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Mounteer Enterprises, Inc. v. Homeowners Association for Colony at White Pine Canyon

Supreme Court of Utah

June 5, 2018

Mounteer Enterprises, Inc., Appellee,
v.
Homeowners Association for the Colony at White Pine Canyon, Appellant.

         On Direct Appeal

          Third District, Summit County The Honorable Kara Pettit No. 110500200

          Joseph E. Wrona, Jared C. Bowman, Park City, for appellee.

          Troy L. Booher, Beth E. Kennedy, Salt Lake City, for appellant.

          Associate Chief Justice Lee authored the opinion of the Court, in which Chief Justice Durrant, Justice Himonas, Justice Pearce, and Justice Petersen joined.

          OPINION

          Lee, Associate Chief Justice.

         ¶1 The Homeowners Association for the Colony at White Pine Canyon (HOA) hired Mounteer Enterprises, Inc. to provide snow removal services. The contract required Mounteer to maintain a certain amount of insurance coverage. And when the HOA discovered that Mounteer had failed to purchase the required insurance, the HOA terminated the contract.

         ¶2 Mounteer filed suit, asserting that the HOA had waived its right to terminate the contract on that ground. It reasoned that the HOA had effectively waived the insurance requirement by accepting Mounteer's certificates of insurance and by making payments to Mounteer despite its noncompliance. The HOA responded by pointing to an antiwaiver clause in the contract-a provision stating that the HOA's failure to notice a deficiency in Mounteer's insurance coverage cannot be construed as a waiver of the insurance provision.

         ¶3 The HOA moved for summary judgment on the antiwaiver issue and moved to exclude evidence relating to a previous contract between the parties. The district court denied both motions and a subsequent motion for judgment notwithstanding the verdict.

         ¶4 We reverse the district court's denial of the HOA's motion for judgment notwithstanding the verdict. We hold that a party may implicitly waive an antiwaiver provision through conduct, but there must be clear intent to waive both the underlying provision and the antiwaiver provision. And we conclude that the HOA's failure to insist on performance of the insurance provision here does not establish such clear intent.

         I

         ¶5 In 2006, the Homeowners Association for the Colony at White Pine Canyon entered into a four-year contract with Mounteer Enterprises, Inc. for snow removal services at its development in Park City, Utah. The contract required Mounteer to maintain $7 million of aggregate liability insurance with (1) a general liability policy for $1 million per occurrence and $5 million in the aggregate and (2) an umbrella policy for $1 million per occurrence and $2 million in the aggregate.

         ¶6 The contract provided that if Mounteer failed to purchase the necessary insurance the HOA could immediately terminate the contract, withhold payments until Mounteer cured the default, or purchase the required insurance and deduct the premiums from payments due to Mounteer. The contract also contained an antiwaiver provision. That provision stated that "[f]ailure of the [HOA] to demand such certificate or other evidence of full compliance with these insurance requirements or failure of the [HOA] to identify a deficiency in the form that is provided shall not be construed as a waiver of Mounteer's obligation to maintain such insurance."

         ¶7 During the four-year contract ending in November 2010 Mounteer submitted four insurance certificates to the HOA. Each certificate showed only $5 million of aggregate liability insurance coverage. And the HOA paid Mounteer for its services despite this deficiency. In 2010 the two parties entered into a new four-year contract with substantially similar terms, including identical insurance requirements and antiwaiver provision. The major difference between the contracts was a reduction in the mileage Mounteer would be servicing, as the HOA gave part of its snow removal business to another company.

         ¶8 Three months into the 2010 contract, the HOA asked Mounteer to surrender over three miles of the roadway Mounteer was contracted to service. When Mounteer refused, the HOA told Mounteer that it planned to find a way to terminate the contract. The HOA then terminated the contract ...


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