UNITED STATES COURT OF APPEALS TENTH CIRCUIT

ULTRA CLEAN HOLDINGS, INC., Plaintiff-Appellee,

v. TFG-CALIFORNIA, L. P., a Utah limited partnership and TETRA FINANCIAL GROUP, L.L.C., a Utah limited partnership, Defendants-Appellants. No. 11-4175 (D.C. No. 2:09-CV-00904-CW) (D. Utah)

ORDER AND JUDGMENT *

Before KELLY , BALDOCK, and EBEL , Circuit Judges.
This is an appeal from the district cour t’s partial grant of summary judgment to Plaintiff-Appellee Ultra Clean Holdings (“U ltra Clean”). Ultra Clean filed a lawsuit against Defendants-Appellants TFG-California, L.P. and Tetra Financ ial Group, L.L.C., (collectively, “TFG”), arguing that, when the parties were unable to finalize a sale-

* This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral es toppel. It may be cited, however, for its persuasive value consistent with Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. FILED United States Court of Appeals Tenth Circuit 

### August 21, 2013
Elisabeth A. Shumaker Clerk of Court2 leaseback transaction, 1 TFG breached a contract between the parties by failing to return a deposit paid by Ultra Clean. Based on th e language of the agreement between Ultra Clean and TFG, the district court concluded that Ultra Cl ean was entitled to have its deposit returned. Because we conclude th at the contractual language governing the return of the deposit is ambiguous as a matte r of law, we reverse the district court’s decision granting summary judgment to U ltra Clean and remand for factual findings. BACKGROUND Ultra Clean “manufacture[s] . . . critical subsystems for the semiconductor capital equipment, medical devices, research, flat pane l, and solar industries.” Aplt. App. at 11. TFG “provides lease financing for a large variet y of commercial assets.” Id. at 130. In late 2008, the parties began negotiating a sale-leaseback arrangement, whereby TFG would procure financing and pu rchase certain equipment ow ned by Ultra Clean and then lease that equipment back to Ultra Clean. Initially, the parties contemplated TFG providing financing of up to $7.5 million for a thirty-six-month term of lease. The parties later agreed to reduce the financing amount to $4.8 million and the lease term to twentyfour months. In December 2008, Ultra Clean presented TFG with a Letter of Intent (“LOI”), which states: “It is the intent of Lessee [Ultra Clean] to form ally offer to Lessor [TFG] to

1 This contemplated transaction involved TFG purchasing equipment owned by Ultra Clean and leasing it back to Ultra Cl ean over a multiple-year lease term.3 lease the Leased Property from Lessor [T FG] pursuant to the following terms and conditions (the ‘Proposal’).” Aplt. App. at 17 . The LOI then proceeds to set forth some material terms and conditions of this offer. As relevant to this appeal, a provision of the LOI entitled “Acceptance By Lessor” contains the following language: This Proposal constitutes an offe r by Lessee to lease from Lessor the Leased Property on the terms and cond itions set forth herein and shall be binding only upon Lessor’s acceptance. Upon Lessor’s acceptance, this Proposal shall supersede all prior unde rstandings among the parties hereto. Further, upon execution of the Master Lease Agreement and any applicable Schedule(s) and such other ancillary agreements and instruments thereto, the Master Lease Agreement shall supersede this Proposal in all respects. Id. at 19. The parties’ dispute centers around the meaning of certain terms contained in another provision of the LOI, which is entitled “Relia nce on Commitment.” This provision states: Prior to issuing a commitment, th e Lessor will perform additional due diligence in connection w ith the Lease and will in itiate such due diligence upon receipt from Lessee of a depos it in an amount equal to $25,000.00 which is equal to one-half the Base Monthly Rental (the “Initial Deposit”). Upon final credit approval, Lessee will provide the remaining deposit amount of $188,000.00 within 5 busine ss days. Said deposit will then total 1 full Base Monthly Rental. 2 This Proposal shall be firm and irrevocable for

2 We note that the LOI required Ultra Clean to pay a total deposit of $213,000—the $25,000 plus $188,000—but TFG explains in its brief that “[t]he original deposit amount of $213,000 was reduced to $173,321.75 to account for the reduction in the funding amount from $7.5 million to $4.8 m illion.” Aplt. Br. at 13 n.4. Of the $213, 000 deposit contemplated under the LOI, the Reliance on Commitment Provision defined the Initial Deposit to be only $25,000. Aplt. A pp. at 19 (requiring Ultra Clean to to pay “a deposit in an amountequal to $25,000.00 which is equal to oneContinued . . .4 thirty (30) business days from the date of receipt by Lessor of all documentation and information required by Lessor (the “Review Period.”). If Lessor does not accept this Proposal within the Review Period and Lessee revokes this Proposal in writi ng, Lessee’s Initial Deposit will be returned, without interest. If Lessor accepts this Pro posal within the Review Period, the Initial Deposit shall become no nrefundable . . . [and] shall either (i) be applied as a prepayment of th e final Base Monthly Rental payment, or (ii) if Lessee does not enter into the lease for any reason, the Initial Deposit shall be deemed a processing fee fully earned by Lessor, and not a penalty, as consideration of and li quidated damages for Lessor’s time, effort and expense in considering a nd responding to Lessee’s Proposal. Id. at 19 (emphases added). The parties disagree about whethe r TFG accepted the Proposal within the Review Period. In ot her words, they dispute the meaning of the phrases “accept this Proposal” and “recei pt by Lessor of a ll documentation and information required by Lessor.” On December 8, 2008, the parties executed the LOI. At that time, Ultra Clean made an initial payment of the depo sit in the amount of $25,000.

half the Base Monthly Rental (the ‘Initial De posit’)”). And the language of the Reliance on Commitment Provision that explains when funds will be returned to Ultra Clean speaks only of the Initial Deposit. Id. (“If Less or does not accept this Proposal within the Review Period and Lessee revoke s this Proposal in writing, Lessee’s Initial Deposit will be returned, without interest. If Lessor accept s this Proposal within the Review Period, the Initial Deposit shall become nonrefundable . . . .”). Thus, under th e plain language of the LOI, the dispute between the parties invo lving whether the Initia l Deposit should be refunded is only a dispute of $25,000. But the district court awarded Ultra Clea n $173,321.75—the full deposit paid by Ultra Clean to TFG. And on app eal, TFG does not challenge the amount of the award; it only argues that the district court erred in granti ng summary judgment to Ultra Clean. Thus, we will assume for purposes of this appeal th at the amount in question is the total deposit paid by Ultra Cl ean—$173,321.75.5 As is next relevant to this appeal, after TFG commenced its due diligence and underwriting, in late December, the partie s agreed in writing to an amendment to proposed transaction (“Amendment”), where by they reduced the amount of funding, modified the lease term, and agreed that Ultr a Clean would provide a security deposit of 15% of the cost of the equipment. This wr itten agreement stated that “[a]ll other terms and conditions of the initial proposal dated D ecember 8, 2008 would remain the same.” Id. at 22. On January 21, 2009, TFG made an arrange ment with Republic Bank (not a party to this action) to obtain fu nding for the sale-leaseback tr ansaction contemplated between TFG and Ultra Clean. Republic Bank agreed with TFG to fund the proposed transaction under the terms described in the LOI and th e Amendment. A few days later, Republic Bank confirmed in writing its commitm ent to fund the transaction. Its agreement with TFG was to remain in e ffect for ninety days. Having obtained funding from Republic Bank, TFG informed Ultra Clean on January 21, 2009, verbally and in writing, th at it had granted “final credit approval” for the transaction. Id. at 210. TFG sent standard lease documents to Ultra Clean on January 28, 2009. But Ultra Clean did no t immediately sign and return the lease documents; instead, it c ontinued to negotiate with TFG. Although TFG informed Ultra Clean that the credit approval for the funds was only good for ninety days, Ultra Clean delayed signing lease documents until after the ninety da y period had elapsed.6 During the delay, Ultra Clean’s financia l condition deteriorated. On April 15, 2009, Republic Bank in formed TFG that it wo uld not agree to fund the transaction until after Ultra Clean released its financial statem ent for the quarter. And on April 21, 2009, Republic Bank’s credit approval to TFG for the transaction expired. Finally, TFG sent revised lease documents to Ultra Clean. 3 And on April 28, 2009, Ultra Clean signed the lease documents and returned them to TFG, along with an authorization that allowed TFG to direc tly withdraw funds from Ultra Clean’s bank account. Pursuant to Ultra Clean’s author ization, on May 5, 2009, TFG withdrew $145,712.50 from Ultra Clean’s bank account. And on May 11, 2009, TFG withdrew an additional $2,609.25 from Ultra Clean’s acco unt. These amounts, combined with the initial payment of $25,000, brought the amount Ultra Clean paid to TFG to $173,321.75. 4 Despite withdrawing these funds from U ltra Clean’s account, TFG never signed the lease documents that had previously be en executed by Ultra Clean. Instead, on May 12, 2009, TFG learned that Re public Bank was no longer willing to fund the lease under

3 Although the timing is not clear from the par ties’ briefs, it appears that at some point, TFG sent to Ultra Clean lease documents that had been revised in accordance with the parties’ negotiations, and Ultra Clean executed this second se t of lease documents rather than the first set of document s sent on January 21, 2009.

4 The Reliance on Commitment Provision of the LOI called for an initial payment of $25,000, with an additional payment of $188, 000 (subsequently redu ced to $173,321.75) to be paid within five business days of fina l credit approval for the transaction. Although Ultra Clean did not make its payment for the re mainder of the deposit within five days of receiving final credit approval, the district court found that TFG had waived this requirement, and TFG does not appeal this ruling.7 the terms that TFG and Republic Bank had previously discusse d. As a result, TFG later sent Ultra Clean revised lease documents th at increased the amount of the security deposit from 15% of the cost of the equipment to 40% of the cost. Ultra Clean responded by revoking the Proposal in writing. TFG did not return Ultra Clean’s depos it. Accordingly, Ultra Clean sued TFG, claiming that TFG had breached the LOI by failing to return th e deposit. The parties filed cross-motions for summary judgment. The di strict court granted summary judgment to Ultra Clean on the breach of contract claim and denied TFG’s cro ss-motion for summary judgment. TFG has timely appealed the district court’s ruling. JURISDICTION The district court had jurisdiction over th is case under 28 U.S. C § 1332(a)(1). We have jurisdiction und er 28 U.S.C. § 1291. STANDARD OF REVIEW Summary judgment is available “if the m ovant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). “When applying th is standard, we view the evidence and draw reasonable inferences therefro m in the light most favorable to the nonmoving party.” Garrison v. Gambro, Inc., 428 F.3d 933, 935 (10th Cir. 2005 ). But “[c]ross-motions for summary judgment are to be treated separate ly; the denial of one does not require the grant of another.” Buell Cabinet Co., Inc. v. Sudduth, 608 F.2d 431, 433 (10th Cir. 1979). And “[w]hen the parties file cross mo tions for summary judgment, [the court is]8 entitled to assume that no evidence needs to be considered other than that filed by the parties, but summary judgment is nevertheless inappropriate if dis putes remain as to material facts.” Atl. Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1148 (10th Cir. 2000) (internal quotation marks omitted). In the context of summary judgment, “[t] he initial question . . . concerning the existence of an ambiguity [in a contract] is one of law that may be decided summarily by the court.” Gomez v. Am. Elec. Power Serv. Corp., 726 F.2d 649, 65 1 (10th Cir. 1984). And “[i]f the language is clear, the parties’ in tentions are not at issue.” Id. But “the question concerning the interpretation of a writte n agreement is one of fact.” Id. “Thus, in an ambiguous contract, if the intent of the parties is disputed, a genuine issue of material fact exists which cannot be determ ined summarily by the court.” Id.; accord WebBank v. Am. Gen. Annuity Serv. Corp ., 54 P.3d 1139, 1145 (Utah 2002) (“[A] motion for summary judgment may not be grante d if a legal conclusion is reached that an ambiguity exists in the contra ct and there is a factual issue as to what the parties intended.” ). TFG did not argue that the lang uage of the LOI was ambiguous before the district court. But “[w]hether to address [an] argument despite th e litigant’s failure to raise it below is subject to this court’s discretion based on the circumstances of the individual case.” United States v. Jarvis, 499 F.3d 1196, 1201 (10th Cir. 2007). Here, although neither party specifica lly argued before the district court that the language of the LOI was ambiguous, they put forth conflicting interpretations of the language of the LOI,9 and when faced with conflictin g interpretations, the court mu st determine as a threshold matter if the contractual language is ambig uous. See Gomez, 726 F.2d at 651. DISCUSSION In this case, the LOI states that the “Pro posal shall be governed in all respects by the laws of the State of Utah without regard to conflicts of law prin cipals [sic].” Aplt. App. at 20. To determine if contractual la nguage is ambiguous, Utah courts consider whether “it is capable of more than one reasonable interpretation because of uncertain meanings of terms, missing terms, or other fa cial deficiencies.” WebBank, 54 P.3d at 1145 (internal quotation marks omitted). But “[a] contract provisi on is not necessarily ambiguous because the parties differ in their interpretation of its language.” Willard Pease Oil & Gas Co. v. Pioneer Oil & Gas Co., 899 P.2d 766, 772 (Utah 1995). Thus, “[t]o demonstrate ambiguity, the contrary positions must each be a reasonable interpretation of the terms in the provision.” Id. Before the district court, Ultra Clea n argued that it was entitled to summary judgment because TFG had not accepted the Pr oposal within the Review Period, and was therefore not entitled to retain the deposit. The district court agreed. But TFG contends, instead, that it did accept the Proposal within the Review Pe riod, and therefore is entitled to retain the deposit. Reso lution of the parties’ dispute turns on the meaning of two phrases contained in the Relia nce on Commitment Provision of the LOI: (1) “accept this Proposal”; and (2) “receipt by Lessor of a ll documentation and info rmation required by Lessor (the ‘Review Period’).”10 We will first set forth the parties’ resp ective interpretations of these contested phrases, and then discuss whethe r these interpretations are reasonable. We conclude that the interpretations put forth by the parties are equally reasonable; thus, a factual issue exists that precludes summary judgment.
I. The Parties’ Interpretations A. The District Court Decision & Ultra Clean’s Interpretation The court ruled that TFG did not accept th e Proposal within the Review Period. 5 Specifically, the district court concluded that “[TFG] had all of the required documents and information [necessary to trigger the Revi ew Period] by April 28,” because that was the date by which the parties had agreed on th e final form of the lease documents. Aplt. App. at 288-89. And the district court de termined that, “[b]y making a counter proposal that changed a material term of Ultra Clean’s offer, [TFG] rejected Ultra Clean’s offer,” and “Ultra Clean responded to th e counterproposal by revoking the Proposal in writing.” Id. at 289. Ultra Clean agrees. Ultra Clean claims that the Review Period was intended to give TFG an opportunity to review the fina l lease documents before executing them and

5 The district court ruled that “[t]he Proposal was therefor e irrevocable for the following 30-day ‘Review Period’ that ended on May 28,” and that TFG did not accept the Proposal within the Review Period. Aplt. App.at 289. But the LOI provided that only business days were to be included in the thirty-day Review Period, Aplt. App. at 19; thus, under the district court’s interpretation, the Review Period would actually have been from April 28, 2009 to June 10, 2009.11 entering into the lease transaction. Thus, it interprets the phras e “all documentation and information required by Lesso r” to mean all documents necessary to finalize the transaction and enter into a lease agreement— including the final lease documents. And it contends that to “accept this Proposal,” TFG wa s required to enter into the sale-leaseback transaction with Ultra Clean by executing the lease documents. From this, although Ultra Clean’s arguments on this point are unclear, it seems evident that Ultra Clean must consider the term “Proposal” to mean the exec uted final lease documents that it sent to TFG (which had previously been drafted by TFG and sent to Ultra Clean for execution). 6 Under Ultra Clean’s interpretation, TFG di d not accept the Proposa l during the Review Period, because it did not execute the final lease documents during the thirty business days between April 28, 20 09 and June 10, 2009.
B. TFG’s Interpretation In contrast, TFG contends that the Pro posal was a preliminary agreement between the parties, rather than the ultimate sale-leaseback transaction entered into by the final lease documents. In other words, it asserts th at the overall transac tion between the parties involved two separate agreements—the Pro posal (under which Ultra Clean would keep

6 It is not really clear how Ultra Clean woul d define the term “Proposal.” Ultra Clean claims that the “Proposal” was “Ultra Clean’ s offer to lease certain property from TFG,” but does not point to a specific document th at constitutes the Proposal. Nonetheless, given Ultra Clean’s arguments that TFG mu st execute the final lease documents to accept, Ultra Clean appears to c onsider the final lease documents that it executed and sent to TFG to be the Proposal.12 its offer firm and irrevocable, and TFG w ould undertake due dilig ence and underwriting in an attempt to secure fund ing for the lease), and the Ma ster Lease (under which the parties would enter into the sale-leaseback transaction). Although this is the overall thrust of TFG’s argument, it advances multip le possible interpretations of the phrases “accept this Proposal” and “receipt by Lesso r of all documentati on and information required by Lessor.” TFG claims that the Review Period was intended to gi ve it an opportunity to review the documentation an d information necessary to conduct due diligence and underwriting, and determine whether it could fu nd the transaction. Thus, it argues that the “documentation and information” necessary to trigger the Review Period is the material necessary for TFG to perform its due diligence and underwriting prior to issuing funding for the transaction. TFG further argues that it woul d not make sense to have the Review Period commence until the finalization of the lease documents, because at that point, TFG would have complete d its review and already ma de the decision to approve the transaction. Under this interpretation, the LOI provid ed that TFG would “initiate [its] due diligence upon receipt from [Ultr a Clean] of a deposit in an amount equal to $25,000,” Aplt. App. at 19, and Ultra Cl ean made that deposit of $25, 000 on December 8, 2008, so it is possible that, as of that date, TFG had received all the materials it required to begin its due diligence and underwriting, making the Review Period from December 8, 2009 to January 22, 2010. But TFG al so points to the Amendment the parties executed in late13 December, and if this was part of the docum entation and informatio n required by TFG, the Review Period would run from December 30, 2008 to February 12, 2009. Further, TFG asserts that because it “issued its final credit approval on Janu ary 21st,” it “must have received all of the due diligence ‘docum entation and informati on’ prior to that date,” Aplt. Br at 21, which means the very latest possible dates for the Review Period would have been January 21 , 2009 to March 5, 2009. TFG claims that it accepted the Proposal by executing the LOI or by issuing final credit approval for the transaction. TFG’s argum ents indicate that it appears to define the Proposal as the LOI or the Amendment ex ecuted in late December. Under TFG’s proffered interpretations, if the Review Period began on December 8, 2009, TFG accepted the Proposal by executing the LOI or granting final credit approval. If the Review Period began Decembe r 30 or January 21, TFG accepted the Proposal by granting final credit approval.
II. Reasonableness of the Parties’ Interpretations Although each party’s proffered interpretati ons contain significant flaws, in light of the language contained in the LOI, we co nclude that the parties put forth contrary interpretations that were equally reasonable. Thus, the contract is ambiguous and a dispute of material fact exists that precl udes summary judgment. We will consider each phrase in turn. First, in determining the proper interpre tation of the phrase “accept this Proposal” it is not at all clear from the LOI what is meant by the term “Proposal”—whether the14 Proposal is the LOI, the Amendment, the final lease documents, or something else altogether. And the language of the LOI do es not clarify this problem. For instance, some language supports Ultra Clean’s argument that TFG was required to do something more than execute the LO I to accept the Proposal. The LOI states that “[p]rior to issuing a commitment, Lessor will perform additional due diligence.” Id. (emphasis added). But this language does not preclude TFG’s argume nt that it accepted the Proposal by issuing final credit approval. Nonetheless, the LOI also states that “[t]his Proposal constitutes an offer by Lessee to lease from Le ssor the Leased Property on the terms and conditions set forth herein and shall be binding only u pon Lessor’s acceptance,” Aplt. App. at 19 (emphases added)) which supports Ultra Clea n’s interpretation of the Proposal as the final lease agreement. In support of TFG’s position, there is also language indicating that the Proposal is the LOI itself. For instance, the LOI define s “the following terms and conditions” of the LOI as “the ‘Proposal,’” Aplt. App. at 17, and the LOI refers to “this Proposal” throughout the document. Id.; see also Aplt. App. at 19 (“[T ]his Proposal shall supersede all prior understandings among the parties,” but “the Master Lease Agreement shall supersede this Proposal in all respects.” (e mphasis added)); id. (“If Lessor [TFG] accepts this Proposal in writing, the Initial Deposit shall become nonrefundable,” and “if Lessee [Ultra Clean] does not enter in to the lease for any reason, the Initial Deposit shall be deemed a processing fee.” (emphases added )). Such language clearly differentiates between the Proposal and the final lease ag reement, and supports the notion that TFG15 could accept the Proposal by executing the LOI or approving funding for the transaction, rather than executing fina l lease documents. Similarly, there is also language indica ting that the Amendment that the parties executed in late December constitutes the Pr oposal. The Amendment made changes to material terms by shortening the lease a nd requiring Ultra Clean to provide a 15% security when no security ha d previously been required. And the Amendment stated that “[a]ll other terms and conditio ns of the initial proposal dated December 8, 2008 would remain the same.” Aplt. App. at 22. The parties’ execu ting this Amendment indicates that it is reasonable that this Amendmen t then became the governing document. Second, in determining the proper interp retation of the phrase “receipt by Lessor of all documentation and information required by Lessor,” language from the LOI again supports each party’s interpretation. As Ultra Clean point s out, the phrase “all documentation and information required by Lesso r,” Aplt. App. at 19 (emphasis added), is not limited only to the do cumentation and information nece ssary for TFG to conduct its due diligence, and therefore coul d reasonably be read to refe r to all documents necessary to complete the sale-lea seback transaction. On the other hand, the Reliance on Commitm ent provision first states “[TFG] will perform additional due diligence in connection with the Lease and will initiate such due diligence upon receipt from [Ultra Clean] of a deposit in an amount equal to $25,000,” and then states that “[t]his Proposal shall be firm and irrevocable for thirty (30) business days from receipt by Lessor of all documenta tion and information required by Lessor.”16 Aplt. App. at 19. This indicates that th e “documentation and information” refers to material necessary for TFG to conduct due diligence and unde rwriting, rather than the material necessary to finalize the sale-leaseba ck transaction. Additionally, the provision following the Reliance on Commitm ent Provision is entitled “Fin ancial Information,” and states that “[Ultra Clean] will provide audite d financial statements and other business and financial information required by Lessor.” Aplt. App. at 19. This indicates that the prior provision, Reliance on Commitment, could be referring to financial materials rather than lease documents. In addition to the plain language of the contract, the parties each presented the district court with arguments and eviden ce supporting the reasonableness of their respective positions. Because Ultra Clea n and TFG advance co ntrary reasonable interpretations, the contract is ambiguous as a matter of law and factual findings are necessary to discern the intent of the partie s. See WebBank , 54 P. 3d at 1147 (“Such ambiguity may be resolved on ly by the trier of fact afte r consideration of parol or extrinsic evidence as to the par ties’ intentions, that is, a re view and evaluation of all the facts and circumstances surrounding the substance of the transaction.”). CONCLUSION Ultra Clean and TFG advance contrary in terpretations of key language contained in the LOI. Both parties’ inte rpretations are reasonable in li ght of the plai n language of the LOI and the record before the court. Ac cordingly, under Utah law, the provisions are ambiguous and a genuine dispute of material fact exists. For that reason, summary17 judgment was inappropriate. Accordingly, we reverse the district court’s decision granting summary judgment to Ultra Clean and remand for factual findings.
REVERSED. ENTERED FOR THE COURT

David M. Ebel Circuit Judge