This opinion is subject to revision before final

publication in the Pacific Reporter

2018 UT 04

IN THE

SUPREME COURT OF THE STATE OF UTAH

GABLES AT STERLING VILLAGE HOMEOWNERS ASSOCIATION, INC.

Appellant and Cross-Appellee,

v.

CASTLEWOOD-STERLINGVILLAGE I, LLC., 1

Appellees and Cross-Appellants.

No. 20160100

Filed February 9, 2018

On Direct Appeal

Third District, Salt Lake

The Honorable Judge Elizabeth A. Hruby-Mills

No. 100901740

Attorneys:

A. Richard Vial, Edward W. McBride, Jr., Jeffery J. Owens,

David A. Cox, Salt Lake City, for appellants and cross-appellees

Heinz J. Mahler, Shane T. Peterson, and Smith D. Monson,

Salt Lake City, for appellees and cross-appellants CastlewoodSterling Village I, LLC, Castlewood Development LLC, Castlewood 

Development, Inc., Castlewood Builders, LLC, Richard L. Harris,

and Jeffrey A. Duke

Other Parties to the Proceeding:

Joseph E. Minnock, Anna Nelson, Salt Lake City, for

Lamoreaux Construction Corporation

Albert W. Gray, Michael W. Wright, Sandy, for 

B.A. Critchfield Construction, LLC

_____________________________________________________________

1 Other parties to this appeal are JEFFERY A. DUKE; DARREN 

MANSELL; DAN LYBBERT; CASTLEWOOD DEVELOPMENT, LLC;

CASTLEWOOD DEVELOPMENT, INC.; CASTLEWOOD BUILDERS, LLC;

RICHARD L. HARRIS; and JOHN DOES 1–30.
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

2

Susan Black Dunn, Wayne L. Black, Salt Lake City, for 

Beus Roofing, Inc.

Elisabeth M. McComber, Douglas P. Farr, Salt Lake City, for 

R&JL Siding and Management, LLC

JUSTICE PEARCE authored the opinion of the Court, in which

CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE LEE,

JUSTICE HIMONAS, and JUDGE BROWN joined.

Due to her retirement, JUSTICE DURHAM did not participate herein;

and DISTRICT COURT JUDGE JENNIFER A. BROWN sat.

JUSTICE PETERSEN became a member of the Court on

November 17, 2017, after oral argument in this matter,

and accordingly did not participate.

JUSTICE PEARCE, opinion of the Court:

INTRODUCTION

¶ 1 Sometime after the property developer who built the Gables 

at Sterling Village turned that planned unit development over to The 

Gables at Sterling Village Homeowner’s Association (the 

Association), property owners began to notice problems. Concrete 

was cracking and buckling. Decks became unsafe to walk on. Stucco 

began peeling off of the units and stones fell off of pillars. The 

Association filed this action against the developer, the builders, and 

their principals alleging, among other things, breaches of fiduciary 

duty and of the implied warranty of habitability. The property 

developer asserted a counterclaim for indemnification. The district

court granted summary judgment against the Association, reasoning 

that the Association lacked contractual privity with the property 

developer. The district court later granted the property developer’s 

motion for directed verdict on the Association’s claim for breach of 

fiduciary duty. None of the Association’s claims survived summary 

judgment or directed verdict. The property developer filed a posttrial motion for indemnification of attorney fees, which the district

court granted.

¶ 2 The Association appealed and the property developer crossappealed. Because we affirm that the district court did not err by 

granting summary judgment and directed verdict, we do not reach 

the merits of the property developer’s cross-appeal. We conclude, 

however, that the developer should have tried his indemnification 
Cite as: 2018 UT 04

Opinion of the Court

3

claim rather than raise it by post-trial motion, and we therefore 

vacate the district court’s award of attorney fees. We award the 

property developer its costs on appeal under rule 34 of the Utah 

Rules of Appellate Procedure.

BACKGROUND

¶ 3 Jeffrey A. Duke owned and operated several business 

entities—Castlewood-Sterling Village I, LLC, Castlewood 

Development, LLC (collectively, Developer), and Castlewood 

Builders, LLC. Through these entities, Duke developed the Gables at 

Sterling Village, a planned unit development comprised of seventyeight residential units in fifteen buildings. Once construction was 

complete, Developer drafted and recorded the Declaration of 

Covenants, Conditions, and Restrictions of the Gables (the 

Declaration).

¶ 4 Under the Declaration, Developer retained control of the 

Association until a certain number2 of units had been sold. At that 

_____________________________________________________________

2 We use the term “certain number” as a stand-in for the 

Declaration’s formula to calculate when turnover would occur: 

Class A Members shall be all owners other than 

[Developer] until the Class B membership ceases. Class 

A members shall be entitled to one (1) vote for each 

Living Unit or Lot (if no Living Unit is located thereon) 

owned. The vote appurtenant to each Unit shall have a 

permanent character and shall not be altered without 

the unanimous written consent of all Owners 

expressed in a duly recorded amendment to this 

Declaration. The vote appurtenant to each Unit may 

not be divided between multiple Owners of such Unit 

or between matters which require the vote of the 

Owners. . . . The Class Member shall be entitled to 

three (3) votes for each Living Unit or Lot (if no Living 

Unit is located thereon) owned. The Class B 

Membership shall automatically cease and be 

converted to a Class A membership on the first to occur 

of the following events: (a) When the total number of 

votes held by all Class A Members equals the total 

number of votes held by the Class B Member; or (b) 

The expiration of Seven (7) years after the date on 

(continued . . .)
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

4

point, Developer turned control of the Association over to its 

members.

¶ 5 The Declaration gave the Association responsibility for 

maintaining the common areas and certain parts of the living units:

The Association shall maintain, repair, and replace all 

landscaping and improvements in the Common 

Areas . . . . The Association shall provide exterior 

maintenance of the Living Units including but not 

limited to painting, repair, replacement and care of 

roofs, gutters, downspouts, and exterior building 

surfaces.

¶ 6 To fulfill its obligation, the Declaration authorized the 

Association to levy assessments on its members. Additionally, the 

Declaration gave the Association the authority to use assessment 

funds to “establish[] and fund[] a reserve to cover major repair or 

replacement of improvements within the Common Areas.” 

Developer also drafted and recorded the Association’s Articles of 

Incorporation (the Articles). The Articles contained an 

indemnification provision that provided for indemnification of 

board members and officers under certain circumstances:

The Corporation shall indemnify any and all of its 

officers or members of the Board of Trustees, or former 

officers or members of the Board of Trustees, or any 

person who may have actually and necessarily 

incurred by them in connection with the defense of any 

action, suit or proceeding in which they or any of them 

are made parties, or a party, by reason of being or 

having been members of the Board of Trustees or 

officers of the Corporation, except in relation to matters 

as to which any member of the Board of Trustees or 

officer or former officer or member of the Board of 

Trustees or person shall be adjudged in such action, 

suit or proceeding to be liable for negligence or 

misconduct in the performance of duty.

 

which this Declaration is filed for record in the office of 

the County Recorder of Salt Lake County, Utah.

Developer is the Class B Member.
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Opinion of the Court

5

¶ 7 Developer turned over control of the Association to its 

members in 2008. At this point, the Association had $16,581 in its 

reserve account. After turnover, the Association retained an expert to 

conduct a reserve study to determine whether Developer had 

adequately funded the reserve account before handing the 

Association the reins. The reserve study indicated that by 2009, the 

reserve account’s ideal balance would have been roughly $45,000. 

But the expert also concluded that the $16,581 starting balance 

“indicate[d] a fair reserve fund position.”

¶ 8 Shortly after the Association took control, a multitude of 

construction defects manifested themselves, apparently caused by 

water intrusion into the structural components of the living units. 

The Association retained a construction expert, who estimated the 

total cost of repair for the defects in the common areas and exterior 

surfaces of the units to be about $4,600,000. Over the next several 

years, the Association levied assessments on its members and paid 

for various repairs at the Gables with money from the Association’s 

operating and reserve accounts.

¶ 9 In 2010, the Association sued Developer, alleging, among 

other things, breach of fiduciary duties, breach of contract, breach of 

express and implied warranties, and joint-venture liability between 

Developer and Duke. Developer raised a counterclaim for 

indemnification, arguing that the Articles of Incorporation entitled it 

to indemnification. 

¶ 10 In 2011, Developer filed a third-party complaint against 

several of the subcontractors, including B.A. Critchfield 

Construction, LLC (Critchfield), Beus Roofing, Inc. (Beus), and R&JL 

Siding and Management, LLC (R&JL), alleging breach of contract, 

negligence, and indemnity.3

¶ 11 This matter was heavily litigated with each party filing 

several pre- and post-trial motions. Three of those motions are 

relevant to this appeal: Critchfield’s motions for summary judgment 

against the Association and Developer; Developer’s motion for a 

directed verdict; and Developer’s post-trial motion for 

indemnification of attorney fees.

_____________________________________________________________

3 For ease of reference, this opinion refers to Critchfield, R&JL, 

and Beus as Third-Party Defendants unless referring to an argument 

made by one of the three parties individually.
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

6

Motions for Summary Judgment

¶ 12 Critchfield moved for summary judgment against the 

Association, asserting that the Association lacked privity of contract 

with the Developer and that the Association could not prove a prima 

facie case of breach of implied warranty. R&JL joined in the motion. 

Critchfield and Beus moved for summary judgment against 

Developer on the same or similar grounds.

¶ 13 In response, the Association argued that the Declaration 

created privity of contract. Two months after filing its opposition to 

Critchfield’s motion for summary judgment, the Association moved

for leave to file a supplemental brief. In its proposed supplemental 

brief, the Association asserted for the first time that the Real Estate 

Purchase Contracts (REPC) and warranty deeds also created privity 

of contract between the Association and Developer. The district

court denied the Association’s motion.

¶ 14 The district court granted Critchfield’s motion against the 

Association and Developer. The district court concluded that the 

Declaration did not establish privity with Developer, noting that 

“nothing in the Declaration . . . speaks to whether [the Association] 

has the right to sue third parties for damages to the ‘Living Units’ on 

behalf of the homeowners.”4

¶ 15 The Association filed a motion for reconsideration, which 

the district court found was “largely comprised of a recitation of the 

identical facts, exhibits and legal analysis” that the district court 

addressed in its original ruling on the motion for summary 

judgment. The Association also argued that the district court erred in 

denying its motion for leave to file a supplemental argument. The 

district court denied the Association’s motion to reconsider.

¶ 16 The district court explained that “[t]he parties were given 

the appropriate opportunity to file dispositive motions and raise any 

_____________________________________________________________

4 The district court also concluded that the Association had failed 

to establish two elements of a prima facie case of breach of implied 

warranty: (1) that the units containing the alleged latent defects were 

owned by the original homeowners and (2) that the latent defects 

created a question of safety or made the house unfit for human 

habitation. The district court granted Beus’s motion for summary 

judgment against the Developer, thereby dismissing the third-party 

defendants from the lawsuit.
Cite as: 2018 UT 04

Opinion of the Court

7

issues or objections to those motions” and the Association sought to 

supplement its opposition “well after briefing in this matter was 

complete.” The court concluded that “it would be inequitable to 

allow [the Association] a ‘second bite at the apple’ to defeat 

summary judgment based solely on its failure to include a legal 

argument in support of its Opposition where the underlying facts 

and law were known at the time of filing the initial Opposition.” The 

district court also explained that consideration of the Association’s 

additional briefing “would not change the Court’s ruling,” because 

the REPC did not “indicate any intent by the contracting parties 

to . . . confer third-party beneficiary status” on the Association.

Motion for Directed Verdict

¶ 17 The Association presented its breach of fiduciary duty 

claims against Developer at trial. Duke, the Gables’ property 

manager, the Association’s president, several construction experts, 

an architectural expert, and a former Association board member 

testified. At the conclusion of the Association’s case, Developer 

moved for directed verdict on several grounds. The district court 

granted Developer’s motion, concluding that the Association needed 

expert testimony to establish the standard of care Developer owed to 

the Association. As the Association had failed to forward any 

evidence to establish the standard of care, the district court

dismissed the Association’s claims against Developer with prejudice.

Motion for Indemnification

¶ 18 Duke, as the owner and operator of the various Developer 

entities, filed a post-trial motion seeking indemnification from the 

Association of his defense costs and attorney fees. Duke asserted that 

the Association’s Articles required the Association to indemnify him

for attorney fees and costs because the court determined that he was 

not liable for negligence or misconduct in the performance of his 

duty as a member of the board of the Association. The Association 

argued that Duke’s duties stemmed from his role as developer and 

not as a member of the Association’s board, and was therefore not 

entitled to indemnification. The Association also argued that because 

“the attorneys’ fees and costs are themselves part of the merits of 

[Duke’s] contractual indemnification claim,” Duke needed to have 

raised his indemnification claim at trial. The district court granted 

Duke’s motion, concluding that the indemnification’s language 

provides for the indemnification of “any and all of its officers or 

members of the Board of Trustees, or former officers or members of 

the Board of Trustees.” The district court reasoned that because 
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

8

Duke is a former trustee of the Association, he is entitled to 

indemnification. The district court awarded attorney fees and costs 

to Duke.

¶ 19 The Association appealed. Developer cross-appealed.

ISSUES AND STANDARDS OF REVIEW

¶ 20 The Association raises three issues on appeal.5 First, the 

Association argues that the district court erred when it granted 

Critchfield’s motion for summary judgment. We review “a summary 

judgment for correctness, giving no deference to the trial court’s 

decision.” Bahr v. Imus, 2011 UT 19, ¶ 15, 250 P.3d 56.

¶ 21 Second, the Association contends that the district court 

erred when it granted Developer’s motion for directed verdict. “This 

[c]ourt’s standard of review of a directed verdict is the same as that 

imposed upon a trial court.” Merino v. Albertsons, Inc., 1999 UT 14, 

¶ 3, 975 P.2d 467 (alteration in original) (citation omitted). “A trial 

court is justified in granting a directed verdict only if, examining all 

evidence in a light most favorable to the non-moving party, there is 

no competent evidence that would support a verdict in the nonmoving party’s favor.” Id. “A motion for directed verdict can be 

granted only when the moving party is entitled to judgment as a 

matter of law.” Id. (internal quotation marks omitted).

¶ 22 Third, the Association posits that the district court erred 

when it granted Duke’s motion for indemnification of his defense 

costs and attorney fees. “Whether a party may recover attorney fees 

in an action is a question of law that we review for correctness.” Ault 

v. Holden, 2002 UT 33, ¶ 46, 44 P.3d 781.

ANALYSIS

I. Motion for Summary Judgment

¶ 23 The Association contends that the district court erred in 

two ways when it granted Critchfield’s motion for summary 

judgment. The Association first argues that the district court erred 

_____________________________________________________________

5 Developer raises three issues on cross-appeal, all relating to 

motions in limine regarding the measure of damages, evidence 

admitted at trial, and joint-venture liability. Because we affirm the 

district court’s decision to grant summary judgment in favor of the 

Third-Party Defendants and Developer’s motion for directed verdict, 

we need not reach the issues Developer raises in its cross-appeal.
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Opinion of the Court

9

when it concluded that the Association lacked privity of contract 

with Developer. The Association asserts that it “enjoys privity of 

contract with [Developer] through the Declaration and as a thirdparty beneficiary to the Real Estate Purchase Contracts . . . and deeds 

between [Developer] and the homeowners.” The Association also 

argues that public policy demands that this Court find that it has 

privity of contract with Developer.6

¶ 24 “[I]n every contract for the sale of a new residence, a 

vendor in the business of building or selling such residences makes 

an implied warranty to the vendee that the residence is constructed 

in a workmanlike manner and fit for habitation.” Davencourt at 

Pilgrims Landing Homeowners Ass’n v. Davencourt at Pilgrims Landing, 

LC, 2009 UT 65, ¶ 55, 221 P.3d 234. To establish a breach of the 

implied warranty, a plaintiff must show: “(1) the purchase of a new 

residence from a defendant builder-vendor/developer-vendor; 

(2) the residence contained a latent defect; (3) the defect manifested 

itself after purchase; (4) the defect was caused by improper design, 

material, or workmanship; and (5) the defect created a question of 

safety or made the house unfit for human habitation.” Id. ¶ 60.

¶ 25 In addition to the five elements of a prima facie case for 

breach of the implied warranty, a plaintiff must also show privity of 

contract with the developer. Id. ¶ 63. This requirement stems from

Utah code section 78B-4-513, which provides that “an action for 

defective design or construction may be brought only by a person in 

privity of contract with the original contractor, architect, engineer, or 

the real estate developer.” UTAH CODE § 78B-4-513(4); see also 

Davencourt, 2009 UT 65, ¶ 57. However, nothing in section 78B-4-513 

“precludes a person from assigning a right under a contract to 

another person, including to a subsequent owner or a homeowners 

association.” UTAH CODE § 78B-4-513(6).

¶ 26 The question before us asks whether the Association can 

establish privity of contract with Developer. The Association argues 

that the Declaration, the REPC, the warranty deeds, and public 

policy could all be used as a basis to establish privity of contract. We 

_____________________________________________________________

6 The Association further argues that the district court erred in 

concluding that the Association’s expert report was insufficient to 

establish a question of safety or habitability. Because we conclude 

that the Association cannot establish privity of contract, we need not 

reach the Association’s argument regarding the expert report.
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

10

hold that the Association has not demonstrated privity of contract, 

but that holding is in part dictated by the Association’s failure to 

timely raise its REPC/warranty deeds argument below and its 

failure to challenge directly the district court’s decision to not 

address the untimely argument.

A. The REPC and Warranty Deeds

¶ 27 The Association argues the REPC and warranty deeds 

establish privity of contract between it and Developer. In essence, 

the Association claims it is an intended third-party beneficiary and 

that status gives rise to privity. Developer argues that the 

Association failed to properly preserve an argument based upon the 

REPC and warranty deeds.7 As previously noted, the Association 

first raised these arguments in a proposed supplemental brief in

opposition to Critchfield’s motion for summary judgment. The 

district court denied the Association’s motion to file a supplemental 

brief and did not consider the arguments contained in that brief. The 

Association later filed a motion to reconsider the district court’s 

_____________________________________________________________

7 Critchfield also argues that we should dismiss the appeal of the 

grant of summary judgment in its favor because the appeal is moot. 

As Critchfield correctly points out, the Association never asserted a 

cause of action against Third-Party Defendants. Rather, the 

Association argued that their claim against Developer for breach of 

implied warranty “pass[ed] through” to Third-Party Defendants. 

When Critchfield filed a motion for summary judgment against the 

Association, it simultaneously filed a motion for summary judgment 

against Developer and relied on the same privity argument in both 

motions. The district court granted both motions in one order. 

Developer did not appeal the grant of summary judgment on its 

claims against Third-Party Defendants. Critchfield argues that 

because Developer did not appeal the order granting summary 

judgment, and Developer was the only party that asserted a direct 

claim against Third-Party Defendants, reversing the court’s grant of 

summary judgment would create “no practical effect or change in 

the circumstances” with respect to Third-Party Defendants. We 

agree that because of this posture, no relief we could grant would 

result in revived claims against Third-Party Defendants. We review 

the district court’s grant of summary judgment in favor of 

Critchfield only as it relates to the claims between the Association 

and Developer.
Cite as: 2018 UT 04

Opinion of the Court

11

order granting Critchfield’s motion for summary judgment and 

argued that the district court erred in declining to consider the 

Association’s supplemental argument.

¶ 28 The district court denied the Association’s motion to 

reconsider and explained:

The parties were given the appropriate opportunity to 

file dispositive motions and raise any issues or 

objections to those motions . . . . [The Association] filed 

their initial Opposition on October 11, 2013. It was not 

until over two months later, on December 18, 2013, that 

[the Association] sought to supplement its Opposition, 

well after briefing in this matter was complete and after 

the Motion was set for hearing. To allow additional 

briefing at that date was not, as [the Association] 

suggests, a routine matter with no impact on the 

parties. Consideration of the new legal theory 

expounded by [the Association], and allowing the 

other parties sufficient time to respond thereto would 

have delayed resolution of the majority of the 

dispositive motions . . . . Additionally, the court finds 

that it would be inequitable to allow [the Association] a 

“second bite at the apple” to defeat summary judgment 

based solely on its failure to include a legal argument 

in support of its Opposition where the underlying facts 

and law were known at the time of filing the initial 

Opposition.

¶ 29 The district court then briefly addressed the merits of the 

Association’s REPC and warranty deeds argument and explained 

that “consideration of [the Association’s] additional briefing in 

support of its Opposition would not change the Court’s ruling.”

¶ 30 On appeal, the Association argues that it is a third-party 

beneficiary to the REPCs and warranty deeds and that “[i]n granting 

Critchfield’s motion for summary judgment, the trial court failed to 

recognize privity in this regard and should be reversed.” The 

Association skips a step, however, by jumping straight to the merits 

of the argument. The district court declined to consider the 

Association’s arguments on summary judgment because they were 

untimely. The Association must attack that decision before it can 

level up to the merits.

¶ 31 The district court denied the Association’s motion for

supplemental briefing. Although the court did not explain its 
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

12

reasoning at the time, in its order denying the Association’s motion 

to reconsider, the court explained that it denied the Association’s 

motion for supplemental briefing because the motion was untimely 

and “the underlying facts and law were known at the time” the 

Association filed its initial opposition. This is the type of decision we 

leave to the discretion of the district court. See, e.g., Harvey v. Ute 

Indian Tribe of Uintah and Ouray Reservation, 2017 UT 75, ¶ 14, 

— P.3d — (“We review a district court’s denial of a motion to 

supplement a pleading for abuse of discretion.”). The Association 

has not even attempted to explain how the district court may have 

abused its discretion in concluding (1) that its supplemental 

argument was untimely, and (2) that the underlying facts and law 

were known to the Association at the time it filed its initial 

opposition.

¶ 32 Nor does the Association assail the motion to reconsider. 

Indeed, the Association disregards the district court’s order denying 

the motion to reconsider. And again, we review the “denial of a 

motion to reconsider summary judgment under rule 60(b) of the 

Utah Rules of Civil Procedure for abuse of discretion.” Lund v. Hall, 

938 P.2d 285, 287 (Utah 1997). “[P]ostjudgment motions to reconsider 

are not recognized anywhere in either the Utah Rules of Appellate 

Procedure or the Utah Rules of Civil Procedure.” Gillet v. Price, 2006 

UT 24, ¶ 6, 135 P.3d 861. Accordingly, district courts are under no 

obligation to consider motions for reconsideration, and a movant has 

an especially large burden to show that the district court abused its 

discretion. Cf. Tschaggeny v. Milbank Ins. Co., 2007 UT 37, ¶ 15, 163 

P.3d 615 (“Because trial courts are under no obligation to consider 

motions for reconsideration, any decision to address or not to 

address the merits of such a motion is highly discretionary.”). The 

district court’s ruling may be overturned only if the movant can 

show that “there is no reasonable basis for the decision.” Id. ¶ 16 

(citation omitted).

¶ 33 If the Association wanted this court to address the merits of 

its third-party beneficiary argument, then it needed to demonstrate 

that the district court either abused its discretion in not permitting 

the supplemental briefing that contained the REPC and warranty 

deeds argument or that the district court abused its discretion in 

denying the Association’s motion to reconsider. The Association 

failed to do either. Thus, we decline to address the merits of their 

REPC and warranty deeds argument. We accordingly limit our 

analysis to the issue that was before the district court when it 
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Opinion of the Court

13

granted summary judgment: that the Declaration creates privity

between the Association and Developer.

B. The Declaration of Covenants, Conditions, and Restrictions

¶ 34 The Association argues that the Declaration establishes 

privity of contract because the Association “received the right (and 

obligation) to maintain certain common property and accept all 

owners as members.”

¶ 35 Although it is unclear, the Association appears to argue 

that the Declaration contains an assignment of the homeowners’

claims to the Association.8 The Association cites section 6.1 of the 

Declaration:

_____________________________________________________________

8 The Association also argues that it is a “successor in interest to 

the Developers vis-à-vis the common property” because “when 

[Developer] recorded the Declaration, they severed property rights, 

conveying some to the Association, and some to the Unit 

purchasers.” The Association then references the “right (and 

obligation) to maintain certain common property.” It is unclear 

whether this argument relates to the argument that the Declaration 

assigned claims to the Association, which is the argument that the 

Association made below, appears to renew on appeal, and that we 

analyze above. The Association’s brief may also be read to say that it 

was granted ownership of the common areas and that it enjoys 

privity of contract for that reason. To the extent the Association 

argues that its privity with Developer arises from ownership of the 

common areas, its argument is unpreserved and inadequately 

briefed.

Generally, we will not consider an issue unless it has been 

preserved for appeal. Patterson v. Patterson, 2011 UT 68, ¶ 12, 266 

P.3d 828. An issue has been preserved for appeal “when it has been 

‘presented to the district court in such a way that the court has an 

opportunity to rule on [it].’” Id. (alteration in original) (citation 

omitted). The Association did not assert this argument below. Nor 

does the Association assert that an exception to our preservation rule 

applies. See State v. Griffin, 2016 UT 33, ¶ 20, 384 P.3d 186 (“To raise a 

claim for the first time on appeal, a party must demonstrate that one 

of the exceptions to our preservation rules apply.”). Additionally, 

this argument consists of three sentences in its opening brief. 

“[Appellate] courts are ‘not a depository in which [a party] may 

dump the burden of argument and research.’” 2010-1 RADC/CADC 

(continued . . .)
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

14

The Association shall provide exterior maintenance of 

the Living Units including but not limited to painting, 

repair, replacement and care of roofs, gutters, 

downspouts, and exterior building surfaces.

In its opposition to Critchfield’s motion for summary judgment, the 

Association argued that its claims “derive from the duty imposed 

upon it by the Declaration drafted and recorded by the Developer,” 

and quoted section 6.1 of the Declaration. The Association argued 

that section 6.1 “grants [it] broad authority to act on behalf of owners 

in relation to action taken related to damage to association property, 

expressly the exterior maintenance of the Living Units.” The 

Association does not quote section 6.1 in its opening brief, but does 

mention its “right (and obligation) to maintain certain common 

property,” and later quotes section 6.1 in its reply brief. Therefore, 

we assume that the Association’s argument on appeal mirrors their 

argument below: that section 6.1 of the Declaration is an assignment 

of the homeowners’ claims against Developer.

¶ 36 Utah law requires privity of contract to assert a claim for a 

breach of the implied warranty of workmanlike manner and 

habitability. Utah Code section 78B-4-513 provides that “an action 

 

Venture, LLC v. Dos Lagos, LLC, 2017 UT 29, ¶ 32, 408 P.3d 313

(second alteration in original) (citation omitted).

Further, it is unclear which defects, if any, can be found in the 

common areas. The Association submitted a roughly 1,000-page 

exhibit to support its memorandum in opposition to Critchfield’s 

motion for summary judgment. Perhaps somewhere in that tome, 

the Association’s expert identified a defect in the common areas. 

This uncertainty highlights a major problem with the way the 

Association approached summary judgment. To comply with rule 56 

of the Utah Rules of Civil Procedure, a party must “do more than 

attach evidence and hope the district judge [will] appreciate its 

significance.” Stitchting Mayflower Mountain Fonds v. United Park City 

Mines Co., 2017 UT 42, ¶ 42, -- P.3d -- (emphasis omitted). Rather, a

party must “analyze the evidence to show that it created a genuine 

issue for trial.” Id. (emphasis omitted). The Association failed to do 

this below, and failed to do so on appeal. To the extent there is 

something in the expert report suggesting that there is a defect to be 

found in the common areas, the Association waived it before the 

district court by failing to comply with rule 56.
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Opinion of the Court

15

for defective design or construction may be brought only by a person 

in privity of contract with the original contractor, architect, engineer, 

or the real estate developer,” but that “[n]othing in this section 

precludes a person from assigning a right under a contract to 

another person, including to a subsequent owner or a homeowners 

association.” UTAH CODE § 78B-4-513(4), (6). As noted above, the 

Association appears to contend that section 6.1 of the Declaration 

assigns the homeowners’ right to sue to the Association.

¶ 37 “Restrictive covenants are a ‘method of effectuating private 

residential developmental schemes’ and give property owners in 

such developments the right to enforce those covenants against 

others in the development.” Fort Pierce Indus. Park Phases II, III & IV 

Owners Ass’n. v. Shakespeare, 2016 UT 28, ¶ 19, 379 P.3d 1218 (citation 

omitted). “[I]nterpretation of [restrictive] covenants is governed by 

the same rules of construction as those used to interpret contracts.” 

Id. (second alteration in original) (citation omitted). Accordingly, we 

“interpret the provisions of the Declaration as we would a contract. 

If the Declaration is not ambiguous, we interpret it according to its 

plain language.” View Condo. Owners Ass’n v. MSICO, L.L.C., 2005 UT 

91, ¶ 21, 127 P.3d 697 (citation omitted). Further, “restrictive 

covenants ‘should be interpreted to give effect to the intention of the 

parties ascertained from the language used in the instrument, or the 

circumstances surrounding creation of the servitude, and to carry 

out the purpose for which it was created.’” Fort Pierce, 2016 UT 28, 

¶ 19 (quoting RESTATEMENT (THIRD) OF PROPERTY: SERVITUDES § 4.1(1)

(AM. LAW INST. 2000)).

¶ 38 “It is essential to an assignment of a right that the obligee 

manifest an intention to transfer the right to another person without 

further action or manifestation of intention by the obligee.” 

RESTATEMENT (SECOND) OF CONTRACTS § 324 (AM. LAW INST. 1981).

“Generally, the elements of an effective assignment include a 

sufficient description of the subject matter to render it capable of 

identification, and delivery of the subject matter, with the intent to 

make an immediate and complete transfer of all right, title, and 

interest in and to the subject matter to the assignee.” 29 WILLISTON 

ON CONTRACTS § 74:3 (4th ed. 1990) (footnotes omitted). Typical 

words associated with an assignment include “assumes,” “assigns,” 

“transfers,” or “conveys.” See Hansen v. Green River Grp., 748 P.2d 

1102, 1104 (Utah Ct. App. 1988) (noting that a contractual provision 

lacking the words “assumes,” “assigns,” “transfers,” or “conveys” 

did not constitute an assignment of a party’s rights under a contract).
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Opinion of the Court

16

¶ 39 A recent case before this court highlights the type of 

language that can assign claims. In Tomlinson v. Douglas Knight 

Construction, Inc., 2017 UT 56, --P.3d--, the developer assigned its 

claims against the construction company to the homeowner. Id. ¶ 7.

The assignment provided that the developer transferred to the 

homeowner “all . . . right title and interest in and to any and all 

rights, claims, causes of action, choses in action, rights to payment, 

and judgments of any kind that [the developer] ha[d] asserted . . . or 

may otherwise assert” against the builder. Id. (second omission in 

original). Although we ultimately determined that the assignment 

did not cover the claims that the homeowner brought against the 

builder, the language of that assignment is illustrative. See id. ¶ 21.

¶ 40 In contrast, here, the Declaration states that the Association 

“shall provide exterior maintenance of the Living Units.” The plain 

language of section 6.1 does not assign the homeowners’ claims 

against Developer to the Association. The language “shall provide 

exterior maintenance” does not manifest the intent of the 

homeowner to transfer their right to pursue claims against 

Developer to the Association. See RESTATEMENT (SECOND) OF 

CONTRACTS § 324. Nor does the language “shall provide exterior 

maintenance” actually describe the subject matter of the purported 

assignment: the right to pursue claims against Developer.

¶ 41 Tellingly, section 6.1 does not contain language such as 

“assumes,” “assigns,” “transfers,” or “conveys”—language 

traditionally indicative of assignment. See Hansen, 748 P.2d at 1104. 

That is not to say that an assignment must always contain precise, 

formulaic language. But the language must, at the very least, 

manifest a homeowner’s intent to transfer her right to pursue claims. 

Accordingly, although we conclude that the statute does not require 

precise language of assignment, we nonetheless recognize that the 

statute contemplates an assignment that expresses some intent to 

actually assign a claim.

C. Public Policy

¶ 42 The Association also argues that public policy favors

finding privity. The Association cites Davencourt for the proposition 

that “the scope of the implied warranty should be construed broadly 

to comport with . . . public policy considerations,” and argues that 

this language indicates that “privity cannot be arbitrarily used to 

restrict the application of [the] implied warranty or other contractbased claims.” Although we may favor a broad construction of the 

implied warranty, we cannot use public policy to rewrite an 
Cite as: 2018 UT 04

Opinion of the Court

17

inconvenient statute. Section 78B-4-513 requires contractual privity 

between the party bringing an action for defective design or 

construction and “the original contractor, architect, engineer, or the 

real estate developer” or an assignment of the homeowner’s right 

under the contract. And in Davencourt, we made it clear that privity 

of contract is required to bring a claim for breach of the implied 

warranty in accord with section 78B-4-513. See Davencourt, 2009 UT 

65, ¶ 57 & n.13.

¶ 43 The Association raises a compelling argument that our 

current statutory scheme presents a challenge for homeowners 

associations attempting to represent their members’ interests.9

Unfortunately, we cannot use public policy to rewrite an explicit 

statutory requirement. This is especially true where the legislature 

appears to have built in some protection against the result the 

Association fears; the statute recognizes that a homeowner can 

assign her claims to a homeowners association. See UTAH CODE

§ 78B-4-513(6). At oral argument, the Association detailed a number 

of reasons why an assignment may not be not a practical solution to 

the problem—but that is an argument better made to the legislature 

_____________________________________________________________

9 The Association argues that the statute creates the potential for a

homeowners association to be left in an unjust and untenable 

circumstance at turnover. The Association contends that 

homeowners associations generally have a duty to maintain and 

repair common areas but cannot fulfill that duty if a developer fails 

to construct the development in a workmanlike manner and then

fails to adequately fund the reserve account. The Association avers 

that because homeowners associations typically cannot assess units 

over a specified amount they are left with insufficient funds to carry 

out their duties, and no avenue to raise those funds. To add insult to 

injury, an association may have no avenue of recourse against the 

developer, because, the Association argues, the developer drafts an

association’s organizational documents and may structure them to 

prevent the association from having the privity it needs to pursue 

legal claims against the developer. Thus, says the Association, the 

party most responsible for the faulty construction can insulate itself 

from liability. Because the Utah Code establishes the privity 

requirement that underpins the Association’s complaint, its 

arguments are better directed to the legislature. See UTAH CODE 

§ 78B-4-513(4).
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

18

to which our constitution has assigned the responsibility of 

amending and improving statutes.

¶ 44 Because the plain language of section 6.1 does not 

constitute an assignment of the homeowners’ rights, the Association 

cannot maintain an action against Developer for breach of the 

implied warranty of workmanlike manner and habitability.

Therefore, we need not reach the Association’s second argument that 

the district court erred in concluding that the Association’s expert 

report was insufficient to establish a question of safety or 

habitability. We conclude that the district court did not err in 

granting Critchfield’s motion for summary judgment.

II. Motion for Directed Verdict

¶ 45 The Association next contends that the district court erred 

in granting Developer’s motion for directed verdict. The Association 

argues that “the trial court erred in ruling that expert testimony is 

required to establish a standard of care for developers for purposes 

of Davencourt limited fiduciary duty claims.” The Association argues 

that because Davencourt defined a developer’s limited fiduciary duty, 

the question of whether a developer breached its Davencourt duties is 

within a jury’s common knowledge. Developer counters that expert 

testimony is required to establish the standard of care for a 

developer upholding the Davencourt limited fiduciary duties.

¶ 46 This court has not previously examined when expert 

testimony is required to establish the standard of care in actions 

claiming breaches of the fiduciary duties Davencourt recognized. We 

have, however, examined the issue of when expert testimony is 

required to establish the standard of care in negligence claims. We 

conclude that our general framework for analyzing the necessity of 

expert testimony in negligence claims applies in the breach of 

fiduciary duty context. We begin with a discussion of the 

background of the Davencourt limited fiduciary duties, examine our 

framework for determining the necessity of expert testimony to 

establish the standard of care in negligence cases, and conclude with 

an application of that framework to the facts of this case.

A. Davencourt Limited Fiduciary Duties

¶ 47 The Association claims that Developer breached several of 

the limited fiduciary duties established in Davencourt at Pilgrims 

Landing Homeowners Association v. Davencourt at Pilgrims Landing, LC, 

2009 UT 65, 221 P.3d 234. Generally, the economic loss rule prohibits 

tort claims for purely economic loss. Id. ¶ 18. “The economic loss rule 
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Opinion of the Court

19

is a judicially created doctrine that marks the fundamental boundary 

between contract law, which protects expectancy interests created 

through agreement between the parties, and tort law, which protects 

individuals and their property from physical harm by imposing a 

duty of reasonable care.” Id. (citation omitted). The economic loss 

rule prohibits the recovery of economic losses unless a plaintiff has 

suffered physical property damage or bodily injury. Id.

¶ 48 “Where the economic loss rule is at issue, the ‘initial 

inquiry’ becomes ‘whether a duty exists independent of any 

contractual obligations between the parties.’” Id. ¶ 27 (citation 

omitted). “If we find that an independent duty exists under the law, 

‘the economic loss rule does not bar a tort claim because the claim is 

based on a recognized independent duty of care and thus does not 

fall within the scope of the rule.’” Id. (citation omitted).

¶ 49 In Davencourt, this court recognized several limited 

fiduciary duties that a property developer owes when the developer

establishes and initially controls a homeowners association. Id. ¶ 36. 

Until a developer relinquishes control of a homeowners association 

to its members, the developer owes the following duties to the 

association and its members:

(1) to use reasonable care and prudence in managing 

and maintaining the common property;

(2) to establish a sound fiscal basis for the association 

by imposing and collecting assessments and 

establishing reserves for the maintenance and 

replacement of common property;

(3) to disclose the amount by which the developer is 

providing or subsidizing services that the 

association is or will be obligated to provide;

(4) to maintain records and to account for the financial 

affairs of the association from its inception;

(5) to comply with and enforce the terms of the 

governing documents, including design controls, 

land-use restrictions, and the payment of 

assessments;

(6) to disclose all material facts and circumstances 

affecting the condition of the property that the 

association is responsible for maintaining; and
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

20

(7) to disclose all material facts and circumstances 

affecting the financial condition of the association, 

including the interest of the developer and the 

developer’s affiliates in any contract, lease, or other 

agreement entered into by the association.

Id. (emphases omitted) (quoting RESTATEMENT (THIRD) OF PROPERTY:

SERVITUDES § 6.20 (AM. LAW INST. 2000)).

¶ 50 However, “[g]iven the developer’s self-interest, ‘[t]he 

developer cannot be expected to act solely in the interests for the 

association and the homeowners. Conflicts of interest are inherent in 

the developer’s role while it retains control of the association.’” Id.

¶ 37 (second alteration in original) (quoting RESTATEMENT (THIRD) OF 

PROPERTY: SERVITUDES § 6.20 cmt. a (AM. LAW INST. 2000)). 

Accordingly, “[w]hile the developer thus should not be a fiduciary in 

the broadest sense, . . . the developer’s control in [a] nonprofit 

association requires certain interests of the members and the 

association be protected” which is “achieved by the limited fiduciary 

duty.” Id.

¶ 51 When this court adopted the limited fiduciary duty in 

Davencourt, we recognized that it “constitute[d] a newly-recognized 

independent duty of care” that stems from a “special relationship” 

between a developer and an association or its members. Id. ¶ 38. The 

relationship is akin to relationships such as “attorney-client 

relationship[s], physician-patient relationship[s], or insurer-insured 

relationship[s],” which also “automatically trigger[] independent 

duties of care.” Id. (citation omitted). And “because a limited 

fiduciary duty constitutes an independent duty of care, tort claims 

brought under this duty fall outside the scope of the economic loss 

rule.” Id.

¶ 52 Breach of fiduciary duty claims generally require proof of 

four elements: the existence of a fiduciary relationship (such as 

attorney-client, physician-patient, or insurer-insured); breach of the 

fiduciary duty; causation, both actual and proximate; and damages. 

See Christensen & Jensen, P.C. v. Barrett & Daines, 2008 UT 64, ¶ 23, 

194 P.3d 931 (breach of fiduciary duty in the context of an attorneyclient relationship); see also Regions Bank v. Lowrey, 101 So. 3d 210, 219 

(Ala. 2012) (in the context of a trustee-beneficiary relationship, a 

claimant must show the existence of a fiduciary duty, the breach of 

the duty, and damages); Neade v. Portes, 739 N.E.2d 496, 502 (Ill. 

2000) (same, in the context of a physician-patient relationship); 

Baptist Physicians Lexington, Inc. v. New Lexington Clinic, P.S.C., 436 
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Opinion of the Court

21

S.W.3d 189, 193 (Ky. 2013) (same, in the context of a board of 

directors-corporation relationship).

¶ 53 Although the fiduciary duty a developer in control of a 

homeowners association owes to the association and its members is 

limited in nature, Davencourt, 2009 UT 65, ¶¶ 37–38, the elements of a 

breach of that fiduciary duty are nonetheless the same. Accordingly, 

to establish a claim of breach of limited fiduciary duty, a plaintiff 

must prove: (1) the existence of a developer-association or 

developer-member relationship; (2) breach of the developer’s limited 

fiduciary duty; (3) causation, both actual and proximate; and 

(4) damages. Cf. Christensen & Jensen, 2008 UT 64, ¶ 23.

¶ 54 The central issue on the motion for directed verdict focused 

on the appropriate standard of care. The district court granted 

Developer’s motion for directed verdict because the Association 

failed to “establish[] what the standard of care is for a developer 

when managing a homeowners association.”

B. Standard of Care 

¶ 55 To understand better the standard of care owed in a breach 

of fiduciary duty case, it is helpful to look to our negligence case law. 

The essential elements of a negligence claim incorporate virtually the 

same requirements as a breach of fiduciary duty claim: “(1) a duty of 

reasonable care owed by the defendant to plaintiff; (2) a breach of 

that duty; (3) the causation, both actually and proximately, of injury; 

and (4) the suffering of damages by the plaintiff.” Williams v. Melby, 

699 P.2d 723, 726 (Utah 1985). Cf. Christensen & Jensen, 2008 UT 64, 

¶ 23 (stating that in the context of legal malpractice, the elements of a 

negligence claim and a breach of fiduciary duty claim “are 

substantially the same”).

¶ 56 As the Supreme Court of Colorado noted, “[b]reach of 

fiduciary duty claims are in some, but not all, contexts basically 

negligence claims incorporating particularized and enhanced duty of 

care concepts often requiring the plaintiff to establish the identical 

elements that must be established by a plaintiff in negligence 

actions.” Martinez v. Badis, 842 P.2d 245, 251–52 (Colo. 1992) (en 

banc). The difference between a negligence claim and a breach of 

fiduciary duty claim therefore lies mainly in the type of duty owed. 

In a negligence claim, a plaintiff must show “a duty of reasonable 

care owed by the defendant to [the] plaintiff.” Williams, 699 P.2d at 

726. In a breach of fiduciary duty claim, the plaintiff must

demonstrate the existence of a fiduciary relationship between the 

plaintiff and the defendant, Christensen & Jensen, 2008 UT 64, ¶ 23,
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Opinion of the Court

22

which gives rise to a “particularized and enhanced duty of care,”

Martinez, 842 P.2d at 252. See Duty, BLACK’S LAW DICTIONARY, (10th 

ed. 2014) (defining fiduciary duty as “[a] duty of utmost good faith, 

trust, confidence, and candor owed by a fiduciary (such as an agent 

or a trustee) to the beneficiary”). Thus, a plaintiff must establish the 

relevant standard of care to prove a breach of fiduciary duty.

¶ 57 To determine the relevant standard of care in negligence 

cases, “the essential question is the care that a reasonable person 

would undertake in the defendant’s circumstances . . . .” Graves v. 

N. E. Servs., Inc., 2015 UT 28, ¶ 37, 345 P.3d 619. “The standard of 

care in a negligence action is generally a question of fact for the 

jury.” Id. “The jury’s determination, moreover, is a matter for the 

commonsense assessment of a lay juror—not expert testimony. This 

follows logically from the premise of the standard of care in tort.” 

And, “[b]ecause the essential question is the care that a reasonable 

person would undertake in the defendant’s circumstances, we 

generally leave it to jurors—as ordinary persons representing a 

particular community—to make that judgment.” Id. In other words, 

in a typical negligence case we ask a jury of reasonable people to 

draw upon their collective expertise to conclude how a reasonable 

person would have acted in that circumstance.

¶ 58 Our case law recognizes a limited exception to this general 

rule. Expert testimony is generally required in medical malpractice 

actions because “unlike the run-of-the-mill negligence case, ‘most 

medical malpractice cases depend upon knowledge of the scientific 

effect of medicine,’ a matter ‘not within the common knowledge of 

the lay juror.’” Id. ¶ 38 (citation omitted). But, “where a ‘medical 

procedure is so common or the outcome so affronts our notions of 

medical propriety’ that scientific knowledge is not necessary, ‘the 

plaintiff can rely on the common knowledge and understanding of 

laymen to establish this element.’” Id. ¶ 39 (citation omitted).

¶ 59 “Ultimately, then, the question of the need for expert 

testimony turns on the nature of the standard to be addressed by the 

jury.” Id. ¶ 40. “Questions of ordinary negligence are properly 

determined by the lay juror without the need for expert testimony. 

Where the standard implicates scientific matters beyond the capacity 

of an ordinary juror, however, expert testimony may be required.” 

Id. For example, in Newman v. Sonneberg, 2003 UT App 401, 81 P.3d 

808, the court of appeals held that expert testimony was required to 

establish the elements of patient abandonment. Id. ¶ 16. Because the 

duty not to abandon care of a patient arises only after treatment or 
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Opinion of the Court

23

services have been provided, and “most lay people do not possess 

the necessary expertise to accurately determine whether [a doctor’s] 

actions constitute[] mere diagnosis or signif[y] the beginning of 

treatment,” expert testimony is required to establish the standard of 

care. Id. ¶¶ 13–15. But no expert is needed when a needle left inside 

the patient or a drill bit lost down a patient’s throat constitutes the 

alleged negligence. See Nixdorf v. Hicken, 612 P.2d 348, 353 (Utah 

1980) (holding that expert testimony is not required when a doctor 

left a needle inside of a patient during surgery); Kim v. Anderson, 610 

P.2d 1270, 1270–71 (Utah 1980) (holding that expert testimony is not 

required when a dentist lost a drill bit down a patient’s throat).

¶ 60 This general framework lends itself to the breach of 

fiduciary duty arena. Fiduciary duties may sometimes, but will not 

always, implicate the type of technical matters that would lie beyond 

the capacity of an ordinary juror. This means that expert testimony 

will be required in the breach of fiduciary duty context to explain 

standard of care and breach issues where the average person has 

little understanding of the duties owed by particular trades or 

professions. This testimony may be unnecessary, however, if the 

professional task is so common or the alleged breach is so egregious 

that specialized knowledge is not required to conclude that the 

conduct fell below the applicable standard of care, whatever that 

standard might be. Accordingly, the question of whether expert 

testimony is required will necessarily occur on a case by case basis, 

much as it does in the medical malpractice arena.

¶ 61 Applying this principle to one of the Davencourt duties 

illuminates this distinction. Davencourt recognized a duty to 

“disclose all material facts and circumstances affecting the condition 

of the property that the association is responsible for maintaining.”

2009 UT 65, ¶ 36 (emphasis omitted) (citation omitted). If the alleged 

breach were to center on a claim that the developer possessed a 

report that detailed that homes in the planned unit development had 

been framed with rotting lumber and that the developer could 

anticipate structures collapsing within a short period of time, the 

plaintiff would not need an expert to tell the jury that such 

information would be material to the homeowners association. This 

is because we trust that a jury can understand why that information 

would need to be disclosed. If, on the other hand, the allegation were 

to center on a failure to disclose a technical defect with the type of 

wiring used in a development, the jury may need an expert to 

explain why a reasonable developer would have a duty to disclose 

that information.
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

24

C. The Association’s Breach of Fiduciary Duty Claim

¶ 62 The Association’s breach of fiduciary duty claim focused on 

two of the limited duties Davencourt established: (1) “to establish a 

sound fiscal basis for the association by imposing and collecting 

assessments and establishing reserves for the maintenance and 

replacement of common property;” and (2) “to disclose all material 

facts and circumstances affecting the condition of the property that 

the association is responsible for maintaining.” 2009 UT 65, ¶ 36 

(emphasis omitted) (citation omitted). The district court concluded 

that these duties “fall precisely within the realm of ‘specialized 

knowledge’ which is specific to a trade or profession [and] must be 

established by a witness within the specific profession.” On the facts 

of this case, we agree. This case presents the type of duty and breach 

issues where the average person has little understanding of the 

duties owed by particular trades or professions. In this case, expert 

testimony was required to establish the appropriate standard of care.

¶ 63 The average person likely has little understanding of what 

a property developer must do to “establish a sound fiscal basis” for a 

homeowners association. Davencourt, 2009 UT 65, ¶ 36 (emphasis

omitted) (citation omitted). The Association did not present evidence 

demonstrating the industry standard for a developer who initially 

manages the finances of a homeowners association. At trial, the 

Association only presented evidence about its own financial affairs. 

The Gables’ property manager testified about the Association’s 

initial budget, the financial state of the Association during the years 

he managed the property, and several of the necessary repairs. The 

property manager did not testify about how much money an 

association’s reserve fund typically contains at the time of turnover 

or how much involvement developers typically have in establishing 

an initial budget—both questions that may be relevant to 

demonstrating the standard of care a developer owes in establishing 

a sound fiscal basis for a homeowners association.

¶ 64 In fact, the only evidence presented about the financial state 

of the reserve account at turnover indicated that it was adequately 

funded compared to industry standards. At trial, the Gables’ 

property manager testified that the initial budget “was based on 

building a reserve at a rate sufficient for proper construction.” He 

explained that the set rate was “comparable to the industry 

average.” And the reserve study the Association commissioned after 

turnover indicated that the starting reserve account balance at the 

time of turnover “indicate[d] a fair reserve fund position.”
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Opinion of the Court

25

¶ 65 The Association did present evidence illustrating the 

financial state of the reserve account following turnover. But this 

evidence does not demonstrate conduct so egregious that a lay 

person would be able to determine whether or not a breach occurred 

without the assistance of expert testimony. Cf. Graves, 2015 UT 28, 

¶ 39 (“[W]here a ‘medical procedure is so common or the outcome so 

affronts our notions of medical propriety’” expert testimony is 

unnecessary. (citation omitted)). The property manager explained 

that “financially, it [had] been difficult . . . to operate the association 

in a positive, long-term maintenance fashion because . . . all the 

expenses [were] going to fix emergencies [and] take care of safety 

issues.” And he explained that due to the construction defects, the 

Association did not have “the funds to take care of the basic needs” 

of the Association because they were “responding continually to 

some new emergency that arises.”

¶ 66 Although we can envision a scenario where the financial 

state of a homeowners association is so dire that a breach can be 

found without the assistance of expert testimony, we are not 

presented with that scenario here. The Association presented 

evidence that operating the Association had been 

“financially . . . difficult” due to the alleged deficiencies in the 

reserve account. But the Association also presented evidence that

suggested the Association’s reserve account “indicate[d] a fair 

reserve fund position,” and that the monthly contribution from 

homeowners to the reserve account was “comparable to the industry 

average.” Because the Association presented conflicting evidence 

about its financial state, this evidence did not demonstrate conduct 

so egregious that a lay person would be able to determine whether 

or not a breach occurred without the assistance of expert testimony.

¶ 67 Rather than focus on the industry standard pertaining to 

establishing a sound fiscal basis, the Association argues that “[t]he 

only expert testimony that would be relevant or helpful to the jury 

on the question of whether [Developer] established a sound fiscal 

basis for the Association is expert testimony on the scope and cost of 

necessary repairs so that the jury could compare that scope and cost 

with the amounts that were set aside into reserves at the initial 

established assessment level.” At trial, the Association offered expert 

testimony that the cost of the repairs would be approximately 

$4,600,000. This argument mischaracterizes the limited fiduciary 

duty established in Davencourt. A developer owes a duty to 

“establish a sound fiscal basis for the association by imposing and 

collecting assessments and establishing reserves for the maintenance 
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

26

and replacement of common property.” Davencourt, 2009 UT 65, ¶ 36 

(emphasis omitted) (citation omitted).

¶ 68 Establishing a “sound fiscal basis” does not necessarily 

include raising nearly $5,000,000 in funds prior to turnover of the 

homeowners association. See id. As Developer points out, the 

Association’s argument “implicitly requires a jury to accept that a 

‘sound fiscal basis’ includes reserves sufficient to fund the repair of 

nearly $5 million in alleged latent defects.” Although the cost of 

repairs that the Association was responsible for may well be relevant 

to determining whether Developer left the Association with a sound 

fiscal basis, the cost of repairs does not necessarily establish that 

premise.10 That is precisely why the Association needed an expert: to 

opine on what a reasonable developer, knowing what Developer 

knew or should have known here, would have left in reserve before 

turning the development over to the Association.

¶ 69 Similarly, the Association argues—albeit briefly—that 

expert testimony was unnecessary to establish the standard of care a 

developer must uphold to “disclose all material facts and 

circumstances affecting the condition of the property that the 

association is responsible for maintaining.” Id. (emphasis omitted) 

(citation omitted). Its argument occupies one paragraph:

[U]nder Davencourt, the developer is required to 

disclose all material facts and circumstances affecting 

_____________________________________________________________

10 The Association argues that “[i]t is a simple task for the jury 

to . . . apply the facts to the law as instructed by the court and 

compare [the damages] figure with the amounts in the Association’s 

reserve account.” But the evidence the Association presented 

demonstrated that the initial reserve balance was adequate assuming 

no construction defects manifested themselves. The evidence also 

demonstrated that the reserve balance was insufficient to cover the 

expenses of repairing the construction defects. As noted, this 

evidence relates to the question of breach. However, the jury would 

not have been able to answer the question of breach without first 

understanding the appropriate standard of care by which to judge 

Developer’s conduct. The Association did not explain to the jury 

why the amount of money in the reserve account at the time of 

turnover was insufficient compared to industry standards because 

the Association never demonstrated what the industry standards 

were.
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Opinion of the Court

27

the condition of the property that the association is 

responsible for maintaining. Either the developer 

disclosed all of the facts and circumstances or it did 

not. There is no gray area, and expert testimony should 

not be required to establish that the developer failed to 

disclose all material facts and circumstances.

¶ 70 The Association fails to detail what facts and circumstances

it claims Developer knew of that it did not disclose. As such, it is 

difficult to assess precisely whether a jury could have understood 

the fact or circumstance to be material without the aid of an expert. 

The Davencourt duty requires disclosure of material facts and 

circumstances. And, as with the “sound fiscal basis,” we can 

envision some facts and circumstances that a jury would be able to 

understand are material and should be disclosed without the benefit 

of expert testimony and some that it would not. Stated differently, 

Davencourt imposes a duty to disclose “all material facts and 

circumstances” and sometimes an expert will be needed to help the 

jury understand what is and is not material. Id. (emphasis omitted) 

(citation omitted).

¶ 71 Examining all the evidence in a light most favorable to the 

Association, we conclude that there was no competent evidence that 

would support a verdict in the Association’s favor because the 

Association failed to establish the relevant standard of care for 

establishing a sound fiscal basis and failed to articulate the material 

facts that Developer was required to disclose. See Merino v. 

Albertsons, Inc., 1999 UT 14, ¶ 3, 975 P.2d 467 (“A trial court is 

justified in granting a directed verdict only if, examining all evidence 

in a light most favorable to the non-moving party, there is no 

competent evidence that would support a verdict in the non-moving 

party’s favor.”). The facts of this case present the type of duty and 

breach issues where the average person has little understanding of 

the standard of care owed by particular trades or professions, and 

expert testimony was required to establish the relevant standard of 

care for Developer’s duty to establish a sound fiscal basis. Because 

Developer was entitled to judgment as a matter of law, the district

court correctly granted Developer’s motion for a directed verdict.11

_____________________________________________________________

11 The Association also argues that any opinion offered by an 

expert witness would be objectionable as a legal conclusion on the 

ultimate issue under rule 704 of the Utah Rules of Evidence. 

(continued . . .)
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

28

III. Motion for Indemnification

¶ 72 Finally, the Association contends that the district court 

erred in ruling that Duke was entitled to indemnification. The 

Association argues that the indemnification claim was a cause of 

action that should have been tried to the jury, not asserted by posttrial motion.12 Duke frames his motion for indemnification as a 

motion for attorney fees and argues that “there is no issue of 

entitlement to attorney fees to submit to the jury.”

¶ 73 We have recognized that motions for attorney fees, when 

based in contract or on a statutory right to attorney fees, may be 

properly raised in a post-trial motion. In Meadowbrook, LLC v. Flower, 

we established a “narrowly tailored” rule that “a prevailing party 

that files a motion for attorney fees before signed entry of final 

judgment or order does not waive its claim to such fees, unless 

otherwise provided by statute or unless it fails to comply with the 

court’s order to address the issue at a specific time.” 959 P.2d 115, 

 

Developer responds that “[e]xpert testimony . . . is required to 

establish the standard similarly situated developers must uphold.” 

Developer argues that “[t]he proffered [expert] testimony [would not 

be] a legal conclusion; rather, it informs the trier of fact with regard 

to the standard a reasonable developer is required to uphold under 

similar circumstances.” Developer is correct. As we have explained 

above, expert testimony was required to establish the appropriate 

standard of care associated with the Davencourt duties. Although we 

can see that an expert could cross the line into territory that Utah 

Rule of Evidence 704 places out of bounds, we cannot assume that an 

expert necessarily would. The expert testimony contemplated by the 

district court pertained only to the standard of care, and accordingly 

would not automatically constitute a legal opinion on the ultimate 

issue under Utah Rule of Evidence 704. The proper objection would 

be to the specific opinion the expert rendered and not to all 

testimony on the topic of the standard of care.

12 The Association also argues that the indemnification clause 

found in the Articles does not apply in this case because 

[Developer’s] independent fiduciary duty is distinct from a 

corporate fiduciary duty and that the indemnification clause should 

not be enforced as a matter of public policy. Because we conclude 

that the indemnification claim was an abandoned counterclaim, we 

need not address the Association’s alternative arguments.
Cite as: 2018 UT 04

Opinion of the Court

29

119–20 (Utah 1998). In the prevailing party attorney fee context, this 

rule is logical because “in most instances, requiring all parties to 

present evidence of attorney fees to a jury before resting their cases 

would contravene judicial economy. Where a contract or statute 

provides for attorney fees to the prevailing party, a party does not 

even become entitled to such fees until the jury has determined 

which party has prevailed in the case.” Id. at 117. Additionally, “the 

determination of reasonable attorney fees is an issue generally left to 

the sound discretion of the trial court, not the jury.” Id.

¶ 74 The policies we relied upon in Meadowbrook to craft a 

“narrowly tailored” exception to the general rule illustrate why after

trial was not the appropriate time for Duke to seek indemnification.

Id. at 119. First, no statute or contract between Duke and the 

Association formed the basis of Duke’s attorney fees claim. Rather, 

he argued that a provision of the Articles, a governing document 

ancillary to the underlying cause of action, entitled him to 

indemnification.13

¶ 75 Nor does the second policy consideration in Meadowbrook 

resonate here, because although “the determination of reasonable 

attorney fees is an issue generally left to the sound discretion of the 

trial court,” that was not the only determination to be made in this 

case. Id. at 117. “[T]he issue of attorney fees is generally ancillary to 

the underlying action,” and accordingly “a trial court’s decision 

regarding the award of such fees normally requires an inquiry 

separate from the main cause of action to be proved at trial—‘an 

inquiry that cannot even commence until one party has 

“prevailed.”’” Id. at 118 (quoting White v. N.H. Dep’t of Emp’t Sec., 455 

U.S. 445, 452 (1982)). In a prevailing party scenario, the validity of 

the contract or applicability of the statute has already been 

determined at trial. But in a case based on an indemnity provision in 

a document other than the contract at the heart of the litigation, there 

may be other arguments to consider.

_____________________________________________________________

13 On these facts, Duke’s claim resembles a prevailing party claim 

because the Association and Duke were the parties before the district 

court. But it is not difficult to imagine a situation where an 

individual homeowner brings the claim against the developer. In 

such a case, the developer would undoubtedly need to assert a cause 

of action against the homeowners association to obtain 

indemnification.
GABLES v. CASTLEWOOD-STERLING

Opinion of the Court

30

¶ 76 Here, Duke’s counterclaim was predicated on the theory 

that indemnification was an item of consequential damages flowing 

from the Association’s breach of fiduciary duty claim. Accordingly, 

before the district court could determine reasonable attorney fees, 

Duke still needed to prove that he was entitled to the fees in the first 

place. Cf. Canyon Country Store v. Bracey, 781 P.2d 414, 419–20 (Utah 

1989) (holding that when the recovery of attorney fees is predicated 

on a theory that the fees are an item of consequential damages 

flowing from a breach of contract, the issue may be properly 

submitted to a jury as part of a party’s case-in-chief). A post-trial 

motion is not the appropriate vehicle to litigate a claim for fees not 

based upon a statute or prevailing party attorney fees clause.

¶ 77 Duke asserted a “cause of action for indemnification” in his 

answer to the Association’s complaint. Developer “pray[ed] for 

judgment against the Association . . . [f]or the costs associated with 

defending themselves in this action and attorney’s fees incurred 

herein.” Duke made no mention of the indemnification claim at the 

pretrial conference, nor in the proposed jury instructions. By failing 

to pursue his counterclaim against the Association at trial, Duke 

waived his counterclaim for indemnification. Cf. Barnard v. 

Wassermann, 855 P.2d 243, 247–48 (Utah 1993) (holding that failure to 

pursue objections to an order in the district court amounted to 

waiver of a claim raised by plaintiff). The district court improperly 

addressed his claim for indemnification in a post-trial motion for 

attorney fees. Our narrow holding in Meadowbrook does not apply to 

this claim for indemnity arising out of the Articles. Accordingly, we 

reverse the district court’s award of indemnification of attorney fees 

and remand for proceedings consistent with this portion of the 

opinion.

CONCLUSION

¶ 78 We conclude that the plain language of the Declaration

does not constitute an assignment of the homeowners’ rights and 

therefore the Association cannot maintain an action against 

Developer for breach of the implied warranty of workmanlike 

manner and habitability. Accordingly, we hold that the district court 

correctly granted summary judgment in favor of Critchfield. We next 

conclude that the facts of this case present the type of duty and 

breach issues where the average person has little understanding of 

the duties owed by particular trades or professions, and expert 

testimony was required to establish the relevant standard of care.

Accordingly, Developer was entitled to judgment as a matter of law, 
Cite as: 2018 UT 04

Opinion of the Court

31

and we hold that the district court correctly granted Developer’s 

motion for a directed verdict. Finally, we conclude that the district 

court improperly addressed Duke’s indemnification claim in a posttrial motion for attorney fees and accordingly erred when it granted 

Duke’s motion for attorney fees. We reverse the district court’s 

award for indemnification of attorney fees and remand. Duke 

requests costs on appeal. Because we affirm the district court’s grant 

of summary judgment and the directed verdict in favor of 

Developer, we award Duke his costs on appeal. See UTAH R. APP. P.

34(a).