Saunders v. Sharp, 880710-CA

CourtCourt of Appeals of Utah
Citation840 P.2d 796
Docket NumberNo. 880710-CA,880710-CA
PartiesLeon H. SAUNDERS; Robert Felton; Saunders Land Investment Corporation; White Pine Ranches; White Pine Enterprises; Kenneth R. Norton, d/b/a Interstate Rentals, Inc., Plaintiffs and Appellants, v. John C. SHARP and Geraldine Y. Sharp, Defendants and Appellees.
Decision Date14 October 1992

Robert M. Anderson, Glen D. Watkins (argued), Bryce Wycoff, Hansen & Anderson, Salt Lake City, for Saunders, Felton, and White Pine.

Mark H. Anderson, Marilynn P. Fineshriber, Patricia L. LaTulippe, Nielsen & Senior, Salt Lake City, for appellees.

John B. Anderson (argued), Anderson & Holland, Salt Lake City, for appellant Norton.

Stanford B. Owen, Patrick L. Anderson, Fabian & Clendenin, Salt Lake City, for Surety.



GARFF, Judge:

This case originated as an appeal from the trial court's ruling in favor of appellees John C. Sharp and Geraldine Y. Sharp, wherein the court ruled that appellants (collectively White Pine) breached the contract. White Pine appealed. This court affirmed in part, reversed in part, and remanded the case to the district court. Saunders v. Sharp, 793 P.2d 927 (Utah App.1990). On certiorari, the Utah Supreme Court agreed that the Utah Court of Appeals correctly affirmed the trial court's findings on the basis that White Pine failed to marshal the evidence. Saunders v. Sharp, 806 P.2d 198, 199 (Utah 1991) (per curiam). However, the supreme court, in its per curiam opinion, concluded the court of appeals erred when it "automatically affirmed" the judgment. Id. The supreme

court thereupon remanded the case to the court of appeals to specifically review the district court's interpretation of the contract and its conclusions of law. Id. at 200

We reiterate the factual statement contained in the opinion of this court in the initial appeal based on the trial court's findings. Saunders, 793 P.2d 927, 928-30 (Utah App.1990). On November 9, 1980, White Pine, together with others not parties to this action, agreed to purchase 60.078 acres of unimproved real property (Property) in White Pine Canyon, Snyderville, Summit County, Utah from Sharps for the purpose of developing twelve to fifteen four- to five-acre residential lots.

At the closing of the sale on July 16, 1981, the parties executed a "Memorandum of Closing Terms" (Closing Memorandum), a Trust Deed Note of $963,055.30, a Trust Deed, and a Warranty Deed (collectively the Contract). Sharps' counsel prepared these documents. Appellants Leon H. Saunders, Robert Felton and Kenneth R. Norton executed the Contract for the buyers, and Sharps executed it for the sellers.

White Pine agreed to pay Sharps $1,583,055.30 for the Property, $620,000.00 of which was paid as a down payment at closing. Pursuant to the Trust Deed Note, White Pine agreed to pay Sharps the remaining $963,055.30 in five annual installments, in which the principal amount of each installment would be $192,611.06, in addition to accrued interest on the entire unpaid balance. At closing, Sharps conveyed fee title to the property to White Pine subject to the Trust Deed securing payment of the Trust Deed Note. The Trust Deed, by its terms, transferred title to the trustee, Associated Title, pending completion of the obligations of the Contract.

The Closing Memorandum noted

1. ... after recordation of the PUD 1 Plat and the Declaration of Covenants, Conditions and Restrictions, and upon receipt of each $140,000.00 in principal (but not including the earnest money and down payment money), Seller shall execute and deliver to Buyer a Partial Deed of Reconveyance for one (1) PUD lot.

2. Upon the payment of the release price, Buyer shall be entitled to the release of one (1) lot of Buyer's choice upon receipt of the payment or at any time thereafter.

3. It is agreed that at the time of execution of this Memorandum, Buyer has paid to Seller the sum of $620,000.00 which will release from the Deed of Trust three (3) PUD lots. Upon the recordation of the PUD Plat and Declaration of Covenants, Conditions and Restrictions with the Summit County Recorder, Buyer shall be entitled to the release from the Deed of Trust of three (3) PUD lots of Buyer's choice together with the said roadway.

The Closing Memorandum provided that it "may not be orally changed, modified, or terminated, except in writing, by the party against whom the same is sought to be enforced." In addition, the Trust Deed Note and the Trust Deed provided that White Pine would "pay at least 10 days before delinquency all taxes and assessment affecting said property." These documents also contained provisions relating to the payment of attorney fees under specified conditions.

On June 30, 1982, White Pine paid Sharps an installment payment of $308,177.69 by check with a cover letter from Felton, who was also counsel for White Pine, stating, "Upon final plat approval, we will notify you to obtain the releases for the lots and the road as per the contract."

The following year, on June 28 and June 30, 1983, White Pine paid Sharps $178,165.23. The remaining portion of the June 30, 1983 installment payment was paid by check, which was returned for insufficient funds resulting in a default.

On July 19, 1983, while the June 30, 1983 payment was still in default and prior to the recordation of a final plat, Felton wrote a letter to Jon C. Heaton, attorney for Sharps, in which Felton requested that Sharps release Lots 1 through 5 and the Roadway.

On September 23, 1983, a Notice of Default was filed pursuant to the Trust Deed on the Property for the default of the June 30, 1983 payment. White Pine cured the default on November 14, 1983 by tendering $118,397.39 to Sharps.

On November 18, 1983, Heaton sent a letter to his clients (Sharps) enclosing for their approval a proposed final plat. This plat, along with a Declaration of Protective Covenants (Covenants), was later recorded in Summit County. While Heaton's letter said nothing about an easement, it instructed Mr. Sharp that his signature "on the enclosed consent document only acknowledges your approval of [Mr. Saunders's] recording the plat and the [Covenants], copy here enclosed." Heaton's letter also noted

By Hy Saunders' signature, which I will obtain to this letter prior to releasing your consent to the recordation of the subdivision plat, he agrees that you continue to have your right of approval with regard to how the southern portion of the property is platted.

Heaton placed a signature block at the bottom of the letter, prefaced by the words "Approved: By." However, Mr. Saunders never signed the letter, nor was it signed by any other appellant who signed the Trust Deed, the Trust Deed Note, and the Closing Memorandum. Heaton's letter noted that Mr. Saunders intended to seek a "release of Lots 1 through 5 of the platted subdivision along with the road." Heaton said he had "reviewed the payments under the Note" and found that Mr. Saunders "is entitled to those releases." Finally, Heaton stated that once the releases were made, "pursuant to your instruction we will insure that rights are reserved in [the Roadway] for access for the southern portions of the property purchased from you until your Deed of Trust is fully paid."

The proposed final plat enclosed with Heaton's letter platted only the northern portion of the Property into six PUD lots, leaving the southern portion (approximately twenty-seven acres) of the Property unplatted.

On November 21, 1983, Felton, in a letter to Heaton, rejected the idea of creating an easement in favor of Sharps along the Roadway and objected to the scope of the access rights proposed in Heaton's letter.

On or about November 23, 1983, Sharps executed a Consent to Record with respect to White Pine's plat describing Phase I of the project, which involved the north six lots and the Roadway. The plat and the Covenants, along with the Consent to Record, were recorded with the Summit County Recorder on December 23, 1983. The plat indicated that the internal Roadway was to be private, in contravention to Sharps' intent to have the Roadway dedicated to public use. The Covenants provided that easements over the lots and common area properties "are hereby reserved by Declarant [White Pine], together with the right to grant and transfer the same."

The remaining property abutting the Roadway to the south was not platted. The plat showed the existence and location of utility easements, including those for water lines, a water tank and water system, substantial portions of which were to be constructed on the unplatted property. White Pine advised Sharps it would plat the balance of the Property at a later time.

On November 23, 1983, Sharps authorized the recording of a Cancellation of Notice of Default relating to the June 30, 1983 payment.

On January 18, 1984, Sharps directed the trustee, Associated Title, to reconvey Lots 1 through 5, but not the Roadway, from the Trust Deed to White Pine. Sharps instructed that "[e]xcept for [Lots 1 through 5] all other portions of the property remain subject to the Trust Deed."

Associated Title did not prepare the reconveyance of Lots 1 through 5 until January 7, 1986. The reconveyance was recorded March 26, 1986, more than two years

after White Pine had tendered the funds for those lots. No explanation of the delay in preparing the reconveyance was provided at trial

On November 30, 1984, property taxes of approximately $4,725.00 for Lot 6 and the unplatted property became due and payable. White Pine had paid only $1,515.24 of that sum. White Pine later became delinquent on taxes for 1985, 1986 and 1987. The Contract provided that White Pine pay such taxes at least ten days before delinquency.

White Pine paid the 1984 installment payment of $192,611.06. The following year, on June 27, 1985, Sharps received only a portion of the June 30, 1985 installment payment in the form of a check from Felton for $59,709.47.


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