Phelps v. Sanders Trust

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Daniel J. Phelps,
Plaintiff, Appellee,
and Cross-appellant,

v.

Jean Smith Sanders Trust,
Defendant, Appellant,
and Cross-appellee.

MEMORANDUM DECISION
(Not For Official Publication)

Case No. 971575-CA

F I L E D
May 13, 1999 1999 UT App 159 -----

Second District, Farmington Department
The Honorable Jon M. Memmott

Attorneys: Craig S. Cook and George B. Handy, Salt Lake City, for Appellant
Douglas M. Durbano and Stanley L. Ballif, Layton, for Appellee

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Before Judges Greenwood, Bench, and Jackson.

GREENWOOD, Associate Presiding Judge:

ACCEPTANCE OF COUNTEROFFER

Both parties agree that at the June 26, 1995, meeting the time for acceptance of plaintiff's offer had lapsed, resulting in Sanders's signature on the contract becoming a counteroffer. See Frandsen v. Gerstner, 26 Utah 2d 180, 185, 487 P.2d 697, 700 (Utah 1971) ("An offeror who receives an acceptance which is too late or which is otherwise defective, cannot at his election regard it as valid. The late or defective acceptance is a counter-offer which must in turn be accepted by the original offeror in order to create a contract."). Therefore, the issue is whether Phelps accepted Sanders's counteroffer by initialing the contract. Whether a contract exists is question of law that we review for correctness. See Hughes & Sons Quintek, 834 P.2d 582, 583 (Utah Ct. App. 1992).

Sanders correctly argues that when the terms of a contract provide for the method of acceptance, acceptance can only be effectuated by compliance with the prescribed method. SeeCrane v. Timberbrook Village, Ltd., 774 P.2d 3, 4 (Utah Ct. App. 1989) ("In making an offer, the offeror may specify the manner in which the offer must be accepted. If the offer is not accepted in the specified manner, mutual assent is lacking and no contract is formed."). In this case, the contract required the parties to the contract to "sign the offer or counter offer where noted to indicate acceptance." (Emphasis added.) The contract also included a signature line at the bottom of the document. Therefore, we must determine whether initialing the contract constituted a signature for purposes of accepting the counteroffer.

In Jaffe v. Gibbons, 351 S.E.2d 343 (S.C. Ct. App. 1986), the court addressed the question of whether initialing a contract for the sale of real estate was tantamount to an acceptance of a counteroffer when the contract required a signature for acceptance. See id. at 346. In holding that there was a meeting of the minds such that a valid contract was formed, the court noted that generally when two parties to a transaction both sign a document, that document becomes a valid, enforceable contract. See id. at 345. Under circumstances similar to this case, the court held that "[w]hen [the buyer] initialed the [changes to the contract], he accepted the counter offer, thereby creating a binding contract." Id. at 346. Furthermore, the court held that although the buyer "only initialed and did not sign his full name to the deletions; the initials, in our opinion, amount to both a signing and an acceptance by Jaffe of the counter offer." Id.; see also 17A Am. Jur. 2d Contracts § 188 (1991) (initialing a contract is as effective in binding a party thereto as a full signature.)

In this case, the trial court found, and neither party disputes, that each party understood the terms of the contract and intended to enter into a binding contract. Therefore, we conclude that Phelps's signature via his initials on the contract constituted a valid acceptance of Sanders's counteroffer.(1)

STATUTE OF FRAUDS

Utah's statute of frauds provides that all interests in real property "shall be created, granted, assigned, surrendered or declared otherwise than by act or operation of law, or by deed or conveyance in writing subscribed by the party creating, granting, assigning, surrendering or declaring the same." Utah Code Ann.

§ 25-5-1 (1998); see also Commercial Union Assocs. v. Clayton, 863 P.2d 29, 33 (Utah Ct. App. 1993) ("'a document to be enforceable under the statute of frauds must be subscribed by the party granting the conveyance'" (emphasis added)(quoting Williams v. Singleton, 723 P.2d 421, 424 (Utah 1986))), petition for cert. filed, 231 Utah Adv. Rep. 24 (Utah 1994).

The contract at issue is clearly a sufficient writing memorializing the parties' intent to convey real property. Furthermore, the contract is signed by Sanders--the party conveying the land and the party against whom enforcement is sought; therefore, the contract in this case satisfies the statute of frauds.

ATTORNEY FEES

Phelps argues the trial court erred in refusing to award him attorney fees and costs as the prevailing party under the contract. However, Phelps did not raise the issue of attorney fees under the contract either in his complaint or motion for summary judgment and thus waived his right to attorney fees below. See Lee v. Barnes, 367 Utah Adv. Rep. 40, 41 (Utah Ct. App. 1999) (holding party waived right to attorney fees because "attorney fees were never mentioned at oral argument" and party failed "to properly address the issue to the trial court"). Nevertheless, Phelps is entitled to reasonable attorney fees incurred on appeal, and we remand to the trial court for a determination and award of these fees.

Finally, Phelps argues that he should be awarded attorney fees under section 78-27-56 of the Utah Code because Sanders's defense was in bad faith. See Utah Code Ann. § 78-27-56 (1996 & Supp. 1998). We disagree. Trial courts are accorded broad discretion in awarding attorney fees based on an opposing party's bad faith. See Valcare v. Fitzgerald, 961 P.2d 305, 316 (Utah 1997). Because Sanders has failed to show the trial court abused its discretion in refusing to award attorney fees to Phelps under section 78-27-56, we affirm the trial court's denial of attorney fees on this basis.

Affirmed and remanded.
 
 

______________________________
Pamela T. Greenwood,
Associate Presiding Judge

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WE CONCUR:
 
 

______________________________
Russell W. Bench, Judge
 
 

______________________________
Norman H. Jackson, Judge

1. We find no merit in Sanders's argument that Phelps's signature was not placed in the correct location and thus rendered the contract invalid. See PIO v. John B. Gilliland Constr., Inc. 560 P.2d 247, 250 (Ore. 1976) (holding signature placed anywhere on a contract is sufficient to authenticate it).