2018 UT App 145

THE UTAH COURT OF APPEALS

NATIONAL TITLE AGENCY LLC AND WILLIAM D. ROWLEY,

Appellants,

v.

JPMORGAN CHASE BANK NA,

Appellee.

Opinion

No. 20160806-CA

Filed July 27, 2018

Third District Court, Salt Lake Department

The Honorable Todd M. Shaughnessy

No. 160901812

Sean A. Monson, Ryan M. Merriman, and Jeremy C. 

Reutzel, Attorneys for Appellants

Gary E. Doctorman and Nicholas U. Frandsen, 

Attorneys for Appellee

JUDGE GREGORY K. ORME authored this Opinion, in which 

JUDGES MICHELE M. CHRISTIANSEN and DAVID N. MORTENSEN

concurred.

Orme, Judge:

¶1 Appellants National Title Agency LLC and William D. 

Rowley (collectively, Plaintiffs) appeal the district court’s order 

dismissing their complaint against Appellee JPMorgan Chase 

Bank NA (Chase Bank) on the ground that their claims were 

barred by the statute of limitations. We affirm.

BACKGROUND

¶2 National Title, formed by Rowley in 2006, was a licensed 

escrow and title agent that closed real estate transactions in 
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Utah.1 As a licensed escrow agent, National Title held funds in 

escrow for its clients in trust accounts at several banks, including 

a trust account at Chase Bank (the Trust Account). 

¶3 Two unrelated suits were brought against National Title 

in 2010, and because it failed to appear in either suit, the district 

court entered default judgments against it. Shortly after the 

default judgments, the district court issued two writs of 

garnishment to Chase Bank, which, National Title alleges, 

mindlessly complied with the writs, releasing over $600,000

belonging to National Title’s clients from the Trust Account to 

National Title’s judgment creditors. The last such release was in 

September 2010. 

¶4 National Title periodically received statements from 

Chase Bank regarding the Trust Account. Somehow, National 

Title did not notice the substantial shortfall in the Trust Account 

until October 2013. It then alerted its underwriter, First 

American Title Insurance Company (First American), that it 

would need assistance in compensating clients for their 

escrowed funds that were lost as a result of the Trust Account’s 

garnishments. First American promptly sent a written demand 

and then filed suit in November 2013 in federal court, 

demanding that National Title reimburse First American for any 

payments it would have to make to cover the shortfall. First 

American then terminated its relationship with National Title, 

resulting in National Title’s closure. 

¶5 In September 2015, Plaintiffs filed a third-party complaint 

against Chase Bank—in the federal case First American brought 

 

1. When reviewing a motion to dismiss, “we accept the factual 

allegations in the complaint as true,” and so we recite the facts 

“in a light most favorable to the plaintiff as the nonmoving 

party.” Russell Packard Dev., Inc. v. Carson, 2005 UT 14, ¶ 3, 108 

P.3d 741.
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against Plaintiffs—alleging breach of fiduciary duty, breach of 

contract, and negligence per se. But the federal court, citing 

principles of federal abstention, dismissed the suit without 

prejudice. When Plaintiffs filed those same claims in state district 

court, Chase Bank moved to dismiss under rule 12(b)(6) of the 

Utah Rules of Civil Procedure on the ground that the suit was 

barred by the general four-year statute of limitations. See Utah 

Code Ann. § 78B-2-307(3) (LexisNexis Supp. 2017) (specifying 

that a four-year statute of limitations applies to claims “for relief 

not otherwise provided for by law”). Plaintiffs opposed the 

motion to dismiss, arguing that the statute of limitations began 

to run in 2013 when First American sued National Title—not in 

2010 when the Trust Account was garnished. They also sought to 

file an amended complaint. 

¶6 Concluding that the statute of limitations began to run in 

2010, the district court determined that the breach of contract 

claim was subject to a two-year contractual limitation and that 

the claims for breach of fiduciary duty and negligence per se 

were subject to the general four-year statute of limitations.2 And 

because Plaintiffs sued in 2015, the district court held that the 

claims were barred by the applicable statutes of limitations. As a 

result, it granted Chase Bank’s motion, dismissed the suit, and 

denied Plaintiffs’ motion to amend. This appeal followed.

ISSUES AND STANDARDS OF REVIEW

¶7 Plaintiffs contend that the district court erred in 

dismissing their complaint, on the rationale that all three claims 

were time-barred. “When reviewing a rule 12(b)(6) motion to 

dismiss, we accept the factual allegations in the complaint as 

 

2. National Title also brought a claim for equitable 

indemnification, but the district court concluded that this claim 

had not yet accrued. Plaintiffs do not raise this issue on appeal.
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true and interpret those facts, and all reasonable inferences 

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

nonmoving party.” Russell Packard Dev., Inc. v. Carson, 2005 UT 

14, ¶ 34, 108 P.3d 741. “Because the propriety of a motion to 

dismiss is a question of law,” we review the dismissal for 

correctness. Id.

¶8 Plaintiffs also contend that the district court erred in 

denying their motion to amend. “Typically, the standard of 

review of a denial to amend pleadings is abuse of discretion.” 

Ottens v. McNeil, 2010 UT App 237, ¶ 20, 239 P.3d 308 (quotation 

simplified). But “when the trial court’s denial is based on its 

conclusion that the amendment would be futile because the 

statute of limitations bars the claim,” we review the application 

of the statute of limitations for correctness. Id. “To the extent that 

the statute of limitations analysis involves subsidiary factual 

determinations, we review those factual determinations using a 

clearly erroneous standard.” Id. (quotation simplified).

ANALYSIS

I. The Statutes of Limitations 

¶9 Determining that Plaintiffs’ damages arose upon Chase 

Bank’s release of the funds in 2010, the district court concluded

that National Title “was damaged as soon as the garnished 

funds left the Trust Account” as “National Title was overdrawn 

and would no longer be able to furnish the escrowed funds back 

to its customers.”3 But Plaintiffs, overlooking their ultimate 

 

3. Plaintiffs assert that the district court’s analysis does not apply 

to plaintiff Rowley’s claims because he was never considered a 

trustee or listed by name on the Trust Account. These facts 

surely suggest his individual standing to sue is questionable, 

but, in any event, the complaint does not identify any differences 

(continued...)
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liability as fiduciaries, contend that it was actually their clients 

who were harmed upon the release of the escrowed funds and 

that the statutes of limitations did not start running on Plaintiffs’ 

claims until 2013, when First American terminated its 

relationship with National Title, filed suit, and forced National 

Title out of business. 

¶10 Damages are a necessary element in Plaintiffs’ claims for 

negligence, breach of contract, and breach of fiduciary duty. See

Hunsaker v. State, 870 P.2d 893, 897 (Utah 1993) (elements 

required for a negligence cause of action); Carmichael v. 

Higginson, 2017 UT App 139, ¶ 10 n.5, 402 P.3d 146 (elements 

required for a breach of contract cause of action); Giles v. Mineral 

Res. Int’l, Inc., 2014 UT App 259, ¶ 6, 338 P.3d 825 (elements 

required for a breach of fiduciary duty cause of action). Because 

a “cause of action accrues when the last event necessary to 

complete the legal claim occurs,” damages would indeed have to 

arise for there to be a cause of action. Olsen v. Hooley, 865 P.2d 

1345, 1347 (Utah 1993). And once a cause of action accrues, the 

statute of limitations begins to run. Id.

¶11 Quoting Seale v. Gowans, 923 P.2d 1361 (Utah 1996), 

Plaintiffs assert that when Chase Bank garnished the funds, their 

damages were “in the form of an enhanced risk of future harm,” 

which damages “are not sufficient to start the running of the 

statute of limitations.” Id. at 1365 (quotations simplified). But 

damages of this character are only relevant in personal injury 

cases where, in rare circumstances, a negligent act may occur but 

a plaintiff has yet to show symptoms of an injury and is 

 

(...continued)

in the claims asserted by Rowley and National Title. We 

therefore conclude that the district court did not err in applying 

its analysis to Rowley’s claims as well.
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therefore unable to produce evidence of actual or future harm.4

See id. at 1365‒66; Lee v. Williams, 2018 UT App 54, ¶ 36, 420 P.3d 

88; Riggs v. Asbestos Corp., 2013 UT App 86, ¶¶ 14‒15, 304 P.3d 

61. Thus, damages for an enhanced risk of future injury are 

intended to reduce the number of speculative claims among 

plaintiffs facing uncertainty as to whether an injury will arise. 

Seale, 923 P.2d at 1365. The same cannot be said, however, for 

cases where a plaintiff seeks damages for a financial loss, 

because there is no occasion for speculation as to whether the 

plaintiff has suffered an injury.

¶12 Generally, “damages serve the important purpose of 

compensating an injured party for actual injury sustained, so 

that she may be restored, as nearly as possible, to the position 

she was in prior to the injury.” Mahmood v. Ross, 1999 UT 104, 

¶ 19, 990 P.2d 933 (quotation simplified). General damages are 

those that flow naturally and are a necessary result of a breach or 

injury. Id.; Cohn v. J.C. Penney Co., 537 P.2d 306, 307 (Utah 1975). 

And a plaintiff who has sustained a financial loss has standing to 

immediately bring an action to recover its damages once that 

loss has occurred. Although Plaintiffs assert that Chase Bank’s 

improper release of funds from the Trust Account did not 

initially harm them, the garnishing of escrowed funds from the

Trust Account to satisfy a judgment against National Title is the 

breach and the proximate cause of the alleged injuries 

underlying Plaintiffs’ claims. Had Chase Bank not released the 

funds, or had it immediately restored them upon National Title’s 

timely demand, the Trust Account would not have experienced a 

shortfall and the events of 2013 would not have unfolded. As 

soon as the improper garnishment occurred, National Title 

 

4. Moreover, damages for enhanced risk of future injury are 

available only when “a plaintiff seeks to recover damages for a 

possible future injury without having suffered any presently 

cognizable injury.” Medved v. Glenn, 2005 UT 77, ¶ 14, 125 P.3d 

913.
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remained on the hook for those amounts, vis-a-vis its clients to 

whom the funds belonged, and it immediately had standing, as 

trustee of the account, to demand restoration of the amounts 

misappropriated by Chase Bank. Like the district court, we 

conclude that damages accrued and the statutes of limitations 

began running on Plaintiffs’ claims in 2010 when Chase Bank 

garnished funds in the Trust Account to satisfy unrelated 

judgments against National Title.

¶13 Plaintiffs insist that what they seek in this action is not 

recovery of the garnished funds but rather special or 

consequential damages for harms that the loss of those funds 

eventually caused. Special damages and consequential damages, 

as opposed to general damages, are just “two ways of naming 

the damages that occur as a natural consequence of the harm,” 

USA Power, LLC v. PacifiCorp, 2016 UT 20, ¶ 93 n.128, 372 P.3d 

629 (quotation simplified), above and beyond general damages. 

These terms are “essentially synonymous,” with special 

damages being the term traditionally used in tort law and 

consequential damages being the term used in contract law. Id.

Unlike general damages, special or consequential damages 

“‘include items of loss that are more or less peculiar to the 

particular plaintiff and would not be expected to occur regularly 

to other plaintiffs in similar circumstances.’” State v. Corbitt, 2003 

UT App 417, ¶ 20, 82 P.3d 211 (Orme, J., concurring) (quoting 

Dan B. Dobbs, Handbook on the Law of Remedies § 3.2, at 138 (West 

1973)).

¶14 Here, First American’s lawsuit and termination of its 

relationship with National Title was perhaps a natural 

consequence of the loss of $600,000 from the Trust Account, but 

this is not a loss that would be routinely expected in every case 

like this one. Quite extraordinarily, in our judgment, the 

substantial shortfall in the Trust Account went unnoticed by 

Plaintiffs for almost three years, and upon learning that it would 

have to reimburse the garnished funds, First American 

demanded that National Title transfer all escrowed funds in 
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National Title’s possession. It also subsequently terminated its 

relationship with National Title and brought suit. The unnoticed 

loss of a significant amount of money, the failure to monitor and 

diligently superintend those funds, National Title’s inability to 

reimburse First American, and First American filing suit and 

terminating its relationship with National Title all did eventually 

happen in this case. But these were not typical results of an

improper garnishment, and it is unlikely that these same events 

would occur in every circumstance where a bank improperly 

garnishes a trust account. Rather, while being a natural 

consequence of the events as they unfolded, these events were 

unique to National Title’s situation. 

¶15 Of course, in contract actions special or consequential 

damages are an adjunct to general damages. Cohn, 537 P.2d at 

308. Special or consequential damages must be pleaded in the 

same suit as the action claiming general damages.5 Seale, 923 

P.2d at 1364 (providing that “once some injury becomes 

actionable, a plaintiff must plead all damages” in one suit) 

(emphasis in original). And because “a cause of action accrues 

upon the happening of the last event necessary to complete the 

cause of action,” Myers v. McDonald, 635 P.2d 84, 86 (Utah 1981), 

 

5. Unlike general damages, which “may be recovered under a 

general allegation of damage,” special or consequential damages 

must be pleaded with particularity. Cohn v. J.C. Penney Co., 537 

P.2d 306, 308 (Utah 1975). See Utah R. Civ. P. 9(h). For special 

damages, a plaintiff “must plead each type of damage 

specifically so that the opposing party has an adequate 

opportunity to defend against the plaintiff’s claims.” Hodges v. 

Gibson Products Co., 811 P.2d 151, 162 (Utah 1991). And to 

recover consequential damages, a plaintiff must not only prove 

that damages were caused by the contract breach but that “they 

were foreseeable at the time the parties contracted” and that the 

amount can be proven with reasonable certainty. Mahmood v. 

Ross, 1999 UT 104, ¶ 20, 990 P.2d 933.
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general damages are the only damages necessary to complete a 

cause of action and start the running of the statute of limitations. 

Moreover, “mere ignorance of the existence of a cause of action” 

will not toll the statute of limitations. Id.

¶16 In sum, the statutes of limitations started to run in 2010 

when Plaintiffs sustained the loss of the escrowed funds for 

which they were responsible—not in 2013 when aspects of their 

claimed special or consequential damages at last came to 

fruition. Plaintiffs brought this suit on March 15, 2016, almost six 

years after the escrowed funds entrusted to them were 

improperly released from the Trust Account. Because their 

breach of contract claim is subject to a two-year contractual 

limitations provision and their breach of fiduciary duty and 

negligence claims are subject to the general four-year statute of 

limitations, Plaintiffs’ claims are time-barred. See Utah Code 

Ann. § 78B-2-307(3) (LexisNexis Supp. 2017) (providing that 

“[a]n action may be brought within four years” when “not 

otherwise provided for by law”); Lilley v. JP Morgan Chase, 2013 

UT App 285, ¶ 11, 317 P.3d 470 (providing that a negligence 

claim is subject to the general four-year statute of limitations); 

Russell/Packard Dev., Inc. v. Carson, 2003 UT App 316, ¶ 11, 78 

P.3d 616 (providing that a breach of fiduciary duty claim is 

subject to the general four-year statute of limitations), aff’d on

other grounds, 2005 UT 14, 108 P.3d 741. For these reasons, the 

district court properly dismissed Plaintiffs’ complaint.

II. Motion to Amend

¶17 Plaintiffs argue that, because their claims are all timely, 

the district court erred in denying their motion to amend their 

complaint. Permission for a party to amend its complaint should 

be freely given when justice requires. Utah R. Civ. P. 15(a)(2). 

But “justice does not require that leave be given if doing so 

would be futile.” Jensen v. IHC Hospitals, Inc., 2003 UT 51, ¶ 139, 

82 P.3d 1076 (quotation simplified). And “it is well settled that a 

court may deny a motion to amend as futile if the proposed 
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amendment would not withstand a motion to dismiss.” Id.

(quotation simplified). Because Plaintiffs’ claims are barred by

the statute of limitations, a restatement of their claims would not 

have helped them, and the district court did not err in denying 

their motion to amend.

CONCLUSION

¶18 We conclude that Plaintiffs’ claims for breach of contract, 

breach of fiduciary duty, and negligence per se are barred by the 

statutes of limitations. And because these claims are time-barred, 

the district court did not err in its denial of Plaintiffs’ motion to 

amend. Accordingly, we affirm.