11500 Space Center v. Private Capital Group , 2022 UT App 92 ( 2022 )

2022 UT App 92THE UTAH COURT OF APPEALS
11500 SPACE CENTER LLC, SPACE CENTER BOULEVARD LAND
DEVELOPMENT LP, CULLEN’S LLC, AND BERMUDA DUNES
DEVELOPMENT LP,
Appellants,
v.
PRIVATE CAPITAL GROUP INC. AND PCG CREDIT PARTNERS LLC,
Appellees.
Opinion
No. 20200280-CA
Filed July 29, 2022
Third District Court, Salt Lake Department
The Honorable Kara Pettit
No. 180901188
Andrew G. Deiss and Seth A. Nichamoff,
Attorneys for Appellants
Jeremy C. Reutzel and Jarom R. Jones,
Attorneys for Appellees
JUDGE RYAN D. TENNEY authored this Opinion, in which
JUDGES GREGORY K. ORME and DAVID N. MORTENSEN concurred.
TENNEY, Judge:
¶1 PCG Credit Partners LLC (Lender) entered into a loan
agreement with 11500 Space Center LLC, Space Center Boulevard
Land Development LP, Cullen’s LLC, and Bermuda Dunes
Development LP (collectively, Space Center). Private Capital
Group Inc. (Servicer), an affiliate of Lender, serviced the loan.
¶2 After defaulting on the loan, Space Center sued Lender and
Servicer, alleging several fraud-based claims and a breach of
contract claim. The district court dismissed the fraud-based
claims on the pleadings. After some discovery, it granted
11500 Space Center v. Private Capital
summary judgment against Space Center on the breach of
contract claim. Space Center now appeals both rulings. For the
reasons set forth below, we affirm.
BACKGROUND
The Loan and the Default
¶3 Space Center is a collection of entities that own restaurants,
commercial lots, and townhome lots in Texas. On February 18,
2015, Space Center entered into a loan agreement with Lender, a
hard money lender. Real property located in Texas served as the
“primary collateral for this loan.”1
¶4 In the loan agreement, Lender agreed to loan up to
$11,450,000 to Space Center. The parties further agreed that the
loan would mature on June 18, 2015. And the parties also agreed
that Space Center could, under certain circumstances, extend the
loan.
¶5 The loan agreement detailed three fees “attributable to
[Space Center] in relation to the origination and servicing of the
Loan.” Those fees were (1) a “[s]ervicing fee to [Servicer]” of
$687,000, (2) a “[l]egal document fee to [Servicer]” of $16,000, and
(3) a “[b]roker fee to [BlueCap] Commercial Funding, LLC” of
$114,500.
¶6 The parties further agreed that there would be a “broker-
fee reserve” of $114,500. That reserve would be used “to pay a
1. Although Space Center is a collection of Texas entities, Lender
has a location in Alpine, Utah, and the parties agreed that their
loan agreement would “be governed by and construed in
accordance with the laws of the state of Utah.”
20200280-CA 2 2022 UT App 9211500 Space Center v. Private Capital
portion of the broker fee [u]pon the full payment of the Note and
full satisfaction of all of [Space Center’s] obligations to Lender.”
¶7 The loan agreement also included an “excess proceeds and
funds” clause (Excess Proceeds Clause). In the Excess Proceeds
Clause, the parties agreed that Lender would use “excess
proceeds” to “reduce the principal balance of the [l]oan.” But
funds “identified for a specific purpose” in “any of the Loan
Documents” were explicitly excluded from this clause.
¶8 On the day that the parties entered into the loan agreement,
Space Center signed a settlement statement and a promissory
note. The settlement statement, which was issued by the title
company handling the escrow duties, detailed the fees associated
with the loan and how they were allocated. In particular, the
statement listed the “Servicing Fee (6%) – [Servicer]” of $687,000,
the “Legal Document Fee – [Servicer]” of $16,000, and the “Broker
Fee (1%) – BlueCap Commercial Funding, LLC” of $114,500. By
signing this settlement statement, Space Center authorized the
title company “to make expenditures and disbursements as
shown and approve[d] the same for payment.” In the promissory
note, Space Center agreed that the loan “shall bear interest
starting the date [Lender] first wires the funds into escrow, or the
date indicated above, whichever is earlier.” (Emphasis omitted.)
¶9 Interest began to accrue on February 18, 2015 (the day the
parties signed the loan agreement), and Lender funded the loan
upon closing on February 20, 2015. Per the loan agreement, the
loan matured on June 18, 2015. Both parties agree that on June 18,
2015, Space Center had not repaid the loan principal of
$11,450,000.
¶10 In August 2015, the parties began “negotiations concerning
the fees owed by Space Center and a payoff to release certain
collateral.” In those negotiations, Space Center expressed its
intent to borrow money from another lender to pay off a portion
20200280-CA 3 2022 UT App 9211500 Space Center v. Private Capital
of what it still owed. Servicer, however, voiced concerns over
whether it would still get to hold certain property as collateral.
¶11 Lender ultimately agreed to release certain collateral if
Space Center paid $190,000 “plus per diem interest.” In the payoff
statement detailing the collateral release agreement, Space Center
“acknowledge[d] that the Note remain[ed] in default” and that
Lender had “not waived any right, power or remedy available to
it under the loan documents.” In December 2015, Space Center
paid $198,360 to release the agreed-upon collateral.
Space Center Files Suit
¶12 In March 2018, Space Center filed a complaint against
Lender and Servicer in Utah state court.2 Space Center alleged
eleven claims in this complaint, including multiple fraud-based
claims against both Lender and Servicer, as well as a breach of
contract claim against only Lender.
¶13 With respect to the fraud-based claims, Space Center
argued that under the contract, it was only required to pay fees
that Lender had actually incurred, as opposed to the amounts
listed in the loan agreement. It then alleged that Servicer “falsely
represented to [Space Center’s] and First American Title
Company’s representatives that [Lender] had in fact incurred . . .
servicing fees of $687,000.00 and legal fees of $16,000.00.” Space
Center also alleged that “[Servicer] falsely represented the accrual
of interest and amounts owed by [Space Center] to Lender.”
Relatedly, Space Center asserted that Lender was liable for
Servicer’s conduct “under the law of vicarious liability, including
the doctrine of respondeat superior.”
2. Space Center originally filed suit in Texas, but the case was
dismissed for lack of personal jurisdiction. See 11500 Space Center
LLC v. Private Cap. Group, Inc., 577 S.W.3d 322 (Tex. App. 2019).
20200280-CA 4 2022 UT App 9211500 Space Center v. Private Capital
¶14 As for its breach of contract claim, Space Center alleged
that Lender “materially breached” the loan agreement’s Excess
Proceeds Clause “by receiving excess proceeds and funds and
failing to return” them to Space Center.3
Motion to Dismiss the Fraud-Based Claims
¶15 Lender and Servicer filed a joint motion to dismiss. In their
motion, they argued that Space Center’s claims were “precluded
by the plain terms of the loan agreement” and “barred by the
economic loss doctrine.” (Quotation simplified.) They further
argued that Space Center failed “to allege its fraud-based claims
with the particularity required by rule 9[(c)] of the Utah Rules of
Civil Procedure.” (Quotation simplified.)
¶16 The court heard argument on the motion to dismiss. At that
hearing, Space Center continued to assert its fraud and breach of
contract claims, but it voluntarily dismissed its other claims.
¶17 The court later issued a ruling from the bench. In that
ruling, the court dismissed Space Center’s fraud-based claims for
two reasons. First, the court concluded that those claims were
“barred by the economic loss rule.” Second and alternatively, the
court concluded that those claims were “not pled with sufficient
3. At trial and on appeal, Space Center also argued that it never
received the full proceeds of the loan. According to Space Center,
this violated the “loan reserves” provision of the loan agreement.
In response, Lender and Servicer maintain that the loan was fully
funded but that a certain amount was “net funded.” By “net
funded,” Lender and Servicer apparently mean that they were
entitled to a portion of the loan amount, so they withheld that
amount rather than “sending those funds to escrow” only to
“have them returned in the same transaction.” As we explain
below, however, we decline to address the merits of Space
Center’s argument on this matter, so we need not delve further
into its specifics.
20200280-CA 5 2022 UT App 9211500 Space Center v. Private Capital
particularity.” In the court’s view, the complaint was lacking
because it didn’t plead “with sufficient specificity” “the
individual” who made the alleged misrepresentation (i.e., “the
who”), nor did it identify “the what and the when regarding the
alleged misrepresentation.”4 But the court declined to dismiss the
breach of contract claim because it found that the Excess Proceeds
Clause did not preclude the breach of contract claim “as a matter
of law.” The court later issued a written order memorializing this
decision.5
Partial Summary Judgment on the Breach of Contract Claim
¶18 As noted, Space Center asserted that it was only required
to pay fees that Lender had actually incurred. From this, Space
Center asserted that fee payments that didn’t go toward fees
actually incurred should have been regarded as “excess proceeds”
that Lender should have applied to the loan balance. And from
that, Space Center argued that Lender had breached the Excess
Proceeds Clause by not doing so.
¶19 After the court dismissed Space Center’s fraud-based
claims, Lender moved for summary judgment on Space Center’s
4. The court also gave alternative reasons for dismissing the
individual fraud claims, but those alternative reasons are not
relevant to our resolution of this appeal.
5. Almost eight months after the court dismissed the fraud-based
claims, Space Center filed a motion to reconsider, which the court
denied. In its motion, Space Center argued that newly published
Utah Supreme Court decisions justified reconsideration. But those
cases, and Space Center’s arguments, did not challenge the court’s
determination that Space Center failed to plead fraud with
particularity. Because we ultimately affirm the district court on
that ground, the arguments that Space Center made in its motion
to reconsider are not relevant to our decision.
20200280-CA 6 2022 UT App 9211500 Space Center v. Private Capital
remaining claim for breach of contract. Among other things,
Lender argued that “Space Center was obligated to pay the listed
fees” and that there was nothing in the agreement to suggest that
the fees had to represent actual costs incurred. (Quotation
simplified.) Lender also contended that Space Center could not
“prove the element of damages for its breach of contract claim.”
(Quotation simplified.) To support this, Lender attached a
declaration by its accountant, wherein the accountant averred
that, even under a “hypothetical accounting” that accepted all of
Space Center’s allegations as true, Space Center would still owe
Lender money. In its opposition, Space Center responded with a
number of arguments, and it also challenged the validity of
Lender’s hypothetical accountings.
¶20 After hearing argument on the motion for summary
judgment, the court issued an oral ruling granting the motion in
part and denying it in part. The court determined that the loan
agreement was not ambiguous and that Space Center had
unambiguously agreed to have the servicing and legal fees
“attributed to” it. Moreover, in the court’s view, nothing in the
loan agreement required those fees to be actually incurred, and it
was “really irrelevant what happened with those funds after they
were paid.” The court thus granted summary judgment based on
the plain language of the loan agreement.
¶21 But the court did not grant summary judgment with regard
to one aspect of Lender’s motion. As explained above, the loan
agreement required Space Center to pay a broker fee reserve and
a broker fee in the same amount. The court determined that the
broker fee was not actually an “agreed extra fee.” The court then
concluded that by paying the broker fee, Space Center had paid
the broker fee reserve as well.
¶22 Given its resolution of the broker fee issue, the court
declined to rule on Lender’s claim that, even if Space Center’s
allegations were true, there were no damages. It instead ordered
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supplemental briefing on the “remaining issue” of “whether
Space Center suffered damages if the only charge it was not
required to pay was the broker reserve in the amount of
$114,500.00.”
Supplemental Briefing on the Breach of Contract Claim
¶23 In its supplemental briefing, Space Center raised three
arguments. First, it argued that Lender had “accepted $190,000 to
extend the loan” and had promised to “reduce the extension fee.”
Second, it argued that Lender’s accountant applied one of Space
Center’s payments “to induce default by applying the payment
only to the principal balance.” Finally, it argued that, even if it had
defaulted, the “hypothetical accounting” failed “to timely apply
loan reserves.”
¶24 In response, Lender argued that, even if Space Center’s
arguments were correct, Space Center still could not show
damages. In support of this claim, it included three hypothetical
accountings from its accountant. Those hypothetical accountings
showed that, even assuming Space Center’s allegations as true,
Space Center would still owe on the loan.
¶25 In response, Space Center argued that the hypothetical
accountings were incorrect because they erroneously calculated
the interest based on thirteen days of interest, when they should
have been based on only twelve days. It further argued that the
accountant “fail[ed] to apply the Loan Reserves to pay off the
balance on August 20, 2015.”
Summary Judgment on the Remainder of the Breach of Contract Claim
¶26 After the court heard argument on the supplemental
briefing, it issued an oral ruling granting summary judgment in
Lender’s favor. There, the court first ruled that the loan was in
default when it was not paid off on June 18, 2015. The court then
rejected Space Center’s argument that Lender did not timely
20200280-CA 8 2022 UT App 9211500 Space Center v. Private Capital
apply loan reserves. Based on those findings, the court concluded
that Space Center had failed to show damages and that Lender
was therefore entitled to judgment as a matter of law. The court
later issued a written order, titled “Order Granting Defendant
[Lender’s] Motion for Summary Judgment,” granting Lender’s
motion for summary judgment “in its entirety.”
Attorney Fee Litigation, Notice of Appeal, and Final Judgment
¶27 On March 16, 2020 (two weeks after the court issued its
written order granting summary judgment), Lender and Servicer
filed a motion to recover costs and attorney fees.
¶28 On March 27, 2020, Space Center filed a notice of appeal.
The notice stated,
[Space Center] hereby appeal[s] to the Utah
Supreme Court the final order of the Honorable
Kara L. Pettit granting [Lender’s] Motion for
Summary Judgment, entered on March 3, 2020. The
appeal is taken from the entire judgment, including
all interlocutory orders.
When Space Center filed this notice, the district court had not yet
ruled on Lender and Servicer’s motion for costs and attorney fees.
¶29 On September 3, 2020, the court issued a written ruling
granting Lender and Servicer’s motion for costs and attorney fees.
Later that same day, the court issued a document that it titled
“Final Judgment.” That document “awarded judgment” “in favor
of [Lender] against Plaintiffs, jointly and severally,” and it
provided the judgment amount.
Supplemental Briefing on Jurisdiction
¶30 Pursuant to the previously filed notice of appeal, the case
proceeded to this court, and we heard oral argument in
20200280-CA 9 2022 UT App 9211500 Space Center v. Private Capital
November 2021. At argument, members of the court raised
questions about the scope of our appellate jurisdiction. At the
close of argument, we directed the parties to provide
supplemental briefing on two questions:
• First, given that there was a pending motion for attorney
fees when Space Center filed its notice of appeal, should
“what purported to be a notice of appeal . . . instead have
been a petition for leave to take an interlocutory appeal”?
• Second, because Space Center specifically “identifie[d] the
motion for summary judgment” in its notice of appeal, is
this appeal limited to the question of whether the court
incorrectly granted summary judgment, or can we also
consider other prior rulings (including, notably, the ruling
that dismissed the fraud-based claims)?6
ISSUES AND STANDARDS OF REVIEW
¶31 Given the jurisdictional concerns raised at oral argument,
we first address which of Space Center’s claims, if any, we have
appellate jurisdiction over. This “presents a question of law.”
Trapnell & Assocs., LLC v. Legacy Resorts, LLC, 2020 UT 44, ¶ 29, 469
P.3d 989.
¶32 As explained below, we conclude that we have appellate
jurisdiction over both of Space Center’s claims. Because of this, we
next consider Space Center’s claim that the district court erred in
dismissing Space Center’s fraud-based claims. “Because the
propriety of a motion to dismiss is a question of law, we review
for correctness, giving no deference to the decision of the trial
court.” Krouse v. Bower, 2001 UT 28, ¶ 2, 20 P.3d 895. In this review,
6. In response to our directive, both parties filed supplemental
briefs on these issues, and we thank the parties for their helpful
assistance.
20200280-CA 10 2022 UT App 9211500 Space Center v. Private Capital
“we accept the factual allegations in the complaint as true and
consider them, and all reasonable inferences to be drawn from
them, in the light most favorable to the non-moving party.” Id.¶33 Finally, we consider Space Center’s claim that the district
court erred when it granted summary judgment in Lender’s favor.
Summary judgment is appropriate “if the moving party shows
that there is no genuine dispute as to any material fact and the
moving party is entitled to judgment as a matter of law.” Utah R.
Civ. P. 56(a). “Whether a [district] court appropriately granted
summary judgment is a question of law.” Holmes Dev., LLC v.
Cook, 2002 UT 38, ¶ 21, 48 P.3d 895. In assessing the district court’s
decision, “we need review only whether the [district] court erred
by applying the governing law and whether a material fact was in
dispute.” Id. “We thus review the [district] court’s legal
conclusions for correctness, according them no deference,” and
“we view the facts and all reasonable inferences drawn therefrom
in the light most favorable to the nonmoving party.” Id. (quotation
simplified).
ANALYSIS
I. Appellate Jurisdiction
¶34 “We have an independent obligation to ensure that we
have jurisdiction over all matters before us,” and we “do not take
lightly our responsibility to ensure we have proper jurisdiction
before deciding a case.” Trapnell & Assocs., LLC v. Legacy Resorts,
LLC, 2020 UT 44, ¶ 31, 469 P.3d 989. As explained above, we asked
for supplemental briefing on two issues related to appellate
jurisdiction. First, we asked the parties to address the timeliness
of Space Center’s notice of appeal, given that there was a pending
attorney fee motion when Space Center filed its notice. And
second, we asked the parties to address whether Space Center had
only properly appealed from the summary judgment ruling, or
whether Space Center had also properly appealed the district
20200280-CA 11 2022 UT App 9211500 Space Center v. Private Capital
court’s other orders (including the earlier dismissal of the fraud-
based claims).
¶35 Having considered the supplemental briefing and the
relevant law, we conclude that (A) Space Center’s notice of appeal
was timely and (B) Space Center properly appealed all of the
district court’s orders.
A. Timeliness
¶36 Unless an exception applies, we only have jurisdiction over
“a final order or judgment.” Utah R. App. P. 3(a)(1); see also Copper
Hills Custom Homes, LLC v. Countrywide Bank, FSB, 2018 UT 56,
¶¶ 10–15, 428 P.3d 1133. A judgment is final when it “adjudicates
all claims and the rights and liabilities of all parties.” Utah R. Civ.
P. 54(a).
¶37 In past Utah practice, finality turned on the entry of a
“decision on a dispositive motion,” i.e., “a decision that
adjudicated all claims involving all parties.” Griffin v. Snow
Christensen & Martineau, 2020 UT 33, ¶ 15, 467 P.3d 833. “But this
practice generated questions as to when a particular decision was
final.” Id. So in 2015, certain amendments were made to rule 58A
of the Utah Rules of Civil Procedure. See Utah R. Civ. P. 58A
advisory committee note to the 2015 amendments; see also Griffin,
2020 UT 33, ¶¶ 15–17. Of note, rule 58A(a) now states that “[e]very
judgment and amended judgment must be set out in a separate
document ordinarily titled ‘Judgment’—or, as appropriate,
‘Decree.’” Utah R. Civ. P. 58A(a). In this sense, after 2015,
a separate 58A(a) judgment does not operate at the
decision level. Rather, it operates at the case level to
signal that all claims involving all parties have been
resolved, to document the resolution of each claim
and the rights and liabilities of all parties, and to
start the clock for notices of appeal and post-
judgment motions when it is signed and docketed.
20200280-CA 12 2022 UT App 9211500 Space Center v. Private Capital
Griffin, 2020 UT 33, ¶ 27.
¶38 In Griffin, our supreme court accepted the Third Circuit’s
“helpful description of what a proper separate judgment should
look like” under rule 58A—namely, that “(1) the order must be
self-contained and separate from the opinion; (2) the order must
note the relief granted; and (3) the order must omit (or at least
substantially omit) the District Court’s reasons for disposing of
the parties’ claims.” Id. ¶¶ 20–21 (quotation simplified).
¶39 Griffin also opined that “[t]o distinguish a judgment from
an order or ruling,” the document in question “should be
identified accordingly.” Id. ¶ 22. It thus mattered to the supreme
court that the document in question in that case “was not titled
‘Judgment,’ but was instead named ‘Order of Dismissal with
Prejudice.’” Id. ¶ 23. The court regarded this as being more than
“a mere technical deviation.” Rather, it saw it as an indication that
the document was a confirmation of a “particular ruling,” as
opposed to being “a separate judgment documenting the
resolution of all claims in the district court.” Id.
¶40 Thus, a rule 58A(a) “separate judgment, by definition,
must be self-contained and independent from any other
document in the case, including the decision that gave rise to it.”
Id. ¶ 24; see also In re adoption of E.M.F., 2022 UT App 43, ¶ 12, 509
P.3d 214 (recognizing and applying the “separate document”
requirement of rule 58A(a)). And in a departure from past
practice, such a document is required even “if a decision disposes
of all claims in the action.” Griffin, 2020 UT 33, ¶ 26 (quotation
simplified).
¶41 Here, the first jurisdictional question we raised has to do
with the timing of Space Center’s notice of appeal, and that
question initially turns on when the district court issued the final
judgment in this case. Space Center suggests that the court issued
the final judgment on March 2, 2020, when it issued the ruling
granting summary judgment (the March 2 Order). Space Center’s
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argument is not without some support. After all, it’s true that the
March 2 Order disposed of the final claims, and it’s also true that
it did not include much in the way of “procedural history, legal
reasoning, and factual content” regarding the court’s decision.
Griffin, 2020 UT 33, ¶ 28. But even so, (1) the document was “not
separate from the court’s decision on the relevant motion,” id., but
was instead the court’s ruling on the motion for summary
judgment itself, and (2) it was not “clearly identified as a
judgment,” id., but was instead captioned as an “Order Granting
Defendant [Lender’s] Motion for Summary Judgment.”
¶42 By contrast, the court subsequently issued a document on
September 3, 2020, that fully complied with rule 58A(a)’s
requirements. Unlike the March 2 Order, this document was
separate from any ruling on any underlying motion, it did note
the relief granted (stating that judgment had been entered in favor
of Lender against Space Center and also stating the amount), and
it was clearly identified as a judgment (indeed, it was actually
titled “Final Judgment”). Given all this, we agree with Lender and
Servicer that it was the September 3, 2020 document, not the
March 2 Order, that constituted the final judgment in this case.
¶43 In light of this, the remaining question is whether Space
Center filed a timely notice of appeal from that final judgment. As
noted, Space Center filed its notice of appeal on March 27, 2020,
some five months before entry of the final judgment. This was
after the court had issued its March 2 Order granting summary
judgment, but before the court issued the final judgment on
September 3, 2020. Because of this, Space Center’s notice of appeal
was premature. See Utah R. App. P. 3(a)(1). However, our
appellate rules provide that “[a] notice of appeal filed after the
announcement of a decision, judgment, or order but before entry
of the judgment or order shall be treated as filed after such entry
and on the day thereof.” Id. R. 4(c). We thus treat Space Center’s
notice as if it were filed on September 3, 2020, which is when the
court entered final judgment.
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¶44 Moreover, we further note that Lender and Servicer’s
motion for attorney fees does not alter this conclusion. That
motion was filed on March 16, 2020. This was after the court’s
March 2 Order granting summary judgment, but it was before
Space Center’s notice of appeal—and, of course, also before the
district court issued the final judgment on September 3, 2020.
Notably, the court granted the motion for attorney fees on
September 3, 2020, but it did so mere minutes before issuing the
final judgment. Because of this, when the court entered the final
judgment, there were no pending motions that would have
prevented the judgment from being final.
¶45 In the supplemental briefing, the parties disagree about the
potential application of rule 4(b)(2) of the Utah Rules of Appellate
Procedure to this case. Under that rule, a “notice of appeal filed
after announcement or entry of judgment, but before entry of an
order disposing of any motion listed in paragraph (b)”—which,
notably, includes a request for attorney fees under rule 73 of Utah
Rules of Civil Procedure—“shall be treated as filed after entry of
the order and on the day thereof, except that such a notice of
appeal is effective to appeal only from the underlying judgment.”
Utah R. App. P. 4(b)(2); see also id. R. 4(b)(1)(F). But as explained,
the court granted Lender and Servicer’s motion for attorney fees
before it entered final judgment. Rule 4(b)(2) is thus inapplicable,
and the operative rule is instead rule 4(c). And under that rule,
while Space Center’s notice of appeal was premature, it’s still
“treated as” having been filed “on the day” the court issued its
final judgment. Id. R. 4(c). As a result, Space Center’s notice was
timely.
B. Scope
¶46 This leads to the second jurisdictional question we raised,
which concerns the scope of Space Center’s notice of appeal.
¶47 Rule 3(d) of the Utah Rules of Appellate Procedure states
that a “notice of appeal must . . . designate the judgment, order,
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or part thereof being appealed.” This “requirement is
jurisdictional.” Jensen v. Intermountain Power Agency, 1999 UT 10,
¶ 7, 977 P.2d 474. And “the object of a notice of appeal is to advise
the opposite party that an appeal has been taken from a specific
judgment in a particular case.” Pulham v. Kirsling, 2019 UT 18,
¶ 23, 443 P.3d 1217 (quotation simplified). “As a result, an order
not identified in the notice of appeal falls beyond this court’s
appellate jurisdiction.” Pulham v. Kirsling, 2018 UT App 65, ¶ 28,
427 P.3d 261 (quotation simplified), aff’d, 2019 UT 18.
¶48 But rule 3(d) does “not require a party appealing from an
entire final judgment to specify each interlocutory order of which
the appellant seeks review.” Zions First Nat’l Bank, NA v. Rocky
Mountain Irrigation, Inc., 931 P.2d 142, 144 (Utah 1997) (quotation
simplified). “Thus, when an appeal is taken from a final judgment,
there is no requirement that the notice designate intermediate
orders which are to be raised as issues on appeal.” Wilson v.
Sanders, 2019 UT App 126, ¶ 28, 447 P.3d 1240 (quotation
simplified). In this sense, when an “intermediate order of the
court constitutes one link in the chain of rulings leading to a final
judgment, [an] appellant is entitled to challenge it based on a
notice of appeal identifying the final order.” Freight Tec Mgmt.
Group Inc. v. Chemex Inc., 2021 UT App 92, ¶ 22, 499 P.3d 894(quotation simplified).
¶49 Here, Space Center’s notice of appeal stated,
[Space Center] hereby appeal[s] to the Utah
Supreme Court the final order of the Honorable
Kara L. Pettit granting [Lender’s] Motion for
Summary Judgment, entered on March 3, 2020. The
appeal is taken from the entire judgment, including
all interlocutory orders.
¶50 At oral argument and again in our request for
supplemental briefing, we asked whether the notice of appeal’s
reference to the court’s ruling on “[Lender’s] Motion for Summary
20200280-CA 16 2022 UT App 9211500 Space Center v. Private Capital
Judgment” limits our jurisdiction to a review of that ruling. On
further consideration (and including consideration of the
arguments put forward in the supplemental briefing), we
conclude that we do have jurisdiction to address the other rulings
as well.
¶51 Although the notice did identify “the final order . . .
granting [Lender’s] Motion for Summary Judgment,” it then
stated that “[t]he appeal [was] taken from the entire judgment,
including all interlocutory orders.” (Emphasis added.) By
explicitly stating that it was appealing “the entire judgment,”
Space Center provided notice to Lender and Servicer that it
intended to also appeal any prior rulings that constituted a “link
in the chain of rulings leading to” the final judgment, thereby
allowing it to challenge any such ruling “based on [its] notice of
appeal identifying the final order.” Freight Tec Mgmt. Group, 2021
UT App 92, ¶ 22 (quotation simplified).
¶52 Further, Space Center’s wording makes this case
distinguishable from Pulham. There, the supreme court gave a
limited construction to a notice of appeal. But it did so because the
notice of appeal had specifically stated that the appeal was “taken
from such parts of the judgment as follows,” after which the
notice identified three particular paragraphs from the divorce
decree in question. Pulham, 2019 UT 18, ¶ 24 (quotation
simplified). Because of the party’s enumerated list, the supreme
court held that “nothing in the notice of appeal indicated an intent
to appeal from any other portions of the Amended Decree” (or
any other ruling), and the court did so based on a rule under
which a “notice of appeal that specifies only part of a final
judgment will not suffice to appeal other parts of the judgment (or
other orders merged therein).” Id. ¶¶ 29–30 (quotation
simplified).
¶53 Here, the notice of appeal would have been clearer without
the initial reference to the summary judgment ruling. And in
20200280-CA 17 2022 UT App 9211500 Space Center v. Private Capital
fairness to Space Center, we suspect that this reference was
prompted by the prior Utah practice norms discussed above,
under which that summary judgment ruling would arguably
have been the final judgment (because it disposed of all the claims
at issue in the suit). But regardless, what ultimately matters here
is that the notice of appeal then stated that Space Center was
appealing “the entire judgment, including all interlocutory
orders.” In light of this additional line, we conclude that this was
not a limited notice of appeal of the sort at issue in Pulham, but
that it was instead intended to be (and in fact was) an appeal from
the final judgment. As a result, we conclude that we do have
appellate jurisdiction to review “the entire judgment, including
all interlocutory orders.”
II. Fraud-Based Claims
¶54 As explained, the district court dismissed Space Center’s
fraud-based claims because they were “barred by the economic
loss rule” and, alternatively, because they were “not pled with
sufficient particularity.” We agree that Space Center did not plead
its fraud-based claims with particularity. Because of this, we need
not address the court’s alternative ruling that the economic loss
rule barred Space Center’s claims. See Robinson v. Robinson, 2016
UT App 33, ¶ 55, 368 P.3d 105.
¶55 As set forth by our supreme court, the elements of a fraud
claim are
(1) that a representation was made (2) concerning a
presently existing material fact (3) which was false
and (4) which the representor either (a) knew to be
false or (b) made recklessly, knowing that there was
insufficient knowledge upon which to base such a
representation, (5) for the purpose of inducing the
other party to act upon it and (6) that the other party,
acting reasonably and in ignorance of its falsity, (7)
20200280-CA 18 2022 UT App 9211500 Space Center v. Private Capital
did in fact rely upon it (8) and was thereby induced
to act (9) to that party’s injury and damage.
Armed Forces Ins. Exch. v. Harrison, 2003 UT 14, ¶ 16, 70 P.3d 35(quotation simplified).
¶56 By rule, fraud has its own pleading requirement—namely,
when “alleging fraud or mistake, a party must state with
particularity the circumstances constituting fraud or mistake.”
Utah R. Civ. P. 9(c). The rule’s use of the term “must,” of course,
means that this is a mandatory command. See In re adoption of
M.L.T., 746 P.2d 1179, 1180 (Utah Ct. App. 1987).
¶57 To satisfy this particularity requirement, a plaintiff must
set forth “the relevant surrounding facts . . . with sufficient
particularity to show what facts are claimed to constitute such
charges.” Armed Forces Ins. Exch., 2003 UT 14, ¶ 16 (quotation
simplified); see also Carlton v. Brown, 2014 UT 6, ¶ 38, 323 P.3d 571(noting that “only a sufficiently clear and specific description of
the facts underlying the plaintiff’s claim of fraud will satisfy the
requirements of rule 9[(c)]” (quotation simplified)). The “relevant
surrounding facts” must typically include “the who, what, when,
where, and how.” DiLeo v. Ernst & Young, 901 F.2d 624, 627 (7th
Cir. 1990).
¶58 In the fraud portions of its complaint, Space Center
asserted that Servicer and Lender made fraudulent misstatements
to Space Center’s representatives during the negotiations for the
loan and then again at closing. Of note, Space Center alleged the
following7:
7. Our discussion of the particularity requirement turns on the
precise language used in the complaint. Because of this, when
quoting the complaint in this paragraph and in paragraph 60,
we’ll quote Space Center verbatim, without using the “Servicer”
(continued…)
20200280-CA 19 2022 UT App 9211500 Space Center v. Private Capital
• “[A]t closing Agent PCG represented to Plaintiffs and First
American Title Company that Lender PCG Partners had in
fact incurred servicing fees of $687,000.00, brokerage fees
in the amount of $114,500.00 and legal fees of $16,000.00 in
connection with the origination and servicing of the Loan.”
• “When preparing the Loan Agreement, Agent PCG falsely
represented to Plaintiffs that fees of $687,000 were
attributable to the Loan as there existed no obligation by
Lender PCG Partners to pay Agent PCG fees of $687,000
for the loan.”
• “Plaintiffs were led to believe that Agent PCG was
charging Lender PCG Partners for services as part of a
commercial relationship between Agent PCG and Lender
PCG Partners.”
• “Plaintiffs would not have paid Agent PCG fees of $687,000
but for Agent PCG’s misrepresentation regarding its fees.”
¶59 The problem with these allegations is that Space Center did
not plead with particularity who said what to whom. We have
previously held that the “identity of the person who made the
alleged misrepresentation” is a “relevant surrounding fact[].”
Webster v. JP Morgan Chase Bank, NA, 2012 UT App 321, ¶ 19, 290
P.3d 930 (quotation simplified); see also Shah v. Intermountain
Healthcare, Inc., 2013 UT App 261, ¶ 12, 314 P.3d 1079 (holding that
fraud claims were not pleaded with particularity, in part, because
the plaintiffs failed “to explain” “which defendants made what
and “Lender” labels that we’ve employed elsewhere to improve
readability of this opinion. As a reminder, we again note that
Space Center’s complaint used “Agent PCG” to refer to Private
Capital Group Inc., which we identify elsewhere as “Servicer.”
Space Center also used “Lender PCG Partners” to refer to PCG
Credit Partners LLC, which we identify elsewhere as “Lender.”
And the term “Plaintiffs” referred to Space Center.
20200280-CA 20 2022 UT App 9211500 Space Center v. Private Capital
statements”); Coroles v. Sabey, 2003 UT App 339, ¶ 28, 79 P.3d 974(“Certainly one requirement for pleading fraud with particularity
is to identify the offender.”). And one of the reasons that it’s also
necessary to identify the recipient of the alleged misstatements is
that the recipient’s identity can be critical to fraud’s reliance
element. In Coroles, for example, we held that the plaintiffs did not
sufficiently plead reliance because they had failed to allege which
of the many listed plaintiffs “read or even saw” the allegedly
fraudulent documents. 2003 UT App 339, ¶¶ 29–30 (quotation
simplified). Tying these together, one of the reasons for requiring
particularity about the identities of both the speaker and the
recipient is that this information is necessary for the defendant to
be able to investigate and then prepare a response (i.e., to
ascertain whether the alleged statements were in fact made), and
another (and yet related) reason is that a court would need this
same information when determining whether the statements
were actually made.8
8. We acknowledge the possibility that there may be some
scenarios in which a plaintiff cannot identify the speaker of the
fraudulent misrepresentations. Cf. Reed v. Wells Fargo Bank, No.
C 11-00194 JSW, 2012 WL 2061623, at *2 (N.D. Cal. June 7, 2012)
(“Although Plaintiffs do not identify the loan officer by name,
they explain their inability to do so prior to obtaining
discovery.”). And such scenarios would likely include situations
in which a plaintiff is alleging fraud by omission. Cf. Belville v. Ford
Motor Co., 60 F. Supp. 3d 690, 697 (S.D. W. Va. 2014) (suggesting
that a “more relaxed standard . . . should apply in omission cases
because a plaintiff cannot be required to specifically identify the
precise time, place, and content of an event that did not occur”).
Though we need not definitively decide the issue here, we do
acknowledge that in such a case, this component of the
particularity requirement may arguably be relaxed.
(continued…)
20200280-CA 21 2022 UT App 9211500 Space Center v. Private Capital
¶60 Here, beyond vague references to “Agent PCG,” Space
Center failed to identify who made the representations. And
while Space Center also alleged that the representations in
question were made to “Plaintiffs,” it failed to identify with any
particularity who the recipients of the alleged misstatements
were. Without this information, it is unclear “what facts are
claimed to constitute” the fraud charges. Armed Forces Ins. Exch.,
2003 UT 14, ¶ 16 (quotation simplified). And without that
information, Servicer and Lender could not adequately respond
to Space Center’s claims and defend themselves, nor could a court
ultimately rule on these claims. As a result, rule 9(c)’s particularity
requirement was not satisfied, and the district court therefore did
not err in dismissing Space Center’s fraud-based claims.9
But here, Space Center did not allege or argue that it was
unable to identify the speaker. (And on the facts presented, we fail
to see how it reasonably could have argued that, given that its
fraud-based claims center on conversations and meetings that its
representatives were a part of.) Moreover, as explained below,
Space Center’s fraud by nondisclosure claim lacked particularity
not because it did not identify a speaker, but because it did not
identify a duty.
9. Aside from particularity, a few final notes are in order
regarding other aspects of Space Center’s fraud-based claims.
First, in some portions of its complaint and appellate brief, Space
Center seems to suggest that certain provisions within the loan
documents themselves constituted fraud. Though somewhat
unclear, we understand Space Center to be pointing to the “loan
fees” provision of the loan agreement. As explained above, in that
provision, the loan agreement lists the servicing, legal, and broker
fees, including their amounts. As noted, however, fraud requires
proof of a misstatement of “a presently existing material fact.”
Armed Forces Ins. Exch. v. Harrison, 2003 UT 14, ¶ 16, 70 P.3d 35(continued…)
20200280-CA 22 2022 UT App 9211500 Space Center v. Private Capital
III. Breach of Contract Claim
¶61 After the court granted Lender and Servicer’s motion to
dismiss, Space Center’s only remaining claim was for breach of
contract against Lender. The court then granted summary
judgment to Lender after determining that Space Center had not
(quotation simplified). We don’t read the “loan fees” provision as
being an assertion of fact; rather, we read it as being a list of fees
that Space Center agreed to pay, much like a processing fee or a
shipping-and-handling fee. Space Center points to no authority,
and we’re aware of none, under which the terms of a contract or
loan (as opposed to a factual misstatement within the relevant
document) can be characterized as the factual misstatement that
supports a fraud complaint.
Second, in a related vein, Space Center suggests that
Servicer and Lender committed fraud by, at times, asserting their
view that certain things were or were not required by the loan.
But again, fraud requires proof of a misstatement of fact. While
Space Center was certainly entitled to litigate its competing
interpretation of the loan in a breach of contract action, we see no
legal support for its assertion that a party can be charged with
fraud based on its expression of its view of how a contract should
be interpreted.
Finally, Space Center alleged that Servicer committed
fraud by nondisclosure by failing “to disclose certain facts to
Plaintiffs regarding the loan transaction, including but not limited
to the actual fees, costs, and expenses for or incurred by” Lender.
But a “defendant’s failure to disclose must implicate the breach of
a duty to be actionable.” Fidelity Nat’l Title Ins. Co. v. Worthington,
2015 UT App 19, ¶ 13, 344 P.3d 156. Where a complaint “does not
identify what duty” allegedly required the defendant to disclose
the information in question, the fraud claim fails for lack of
particularity. Id. This is the case here, where Space Center “did not
identify any duty” that Servicer or Lender “breached by failing to
disclose” the information in question. Id. ¶ 14.
20200280-CA 23 2022 UT App 9211500 Space Center v. Private Capital
raised a genuine dispute as to damages. See Utah R. Civ. P. 56(a)
(explaining that summary judgment is appropriate “if the moving
party shows that there is no genuine dispute as to any material
fact”); Eleopulos v. McFarland & Hullinger, LLC, 2006 UT App 352,
¶ 10, 145 P.3d 1157 (“A breach of contract claim requires four
essential elements of proof, one of which is damages.”).
¶62 Space Center now challenges that determination on appeal,
and it makes a host of arguments in support of its position. We
have reviewed Space Center’s arguments, and we conclude that
they’re each meritless. Three of them, however, warrant brief
discussion. See Carter v. State, 2012 UT 69, ¶ 16 n.7, 289 P.3d 542(holding that a “court need not analyze and address in writing
each and every argument, issue, or claim raised” and recognizing
the “maxim of appellate review that the nature and extent of an
opinion rendered by an appellate court is largely discretionary
with that court” (quotation simplified)); accord Collum v. State,
2015 UT App 229, ¶ 12, 360 P.3d 13 (per curiam).
¶63 First, Space Center argues that the district court erred when
it determined that Lender was entitled to the servicing and legal
fees, even if those fees did not represent costs actually incurred.
On this, however, the loan agreement itself simply states that a
servicing fee of $687,000 and a legal fee of $16,000 were
“attributable to” Space Center. And the parties’ settlement
statement was likewise clear that these fees would be charged to
Space Center. Space Center has pointed to nothing in the loan
agreement or the settlement statement suggesting that it was only
obligated to pay fees actually incurred, as opposed to these fees
that were explicitly listed and attributable to it. The court
therefore did not err when it saw no genuine dispute of material
fact as to Lender’s entitlement to those fees. See Basic Rsch., LLC v.
Admiral Ins. Co., 2013 UT 6, ¶ 5, 297 P.3d 578 (holding that “when
the existence of a contract and the identity of the parties are not in
issue and when the contract provisions are clear and complete, the
20200280-CA 24 2022 UT App 9211500 Space Center v. Private Capital
meaning of the contract can be resolved by the court on summary
judgment” (quotation simplified)).
¶64 Second, Space Center argues that the court erred by not
recognizing that Lender “orally and in writing promised to
extend the loan for a fee of $190,000” and that “Space Center paid
this extension fee.” But the agreement that Space Center refers to
was a collateral release agreement, not a loan extension. In that
agreement, Lender simply agreed to release certain collateral in
exchange for $190,000 plus interest, and Space Center
acknowledged that the loan still “remain[ed] in default” and that
Lender had not “waived any right, power or remedy available to
it under the loan documents” by entering into that collateral
release agreement. The court therefore did not err in concluding
that there was no genuine dispute of fact regarding this
agreement. See id.¶65 Third, Space Center argues that Lender’s accountant
incorrectly assumed that the loan began accruing interest on
February 18, 2015. Space Center contends that interest should
have started to accrue on February 20, 2015, when the loan was
actually funded. In the promissory note, however, the parties
agreed that the loan would “bear interest starting the date
[Lender] first wires the funds into escrow, or the date indicated
above, whichever is earlier.” February 18, 2015, was the “date
indicated above,” so it was appropriate for the accountant to use
that date in her calculations. Space Center has thus shown no
genuine issue of material fact in this regard either. See id.¶66 In short, because Space Center did not present a genuine
dispute of material fact regarding damages, Lender was “entitled
to judgment as a matter of law.” Utah R. Civ. P. 56(a); see also
Eleopulos, 2006 UT App 352, ¶ 9 (“In order to preclude the entry of
summary judgment on claims for breach of contract . . . , Plaintiffs
must raise material issues of fact pertaining to actual damages.”).
20200280-CA 25 2022 UT App 9211500 Space Center v. Private Capital
CONCLUSION
¶67 The district court appropriately dismissed Space Center’s
fraud-based claims because those claims were not pleaded with
sufficient particularity. And the court appropriately granted
summary judgment when Space Center failed to show a genuine
dispute of fact regarding damages. We therefore affirm.
20200280-CA 26 2022 UT App 92