Northgate Village v. Orem City

2014 UT App 86
_________________________________________________________
THE UTAH COURT OF APPEALS
NORTHGATE VILLAGE DEVELOPMENT, LC,
Plaintiff and Appellant,
v.
OREM CITY,
Defendant and Appellee.
Opinion
No. 20120817-CA
Filed April 17, 2014
Fourth District Court, Provo Department
The Honorable Lynn W. Davis
No. 090401127
J. Craig Smith and Kathryn J. Steffey, Attorneys
for Appellant
Jody K. Burnett and George A. Hunt, Attorneys
for Appellee
JUDGE J. FREDERIC VOROS JR. authored this Opinion, in which
JUDGES STEPHEN L. ROTH and JOHN A. PEARCE concurred.
VOROS, Judge:
¶1 Orem City sold a parcel of land to Northgate Village
Development. Northgate spent nearly three million dollars
excavating material buried on the property. Northgate sued the
City, claiming that the City failed to perform its contractual clean-
up responsibilities. The district court granted summary judgment
in the City’s favor and limited Northgate’s recovery to a single
claim, valued at $1,965. Northgate appeals. We affirm in part,
reverse in part, and remand.

Northgate Village v. Orem City
1. When reviewing the district court’s grant of summary judgment,
we view “the facts and all reasonable inferences drawn therefrom
in the light most favorable” to Northgate, the nonprevailing party
below. See Orvis v. Johnson, 2008 UT 2, ¶ 6, 177 P.3d 600 (citation
and internal quotation marks omitted); see also Black v. Allstate Ins.
Co., 2004 UT 66, ¶ 9, 100 P.3d 1163.
20120817-CA 2 2014 UT App 86
BACKGROUND1
¶2 For years the City operated a public works facility on City-
owned property located at 900 West in Orem. The City mined sand
from the property for use in public works projects and filled the
resulting holes “with fill material left over from various Public
Works operations.” Though “[m]ost of the fill material consisted of
dirt and rock,” later excavation unearthed a trove of urban detritus:
car bumpers, bicycle tires, water heaters, washing
machines, car engines, car parts, asphalt, galvanized
pipes, asbestos containing transit pipe, trees, bushes,
medical waste products, brick, mason blocks,
concrete, toilets, electrical panels, refrigerators,
silverware, 50-gallon drums, conduit, general
garbage, storm drains, ABS pipe, barbed wire, field
fence, cedar fence posts, railroad ties, plywood,
carpet, transformers, mercury-containing ballasts,
gas cables, truck mud flaps, plastic sheeting, car
doors, pallets, rebar, pop bottles, sewer pipe, metal T
posts, fire hydrants, water [vials], ductile iron,
copper[] parts and valves, brass parts, fiberglass
insulation, twine, rubber traffic cones, concrete
manhole sections, metal rings, and lids for manholes,
valve boxes, bags of leaves and metal sheeting for
roofs.
The Land Sale Contract
¶3 When the City decided to relocate the public works facility,
it sold the Public Works Parcel on 900 West to Northgate. The City

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20120817-CA 3 2014 UT App 86
and Northgate signed a “Real Property Exchange and Sale
Agreement” in March 2004 and an amended agreement in May
2004. The May 2004 Land Sale Contract divided the purchase and
exchange of property into two phases: Closing 1 and Closing 2. At
Closing 1, the City and Northgate would exchange two parcels of
equal value and the City would purchase two additional pieces of
Northgate property. At Closing 2, Northgate would purchase two
pieces of the City’s property, including the Public Works Parcel.
¶4 Section 3.2.1 of the Land Sale Contract describes
environmental audits conducted on the properties. Section 3.2.1.1
allowed Northgate to rescind the contract if it found the results of
the environmental audit of the City’s properties unacceptable. The
City agreed to provide Northgate with a copy of an
“Environmental Site Assessment” and “a list of environmental
concerns/conditions with the estimated cost of resolving each of the
concerns (‘the Environmental Clean-Up List’).” Section 3.2.1.1 adds,
“A copy of the Environmental Clean-Up List is attached
hereto . . . and incorporated herein by reference.”
¶5 Section 4.3 of the Land Sale Contract describes the parties’
post-Closing 2 responsibilities, which would “survive Closing 2
and the conveyance of the deeds.” Section 4.3.2, titled “Demolition
and Clean-up of Northgate Lease Property,” required the City to
perform certain work on the Public Works Parcel before it turned
the property over to Northgate. The City agreed “to complete any
environmental clean-up responsibilities specified in the written
action plan for the City Public Works Parcel.”
¶6 The Land Sale Contract also contains a provision discussing
Section 108 loans, which are federally financed loans offered to
qualified redevelopment projects. The provision describes
Northgate’s intent “to apply for Section 108 loan money and [other
redevelopment] grant money” through Orem’s Economic
Development Commission. But the provision also states, “The City
cannot make any representations to Northgate as to whether
Northgate will receive these funds.”

Northgate Village v. Orem City
20120817-CA 4 2014 UT App 86
¶7 Finally, the Land Sale Contract contains a provision
addressing default and cure. It requires the nondefaulting party to
provide notice and allow ninety days for the defaulting party to
cure the default. The nondefaulting party “may pursue any
remedies available to it” only after the ninety-day window has
closed.
Excavation and Redevelopment
¶8 Northgate and the City proceeded with Closing 1 and
Closing 2. After Northgate took control of the Public Works Parcel,
it began excavating the buried debris. Each time Northgate
uncovered “another major strike” of material contained in the
Environmental Site Assessment, it contacted the Orem City
Manager’s office. Northgate representatives met with the City
Manager several times at the excavation site. At one meeting,
Northgate asked the City Manager how the City planned to
address its concerns about the buried debris. The City Manager
responded, “We probably have responsibility here. If you
will . . . send me an invoice and some kind of verification of what
you have done, . . . we’ll see what we can do about it.”
¶9 In January 2007, Northgate sent the City a letter detailing “a
major problem with debris . . . found during excavation of the site.”
The letter contained contractor reports, a cost breakdown, a list of
excavated materials, and photographs of the excavation. The letter
also described Northgate’s discovery of unexpected fill material:
You asked us to provide you with costs to
date and an estimate for future costs to clean up the
site. As you know, we understood from soil reports
provided by the city, there was an area midway in
the site, that had asphalt and concrete as fill. Instead,
we found to date, over 100,000 cubic yards of gar-
bage, vehicles, appliances, organic matter, and other
debris that can only be characterized as land-
fill. . . . Our costs for clean up to date approach
$2,000,000 and we believe the balance of the site will

Northgate Village v. Orem City
20120817-CA 5 2014 UT App 86
cost an additional $500,000–$700,000 to clean up the
site.
As per our agreement we expect the city to
reimburse us the cost of clean up. We are not in a
position to absorb those costs as a part of the project.
¶10 Northgate applied for federal redevelopment loans and
grants to help cover the cost of rehabilitating the Public Works
Parcel. Orem’s Economic Development Commission reviews and
recommends redevelopment-fund applicants, but because the
federal redevelopment funds go directly to municipalities, the City
ultimately determines how to distribute the federal redevelopment
funds it receives.
¶11 Orem’s Economic Development Commission recommended
Northgate’s application to the City. In September 2008 a City
representative sent an email to a representative at the Department
of Housing and Urban Development explaining the City had
decided not to offer Northgate Section 108 loans but that Northgate
may still be a good candidate for Brownfields Economic Develop-
ment Initiative (BEDI) funding, a type of redevelopment grant:
Originally, Northgate wanted both Section 108 and
BEDI funding. The city decided that we could not
expend more Section 108 money, and with the
amount that we have spent, we would only be
eligible to receive $220,000 in BEDI funds. The
Northgate project has had extensive clean-up work
on the site, and it will create many [low- to moderate-
income] jobs, so we feel confident it is a great project
to receive BEDI funding.
However, BEDI funds must be used in conjunction with Section 108
funding, so the City’s decision not to expend Section 108 funds on
Northgate also prevented the City from receiving BEDI funds.

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20120817-CA 6 2014 UT App 86
The District Court Proceedings
¶12 Northgate brought five claims against the City: (1) breach of
contract, (2) breach of the implied covenant of good faith and fair
dealing with respect to the environmental clean-up, (3) unjust
enrichment, (4) equitable restitution, and (5) breach of the implied
covenant of good faith and fair dealing with respect to the redevel-
opment funds. The City asked the district court to dismiss
Northgate’s third, fourth, and fifth claims. The district court
deemed Northgate’s fifth claim viable but dismissed Northgate’s
unjust-enrichment and restitution claims. The court concluded,
“Because of the unique facts claimed here, Causes Three and Four
should be dismissed without prejudice. It is not outside of
theoretical contention that discovery potentially could support
such remedies, but it is difficult to envision.”
¶13 Northgate moved for partial summary judgment on its
breach-of-contract claim. The City moved for summary judgment
on all three remaining claims. The district court granted summary
judgment for the City, “subject only to payment by the City of
unpaid costs, if any, incurred by Northgate for removing and
disposing of buried transformers.”
ISSUES AND STANDARDS OF REVIEW
¶14 Northgate appeals both of the district court’s summary
judgment determinations. First, Northgate contends that the
district court erred in denying its motion and granting the City’s
motion for summary judgment on Northgate’s breach-of-contract
claim. Second, Northgate contends that the district court erred in
granting the City’s summary judgment motion on the issue of the
implied covenant of good faith and fair dealing with respect to
redevelopment funds. We review a district court’s summary
judgment for correctness, giving no deference to the district court’s
ruling. Bahr v. Imus, 2011 UT 19, ¶ 15, 250 P.3d 56.

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20120817-CA 7 2014 UT App 86
¶15 Northgate also contends that the district court erred by
dismissing its equitable claims. We review the district court’s
dismissal of Northgate’s equitable claims for correctness, giving no
deference to the district court’s ruling. See State v. Hamilton, 2003
UT 22, ¶ 17, 70 P.3d 111.
ANALYSIS
I. Breach of Contract
¶16 Northgate contends that the district court erred by denying
its motion for partial summary judgment and granting the City’s
summary judgment motion. Northgate argues that the district
court erred when addressing the City’s opportunity-to-cure and
notice arguments, when interpreting the term “written action
plan,” and when defining the City’s contractual clean-up
obligations.
A. Notice and Opportunity to Cure
¶17 Northgate asserts that the district court erred when it
interpreted the Land Sale Contract “as requiring a written notice of
default” before the nondefaulting party pursued legal remedies.
Northgate maintains that oral notice satisfies the contract’s notice
requirement and that “Northgate orally notified [the City] of its
default each time Northgate discovered” a new cache of buried
debris.
¶18 The City responds that Northgate gave notice of default
only by letter on January 7, 2008. By that time, “Northgate had
already spent over $2,000,000 cleaning up debris.” Because “the
letter did not offer a right to cure,” the City maintains, “no cause of
action for breach accrued.” In the City’s view, Northgate’s oral
notice failed “to meet the specific elements” the Land Sale Contract
required.

Northgate Village v. Orem City
20120817-CA 8 2014 UT App 86
¶19 “In interpreting a contract, we look to the language of the
document to determine its meaning and the intent of the
contracting parties.” Encon Utah, LLC v. Fluor Ames Kraemer, LLC,
2009 UT 7, ¶ 15, 210 P.3d 263. “If the language within the four
corners of the contract is unambiguous,” a court determines the
parties’ intentions “from the plain meaning of the contractual
language, and the contract may be interpreted as a matter of law.”
Central Florida Invs., Inc. v. Parkwest Assocs., 2002 UT 3, ¶ 12, 40 P.3d
599.
¶20 But the law circumscribes a district court’s authority to
decide cases at the summary judgment stage. “Summary judgment
allows disposition before trial on issues on which there is no
genuine issue of material fact.” Hi-Country Prop. Rights Grp. v.
Emmer, 2013 UT 33, ¶ 37, 304 P.3d 851; see Utah R. Civ. P. 56(c).
Conversely, the presence of disputed material facts in the record
renders summary judgment inappropriate. Alliant Techsystems, Inc.
v. Salt Lake Bd. of Equalization, 2012 UT 4, ¶¶ 4, 31–32, 270 P.3d 441.
“A disputed fact is material if it affects the rights and liabilities of
the parties.” Id. ¶ 31 (citation and internal quotation marks
omitted).
¶21 The district court ruled that Northgate “gave formal notice
of default on January 7, 2008,” by sending a letter to the City—after
it “had already performed the clean up actions.” The district court
concluded that the timing of Northgate’s notice gave the City no
opportunity to cure its default and that, as a result, Northgate
“cannot collect on the $2,000,000+ bill.”
¶22 The Land Sale Contract does not require notice in a
particular form and does not rule out oral notice:
If any party is in default under this agreement for a
period of ninety (90) days following receipt of notice
from the non-defaulting party, then the non-
defaulting party may pursue any remedies available
to it against the defaulting party under applicable

Northgate Village v. Orem City
2. The City also argues that when Northgate did provide the City
with notice of default, that notice did not offer the City a “right to
cure.” In the City’s view, instead of allowing the City to cure by
cleaning up items described in the Clean-Up List, Northgate cured
the default itself and then sent the City the bill.
The terms of the contract freed Northgate to “pursue any
remedies available to it . . . under applicable law” once the notice
window closed. Accordingly, before a court can reach the question
of whether Northgate impermissibly rushed to excavate and bill
the City when it should have waited for the City to cure, the court
must first determine the notice date. Accordingly, because the
parties’ notice-date dispute remains unresolved, we do not reach
the City’s alternative opportunity-to-cure argument or any
responses to it.
20120817-CA 9 2014 UT App 86
law, including, but not limited to, specific
performance of this Agreement.
Record testimony indicates that Northgate may have provided the
City with oral notice of default well before January 7, 2008. One of
Northgate’s developers stated, “I believe every time we found
another major strike we contacted the City Manager’s office. I
know that I personally met with [the City Manager] at least a half
a dozen or more times.” One of those meetings between Northgate
and the City Manager took place in late 2005 or early 2006.
¶23 Because the language of the Land Sale Contract does not
require written notice, the record testimony regarding oral notice
in 2005 or 2006 creates a factual dispute. Northgate’s rights and
liabilities under the contract’s default provision hinge on when the
City received notice. The notice-date dispute is therefore material,
and the presence of disputed material facts makes summary
judgment on the opportunity-to-cure question inappropriate. See
Alliant Techsystems, 2012 UT 4, ¶¶ 4, 31–32. We therefore vacate the
district court’s determination that Northgate did not provide the
City with proper notice and an opportunity to cure.2

Northgate Village v. Orem City
3. The City also contends that by closing on the property,
Northgate “waived claims arising out of the environmental audit
as a matter of law.” “Waiver of a contractual right occurs when a
party to a contract intentionally acts in a manner inconsistent with
its contractual rights, and, as a result, prejudice accrues to the
opposing party . . . to the contract.” Mid-America Pipeline Co. v.
Four-Four, Inc., 2009 UT 43, ¶ 17, 216 P.3d 352. Because waiver is an
intensely fact-dependent question, IHC Health Servs., Inc. v. D & K
Mgmt., Inc., 2003 UT 5, ¶ 7, 73 P.3d 320, a “district court should
exercise care in granting summary judgment” in the waiver
context, IHC Health Servs., Inc. v. D & K Mgmt., Inc., 2008 UT 73,
¶ 18, 196 P.3d 588, particularly “‘if the inferences depend upon
subjective feelings or intent,’” Utah Basin Med. Ctr. v. Hardy, 2008
UT 15, ¶ 19, 179 P.3d 786 (quoting 73 Am. Jur. 2d Summary
Judgment § 46 (2001)). Though the district court mentioned the
(continued...)
20120817-CA 10 2014 UT App 86
B. The “Written Action Plan”
¶24 Section 4.3.2 of the Land Sale Contract requires the City “to
complete any environmental clean-up responsibilities specified in
the written action plan for the City Public Works Parcel.” North-
gate’s second breach-of-contract argument hinges on which
document the term “written action plan” refers to—the
Environmental Site Assessment or the Clean-Up List.
¶25 Northgate contends that the district court erred in
concluding that the term “written action plan” referred only to the
attached Clean-Up List and not to the Environmental Site
Assessment as well. Northgate maintains that the contract itself
designates the Environmental Site Assessment “as a means by
which Northgate may elect to cancel the agreement.” Northgate
also argues that the attached Clean-Up List unambiguously refers
to the Environmental Site Assessment. Thus, Northgate reasons, “it
is evident that the parties incorporated the contents of the
Environmental Site Assessment” into the Land Sale Contract. The
City responds that the district court correctly interpreted the
contract.3

Northgate Village v. Orem City
3. (...continued)
City’s waiver argument, waiver did not figure into the court’s
analysis. We agree with the district court’s approach. Given the
fact-dependent nature of the City’s waiver argument, the district
court properly excluded that argument from its summary
judgment analysis.
20120817-CA 11 2014 UT App 86
¶26 “[P]arties may incorporate the terms of another document
by reference into their contract.” Housing Auth. v. Snyder, 2002 UT
28, ¶ 19, 44 P.3d 724. But incorporation requires specificity: “the
reference must be clear and unequivocal.” Id. (citation and internal
quotation marks omitted).
¶27 Here, Northgate’s incorporation-by-reference argument
rests on two references to the Environmental Site Assessment, one
in the contract itself, the other in the attached Clean-Up List. The
contract mentions the Environmental Site Assessment in section
3.2.1.1, a provision that allows Northgate to rescind the sale if it
“finds the result of the environmental audit to be unacceptable.”
And a caption at the top of the Clean-Up List reads, “List of
Environmental Concerns or Recognized Environmental Conditions
from Phase I Environmental Site Assessment.”
¶28 These two references to the Environmental Site Assessment
do not satisfy the clear-and-unequivocal standard required for
incorporation by reference. The Environmental Site Assessment
appears in section 3.2.1.1 in the context of a pre-closing condition:
if the Environmental Site Assessment did not satisfy Northgate for
any reason, Northgate had the right to rescind the sale before
closing. A reference to the Environmental Site Assessment in a pre-
closing context does not incorporate the Environmental Site
Assessment as a checklist for the City’s post-closing clean-up
responsibilities.
¶29 Similarly, the Clean-Up List caption’s reference to the
Environmental Site Assessment does not incorporate the
Environmental Site Assessment into the Land Sale Contract. An
environmental-audit team used the Environmental Site Assessment

Northgate Village v. Orem City
20120817-CA 12 2014 UT App 86
to develop the Clean-Up List. But the very fact that only the Clean-
Up List was attached to the contract strongly suggests that the City
was contractually obligated to remedy only those items from the
Environmental Site Assessment that were also listed on the Clean-
Up List. The parties could have incorporated the Environmental
Site Assessment as the guide to the City’s post-closing clean-up
responsibilities by clearly and unequivocally referring to the
Environmental Site Assessment in the section of the contract that
described those responsibilities. But that section’s reference to a
“written action plan” does not clearly and unequivocally refer to
the Environmental Site Assessment.
¶30 Instead, the Land Sale Contract mentions the Environmental
Site Assessment only in the section of the contract dealing with pre-
closing contingencies. That solitary reference suggests that the
parties intended the Environmental Site Assessment and the Clean-
Up List to play separate and distinct roles in the purchase process.
The Environmental Site Assessment acted as an inspection, North-
gate’s approval of which was a condition precedent to closing. The
Clean-Up List acted as a punch list of items the City was required
to remedy after closing. In a separate contract provision, the City
assumed responsibility for taking the actions detailed in that
“written action plan.”
¶31 We affirm the district court’s determination that the Land
Sale Contract did not incorporate the Environmental Site
Assessment or Table 1.1, which is contained in the Environmental
Site Assessment. Accordingly, we agree that the Land Sale Contract
obligates the City “to perform only those clean-up actions listed in
the . . . Clean-Up List attached to the agreement.”
C. The City’s Clean-Up Obligations
¶32 Northgate argues that the district court incorrectly
interpreted the Clean-Up List. According to the district court’s
interpretation, the Clean-Up List required the City to clean up
buried transformers but allowed the City to resolve other
environmental issues by applying for “necessary permission to

Northgate Village v. Orem City
20120817-CA 13 2014 UT App 86
leave the debris and landfill” on site. Northgate describes that
interpretation as incongruent and implausible. In short, Northgate
reasons, “there is no legal or factual basis for the district court to
conclude that the [Land Sale Contract] obligated [the City] to
remove the buried transformers but not the other buried debris
identified as environmental concerns or conditions.”
¶33 The City responds that the Clean-Up List mentions only one
type of subsurface debris—the “buried electrical transformers.”
The City argues that the Land Sale Contract states that the City
“shall not be required to perform any filling or grading” and lacks
“an express contractual agreement to be responsible for subsurface
soil conditions.” Thus, the City concludes, the contract required it
to clean up only surface debris and one type of buried
material—the electrical transformers.
¶34 “A contractual term or provision is ambiguous if it is
capable of more than one reasonable interpretation because of
uncertain meanings of terms, missing terms, or other facial
deficiencies.” Daines v. Vincent, 2008 UT 51, ¶ 25, 190 P.3d 1269
(citation and internal quotation marks omitted). Contract-term
ambiguity exists only when the parties’ contrary positions are each
tenable. Plateau Mining Co. v. Utah Div. of State Lands & Forestry, 802
P.2d 720, 725 (Utah 1990).
¶35 The question of whether a contract contains facial ambiguity
requires the district court to make a legal determination. Daines,
2008 UT 51, ¶ 25. We review that determination for correctness.
Saleh v. Farmers Ins. Exch., 2006 UT 20, ¶ 14, 133 P.3d 428. But when
facial ambiguity exists and the competing interpretations both
enjoy evidentiary support, the parties’ intent becomes “a question
of fact to be determined by the jury.” Plateau Mining, 802 P.2d at
725. A district court may interpret contract terms at summary
judgment without reference to parol evidence “only when [the]
terms are complete, clear, and unambiguous.” Colonial Leasing Co.
of New England v. Larsen Bros. Constr. Co., 731 P.2d 483, 488 (Utah
1986).

Northgate Village v. Orem City
4. The Clean-Up List indicates that buried transformers may
contain polychlorinated biphenyls (PCBs). PCBs are a type of
Persistent Organic Pollutant (POP). See Persistent Organic Pollutants:
A Global Issue, a Global Response, EPA (July 30, 2012),
http://www.epa.gov/international/toxics/pop.html. Studies link
POPs to “reproductive, developmental, behavioral, neurologic,
endocrine, and immunologic adverse health effects.” Id.
20120817-CA 14 2014 UT App 86
¶36 Though the Land Sale Contract requires the City to perform
only the clean-up actions contained in the Clean-Up List, we agree
with Northgate that the Clean-Up List contains ambiguities.
Specifically, the Clean-Up List does not clearly indicate how the
City must deal with buried asphalt.
¶37 The district court determined that the Clean-Up List
required the City to remove buried electrical transformers.4
Accordingly, the district court required the City to reimburse
Northgate for the cost of removing the transformers. The district
court added that the remaining Clean-Up List requirements “relate
to permitting” and that the City “received the necessary permission
to leave the debris and landfill.” One item on the Clean-Up List
reads, “Landfill operations—burial of asphalt materials—Check
permitting & closure requirements including Coordination with
State of Utah Division of Solid & Hazardous Waste.” But in the
section of the Clean-Up List describing the City’s clean-up
responsibilities in the “Soil Borrow & Landfill Area,” there are
three entries:
1. Landfilling construction materials with pieces of
asphalt
2. Permit required for continued landfilling
3. Site assessment and application required for
closure of site
Northgate and the City ascribe contrary meanings to this section of
the Clean-Up List. In the City’s view, the first and second entries
should be read together, allowing the City to fulfill its obligation to
clean up the asphalt by simply applying for and receiving proper

Northgate Village v. Orem City
5. Buried asphalt presents an environmental hazard. “Asphalt
binder is the product of the distillation of crude oil in petroleum
refining.” Paulo R.N. Fernandes et al., Evaluation of Polycyclic
Aromatic Hydrocarbons in Asphalt Binder Using Matrix Solid-Phase
Dispersion and Gas Chromatography, 47 J. Chromatographic Sci. 789,
789 (2009), available at http://chromsci.oxfordjournals.org/content/
47/9/789.full.pdf. The production and degradation of asphalt may
release polycyclic aromatic hydrocarbons (PAHs) which, like the
PCBs found in buried transformers, “form part of the group of
compounds known as persistent organic pollutants (POPs).” Id. at
790. In addition to the health effects of POPs listed above, see supra
¶ 37 n.4, studies reveal a possible link between PAHs and cancer,
and “there is a relation between carcinogenesis and the molecular
structure of PAHs.” See Fernandes et al., supra, at 789.
20120817-CA 15 2014 UT App 86
permits. In Northgate’s view, the first and second entries impose
separate requirements: the City must clean up the “construction
materials with pieces of asphalt” and must also apply for and
receive permits for any continued landfilling.5
¶38 Both the City’s reading and Northgate’s are plausible.
Consequently, without reference to parol evidence of the parties’
intent, we see no way to select one reading of the asphalt provision
over the other. See Plateau Mining, 802 P.2d at 725. The Land Sale
Contract therefore contains a facial ambiguity, and resolving this
facial contract ambiguity requires evidence of the parties’ intent.
See id. Because “the intent of the parties is a question of fact to be
determined by the jury,” the district court erred by determining at
summary judgment that the City could fulfill its asphalt clean-up
responsibilities by securing the proper permits. See id. We therefore
vacate the district court’s determination on this issue.
¶39 The parties’ intent with respect to the City’s asphalt clean-up
responsibilities thus presents a question of fact for the fact-finder.
In addition, as explained in Part I.A, a factual dispute remains as to
when Northgate gave the City notice of a breach. So while we
affirm the district court’s determination that the Clean-Up List
defines the City’s contractual clean-up obligations, we reverse the

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20120817-CA 16 2014 UT App 86
district court’s grant of summary judgment to the City on
Northgate’s breach-of-contract claim and remand to allow the fact-
finder to determine the parties’ intent with respect to these issues.
II. Breach of the Covenant of Good Faith and Fair Dealing
¶40 Northgate next contends that the district court erred in
concluding that the City had not breached its implied covenant of
good faith and fair dealing. Northgate reasons that the implied
covenant barred the City “from taking any action that would
interfere with Northgate’s ability to receive [government
redevelopment] funds.” In Northgate’s view, the City breached the
implied covenant “when it unilaterally overruled [agency]
approval of Northgate’s application and refused to provide the
[redevelopment] funds to Northgate.”
¶41 The City responds that it “had no legal obligation
whatsoever to assure that Northgate” obtained redevelopment
funds. Section 3.2.4 of the Land Sale Contract states that the City
“cannot make any representations to Northgate as to whether
Northgate will receive [redevelopment] funds.” The City argues
that to qualify for the funds, Northgate “would have needed to
commit to create at least one job for each $35,000” of
redevelopment funding it received. Northgate “could not or would
not” make that commitment, “and therefore it did not qualify for
the federal money.” The City concludes that Northgate’s failure to
receive funds “is a self-inflicted wound.”
¶42 The implied covenant of good faith and fair dealing “infer[s]
as a term of every contract a duty to perform in the good faith
manner that the parties surely would have agreed to if they had
foreseen and addressed the circumstances giving rise to their
dispute.” Young Living Essential Oils, LC v. Marin, 2011 UT 64, ¶ 8,
266 P.3d 814. As a natural consequence, “[n]o such covenant may
be invoked . . . if it would create obligations ‘inconsistent with
express contractual terms.’” Id. ¶ 10 (quoting Oakwood Village LLC
v. Albertsons, Inc., 2004 UT 101, ¶ 45, 104 P.3d 1226).

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20120817-CA 17 2014 UT App 86
¶43 Invoking the covenant of good faith and fair dealing on this
record would create the type of inconsistency Young Living forbids.
Had the Land Sale Contract been silent as to the City’s obligations
regarding the government redevelopment funds Northgate sought,
Northgate’s implied-covenant claim would be plausible. But here,
we need not speculate about what “the parties surely would have
agreed to if they had foreseen and addressed” the City’s role in the
redevelopment-fund application process. The parties foresaw the
City’s involvement and addressed the issue by including a
disclaimer: “The City cannot make any representations to North-
gate as to whether Northgate will receive these [government
redevelopment] funds.” Given this contract term, we cannot imply
a representation that Northgate will receive the funds provided
certain conditions are met.
¶44 Northgate urges us to conclude that the implied covenant of
good faith and fair dealing barred the City from taking any action
that impeded Northgate’s pursuit for redevelopment funds.
Because the City played an intermediary role in the
redevelopment-fund application process, Northgate’s preferred
approach would have obligated the City to endorse Northgate’s
application so long as the other relevant agencies agreed that the
application was meritorious. However, given the City’s express
disclaimer with respect to the availability of the funds, to read the
provision as requiring the City to approve the application if certain
other conditions were satisfied would require us to imply a
contractual term at odds with a term agreed upon by the parties.
¶45 Furthermore, Northgate points to no evidence that the City,
by denying Northgate’s application for redevelopment funds,
intended to “destroy or injure” Northgate’s “right to receive the
fruits of the contract.” Oakwood Village, 2004 UT 101, ¶ 43. To the
contrary, the record here supports the City’s assertion that it
denied Northgate’s application through its ordinary deliberative
process. Accordingly, we see no basis to invoke the implied
covenant here. Young Living, 2011 UT 64, ¶ 10.
¶46 We therefore affirm the district court’s summary judgment
in favor of the City on Northgate’s claim for breach of the implied

Northgate Village v. Orem City
20120817-CA 18 2014 UT App 86
covenant of good faith and fair dealing with respect to
redevelopment funds.
III. Equitable Claims
¶47 Finally, Northgate contends that the district court erred by
dismissing its equitable claims. Northgate maintains that “it is
improper to dismiss an unjust enrichment or equitable restitution
claim at the pleading stage merely because a contract claim has
been pleaded in the alternative.” The City responds that because
the parties addressed their rights and remedies by contract,
“alternative equitable claims have no place in the complaint.”
¶48 Our rules of civil procedure do not limit the number of
claims or defenses a party may plead. Utah R. Civ. P. 8(e). The
parties’ freedom at the pleading stage applies regardless of the
pleaded claims’ consistency or the fact that some claims are based
on legal grounds and others on equitable grounds. Id. But at later
stages of the proceeding, consistency requirements limit the
freedom the parties enjoyed at the pleading stage.
¶49 “[R]estitution and unjust enrichment are remedies found in
quantum meruit.” TruGreen Cos. v. Mower Bros., Inc., 2008 UT 81,
¶ 18, 199 P.3d 929. And “[r]ecovery under quantum meruit
presupposes that no enforceable written or oral contract exists.”
Davies v. Olson, 746 P.2d 264, 268 (Utah Ct. App. 1987). Therefore,
as the federal district court for the Northern District of Georgia
explained, though the parties “may raise alternative theories on
breach of contract and quantum meruit at the pleading stage, once
the court has determined that a valid contract governed the parties’
relationship, that generally precludes a quantum meruit claim.”
Importers Serv. Corp. v. GP Chems. Equity, LLC, 652 F. Supp. 2d 1292,
1303 (N.D. Ga. 2009). Similarly, the federal district court for the
Eastern District of Pennsylvania approved the dismissal of a
quantum meruit claim when the parties did not dispute that a
contract existed and the “scope of the contract” included the
transaction that was “the basis for the quantum meruit claim.”
Philadelphia Hous. Auth. v. CedarCrestone, Inc., 562 F. Supp. 2d 653,
656 (E.D. Pa. 2008). In short, though the parties are free to plead

Northgate Village v. Orem City
20120817-CA 19 2014 UT App 86
equitable claims in contract cases, a court may dismiss quantum
meruit claims if it later concludes that an enforceable contract exists
and governs the subject matter of the dispute.
¶50 At the outset of litigation, whether an enforceable contract
exists or whether a contract covers the parties’ dispute may be
unclear. Because a claim should be dismissed only if “it appears to
a certainty that the plaintiff would be entitled to no relief under any
state of facts which could be proved in support of the claim,” a
district court should not dismiss alternative equitable claims if the
existence or applicability of a contract remain in dispute. See Mack
v. Utah State Dep’t of Commerce, 2009 UT 47, ¶ 17, 221 P.3d 194
(citation and internal quotation marks omitted).
¶51 For these reasons, the district court arguably acted
prematurely by dismissing Northgate’s equitable claims at the
pleading stage. But we disregard any error unless it affects the
substantial rights of the parties. Utah R. Civ. P. 61. “If the error was
sufficiently inconsequential that there is no reasonable likelihood
that it affected the outcome of the case, then a reversal is not in
order.” Price v. Armour, 949 P.2d 1251, 1255 (Utah 1997). We
therefore need not determine whether the district court erred in
dismissing Northgate’s alternative equitable claims at the pleading
stage, because any error in that ruling was ultimately cured.
¶52 Through its equitable claims, Northgate seeks compensation
for excavation and disposal of landfilled materials on the Public
Works Parcel. But Northgate and the City allocated responsibility
for excavation and disposal in the Land Sale Contract. Nothing in
the record suggests that the Land Sale Contract is unenforceable.
And the Land Sale Contract squarely governs the subject matter of
this dispute: who bears the responsibility for excavating and
disposing of the landfilled materials.
¶53 Northgate maintains that it may have prevailed on its
equitable claims “in the event the district court determined that the
parties did not reach a meeting of the minds or that [the City] made
a separate representation regarding the clean-up.” But Northgate
offers no evidence that the parties did not reach a meeting of the

Northgate Village v. Orem City
6. Northgate emphasizes the result of the “public policy” it
invokes—the policy would hold the City responsible for “its
continued and repeated violations of the law.” But Northgate does
not indicate what accepted policy demands that result, and aside
from the federal cases distinguished here offers no authority
supporting its position.
20120817-CA 20 2014 UT App 86
minds or that the City made extra-contractual clean-up
representations.
¶54 Northgate also argues that “regardless of the enforceability
or scope” of the Land Sale Contract, “public policy and principles
of equity” render its equitable claims actionable. In support of this6
policy argument, Northgate cites two cases. In the first, Moore v.
Texaco, Inc., the plaintiff sought to recover under an unjust-enrich-
ment theory because he had performed the defendant’s “statutory
duty to remediate pollution.” 244 F.3d 1229, 1233 (10th Cir. 2001).
In the second, Ergon, Inc. v. Amoco Oil Co., the plaintiff sought to
recover clean-up costs under an unjust-enrichment theory in the
absence of a contract allocating clean-up responsibility. 966 F.
Supp. 577, 586 (W.D. Tenn. 1997). Neither case involved granting
equitable relief unavailable under a contract governing the same
subject matter. Accordingly, Northgate has failed to demonstrate
that the outcome of this case would have been different if the
district court had not dismissed its equitable claims prematurely.
See Price, 949 P.2d at 1255. We therefore affirm the district court’s
dismissal of Northgate’s unjust-enrichment and restitution claims.
CONCLUSION
¶55 We vacate the district court’s ruling on the opportunity-to-
cure issue, but we affirm the district court’s determination that the
Land Sale Contract did not incorporate the Environmental Site
Assessment or Table 1.1. Because we recognize facial ambiguities
in the Clean-Up List, we vacate the district court’s determination
that the City satisfied its clean-up obligations. We reverse the
district court’s grant of summary judgment and remand to allow

Northgate Village v. Orem City
20120817-CA 21 2014 UT App 86
the district court to hear evidence regarding the parties’ intent with
respect to asphalt clean-up and, if necessary, evidence of when
Northgate provided the City with oral notice of a breach. Finally,
we affirm the district court’s summary judgment ruling that the
City did not breach the implied covenant of good faith and fair
dealing and affirm the district court’s dismissal of Northgate’s
alternative equitable claims.