Court Opinion

ID: 9796092
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:48:32.937919+00
Date Added: 2024-06-11T08:48:57.749355
License: Public Domain

McHUGH, Judge
(concurring and dissenting):
12 I write separately to clarify an additional basis of my concurring opinion on the issues related to the introduction of expert testimony on industry standards and to note my dissenting analysis with respect to the award of attorney fees.
£13 Richins contends that because the contract provided for payment on a time and materials basis, unless and until the contract was actually terminated, Richins was entitled to be paid for all of the time and materials devoted to the project regardless of whether the work performed was defective. Richins asserts that the only remedy available to Golf was to terminate the contract and pay for all time and materials expended up until that termination date. Consequently, Richins argues that the testimony concerning industry standards was irrelevant to a determination of liability or of damages. Like the majority, I disagree.
I 14 Paragraph 19 of the contract between Richins and Golf provides, in relevant part: "[Golf] shall not unreasonably withhold ap*1283proval of all such work, when performed by [Richins] in accordance with the generally accepted practices and methods customary in the industry." Richins argues that this provision has nothing to do with the payment obligations under the contract. According to Richins, whatever time and material has been expended on the project must be paid at termination, irrespective of whether the work was approved by Golf. I do not believe the language of the contract supports that position.
{15 The "Early Termination Compensation" provision of the contract provides that in the event of early work stoppage, Golf shall pay to Richins "all expenses reasonably and necessarily incurred and to be incurred by [Richins] by reason of the [clontract." (Emphasis added.) The language "generally accepted practices and methods customary in the industry" provides a framework for determining what work was reasonably and necessarily incurred. In contrast, Richins's interpretation would render meaningless the reasonably and necessary provision as well as Golfs "approval." This is a result we should avoid. See Novell, Inc. v. Canopy Group, Inc., 2004 UT App 162, 127, 92 P.3d 768 (citing Plateau Mining Co. v. Utah Div. of State Lands & Forestry, 802 P.2d 720, 725 (Utah 1990) ("Each contract provision is to be considered in relation to all of the others, with a view toward giving effect to all and ignoring none." (internal quotation marks omitted))). Therefore, I rely on this additional ground for affirming the trial court's consideration of evidence relating to those generally accepted practices and methods, as well as for affirming the trial court's conclusion that Riching's failure to comply with those standards excused Golf from further performance under the contract, seg eg., Eggett v. Wasatch Energy Corp., 2004 UT 28, 122, 94 P.3d 198 (breaching party had no right to enforee shareholder agreement); Holbrook v. Master Prot. Corp., 888 P.2d 295, 301 (Utah Ct.App.1994) (breaching party had no right to enforce franchise agreement).
116 With respect to the attorney fees issue, I depart from the majority. A release must be interpreted like any other contract. See Peterson v. Coca-Cola USA, 2002 UT 42, ¶9, 48 P.3d 941. Thus, in the absence of ambiguity, the Release should be interpreted according to the intent of the parties as evidenced by the express language of the document. See Larry J. Coet Chevrolet, Pontiae, Buick, Inc. v. Labrum, 2008 UT App 69, 11 18-22, 180 P.3d 765 (holding that letter of understanding waived the parties' rights to pursue attorney fees or prejudgment interest on certain claims). "The test for determining facial ambiguity in a contract [is] ... whether the term, in context of the contract, 'is capable of more than one reasonable interpretation." Novell, Inc., 2004 UT App 162, 126, 92 P.3d 768 (emphasis omitted) (quoting WebBank v. American Gen. Annmwity Serv. Corp., 2002 UT 88, ¶20, 54 P.3d 1139).
117 The release language at issue here states: "[Golf] understand[s] and agree[s] that this is a release of all counterclaims against [Richins], as set forth above, and includes, but is not limited to, ... attorneys fees relating to [the] counterclaim[s]...." After trial, Golf sought recovery of the attorney fees and costs incurred in the defense of the action and also for attorney fees and costs incurred in furtherance of both the defense and the counterclaim.
{18 Richins argues that the Contested Fees were waived because the Release should be interpreted as covering attorney fees relating in any way to the counterclaim. In contrast, Golf contends that the provision should be interpreted as if it read "attorneys fees relating solely to the counterclaim." Thus, it appears that the Release "is capable of more than one reasonable interpretation." 1 Novell, Inc., 2004 UT App 162, 126, 92 P.3d 768 (internal quotation marks omit*1284ted). The trial court never resolved this dispute directly, ruling instead:
The Court need not determine what the parties intended by using the phrase "attorney fees relating to counterclaim." Ri-chins Drilling has never contended that the release afforded it broader protection against liability for attorney's fees than that permitted under Utah statutes and case law. Therefore, any such argument is waived.
The majority appears to agree.
T19 I dissent from that portion of the decision of my colleagues because I believe the intent of the parties governs which fees and costs were waived. See, eg., Softsolu-tions, Inc. v. Brigham Young Univ., 2000 UT 46, ¶41, 1 P.3d 1095 ("If a contract provides for attorney fees, the award 'is allowed only in accordance with the terms of the contract.'" (quoting Dixie State Bank v. Bracken, 764 P.2d 985, 988 (Utah 1988))). Only after that question is answered is the trial court free to apply statutory and prece-dential guidance on how to implement the parties' intent. If the parties here intended to waive all fees and costs related in any way to the counterclaim, the Contested Fees were not properly awarded to Golf. However, if only fees and costs incurred solely in prosecution of the counterclaim were intended to be waived, all of the Contested Fees would be recoverable and no further allocation would be necessary. Finally, the parties may have intended that fees and costs primarily related to the counterclaim were waived, or that such mingled fees be allocated proportionately. Without first determining the intent of the parties on the issue, I believe that the application of the rules of allocation are premature. Therefore, I would remand for further proceedings on this issue.

. Golf argues that it is not reasonable to interpret the Release as waiving significant amounts of fees and costs for a settlement payment on the counterclaim of only $10,000. Golf may be correct, and the trial court may find the "context" of the contract compelling in determining precisely what the parties intended. See Novell, Inc. v. Canopy Group, Inc., 2004 UT App 162, 126, 92 P.3d 768. Nevertheless, I would allow the trial court to make that determination in the first instance.