Court Opinion

ID: 5137404
Source: CourtListenerOpinion
Date Created: 2021-12-21 14:39:14.688605+00
Date Added: 2024-06-11T08:24:02.188570
License: Public Domain

2013 UT App 244
_________________________________________________________

              THE UTAH COURT OF APPEALS

                      JEFF BURNINGHAM,
                    Plaintiff and Appellee,
                                v.
                   WESTGATE RESORTS, LTD.,
                   Defendant and Appellant.

                            Opinion
                        No. 20120469‐CA
                     Filed October 10, 2013

           Third District, Silver Summit Department
                 The Honorable Keith A. Kelly
                         No. 100500940

              Troy L. Booher, Erin Bergeson Hull,
           Noella A. Sudbury, Michael A. Gehret, and
            Douglas P. Farr, Attorneys for Appellant
           Jonathan O. Hafen and Mary Ann C. May,
                     Attorneys for Appellee

   SENIOR JUDGE RUSSELL W. BENCH authored this Opinion, in
   which JUDGES GREGORY K. ORME and J. FREDERIC VOROS JR.
                        concurred.1

BENCH, Senior Judge:

¶1     Westgate Resorts, Ltd. (Westgate) appeals from the district
court’s entry of summary judgment in favor of Jeff Burningham in
Burningham’s action for the return of $89,900 that he had paid to

1. The Honorable Russell W. Bench, Senior Judge, sat by special
assignment as authorized by law. See generally Utah Code Jud.
Admin. R. 11‐201(6).
                 Burningham v. Westgate Resorts

Westgate as a deposit on the purchase of a condominium unit. We
affirm.

                        BACKGROUND

¶2     In 2006, Burningham and Westgate entered into a real estate
purchase contract (the REPC) whereby Burningham agreed to
purchase a Park City condominium unit from Westgate for
$899,000. Pursuant to the REPC, Burningham made a 10% deposit
of $89,900, which was to be retained by Westgate as liquidated
damages if Burningham defaulted. As the 2007 closing date
approached, real estate market conditions worsened, and
Burningham refused to close. A dispute arose between the parties
as to whether Burningham was entitled to a refund of the deposit,
with Burningham alleging that Westgate had made
misrepresentations to fraudulently induce him to enter into the
REPC.

¶3     The parties spent several months negotiating in an attempt
to resolve the deposit dispute without litigation. Burningham
proposed to settle the matter by allowing Westgate to retain
$30,000 of the deposit and return the rest, but Westgate took the
position that it was entitled to the entire deposit and declined
Burningham’s offer. Burningham then asked Westgate to sell him
the condominium unit for a substantially reduced price, and
Westgate agreed.

¶4     In September 2010, the parties settled their dispute by
executing a second contract (the Agreement) for the sale of the
condominium unit, this time for the reduced purchase price of
$462,500. The only deposit contemplated by the Agreement was the
$89,900 that Burningham had previously paid Westgate under the
REPC. The Agreement designated the $89,900 as the “Initial
Deposit” and stated its due date as “Already deposited.” The
Agreement purported to resolve all outstanding issues between the
parties arising under the REPC and stated that it was “wholly

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                 Burningham v. Westgate Resorts

integrated and shall supersede any and all previous and current
understandings and agreements between the Buyer and Seller.”
The Agreement also expressly abrogated the REPC, stating that the
Agreement “replaces in its entirety a previous purchase and sale
agreement entered into between Buyer and Seller with respect to
a unit.”

¶5     Unlike the REPC, the Agreement contained a provision
granting Burningham the right to terminate the Agreement in his
sole discretion merely by giving notice to Westgate within seven
days of the Agreement’s effective date. Paragraph 38.1 of the
Agreement, entitled “Buyer’s Due Diligence,” stated,

      Buyer, in its sole discretion, may terminate this
      Agreement within seven (7) days of the Effective
      Date (as defined in Paragraph 44 of this Agreement)
      by delivering written notice to Seller . . . . If Buyer
      timely terminates this Agreement under this Section
      39.1,[2] the deposit(s) paid shall be returned to Buyer;
      thereupon, Buyer shall be released from all further
      obligations under this Agreement, except as
      specifically set forth herein.

Burningham exercised this termination option by giving timely
written notice to Westgate. However, Westgate refused to return
Burningham’s deposit, contending that neither party had intended
to provide Burningham the unilateral right to cancel the Agreement
and recover the full $89,900 originally deposited under the REPC.

¶6    Burningham sued Westgate for the return of the deposit,
and Westgate brought counterclaims arguing mutual mistake and
seeking declaratory relief under the Agreement. Burningham

2. We accurately quote paragraph 38.1’s reference to “this Section
39.1,” and we note that the Agreement does not contain a
paragraph or section 39.1.

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                 Burningham v. Westgate Resorts

moved for summary judgment, arguing that his entitlement to the
deposit pursuant to paragraph 38.1 of the Agreement was clear as
a matter of law. Westgate opposed the motion, arguing that the
parties’ mutual intent in executing the Agreement was that the
$89,900 be treated as a nonrefundable credit towards the purchase
price of the condominium unit.

¶7     Westgate argued that Burningham’s release of all his claims
under the REPC evidenced his intent to forfeit the deposit.
Westgate also submitted a declaration from its sales agent who had
negotiated the Agreement. The sales agent’s declaration stated that
it was Westgate’s understanding that both parties intended “that
Westgate would retain Burningham’s deposit under [the REPC] as
liquidated damages, but would also reduce the price of the
[condominium unit] in an amount equal to the forfeited deposit,
subject to closing.” The sales agent based this conclusion on his
“discussions and interactions” with Burningham leading up to the
execution of the Agreement.

¶8     The district court granted Burningham’s motion for
summary judgment. In its summary judgment order, the district
court identified multiple undisputed facts, including the existence
of paragraph 38.1’s termination and refund provisions. The district
court then concluded that the Agreement was an integrated
contract, that it unambiguously identified the $89,900 as the
“deposit,” and that it unambiguously provided for the return of
that deposit to Burningham in the event that he timely terminated
the Agreement. The district court also concluded that there were no
circumstances such as fraud or mistake that would require the
court to consider Westgate’s extrinsic evidence—i.e., the sales
agent’s declaration—despite the Agreement’s unambiguous
language. Accordingly, the district court determined that Westgate
had breached the Agreement as a matter of law and awarded
Burningham judgment for $89,900 plus interest and attorney fees
pursuant to the Agreement.

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                  Burningham v. Westgate Resorts

¶9      Westgate filed a motion for new trial in the district court,
arguing that the district court had erred in failing to consider
extrinsic evidence because Westgate had raised a claim of mutual
mistake and because paragraph 38.1’s reference to “this Section
39.1” constituted a scrivener’s error. The district court denied
Westgate’s motion, concluding that the sales agent’s declaration
failed to create a fact question on mutual mistake, as opposed to a
unilateral mistake by Westgate. The district court also concluded
that the reference to the nonexistent section 39.1 was an “obvious
typographical error” and that Westgate had presented no evidence
that the deposit‐refund language in the last sentence of paragraph
38.1 was intended to be triggered by any other actual or proposed
termination language. Westgate appeals.

             ISSUES AND STANDARDS OF REVIEW

¶10 Westgate argues that the district court erred in granting
summary judgment to Burningham because there were material
fact questions as to the parties’ intent on the refundability of the
$89,900. Specifically, Westgate argues that evidence of mutual
mistake, scrivener’s error, and the lack of a meeting of the minds
each raise a material fact question on the parties’ intent so as to
preclude summary judgment. “An appellate court reviews a trial
court’s ‘legal conclusions and ultimate grant or denial of summary
judgment’ for correctness and views ‘the facts and all reasonable
inferences drawn therefrom in the light most favorable to the
nonmoving party.’” Wolf Mountain Resorts, LC v. ASC Utah, Inc.,
2011 UT App 425, ¶ 8, 268 P.3d 872 (quoting Orvis v. Johnson, 2008
UT 2, ¶ 6, 177 P.3d 600). “A motion for summary judgment may
not be granted if . . . there is a factual issue as to what the parties
intended.” Id. (omission in original) (citation and internal quotation
marks omitted).

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                  Burningham v. Westgate Resorts

                            ANALYSIS

¶11 The district court concluded that, pursuant to paragraph
38.1 of the Agreement, Burningham timely terminated the
Agreement and was entitled to a refund of his $89,900 deposit as a
matter of law. Notwithstanding the language of paragraph 38.1,
Westgate argues that extrinsic evidence—primarily the declaration
of its sales agent—creates material questions of fact on its
arguments of mutual mistake, scrivener’s error, and the parties’
failure to reach a “meeting of the minds.” We address each of these
arguments in turn.

                         I. Mutual Mistake

¶12 Westgate first argues that it provided the district court with
extrinsic evidence of a mutual mistake regarding whether the
$89,900 was to be refundable to Burningham under the Agreement.
A mutual mistake of fact can provide the basis for equitable
rescission or reformation of a contract even when the contract
appears on its face to be a “complete and binding integrated
agreement.” West One Trust Co. v. Morrison, 861 P.2d 1058, 1061
(Utah Ct. App. 1993) (citation and internal quotation marks
omitted). “A mutual mistake occurs when both parties, at the time
of contracting, share a misconception about a basic assumption or
vital fact upon which they based their bargain.” The Cantamar, LLC
v. Champagne, 2006 UT App 321, ¶ 38, 142 P.3d 140 (citation and
internal quotation marks omitted). Westgate argues that its sales
agent’s declaration, viewed in light of the parties’ course of conduct
leading up to the Agreement, raises a fact question as to whether
the inclusion of paragraph 38.1’s refund language in the
Agreement was a mutual mistake.

¶13 The sales agent’s declaration summarizes, from Westgate’s
perspective, the events leading up to the execution of the
Agreement. The declaration clearly provides evidence that Westgate
did not intend for the $89,900 to be refundable, stating that “at no
time did Westgate intend for the [$89,900] to be considered a

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                  Burningham v. Westgate Resorts

refundable deposit under the [Agreement].” It also provides
evidence of Westgate’s subjective understanding that Burningham
shared its intent, stating that the sales agent “understood these to
be Burningham’s intentions based on [the agent’s] discussions and
interactions with [Burningham] leading up to the [Agreement].”

¶14 What the sales agent’s declaration does not do is provide
evidence of Burningham’s intent, as opposed to Westgate’s
understanding of that intent. The declaration does not provide the
substance of any of the sales agent’s “discussions and interactions”
with Burningham that would provide evidence of Burningham’s
intent.3 Instead, the declaration relies on Burningham’s silence,
stating that “[a]t no time did Burningham indicate . . . that he
intended the [$89,900] to be a refundable deposit under the
[Agreement] or that he interpreted it to be the ‘deposit’ referenced
in Paragraph 38.1 of the [Agreement].”

¶15 We agree with the district court that the sales agent’s
declaration “does not show that Mr. Burningham was also
mistaken on [the deposit] issue.” The declaration provides
evidence only of unilateral mistake by Westgate, not the mutual
mistake required to establish grounds for equitable rescission of the
Agreement. We therefore conclude that the declaration did not
raise a material question of fact on mutual mistake so as to
preclude summary judgment.

3. Westgate does point to an email from Burningham during the
course of the parties’ negotiations wherein Burningham offered to
“appl[y] my deposit” from the REPC to the proposed reduced‐
price purchase of the condominium under the Agreement.
However, we see nothing in this statement to support Westgate’s
argument that the Agreement was to treat the $89,900 as a non‐
refundable credit, rather than as a deposit subject to the
Agreement’s various refund provisions.

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                  Burningham v. Westgate Resorts

¶16 Westgate also argues that it was clearly entitled to retain the
$89,900 under the REPC and that it would therefore “def[y] all
logic and common sense” to make the money refundable under the
terms of the Agreement. To the extent that this argument even
bears on the question of mutual mistake, we observe that the
proper disposition of the $89,900 under the REPC was disputed at
the time the parties entered into the Agreement. By entering into
the Agreement, Westgate obtained the release of Burningham’s
fraud and related claims—which, if successful, would likely have
entitled Burningham to an award of attorney fees in addition to the
$89,900. Further, the Agreement did not only address the $89,900
but also provided another opportunity for Westgate to sell the
condominium unit, which had lost substantial value over the
course of the parties’ dealings. It may well have been in Westgate’s
business interest to risk losing the deposit in order to divest itself
of the devalued condominium unit for the price stated in the
Agreement. Under these circumstances, we see nothing in the
course of the parties’ conduct to support Westgate’s argument that
both Westgate and Burningham were mistaken as to the
Agreement’s refund language.

                        II. Scrivener’s Error

¶17 Next, Westgate argues that there is a material issue of fact as
to whether the Agreement contains a scrivener’s error. The alleged
scrivener’s error is contained in the refund language of paragraph
38.1 of the Agreement, which states, “If Buyer timely terminates
this Agreement under this Section 39.1, the deposit(s) paid shall be
returned to Buyer . . . .” (Emphasis added.) Westgate argues that
the district court erred when it failed to consider extrinsic evidence
regarding the effect of the alleged scrivener’s error. See Wolf
Mountain Resorts, LC v. ASC Utah, Inc., 2011 UT App 425, ¶ 11, 268
P.3d 872 (explaining that scrivener’s error is a type of mutual
mistake and that the court must therefore consider extrinsic
evidence to determine the parties’ intent).

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                  Burningham v. Westgate Resorts

¶18 We see no error by the district court because Westgate failed
to present any extrinsic evidence that the reference to “this Section
39.1” was intended to refer to any section or paragraph other than
the existing paragraph 38.1 of the Agreement. For example,
Westgate presented no testimony from the sales agent or anyone
else that the Agreement was actually intended to refer to another
section. By contrast, in Wolf Mountain Resorts, LC v. ASC Utah, Inc.,
2011 UT App 425, 268 P.3d 872, the party defending the actual
language of a contract “opposed a claim of scrivener’s error with
the affidavit of the scrivener himself,” explaining that the language
of the document was exactly as intended. See id. ¶ 12 n.1. Further,
in Wolf Mountain, the actual language of the document was
internally consistent, as the alleged scrivener’s error involved the
mixing up of the two existing terms “Mortgagee” and
“Mortgagor.” See id. ¶¶ 2–7. Here, there is no evidence of any
actual or proposed section 39.1 to which the Agreement could have
referred.4

¶19 Under these circumstances, we see no material issue of fact
on whether paragraph 38.1’s reference to “this Section 39.1” was a
scrivener’s error. Accordingly, the district court did not err in
characterizing the reference as an “obvious typographical error”
that did not preclude summary judgment.

                     III. Meeting of the Minds

¶20 Westgate’s final argument is that there is a disputed issue of
material fact as to whether the parties reached a “meeting of the
minds” on the meaning of “deposit(s) paid” as that term is used in
paragraph 38.1 of the Agreement. Under paragraph 38.1, deposits

4. Westgate suggests on appeal that the disputed language may
have been intended to “deliberately refer[] to a section that does
not exist in this particular contract so the cancellation provision
does not apply.” However, Westgate presented no evidence of this
interpretation to the district court.

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                   Burningham v. Westgate Resorts

paid were to be refunded to Burningham upon his timely
termination of the Agreement. However, Westgate argues that the
parties had very different intentions as to whether the $89,900
constituted a refundable deposit “paid” under the Agreement—as
opposed to money “already deposited” under the REPC—and,
thus, that there was never a meeting of the minds on this issue.

¶21 Westgate correctly identifies a “meeting of the minds” as a
necessary element of contract formation. See, e.g., Terry v. Bacon,
2011 UT App 432 , ¶ 21, 269 P.3d 188 (“Under general contract law,
it is fundamental that there be a meeting of the minds as to all
essential features of a contract.”). “[T]his meeting of the minds
must be spelled out, either expressly or implicitly, with sufficient
detail to be enforced.” Republic Grp., Inc. v. Won‐Door Corp., 883
P.2d 285, 294 (Utah Ct. App. 1994). Here, the terms of the parties’
agreement are contained in a written contract, the Agreement, and
we look to that document to evaluate whether the parties reached
the required meeting of the minds on the deposit issue. See United
States Fid. & Guar. Co. v. United States Sports Specialty Ass’n, 2012 UT
3, ¶ 16, 270 P.3d 464 (“The written policy evinces a ‘meeting of the
minds’ between the insurer and the insured.”); John Call Engʹg, Inc.
v. Manti City Corp., 743 P.2d 1205, 1207–08 (Utah 1987) (evaluating
the parties’ “meeting of the minds” by examining their written
contract).

¶22 The Agreement clearly states that the purchase price for the
condominium unit was $462,500, and it identifies only one
deposit—the “Initial Deposit” of $89,900. The due date for the
deposit is expressed as “Already deposited.” The Agreement then
identifies multiple circumstances in which the deposit would be
refunded to Burningham, including Burningham’s inability to
obtain financing, Westgate’s inability to provide clear title, default
by Westgate, unremedied casualty loss to the condominium unit
prior to closing, and termination of the Agreement by Burningham
under paragraph 38.1. These provisions all use slightly different
terminology to describe the deposit refund: “deposit(s) hereunder
shall be returned to Buyer,” “a full refund of Buyer’s deposit,” “the

20120469‐CA                       10                2013 UT App 244
                   Burningham v. Westgate Resorts

return of Buyer’s deposits,” “all deposits shall be returned to the
Buyer,” and paragraph 38.1’s “deposit(s) paid shall be returned to
Buyer.”

¶23 Even on summary judgment, Westgate’s meeting of the
minds argument must be evaluated against these provisions of the
Agreement. See McCleve Props., LLC v. D. Ray Hult Family Ltd.
P’ship, 2013 UT App 185, ¶¶ 11–14, 307 P.3d 650 (affirming
summary judgment because affidavit of party’s intent was
insufficient to create fact question in light of unambiguous writings
to the contrary). Westgate’s argument, supported by the sales
agent’s declaration, is that Westgate always understood the $89,900
to represent a nonrefundable credit against the price of the
condominium unit. This understanding is flatly contradicted by the
Agreement, which states that $89,900 was a deposit rather than a
credit and was refundable in multiple circumstances, including
Burningham’s timely termination of the contract pursuant to
paragraph 38.1.

¶24 “In the context of contract formation, the Utah appellate
courts have held that ‘each party has the burden to read and
understand the terms of a contract before he or she affixes his or
her signature to it.’” Id. ¶ 12 (quoting John Call Engʹg, Inc., 743 P.2d
at 1208). “Furthermore, sophisticated business parties are charged
with knowledge of the terms of the contracts they enter into.” ASC
Utah, Inc. v. Wolf Mountain Resorts, LC, 2010 UT 65, ¶ 28, 245 P.3d
184 (citation and internal quotation marks omitted).5 Given these
principles and the clear refund language contained in the
Agreement, we have no difficulty in concluding that, legally
speaking, Westgate and Burningham reached a meeting of the

5. We note that the district court recognized as an undisputed fact
that “[b]oth Burningham and Westgate are sophisticated parties
and were represented by legal counsel” while negotiating the
Agreement.

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                  Burningham v. Westgate Resorts

minds on the deposit issue when they both executed the
Agreement.

¶25 We reach this conclusion despite Westgate’s assertion on
appeal that the Agreement contemplated a distinction between
deposits “paid” and deposits “[a]lready deposited.” The
Agreement contains no express distinction between those terms,
and all references to the deposit throughout the Agreement appear
by their plain language to refer to the only deposit identified in the
Agreement—the “Initial Deposit” of $89,900. See generally Nolin v.
S & S Constr., Inc., 2013 UT App 94, ¶ 12, 301 P.3d 1026 (“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.” (citation and internal quotation marks omitted)). In
light of this plain language, Westgate’s alternative interpretation is
not reasonable, and we see no ambiguity in the Agreement. See
Daines v. Vincent, 2008 UT 51, ¶ 30 & n.5, 190 P.3d 1269 (“[A]ny
contended for interpretation must be ‘reasonably supported by the
language of the contract.’” (quoting Ward v. Intermountain Farmers
Ass’n, 907 P.2d 264, 268 (Utah 1995))).

                          CONCLUSION

¶26 The district court correctly concluded that Westgate’s
evidence demonstrated only a unilateral mistake by Westgate as to
whether the $89,900 was refundable and did not raise a material
fact question on mutual mistake as argued by Westgate. The
district court also appropriately corrected the scrivener’s or
typographical error in the Agreement referring to “this Section
39.1,” and the court correctly rejected Westgate’s “meeting of the
minds” argument in light of the Agreement’s clear language that
the $89,900 constituted refundable “deposit(s) paid.” For these
reasons, we affirm the district court’s entry of summary judgment
in favor of Burningham, and we remand this matter to the district

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                  Burningham v. Westgate Resorts

court for a determination of Burningham’s reasonable attorney fees
incurred on appeal.6

6. The district court awarded Burningham his attorney fees below
pursuant to an attorney fees clause in the Agreement, and
Burningham has requested in his appellee’s brief that he be
awarded his attorney fees on appeal pursuant to the Agreement.
See generally Utah R. App. P. 24(a)(9), (b) (requiring an appellee
seeking to recover attorney fees incurred on appeal to “state the
request explicitly and set forth the legal basis for such an award”).
Because Burningham was awarded attorney fees below, properly
requested his fees incurred on appeal, and prevailed on appeal, he
is entitled to an award of reasonable appellate attorney fees. See
Robertson’s Marine, Inc. v. I4 Solutions, Inc., 2010 UT App 9, ¶ 8, 223
P.3d 1141 (“The general rule is that when a party who received
attorney fees below prevails on appeal, the party is also entitled to
fees reasonably incurred on appeal.” (citation and internal
quotation marks omitted)).

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