Court Opinion

ID: 7801879
Source: CourtListenerOpinion
Date Created: 2022-08-18 23:13:26.945126+00
Date Added: 2024-06-11T16:29:21.509430
License: Public Domain

2022 UT App 96

               THE UTAH COURT OF APPEALS

                       DEAN VIERTEL,
               Appellant and Cross-appellee,
                            v.
  BODY FIRM AEROBICS LLC, VASA TARGET LLC, VASA FITNESS
          LLC, SCOTT FELSTED, AND TROY PETERSON,
              Appellees and Cross-appellants.

                            Opinion
                       No. 20200841-CA
                      Filed August 4, 2022

            Fourth District Court, Provo Department
                The Honorable Derek P. Pullan
                         No. 190401248

          Thomas W. Seiler, Jared L. Anderson, Derek T.
           Marshall, and Perris E. Nelson, Attorneys for
                 Appellant and Cross-appellee
            Blake T. Ostler, Attorney for Appellees and
                         Cross-appellants

   JUDGE GREGORY K. ORME authored this Opinion, in which
 JUDGE RYAN M. HARRIS and JUSTICE DIANA HAGEN concurred. 1

ORME, Judge:

¶1      Dean Viertel challenges the district court’s grant of
summary judgment in favor of Body Firm Aerobics, LLC; VASA
Target, LLC; VASA Fitness, LLC; Scott Felsted; and Troy Peterson
(collectively, Appellees). Because Viertel has not challenged each

1. Justice Diana Hagen began her work on this case as a judge of
the Utah Court of Appeals. She became a member of the Utah
Supreme Court thereafter and completed her work on this case
sitting by special assignment as authorized by law. See generally
Utah R. Jud. Admin. 3-108(4).
                    Viertel v. Body Firm Aerobics

independent basis for the district court’s ruling on appeal, we
affirm.

                         BACKGROUND 2

¶2      This case arises from an oral agreement in 1993, and a
written agreement in 1998, between Viertel and Felsted regarding
Viertel’s ownership in Body Firm Aerobics (BFA). 3 Viertel
contended that in each agreement, Felsted granted him a
significant ownership interest in BFA. Specifically, Viertel argued
that in 1998, Felsted “confirmed in writing” and “expressly
ratified” the earlier oral agreement that Viertel held a 30% interest
in BFA. To substantiate his version of events, Viertel later
produced a page from a notepad on which Felsted wrote: “Dean
Viertel now owns and has rights to 30% of Body Firm Inc’s Stock.
Which also entitles him to all of the property, equipment, and
privileges.” The note was signed by Felsted as “V.P. Body Firm
Inc.,” and below his signature, he wrote: “this reflects an
arrangement made back some 5 plus years ago.”

¶3    From 1993 to 2001, Viertel worked for BFA providing
marketing services. 4 At some point in 2000, Peterson, who at the

2. “In reviewing the court’s grant of summary judgment, we view
the facts and all reasonable inferences drawn therefrom in the
light most favorable to the nonmoving party and recite the facts
accordingly.” Ockey v. Club Jam, 2014 UT App 126, ¶ 2 n.2, 328 P.3d
880 (quotation simplified).

3. The briefing and record in this case contain extensive factual
and procedural histories. But due to the procedural posture of the
appeal, we have no need to lay out most of that history, and we
present only the history necessary to our analysis on appeal.

4. There is some dispute in the record regarding whether Viertel’s
employment with BFA ended in 1999 or 2001. This dispute is
                                                   (continued…)

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                   Viertel v. Body Firm Aerobics

time was a director of BFA, orally informed Viertel that he was
not a shareholder of the company.

¶4     Nevertheless, even after Viertel’s employment with BFA
ended, the company continued to make regular payments to
Viertel. These payments began in 1998 and ended in 2014. In
November 2014, the payments from BFA ceased, but from early
2015 to May 2015, Felsted made payments to Viertel from his
personal accounts. After May 2015, all payments to Viertel from
BFA or any individual affiliated with the company ceased. One
month before Felsted stopped making these payments, he
informed Viertel that Viertel had an equity interest in BFA and
that BFA would purchase his ownership interest, though for less
than what he was expecting. Over the next year, however, Viertel
did not receive a purchase offer from BFA.

¶5     In 2018, VASA Target, LLC acquired BFA. 5 In July 2019,
Viertel filed suit against BFA, VASA, Felsted, and Peterson
asserting five causes of action. First, he sought a court order
allowing him to inspect BFA’s records. Second, he sought
declaratory judgment that he owned a 30% interest in BFA. Third,
he alleged common law fraud on the ground that Appellees failed
to disclose to him, an owner of BFA, “the existence of the
negotiations and indications of interest of [VASA] and other
Defendants in the acquisition, if any, of membership interests or
assets of [BFA].” Fourth, he asserted that Appellees had breached
the implied covenant of good faith and fair dealing in cutting him

immaterial to the issues raised on appeal, and we do not resolve
it here.

5. It is unclear from the record whether VASA Target, LLC
merged with BFA or acquired it via stock purchase but the
distinction is inconsequential in the context of this appeal.
Thereafter, VASA Target, LLC turned management of BFA’s
properties over to VASA Fitness, LLC. For ease of reference,
throughout this opinion we simply refer to VASA Target, LLC
and VASA Fitness, LLC collectively as VASA.

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                    Viertel v. Body Firm Aerobics

out of the negotiations with VASA and out of his share of the sale
proceeds. Fifth, he alleged breach of fiduciary duty against
Felsted and Peterson because they “had an affirmative duty to”
him to disclose “material facts” concerning VASA’s acquisition of
BFA.

¶6     Appellees moved for summary judgment, primarily
arguing that shares of BFA were never validly issued to Viertel;
that any agreement to issue BFA shares lacked the requisite
definiteness; and that, in any event, all Viertel’s claims were
barred by the applicable statutes of limitations. Additional
summary judgment motions followed from both sides, and the
court eventually granted summary judgment in favor of
Appellees on all Viertel’s claims and dismissed Viertel’s
complaint with prejudice.

¶7      As relevant to our analysis, the court granted summary
judgment to Appellees based on the following rationale. It began
by granting summary judgment on Viertel’s fourth claim for
breach of the implied covenant of good faith and fair dealing—or
as the district court called it, Viertel’s “breach of contract claim”—
on two independent bases. First, it determined that “Felsted had
neither actual nor apparent authority to grant Viertel shares in
BFA” in 1993 or 1998 and that BFA had never ratified any such
agreement, and second, it determined that “[e]ven if Scott Felsted
had the apparent authority to issue shares to Viertel . . . , the
promise to grant a thirty percent interest in [BFA] is not
sufficiently definite to be enforced.” Piggybacking on this ruling,
the court then granted summary judgment on Viertel’s first and
second claims because “[w]ithout an ownership interest in [BFA],
Viertel has no right to inspect the business records . . . and no right
to the declaratory judgment he seeks” to confirm his ownership
interest. Then, the court granted summary judgment to Appellees
on Viertel’s breach of fiduciary duty claim on the basis that
“Viertel did not plead any other special relationship from which
a fiduciary duty might derive other than his ownership interest in
BFA” and, given that Viertel had no ownership interest, there was
no material dispute of fact on this claim. And finally, regarding

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                   Viertel v. Body Firm Aerobics

Viertel’s fraud claim, the court granted summary judgment to
Appellees on the ground that the applicable statute of limitations
had run.

¶8     Viertel appeals.

            ISSUES AND STANDARDS OF REVIEW

¶9      Viertel raises two issues that warrant our consideration. 6
First, he contends that the district court erred at the summary
judgment stage by “impermissibly weighing evidence and/or
assessing credibility in determining” that Felsted did not have
“actual authority to bind [BFA].” Second, Viertel argues that the
court erred in determining that the statute of limitations barred
his common law fraud claim. “In reviewing a district court’s
summary judgment ruling, we review its legal conclusions and
ultimate grant or denial of summary judgment for correctness.”
Arlington Mgmt. Assocs., Inc. v. Urology Clinic of Utah Valley, LLC,
2021 UT App 72, ¶ 9, 496 P.3d 719 (quotation simplified).

6. Viertel also contends that the district court erred in denying a
summary judgment motion and a motion brought pursuant to
rule 56(d) of the Utah Rules of Civil Procedure. As discussed
below, because Viertel has not attacked each independent basis of
the district court’s ownership ruling, he cannot overcome the
court’s adverse ruling on all his claims, and we therefore have no
need to consider these other issues.
   Additionally, Appellees filed a cross-appeal in which they
contend that the district court erred in determining that, aside
from Viertel’s fraud claim, his other claims were not barred by the
applicable statutes of limitations. Because we affirm the court’s
summary judgment ruling and its ultimate dismissal of Viertel’s
suit with prejudice, Appellees have received the result they are
seeking, and we have no need to address this issue.

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                    Viertel v. Body Firm Aerobics

                            ANALYSIS

                                 I.

¶10 Viertel argues that the district court impermissibly
weighed evidence and assessed credibility at the summary
judgment stage when it determined that Felsted lacked actual
authority to bind BFA to the agreement to grant Viertel shares in
the company. Although the court did grant summary judgment
to Appellees on this basis, it also granted it on the additional
independent basis that the agreement between Felsted and Viertel
was not sufficiently definite to be enforced. Thus, the court
determined that regardless of Felsted’s authority, Viertel was not
an owner of BFA. 7 Specifically, the court first determined that
Viertel’s fourth claim for breach of the implied covenant of good
faith and fair dealing could not survive summary judgment
because the agreement between Viertel and Felsted was not
sufficiently definite to be enforced. The court then granted
summary judgment on Viertel’s claims that he was entitled to
inspect BFA’s records, to receive declaratory judgment that he
owned 30% of BFA, and to a determination that Felsted and
Peterson breached a fiduciary duty owed to him. The court’s
rationale was that because Viertel could not prove that he was an
owner of BFA, he likewise could not succeed on these other claims
that all hinged on him being an owner of BFA.

¶11 In Viertel’s principal brief on appeal, he did not address
this independent basis for the entry of summary judgment against
him. He did address it in his reply brief, but only after Appellees
raised this critical point in their principal brief. This is fatal to
Viertel’s appeal. “Appellants are not permitted to raise matters for
the first time in a reply brief,” Chard v. Chard, 2019 UT App 209,
¶ 34, 456 P.3d 776, and when they do, “that issue is waived and
will typically not be addressed by the appellate court,” State v.

7. Viertel conceded at oral argument before this court that the
district court’s sufficiently-definite ruling was an independent
alternative ground for the court’s summary judgment ruling.

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                    Viertel v. Body Firm Aerobics

Johnson, 2017 UT 76, ¶ 16, 416 P.3d 443. Additionally, “we will not
reverse a ruling of the district court that rests on independent
alternative grounds where the appellant challenges only one of
those grounds.” Kendall v. Olsen, 2017 UT 38, ¶ 12, 424 P.3d 12
(quotation simplified). Because Viertel has waived any challenge
to the district court’s sufficiently-definite ruling, we “have no
choice but to affirm the district court’s” summary judgment
ruling regarding Viertel’s first, second, fourth, and fifth claims on
the basis that Viertel has not carried his burden of persuasion on
appeal, “and we do so without endorsing the merits of the district
court’s [decision].” See Chard, 2019 UT App 209, ¶ 35 (quotation
simplified).

                                 II.

¶12 Viertel’s remaining claim is for common law fraud. He
argues that the district court erred in granting summary judgment
on this claim on the ground that it was barred by the applicable
statute of limitations. Here, we make no ruling regarding the
court’s statute of limitations determination and rather affirm on
an alternative ground apparent in the record. See Cochegrus v.
Herriman City, 2020 UT 14, ¶ 36, 462 P.3d 357 (“It is within our
discretion to affirm a judgment on an alternative ground if it is
apparent in the record.”) (quotation simplified).

¶13 Based on the record before us, it is clear that Viertel’s fraud
claim, like all his other claims, turned on whether he was an
owner of BFA. Specifically, Viertel alleged that he was an “owner
of 30% of [BFA],” and thus, Felsted and Peterson “had an
affirmative duty to disclose to [him] the existence of” VASA’s
interest in BFA, its negotiations with BFA, and its subsequent
acquisition of BFA. But because we have determined, for
purposes of this appeal, that Viertel did not establish that he was
an owner in the company, there can be no fraud here as a matter
of law. Very simply, Felsted and Peterson had no duty to disclose
to Viertel, as a non-owner, any negotiations with, interest of, or
subsequent acquisition by VASA. Therefore, “there is no genuine
dispute as to any material fact,” see Utah R. Civ. P. 56(a), and the

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                    Viertel v. Body Firm Aerobics

district court did not err in granting summary judgment on this
claim to Appellees. 8

                          CONCLUSION

¶14 Viertel has not challenged each independent basis for the
district court’s ruling regarding his first, second, fourth, and fifth
claims against Appellees. Thus, he has not met his burden of
persuasion on appeal, and we affirm the district court’s ruling
regarding these four claims. And due to Viertel forgoing a focused
challenge to the district court’s ownership ruling, we determine
that the court did not err in granting summary judgment to
Appellees on his claim for common law fraud because, without
Viertel being an owner, no genuine dispute of material fact existed
with respect to this fraud claim.

¶15    Affirmed.

8. As part of Viertel’s fraud claim set forth in his complaint, there
are also some vague references to other ways in which Viertel
claims to have been defrauded, such as the conclusory statements
that VASA “conspired with the other Defendants to defraud
[him].” But this and any other potential claims of fraud were not
pleaded with particularity because Viertel did not state how
VASA conspired to defraud him or how Appellees otherwise
defrauded him. See Utah R. Civ. P. 9(c) (“In alleging fraud or
mistake, a party must state with particularity the circumstances
constituting fraud or mistake.”). On this ground, we affirm the
district court’s order regarding any of Viertel’s ancillary fraud
claims.

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