Goldenwest Federal Credit Union v. Kenworthy

2017 UT App 9

THE UTAH COURT OF APPEALS

GOLDENWEST FEDERAL CREDIT UNION,
Appellant,
v.
KATHLEEN F. KENWORTHY,
Appellee.

Memorandum Decision
No. 20150397-CA
Filed January 12, 2017

Third District Court, Salt Lake Department
The Honorable Elizabeth A. Hruby-Mills
No. 149905786

Dana T. Farmer, Attorney for Appellant
Peter A. Klc, Attorney for Appellee

JUDGE GREGORY K. ORME authored this Memorandum Decision,
in which JUDGES STEPHEN L. ROTH and JILL M. POHLMAN
concurred.

ORME, Judge:

¶1 Goldenwest Federal Credit Union appeals the district
court’s entry of summary judgment in favor of Kathleen F.
Kenworthy. We reverse and remand.

¶2 ‚In reviewing a district court’s grant of summary
judgment, we view the facts and all reasonable inferences drawn
therefrom in the light most favorable to the nonmoving party
and recite the facts accordingly.‛ Ockey v. Club Jam, 2014 UT App
126, ¶ 2 n.2, 328 P.3d 880 (citation and internal quotation marks
omitted). ‚A summary judgment movant must show both that
there is no material issue of fact and that the movant is entitled to
judgment as a matter of law.‛ Orvis v. Johnson, 2008 UT 2, ¶ 10,
177 P.3d 600 (emphasis in original).
Goldenwest Federal Credit Union v. Kenworthy

¶3 On April 24, 2006, Kenworthy entered into a loan
agreement with Goldenwest for the purchase of a vehicle. The
loan’s maturity date was April 15, 2012. Kenworthy initially
agreed to repay the loan in monthly installments of $487.21. In
May of 2008, after failing to make payments on the loan for two
months, Kenworthy called Goldenwest, discussed her financial
difficulties, and indicated that she would not be able to make the
scheduled payments. Goldenwest agreed to reduce Kenworthy’s
monthly payments to $200 per month. Kenworthy does not
contend that any other terms of the loan agreement were
modified. Kenworthy made one $200 payment but made no
payments thereafter.

¶4 Approximately six years later, on February 5, 2014,
Goldenwest sued Kenworthy for the remaining balance due on
the loan.1 Kenworthy moved for summary judgment, claiming
that Goldenwest’s claims were ‚barred by the statute of
limitations.‛ The district court granted Kenworthy’s motion,
concluding that ‚[t]he applicable statute of limitation had run
prior to [Goldenwest] initiating the present action.‛ It then
granted Kenworthy’s request for attorney fees, to which
Goldenwest had failed to respond. Goldenwest appeals.

¶5 Goldenwest argues that the district court erred in
granting Kenworthy’s summary judgment motion because ‚[t]he
statute of limitations did not run before this action was
commenced.‛ ‚An appellate court reviews a trial court’s legal
conclusions and ultimate grant or denial of summary judgment
for correctness[.]‛ Orvis, 2008 UT 2, ¶ 6 (citation and internal
quotation marks omitted).

¶6 ‚Subject to one exception inapplicable here,‛ a six-year
statute of limitations ‚applies to ‘any contract, obligation, or
liability founded upon an instrument in writing.’‛ Griffin v.

1. Goldenwest sued Kenworthy in 2011, but the district court
dismissed that case, without prejudice, for lack of prosecution.

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Goldenwest Federal Credit Union v. Kenworthy

Cutler, 2014 UT App 251, ¶ 18, 339 P.3d 100 (quoting Utah Code
Ann. § 78B-2-309(2) (LexisNexis 2012)). But an action on an oral
agreement is subject to a four-year statute of limitations. See
Utah Code Ann. § 78B-2-307(1)(a) (LexisNexis 2012); Griffin, 2014
UT App 251, ¶ 15. And ‚where a specific material term of [a]
contract in writing is subsequently changed orally, the statute of
limitations applicable to oral contracts applies.‛ Strand v. Union
Pac. R.R., 312 P.2d 561, 563 (Utah 1957).

¶7 Goldenwest and Kenworthy orally agreed to change a
single term of the written loan agreement, namely, the amount
of the monthly installment payments. The total amount due, the
rate of interest, the maturity date, and the collateral for the loan
all remained the same. If the change in the required monthly
installment amount is material, the four-year statute of
limitations applies to this case. See id. But we are far from certain
that a lender’s accommodation of its borrower by lowering the
monthly payment, while none of the other loan terms change,
constitutes a material change triggering the four-year statute.
Nevertheless, even if the four-year statute applies, we disagree
with how the district court applied the statute of limitations.

¶8 In its summary judgment ruling, the district court focused
on the date the last installment payment was made and held that
the statute of limitations had run, regardless of whether the four-
or six-year statute applied. But this court has observed that when
an ‚installment contract calls for the entire balance to become
due on some specific future date, and the obligee has done
nothing to legally accelerate the future payments, the statute of
limitations begins to run only after the obligor defaults on the
final due date.‛2 Anderson v. Davis, 2008 UT App 86U, para. 2.

2. Kenworthy asserts on appeal that Goldenwest ‚exercised its
option to accelerate the alleged installments‛ when it collected
insurance proceeds on the vehicle after she crashed it. But
Kenworthy did not advance this argument when she moved for
(continued…)

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Goldenwest Federal Credit Union v. Kenworthy

¶9 Kenworthy did not demonstrate that Goldenwest
accelerated Kenworthy’s repayment obligation, and the district
court did not address whether Goldenwest accelerated the debt.
If Goldenwest did not, then the statute of limitations began to
run on April 15, 2012, the maturity date of the loan. See id.
Because Kenworthy did not establish that Goldenwest
accelerated the debt, it must be presumed that the unpaid
balance became due at maturity. Accordingly, it cannot be
concluded as a matter of law that Goldenwest’s suit is time-
barred given that it filed its complaint within four years of the
loan’s maturity date. It follows that the district court erred in
granting summary judgment to Kenworthy.

¶10 The district court awarded Kenworthy her reasonable
attorney fees and costs as the prevailing party. Because we
reverse the district court’s grant of summary judgment in
Kenworthy’s favor, she is no longer the prevailing party. After
the district court has resolved the matter on remand, it may
ascertain who the prevailing party is and whether an award of
fees and costs to that party is appropriate. See Watkins v. Henry
Day Ford, 2010 UT App 243, ¶ 21, 239 P.3d 526, aff’d, 2013 UT 31,
304 P.3d 841.

¶11 The summary judgment in Kenworthy’s favor is reversed.
The case is remanded for trial or such other proceedings as may
now be in order.

(…continued)
summary judgment, nor did she provide a supporting affidavit
or otherwise establish this contention. Based on the record before
us and the authorities presented, we are not persuaded that
separately insuring a loan agreement and collecting proceeds
thereunder automatically effects acceleration, which is a matter
the loan agreement expressly governs.

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