Collard v. Nagle

1 Kathryn Collard as Trustee for the Leroy Collard Trust
brought this appeal as the successor-in-interest to Leroy
Collard.
2006 UT 72
This opinion is subject to revision before final
publication in the Pacific Reporter.
r
IN THE SUPREME COURT OF THE STATE OF UTAH
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Kathryn Collard, Trustee of the 	No. 20050714
Leroy Collard Trust,
Plaintiff and Appellee,
v.
Nagle Construction, Inc., a Utah
corporation; Gary M. Nagle, an
individual, and Marilyn F. Nagle, 	F I L E D
an individual,
Defendants and Appellants. 	November 17, 2006
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Third District, Salt Lake
The Honorable Bruce Lubeck
No. 990907648
Attorneys: 	Kathryn Collard, Salt Lake City, for plaintiff
Sean N. Egan, Salt Lake City, for defendant
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DURHAM, Chief Justice:
¶1 	This case is before us on appeal from the Third
District Court. 	Defendant Nagle Construction, Inc. (Nagle)
challenges the trial court’s order awarding it damages in the
form of an offset for amounts owed under a Uniform Real Estate
Contract by the Leroy Collard Trust. 1 	The issue before us is
whether the district court abused its discretion in fashioning
the equitable remedy awarded below; we hold that it did not.
BACKGROUND
¶2 	On March 30, 1978, Leroy Collard (Collard) and Nagle
signed a Uniform Real Estate Contract (UREC) for the sale of a
condominium unit located in Salt Lake City. 	Under Addendum 1 to
the UREC, Collard purchased the property for $100,500 to be paid

2 Collard’s request to assume the mortgage was denied by the
lending institution.
No. 20050714 	2
under the following conditions: 	Collard was to make an initial
payment of $10,000, assume a mortgage on the property for
$59,958.75, and tender 55,000 shares of stock in Utah Coal and
Chemical Corporation to make up the remaining balance of
approximately $30,000. 	Importantly, Addendum 1 also stipulated
that Nagle would deliver title to the premises to Collard once
Nagle had verified that the stock was marketable and could be
sold at a price sufficient to cover the remaining $30,000
balance. 	The UREC specified that any party in default of any of
the covenants or agreements “shall pay all costs and expenses,
including a reasonable attorney’s fee.”
¶3 	Collard paid Nagle the initial $10,000 and began making
mortgage payments, although Collard never actually assumed the
mortgage as required by the UREC. 2 	Collard also took possession
of the property, made improvements, and paid property taxes.
Collard recorded notice of the UREC on May 18, 1979.
Nevertheless, Nagle considered Collard in default for failing to
assume the mortgage and threatened Collard with foreclosure
proceedings.
¶4 	In an attempt to reconcile their conflict, Collard and
Nagle negotiated Addendum 2 to the UREC. 	Addendum 2 reads as
follows:
Title of premises being sold under the
contract referred to above will be
transferred when Nagle Construction Company
sells sufficient of the shares of Utah Coal
and Chemical Corp. transferred under addendum
#1 to realize $85,000 cash. 	[Nagle] hereby
agrees to sell shares sufficient to realize
$85,000 within 1 year of receipt thereof
providing the market value of said shares
will cause a realization of $85,000.
Should the value of the 55,000 shares
conveyed not equal $85,000 within 1 year,
[Collard] agrees to convey additional shares
of Utah Coal and Chemical Corp. stock or cash
sufficient to bring the total value conveyed
to [Nagle] to $85,000 before [Nagle] conveys
title to premises sold to [Collard].

3 Although the UREC and its addenda specified only 55,000
shares, the district court found that Collard had in fact
delivered 105,000 shares. 	The district court stated that given
the historical value of the shares, 55,000 shares would not have
been adequate to realize the $85,000 value required under
Addendum 2, and that the record established that Collard
transferred additional shares in order to permit Nagle to realize
the $85,000 contemplated by Addendum 2. 	Nagle’s testimony
disputed this version of events, but the trial court specifically
rejected that testimony.
4 Leroy Collard died on February 8, 1997. 	The Trust is his
successor-in-interest.
3 	No. 20050714
In September 1979, approximately eighteen months after the UREC
was signed, Collard delivered 105,000 shares of Utah Coal and
Chemical Corporation to Nagle. 3
¶5 	During the year following the receipt of the 105,000
shares of stock, Nagle never made any attempt to sell them. 	In
fact, Nagle inquired as to the value of the stock through its
accountant only once during that year. 	Nagle never provided
Collard with any information as to whether the price of the stock
had reached $85,000, despite several conversations regarding the
transaction.
¶6 	On January 13, 1981, sixteen months after Collard’s
delivery of the shares, Nagle sent Collard a letter claiming
Collard had breached the agreement because the value of the
shares had not reached $85,000 during the year following receipt.
However, Nagle did not specify the amount of the deficiency.
Collard responded, contending that the shares had indeed reached
a value of $85,000 during the designated year. 	Neither party
took further action until 1999. 	During those eighteen years,
Collard and his successors continued to occupy the condominium,
paid the mortgage and taxes, and made improvements. 	While
refinancing the property in 1986, Collard received a notice
stating that the title remained in Nagle’s name. 	Collard
attempted to change the title to reflect his name three years
later but was unsuccessful.
¶7 	On July 28, 1999, the Leroy Collard Trust (the Trust) 4
brought suit against Nagle seeking declaratory relief to quiet
title to the condominium in its name, claiming breach of contract
and adverse possession. 	Nagle counterclaimed, seeking
forfeiture, foreclosure, and a quiet title order. 	Motions for
summary judgment were filed by both parties.

No. 20050714 	4
¶8 	The district court held that the statute of limitations
barred both parties’ legal claims and ordered that an equitable
hearing be held in August 2000. 	At the hearing, the district
court ruled that the UREC was binding on the parties, but was
subject to a six-year statute of limitations. 	As a result, the
district court held that Nagle’s counterclaims were barred
because Nagle had not acted on Collard’s alleged default within
the statutory period. 	The Trust, on the other hand, was not
barred by the limitations period because the mortgage payments on
the property had been continuous and were still being made. 	The
district court granted the Trust’s cross-motion for summary
judgment to quiet title and ordered Nagle to deliver to an escrow
agent a special warranty deed to the Trust. 	The district court
then ordered that the Trust receive the title upon complete
payment of the mortgage. 	The Trust’s claim seeking attorney fees
was denied.
¶9 	After the district court’s ruling, the Trust paid the
balance of the mortgage and received title from the escrow agent.
It subsequently sold the property to a third party, a Collard
family member. 	The property appraised for $250,000 and was sold
for approximately $230,000.
¶10 	Nagle appealed the district court’s decision to the
Utah Court of Appeals, contending that summary judgment in favor
of the Trust was erroneous because Collard had received the
property without paying the full purchase price contemplated by
the UREC and its addenda. 	See Collard v. Nagle, 2002 UT App 306,
¶ 17, 57 P.3d 603. 	The Trust cross-appealed for attorney fees.
Id. ¶ 1. 	The court of appeals reversed the summary judgment,
holding that there was a material dispute of fact as to whether
the stock transferred to Nagle reached the $85,000 value required
by the contract during the relevant time. 	Id. ¶ 21. 	The court
of appeals further noted, however, that “[b]ecause [the Trust]
has already sold the property at issue, all that remains for a
remedy for [Nagle] is a monetary award. 	Thus, the concept of
offset is easily applied to the facts of this case, and the trial
court can fashion a remedy after any factual issues are
resolved.” 	Id. ¶ 26. 	To that end, the court of appeals gave the
following specific instructions to the trial court:
If, on remand, the fact finder determines
that the 55,000 shares were worth at least
$85,000.00 at some point in time between
September 18, 1979 and September 18, 1980,
and that [Nagle] was obligated to sell the
shares at that time, then [the Trust] has
performed [its] obligations and [Nagle] is

5 The district court arrived at this amount by subtracting
the average value of the stock during the relevant year--$0.50
multiplied by 105,000, or $52,500--from the amount due under the
contract--$0.81 multiplied by 105,000, or $85,050.
5 	No. 20050714
not entitled to further relief. 	However, if
the fact finder determines that the shares
did not reach a value of $85,000.00 within
the appointed period, then [Nagle] is
entitled to offset the amount of the
shortfall [Collard] was obligated to pay in
cash or additional shares against the value
of the property.
Id. ¶ 27.
¶11 	Thus, on remand, the sole question for the trial court
was the amount, if any, of an offset due to Nagle as a result of
a shortfall between the actual value of the shares he received
and the amount due to him under the contract. 	The court of
appeals’ decision cut off any claims by Nagle to title to the
property, which by that time had vested in a third party.
¶12 	On remand, the parties introduced conflicting evidence
regarding the value of the shares during the period between
September 18, 1979, and September 18, 1980. 	The district court
determined that in order for the 105,000 shares to yield $85,000,
the price per share had to reach $0.81 during the relevant time
period. 	Given that the stock prices fluctuated 	extensively, the
district court found the evidence insufficient to conclude that
the price per share had, in fact, reached $0.81. 	The district
court did find that an average price of $0.50 per share was
obtainable during that year. 	It thus ordered the Trust to pay an
offset of $32,550 5 to Nagle. 	As to attorney fees, the district
court held that because an equitable remedy had been fashioned
and neither Nagle nor the Trust had “fully and substantially
prevailed,” neither party was entitled to fees. Nagle now appeals
from the decision of the district court. 	We have jurisdiction
pursuant to Utah Code section 78-2-2(3)(j) (2002).
ANALYSIS
¶13 	The issue before us is whether the district court
abused its discretion in fashioning the equitable remedy
represented by the offset award. 	When a district court fashions
an equitable remedy, we review it to determine whether the
district court abused its discretion. 	See Morris v. Sykes, 624
P.2d 681, 684 (Utah 1981). 	This standard recognizes “the

No. 20050714 	6
district court’s [unique] ability to balance facts and craft
equitable remedies and our [corresponding] hesitance to act as a
Monday morning quarterback in such matters.” 	Parduhn v. Bennett,
2005 UT 22, ¶ 23, 112 P.3d 495. 	Reviewing the district court’s
decision under this standard, we conclude that the district court
did not abuse its discretion in this case. 	We review Nagle’s
challenges to the decision in sequence.
¶14 	Nagle first argues that the trial court improperly
granted specific performance to the Trust without a finding of
fact that the stock shares reached the requisite $85,000 value
within one year. 	As noted above, the court of appeals determined
that only a monetary remedy, not specific performance, was at
issue on remand, and the trial court followed its instructions.
Nagle did not seek certiorari review of the court of appeals’
decision on the nature of the available remedies, and the trial
court was not at liberty to ignore the appellate court’s mandate.
In other words, the trial court’s only option was to determine
whether an offset was owing and in what amount. 	Specific
performance was impossible given that the Trust had already
transferred title. 	Although Nagle argues before this court that
the transfer was “inequitable,” he made no effort to have it set
aside by petitioning for certiorari review of the court of
appeals’ decision. 	In any event, the trial court’s factual
findings on the fairness and reasonableness of the transfer to
the third party, which we discuss below, are determinative.
¶15 	Second, Nagle argues that since the stock he received
never reached the $85,000 level and thus never triggered his
obligation to sell, the trial court’s calculation of the offset
amount was erroneous. 	This argument is also precluded under the
decision of the court of appeals. 	The trial court’s
determination followed the appellate court’s specific directions
regarding the method for determining and calculating an offset.
Furthermore, the trial court examined the equities and determined
that Nagle “was ‘speculating’ in the stock value, and did nothing
to attempt to sell even a portion of the stock when it would have
realized some value had he done so,” and also that the stock
“could have often [at varying points during the year] been sold
for very near, in all likelihood, the value needed to achieve
$85,000.” 	Nagle’s argument thus fails on the facts found by the
trial court, which are supported by the evidence.
¶16 	Nagle’s third argument challenges the trial court’s
factual determination that 105,000, rather than 55,000, shares
were transferred by Collard pursuant to the contract. 	The trial
court specifically indicated in its Memorandum Decision that it
disbelieved Nagle’s testimony claiming that the additional shares

7 	No. 20050714
it received over and above the 55,000 referenced in the contract
were part of a separate transaction. 	We defer to such findings
of fact by trial courts, and the court’s finding in this instance
is amply supported by the evidence.
¶17 	Nagle next asserts that the trial court erred in
concluding that the Trust’s conveyance of the property to a third
party was not inequitable. 	Once again, under the abuse of
discretion standard, the trial court’s review of the evidence is
entitled to deference. 	Here the trial court heard testimony
regarding the appraised value of the property, the condition of
the real estate market, and the effect on marketability of a lis
pendens filed by Nagle. 	It concluded that the sale by the Trust
was reasonable and not inequitable. 	That conclusion is wholly
supported by the evidence.
¶18 	The final two issues raised by Nagle on appeal relate
to the trial court’s denial of prejudgment interest on the amount
of the offset awarded to Nagle and of attorney fees to Nagle as a
prevailing party. 	As to the first question, the trial court
correctly concluded that the offset amount could not have been
known prior to the presentation of evidence on the value of the
shares, was part of an equitable allocation of obligations
between the parties, and was thus not eligible for prejudgment
interest. 	Likewise, the trial court was correct in determining
that Nagle’s remedy here was equitable, not awarded under the
contract, and therefore not eligible for attorney fees. 	The
trial court further held, correctly, that “neither defendant nor
plaintiff has fully and substantially prevailed,” and therefore
no fees were warranted in any event.
¶19 	The decision below is affirmed in all respects.
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¶20 	Associate Chief Justice Wilkins, Justice Durrant,
Justice Parrish, and Justice Nehring concur in Chief Justice
Durham’s opinion.