Court Opinion

ID: 5138205
Source: CourtListenerOpinion
Date Created: 2021-12-21 14:54:42.09031+00
Date Added: 2024-06-11T08:24:07.630386
License: Public Domain

2016 UT App 102

               THE UTAH COURT OF APPEALS

        TELEGRAPH TOWER LLC AND JARED CHRISTIANSEN,
                        Appellants,
                            v.
               CENTURY MORTGAGE LLC, ET AL.,1
                        Appellees.

                            Opinion
                       No. 20140489-CA
                       Filed May 12, 2016

           Fifth District Court, St. George Department
               The Honorable G. Michael Westfall
                The Honorable James L. Shumate2
                           No. 100503310

        Bryce D. Panzer and Brett N. Anderson, Attorneys
                         for Appellants
       Bruce C. Jenkins and Carson B. Bagley, Attorneys for
                       Appellees VF Parties
         Russell S. Mitchell, Attorney for Appellees Lyle
               Stringham and Barbara Stringham
       George A. Hunt and Timothy J. Bywater, Attorneys
         for Appellee Harris Property Investments LLC

1. The parties on appeal are not limited to those listed, but also
include other parties whose names appear on the notice of
appeal or who have otherwise entered appearances in this court.

2. Judge G. Michael Westfall was assigned this case after Judge
James L. Shumate retired from the bench in March 2014. All
orders relevant to this appeal were decided by Judge Shumate.
              Telegraph Tower v. Century Mortgage

JUDGE KATE A. TOOMEY authored this Opinion, in which JUDGE J.
   FREDERIC VOROS JR. and SENIOR JUDGE RUSSELL W. BENCH
                        concurred.3

TOOMEY, Judge:

¶1      Jared Christiansen and Bradley S. Harrell, through their
company Telegraph Tower LLC (collectively, Borrowers), asked
a lending company, Century Mortgage, for a loan to complete a
construction project (the Project). Century Mortgage agreed and
sought money from various individuals and business entities
(collectively, Investors) to fund the loan. In essence, Century
Mortgage acted as a middleman between Borrowers and
Investors. It executed an agreement with Borrowers promising to
make funds available as needed for the Project. It also executed
an agreement with Investors, agreeing to service the loan,
including preparing all necessary paperwork and obtaining
information about the Project. At some point, Century Mortgage
misplaced the money4 and construction on the Project was
forced to stop for lack of funds. Borrowers sued Investors and
Century Mortgage under various legal theories. Particularly,
Borrowers claimed Investors were vicariously liable for the
tortious actions of Investors’ agent, Century Mortgage. Investors
responded that Century Mortgage was Borrowers’ agent and all
duties were fulfilled when Investors deposited their
contributions to the loan in Century Mortgage’s bank account.

3. Senior Judge Russell W. Bench sat by special assignment as
authorized by law. See generally Utah R. Jud. Admin. 11-201(6).

4. It is unclear what happened to the loan proceeds. When
Borrowers asked Century Mortgage about the money, one of
Century Mortgage’s principals, Donald Larkin, responded that
the ‚*m+oney is where it is . . . we intend to get *it+ for you.‛
Larkin later explained, ‚Let’s just say that we tried something
and it didn’t work out like we planned,‛ and there is ‚no money
in the account.‛

20140489-CA                    2               2016 UT App 102
               Telegraph Tower v. Century Mortgage

¶2      In this appeal, we must determine whether the district
court correctly granted summary judgment on all relevant
causes of action. We affirm in part and reverse in part. Upon
review of the issues, we conclude the court improperly granted
summary judgment before deciding an agency issue and
improperly limited Borrowers’ damages. But we affirm the
court’s conclusion that Investors are not jointly and severally
liable.

                        BACKGROUND

                      I. Factual Background

¶3     Because of the complexities of this case, we first introduce
the parties involved and describe their relationships with one
another, then describe the procedural posture that gave rise to
this appeal. We recite only the facts and procedural background
relevant to this appeal.

Century Mortgage and Borrowers

¶4      In 2008, Borrowers sought to develop real property
Christiansen owned on Telegraph Street in Washington City,
Utah. With plans to construct a commercial office building on
the property, Borrowers pursued financing from Century
Mortgage for the approximately $2.8 million needed for the
Project. Century Mortgage did not immediately agree to fund
the Project but instead reached out to various individuals and
entities to solicit their investments. This effort was successful,
and Century Mortgage eventually agreed to assist Borrowers.

¶5     By early 2010, Century Mortgage had disbursed roughly
$490,000 in funds it had collected for the Project on behalf of
Borrowers to prevent the property from being subject to
foreclosure, including approximately $475,000 for a ‚Land
Payoff‛ to Village Bank; roughly $10,000 for property taxes; and
$4,555 for closing costs.

20140489-CA                      3              2016 UT App 102
              Telegraph Tower v. Century Mortgage

¶6     In April 2010, Borrowers executed and recorded a trust
deed and note in favor of Investors. A couple weeks later,
Century Mortgage and Borrowers executed a loan agreement
(the Construction Loan Agreement), which promised Borrowers
approximately $2.8 million for the Project. Instead of paying
Borrowers the loan in one lump sum, the agreement set forth
conditions and requirements for Borrowers to receive it in
portions as needed. Further, the agreement described Century
Mortgage as Investors’ agent in servicing the loan and executing
the agreement. Specifically, the Construction Loan Agreement
stated it was made ‚by and between the undersigned Telegraph
Towers LLC., Jared Christiansen and Bradley Harrell
individually (borrower) and Century Mortgage, as agent for
*Investors+.‛ It identified the names of each individual investor
and the percentage of interest to which each investor was
entitled. Further, the agreement provided that

      [u]pon the recordation of the Trust Deed, the net
      proceeds of the loan will be available to be
      disbursed by [Century Mortgage5] to the
      undersigned Borrower or others as hereinafter
      provided which shall be conclusively deemed full
      consideration for the Note and that such
      consideration has fully passed and been paid to the
      Borrower.

¶7    In June and July 2010, according to Christiansen,
‚Century Mortgage fully funded several draws totaling
approximately $256,389.72‛ to pay for pre-construction costs.
But by August, after major construction had begun, Century
Mortgage stopped responding to Borrowers’ requests for funds.

5. We note that, in the first sentence of the Construction Loan
Agreement, Investors are referred to as ‚investors.‛ But
thereafter Investors are referred to as ‚lenders.‛ Moreover, the
term ‚lenders‛ is often used interchangeably when referring
either to Investors or to Century Mortgage.

20140489-CA                    4               2016 UT App 102
              Telegraph Tower v. Century Mortgage

Through their attorney, Borrowers sent Century Mortgage a
written request for a meeting. According to Christiansen, in that
meeting Century Mortgage informed them that ‚there [was not]
actually any money at all. All the money that [they] collected
ha[d] been spent.‛ At this point, Borrowers alleged, Century
Mortgage had ‚failed to fund at least $1,138,703.31 in loan
proceeds that should have been available for construction of the
Project.‛ As a result, Borrowers were unable to pay
subcontractors and suppliers, and then at least thirteen
mechanic’s liens were recorded against the property.

Century Mortgage and Investors

¶8     According to its brochure materials, once Century
Mortgage received a loan request, it would reach out to
prospective investors who had expressed interest in similar
investment opportunities and allow them to choose whether to
participate in a particular venture either by funding the entire
loan or by sharing the investment with other parties. Here,
Century Mortgage identified various individuals and entities to
contribute funds to the Project, some of whom had previously
used Century Mortgage’s services to invest in other projects.
Others agreed to invest through Century Mortgage for the first
time.

¶9      In April 2010, most of Investors executed an agreement
(the Investors Agreement) by which they promised to fund the
loan requested by Borrowers. The Investors Agreement specified
the amount each investor agreed to contribute. It expressly
stated,

      Century Mortgage agrees to act as agent for the
      above investors in gathering pertinent information
      about the property and principals involved and
      making such information available to the investors,
      along with a recommendation. Century Mortgage
      is not a guarantor of the note and the signers
      herein agree that neither it nor its principals acting

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               Telegraph Tower v. Century Mortgage

       on its behalf are liable in any way for the success or
       failure    of    this    venture    except    as    to
       misrepresentation or omission of material facts of
       which they are aware. The investment decision is
       solely that of the investor.

It also set forth Century Mortgage’s responsibilities:

       Century Mortgage agrees to prepare, or have
       prepared documents necessary to complete this
       transaction in a businesslike manner. This will
       include a Trust Deed, Trust Deed Note, closing
       statements, and Title Insurance. The deeds and
       notes will bear the investors names and the
       borrowers obligation will be solely to the investors
       so named. However, Century Mortgage will
       service the loan for the length of its regular term,
       gathering the money to be invested and
       distributing it to the Title Co. for the lot (or land),
       holding the balance on a construction loan and
       distributing it to the contractor periodically as
       needed, upon completion of each part of the home
       or project, collecting monthly interest payments,
       assessing necessary late fees, calculating principal
       and interest, and forwarding the amount due each
       investor promptly.

¶10 A few prospective investors did not execute the Investors
Agreement, or any other agreement, but nevertheless promised
to invest in the Project. One investor entered into a series of
separate contracts with Century Mortgage agreeing to invest a
total of $600,000 for the Project.

¶11 Although Investors dispute whether they are bound by
the Construction Loan Agreement, they generally agree they are
subject to the trust deed and note. Further, all Investors who
executed the Investors Agreement concede they are bound by it.

20140489-CA                      6                2016 UT App 102
               Telegraph Tower v. Century Mortgage

Finally, all Investors gave their respective contributions to
Century Mortgage to fund the loan.

                   II. Procedural Background

¶12 In September 2010, Borrowers filed suit against Investors.6
Borrowers claimed Investors breached the Construction Loan
Agreement and the integrated trust deed and note. They also
brought claims regarding the implied covenant of good faith and
fair dealing and unjust enrichment. Specifically, they claimed,
‚Investors expressly authorized Century Mortgage to act as the
Investors’ agent and to enter the *Construction+ Loan Agreement
with *Borrowers+, and to service the loan on the Investors’
behalf.‛ Accordingly, Borrowers claimed, ‚Century Mortgage,
on its own behalf and on behalf of all the Investors, entered into
the [Construction] Loan Agreement and expressly agreed,
among other things, that the net proceeds of the loan
contemplated therein would be available for disbursement and
application to the Project as appropriate requests were made.‛
As such, Borrowers assert, ‚*Investors+ breached and are in
default of the [Construction] Loan Agreement and any other
agreements ancillary thereto.‛7

6. In their complaint, Borrowers also brought claims against
Century Mortgage and its principals individually, but those
claims are not part of this appeal.

7. At the district court, three groups of investors answered
Borrowers’ complaint. The first group, the ‚VF Parties,‛ was the
largest and included more than eighteen investors represented
by the same legal counsel. The second group was a married
couple, Lyle and Barbara Stringham, referred to as the
‚Stringhams.‛ Finally, the ‚HPI‛ group consisted of Harris
Property Investments LLC and its principal, Paul Harris. To
avoid further complicating the issues, we continue to refer to the
                                                   (continued<)

20140489-CA                     7              2016 UT App 102
               Telegraph Tower v. Century Mortgage

¶13 After discovery closed, between October 2012 and
February 2013, the parties made various motions and counter-
motions for summary judgment. To support their various
motions, the parties raised four main issues: (1) whether Century
Mortgage acted as Investors’ agent or fiduciary, or as Borrowers’
agent or fiduciary, or both; (2) whether Borrowers could
demonstrate that Investors did not pay their respective shares,
considering that Century Mortgage commingled the funds; (3)
whether Investors were jointly and severally liable; and (4)
whether Investors were unjustly enriched.

¶14 First, the parties raised several theories regarding Century
Mortgage’s agency. On one hand, Investors argued they had no
duty under the Construction Loan Agreement because Century
Mortgage did not have authority to sign the agreement on
Investors’ behalf. Rather, Century Mortgage acted as Borrowers’
agent and fiduciary because Century Mortgage held Borrowers’
loan funds, disbursed interest payments, and paid Village Bank
to prevent it from foreclosing on the property. Investors
alternatively argued that, even if Century Mortgage was their
agent, Borrowers’ claim still failed as a matter of law for at least
two reasons: Century Mortgage’s authority was limited to
gathering information and preparing loan documents and, as
Borrowers’ fiduciary, it acted as a dual agent similar to an
escrow agent. Accordingly, Investors argued that, under
common law principles not yet adopted in Utah, Borrowers bore
the risk of loss because Borrowers entered into a fiduciary
relationship with Century Mortgage first. Further, Investors
argued that any obligation Investors had to pay Borrowers was
fulfilled under Utah Code section 22-1-2 when Investors gave
Century Mortgage their funds because Century Mortgage was ‚a
fiduciary.‛

(2016 UT App 102
               Telegraph Tower v. Century Mortgage

¶15 On the other hand, Borrowers argued that ‚all of the
relevant contracts and agreements establish that Century
Mortgage was the express agent of the Investors.‛ Moreover,
Century Mortgage’s involvement in putting together the loan
transaction demonstrates it acted on behalf of Investors. They
further reasoned that Century Mortgage already had a fiduciary
relationship with those Investors who had previously invested
with Century Mortgage, and Century Mortgage agreed to
‚look*+ out for the interests of the Investors.‛

¶16 Second, Investors argued that Borrowers’ claims were too
speculative. They argued Borrowers could not point to a single
investor and establish that the investor’s funds were not already
paid for Borrowers’ benefit—especially considering that
Investors’ funds were commingled in Century Mortgage’s bank
account. Borrowers responded that ‚*b+ecause the Investors
were co-venturers or joint venturers . . . , they are jointly and
severally liable,‛ which negated the requirement to point to a
specific investor’s breach. Then Borrowers pointed out that,
because neither the Construction Loan Agreement nor the
Investors Agreement had express joint and several liability
covenants, the court should look to the parties’ intentions.

¶17 Third, Borrowers argued that the Construction Loan
Agreement, Investors Agreement, and the trust deed and note
imposed joint and several liability because each investor made a
promise involving the same performance—to lend $2.8 million.
In contrast, Investors argued that each investor did not make the
same promise as every other investor, but rather each promised
to contribute a different amount, and therefore cannot be jointly
liable. Further, Investors argued they could not be jointly liable
because, even assuming they were bound by the Construction
Loan Agreement, no investor had breached any part of that
agreement.

¶18 Finally, Investors argued that an unjust enrichment claim
was not proper as a matter of law because it ‚‘is available only
when no enforceable written or oral contract exists.’‛ (Quoting
Wood v. Utah Farm Bureau Ins. Co., 2001 UT App 35, ¶ 10, 19 P.3d

20140489-CA                     9              2016 UT App 102
               Telegraph Tower v. Century Mortgage

392.) In contrast, Borrowers argued that the unjust enrichment
claim was appropriate against those investors who contend they
are not bound by the Construction Loan Agreement.

¶19 In February 2013, after hearing arguments on the
summary judgment motions, the court made determinations
regarding the third and fourth issues. It concluded that ‚[t]he
cause of action with respect to unjust enrichment is dismissed as
to all the defendants,‛ because it is ‚simply not legally
sustainable to anyone except [those] who are not contracting
parties.‛ More importantly, the court also concluded that ‚there
is . . . no legal justification to take these documents and create
joint and several liability for [Investors]. They have a limited
liability in this set of documents . . . . I don’t find support in the
documents or the law.‛ In denying the motions regarding ‚the
other issues,‛ the court reasoned, ‚[W]ith respect to all the other
motions for summary judgment going both directions, there’s
simply too much a conflict in fact for the Court to make any
other ruling.‛

¶20 In the written ruling memorializing its decisions, the
court concluded that ‚*i+n the event the Court determines that
[Investors have] breached a duty to [Borrowers] which is the
proximate cause of identifiable and specific damages, such
damages are limited in that these [investors] may have
individual liabilities up to the full amount of their contribution.‛
The court later reiterated that this meant that Investors’ liabilities
would be capped at the amount the investors individually
promised to contribute.

¶21 Investors again filed motions for summary judgment with
evidence demonstrating that each individual investor had
provided Century Mortgage with its respective portion of the
loan. Borrowers opposed Investors’ motions, arguing there were
still a number of disputed questions that should have precluded
summary judgment, including whether Investors were obligated
to advance the loan to Borrowers through Century Mortgage
under the Construction Loan Agreement.

20140489-CA                      10               2016 UT App 102
               Telegraph Tower v. Century Mortgage

¶22 The district court ultimately granted summary judgment
in favor of Investors, dismissing all claims against them and
awarding them their attorney fees. The court determined that,
based on the pleadings, there was no dispute that Investors gave
Century Mortgage the full amount each individual had agreed to
contribute. But the court never made a determination regarding
Century Mortgage’s agency. Rather, the court concluded that
Investors had no duty to pay any amount directly to Borrowers
and, therefore, Borrowers could not recover damages from
Investors, jointly or severally, even if they could prove Investors
had a duty that was breached. Borrowers appeal.

            ISSUES AND STANDARDS OF REVIEW

¶23 Borrowers contend the district court erred in granting
Investors’ motions for summary judgment. First, they argue that
the ‚essential underpinning*+ to the order‛ granting summary
judgment is that ‚Century *Mortgage+ collected, received, and
held [Investors’] funds as the agent or fiduciary of [Borrowers],
and not as the agent or fiduciary of *Investors+.‛ Borrowers
argue this ‚underpinning [is] wrong, both as a legal and factual
matter.‛8 Borrowers next argue that under the undisputed facts,
‚the law implies that *Investors+ jointly promised a single
performance to [Borrowers], i.e., a loan of $2,821,000 for the

8. Indeed, Borrowers argue the opposite is true. They argue that
the district court ‚erred in failing to grant *their+ Motion for
Partial Summary Judgment [on the ground] that Century was
the agent for [Investors+.‛ They argue that the ‚contracts and
undisputed conduct of the parties established, as a matter of law,
that Century acted in the capacity as agent for [Investors], and
not as agent for *Borrowers+.‛ Because we reverse the court’s
decision to grant summary judgment in favor of Investors with
regard to the agency issue, we need not address whether the
court erred in denying Borrowers’ competing summary
judgment motion. See infra ¶¶ 25–36.

20140489-CA                    11               2016 UT App 102
               Telegraph Tower v. Century Mortgage

construction of the Project, and they are therefore jointly liable
for the performance of the promise.‛ Finally, Borrowers argue
the court erred in limiting damages for which Investors could be
liable. Specifically, they argue the ‚court’s ruling on this point
was procedurally improper‛ because there ‚is no legal basis‛ for
this determination.

¶24 We review a ‚court’s legal conclusions and ultimate grant
or denial of summary judgment for correctness and view[] the
facts and all reasonable inferences drawn therefrom in the light
most favorable to the nonmoving party.‛ Orvis v. Johnson, 2008
UT 2, ¶ 6, 177 P.3d 600 (citations and internal quotation marks
omitted). Further, summary judgment is only appropriate if
‚there is no genuine issue as to any material fact and . . . the
moving party is entitled to a judgment as a matter of law.‛ Utah
R. Civ. P. 56(a). In other words, ‚[a] district court is precluded
from granting summary judgment ‘if the facts shown by the
evidence on a summary judgment motion support more than
one plausible but conflicting inference on a pivotal issue in the
case . . . particularly . . . if the inferences depend upon subjective
feelings or intent.’‛ Uintah Basin Med. Ctr. v. Hardy, 2008 UT 15,
¶ 19, 179 P.3d 786 (first omission in original) (quoting 73 Am.
Jur. 2d Summary Judgment § 46 (2001)).

                            ANALYSIS

                             I. Agency

¶25 Borrowers argue that Investors breached their contractual
duties under the Construction Loan Agreement. They can only
demonstrate that Investors were bound by the terms of that
agreement by showing that Century Mortgage entered into the
contract on Investors’ behalf, as their agent. But without
reaching the merits of the parties’ arguments regarding Century
Mortgage’s agency, we conclude that this issue should be
remanded for further proceedings for two reasons: (1) the
district court did not make a determination regarding Century
Mortgage’s agency and (2) Century Mortgage’s agency is a

20140489-CA                      12               2016 UT App 102
               Telegraph Tower v. Century Mortgage

question of fact not proper for summary judgment because the
inferences to be drawn from the facts are in dispute.

¶26 First, the district court never made a determination
regarding agency. On appeal, the parties assume that the court
implicitly decided the agency issue when it concluded that
Investors no longer had a duty to pay after they deposited
money into Century Mortgage’s bank account. But, as Borrowers
point out, there is an ‚absence of a stated rationale for the
ruling‛ and ‚*n+either the transcript of the initial hearing on the
motions, nor the transcript of the hearing on [Borrowers’]
objection*s+ . . . , shed much light on the judge’s rationale.‛

¶27 As we have noted, the parties raised four main issues in
their initial efforts to obtain summary judgment. But the court
made determinations regarding only three of those issues. With
regard to the first issue—the agency issue—the court denied the
parties’ motions, expressly stating ‚there’s simply too much
conflict in fact for the Court to make any other ruling.‛

¶28 Later, in the second round of summary judgment
motions, the court made no comment and no determination
when Borrowers raised the issue of Century Mortgage’s agency.
In their opposition memoranda, Borrowers averred that even if
the ‚‘objective facts are undisputed [that] does not mean that no
genuine issues remain as to those facts.’‛ (Quoting USA Power,
LLC v. PacifiCorp, 2010 UT 31, ¶ 33, 235 P.3d 749.) Then, they
argued that Investors’ arguments ignored ‚that Century
Mortgage was the express agent of the *Investors+,‛ and that
‚[a]ny inferences about the use of *Investors’+ funds must be
resolved in favor of [Borrowers], as the non-moving party.‛

¶29 At the hearing, Borrowers argued that evidence of money
being deposited into Century Mortgage’s bank account was not
dispositive of the case. Borrowers conceded there was ‚no doubt
that money went to [Investors’] agent,‛ i.e., Century Mortgage.
The real issue, Borrowers argued, was ‚what it means to
contribute‛—whether that means to contribute directly to
Borrowers or whether the duty to contribute was satisfied when

20140489-CA                    13               2016 UT App 102
               Telegraph Tower v. Century Mortgage

Investors deposited their funds with Century Mortgage or
authorized Century Mortgage to use funds it already held.
Furthermore, Borrowers reiterated that whether Investors
fulfilled the obligations under the Investors Agreement was
irrelevant to this case, because the real issue was that Investors
had an obligation to pay Borrowers according to the
Construction Loan Agreement, trust deed, and note. They stated,
‚it’s not of a moment to us that their agent squandered their
money. Our contract is . . . not the Investor[s] Agreement.‛

¶30 Immediately after this argument, the court granted
Investors’ motions without any explanation, and without
comment regarding Century Mortgage’s agency. In its order, the
court concluded that because Investors invested ‚the full
amount required under the Investors Agreement,[9] they ha[d]
no obligation to pay any additional sums to Century Mortgage,
LLC, nor [did] they have a duty to pay any amount directly to
[Borrowers+.‛     Thus,     although     the    court   previously
acknowledged that there was too much conflict in fact to rule on
the agency issue, the court appears to have ignored Borrowers’
arguments that the agency issue precluded summary judgment
and the reminder that the Construction Loan Agreement
controlled in this action, not the Investors Agreement.

¶31 Whether Century Mortgage acted as Investors’ agent is
crucial to this case: only if Century Mortgage acted as Investors’
agent when it entered into the Construction Loan Agreement
would Borrowers have a cause of action. Moreover, if Century
Mortgage was Investors’ agent, Investors’ obligation to
contribute to the loan may be a duty to Borrowers, not Century
Mortgage. And even if the court implicitly made a finding that

9. The court’s determination appears to be based on the terms of
the Investors Agreement, not the Construction Loan Agreement
upon which this case was brought. But because the court did not
explain its determination, it is not clear upon which documents
the court relied in making this determination.

20140489-CA                    14              2016 UT App 102
               Telegraph Tower v. Century Mortgage

Century Mortgage was Borrowers’ agent, there is nothing in the
record to determine which factual inferences the court drew in
reaching its decision or how it came to that conclusion. Although
we do not defer to the trial court’s legal conclusions on summary
judgment, ‚we certainly may derive great benefit from the trial
judge’s views on the issue and may be persuaded by those
views.‛ Zions First Nat’l Bank, N.A. v. National Am. Title Ins. Co.,
749 P.2d 651, 654 (Utah 1988). Accordingly, a trial court’s failure
to address an issue ‚provides ample justification for refusing to
consider‛ that matter for the first time on appeal. See id.

¶32 Second, agency presents a question of fact that ‚depends
upon all the facts and circumstances of the case.‛ See Gildea v.
Guardian Title Co. of Utah, 970 P.2d 1265, 1269 (Utah 1998); accord
Adamson v. United Mine Workers of Am., 277 P.2d 972, 973–74
(Utah 1954); Vina v. Jefferson Ins. Co. of N.Y., 761 P.2d 581, 585
(Utah Ct. App. 1988); 3 Am. Jur. 2d Agency § 334 (2015). ‚A court
can find that an agency relationship exists only if the agent is
shown to have been acting on behalf and subject to the control of
the principal.‛ Zions, 749 P.2d at 654. This can be proved ‚by
direct evidence of an express contract‛ or ‚by competent
evidence which has a tendency to prove an agency.‛ 3 Am. Jur.
2d Agency § 327 (2015). Thus, ‚*w+hen the facts relied upon to
establish the existence of an agency relationship are conflicting,
or conflicting inferences can be drawn from them, the question is
one for the jury.‛ Id.; see also USA Power, LLC v. PacifiCorp, 2010
UT 31, ¶ 65, 235 P.3d 749 (stating that ‚inferences drawn from
circumstantial evidence . . . may create a genuine issue of
material fact‛).

¶33 Here, although the parties do not contest the underlying
facts of this case, they do dispute the inferences drawn from
those facts. They dispute whether the facts demonstrate that
Century Mortgage acted as Borrowers’ agent or Investors’ agent,
or both. Borrowers support their argument by pointing to the
express language of the Construction Loan Agreement and
Investors Agreement, which states Century Mortgage acted ‚as
agent for investors.‛ But Investors argue the parties’ conduct
and the nature of the transaction demonstrate that Century

20140489-CA                     15               2016 UT App 102
               Telegraph Tower v. Century Mortgage

Mortgage acted as Borrowers’ agent or, alternatively, as both
Borrowers’ and Investors’ agent.

¶34 The parties also dispute the scope of Century Mortgage’s
agency. In particular, Borrowers argue that Century Mortgage
acted on behalf of Investors, as their agent, when it entered into
the Construction Loan Agreement. But Investors argue that,
even if Century Mortgage was their agent, Century Mortgage
did not have the ‚authority to sign the *Construction+ Loan
Agreement for them.‛ They argue that ‚Century’s role as agent
for [Investors] was limited to arranging the [loan] and then as an
escrow agent.‛ To support this argument, Investors show that
Century Mortgage’s brochure, ‚How Century Mortgage Works,‛
describes Century Mortgage as acting as an escrow agent.

¶35 More importantly, assuming Investors are bound by the
terms of the Construction Loan Agreement, the parties dispute
whether Century Mortgage’s receipt of Investors’ funds satisfies
Investors’ duties under the agreement. Investors argue that if
Century Mortgage acted on behalf of Borrowers, as their agent,
Century Mortgage’s acceptance of the funds was equivalent to
Borrowers accepting the funds. But Borrowers argue that,
because Century Mortgage already had some Investors’ funds
and accepted funds from the remaining investors as an agent,
Century Mortgage was essentially an extension of Investors and
Investors’ duties were not satisfied under the Construction Loan
Agreement.

¶36 In light of the parties’ disputes, we conclude that genuine
issues of fact exist with respect to the questions of whose agent
Century Mortgage was and the scope of its agency. See USA
Power, 2010 UT 31, ¶ 33 (explaining that ‚*e+ven if the moving
party’s objective statement of the facts are agreed upon,
reasonable inferences made from those undisputed facts can
indeed create a genuine issue of material fact‛). We therefore
vacate the order granting summary judgment and remand the
issue of Century Mortgage’s agency for further proceedings.

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               Telegraph Tower v. Century Mortgage

                   II. Joint and Several Liability

¶37 Borrowers contend that Investors ‚were jointly and
severally liable for the performance of their collective obligations
under the [Construction Loan Agreement, trust deed, and
note+.‛ Specifically, they argue that Investors ‚jointly promised a
single performance to [Borrowers], i.e., a loan of $2,821,000 for
the construction of the Project, and they are therefore jointly
liable for the performance of the promise to deliver the total
amount.‛ Borrowers reason that ‚it makes practical sense that
[Borrowers] contracted for a complete loan, not for many
separate loans.‛ Investors disagree. They contend they are not
jointly liable because each Investor ‚did not promise the same
performance.‛ Investors argue that this is demonstrated by the
plain language of the loan documents in which Investors’ names
are ‚listed together with the amount or percentage of their
investment compared to the entire amount loaned to
*Borrowers+.‛ Rather, Investors argue, the loan was ‚essentially
a syndicated loan where the investors are only severally liable.‛

¶38 ‚Whether or not multiple promises have reference to the
same performance is entirely a question of interpretation.‛
Restatement (Second) of Contracts ch. 13, intro. note (Am. Law
Inst. 1981).

       The basic rule of contract interpretation is that
       intent of the parties is to be ascertained from the
       content of the instrument itself, the rationale for the
       rule being to preserve the sanctity of written
       instruments. 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.
       It is only when ambiguity exists which cannot be
       reconciled by an objective and reasonable
       interpretation of the contract as a whole that resort
       may be had to the use of extrinsic evidence.

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               Telegraph Tower v. Century Mortgage

Utah Valley Bank v. Tanner, 636 P.2d 1060, 1061–62 (Utah 1981)
(citations omitted). ‚A contract . . . is ambiguous if it is capable
of more than one reasonable interpretation because of uncertain
meanings of terms, missing terms, or other facial deficiencies.‛
Peterson v. Coca-Cola USA, 2002 UT 42, ¶ 9, 48 P.3d 941 (citation
and internal quotation marks omitted).

¶39 ‚Whether an ambiguity exists in a contract is a question of
law.‛ WebBank v. American Gen. Annuity Serv. Corp., 2002 UT 88,
¶ 22, 54 P.3d 1139 (citation and internal quotation marks
omitted). ‚When ambiguity exists, the intent of the parties
becomes a question of fact.‛ Id. (citation and internal quotation
marks omitted). Thus, ‚*a+ motion for summary judgment may
not be granted if a legal conclusion is reached that an ambiguity
exists in the contract and there is a factual issue as to what the
parties intended.‛ Id. (citation and internal quotation marks
omitted).

¶40 At the close of the first summary judgment hearing, the
district court stated that there was ‚no legal justification to take
these documents and create joint and several liability for
[Investors]. They have a limited liability in this set of documents
according to their percentage.‛ It then concluded, ‚[T]here is no
basis in fact or law for finding joint and several liability of
*Investors+.‛ We must therefore determine whether the court’s
interpretation of the Construction Loan Agreement—the
operative document—was proper insofar as it explicitly
determined that as a matter of law Investors are not jointly and
severally liable for any breach in the agreement, and insofar as it
implicitly determined that the language of the agreement was
unambiguous.

¶41 As a general rule, ‚*w+here two or more parties to a
contract promise the same performance to the same promisee,
each is bound for the whole performance [of the contract],
whether his duty [is expressed as] joint, several, or joint and
several.‛ Restatement (Second) of Contracts § 289 (Am. Law Inst.
1981). ‚Unless a contrary intention is manifested, a promise by
two or more promisors‛ is presumed to be joint. Id. § 288(2)

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               Telegraph Tower v. Century Mortgage

& cmt. c. This is the consistent view of the various treatises on
contract law and the Restatement (Second) of Contracts. See, e.g.,
Id. §§ 288, 289; 12 Williston on Contracts, § 36:1, 800–01 (4th ed.
2012). ‚A several obligation, by contrast, has the effect of
creating two separate liabilities on a single contract.‛ 12
Williston on Contracts, § 36:1, 802 (4th ed. 2012). Accordingly,
‚when a several obligation is entered into by two or more parties
in one instrument, it is the same as though each has executed
separate instruments. Under these circumstances, each party is
bound separately for the performance which it promises and is
not bound jointly with anyone else.‛ Id. at 802–03 (citations
omitted). ‚Finally, a joint and several contract is a contract made
by the promisee with each promisor and a joint contract made
with all the promisors, so that parties having a joint and several
obligation are bound jointly as one party, and also severally as
separate parties at the same time.‛ Id. at 803 (citations omitted).

¶42   The Construction Loan Agreement states:

      THIS AGREEMENT, is made on April 26, 2010 by
      and between the undersigned Telegraph Towers
      LLC., Jared Christiansen and Bradley Harrell
      individually (borrower) and Century Mortgage, as
      agent for investors Jean Rankin Trust, 3.08%
      interest; Doloryce Foster, 1.24% interest; Ray
      Schmutz Family Trust, 2.80% interest; Hanson
      Family Trust, 1.77% interest; Charles and Lorena
      Lambert, 0.92% interest; Lorena Lambert, 3.54%
      interest; EJ Foremaster Family Trust, 1.95% interest;
      Lane and Marian Foote, 0.71% interest; The Albert
      Leroy Warner Trust, 0.53% interest; Ray Schmutz
      Family Partnership, 6.17% interest; Peacock
      Revocable Trust, 6.59% interest; Lanyle Brown,
      1.03% interest; Cox Revocable Trust, 0.82% interest;
      Donald Carlyle Whitaker Revocable Living Trust,
      2.48% interest; Jack W and Denise M Doxey, 1.77%
      interest; Layne and Nancy Johnson, 1.77% interest;
      Lyle and Barbara Stringham, 1.77% interest;
      Kimberly Meredith, 0.43% interest; Jenni Meredith,

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               Telegraph Tower v. Century Mortgage

      0.71% interest; The Ludlow Trust, 3.58% interest; G.
      Dustin Gillman, 7.09% interest; CTTZ Inv. Defined
      Benefits Pension Plan, 7.09% interest; IRA Express
      Inc, FBO Leland Laub, 3.51% interest; Robert
      Ludlow, 1.77% interest; Delmer Harris, 0.71%
      interest; Tiffany Meredith, 0.71% interest; Harris
      Property Investments LLC, 21.27% interest; L
      Warren Cox Living Trust, 3.54% interest; Richard
      Burch, 3.54% interest and Bradley S Harrell,[10]
      7.09% interest inconsideration of the granting of a
      loan by lenders and as part of said loan transaction,
      which loan is evidence by Note of the undersigned
      for $2,821,00.00 at 12% interest dated April 26, 2010.

      Attached hereto and by this reference made part
      thereof, in favor of the Lenders, and secured by a
      first Trust Deed on real property . . . .

      The purpose of said loan is to finance a part of the
      cost of construction of certain improvements upon
      the described premises in accordance with plans
      and specifications that have been or will be
      deposited by Borrower with the Lenders. The
      parties desire to set forth the terms and conditions
      of this transaction, the agreement of the Parties,
      and the rights and remedies of the Lenders, in
      connection with the disbursement of the proceeds
      and construction of the improvements.

¶43 Borrowers argue that because there are multiple parties to
the Construction Loan Agreement making the same promise—to
fund the $2.8 million loan—it is presumed that Investors are
jointly liable. Restatement (Second) of Contracts § 288(2) & cmt.

10. Harrell, one of the Borrowers, also apparently invested in the
Project through Century Mortgage.

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               Telegraph Tower v. Century Mortgage

c; see also 12 Williston on Contracts, § 36:1, 800–01 (4th ed. 2012).
We disagree.

¶44 The plain language of the agreement demonstrates that
Investors did not each promise the same performance to the same
promise. Rather, each investor promised to contribute a fraction
of the $2.8 million loan. Specifically, after each investor’s name
the agreement indicates the portion of the loan that investor is
associated with by listing the percent of interest to which the
investor is entitled.11 Considering the contract as a whole, to
determine that Investors each promised to pay the $2.8 million
loan would require us to ignore the interest percentages
associated with each individual investor. See Utah Valley Bank v.
Tanner, 636 P.2d 1060, 1061–62 (Utah 1981) (citations omitted).
Indeed, this agreement harmonizes with the Restatement’s
definition of a several obligation, which states that ‚promises to
subscribe for a common purpose sums of money set opposite the
names of the promisors are ordinarily promises of separate
performances.‛ Restatement (Second) of Contracts § 288 cmt. c
(Am. Law Inst. 1981). Accordingly, we cannot agree with
Borrowers that the Construction Loan Agreement imposes joint
or joint and several liability on Investors. Rather, Investors’
liability is several because they promised separate performances,
as indicated by the percentages identified next to their names in
the agreement. On this issue, we affirm the district court.

11. We also note the Investors Agreement states that Investors
‚*a+gree to fund a loan request by Telegraph Towers LLC, Jared
Christiansen and Bradley Harrell in the amounts shown
*opposite their names+.‛ Next to each investor’s name is the
percentage and dollar amount of their investment and a
corresponding dollar amount of interest for which they are
entitled.

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               Telegraph Tower v. Century Mortgage

                          III. Damages

¶45 Borrowers argue the district court erred by ruling that the
total amount of all possible damages for a breach of contract or
breach of the implied covenant of good faith and fair dealing
was limited to the amount of money each individual investor
promised to pay under their contract. We agree.

¶46 An injured party has ‚a right to damages for any breach
by a party against whom the contract is enforceable unless the
claim for damages has been suspended or discharged.‛ Id.
§ 346(1). ‚Contract damages are ordinarily based on the injured
party’s expectation interest and are intended to give him the
benefit of his bargain by awarding him a sum of money that will,
to the extent possible, put him in as good a position as he would
have been in had the contract been performed.‛ Id. § 347 cmt. a.
These damages can ‚include both general damages, i.e., those
flowing naturally from the breach, and consequential damages,
i.e., those reasonably within the contemplation of, or reasonably
foreseeable by, the parties at the time the contract was made.‛
Billings v. Union Bankers Ins. Co., 918 P.2d 461, 466 (Utah 1996)
(citation and internal quotation marks omitted).

¶47 The Utah Supreme Court has consistently recognized that
‚in appropriate circumstances, consequential damages for
breach of contract may reach beyond the bare contract terms,‛ id.
(citation and internal quotation marks omitted); accord Beck v.
Farmers Ins. Exch., 701 P.2d 795, 801–02 (Utah 1985), and
therefore a claimant’s award of ‚damages for breach of contract
may reach beyond the bare contract terms,‛ Beck, 701 P.2d at 801;
see also Bevan v. J.H. Constr. Co., 669 P.2d 442, 444 (Utah 1983)
(holding that ‚the loss of a favorable mortgage interest rate is a
legitimate item of compensable damage‛); Pacific Coast Title Ins.
Co. v. Hartford Accident & Indem. Co., 325 P.2d 906, 908 (Utah
1958) (holding that attorney fees are a reasonably foreseeable
consequential damage for defending a contractor’s default). This
proposition ‚is wholly consistent with the general rule of
damages which arms the trial court with the discretion to place
the litigants as nearly as possible in the position they would

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               Telegraph Tower v. Century Mortgage

have enjoyed had the contract not been breached.‛ Bevan, 669
P.2d at 444. The recoverability of consequential damages turns
on a three-prong analysis. ‚*T+o recover consequential damages
in a breach of contract action, a claimant must (1) prove that he
in fact has such damages, (2) establish the amount of such
damages with reasonable certainty, and (3) show that such
damages were within the contemplation of the parties at the time
of contracting.‛ Castillo v. Atlanta Cas. Co., 939 P.2d 1204, 1209
(Utah Ct. App. 1997).

¶48 In applying the foregoing rules to this case, it is clear the
district court incorrectly ruled that Borrowers’ damages are
limited. We do not decide whether consequential damages are
appropriate in this scenario. We instead conclude that the court
must analyze Borrowers’ damages in the context of this three-
prong test, which implicitly requires the court to determine the
extent of Investors’ breach, before limiting damages.

¶49 Here, the court never reached the issue of whether
Investors breached the Construction Loan Agreement. It simply
determined that Investors were not jointly and severally liable
for any breach. Then it stated,

      In the event the Court determines that [Investors
      have] breached a duty to [Borrowers] which is the
      proximate cause of identifiable and specific
      damages, such damages are limited in that these
      defendants may have individual liabilities up to
      the full amount of their contribution, if they have
      contributed less than their contribution as shown,
      as their percentage of the total $2.8 million loan for
      the project at issue in this matter.

Borrowers opposed this language and requested a hearing to
reconsider it. Borrowers argued that this ruling misstated the
court’s oral conclusion at the first summary judgment hearing.
Further, they argued that the court’s determination regarding
joint and several liability ‚did not address the quantum of

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              Telegraph Tower v. Century Mortgage

damages for which a lender/investor might be held liable, but
merely whether all of the lenders/investors were jointly and
severally liable.‛ In essence, Borrowers argued that the court’s
ruling was improper to the extent that it purports to limit
Investors’ responsibility for damages to the amounts that they
were individually responsible to contribute under the terms of
the Construction Loan Agreement.

¶50 The court held a hearing to address this issue. Borrowers
argued that consequential damages could reach beyond the bare
terms of the Construction Loan Agreement and it was ‚an issue
[that would] be hammered out in trial‛ by applying the three-
prong analysis for consequential damages. But the court did not
respond to that argument and instead suggested that it might be
more appropriate for Borrowers to file an interlocutory appeal to
‚see if *he+ was right.‛ Specifically, the judge stated,

      I want your clients to think about this, because we
      might have to just suspend this action here, let the
      Court of Appeals, or the Supreme Court if they’re
      willing to keep it, take a look at this and see if my
      ruling was correct and there is a 2.8 million cap. . . .

      [W]e might have to just stop this case here and take
      it up on appeal to see if I am right or wrong about
      this kind of limit. . . .
      If I can be corrected, that’s your job, and I expect
      you to [appeal] it. . . . I want to know what the law
      is myself.

¶51 The court later explained that Borrowers should be
entitled to recover from an investor who ‚promised to put
$15,000 into the project and only put in five.‛ The court
ultimately concluded it was ‚still convinced that the order
prepared by *Investors+ is the order that’s going to be signed by
the Court,‛ but it never explained why. We therefore reverse the
court’s limitation of damages and remand this issue for further
fact-finding.

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               Telegraph Tower v. Century Mortgage

                        IV. Attorney Fees

¶52 Investors argue that ‚because *they+ were awarded their
fees below, they are entitled to their fees on appeal.‛ ‚‘[W]hen a
party who received attorney fees below prevails on appeal, the
party is also entitled to fees reasonably incurred on appeal.’‛
Macris v. Sevea Int’l, Inc., 2013 UT App 176, ¶ 53, 307 P.3d 625
(alteration in original) (quoting Valcarce v. Fitzgerald, 961 P.2d
305, 319 (Utah 1998) (plurality opinion)). Because Investors
prevailed below and successfully defended the joint and several
liability issue on appeal, they are entitled to an award of attorney
fees incurred on appeal for that issue. Because they prevailed
only in part on appeal, we reverse the district court’s award of
attorney fees below except with respect to the issues on which
they succeeded on appeal. Further, we remand this issue to the
district court for a determination of the appropriate amount of
attorney fees and costs incurred with regard to the joint and
several liability issue. See id.

                         CONCLUSION

¶53 In sum, we affirm the district court’s determination that
Investors are not jointly and severally liable for any breach of the
Construction Loan Agreement. But we conclude that Century
Mortgage’s agency is a question of fact improper for summary
judgment. Thus, Century Mortgage’s agency and the scope of
that agency are questions for the jury. Moreover, because the
court failed to address whether Investors breached the
Construction Loan Agreement and consequently failed to
determine whether that breach resulted in consequential
damages by analyzing the facts of this case under the relevant
three-prong test, we further conclude the court erred in limiting
damages. Finally, we grant Investors’ request for attorney fees
for prevailing on the issue of joint and several liability only. We
therefore reverse and remand this case for further proceedings.

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