Red Bridge Capital v. JAR Family Investment Co.

2014 UT App 21
_________________________________________________________
THE UTAH COURT OF APPEALS
RED BRIDGE CAPITAL, LLC,
Plaintiff and Appellee,
v.
JAR FAMILY INVESTMENT CO., LTD.; JAY R. RICE; AND
ANITA A. RICE,
Defendants and Appellants.
Per Curiam Decision
No. 20130365-CA
Filed January 24, 2014
Third District Court, Salt Lake Department
The Honorable Anthony B. Quinn
No. 120905905
Thomas J. Klc and Peter A. Klc, Attorneys
for Appellants
Timothy J. Dance and Brock N. Worthen,
Attorneys for Appellee
Before JUDGES JAMES Z. DAVIS, CAROLYN B. MCHUGH, and
J. FREDERIC VOROS JR.
PER CURIAM:
¶1 JAR Family Investment Co., Ltd., and guarantors Jay R. Rice
and Anita A. Rice (collectively, Defendants) appeal an order
granting summary judgment in favor of Red Bridge Capital, LLC
(Red Bridge). The judgment resulted from the district court’s
decisions to grant Red Bridge’s separate motions for summary
judgment on the claims in Red Bridge’s complaint and Defendants’
counterclaim. On appeal, Defendants argue that the district court
erred in concluding that both procedural and substantive
unconscionability are required to support a finding that a contract
provision is unconscionable and unenforceable. Defendants

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contend that the release provision in the settlement agreement was
substantively unconscionable and therefore unenforceable. We
affirm.
¶2 Beginning in 2005, Red Bridge made construction loans in
the original principal amount of $1.9 million to JAR Family
Investment, which loans were guaranteed by the Rices. After
Defendants defaulted on the loans, Red Bridge sued and obtained
a default judgment. Red Bridge and Defendants reached a
settlement regarding the judgment and related obligations that
they memorialized in an Agreement, to be effective June 14, 2012.
Under the terms of the Agreement, JAR Family Investment, as
Borrower, executed a promissory note in the principal amount of
$400,000 in favor of Red Bridge as Lender, and Jay and Anita Rice
jointly and severally guaranteed the obligation. In the Agreement,
the parties also exchanged mutual releases. After Defendants
defaulted in their obligations under the Agreement, Red Bridge
filed a second lawsuit, and Defendants counterclaimed, alleging
that Red Bridge was liable for damages as a result of (1)
misrepresentations made while the loan documents were being
negotiated; (2) Defendants’ inability to repay the loan; and (3) the
failure of Red Bridge or its affiliates to release a lien related to a
property covered by a deed of trust. Red Bridge filed separate
motions for summary judgment on its complaint and on
Defendants’ counterclaims.
¶3 The release provision of the Agreement that is the subject of
Defendants’ appeal states,
Borrower and Guarantor, individually and on behalf
of their respective affiliates do hereby release, waive,
acquit, and forever discharge the Lender and the
Lender’s subsidiaries, affiliates, officers, directors,
agents, employees, and predecessors in interest . . .
for, from and against any and all claims, demands,
debts, actions, causes of action, suits, contracts,
agreements, obligations, accounts, defenses, and

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20130365-CA 3 2014 UT App 21
liabilities of any kind or character whatsoever,
known or unknown, suspected or unsuspected, in
contract or in tort, at law or in equity, included
without implied limitation, such claims and defenses
as fraud, mistake, lender liability, breach of fiduciary
duty, duress and usury, which the Borrower and
Guarantor ever had, now have, or might hereafter
have against the Lender and its Affiliates, for or by
reason of any matter, cause or thing whatsoever,
which relates to, in whole or in part, directly or
indirectly: (i) the Loan; (ii) the Loan Documents;
(iii) any of the property encumbered by the Deeds of
Trust; (iv) the indebtedness evidenced by the Loan
Documents; or (v) this Agreement. The Borrower and
Guarantor shall not commence, join in, prosecute or
participate in any suit or other proceeding in a
position which is adverse to any position of the
Lender and its Affiliates arising directly or indirectly
from any of the foregoing matters.
¶4 None of the material facts underlying Red Bridge’s breach
of contract claim alleging that Defendants defaulted in the payment
of amounts due under the Agreement were subject to genuine
dispute. Similarly, there can be no genuine dispute that the
allegations in support of Defendants’ counterclaim related to the
matters within the scope of the release provision. Defendants’
counterclaim was based upon claims that arose prior to the
exchange of mutual releases in the Agreement. Where a release
agreement unambiguously bars a claim, summary judgment is
proper. See Palmer v. Davis, 808 P.2d 128, 132 (Utah Ct. App. 1991)
(concluding that a release is enforceable where its clear and
unambiguous language bars the claim).
¶5 Defendants opposed summary judgment, arguing that the
release provision was unconscionable and therefore unenforceable.
The Utah Supreme Court clarified the analysis applied to a claim
of unconscionability in Commercial Real Estate Investment, L.C. v.

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20130365-CA 4 2014 UT App 21
Comcast of Utah II, Inc., 2012 UT 49, 285 P.3d 1193. In that case, the
supreme court stated,
In determining whether a contract is unconscionable,
we use a two-pronged analysis. The first prong—
substantive unconscionability—focuses on the
agreement’s contents. The second prong—procedural
unconscionability—focuses on the formation of the
agreement. But substantive unconscionability alone
may support a finding of unconscionability.
Id. ¶ 42 (citations and internal quotation marks omitted). The
unconscionability analysis focuses on the relative fairness of the
obligations assumed at the time of contracting. Id. ¶ 45. The mere
fact that it later appears that a party made an improvident bargain
is not sufficient to support a finding of unconscionability. See id.
“[T]he courts cannot supervise decisions made in the business
world and provide relief. “Id. (citing Park Valley Corp. v. Bagley, 635
P.2d 65, 68 (Utah 1981)).
¶6 The district court ruled that the release provision was
neither procedurally nor substantively unconscionable under the
undisputed facts of this case. The fact that the district court stated
a belief that proof of both procedural and substantive
unconscionability is required before a contract provision can be
deemed unenforceable does not require reversal.
¶7 Defendants further argue that the district court erred by
concluding that the release was not substantively unconscionable
and unenforceable. Defendants have failed to adequately brief this
claim. Defendants have undertaken no analysis of the factors
relevant to an assessment of substantive unconscionability.
“Substantive unconscionability focuses on the contents of an
agreement, examining the relative fairness of the obligations
assumed.” Ryan v. Dan’s Food Stores, Inc., 972 P.2d 395, 402 (Utah
1998) (citations and internal quotations omitted). The supreme
court explained in Ryan,

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In determining substantive unconscionability, we
consider whether a contract’s terms are so one-sided
as to oppress or unfairly surprise an innocent party
or whether there exists an overall imbalance in the
obligations and rights imposed by the bargain . . .
according to the mores and business practices of the
time and place. Even if a contract term is
unreasonable or more advantageous to one party, the
contract, without more, is not unconscionable—the
terms must be so one-sided as to oppress . . . an
innocent party.
Id. (citations and internal quotations omitted).
¶8 “An issue is inadequately briefed when the overall analysis
of the issue is so lacking as to shift the burden of research and
argument to the reviewing court.” Mercado v. Hill, 2012 UT App 44,
¶ 11, 273 P.3d 385 (citations and internal quotations omitted).
“Implicitly, rule 24(a)(9) [of the Utah Rules of Appellate Procedure]
requires not just bald citation to authority but development of that
authority and reasoned analysis based on that authority.” State v.
Green, 2004 UT 76, ¶ 13, 99 P.3d 820 (citation and internal quotation
marks omitted). Because Defendants have not adequately briefed
their unconscionability claim, they have failed to carry their burden
of persuasion on appeal.
¶9 We affirm the district court’s decision granting summary
judgment in favor of Red Bridge on both the complaint and the
Defendants’ counterclaim.