Jackson Hole Racquet Club Resort v. Teton Pines Ltd. Partnership

• Decision Date: 13 October 1992
• Docket Number: No. 91-149,91-149
• Citation: 839 P.2d 951
• Parties: JACKSON HOLE RACQUET CLUB RESORT, Appellant (Defendant/Third-Party Plaintiff), v. TETON PINES LIMITED PARTNERSHIP, a Wyoming Limited Partnership, Appellee (Plaintiff), v. TETON PINES DEVELOPMENT COMPANY, a Wyoming Corporation, Appellee (Third-Party Defendant).
• Court: Wyoming Supreme Court

Page 951

839 P.2d 951

JACKSON HOLE RACQUET CLUB RESORT, Appellant (Defendant/Third-Party Plaintiff), v. TETON PINES LIMITED PARTNERSHIP, a Wyoming Limited Partnership, Appellee (Plaintiff), v. TETON PINES DEVELOPMENT COMPANY, a Wyoming Corporation, Appellee (Third-Party Defendant).

No. 91-149.

Supreme Court of Wyoming.

Oct. 13, 1992.

Joseph F. Moore, Jackson, Gregory C. Dyekman of Dray, Madison & Thomson, P.C., Cheyenne, for appellant.

William P. Schwartz of Ranck & Schwartz, Jackson, for appellees.

Before MACY, C.J., and THOMAS, CARDINE, URBIGKIT ^* and GOLDEN, JJ.

GOLDEN, Justice.

This case involves some rather complex and high level business dealings that affect two of the largest resorts in Jackson Hole. Appellant, Jackson Hole Racquet Club Resort, claims an exclusive right to perform certain property management functions for the two resort areas. Appellees, Teton Pines Limited Partnership and Teton Pines Development Company, counter that appellant has no such exclusive right. The district court found that a 1984 agreement which purported to grant appellant the exclusivity right at issue was not binding on the appellees and granted summary judgment for them.

We reverse.

Appellant raises these issues:

I. The district court erred in granting summary judgment to plaintiff when issues of material fact existed.

II. The district court erred in failing to find a binding contractual relationship between the parties.

III. The district court erred in failing to consider the importance of the notice that plaintiff had of the restrictions which are the subject of this dispute and in failing to recognize the existence of an equitable servitude.

IV. The district court's findings and conclusions were clearly erroneous in several respects.

Appellees respond with a markedly different perception of the issues:

I. Whether the district court properly construed the exclusivity provision at issue to relate unambiguously to the Aspens Subdivision and not to the separate and independent development of Teton Pines.

II. Whether the district court properly concluded that appellee is not a party to the 1984 lease containing the exclusivity provision and is not bound by its terms.

III. Whether the district court properly concluded that the exclusivity provision does not fulfill the requirements necessary for a covenant to run with the land.

The facts are complex, and this problem is compounded by appellees' muddying of the waters. The controversy concerns the two largest resort developments in Teton County, located four miles south of Teton Village on Wyoming Highway 390. "The Aspens" is a resort, development of which began in the 1960's and 1970's. "Teton Pines" is immediately adjacent to "The Aspens," but initial development of it did not commence until the mid-1980's. We now describe a series of "business deals" which ultimately led to the issues now posed before this court:

1. On August 25, 1980, Arthur E. Brown, Jr. (Brown) caused to be created a Wyoming corporation known as "The Jackson Hole Racquet Club Resort [appellant]." The purpose of this corporation was to serve as property manager for the improvements (homes, condominiums, etc.) located at "The Aspens." Brown was an officer, director and principal shareholder of this corporation.

2. On April 29, 1983, Brown caused to be created a Wyoming corporation known as "Lake Creek, Inc." He and his wife were the officers and directors of this corporation, and it served as the entity which owned, and was substantially responsible for, the further development of "The Aspens."

3. On February 21, 1984, the Teton County Commissioners conditionally approved Brown's application for a development permit. This permit is identified in the Teton County records as "Aspens II" and included the tract of land upon which "Teton Pines" is now located. Although Brown and his associates did not possess this latter tract of land at the time the permit was issued, they did have an option to purchase it.

4. On April 6, 1984, "Lake Creek, Inc." leased its office space in a building it owned in "The Aspens" to appellant. Certain provisions of this lease form the core of the controversy. On page 3 of this 19 page-long lease, this language is found:

3. USE OF PREMISES/RESTRICTIONS. The lessor hereby agrees that Lessee [appellant] may utilize the office for general office and administrative operations of Lessee in Lessee's property management, meeting, convention, seminar, banquet and resort business, and may utilize the conference space for meetings, conferences, conventions, banquets, seminars and other related uses.

Lessee [appellant] shall have the exclusive right to conduct property management, convention, meeting, seminar, hotel, motel, sleigh rides, and other similar operations from commercial premises located at The Aspens, including the Aspens as expanded from time to time on adjacent property presently owned by Skip Wright-Clark and Blake and Lee Vandewater (which is subject to an option in favor of Arthur E. Brown, Jr. or his affiliates), except as follows:

A. If the Aspens commercial area is expanded to such adjacent property, and Lessee determines that an expansion of Lessee's property management operations is desirable, then the parties will cooperate in good faith on the leasing of premises for a new, larger, first-class property management operation in the expansion area on terms which shall, unless otherwise agreed by the parties, be substantially the same per square foot rental (adjusted as appropriate for higher construction costs or financing costs, assuming 100% financing over 25 years at the conventional mortgage rates for construction of the new facilities) and other terms as this agreement, and this lease shall be revised to reflect the new location and the new terms.

B. If Lessee terminates this lease as to the conference facility (unless a new lease for a conference facility is being entered into concurrently therewith, for The Aspens or the Aspens as expanded), then this section shall no longer apply to meeting, seminar and convention facilities at the existing or expanded Aspens commercial area.

C. If Lessee ceases to provide property management services for all or any material portion of The Aspens or the expanded Aspens due to reasons other than force majeure, for a reasonable period of time (but not less than 60 days) after written notice of such failure including a specific request of Lessor that such services be provided, then the exclusive rights of Lessee with respect to these specific services shall cease.

D. This section shall not apply to a property maintenance operation undertaken by or on behalf of homeowners associations and not utilizing independent managers.

Neither the Lessee nor any of its principals, agents, servants, contract vendees, sublessees, concessionaires, employees, nor any other party whatsoever acting with the consent of Lessee, shall engage on the subject property, either directly or indirectly, in the brokerage or sale of real estate at The Aspens Subdivision, Teton County, Wyoming, (as expanded) during the terms of this lease, other than brokerage of rentals and real estate seminars and similar activities at the convention center.

The initial term of this lease ran from the date of signing until September 30, 1993, and could be renewed for two additional five year periods (or through September 30, 2003). The final paragraph of the lease, paragraph 32, provides: "The parties agree to execute a memorandum of this agreement which will be recorded with the Clerk of Teton County, Wyoming, for the purpose of putting the public on notice of the existence of the terms of this agreement."

Brown signed the lease for lessor in his capacity as President of "Lake Creek, Inc." and for lessee (appellant) in his capacity as President of Jackson Hole Racquet Club Resort. In addition to these two signatures, Brown endorsed a paragraph which appears on the signature page of the lease, entitled "Confirmation," and states: "The provisions of paragraph 3 of said Lease Agreement are hereby accepted and agreed to by the undersigned, on behalf of himself and his affiliates." Finally, Brown also signed another paragraph entitled "Confirmation," and which also appeared on the signature page of the lease, in his capacity as President of "Shooting Iron Development Company." That paragraph stated: "The provisions of said Lease Agreement are hereby accepted and agreed to by the undersigned parent company of Lessor [Lake Creek, Inc.]."

As provided in the lease, and accomplished on December 20, 1984, a "Memorandum of Agreement" was recorded in the records pertaining to the real estate on which Brown had an option and onto which he intended to expand "The Aspens," said memorandum declaring that "Lake Creek, Inc." has granted to appellant:

[T]he exclusive rights to conduct the following commercial activities at the Aspens I and Aspens II commercial areas in Teton County, Wyoming:

property management, convention, meeting, seminar, hotel, motel, sleighrides and other similar operations * * *.

5. Also on April 6, 1984, the date on which the lease was signed, Brown sold his controlling interest in appellant to Burt Myrin and Phil Warner.

6. On April 16, 1984, Brown caused to be created yet another company, "Lake Creek Development Company," a Wyoming Corporation. Its purpose was to take title to the property on which Brown and his associates had an option (see paragraph 3, above). On July 27, 1984, the property under option was conveyed to "Lake Creek Development Company." Brown was also President and a director of that corporation.

7. Also on July 27, 1984, "Lake Creek Development Company" deeded all but 25 acres of the property acquired that day to "Jackson Hole Racquet Club Limited Partnership," yet another entity formed by Brown and this one for the purpose of developing the property just acquired. The 25-acre parcel retained by Lake Creek Development...