Opinion
Case No. 20070700-CA.
Filed December 18, 2008. Not For Official Publication
Appeal from the Second District, Morgan Department, 050500101 The Honorable Michael D. Lyon.
Ray G. Martineau, Anthony R. Martineau, and Brett D. Cragun, Salt Lake City, for Appellant.
Matthew A. Bartlett, Riverdale, for Appellee.
Before Judges Bench, Davis, and McHugh.
MEMORANDUM DECISION
Barber Brothers Ford, Inc. (Barber Brothers) appeals the trial court's final judgment determining that Kelly G. Foianini (Kelly) was not liable for fraudulent nondisclosure. We affirm.
A party is liable for fraudulent nondisclosure if he "omi[ts] . . . a material fact when there is a duty to disclose, for the purpose of inducing action on the part of the other party, with actual, justifiable reliance resulting in damage to that party." Taylor v. Gasor, Inc., 607 P.2d 293, 294 (Utah 1980); see also Moore v. Smith, 2007 UT App 101, ¶ 33, 158 P.3d 562 ("[A] claim for fraudulent nondisclosure rests on three elements: (1) a legal duty to communicate, (2) undisclosed material information, and (3) a showing that the information was known to the party who failed to disclose."), cert. denied, 182 P.3d 910 (Utah 2007). Because we agree with the trial court that Kelly had no duty to communicate, we discuss only that element.
Barber Brothers argues that because Kelly cosigned on the loan application of his son, Bronson Foianini (Bronson), Kelly had a duty to disclose that the Dodge truck Bronson traded to Barber Brothers had previously been chipped and that the engine had been replaced, events that voided the factory warranty. "Whether a duty [to disclose information] exists is strictly a question of law; it grows out of the relationship between the parties, and the duties created by that relationship." Moore, 2007 UT App 101, ¶ 34. We review this issue for correctness. See, e.g., Madsen v. Washington Mut. Bank, 2008 UT 69, ¶ 19, 613 Utah Adv. Rep. 29 ("We review questions of law for correctness, giving no deference to the ruling of the court below."); Elder v. Nephi City, 2007 UT 46, ¶ 3, 164 P.3d 1238 (reviewing whether a duty exists for correctness).
Barber Brothers suggests that we should apply a clearly erroneous standard of review. While this standard may be applicable to the trial court's findings of fact, see, e.g., Utah R. Civ. P. 52(a) ("Findings of fact . . . shall not be set aside unless clearly erroneous. . . ."), Utah case law establishes that whether the facts are sufficient to establish a duty is a question of law that we review de novo, see DeBry v. Valley Mortgage Co., 835 P.2d 1000, 1004 (Utah Ct.App. 1992) ("The issue of whether a duty exists is entirely a question of law to be determined by the court. Once it has been determined that a duty exists as a matter of law, then any claimed breach of that duty presents a question of fact to be resolved by the trier of fact." (internal quotation marks and citation omitted)).
In this case, the trial court found that Kelly's involvement in the transaction was limited to "sign[ing] the financing papers as an accommodation for [Bronson] qualifying under Ford Credit" and that Kelly therefore owed no duty to disclose information about the truck. We agree.
The supreme court has identified the "[a]ge, knowledge, influence, bargaining power, sophistication, and cognitive abilit[ies]" of the respective parties as "circumstances that a court may consider in analyzing whether a legal duty is owed by one party to another."Yazd v. Woodside Homes Corp., 2006 UT 47, ¶ 16, 143 P.3d 283. There is nothing in this case to indicate that Kelly had any knowledge of the negotiations between Barber Brothers and Bronson. Kelly was not present during, and therefore had no influence or power over, those negotiations. Indeed, the Finance Manager for Barber Brothers testified that Kelly's role was limited to "just the legal document part of it, the paperwork, the titling, what needs to be registered. . . . [a]nd just some of the other preparatory paperwork."
Moreover, Barber Brothers was the more sophisticated party regarding the automotive industry. For example, Barber Brothers admits that "had [it] investigated the Dodge truck, through its Chrysler dealership in another city, it could have discovered that the vehicle had a [warranty-]voided engine." In fact, a Dodge technician testified that it would have taken Barber Brothers' Chrysler dealership "a minute or less" to discover the truck's prior history.See generally DeBry v. Valley Mortgage Co., 835 P.2d 1000, 1007 (Utah Ct. App. 1992) ("A duty to speak will not be found where the parties deal at arm's length, and where the underlying facts are reasonably within the knowledge of both parties. Under such circumstances, the plaintiff is obliged to take reasonable steps to inform [it]self, and to protect [its] own interests." (internal quotation marks omitted)).
Likewise, "[k]nowledge that the other party . . . is acting under a mistaken belief . . . is a factor in determining that a duty of disclosure is owing." Elder v. Clawson, 14 Utah 2d 379, 384 P.2d 802, 805 (1963) (internal quotation marks omitted). However, in this case, there is nothing to suggest that Kelly knew Bronson had told Barber Brothers that the truck had not been chipped. Furthermore, there is no evidence that Kelly knew the factory warranty on the Dodge truck was voided by Bronson's actions or was aware that Bronson's actions had materially diminished the value of the vehicle. On the contrary, Kelly's testimony was that he never rode in the truck after Bronson had it repaired and was not "aware of any problems that it may or may not have had" at that time.
This fact is significant because part of the reason Barber Brothers "felt comfortable with the valuation of the vehicle . . . [was because] `[i]t's hard to get stung with a vehicle under factory warranty.'"
Nevertheless, Barber Brothers argues that Kelly's contractual relationship with the parties was sufficient to impose a duty in this case. The supreme court has suggested that privity of contract can be evidence of the type of relationship sufficient to impose a legal duty on a party. See Yazd, 2006 UT 47, ¶ 16 ("A relationship that is highly attenuated is less likely to be accompanied by a duty than one, for example, in which parties are in privity of contract."). However, that evidence does not, as Barber Brothers suggests, end the inquiry.See, e.g., id. ¶¶ 16-26 (examining all aspects of the parties' relationship). Rather, "[a] duty to speak [must] be found from all the circumstances of the case and by comparing the facts not disclosed with the object and end in view by the contracting parties." DeBry, 835 P.2d at 1007 (internal quotation marks omitted). We agree with the trial court that Kelly's agreement to cosign on the car loan did not impose a duty on him to volunteer information about the mechanical history of the truck when he was not privy to any misrepresentations by Bronson. Accordingly, we affirm.
The trial court held Kelly liable for the express warranties in the contract because, as a cosigner, he was a party to it.
Because we affirm, we reject Barber Brothers' argument that the trial court erred when it ruled that Kelly had not asserted his defense in bad faith and therefore refused to award Barber Brothers its attorney fees.
Kelly seeks the costs and attorney fees incurred on appeal pursuant to rule 34 of the Utah Rules of Appellate Procedure. As the prevailing party on appeal, Kelly is entitled to his costs. See Utah R. App. P. 34(a). However, nothing in rule 34 provides for an award of attorney fees. See id. R. 34. See generally Tholen v. Sandy City, 849 P.2d 592, 596 (Utah Ct.App. 1993) ("[A]ttorney fees should not be confused with the more generic term `costs' because without specific statutory language, costs do not include attorney fees."). Accordingly, we reject Kelly's request for his attorney fees on appeal.
Affirmed.
WE CONCUR: Russell W. Bench, Judge, James Z. Davis, Judge.