District Court, Salt Lake Department The Honorable Keith A.
Kelly No. 139918085
Barnard N. Madsen, Aaron P. Dodd, and Peter Reichman,
Attorneys for Appellant
A. Perry, Attorney for Appellee
Michele M. Christiansen authored this Opinion, in which
Judges Ryan M. Harris and Diana Hagen concurred.
This is a case about preservation. Federated Capital
Corporation (Federated), an out-of-state corporation, and
Neal Deutsch, an out-of-state individual, entered into a
contract that specified an out-of-state place of performance
but provided that the contract would be governed by Utah law
in Utah courts. Federated filed suit against Deutsch for
breach of contract. The district court ruled that Utah's
borrowing statute applied because the other state's
statute of limitations had run, and the court therefore
granted summary judgment for Deutsch. Federated appeals,
arguing that Utah's borrowing statute is inapplicable to
the suit because the suit arose in Utah. Because Federated
did not raise this issue in the district court, it is
unpreserved. We therefore affirm and remand for the limited
purpose of calculating Deutsch's attorney fees incurred
Federated, a Michigan corporation, brought suit against
Deutsch, a Florida resident, alleging that he had breached a
credit card contract that required him to make payments in
Pennsylvania. Specifically, Federated alleged that Deutsch
had failed to make credit card payments to Federated's
predecessor-in-interest totaling $8, 881.85 and that he
consequently owed Federated that amount plus five years of
interest at 29.99%. A provision of the contract specified
that Utah law applied, that Utah courts were the proper
forum, and that the parties consented to Utah courts'
jurisdiction (the Controlling Law & Jurisdiction Clause).
Deutsch moved for summary judgment, arguing that because the
place of performance was Pennsylvania and that state's
four-year statute of limitations had already run, Utah's
borrowing statute barred the suit. See generally 42
Pa. Cons. Stat. § 5525(a)(8) (2002); Utah Code Ann.
§ 78B-2-103 (LexisNexis 2012). The district court agreed
and granted Deutsch's motion. Federated appeals.
AND STANDARD OF REVIEW
On appeal, Federated contends that the district court erred
by applying Utah's borrowing statute so as to import
Pennsylvania's statute of limitations. In Federated's
view, the district court should have instead applied
Utah's six-year statute of limitations for actions
founded on contracts. See generally Utah Code Ann.
§ 78B-2-309 (LexisNexis 2012). When evaluating a
district court's decision to grant or deny a motion for
summary judgment, we consider the facts in favor of the
nonmoving party, and review the court's legal conclusions
and ultimate decision for correctness. Orvis v.
Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600. However, we
cannot review a legal conclusion or decision never actually
made by the district court; the preservation doctrine of
appellate review requires that, to reach the merits of an
issue on appeal, the issue must have been brought to the
district court's attention such that it had the
opportunity to rule on it. State v. Johnson, 2017 UT
76, ¶ 15, 416 P.3d 443. "To provide the court with
this opportunity, the issue must be specifically raised by
the party asserting error, in a timely manner, and must be
supported by evidence and relevant legal authority."
Id. (quotation simplified).
This case is one of several that follow in the wake of the
Utah Supreme Court's decision in Federated Capital
Corp. v. Libby, 2016 UT 41, 384 P.3d 221. In
Libby, our supreme court addressed a similar case
involving Federated based on an identical contract. The court
there held that, because the contract's forum-selection
provision selected Utah law as applied by Utah courts, the
case was governed by both the substantive and procedural law
of Utah. See id. ¶¶ 13, 17. Consequently,
Utah's borrowing statute was applicable. Id.
The supreme court then considered the application of
Utah's borrowing statute to the facts of the case. The
court explained that the borrowing statute creates a two-part
test; first, the statute asks whether the cause of action
arose in another jurisdiction and, second, it asks whether
the cause of action is not actionable in the other
jurisdiction due to the lapse of time. Id. ¶
18. "If both of these elements are satisfied, a Utah
court will adopt that foreign jurisdiction's time
limitations[.]" Id. The supreme court noted in
Libby that Federated had not challenged the district
court's determination that the cause of action arose in
Pennsylvania and therefore proceeded to the second part of
the test. Id. ¶ 19. The supreme court concluded
that the second part of the test was satisfied because
Pennsylvania's four-year statute of limitations had
expired by the time Federated filed suit in Utah.
Id. ¶ 27. Because both elements set forth by
the borrowing statute were satisfied, the supreme court
concluded that Federated's suit against Libby was
time-barred. Id. ¶ 29.
In a concurring opinion, two members of the court emphasized
that Federated's concession-that the cause of action had
arisen in Pennsylvania-meant that the court was unable to
address the meaning of the term "arises in" found
in the borrowing statute. See id. ¶ 36 (Lee,
J., concurring) ("When the argument is squarely raised,
our courts should decide whether the borrowing statute's
'arises in' formulation is a reference to applicable
choice-of-law rules or is dictated simply by the longstanding
'place of performance' test.").
Federated distinguishes the present case from Libby
on a single ground. In contrast to its position in
Libby, Federated does not concede that its causes of
action flowing from this contract arose in
Pennsylvania. Instead, Federated contends that, based on
the language of the contract, the causes of action pleaded in
the complaint arose in Utah. Federated relies on the
Controlling Law & Jurisdiction Clause in the contract,
which contained choice-of-law, forum-selection, and
CONTROLLING LAW AND JURISDICTION. This Agreement shall be
governed solely by and interpreted entirely in accordance
with the laws of the State of Utah, . . . regardless of where
you reside . . . . YOU CONSENT TO PERSONAL JURISDICTION IN
THE STATE AND FEDERAL COURTS IN UTAH AND AGREE THAT ANY
LAWSUIT PERTAINING TO THE ACCOUNT MUST BE BROUGHT ONLY IN
SUCH COURTS IN UTAH, REGARDLESS OF WHO FILES THE SUIT, AND
MAY BE MAINTAINED ONLY IN THOSE ...