2013 UT App 214

_________________________________________________________



### T HE 

### U TAH 

### C OURT OF 

### A PPEALS

K IRK B LOSCH

, M ARTIN W. M ERRILL

, AND D AVID O’B AGY

, Plaintiffs and Appellants,

v.

N ATIXIS R EAL E STATE C APITAL

, I NC

., Defendant and Appellee.

Opinion

No. 20110315

‐ CA

Filed August 29, 2013

Third District, Salt Lake Department

The Honorable L.A. Dever

No. 070914778

Kathryn Collard, Attorney for Appellants

David K. Isom, Attorney for Appellee

J UDGE M ICHELE M. C HRISTIANSEN authored this Opinion, in

which J UDGES G REGORY K. O RME and S TEPHEN L. R OTH

concurred.

CHRISTIANSEN, Judge:

¶1 Kirk Blosch, Martin W. Merrill, and David O’Bagy appeal

from a jury verdict finding that Blosch was not a third

‐ party

beneficiary of a loan agreement between Natixis Real Estate

Capital, Inc. (Natixis), Schoolhouse Downtown, LLC, and

Schoolhouse Downtown’s principal (Borrower). 1 Blosch also

1 Blosch, Merrill, and O’Bagy are all parties to this appeal.

However, the only issues raised on appeal relate to Blosch’s

purported rights as a third

‐ party beneficiary of the agreement

between Natixis and Borrower. Thus, we refer primarily to

(continued...)Blosch v. Natixis

challenges the trial court’s denial of his pretrial motion for

summary judgment. We affirm.

BACKGROUND

¶2 On March 30, 2006, Natixis and Borrower entered into a loan

agreement (the Loan Agreement) by which Natixis loaned

Borrower $7.8 million. 2 The funds were to be used for the purchase

and improvement of the Pierpont Building located in downtown

Salt Lake City. As required by the Loan Agreement, approximately

$1.2 million of the loaned funds was withheld in a reserve account

(the Escrowed Funds). The Escrowed Funds were to be disbursed

to Borrower once certain conditions outlined in the Loan

Agreement were satisfied. These conditions included the

completion, leasing, and operation of the Ruth’s Chris Steak House

restaurant space in the Pierpont Building.

¶3 In May 2006, Borrower attempted to draw from the

Escrowed Funds, but Natixis’s loan servicer denied Borrower’s

request because the contractual requirements for disbursement of

the Escrowed Funds had not been met. Around that time, Borrower

expressed frustration to Natixis over his inability to access the

Escrowed Funds, but Natixis was unable or unwilling to release the

funds prior to completion of the contractual conditions. After his

1 (...continued)

Blosch as the appellant throughout this opinion. Neither Bor

‐

rower nor any entity owned or controlled by Borrower is a party

to this action.

2 Due to the voluminous record involving non

‐ parties and

transactions not relevant to the claims before this court, “[w]e

limit our discussion to only those background facts necessary to

resolve the issues on appeal.” See Holladay v. Storey

, 2013 UT

App 158, ¶ 2 n.1.

20110315

‐ CA 2013 UT App 214 2Blosch v. Natixis

request to access the Escrowed Funds was refused, Borrower

solicited Blosch to borrow money in order to complete the

restaurant space and free the Escrowed Funds for disbursement.

Borrower represented to Blosch that the Escrowed Funds totaled

$1.5 million and that Borrower would need the loan from Blosch

for only ninety days.

¶4 Blosch agreed to arrange a loan of approximately $1 million

to Borrower provided that Natixis would release the Escrowed

Funds directly to an entity designated by Blosch once the

contractual requirements for disbursement were met. Borrower

arranged with a loan officer at Natixis (the Loan Officer) for the

Escrowed Funds to be paid jointly to Blosch and Borrower, which

required Natixis to “vet” Blosch as a legally permissible payee

under federal law. On July 11, 2006, the Loan Officer emailed to

Borrower a letter (the Joint Check Letter), which read, in relevant

part,

Dear [Borrower]:

This letter confirms [Natixis’s] completion of the

vetting process for Kirk Blosch. Upon satisfaction of

all requirements outlined in the Loan Documents,

[Natixis] will release the escrow funds associated

with the Ruth’s Chris restaurant via a check issued to

both you and Mr. Blosch.

¶5 On July 12, 2006, Borrower executed a promissory note to

Blosch, O’Bagy, and Merrill promising to repay on or before

October 12, 2006, the loan balance of $1,050,000, together with a

loan fee of 15%, for a total repayment of $1,207,500. Any balance

remaining unpaid after October 12, 2006, was subject to a 60%

annual interest rate. Blosch, O’Bagy, and Merrill tendered to

Borrower checks totaling $1,050,000.

¶6 In August 2006, Natixis sold Borrower’s loan to LaSalle

Bank, and Capmark Finance, Inc. (Capmark) became the new

20110315

‐ CA 2013 UT App 214 3Blosch v. Natixis

servicer for the Loan Agreement. Natixis did not communicate to

LaSalle Bank or Capmark that Natixis had agreed to the release of

the Escrowed Funds via joint check to Borrower and Blosch, and

did not provide LaSalle Bank or Capmark with a copy of the Joint

Check Letter.

¶7 On September 12, 2006, Borrower notified Natixis that the

restaurant was in operation and requested guidance on how to

obtain the release of the Escrowed Funds. Natixis directed

Borrower to contact Capmark to arrange for release of the

Escrowed Funds. On October 10, Borrower instructed Capmark to

release the Escrowed Funds via wire transfer to the account of

Wasatch Prime, LLC, another entity owned by Borrower. Capmark

released the Escrowed Funds in full to Wasatch Prime, LLC on

October 18, 2006.

¶8 In November 2006, Blosch contacted Natixis to find out why

he had not received a joint payment of the Escrowed Funds after

the restaurant space was completed. Natixis informed Blosch that

the Escrowed Funds had been wired directly to Borrower. Blosch

then met with Borrower, who informed Blosch that the money had

been used for other purposes and that he was unable to repay the

promissory note.

¶9 On October 15, 2007, Blosch, Merrill, and O’Bagy filed a

complaint against Natixis alleging breach of contract. Blosch

moved for summary judgment, arguing that, as a matter of law, he

was a third

‐ party beneficiary of the Loan Agreement as amended

by the Joint Check Letter. The trial court denied Blosch’s motion,

observing that the Loan Agreement unambiguously precludes

third

‐ party beneficiary claims, and stating, “Whether there was

intent among all parties to modify the Loan, is an issue of fact and

cannot be determined by this Court.”

¶10 The case proceeded to trial in September 2010, and the jury

returned a special verdict finding that Blosch was not a third

‐ party

beneficiary of the Loan Agreement. On December 14, 2010, the trial

20110315

‐ CA 2013 UT App 214 4Blosch v. Natixis

court entered an order dismissing with prejudice all of Blosch,

Merrill, and O’Bagy’s claims against Natixis. Blosch timely filed a

motion for a new trial, arguing that the jury’s verdict was against

both the weight of the evidence and the law, and that the trial court

had erred in instructing the jury regarding the effect of Natixis’s

assignment of the Loan Agreement. However, Blosch’s supporting

memorandum was struck for failure to comply with the Utah Rules

of Civil Procedure, and his motion was denied on March 7, 2011.

Blosch filed his notice of appeal on April 4, 2011.

ISSUES AND STANDARDS OF REVIEW

¶11 As an initial matter, Natixis challenges whether this court

has jurisdiction to hear this appeal. “‘[T]he issue of subject matter

jurisdiction is a threshold issue, which can be raised at any time

and must be addressed before the merits of other claims.’” Robinson

v. Baggett

, 2011 UT App 250, ¶ 12, 263 P.3d 411 (alteration in

original) (quoting Houghton v. Dep’t of Health

, 2005 UT 63, ¶ 16, 125

P.3d 860). “Whether this court has jurisdiction to hear an appeal is

a question of law.” McClellan v. State

, 2012 UT App 316, ¶ 5, 290

P.3d 326 (citation and internal quotation marks omitted). Because

we conclude that we have jurisdiction over this appeal, we address

Blosch’s substantive claims.

¶12 Blosch first argues that the trial court erred in denying his

summary judgment motion. We review “a trial court’s legal

conclusions and ultimate grant or denial of summary judgment for

correctness.” See Orvis v. Johnson

, 2008 UT 2, ¶ 6, 177 P.3d 600

(citation and internal quotation marks omitted). The trial court’s

denial of summary judgment was based upon its interpretation of

the Joint Check Letter and the Loan Agreement. “We accord a trial

court’s interpretation of a contract no deference and review it for

correctness.” See Encon Utah, LLC v. Fluor Ames Kraemer, LLC

, 2009

UT 7, ¶ 11, 210 P.3d 263.

20110315

‐ CA 2013 UT App 214 5Blosch v. Natixis

¶13 Blosch also argues that insufficient evidence supported the

jury’s verdict that Blosch was not a third

‐ party beneficiary of the

Loan Agreement. “In reviewing a jury verdict, we view the

evidence in the light most supportive of the verdict[] and assume

that the jury believed those aspects of the evidence which sustain

its findings and judgment.” Billings v. Union Bankers Ins. Co.

, 918

P.2d 461, 467 (Utah 1996) (citation and internal quotation marks

omitted). “Accordingly, we will upset a jury verdict only upon a

showing that the evidence so clearly preponderates in favor of the

appellant that reasonable people would not differ on the outcome

of the case.” Id. (citation and internal quotation marks omitted).

¶14 Finally, Blosch argues that the trial court erred in instructing

the jury on the effect of Natixis’s assignment of the Loan

Agreement. We review challenges to jury instructions for

correctness, “granting the trial court no deference on its view of the

law.” Id. at 466 (citation omitted).

ANALYSIS

I. This Court Has Jurisdiction To Hear the Appeal.

¶15 Natixis argues that this court does not have jurisdiction to

hear the appeal because Blosch did not timely file a notice of

appeal. Generally, a notice of appeal must be filed within thirty

days after the date of entry of the judgment appealed from. Utah

R. App. P. 4(a). However, “[i]f a party timely files in the trial court

. . . a motion for a new trial under Rule 59,” “the time for all parties

to appeal from the judgment runs from the entry of the order

disposing of the motion.” Id

. R. 4(b).

¶16 Natixis acknowledges that Blosch filed a notice of appeal

within thirty days of the trial court’s order denying his rule 59

motion. Natixis argues, however, that because the trial court struck

the memorandum Blosch submitted in support of his rule 59

motion, the motion failed to comply with Utah Rule of Civil

20110315

‐ CA 2013 UT App 214 6Blosch v. Natixis

Procedure 7(c)’s requirement that all motions be accompanied by

a supporting memorandum. See Utah R. Civ. P. 7(c). Natixis argues

that because the motion was unsupported by a memorandum, it

was “a nullity” and therefore did not toll Blosch’s deadline for a

notice of appeal under rule 4(b).

¶17 We do not agree that Blosch’s motion was a nullity or that

his failure to file a compliant memorandum prevented the tolling

of his time to appeal in this case. Tolling of the time to appeal

under rule 4 is triggered when a party “timely files in the trial

court” one of the motions enumerated under rule 4(b), such as a

rule 59 motion for a new trial. Id. Failure to submit a supporting

memorandum as required by rule 7 of the Utah Rules of Civil

Procedure may render such a motion insufficient. Menzies v.

Galetka

, 2006 UT 81, ¶ 68, 150 P.3d 480. However, “[a] party can

timely move the court for relief despite the fact that its motion may

be insufficient.” Menzies

, 2006 UT 81, ¶¶ 68–69 (holding that a rule

60(b) motion that was unsupported by a memorandum for sixteen

months after its filing was nevertheless timely filed). A trial court

faced with an insufficient motion has the discretion to deny the

motion or to allow the party who filed the motion to supplement

it. Id. ¶ 68.

¶18 Here, Blosch timely moved the trial court for a new trial

under rule 59. While the trial court struck Blosch’s supporting

memorandum for failure to comply with the requirements of the

Utah Rules of Civil Procedure, that decision rendered Blosch’s

motion insufficient, not untimely or a nullity. Notably, Natixis

moved the trial court to strike not just Blosch’s memorandum but

the rule 59 motion in its entirety. However, the trial court struck

only Blosch’s supporting memorandum and did not strike Blosch’s

motion. Instead, the trial court ruled on the motion and denied it.

Blosch’s time to appeal therefore ran “from the entry of the order

disposing of” his rule 59 motion. See Utah R. App. P. 4(b).

¶19 Because we determine that Blosch’s rule 59 motion satisfied

rule 4(b)’s requirements and tolled his time to appeal, we conclude

20110315

‐ CA 2013 UT App 214 7Blosch v. Natixis

that Blosch’s notice of appeal was timely and that we have

jurisdiction to consider the merits of his appeal.

II. The Trial Court Correctly Denied Summary Judgment.

A. This Court May Review the Trial Court’s Denial of

Summary Judgment.

¶20 Blosch first argues that the trial court erred in denying his

summary judgment motion. “Generally, the denial of a motion for

summary judgment is not reviewable on appeal because the

movant has had the opportunity to fully litigate [at trial] the issues

raised in the summary judgment motion[].” ASC Utah, Inc. v. Wolf

Mountain Resorts, LC

, 2013 UT 24, ¶ 12 (alterations in original)

(citation and internal quotation marks omitted). However, “we do

not require parties to reargue at trial legal issues that a trier of fact

cannot decide.” Normandeau v. Hanson Equip., Inc.

, 2009 UT 44, ¶ 14,

215 P.3d 152. Thus, when a legal ruling made on summary

judgment is dispositive of a legal issue for trial, such that no factual

issue at trial could affect the legal determination, we may review

that legal ruling on appeal. See id. ¶¶ 12, 14 (observing that denials

of summary judgment based on legal issues the parties were

effectively foreclosed from litigating at trial are appealable).

¶21 In denying Blosch’s motion for summary judgment, the trial

court explained,

The case law provides that a third

‐ party may

claim contract benefit only if the parties to the

contract clearly express it. Loan Term ¶10.19

unambiguously precludes such third

‐ party claims.

However, the [Joint Check Letter] provides:

This letter confirms [Natixis’s]

completion of the vetting process for

Kirk Blosch. Upon satisfaction of all the

requirements outlined in the Loan

Documents, [Natixis] will release the

20110315

‐ CA 2013 UT App 214 8Blosch v. Natixis

escrow funds associated with the

Ruth’s Chris restaurant via a check

issued to both [Borrower] and Mr.

Blosch.

Whether there was intent among all parties to

modify the Loan, is an issue of fact and cannot be

determined by this Court.

(Citations omitted.) Blosch contends that the trial court denied

his motion for summary judgment based solely on the trial

court’s legal conclusion that it was a question of fact for the

jury whether Natixis and Borrower intended to modify the Loan

Agreement to make Blosch a third

‐ party beneficiary. Blosch argues

that because the trial court never found that the Joint Check Letter

was ambiguous as to the parties’ intent to make Blosch a third

‐

party beneficiary, the trial court erroneously concluded that intent

was a question of fact, rather than a question of law.

¶22 We agree that the trial court’s denial of Blosch’s motion for

summary judgment was based on a purely legal issue. However,

we disagree that the trial court never determined that the Joint

Check Letter was ambiguous. It is well established that “[b]efore

the [trial] court may consider extrinsic evidence of the parties’

intent

. . . it must first conclude that the contract is facially

ambiguous.” Wilson v. Johnson

, 2010 UT App 137, ¶ 8, 234 P.3d 1156

(citing Daines v. Vincent

, 2008 UT 51, ¶ 51, 190 P.3d 1269). If the trial

court determines that the language of an agreement is facially

ambiguous as a matter of law, “the intent of the parties is a

question of fact.” Id. In light of this rule, we interpret the trial

court’s ruling as implicitly finding the Joint Check Letter

ambiguous as a matter of law as to whether the parties intended

that agreement to modify the Loan Agreement so as to make Blosch

a third

‐ party beneficiary. See West Valley City v. Walljasper

, 2012 UT

App 252, ¶ 27, 286 P.3d 948. (“Unless the record indicates

otherwise, we presume that the trial court knew the law.”). As a

result of its ruling, the trial court denied summary judgment

20110315

‐ CA 2013 UT App 214 9Blosch v. Natixis

because the disputed material facts concerning the intent of the

Joint Check Letter could only be determined by the jury, and

Blosch was therefore not entitled to judgment as a matter of law.

Thus, the denial of Blosch’s motion for summary judgment was

based on the trial court’s legal determination that the Joint Check

Letter is facially ambiguous as to the parties intent, and we may

review this ruling on appeal.

¶23 Our determination that we may review the trial court’s

ruling in this case is consistent with our supreme court’s reasoning

in Normandeau

, 2009 UT 44, which explained that appellate courts

may review a summary judgment ruling based on facts and legal

theories the moving party was foreclosed from arguing at trial. Id.

¶ 7. Because “[p]urely legal issues are not decided by a trier of

fact,” parties may be effectively foreclosed from raising legal issues

at trial that were decided by the trial court at the summary

judgment stage. Id. ¶ 14. In Normandeau

, our supreme court cited

with approval cases reviewing pretrial denials of summary

judgment motions in which the trial court had made purely legal

rulings regarding, for example, accord and satisfaction, id. ¶ 12

(citing Estate Landscape & Snow Removal Specialists, Inc. v. Mountain

States Tel. & Tel. Co.

, 844 P.2d 322, 325–26 (Utah 1992)), and the

existence of a contract as a matter of law, id. ¶ 13 (citing Prince,

Yeates & Geldzahler v. Young

, 2004 UT 26, ¶ 13, 94 P.3d 179). The

supreme court observed that it would have been futile for the

parties to litigate these issues at trial because “both the existence of

an accord and satisfaction and the existence of a contract in these

cases were legal issues decided by the court.” Id. ¶ 14.

¶24 Here, the trial court’s determination that the Joint Check

Letter is facially ambiguous as a matter of law was dispositive of

the issue of ambiguity. It would have been futile for Blosch to

attempt to litigate whether the Joint Check Letter was facially

ambiguous at trial because the jury could not decide this purely

legal issue. See id. ¶ 12. In other words, while the trial court denied

Blosch’s motion for summary judgment because its legal ruling on

facial ambiguity meant there were disputed issues of material fact

20110315

‐ CA 2013 UT App 214 10Blosch v. Natixis

as to the parties’ intent, Blosch was effectively foreclosed by that

ruling from litigating the issue of ambiguity at trial. We may

therefore review the trial court’s legal ruling that was the reason for

its denial of Blosch’s summary judgment motion. See id. ¶ 14.

B. The Trial Court Did Not Err in Denying Blosch’s Motion for

Summary Judgment, Because the Joint Check Letter Is

Facially Ambiguous as to the Parties’ Intent To Make Blosch

a Third

‐ Party Beneficiary of the Loan Agreement.

¶25 As explained above, because Blosch’s appeal from the denial

of his summary judgment motion comes after trial, our review

of that denial is limited solely to the legal issue on which the

trial court ruled in denying Blosch’s motion, i.e., whether the

Joint Check Letter was, as a matter of law, facially ambiguous

with respect to the parties’ intent. 3 “A contractual term or

provision is ambiguous if it is capable of more than one

reasonable interpretation because of uncertain meanings of terms,

missing terms, or other facial deficiencies.” Strohm v. ClearOne

Communications, Inc.

, 2013 UT 21, ¶ 34 (citation and internal

quotation marks omitted). “[F]acial ambiguity with regard to the

language of the contract

. . . is a question of law, while the intent of

the parties is a question of fact.” Wilson

, 2010 UT App 137, ¶ 8.

¶26 With respect to Blosch’s status as a third

‐ party beneficiary

of the Loan Agreement, “[a] third party may claim a contract

benefit only if the parties to the contract clearly express an

intention to confer a separate and distinct benefit on the third

party.” Bybee v. Abdulla

, 2008 UT 35, ¶ 36, 189 P.3d 40 (citation and

internal quotation marks omitted). For the Joint Check Letter to

unambiguously show that the parties intended to make Blosch a

3 We note that Blosch frames these issues somewhat differ

‐ ently in his arguments to this court. However, our conclusion

that the Joint Check Letter is facially ambiguous is dispositive of

the challenges Blosch raises to the trial court’s denial of his

summary judgment motion.

20110315

‐ CA 2013 UT App 214 11Blosch v. Natixis

third

‐ party beneficiary of the Loan Agreement, “[t]he contract must

be undertaken for the plaintiff’s direct benefit and the contract itself

must affirmatively make this intention clear.” See SME Indus., Inc.

v. Thompson, Ventulett, Stainback & Assocs., Inc.

, 2001 UT 54, ¶ 50, 28

P.3d 669 (emphasis added).

¶27 The operative language of the Joint Check Letter provides,

“Upon satisfaction of all requirements outlined in the Loan

Documents, [Natixis] will release the escrow funds associated with

the Ruth’s Chris restaurant via a check issued to both [Borrower]

and Mr. Blosch.” Blosch argues that this language unambiguously

demonstrates Natixis’s and Borrower’s intent to make Blosch a

third

‐ party beneficiary of the Loan Agreement. However, we see

nothing in the language of the Joint Check Letter from which

Natixis and Borrower’s intent in entering into the agreement can be

ascertained. Whether or not Natixis and Borrower intended the

Joint Check Letter for Blosch’s “direct benefit,” the language of the

Joint Check Letter itself does not “affirmatively make this intention

clear.” See id. ¶ 50. This “facial deficiency” is highlighted when

compared with joint payment agreements held to unambiguously

create a third

‐ party beneficiary status.

¶28 In Gender Machine Works, Inc. v. Eidal International Sales Corp.

,

929 P.2d 1033 (Or. Ct. App. 1996), plaintiff Gender Machine Works

(Gender) was subcontracted by Eidal International Sales

Corporation (Eidal) to manufacture a shredder for sale to

defendant Archer Daniels Midland Company (ADM). Id. at 1036.

In order to satisfy a preexisting debt to Gender, and to compensate

Gender for manufacturing the shredder, Eidal arranged with ADM

for payment on the shredder to be made payable to both Eidal and

Gender. Id. at 1036 & n.2. The operative terms of the agreement at

issue there read,

Eidal’s joint venture manufacturing partner, Gender

Machine is processing a substantial amount of work

on this project (Purchase Order B89109200083RP)

and this letter is sent to your group informing you

20110315

‐ CA 2013 UT App 214 12Blosch v. Natixis

that they are authorized by Eidal to submit an

invoice with Eidal allowing them to collect the sum

of $225,000.00 for work performed by their group on

this project.

Eidal and Gender will invoice jointly with one

invoice with payment to be made by ADM in both

Gender’s and Eidal’s names.

Due to our financing needs, we are requesting this

acknowledgment by your group today so that we can

get started on this expedited project. We would like

to start today.

Id. at 1036 (internal quotation marks omitted). ADM signed the

agreement and confirmed its understanding that payment should

be made to both Eidal and Gender. Id. After the shredder was

delivered, Eidal invoiced ADM without reference to Gender, and

ADM paid the full amount in a check made payable to Eidal only.

Id. Gender brought a third

‐ party beneficiary breach of contract

claim against ADM. Id. at 1037. The Oregon Court of Appeals

determined that the parties’ intent to benefit Gender by the

agreement was unambiguous from the language of the agreement

because it stated both that Gender was performing substantial

work on the shredder which ADM had purchased and that

payment was therefore to be paid jointly to Eidal and Gender. Id.

at 1039.

¶29 In contrast, in Eastern Aviation Group, Inc. v. Airborne Express,

Inc

., 8 Cal. Rptr. 2d 355 (Cal. Ct. App. 1992), plaintiff Eastern

Aviation Group (EAG) was an investor in Burbank Aeronautical

Corporation (BAC) and was entitled by contract between EAG and

BAC to 50% of the profits generated by BAC’s sales of aircraft noise

reduction systems. Id. at 356. BAC entered into a contract to sell

such systems to ABX Air, Inc. (ABX), with a provision stating, “‘All

payments hereunder shall be in good U.S. funds and shall not be

credited to the account of the Purchaser until such funds are

20110315

‐ CA 2013 UT App 214 13Blosch v. Natixis

cleared in the Designated Account, which shall be designated in

writing jointly by BAC and [EAG]

. . . .’” Id. at 357 (omission in

original). ABX allegedly made payments directly to BAC, rather

than into the jointly designated account, and EAG attempted to sue

ABX for violating the sales contract between BAC and ABX on the

theory that EAG was made a third

‐ party beneficiary by the joint

payment provision. Id. The California Court of Appeal observed,

The fact that he is incidentally named in the contract,

or that the contract, if carried out according to its

terms, would inure to his benefit, is not sufficient to

entitle him to demand its fulfillment. It must appear

to have been the intention of the parties to secure to

him personally the benefit of its provisions.

Id. (citation and internal quotation marks omitted). The court held

that ABX’s obligation was only to BAC—the provision directing

payments to the joint account was merely to accommodate BAC,

not BAC’s creditors—and EAG was therefore not a third

‐ party

beneficiary of the sales contract. Id. at 358.

¶30 We conclude that the Joint Check Letter is ambiguous as to

whether the intent of the parties in entering into the agreement was

to directly benefit Blosch as a third

‐ party beneficiary. The operative

language of the Joint Check Letter contains no expression of intent

to benefit Blosch, and instead merely directs that “[u]pon

satisfaction of all requirements outlined in the Loan Documents,

[Natixis] will release the escrow funds associated with the Ruth’s

Chris restaurant via a check issued to both [Borrower] and Mr.

Blosch.” By comparison, the language of the joint payment

agreement in Gender demonstrated the parties’ intent to enter into

the agreement to “allow[ Gender] to collect the sum of $225,000.00

for work performed by their group on this project,” due to the

“substantial amount of work” performed by Gender, and the

“financing needs” of Eidal. 929 P.2d at 1036. Absent a similarly

specific and clear expression of the parties’ intent to benefit a third

party by entering into the agreement, we cannot read the plain

20110315

‐ CA 2013 UT App 214 14Blosch v. Natixis

language of the Joint Check Letter, which merely directs the

manner in which payment under a contract shall be made, as

clearly expressing an intent by the parties to assume an enforceable

obligation to the third

‐ party joint payee. See Eastern Aviation

, 8 Cal.

Rptr. 2d at 358; Bybee

, 2008 UT 35, ¶ 36. While there may be other

evidence extrinsic to the Joint Check Letter from which the parties’

intent could be determined, that is a factual question and is

inappropriate for decision on summary judgment. Thus, the trial

court properly concluded that the Joint Check Letter was

ambiguous as a matter of law, and the trial court’s denial of

summary judgment was therefore correct.

III. Sufficient Evidence Supported the Jury’s Verdict.

¶31 Blosch next claims that the evidence presented at trial was

legally insufficient for the jury to determine that Blosch was not a

third

‐ party beneficiary. A party challenging the sufficiency of the

evidence “has the heavy burden of marshaling the evidence in

support of the verdict and showing that the evidence, viewed in

the light most favorable to the verdict, is insufficient.” State v.

Maese

, 2010 UT App 106, ¶ 16, 236 P.3d 155 (citation and internal

quotation marks omitted). “The existence of conflicting evidence,

alone, does not justify overturning a verdict for insufficient

evidence because ‘we assume that the jury believed those facts that

support its verdict.’” Stevensen 3rd East, LC v. Watts

, 2009 UT App

137, ¶ 49, 210 P.3d 977 (quoting Canyon Country Store v. Bracey

, 781

P.2d 414, 417 (Utah 1989)).

¶32 Blosch primarily attacks the sufficiency of the Loan Officer’s

testimony at trial regarding the Loan Officer’s knowledge and

intent—and therefore Natixis’s knowledge and intent—in drafting

the Joint Check Letter. Blosch argues that this evidence of Natixis’s

intent is legally insufficient for the jury to find that Blosch was not

a third

‐ party beneficiary of the Loan Agreement because the

language of the Joint Check Letter unambiguously establishes

Natixis and Borrower’s intent to make Blosch a third

‐ party

beneficiary, and Natixis and Borrower had the right to modify the

20110315

‐ CA 2013 UT App 214 15Blosch v. Natixis

provision of the Loan Agreement prohibiting third

‐ party

beneficiaries. We have determined that the Joint Check Letter did

not unambiguously establish Natixis and Borrower’s intent to

make Blosch a third

‐ party beneficiary of the Loan Agreement.

Therefore, because the Joint Check Letter is ambiguous as to the

parties’ intent, evidence that Natixis did not intend to make Blosch

a third

‐ party beneficiary of the Loan Agreement, if believed by the

jury, would be sufficient to support the jury’s verdict.

¶33 Here, the Loan Officer’s testimony that he believed the Loan

Agreement prohibited third

‐ party beneficiaries, that he did not

intend to modify the Loan Agreement by entering into the Joint

Check Letter, that he drafted the Joint Check Letter to

accommodate Borrower, and that he did not know that Borrower

had asked for the Joint Check Letter to be drafted in order to

facilitate a loan from Blosch, all tend to demonstrate that Natixis

did not intend to make Blosch a third

‐ party beneficiary of the Loan

Agreement. Additionally, the Loan Officer’s testimony that he

believed Borrower could revoke the Joint Check Letter or otherwise

direct the disbursement of funds notwithstanding the Joint Check

Letter, can be understood to show that Natixis did not believe or

intend the Joint Check Letter to create in Blosch an enforceable

right to receive payment of the Escrowed Funds from Natixis once

the terms of the Loan Agreement were satisfied. Based on this

evidence regarding Natixis’s intent, we do not believe that the

evidence so clearly preponderates against the jury’s verdict that

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‐ CA 2013 UT App 214 16Blosch v. Natixis

reasonable people could not differ on the outcome of the case. 4 See

Watts

, 2009 UT App 137, ¶ 26.

¶34 Because we conclude that there was sufficient evidence for

the jury to find that Natixis did not intend to make Blosch a third

‐

party beneficiary of the Loan Agreement, we affirm the jury’s

verdict that Blosch was not a third

‐ party beneficiary of the Loan

Agreement.

IV. Any Error in the Jury Instruction Was Harmless.

¶35 Finally, Blosch argues that the trial court erred in instructing

the jury on the effect of Natixis’s assignment of the Loan

Agreement. “To prevail on an appeal based on instructions to the

jury, this court must find both that the instruction was inaccurate

and that there is not a mere possibility, but a reasonable likelihood

that the error affected the result.” Stevensen 3rd East, LC v. Watts

,

2009 UT App 137, ¶ 28, 210 P.3d 977 (citation and internal

quotation marks omitted). Thus, even if the jury instruction was

legally incorrect, we will reverse “only if [our] confidence in the

jury’s verdict is undermined.” Wilson v. IHC Hosps., Inc

., 2012 UT

43, ¶ 24, 289 P.3d 369 (alteration in original) (citation and internal

quotation marks omitted).

¶36 The challenged jury instruction (Instruction 15) reads,

“Whether an assignment of a contract includes an assumption of

4 Blosch also argues that the Loan Officer’s testimony that

Natixis sold the Loan Agreement to another lender cannot sup

‐

port the jury’s verdict that Blosch was not a third

‐ party benefi

‐ ciary of the Loan Agreement. However, the jury never reached

the issue of whether Natixis’s assignment of the Loan Agreement

to another lender was a defense to Blosch’s claims, and the jury

did not need to consider the Loan Officer’s testimony on this

point to determine that Blosch was not a third

‐ party beneficiary

of the Loan Agreement.

20110315

‐ CA 2013 UT App 214 17Blosch v. Natixis

liabilities depends on the terms of the assignment and the parties’

intent.” Blosch argues that Instruction 15 fails to instruct the jury

that “an assignment does not relieve the assignor of duties and

obligations unless otherwise stated” and that such an instruction

is compelled by Winegar v. Froerer Corp.

, 813 P.2d 104 (Utah 1991).

See id. at 107–08 (explaining the legal distinction between

assignment of rights and delegation of obligations under a

contract). However, assuming without deciding that the jury

instruction was erroneous, Blosch must demonstrate a “reasonable

likelihood that the error affected the result” to justify reversal.

Watts

, 2009 UT App 137, ¶ 28.

¶37 Blosch recognizes that because the jury determined that he

was not a third

‐ party beneficiary of the Loan Agreement, it never

reached the issue of whether Natixis’s assignment of the Loan

Agreement to another lender was a defense to Blosch’s claims.

Because the jury did not reach this issue, any error in Instruction 15

could not have affected the result with respect to the effect of the

assignment. Blosch instead argues that he was prejudiced by errors

in Instruction 15 because Natixis used the instruction in its closing

argument “to mislead the jury to believe that, as a result of

Natixis’s purported sale and assignment of [the Loan Agreement],

Natixis ceased to have any obligation to Blosch under the Joint

Check Letter, such that Blosch was not a third party beneficiary of

any agreement between Natixis and [Borrower].”

¶38 We do not agree that Natixis used Instruction 15 to mislead

the jury. In its closing argument, Natixis argued that even if the

jury found that Blosch had established the elements of his claim,

the assignment of the Loan Agreement would nevertheless serve

as a defense for Natixis against Blosch’s claims. In its only specific

reference to Instruction 15, Natixis argued only that the Loan

Agreement “made it absolutely clear” that assignment of

obligations was contemplated and that the assignee therefore had

all the responsibilities and rights under the Loan Agreement.

Nothing in these statements was misleading as to whether Blosch

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‐ CA 2013 UT App 214 18Blosch v. Natixis

was a third

‐ party beneficiary of the Loan Agreement, and Natixis

did not argue that the jury could find that Blosch was not a third

‐

party beneficiary as a result of the assignment of the Loan

Agreement. Under these circumstances, there is no reasonable

likelihood that Natixis’s argument, to the extent it was based on the

allegedly erroneous jury instruction, affected the jury’s verdict that

Blosch was not a third

‐ party beneficiary of an agreement. 5 See id

.

Because our confidence in the verdict is not undermined, we

decline to reverse on this basis.

CONCLUSION

¶39 We have jurisdiction to hear this appeal because Blosch

timely filed a rule 59 motion with the trial court, effectively tolling

his time to appeal. Our review of the denial of Blosch’s summary

judgment motion is limited to the legal ruling that the Joint Check

Letter was ambiguous, and we determine that the trial court did

not err in so ruling. Blosch has not demonstrated that the evidence

was insufficient to sustain the jury’s verdict that he was not a third

‐

party beneficiary of the Loan Agreement. Nor has he demonstrated

that there is a reasonable likelihood that any claimed error in the

jury instructions affected the jury’s verdict.

¶40 Affirmed.

5 Blosch also argues that the trial court erred by refusing to

instruct the jury that “[t]he fact Natixis sold [Borrower’s] loan

obligation to a third party is not a defense to any of Plaintiff’s

claims.” However, for the same reasons explained previously, see

supra ¶¶ 37–38, there is no likelihood that this refusal, even if

erroneous, affected the jury’s verdict.

20110315

‐ CA 2013 UT App 214 19