When is a contractual attorney fee provision ambiguous? Vierig v. Therriault Explained

In Vierig v. Therriault, the Utah Court of Appeals addressed when contractual attorney fee provisions become questions of fact requiring extrinsic evidence rather than matters of law for judicial determination.

Background and Facts

Craig Vierig executed a trust deed securing a $200,000 debt to Sarah Therriault. When Vierig later sued to invalidate both the debt and trust deed, Therriault successfully defended and counterclaimed for collection. The trust deed contained a fee provision obligating Vierig to pay “all costs and expenses of collection (including Trustee’s and attorney’s fees in event of default in payment of the indebtedness secured hereby).” Therriault requested attorney fees for both defending the debt’s validity and prosecuting her counterclaim, but the district court denied both requests as a matter of law.

Key Legal Issues

The central issue was whether Therriault could recover attorney fees under the fee provision’s “costs and expenses of collection” language. This required determining whether the provision was ambiguous and, if so, whether contractual interpretation presented a question of fact requiring extrinsic evidence of the parties’ intent.

Court’s Analysis and Holding

The court established that contractual ambiguity exists when “both sides advance interpretations that are plausible and reasonably supported by the document’s language,” even without parties explicitly using the term “ambiguous.” Vierig reasonably argued that “collection” refers narrowly to receiving payment, distinguishing validity litigation from collection actions. Therriault reasonably countered that the phrase “all costs and expenses of collection” should be interpreted expansively, and that defending against validity challenges is “inextricably intertwined” with collection efforts. Finding both interpretations reasonable, the court reversed regarding fees for defending the debt’s validity and remanded for factual determination of the parties’ intent. However, it affirmed denial of fees for prosecuting the unsuccessful counterclaim, finding no plausible interpretation supporting recovery for that failed effort.

Practice Implications

This decision clarifies preservation requirements for ambiguity arguments. Parties need not explicitly argue “ambiguity” below if they present competing reasonable interpretations of contractual language. The court emphasized that when parties seek relief under contract provisions as matters of law, they necessarily preserve arguments that the provisions could be interpreted differently. This ruling provides important guidance for practitioners handling attorney fee disputes and contractual interpretation issues in Utah courts.