Electrical Contractors, Inc. v. Westwater Farms, LLC

Citations: 2016 UT App 60; 370 P.3d 949; 2016 Utah App. LEXIS 64; 2016 WL 1273301Docket: 20141166-CA

Court: Court of Appeals of Utah; March 31, 2016; Utah; State Appellate Court

Original Court Document: View Document

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Westwater Farms, LLC (Westwater) appealed the district court's summary judgment favoring Electrical Contractors, Inc. (ECI) and the denial of its motion to submit additional affidavits and documents opposing the summary judgment. The court affirmed the district's decision. The case originated from an alleged oral contract between Westwater and ECI in 2010 for electrical contracting services related to a water disposal system in Grand County, Utah. ECI provided about $1,028,849 in services, with limited payments made through Stewart Environmental Services, Inc. In January 2012, ECI filed a complaint against multiple parties, including Westwater. ECI's summary judgment motion in May 2014 was supported by an affidavit from its job supervisor, which Westwater countered with an affidavit from managing member Warnes, who did not directly deny the contract's existence. Westwater later sought to supplement its response with additional materials, claiming prior unavailability due to Warnes's hospitalization, but the court denied this motion, finding insufficient justification for the delay in providing the documents.

On September 23, 2014, the district court held a hearing on ECI’s motion for summary judgment. The court found that Westwater’s Opposition Memo did not sufficiently contest ECI’s facts or explain the grounds for any disputes, as required by rule 7 of the Utah Rules of Civil Procedure. Consequently, ECI's statement of material facts was deemed admitted for the summary judgment motion. Based on the undisputed facts, the court determined that ECI proved its breach of contract claim and awarded damages of $876,788.10, totaling $1,165,084.09 with interest. The judgment was certified as final under rule 54(b), prompting Westwater to appeal.

Westwater argues that the district court erred in granting summary judgment, which is reviewed for correctness. Additionally, Westwater contends that the court incorrectly declined to accept its supplemental affidavits and documents, subject to an abuse of discretion standard. In its appeal, Westwater presents several points: it claims ECI's complaint did not adequately establish a breach of contract claim, that the attached documents created genuine material fact issues, and that the court improperly considered evidence of an oral contract in violation of the parol evidence rule. 

Summary judgment is appropriate when there are no genuine material fact issues, and the moving party is entitled to judgment as a matter of law. Westwater asserts that ECI failed to show the existence of an enforceable contract, arguing the terms of the alleged oral contract were too indefinite. However, Westwater did not preserve this argument for appeal, as it did not raise the absence of a contract in its Opposition Memo. Even if preserved, the court found that the affidavit provided by Jensen sufficiently demonstrated the existence of an enforceable oral contract.

Jensen's affidavit confirms that ECI was designated as both the general and electrical contractor for the project, encompassing all typical contractor services without needing explicit enumeration. The parties agreed on a cost-plus payment structure, allowing ECI to charge Westwater for actual costs incurred, along with specified markups: a 1% administrative fee on certain items, a 3% bonding fee on others, and a 12% profit markup on additional items. Westwater's claim that the lack of an established final cost indicated no agreement is unfounded; the cost-plus terms provided a clear pricing calculation method post-completion. Consequently, the district court correctly ruled that ECI's claim was legally established.

Westwater contended that Exhibits A, B, and C of ECI’s amended complaint created genuine issues of material fact precluding summary judgment. However, under Utah Rule of Civil Procedure 7, it was Westwater's responsibility to challenge the facts presented by ECI with specific explanations and relevant citations, which it failed to do in its Opposition Memo. The district court treated ECI’s statement of undisputed facts as admitted due to the insufficiency of Westwater's opposition. The court was not required to search the record for evidence of factual disputes.

Westwater also argued that the district court breached the parol evidence rule by considering ECI's evidence of the oral agreement. However, Westwater did not preserve this argument in the district court. Moreover, the parol evidence rule, which excludes extrinsic evidence meant to alter an integrated contract's terms, is not applicable here since there is no integrated written contract between ECI and Westwater. The evidence of the oral agreement was not intended to modify ECI’s written contract with another entity, thus the parol evidence rule does not exclude it.

Westwater's challenge to the district court's denial of its motion to file supplemental affidavits and documents is based on an assertion that the denial violated rule 56(f) of the Utah Rules of Civil Procedure, which allows for liberal granting of motions to oppose summary judgment when discovery is incomplete. However, Westwater did not clearly state that its motion was based on rule 56(f); instead, it cited rule 15(d), concerning supplemental pleadings, which meant the rule 56(f) argument was not preserved. The court found that Westwater's motion was dilatory and lacked merit, as it failed to inform the court that it could not present essential facts to oppose the summary judgment. Westwater claimed its inability to submit the supplemental documents was due to the hospitalization of a witness, Warnes, but this hospitalization occurred after the submission of the Opposition Memo, which included an affidavit from Warnes. Therefore, the court concluded that Westwater had not demonstrated a valid reason for its failure to submit the documents and determined that the district court did not err in granting ECI's motion for summary judgment while denying Westwater's motion for supplemental documents, leading to an affirmation of the lower court's decision.