Goldenwest Federal Credit Union v. Kenworthy

2017 UT App 191
THE UTAH COURT OF APPEALS
GOLDENWEST F EDERAL C REDIT U NION ,
Appellant,
v.
K ATHLEEN F. K ENWORTHY ,
Appellee.
Opinion1
No. 20150397-CA
Filed October 13, 2017
Third District Court, Salt Lake Department
The Honorable Elizabeth A. Hruby-Mills
No. 149905786
Dana T. Farmer, Attorney for Appellant
Peter A. Klc, Attorney for Appellee
JUDGE GREGORY K. O RME authored this Opinion, in which JUDGES
S TEPHEN L. R OTH and J ILL M. POHLMAN concurred.2
1. Our original memorandum decision in this matter was issued
on 	January 	12, 	2017. 	See 	Goldenwest 	Federal 	Credit 	Union 	v.
Kenworthy, 2017 UT App 9, 391 P.3d 388. We thereafter granted
Kenworthy’s 	petition 	for 	rehearing. 	While 	much 	of 	the
substantive 	analysis 	of 	our 	original 	decision 	remains, 	other
analysis is altered, and the result is changed from a reversal to
an affirmance.
2. Senior Judge Stephen L. Roth began his work on this case as a
member of the Utah Court of Appeals. He retired from the court,
but thereafter became a Senior Judge. He completed his work on
this case sitting by special assignment as authorized by law. See
generally Utah R. Jud. Admin. 11-201(6).

Goldenwest Federal Credit Union v. Kenworthy
20150397-CA 	2 	2017 UT App 191
ORME, Judge:
¶1 	Goldenwest Federal Credit Union appeals the district
court’s entry of summary judgment in favor of Kathleen F.
Kenworthy. We affirm.
¶2 	“In 	reviewing 	a 	district 	court’s 	grant 	of 	summary
judgment, we view the facts and all reasonable inferences drawn
therefrom in the light most favorable to the nonmoving party
and recite the facts accordingly.” Ockey v. Club Jam, 2014 UT App
126, ¶ 2 n.2, 328 P.3d 880 (citation and internal quotation marks
omitted). “A summary judgment movant must show both that
there is no material issue of fact and that the movant is entitled
to judgment as a matter of law.” Orvis v. Johnson, 2008 UT 2,
¶ 10, 177 P.3d 600 (emphasis in original).
¶3 	On 	April 	24, 	2006, 	Kenworthy 	entered 	into 	a 	loan
agreement with Goldenwest to fund the purchase of a vehicle.
The loan’s maturity date was April 15, 2012. Kenworthy initially
agreed to repay the loan in monthly installments of $487.21. In
May 2008, after missing the payment due in February and all
payments 	due 	thereafter, 	Kenworthy 	called 	Goldenwest,
discussed her financial difficulties, and indicated that she would
not be able to make the scheduled payments. On May 9, 2008,
Goldenwest agreed to reduce Kenworthy’s monthly payments to
$200 per month. No other terms of the loan agreement were
modified. Kenworthy made one $200 payment but made no
payments thereafter.
¶4 	Almost six years later, on February 5, 2014, Goldenwest
sued Kenworthy for the remaining balance due on the loan.3
Kenworthy 	moved 	for 	summary 	judgment, 	claiming 	that
3. Goldenwest sued Kenworthy in 2011, but the district court
dismissed that case, without prejudice, for lack of prosecution.
The 	complaint 	initiating 	that 	action 	was 	timely 	under 	any
scenario.

Goldenwest Federal Credit Union v. Kenworthy
20150397-CA 	3 	2017 UT App 191
Goldenwest’s claims were “barred by the statute of limitations.”
The district court granted Kenworthy’s motion, concluding that
“[t]he 	applicable 	statute 	of 	limitations 	had 	run 	prior 	to
[Goldenwest] 	initiating 	the 	present 	action.” 	It 	then 	granted
Kenworthy’s request for attorney fees, to which Goldenwest had
failed to respond. Goldenwest appeals.
¶5 	Goldenwest 	argues 	that 	the 	district 	court 	erred 	in
granting Kenworthy’s summary judgment motion because “[t]he
statute 	of 	limitations 	did 	not 	run 	before 	this 	action 	was
commenced.” “An appellate court reviews a trial court’s legal
conclusions and ultimate grant or denial of summary judgment
for correctness[.]” Orvis, 2008 UT 2, ¶ 6 (citation and internal
quotation marks omitted).
¶6 	According to Goldenwest, its action was timely because it
was brought within six years of when the oral agreement to
reduce the monthly payment to $200 was reached. “Subject to
one exception inapplicable here,” a six-year statute of limitations
“applies to ‘any contract, obligation, or liability founded upon an
instrument in writing.’” Griffin v. Cutler, 2014 UT App 251, ¶ 18,
339 P.3d 100 (emphasis added) (quoting Utah Code Ann. § 78B-
2-309(2) (LexisNexis 2012)). But an action on an oral agreement is
subject to a four-year statute of limitations. See Utah Code Ann.
§ 78B-2-307(1)(a) (LexisNexis 2012); Griffin, 2014 UT App 251,
¶ 15. And “where a specific material term of [a] contract in
writing is subsequently changed orally, the statute of limitations
applicable to oral contracts applies.” Strand v. Union Pac. R.R.,
312 P.2d 561, 563 (Utah 1957) (emphasis added).
¶7 	The case comes to us in this posture. If the six-year statute
applicable to written contracts applies, Goldenwest’s complaint
was 	timely.4 	If 	Goldenwest’s 	oral 	agreement 	to 	reduce
4. 	The 	district 	court 	entered 	summary 	judgment 	against
Goldenwest 	because 	it 	determined 	that 	the 	complaint 	was
untimely under either the four-year or the six-year statute of
(continued…)

Goldenwest Federal Credit Union v. Kenworthy
20150397-CA 	4 	2017 UT App 191
Kenworthy’s monthly payments to $200 changed a material term
of the written contract, then, under Strand, the four-year statute
applicable to oral contracts applies, and the complaint was not
timely.
(…continued)
limitations. Its decision was the product of two key errors. First,
it 	assumed 	that, 	in 	order 	to 	comply 	with 	either 	statute,
Goldenwest 	was 	required 	to 	serve 	its 	complaint 	before 	the
relevant statutory period had run. This is not the case. Rather,
“[o]nce a statute has begun to run, a plaintiff must file his or her
claim before the limitations period expires[.]” Russell Packard
Dev., Inc. v. Carson, 2005 UT 14, ¶ 20, 108 P.3d 741 (emphasis
added). 	To 	be 	sure, 	Goldenwest 	served 	its 	complaint 	on
Kenworthy on May 13, 2014, which is six years and four days
after May 9, 2008, the date from which the court believed the
statutes of limitations began to run. But Goldenwest filed its
complaint on February 5, 2014, which means that its action
would have been timely under the six-year statute.
In 	addition, 	the 	district 	court 	erred 	by 	applying 	the
statutes of limitations from the date the loan modification was
made. The proper date from which to commence the running of
the applicable statute was when the contract was breached—that
is, the date of the first missed payment, see Upland Indus. Corp. v.
Pacific 	Gamble 	Robinson 	Co., 	684 	P.2d 	638, 	643 	(Utah 	1984)
(emphasis in original) (“[A] cause of action on a contract accrues,
thus causing the statute of limitations to commence, only upon
breach of the contract.”), or upon the maturity date of the loan, if
no action has been taken to accelerate payment prior to that date,
see Goldenwest Federal Credit Union v. Kenworthy, 2017 UT App 9,
¶ 9, 391 P.3d 388. Because Goldenwest filed its complaint on
February 5, 2014, its action would have been timely under the
six-year statute whether it ran from the date of the first missed
payment (February 15, 2008) or the maturity date (April 15,
2012).

Goldenwest Federal Credit Union v. Kenworthy
20150397-CA 	5 	2017 UT App 191
¶8 	But on appeal, Goldenwest does not contend that the oral
modification 	of 	the 	amount 	of 	the 	monthly 	payment 	was
immaterial. 	Rather, 	Goldenwest 	argues 	that 	Strand 	is
“inapplicable” because the terms of the agreement between
Goldenwest and Kenworthy “can be proven without resort to
parol evidence” and because the agreement and subsequent oral
modification “are within the statute of frauds.” With respect to
the parol evidence argument, Goldenwest does not explain what
evidence in Strand consisted of parol evidence, nor does it
explain 	how 	consideration 	of 	parol 	evidence 	would 	render
Strand “inapplicable” to the current case.
¶9 	With 	respect 	to 	the 	statute 	of 	frauds 	argument,
Goldenwest seemingly treats its argument as self-evident. We
assume that Goldenwest believes the agreement is governed by
the statute of frauds because the agreement between Goldenwest
and Kenworthy is one that cannot be performed within one year.
See Pasquin v. Pasquin, 1999 UT App 245, ¶ 18, 988 P.2d 1. If
Goldenwest 	is 	claiming 	that 	oral 	modifications 	to 	written
agreements governed by the statute of frauds cannot fall within
the four-year statute of limitations, it has not cited authority to
that effect. Goldenwest instead cites the venerable case of Texas
Western Railway Co. v. Gentry, 8 S.W. 98, 101 (Tex. 1888), but the
court in Gentry concluded that a written resolution was governed
by the same statute of limitations applicable to written contracts.
Id. Because the agreement between Goldenwest and Kenworthy
involved an oral modification to a written contract, Gentry has
little relevance.5
5. Goldenwest also suggests that “any modification” to the
agreement was required to “meet the requirements of the statute
of frauds.” See Holt v. Katsanevas, 854 P.2d 575, 579 (Utah Ct.
App. 1993) (stating that “if an original agreement was required
to comply with the statute of frauds, any material modification
of that agreement must also conform to the statute of frauds”).
We note, however, that this contention would preclude the oral
(continued…)

Goldenwest Federal Credit Union v. Kenworthy
20150397-CA 	6 	2017 UT App 191
¶10 	Ultimately, Goldenwest does not adequately develop its
arguments that Strand is inapplicable. See State v. Thomas, 961
P.2d 299, 305 (Utah 1998) (stating that an adequately briefed
argument 	requires 	not 	only 	“bald 	citation 	to 	authority 	but
development of that authority and reasoned analysis based on
that authority”). Given the complex nature of these doctrines,
Goldenwest cannot merely mention parol evidence and the
statute of frauds and assume that this court will ascertain the
arguments it is trying to make. Therefore, as a result of its
cursory briefing on the matter, Goldenwest has not persuaded us
that 	Strand—and 	the 	four-year 	statute 	of 	limitations 	it
implicates—is “inapplicable.”
¶11 	Nevertheless, 	in 	our 	previous decision, 	we 	expressed
doubts regarding 	the 	applicability 	of 	Strand. 	See 	Goldenwest
Federal Credit Union v. Kenworthy, 2017 UT App 9, ¶ 7, 391 P.3d
388. Specifically, we 	were unsure whether the parties’ oral
modification constituted a “material change.” Id. Goldenwest
and Kenworthy orally agreed to change a single term of the
written loan agreement, namely the amount of the monthly
installment payments. The total amount due, the rate of interest,
the maturity date, and the collateral for the loan all remained the
same. Although we might have been receptive to the argument
that 	a 	mere 	reduction 	in 	the 	monthly 	payment 	as 	an
accommodation to its borrower was not a material change that
would deprive Goldenwest of the benefit of the longer statute of
limitations, 	we 	need 	not 	resolve 	this 	question 	because
Goldenwest has not raised it.
¶12 	We also pointed out in our prior decision that when an
“‘installment contract calls for the entire balance to become due
on some specific future date, and the obligee has done nothing to
(…continued)
modification that Goldenwest readily acknowledges it made
with Kenworthy.

Goldenwest Federal Credit Union v. Kenworthy
20150397-CA 	7 	2017 UT App 191
legally accelerate the future payments, the statute of limitations
begins to run only after the obligor defaults on the final due
date.’”6 Id. ¶ 8 (quoting Anderson v. Davis, 2008 UT App 86U,
para. 2). We premised our initial decision on the fact that
Kenworthy did not demonstrate that Goldenwest accelerated
Kenworthy’s 	repayment 	obligation. 	If 	Goldenwest 	did 	not
accelerate, then the statute of limitations began to run on April
15, 2012, the maturity date of the loan. See id. ¶ 9. Because
Kenworthy did not establish that Goldenwest accelerated the
debt, we determined that the unpaid balance became due at
maturity. See id. Under this analysis, we could not conclude as a
matter of law that Goldenwest’s suit was time-barred given that
it filed its complaint within four years of the loan’s maturity
date. On that basis, we held that the district court erred in
granting 	summary 	judgment 	to 	Kenworthy 	regardless 	of
whether the six- or four-year statute applied. See id.
¶13 	After we issued our decision, Kenworthy filed a petition
for rehearing, contending that we had based our decision on an
argument that was not preserved below and that was not raised
by Goldenwest on appeal, namely the argument that Anderson
provided the proper date from which to commence the statute of
limitations. Concerned that there might have been error in our
decision, we asked for a response from Goldenwest, wherein it
conceded that it had not raised this sound argument below or on
6. Kenworthy asserts on appeal that Goldenwest “exercised its
option to accelerate the alleged installments” when it collected
insurance proceeds on the vehicle after she crashed it. But
Kenworthy did not advance this argument when she moved for
summary judgment, nor did she provide a supporting affidavit
or otherwise establish this contention. Based on the record before
us and the authorities presented, we are not persuaded that
separately insuring a loan agreement and collecting proceeds
thereunder automatically triggers acceleration, which is a matter
expressly governed by the loan agreement.

Goldenwest Federal Credit Union v. Kenworthy
20150397-CA 	8 	2017 UT App 191
appeal. Nonetheless, Goldenwest argued that this court could
base its decision on any applicable legal theory apparent from
the record.
¶14 	While we are quite familiar with the principle on which
Goldenwest attempts to rely, this court and the Utah Supreme
Court have employed it only to affirm decisions, not to reverse
them. See, e.g., State v. Griffin, 2016 UT 33, ¶ 34, 384 P.3d 186;
Insight Assets, Inc. v. Farias, 2013 UT 47, ¶ 7, 321 P.3d 1021; Bailey
v. Bayles, 2002 UT 58, ¶ 10, 52 P.3d 1158; Dipoma v. McPhie, 2001
UT 61, ¶ 18, 29 P.3d 1225; Friedman v. Salt Lake County, 2013 UT
App 137, ¶ 5 n.3, 305 P.3d 162. But see, e.g., Acton v. Deliran, 737
P.2d 996, 998–99 (Utah 1987) (recognizing a narrow exception in
which 	Utah 	appellate 	courts 	will 	set 	aside 	judgments 	and
remand for the entry of adequate findings of fact, even absent
pertinent argument from either side, when a trial court failed to
enter 	adequate 	findings, 	precluding 	meaningful 	review 	on
appeal). Aside from cases that involve insufficient findings of
fact or provide a basis for affirmance, we have stated that we
will not consider arguments that were not preserved for appeal.
See, e.g., State v. Holgate, 2000 UT 74, ¶ 11, 10 P.3d 346; State v.
Mills, 2012 UT App 367, ¶ 11, 293 P.3d 1129; State v. Noor, 2012
UT App 187, ¶ 5, 283 P.3d 543. Because Goldenwest did not
preserve, brief, or otherwise argue that the statute of limitations
begins to run at the maturity date of the loan, we erred in
reversing the grant of summary judgment on that basis. See State
v. Robison, 2006 UT 65, ¶ 41, 147 P.3d 448.
¶15 	Consequently, we are in the admittedly awkward position
of 	affirming 	a 	grant 	of 	summary 	judgment 	to 	Kenworthy,
despite the fact that she was not, in absolute terms, entitled to
judgment as a matter of law. The case before us illustrates the
infrequent—but nonetheless observable—tension between our
responsibilities with 	respect 	to 	summary judgment 	and 	the
preservation rule, which is one of the mainstays of appellate
review. On the one hand, we will affirm a grant of summary
judgment only if a party is entitled to judgment as a matter of

Goldenwest Federal Credit Union v. Kenworthy
20150397-CA 	9 	2017 UT App 191
law. See supra ¶ 2. On the other hand, we require parties to
preserve their arguments below and adequately brief them on
appeal, and we typically refuse to consider them unless both
requirements have been met. See, e.g., Holgate, 2000 UT 74, ¶ 11;
State v. Thomas, 961 P.2d 299, 304–05 (Utah 1998).
¶16 	When these principles come into conflict, preservation
and adequate briefing must prevail over legal correctness. We
impose 	certain 	burdens 	on 	appellants, 	including, 	inter 	alia,
preserving their issues for appeal, adequately briefing their
arguments 	on 	appeal, 	and 	demonstrating 	prejudice 	as 	a
prerequisite to obtaining relief on appeal. And while these
impositions aid in the establishment of a functional appellate
system, they also reflect a strong institutional preference for
affirmance 	and 	a 	strong 	institutional 	disinclination 	toward
reversal. We simply cannot, based on the arguments advanced
by Goldenwest, reverse the district court’s grant of summary
judgment in favor of Kenworthy. Although the district court
erroneously applied the statute of limitations, Goldenwest did
not raise any argument that demonstrated error on the district
court’s part. Goldenwest instead relied on arguments that do not
establish any error whatsoever, and our institutional constraints
prevent us from reversing on the basis of a winning argument
that Goldenwest did not make.
¶17 	Because 	we 	now 	affirm 	the 	district 	court’s 	grant 	of
summary judgment, we affirm its award of attorney fees and
costs to Kenworthy as the prevailing party. We also award
Kenworthy her attorney fees and costs incurred on appeal, see
Management Servs. Corp. v. Development Assocs., 617 P.2d 406, 409
(Utah 	1980), 	and 	remand 	for 	the 	limited 	purpose 	of
supplementing her attorney fee award with her fees reasonably
incurred on appeal.
¶18 	Affirmed.