Pioneer Builders Company v. KDA Corporation

2018 UT App 206
THE UTAH COURT OF APPEALS
PIONEER BUILDERS C OMPANY OF NEVADA I NC .,
Appellee,
v.
K D A C ORPORATION ,
Appellant.
Opinion
No. 20170312-CA
Filed November 1, 2018
First District Court, Logan Department
The Honorable Brandon J. Maynard
No. 030100421
N. George Daines and Jonathan E. Jenkins, Attorneys
for Appellant
Gary N. Anderson and R. Christian Hansen,
Attorneys for Appellee
JUDGE K ATE A. TOOMEY authored this Opinion, in which
JUDGES DAVID N. M ORTENSEN and R YAN M. H ARRIS concurred.
TOOMEY, Judge:
¶1 	K D A Corporation (K D A) appeals the district court’s
order that denied its Motion to Enforce Redemption Right and
granted Pioneer Builders Company of Nevada Inc.’s (Pioneer)
Motion to Enforce Settlement Agreement. K D A argues the
court 	erred 	in 	ruling 	K D A 	waived 	the 	statutory 	right 	of
redemption1 under the terms of a settlement agreement (the
1. Redemption is “the regaining of property by satisfaction of an
obligation.” Redemption, Webster’s Third New Int’l Dictionary
1902 (1993). In Utah, “[s]ales of real estate under judgments of
foreclosure of mortgages and liens are subject to redemption,”
(continued…)

Pioneer Builders v. K D A Corporation
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Agreement) between K D A and Pioneer. We conclude K D A
did not waive its right of redemption because the Agreement did
not contain a clear and unmistakable waiver of that right. We
therefore reverse and remand this case to the district court for
further proceedings consistent with this opinion.
BACKGROUND
¶2 	In October 2000, K D A sold approximately forty acres of
real property (the Property) to a buyer through an installment
contract and secured by trust deed. The buyer financed the
purchase with a loan from Pioneer, and Pioneer’s loan was also
secured 	by 	trust 	deed. 	When 	the 	buyer 	defaulted, 	Pioneer
sought 	to 	foreclose. 	The 	foreclosure 	resulted 	in 	a 	dispute
concerning the relative priority of the parties’ trust deeds. After
several years of litigation, Pioneer and K D A entered into the
Agreement to “resolv[e] all differences between them, subject to
the terms and conditions of [the] Agreement.”
¶3 	The 	Agreement 	included 	multiple 	provisions 	that
subordinated 	K D A’s 	trust 	deeds 	to 	Pioneer’s 	trust 	deeds.
Specifically, K D A agreed that Pioneer’s trust deeds “attached
to, affect, and encumber [the Property] . . . ahead of, superior to,
and not subject to KDA’s [trust deeds].” The parties reiterated
that priority by including a formal subordination agreement,
stating:
(…continued)
Utah Code Ann. § 78B-6-906(1) (LexisNexis 2012), “by a creditor
having a lien on the property junior to that on which the
property was sold,” Utah R. Civ. P. 69C(b). To redeem, the
creditor must, within 180 days of the sale, pay the purchaser of
the property the amount of the purchase at the sale plus six
percent. See id. R. 69C(b), (e).

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[A]s part of a settlement of various claims and
disputes 	between 	and 	among 	them, 	KDA 	and
Pioneer have agreed . . . to the subordination of
KDA’s [trust deeds] and its other claimed estates,
rights, titles, liens, and encumbrances, and other
interests in, on, and/or to the Property . . . to
Pioneer’s [trust deeds].
K D A 	further 	agreed 	“that 	pursuant 	to 	[the 	subordination
agreement] Pioneer’s [trust deeds] . . . have priority over KDA’s
[trust deeds], and any and all other liens, encumbrances, and
other interests of KDA in, on, and to the Property,” and that the
priority of Pioneer’s trust deeds over K D A’s trust deeds “shall
be respected in the presently pending judicial foreclosure.”
¶4 	The Agreement also contained stipulations, releases, and
reservations of claims. In one provision, K D A agreed that
Pioneer is entitled to foreclose upon [the Property],
. . . including, but without limitation, foreclosing
out, terminating, and extinguishing any and all
estates, 	rights, 	titles, 	liens, 	encumbrances, 	and
other interests . . . that KDA may have or claim in,
on, 	or 	to 	[the 	Property], 	including, 	without
limitation, KDA’s [trust deeds.]
K D A did not expressly reserve the right of redemption as a
subordinate lienholder on the Property.
¶5 	After executing the Agreement, Pioneer continued with
the foreclosure. At a sheriff’s sale, Pioneer was the only bidder
and purchased the Property for $200,000. Less than six months
later, K D A attempted to redeem the Property as a subordinate
lien holder, serving Pioneer with an exercise of redemption and
a cashier’s check for $212,000. Pioneer rejected the redemption
attempt and returned the check, claiming that K D A waived the
right of redemption when it signed the Agreement.

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¶6 	K D A filed a Motion to Enforce Redemption Right with
the district court. In that motion, K D A denied waiving the right
of redemption and asserted its rights as a “‘creditor having a lien
on the property junior to that on which the property was sold.’”
(Quoting Utah R. Civ. P. 69C(b).) To that end, K D A asked the
court to interpret the Agreement as merely subordinating the
priority of its trust deeds to those of Pioneer.
¶7 	Pioneer opposed K D A’s motion and filed its own motion
to 	enforce 	the 	Agreement 	as 	a 	waiver 	of 	K D A’s right 	of
redemption. It argued that the Agreement’s language of the
agreement 	“clearly 	demonstrates 	KDA 	waived 	any 	and 	all
interest it had in” the Property. Pioneer also noted that, although
the 	Agreement 	expressly 	reserved 	K D A’s 	“existing 	and
ongoing rights,” it did not reserve the right of redemption.
¶8 	After 	considering 	the 	arguments, 	the 	district 	court
concluded that K D A “freely and validly waived its right of
redemption and was not entitled to redeem the Property.” The
court stated that the “Agreement clearly provides Pioneer is
entitled to foreclosure upon the Property, thus foreclosing out,
terminating, and extinguishing any and all estates, rights, titles,
liens, encumbrances, and other interests . . . that KDA may have
or claim in . . . [the Property].” (Quotation simplified.) Based on
that 	language, 	the 	court 	concluded 	that 	“when 	Pioneer
foreclosed upon the Property, any right or title KDA had was
extinguished.” “Therefore, when KDA attempted to redeem the
Property, . . . it was no longer a ‘creditor having a lien on the
property’ or ‘a creditor having a right of redemption.’” (Quoting
Utah R. Civ. P. 69C(b).) After the district court ruled in favor of
Pioneer, K D A stipulated to Pioneer’s award of attorney fees as
the prevailing party, but reserved the right to challenge that
award and seek its own attorney fees if successful on appeal.
¶9 	K D A appeals.

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ISSUES AND STANDARDS OF REVIEW
¶10 	K D A argues the district court erred in interpreting the
Agreement 	to 	waive 	its 	statutory 	right 	of 	redemption.
“Settlement agreements are governed by the rules applied to
general contract actions.” Bodell Constr. Co. v. Robbins, 2009 UT
52, ¶ 19, 215 P.3d 933 (quotation simplified). “Questions of
contract interpretation not requiring resort to extrinsic evidence
are matters of law,” which we review for correctness. Zions First
Nat’l Bank, NA v. National Am. Title Ins. Co., 749 P.2d 651, 653
(Utah 1988). “[W]hether the [district] court employed the proper
standard 	of 	waiver” 	is 	also 	a 	matter 	of 	law 	reviewed 	for
correctness. Pledger v. Gillespie, 1999 UT 54, ¶ 16, 982 P.2d 572.
¶11 	K D A 	also 	challenges 	the 	district 	court’s 	award 	of
attorney fees to Pioneer. We review the district court’s award of
attorney fees for correctness. See Jones v. Riche, 2009 UT App 196,
¶ 1, 216 P.3d 357.
ANALYSIS
I. Waiver
¶12 	K D A argues the district court erred in ruling that it
waived the statutory right of redemption when it entered into
the 	Agreement. 	We 	agree. 	A 	waiver 	of 	any 	statutorily
guaranteed right must be “explicitly stated,” so that the parties’
intent is “clear and unmistakable.” See Larsen Beverage v. Labor
Comm’n, 	2011 	UT 	App 	69, 	¶ 	11, 	250 	P.3d 	82 	(quotation
simplified). 	In 	our 	view, 	this 	principle 	applies 	to 	potential
waivers of the right of redemption, and the Agreement includes
no such waiver.
¶13 	“Settlement agreements are governed by the rules applied
to general contract actions.” Bodell Constr. Co. v. Robbins, 2009 UT
52, 	¶ 	19, 	215 	P.3d 	933. 	“The 	cardinal 	rule 	in 	contract

Pioneer Builders v. K D A Corporation
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interpretation is to give effect to the intentions of the parties as
they are expressed in the plain language of the [agreement]
itself.” New York Ave. LLC v. Harrison, 2016 UT App 240, ¶ 21, 391
P.3d 	268 	(quotation 	simplified). 	We 	examine 	“the 	entire
[agreement] and all of its parts in relation to each other, giving
an objective and reasonable construction to the [agreement] as a
whole.” G.G.A., Inc. v. Leventis, 773 P.2d 841, 845 (Utah Ct. App.
1989). Our goal is to interpret the agreement “so as to harmonize
all of its terms and provisions, and all of its terms should be
given effect if possible.” Id.
¶14 	Waiver is “the intentional relinquishment of a known
right.” Souter’s, Inc. v. Deseret Fed. Sav. & Loan Ass’n, 857 P.2d
935, 942 (Utah 1993) (quotation simplified). For waiver to occur,
“there 	must 	be 	an 	existing 	right, 	benefit 	or 	advantage, 	a
knowledge of its existence, and an intention to relinquish it.” Id.
(quotation 	simplified). 	The 	waiving 	party’s 	conduct 	“must
evince unequivocally an intent to waive, or must be inconsistent
with any other intent.” Medley v. Medley, 2004 UT App 179, ¶ 7,
93 P.3d 847 (quotation simplified).
¶15 	Further, the right of redemption is a statutory right. Pyper
v. Bond, 2011 UT 45, ¶ 14, 258 P.3d 575; see also Utah Code Ann.
§ 78B-6-906 (LexisNexis 2012); Utah R. Civ. P. 69C. To waive a
statutory right, the waiver must be “clear and unmistakable.”
Medley, 2004 UT App 179, ¶ 10 (quotation simplified). This court
“will not infer from a general contractual provision that the
parties intended to waive a statutorily protected right unless the
undertaking is explicitly stated.” Larsen Beverage, 2011 UT App
69, ¶ 11 (quotation simplified).2
2. We note that close scrutiny on behalf of the district court is
particularly appropriate in cases dealing with an alleged waiver
of the right of redemption. As this court has noted, the right of
(continued…)

Pioneer Builders v. K D A Corporation
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¶16 	Here, the Agreement does not establish a “clear and
unmistakable” waiver of the right of redemption. See Medley,
2004 UT App 179, ¶ 10 (quotation simplified). Under the relevant
provision, K D A agreed that “Pioneer is entitled to foreclose
upon” the Property, including “foreclosing out, terminating, and
extinguishing” all of K D A’s rights and interests, including
K D A’s trust deeds. Although this provision is very broad, it
does 	not 	mention 	redemption, 	nor 	refer 	to 	the 	statutory
provisions that provide the right to redeem. See Utah Code Ann.
§ 78B-6-906(1) (LexisNexis 2012) (“Sales of real estate under
judgments of foreclosure of mortgages and liens are subject to
redemption . . . .”); Utah R. Civ. P. 69C(b) (“Real property subject
to redemption may be redeemed . . . by a creditor having a lien
on the property junior to that on which the property was sold
. . . .”).
¶17 	Pioneer argues that “the all-encompassing language in
[that 	provision] 	leaves 	no 	doubt 	that 	K D A’s 	right 	of
redemption was terminated.” But “such a restrictive reading of
[that 	provision] 	is 	not 	supported 	by 	[this 	court’s] 	prior
decisions.” Larsen Beverage, 2011 UT App 69, ¶ 10; see also id.
¶¶ 4, 11–12 (determining that an employer’s stipulation to pay
“all medical expenses” resulting from an employee’s work-place
(…continued)
redemption is designed to “provide a check on bids that are well
below market value.” Brockbank v. Brockbank, 2001 UT App 251,
¶ 12, 32 P.3d 990. Allowing a debtor or a subordinate lien holder
to 	contractually 	waive 	the 	right 	of 	redemption 	without
expressing clear and unmistakable intent is inconsistent with
that purpose. See id. To that end, K D A asks us to determine that
waivers of the statutory right of redemption will never be
enforced. But because we conclude the 	Agreement did not
establish 	a 	“clear 	and 	unmistakable” 	waiver, 	we 	need 	not
address that argument further.

Pioneer Builders v. K D A Corporation
20170312-CA 	8 	2018 UT App 206
accident did not waive the employer’s statutory right to seek
reimbursement because the stipulation in the contract provision
“made 	no 	reference 	to 	the 	statutory 	right” 	(quotation
simplified)); Medley, 2004 UT App 179, ¶¶ 4, 10 (determining
that an agreement for payments “[in] lieu of and as satisfaction
of any claim either party ha[d] to alimony” did not waive the
statutory right to future alimony (quotation simplified)). Parties
wishing to waive the right of redemption must make that waiver
“clear and unmistakable” by explicitly stating their intention. See
Medley, 2004 UT App 179, ¶ 10 (quotation simplified).
¶18 	Here, the Agreement “contains neither a mention of the
statute at issue nor even a reference to the general concept of
[redemption].” Larsen Beverage, 2011 UT App 69, ¶ 11. Granted,
K D A did not expressly reserve the right of redemption in the
Agreement. But failure to reserve a statutorily protected right is
not the equivalent of a waiver of that right. See id. (determining
there was no waiver when the agreement was “entirely silent
concerning” the statutory right at issue). We will not infer from
the Agreement’s general provisions that the parties intended to
waive the right of redemption. See id.
¶19 	Indeed, the broad language cited by the district court does
not expressly waive any of K D A’s rights. It acknowledges
Pioneer’s right to foreclose on the Property, and it recognizes
that 	K D A’s 	rights 	and 	interests 	will 	be 	“foreclosed 	out,”
“terminated,” 	and 	“extinguished” 	upon 	that 	foreclosure. 	In
Utah, the foreclosure process includes not only the sale of the
relevant property but also the statutory time for redemption. See
Utah R. Civ. P. 69C(d), (h) (establishing that “[t]he property may
be redeemed within 180 days after the sale” and “[t]he purchaser
or 	last 	redemptioner 	is 	entitled 	to 	conveyance 	upon 	the
expiration of the time permitted for redemption”). And during
the 	time 	for 	redemption, 	“a 	creditor 	having 	a 	lien 	on 	the
property junior to that on which the property was sold” may

Pioneer Builders v. K D A Corporation
20170312-CA 	9 	2018 UT App 206
redeem the property by paying to the purchaser “the sale price
plus six percent.” Id. R. 69C(b), (e).
¶20 	Considering the foreclosure process, it is fair to interpret
the Agreement’s broad language to express that K D A’s rights
in the Property would not “terminate” until expiration of the
time for redemption. Thus, not only does the Agreement fail to
explicitly 	state 	the 	parties’ 	intent 	to 	waive 	the 	right 	of
redemption, 	but 	its 	language 	is 	consistent 	with 	a 	contrary
interpretation. 	For 	waiver 	to 	occur, 	“the 	party’s 	actions 	or
conduct must evince unequivocally an intent to waive, or must
be inconsistent with any other intent.” Mont Trucking, Inc. v.
Entrada Indus., Inc., 802 P.2d 779, 781 (Utah Ct. App. 1990)
(quotation 	simplified). 	The 	Agreement 	does 	not 	meet 	that
standard.
¶21 	K D A asserts that the Agreement merely was intended to
subordinate K D A’s trust deeds, giving Pioneer’s trust deeds
first priority in the pending foreclosure. This interpretation is
reasonable because it “harmoniz[es] all of [the Agreement’s]
terms and provisions” and gives “an objective and reasonable
construction to the [Agreement] as a whole.” See G.G.A., Inc. v.
Leventis, 773 P.2d 841, 845 (Utah Ct. App. 1989). Interpreting the
Agreement to subordinate K D A’s interests in the Property
gives effect to provisions that would be superfluous if the parties
intended to waive the right of redemption. For example, the
Agreement 	expressly 	recognizes 	the 	continued 	validity 	of
K D A’s trust deeds, specifying that Pioneer’s trust deeds are
“ahead of, superior to, and not subject to” K D A’s trust deeds.
And, “as part of [the Agreement],” the parties entered into a
separate subordination agreement to reiterate Pioneer’s priority
over 	K D A 	in 	the 	“pending 	judicial 	foreclosure.” 	If 	K D A
intended to waive the right of redemption, it is difficult to
understand why the parties also executed a subsequent formal
subordination agreement. Instead, the Agreement suggests that
K D A intended to maintain its rights as a subordinate lien

Pioneer Builders v. K D A Corporation
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holder, including the right of redemption. See Utah R. Civ. P.
69C(b).
¶22 	Further, 	the 	broad 	language 	of 	the 	Agreement 	that
Pioneer claims “leaves no doubt that KDA’s right of redemption
was terminated” is consistent with the mere subordination of
K D A’s interests in the Property. As K D A notes in its brief, that
language simply describes what happens to a subordinated lien
holder upon foreclosure. That is, the first priority lien holder is
entitled to “foreclose out” and “terminate” the second priority
lien holder’s rights in the relevant property. But those rights are
not terminated until the foreclosure process is complete—that is,
when the redemption period expires. See Utah Code Ann. § 78B-
6-906(1) (LexisNexis 2012); Utah R. Civ. P. 69C(b), (d). Thus, an
examination of the Agreement “as a whole,” see G.G.A., Inc., 773
P.2d at 845, supports our conclusion that K D A did not make a
“clear and unmistakable” waiver of the right of redemption, see
Medley, 2004 UT App 179, ¶ 10 (quotation simplified).
¶23 	In sum, the Agreement does not show K D A’s clear and
unmistakable intent to waive its statutory right of redemption.
See id. We therefore conclude the district court erred in ruling
that K D A waived the right of redemption.
II. Attorney Fees
¶24 	K D A asks us to vacate the district court’s award of
attorney fees to Pioneer. “In Utah, attorney fees are awardable
only if authorized by statute or by contract.” Jones v. Riche, 2009
UT App 196, ¶ 1, 216 P.3d 357 (quotation simplified). “If the
legal right to attorney fees is established by contract, Utah law
clearly requires the court to apply the contractual attorney fee
provision and to do so strictly in accordance with the contract’s
terms.” Id. ¶ 2.
¶25 	Here, the Agreement provides for an award of costs and
reasonable attorney fees to the prevailing party in litigation

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regarding enforcement of any of the Agreement’s terms. After
the district court ruling in favor of Pioneer, K D A stipulated to
Pioneer’s award of attorney fees as the prevailing party but
reserved the right to challenge that award and seek its own
attorney fees if successful on appeal. Because we reverse the
district court’s ruling and remand for further proceedings, we
vacate the award of attorney fees to Pioneer as the prevailing
party and instruct the district court on remand to determine
whether 	K D A 	should 	be 	awarded 	attorney 	fees 	as 	the
prevailing party.
CONCLUSION
¶26 	The district court erred in ruling that K D A waived its
statutory right of redemption under the terms of the Agreement.
We 	therefore 	reverse 	and 	remand 	this 	case 	for 	further
proceedings consistent with this opinion.