Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Camco Construction Inc. v. Utah Baseball Academy Inc.

Court of Appeals of Utah

April 26, 2018

Camco Construction Inc., KeyBank National Association, Sharron Troszak, and Dale Conder, Appellees,
v.
Utah Baseball Academy Inc., Athletic Performance Institute LLC, and Robert Keyes, Appellants.

          Third District Court, Salt Lake Department The Honorable Anthony B. Quinn No. 050918901

          Denver C. Snuffer Jr. and Daniel B. Garriott, Attorneys for Appellants

          Joseph E. Minnock, Attorney for Appellee Camco Construction Inc.

          R. Stephen Marshall, Steven J. McCardell, and Michael S. Malmborg, Attorneys for Appellees KeyBank National Association, Sharron Troszak, and Dale Conder

          Judge David N. Mortensen authored this Opinion, in which Judges Ryan M. Harris and Diana Hagen concurred.

          MORTENSEN, JUDGE:

         ¶1 When the bank that funded the construction of an athletic facility balked at advancing more funds for the project, the owner of the facility cried foul. Several years of litigation followed, culminating in a bench trial. This appeal presents the opportunity for us to review many of the calls made by the trial court leading up to and following trial. We affirm in all respects.

         BACKGROUND

         ¶2 KeyBank National Association provided Athletic Performance Institute LLC (API) financing for a twelve-month construction project to build an indoor athletic facility, which would then convert to a twenty-year, $1.9 million loan. API planned to lease the facility to Utah Baseball Academy Inc. (UBA). Robert Keyes owned both API and UBA. Keyes and UBA guarantied the loan to API. Appellants hired Camco Construction Inc. as the general contractor in the construction of the facility.[1]

         ¶3 While the building was meant to "accommodate multiple sports, " "a floor elevation problem" resulted in the facility only being suitable for baseball. This floor elevation issue was one of many problems that arose with both the funding and construction of the facility. When API and Camco could not resolve these disputes, Camco filed a mechanic's lien and, eventually, a lawsuit against API. Camco brought KeyBank into the suit "to assert lien priority."

         ¶4 Throughout the construction process, API filed draw requests with KeyBank, which KeyBank would pay out of the loan. One particular draw request-Draw Request No. 6-was not immediately funded because of the mechanic's lien. This draw request became a source of conflict between API and KeyBank, and API ultimately asserted claims for damages against KeyBank.

         ¶5 Another source of conflict between API and KeyBank arose in the context of the payment of accrued interest on the loan. While the loan documents were silent as to how such interest was to be handled, KeyBank made interest payments starting at the beginning of the loan period. At some point, KeyBank stopped making these payments. This gave rise to another claim for damages.

         ¶6 The proceedings in the trial court were long and complex. API filed a third party complaint against additional entities- Sporturf and Evergreen-and the trial court eventually bifurcated the related claims. The bifurcation led the trial court, in part, to conclude that the jury waiver included in KeyBank and API's loan documents should be enforced. Thus, the trial court heard Appellants' claims against KeyBank in a bench trial.

         ¶7 However, not all claims were heard at the bench trial, since the trial court had disposed of several of the claims on summary judgment. One claim peripheral to this appeal centered on a $15, 000 payment from Keyes to a KeyBank employee, Roger Preston. The money came from API's construction equity account. This payment was problematic for a number of reasons, and KeyBank ultimately "refunded the $15, 000, plus interest, and unconditionally tendered additional interest to API."

         ¶8 Appellants now challenge the results of the trial.

         ISSUES

         ¶9 The issues raised on appeal fall into four main categories. First, Appellants argue that the trial court improperly granted summary judgment to KeyBank on several of Appellants' claims. Second, they argue that the trial court erroneously granted KeyBank's motion to strike Appellants' jury demand. Third, they argue that several of the court's trial rulings were unsupported. Fourth, they argue that the trial court erred in denying their motion for a mistrial. We address these contentions in turn.

         ANALYSIS

         I. Summary Judgment

         ¶10 We review a trial court's grant of summary judgment for correctness. Overstock.com, Inc. v. SmartBargains, Inc., 2008 UT 55, ¶ 12, 192 P.3d 858.

         ¶11 On summary judgment, the trial court disposed of several of Appellants' claims. Those claims were for intentional infliction of emotional distress (IIED), lost profits, and fraud. We conclude that the trial court properly granted summary judgment in all three respects.

         A. Intentional Infliction of Emotional Distress

         ¶12 In Utah, a plaintiff is entitled to damages

where the defendant intentionally engaged in some conduct toward the plaintiff, (a) with the purpose of inflicting emotional distress, or, (b) where any reasonable person would have known that such would result; and his actions are of such a nature as to be considered outrageous and intolerable in that they offend against the generally accepted standards of decency and morality.

Jackson v. Brown, 904 P.2d 685, 687-88 (Utah 1995) (citation omitted). The trial court concluded that under relevant precedent, the IIED claim that Appellants asserted could not survive as a matter of law, where they "fail[ed] to allege a distinct and palpable injury that isn't derivative of the harm to the companies." (Citing Stone Flood & Fire Restoration, Inc. v. Safeco Ins. Co. of Am., 2011 UT 83, ¶ 40, 268 P.3d 170.) The court further concluded that "as a matter of law there is not an allegation of sufficiently outrageous conduct to give rise to a claim for intentional infliction of emotional distress."

         ¶13 Appellants brought an IIED claim for alleged behavior connected to KeyBank's failure to pay Draw Request No. 6. Appellants argue that because there were disputed facts regarding whether KeyBank "fail[ed] to fund Draw 6 in a timely manner" and "failed to cooperate with API's replacement financing, " summary judgment was inappropriate and the IIED claim should have been decided at trial. But in granting summary judgment on this issue, the trial court did not find facts or even conclude that there were no disputed facts. Instead, its ruling implicitly determined that any disputed facts were immaterial. In other words, whether or not KeyBank failed to fund the draw request or cooperate with replacement financing had no bearing on the outcome of the case; what mattered is that Appellants asserted the claim on behalf of two corporate entities and a private individual, revealing that either the claim was made on behalf of a corporation or the claim was derivative of injury to a corporation. Both situations required the trial court to grant summary judgment.

         ¶14 To begin, Keyes's claim for IIED could not stand inasmuch as it rested on conduct directed at either API or UBA. In Stone Flood, our supreme court addressed an analogous situation. See id. ¶¶ 32-44. The court considered whether shareholders could pursue a claim for IIED that stemmed from an injury to a corporation. See id. ¶ 41. Ultimately, the court concluded that the shareholders could not "pursue damages for injuries that are derivative of the corporation's." Id.

         ¶15 Relying on Stone Flood, the trial court determined that "all of the acts that are alleged . . . should be dismissed under that decision because they fail to allege a distinct and palpable injury that isn't derivative of the harm to the companies." We agree. Appellants claim that summary judgment was inappropriate because "KeyBank failed to submit or lost Draw 6 on multiple occasions, " "lied to Camco about Mr. Keyes not approving payment, " "failed to cooperate with API's replacement financing, " and "wrongly raised the payoff amount" of the loan. But all of these alleged facts speak to conduct directed at corporations. Under Stone Flood, a private individual cannot succeed on an IIED claim for such behavior. See id.

         ¶16 Likewise, neither API nor UBA could recover for the alleged conduct. Several jurisdictions have expressly held that corporations cannot suffer emotional distress.[2] This is a logical tenet: because "a corporation lacks the cognizant ability to experience emotions, a corporation cannot suffer emotional distress. Thus, no claim for intentional infliction of emotional distress lies." FDIC v. Hulsey, 22 F.3d 1472, 1489 (10th Cir. 1994). We are persuaded by this tenet and therefore conclude that, contrary to Appellants' assertion, the trial court's ruling on this issue did not disregard any material disputes of fact. It is undisputed that both API and UBA are corporate entities; as such, they are-as a matter of law-incapable of succeeding on a claim for IIED. Cf. Bross Enters., Inc. v. Town of Chesterton, No. 2:13 CV 217, 2016 WL 5724358, at *3 (N.D. Ind. Sept. 29, 2016). ("The parties focus their argument on whether the conduct . . . is outrageous enough to establish the tort. In so doing they miss a larger problem: the only plaintiff in this action is a corporation, and a corporation cannot suffer mental anguish and so cannot recover in tort for intentional infliction of emotional distress.").

         ¶17 The parties and the trial court also addressed an issue personally experienced by Keyes, which both the parties and the court referred to as stalking. Appellants argue they presented evidence that KeyBank's stalking inflicted severe emotional distress upon Keyes and his family: "his family going into hiding because they felt threatened, serious stress-related health issues, financial ruin." But this recitation of evidence presented deals only with the result of KeyBank's behavior; it does not address the behavior itself. This is problematic, given that the trial court's grant of summary judgment rested on its assessment of Key Bank's behavior and its conclusion that the behavior was "not sufficiently outrageous to justify a claim for intentional infliction of emotional distress." In forming this conclusion, the trial court recounted the behavior at issue:

What we're talking about here is three visits to the API facility by Mr. Preston, which he may, or may not, have had business there and may, or may not, have ever seen Mr. Keyes, and one incident where he may, or may not, have been parked on the same street as the Keyes family. There isn't any spin that you could put on that that makes that, in and of itself, rise to the level of outrageous conduct . . . .

         Accordingly, the trial court granted KeyBank's motion for summary judgment.[3]

         ¶18 Appellants argue that the trial court should have denied the motion "because of genuine [disputes] . . . of material fact." But in so arguing, Appellants do nothing more than set forth the same facts the trial court relied on in concluding that the conduct did not rise to the level necessary for intentional infliction of emotional distress. What one would expect Appellants to focus on, instead, is how the trial court's conclusion-that the conduct was not sufficiently outrageous-was erroneous. But on this point, Appellants again state only that "there were facts precluding summary judgment." Even if this were enough to satisfy Appellants' briefing requirements, [4] we would affirm because the trial court correctly determined that the conduct, as alleged, was insufficient to rise to an outrageous level.

         ¶19 In Nguyen v. IHC Health Services, Inc., 2010 UT App 85, 232 P.3d 529, we approved of a district court's grant of summary judgment where the movant had argued "that even if all of [the plaintiff's] assertions could be proven, the conduct as described did not establish that Defendants acted outrageously." Id. ¶¶ 8-9. That is essentially what we have here. The trial court concluded that, as a matter of law, the conduct at issue in the present case was not outrageous. The court was entitled to form such a conclusion. See Prince v. Bear River Mutual Ins. Co., 2002 UT 68, ¶ 38, 56 P.3d 524 ("If the trial court determines that a defendant's conduct was not outrageous as a matter of law, then the plaintiff's claim fails, and a court may properly grant the defendant summary judgment on an intentional infliction of emotional distress claim. A court is to determine whether a defendant's conduct may reasonably be regarded as so extreme and outrageous as to permit recovery." (cleaned up)).

         ¶20 For purposes of IIED, outrageous conduct is

conduct that evokes outrage or revulsion; it must be more than unreasonable, unkind, or unfair. Additionally, conduct is not outrageous simply because it is tortious, injurious, or malicious, or because it would give rise to punitive damages, or because it is illegal.

Id. (cleaned up). The conduct at issue in this case-parking near someone's house, visiting a facility where that person works three times, and threatening to sue-simply is not the sort of behavior for which plaintiffs can recover under a theory of intentional infliction of emotional distress. It does not evoke outrage or revulsion. See id. It is no more than unreasonable, unkind, or unfair. See id. And because reasonable people "could [not] differ as to whether the conduct . . . was so outrageous and extreme that it offended the generally ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.