Chief Justice Durrant, opinion of the Court:
¶ 1 In 2005, Appellees signed credit card agreements with Federated Capital Corporation's predecessor-in-interest, Advanta Bank Corporation. The agreements included a forum selection clause and choice of law provision, ensuring that Utah procedural and substantive law would govern any dispute under the contract. The agreements required Appellees to render payment to the address specified on their periodic billing statements. Each billing statement identified an address in Philadelphia, Pennsylvania, as the place of payment. In 2006, Appellees defaulted. And in 2012, Federated brought suit against Appellees in separate proceedings. The district court in each proceeding granted summary judgment, concluding that Utah's borrowing statute adopted Pennsylvania's four-year statute of limitations, which barred Federated's causes of action. Federated appealed the district court's decision in each case, and we consolidated the two appeals. Each appeal presents the same issue: whether an enforceable forum selection clause precludes the application of Utah's borrowing statute.
¶ 2 In 2005, Connor Libby,
¶ 4 In 2006, Appellees defaulted on their payments. Ms. Chapa made no payments after August 2, 2006, and owed $21,104.11. Mr. Libby made no payments after October 31, 2006, and owed $22,747.30. In 2007, Advanta assigned its interest in Appellees' accounts to Federated, a Michigan corporation licensed in Utah. Nearly six years later, Federated filed separate claims in separate proceedings against Ms. Chapa and Mr. Libby on August 2, 2012, and October 4, 2012, respectively.
¶ 5 Appellees individually moved for summary judgment, both arguing that Utah's borrowing statute required the court to apply Pennsylvania's four-year statute of limitations governing contract disputes, thereby barring Federated's claims. The district court agreed and granted summary judgment in favor of Appellees. Thereafter, Federated moved for a new trial in each case, and the district court denied both motions, awarding Appellees attorney fees under the reciprocal attorney fees statute.
¶ 6 Federated now appeals the district court's grant of summary judgment, arguing that the Agreement's forum selection clause makes the borrowing statute inapplicable to its claims. The cases were consolidated for appeal, and we retained the cases on appeal to consider the effect of the Agreement's forum selection clause on Utah's borrowing statute.
¶ 7 Federated appeals the district court's grant of summary judgment. Summary judgment is appropriate when the evidence "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."
¶ 8 Federated raises essentially two arguments on appeal. First, it claims that the district court erred when it relied on the borrowing statute to apply Pennsylvania's four-year statute of limitations because the Agreement's forum selection clause required the court to apply Utah procedural law only, including Utah's six-year statute of limitations for written contracts. Second, it asserts that the borrowing statute applies only where a cause of action that arises in another jurisdiction is "not actionable by reason of the lapse of time," and is thus inapplicable here since it was the forum selection clause that rendered Federated's claims not actionable in Pennsylvania. The first argument focuses on whether the forum selection clause wholly excludes the borrowing statute, whereas the second argument focuses on whether the statute, by its plain language, even applies to this dispute. We reject both arguments.
¶ 9 Utah's borrowing statute requires a court to apply the limitation period of a foreign jurisdiction when a party's "cause of action arises in [that] jurisdiction" and is "not actionable" there "by reason of the lapse of time."
¶ 10 Federated's second argument also fails. As a preliminary matter, Federated did not challenge on appeal the district court's conclusion that its breach of contract causes of action arose in Pennsylvania. We therefore accept, for purposes of this appeal, the district court's decision on this point. Further, contrary to Federated's contention, the borrowing statute merely requires that a cause of action be "not actionable" in a foreign jurisdiction "by reason of the lapse of time," even if it is "not actionable" by some other independent reason.
¶ 11 Federated argues that when the parties signed the forum selection clause, they agreed to be bound by Utah procedural law, and "they necessarily agree[d]" that Utah's six-year statute of limitations for written contracts
¶ 12 This argument misconstrues the importance of the forum selection clause in the context of the broader Agreement and the relationship between the Agreement and the borrowing statute. The Agreement contained both a forum selection clause and a choice of law provision. Between these two contractual provisions, the Agreement ensured that the
¶ 13 Because a forum selection clause controls where its signatories may bring suit,
¶ 14 Unlike other statutes of limitations, the borrowing statute does not impose a specific time limit on a cause of action. Instead, it prevents a litigant from "pursu[ing an action] in this state," when that action would be barred by a shorter limitations period in the jurisdiction where it arose.
¶ 15 In this case, Federated incorrectly argues that it was "denied ... the benefit of its bargain" when the district court relied on the borrowing statute to apply Pennsylvania's procedural laws, claiming that the forum selection clause made "the procedural laws of any other state inapplicable." This argument overlooks the fact that the borrowing statute did not merely apply Pennsylvania's shorter statute of limitations, but borrowed that law, making the four-year period a Utah statute of limitations for purposes of the dispute between Federated and Appellees. The forum selection clause straightforwardly requires the Agreement to be governed by all of Utah's laws. The borrowing statute is such a law. The district court did not deny Federated its bargain, but gave the company precisely what it bargained for.
¶ 16 In fact, on appeal Federated essentially asks this court to give it a better deal than it bargained for. As noted previously, the Agreement selected Utah procedural and substantive law to govern the dispute. This places Federated and Appellees in the same position as parties to an oral contract suing
¶ 17 In summary, the Agreement selects Utah procedural and substantive laws to govern a dispute between the parties. Because the borrowing statute is a Utah law that adopts a shorter foreign limitations period, treating it as a Utah limitations period for purposes of a particular dispute, the forum selection clause does not preclude the borrowing statute from adopting Pennsylvania's four-year statute of limitations as a Utah statute of limitations for purposes of this case. Thus, having concluded that the borrowing statute was part of the law selected by the parties in their contract, we turn now to the issue of whether the district court properly interpreted and applied that statute to bar Federated's claims.
¶ 18 As shown above, the forum selection clause requires that we consider how the borrowing statute applies in this case. Utah's borrowing statute reads as follows:
This statute creates a two-part test. The first part asks whether "[a] cause of action ... ar[ose] in another jurisdiction." The second part asks whether that cause of action "is not actionable in the other jurisdiction by reason of the lapse of time." If both of these elements are satisfied, a Utah court will adopt that foreign jurisdiction's time limitations, unless the plaintiff can satisfy an exception specified in the statute — an exception not relevant in this case.
¶ 19 Because Federated does not challenge the correctness of the district court's conclusion as to the first part of this statutory test, we accept the district court's decision on this matter that Federated's breach of contract causes of action against Appellees arose in Pennsylvania. Further, as to the second part of the test, we conclude that the borrowing statute applies because Federated's claims were "not actionable ... by reason of the lapse of time," regardless of whether those claims were also barred by the forum selection clause.
¶ 20 The first element of the borrowing statute looks to whether "[a] cause of action... ar[ose] in another jurisdiction." In its opposition to summary judgment in each case before the district court, Federated assumed that its causes of action arose at the place of performance under the Agreement. Yet, Federated reasoned that because Appellees made each monthly payment electronically to Advanta in Utah, its causes of action for Appellees' defaults under the Agreement arose in Utah. In both cases, the district court rejected this argument, noting that Appellees' "performance under the contract would be deemed effective only when the payments reached Pennsylvania."
¶ 21 On appeal, Federated abandoned its argument that the claims arose in Utah. Instead, it averred that the district court improperly "focused its analysis on where the claims purportedly `arose,' never recognizing that the question was irrelevant because the parties agreed in advance to Utah as the forum state for their claims." Further, in its reply brief, Federated argued that "the parties included the forum selection clause to make clear that `place of performance' would not govern procedure."
¶ 23 After determining that a cause of action arises in another jurisdiction, Utah's borrowing statute requires a court to determine whether the cause of action "is not actionable in the other jurisdiction by reason of the lapse of time."
In other words, Federated interprets the borrowing statute as applying when a cause of action is "not actionable [solely] by reason of the lapse of time."
¶ 24 We do not read the statute in this manner. The statute unambiguously applies whenever a cause of action is "not actionable... by reason of the lapse of time," regardless of whether some independent reason also renders a cause of action "not actionable." Even if a defendant had multiple alternative defenses, one of which is a statute of limitations, we would not conclude that the claim is no longer "not actionable" by reason of the lapse of time just because it is also "not actionable" for other reasons. In other words, an alternative basis for dismissal does not eliminate the conclusion that a cause of action is not actionable by reason of the lapse of time.
¶ 25 Federated resists this interpretation of the statute, however, due to the primary policy behind borrowing statutes. Specifically, Federated rightly notes that borrowing statutes serve to discourage forum shopping.
¶ 26 Generally, the judiciary cannot rewrite a statute it deems "susceptible of improvement."
¶ 27 Each of Federated's arguments fail. The borrowing statute applies. The breach of contract causes of action were rendered "not actionable" in this case "by reason of" Pennsylvania's four-year statute of limitations. Thus, we hold that the district court rightly applied Utah's borrowing statute in this case and affirm that court's grant of summary judgment in favor of Appellees. Consonant with this disposition, we also conclude that Appellees should receive their attorney fees.
¶ 28 Utah's reciprocal fee statute permits a court to award attorney fees to the prevailing party in civil litigation based upon a contract when the contract provides attorney fees to at least one party.
¶ 29 The borrowing statute applies to Federated's causes of action. Because its causes of action arose in Pennsylvania, and that jurisdiction's four-year statute of limitations applicable to contracts rendered the causes of action "not actionable," we apply the borrowing statute to adopt that statute of limitations and bar Federated's claims. Consistent with this disposition of the case, we award attorney fees to Appellees as the prevailing party and remand for the district court to determine the appropriate fee award.
Associate Chief Justice Lee filed a concurring opinion, in which Justice Himonas joined.
Associate Chief Justice Lee, concurring:
¶ 30 I agree with and thus concur in the majority opinion in full. Specifically, I agree that Federated Capital's cause of action is subject to a four-year Pennsylvania statute of limitations under our Utah borrowing statute, Utah Code section 78B-2-103. And I concur in the court's conclusion that Federated's claim is time-barred because it was not filed within the four-year limitations period under Pennsylvania law.
¶ 31 The majority rightly rejects the two challenges to this holding advanced by Federated Capital — that the forum-selection clause in the parties' credit agreement dictated the application of the six-year limitations period under Utah law, and that the same clause foreclosed the conclusion that the cause of action is "not actionable by reason of the lapse of time." I concur in the court's analysis on these issues.
¶ 32 I write separately, however, to emphasize the limited nature of the court's decision in this case. I note, in particular, that the court's decision follows from a key concession made by Federated Capital in the course of this litigation — that its "cause of action ar[o]se[] in another jurisdiction" (Pennsylvania). See supra ¶ 17. And I would emphasize that this concession takes a threshold question — of the applicability of the borrowing statute in a case like this one — off the table.
¶ 33 This is an important question that a court should take up in a future case, and that should not be deemed to be foreclosed by our decision today. It is by no means a foregone conclusion that a claim asserted under a credit agreement like Federated Capital's should be deemed to trigger the borrowing statute. The agreement in question contains not just a forum-selection clause but also a choice-of-law clause. See supra ¶ 1. And because the choice-of-law clause dictates the application of Utah law, it is at least arguable that Federated's claim arises not in Pennsylvania but in Utah.
¶ 34 The borrowing statute's "arises in" formulation, after all, is at least arguably a reference to a choice-of-law principle.
¶ 35 This question came up at oral argument in this case. And Federated expressly
¶ 36 This issue should be decided in a future case. When the argument is squarely raised, our courts should decide whether the borrowing statute's "arises in" formulation is a reference to applicable choice-of-law rules or is dictated simply by the longstanding "place of performance" test.
¶ 37 I see arguments going both ways on this question. Our precedent, after all, long ago interpreted the borrowing statute as incorporating the place of performance test. See Lawson v. Tripp, 34 Utah. 28, 95 P. 520, 522-23 (1908). And it is certainly possible to view the statute as retaining that test going forward. Presumably that was Federated Capital's view, and why it conceded that its claim arose in Pennsylvania. But it also seems possible to interpret the statute as embracing whatever evolving standard our law has adopted for choosing the governing law. If so, a claim arising under a contract with an enforceable choice-of-law clause would arise in the state whose law governs its disposition.
¶ 38 That is a question for another day, however. The majority is right to decline to reach it here given Federated Capital's concession. I write separately only to highlight what I see as an important issue, and to state my view that our decision today should not be deemed to foreclose further analysis of this underlying question in a future case.
