Hillcrest Inv. Co. v. Utah Dep't of Transp.

• Decision Date: 13 September 2012
• Docket Number: No. 20110322–CA.,20110322–CA.
• Citation: 717 Utah Adv. Rep. 34,287 P.3d 427,2012 UT App 256
• Parties: HILLCREST INVESTMENT COMPANY, LLC, Plaintiff and Appellant, v. UTAH DEPARTMENT OF TRANSPORTATION, Defendant and Appellee.
• Court: Utah Court of Appeals

287 P.3d 427

717 Utah Adv. Rep. 34

2012 UT App 256

HILLCREST INVESTMENT COMPANY, LLC, Plaintiff and Appellant,

v.UTAH DEPARTMENT OF TRANSPORTATION, Defendant and Appellee.

No. 20110322–CA.

Court of Appeals of Utah.

Sept. 13, 2012.

David L. Arrington, Erin T. Middleton, Josh D. Chandler, and Adelaide Maudsley, Salt Lake City, for Appellant.

Mark L. Shurtleff and Brent A. Burnett, Salt Lake City, for Appellee.

Before Judges McHUGH, DAVIS, and THORNE.

OPINION

McHUGH, Presiding Judge:

¶ 1 Plaintiff Hillcrest Investment Company, LLC (Hillcrest) appeals from the district court's summary judgment in favor of defendant Utah Department of Transportation (UDOT). The district court concluded that Hillcrest does not have standing to pursue its claims against UDOT and that even if Hillcrest does have standing, it cannot prevail as a matter of law on its breach of contract and unjust enrichment claims.¹ We reverse the summary judgment and remand for further proceedings to resolve the factual questions relating to Hillcrest's standing.

BACKGROUND ²

¶ 2 This dispute arises out of UDOT's 2001 condemnation of real property in Centerville, Utah (the Condemned Property), as part of the Legacy Parkway Project. The Condemned Property comprised about 43 of the approximately 150 unimproved acres (the Trust Property) held by the Namroh Trust, the Phares T. Horman Family Trust, the SCV Horman Family Trust (the SCV Trust), and the Theodore and Birdie Horman Family Trust (collectively, the Horman Trusts).

¶ 3 Prior to UDOT's condemnation, the Horman Trusts planned to develop a business park on a portion of the Trust Property (the Project Site). In pursuit of that goal, they had successfully changed the zoning of the Project Site and had obtained Centerville City's (the City) approval of their development plans. The Project Site could be accessed only by a gravel road (the Access Road) that circumvented wetlands, which constitute about one-third of the Trust Property.

¶ 4 When the Horman Trusts learned that UDOT's plans for the Legacy Parkway included condemnation of the portion of the Trust Property on which the Access Road was located, the Horman Trusts advised UDOT of their development plans and the need to access the Project Site. The City also expressed concern that the loss of the Access Road would interfere with the development of the business park, which was located on the largest undeveloped piece of real estate remaining in the City. In a letter dated October 28, 1999, UDOT represented to the City that its Legacy Parkway plans included a frontage road that would allow access to the Project Site. With that assurance and the Horman Trusts' permission, UDOT conducted an appraisal of the Trust Property. The appraisal report separated the Trust Property into four parcels and assigned each a parcel number. The Condemned Property is comprised of three of those parcels. The appraisal was premised on the assumption that UDOT would construct the frontage road. For example, the appraisal concluded that because “UDOT is going to install the roadway, at [its] expense,” no severance damages were needed to compensate the Horman Trusts for the diminution of value in the portion of the Trust Property not condemned (the Remaining Property). Relying, in part, on that conclusion, the appraisal set the appropriate compensation amount for the Condemned Property at $1.27 million.

¶ 5 In September 2001, UDOT filed a condemnation action against the Horman Trusts. The exhibits to UDOT's complaint included a map of the Legacy Parkway that depicts the proposed frontage road. During subsequent negotiations, UDOT represented that it would build a frontage road on one of the three condemned parcels, Parcel 0067:173:C (Parcel C), so that the Horman Trusts could pursue their pre-condemnation plans with respect to the Project Site. Eventually, UDOT and the Horman Trusts reached an agreement on the value of the parcels, based on the understanding that the Legacy Parkway project would include a frontage road.

¶ 6 As a result, in January 2002, the parties entered into a Right of Way Contract (the Contract), whereby UDOT agreed to purchase the Condemned Property “free and clear” from the Horman Trusts for $1,933,905. Although the Contract further provides that “all work done under this agreement, shall conform to [all applicable laws and codes] and shall be done in a good and workmanlike manner,” it states that, “[n]o work, improvement, alteration or maintenance will be done or made other than or in addition to that provided in this agreement.” The Contract also contains an integration clause, which provides,

The parties have here set out the whole of their agreement. The performance of this agreement constitutes the entire consideration for the grant of said tract of land and shall relieve [UDOT] of all further obligations or claims on that account, or on account of the location, grade and construction of the proposed highway.

Under the Contract, UDOT's obligation to pay the $1,933,905 settlement amount is triggered when UDOT takes possession of “Land as described in the Warranty Deed” for each of the three parcels, which are identified by their parcel numbers. There is no other description of the Condemned Property in the Contract.

¶ 7 On February 7, 2002, the trustee of each of the four Horman Trusts with an ownership interest in the Condemned Property, including Charles Horman as the trustee of the SCV Trust, executed warranty deeds for each of the three parcels, conveying their interests in the Condemned Property to UDOT. The warranty deeds for Parcel C convey “[a]n undivided ... interest in a parcel of land in fee for a frontage road incident to the construction of a freeway....” Subsequently, UDOT removed the Access Road.

¶ 8 In late 2005 and early 2006, the Horman Trusts conveyed all “real estate owned,” including the Remaining Property and other real property located in Utah, Nevada, and Kentucky, to Hillcrest. Around that time, UDOT reconsidered its plan to build the frontage road, despite urging from Hillcrest and the City. In January 2006, Hillcrest notified UDOT that a failure to build the frontage road would “most likely render [the Remaining Property] undevelopable” and would “be in breach of contract.” UDOT replied that due to “extensive litigation with the environmental community” and other delays involving the Legacy Parkway, it no longer intended to build the frontage road.³ Instead, UDOT proposed that the City install the frontage road and indicated in a 2007 letter, “After all appropriate environmental clearances[,] ... UDOT will make available a portion of the Legacy Parkway right-of-way for a frontage road.” While UDOT has not yet made a portion of the right-of-way available, it maintains that it will do so if the City obtains the “necessary environmental clearances” and “an approved development plan” for the frontage road. The record indicates that the City has not done so and that the Project Site is currently inaccessible.

¶ 9 On December 1, 2008, Hillcrest filed suit against UDOT in the Second Judicial District Court for Davis County, asserting claims of breach of contract and unjust enrichment. Hillcrest also sought a declaratory judgment that UDOT is contractually bound to construct the frontage road and an injunction for specific performance of that obligation.⁴ UDOT moved for summary judgment on the grounds that Hillcrest lacked standing because it was not a party to the Contract; that even if Hillcrest could establish standing, the Contract did not require UDOT to build the frontage road; and that Hillcrest could not prevail on a claim of unjust enrichment as a matter of law.

¶ 10 After oral argument, the district court granted UDOT's motion for summary judgment on all of Hillcrest's claims. Specifically, the court ruled that Hillcrest did not have standing to enforce the Contract; that even if it did have standing, the Contract did not require UDOT to build the frontage road; and that a cause of action based on unjust enrichment was precluded because Hillcrest, as opposed to the Horman Trusts, had conferred no benefit on UDOT. Hillcrest now appeals.

ISSUES AND STANDARD OF REVIEW

¶ 11 Hillcrest argues that the district court erred in granting summary judgment because material issues of fact exist as to whether it has standing, whether the Contract is ambiguous with respect to UDOT's obligation to build the frontage road, and whether UDOT was unjustly enriched. Summary judgment is appropriate where “(1) ‘there is no genuine issue as to any material fact’ and (2) ‘the moving party is entitled to a judgment as a matter of law.’ ” Poteet v. White, 2006 UT 63, ¶ 7, 147 P.3d 439 (quoting Utah R. Civ. P. 56(c)). We review a “district court's grant of summary judgment de novo, reciting all facts and fair inferences drawn from the record in the light most favorable to the nonmoving party.” Id.

ANALYSIS

I. Standing

¶ 12 “[A] determination of standing is generally a question of law, which we review for correctness.” Holladay Towne Ctr., LLC v. Brown Family Holdings, LLC, 2011 UT 9, ¶ 18, 248 P.3d 452 (internal quotation marks omitted). Because “standing is a jurisdictional requirement,” see Brown v. Division of Water Rights, 2010 UT 14, ¶ 12, 228 P.3d 747, we must consider it before reaching the substantive issues in a case, see In re K.F., 2009 UT 4, ¶ 21, 201 P.3d 985. Hillcrest, as the party invoking jurisdiction, bears the burden of establishing the elements of standing. See Brown, 2010 UT 14, ¶ 14, 228 P.3d 747 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). “Under the traditional test for standing, ‘the interests of the parties must be adverse’ and ‘the parties seeking relief must have a legally protectible interest in the controversy.’ ” See Jones v. Barlow, 2007 UT 20, ¶ 12, 154 P.3d 808 (quoting Jenkins v. Swan, 675 P.2d 1145, 1148 (Utah 1983)).

¶ 13 UDOT claims that...