Insurance Company of the West v. Wallace Investment Limited Partnership et al

Filing 80

MEMORANDUM DECISION-The court hereby AFFIRMS the previous decision entered on August 29, 2013 with the clarification, as noted above, that the Ezell Defendants are not bound by the prior decision. This decision supplements the August 29, 2013 Memorandum Decision with the aboveanalysis. SO ORDERED. Signed by Judge David Sam on 10/17/13. (jmr)

THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF UTAH
CENTRAL DIVISION
* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
INSURANCE COMPANY OF THE WEST,
)
Case No.2:11CV500 DS
Plaintiff,

)

vs.
)
WALLACE INVESTMENT LIMITED
PARTNERSHIP; WILLIAM DEAN
)
WALLACE;DEANNE H. WALLACE;
WILLIAM DEAN WALLACE, AS
)
TRUSTEE OF THE WILLIAM DEAN
WALLACE REVOCABLE TRUST DATED
)
1/28/94; LONE PEAK DEVELOPMENT
PARTNERS, LLC; LEGACY INVESTMENT
GROUP, LLC; BP BUILDERS, INC.;
GLADE BENTON TUCKETT; MARIELLEN )
PYPER TUCKETT; STEVE EZELL;
SHARON EZELL; JARED L. BISHOP; )
and ANDREA BISHOP,
)
Defendants.

MEMORANDUM DECISION

)

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *
Plaintiff INSURANCE COMPANY OF THE WEST (“ICW”) sought partial
summary judgment for breach of contract against Defendants WALLACE
INVESTMENT LIMITED PARTNERSHIP; WILLIAM DEAN WALLACE; DEANNE H.
WALLACE; WILLIAM DEAN WALLACE, AS TRUSTEE OF THE WILLIAM DEAN
WALLACE REVOCABLE
Defendants”);

LONE

TRUST
PEAK

DATED

1/28/94

DEVELOPMENT

(collectively, “Wallace
PARTNERS,

LLC;

LEGACY

INVESTMENT GROUP, LLC; BP BUILDERS, INC.; GLADE BENTON TUCKETT;
MARIELLEN PYPER TUCKETT; STEVE EZELL; SHARON EZELL; JARED L.
BISHOP; and ANDREA BISHOP (collectively, “Lone Peak Defendants”)
pursuant to Rule 56 of the Federal Rules of Civil Procedure. This

court

issued

a

Memorandum

Decision

dated

August

29,

2013

(“Memorandum Decision”) granting plaintiff’s motion for summary
judgment

against

the

Lone

Peak

Defendants.

The

Lone

Peak

defendants have asked the court to reconsider its decision pursuant
to Fed.R.Civ.P 54(b).
As an initial matter, the court indicated in the Memorandum
Decision that it was advised by counsel for plaintiff on August 26,
2013, just days before the court issued the decision, that a
settlement agreement had been reached between plaintiff and the
Wallace

Defendants.

Accordingly,

by

its

own

statement

the

Memorandum Decision addressed plaintiff’s claims against the Lone
Peak Defendants only. Nevertheless, defendants correctly note that
the introductory statement included reference to Steve Ezell, Sharon
Ezell, and EZL Properties, LLC (the “Ezell Defendants”)and ask the
court

for

clarification

regarding

application to the Ezell Defendants.

the

Memorandum

Decision’s

There is no dispute that the

claims against the Ezell Defendants were dismissed without prejudice
by court order dated July 8, 2013.

Thus, the court’s Memorandum

Decision has no application to the Ezell Defendants and the July 8,
2013

order

of

partial

dismissal

without

prejudice

stands.

Hereafter, when the court refers to the Lone Peak Defendants that
designation does not include the Ezell Defendants.
The motion to reconsider also asks the court to clarify or
reinforce that any judgment against the Lone Peak Defendants must

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account for amounts paid by the Wallace Defendants.

The Lone Peak

Defendants correctly cite the principle that a party is not entitled
to recover the same damages multiple times. See FDIC v. United Pac.
Ins. Co., 20 F.3d 1070, 1082-83 (10th Cir. 1994). The court’s
Memorandum Decision expressly states, “Plaintiff is ordered to
provide a detailed account of the losses and expenses it has
incurred in enforcing the Set Aside Agreement and the Indemnity
Agreement to assist the court in calculating the exact amount of
damages.” Memorandum Decision at 7.

The court’s purposes in

requiring this accounting is to ensure that plaintiff ICW will not
recover the same damages multiple times.

Any further clarification

of how the amounts paid by the Wallace Defendants affect the amounts
owed

by

the

Lone

Peak

Defendants

will

be

addressed

in

the

accounting/damages phase.
Next, the court turns to Lone Peak Defendants’ arguments
regarding three asserted legal defenses: contract modification,
estoppel, and waiver.

The court concluded in the Memorandum

Decision that there was no contract modification.
A valid modification of a contract “requires a meeting of
the minds of the parties, which must be spelled out,
either
expressly
or
impliedly,
with
sufficient
definiteness.” Richard Barton Enters. v. Tsern, 928 P.2d
368, 373 (Utah 1996). Lone Peak Defendants have not met
their burden of “proving by clear and convincing evidence
an intent to so modify the agreement,” and their argument
for oral modification fails for indefiniteness. EDO Corp.
v. Beech Aircraft Corp., 911 F.2d 1447, 1454 (10th Cir.
1990).

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Memorandum Decision at 5-6. Lone Peak Defendants have not requested
the court reconsider this conclusion so the court will turn to the
theories of estoppel and waiver.
In the opposition to ICW’s motion for partial summary judgment,
Lone Peak Defendants asserted “promissory estoppel has been
extended, in a limited form, to those cases concerned with the
statute

of

frauds,

where

the

promise

as

to

future

conduct

constitutes the intended abandonment of an existing right of the
promissory.” Fericks v. Lucy Ann Soffe Trust, 2004 UT 85, ¶ 14, 100
P.3d

1200

(citation

omitted).”

Memorandum

in

Opposition

to

Plaintiff’s Motion for Partial Summary Judgment at 14 (“Memo in
Opp.”). The court finds defendants’ estoppel argument fails.
Home Indem. Co. v. Wachter , 115 A.D.2d 590 (N.Y. App. Div. 1985),
is instructive.
argument

that

In that case, the court rejected the indemnitors’
“the

surety

should

be

equitably

estopped

from

enforcing the [indemnity] agreement because the indemnitors were
induced by the surety’s attorney into believing that the surety
would not seek indemnification.” Id. at 591. The trial court’s grant
of summary judgment in favor of the surety was upheld by the
appellate court.
As in Home Indem. Co., Lone Peak Defendants have failed to show
justifiable

reliance

or

substantial

prejudice.

Accepting

the

material facts as presented by the parties, the court cannot find
that

Lone

Peak

Defendants’

reliance

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on

the

alleged

oral

representation by Mr. Styers was justified given the following:
Section 19 of the Indemnity Agreement required modifications to be
in writing, signed by the surety; Mr. Styers said he “could not put
anything in writing” (Hartmann Decl. ¶ 9; Hejny Agreement ¶ 9); and
the only written communication Lone Peak Defendants received from
Mr. Styers advised them, “I am not in a position to release any of
you of your obligations under the GIA and we reserve all rights
therein.” And as further stated by plaintiff in its briefing “[n]or
can defendants show substantial prejudice by citing all the efforts
they made to cooperate with ICW in the investigation and resolution
of Wasatch County’s claims on the Bonds, because they had the duty
to cooperate.”

Reply Memorandum in Support of Plaintiff’s Motion

for Partial Summary Judgment (Responding to Opposition Memorandum
of Lone Peak Defendants)at 9.
In United Park City Mines Co. v. Stichting Mayflower Mt. Fonds,
2006 UT 35, 22, cited by defendants (Opp. Memo p. 16), the court
stated, “Questions of waiver often hinge on the critical third
element of intent. We have explained that the intent to relinquish
a right must be distinct and that fact-finders should ‘look[] at the
totality of the circumstances’ in discerning intent,” citing In re
Flake, 2003 UT 17, 30. A waiver “must be distinctly made, although
it may be express or implied.” Flake, P 29 (citations omitted).
“Waiver of a contractual right occurs when a party to a contract
intentionally acts in a manner inconsistent with its contractual

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rights, and, as a result, prejudice accrues to the opposing party
or parties to the contract.” Id. P 31.
In this case, the totality of the circumstances includes Mr.
Styers’s written advice that “I am not in a position to release any
of you” and the fact that even defendants’ own account of the terms
of the alleged waiver are inconsistent and indefinite, and therefore
not “distinctly made.” Nor did ICW act in a manner inconsistent with
its rights under the Indemnity Agreement. Its rights included
obtaining the cooperation of the indemnitors, including obtaining
financial statements. Indemnity Agreement section 16. Defendants
were not prejudiced by ICW’s actions because all of their actions
fulfilled their duties under the Indemnity Agreement and served
their own interest in limiting their liability.
Finally,

the

Lone

Peak

Defendants

argue

that

the

court

misapprehended ICW’s expenses incurred in connection with the Set
Aside Agreement. Lone Peak Defendants argue that the Indemnity
Agreement only required payment of “all liability for losses and
expenses of whatsoever kind or nature, including attorney fees and
costs, by reason of having executed or procured the execution of
Bonds,” which, they assert, does not include costs incurred by ICW
in enforcing the Set Aside Agreement. Motion to Reconsider at 6. The
court finds the language of the Indemnity Agreement unambiguous when
it states that the bargained-for indemnification included “all
liability for losses and expenses of whatsoever kind or nature,

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including attorney fees and costs, . . . by reason of the failure
of the Principal or Indemnitors to perform or comply with the
covenants and conditions of this Agreement.” Indemnity Agreement at
1. Specifically included as “loss[es] or expense[s] covered by th[e]
indemnity” are “any claim[s], demand[s], suit[s], judgment[s], or
expense[s] arising out of the Bonds, and any such payment or
compromise . . . expedient under all the circumstances. . . .” Id.
The court finds that the attorney fees incurred in enforcing the Set
Aside Agreement are expenses incurred “by reason of the failure of
the Principal or Indemnitors to perform or comply with the covenants
and condition of th[e Indemnity] Agreement.” Furthermore, these were
expenses expedient under all the circumstances. The court did not
misapprehend the liability of the Lone Peak Defendants in connection
with the expenses incurred in enforcing the Set Aside Agreement.

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CONCLUSION
The court hereby AFFIRMS the previous decision entered on
August 29, 2013 with the clarification, as noted above, that the
Ezell Defendants are not bound by the prior decision. This decision
supplements the August 29, 2013 Memorandum Decision with the above
analysis.

SO ORDERED.

DATED this 17th day of October, 2013.

BY THE COURT:

DAVID SAM
SENIOR JUDGE
UNITED STATES DISTRICT COURT

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