Court Opinion

ID: 5177162
Source: CourtListenerOpinion
Date Created: 2022-01-06 01:06:59.439307+00
Date Added: 2024-06-11T08:26:22.750035
License: Public Domain

Justice DURHAM,
concurring:
¶ 62 I concur in the majority opinion except for the analysis in section II.B.l, but I nevertheless concur in the result.
¶ 63 This case poses an unusual factual conundrum. The ordinary circumstances under which Utah Code section 61-l-22(8)’s prohibition applies involve a violator of the securities laws on the one hand and an “innocent party” on the other; this case comes to us (allegedly) with two violators. Legacy has claimed that Liberty, in requesting, negotiating, and contracting for the activities of Legacy, knew that Legacy was not licensed as a broker-dealer. If these allegations are true, Liberty would be in violation of Utah Code section 61-l-3(2)(a), making it unlawful for any issuer “to employ or engage an agent unless the agent is licensed.”
¶ 64 Under such circumstances, I am unpersuaded by the majority’s assertion that Liberty’s mere status as an issuer automatically qualifies it for membership in the class of persons the securities statute was designed to protect. I think this is a fact-dependent inquiry, not merely a structural one. I see no indication in the statute as a whole or any of its provisions that it was designed or intended to protect parties who themselves were engaged in violations and/or were responsible for securing or facilitating the violations they subsequently pose as a bar to liability.
¶ 65 The majority rejects the possibility that common law equitable considerations might have any relevance to our construction of the statute. I find this position incompatible with the statutory language itself, which *697in Utah Code section 61-1-22(10) provides that “[t]he rights and remedies provided by this chapter are in addition to any other rights or remedies that may exist at law or in equity.” We are thus construing a statute that explicitly references equity and the common law. This is even more reason to follow “virtually all other [federal] courts” that have held that equitable considerations should be taken into account before determining a contract is unenforceable under a similar unen-foreeability provision in the federal securities act. Reg’l Props., Inc. v. Fin. & Real Estate Consulting Co., 678 F.2d 552, 562 (5th Cir.1982); see also Mills v. Elec. Auto-Lite Co., 396 U.S. 375, 388, 90 S.Ct. 616, 24 L.Ed.2d 593 (1970) (stating in dicta that the federal unenforceability clause may be used to set aside a corporate merger “only if a court of equity concludes, from all the circumstances, that it would be equitable to do so”). Were it not for my conclusions (set forth below) concerning the scope of the agreement at issue here, I would reverse summary judgment on the contract claim and remand for the development of facts that would (or would not) support equitable defenses to Liberty’s claim that the agency agreement is unenforceable, such as waiver, estoppel, or in pari delicto.
¶ 66 Notwithstanding my disagreement with the majority’s interpretation of the statute, I concur in the result of its opinion on the contract claim. The opinion does not reach the question of whether the agency agreement covered all future oil and gas projects (as Legacy contends) or whether it was limited to the first two CULA projects (as Liberty contends). Having examined the agreement, I conclude that it clearly references the CULA projects and is limited to them. Therefore, even assuming that there may be facts supporting Legacy’s equitable claims, no recovery would be available under its terms.