Opinion ID: 2463606
Heading Depth: 2
Heading Rank: 2

Heading: summary judgment is inappropriate due to genuine issues of material fact and an insufficient record

Text: ¶ 27 Having established the rule regarding the application of a guarantor's payments, we next determine whether the court of appeals erred in holding that the Parks were entitled to summary judgment. We may affirm a grant of summary judgment upon any grounds apparent in the record. Jensen ex rel. Jensen v. Cunningham, 2011 UT 17, ¶ 36, 250 P.3d 465. Accordingly, we look to the record to determine whether, in light of the reasonable basis test described above, there are no genuine issues of material fact and the Parks are entitled to judgment as a matter of law. UTAH R. CIV. P. 56(c). [4] For this purpose, we consider the facts [in the record] and all reasonable inferences drawn therefrom in the light most favorable to Dr. Stanford. Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (internal quotation marks omitted). ¶ 28 Dr. Stanford argues that the following facts in the record raise genuine issues of material fact precluding summary judgment: (1) he personally intended that each payment made to the Parks would apply toward his guaranty liability; (2) he made checks payable to the Parks, including personal checks from his own account and cashier's checks, which occasionally listed him as the remitter; and (3) evidence in the record showing that the Parks knew Dr. Stanford made payments in satisfaction of his guaranty, including twenty late-payment letters from the Parks demanding immediate payment. We address each argument in turn. ¶ 29 First, we hold that Dr. Stanford's subjective intention that past payments made to the Parks would apply to his guaranty cannot raise a genuine issue of material fact sufficient to avoid summary judgment. The reasonable basis test incorporates the guarantor's actions and the recipient's reasonable understanding. A guarantor may not rely on unexpressed intentions to secure a favorable application of payments, but must instead point to facts that demonstrate a reasonable basis for the recipient of the payments to understand those intentions. Accordingly, Dr. Stanford's affidavit testimony that he intended his payments to apply to his personal guaranty and that he would not have made such payments if he had known he was not receiving credit, is insufficient to reverse summary judgment in favor of the Parks. ¶ 30 Second, the checks Dr. Stanford has proffered may be considered in two categories: those that do not indicate he submitted them in his personal capacity, and those that do. We hold that the checks in the record that contain no indication that Dr. Stanford was submitting the payments in his personal capacity cannot raise a genuine issue of material fact under the reasonable basis test, given his dual capacity as an individual guarantor and as a principal of Snowmass. For example, Dr. Stanford highlights the transfer of his own money into Snowmass's account, followed by Snowmass's payments to the Parks from its own account. But without some further indication that the payments were from Dr. Stanford, instead of Snowmass, the Parks could not have had a reasonable basis to know how to apply them. In fact, there was a reasonable basis for the Parks to assume that payments made from Snowmass's account were made by Snowmass and should be applied to Snowmass's debt. ¶ 31 We conclude, however, that the cashier's checks listing Dr. Stanford as the remitter and the checks drawn on his personal account raise genuine issues of material fact under the reasonable basis test. For example, Dr. Stanford's personal checks to the Parks are all dated in 2003one year after the Parks sued Dr. Stanford on his personal guaranty. It would be plausible to infer that a guarantor's payments after the filing of a creditor's lawsuit on the guaranty were submitted in satisfaction of the guaranty. Further, the cashier's checks contain different remitter notationssometimes Snowmass, sometimes Dr. Stanford, and sometimes both. When these facts are viewed in a light most favorable to Dr. Stanford, a fact-finder could reasonably infer that the variance in the remitter notations indicates that some payments were submitted in satisfaction of the personal guaranty and some were not. ¶ 32 Third, although we disagree with Dr. Stanford's assertion that the record is replete with evidence that the Parks knew of Dr. Stanford's intentions, we hold that the late-payment letters from the Parks to Dr. Stanford raise genuine issues of material fact under the reasonable basis test. Although the letters make no reference to Dr. Stanford's guaranty, they are not addressed to Snowmass, but rather to the guarantors, Dr. Stanford and Mr. Buckway. The Parks argue they sent the notices to Dr. Stanford because he signed an amendment to the Note, which allowed notices of Snowmass's default to be sent to his personal address. However, many of the Parks' notices were sent in 1995 and 1996, before Dr. Stanford executed the 1997 amendment. We are bound to look at these facts in a light most favorable to Dr. Stanford. Under this standard, it is plausible to infer that the Parks' late-payment letters reflect a demand on their behalf that Dr. Stanford submit payments in his guarantor capacity. [5] ¶ 33 When we clarify the law or adopt legal principles, we may remand for further proceedings so that the parties may develop the record in light of the newly articulated rule. See Downing v. Hyland Pharmacy, 2008 UT 65, ¶ 13, 194 P.3d 944 (reversing summary judgment and remanding to the trial court for proceedings, which would presumably include the development of the record on a newly articulated rule of law); Uintah Basin Med. Ctr. v. Hardy, 2002 UT 92, ¶ 18, 54 P.3d 1165 (As the record has been inadequately developed on the issue of the reasonableness of the contract's duration, we remand to permit the district court to allow further development of the record. . . .). Development of the record is particularly warranted where lower courts have applied a different rule of law to the facts and the parties have not had an opportunity to develop the record with an eye toward the newly articulated rule. See, e.g., Utah Local Gov't Trust v. Wheeler Mach. Co., 2008 UT 84, ¶¶ 7, 14, 36, 199 P.3d 949 (holding that the court of appeals applied the wrong test on an issue of first impression and remanding because relevant facts were not evident in the record). ¶ 34 This case is a prime candidate for remand to develop the record. Although we find that the payments listing Dr. Stanford as remitter or drawer and the late-payment letters raise genuine issues of material fact under the reasonable basis test, we also note that the record before us is sparse. In fact, Dr. Stanford did not submit to the district court all payments made so as not to be voluminous. Dr. Stanford further submitted a ledger of payments that, standing alone, provides no guidance as to what entitySnowmass or Dr. Stanfordsubmitted the payments. This is of particular importance because of the nature of Dr. Stanford's dual role as guarantor and managing member of Snowmass. After development of the record, information may indicate some payments may not raise genuine issues of material fact and, consequently, could not be credited toward Dr. Stanford's guaranty liability. We therefore remand because the district court is better suited to make these critical determinations after development of the record.