Opinion
Case No. 20010163-CA.
FILED May 23, 2002. (Not For Official Publication)
Third District, Salt Lake Department, The Honorable J. Dennis Frederick.
Richard R. Golden and James A. McIntyre, Salt Lake City, for Appellant.
J. Clare Williams, Salt Lake City, for Appellee.
Before Judges Davis, Greenwood, and Thorne.
MEMORANDUM DECISION
Plaintiff argues that (1) the rail shipping contract was ambiguous; (2) it provided adequate billing instructions; and (3) the trial court improperly weighed evidence or determined disputed issues of material fact. However, it is undisputed that Plaintiff faxed Defendant a cover sheet, a bill of lading, and eleven uniform hazardous waste manifests. Neither the cover sheet nor the bill of lading contained any explicit instructions as to where Defendant was to send the shipping bills. In contrast, all eleven manifests instruct that "Laidlaw is the contractor for this facility's waste. Please route all billing and correspondence to: [Laidlaw]." (Emphasis added.)
The trial court relied on these billing instructions in ruling that, in addition to failing to provide Defendant with accurate billing instructions, Plaintiff induced Defendant into any breach Defendant committed by sending the bills to Laidlaw and thereby disclosing the confidential shipping rate. Implicit in the trial court's ruling is the conclusion that Defendant acted reasonably in relying on the instructions contained within each of the eleven manifests.
From its ruling and our review of the record, it is apparent that the trial court, in effect, relied on the doctrine of waiver by estoppel in ruling as it did. Waiver by estoppel has been defined by courts and commentators as requiring (1) conduct by the first party, (2) that leads the second party to the reasonable belief that a contract provision has been waived, and (3) detrimental reliance or a change in position by the second party. See Saverslak v. Davis-Cleaver Prod. Co., 606 F.2d 208, 213 (7th Cir. 1979); Lone Mountain Prod. Co. v. Natural Gas Pipeline Co., 710 F. Supp. 305, 310-11 (D.Utah 1989); Shaeffer v. Kelton, 619 P.2d 1226, 1230 (N.M. 1980); 13 Samuel Williston, Williston on Contracts § 39:29, at 628-31 (4th ed. 2000); see also Restatement (Second) Contracts § 84 cmt. b (1981). Waiver of a contract provision may be implied by the conduct of the parties and need not be shown to have been an intentional relinquishment of a known right. See Shaeffer, 619 P.2d at 1230; Williston, supra § 39:29 at 628, 631. The proper focus in applying this doctrine is the effect of the conduct on the second party and not on the intent of the first party. See Saverslak, 606 F.2d at 213; Lone Mountain, 710 F. Supp. at 311; Williston, supra § 39:29, at 629.
Here, it is undisputed that Plaintiff, not Laidlaw, sent the manifests to Defendant by fax. This action, which provided Defendant with eleven manifests instructing that "all billing" be sent to Laidlaw, was conduct that lead Defendant to believe the billings were to be sent to Laidlaw notwithstanding the confidentiality provision of the rail contract. Defendant then relied on Plaintiff's action by sending the shipping bills to Laidlaw.
Plaintiff does not adequately address the reasonableness of Defendant's reliance in its briefs. See Utah R. App. P. 24(a)(9). Nevertheless, even if Plaintiff had challenged the reasonableness of Defendant's reliance, we would conclude that Defendant acted reasonably in relying on the instructions contained in the eleven manifests, which, on their face, are not necessarily inconsistent with the terms of the rail contract. Applying the waiver by estoppel doctrine on summary judgment was appropriate in this case. See Practical Constr. Co. v. Granite City Housing Auth., 416 F.2d 540, 544 (7th Cir. 1969) (stating where no question presented "as to which reasonable minds could differ," summary judgment is appropriate on the issue of waiver); Central Ill. Pub. Serv. Co. v. Atlas Minerals, Inc., 965 F. Supp. 1162, 1174 (C.D.Ill. 1997),aff'd, 146 F.3d 448 (7th Cir. 1998) (stating waiver is a legal question where undisputed facts give rise to "only one possible inference");Vessels Oil Gas Co. v. Coastal Ref. Mktg., Inc., 764 P.2d 391, 392 (Colo.Ct.App. 1988) ("Ordinarily, the issue of waiver is a matter for factual determination by the trial court. However, where, as here, the facts are uncontested and the evidence . . . is entirely documentary, the waiver issue becomes a matter of law. . . ." (citation omitted)); Williston, supra § 39:21, at 588-89.
Thus, Plaintiff is estopped from claiming Defendant breached the rail contract or misappropriated a trade secret as a result of sending the shipping bills to Laidlaw.
Because the waiver by estoppel issue disposes of this appeal, we do not reach Plaintiff's arguments regarding the ambiguity of the contract, nor is it necessary to decide whether Plaintiff breached the contract by providing allegedly inadequate billing instructions.
Affirmed.
I CONCUR: Pamela T. Greenwood, Judge.
I respectfully dissent from the majority opinion.
It is well-settled that summary judgment is only appropriate where there are no disputed issues of material fact and the prevailing party is entitled to judgment as a matter of law. See Bearden v. Croft, 2001 UT 76,¶ 5, 31 P.3d 537. We also must view "`the facts in the light most favorable to the losing party below' and give `no deference to the trial court's conclusions of law.'" Id. (citation omitted). This is material because in Utah "[w]aiver requires the intentional relinquishment of a known right," United Park City Mines Co. v. Greater Park City Co., 870 P.2d 880, 891 (Utah 1993), rather than the majority's approach of focusing on the "effect of the conduct on the second party." This then requires the trial court to examine several factual questions, as yet unexamined, to determine "whether the elements of waiver can be made out and whether the elements of estoppel are present." Id.; see also K T, Inc. v. Koroulis, 888 P.2d 623, 628-29 (Utah 1994).
Here, Valley Oil has presented the trial court with sufficient evidence to suggest that Valley Oil never intended to waive the material provisions of the contract. Moreover, even accepting the majority's approach, an approach which as yet has not been adopted in Utah and which in some respects is contrary to precedent, Valley Oil presented sufficient evidence to suggest that Union Pacific acted unreasonably in relying on the address found only in the manifests that Valley Oil clearly had no part in generating. See Saverslak v. Davis-Cleaver Prod. Co., 606 F.2d 208, 213 (7th Cir. 1979). Thus, it is the proper role of a fact-finder to weigh the evidence and come to a conclusion concerning the effect of Valley Oil's conduct on the material terms of the contract.See Ballard v. Beneficial Life Ins. Co., 82 Utah 1, 21 P.2d 847, 856-57 (Utah 1933) (stating "[r]ulings made in cases of waivers or estoppels, of course, are based upon and must be considered in view of the particular facts of each case").
In Utah, "`Waiver requires three elements: (1) an existing right, benefit, or advantage; (2) knowledge of its existence; and (3) an intention to relinquish the right.' The intention to relinquish the right may be either expressed or implied. . . ." K T, Inc. v. Koroulis, 888 P.2d 623, 628-29 (Utah 1993) (emphasis added) (citation omitted).
Therefore, it is my opinion that the majority opinion rests on a standard not as yet accepted in Utah, and also upon a standard that stands in stark contrast to what is the accepted treatment of waiver in Utah. Under either standard, I believe that Valley Oil presented the trial court with sufficient evidence to create material issues of fact sufficient to survive Union Pacific's motion for summary judgment.
Accordingly, I dissent.