2023 UT App 136

THE UTAH COURT OF APPEALS

FARM BUREAU MUTUAL INSURANCE,

Appellant and Cross-appellee,

v.

JARED H. WESTON, FARMERS INSURANCE EXCHANGE, PREMATIC 

SERVICE CORPORATION, AND WILSON GREEN INSURANCE AGENCY,

Appellees and Cross-appellants.

Opinion

No. 20180699-CA

Filed November 9, 2023

Third District Court, Salt Lake Department

The Honorable Royal I. Hansen

No. 050905850

Trent J. Waddoups, Attorney for Appellant and 

Cross-appellee Farm Bureau Mutual Insurance

Troy L. Booher, Beth E. Kennedy, and 

Dick J. Baldwin, Attorneys for Appellees and 

Cross-appellants Farmers Insurance Exchange and 

Wilson Green Insurance Agency

Daniel F. Bertch, Attorney for Appellee and 

Cross-appellant Jared H. Weston

JUDGE GREGORY K. ORME authored this Opinion, in which 

JUDGE RYAN D. TENNEY concurred. JUDGE RYAN M. HARRIS 

concurred in Parts I, II, III.A, III.B.2, IV, and V, 

but dissented as to Parts III.B.1 and III.B.3, with opinion.

ORME, Judge:

¶1 This appeal is multifaceted. The threshold issue concerns 

whether an insurance policy Farmers Insurance Exchange 
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20180699-CA 2 2023 UT App 136

(Farmers Insurance1) provided on a vehicle was in effect at the 

time the vehicle was involved in an accident in which the other

driver was killed. Following the first bench trial in this case, the 

trial court held that Farmers Insurance had properly cancelled the 

policy prior to the accident for failure to timely pay a premium. 

Despite this ruling, the issue remained whether Farmers 

Insurance nonetheless breached its duty to defend when it failed 

to offer a defense for Jared H. Weston (Jared)—the driver of the 

vehicle it periodically insured—in a lawsuit Farm Bureau Mutual 

Insurance (Farm Bureau) initiated as the subrogee of the deceased 

driver. The trial court held on summary judgment that Farmers

Insurance breached the duty to defend and, following a second 

bench trial, the court awarded Jared $320,000 in damages for 

emotional distress plus an additional $128,000 in attorney fees for 

that breach. On reconsideration, the court reduced the damages 

award to $0 and entered judgment in Jared’s favor for $105, 

representing only Jared’s costs. The parties raise several issues on 

appeal.

¶2 First, we hold that the arguments Farm Bureau and Jared 

raise on appeal are not moot, and we therefore have jurisdiction 

to consider them. We then affirm the trial court’s determination 

that Farmers Insurance properly cancelled the insurance policy 

prior to the accident and certain other of the court’s summary 

judgment rulings. Finally, we turn to the issues concerning the 

duty to defend. We affirm the court’s ruling that Farmers 

Insurance breached the duty to defend and that Jared is not 

entitled to damages for emotional distress, but we hold that Jared 

is entitled to damages in the amount of the judgment entered 

against him in favor of Farm Bureau plus attorney fees.

1. “Farmers Insurance” refers interchangeably to Farmers 

Insurance Exchange in its individual capacity and to Farmers 

Insurance Exchange, Prematic Service Corporation, and Wilson 

Green Insurance Agency, collectively.
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20180699-CA 3 2023 UT App 136

BACKGROUND2

Insurance Policy

¶3 Joelyn Weston (Joelyn) purchased multiple automobile 

insurance policies from Farmers Insurance, including one for her

1992 Ford Explorer. On several occasions, Joelyn3 was late in 

paying the insurance premiums, resulting in several lapses in 

coverage after Farmers Insurance sent notices of cancellation. In 

September 2003, Farmers Insurance sent Joelyn one such notice of 

cancellation, requiring payment on or before September 16. 

Because Farmers Insurance did not receive full payment until 

October 3, Joelyn’s vehicles were not insured from September 16

until October 3, when Joelyn reinstated the policies.

¶4 That December, a new six-month period of coverage began 

for Joelyn’s vehicles. The declarations page of the policy provided 

2. This appeal arises from the trial court’s grant of summary 

judgment and from its findings of fact and conclusions of law 

following two bench trials. Accordingly, “in reviewing a district 

court’s grant of summary judgment, we view the facts and all 

reasonable inferences drawn therefrom in the light most favorable 

to the nonmoving party and recite the facts [corresponding to 

those issues] accordingly.” Ockey v. Club Jam, 2014 UT App 126, 

¶ 2 n.2, 328 P.3d 880 (quotation simplified). And “on appeal from 

a bench trial, we view the evidence in a light most favorable to the 

trial court’s findings, and therefore recite the facts [corresponding 

to those issues] consistent with that standard and only present 

conflicting evidence to the extent necessary to clarify the issues 

raised on appeal.” Linebaugh v. Gibson, 2020 UT App 108, n.5, 471 

P.3d 835 (quotation simplified).

3. Because Jared and Joelyn Weston share the same last name, we 

refer to them by their first names, with no disrespect intended by 

the apparent informality.
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that the coverage for the vehicles, including for the 1992 Ford 

Explorer, was for a six-month period beginning on December 3, 

2003, and extending until June 3, 2004. The policy provided that 

“[t]his policy with the Declarations includes all agreements 

between you and us” and that “[n]o other change or waiver may 

be made in this policy except by endorsement, new Declarations

or new policy issued by us.”

¶5 Instead of paying the entire amount due for the six-month 

period upfront, Joelyn elected to make monthly payments. 

Accordingly, Endorsement E0022 was incorporated into the 

policy. Endorsement E0022 stated that “[t]his endorsement is part 

of your policy” and that it “supersedes and controls anything to 

the contrary.” Endorsement E0022 amended the policy period “to 

one Calendar month” and provided that “[t]he premium is due 

no later than on the expiration date of the then current monthly 

period.” Following the first bench trial, the trial court found that 

Endorsement E0022 also incorporated into the insurance contract 

the Prematic Service Corporation Monthly Payment Plan 

Agreement (the Prematic Agreement). The trial court found that 

Prematic Service Corporation (Prematic) “is a billing system that 

bills for the Farmers Policies”; that Prematic is entirely owned by 

Farmers Group, Inc.; and that “all Prematic’s employees are 

full-time employees of Farmers Group, Inc.”

¶6 Under the Prematic Agreement, Joelyn, who was referred 

to as “Customer” in the agreement, agreed to appoint Prematic as 

her “agent to budget monthly payment of premiums . . . during 

the term of [the Prematic Agreement] and to make premium 

payments to insurers . . . pursuant to the terms and conditions of 

this Agreement.” She further agreed “to forward to Prematic by 

the due dates set forth in the bill sent by Prematic . . . a sum equal 

to the current monthly payment of the policy(ies) budgeted for 

monthly premium payment under this Agreement and a service 

charge.”
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20180699-CA 5 2023 UT App 136

¶7 Pursuant to Endorsement E0022 and the Prematic 

Agreement, each monthly payment was due on the third of each 

month. The first Prematic bill was for a period of 45 days of 

coverage, and each subsequent bill was for a monthly period of 

coverage.4 This, “by design” according to the trial court, “resulted 

4. The trial court found that “[t]he Prematic billing was calculated 

so that payments were made approximately forty-five (45) days 

before the premium payment was due to” Farmers Insurance.

Farmers Insurance argues that this finding was not supported by 

the evidence. We need not address this issue. On appeal, both 

Jared and Farm Bureau agree that Prematic’s billing practice—

whatever it was—resulted in an approximate 15-day cushion. 

Jared asserted that “the Prematic billing platform billed 15 days 

in advance of the period of coverage billed for.” Similarly, Farm 

Bureau stated that the initial bill charged for a sum that equaled 

“half the amount” of “a monthly premium installment . . . as a 

cushion.” 

 Indeed, the evidence of record demonstrates that although

Prematic’s first bill for the six-month policy period at issue here 

was sent out 45 days in advance and reflected 45 days of coverage,

that first bill “bill[ed] out until December 17th,” which was only 

approximately 15 days into the new policy period that began on 

December 3, 2003. Thus, only about 15 of the days billed were 

attributable to the new policy period and the remaining billed 

days went toward the prior policy period that ended on December 

2. Prematic thereafter billed for a month’s worth of coverage each 

subsequent month, resulting in an approximate 15-day buffer to 

cover the ten days of coverage Farmers Insurance was statutorily 

required to provide following the mailing of a notice of 

cancellation for failure to pay the premium when due. See Utah 

Code Ann. § 31A-21-303(2)(c)(ii) (LexisNexis Supp. 2022).

Farmers Insurance’s records coordinator testified to that effect,

and this is also consistent with Prematic’s practice of billing for 

coverage periods starting on the 18th of one month and ending on 

(continued...)
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20180699-CA 6 2023 UT App 136

in a practice of prepayment of insurance premiums that would 

lead to a refund of insurance premiums, rather than a bill for 

unpaid insurance premiums, upon termination or cancellation of 

the policy.”

¶8 Prematic reserved the right to terminate the Prematic 

Agreement “in the event that . . . Customer has failed to make 

timely payments to Prematic.” The Prematic Agreement further 

provided,

In the event that less than full monthly payment is 

received by Prematic, . . . Customer authorizes 

Prematic to apply any funds received or credited to 

Customer’s accounts as follows: 

(a) first, toward any unpaid balance from a prior 

month;

(b) second, to the current Service Charge as reflected 

on the current Prematic bill;

(c) third, toward the payment of any other fees or 

charges shown on the current Prematic bill; and

(d) [fourth,] toward the payment of current monthly 

premium amounts for any policy(ies) under this 

Agreement, applied pro rata.

Customer acknowledges that less than full payment 

constitutes breach of this Agreement and that 

Prematic has the right to terminate this 

Agreement[.]

the 17th of the next month. It also appears to be consistent with

the refund amount of $130.68 that Farmers Insurance sent Joelyn 

following termination of the policy. See infra note 21.
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20180699-CA 7 2023 UT App 136

Cancellation of the Insurance Policy

¶9 In December 2003, Joelyn received a bill in the amount of

$158.92 for what the bill purported to be the coverage period from 

January 18, 2004, until February 17, 2004, for four vehicles, 

including the 1992 Ford Explorer. The bill stated that it was for 

“Activity processed after: 12-14-03.” Payment was due January 3, 

2004, which Joelyn did not timely pay, later explaining that she 

“[p]robably didn’t have the money at the time.” Sometime after 

January 6 but before January 15, she mailed a check dated January 

6, 2004, for $158.92. Prematic processed the check on January 15,

and payment on the check was withdrawn from Joelyn’s bank 

account on January 16.

¶10 On January 14, the day before her check was processed,

Farmers Insurance issued a notice of cancellation (the Notice of 

Cancellation) to Joelyn. The Notice of Cancellation indicated that 

it “Includes Activity Processed Before: 1-14-04” and stated that 

Joelyn’s policies, including the one for the 1992 Ford Explorer, 

would be cancelled on February 3, 2004, if payment in the amount 

of $220.16 was not received by that same date.

5 Joelyn received the 

Notice of Cancellation “sometime before the February 3, 2004 

cancellation date.” The trial court later found that Joelyn’s 

“history of late payments and cancellations demonstrates she 

understood that failure to pay the full amount due as set forth in 

the . . . Notice of Cancellation would result in cancellation of the 

insurance policy with no right to retroactive reinstatement.” In 

other words, Joelyn “read and understood . . . that if $220.16 was 

5. The $220.16 amount reflected the $158.92 due by January 3, 

2004, plus the amount due in the bill for the following month—

due by February 3, 2004, and covering the period between 

February 18, 2004, and March 17, 2004—minus a $81.88 “credit for 

a coverage change to a 1989 motorhome.”
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20180699-CA 8 2023 UT App 136

not paid by February 3, 2004, all of the Farmers’ Policies would be 

cancelled as of February 3, 2004.”

¶11 Although Prematic processed the $158.92 check on January 

15, it did not receive the remaining $61.24 due under the Notice 

of Cancellation by the February 3 deadline. For this reason, on 

February 14, Farmers Insurance cancelled all of Joelyn’s policies

for non-payment, effective February 3. The trial court later found 

that “[b]ased on her history of late payments and cancellations 

Joelyn Weston understood that her payment of $158.92 . . . and 

Farmers’ subsequent processing of her payment did not satisfy 

the terms outlined in the . . . Notice of Cancellation.” On February 

18, Prematic mailed Joelyn a letter stating that because she had 

not made timely payment, it was cancelling her policies pursuant 

to the Prematic Agreement. It also noted that Farmers Insurance 

“has cancelled your policy, or policies, in accordance with the 

terms of each policy.” Prematic’s letter also included a refund 

check for $130.68, which represented the $158.92 payment minus 

the amount due to Farmers Insurance for the coverage it provided 

until February 3 plus certain credits Joelyn was owed for changes 

made to a policy on a different vehicle.

The Accident

¶12 On February 15, Jared, Joelyn’s son, was involved in an 

automobile accident while driving the 1992 Ford Explorer. The

driver of the other vehicle involved in the accident was killed. 

Joelyn met with her Farmers Insurance agent the following day, 

and the agent informed her that the insurance policy for that 

vehicle had been cancelled effective February 3. Joelyn paid to 

reinstate her insurance policies that day, but they were not 

reinstated retroactively to February 3.

¶13 The driver killed in the accident was insured by Farm 

Bureau. Farm Bureau alleged in its subsequent complaint that it 

paid a total of $111,688.96 in property damages, personal injury 
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20180699-CA 9 2023 UT App 136

protection benefits, and uninsured motorist benefits to the 

driver’s heirs, whereupon Farm Bureau became their subrogee.6

The Lawsuit and the 2009 Judgment 

¶14 In March 2005, Farm Bureau filed its complaint in this 

matter, asserting a negligence claim against Jared.

7 It also joined 

as defendants Farmers Insurance, the agent who wrote the 

Farmers Insurance policy for Joelyn, and Prematic. Farm Bureau

sought declaratory judgment that Farmers Insurance’s policy 

covering the 1992 Ford Explorer was in effect at the time of the 

accident. Jared—represented by counsel he personally hired—

filed a crossclaim against Farmers Insurance alleging, among 

other things, breach of contract, breach of fiduciary duty, and 

breach of the implied covenant of good faith and fair dealing. In 

its answer, Farmers Insurance raised as a defense, in relevant part, 

that the insurance policy had been cancelled effective February 3, 

2004, and it asserted that it was “entitled to a judgment, as a 

matter of law, ruling that there is no cause of action against 

[Farmers Insurance] and that [Farmers Insurance] owe[s] no 

obligation to provide insurance coverage on behalf of Jared 

Weston with respect to the subject accident.”8

6. “The doctrine of subrogation allows an insurer, having paid a 

loss resulting from a peril insured against, to step into the shoes 

of its insured and recoup its losses from a tort-feasor whose 

negligence caused the loss.” Birch v. Fire Ins. Exch., 2005 UT App 

395, ¶ 7, 122 P.3d 696 (quotation simplified). 

7. Farm Bureau did not name Joelyn as a defendant in its lawsuit.

8. The complicated nature of the underlying dispute and the 

multi-faceted nature of this litigation have made for strange 

bedfellows. Initially, Farm Bureau and Jared were adversaries, 

(continued...)
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20180699-CA 10 2023 UT App 136

¶15 In 2008, Jared and Farm Bureau arbitrated the issues of 

liability regarding the accident. The arbitrator found that Jared 

was at fault and liable to Farm Bureau in the amount of 

$684,276.36.9 On March 26, 2009, the trial court confirmed the 

with Jared resisting Farm Bureau’s claim that he was responsible 

for the death of its insured, the driver of the other vehicle involved 

in the accident. When Jared lost that battle, he and Farm Bureau 

became natural allies in the quest to prove that the Farmers 

Insurance policy was in effect at the time of the accident involving 

the 1992 Ford Explorer. Both would benefit if they prevailed on 

this claim because Jared would have coverage for the judgment 

obtained against him by Farm Bureau and Farm Bureau would 

have a ready source of payment of that judgment via Farmers 

Insurance. But after the trial court determined that Farmers 

Insurance properly cancelled the policy prior to the accident, it 

further determined that Farm Bureau no longer had standing to 

litigate the remaining duty to defend issue because the duty 

“flows directly from” Farmers Insurance to Jared. Farm Bureau 

challenges the court’s standing determination on appeal. 

Conversely, Farmers Insurance argues that Farm Bureau lacks 

standing to litigate this issue. Jared, who undoubtedly has 

standing to litigate this issue, defends the court’s separate ruling 

that Farmers Insurance breached its duty to defend Jared. See infra 

note 28. In one other side skirmish regarding whether the 

judgment Farm Bureau obtained against Jared had expired, 

Farmers Insurance and Jared joined forces against Farm Bureau. 

See infra note 11. 

9. This amount reflected $6,375 in funeral costs, $10,184.36 in 

property damages, $217,717 in economic loss, and $450,000 in 

non-economic loss. We note the significant discrepancy between 

this arbitration award and the $111,688.96 amount Farm Bureau 

alleged in its complaint to have paid to the driver’s heirs. An 

explanation for this discrepancy has not been provided in the 

(continued...)
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20180699-CA 11 2023 UT App 136

arbitration award, see Utah Code Ann. § 78B-11-123 (LexisNexis 

2018), and entered judgment against Jared in favor of Farm 

Bureau in the amount of $747,233.15 (the 2009 Judgment), which 

represented the arbitration award plus pre-judgment interest and 

costs, see id. § 78B-11-126(1).10 The 2009 Judgment further 

provided that it “shall be augmented in the amount of reasonable 

costs and attorney fees expended in collecting said Judgment by 

execution or otherwise as shall be established by affidavit.” Farm 

Bureau has not renewed this judgment since it was first entered.11

briefing and is not readily discoverable in the record, but it has no 

bearing on the issues before us.

10. Because the applicable provisions of the Utah Code in effect at 

the relevant times do not materially differ from those currently in 

effect, we cite the current version of the code for convenience.

11. In 2016, Farm Bureau filed an application for a writ of 

execution to enforce the 2009 Judgment. The trial court issued the 

writ in April 2016, and a constable subsequently attempted to 

seize Jared’s vehicle and other possessions. Jared’s counsel had 

numerous discussions with Farm Bureau concerning its collection 

efforts.

 In 2018, Farm Bureau moved the trial court for an award of 

costs and a proposed amended judgment, seeking $11,423.04 in

additional costs. Farmers Insurance and Jared opposed the 

motion, arguing that the judgment had expired in 2017—eight 

years after it was initially entered. The court rejected this 

argument, ruling that the 2009 Judgment “was not a final 

judgment under rule 54(b)” of the Utah Rules of Civil Procedure 

and it “may therefore properly be augmented to include the costs 

requested in Farm Bureau’s” motion. After finding that Farm 

Bureau’s requested costs were reasonable, the court amended the 

judgment to include that amount.
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20180699-CA 12 2023 UT App 136

Partial Summary Judgment and the First Bench Trial

¶16 In June 2008, Farmers Insurance sought partial summary 

judgment that it did not breach the covenant of good faith and fair 

dealing because its denial of coverage was “fairly debatable.”

Jared did not oppose the motion, later explaining that he “chose 

not to engage” because, in his view, those arguments were 

“irrelevant” in the third-party breach of fiduciary duty context. 

The trial court granted Farmers Insurance’s motion on the ground 

that the motion showed that Jared had “not identified facts 

supporting his bad faith claim.” The court ruled that because 

Jared did not oppose the motion, he had not shown that a genuine 

issue of material fact barred summary judgment.

¶17 In 2013, the case then proceeded to a bifurcated bench trial. 

At issue in the first phase of the trial was whether the insurance 

policy covering the 1992 Ford Explorer was in effect at the time of 

the accident. After four days of trial, the trial court concluded that 

Endorsement E0022 and the Prematic Agreement “supersede any 

provisions in the original policy contrary to the Endorsement” 

and that the Prematic Agreement “was effectively a contract 

with” Farmers Insurance because “Prematic is merely a billing 

platform for” Farmers Insurance. The court further held that 

Joelyn’s payment of $158.92 was not timely because it was mailed 

“sometime after January 6, 2004,” which was past the January 3 

due date. The court accordingly concluded that to receive 

coverage beyond the date specified in the Notice of Cancellation, 

Joelyn was required to pay what remained of the $220.16 amount.

And because Joelyn did not pay the remaining balance on or 

before the cancellation date, the court concluded that Farmers 

Insurance “properly canceled the insurance policy pursuant to the 

terms outlined in the . . . Notice of Cancellation and the policy 

provisions” and that Jared “was not insured by Farmers for the 

operation of the 1992 Ford Explorer on February 15, 2004.”
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20180699-CA 13 2023 UT App 136

Summary Judgment and the Second Bench Trial

¶18 Following the first bench trial, Farmers Insurance and 

Farm Bureau filed motions for summary judgment on the issue of 

whether Farmers Insurance breached its duty to defend Jared

against Farm Bureau’s lawsuit. The court ruled that because Farm 

Bureau alleged in its complaint that Farmers Insurance “had not 

complied with the statutory requirements before cancelling the 

. . . insurance coverage for non-payment,” Farmers Insurance 

“was required to defend until the uncertainties could be resolved 

against coverage.” The court further held that although it 

“ultimately found that the cancellation notice was sufficient to 

preclude Farmers’ duty to indemnify, Farmers may not now rely 

on the Court’s findings to avoid its duty to defend.” Accordingly, 

the court held that “by simply denying [Jared’s] tender of 

defense,[12] Farmers breached its duty to defend.” The court, 

however, ruled that genuine issues of material fact precluded 

summary judgment on the issue of the damages resulting from

Farmers Insurance’s breach of its duty to defend Jared. 

¶19 On subsequent motions for summary judgment, the court 

also ruled that because the coverage issue was resolved in favor 

of Farmers Insurance, Farm Bureau no longer had standing to 

litigate the duty to defend issue, which obligation “flows directly 

from” Farmers Insurance to Jared. The court also dismissed, with 

prejudice, Jared’s claims against Prematic on the ground that the

12. “‘Tender of defense’ describes a common-law practice in

which a person or entity against whom an action is brought gives

notice of the suit to a person or entity that may ultimately be liable

for payment of the judgment, by contract or implication of law.” 

Summerhaze Co. v. Federal Deposit Ins. Corp., 2014 UT 28, ¶ 3 n.2, 

332 P.3d 908. “The purpose is to offer the person who may

ultimately be liable the opportunity to appear and defend the

action, because the person or entity may be bound by the

judgment.” Id. (quotation simplified).
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20180699-CA 14 2023 UT App 136

claims were precluded by the court’s prior determination “that 

both Farmers and Prematic complied with the Prematic 

Agreement in applying” Joelyn’s $158.92 payment.

¶20 The case then proceeded to a second bench trial on the 

issue of damages arising from Farmers Insurance’s breach of the 

duty to defend. The court found that Farmers Insurance’s breach 

of the duty to defend “left [Jared] in a state of great worry and 

anxiety after the Accident” until he retained counsel in June 

2005.13 Under the executed attorney/client contract, Jared was 

obligated to pay counsel “a contingency fee of 40% of the total 

present value of the settlement or judgment” but was not 

obligated to pay any attorney fees if there was no recovery. The 

court noted that Jared “has had no complaints about his 

attorneys,” “has had full confidence in [his attorneys], . . . has been 

satisfied with his attorneys’ work and efforts on his behalf, and 

. . . believes that his attorneys have done a good job in all aspects 

of the defense of the Accident.”

¶21 Concerning the 2009 Judgment entered against Jared, the 

court stated that Jared presented “no evidence that a different 

outcome would have resulted had Farmers accepted [Jared’s]

tender of defense.” The court held that Jared did not incur any 

fees under the contingency fee agreement because he did not 

obtain a recovery. Additionally, because Jared presented only 

spreadsheets that the court ruled inadmissible, the court noted 

that Jared “presented no evidence at trial of attorney fees and 

costs incurred in defense of the underlying action.”

13. The court further found that although Jared “has continued to 

experience emotional distress and anxiety” after retaining 

counsel, “such emotional distress and anxiety is attributable 

solely to [Jared’s] potential liability in the underlying case and not 

to Farmers’ breach of the duty to defend.”
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20180699-CA 15 2023 UT App 136

¶22 The court did, however, award Jared $20,000 per month in 

damages for the mental anguish he suffered from the time of the 

accident until he retained counsel, totaling $320,000. The court 

also awarded an additional $128,000 in attorney fees as 

consequential damages, representing the 40% that Jared would 

owe under the contingency fee agreement for his mental anguish 

award.

¶23 Farmers Insurance subsequently moved to amend the 

court’s judgment, arguing, among other things, that Jared “failed 

to present sufficient evidence of his damages.” The court agreed, 

ruling that Jared’s mental anguish “was actually caused by the 

amount of the judgment and the lack of insurance coverage 

therefor, and not by Farmers’ failure to provide [Jared] a defense 

in this matter.” The court stated that Jared’s “intermingling of the 

duty to defend issue with the issues of liability and coverage

improperly leaves the fact-finder to speculate regarding which 

damages were actually caused by Farmers’ breach of the duty to 

defend.” For this reason, the court held that Jared “has . . . failed 

to prove the fact of damages—he has failed to present evidence 

that gives rise to a reasonable probability that he suffered 

damages caused by Farmers’ breach of the duty to defend.” The 

court then reduced the damages award to $0 and later entered 

judgment in Jared’s favor for $105, representing his costs.

¶24 The court then entered the amended judgment in Farm 

Bureau’s favor that reflected an additional $11,423.04 in costs, see

supra note 11, and the $105 judgment in Jared’s favor. Farm 

Bureau subsequently appealed, and Farmers Insurance and Jared 

cross-appealed.

ISSUES AND STANDARDS OF REVIEW

¶25 The parties raise several issues on appeal. We first address 

Farmers Insurance’s motion for summary disposition, which 

challenges this court’s jurisdiction to address Farm Bureau’s 
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20180699-CA 16 2023 UT App 136

appeal and Jared’s cross-appeal. See Hayes v. Intermountain 

GeoEnvironmental Services Inc., 2018 UT App 223, ¶ 2, 437 P.3d 650 

(“The initial inquiry of any court should always be to determine 

whether the requested action is within its jurisdiction.”) 

(quotation simplified). We deferred ruling on Farmers Insurance’s

motion “pending plenary presentation and consideration of the 

appeal during full briefing.” In its motion and later in its brief, 

Farmers Insurance argues that the 2009 Judgment expired “by 

operation of the Utah Code” because it was not satisfied, stayed, 

or renewed in the eight years since its initial entry. Accordingly, 

Farmers Insurance argues that “Farm Bureau lacks standing and 

all of the issues it raises are moot” and that “Jared’s claim 

concerning Farmers’ duty to indemnify is moot because there is 

no liability to indemnify.” The Utah Uniform Arbitration Act (the 

UUAA) and our rules of procedure govern whether the judgment 

at issue was final and enforceable at the time of entry. We review 

a trial court’s interpretation of statutes and rules of procedure for 

correctness. See Ross v. Ross, 2019 UT App 104, ¶ 8, 447 P.3d 104.

Furthermore, “the question of whether an order is final and 

appealable is a question of law.” See Powell v. Cannon, 2008 UT 19, 

¶ 9, 179 P.3d 799 (quotation simplified). Because we ultimately 

conclude that we have jurisdiction over the challenged issues, we 

then proceed to consider those issues.

¶26 Farm Bureau and Jared raise several issues relating to the 

trial court’s determination, following the first bench trial, that the 

policy on the 1992 Ford Explorer was cancelled for nonpayment

prior to the accident. “Following a bench trial, we review a trial 

court’s legal conclusions for correctness, according the trial court 

no particular deference.” Kelly v. Timber Lakes Prop. Owners Ass’n, 

2022 UT App 23, ¶ 23, 507 P.3d 357 (quotation simplified). “We 

review the court’s findings of fact for clear error, granting due 

regard to the opportunity of the trial court to judge the credibility 

of the witnesses.” Id. (quotation simplified).
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20180699-CA 17 2023 UT App 136

¶27 Farmers Insurance challenges the court’s summary 

judgment ruling that Farmers Insurance breached its duty to 

defend Jared. “We review the district court’s ultimate grant or 

denial of summary judgment for correctness. We give no 

deference to the district court’s legal conclusions and consider 

whether the court correctly decided that no genuine issue of 

material fact existed.” Phillips v. Skabelund, 2021 UT App 2, ¶ 15, 

482 P.3d 237 (quotation simplified), cert. denied, 496 P.3d 713 (Utah 

2021). 

¶28 Jared raises several challenges regarding the trial court’s 

damages award for Farmers Insurance’s breach of its duty to 

defend. We review the standard employed by the trial court in 

determining damages for correctness, see Diversified Striping Sys. 

Inc. v. Kraus, 2022 UT App 91, ¶ 46, 516 P.3d 306, but “we review 

for an abuse of discretion the trial court’s determination that [a 

party] failed to introduce sufficient evidence to establish 

damages, and we will not overturn the trial court’s decision 

unless there was no reasonable basis for the decision,” Macris v. 

Sevea Int’l, Inc., 2013 UT App 176, ¶ 26, 307 P.3d 625 (quotation 

simplified).

¶29 Jared also argues that the court erred in granting Farmers

Insurance’s motion for partial summary judgment on Jared’s 

breach of the duty of good faith and fair dealing claim.14 But 

14. In addition, Jared argues that the court erred in declaring his 

$105 judgment against Farmers Insurance satisfied. He argues 

that the judgment cannot be satisfied because he did not cash the 

check Farmers Insurance tendered. But because Jared raises this 

argument solely for the purpose of establishing that he did not 

waive his right to appeal, see Scott Anderson Trucking Inc. v. Nielson

Constr., 2020 UT App 43, ¶ 20, 462 P.3d 822 (“If a judgment is 

voluntarily paid, which is accepted, and a judgment satisfied, the 

controversy has become moot and the right to appeal is waived.”) 

(continued...)
Farm Bureau v. Weston

20180699-CA 18 2023 UT App 136

because Jared did not oppose Farmers Insurance’s motion below, 

his challenge is unpreserved. See Turley v. Childs, 2022 UT App 85,

¶ 29, 515 P.3d 942. In such cases, “we must review for correctness 

the question of whether the movant’s papers, on their face, 

indicate that the movant is entitled to judgment as a matter of 

law.” Id. We do not consider “any defenses or counter-arguments 

that the nonmovant might have raised in a never-filed opposition 

memorandum.” Id. Furthermore, in reviewing the court’s 

summary judgment ruling, we must assume that the movant’s 

undisputed facts are true. See id. ¶ 31.

¶30 Finally, we address Farmers Insurance’s argument that the 

court erred in amending the 2009 Judgment to include $11,423.04 

in costs. Farmers Insurance asserts that Farm Bureau’s request for 

fees was untimely under rule 54(d)(2) of the Utah Rules of Civil 

Procedure. This presents a question of law that we review for 

correctness. See Lyon v. Burton, 2000 UT 55, ¶ 76, 5 P.3d 616. 

ANALYSIS

I. Standing and Mootness

¶31 Under rule 10 of the Utah Rules of Appellate Procedure, 

“[a] party may move at any time to dismiss the appeal or the 

petition for review on the basis that the appellate court lacks 

jurisdiction.” Utah. R. App. P. 10(a)(1). Standing and mootness 

both implicate jurisdiction. 

¶32 “Standing is a jurisdictional requirement that must be 

satisfied before a court may entertain a controversy between two

parties.” Jones v. Barlow, 2007 UT 20, ¶ 12, 154 P.3d 808 (quotation 

simplified). “Under the traditional test for standing, the interests 

(quotation simplified), and because Farmers Insurance “agrees 

that Jared did not waive his right to appeal,” we do not reach this 

issue.
Farm Bureau v. Weston

20180699-CA 19 2023 UT App 136

of the parties must be adverse and the parties seeking relief must 

have a legally protectible interest in the controversy.” Id.

(quotation simplified). See Washington County Water Conservancy 

Dist. v. Morgan, 2003 UT 58, ¶ 20, 82 P.3d 1125 (stating that the 

traditional test for standing “requires a plaintiff to show some 

distinct and palpable injury that gives rise to a personal stake in 

the outcome of the dispute”) (quotation simplified). 

¶33 Similarly, the mootness doctrine “is a constitutional 

principle limiting our exercise of judicial power under article VIII 

of the Utah Constitution” and “is not a simple matter of judicial 

convenience or an ascetic act of discretion.” Transportation All. 

Bank v. International Confections Co., 2017 UT 55, ¶ 14, 423 P.3d 1171 

(quotation simplified). “An appeal is moot if . . . circumstances 

change so that the controversy is eliminated, thereby rendering 

the relief requested impossible or of no legal effect,” Walker I Invs., 

LLC v. Sunpeak Ass’n, Inc., 2015 UT App 216, ¶ 7 n.1, 359 P.3d 675 

(quotation simplified), thus rendering “anything we might say 

about the issues . . . purely advisory,” Transportation All. Bank, 

2017 UT 55, ¶ 15 (quotation simplified). For this reason, “in the 

absence of a justiciable controversy,” we lack jurisdiction to 

decide the appeal.15 Id. (quotation simplified). 

¶34 Farmers Insurance argues that we should dismiss Farm 

Bureau’s appeal for lack of standing and on grounds of mootness 

because Farm Bureau’s legal interest in this case arose and was 

15. An exception to the mootness doctrine exists “when the case: 

(1) affects the public interest, (2) is likely to recur, and (3) because 

of the brief time that any one litigant is affected, is likely to evade 

review.” Timothy v. Pia, Anderson, Dorius, Reynard & Moss, LLC, 

2019 UT 69, ¶ 32, 456 P.3d 731 (quotation simplified). Another 

exception arises when “the party seeking to survive dismissal . . . 

demonstrate[s] that collateral legal consequences will flow from 

the challenged issue.” In re J.S., 2017 UT App 5, ¶ 11, 391 P.3d 358 

(quotation simplified). Neither exception is implicated here. 
Farm Bureau v. Weston

20180699-CA 20 2023 UT App 136

dependent on the 2009 Judgment, which Farmers Insurance

argues expired eight years after its entry, i.e., in 2017. Farmers

Insurance also contends that Jared’s arguments concerning 

Farmers Insurance’s duty to indemnify him are moot because the 

underlying judgment against Jared has expired.

¶35 Under section 78B-5-202 of the Utah Code, judgments

“shall continue for eight years from the date of entry in a court 

unless previously satisfied or unless enforcement of the judgment 

is stayed in accordance with law.” See Utah Code Ann. 

§ 78B-5-202(1) (LexisNexis 2018). See also id. § 78B-2-311 (“An 

action may be brought within eight years upon a judgment or 

decree of any court of the United States, or of any state or territory 

within the United States.”).16 A party may renew a judgment by 

filing a motion in the original action before the judgment 

expires.17 See id. § 78B-6-1802; Utah R. Civ. P. 58C(a).

¶36 “‘Judgments’ covered by [section 78B-5-202(1)] must be the 

final variety.” Irving Place Assocs. v. 628 Park Ave., LLC, 2015 UT 

91, ¶ 20, 362 P.3d 1241. In other words, “it cannot be said that a 

nonfinal judgment shall continue for eight years from the date of 

16. Our Supreme Court has clarified that “there are two different 

eight-year periods at play in relation to a judgment.” Timothy, 

2019 UT 69, ¶ 9 n.7. “First, section 78B-5-202(1) defines the 

duration of the judgment itself. Creditors can renew their 

judgments by filing a motion to renew before the original 

judgment expires.” Id. “Second, section 78B-2-311 establishes the 

statute of limitations to commence a separate action on a 

judgment.” Id.

17. These provisions are applicable to judgments entered 

pursuant to arbitration awards by virtue of Utah Code section 

78B-11-126, which states that such “judgment[s] may be recorded, 

docketed, and enforced as any other judgment in a civil action.” 

Utah Code Ann. § 78B-11-126(1) (LexisNexis 2018). 
Farm Bureau v. Weston

20180699-CA 21 2023 UT App 136

entry.” Id. (quotation simplified). To the contrary, nonfinal 

judgments “would continue for longer—for eight years after the 

eventual entry of a final judgment.” Id. (emphasis in original). 

This is because “a judgment cannot be enforced until it is final,”

id. ¶ 22, and section 202(1) stays enforcement of a judgment “in 

accordance with law,” Utah Code Ann. § 78B-5-202(1).

Furthermore, “a nonfinal judgment is subject to modification by 

the district court unless and until it becomes final.” Irving Place, 

2015 UT 91, ¶ 20 n.6. See id. (stating that because “a case may 

remain pending for years between the initial entry of a nonfinal 

judgment and the ultimate entry of a final one[,] . . . the limitations 

period cannot begin running on a judgment that is interlocutory 

in nature”).

¶37 The threshold issue in this case is, therefore, whether entry 

of the 2009 Judgment confirming the arbitration award

constituted a final judgment. Farmers Insurance argues that “[a] 

judgment reflecting a confirmed arbitration award is a judgment 

under rule 54(a) [of the Utah Rules of Civil Procedure] because 

the judgment debtor has an appeal of right.” Accordingly, 

Farmers Insurance argues that the 2009 Judgment was “final and 

enforceable on March 26, 2009, the day it was entered.” Farmers

Insurance points to the fact that Farm Bureau even sought to 

enforce the 2009 Judgment against Jared. We disagree. 

¶38 Under the final judgment rule, “an appellate court does not 

have jurisdiction to consider an appeal unless the appeal is taken 

from a final order or judgment that ends the controversy between 

the litigants.” Copper Hills Custom Homes, LLC v. Countrywide Bank, 

FSB, 2018 UT 56, ¶ 10, 428 P.3d 1133 (quotation simplified). Rule 

54(a) of the Utah Rules of Civil Procedure defines “judgment” as 

“a decree or order that adjudicates all claims and the rights and 

liabilities of all parties or any other order from which an appeal of 

right lies.” Utah R. Civ. P. 54(a). Rule 54(b) further provides that 

“any order or other decision, however designated, that 

adjudicates fewer than all the claims or the rights and liabilities of 
Farm Bureau v. Weston

20180699-CA 22 2023 UT App 136

fewer than all the parties does not end the action as to any of the 

claims or parties” and is therefore not an appealable order unless

certified by the trial court. See id. R. 54(b); Powell v. Cannon, 2008 

UT 19, ¶ 11, 179 P.3d 799 (“For an order or judgment to be final, it 

must dispose of the case as to all the parties, and finally dispose 

of the subject-matter of the litigation on the merits of the case. In 

other words, it must end the controversy between the litigants, 

leaving nothing for the court to do but execute the judgment.”) 

(quotation simplified).

¶39 There are three exceptions to the final judgment rule: 

(1) interlocutory appeals brought under rule 5(a) of the Utah 

Rules of Appellate Procedure, (2) nonfinal orders properly 

certified for appeal by the trial court under rule 54(b) of the Utah 

Rules of Civil Procedure, and (3) instances where “the legislature 

provides a statutory avenue for appealing nonfinal orders.” 

Copper Hills, 2018 UT 56, ¶¶ 13–15 (quotation simplified). Only the 

third exception is at issue here, pursuant to Utah Code section 

78B-11-129(1). See id. ¶ 13. 

¶40 Section 129(1) appears within the UUAA and provides that 

in the context of arbitration, 

(1) An appeal may be taken from:

(a) an order denying a motion to compel arbitration;

(b) an order granting a motion to stay arbitration;

(c) an order confirming or denying confirmation of 

an award;

(d) an order modifying or correcting an award;

(e) an order vacating an award without directing a 

rehearing; or
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20180699-CA 23 2023 UT App 136

(f) a final judgment entered pursuant to [the 

UUAA].

Utah Code Ann. § 78B-11-129(1) (LexisNexis 2018). “Any ruling 

listed in subsection 129(1) [gives] the parties an appeal as of right, 

which should be pursued under rule 3” of the Utah Rules of 

Appellate Procedure. Westgate Resorts, Ltd. v. Consumer Prot.

Group, LLC, 2012 UT 56, ¶ 12, 289 P.3d 420. See Utah R. App. P. 

3(a)(1) (“[A] party may appeal a final order or judgment from a 

district or juvenile court to the appellate court[.]”).

¶41 Farmers Insurance asserts that the 2009 Judgment falls 

squarely within subsection (c) of section 129(1). We disagree.

Subsection (c) provides that “[a]n appeal may be taken from . . . 

an order confirming or denying confirmation of an [arbitration] 

award.” Utah Code Ann. § 78B-11-129(1)(c) (LexisNexis 2018). 

The 2009 Judgment is not such an order. Rather, in accordance 

with the UUAA, the trial court entered the 2009 Judgment after it 

entered a separate order confirming the arbitration award. See id.

§ 78B-11-123 (detailing the process for obtaining an order 

confirming an arbitration award); id. § 78B-11-126(1) (“Upon 

granting an order confirming . . . an [arbitration] award, the court 

shall enter a judgment conforming to the award. The judgment 

may be recorded, docketed, and enforced as any other judgment 

in a civil action.”). Indeed, only subsection (f) of section 129(1) 

refers to judgments, but it limits appeals to “final judgment[s]

entered pursuant to [the UUAA].” Id. § 78B-11-129(1)(f) (emphasis 

added). Because the 2009 Judgment did not resolve all the claims 

of all the parties, it is not a final judgment, see Utah R. Civ. P. 54(b), 

and therefore does not fall under subsection (f).18 See Westgate, 

2012 UT 56, ¶ 22. Accordingly, subsection (c)’s “statutory avenue 

18. And in any event, because subsection (f) deals with final 

judgments, it is not an exception to the final judgment rule. See 

Copper Hills Custom Homes, LLC v. Countrywide Bank, FSB, 2018 UT 

56, ¶ 13, 428 P.3d 1133.
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20180699-CA 24 2023 UT App 136

for appealing nonfinal orders,” Copper Hills, 2018 UT 56, ¶ 13 

(quotation simplified), applied to the order confirming the 

arbitration award but not to the subsequently entered 2009 

Judgment.19

¶42 In sum, because we conclude that an appeal as of right did 

not lie from the 2009 Judgment, the 2009 Judgment was not a final 

judgment under rule 54(a) of the Utah Rules of Civil Procedure 

and the eight-year period under section 202(1) did not begin to 

run upon entry of that interlocutory judgment. For these reasons,

Farmers Insurance’s standing and mootness arguments are 

unavailing, and we retain jurisdiction to address all the issues 

raised on appeal.

II. Cancellation of the Insurance Policy

¶43 Under Utah’s Insurance Code, an insurer generally may 

not cancel a policy for insurance prior to the expiration of the 

policy term, see Utah Code Ann. § 31A-21-303(2)(b)(i)(A)

(LexisNexis Supp. 2022), unless, as relevant here, it does so for 

“nonpayment of a premium when due,” id.

§ 31A-21-303(2)(b)(ii)(A). Such cancellation “is effective no sooner 

than 10 days after delivery or first-class mailing of a written notice 

to the policyholder.” Id. § 31A-21-303(2)(c)(ii). Accordingly, so 

long as the insurer provides written notice of cancellation and 

19. The fact that Farm Bureau erroneously obtained a writ of 

execution and attempted to collect on the 2009 Judgment against 

Jared before it was final and enforceable is immaterial to the issues 

before us on appeal. “Because there had not been a ‘final 

judgment,’ a writ of execution was not available under these 

circumstances, and the district court could have revisited its 

decision to grant the writ” at any point. Jordan Constr., Inc. v. 

Federal Nat’l Mortgage Ass’n, 2017 UT 28, ¶ 36, 408 P.3d 296. And 

it may be that Jared has some recourse against Farm Bureau for 

its wrongful efforts to execute on his assets.
Farm Bureau v. Weston

20180699-CA 25 2023 UT App 136

provides coverage for a 10-day grace period thereafter, the insurer 

may cancel an insurance policy for a single past due premium 

payment.

¶44 Consistent with the Insurance Code, the insurance policy 

on the 1992 Ford Explorer stated that Farmers Insurance may

cancel the policy for “fail[ure] to pay the premium when due.” It 

further provided that Farmers Insurance would mail notice of 

cancellation for nonpayment of the premium “[n]ot less than 10 

days prior to the effective date of such cancellation.”

¶45 Farm Bureau and Jared raise several challenges to the trial

court’s determination that Farmers Insurance’s cancellation of the 

policy, effective February 3, 2004, was valid. We address each 

argument in turn.

A. Incorporation of the Prematic Agreement

¶46 Farm Bureau first argues that the trial court erred in 

holding that the Prematic Agreement was incorporated into the 

policy through Endorsement E0022. Farm Bureau contends that if 

the Prematic Agreement was, as Farm Bureau asserts, separate 

from the policy and Endorsement E0022, then Joelyn’s failure to 

timely pay the full $220.16 due under the Prematic bill may have 

been a breach of the Prematic Agreement, though not of the policy 

itself. But even assuming, without deciding, that the court did err 

in this respect, we disagree with Farm Bureau that Joelyn’s failure 

to pay the full amount owed as required by the Notice of 

Cancellation resulted in cancellation of only the Prematic 

Agreement and not the policy. 

¶47 The policy provided that it may be altered “by 

endorsement.” Endorsement E0022 amended the policy period to 

“one Calendar month” and provided that “[t]he premium is due 

no later than on the expiration date of the then current monthly 

period.” Additionally, the declarations page, which is also part of 

the policy, provided that the monthly period began on the third 
Farm Bureau v. Weston

20180699-CA 26 2023 UT App 136

of each month. This corresponded with the February 3 due date 

under the Prematic bill. Accordingly, even if the Prematic 

Agreement was a separate agreement from the policy, Joelyn 

nevertheless breached the policy and Endorsement E0022 when 

she failed to make the full payment of $220.16 by the due date as 

provided for in the Notice of Cancellation. Indeed, in light of the 

declarations page providing that the policy began on December 3, 

2004, payment under Endorsement E0022 would have been due 

on the second of each subsequent month, which represented “the 

expiration date of the then current monthly period.” In light of 

Joelyn’s failure to timely pay the $158.92, Farmers Insurance was 

entitled to cancel the policy for “fail[ure] to pay the premium 

when due.” Instead of doing so, the Notice of Cancellation offered 

the opportunity for a cure, stating that it would cancel the policy 

unless Joelyn paid $220.16—which represented a combined 

payment for the January and February monthly periods—by 

February 3, 2004.

20

20. At oral argument, Farm Bureau suggested that Prematic, not 

Farmers Insurance, sent the Notice of Cancellation and that it 

therefore purported to be only a cancellation of the Prematic 

Agreement and not of the policy. But aside from the question of 

what purpose could possibly be served by keeping the policy in 

effect while terminating only the agreement that governed

premium payments, the assertion that Prematic sent the Notice of 

Cancellation is unsupported by the record. To the contrary, the 

record supports only the conclusion that Farmers Insurance sent 

the Notice of Cancellation. The Notice of Cancellation made no 

mention of Prematic. Instead, it mentions Farmers Insurance three 

times and even lists the name of the Farmers Insurance agent who 

acted as Joelyn’s point of contact with Farmers Insurance. The 

Notice of Cancellation specifically informed Joelyn, with our 

emphasis, that “[i]f the minimum amount due is not received by 

the due date, . . . your insurance indicated by the insurance 

(continued...)
Farm Bureau v. Weston

20180699-CA 27 2023 UT App 136

¶48 Although Joelyn did pay the $158.92 sometime between 

January 6 and January 15, she failed to pay the full $220.16 by the 

February 3 deadline. The trial court found that based on Joelyn’s 

“history of late payments and cancellations,” she “read and 

understood” the Notice of Cancellation to mean “that if $220.16 

was not paid by February 3, 2004, all of the Farmers’ Policies 

would be cancelled as of February 3, 2004.”

¶49 Without receiving full payment from Joelyn, Prematic 

could not have forwarded the full amount to Farmers Insurance

to prevent the cancellation.21 Accordingly, regardless of whether 

number(s) listed which has been issued by the undersigned 

company(ies) will be canceled[.]” Additionally, although the trial 

court did not specifically find that Farmers Insurance prepared 

the Notice of Cancellation, it found that it was mailed by a third 

party that Farmers Insurance “contracted to sort and mail notices 

prepared at Farmers’ [center for printing and mailing].” 

 For these reasons, Farm Bureau’s assertion that Prematic sent 

the Notice of Cancellation and that it merely cancelled the 

Prematic Agreement—and not the policy—fails. And for these

same reasons, we reject Farm Bureau’s argument that the Notice 

of Cancellation was ineffective because it was sent by Farmers

Insurance’s affiliate, Prematic, and not by Farmers Insurance.

21. Farm Bureau also argues that Farmers Insurance failed to 

prove nonpayment of a premium because the Prematic 

Agreement specified that “payment to Prematic . . . does [not] 

constitute payment of any premium due from Customer to any 

insurance company.” This provision accompanied another 

provision stating that Prematic itself was not an insurance

company. But it is undisputed that Prematic forwarded the 

payments to Farmers Insurance as premiums. And as mentioned 

above, because Joelyn testified and the trial court found that she 

did not make the payment by the January 3 due date, it was 

(continued...)
Farm Bureau v. Weston

20180699-CA 28 2023 UT App 136

the Prematic Agreement was integrated into the policy, under the 

terms of Endorsement E0022 Joelyn was required to pay for each 

monthly period “no later than on the expiration date of the then 

current monthly period,” and her failure to pay the premium by 

the February 3 due date was a breach of Endorsement E0022 and

of the policy by extension.

impossible for Prematic to timely forward the premium payment 

to Farmers Insurance.

 Farm Bureau and Jared also argue that Prematic did hold 

sufficient funds to pay the remaining $61.24 due under the Notice 

of Cancellation, as evidenced by its refund check of $130.68. But 

Farm Bureau and Jared have not carried their burden of 

persuasion on this issue. See Utah R. App. P. 24(a)(8). The 

calculation of the $130.68 is multifaceted. The trial court’s finding 

on this matter is limited to stating that the refund “was calculated 

on a daily rate, back to February 3, 2004.” Without further

explanation of how the $130.68 figure was reached, we are unable 

to accept the premise that Prematic had an excess of funds 

sufficient to cover the additional $61.24 due under the Notice of 

Cancellation. For example, neither party addresses the $81.88 

“credit for a coverage change to a 1989 motorhome,” which was 

used to reduce the amount due on the February premium to only 

$61.24. Farmers Insurance’s records coordinator testified that 

Farmers Insurance issued this credit because Joelyn had overpaid 

the premium on a motorhome dating back to May 2003, which 

therefore would have presumably been included in the refund 

amount, leaving an excess of only $48.80 ($130.68 minus $81.88), 

and which would have been insufficient to cover the $61.24 left 

owing under the Notice of Cancellation. Additionally, without 

offering further explanation or citing to the record, Farm Bureau 

cites figures that further confuse the matter. Absent sufficient 

development of this rather technical issue, we are unable to reach 

the merits of this argument.
Farm Bureau v. Weston

20180699-CA 29 2023 UT App 136

B. Notice of Cancellation

¶50 Farm Bureau and Jared both argue that the Notice of 

Cancellation was ineffective because (1) Farmers Insurance did

not prove that it complied with the Insurance Code by mailing the 

Notice of Cancellation 10 days prior to the effective date of the 

cancellation, and (2) it was anticipatory. We address each 

argument in turn.

1. Proof of Mailing

¶51 The Insurance Code provides that “[c]ancellation for 

nonpayment of premium of a personal lines policy is effective no 

sooner than 10 days after delivery or first-class mailing of a 

written notice to the policyholder.” Utah Code Ann. 

§ 31A-21-303(2)(c)(ii) (LexisNexis Supp. 2022). Farm Bureau and 

Jared assert that Farmers Insurance did not prove that it mailed 

the Notice of Cancellation at least 10 days prior to the cancellation 

date and that the Notice of Cancellation was therefore invalid. We 

disagree.

¶52 The trial court found that “[o]n January 14, 2004, more than 

10 days before February 3, 2004, . . . Joelyn [was] sent a written 

Notice of Cancellation.” This finding is supported by the evidence 

Farmers Insurance presented at trial in the form of four business 

records and the testimony of a Farmers Insurance employee. The 

employee explained that the first record showed that Farmers

Insurance generated 9,411 notices of cancellation on January 14, 

2004, and that the second record indicated that one of those

notices was for Joelyn. The employee further explained that the 

third record indicated that all 9,411 notices were metered for 

January 15 and that the fourth record showed that they were 

picked up by a third party to be sorted and taken to the post office.

¶53 Although, as the court noted, Farmers Insurance presented 

no evidence as to the “actual mailing date” by the third party, 

which thus remained unproven at trial, Farmers Insurance
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20180699-CA 30 2023 UT App 136

nonetheless presented sufficient evidence from which it could be 

reasonably inferred that the Notice of Cancellation was mailed at 

least 10 days prior to cancellation. To comply with the statutory 

mandate, the third party had to mail the Notice of Cancellation no 

later than January 24—nine days after receiving it from Farmers

Insurance on January 15. The Farmers Insurance employee 

testified that the third party picked up mail from Farmers 

Insurance “three or four” times a day. He further testified that 

Farmers Insurance shrink-wrapped notices of cancellation in blue, 

which served as a “red flag” to the third party “that this was a 

priority job” that was to be processed as soon as it arrived at the 

third-party facility. He also testified that if a problem arose with a 

particular batch of mailings, he would have been made aware of 

it—although that had never occurred to date. Finally, though not 

dispositive, Joelyn testified that she received the Notice of 

Cancellation “sometime before the February 3, 2004 cancellation 

date,” thereby proving that the third party did, in fact, mail the 

Notice of Cancellation.

¶54 Based on this evidence, the only reasonable inference is 

that the third party mailed the Notice of Cancellation, which was 

marked as “high priority,” within the nine-day window between 

January 15 and January 24. Thus, under the facts of this case, 

regardless of the fact that Farmers Insurance did not prove the 

“actual mailing date” at trial, the nine-day window it did establish 

was sufficiently large to accommodate this uncertainty. For this 

reason, we affirm the trial court’s finding that the Notice of 

Cancellation was mailed within 10 days of the cancellation date.

2. Anticipatory Cancellation

¶55 Farm Bureau and Jared argue that the Notice of 

Cancellation was invalid because it anticipated Joelyn’s failure to 

pay the February premium. But the basis for the Notice of 

Cancellation was Joelyn’s late payment of the January premium. 

In accordance with both the Insurance Code and the terms of 
Farm Bureau v. Weston

20180699-CA 31 2023 UT App 136

Endorsement E0022, Farmers Insurance issued the Notice of 

Cancellation for “nonpayment of a premium when due.” Utah 

Code Ann. § 31A-21-303(2)(b)(ii)(A) (LexisNexis Supp. 2022).

Although not so obligated, Farmers Insurance offered Joelyn the 

opportunity to avoid cancellation by paying both the January and 

February premiums by February 3. The payment of both 

premiums was therefore a condition of Farmers Insurance not 

exercising its statutory and contractual right to cancel the policy. 

And because Joelyn did not comply with that condition, Farmers

Insurance then exercised its right to cancel the policy. Farm 

Bureau and Jared’s characterization of the Notice of Cancellation 

as anticipating the late payment of the February premium is 

therefore incorrect.

C. Partial Payment

¶56 Farm Bureau and Jared next argue that Farmers Insurance

lost its right to cancel the policy when it accepted the partial 

payment of the amount due under the Notice of Cancellation.

Specifically, they contend that acceptance of the partial payment 

(1) constituted a waiver of Farmers Insurance’s right to cancel and 

(2) estopped Farmers Insurance from cancelling the policy. We 

address each argument in turn.

1. Waiver

¶57 Farm Bureau and Jared argue that Farmers Insurance

waived its right to cancel the policy when it accepted partial 

payment for the coverage period in which the accident occurred.

22

22. Following the first bench trial, the trial court found that “[t]he 

payment of $158.92 for the December 14, 2003 bill was due on 

January 3, 2004,” and that the bill “was for coverage for the period 

from January 18, 2004 through February 17, 2004.” Farmers

Insurance asserts that the trial court’s finding regarding the 

coverage period was clearly erroneous. It contends that no 

(continued...)
Farm Bureau v. Weston

20180699-CA 32 2023 UT App 136

We do not discuss the parties’ arguments in detail because the 

waiver argument is expressly foreclosed by the terms of the 

policy. The policy expressly provided, with our emphasis, that 

“[n]o other change or waiver may be made in this policy except by 

endorsement, new Declarations or new policy issued by us.” 

Accordingly, Farmers Insurance’s act of cashing the partial 

payment could not constitute waiver.23 See Mounteer Enters., Inc. 

v. Homeowners Ass’n for the Colony at White Pine Canyon, 2018 UT 

23, ¶ 19, 422 P.3d 809 (“When a contract contains an antiwaiver 

provision, a party cannot waive a contractual right merely by 

failing to enforce the provision establishing that right.”). 

evidence supports this finding and, to the contrary, that the 

evidence presented at trial actually shows that the “coverage 

period ran from the third of the month to the second of the 

following month.” Because this finding does not affect the 

outcome of this appeal, we need not consider this argument.

23. In his reply brief, Jared argues that this policy provision is at 

odds with the Insurance Code. Specifically, he asserts that Utah 

Code section 31A-21-303(2)(b) “requires Farmers to accept a late 

payment, so long as it is tendered within 10 days of a notice of 

cancellation.” But that provision contains no such requirement. 

Instead, it is limited to providing that an insurer may cancel a 

policy for “nonpayment of a premium when due.” Utah Code 

Ann. § 31A-21-303(2)(b)(ii)(A) (LexisNexis Supp. 2022). 

Furthermore, subsection (2)(c)(ii) merely provides that such 

“[c]ancellation for nonpayment of premium . . . is effective no 

sooner than 10 days after delivery or first-class mailing of a 

written notice to the policyholder,” id. § 31A-21-303(2)(c)(ii), and 

does not provide that the right to cancel is voided if payment is 

received within that 10-day period.
Farm Bureau v. Weston

20180699-CA 33 2023 UT App 136

2. Equitable Estoppel

¶58 Jared argues that Farmers Insurance was equitably 

estopped from cancelling the policy.24 Specifically, he contends 

that because Farmers Insurance did not issue another notice of 

cancellation after it cashed Joelyn’s check for $158.92, Joelyn 

“acted in reliance on Farmers’ conduct” that allegedly suggested

that she had continuing coverage. But this argument neglects the 

trial court’s finding that “[b]ased on her history of late payments 

and cancellations Joelyn Weston understood that her payment of 

$158.92 . . . and Farmers’ subsequent processing of her payment 

did not satisfy the terms outlined in the . . . Notice of 

Cancellation.” Accordingly, in light of this finding—which Jared 

does not challenge on appeal—Joelyn could not have reasonably 

relied on Farmers Insurance’s act in cashing her partial payment

as a basis for believing that the policy was no longer at risk of 

immediate cancellation.

D. Retroactivity

¶59 Jared contends that the cancellation was ineffective 

because it was retroactive. Specifically, Farmers Insurance

cancelled the policy on February 14—the day before the fatal 

accident for which Jared was responsible—retroactive to 

24. The elements of equitable estoppel are: 

(1) a statement, admission, act, or failure to act by 

one party inconsistent with a claim later asserted; 

(2) reasonable action or inaction by the other party 

taken on the basis of the first party’s statement, 

admission, act, or failure to act; and (3) injury to the 

second party that would result from allowing the 

first party to contradict or repudiate such statement, 

admission, act, or failure to act. 

McLeod v. Retirement Board, 2011 UT App 190, ¶ 21, 257 P.3d 1090 

(quotation simplified).
Farm Bureau v. Weston

20180699-CA 34 2023 UT App 136

February 3. In support of this argument, Jared cites a section of 

the Insurance Code:

An insurance contract insuring against loss or 

damage through legal liability for the bodily injury 

or death by accident of any person, or for damage to 

the property of any person, may not be retroactively 

abrogated to the detriment of any third-party 

claimant by any agreement between the insurer and 

insured after the occurrence of any injury, death, or 

damage for which the insured may be liable. This 

attempted abrogation is void.

Utah Code Ann. § 31A-22-202(1) (LexisNexis 2017) (emphasis 

added). But because the alleged retroactive cancellation occurred 

neither “by agreement between the insurer and the insured” nor 

“after the occurrence” of the accident, this statute does not apply 

to the situation before us. Indeed, even if Farmers Insurance had 

cancelled the policy effective February 14, the policy still would 

not have been in effect on February 15 when the accident 

occurred.

¶60 Similarly, Farm Bureau argues that the policy should have 

“remained in force through . . . at least the date of the refund.” In 

support of this assertion, Farm Bureau cites Utah Code section 

31A-21-305(2)(d), titled “Cancellation upon request of a premium 

finance company,” which provides,

Whenever a financed insurance policy is cancelled, 

the insurer shall return any unearned premiums 

due under the insurance policy to the insurance 

premium finance company for the account of the 

insured, and this action by the insurer satisfies the 

insurer’s obligations under the insurance policy 

which relate to the return of unearned premiums. If 

the crediting of return premiums to the account of 

the insured results in a surplus over the amount due 
Farm Bureau v. Weston

20180699-CA 35 2023 UT App 136

from the insured, the premium finance company 

shall refund that excess to the insured if it exceeds 

$5. 

Id. § 31A-21-305(2)(d). The statute is entirely silent on whether the 

policy remains in place until any refund is issued. Accordingly, 

we affirm the trial court’s determination that Farmers Insurance 

properly cancelled the insurance policy prior to the accident.25

III. Duty to Defend

¶61 “A policy containing motor vehicle liability coverage 

imposes on the insurer the duty to defend, in good faith, any 

person insured under the policy against any claim or suit seeking 

damages which would be payable under the policy.” Utah Code 

Ann. § 31A-22-303(5) (LexisNexis Supp. 2022). See Restatement of 

the Law of Liability Insurance § 13(1) (Am. Law Inst. 2019) (“An 

insurer that has issued an insurance policy that includes a duty to 

defend must defend any legal action brought against an insured 

that is based in whole or in part on any allegations that, if proved, 

would be covered by the policy, without regard to the merits of 

those allegations.”). Under this duty, the insurer is required “to 

protect the insured’s interests as zealously as it would its own.” 

Black v. Allstate Ins. Co., 2004 UT 66, ¶ 25, 100 P.3d 1163 (quotation 

simplified). In the third-party context,26 the duty to defend is 

25. In the event we reverse the trial court’s ruling that Farmers 

Insurance properly cancelled the insurance policy on the 1992 

Ford Explorer, Farm Bureau seeks an award of attorney fees 

under Utah Code section 78B-5-825. Because we affirm the court’s 

ruling, we also necessarily reject Farm Bureau’s request for 

attorney fees.

26. In the third-party context, insurers contract “to defend the 

insured against claims made by third parties against the insured 

(continued...)
Farm Bureau v. Weston

20180699-CA 36 2023 UT App 136

elevated to a fiduciary duty because “the insurer controls the 

disposition of claims against its insured, who relinquishes any 

right to negotiate on his own behalf” and because “the law 

imposes upon all agents a fiduciary obligation to their principals 

with respect to matters falling within the scope of their agency.” 

Beck v. Farmers Ins. Exch., 701 P.2d 795, 799–800 (Utah 1985). See id.

at 799 (stating that in the third-party insurance context, “the 

contract itself creates a fiduciary relationship because of the trust 

and reliance placed in the insurer by its insured”).

¶62 “An insurer’s duty to defend arises solely under the terms 

of the” insurance policy, which is “merely a contract between the 

insured and the insurer.” Equine Assisted Growth & Learning Ass’n 

v. Carolina Cas. Ins. Co., 2011 UT 49, ¶ 8, 266 P.3d 733 (quotation 

simplified). See Fire Ins. Exch. v. Estate of Therkelsen, 2001 UT 48, 

¶ 22, 27 P.3d 555 (“The duty to defend arises solely under 

contract.”) (quotation simplified). Accordingly, when 

determining whether an insurer has a duty to defend an insured 

against certain claims, “the test is whether the complaint alleges a 

risk within the coverage of the policy.” Benjamin v. Amica Mutual

Ins. Co., 2006 UT 37, ¶ 16, 140 P.3d 1210 (quotation simplified). See 

Equine Assisted Growth, 2011 UT 49, ¶ 8 (stating that the duty to 

defend “is triggered whenever the insurer ascertains facts giving 

rise to potential liability under the insurance policy”) (quotation 

simplified). 

and to pay any resulting liability, up to the specified dollar limit.” 

M.A. v. Regence BlueCross BlueShield of Utah, 2020 UT App 177, ¶ 16 

n.10, 479 P.3d 1152 (quotation simplified). This stands in contrast 

to the first-party context, which “refers to an insurance agreement 

where the insurer agrees to pay claims submitted to it by the 

insured for losses suffered by the insured.” Id. (quotation 

simplified).
Farm Bureau v. Weston

20180699-CA 37 2023 UT App 136

¶63 Because “an insurer’s duty to defend is broader than its 

duty to indemnify,”27 “an insurer may have a duty to defend an 

insured even if . . . the insurer is ultimately not liable to indemnify 

the insured.” Estate of Therkelsen, 2001 UT 48, ¶ 22 (quotation 

simplified). An insurer may refuse to defend against an action 

only if “a comparison of the policy with the underlying complaint 

shows on its face that there is no potential for coverage.” 

Summerhaze Co. v. Federal Deposit Ins. Corp., 2014 UT 28, ¶ 38, 332 

P.3d 908 (quotation simplified). But “if the underlying complaint 

alleges any facts or claims that might fall within the ambit of the 

policy, the insurer must offer a defense.” Id. ¶ 36 (quotation 

simplified). See Equine Assisted Growth, 2011 UT 49, ¶ 8 (“Where 

factual questions render coverage uncertain the insurer must 

defend until those uncertainties can be resolved against 

coverage.”) (quotation simplified). In other words, “when in 

doubt, defend.” Benjamin, 2006 UT 37, ¶ 22 (quotation simplified). 

A. Breach of the Duty to Defend

¶64 Farmers Insurance challenges the trial court’s ruling on 

summary judgment that it breached its duty to defend Jared

against Farm Bureau’s complaint.28 The court held that its prior 

determination that Farmers Insurance had properly cancelled the 

27. “This is because the duty to indemnify is determined by the 

underlying facts of the case, while the duty to defend is controlled 

by the allegations in the complaint against the insured.”

Summerhaze Co. v. Federal Deposit Ins. Corp., 2014 UT 28, ¶ 36, 332 

P.3d 908 (quotation simplified).

28. Farmers Insurance also argues that Farm Bureau lacks 

standing to litigate this issue. But because Jared—who clearly 

does have standing—likewise presents argument on the duty to 

defend, and because we do not base our holding on this issue on 

any argument solely attributable to Farm Bureau, we need not 

consider this argument. 
Farm Bureau v. Weston

20180699-CA 38 2023 UT App 136

insurance policy on the 1992 Ford Explorer prior to the accident 

was immaterial to this issue because Farm Bureau’s complaint 

alleged that Farmers Insurance “had not complied with the 

statutory requirements before cancelling the . . . insurance 

coverage for non-payment” and that Jared was insured by the 

policy at the time of the accident. Accordingly, the court 

concluded that Farmers Insurance was “required to defend until 

the uncertainties could be resolved against coverage”—i.e., until 

the court determined that Farmers Insurance had properly 

cancelled the insurance policy—and that by not doing so, Farmers 

Insurance had breached its duty to defend. 

¶65 Farmers Insurance challenges this ruling, contending that

an insurer has no duty to defend in the absence of a contract. It 

asserts that because the insurance contract is the source of the 

duty to defend, the duty cannot exist if there is no contract. 

Accordingly, because there was no active policy on the 1992 Ford 

Explorer at the time of the accident, Farmers Insurance did not 

have a duty to defend Jared against Farm Bureau’s lawsuit. 

Although we agree that an insurer generally does not have a duty 

to defend when an event occurs after an insurance policy was 

cancelled, see 14 Steven Plitt et al., Couch on Insurance § 201:3 (3d 

ed. June 2023 update) (“It has been held that an insurer has no 

duty to defend . . . where the alleged event occurred . . . [b]efore 

the policy went into effect” or “[a]fter the policy had been 

cancelled.”), we nonetheless hold that because a genuine issue of 

fact existed regarding whether the insurance policy had been 

properly cancelled, Farmers Insurance still had a duty to defend 

Jared until that issue had been resolved in its favor.

¶66 Farmers Insurance is correct that generally “the duty to 

defend arises solely under contract.” Fire Ins. Exch. v. Estate of 

Therkelsen, 2001 UT 48, ¶ 22, 27 P.3d 555 (quotation simplified). As 

discussed above, it is for that reason that “the duty to defend is 

controlled by the allegations in the complaint against the 

insured.” Summerhaze Co. v. Federal Deposit Ins. Corp., 2014 UT 28, 
Farm Bureau v. Weston

20180699-CA 39 2023 UT App 136

¶ 36, 332 P.3d 908 (quotation simplified). Thus, until an insurer 

can establish that the claims against the insured fall outside of 

policy coverage, the insurer is obligated to defend an insured in a 

lawsuit whenever “the complaint alleges a risk within the 

coverage of the policy.” Benjamin v. Amica Mutual Ins. Co., 2006 UT 

37, ¶ 16, 140 P.3d 1210 (quotation simplified). See id. ¶ 25; Equine 

Assisted Growth & Learning Ass’n v. Carolina Cas. Ins. Co., 2011 UT 

49, ¶ 8, 266 P.3d 733. For this reason, the duty to defend may exist 

in situations where “the insurer is ultimately not liable to 

indemnify the insured.” Estate of Therkelsen, 2001 UT 48, ¶ 22. We 

see no reason to stray from these well-established principles in a 

situation where genuine issues of fact exist regarding whether an 

existing insurance policy was in effect at the relevant time.

¶67 This holding is likewise in line with the Restatement of the 

Law of Liability Insurance, which provides: 

An insurer that has the duty to defend . . . must 

defend until its duty to defend is terminated . . . by 

declaratory judgment or otherwise, unless facts not 

at issue in the legal action for which coverage is 

sought and as to which there is no genuine dispute

establish that . . . [t]here is no duty to defend because 

the insurance policy has been properly cancelled.

Restatement of the Law of Liability Insurance § 13(3)(e) (Am. Law 

Inst. 2019) (emphasis added). Cf. 14 Steven Plitt et al., Couch on 

Insurance § 201:3 (3d ed. June 2023 update) (stating that where 

“doubt exists whether the claim against the insured arguably falls 

within policy coverage, such doubts must be resolved in favor of 

the insured”). Thus, an insurer may properly decline to offer a 

defense on the ground that the insurance policy had been

cancelled only when there is no genuine issue of fact regarding 

the cancellation. This was not the case here.

¶68 There is no question that a contract did exist for Farmers 

Insurance to insure the 1992 Ford Explorer. Additionally, both 
Farm Bureau v. Weston

20180699-CA 40 2023 UT App 136

Jared and Farm Bureau alleged that Farmers Insurance

improperly cancelled the insurance policy. It was not until after

the first bench trial—held some four years after the trial court 

entered the 2009 Judgment against Jared—that the court resolved 

this factual dispute in favor of Farmers Insurance. Thus, because 

a genuine dispute of fact existed regarding whether Farmers 

Insurance properly cancelled the insurance policy, Farmers 

Insurance was still obligated to defend Jared until that issue was 

resolved, and Farmers Insurance breached its duty to defend by 

failing to do so. See Equine Assisted Growth, 2011 UT 49, ¶ 8 

(“Where factual questions render coverage uncertain, the insurer 

must defend until those uncertainties can be resolved against 

coverage.”) (quotation simplified); Estate of Therkelsen, 2001 UT 48, 

¶ 22 (stating that an insurer may have a duty to defend in 

situations where “the insurer is ultimately not liable to indemnify 

the insured”).

¶69 Farmers Insurance resists this conclusion and points to our 

Supreme Court’s decision in McCarty v. Parks, 564 P.2d 1122 (Utah 

1977), in support of its argument that “[i]f there is no policy, there 

can be no duty to defend.” In that case, an Arizona-based 

employer gave permission to its employee, Parks, to take the 

company car on a two-to-three-day trip to Flagstaff, Arizona. See 

id. at 1123. But instead of going to Flagstaff, Parks, without the 

knowledge or consent of the employer, took the car to Salt Lake 

City, where he was involved in an automobile accident over two 

months later. See id. A party injured in the accident sued Parks, 

now an ex-employee, and a default judgment was entered against 

him. See id. at 1122–23. A demand for payment was made against 

the insurer of the employer’s vehicle. Id. at 1123. On appeal, our 

Supreme Court, in relevant part, affirmed the trial court’s factual 

determination that Parks “was not driving the car with the

permission of the insured owner.” See id. at 1124. Thus, Parks was 

not covered under the employer’s insurance policy and the 

insurer was therefore not liable for the damages caused by Parks. 

See id. Next, the Court held that because the duty to defend “only 
Farm Bureau v. Weston

20180699-CA 41 2023 UT App 136

runs to those insured under the policy” and because Parks was 

found not to be covered under the policy, the insurer was not 

obligated to defend Parks in the lawsuit initiated against him. See 

id. The Court did note, however, that “[i]t is undoubtedly true that 

where any substantial question as to coverage exists, it may 

involve some risk on the part of the insurance company to refuse 

to defend.” Id. But because the trial court ultimately vindicated 

the insurer’s decision not to defend Parks, the Court held the 

insurer did not have a duty to defend him and therefore the 

insurer could not have breached the duty. See id.

¶70 We do not read McCarty as contradicting our holding. In 

that case, Parks, who had been granted permission to take the 

vehicle on a two- or three-day trip to Flagstaff, did not have 

permission to drive to and remain in Salt Lake City for over two 

months. In that scenario, in which the vehicle was essentially 

stolen, there was no reasonable basis on which to conclude that 

Parks was insured under the employer’s policy at the time of the 

accident. This stands in stark contrast to the present case in which 

a genuine issue existed as to whether Farmers Insurance properly 

cancelled the insurance policy, which issue was not resolved 

without some difficulty both in the trial court and on appeal.

¶71 Accordingly, we hold that Farmers Insurance had a duty 

to defend Jared until the court determined that the insurance 

policy had been properly cancelled. Because Farmers Insurance 

did not defend Jared in the underlying action, it breached the duty 

to defend.

B. Damages for Breach of the Duty to Defend

¶72 Having concluded that Farmers Insurance breached its 

duty to defend, we next turn to the question of damages. Jared 

raises several challenges to the trial court’s damages award for 

Farmers Insurance’s breach of the duty to defend. We address 

each in turn.
Farm Bureau v. Weston

20180699-CA 42 2023 UT App 136

1. The 2009 Judgment

¶73 Jared argues that he is entitled, as a matter of law, to a 

judgment equal to the amount of the 2009 Judgment entered

against him. In light of our Supreme Court’s decision in 

Summerhaze Co. v. Federal Deposit Insurance Corp., 2014 UT 28, 332 

P.3d 908, we agree.29

¶74 In Summerhaze, our Supreme Court clarified that “if an 

insurer has notice of a claim against an insured, and has been 

afforded an opportunity to appear and defend, regardless of 

whether the insurer actually appears, any judgment against the 

insured will also conclusively bind the insurer.” Id. ¶ 37 (emphasis 

added) (quotation otherwise simplified). See id. ¶ 38 (“An insurer

29. Farmers Insurance asserts that “[t]his argument appears to be 

unpreserved” and that we should therefore “decline to consider 

it.” This is incorrect. Although Jared did not cite in his opening 

brief the record showing that this issue was preserved, in 

contravention of rule 24(a)(5)(B) of the Utah Rules of Appellate 

Procedure, he provided the requisite record citations in his reply 

brief. Jared’s preservation of this issue is inarguable. He argued in 

a motion for summary judgment that “[b]ecause Farmers failed to 

defend, judgment should be entered against it in the amount of 

the judgment against” him. The trial court also explicitly rejected 

Jared’s argument, stating that it “conflate[d] the duty to defend 

with the duty to indemnify.” Although Jared did not cite our 

Supreme Court’s opinion in Summerhaze Co. v. Federal Deposit 

Insurance Corp., 2014 UT 28, 332 P.3d 908, in his motion—indeed, 

his motion predated the opinion by a matter of months—a party 

need only preserve an issue, and “new arguments, when brought 

under a properly preserved issue or theory, do not require an 

exception to preservation.” State v. Johnson, 2017 UT 76, ¶ 14 n.2, 

416 P.3d 443 (emphasis in original). This includes “citing new 

authority or cases supporting an issue that was properly 

preserved.” Id. 
Farm Bureau v. Weston

20180699-CA 43 2023 UT App 136

that refuses a tender of defense by its insured takes the risk not

only that it may eventually be forced to pay the insured’s legal

expenses but also that it may end up having to pay for a loss that

it did not insure against.”) (quotation simplified); Speros v. Fricke, 

2004 UT 69, ¶ 52, 98 P.3d 28 (“As a general rule, when an insurer, 

whose policy requires it to defend its insured, receives notice of a 

suit against the insured and is allowed an opportunity to defend, 

but refuses, the insurer is bound by the findings and judgment 

therein.”) (quotation simplified). The Court further stated that “an 

insurer may challenge its liability for the judgment, contest the 

amount of damages, or set forth any other available defense that 

the insured neglected to make” only if the insurer was not put on 

notice of the lawsuit through tender of defense.30 Summerhaze, 

30. The dissent disagrees with our interpretation of this statement, 

asserting that “[t]he quotation from Summerhaze states simply that 

an insurer who does not receive a tender of defense from an 

insured ‘may challenge its liability for the judgment, contest the 

amount of damages, or set forth any other available defense that 

the insured neglected to make.’” Infra note 46. See Summerhaze, 

2014 UT 28, ¶ 37 (“[W]ithout a tender of defense, an insurer may 

challenge its liability for the judgment, contest the amount of 

damages, or set forth any other available defense that the insured 

neglected to make.”). The dissent further states that “[n]either this 

paragraph of Summerhaze nor any other ever states or holds that 

an insurer who breaches its duty to defend is foreclosed from 

raising coverage defenses in a second case.” Infra note 46. 

 Although the dissent is correct that the quote in question does 

not expressly indicate that an insurer who receives notice of an 

action against an insured may not “challenge its liability for the 

judgment, contest the amount of damages, or set forth any other 

available defense that the insured neglected to make,” 

Summerhaze, 2014 UT 28,¶ 37, it naturally follows that if an insurer 

who did not receive notice may do so, then an insurer who did

receive notice may not. Otherwise, such discussion on the 

(continued...)
Farm Bureau v. Weston

20180699-CA 44 2023 UT App 136

2014 UT 28, ¶ 37 (emphasis added). This is because, as previously 

discussed, an insurer’s duty to defend is “broader than its duty to 

indemnify.” Id. ¶ 36 (quotation simplified). Additionally, an 

insurer’s duty to defend is a fiduciary duty. See Beck v. Farmers Ins. 

Exch., 701 P.2d 795, 799–800 (Utah 1985). 

¶75 The Court further stated that an insurer that receives a 

tender of defense but believes it is not liable for coverage has two 

options of how to proceed without risking breach of the duty to 

defend: (1) it “may either protect its interests through a 

declaratory judgment proceeding asking the court to determine 

coverage under an insurance policy” or (2) “it may defend the suit 

under a reservation of its right to seek repayment later.”

Summerhaze, 2014 UT 28, ¶ 38 (quotation simplified). See Farmers 

Ins. Exch. v. Call, 712 P.2d 231, 237 (Utah 1985) (“When faced with 

a decision as to whether to defend or refuse to defend, an insurer 

is entitled to seek a declaratory judgment as to its obligations and 

rights.”); General Agents Ins. Co. of Am., Inc. v. Midwest Sporting 

Goods Co., 828 N.E.2d 1092, 1102 (Ill. 2005) (“Where the insurance 

carrier is uncertain over insurance coverage for the underlying 

claim, the proper course is for the insurance carrier to tender a 

defense and seek a declaratory judgment as to coverage under the 

distinction regarding notice would have been wholly 

unnecessary. Indeed, the Court first stated that “[i]f an insurer has 

notice of a claim against an insured . . . any judgment against the 

insured will also conclusively bind the insurer,” id. (emphasis 

added) (quotation otherwise simplified), which stands in contrast 

to its later statement of what the insurer may do in the opposite 

situation where the insurer did not receive notice. Our 

interpretation is further supported by the Court’s later statement 

that “an insurer that refuses a tender of defense by its insured

takes the risk not only that it may eventually be forced to pay the

insured’s legal expenses but also that it may end up having to pay

for a loss that it did not insure against.” Id. ¶ 38 (quotation

simplified). 
Farm Bureau v. Weston

20180699-CA 45 2023 UT App 136

policy.”) (quotation simplified). And as discussed above, an 

insurer who fails to take these steps “takes the risk not only that 

it may eventually be forced to pay the insured’s legal expenses but 

also that it may end up having to pay for a loss that it did not insure 

against.” Summerhaze, 2014 UT 28, ¶ 38 (emphasis added) (quoting 

Hamlin Inc. v. Hartford Accident & Indem. Co., 86 F.3d 93, 94 (7th 

Cir. 1996)).31 This is because a breach of the duty to defend 

31. The court in Hamlin Inc. v. Hartford Accident & Indemnity Co., 

86 F.3d 93 (7th Cir. 1996), explained that “[i]f the lack of a defender 

causes the insured to throw in the towel in the suit against it, the 

insurer may find itself obligated to pay the entire resulting 

judgment or settlement even if it can prove lack of coverage.” Id.

at 94. But the Nevada Supreme Court took a different approach.

After quoting the same provision in Hamlin that our Supreme 

Court quoted in Summerhaze, the court stated, “However, we are 

not saying that an entire judgment is automatically a consequence 

of an insurer’s breach of its duty to defend; rather, the insured is 

tasked with showing that the breach caused the excess judgment 

and is obligated to take all reasonable means to protect himself 

and mitigate his damages.” Century Surety Co. v. Andrew, 432 P.3d 

180, 186 (Nev. 2018) (quotation simplified). Thus, in Nevada, the

insurer may be liable for the judgment only if the insurer’s breach 

of the duty to defend caused the insured to be worse off and if the 

insured took mitigating actions—as opposed to merely throwing 

in the towel. 

 But our Supreme Court foreclosed either of these approaches 

when it stated that an insurer may challenge “its liability for the 

judgment, contest the amount of damages, or set forth any other 

available defense that the insured neglected to make” only if the 

insurer did not receive notice of the lawsuit. Summerhaze, 2014 UT 

28, ¶ 37. See also supra note 30. This approach is more in line with 

other jurisdictions that have held that the insurer is required to 

pay the resulting judgment regardless of prejudice. See, e.g., 

Consolidated Rail Corp. v. Liberty Mutual Ins. Co., 416 N.E.2d 758, 

(continued...)
Farm Bureau v. Weston

20180699-CA 46 2023 UT App 136

forecloses the insurer from challenging “its liability for the 

judgment.”32 See id. ¶ 37. 

¶76 Here, as discussed in Part III.A above, Farmers Insurance 

had a duty to defend Jared against Farm Bureau’s lawsuit until 

the trial court terminated the duty by ruling that Farmers 

Insurance had properly cancelled the insurance policy. The court 

entered the 2009 Judgment against Jared approximately four 

years prior to this requisite ruling. By not defending Jared until 

that point, Farmers Insurance violated the duty to defend. 

Accordingly, although it was later determined that no insurance 

policy was in effect at the time of the accident, because Farmers

Insurance had notice of Farm Bureau’s lawsuit against Jared, it 

764 (Ill. App. Ct. 1981) (“[W]here potential coverage exists and an 

insurer unjustifiably refuses to defend, the insurer is contractually 

estopped from denying coverage. Prejudice is not a critical 

factor.”); Farmers Union Mutual Ins. Co. v. Staples, 2004 MT 108, 

¶ 29, 90 P.3d 381 (stating that an insurer that breached its duty to 

defend “was estopped from denying coverage and [the insured] 

was entitled to summary judgment”).

32. In addition to the underlying judgment and attorney fees, an 

insurer who violates the duty to defend may also be liable for

consequential “damages for injury to reputation or credit rating, 

[or] damages for emotional distress,” Campbell v. State Farm 

Mutual Auto. Ins. Co., 840 P.2d 130, 139 (Utah Ct. App. 1992), cert. 

denied, 853 P.2d 897 (Utah 1992), as well as for punitive damages

under a claim for breach of fiduciary duty, see id.; Norman v. 

Arnold, 2002 UT 81, ¶ 35, 57 P.3d 997 (“In Utah, a claim for breach 

of fiduciary duty is an independent tort that, on occasion, arises 

from a contractual duty, and can serve as the basis for punitive 

damages.”); Beck v. Farmers Ins. Exch., 701 P.2d 795, 800 (Utah 

1985) (stating that the duty to defend is a fiduciary duty and that 

breach of the duty “exposes insurers to consequential and 

punitive damages awards in excess of the policy limits”).
Farm Bureau v. Weston

20180699-CA 47 2023 UT App 136

could not “challenge its liability for the judgment, contest the 

amount of damages, or set forth any other available defense that 

the insured neglected to make.” See id. We therefore reverse the 

trial court’s damages award and remand with instructions to 

enter an order directing Farmers Insurance to satisfy the 2009 

Judgment and additional interest on Jared’s behalf. 

¶77 The dissent engages in a thorough discussion of the two 

general categories of approaches other jurisdictions have taken in 

addressing the issue of damages for breach of the duty to defend: 

the “Illinois Rule” and the “majority rule.” See infra ¶¶ 106–08. 

The approach we have interpreted Summerhaze to mandate is

more akin to the Illinois Rule,33 in that it precludes an insurer who 

breaches the duty to defend from raising coverage defenses or 

otherwise challenging the judgment entered against the party to 

whom it owed the duty. The dissent, however, asserts that 

“several Utah cases have, in [its] view, implicitly signaled an 

affinity for the majority rule,” infra ¶ 109, under which “insurers 

who breach their duty to defend are not thereby estopped from 

raising coverage defenses later, and that the amount of damages 

an insured sustains from an insurer’s breach of a duty to defend 

must, for the most part, be shown through traditional methods of 

proving damages for breach of contract,” infra ¶ 105. The dissent 

further contends that, in its view, “the best reading of Summerhaze

is that it does not indicate adoption of the Illinois Rule.” Infra 

¶ 124. Although this issue would greatly benefit from further 

clarification from our Supreme Court, we disagree with the 

dissent’s conclusion that Utah case law favors the majority rule.

33. But as discussed in more detail below, because in Utah the 

duty to defend is a fiduciary duty, there are also significant 

potential differences between the rule interpreted in Summerhaze

and the general Illinois Rule adopted by other jurisdictions—at 

least in terms of the means by which the rule is reached. See infra 

¶¶ 78–80. See also supra note 31. 
Farm Bureau v. Weston

20180699-CA 48 2023 UT App 136

¶78 As an initial matter, the dissent discusses that the 

jurisdictions that have adopted the majority rule have leveled the 

following criticisms at the Illinois Rule: (1) if the duty to 

indemnify and the duty to defend “are truly separate and distinct, 

then an insurer’s wrongful failure to defend should not result in 

a loss of an indemnity defense,” infra ¶ 108 (quoting Flannery v. 

Allstate Ins. Co., 49 F. Supp. 2d 1223, 1228 (D. Colo. 1999)); (2) the 

“punitive” nature of the Illinois Rule is “out of place in the 

contract law context,” infra ¶ 108; and (3) estoppel, on which the 

Illinois Rule is largely based, “is conceptually not a good fit” 

because “in refusing to defend a claim, an insurer makes no 

misrepresentation [about coverage] on which the insured relies to 

its detriment,” infra ¶ 108 (alteration in original) (quoting Polaroid 

Corp. v. Travelers Indem. Co., 610 N.E.2d 912, 922 (Mass. 1993)). 

¶79 Concerning the first criticism, although the duty to 

indemnify and the duty to defend are “two distinct duties,” “an 

insurer’s duty to defend [is] broader than its duty to indemnify.” 

Summerhaze, 2014 UT 28, ¶ 36 (quotation simplified). Although 

this distinction has been discussed largely in terms of when the 

duty to defend is triggered, i.e., when the “complaint alleges any 

facts or claims that might fall within the ambit of the policy,” id.

(quotation simplified), the duty to defend is also broader in that 

the insurer may be held liable for “consequential and punitive 

damages awards in excess of the policy limits,” Beck v. Farmers Ins. 

Exch., 701 P.2d 795, 800 (Utah 1985). A reasonable inference would 

be that the duty to defend is broader than the duty to indemnify 

in that it covers not only judgments within policy limits, but also 

damages in excess of the policy limits.

¶80 Also, the second and third articulated concerns carry little 

weight in Utah. Although “an insurer’s duty to defend arises 

solely under the terms of the contract,” Equine Assisted Growth

& Learning Ass’n v. Carolina Cas. Ins. Co., 2011 UT 49, ¶ 8, 266 P.3d 

733 (quotation simplified), our Supreme Court has elevated the 

duty to defend to a fiduciary one that “exposes insurers to 
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consequential and punitive damages awards in excess of the 

policy limits,” Beck, 701 P.2d at 800. This is because “the contract

itself creates a fiduciary relationship because of the trust and

reliance placed in the insurer by its insured.” Id. at 799. Namely,

“the insurer controls the disposition of claims against its insured, 

who relinquishes any right to negotiate on his own behalf,” and

“[a]n insurer’s failure to act in good faith exposes its insured to a 

judgment and personal liability in excess of the policy limits.” Id.

Additionally, “[w]holly apart from the contractual obligations

undertaken by the parties,” in the third-party context, “the insurer

acts as an agent for the insured,” and “the law imposes upon all

agents a fiduciary obligation to their principals with respect to

matters falling within the scope of their agency.” Id. at 799–800. 

Finally, in Utah, the duty to defend is also a statutory

requirement. See Utah Code Ann. § 31A-22-303(5) (LexisNexis 

Supp. 2022) (“A policy containing motor vehicle liability coverage 

imposes on the insurer the duty to defend, in good faith, any 

person insured under the policy against any claim or suit seeking 

damages which would be payable under the policy.”). For these

reasons, despite the contractual roots of the duty to defend, the

“punitive” nature of our holding is not out of place, nor do we

read Summerhaze as imposing an estoppel-based rule. 

¶81 The dissent next discusses three Utah Supreme Court cases 

that, “in [its] view, implicitly signaled an affinity for the majority 

rule.” Infra ¶¶ 109–20. But in our view, two of those cases, Speros 

v. Fricke, 2004 UT 69, 98 P.3d 28, and Benjamin v. Amica Mutual 

Insurance Co., 2006 UT 37, 140 P.3d 1210, are of limited relevance

to the question of whether an insurer who breached its duty to 

defend may raise coverage defenses to the underlying judgment. 

And although the third case on which the dissent relies, McCarty 

v. Parks, 564 P.2d 1122 (Utah 1977), is somewhat instructive, it is 

at odds with Summerhaze, which, as the more recent case, carries 

the day on this issue.
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¶82 In discussing Speros,34 the dissent found it “notable that the 

Speros Court spent nineteen paragraphs determining whether 

coverage existed before analyzing whether Nationwide had 

breached its duty to defend” because “[i]f the Speros court had 

intended to adopt the Illinois Rule, there would have been no 

need to discuss coverage.” Infra ¶ 116 (citation omitted). But it was 

not necessary for the Court to consider adopting either rule in 

Speros.

35 After determining that coverage existed—which was the 

main point of contention in that case—the Court turned to the 

duty to defend only in the context of addressing the issue of 

whether “Nationwide is entitled to litigate anew the issue of 

Hiatt’s liability for the accident,” Speros, 2004 UT 69, ¶ 48, which

was the subject of a default judgment, see id. ¶ 4. The Court 

ultimately determined that “[w]hen Nationwide chose not to 

defend Hiatt, it forfeited its opportunity to dispute the underlying 

facts of the accident.” Id. ¶ 53. The issue of damages had already 

been resolved by the court’s analysis on coverage and, given the 

limited duty-to-defend issue the Court was asked to resolve, there 

was no need for the Court to consider whether the breach of the 

duty to defend precluded Nationwide from raising coverage 

issues—to the contrary, the Court had already held that coverage 

existed, thereby foreclosing the need to address such an issue.

Thus, because such an analysis was entirely unnecessary in Speros,

we do not read anything into the Court’s silence on the issue.

¶83 The dissent similarly notes that in Benjamin our Supreme 

Court first addressed the duty to defend before turning to the 

duty to indemnify. Infra ¶ 119. The dissent asserts that 

34. Because the dissent provides a detailed summary of each 

relevant case, we do not do so here.

35. There is no indication in Speros that the judgment entered 

against Hiatt was in excess of the policy limits, thus triggering the 

need for further analysis under the duty to defend.
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if the Illinois Rule were in effect, or if the Utah 

Supreme Court intended to adopt or apply that rule, 

there would be no need to engage in any analysis 

with regard to whether Amica breached the duty to 

indemnify because, under the estoppel rule, once it 

was determined that Amica had breached its duty 

to defend, Amica would be estopped from 

contesting coverage.[36]

Infra ¶ 119. But the facts of that case readily provide for an 

alternative explanation for why the Court proceeded to determine 

whether Amica breached the duty to indemnify after it already 

held that Amica breached the duty to defend. The two coworkers 

filed separate suits against Benjamin, both alleging, among other 

things, negligent infliction of emotional distress. See Benjamin, 

2006 UT 37, ¶ 2. The Court held that Amica breached the duty to 

defend only with regard to one of the coworker’s suits. See id. ¶ 26.

But “[b]ecause Amica never discontinued its defense in the 

[second] case,” the Court held that Amica “did not breach its duty 

to defend in that case.” Id. Accordingly, because there was no 

breach of the duty to defend in the second case, the Court was 

36. The dissent also notes that “even the majority opinion in this 

case attends first to the question of whether the policy was 

properly canceled, before then turning to the question of whether 

Farmers Insurance breached its duty to defend,” which the 

dissent asserts “is a majority rule process, at root.” Infra note 45.

But we initially undertook an analysis of whether the policy was 

properly cancelled because, if it turned out that it had not been, 

this much more difficult issue that has been the subject of 

disagreement among this panel would have been unnecessary. To 

be sure, after this legal question is more conclusively resolved, 

future cases in which an insurer is held to have breached the duty 

to defend might be more efficiently resolved by wholly omitting 

discussion of damages for the duty to indemnify. But this was not 

the case here.
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already required to reach the issue of the duty to indemnify at 

least in reference to the second case. It therefore would have been 

more efficient to simply resolve the issue of damages for both 

cases based on the breach of the duty to indemnify. And in light 

of this alternative explanation for the Court’s decision to address 

the duty to indemnify after it had already resolved the duty to 

defend issue, we likewise do not read too much into the Court’s 

approach in Benjamin as concerns our resolution of the issue 

currently before us.

¶84 This leaves the third case on which the dissent relies, 

McCarty. In that case, our Supreme Court held that the “general 

rule” that “an insurer, whose policy requires it to defend its 

insured, receives notice of a suit against him and is allowed an 

opportunity to defend, but refuses, is bound by the findings and 

judgment therein” did not apply to findings not “necessary to 

determination of the controversy between the immediate parties.” 

McCarty, 564 P.2d at 1123. Accordingly, because “the issue as to 

whether Mr. Parks was driving with the permission of the insured 

was not a material issue in the main case,” the insurer was able to 

subsequently litigate and eventually prevail on that issue. Id. at 

1123–24. In light of this, the dissent views “McCarty as quite 

strongly signaling affinity for the majority rule.” Infra ¶ 112. 

¶85 But as the dissent acknowledges, in holding that the 

insurer breached the duty to defend, the Court “did not engage in 

the traditional duty-to-defend analysis of comparing the 

plaintiff’s complaint against the applicable policy provisions, and 

did not discuss whether the plaintiff’s complaint alleged that 

Parks had permission to be driving the vehicle.” Infra ¶ 111. 

Instead, it resolved the issue by relying on res judicata principles. 

See McCarty, 564 P.2d at 1123–24. This, in our view, insufficiently 

counters the mandates our Supreme Court later set forth in 

Summerhaze, namely, that “any judgment against the insured will 

also conclusively bind the insurer” that breaches the duty to 

defend, Summerhaze, 2014 UT 28, ¶ 37 (emphasis added) 
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(quotation otherwise simplified), or that “an insurer may 

challenge its liability for the judgment, contest the amount of 

damages, or set forth any other available defense that the insured 

neglected to make” only if the insurer was not put on notice of the 

lawsuit, id. See id. ¶ 38 (“An insurer that refuses a tender of

defense by its insured takes the risk not only that it may

eventually be forced to pay the insured’s legal expenses but also

that it may end up having to pay for a loss that it did not insure

against.”) (quotation simplified). 

¶86 For these reasons, we disagree with the dissent’s

arguments, well-reasoned though they are. We also welcome

definitive clarification on this issue from our Supreme Court.

2. Emotional Distress

¶87 An insurer who violates the duty to defend may also be 

liable for consequential “damages for injury to reputation or 

credit rating, [or] damages for emotional distress.” Campbell v. 

State Farm Mutual Auto. Ins. Co., 840 P.2d 130, 139 (Utah Ct. App. 

1992), cert. denied, 853 P.2d 897 (Utah 1992). Here, the trial court 

revised its prior decision on emotional damages and reduced its 

award from $320,000 to $0 on the ground that Jared had not 

proven causation. Instead, the court stated that the evidence 

established that his emotional distress was caused by Farm 

Bureau’s lawsuit, the 2009 Judgment entered against him, and the 

lack of insurance coverage—not by Farmers Insurance’s breach of 

the duty to defend. The court also rejected Jared’s argument that 

he suffered emotional distress because the outcome of the 

underlying litigation would have been different if Farmers 

Insurance had represented him, stating that this assertion 

contradicted the parties’ prior stipulation that “[t]here is no 

evidence that a different outcome would have resulted had 

Farmers accepted [Jared’s] tender of defense—the facts 

supporting [Jared’s] fault and the amount needed to make [the 

deceased driver’s] heirs whole would not have changed based on 
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Farmers’ provision of a defense.” Lastly, the court stated that 

Jared’s “intermingling of the duty to defend issue with the issues 

of liability and coverage improperly leaves the fact-finder to 

speculate regarding which damages were actually caused by 

Farmers’ breach of the duty to defend.” Accordingly, quoting 

Gregory & Swapp, PLLC v. Kranendonk, 2018 UT 36, 424 P.3d 897, 

the trial court stated that because “testimony that [a breach of 

contract] could cause emotional damages is not enough to support 

a finding that [the breach] did cause emotional damages,” see id.

¶ 43 (emphases in original), and because “an abundance of 

evidence as to breach of duty cannot make up for a deficiency of 

evidence as to causation” or “for a deficiency of evidence as to 

damages,” see id. ¶ 44 (quotation simplified), Jared “failed to 

present evidence that gives rise to a reasonable probability that he 

suffered damages caused by Farmers’ breach of the duty to 

defend.” See Murphy v. Whalen, 2018 UT App 215, ¶ 7, 437 P.3d 619 

(“To prove the fact of damages, the party must do more than 

merely give rise to speculation that damages in fact occurred and 

instead must provide evidence that gives rise to a reasonable 

probability that the party suffered damages.”) (quotation 

simplified).

¶88 Jared argues that the trial court “erred by relying on the 

causation analysis in the breach of fiduciary duty claim in Gregory 

& Swapp” because it is distinguishable from the case at hand. In 

that case, the plaintiff sought emotional distress damages arising 

from her attorney’s breach of fiduciary duty when he concealed 

from her that her personal injury lawsuit had been dismissed. See 

2018 UT 36, ¶¶ 10, 40. Although a jury awarded the plaintiff a 

significant sum for emotional damages as a result of the breach, 

see id. ¶ 3, our Supreme Court reversed, stating that “the evidence 

provided at trial shows only that she suffered emotional distress 

due to [her attorney’s] legal malpractice” that resulted in 

dismissal of her earlier lawsuit, id. ¶ 40, and “the jury had no 

evidence upon which to base its verdict that [the plaintiff] 
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suffered emotional distress damages as a result of [her attorney’s] 

intentional concealment,” id. ¶ 45.

¶89 Jared argues that Gregory & Swapp is distinguishable 

because “[t]he specific nature of the breach of fiduciary duty” in 

that case “was merely informational,” and it therefore “caused no 

additional harm to the plaintiff’s situation otherwise.” Whereas

here, Jared asserts, Farmers Insurance’s breach of fiduciary duty 

“resulted in actual harm” because if Farmers Insurance had

“defended Jared, and settled within policy limits when the 

opportunity was presented, he would not have endured the 

emotional distress of a seven-figure excess judgment against 

him.” In essence, Jared argues that the court erred in rejecting his 

argument that his being held liable for an excess judgment caused 

emotional distress. But Jared does not address his stipulation 

below that “the facts supporting [Jared’s] fault and the amount 

needed to make [the deceased driver’s] heirs whole would not 

have changed based on Farmers’ provision of a defense.” 

Additionally, Jared has not challenged the court’s finding of fact 

in its original order awarding him $320,000 in emotional damages 

that “[t]he outcome of the underlying action would not have 

changed had [Jared] been provided counsel by” Farmers

Insurance. For this reason, Jared’s argument distinguishing 

Gregory & Swapp necessarily fails.

¶90 Jared also contends that Gregory & Swapp distinguished 

Beck v. Farmers Insurance Exchange, 701 P.2d 795 (Utah 1985), which 

specifically discussed emotional damages in a first-party 

insurance context for breach of contract, see Gregory & Swapp, 2018 

UT 36, ¶ 35 n.42. Jared asserts that “an insurance contract is 

different than an attorney/client retainer agreement, for purposes 

of seeking emotional distress damages upon breach of contract.” 

We disagree.

¶91 In Gregory & Swapp, our Supreme Court stated that just like 

with insurance contracts, “an argument can be made that clients 
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20180699-CA 56 2023 UT App 136

retain attorneys in personal injury cases not only to obtain 

monetary compensation, but also to provide peace of mind, and 

therefore mental anguish is fairly contemplated in the contract.” 

Id. See also Beck, 701 P.2d at 802 (“[I]t is axiomatic that insurance 

frequently is purchased not only to provide funds in case of loss, 

but to provide peace of mind for the insured or his 

beneficiaries.”). The Court further quoted Beck (which discussed 

emotional distress damages for breach of contract in the 

first-party insurance context, see Beck, 701 P.2d at 801–02) for the 

proposition that, in any event, “the foreseeability of any such 

damages will always hinge upon the nature and language of the 

contract and the reasonable expectations of the parties,” Gregory 

& Swapp, 2018 UT 36, ¶ 35 n.42 (quotation simplified), and that 

based on this, “the nature and language of the contract do not 

support emotional distress damages in this case.” Id. The Court 

thus expressly applied Beck and did not distinguish it.

¶92 In any event, our Supreme Court’s discussion of Beck

occurred in the context of its holding that the plaintiff was not 

entitled to emotional distress damages, as a matter of law, under 

a breach of contract theory. See id. ¶ 36. The standard the trial court 

in this case relied on fell under our Supreme Court’s discussion of 

breach of fiduciary duty, see id. ¶¶ 37, 43–44, under which umbrella, 

breach of the duty to defend also falls, see Beck, 701 P.2d at 799.

¶93 For these reasons, we affirm the trial court’s later 

determination that Jared had not proven that he suffered 

emotional distress as a result of Farmers Insurance’s failure to 

defend against Farm Bureau’s lawsuit.37

37. Because we affirm the trial court’s holding that Jared failed to 

prove that Farmers Insurance’s breach of the duty to defend 

caused his emotional distress, we do not address his argument 

that the court “erred when it limited Jared’s emotional distress 

(continued...)
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3. Attorney Fees 

¶94 “Attorney fees may be recoverable as consequential 

damages flowing from an insurer’s breach of either the express or 

the implied terms of an insurance contract” as long as the fees

“were 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, 468 (Utah 1996). 

“Breach of a fiduciary obligation is a well-established exception to 

the American rule precluding attorney fees in tort cases 

generally.” Kealamakia, Inc. v. Kealamakia, 2009 UT App 148, ¶ 7, 

213 P.3d 13 (quotation simplified). Thus, when attorney fees are 

awarded as consequential damages—as opposed to pursuant to a 

statute or contract—the inquiry “is not whether the fee awards are 

reasonable, but whether they are foreseeable.” USA Power, LLC v. 

PacifiCorp, 2016 UT 20, ¶ 93, 372 P.3d 629. “[I]t is this foreseeability 

requirement that justifies an award based solely on a contingency 

fee.” Id. For attorney fees based on a contingency fee agreement 

to be foreseeable, the party seeking attorney fees must show 

(1) “that it was foreseeable that the insured party would incur 

attorney fees if the insurer breached” and (2) “that the specific 

contingency fee arrangement entered into by the insured party 

was foreseeable.” Id. ¶ 94. 

¶95 Jared challenges the trial court’s denial of his request for 

attorney fees for Farmers Insurance’s breach of the duty to defend. 

He argues that he “should be awarded 40% of the [2009 Judgment] 

against him,” which figure reflects the contingency fee agreement

he entered with his attorneys. In light of our holding that Jared is 

damages to a period during which he was unrepresented by 

counsel.” We likewise do not address his argument that the court 

erred in not awarding damages for impairment to his credit score 

because this issue was not preserved. See State v. Johnson, 2017 UT 

76, ¶ 15, 416 P.3d 443. 
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20180699-CA 58 2023 UT App 136

entitled to an award equal to the 2009 Judgment plus interest, we 

agree.

¶96 The trial court originally awarded Jared $128,000 in 

attorney fees as consequential damages, which represented 40% 

of the court’s original emotional distress award that Jared would 

have owed his attorneys under the contingency fee agreement. In

so doing, the court found that (1) “[i]t was foreseeable to Farmers 

that its refusal to defend would force [Jared] to obtain counsel”

and (2) “[i]t was also foreseeable to Farmers that counsel would 

charge a contingent fee of 40% as a result of Farmers’ breach of 

the duty to defend.” The court later reversed this attorney fees 

award but did so only because it had reduced its emotional 

damages award to $0. Based on our holding that Jared is entitled 

to a judgment equal to the amount of the 2009 Judgment plus 

post-judgment interest, Jared is likewise entitled to an award of 

40% of that judgment as attorney fees—which award the trial

court has already determined to be foreseeable. We therefore

remand to the trial court to enter an award of attorney fees in 

accordance with the contingency fee agreement.38

38. Based on this award of attorney fees, we do not consider

Jared’s arguments that he is entitled to recover the “market value” 

and “reasonable” value of his attorneys’ services for the litigation 

he engaged in related to his liability for the accident and to the 

broader issues related to cancellation of the insurance policy. This

also includes his contentions that the court erred in refusing to 

bifurcate the second bench trial to determine reasonable attorney 

fees separately and his assertion that the court erred in excluding 

his exhibits related to attorney fees. Jared does not address the 

basis, contractual or otherwise, for an award of attorney fees that 

is in addition to the contingency fees he contracted to pay his 

attorneys. Indeed, the above award of attorney fees represents 

direct compensation for his attorneys’ efforts in establishing that 

(continued...)
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20180699-CA 59 2023 UT App 136

IV. Duty of Good Faith and Fair Dealing

¶97 Jared challenges the trial court’s grant of Farmers

Insurance’s motion for partial summary judgment on Jared’s 

breach of the duty of good faith and fair dealing claim. A 

third-party insurer has “a fiduciary responsibility to act in good 

faith and be zealous in protecting the interests of its insured as it 

would in looking after its own.” UMIA Ins., Inc. v. Saltz, 2022 UT 

21, ¶ 44, 515 P.3d 406 (quotation simplified). Several duties “are 

inherent in the duty to act in good faith,” including the duties to

“act promptly and reasonably in accepting or rejecting the 

insured’s claim for coverage, defend the insured, diligently 

investigate the claims against the insured, fairly and reasonably 

evaluate the claims against the insured, and fairly and reasonably 

settle the claims against the insured.” Id. ¶ 45 (quotation 

simplified).

¶98 The trial court granted Farmers Insurance’s unopposed 

motion for partial summary judgment on the ground that the

motion showed that Jared had “not identified facts supporting his 

bad faith claim,” thereby shifting the burden to Jared “to show 

that genuinely disputed material facts barred the relief sought.” 

See Orvis v. Johnson, 2008 UT 2, ¶ 18, 177 P.3d 600 (“A summary

judgment movant, on an issue where the nonmoving party will

bear the burden of proof at trial, may satisfy its burden on

summary judgment by showing, . . . that there is no genuine issue

of material fact. Upon such a showing . . . the burden then shifts

to the nonmoving party, who may not rest upon the mere

allegations or denials of the pleadings, but must set forth specific

Farmers Insurance breached the duty to defend because Jared was 

found liable in the accident-related litigation and was therefore 

not entitled to any award from which his attorneys could be 

compensated 40%. Accordingly, because he has not carried his 

burden of persuasion on this threshold issue, we do not consider 

the issues that stem therefrom. 
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facts showing that there is a genuine issue for trial.”) (quotation

simplified). The court ruled that by not opposing the motion, 

Jared failed to show that a genuine issue of material fact barred 

summary judgment. 

¶99 Jared’s argument on cross-appeal is limited to asserting 

that Farmers Insurance’s motion “failed to identify facts 

supporting its purported investigation,” and that “there was 

nothing in [Farmers Insurance’s] memorandum which addressed 

whether its duty to defend was ‘fairly debatable’ by reference to 

the allegations contained in [Farm Bureau’s] complaint.” In other 

words, Jared argues that Farmers Insurance failed to meet its 

burden on summary judgment. But Jared does not address the 

court’s reasoning in granting summary judgment, i.e., that the 

burden of showing a genuine issue of fact shifted to him and that 

he failed to meet this burden when he did not oppose the motion. 

Accordingly, because Jared does not address the ground on which 

the court based its ruling, we do not reach the merits of Jared’s 

argument.39 See Salt Lake County v. Butler, Crockett & Walsh Dev. 

Corp., 2013 UT App 30, ¶ 28, 297 P.3d 38 (stating that appellate 

courts will not reverse a trial court’s ruling where the appellant 

does not challenge all grounds on which the court’s ruling rests).

V. Award of Costs Related to the 2009 Judgment 

¶100 Finally, Farmers Insurance argues that the trial court

“erred when it allowed Farm Bureau to amend its judgment 

against Jared in 2019” under rule 54(d) of the Utah Rules of Civil 

Procedure. See Utah R. Civ. P. 54(d)(1) (“Unless a statute, these 

rules, or a court order provides otherwise, costs should be 

39. Because we do not disturb the trial court’s grant of summary 

judgment on this issue, we likewise do not address Jared’s 

argument that the court subsequently erred in determining that 

the law of the case doctrine applied to its summary judgment 

ruling.
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20180699-CA 61 2023 UT App 136

allowed to the prevailing party.”). It contends that even if the 2009 

Judgment had not expired—which we hold it had not, see supra

Part I—the Judgment “could not be amended to add costs Farm 

Bureau incurred during the entire litigation.” We agree.

¶101 The 2009 Judgment—which represented the arbitration 

award Farm Bureau obtained against Jared for causing the 

automobile accident, plus pre-judgment interest—provided that 

it “shall be augmented in the amount of reasonable costs and 

attorney fees expended in collecting said Judgment by execution 

or otherwise as shall be established by affidavit.” Nine years later, 

in 2018, Farm Bureau moved to amend the 2009 Judgment to 

include $11,423.04 in costs that it incurred between 2005 and 2013. 

Most of the list consisted of costs that were unrelated to collection 

on the 2009 Judgment, including arbitration fees, deposition costs, 

subpoena costs, and transcript costs. The court initially denied 

Farm Bureau’s motion, stating that it could “discern no costs or 

attorney fees detailed therein that were incurred in collecting the 

2009 Judgment.” But the court later awarded Farm Bureau the 

requested costs, stating that because the 2009 Judgment was not a 

final judgment, it could be “properly augmented to include the 

costs requested” by Farm Bureau, which the court concluded 

“were necessary and reasonable given the complexity of this 

litigation and are therefore recoverable in accordance with rule 

54(d)(1).”

¶102 But the 2009 Judgment permitted subsequent 

augmentation for the limited purpose of adding an award for, 

with our emphasis, “reasonable costs and attorney fees expended 

in collecting said Judgment by execution or otherwise[.]”As an 

initial matter, the costs Farm Bureau claimed to have incurred 

between 2005 and March 2009, when the court first entered the 

2009 Judgment, could not possibly have been related to 

“collecting said Judgment.” And almost all the costs Farm Bureau 

incurred between March 2009 and 2013 appear to be related to 

Farm Bureau’s subsequent litigation against Farmers Insurance 
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20180699-CA 62 2023 UT App 136

regarding whether the insurance policy was in effect at the time 

of the accident. Such litigation was ultimately resolved following 

the first bench trial, and, notably, Jared and Farm Bureau were 

allied at this point in seeking a judgment against Farmers 

Insurance. See supra note 8. It cannot be said that the subsequent 

litigation in this matter constituted efforts to collect the 2009 

Judgment. And in any event, even if some of the requested costs 

were related to collection on the 2009 Judgment, because the 2009 

Judgment did not become enforceable for nearly a decade after its 

entry, any actions taken in the interim to collect on the judgment 

would have been improper.

¶103 We accordingly reverse and remand with instructions for 

the trial court to strike the $11,423.04 award of costs from the 2009 

Judgment.

CONCLUSION

¶104 The 2009 Judgment was not a final judgment under rule 

54(a) of the Utah Rules of Civil Procedure and therefore the 

eight-year period under section 78B-5-202(1) of the Utah Code did 

not begin to run on entry of the judgment. Accordingly, none of 

the issues Farm Bureau and Jared raise on appeal are moot, and 

we have jurisdiction to address all issues raised. We affirm the 

trial court’s ruling that the insurance policy on the 1992 Ford 

Explorer was cancelled prior to the fatal accident, the court’s

ruling on summary judgment that Farmers Insurance did not 

breach its duty of good faith and fair dealing but that it did breach 

its duty to defend, and the court’s determination that Jared had 

not proven that Farmers Insurance’s breach of the duty to defend 

was the cause of his emotional distress. We reverse and remand, 

however, with instructions that the trial court remove the award 

of $11,423.04 in costs from the 2009 Judgment, order Farmers 

Insurance to pay the 2009 Judgment and any related costs and 

interests on Jared’s behalf, and enter an award of attorney fees 

equaling 40% of the aforementioned judgment in favor of Jared.
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HARRIS, Judge (concurring in part and dissenting in part):

¶105 I concur without reservation in Parts I, II, IV, and V of the 

majority opinion. I also concur completely in Part III.A—

concluding that Farmers Insurance breached its duty to defend 

Jared in the suit filed against him by Farm Bureau—and in Part 

III.B.2—affirming the trial court’s determination that Jared had 

not proven that he sustained emotional distress as a result of 

Farmers Insurance’s breach of its duty to defend. But I cannot join 

Parts III.B.1 and III.B.3 of the majority opinion, because I believe 

the best (but by no means the only possible) reading of Utah 

Supreme Court case law is that, in Utah, insurers who breach their 

duty to defend are not thereby estopped from raising coverage 

defenses later, and that the amount of damages an insured

sustains from an insurer’s breach of a duty to defend must, for the 

most part, be shown through traditional methods of proving 

damages for breach of contract.40 In this case, I would affirm the 

trial court’s determination that Jared failed to satisfy his burden 

of proving any such damages. 

40. I am already on record, in a way, on this issue. As a district 

judge, in another case, I issued a lengthy memorandum decision 

on these very issues. See Fleming v. State Auto Prop. & Cas. Ins. Co., 

No. 100500504 (Utah 3d Dist. Ct., Summit County, Nov. 14, 2014). 

Nothing in the briefing and argument associated with this case 

has persuaded me that my analysis in Fleming was incorrect or 

should be revisited. In fact, as noted below, federal judges—both 

at the district court level and on appeal—viewed the relevant 

issues in the Fleming cases largely the same way I did. See AutoOwners Ins. Co. v. Fleming, 701 F. App’x 738, 740–41, 740 n.1 (10th 

Cir. 2017); Auto-Owners Ins. Co. v. Timbersmith, Inc., No. 2:12-cv00786, 2016 WL 3356800, at *3 (D. Utah June 15, 2016), aff’d, AutoOwners Ins. Co. v. Fleming, 701 F. App’x 738 (10th Cir. 2017). My 

thoughts in this separate opinion therefore largely track my 

previous decision. 
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20180699-CA 64 2023 UT App 136

I

¶106 For years, courts across the country have wrestled with the 

exact issue presented here: what are, or should be, the 

consequences visited upon an insurer that breaches its duty to 

defend an insured. There is no consensus on the question. Courts 

in some states, most notably Illinois, have held that an insurer 

whose insured has been sued on a claim that the insurer believes 

is beyond the scope of the policy’s coverage has three options: 

(1) seek a declaratory judgment relieving it of the obligation to 

defend; (2) defend the insured under a reservation of rights; or 

(3) do neither and risk a subsequent finding that it breached its 

duty to defend, “a finding that would require it to indemnify the 

insured for any liability the insured incurs in the underlying 

action.” See Roman Cath. Diocese of Springfield in Ill. v. Maryland Cas. 

Co., 139 F.3d 561, 565–66 (7th Cir. 1998) (applying Illinois law); see 

also Solo Cup Co. v. Federal Ins. Co., 619 F.2d 1178, 1184 (7th Cir. 

1980) (also applying Illinois law). These courts have emphasized 

that their rule is grounded in principles of estoppel: “[t]he 

estoppel that the insurer risks when it elects to do nothing is an 

estoppel to deny coverage if it turns out that the insurance 

company did have an obligation to defend and breached that 

obligation.” See Roman Cath. Diocese, 139 F.3d at 566; see also

Sentinel Ins. Co. v. First Ins. Co. of Haw., 875 P.2d 894, 911 (Haw. 

1994) (stating that several jurisdictions, including Illinois, “hold 

that an insurer in breach of its duty to defend is precluded from 

taking the position that the judgment or settlement did not 

involve a covered risk”). The courts following this so-called 

“Illinois Rule” emphasize that “[a]n insurer should be subjected 

to some legal consequence for breaching its duty to defend an 

insured,” and that insurers ought to be incentivized to “appear on 

behalf of the policyholder in the underlying lawsuit.” See K2 Inv.

Group, LLC v. American Guar. & Liab. Ins. Co., 6 N.E.3d 1117, 1121 
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20180699-CA 65 2023 UT App 136

(N.Y. 2014) (Graffeo, J., dissenting). The Illinois Rule has been 

adopted in about a dozen states, as set out in the margin.

41

¶107 But the Illinois Rule is not followed in most of the

jurisdictions to have considered the question.42 The opposite 

41. See Underwriters at Lloyds v. Denali Seafoods, Inc., 927 F.2d 459, 

462–65 (9th Cir. 1991) (applying Washington law); St. Paul Fire 

& Marine Ins. Co. v. Vigilant Ins. Co., 919 F.2d 235, 240 (4th Cir. 

1990) (applying North Carolina law); Jones v. Southern Marine & 

Aviation Underwriters, Inc., 888 F.2d 358, 363 (5th Cir. 1989) 

(applying Mississippi law); Columbus Life Ins. Co. v. Arch Ins. Co., 

No. 3:14-cv-01659, 2016 WL 2865952, at *12 (N.D. Ind. May 27, 

2016) (applying Ohio law); Sauer v. Home Indem. Co., 841 P.2d 176, 

183 (Alaska 1992); Missionaries of Co. of Mary, Inc. v. Aetna Cas. & 

Surety Co., 230 A.2d 21, 25–26 (Conn. 1967); Farmers Union Mutual 

Ins. Co. v. Staples, 2004 MT 108, ¶ 28, 90 P.3d 381; IMO Indus. Inc. 

v. Transamerica Corp., 101 A.3d 1085, 1112–13 (N.J. Super. Ct. App. 

Div. 2014); Dove v. State Farm Fire & Cas. Co., 399 P.3d 400, 406 

(N.M. Ct. App. 2017); Conanicut Marine Services, Inc. v. Insurance

Co. of N. Am., 511 A.2d 967, 971 (R.I. 1986); Marks v. Houston Cas. 

Co., 2016 WI 53, ¶ 72, 881 N.W.2d 309. 

42. Although “obtaining an exact ‘scorecard’ of the states on this 

issue can be difficult because of the absence of definitive authority 

in many states,” Jeffrey W. Stempel, Enhancing the Socially 

Instrumental Role of Insurance: The Opportunity and Challenge 

Presented by the ALI Restatement Position on Breach of the Duty to 

Defend, 5 U.C. Irvine L. Rev. 587, 595 (2015) [hereinafter Stempel], 

commentators agree that the majority of jurisdictions do not 

follow the Illinois Rule, see id. at 595–96; see also Douglas R. 

Richmond, A Liability Insurer’s Breach of the Duty to Defend and the 

Controversial Forfeiture of Coverage Defenses, 47 Fla. St. U. L. Rev. 

583, 596 (2020) [hereinafter Richmond]; Todd S. Weiss, A Natural 

Law Approach to Remedies for the Liability Insurer’s Breach of the Duty 

(continued...)
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20180699-CA 66 2023 UT App 136

position—that insurers who breach their duty to defend are not

estopped from later contesting the scope of coverage—has 

actually been adopted in more than twenty states and represents 

the prevailing majority rule.43 At least two different judicial 

opinions, as well as various commentators, have canvassed the 

various cases. See Flannery v. Allstate Ins. Co., 49 F. Supp. 2d 1223, 

1227 (D. Colo. 1999); Sentinel, 875 P.2d at 911; see also 1 Allan D. 

to Defend: Is Estoppel of Coverage Defenses Just?, 57 Alb. L. Rev. 145, 

147 (1993) [hereinafter Weiss].

43. See Scottsdale Ins. Co. v. Byrne, 913 F.3d 221, 231 (1st Cir. 2019) 

(applying Massachusetts law); Colonial Oil Indus., Inc. v. 

Underwriters Subscribing to Policy Nos. TO31504670 and 

TO31504671, 133 F.3d 1404, 1405 (11th Cir. 1998) (applying 

Georgia law); Enserch Corp. v. Shand Morahan & Co., 952 F.2d 1485, 

1493 (5th Cir. 1992) (applying Texas law); Flannery v. Allstate Ins. 

Co., 49 F. Supp. 2d 1223, 1227 (D. Colo. 1999) (applying Colorado 

law); Alabama Farm Bureau Mutual Cas. Ins. Co. v. Moore, 349 So. 2d 

1113, 1116 (Ala. 1977); Quihuis v. State Farm Mutual Auto. Ins. Co., 

334 P.3d 719, 727–29 (Ariz. 2014); Sunseri v. Camperos Del Valle 

Stables, Inc., 185 Cal. App. 3d 559, 561–62 (1986); Caldwell v. Allstate 

Ins. Co., 453 So. 2d 1187, 1190 (Fla. Dist. Ct. App. 1984); Sentinel 

Ins. Co. v. First Ins. Co. of Haw., 875 P.2d 894, 911 (Haw. 1994); Hirst 

v. St. Paul Fire & Marine Ins. Co., 683 P.2d 440, 447 (Idaho Ct. App. 

1984); Foreman v. Jongkind Bros., 625 N.E.2d 463, 469 (Ind. Ct. App. 

1993); Aselco, Inc. v. Hartford Ins. Group, 21 P.3d 1011, 1020 (Kan. 

Ct. App. 2001); Cincinnati Ins. Co. v. Vance, 730 S.W.2d 521, 524 (Ky. 

1987); Arceneaux v. Amstar Corp., 66 So. 3d 438, 452 (La. 2011); Elliot 

v. Hanover Ins. Co., 1998 ME 138, ¶ 7, 711 A.2d 1310; Alton M. 

Johnson Co. v. M.A.I. Co., 463 N.W.2d 277, 279 (Minn. 1990); K2 Inv.

Group, LLC v. American Guar. & Liab. Ins. Co., 6 N.E.3d 1117, 1120 

(N.Y. 2014); Sellie v. North Dakota Ins. Guar. Ass’n, 494 N.W.2d 151, 

155 (N.D. 1992); Timberline Equip. Co. v. St. Paul Fire & Marine Ins. 

Co., 576 P.2d 1244, 1246 (Or. 1978); American States Ins. Co. v. State 

Auto. Ins. Co., 721 A.2d 56, 64 (Pa. Super. Ct. 1998). 
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20180699-CA 67 2023 UT App 136

Windt, Insurance Claims & Disputes: Representation of Insurance 

Companies & Insureds § 4:37 (6th ed. 2023) (stating that “[t]he vast 

majority of cases have properly held that an insurer’s unjustified 

refusal to defend does not estop it from later denying coverage 

under its duty to indemnify” and that “[t]he insurer’s breach of 

contract should not . . . be used as a method of obtaining coverage 

for the insured that the insured did not purchase”). 

¶108 The courts following the majority rule have emphasized 

that “the duty to defend and the duty to indemnify are separate 

and distinct,” and have reasoned that “if the two duties are truly 

separate and distinct, then an insurer’s wrongful failure to defend 

should not result in a loss of an indemnity defense.” See Flannery, 

49 F. Supp. 2d at 1228 (quotation simplified); see also Sentinel, 875 

P.2d at 912 (“[A] blanket application of coverage by waiver or 

estoppel, based upon the failure to provide a defense, subverts 

any meaningful distinction between the duty to defend and the 

separate duty to indemnify and, in many cases, serves no more 

than to punish the insurer for the breach of a contractual duty.”). 

Indeed, these courts have been troubled by the “punitive” aspect 

of the estoppel rule, finding such a concept—at least in the 

absence of bad faith—out of place in the contract law context. See

Hirst v. St. Paul Fire & Marine Ins. Co., 683 P.2d 440, 447 (Idaho Ct. 

App. 1984) (stating that “[w]e question the propriety of utilizing 

a form of estoppel as a punitive measure against an insurer for 

breach of a contractual duty to defend”). They have also 

recognized that “estoppel” is conceptually not a good fit, stating 

that “no estoppel is involved in any traditional sense because, in 

refusing to defend a claim, an insurer makes no misrepresentation 

[about coverage] on which the insured relies to its detriment.” See

Polaroid Corp. v. Travelers Indem. Co., 610 N.E.2d 912, 922 (Mass. 

1993). Rather than estop the insurer from contesting coverage for 

the underlying judgment or settlement, the majority of courts 

allow an insurer—even one that breached its duty to defend an 

insured—to litigate coverage issues in a second case.
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20180699-CA 68 2023 UT App 136

II

¶109 Utah appellate courts have never issued an opinion 

expressly stating whether Utah follows the majority rule or the 

Illinois Rule. But several Utah cases have, in my view, implicitly 

signaled an affinity for the majority rule. The situation is far from 

clear,44 but as I explain in this section, my best reading of Utah 

case law is that our Supreme Court either has followed, or would 

follow if the question were squarely presented, the majority rule.

¶110 The first Utah case to discuss the issue is McCarty v. Parks, 

564 P.2d 1122 (Utah 1977). In that case, Parks was employed by a 

car repair business in Arizona, and obtained permission from the 

business owner to use a vehicle owned by the business, after 

telling the business owner that he needed to make a short trip to 

a neighboring town and would be back in two or three days. Id. at 

1123. After “borrowing” the vehicle, Parks proceeded to drive 

from Arizona to Salt Lake City, where he remained for over two 

months. Id. While in Utah he was involved in an automobile 

accident. Id. A third party was injured in the accident, and sued 

Parks in Utah. Id. The insurer that had issued a policy to the 

Arizona business owner was notified of the suit, but refused to 

provide Parks with a defense, claiming that Parks did not have 

the permission of the owner to be driving the vehicle and was 

therefore not covered under the policy, which covered only 

individuals driving the vehicle with permission. Id. at 1124. 

Because the insurer refused to defend Parks, a default judgment 

44. This lack of clarity has led commentators to list Utah as falling 

on both sides of the debate. Compare Stempel, supra note 42, at 596 

n.30 (including Utah with the states that follow the majority rule), 

with Richmond, supra note 42, at 603 n.116 (listing Utah among the 

states that follow the Illinois Rule). As already noted, and as 

discussed below, one federal appellate court construing Utah law 

considers Utah to follow the majority rule. See Auto-Owners Ins. 

Co. v. Fleming, 701 F. App’x 738, 740–41, 740 n.1 (10th Cir. 2017).
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was entered against Parks, which judgment specifically included 

a finding that Parks “was driving [the vehicle] with permission of 

its owner.” Id. at 1123. The question in McCarty was whether the 

insurer was bound by that particular finding of the court in the 

default judgment in the first case. Id. at 1123–24. 

¶111 The Court in McCarty did not engage in the traditional 

duty-to-defend analysis of comparing the plaintiff’s complaint 

against the applicable policy provisions, and did not discuss 

whether the plaintiff’s complaint alleged that Parks had 

permission to be driving the vehicle. Id. Instead, the Court viewed 

the case through res judicata principles, and proceeded to analyze 

whether the insurer should be bound by the default judgment 

findings in the first case. Id. Ultimately, the Court determined that 

the insurer was not bound by that finding, despite the “general 

rule” that “an insurer[] whose policy requires it to defend its 

insured, receives notice of a suit against him and is allowed an 

opportunity to defend, but refuses, is bound by the findings and 

judgment therein.” Id. at 1123. The Court determined that this 

“general rule” did not apply to findings not “necessary to 

determination of the controversy between the immediate parties.” 

Id. Because resolution of the plaintiff’s tort suit against Parks did 

not require determination of whether Parks had permission to be 

driving the vehicle, the insurer would not be bound by that 

extraneous finding, and would be “afforded an opportunity to 

raise and have determined the issue as to its own liability, so long 

as doing so is not inconsistent with the findings on material issues 

which were determined” in the first case between the plaintiff and 

Parks. Id. In the end, after considering the issue anew, the trial 

court in McCarty determined that—despite the extraneous finding 

in the default judgment—Parks did not have permission to be 

driving the vehicle, and was therefore not covered by the policy, 

and this decision was affirmed on appeal. Id. at 1123–24.

¶112 Thus, in McCarty, an insurer was allowed to contest 

coverage issues in a second case, even after refusing to defend a 
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potential insured, and even after the court in the first case, in the 

context of a default judgment, had made a finding (albeit an 

extraneous one) that compelled coverage. See id. In the course of 

reaching its decision, the McCarty Court cited approvingly to a 

California case, see id. at 1123 n.3 (citing Geddes & Smith, Inc. v. St. 

Paul-Mercury Indem. Co., 334 P.2d 881 (Cal. 1959)), that espouses 

“majority rule” principles, see Sentinel, 875 P.2d at 910 (citing 

Geddes & Smith as a majority rule case). Thus, even though the 

court in McCarty did not expressly state that it was following the 

majority rule, I view McCarty as quite strongly signaling affinity 

for the majority rule. 

¶113 Our Supreme Court again discussed these issues in Speros 

v. Fricke, 2004 UT 69, 98 P.3d 28. In that case, Fricke was driving a 

passenger, named Hiatt, home from a nightclub on New Year’s.

Id. ¶ 2. Hiatt was in the front passenger seat. Id. On the way home, 

“Hiatt suddenly and without warning reached over and grabbed 

the [vehicle’s] steering wheel,” causing the vehicle to veer into 

oncoming traffic and to collide with Speros’s vehicle. Id. Fricke 

was insured by Nationwide Insurance Company, and Speros was 

insured by West American Insurance Company. Id. ¶¶ 2–3. West 

American compensated Speros for his injuries, and demanded 

reimbursement from Nationwide, asserting that the accident was 

not Speros’s fault. Id. ¶ 3. Nationwide looked at the case and 

determined that Fricke was not negligent, and that the 

Nationwide policy covering Fricke did not cover Hiatt under the 

circumstances. Id. Based on this conclusion, Nationwide refused 

to reimburse West American, and West American then filed suit 

against Hiatt, Fricke, and Nationwide. Id. In that suit, Nationwide 

defended the claims alleged against itself and against Fricke, but 

refused to defend Hiatt and, as a result, West American obtained 

a default judgment against Hiatt. Id. ¶ 4.

¶114 On appeal, our Supreme Court first tackled the issue of 

whether Nationwide’s policy with Fricke covered Hiatt. Id. ¶¶ 31–

40. First, the Court discussed whether there was coverage for 
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Hiatt under the policy and, after a lengthy analysis, determined 

that “[b]ecause Hiatt had permission to ride in Fricke’s car as a 

passenger, . . . he was covered as a ‘permissive user’ under 

Fricke’s policy with Nationwide for the duration of the ride” and 

that “Hiatt’s actions in grabbing and turning the steering wheel 

did not disqualify him from permissive user status.” Id. ¶ 40. 

Next, the Court took up the issue of whether the “intentional acts” 

exclusion in the policy applied to the facts of the case. Id. ¶¶ 41–

47. After a lengthy discussion that included consideration of 

statutes and public policy, the Court held that “the intentional acts 

exclusion is unenforceable against accident victims up to the 

minimum liability limits prescribed by the statute.” Id. ¶ 44. 

Accordingly, the Court determined that coverage existed under 

the Nationwide policy for the actions committed by Hiatt, at least 

up to the statutory minimum limits. Id. ¶ 47.

¶115 Only after concluding that coverage existed for Hiatt did 

the Court then turn to whether Nationwide breached its duty to 

defend Hiatt. See id. ¶¶ 48–53. Unlike in McCarty, the Court in 

Speros did engage in a traditional duty-to-defend analysis, and 

ultimately determined that “[t]he complaint filed by Speros and 

West American imposed a duty on Nationwide to defend Hiatt,” 

because that complaint alleged that Hiatt’s negligent acts caused 

the accident and alleged that Hiatt was an insured person under 

the Nationwide policy with Fricke. Id. ¶¶ 50–51. The Court held 

that when Nationwide exposed Hiatt to the risk of a default 

judgment “in breach of its duty to defend, it also exposed itself to 

the risk that it could lose the ability to litigate the facts giving rise 

to Hiatt’s alleged liability and that it could thereafter be held liable 

for the resulting judgment.” Id. ¶ 51. “When Nationwide chose 

not to defend Hiatt, it forfeited its opportunity to dispute the 

underlying facts of the accident.” Id. ¶ 53. 

¶116 In my view, it is notable that the Speros Court spent 

nineteen paragraphs determining whether coverage existed, see

id. ¶¶ 29–47, before analyzing whether Nationwide had breached 
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its duty to defend. If the Speros Court had intended to adopt the 

Illinois Rule, there would have been no need to discuss coverage, 

because the conclusion that the duty to defend had been 

breached—an analysis that depends on the allegations in the 

complaint, not on the actual facts—would have automatically 

resulted in coverage under that estoppel-based rule.45 Second, 

when viewed in tandem with McCarty, the Court’s statement in 

Speros that an insurer “forfeit[s] its opportunity to dispute the 

underlying facts of the accident,” see id. ¶ 53, can only be a 

reference to facts vital to the determination of negligence and 

related issues,see McCarty, 564 P.2d at 1123 (stating that an insurer 

is “bound by the findings and judgment” in an underlying case 

that it elects not to defend, but not with regard “to matters 

collateral or immaterial to the essential issues involved in the 

case”); see also Speros, 2004 UT 69, ¶ 52 (citing and quoting 

McCarty). The fact that the Court did not automatically apply 

estoppel upon determining that a duty to defend had been 

breached leads me to conclude that Speros did not apply the 

Illinois Rule, and that its reference to an insurer being bound was 

only meant to re-state the conclusions of McCarty. In other words, 

I read Speros as concluding that a breaching insurer’s loss of “the 

ability to litigate the facts giving rise to [the putative insured’s]

alleged liability” in the underlying case, see Speros, 2004 UT 69, 

¶ 51, does not include the loss of the ability to litigate coverage 

issues not decided in, or not necessary to the result of, the first 

45. Indeed, even the majority opinion in this case attends first to 

the question of whether the policy was properly cancelled, before 

then turning to the question of whether Farmers Insurance 

breached its duty to defend. This is a majority rule process, at root; 

after all, if the consequence of Farmers Insurance’s breach of its 

duty to defend is that it is estopped from contesting coverage, 

then we need not have spent some ten pages exploring the 

propriety of Farmers Insurance’s cancellation. See supra ¶¶ 43–60.
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case. I therefore interpret Speros, on balance, as a case following 

the tenets of the majority rule. 

¶117 The next case to discuss these issues arose only two years 

after Speros, and in my view provides the clearest guidance of any 

of the Utah cases. In Benjamin v. Amica Mutual Insurance Company, 

2006 UT 37, 140 P.3d 1210, two female co-workers of Benjamin 

asserted that Benjamin had sexually assaulted them. Id. ¶ 2. 

Accordingly, they filed two separate suits against Benjamin, 

stating both intentional tort claims (e.g., assault, battery, 

intentional infliction of emotional distress) as well as negligent 

tort claims (e.g., negligent infliction of emotional distress). Id.

Benjamin tendered defense of the suits to his insurer, Amica, who 

had issued him a homeowners policy. Id. ¶ 5. Amica initially 

defended Benjamin, subject to a reservation of rights, in both 

cases, but later discontinued its defense in one of them after 

questioning Benjamin under oath about the allegations. Id. ¶ 6.

The policy did not apply to injury “which is expected or intended 

by the insured,” and Amica believed that this exclusion precluded 

coverage for Benjamin for the claims asserted. Id. ¶ 17 (quotation 

simplified). The “undefended” case proceeded to trial, without 

Amica assisting in the defense, and the jury found Benjamin liable 

only on the claim for negligent infliction of emotional distress, and 

found for Benjamin on the intentional tort claims. Id. ¶ 7. After 

trial in the first suit, Benjamin entered into settlement negotiations 

with both plaintiffs in both suits simultaneously. Id. ¶ 8. Benjamin 

notified Amica of the negotiations and asked Amica to participate, 

but Amica refused. Id. Thereafter, Benjamin settled both cases and 

asked Amica to indemnify him for the entire amount of the 

settlements, and Amica refused. Id.

¶118 Benjamin then filed suit against Amica, accusing Amica of 

breaching both the duty to defend and the duty to indemnify, and 

alleging that Amica acted in bad faith. Id. ¶ 9. The trial court ruled 

in favor of Benjamin and found that Amica had breached both 

duties. Id. ¶ 10. Amica appealed. Id. ¶ 11. This time, unlike in 
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Speros, the Utah Supreme Court tackled the issues in the more 

logical order: it first analyzed whether Amica had breached its 

duty to defend Benjamin, and then turned to whether coverage 

existed. On the first point, the Court compared the allegations of 

the complaint with the provisions of the policy, and determined 

that the policy covered negligent torts, and that the complaint 

alleged at least one such tort (negligent infliction of emotional 

distress). The Court stated that “Amica had a duty to defend 

Benjamin until it could establish that [the negligence] claims were 

not supported by the facts,” and that “[b]ecause Amica owed a 

duty to defend the negligent infliction of emotional distress 

claims, Amica owed a duty to defend all of the claims.” Id. ¶¶ 22, 

25; see id. ¶ 25 (“When there are covered and non-covered claims 

in the same lawsuit, the insurer is obligated to provide a defense 

to the entire suit, at least until it can limit the suit to those claims 

outside of the policy coverage” (quotation simplified)). 

¶119 After determining that Amica had breached its duty to 

defend Benjamin, the Court then turned to the question of 

whether Amica had breached its duty to indemnify. See id. ¶¶ 27–

30. It is worth noting, here, that if the Illinois Rule were in effect, 

or if the Utah Supreme Court intended to adopt or apply that rule, 

there would be no need to engage in any analysis with regard to 

whether Amica breached the duty to indemnify because, under 

the estoppel rule, once it was determined that Amica had 

breached its duty to defend, Amica would be estopped from 

contesting coverage. But this is not what the Court did. The Court 

examined the language of the applicable policy in an effort to 

determine whether coverage existed for the claims Amica had 

refused to defend. Id. In the end, the Court determined that “the 

duty to indemnify is tied to the existence of covered claims,” and 

“for the same reasons that Amica was obligated to defend against 

the claims for negligent infliction of emotional distress, it was also 

obligated to pay for the covered damages arising from those 

claims for which Benjamin was legally liable,” id. ¶ 28 (quotation 

simplified), an amount the Court determined to be the “amount 
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[Benjamin] paid to settle the negligent infliction of emotional 

distress claims,” id. ¶ 30 (quotation simplified). 

¶120 The Court also determined that Amica was not allowed to 

second-guess Benjamin’s decision to settle with the plaintiffs or 

the overall settlement amount, given that Amica had been offered 

the opportunity to “participate in and control” those settlement 

talks and had refused. Id. ¶ 29. However, the Court recognized 

that the settlement amount may well have included payments for 

both covered (negligent) and uncovered (intentional) claims, but 

noted that it did not have sufficient information before it to 

“determine what amount, if any, Benjamin paid to settle” the 

negligence claims, and “instruct[ed] the district court to hold a 

factual hearing to determine that amount.” Id. ¶ 30. In my view,

this procedure is emphatically a “majority rule” procedure, and 

not an “Illinois Rule” procedure. 

¶121 And that brings me to Summerhaze Co. v. Federal Deposit 

Insurance Corp., 2014 UT 28, 332 P.3d 908, the case principally 

relied upon by the majority opinion in this case. See supra ¶¶ 73–

75 & 74 n.30.46 In Summerhaze, an employee of a bank embezzled 

46. The majority relies heavily on its application of a statement 

from Summerhaze: “‘[A]n insurer may challenge its liability for the 

judgment, contest the amount of damages, or set forth any other 

available defense that the insured neglected to make’ only if the 

insurer was not put on notice of the lawsuit.” See supra ¶ 74 

(emphasis omitted) (quoting Summerhaze Co. v. FDIC, 2014 UT 28,

¶ 37, 332 P.3d 908). In my view, the majority overreads 

Summerhaze. The quotation from Summerhaze states simply that an 

insurer who does not receive a tender of defense from an insured 

“may challenge its liability for the judgment, contest the amount 

of damages, or set forth any other available defense that the 

insured neglected to make.” See Summerhaze, 2018 UT 28, ¶ 37. 

Indeed, the majority acknowledges that Summerhaze was not 

(continued...)
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funds from the bank, and various creditors and affiliates of the 

bank filed suit against the bank alleging that it had improperly 

accepted unauthorized signatures and that it had acted 

negligently. Id. ¶ 2. The bank tendered the defense of the claim to 

its insurer, BancInsure. Id. ¶ 3. The bank also filed a declaratory 

judgment action against BancInsure seeking to establish that 

coverage existed for the claims brought by the plaintiffs, but that 

action was placed on a stipulated hold pending the outcome of 

the first suit brought by the plaintiffs. Id. ¶ 4.

¶122 Just a few months later, however, the bank was shut down 

by regulators, and the Federal Deposit Insurance Corporation (the 

FDIC) was appointed as the bank’s receiver. Id. ¶ 5. All of the 

bank’s creditors, including the plaintiffs, received notice of the 

receivership and were instructed that any claims against the bank 

needed to be submitted by proof of claim to the FDIC by a certain 

date pursuant to federal law. Id. The plaintiffs, apparently 

presented with the question of whether an insurer would have 

any such rights if it had received notice of the lawsuit. See supra

note 30. But in the majority’s view, “it naturally follows that if an 

insurer who did not receive notice may do so, then an insurer who 

did receive notice may not.” Id. In my view, however, no such 

thing “naturally follows”; indeed, the majority of courts to have 

taken up the question as to whether any such thing “naturally 

follows” have concluded that it does not. And Summerhaze did not 

purport to be taking up the relevant question. See Auto-Owners 

Ins. Co. v. Fleming, 701 F. App’x 738, 741 & n.1 (10th Cir. 2017) 

(referring to Summerhaze’s discussion of these issues as “dicta” 

that “was not necessary to the ultimate resolution of the case”). 

Neither this paragraph of Summerhaze nor any other ever states or 

holds that an insurer who breaches its duty to defend is foreclosed 

from raising coverage defenses in a second case, and Summerhaze

certainly does not expressly adopt the Illinois Rule. For the 

reasons discussed, in my view the majority is reading far too 

much into Summerhaze. 
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believing that their pending lawsuit sufficed as “notice,” did not 

file a proof of claim with the FDIC within the time prescribed. Id.

¶ 6. The FDIC then filed a motion to dismiss the plaintiffs’ lawsuit 

on the ground that the state district court lacked subject matter 

jurisdiction over the case due to the plaintiffs’ failure to timely 

send a proof of claim pursuant to federal law. Id. ¶ 7. The trial 

court granted the FDIC’s motion, and the plaintiffs appealed. Id.

¶123 At issue on appeal, among other things, was whether the 

bank’s tender of defense of the lawsuit to BancInsure had 

deprived the FDIC of authority to resolve the claims, thus 

excusing the plaintiffs from any obligation they might otherwise 

have had to file a timely proof of claim. Id. ¶ 35. The Utah Supreme 

Court noted that the bank had tendered the defense of the claim 

to BancInsure, but held that 

[t]he tender of defense did not affect the rights of the 

[b]ank or the FDIC, nor did it change the real party 

in interest. The tender of defense merely triggered 

the duty of defense under the Bond. The [b]ank and 

the FDIC were still actively involved in the defense 

of the claims. Therefore, the [b]ank and the FDIC 

retained authority to resolve the claims.

Id. ¶ 39. Accordingly, the Court ruled that the bank’s tender of 

defense did not excuse the plaintiffs’ failure to comply with the 

federal proof-of-claim requirement. Id.

¶124 Nothing in the Summerhaze Court’s discussion of this topic 

has, in substance, anything to do with whether the Illinois Rule or 

the majority rule applies in Utah. However, in discussing the 

bank’s tender of defense of the claims to BancInsure, the Court 

included some citations to certain Seventh Circuit cases that apply 

the Illinois Rule. See id. ¶¶ 36, 38 & nn.82, 91 (citing Solo Cup Co. 

v. Federal Ins. Co., 619 F.2d 1178, 1183 (7th Cir. 1980)). One 

quotation in particular, at least at first glance, might seem to 

indicate allegiance to the Illinois Rule: “An insurer ‘that refuses a 
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tender of defense by its insured takes the risk not only that it may 

eventually be forced to pay the insured’s legal expenses but also 

that it may end up having to pay for a loss that it did not insure 

against.’” Id. ¶ 38 & n.92 (quoting Hamlin Inc. v. Hartford Accident

& Indem. Co., 86 F.3d 93, 94 (7th Cir. 1996)). In my view, however,

the best reading of Summerhaze is that it does not indicate 

adoption of the Illinois Rule. This is so for several reasons.

¶125 First, the Hamlin case quoted in Summerhaze is a case out of 

Wisconsin, not out of Illinois, and in that case Judge Posner, 

writing for the Seventh Circuit, articulated his view that 

Wisconsin, at least conceptually and at least at the time, followed 

the majority rule, not the Illinois Rule. See Hamlin, 86 F.3d at 94–

95 (citing Wisconsin law to the effect that “the insured must show 

that he was made worse off by the breach [of the duty to defend] 

than he would have been had the breach not occurred,” noting 

that this rule was “the majority view,” and that this rule was 

“inconsistent with a rule of always forbidding the insurer that has 

wrongfully refused to defend the insured’s case to deny 

coverage”).47 Second, the discussion in Summerhazeis by no means 

one-sided; at one point the Court stated that “an insurer’s duty to 

defend [is] broader than its duty to indemnify,” and “the duty to 

indemnify is determined by the underlying facts of the case, while 

the duty to defend is controlled by the allegations in the complaint 

against the insured.” 2014 UT 28, ¶ 36 (quotation simplified). 

Third, the Summerhaze Court did not even cite, let alone discuss, 

our Supreme Court’s decisions in McCarty, Speros, and Benjamin. 

If the Court had intended to announce that it was adopting the 

Illinois Rule, it would have needed to distinguish, if not outright 

47. A Wisconsin case decided since Hamlin sheds some doubt on 

Judge Posner’s interpretation of Wisconsin law. See Radke v. 

Fireman’s Fund Ins. Co., 577 N.W.2d 366, 369–70 (Wis. Ct. App. 

1998), overruled on other grounds by Marks, 2016 WI 53. And in any 

event, it is now clear that Wisconsin follows the Illinois Rule. See

Marks, 2016 WI 53, ¶ 72. 
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overrule, that precedent, and it did not do so. Fourth and finally, 

whether the “estoppel rule” applies in Utah to an insurer that

breached its duty to defend was not at all relevant to the issue 

presented in Summerhaze. Thus, even to the extent that 

Summerhaze’s citations to Seventh Circuit cases could be 

construed as tacit endorsement of the Illinois Rule, such an 

endorsement would necessarily be dicta. 

¶126 Indeed, the United States Court of Appeals for the Tenth 

Circuit agrees with my reading of Summerhaze. See Auto-Owners 

Ins. Co. v. Fleming, 701 F. App’x 738 (10th Cir. 2017). In that case, 

the Tenth Circuit was required to analyze Utah case law—just as 

we are here—and to determine whether, under Utah law, insurers 

who breached their duty to defend were thereby estopped from 

raising coverage defenses. See id. at 740. The court examined the 

same Utah cases I examine here, and concluded that the 

discussion, in Summerhaze, regarding “estoppel and an insurer’s 

duty to defend . . . was only intended to provide context to the 

jurisdictional analysis and was not necessary to the ultimate 

resolution of the case,” and opined that “[s]uch dicta should not 

be taken to overrule the express holdings of McCarty and Speros, 

which were not cited” in Summerhaze. Id. at 741 & n.1. Applying 

this interpretation of Utah law, the court affirmed a federal district 

court’s similar ruling and held that the insurance companies were 

not “estopped from challenging coverage” merely because they 

had breached their duty to defend an insured. Id. at 741. 

¶127 In the end, after examination of all of this Utah case law, I 

think we find ourselves in a position similar to the position in 

which the Kansas Court of Appeals found itself in Aselco, Inc. v. 

Hartford Insurance Group, 21 P.3d 1011 (Kan. Ct. App. 2001). There, 

the court was faced with the decision whether to adopt the Illinois 

Rule, and canvassed Kansas law on the topic in an effort to 

determine whether the Kansas Supreme Court followed the 

majority rule. Id. at 1019–21. It noted that a Kansas federal court

had already examined the issue, and had stated that
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Kansas courts have addressed situations in which 

[the Illinois Rule] could have been applied if the 

courts were so inclined but have not done so. In 

Spruill Motors, Inc. v. Universal Underwriters Ins. Co., 

512 P.2d 403 (Kan. 1973), the insurer breached its 

duty to defend the insured but the Kansas Supreme 

Court dealt with the merits of the insurer’s policy 

defenses anyway. A similar situation was present in 

Snodgrass v. State Farm Mutual Auto. Ins., 804 P.2d 

1012 (Kan. 1991), in which a jury determined that 

State Farm had breached its duty to defend but on 

appeal, the appellate court considered State Farm’s 

policy defenses concerning coverage. In either of 

these cases, had they chosen to do so, the court 

could have estopped the insurer from asserting its 

policy defenses after finding that it breached it[s]

duty to defend. 

See id. at 1020 (quoting Johnson v. Studyvin, 828 F. Supp. 877, 886–

87 (D. Kan. 1993)) (quotation simplified). The court also noted 

another Kansas Supreme Court case in which the court, “[d]espite 

the insurer’s earlier refusal to provide a defense,” nevertheless 

“considered the insurer’s policy arguments and held that 

coverage was excluded.” See id. (referring to Patrons Mutual Ins.

Ass’n v. Harmon, 732 P.2d 741 (Kan. 1987)). In the end, the court 

felt that the Kansas Supreme Court’s “actions . . . speak louder 

than its words,” and determined that “[b]ecause Kansas courts 

have been presented with situations in which they could have 

estopped insurers who have breached their duties to defend from 

denying coverage and have not done so, this court will not find 

that Kansas courts would so hold.” Id. (quoting Johnson, 828 F. 

Supp. at 887); see also id. (“[W]e believe the cases decided to this 

point mean our Kansas Supreme Court would not adopt a bright 

line rule that insurers who fail to provide a defense and reserve 

their rights are inevitably equitably estopped from raising their 

coverage defenses.”). 
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¶128 So too here. Although the Utah Supreme Court has never 

expressly stated that it has adopted the majority rule (as opposed 

to the Illinois Rule), its actions “speak louder than its words.” Id.

In McCarty, Speros, and (especially) Benjamin, the Utah Supreme 

Court has allowed insurers who refused to defend their insureds 

to later raise coverage defenses. This was allowed in Speros and 

Benjamin despite express determinations in both of those cases 

that the insurer had indeed breached its duty to defend the 

insured. Because the Utah Supreme Court has, three times, been 

“presented with situations in which it could have estopped 

insurers who have breached their duties to defend from denying 

coverage and [has] not done so,” I cannot—in the absence of 

something more clearly so indicating—conclude “that the [Utah 

Supreme Court] would so hold.”48 Cf. id. 

48. The propriety of adopting the Illinois Rule (over the majority 

rule) is one that turns on, among other things, one’s sense of 

policy and related factors. Commentators have provided cogent 

arguments on both sides of the question. Compare Richmond, 

supra note 42, at 614, and Weiss, supra note 42, at 149, with Stanley 

C. Nardoni, Estoppel for Insurers Who Breach Their Duty to Defend: 

Answering the Critics, 50 J. Marshall L. Rev. 53 (2016), and Stempel, 

supra note 42, at 614–15. Even the authors of the Restatement of 

Liability Insurance have gone back and forth on the question. In 

2014, the drafters decided to align the Restatement with the 

Illinois Rule, see Restatement of Liab. Ins. § 21 (Am. L. Inst., 

Tentative Draft No. 2, 2014), taking the position that an insurer 

that breaches the duty to defend loses “the right to contest 

coverage for the claim.” See id. § 19(1) (Am. L. Inst., Discussion 

Draft, 2015). In a subsequent draft, however, the drafters sought a 

middle ground and suggested an estoppel rule that would apply 

only to an insurer who breaches “the duty to defend without a 

reasonable basis for its conduct.” See id. § 19(2) (Am. L. Inst., 

Tentative Draft No. 1, 2016). But in 2019, the drafters rejected the 

(continued...)
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¶129 Thus, my best reading of Utah Supreme Court precedent—

a reading aligned with the Tenth Circuit’s—leads me to conclude 

that Utah does not follow the Illinois Rule, and that under the 

prevailing majority rule, Farmers Insurance would not be 

estopped, merely by virtue of its breach of its duty to defend 

Jared, from raising coverage defenses later. 

III

¶130 The fact that an insurer that breaches its duty to defend 

remains free to raise coverage defenses later does not necessarily 

mean that the insurer gets off scot-free from its breach of duty. In 

most cases, there remain consequences for an insurer that 

breaches its duty to defend, even if those consequences do not 

include complete estoppel of coverage defenses. 

¶131 First of all, as McCarty and Speros clearly indicate, an 

insurer may not contest the amount of any judgment rendered 

Illinois Rule altogether and adopted the majority rule. See id. § 19 

(Am. L. Inst. 2019) (adopting “the prevailing legal rule” that an 

“insurer that breaches the duty to defend” may still contest 

coverage but also “forfeits the right to assert any control over the 

defense or settlement of the action”); see also Richmond, supra note 

42, at 591–92 (noting that, in 2019, the Restatement drafters 

“ultimately rejected the forfeiture-of-coverage-defenses rule . . . in 

favor of the majority rule, meaning that an insurer that mistakenly 

breaches the duty to defend retains the right to contest coverage”). 

Were we operating on a blank slate in Utah, I may have something 

to say in this context about which rule I think is the better one. But 

as set forth in this section, I do not think we are operating on a 

blank slate, and I view the Utah Supreme Court as having 

implicitly signaled its affinity for the majority rule. At any rate, 

this case may present a good opportunity for the Utah Supreme 

Court to clarify its intentions and, in that setting, perhaps examine 

which rule is the better one from a policy standpoint. 
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against an insured in a lawsuit it refused to defend, nor may it 

contest any findings or conclusions rendered by the trial court in 

the undefended case that are necessary to the result there reached. 

See Speros, 2004 UT 69, ¶¶ 51, 53 (clarifying that, when an insurer 

breaches its duty to defend, it “expose[s] itself to the risk that it 

could lose the ability to litigate the facts giving rise to [the 

insured’s] alleged liability,” and stating that “[w]hen [an insurer] 

chose not to defend [a putative insured], it forfeited its 

opportunity to dispute the underlying facts of the accident”); 

McCarty, 564 P.2d at 1123 (noting the “general rule” that an 

insurer that breaches its duty to defend “is bound by the findings 

and judgment” in the underlying case, but that this general rule 

does not apply to findings and conclusions not “necessary to 

determination of the controversy between the immediate 

parties”). And in my view, the inability of an insurer to contest 

the amount of the underlying judgment or conclusions necessary 

to it was exactly what the Summerhaze Court was referring to 

when it warned that “an insurer that refuses a tender of defense 

by its insured takes the risk not only that it may eventually be 

forced to pay the insured’s legal expenses but also that it may end 

up having to pay for a loss that it did not insure against.” See

Summerhaze, 2014 UT 28, ¶ 38 (quotation simplified). As applied 

here, Farmers Insurance is prohibited from contesting the amount 

of the judgment Farm Bureau obtained against Jared, as well as 

any findings or conclusions that were necessary to the court’s 

judgment in that case. But under the majority rule, it is barred 

from raising coverage defenses only to the extent that those 

defenses are impaired by one or more of the findings or

conclusions that were necessary to the underlying judgment. And 

that is not the case here. The court in the underlying tort suit had 

no occasion to weigh in on whether the policy had been properly 

cancelled due to Joelyn’s failure to pay premiums. 

¶132 Second, an insurer that breaches its duty to defend is 

subject to paying any damages that are the result of that specific 

breach. See Signature Dev. Cos. v. Royal Ins. Co. of Am., 230 F.3d 
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1215, 1222 (10th Cir. 2000) (applying Colorado law and stating 

that “when an insurer breaches its duty to defend, the insured is 

entitled to receive compensation for any prejudice the insured 

may have suffered as a result of the breach”). Often, any attorney 

fees incurred in the undefended lawsuit are recoverable as 

compensation for breach of the duty to defend. See, e.g., Polaroid 

Corp. v. Travelers Indem. Co., 610 N.E.2d 912, 921 (Mass. 1993)

(“Certainly the insurers are liable in contract to [the insured] for 

its defense costs (up to the time that it was determined that the 

[plaintiff’s] claims were not covered by the various policies).”). 

Beyond that rather obvious component of damages, insureds may 

recover other types of damages as well. See id. at 922 (stating that 

“an insurer should be liable for the natural consequences of a 

breach of contract that places its insured in a worse position”). It 

is theoretically possible, for instance, that in certain cases “an 

obligation to pay settlement costs could result from a breach of 

the duty to defend.” Id. Or, “if an insured lacks financial resources 

sufficient to maintain a proper defense, an insured’s losses in the 

underlying claim could well be the result of a breach of the duty 

to defend.” Id. Ordinarily, an insured’s attorney fees incurred in 

the second case—the coverage case—are not causally linked to the 

breach of the duty to defend, because those same fees would have 

been incurred in a declaratory judgment action filed at the outset 

even if the insurer had acted appropriately and filed one. 

However, in some cases, it may be possible for an insured to 

demonstrate that attorney fees incurred in the second case—the 

coverage case—are causally linked to the insurer’s breach of the 

duty to defend. See, e.g., Enserch Corp. v. Shand Morahan & Co., 952 

F.2d 1485, 1495 & n.15 (5th Cir. 1992) (applying Texas law and 

determining that “the findings for which we remand this case 

would have been made had the insurers fulfilled their duties to 

defend” the insured and, as a result, the insurer would be 

obligated to pay the insured “its reasonable costs and attorney 

fees for defending its side of the allocation determination on 

remand”). Furthermore, an insurer that breaches a duty to defend 

may also be subject to consequential “damages for injury to 
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reputation or credit rating, [or] damages for emotional distress.” 

See Campbell v. State Farm Mutual Auto. Ins. Co., 840 P.2d 130, 139 

(Utah Ct. App. 1992), cert. denied, 853 P.2d 897 (Utah 1992). But 

such damages inquiries are to be viewed not through the lens of 

estoppel but, rather, through the lens of “normal contract 

damages principles.” See Polaroid, 610 N.E.2d at 921; see also id. at 

921–22 (“Even when an insurer’s conduct is unfair or deceptive 

. . . , the insured must prove that the insurer’s conduct was the 

cause of any loss it sustained.”). 

¶133 In this case, the trial court determined that Jared had not 

borne his burden of demonstrating that he had sustained 

damages that were directly linked to Farmers Insurance’s breach 

of its duty to defend. As the majority correctly notes, supra ¶ 28, 

“we review for an abuse of discretion the trial court’s 

determination that [a party] failed to introduce sufficient evidence 

to establish damages, and we will not overturn the trial court’s 

decision unless there was no reasonable basis for [that] decision,” 

Macris v. Sevea Int’l, Inc., 2013 UT App 176, ¶ 26, 307 P.3d 625 

(quotation simplified). On the record before us, I perceive no 

abuse of discretion in the court’s damages ruling, and I would 

affirm it on that basis.