Pacific West v. Grantsville City

• Decision Date: 16 October 2009
• Docket Number: No. 20080472-CA.,20080472-CA.
• Citation: 2009 UT App 291,221 P.3d 280
• Parties: PACIFIC WEST COMMUNITIES, INC., a California Corporation, Petitioner, Appellee, and Cross-appellant, v. GRANTSVILLE CITY, a Utah Municipal Corporation, Respondent, Appellant, and Cross-appellee.
• Court: Utah Court of Appeals

221 P.3d 280

2009 UT App 291

PACIFIC WEST COMMUNITIES, INC., a California Corporation, Petitioner, Appellee, and Cross-appellant, v. GRANTSVILLE CITY, a Utah Municipal Corporation, Respondent, Appellant, and Cross-appellee.

No. 20080472-CA.

Court of Appeals of Utah.

October 16, 2009.

J. Craig Smith, Scott M. Ellsworth, and R. Christopher Preston, Salt Lake City, and Ronald L. Elton, Grantsville, for Appellant and Cross-appellee.

R. Stephen Marshall and David P. Rose, Salt Lake City, for Appellee and Cross-appellant.

Before GREENWOOD, P.J., THORNE, Associate P.J., and McHUGH, J.

OPINION

THORNE, Associate Presiding Judge:

¶ 1 Grantsville City appeals from the portion of the district court's order on cross-motions for summary judgment in favor of Pacific West Communities, Inc. (Pacific West) and the declaratory judgment. The judgment declared that (1) the planned unit development (PUD) for the Country Haven Condominiums approved by the Grantsville City Council (the City Council) is not valid with respect to phase two of the property; (2) alternatively, the PUD does not apply to phase two because the amended version of the Declaration of Covenants, Conditions, and Restrictions (the CC & Rs) excluded phase two from the applicability of the CC & Rs; and (3) even if the PUD was not terminated and did apply to phase two, Pacific West was a bona fide purchaser without notice of any CC & Rs and therefore the CC & Rs are unenforceable as against Pacific West.

¶ 2 Pacific West cross-appeals from a portion of the same order wherein the district court granted Grantsville City's motion for summary judgment affirming the City Council's decision denying Pacific West's PUD application for phase two. We affirm in part and reverse in part.

BACKGROUND

¶ 3 On December 11, 1997, the Grantsville Planning Commission (the Planning Commission) reviewed and recommended the City Council approve the final plat of phase one of a multiphase PUD. On December 17, the City Council approved the final plat "with the approval for phasing conditioned upon approval of the city engineer and City Council for each phase." After receiving the City Council's approval, the original developer commenced construction of phase one. The CC & Rs of Country Haven Condominiums were recorded on May 3, 1998. A First Amendment, recorded on March 25, 1999, excluded phase two from the applicability of the CC & Rs.

¶ 4 On August 27, 2004, Pacific West, through its affiliate Grantsville Family Associates, a Utah limited partnership, purchased phase two of the PUD from G and S Investments, LC. On December 20, 2006, Pacific West filed a final plat application, seeking approval of a PUD subdivision for phase two; the Planning Commission approved the application. The Country Haven Homeowners' Association and a group of property owners adjacent to the proposed phase two appealed the Planning Commission's decision to the City Council, arguing that the proposed development plan for phase two was a major adjustment and was not in substantial conformity with the original development plan for the project.

¶ 5 After a hearing on February 21, 2007, the City Council concluded that the proposed phase two project constituted a major adjustment to the approved development plan. The City Council concluded that phase two would require a significant modification of the previous written approval conditions and was not in substantial conformity with the previously approved final development plan. At the conclusion of the hearing, the City Council voted to deny Pacific West's application. After the hearing, Julie Black, president of the Country Haven Condominiums Homeowners' Association, sent a letter and a sales brochure to the City Council. In her letter, she explained that the sales brochure demonstrates "our belief that the designations of C, D, F, and G on the recorded plat were reflective of the `C'olorado, `D'akota, `F'lorida, and `G'eorgia type units to be constructed in the future phases of Country Haven Condominiums." Neither Grantsville City nor Pacific West presented that information at the hearing. Nonetheless, when the City Council issued its Findings and Decisions, dated March 7, 2007, it referenced and attached the letter and sales brochure.

¶ 6 Pacific West filed a timely appeal of the City Council's decision with the district court and cited three claims for relief: (1) for reversal of the City Council's decision and a request that the court direct the City Council to approve Pacific West's application; (2) for a declaratory judgment establishing that the PUD approved by the City Council on December 17, 1997, is not applicable to phase two because Pacific West was a bona fide purchaser (Bona Fide Purchaser Claim); and (3) for an alternative declaratory judgment establishing that the CC & Rs are void and unenforceable as against Pacific West because construction had not been diligently pursued, and the PUD permit expired pursuant to 12.4(5) of the Grantsville Land Use Management and Development Code (PUD Termination Claim). The parties filed cross-motions for summary judgment.

¶ 7 The district court granted Grantsville City's summary judgment motion "to the extent that it [sought] an order denying [Pacific West's] appeal from the decision of [the City Council] dated March 7, 2007," and denied Pacific West's summary judgment motion "to the extent that it sought an order reversing the decision of the . . . City Council as set forth in the First Claim for Relief in [Pacific West's] Petition."

¶ 8 The district court granted Pacific West's motion for summary judgment on both of Pacific West's requests for declaratory judgment. First, the district court found that Pacific West was a Bona Fide Purchaser and therefore the previously approved PUD was not applicable to phase two. Second, the district court concluded that the PUD approved by the City Council on December 17, 1997, is no longer valid with respect to phase two and "declared to be terminated with respect to the [phase two p]roperty on the ground that construction was not `diligently pursued' as required by Section 12.4(5) of the Grantsville Land Use Management and Development Code."

¶ 9 The district court also granted "a declaratory judgment that the PUD does not apply to the property described as [phase two] . . . of the Final Plat since the [CC & Rs] . . . were amended on or about March 25, 1999, to exclude the [phase two] portion of the property from the applicability of the CC & Rs." Lastly, the district court granted a declaratory judgment on Pacific West's second claim for relief concluding that

(a) Pacific [West] acquired the [phase two p]roperty without notice of any restrictions, requirements, or conditions (the "Unrecorded Restrictions") that were not shown on the Final Plat for the PUD. Such Unrecorded Restrictions include, without limitation, the following items with respect to each of the units identified on the [phase two] portion of the Final Plat: (i) unit designs, (ii) floorplans, . . . .;

(b) Pacific [West] purchased the [phase two p]roperty in "good faith" within the meaning of Utah Code [section] 57-3-103(1) . . ., and is a bona fide purchaser;

(c) Pursuant to Utah Code [section] 57-3-103 . . ., the Unrecorded Restrictions are void and unenforceable as against Pacific [West];

(d) The Unrecorded Restrictions are also void and unenforceable as against Pacific [West] under the statute of frauds, [see] Utah Code Ann. § 25-5-1 (2007).

¶ 10 Both parties appeal from the district court's summary judgment order.

ISSUES AND STANDARDS OF REVIEW

¶ 11 Grantsville City appeals from the district court's order on cross-motions for summary judgment. "We review a district court's grant [or denial] of summary judgment for correctness, affording no deference to the district court." Bluffdale City v. Smith, 2007 UT App 25, ¶ 5, 156 P.3d 175.

¶ 12 Grantsville City first argues that the district court erred by failing to apply Utah Code section 10-9a-801(8)(a) when considering Pacific West's Bona Fide Purchaser Claim and PUD Termination Claim as well as other evidence outside of the City Council's record. Utah Code section 10-9a-801(8)(a) limits the district court's review of the City Council's decision to the record of the City Council. See Utah Code Ann. § 10-9a-801(8)(a) (2007). We review the district court's application of a statute for correctness, affording no deference to the district court's legal conclusion. See Wasatch Crest Ins. Co. v. LWP Claims Adm'rs Corp., 2007 UT 32, ¶ 6, 158 P.3d 548. Because our decision on this issue is dispositive, we do not reach Grantsville City's other issues on appeal.

¶ 13 On cross-appeal, Pacific West argues that the district court erred in affirming the City Council's decision because the City Council's decision was not based on substantial evidence and was therefore arbitrary, capricious, and illegal. Pacific West asserts that the decision was based on a mistaken belief that the approval of the final plat of phase one included approval of future phases, including phase two.

When a district court reviews an order of a local land use authority and we exercise appellate review of the district court's judgment, we act as if we were reviewing the land use authority's decision directly, and we afford no deference to the district court's decision. Like the review of the district court, our review is limited to whether a land use authority's decision is "arbitrary, capricious, or illegal."

Fox v. Park City, 2008 UT 85, ¶ 11, 200 P.3d 182 (footnote omitted).

ANALYSIS

I. Summary Judgment Decision Granting Pacific West Relief on Bona Fide Purchaser Claim and PUD Termination Claim

¶ 14 Grantsville City argues that the district court improperly received and considered evidence and claims for Bona Fide Purchaser and PUD Termination, which evidence and claims were outside of the City Council's record.¹ Specifically, Grantsville City asserts that Pacific West submitted...