Law School Case Brief
Mind & Motion Utah Invs., LLC v. Celtic Bank Corp. - 2016 UT 6, 367 P.3d 994 (Sup.Ct.)
When interpreting a contract, a court's task is to ascertain the parties' intent. And the best indication of the parties' intent is the ordinary meaning of a contract's terms. Accordingly, if the language within the four corners of a contract is unambiguous, the parties' intentions are determined from the plain meaning of the contractual language, and the contract may be interpreted as a matter of law. A contract is facially ambiguous if its terms are capable of more than one reasonable interpretation because of uncertain meanings of terms, missing terms, or other facial deficiencies. But terms are not ambiguous simply because one party seeks to endow them with a different interpretation according to his or her own interests. Rather, the proffered alternative interpretations must be plausible and reasonable in light of the language used. If the parties' intentions cannot be determined from the face of the contract, extrinsic evidence must be looked at to determine the intentions of the parties.
Mind & Motion entered into a real estate purchase contract (REPC) with Celtic Bank to buy a large piece of property the bank had acquired from a developer through foreclosure. Although the county had approved plans to construct condominiums on the land, the developer had not recorded the plats for the first phase of development. Accordingly, the REPC required Celtic Bank to record the plats by a certain date, and it allowed Mind & Motion sole discretion to extend the recording deadline as necessary to allow Celtic Bank enough time to record. It further provided that any extension of the recording deadline automatically extended the deadline to complete the transaction. After extending the recording deadline once, Mind & Motion declined to extend it a second time and sued Celtic Bank for breach of contract. The district court granted summary judgment in Mind & Motion's favor, concluding that the recording provision was unambiguously a covenant, not a condition. It then awarded Mind & Motion $100,000 in liquidated damages and more than $200,000 in attorney fees, as well as the return of Mind & Motion's $100,000 earnest money deposit. On appeal, Celtic Bank argues that summary judgment was improper because the recording provision is unambiguously a condition. And in the alternative, it maintains that the agreement contains facial and latent ambiguities.
Was a potentional purchaser of certain real estate development property, which had been foreclosed upon by a bank, entitled to summary judgment in a breach of contract action against the latter?
The Court held that Mind & Motion was entitled to summary judgment because Celtic Bank’s recording obligation, as outlined in the real estate purchase contract, was unambiguously a covenant. Even though Celtic Bank could not ultimately control when the county issued its final approval to record the phase one development of the real estate property, the recording obligation was framed in mandatory language, and the contract employed explicitly conditional language elsewhere in the agreement. Celtic Bank failed to establish a latent ambiguity in the contract because affidavits which sought to endow otherwise clear language with an alternative meaning were insufficient. The Court affirmed the district court's summary judgment ruling in favor of Mind & Motion.
Access the full text case
Not a Lexis Advance subscriber? Try it out for free.
Be Sure You're Prepared for Class