Legal Tender Services v. Bank of American Fork

2022 UT App 26

THE UTAH COURT OF APPEALS

LEGAL TENDER SERVICES PLLC,
Appellant,
v.
BANK OF AMERICAN FORK AND JPMORGAN CHASE BANK,
Appellees.

Opinion
No. 20200310-CA
Filed February 25, 2022

Fourth District Court, Provo Department
The Honorable Lynn W. Davis
No. 190400833

Lawrence D. Hilton, Attorney for Appellant
Stephen C. Tingey and Brent D. Wride, Attorneys for
Appellee Bank of American Fork
Douglas P. Farr and Zaven A. Sargsian, Attorneys for
Appellee JPMorgan Chase Bank

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

TENNEY, Judge:

¶1 Legal Tender Services (LTS) is a vendor for an online gold
seller, and LTS also provides escrow services for some of the
gold seller’s sales. To facilitate these transactions, LTS’s
customers made payments through an online payment portal
that was owned and provided by the Bank of American Fork
(BAF). After they did, LTS would send them their purchased
gold.

¶2 In 2016, an internet fraudster stole a doctor’s personal
financial information and used that information to purchase
several hundred thousand dollars’ worth of gold from LTS. After
the theft was belatedly discovered, LTS was left with the losses.
Legal Tender Services v. Bank of American Fork

¶3 LTS later sued both BAF and JPMorgan Chase Bank
(which was the doctor’s bank), claiming that they should have
prevented the theft. Of note, LTS raised claims sounding in
products liability and negligence. But the district court granted
the banks’ respective motions for summary judgment and/or to
dismiss the claims. Along the way, the court also sanctioned
LTS’s counsel for filing an overlength motion.

¶4 LTS now appeals those decisions, but we affirm. As
explained below, the district court correctly ruled that BAF’s
online payment portal did not qualify as a “product” for
purposes of LTS’s products liability claim. It also correctly ruled
that LTS’s negligence claims against both banks failed as a
matter of law. Finally, under the circumstances of this case, the
district court did not abuse its discretion when it sanctioned
LTS’s counsel for filing an overlength motion.

BACKGROUND1

¶5 LTS was a vendor for an online gold seller, and it also
provided escrow services for that gold seller. These services
included receiving money from various buyers, transferring the

1. As noted above, we are reviewing separate decisions that
granted motions to dismiss and summary judgment. When
reviewing a decision granting a motion to dismiss, “we view the
facts pled in the complaint and all reasonable inferences from
them in the light most favorable to the plaintiff.” Scott v.
Universal Sales, Inc., 2015 UT 64, ¶ 4, 356 P.3d 1172 (quotation
simplified). When reviewing a decision granting summary
judgment, we view “the facts and all reasonable inferences
drawn therefrom in the light most favorable to the nonmoving
party.” JENCO LC v. Perkins Coie LLP, 2016 UT App 140, ¶ 10,
378 P.3d 131 (quotation simplified). In this case, LTS is both the
plaintiff and the party that opposed the summary judgment
motion at issue.

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Legal Tender Services v. Bank of American Fork

buyers’ money to the gold seller, facilitating the shipment of the
gold to the buyer on behalf of the seller, and transferring the
escrow funds to the seller.

¶6 LTS opened an account with BAF and entered into an
agreement (the Agreement) to use BAF’s automated
clearinghouse (ACH) payment portal to receive money from the
gold buyers. This portal allowed the buyers to access the ACH,
which is “a nationwide network through which depository
institutions send each other batches of electronic credit and debit
transfers.” Far West Bank v. Robertson, 2017 UT App 213, ¶ 8 n.7,
406 P.3d 1134 (quotation simplified). In this sense, the ACH acts
as a communication line for banks that helps them transfer
money to one another virtually, and BAF’s payment portal acted
as an entryway into that network.

The Agreement’s Terms2

¶7 The Agreement described the “Services” and “Processing
Service Options” provided by BAF through its online payment
portal, explaining in pertinent part that LTS “desired BAF to
provide certain payment processing services.” “This Service
consisted of a Customer Payment Portal . . . offered through
BAF’s service provider” that “provided the tools to LTS to allow
an End User to make a payment or donation to LTS via the
Internet.”3

2. For readability, we’ll forgo brackets when altering the tense of
the Agreement’s provisions, and for consistency in this opinion,
we’ll replace its internal references to “Customer” and “Bank”
with “LTS” and “BAF,” respectively.

3. As used in the Agreement, the term “End User” referred to
“Customer’s customers,” which, applied here, meant LTS’s
customers.

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¶8 Payments were made when an End User accessed LTS’s
website and provided the End User’s credit card number or bank
account information. Each transaction was then “considered to
have been transmitted by LTS to the Service Provider.”
Although the service provider would provide LTS with “a
branded website and website link that would enable the End
User to perform the web page coding necessary to” make the
payments, the Agreement made clear that “[a]ll right, title[,] and
interest in and to (a) any and all computer programs, . . . (b) the
Service procedures[,] and (c) any and all users guides,
instructions[,] and other documentation provided to, or used by,
LTS in connection with the Service . . . shall be, and remain, the
property of BAF.”

¶9 The Agreement further explained that it would be LTS’s
“responsibility” to ensure “that the origination of ACH
transactions complied with U.S. law,” as well as to “obtain
authorization for each entry prior to debiting [an] End User’s
account.” “With respect to each and every Entry transmitted by
LTS and [an] End User, LTS represented and warranted to BAF
and agreed that . . . each person shown as the End User on an
Entry received by BAF from LTS had authorized the initiation of
such Entry and the crediting or debiting of its account.”

¶10 Under the Agreement, LTS agreed that it had “the sole
responsibility for the accuracy of the data transmitted to [the]
Service Provider,” and LTS also “acknowledged and agreed that
if an inconsistency between an End User’s name and account
number existed, the transaction would [still] be initiated based
upon the account number even if it identified a person different
from the named End User.” LTS further “agreed to be
responsible and liable for any loss incurred by any party” under
such circumstances. LTS expressly “acknowledged that it was
solely responsible for any and all returned or rejected items,”
and it further “agreed to indemnify BAF . . . [for] any and all
actions taken by End Users as it related to this Agreement, [and]
any claim by any End User or other third party that an ACH or
credit card entry was not issued by an End User or a person
acting on behalf of an End User.”

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¶11 Regarding security and other safety protocols for the
online payment portal, LTS agreed to be “solely responsible for
providing for and maintaining the physical, electronic,
procedural, administrative, and technical security of data,” and
it “acknowledged and agreed that it was LTS’s responsibility to
protect itself and to be vigilant against e-mail fraud, phishing,
and other internet frauds and schemes.” The Agreement
therefore provided that BAF would not be “responsible for any
losses, injuries, or harm incurred by LTS or End Users as a result
of any electronic, e-mail, or internet fraud.”

The Hack

¶12 LTS paid a monthly fee for these services, and it used
them “without any noteworthy complications” from April 2013
to April 2016. But in May 2016, someone fraudulently
representing himself to be a doctor registered with the gold
seller using the doctor’s correct (albeit stolen) personal
identifying information. The fraudster then began purchasing
gold in the doctor’s name using the doctor’s funds, doing so
through the doctor’s Chase bank account and LTS’s online
payment portal provided by BAF. These payments each went
through the online payment portal, and each registered as
“settled” a few days after the fraudster initiated them. On the
day after each transaction “settled,” LTS facilitated the shipment
of gold coins to the addresses provided by the fraudster.

¶13 The fraudster made five separate deposits into LTS’s
escrow account over a twelve-day period, and LTS sent four
separate shipments of gold coins to the fraudster at various
addresses across the country. In all, LTS facilitated the shipment
of about $420,000 worth of gold coins to the fraudster.

¶14 After the theft was finally discovered, BAF restored the
money to the doctor’s Chase bank account, thus leaving LTS’s
escrow account “with a deficit balance” of $420,000.

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The Litigation

¶15 LTS later sued BAF and Chase, asserting, among other
things, that BAF was strictly liable for its “defective product”
(i.e., the online payment portal) and that both BAF and Chase
were also liable for LTS’s loss under negligence principles.

1. Products Liability

¶16 In its products liability claim, LTS asserted that BAF was
strictly liable for the “defective nature” of the online payment
portal. LTS faulted BAF for the “utter lack of safeguards,” the
lack of “limits on transfer amounts,” and failing to implement
“any other meaningful measures to protect their account
holders.”

¶17 LTS and later BAF filed competing summary judgment
motions regarding the products liability claim. After briefing
and argument, the district court granted BAF’s motion for
summary judgment and denied LTS’s motion. The court
concluded that “[u]nder the Agreement, [BAF’s] software service
provider enabled [LTS] to use an ACH customer payment portal
by providing the portal through a website,” but that BAF “never
provided any movable, tangible goods” and “did not provide
software or hardware under the Agreement.” The court thus
concluded that LTS had not “shown that [BAF] provided any
‘product[]’ for purposes of a strict liability claim.” And because
“the Agreement put[] the onus on [LTS] to obtain all necessary
hardware and software,” and because it “expressly state[d] that
[BAF would] retain[] any right, title, and interest to any software
or documentation that [LTS] obtained pursuant to the
Agreement,” the court also concluded that no “‘sale’ or ‘license’
of any product” took place. The court accordingly concluded
that LTS’s products liability claim failed and that BAF was
“entitled to judgment as a matter of law.”

¶18 Alternatively, the court also concluded that, even if “the
subject transaction was a hybrid transaction,” LTS could not
prevail on a products liability claim because “the predominant

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purpose of the Agreement was [still] to provide services to
[LTS],” not to facilitate a sale of any good or product. It
accordingly denied LTS’s motion for summary judgment and
instead granted summary judgment in BAF’s favor on the
products liability claim.

2. Negligence

¶19 LTS also brought negligence claims against BAF and
Chase, asserting that both were negligent for failing to, “among
other things, employ all reasonable measures to curtail the
unauthorized transfer of their funds to unsuspecting recipients.”
In response, BAF and Chase each moved to dismiss LTS’s
negligence claims against them, albeit on different grounds.

¶20 In its motion, BAF argued that LTS’s negligence claim
against it was barred by the economic loss rule because the
injuries LTS complained of arose out of the Agreement. Since the
economic loss rule requires that a plaintiff “sue only for contract-
based remedies” when the alleged tort arose from “a breach of a
duty that the contract itself imposes,” BAF argued that “LTS
may not assert a tort claim in an effort to circumvent the
Agreement.” (Quotation simplified.)

¶21 The district court agreed. It determined that “BAF and
LTS ha[d] a contract governing the transactions that led to the
dispute” and that “[t]here [was] no independent duty alleged by
LTS” that would give rise to a separate tort claim. As a result, it
held that LTS’s negligence claim against BAF was barred by the
economic loss rule. The court therefore dismissed that claim.

¶22 In its motion, Chase argued that it owed “no legal duty”
to LTS because LTS was “not Chase’s customer” and did “not
have a contractual or other relationship with Chase.” The district
court agreed that Chase “owe[d] no duty to LTS.” It therefore
dismissed LTS’s negligence claim against Chase.

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3. Sanctions

¶23 Early in the litigation, LTS filed a motion for summary
judgment. In response, Chase moved to strike this motion on
two particular grounds that matter here. First, Chase pointed out
that a motion for summary judgment must contain a “statement
of material facts claimed not to be genuinely disputed” and that
each of those facts must be “separately stated in numbered
paragraphs.” Utah R. Civ. P. 56(a)(1). LTS’s motion had not
complied with this requirement, however. Instead, LTS had
included what it called a “brief review” of the facts, and it then
simply “incorporate[d] by reference paragraphs 1 through 60 of
[its] Complaint” and “all exhibits authenticated thereby.”
Second, Chase also invoked rule 7(c) of the Utah Rules of Civil
Procedure, which limits summary judgment motions to 25
pages. Chase argued that LTS’s motion was overlength because
it came in at 29 pages.

¶24 Over LTS’s opposition, the district court struck LTS’s
motion for summary judgment. In doing so, the court ordered
that “if [LTS] chooses to refile a motion for summary judgment,
and absent an order extending the applicable page limits, the
motion must comply with [the] page limitations under Rule 7(c)
and content requirements under Rule 56(a), including that it
contain a statement of material facts claimed not to be genuinely
disputed.”

¶25 About a week later, LTS filed a second motion for
summary judgment. LTS now included a statement of
undisputed facts that complied with the rule’s separate-
numbering requirement. LTS also noted that its alleged facts
were drawn directly from its complaint. (In other words, what it
had previously “incorporated by reference,” it now included
directly.) This fact section was four-pages long, and it was also
single-spaced. With the benefit of these four single-spaced pages,
LTS’s second motion for summary judgment came in at 25
pages.

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¶26 Chase moved to strike this second motion. Chase pointed
out that under rule 10(d) of the Utah Rules of Civil Procedure,
“all text” in a pleading “must be double spaced, except for
matters customarily single spaced.” Chase argued that
“[b]ecause more than 4 pages of LTS’s Motion is not double
spaced, it blatantly violates Rule 10(d).” Chase further asserted
that, “[b]y single spacing more than 4 pages of its Motion,” LTS
had “avoided compliance with Rule 7” and its “25-page
limitation.” Chase also requested sanctions, asking the court to
require LTS “to pay Chase’s legal fees for having to bring two
motions to strike.”

¶27 LTS opposed this (second) motion to strike its (second)
motion for summary judgment, accusing Chase of being
“preoccup[ied] with form over substance.” With respect to the
four-page single-spaced fact section, LTS claimed that this was
permissible because it was a “block quote,” and block quotes, in
LTS’s view, “fall within [the] customary exception.”

¶28 The district court granted Chase’s motion. The court
found that LTS’s “single spaced” statement of material facts was
indeed a violation of rule 10(d) and that LTS had “effectively
gained an additional four pages and avoided seeking permission
to file overlength” by “single spacing the facts,” thus violating
rule 7’s page limit too. The court further determined that LTS’s
“violations [were] not minor matters and the rules cannot be
avoided when convenient. Rather, such violations prejudice
opposing counsel, who is also bound to a page limit and must
respond to an overlength motion.” “Moreover,” the court
continued, “this is the second time [LTS] has filed a motion for
summary judgment that violate[d] the rules. . . . Rather than
address the problems and comply with the limits, [LTS]
attempted to bypass the rules through single spacing the facts.”
(Quotation simplified.) While the court acknowledged that “[i]t
is typical for parties to use their previously drafted facts in a
motion for summary judgment,” it explained that “these are not
‘customarily single spaced.’” (Quoting Utah R. Civ. P. 10(d).)
The court accordingly struck LTS’s motion and awarded Chase
“reasonable attorneys’ fees related to” Chase’s “second motion

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to strike [LTS’s] motion for summary judgment.” (Quotation
simplified.)

ISSUES AND STANDARDS OF REVIEW

¶29 On appeal, LTS first argues that the district court erred in
granting summary judgment in BAF’s favor on its products
liability claim. “We review a grant of summary judgment for
correctness,” giving “no deference to the district court’s legal
conclusions and consider[ing] whether the court correctly
decided that no genuine issue of material fact existed.” Heslop v.
Bear River Mutual Ins. Co., 2017 UT 5, ¶ 15, 390 P.3d 314
(quotation simplified).

¶30 LTS also challenges the district court’s grant of BAF’s and
Chase’s motions to dismiss the negligence claims. “We review a
decision granting a motion to dismiss for correctness, granting
no deference to the decision of the district court.” Fehr v.
Stockton, 2018 UT App 136, ¶ 8, 427 P.3d 1190 (quotation
simplified).

¶31 Finally, LTS challenges the district court’s decision to
sanction it for filing an overlength motion. “Our review of a
district court’s imposition of sanctions follows a two-step
process,” wherein we first “ensure that the district court has
made a factual finding that the party’s behavior merits
sanctions,” and we then determine if the district court abused its
discretion in issuing the sanction. Kilpatrick v. Bullough
Abatement, Inc., 2008 UT 82, ¶ 23, 199 P.3d 957.

ANALYSIS

I. Products Liability

¶32 LTS challenges the dismissal of its products liability claim
against BAF. LTS argues that the district court based its decision
on a “false dichotomy” from the Agreement between providing

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“services” and “furnishing a product.” (Emphases in original.)
According to LTS, the term “service” only denotes a
“customized, personalized offering.” And because BAF’s online
payment portal was automated, LTS argues that it can’t be a
service and instead qualifies as a product under Utah’s Product
Liability Act. We disagree.

¶33 In Utah, “product[s] liability encompasses all actions
seeking money damages for injury to people or property
resulting from defective products.” Utah Local Gov’t Trust v.
Wheeler Mach. Co., 2008 UT 84, ¶ 10, 199 P.3d 949. For products
liability to apply, “the transaction must concern a product and
that product must be defective when it is sold.” Id. ¶ 11. Because
“a service alone cannot be considered a product,” id. ¶ 16, a
threshold question in a products liability claim is whether the
item that allegedly failed actually qualifies as a product.

¶34 But “the Product Liability Act does not define product,”
and for many years “no controlling Utah case law describe[d] a
test for defining product” either. Id. Recognizing this gap in the
law, our supreme court has directed courts to look to the
Uniform Commercial Code (UCC) for help when determining if
something is a “product” and thus subject to the Product
Liability Act. See id. ¶¶ 16, 37.

¶35 “[W]hether a transaction involves a product” can
therefore “be determined by using the UCC test for determining
whether the transaction was for goods.” Id. ¶ 37. And the UCC
defines “goods” as “all things (including specially manufactured
goods) which are movable at the time of identification to the
contract for sale.” Utah Code Ann. § 70A-2-105(1) (LexisNexis
2020) (emphasis added); see also Restatement (Third) of Torts:
Products Liability § 19 (Am. L. Inst. 1998) (defining “product” as
“tangible personal property distributed commercially for use or
consumption”).

¶36 Again, the alleged product at issue here was BAF’s online
payment portal. Under the principles explained above, we
conclude that the district court correctly dismissed LTS’s

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products liability claim against BAF for two reasons. First, BAF’s
payment portal is much more of a service than it is a product,
given that the portal isn’t a movable good. And second, even if
the payment portal may have some characteristics of a product,
the predominant purpose of the contract between LTS and BAF
was for BAF to provide services to LTS, and in such situations
there is no viable products liability claim.

¶37 First, the portal isn’t a “movable” good, Utah Code Ann.
§ 70A-2-105(1), nor is it an item of “tangible personal property,”
Restatement (Third) of Torts: Products Liability § 19. Rather, it’s
an online portal that is accessed by following the “website link”
provided by BAF’s “service provider,” and no separate
“hardware [or] software needed to access the Service” was part
of the Agreement between the parties. For this reason alone, it
likely does not qualify as a good under the UCC or a product for
purposes of a products liability claim.

¶38 Second, even if the Agreement can somehow be said to
have involved the sale or lease of a good, the fact that the
Agreement was predominantly about “services” requires us to
affirm the district court’s dismissal of LTS’s products liability
claim.

¶39 Products liability claims sometimes involve a hybrid
transaction—i.e., a transaction in which “both a traditional
tangible good sale and a service [are] present in the same
transaction.” Utah Local Gov’t Trust, 2008 UT 84, ¶ 16. And
hybrid transactions can sometimes be actionable in a products
liability claim. But not always. When a hybrid transaction is at
issue, a court must “examin[e] the predominant purpose of the
transaction” to determine whether the Product Liability Act
applies. Id. ¶ 37. Under the predominant-purpose test, the court
reviews “the factual circumstances surrounding the negotiation,
formation[,] and contemplated performance of the contract to
determine whether the contract is predominantly or primarily a
contract for the sale of goods.” Id. ¶ 31 (quotation simplified). If
the contract was predominantly for the sale of goods, there can

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be a products liability claim; but if the contract’s predominant
purpose was to provide a service, there can’t be such a claim.

¶40 Here, the predominant purpose of the Agreement was to
provide a service—namely, to have BAF facilitate financial
transactions between LTS and its End Users. This is clear from
the Agreement itself. The Agreement said, for example, that BAF
was providing “payment processing services.” (Emphasis added.)
And it likewise said that this “service” consisted of “a Customer
Payment Portal” that “provided the tools to LTS to allow an End
User to make a payment or donation to LTS via the Internet.”4

¶41 Moreover, under the Agreement, LTS had no ownership
of the payment portal. Instead, “[a]ll right, title[,] and interest in
and to” the service and all its components “remained the
property of BAF,” and LTS was required to “obtain and
maintain at its own expense[] all hardware and software needed
to access the Service.” Because of this, BAF essentially acted as
the middleman for the transactions, and it was ultimately BAF—
not LTS—who “processed the credit card transaction or
generated an ACH . . . transaction from the bank account
information” provided by LTS’s customers. In this sense, the
predominant purpose of the Agreement was to provide a
service, not to sell (or lease) a product (or movable good) to LTS.
Thus, even if this Agreement did contemplate a hybrid
transaction, it was one in which the predominant purpose was to
provide a service, thus pulling it out of the realm of products
liability.

4. LTS disputes this characterization, arguing that for purposes
of this test, the term “service” “connotes a customized,
personalized offering.” According to LTS, this would not include
automated transactions like the one at issue. But LTS points to
no authority (and we’re aware of none) holding that anything
that is automated necessarily qualifies as a product for purposes
of products liability law, and we see no reason to create such a
rule here.

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¶42 In short, the portal in question looks more like a service
than a product, and the Agreement predominantly (if not
exclusively) involved services. We therefore affirm the district
court’s decision to grant BAF’s request for summary judgment
on LTS’s products liability claim against it.

II. Negligence

¶43 LTS next asserts that both BAF and Chase owed it an
independent “duty of ordinary care in handling all banking
transactions.” In LTS’s view, both banks breached that duty by
failing to perform certain security checks before processing the
transactions. The district court, however, (A) dismissed the claim
against BAF under the economic loss rule, and (B) dismissed the
claim against Chase based on its conclusion that Chase owed no
duty to LTS. It was correct on both fronts.

A. LTS’s negligence claim against BAF is barred by the
economic loss rule.

¶44 The district court concluded that LTS’s negligence claim
against BAF was barred by the economic loss rule. LTS now
challenges this. LTS cites Arrow Industries, Inc. v. Zions First
National Bank for the proposition that BAF was “‘subject to the
general duty owed by all banks to act in good faith and exercise
ordinary care in handling all banking transactions.’” 767 P.2d
935, 937 (Utah 1988) (emphases added by LTS). Because of this
(alleged) independent duty, LTS claims that the economic loss
rule does not apply.

¶45 We disagree. As explained below, the economic loss rule
applies here because (1) the parties’ contract covers the
allegations at issue in LTS’s suit, and (2) BAF did not have an
independent statutory duty toward LTS under the framework
set forth in Arrow.

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1. The parties’ contract covers the subject matter of LTS’s
negligence allegations against BAF.

¶46 “The economic loss rule is a judicially created doctrine
that marks the fundamental boundary between contract law,
which protects expectancy interests created through agreement
between the parties, and tort law, which protects individuals
and their property from physical harm by imposing a duty of
reasonable care.” Davencourt at Pilgrims Landing Homeowners
Ass’n v. Davencourt at Pilgrims Landing, LC, 2009 UT 65, ¶ 18, 221
P.3d 234 (quotation simplified). This rule “prevents recovery of
economic damages under a theory of tort liability when a
contract covers the subject matter of the dispute.” Reighard v.
Yates, 2012 UT 45, ¶ 14, 285 P.3d 1168.

¶47 The initial question, then, is whether the Agreement
“covers” LTS’s allegations against BAF. It does on a number of
levels.

¶48 For example, LTS’s central claim was that BAF failed to
“[e]mploy all reasonable measures to curtail the unauthorized
transfer of [its] funds to unsuspecting recipients.” But the
Agreement provided that “LTS would obtain authorization for
each entry prior to debiting End User’s account” and that “LTS
would utilize commercially reasonable methods to establish the
identity of the End User.” In the Agreement, LTS further
“warranted to BAF that each such End User has authorized LTS
to submit ACH Entries to their accounts in settlements of
transactions to which End User has agreed.”

¶49 In a similar vein, LTS alleged that BAF breached its “duty
to protect against, prohibit, and prevent unauthorized, third-
party access to financial accounts through proper use of
reasonable methods to guard against identity theft or theft of
passwords, access codes, or similar information.” But in the
Agreement, LTS “acknowledged and agreed that it was LTS’s
responsibility to protect itself and to be vigilant against e-mail
fraud, phishing, and other internet frauds and schemes,” and
LTS “represented and warranted to BAF” that it “agreed that . . .

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each person shown as the End User on an Entry received by BAF
from LTS has authorized the initiation of such Entry and the
crediting or debiting of its account.” LTS likewise “agreed to
indemnify BAF . . . [from] any claim by any End User or other
third party that an ACH or credit card entry was not issued by
an End User or a person acting on behalf of an End User.”

¶50 LTS further alleged that BAF negligently marked the
transactions as “settled” when it had “a duty to refrain from”
doing so when the transactions “were supposedly still
‘provisional.’” And relatedly, LTS alleged that BAF failed to
“promptly advise [the] recipients of such funds” when it
discovered “the mistake,” as well as “to fully comply with
applicable rules, regulations, statutes, and other legal procedures
for taking ameliorative action.” But the Agreement provided that
BAF’s “Security Procedures are not designed for the detection of
errors” and that “BAF is not, and will not be, obligated to detect
errors by LTS or others.” LTS also agreed that it “shall be the
responsibility of LTS that the origination of ACH transactions
complies with U.S. law, . . . and all rules and regulations
promulgated by the Federal Trade Commission.” And LTS
agreed that “BAF has no obligation to discover and shall not be
liable to LTS or any End User for errors made by LTS or an End
User, including but not limited to errors made in identifying the
End User.” Moreover, the Agreement set forth remedies for
failed transactions, providing that if “any debit Entry is returned
to BAF . . . BAF will debit LTS’s Account for the amount of the
return item plus fees and costs incurred by BAF” and that LTS
would be “solely responsible for any and all returned or rejected
items.”

¶51 These provisions allocate responsibility to LTS—and not
to BAF—for the alleged duties and breaches at issue in its
negligence claim against BAF. And more importantly for
purposes of the economic loss rule, they make it clear that the
Agreement at least “covers the subject matter of the dispute”

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between LTS and BAF. Reighard, 2012 UT 45, ¶ 14. The economic
loss rule therefore applies.5

2. The independent duty described in Article 4 of the UCC
does not extend to the facts of this case.

¶52 As noted, when one party’s allegations against another
are “cover[ed]” by the contract between them, “the contract is
the exclusive means of obtaining economic recovery” and
traditional tort remedies are unavailable. Id. ¶¶ 14, 20. When “an
independent duty . . . exists apart from the contract,” however, a
tort claim can escape the economic loss rule. Grynberg v. Questar
Pipeline Co., 2003 UT 8, ¶ 43, 70 P.3d 1. The economic loss rule
therefore does not stop a tort claim when there is “a duty or
obligation that is not subsumed by, but exists independent of,
the contracts” between the parties. Id. ¶ 46; see also Reighard, 2012
UT 45, ¶ 21 (“Whether the economic loss rule applies depends
on whether a duty exists independent of any contractual
obligations between the parties.” (Quotation simplified.)).

¶53 Here, LTS argues that “[a]n extra-contractual,
independent, statutory duty does indeed exist in this case”
under Utah Code section 70A-4-103(1) and Arrow Industries, Inc.
v. Zions First National Bank, 767 P.2d 935 (Utah 1988). We
disagree.

¶54 Our legislature has adopted certain portions of the UCC.
See Butters v. Jackson, 917 P.2d 87, 90 n.2 (Utah Ct. App. 1996).
And in Arrow, our supreme court did state that “UCC section 4-

5. LTS separately argues that the indemnity provisions in the
Agreement are unconscionable because “[a] bank may not
contractually disclaim its statutory duty to exercise ordinary
care.” But since we conclude below that BAF owed no statutory
duty to LTS under Article 4, it also follows that the indemnity
provisions are not “disclaim[ing]” any statutory duty as LTS
alleges. LTS’s unconscionability argument thus fails.

20200310-CA 17 2022 UT App 26
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103 recognizes a bank’s duty to act in good faith and exercise
ordinary care in all its dealings.” 767 P.2d at 938. LTS relies
heavily on Arrow’s reference to a duty existing in “all” of a
bank’s dealings. In LTS’s view, this means that an extra-
contractual duty existed here.

¶55 But we haven’t interpreted this passage from Arrow as
recognizing a UCC duty that applies to every transaction that a
bank is ever involved in. In Ramsey v. Hancock, 2003 UT App 319,
¶ 15, 79 P.3d 423, for example, we limited Arrow’s application to
a bank’s customers and those parties “contractually related to
the bank.” Indeed, we held that banks owe no “duty to a
noncustomer payee.” Id. ¶ 20. Other courts have reached the
same conclusion. See, e.g., Eisenberg v. Wachovia Bank, NA, 301
F.3d 220, 227 (4th Cir. 2002) (“We are persuaded by the
reasoning articulated in the numerous cases holding that a bank
does not owe noncustomers a duty of care.”); Zero Down Supply
Chain Sols., Inc. v. Global Transp. Sols., Inc., No. 2:07-CV-400 TC,
2008 WL 4642975, at *12 (D. Utah Oct. 17, 2008) (directing the
plaintiffs “to discover and submit evidence regarding their
relationship with” the bank before determining whether the
bank owed a duty to those plaintiffs); Shane Smith Enters., Inc. v.
Bank of Am., NA, No. 4:06CV00376, 2007 WL 1880201, at *2 (E.D.
Ark. June 29, 2007) (“In cases where a noncustomer asserted a
negligence claim against a bank for failing to prevent a customer
of the bank from depositing stolen checks, the overwhelming
majority of courts have ruled that the bank did not owe a duty of
reasonable care to the noncustomer.”).

¶56 Moreover, the text from Arrow that LTS relies on also
suggests that this duty does not apply to all transactions that a
bank is ever involved in. As noted, Arrow referred to a “duty to
act” that comes from “UCC section 4-103.” Arrow, 767 P.2d at
938. Thus, under this passage, the question is whether the

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transactions at issue were actually governed by UCC section 4-
103 or even Article 4 at all.6

¶57 Looking to other jurisdictions for help, we conclude that
they’re not. See Lewiston State Bank v. Greenline Equip., LLC, 2006
UT App 446, ¶ 15 n.7, 147 P.3d 951 (“Because the Uniform
Commercial Code is national in character, case law interpreting
it is also national. Consequently, we rely on case law from other
jurisdictions to interpret the Code.” (Quotation simplified.)); see
also Dale K. Barker Co. PC CPA Profit Sharing Plan v. Turner, 2021
UT App 119, ¶ 22, 500 P.3d 940.

¶58 Instead, “Article 4 was meant to apply to checks and
traditional, written, monetary instruments.” Hospicomm, Inc. v.
Fleet Bank, NA, 338 F. Supp. 2d 578, 586 (E.D. Pa. 2004). But it
was “simply not created to govern transactions that are wholly
electronic, as opposed to more traditional transactions effected
by written instruments.” Harber v. Leader Fed. Bank for Sav., 159
S.W.3d 545, 551–52 (Tenn. Ct. App. 2004).

¶59 Courts across the country have long recognized this. As a
result, courts have commonly held that electronic fund transfers
are not covered by Article 4. The Kansas Supreme Court’s
decision in Sinclair Oil Corp. v. Sylvan State Bank, 869 P.2d 675
(Kan. 1994), is well-reasoned and illustrative. There, the court
considered the question of whether Article 4 covered a series of
“electronic debits” between a company and a bank. Id. at 677.
Notably, those debits were exchanged using the “automated

6. LTS asserts in its reply brief that the banks “concede[d]” that
Article 4 applies to the transactions at issue in this case. We see
no such concession. To the contrary, BAF argued in its brief that
“the ACH transfers that are at issue in this case are not governed
by the UCC, and certainly not by Article 4 of the UCC.” BAF
further argued that Arrow (which LTS relies on to assert this
independent duty and which focuses on Article 4) “is
inapplicable to these transactions.”

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clearing house” or “ACH” system, id. at 678, which is the system
that was used in the transactions at issue in this appeal.

¶60 Sinclair held that Article 4 does not apply to “electronic
fund transfer debit transactions.” Id. at 680. Surveying the field,
the court could not find “a single case” that had “found that the
UCC” applies to electronic fund transfers—all of the cases had
said the opposite. Id. And the court noted that “[n]umerous
commentators” had also “concluded that the UCC does not
apply” to such transfers. Id.

¶61 Sinclair identified three main rationales for the
decisions “excluding” electronic fund transfers from “UCC
coverage”: “(1) electronic debits are not ‘items’ within the
meaning of Article 4; (2) the UCC does not specifically address
the problems of electronic fund transfers; and (3) the UCC
drafters never contemplated electronic transactions when
developing the Code.” Id. (quotation simplified).

¶62 The court saw these as interrelated rationales, noting that
the UCC refers to “items,” which “appears to include only
writings.” Id. And the term “writings,” in turn, has been codified
as including “drafts, checks, certificates of deposit, and notes.”
Id. at 681.

¶63 The court viewed this limited categorization as stemming
from Article 4’s history. It noted that Article 4 was drafted “in
the early 1920s to govern check collection.” Id. (quotation
simplified). After then describing the obvious differences in how
written checks are processed versus how electronic transfers are
processed, the court concluded that Article 4 was simply not
designed or drafted with electronic transactions in mind. Id. The
court thus declined to bring electronic transactions into Article
4’s orbit “[i]n the absence of legislative action.” Id.

¶64 This same approach was followed, and this same result
was reached, in a number of decisions that had been issued
before Sinclair. See, e.g., Delbrueck & Co. v. Mfrs. Hanover Trust
Co., 609 F.2d 1047, 1051 (2d Cir. 1979) (“The [UCC] is not

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applicable to this case because the UCC does not specifically
address the problems of electronic funds transfer[s].”); Evra Corp.
v. Swiss Bank Corp., 673 F.2d 951, 955 (7th Cir. 1982) (“Maybe the
language of Article 4 could be stretched to include electronic
fund transfers . . . but they were not in the contemplation of the
draftsmen.”); Walker v. Texas Com. Bank, NA, 635 F. Supp. 678,
681 (S.D. Tex. 1986) (“Perhaps, the language of Article 4 could be
stretched to encompass wire transfers, but such application was
not within the contemplation of the draftsmen.”).

¶65 True, Sinclair and these decisions were issued before the
rise and ubiquity of internet-based financial transactions. But
courts have continued to draw the line between “written” and
“electronic” transactions in decisions that post-date the
development of the modern internet. See, e.g., Hospicomm, Inc.,
338 F. Supp. 2d at 586 (holding that “Article 4 does not
contemplate electronic withdrawals”); Baquero v. JP Morgan
Chase Bank, NA, No. 10-23212-CIV, 2010 WL 11553589, at *4 (S.D.
Fla. Dec. 22, 2010) (explaining that a “detailed analysis”
regarding whether electronic fund transfers are covered by the
UCC “is not necessar[y] as every court that has addressed the
matter has found that the UCC does not apply to electronic fund
transfers”); Marrow v. Bank of Am., NA, No. 2491, 2021 WL
2627702, at *11 (Md. Ct. Spec. App. 2021) (concluding that “[n]o
provision of Article 4 of Maryland’s Commercial Law Article
applies to electronic funds transactions”); Margolis v. Sandy
Spring Bank, 110 A.3d 784, 790 (Md. Ct. Spec. App. 2015)
(concluding that Maryland’s similarly worded Article 4 “does
not apply to electronic transactions”). Like Sinclair, these
internet-era cases have continued to reinforce the key distinction:
Article 4 “was meant to apply to checks and traditional, written,
monetary instruments,” as opposed to “electronic transfers.”
Hospicomm, 338 F. Supp. 2d at 585–86.7

7. Moreover, we note an additional rationale offered by some of
these cases: namely, that Congress in 1978 passed the “Electronic
(continued…)

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¶66 So here, the question is whether Utah’s version of UCC
Article 4 covers the kind of transactions at issue in this case. And
critically, Utah’s Article 4 includes the same textual cues that
have led other courts to conclude that Article 4 is inapplicable to
electronic fund transfers.

¶67 Like UCC Article 4, Utah’s Article 4 largely turns on the
existence of an “item.” See Utah Code Ann. § 70A-4-102
(LexisNexis 2020). On that front, Utah defines the term “item” to
“mean an instrument or a promise or order to pay money
handled by a bank for collection or payment.” Id. § 70A-4-
104(1)(i); id. § 70A-4-104, U.C.C. cmt. 8.

¶68 Consistent with the general UCC approach discussed
above, the applicable definitions for “item” and “instrument”
depend on the existence of a “writing.” The term “instrument,”
for example, “means a negotiable instrument.” Id. § 70A-3-
104(2); id. § 70A-4-104, U.C.C. cmt. 8. And the Utah Code then
adopts the UCC’s definition of “negotiable instrument” to be
“limited to a signed writing that orders or promises payment of
money.” Id. § 78A-3-104, U.C.C. cmt. 1 (emphasis added). So too
with the terms “promise” and “order.” As with “item,” Utah’s
Article 4 defines these terms to refer to “a written undertaking to
pay money” and “a written instruction to pay money,”
respectively. Id. § 70A-4-104, U.C.C. cmt. 8 (emphases added).

(…continued)
Fund Transfer Act” (commonly referred to as the EFTA), a
statute that, unlike Article 4 of the UCC, is designed to “provide
a basic framework establishing the rights, liabilities, and
responsibilities of participants in electronic fund transfer
systems.” Hospicomm, Inc. v. Fleet Bank, NA, 338 F. Supp. 2d 578,
586 (E.D. Pa. 2004) (quoting 15 U.S.C. § 1693); see also Margolis v.
Sandy Spring Bank, 110 A.3d 784, 791 (Md. Ct. Spec. App. 2015).
The existence of that separate and more directly applicable law
corroborates the conclusion that UCC Article 4 is not applicable
to electronic transactions.

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¶69 In light of these textual cues, and in light of the broad
consensus from other jurisdictions, we see no basis for holding
that Article 4 applies to electronic fund transfers, as opposed to
traditional written instruments. Given that the transactions at
issue were entirely electronic, they therefore were not covered
by Article 4. Because of this, LTS cannot rely on Article 4 (or
Arrow’s discussion of an independent duty arising from Article
4) to assert an independent statutory basis for its negligence
claim. And because LTS’s negligence claim against BAF was
“cover[ed]” by the Agreement, the economic loss rule bars it.
Reighard, 2012 UT 45, ¶ 14.8

8. LTS’s fifth through eighth claims against BAF were separately
based on Article 4a of the UCC. Unlike Article 4, Article 4a
applies to “credit transfers,” which arguably includes “wire
transfers.” See Grand Bayman Belize, Ltd. v. Wells Fargo & Co., 514
F. Supp. 3d 1188, 1192 (C.D. Cal. 2021); Gilbert & Caddy, PA v. JP
Morgan Chase Bank, NA, 193 F. Supp. 3d 1294, 1306 (S.D. Fla.
2016). The district court dismissed those claims, however,
concluding that the transactions between LTS and BAF were not
“credit transfers,” but were instead “debit transfers to which
Article 4a does not apply.” See also Utah Code Ann. § 70A-4a-
104, cmt. 4 (explaining that Article 4a’s provisions apply to
“credit transfers” but “exclude debit transfers”).
It’s unclear whether LTS means to challenge that decision
or to similarly rely on Article 4a as a way of avoiding the
economic loss rule. Regardless, we reject any such attempt as
being inadequately briefed. Besides calling the district court’s
categorization of these transactions a “fiction,” LTS has not
provided any legal authority or detailed analysis showing that
either (i) these electronic fund transfers were not debit transfers,
or instead (ii) Article 4a would apply to them anyway. Because
“Utah appellate courts will not consider claims that are
inadequately briefed,” State v. Garner, 2002 UT App 234, ¶ 8, 52
(continued…)

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B. LTS’s negligence claim against Chase fails because LTS
was not Chase’s customer, and Chase therefore owed it
no duty of care.

¶70 With respect to Chase, LTS’s argument is that Chase
owed it an independent duty of care under Utah’s Article 4 and
that Chase’s failure to take certain security measures violated
that duty. The district court disagreed, and we affirm that
dismissal for two reasons.

¶71 First, as explained above, Article 4 does not govern
electronic fund transfers. LTS’s negligence claim against Chase
therefore fails for the same reason that its negligence claim
against BAF fails: Article 4 does not establish an independent
duty for these kinds of transactions.

¶72 Second, the district court also concluded that LTS’s
negligence claim against Chase was foreclosed by our decision in
Ramsey v. Hancock, 2003 UT App 319, 79 P.3d 423. We agree with
that conclusion.

¶73 In Ramsey, we held that, “absent a customer or contractual
relationship,” banks owe noncustomers no duty. Id. ¶ 17. This
rule has straightforward application here. Because LTS was not
Chase’s customer, and because LTS had no contractual
relationship with Chase, Chase owed LTS no duty. LTS’s
negligence claim against Chase thus fails.

¶74 Resisting this, LTS points out that Ramsey only considered
“whether a non-payor depository bank owes a noncustomer a duty
of care.” Id. ¶ 9 (emphasis added by LTS). Since Chase is the
payor bank here and not the depository bank, LTS argues that
Ramsey is inapplicable.

(…continued)
P.3d 467, we reject any argument by LTS that attempts to rely on
Article 4a as a separate basis for imposing tort liability on BAF.

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¶75 But while it’s true that Ramsey involved a “non-payor
depository bank,” id., we disagree with LTS’s assertion that
Ramsey’s rule turned on that detail. Rather, we read Ramsey as
having more broadly held that banks owe no duty to
noncustomers. See id. ¶ 20. In this sense, what matters is the
relationship between the plaintiff and the bank, not whether the
bank was on the giving or receiving end of funds. Cf. Tuttle v.
Olds, 2007 UT App 10, ¶ 14, 155 P.3d 893 (summarizing Ramsey
as holding that “a bank did not owe a duty of reasonable care to
the noncustomer plaintiff whose signature was forged by a third
party”).

¶76 This reading of Ramsey is bolstered by the fact that Ramsey
itself relied on three other cases that applied this same rule to
payor banks, as opposed to depository banks. See Ramsey, 2003
UT App 319, ¶¶ 10–11, 14, 18, relying on (1) Anschutz v. Central
Nat’l Bank of Columbus, 112 N.W.2d 545, 550 (Neb. 1961)
(reasoning that since “the drawee [or payor] bank has no means
of verifying the authenticity of endorsements made by those
who are not their customers,” it is reasonable to restrict “the
bank’s liability to the customer with whom it deals”); (2)
Schleicher v. Western State Bank of Devils Lake, 314 N.W.2d 293, 297
(N.D. 1982) (concluding that the payor bank did not owe a duty
“to the payee of a forged check . . . where the payee is not a
customer or depositor” of the bank); and (3) Miller-Rogaska, Inc. v.
Bank One, Texas, NA, 931 S.W.2d 655, 664 (Tex. App. 1996)
(ruling in favor of both the depository and payor banks because
the payee “was not a customer of either bank, nor did it have a
relationship with either bank”). And it’s also bolstered by the
wide consensus of other courts that have examined the issue.
See, e.g., Smith v. AmSouth Bank, Inc., 892 So. 2d 905, 909 n.2 (Ala.
2004) (collecting cases to support the proposition that “banks
owe no duty of care to noncustomers”).

¶77 Thus, under Ramsey, a bank’s duty to act in good faith and
exercise ordinary care is not governed by the bank’s status as a
payor or non-payor bank; rather, it’s governed by the non-bank
party’s status as customer or noncustomer. Since it is undisputed
that LTS was not Chase’s customer, it follows that Chase owed

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no tort-based duty to LTS. And with no duty of care, LTS’s
negligence claim against Chase was properly dismissed by the
district court.

¶78 Still resistant, counsel for LTS asked us during oral
argument to “clarify the scope” of Ramsey and “overrule it” if
necessary to allow LTS’s claim to proceed. “Horizontal stare
decisis,” however, ordinarily “requires that a court of appeals
follow its own prior decisions.” State v. Menzies, 889 P.2d 393,
399 n.3 (Utah 1994), superseded on other grounds by constitutional
amendment, Utah Const. art. I, § 12, as recognized in State v. Legg,
2018 UT 12, ¶ 9, 417 P.3d 592. Nevertheless, “a panel may
overrule its own or another panel’s decision where the decision
is clearly erroneous or conditions have changed so as to render
the prior decision inapplicable.” In re C.C., 2017 UT App 134,
¶ 26, 402 P.3d 17 (quotation simplified); see also Christiansen v.
Harrison W. Constr. Corp., 2021 UT 65, ¶¶ 51–52, 500 P.3d 825
(Lee, A.C.J., concurring) (explaining that “our case law has long
endorsed a presumption of deference to past precedent” but that
“[t]he presumption, of course, is rebuttable”).

¶79 But LTS has not briefed any argument about why Ramsey
is either “clearly erroneous” on this point or about what
“conditions have changed” since it was issued that would make
its holding inapplicable here. In re C.C., 2017 UT App 134, ¶ 26.
For this reason, we are not in a position to reexamine Ramsey’s
underlying holding.

¶80 LTS offers a final alternative argument, asserting that
there was “a bona fide relationship between LTS and Chase by
virtue of the common financial transactions to which they were
parties.” (Emphasis omitted.) But the fact that Chase and LTS
were on either end of a handful of electronic fund transfers does
not elevate LTS to the customer-like or contractual-relationship
statuses contemplated by Ramsey.

¶81 For the foregoing reasons, we affirm the dismissal of
LTS’s negligence claim against Chase.

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III. Sanctions

¶82 Finally, LTS challenges the district court’s decision to
order it to pay a portion of Chase’s attorney fees as a sanction for
filing a (second) overlength summary judgment motion.

¶83 “The appropriate standard for reviewing equitable
awards of attorney fees is abuse of discretion.” Anderton v. Boren,
2017 UT App 232, ¶ 14, 414 P.3d 508 (quotation simplified).
When we review a challenge to such a decision, we follow “a
two-step process.” Raass Bros. Inc. v. Raass, 2019 UT App 183,
¶ 11, 454 P.3d 83 (quotation simplified). First, we “ensure that
the district court has made a factual finding that the party’s
behavior merits sanctions, and we disturb such findings only if
there was no evidentiary basis for the district court’s ruling.” Id.
(quotation simplified). “Second, we review the district court’s
overall sanctions ruling for abuse of discretion, disturbing it only
if abuse of discretion is clearly shown.” Id. (quotation
simplified).

¶84 Here, the district court made the requisite factual findings
and concluded that sanctions were appropriate. In its order, the
court explained that, “[b]y single spacing, [LTS] effectively
gained an additional four pages and avoided seeking permission
to file overlength, which is a violation” of Utah Rule of Civil
Procedure 7(c). It described how “such violations prejudice[d]
opposing counsel” by making counsel “respond to an overlength
motion” within the prescribed page limits. And the court
specifically found that LTS “attempted to bypass the rules
through single spacing the facts” rather than “address[ing] the
problems and comply[ing] with the [page] limits.” In the court’s
view, this single-spacing was done in contravention of rule
10(d), which requires pleadings to be “double spaced, except for
matters customarily single spaced,” and this caused the motion
as a whole to violate the page limit set forth in rule 7(c).

¶85 We do tend to agree that, in an ordinary case, a party
shouldn’t be monetarily sanctioned for violating a rule that turns
on what is “customarily single spaced.” Utah R. Civ. P. 10(d).

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The Utah Rules of Civil Procedure don’t contain a definitive
accounting of what is or isn’t “customarily single spaced,” so
wayward parties should usually be forgiven for good faith
violations in this regard.

¶86 But this isn’t an ordinary case. Here, the district court had
already struck LTS’s previous summary judgment motion for
violating rule 7(c)’s page-length limitations. And the order that
did so specifically warned LTS that, if it chose “to refile a motion
for summary judgment, and absent an order extending the
applicable page limits, the motion must comply with [the] page
limitations under Rule 7(c) and content requirements under Rule
56(a).” LTS was therefore on direct and targeted notice that the
court intended to enforce the rules regarding acceptable page
lengths against it for any subsequent summary judgment
motion. So when LTS then filed a new summary judgment
motion that included a four-page single-spaced passage, this
suggested that LTS was simply trying to get around the very
same rules that the district court had just enforced against it.

¶87 In its brief, LTS responds by asserting (as it did below)
that its single-spaced passage was appropriate because it was a
“block quote” and “block quotes fall within [the] customary
exception.” LTS also regards it as significant that its block quote
was comprised of “verbatim quotations from the Complaint.”

¶88 It’s our sense that attorneys do customarily block quote
lengthy passages from statutes, contracts, or portions of the
record that recount testimony. Less frequently, it’s acceptable
(though usually stylistically frowned on) for attorneys to block
quote lengthy passages from cases.9

9. See Hon. Ruth Bader Ginsburg, Remarks on Appellate Advocacy,
50 S. C. L. Rev. 567, 568 (1999) (noting that a “first-rate brief”
“skips long quotations,” though it “doesn’t unfairly crop the
occasional quotations used to highlight key points”); Hon.
Antonin Scalia & Bryan A. Garner, Making Your Case 128
(continued…)

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¶89 Here, however, LTS wasn’t faulted for block quoting a
passage from a statute, or a contract, or a transcript, nor was it
even faulted for block quoting a key quote from a case that was
directly on point. Rather, LTS was faulted for block quoting a
lengthy passage from its own prior pleading. In other words,
LTS was faulted for block quoting itself.

¶90 In our experience, and apparently in the experience of the
district court too, parties do not customarily block quote
themselves, let alone for several pages. And such a maneuver
would be particularly inappropriate if done to get under a page
limit, especially where the court had just enforced that same
page limit against that party when striking a prior motion on the
same subject.10

(…continued)
(Thomson/West 2008) (cautioning attorneys to “[b]e especially
loath to use a lengthy, indented quotation” because such
quotations “invite[] skipping” and are often not “read by
anyone”).

10. Indeed, at the risk of delving too deep into the weeds on this,
it may even be charitable to accept LTS’s reference to the
offending passage as a “block quote.” In legal writing and non-
legal writing alike, block quotes are indented on the left, and
they’re usually indented on the right too. See The Bluebook: A
Uniform System of Citation R. 5.1(a)(i), at 82 (Columbia L. Rev.
Ass’n et al. eds., 21st ed. 2020) (block quotes “should be indented
on the left and right”); Bryan A. Garner, The Redbook: A Manual
on Legal Style § 1.30(d) (4th ed. 2018) (block quotes should be
“[s]et . . . off from the previous text” and “indent[ed]” “on both
sides”); The Chicago Manual of Style ¶ 13.9 (16th ed. 2010) (block
quotes are indented “from the left and sometimes from the
right”).
(continued…)

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¶91 In short, the district court made sufficient “factual
finding[s]” to show “that [LTS’s] behavior merit[ed] sanctions.”
Kilpatrick v. Bullough Abatement, Inc., 2008 UT 82, ¶ 23, 199 P.3d
957. And from there, we defer to the court about whether this
conduct merited sanctions, and this deference is warranted
because the court was in a better position than we are to judge
the culpability of LTS’s conduct. See id. Given the circumstances
at issue, we see no abuse of discretion.

CONCLUSION

¶92 For the foregoing reasons, we affirm the rulings at issue.
The district court properly granted summary judgment to BAF
on LTS’s products liability claim because no product was sold
from BAF to LTS, or, alternatively, because the predominant
purpose of the transaction was to provide a service. The court
properly dismissed LTS’s negligence claim against BAF under
the economic loss rule because the Agreement covered the
subject matter of LTS’s negligence claim, and it correctly
dismissed LTS’s other negligence claim against Chase because
Chase did not owe a duty to LTS. And, finally, the district court
did not abuse its discretion in granting attorney fees to Chase
after LTS filed an overlength motion.

(…continued)
LTS’s passage wasn’t properly indented, however. So in
this additional sense, it wasn’t really a proper block quote at all,
but was instead just a four-page section that LTS single-spaced
in order to get under a page limit.

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