WebBank v. American General Annuity Service Corp.8/16/2002
e Trust, 972 P.2d 411, 413 (Utah 1998)).
WebBank and Soliz effectuated the financial transaction in question through various documents, including a security agreement and a promissory note. A security agreement is a contract that is interpreted according to the well-settled rules of contract construction. 68A Am. Jur. 2d Secured Transactions § 163 (1993); Ronald A. Anderson, 8A Anderson on the Uniform Commercial Code § 9-203:51 (3d ed. 1996). The same is true for a promissory note. 10 C.J.S. Bills and Notes § 79 (1995) ("The rules of construction applicable to contracts are applicable to bills and notes.").
The underlying purpose in construing or interpreting a contract is to ascertain the intentions of the parties to the contract. Peterson v. Coca-Cola USA, 2002 UT 42, 9, 48 P.3d 941; SME Indus., Inc. v. Thompson, Ventulett, Stainback & Assocs., Inc., 2001 UT 54, 14, 28 P.3d 669. "'In interpreting a contract, the intentions of the parties are controlling.'" Dixon v. Pro Image, Inc., 1999 UT 89, 13, 987 P.2d 48 (quoting Winegar v. Froerer Corp., 813 P.2d 104, 108 (Utah 1991)); see also Peterson v. Sunrider Corp., 2002 UT 43, 18, 48 P.3d 918. Moreover, specifically in the context of interpreting a security agreement, " he controlling factor in determining whether a transaction is in fact a security transaction or an absolute sale is the intent of the parties . . . ." 79 C.J.S. Secured Transactions § 24 (1995); see also 68A Am. Jur. 2d Secured Transactions § 5 (" he principal test for determining whether there is a secured transaction under Article 9 is the intent of the parties; that is, the test for determining whether a transaction is a secured transaction governed by Article 9 is whether the parties intended the collateral to secure the payment or performance of an obligation.").
In interpreting a contract, "' e look to the writing itself to ascertain the parties' intentions, and we consider each contract provision . . . in relation to all of the others, with a view toward giving effect to all and ignoring none.'" Jones, 2000 UT 61 at 12 (quoting Plateau Mining Co. v. Utah Div. of State Lands & Forestry, 802 P.2d 720, 725 (Utah 1990) (further quotation omitted)); see also Cent. Fla. Invests., Inc. v. Parkwest Assocs., 2002 UT 3, 12, 40 P.3d 599; Dixon, 1999 UT 89 at 14.
"If the language within the four corners of the contract is unambiguous, the parties' intentions are determined from the plain meaning of the contractual language, and the contract may be interpreted as a matter of law." Cent. Fla. Invests., Inc., 2002 UT 3 at 12; see also Sunrider Corp., 2002 UT 43 at 18; Dixon, 1999 UT 89 at 13; Winegar, 813 P.2d at 108. However, if the language of the contract is ambiguous such that the intentions of the parties cannot be determined by the plain language of the agreement, "extrinsic evidence must be looked to in order to determine the intentions of the parties." Cent. Fla. Invests., Inc., 2002 UT 3 at 12; see also Sunrider Corp., 2002 UT 43 at 18; Coco-Cola USA, 2002 UT 42 at 9; SME Indus., Inc., 2001 UT 54 at 14. If a contract is ambiguous, the court may consider the parties' actions and performance as evidence of the parties' true intention. See Plateau Mining Co., 802 P.2d at 725.
An ambiguity exists in a contract term or provision "if it is capable of more than one reasonable interpretation because of 'uncertain meanings of terms, missing terms, or other facial deficiencies.'" SME Indus., Inc., 2001 UT 54 at 14 (quoting Winegar, 813 P.2d at 108 (further quotation omitted)); see alsoSunrider Corp., 2002 UT 43 at 19; Coca-Cola USA, 2002 UT 42 at 9; Cent. Fla. Invests., Inc., 2002 UT 3 at 12.
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