author: POHLMAN, Judge:

text:
    STATE of Utah, Appellee, v. Lamont Boyd SQUIRES, Appellant.
    No. 20161032-CA
    Court of Appeals of Utah.
    Filed June 27, 2019
    Clemens A. Landau, Troy L. Booher, and Freyja R. Johnson, Salt Lake City, Attorneys for Appellant
    Sean D. Reyes, Salt Lake City, and William M. Hains, Attorneys for Appellee
    Judge Jill M. Pohlman authored this Opinion, in which Judges Kate Appleby and Diana Hagen concurred.
    Opinion
   POHLMAN, Judge:

¶1 Lamont Boyd Squires, on behalf of his employer, convinced his uncle (Uncle) to pledge real property as collateral for a loan to be used as part of a larger financial transaction. After the transaction failed and Uncle's collateral was lost, Squires was charged with and convicted of communications fraud and a pattern of unlawful activity. Squires appeals, contending that his trial counsel was constitutionally ineffective for not objecting to jury instructions for communications fraud and for not making a hearsay objection. He also contends that there was insufficient evidence to convict him of engaging in a pattern of unlawful activity. We conclude that his counsel was not ineffective and therefore affirm his communications fraud convictions. We reverse, however, Squires's conviction for engaging in a pattern of unlawful activity and remand with instructions to enter a judgment of acquittal on this count.

BACKGROUND

The Transaction

¶2 Squires was a construction manager for Fitz Roy LLC, a real estate investment company that also built "spec" houses. Squires oversaw the construction process, while his boss, Stephen Anderson, lined up investors for projects and exclusively handled the company's finances. During the financial crisis of 2008, Anderson learned of a "really good opportunity" to buy distressed developments in the Teton Valley, finish them, and sell them for a profit. To get funding to pursue this project, Anderson contacted Dincom, a lender. Dincom was willing to loan approximately $10 million, paid in monthly million-dollar disbursements, but required a $660,000 cash deposit.

¶3 Squires knew Fitz Roy did not have enough money for the cash deposit, but he also knew that Uncle had unencumbered property that could help secure the loan. Wanting to become a partner in Fitz Roy, Squires told Anderson about Uncle, and the two devised a plan. Squires subsequently contacted Uncle early in 2008 with a proposal to use Uncle's property as collateral for a hard money loan, which in turn would be used as the $660,000 deposit for the Dincom loan. Squires promised Uncle that the first disbursement from Dincom would be used to free his property. According to Squires, Fitz Roy would need Uncle's property for "two to three weeks at the most," though Squires knew that ninety days was standard in the industry. In addition, Squires told Uncle that Fitz Roy would pay him a fee for use of his property.

¶4 Squires and Uncle did not talk about the transaction's possible risks. Uncle said that he needed "to get some more information," but he wanted to help his nephew because "[i]n [their] family [they] help each other." He was under the impression that Fitz Roy was "flourishing," even though it "didn't have that much free cash," and understood that, under Squires's proposal, the $660,000 deposit would be kept in escrow in case the Dincom loan did not fund and, if it did, the "very, very first payment was supposed to ... free up [his] property." Squires guaranteed to Uncle "over and over again" that there "would be nothing to worry about."

¶5 Over the next few weeks, Uncle looked into the deal. He contacted the escrow company handling the transaction and also asked a neighbor experienced in international trading about the process. Uncle, however, found himself needing to address a pressing family concern and told Squires to use another option to get the funding. Despite having told Uncle that Fitz Roy had other alternatives for obtaining funding, Squires now told Uncle that they had no other options and the investors were threatening to back out. Uncle testified at trial that Squires pressured him and said they "had to make a decision quick." Uncle thought, "[W]ell, okay, I guess I'm going to have to stay with it."

¶6 In late March, Uncle and Anderson signed the necessary paperwork. Uncle testified that he "didn't really have time" to look at the documents and trusted Squires "that everything was going to be taken care of." The documents provided that repayment of the hard money loan for $660,000 would be due in ninety days-not two to three weeks as Uncle had been told. The documents also provided that in exchange for the use of Uncle's property as collateral, Fitz Roy would pay Uncle $100,000, with 25% paid immediately and the rest due in ninety days. Fitz Roy also agreed to provide Uncle with a construction loan so that he could construct a new building on his property. After signing the papers with Anderson, Uncle was again promised, this time by Dincom representatives, that it would "only take two weeks" for the loan to fund.

¶7 After three weeks and still no word from Squires, Uncle called Squires "to see if everything was done." Squires told Uncle that Dincom could not finance the whole loan, so Fitz Roy was securing other options to get the total amount of money it needed. In fact, the day before Dincom's first disbursement was due, a Dincom employee called Anderson with a request to change the loan's terms. After first demanding a return of the $660,000 in escrow, Anderson renegotiated the loan, accepting an initial disbursement of roughly half the original agreed-upon amount. Squires knew that Anderson was working with Dincom and "that there was a hiccup" in funding the loan. In a conversation with Uncle, Squires told Uncle that "it's taking a little longer [than expected] but everything's fine." He did not tell Uncle that they had received a disbursement from Dincom or that the amount of the disbursement was less than originally anticipated.

¶8 Anderson did not put any of the partial disbursement toward repaying the hard money loan secured by Uncle's property. Because there were "other obligations that [he] had to pay," and because he had ninety days to pay the hard money loan, Anderson's plan was to conduct business as usual. He made payments for, among other things, credit cards, business materials, and Squires's salary, and also transferred funds to "personal accounts."

¶9 By this time, Uncle had started construction on his new building, and Squires helped him with the engineering. Uncle frequently called Squires about construction, but the discussion often turned to the loan. Squires told Uncle that "everything's fine, it's moving along," assuring him that "things were going just exactly like [Squires and Anderson] promised."

¶10 In May, Fitz Roy continued looking for additional funding, and it used some of the Dincom money for investment opportunities. Anderson wired $200,000 to an investment trader to obtain more money, and another $104,000 to the escrow company on the Dincom loan to obtain a loan from investors in Seattle. Fitz Roy lost the $104,000, and most of the $200,000 was returned by the trader and sent to Dincom "to stimulate Dincom into fulfilling" the loan agreement. Also during this time, Anderson "talked extensively" with Dincom trying to convince it to fund the loan. Dincom made no disbursement in May or June. Squires knew that Anderson was pursuing other funding and that Dincom did not disburse funds in June, though he thought Dincom made a disbursement in May.

¶11 Construction on Uncle's building proceeded, and Uncle was ready to order trusses. Uncle had money on a line of credit he was saving "just in case they didn't get the money" from Dincom, but he also needed to order the trusses so they would arrive on time. He asked Squires whether he needed to save that money or whether he could order the trusses, and Squires told him, "[G]o ahead and keep spending the money." Uncle was "constantly contacting" Squires about the loan, and Squires responded that "everything's fine." Squires also told Uncle that the hard money lender was cooperating and not charging extra fees because it "kn[ew] the situation" they were in.

¶12 By July, now several months out from entering the loan, "the story was getting a little more complicated." Dincom informed Anderson that it could not fund the loan and sent $290,000 to Fitz Roy and told Anderson to treat it as a return of escrow. Anderson protested, but there was nothing he could do because "Dincom was going under." In an attempt to salvage what he could, Anderson used $250,000 to acquire a loan from another investment company. That loan "ended up being [a] scam," and Anderson lost the money.

¶13 Squires knew that Dincom had returned some of the escrow money and had discussed the potential loan with Anderson. Around this time, Squires told Uncle that Fitz Roy had $5 million in a bank account but that it was "complicated." Squires, at Anderson's direction, presented a letter to Uncle showing that there was $5 million in the bank account, but Squires later learned that the letter was forged. After the ninety days to repay the hard money lenders had passed, Squires "realized that something was really going wrong." As things got more complicated, Squires told Uncle to talk directly with Anderson. Through August, Uncle and Squires did not talk.

¶14 Things changed in September when the hard money lender called Uncle and told him it was foreclosing on his property. According to Uncle's trial testimony, the hard money lender informed Uncle that Squires had not "been communicating with [it]" and that Squires had "spent the money back in May and [had not] been telling the truth." Uncle asked Squires about his conversation with the lender, and Squires got "pretty angry" and told him, "[E]verything's okay, everything's safe and secure and it's just a bunch of lies." Squires said that "people go bankrupt all the time" and made Uncle feel that Squires "was chewing [him] out for not being a man." Uncle apologized.

¶15 Uncle and his family eventually sat down with Squires and Anderson to talk about what had happened. Uncle believed the "deposit was still supposed to be safe and secure," so he asked Squires about it. Squires told him that Fitz Roy spent the money on "cabinets and carpet."

¶16 Uncle lost his property. He was forced to sign it over to his brother and another nephew, who purchased the property to save it from foreclosure. Uncle also had to sell his house because of a $300,000 debt on his line of credit that he could not afford. The deal was "exactly opposite of everything that [Squires] had promised."

Procedural History

¶17 The State charged Squires with five counts of communications fraud and one count of a pattern of unlawful activity. See Utah Code Ann. § 76-10-1801 (LexisNexis 2017) (communications fraud); id. § 76-10-1603 (pattern of unlawful activity). A jury convicted Squires on four of the five communications fraud counts and on the pattern of unlawful activity count. The court sentenced Squires to a prison term not to exceed fifteen years on each count, suspended the sentence, and placed him on probation. It also ordered Squires to pay court-ordered restitution of $30,000, though Squires stipulated that the complete restitution amount was $400,000.

¶18 Squires filed a motion to arrest judgment and a motion for a new trial, both of which challenged the jury instructions and the sufficiency of the evidence. The trial court denied the motions.

¶19 As for the jury instructions, the court rejected Squires's argument that communications fraud requires specific intent to defraud. The court noted that the statute itself "specifies the mens rea required-a person may be convicted for communications fraud if 'the pretenses, representations, promises, or material omissions made or omitted were made or omitted intentionally, knowingly, or with a reckless disregard for the truth.' " (Quoting Utah Code section 76-10-1801(7).) Reasoning that the statute recognizes "knowingly" and "recklessly" as mental states, the court determined that Squires "mistakenly concludes [c]ommunications [f]raud to be a specific intent crime." The court also rejected the argument that the word "devise" in the statute "connotes a specific intent to defraud." It concluded that "it is possible for a person to knowingly or recklessly form, plan, invent, or calculate a scheme or artifice to obtain money, property, etc., from another without having specific intent to defraud." So concluding, and having examined the jury instructions as a whole, the court determined that the jury was properly instructed.

¶20 As for the sufficiency of the evidence on the pattern of unlawful activity charge, the trial court noted that the statute requires " 'three episodes of unlawful activity, which episodes are not isolated, but have the same or similar ... characteristics.' " (Quoting Utah Code section 76-10-1602(2).) Relying on the four communications fraud counts on which Squires was convicted, the court concluded Squires "engaged in at least three separate but related episodes of unlawful activity." See Utah Code Ann. § 76-10-1602(4)(hhhh) (listing communications fraud as an example of unlawful activity). The court also concluded that there was "sufficient evidence at trial that [Squires] was engaged in an enterprise," as required by the statute. It noted that Squires worked for Fitz Roy, communicated to Uncle in his capacity as Fitz Roy's construction manager, and made "repeated misrepresentations" to obtain Uncle's property on Fitz Roy's behalf. The court also rejected Squires's assertion that an enterprise "must be an ongoing association for the purpose of engaging in a course of unlawful activity ." (Emphasis in original.) Relying on Utah caselaw, the court concluded that "an enterprise is simply an ongoing organization functioning as a continuing unit for the purpose of engaging in a course of conduct."

¶21 The trial court therefore denied Squires's motions and sustained his convictions. Squires appeals.

ISSUES AND STANDARDS OF REVIEW

¶22 Squires contends that his trial counsel was constitutionally ineffective for not objecting to certain jury instructions on communications fraud. He also contends that trial counsel was constitutionally ineffective for not objecting to what he characterizes as Uncle's hearsay statements at trial. "An ineffective assistance of counsel claim raised for the first time on appeal presents a question of law." State v. Ott , 2010 UT 1, ¶ 16, 247 P.3d 344 (cleaned up).

¶23 Finally, Squires contends that the trial court erred in denying his motion to arrest judgment and motion for a new trial because the evidence at trial was insufficient to convict him of a pattern of unlawful activity. "When the [trial] court denies a motion to arrest judgment and for a new trial, we review that decision for an abuse of discretion, but we review the legal standards applied by the [trial] court in denying such a motion for correctness." State v. Newton , 2018 UT App 194, ¶ 18, 437 P.3d 429 (cleaned up), cert. granted , 437 P.3d 1249 (Utah 2019).

ANALYSIS

I. Ineffective Assistance of Counsel

¶24 Squires contends that his trial counsel was constitutionally ineffective in two ways: (A) he failed to object to the jury instructions on communications fraud and (B) he failed to object to out-of-court statements as hearsay.

¶25 To demonstrate ineffective assistance of counsel, Squires must show that his "counsel's performance was deficient" and that "the deficient performance prejudiced the defense." Strickland v. Washington , 466 U.S. 668, 687, 104 S.Ct. 2052, 80 L.Ed.2d 674 (1984). As should be obvious from a two-part test, "a failure to prove either element defeats the claim." State v. Horvath , 2018 UT App 165, ¶ 30, 436 P.3d 191 (cleaned up). Thus, if we conclude that Squires's counsel was not deficient, we need not address prejudice. Cf. State v. Reid , 2018 UT App 146, ¶ 19, 427 P.3d 1261 ("Because both prongs of the Strickland test must be met to establish ineffective assistance of counsel, we need not always address both prongs." (cleaned up)).

¶26 " 'Judicial scrutiny of counsel's performance [is] highly deferential' and includes a strong presumption that counsel 'rendered adequate assistance and made all significant decisions in the exercise of reasonable professional judgment.' " State v. Reigelsperger , 2017 UT App 101, ¶ 92, 400 P.3d 1127 (quoting Strickland , 466 U.S. at 689-90, 104 S.Ct. 2052 ). Counsel is not required "to seek resolution of every unsettled legal question that might bear on the proceeding" or "to make every novel argument" that new counsel for the defendant might fashion on appeal. Id. "[T]he proper standard for attorney performance is that of reasonably effective assistance." Strickland , 466 U.S. at 687, 104 S.Ct. 2052.

A. Communications Fraud

¶27 Utah's communications fraud statute criminalizes false or fraudulent communications, including material omissions, that are made "for the purpose of executing or concealing [a] scheme or artifice" "to defraud another or to obtain from another ... anything of value." Utah Code Ann. § 76-10-1801(1), (7) (LexisNexis 2017). Squires's main theory at trial and on appeal is that he did not intend to defraud Uncle. Rather, Squires asserts that he wanted the transaction to succeed. He thus contends that to "avoid the over-criminalization of failed transactions" the communications fraud statute requires the State to prove specific intent to defraud. He also contends that the fraud must relate to a "presently existing fact." Because, in Squires's view, the jury instructions in his case did not inform the jury on these important concepts, he asserts that his trial counsel was constitutionally ineffective in not objecting to the instructions or requesting different ones. We address each argument in turn.

1. Specific Intent to Defraud

¶28 Squires argues that the communications fraud statute requires specific intent to defraud and, to support his position, points to the statute's use of the legal term of art "scheme or artifice." Relying on the statute's language, Utah caselaw, and analogous federal law, Squires asserts that " 'no reasonable lawyer would have found an advantage' in failing to properly identify 'scheme or artifice' and its relationship to intent to defraud." (Quoting State v. Barela , 2015 UT 22, ¶ 27, 349 P.3d 676.)

¶29 "To establish a claim of ineffectiveness based on an oversight or misreading of law, a defendant bears the burden of demonstrating why, on the basis of the law in effect at the time of trial, his or her trial counsel's performance was deficient." State v. Dunn , 850 P.2d 1201, 1228 (Utah 1993). We conclude that Squires's interpretation of the statute is not dictated by its plain language and that neither Utah nor federal caselaw settles the question. Thus, trial counsel was not deficient in not insisting on other language in the jury instructions. See State v. Bruun , 2017 UT App 182, ¶¶ 68, 72-75, 405 P.3d 905 (declining to deem counsel ineffective in deciding not to move for dismissal of certain counts when neither state nor federal law was settled on the issue); State v. Edgar , 2017 UT App 53, ¶ 18, 397 P.3d 670 ("Counsel cannot be faulted for failing to advance a novel legal theory which has never been accepted by the pertinent courts." (cleaned up)).

¶30 First, the plain language. The communications fraud statute provides:

(1) Any person who has devised any scheme or artifice to defraud another or to obtain from another money, property, or anything of value by means of false or fraudulent pretenses, representations, promises, or material omissions, and who communicates directly or indirectly with any person by any means for the purpose of executing or concealing the scheme or artifice is guilty of:
...
(d) a second degree felony when the value of the property, money, or thing obtained or sought to be obtained is or exceeds $5,000 ....

Utah Code Ann. § 76-10-1801(1) (LexisNexis 2017). Subsection (7) further provides that a "person may not be convicted under this section unless the pretenses, representations, promises, or material omissions made or omitted were made or omitted intentionally, knowingly, or with a reckless disregard for the truth." Id. § 76-10-1801(7).

¶31 Under the plain language of section 76-10-1801, there are, at least arguably, two types of intent that may establish communications fraud: intent either (1) "to defraud another or " (2) "to obtain from another money, property, or anything of value by means of" fraudulent statements or omissions. See id. § 76-10-1801(1) (emphasis added); see also State v. Norris , 2007 UT 6, ¶ 17, 152 P.3d 293. Squires insists that the "State's burden of proof is the same whether it is charging a scheme or artifice to defraud or a scheme or artifice to obtain money or property." But this "is to disregard what 'or' customarily means." See Loughrin v. United States , 573 U.S. 351, 357, 134 S.Ct. 2384, 189 L.Ed.2d 411 (2014) ; see also State v. Martinez , 896 P.2d 38, 40 (Utah Ct. App. 1995) (describing "or" as a disjunctive particle that is used to "delineate[ ] alternative ways" a defendant can be criminally liable).

¶32 The State charged Squires under the second variant-Squires hatched a plan with Anderson to use Uncle's property, and Squires executed that plan by means of fraudulent statements and omissions. Importantly, under this variant, the State still has to prove a criminal mens rea. Subsection (7) requires that the "pretenses, representations, promises, or material omissions made or omitted were made or omitted intentionally, knowingly, or with a reckless disregard for the truth." Utah Code Ann. § 76-10-1801(7).

Thus, under the second variant, the statute requires proof that Squires devised a scheme or artifice to obtain money and then lied or omitted necessary information to carry out the scheme or artifice, but it does not necessarily require proof of Squires's specific intent to defraud. Because a plausible plain reading of the statute supports the district court's instruction, trial counsel was not constitutionally deficient in failing to insist on other instructions.

¶33 Second, Utah caselaw. No authoritative case has settled the issue here, namely, whether both variants of communications fraud require that the actor harbor specific intent to defraud. Squires points to three cases that he asserts support requiring an intentional mens rea for communications fraud. Because "the instructions presented to the jury failed to include this essential mens rea for the 'scheme or artifice' element," Squires contends that his trial counsel was ineffective in not objecting to them. None of the cases Squires cites, however, establish that his trial counsel was constitutionally deficient.

¶34 In State v. Stringham (Stringham I ), 957 P.2d 602 (Utah Ct. App. 1998), this court reversed a conviction for communications fraud because the trial court failed to instruct the jury on the applicable mens rea. Id. at 608-09. But in that case, we reversed because the jury instructions failed to give "the mens rea requirement embodied in subsection (7) of the statute." Id. at 608. We rejected the argument that "the jury divined that [the] defendant had to act intentionally because such a level of volition is inherent in the concept of 'devising a scheme.' " Id. at 609 (cleaned up). Yet we required nothing more than what subsection (7) provides. See id. at 608-09. As explained, subsection (7) requires that a defendant's fraudulent statements or omissions be "made or omitted intentionally, knowingly, or with a reckless disregard for the truth." Utah Code Ann. § 76-10-1801(7). And the jury instructions here, as opposed to those in Stringham I , copied subsection (7) nearly word for word.

¶35 Next, in State v. Bradshaw , 2006 UT 87, 152 P.3d 288, the supreme court held that the term "scheme or artifice" is "an established term of art" that "refers to the overall design to defraud one or many by means of a common plan or technique." Id. ¶¶ 11-12 (cleaned up). But even if the court's single reference to a "design to defraud" would lend support to the argument that both variants of communications fraud require specific intent, it does not clearly settle the issue such that trial counsel here was constitutionally deficient in not arguing for a specific-intent instruction.

¶36 Finally, in State v. Bird , 2015 UT 7, 345 P.3d 1141, the supreme court explained that jury instructions "must identify the mens rea implicated by the statutory language, must include a mens rea for all elements, and must distinguish between general and specific intent." Id. ¶ 17. That does not answer, however, whether communications fraud requires specific intent to defraud. Cf. id. ¶ 22. The Bird court confronted a similar problem in determining whether the "attempt to flee or elude" element of a failure-to-respond charge required intent or some lesser mental state. Id. ¶ 23 (cleaned up). It concluded that "an 'attempt to flee or elude' requires an intentional mental state." Id. It reasoned that the "act of fleeing or eluding requires a conscious decision to escape or avoid" and that "one could not recklessly flee from a peace officer." Id. But not so here. Indeed, we agree with the trial court that "it is possible for a person to knowingly or recklessly form, plan, invent, or calculate a scheme or artifice to obtain money, property, etc., from another without having specific intent to defraud." Therefore, Utah's caselaw does not clearly establish that communications fraud requires specific intent to defraud such that Squires's trial counsel was constitutionally deficient in this case.

¶37 Third, federal caselaw. Squires directs us to federal cases in which courts have "interpreted the phrase 'scheme or artifice' to require proof of specific intent." The State points out in rebuttal that the federal law is not settled in its own right. We agree with the State.

¶38 Utah's communications fraud statute is modeled after the federal mail and wire fraud statutes. See Bradshaw , 2006 UT 87, ¶ 11, 152 P.3d 288. Our supreme court has said that federal law may be "instructive ... in our efforts to interpret the Utah statute." Id. ; see also Utah Stream Access Coal. v. Orange St. Dev. , 2017 UT 82, ¶ 21, 416 P.3d 553 (explaining that a legislature's "use of an established legal term of art incorporates the cluster of ideas" surrounding the term (cleaned up)). And some federal courts interpret the phrase "scheme or artifice" in the mail fraud statutes to require specific intent to defraud. See, e.g. , United States v. McNeive , 536 F.2d 1245, 1247 (8th Cir. 1976). But the United States Supreme Court more recently rejected a specific-intent requirement for bank fraud, another statute modeled after the mail fraud statute with strikingly similar language to Utah's communications fraud statute. Loughrin v. United States , 573 U.S. 351, 356-57, 359-60, 134 S.Ct. 2384, 189 L.Ed.2d 411 (2014). There are, of course, differences between the communications fraud statute and the bank fraud statute, just as there are differences between the communications fraud statute and the mail fraud statute. What those differences mean in this case, however, is not clear. Accordingly, Squires's trial counsel was not constitutionally deficient in not unraveling this knot in federal law.

¶39 In sum, given the unclear state of the law, Squires cannot demonstrate that his trial counsel was constitutionally deficient in not objecting to the jury instructions or requesting different ones. See State v. Bruun , 2017 UT App 182, ¶¶ 68, 72-75, 405 P.3d 905.

2. Presently Existing Fact

¶40 Squires also argues that the "instructions failed to advise the jury that a defendant must be reckless about the truth of a 'presently existing fact.' " He exclusively cites civil cases to support the proposition that fraud must relate to presently existing facts. True enough, the civil standard provides that

a misrepresentation of intended future performance is not a representation concerning a "presently existing fact" upon which a claim for fraud can be based unless [the plaintiff] can prove that [the defendant], at the time of the representation, did not intend to perform the promise and made the representation for the purpose of deceiving [the plaintiff].

Republic Group, Inc. v. Won-Door Corp. , 883 P.2d 285, 292 (Utah Ct. App. 1994). We conclude, however, that Squires's trial counsel was not constitutionally deficient in not arguing to import the civil standard for fraud into the jury instructions for criminal fraud.

¶41 As explained, "counsel cannot be faulted for failing to advance a novel legal theory which has never been accepted by the pertinent courts." State v. Edgar , 2017 UT App 53, ¶ 18, 397 P.3d 670 (cleaned up). Here, Squires fails to direct us to a single criminal case adopting the civil standard for fraud. More importantly, in enacting Utah Code section 76-10-1801, the legislature chose various ways in which an individual could commit the second variant of communications fraud. Section 76-10-1801 lists "false or fraudulent pretenses, representations, promises, or material omissions" as ways to perpetrate communications fraud. There is no indication in the statute that the legislature imported the civil standard for fraud requiring a "presently existing fact." Ultimately, we need not and do not decide whether the statute incorporates the civil standard. We note only that it is Squires's burden to demonstrate "why, on the basis of the law in effect at the time of trial , his ... trial counsel's performance was deficient."

State v. Dunn , 850 P.2d 1201, 1228 (Utah 1993) (emphasis added). Without any support in caselaw or the plain language of the statute, Squires has not demonstrated deficient performance here. We therefore reject his challenge to the jury instructions.

B. Hearsay

¶42 Hearsay is an out-of-court statement offered to prove the truth of the matter asserted in the statement and is generally inadmissible at trial. Utah R. Evid. 801(c) ; id. R. 802. Squires contends that his counsel was constitutionally ineffective for not objecting on hearsay grounds to testimony from Uncle about what the hard money lender told him. Uncle testified at trial that the hard money lender called him and said that Squires had not "been communicating with [it]" and that he "spent the money back in May and [had not] been telling the truth." Uncle then testified that after hearing this, he called Squires and related what the lender had said, to which Squires replied it was "just a bunch of lies" and that "people go bankrupt all the time." No objection was made by Squires's trial counsel, and the trial court gave no limiting instruction. Whether or not Uncle's testimony constituted inadmissible hearsay, we conclude that counsel's decision not to object was an exercise of professional judgment that does not amount to deficient performance.

¶43 "When viewing the variety of circumstances faced by defense counsel, a conscious choice not to object to arguably inadmissible testimony may, at times, fall within the range of legitimate decisions regarding how best to represent a criminal defendant." State v. Gray , 2015 UT App 106, ¶ 44, 349 P.3d 806 (cleaned up). Particularly when trial testimony is unanticipated and brief, trial counsel may "reasonably ... believe[ ] it ill-advised to call undue attention" to the testimony. State v. Harper , 2006 UT App 178, ¶ 25, 136 P.3d 1261 ; see also State v. Reid , 2018 UT App 146, ¶¶ 45-47, 427 P.3d 1261 (noting that trial counsel was not deficient in not objecting to hearsay statements when the testimony was "unexpected, brief, and corrected by the prosecutor").

¶44 Here, Uncle's testimony about the hard money lender's out-of-court statement was both unanticipated and brief. The prosecutor asked Uncle an unobjectionable question-"how were you feeling about the loan by September?"-and specifically told Uncle to "stick to what [he] talked to [Squires] about." In response, Uncle explained that he was getting "pretty concerned" about the loan and then, unexpectedly, related what the hard money lender told him on the phone. The prosecutor quickly changed the subject, redirected the conversation to what Squires said, and "never repeated or emphasized" the testimony. See State v. Fahina , 2017 UT App 111, ¶ 30, 400 P.3d 1177 (concluding that hearsay was harmless because it was brief and "never repeated or emphasized"). Given the low risk of prejudice of the statement in the context of Uncle's entire testimony, it was objectively reasonable for Squires's trial counsel to forgo an objection and avoid calling "undue attention" to the statement in isolation. See Reid , 2018 UT App 146, ¶ 47, 427 P.3d 1261 ; Harper , 2006 UT App 178, ¶ 25, 136 P.3d 1261.

¶45 Had the question itself been objectionable-along the lines of, "What did the hard money lenders tell you about Squires?"-the question of deficient performance would be closer. See Landry v. State , 2016 UT App 164, ¶ 27, 380 P.3d 25 ("If clearly inadmissible evidence has no conceivable benefit to a defendant, the failure to object to it on nonfrivolous grounds cannot ordinarily be considered a reasonable trial strategy." (cleaned up)). But the testimony here was elicited by an innocuous question. There was no way to know when the prosecutor asked the question that Uncle would relay what the hard money lender had told him. By the time Uncle made the challenged statement, it was arguably too late for trial counsel to remedy it. Thus, Squires's trial counsel was not constitutionally deficient, because it was a reasonable strategic decision not to highlight Uncle's unexpected and brief testimony. See Reid , 2018 UT App 146, ¶ 47, 427 P.3d 1261 ; Gray , 2015 UT App 106, ¶ 44, 349 P.3d 806 ; Harper , 2006 UT App 178, ¶ 25, 136 P.3d 1261.

II. Utah's Pattern of Unlawful Activity Act

¶46 Utah's Pattern of Unlawful Activity Act (the UPUAA or Act), Utah Code Ann. §§ 76-10-1601 to -1609 (LexisNexis 2017), criminalizes acts involving a "pattern of unlawful activity," which is defined as "conduct which constitutes the commission of at least three episodes of unlawful activity, which episodes are not isolated, but have the same or similar purposes, results, participants, victims, or methods of commission, or otherwise are interrelated by distinguishing characteristics," id. § 76-10-1602(2). The Act targets three types of conduct. First, it prohibits "a principal of a pattern of unlawful activity from using or investing the income derived from the unlawful activities" in an enterprise. State v. Stewart , 2018 UT 24, ¶ 6, 438 P.3d 515 (citing Utah Code section 76-10-1603(1) ). Second, it "penalizes the acquisition or maintenance of an interest in or control of any enterprise that undertakes a pattern of unlawful activity." Id. (citing Utah Code section 76-10-1603(2) ). Finally, the Act "forbids a person from participating in, or conducting, the affairs of an enterprise engaged in a pattern of unlawful acts." Id. (citing Utah Code section 76-10-1603(3) ). Each subsection of section 76-10-1603 thus requires an "enterprise" and a "pattern of unlawful activity." See Utah Code Ann. § 76-10-1603.

¶47 Squires contends that his conviction under the UPUAA should be vacated because the State's evidence was insufficient. He asserts (1) that the State "failed to present any evidence that [Fitz Roy] was an 'enterprise' " and (2) that the "State's allegations of multiple acts of communications fraud ... are insufficient" to establish a pattern of unlawful activity. We first address whether the State provided sufficient evidence of an "enterprise" and then turn to whether Squires's communications with Uncle amounted to a "pattern of unlawful activity."

A. Enterprise

¶48 "Enterprise" is defined by the UPUAA as "any individual, sole proprietorship, partnership, corporation, business trust, association, or other legal entity, and any union or group of individuals associated in fact although not a legal entity, and includes illicit as well as licit entities." Utah Code Ann. § 76-10-1602(1) (LexisNexis 2017). The existence of an "enterprise" is a separate element of a UPUAA violation and must be proved by the State. State v. McGrath , 749 P.2d 631, 636-37 (Utah 1988) ; see also State v. Bell , 770 P.2d 100, 103 n.2 (Utah 1988) ("[P]roof of the existence of an enterprise and its relationship to the racketeering activity is essential for a conviction under [the UPUAA].").

¶49 The State provided ample evidence that Fitz Roy is an "enterprise." See State v. Workman , 2005 UT 66, ¶ 29, 122 P.3d 639 ("We will reverse a jury verdict for insufficient evidence only if we determine that reasonable minds could not have reached the verdict." (cleaned up)). In rejecting Squires's motion for a new trial, the trial court listed some of this evidence. The court observed that (1) the State submitted evidence that Squires was an employee of Fitz Roy; (2) Squires was paid by Anderson; (3) Fitz Roy was an investment company that engaged in construction projects; (4) Fitz Roy was a licensed, legal entity; and (5) Squires wanted to become a partner in Fitz Roy when he told Anderson about Uncle's property. Squires's trial counsel even conceded in closing argument that "Fitz Roy was operating a business, and that could have been an enterprise that was used illegally." These facts, and the inferences to be drawn from them, reasonably support a finding by the jury of an "enterprise." See McGrath , 749 P.2d at 637. Thus, the trial court did not err in denying Squires's post-trial motions on this basis.

B. Pattern of Unlawful Activity

¶50 The UPUAA is modeled after the federal Racketeer Influenced and Corrupt Organizations Act (RICO), and our supreme court has said that the UPUAA's definition of "pattern of unlawful activity" and RICO's definition of "pattern of racketeering activity" "should be interpreted to mean the same thing." Hill v. Estate of Allred , 2009 UT 28, ¶ 38, 216 P.3d 929. Relying on United States Supreme Court precedent interpreting the RICO statute, the court held that a pattern of unlawful activity requires "continuity plus relationship." Id. And "continuity," the court explained, is " 'both a closed- and open-ended concept.' " Id. ¶ 39 (quoting H.J. Inc. v. Northwestern Bell Tel. Co. , 492 U.S. 229, 241, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989) ). A closed period of unlawful activity must extend "over a substantial period of time"; a "few weeks or months" will not do. H.J. Inc. , 492 U.S. at 242, 109 S.Ct. 2893 ; see also State v. Kelson , 2012 UT App 217, ¶ 46, 284 P.3d 695, rev'd on other grounds , 2014 UT 50, 345 P.3d 1136. Open-ended continuity, on the other hand, may span a shorter period of time but must include conduct that "by its nature projects into the future with a threat of repetition." Hill , 2009 UT 28, ¶ 39, 216 P.3d 929 (cleaned up); see also Kelson , 2012 UT App 217, ¶ 48 n.13, 284 P.3d 695 (explaining that the seventy-four drug transactions occurring over a four-month period in State v. McGrath , 749 P.2d 631 (Utah 1988), was the kind of activity that threatened future unlawful conduct).

¶51 Thus, "the proper test for determining whether there was a pattern of unlawful activity is whether there was a series of related predicates extending over a substantial period of time or a demonstrated threat of continuing unlawful activity and not whether there were multiple schemes." Hill , 2009 UT 28, ¶ 41, 216 P.3d 929 (cleaned up). In Kelson , this court applied this test and vacated a conviction for a pattern of unlawful activity based on securities fraud when the defendant's alleged crimes "took place over a matter of days" and did "not threaten future criminal conduct." 2012 UT App 217, ¶ 48 & n.11, 284 P.3d 695 (cleaned up).

¶52 Federal courts interpreting RICO have reached similar conclusions. Indeed, under RICO it "is well established that a single scheme to accomplish one discrete goal, directed at a finite group of individuals, with no potential to extend to other persons or entities, rarely will suffice to establish a threat of continuing racketeering activity." Pagel v. Washington Mutual Bank, Inc. , 153 F. App'x 498, 502 (10th Cir. 2005) ; see also Western Assocs. v. Market Square Assocs. , 235 F.3d 629, 634 (D.C. Cir. 2001) ("If a plaintiff alleges only a single scheme, a single injury, and few victims it is virtually impossible for plaintiffs to state a RICO claim." (cleaned up)); Midwest Grinding Co. v. Spitz , 976 F.2d 1016, 1025 (7th Cir. 1992) (concluding there was not a pattern of racketeering activity when there "was only one victim," "one scheme," and "one type of injury").

¶53 Here, the State cannot establish closed-ended continuity, because Squires's predicate acts of communications fraud extended over a short period of seven to eight months. See H.J. Inc. , 492 U.S. at 242, 109 S.Ct. 2893 ; see also Midwest Grinding , 976 F.2d at 1024 (listing cases in which closed periods of eight months and longer were "considered insubstantial"). Squires first contacted Uncle about the transaction in early 2008, and by September of that year, the transaction had failed.

¶54 Neither can the State establish open-ended continuity, because Squires's communications with Uncle did not "by its nature project[ ] into the future with a threat of repetition." See Hill , 2009 UT 28, ¶ 39, 216 P.3d 929 (cleaned up). Squires's communications were directed at a single victim (Uncle), sought to accomplish a single goal (using Uncle's property to obtain a loan), and inflicted only one type of injury (loss of Uncle's property). There was never any scheme to obtain other property from Uncle or to use Uncle to fund other projects, and Squires's communications with Uncle do not suggest that Uncle would be used for fraudulent funding projects in the future.

¶55 Though the Hill court stated that the inquiry is not whether there are multiple schemes, it emphasized that a pattern of unlawful activity must demonstrate "continuity plus relationship" and sought conformity with federal law. Id. ¶¶ 38-39, 41. Under Hill , a single scheme may suffice to establish a pattern of unlawful activity, but when linked with a short period of time, few victims, and only one type of injury, a pattern of unlawful activity is not demonstrated. See Kelson , 2012 UT App 217, ¶ 48, 284 P.3d 695 ; see also Pagel , 153 F. App'x at 502. Because Squires's communications with Uncle did not amount to a "pattern of unlawful activity" as a matter of law, we conclude that there was insufficient evidence to support the verdict on this count and it was therefore error for the trial court to deny Squires's motion to arrest judgment.

CONCLUSION

¶56 We conclude that Squires's trial counsel was not constitutionally ineffective for not objecting to the jury instructions on communications fraud. Nothing in the plain language of the statute or Utah or federal caselaw so clearly requires a specific-intent instruction in the circumstances present here that Squires's counsel could be deemed constitutionally deficient for not arguing for such an instruction. We also conclude that trial counsel was not deficient in failing to request a "presently existing fact" instruction, because neither the plain language of the communications fraud statute nor controlling Utah caselaw has adopted the civil standard for fraud.

¶57 We next conclude that Squires's trial counsel was not constitutionally ineffective for not objecting to Uncle's testimony about the hard money lender's out-of-court statements. Uncle's testimony was unanticipated and brief, and Squires has not demonstrated that it was unreasonable for trial counsel not to highlight that testimony. Accordingly, we affirm Squires's convictions for communications fraud.

¶58 Finally, we reverse Squires's conviction for a pattern of unlawful activity because the State did not demonstrate that Squires's communications extended over a substantial period of time or threatened future criminal conduct. We therefore remand the case to the trial court with instructions to enter a judgment of acquittal on the pattern of unlawful activity charge.

      "On appeal, we review the record facts in a light most favorable to the jury's verdict and recite the facts accordingly. We present conflicting evidence only as necessary to understand issues raised on appeal." Mackin v. State , 2016 UT 47, ¶ 2 n.1, 387 P.3d 986 (cleaned up).

      Spec houses are "built without preexisting construction contracts in anticipation of eventual sale to the public." Shell v. Schollander Co. , 358 Or. 552, 369 P.3d 1101, 1102 (2016).

      Anderson was also charged with the same counts and pleaded guilty to a third degree felony.

      New counsel represented Squires in his pursuit of post-trial relief. Squires relied on the doctrine of manifest injustice to argue errors in the jury instructions. See Utah R. Crim. P. 19(e).

      Because the statutory provision in effect at the relevant time does not differ in any material way from the provision now in effect, we cite the current version of the Utah Code.

      Squires nominally advances arguments under the plain error and manifest injustice doctrines. The State counters that although Squires introduces these doctrines, he never applies them to his claim, "focusing instead exclusively on ineffective assistance." Squires does not rebut this argument. We therefore examine his claim exclusively through the ineffective assistance of counsel lens.

      Squires's challenge to the jury instructions is viewed through the lens of ineffective assistance of counsel, and thus we need not definitively resolve what the statute actually means. We decide only that because specific intent to defraud is not plainly required to prove the second variant of communications fraud, Squires's trial counsel was not deficient in not insisting otherwise. Cf. State v. Brocksmith , 2018 UT App 76, ¶ 16, 424 P.3d 1122 ("[A] defendant is not deprived of the effective assistance of counsel merely because his attorney does not advance every conceivable non-frivolous argument.").

      This court in State v. Stringham (Stringham II ), 2001 UT App 13, 17 P.3d 1153, mentioned "intent to defraud" in an explanatory parenthetical to a case from the Second Circuit. Id. ¶ 19. Again, this fleeting reference does not establish that communications fraud in both variants requires the specific intent to defraud.

      One sentence in Squires's reply brief hints that trial counsel was not only constitutionally ineffective in not objecting but was also constitutionally ineffective in not requesting a limiting instruction. In every other place in Squires's opening brief and reply brief, the argument is limited to whether trial counsel was deficient in not objecting to the alleged hearsay. "It is well settled that issues raised by an appellant in the reply brief that were not presented in the opening brief are considered waived and will not be considered by the appellate court." Allen v. Friel , 2008 UT 56, ¶ 8, 194 P.3d 903 (cleaned up). We accordingly limit our discussion to the lack of an objection by Squires's trial counsel.

      Squires contends that if "this court is not convinced that individual errors warrant a new trial, this court may aggregate the errors under the cumulative-error analysis and order a new trial." Having discerned no constitutionally deficient performance by Squires's trial counsel, there are no errors to accumulate, and the cumulative error doctrine does not apply. See State v. Beverly , 2018 UT 60, ¶ 80, 435 P.3d 160.


source: Caselaw Access Project

author: HARRIS, Judge:

license: Public Domain

text:
    Kim HAYES and Nancy Hayes, Appellants, v. INTERMOUNTAIN GEOENVIRONMENTAL SERVICES INC., Appellee.
    No. 20180972-CA
    Court of Appeals of Utah.
    Filed June 27, 2019
    Damian C. Smith, Attorney for Appellants
    Anna Nelson, Salt Lake City, Attorney for Appellee
    Judge Ryan M. Harris authored this Opinion, in which Judges Kate Appleby and Diana Hagen concurred.
    Opinion
   HARRIS, Judge:

¶1 A little more than a year after they built their "dream home," Kim and Nancy Hayes (Plaintiffs) began to notice cracks in the house's foundation and walls, and soon learned that the soil beneath the house was unstable. More than a decade earlier, Intermountain GeoEnvironmental Services Inc. (IGES) had, at the request of a developer (Developer), authored a geotechnical report concluding that residential construction could occur on the site provided certain precautions were taken. After learning that their house was built on unstable soil, Plaintiffs filed suit against IGES, asserting various negligence-based tort claims. The district court dismissed those claims, concluding that they were barred by the economic loss rule. Plaintiffs appeal that decision, and we affirm.

BACKGROUND

¶2 In 2004, Developer hired IGES to conduct a geotechnical investigation and prepare a slope stability report for a subdivision it wanted to develop within the city limits of Layton, Utah. Layton City required that such a report be generated prior to construction of any houses on hillside lots. The lot upon which Plaintiffs eventually built their house was within the subdivision in question. After its investigation, IGES determined that construction could occur within the subdivision, provided that certain precautions were taken, ultimately concluding that "slope stability is satisfactory and the site is suitable for the proposed construction in accordance with the recommendations contained in this report."

¶3 Developer sold some of the subdivision lots to a third party, who in turn sold one to Plaintiffs. In 2015, Plaintiffs hired a general contractor (Contractor) to build a house on the lot, and Contractor completed construction that same year. The record on appeal contains little information about who designed the house and drew the architectural plans that governed construction, and does not reveal whether and to what extent that designer (in designing the house) or Contractor (in building it) relied on IGES's conclusions.

¶4 About fourteen months after construction of the house was completed, Plaintiffs observed cracks in its foundation and walls. Plaintiffs then hired a different engineering firm to conduct another geotechnical study of the property. This study noted that the house was "experiencing excessive foundation settling," that "some lateral movement of the foundation elements has been observed," and that the movement was "believed to be the result of instability in the slope immediately below and to the east of the home." The report concluded that "the existing slope at the site fails to meet the minimum factors of safety" and, among other measures, recommended installing additional support for the foundation of the house, which would "likely need to extend at least 65 feet below existing foundation elements." Plaintiffs contacted several contractors to ask them to undertake the work, but none was willing to do so because of liability concerns. Unable to stabilize the structure, Plaintiffs continued to observe widening cracks in the foundation and walls of the house, and eventually concluded that the house was not safe to live in and was unsalable on the real estate market.

¶5 Plaintiffs then filed their lawsuit, suing IGES, Developer, and Contractor. Against IGES, Plaintiffs brought tort claims for negligence, negligent misrepresentation, and negligent infliction of emotional distress (NIED), as well as a breach of contract claim in which Plaintiffs claimed to be third-party beneficiaries of the 2004 contract between IGES and Developer. Plaintiffs sought to recover damages stemming from the damage to their house, the diminution in value of their land, and moving expenses. IGES moved, pursuant to rule 12(b)(6) of the Utah Rules of Civil Procedure, to dismiss all of Plaintiffs' claims against it, arguing that the tort claims were barred under both the statutory and common law version of Utah's economic loss rule, and that Plaintiffs were not third-party beneficiaries of any contract with IGES. The district court granted IGES's motion, concluding that the economic loss rule applied to bar all of Plaintiffs' tort claims, and that Plaintiffs were not third-party beneficiaries of any contract between IGES and Developer.

ISSUE AND STANDARD OF REVIEW

¶6 Plaintiffs now appeal the district court's order, arguing that the court erred when it applied the economic loss rule to dismiss their tort claims. "The decision to grant a motion to dismiss presents a question of law that we review for correctness." Davencourt at Pilgrims Landing Homeowners Ass'n v. Davencourt at Pilgrims Landing, LC , 2009 UT 65, ¶ 12, 221 P.3d 234 (quotation simplified). When reviewing such an order, "we accept the material allegations in the complaint as true and interpret those facts and all reasonable inferences drawn therefrom in a light most favorable to the plaintiff as the non-moving party." Id. (quotation simplified).

ANALYSIS

¶7 As originally articulated, the economic loss rule was solely "a judicially created doctrine" marking "the fundamental boundary between contract law, which protects expectancy interests created through agreement between the parties, and tort law, which protects individuals and their property from physical harm by imposing a duty of reasonable care." SME Indus., Inc. v. Thompson, Ventulett, Stainback & Assocs., Inc. , 2001 UT 54, ¶ 32, 28 P.3d 669. In general, "the economic loss rule prohibits tort claims for purely economic loss." Gables at Sterling Village Homeowners Ass'n, Inc. v. Castlewood-Sterling Village I, LLC , 2018 UT 04, ¶ 47, 417 P.3d 95.

¶8 Although it began as a common-law creation, the economic loss rule now exists in Utah in both statutory and common-law forms. The statutory version of the economic loss rule was enacted in 2008, and applies only to "action[s] for defective design or construction." See Utah Code Ann. § 78B-4-513(1) (LexisNexis 2018). The common-law version of the economic loss rule continues to apply in situations that are beyond the scope of the statute. See, e.g. , KTM Health Care Inc. v. SG Nursing Home, LLC , 2018 UT App 152, ¶¶ 69-79, 436 P.3d 151. (applying the economic loss rule outside the design or construction context). IGES argues that it is protected from Plaintiffs' tort claims under both the statutory and the common-law economic loss rule. We agree with IGES that the statutory economic loss rule bars Plaintiffs' tort claims against IGES, and therefore we need not consider the applicability of the common-law economic loss rule in this case.

¶9 Utah's statutory economic loss rule provides that "an action for defective design or construction is limited to breach of the contract," Utah Code Ann. § 78B-4-513(1), and that, in general, "an action for defective design or construction may be brought only by a person in privity of contract with the original contractor, architect, engineer, or the real estate developer," id. § 78B-4-513(4). The statute contains an exception, however, for "damage to other property." Id. § 78B-4-513(2). IGES contends that Plaintiffs' tort claims against it constitute "action[s] for defective design or construction," and are therefore barred by the statutory economic loss rule. Plaintiffs resist this characterization, and in addition assert that the "other property" exception applies in any event. We conclude that Plaintiffs' tort claims constitute actions for defective design and construction, as that term is used in the statute, and that the "other property" exception does not apply.

A

¶10 The first question presented is whether and to what extent Plaintiffs' tort claims constitute "an action for defective design or construction" as that term is used in the statutory codification of the economic loss rule. See id. § 78B-4-513(1). Under the statute, such actions are "limited to breach of the contract," and therefore cannot be brought in tort. Id. Thus, to the extent Plaintiffs' tort claims constitute an action for defective design or construction, those claims are barred.

¶11 The question presented is one of statutory interpretation. "When interpreting a statute, our objective is to give effect to the intent of the legislature in light of the purpose the act was meant to achieve." State v. Hunt , 2018 UT App 222, ¶ 17, 438 P.3d 1 (quotation simplified). "Because the best evidence of the legislature's intent is the plain language of the statute itself, we look first to the plain language of the statute." GeoMetWatch Corp. v. Utah State Univ. Research Found. , 2018 UT 50, ¶ 15, 428 P.3d 1064 (quotation simplified). Sometimes, "the statutory text may not be 'plain' when read in isolation," but it "may become so in light of its linguistic, structural, and statutory context." Olsen v. Eagle Mountain City , 2011 UT 10, ¶ 9, 248 P.3d 465.

¶12 As an initial matter, we think it plain that the tort claims Plaintiffs filed against IGES constitute "an action." In this context, the word "action" means "[a] civil or criminal judicial proceeding." See Action , Black's Law Dictionary (10th ed. 2014); see also id. Action at Law (defining "action at law" as "[a] civil suit stating a legal cause of action and seeking only a legal remedy"); cf. Utah Code Ann. § 78B-2-101(1) (defining "action" in a statute-of-limitations context as including "counterclaims and cross-complaints and all other civil actions in which affirmative relief is sought"); id. § 78B-6-202(6) (defining "civil action" in an alternative-dispute-resolution context as "an action in which a party seeks monetary or equitable relief at common law or pursuant to statute"). By filing tort claims against IGES, Plaintiffs commenced an "action"

against it, as that word is used in the statute.

¶13 The more interesting part of the inquiry-and the one upon which the parties spend their energies-is whether the "action" Plaintiffs filed against IGES is one "for defective design or construction." IGES asserts that it is, and points out that the gravamen of Plaintiffs' claim is that their "dream home" was built on unstable soil and has been rendered uninhabitable as a result of settling and cracking, and that, at root, such claims depend on Plaintiffs' ability to demonstrate that their house was poorly designed or constructed. Plaintiffs, by contrast, contend that their tort claims against IGES are not for defective design or construction, and point out that IGES's 2004 report was issued before any relevant structure-including their house-was designed or constructed. Specifically, Plaintiffs assert that IGES's report "was a professional opinion on a state of facts concerning a lot later purchased by Plaintiffs," and argue that "IGES is being sued because its opinion about the stability of the slope was wrong, not because it improperly designed a structure."

¶14 We find meaningful the statute's use of the word "for," and see its use as a signal that-in order to determine if an action is truly one seeking redress in connection with defective design or construction-we should pay close attention to the claimed cause of the specific damages sought in the action. The statute asks us to consider what the "action" is being brought "for." That is, the legal label placed on each cause of action is less important, in this context, than the underlying factual scenario giving rise to the general grievance being lodged. Thus, to answer the question presented, we must examine the relief sought by Plaintiffs against IGES, as well as Plaintiffs' basic underlying theory of causation.

¶15 Our examination of Plaintiffs' complaint reveals that they are seeking only monetary relief from IGES, and that the damages they seek fall into four categories. First, Plaintiffs identify a category of damages "measured by actual physical damage-and eventual total destruction-of" their house. Second, Plaintiffs identify a category of damages related to having to move out of the damaged house, including "costs involved in finding replacement housing [and] storage expenses." Third, as part of their NIED claim, Plaintiffs seek damages for emotional distress associated with the "actual physical peril" of being in the "zone of danger" created by occupying a house they deem unsafe. Finally, Plaintiffs seek damages related to harm to their lot, pointing out that the land itself "is undergoing continuing sliding and destruction such that it is totally unsuitable for residential construction."

¶16 The first three of Plaintiffs' four categories of claimed damages clearly are aimed at seeking redress "for defective design or construction." Under Plaintiffs' own version of events, IGES's allegedly faulty slope stability recommendations led to Plaintiffs purchasing the lot, then constructing a house upon it, then to the house settling and cracking, and then to emotional distress and moving expenses. Indeed, the entire point of commissioning a geotechnical report in this case was to determine whether houses could safely be built in the proposed subdivision and, if so, what sort of foundation and support those houses would need. Even Plaintiffs' chosen geotechnical engineer, whose report is attached to their complaint, acknowledges that houses can be safely constructed on the property, as long as their foundations are bolstered by supports extending at least sixty-five feet below the surface. Buildings must be designed and constructed to fit the land upon which they are built, and when a house is built to specifications that are inappropriate for the site, that is ultimately a design and construction issue. A common-sense understanding of Plaintiffs' action is that they claim to have suffered damages arising from something that went wrong-a defect-in the design and construction of their house. Even if the architect or the builder did not cause this defect, it is nonetheless a defect in the design and construction of the house, and the action is one "for defective design or construction."

¶17 A closer look at the language and context of the statutory economic loss rule reinforces this common-sense approach. Plaintiffs resist the application of the statute to their case by arguing that IGES "did not act as a 'design professional' in this case" and that the report was not "design work," but rather, was "a professional opinion about an existing state or condition." But Plaintiffs' argument does not match the statute's language or context.

¶18 Geotechnical engineering recommendations are an important first step in the design and construction process. See, e.g. , American Bar Ass'n, The Construction Project § 2.III.D Geotechnical Engineer (Marilyn Klinger & Marianne Susong eds., 2006) ("A geotechnical engineer is often an essential participant on the design team. ... [T]he geotechnical engineer ... provides recommendations for the design of the proposed structure's foundation and structural system. This information ... is typically one of the starting points for the structural engineer."); Shannon J. Briglia & Michael C. Loulakis, Geotechnical Risk Allocation on Design-Build Construction Projects , J. Am. C. Constr. Law., at 4, Sept. 2017 ("[G]eotechnical engineers are retained by or on behalf of the owner to ascertain site conditions, which information the design team uses to develop its plans and specifications."); see also Terracon Consultants W. Inc. v. Mandalay Resort Group , 125 Nev. 66, 206 P.3d 81, 89 (2009) (en banc) (considering geotechnical engineers to be design professionals for the purposes of the economic loss rule). Given these realities, geotechnical engineers are considered "design professionals" as that term is defined in another analogous section of the Utah Code. See Utah Code Ann. § 13-8-2(1)(c) (LexisNexis 2013) (defining "design professional" as "an architect, engineer , or land surveyor," including "any other person who, for a fee or other compensation, performs services similar to the services of an architect, engineer , or land surveyor in connection with the development of land" (emphasis added)). Although the statutory economic loss rule does not use the term "design professional," it certainly uses the word "design," see Utah Code Ann. § 78B-4-513(1) (2018), and in determining what the legislature meant through its use of that term, it is helpful to examine how it has defined similar terms in analogous contexts, see, e.g. , Wasatch Crest Ins. Co. v. LWP Claims Adm'rs Corp. , 2007 UT 32, ¶¶ 13-14, 158 P.3d 548 (looking to other sections of the Utah Code for guidance in defining the relevant term where the term was not defined in the statute at issue); Territorial Sav. & Loan Ass'n v. Baird , 781 P.2d 452, 461 (Utah 1989) (same). By including engineers within the definition of "design professional" elsewhere in the Utah Code, the legislature appears to have recognized the reality that engineers are often integral members of a building's design team.

¶19 Accordingly, the bulk of Plaintiffs' lawsuit against IGES can comfortably be categorized as "an action for defective design or construction." A lawsuit that seeks recovery from a design professional-including a geotechnical engineer-for the diminution in value of (or costs to repair) a structure that has settled or sustained damage as a result of subsidence will nearly always be properly categorized as a lawsuit seeking recovery for defective design or construction. Therefore, to the extent Plaintiffs seek damages related to the structure itself-including claims for diminution in its value, repair costs, moving expenses incurred for having to leave the structure, or emotional distress related to living in it-their claims constitute actions for defective design or construction, and are covered by Utah Code section 78B-4-513(1).

¶20 Plaintiffs' fourth category of damages-a claim for damage to the lot-presents a closer question. With regard to this category of damages, Plaintiffs' claims do not directly implicate any actual structure; instead, Plaintiffs seek recovery of damages to the land itself. Although it is not entirely clear, at this stage of the proceedings, what this claim is designed to encompass-after all, IGES did not create whatever slope stability issues might inhere in Plaintiffs' lot-Plaintiffs appear to be asserting that the value of their lot has diminished now that it is known that construction on the property will be problematic. Though Plaintiffs do not phrase it in exactly this way, they appear to be claiming that, when they purchased their lot, they did so in reliance on IGES's recommendations, and paid a price for the lot commensurate with it being readily buildable, and that the lot is no longer worth what they paid for it because of the slope stability issues that have since come to light.

¶21 Ultimately, however, we view this portion of the claim as one for defective design or construction also. As noted, IGES was originally hired to provide recommendations regarding what kind of structures could be built on the property. That is, its recommendations were to be used principally as guidance for designers and builders of structures. This is not a case in which IGES's recommendations were to be used for, say, determining whether mining or grazing operations could usefully be conducted on the property. IGES's recommendations were always about buildability , which is ultimately a design and construction issue. Indeed, if we are construing Plaintiffs' claim correctly, the purported diminution in value of Plaintiffs' lot has to do with whether, and to what extent, the lot is buildable-that is, whether a prospective purchaser will be able to build a house on that lot and, if so, what kind of additional foundation requirements must be included in the structure's design in order to make construction feasible.

¶22 In the end, we conclude that each category of damages Plaintiffs seek from IGES is related to allegations of defective design or construction. Accordingly, Plaintiffs' tort claims constitute an "action for defective design or construction," and are therefore within the purview of Utah Code section 78B-4-513(1), which-subject to two exceptions, see Utah Code Ann. § 78B-4-513(2), one of which is discussed below-requires such claims to be brought, if at all, as contract claims.

B

¶23 The statutory economic loss rule provides an exception for claims seeking redress for "damage to other property," even if that damage is caused by "defective design or construction." See id. § 78B-4-513(2). Plaintiffs assert that this exception applies here, at least to their claims for damage to the house (as opposed to damage to the lot), which they attempt to characterize as "other property." We disagree.

¶24 Although the statutory codification of the economic loss rule does not provide a complete definition of the phrase "other property," it does provide helpful guidance as to the term's reach, specifying that the "other property" exception set forth in subsection (2) of the statute cannot apply to "the failure of construction to function as designed," or to the "diminution of the value of the constructed property because of the defective design or construction." Id. § 78B-4-513(3). This language directly forecloses Plaintiffs' argument that the house constitutes "other property" not subject to the economic loss rule.

¶25 Moreover, the "other property" exception is also part of the common-law economic loss rule, and was incorporated into the codification of the statutory economic loss rule. See, e.g. , Davencourt at Pilgrims Landing Homeowners Ass'n v. Davencourt at Pilgrims Landing, LC , 2009 UT 65, ¶ 25, 221 P.3d 234 (discussing the "other property"

exception in the context of the common-law economic loss rule). Because the legislature, in codifying the economic loss rule, drew the term from the common law, we find it helpful to examine how courts employ that term in common law cases. In Davencourt , our supreme court held that individual components of the product bargained for cannot constitute "other property." Id. (holding that the condominiums at issue were purchased as a "finished product," and therefore the "individual components"-including the roof, the foundation, and the siding-were not "other property"); see also American Towers Owners Ass'n v. CCI Mech., Inc. , 930 P.2d 1182, 1191 (Utah 1996) (holding that "walls, wall coverings, carpeting, wall hangings, curtains, and other furnishings" were not "other property" because "the 'property' was the entire complex itself that was constructed as an integrated unit under one general contract"), abrogated on other grounds by Davencourt at Pilgrims Landing Homeowners Ass'n , 2009 UT 65, 221 P.3d 234.

¶26 Plaintiffs argue that, because they purchased the land and contracted for the building of the house in two separate transactions, the house constitutes "a separate property," distinct from the land, and should fall under the "other property" exception. Plaintiffs assert that IGES's recommendations applied "only to a plot of land," and reason that their house was a "separate improvement, apart from the land, that was separately bargained for and purchased." (Quotation simplified.) Plaintiffs compare their situation to one "where a defectively designed building collapses and destroys a building built on adjacent property."

¶27 But IGES's recommendations did not apply only to a plot of land, as Plaintiffs contend. The report was obtained by a developer to assess the suitability of that land for construction of houses. As discussed above, the entire point of the report was to provide input regarding the type of support any structures built on that land would need. Contrary to Plaintiffs' assertions, the condition of the land is inextricably bound to the construction of the house. For instance, Plaintiffs' house presumably could have been built-exactly as it was-and placed on a more stable piece of land without incident; likewise, even according to Plaintiffs' expert, the land could have supported a house built with a different foundation. The alleged defect in this case lies at the intersection of the house and the land; neither is defective without the other. Even though Plaintiffs purchased the lot before they contracted for the construction of the house, the house and the land upon which it is built constitute an inseparable "integrated unit" for all intents and purposes.

¶28 Accordingly, we conclude that the "other property" exception built into the statutory economic loss rule is inapplicable here.

CONCLUSION

¶29 By filing tort claims against IGES for faulty soils recommendations, Plaintiffs are attempting to blame IGES for damage to their house, moving expenses, and emotional distress, as well as diminution in value of their land. Given their nature, these are actions "for defective design or construction," as that term is used in the statutory version of the economic loss rule. Utah Code Ann. § 78B-4-513. Moreover, these are not claims for damage to "other property." As a result, Plaintiffs' tort claims against IGES are barred by the statutory economic loss rule.

¶30 Even though Plaintiffs may not bring tort claims against IGES, parties in Plaintiffs' shoes typically are not without a remedy. The economic loss rule, as applied in the construction context, envisions a chain of contractual relationships, and generally requires that parties in such situations bring claims against the entities with whom they are in privity of contract. In Plaintiffs' case, that could have been the contractor who built their house, or the architect who designed it, or any other person or entity with whom they have a direct contractual relationship. There are also limited opportunities to bring other claims in these situations, including claims for breach of the warranty of habitability. See Davencourt at Pilgrims Landing Homeowners Ass'n v. Davencourt at Pilgrims Landing, LC , 2009 UT 65, ¶¶ 49-63, 221 P.3d 234. Indeed, Plaintiffs brought some such claims in this case against Contractor and Developer. In this case, Plaintiffs are disappointed that Contractor apparently does not possess valid insurance coverage, a circumstance that is extremely unfortunate for Plaintiffs but-even if true-is not grounds for us to ignore the strictures of the economic loss rule, which bars the claims at issue in this appeal. See Wasatch County v. Tax Comm'n , 2009 UT App 221, ¶ 5 n.3, 217 P.3d 270 ("It is not within our province to read something into the statute not found there, nor to carve out exceptions to meet hard cases." (quotation simplified)).

¶31 Affirmed.

      Because this case comes to us on appeal from an order granting a motion to dismiss, we recite the facts as alleged in Plaintiffs' complaint, and we assume their truth for the purposes of our analysis. See Torgerson v. Talbot , 2017 UT App 231, ¶ 7, 414 P.3d 504 ("In reviewing a district court's grant of a motion to dismiss for failure to state a claim upon which relief can be granted, we accept all facts alleged as true, and indulge all reasonable inferences in favor of the non-moving party." (quotation simplified)).

      The record contains a copy of the building permit for Plaintiffs' house, and that document lists a firm under the heading "Architect or Engineer," but this is the only mention of that firm or its involvement in the project. Plaintiffs did not include that firm in their complaint, and do not mention the firm in their briefs on appeal.

      Plaintiffs sued Developer for negligence and negligent misrepresentation. Plaintiffs sued Contractor for breach of the implied warranty of habitability. Plaintiffs' claims against Developer and Contractor are not at issue in this appeal.

      Because this ruling only disposed of Plaintiffs' claims against IGES, and did not contain any rulings regarding Plaintiffs' claims against the other defendants, the ruling did not dispose of all matters between all litigants in the action below, and therefore was not "a final order or judgment that ends the controversy between the litigants." See Copper Hills Custom Homes, LLC v. Countrywide Bank, FSB , 2018 UT 56, ¶ 10, 428 P.3d 1133 (quotation simplified). Accordingly, the ruling was not immediately appealable. See id. Plaintiffs attempted to obtain certification for appeal pursuant to rule 54(b) of the Utah Rules of Civil Procedure, but did so improperly, and on this basis we dismissed Plaintiffs' first appeal on jurisdictional grounds. See Hayes v. Intermountain GeoEnvtl. Services, Inc. , 2018 UT App 223, ¶¶ 4-5, 437 P.3d 650. Thereafter, Plaintiffs dismissed without prejudice their claims against the other defendants, thereby taking care of the final issues in the case at the district court level, and filed a new notice of appeal.

      Plaintiffs do not appeal the district court's dismissal of their contract-based claim against IGES, or the district court's subsidiary determination that they were not third-party beneficiaries of any contract between IGES and Developer.

      While a few cases issued after the passage of Utah Code section 78B-4-513 have addressed the economic loss rule in the construction context, see, e.g. , Reighard v. Yates , 2012 UT 45, 285 P.3d 1168 ; Davencourt at Pilgrims Landing Homeowners Ass'n v. Davencourt at Pilgrims Landing, LC , 2009 UT 65, 221 P.3d 234, the disputes giving rise to those cases arose before enactment of the statute, and therefore the opinions in those cases relied largely on the common law and did not directly interpret the statute.

      As discussed at oral argument, the architect hired to design a building sometimes subcontracts with a geotechnical engineer for the express purpose of obtaining advice for the design of the building's foundation. In such scenarios, the geotechnical engineer may work closely with the architect and may well be directly involved in the actual design of the building. But-assuming the architect actually relies upon the geotechnical engineer's recommendations-we see no principled reason to treat a geotechnical engineer who completed his or her work months before the building was designed any differently than an engineer who works closely with the architect on a specific set of plans and specifications. In each situation, the engineer's recommendations are an important part of the building's design, and any action against the engineer for damage to the building alleged to be caused by the engineer's faulty recommendations would constitute an action for defective design or construction.

      We do not mean to suggest that every case involving building subsidence is automatically "an action for defective design or construction." For example, if the building is settling because the adjoining landowner dug a tunnel under it, and the plaintiff is pointing the finger at the neighbor rather than at an architect, contractor, or geotechnical engineer, the case would arguably not be so categorized. But we are hard-pressed to imagine a building-subsidence case in which the plaintiff is pointing the finger at a contractor or design professional that would not be "an action for defective design or construction."


author: MORTENSEN, Judge:

text:
    Jay Mervin THOMPSON, Lori G. Thompson, and Cindy Thompson, Appellees, v. Micah CAPENER and Shaylee Capener, Appellants.
    No. 20180333-CA
    Court of Appeals of Utah.
    Filed July 11, 2019
    Bradley H. Bearnson, Aaron K. Bergman, and Wayman M. Stodart, Logan, Attorneys for Appellants
    Brad C. Smith and Elizabeth A. Knudson, Ogden, Attorneys for Appellees
    Judge David N. Mortensen authored this Opinion, in which Judges Jill M. Pohlman and Ryan M. Harris concurred.
    Opinion
   MORTENSEN, Judge:

¶1 Micah and Shaylee Capener own certain real property (Lots 1A and 1B) in Tremonton, Utah, which is part of the Garfield Estates Subdivision-Phase 1 (Subdivision). Jay, Lori, and Cindy Thompson, also property owners who reside in the Subdivision, brought this breach of contract action to enforce against the Capeners certain protective covenants (Covenants) encumbering the Subdivision. The Capeners filed a motion for summary judgment, asserting a statute of frauds defense that the Covenants are not enforceable against Lots 1A and 1B because they were not signed by one of the then owners of Lot 1-the larger parcel that was subsequently subdivided into Lots 1A and 1B. The district court denied the Capeners' motion, concluding that the Covenants are enforceable against Lots 1A and 1B because the statute of frauds was satisfied by other writings or alternatively because the previous owner had ratified the Covenants. We reverse.

BACKGROUND

¶2 The Subdivision contains seven lots, one of which was Lot 1. In May 2005, June C. Garfield (June) conveyed Lot 1 to Bradley H. Garfield (Brad). Brad then conveyed Lot 1 to himself and Susan Garfield (Susan) as joint tenants. In June 2006, the Covenants-which purported to encumber all seven lots in the Subdivision-were signed by June and Brad, but not by Susan. The Covenants were recorded on June 12, 2006. At no time did Susan sign the Covenants.

¶3 In April 2014, Micah Capener entered into a real estate purchase contract with Brad and Susan to purchase Lot 1. Lot 1 was then further subdivided creating separate lots designated 1A and 1B. An amended plat evidencing the subdivision was signed by Brad and Susan and recorded on July 2, 2014 (Amended Plat). On July 23, 2014, Brad and Susan executed warranty deeds conveying Lots 1A and 1B to Micah Capener (Warranty Deeds). The Warranty Deeds stated that the conveyance was made "[s]ubject to easements, restrictions, and rights of way appearing of record and enforceable in law" (Habendum Clause). Capener thereafter conveyed Lots 1A and 1B to himself and Shaylee Capener as co-trustees of their revocable living trust.

¶4 On May 2, 2017, the Thompsons filed this action for breach of contract, alleging that the Covenants were enforceable against Lots 1A and 1B and that the Capeners had violated the Covenants. The Capeners filed a motion for summary judgment, asserting that the Covenants were unenforceable against Lots 1A and 1B because Susan had never signed them.

¶5 The district court denied the Capeners' motion for summary judgment and ruled that the Covenants were enforceable against Lots 1A and 1B. The court concluded that "[w]here the ... [Warranty Deeds] and [Amended Plat] all impliedly reference the ... Covenants, and the two deeds executed by [Brad and Susan] contain both their signatures, it is clear there is a nexus and it was [Brad and Susan's] intention that Lots 1A and 1B would be subject to the Covenants." Alternatively, the court concluded that in signing the Amended Plat and Warranty Deeds, Susan ratified Brad's actions in creating the Covenants because "there is every indication [she] was aware of the ... Covenants ... [and] could have provided that she did not wish the [S]ubdivision, let alone Lots 1A and 1B, to be subject to" the Covenants. The district court went on to state that based on "subsequent writings bearing both [Brad's and Susan's] signatures ... [Susan] clearly ratified [Brad's] actions in creating" the Covenants.

¶6 The Capeners petitioned for interlocutory appeal from the denial of their motion for summary judgment. We granted the petition.

ISSUE AND STANDARD OF REVIEW

¶7 The Capeners contend that the district court denied their motion for summary judgment in error because the statute of frauds was not satisfied and that the Covenants are therefore unenforceable against Lots 1A and 1B as a matter of law. "Summary judgment is only appropriate if the moving party shows that there is no genuine dispute as to any material fact and the moving party is entitled to judgment as a matter of law." Arnold v. Grigsby , 2018 UT 14, ¶ 8, 417 P.3d 606 (cleaned up). "An appellate court reviews a trial court's legal conclusions and ultimate grant or denial of summary judgment for correctness." Id. (cleaned up). And "the applicability of the statute of frauds is a question of law to be reviewed for correctness." Bennett v. Huish , 2007 UT App 19, ¶ 25, 155 P.3d 917 (cleaned up).

ANALYSIS

¶8 It is undisputed in this case that Susan did not sign the Covenants. Likewise, neither party disputes that this fact, taken alone, would render the Covenants unenforceable against Lots 1A and 1B under Utah's statute of frauds. See Utah Code Ann. § 25-5-1 (LexisNexis 2013) ; Flying Diamond Oil Corp. v. Newton Sheep Co. , 776 P.2d 618, 629 (Utah 1989). What is squarely in dispute, however, is whether other writings-specifically the Warranty Deeds and the Amended Plat-signed by Susan satisfied the statute of frauds or otherwise indicated that she ratified the Covenants. We discuss the statute of frauds and ratification in turn.

I. Statute of Frauds

¶9 "Because covenants that run with the land must be based on some interest in land, the statute of frauds must be satisfied." Flying Diamond Oil Corp. v. Newton Sheep Co. , 776 P.2d 618, 629 (Utah 1989) ; see also Utah Code Ann. § 25-5-1 (LexisNexis 2013). The statute of frauds requires a written memorandum of an agreement relating to real property that is executed by all the joint owners of the property. See Flying Diamond , 776 P.2d at 629. Utah courts have also held that "one or more writings, not all of which are signed by the party to be charged, may be considered together as a memorandum if there is a nexus between them." Reynolds v. Bickel , 2013 UT 32, ¶ 17, 307 P.3d 570 (cleaned up). A nexus "is indicated by express reference in the signed writing to the unsigned one, or by implied reference gleaned from the contents of the writings and the circumstances surrounding the transaction." Id. ¶ 18 (cleaned up). A nexus under the latter instance exists if

all the writings adduced, viewed together in light of the situation and circumstances of the parties at the time they were written, show unmistakably that they relate to the same matter, and constitute several parts of one connected transaction, so that the mind can come to no other reasonable conclusion from the evidence so offered than that they were each written with reference to those concurrent or preceding.

Gregerson v. Jensen , 617 P.2d 369, 373 n.6 (Utah 1980) (cleaned up).

¶10 The facts in Gregerson illustrate when multiple writings can be construed together to satisfy the statute of frauds. In Gregerson , the plaintiff orally agreed to purchase real property from the defendant for $700. Id. at 370. The plaintiff thereafter delivered a signed check for half of the purchase price that contained the notation "1/2 payment on land as agreed-other 1/2 payment when deed delivered." Id. at 373 (cleaned up). A deed was prepared listing the plaintiff as grantee and the defendant as grantor, but that deed was never signed by either party. Id. at 371-72. The district court later dismissed the plaintiff's case for specific performance on the sale of the land because the deed was unsigned and therefore did not comply with the statute of frauds. Id. at 372. Our supreme court disagreed, concluding that "while not referring expressly to a specific deed, the notation on the check evidences the expectations of the parties that a deed would be involved in the transaction." Id. at 373. The deed also expressly listed the parties to the transaction and the description of the subject property. Id. Accordingly, the court determined that "the two writings evidence a single transaction and should be read together as fulfilling the requirements of the Statute of Frauds." Id.

¶11 Here, the parties do not dispute that neither the Amended Plat nor the Warranty Deeds contains an express reference to the Covenants. Accordingly, for the Amended Plat and/or Warranty Deeds to have a nexus with the Covenants sufficient to satisfy the statute of frauds, they must "unmistakably ... relate to the [Covenants], and constitute several parts of one connected transaction, so that the mind can come to no other reasonable conclusion" but that Susan intended to be a party to and execute the Covenants. See id. at 373 n.6 (cleaned up). We conclude that no such nexus exists here.

¶12 First, we disagree with the district court's conclusion that the Amended Plat "recognizes" the Covenants. While the Amended Plat contains references to a "private road access easement" and public utility easements, there is simply no mention of covenants, much less the specific Covenants at issue here. The Amended Plat was also signed approximately eight years after the Covenants were signed and recorded. Thus, the Amended Plat evidences a different transaction, the subdivision of Lot 1. We therefore conclude that the Amended Plat lacks a sufficient nexus with the Covenants to satisfy the statute of frauds.

¶13 Second, the Warranty Deeds also lack a sufficient connection to the creation of the Covenants. See id. (stating that "writings adduced ... [must] show unmistakably that they relate to the same matter, and constitute several parts of one connected transaction" (emphasis added) (cleaned up)). The Thompsons, on appeal, presented extensive briefing and oral argument concerning whether the Warranty Deeds impliedly reference the Covenants vis-à-vis the word "restrictions" found in the Habendum Clause. This argument, however, does nothing to show that the Warranty Deeds and Covenants "constitute several parts of one connected transaction." See id . (cleaned up). Moreover, in this case, the Habendum Clause does not cause the mind to come to no other conclusion but that Susan intended the Covenants to be enforceable against Lots 1A and 1B. The Habendum Clause is boilerplate language that could mean many different things, and similar language is likely found in most warranty deeds. Accordingly, this vague reference to "restrictions" in the Habendum Clause does not create a nexus sufficient to satisfy the statute of frauds. Like the Amended Plat, the Warranty Deeds were signed eight years after the Covenants and evidence a discrete transaction that is wholly unrelated to the creation of the Covenants: the conveyance of Lots 1A and 1B from Brad and Susan to Micah Capener. Therefore, we conclude that, despite the reference to "restrictions," the Warranty Deeds do not constitute separate writings connected to a single transaction that satisfy the statute of frauds.

¶14 Third, the district court's statute of frauds analysis was flawed because it relied on circumstances surrounding other transactions that were unrelated to the creation of the Covenants. In its ruling, the court correctly stated that it "can look at all the circumstances surrounding the creation of" the Covenants. The analysis that followed, however, related to the circumstances surrounding the creation of the Amended Plat, the Warranty Deeds, and the Capeners' conveyance of Lots 1A and 1B to themselves as co-trustees. Not only did these events occur over eight years after the creation of the Covenants, but these events were separate transactions that did not constitute "writings [that] evidence a single transaction and should be read together as fulfilling the requirements of the Statute of Frauds." Id. at 373.

¶15 The standard under Gregerson requires that the writings and circumstances taken together "unmistakably" show they are related to a single transaction so that "no other reasonable conclusion" from the evidence can be made. Even giving every reasonable inference to the Thompsons, the facts before the district court fail to meet this standard. We therefore conclude that summary judgment on this issue was denied in error.

II. Ratification

¶16 Ratification on these facts similarly fails as a matter of law. "A principal may impliedly or expressly ratify an agreement made by an unauthorized agent." Bradshaw v. McBride , 649 P.2d 74, 78 (Utah 1982). However, "ratification requires the principal to have knowledge of all material facts and an intent to ratify." Id. Here, the district court erred by relying on the Amended Plat and Warranty Deeds to determine that Susan had "knowledge of all material facts and an intent to ratify." See id. As discussed above, supra ¶¶ 12-14, these documents are wholly unrelated to the creation of the Covenants, do not make reference to the Covenants, and do not contain any material facts about the Covenants. Further, even if the Amended Plat and Warranty Deeds did make Susan aware of the Covenants generally-a fact not apparent in this record-that fact still falls short of showing that Susan intended to ratify Brad's signing the Covenants on her behalf.

¶17 Similarly, the district court erred in concluding that Susan ratified by silence when she did nothing to disaffirm the Covenants. Although "[u]nder some circumstances failure to disaffirm may constitute ratification of the agent's acts," Bradshaw , 649 P.2d at 78, "the same kind of authorization that is required to clothe an agent initially with authority to contract must be given by the principal to constitute a ratification of an unauthorized act," id. at 79. In other words, "[w]here the law requires the authority to be given in writing, the ratification must also generally be in writing." Id. Accordingly, where the Covenants are subject to the statute of frauds, Susan could not, as a matter of law, ratify the Covenants by silence.

¶18 Finally, the factual statements of the parties do not otherwise support any inference of Susan's intent to ratify. The only reference to Susan found in any of the statements of fact note that her signature merely appears on the Warranty Deeds and Amended Plat referenced above. There are no other facts showing Susan's awareness of the Covenants, nor are any facts indicative of any circumstances where Susan acknowledged the existence of, or remained silent concerning, the Covenants under circumstances where one in her position would be expected to respond. Accordingly, we cannot agree that the parties' statements of fact indicate any awareness by Susan of the Covenants or her intentions regarding their applicability to Lot 1, which became Lots 1A and 1B.

¶19 Where neither Susan's silence nor the other writings support any inference that Susan (1) had knowledge of all material facts relating to the Covenants, (2) intended to ratify the Covenants, or (3) ratified, in writing, Brad's act of executing the Covenants on her behalf, we conclude that Brad's signing of the Covenants was not ratified by Susan and therefore summary judgment was erroneously denied on that ground.

CONCLUSION

¶20 We conclude that the other writings offered in this case do not have a nexus with the creation of the Covenants sufficient to satisfy the statute of frauds. We further conclude that the facts and arguments presented on summary judgment below lack a sufficient basis to show that Brad's signing of the Covenants was ratified by Susan. Therefore, summary judgment in this case was denied in error, and we reverse and remand for further proceedings consistent with this opinion.

      Because this is an appeal from summary judgment, "we view the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party and recite the facts accordingly." Ockey v. Club Jam , 2014 UT App 126, ¶ 2 n.2, 328 P.3d 880 (cleaned up).

      As is our practice, when relevant persons share a last name, we sometimes refer to them by their first names with no disrespect intended by the apparent informality.

      Although not clear in the record, at oral argument both sides acknowledged that the claimed violations were, at least in part, related to the Capeners' desire to keep certain livestock on Lots 1A and 1B.

      The Thompsons urge us to affirm on the ground that the Capeners waived the statute of frauds defense. Early in the case, the Thompsons filed a motion for a temporary restraining order (TRO) alleging that "[e]very lot in [the Subdivision] is subject to" the Covenants. The Capeners, in their opposition, admitted this allegation, but "solely for the purpose of th[at] motion." The Thompsons now argue that this admission constitutes a categorical waiver of the statute of frauds defense. We disagree. To be sure, we recognize that if a party concedes or fails to dispute facts in a number of circumstances, waiver can be found. But this is not one of those circumstances. The Capeners expressly qualified that their admission was solely for the purpose of the Thompsons' TRO motion. Not only do we decline to establish precedent that would discourage parties from making admissions for the limited purpose of a given motion, but we encourage litigants to do so when reasonable. If a party determines that a fact is immaterial or would muddy the water in any given motion, we see no harm in conditionally admitting that fact to promote efficiency in resolving that particular motion. And a party should not be punished for doing so.

      The Thompsons also ask us to affirm on grounds that the facts and circumstances in this case establish an equitable servitude. The district court did not make any ruling under this theory, and factual issues remain as to whether an equitable servitude exists. Therefore this issue remains outstanding and should be addressed by the district court in the first instance on remand.