West Valley City v. DOUGLAS W. MARTIN
| Decision Date | 23 September 2004 |
| Docket Number | No. 20030299-CA.,20030299-CA. |
| Citation | 2004 UT App 327,100 P.3d 248 |
| Parties | WEST VALLEY CITY, Plaintiff and Appellant, v. DOUGLAS W. MARTIN dba Fantastic Sam's, and Does 1 through 10, Defendants and Appellee. Douglas W. Martin dba Fantastic Sam's, Counterclaim Plaintiff, v. West Valley City, Counterclaim Defendant. |
| Court | Utah Court of Appeals |
J. Richard Catten, West Valley City Attorney's Office, West Valley City, for Appellant.
James L. Christensen and Christopher G. Jessop, Corbridge Baird & Christensen, Salt Lake City, for Appellee.
Before Judges DAVIS, GREENWOOD, and THORNE.
¶ 1 West Valley City appeals from the trial court's memorandum decision denying its motion for summary judgment on Douglas W. Martin's claim for just compensation following condemnation of a leasehold interest. We reverse.
¶ 2 In 1996, Martin purchased a Fantastic Sam's franchise located in West Valley City (the City). The franchise, a hair salon, occupied a leased portion of the first floor of a commercial building (the Heartland property) owned by Heartland West Valley Commercial Limited Partners II (Heartland). The lease came up for renewal in 1998 and Martin and Heartland executed a new ten-year lease. At all times relevant to this matter Martin paid the rents due under the lease and otherwise complied with the lease terms.
¶ 3 The lease contained provisions addressing condemnation of the premises for public use. Article XIX of the lease, entitled Eminent Domain, provided that the lease would terminate upon a condemning authority taking possession of the premises. Martin expressly waived all right to share in any condemnation award, and any such award was to go in its entirety to the landlord, Heartland. Martin reserved the right to pursue the condemning authority, but not the landlord, for any other damages that might be available to him.1
¶ 4 In 2001, the City needed expanded facilities to house its justice court and police department. The City determined that the Heartland property was the best available location for such an expansion due to its close proximity to the existing city hall. The City passed resolutions authorizing the issuance of municipal bonds to pay for the purchase of the Heartland property, and authorizing the City to negotiate that purchase. In June 2001, the City and Heartland entered into a contract in which the City agreed to purchase the Heartland property for $3,735,000. The purchase agreement included a term that "[the City] shall accept the property subject to all tenancies now in effect, provided that [Heartland] shall, at its sole expense, cause all first floor tenants to vacate the Building no later than March 1, 2002."
¶ 5 On September 18, 2001, the City and Heartland executed an assignment of the leases then in effect between Heartland and various tenants, including Martin. Under the terms of the assignment, Heartland was to "negotiate [at its sole cost and expense] amendments to any leases ... occupying first floor space, such that said lessees shall vacate first floor space no later than March 1, [2002]."2 In the event that Heartland failed to amend the leases to the City's satisfaction by December 1, 2001, the City retained the authority to take action, including the use of eminent domain, to ensure that the first floor was vacant by March 1, 2002. The assignment further provided that the City accepted the assignment of the leases "on the terms described herein." The sale closed on September 19, 2001.
¶ 6 On November 12, 2001, the City and Heartland amended their purchase agreement to release Heartland from its obligation to cause Martin to vacate the premises. In exchange for this release, Heartland paid the City $60,000.
¶ 7 On November 27, 2001, the City gave Martin written notice to vacate the premises no later than March 1, 2002. Martin responded by letter indicating that he would not vacate the premises by that date. In January 2002, the City filed the instant unlawful detainer and eminent domain action against Martin. Martin filed counterclaims against the City, alleging various contractual theories, abuse of process, and a claim for just compensation for the taking of his leasehold interest in the premises.
¶ 8 The City filed a motion for immediate occupancy of the premises, which the trial court granted on March 5, 2002. Pursuant to the terms of the court's immediate occupancy order, the City deposited $30,100, an amount equal to the appraised value of the condemned property interest, with the clerk of the court. Martin promptly withdrew the funds as allowed by the court's order, and vacated the premises.
¶ 9 In the summer of 2002, both parties filed motions for summary judgment. The trial court ruled on the motions on March 18, 2003, finding that the lease was not terminated by the City's purchase of the Heartland property, but that the lease terminated when the City took possession of the premises in March 2002. The trial court also determined that the City retained condemnation authority over the Martin leasehold despite purchasing the Heartland property. The trial court relied on these determinations to grant summary judgment to the City on Martin's contract and abuse of process claims, and to Martin on the City's claim for unlawful detainer. The court found that it could not resolve the City's eminent domain claim or Martin's just compensation claim at the summary judgment stage because a factual question existed as to the value of Martin's leasehold in the premises.
¶ 10 The City sought and received permission to appeal the trial court's interlocutory order, and brings this timely appeal.
¶ 11 The City challenges the trial court's rulings denying summary judgment on the eminent domain and just compensation claims, asserting that the trial court based those rulings on incorrect interpretations of the parties' lease. A trial court's interpretation of the terms of an unambiguous, integrated contract presents a question of law and is reviewed for correctness on appeal. See ELM, Inc. v. M.T. Enters., Inc., 968 P.2d 861, 863 (Utah Ct.App.1998). The propriety of a trial court's summary judgment order is a matter of law. See WebBank v. American Gen. Serv. Corp., 2002 UT 88, ¶ 10, 54 P.3d 1139. In deciding whether summary judgment is appropriate, the appellate court reviews whether the trial court erred in applying the relevant law and whether a material fact was in dispute. See id.
¶ 12 The City argues that the lease prohibited Martin from receiving compensation in the event of public acquisition of the premises through eminent domain. We agree. Martin contractually waived his right to compensation in the event that his leasehold was condemned, transferring his compensation rights to his landlord. The City did in fact condemn the leasehold, and the City's status as Martin's landlord does not preclude such condemnation or invalidate Martin's waiver of compensation. Because we conclude that Martin waived the very compensation he now seeks, no relevant factual question remains to be answered at trial. Thus, the trial court erred in failing to grant summary judgment to the City on Martin's just compensation claim.
¶ 13 In our view, Martin's claim that he is entitled to compensation for the loss of his leasehold is resolved by the waiver language contained in the lease. Section 19.01 of the lease provides that, in the event of a total condemnation of the premises, "Tenant shall have no claim against Landlord nor the condemning authority for the value of any unexpired Lease Term of this Lease." Section 19.04 further states:
In the event of any condemnation or taking as aforesaid, whether in whole or in part, Tenant shall not be entitled to any part of the award paid for such condemnation, and Landlord shall be entitled to receive the full amount of such award; Tenant hereby expressly waiving any right or claim to any part thereof.
This waiver language is express and unambiguous, and is part of an enforceable condemnation clause. See, e.g., Fibreglas Fabricators, Inc. v. Kylberg, 799 P.2d 371, 375-76 (Colo.1990) ().
¶ 14 The parties dispute whether or not the compensation waiver language was triggered and, if so, by what event. The City argues that the clause was triggered upon the City's purchase of the Heartland property for public use. Martin argues that the triggering phrase "[i]f the whole of the premises shall be acquired or condemned by eminent domain for any public or quasi-public use or purpose" is satisfied only by the actual condemnation of the entire Heartland property and not by its acquisition by other means.
¶ 15 While some courts have held that a lease termination clause that is triggered by condemnation proceedings is also triggered by a conveyance of property by deed in lieu of condemnation,3 we need not address whether or not a conveyance in lieu of condemnation occurred in this matter or the effect of such a conveyance under Utah law. In this case, the lease termination clause and the accompanying damages waiver specifically refer to the premises leased by Martin, not to the Heartland property as a whole. The trial court established that the City had the authority to separately condemn Martin's leasehold interest, and Martin expressly concedes in his appellate brief that such a condemnation occurred.
¶ 16 Section 19.01 of the lease provides that, upon condemnation, "the Lease term shall cease and terminate as of the day possession of the premises is taken by the condemning authority." It is undisputed that the City actually took possession of the premises pursuant to court order on or around March 5, 2002, terminating Martin's leasehold interest as a matter of law. At that point, pursuant to the lease, the City could have sought compensation in its landlord capacity against itself as the...
To continue reading
Request your trial
-
Russell v. Lundberg
...appeal. ISSUES AND STANDARDS OF REVIEW ¶9 "The propriety of a trial court's summary judgment order is a matter of law." West Valley City v. Martin, 2004 UT App 327,¶ 11, 100 P.3d 248. "In deciding whether summary judgment is appropriate, the appellate court reviews whether the trial court e......