20 17 UT App 81



### T HE 

### U TAH 

### C OURT O F 

### A PPEALS

A FTON B. T HOMAS , Appell ant , v. G EORGE T ENNYSON M ATTENA , J ODY K. M ATTENA , AND B AD L ANDS B OW H UNTERS LLC , Appell ees

.

Opinion N o. 20150987

- CA Filed May 11, 2017

Third District Court, Salt Lake Department The Honorable Ryan M. Harris No. 130905157

Brett D. Cragun , Attorney for Appellant John V. Mayer
, Attorney for Appellee s
J UDGE M ICHELE M. C HRISTIANSEN authored th is Opinion
, in which J UDGES G REGORY K. O RME and J. F REDERIC V OROS J R

. concurred

.

CHRISTIANSEN
, Judge :

¶1 This case co ncerns the enforceability of a promissory note memorializing a loan made to a limited

- liabili ty company whe n th e promissory note does not contain personal liability terms. We conc lude that the district court did not plain ly err in determining that the note was enforceable against the company but not the individual signers , and we therefore affirm.

¶2 Afton B. Thomas was the trustee of several trusts
, including the Kent E. Thomas Marital Trust

. Jody K. Mattena is a contingent be neficiary of th at t rust. She and George Tennyson Mattena own Bad Lands Bow Hunters LLC (Bad Lands).Thomas v. Mattena

20150987

- CA 2 2017 UT App 81 ¶3 In 2011, the se parties met to discuss the use of a building

ow ned by the trust. The par ties agreed that Bad Lands would lease the building

. The lease terms were not reduced to a writing si gned by all of the parties

. However, the parties understood that the Mattenas would be personally responsible for paying the lease if Bad Lands did not.

¶4 Al so in 2011, Thomas loaned $200,000 to Bad Lands from the trust. This money was to be used for improvements to the building and to fund the company’s start up costs. Later, Thomas increased the loan to a total of $300,000. The Mattenas executed a promissory note, but , as the district court found, the wording was “ambiguous and was not clearly drafted to indica te individual liability.” The disbursement checks from the trust were made out to Bad Lands, not the Mattenas. While Thomas believed Bad L ands and the Mattenas would be jointly liable for repaying the loan, the Mattenas did not share that belief. Instead, they believed liability for loan repayment would mirror the terms of a business loan previously made by Thomas to Jody Mattena ’s half sister , which did not include any provision for personal liability

.
¶5 In 2013, Thomas brought suit on behalf of the trust against Bad L ands and the Mattenas for missing payments on the lease and loan

. At the conclusion of the bench trial, t he district court ruled that Bad L ands and the Mattenas were jointly liable for amounts due under the lease

. But t h e court also ruled that
, because “there was never a meeting of the minds between the parties as to personal liability or personal responsibility” for the loan , only Bad L ands was responsible for repaying the loan.

¶6 On appeal, Thomas contends that no contract could exist in the absence of a meeting of the minds on the Mattenas’s personal liability for the loan , and thus that the district court erred in ruling that Bad Lands was s olely responsible for repaying the loan. Whether a contract exists is a legalThomas v. Mattena

20150987

- CA 3 2017 UT App 81 determination, and we therefore review a district court’s conclusion as to that issue for correctness. See Cea v. Hoffman , 2012 UT App 101, ¶ 9, 276 P.3d 1178.

¶7 We first address preservation. A n issue is preserved for appeal when it has been presented to the district court in such a way that the district court had the opportunity to address it. Wohnoutka v. Kelley , 2014 UT App 154, ¶ 4, 330 P.3d 762. When

a n issue has not been so preserved, it is usually deemed waived. Id. ¶ 3. “The preservation requirement is based on the premise that, in the interest of orderly pr ocedure, the trial court ought to be given an opportunity to address a claimed error an d, if appropriate, correct it.” Id. (citation and internal quotation marks omitted).

¶8 Here, Thomas claims the “issue was preserved for appeal by the following: Findings of Fact and Conclusions of Law.” This document memorializes the district court’s evidentiary findings as to the underly ing facts and the co urt’s legal conclusion that Thomas “did not carry her burden of proving that any personal liability for the Bad Lands Loan attaches to the Mattenas individually .” But nothing in the ruling suggests that Thomas ever argued to the distric t court that no loan contract existed at all as a result of the parties’ failure to come to a meeting of the minds on the personal

- liability issue. See State v. Kennedy , 2015 UT App 152 , ¶ 21 , 354 P.3d 775 (noting that, to preserve an issue for appeal, “[t ]he appellant must present the legal basis for her claim to the trial court, not merely the underlying facts or a tangentially related claim”); see also Prime Ins. Co. v. Graves , 2016 UT App 23, ¶ 10, 367 P.3d 1029 (same) ; Wohnoutka , 2014 UT App 154, ¶ 8 ( rul ing an issue un pre served where the appellant “takes the evidence introduced in support of his preserved but

un successful contract claim and reweaves the constituent evidentiary threads into a new legal theory”). We therefore conclude that Thomas did not preserve her issue for appeal.Thomas v. Mattena

20150987

- CA 4 2017 UT App 81 ¶9 Thomas asserts that we may nonetheless review her claim pursuant to the plain

- error doctrine. To obtain relief via the plain

- error doctrine, an appellant must “ show the existence of a harmful erro r that should have been obvious to the district
court. ” State v. Waterfield , 2014 UT App 67, ¶ 18, 322 P.3d 1194

.
¶10 Thomas’s appeal rests on her claim that the district court failed to recognize , sua sponte, the legal significance of certain language in the court’s own ruling as drafted by Thomas : specifically, that “there was never a meeting of the minds between the parties as to personal liability or personal responsibility.” Thomas notes that Utah case law “is clear that there must be a meeting of t he mind s to create a contract.” She then asserts that “[t]he issue of personal liability for the loan is one that is integral and important to an agreement. Because there was no meeting of the minds on this issue, the Bad Lands Loan was not an enforceable contrac t.” In short, she claims that a failure to come to an agreement regarding personal liability for a business lo an ren ders the remainder of the loan contract invalid

.
¶11 “It is fundamental that a meeting of the minds on the integral features of an agreement is essential to the formation of

a contract.” Nielsen v. Gold’s Gym , 2003 UT 37, ¶ 11, 78 P.3d 600 (citation and int ernal quotation marks omitted). “A contract may be enforced even though some contract terms may be missing or left to be ag reed upon, but if the essential terms are so uncertain that there is no basis for deciding whether the agreement has been kept or broken, there is no contract.” Id. ¶ 12 ( citation and in ternal quotation marks omitted)

. W e are not aware of any authority hol ding that a personal

- l iability clause is an integral feature or essential term of a business

- loan contract , the absence of which is fatal to the enforceability of the contract. Nor does Thomas refer us to any.

¶12 Moreover, the absence of a personal

- liability clause likely indicates that the parties are satisfied with the default rule

. SeeThomas v. Mattena

20150987

- CA 5 2017 UT App 81 Utah Code Ann. § 48

- 2c

- 601 (LexisNexis 2010) (providing the general rule that “no organizer, member, manager, or employee of a [limited

- liability] company is personally liabl e

. . . for a debt, obligation, or liability of the company ”)

. 1 Like the absence of other ancillary provisions, such as arbitration and a ttorney

- fee clauses, the omission of a personal

- liability clause does not seem to render the contract “so uncertain tha t there is no basis for deciding whether the agreement has been kept or broken.” Nielsen , 2003 UT 37, ¶ 12. But we need not and do not decide this question today, because our review is limited by the plain

- error doctrine.

¶13 Under the plain

- error doctrine, we will only reverse when the appellant has demonstrated “a harmful error that should have been obvious to the district court.” Waterfield , 2014 UT App 67, ¶ 18 . “To establish that the error should have been obvious to the t rial court, the appellant must show that the law governing the error was clear at the time the alleged error was made.” State v. Davis , 2013 UT App 228, ¶ 32, 311 P.3d 538 (brackets, citation, and internal quotation marks omitted). “Thus, an error is not

o bvious if there is no settled appellate law to guide the trial court.” Id. (citation and internal quotation marks omitted).

¶14 On appeal, Thomas bears the burden of identifying supporting authority for the proposition that personal

- liability clauses are integ ral features of business

- loan contract s

. See Utah R. App. 24(a)(9). Her failure to do so suggests that none exists. And, indeed, our independent research has also failed to uncover any such authority. See Giles v. Mineral Resources Int’l,

1 . We note that the promissory note and the disbursement checks identified the recipient of the loan funds as Bad Lands Bow Hunting LLC, which is a limited

- liability company and, of course, exactly the type of entity an individual would create to avoid personal liability.Thomas v. Mattena

20150987

- CA 6 2017 UT App 81 Inc. , 2014 UT App 259, ¶ 12, 338 P.3d 825 (noting that an appellate court is under no obligation to “‘save an appeal by remedying the deficiencies of an appellant’s brief ’ ” (citation omitted)); c f. Cessna Fin. Corp. v. Meyer , 575 P.2d 1048 , 1050

– 51 (Utah 1978) ( holding tha t, where contracting parties had included a personal

- liability provision but left a blank line instead of specifying the limit of such liability, such omission did not affect the validity of the provision or contract). Because there is no settled appellate law as to the dubious proposition that a personal

- liability clause is an integral feature of a business

- loan
contract , Thomas cannot establish the existence of an error that should have been obvious to the district court

. See Davis , 2013 UT App 228, ¶ 32. And in the absence of an obvious error, relief is not available via the plain

- error doctrine. Waterfield , 2014 UT App 67, ¶ 18.

¶15 In sum, Thomas brought suit against Bad Lands and the Mattenas, asserting that they had failed to perform under a
contract. Thomas did not argue to the district court that no contract existed due to the absence of a personal

- liability clause or that such a clause was an integral feature of a business

- loan
contract . The issue was therefore n ot preserved for appeal. And
t he plain

- error exception to the preservation requirement does not apply here, because there is no settled law on this issue.

¶16 Affirmed.