Utah Court of Appeals Hears Family Estate Dispute Over Oral Agreement and Whether Threatened Suit Was Consideration

SALT LAKE CITY — The Utah Court of Appeals on oral argument scrutinized whether a trial court properly found an oral agreement in which a sibling promised to split estate proceeds to avoid litigation, and whether the lower court’s findings gave enough factual detail to allow appellate review.

Clayton Preece, counsel for appellant Maine Mortensen, told the three-judge panel that the central issues are “whether the trial court erred in finding an oral agreement when consideration was unspoken, unwritten, and was not bargained for” and whether the district court omitted essential contract terms required for enforcement.

Justin James, counsel for appellees Matt and McKay Mortensen, countered that Judge Howell’s factual findings — including that Maine offered to split “liquid proceeds as well as any proceeds derived from real property” and that family members discussed and accepted the arrangement — establish a benefit to Maine and performance by the brothers sufficient for consideration. James noted the family has litigated the same land for generations and described testimony that the will reading prompted discussions about potential legal claims.

The panel’s questioning focused on three recurring points: (1) whether a court should examine the underlying merits of a potential suit (a “good faith” or “meritorious” inquiry) to determine whether forbearing from suit constitutes consideration; (2) whether the district court’s findings were detailed enough on timing, offer and acceptance to permit appellate review; and (3) whether proceeds from a 1031 exchange (referred to in the record as a “10 31” exchange) are sufficiently “liquid” to trigger entitlement under the alleged agreement.

Appellant’s counsel urged that contract law requires a manifested bargain for exchange — not merely an undisclosed intent — and criticized the trial court’s findings as one-sided and lacking specific factual determinations about when any offer or acceptance occurred. Counsel cited the Restatement and related case law in arguing that mutual, manifest acceptance is necessary to form an enforceable contract.

Appellees’ counsel said the record contains testimony from multiple family members indicating conversations about avoiding litigation and that the brothers performed conduct consistent with acceptance. He argued that recognizing the benefit Maine received (avoiding litigation) is a sufficient basis for consideration and warned that requiring an explicit finding of good faith in every settlement would create an impractical precedent.

The panel also explored practical details of the disputed transactions: multiple real-estate purchase contracts (REPCs), an escrow account at Zions Bank, and use of a 1031 exchange to defer capital gains — facts the judges said could affect whether proceeds were “liquid” and therefore distributable under the alleged agreement. Counsel disagreed about whether the mechanics of the exchange meant proceeds were never realized for distribution.

After extended questioning and a brief rebuttal, the panel said it would take the matter under advisement and issue a written decision. No vote or disposition was announced at argument.

The Court allowed 15 minutes per side for argument, with five minutes allocated for rebuttal; counsel used the time to address both doctrinal precedent and specific trial-record citations. The Court’s written opinion will determine whether the trial court’s findings permit enforcement of the alleged oral agreement and whether additional factual findings are required for appellate review.