Opinion ID: 159881
Heading Depth: 3
Heading Rank: 1

Heading: Breach of the Express Terms of the Contract

Text: An insured may recover attorney fees as consequential damages for the breach of an express term in the insurance contract if the fees “were reasonably within the contemplation of, or reasonably foreseeable by, the parties at the time the contract was made.” Billings, 918 P.2d at 468 (quotation marks and citation omitted). Thus, in order to recover attorney fees as consequential damages flowing from a breach of express terms in the contracts, the Johnsons need to first show the companies breached the contracts. However, the district court never ruled on whether either company breached the express or implied terms of its contract. The district court instead found Monumental and Life Investors were estopped from relying on the sickness exclusions in their policies, and under the doctrine of estoppel, held the Johnsons could not recover attorney fees. -20- Given our and the district court’s holdings that Monumental is estopped from denying coverage, we must examine the principles of estoppel to determine if attorney fees from Monumental are warranted in this case. To begin, estoppel does not operate to alter the terms of the contract as originally written. See Perkins v. Great-West Life Assurance Co., 814 P.2d 1125, 1131 (Utah Ct. App. 1991). Rather, estoppel is normally asserted as a defense to a claim or right and does not create an independent cause of action. See Raymond v. Halifax Hosp. Med. Ctr., 466 So.2d 253, 255 (Fla. Dist. Ct. App. 1985); Lohse v. Atlantic Richfield Co., 389 N.W.2d 352, 357-58 (N.D. 1986); see also General Motors, 668 P.2d at 502 (“Although estoppel is usually a factual defense, it may be established as a matter of law to preclude an insurance company from relying on an exclusion in a credit life and accident policy.”). Estoppel merely abates the insurer’s right to defend against the insured’s claim for breach of contract by relying on the language in its policy. See id. Moreover, unlike breach of contract where the award of attorney fees is reasonably contemplated at the time of the contract, Billings, 918 P.2d at 468, estoppel is not an independent cause of action like breach of contract, or a circumstance in which attorney fees are ever contemplated. It is not the same as breach of contract for the purpose of awarding attorney fees. -21- In applying this conclusion to the facts of this case, we note neither we nor the district court ever reached the issue of whether Monumental breached its contract with the Johnsons when holding Monumental is estopped as a matter of law from relying on the sickness exclusion. Therefore, the Johnsons are not entitled to attorney fees from Monumental under the theory Monumental breached the express terms of the contract. However, because we are reversing and remanding the district court’s grant of summary judgment in favor of the Johnsons on their claim against Life Investors, we leave the determinations of whether Life Investors breached the express terms of its contract, and whether the Johnsons are entitled to attorney fees under Utah law, to the district court.