Stevensen v. Goodson
| Decision Date | 20 August 1996 |
| Docket Number | No. 940025,940025 |
| Citation | 924 P.2d 339 |
| Parties | Olaf T. STEVENSEN, Jr., and Barbara Ann Stevensen, et al., Plaintiffs and Appellants, v. Raymond L. GOODSON, James Foulger, and Richard Danley, as individuals and dba 221 East Second South Partners, et al., Defendants and Appellees. ROCKY MOUNTAIN CONTRACTORS, INC., a corporation, Third-Party Plaintiff and Appellee, v. BECHO, INC., a Utah corporation, Third-Party Defendant and Appellee. Raymond L. GOODSON, James Foulger, and Richard Danley as individuals and dba 221 East Second South Partners, et al., Third-Party Plaintiffs and Appellees, v. BECHO, INC., a Utah corporation, et al., Third-Party Defendants and Appellees. |
| Court | Utah Supreme Court |
David J. Hodgson, Salt Lake City, for the Stevensens.
J. Craig Carman, Salt Lake City, for Danley and Foulger.
Wendell E. Bennett, Jeannine Bennett, Salt Lake City, for 221 East Second South Partners.
John R. Lund, Julianne Blanch, Salt Lake City, for Rocky Mountain Contractors.
Robert K. Hilder, Karra J. Porter, Salt Lake City, for Architect-Planners, Thomas Evans, Warden, Evans & Hill.
Herschel P. Bullen, Salt Lake City, for Becho.
John A. Snow, Salt Lake City, for BH Mortgage.
Raymond L. Goodson, pro se.
Olaf Stevensen and his wife Barbara Stevensen appeal from a directed verdict in favor of Rocky Mountain Contractors, Inc. (Rocky Mountain), summary judgments in favor of Rocky Mountain, Architect-Planners, Inc./Warden, Evans & Hill, and Thomas Evans (Warden, Evans & Hill), and Becho, Inc. (Becho), and a partial summary judgment in favor of Raymond Goodson, James Foulger, and Richard Danley as individuals and as the sole partners of 221 East Second South Partners (the 221 partners). The trial court dismissed all of the Stevensens' claims, which alleged that during a construction project on adjoining land, defendants unlawfully damaged property in which the Stevensens held a security interest. We affirm in part, reverse in part, and remand for further proceedings.
In reviewing grants of directed verdicts and summary judgments, we view all facts and the inferences drawn therefrom in the light most favorable to the nonmoving party. See Nay v. General Motors Corp., 850 P.2d 1260, 1261 (Utah 1993); Winegar v. Froerer Corp., 813 P.2d 104, 107 (Utah 1991). We recite the facts accordingly.
In January 1984, the Stevensens entered into an agreement with the 221 partners to sell to them their Salt Lake Athletic Club in Salt Lake City, Utah, including the attendant real estate, personalty, and business property (collectively, the Salt Lake Athletic Club). 1 Pursuant to the agreement, the 221 partners were to continue operation of the Salt Lake Athletic Club as a health club and maintain the premises and facilities in good repair and prevent the commission of "waste, spoilage, or destruction" in or upon the premises so long as any part of the purchase price or interest remained unpaid. The Stevensens retained legal title pending full payment of the purchase price but only as a security interest. Thus, the 221 partners acquired equitable title. Indeed, in their appellate briefs, all parties agree that the purchase agreement was in essence a mortgage agreement, giving the Stevensens rights as mortgagee and the 221 partners rights as mortgagor.
Subsequently, the 221 partners initiated a plan to develop a parcel of land they owned which was adjacent to the Salt Lake Athletic Club. On this land, the 221 partners planned to construct an underground parking garage and a thirteen-story office building to be known as 257 Towers. The 221 partners retained the architectural firm of Warden, Evans & Hill to design and direct the construction. In addition, the 221 partners hired Rocky Mountain to build the structure. Rocky Mountain subcontracted with Becho to participate in the construction of the garage.
Construction of the parking facility required a deep excavation. To complete the excavation without risking damage to surrounding property, Becho built a shoring wall and a series of tie-backs to hold the wall and the earth behind it in place. The tie-backs were metal and concrete rods affixed to the shoring wall and placed sixty to eighty feet laterally into the ground. Some of the tie-backs were placed underneath the Salt Lake Athletic Club.
In April 1984, while a tie-back was being placed beneath the Salt Lake Athletic Club, the club building was damaged. Cracks appeared in the walls, floors, and ceiling. The plumbing and swimming pools were also damaged. Upon discovery of the damage, the 221 partners arranged for limited repairs. The partners opted to mend only a cracked basement wall through steel bracing and smaller fissures through cosmetic restoration. The total repair cost was $4,769.81 and was paid by Becho.
In exchange for payment, Becho obtained a release from James Foulger, one of the 221 partners, and Rocky Mountain. The release stated:
[The Salt Lake Athletic Club and Rocky Mountain] hereby release and discharge [Becho] and all other persons and entities from all claims and demands, actions and causes of action, damages, costs, loss of services, loss of income, expenses and compensation on account of or in any way growing out of, or resulting or which may result from an accident that occurred on or about the 14th day of April, 1984 at or near 255 East 200 So. Salt Lake City or arising out of any other act or omission of releasees occurring prior to the effective date of this document.
The release was dated February 21, 1985.
In mid-1985, the 221 partners experienced financial problems and ceased operation of the Salt Lake Athletic Club. Also at this time, the Stevensens discovered the damage caused in April 1984.
In August 1985, after the 221 partners failed to make payments to the Stevensens in accord with the purchase agreement, the Stevensens commenced the lawsuit that led to this appeal. They alleged that the 221 partners breached the purchase agreement by failing to continue operation of the Salt Lake Athletic Club, failing to keep the club in good repair, failing to prevent damage to the club, failing to pay property taxes, and failing to make purchase payments. The Stevensens also alleged that by authorizing the encroaching tie-backs and other structures, the partners had unlawfully impaired the Stevensens' security interest in the mortgaged property. The Stevensens sought monetary damages and foreclosure of the property.
The Stevensens' complaint also alleged tortious conduct by other parties involved in the 257 Towers construction project. Against the general contractor, Rocky Mountain, and the architectural firm, Warden, Evans & Hill, the Stevensens claimed that due to the wrongful and negligent placement of the tie-backs and other structures, these parties had unlawfully impaired the Stevensens' security interest by trespassing and encroaching upon the Salt Lake Athletic Club. Following its inclusion as a defendant, Rocky Mountain filed a third-party complaint against Becho, seeking indemnification and contribution if found liable to the Stevensens. 2 The Stevensens also alleged that Beverly Hills Savings & Loan Association and its affiliate BH Mortgage Company, 3 which financed and, at the time the Stevensens filed their complaint, owned 257 Towers, caused damage to the Salt Lake Athletic Club by failing to remove the encroaching structures from the athletic club property. 4
During the pendency of the Stevensens' lawsuit, two of the 221 partners, James Foulger and Richard Danley, filed for bankruptcy. Raymond Goodson, the third 221 partner, entered into a partial settlement with the Stevensens. Thereafter, the Stevensens no longer pursued their breach of contract claims, except for their action against the 221 partners to foreclose on the Salt Lake Athletic Club. In fact, in a January 9, 1994, order, the trial court indicated that these claims were no longer pending.
On July 18, 1989, BH Mortgage requested that the Stevensens' unlawful impairment of their security interest claim be tried separately. A pretrial conference was held on August 16, 1989, attended by the Stevensens' attorney and attorneys for BH Mortgage, the 221 partners, Rocky Mountain, Becho, and Warden, Evans & Hill. 5 With agreement of counsel, the trial court scheduled for jury trial on October 23, 1989, "[t]he issues of whether or not there is an unlawful impairment of [the Stevensens'] security interest in the Salt Lake Athletic Club property by the existence of the shoring wall and tie-back system [and other structures], and, if so, the damages resulting therefrom."
This first trial proceeded at the time scheduled against the 221 partners, Rocky Mountain, Warden, Evans & Hill, and BH Mortgage on the issue of whether the placement of the tie-backs and related structures impaired the Stevensens' security interest in the Salt Lake Athletic Club. However, the Stevensens objected to the involvement of parties other than BH Mortgage, claiming unfair surprise. The Stevensens claimed that the trial court's scheduling order provided that a separate trial would be held only to resolve the Stevensens' unlawful impairment claim against BH Mortgage. The trial court, finding no ambiguity in its scheduling order, disagreed and overruled the Stevensens' objection. The trial proceeded.
At the close of the Stevensens' case-in-chief, Rocky Mountain and Warden, Evans & Hill moved for directed verdicts pursuant to rule 50(a) of the Utah Rules of Civil Procedure. Rocky Mountain contended that it could not have unlawfully impaired the Stevensens' security interest since it had the permission of the 221 partners, the equitable owners of the Salt Lake Athletic Club property, to engage in the construction that caused the damage. The trial court, reasoning that the Stevensens' security interest in the Salt Lake Athletic Club property was binding only upon the parties who entered into the mortgage agreement,...
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