Western Mortgage v. Walker

Opinions

Opinion

This opinion is subject to revision before final publication in the Pacific Reporter

2026 UT 30

IN THE

SUPREME COURT OF THE STATE OF UTAH

WESTERN MORTGAGE & REALTY COMPANY, TIM TIPPETT, and ESTATE of FRANK S. TIEGS, Appellants,

v.

KEITH T. WALKER and LORIN WALKER, Appellees.

No. 20250396

Heard April 1, 2026 Filed August 20, 2026

On Direct Appeal

Fifth District Court, Washington County The Honorable Andrew H. Stone No. 210500036

Attorneys:

Troy L. Booher, LaShel Shaw, Zaven A. Sargsian, Jack L. Darrington, Salt Lake City, for appellants Erik A. Olson, Jason R. Hull, Salt Lake City, M. Eric Olmstead, St. George, for appellees

JUSTICE NIELSEN authored the opinion of the Court, in which JUSTICE PETERSEN, ASSOCIATE CHIEF JUSTICE POHLMAN, JUSTICE JORGENSEN, and JUSTICE DENT joined.

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 As of January 31, 2026, “The Supreme Court consists of seven

justices.” UTAH CODE § 78A-3-101(1). Pursuant to Utah Supreme Court Standing Order No. 18, this court sat and rendered judgment in this matter as a division of five justices.

Opinion of the Court

Before this case was decided, CHIEF JUSTICE DURRANT recused himself and JUSTICE HAGEN stepped down from the court.

JUSTICE JORGENSEN and JUSTICE DENT, having reviewed the briefs and listened to the oral argument recording, substituted for CHIEF JUSTICE DURRANT and JUSTICE HAGEN and participated fully in this decision.

JUSTICE NIELSEN, opinion of the Court:

INTRODUCTION

¶1 Western Mortgage & Realty Company sued Keith and Lorin Walker to quiet title to 2,300 acres of land near Sand Hollow Reservoir in Washington County. The Walkers had planned to develop a community of 10,000 homes on that land but faced foreclosure in the wake of the 2008 financial crisis. To stabilize the project, the Walkers and Western entered into a contract under which Western was to clear title to the land and transfer the title to an entity that the parties would jointly control. Western was supposed to form the entity but never did.

¶2 Western filed suit to obtain sole ownership of the land, and the Walkers counterclaimed that Western had breached the contract and its fiduciary duties to the Walkers by refusing to form the promised entity. After a bench trial, the district court concluded that Western had breached the contract and its fiduciary duties. The court awarded the Walkers significant monetary damages, established a constructive trust over the entire project, granted the Walkers a 41% interest in the trust, and awarded attorney fees as consequential damages for Western’s breach of fiduciary duty. The court instructed the Walkers to submit their post-trial motion for fees under rule 73 of the Utah Rules of Civil Procedure. The parties signed a stipulation agreeing not to appeal any of these rulings.

¶3 The surprise came when in their rule 73 motion the Walkers revealed they had a hybrid contingency-hourly agreement with their attorneys. They had not disclosed this arrangement as a damage calculation under rule 26. But they argued in their rule 73 motion that any failure to disclose was for good cause or harmless and that the contingency agreement was foreseeable. Over Western’s objections that it was inappropriate to disclose consequential damage calculations for the first time in a rule 73 motion, the district court ruled that all motions for attorney fees must be decided under rule 73, that the contingency agreement was

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foreseeable, and that the Walkers’ failure to disclose the arrangement under rule 26 was for good cause or harmless.

¶4 We reverse. When a party seeks attorney fees under the fiduciary duty exception to the American Rule, those fees are consequential damages. And as with any claim for consequential damages, the party seeking them must comply with the procedures our rules lay out to receive them.

¶5 The Walkers disclosed their intention to seek attorney fees as consequential damages and the district court ruled that they could claim those fees, but the Walkers did not disclose their contingency fee or prove its foreseeability or amount at trial. The failure to disclose was not for good cause or harmless because it hampered Western’s ability to understand and defend against the Walkers’ claims. The Walkers thus cannot obtain the contingency fee as consequential damages because of these failures.

BACKGROUND

¶6 Keith and Lorin Walker planned to develop a property near Sand Hollow Reservoir in Washington County, but the 2008 mortgage crisis intervened. To save the project from foreclosure and mounting debts, the Walkers entered into an agreement with Western and its owner, Frank Tiegs. They signed an agreement which contemplated a joint venture to take over the project in the form of a shared legal entity to hold title to the land. That agreement did not contain an attorney fee provision. After the parties failed to move forward under the agreement, Western sued the Walkers to quiet title to the land. The Walkers counter-claimed for fraud, breach of contract, breach of fiduciary duty, and aiding and abetting breach of fiduciary duty against Tiegs and another Western executive, Tim Tippett. Relevant here, in a supplemental Utah Rule of Civil Procedure 26 disclosure the Walkers stated they would seek “amounts paid” to legal counsel and litigation experts as damages. See UTAH R. CIV. P. 26(a)(1)(C), (d)(5) (requiring that disclosures include “a computation of any damages claimed” and requiring supplemental disclosure for incomplete or incorrect information).1

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1 While the 2025 version of the Utah Rules of Civil Procedure

applies and there have been some subsequent changes to the rules, none of the changes impact our analysis. Thus, unless otherwise (continued . . .)

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¶7 The case proceeded to a bench trial. The district court rejected the Walkers’ fraud claims but granted judgment in their favor on their breach of contract and breach of fiduciary duty claims, ordering Western to pay the Walkers over $1 million and maintain the rest of the property in a constructive trust. The court also awarded attorney fees as consequential damages for Western’s breach of fiduciary duty and for Tiegs’ and Tippett’s aiding and abetting that breach. The court instructed the Walkers to submit their declaration of attorney fees in a post-trial rule 73 motion. See UTAH R. CIV. P. 73 (providing post-trial mechanism to claim attorney fees).

¶8 After the court’s ruling but before the Walkers submitted their declaration of attorney fees, the parties signed a stipulation on appellate rights. They waived the right to challenge any of the court’s decisions made prior to the stipulation but not “any future rulings or orders by the Court” including “any ruling or order related to the awarding to the Walkers of attorney fees.”

¶9 The Walkers then filed their rule 73 motion. Through this post-trial motion, Western learned for the first time that the Walkers were seeking a contingency fee based on a hybrid hourlycontingency agreement.2 In their pretrial rule 26 disclosures the Walkers had disclosed only an intent to seek “amounts paid” to legal counsel and litigation experts. In their post-trial rule 73 motion the Walkers acknowledged that the contingency fee could only be awarded as consequential damages to the extent that it was “reasonably foreseeable,” but argued that it was foreseeable. Their counsel, Erik Olson, declared that “any litigant involved in highstakes commercial litigation in Utah . . . should reasonably foresee that a plaintiff asserting claims may engage counsel on a contingency fee.” The Walkers also included a declaration by expert Richard Hoffman, opining on how the court might distribute the proceeds of the constructive trust to account for the

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noted, we cite the current version of the rules throughout this opinion for both convenience and clarity.

2 The Walkers’ agreement with their attorneys included hourly

rates discounted by 50% as well as a contingent fee on any recovery. The contingent fee was 15% if the value of the recovery was over $120 million or 10% if the value of the recovery was less than $120 million, and it included an additional 5% if post-trial litigation became necessary.

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contingency fee. The Walkers had not previously disclosed that they intended to rely on either Olson or Hoffman to prove consequential damages.

¶10 Western opposed the fee motion, arguing that the calculation for consequential damages must be disclosed before trial and the foreseeability of those damages must be proven at trial. Western also disputed foreseeability, pointing out that the Walkers testified at trial that they each had a net worth of around $4 million and submitting a declaration from attorney George Pratt who testified that commercial litigation matters like the one here “are almost always taken on an hourly basis.” Tippett also submitted a declaration stating that no one at Western knew the Walkers had retained their counsel on a contingency fee basis.

¶11 In reply, the Walkers provided another declaration from Olson, asserting that it would be “highly unusual” to present confidential attorney-client relationship information at trial. He also explained that his firm “has low overhead” and sought to rebut Pratt’s testimony that the contingency arrangement was unforeseeable. The Walkers also argued that even if rule 26 disclosure applied to attorney fees as damages, the failure to disclose was for good cause or harmless.

¶12 The district court granted the Walkers’ motion. The court framed the dispute in “two main points, one procedural and one substantive.” Procedurally, the court noted “an apparent conflict” between rule 73, governing fee applications, and rule 26, governing damage disclosures, “when the fees are sought as consequential damages.” It ruled that the mandatory language of rule 73(a) (“Attorney fees must be claimed by filing a motion . . . .”)3 as well as the exemption language in rule 26(a) (“This rule applies unless changed or supplemented by a rule governing disclosure and discovery in a practice area.”)4 allow parties to seek attorney fees by motion after judgment, even when those fees are claimed as undisclosed consequential damages. The court worried that “requiring disclosure [of billing arrangements] would necessarily place the party claiming fees in a disadvantaged position” because

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3 See UTAH R. CIV. P. 73(a) (2025) (emphasis added). Rule 73(a)’s

language was amended in May 2026 to “Attorney fees may be claimed by filing a motion,” UTAH R. CIV. P. 73(a) (2026) (emphasis added).

4 See UTAH R. CIV. P. 26(a).

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it “would potentially disclose much in the way of tactics, strategy and other work product.” The court also found good cause and harmlessness for the Walkers’ failure to disclose their contingency fee because the Walkers made clear from the start that they were expecting fee amounts to be calculated pursuant to rule 73, and because Western could have requested additional discovery after learning of the contingency fee but did not do so.

¶13 Substantively, the court found that the contingency fee was foreseeable. It relied on the facts and opinions from Olson’s declaration and noted that attorneys are permitted to testify about “the nature and value of legal services rendered in the case.” (Quoting UTAH R. PROF. CONDUCT 3.7(a)(2)).

¶14 The court awarded about $900 thousand for hourly fees and litigation expenses, which included a 15% markup to account for the contingency fee. It also increased the Walkers’ monetary judgment from about $1.4 to $1.7 million and their interest in the constructive trust from 41% to 48.235%, again to account for the contingency fee. The court later augmented the fee award for additional hourly fees and expenses.

¶15 Western appeals.

STANDARD OF REVIEW

¶16 The parties dispute the applicable standard of review. The Walkers argue that we should apply an abuse-of-discretion standard to the district court’s fee award because the rules are unclear about how to address attorney fees as consequential damages. They cite cases standing for the broad proposition that a district court has discretion to manage its docket, see Morton v. Cont’l Baking Co., 938 P.2d 271, 275 (Utah 1997) (“A trial judge is given a great deal of latitude in determining the most fair and efficient manner to conduct court business.”), and that a court has discretion under Utah Rule of Civil Procedure 26(d)(4) to excuse any failure to disclose, see Keystone Ins. Agency v. Inside Ins., LLC, 2019 UT 20, ¶ 12, 445 P.3d 434 (“We review a district court’s decision on sanctions under rule 26(d)(4) . . . for an abuse of discretion.”).

¶17 On the other hand, Western argues that we should review for correctness, noting that “legal questions that pertain to [an] attorney fees issue” are “reviewed for correctness.” Brady v. Park, 2019 UT 16, ¶ 32, 445 P.3d 395. They claim that the district court’s determination that rule 73 trumped any failure to disclose under

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rule 26 is a legal question that is not granted discretion. See Keystone, 2019 UT 20, ¶ 12 (“We review a district court’s interpretation of our rules of civil procedure, precedent, and common law for correctness.”).

¶18 We agree with Western. The district court’s decision to award an undisclosed contingency fee was based on its interpretation of how rule 73 should be read together with rule 26. The meaning of and interplay between these two rules is a question of law we review for correctness. See Jones v. Mackey Price Thompson & Ostler, 2020 UT 25, ¶ 86, 469 P.3d 879; see also USA Power, LLC v. PacifiCorp, 2016 UT 20, ¶ 90, 372 P.3d 629 (“A trial court’s conclusion as to what constitutes a reasonable attorney fee award is reviewed for an abuse of discretion” but only if the court “has employed the proper standard.” (cleaned up)).

ANALYSIS

¶19 Western appeals the district court’s rulings that a contingent fee sought as damages may be disclosed for the first time in a post-trial rule 73 motion, that any failure to disclose in this case was for good cause or harmless, and that the contingency fee was foreseeable. The Walkers argue that the district court’s rulings were correct or should be granted deference, and that Western waived its appellate arguments by signing a stipulation.

¶20 We reverse the district court. First, we hold that Western did not waive its arguments by signing the stipulation, which does not apply to the court’s rulings about the contingency fee. Second, we review the principles underlying claims for consequential damages and explain that consequential damages must be disclosed under rule 26, presented as foreseeable at trial through evidence or testimony, and (if awarded) calculated and finalized by the finder of fact, including through post-judgment proceedings as appropriate. This remains true where the claimed consequential damages happen to be attorney fees. Finally, we apply these principles and hold that the contingency fee was not awardable here. I. WESTERN HAS NOT WAIVED ITS RIGHT TO CHALLENGE THE DISTRICT COURT’S RULINGS

¶21 We first address the Walkers’ position that Western has waived several of its arguments by signing a stipulation as to appellate rights.

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¶22 The stipulation states that each party “waives any right to appeal from any of the Court’s decisions contained in the Findings of Fact and Conclusions of Law dated November 1, 2024, the proposed judgment filed herewith, and any order or other ruling of the Court entered prior to the date of this stipulation.” Importantly, the stipulation “does not preclude any party from appealing any future rulings or orders by the Court . . . including without limitation any ruling or order related to the awarding to the Walkers of attorney fees, expert fees, expenses, and litigation costs.” The parties signed this stipulation after the court had made its trial rulings and a proposed judgment had been filed but before the Walkers had submitted their rule 73 motion for fees.

¶23 Because the stipulation covers the court’s ruling that the Walkers shall “submit their declaration of attorney fees and other litigation expenses following entry of judgment” “pursuant to the provisions of rule 73,” the Walkers argue that Western “waive[d] the right to appeal from the trial court’s directive that the fee award to the Walkers be administered post-trial under rule 73.” Western responds that its appellate arguments are not barred by the stipulation because it “is not challenging the use of rule 73 to precisely quantify a consequential damages award based on fees” but rather the court’s decision (made four months after the stipulation) that rule 73 trumps rule 26’s disclosure requirements when fees are sought as damages and that the foreseeability of those damages may be proven after trial.

¶24 We agree with Western. The stipulation does not cover Western’s arguments about the disclosure and foreseeability of contingency fees as consequential damages. And the stipulation expressly carved out “any future rulings or orders by the Court,” including “any ruling or order related to the awarding to the Walkers of attorney fees.” At the very least, the court’s ruling on foreseeability and disclosure of the contingency fee was a future ruling “related to” the awarding of attorney fees. We thus hold that the stipulation does not bar any of Western’s claims on appeal.5

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5 Western alternatively argues that the stipulation should be set

aside as unknowing and involuntary. The Walkers respond that Western should have asked the trial court to set aside the stipulation and cannot now argue that the stipulation should be set aside. Because we agree with Western that the stipulation does not (continued . . .)

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II. CONSEQUENTIAL DAMAGES—INCLUDING FEES SOUGHT AS DAMAGES—MUST BE DISCLOSED UNDER RULE 26, MUST BE FORESEEABLE, AND MUST BE PROVEN AT TRIAL

¶25 We next review consequential damages principles and what a party must do to obtain these damages, including adequate disclosure and proof at trial of causation, foreseeability, and amount within a reasonable certainty. We then explain that a party seeking attorney fees and litigation expenses as consequential damages must meet these same requirements, with an additional foreseeability requirement for contingency fees.

A. Consequential or Special Damages Are a Type of Expectation Damage that Flow Naturally, but Not Necessarily, from an Injury

¶26 Consequential or special damages are “[l]osses that do not flow directly and immediately from an injurious act but that result indirectly from the act.” Damages: Consequential Damages, BLACK’S LAW DICTIONARY (12th ed. 2024).6 They are a type of expectation damage “reasonably within the contemplation of, or reasonably foreseeable by, the parties at the time the contract was made.” Trans-W. Petroleum, Inc. v. U.S. Gypsum Co., 2016 UT 27, ¶¶ 15, 17, 379 P.3d 1200 (cleaned up). Because they are “the natural, but not the necessary, result of an injury,” consequential damages are “not implied by law” and are “peculiar to the case at hand.” Id. ¶ 17 (cleaned up). In contrast, general expectation damages are “implied in law” because they are “the probable and necessary result of the injury.” Id. ¶ 16 (cleaned up). “They are damages which everybody knows are likely to result from the harm described.” Cohn v. J.C. Penney Co., 537 P.2d 306, 307 (Utah 1975).7

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bar its appellate arguments, it necessarily did not have to move to set that stipulation aside. An obstacle is an obstacle only if it is in your way.

6 Courts and commentators “often refer to general damages as

direct damages and consequential damages as special damages,” but this is a distinction “of phraseology, not substance.” Trans-W. Petroleum v. U.S. Gypsum Co., 2016 UT 27, ¶ 15 n.12, 379 P.3d 1200 (cleaned up).

7 An illustration from Cohn shows the difference between general and consequential damages in the tort context:

(continued . . .)

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¶27 While general damages are measured by “the market value of the very thing promised, at the time of performance,” Trans-W., 2016 UT 27, ¶ 16 (quoting DOBBS, LAW OF REMEDIES § 12.1(1) (2d ed. 1993)), consequential damages are measured “by the gains [the promised] performance could produce . . . or the loss that is produced by the absence of such performance,” id. ¶ 17 (quoting DOBBS, LAW OF REMEDIES § 12.1(1) (2d ed. 1993) (alterations in original)).

B. Consequential Damages Must be Disclosed Under Rule 26, and the Causation, Foreseeability, and Amount of Those Damages Must Be Proved at Trial 1. Consequential Damages Must be Disclosed or They Are Not Recoverable

¶28 To recover consequential damages, the party claiming them must disclose the fact of those damages, their amount, and all discoverable material on which that amount is based. UTAH R. CIV. P. 26(a)(1)(C) (requiring that initial disclosures include “a computation of any damages claimed and a copy of all discoverable

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Plaintiff sues defendant for blowing up his dam in the river and claims damages in the amount of $5,000. His proof shows the cost of repairs to the dam to be $1,000. He offers evidence to the effect that he had a water mill which had to be shut down for two months during the rebuilding of the dam and that he lost profits in the amount of $4,000 as a result thereof. The rebuilding of the dam is an item of general damages, but the loss of profits due to inoperation of the mill is an item of special [or consequential] damage because it is peculiar to his case. Another man might have his dam blown up and might not even own a mill, or it might not be operative. Still another man might have special damages because he could not irrigate his farm as a result of the destruction of the dam which he owned and the lowering of the water below the bottom of his l[a]teral ditch. Each dam owner would need to set forth his particular special damages because such special damages do not of necessity follow as a result of the tort.

Cohn v. J.C. Penney Co., 537 P.2d 306, 307 (Utah 1975).

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documents or evidentiary material on which such computation is based”); see also Keystone Ins. Agency v. Inside Ins., 2019 UT 20, ¶ 17, 445 P.3d 434 (explaining that both “the fact of damages and the method for calculating the amount of damages must be apparent in initial disclosures” (cleaned up)); Build, Inc. v. Utah Dep’t of Transp., 2018 UT 34, ¶¶ 43–55, 428 P.3d 995 (affirming dismissal of consequential damages claim because plaintiff “never disclosed an amount of consequential damages or a basis for calculating it”). If a party does not know the full consequential damages amount, it must disclose what it has and must supplement those disclosures “as more information [is] acquired through discovery.” Keystone, 2019 UT 20, ¶ 17 n.5; see also UTAH R. CIV. P. 26(d).8

¶29 Rule 26 requires early disclosure of damages information because, among other things, it enables both the opposing party and the court to determine the proportionality of other discovery requests. UTAH R. CIV. P. 26(b)(3)(A)–(C) (listing proportionality factors, including “the amount in controversy,” “the burden or expense” of production, and “the overall case management”); see also id. R. 26 advisory committee’s note to 2011 amendment (“Early disclosure of damages information is important. Among other things, it is a critical factor in determining proportionality.”).9 And rule 26 imposes a stiff penalty for failure to disclose: “If a party fails to disclose or to supplement timely a disclosure or response to

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8 We also note that consequential damages “must ordinarily be

pleaded in order to be recovered.” Trans-W., 2016 UT 27, ¶ 15 (cleaned up); see also UTAH R. CIV. P. 9(h) (“If an item of special damage is claimed, it must be specifically stated.”). This rule exists because, unlike general damages “which everybody knows are likely to result from the harm described,” and “may be recovered under a general allegation of damage,” consequential damages are “peculiar to [an individual’s] case,” and “must be specially pleaded” to “let his adversary know what will be involved.” Cohn, 537 P.2d at 307–08 (cleaned up).

Though there may be some question as to whether the Walkers pleaded their consequential damages with the requisite level of specificity, we do not discuss the pleading requirement further here because the parties did not raise the issue.

9 To the extent that fee arrangements implicate attorney-client

privilege, the party can raise those concerns, and the court can deal with them under Utah Rule of Civil Procedure 26(b)(9).

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discovery, that party may not use the undisclosed witness, document, or material at any hearing or trial unless the failure is harmless or the party shows good cause for the failure.” Id. R. 26(d)(4). This hefty price reflects both the toll that a failure to disclose can have on the opposing party and the desire to avoid avoidable surprise in litigation. See id. R. 26 advisory committee’s note to 2011 amendment (explaining that penalties for lack of disclosure ensures that the disclosure requirement is “meaningful” and “discourage[s] sandbagging”). And we have not been hesitant to exact it. See Keystone, 2019 UT 20, ¶¶ 16–21, 27 (affirming exclusion of damages evidence for failure to disclose); Build, 2018 UT 34, ¶¶ 43–55 (affirming dismissal of consequential damages claim for lack of disclosure); Bodell Constr. Co. v. Robbins, 2009 UT 52, ¶¶ 34–39, 215 P.3d 933 (similar).

2. A Party Seeking Consequential Damages Must Prove Causation, Foreseeability, and the Amount Within a Reasonable Certainty as Part of Its Case- in-Chief10

¶30 After pleading and disclosure, a party seeking to recover consequential damages must then prove them. The seeking party must prove three things: “(1) that consequential damages were caused by the contract breach; (2) that consequential damages ought to be allowed because they were foreseeable at the time the parties contracted; and (3) the amount of consequential damages within a reasonable certainty.” Mahmood v. Ross, 1999 UT 104, ¶ 20, 990 P.2d 933. While framed in contractual terms, we apply this same test to consequential damages that arise from a tort such as breach of fiduciary duty. See Campbell v. State Farm Mut. Auto. Ins., 2001 UT 89, ¶ 121, 65 P.3d 1134 (“Although the foreseeability of damages test is generally limited to the contractual realm, we note that its use to determine damages in the context of tortious third- party, bad faith claims is justified since such claims arise only because of the contractual relationship of the parties.” (cleaned up)), rev’d on other grounds, 538 U.S. 408 (2003); see also below ¶ 33.

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10 The Walkers argue that this issue is unpreserved and complain that Western cites to authority it didn’t raise below. But we agree with Western that this issue was preserved, and that Western is merely offering additional authority on appeal for the position it argued below, which our cases permit. See Torian v. Craig, 2012 UT 63, ¶ 20, 289 P.3d 479.

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¶31 These elements are part of the seeking party’s case-inchief , which is ordinarily presented at trial. See Canyon Country Store v. Bracey, 781 P.2d 414, 419–20 (Utah 1989) (explaining that issue of attorney fees as consequential damages “was part of Canyon Country’s case-in-chief” and was properly “submitted to the jury as an element of damages”); Meadowbrook, LLC v. Flower, 959 P.2d 115, 117–19 & n.9 (Utah 1998) (holding that “prevailing party” attorney fees—those awarded by contract or statute—may be sought through post-trial motion, but clarifying that this rule does not apply to fees that are “an item of consequential damages,” because “evidence of such fees must be presented to the jury according to established trial procedure”).11 Failure to prove any of these elements at the appropriate moment dooms the consequential damages claim. See, e.g., Gables at Sterling Village Homeowners Ass’n v. Castlewood-Sterling Village I, LLC, 2018 UT 04, ¶¶ 72–77, 417 P.3d 95 (explaining that a party’s post-trial claim for fees as consequential damages failed because the party failed to “prove that he was entitled to the fees” during trial).

¶32 To prove causation, the party seeking consequential damages must show proximate cause—“that cause which, in natural and continuous sequence . . . produces the injury and

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11 Of course, the parties may agree—or the court may order—

that the issue of consequential damages be determined in a post- trial proceeding. See Billings v. Union Bankers Ins., 918 P.2d 461, 464 (Utah 1996) (explaining that the parties agreed to litigate the issue of an attorney contingency fee as consequential damages in a post- trial proceeding); cf. Canyon Country Store v. Bracey, 781 P.2d 414, 419–20 (Utah 1989) (noting that the trial court rejected plaintiffs’ request that fees as consequential damages “be determined in a separate hearing after trial” because the defendants “objected”). But this type of agreement or order does not excuse a party from making timely damage disclosures. The defendant cannot be left “to guess at what damages [plaintiff is] seeking and how they [are] to be calculated,” Keystone Ins. Agency v. Inside Ins., 2019 UT 20, ¶ 18, 445 P.3d 434, even if damages are handled in a post-trial proceeding, see Billings, 918 P.2d at 464; Brief of Appellee and Cross-Appellant at 41, Billings v. Union Bankers Ins., 918 P.2d 461 (Utah 1996) (No. 940098) (Mar. 10, 1995) (indicating that defendant was aware of plaintiff’s contingency fee before it agreed to litigate fees as damages post-trial; the contingency fee was a matter of public record).

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without which the result would not have occurred.” Harline v. Barker, 912 P.2d 433, 439 (Utah 1996) (cleaned up). “Proximate cause is generally determined by an examination of the facts, and questions of fact are to be decided by the jury,” or by the judge in a bench trial. Mahmood, 1999 UT 104, ¶ 22. The “evidence must do more than merely raise a conjecture,” for “where the proximate cause of the injury is left to conjecture, the plaintiff must fail as a matter of law.” Id. (cleaned up); see id. ¶¶ 23–29 (reversing jury award of consequential damages where there was insufficient evidence linking the breach to the alleged damages).

¶33 To prove foreseeability, a party must show that the consequential damages were “reasonably within the contemplation of, or reasonably foreseeable by, the parties at the time the contract was made.” Beck v. Farmers Ins. Exch., 701 P.2d 795, 801–02 (Utah 1985); Billings v. Union Bankers Ins., 918 P.2d 461, 466 (Utah 1996) (same). When, as here, a tort claim arises out of a contractual relationship, “the time the contract was made” is the appropriate time to measure the reasonable foreseeability of damages. See Campbell, 2001 UT 89, ¶¶ 120–21 (cleaned up); Norman v. Arnold, 2002 UT 81, ¶ 35, 57 P.3d 997 (noting that “a claim for breach of fiduciary duty is an independent tort that, on occasion, arises from a contractual duty”). “Whether particular damages may be considered foreseeable will always hinge upon the nature and language of the . . . contract and the reasonable expectations of the parties.” Machan v. UNUM Life Ins., 2005 UT 37, ¶ 17, 116 P.3d 342 (cleaned up). There is an additional foreseeability requirement unique to contingency fee cases that we discuss below. See below

¶ 37.

¶34 To prove the amount of consequential damages with reasonable certainty, a party must present “sufficient evidence to enable the trier of fact to make a reasonable approximation.” Cook Assocs., Inc. v. Warnick, 664 P.2d 1161, 1166 (Utah 1983). While the evidence “must not be so indefinite as to allow the factfinder to speculate as to [damage amounts], some degree of uncertainty is tolerable.” Diversified Striping Sys. Inc. v. Kraus, 2022 UT App 91, ¶ 55, 516 P.3d 306 (cleaned up). “It is, after all, the wrongdoer, rather than the injured party, who should bear the burden of some uncertainty in the amount of damages.” Atkin Wright & Miles v. Mountain States Tel. & Tel. Co., 709 P.2d 330, 336 (Utah 1985). When the consequential damages are attorney fees, evidence may include timesheets, billing contracts, and testimony.

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C. The Rules for Claiming Consequential Damages Apply to Claims for Attorney Fees as Consequential Damages

¶35 These general rules for consequential damages apply to all claims for consequential damages, including attorney fees when sought as damages of that type.

¶36 In general, Utah follows the so-called American Rule: a prevailing party may not recover attorney fees from the opposing side unless provided for in statute or contract. See Turtle Mgmt., Inc. v. Haggis Mgmt., Inc., 645 P.2d 667, 671 (Utah 1982). We have recognized a limited number of exceptions to the American Rule, and some of these require a party to seek fees as consequential or special damages.12 At issue here is a fiduciary-duty exception based on our statement in Campbell that “breach of a fiduciary obligation is a well-established exception to the American rule.” 2001 UT 89,

¶ 122. Though we make no holding today on whether attorney fees may be awarded as damages for every breach of fiduciary duty,13

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12 Cases permitting fees to be sought as consequential damages

include claims for slander of title, Neff v. Neff, 2011 UT 6, ¶¶ 77–86, 247 P.3d 380; the third-party litigation exception (also known as the collateral litigation exception, wrong-of-another-doctrine, or tortof -another doctrine), Pac. Coast Title Ins. v. Hartford Acc. & Indem. Co., 325 P.2d 906, 907–08 (Utah 1958), Collier v. Heinz, 827 P.2d 982, 983–84 (Utah Ct. App. 1992); certain employment contracts, Heslop v. Bank of Utah, 839 P.2d 828, 840–41 (Utah 1992); and bad faith breach of insurance contracts, Billings, 918 P.2d at 468, Campbell v. State Farm Mut. Auto. Ins., 2001 UT 89, ¶¶ 118–25 & nn.20, 21, 65 P.3d 1134, rev’d on other grounds, 538 U.S. 408 (2003); see also Saleh v. Farmers Ins. Exch., 2006 UT 20, ¶ 25 n.4, 133 P.3d 428. Many of these exceptions to the American Rule came about by the court exercising its “inherent equitable power” to award reasonable fees when appropriate in the interest of justice and equity. See Stewart v. Utah Pub. Serv. Comm’n, 885 P.2d 759, 782 (Utah 1994), superseded on other grounds by UTAH CODE § 78B-5-825.5, as recognized in Laws v. Grayeyes, 2021 UT 59, ¶¶ 50, 54, 498 P.3d 410.

13 We have not had occasion to reach this question. See Gregory

& Swapp, PLLC v. Kranendonk, 2018 UT 36, ¶ 48, 424 P.3d 897 (declining to address the “important question” of whether Campbell “meant to operate as an endorsement of attorney fee awards in all breach of fiduciary duty cases” after determining that there was (continued . . .)

15

we re-affirm Campbell’s holding that any such fees must be sought as damages, and thus must be foreseeable. Id. ¶¶ 120–25.

¶37 As we explained in USA Power, LLC v. PacifiCorp, the foreseeability requirement for contingent attorney fees as damages has two parts: First, as for all claims for consequential damages, it must have been foreseeable at the time of contracting (here, when the fiduciary duty arose) that a breach would cause the non- breaching party to incur attorney fees as damages. 2016 UT 20, ¶ 94, 372 P.3d 629.14 Second, if a contingency fee forms part of the damages calculation, the specific contingency arrangement must also have been foreseeable at that time. Id.15 As with other consequential damage elements, the foreseeability of contingency

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insufficient evidence to support a breach of fiduciary duty claim); USA Power, LLC v. PacifiCorp, 2016 UT 20, ¶ 95 nn.142, 147, 372 P.3d 629 (acknowledging court of appeals cases awarding attorney fees for breach of fiduciary duty based on Campbell but “express[ing] no opinion” on “the types of cases that permit parties to seek attorney fees as damages”). We decline to resolve this question here because the parties stipulated to not challenge the district court’s ruling that fees were available for breach of fiduciary duty. But in an appropriate case we will examine how far the fiduciary duty exception should extend.

14 This requirement is merely a restatement of the general foreseeability requirement for consequential damages, set forth above in ¶ 33. See also Billings, 918 P.2d at 468 (holding that “as consequential damages, attorney fees are recoverable only if they were reasonably within the contemplation of, or reasonably foreseeable by, the parties at the time the contract was made” (cleaned up)).

15 In the two cases where we upheld as foreseeable a contingency fee awarded as consequential damages—Campbell and Billings—both foreseeability requirements were satisfied. See USA Power, 2016 UT 20, ¶ 94; id. nn.135, 136, 137. We also upheld the award of a contingency fee as consequential damages in Canyon Country Store, 781 P.2d at 419–20. But we did not discuss foreseeability there because that question was not before the court. See id.

16

fees as damages must normally be proved at trial as an element of a party’s case-in-chief. See above ¶ 31.16

¶38 In sum on this point, attorney fees sought under a Campbell-style exception to the American Rule must be sought as consequential damages and must meet the usual requirements for consequential damages—specific pleading, disclosure, causation, foreseeability, and amount. If a contingency fee forms part of the damages calculation, it must have not only been foreseeable that a breach would cause the non-breaching party to incur attorney fees, but also that the specific contingency arrangement was foreseeable. USA Power, 2016 UT 20, ¶ 94.17 III. THE WALKERS CANNOT RECOVER THEIR CONTINGENCY FEE AS CONSEQUENTIAL DAMAGES BECAUSE THEY FAILED TO DISCLOSE IT OR PROVE ITS FORESEEABILITY AT TRIAL; THE FAILURE TO DISCLOSE WAS NOT FOR GOOD CAUSE OR HARMLESS

¶39 With these principles in mind, we now turn to the district court’s award of the Walkers’ contingency fee as consequential damages for Western’s breach of fiduciary duty. The Walkers would be entitled to that fee as consequential damages if they properly disclosed it under rule 26 and then proved (1) that the fee damages were caused by Western’s breach of fiduciary duty, (2) that the specific fee arrangement was foreseeable at the time the fiduciary duty arose (here, when the parties entered into their agreement), and (3) that the fee amount is accurate within reasonable certainty. See Trans-W. Petroleum v. United States Gypsum Co., 2016 UT 27, ¶ 19, 379 P.3d 1200; USA Power, LLC v. PacifiCorp, 2016 UT 20, ¶ 94, 372 P.3d 629.

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16 In Campbell, for example, the plaintiffs put on evidence at trial

through several witnesses that contingency fee arrangements like the one at issue there “have been around for decades, are wellknown , and are in fact the most likely form of attorney fee arrangement” in that type of lawsuit. 2001 UT 89, ¶ 125. The defendant in Campbell also admitted that contingency fees were “common” in its industry. Id.

17 Western also argues that the Walkers offered improper and

undisclosed expert testimony by having their attorney submit a declaration about the foreseeability of the contingency fee. But given our reversal on other bases, we need not address this argument.

17

¶40 We conclude that while the Walkers proved causation of their contingency fee damages during trial, they failed to disclose them as required under rule 26 and did not prove either foreseeability or amount at trial.18 A. The Walkers Have Lost the Opportunity to Recover Their Contingency Fee as Damages by Failing to Disclose It as Part of Their Damages Amount and Prove Its Foreseeability at Trial

¶41 From the beginning of this dispute through trial, the Walkers never disclosed that a contingency fee formed part of their consequential damages attorney fee computation. They first disclosed their claim for fees and legal expenses as damages in an amended initial disclosure, stating they intended to seek “amounts paid to legal counsel” and “amounts paid to litigation experts”— that is, expenses they actually incurred, not a contingency kicker to be paid by the opposing party. They did not disclose any method for calculating these damages, other than that they expected the factfinder to “determine their entitlement to these damages” and the court to “determine the amount in accordance with rule 73.” A few months later, the district court awarded them fees and expenses for a supplemental deposition, but the Walkers again declined to provide information for calculating their fees, stating they would wait until after trial.

¶42 Nor did the Walkers provide this information during trial.

In accordance with their expert disclosures, their damages expert testified at trial that the “proceeds from revenues generated by the

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18 We clarify that the calculation of reasonable attorney fees and

expenses as damages may be finalized in a post-trial proceeding, most likely in a rule 73 proceeding. After all, the totals for these fees cannot be finalized until the trial ends—when the billing stops— and may even include so-called fees-on-fees. See Aston v. Chronicle- Progress LLC, 2026 UT 7, ¶ 28, 587 P.3d 981 (discussing fees-onfees ). But the computation of these fee damages cannot be disclosed for the first time post-trial if the computation includes a contingency fee or seeks more than the usual “reasonable” attorney fee. See above ¶¶ 28–29, 31, 37–38; see also USA Power, 2016 UT 20,

¶ 94 n.138 (noting that if fee damages do not include a contingency fee, “[t]here is no need to conduct a separate analysis of whether the amount of the award was foreseeable unless the party being awarded fees seeks more than the usual ‘reasonable’ attorney fee”).

18

constructive trust property should continue to be split 59-41 between the parties.” But this contradicted his post-trial testimony that the Walkers should receive 48.235% of the constructive trust property to account for the contingency fee. The Walkers never disclosed that they would provide testimony or evidence as to the foreseeability of a contingency fee or how a contingency fee should be calculated. They were silent throughout discovery and trial as to these damage computations.

¶43 It was not until their post-trial rule 73 motion that the Walkers disclosed the contingency fee and presented evidence as to its foreseeability. This was too late. As explained above, damage disclosures must be made during initial disclosures or as early as possible through supplemental disclosures, before fact discovery finishes. See above ¶¶ 28–29; see also Bodell Constr. Co. v. Robbins, 2009 UT 52, ¶ 35, 215 P.3d 933. Western did not have an opportunity to challenge the foreseeability of the contingency fee in discovery and at trial because of this lack of disclosure.

¶44 The Walkers’ failure to disclose and provide testimony and evidence at trial left their contingent fee without proof of foreseeability. Without that proof, the fee was not awardable under Campbell’s rule. See Campbell v. State Farm Mut. Auto. Ins., 2001 UT 89, ¶¶ 120–25, 65 P.3d 1134, rev’d on other grounds, 538 U.S. 408 (2003); USA Power, 2016 UT 20, ¶ 94. As explained above, in Campbell the foreseeability of the contingency fee was litigated during trial. See above ¶ 37 nn.15, 16. While the parties may consent to try these issues at a later time, the default without consent is trial.19

¶45 Had the Walkers disclosed the contingency fee and presented evidence of its foreseeability at trial the district court may have reached the same conclusion and awarded the contingency fee as damages. But that isn’t what happened. The district court did not rule on the foreseeability of the contingency fee in its trial order because the Walkers failed to disclose it or

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19 As discussed above, ¶ 31 n.11, the parties may knowingly

agree to litigate foreseeability post-trial. But here Western never agreed to litigate foreseeability post-trial; it had no way of knowing that the foreseeability of a contingency fee was at issue because the Walkers had not disclosed they were seeking a contingency fee.

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prove its foreseeability at trial. The Walkers lost the opportunity to obtain their contingency fee.

B. Rule 26 Applies to Attorney Fees Awarded as Damages, and the Walkers’ Failure to Disclose Was Not for Good Cause and Was Not Harmless

¶46 The district court didn’t think that rule 26 applied, or that if it did, then the failure to disclose was for good cause or harmless. We disagree.

¶47 The district court concluded that rule 26 did not apply where attorney fees were at issue—regardless of the basis for recovery—because the rule said it did not apply where it was “changed or supplemented by a rule governing disclosure and discovery in a practice area.” (Quoting UTAH R. CIV. P. 26(a)). In its view, rule 73 governed the “practice area” of attorney fees. This misunderstands both the plain meaning of “practice area” and the structure of rule 26.

¶48 A “practice area,” in legal circles, means the kind of cases that an attorney does—at a high level of generality, things like divorce, criminal, bankruptcy, etc. See, e.g., In re Hughes & Coleman, 60 S.W.3d 540, 543 (Ky. 2001) (discussing various “practice areas” in attorney advertising, such as “international,” “corporate,” “litigation,” “bankruptcy,” and personal injury); Carter v. Ann Arbor City Att’y, 722 N.W.2d 243, 252 (Mich. Ct. App. 2006) (“Defendant was seeking to hire two attorneys to practice in specific areas of the law: labor law and zoning and planning law— not a general lawyer with experience in a multitude of practice areas.”). The structure of rule 26 reflects this understanding, having specialized discovery rules for domestic relations, personal injury, unlawful detainer, and probate. UTAH R. CIV. P. 26.1–26.4. Attorney fees are not confined to a particular practice area and do not constitute a “practice area” in and of themselves under rule 26.20

¶49 The district court alternatively ruled that even if rule 26 were applicable to claims of attorney fees as consequential

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20 Of course, an attorney’s particular practice may be quite specialized within a given practice area—perhaps even regarding attorney fees. But to our knowledge, there is no such thing as an attorney-fee attorney. And even if there were, it would not control the meaning of “practice area” in rule 26 because the structure of rules 26.1 through 26.4 make the proper level of generality clear.

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damages, the Walkers’ failure to disclose their contingency arrangement was for good cause or was harmless. Again, we disagree.

¶50 The district court determined there was good cause for the Walkers’ failure to disclose because rule 73 permitted—or as the district court saw it, required—a party to claim fees after trial. That may be true when fees are sought under a statute or contract and result from the litigation rather than the original wrongdoing.21 But not so with fees as consequential damages. Indeed, the Walkers were not seeking fees in the rule 73 sense, but rather were seeking consequential damages that happened to be owed to an attorney. The plain language of rule 26 requires disclosure of the “computation of any damages claimed.” UTAH R. CIV. P. 26(a)(1)(C). Rule 73 does not alter this requirement when the claimed damages happen to be attorney fees.22 Cf. Bodell Constr.,

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21 Black’s Law Dictionary defines “consequential damages” as

“[l]osses that do not flow directly and immediately from an injurious act, but that result indirectly from the act.” Damages: Consequential Damages, BLACK’S LAW DICTIONARY (12th ed. 2024) (emphases added). That is, consequential damages are a consequent of the alleged wrongdoing. Where a statute or contract provides for attorney fees to a prevailing party, those damages are a consequent of the litigation rather than of the alleged wrongdoing.

22 Granted, the language of rule 73—especially the mandatory

“[a]ttorney fees must be claimed” language from the 2025 version of the rule—can lead to confusion about what is required when fees are sought as damages. See UTAH R. CIV. P. 73(a) (2025) (emphasis added). But we have long looked to substance rather than labels. See, e.g., Gillmor v. Wright, 850 P.2d 431, 433 (Utah 1993) (“On appeal, we disregard the labels attached to findings and conclusions and look to the substance.”). Here, the label of “attorney fees” under rule 73 would seem to apply to all claims for attorney fees, but the substance of the rules demonstrates that rule 73 is about claiming only a subset of attorney fees—those awarded under a statute or contract. See Gables at Sterling Vill. Homeowner’s Ass’n. v. Castlewood-Sterling Vill. I, LLC, 2018 UT 04, ¶ 76, 417 P.3d 95 (“A post-trial motion is not the appropriate vehicle to litigate a claim for fees not based upon a statute or prevailing party attorney fees clause.”). It is not about claiming attorney fees sought as damages. Of course, as the parties point out, rule 73 also can play a (continued . . .)

21

2009 UT 52, ¶ 38 (rejecting claim that good cause existed for delayed disclosure of damage computation because the party “complied with generally accepted litigation practices” (cleaned up)); see also USA Power, 2016 UT 20, ¶ 95 (holding that a contingency fee award is available “only when the award is sought as damages and the contingency fee arrangement was foreseeable”(cleaned up)).

¶51 The district court also found good cause for the nondisclosure because it approved of the plan to proceed under rule 73 with no objection from Western. But when the Walkers made this request, the court—like Western—had no way of knowing that the Walkers were waiting to disclose a damages computation that included a contingency fee. The Walkers cannot claim good cause when they didn’t disclose the required information and then rely on an unopposed ruling based on that withheld information.

¶52 The district court concluded that the failure to disclose was harmless because Western could have requested additional discovery or time after the contingency fee was finally revealed. But rule 26 places the burden of disclosure on the party seeking damages, and any action Western might have taken “does not free [the Walkers] from [their] obligation to disclose a computation of damages.” Keystone Ins. Agency v. Inside Ins., 2019 UT 20, ¶ 20, 445 P.3d 434; see also RJW Media Inc. v. Heath, 2017 UT App 34, ¶ 29, 392 P.3d 956 (“An insufficient disclosure by one party does not shift the burden and risk to resolve the insufficient disclosure to the other party[.]”); Black Diamond Fin. LLC v. Big Cottonwood Pine Tree Water Co., 2020 UT App 90, ¶ 25, 470 P.3d 445 (rejecting plaintiff’s argument that because defendant “could have asked [plaintiff’s witness] further questions about . . . alleged damages at the deposition and conducted discovery relating to possible computations that might relate to those damages,” plaintiff’s failure to disclose the damages calculation until expert discovery was harmless). The duty to disclose is especially salient when the damage calculation includes a contingency fee, the specific terms of which must be proven foreseeable to avoid unfair surprise. USA

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role in calculating the precise amount of fees. We invite our rules committee to recommend the best approach in implementing our holding into the rules framework to avoid future misunderstanding.

22

Power, 2016 UT 20, ¶¶ 93–95 (noting that “it is this foreseeability requirement that justifies an award based solely on a contingency fee”).

¶53 Even if Western had asked and the court had reopened discovery at that point, the damage had already been done. Trial was over. Judgment had been entered. The opportunity to make an early settlement had passed. And the parties had stipulated not to appeal most of the court’s rulings, including the ruling that attorney fees were available for breach of fiduciary duty. It was too late to disclose a contingency fee and argue about its foreseeability—that is, to disclose and prove a new computation for consequential damages. The Walkers’ failure to disclose their contingency fee was not for good cause and was not harmless.

CONCLUSION

¶54 When a party seeks attorney fees as damages, it must comply with the usual disclosure and burden of proof requirements for damages. This includes disclosure of a contingency fee if it is part of the damages calculation and proof at trial of causation, foreseeability, and amount. By failing to initially disclose or litigate the contingency portion at trial, the Walkers lost the chance to claim it. And contrary to the district court’s determinations, this failure was not for good cause or harmless. We instruct the district court to modify the Walkers’ damages award accordingly.23

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23 We do not reverse the awarding of hourly fees and other

expenses because Western has not challenged these fees on appeal, but the district court will need to recalculate the amounts of these fees without the contingency fee kicker.

The Walkers also ask for their fees on appeal. But because we reverse the district court’s award of the contingency fee, we do not award them any fees on appeal.

23