Bonner County v. Western Insurance Company
Bonner County v. Western Insurance Company, 2022 UT 38 (Pearce, A.C.J.)
Bonner County submitted claims for several surety bonds to Western Insurance. Years later, a dispute arose regarding a Release and Waiver. The district court concluded that both parties’ interpretations of the document were reasonable and considered extrinsic evidence to determine the parties’ intent. It concluded that the parties had not intended the Release and Waiver to serve as a settlement agreement and that the County had not met its evidentiary burden to challenge the amended determination. On direct appeal, The Utah Supreme Court affirmed, holding:
- The district court did not err when it concluded that the Release and Waiver had two reasonable interpretations. A contract is ambiguous if it is capable of more than one reasonable interpretation. The two interpretations do not need to be equally plausible merely reasonable. A reasonable interpretation is one that “cannot be ruled out, after considering the natural meaning of the words in the contract provision in the context of the contract as a whole, as one the parties could have reasonable intended.”
- The dissent would have concluded that the Release and Waiver constituted a binding settlement agreement because one interpretation was not reasonable under the document’s plain language.
- Appellate Practice Point: On appeal, a party must show both error and prejudice to succeed on a claim of error.
- Appellate Practice Point: Appellate briefing must demonstrate error and prejudice even when the law is not fully developed in Utah case law. The County made several claims relating to the Insurance Receivership Act, which has garnered almost no attention in Utah case law. Although the County “raise[d] interesting questions,” it failed to give the Court a clear analysis as to why the district court’s decision violated the statute.