CDC v. Amenti

2010 UT 10
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
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Commercial Debenture Corporation, 	No. 20080297
Donald Skipworth, J. Fred Smith,
and Tri-State Realtors, P.C.,
Plaintiffs and Appellants,
v.
Amenti, Inc.; and Merlin R. 	F I L E D
Morrison, Jr. aka Merlin Morrison,
Defendants and Appellees. 	February 19, 2010
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Third District, Salt Lake
The Honorable Joseph C. Fratto, Jr.
No. 040903556
Attorneys: 	Gregory B. Smith, West Jordan, for appellants
Jon V. Harper, Thomas R. Karrenberg, Jess M.
Hofberger, Salt Lake City, for appellees
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NEHRING, Justice:
INTRODUCTION
¶1 	Commercial Debenture Corporation (“CDC”) appeals from
an adverse result of a bench trial. 	CDC contended that it was
entitled to $1,568,000, a sum that represented one-half of all
the proceeds of the sale of real property situated in West
Jordan, Utah. 	CDC grounded its claim in a development contract
and two listing agreements. 	Following a bench trial, the
district court rejected all of CDC’s claims. 	We affirm.
BACKGROUND
¶2 	CDC entered into a Development Contract with Merlin
Morrison in August 1997. 	Under the terms of the contract, CDC
was to subdivide and sell fifty-six acres of land that Mr.
Morrison owned. 	In return for its labors, CDC would receive
fifty percent of the retail sale of each lot after the deduction

1 Throughout this opinion we refer to both Mr. Morrison and
Amenti, Inc. as “Amenti.”
No. 20080297 	2
of certain expenses. 	The Development Contract could not be
performed nor could the property be subdivided unless the
property was rezoned. 	CDC sought approval from West Jordan City
to accomplish the necessary rezoning. 	After CDC presented
several rezoning applications, the City irrevocably denied CDC’s
request.
¶3 	The efforts to rezone the property extended beyond the
deadlines set forth in the Development Contract. 	CDC obtained
two extensions of the contract.
¶4 	In August 1999, Mr. Morrison signed two listing
agreements with Tri-State Realtors, P.C., a licensed real estate
brokerage firm, to sell the property as raw land. 	Tri-State had
the same principals as CDC. 	After the August 1999 listing
agreement expired, CDC located a buyer, D.R. Horton, Inc., who
agreed to buy the land in its raw form. 	Before the sale closed,
Mr. Morrison conveyed the property to Amenti, Inc., an entity
created by Mr. Morrison and his sister in 2002. 1 	Eventually,
Amenti and D.R. Horton entered a purchase contract (the “D.R.
Horton Agreement”) whereby Amenti sold the land to D.R. Horton
for approximately three million dollars. 	CDC listed itself on
the D.R. Horton Agreement as “seller” and signed it. 	Amenti and
D.R. Horton later signed an amendment to the D.R. Horton
Agreement, which clarified that CDC “has no ownership interest in
the Property and may be removed from any further documents or
instruments related to the transaction described herein as a
‘Seller’ of the Property.” 	CDC refused to sign the amendment.
¶5 	CDC then asserted that it was entitled to receive
one-half of all the sale proceeds pursuant to the 1997
Development Contract. 	Amenti refused to honor CDC’s claims and
CDC brought suit. 	CDC alleged that Amenti breached the
Development Contract and two listing agreements. 	During
discovery, CDC moved to amend its complaint to include claims for
dissolution of a partnership or joint venture, conversion,
quantum meruit, and breach of fiduciary duty. 	The district court
denied CDC’s motion to amend. 	A bench trial was held, and the
district court ultimately rejected all of CDC’s claims. 	In doing
so, the district court made the following six conclusions of law:
(1) that CDC was not entitled to share in the proceeds of the
sale of the land to D.R. Horton because CDC had not developed the
land into lots as required by the Development Contract, (2) that
the City of West Jordan’s denial of the rezoning application for
the property was a frustration of the purpose of the Development

3 	No. 20080297
Contract and that neither party was required to perform further
under the contract, (3) that neither the Development Contract nor
CDC’s references to a joint venture in other documents created a
joint venture between CDC and Amenti, (4) that CDC was not
entitled to a share of the D.R. Horton sale proceeds merely
because it listed itself as a seller, (5) that no other documents
signed by CDC or Amenti created a joint venture between the
parties, and (6) that the integration clause in the D.R. Horton
Agreement did not merge the 1997 Development Contract into the
D.R. Horton Agreement.
¶6 	On appeal, CDC contends the district court erred for
two reasons: 	(1) CDC alleges the parties formed a joint venture
that existed through the closing of the sale of the property to
D.R. Horton, thus entitling it to one-half of all the proceeds of
the sale and (2) the D.R. Horton Agreement incorporated the terms
of the Development Contract because it contained an integration
clause and listed CDC as a seller, thus merging the two documents
and entitling CDC to one-half of all the proceeds of the sale.
¶7 	This court initially transferred the appeal to the
court of appeals, but subsequently vacated the transfer and
recalled the case. 	We have jurisdiction pursuant to Utah Code
section 78A-3-102(3)(j) (2008).
STANDARD OF REVIEW
¶8 	The parties are in dispute over the appropriate
standards of review in this case. 	While CDC argues that the
correctness standard applies, Amenti contends that the district
court’s rulings were the result of a fact-intensive evaluation
and should thus be reviewed for clear error. 	We discuss the
proper standards of review in the course of our analysis below.
ANALYSIS
¶9 	Although CDC’s claims below arose out of alleged
breaches of the Development Contract and the two listing
agreements, CDC makes two different arguments on appeal. 	First,
CDC alleges that events occurring after the Development Contract
was signed indicate the parties were engaged in a joint venture.
Second, CDC argues that the Development Contract merged into the
D.R. Horton Agreement, entitling CDC to receive profits from the
sale of the Property. 	We address each of these issues in turn.

No. 20080297 	4
I. 	THE DISTRICT COURT CORRECTLY CONCLUDED THAT CDC AND AMENTI
DID NOT FORM A JOINT VENTURE
¶10 	Over a year after CDC filed its initial complaint, it
moved to amend the complaint to include claims that a joint
venture existed, that Amenti converted CDC’s share of the
proceeds of the land sale, that Amenti was unjustly enriched, and
that Amenti breached a fiduciary duty it had to CDC. 	Amenti
opposed the motion to amend and the court denied it.
¶11 	Based on the district court’s final order, however, it
appears that the question of a joint venture was injected into
the bench trial and considered by the court. 	For instance, the
district court held:
The 1997 Development Contract is clear and
unambiguous that CDC and Mr. Morrison were
going to cooperate in the development of the
Property as independent parties and not as
partners or in a joint venture. 	The evidence
fails to establish any agreement on the part
of the parties to change the nature of their
relationship to that of a joint venture such
that CDC would be entitled to one half of the
proceeds of the sale of the Property to D.R.
Horton, as CDC argued at trial. 	CDC’s own
periodic references to a “joint venture” or
to itself, along with Mr. Morrison, as
“seller” in the years after the [Development]
Contract was executed did not serve to create
such a relationship or to change the parties’
agreement in that regard.
(Emphasis added.)
¶12 	CDC argues that the question of whether a joint venture
existed is a question of contract interpretation, which we should
review for correctness. 	The contract they believe this court
should interpret is the D.R. Horton Agreement, which initially
listed CDC as a seller. 	Amenti argues that the question of
whether a joint venture existed is, at the very least, a mixed
question of law and fact.
¶13 	Because there are multiple factual elements to the test
for a joint venture, the district court’s holding should be
reviewed for clear error. 	See Roderick v. Ricks, 2002 UT 84,
¶ 27, 54 P.3d 1119; Rogers v. M.O. Bitner Co., 738 P.2d 1029,
1032 (Utah 1987). 	Although CDC maintains that all the district

5 	No. 20080297
court needed to do to determine if a joint venture existed was
examine the D.R. Horton Agreement, observe that CDC was listed as
a seller, and on that evidence alone, conclude that a joint
venture existed, the court was required to take into account
additional factual elements in the course of evaluating whether a
joint venture existed. 	Rogers, 738 P.2d at 1032, 1035
(Zimmerman, J., concurring).
¶14 	We have long held that “[i]n order to challenge a
court’s factual findings, an appellant must first marshal all the
evidence in support of the finding and then demonstrate that the
evidence is legally insufficient to support the finding even when
viewing it in a light most favorable to the court below.”
Chen v. Stewart, 2004 UT 82, ¶ 76, 100 P.3d 1177 (internal
quotation marks omitted). 	“If the marshaling requirement is not
met . . . we assume that the evidence supports the trial court’s
findings” and may “affirm . . . on that basis alone.” 	Id. ¶ 80;
see also United Park City Mines Co. v. Stichting Mayflower
Mountain Fonds, 2006 UT 35, ¶ 27, 140 P.3d 1200 (“When parties
fail to [marshal], we can rely on that failure to affirm the
lower court’s findings of fact.”). 	Because CDC’s arguments
concerning the genesis of a joint venture take issue with
district court findings that are highly fact dependent, CDC is
obligated to marshal the evidence in support of those district
court holdings. 	It did not marshal. 	CDC was thorough in
ferreting out portions of the record that may have been at odds
with the district court’s rulings, however, it did not describe
how the evidence in the record, which appeared to support the
district court’s findings, was insufficient. 	Because CDC failed
to marshal the evidence, we affirm the trial court’s factual
findings, including its determination that there was no joint
venture between the parties.
II. 	THE DEVELOPMENT CONTRACT DID NOT MERGE INTO THE D.R. HORTON
AGREEMENT
¶15 	In its opening brief, CDC mentions the doctrine of
merger and then states: 	“It is part of CDC’s position that . . .
the 1997 Development Contract, as amended, entitled CDC to
receive profits from the sale of the property to D.R. Horton
jointly as a ‘Seller.’” 	There is no further analysis of this
argument in either the opening brief or the reply brief. 	Amenti,
however, attempts to address what it believes CDC’s merger
argument to be, namely, that the 1997 Development Contract
remained in effect at the time the D.R. Horton Agreement was
first executed in November 2002, and that the integration
provision in the D.R. Horton Agreement served to merge the
Development Contract into the D.R. Horton Agreement. 	The

No. 20080297 	6
district court held that the integration clause in the D.R.
Horton Agreement did not merge the Development Contract into that
document.
¶16 	Several flaws handicap CDC’s merger argument. 	CDC
incorrectly conflates the doctrines of merger and integration.
The cases CDC cites in support of its merger argument concern
fraud and the delivery of real estate deeds. 	See Robinson v.
Tripco Inv., Inc., 2000 UT App. 200, ¶ 11, 21 P.3d 219, 229-30;
Maynard v. Wharton, 912 P.2d 446, 449 (Utah Ct. App. 1996). 	As
stated in those cases, where delivery of a deed is the only
performance required of a seller, when the seller delivers the
deed and the buyer accepts it, the deed controls the terms of the
sale, even if an earlier agreement contained different terms.
Robinson, 2000 UT App. 200, ¶ 11; Maynard, 912 P.2d at 449. 	This
doctrine would not incorporate the terms of the Development
Contract into the D.R. Horton Agreement.
¶17 	Although CDC provides little to no analysis of the
cases it cites, its argument could also be that the D.R. Horton
Agreement is similar to the deed in a typical merger situation,
in that once CDC was listed as a seller on the Agreement, any
previous agreement to the contrary was superseded by the D.R.
Horton Agreement. 	However, even this argument is flawed for at
least two reasons. 	First, CDC cites no precedent for applying
the doctrine of merger to anything but a deed. 	Second, reference
to CDC was ultimately removed from the D.R. Horton Agreement.
Regardless, there is no indication this argument was made below
and since it is unpreserved, we will not address it. 	State v.
Holgate, 2000 UT 74, ¶ 11, 10 P.3d 346.
¶18 	Finding the merger doctrine issue to be unpreserved and
inapplicable to this case, we now turn to CDC’s possible
integration argument. 	Based on the district court’s conclusions
of law, it appears that CDC made an integration argument below
and argued that because there was an integration clause in the
D.R. Horton Agreement indicating that it expressed the final
agreement of the parties, CDC is conclusively entitled to
one-half of all the proceeds because it was listed as a seller.
CDC asserts that its merger/integration argument should be
reviewed for correctness because it is an issue of contract
interpretation. 	We disagree.
¶19 	The district court’s conclusion that the integration
clause in the D.R. Horton Agreement did not entitle CDC to a
share of the proceeds of the sale is an issue of fact that should
be reviewed for clear error. 	See Tangren Family Trust v.
Tangren, 2008 UT 20, ¶ 10, 182 P.3d 326.

7 	No. 20080297
¶20 	As to the factual finding concerning integration, CDC
once again failed to marshal the evidence. 	CDC was required to
show that it was clearly erroneous for the district court to
conclude that the integration clause in a contract between D.R.
Horton and Amenti had no bearing on a dispute between CDC and
Amenti. 	It failed to do so.
¶21 	We will not allow CDC to “dodge [its] duty [to marshal]
by attempting to frame the issues as legal ones,” United Park
City Mines Co. v. Stichting Mayflower Mountain Fonds, 2006 UT 35,
¶ 25, 140 P.3d 1200, and we thus determine that CDC’s failure to
marshal the evidence once again ends our inquiry. 	See Utah
County v. Butler, 2008 UT 12, ¶ 11, 179 P.3d 775 (“Parties that
fail to marshal . . . do so at the risk that the reviewing court
will decline to review the trial court’s factual findings.”)
(internal quotation marks omitted). 	Because CDC “fail[ed] to
perform this critical task,” United Park City Mines Co., 2006 UT
35, ¶ 27, we affirm the trial court’s factual findings that the
integration clause in the D.R. Horton Agreement did not affect
the relationship between Amenti and CDC, and did not entitle CDC
to one-half of all the proceeds from the sale of the property.
CONCLUSION
¶22 	Because CDC failed to marshal the evidence
demonstrating the required elements of a joint venture existed,
we hold that the district court did not err in finding that CDC
and Amenti did not form a joint venture. 	We also hold that the
district court did not err in finding that CDC was not entitled
to one-half of all the proceeds of the sale of the property based
on the integration clause in the D.R. Horton Agreement or because
it listed itself as the seller. 	We therefore affirm the district
court’s dismissal of all of CDC’s claims.
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¶23 	Chief Justice Durham, Associate Chief Justice Durrant,
Justice Wilkins, and Justice Parrish concur in Justice Nehring’s
opinion.