Willis v. Adams and Smith

2019 UT App 84
THE UTAH COURT OF APPEALS
GORDON WILLIS AND JEFFREY DARBY ,
Appellees,
v.
A DAMS AND S MITH I NC ., M ORGAN HUMPHRIES,
JAMES L. S MITH , AND D AWN S MITH ,
Appellants.
Opinion
No. 20170626-CA
Filed May 16, 2019
Fourth District Court, Provo Department
The Honorable Kraig Powell
No. 150401341
Rodney R. Parker, Danica N. Cepernich, and Adam
M. Pace, Attorneys for Appellants
Robert L. Jeffs, Attorney for Appellees
JUDGE DIANA H AGEN authored this Opinion, in which
JUDGES GREGORY K. O RME and R YAN M. HARRIS concurred.
HAGEN, Judge:
¶1 	Adams and Smith Inc., Morgan Humphries, James L.
Smith, 	and 	Dawn 	Smith 	(collectively, 	the 	company) 	appeal
the 	district 	court’s 	entry 	of 	judgment 	in 	favor 	of 	Gordon
Willis and Jeffrey Darby. After resigning from employment
with the company on January 20, 2015, Willis and Darby filed
a complaint in the district court demanding that the company
purchase 	their 	stock 	in 	accordance 	with 	the 	company’s
Restrictive Stock Agreement (the stock agreement). The parties
moved 	for 	summary 	judgment 	on 	the 	issue 	of 	which 	of

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two audited financial statements should provide the book value1
of the company upon which the purchase price for the stock
should be based. Interpreting the plain language of the stock
agreement, the district court agreed with Willis and Darby and
determined that the purchase price should be based on the
company’s book value 	as reflected 	in 	the 	audited 	financial
statement for the 2013 calendar year, which was completed on
April 15, 2014.
¶2 	At trial, Willis testified to the value of the company’s
equipment 	as 	a 	non-retained 	expert 	witness. 	The 	company
objected, arguing that Willis and Darby had not complied with
rule 26(a)(4)(E) of the Utah Rules of Civil Procedure in disclosing
Willis 	as 	a 	non-retained 	expert 	witness. 	The 	district 	court
disagreed and ruled that Willis had been sufficiently designated
and that his testimony was therefore admissible. The parties also
disputed what equipment should be included when adjusting
the purchase price based on the “fair market value of any
equipment” 	as 	provided 	in 	the 	stock 	agreement. 	At 	the
conclusion of trial, the district court interpreted this provision to
refer to all equipment the company owned “that would stand
alone and be able to be used to perform work.”
¶3 	The 	company 	argues 	that 	the 	district 	court 	erred 	in
making these three determinations. Because the district court
correctly interpreted the contract terms as a matter of law and
acted within its discretion in admitting Willis’s expert testimony,
we affirm.
1. “Book value” is “the net asset value of a company calculated
as 	total 	assets 	minus 	intangible 	assets 	(patents, 	goodwill)
and 	liabilities.” 	Book 	Value, 	Investopedia 	(May 	6, 	2019),
https://www.investopedia.com/terms/b/bookvalue.asp [https://p
erma.cc/YRN6-P9N8].

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BACKGROUND
¶4 	The plaintiffs, Willis and Darby, began working for the
company in the early 1990s. The company initially hired Willis to
work as a field engineer, but he rose through the ranks and later
became vice president of operations and a shareholder. Between
2008 and 2009, Willis served as a director on the company’s
board of directors and as the company’s president. In those
roles, he became more involved with the company’s accounting
practices. According to Willis, the company’s annual financial
statements were prepared on a calendar-year basis and the final
audited statements would be available “in March or April of the
following 	year.” 	Willis 	was 	also 	involved 	with 	purchasing
equipment for the company and performing the valuation of that
equipment 	in 	connection 	with 	the 	buyout 	of 	another
shareholder.
¶5 	The company hired Darby to work as a project engineer.
He became a shareholder in 2000, and from that time until he
resigned, Darby worked as vice president of engineering and
served on the board of directors.
¶6 	In 	2009, 	Willis, 	Darby, 	other 	shareholders 	and 	the
company’s trustees entered into the stock agreement. Among
other things, the stock agreement provides:
Upon the termination of employment . . . of a
Shareholder, 	all 	shares 	of 	the 	Stock 	of 	[the
company] owned by the terminated Shareholder
shall be sold to [the company] and/or the other
Shareholders and [the company] and/or the other
Shareholders shall purchase the Stock at the price
and upon the terms set forth in Sections 6 and 7.
Section 7, the provision at issue on appeal, provides that the
purchase price for each share of stock in the company

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shall be the per share adjusted book value . . . as of
the 	last 	audited 	financial 	statement 	of 	[the
company] 	preceding 	the 	event 	requiring 	the
determination of the purchase price . . . . Book
value 	shall 	be 	determined 	from 	the 	audited
financial statement of [the company] according to
the accounting practices previously utilized by the
regular 	accountant 	of 	[the 	company] 	who
customarily 	prepares 	[the 	company’s] 	financial
statement. Adjustment to the book value shall be
made by taking into account the fair market value
of any equipment with fair value in excess of ten
thousand dollars ($10,000).
¶7 	On January 20, 2015, Willis and Darby resigned from the
company. 	At 	the 	time, 	they 	believed 	that 	one 	of 	the
shareholders, James Smith, was going to retire in early 2015 and,
after discussing “the financial issues of what would happen
when [Smith] retired,” Willis and Darby decided they did “not
want[] to work there if the other didn’t work there.”
¶8 	After Willis and Darby resigned, they demanded that the
company purchase their stock in accordance with the stock
agreement. In response, the company offered to purchase their
stock for a price based on the company’s “audited December 31,
2014 financial statements,” which had been completed in March
2015 (the 2014 financial statement). Due to a loss contingency,
the 2014 financial statement showed a substantial reduction in
book value from the prior year. Willis and Darby objected to the
use of the 2014 financial statement under section 7 of the stock
agreement, which required that the value of their shares be
calculated 	based 	on 	“the 	last 	audited 	financial 	statement.”
Because the audit of the 2014 financial statement had not been
completed prior to their retirement date, they asserted that the
audited financial statement for 2013, which had been completed
on April 15, 2014 (the 2013 financial statement), was the “last

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audited financial statement” on which the value of their shares
must be based. They filed a complaint with the district court,
alleging that the company had failed to comply with the stock
agreement and requesting, among other things, that the district
court make “a determination of the purchase price” of their
shares and enter a judgment in the amount of that purchase
price.
¶9 	In 	their 	rule 	26 	initial 	disclosures, 	Willis 	and 	Darby
named themselves as individuals “who [were] likely to have
discoverable information and who [were] likely to be called in
[their] case in chief.” The disclosures stated that Willis and
Darby had “information regarding the accounting practices of
[the company], the valuation of equipment, prior purchases of
minority shareholders’ interest, and discussions of the parties.”
Willis and Darby also attached an equipment valuation Willis
had prepared and the supporting documents on which he had
relied. 	In 	its 	first 	set 	of 	interrogatories 	after 	receiving 	this
information, the company asked Willis to “explain in detail how
you calculated . . . the fair market value of equipment in the
computation of damages that you included with your initial
disclosures” and to “identify all documents that support[]” that
calculation. Willis individually responded to the first set of
interrogatories, explaining his method of equipment valuation.
¶10 	Before trial, Willis and Darby moved for partial summary
judgment, arguing that the purchase price of their stock “must
be determined using the audited financial statements for the
year 2013” in accordance with the plain language of the stock
agreement. In response, the company filed a cross-motion for
partial summary judgment, arguing that the language in section
7 reflects “an ambiguity regarding the parties’ intent” as to
whether the 2014 or 2013 financial statements should be used to
calculate the stock price and that “extrinsic evidence confirms
that the parties intended for the stock price to be calculated
based on the 2014 audit.”

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¶11 	After 	argument, 	the 	district 	court 	granted 	partial
summary judgment in favor of Willis and Darby. In support of
its summary judgment order, the court held:
The provisions of the [stock agreement] providing
that the purchase price of [Willis’s and Darby’s]
stock “shall be determined as of the last audited
financial statement of [the company] preceding the
event requiring the determination of the purchase
price” are not ambiguous. The . . . phrase “last
audited 	financial 	statement” 	uses 	the 	term
“audited,” a term of art in accounting meaning that
the 	audit 	is 	completed—not 	commenced 	or 	in
progress.
Because 	the 	audit 	of 	the 	2014 	financial 	statement 	was 	not
complete by the time Willis and Darby resigned, the court
granted partial summary judgment in their favor, concluding
that section 7 required the use of the 2013 financial statement,
the audit of which had been completed on April 15, 2014.
¶12 	The 	case 	proceeded 	to 	trial 	on 	the 	remaining 	two
issues, one of which was the interpretation of “the provision in
[the 	stock 	agreement] 	that 	also 	provides 	that 	there 	is
an adjustment to the purchase price for equipment.” Regarding
this 	issue, 	Willis 	and 	Darby 	argued 	that 	the 	provision
unambiguously refers to all equipment with a value over $10,000
owned by the company. Willis testified at trial that, as president
of 	the 	company, 	he 	“manage[d] 	day-to-day 	operations,”
including “acquiring and valuing the equipment” the company
owned, 	and 	he 	had 	“handled 	the 	determination 	of
the 	equipment 	valuation” 	for 	the 	company 	during 	a 	prior
buyout 	of 	a 	former 	shareholder. 	In 	order 	to 	conduct
the valuation in this case, Willis testified that he and Darby
acquired 	both 	a 	“master 	equipment 	list” 	and 	depreciation
schedules from the company’s accounting department that he

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had 	used 	to 	value 	the 	equipment 	at 	the 	time 	of 	their
resignations. Relying on this information, Willis testified about
how he valued all of the company’s equipment that exceeded
$10,000. To determine what equipment had a value greater than
$10,000 and was therefore considered in the adjustment to the
purchase price, Willis testified that he aggregated some of the
pieces 	of 	equipment 	into 	groups 	that 	were 	purchased 	and
operated together.
¶13 	While Willis was testifying, the company objected to his
testimony about equipment valuation, arguing that he could not
offer 	expert 	testimony 	because 	he 	had 	not 	been 	properly
disclosed as an expert under rule 26 of the Utah Rules of Civil
Procedure. When the court asked whether Willis and Darby had
“disclosed that [Willis] would be providing this opinion in their
discovery,” Willis and Darby responded that they had identified
Willis as a witness and provided his “detailed valuation” and
“backup documentation” for the valuation. They added that
because Willis was a party, he was not a “specially retained
expert” and did not need to be separately designated. The
company 	disagreed 	but 	acknowledged 	that 	it 	had 	received
Willis and Darby’s initial disclosures, information appearing to
present 	values 	for 	the 	company’s 	equipment, 	and 	Willis’s
summary of equipment valuations. After considering the parties’
arguments, the court decided to “tentatively” allow Willis to
proceed with his testimony.
¶14 	The company later renewed its objection. After hearing
arguments from the parties, the district court ruled that Willis’s
testimony about the valuation of equipment was admissible. In
doing so, the court determined that “when you put together
[Willis 	and 	Darby’s] 	initial 	disclosures 	and” 	the 	exhibit
containing Willis’s estimated equipment valuations, it could not
“see how anyone could come to a conclusion other than that Mr.
Willis was going to talk about valuation of [the company’s
equipment].”

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¶15 	To rebut Willis’s testimony, the company offered the
testimony of James Smith. Smith testified about the manner in
which the company’s equipment had been valued during the
buyout of a former shareholder’s stock. He testified that for the
purchase 	of 	the 	prior 	shareholder’s 	stock, 	he 	believed 	the
company adjusted only the purchase price based on equipment
listed in the audited financial statement and did not aggregate
categories of equipment.
¶16 	After 	closing 	arguments, 	the 	district 	court 	granted
judgment for Willis and Darby. In support of its decision, the
district court found that the stock agreement was unambiguous
and it was therefore unnecessary to consider parol evidence to
determine the meaning of the equipment adjustment provision.
The court interpreted “equipment” to mean “a physical item that
would stand alone and be able to be used to perform work.”
Based on this definition, the district court found that some of the
aggregated 	items 	in 	Willis’s 	summary 	list 	of 	equipment
valuations 	should 	not 	be 	included 	in 	the 	total 	equipment
adjustment value. But the court concluded that “the other values
assessed by Mr. Willis [were] credible” and reflected “the fair
market value by a preponderance of evidence.” Following the
trial, the district court entered detailed findings of fact and
conclusions of law and determined that the company owed
Willis a purchase price of $661,805.51 and Darby a purchase
price of $722,555.51, not including interest, deductions, and
payments that the company had already made.
¶17 	The company appeals.
ISSUES AND STANDARDS OF REVIEW
¶18 	The company raises three issues on appeal. The first two
issues pertain to the district court’s interpretation of the stock
agreement. First, the company argues that the district court erred
in 	interpreting 	section 	7 	of the 	stock agreement to require

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reliance on the company’s 2013 financial statement to determine
the 	purchase 	price 	for 	Willis’s 	and 	Darby’s 	shares 	in 	the
company. Next, the company argues that the district court erred
in interpreting section 7 of the stock agreement to refer to “all
equipment owned by the company” and “to aggregated groups
of individual pieces of equipment.” “Interpretation of the terms
of a contract is a question of law. Thus, we accord the trial
court’s legal conclusions regarding the contract no deference and
review them for correctness.” Nova Cas. Co. v. Able Constr., Inc.,
1999 UT 69, ¶ 6, 983 P.2d 575. On the other hand, we accept the
district court’s factual findings following a bench trial absent
clear error. VT Holdings LLC v. My Investing Place LLC, 2019 UT
App 37, ¶ 17. Such findings “will be sustained on appeal unless
the appellant demonstrates that they are so lacking in support as
to be against the clear weight of the evidence.” Sauer v. Sauer,
2017 UT App 114, ¶ 14, 400 P.3d 1204 (quotation simplified).
¶19 	Finally, 	the 	company 	argues 	that 	the 	district 	court
erroneously 	determined 	that 	Willis 	and 	Darby’s 	pretrial
disclosure of Willis as a non-retained expert who could testify
about equipment valuation was sufficient under rule 26 of the
Utah Rules of Civil Procedure. “While interpretations of the
Utah Rules of Civil Procedure are questions of law reviewed for
correctness, we grant district courts a great deal of deference in
matters of discovery and review discovery orders for abuse of
discretion.” RJW Media Inc. v. Heath, 2017 UT App 34, ¶ 18, 392
P.3d 956 (quotation simplified).
ANALYSIS
I. Interpretation of the Stock Agreement
¶20 	The first two issues on appeal concern the interpretation
of section 7 of the stock agreement. We interpret contracts with
the goal of ascertaining “the intentions of the parties to the
contract.” Green River Canal Co. v. Thayn, 2003 UT 50, ¶ 17, 84

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P.3d 1134 (quotation simplified). “In interpreting a contract, we
look to the writing itself to ascertain the parties’ intentions, and
we consider each contract provision in relation to all of the
others, with a view toward giving effect to all and ignoring
none.” WebBank v. American Gen. Annuity Service Corp., 2002 UT
88, ¶ 18, 54 P.3d 1139 (quotation simplified). If the language in
the writing itself is unambiguous, “the parties’ intentions are
determined from the plain meaning of the contractual language,
and the contract may be interpreted as a matter of law.” Central
Florida Invs., Inc. v. Parkwest Assocs., 2002 UT 3, ¶ 12, 40 P.3d 599;
see also Brady v. Park, 2019 UT 16, ¶ 53 (explaining that we need
not look to “extrinsic evidence of the parties’ intent” to interpret
a 	contract 	where 	“the 	contract 	as 	a 	whole 	unambiguously
supports one interpretation over the other”).
¶21 	Section 	7 	of 	the 	stock 	agreement 	provides 	that 	the
purchase price for each share of stock in the company
shall be the per share adjusted book value . . . as of
the last audited financial statement of [the company]
preceding the event requiring the determination of
the 	purchase 	price 	. 	. 	. 	. Book value 	shall 	be
determined from the audited financial statement of
[the 	company] 	according 	to 	the 	accounting
practices 	previously 	utilized 	by 	the 	regular
accountant 	of 	[the 	company] 	who 	customarily
prepares 	[the 	company’s] 	financial 	statement.
Adjustment to the book value shall be made by
taking into account the fair market value of any
equipment with fair value in excess of ten thousand
dollars ($10,000).
(Emphasis added.) The company argues that the district court
misinterpreted the meaning of the terms “last audited financial
statement” and “any equipment” in arriving at the purchase
price for Willis’s and Darby’s shares. We address each argument

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in turn and affirm the district court’s interpretation of both
terms.
A. 	“Last Audited Financial Statement”
¶22 	The company first argues that the district court erred in
determining that the phrase “last audited financial statement”
“was 	a 	reference 	to 	the 	last 	completed 	audited 	financial
statement” and not to a financial statement that was still under
audit 	at 	the 	time 	of 	Willis’s and 	Darby’s resignations. 	Put
another 	way, 	the 	company 	argues 	that 	the 	district 	court
incorrectly determined that the purchase price should be based
on the 2013 financial statement, which was completed on April
15, 	2014, 	and 	not 	the 	2014 	financial 	statement, 	which 	was
completed on March 18, 2015—after Willis and Darby resigned.
¶23 	Under section 7 of the stock agreement, shareholders who
resign from the company are entitled to sell their shares back to
the company for a purchase price equal to “the per share
adjusted book value . . . as of the last audited financial statement
of 	[the 	company] 	preceding 	the 	event 	requiring 	the
determination of the purchase price.” We agree with the district
court that the plain language of this provision unambiguously
refers to the 2013 financial statement because it was the most
recent 	financial 	statement 	for 	which 	an 	audit 	had 	been
completed prior to the date of Willis’s and Darby’s resignations.
¶24 	The company argues that the term “audited” is not a past
tense verb, but an adjective that refers to a financial statement
that 	has 	been 	reviewed 	to 	ensure 	accuracy.2 	Under 	this
2. The company also argues that the provision stating that the
“[b]ook value shall be determined from the audited financial
statement of [the company] according to the accounting practices
previously utilized by the regular accountant of [the company]
who customarily prepares [the company’s] financial statement”
(continued…)

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interpretation, the company argues that section 7 refers to the
most recent “financial statement” for the company at the time of
the 	triggering 	event, 	regardless 	of 	whether 	that 	financial
statement was audited before or after the triggering event. But
“proper contract interpretation includes application of ordinary
rules of grammar,” and the company’s interpretation becomes
untenable 	when 	considering 	“the 	language, 	grammatical
structure, and punctuation” of the entire phrase. See Encon Utah,
LLC v. Fluor Ames Kraemer, LLC, 2009 UT 7, ¶ 37, 210 P.3d 263.
The absence of a comma or “and” between “last” and “audited”
signals that they are not coordinated adjectives modifying the
same noun. Chicago Manual of Style §§ 5.91, 6.36 (17th ed. 2017);
see also Primary Children’s Hosp. v. Utah Dep’t of Health, 1999 UT
App 348, ¶16 n.3, 993 P.2d 882 (“Rules of grammar provide that
when 	there 	is a 	comma 	between 	two 	coordinate 	adjectives
preceding a noun, each of those adjectives modifies the noun
itself.” (quotation simplified)). Instead, the syntax indicates that
the adjective “audited” modifies the noun (or, more precisely,
the adjective-noun pair) “financial statement” and the adjective
“last” “modifies the idea expressed by the combination of the
first adjective and the noun.” See Chicago Manual of Style § 5.91.
In other words, “audited financial statement” is an adjective-
(…continued)
unambiguously requires the purchase price to be based upon the
2014 financial statement. We disagree that this provision is
relevant 	to 	our 	determination 	of 	which 	audited 	financial
statement 	should 	be 	used. 	Rather, 	this 	sentence 	simply
prescribes that the book value, for purposes of determining the
purchase price, “shall be” the same book value reflected in the
last 	audited 	financial 	statement 	and 	not 	some 	other 	value
obtained from another accounting source. The parties do not
dispute that both audited financial statements complied with the
accounting 	practices 	previously 	utilized 	by 	the 	company’s
accountant.

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noun unit and the adjective “last” modifies the entire unit. See id.
§ 6.36
¶25 	When the phrase “the last audited financial statement
preceding the event requiring the determination of the purchase
price” is read as a whole, the plain meaning indicates that the
“financial statement” must be the “last” one “audited” before the
triggering event. We cannot, as the company wishes, read this
provision to refer to the “financial statement” that was for the
“last” calendar year even though it was “audited” at some
indeterminate time after the triggering event. The syntax used by
the parties does not permit such an interpretation.
¶26 	The parties do not dispute that “the event requiring the
determination of the purchase price” is Willis’s and Darby’s
resignations on January 20, 2015. Because the 2014 financial
statement had not yet been audited by that date, the 2013
financial statement was the “last audited financial statement”
within the meaning of section 7. As a result, the district court
properly granted partial summary judgment in favor of Willis
and Darby on this issue.
B. 	“Any Equipment”
¶27 	The company also argues that the district court erred in
determining that the term “any equipment” “unambiguously
refers to all equipment of the company” and in aggregating
categories of equipment to determine whether the equipment
value exceeded $10,000. Instead, the company asserts that “any
equipment” exclusively and unambiguously refers to individual
pieces of equipment listed in the audited financial statement.
¶28 	The stock agreement provides that “[a]djustment to the
book value shall be made by taking into account the fair market
value of any equipment with fair value in excess of ten thousand
dollars ($10,000).” Interpreting this provision, the district court
first determined that the language was unambiguous and that

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the 	phrase 	“any 	equipment” 	did 	not 	refer 	exclusively 	to
equipment listed in the company’s financial statement. When
contract language is unambiguous, “a 	court determines the
parties’ intentions from the plain meaning of the contractual
language as a matter of law.” Bakowski v. Mountain States Steel,
Inc., 2002 UT 62, ¶ 16, 52 P.3d 1179. Here, the phrase “any
equipment” is unqualified; no term in the stock agreement
limited “any equipment” in any way and specifically did not
limit it to only those pieces of equipment the company listed in
its audited financial statement. The district court thus correctly
determined that the equipment valuation could include all the
equipment the company owned, subject to the other terms of the
provision.
¶29 	The 	company 	also 	argues 	that 	the 	district 	court
“improperly allowed [Willis and Darby] to aggregate equipment
in order to meet the $10,000 threshold.” To the contrary, the
district court rejected six items included in Willis’s calculations,
finding that those items were “pieces of equipment that are
aggregated, and should be deleted from the list.” Instead, the
district court included only equipment that “would stand alone
and be able to be used to perform work.” Given that the district
court’s interpretation of “equipment” is—at least on this point—
consistent with that advanced by the company, the company’s
grievance on appeal is not with the court’s interpretation of the
contract but with its application of the contract’s terms to the
specific facts of the case.
¶30 	The district court’s determination as to what constitutes a
stand-alone unit of equipment is a factual finding to which we
afford substantial deference. See In re United Effort Plan Trust,
2013 	UT 	5, 	¶ 	17, 	296 	P.3d 	742 	(reiterating 	that 	“factual
determinations are entitled to the most deference” on appeal
(quotation 	simplified)). 	To 	overcome 	this 	deference, 	the
company must show that the district court’s finding was clearly
erroneous. See In re adoption of Baby B., 2012 UT 35, ¶ 40, 308 P.3d

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382. To carry its burden of persuasion, the company “must
marshal all relevant evidence presented at trial which tends to
support the findings and demonstrate why the findings are
clearly erroneous.” See Grimm v. DxNA LLC, 2018 UT App 115,
¶ 15, 427 P.3d 571 (quotation simplified).
¶31 	The company has not pointed to any evidence in the
record to suggest that the district court improperly aggregated
individual items of equipment. Its argument in this regard is
limited to its reply brief, in which it contends that item 10 on the
equipment valuation spreadsheet “was a pile of brackets, not a
piece of equipment,” and that “this was also the case with items
2, 10, 11, 27–31, and 44–47.” The company ignores the evidence
supporting the district court’s treatment of these items as a
single unit, including the testimony from Willis describing how
these items were purchased and used collectively. Because the
company has not demonstrated that the court’s findings are
against the clear weight of the evidence, we affirm the district
court’s factual findings as to what equipment constitutes a single
unit with a value of more than $10,000 for purposes of applying
the book value adjustment provision.
II. Willis’s Expert Testimony
¶32 	Finally, 	the 	company 	argues 	that 	the 	district 	court’s
admission 	of 	Willis’s 	expert 	opinion 	testimony 	as 	to 	the
valuation of equipment was erroneous because Willis had not
been properly disclosed as a non-retained expert under rule
26(a)(4) of the Utah Rules of Civil Procedure. Rule 26 requires a
party intending to present expert testimony from “any person
other 	than 	an 	expert 	witness 	who 	is 	retained 	or 	specially
employed to provide testimony in the case or a person whose
duties as an employee of the party regularly involve giving
expert testimony” 	to provide 	other 	parties with 	“a 	written
summary of the facts and opinions to which the witness is
expected to testify.” Utah R. Civ. P. 26(a)(4)(E). “If a party fails to

Willis v. Adams and Smith
20170626-CA 	16 	2019 UT App 84
disclose or to supplement timely a disclosure . . . , that party may
not use the undisclosed witness . . . at any hearing or trial unless
the failure is harmless or the party shows good cause for the
failure.” Id. R. 26(d)(4).
¶33 	In adopting this rule, the advisory committee noted that
“[t]here are a number of difficulties inherent in disclosing expert
testimony that may be offered from fact witnesses.” Id. R. 26
advisory committee notes. Consequently, rule 26(a)(4)(E) is “not
intended to elevate form over substance—all [it] require[s] is that
a party fairly inform its opponent that opinion testimony may be
offered from a particular witness.” Id. To fairly inform another
party that a non-retained witness may offer expert testimony,
the party offering the testimony must do more than “mere[ly]
mention that opinion may be offered” by that witness. RJW
Media Inc. v. Heath, 2017 UT App 34, ¶ 24, 392 P.3d 956. Rather, a
party must provide adequate notice of the witness and the
testimony to be given, which requires “that such witnesses be
identified and [that] the information about their anticipated
testimony . . . include any opinion testimony that a party expects
to elicit from them at trial.” Id. (quotation simplified).
¶34 	Here, Willis and Darby do not dispute that Willis was
subject to the requirements of rule 26(a)(4)(E), but they insist
they complied. To comply with the rule, Willis and Darby made
three different types of disclosures that gave the company notice
of the expert opinion testimony Willis would offer as to the
valuation of the company’s equipment. First, Willis and Darby
stated 	in 	their 	Rule 	26 	Initial 	Disclosures 	that 	Willis 	had
“information 	regarding 	the 	accounting 	practices 	of 	[the
company], 	the 	valuation 	of 	equipment, 	prior 	purchases 	of
minority shareholders interest[s], and discussions of the parties.”
Second, 	Willis 	and 	Darby 	attached 	a 	summary 	of 	Willis’s
valuation of the equipment as well as documentation of the
sources on which Willis based his valuation. Finally, in Willis’s
answers to the company’s first set of interrogatories, Willis

Willis v. Adams and Smith
20170626-CA 	17 	2019 UT App 84
responded to the company’s request that he “explain in detail
how [he] calculated the . . . fair market value of equipment in the
computation of damages that [he] included with [his] initial
disclosures.” Willis responded:
Fair market value was calculated by identifying the
value of the equipment from various sellers in May
2014. In many cases several prices were obtained
from several sources and averaged to determine
the fair market value. We used an old master
equipment list to identify the equipment subject to
the valuation because [the company] has failed to
provide us a Master Equipment list as of the date
of my termination despite our repeated requests.
¶35 	Having received Willis and Darby’s initial disclosures as
well 	as 	Willis’s 	summary 	of 	valuations, 	supporting
documentation, and answers to interrogatories, the company
was on notice regarding the expert opinions that would be
offered and the identity of the expert witness. Nevertheless, the
company maintains that it did not have notice of either fact. It
argues that the district 	court’s admission 	of 	Willis’s expert
testimony does not comply with this court’s characterization of
rule 	26(a)(4)(E)’s 	requirements 	in 	RJW 	Media 	where 	we
concluded 	that 	the 	non-retained 	expert 	disclosures 	were
deficient. Id. ¶ 26. However, in RJW Media, we addressed a
circumstance where the party seeking to admit the opinion
testimony 	of 	a 	non-retained 	witness 	had 	not 	made 	any
disclosures relating to expert testimony. In that case, the party
seeking 	to 	admit 	the 	testimony, 	disclosed 	“no 	facts 	or
opinions . . . whatsoever.” Id. Instead, that party only provided
“a list of general topics about which [the non-retained expert
witness], along with nine other witnesses, might testify.” Id. That
is not the case here. Rather than merely stating that Willis would
provide testimony on “equipment valuation,” Willis and Darby
provided a summary of what Willis’s opinion would be and

Willis v. Adams and Smith
20170626-CA 	18 	2019 UT App 84
ample documentation supporting that valuation. Willis further
described the manner in which the valuation was performed in
his 	answer 	to 	the 	company’s 	interrogatories. 	From 	these
documents, the company had notice of the opinion testimony
Willis would provide and the basis for that opinion.
¶36 	The 	company 	further 	argues 	that 	Willis 	and 	Darby
identified Willis as a fact witness only and never disclosed that
he 	would 	be 	offering 	expert 	opinions. 	“This 	court 	has
consistently held that disclosing a witness as a fact witness, by
itself, is insufficient to allow that witness to also present expert
testimony.” Ghidotti v. Waldron, 2019 UT App 67, ¶ 14. For
instance, 	in 	Ghidotti, 	the 	district 	court 	granted 	summary
judgment for the defendants because the plaintiffs could not
prove damages with the requisite degree of certainty without an
expert witness. Id. ¶ 7. One of the plaintiffs sought to offer her
own expert opinion regarding lost profits, but the district court
excluded that testimony because the plaintiff had never been
disclosed as a non-retained expert. Id. Although she had been
identified as a fact witness and the plaintiffs’ supplemental
disclosures 	had 	contained 	a 	damages 	calculation, 	“[n]either
[plaintiff] was identified as an individual who would testify
about damages.” Id. ¶¶ 5–6. Moreover, the district court found
that the late disclosure “would be harmful because the time set
for trial was approaching and none of the defendants had
retained experts in reliance on the [plaintiffs] not disclosing any
expert witnesses.” Id. ¶ 18.
¶37 	In contrast, the initial disclosures in this case specifically
identified Willis as a witness who would testify about “valuation
of equipment.” The district court determined that this disclosure,
together with the attached exhibit containing the fair market
value 	calculation, 	was 	sufficient 	to 	designate 	Willis 	as 	a
non-retained expert witness. Moreover, unlike in Ghidotti, any
deficiency in the disclosure was harmless in the context of this
case. Before his resignation, Willis was a long-time employee,

Willis v. Adams and Smith
20170626-CA 	19 	2019 UT App 84
shareholder, and member of the board of directors for the
company—a closely held corporation. The company was aware
that Willis had expertise in equipment valuation because he had
previously performed the equipment valuation for the buyout of
a former shareholder. Additionally, the company was aware that
Willis and Darby bore the burden of offering evidence to prove
the value of their shares and had not designated any other
expert. The district court specifically found that the company
was not surprised by Willis’s testimony and had the opportunity
to effectively cross-examine him. Under these circumstances, the
district court acted within its discretion in allowing Willis to
testify as a non-retained expert on the issue of damages.
CONCLUSION
¶38 	The district court did not err in interpreting the stock
agreement’s 	“last 	audited 	financial 	statement” 	term 	as
unambiguously 	referring 	to 	the 	company’s 	2013 	financial
statement. Nor did the district court err in determining that the
term “any equipment” unambiguously referred to every piece of
the company’s equipment capable of standing alone to perform
work and in applying those terms to the specific facts of this
case. Finally, the district court did not err in concluding that
Willis and Darby adequately designated Willis as a non-retained
expert in compliance with rule 26(a)(4)(E). Accordingly, we
affirm.