Horman v. Clark, 860068-CA
| Decision Date | 27 October 1987 |
| Docket Number | No. 860068-CA,860068-CA |
| Citation | 744 P.2d 1014 |
| Parties | S.M. HORMAN as General Partner for Horman Construction Co., a Utah partnership and S.M. Horman, Jr., Plaintiffs and Appellants, v. S. Spence CLARK, as General Partner for Valley Shopping Center Associates, a Utah partnership, Defendants and Respondents. |
| Court | Utah Court of Appeals |
Before ORME, GARFF and DAVIDSON, JJ.
Plaintiffs/appellants S.M. Horman (Horman) and S.M. Horman, Jr. (Horman, Jr.) brought suit against defendant/respondent S. Spence Clark to recover damages for an alleged breach of contract. The lower court ruled that the Hormans had no cause of action, dismissing the suit. We affirm.
Horman owned a vacant tract of land north of and contiguous to the Valley Shopping Center, owned by Clark, in Murray, Utah. Clark had purchased the shopping center from Horman in 1970. Horman and Clark entered into an agreement which provided, in part, that Horman or his assigns were to have parking privileges in any public parking stalls in the parking lot at the rear of the Valley Shopping Center.
Even though this agreement was properly signed and acknowledged by September 1975, neither party immediately recorded it. Clark never recorded it, and Horman found it in his files nearly two years later, determined that it had not been recorded, and recorded it on January 12, 1978.
Meanwhile, on March 15, 1977, Clark conveyed his interest in the Valley Shopping Center to W. Meeks Wirthlin and his wife. The warranty deed conveying the center to the Wirthlins indicated that the property was subject to "easements, covenants, restrictions, rights of way, encroachments and reservations appearing of record or enforceable in law or equity." Clark did not inform the Wirthlins of Horman's parking rights on the property. The Wirthlins' warranty deed was recorded on March 15, 1977, nearly one year before Horman recorded his parking agreement. Because Horman's agreement had not yet been recorded, no mention was made of it in the Wirthlins' title report, and they were unaware of the agreement's existence. Subsequently, the Wirthlins sold their interest in the Valley Shopping Center to Arnold Development, which then sold it to G.G. Finlayson and Janet F. Griffin, who owned it at the time of trial.
When Horman finally recorded his agreement, he made no inquiry into the ownership status of the Valley Shopping Center and did not know of the subsequent sales. In 1980, he conveyed the property contiguous to the Valley Shopping Center to his son, Horman Jr., who commenced developing it for business purposes.
In July 1980, Horman Jr. obtained a building permit from Murray City and began constructing a twenty-unit commercial building. Finlayson, the new owner of the Valley Shopping Center, somehow learned of Horman Jr.'s apparent parking rights on his property, and requested an adjustment in the shopping center purchase price from Arnold Development.
Subsequently, on November 3, 1980, Finlayson's attorney notified Horman that any parking easement was ineffective against the Wirthlins and any subsequent purchasers because of the late recording of the agreement between Horman and Clark. On December 30, 1980, Horman asserted that the parking "easement" was valid in a letter to Finlayson's attorney.
In the following months, Murray City issued a stop order against Horman Jr.'s construction because he did not have sufficient parking space for his building to comply with Murray City ordinances. The Hormans, limited to 57% occupancy of the new building by Murray City, attempted to negotiate with Finlayson for use of parking spaces in the shopping center parking lot. Because these negotiations were unsuccessful, the Hormans filed this lawsuit on March 16, 1981, seeking lost profits and other damages resulting from the reduced occupancy of the building.
The trial court found that Clark had no duty to record the agreement, 1 and, therefore, the Hormans had no cause of action. We agree.
The Hormans argue that Clark had an implied contractual duty to disclose the parking agreement to the subsequent purchasers, nothwithstanding Utah Code Ann. § 57-3-3 (1986). That statute provides:
Effect of failure to record. Every conveyance of real estate hereafter made, which shall not be recorded as provided in this title, shall be void as against any subsequent purchaser in good faith and for a valuable consideration of the same real estate, or any portion thereof,...
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