Anderson Development Co. v. Tobias
| Decision Date | 14 June 2005 |
| Docket Number | No. 20030690.,No. 20030469.,20030469.,20030690. |
| Parties | ANDERSON DEVELOPMENT COMPANY, L.C., a Utah limited liability company, Plaintiff and Appellee, v. Janalee S. TOBIAS, an individual, Judy Feld, an individual; Save Our South Jordan River Valley, Inc., a Utah corporation, dba SOS and Save Open Spaces; Brent Foutz; and Jane and John Does 1 through 20, inclusive, Defendants and Appellants. |
| Court | Utah Supreme Court |
D. Miles Holman, Jeffrey N. Walker, Peter C. Schofield, Sandy, for appellee.
Dale F. Gardiner, Douglas J. Parry, Jennie B. Garner, Salt Lake City, for appellants.
¶ 1 This appeal arises from a dispute over a proposed commercial development near the Jordan River. When defendants Janalee Tobias and Judy Feld ("Tobias and Feld") formed an entity to organize opposition to the development, the developer, Anderson Development Company ("ADC"), filed suit for intentional interference with economic relations. Tobias and Feld, in turn, filed multiple counterclaims. After the district court entered several orders adverse to Tobias and Feld, they sought permission to pursue two interlocutory appeals, which we granted. For reasons detailed below, we reverse in part and affirm in part.
¶ 2 In 1996, ADC initiated efforts to develop a commercial project near the Jordan River known as the RiverPark Business Park. To secure the site for the proposed development, ADC began entering into real estate purchase contracts with owners of property located along the Jordan River. In October 1996, ADC entered into one such contract with Boyd and Dorothy Williams (the "Williamses"). Under its contract with the Williamses, ADC's purchase obligation was subject to several contingencies, including the "[s]uccessful completion of . . . masterplanning and zoning" amendments, which, if not satisfied or waived by ADC by June 30, 1997, would result in the expiration of the contract. In accordance with these terms, ADC filed, as agent of the Williamses, an application for a master plan and zoning change with South Jordan City.
¶ 3 Tobias and Feld, residents of South Jordan City, strongly opposed ADC's proposed development and actively protested against any zoning change, urging the City and its residents to "Save our South Jordan River Valley." As part of their opposition, Tobias and Feld voiced their concerns both to the property owners who had entered into real estate purchase contracts with ADC and to the South Jordan City Council ("City Council"), the entity responsible for acting on ADC's zoning application.
¶ 4 Tobias and Feld's active opposition to the project began shortly after they received notice that South Jordan's Planning and Zoning Commission ("Commission") would consider ADC's zoning application during a meeting scheduled for November 20, 1996. On November 18, 1996, Tobias and Feld met with other South Jordan City residents to strategize regarding how best to squelch ADC's proposed zoning application and to form an organization known as "SOS," or "Save our South Jordan River Valley," to actively oppose the development. Two days later, Tobias, Feld, and other like-minded residents of South Jordan attended the Commission's meeting to express their opposition to the proposed zoning changes. The meeting lasted several hours, and many of the nearly ninety residents who attended the meeting addressed ADC's development project. At the conclusion of the meeting, the Commission voted on ADC's application. The vote was split, with two members of the Commission voting in favor of the zoning change and two opposing the change. Consequently, the Commission sent the matter to the City Council for the purpose of taking public comment.
¶ 5 To prepare for the City Council meeting, Tobias, Feld, and other SOS members distributed fliers to South Jordan residents to raise awareness of, and encourage opposition to, the project. Additionally, they voiced their concerns to the offices of several politicians, including that of then-Governor Michael Leavitt, and to several representatives of organizations dedicated to the preservation of open space, including Wendy Fisher of Utah Open Lands. Tobias and Feld also met with other South Jordan City residents, including the Williamses, to discuss alternatives to the proposed development. ADC alleges that, during these meetings with the Williamses, Tobias and Feld repeatedly urged the Williamses to breach their real estate purchase contract with ADC.
¶ 6 On the day of the scheduled City Council meeting, December 17, 1996, Tobias and Feld received a letter from ADC, stating, in part:
We recognize that you have rights to speak out about this project. However, your rights are not without limit. Your efforts to interfere with our contractual relationships and with an effort to delay our due process at South Jordan City clearly extend beyond the limits of the law. We will respect your rights but will insist that you respect our rights also. Any effort by you or anyone else to interfere with any [of] our rights may subject each person involved to the possibility of litigation and the payment of damages. Damages literally could be in the millions of dollars.
¶ 7 Despite ADC's warning, Tobias and Feld attended the City Council meeting, where they, along with other members of SOS, protested the proposed development. At the conclusion of the meeting, the City Council decided to delay any vote on ADC's application until a subcommittee could review the issues and provide a recommendation.
¶ 8 On April 28, 1997, on the recommendation of the City Administrator, the City Council voted to approve ADC's application for a zoning change for all properties that ADC had under contract, with the exception of the Williamses' property. The City Council postponed any zoning decision on the Williamses' property, due, in part, to Tobias and Feld's request for additional time to raise funds to purchase that land. As a result, the City Council failed to act on the zoning changes for the Williamses' property by June 30, 1997, the date specified in the real estate purchase agreement for meeting the zoning contingency. Because ADC elected not to waive the zoning contingency, its real estate purchase contract with the Williamses expired.
¶ 9 After the expiration of the real estate purchase contract, Tobias and Feld informed the Williamses that they had undertaken efforts to raise funds to purchase the land so that it could be preserved as open space. As a result of these efforts, the Williamses received several inquiries regarding the possible purchase of their land. One such inquiry was from Wendy Fisher of Utah Open Lands. Other "expressions of interest" came from Jim Davis, a representative of the Trust for Public Lands, and Salt Lake County Commissioners Randy Horiuchi and Brent Overson.
¶ 10 Despite these "expressions of interest," the Williamses received no written offers to purchase their land. The only offer they received was an oral one from Ms. Fisher, on behalf of Utah Open Lands, to match any offer made by ADC. The Williamses continued to negotiate with ADC and, on November 25, 1997, entered into a second real estate purchase contract with ADC. This contract, like the first, was conditioned on a successful zoning change. However, the Williamses used the expressions of interest in their land as leverage to successfully negotiate a contract with ADC that was more favorable to them than the first. Specifically, the second contract increased the purchase price by more than $175,000 and contained additional restrictions on the land, including use restrictions, a restriction on the height of any buildings to be constructed, and a ten-foot right-of-way. ADC asserts that these changes increased its cost by more than $1,000,000.
¶ 11 After entering into the second real estate purchase contract with the Williamses, ADC assigned its interest in the contract to LakeView Farms with the understanding that ADC would share in the profits derived from the purchase of the land. The City Council voted to approve ADC's zoning application with respect to the Williamses' property on March 11, 1998, and the sale of the property closed on April 17, 1998.
¶ 12 On March 17, 1998, ADC filed suit against Tobias, Feld, SOS, and others,1 alleging that they had intentionally interfered with ADC's prospective economic relations and existing contractual relations. ADC's complaint alleged two causes of action against Tobias and Feld. In its first cause of action, ADC asserted that Tobias and Feld used improper means to intentionally interfere with its potential economic relations by falsely representing to the Williamses that they could sell their land for a price higher than that offered by ADC if they sold to an individual or organization willing to preserve the land's open space. In its second cause of action, ADC alleged that Tobias and Feld "wilfully and recklessly contacted [the Williamses] in attempts to induce [them] to not sell the Subject Property" to ADC while the first real estate purchase contract was in effect, thereby interfering with ADC's existing contractual relations. Additionally, ADC constructively amended its complaint through subsequent motions, as discussed below, to plead a third cause of action. In this cause of action, ADC claimed that Tobias and Feld intentionally interfered with its existing economic relations by petitioning the City Council to delay the zoning decision on the Williamses' property so that Tobias and Feld would have time to seek funding to purchase the land themselves and that this delay resulted in the expiration of ADC's first contract with the Williamses. On the basis of these alleged wrongdoings, ADC petitioned the district court to enjoin Tobias and Feld from any further interference with its contractual and economic relations.
¶ 13 On April 21, 1998, Tobias and...
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