District Court, Ogden Department The Honorable Ernest W.
Jones No. 160901978
Richard H. Reeve, Attorney for Appellants
E. Mansfield and Megan E. Garrett, Attorneys for Appellee
Jill M. Pohlman authored this Opinion, in which Judges
Gregory K. Orme and Ryan M. Harris concurred.
Al and Martha Syme met with Symphony Group LLC to discuss the
construction of a custom home. The parties signed a contract,
but the Symes cancelled it before construction began.
Symphony, however, retained the Symes' earnest money and
construction deposits. The Symes sued to recover both
deposits, and Symphony moved for summary judgment, which the
district court granted. The Symes appeal. We affirm in part,
reverse in part, and remand for further proceedings.
In the spring of 2015, the Symes met with representatives of
Symphony about the construction of a new, custom home in
Layton, Utah. The parties signed a written contract (the
Agreement) on June 1, which set forth the basic details of
the house Symphony was to construct, including its location,
price, and floor plan. Some of the details, such as the color
and type of brick, countertops, and floor coverings, were
left to be selected in future meetings. The Agreement also
set forth the obligations of each party and provided for
specific remedies in the event of a breach.
As part of the house's purchase price, the Symes agreed
to pay Symphony an earnest money deposit of $2, 000 (the
Earnest Money) and a construction deposit of $43, 000 or $48,
000 (the Construction Deposit). The Symes delivered the Earnest
Money to Symphony when they signed the Agreement. They
delivered a $48, 000 Construction Deposit to Symphony at a
subsequent "Structural Review
Regarding the house's financing, the Agreement required
the Symes "to receive written evidence of loan
pre-approval within ten (10) days from" Symphony's
acceptance of the Agreement, "or such longer period as
[Symphony], in its sole discretion may allow." The same
provision stated that if the Symes failed "timely to
provide such loan approval to [Symphony]," then Symphony
could elect to terminate the Agreement. If Symphony elected
to terminate the Agreement under this provision, the
Agreement required Symphony to return the Earnest Money to
the Symes unless they were in default.
Another provision in the Agreement required the Symes to
deliver to Symphony a loan pre-approval letter "prior to
or at" the "Color Selection Meeting"-a meeting
the Symes were required to attend at Symphony's
"reasonable request." If the Symes failed to
deliver the loan pre-approval letter as required by this
provision, Symphony could, "in its sole and reasonable
discretion," deem the Symes "in default" and
enforce its remedies "as allowed by [the] Agreement and
Utah law, including but not limited to, [Symphony's]
retention of [the] Earnest Money and Construction
The Color Selection Meeting never took place. According to
the Symes, they "waited in vain" for Symphony to
"follow through on [the Color Selection Meeting]"
or "request [the pre-approval letter]."
Before construction started or any other meetings were held,
the Symes sent a letter to Symphony through their attorney
purporting to cancel the Agreement. The Symes conceded in the
letter that they would have to forfeit their $2, 000 Earnest
Money but requested the return of their Construction Deposit.
Because the Symes did not deliver the pre-approval letter and
"failed to finalize other preconstruction selections at
the Color Selection Meeting," Symphony refused to return
the Construction Deposit.
The Symes brought suit for the return of the Earnest Money
and Construction Deposit, seeking a declaration that no
contract existed and, alternatively, seeking damages for
breach of contract and breach of the implied covenant of good
faith and fair dealing. Symphony moved for summary judgment
on each claim.
The district court granted Symphony's motion. It
concluded that there was an enforceable contract between the
parties and determined that the Symes would be unable to
prove their breach of contract claim because the Symes
themselves breached the Agreement by failing to provide the
pre-approval letter "within 10 days of acceptance of the
contract." The court reasoned that "[e]ven if the
[Color Selection Meeting] never took place, [the Symes] were
still required by the contract to provide the pre-approval
letter." The court also concluded that the Symes would
be unable to prove their implied covenant of good faith and
fair dealing claim. At the heart of that claim was the
Symes' contention that the liquidated damages clause
Symphony relied on to retain the Earnest Money and
Construction Deposit was unconscionable. The court concluded
that "expert testimony would be required" to
establish unconscionability and that the Symes would ...