Opinion ID: 2519711
Heading Depth: 3
Heading Rank: 1

Heading: Implied Contracts

Text: ¶ 12 The resolution of whether the statute of limitations expired on DWR's implied contract claims depends upon when the four-year limitation period commenced. This determination hinges upon the construction of Utah Code section 78-12-25(1). [1] The trial court determined that the four-year limitation period began running no later than February 1995 when HCIC informed DWR that it could no longer vote a portion of its shares under the January 1995 bylaws. The trial court's interpretation of this statute is a question of law that we review for correctness. State ex rel. Div. of Forestry, Fire & State Lands v. Tooele County, 2002 UT 8, ¶ 8, 44 P.3d 680. ¶ 13 In interpreting statutes, our paramount concern is to give effect to the legislative intent, manifested by the plain language of the statute. State v. Lusk, 2001 UT 102, ¶ 19, 37 P.3d 1103; Regal Ins. Co. v. Bott, 2001 UT 71, ¶ 10, 31 P.3d 524; City of Hildale v. Cooke, 2001 UT 56, ¶ 36, 28 P.3d 697. Unless a statute is ambiguous, we will not look beyond the plain language of the statute. Lusk, 2001 UT 102 at ¶ 9, 37 P.3d 1103. In doing so, we `presume that the legislature used each word advisedly and [we] give effect to the term according to its ordinary and accepted meaning,' C.T. v. Johnson, 1999 UT 35, ¶ 9, 977 P.2d 479 (quoting Nelson v. Salt Lake County, 905 P.2d 872, 875 (Utah 1995)), and we seek `to render all parts [of the statute] relevant and meaningful,' Hall v. State Dep't of Corr., 2001 UT 34, ¶ 15, 24 P.3d 958 (quoting Millett v. Clark Clinic Corp., 609 P.2d 934, 936 (Utah 1980)). ¶ 14 Unless otherwise provided, a civil action may be commenced only within the periods prescribed in [chapter twelve of title seventy-eight], after the cause of action has accrued. Utah Code Ann. § 78-12-1 (1996); see also Davidson Lumber Sales, Inc. v. Bonneville Inv., Inc., 794 P.2d 11, 19 (Utah 1990). The plain language of section 78-12-25(1) is unambiguous regarding when the four-year limitation period begins to run on implied contracts. That section provides: An action may be brought within four years: (1) upon a contract, obligation, or liability not founded upon an instrument in writing; also on an open account for goods, wares, and merchandise, and for any article charged on a store account; also on an open account for work, labor or services rendered, or materials furnished; provided, that action in all of the foregoing cases may be commenced at any time within four years after the last charge is made or the last payment is received . . . . Utah Code Ann. § 78-12-25(1) (emphasis added). ¶ 15 The plain language unequivocally provides that an action may be commenced at any time within four years after the last charge is made or the last payment is received (statute of limitations trigger phrase) in all of the situations listed in section 78-12-25(1), which are actions on an open account on goods, on an open account for work or services rendered, or upon a contract, obligation, or liability not founded upon an instrument in writing. Id.; see also CIG Exploration, Inc. v. State, 2001 UT 37, ¶¶ 9-10, 24 P.3d 966. The legislature's use of the phrase in all the foregoing cases clearly indicates the legislature's intent that the statute of limitations trigger phrase apply to all cases explicitly enumerated in the statute, including implied contracts. Construing the statute otherwise would render the last phrase of the statute superfluous or inoperative, contrary to Utah law. Hall, 2001 UT 34 at ¶ 15, 24 P.3d 958. ¶ 16 Moreover, this interpretation of section 78-12-25(1) comports with [a]n application of `elementary rules of punctuation and grammar.' State ex rel. Div. of Forestry, Fire & State Lands v. Tooele County, 2002 UT 8, ¶ 13, 44 P.3d 680 (quoting Newspaper Agency Corp. v. Auditing Div. of State Tax Comm'n, 938 P.2d 266, 271 (Utah 1997)). In section 78-12-25(1), the punctuation, which we do not arbitrarily ignore, bolsters the construction of the statute that the limitation period commences either when the final charge is made or the final payment is received. Id. The first three phrases of the statute are uniformly separated by semicolons and the second and third phrases begin with the word also. By so grammatically structuring the statute, the legislature divided the sentence into three distinct cases to which the statute of limitations trigger phrase expressly applies. See id.; Newspaper Agency Corp., 938 P.2d at 271. ¶ 17 Further, the statute of limitations ordinarily will not begin to run on an action until it has accrued. Davidson Lumber Sales, 794 P.2d at 19. A cause of action for breach of contract for failure to make a payment, for deficient payment, or for overpayment accrues only after a charge is made or the payment is received, i.e., an action for overassessment accrues only after the relevant assessment has been made, and thus the limitation period begins to run when the payment is received or the charge is made. See Utah Code Ann. § 78-12-25(1); see also CIG Exploration, Inc., 2001 UT 37 at ¶ 15, 24 P.3d 966 (holding that limitation period expired on plaintiffs claims to recover overpaid royalties because plaintiffs final payment to State was more than four years before action was commenced); DOLT, Inc. v. Touche, Ross & Co., 926 P.2d 835, 843 (Utah 1996) (As a general rule, a cause of action accrues when a plaintiff could have first filed and prosecuted an action to successful completion.). ¶ 18 Many contract[s], obligation[s], or liabilit[ies] not founded upon an instrument in writingsuch as oral contracts, implied contracts, and quasi-contractsrequire charges and payments to be made, many of which are made more than four years after the parties agree to such payments. If the statute of limitations precluded a party from pursuing a cause of action before it accrued, then parties could breach contracts with impunity once the statute of limitations had expired. Therefore, we have repeatedly held that all contracts covered by section 78-12-25(1) accrue when the last charge has been made or the last payment received. GIG Exploration, Inc., 24 P.3d 966, 2001 UT 37 at ¶¶ 10 & 14; Davidson Lumber Sales, 794 P.2d at 19; Petty & Riddle, Inc. v. Lunt, 104 Utah 130, 138, 138 P.2d 648, 652 (1942); see also CIG Exploration, Inc. v. Hill, 824 F.Supp. 1532, 1546 (D.Utah 1993). ¶ 19 Here, whenever HCIC makes a new assessment under the purportedly unlawful mechanism, [2] a new cause of action accrues on that individual assessment, permitting the statute of limitations on the newly arisen cause of action to run from the date of the new assessment. Inasmuch as DWR alleges that HCIC's assessments were made pursuant to an unlawful mechanism, DWR can assail the assessments by challenging the mechanism upon which the assessments are based. [3] See, e.g., Utah Ry. Co. v. State Tax Comm'n, 2000 UT 49, ¶¶ 11-12, 5 P.3d 652; Salt Lake City Corp. v. Prop. Tax Div. of State Tax Comm'n, 1999 UT 41, ¶¶ 14 & 22, 979 P.2d 346; Walker v. Brigham City, 856 P.2d 347, 348-49 (Utah 1993). ¶ 20 However, DWR is still subject to the statute of limitations, which precludes actions that accrued more than four years before DWR filed this suit. Where, as here, a plaintiff brings suit to recover for overassessments, the statute of limitations runs against each assessment from the date the assessment is made, that is, from the date when an action may be brought on that particular assessment. Greene v. Bursey, 733 So.2d 1111, 1114 (Fla.Ct.App.1999). Hence, the limitation period may expire on some assessments but not on others. Id. Specifically, DWR cannot challenge every assessment made under the mechanism in perpetuity. As we have previously applied the limitation period of section 78-12-25(1), only payments due or assessments charged within the four years prior to filing the lawsuit can be the basis for a contractual claim. See Morris v. Russell, 120 Utah 545, 554, 236 P.2d 451, 456 (1951). DWR has only four years from the date of an assessment within which to challenge that particular assessment. The statute of limitations precludes DWR from challenging assessments made more than four years before this case was filed on June 14, 1999. See id. (holding that because services rendered were compensable monthly, limitation period would begin to run at end of each month on each individual monthly payment due). However, inasmuch as the first assessment in this suit challenged by DWR was made on October 11, 1995, the statute of limitations does not preclude any of the claims at issue in this case challenging purportedly unlawful assessments. ¶ 21 Although the trial court found that HCIC informed DWR that a portion of its shares would be subject to reduced voting rights in February 1995, this fact does not preclude a challenge to particular assessments levied by HCIC. Therefore, the limitation period does not preclude DWR from recovering on any alleged overassessments should DWR prevail below on its implied contract claims. ¶ 22 In addition, the four-year statute of limitations commenced to preclude an action on particular shares with respect to DWR's claims of reduced voting rights when HCIC specifically reclassified those shares, thus effectively denying voting rights on those particular shares, because a cause of action for reduced voting rights accrues when those rights are effectively denied. HCIC notified DWR that some of DWR's shares would be subject to reduced voting rights in February 1995, although it is unclear from the record whether HCIC specifically notified DWR regarding which and how many shares would be reclassified and thus subject to the reduced voting rights. Accordingly, the four-year limitation period commenced on DWR's reduced voting rights claim either in February 1995 or on October 11, 1995, depending upon when HCIC specifically reclassified some of DWR's shares as M & I shares, which were subject to reduced voting rights. If HCIC specifically notified DWR regarding which shares were subject to reduced voting rights in February 1995, effectively reducing the voting rights on those shares from that time, then a cause of action on those particular shares would be time-barred. However, if the February notice was merely general and did not specifically reduce DWR's voting rights, then the statute of limitations would have expired on those voting rights claims stemming from the 1995 reclassification on October 11, 1999. With respect to the shares reclassified as M & I shares in 1999, the statute of limitations will not expire on those voting rights claims until 2003, and those claims are therefore not time-barred. We therefore remand to the trial court to determine whether some of DWR's shares were reclassified in February or October 1995 so that it can be determined whether any cause of action with respect to reduced voting rights on those shares is precluded.