Southwest Com. v. Paria Grp

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Southwest Communications, Inc.,
Plaintiff and Appellee,

v.

Paria Group and Stephen Zimmerman,
Defendants and Appellants.

MEMORANDUM DECISION
(Not For Official Publication)

Case No. 990093-CA

F I L E D
August 19, 1999
  1999 UT App 243 -----

Fourth District, Provo Department
The Honorable Gary D. Stott

Attorneys:
John G. Mulliner, Provo, for Appellants
Mark S. Swan and Mark E. Medcalf, Midvale, for Appellee

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Before Judges Wilkins, Bench, and Orme.

PER CURIAM:

Appellants appeal the trial court's order granting appellee's motion for summary judgment. We affirm.

Appellants assert that appellee's claim for damages, including late payment penalties, for breach of a line of credit note by appellants is barred by an alleged settlement agreement entered into by the parties subsequent to the breach, and that there is a genuine issue of material fact concerning whether the agreement was made precluding summary judgment. In support of their assertion, appellants rely on the affidavit of their controller, Rowan Schetter, and on an October 21, 1997, letter allegedly sent by appellants to appellee.

A party opposing summary judgment has a duty to "set forth specific facts showing there is a genuine issue for trial." Utah R. Civ. P. 56(e). "'[B]are contentions unsupported by any specification of facts in support thereof raise no material questions of fact as will preclude entry of summary judgment.'" DLB Collection Trust v. Harris, 893 P.2d 593, 597 (Utah Ct. App. 1995) (quoting Massey v. Utah Power & Light, 609 P.2d 937, 938 (1980)). Neither Schetter's affidavit nor the letter set forth sufficient facts to create a genuine issue as to whether there was a meeting of the minds as to the terms of the alleged settlement agreement, which meeting of the minds is essential to contract formation. See Crismon v. Western Co. of North Amer., 742 P.2d 1219, 1221 (Utah Ct. App. 1987) ("'[C]ontractual mutual assent requires assent by all parties to the same thing in the same sense so that their minds meet as to all the terms.'") (quoting Cessna Fin. Corp. v. Meyer, 575 P.2d 1048, 1050 (Utah 1978)). They fail to identify any statements made or actions taken by appellee that would indicate that appellee agreed to modify the note. The affidavit alleges only appellants' unilateral attempt to negotiate more favorable payment terms for themselves without establishing that such attempts were acknowledged or successful. The letter only sets forth appellants' intention to make payments toward an outstanding undisputed debt, without referring to any prior negotiations or meeting of the minds or stating that it is a memorialization of an oral agreement.

Further, the alleged settlement agreement is not supported by consideration. Appellants' agreement to pay what is already due and owing is not consideration for appellee's alleged agreement to forego its rights under the note. See Golden Key Realty, Inc. v. Mantas, 699 P.2d 730, 733 (Utah 1985) ("As a general rule, a creditor who agrees to accept a lesser amount than is due is not bound by his agreement, because of lack of consideration.").

Appellants also assert that the trial court erred in granting appellee late payment penalties under the terms of the note, arguing that there is insufficient evidence in the record to support the award where appellee made no showing that the penalty was an enforceable liquidated damages provision under Utah law. Appellants misconstrue the burden of proof on this issue. "[T]he party who would avoid a liquidated damages provision" bears the burden of proving "no damages were suffered or that there is no reasonable relationship between compensatory and liquidated damages." Young Elec. Sign Co. v. United Standard West, Inc., 755 P.2d 162, 164 (Utah 1988). In opposing the motion for summary judgment, appellants failed to meet this burden. Accordingly, the trial court did not err in granting appellee late payment penalties under the terms of the note.

Under the terms of the note, appellee is entitled to an award of its reasonable attorney fees and costs on appeal incurred as costs of collection. The case is remanded to the trial court for a determination and award of appellee's reasonable attorney fees and costs on appeal.

Affirmed and remanded.
 
 

______________________________
Michael J. Wilkins,
Presiding Judge
 
 

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Russell W. Bench, Judge
 
 

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Gregory K. Orme, Judge