Shree Ganesh, LLC v. Weston Logan, Inc.
Shree Ganesh, LLC v. Weston Logan, Inc., 2021 UT 21 (Durrant, J.)
Civil Procedure; Contract Law; Tort Law
Plaintiff purchased hotel (Property) from Defendant, but Defendant did not inform Plaintiff of Defendant’s plans to develop a competing hotel across the street. Plaintiff sued, raising contract and tort claims. The district court dismissed these claims on summary judgment, ruling that Defendant did not owe any duty to disclose the information. The Utah Supreme Court reversed, holding:
- The district court erred in ruling that Defendant had no contractual duty to disclose the information as a matter of law. The district court read certain disclosure and other provisions as unambiguously applying only to the real property, not the hotel business. But where other parts of the contract dealt with the hotel as a business, the provisions at issue could reasonably be interpreted to create a duty to disclose the information, which made the provisions ambiguous and their interpretation a question of fact.
- The district court erred in ruling Defendant had not breached a common law duty as a matter of law. There is a duty to disclose “material elements of a property,” and the materiality (importance) of the information can be gauged by the degree to which it would be expected to influence the buyer. Plaintiff’s testimony that the information would have been an important factor in its decision to purchase Property raised a disputed factual issue.
- There was also a factual dispute as to whether Defendant breached a duty to clarify a misleading statement from its realtor indicating that other hotels were not being developed in the area. Where a person makes an affirmative statement, the person has a common-law duty to disclose all material facts necessary to prevent that statement from being misleading. Given its context, it is reasonable to conclude the realtor’s statement was misleading, absent the disclosure of other, clarifying information.