Court Opinion

ID: 9539661
Source: CourtListenerOpinion
Date Created: 2023-08-07 16:08:08.249809+00
Date Added: 2024-06-11T14:59:09.653344
License: Public Domain

HALL, Chief Justice
(dissenting):
The opinion of the Court is premised upon what it characterizes as an irresistible conclusion that the parties intended to fully and completely settle with each other any and all liability arising from the contract, together with the remedies provided therein for its enforcement. However, plaintiffs were obviously not seized by any such irresistible conclusion. On the contrary, plaintiffs chose to disregard the accord and satisfaction reached by the parties and brought this action on the contract, urging its viability, and seeking damages for alleged breach. Defendants were thus compelled to defend the contract action. Defendants were successful in their defense, relying on the theories of failure of a condition precedent and accord and satisfaction. Given these circumstances, plaintiffs should not be heard to complain about an award of attorney fees to defendants for successfully defending their contract position.
In BLT Investment Co. v. Snow,1 we vacated an award of attorney fees based on a contract provision. In that case, the defendants had successfully sought rescission of the contract while the plaintiff sought specific performance of the contract. We held that the rescission of the contract and return of the parties to their status quo had completely extinguished the contract and, therefore, attorney fees could not be awarded on the basis of the contract provision.
The rationale of BLT Investment is inapplicable to the instant case because there was no rescission of the contract. As we held in BLT Investment, when a contract is *673rescinded, the parties are returned to their status quo and the contract is extinguished in its entirety.2 Here, defendants prevailed on the theories that their duty to buy the property was excused by the failure of a condition precedent and discharged by an accord and satisfaction. Neither theory necessarily entails the extinguishment of the entire contract.3
A condition precedent may qualify the existence of an entire contract or only the performance of a contractual duty.4 Where only the performance of a duty is qualified by the condition, failure of the condition excuses that performance only and the remaining provisions of the contract remain in effect. In this case, the condition that assurances of proper zoning be obtained, qualified only defendants’ duty to buy the land.5 The failure of that condition excused defendants’ performance of that duty but had no effect on the remaining rights and duties created by the contract, including those arising from the attorney fees provision.
Similarly, an accord and satisfaction may discharge an entire contract or only a portion thereof.6 While claims within the scope of an accord are discharged upon satisfaction of the accord, any other rights or duties created by the contract remain in effect.7 The scope of an accord is primarily a matter of the intention of the parties.8 Claims that are unknown or not yet in existence when an accord is reached are outside the scope of the accord.9 In the present case, defendants’ claim for attorney fees, having arisen only after the accord and satisfaction occurred, was not within the scope of the accord and was thus not discharged upon satisfaction of the accord.
Plaintiffs further contend the language of the attorney fees provision itself does not support an award to defendants for fees incurred in successfully defending a lawsuit on the contract. I do not agree.
The provision for attorney fees is contained in a preprinted document denominated as a “Uniform Real Estate Contract” which is in general use in this jurisdiction. Plaintiffs argue the provision creates a right to attorney fees only for enforcing the contract or a right arising from breach of the contract against the defaulting party. Thus, under plaintiffs’ interpretation, defendants would be entitled to attorney fees only if they brought an action against the plaintiffs in the event of plaintiffs’ default. Relying on our recent decision in White v. Fox,10 plaintiffs assert that defendants, not having; bargained for an express contractual right to attorney fees incurred in defending a lawsuit on the con*674tract, have no legal basis for claiming such fees.
Plaintiffs’ construction of the attorney fees provision is unreasonably narrow and contrary to the intent behind the provision. Unlike the provision at issue in White, the provision in this case, even under plaintiffs’ interpretation, applies to both parties to the contract. In White, we held that where the parties had equal bargaining power an agreement by one party to pay attorney fees could not be read to impose a reciprocal duty on the other party.11 In this case, by the terms of the provision itself, the duty to pay attorney fees is reciprocal, and the issue is whether the duty includes liability for fees incurred by either party in successfully defending an action on the contract. I think it does. In successfully asserting that their contractual duty to buy the property had been excused, defendants in effect enforced their contractual rights. Thus, payment of their attorney fees by plaintiffs was required by the contract provision.
Moreover, the intent behind an attorney fees provision is to protect the party in whose favor the provision runs (in this case both parties) from the costs of litigation in the event such protection is warranted, i.e., in the event that the party prevails. This intent is fostered by requiring payment of attorney fees, regardless of which party initiated the lawsuit. To limit the award of attorney fees to the party commencing the action in no way advances the purpose of an attorney fees provision. Rather, it serves the counter-productive end of penalizing one who is the target of an unsuccessful lawsuit on the contract. Thus, the more reasonable interpretation of the contract provision is that which provides for an award of attorney fees to the prevailing party in litigation on the contract, regardless of whether that party initiated the lawsuit.
I would affirm the judgment of the district court.

. Utah, 586 P.2d 456 (1978).

. 586 P.2d at 458.

. Other courts have also refused to bar a prevailing defendant from receiving attorney fees under a contract provision where there was no rescission of the contract. E.g., Usinger v. Campbell, 280 Or. 751, 759, 572 P.2d 1018, 1023 (1977); Woodruff v. McClellan, 95 Wash.2d 394, 397, 622 P.2d 1268, 1270 (1980).

. See 5 W. Jaeger, Williston on Contracts § 666 (3d ed.1961).

. The contract states:
52.j. This offer is made subject to the following conditions being satisfied by purchaser within 60 days from date of acceptance of this offer.
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2. Assurance of proper zoning to develop the property into residential lots....

. 1 CJ.S. Accord and Satisfaction § 19, at 486 (1985), states:
Even though a contract appears to be entire, if it gives rise to several and distinct obligations or liabilities the parties may make an accord and satisfaction of one or more of them without affecting the others....
(Footnote omitted.)

. 1 C.J.S. Accord and Satisfaction § 19, at 486 (1985).

. See Messick v. PHD Trucking Serv. Inc., Utah, 615 P.2d 1276, 1277-78 (1980).

. See Messick, 615 P.2d at 1278. See also Scantlin v. Superior Homes, Inc., 6 Kan.App.2d 144, 627 P.2d 825, 831 (1981); Plywood Mktg. Assocs. v. Astoria Plywood Corp., 16 Wash.App. 566, 574-75, 558 P.2d 283, 289 (1976).

. Utah, 665 P.2d 1297 (1983).

. 665 P.2d at 1300.