United States District Court, D. Utah
MEMORANDUM DECISION AND ORDER
Waddoups United States District Judge
the court is Plaintiff Banner Bank's Motion for Summary
Judgment of Defendant Loree Smith's counterclaim for
breach of contract. (Dkt. No. 120.) The court held oral
argument on Banner Bank's multiple motions for summary
judgment on July 29, 2016 and again on February 17, 2017.
(Dkt. Nos. 185 & 195.) After considering the parties'
briefs and oral arguments, the court orally granted in part
and denied in part both motions for summary judgment during
the second hearing. (Dkt. Nos. 195 & 196.) The court
reserved the issue of whether summary judgment should be
granted in Banner Bank's favor as to Loree Smith's
counterclaim for breach of contract. (Dkt. No. 120.) The
court now DENIES Banner Bank's motion for summary
Bank claims in its Complaint that it is entitled to
declaratory judgment against Loree Smith. (Dkt. No. 2.) In
her Answer, Loree Smith raised a counterclaim in which she
alleges Banner Bank breached its duty to her as a third-party
beneficiary of the Consent, Waiver & Release Agreement
(“the Release”). (Dkt. No. 75.) Banner Bank now
asks the court to grant it summary judgment on that
counterclaim. (Dkt. No. 120.)
December 31, 2010, Banner Bank entered the Release with two
companies. (Dkt. No. 140, Exhibit F.) Loree Smith held an
interest in one of the companies subject to the Release
(“the assignor”). Through the Release, Banner
Bank consented to the assignment of liability from the
assignor to a second company and to the dissolution of the
assignor. It also released its interest in certain
collateral, including any claims it might have against Loree
Smith. Specifically, Banner Bank agreed to release Loree
Smith from all future “claims, controversies, disputes
liabilities, obligations, demands, damages, debts, liens,
actions and causes of action of any and every nature
whatsoever relating to the Loan.” Despite the Release,
Banner Bank recorded the Trust Deed, which encumbered a
condominium that Loree Smith owned with her husband, on July
11, 2011. (Dkt. Nos. 120 & 140, Exhibit A, p.
3.) Then, approximately one year later, Banner Bank named
Loree Smith in the instant lawsuit, seeking declaratory
judgment that Loree Smith holds no interest in the parcels
subject to the Trust Deed other than one-half interest in the
condominium. (Dkt. No. 2, p. 12.) Loree Smith claims Banner
Bank breached the Release both by recording the Trust Deed
and naming her in this suit. (Dkt. No. 75, p. 18.)
Bank now moves for summary judgment, claiming Loree
Smith's breach of contract claim can be denied as a
matter of law. Summary judgment is appropriate “if the
movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed.R.Civ.P. 56(a). “When
applying this standard, we view the evidence and draw
reasonable inferences therefrom in the light most favorable
to the nonmoving party.” Gutierrez v. Cobos,
841 F.3d 895, 900 (10th Cir. 2016).
Bank argues it is entitled to summary judgment because Loree
Smith has failed to cite an agreement between herself and
Banner Bank and therefore cannot prove the first element of a
breach of contract claim-that a contract exists. (Dkt. No.
120, p. 44.) It next argues that, assuming a contract exists,
Loree Smith has not identified a breach of that contract.
(Dkt. Nos. 120, pp. 44-45 & 164, p. 46.) But Loree Smith
has alleged sufficient facts to satisfy each of the elements
of breach of contract: the “existence of a contract, .
. . nonperformance by [Banner Bank], and damages.”
Mackay v. Cannon, 996 P.2d 1081, 1085 (Utah Ct. App.
Loree Smith has alleged a contract to which she has
sufficient interest to bring a claim. Under Utah law,
“a third party [has] enforceable rights under a
contract” if she is “an ‘intended
beneficiary' of the contract.” Ron Case Roofing
and Asphalt Paving, Inc. v. Blomquest, 773 P.2d 1382,
1386 (Utah 1989). To determine whether Loree Smith is an
intended beneficiary of the Release, the court must look to
“the terms of the contract as well as the surrounding
facts and circumstances.” Id. The Release
expressly names Loree Smith, and in it Banner Bank agreed to
release its interest in claims against her as consideration
for accelerated payments it was to receive under the Release.
(Dkt. No. 140, Exhibit F.) Thus, the terms of the contract
support that Loree Smith was an intended beneficiary, and
therefore she has a claim to enforce the contract.
Loree Smith's counterclaim identifies multiple acts of
breach by Banner Bank that the Release prohibited. Those acts
include Banner Bank's having recorded the Trust Deed less
than one year after entering the Release, therefore
encumbering Loree Smith's title to the condominium, and
Banner Bank's having named Loree Smith in this lawsuit
less than two years after entering the Release. The Release
was drafted broadly, contemplating that Loree Smith was
released from any lien and/or cause of action. It
“RELEASE[D] and FOREVER DISCHARGE[D] Loree Smith of . .
. any liens [and] actions and causes of action of any and
every nature whatsoever relating to the Loan.” The Loan
was a loan for $2.3 million between Banner Bank and the
assignor. The recorded Trust Deed was intended to secure the
Loan. And this lawsuit is Banner Bank's attempt to
recover on a judgment for the value of the Loan. (Dkt. No.
2.) Therefore, the recorded Trust Deed constituted a lien,
which clouded Loree Smith's title, pertaining to the
Loan. And the claim for declaratory judgment in this suit is
a cause of action relating to the Loan. Both were
prohibited by the Release, and Loree Smith's allegation
of them demonstrates a potential breach.
Loree Smith's counterclaim sufficiently pleads damages,
and Banner Bank does not dispute that this element is met.
(Dkt. Nos. 75, 120, & 164.)
Banner Bank is not entitled to judgment as a matter of law on
Loree Smith's counterclaim for breach of contract, ...