2021 UT App 80

THE UTAH COURT OF APPEALS

WRIGHT W. THURSTON, ET AL.,1

Appellants,

v.

BLOCK UNITED LLC, ET AL.,

Appellees.

Opinion

No. 20200258-CA

Filed July 22, 2021

Fourth District Court, Provo Department

The Honorable Christine S. Johnson

No. 190400207

B. Ray Zoll, Chad C. Shattuck, and Jared W. Moss, 

Attorneys for Appellants

Evan S. Strassberg and Steven J. Joffee, 

Attorneys for Appellee

JUDGE DAVID N. MORTENSEN authored this Opinion, in which 

JUDGES MICHELE M. CHRISTIANSEN FORSTER and RYAN M. HARRIS

concurred.

MORTENSEN, Judge:

¶1 Within days of the filing of the underlying lawsuit, 

Wright W. Thurston and Block United LLC (Block United)2

 

1. The parties on appeal include other parties whose names we 

have not listed here but who appear on the notice of appeal or 

have otherwise entered appearances in this court.

2. The named appellants and appellees in this case are 

numerous. For ease of reference, we refer to the appellants 

collectively through reference to Thurston, and we refer to the 

(continued...)
Thurston v. Block United

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entered into a settlement agreement resolving the lawsuit. Block

United quickly held up its end of the deal, which included 

transferring money and other assets to Thurston. Thurston, 

however, refused to comply with his principal obligation—

signing and filing papers to dismiss the lawsuit—apparently out 

of belief that certain individuals made material 

misrepresentations during settlement negotiations. Nearly six 

months after the settlement agreement was reached, Thurston 

filed an amended complaint with the aim of adding causes of 

action for these alleged misrepresentations. Days after the 

amended complaint was filed, Block United filed a motion to 

enforce the settlement agreement. 

¶2 The district court granted Block United’s motion to 

enforce the settlement agreement, finding that the settlement

agreement was binding and that Thurston had waived any right 

to rescind the agreement regardless of any alleged fraudulent 

misrepresentations. In granting the motion to enforce, the 

district court dismissed the amended complaint in its entirety

with prejudice. Thurston appeals. We affirm.

BACKGROUND

¶3 Thurston formed Block United in April 2017. Block 

United was a manager-managed LLC, and Thurston was one of 

the company’s two managers. By July 2018, Thurston and the 

other manager were deadlocked on Block United’s management 

 

(...continued)

appellees collectively through reference to Block United. In 

addition, two different lawsuits were filed below which were 

eventually consolidated. In this opinion, we refer to the 

underlying cases, complaints, and the like in the singular, as the 

distinction between the two cases and their filings are 

immaterial to the resolution of this appeal.
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and operation, which ultimately led to Thurston withdrawing 

from daily participation in the company.

¶4 Thurston later filed the underlying lawsuit in early 

February 2019. As a general matter, Thurston alleged that after 

he had withdrawn from daily participation, Block United 

concealed material information about its functions and costs, 

misstated accounting records, converted its assets to other 

companies, and engaged in defamatory conduct. The complaint 

included claims for breach of contract, conversion, breach of 

fiduciary duties, and dissolution of the LLC, among others.

¶5 On February 20, 2019, the parties reached a settlement 

agreement during formal mediation. And like any other gardenvariety settlement agreement, the crux of the agreement was that 

Block United would pay Thurston specified sums of money and 

other assets in exchange for Thurston agreeing to sign and file 

dismissal papers and to release Block United from liability. Block 

United substantially complied with its obligations under the 

settlement agreement within a few weeks, including transferring 

to Thurston all the money and assets specified.

¶6 Thurston, however, continually declined to sign the 

required dismissal and release papers. Initially, Thurston

appeared to premise his delay on being too busy to review the

dismissal papers or on assertions that he otherwise needed more 

or updated information from Block United. But in June 2019,

Thurston asserted that Block United “made several 

misrepresentations during settlement” about its liabilities, assets, 

and ongoing business obligations, which purportedly “induced 

[Thurston] into settlement.” And in response to Block United

threatening to file a motion to enforce the settlement agreement, 

Thurston stated his belief that, based on these alleged 

misrepresentations, any such motion would be “meritless and 

result in costly litigation.” He asserted, instead, that their

“collective efforts [we]re better spent resolving the outstanding 
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20200258-CA 4 2021 UT App 80

issues.”3 Thurston thus asked Block United to engage in a 

second round of mediation to deal with the “outstanding 

issues,” to which Block United agreed. This second round of 

mediation was scheduled for August 22, 2019.

¶7 But on August 19, 2019, Thurston instead filed an 

amended complaint4 and canceled the mediation. The aim of this 

amended complaint was to include new claims seeking redress 

for the fraudulent misrepresentations allegedly made during the 

mediation. As to these additional claims, the amended complaint 

reads:

107. Further, [Block United] made material 

misrepresentations regarding the accounting, taxes, 

liabilities, use of [Block United] proceeds to invest 

in other companies or for [Block United’s] personal 

benefit, filing of unlawful lien by [a third party] 

against [Block United]-owned real estate, and 

[Block United’s] intent to no longer operate any 

blockchain mining facility in the mediation held 

with [Thurston]. 

108. [Thurston] relied on [Block United’s]

misrepresentations in entering into a conditional 

settlement agreement in mediation, and [Block 

United] knew [its] representations were false and 

have not corrected such misrepresentations. 

 

3. Those “outstanding issues” ran the gamut: from asking Block 

United to provide corrected tax returns, to asking the “Block 

United team” to “admit in writing” that they lied to customers 

and “misuse[d]” their funds.

4. The amended complaint was timely. Block United stipulated 

to several extensions of the deadline to amend pleadings, which 

Thurston stated were necessary to “allow” him to “hopefully 

finalize settlement.”
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109. [Thurston] request[s] the Court to declare 

the conditional settlement agreement void or 

voidable, and to award damages against [Block 

United], plus attorneys’ fees and costs.

¶8 On August 30, 2019, Block United filed a motion to 

enforce the settlement agreement. In its motion, Block United

simply asserted that the settlement agreement was binding and

that it had tendered and Thurston had “accepted all the 

consideration and performance” due under the settlement 

agreement, but that Thurston nevertheless refused to live up to 

his side of the agreement and sign the dismissal papers. Block 

United thus requested that the court enforce the settlement 

agreement.

¶9 Thurston responded by arguing that the settlement 

agreement should be rescinded on the ground that Block United

“fraudulently procured” the agreement based on various “false 

representations and omissions during mediation.” (Cleaned up.) 

Thurston then went on to detail numerous instances of these 

alleged fraudulent misrepresentations. As one example, 

Thurston alleged that Block United understated its liabilities

because, during the mediation, Block United stated that it had 

not paid Rocky Mountain Power for only two months leading up 

to the February 2019 mediation, but Thurston “later learned”

that Block United “failed to pay Rocky Mountain Power since 

August 2018 and had an unpaid balance of more than 

$1,190,189.37 as of the date of mediation.”

¶10 In reply, Block United argued that the settlement 

agreement should be enforced irrespective of any of Thurston’s

arguments to the contrary because Thurston had waived the 

right to rescind the agreement by retaining the money and assets 

he had received under the agreement. In addition, Block United

went on to explain that “even if the [c]ourt were to consider the 

merits” of Thurston’s arguments, they should be rejected 

because the “allegations of fraud [were] baseless and, in many 

cases, demonstrably false.” Among other things, Block United 
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asserted that Thurston “allege[d] that the [settlement agreement] 

should be invalidated because [Block United] allegedly did not 

disclose certain liabilities to [him] before the mediation when, in 

fact, the very documents [Thurston] use[d] to support [his]

assertions were produced to [him] before the mediation.” Block 

United then proceeded to refute each allegation, and in many 

instances showed that the relevant documents were in fact 

provided to Thurston in advance of the mediation. As just one 

example, Block United demonstrated that a Rocky Mountain 

Power invoice reflecting “the exact amount that [Thurston] now 

contend[s] [Block United] concealed” was in fact provided in 

advance of the mediation.

¶11 Subsequently, the court held oral arguments on the 

motion. There, the court asked Thurston why, if his intention 

was to rescind the settlement agreement, he had “kept all the 

money . . . paid as part of” that same agreement. Thurston 

answered that, “unless the court order[ed] otherwise,” his 

intention was to keep the proceeds he received under the 

settlement agreement because it “was never [Block United’s] in 

the first place” and was instead “always [his].” The court then 

discussed the holdings of several cases that, it explained, reflect 

the notion that “an aggrieved party can’t have his cake and eat it 

too. He has to decide if he wants to set aside the contract as void 

and then return the benefits or if he wants to accept those 

benefits and sue.” And because Thurston had retained the

proceeds received under the settlement agreement, the court 

determined that he had waived the right to rescind the 

agreement. In response to this ruling, Thurston remarked,

Point of record, Your Honor? . . . To be clear, Your 

Honor, there is [an] amended complaint[] . . . 

which, I think goes exactly with the case law that 

the Court just cited with respect to keeping the 

proceeds and going after damages. Our amended 

complaint[] cite[s] exactly that allegation. . . . [We]

have kept the proceeds and are seeking damages. 

And [we are] enforcing that right to sue here. 
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That’s the only reason we ask the Court to void is 

when they brought the motion to enforce. We have 

to oppose it. But we have never waived our 

complaints. So I just want to, I don’t know if that’ll 

persuade Your Honor?

¶12 The court responded that it “appreciate[d] the . . . point,” 

but did not “find it terribly persuasive” because there was not “a 

basis for fraud in the first place given that the documents that 

were submitted in the reply brief indicate[d] . . . that all of that 

information was put forward as part of the mediation.” The 

court specifically referenced the Rocky Mountain Power invoice 

and remarked, “I could go through the rest of the allegations 

here, but the exhibits in the reply brief are really the same. . . . 

There’s amounts given that are claimed to be examples of fraud 

and yet the amounts correspond to documents that were 

submitted to [Thurston] as part of the mediation.” Therefore, in 

granting the motion to enforce, the court dismissed with 

prejudice “all claims” asserted in the amended complaint. 

Thurston appeals.

ISSUE AND STANDARD OF REVIEW

¶13 Thurston contends that the district court erred by

enforcing the settlement agreement. We review the district 

court’s enforcement of the settlement agreement for abuse of 

discretion. McKelvey v. Hamilton, 2009 UT App 126, ¶ 17, 211 

P.3d 390.5

 

5. Thurston also argues that the district court erred “by failing to 

hold an evidentiary hearing.” But he never requested an

evidentiary hearing below, instead only “request[ing] a hearing 

for oral argument on th[e] motion.” (Emphasis added.) Thurston 

thus failed to preserve the issue and has “not argued that the 

plain error doctrine or any other exception to the preservation 

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ANALYSIS

¶14 Thurston challenges the district court’s order on two 

related grounds. First, he argues that the district court erred in 

concluding that he waived his right to rescind the settlement 

agreement by keeping the proceeds received thereunder. 

Second, he argues that, even if the district court did not err in 

concluding that he waived the right to rescind the settlement 

agreement, it still erred by dismissing the new claims pleaded in 

the amended complaint because these claims can “exist even 

with the settlement agreement in place.”

¶15 “It is quite well established that a settlement agreement 

may be summarily enforced by motion in the court of the 

original action.” Tracy-Collins Bank & Trust Co. v. Travelstead, 592 

P.2d 605, 607 (Utah 1979). However, the “power to enter a 

judgment enforcing a settlement agreement” is contingent on the 

agreement constituting “an enforceable contract.” Badger v. 

MacGillivray, 2016 UT App 109, ¶ 2, 374 P.3d 1053 (cleaned up). 

So, “basic contract principles affect the determination of when a 

settlement agreement should be so enforced.” ACC Cap. Corp. v. 

Ace West Foam Inc., 2018 UT App 36, ¶ 12, 420 P.3d 44 (cleaned 

up).

¶16 And under Utah contract law, a party who has been

induced to enter a contract by fraudulent misrepresentations has 

two options: (1) it may elect to rescind the contract or (2) it may 

affirm the contract. See Dugan v. Jones, 615 P.2d 1239, 1247 (Utah 

1980), superseded on other grounds by rule as recognized in Arnold v. 

Curtis, 846 P.2d 1307 (Utah 1993); see also Brown v. Richards, 840 

P.2d 143, 150 (Utah Ct. App. 1992) (noting the availability of 

these same two options). In either instance, the defrauded party 

may recover damages associated with the fraud. See Ong Int’l 

 

(...continued)

rule applies.” In re Koller, 2018 UT App 27, ¶ 14, 424 P.3d 926. As 

a result, we do not further address this issue.
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(U.S.A.) Inc. v. 11th Avenue Corp., 850 P.2d 447, 457 (Utah 1993) 

(explaining that “monetary and punitive damages” are 

compensable rescissionary damages); Conder v. A.L. Williams 

& Assocs., 739 P.2d 634, 639 (Utah Ct. App. 1987) (explaining that 

a party who affirms the contract may sue for damages thereon).

¶17 However, a party waives the option of rescission if it fails

to “move promptly and with all reasonable diligence to 

disaffirm the contract upon discovery of the fraud.” See Taylor v. 

Moore, 51 P.2d 222, 226 (Utah 1935); see also Continental Ins. Co. v. 

Kingston, 2005 UT App 233, ¶¶ 9, 11, 114 P.3d 1158 (noting that 

the defrauded party waives the right to rescind if “from action or 

inaction” its “course of conduct demonstrates that it intended to 

relinquish that right” (cleaned up)); Ockey v. Lehmer, 2008 UT 37, 

¶ 31, 189 P.3d 51 (“Ockey’s failure to object to the 1994 

conveyance constitutes ratification—either consciously or 

through willful ignorance—of the actions taken on his behalf.”). 

The rationale is grounded in the notion that “[t]he party 

deceived is not allowed to go on deriving all possible benefit 

from the transaction, and then claim to be relieved from his own 

obligations by seeking its rescission.” Taylor, 51 P.2d at 227

(cleaned up); see also Ockey, 2008 UT 37, ¶ 32 (“It is well 

established in our case law that an individual cannot go along 

with a contract for the purpose of enjoying benefits . . . only to 

later claim a right to rescind . . . .” (cleaned up)).

¶18 Here, the district court concluded that Thurston waived 

the option to rescind the settlement agreement because he 

retained the proceeds received under that agreement. And to 

this very point, we have repeatedly explained that a party who 

fails to promptly return proceeds received under a contract 

waives the right to rescind that contract. See Perry v. Woodall, 438 

P.2d 813, 815 (Utah 1968) (“If he continues to treat the property 

as his own the right of rescission is gone, and the party will be 

held bound by the contract.”); Taylor, 51 P.2d at 227 (“If the party 

defrauded continues to receive benefits under the contract after 

he has become aware of the fraud . . . he will be deemed to have 

affirmed the contract and waived his right to rescind.” (cleaned 
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up)); cf. Kingston, 2005 UT App 233, ¶ 16 (“[W]hen an insurer 

accepts premiums after discovering facts that would justify 

rescission of the policy, numerous courts have precluded the 

insurer from later denying coverage.”).

¶19 Thurston tacitly acknowledges the district court’s 

rationale and supporting authority, asserting that “[m]aintaining 

possession of the property may constitute a waiver of the right to 

rescind the contract.” (Emphasis added.) Nevertheless, he argues 

that the district court “overlooked” other evidence in the record 

tending to show his “intent” to pursue rescission. Specifically, 

Thurston refers to the various post-settlement correspondence to 

Block United in which he referenced fraudulent 

misrepresentations, along with his eventual filing of the 

amended complaint and its request for rescission, and asserts 

that these facts demonstrated his intent to rescind the agreement.

¶20 We are not persuaded by Thurston’s attempt to simply 

gloss over our case law and the district court’s resultant ruling 

that, because he retained the proceeds under the settlement 

agreement, he waived his right to rescind it. Both below and on 

appeal, there was no dispute that Thurston retained the 

settlement proceeds, and our case law is clear that this supports 

a determination of waiver. Moreover, the same evidence to 

which Thurston otherwise refers further supports the district 

court’s determination. For example, even in his June 

communications, Thurston was still representing that his 

intention was to “finalize settlement.” See supra note 4; see also 

Frailey v. McGarry, 211 P.2d 840, 845 (Utah 1949) (“[T]he party is 

entitled to a reasonable time in which to decide upon the course 

he will take. But this does not mean that he will be indulged in a 

vacillating or hesitating course of conduct . . . .”). Likewise, 

waiting nearly six months to file an amended complaint further 

supported the district court’s ruling. See Frailey, 211 P.2d at 845 

(“For almost a year plaintiff [vacillated] between reliance on the 

contract, obtaining a modified contract, abandonment of the 

contract and finally rescission.”). We therefore conclude that the 
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court did not abuse its discretion in determining that Thurston 

had waived his right to rescind the settlement agreement.

¶21 And this leads us to Thurston’s other argument, which

relates to a defrauded party’s option to affirm the contract. He 

maintains that, even if the district court did not err by enforcing 

the settlement agreement, it nevertheless erred by dismissing the 

case outright. Specifically, he asserts that the fraud claims added 

in the amended complaint “evidenced” his “intent” to affirm the 

settlement agreement and sue for damages thereon, and thus 

these claims should not have been dismissed.

¶22 We disagree. While a claim pleaded to affirm the 

settlement agreement and recover damages thereon would 

presumptively survive the enforcement of the agreement, the 

fraud claims pleaded in the amended complaint do not take this 

form. See Utah R. Civ. P. 8(a) (directing that “[a]n original claim . 

. . must contain a short and plain . . . demand for judgment for 

specified relief,” including any relief requested “in the 

alternative”).6 In the amended complaint, Thurston specifically 

asked only for the court to “declare the conditional settlement 

agreement void or voidable, and to award damages” on that 

basis. As pleaded, “even under Utah’s liberal notice pleading 

requirements,” this fails to provide fair notice that Thurston was 

alternatively requesting that the settlement agreement be 

affirmed, or fair notice of any theory of damages that might 

result from affirming the settlement agreement. See Asael Farr 

& Sons Co. v. Truck Ins. Exch., 2008 UT App 315, ¶ 17, 193 P.3d 

 

6. We “may choose to affirm the judgment of the district court on 

any legal ground or theory apparent on the record.” Pentalon 

Constr., Inc. v. Rymark Props., LLC, 2015 UT App 29, ¶ 25, 344 

P.3d 180. And given that Thurston’s argument quite literally 

relies on the allegations as pleaded in the amended complaint, 

and Block United has argued the pleading deficiencies on 

appeal, the ground for our ruling is indeed apparent in the 

record. 
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650 (cleaned up). So, no claims pleaded should have survived 

the enforcement of the settlement agreement and, therefore, the 

district court did not err by dismissing the case outright in its 

order granting the motion to enforce.7

CONCLUSION

¶23 We affirm the district court’s enforcement of the 

settlement agreement and dismissal of the amended complaint 

in its entirety. We remand for the limited purpose of calculating 

Block United’s reasonable attorney fees incurred on appeal.

 

7. Block United also requests costs and attorney fees incurred on 

appeal. The settlement agreement provides, “The parties agree 

that in any dispute arising out of or relating in any respect to the 

final settlement agreement, the prevailing party shall be entitled 

to attorney’s fees.” Because Block United has prevailed on 

appeal, we grant the request for reasonable attorney fees 

incurred on appeal.