Court Opinion

ID: 5139127
Source: CourtListenerOpinion
Date Created: 2021-12-21 15:32:58.387626+00
Date Added: 2024-06-11T08:24:15.020547
License: Public Domain

2020 UT App 54

              THE UTAH COURT OF APPEALS

  IN RE EXCESS PROCEEDS FROM THE FORECLOSURE OF PROPERTY
    LOCATED AT 1107 SNOWBERRY STREET, PARK CITY, UTAH

            OCEAN 18 LLC; AND AMIR HECHTER,
                       Appellants,
                           v.
     OVERAGE REFUND SPECIALISTS LLC; AND BRIAN DOWD,
                       Appellees.

                           Opinion
                      No. 20190257-CA
                      Filed April 2, 2020

        Third District Court, Silver Summit Department
               The Honorable Kent R. Holmberg
                         No. 180500253

        Troy L. Booher, Beth E. Kennedy, and Kenyon D.
                 Dove, Attorneys for Appellants
         R. Spencer MacDonald and Elizabeth M. Peck,
                    Attorneys for Appellees

JUDGE RYAN M. HARRIS authored this Opinion, in which JUDGES
        KATE APPLEBY and DIANA HAGEN concurred.

HARRIS, Judge:

¶1    In 2006, a property owner (Owner) borrowed $500,000
from Instant Mortgage Lending, Inc. (IML); the loan was
memorialized in a promissory note in favor of IML. The parties
intended the loan to be secured by a deed of trust on Owner’s
home (the Property), but on the first page of the deed (Trust
Deed), Instant Funding, L.L.C. (Instant Funding)—and not
IML—was listed as the “Beneficiary,” even though the Trust
Deed later defined the term “Beneficiary” as the “owner and
holder . . . of the note secured hereby.”
                         In re Foreclosure

¶2     Several years later, in 2018, the Property was sold, and
after certain priority lienholders were paid, more than $273,000
of excess proceeds remain to be distributed. Appellants Ocean 18
LLC and Amir Hechter (collectively, Ocean 18) purport to be the
successors-in-interest to IML, and claim an entitlement to those
proceeds. Ocean 18’s claim is contested by two other lower-
priority claimants, who assert that—due to Instant Funding
being listed as the beneficiary on the first page of the Trust
Deed—IML never had any claim to the Property to begin with,
and therefore could not have conveyed anything to Ocean 18.
The district court, after considering briefing and holding oral
argument, agreed with the lower-priority claimants. It
determined as a matter of law that Instant Funding was the
beneficiary of the Trust Deed, declared Ocean 18’s claim invalid,
and awarded the proceeds to the lower-priority claimants.
Ocean 18 now appeals.

¶3     We conclude that the Trust Deed is ambiguous regarding
the identity of its beneficiary, but determine that we can resolve
at least some of that ambiguity on the record before us. As a
matter of law and undisputed fact, Instant Funding was never
intended to be the beneficiary of the Trust Deed and, further, at
the time the deed was created the parties intended for IML to be
the beneficiary. Beyond that, however, the record before us does
not permit resolution of this case as a matter of law, and we
therefore reverse and remand for further proceedings in order
to, among other things, determine whether Ocean 18 is the valid
successor-in-interest to the actual beneficiary of the Trust Deed.

                        BACKGROUND

¶4     In early 2006, IML loaned $500,000 to Owner, who
executed a promissory note (the Note) promising to repay the
loan; the Note lists “Instant Mortgage Lending, Inc.” as the
lender and holder of the Note. In connection with the loan
transaction, Owner also executed the Trust Deed, granting a
security interest in the Property—a home located in the

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                          In re Foreclosure

Glenwild area near Park City, Utah—to an entity. On February
24, 2006, just a few days after its execution, the Trust Deed was
duly recorded with the Summit County Recorder’s Office. At
issue in this case, among other things, is the identity of the entity
to whom Owner granted this security interest.

¶5     In its first paragraph, the Trust Deed proclaims that
Owner is granting the security interest to “Instant Funding,
L.L.C., a Nevada limited liability company, as Beneficiary,
whose mailing address is Instant Mortgage Lending, a California
corporation, 5415 Oberlin Drive, San Diego, CA 92121.”
However, on its last page, in paragraph 16, the Trust Deed states
that “[t]he term ‘Beneficiary’ shall mean the owner and holder,
including any pledgee, of the note secured hereby.”

¶6     The original Note indicates that its holder is “Instant
Mortgage Lending, Inc.” But the Note was amended on seven
future occasions, beginning on August 28, 2006, and never again
did the drafters indicate that the holder was “Instant Mortgage
Lending, Inc.” Instead, the holder is listed, variably, as “Instant
Mortgage Lending,” “Instant Mortgage Lending Corp.,” and
“Nationwide Servicing Center, Inc.” It is undisputed that the
“owner and holder” of the Note secured by the Trust Deed was
never Instant Funding, and that Instant Funding was not the
entity that loaned $500,000 to Owner. But the parties do not
agree that the Note (and its seven amendments) makes clear
who the “owner and holder” actually is.

¶7     Soon after the Trust Deed was recorded, interested parties
recognized that it had not been drafted with precision. In late
May 2006, the trustee recorded a document entitled “Notice of
Correction of Beneficiary Address in Trust Deed.” In that
document, Instant Funding was again listed as beneficiary in the
opening paragraph, but its mailing address was changed to
eliminate all reference to “Instant Mortgage Lending, a
California corporation.” This time, the “correct mailing address
for Beneficiary” was listed simply as “Instant Funding, LLC,
5415 Oberlin Drive, San Diego, CA 92121.”

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                         In re Foreclosure

¶8     A little more than two months later, on August 3, 2006,
the trustee recorded another document, this one entitled “Notice
of Clerical Correction to Trust Deed to Conform with Record.” In
this document, the trustee purported to amend both the name
and the mailing address of the beneficiary. The document
proclaims that “[n]otice is hereby given of the correct name and
mailing address for Beneficiary, Instant Mortgage Lending
Corp., a California corporation, also known as Instant Mortgage
Lending, Inc.,” whose mailing address is “3830 Valley Centre
Dr., Ste 705, Pmb 182, San Diego CA 92130.” The document
states that “[t]he incorrect reference in said Deed of Trust to
Instant Funding, LLC, as Beneficiary . . . is hereby deleted and
corrected by this Notice.” The document was executed only by
the trustee and not by Instant Funding; in fact, the record
submitted to us on appeal does not contain any document
signed by Instant Funding in which it purported to give up any
interest it might have had in the original Trust Deed.

¶9     Several years later, in 2012, IML assigned its interest in
the Note and Trust Deed to Ocean 18 and three other
individuals; in 2013, the three individuals assigned their interest
to Ocean 18 and Amir Hechter, who now purport to own all of
IML’s interest—whatever that interest might be—in the Note
and Trust Deed.

¶10 In 2018, a priority lienholder foreclosed on the Property,
which was then sold at a trustee’s sale. After the priority
lienholder was paid, the sale trustee deposited the excess
proceeds—over $286,000—with the district court pursuant to
Utah law, which allows a trustee the “discretion” to “deposit the
balance of the proceeds with the clerk of the district court of the
county in which the sale took place.” See Utah Code Ann. § 57-1-
29(1)(a)(iii)(B) (LexisNexis 2017).

¶11 Following deposit of the funds, the district court sent
notice to all individuals and entities known to possess a possible
interest in the excess proceeds. Five claimants submitted claims,
two of which were relatively small and unquestionably had

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                         In re Foreclosure

priority. After payment of the two smaller claims, over $273,000
of proceeds remained, and three claimants sought the money:

       • Ocean 18, claiming to be the successor-in-
         interest to IML, made a claim dating to 2006 in
         the amount of over $396,000.

       • Brian Dowd, a judgment creditor of Owner
         dating to 2018, made a claim in the amount of
         $125,000.

       • Overage     Refund      Specialists  (Overage),
         successor-in-interest to Owner, made a claim
         for any proceeds left over once all of the other
         valid claims are paid.

If Ocean 18’s claim is valid, its claim has priority over the other
two remaining claims, and is of sufficient size to use up all of the
remaining excess proceeds, leaving Dowd and Overage with
nothing. On the other hand, if Ocean 18’s claim is not valid, it
will receive nothing, Dowd will be fully paid, and Overage will
receive whatever remains, something on the order of $148,000. It
thus became important for the district court to determine
whether Ocean 18’s claim is valid.

¶12 To that end, the district court invited the parties to submit
briefs on, among other issues, the question of the validity of
Ocean 18’s claim. Dowd and Overage opposed Ocean 18’s claim,
asserting that Ocean 18’s chain of title was “rife with
inconsistencies,” and pointing out that Instant Funding—and not
IML, Ocean 18’s predecessor-in-interest—was the listed
beneficiary on the first page of the original Trust Deed. They
further asserted that the inconsistencies could not have been
corrected by the two post-transaction documents purporting to
correct the record, because those documents were not signed by
Instant Funding, and because the problem the documents were
trying to fix was no mere “clerical” error. Dowd and Overage

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                         In re Foreclosure

also claimed that the later conveyances that purportedly passed
IML’s interest on to Ocean 18 were defective.

¶13 In response, Ocean 18 asserted that the mistake in setting
forth the identity of the beneficiary on the Trust Deed had been a
“minor scrivener error,” and submitted a sworn declaration
from its president—an individual who was formerly the
president of IML, and who also once “originated loans with a
group named Instant Funding, LLC”—who averred that Instant
Funding was “mistakenly listed as the beneficiary” on the Trust
Deed, and that this “identification was erroneous and was
subsequently corrected” by the August 2006 recording of the
“Notice of Clerical Correction.” Other than this declaration, no
party submitted any extrinsic evidence of what the parties to the
Note and Trust Deed may have intended. And no party
expressly claimed that the Trust Deed was ambiguous.

¶14 After full briefing, the district court heard oral argument
from counsel. Although the record submitted to us does not
contain a transcript of that hearing, the district court issued a
four-page written ruling a few weeks later, and therein noted
that, at the hearing, “counsel confirmed to the Court that they
were submitting the issues regarding the priority of their
respective claims on their written briefs and that an evidentiary
hearing was unnecessary.” And our review of the record also
fails to turn up any request by any party for additional
discovery, whether filed pursuant to rule 56(d) of the Utah Rules
of Civil Procedure or in any other manner.

¶15 In the court’s written decision, it ruled that IML had no
interest in the Trust Deed, because the first page of that
document listed Instant Funding—and not IML—as the
beneficiary. Apparently persuaded by the conclusiveness of the
declaration on the Deed’s first page, the court stated that, “in the
absence of a valid conveyance or assignment of interest from
[Instant Funding] to Instant Mortgage Lending, Inc./Instant
Mortgage Lending Corp., [Instant Funding] remained the
beneficiary under the” Trust Deed. The court concluded that the

20190257-CA                     6                 2020 UT App 54
                         In re Foreclosure

August 2006 “correction” did not change the situation, because
misidentification of a beneficiary is not a clerical or scrivener’s
error that can be addressed without a document signed by
Instant Funding. In summary, the court ruled that IML “simply
had no interest to convey” to Ocean 18 in the subsequent
transactions. The court did not consider whether the Trust Deed
was ambiguous, and (given the nature of its ruling) did not
examine the validity of the 2012 and 2013 conveyances.

¶16 After making its ruling, the district court issued an order
and judgment distributing $125,000 of the excess proceeds to
Dowd, over $148,000 to Overage, and nothing to Ocean 18. The
district court later stayed enforcement of that judgment, pending
the outcome of this appeal.

             ISSUE AND STANDARD OF REVIEW

¶17 Ocean 18 appeals from the district court’s judgment, and
asserts that the court erred in concluding, as a matter of law, that
it had no interest in the Trust Deed. 1 Both parties assert that the

1. Overage and Dowd contend that Ocean 18 has failed to
preserve its challenge for appellate review, asserting that Ocean
18 never asked the district court to “look to the language of the
[Trust D]eed as a whole” or to construe the Trust Deed “to give
effect to the intent of the parties.” Overage and Dowd
misunderstand the scope of an appellant’s preservation
obligation. Our preservation jurisprudence draws a distinction
between “issues” (which must be preserved) and “arguments”
(which consist merely of authority in support of a party’s
position on an issue, and do not need to be specifically made at
the trial level in order to be included in a brief on appeal). See
Gressman v. State, 2013 UT 63, ¶ 45, 323 P.3d 998 (“Issues must be
preserved, not arguments for or against a particular ruling on an
issue raised below.”). The issues preserved for appeal include
both whether IML was the beneficiary of the Trust Deed and, if
                                                    (continued…)

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                         In re Foreclosure

question presented is a mixed question of law and fact, in which
case we would review the district court’s factual findings for
clear error and its legal determinations for correctness. But the
district court did not purport to make any factual findings;
indeed, the court decided this matter after considering only
briefing and oral argument, without taking evidence. In essence,
although neither the parties nor the court framed it this way, the
court made a summary judgment ruling in which it determined,
as a matter of law and undisputed fact, that Ocean 18 had no
interest in the Trust Deed. It is of course well-settled that we
review a district court’s summary judgment rulings for
correctness, see Zundel v. Magana, 2015 UT App 69, ¶ 4, 347 P.3d
444, and we apply that standard of review to the district court’s
ruling in this case.

                           ANALYSIS

¶18 After briefing and argument, but without the benefit of an
evidentiary hearing, the district court issued an order reaching
two important conclusions. First, the court determined that
Instant Funding was the beneficiary of the 2006 Trust Deed.
Second, based on its first conclusion, the court then determined
that IML “had no interest [in the Trust Deed] to convey,” and
that therefore Ocean 18—as purported successor-in-interest to
IML—had no interest in the Trust Deed either. Ocean 18
challenges both of those conclusions, and not only asks this court
to reverse them but also asks us to determine that it should

(…continued)
so, whether Ocean 18 succeeded to IML’s interest under the
Trust Deed. On appeal, Ocean 18 is entitled to make new
arguments, and cite new authorities, in support of the issues it
raised below, even if it did not cite those authorities at the
district court level. We have no trouble concluding that the
issues presented in Ocean 18’s appeal were properly preserved
for our review.

20190257-CA                     8               2020 UT App 54
                         In re Foreclosure

prevail as a matter of law. We are not willing to go as far, at this
point and on this record, as Ocean 18 asks us to. But we agree
with Ocean 18 that the district court’s first conclusion was
infirm, and we conclude that questions of fact preclude entry of
judgment, at least on the record before us, in either party’s favor
on the second issue.

¶19 We begin our analysis by setting forth applicable
principles of contractual interpretation that guide our analysis.
We then analyze the first issue—whether the district court
correctly determined that Instant Funding was the beneficiary of
the Trust Deed—and conclude that the district court erred, and
that actually, as a matter of law, Instant Funding was not the
beneficiary of the Trust Deed. After that, we address the second
question, and determine, as a matter of law, that—at least at the
time the Trust Deed was executed—the parties intended for IML
to be the beneficiary. However, the record before us does not
permit us to conclusively determine, as a matter of law, whether
IML validly conveyed any interest to Ocean 18. Accordingly, we
must remand for further proceedings.

                                 A

¶20 At their most basic level, deeds are simply a particular
type of contract between parties. Indeed, Utah appellate courts
have long made clear that “deeds are to be construed like other
written instruments,” see Keith v. Mountain Resorts Dev. LLC, 2014
UT 32, ¶ 21, 337 P.3d 213 (quotation simplified), “according to
ordinary rules of contract construction,” Panos v. Olsen & Assocs.
Constr., Inc., 2005 UT App 446, ¶ 15, 123 P.3d 816 (quotation
simplified); Keith, 2014 UT 32, ¶ 21 (“Courts interpreting a deed
should employ all appropriate tools of construction to arrive at
the best interpretation of its language.” (quotation simplified)).
Therefore, we must construe the Trust Deed according to
generally applicable rules of contractual interpretation.

¶21 Under those rules, the “overriding principle” is that the
“intentions of the parties are controlling.” See Layton City v.

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                          In re Foreclosure

Stevenson, 2014 UT 37, ¶ 21, 337 P.3d 242 (quotation simplified);
see also Mind & Motion Utah Invs., LLC v. Celtic Bank Corp., 2016
UT 6, ¶ 24, 367 P.3d 994 (“When interpreting a contract, our task
is to ascertain the parties’ intent.”); Morris v. Off-Piste Capital
LLC, 2018 UT App 7, ¶ 21, 418 P.3d 66 (stating that, when
interpreting an assignment of a deed, “courts endeavor to carry
out the grantor’s intention whenever it is possible” (quotation
simplified)). And in attempting to ascertain the intent of the
contracting parties, the appropriate place to begin is with the
language the parties agreed to use. See Central Fla. Invs., Inc. v.
Parkwest Assocs., 2002 UT 3, ¶ 12, 40 P.3d 599 (“We first look to
the plain language within the four corners of the agreement to
determine the intentions of the parties.”); see also Mind & Motion,
2016 UT 6, ¶ 24 (stating that “the best indication of the parties’
intent is the ordinary meaning of the contract’s terms”). In
evaluating the language of a contract or deed, courts examine
the instrument in its entirety, considering “each contract
provision in relation to all of the others, with a view toward
giving effect to all and ignoring none.” See Café Rio, Inc. v. Larkin-
Gifford-Overton, LLC, 2009 UT 27, ¶ 25, 207 P.3d 1235 (quotation
simplified); see also Hartman v. Potter, 596 P.2d 653, 656 (Utah
1979) (stating that “the cardinal rule of deed construction” is that
“the intention of the parties as drawn from the whole deed must
govern”). Before concluding that a contract is ambiguous, a court
must first attempt to “harmoniz[e] conflicting or apparently
ambiguous contract language,” an exercise in which “we
examine the entire contract and all of its parts in relation to each
other and give a reasonable construction of the contract as a
whole to determine the parties’ intent.” Gillmor v. Macey, 2005
UT App 351, ¶ 19, 121 P.3d 57 (quotation simplified).

¶22 In many cases, we need look no further than the plain
language of the contract, because that language may
unambiguously tell us what the parties intended. Indeed, where
the language used in the contract is “facial[ly]” unambiguous, see
Daines v. Vincent, 2008 UT 51, ¶¶ 25–26, 190 P.3d 1269, “the
parties’ intentions are determined from the plain meaning of the
contractual language, and the contract may be interpreted as a

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                          In re Foreclosure

matter of law,” without resort to parol evidence, see Café Rio,
2009 UT 27, ¶ 25 (quotation simplified). But in other instances—
those in which the contractual language is facially ambiguous—a
court will not be able to tell, simply from an examination of the
contract’s plain language, what the parties intended. In those
situations, “parol evidence of the parties’ intentions should be
admitted.” See Daines, 2008 UT 51, ¶ 25; see also Central Fla. Invs.,
2002 UT 3, ¶ 12 (“If the language within the four corners of the
contract is ambiguous, . . . extrinsic evidence must be looked to
in order to determine the intentions of the parties.”).

¶23 Thus, one of the first questions a court must consider in
interpreting a contract is whether the contract is ambiguous.
Under Utah law, whether a contract is (or is not) ambiguous is
“a question of law to be determined by the judge.” Daines, 2008
UT 51, ¶ 25; see also WebBank v. American Gen. Annuity Service
Corp., 2002 UT 88, ¶ 22, 54 P.3d 1139 (“Whether an ambiguity
exists in a contract is a question of law.” (quotation simplified)).
“A contract is facially ambiguous if its terms are capable of more
than one reasonable interpretation because of uncertain
meanings of terms, missing terms, or other facial deficiencies.”
Mind & Motion, 2016 UT 6, ¶ 24 (quotation simplified). A
“reasonable interpretation” is one “that cannot be ruled out,
after considering the natural meaning of the words in the
contract provision in context of the contract as a whole, as one
the parties could have reasonably intended.” See Brady v. Park,
2019 UT 16, ¶ 55, 445 P.3d 395. Crucially, ambiguity is present
only if both proffered interpretations of the contract’s language
are “tenable” and in keeping with the contract’s language. See
R & R Energies v. Mother Earth Indus., 936 P.2d 1068, 1074 (Utah
1997) (stating that a contract is “not necessarily ambiguous just
because one party gives [a] provision a different meaning than
another party does,” but instead, “the contrary positions of the
parties must each be tenable” (quotation simplified)); see also
Brady, 2019 UT 16, ¶ 55 (stating that if “either of the competing
interpretations could reasonably have been what the parties
intended when they entered into the contract, then the contract
is ambiguous”). A contract containing terms that are “in

20190257-CA                     11                 2020 UT App 54
                           In re Foreclosure

irreconcilable conflict” and cannot be harmonized is ambiguous.
See American Bonding Co. v. Nelson, 763 P.2d 814, 816 (Utah Ct.
App. 1988).

                                  B

¶24 With those background principles in mind, we proceed to
examine the language of the Trust Deed. The parties advance
differing positions as to the Trust Deed’s clarity. Before the
district court, although both sides advocated for diametrically
opposed interpretations of the Trust Deed and associated
documents, neither side expressly argued that the recorded
documents, including the Trust Deed, were ambiguous. On
appeal, neither side uses any variant of the word “ambiguous”
in their briefs, though Dowd and Overage argue that “the intent
of the parties is anything but clear” in the recorded documents,
which they describe as “exceedingly confusing.” Ocean 18, on
the other hand, continues to maintain that the recorded
documents at issue in this case are models of “clarity,” are “not
confusing,” and clearly indicate an intent to make IML the
beneficiary of the Trust Deed.

¶25 Parties do not need to use the word “ambiguous” in order
for a court to determine that a document is indeed ambiguous.
See, e.g., Waste Connections of Kansas, Inc. v. Ritchie Corp., 298 P.3d
250, 265 (Kan. 2013) (stating that “the parties’ agreement or lack
of agreement on the existence of ambiguity does not compel the
court to arrive at the same conclusion”); North Central Oil Corp. v.
Louisiana Land & Expl. Co., 22 S.W.3d 572, 575 (Tex. App. 2000)
(“A court may conclude that a contract is ambiguous even in the
absence of such a pleading by either party.”). If both sides
advance interpretations of the Trust Deed that are plausible and
reasonably supported by the document’s language, then the
document is ambiguous, even if neither party actually uses that
label to describe the document. Indeed, that is the very definition
of contractual ambiguity. See Mind & Motion, 2016 UT 6, ¶ 24 (“A
contract is facially ambiguous if its terms are capable of more
than one reasonable interpretation . . . .” (quotation simplified)).

20190257-CA                      12                 2020 UT App 54
                         In re Foreclosure

In our view, both sides espouse interpretations of the Trust Deed
that are plausible and reasonably supported by its language, and
we therefore conclude that the Trust Deed is ambiguous.

¶26 Dowd and Overage advance an interpretation that relies
heavily on the first paragraph of the Trust Deed, which
proclaims that Instant Funding (and not IML) is the beneficiary.
Dowd and Overage contend that this paragraph is controlling,
and that we need look no further in ascertaining the parties’
intentions regarding the identity of the beneficiary. We
acknowledge that language used in the first paragraph of the
Trust Deed strongly supports Dowd’s and Overage’s position;
indeed, if there were no contrary provisions, we would be
inclined to agree with their interpretation.

¶27 But there are contrary provisions, and we must examine
the Trust Deed as a whole. See Hartman, 596 P.2d at 656
(explaining “the cardinal rule of deed construction that the
intention of the parties as drawn from the whole deed must
govern” (quotation simplified)). Indeed, another provision of the
Trust Deed—paragraph 16, a provision upon which Ocean 18
heavily relies—states that the “term ‘Beneficiary’ shall mean the
owner and holder of the [N]ote secured hereby.” 2 A separate

2. Regardless of whether the Note is considered part of the Trust
Deed, or extrinsic evidence of the intent of the drafters of the
Trust Deed, we may consider the language of the Note in the
process of evaluating whether the Trust Deed is ambiguous. The
Trust Deed repeatedly and expressly refers to the Note. Indeed,
the Trust Deed proclaims that its purpose is to “secur[e] . . . the
payment of indebtedness evidenced by” the Note; specifies that
“Beneficiary is relying upon this Trust Deed as an inducement to
make the subject loan” to Owner, “and that absent the grant of a
security interest in the Property in favor of Beneficiary pursuant
to this Trust Deed . . . Beneficiary would not have made the
subject loan” to Owner; and expressly ties the definition of
                                                     (continued…)

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                         In re Foreclosure

provision of the Trust Deed similarly relies upon the Note,
emphasizing that the beneficiary of the Trust Deed “is relying
upon this Trust Deed as an inducement to make the subject
loan” to Owner, “and that absent the grant of a security interest
in the Property in favor of Beneficiary pursuant to this Trust
Deed that Beneficiary would not have made the subject loan” to
Owner. And the Note does not—in any of its iterations or
amendments—make any mention of Instant Funding as its
owner or holder.

¶28 In our view, the language of the Trust Deed is ambiguous
with regard to the identity of the beneficiary. We certainly
appreciate the position taken by Dowd and Overage—and
adopted by the district court—that the Trust Deed’s first
paragraph should control, and that paragraph clearly announces

(…continued)
“Beneficiary” to the Note, indicating that the beneficiary under
the Trust Deed is the “owner and holder” of the Note. “Parties
may incorporate the terms of another document by reference
into their contract,” see Northgate Village Dev., LC v. Orem City,
2014 UT App 86, ¶ 26, 325 P.3d 123 (quotation simplified), and
the parties to the transaction at issue here appear to have
incorporated the Note into the Trust Deed such that we may
consider the language of the Note in determining whether the
Trust Deed is ambiguous. Alternatively, Utah appellate courts
have made clear that, even in the process of considering whether
a document is ambiguous, extrinsic evidence may be considered,
so long as the evidence advances an interpretation of the text
that is “reasonably supported by the language of the contract.”
See Daines v. Vincent, 2008 UT 51, ¶ 30, 190 P.3d 1269 (quotation
simplified). In our view, Ocean 18’s interpretation is reasonably
supported by language in the Trust Deed that expressly refers to
the Note, and therefore we may examine the language of the
Note in connection with our examination of the Trust Deed’s
potential ambiguity.

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                          In re Foreclosure

that Instant Funding is the beneficiary of the Trust Deed. But we
must review the documents in their entirety and construe them
as a whole, and there are other provisions that point in the other
direction, including the provisions that refer to the Note. Instant
Funding was clearly not the entity that lent Owner $500,000
pursuant to the Note, and is therefore clearly not the entity
referred to in paragraph 16 of the Trust Deed, which defines
“Beneficiary” by reference to the Note. When we view the Trust
Deed in its entirety, some of its terms are “in irreconcilable
conflict” and cannot be harmonized through examination of the
text alone. See American Bonding Co., 763 P.2d at 816. Thus, we
can come to no other conclusion but that the text of the Trust
Deed is facially ambiguous as to the identity of its beneficiary.

                                 C

¶29 If a court determines, as a legal matter, that a contract is
facially ambiguous, then a question of fact exists as to the
parties’ intentions. See Daines v. Vincent, 2008 UT 51, ¶ 25, 190
P.3d 1269; see also WebBank v. American Gen. Annuity Service
Corp., 2002 UT 88, ¶ 22, 54 P.3d 1139 (“When ambiguity exists,
the intent of the parties becomes a question of fact.” (quotation
simplified)). As noted, at this stage of the proceedings, “parol
evidence of the parties’ intentions should be admitted.” Daines,
2008 UT 51, ¶ 25 (quotation simplified). As with any question of
fact, the resolution of the question of the parties’ intentions
regarding an ambiguous contract is usually reserved for the
factfinder after trial. See Brady, 2019 UT 16, ¶ 53 n.37 (“When
ambiguity does exist, the intent of the parties is a question of fact
to be determined by the jury.” (quotation simplified)). But even
questions of fact may be decided as a matter of law at the
summary judgment stage, so long as the parol evidence
submitted by the parties is so one-sided that a reasonable
factfinder could reach but one conclusion. See Cross v. Olsen, 2013
UT App 135, ¶ 29, 303 P.3d 1030 (“Summary judgment is
appropriate on . . . factual questions when they fall on either end
of a factual continuum: when there could be no reasonable
difference of opinion, or when the facts are so tenuous, vague, or

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                         In re Foreclosure

insufficiently established that determining the factual issue
becomes completely speculative.” (quotation simplified)); see also
Northgate Village Dev., LC v. Orem City, 2014 UT App 86, ¶ 35, 325
P.3d 123 (stating that, “when facial ambiguity exists and the
competing interpretations both enjoy evidentiary support, the
parties’ intent becomes a question of fact to be determined by the
jury” (quotation simplified)).

¶30 We next proceed to examine the extrinsic evidence
regarding the identity of the beneficiary under the Trust Deed.
We first determine that the extrinsic evidence is clear and one-
sided enough to allow us to conclude, as a matter of law, that
Instant Funding was not the beneficiary under the Trust Deed.
We next determine that the extrinsic evidence is clear enough to
allow us to also conclude, as a matter of law, that the beneficiary
under the Trust Deed—at least at the time the Trust Deed was
executed—was IML. However, the record before us does not
allow us to make further determinations as a matter of law on
other questions pertinent to this case, including whether IML
remained the beneficiary in light of the various amendments to
the Note, and whether the 2012 and 2013 conveyances of IML’s
interest in the Trust Deed to Ocean 18 were valid.

                                1

¶31 The universe of extrinsic evidence submitted in this case
is not extensive. Although the parties submitted briefs to the
district court on the question of the identity of the beneficiary
under the Trust Deed, the record before us does not indicate that
the parties conducted any discovery at all on the question. No
party noticed or took any depositions, and the record is unclear
as to whether any written discovery requests were exchanged.
The parties appear to have relied heavily on the available
documents, including the Note (and its amendments), the Trust
Deed, and the correction documents filed in 2006. Indeed, at oral
argument before the district court, the parties each apparently
turned down the opportunity to present evidence to the court,

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                         In re Foreclosure

and no party suggested to the court that it should hold off on
deciding the matter until further discovery could be had.

¶32 In connection with the briefing submitted to the district
court, the parties identified only two items that clearly fall into
the category of extrinsic evidence. 3 First, Ocean 18 asked the
court to take into account the parties’ course of dealing,
including their actions before and after IML’s loan to Owner;
specifically, Ocean 18 points out that it is undisputed that IML,
and not Instant Funding, loaned $500,000 to Owner, and posits
that IML would not have done that if the parties had not
intended for IML to be the beneficiary under the Trust Deed.
Conversely, Ocean 18 notes that, on this record, there is no
evidence that Instant Funding ever loaned Owner any money,
and a determination that Instant Funding is the beneficiary of
the Trust Deed would grant Instant Funding a windfall for
doing, it seems, nothing at all. That outcome makes little sense,
and we agree with Ocean 18’s assertion that the parties’ course
of dealing strongly indicates that Instant Funding was not the
intended beneficiary.

¶33 Second, Ocean 18 submitted a sworn declaration filed by
its president—an individual who was formerly the president of
IML, and who also once “originated loans with a group named
Instant Funding, LLC”—in which he avers that Instant Funding
was “mistakenly listed as the beneficiary” on the Trust Deed,
and states that this “identification was erroneous and was
subsequently corrected” by the August 2006 recording of the
“Notice of Clerical Correction.” This declaration stands

3. Additional useful extrinsic evidence may not exist, given the
passage of time since the documents were executed. Indeed, at
oral argument on appeal, the court asked counsel for Overage to
provide examples of where—or how—Dowd and Overage
might look for additional extrinsic evidence that could be used
to supplement the record and bolster their position, and counsel
was unable to identify additional potential sources of evidence.

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                         In re Foreclosure

undisputed, on this record; no other individual involved in the
drafting of the documents has come forward to contradict the
declaration submitted by Ocean 18.

¶34 When we examine this body of extrinsic evidence, it leads
to but one conclusion: that the drafters of the Trust Deed made a
mistake when they indicated, on the document’s first line, that
Instant Funding was to be the beneficiary under the Trust Deed.
The only party involved in drafting the documents that has been
heard from on the matter has averred that this is indeed what
happened—that a mistake was made in drafting the Trust Deed,
and that the drafters’ original intent was for IML, and not Instant
Funding, to be the beneficiary. This testimony squares with the
undisputed course of dealing between IML and Owner: that
soon after execution of the Note and Trust Deed, IML—and not
Instant Funding—loaned Owner $500,000. Indeed, the entire
structure of the transaction appears aimed at securing IML’s
loan to Owner.

¶35 Dowd and Overage correctly point out that the May 2006
correction document sits on the other side of the evidentiary
ledger. In that document, executed just three months after the
Trust Deed, the trustee again indicated that Instant Funding
(albeit this time with a different mailing address) was the
beneficiary under the Trust Deed. But the problem with relying
on the May 2006 correction document in this manner is that the
trustee soon corrected the correction. In early August 2006, the
trustee filed a second correction document, this time clarifying
that Instant Funding was not the beneficiary under the Trust
Deed, and that “Instant Mortgage Lending Corp.” was the
“correct name” of the beneficiary. And, as noted above, the only
sworn testimony in the record about the meaning of these
documents is that the August 2006 document correctly reflects

20190257-CA                    18                2020 UT App 54
                           In re Foreclosure

the intentions of the drafters regarding the identity of the Trust
Deed’s beneficiary. 4

¶36 In sum, the available extrinsic evidence on the issue of
whether Instant Funding was ever intended to be the beneficiary
under the Trust Deed points strongly in one direction: Instant
Funding was not intended to be the beneficiary. Indeed, in our
view, the evidence points so strongly in that direction that we
can conclude, as a matter of law, that Instant Funding was not
the beneficiary of the Trust Deed.

4. Ocean 18 wisely does not argue that the August 2006 notice
cured the problem; instead, on appeal, it asserts merely that
examination of this document can help “confirm[]” the intent of
the parties to the original Trust Deed. Indeed, in our view, the
district court was correct to conclude that listing a different but
existing company as the beneficiary of a trust deed (as opposed
to, say, misspelling the beneficiary’s name, or using a shorthand
term to refer to it, see, e.g., Morris v. Off-Piste Capital LLC, 2018 UT
App 7, ¶ 25, 418 P.3d 66) is no mere scrivener’s error that can be
corrected by the “recording of an affidavit or other appropriate
instrument” not signed by the misidentified party. See Utah
Code Ann. § 57-3-106(9) (LexisNexis 2019) (allowing for “minor
typographical or clerical errors in a document of record [to] be
corrected by the recording of an affidavit or other appropriate
instrument”); see also Pioneer Builders Co. of Nev. v. KDA Corp.,
2012 UT 74, ¶ 58, 292 P.3d 672 (noting that “courts in other
jurisdictions have concluded that significant changes to deeds—
such as the improper characterization of a grantee,” were not
“minor typographical or clerical errors”). Had the Trust Deed
not been ambiguous on the question of the identity of the
beneficiary, it may not have been proper for us to consider the
August 2006 document at all. But because the original Trust
Deed was ambiguous, we can use the August 2006 document to
clarify the ambiguity in the Trust Deed. We therefore view the
2006 document as evidence of the parties’ original intent, rather
than as a document that somehow cured the problem altogether.

20190257-CA                       19                 2020 UT App 54
                         In re Foreclosure

                                2

¶37 For similar reasons, that same limited body of extrinsic
evidence is also clear enough to allow us to determine, as a
matter of law, that—at least at the time the Trust Deed was
executed—IML was the intended beneficiary of the Trust Deed.
As noted, IML was the entity that loaned $500,000 to Owner, and
the undisputed intent of the transaction was for the Trust Deed
to secure the loan made to Owner. This intent is confirmed by
the language of the Trust Deed, including paragraph 16, as well
as by the parties’ course of dealing and by the sworn declaration
submitted by Ocean 18.

                                3

¶38 But that limited body of extrinsic evidence is not sufficient
to allow us to answer other questions pertinent to the outcome of
this case, including these: (1) did IML remain the holder of the
Note, and therefore remain the beneficiary referred to in
paragraph 16 of the Trust Deed?; and (2) if so, did IML properly
transfer its interest in the Trust Deed to Ocean 18, via the 2012
and 2013 transactions?

¶39 With regard to the first question, the Note was amended
seven times, starting on August 28, 2006, about three weeks after
the second correction document was recorded. As discussed
above, the original Note listed “Instant Mortgage Lending, Inc.”
as the lender and holder of the Note. But never again, in any of
the seven amendments, was “Instant Mortgage Lending, Inc.”
listed as the holder of the Note; instead, the holder is listed,
variably, as “Instant Mortgage Lending,” “Instant Mortgage
Lending Corp.,” and “Nationwide Servicing Center, Inc.” And
the record submitted to us contains no extrinsic evidence about
why these amendments were made, what the relationship is
between these entities, or what the intent (if any) was behind the
various amendments. We know nothing about the parties’
course of dealing that would explain these amendments, and the
Ocean 18 declaration does not discuss them.

20190257-CA                    20               2020 UT App 54
                         In re Foreclosure

¶40 As noted, the Trust Deed itself, in paragraph 16, identifies
its beneficiary as the “owner and holder” of the Note. From the
available extrinsic evidence, we know that the holder of the
Note, at the time of its issuance, was IML. But there is evidence
that IML may not have remained the holder of the Note, and
may not have been the holder of the Note in 2012 and 2013 at the
time it purported to convey its interest in the Trust Deed to
Ocean 18. Because the district court determined that IML did not
have any interest in the Trust Deed to begin with, it did not
reach the question of whether IML retained its interest following
the seven amendments to the Note. We simply have no
information to assist us in resolving this ambiguity posed by the
Trust Deed’s reference to the Note.

¶41 Similarly, given the nature of its ruling, the district court
had no occasion to reach the question of whether the 2012 and
2013 conveyances were valid. Dowd and Overage raise several
potential issues with the validity of those conveyances, and
those issues have never been addressed.

¶42 Further proceedings, including possibly discovery (if any
can be had), on these issues is warranted, given that we cannot
resolve them as a matter of law on the record before us.

                         CONCLUSION

¶43 The language of the Trust Deed is ambiguous regarding
the identity of the beneficiary; the document’s first page (listing
Instant Funding as beneficiary) contradicts language elsewhere
in the document, including paragraph 16, where the drafters
indicate an intent that the beneficiary be the owner and holder of
the Note, and it is undisputed that Instant Funding was never
the owner and holder of the Note. Given the universe of extrinsic
evidence submitted to us, we are able to resolve two elements of
the ambiguity as a matter of law: Instant Funding was not the
beneficiary under the Trust Deed, because—at least at the time it
was executed—the beneficiary was IML.

20190257-CA                    21                2020 UT App 54
                        In re Foreclosure

¶44 But we are not able to resolve, as a matter of law,
additional questions pertinent to this case on the record before
us, including whether IML remained the beneficiary of the Trust
Deed following the various amendments to the Note and,
relatedly, whether the 2012 and 2013 conveyances properly
transferred a meaningful interest in the Trust Deed to Ocean 18.
Accordingly, we reverse the district court’s order determining
that Instant Funding was the beneficiary under the Trust Deed
and awarding the excess proceeds to Dowd and Overage, and
we remand for further proceedings consistent with this opinion.

20190257-CA                   22               2020 UT App 54