LD III v. Mapleton City ( 2020 )

2020 UT App 41THE UTAH COURT OF APPEALS
LD III LLC,
Appellant,
v.
MAPLETON CITY,
Appellee.
Opinion
No. 20190090-CA
Filed March 19, 2020
Fourth District Court, Provo Department
The Honorable James R. Taylor
No. 170401683
Denver C. Snuffer Jr., Attorney for Appellant
Eric T. Johnson and Robert Alan Patterson, Attorneys
for Appellee
JUDGE DAVID N. MORTENSEN authored this Opinion, in which
JUDGES KATE APPLEBY and RYAN M. HARRIS concurred.
MORTENSEN, Judge:
¶1 Through the years, a tract of land (Property) in Mapleton,
Utah, passed through various hands, eventually ending up in
the possession of LD III, LLC (LDIII). When LDIII sought to
develop the Property into 176 residential units, the Mapleton city
council approved a modification of the applicable zoning
ordinance. Mapleton citizens challenged the zoning change,
however, and reversed it through a voter referendum. This
prompted LDIII to seek a declaratory judgment in the district
court, where LDIII lost on summary judgment. We affirm.
LD III LLC v. Mapleton City
BACKGROUND 1
The Original Agreement
¶2 In 2003, Suburban Land Reserve, Inc. (Suburban) owned
the Property, which at the time consisted of roughly 245 acres of
undeveloped real estate on Mapleton’s east bench. Suburban
thereafter entered into a development agreement (Original
Agreement) with Mapleton, wherein Suburban conveyed about
76 acres of the Property to Mapleton. In exchange, Mapleton
passed an ordinance zoning the remaining approximate 170
acres with a 136-residential-unit maximum density and a TDR-R
overlay, meaning it was a receiving site for transferable
development rights (TDRs). 2 Mapleton also granted 77 TDRs to
Suburban.
¶3 As relevant to this appeal, the Original Agreement
included the following provisions. Section 2 provided for the
zone change of the two parts of the Property and for the
conveyance of the TDRs to Suburban. Section 6 provided that
“the Owner has a vested right to develop a maximum of one
1. On appeal from a district court’s summary judgment ruling,
we view “the facts and all reasonable inferences drawn
therefrom in the light most favorable to the nonmoving party”—
here, LDIII. Jordan Constr., Inc. v. Federal Nat’l Mortgage Ass’n,
2017 UT 28, ¶ 24, 408 P.3d 296 (cleaned up).
2. TDRs allow landowners to be “compensated for loss of
development opportunities by being given development rights
that can be used elsewhere to exceed applicable restrictions in
the ‘receiving area.’ In effect, TDRs involve shifting potential
development from one area to another, with the result that
sensitive land is preserved.” Crystal Forest Assocs., LP v.
Buckingham Twp. Supervisors, 872 A.2d 206, 211 n.8 (Pa. Commw.
Ct. 2005). See generally Utah Code Ann. § 10-9a-509.7 (LexisNexis
2015).
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hundred thirty-six (136) single family residential units on
individual lots.” Section 10 stated in full:
10. Assignment of Agreement. Owner’s rights
under this Agreement shall be personal to Owner
and shall only run with the land so long as Owner
or a company which is affiliated with or under
common ownership and control of Owner shall
own and be the Owner of the Property. In the
event that Owner intends to sell the Property or
any portion thereof to any other party, Owner shall
advise City of such intention. Only upon the
express prior written approval by the City, shall
any rights of Owner with respect to the portion of
the Property being sold be deemed transferred to
the new owner thereof. City may withhold such
approval in the exercise of its reasonable business
judgment, based upon conditions that exist at the
time of the transfer, the proposed transferee and
the history of the development of the Project prior
to such time.
Section 19 also dealt with the Property passing to another entity:
19. Successors and Assigns. This Agreement
shall be binding on the successors and assigns of
Owner. . . . In the event of an approved sale or
transfer of the Project, or any portion thereof, the
seller or transferor and the buyer or transferee shall
be jointly and severally liable for the performance
of each of the obligations contained in this
Agreement, unless . . . [otherwise] approved by
City. Alternatively, prior to such approved sale or
transfer, Owner shall obtain from buyer or
transferee a letter [meeting certain conditions].
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Finally, Section 21 provided that “this Agreement or a
memorandum providing public notice of the existence of this
Agreement shall be recorded immediately as a covenant running
with the Property herein described in order to put prospective
purchasers or other interested parties on notice as to the terms
and provisions hereof.”
Transfer of the Property to the Preserve
¶4 Ultimately, Suburban did not develop the Property as
planned. In December 2005, Suburban transferred the Property
to another entity (Preserve). Pursuant to Section 10 of the
Original Agreement, the Mapleton city council approved this
transfer. Later on, at the request of the Preserve (LDIII’s
predecessor in interest), the city council approved a change of
the base zoning of the Property from A-2 with a TDR-R overlay
to a base zone of PRC-4 without the TDR-R designation. The
PRC-4 zone is a site-specific designation that, in this case, called
for a planned residential community and the creation of a 92-
unit density cap. See Mapleton, Utah, Mun. Code § 18.82D.110
(2007) (“The total density allowed in the Preserve at Mapleton
PRC-4 zone is ninety-two (92) individual building lots and
common area buildings. No new subdivision lots shall be
permitted beyond those originally approved for the purpose of
increasing this density.”). 3 Mapleton’s zoning maps reflected the
changes. The changes were entirely in line with the Preserve’s
request; indeed, the Preserve drafted the PRC-4 zone language.
3. Although the zoning ordinance does not expressly address the
TDR-R overlay, its second sentence states, “No new subdivision
lots shall be permitted beyond those originally approved for the
purpose of increasing this density,” Mapleton, Utah, Mun. Code
§ 18.82D.110 (2007), thereby removing the TDR-R overlay as
reflected by Mapleton’s subsequent zoning maps. Furthermore,
the Preserve was satisfied with a 92-unit-maximum density and
did not request that the TDR-R overlay remain.
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¶5 After obtaining the zoning change it requested, the
Preserve executed a promissory note in favor of LDIII. In 2008,
LDIII foreclosed on the Property, which still was zoned as PRC-4
with a cap of 92 units, and obtained ownership. Mapleton did
not approve of the transfer of ownership of the Property to
LDIII, however, either before or after the foreclosure. And LDIII
does not contend that it ever obtained written approval of the
transfer of ownership.
¶6 In 2017, many years after acquiring the Property, LDIII
contracted with another company to develop it. The
development company sought approval from Mapleton for a
176-unit development on the Property. In June 2017, the
Mapleton city council acceded to the development company’s
request and modified the zoning designation of the Property to
include a TDR-R overlay and a maximum of 169 units. However,
shortly thereafter, Mapleton citizens challenged the Property’s
rezoning through a voter referendum. The referendum received
the required votes to invalidate the zoning change, and therefore
the Property ultimately did not obtain a change in its base
zoning, unit-density cap, or TDR-R overlay status.
¶7 LDIII then sought a declaratory judgment from the
district court regarding whether pertinent zoning ordinances or
the Original Agreement allowed the development plan. LDIII
also argued that the referendum was invalid. Mapleton opposed
LDIII’s lawsuit and asked the district court to dismiss it on
summary judgment. The district court granted Mapleton’s
motion and dismissed LDIII’s lawsuit.
¶8 LDIII appeals.
ISSUE AND STANDARD OF REVIEW
¶9 LDIII contends that the district court erred in granting
summary judgment to Mapleton. To support this position, LDIII
first argues that it benefits from the zoning “density entitlement”
20190090-CA 5 2020 UT App 41LD III LLC v. Mapleton City
set forth in the Original Agreement, claiming that the zoning
rights afforded to Suburban in the Original Agreement ran with
the land. LDIII alternatively claims that there is an ambiguity as
to whether the rights run with the land. LDIII also argues that
even if it did not receive its desired zoning through contractual
or property rights, it did through Mapleton city council’s 2017
decision to rezone the Property, and it claims that those rights
still exist because the referendum overriding that decision was
invalid. 4
¶10 “An appellate court reviews a [district] court’s legal
conclusions and ultimate grant or denial of summary judgment
for correctness,” giving no deference to the district court’s legal
conclusions. Jordan Constr., Inc. v. Federal Nat’l Mortgage Ass’n,
2017 UT 28, ¶ 24, 408 P.3d 296 (cleaned up). Summary judgment
is appropriate “only when, viewing all facts and reasonable
inferences therefrom in the light most favorable to the
nonmoving party, there is no genuine issue as to any material
fact and the moving party is entitled to a judgment as a matter of
law.” Morra v. Grand County, 2010 UT 21, ¶ 12, 230 P.3d 1022(cleaned up); see also Utah R. Civ. P. 56(a). We therefore review
the district court’s grant of summary judgment to Mapleton for
correctness.
ANALYSIS
¶11 LDIII searches for a legal means to increase its
developmental density rights through either the Original
4. The parties also dispute whether LDIII was time-barred from
asserting its rights and whether the Preserve (LDIII’s
predecessor in interest) waived its rights under the Original
Agreement. Because we conclude that the zoning rights
Suburban and the Preserve enjoyed under the Original
Agreement were not passed on to LDIII, we have no need to
address these other arguments.
20190090-CA 6 2020 UT App 41LD III LLC v. Mapleton City
Agreement or through the 2017 rezoning of the Property and a
claimed invalidity of the voter referendum. We address these
issues in turn.
I. The Original Agreement
¶12 The district court ruled that any rights under the Original
Agreement “did not survive [LDIII’s] foreclosure proceedings.”
We agree. “As with any contract, we determine what the parties
have agreed upon by looking first to the plain language within
the four corners of the document.” Peterson & Simpson v. IHC
Health Services, Inc., 2009 UT 54, ¶ 13, 217 P.3d 716. “When
interpreting the plain language, we look for a reading that
harmonizes the provisions and avoids rendering any provision
meaningless.” Id. (cleaned up). “Harmonizing conflicting or
apparently ambiguous contract language before concluding that
provisions are actually ambiguous is an important step in the
hierarchy of rules for contract interpretation.” Gillmor v. Macey,
2005 UT App 351, ¶ 19, 121 P.3d 57. “When the contract
provisions are clear and complete, the meaning of the contract
can appropriately be resolved by the court on summary
judgment.” Basic Research, LLC v. Admiral Ins. Co., 2013 UT 6, ¶ 5,
297 P.3d 578 (cleaned up); see also McEwan v. Mountain Land
Support Corp., 2005 UT App 240, ¶ 16, 116 P.3d 955 (“If language
within the four corners of the contract is unambiguous, the
parties’ intentions are determined from the plain meaning of the
contractual language, and the contract may be interpreted as a
matter of law.” (cleaned up)).
¶13 Having applied these fundamental steps in our review of
the Original Agreement, we conclude that the Original
Agreement did not confer zoning rights to LDIII, and the rights
enjoyed by Suburban and the Preserve did not run with the land
to LDIII. For a covenant to run with the land, as opposed to
being a personal covenant, four elements must be met: “(1) the
covenant must touch and concern the land affected by the
covenant, (2) the original parties to the covenant must have
expressly or impliedly intended the covenant to run with the
20190090-CA 7 2020 UT App 41LD III LLC v. Mapleton City
land, (3) there must be privity of estate, and (4) the covenant
must be in writing.” Stern v. Metropolitan Water Dist. of Salt Lake
& Sandy, 2012 UT 16, ¶ 40, 274 P.3d 935 (cleaned up).
¶14 Here, the second element—intent that the covenant run
with the land—was unambiguously absent under the plain
language of the Original Agreement. Indeed, the original parties
specifically limited the extent to which the covenants might run
with the land. Section 10 described the contractual rights to be
“personal” to Suburban. Section 10 also specifically stated that
the rights “shall only run with the land so long as Owner or a
company which is affiliated with or under common ownership
and control of Owner shall own and be the Owner of the
Property” or “[o]nly upon the express prior written approval by
the City, shall any rights of Owner with respect to the portion of
the Property being sold be deemed transferred to the new owner
thereof.” Thus, this plain language dictated that LDIII meet the
affiliated-ownership requirement or the city-approval
requirement for the zoning rights to pass contractually.
¶15 LDIII does not assert that it meets either requirement.
Rather, LDIII argues that its predecessors’ contractual rights ran
with the land and cites various provisions of the Original
Agreement—Sections 2, 6, 19, and 21—that it claims at least
create an ambiguity about whether the rights under the Original
Agreement ran with the land. We disagree. “A contract term is
not ambiguous simply because one party ascribes a different
meaning to it to suit his or her own interests.” Basic Research,
LLC, 2013 UT 6, ¶ 10 (cleaned up). This court faced a similar
situation in Gillmor. There, the contract stated, “in several places,
that the grants and limitations in the [a]greement [we]re
appurtenant to the land and r[a]n with the land to future
successors in interest.” Gillmor, 2005 UT App 351, ¶ 17.
However, “the [a]greement also detail[ed] a specific and limited
class of individuals who [we]re to be benefitted by” the
provisions of the contract. Id. This court explained that the
“specificity of the provision granting access to ‘Gillmor and his
immediate family to the first degree of consanguinity, and their
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spouses and children,’ undermine[d] any notion that this benefit
[wa]s somehow intended to run with the land to the benefit of all
future owners of the Gillmor property.” Id. (emphasis added)
(cleaned up). Thus, like the contract in Gillmor, the Original
Agreement expressly limited the manner in which the rights
would pass (ownership-affiliated or city-approved parties)—
classes to which LDIII indisputably does not belong.
¶16 Although other provisions of the Original Agreement,
including Sections 19 and 21, indicate that the Original
Agreement will generally “be binding on the successors and
assigns” of Suburban, and that it should be “recorded . . . as a
covenant running with the Property . . . in order to put
prospective purchasers . . . on notice as to the terms and
conditions hereof,” Section 10 explicitly specifies the conditions
under which the contractual rights, including zoning rights,
would run with the land. None of the provisions LDIII cites
contradicts Section 10; instead, they merely elaborate how the
Original Agreement operates. For instance, Section 21 was
intended to put “parties on notice as to the terms and
provisions” of the Original Agreement—one of those provisions
being Section 10. And Section 19 is best read as a general
indication that the obligations of the Original Agreement would
be binding on future owners of the Property. Moreover, that
provision twice refers to an “approved sale or transfer” of the
Property, indicating that it can be read harmoniously with
Section 10 and indicating that the drafters of the Original
Agreement clearly intended that Mapleton approve any new
owners. 5 In short, we do not see the provisions listed by LDIII as
5. What’s more, Section 2’s language that “the Property shall be
the recipient of the density transferred from” the sending site—
Mapleton’s TDR-S portion of the Property—was included to
reflect the intent to apply a TDR-R overlay to the Property, not to
grant TDRs to the Property itself. This is clear from later
language in Section 2 itself specifically granting to Suburban—as
opposed to the Property—a specified number of “density units,”
(continued…)
20190090-CA 9 2020 UT App 41LD III LLC v. Mapleton City
raising an ambiguity about whether Mapleton had to approve
any new owner of the Property for the rights under the Original
Agreement to pass. The city-approval requirement is
unambiguously a part of the Original Agreement, and LDIII
indisputably never received Mapleton’s approval.
¶17 And while all the provisions of the Original Agreement
can be read harmoniously under the interpretation advanced by
Mapleton, Section 10 would be rendered meaningless by LDIII’s
reading. Section 10 expressly provides that rights under the
Original Agreement run with the land only where Suburban or a
company affiliated with Suburban owns the Property, or where
Mapleton provides “express prior written approval” of the
transfer of any of the Owner’s rights—including TDRs—to a
new owner. Section 10 also expressly allows the City to withhold
approval. LDIII’s reading—that the zoning rights run with the
land no matter what—renders all these express provisions
without effect. Rather than an express or implied intention that
the terms of the Original Agreement would run with the land,
Section 10 provides an unambiguous intention that, without
express consent in writing, they do not.
¶18 Accordingly, because the Original Agreement is not
ambiguous, and because there is no genuine dispute as to the
lack of Section 10’s requirements being met, we affirm the
district court’s ruling that the zoning rights under the Original
Agreement did not pass to LDIII. See Basic Research, LLC, 2013
UT 6, ¶ 5.
II. Validity of the Referendum
¶19 Even if LDIII has no rights stemming from the Original
Agreement, LDIII claims that the Property nevertheless bears its
(…continued)
i.e., TDRs. And we see no ambiguity arising from Section 6 of the
Original Agreement either.
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desired zoning by virtue of the 2017 Mapleton city council
decision—which was made independent of any rights under the
Original Agreement—to rezone the Property. LDIII correctly
notes that the 2017 decision gave it the rights it sought, but that
decision was erased by a subsequent citizen referendum. LDIII
takes issue with the validity of that citizen referendum, claiming
that it was invalid because the 2017 rezoning was “an individual
property zoning decision” and thus not legislative and not
subject to a referendum. This issue indeed turns on whether the
rezoning of the Property was legislative or administrative. Krejci
v. City of Saratoga Springs, 2013 UT 74, ¶ 21, 322 P.3d 662(“[W]hen a city council exercises its legislative authority, voters
retain the constitutional prerogative of challenging its decisions
by referendum. But where the city council is acting pursuant to
its administrative authority, the voters have no such right.”).
However, LDIII is incorrect that the rezoning of the Property
was not legislative. See id. ¶ 38.
¶20 In Krejci, our supreme court held that “site-specific
rezoning [is] a legislative act—and thus subject to referendum.”
Id. 6 In so holding, the court explained that site-specific zoning is
legislative because it “requires the weighing of broad, competing
policy considerations and results in a law of general
applicability”—the “chief hallmarks of legislative action.” Id.
¶¶ 22, 31 (cleaned up). Nevertheless, LDIII wields the two
6. LDIII’s argument that the referendum was statutorily
prohibited by then-section 20A-7-101(13) of the Utah Code, now-
section 20A-7-101(15)(b), was specifically rejected by the court in
Krejci. The court explained that although “site-specific rezoning
decisions are statutorily ineligible for referendum under the
terms of this provision[,] . . . the people’s power to legislate is not
a creature of statute. It is inherent power—authority reserved by
the people in our constitution. So the legislature’s failure to
delegate referendum power is not the end of the inquiry.” Krejci
v. City of Saratoga Springs, 2013 UT 74, ¶ 24, 322 P.3d 662; see also
Utah Const. art. VI, § 1.
20190090-CA 11 2020 UT App 41LD III LLC v. Mapleton City
referendum holdings in Baker v. Carlson, 2018 UT 59, 437 P.3d
333, in an attempt to stave off Krejci’s holding and to show that
the rezoning was not legislative and therefore not referable. But
Baker’s holdings do not shed further light on the case at hand.
Neither decision was a zoning change. Rather, one dealt with
amending a site development plan, which was held to be a
legislative action, and the other was related to amending an
agreement for the development of land, which was held to be an
administrative action. Id. ¶¶ 39–40. Thus, LDIII’s focus on the
holdings in Baker is unhelpful in resolving this case, which
involves a site-specific rezoning. 7
¶21 In short, our analysis begins and ends with Krejci’s
holding. Based on it and the undisputed facts of this case, we
affirm the district court’s conclusion that the referendum was
valid.
CONCLUSION
¶22 Because the district court’s conclusions of law were
correct—entitling Mapleton to judgment as a matter of law—and
there are no genuine disputes as to any material facts, we affirm
the district court’s entry of summary judgment in favor of
Mapleton.
7. Indeed, in Baker, the supreme court cited Krejci with approval,
setting forth its holding that “even though it would only affect
one piece of property, a site-specific rezoning was generally
applicable” and therefore subject to referendum “because all
present and future owners of the site would be bound by the
decision to rezone the property.” Baker v. Carlson, 2018 UT 59,
¶ 16, 437 P.3d 333 (citing Krejci, 2013 UT 74, ¶ 32).
20190090-CA 12 2020 UT App 41