2016 UT App 192

THE UTAH COURT OF APPEALS

Z-CORP AND ONEGREATFAMILY LLC,

Appellants,

v.

ANCESTRY.COM INC. AND ANCESTRY.COM OPERATIONS INC.,

Appellees.

Opinion

No. 20150405-CA

Filed September 9, 2016

Fourth District Court, Provo Department

The Honorable Fred D. Howard

No. 140401466

Robert L. Jeffs, Randall L. Jeffs, and Liisa A. 

Hancock, Attorneys for Appellants

Mark O. Morris and Amber M. Mettler, Attorneys

for Appellees

JUDGE GREGORY K. ORME authored this Opinion, in which JUDGE

KATE A. TOOMEY and SENIOR JUDGE JUDITH M. BILLINGS 

concurred.1

ORME, Judge:

¶1 Z-Corp and its wholly owned subsidiary OneGreatFamily

LLC (collectively, OGF) appeal from the district court’s decision 

dismissing OGF’s complaint against Ancestry.com Inc. and its 

affiliate (collectively, Ancestry) for failure to state a claim. We 

affirm the dismissal as to the majority of the claims but reverse 

 

1. Senior Judge Judith M. Billings sat by special assignment as 

authorized by law. See generally Utah R. Jud. Admin. 11-201(6).
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20150405-CA 2 2016 UT App 192

as to OGF’s claim that Ancestry wrongfully withheld a portion

of the fees owed to OGF.

2

BACKGROUND

¶2 In April 2009, OGF entered into a marketing agreement 

with Archives.com. Each agreed to advertise membership 

subscriptions for the other on their respective websites. In 

return, the marketing party was to receive sixty percent of the 

profit from any subscriptions sold through the advertisements. 

The agreement also expressly directed that both parties were to 

undertake this marketing “at their sole cost and expense, and 

 

2. In its brief, OGF states that it “does not appeal the trial court’s 

dismissal of its conversion claim or its tortious interference with 

prospective economic relations claim.” We therefore have no 

occasion to address the validity of the district court’s dismissal 

of those claims. Furthermore, OGF makes a claim for punitive 

damages based on a provision of the contract allowing punitive 

damages in the event of “breach . . . as a result of gross negligence 

or willful misconduct.” Because OGF does not actually allege that 

Ancestry’s claimed breach resulted from “gross negligence or 

willful misconduct,” and because punitive damages are not 

ordinarily available in a contract action in any event, see TruGreen 

Cos. v. Mower Bros., Inc., 2008 UT 81, ¶ 19, 199 P.3d 929, we affirm 

the dismissal of that claim. Finally, OGF claims that Ancestry 

breached the covenant of good faith and fair dealing. We readily 

affirm the dismissal of that claim, too, as explained in this 

opinion, that Ancestry was within its rights under the contract to 

do as much or as little marketing for OGF as it pleased. See 

generally Young Living Essential Oils, LC v. Marin, 2011 UT 64, 

¶ 10, 266 P.3d 814 (noting that the covenant of good faith and 

fair dealing may not be invoked to “create obligations 

inconsistent with express contractual terms”) (citation and 

internal quotation marks omitted).
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20150405-CA 3 2016 UT App 192

under their own exclusive control.” And the contract contained a 

provision allowing for an accounting at the request of either 

party.

¶3 Ancestry later purchased Archives and assumed its 

contractual obligations. Ancestry continued to operate a separate 

Archives website. At some point following the purchase, OGF 

noticed a sharp decrease in income from membership 

subscriptions. After investigation, OGF concluded that Ancestry 

had removed OGF advertisements from the Archives website. 

OGF sought an accounting from Ancestry and, dissatisfied with 

Ancestry’s progress in complying with its audit request, OGF 

sued Ancestry, alleging that Ancestry had materially breached

the contract. Ancestry filed a motion to dismiss for failure to 

state a claim. The district court granted the motion and 

dismissed OGF’s complaint. OGF appeals.

STANDARD OF REVIEW

¶4 Because this appeal stems from the district court’s 

dismissal of OGF’s complaint for failure to state a claim, we 

apply a single standard of review to the claims still at issue. See 

supra note 2. “[W]e accept the factual allegations in the complaint 

as true and consider them and all reasonable inferences to be 

drawn from them in a light most favorable to the plaintiff,” and

“we give the trial court’s ruling no deference and review it 

under a correctness standard.” Alvarez v. Galetka, 933 P.2d 987, 

989 (Utah 1997) (citation and internal quotation marks omitted).

ANALYSIS

I. OGF Did Not State a Claim for Breach of Contract Based on 

Ancestry’s Refusal To Continue Marketing on OGF’s Behalf.

¶5 Any contract interpretation properly begins with a

consideration of the “plain language” or “plain meaning” of the 
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20150405-CA 4 2016 UT App 192

contract. South Ridge Homeowners’ Ass’n v. Brown, 2010 UT App 

23, ¶ 1, 226 P.3d 758 (citations and internal quotation marks 

omitted). The plain language of the contract at issue is unique in 

several ways. For example, each party to the contract, in its role 

as a marketing resource for the other, was to conduct marketing 

activity for the other “at [its] sole cost and expense, and under 

[its] own exclusive control.” Thus, neither party had the right to 

require that the marketing efforts undertaken on its behalf take 

any particular form, so long as the marketing was, as specified in 

the parties’ agreement, contained “within the paid area of the 

[marketing party’s] website or [distributed] via email to previous 

paying customers.” The rationale underlying the arrangement 

was not one of mandated obligations but rather an attractive 

financial incentive; the marketing partner was to retain sixty 

percent of the membership subscription fees collected while the 

party for whom it was marketing would receive only forty 

percent of the fees paid for membership subscriptions. Either 

party, then, stood to make more money marketing for the other

party than it did from having the other party market for it.

3

 

3. This arrangement is very much like a unilateral contract and 

operates in a similar manner, see Citynet, LLC v. Toney, 772 S.E.2d 

36, 41 (W. Va. 2015) (“The concept of unilateral contract[ is] 

where one party makes a promissory offer and the other accepts 

by performing an act rather than by making a return promise[.]”) 

(citation and internal quotation marks omitted), albeit with a 

uniquely mutual aspect, i.e., each party could earn the payment 

promised by the other by rendering the specified service for the 

other. The basic principles of unilateral contracts are helpful in 

sorting out the present dispute. Particularly, “[a] unilateral 

contract is a contract in which performance is based on the wish, 

will, or pleasure of one of the parties. . . . The essence of a 

unilateral contract is that one party’s promise is conditional 

upon the other party’s performance[.]” 17A Am. Jur. 2d Contracts

§ 7 (2016). Furthermore, in a unilateral contract, the parties do 

(continued...)
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20150405-CA 5 2016 UT App 192

¶6 As the agreement was written, Ancestry was obligated to 

pay OGF a portion of the subscription fees that it collected for 

OGF through advertising undertaken on OGF’s behalf. The 

contract does not obligate Ancestry to engage in any particular

amount or sort of advertising; rather, it allows Ancestry to

advertise for OGF in hopes of collecting membership subscription 

fees for OGF “at [its] sole cost and expense.” If successful,

Ancestry would retain sixty percent of the subscription revenue 

it received on behalf of OGF. But whether to advertise at all 

was within Ancestry’s “own exclusive control.” Accordingly,

Ancestry’s decision to reduce (or even end) its advertising for 

OGF was not a breach of the contract. It just meant that Ancestry 

would not be marketing OGF membership subscriptions and 

would thereby miss out on its substantial cut of the resulting 

subscription fees. So despite OGF’s ongoing promise to allow 

Ancestry to retain sixty percent of the membership subscription 

fees collected on its behalf, because Ancestry never promised to 

market for OGF, Ancestry was free to cease marketing for OGF 

anytime it pleased.4 See 17A Am. Jur. 2d Contracts § 7 (2016).

Therefore, the district court correctly dismissed this claim.

 

(...continued)

not exchange promises; rather one party makes a promise 

inviting the performance of an act that the other party may 

choose to accept (or not accept) through its performance (or 

nonperformance) of the specified act. Id.

4. Though our decision rests on our conclusion that OGF’s 

interpretation of the contract is incorrect, it is far from clear that 

OGF would prevail even under its own interpretation. OGF’s 

theory is that Ancestry is required to advertise for OGF either 

through ad placement on “the paid area of [Ancestry’s] website 

or via email to previous paying customers.” OGF has never 

alleged, however, that Ancestry ceased to advertise “via email to 

previous paying customers.” On the other hand, Ancestry in its 

(continued...)
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20150405-CA 6 2016 UT App 192

II. OGF Did State a Claim for Breach of Contract with Regard to 

Ancestry’s Alleged Nonpayment of Membership Subscription 

Fees Collected by Ancestry but Not Remitted to OGF.

¶7 Although it might have been more prudent of OGF to 

pursue its audit of Ancestry to verify whether Ancestry had, in 

fact, retained subscription fee payments collected on behalf of 

OGF in excess of the authorized amount,5 the terms of the 

contract make clear that such an audit, while authorized, is

voluntary and may be called for at any time by either party, 

subject to minor restrictions. Thus, OGF was not obligated to 

complete an audit as a precondition to filing its lawsuit, as 

Ancestry contends.

 

(...continued)

motion to dismiss explicitly stated that it “ha[s] included [OGF] 

in various emails to paying Archives.com subscribers.” Indeed, 

Ancestry even included in its motion a form email presumably 

sent to such a customer dated February 5, 2013, which was after 

the time when OGF claims subscriptions to its website began to 

decrease. In its response to Ancestry’s motion, OGF made no 

mention of Ancestry’s email marketing efforts. On appeal, OGF 

still does not suggest that Ancestry failed to market OGF 

through emails to paid Archives subscribers, whereas Ancestry 

again stated that it “ha[s] included OGF in various emails to 

paying Archives.com subscribers.” In short, it appears that 

Ancestry may well be correct in characterizing OGF’s claim as 

essentially one of sour grapes: OGF sued because Ancestry 

ceased to market in the manner to which OGF had become 

accustomed, even though Ancestry was not required to do so 

and even though it apparently continued to market on behalf of 

OGF in another approved way.

5. This is especially so given Ancestry’s avowed willingness, 

expressed during oral argument, to pay OGF should an 

accounting demonstrate monies are owed.
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¶8 OGF’s claim that “Ancestry . . . withheld payments for 

subscriptions that are due to OGF” is sufficient to state a claim 

for breach of contract. This is so because if the claim is true—as 

we must assume on appeal, see Alvarez v. Galetka, 933 P.2d 987, 

989 (Utah 1997)—Ancestry’s failure to remit the specified 

percentage of the membership subscription fees to OGF 

undeniably violated the contractual arrangement between the 

parties. We therefore agree with OGF that it “had properly 

articulated [a] separate and actionable breach of contract claim[] 

for failure to remit payment,” and we reverse the decision of the 

district court insofar as it dismissed that claim.

CONCLUSION

¶9 With respect to OGF’s breach of contract claim based on 

Ancestry’s refusal to continue marketing for OGF on its website, 

we affirm the district court’s dismissal. With respect to OGF’s 

breach of contract claim premised upon the alleged nonpayment 

of subscription fees due and owing to OGF, however, we reverse 

because OGF has stated a claim upon which relief could be 

granted. We remand to the district court for such proceedings as 

may now be in order.