IHC Health Services, Inc. v. D & K Management, Inc.

2003 UT 5, 73 P.3d 320, 469 Utah Adv. Rep. 3, 2003 Utah LEXIS 12, 2003 WL 942560
CourtUtah Supreme Court
DecidedMarch 11, 2003
Docket20010508
StatusPublished
Cited by15 cases

This text of 2003 UT 5 (IHC Health Services, Inc. v. D & K Management, Inc.) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
IHC Health Services, Inc. v. D & K Management, Inc., 2003 UT 5, 73 P.3d 320, 469 Utah Adv. Rep. 3, 2003 Utah LEXIS 12, 2003 WL 942560 (Utah 2003).

Opinion

WILKINS, Justice:

11 D & K Management, Inc. ("D & K") appeals from an order granting summary judgment to IHC Health Services, Inc. ("IHC") and denying D & K's cross motion for summary judgment. 1 IHC seeks forfeiture of D & K's leasehold interest in proper *322 ty owned by IHC based on D & K's alleged default under the lease. D & K argues that the trial court erred in granting IHC's summary judgment motion because IHC waived its right to enforce any prior breach by forfeiture. D & K also argues that the trial court failed to properly consider its argument that IHC should be estopped from enforcing the forfeiture provision. We reverse and remand with regard to D & K's waiver argument, but hold that D & K's estoppel argument fails.

BACKGROUND

112 D & K operates an ongoing business on property owned by IHC in Murray City. D & K's lease of the subject property commenced in 1994 with IHC's predecessor-in-interest, Medical Plaza 9400 ("Medical Plaza"), as the lessor. IHC purchased the property in January 1998, retaining the principals of Medical Plaza, Dan and Steve Rideout (the "Ride-outs"), as property managers. IHC notified D & K of the sale by letter, which indicated that D & K should continue making payments "at the regularly scheduled time each month" to the Rideouts. Under the terms of the lease, D & K was required to pay rent by the first of each month with a ten-day grace period following.

T8 Prior to the sale of the property to IHC, D & K consistently paid rent late. Medical Plaza at times served D & K with notices to pay or quit, whereupon D & K tendered the overdue rent. D & K was sometimes assessed a late fee when it paid late. Subsequent to IHC's acquisition of the property, D & K's February 1998 rent check was deposited on February 24, 1998, fourteen days after expiration of the grace period. Though D & K's president, Kent Bangerter ("Bangerter"), testified in a deposition that he had no reason to believe February's rental payment was late, D & K contends that the February check was tendered after the grace period's expiration, while IHC argues that February's rent was timely paid. The rent for March 1998 went unpaid throughout the month of March and was not tendered until April 16, 1998, after D & K received a notice of default from IHC. The notice of default was premised on nonpayment of March and April 1998 rent. In accordance with the terms of the lease, IHC's notice declared a forfeiture of the lease and demanded surrender of the subject property within 30 days. Upon receipt of D & K's check for March rent, IHC promptly returned it uncashed to D & K on April 17, 1998. Despite the notice of default's statement to the contrary, April rent was actually cashed by IHC on April 8, 1998, before it sent the notice of default. The record is unclear as to how April rent was tendered by D & K. D & K asserts that it took the check to the Rideouts' secretary. IHC has asserted both that tender was to the Rideouts' secretary, and, to the contrary, that rent was tendered at one of IHC's corporate offices.

T4 From May 1998 until March 1999, D & K continued to tender rent by check each month. IHC did not cash these checks but retained possession of them. IHC sent a letter to D & K addressed as "Dear Tenant," in June 1998 demanding increased rental payments pursuant to the terms of the original lease agreement. Thereafter, IHC sent monthly billing statements and invoices to D & K noting amounts IHC believed were delinquent and demanding the increased rent amount, which D & K tendered each month. In other correspondence in January 1999, IHC, again addressing D & K as "Dear Tenant," demanded that D & K. provide proof of insurance to IHC in accordance with the original lease agreement. D & K. complied. In March 1999, the parties entered into an escrow agreement governing further collection of payments from D & K and reserving various rights of each party pending resolution of the dispute presently before this court. IHC filed a complaint in the trial court in May 1999, commencing this action on the lease to enforce forfeiture thereof. D & K answered, arguing that the original lease agreement was modified by the parties' course of dealing and IHC should be estopped from enforcing the original lease terms. D & K also argued that IHC's acceptance of April 1998 rent, demand for increased rent, and demand for proof of insurance waived IHC's right to enforce the forfeiture provision of the lease. Eventually, IHC filed a motion for judgment on the pleadings and D & K filed a cross motion for *323 summary judgment. The trial court's memorandum decision on those motions is the subject of this appeal.

T5 The trial court concluded that D & K had breached the lease by failing to make a rental payment in March 1998. It then addressed D & K's argument that IHC waived its right to enforce the default by way of forfeiture, concluding that IHC had not waived. In addition to many of the facts noted above, the trial court's statement of the facts contains the following: "IHC promptly returned the March and April checks to D & K." D & K argues that the trial court's determination of the waiver issue was in error and that the trial court failed to properly address D & K's estoppel argument.

ANALYSIS

I. STANDARD OF REVIEW

16 "Summary judgment is proper only where 'there is no genuine issue as to any material fact and .. . the moving party is entitled to a judgment as a matter of law.'" Peterson v. Coca-Cola USA, 2002 UT 42, 17, 48 P.3d 941 (quoting Utah R. Civ. P. 56(c)). However, unlike most cases, the legal conclusions underlying a trial court's grant of summary judgment on a waiver issue are reviewed with some measure of deference. See State v. Pena, 869 P.2d 982, 988-89 (Utah 1994) (noting paring back of waiver doctrine in Soter's, Inc. v. Deseret Fed. Sav. & Loan Ass'n, 857 P.2d 985 (Utah 1998), as recognition that de novo review was not appropriate in fact dependent area of waiver). In a waiver case decided on a motion for summary judgment, we must first inquire whether there are disputed material facts. If there are no disputed material facts, we consider all undisputed material facts in the light most favorable to the nonmoving party, Peterson, 2002 UT 42 at 17, 48 P.83d 941, before determining whether the trial court's decision on the application of the law of waiver to those facts falls within the bounds of its discretion.

II, WAIVER

17 Waiver is an intensely fact dependent question, requiring a trial court to determine whether a party has intentionally relinquished a known right, benefit, or advantage. Soter's, 857 P.2d at 940. In order to find that a waiver occurred, we held in Soter's that "a fact finder need only determine whether the totality of the civreum-stances "warrants the inference of relinquishment'" Id. at 942 (internal citation omitted). Although "any waiver 'must be distinctly made ... it may be express or implied." Id. at 940 (quoting Phoenix, Ins. v. Heath, 90 Utah 187, 61 P.2d 308, 311 (1986)).

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Bluebook (online)
2003 UT 5, 73 P.3d 320, 469 Utah Adv. Rep. 3, 2003 Utah LEXIS 12, 2003 WL 942560, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ihc-health-services-inc-v-d-k-management-inc-utah-2003.