Court Opinion

ID: 7797622
Source: CourtListenerOpinion
Date Created: 2022-08-03 20:14:33.51371+00
Date Added: 2024-06-11T16:28:39.645779
License: Public Domain

2022 UT App 93

               THE UTAH COURT OF APPEALS

                       WESTON BENNION,
                          Appellant,
                              v.
                        DALE STOLROW,
                          Appellee.

                            Opinion
                       No. 20210061-CA
                       Filed July 29, 2022

           Second District Court, Ogden Department
                The Honorable Joseph M. Bean
                        No. 180902051

        Emily Adams, Freyja Johnson, Lindy W. Hamilton,
         and Robert W. Gibbons, Attorneys for Appellant
        Troy L. Booher, Beth E. Kennedy, Taylor P. Webb,
        Trystan B. Smith, Todd A. Turnblom, and Tajha L.
                 Ferrara, Attorneys for Appellee

 SENIOR JUDGE RUSSELL W. BENCH authored this Opinion, in
which JUDGES MICHELE M. CHRISTIANSEN FORSTER and DAVID N.
                 MORTENSEN concurred.1

BENCH, Senior Judge:

¶1     Weston Bennion appeals the district court’s decision on his
motion to enforce a settlement agreement. He argues that the
court incorrectly interpreted the agreement when it determined
that a portion of the payment under the agreement could include
a subrogation claimant as a joint payee. We affirm.

1. The Honorable Russell W. Bench, Senior Judge, sat by special
assignment as authorized by law. See generally Utah R. Jud.
Admin. 11-201(7).
                         Bennion v. Stolrow

                         BACKGROUND

¶2     On July 11, 2015, Bennion was significantly injured in a fall
when floorboards of Dale Stolrow’s deck broke. Bennion
subsequently filed suit against Stolrow. Stolrow was insured by
State Farm Fire and Casualty Insurance Company (State Farm),
and attorneys from its in-house counsel’s office represented
Stolrow in the litigation.

¶3     After two years of litigation, with a trial date approaching,
the parties reached a settlement agreement. The agreement set
forth the following release:

       In consideration of [$150,000] . . . , Weston Bennion
       hereby releases and forever discharges Dale Stolrow
       and . . . State Farm . . . of and from any and all past,
       present, or future claims and demands, which
       Weston Bennion has or claims to have, for or in any
       manner growing out of the incident occurring on
       July 11, 2015 . . . .

The settlement agreement also contained a paragraph specific to
subrogation claims and liens, paragraph 7, which stated, in part,

       Weston Bennion . . . acknowledge[s] that this
       settlement is, or may be, subject to one or more
       subrogation claims or health care liens. Weston
       Bennion expressly agrees to indemnify and save
       harmless Dale Stolrow . . . and State Farm . . . from
       any and all liability for such health care liens and
       from any other lien or subrogation claim arising out
       of the incident which is the subject of this release.

Additionally, the settlement agreement contained a provision
specifying that Bennion would “indemnify, defend, and hold
harmless” Stolrow and State Farm in the event that future claims

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                        Bennion v. Stolrow

or other legal actions relating to the deck accident were brought
against them.

¶4    Stolrow’s attorneys prepared the settlement agreement
and sent it to Bennion for his signature. Along with the
transmission of the agreement for signature, the attorneys
informed Bennion that they had notice of a lien from Rawlings
Company (Rawlings), which was working on behalf of Blue
Cross/Blue Shield, Bennion’s insurer, in the amount of $9,103.09
and that they intended to issue a separate check for the lien. The
communication also told Bennion that if he would first like to
negotiate with Rawlings for a lower payment amount, State Farm
was willing to issue the checks according to the results of such
negotiations.

¶5     Bennion signed the agreement but responded that no check
that included a lienholder would be acceptable. State Farm was
not willing to make payment without addressing the Rawlings
lien; but it offered several alternatives to address the lien: (1)
issuing one $150,000 check that included Rawlings as a joint
payee; (2) issuing a check for the undisputed amount to Bennion
and his attorney, and a separate check for the lien amount that
would include Rawlings as a joint payee; or (3) waiting to issue
the check until the matter was negotiated and resolved between
Bennion and Rawlings. Bennion refused all options and
continued to insist on payment that did not account for the
Rawlings lien.

¶6     Bennion thereafter filed a motion to enforce the settlement
agreement, arguing that the agreement was breached by the
refusal to write one check for the full settlement amount to
Bennion and that Stolrow was trying to change the terms of the
agreement. In response, Stolrow argued that there was no attempt
to alter the settlement agreement’s terms but that where the
agreement specified that the consideration paid was subject to
subrogation claims and health care liens, the issuance of the two

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                         Bennion v. Stolrow

checks that took the lien into account would be consistent with the
agreement.

¶7     Under these facts, the district court agreed that Stolrow
and State Farm’s proposed issuance of two checks was
appropriate, particularly where to do otherwise could leave
Stolrow and State Farm vulnerable to a cause of action by
Rawlings. State Farm then promptly issued the checks as it had
proposed—one to Bennion, his attorney, and Rawlings for
$9,103.09 and one to Bennion and his attorney for $140,896.91.

¶8    Bennion thereafter submitted a motion to reconsider,
which the district court denied. Bennion now appeals.

            ISSUES AND STANDARDS OF REVIEW

¶9      Bennion argues that the district court erred in interpreting
the unambiguous settlement agreement to allow a portion of the
consideration to be paid via a check issued to him and Rawlings
as joint payees. “Settlement agreements are governed by the rules
applied to general contract actions. Questions of contract
interpretation not requiring resort to extrinsic evidence are
matters of law, which we review for correctness.” Pioneer Builders
Co. of Nevada v. K D A Corp., 2018 UT App 206, ¶ 10, 437 P.3d 539
(quotation simplified); see also Mid-America Pipeline Co. v. Four-
Four, Inc., 2009 UT 43, ¶ 16, 216 P.3d 352 (“When, as in this case, a
contract is unambiguous and can be interpreted as a matter of law,
we review the district court’s interpretation for correctness,
according no deference to the district court.”).

¶10 Bennion also takes issue with the district court’s denial of
his motion to reconsider, arguing that the court’s incorrect
interpretation of the settlement agreement also “permeated” this
ruling. “As long as the case has not been appealed and remanded,
reconsideration of an issue before a final judgment is within the
sound discretion of the district court. Thus, we will reverse a trial

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                        Bennion v. Stolrow

court’s denial of a motion to reconsider only if there is no
reasonable basis for the decision.” Nakkina v. Mahanthi, 2021 UT
App 111, ¶ 18, 496 P.3d 1173 (quotation simplified).

                            ANALYSIS

¶11 The parties agree that the settlement agreement is valid
and unambiguous. Bennion argues only that the district court
erred in its interpretation of this unambiguous settlement
agreement. “When we interpret a contract we first look at the
plain language of the contract to determine the parties’ meaning
and intent. If the language within the four corners of the contract
is unambiguous, the parties’ intentions are determined from the
plain meaning of the contractual language, and the contract may
be interpreted as a matter of law.” Brady v. Park, 2019 UT 16, ¶ 53,
445 P.3d 395 (quotation simplified). Bennion argues that the plain
language of the settlement agreement required $150,000 be paid
to him as consideration and did not allow Stolrow “to make a
direct payment to any claimant, lienholder, or other third party.”

¶12 As an initial matter, we note that Bennion’s references to
having received only a “partial payment” or to a “direct payment”
being made to Rawlings are inaccurate. This misapprehends what
the district court determined was allowed by the settlement
agreement. The court approved the issuance of “one check to
[Bennion] in the undisputed amount and one check to both
[Bennion] and Rawlings in the disputed subrogation amount.”
Thus, both checks, together totaling $150,000, listed Bennion as a
payee and were delivered to him. The full settlement amount was
paid to Bennion, although joint payees were included on the
checks.2 The question is simply whether issuing part of the

2. Bennion seems to suggest that a payment cannot be considered
made to him if a joint payee is listed on the check. However, this
is inconsistent with his characterization of the larger check as
                                                     (continued…)

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                         Bennion v. Stolrow

payment to both Bennion and Rawlings was permitted under the
plain language of the settlement agreement.

¶13 The paragraph setting forth the consideration amount
provides, “In consideration of [$150,000] . . . Weston Bennion
hereby releases and forever discharges Dale Stolrow and . . . State
Farm . . . .” And while we agree with Bennion that this provision
does not specifically permit payment to a claimant or lienholder,
we cannot say the same for paragraph 7 of the settlement
agreement, which, according to its title, is intended to specifically
address subrogation claims or liens.

¶14    Paragraph 7 states,

       Weston Bennion . . . acknowledge[s] that this
       settlement is, or may be, subject to one or more
       subrogation claims or health care liens. Weston
       Bennion expressly agrees to indemnify and save
       harmless Dale Stolrow . . . and State Farm . . . from
       any and all liability for such health care liens and
       from any other lien or subrogation claim arising out
       of the incident which is the subject of this release.
       All medical and other expenses and losses incurred
       by Weston Bennion, past, present, and future as a
       result of the incident referred to above, shall be
       Weston Bennion’s own responsibility. The
       consideration paid to Weston Bennion for this
       release is intended to cover all such expenses or
       losses.

In the first sentence, this paragraph specifies that the settlement
may be “subject to”—that is, “affected by”—subrogation claims
or health care liens. See Subject to, Merriam-Webster,
https://www.merriam-webster.com/dictionary/subject%20to

having been paid to him notwithstanding the fact that it was
issued to Bennion and his attorney as joint payees.

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                         Bennion v. Stolrow

[https://perma.cc/WC5Y-RTT9] (defining “subject to” as “affected
by or possibly affected by (something)”). Thus, this provision
recognizes that the settlement made with Bennion may be
impacted by existing subrogation claims or health care liens. We
see no other reasonable interpretation of this provision.

¶15 Bennion focuses on the language at the end of paragraph 7
that mentions the consideration “paid to” Bennion to argue that
he must be paid the full settlement amount without limitation.
However, as discussed above, the full consideration was paid to
Bennion, supra ¶ 12, and we see nothing in this language that
would prohibit portions of that payment to include joint payees.
Indeed, it would seem that such an inclusion helps achieve the
provision’s stated intention that the consideration paid to Bennion
cover “[a]ll medical and other expenses” of Bennion.

¶16 Bennion also relies on the indemnification provision to
make his argument. He recognizes that under the indemnification
provision, he is “fully liable for all subrogation claims and
healthcare liens” and that the $150,000 consideration “obligated
[him] to use this finite allotment of funds to resolve all
outstanding liens and potential claims.” But he argues that where
the “entire thrust” of the settlement agreement was to release
Stolrow from liability and make Bennion responsible, then the
plain language somehow “does not permit” the issuance of the
checks as done by State Farm. But again, we see nothing in the
plain language of the indemnification provision that disallows the
inclusion of Rawlings as a joint payee, and moreover, such
inclusion seems entirely consistent with the settlement
agreement’s shift of liability from Stolrow to Bennion.3

3. Bennion disputes the amount of Rawlings’s claim and argues
that the issuance of the checks to joint payees undercuts his ability
to negotiate a lesser amount with Rawlings. But the district court
                                                     (continued…)

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                         Bennion v. Stolrow

¶17 We take this opportunity to recognize that were Stolrow
and State Farm, knowing of the Rawlings claim, to issue one check
for $150,000 payable only to Bennion, they might expose
themselves to liability beyond the $150,000 settlement payment.
“A settlement made with the knowledge, actual or constructive,
of the injured’s insurer’s subrogation right will not affect the
insurer’s right of subrogation as against the tort-feasor or his
insurance carrier.” Educators Mutual Ins. Ass’n v. Allied Prop. & Cas.
Ins. Co., 890 P.2d 1029, 1032 (Utah 1995) (quotation simplified); see
also Transamerica Ins. Co. v. Barnes, 505 P.2d 783, 787 (Utah 1972).
That is, in the event the Rawlings claim remained unpaid,4
Rawlings would not need to pursue resolution with Bennion at all
but could instead bring an action against Stolrow and State Farm
directly. And should Bennion declare bankruptcy or otherwise
become unable to indemnify them, then the intent of the
agreement—that the $150,000 consideration cover all subrogation
claims—would not be met.

¶18 In sum, the plain language of the settlement agreement
states that the settlement is “subject to” claims like that of
Rawlings. We therefore agree with the district court that the
payment made by the two State Farm checks was appropriate

specifically stated that Bennion “may negotiate the disputed
subrogation claim with Rawlings” and did not lock in any certain
amount for the Rawlings claim.

4. We note the paradox of Bennion agreeing that he is liable for
any amount Rawlings is due but also putting significant cost and
effort into appealing the district court’s ruling so that he does not
have to address and settle that claim just yet. And we understand
the suspicion this has created on the part of Stolrow and State
Farm that Bennion might not actually intend to resolve and pay
the Rawlings claim.

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                         Bennion v. Stolrow

under the plain language of the settlement agreement.5 And
where we see no error in the court’s interpretation of the
settlement agreement, we also see no abuse of discretion in the
court’s denial of a motion to reconsider based on an alleged
erroneous interpretation.

                          CONCLUSION

¶19 We determine that nothing in the settlement agreement
precludes Stolrow and State Farm from including Rawlings as a
joint payee on a check in the amount of its lien to shield them from
further liability for the lien. We therefore affirm the orders of the
district court enforcing the settlement agreement and denying
Bennion’s motion for reconsideration.

5. Bennion also argues that the district court’s interpretation
“improperly attempted to fashion an equitable remedy rather
than enforcing the plain language of the contract.” Although we
do not agree with this characterization of the district court’s one
reference of an attempt to “balance the interests” of the parties,
where our review gives no deference to the district court’s
decision and our determination does not rely on policy or
equitable considerations, we need not address this issue.

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