HP Inv. v. iLux Cap. Mgmt.
HP Inv. v. iLux Cap. Mgmt., 2021 UT App 113 (Mortensen, J.)
Contract; Stocks
H&P prevailed against Investment Companies in a bench trial for a breach of contract claim in which it alleged Investment Companies had provided it with fewer shares of stock than provided for by the contract. Investment Companies appealed, raising various issues with the district court’s damages award, including concerning the relevant date and manner for calculating damages for the breach. The court of appeals reversed, holding among other things that:
- Utah Code § 70A-713 applies to publicly traded stocks as well as sale of goods, and it provides the proper measure of damages under the circumstances here, which is the difference between the contract price and the market price at the time when the buyer discovered the breach. Here, the district court applied this provision but made an erroneous factual finding regarding the date H&P learned of the breach.
- In calculating damages, binding precedent from the Utah Supreme Court has “long foreclosed the possibility of applying the New York rule to breach of contract claims,” which “sets the measure of damages as the highest intermediate value of the stock between the time of conversion and a reasonable time after the owner receives notice of the conversion.” Here, the district court plainly erred in applying the New York rule.
- Of Note: In a footnote, the court of appeals once again “recognized the ongoing debate about the propriety of civil plain error review,” but because neither party challenged the application of plain error review in this case, the court of appeals applied it without opining on its propriety.
