Richmond v. Weston

Richmond v. Weston

IN THE UTAH COURT OF APPEALS

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Blaine Richmond, et al.,

Plaintiffs and Appellees,

v.

Wayne Weston, et al.,

Defendants and Appellants.

______________________________

May Corporation,

Third-party Plaintiff,

v.

Blaine Richmond,

Third-party Defendant.

MEMORANDUM DECISION
(Not For Official Publication)
 

Case No. 20020799-CA
 

F I L E D
(March 11, 2004)
 

2004 UT App 58

 

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Fourth District, Provo Department

The Honorable Gary D. Stott

Attorneys: Tony Rippa, Provo, for Appellants

Michael K. Black, Provo, for Appellees

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Before Judges Billings, Greenwood, and Jackson.

JACKSON, Judge:

We affirm the district court's rulings.

I. JURISDICTION

A notice of appeal "shall be filed with the clerk of the trial court within 30 days after the date of entry of the [final] judgment or order appealed from." Utah R. App. P. 4(a). Where the notice of appeal is filed after a district court's announcement of a decision, but before entry of that decision, the notice of appeal becomes effective upon the date of entry of the final order. See Utah R. App. P. 4(c).

Here, the district court announced a decision that disposed of all parties, claims and issues in its Memorandum Decision dated September 11, 2000.(1) However, the Memorandum Decision was not itself the final judgment in the case because it directed Richmond's counsel to prepare an order consistent with the terms of the Memorandum Decision. See Swenson Assocs. Architects, P.C. v. State, 889 P.2d 415, 417 (Utah 1994). An order consistent with the terms of the Memorandum Decision was not entered until September 30, 2002. That order became the final, appealable order in this case pursuant to Utah Rule of Appellate Procedure 4(c), which provides that "a notice of appeal filed after the announcement of a decision, judgment or order but before the entry of the judgment or order of the trial court shall be treated as filed after such entry and on the day thereof." Thus, the Westons' Notice of Appeal filed on September 13, 2002 "shall be treated as filed after" the September 30, 2002 order. Accordingly, the Westons' Notice of Appeal was timely, and we have jurisdiction to consider this appeal.

II. REASONABLE RELIANCE ON MISREPRESENTATION

The district court determined as a matter of law that the Westons did not reasonably rely on Richmond's representation that all bills had been paid. Assuming for purposes of summary judgment that Richmond had in fact made such a representation, the Westons nevertheless presented no evidence, nor even an assertion, that they made any attempt to verify whether or not the bills had been paid. Instead, the Westons rely solely on their argument that no such efforts are required under Utah law because it is not necessary to show reasonable reliance in cases of intentional, rather than negligent, misrepresentation. Contrary to the Westons' assertions, however, Utah law requires reasonable reliance in cases of intentional or fraudulent misrepresentation. See Gold Standard, Inc. v. Getty Oil Co., 915 P.2d 1060, 1066-67 (Utah 1996) (stating party must act reasonably in reliance on fraud in order to bring claim); Dugan v. Jones, 615 P.2d 1239, 1246 (Utah 1980) (stating party must act reasonably in reliance on fraudulent misrepresentation). Further, the district court may rule as a matter of law on the reasonableness of a party's reliance in some circumstances: "Assuming the facts to be as defendants have testified, we cannot see how a reasonable [person] could have exercised full reliance on the oral representations." Rubey v. Wood, 13 Utah 2d 285, 373 P.2d 386, 387 (1962); see also Gold Standard, Inc., 915 P.2d at 1067 ("Even if [Defendant] orally made the alleged fraudulent promise . . . it is clear that [Plaintiff] could not reasonably rely on that promise . . . ." (Emphasis added.)).

Weston cites Conder v. A.L. Williams & Associates, 739 P.2d 634, 638 (Utah Ct. App. 1987), for the proposition that, even where reasonable reliance is required, one may reasonably rely on all affirmative assertions without further investigation. Although Conder does propose this as a general proposition, however, it goes on to say that "where, under the circumstances, the facts should make it apparent to one of [the relying party's] knowledge and intelligence . . . that he is being deceived . . . [he] is required to make his own investigation." Id. (emphasis added).

The very nature of the representation itself, that all bills had been paid, seems almost preposterous on its face, given the ongoing nature of this business. A businessperson intimately engaged for ten years, as was Weston, in the day-to-day management of a business should be aware that bills are rarely, if ever, all paid at the same time. Rather, businesses typically involve an ongoing cycle of accrued liabilities and outlays, the twain seldom meeting. Thus, it would be absurd to believe that on the day of the representation there were no outstanding liabilities. Given Weston's intimate familiarity with the business and its normal cycle of bills and payments, he should have been on his guard the very instant such a suspicious representation was made.

Further, the adversary nature of the sale transaction and outside creditors' threats of freezing May Corporation's credit should have raised doubts in Weston's mind regarding the veracity of Richmond's representations. The district court therefore correctly concluded that the Westons' reliance was unreasonable because they could not, as a matter of law, accept Richmond's assertions without further investigation.

III. THE MEMORANDUM OF UNDERSTANDING

The Westons argue the district court erred in concluding the Memorandum of Understanding was not subject to a condition precedent, and therefore was enforceable. It is true that before applying the parol evidence rule to bar extrinsic evidence that would contradict or alter the terms of a written agreement, a court may receive any relevant extrinsic evidence that the writing was not intended by the parties to be an agreement at all. See Hall v. Process Instruments & Control, Inc., 890 P.2d 1024, 1026-27 (Utah 1995).

The Westons argue first that the parties did not intend the Memorandum of Understanding to be the final embodiment of their agreement, but rather intended it to be followed up with "more complete documentation." However, they made no offer of proof below regarding what the "more complete documentation" would include, nor what terms such documentation would include. Thus, the Westons presented nothing upon which the district court could infer that the parties did not intend the Memorandum of Understanding to be the parties' final embodiment of their agreement.

The Westons next argue that the parties intended the Memorandum of Understanding to be subject to a condition precedent, namely that the contract would not become enforceable unless and until "the bills had been paid." The district court determined that the contract was subject to no such condition precedent, determining the Westons had presented no proof of such a mutual intention. The Westons now make three claims as evidence that a condition precedent existed: that the Memorandum of Understanding was executed rapidly in order to ensure the effective management of the corporation and avoid dissolution; that the meeting in which the Memorandum of Understanding was executed was a lengthy one involving many offers and counter-offers and the review of various documents and letters; and that the memorandum was an "executory agreement." Even assuming the truth all of these claims, we see nothing that would indicate both sides to the agreement intended the Memorandum of Understanding to be subject to such a condition before it would become enforceable as a contract.(2) Thus, the district court correctly concluded as a matter of law that "payment of the bills" was not a condition precedent to the contract.

IV. APPLICABILITY OF UTAH CODE ANN. § 59-12-112 (2000)

The trial court concluded that Utah Code Annotated section 59-12-112 (2000) does not apply to this sale because the "business" was not sold. The statute, entitled "Tax a lien when selling business--Liability of purchaser," provides in part: "The tax imposed by this chapter shall be a lien upon the property of any person who sells out his business or stock of goods or quits business." Id. (emphasis added). Richmond did not sell a business or its stock of goods, nor did he quit business. Richmond never owned a business that he could, as an individual, sell or quit. Rather, the corporation owned and continued to operate "the business," subject only to a partial change of corporate ownership. Accordingly, the district court correctly concluded that section 59-12-112 does not apply to the transaction at issue here.(3)

V. CONCLUSION

Because the Westons filed a notice of appeal after announcement of the final ruling but before its entry, the notice of appeal is timely and we have jurisdiction to hear the Weston's appeal. We affirm all of the district court's rulings. Richmond is entitled by contract to reasonable costs and fees incurred on appeal. Accordingly, we remand for the district court to determine the amount.

______________________________

Norman H. Jackson, Judge

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I CONCUR:

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Judith M. Billings,

Presiding Judge

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I CONCUR IN THE RESULT:

______________________________

Pamela T. Greenwood, Judge

1. Richmond argues the January 11, 2000 order was the final, appealable order in the case. However, when the district court entered the January 11, 2000 order denying Weston's motion for relief from judgment, the third-party claim of May Corporation against Richmond was still pending. In that order, the district court did not make an express finding that there was no just reason for delaying Weston's appeal until the third-party claim was decided. Because Utah Rule of Civil Procedure 54 requires such an express determination before an appeal may be made by one party in a multi-party lawsuit, there was no final order from which Weston could appeal. Thus, no final order was entered at that time from which Weston could appeal until the third-party claim was disposed of in the district court's September 30, 2002 order.

2. The Westons have attempted to characterize attorney John Valentine's letter as evidence that the parties intended the contract to be subject to a condition precedent. That letter, however, does nothing more than aver that the Memorandum of Understanding was not a complete integration, that the parties intended to draft further documents memorializing their agreement, and that the contract was "executory in nature." For purposes of summary judgment, however, no reasonable finder of fact could infer from these averments that the parties mutually agreed to a condition precedent to the existence of a contract.

3. Further, Utah Code Annotated section 59-12-112 (2000) does not apply to private actions sounding in contract because it simply imposes a lien, in favor of the State of Utah, against the proceeds of the sale of a business; it does not assign rights and liabilities of parties to such a sale as against each other. Further, even if section 59-12-112 did provide parties to the sale of a business with rights against each other, nothing in the language of the statute indicates that such rights and liabilities cannot be reapportioned by contract. This statute does nothing more than designate who shall be liable to the State for the payment of taxes. Thus, nothing in the plain language of section 59-12-112 indicates it is intended to supplant or supplement the terms to a contract or to provide remedies for its breach.