Court Opinion

ID: 5138914
Source: CourtListenerOpinion
Date Created: 2021-12-21 15:21:52.968956+00
Date Added: 2024-06-11T08:24:12.841924
License: Public Domain

2019 UT App 100

               THE UTAH COURT OF APPEALS

                     AHMED D. HUSSEIN,
                        Appellant,
                            v.
                      UBS BANK USA,
                        Appellee.

                           Opinion
                      No. 20170709-CA
                      Filed June 6, 2019

          Third District Court, Salt Lake Department
                The Honorable Robert P. Faust
                         No. 150907967

      Matthew R. Lewis, Stephen E. Morrissey, Kemper P.
           Diehl, and Bryan J.E. Caforio, Attorneys
                        for Appellant
        Stephen P. Horvat, David L. Goldberg, Zachary
        Denver, Christian T. Kemnitz, and David Luger,
                    Attorneys for Appellee

   JUDGE GREGORY K. ORME authored this Opinion, in which
   JUDGES MICHELE M. CHRISTIANSEN FORSTER and DAVID N.
                  MORTENSEN concurred.

ORME, Judge:

¶1     Ahmed D. Hussein appeals the district court’s grant of
summary judgment in favor of UBS Bank USA. We affirm and
remand for the determination of attorney fees reasonably
incurred by UBS Bank on appeal.
                      Hussein v. UBS Bank

                       BACKGROUND 1

¶2    Hussein is an investor who worked as a broker for major
brokerage firms in the United States for 15 years before moving
to Egypt in 1996 to pursue his own investment opportunities.
Until July 2012, he was a director and the second-largest
shareholder of Quality Systems, Inc. (QSI), owning 15.7% of the
company—an interest “worth hundreds of millions of dollars.”

¶3     In 2009, Hussein developed a relationship with a financial
advisor (Financial Advisor) from UBS Financial Services, Inc.
(UBS-FS), a brokerage firm and UBS subsidiary.2 To maintain a
relationship with Financial Advisor and receive financial and
investment services from UBS-FS, Hussein signed a Client
Relationship Agreement (CRA), which governed his relationship
with UBS-FS in connection with anticipated margin loans 3
between Hussein and UBS Bank.

1. “In reviewing a district 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).

2. UBS AG, a global bank headquartered in Zurich, Switzerland,
is the parent company of both UBS Bank and UBS-FS.

3. Margin loans allow investors to borrow against the value of
securities that they already own. Margin Loans, Fidelity,
https://www.fidelity.com/trading/marginloans/overview [https:
//perma.cc/HE5V-9CPE]. “Investors generally use margin to
increase their purchasing power so that they can own more stock
without fully paying for it.” U.S. Sec. & Exch. Comm’n, Margin:
Borrowing Money to Pay for Stocks (Apr. 17, 2009), https://
                                                  (continued…)

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                       Hussein v. UBS Bank

                       The Loan Agreements

¶4     In 2009 and 2010, UBS Bank extended two margin loans to
Hussein totaling $35.5 million. Hussein secured the loans with
1.3 million shares of QSI stock, then valued at $77 million, and $5
million in diversified assets, but he also pledged his other
UBS­FS accounts as collateral.4 Without the assistance of legal
counsel, Hussein negotiated the terms of the loans and reviewed
the loan documentation (the Loan Agreements), which granted
UBS Bank the rights to call in the loans at any time and, upon the
occurrence of certain events, to liquidate Hussein’s collateral. 5

(…continued)
www.sec.gov/reportspubs/investor-publications/investorpubs
marginhtm.html [https://perma.cc/QZ64-K78P].

4. Hussein granted UBS Bank “a first priority lien and security
interest” in “any and all accounts of the Borrower at the Bank or
any of its affiliates” and “each Collateral Account,” defined as
“individually and collectively, each account of the Borrower or
Pledgor at [UBS-FS] . . . that is either identified as a Collateral
Account on the Application to which this Agreement is attached
or subsequently identified as a Collateral Account by the
Borrower or Pledgor.”

5. In securities-based lending, a margin account is opened when
a customer borrows funds from a firm or bank to pay for a
portion of the purchase price for securities. The customer’s
portion of the purchase price and the initial equity in the account
are called margin. See Purchasing on Margin, Risks Involved with
Trading in a Margin Account, Financial Industry Regulation
Authority, http://www.finra.org/investors/purchasing-margin-
risks-involved-trading-margin-account [https://perma.cc/79NU-
ZA8A]. Maintenance margin requirements establish the
                                                     (continued…)

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                        Hussein v. UBS Bank

¶5      In particular, UBS Bank could “demand full or partial
payment of the credit line obligations, at its sole option and
discretion without cause, at any time.” And if UBS Bank
“otherwise deems itself or its security interest in the Collateral
insecure, . . . then the Credit Line Obligations will become
immediately due and payable (without demand) and the Bank
may, in its sole and absolute discretion, liquidate, withdraw or
sell all or any part of the Collateral.” If the collateral “decline[s]
speedily in value” or “customarily is sold on a recognized
exchange or market,” then UBS Bank had the right to sell the
collateral and to do so without “prior notice” to Hussein.

¶6       The Loan Agreements also disclosed that UBS Bank and
its affiliates were creditors whose “interests may be inconsistent
with, and potentially adverse to, [Hussein’s] interests.”
Furthermore, UBS-FS would “comply with entitlement orders
originated by [UBS] Bank” without consent from Hussein, and if
UBS Bank asserted control over the collateral, UBS-FS would

(…continued)
minimum equity that must be maintained by the customer in a
margin account. Maintenance Margin, Investopedia, https://www.
investopedia.com/terms/m/maintenancemargin.asp [https://per
ma.cc/Y2J9-EGTX]. “If the equity in a margin account falls below
the maintenance margin, the broker will issue a margin call,
which requires that the [customer] deposit more cash into the
margin account to bring the level of funds up to the maintenance
margin, or liquidate securities in order to fulfill the maintenance
amount.” Id. Hussein’s loans were subject to a 50% margin
maintenance level. Therefore, if the value of his collateralized
securities fell below the 50% equity level that he was required to
maintain, a margin call could be triggered and he would have to
provide additional funds or liquidate some of his securities to
cover the equity shortfall.

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                      Hussein v. UBS Bank

have to comply with UBS Bank’s entitlement orders even if in
conflict with Hussein’s instructions.

¶7     Separately, UBS Bank and UBS-FS had an agreement
(the Servicing Agreement) whereby UBS Bank would offer
margin loans to UBS-FS’s clients “to be collateralized by [UBS-
FS] securities accounts and the securities, financial assets and
other investment property . . . in which a security interest has
been granted to the Bank by the Borrower.” UBS Bank would
then have “ultimate control over all entitlement orders and
other instructions . . . made with respect to the Accounts,” and
UBS-FS would have to “comply with all instructions given by
[UBS] Bank without further consent by any Borrower or
Pledgor.”

¶8     After issuing the loans, UBS Bank sent a letter to Hussein,
stating that Financial Advisor could answer any questions about
his credit line. And until 2012, Hussein’s only interactions
regarding the loans were with UBS-FS employees—not UBS
Bank itself.

¶9     Meanwhile, Hussein also opened two Portfolio
Management Program accounts (the PMP Accounts) with
UBS-FS that held $8.7 million in assets. Financial Advisor also
suggested a Prepaid Variable Forward (PVF), a financial product
aimed at helping Hussein obtain liquidity from his substantial
stock holdings in QSI and as an eventual replacement for the
loans. Discussions on the PVF proposal continued between
Hussein and UBS-FS employees until July 25, 2012, but a PVF
was never finalized.

                         The Liquidation

¶10 By July 2012, QSI’s stock price had substantially declined,
eroding the value of Hussein’s collateral for the loans. On
Saturday, July 21, 2012, Financial Advisor informed Hussein that

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                       Hussein v. UBS Bank

“[u]nfortunately, with the stock closing at $23.41 we are looking
at a [margin] call on Monday” and that Hussein needed to
deliver $600,000 in cash or additional collateral in order to
prevent such action. He also informed Hussein that selling from
the PMP Accounts “would not give us much coverage” and that
UBS Bank was “insisting we first sell [the QSI] shares (about
25,000 shares), or bring in cash or additional Collateral that is not
[QSI shares].”

¶11 Hussein told Financial Advisor that he did not want
UBS-FS to sell the QSI shares because of an ongoing proxy
contest 6 and that he needed time to acquire cash to cover the
margin call. He directed Financial Advisor to sell from the PMP
Accounts before selling the QSI shares.

¶12 For a period of five days, UBS Bank and UBS-FS did not
touch the QSI shares, yet Hussein did not provide any cash or
additional collateral to cover the equity shortfall in the account.
On July 26, 2012, QSI stock continued to decline, reducing the
value of the collateral by $23 million. UBS Bank started
liquidating Hussein’s QSI shares. After five days, UBS Bank had
sold approximately 2,276,756 shares. 7

6. A proxy contest is a battle for the control of a corporation
where “a group of shareholders join forces and gather enough
shareholder proxies to win a corporate vote.” Proxy Fight,
Investopedia, https://www.investopedia.com/terms/p/proxyfigh
t.asp [https://perma.cc/7V5Y-T4HG].

7. A total of 1.3 million QSI shares were initially pledged as
collateral. UBS Bank asserts that Hussein “pledged over $100
million in [QSI] stock and other collateral to UBS Bank” to secure
repayment for the loans. In deposition testimony, a UBS Bank
officer stated that 2.6 million QSI shares secured the UBS Bank
                                                    (continued…)

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                       Hussein v. UBS Bank

¶13 Hussein lost the proxy fight and a substantial percentage
of his QSI shares. He eventually filed suit against UBS Bank in
an effort to recover his losses.

                   The District Court’s Decision

¶14 Hussein asserted six causes of action against UBS Bank in
the course of alleging that UBS Bank fraudulently induced him
to enter into the loans, breached its contractual duties when it
liquidated his QSI shares, and violated fiduciary duties it owed
to him.

¶15 Following discovery, and relying in large part on the
governing documents, UBS Bank moved for summary judgment,
arguing that it “acted within the scope of its contractual rights
when it liquidated certain collateral that secured $35.5 million in
loans that Hussein had received from UBS Bank, and did not
breach any financial duties in that regard.” Hussein responded
by arguing that UBS-FS gave him “bad investment advice” as
UBS Bank’s agent and that UBS Bank wrongfully liquidated his
QSI shares.

¶16 The district court granted UBS Bank’s motion, concluding
that there were no genuine issues of material fact because
UBS-FS did not render financial advice to Hussein as UBS Bank’s
agent. It also concluded that UBS Bank “acted pursuant to its
clear and indisputable rights under the Loan Agreements” “to

(…continued)
loans. Yet these additional pledged shares are not acknowledged
in the loan documentation provided in the record. Given that
Hussein does not challenge UBS Bank’s security interest in the
additional QSI shares, we assume that those shares were either
collateralized or held in UBS-FS accounts and subject to the
terms of the Loan Agreements.

20170709-CA                     7                  2019 UT App 100
                      Hussein v. UBS Bank

‘liquidate any part of the Collateral’ without notice to Hussein.”
Because the Loan Agreements contained an expansive
indemnification provision, the district court awarded UBS Bank
its costs and attorney fees.

¶17   Hussein appeals.

            ISSUES AND STANDARDS OF REVIEW

¶18 Hussein raises two issues on appeal. 8 First, he contends
that the district court improperly granted UBS Bank’s motion
for summary judgment because there were genuine disputes
of material fact concerning each of his claims against UBS
Bank. Summary judgment is proper when “the moving party
shows that there is no genuine dispute as to any material
fact and the moving party is entitled to judgment as a matter of
law.” Utah R. Civ. P. 56(a). We review a district court’s decision
to grant or deny summary judgment for correctness,
“view[ing] the facts and all reasonable inferences drawn
therefrom in the light most favorable to the nonmoving party.”
Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (quotation
simplified).

¶19 Hussein also contends that the district court erred in
awarding UBS Bank attorney fees. “Whether attorney fees are
recoverable in an action is a question of law, which we review
for correctness.” Valcarce v. Fitzgerald, 961 P.2d 305, 315 (Utah
1998).

8. Hussein raises a third issue, arguing that the district court
erred in granting UBS Bank’s motion to strike his jury demand.
Because we affirm the district court’s grant of summary
judgment, this issue is moot and we do not address it further.

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                      Hussein v. UBS Bank

                          ANALYSIS

                     I. Summary Judgment

¶20 Hussein challenges the district court’s grant of UBS
Bank’s motion for summary judgment on his claims for fraud,
constructive fraud, breach of fiduciary duty, breach of contract,
tortious interference with contract, and aiding and abetting a
breach of fiduciary duty. Essentially, Hussein asserts two
theories of liability on the part of UBS Bank. He first contends
that UBS Bank induced him into taking out the loans by failing
to disclose material facts and to provide investment advice that
would have protected him from a margin call (referred to in the
briefing as the Advisory Claims). Second, Hussein contends that
UBS Bank wrongfully liquidated his QSI shares, breaching the
Loan Agreements and the CRA (referred to in the briefing as the
Liquidation Claims).

A.    The Advisory Claims

¶21 Hussein argues that UBS Bank failed to disclose material
facts to him. He also argues that UBS Bank owed him fiduciary
duties through its agent, UBS-FS. These assertions are the
grounds for his breach of fiduciary duty, fraud, and constructive
fraud claims.

¶22 On these claims, the district court concluded that UBS
Bank disclosed the potentially adverse relationship UBS Bank
and UBS-FS could have with Hussein. The court also concluded
that there was no existence of a confidential relationship
between UBS Bank and Hussein, determining that the Loan
Agreements “established an arms-length borrower/lender
relationship” and Hussein “cannot identify any fact which, if
proven at trial, would permit a finding that UBS-FS rendered
financial advice to Hussein as UBS Bank’s agent.”

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                      Hussein v. UBS Bank

1.    Fraud

¶23 Hussein asserts that, during the loan process, UBS Bank
had a duty to disclose that UBS-FS employees would put UBS
Bank’s interests before his and that his loans could be canceled
without notice and demand. 9 He maintains that certain terms of
the Servicing Agreement between UBS Bank and UBS-FS should
have been disclosed, in particular that UBS-FS “agreed to follow
UBS Bank’s instructions to liquidate Hussein’s collateral in all
circumstances.”

¶24 “An action for fraud lies where there are false
representations by defendant and reliance thereon by plaintiff to
his damage,” Semenov v. Hill, 1999 UT 58, ¶ 9, 982 P.2d 578
(quotation simplified), including concealments and omissions,
see DeBry v. Valley Mortgage Co., 835 P.2d 1000, 1007 (Utah Ct.
App. 1992). Whether a duty to disclose certain material facts
“‘exists is determinable by reference to all the circumstances of
the case.’” Id. (quoting Elder v. Clawson, 384 P.2d 802, 804 (Utah
1963)). “If those circumstances include a relation of trust or
confidence, or inequality of condition, a duty may exist.” Id. But

9. Hussein contends that the district court failed to address his
fraud claim, but in opposing UBS Bank’s motion, Hussein
asserted that UBS Bank breached a limited fiduciary duty to
disclose under Davencourt at Pilgrims Landing Homeowners Ass’n
v. Davencourt at Pilgrims Landing, LC, 2009 UT 65, 221 P.3d 234.
The district court determined that UBS Bank did not owe a
limited fiduciary duty under Davencourt, and furthermore, it
concluded that the Loan Agreements “clearly disclose” the
parties’ potentially adverse relationship. On appeal, instead of
citing Davencourt, Hussein relies on case law concerning
fraudulent failure to disclose, while asserting basically the same
arguments that were considered and resolved by the district
court.

20170709-CA                    10              2019 UT App 100
                       Hussein v. UBS Bank

such a duty “‘will not be found where the parties deal at arm’s
length, and where the underlying facts are reasonably within the
knowledge of both parties. Under such circumstances, the
plaintiff is obliged to take reasonable steps to inform himself,
and to protect his own interests.’” Id. (quoting Sugarhouse Fin. Co.
v. Anderson, 610 P.2d 1369, 1373 (Utah 1980)). “The false
representations or omissions must be knowing or reckless to
constitute fraud.” Id.

¶25 Hussein, an experienced investor who previously worked
as a broker and who has a history of dealing with margin loans,
testified that he personally reviewed and negotiated the Loan
Agreements, which provided, with our emphasis, that “UBS
Bank USA and its affiliates will act as creditors and, accordingly,
their interests may be inconsistent with, and potentially adverse to,
[Hussein’s] interests.” UBS Bank was given the right to liquidate
“without demand,” “in its sole and absolute discretion,” “any
part of the Collateral” when UBS Bank “deems itself or its
security interest in the Collateral insecure.” And it could sell
“[a]ny Collateral that may decline speedily in value or that
customarily is sold on a recognized exchange or market . . .
without providing any Loan Party with prior notice of the sale.”

¶26 Referring to UBS-FS as a securities intermediary, 10 the
Loan Agreements disclosed that “pursuant to a control
agreement between the Bank and the Securities Intermediary”:

10. Article 8 of the Uniform Commercial Code defines a
securities intermediary as “a person, including a bank or broker,
that in the ordinary course of its business maintains securities
accounts for others and is acting in that capacity.” U.C.C.
§ 8­102(14)(ii) (Unif. Law Comm’n 2017). This provision has been
adopted verbatim in Utah. See Utah Code Ann.
§ 70A­8­101(1)(o)(ii) (LexisNexis Supp. 2017).

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                      Hussein v. UBS Bank

          •   The Securities Intermediary will comply
              with entitlement orders originated by [UBS]
              Bank regarding any Collateral Account
              without further consent from the Borrower
              or any Pledgor.

          •    [T]he Securities Intermediary may comply
              with entitlement orders originated by the
              Borrower . . . on the applicable Collateral
              Account or any Pledgor but only until the
              time that [UBS] Bank notifies the Security
              Intermediary, that [UBS] Bank is asserting
              exclusive control over the Collateral
              Account. After the Securities Intermediary
              has received a notice of exclusive control
              and has had reasonable opportunity to
              comply, it will no longer comply with
              entitlement orders originated by the
              Borrower or any Pledgor concerning the
              Collateral Account.

These provisions granted UBS Bank the same control over a
client’s accounts as the Servicing Agreement, which required
UBS-FS employees to “comply with all instructions given by the
Bank without further consent by any Borrower or Pledgor, and
that the Bank’s instructions shall prevail if any conflict exists
between any Bank instruction and a Borrower or Pledgor
instruction.”

¶27 In reviewing the Loan Agreements, Hussein would have
been aware that a separate agreement existed between UBS Bank
and UBS-FS and that, under the terms of that agreement, if UBS
Bank took control of his accounts, UBS-FS’s interests would
become adverse to his own and UBS-FS would comply with UBS
Bank’s orders over his own. Moreover, the material terms of the
loans indicated that UBS Bank could call for repayment of

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                       Hussein v. UBS Bank

Hussein’s loans at any time and could liquidate his QSI shares,
without notice or demand, if the value of the stock declined.

¶28 Hussein fails to demonstrate the existence of facts
establishing that UBS Bank made false representations to him or
that it failed to disclose material facts to him during the loan
process. 11 The district court therefore properly granted summary
judgment on his fraud claims.

2.     Breach of Fiduciary Duty

¶29 Hussein contends that UBS Bank owed him fiduciary
duties and breached those duties. “Ordinarily, no fiduciary
relationship exists between a bank and its customer.” State Bank
of S. Utah v. Troy Hygro Sys., Inc., 894 P.2d 1270, 1275 (Utah Ct.
App. 1995). See also First Sec. Bank of Utah NA v. Banberry Dev.
Corp., 786 P.2d 1326, 1332 (Utah 1990) (stating that “the relation
of mortgagor and mortgagee is not of a fiduciary character”)
(quotation simplified). Instead, we look to the facts and
circumstances surrounding the relationship of the parties and
the transaction and conclude that a fiduciary or confidential
relationship exists only “when one party, having gained the trust

11. Hussein further asserts that UBS Bank withheld critical
information from him, including the PVF proposal. A
constructive fraud claim requires a party to not only
demonstrate “‘a failure to disclose material facts,’” but also “‘a
confidential relationship between the parties.’” d’Elia v. Rice Dev.,
Inc., 2006 UT App 416, ¶ 51, 147 P.3d 515 (quoting Jensen v. IHC
Hosps., Inc., 944 P.2d 327, 339 (Utah 1997)). “[A] fiduciary
relationship and a confidential relationship are considered one
and the same.” Id. ¶ 55. Because Hussein cannot establish a
fiduciary relationship with UBS Bank—or attribute to UBS Bank
UBS-FS’s actions in regards to the PVF proposal, as explained in
the following section—his constructive fraud claim fails.

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                      Hussein v. UBS Bank

and confidence of another, exercises extraordinary influence
over the other party.” Von Hake v. Thomas, 705 P.2d 766, 769
(Utah 1985). But “mere confidence in one person by another is
not sufficient alone to constitute such a relationship.” Id.
(quotation simplified).

¶30 Hussein has not called our attention to evidence refuting
UBS Bank’s evidence that there was no fiduciary relationship
between them. Hussein’s interactions with UBS Bank were at
arm’s length in 2009 during discussions surrounding the Loan
Agreements. Although no fiduciary relationship existed between
UBS Bank and Hussein, Hussein asserts that, because such a
relationship did exist between him and UBS-FS, fiduciary duties
were owed to him by UBS-FS and its employees. And he
contends that UBS-FS employees were agents of UBS Bank and
that UBS Bank is therefore liable for their actions. “Under agency
law, an agent cannot make its principal responsible for the
agent’s actions unless the agent is acting pursuant to either
actual or apparent authority.” Zions First Nat’l Bank v. Clark
Clinic Corp., 762 P.2d 1090, 1094 (Utah 1988).

a.    Actual Authority

¶31 Hussein contends that the Loan Agreements gave UBS-FS
actual authority to act as UBS Bank’s agent because UBS-FS
“handled all communications with Hussein,” including those
where he sought financial advice. 12

12. Hussein also asserts a broad agency relationship based on the
Loan Agreements designating UBS-FS as the “Bank’s agent.” But
this language is found in the “Acceptance of Application and
Agreement” section of the Loan Agreements and narrowly
grants UBS-FS authority to receive and accept the Loan
Agreements on UBS Bank’s behalf, providing, “This application
                                                    (continued…)

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                       Hussein v. UBS Bank

¶32 Actual authority may either be express or implied.
“Express authority exists whenever the principal directly states
that its agent has the authority to perform a particular act on the
principal’s behalf,” while implied authority “embraces authority
to do those acts which are incidental to, or are necessary, usual,
and proper to accomplish or perform, the main authority
expressly delegated to the agent.” Id. “This authority may be
implied from the words and conduct of the parties and the facts
and circumstances attending the transaction in question.” Id. at
1095.

¶33 But Hussein fails to produce any evidence calling into
question UBS Bank’s showing that UBS-FS had neither express
nor implied authority from UBS Bank to give investment advice
to Hussein on UBS Bank’s behalf. Under the Servicing
Agreement, UBS-FS marketed and serviced loans for UBS Bank,
and, in particular, it could “inform its customers and prospects
regarding the availability of the Loans” and “refer persons
interested in a Loan to the Bank.” This did not include marketing
other financial and investment products, and providing such
additional advice was not “incidental” or “necessary” to
servicing Hussein’s loans where UBS-FS could collect payments
and answer questions about the loans. One UBS Bank employee
testified in his deposition that UBS Bank did not engage in
“investment strategies with the client” or “make financial or
investment proposals to a client.” Hussein has not meaningfully
refuted UBS Bank’s showing that if UBS-FS provided such
advice to Hussein, it was outside the scope of the services it
performed on UBS Bank’s behalf.

(…continued)
and agreement will be received and accepted by Bank in the
State of Utah, or if this application and agreement is delivered to
Bank’s agent, [UBS-FS], it will be received and accepted.”

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                       Hussein v. UBS Bank

b.     Apparent Authority

¶34 Hussein contends that UBS-FS had apparent authority to
give him financial advice on behalf of UBS Bank because UBS
Bank “signaled to Hussein that UBS-FS was its agent in myriad
ways.” He points to the fact that Financial Advisor filled out
personal information on his behalf for the loans, and in the
following years, answered any questions Hussein had about the
loans.

¶35 Apparent authority “can be inferred only from the acts
and conduct of the principal.” City Elec. v. Dean Evans
Chrysler-Plymouth, 672 P.2d 89, 90 (Utah 1983). This type of
authority is “premised upon the corporation’s knowledge of and
acquiescence in the conduct of its agent which has led third
parties to rely upon the agent’s actions.” Id. But the authority is
not merely apparent “because it looks so to the person with
whom he deals.” Id. The principal must have “cause[d] third
parties to believe that the agent [was] clothed with apparent
authority.” Id. “A belief that results solely from the statements or
other conduct of the agent, unsupported by any manifestations
traceable to the principal, does not create apparent authority.”
Burdick v. Horner Townsend & Kent, Inc., 2015 UT 8, ¶ 22, 345 P.3d
531 (quotation simplified).

¶36 Hussein cannot demonstrate on the record before us that
UBS Bank manifested consent to UBS-FS providing financial
advice to Hussein on UBS Bank’s behalf. 13 After the loans were

13. Hussein cites two Utah federal district court cases, arguing
that similar facts in those cases demonstrate that there is
sufficient evidence to show an agency relationship here. But
those cases were before the court on a motion to dismiss where
“all well-pleaded factual allegations . . . are accepted as true and
viewed in the light most favorable to Defendant as the
                                                       (continued…)

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                      Hussein v. UBS Bank

made, UBS Bank communicated to Hussein that he could
“contact [his] Financial Advisor regarding information about
[his] Credit Line or other credit services” and the UBS-FS branch
manager regarding his “Collateral Account.” These
communications would have demonstrated to Hussein only that
UBS-FS employees had limited authority concerning any
questions he had about his loans or his Collateral Account.
Hussein fails to point to any other statements or manifestations
from UBS Bank indicating that UBS-FS had any broader
authority to provide Hussein investment advice on UBS Bank’s
behalf.

¶37 Hussein therefore has not shown the existence of
disputed facts bearing on whether UBS-FS had actual or
apparent authority from UBS Bank to provide investment advice
to Hussein, much less that UBS Bank breached a fiduciary duty
owed to Hussein. Because there are no genuine disputes of
material facts on Hussein’s Advisory Claims, we conclude that
the district court correctly granted summary judgment in favor

(…continued)
nonmoving party.” UBS Bank USA v. Ibby, LLC, No.
2:09­CV­372 TS, 2009 WL 4884383, at *3 (D. Utah Dec. 10, 2009)
(quotation simplified). See also Morales v. UBS Bank USA, No.
2:14-CV-888-JNP-BCW, 2016 WL 3746527, at *2 (D. Utah July 8,
2016). “By the summary judgment stage of litigation, more is
required.” Stevens-Henager College v. Eagle Gate College, 2011 UT
App 37, ¶ 25, 248 P.3d 1025. And “the plaintiff can no longer rest
on such mere allegations as are sufficient at the pleading stage,
but must set forth by affidavit or other evidence specific facts,
which for purposes of the summary judgment motion will be
taken to be true.” Id. (quotation simplified). Accordingly, we
look to the specific facts of this case to determine whether an
agency relationship existed between UBS Bank and UBS-FS.

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                       Hussein v. UBS Bank

of UBS Bank on Hussein’s breach of fiduciary duty, fraud, and
constructive fraud causes of action.

B.     The Liquidation Claims

¶38 Hussein argues that UBS Bank violated contractual and
fiduciary duties when it liquidated 2,276,756 shares of QSI stock
securing his loans, thereby breaching the Loan Agreements and
the CRA. The district court concluded that UBS Bank “acted
pursuant to its clear and indisputable rights under the Loan
Agreements” in liquidating Hussein’s QSI shares.

1.     Breach of the Loan Agreements

¶39 Hussein contends that UBS Bank’s liquidation was neither
“necessary” nor “consistent with normal lending practices,”
thereby breaching the terms of the Loan Agreements.
“Well-accepted rules of contract interpretation require that we
examine the language of a contract to determine meaning and
intent.” Glenn v. Reese, 2009 UT 80, ¶ 10, 225 P.3d 185. If the
contract language 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.” Id.
(quotation simplified). We also “consider each contract provision
in relation to all of the others, with a view toward giving effect to
all and ignoring none.” Id. (quotation simplified). But, generally,
“specific provisions ordinarily will be regarded as qualifying the
meaning of broad general terms in relation to a particular
subject.” Smith v. Smith, 2017 UT App 40, ¶ 16, 392 P.3d 985
(quotation simplified).

¶40 To begin with, the Loan Agreements authorized UBS
Bank to “take any steps necessary to perfect its interest in the
Credit Line, issue a call for additional collateral or force the sale
of the Borrower’s securities if the Borrower’s actions or inactions
call the Borrower’s creditworthiness into question.” Hussein

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                       Hussein v. UBS Bank

cites an email from Financial Advisor to UBS Bank employees, in
which Financial Advisor questioned why UBS Bank was
liquidating Hussein’s shares, stating, “I ask you, is it really
necessary to blow Hussein out of the water without any
consideration of his situation?” Regardless of Financial
Advisor’s expressed concerns, UBS Bank could “take any steps
necessary to . . . force the sale of [Hussein’s] securities,” without
any requirement that the sale be “necessary” in some absolute
sense.

¶41 These same terms, as well as the condition that the steps
taken by UBS Bank in forcing a sale be “consistent with normal
lending practices,” 14 are also found in the general
acknowledgments section of the Loan Agreements. Any conflicts
that these terms have with the other provisions of the Loan
Agreements are resolved in favor of the specific provisions
following them. See id. (stating that “to reconcile [an] apparent
conflict” courts will employ “the concept that general terms and
provisions are restricted by specific terms and provisions
following them” and “the specific provision is treated as an
exception to the general rule”) (quotations simplified). The
specific provisions that followed the general acknowledgments
section specified a number of events where UBS Bank could
liquidate Hussein’s QSI shares, including when “the Bank
otherwise deems itself or its security interest in the Collateral
insecure.” In such events, “the Credit Line Obligations will
become immediately due and payable (without demand).”

14. Hussein contends that UBS Bank failed to follow “normal
lending practices” because it did not follow its own written
procedures by issuing a margin deficiency notice to Hussein
prior to selling his QSI shares. However, UBS Bank did not
require margin deficiency notices be given to clients and gave
them to clients only as a courtesy.

20170709-CA                     19               2019 UT App 100
                      Hussein v. UBS Bank

¶42 Nevertheless, Hussein argues that “UBS Bank could
not have deemed itself insecure,” declaring that the loans
were “fully secured” because he had assets totaling $85 million.
The Loan Agreements stipulated, however, that UBS Bank
could “deem[] itself or its security interest in the Collateral
insecure.” The focus of these provisions was not on the
insecurity of the loans themselves. Once UBS Bank deemed
itself or its security insecure, “the Credit Line Obligations will
become immediately due and payable (without demand)” and
UBS Bank could “in its sole and absolute discretion, liquidate,
withdraw or sell all or any part of the Collateral.” And “[a]ny
Collateral that may decline speedily in value or that
customarily is sold on a recognized exchange or market” could
“be sold without providing any Loan Party with prior notice of
the sale.”

¶43 Because Hussein’s collateral had declined substantially
in value by July 2012, UBS Bank deemed itself insecure. Financial
Advisor alerted Hussein to this fact, notifying him that “[o]ur
credit department is insisting we first sell [QSI] shares (about
25,000 shares), or bring in cash or additional [c]ollateral that
is not [QSI].” Despite Hussein’s personal ability to cover
the insecurity, the Loan Agreements provided that Hussein’s
loans became “immediately due and payable (without demand)”
and UBS Bank had the right “in its sole and absolute discretion”
to liquidate Hussein’s 2,276,756 QSI shares and apply
the proceeds as repayment. Because the shares “decline[d]
speedily in value” and were sold on a market or exchange,
UBS Bank did not have to give Hussein any notice of the
sale given the terms of the Loan Agreements. Against the
backdrop of these contractual provisions, Hussein has not
provided any evidence establishing that UBS Bank improperly
liquidated his collateralized QSI shares and breached the Loan
Agreements.

20170709-CA                    20              2019 UT App 100
                      Hussein v. UBS Bank

2.    Breach of the CRA

¶44 Hussein contends that by following UBS Bank’s
entitlement orders, UBS-FS breached the CRA when it failed to
send Hussein a margin deficiency notice and that UBS Bank
interfered with fiduciary duties owed by UBS-FS to Hussein.
These are the grounds for his claims of tortious interference with
contract and aiding and abetting breach of a fiduciary duty.

¶45 First, there is no evidence suggesting that the CRA
required UBS-FS to send Hussein a margin deficiency notice. 15
The terms of the CRA stipulated that UBS-FS “may sell securities
in your Account without notifying you” and that UBS-FS had
“the right, at any time and without prior notice, to satisfy a
margin call or to obtain full payment of a margin loan, without a
demand for margin or additional margin.” UBS-FS policies did
permit margin deficiency notices to be given to the customer as a

15. Hussein also claims that UBS Bank and UBS-FS never
notified him of the 50% margin maintenance requirement.
However, Financial Advisor sent Hussein loan disclosure forms
indicating that the Federal Reserve Board required an initial 50%
margin requirement. From all that appears in the record, UBS
Bank and UBS-FS did not adjust this margin requirement after
the loans were issued and Hussein was required to maintain an
ongoing 50% margin maintenance level in his account. But
whether Hussein received this notification is not material to his
Liquidation Claims because UBS Bank liquidated the shares after
deeming itself insecure due to the declining value of the
collateral and not because of Hussein’s failure to maintain his
margin requirement. A separate provision of the Loan
Agreements would have granted UBS Bank the right to liquidate
Hussein’s shares had he not “maintain[ed] sufficient Collateral
in a Collateral Account” or “fail[ed] to maintain collateral as
required.”

20170709-CA                    21              2019 UT App 100
                       Hussein v. UBS Bank

courtesy in some cases. And, as a courtesy, Hussein was notified
prior to the liquidation that his margin account was deficient by
$600,000, but five days passed and he had not taken any action
to cover the shortfall in his margin account by some other
means. Hussein has not shown the existence of disputed facts
that undercut the conclusion that in following UBS Bank’s
entitlement orders, UBS-FS did not breach the CRA because no
margin deficiency notice was required.

¶46 Second, Hussein asserts that UBS Bank caused UBS-FS
employees “to ignore Hussein’s order to sell the PMP
Account[s]” and therefore aided and abetted a breach of a
fiduciary duty by UBS-FS. A party aids and abets the breach of a
fiduciary duty when it “knowingly join[s] a fiduciary in
fraudulent acts, whereby the fiduciary breaches his or her
fiduciary duties,” and is therefore “jointly and severally liable
with that fiduciary.” Russell/Packard Dev., Inc. v. Carson, 2003 UT
App 316, ¶ 33, 78 P.3d 616 (quotations simplified), aff’d, 2005 UT
14, 108 P.3d 741. But “the gravamen of the claim of aiding and
abetting a breach of fiduciary duty is the defendant’s knowing
participation in the fiduciary’s breach.” Mower v. Simpson, 2012
UT App 149, ¶ 37, 278 P.3d 1076 (quotation simplified). In
resisting UBS Bank’s summary judgment motion, Hussein
produced no evidence that UBS Bank aided or abetted UBS-FS in
a breach of a fiduciary duty owed to Hussein.

¶47 Hussein was aware that UBS Bank and UBS-FS’s interests
could become adverse to his own if he failed to maintain
sufficient margin in his account. 16 Financial Advisor sent

16. On Hussein’s constructive fraud claim, he argued that UBS
Bank and UBS-FS never disclosed to him that UBS Bank’s
interests would be put before his own. He contends that UBS-FS
misrepresented to him that his QSI shares would not be sold. But
while UBS-FS indicated that it would possibly give him time to
                                                 (continued…)

20170709-CA                    22               2019 UT App 100
                        Hussein v. UBS Bank

Hussein loan disclosure forms warning that “if the securities in
your margin account decline in value, so does the value of the
collateral supporting your loan and, as a result, [UBS-FS] can
take action, such as . . . selling securities or other assets in any of
your accounts held at [UBS-FS].” And the Loan Agreements
provided that UBS-FS would comply with UBS Bank’s orders
over Hussein’s instructions and that if UBS Bank deemed the
collateral insecure, it could “in its sole and absolute discretion,
liquidate, withdraw or sell all or any part of the Collateral.”
Hussein therefore could not order UBS-FS to liquidate the
collateral in any manner he wished after UBS Bank deemed his
collateralized QSI shares inadequate as security for the loans.
This included his preference that the PMP accounts be liquidated
first, which was a risk that he accepted when he borrowed the
$35.5 million from UBS Bank on the terms he agreed to because
“any and all accounts” with UBS-FS became collateral for the
loans. Because UBS Bank could, “in its sole and absolute
discretion,” liquidate the QSI shares as repayment for the loans
when the value of the stock declined, it did not aid or abet
UBS­FS in a breach of a fiduciary duty to Hussein.

¶48 Because Hussein fails to demonstrate that there are
genuine disputes of material fact remaining on the Liquidation
Claims, the district court did not err in determining that UBS
Bank was entitled to judgment as a matter of law on Hussein’s

(…continued)
either secure cash or additional collateral to cover the shortfall,
Hussein did not produce evidence that UBS Bank gave him such
assurances, and UBS Bank has shown that it was unwilling to
take such a risk in waiting longer to see whether Hussein would
cover the growing margin deficiency in some other way.
Hussein was aware that, in such circumstances, UBS-FS would
have to comply with UBS Bank’s orders, not his.

20170709-CA                      23                2019 UT App 100
                      Hussein v. UBS Bank

breach of contract, tortious interference of contract, and aiding
and abetting breach of fiduciary duty claims.

                        II. Attorney Fees

¶49 Hussein contends that the district court erred in awarding
attorney fees and costs to UBS Bank. “Generally, attorney fees
are awarded only when authorized by contract or by statute.”
Bilanzich v. Lonetti, 2007 UT 26, ¶ 11, 160 P.3d 1041. “When
awarded pursuant to a contract, attorney fees are ‘allowed only
in accordance with the terms of the contract.’” PC Crane Service,
LLC v. McQueen Masonry, Inc., 2012 UT App 61, ¶ 9, 273 P.3d 396
(quoting Turtle Mgmt., Inc. v. Haggis Mgmt., Inc., 645 P.2d 667,
671 (Utah 1982)).

¶50 In this case, the Loan Agreements provided that Hussein
would “indemnify” UBS Bank “against any and all claims,” and
“damages,” including “court costs and reasonable attorney fees,”
“arising out of or in connection with this [a]greement.” The only
exception was for losses “caused by the Bank’s or Securities
Intermediary’s breach of its obligations under this Agreement.”
Because the district court granted summary judgment in favor of
UBS Bank on all of Hussein’s claims, which necessarily arose
“out of or in connection with” the Loan Agreements, the district
court awarded attorney fees and costs to UBS Bank. Because
Hussein failed to produce evidence refuting UBS Bank’s
showing that it did not breach the Loan Agreements, 17 the

17. Hussein argues that a Financial Industry Regulation
Authority (FINRA) arbitration panel found UBS-FS to have
breached the Loan Agreements and that therefore no attorney
fees should be granted. This arbitration decision is irrelevant to
this appeal to which UBS-FS is not a party, see Buckner v.
Kennard, 2004 UT 78, ¶ 11, 99 P.3d 842 (holding that “a private
arbitration award does not have nonmutual collateral estoppel
                                                   (continued…)

20170709-CA                    24              2019 UT App 100
                       Hussein v. UBS Bank

district court did not err in awarding attorney fees and costs to
UBS Bank.

¶51 UBS Bank seeks an award of its attorney fees reasonably
incurred on appeal. “[W]hen a party who received attorney fees
below prevails on appeal, the party is also entitled to fees
reasonably incurred on appeal.” Valcarce v. Fitzgerald, 961 P.2d
305, 319 (Utah 1998) (quotation simplified). Accordingly, we
award UBS Bank its attorney fees reasonably incurred on appeal
and remand to the district court for the calculation of that award.

                         CONCLUSION

¶52 We affirm the district court’s grant of summary judgment
in favor of UBS Bank because Hussein failed to demonstrate the
existence of any genuine dispute of material fact on his six
claims against UBS Bank. We also affirm the award of attorney
fees and costs to UBS Bank and award attorney fees reasonably
incurred on appeal, remanding to the district court for the
limited purpose of calculating that award.

(…continued)
effect unless the parties expressly provide for such preclusive
effect beforehand”), and in any event, the decision contains no
findings of fact or any indication of the basis on which the
arbitration panel made its ruling.

20170709-CA                    25               2019 UT App 100