Andersen v. Department of Corrections , 347 P.3d 21 ( 2015 )

2015 UT App 63_________________________________________________________
THE UTAH COURT OF APPEALS
NEIL ANDERSEN, ET AL.,1
Plaintiffs and Appellants,
v.
DEPARTMENT OF CORRECTIONS,
Defendant and Appellee.
Memorandum Decision
No. 20131135-CA
Filed March 19, 2015
Third District Court, Salt Lake Department
The Honorable L.A. Dever
No. 120904405
Lauren I. Scholnick and Matt W. Harrison,
Attorneys for Appellants
Sean D. Reyes and Peggy E. Stone,
Attorneys for Appellee
JUDGE JAMES Z. DAVIS authored this Memorandum Decision, in
which JUDGES GREGORY K. ORME and MICHELE M. CHRISTIANSEN
concurred.
DAVIS, Judge:
¶1 Plaintiffs appeal the district court’s ruling granting summary
judgment in favor of the Utah Department of Corrections (UDOC)
on Plaintiffs’ breach of contract claims. We affirm.
¶2 Plaintiffs are current and former transportation-unit
correctional officers. In 1996, UDOC entered into an agreement
1. The parties on appeal are not limited to those listed but also
include other parties whose names appear on the notice of appeal
or who have otherwise entered appearances in this court.
Andersen v. Department of Corrections
with correctional officers who worked or anticipated working in
the transportation unit. The agreement established a pay incentive
amounting to a three-step pay-grade increase for transportation
officers. This agreement was modified in 2000 following a dispute
between UDOC and the transportation officers. The original
agreement provided that an officer who left the transportation unit
would lose the pay-grade steps the officer had gained by joining,
but the modified agreement provided that officers who served in
the transportation unit for at least three years would “not lose any
steps” and would “maintain[] minimally their current rate of pay.”
Officers who joined the transportation unit after the agreement was
modified signed a memorandum of understanding reflecting the
terms of the modified agreement.2
¶3 In 2007, UDOC’s new executive director discontinued the
practice of providing pay incentives to officers joining the
transportation unit, and officers joining the transportation unit
after the incentives were discontinued did not sign the modified
agreement.3 In 2008, UDOC shifted all employees into a “straight-
line career ladder pay scale.” In response, Plaintiffs filed a
complaint against UDOC, claiming that the modified agreement
provides for them to maintain a three-step pay-grade differential
above other UDOC employees in perpetuity after three years in the
transportation unit and that UDOC breached the modified
2. Although the memorandum of understanding signed by officers
who joined the transportation unit after 2000 contained slightly
different language than the modified agreement, the differences are
not relevant to our analysis. Therefore, for simplicity, we refer to
all of these agreements collectively as “the modified agreement.”
3. Some of the plaintiffs in this case are officers who joined the
transportation unit around the same time the incentive program
was discontinued. The parties dispute whether these individuals
are parties to the modified agreement, but in light of its grant of
summary judgment to UDOC, the district court did not resolve that
dispute. The issue is therefore not before us on appeal.
20131135-CA 2 2015 UT App 63Andersen v. Department of Corrections
agreement by shifting transportation officers who had signed the
modified agreement into the new pay scheme.4
¶4 UDOC moved for summary judgment on Plaintiffs’ claims,
arguing that the modified agreement unambiguously establishes
only that transportation officers who have reached the three-year
mark cannot lose their three-step raise, not that they are entitled to
maintain a three-step differential in perpetuity. Plaintiffs
responded that the language in the modified agreement pertaining
to raises and promotions makes the contract ambiguous as to
whether the three-step differential must be permanently
maintained. The district court examined the contract and
determined that “[t]here is no language in the contract that
supports the interpretation offered by Plaintiffs.” Accordingly, the
district court granted UDOC’s motion for summary judgment.
¶5 On appeal, Plaintiffs assert that the modified agreement is
ambiguous and that the district court therefore erred in granting
summary judgment to UDOC. “[A] motion for summary judgment
may not be granted if a legal conclusion is reached that an
ambiguity exists in the contract and there is a factual issue as to
what the parties intended.” WebBank v. American Gen. Annuity Serv.
Corp., 2002 UT 88, ¶ 22, 54 P.3d 1139 (alteration in original) (citation
and internal quotation marks omitted). We “review[] a summary
judgment for correctness, giving no deference to the trial court’s
decision.” Bahr v. Imus, 2011 UT 19, ¶ 15, 250 P.3d 56.
¶6 A contract “is ambiguous if it is capable of more than one
reasonable interpretation because of uncertain meanings of terms,
missing terms, or other facial deficiencies.” Daines v. Vincent, 2008
UT 51, ¶ 25, 190 P.3d 1269 (citation and internal quotation marks
omitted). Plaintiffs argue that the modified agreement is
ambiguous because its provisions regarding salary, raises, and
promotions can reasonably be interpreted as providing for a
4. Plaintiffs’ salaries were not reduced under the new pay scheme,
but they assert that the new pay scheme will have the effect of
diluting their three-step pay-grade differential over time.
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perpetual three-step pay-grade differential between transportation
officers and non-transportation officers.
¶7 Plaintiffs point to three particular provisions in the modified
agreement that they contend make the agreement ambiguous. First,
they examine the provision indicating that “salary increases to
Transportation Unit members will minimally be benchmarked to
Correctional Officers in the Division of Institutional Operations.”
Plaintiffs interpret this provision as requiring “that when [non-
transportation] officers receive a pay raise, former or current
[transportation] Officers also receive the equivalent pay raise. This
interpretation . . . would effectuate a constant pay differential
whereby [current and former transportation] Officers would
remain above [non-transportation] officers.” They next look to the
provision indicating that an officer leaving the transportation unit
“will not lose any steps, but will be able to transfer into a position
that is the same as or closest to their current salary range that does
not constitute a promotion, and maintains minimally their current
rate of pay.” Plaintiffs interpret this provision as meaning “that the
officer who received a three step increase when joining the
[transportation] unit and then received all increases given [non-
transportation] officers for at least the three years in [the
transportation unit] . . . will come back into the ranks with a three
step advantage on any [non-transportation] officer.” Finally,
Plaintiffs point to the provision indicating that a transportation
officer who “receives a promotion . . . will receive the same salary
increase consideration that other officers receive when they are
promoted.” They interpret this provision as requiring that even
though a transportation officer may already be earning the typical
salary of a promoted position, that officer should “receive the same
percentage increase or same dollar increase that [a] promoted [non-
transportation] officer [would] receive[],” which would, again,
have the effect of keeping that officer three steps above non-
transportation officers who followed a comparable career track.
¶8 We do not disagree with Plaintiffs that some language in the
modified agreement may be ambiguous as to how transportation
officers’ pay raises and promotions are to be handled as compared
20131135-CA 4 2015 UT App 63Andersen v. Department of Corrections
to those of non-transportation officers. However, the action taken
by UDOC that triggered the Plaintiffs’ claims was the
implementation of a new pay scheme applicable to all UDOC
employees. Plaintiffs do not contend that the new pay scheme
prevents transportation officers from receiving salary increases that
are equivalent to those received by non-transportation officers,
reduces transportation officers’ salaries when they leave the
transportation unit, or precludes promoted transportation officers
from receiving raises on par with those of other promoted officers.5
Thus, we fail to see how the ambiguities pointed out by Plaintiffs
could support a determination that UDOC breached the modified
agreement by implementing the new pay scheme. See Utah R. Civ.
P. 56(c) (providing that summary judgment is appropriate when
“the pleadings, depositions, answers to interrogatories, and
5. There is very little in the record explaining the new pay scheme.
Neither Plaintiffs’ complaint nor their briefs on appeal explain how
the new pay scheme is expected to affect Plaintiffs’ ability to
maintain a three-step pay-grade differential. At the hearing on the
motion for summary judgment, Plaintiffs’ counsel suggested that
the new pay scheme puts a cap on an officer’s ability to obtain
raises once the officer reaches a certain pay level. According to
Plaintiffs’ counsel, if this scheme is applied to transportation
officers, then the three-step differential of a transportation officer
who reaches the highest pay level will eventually be diluted as
other non-transportation officers receive salary increases. At oral
argument on appeal, UDOC explained that the new pay scheme
establishes minimum salaries based on years of service that would
result in salary increases for officers who were earning below the
minimum when they reached certain years-of-service milestones.
Since transportation officers are more likely to be above the
minimum when they reach these milestones, their three-step
differential may be diluted as other officers making below the
minimum receive years-of-service increases. However, the new pay
scheme does not reduce Plaintiffs’ salaries, and Plaintiffs have
pointed to nothing to suggest that the new pay scheme would
preclude them from obtaining raises and promotions based on the
same standards as all other correctional officers.
20131135-CA 5 2015 UT App 63Andersen v. Department of Corrections
admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of law”).
¶9 Plaintiffs also rely on extrinsic evidence to support their
argument that the modified agreement was ambiguous.6 Although
district courts are required to “review relevant and credible
extrinsic evidence offered to demonstrate that there is in fact an
ambiguity,” Daines, 2008 UT 51, ¶ 31, “a finding of ambiguity after
a review of relevant, extrinsic evidence is appropriate only when
reasonably supported by the language of the contract,” Watkins v.
Henry Day Ford, 2013 UT 49, ¶ 28 n.2, 304 P.3d 841 (citation and
internal quotation marks omitted). See id. (“The introduction of any
relevant evidence does not . . . allow a litigant to create ambiguity
out of whole cloth or to advocate for an interpretation that is in no
way supported by the language of the underlying contract.”
(emphasis, citation, and internal quotation marks omitted)); Daines,
2008 UT 51, ¶ 31 (“[T]here can be no ambiguity where evidence is
offered in an attempt to obscure otherwise plain contractual
terms.”). Plaintiffs’ interpretation of the modified agreement is not
“plausible and reasonable in light of the language used.” See
Daines, 2008 UT 51, ¶ 31 (citation and internal quotation marks
omitted). The language of the modified agreement provides for
transportation officers to be treated the same as other officers for
purposes of promotions and raises. A promise to maintain the
transportation officers’ three-step pay-grade differential in
6. Specifically, they point to the affidavit of UDOC’s former
executive director, in which he averred that the modified
agreement intended for transportation officers to “always be paid
at a higher rate than officers who had never worked in [the
transportation unit]”; the declarations of transportation officers
claiming that UDOC informed them when they signed the
modified agreement that their pay would always be three steps
higher than officers who had not worked in the transportation unit;
and the history of the dispute between the transportation officers
and UDOC, which led to the adoption of the modified agreement.
20131135-CA 6 2015 UT App 63Andersen v. Department of Corrections
perpetuity cannot reasonably be construed from this language,
except to the extent the pay-grade differential naturally persists as
a result of transportation officers receiving raises and promotions
at the same rate as other officers.7 It cannot reasonably be read to
exempt transportation officers from changes to UDOC’s pay
scheme that apply to all UDOC employees. Thus, Plaintiffs’
interpretation is not reasonably supported by the language of the
contract. See Watkins, 2013 UT 49, ¶ 28 n.2.
¶10 Because the language of the modified agreement is not
reasonably subject to the interpretation advocated by Plaintiffs, we
agree with the district court that it is unambiguous as to whether
Plaintiffs are entitled to retain their three-step pay-grade
differential in perpetuity. Accordingly, we affirm the district
court’s grant of summary judgment in favor of UDOC.
7. As UDOC observed at the hearing on its motion for summary
judgment, “[i]n a perfect world . . . , if [a transportation officer]
walked lockstep with another officer for [his or her] entire career,”
the transportation officer could conceivably maintain a three-step
pay-grade differential under the terms of the modified agreement.
20131135-CA 7 2015 UT App 63