United States District Court, D. Utah
INTERNATIONAL FIDELITY INSURANCE COMPANY, a New Jersey corporation, Plaintiff,
LA PORTE CONSTRUCTION, INC., et al., Defendants.
MEMORANDUM DECISION AND ORDER GRANTING MOTION FOR
PARTIAL SUMMARY JUDGMENT
HONORABLE JILL N. PARRISH UNITED STATES DISTRICT COURT JUDGE.
the Court is Plaintiff International Fidelity Insurance
Company's (“IFIC”) Motion for Partial Summary
Judgment (the “Motion”) (ECF No. 95). IFIC moves
the court for summary judgment against defendants Benjamin
Logue (“Mr. Logue”), Lisa Marie Logue
(“Mrs. Logue”), La Porte Construction, Inc.
(“La Porte Construction”), and La Porte
Management, Inc. (“La Porte Management”)
(collectively “Defendants”) on its First Claim
for Relief for Breach of Contract. Only Mrs. Logue opposed
IFIC's Motion. See Affidavit/Declaration in
Opposition to Motion (the “Opposition”), ECF No.
court heard oral argument on the motion on January 11, 2019.
At the hearing, defendants Mr. Logue, La Porte Construction,
and La Porte Management represented that they intended to
stipulate to an entry of judgment against them. On February
4, 2019, IFIC filed a Verified Statement in Support of
Judgment by Confession (“Verified Statement”)
(ECF No. 127) signed by Mr. Logue on behalf of Mr. Logue, La
Porte Construction, and La Porte Management
(“Confessing Defendants”). Pursuant to the
Verified Statement, the court hereby GRANTS
the Motion for Partial Summary Judgment as to the Confessing
Defendants. The court now evaluates the Motion on the merits
as to Mrs. Logue.
case arises out of the development and construction of a
high-density mixed-use residential and commercial project in
downtown Salt Lake City known as the Plaza at State Street
(the “Plaza”). Defendant Tannach Properties,
record owners of certain properties, hired La Porte
Construction as the general contractor for the Plaza. Mr.
Logue is the president and principal of La Porte
Construction. Tannach and La Porte entered into three
separate construction contracts regarding the Plaza. Each
contract required La Porte to acquire construction bonds to
guarantee the project.
Porte applied to IFIC to furnish both contractor performance
and payment bonds for the Plaza. IFIC agreed to execute
performance and payment bonds for each project (collectively
the “Bonds, ” separately “Performance
Bonds” or “Payment Bonds”). As a condition
of procuring the Bonds, IFIC presented La Porte with an
“Indemnity Agreement.” The Indemnity Agreement
lists International Fidelity Insurance Company and/or
Allegheny Casualty Company as “Surety, ” La Porte
Construction as “Contractor, ” and the remaining
63 named defendants as “Indemnitors.” On March
30, 2012, Mr. Logue and his wife, Mrs. Logue, executed the
Indemnity Agreement in their individual capacities. Mr. Logue
also executed the Indemnity Agreement on behalf of the other
Indemnitors, purportedly as President of La Porte
Construction and La Porte Management, and as Managing Member
of the other 60 Indemnitors. Accompanying each signature is
an acknowledgment by a notary public that Mr. Logue signed on
behalf of each of the Indemnitors. But Mr. Logue was not the
managing member of the Indemnitors, nor had he been
authorized to represent them. On March 3, 2017, the court
dismissed 16 indemnitors due to Mr. Logue's lack of
authority, apparent or actual, to bind them.
Indemnity Agreement required all the Indemnitors to indemnify
IFIC “against all losses, costs, expenses, and
exposure” related to the Bonds and the construction of
the Plaza Development by La Porte. The Indemnity Agreement
also contained the following provision under the heading
The undersigned represent to [IFIC] that they have carefully
read the entire [Indemnity] Agreement and that there are no
other agreements or understandings which in any way lessen or
modify the obligations set forth herein. The undersigned
further warrant and represent to [Fidelity] that all
necessary action has been taken by them to authorize the
execution and delivery of this [Indemnity] Agreement.
with the Indemnity Agreement, IFIC also required Mr. Logue to
sign Resolutions Authorizing Execution of Indemnity Agreement
(the “Resolutions”). The Resolutions, which were
prepared by IFIC, each contained the following provision:
At a Special meeting of the Members of the [e.g., Amberley
Properties II, LLC] . . . duly called and held on the 30 day
of March, 2012 a quorum being present, the following Preamble
and Resolution were adopted: WHEREAS this LLC has a financial
material and beneficial interest in transactions in which
LaPorte Contruction, Inc. [is involved] . . . RESOLVED, that
the Managing Member(s) authorized to execute documents on
behalf of the LLC, be and they are hereby authorized and
empowered to execute any indemnity agreement or agreements
required by [Fidelity] . . . RESOLVED FURTHER, that the
Member be and they are hereby authorized and empowered to
execute such indemnity agreement or agreements and to any and
all amendments to said indemnity agreement or agreements and
to any other or further agreements.
Resolutions concluded with a provision intended to identify
by name the “Managing Members” authorized to
execute the Indemnity Agreement, but no names or entities
were listed. Each of the Resolutions bears the sole signature
of “Benjamin Logue, Managing Member.”
the execution of the agreements, the project got underway.
But the project faced severe hardships. As a result, work on
the Plaza was suspended indefinitely. In June 2015, Citibank,
one of the obligees under the Bonds, made demand on IFIC
under the Performance Bonds. Citibank filed suit in the
United States District Court, District of Utah. The suit was
dismissed. Citibank refiled in the Third District Court for
Salt Lake County, State of Utah. Citibank also filed an
action to judicially foreclose Citibank's trust deed on
the property (the “Foreclosure Action”).
Meanwhile, La Porte Construction's subcontractors and
suppliers made claims on the Payment Bonds. These actions
were all brought in the Third District Court for Salt Lake
County, Utah. IFIC has paid damages on all of the claims
except for Citibank's claim under the Performance Bonds
and one action pending under the Payment Bonds.
brought this suit against La Porte Construction and the
Indemnitors on January 12, 2016. In 2017, the court dismissed
the seventeen above-named indemnitors and in October of 2017
entered final judgment in their favor. IFIC now moves for
partial summary judgment against Mr. Logue, Mrs. Logue, La
Porte Construction, and La Porte Management
(“Defendants”) seeking damages for breach of
contract and specific performance. The Confessing Defendants
did not oppose the Motion and signed the Confession of
Judgment on February 4, 2019. Thus, of the four Defendants,
only Mrs. Logue opposes the motion.
court shall grant summary judgment 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). “[T]he plain language of [Fed. R.
Civ. P. 56] mandates the entry of summary judgment . . . upon
motion, against a party who fails to make a showing
sufficient to establish the existence of an element essential
to that party's case, and on which that party will bear
the burden of proof at trial.” Celotex Corp. v.
Catrett, 477 U.S. 317, 322 (1986). The moving party
“bears the initial responsibility of informing the
district court of the basis for its motion, ” and the
nonmoving party must “go beyond the pleadings and by
[their] own affidavits . . . depositions, answers to
interrogatories, and admissions on file, designate specific
facts showing that there is a genuine issue for trial.”
Id. at 323-24 (internal citation and quotation marks
considering a motion for summary judgment, the court must
examine all of the evidence in the light most favorable to
the nonmoving party. Jones v. Unisys Corp., 54 F.3d
624, 628 (10th Cir. 1995). This requires that all reasonable
inferences be drawn in favor of the nonmoving party.
Sports Unltd., Inc. v. Lankford Enters., Inc., 275
F.3d 996, 999 (10th Cir. 2002). A dispute of fact is genuine
only if “a reasonable [trier of fact] could find in
favor of the nonmoving party on the issue.” Macon
v. United Parcel Serv., Inc., 743 F.3d 708, 712 (10th
Cir. 2014). “‘Where the record taken as a whole
could not lead a rational trier of fact to find for the
nonmoving party,' summary judgment in favor of the moving
party is proper.” Concrete Works of Colo., Inc. v.
City & Cty. of Denver, 36 F.3d 1513, 1518 (10th Cir.
1994) (quoting Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 587 (1986)).
has moved for summary judgment on its breach of contract
claim against Defendants seeking damages in the amount of $1,
320, 176.66 for breach of contract and a decree of
specific performance requiring the Defendants to post money
or collateral in the amount of $16, 300, 00.00 due to the
parties' alleged breach of the Indemnity Agreement.
Confessing Defendants admit that the amount of damages and
the amount sought as collateral are correct. Mrs. Logue does
not contest the essential facts on which IFIC relies, or the
amount of damages sought, but rather contests her liability
under the contract due to her lack of understanding, lack of
legal representation, and her signing under duress. The court
will first address whether the contract was breached and then
turn to Mrs. Logue's defenses.
Breach of Contract
alleges that the Defendants should be held liable for
breaching the Indemnity Agreement. Under Utah law,
“[t]he elements of a prima facie case for breach of
contract are (1) a contract, (2) performance by the party
seeking recovery, (3) breach of the contract by the other
party, and (4) damages.” Am. W. Bank Members, L.C.
v. State, 342 P.3d 224, 230-31 (Utah 2014) (internal
case, the Indemnity Agreement is a contract, enforceable
under Utah law, against those persons who are a party to the
agreement. “A contract is a promise or a set of
promises for the breach of which the law gives a remedy, or
the performance of which the law in some way recognizes as a
duty.” Restatement (Second) of Contracts § 1
(1981). A contract is formed when there is a
“manifestation of mutual asset” between “at
least two parties” creating a bargained for
“exchange” and “consideration.”
Id. §§ 9, 17. “A condition precedent
to the enforcement of any contract is that there be a meeting
of the minds of the parties, which must be spelled out,
either expressly or impliedly, with sufficient definiteness
to be enforced.” Valcarce v. Bitters, 362 P.2d
427, 428 (Utah 1961). In this case, there was a meeting of
the minds and a bargained for exchange. IFIC entered into the
Indemnity Agreement with the Defendants in exchange for IFIC
becoming surety in the underlying surety
transactions. Indemnity Agreements are often used to
guarantee the rights of the surety against the obligor.
“[I]n cases of suretyship and guaranty, there is, if
not an express contract, as in the instant case, an implied
contract that the principal should indemnify the surety if
the latter is compelled to pay the creditor.”
Beaver Cty. v. Home Indem. Co., 88 Utah 1, 52 P.2d
435, 450 (1935). The Indemnity Agreement is enforceable
against the parties that properly executed the agreement. The
Confessing Defendants admit that the Indemnity Agreement is
valid and enforceable. Verified Statement at ¶ 2.
performed its obligation under the Agreement. IFIC is
obligated by the Indemnity Agreement to execute or procure
bonds for the construction project. IFIC procured three
Performance and Payment Bonds dated April 5, 2012. The Bonds
Payment Bond No.
April 5, 2012
April 5, 2012
$1, 508, 636.00
April 5, 2012
Performance Bond No.
April 5, 2012
$16, 916, 641.00
April 5, 2012
April 5, 2012