Essex Holding, LLC v. Basic Props., Inc., S-17-0240

• Court: United States State Supreme Court of Wyoming
• Writing for the Court: FOX, Justice.
• Citation: 427 P.3d 708
• Parties: ESSEX HOLDING, LLC, Appellant (Plaintiff), v. BASIC PROPERTIES, INC., a Wyoming corporation Appellee (Defendant).
• Docket Number: S-17-0240
• Decision Date: 26 September 2018

427 P.3d 708

ESSEX HOLDING, LLC, Appellant (Plaintiff),
v.
BASIC PROPERTIES, INC., a Wyoming corporation Appellee (Defendant).

S-17-0240

Supreme Court of Wyoming.

September 26, 2018

Representing Appellant: Judith A.W. Studer, Schwartz, Bon, Walker & Studer, LLC, Casper, Wyoming.

Representing Appellee: Clark D. Stith, Stith Law Office, Rock Springs, Wyoming.

Before, DAVIS, C.J., and BURKE^* , FOX, KAUTZ and BOOMGAARDEN, JJ.

FOX, Justice.

¶1] Essex Holding, LLC (Essex) and Basic Properties, Inc. (Basic) each own lots in a shopping center subject to restrictive covenants. Basic requested Essex’s consent to amend the covenants to allow Basic to develop one of its lots. Essex refused, litigation ensued, and a jury awarded Basic $200,000 in damages. The district court also awarded attorney fees and costs to Basic. Essex filed post-trial motions which the district court denied, and Essex filed its appeal within 30 days of that denial. Essex challenges the verdict and damages award, along with several

[427 P.3d 713

of the district court’s rulings and orders. We affirm.

ISSUES

¶2] We restate and reorder the issues Essex has raised:

1. Did Essex timely file its Notice of Appeal?

2. Did Basic have standing to assert its counterclaim?

3. Did the district court err when it submitted Basic’s counterclaim for breach of contract to the jury?

4. Did jury instructions which rejected Essex’s theory regarding the void 1993 Amendment constitute plain error?

5. Did cumulative error result in an excess verdict or a verdict contrary to law?

6. Did the district court properly grant Basic’s motion for judgment as a matter of law on Essex’s anticipatory repudiation claim?

7. Did the district court err in its award of attorney fees and costs to Basic?

8. Did the district court properly deny Essex’s W.R.C.P. 60(b) motion?

FACTS

[¶3] Essex and Basic each own parcels of land in the Flaming Gorge Shopping Center in Green River, Wyoming, subject to restrictive covenants (the ECRs) recorded by the developer in 1975. The ECRs grant each parcel owner an access easement for the common areas, largely consisting of ingress and egress to the parking lot. They may be modified with the "written consent of all record owners of Parcels I, II, and III," which consent "shall not be unreasonably withheld."

[¶4] The developer attempted to modify the ECRs in 1993, before Essex and Basic acquired their parcels, in conjunction with subdividing Parcel II into Parcel II-A and Parcel II-B. The developer recorded a Modification and Amendment of Easements with Covenants and Restrictions Affecting Land on December 14, 1993 (1993 Amendment) for this purpose.

[¶5] Essex acquired Parcel I in 1999, and Basic acquired Parcel II-B in 1998, Parcel II-A in 1999, and Parcel III in 2003. In 2008, Basic enlarged and renamed Parcel II-B as Parcel II-D. In 2012, Basic sold Parcel II-A to David and Lynda Laughlin (Laughlins).

[¶6] On November 17, 2011, Basic contracted to sell Parcel II-D to O'Reilly Automotive Store, Inc. (O'Reilly) for the construction of an auto parts store. Basic and O'Reilly believed that the 1993 Amendment permitted construction of a building along the eastern boundary of Parcel II-D. In the spring of 2012, Basic and O'Reilly realized that there were access problems along the eastern boundary and wished to move the parcel’s building area to the southern boundary. The change would require further amendment of the ECRs.

[¶7] Around April 2012, Basic’s president, Don Johnson, contacted Essex’s managing member, Mark Langfan, to discuss amending the ECRs. On May 8, 2012, Basic’s attorney expressly requested Essex’s consent to amend the ECRs and provided a proposed written amendment to the 1993 Amendment.

[¶8] After receiving no response, Basic’s attorney made several phone calls and sent several follow-up emails to Essex on June 14, 19, and 27, 2012, and July 12, 2012, providing O'Reilly’s site plan, additional copies of the ECRs, prior amendments, and the proposed written amendment. Essex did not respond to any email and did not provide any substantive comments about the proposed development during any of the telephone calls.

[¶9] On July 2, 2012, O'Reilly’s realtor emailed photographs of the proposed development to Essex and requested Essex’s consent to the plan. Essex provided the photographs to its tenant and property manager, Ace Hardware, requesting its feedback. Ace Hardware informed Essex that the proposed O'Reilly building would benefit its business by increasing traffic to the shopping center.

[¶10] On August 13, 2012, Mr. Johnson emailed Essex requesting a time to discuss the amendment. Essex replied two days later, stating: "You only sent us some of the documents. Where are all of the easement

[427 P.3d 714

documents for the property?" Basic’s attorney re-sent copies of the ECRs and all amendments to Essex. Mr. Johnson explained that the proposed development would have little impact on Essex’s parcel and, instead, would increase traffic and the value of the parties' respective properties. Mr. Johnson offered to pay Mr. Langfan’s expenses to come to Wyoming to view the site.¹

¶11] On or about August 24, 2012, however, Essex discovered that the 1993 Amendment was missing a required signature and could be invalid. Thus, instead of responding to Mr. Johnson’s email, Essex informed Basic’s attorney of the missing signature. Basic’s attorney acknowledged that the 1993 Amendment did not contain a required signature, but continued to request Essex’s consent to amend the covenants:

As I mentioned in my prior email, I had thought that the putative 1993 Amendment (that I first sent to you on June 19, 2012) was valid, but it appears that perhaps it is not, because no representative from Parcel I signed it.

Please let us know under what conditions, if any, Essex Holding is willing to sign the proposed amendment .

(Emphasis added.)

[¶12] On September 6, 2012, having received no substantive response to Basic’s request, Mr. Johnson emailed Essex asking for help in understanding Essex’s reluctance to approve the amendment. Mr. Langfan replied, "I was given false information to begin with that I was obligated to the building area. Secondly, from the plan alone, the ingress is impeded by what would parking stalls on and out [sic] that I believe is dangerous." Essex retained an attorney, considered itself in "litigation mode," and remained unwilling to negotiate or sign any proposed amendment.

[¶13] On September 14, 2012, O'Reilly’s realtor informed Essex by email that a new proposed development option would be forthcoming. Essex responded the same day, stating:

The issue is there is no right to build to begin with. I was first incorrectly told there was a right, and was sent a false graphic depicting the false statement. Then, I had to do my own research which proved there wasn't any such right. Then, I discovered there was a false document recorded against my title. That document must be removed immediately.

The "false document" Essex referred to was the 1993 Amendment.

[¶14] Following this exchange, the attorneys for Basic and Essex continued to correspond. Basic’s attorney renewed Basic’s request for consent, reminding Essex’s attorney that the ECRs prohibited the unreasonable withholding of consent. Basic’s attorney urged Essex’s attorney to "clean up the record and make clear that building is allowed on this particular corner that is furthest from Essex Holding’s property." Essex’s attorney did not respond to the consent issue. Instead, he claimed that Basic breached the ECRs and asked Basic to remove the 1993 Amendment from the record. Basic’s attorney countered that Essex was in breach of the ECRs and not acting in good faith, and documented Basic’s attempts to secure Essex’s consent to an ECR amendment:

I called Mr. Langfan multiple times in May and June but could not get a response from him one way or the other. I sent follow up emails to Langfan on May 14, June 14, June 19, June 27, July 12 and August 1, 2012. As you are aware, Essex Holding initially took no position on the proposed new amendment and then ultimately refused to consent to any amendment that would allow construction on Parcel II-D. During a separate email exchange between Don Johnson and Mark Langfan on September 6, 2012, Langfan expressed concerns about ingress and egress.

Essex Holding has never given any coherent reason for refusing to sign the proposed amendment. Its claim that ingress and egress would be adversely affected is not well founded as O'Reilly Auto Parts

[427 P.3d 715

would be adding an additional ingress and egress point, thus improving not degrading access to the shopping center.

This letter provides notice that Essex Holding is in violation of Section 8(a) of the ECRs for its unreasonable withholding of consent to the proposed amendment to the ECRs that would allow construction of an O'Reilly Auto Parts store on Parcel II-D.

Essex’s counsel responded in writing by simply stating:

I have received your letter dated November 1, 2012, in which you make several assertions that Essex Holding, LLC rejects and which we will not take the time to respond to at this point. I will, however, reiterate that Essex Holding, LLC has valid and legitimate business reasons for withholding consent to modify the Easements with Covenants and Restrictions Affecting Land [ ].

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