Court Opinion

ID: 5156504
Source: CourtListenerOpinion
Date Created: 2022-01-02 02:22:36.334211+00
Date Added: 2024-06-11T08:25:22.804922
License: Public Domain

Chief Justice DURHAM,
concurring in the result:
178 I coneur in the majority opinion's result of reversing the trial court's judgment against UDOT. However, I do not believe it is necessary to address the issues of whether UDOT breached its contract with MVC or whether MVC waived its claims by failing to comply with the contract's written-notice provision. Instead, I would hold that Southwest could not, as a matter of law, recover its own damages by virtue of MVC's assignment of claims.
179 UDOT contends that Utah law does not permit an assignee (Southwest) to recover its own damages by standing in the shoes of its assignor (MVC). Recognizing its failure to preserve this issue below, UDOT asks us to engage in a plain error review, under which UDOT "must establish that [1] an error exists; [2] the error should have been obvious to the trial court; and [8] the error is harmful, ie., absent the error, there is a reasonable likelihood of a more favorable outcome" for UDOT. State v. Munguia, 2011 *690UT 5, ¶ 12, 253 P.3d 1082 (internal quotation marks omitted). I believe that UDOT has met these three requirements.
T80 First, an error exists in light of our controlling decision in SME Industries, Inc. v. Thompson, Ventulett, Stainback & Associates, Inc., 2001 UT 54, 28 P.3d 669. In that case, SME was assigned Salt Lake County's claims against TVSA, an architectural and consulting firm involved in the expansion of the Salt Palace Convention Center. Id. ¶¶ 2, 6. In discussing whether SME could pursue a claim for breach of implied warranty against TVSA, we stated that because SME was an assignee, it could not pursue damages it suffered as a result of TVSA's alleged breach. Id. 180. Rather, we explained that SME's recovery was limited to damages its assignor, the County, suffered. Id. We supported this reasoning by citing to 6 Am. Jur2Db Assignments § 144 (1999) for the proposition that an "assignee can acquire no right superior to those held by the assignor" and "'simply stands in the shoes of the assignor.'" Id.
181 Under SME Industries, an assignee not otherwise in privity of contract with an obligor is constrained to pursuing damages its assignor suffered for claims its assignor could have asserted against the obligor. Here, Southwest pursued damages # suffered for claims MVC could have asserted against UDOT. Southwest did not stand in MVC's shoes, but rather wore a "Southwest shoe" on one foot and an "MVC shoe" on the other. The trial court therefore erred in awarding Southwest its own damages based on MVC's assignment of claims against UDOT.1
82 Under plain error review, our second task is to determine whether the error should have been obvious to the trial court. "An error is obvious when the law governing the error was clear at the time the alleged error was made." State v. Low, 2008 UT 58, ¶ 41, 192 P.3d 867 (internal quotation marks omitted). We issued SME Industries in 2001, well before the trial court's ruling. The legal error, therefore, should have been obvious to the trial court.
{83 The majority contends that even if legal error existed, it would not have been factually obvious to the trial court. It concedes that the trial court understood that Southwest had incurred all the damages and that MVC had no "dog in this fight." See supra 120. But it states that the trial court's "limited factual knowledge about the parties' interests was not sufficient" to put it on notice of a legal error. Id. Yet the record in this case demonstrates that the testimony at trial repeatedly and clearly put the court on notice that (1) Southwest was pursuing its claims in the name of MVC pursuant to a pass-through/assignment of claims agreement, and (2) Southwest was not a party to the construction contract between MVC and UDOT. MVC's own counsel even informed the trial court that only Southwest suffered damages and that "this is not ... [MVC's] ball game, this is Southwest['s].... I think that needs to be clear in case ... the decision is appealed." On appeal, we should therefore recognize that the trial court had the factual basis to understand the parties' interests and that the error should have been obvious.
1 84 Finally, plain error requires a showing of harm. That Southwest recovered its own damages despite its assignee status certainly harmed UDOT. Had the trial court applied the law as set forth in SME Industries, UDOT would not have been assessed a judgment of $768,365.
*691€85 Accordingly, I would hold that the trial court committed plain error in awarding Southwest its own damages as MVC's assign-ee.2

. The majority opinion disagrees that error exists because this court has never addressed "whether an assignee can assert a breach of contract claim in the name of its assignor when the assignee agrees not to sue the assignor in exchange for the assignor's right to sue the obligor." Supra ¶ 19. As an initial matter, I do not believe that this statement accurately reflects the issue before us. The issue is whether an assignee may recover its own damages in the name of an assignor who suffered no damages. Additionally, I believe SME Industries does address the issue as the majority opinion frames it. SME received its assigned claims by way of settlement and still was limited to recovering the damages of its assignor. SME Industries, 2001 UT 54, ¶ 6, 28 P.3d 669. That the parties in SME Industries settled implies that they extinguished their claims against one another. See Buack's Law Dictionary 1496 (9th ed. 2009) (defining "settlement" as "(aln agreement ending a dispute or lawsuit"). In other words, SME agreed not to sue its assign- or in exchange for the right to sue TVSA.

. Resolving this case on the assignment issue also would render it unnecessary for us to discuss whether UDOT's actual notice of the increased costs of block paving excused MVC's failure to provide written notice. The majority assumes that because MVC failed to provide written notice in accordance with the contract, MVC necessarily waived its claims. Yet we have never addressed whether a contracting party must strictly comply with a written-notice provision where the party can prove actual notice. Thorn Construction Co. v. Utah Department of Transportation, 598 P.2d 365 (Utah 1979), which the majority correctly distinguishes, did not reach this issue because we found that the written-notice provision of the contract was not triggered. Id. at 370. Furthermore, there is some disagreement in other jurisdictions as to whether a party to a contract may be excused for failing to comply with a written-notice provision by proving actual notice. Compare B & P Enters. v. Overland Equip. Co., 133 Md.App. 583, 758 A.2d 1026, 1041 (2000) (disregarding lease's written-notice requirement where appellant had "actual, ongoing knowledge" of appellee's complaints and appellant suffered no prejudice), with Alkan v. Wheeler, 142 Wash.App. 1013, 2007 WL 4489332, at *3 (Wash.Ct.App. Dec. 24, 2007) ("'Washington law generally enforces contractual notice provisions unless those procedures are waived. When a contract requires written notice, actual notice does not suffice." (citation omitted)).