding that “agreements entered into by the plaintiffs

and [a defendant] were not joint venture agreements” only after

identifying contractual language that “specifically excluded” the

possibility of a joint venture). We therefore reverse the district 

court’s dismissal of VPI’s claim for Tennant’s alleged breach of the 

joint venture agreement allegedly reflected in the MOU.

II. Third Cause of Action: 

VPI’s Breach of Contract Claims Against Metalcorp

¶38 In its third cause of action, VPI alleges claims of breach of 

contract against Metalcorp based on Metalcorp’s alleged breach 

of the Purchase Contract and the Guarantee. The district court 

dismissed this cause of action based on the above statute of 

limitations rationale and did not reach Defendants’ additional 

arguments for dismissal of this cause of action. Again, for the 

reasons discussed above, see supra Part I.A, we do not agree with 

dismissal—at least not at this stage of the proceedings—of this 

cause of action based on the statute of limitations; nonetheless, we 

affirm the dismissal of this cause of action based on an alternative 

ground that is apparent in the record. See Madsen v. Washington 

Mutual Bank FSB, 2008 UT 69, ¶ 26, 199 P.3d 898 (“When 
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reviewing a decision made on one ground, we have the discretion 

to affirm the judgment on an alternative ground if it is apparent 

in the record.” (cleaned up)).

¶39 Metalcorp is not a party to the Purchase Contract, which

expressly identifies the parties as VPI, Tennant, and Geneva. 

Moreover, VPI is not a party to the Guarantee. “A guaranty is a 

separate, independent and collateral contract in which the 

guarantor undertakes the obligation to pay for debts incurred by, 

or the performance of some duty by, another person or entity.” 

CIG Toledo LLC v. NZR Retail of Toledo, Inc., 131 N.E.3d 351, 358–

59 (Ohio Ct. App. 2019); accord First Com. Bank, NA v. Walker, 969 

S.W.2d 146, 152 (Ark. 1998) (“A guarantor is one who makes a 

contract, which is distinct from the principal obligation, to be 

collaterally liable to the creditor if the principal debtor fails to 

perform.”). The party whose performance is being guaranteed “is 

not a party to [the] guaranty, and the guarantor is not a party to 

the principal obligation.” Boxum v. Munce, 751 N.W.2d 657, 663 

(Neb. Ct. App. 2008). Here, Metalcorp is plainly a party to the 

Guarantee because it is the entity making the promises contained 

in the Guarantee. Yet because Metalcorp “agrees to absolutely and 

unconditionally guarantee to [Geneva] . . . all obligations of 

Tennant as set forth in Section 15 of the [Purchase] Contract” and 

makes no promise to any other person or entity, Geneva is the 

only other party to the Guarantee.7

7. VPI’s second amended complaint nevertheless alleges that VPI 

“is a named party to . . . [the] [G]uarantee.” However, because this 

allegation is at odds with the unambiguous language of the 

Guarantee, it is a legal conclusion, see Carrier Brokers, Inc. v. 

Spanish Trail, 751 P.2d 258, 261 (Utah Ct. App. 1988) (stating that 

“interpretation of what we believe is an unambiguous written 

contract” is a “legal question”), and when ruling on a motion to 

dismiss, we “need not accept legal conclusions . . . couched as 

(continued...)
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¶40 Because Metalcorp is not a party to the Purchase Contract 

and VPI is not a party to the Guarantee, Metalcorp owes VPI no 

contractual duty, and VPI cannot make out a breach of contract 

claim against Metalcorp. See Richards v. Cook, 2013 UT App 250, 

¶ 7, 314 P.3d 1040 (“The elements of a prima facie case for breach 

of contract are (1) a contract, (2) performance by the party seeking 

recovery, (3) breach of the contract by the other party, and 

(4) damages.” (cleaned up) (emphasis added)). Accordingly, we 

affirm the district court’s dismissal of VPI’s third cause of action. 

III. Fourth Cause of Action:

VPI’s Third-party Beneficiary Claim Against Metalcorp

¶41 As an alternative to its direct breach of contract claim 

against Metalcorp, VPI alleges as its fourth cause of action a thirdparty beneficiary claim for breach of contract against Metalcorp.

In this regard, VPI asserts that it was “an intended third-party 

beneficiary of both [the Purchase Contract and the Guarantee]”

and can therefore maintain a claim for breach of those agreements 

by Metalcorp.

¶42 “Third-party beneficiaries are persons who are recognized 

as having enforceable rights created in them by a contract to 

which they are not parties and for which they give no 

consideration.” SME Indus., Inc. v. Thompson, Ventulett, Stainback 

& Assocs., Inc., 2001 UT 54, ¶ 47, 28 P.3d 669 (cleaned up), holding 

modified by Sunridge Dev. Corp. v. RB & G Eng’g, Inc., 2010 UT 6, 

230 P.3d 1000. The Purchase Contract expressly states that it has 

no third-party beneficiaries. Moreover, as a party to the Purchase 

Contract, VPI cannot, by definition, be a third-party beneficiary 

thereof. See McCall ex rel. Estate of McCall v. SSC Montgomery S. 

Haven Operating Co., No. 2:14-cv-588-MHT-PWG, 2015 WL 

13603823, at *10 (M.D. Ala. Aug. 6, 2015) (holding that a party 

facts,” Miller v. West Valley City, 2017 UT App 65, ¶ 12, 397 P.3d 

761 (cleaned up), cert. denied, 406 P.3d 249 (Utah 2017). 
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“cannot simultaneously be a party to a contract and a third-party 

beneficiary”). We are therefore left with only the question of 

whether VPI is a third-party beneficiary under the Guarantee. 

¶43 “For a third party to have enforceable rights under a 

contract, the intention of the contracting parties to confer a 

separate and distinct benefit upon the third party must be clear.” 

SME Indus., 2001 UT 54, ¶ 47 (cleaned up). This is a high standard. 

“It is not enough that the parties to the contract know, expect or 

even intend that others will benefit from the contract[;] the 

contract must be undertaken for the plaintiff’s direct benefit[,] and 

the contract itself must affirmatively make this intention clear.” 

Id. (cleaned up). There is barely a reference to VPI in the 

Guarantee, let alone anything from which we may infer a clear 

intention to confer a distinct benefit upon VPI. The Guarantee 

expressly intends a benefit to Geneva by guaranteeing Tennant’s 

performance under the Purchase Contract, but there is no 

indication that benefit to a third party is anticipated. Thus, VPI is 

not a third-party beneficiary of the Guarantee, and the district 

court correctly dismissed VPI’s fourth cause of action.

8

IV. Fifth Cause of Action:

VPI’s Breach of Fiduciary Duty Claims Against Defendants

¶44 VPI’s fifth cause of action contains claims of breach of 

fiduciary duties by Defendants. The district court dismissed this 

cause of action based on the economic loss rule. “The economic 

loss rule prevents recovery of economic damages under a theory 

of nonintentional tort when a contract covers the subject matter of 

8. VPI’s second amended complaint alleges that VPI is an 

intended beneficiary of the Guarantee and the Purchase Contract. 

But this also is an allegation at odds with the unambiguous 

language of those contracts and is thus an erroneous legal 

conclusion that we need not accept in reviewing VPI’s motion to 

dismiss. See supra note 7.
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the dispute.” Reighard v. Yates, 2012 UT 45, ¶ 20, 285 P.3d 1168. 

“Thus, when a conflict arises between parties to a contract 

regarding the subject matter of that contract, the contractual 

relationship controls, and parties are not permitted to assert 

actions in tort in an attempt to circumvent the bargain they agreed 

upon.” Id. (cleaned up).

¶45 VPI does not challenge the court’s determination that the 

economic loss rule bars recovery for breach of fiduciary duties if 

those duties arise out of the contracts at issue between the parties. 

Instead, VPI argues that it “has adequately pleaded the required 

elements of a breach of fiduciary duty claim that exists separate 

from its contract-based claims.” However, even assuming there 

are fiduciary duties that exist outside the contracts at issue here, 

such claims for breach of fiduciary duty “are subject to the general 

four-year statute of limitations.” See National Title Agency LLC v. 

JPMorgan Chase Bank NA, 2018 UT App 145, ¶ 16, 429 P.3d 758, 

cert. denied, 432 P.3d 1232 (Utah 2018); see also Utah Code § 78B-2-

307. And because the alleged breaches of fiduciary duty occurred 

over four years before this case was filed, claims based on such 

breaches would be barred by the statute of limitations. We 

therefore affirm the dismissal of VPI’s claims in its fifth cause of 

action.

V. Sixth, Seventh, and Eighth Causes of Action:

VPI’s Equitable Claims Against Defendants

¶46 VPI argues that the district court erred in dismissing its 

equitable claims of quantum meruit (both contract implied in law 

and contract implied in fact) and estoppel, challenging the district 

court’s reasoning that such claims were “barred where an express 

contract governs the issue.” However, even assuming that the 

district court erred in this regard, these equitable claims allegedly 

arose due to Defendants’ non-payment in late 2012 and would 

therefore have been barred by the four-year catch-all statute of 

limitations, see Utah Code § 78B-2-307, which applies to equitable 
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actions, see American Tierra Corp. v. City of West Jordan, 840 P.2d 

757, 761 (Utah 1992) (applying the catch-all statute of limitations

to an equitable action after relying on both the “principle that 

actions in equity frequently are governed by a state’s catch-all 

limitation statute” and “the Utah precedents that have applied 

our four-year catch-all statute to equitable actions”). We therefore 

affirm the dismissal of VPI’s sixth, seventh, and eighth causes of 

action.

VI. Ninth Cause of Action:

VPI’s Alter Ego Claim

¶47 Finally, VPI contests the dismissal of its ninth cause of 

action, which purports to allege a claim of alter ego liability. VPI 

argues that its alter ego claim should survive if we determine—as 

we have—that any other of its claims survive the motion to 

dismiss. Of course, Defendants are correct that “[a]lter ego theory 

is not an independent claim for relief; rather, it is a theory of 

liability.” Jones & Trevor Mktg., Inc. v. Lowry, 2012 UT 39, ¶ 6 n.1, 

284 P.3d 630. Therefore, the court rightly dismissed VPI’s ninth 

cause of action as a stand-alone claim. “However, to the extent 

[VPI] relies on alter ego as a theory for recovery against 

Defendants under [a] valid cause[] of action, [VPI] is free to 

amend [its] complaint to put Defendants on notice of recovery 

based on that theory.” Al-Fouzan v. Activecare, Inc., No. 2:15-cv373-BCW, 2016 WL 1092495, at *5 (D. Utah Mar. 21, 2016).

CONCLUSION

¶48 The dismissal of VPI’s breach of contract claims against 

Tennant for alleged breaches of the Purchase Contract and the 

MOU (VPI’s first cause of action) was inappropriate at this stage 

of the proceedings, and we reverse this dismissal. We affirm the 

dismissal of all other causes of action. However, VPI may amend 

its complaint to include alter ego as a theory of recovery under its 
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20210732-CA 23 2023 UT App 115

surviving claims as appropriate. We remand the case to the 

district court for further proceedings consistent with this opinion.