2019 UT App 146

THE UTAH COURT OF APPEALS

1600 BARBERRY LANE 8 LLC AND 1600 BARBERRY LANE 9 LLC,

Appellants,

v.

COTTONWOOD RESIDENTIAL OP LP, COTTONWOOD CAPITAL 

PROPERTY MANAGEMENT II LLC, COTTONWOOD CAPITAL PROPERTY 

MANAGEMENT INC., AND DANIEL SHAEFFER,

Appellees.

Opinion

No. 20180105-CA

Filed August 22, 2019

Third District Court, Salt Lake Department

The Honorable Robert P. Faust

No. 170904221

Kenneth J. Catanzarite and Andrew G. Deiss, 

Attorneys for Appellants

Matthew L. Lalli, Michael A. Gehret, W. Danny

Green, and Henry H. Oh, Attorneys for Appellees

JUDGE DIANA HAGEN authored this Opinion, in which 

JUDGES DAVID N. MORTENSEN and JILL M. POHLMAN concurred.

HAGEN, Judge:

¶1 Plaintiffs 1600 Barberry Lane 8 LLC and 1600 Barberry 

Lane 9 LLC (the Owners), two tenant-in-common owners of an 

apartment complex in Georgia (the Property), appeal the district 

court’s dismissal of their amended complaint. The Owners sued 

Cottonwood Residential OP LP, Cottonwood Capital Property 

Management II LLC, Cottonwood Capital Property Management

Inc., and Daniel Shaeffer (collectively, Cottonwood) for breach of 

fiduciary duty or aiding and abetting breach of fiduciary duty

and breach of contract or tortious interference with a contract. 
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The Owners’ claims arise out of the property management 

agreement (the Agreement) between the Owners and Todd 

Mikles and Daymark Residential and Asset Management 

(collectively, Daymark),1 who contracted to provide property 

and asset management services for the Property. The Owners

assert that Cottonwood breached the Agreement and its 

fiduciary duty to the Owners by charging fees that exceeded 

market rates for property and asset management services or,

alternatively, that Cottonwood induced or aided and abetted 

Daymark in doing so. We conclude that the Owners have not 

stated a claim for breach of fiduciary duty because the 

Agreement does not give rise to a fiduciary duty on behalf of 

either Daymark or Cottonwood with respect to the fees they 

charged for their services. And because the Agreement 

contained no provision limiting management fees to market 

value, we conclude that neither Cottonwood nor Daymark 

breached the Agreement by charging fees that allegedly 

exceeded market rate. Accordingly, we affirm the district court’s 

dismissal of the amended complaint for failure to state a claim 

upon which relief could be granted.

BACKGROUND2

¶2 In 2008, the Owners each acquired a 1.478% interest in the 

Property, which was a “312 unit garden apartment community”

 

1. The property manager listed in the Agreement was Grubb 

& Ellis Company, which later became Daymark. The Owners 

have filed suit against Daymark in another court, but Daymark

was not named as a defendant in this action and is not a party.

2. “On appeal from a motion to dismiss, we review the facts as 

they are alleged in the complaint.” Ho v. Jim’s Enters., Inc., 2001 

UT 63, ¶ 2, 29 P.3d 633.
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20180105-CA 3 2019 UT App 146

located in a suburb of Atlanta, Georgia. At that time, the Owners

entered into the Agreement with Daymark for property and 

asset management services relating to the Property. The 

Agreement contained a choice of law provision stating that any 

disputes arising under the Agreement would be governed by 

Georgia law.3 In relevant part, the Agreement provided: 

2.1 Status of Property Manager. The [Owners] and 

[Daymark] do not intend to form a joint venture, 

partnership or similar relationship. Instead, the 

parties intend that [Daymark] shall act solely in the 

capacity of an independent contractor for [the 

Owners]. Nothing in [the] Agreement shall cause 

[Daymark] and [the Owners] to be joint venturers 

or partners of each other, and neither shall have the 

power to or obligate the other party by virtue of 

[the] Agreement, except as expressly provided in 

this Agreement. Nothing in [the] Agreement shall 

deprive or otherwise affect the right of either party 

to own, invest in, manage, or operate, or to conduct 

business activities which compete with, the 

Property. . . .

2.2 Management. [Daymark] shall be the sole and 

exclusive manager of the Property to act on behalf 

of [the Owners] and shall manage, operate and 

maintain the Property in an efficient, economic, 

and satisfactory manner and shall manage the 

 

3. The parties agree that under the Agreement’s choice of law 

provision, Georgia law governs the substance of the Owners’ 

claims. While we apply Georgia law “to the substantive issues 

presented in this case, we still follow our own rules of 

procedure.” Waddoups v. Amalgamated Sugar Co., 2002 UT 69, 

¶ 20, 54 P.3d 1054.
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20180105-CA 4 2019 UT App 146

performance of everything reasonably necessary 

for the proper operation of the Property for the 

tenants thereof . . . [Daymark] shall perform all 

services in a diligent and professional manner . . . . 

. . . .

2.14 Right to Subcontract Property Management 

Functions. [Daymark] reserves the right, in its sole 

discretion, to subcontract some or all of the 

property management functions described herein 

to local property managers and certain other 

parties. However, except as expressly provided 

herein, the fees to be paid to [Daymark] under [the]

Agreement are inclusive of fees payable to such 

third parties . . . . 

. . . .

9.1 Property Management Fee. [Daymark], or an 

affiliate, shall receive, for its services in managing 

the Property in accordance with the terms of [the]

Agreement, a monthly management fee . . . and a 

monthly asset management fee . . . . The Property 

Management Fee shall be up to three percent (3%) 

of Gross Revenues . . . and the Asset Management 

Fee shall be up to two percent (2%) of Gross 

Revenues . . . . The Property Management Fee is set 

forth in the annual Budget approved by [the 

Owners] in accordance with Section 2.5 hereof . . . . 

. . . .

11. Conflicts. [Daymark] shall not deal with or 

engage, or purchase goods or services from, any 

subsidiary or affiliated company of [Daymark] in 
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connection with the management of the Property 

for amounts above market rates . . . .

. . . .

13.1 Assignment. [Daymark] may not assign [the]

Agreement without the prior written consent of 

each of [the Owners] which consent may be 

withheld in each [of the Owner’s] sole and absolute 

discretion . . . .

Section 2.5 also provided that Daymark would prepare and 

submit to the Owners “an initial capital and operating budget . . . 

for the promotion, operation, leasing . . . , repair, maintenance 

and improvement of the Property” for each calendar year, which 

the majority of the Owners must approve.

¶3 In October 2012, Daymark announced that it had decided 

to focus its efforts on its commercial-office-property portfolio 

and recommended to the Owners that Cottonwood take over 

management services for the Property. The Owners

“acquiesced” and allowed Cottonwood to assume the role of 

asset and property manager for the Property. But they allege that 

they would not have consented to this change if Daymark had 

disclosed that the Agreement’s asset and property manager fees

exceeded the fair market rate for the services. The Owners allege 

that the excessively high fees accounted for Cottonwood’s

willingness to purchase the Agreement from Daymark for $8 

million.4

 

4. The Owners allege that Daymark sold the Agreement to 

Cottonwood and that Cottonwood thereby “subsumed from 

[Daymark] all of their obligations in the [Agreement].” In ruling 

on the motion to dismiss, the district court considered the 

(continued...)
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¶4 In June 2017, the Owners filed a complaint against 

Cottonwood, alleging that Cottonwood had breached a fiduciary 

duty it owed to the Owners or, in the alternative, aided and 

abetted Daymark in the breach of its fiduciary duty. Specifically, 

the Owners alleged that Daymark had a fiduciary duty to 

disclose that transferring the Agreement to Cottonwood was not 

in the Owners’ best interests because it would allow 

Cottonwood to continue collecting above-market fees. The 

complaint alleged that Cottonwood both aided and abetted 

Daymark’s breach and was “directly liable . . . as the successor 

fiduciary” to Daymark for failing to disclose facts that would 

have led the Owners to discover that they were being 

overcharged.

¶5 Under rule 12(b)(6) of the Utah Rules of Civil Procedure,

Cottonwood moved to dismiss the Owners’ action for failure to 

state a claim upon which relief can be granted, to which the 

Owners responded by filing an amended complaint. In their 

amended complaint, the Owners again asserted their fiduciary 

duty claim and added two alternative claims: breach of contract 

and interference with contract. In their breach of contract claim, 

 

(...continued)

contract between Daymark and Cottonwood, which the Owners 

did not attach to or expressly reference in their pleading, and 

concluded that Daymark did not assign the Agreement to 

Cottonwood but rather engaged Cottonwood as a subcontractor. 

The Owners allege that the district court improperly considered 

the contract between Daymark and Cottonwood without 

converting the motion to dismiss to one for summary judgment. 

See Utah R. Civ. P. 12(b). We need not decide whether this was 

error, because we affirm the district court without regard to the 

contract between Daymark and Cottonwood. In other words, 

our analysis does not depend on whether Cottonwood was an 

assignee of or a subcontractor under the Agreement.
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the Owners alleged that the fees under the Agreement “were 

capped at the lesser of market value for the actual services 

provided or for the maximum listed fee” and that Cottonwood 

breached the Agreement by “charging and continuing to 

overcharge[] asset and property management fees in excess of 

fair value.” Alternatively, the Owners alleged that, by paying 

Daymark $8 million in “exchange for all future property 

management and asset management fees at rates in excess of fair 

value,” Cottonwood “improperly induced” Daymark to breach 

the provisions of the Agreement that allegedly capped fees “at 

the lesser of market value or the maximum listed fee.”

¶6 In response to the Owners’ amended complaint, 

Cottonwood filed another motion to dismiss for failure to state a 

claim. The Owners opposed that motion, and the district court 

heard argument on it. At argument, Cottonwood contended that, 

as a matter of Georgia law, a property manager does not “owe a 

fiduciary duty to forego enjoying the benefits of the bargain that 

the parties struck in a written property management 

agreement.” Because the Owners had not alleged that Daymark 

and Cottonwood charged more than the negotiated fees set forth 

in the Agreement, Cottonwood also argued that the Owners’ 

allegations did not amount to either a breach of contract or a 

breach of fiduciary duty.

¶7 The district court granted Cottonwood’s motion to 

dismiss on a number of alternative grounds. In granting the

motion, the district court determined, among other things, that 

Cottonwood did not owe the Owners a fiduciary duty, because 

the Agreement between the parties did not give rise to a 

confidential relationship under Georgia law. The district court 

also ruled that the Owners could not state a claim for breach of 

contract or interference with contract based on the alleged 

practice of charging above-market rates, because nothing in the 

Agreement limited the property and asset management fees to 

market rate. The Owners appeal.
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ISSUE AND STANDARD OF REVIEW

¶8 The Owners contend that the district court erred in 

granting Cottonwood’s motion to dismiss, arguing that the 

amended complaint contained sufficient allegations to sustain 

claims of breach of contract, tortious interference with a contract, 

and breach of and aiding and abetting the breach of fiduciary 

duty.

5 “We review a decision granting a motion to dismiss for 

correctness, granting no deference to the decision of the district 

court,” Bylsma v. R.C. Willey, 2017 UT 85, ¶ 10, 416 P.3d 595

(quotation simplified), and “likewise review the district court’s 

subsidiary legal determinations for correctness,” Fehr v. Stockton, 

2018 UT App 136, ¶ 8, 427 P.3d 1190.

 

5. The Owners include two other issues in their statement of the 

issues on appeal. Their second issue—whether the district court 

erred in denying the Owners’ motion for leave to amend the 

complaint a second time—is mentioned only in the statement of 

issues on appeal. The issue is never mentioned again in the 

Owners’ opening brief and accordingly, we do not reach it. See

Utah Physicians for a Healthy Env’t v. Executive Dir. of the Utah 

Dep’t of Env’tl Quality, 2016 UT 49, ¶ 27, 391 P.3d 148 (“A party 

may not dump the burden of argument and research on the 

appellate court.” (quotation simplified)) The Owners’ third issue

is whether the district court erred in failing to convert 

Cottonwood’s motion to dismiss into a motion for summary 

judgment because the court considered material outside the 

pleadings. As mentioned, supra note 4, it is unnecessary to reach 

that issue because we affirm solely on the basis of the complaint 

and the documents attached to the complaint. See Oakwood 

Village LLC v. Albertsons, Inc., 2004 UT 101, ¶ 12, 104 P.3d 1226 

(“If a court does not exclude material outside the pleadings and 

fails to convert a rule 12(b)(6) motion to one for summary 

judgment, it is reversible error unless the dismissal can be 

justified without considering the outside documents.”).
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20180105-CA 9 2019 UT App 146

ANALYSIS

¶9 When reviewing a dismissal under rule 12(b)(6) of the 

Utah Rules of Civil Procedure, “our inquiry is concerned solely 

with the sufficiency of the pleadings, and not the underlying 

merits of the case.” Oakwood Village LLC v. Albertsons, Inc., 2004 

UT 101, ¶ 8, 104 P.3d 1226 (quotation simplified). “A Rule 

12(b)(6) motion to dismiss admits the facts alleged in the 

complaint but challenges the plaintiff’s right to relief based on 

those facts.” Id. (quotation simplified). Accordingly, “we accept 

the plaintiff’s description of facts alleged in the complaint to be 

true, but we need not accept extrinsic facts not pleaded nor need 

we accept legal conclusions in contradiction of the pleaded 

facts.” America West Bank Members, LC v. State, 2014 UT 49, ¶ 7, 

342 P.3d 224 (quotation simplified). To survive a rule 12(b)(6) 

motion, a complaint must “allege sufficient facts . . . to satisfy 

each element” of every claim. Id. ¶ 15 (quotation simplified).

¶10 The Owners maintain that they sufficiently pleaded facts 

supporting claims of breach of fiduciary duty or aiding and 

abetting a breach of fiduciary duty, breach of contract, and 

tortious interference with a contract. We affirm the court’s 

dismissal of all three claims on the following grounds: (1) the 

Owners failed to state a claim for breach of fiduciary duty 

because the Agreement did not create a fiduciary duty with 

respect to fees; and (2) the Owners failed to state a claim for

either breach of contract or tortious interference with a contract 

because the allegation that Cottonwood and Daymark charged

above-market rates, if true, would not constitute a breach of the 

Agreement.

I. Fiduciary Duty

¶11 The Owners argue that Cottonwood breached its 

fiduciary duty to the Owners by charging above-market 

property and asset management fees without disclosing that 
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20180105-CA 10 2019 UT App 146

those fees were above market value. The Owners further allege 

that Cottonwood aided and abetted Daymark’s breach of the 

same fiduciary duty by paying Daymark $8 million in exchange 

for allowing Cottonwood to perform the services for the same 

fees under the Agreement. However, because the Agreement 

does not create a fiduciary duty with respect to fees, the Owners 

have failed to state a claim under either theory.

¶12 Under Georgia law, to state a claim for breach of fiduciary 

duty, the Owners must allege facts that demonstrate “the 

existence of a fiduciary duty,” “breach of that duty,” and 

damages. Ansley Marine Constr., Inc. v. Swanberg, 660 S.E.2d 6, 9 

(Ga. Ct. App. 2008) (quotation simplified). To state a claim for 

aiding and abetting breach of fiduciary duty, the Owners must 

allege facts that demonstrate Cottonwood, “through improper 

action or wrongful conduct and without privilege,” purposely, 

with malice, with the intent to injure, and “with the knowledge 

that [Daymark] owed [the Owners] a fiduciary duty” acted to 

procure a breach of Daymark’s fiduciary duty to the Owners, 

and that Cottonwood’s actions “procured” Daymark’s breach, 

resulting in damages. See Insight Tech., Inc. v. FreightCheck, LLC, 

633 S.E.2d 373, 379 (Ga. Ct. App. 2006). Importantly, under either 

theory, the existence of a fiduciary duty is a necessary element of 

the claim.

¶13 Fiduciary duties arise from confidential relationships, 

including those created by contract. See Douglas v. Bigley, 628 

S.E.2d 199, 204 (Ga. Ct. App. 2006). By statute, Georgia defines 

confidential relationships as follows:

Any relationship shall be deemed confidential, 

whether arising from nature, created by law, or 

resulting from contracts, where one party is so 

situated as to exercise a controlling influence over 

the will, conduct, and interest of another or where, 

from a similar relationship of mutual confidence, 
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20180105-CA 11 2019 UT App 146

the law requires the utmost good faith, such as the 

relationship between partners, principal and agent, 

etc.

Ga. Code Ann. § 23-2-58 (LexisNexis 2019). “The mere fact that 

one reposes trust and confidence in another does not create a 

confidential relationship . . . and the burden is upon the party 

asserting the existence of such relationship to affirmatively show 

the same.” Allen v. Hub Cap Heaven, Inc., 484 S.E.2d 259, 264 (Ga. 

Ct. App. 1997) (quotation simplified); see also Parello v. Maio, 494 

S.E.2d 331, 333 (Ga. 1998) (noting that “the mere circumstance 

that two people have come to repose a certain amount of trust 

and confidence in each other as the result of business dealings is 

not, in and of itself, sufficient to find the existence of a 

confidential relationship”).

¶14 Georgia law recognizes that “most business relationships 

are not generally confidential or fiduciary relationships.” Newitt 

v. First Union Nat’l Bank, 607 S.E.2d 188, 196 (Ga. Ct. App. 2004).

“Where parties are engaged in a transaction to further their own 

separate business objectives, there is no duty to represent or 

advance the other’s interests.” Id.

¶15 In this case, the Owners rely exclusively on the 

Agreement as the basis of the fiduciary duty. In the amended 

complaint, the Owners allege that the property manager was a 

fiduciary because it “was obligated to perform asset 

management and real estate property management services” for 

the Owners’ benefit. The Owners further allege that “having 

subsumed the fiduciary duties of property and asset manager” 

under the Agreement, Cottonwood became the “successor 

fiduciary.” Thus, the Owners rely on the contractual relationship 

between the parties as the basis for the fiduciary duty.

¶16 The Agreement authorizes the property manager to act on 

behalf of the Owners to “manage, operate and maintain the 
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20180105-CA 12 2019 UT App 146

Property in an efficient, economic and satisfactory manner.” But 

an agent is only a fiduciary with respect to the matters within 

the scope of its agency. See American Mgmt. Services East, LLC. v. 

Fort Benning Family Communities, LLC, 774 S.E.2d 233, 249 (Ga. 

Ct. App. 2015) (applying Virginia law). Even assuming that the 

property managers owed the Owners fiduciary duties when 

performing management services, the Agreement does not 

impose an obligation on the property manager to act on the 

Owners’ behalf in setting the fees for its services.

¶17 The Agreement requires the property manager to act on 

behalf of the Owners in performing its management duties, but 

makes clear that the property manager is not acting as the 

Owners’ agent in all respects. The Agreement expressly states 

that the parties “do not intend to form a joint venture, 

partnership, or similar relationship” and that the property 

managers “shall act solely in the capacity of an independent 

contractor.” Georgia courts have held that no confidential 

relationship exists where, as here, the “contract expressly 

provided for an independent contractor relationship” and “the 

parties were engaged in a transaction with each other in an effort 

to further their own separate business objectives.” Allen, 484 

S.E.2d at 264; see also Automated Sol. Enters., Inc. v. Clearview 

Software, Inc., 567 S.E.2d 335, 338 (Ga. Ct. App. 2002) (holding 

that the relationship between the parties was not confidential but 

was “merely a business relationship between two independent 

concerns” where the contract provided that the plaintiff was an 

independent contractor and disclaimed any intent to form a 

partnership or joint venture). In setting the amount to be 

charged for the property manager’s services, the parties were 

engaged in an ordinary business transaction in which both sides 

were representing their own interests. See Morrell v. Wellstar 

Health System, Inc., 633 S.E.2d 68, 74 (Ga. Ct. App. 2006) (holding 

that “[w]hen nonprofit hospitals and their patients enter into 

agreements on the price to be charged for medical care, they are 
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ordinarily engaged in business transactions indistinguishable 

from those engaged in by for-profit corporations with no 

confidential or fiduciary relationship between the parties”).

¶18 In fact, the Agreement specifically provides a mechanism 

for each party to look out for its own best interests with respect 

to fees. Instead of granting the property manager unfettered 

discretion to set the total fees up to the 3% cap, the Agreement 

requires that the property manager set forth its management fees 

in a yearly budget that is subject to approval by the Owners. In 

other words, the Agreement does not place the property 

manager in a position “to exercise a controlling influence over 

the will, conduct, and interest” of the Owners or in “a similar 

relationship of mutual confidence” with respect to the fees 

charged for management services. See Ga. Code Ann. § 23-2-58 

(2019). Discretionary control over the amount of management 

fees did not lie with the property manager but with the Owners. 

Because the property manager did not exercise a controlling 

influence or hold a similar relationship of mutual confidence 

with respect to setting fees, it had no obligation to act in the 

Owners’ best interests when charging for its services.

¶19 In sum, based on the Agreement, neither Daymark nor 

Cottonwood owed the Owners a fiduciary duty with respect to 

fees charged for their services. Because the Agreement is the 

only basis alleged for the existence of a fiduciary duty, the 

amended complaint fails to state a claim for either breach of 

fiduciary duty or aiding and abetting such a breach.

II. Breach of the Agreement

¶20 The Owners also allege that Cottonwood breached the 

Agreement by charging above-market property and asset 

management fees or, in the alternative, “improperly induced 

[Daymark] to breach its obligation” under the Agreement by 

paying Daymark $8 million in “exchange for all future property 
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20180105-CA 14 2019 UT App 146

management and asset management fees at rates in excess of fair 

value.” The district court determined that, even assuming that

Cottonwood was a party to the Agreement between the Owners 

and Daymark, the facts alleged in the amended complaint could 

not establish breach of contract by either Cottonwood or 

Daymark because the Agreement contained no provision 

limiting management fees to market value rates. We need not 

first determine whether Cottonwood is a party to the 

Agreement, because we agree with the district court that the 

Owners have failed to allege a breach of the Agreement 

regardless of the parties’ legal relationships.

¶21 To state a claim for either breach of contract or tortious 

interference with a contract, a party must have sufficiently 

alleged a breach of a contractual obligation. See Reindel v. Mobile 

Content Network Co., 652 F.Supp.2d 1278, 1287 (N.D.Ga. 2009) 

(explaining that, in order “[t]o establish a breach of contract 

claim, a plaintiff must show (1) an enforceable agreement, (2) 

breach of that agreement, and (3) damages as a result of that 

breach”); White v. Shamrock Bldg. Sys., Inc., 669 S.E.2d 168, 174 

(Ga. Ct. App. 2008) (explaining that, to succeed in a tortious 

interference claim, the plaintiff must show the defendants, 

“without privilege, acted improperly, purposely, and with 

malice with the intent to injure” and “that they induced a breach 

of a contractual obligation”). Here, both claims fail because the 

facts alleged in the amended complaint cannot establish a breach 

of the Agreement.

¶22 The Owners allege that Daymark and Cottonwood 

charged above-market property and asset management fees and 

that such fees were prohibited under the Agreement. The 

Owners argue that when read together, the terms of sections 9.1 

and 2.2 of the Agreement preclude Daymark and Cottonwood 

from charging fees that exceeded the market value for property 

and asset management. “An issue of contract construction is at 

the outset a question of law for the court.” Grier v. Brogdon, 505 
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S.E.2d 512, 514 (Ga. Ct. App. 1998). Under Georgia law, contracts 

must be construed in accordance with the intention of the 

parties. Ga. Code Ann. § 13-2-3 (2019). To ascertain the intention 

of the parties, we first “look to the four corners of the instrument 

to determine the meaning of the agreement from the language 

employed.” Barrow County Airport Auth. v. Romanair, Inc., 563 

S.E.2d 467, 470 (Ga. Ct. App. 2002). “If the terms used are clear 

and unambiguous they are to be taken and understood in their 

plain, ordinary, and popular sense.” Race, Inc. v. Wade Leasing, 

Inc., 411 S.E.2d 56, 57 (Ga. Ct. App. 1991) (quotation simplified).

¶23 Looking at the four corners of the Agreement, there is no 

provision limiting the property and asset management fees to 

“market value.” Section 9.1 of the Agreement provides: “The 

Property Management Fee shall be up to three percent (3%) of 

Gross Revenues . . . and the Asset Management Fee shall be up 

to two percent (2%) of Gross Revenues.” Although this provision

clearly limits the property and asset management fees to 3% and 

2% of gross revenues, respectively, the limits are not tied to 

market value and the Owners have not alleged that the fees 

charged exceeded the stated limits. Section 9.1 also requires that 

the fees be set forth in the annual budget the property manager 

submits to the Owners for approval, but there is no allegation 

that Daymark or Cottonwood failed to disclose the fee amounts 

in the budget or that the Owners rejected the proposed amounts.

¶24 The Owners also rely on section 2.2 of the Agreement, 

which provides that the property manager “shall manage, 

operate and maintain the Property in an efficient, economic, and 

satisfactory manner and shall manage the performance of 

everything reasonably necessary for the proper operation of the 

Property for the tenants thereof . . . [and] shall perform all 

services in a diligent and professional manner.” But this 

provision speaks to the property manager’s duties in performing 

the contracted services, not to the amount that it can charge for 

those services.
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¶25 The Agreement contains only a single provision linked to 

market value. Section 11 provides that the property manager 

“shall not deal with or engage, or purchase goods or services 

from, any subsidiary or affiliated company of Property Manager 

in connection with the management of the Property for amounts 

above market rates.” This provision plainly limits the cost of 

additional items and services that the property manager can

purchase on behalf of the Owners from its own subsidiary or 

affiliate companies in the course of managing the Property, not 

what the Owners are obligated to pay the property manager for 

its management of the Property. Further, the parties’ use of 

“market rate” in section 9.1 demonstrates that they knew how to 

impose a market value limit when that was their intention; the 

absence of similar language in section 2.2 thus supports the 

conclusion that the parties did not intend to impose a market 

value limit on fees. See, e.g., Skolnick v. Exodus Healthcare Network, 

PLLC, 2018 UT App 209, ¶ 21, 437 P.3d 584 (recognizing that the 

conditional language used in one contractual provision 

“demonstrates that the parties knew how to make specific 

obligations . . . conditional when that was their intent”).

¶26 In sum, the only contractual limitations on property and 

asset management fees are the 3% and 2% of gross revenue

maximums and the requirement that the fees be set forth in the 

annual budget submitted by the property manager to the 

Owners for approval. The Owners have not alleged a breach of 

either contractual term. Because these terms are the exclusive 

limitation on property and asset management fees under the 

Agreement, the Owners cannot state a claim for breach of 

contract or tortious interference based upon alleged 

overcharging for fees without alleging that the fees were higher 

than 3% and 2% of gross revenue or that they were not approved 

as part of the yearly budget. Given that the amended complaint 

makes no such allegations, it fails to state a claim for breach of 
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contract or tortious interference with a contract. The district 

court did not err in dismissing these claims.

CONCLUSION

¶27 We conclude that the Owners failed to state a claim for

breach of a fiduciary duty because the Agreement did not create 

a fiduciary relationship with respect to fees charged for services. 

Additionally, because the terms of the Agreement do not limit 

the management fees to market value, the Owners have not 

alleged a breach of the Agreement that could support either their 

contract claim or their claim for tortious interference with a 

contract. Accordingly, we affirm the district court’s order of 

dismissal.