Keith v. Mounta Resorts Dev., L.L.C.

• Citation: 337 P.3d 213,2014 UT 32
• Decision Date: 08 August 2014
• Docket Number: No. 20120792.,20120792.
• Court: Supreme Court of Utah
• Parties: Betty KEITH, Appellant and Plaintiff, v. MOUNTAIN RESORTS DEVELOPMENT, L.L.C., a Delaware limited liability company, et al., Appellee and Defendant.

337 P.3d 213
2014 UT 32

Betty KEITH, Appellant and Plaintiff
v.
MOUNTAIN RESORTS DEVELOPMENT, L.L.C., a Delaware limited liability company, et al., Appellee and Defendant.

No. 20120792.

Supreme Court of Utah.

Aug. 8, 2014.

337 P.3d 216

Denise A. Dragoo, Elisabeth M. McOmber, Robert E. Mansfield, Salt Lake City, for appellant.

John A. Snow, Nicole M. Deforge, Kelley M. Marsden, Salt Lake City, for appellee.

Associate Chief Justice NEHRING authored the opinion of the Court, in which Chief Justice DURRANT, Justice DURHAM, Justice PARRISH, and Justice LEE joined.

Associate Chief Justice NEHRING, opinion of the Court:

INTRODUCTION

¶ 1 This case is about land in Park City, Utah—a little town that has undergone many transformations. Mormon pioneers first traveled through the area on their way to Salt Lake City. When prospectors discovered silver in the hills, it became a mining boomtown, then, when the price of silver fell, it was nearly deserted as a ghost town—but industrious residents reinvented it as a luxury resort destination, which it remains today. At the heart of this appeal is a dispute about land once owned by one of the original Park City mining magnates—appellant's great-grandfather, Mr. David Keith—who along with Mr. Thomas Kearns founded the highly successful Silver King Mining Company in Park City in the 1890s. The property that gave rise to this dispute is located near what is now the luxury ski resort Deer Valley. Appellant, Ms. Betty Keith, and her two siblings, Ms. Geneva Keith Ulm and Mr. David Keith IV, inherited the parcels of land at issue from their father, Mr. David Keith III. Following the bequest, the siblings owned the relevant parcels as tenants in common with each other and with United Park City Mines (UPCM).

¶ 2 After Ms. Keith inherited the property in 1996, she and UPCM decided to jointly develop the parcels. In 2002, the parties submitted a development plan to the county, which was approved. UPCM was later acquired by Talisker Corporation, Mountain Resort Developments' (MRD) parent company. Unfortunately, MRD and Ms. Keith could not agree how to jointly develop the property, nor could they agree on a purchase price for Ms. Keith's interest in the parcels. In 2005, after several years of unsuccessful negotiation, MRD filed an action to partition the property. The parties ultimately entered a settlement agreement (2005 settlement agreement) and exchanged interests in the parcels. Ms. Keith gained an undivided interest in parcel A and MRD received an undivided interest in parcels B and C. Thereafter, MRD asserted that Ms. Keith had retained no development rights under the development plan. Ms. Keith sued for breach of contract, fraudulent inducement, and tortious interference with prospective economic relations, among other claims. The district court granted summary judgment to MRD and dismissed all of Ms. Keith's claims. We affirm.

BACKGROUND

¶ 3 In early 2002, Ms. Keith and UPCM agreed that UPCM would submit an application to Wasatch County for approval of a large real estate development—“Pioche Mountain Estates”—on the common property (development plan). The proposed development covered 321 acres; contained 183 “equivalent residential units” (ERUs)¹ including condominiums, ski lodges, and residential lots; and spanned the entirety of the three parcels commonly owned by Ms. Keith and UPCM (later MRD). Wasatch County approved the preliminary development plan (2002 approval).

¶ 4 Ms. Keith and MRD began to disagree about the development. They could not agree how to proceed together nor on a purchase price for Ms. Keith's interests in

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the three parcels. They continued to negotiate and exchanged various offers in an attempt to reach an agreement.

¶ 5 On April 30, 2004, MRD made an offer to exchange interests in the parcels with Ms. Keith and share in development costs “based upon our proportionate densities” (2004 settlement offer). Under the terms of this offer, Ms. Keith would have continued as part of the development and would have shared in the development costs based upon the number of ERUs in proportion to her property interest. Ms. Keith rejected the offer.

¶ 6 In 2004, MRD purchased Ms. Keith's siblings' interests in the parcels.² At that point, MRD owned all of parcels A, B, and C, except for Ms. Keith's interests. Ms. Keith's interests comprised one-third of parcel A, 8.3 percent of parcel B, and 11.12 percent of parcel C. Parcel A consisted of approximately forty acres. Parcels B and C together covered approximately 280 acres.

¶ 7 In January 2005, MRD sought legal partition of its ownership interest from Ms. Keith's ownership interest in parcels A, B, and C, while continuing to engage in settlement negotiations with Ms. Keith. On April 28, 2005, Ms. Keith submitted an offer to settle the partition action (2005 settlement offer). She made two offers:

First ... [Ms. Keith] is willing to make an offer of $5,100,000 for [MRD's] interest in the parcels. In the alternative, she would trade her interest in all other parcels if [MRD] would convey to her a hundred percent interest in Parcel A.

¶ 8 MRD accepted the second offer on the terms stated by Ms. Keith. Ms. Keith and MRD exchanged special warranty deeds whereby MRD conveyed all of its interest in parcel A and Ms. Keith conveyed to MRD all of her interest in parcels B and C. The parties then stipulated to the dismissal of the partition action.

¶ 9 The special warranty deeds exchanged by the parties contained mirror language expressing the intent to mutually exchange 100 percent interest in the respective parcels,

Together with all the appurtenances, rights and privileges thereunto belonging; and Subject to restrictions, reservations, covenants, conditions, easements and right-of-ways now of record, all other matters now of record, and general property taxes, assessments and charges for the year 2005 and thereafter.³

¶ 10 Following the settlement, Ms. Keith discovered that MRD no longer considered her a part of the Pioche development plan and instead intended to pursue the development plan without her and without parcel A, which Ms. Keith now owned in its entirety. The parties do not dispute that MRD informed county officials and potential buyers of Ms. Keith's property that MRD had retained all 183 ERUs approved in the 2002 approval of the Pioche development and that it believed that no ERUs were transferred to Ms. Keith in the settlement agreement.⁴

¶ 11 After the exchange of deeds under the 2005 settlement agreement, Ms. Keith continued to pay Wasatch County for forty-eight ERUs as they related to the water rights of the property. Additionally, a comparison of the map of parcel A with the proposed layout for Pioche Mountain Estates shows that four townhome buildings—each containing between ten and thirteen units—and four ski

337 P.3d 218

club buildings were to be located on parcel A under the 2002 approval.

¶ 12 Ms. Keith sued MRD for breach of contract, breach of warranty, fraudulent inducement, tortious interference with prospective economic relations, declaratory relief, and to quiet title.⁵ The parties filed cross-motions for summary judgment and the district court found in favor of MRD on all claims.

¶ 13 The district court granted summary judgment in favor of MRD on Ms. Keith's claims of breach of contract and breach of warranty because it held that MRD and Ms. Keith could not lawfully transfer ERUs that the Wasatch County Planning Commission had granted under the 2002 approval. This decision was based on the district court's interpretation of Wasatch County, Utah, Code section 16.27.10(C)(3) (Sterling 2013)⁶ and on its finding that MRD and Ms. Keith abandoned the development plan and decided to develop their respective parcels separately.⁷

¶ 14 The district court granted summary judgment in favor of MRD on Ms. Keith's claim for fraudulent inducement because it found that Ms. Keith did not present sufficient evidence of the elements required for fraudulent inducement. The court found that Ms. Keith presented (1) no evidence that MRD “made any representation about apportionment or transfer of ERUs which [Ms.] Keith relied upon in entering into the settlement agreement” and (2) no evidence that MRD intended to deceive Ms. Keith when the parties entered into the settlement agreement.

¶ 15 Finally, the district court concluded that as a matter of law, under the undisputed facts, MRD did not tortiously interfere with Ms. Keith's contractual interests by an improper means or for an improper purpose. According to the court, “MRD had a proper purpose for asserting that it did not transfer ERUs to Keith,” specifically, its “genuinely held belief” that it did not transfer any ERUs to Ms. Keith in the settlement agreement. The court concluded that MRD “did not utilize improper means in expressing its opinion” about the ERUs because MRD merely expressed views “regarding the import of legal documents to public officials at planning meetings in connection with the planning process.” [Ms.] Keith appeals the district court's decision to grant summary judgment on her claims...