Fisher, et al, v. Crestar Bank N.A.,

----ooOoo----

Roy P. Fisher, William R. Franklin,
Wesley F. Sine, and Ray D. Emery, individuals,
Plaintiffs and Appellees,

v.

Crestar Bank, N.A.; Diana Group, Inc.;
Nancy Y. Cree; and Josephine Mangiapane,
Defendants and Appellant.

MEMORANDUM DECISION
(Not For Official Publication)

Case No. 20010272-CA

F I L E D
May 2, 2002 2002 UT App 144 -----

Third District, Salt Lake Department
The Honorable David S. Young

Attorneys:
Christopher G. Jessop and James L. Christensen, Salt Lake City, for Appellant
Virginia W. Powell, Richmond, Virginia, Francis M. Wikstrom and H. Douglas Owens, Salt Lake City, for Appellees

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Before Judges Billings, Greenwood, and Thorne.

BILLINGS, Associate Presiding Judge:

On appeal, Appellants Fisher and Franklin (Appellants) raise a number of issues regarding the effect of the Bank's letter to Sine. We only address the one dispositive issue: Did the trial court err in determining that there was no meeting of the minds and hence no enforceable contract between Sine and the Bank?

"The issue of whether a contract exists may present both questions of law and fact, depending on the nature of the claims raised." Cal Wadsworth Constr. v. St. George City, 865 P.2d 1373, 1375 (Utah Ct. App. 1993). "The trial court first finds the facts to which the law will be applied, and then it applies the law to those facts to reach a conclusion of law." Id. In this case, "[n]either party has challenged the trial court's factual findings. Therefore, we will accept the factual determinations and review the trial court's legal conclusions under a correction of error standard." Diston v. Enviropak Med. Prods., Inc., 893 P.2d 1071, 1074 (Utah Ct. App. 1995).

The March 24 letter stated: On behalf of our Client, Diana Group, Inc., we warrant and certify to transfer to you, directly, on a bank-to-bank basis, to your designated account, the sum of $2,500,000.00. Said transfer will be no later than 30 banking days from the date after the deposit of $500,000.00, to Escrow Account Number 206849540, Account Holder - 10321. The trial court concluded that this letter was subject to two reasonable interpretations as argued by the parties: That it was a guaranty by the Bank or an escrow agreement, and thus was ambiguous. See Seare v. University of Utah Sch. of Med., 882 P.2d 673, 677 (Utah Ct. App. 1994) (holding a contract may be ambiguous if the terms expressing the parties' intent may have more than one plausible meaning). Accordingly, the trial court took evidence to determine the parties' intent. See id. ("If a contract is ambiguous, courts may look to extrinsic evidence to clarify the parties' intent."). The trial court, after hearing the testimony, found that "even if Sine unreasonably believed that the March 24 letter was an independent obligation of the Bank, there was no meeting of the minds between Sine and the Bank," as to the meaning of the letter, and therefore concluded that "as such, it is unenforceable."

Based on the uncontested factual findings, it is clear that Sine gave one meaning to the letter, specifically that it was a guaranty by the Bank, and that Mangiapane and the Bank gave it another, that it was an escrow agreement. Because [Appellants] do not challenge the trial court's factual finding[s], we must accept this finding [that the additional testimony showed the parties did not mutually agree on the letter's meaning] as true. Thus, we conclude that no contract existed between these parties because their minds did not meet on essential terms of the contract. C & Y Corp. v. General Biometrics, Inc., 896 P.2d 47, 52-53 (Utah Ct. App. 1995). Therefore, we conclude there was no enforceable contract between Sine and the Bank.

In addition, Appellants argue the trial court erred in denying their motions to amend the pleadings to conform to the evidence. Rule 15(b) of the Utah Rules of Civil Procedure states that "[w]hen issues not raised by the pleading are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings." Utah R. Civ. P. 15(b).

Specifically, Appellants claim the trial court erred in denying the rule 15(b) motion because Appellants put on evidence that showed: (1) Crestar had breached Article 4A of the Uniform Commercial Code ("UCC"); (2) Crestar violated a letter of credit and thus breached Article 5 of the UCC; (3) negligence on the part of Crestar Bank; and (4) breach of fiduciary duty on the party of Crestar Bank. However, Appellants fail to cite to the record regarding when, if ever, evidence concerning these claims was before the trial court. Consequently, we are unable to determine whether these "issues not raised by the pleading [were] tried by express or implied consent of the parties." Utah R. Civ. P. 15(b). Therefore we do not address this issue on appeal.

Finally, Appellants argue the trial court erred when it granted the Bank's Rule 41(b) of the Utah Rules of Civil Procedure motion that dismissed Appellants' alternative contract theory based on the wire transfer. However, Appellants do not challenge the trial court's findings of fact regarding the wire transfer, including: Sine's understanding that the March 24 letter was not an independent obligation of the Bank was further demonstrated by his effort to strengthen his position when he wired the $500,000 to Diana Group's account. He attempted to make the wire transfer a conditional transfer by asking the Bank of Utah to transmit [certain] language as a part of the wire communication . . . .

The language requested by Sine was transmitted by the Bank of Utah by abbreviating it and placing it in information fields entitled "bank-to-bank information" and "originator-to-beneficiary information." The information was received by Crestar Bank in an unintelligible form.

There was no evidence of any banking rule or practice that would create an obligation on Crestar Bank's part to read or respond to informational comments sent with wire transfers. Indeed, the regulations governing the Fedwire system operated by the Federal Reserve Board are clear that such instructions have no impact on a wire transfer sent by means of that system. Because Appellants do not challenge the findings that the instructions were unintelligible when received by the Bank and that there was no evidence of any practice in the banking industry to review such instructions, we affirm the ruling of the trial court.
 
 

______________________________
Judith M. Billings,
Associate Presiding Judge -----

WE CONCUR:
 
 

______________________________
Pamela T. Greenwood, Judge
 
 

______________________________
William A. Thorne Jr., Judge