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Thompson v. Capener

Court of Appeals of Utah

July 11, 2019

Jay Mervin Thompson, Lori G. Thompson, and Cindy Thompson, Appellees,
v.
Micah Capener and Shaylee Capener, Appellants.

          First District Court, Logan Department The Honorable Kevin K. Allen No. 170100152

          Bradley H. Bearnson, Aaron K. Bergman, and Wayman M. Stodart, Attorneys for Appellants

          Brad C. Smith and Elizabeth A. Knudson, Attorneys for Appellees

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

          OPINION

          MORTENSEN, JUDGE

         ¶1 Micah and Shaylee Capener own certain real property (Lots 1A and 1B) in Tremonton, Utah, which is part of the Garfield Estates Subdivision-Phase 1 (Subdivision). Jay, Lori, and Cindy Thompson, also property owners who reside in the Subdivision, brought this breach of contract action to enforce against the Capeners certain protective covenants (Covenants) encumbering the Subdivision. The Capeners filed a motion for summary judgment, asserting a statute of frauds defense that the Covenants are not enforceable against Lots 1A and 1B because they were not signed by one of the then owners of Lot 1-the larger parcel that was subsequently subdivided into Lots 1A and 1B. The district court denied the Capeners' motion, concluding that the Covenants are enforceable against Lots 1A and 1B because the statute of frauds was satisfied by other writings or alternatively because the previous owner had ratified the Covenants. We reverse.

         BACKGROUND[1]

         ¶2 The Subdivision contains seven lots, one of which was Lot 1. In May 2005, June C. Garfield (June) conveyed Lot 1 to Bradley H. Garfield (Brad).[2] Brad then conveyed Lot 1 to himself and Susan Garfield (Susan) as joint tenants. In June 2006, the Covenants-which purported to encumber all seven lots in the Subdivision-were signed by June and Brad, but not by Susan. The Covenants were recorded on June 12, 2006. At no time did Susan sign the Covenants.

         ¶3 In April 2014, Micah Capener entered into a real estate purchase contract with Brad and Susan to purchase Lot 1. Lot 1 was then further subdivided creating separate lots designated 1A and 1B. An amended plat evidencing the subdivision was signed by Brad and Susan and recorded on July 2, 2014 (Amended Plat). On July 23, 2014, Brad and Susan executed warranty deeds conveying Lots 1A and 1B to Micah Capener (Warranty Deeds). The Warranty Deeds stated that the conveyance was made "[s]ubject to easements, restrictions, and rights of way appearing of record and enforceable in law" (Habendum Clause). Capener thereafter conveyed Lots 1A and 1B to himself and Shaylee Capener as co-trustees of their revocable living trust.

         ¶4 On May 2, 2017, the Thompsons filed this action for breach of contract, alleging that the Covenants were enforceable against Lots 1A and 1B and that the Capeners had violated the Covenants.[3] The Capeners filed a motion for summary judgment, asserting that the Covenants were unenforceable against Lots 1A and 1B because Susan had never signed them.

         ¶5 The district court denied the Capeners' motion for summary judgment and ruled that the Covenants were enforceable against Lots 1A and 1B. The court concluded that "[w]here the . . . [Warranty Deeds] and [Amended Plat] all impliedly reference the . . . Covenants, and the two deeds executed by [Brad and Susan] contain both their signatures, it is clear there is a nexus and it was [Brad and Susan's] intention that Lots 1A and 1B would be subject to the Covenants." Alternatively, the court concluded that in signing the Amended Plat and Warranty Deeds, Susan ratified Brad's actions in creating the Covenants because "there is every indication [she] was aware of the . . . Covenants . . . [and] could have provided that she did not wish the [S]ubdivision, let alone Lots 1A and 1B, to be subject to" the Covenants. The district court went on to state that based on "subsequent writings bearing both [Brad's and Susan's] signatures . . . [Susan] clearly ratified [Brad's] actions in creating" the Covenants.

         ¶6 The Capeners petitioned for interlocutory appeal from the denial of their motion for summary judgment. We granted the petition.

         ISSUE AND STANDARD OF REVIEW

         ¶7 The Capeners contend that the district court denied their motion for summary judgment in error because the statute of frauds was not satisfied and that the Covenants are therefore unenforceable against Lots 1A and 1B as a matter of law. "Summary judgment is only appropriate if the moving party shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." Arnold v. Grigsby, 2018 UT 14, ¶ 8, 417 P.3d 606 (cleaned up). "An appellate court reviews a trial court's legal conclusions and ultimate grant or denial of summary judgment for correctness." Id. (cleaned up). And "the applicability ...


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