Mid-America v. Four-Four

1 At different stages of these proceedings, Plaintiffs have
alternately referred to themselves as “Mid-America” and as
“Williams.” For purposes of clarity, we refer to them
collectively as “Mid-America.”
2009 UT 43
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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Mid-America Pipeline Company No. 20070828
and Williams Field Services
Company,
Plaintiffs, Counterclaim
Defendants, and Appellants,
v.
Four-Four, Inc., F I L E D
Defendant, Counterclaimant,
and Appellee. July 21, 2009
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Third District, Salt Lake
The Honorable Robert P. Faust
No. 010900816
Attorneys: Michael D. Zimmerman, Mark O. Morris, Troy L. Booher,
Stewart O. Peay, Salt Lake City, for plaintiffs
C. Richard Henriksen, Jr., Robert M. Henriksen,
Jonathan G. Winn, Salt Lake City, for defendant
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WILKINS, Justice:
INTRODUCTION
¶1 Appellants Mid-America Pipeline Company and Williams
Field Services Company (Mid-America1) ask us to determine whether
the claims it wishes to file in a Third Amended Complaint comply
with the terms of a release agreement it entered into with
Appellee Four-Four, Inc. (Four-Four). It also asks us to
determine whether the district court violated the law of the case
by holding that those claims are not consistent with the release
agreement.
BACKGROUND

No. 20070828 2
¶2 Mid-America and Four-Four entered into an agreement
pursuant to which Four-Four was to construct approximately 330
miles of a 427 mile natural gas pipeline between Huerfano, New
Mexico and Vernal, Utah. The project was plagued by various
delays and setbacks, including an explosion that occurred when a
Four-Four bulldozer struck and punctured a live gas line.
Following the explosion, Mid-America reduced the scope of Four-
Four’s involvement in the project to exclude a portion of the
pipeline to be built in an area known as Baxter Pass.
¶3 Litigation arose between the parties, eventually
leading to execution of a Letter Agreement on September 19, 2005,
the purpose of which was to settle claims covered by Four-Four’s
insurance carriers. The Letter Agreement provides that Four-Four
pay $4.1 million to Mid-America and that, in turn, Mid-America
release (1) all of its negligence claims, (2) all claims related
to the removal of Four-Four from work at Baxter Pass, (3) all
claims related to the explosion, and (4) alternative claims for
unjust enrichment seeking the same relief as the other released
claims. Additionally, the Letter Agreement contains a provision
specifying that Mid-America “will prepare and file . . . an
Amended Complaint . . . the language of which will be agreed upon
by the parties and shall be consistent with the [Letter
Agreement].”
¶4 In August 2005, as part of the negotiations leading up
to the Letter Agreement, Mid-America prepared and tendered to
Four-Four a draft of a Third Amended Complaint outlining the
additional claims that would remain if settlement were reached on
the insured claims (the August Complaint). As outlined in the
August Complaint, Mid-America alleges that: (1) “Four-Four
breached its obligation to supervise its agents, employees, and
personnel”; (2) “Four-Four breached the Contract by providing
inadequate and untimely performance in the construction and
implementation of its portion of the Pipeline”; (3) “Four-Four
breached the Contract by adding additional personnel and
equipment without [Mid-America’s] approval”; and (4) in the
alternative, Four-Four was unjustly enriched by retaining
payments made by Mid-America.
¶5 Four-Four rejected the August Complaint both before and
after the execution of the Letter Agreement and asserted that the
only claims that survived the agreement are (1) Four-Four’s
failure to pay subcontractor liens, and (2) Four-Four’s excess
charges for standby. Four-Four proposed a general release to
this effect in October 2005.

3 No. 20070828
¶6 In response, in December 2005, Mid-America proposed
another version of the amended complaint which reflected Four-
Four’s understanding of the surviving claims. However, this
version of the complaint was only acceptable to Mid-America if
Four-Four agreed to pay additional money in settlement. The
parties did not reach agreement and no version of the Third
Amended Complaint was filed. Four-Four did not tender any of the
agreed upon payment to Mid-America.
¶7 Four-Four subsequently brought an action to enforce the
Letter Agreement, which was heard by Judge Stephen L. Henriod on
January 26, 2007. Judge Henriod found that the Letter Agreement
was enforceable and unambiguous, that Four-Four had breached the
agreement by insisting on an overbroad and inconsistent release
agreement, and that the August Complaint was consistent with the
terms of the Letter Agreement. Judge Henriod ordered that, after
Four-Four had tendered the settlement amount and interest, Mid-
America “file a Third Amended Complaint that is consistent with
the Letter Agreement.”
¶8 On March 28, 2007, Mid-America filed a Third Amended
Complaint which was largely similar to, but not identical to, the
August Complaint (the March Complaint). In response, Four-Four
filed a Motion to Strike the portions of the March Complaint it
claimed were inconsistent with the Letter Agreement-–
specifically, the same four additional claims that Judge Henriod
had ruled were within the scope of the settlement.
¶9 Due to Judge Henriod’s case load, the case was
reassigned to Judge Robert P. Faust. Judge Faust held a hearing
on the Motion to Strike, during which he instructed the parties
to try again to arrive at a Third Amended Complaint that was
acceptable to both of them, as required under their Letter
Agreement. These negotiations failed, and on August 21, 2007,
both parties submitted proposed complaints for a determination by
the court as to which one was consistent with the Letter
Agreement. Although Mid-America’s submitted complaint again
contained variations in its language from the March complaint, it
retained the additional claims. Four-Four’s version of the
complaint adopted some of Mid-America’s most recently proposed
changes, but did not include the additional claims. After
“carefully review[ing] the file . . . , the Letter Agreement[,]
and prior rulings,” Judge Faust granted Four-Four’s Motion to
Strike and ruled that Four-Four’s version of the complaint was
consistent with the Letter Agreement. Mid-America appeals this
ruling.

No. 20070828 4
ANALYSIS
¶10 We first address Mid-America’s contention that Judge
Faust violated the law of the case by essentially reversing Judge
Henriod’s ruling on the additional claims. We then address
whether the additional claims were retained under the Letter
Agreement.
I. JUDGE FAUST DID NOT VIOLATE THE LAW OF THE CASE
¶11 Mid-America inverts the law by suggesting that law of
the case doctrine prevents a district court from reconsidering a
resolved issue. Law of the case does not prohibit a district
court judge from revisiting a previously decided issue during the
course of a case, regardless of whether the judge has changed or
remained the same throughout the proceedings. Rather, “the
doctrine allows a court to decline to revisit issues within the
same case once the court has ruled on them.” IHC Health Servs.,
Inc. v. D & K Mgmt., 2008 UT 36, ¶ 26, __ P.3d __ (emphasis
added).
¶12 We have held that “under the law of the case doctrine,
a decision made on an issue during one stage of a case is binding
in successive stages of the same litigation.” Id. (internal
quotation marks omitted). In the initial stages of litigation,
however, this rule has reference only to the parties to the case.
“While a case remains pending before the district court prior to
any appeal, the parties are bound by the court’s prior decision,
but the court remains free to reconsider that decision. It may
do so sua sponte or at the suggestion of one of the parties.”
Id. ¶ 27. Thus the doctrine of law of the case tracks with the
Utah Rules of Civil Procedure, which provide that prior to final
judgment, “any order or other form of decision, however
designated, that adjudicates fewer than all the claims . . . is
subject to revision at any time before the entry of judgment
adjudicating all the claims and the rights and liabilities of all
the parties.” Utah R. Civ. P. 54(b).
¶13 In contrast, a district court’s power to reconsider
decided issues is limited when the case has been appealed and
remanded. IHC Health Servs., 2008 UT 36, ¶ 27. This aspect of
law of the case doctrine is frequently referred to as the mandate
rule. Id. ¶ 28. “The mandate rule, unlike the law of the case
before a remand, binds both the district court and the parties to
honor the mandate of the appellate court.” Id. Thus, the
decisions of an appellate court become the law of the case and
cannot be reconsidered on remand.

5 No. 20070828
¶14 While there are exceptions to the doctrine of law of
the case, these exceptions function only to dictate when the
district court has no discretion but rather must reconsider a
previously decided, unappealed issue. Id. ¶ 33. These
exceptions are “‘(1) when there has been an intervening change of
authority; (2) when new evidence has become available; or (3)
when the court is convinced that its prior decision was clearly
erroneous and would work a manifest injustice.’” Id. ¶ 34
(quoting Gildea v. Guardian Title Co., 2001 UT 75, ¶ 9, 31 P.3d
543).
¶15 In the instant case, Judge Faust was not required to
reconsider whether the additional claims proposed by Mid-America
were foreclosed by the Letter Agreement. Nor, however, was he
forbidden from doing so. Judge Faust operated well within his
discretion and did not violate the law of the case.
II. MID-AMERICA’S ADDITIONAL CLAIMS ARE NOT FORECLOSED BY THE
LETTER AGREEMENT
¶16 The question of whether Mid-America can include its
additional claims in its Third Amended Complaint is essentially
one of contract interpretation. When, as in this case, a
contract is unambiguous and can be interpreted as a matter of
law, we review the district court’s interpretation for
correctness, according no deference to the district court. See
Peterson v. Sunrider Corp., 2002 UT 43, ¶ 14, 48 P.3d 918. In
interpreting the Letter Agreement, ordinary contract principles
apply.
¶17 The Letter Agreement contains a provision stating that
Mid-America “will prepare and file . . . an Amended Complaint
. . . the language of which will be agreed upon by the parties
and shall be consistent with the [Letter Agreement].” Despite
this provision, Mid-America and Four-Four have never reached
agreement on the wording of the Third Amended Complaint. Rather
than insisting on agreement, they each submitted different
versions of the complaint to the court and asked the court to
decide which version complied with the Letter Agreement. Thus,
both parties waived this provision of the contract. “Waiver of a
contractual right occurs when a party to a contract intentionally
acts in a manner inconsistent with its contractual rights, and,
as a result, prejudice accrues to the opposing party or parties
to the contract.” Flake v. Flake, 2003 UT 17, ¶ 31, 71 P.3d 589
(internal quotation marks omitted). The parties’ choice to have
the court select a Third Amended Complaint rather than reach
agreement on the wording between themselves was an intentional
act inconsistent with their rights under the contract. As both
parties waived the provision, we need not address whether the

No. 20070828 6
waiver resulted in prejudice. See Ryan v. Curlew Irrigation &
Reservoir Co., 104 P. 218, 220 (Utah 1909)(holding that when both
parties to a contract ignore a clause of the contract, the clause
is waived and cannot then be enforced against one party in favor
of the other.)
¶18 “[I]t is well established that parties to a contract
may, by mutual consent, modify any or all of a contract.”
Pasker, Gould, Ames & Weaver, Inc. v. Morse, 887 P.2d 872, 877
(Utah Ct. App. 1994)(internal quotation marks omitted). The
provision requiring agreement on the language of the Third
Amended Complaint is neither a condition precedent to the
agreement nor a term essential to the accomplishment of the
balance of the contract. By waiving this provision, the parties
essentially, through their conduct, accomplished a modification
of the contract. As with an oral modification of a written
contract, “the remaining terms of the initial agreement still
govern.” R.T. Nielson Co. v. Cook, 2002 UT 11, ¶ 18, 40 P.3d
1119. The district court was therefore free to interpret the
agreement on its remaining terms as a matter of law. We review
for correctness. Peterson, 2002 UT 43, ¶ 14.
¶19 The interpretation of a contract is controlled by the
intentions of the parties. Cent. Fla. Invs., Inc. v. Parkwest
Assocs., 2002 UT 3, ¶ 12, 40 P.3d 599. We determine the
intentions of the parties by first looking within the four
corners of the agreement. Id. Provided that the language within
the four corners of the agreement is unambiguous, we look no
further than the plain meaning of the contractual language. Id.
We consider extrinsic evidence of the parties’ intentions only if
the contractual language is ambiguous. Id. We find ambiguity in
the language only if it is reasonably susceptible to more than
one interpretation. Id.
¶20 The Letter Agreement is not ambiguous. The plain
language clearly indicates that the parties intended a specific,
rather than a general, release of claims. A specific release
precisely delineates exactly which claims the parties agree to
release and retains all claims that are not so described in the
agreement. In contrast, a general release contains broad
language that releases “all claims between the parties except for
those which are expressly reserved.” Larry J. Coet Chevrolet v.
Labrum, 2008 UT App 69, ¶ 20, 180 P.3d 765.
¶21 Mid-America and Four-Four expressly agreed that Mid-
America would (1) “dismiss with prejudice all of its pending
negligence claims against Four-Four and release any unpled and/or
future negligence claims that it may have against Four-Four
relating to or arising out of the Rocky Mountain Expansion

7 No. 20070828
Project;” (2) “dismiss with prejudice all claims for damages
arising from or relating to [Mid-America’s] removing Four-Four
from the Baxter Pass portion of the Rocky Mountain Expansion
Project;” (3) “dismiss with prejudice all claims for breach of
contract and all contract theory claims against Four-Four for
damages directly and indirectly caused by, related to, or based
upon in any way the December 3, 1998 . . . explosion and its
aftermath . . . and also agree to release any unpled or future
breach of contract and contract theory claims against Four-Four
directly and indirectly caused by, related to, or based upon in
any way said explosion;” and (4) “dismiss with prejudice all of
its alternative claims for unjust enrichment seeking the same
relief consistent with what the parties have agreed to release in
this agreement.” Thus, Mid-America has released only four
specific claims. While the language with respect to the release
of these four specific claims is quite broad, it has no impact on
any other claims Mid-America may wish to bring which are not
directly or indirectly related to negligence, Baxter Pass, the
explosion, or unjust enrichment pled in the alternative to the
released claims. Thus, under the plain language within the four
corners of the contract, Mid-America’s additional claims of
inadequate supervision, inadequate and untimely performance, and
impermissible addition of additional personnel and equipment were
not released by the Letter Agreement.
¶22 With the provision that the parties must agree on the
language of the complaint waived, Mid-America is free to file any
Third Amended Complaint it likes, as long as that complaint
complies with the remaining, operative provisions of the
agreement. Specifically, its Third Amended Complaint must avoid
in all respects the claims that it has released in the Letter
Agreement.
¶23 The evidence presented in support of Mid-America’s
additional claims at trial must also avoid any reference to the
released claims. Whether evidence is free from the taint of the
released claims is to be determined by the sound judgment of the
trial court as the case develops.
CONCLUSION
¶24 Our interpretation of the Letter Agreement is now the
law of the case. We vacate Judge Faust’s order and remand to the
trial court for consideration of an amended complaint, to be
filed by Mid-America, consistent with this opinion.
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No. 20070828 8
¶25 Chief Justice Durham, Associate Chief Justice Durrant,
Justice Parrish, and Justice Nehring concur in Justice Wilkins’
opinion.