Court Opinion

ID: 5138049
Source: CourtListenerOpinion
Date Created: 2021-12-21 14:49:35.079229+00
Date Added: 2024-06-11T08:24:05.856897
License: Public Domain

2015 UT App 10
_________________________________________________________

               THE UTAH COURT OF APPEALS

        ROBERT HEMINGWAY AND DENISE HEMINGWAY,
                Plaintiffs and Appellants,
                             v.
        CONSTRUCTION BY DESIGN CORPORATION AND
                 CLAVELL T. ANDERSON,
                Defendants and Appellees.

                            Opinion
                        No. 20130955-CA
                     Filed January 15, 2015

          Fourth District Court, Provo Department
             The Honorable Samuel D. McVey
                       No. 120401849

      Thomas M. Regan and Leslie A. Hulburt, Attorneys
                      for Appellants

               Terry M. Plant and Daniel E. Young,
                     Attorneys for Appellees

JUDGE STEPHEN L. ROTH authored this Opinion, in which JUDGES
  GREGORY K. ORME and MICHELE M. CHRISTIANSEN concurred.

ROTH, Judge:

¶1   Robert and Denise Hemingway appeal from the grant of
summary judgment in favor of Clavell T. Anderson and his
company, Construction By Design Corporation (collectively,
         Hemingway v. Construction By Design Corporation

Anderson).1 The Hemingways claim that the district court
improperly interpreted a damages waiver in a construction
contract to preclude them from recovering for damage caused by
a fire in their home. Alternatively, they assert that summary
judgment was improper because there was an unresolved
dispute regarding whether the waiver even applied in this case.
We agree with the Hemingways on the latter issue, and we
therefore reverse the grant of summary judgment and remand
for further proceedings.

                         BACKGROUND

¶2     In October 2010, the Hemingways hired Anderson to
remodel the kitchen and sun room of their residence in Cedar
Hills, Utah. Anderson and the Hemingways entered into a
written agreement (the Agreement) that outlined the scope of the
remodel work and the responsibilities and liabilities of each
party. Article 2 of the Agreement defines ‚*t+he term ‘Work’ as
used in the Contract Documents‛ to include ‚all labor necessary
to complete the project of construction or remodeling . . . , and all
materials and equipment to be incorporated therein.‛ Article 12
of the Agreement sets out the Hemingways’ responsibilities
regarding property insurance. Article 12.1 requires the
Hemingways to ‚purchase and maintain property insurance
upon the entire Work at the site to the full insurable value
thereof. This insurance shall include the interests of the
[Hemingways], [Anderson], and subcontractors in the Work[2]

1. In the district court there was some dispute about
Construction By Design’s relationship to the contract. That
dispute is immaterial to the issue presented on appeal.

2. This Agreement actually says ‚the Word,‛ but it is undisputed
that this is a typographical error. We will use the Work, as that is
the term the parties intended.

20130955-CA                      2                 2015 UT App 10
        Hemingway v. Construction By Design Corporation

and shall insure against the perils of fire [and] extended
coverage,‛ among other things. Articles 12.2 and 12.3 describe
certain logistical aspects of this requirement that are not at issue
on appeal. Finally, Article 12.4 contains a waiver of liability:
‚The *Hemingways+ and *Anderson] waive all rights against
each other for damages caused by fire or other perils to the
extent covered by insurance provided under this Article *12+.‛

¶3     On December 28, 2010, while construction was ongoing at
the Hemingway residence, the kitchen or an area near the
kitchen caught fire, resulting in significant damage to both the
Work and the rest of the house (the Non-Work). The
Hemingways submitted a claim to their insurance carrier,
Liberty Mutual Insurance Company (Liberty Mutual), for all of
the damage to the home. Liberty Mutual denied payment for
damage to the Work on the basis that ‚*t+he policy of insurance
with Liberty Mutual did not cover . . . any of the improvements
and/or changes that were made by [Anderson+.‛ However, the
insurance company paid the Hemingways’ claims for damage to
the Non-Work in the amount of $532,370. Pursuant to a
subrogation clause in the homeowners’ insurance policy, Liberty
Mutual then brought this suit, in the names of its insureds, to
recover damages from Anderson.3

¶4      Anderson moved for summary judgment, asserting that
the Article 12.4 waiver barred Liberty Mutual’s subrogation
claim. According to Anderson, it was reasonable to infer that
because the Hemingways had not obtained any other insurance
to fulfill their obligations under the Agreement, they intended
the Liberty Mutual homeowners’ policy (the preexisting
homeowners’ policy) to satisfy Article 12.1’s condition that they
obtain insurance to cover the Work. And because the preexisting

3. The Hemingways also sought to recover $200,804 for damage
to the Work. They later voluntarily dismissed this cause of
action, and it is not at issue on appeal.

20130955-CA                      3                 2015 UT App 10
         Hemingway v. Construction By Design Corporation

homeowners’ policy provided coverage for damage to the Non-
Work, Anderson contended that Article 12.4’s language relieving
it of liability ‚for damages caused by fire . . . to the extent covered
by insurance provided‛ should be broadly interpreted to preclude
the Hemingways from seeking reimbursement for any claims
that were within the homeowners’ policy’s scope of coverage,
specifically the fire damage to the Non-Work. (Emphasis added.)
In support of his position, Anderson referred the district court to
cases from a number of jurisdictions that have adopted this
approach, which the parties refer to as the ‚source of coverage‛
approach.

¶5     The Hemingways opposed summary judgment, arguing
that the Article 12.4 waiver did not apply to the Non-Work
damage for two reasons. First, they asserted that they did not
procure an insurance policy of any kind to cover the Work as
required by Article 12.1. Instead, the only policy they had that
covered damage to the home was the preexisting homeowners’
policy, and that policy covered only the Non-Work. They
therefore contended that because Article 12.4 waived damages
claims only ‚to the extent covered by insurance provided under
*Article 12+,‛ the waiver could not bar a subrogation claim under
the preexisting homeowners’ policy. The Hemingways
supported this position with two declarations: one in which Mr.
Hemingway asserted that he ‚did not purchase and/or maintain
property insurance for [Anderson+’s work at *the Hemingway+
home‛ and another in which a Liberty Mutual claims adjustor
attested that ‚*t+he policy of insurance with Liberty Mutual did
not cover, nor were the Hemingways paid[] for[,] any of the
improvements and/or changes that were made by [Anderson+.‛
Second, the Hemingways contended that the Article 12.4 waiver
did not apply to the Non-Work damage, even if the preexisting
homeowners’ policy was the insurance contemplated by Article
12.1, because Article 12.4 waived claims only for damage to the
Work itself, not all damage covered by whatever policy fulfilled
their Article 12.1 insurance obligations. The Hemingways argued
that the language of other portions of the Agreement supported
this narrower reading of Article 12.4. In this regard, the

20130955-CA                       4                  2015 UT App 10
        Hemingway v. Construction By Design Corporation

Hemingways urged the district court to apply the approach that
has been adopted by a handful of courts in other jurisdictions—
which the parties refer to as the ‚type of damages‛ approach—
rather than the ‚source of coverage‛ approach advanced by
Anderson.

¶6     Following a hearing, the district court granted Anderson’s
motion for summary judgment, explaining that the undisputed
facts demonstrated that the Hemingways were ‚relying on their
Liberty Mutual policy to comply with [the Article 12.1]
provision‛ requiring that they obtain insurance to cover damage
to the Work. Then, applying the ‚source of coverage‛ approach,
the district court concluded that Article 12.4, which exempted
Anderson from liability for fire damage ‚to the extent covered by
insurance provided under [Article 12],‛ waived subrogation for
damage to any property covered by the preexisting
homeowners’ policy. (Emphasis added.) In other words, having
determined that the preexisting homeowners’ policy was
intended to satisfy the Hemingways’ obligation to obtain
insurance to cover the Work and that the Article 12.4 waiver
applied to any damages covered by such insurance—which in
this case included the Non-Work—the court concluded that the
Hemingways were precluded from seeking recovery from
Anderson for any of the damages caused by the fire, whether to
the Work or the Non-Work portions of the home. In reaching its
conclusion, the district court did not address whether the
preexisting homeowners’ policy actually included coverage for
the Work itself. The Hemingways appeal.

             ISSUE AND STANDARD OF REVIEW

¶7     The Hemingways argue that summary judgment was
improperly granted in favor of Anderson. Summary judgment is
appropriate ‚only when all the facts entitling the moving party
to a judgment are clearly established or admitted‛ and those
facts ‚preclude[], as a matter of law, the awarding of any relief to
the losing party.‛ Smith v. Four Corners Mental Health Ctr., Inc.,

20130955-CA                      5                 2015 UT App 10
        Hemingway v. Construction By Design Corporation

2003 UT 23, ¶ 24, 70 P.3d 904 (alteration in original) (citations
and internal quotation marks omitted). We review the grant of
summary judgment for correctness, viewing the facts and all
reasonable inferences to be drawn therefrom in favor of the
nonmoving party. Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600.

                            ANALYSIS

¶8      Pursuant to a subrogation clause in the preexisting
homeowners’ policy, Liberty Mutual (through its insureds, the
Hemingways) seeks to recover the amount of money it paid the
Hemingways for damage to real and personal property in the
Non-Work portion of their home. ‚Subrogation is a doctrine
conceived in equity that allows a person or entity [that] pays the
loss or satisfies the claim of another under a legally cognizable
obligation or interest to step into the shoes of the other person
and assert that person’s rights.‛ Bakowski v. Mountain States Steel,
Inc., 2002 UT 62, ¶ 22, 52 P.3d 1179 (alteration in original)
(citation and internal quotation marks omitted). In the case of a
subrogation clause in an insurance agreement, ‚*t+he insurer
succeeds to the insured’s cause of action against a responsible
third party.‛ Id. Because the insurer is assuming, through
subrogation, the claims that the insured could have asserted,
‚the insurer can be subrogated to only such rights as the insured
possesses.‛ Id. ¶ 23 (citation and internal quotation marks
omitted). And ‚an insured can generally waive an insurer’s
subrogation rights against a particular third party through a pre-
loss agreement.‛ Id. This means that ‚the insurer is subject to
any viable defenses the third party can assert against the
insured, including a release from liability or a waiver of a
cognizable cause of action.‛ Id. (citations omitted).

¶9     Article 12.4 of the Agreement between the Hemingways
and Anderson contains such a waiver. It reads, ‚The
[Hemingways] and [Anderson] waive all rights against each
other for damages caused by fire or other perils to the extent
covered by insurance provided under this Article *12+.‛ The

20130955-CA                      6                 2015 UT App 10
         Hemingway v. Construction By Design Corporation

district court interpreted Article 12.4 to amount to a blanket
waiver of all damages resulting from the fire that were paid by
Liberty Mutual under the preexisting homeowners’ policy. In
reaching that conclusion, the district court applied the ‚source of
coverage‛ approach argued for by Anderson and adopted by the
majority of jurisdictions that have considered how to allocate the
risk and responsibility for damage to Work and Non-Work
property when a construction contract contains a waiver of
liability similar to the one included in Article 12.4.4 A minority of
jurisdictions have adopted the alternative ‚type of damages‛
approach that the Hemingways urged the district court to use in
determining the scope of the waiver provision in the Agreement.

4. All of the cases the parties have cited, as well as the cases that
we have independently located on the subject, have involved an
American Institute of Architects (AIA) standard form contract
with a waiver that contains the following emphasized language:
‚The Owner and Contractor waive all rights against each
other . . . for damages caused by fire or other perils to the extent
covered by insurance obtained pursuant to this [Agreement] or
any other property insurance applicable to the Work.‛ (Emphasis
added.) Although the Agreement in the instant case apparently
is derived from the standard AIA contract, the Article 12.4
waiver does not contain the language ‚or any other property
insurance applicable to the Work.‛ That phrase seems to
significantly strengthen the persuasive appeal of the ‚source of
coverage‛ approach because it lends itself to a plain language
analysis leading to a conclusion that the waiver is meant to be
expansive. But we do not consider at this time the effect, if any,
that the absence of that additional language in the Agreement
might have on the scope of the waiver in this case because we
have determined that reversal and remand are appropriate on
another basis.

20130955-CA                      7                 2015 UT App 10
         Hemingway v. Construction By Design Corporation

¶10 The primary difference between the two approaches
relates to the distinction each draws between Work and Non-
Work. Under the ‚source of coverage‛ approach, there is ‚no
distinction between Work and Non-Work‛; rather, ‚the scope of
waived claims is delimited by the source of any insurance
proceeds paying for the loss (i.e., whether the loss was paid by a
policy applicable to the Work).‛ Trinity Universal Ins. Co. v. Bill
Cox Constr., Inc., 75 S.W.3d 6, 11–12 (Tex. App. 2001) (citation
and internal quotation marks omitted). In other words, if the
‚owner’s policy was broad enough to cover both Work and Non-
Work property‛ and ‚the policy paid for damages,‛ then the
waiver provision applies to all damage—whether to Work or
Non-Work—covered by the policy. Id. at 12. The rationale for
this approach is that it ‚furthers the policy underlying the use of
waiver of subrogation clauses in construction contracts,‛ which
is to ‚avoid*+ disrupting the project and eliminate*+ the need for
lawsuits,‛ by placing the risk of loss on the insurance company
providing coverage. Lexington Ins. Co. v. Entrex Commc’n Servs.,
Inc., 749 N.W.2d 124, 135 (Neb. 2008); see also Walker Eng’g, Inc. v.
Bracebridge Corp., 102 S.W.3d 837, 841 (Tex. App. 2003).5

5. This approach represents the majority view. See, e.g., ASIC II
Ltd. v. Stonhard, Inc., 63 F. Supp. 2d 85, 92 (D. Me. 1999); Lloyd’s
Underwriters v. Craig & Rush, Inc., 32 Cal. Rptr. 2d 144, 148 (Cal.
Ct. App. 1994); Stop & Shop Supermarket Co. v. ABCO Refrigeration
Supply Corp., 842 A.2d 1194, 1200 (Conn. Super. Ct. 2003); E.C.
Long, Inc. v. Brennan’s of Atlanta, Inc., 252 S.E.2d 642, 646 (Ga. Ct.
App. 1979); Federal Ins. Co. v. Woodruff Constr., No. 12-0821, 2012
WL 5954588, at *3 (Iowa Ct. App. Nov. 29, 2012); Haemonetics
Corp. v. Brophy & Phillips Co., 501 N.E.2d 524, 526 (Mass. App. Ct.
1986); Employers Mut. Cas. Co. v. A.C.C.T., Inc., 580 N.W.2d 490,
493 (Minn. 1998); Lexington Ins. Co. v. Entrex Commc’n Servs., Inc.,
749 N.W.2d 124, 134 (Neb. 2008); Chadwick v. CSI, Ltd., 629 A.2d
820, 827 (N.H. 1993); Westfield Ins. Group v. Affinia Dev., LLC, 982
N.E.2d 132, 144 (Ohio Ct. App. 2012); Penn Ave. Place Assocs., LP
v. Century Steel Erectors, Inc., 2002 PA Super 133, ¶ 15, 798 A.2d
                                                        (continued...)

20130955-CA                       8                 2015 UT App 10
         Hemingway v. Construction By Design Corporation

¶11 The ‚type of damages‛ approach, on the other hand,
‚makes a distinction between Work (as that word is defined in
the contract) and Non-Work property and limits the scope of
[any contractual+ waiver to damages to the Work.‛ Trinity
Universal, 75 S.W.3d at 11. In other words, the scope of the
waiver is defined and limited by the scope of the obligation to
purchase insurance, i.e., to cover the Work. The waiver ‚bars
subrogation only for those damages covered by insurance which
the owner has provided to meet the requirement of protecting
the contractor’s limited interest in the building—i.e., damages to
the Work itself.‛ Id. (citation and internal quotation marks
omitted). The courts that have adopted the ‚type of damages‛
approach reason that this interpretation is truer to the plain
language of the insurance contract.6

256; Trinity Universal Ins. Co. v. Bill Cox Constr., Inc., 75 S.W.3d 6,
13 (Tex. App. 2001); Behr v. Hook, 787 A.2d 499, 506 (Vt. 2001).

6. This approach is favored by a minority of jurisdictions. See,
e.g., Fidelity & Guar. Ins. Co. v. Craig–Wilkinson, Inc., 948 F. Supp.
608, 611 (S.D. Miss. 196), aff’d, 101 F.3d 699 (5th Cir. 1996) (per
curiam); Copper Mountain, Inc. v. Industrial Sys., Inc., 208 P.3d 692,
700 (Colo. 2009) (en banc); Allen County Pub. Library v. Shambaugh
& Son, LP, 2 N.E.3d 132, 133–35 (Ind. Ct. App. 2014) (noting, on
rehearing, that it had adopted the ‚type of damages‛ approach
in its original decision but observing that the result of the case
would not have changed even if the court had adopted the
‚source of coverage‛ approach); S.S.D.W. Co. v. Brisk
Waterproofing Co., 556 N.E.2d 1097, 1098 (N.Y. 1990) (interpreting
the 1976 version of the standard AIA contract); Public Emps. Mut.
Ins. Co. v. Sellen Constr. Co., 740 P.2d 913, 916 (Wash. Ct. App.
1987). But see Mu Chapter of Sigma Pi Fraternity v. Northeast
Constr. Servs., Inc., 273 A.D.2d 579, 582 (N.Y. App. Div. 2000)
(applying the ‚source of coverage‛ approach when interpreting
a new version of the standard AIA contract).

20130955-CA                       9                  2015 UT App 10
         Hemingway v. Construction By Design Corporation

¶12 In this case, application of the ‚source of coverage‛
approach would mean that the Hemingways waived the right to
collect damages for Non-Work to the extent that the property
was covered under the insurance policy contemplated in Article
12.1. Application of the ‚type of damages‛ approach, on the
other hand, would limit the waiver’s application to just damage
to the Work, even if the policy’s coverage was broader. The
Hemingways argue, however, that we need not reach the
question of which approach Utah ought to adopt, either in this
case or more broadly, because application of either approach
requires first that the insurance policy in question cover the
Work itself. And, they contend, the preexisting homeowners’
policy did not cover the Work and thus was not the insurance
that Article 12.1 either contemplated or required; as a
consequence, the Article 12.4 waiver does not apply. They
concede, however, that the district court did not resolve this
crucial coverage question.

¶13 We agree with the Hemingways’ central argument; that
is, if their preexisting homeowners’ policy was not the insurance
contemplated by Article 12.1 of the Agreement, their claims
against Anderson are not barred by the Article 12.4 waiver.
Article 12.1 of the Agreement requires the Hemingways to
‚purchase and maintain property insurance upon the entire Work
at the site to the full insurable value thereof. This insurance shall
include the interests of the [Hemingways], [Anderson], and
subcontractors in the Work and shall insure against the perils of
fire . . . .‛ (Emphasis added.) Then, Article 12.4 ‚waive*s] all
rights‛ between the Hemingways and Anderson ‚for damages
caused by fire . . . to the extent covered by insurance provided under
this Article *12+.‛ (Emphasis added.) Thus, Article 12.4, by its
plain language, ties the scope of the waiver to the insurance
required by Article 12.1. See Encon Utah, LLC v. Fluor Ames
Kraemer, LLC, 2009 UT 7, ¶ 15, 210 P.3d 263 (explaining that
courts must interpret a contract according to its plain language
and should consider each contract provision in relation to the
other provisions so as to give effect to all provisions and to
ignore none). Moreover, there is no basis in the case law, even in

20130955-CA                      10                 2015 UT App 10
        Hemingway v. Construction By Design Corporation

the jurisdictions that have adopted the more sweeping ‚source
of coverage‛ approach, for extending the waiver provision to
claims for damages covered by an insurance policy that does not
cover damage to the Work itself. For example, in Allen County
Public Library v. Shambaugh & Son, LP, 2 N.E.3d 132 (Ind. Ct. App.
2014), the Indiana Court of Appeals observed that ‚the majority
view [cases] make no distinction between damages to work and
Non-Work property.‛ Id. at 134. ‚Instead, they consider whether
the insurance policy was broad enough to cover damages to work and
Non-Work property and whether the policy paid for the damages.
If the answer to both questions is yes, the waiver applies‛ to
preclude recovery for all damages covered by that policy. Id.
(emphasis added) (citation and internal quotation marks
omitted); accord Trinity Universal, 75 S.W.3d at 12 (explaining
that courts using the ‚source of coverage‛ approach interpret the
waiver as precluding recovery of all damages covered by a
policy if ‚the owner’s policy was broad enough to cover both
Work and Non-Work property and . . . the policy paid for damages‛
(emphasis added)).7 And in jurisdictions applying the ‚type of

7. Anderson asserts that in Haemonetics Corp. v. Brophy & Phillips
Co., 501 N.E.2d 524 (Mass. App. Ct. 1986), the owner provided an
insurance policy that ‚did not cover the ‘Work’‛ and the
Massachusetts Appeals Court still interpreted the waiver to
‚include*+ all damages that were covered by *that+ insurance
*policy+‛ because it was the policy ‚provided pursuant to the
contract.‛ But Anderson does not identify the portion of the case
that supports his assertion, and the case does not seem to do so.
In Haemonetics, the court accepted that the owner had intended
its preexisting insurance policy to satisfy its obligation to
purchase property insurance under the construction contract. Id.
at 526. Applying the ‚source of coverage‛ approach, the court
concluded that the waiver of damages provision extended to any
damages paid under that insurance policy, even if the damage
was to Non-Work property. Id. at 525–26. However, the court
did not state that the insurance policy did not cover the Work
                                                    (continued...)

20130955-CA                    11                2015 UT App 10
        Hemingway v. Construction By Design Corporation

damages‛ approach, the waiver is necessarily limited to Work
damage because that approach interprets the contractual waiver
as being limited to the scope of the obligation to purchase
insurance, i.e., to cover the Work. Trinity Universal, 75 S.W.3d at
11 (explaining that in ‚type of damages‛ cases, the waiver ‚bars
subrogation only for those damages covered by insurance
provided to meet the requirement of protecting the contractor’s
limited interest in the building—i.e., damages to the Work
itself‛). We therefore conclude that the insurance provided
under Article 12.1 must at least cover the Work before either the
majority or the minority approach comes into play.

¶14 As a corollary, we note that the scope of the waiver would
be the same under either approach if the insurance actually
procured in fulfillment of Article 12.1 covered just the Work—it
would be limited to damage to the Work itself, even if the
homeowner had other insurance with broader coverage. See
Allen County Pub. Library, 2 N.E.3d at 135 (explaining that even
the courts that have adopted the ‚source of coverage‛ approach
recognize that if the property owner chooses to purchase a
policy ‚with coverage limited to ‘the Work,’‛ then the ‚‘owner
agrees to waive the right to sue for damages done only to the
‚work‛’‛ (citing the ‚source of coverage‛ case Lloyd’s
Underwriters v. Craig & Rush, Inc., 32 Cal. Rptr. 2d 144, 146 n.4
(Ct. App. 1994), and quoting the ‚source of coverage‛ case
Employers Mutual Casualty Co. v. A.C.C.T., Inc., 580 N.W.2d 490,
493 (Minn. 1998))). Consequently, the Article 12.1 insurance must

itself. Rather, the court’s statement that the ‚preexisting
insurance policy the owner had . . . was the insurance the owner
chose to provide to comply with [the construction contract] even
though that policy may have been more extensive than what was
required‛ supports a conclusion that the policy, in fact, covered
the Work in addition to Non-Work property. Id. at 526 (emphasis
added).

20130955-CA                     12                2015 UT App 10
        Hemingway v. Construction By Design Corporation

cover both the Work and at least some Non-Work property for it
to matter which interpretative approach applies.

¶15 Thus, before we reach the question of which approach
Utah should adopt, we must first answer the question of
whether the Hemingways provided any insurance policy that
covers ‚the interests of the *Hemingways+, *Anderson], and
subcontractors in the Work,‛ as required by Article 12.1. The
only policy in place at the time of the fire was the preexisting
homeowners’ policy, which undisputedly covers the Non-Work;
whether it also covers the Work is a matter of dispute. The
Hemingways contend that their Liberty Mutual policy is not the
policy contemplated by Article 12.1. They support their
contention with an affidavit from a Liberty Mutual claims
adjustor, who attested that ‚*a+fter the policy was incepted *in
2007], there were no changes made to the policy to reflect any
additions and/or changes made to the home.‛ Consequently,
‚*t+he policy of insurance with Liberty Mutual did not cover, nor
were the Hemingways paid[] for[,] any of the improvements
and/or changes that were made by [Anderson+.‛8 Anderson
counters that the Agreement required the Hemingways to
purchase an insurance policy and that because the Hemingways
admittedly did not buy a separate policy, ‚*t+he only reasonable
conclusion to be drawn is that the Hemingways provided their
Liberty Mutual policy [in fulfillment of their obligations] under
Article 12.1.‛ In making his argument, however, Anderson
dismisses the possibility that the Hemingways were simply in
breach of the Agreement. And in this regard, the district court

8. Mr. Hemingway also submitted an affidavit in which he
attested that he ‚did not purchase and/or maintain property
insurance for [Anderson+’s work at [the Hemingway] home.‛
Mr. Hemingway’s subjective intent regarding the Liberty Mutual
policy, however, does not resolve the issue of whether the
Liberty Mutual policy actually provided the coverage
contemplated by Article 12.1.

20130955-CA                    13               2015 UT App 10
         Hemingway v. Construction By Design Corporation

never addressed whether the preexisting homeowners’ policy
actually covered the Work. This dispute is material to the
resolution of the case because, as we just discussed, the Article
12.4 waiver has effect only if there is an insurance policy that
also covers the Work. For that reason, we reverse the grant of
summary judgment and remand to the district court for further
proceedings, with the first step being resolution of the question
about the scope of coverage of the preexisting homeowners’
policy. Depending on the outcome of the first inquiry, the
district court might then need to determine the scope of the
Article 12.4 waiver.

¶16 In deciding to remand, we have considered whether it
would be appropriate for us either to resolve the question of
whether the preexisting homeowners’ policy covers the Work as
a matter of law or to provide guidance to the district court on the
question of whether Utah recognizes either the ‚source of
coverage‛ or the ‚type of damages‛ approach. We conclude that
it is not prudent to do so in this case, for reasons we address
below.

¶17 Often, the interpretation of the terms of a contract, such as
the preexisting homeowners’ policy, presents a question of law
that, as a general matter, may be as readily resolved by an
appellate court as by the district court. Cf. Stevensen v. Goodson,
924 P.2d 339, 346 (Utah 1996) (noting that ‚appellate courts are
in as good a position as trial courts to interpret [legal issues such
as+ court rulings‛). In this case, however, we conclude that
judicial economy and integrity are better served by remand so as
to allow the district court to consider the issue in the first
instance. See Utah Dep’t of Transp. v. Carlson, 2014 UT 24, ¶¶ 30–
33, 332 P.3d 900 (citing judicial economy when remanding for
the district court to consider the appellant’s constitutional
argument on eminent domain—a legal question—because the
district court had not yet had the opportunity to analyze the
issue with the input of the parties, the issue had not been fully
briefed by the parties, and the issue was likely to require remand
to resolve factual issues even after the supreme court resolved

20130955-CA                      14                2015 UT App 10
         Hemingway v. Construction By Design Corporation

the legal question). To decide the legal question now, we would
need to call for supplemental briefing, as neither the original
briefing in this court nor the summary judgment pleadings in
the district court address in any detail the proper interpretation
of the preexisting homeowners’ policy. Rather, at both court
levels, the parties seem to have provided little more than
conclusory assertions about the contents of the policy and its
interpretation. And if there is any ambiguity in the policy’s
terms, we would have to remand in any event for the district
court to resolve the ambiguity. See WebBank v. American Gen.
Annuity Serv. Corp., 2002 UT 88, ¶ 22, 54 P.3d 1139 (‚When
ambiguity exists, the intent of the parties becomes a question of
fact.‛ (citation and internal quotation marks omitted)).
Resolution of the coverage of the preexisting homeowners’
policy is integral to the resolution of the scope of the Article 12.4
waiver dispute because the waiver’s scope becomes pertinent in
this case only if the preexisting homeowners’ policy provides
coverage for the Work.

¶18 For this reason, we believe that the question of which
approach Utah ought to adopt for defining the scope of a waiver
of damages provision in a construction contract, and the
resulting impact on any right of subrogation, is not yet ripe for
resolution.

       A dispute is ripe when a conflict over the
       application of a legal provision has sharpened into
       an actual or imminent clash of legal rights and
       obligations between the parties thereto. An issue is
       not ripe for appeal if there exists no more than a
       difference of opinion regarding the hypothetical
       application of a provision to a situation . . . .

Fundamentalist Church of Jesus Christ of Latter-Day Saints v.
Lindberg, 2010 UT 51, ¶ 40, 238 P.3d 1054 (citation and internal
quotation marks omitted). ‚The ripeness doctrine serves to
prevent courts from issuing advisory opinions on issues that are
not ripe for adjudication.‛ Id. (citation and internal quotation

20130955-CA                      15                2015 UT App 10
        Hemingway v. Construction By Design Corporation

marks omitted); see also Goebel v. Salt Lake City S. R.R. Co., 2004
UT 80, ¶ 33, 104 P.3d 1185 (explaining that appellate courts are
‚disinclined to issue advisory opinions‛ where such opinions
may ‚lack*+ . . . any meaningful effect to the parties‛ (omission in
original) (citation and internal quotation marks omitted)). Here,
the issue before us is one of first impression in Utah with
potentially far-reaching implications. Yet, because of the
possibility that the preexisting homeowners’ policy may provide
no coverage for the Work, thus rendering the Article 12.4 waiver
inapplicable, our resolution of which approach Utah ought to
adopt in interpreting waivers of damages in construction
contracts could amount to a purely advisory opinion. See
Lindberg, 2010 UT 51, ¶ 40 (explaining that the purpose of
waiting for a dispute to become ripe is to avoid issuing advisory
opinions on issues that may never require judicial resolution).

¶19 Thus, we believe it is appropriate to allow the district
court, with the input of the parties, to determine first whether
the waiver provision is even applicable and, only if so, to
determine its scope. Although the district court need not
reconsider its analysis or application of the majority ‚source of
coverage‛ rule should it determine that the preexisting
homeowners’ policy does provide coverage, it is, of course, free
to do so on remand. And if the preexisting homeowners’ policy
provides only partial coverage, the district court, with the input
of the parties, will need to consider how that might affect the
scope of the waiver.9

¶20 We therefore remand for the district court to determine
whether the preexisting homeowners’ policy covers damage to

9. The possibility that the preexisting homeowners’ policy
provides only partial coverage came up at oral argument on
appeal but was not addressed in the briefing. Accordingly, we
leave it to the district court to determine the implications of
partial coverage if this turns out to be the case.

20130955-CA                     16                 2015 UT App 10
        Hemingway v. Construction By Design Corporation

the Work or any part of it and, if necessary, the scope of the
Article 12.4 waiver provision.

                       CONCLUSION

¶21 We reverse the grant of summary judgment and remand
the case to the district court for resolution of whether the
preexisting homeowners’ policy issued by Liberty Mutual is the
insurance the Hemingways agreed to procure in Article 12.1 of
the Agreement. If the preexisting homeowners’ policy is the
insurance contemplated by Article 12.1, then the district court
should determine the scope of the Article 12.4 waiver.

20130955-CA                   17               2015 UT App 10