Capozzoli v. Madden

2024 UT App 176

THE UTAH COURT OF APPEALS

KRISTEN E. CAPOZZOLI, ET AL., ∗
Appellees,
v.
CORALE C. MADDEN,
Appellant.

Opinion
No. 20230188-CA
Filed December 5, 2024

Third District Court, Salt Lake Department
The Honorable Richard D. McKelvie
No. 200905204

Dennis M. Holmgren and Jake Hinkins,
Attorneys for Appellant
T Carter Maudsley, Attorney for Appellees

JUDGE RYAN D. TENNEY authored this Opinion, in which
JUDGES GREGORY K. ORME and JOHN D. LUTHY concurred.

TENNEY, Judge:

¶1 In the summer of 2020, Kristen Capozzoli purchased a
house from Corale Madden. After signing the Real Estate
Purchase Contract (REPC), Capozzoli discovered that a leak had
caused water damage to several rooms in the house. When
Madden refused to pay the repair costs, Capozzoli sued Madden
for breach of contract. In response, Madden filed counterclaims
for fraud and negligent misrepresentation against Capozzoli,
claiming that Capozzoli had lied to Madden in a letter she wrote
asking Madden to sell the house to her. In conjunction with the

∗ Additional Appellees include the third-party defendants Gerrit

Capozzoli (also known as Gerrit Bursma), Staci Carlston, and
Summit Sotheby’s Realty.
Capozzoli v. Madden

counterclaims, Madden also filed third-party claims against
Capozzoli’s husband, real estate agent, and brokerage.

¶2 The district court granted Capozzoli’s motion to dismiss
Madden’s counterclaims and third-party claims. After Madden
stipulated to liability on the breach of contract claims, the court
held a bench trial on the question of damages. At the close of trial,
the court awarded Capozzoli most of her requested damages. The
court also concluded that Capozzoli was the prevailing party, so
it granted her request for attorney fees.

¶3 Madden raises three issues on appeal. For the reasons set
forth below, we:

• affirm the damages award that the district court entered
on Capozzoli’s breach of contract claim;

• reverse the district court’s dismissal of Madden’s
counterclaims and third-party claims; and

• vacate the district court’s award of attorney fees.

BACKGROUND

The Water Damage and Restoration Estimate

¶4 When Madden’s mother passed away in 2019, Madden
inherited the house (the House) that her mother had owned in
Midvale, Utah. Madden’s aunt lived in the House until the next
year, at which point Madden decided to sell it.

¶5 Within a short time of listing the House for sale, Madden
received “[a]bout six” offers. One was from Capozzoli, and that
offer included a personal letter (the Letter) in which Capozzoli
encouraged Madden to accept her offer over others. In the Letter,
Capozzoli wrote, on behalf of herself and her husband (Husband):

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Capozzoli v. Madden

We don’t just want to buy a house. We’re trying to
build a home. We are asking you to consider our
offer and not only the love we have for each other
but the love that we will fill this home with. We
want to open up the kitchen so that the living room
and kitchen feel like one; the center of our home. A
place where we can entertain our family and catch
our kids sneaking snacks after bedtime. We want
[to] build a garden in the back yard so my little girl
can help me play in the dirt as I did with my mom
growing up. We want to put a big couch in front of
the living room window so that our dogs can watch
the world go by. Downstairs, we want to open the
fireplace that has been sheet rocked over so on cold
winter days we can all cuddle up and watch movies
in a pile of kids and dogs and blankets. 1

¶6 Madden accepted Capozzoli’s offer. According to the
allegations Madden later made in her counterclaim, Madden was
persuaded to do so by the Letter. More specifically, Madden
alleged that it mattered to her that Capozzoli wrote that she and
Husband “were going to renovate and make [the House] their
own,” because Madden wanted to sell the House “as is.”

¶7 The parties eventually agreed to and signed the REPC.
That agreement obligated Madden to deliver the House to

1. The Letter uses the pronoun “we” to refer to Capozzoli and
Husband, but there are indications that Capozzoli was primarily
responsible for writing the Letter. As will be explained below,
Madden ultimately sued both Capozzoli and Husband for the
statements made in the Letter. For ease of reference, we’ll
nevertheless refer to the Letter as if Capozzoli wrote it on behalf
of both herself and Husband. We also note that Husband was not
a signatory to the ensuing REPC, nor was he a plaintiff in the
initial complaint that Capozzoli filed below.

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Capozzoli v. Madden

Capozzoli “in substantially the same general condition as it was
on the date of [a]cceptance.” It also provided that “[i]n the event
of litigation or binding arbitration arising out of the transaction
contemplated by the REPC, the prevailing party shall be entitled
to costs and reasonable attorney fees.”

¶8 About a week and a half after Capozzoli signed the REPC,
Capozzoli had the House inspected. The inspection report listed
several items that needed repair, including the water heater.
Madden soon agreed to some concessions, mostly relating to an
issue that was discovered with the electrical panel, but she did not
agree to cover the cost of a new water heater.

¶9 Capozzoli did not attend the final walk-through of the
House before closing. But Capozzoli did check in with her real
estate agent (Agent), who had attended the final walk-through.
Agent informed Capozzoli that there was “a small leak,” that
Madden had “a handyman coming out,” and “that it would be
covered and taken care of by [Madden].”

¶10 On July 14, 2020, Capozzoli signed the closing documents.
Later that day, Agent notified Capozzoli that the “damage was
substantially worse” than they had expected and advised her “to
withhold on recordings.” Capozzoli and Husband went to the
House “to see what was going on.” At the House, they found
“saturated bath towels” in the laundry room and basement, “a
soft spot in front of the pantry” where “the subfloor was basically
starting to give way,” “splintering” and “bowing” in the wood
flooring in the spare bedroom, and remnants of an eight-to-ten-
foot puddle in the basement utility room. The district court later
found that “[s]ometime between the date the contract was
completed and the date of closing, [Madden’s] aunt removed the
washer and dryer from the home, and in the process apparently
left a supply hose to the washer partially open, creating a leak,”
thus causing “substantial damage.”

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Capozzoli v. Madden

¶11 On July 15, Capozzoli authorized the release of funds and
completed the closing, despite being told that she could delay
funding. Capozzoli later explained that she chose to move
forward based on assurances from both parties’ agents that
Madden would “absolutely” cover the damage, as well as her
own concerns about potentially losing her earnest money and
being sued for breach of contract if she did not complete the
closing.

¶12 By this point, Capozzoli had already hired a restoration
company (the Restoration Company), and an estimator (the
Estimator) from the Restoration Company met her at the House
that same day to assess the damage. Using a moisture meter, the
Estimator detected water in the floors and walls in and around the
laundry room, the pantry, a hallway, a bedroom, and the
basement utility room. The Estimator gave Capozzoli a bid for
what he thought was the necessary mitigation and restoration
work, which totaled $8,655.48. The bid included costs for labor
and materials, including installing new tile in the laundry room,
sanding and refinishing the damaged wood in the bedroom, and
replacing the contiguous flooring on the main level of the House.
The bid also included the cost of a new water heater ($1,135.41),
which was added to the bid after Husband tried to shower and
discovered it wasn’t working.

¶13 Concerned about their ability to live in the House while the
repairs were being done, Capozzoli and Husband went back to
the duplex that they had been living in and spoke with their
landlord. The landlord told them that he would keep their
security deposit and that they could stay as long as needed.

¶14 At this point, Capozzoli realized that it “was not going to
be as simple as [Madden] filing an insurance claim,” so she asked
the Restoration Company to stop further mitigation and
restoration work. Capozzoli paid the Restoration Company
$1,511.83 for the mitigation work it had already done to dry out

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Capozzoli v. Madden

the water. Capozzoli then asked Madden to pay the full amount
that the Restoration Company had estimated it would cost to
repair the damages—$8,655.48. Madden refused to do so.

Capozzoli’s Suit and the Dismissal of Madden’s Counterclaims

¶15 Capozzoli sued Madden for breach of contract. Capozzoli
requested damages relating to the repair costs to the House, the
loss of use of the House, and the utilities paid while the
House was uninhabitable. Capozzoli also requested her attorney
fees.

¶16 Madden answered the complaint. As part of her answer,
Madden also filed counterclaims against Capozzoli, as well as
identical third-party causes of action against Husband, for fraud
and negligent misrepresentation, alleging that they had
“represented” to Madden that they “intended to make major
renovations to the [House],” that they “knew that their
representations were false,” and that Madden “rel[ied] upon
the representation without knowledge of its falsity.” Madden
also filed third-party complaints against Agent and her
brokerage for negligence and vicarious liability. Madden
alleged that Agent “breached her duties” “to be honest,
ethical and comparable” by being “careless or negligent in
connection with the communication and transmission of the
[Letter] or failure to communicate [Capozzoli and Husband’s]
true intent.” Madden alleged that because Agent was employed
by brokerage, the brokerage was “liable for all of the acts and
conduct of [Agent].”

¶17 The counterclaim and third-party defendants (i.e.,
Capozzoli, Husband, Agent, and the brokerage) later filed a joint
motion to dismiss Madden’s claims under rule 12(b)(6) of the
Utah Rules of Civil Procedure, arguing that Madden had failed to
state a claim upon which relief could be granted on any of her
claims. On the fraud claims against Capozzoli and Husband, they
argued that the alleged conduct did not amount to fraud because

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Capozzoli v. Madden

Madden could not show that Capozzoli’s statements in the Letter
“were made concerning a presently existing fact.” On the
negligent misrepresentation claim, they argued it was barred by
the merger doctrine. Finally, they argued that the negligence and
vicarious liability claims against Agent and the brokerage failed
because the claims were dependent on the negligent
misrepresentation claims that, in their view, also failed as a matter
of law.

¶18 After receiving an opposition from Madden, the district
court issued a written decision granting the motion to dismiss.
The court ruled that the statements that Capozzoli (and, arguably,
Husband) made in the Letter “were not promises of any future
performance that could be relied upon by Madden” and likewise
“were not representations that could be relied upon by Madden.”
For this reason, the court ruled that the fraud and negligent
misrepresentation claims both failed as a matter of law. The court
then ruled that, “[b]ecause the statements transmitted to
Madden” by Agent were “not actionable,” Agent’s “actions were
not negligent,” so “Madden’s cause of action against [Agent]
fail[ed] as a matter of law.” For similar reasons, the court ruled
that there was no basis for imposing vicarious liability on the
brokerage.

The Damages Trial and Award

¶19 A few months later, Capozzoli filed a motion for partial
summary judgment on her breach of contract claim. Shortly
thereafter, the parties stipulated that Madden had breached the
REPC. The only issue left for trial was damages.

¶20 At a subsequent bench trial on the question of damages,
Capozzoli sought four types of damages:

• $1,511.83 for the mitigation work already performed by
the Restoration Company and paid for by Capozzoli;

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Capozzoli v. Madden

• $10,918.44 for the Restoration Company’s unperformed
bid prepared by the Estimator; 2

• $1,000 for the rent she paid while the House was, in her
view, uninhabitable; and

• “costs and reasonable attorney fees” contemplated by the
REPC.

¶21 Although the Restoration Company had not performed the
work detailed in the bid by the time of trial, Capozzoli
acknowledged in her testimony that she and Husband had done
some work on the House themselves in the meantime—namely,
repainting walls and replacing flooring. But she insisted that this
work was merely “a temporary Band-Aid” to make the House
livable in the short term and that this work was not intended to
be “in lieu of” the long-term restoration work detailed in the
Restoration Company’s bid.

¶22 Capozzoli and the Estimator also each testified about the
work that would be needed to return the House to the condition
it was in at the time of acceptance, including sanding and
refinishing the hardwood flooring in the spare bedroom;
installing new flooring in the hallway, pantry, and laundry room;
removing and replacing the drywall in the laundry room; and
replacing the contiguous laminate flooring in the main level of the
house to ensure it matched.

¶23 In her arguments to the court, Madden did not object to
Capozzoli’s request for $1,511.83 in damages relating to the

2. This amount differs from the amount given in the initial
estimate that we previously noted in paragraph 12. While the
record is somewhat unclear on this point, it appears that
Capozzoli had received a higher bid from the Restoration
Company in the interim and sought damages reflective of that
higher amount.

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Capozzoli v. Madden

Restoration Company’s “actual work” in mitigating the water
damage. Madden did, however, object to the rest of the requested
damages. She agreed that the costs to sand and refinish the wood
floor in the spare bedroom, which constituted $620.10, would
qualify as restoration, but she argued that Capozzoli had not
carried her burden of showing that such measures were
necessary. Madden also objected to damages related to a new
water heater, as well as damages for new flooring throughout the
kitchen and living room because it was more akin to renovation
than restoration. And Madden further argued that Capozzoli had
failed to satisfy her burden of proof as to the amount requested
for rent reimbursement.

¶24 The district court subsequently issued a written decision in
which it awarded Capozzoli $9,031.90 in damages. The court
awarded damages for the previously performed mitigation work
and the unperformed restoration bid. But it did not award
damages for the new water heater ($1,135.41), concluding that the
original one had “exceeded its life expectancy” anyway and
noting that this had been “brought to the attention of the parties
during the home inspection.” The court also did not order
damages for the cost of rent reimbursement ($1,000), concluding
that Capozzoli “did not bear her burden of proving that the
duration was consistent with the amount of time [that] mere
restoration, as opposed to remodeling would have taken.” Finally,
the court ordered Madden to pay $19,797.55 in attorney fees,
concluding that Capozzoli was the prevailing party in the case. 3

3. In her post-trial filings, Capozzoli requested $19,797.55 in fees,
and in her reply to an opposition from Madden, Capozzoli
explained that this amount did not include any fees incurred on
behalf of Agent or the brokerage. Though a touch unclear, there’s
also no indication that Capozzoli’s request included fees incurred
defending Husband against the third-party claims that Madden
(continued…)

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Capozzoli v. Madden

ISSUES AND STANDARDS OF REVIEW

¶25 Madden raises three issues on appeal. First, Madden
argues that the evidence was insufficient to support the district
court’s damages award. In furtherance of this claim, Madden
challenges several of the district court’s factual findings as being
clearly erroneous. “When reviewing a challenge to the sufficiency
of the evidence, we will not set aside a trial court’s factual findings
unless clearly erroneous, giving due regard to the trial court’s
opportunity to judge the credibility of the witnesses.” Shuman v.
Shuman, 2017 UT App 192, ¶ 3, 406 P.3d 258 (quotation
simplified). A finding is clearly erroneous when it is “against the
clear weight of the evidence” or otherwise leaves us with a “firm
conviction that a mistake has been made.” Lundahl Farms LLC v.
Nielsen, 2021 UT App 146, ¶ 40, 504 P.3d 735 (quotation
simplified). “But a finding is not clearly erroneous if, viewing the
evidence in the light most favorable to the trial court’s findings,
the evidence is legally sufficient to support the finding.” Id.
(quotation simplified).

¶26 Second, Madden argues that the district court erred in
dismissing her counterclaims and third-party claims. “We review
a decision granting a motion to dismiss for correctness, granting
no deference to the decision of the district court.” Miller v. Miller,
2020 UT App 171, ¶ 10, 480 P.3d 341 (quotation simplified). “We
likewise review the district court’s subsidiary legal
determinations for correctness.” Id. (quotation simplified).

¶27 Finally, Madden claims that the district court erred in
awarding Capozzoli attorney fees. “Whether the district court
applied the correct legal standard is a question of law, which we
review for correctness. But whether a party is the prevailing party
in an action is a decision left to the sound discretion of the trial

brought against him. As noted, the district court awarded
Capozzoli the exact amount she requested.

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Capozzoli v. Madden

court and reviewed for an abuse of discretion.” Wihongi v. Catania
SFH LLC, 2020 UT App 109, ¶ 7, 472 P.3d 308 (quotation
simplified).

ANALYSIS

I. Damages Award

¶28 Under the REPC, Madden was obligated to provide
Capozzoli with a house that was “in substantially the same
general condition as it was on the date of [a]cceptance.” Because
Madden stipulated that she had breached that provision of the
REPC, the question presented to the court in the damages trial
was how much it would cost to restore the House to that
condition. After hearing the evidence, the court awarded
Capozzoli $9,031.90 in damages. Madden now challenges that
award, claiming there was insufficient evidence to support it. We
disagree with Madden’s arguments.

¶29 As noted, “we will not reverse a finding made by the trial
court unless it is clearly erroneous,” meaning it is “against the
clear weight of the evidence” or otherwise convinces us “that a
mistake has been made.” Lundahl Farms LLC v. Nielsen, 2021 UT
App 146, ¶ 40, 504 P.3d 735 (quotation simplified); see also Utah R.
Civ. P. 52(a)(4). In past cases, our courts have held that a district
court can rely on estimates in awarding damages if the estimate is
“the most direct, practical and accurate method that can be
employed.” Traco Steel Erectors, Inc. v. Comtrol, Inc., 2009 UT 81,
¶ 24, 222 P.3d 1164 (quotation simplified); see also Hale v. Big H
Constr., Inc., 2012 UT App 283, ¶ 24, 288 P.3d 1046 (rejecting a
plaintiff’s challenge to a defendant’s “use of estimates and
averages” to establish damages in light of Traco).

¶30 Here, the damages award was supported by the
testimonies of both Capozzoli and the Estimator. From these
witnesses, the district court heard evidence that the following

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Capozzoli v. Madden

work needed to be done to restore the House to its original
condition:

• the flooring in the bedroom needed to be sanded and
refinished;

• new flooring was needed in the hallway, pantry, and
laundry room;

• the contiguous laminate flooring on the main level of the
House needed to be replaced to ensure it all matched, and
the court further heard that this practice is consistent with
“insurance protocols”; and

• the drywall in the laundry room needed to be removed
and replaced.

The court heard evidence that the Restoration Company
estimated that the above work would cost $7,520.07 to perform. 4
Separate from this restoration work, the court also heard that
Capozzoli had paid $1,511.83 to the Restoration Company for the
mitigation work that it had completed to dry out the water. As a
result, it had a basis for awarding $9,031.90 in damages.

¶31 Despite this evidence, Madden offers three principal
arguments for why she believes the evidence was insufficient to
support the district court’s damages award. We find none of them
persuasive.

¶32 First, Madden argues that two of the subsidiary findings
that the court made in its ruling were clearly erroneous—namely,
that (i) the damage was “primarily to the kitchen” and (ii) the
House was rendered “uninhabitable” by the water damage. In

4. As noted, the initial estimate was for $8,655.48, but this included
$1,135.41 for the water heater, which the court declined to include
in its damages award.

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Capozzoli v. Madden

Madden’s view, these were “foundational facts.” Because of this,
Madden argues that the court’s entire damages ruling should be
invalidated.

¶33 Having carefully reviewed the record and the district
court’s ruling, it’s somewhat unclear to us why the court wrote
that the damage was “primarily to the kitchen.” After all, the court
heard detailed evidence about the nature of the damage, that
evidence cataloged damage that was done throughout the House
on a room-by-room basis, and that evidence demonstrated that
most of the damage was done to other rooms. In light of this, it
seems that the word “primarily” was something of a stray
adjective. But under well-accepted harmless error standards, we
don’t reverse rulings unless there is a “reasonable likelihood that
the error affected the outcome of the proceedings.” Covey v. Covey,
2003 UT App 380, ¶ 21, 80 P.3d 553 (quotation simplified). And
here, in light of the specific evidence presented at trial about the
various places in the House that were damaged, we see no basis
for concluding that this particular adjective was “foundational” to
the court’s decision, much less that this word provides reason to
invalidate the court’s overall damages award.

¶34 We reach a similar conclusion with respect to the court’s
finding that the damage rendered the House “uninhabitable.” On
appeal, the parties dispute whether the water damage actually did
render the House uninhabitable. But we have no need to decide
whether the court’s conclusion was unsupportable. As noted, the
district court rejected Capozzoli’s request for rent reimbursement
as part of the damages award. As a result, it seems that this
finding had no impact on that award, and Madden therefore has
not persuaded us that the alleged problems with this particular
finding provide any basis for invalidating it.

¶35 Second, Madden argues that because Capozzoli testified
that she and Husband had repaired some of the damage to the
House themselves, and because Capozzoli failed to provide an

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Capozzoli v. Madden

amount of the costs they incurred in conjunction with that work,
the damages awarded for restoration should be vacated. But
Capozzoli insisted several times in her testimony that the work
that she and Husband did was merely “a temporary Band-Aid”
and that it was not intended to be “in lieu of” the work detailed
in the Restoration Company’s bid. Further expounding on this,
she explained:

I love my husband very much, but he is an
inexperienced handyman laying down a very cheap
flooring, and he did a very subpar job. So that cheap
flooring is already peeling up and falling apart, and
it was — it was definitely a Band-Aid at the end of
its life.

The district court appears to have credited Capozzoli’s testimony.
Given this testimony, the court thus had a sufficient evidentiary
basis for ordering damages based on the Restoration Company’s
bid, as opposed to limiting the damages to the expenses incurred
by Capozzoli and Husband.

¶36 Third, Madden argues that the district court erred in
finding Capozzoli’s testimony credible. In support of this
argument, Madden points to a relatively small number of
inconsistencies—both within Capozzoli’s testimony, as well as
between Capozzoli’s testimony and other evidence presented at
trial. “But it is the province of the trier of fact to assess the
credibility of witnesses, and we will not second-guess the trial
court where there is a reasonable basis to support its findings.”
Merrill v. Merrill, 2024 UT App 125, ¶ 37, 556 P.3d 1070 (quotation
simplified). Moreover, the presence of “contradictory evidence is
generally not sufficient to overturn a verdict, because the
factfinder determines which evidence to believe when conflicting
evidence is presented.” Layton City v. Carr, 2014 UT App 227, ¶ 10,
336 P.3d 587. And when a district court evaluates witness
credibility in a bench trial, the “mere existence of inconsistencies

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is not a sufficient basis to question credibility determinations.”
State v. Davie, 2011 UT App 380, ¶ 20, 264 P.3d 770.

¶37 We’ve reviewed both Madden’s arguments and the record
regarding the inconsistencies in question. In our view, the alleged
inconsistencies were all about relatively minor or peripheral
issues, and some of them were explainable anyway by the two-
year gap between the events in question and the trial. Regardless,
even with these issues, there was still a reasonable basis for the
district court to find Capozzoli’s testimony about the sequence of
events and the overall damages to be credible. Madden therefore
has not persuaded us that these inconsistencies were such that the
court was required to disregard Capozzoli’s testimony.

¶38 In short, we are not persuaded that any of the findings
Madden challenges on appeal are either clearly erroneous or
prejudicial in nature. We therefore conclude that there was
sufficient evidence to support the damages award.

II. Counterclaims and Third-Party Claims

¶39 As indicated, Madden brought counterclaims for fraud
and negligent misrepresentation against Capozzoli, as well as
identical third-party claims against Husband. Madden also
brought third-party claims against Agent and her brokerage for
negligence and vicarious liability, with those claims largely
hinging on the claims asserted against Capozzoli and Husband.

¶40 The elements of fraud are:

(1) a representation; (2) concerning a presently
existing material fact; (3) which was false; (4) which
the representor either (a) knew to be false, or (b)
made recklessly, knowing that [the representor] had
insufficient knowledge upon which to base such
representation; (5) for the purpose of inducing the
other party to act upon it; (6) that the other party,

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acting reasonably and in ignorance of its falsity; (7)
did in fact rely upon it; (8) and was thereby induced
to act; (9) to [the other party’s] injury and damage.

Larsen v. Exclusive Cars, Inc., 2004 UT App 259, ¶ 7, 97 P.3d 714
(quotation simplified). The “elements of negligent
misrepresentation are similar to those of fraud except that
negligent misrepresentation does not require the intentional
mental state necessary to establish fraud.” Shah v. Intermountain
Healthcare, Inc., 2013 UT App 261, ¶ 11, 314 P.3d 1079 (quotation
simplified).

¶41 As noted, the district court dismissed those claims
pursuant to rule 12(b)(6) of the Utah Rules of Civil Procedure. But
because it was reviewing the claims under the rule 12(b)(6)
standard, the court was required to “take the factual allegations
in the complaint as true.” 1600 Barberry Lane 8 LLC v. Cottonwood
Residential O.P. LP, 2021 UT 15, ¶ 43, 493 P.3d 580. And it could
only grant the motion if, “assuming the truth of the allegations in
the complaint and drawing all reasonable inferences therefrom in
the light most favorable to” Madden, it was “clear” that Madden
was not entitled to relief. Hudgens v. Prosper, Inc., 2010 UT 68, ¶ 14,
243 P.3d 1275 (quotation simplified).

¶42 In its ruling, the court concluded that the statements
Capozzoli made in the Letter “were not promises of any future
performance” and “were not representations that could be relied
upon by Madden.” We understand this ruling to have been based
on the first and second elements of fraud. But to satisfy those
elements, the statements didn’t need to be “promises of any future
performance.” Instead, as noted, it was enough if they constituted
representations of “presently existing material fact.” Larsen, 2004
UT App 259, ¶ 7 (quotation simplified).

¶43 In her counterclaims and third-party claims, Madden
alleged that Capozzoli and Husband:

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• “represented that they intended to make extensive
renovations to the [House]”;

• “identif[ied] the specific renovations to the [House] they
purportedly intended to make”;

• did so “[k]nowing they would most likely not be
submitting the highest offer”;

• did so “with the intent to induce Madden to accept the
[offer]”; and

• “did not actually intend to make the renovations . . . or are
so contending after the fact and they knew that their
representations were false.”

As framed by these allegations, it seems that the “presently
existing material fact” at issue was the intention that Capozzoli
and Husband had for the House as of the time that Capozzoli
wrote the Letter. In the passages from the claims recited above,
Madden plainly alleged that Capozzoli made statements about
these intentions and that those statements were false. Madden
alleged that she “did in fact reasonably rely upon the
representation without knowledge of its falsity.” Madden further
alleged that, because of these statements, she “was induced to
accept” Capozzoli’s offer over other more lucrative offers. And as
noted, because of the procedural posture, the district court was
required to accept these allegations as true. As a result, insofar as
the district court’s ruling was based on its conclusion that there
were no statements of presently existing material fact, we
conclude that the court was mistaken on that point.

¶44 In response to Madden’s arguments, Capozzoli tells us that
letters like this one are somewhat common in competitive real
estate markets. We’re also told that such letters sometimes include
flowery language or even puffery. Fair enough. And for similar
reasons, the district court seems to have concluded that, as a

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matter of law, statements made in such letters simply cannot
support the initial elements of a fraud claim—i.e., that they cannot
be regarded as statements of presently existing fact. But neither
the district court nor Capozzoli have pointed us to any authority
holding that such letters are categorically exempt from
prohibitions against fraud. And since the ostensible point of such
a letter is to induce an owner to sell a seemingly valuable home or
property to a particular buyer, it’s not hard to imagine scenarios
in which a particular statement made in such a letter could be the
thing that induces an owner to pick one buyer over another. If it
turns out that a statement was specific enough (not to mention
verifiably false enough), we see no reason why such statements
could not form the basis of a fraud claim. Thus, to the extent that
the district court ruled that the initial fraud elements could not be
satisfied, we conclude that the decision was erroneous and must
be reversed.5

¶45 To be clear, and as we just noted, our understanding is that
the district court’s ruling was based solely on its conclusion that
the initial elements of fraud could not be satisfied, and we’re
reversing the decision based on that understanding. But we note
that our decision still leaves open many questions that are yet to
be decided, whether on summary judgment or after a trial. For
example, Capozzoli questions whether Madden can prove that it
was reasonable for her to rely on the particular statements
Capozzoli made in the Letter. We note that in assessing
reasonable reliance, a factfinder is entitled to consider the context

5. In a similar vein, Capozzoli argues on appeal that the
statements she made in the Letter were not factual at all because
they were merely “aspirational” and expressions of “wants” or
“hopes for the future.” But in the Letter, Capozzoli made specific
claims about specific intentions. And in the counterclaim,
Madden at least alleged that Capozzoli did not actually have
those intentions, which is enough to survive the motion to
dismiss.

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of the statements at issue (including their tone and tenor), what
was said and what was not said, the kind of communication at
issue, and any other relevant circumstances. See Robinson v. Tripco
Inv., Inc., 2000 UT App 200, ¶ 20, 21 P.3d 219 (“To determine
whether the reliance was reasonable, the reliance must be
considered with reference to the facts of each case.” (quotation
simplified)). And in this sense, it seems possible that some of the
concerns that the court expressed with respect to the
“representation” and “presently existing fact” elements might
find more solid footing in a reasonable-reliance analysis.

¶46 In addition, there may be some question about whether
Madden can prove that the statements were false. After all,
Capozzoli asserts that she did have the intention to renovate the
House at the time she wrote the Letter. And some of the evidence
presented at the damages trial seems to back that up. For example,
Madden’s own evidence showed Capozzoli began renovating the
kitchen fairly quickly, which may undermine any claim that the
statements at issue were false.

¶47 But again, the district court dismissed Madden’s claims
under rule 12(b)(6) of the Utah Rules of Civil Procedure, and it did
so based on its assessment of the initial elements of fraud. Because
we reverse that conclusion, and because the court has not yet
entered a ruling, much less findings, on the other elements, we
have no occasion to address the merits of these additional
potential issues. Thus, while we reverse the dismissal of
Madden’s claims, we leave open the parties’ ability to raise
additional arguments about those claims on remand.

III. Attorney Fees

¶48 Finally, Madden challenges the district court’s award of
attorney fees to Capozzoli. “In Utah, attorney fees are awarded
only if authorized by statute or contract. If provided for by
contract, attorney fees are awarded in accordance with the terms
of the contract.” Eldridge v. Farnsworth, 2007 UT App 243, ¶ 51, 166

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Capozzoli v. Madden

P.3d 639 (quotation simplified). Here, the REPC stated that in “the
event of litigation or binding arbitration arising out of the
transaction contemplated by the REPC, the prevailing party shall
be entitled to costs and reasonable attorney fees.”

¶49 The district court awarded attorney fees to Capozzoli
based on its determination that she was the prevailing party. But
because that award was based, in part, on its dismissal of
Madden’s counterclaims, and because we’ve now reversed that
dismissal, the prevailing party calculus needs to be reevaluated.
See Harman v. 105 Partners, LLC, 2024 UT App 109, ¶ 61 n.16, 556
P.3d 669 (vacating an attorney fee award after reversing dismissal
of two claims). We accordingly vacate the district court’s attorney
fee award, though we leave open the possibility that the court
may consider the question anew if any party requests attorney
fees after the case has concluded.

¶50 We also note, however, that an appellate court has
discretion to “provide additional guidance on issues that are
likely to recur on remand.” Sheppard v. Geneva Rock, 2021 UT 31,
¶ 47, 493 P.3d 632. And we often exercise this discretion to address
arguments that have “been fully briefed and argued” on appeal
and that are likely to arise again in further proceedings in the case.
Busico v. Carver, 2023 UT App 162, ¶ 53, 542 P.3d 956, cert. denied,
554 P.3d 1095 (Utah 2024); see also State v. James, 819 P.2d 781, 795
(Utah 1991) (“Issues that are fully briefed on appeal and are likely
to be presented on remand should be addressed by this court.”).
Here, the parties have briefed and argued the question of whether
the fees that Capozzoli incurred defending against the
counterclaims fall outside the scope of the REPC’s attorney fee
clause—and, thus, whether they’re recoverable. Because that
issue is likely to arise on remand, we choose to give some
guidance on it now.

¶51 The provision at issue states that in “the event of litigation
or binding arbitration arising out of the transaction contemplated by

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the REPC, the prevailing party shall be entitled to costs and
reasonable attorney fees.” (Emphasis added.) The term
“transaction” naturally refers to an “exchange or transfer of
goods, services, or funds.” 6 And the “transaction” in question
here was, of course, the exchange of money for title to the House.

¶52 As noted, Madden’s counterclaims are based on statements
that Capozzoli made to her as part of her offer to purchase the
House. On a plain language basis, we conclude that the phrase
“arising out of the transaction” is broad enough to encompass
statements made in the offer that led directly to the REPC in
question. And this conclusion is supported by caselaw from our
court and other jurisdictions that have considered similar
questions. In Nelson v. 15 White Barn Drive LLC, for example, we
affirmed the district court’s award of attorney fees to the
defendants under a real estate purchase contract where the
defendants successfully defended against a fraud claim that was
based on the same transaction. 2022 UT App 106, ¶¶ 25–26, 517
P.3d 1062. And in Hahn v. McElroy, an Illinois appellate court
likewise considered the scope of an attorney fee provision that
allowed an award of attorney fees to the prevailing party in “any
action with respect to this Contract.” 2023 IL App (2d) 220403,
¶ 47, 239 N.E.3d 792. In the court’s view, this clause was broad
enough to entitle the defendant to recoup fees that were incurred
defending against a claim of fraudulent inducement that was
based on conduct that occurred while negotiating the contract. Id.
¶ 49.

¶53 Here, the attorney fee provision in question naturally
encompasses Madden’s counterclaims. As a result, if either party
requests attorney fees at the conclusion of the case on remand, the

6. Transaction, Merriam-Webster, https://www.merriam-webster.
com/dictionary/transaction [https://perma.cc/B4TG-Z4D6 ].

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district court may decide to include in its award any fees that were
incurred with respect to the counterclaims. 7

CONCLUSION

¶54 We affirm the district court’s damages award because there
was sufficient evidence to support it. But we reverse the district
court’s dismissal of Madden’s counterclaims and third-party
claims, and because we’ve done so, we also vacate the attorney
fee award. We accordingly remand for further proceedings that
are consistent with this opinion.

7. The parties also dispute whether the request for attorney fees
that was made below complied with rule 73(a) of the Utah Rules
of Civil Procedure. We have no need to decide this issue. Insofar
as a party would in theory need to file a new motion for attorney
fees once the litigation has again concluded, any such error (if it
was even error) would be curable on remand.

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