Brodkin v. Tuhaye Golf, LLC

Decision Date25 June 2015
Docket NumberNo. 20130548–CA.,20130548–CA.
PartiesTerry B. BRODKIN, Plaintiff and Appellant, v. TUHAYE GOLF, LLC; Ameagle PC Holdings, Inc. ; Park Premier Mining Co.; Robert W. Dunlap ; and Kathy Dunlap, Defendants and Appellees.
CourtUtah Court of Appeals

Steve K. Gordon and Jarom B. Bangerter, Park City, for Appellant.

Stephen J. Hill, Salt Lake City, Attorney for Appellees Park Premier Mining Co., Robert W. Dunlap, and Kathy Dunlap, Clark K. Taylor and Nicole M. Deforge, Salt Lake City, for Appellees Tuhaye Golf, LLC and Ameagle PC Holdings, Inc.

Judge J. FREDERIC VOROS JR. authored this Opinion, in which Judges JAMES Z. DAVIS and JOHN A. PEARCE concurred.

Opinion

VOROS, Judge:

¶ 1 Terry B. Brodkin appeals from the district court's grant of summary judgment in favor of Tuhaye Golf LLC; Ameagle PC Holdings Inc.; Park Premier Mining Co.; and Robert and Kathy Dunlap (Defendants). The district court ruled as a matter of law that Brodkin was not an intended third-party beneficiary of a contract that did not mention him or purport to bestow any benefit on him. We affirm.

BACKGROUND

¶ 2 This case concerns approximately fifty-two acres of real property overlooking Jordanelle Reservoir in Wasatch County. Brodkin now owns the property, but for some seventy-five years Progress Corporation owned the property, which the parties, the district court, and now we refer to as the Progress Parcel.

¶ 3 In the early 1990s, the federal government condemned most of the land down-slope from the Progress Parcel to create Jordanelle Reservoir. The completed reservoir inundated the Progress Parcel's only road access. The United States government compensated Progress Corporation, and Progress “release[d] and relinquish[ed] to the United States any and all easements or rights of way or access to [the Progress Parcel] ... taken by reason of the acquisition of land by the United States for the construction, maintenance, and operation of the Jordanelle Dam and Reservoir project.” The Progress Parcel thus became landlocked, surrounded by property owned by Defendants and their predecessors-in-interest in a development known as Area B.

¶ 4 In the late 1990s, defendant Robert Dunlap, who owned property within Area B, attempted to contact other Area B property owners to coordinate a development plan for the area. Dunlap successfully identified all the owners except Progress Corporation. In 1999, Dunlap and the other Area B owners (except Progress Corporation) formed EastSide Group LLC and executed an operating agreement. The Operating Agreement defines the “Members” of EastSide as the Operating Agreement's original signatories and “such other persons or entities as shall from time to time join in the execution hereof.” Progress Corporation never executed the Operating Agreement.

¶ 5 The Operating Agreement specifies that EastSide's purpose, among other things, is, [t]o engage in real estate development activities, including, but not limited to, planning, developing, installing and owning the infrastructure (such as water, sewer and roads) to serve real property in the Jordanelle Basin.” The Operating Agreement expressly disclaims any third-party rights or benefits:

None of the provisions of this Agreement shall be construed as conferring, or allowing, any rights or benefits upon or to any third party (including, but not limited to, the holder of any obligation secured by any real or personal property of [EastSide] or any portion thereof or interest therein, or any other creditor of [EastSide] or of any Member).

The Operating Agreement also requires each Member to “irrevocably covenant [ ] to grant utility and road easements across their property in Area B to [EastSide], and solely for the benefit of its Members, at no cost,” for the development of Area B. Finally, the Operating Agreement requires each Member “to execute a separate written agreement containing this covenant” and to record that separate writing to “give notice that the Members' property in Area B shall be subject to such easements in the future.”

¶ 6 In 2001, certain Area B property owners executed another agreement (the Area B Agreement). The Area B Agreement defines “Area B Landowners” as: Intell Utah LLC; the United States Bureau of Land Management (BLM); Exchange Lands Management Company LLC; Debra Taylor Miller, Lisa Taylor-Anani, Christian Tuft, Tamara Hokanson, and Jody K. Tuft (collectively, Taylor/Tuft); Robert and Kathy Dunlap (the Dunlaps); and Park Premier Mining Co. Each signed the Area B Agreement. The Area B Agreement did not name Progress Corporation as an Area B Landowner, nor did Progress sign the Area B Agreement. Indeed, the signatories were unaware that Progress Corporation owned property within Area B.

¶ 7 The Area B Landowners owned separate parcels within Area B. In one provision of the Area B Agreement, the parties grant each other reciprocal access easements:

The parties to this Agreement hereby agree to grant to each other reciprocal, permanent, non-exclusive ingress and egress easements....
As stated herein, the parties to this Agreement have agreed to grant necessary easements to provide access to, from and betweenthe parcels owned by the Area B Landowners....

The Area B Agreement includes a map attached as Exhibit A, showing generally each signatory's parcel. The map does not identify the Progress Parcel or otherwise reflect that Progress Corporation owned any property within Area B. The Progress Parcel lies within a parcel the map identifies as owned by Taylor/Tuft.

¶ 8 The Area B Agreement also includes a provision for attorney fees. The provision states, “Except as otherwise provided herein, any party to [the Area B Agreement] may enforce this Agreement by legal action and if that party prevails, it shall recover costs and reasonable attorney's fees.”

¶ 9 Before Brodkin offered to buy the Progress Parcel, he obtained a title report. The title report noted that the Progress Parcel may lack road access. The seller also informed Brodkin that if he wanted “egress [and] ingress, you're going to have to work it out.” Before Brodkin purchased the Progress Parcel he approached Taylor/Tuft in an effort to acquire access to the Progress Parcel. Taylor/Tuft never executed any agreement granting Brodkin the access he sought. Brodkin then reviewed the Operating Agreement, the Area B Agreement (including the Exhibit A map), and the Wasatch County Master Plan for Area B. Based on his review, Brodkin concluded that the Progress Parcel had road access. In April 2004 he bought the Progress Parcel for approximately $290,000.

¶ 10 Sometime after the Area B Landowners executed the Area B Agreement, Tuhaye Golf LLC acquired the Intell and Taylor/Tuft parcels. Tuhaye thereafter executed an agreement with some of the remaining Area B Landowners (the 2004 Agreement). In the 2004 Agreement, [t]he parties acknowledge and agree that the [Area B Agreement] was intended to grant and provide reciprocal easements over properties owned by ... Tuhaye[ ] and other parties to the [Area B Agreement].” Therefore, the parties to the 2004 Agreement “clarify, confirm, and grant the easements ... referred to and provided and to provide for and implement the other terms and conditions hereof and of the [Area B Agreement].” Brodkin, by then the owner of the Progress Parcel, was not a party to the 2004 Agreement.

¶ 11 In the next few years, Brodkin received at least two offers to purchase the Progress Parcel, each at a price exceeding ten-fold what he paid for it. In 2006, Brodkin received an offer from Optimum Investments LLC to purchase the Progress Parcel for $5 million (the Optimum Offer). Brodkin asserts that the Optimum Offer failed because it was orally conditioned on Brodkin's acquiring access to the Progress Parcel from the surrounding landowners. However, no express condition to this effect appears in the written Optimum Offer.

¶ 12 In April 2007, Brodkin received an offer from Tracy Roth for $5.5 million. The Roth offer was “not contingent on any resolution of easement issues.” In a letter from Roth to Brodkin summarizing his offer, Roth acknowledged and accepted the Progress Parcel's access issues:

From what I have been told, the easement issue has been a thorn in the side of the sale of this property. We are comfortable removing any ingress/egress issues for two simple reasons. First, our intentions are to land-bank this property. Second, if we felt the need to sell in the immediate future, the only party we would consider would be Talisker. Therefore, the easement issues to us are not important enough to delay purchase of this property. Yes, we would like to see them resolved eventually so we can keep our options open; however, we are comfortable extending an offer excluding the resolution of those issues.

Though Brodkin accepted Tracy Roth's offer, the sale never closed. Brodkin eventually “let him walk” based on lack of access because [i]t wouldn't be otherwise fair or just.”

¶ 13 Shortly after the Roth sale fell through, Brodkin sued Defendants. In his complaint, Brodkin alleged four claims for relief: (1) a declaratory judgment that he is a third-party beneficiary to the Area B Agreement; (2) breach of contract, i.e., breach of the Area B Agreement; (3) easement by necessity; and (4) condemnation. Defendants answered and moved for a judgment on the pleadings on all claims. The district court denied Defendants' motion with respect to Brodkin's first and second claims, but granted the motion with respect to Brodkin's third and fourth claims.1

¶ 14 Defendants later moved for summary judgment on the declaratory relief and breach of contract claims. The district court granted Defendants' motion. The district court ruled, in relevant part, that the Area B Agreement did not clearly and intentionally confer any third-party benefits on Brodkin. The district court then ruled, in the alternative, that even if Brodkin or Progress Corporation were intended third-party beneficiaries to the Area B...

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