PYRAMID CONST. CO. v. Wind River Petroleum, Inc.

• Decision Date: 12 September 1994
• Docket Number: Civ. No. 94-C-428.
• Citation: 866 F. Supp. 513
• Parties: PYRAMID CONSTRUCTION COMPANY, INC., a New Jersey corporation, Plaintiff, v. WIND RIVER PETROLEUM, INC., a Utah corporation, Defendant.
• Court: U.S. District Court — District of Utah

866 F. Supp. 513

PYRAMID CONSTRUCTION COMPANY, INC., a New Jersey corporation, Plaintiff, v. WIND RIVER PETROLEUM, INC., a Utah corporation, Defendant.

Civ. No. 94-C-428.

United States District Court, D. Utah, Central Division.

September 12, 1994.

Gordon Strachan, Todd D. Wakefield, Strachan & Strachan, Park City, UT, for plaintiff.

Bruce A. Maak, Jeffrey J. Hunt, Kimball, Parr, Waddoups, Brown & Gee, Salt Lake City, UT, for Wind River Petroleum.

Florian Frederick Chess, Resolution Trust Corp., Denver, CO, James Esparza, The Woodlands, Salt Lake City, UT, for Resolution Trust Corp.

ORDER DISMISSING PYRAMID'S FIFTH CAUSE OF ACTION

WINDER, Chief Judge.

This matter is before the court on three related motions: (1) Defendant Wind River Petroleum, Inc.'s ("Wind River") motion to dismiss Plaintiff Pyramid Construction Company, Inc.'s ("Pyramid") fourth and fifth causes of action; (2) Intervenor Resolution Trust Corporation's ("RTC") motion to intervene for the express purpose of asking the court to dismiss Pyramid's fourth and fifth causes of action; and (3) the RTC's motion to dismiss Pyramid's fourth and fifth causes of action. A hearing on all three motions was held on August 25, 1994. At the hearing, Gordon C. Strachan and Todd D. Wakefield represented Pyramid, Bruce A. Maak and Jeffrey J. Hunt represented Wind River, and Florian Frederick Chess represented the RTC.

Before the hearing, the court considered carefully the memoranda and other materials submitted by the parties relating to all three motions. The court had also read certain of the authorities cited by each of the parties. Following oral argument, and after taking the motions under advisement, the court has further considered the law and facts related to each motion. Having now fully considered the issues in this case, and good cause appearing, the court enters the following memorandum decision and order.

I. BACKGROUND

The case at bar concerns the validity of a sale by the RTC, as receiver for Western Savings and Loan Association ("Western"),¹ of the Snow Creek Parcel, a 51.84 acre tract of land situated near the intersection of Utah highways U-224 and U-248 in Park City, Utah.

Wind River currently operates a "Top Stop" gas station and convenience store on a leased .861 acre portion of the 51.84 site. Wind River is also the successor-in-interest to a May, 1965 lease agreement covering the same .861 acres upon which its gas station is located. The 1965 lease agreement grants Wind River a "right of first refusal in the event the lessor, or its successor, desires to sell the Gas Station portion of the Snow Creek property." See Pyramid's Complaint, ¶ 9.

In 1991, the RTC, as receiver for Western, decided to sell the Snow Creek Parcel in liquidation of Western's assets. As was required by the Coastal Barrier Resources Act,² the RTC, through its asset manager Transamerica Real Estate Management Co. ("Transamerica"), first offered the parcel, including Wind River's .861 acre gas station site, to qualified governmental entities. Soon thereafter, Park City Municipal Corporation ("Park City") expressed an interest in purchasing the property from the RTC.

On September 17, 1992, Park City published a Request For Proposal ("RFP") in Utah newspapers of general circulation seeking a private financial partner to assist it in acquiring the property. Pyramid responded to Park City's RFP on October 9, 1992 by advising Park City of its interest in pursuing the partnership.³ Soon thereafter, on December 9, 1992, Park City announced its selection of Pyramid as a financial partner in acquiring the Snow Creek Parcel from the RTC.⁴

Meanwhile, Park City and Transamerica were engaged in ongoing negotiations regarding the sale of the Snow Creek Parcel to Park City. On May 18, 1993, the RTC conditionally accepted an offer by Park City to purchase the land for $1.9 million.⁵ The RTC's conditional acceptance was prefaced with the following cautionary note however:

Transamerica and the RTC shall not be bound until it executes a contract of purchase and sale. Until such time as the contract is executed by both parties, the RTC reserves the right to consider other offers for the purchase of all or any part of the ... property.

See Letter from Suzanne Drake, Transamerica Assistant Vice-President, to Toby Ross, Park City Municipal Corporation, at 1 (May 18, 1993).

In early September of 1993, the RTC announced that Park City was the winning bidder for the Snow Creek Parcel. Later that same month, on September 24, 1993, Park City assigned all of its interest in the Snow Creek Parcel to Pyramid. Soon thereafter, on October 7, 1993, Mr. William J. Coleman of Pyramid sent a letter to the RTC. Mr. Coleman's letter advised the RTC of the following:

We understand the reason we have not yet received an executed contract is the RTC's concern over Top Stop's potential right of first refusal. We do not wish to prepare to close with the potential for Top Stop to contest the sale hanging over us. Therefore, we suggest that should you accept our offer, you offer Top Stop the opportunity to exercise their right of first refusal. If they decline, we can enter into contract and close shortly thereafter.

See Letter from William J. Coleman, Pyramid Partner, to Suzanne Drake, Transamerica Assistant Vice-President, at 1 (Oct. 7, 1993).

On October 29, 1993, Wind River notified Pyramid that it intended to exercise its right of first refusal on the .861 acre gas station site.⁶ Subsequently, on November 3, 1993, the RTC sent Pyramid a proposed final Purchase and Sale Agreement. That final agreement, among other things, purported to give Wind River a right of first refusal on the entire Snow Creek Parcel, and not just the .861 acres of land upon which its gas station was located. Because of the RTC's erroneous calculation of the scope of Wind River's right of first refusal, Pyramid refused to execute the agreement.⁷

On or about December 28, 1993, the RTC informed Pyramid that Wind River had purchased the entire 51.84 acre Snow Creek Parcel from the RTC. Subsequently, on March 17, 1994, the RTC conveyed the property to Wind River via a special warranty deed. That deed, which was duly recorded in the Summit County, Utah Recorder's Office on March 23, 1994, requires the RTC to appear and defend Wind River against any challenge to its title in the Snow Creek Parcel.⁸

On April 22, 1994, Pyramid sued Wind River in this court asserting five causes of action against Wind River arising out of the aforementioned facts. Pyramid's fourth and fifth causes of action are now the subject of this memorandum decision and order.⁹ Pyramid's fourth cause of action seeks a declaration by this court that the RTC's sale of the Snow Creek Parcel to Wind River is "void and of no legal force and effect," and that Pyramid is "entitled to consummate its purchase of the Snow Creek Parcel under the terms previously offered to and accepted" by the RTC. See Pyramid's Complaint, ¶¶ 61-62. Pyramid's fifth cause of action asks this court for preliminary and permanent injunctive relief "preventing defendant Wind River from taking any action to make any physical changes, alterations, modifications, or improvements to the Snow Creek Parcel," and "requiring defendant Wind River to transfer to plaintiff ... title to the Snow Creek Parcel." Id. at ¶ 65.

On June 27, 1994, the RTC filed both a motion to intervene and a motion to dismiss Pyramid's fourth and fifth causes of action on the ground that the relief sought by Pyramid in those counts would "restrain or affect" the RTC in violation of 12 U.S.C.A. § 1821(j) and the jurisdictional bar thereunder.¹⁰ Soon thereafter, on July 8, 1994, Wind River filed a motion to dismiss Pyramid's fourth and fifth causes of action on the same ground.

Subsequently, on July 27, 1994, Pyramid and Wind River stipulated to the dismissal of Pyramid's fourth cause of action "with prejudice and on its merits" because of a belief by the parties that the relief requested therein would violate section 1821(j).¹¹ This court then signed an order dismissing with prejudice Pyramid's fourth cause of action on August 13, 1994. Wind River now argues that, in addition to its section 1821(j) argument noted supra, Pyramid's fifth cause of action should be dismissed for two additional reasons. First, Wind River argues that because the factual basis of Pyramid's fourth and fifth causes of action are identical, Pyramid's dismissal of its fourth cause of action also "jettisoned the legal basis for the injunctive relief requested in its Fifth Cause of Action." See Wind River's Reply Mem. in Supp. of Wind River's Mot. Dismiss Pl.'s Fourth and Fifth Causes of Action at 2-3. Second, Wind River argues that because Pyramid agreed to the dismissal of its fourth cause of action "with prejudice and upon its merits," Pyramid is also barred from litigating its fifth cause of action under the doctrine of res judicata. Id. at 3-5.

II. STANDARD OF REVIEW

In determining whether to grant a motion to dismiss for failure to state a claim upon which relief can be granted, the court must accept all well-plead facts as true. Arnold v. McClain, 926 F.2d 963, 965 (10th Cir.1991). In addition, all inferences that can be drawn from the allegations must be drawn in favor of the plaintiff. Id. at 965. "If as a matter of law `it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations,' a claim must be dismissed, without regard to whether it is based on an outlandish legal theory or on a close but ultimately unavailable one." Neitzke v. Williams, 490 U.S. 319, 327, 109 S.Ct. 1827, 1832, 104 L.Ed.2d 338 (1989) (citation omitted) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S.Ct. 2229, 2232, 81 L.Ed.2d 59 (1984)).

III. DISCUSSION

The dispositive issue to be decided here is whether the anti-injunction provision of the Financial Institutions Reform, Recovery, and...