Murphy v. Sean Whalen & Flip Ave. LLC

2018 UT App 215

THE UTAH COURT OF APPEALS

ROZALIND MURPHY AND NICOLE RADFORD,
Appellants,
v.
SEAN WHALEN AND FLIP AVENUE LLC,
Appellees.

Opinion
No. 20170730-CA
Filed November 16, 2018

Fourth District Court, Provo Department
The Honorable Darold J. McDade
No. 160400282

Trevor Brett Fugate and Michael R. Anderson,
Attorneys for Appellants
Richard J. Armstrong, Attorney for Appellees

JUDGE KATE A. TOOMEY authored this Opinion, in which
JUDGES GREGORY K. ORME and RYAN M. HARRIS concurred.

TOOMEY, Judge:

¶1 Rozalind Murphy and her daughter Nicole Radford
(collectively, Buyers) appeal the district court’s grant of
summary judgment in favor of Sean Whalen and Flip Avenue,
LLC (collectively, Sellers), contending the court erred in
determining as a matter of law that Buyers failed to present
sufficient evidence of damages. We agree with Buyers that they
were able to produce evidence of damages. We therefore reverse
the district court’s award of summary judgment in favor of
Sellers and remand for further proceedings.

¶2 Buyers “became interested in purchasing and ‘flipping’
real property” and purchased from Sellers three properties (the
Properties) in Detroit, Michigan. According to the Real Estate
Murphy v. Whalen

Purchase Contract (the Contract), Buyers paid $103,000 for the
Properties. After purchasing the Properties, Buyers hired “a real
estate agent to inspect [the Properties] who said they were all in
very poor condition, one had been flooded, and one was
occupied by a squatter.” Buyers filed a complaint against
Sellers, 1 alleging fraud, negligent misrepresentation, constructive
trust, and unjust enrichment.

¶3 According to Buyers, Sellers represented that the
Properties were “‘turn-key’ rental properties,” that they would
supply “instant cash flow,” and that they were valued higher
than the price Sellers were asking. They claimed that they
learned, after inspection, “one of the houses was worthless, and
the other two (2) were worth about $2,500 each.” To mitigate
their damages, Buyers sold the Properties for a total of $22,000.
Their complaint claimed that they reasonably relied on Sellers’
representations about the Properties and that they sustained
damages exceeding $100,000.

¶4 Following discovery, Sellers filed a motion for summary
judgment. Among other things, Sellers argued that all of Buyers’
claims for relief were “barred” because they “failed to prove
damages.” The district court granted summary judgment in
favor of Sellers, basing its decision solely on its conclusion that
Buyers “produced no evidence of their damages.”

¶5 Buyers appeal and contend the district court erred when
it granted summary judgment in favor of Sellers because there

1. The Contract included a choice of law provision and a forum
selection clause, providing that Utah law would govern the
Contract and designating Utah as the proper forum for any
dispute arising out of the Contract. See Coombs v. Juice Works Dev.
Inc., 2003 UT App 388, ¶¶ 9–10, 81 P.3d 769; see also Utah Code
Ann. § 78B-3-307(1) (LexisNexis 2012).

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were genuine issues of material fact with regard to whether they
sustained damages. 2

¶6 Summary judgment is appropriately granted “if the
moving party shows that there is no genuine dispute as to any
material fact and the moving party is entitled to judgment as a
matter of law.” Utah R. Civ. P. 56(a). When the district court
grants summary judgment, “we review de novo whether the
record shows that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter
of law,” Dillon v. Southern Mgmt. Corp. Ret. Trust, 2014 UT 14,
¶ 21, 326 P.3d 656 (quotation simplified), and recite “all facts and
fair inferences drawn from the record in the light most favorable
to the nonmoving party,” Poteet v. White, 2006 UT 63, ¶ 7, 147
P.3d 439.

¶7 To recover damages, the party must prove both the “fact
of damages” and the “amount of damages.” Atkin Wright & Miles
v. Mountain States Tel. & Tel. Co., 709 P.2d 330, 336 (Utah 1985).
To prove the “fact of damages,” the party must “do more than
merely give rise to speculation that damages in fact occurred”
and instead must provide evidence that “give[s] rise to a
reasonable probability that the [party] suffered damage[s].” Id.
“[T]he standard for determining the amount of damages is not

2. Buyers raise other arguments on appeal with respect to
whether (1) Sellers made false statements, (2) Buyers’ reliance on
Sellers’ statements was reasonable, (3) Buyers requested proof of
existing lease agreements, and (4) the Properties’ defects were
discoverable “pre-purchase.” We decline to address those
arguments because, although Sellers’ moved for summary
judgment on these grounds, the district court did not rule on
them. We reverse the grant of summary judgment in favor of
Sellers on the ground upon which the district court relied. See
infra ¶¶ 8–9.

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so exacting as the standard for proving the fact of damages,” but
“there still must be evidence that rises above speculation and
provides a reasonable, even though not necessarily precise,
estimate of damages.” Id.

¶8 Here, the district court granted summary judgment in
favor of Sellers based solely on its conclusion that Buyers
“produced no evidence of their damages.” The court referred to
Murphy’s deposition testimony in which she stated she did not
“have any evidence of how much or whether the purchase price
that [they] paid for [the Properties] was fraudulently inflated.”
Although Buyers’ damages evidence may have flaws that may
be explored on remand, Buyers have nevertheless demonstrated
they suffered a loss between the amount for which they
purchased the Properties and the amount they received upon
selling them. Buyers asserted in their complaint that the
Properties’ values were significantly lower than what Sellers
represented they were and lower even than the price Buyers
paid for them. Buyers purchased the Properties for $103,000 3
and, about six months later, resold them for $22,000. They
presented to the district court the sales contract for the resale of
the Properties for $22,000, supporting their claim of damages.
This was sufficient evidence to overcome a grant of summary
judgment to Sellers based solely on the court’s determination
there was an absence of evidence of damages.

¶9 We conclude that Buyers presented evidence of both the
fact and the amount of damages. We therefore reverse the
district court’s grant of summary judgment in favor of Sellers
and remand for trial or other such proceedings as may now be
appropriate.

3. Buyers assert that both Buyers and Sellers agree that the total
purchase price was $110,000, even though the Contract stated
that the purchase price was $103,000.

20170730-CA 4 2018 UT App 215