Chang v. Solider Summit Dev

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MEMORANDUM DECISION
(Not For Official Publication)

Po-Cheng Chang; Beatrice H. Chang;
and American Estate Management Corp.,
a Utah corporation,

Plaintiffs and Appellants,

v.

Soldier Summit Development, a Utah limited partnership;
American City Corp., a Utah corporation;
International Investment & Development Corp., a Utah corporation;
Ming-Cheng Lin, individually; a nd Hsiun Mei Yen Lin, individually,
Defendants and Appellees.

Case No. 981234-CA

F I L E D
February 4, 1999 1999 UT App 027 -----

Third District, Salt Lake Department
The Honorable Glenn Iwasaki

Attorneys:
R. Brent Stephens, Ryan E. Tibbitts, and Brian P. Miller, Salt Lake City, for Appellants
David M. Wahlquist and Merrill F. Nelson, Salt Lake City, for Appellees

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Before Judges Wilkins, Davis, and Jackson.

JACKSON, Judge:

Appellants (the Changs) appeal the trial court's grant of summary judgment to appellees (the Lins), arguing that material issues of fact preclude summary judgment. We affirm. Summary judgment is appropriate only when no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. The facts and inferences to be drawn therefrom are viewed in the light most favorable to the losing party and are affirmed . . . where . . . even according to the facts as contended by the losing party, the moving party is entitled to judgment as a matter of law. . . . Since summary judgment is granted as a matter of law rather than fact, the trial court's legal conclusions are reviewed for correctness. Hunt v. ESI Eng'g, Inc., 808 P.2d 1137, 1139 (Utah Ct. App. 1991) (citations omitted).

In granting the Lins' motion for summary judgment on the Changs' second and seventh claims (for breach of fiduciary duty and of the Soldier Summit partnership agreement), the trial court concluded that "[i]n light of the [partnership] agreement's broad language . . . [the Changs'] allegations are not sufficient to raise an issue of fact" on the issue of whether the Lins' actions constituted "willful misconduct" and thereby breached the partnership agreement. The Changs contend the Lins' "failure to market" the Soldier Summit property amounted to willful misconduct. The Lins counter that the decision to hold the property was within the scope of the partnership's purpose, as expressed in the partnership agreement, 1 and that the decision to hold the property was a legitimate business judgment.

"Willful misconduct is the intentional doing of an act, or intentional failure to do an act, with knowledge that serious injury is a probable result." Brown v. Frandsen, 19 Utah 2d 116, 118, 426 P.2d 1021, 1022 (Utah 1967); see also Atkin Wright & Miles v. Mountain State Tel. and Tel. Co., 709 P.2d 330, 335 (Utah 1985) (stating "[w]illful misconduct goes beyond gross negligence in that a defendant must be aware that his conduct will probably result in injury"); Roylance v. Davies, 18 Utah 2d 395, 398, 424 P.2d 142, 144 (Utah 1967) (noting willful misconduct "'includes a conscious or intentional violation of definite law or rule of conduct with the knowledge of the peril to be apprehended from such act or failure to act'" (quoting Stack v. Kearnes, 118 Utah 237, 243, 221 P.2d 594, 597 (Utah 1950)).

Mindful of these definitions, and viewing the facts in the light most favorable to the Changs, we conclude the trial court correctly determined that the Lins' decision to hold and improve the property rather than market it--a decision which was firmly within the ambit of the partnership's purposes--does not amount to willful misconduct.

Second, in granting the Lins' motion for summary judgment on the Changs' fraud and misrepresentation claim (claim 8), the court concluded that "[e]ven assuming that defendants made misrepresentations . . . plaintiffs have failed to provide sufficient evidence to create a factual question as to whether they sustained any injury in reliance upon the misrepresentations."

To succeed, the Changs must show the following elements by clear and convincing evidence: "(1) a representation; (2) concerning a presently existing fact; (3) which was false; (4) which the representor either (a) knew to be false, or (b) made recklessly, knowing that he had insufficient knowledge upon which to base such representation; (5) for the purpose of inducing the other party to act upon it; (6) that the other party, acting reasonably and in ignorance of its falsity; (7) did in fact rely upon it; (8) and was thereby induced to act; (9) to his injury and damage." Andalex Resources, Inc. v. Myers, 871 P.2d 1041, 1046 (Utah Ct. App. 1994) (quoting Dugan v. Jones, 615 P.2d 1239, 1246 (Utah 1980)).

The evidence is uncontroverted that the only actions the Changs took in reliance on the Lins' statements were that: the Changs did not "worry about the progress of the project;" they did not urge the Lins to progress with the development; and they "assumed that when the market was ready, the property would be marketed." We thus conclude the trial court correctly determined that even assuming the Lins made misrepresentations, the Changs
have not shown a factual dispute as to whether they relied on the Lins' statements to their detriment.

Affirmed.
 
 

______________________________
Norman H. Jackson, Judge -----

I CONCUR:
 
 

______________________________
James Z. Davis, Judge -----

I CONCUR IN THE RESULT:
 
 

______________________________
Michael J. Wilkins,
Presiding Judge

1. The partnership agreement recites that its purposes are to "engage in the business of acquiring, owning, holding, developing, improving, selling, leasing, disposing of and otherwise dealing with" the Soldier Summit property. (Emphasis added.)