Neeshan v. Ravonsheed

                 THE UTAH COURT OF APPEALS

                        LISA M. NEESHAN,
                           Appellant,
                                v.
                       AARON RAVONSHEED,
                            Appellee.

                        Amended Opinion *
                         No. 20230122-CA
                     Filed November 29, 2024

             Third District Court, Salt Lake Department
                   The Honorable Amy J. Oliver
                            No. 210902271

              Brett W. Hastings, Attorney for Appellant
               Brennan H. Moss and Charles D. Morris,
                       Attorneys for Appellee

       JUDGE RYAN D. TENNEY authored this Opinion, in which
    JUDGES MICHELE M. CHRISTIANSEN FORSTER and RYAN M. HARRIS
                            concurred.

TENNEY, Judge:

¶1     In 2012, Lisa Neeshan executed a promissory note (the
Note) that was secured by a trust deed on her personal residence
in favor of MJT Corporation (MJT). The Note contained two
penalty provisions that applied if there were late or missed
payments. Of particular importance for this appeal, it also


* This Amended Opinion replaces the Opinion that we originally
issued on October 10, 2024. In this Amended Opinion, we made
one change to paragraph 17’s description of what prompted the
mortgage statements in question. The rest of the Opinion remains
unchanged.
                      Neeshan v. Ravonsheed


contained an antiwaiver provision. Over the next several years,
Neeshan repeatedly failed to make required payments. During
this same period, Neeshan repeatedly asked John Maxfield, MJT’s
owner, for a statement of the total amount she still owed. Each
time, Maxfield responded with an amount that did not include the
penalties for missed payments. Maxfield later testified that he
chose not to calculate or include those amounts because doing so
would have been complicated.

¶2    Maxfield eventually sold the Note to Aaron Ravonsheed.
While completing the sale, Maxfield calculated the penalty
amounts that Neeshan owed and provided those amounts to
Ravonsheed, and Ravonsheed subsequently gave Neeshan a
payoff amount that included those amounts. When Neeshan
refused to pay, Ravonsheed initiated foreclosure proceedings.

¶3      Neeshan later sued, arguing that Maxfield had waived the
right to collect the penalty amounts. At the close of a bench trial,
the district court ruled that although Maxfield had knowingly
failed to enforce the penalty provisions, he had not intentionally
waived the Note’s antiwaiver provision. As a result, the court
ruled that Ravonsheed retained the right to collect the amounts
owed under the penalty provisions. Neeshan now challenges that
conclusion on appeal. For the reasons set forth below, we affirm.


                         BACKGROUND

¶4     In 2012, Neeshan executed the Note for $114,000, which
was secured by a trust deed on her personal residence, in favor of
MJT. The Note contained two penalty provisions, each of which
allowed MJT to assess interest for missed or late monthly
payments. One of them accrued based on the monthly payment
amount, while the other accrued based on the amount of unpaid
principal. The Note also contained an antiwaiver provision that




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stated, “No failure or delay by Holder [MJT] in exercising
Holder’s rights under this Note shall be a waiver of such rights.”

¶5     After making some initial payments, Neeshan began
regularly missing payments, and she remained behind for
roughly the next ten years. Over this same period, Maxfield sent
Neeshan eight statements that purported to identify the total
amount owing on the Note. Each statement was prepared at
Neeshan’s request “for tax purposes or when she requested a
payoff.” Maxfield prepared these statements using his “own
template.” As later found by the district court, “Maxfield did not
create a record of the total amount owed with interest and fees
from late payments because he did not know how to calculate the
total amount owed on his computer program when there were
multiple interest rates that had to be applied.” Maxfield did not
let Neeshan know that his computations omitted the penalty
interest from the payoff amounts.

¶6      Maxfield eventually sold the Note to Ravonsheed. In a
spreadsheet that Maxfield prepared for use in this sale, Maxfield
acknowledged that he had not calculated the total penalty interest
that Neeshan owed, but he represented to Ravonsheed that he
thought the penalty interest was still collectable. In one textbox on
this spreadsheet, Maxfield wrote that “additional interest on the
principal at the penalty rate was never included in mortgage
statements”; in another, he “included his calculation of the
additional interest at the penalty rate” that he thought was still
owed. After the sale was completed, Ravonsheed provided
Neeshan with a payoff amount that now included the penalties
that Neeshan owed for her past missed payments. This resulted
in a payoff amount that was 75% higher than the amount Maxfield
had given to Neeshan in the last provided payoff statement—
$251,462.66 versus $143,291.00. Neeshan subsequently asked a
title company to prepare an estimate of the amount that was owed
using the most recent Maxfield statement as a baseline. She then
offered to pay Ravonsheed that amount (approximately $162,000).


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Ravonsheed disputed the accuracy of Neeshan’s proposed payoff
amount because it “did not include all the default interest.”

¶7      When Neeshan did not resume payments, Ravonsheed
initiated foreclosure proceedings. Neeshan then sued to stop the
foreclosure. Among other grounds, she argued that MJT had
waived the right to collect the penalty interest, as evidenced by
the payoff statements that Maxfield had provided.

¶8      The case proceeded to a two-day bench trial, where the
facts recited above were established. At that trial, Maxfield also
testified about his intent during his dealings with Neeshan.
Maxfield testified that “he did not ever state or otherwise indicate
that he intended to waive the anti-waiver provision.” Maxfield
further noted that, in the spreadsheet that he used in the sale of
the Note to Ravonsheed, he had indicated that he thought he had
not waived the right to collect all the penalty interest.

¶9     The district court subsequently issued a written decision.
There, the court agreed that Maxfield had “knowingly failed to
enforce all the terms of the [Note] when he provided mortgage
statements to Ms. Neeshan reflecting a total amount due of less
than he was entitled to under the [Note].” But the court then
pointed out that Neeshan had not presented “any evidence that
Mr. Maxfield intended to waive the anti-waiver clause.” Indeed,
in the court’s view, “the evidence on that issue indicated just the
opposite.” In support of this conclusion, the court noted that
Maxfield had not “state[d] or otherwise indicate[d] that he
intended to waive the anti-waiver provision,” and the court then
found that his testimony on that point was “credible and
uncontroverted.” The court also found persuasive Maxfield’s
annotations on the spreadsheet used to sell the Note, since they
“clearly indicated” that the total “amount owing” in Maxfield’s
mind included interest “that had not been included in the
mortgage statements.” From all this, the court found that
Maxfield had not intended to waive the antiwaiver provision—



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and, thus, that Ravonsheed retained the right to collect “all late
fees, penalties, and interest” due under the Note.


              ISSUE AND STANDARD OF REVIEW

¶10 On appeal, Neeshan challenges the district court's
determination that Maxfield did not waive the antiwaiver
provision. “Whether a contractual right has been waived presents
a mixed question of law and fact.” Hardy v. Montgomery, 

, 

. “Whether the trial court employed the
proper standard of waiver presents a legal question which is
reviewed for correctness, but the actions or events allegedly
supporting waiver are factual in nature and should be reviewed
as factual determinations, to which we give a trial court
deference.” 

 (quotation simplified). 1



1. Utah cases have long held that waiver presents a factdependent mixed question that receives deference on appeal. See,
e.g., State v. Pena, 

 (Utah 1994); Living Scriptures,
Inc. v. Kudlik, 

 (Utah Ct. App. 1995). In State v. Levin,
however, our supreme court revised the four-factor test
articulated in Pena and replaced it with a three-factor balancing
test for determining the appropriate standard of review for mixed
questions. 

, 

.
        Some portions of the briefing in this case at least hint at a
potential question about whether a waiver analysis should still be
regarded as more fact-like than law-like under the Levin rubric.
But the parties’ briefs have not fully addressed this potential issue,
and without such briefing, “we’re in no position to do this work
ourselves.” Keisel v. Westbrook, 

, ¶ 52 n.9, 

, cert. denied, 

 (Utah 2024). Moreover, we note that
some recent waiver cases have drawn distinctions based on the
type of evidence that supported the district court’s waiver
                                                       (continued…)


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                       Neeshan v. Ravonsheed


                            ANALYSIS

¶11 Neeshan challenges the district court’s determination that
Maxfield did not waive the Note’s antiwaiver provision. Under
the circumstances presented here, we see no basis for overturning
that determination.

¶12 Under the well-worn formulation, waiver “is an
intentional relinquishment of a known right.” Kiernan Family
Draper, LLC v. Hidden Valley Health Centers, LC, 

,

 (quotation simplified); accord Mounteer Enters., Inc. v.
Homeowners Ass’n for the Colony at White Pine Canyon, 

, 

. Thus, to “constitute waiver, there must be an
existing right, benefit or advantage, a knowledge of its existence,
and an intention to relinquish it.” Soter’s, Inc. v. Deseret Fed. Sav.
& Loan Ass’n, 

 (Utah 1993) (quotation simplified).

¶13 “Courts do not lightly consider a contract provision
waived, however,” Cocks v. Swains Creek Pines Lot Owners Ass’n,

, 

 (quotation simplified), and the
“element of intent is the central focus in most waiver cases, as it is
the element most often in dispute,” Lane Myers Constr., LLC v.
National City Bank, 

, 

 (quotation
simplified). Moreover, the “intent question is intensely fact


determination. See, e.g., Hardman v. Campbell, 

, -- P.3d – (“[W]hen evaluation of waiver is based upon
undisputed facts and on documents in the record, we review it for
correctness.”); accord Turpin v. Valley Obstetrics & Gynecology, 

, ¶¶ 13–17, 

. Our determination in this
opinion rests in part on the fact that the district court made a
finding about Maxfield’s lack of intent that the court based, in no
small measure, on its evaluation of in-court testimony during a
bench trial. As a result, we conclude that it’s appropriate to give
deference to both that finding and the conclusions the court drew
from it.


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dependent, turning on whether the totality of the circumstances
warrants the inference of relinquishment.” 

 (quotation
simplified). “Although it may be expressed or implied,” “the
intent to relinquish a right must be distinct.” Wilson v. IHC Hosps.,
Inc., 

, 

 (quotation simplified). And the
requirement of distinctness “ensure[s] that waiver [will] not be
found from any particular set of facts unless it was clearly
intended.” Soter’s, 

.

¶14 In this appeal, Neeshan does not argue that Maxfield
expressly waived the Note’s penalty provisions or antiwaiver
provision. Instead, Neeshan claims that Maxfield impliedly
waived them. In Mounteer, our supreme court set forth the
contours of the implied waiver doctrine. The court explained that
as a general matter, implied waiver occurs where a party
“intentionally acted in a manner inconsistent with its contractual
rights.” Mounteer, 

 (quotation simplified). The
court then explained that if the contract in question also contains
an antiwaiver provision, the “calculus changes” and a party can
no longer “waive a contractual right merely by failing to enforce
the provision establishing that right.” Id. ¶ 19. Instead, the “party
asserting waiver in the face of an antiwaiver clause must establish
a clear intent to waive both the antiwaiver clause and the
underlying contract provision.” Id. ¶ 21 (emphasis in original,
quotation otherwise simplified).

¶15 Thus, if a contract contains an antiwaiver provision, the
“mere failure to insist on performance of an underlying contract
provision is insufficient to establish the intentional
relinquishment of a party’s rights under the antiwaiver
provision.” Id. ¶ 24. Instead, something more is required—
namely, behavior that “amount[s] to affirmative disavowal of the
underlying provision of a contract.” Id. ¶ 27. Such conduct must
“establish a reasonable basis for the conclusion that a party has
effectively agreed not to insist on performance,” i.e., that the




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“party intends to disregard” both the underlying provision and
the antiwaiver provision. Id. ¶¶ 27–28.

¶16 Mounteer then pointed to a prior case—ASC Utah, Inc. v.
Wolf Mountain Resorts, LC, 

, 245 P.3d 184—as an
illustration of what such conduct might look like. See Mounteer,

. In ASC Utah, the supreme court concluded that
a party waived a contractual right to insist on arbitration where
the party had participated in litigation over several years, and the
court did so notwithstanding the presence of an antiwaiver
provision in the contract at issue. 

, 37–39. In
Mounteer’s retelling of ASC Utah, the party’s “active[]” and
“extensive” participation in litigation “(at least arguably)
affirmatively disavowed the right to arbitrate.” Mounteer, 

. Mounteer then explained that “such affirmative
disavowal can be viewed as sufficient to establish a reasonable
basis for the conclusion that a party intends to disregard the
agreement to arbitrate (and also waived the antiwaiver
provision).” 

¶17 Neeshan argues that this is analogous to what happened
here. As Neeshan points out, the district court found that
Maxfield had provided Neeshan with eight mortgage statements
over the course of four years, all of which were in response to
Neeshan’s requests for a payoff amount or for tax purposes. And
the district court further concluded that Maxfield “chose not to
enforce the strict provisions of the [Note]” in those statements
“due to the challenges of calculating the correct amount.” Having
considered the matter, we acknowledge that this perhaps could
be regarded as an indication of Maxfield’s intent to not enforce
the penalty provisions from the Note.

¶18 But even so, there remains an important difference
between this case and ASC Utah—namely, the district court here
held a trial, took evidence on the question of whether waiver
occurred, and then, based on that evidence, found that “the



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evidence on that issue indicated” that Maxfield did not intend to
waive the antiwaiver provision.

¶19 This finding must matter. Again, waiver involves the
“intentional relinquishment of a known right.” Kiernan Family
Draper, LLC, 

 (emphasis added, quotation
otherwise simplified); see also Soter’s, 

 (holding that
there must be the “intention to relinquish” a known right)
(quotation simplified)). And in cases in which there is also an
antiwaiver provision, “there must be a clear intent to waive both
the underlying provision and the antiwaiver provision.”
Mounteer, 

 (emphases added).

¶20 Neeshan has not provided us with any persuasive basis for
overturning the district court’s finding that Maxfield did not have
the intent to waive the antiwaiver provision. And to the extent
that this finding turned on Maxfield’s credibility, it must be given
deference on appeal. See, e.g., In re K.S., 

,

 (“Unlike members of this court, the [lower] court
observed the relevant testimony firsthand. As a result, it was in a
better position than we are to evaluate the credibility of that
testimony and make determinations about the key facts.”). And
here, as noted by the district court, Maxfield not only testified that
he did not have such intent, but this testimony was corroborated
by the spreadsheet he prepared while selling the Note, wherein
Maxfield “clearly indicated” that he believed the full penalty
interest amount was still collectable.

¶21 On appeal, Neeshan does not argue in response that there
was insufficient evidence to support the court’s finding about
Maxfield’s lack of intent. Rather, she argues that the district court
should not have considered Maxfield’s subjective intent at all. In
doing so, Neeshan places particular reliance on Mounteer’s
explanation that “conduct alone can impliedly waive a contractual
provision even with the existence of an antiwaiver provision.”
Mounteer, 

 (emphasis added by Neeshan). But



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while Neeshan emphasizes the word “alone” in this sentence, we
note that it’s followed by the word “can.” That is to say, if the only
or most credible evidence before a district court is the conduct, a
court certainly could rely on that conduct as support for a
determination that implied waiver occurred. But this doesn’t
mean that the party’s subjective intent is irrelevant. To the
contrary, our supreme court has held that waiver should “not be
found from any particular set of facts unless it was clearly
intended.” Soter’s, 

.

¶22 In an express waiver case, intent will of course be readily
discernible. That’s the express portion of the express waiver
determination. But intent still remains important in implied
waiver cases too, and this is particularly so when there is an
antiwaiver provision. Again, Mounteer stated that “a party may
implicitly waive an antiwaiver provision through conduct, but
there must be clear intent to waive both the underlying provision
and the antiwaiver provision.” 

 (emphasis added).

¶23 As we understand it, what’s different is the means of proof.
Our cases have long recognized that because intent “can rarely be
established directly,” “circumstantial evidence” can be used to
establish it. Selvage v. J.J. Johnson & Assocs., 

, 1262 n.9
(Utah Ct. App. 1996). So in a situation in which a party has not
expressly waived a right or a contractual provision, implied
waiver allows the court to find waiver if a party’s behavior itself
“amount[s] to affirmative disavowal of the underlying provision
of a contract.” Mounteer, 

. In such a case, the
party’s behavior essentially acts as the circumstantial evidence of
the party’s intent.

¶24 As noted, however, “courts do not lightly consider a
contract provision waived.” Cocks, 

(quotation simplified). And authorities discussing implied waiver
generally have thus stressed that the manifestation of intent from
the course of conduct must be clear. See generally 17B C.J.S.



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                      Neeshan v. Ravonsheed


Contracts § 749 (2024) (recognizing that “the party’s conduct must
be so manifestly consistent with and indicative of an intention to
renounce a particular right or benefit that no other reasonable
explanation of the conduct is possible”); 17A Am. Jur. 2d Contracts
§ 624 (recognizing that implied waiver can be shown “by
undisputed acts or language so inconsistent with a purpose to
stand on the contract provisions as to leave no opportunity for a
reasonable inference to the contrary, in which case the waiver is
established as a matter of law”).

¶25 Here, there was indeed a course of conduct that could have
perhaps supported a finding that Maxfield intended to waive the
antiwaiver provision. But like the district court, we don’t regard
Maxfield’s course of conduct as being so manifestly indicative of
an intention to never assess the penalty provisions that Maxfield’s
intent to waive both those provisions and the antiwaiver provision
must be presumed as a matter of law. After all, it’s not unheard of
in some commercial transactions for a vendor to assess certain
fees only at the end. And more to the point, there was also direct
evidence in this case (including, of note, from Maxfield himself)
about Maxfield’s lack of intent, and the district court specifically
credited that evidence. In light of this, and in light of past Utah
decisions that have anchored waiver determinations to the party’s
intent, we see no basis for overturning the court’s decision that
Maxfield did not clearly intend to waive the antiwaiver
provision—and, by extension, his rights to assess certain
penalties. 2



2. We recognize that in Mounteer, the waiver question was
submitted to a jury, the jury found that the underlying contractual
provision was waived, and yet the supreme court overturned that
verdict and held that the district court should have entered a
judgment notwithstanding the verdict (i.e., the supreme court
concluded that, despite the verdict, there was no waiver).
                                                     (continued…)


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Mounteer Enters., Inc. v. Homeowners Ass’n for the Colony at White
Pine Canyon, 

, 11–12, 14–30, 

. But this
doesn’t mean that an appellate court should not ordinarily defer
to the fact finder in such cases.
        As an initial matter, the supreme court concluded that the
jury in Mounteer had been improperly instructed on the test for
implied waiver. The jury there had been told that the “existence
of an anti-waiver provision is merely one factor to consider in
determining whether a party has waived its right under the
agreement,” id. ¶ 11 (quotation simplified), but, as indicated
above, the supreme court concluded a party must show “a clear
intent to waive both the antiwaiver clause and the underlying
contract provision,” id. ¶ 21 (emphasis in original, quotation
otherwise simplified). Based on instructional error alone, the
verdict in question was infirm.
        More importantly, the supreme court described the nonenforcement at issue in somewhat benign terms—it said that the
party in question “merely failed to notice the deficiency in the
insurance certificates.” Id. ¶ 29. From there, the supreme court
concluded that there “was nothing in the conduct” of the party
“that indicated its intent to disavow” the contractual right at
issue, and the supreme court further concluded that the party who
was asserting waiver had “produced no evidence of waiver
beyond” the mere “failure to insist on performance.” Id. ¶¶ 29, 35.
        In our view, this is consistent with the result we reach here.
The course of conduct in this case (affirmatively sending out
statements that did not include calculations of penalty interest)
was perhaps a touch more indicative of waiver than that which
was at issue in Mounteer. But as explained above, we don’t regard
this course of conduct as being so indicative of implied waiver
that the district court was required to view it as such. And in
addition, the district court also heard, and was persuaded by,
evidence that Maxfield never had such intent. Thus, unlike the
                                                        (continued…)


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¶26 Finally, we offer two clarifications about the scope of our
decision.

¶27 First, this isn’t to say that a party who has engaged in a
course of conduct that’s suggestive of waiver could subsequently
and unilaterally defeat an implied waiver claim by simply
testifying that he or she lacked such intent. When confronted with
such a scenario, a district court would still function as the fact
finder. And a court could in theory find that any after-the-fact
testimony about a lack of intent was not credible—particularly if
the party’s past course of conduct persuades the court that the
party did previously intend to waive the provision in question.
Put differently, if the court concludes that, during the period in
question, the party’s conduct shows that the party did intend to
waive the provision at issue, the court could find waiver even
despite testimony from the party to the contrary. But as noted,
that’s not what the district court found here.

¶28 Second, we note that there are other related doctrines that
may potentially come into play in similar circumstances that don’t
require a showing of intent. Among others, courts have
recognized waiver by estoppel, a doctrine that does not require
intent but does require reliance. See, e.g., Mounteer, 

 (“Waiver is dependent only upon a showing of words or
conduct manifesting the intentional relinquishment of a known
right. Prejudice, on the other hand, is relevant only as an element
of estoppel.” (quotation simplified)); J.R. Hale Contracting Co. v.
United N.M. Bank, 1990 NMSC 089, ¶¶ 11–12, 

 (where
waiver is “based upon the honest belief of the other party that a
waiver was intended” but is “contrary to the intention of the party
waiving,” it is properly characterized as waiver by estoppel rather
than as “voluntary waiver, either express or implied in fact,” and
thus recognizing that “‘implied in fact’ waivers still represent a

situation in Mounteer, the evidence below supported the verdict
at issue.


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voluntary act whose effect is intended” (emphasis added)); see also
13 Williston on Contracts § 39:22 (4th ed. 2024) (“Waiver by
implication, or waiver inferred from a party’s conduct, will not be
found contrary to the expressed intention of the party whose
rights would be injuriously affected by it unless the other party
has been misled by such conduct to its prejudice.”); id. § 39:28
(“While a waiver may be implied from conduct in the absence of
an express declaration, the waiver must be intentional, at least in
the absence of detrimental reliance by the nonwaiving party.”).
But Neeshan has not argued that a doctrine such as waiver by
estoppel applies in this case.

¶29 In short, based on past Utah decisions that have anchored
waiver determinations to the party’s intent, as well as the state of
the record, we see no basis for overturning the district court’s
decision that Maxfield did not clearly intend to waive the
antiwaiver provision—and, by extension, his rights to assess
certain penalties.


                         CONCLUSION

¶30 Utah’s waiver doctrine requires the intentional
relinquishment of a known right. Because the district court below
found that Maxfield had no intent to waive the antiwaiver
provision, and because Neeshan has not successfully challenged
that finding on appeal, we affirm the district court’s conclusion
that the implied waiver doctrine did not apply. As a result, we
likewise affirm the court’s conclusion that Ravonsheed can assess
the penalty provisions set forth in the Note.




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