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WebBank v. American General Annuity Service Corp.8/16/2002
t of a final, non-appealable court order determining that WebBank had a security interest in the structured settlement payments as collateral for the purported loan. It also required that payments on the purported loan be made directly from American General to WebBank, thus by-passing Soliz. That financial transaction and its underlying security agreement are the subject of this appeal.
PROCEDURAL HISTORY
Sometime between November 1999 and April 2000, WebBank, for itself and on behalf of Soliz, commenced a declaratory judgment action seeking a judicial determination pursuant to the conditions precedent required in the security agreement.
WebBank and American General filed cross-motions for summary judgment. On August 18, 2000, the trial court granted partial summary judgment in favor of WebBank, denied American General's motion for summary judgment, and permitted further discovery focused on the discrete and, in the trial court's view, dispositive issue of whether the financial transaction between WebBank and Soliz was a loan or a sale. After further discovery, WebBank and American General renewed and re-briefed their motions for summary judgment. On November 13, 2000, the trial court granted summary judgment in favor of WebBank on the remaining issue of whether the financial transaction between WebBank and Soliz should be considered a loan or a sale, concluding that there were no genuine issues of material fact and that the transaction or transfer was a matter of law a loan instead of a sale or an assignment. American General timely appealed.
On appeal, American General argues that the trial court erred in concluding as a matter of law that the financial transaction between WebBank and Soliz was a loan and not a sale because the question of whether the parties to a particular transaction, such as the one in this case, intended to create a loan or a sale is a question of fact to be resolved by the trier of fact, therefore precluding the grant of summary judgment. In addition, American General asserts that, despite the lack of any ambiguity in the terms and provisions of the security agreement and promissory note, the nature and character of the transaction as a whole is ambiguous, and that the existence of such an ambiguity as to WebBank's and Soliz's true intent regarding the nature or character of the transaction should have precluded the trial court's grant of summary judgment. Alternatively, American General argues that, even if the trial court did not err in concluding that the transaction in question was a loan, it did err by concluding that Article 9 of the UCC governed the transaction and that the "tort exemption" and/or the "insurance and annuity exemption" of Article 9 of the UCC, codified at Utah Code Ann. ยง 70A-9-104(k) and -104(g) (1997) respectively, did not apply to the transfer of Soliz's structured settlement payments to WebBank.
WebBank counters that the trial court correctly held that as a matter of law WebBank and Soliz intended to create a security interest in favor of WebBank in the structured settlement payments through their security agreement and related promissory note. WebBank argues that the trial court could properly decide this issue as a matter of law because the trial court needed only look to the four corners of the unambiguous security agreement and promissory note executed between WebBank and Soliz to determine that WebBank and Soliz intended to create a security interest in the structured settlement payments, and consequently, a secured transaction subject to Article 9 of the UCC. Furthermore, WebBank contends that the trial court was correct in concluding that Article 9 of the UCC governed the transaction and tha
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