PC Riverview, LLC v. Xiao-Yao Cao

¶1 In 2003, L + C Unlimited Corporation (L + C) was assigned

the lease that permitted the Golden Isle Restaurant to operate in a

strip mall in Murray, Utah. Xiao-Yan Cao, L + C’s president,

personally guaranteed L + C’s performance. In 2006, the lease was

again assigned, this time to Hong G. Lin. As part of that assignment,

the lease term was extended until September 30, 2013, and both Cao

and Lin inked personal guaranties. In 2010, Lin fell behind making

rent payments. Lin and PC Riverview, the property’s landlord,

agreed to a repayment schedule to permit Lin to catch up, which he

did. In 2013, Lin defaulted on rent payments shortly before vacating

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Opinion of the Court

2

the premises. PC Riverview sued both Lin and Cao for $5,003.50, a

sum that represented the last month’s rent and a small balance from

the penultimate month.1 Cao resisted paying that amount, arguing

that the 2010 repayment schedule materially modified the contract

and discharged her guaranty. The district court agreed and ruled in

Cao’s favor.

¶2 The Utah Court of Appeals reversed the district court’s

order. Relying on the Restatement (Third) of Suretyship and

Guaranty, the court of appeals reasoned that merely extending the

period within which a tenant could pay its rent did not materially

modify the contract. It concluded that Cao was therefore still on the

hook for Lin’s past-due rent.

¶3 Cao seeks our review of the court of appeals’ decision. We

conclude that the court of appeals correctly determined that the 2010

repayment agreement did not materially modify the contract and

that Cao is not relieved of her responsibilities as guarantor. We

affirm the court of appeals’ decision.

BACKGROUND

¶4 In 1993, the restaurant at the heart of this matter operated as

Royal China Restaurant. Over the next decade, Royal China changed

its name, its landlord, and its owner—the latter a number of times.

¶5 The first change took place in 1997, when the lease was

assigned to new tenants. The assignment included a provision

imposing late fees and interest if rent was not paid on time. The

restaurant’s name also changed to Golden Isle Restaurant.

¶6 In 2003, the lease was again assigned to a new tenant, L + C.

Appellant, L + C’s president, Xiao-Yan Cao, personally guaranteed

to then-landlord Riverview Properties the “performance of all

covenants, conditions and obligations and duties required of Tenant

under said Lease.” That assignment also provided that, “[e]xcept as

specifically modified, altered, or changed by this Agreement, the

Lease and any amendments and/or extensions shall remain unchanged and

in full force and effect throughout the Extension Term of the Lease.”

(Emphasis added.) Those amendments and extensions included the

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1 PC Riverview also sought interest and attorney fees.

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Opinion of the Court

3

1997 provision detailing late fees and interest on past-due amounts

owed.

¶7 Then in 2006, Cao assigned the lease to another tenant, Hong

G. Lin. Lin took over the remaining two years of L + C’s lease and

extended the lease an additional five years—to September 30, 2013.

Both Cao and Lin signed the 2006 Lease Extension as guarantors.

The 2006 Lease Extension also adopted all terms of the original lease

and “any amendments and/or extensions”—again including the

1997 provision detailing late fees and interest on past-due amounts

owed and Cao’s 2003 personal guaranty.

¶8 A month later, in June 2006, Riverview Properties assigned

its “interest as landlord” in the strip mall that housed Golden Isle to

a new landlord, PC Riverview.

¶9 In 2008, Lin fell behind paying rent. This lapse continued

over the course of almost two years. In 2010, PC Riverview filed suit

against Lin and Cao. PC Riverview sought collection of Lin’s missed

rent plus late fees—a total of $23,951.28 from Lin and the

enforcement of the guaranty against Cao. Cao responded by asking

the district court to stanch her potential losses by evicting Lin. PC

Riverview opposed Cao’s efforts. As part of that opposition, PC

Riverview introduced evidence that, given the economic conditions,

it would be unable to find another tenant to lease the space Lin’s

business occupied. Cao also filed a motion for summary judgment.

The district court stayed Cao’s motion and ordered the parties to

mediate the matter.

¶10 Unbeknownst to Cao, PC Riverview and Lin crafted a plan

that would allow Lin to operate the restaurant while paying PC

Riverview what it owed in missed payments, interest, and late fees

(the 2010 repayment agreement). Cao learned of that agreement

when she was faxed a copy of an executed agreement. The 2010

repayment agreement provided that in addition to the regular

monthly payments that the lease required, Lin would make five

additional payments to repay past-due amounts. If Lin made each

payment when due, PC Riverview agreed to forgive seven-eighths of

the late charges that had accrued.

¶11 In light of the repayment plan, PC Riverview proposed to

Cao that she stipulate to the dismissal of the action without

prejudice. Cao refused. She wrote to PC Riverview explaining that

she believed this “side agreement” entered into “without [her] input

or knowledge” had “terminated” “her responsibilities as surety on

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Opinion of the Court

4

this contract.” Cao and PC Riverview never reached an accord, and

after a year of inaction on the case, the district court dismissed the

complaint for failure to prosecute.

¶12 Meanwhile, Lin stuck to the terms of his new agreement

with PC Riverview and eventually paid back all past-due rent and

late fees. One might have thought that this would have signaled a

happy ending to this story—and, indeed, 2012 came and passed

without incident. But in 2013, as Lin’s lease was poised to expire, Lin

vacated the premises without paying the last month’s rent and a

small balance he owed for the previous month. PC Riverview sued

both Lin and Cao to recover the $5,003.50 that Lin owed (as well as

interest and attorney fees). The district court granted summary

judgment against Lin, but not Cao. The case against Cao proceeded

to trial.

¶13 At trial, PC Riverview called the president of its managing

member, Grace Mitchell, to testify about the assignment from

Riverview Properties to PC Riverview. She identified a document

that detailed an “assignment and assumption of leases that [were]

entered into when [PC Riverview] purchased the property” in 2006.

Cao objected to the document being entered into evidence because

the signatories on behalf of the seller were not present to testify that

they signed the document. Mitchell then testified that she had

witnessed Riverview Properties’ representatives sign the document.

The district court admitted the document into evidence.

¶14 In closing argument, Cao contended, first, that the evidence

was insufficient to establish that Riverview Properties had ever

properly assigned its lease to PC Riverview and, second, that the

2010 repayment agreement materially modified the 2006 contract,

thereby releasing Cao as guarantor.

¶15 The district court ruled for Cao. It determined that “there

was a material modification when [PC Riverview] had Mr. Lin’s rent

so far behind and allowed him to make changes and differences to

that and didn’t notify the guarantor of that.” The district court

reasoned that “if I’m guaranteeing something and there’s changes

like that and somebody’s way behind and they’re letting them catch

up and they’re not telling me, I would consider that a material

modification.” Because it found that Cao had been released from the

guaranty, the district court announced that it did not need to reach

the question of whether the lease had been properly assigned to PC

Riverview.

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Opinion of the Court

5

¶16 PC Riverview appealed the district court’s ruling to the

Utah Court of Appeals. The court of appeals reversed the district

court. PC Riverview LLC v. Cao, 2016 UT App 178, ¶ 8, 381 P.3d 1185.

It concluded that Cao’s guaranty “contained no provisions spelling

out particular rights in favor of Cao, such as a right to notice or a bar

on extensions or modifications absent her consent.” Id. ¶ 5.

¶17 The court of appeals relied on section 41 of the Restatement

(Third) of Suretyship and Guaranty when it stated that as a general

rule, “a guarantor is relieved of her obligations ‘[i]f the principal

obligor and the obligee agree to a modification.’” Id. ¶ 6 (alteration in

original) (citing RESTATEMENT (THIRD) OF SUR. AND GUAR. § 41 (AM.

LAW INST. 1996)). “But,” the court continued, “the Restatement

specifically excludes ‘an extension of time’ from the modifications

that would discharge a guarantor.” Id. (citation omitted). The court

of appeals thus reasoned that

Cao was not relieved of her obligations as guarantor

because the [2010 repayment agreement] was the sole

modification to the original lease, and [it] only

modified the timing of [Lin]’s payments by extending

the time in which past due rent could be paid.

Id. ¶ 7.

¶18 Cao now seeks our review of the court of appeals’ decision.

On certiorari, she argues that the 2010 repayment agreement

materially altered the terms of the underlying agreement and that

she, therefore, should be released from her obligation under it. She

also argues that the district court improperly accepted PC

Riverview’s lease assignment into evidence and that the court of

appeals erred when it did not remand for findings on whether her

lease had expired or whether she and PC Riverview were ever in

privity of contract.

¶19 We have jurisdiction under Utah Code section 78A-3-

102(3)(a). We affirm.

STANDARD OF REVIEW

¶20 On certiorari, we review the court of appeals’ decision for

correctness. State v. Levin, 2006 UT 50, ¶ 15, 144 P.3d 1096.

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Opinion of the Court

6

ANALYSIS

I. The 2010 Repayment Agreement Between Lin and

PC Riverview Did Not Materially Modify Cao’s Guaranty

¶21 Cao’s primary argument centers on the court of appeals’

holding that the district court erred when it characterized the 2010

repayment agreement between Lin and PC Riverview as a material

modification that freed Cao from her guaranty. Cao correctly notes

that a material modification to a contract will free the guarantor from

her guaranty obligations. See, e.g., DiMeo v. Nupetco Assocs., LLC,

2013 UT App 188, ¶ 9 n.2, 309 P.3d 251. But “minor alterations” to a

debtor-creditor agreement “are not of the nature or degree that

would trigger a discharge of [the sureties’] pledge of security under

suretyship law.” Id. Cao lodges two complaints against the court of

appeals’ conclusion that Lin and PC Riverview did not materially

modify their contract.

¶22 First, Cao avers that the court of appeals ignored facts

demonstrating that Lin and PC Riverview had modified the lease

through their actions even before they entered into the 2010

repayment agreement. Specifically, Cao claims that PC Riverview

materially modified the lease when it (1) allowed Lin to stay in the

property even after falling behind in the rent and (2) did not notify

Cao that Lin was delinquent in paying rent.

¶23 Cao misreads the court of appeals’ decision. The court of

appeals addressed and rejected Cao’s contentions. It noted that the

“rights and obligations of a guarantor are often defined in the terms

of the guaranty” and that “absent express terms to the contrary,

‘[t]he basic rights and duties of parties under a guaranty are

governed by common law.’” PC Riverview LLC v. Cao, 2016 UT App

178, ¶ 5, 381 P.3d 1185 (alteration in original) (quoting 38 AM. JUR. 2D

Guaranty § 53 (2016)). Cao’s guaranty provides that Cao “shall be the

Guarantor and hereby guarantees performance of all covenants,

conditions and obligations and duties required of Tenant under said

Lease.” The court of appeals reviewed the terms of the guaranty and

noted that it did not offer Cao what she wanted—notice of Lin’s

default and the right to consent to modifications. Id. (“Here, the

guaranty agreement contained no provisions spelling out particular

rights in favor of Cao, such as a right to notice or a bar on extensions

or modifications absent her consent.”). Although the court of appeals

could have been more explicit, its opinion reflects that PC Riverview

did not modify the parties’ obligations under the lease when it

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Opinion of the Court

7

permitted Lin to continue to operate the restaurant while falling

behind in rent payments. Rather, the court of appeals concluded that

the arrangement was consistent with the terms of the lease that Cao

agreed to guarantee. Indeed, by asking the district court to find that

she had a right to notice of default and an opportunity to intervene,

it was Cao who sought to modify the parties’ agreements.2

¶24 Second, Cao argues that the court of appeals

misapprehended the significance of the 2010 repayment agreement

when it reasoned that the agreement did not materially modify the

terms of her agreement with Lin. The court of appeals explained that

“[b]ecause the [2010 repayment agreement] only extended the time

for [Lin] to pay past due rent, it was not a material modification of

the original agreement” under section 41 of the Restatement (Third)

of Suretyship and Guaranty. PC Riverview, 2016 UT App 178, ¶ 8.

¶25 Cao contends that “an extension of time does materially

modify a lease” and that Lin and PC Riverview’s 2010 repayment

agreement materially modified her obligations as guarantor, thereby

discharging her of her personal guaranty. Cao appears to argue that

there are some extensions of time that might materially modify a

lease. We need not reach that question, however, because the record

makes plain that the 2010 repayment agreement was not a material

modification. Before the modification, Cao was potentially

responsible for Lin’s rent, interest, and late fees. And after the 2010

repayment agreement, Cao could have been responsible for Lin’s

rent, interest, and late fees.

¶26 Minor alterations to the underlying agreement do not

materially alter the risk the guarantor agreed to assume. See DiMeo,

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2 Cao’s desire to receive notice of Lin’s failure to pay rent is

understandable. And it is natural that a party in Cao’s position

would want that notice so that she could take steps to assist Lin from

falling further behind and limit her liability under the guarantee. The

court of appeals, however, got it precisely right when it held that

Cao did not bargain for these additional protections in the guaranty.

As we have said on many occasions, it is not the judiciary’s role to

draft better agreements for parties than those they draft for

themselves. See, e.g., Rio Algom Corp. v. Jimco Ltd., 618 P.2d 497, 505

(Utah 1980) (“A court will not . . . make a better contract for the

parties than they have made for themselves.”).

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8

2013 UT App 188, ¶ 9 n.2. As noted above, section 41 of the

Restatement (Third) of Suretyship and Guaranty recognizes this

principle:

If the principal obligor and the obligee agree to a

modification, other than an extension of time or a

complete or partial release, . . . the secondary obligor is

discharged from any unperformed duties pursuant to

the secondary obligation: (i) if the modification creates

a substituted contract or imposes risks on the

secondary obligor fundamentally different from those

imposed pursuant to the transaction prior to

modification; (ii) in other cases, to the extent that the

modification would otherwise cause the secondary

obligor a loss.

RESTATEMENT (THIRD) OF SUR. AND GUAR. § 41 (AM LAW INST. 1996).

¶27 Prior to its decision in this case, the court of appeals had

analyzed section 41 of the Restatement and rejected an argument

that a time extension coupled with the ability to make interest-only

payments was a material modifications that would relieve a surety

of her obligations. See DiMeo, 2013 UT App 188, ¶ 9 n.2. Other courts

have reached a similar result. See, e.g., Sheet Metal Workers’ Local

Union No. 100 Wash., D.C. Area Pension Fund v. W. Sur. Co., 187 F.

Supp. 3d 569, 582, 583–84 (D. Md. 2016); Cent. Bldg., LLC v. Cooper, 26

Cal. Rptr. 3d 212, 217–18 (Ct. App. 2005).

¶28 Much like the modification at issue in DiMeo, the

modification Lin and PC Riverview made changed only the timing of

the payments—and did that only within the timeframe contemplated

by the terms of the original contract. Lin and PC Riverview’s 2010

repayment agreement anticipates that Lin will “follow[] [the]

payment plan . . . on the past due balance of the lease agreement.”

The agreement then sets out the repayment schedule, allowing Lin to

repay PC Riverview in five payments by January 1, 2011.3

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3 We assume January 1, 2011, is the correct date of the final

payment between Lin and PC Riverview. The exact dates lead from

September 1, 2010, monthly through January 1, 2010, which we

assume is a clerical error.

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Opinion of the Court

9

¶29 The terms of the 2010 repayment agreement extend the

time within which Lin can pay back “the past due balance of the lease

agreement.” (Emphasis added.) The 1997 lease—which Cao adopted

in her 2003 assignment—contemplated just such a scenario: the

terms of that provision provide for “late fees” on “past due

amount[s]” and interest on those amounts. Moreover, the lease

permitted PC Riverview to waive the lease’s conditions and

covenants at its discretion. In other words, PC Riverview had the

contractual right to waive the late fees and interest that Lin had

allowed to accrue. Thus, the 2010 repayment agreement added no

terms to the original agreement.

¶30 The only argument Cao levels against the court of appeals’

application of Restatement section 41 focuses on Cao’s purported

status as a personal and uncompensated guarantor.4 We recognize

that a number of courts—including ours—have drawn an analytical

distinction between compensated and uncompensated sureties.

Gratuitous sureties are “motivated by selfless generosity” in

guaranteeing another’s debt and “enter[] into guaranty agreements

for reasons involving familial or neighborly affection and [do] not

profit financially from the transaction.” Garden State Tanning, Inc. v.

Mitchell Mfg. Grp., Inc., 273 F.3d 332, 336 (3d Cir. 2001). Because

gratuitous sureties are not “otherwise interested in the transaction

leading up to the suretyship contract,” First Nat’l Bank of E. of

Conemaugh v. Davies, 172 A. 296, 298 (Pa. 1934), they sometimes play

by a set of different rules. For example, they are often discharged

“[w]here, without [their] consent, there has been a material

modification in the creditor-debtor relationship,” even without

assuming substantially greater economic risk. Reliance Ins. Co. v.

Penn Paving, Inc., 734 A.2d 833, 838 (Pa. 1999) (citation omitted); see

also WRS Inc. v. Plaza Entm’t, Inc., 285 F. App’x 872, 876 (3d Cir. 2008)

(noting that “[g]ratuitous sureties are typically discharged ‘[w]here,

without the surety’s consent, there has been a material modification

_____________________________________________________________

4 Because it does not ultimately change the outcome, we will

assume that Cao was an uncompensated guarantor. We note,

however, that she did not develop facts before the district court that

would allow her to demonstrate persuasively that she was not

“interested in the transaction leading up to the suretyship contract.”

See First Nat’l Bank v. Davies, 172 A. 296, 298 (Pa. 1934).

PC RIVERVIEW v. CAO

Opinion of the Court

10

in the creditor-debtor relationship’” but that “[c]ompensated

sureties, by contrast, . . . are discharged only when there has been a

material modification without the surety’s consent and that

modification substantially increases the surety’s risk”) (second

alteration in original) (citation omitted).

¶31 We have recognized that uncompensated sureties are

“favored by the law.” M.H. Walker Realty Co. v. Am. Sur. Co. of N.Y.,

211 P. 998, 1010 (Utah 1922) (citation omitted). They “have a right to

stand on the terms of their obligation, and, having consented to be

bound to a certain extent only, their liability must be found within

the terms of that consent, strictly construed.” Id. (citation omitted).

Thus, “if [a surety] does not assent to any variation of [the contract]

and a variation is made, it is fatal.” Id. (citation omitted). But Cao

does not persuasively argue that this line of cases cannot be

harmonized with Restatement section 41. Indeed, Cao supports her

argument with cases that recognize that “[d]ealings between the

debtor and the primary obligor which materially modify the terms of

the guarantor’s undertaking generally result in the discharge of the

guarantor’s obligation.” Carrier Brokers, Inc. v. Spanish Trail, 751 P.2d

258, 261 (Utah Ct. App. 1988) (emphasis added). And Cao concludes

by arguing, “[u]nder these principals [sic], any material alteration by

Plaintiff and Defendant Lin to the underlying obligation relieved

Defendant Cao of her surety obligation.”5 (Emphasis added).

¶32 The 2010 repayment agreement did not materially modify

the underlying obligation. As described above, before PC Riverview

and Lin entered into the 2010 repayment agreement, Cao faced the

potential of having to pay rent for the term of the lease, interest, and

late payments. And after PC Riverview and Lin entered into the 2010

repayment agreement, Cao faced the potential of having to pay rent

for the term of the lease, interest, and late payments. The 2010

repayment agreement did not expose Cao to different or new terms

than she was already exposed to under the lease. There was no

material modification. Without more, the mere extension of time at

_____________________________________________________________

5 To the extent there are arguments to be made that a materiality

requirement is inconsistent with strictissimi juris, or that adoption of

section 41 of the Restatement (Third) of Suretyship and Guaranty

requires us to overturn M.H. Walker and its progeny, we will leave

those arguments for another day and a different set of briefs.

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Opinion of the Court

11

issue here is “not of the nature or degree that would trigger a

discharge of” Cao’s duties under her agreement. See DiMeo, 2013 UT

App 188, ¶ 9 n.2. PC Riverview is thus entitled to enforce the

guaranty Cao signed.

II. The Court of Appeals’ Error in Not Addressing

Alternative Grounds for Affirmance Was Harmless

¶33 Cao argues that the court of appeals erred when it failed to

remand for further factual findings regarding whether her guaranty

covered only the original term of the lease and not any extensions.

She also contends that the district court erred when it admitted

evidence supporting a conclusion that PC Riverview had been

properly assigned interests in the lease it sought to enforce and, if

that document been excluded, there would have been no evidence

she was ever in privity of contract with PC Riverview. Cao

specifically argues that, “[a]lthough the Trial Court is granted great

discretion in admitting evidence, [it] abused its discretion in this

case.”

¶34 We begin by noting that the court of appeals did not

address these arguments before reversing. When a party raises

alternative grounds for affirmance, an appellate court “may affirm the

judgment appealed from” on “any legal ground or theory apparent

on the record.” Bailey v. Bayles, 2002 UT 58, ¶ 10, 52 P.3d 1158

(emphasis added) (citation omitted). When the court of appeals

reverses, and the appellant has briefed grounds for affirmance that

were preserved before the district court, the court of appeals must

deal with those arguments by either addressing or remanding them.

And although we could remand to the court of appeals so it can have

a go at these arguments, we are acutely aware that this is a $5,000

dispute that has now been through a trial, an appeal, and a petition

for certiorari. Because we can easily dispose of Cao’s alternative

grounds, we will address these issues rather than remand to the

court of appeals for additional proceedings.

¶35 Cao’s first argument is unpreserved. Our rules spell out a

preservation requirement, requiring “that an appellant’s brief

contain a ‘citation to the record showing that the issue was preserved

in the trial court; or a statement of grounds for seeking review of an

issue not preserved.’” Donjuan v. McDermott, 2011 UT 72, ¶ 22, 266

P.3d 839 (quoting UTAH R. APP. P. 24(a)(5)(A)–(B)). “[I]n order to

preserve an issue for appeal[,] the issue must be presented to the trial

court in such a way that the trial court has an opportunity to rule on

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that issue.” Pratt v. Nelson, 2007 UT 41, ¶ 15, 164 P.3d 366 (citation

omitted). An issue “must be specifically raised” “in a timely

fashion,” in addition to being supported by “evidence or relevant

legal authority.” Brookside Mobile Home Park, Ltd. v. Peebles, 2002 UT

48, ¶ 14, 48 P.3d 968 (citation omitted).

¶36 With respect to her first argument—that her surety

obligation expired with the original lease—Cao fails to cite any place

in the record demonstrating that she preserved this argument before

the district court. And, while we are not obligated to perform this

work for a party, our review of the transcript did not reveal any

mention of this argument. We find it unpreserved, and the court of

appeals’ failure to address it is therefore harmless.

¶37 Cao next argues that the court of appeals should have

affirmed because the district court erred when it admitted the

document assigning the lease to PC Riverview. Cao contends that if

the court had excluded the assignment, there would have been no

evidence she was ever in privity of contract with PC Riverview. At

trial, Cao pressed her argument that even with the assignment in

evidence, there was an insufficient factual basis to find that the lease

had been assigned to PC Riverview. Because it ruled for Cao on the

material modification issue, the district court opined that it did not

need to reach the assignment question. Cao raised this argument

before the court of appeals, but the court of appeals neither

addressed it nor remanded to permit the district court to resolve the

issue.

¶38 The court of appeals’ decision to not address the argument

did not harm Cao because the district court did not abuse its

discretion in admitting the assignment. Rule 901(a) of the Utah Rules

of Evidence provides that a “proponent must produce evidence

sufficient to support a finding that the item is what the proponent

claims it is.” The rule further states that “Testimony of a Witness

with Knowledge” “satisfies the requirement.” Id. 901(b)–(b)(1)

(describing such evidence as “[t]estimony that an item is what it is

claimed to be”). Furthermore, “[p]roper authentication does not

require conclusive proof but, instead, requires only that the trial

court determine that there is ‘evidence sufficient to support a

finding’” that the item is what the proponent claims it is. State v.

Woodard, 2014 UT App 162, ¶ 17, 330 P.3d 1283 (citation omitted); see

also UTAH R. EVID. 901(a), (b)(1); Pahl v. Comm’r, 150 F.3d 1124, 1132

(9th Cir. 1998) (concluding no abuse of discretion to admit document

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Opinion of the Court

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duplicate because witness who observed taxpayer sign original

provided adequate testimony to authenticate duplicate under

Federal Rule of Evidence 901(b)(1)); see 2 GEORGE E. DIX ET AL.,

MCCORMICK ON EVIDENCE § 222 (7th ed. 2013) (“Proof of

[a]uthorship” may be authenticated through “the production of a

witness who swears that he saw a specific person write and/or sign

the proffered writing. The testimony of a percipient witness satisfies

the requirement that evidence sufficient to support a finding be

presented. The witness may be anyone—the author or signer,

acknowledging execution; a person who simply observed the event;

or, a formal subscribing or attesting witness who must be called

before other witnesses may authenticate the writing.” (footnotes

omitted)).

¶39 At trial, the president of PC Riverview’s managing

member, Grace Mitchell, testified that Riverview Properties had

assigned its rights and obligations under the contract to PC

Riverview. Mitchell testified as to the authenticity of a document

that detailed an “assignment and assumption of leases that [were]

entered into when [PC Riverview] purchased the property” in 2006.

Cao objected to the document being entered into evidence because

no one from Riverview Properties testified about signing the

contract. Mitchell then testified as to the authenticity of Riverview

Properties’ signatures, claiming that the document was signed in her

presence. Cao offered no evidence impeaching Mitchell as a witness

or casting doubt as to the credibility of her testimony. The district

court admitted the document into evidence based on Mitchell’s

testimony.

¶40 Cao is correct that the rule “places the burden of

authenticating the document on the party seeking its admission.”

But PC Riverview met its burden when it offered Mitchell’s

testimony authenticating the document. Cao offered no evidence

suggesting that the assignment was not authentic. The district court

thus did not abuse its discretion in admitting a document that a

witness testified was what PC Riverview claimed it was. While the

court of appeals erred in failing to address Cao’s two alternative

grounds for affirmance, its error was harmless.6

_____________________________________________________________

6 Cao also argues on certiorari that even if the assignment were

properly admitted, it does not mention the guaranty, and that,

(continued . . .)

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Opinion of the Court

14

III. PC Riverview May Collect Attorney Fees

¶41 PC Riverview asks for “its Court costs and attorney’s fees,

including its costs and attorney’s fees incurred on appeal.” Cao’s

2003 lease assignment provided that, “[i]n the event of default under

any of the terms of this Agreement or the Lease, defaulting party

agrees to pay all costs incurred in enforcing this Agreement on the

Lease or any right arising [out] of the breach of either, and including

reasonable attorney’s fees.” Cao personally guaranteed the terms of

that contract. The 2006 lease assignment to Lin—which Cao also

personally guaranteed—contains identical language. The court of

appeals awarded attorney fees “in accordance with the terms of the

agreement entered into among [Lin], Cao, and the prior owner.” PC

Riverview LLC v. Cao, 2016 UT App 178, ¶ 8 n.4, 381 P.3d 1185. Cao

does not argue that PC Riverview is not entitled to fees if it prevails

before this court. Thus, under the terms of the contract, we award

reasonable costs and attorney fees “incurred in enforcing this

Agreement” in the district court and on appeal, and we remand to

the district court to determine what those reasonable costs are.

(continued . . .)

therefore, there was no proof before the district court that the

Guaranty had been assigned. Cao ignores Utah Rule of Appellate

Procedure 24(a)(5)(A), which requires a “citation to the record

showing that the issue was preserved in the trial court,” and fails to

indicate where in the record she preserved this argument. And,

again, even though we are not obligated to comb through the record,

we did and were unable to find this argument in the district court

record. We are generally not in the business of addressing

unpreserved issues. See In re Adoption of Baby E.Z., 2011 UT 38, ¶ 25,

266 P.3d 702 (“We . . . will generally not consider arguments that

litigants have failed to raise in the proceedings below.”).

Cite as: 2017 UT 52

Opinion of the Court

15

and attorney fees incurred by PC Riverview in the district court and

on appeal. We affirm the court of appeals’ decision.

¶42 A guarantor is relieved of her obligations under a guaranty

if the creditor and debtor materially modify the guaranteed

agreement. Here, the 2010 repayment agreement did not materially

modify the Lease. While the court of appeals erred in not addressing

Cao’s alternative grounds for affirmance, the error was harmless. We

remand to the district court solely to determine the reasonable costs

and attorney fees incurred by PC Riverview in the district court and

on appeal. We affirm the court of appeals’ decision