Wirthlin II v. Mameco

Wirthlin II v. Mameco

IN THE UTAH COURT OF APPEALS

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William M. Wirthlin II,

Plaintiff and Appellant,

v.

Mameco International, Inc., an Ohio corporation,

Defendant and Appellee.

MEMORANDUM DECISION
(Not For Official Publication)
 

Case No. 20020977-CA
 

F I L E D
(February 5, 2004)
 

2004 UT App 16

 

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Third District, Salt Lake Department

The Honorable Leon A. Dever

Attorneys: Paul C. Drecksel and Bruce A. Maak, Salt Lake City, for Appellant

Stephen G. Morgan and Jonathan L. Hawkins, Salt Lake City, for Appellee

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Before Judges Bench, Davis, and Jackson.

DAVIS, Judge:

William M. Wirthlin II appeals from a trial court order granting Mameco International, Inc.'s (Mameco) motion to amend its answer, granting summary judgment in favor of Mameco, and dismissing all claims contained in Wirthlin's complaint with prejudice. We affirm in part, and reverse and remand in part.

Wirthlin argues that the trial court erred in granting Mameco's motion to amend its answer. In its motion to amend, Mameco sought to include a new defense in its answer, based upon a statute of limitations in the Utah Uniform Commercial Code (the UCC). See Utah Code Ann. § 70A-2-725 (2001). "The granting or denial of leave to amend a pleading is within the broad discretion of the trial court, and we will not disturb such a ruling absent a showing of an abuse of that discretion." Smith v. Grand Canyon Expeditions Co., 2003 UT 57,¶31, 489 Utah Adv. Rep. 3.

Amendments to pleadings are governed by rule 15 of the Utah Rules of Civil Procedure. Rule 15(a) states, in relevant part, that "a party may amend his pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires." Utah R. Civ. P. 15(a). When we review a trial court's ruling on a motion to amend under rule 15(a), "three factors are relevant: (1) the timeliness of the motion; (2) the moving party's reason for the delay; and (3) the resulting prejudice to the responding party." Mountain Am. Credit Union v. McClellan, 854 P.2d 590, 592 (Utah Ct. App. 1993).

After reviewing the trial court's ruling respecting the first two factors, it is apparent that the trial court believed that Mameco had a valid reason for the delay in filing its motion to amend and that it filed its motion in a timely manner. Notwithstanding, we must consider whether granting the motion to amend "subject[ed] the opposing party to unavoidable prejudice 'by having an issue adjudicated for which he had not had time to prepare.'" Aurora Credit Servs., Inc. v. Liberty West Dev., Inc., 970 P.2d 1273, 1282 (Utah 1998) (citation omitted). Wirthlin does not argue, and the record does not indicate, that he was not provided with adequate time to prepare for either Mameco's motion to amend or its defense based upon a statute of limitations in the UCC. See Utah Code Ann. § 70A-2-725.

Based upon the foregoing, the liberal standard for granting motions to amend under rule 15(a), and the broad discretion given to trial courts in ruling on motions to amend, we cannot say that the trial court exceeded its discretion in granting Mameco's motion to amend. Therefore, we affirm the trial court's grant of Mameco's motion to amend its answer.

Wirthlin also argues that the trial court erred by concluding that his claims were governed by the UCC and, therefore, barred by a statute of limitations therein. See Utah Code Ann. § 70A-2-725. The trial court's conclusion on this issue was the basis for its grant of summary judgment in favor of Mameco. "'Summary judgment is proper solely in cases in which no genuine issues of material fact exist and the movant merits judgment as a matter of law. We accord no deference to the trial court's legal conclusions, reviewing them for correctness.'" Spencer v. Pleasant View City, 2003 UT App 379,¶8, 80 P.3d 546 (citation omitted).

The parties disagreed at trial, and disagree on appeal, about whether the UCC is applicable to Wirthlin's claims. In order for the trial court to have properly determined that the UCC was applicable to Wirthlin's claims, it had to resolve certain factual issues about the contract (or contracts) entered into prior to the issuance of the Mameco warranty.(1) However, the record in this case does not contain any such contracts,(2) any evidence indicating the substance of the terms of any such contracts, or any indication that the trial court resolved any factual issues about any such contracts. Accordingly, we are unable to determine if or how the trial court resolved these factual issues. Because resolution of these factual issues will determine the applicable law, we conclude that it was inappropriate for the trial court to grant summary judgment in favor of Mameco. See id.

We reverse and remand for proceedings consistent with this decision.(3)

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James Z. Davis, Judge

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WE CONCUR:

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Russell W. Bench,

Associate Presiding Judge

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Norman H. Jackson, Judge

1. Several factual issues remain unresolved. These include, but are not limited to, the following issues. First, the trial court must determine if there are any written contracts that memorialize the parties' transaction. Second, if so, the trial court must determine the number of contracts involved in the transaction and which of these contracts is at issue in this case. It is unclear from the record whether there was only one contract involving all three entities (Workers' Compensation Fund of Utah (WCF), CDC Restoration and Construction (CDC), and Mameco), or there were multiple contracts between the three entities (e.g., one contract between WCF and CDC, and another contract between CDC and Mameco). The trial court must make this factual determination because, as the assignee of WCF's contractual rights, Wirthlin can base his claims only upon contracts to which WCF was a party. Third, once the trial court identifies the contract (or contracts) at issue, it must determine whether the underlying transaction is (1) exclusively for goods, in which case the UCC would be applicable; (2) exclusively for services, in which case the UCC would not be applicable; or (3) for both goods and services, in which case the trial court would need to further determine whether goods or services predominate in that contract in order to reach a conclusion about whether the UCC is applicable. See Princess Cruises, Inc. v. General Elec. Co., 143 F.3d 828, 832-34 (4th Cir. 1998); Bonebrake v. Cox, 499 F.2d 951, 957-960 (8th Cir. 1974); see also Sonja A. Soehnel, Annotation, Applicability of UCC Article 2 to Mixed Contracts for Sale of Goods and Services, 5 A.L.R. 4th 501 (1981). Finally, after making all of the above determinations, the trial court must determine whether the Mameco warranty is part of the contract (or contracts) at issue or is a separate contract.

2. The absence of any such contracts from the record is not explained in the record or by either party's brief. In addition, when directly questioned about this issue during oral argument, neither party provided an adequate explanation.

3. Wirthlin raises two additional issues in his brief, but the outcome of each is dependent upon the trial court's resolution of the aforementioned factual issues and its conclusion about whether the UCC is applicable to Wirthlin's claims. Accordingly, we do not address these issues.