Keith v. Mtn. Resorts Dev.

This opinion is subject to revision before final
publication in the Pacific Reporter
2014 UT 32IN THE
SUPREME COURT OF THE STATE OF UTAH
BETTY KEITH,
Appellant and Plaintiff,
v.
MOUNTAIN RESORTS DEVELOPMENT, L.L.C.,
a Delaware limited liability company, et al.
Appellee and Defendant.
No. 20120792
Filed August 8, 2014
Fourth District, Heber Dep‘t
The Honorable Derek P. Pullan
No. 080500502
Attorneys:
Denise A. Dragoo, Elisabeth M. McOmber, Robert E. Mansfield,
Salt Lake City, for appellant
John A. Snow, Nicole M. Deforge, Kelley M. Marsden,
Salt Lake City, for appellee
ASSOCIATE CHIEF JUSTICE NEHRING authored the opinion of
the Court, in which CHIEF JUSTICE DURRANT, JUSTICE DURHAM,
JUSTICE PARRISH, and JUSTICE LEE joined.
ASSOCIATE CHIEF JUSTICE NEHRING, opinion of the Court:
INTRODUCTION
¶ 1 This case is about land in Park City, Utah—a little town
that has undergone many transformations. Mormon pioneers first
traveled through the area on their way to Salt Lake City. When
prospectors discovered silver in the hills, it became a mining
boomtown, then, when the price of silver fell, it was nearly
deserted as a ghost town—but industrious residents reinvented it
as a luxury resort destination, which it remains today. At the
heart of this appeal is a dispute about land once owned by one of
KEITH v. MOUNTAIN RESORTS
Opinion of the Court
the original Park City mining magnates—appellant‘s great-
grandfather, Mr. David Keith—who along with Mr. Thomas
Kearns founded the highly successful Silver King Mining
Company in Park City in the 1890s. The property that gave rise to
this dispute is located near what is now the luxury ski resort Deer
Valley. Appellant, Ms. Betty Keith, and her two siblings,
Ms. Geneva Keith Ulm and Mr. David Keith IV, inherited the
parcels of land at issue from their father, Mr. David Keith III.
Following the bequest, the siblings owned the relevant parcels as
tenants in common with each other and with United Park City
Mines (UPCM).
¶ 2 After Ms. Keith inherited the property in 1996, she and
UPCM decided to jointly develop the parcels. In 2002, the parties
submitted a development plan to the county, which was
approved. UPCM was later acquired by Talisker Corporation,
Mountain Resort Developments‘ (MRD) parent company.
Unfortunately, MRD and Ms. Keith could not agree how to jointly
develop the property, nor could they agree on a purchase price for
Ms. Keith‘s interest in the parcels. In 2005, after several years of
unsuccessful negotiation, MRD filed an action to partition the
property. The parties ultimately entered a settlement agreement
(2005 settlement agreement) and exchanged interests in the
parcels. Ms. Keith gained an undivided interest in parcel A and
MRD received an undivided interest in parcels B and C.
Thereafter, MRD asserted that Ms. Keith had retained no
development rights under the development plan. Ms. Keith sued
for breach of contract, fraudulent inducement, and tortious
interference with prospective economic relations, among other
claims. The district court granted summary judgment to MRD
and dismissed all of Ms. Keith‘s claims. We affirm.
BACKGROUND
¶ 3 In early 2002, Ms. Keith and UPCM agreed that UPCM
would submit an application to Wasatch County for approval of a
large real estate development—‖Pioche Mountain Estates‖—on
the common property (development plan). The proposed
development covered 321 acres; contained 183 ―equivalent
residential units‖ (ERUs)1 including condominiums, ski lodges,
1 An ERU is the Wasatch County equivalent of a development
right that assigns density to the development. Development
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and residential lots; and spanned the entirety of the three parcels
commonly owned by Ms. Keith and UPCM (later MRD). Wasatch
County approved the preliminary development plan (2002
approval).
¶ 4 Ms. Keith and MRD began to disagree about the
development. They could not agree how to proceed together nor
on a purchase price for Ms. Keith‘s interests in the three parcels.
They continued to negotiate and exchanged various offers in an
attempt to reach an agreement.
¶ 5 On April 30, 2004, MRD made an offer to exchange
interests in the parcels with Ms. Keith and share in development
costs ―based upon our proportionate densities‖ (2004 settlement
offer). Under the terms of this offer, Ms. Keith would have
continued as part of the development and would have shared in
the development costs based upon the number of ERUs in
proportion to her property interest. Ms. Keith rejected the offer.
¶ 6 In 2004, MRD purchased Ms. Keith‘s siblings‘ interests in
the parcels.2 At that point, MRD owned all of parcels A, B, and C,
except for Ms. Keith‘s interests. Ms. Keith‘s interests comprised
one-third of parcel A, 8.3 percent of parcel B, and 11.12 percent of
parcel C. Parcel A consisted of approximately forty acres. Parcels
B and C together covered approximately 280 acres.
rights in Wasatch County‘s ―Mountain Zone‖ are assigned based
in part upon the open space available to support such
density. WASATCH CNTY., UTAH, CODE §§ 16.29.08, -14
(Sterling 2013); available at http://www.sterlingcodifiers.com
/codebook/index.php?book_id=940. Because the relevant
provisions of the Wasatch County Code are substantively
identical, as a convenience to the reader we cite throughout this
opinion to the current version of the code.
2 The special warranty deed granted by Ms. Keith‘s siblings to
MRD specified that the land was transferred, together with ―all
right, title and interest of the Grantor in and to all improvements
located on the Property, all appurtenances, easements, rights-of-
way and all other rights and privileges appertaining to the
Property, [and] all development entitlements, approvals and permits
pertaining to the Property.‖ (emphasis added).
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KEITH v. MOUNTAIN RESORTS
Opinion of the Court
¶ 7 In January 2005, MRD sought legal partition of its
ownership interest from Ms. Keith‘s ownership interest in parcels
A, B, and C, while continuing to engage in settlement negotiations
with Ms. Keith. On April 28, 2005, Ms. Keith submitted an offer to
settle the partition action (2005 settlement offer). She made two
offers:
First . . . [Ms. Keith] is willing to make an offer of
$5,100,000 for [MRD‘s] interest in the parcels. In the
alternative, she would trade her interest in all other
parcels if [MRD] would convey to her a hundred
percent interest in Parcel A.
¶ 8 MRD accepted the second offer on the terms stated by
Ms. Keith. Ms. Keith and MRD exchanged special warranty deeds
whereby MRD conveyed all of its interest in parcel A and
Ms. Keith conveyed to MRD all of her interest in parcels B and C.
The parties then stipulated to the dismissal of the partition action.
¶ 9 The special warranty deeds exchanged by the parties
contained mirror language expressing the intent to mutually
exchange 100 percent interest in the respective parcels,
Together with all the appurtenances, rights and
privileges thereunto belonging; and Subject to
restrictions, reservations, covenants, conditions,
easements and right-of-ways now of record, all other
matters now of record, and general property taxes,
assessments and charges for the year 2005 and
thereafter.3
¶ 10 Following the settlement, Ms. Keith discovered that
MRD no longer considered her a part of the Pioche development
plan and instead intended to pursue the development plan
without her and without parcel A, which Ms. Keith now owned in
its entirety. The parties do not dispute that MRD informed
county officials and potential buyers of Ms. Keith‘s property that
3 The deed Ms. Keith granted to MRD and the mirror deed
MRD granted her are different from the deeds Ms. Keith‘s siblings
granted to MRD. Specifically, Ms. Keith‘s deed omits the
language purporting to grant ―all development entitlements,
approvals and permits pertaining to the Property.‖
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MRD had retained all 183 ERUs approved in the 2002 approval of
the Pioche development and that it believed that no ERUs were
transferred to Ms. Keith in the settlement agreement.4
¶ 11 After the exchange of deeds under the 2005 settlement
agreement, Ms. Keith continued to pay Wasatch County for forty-
eight ERUs as they related to the water rights of the property.
Additionally, a comparison of the map of parcel A with the
proposed layout for Pioche Mountain Estates shows that four
townhome buildings—each containing between ten and thirteen
units—and four ski club buildings were to be located on parcel A
under the 2002 approval.
¶ 12 Ms. Keith sued MRD for breach of contract, breach of
warranty, fraudulent inducement, tortious interference with
prospective economic relations, declaratory relief, and to quiet
title.5 The parties filed cross-motions for summary judgment and
the district court found in favor of MRD on all claims.
¶ 13 The district court granted summary judgment in favor of
MRD on Ms. Keith‘s claims of breach of contract and breach of
warranty because it held that MRD and Ms. Keith could not
lawfully transfer ERUs that the Wasatch County Planning
Commission had granted under the 2002 approval. This decision
was based on the district court‘s interpretation of Wasatch
County, Utah, Code section 16.27.10(C)(3) (Sterling 2013)6 and on
4 Wasatch County Code requires 160 acres minimum for a
large development in the Mountain Zone. WASATCH CNTY., UTAH,
CODE § 16.09.03 (Sterling 2013). Parcel A was about forty acres.
Thus, outside of the 2002 approval, Ms. Keith officially retained
only the ability to build at most two single family homes on her
parcel. MRD attempted to go forward with the Pioche
development on its land. MRD‘s parcels, B and C, together were
well over 160 acres.
5 Ms. Keith also sued Wasatch County. In 2010, to resolve the
litigation, the county conditionally approved fifty-four ERUs for
Ms. Keith‘s property. In October 2010, Ms. Keith sold her
property to a third party.
6 Previously codified at WASATCH CNTY., UTAH, CODE
§ 16.27.10(3)(c) (Sterling 2010).
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KEITH v. MOUNTAIN RESORTS
Opinion of the Court
its finding that MRD and Ms. Keith abandoned the development
plan and decided to develop their respective parcels separately.7
¶ 14 The district court granted summary judgment in favor of
MRD on Ms. Keith‘s claim for fraudulent inducement because it
found that Ms. Keith did not present sufficient evidence of the
elements required for fraudulent inducement. The court found
that Ms. Keith presented (1) no evidence that MRD ―made any
representation about apportionment or transfer of ERUs which
[Ms.] Keith relied upon in entering into the settlement
agreement,‖ and (2) no evidence that MRD intended to deceive
Ms. Keith when the parties entered into the settlement agreement.
¶ 15 Finally, the district court concluded that as a matter of
law, under the undisputed facts, MRD did not tortiously interfere
with Ms. Keith‘s contractual interests by an improper means or
for an improper purpose. According to the court, ―MRD had a
proper purpose for asserting that it did not transfer ERUs to
Keith,‖ specifically, its ―genuinely held belief‖ that it did not
transfer any ERUs to Ms. Keith in the settlement agreement. The
7 The district court interpreted the Wasatch County Code
phrase, ―Preliminary approvals shall be for the entire property,‖
to mean that in the 2002 preliminary approval the Wasatch
County Planning Commission allocated 183 ERUs for the entire
321-acre property—parcels A, B, and C. The district court
reasoned that ―[t]he only right to ERUs transferred to Keith under
the settlement agreement was conditioned upon development of
parcels A, B, and C consistent with the 2002 preliminary plan.‖
But the district court found that Ms. Keith and MRD had
abandoned the preliminary plan by settling the partition action.
The district court further concluded that any transfer of ERUs
from MRD to Ms. Keith in the settlement agreement was legally
impossible because reallocation of ERUs for separately planned
and developed parcels is a government function. Finally, the
district court concluded the settlement agreement did not transfer
ERUs to Ms. Keith even if it were legally possible to do so. It
reasoned that because MRD and Ms. Keith never agreed upon the
―number of ERUs to be allocated to their respective parcels, or the
method by which this number would be ascertained,‖ there was
no ―meeting of the minds as to this material term‖ and the
settlement agreement was ―unenforceable.‖
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court concluded that MRD ―did not utilize improper means in
expressing its opinion‖ about the ERUs because MRD merely
expressed views ―regarding the import of legal documents to
public officials at planning meetings in connection with the
planning process.‖ Ms. Keith appeals the district court‘s decision
to grant summary judgment on her claims for breach of contract,
breach of warranty, fraudulent inducement, and tortious
interference with prospective economic relations. We find that
the district court properly granted summary judgment in favor of
MRD on all claims and therefore affirm.
ISSUES AND STANDARD OF REVIEW
¶ 16 Ms. Keith appeals the district court‘s grant of summary
judgment in favor of MRD and corresponding dismissal of all of
Ms. Keith‘s claims. We review a district court‘s grant of summary
judgment for correctness and ―accord no deference to [its]
conclusions of law.‖8 Summary judgment is appropriate only if
―there is no genuine issue as to any material fact‖ and ―the
moving party is entitled to a judgment as a matter of law.‖9 In
evaluating whether the district court correctly concluded that
there were no genuine issues of material fact, we construe the
facts and any inferences drawn from those facts in the light that is
most favorable to the nonmoving party, Ms. Keith.10
¶ 17 Ms. Keith also appeals the district court‘s denial of her
motion for summary judgment on her breach of contract claim.
When a district court interprets a deed as a matter of law, ―we
accord its construction no particular weight, reviewing its action
under a correctness standard.‖11 ―Whether a contract‖ or a deed
8 Torian v. Craig, 2012 UT 63, ¶ 13, 289 P.3d 479.
9 UTAH R. CIV. P. 56(c).
10 Peterson v. Sunrider Corp., 2002 UT 43, ¶ 13, 48 P.3d 918.
When there are cross-motions for summary judgment, we view
the facts in the light most favorable to the losing party. See
Cabaness v. Thomas, 2010 UT 23, ¶¶ 2–3, 232 P.3d 486.
11 Selvig v. Blockbuster Enters., LC, 2011 UT 39, ¶ 18, 266 P.3d
691 (internal quotation marks omitted); see also Stern v. Metro.
Water Dist., 2012 UT 16, ¶ 21, 274 P.3d 935; Ault v. Holden, 2002 UT
33, ¶ 37, 44 P.3d 781; Cornish Town v. Koller, 758 P.2d 919, 921
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KEITH v. MOUNTAIN RESORTS
Opinion of the Court
―is ambiguous is a question of law, which we review for
correctness.‖12 If an ambiguity exists in the deed, then there is a
―factual issue as to what the parties intended,‖ and summary
judgment would generally be inappropriate.13
ANALYSIS
¶ 18 Ms. Keith argues that MRD improperly made statements
and proceeded as though it had retained all of the ERUs in the
2002 approval because she believes that forty-eight ERUs were
conveyed to her by the special warranty deed. She supports her
position by citing (1) language from MRD‘s 2004 settlement offer
that suggested her future retention of ERUs, (2) the fact that she
paid for water rights in the amount of forty-eight ERUs on parcel
A, and (3) a comparison of her land map with the Pioche
development map from the 2002 approval, showing the planned
location of buildings and lots. We disagree and therefore affirm
the district court‘s summary judgment ruling.
I. BREACH OF CONTRACT
¶ 19 Ms. Keith asserts that the district court erred when it
granted summary judgment to MRD on her breach of contract
claim.14 She argued below, and renews her argument on appeal,
(Utah 1988) (―[I]n the absence of ambiguity, the construction of a
deed is a question of law for the court.‖).
12 Peterson, 2002 UT 43, ¶ 14; see also Kimball v. Campbell, 699
P.2d 714, 716 (Utah 1985) (―A contract‘s interpretation may be
either a question of law, determined by the words of the
agreement, or a question of fact, determined by extrinsic evidence
of intent.‖).
13 Peterson, 2002 UT 43, ¶ 14 (internal quotation marks
omitted); accord RHN Corp. v. Veibell, 2004 UT 60, ¶ 40, 96 P.3d 935(―[E]xtrinsic evidence is admissible to illuminate the intent of the
parties if the terms of a deed are ambiguous.‖ (internal quotation
marks omitted)).
14 Ms. Keith also appeals the district court‘s grant of summary
judgment on her claim of breach of warranty. But she fails to
make any argument that MRD breached a covenant of title. See,
e.g., Sanpete Am., LLC v. Willardsen, 2011 UT 48, ¶¶ 60–62, 269 P.3d
118 (explaining that by law, warranty deeds include certain
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that MRD breached the terms of the ―2005 Settlement Agreement
by refusing to confirm . . . the division of the ERUs that was
agreed to.‖ Ms. Keith argues that ―the terms of the 2005
Settlement Agreement were contained in three documents‖—
Ms. Keith‘s letter making the offer, MRD‘s letter accepting that
offer, and the deeds themselves.15 MRD agrees that ―these
documents constitute the sum total of the parties‘ agreement‖ and
characterizes the ―contract at issue‖ as the ―settlement
agreement,‖ which it states ―was effected by the exchange of
deeds.‖ Neither party raised the doctrine of merger, which
―provides that upon delivery and acceptance of an unambiguous
deed, all prior negotiations and agreements are deemed merged
therein.‖16 We will ignore this omission, however, because the
contents of the two letters—Ms. Keith‘s offer and MRD‘s
acceptance—neither materially add to nor detract from the
language in the special warranty deeds. 17
covenants of title). Both because Ms. Keith failed to brief her
breach of warranty claim and because the claim appears to have
no merit, we will not address it. See id. ¶ 64 n.14 (―We will not
address inadequately briefed issues‖). A special warranty deed is
a deed ―in which the grantor covenants to defend the title against
only those claims and demands of the grantor and those claiming
by and under the grantor.‖ BLACK‘S LAW DICTIONARY 477 (9th ed.
2009). Since Ms. Keith did not allege a title defect, her claim for
breach of warranty fails as a matter of law and was appropriately
dismissed.
15 Technically, this would be four documents.
16 Nelson v. Gregory Cnty., 323 N.W.2d 139, 141 (S.D. 1982);
accord Spears v. Warr, 2002 UT 24, ¶ 13, 44 P.3d 742 (―The merger
doctrine, as a general rule, declares that on delivery and
acceptance of a deed the provisions of the underlying contract for
the conveyance are deemed extinguished or superseded by the
deed.‖ (internal quotation marks omitted)), abrogated on other
grounds by Tangren Family Trust v. Tangren, 2008 UT 20, ¶ 16 n.20,
182 P.3d 326.
17 Ms. Keith‘s 2005 settlement offer, which MRD accepted,
consisted of one sentence stating only that Ms. Keith ―would trade
her interest in all other parcels if [MRD] would convey to her a
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KEITH v. MOUNTAIN RESORTS
Opinion of the Court
¶ 20 Ms. Keith appears to conflate two legal theories.
Ms. Keith argues (1) that the parties intended to include the ERUs
granted by the county in the 2002 approval in their agreement and
in the deeds and (2) that the ERUs were in fact included in the
deed‘s unambiguous language. To the extent she implies that the
parties intended to include ERUs in the conveyance but mistakenly
did not, she has inadequately briefed a request for deed
reformation. Reformation of a written instrument may be proper
when a party alleges that the writing did not conform to the intent
of the parties.18 However, Ms. Keith has not asked us to reform
the deed, nor has she argued any of the three justifications for
reformation: (1) mutual mistake, (2) unilateral mistake where the
other party knew of the mistake and kept silent, and (3) unilateral
mistake caused by the other party‘s fraudulent affirmative
behavior.19 Both parties confine their contract analysis to
Ms. Keith‘s deed, which they both claim was not ambiguous and
should be interpreted as a matter of law. Because Ms. Keith
frames her argument as a question of deed interpretation, and
because we believe this is the proper inquiry, we too will focus
our attention on the deed.
¶ 21 ―Deeds are to be construed like other written
instruments, and where a deed is plain and unambiguous, parol
evidence is not admissible to vary its terms.‖20 ―[C]ourts
interpreting a deed should employ all appropriate tools of
hundred percent interest in Parcel A.‖ To the extent that
Ms. Keith suggests that this language is relevant to the parties‘
intent, she has not adequately briefed this claim. Ms. Keith does
not explicitly argue that language in the 2005 settlement
agreement has independent significance or supplements the deed
language. Nor do she or MRD address the relevance of the
doctrine of merger. Nevertheless, Ms. Keith‘s breach of contract
claim arises entirely out of the deed language, and thus we will
likewise confine our analysis to the deed.
18 Jensen v. Manila Corp. of the Church of Jesus Christ of Latter-day
Saints, 565 P.2d 63, 64–65 (Utah 1977).
19 See id.20 Hartman v. Potter, 596 P.2d 653, 656 (Utah 1979); see also Ault
v. Holden, 2002 UT 33, ¶ 37, 44 P.3d 781.
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construction to arrive at the best interpretation of its language.‖21
In interpreting a contract or a deed, ―we look to the writing itself
to ascertain the parties‘ intentions.‖22 ―Specifically, we determine
the parties‘ intent from the plain language of the four corners of
the deed.‖23
¶ 22 ―[T]he intention of the parties to a conveyance is open to
interpretation only when the words used are ambiguous.‖24
Accordingly, ―[i]f the language of the [deed] is unambiguous, the
intention of the parties may be determined as a matter of law
based on the language of the [deed].‖25 We hold that the language
used in the special warranty deed granted by MRD to Ms. Keith
was unambiguous and can be interpreted as a matter of law.
¶ 23 The language of the special warranty deeds exchanged
between the parties was identical. Each deed stated, in pertinent
part,
Grantor, hereby CONVEYS AND WARRANTS
specially against all claiming by, through or under
Grantor, and not otherwise, to . . . Grantee . . . all of
Grantor‘s right, title and interest in the real property
in Wasatch County, State of Utah, as follows: See
[attached land description] . . . Together with all the
appurtenances, rights, and privileges thereunto
belonging; and Subject to restrictions, reservations,
covenants, conditions, easements and right-of-ways
now of record, all other matters now of record, and
general property taxes, assessments and charges for
the year 2005 and thereafter.
¶ 24 Both parties present competing interpretations of the
deed language. Namely, the parties dispute whether the deed
21 Stern v. Metro. Water Dist., 2012 UT 16, ¶ 33, 274 P.3d 935.
22 Selvig v. Blockbuster Enters., LC, 2011 UT 39, ¶ 23, 266 P.3d
691 (internal quotation marks omitted).
23 Ault, 2002 UT 33, ¶ 38.
24Hartman, 596 P.2d at 656; Cornish Town v. Koller, 758 P.2d 919,
921 (Utah 1988).
25 Peterson v. Sunrider Corp., 2002 UT 43, ¶ 18, 48 P.3d 918.
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KEITH v. MOUNTAIN RESORTS
Opinion of the Court
language granted the ERUs contained in the 2002 approval.
Though the parties disagree about the meaning of the deed
language ―rights, and privileges,‖ this does not mean that the
deed is ambiguous.26 A deed‘s language is ambiguous only if the
parties have both advanced a ―tenable‖ interpretation of the
language.27 ―[A] party cannot make a successful claim of
ambiguity based on usage of a term that is not reasonable or is the
product of forced or strained construction.‖28
¶ 25 Ms. Keith argues that the deed language granting ―all of
Grantor‘s right, title and interest‖ in the real property, ―together‖
with all ―appurtenances, rights, and privileges‖ and ―[s]ubject to
. . . all other matters now of record‖ includes development rights.
Specifically, she argues that the density (ERUs) allocated to the
undivided property in the 2002 approval was an independent
right that ―vested‖ in her parcel and survived the transfer of
ownership. Ms. Keith invokes the vested rights doctrine and
argues that the 2002 approval created property rights that vested
in her parcel and were accordingly ―rights‖ and ―privileges‖ as
stated in the deed. We must therefore determine whether the
ERUs were a ―vested right‖ that attached to parcel A and would
have run with the land.29 We hold that, under these
circumstances, they were not; and therefore Ms. Keith‘s
26 Winegar v. Froerer Corp., 813 P.2d 104, 109 (Utah 1991) (―[T]he
fact that the parties differ as to the interpretation of an agreement
does not alone establish that ambiguity exists.‖); see also Stern,
2012 UT 16, ¶ 21 n.7 (court will apply ―all relevant tools of
construction‖ before deeming a deed ―ambiguous‖ such that
extrinsic evidence of intent becomes relevant).
27Daines v. Vincent, 2008 UT 51, ¶ 30, 190 P.3d 1269 (internal
quotation marks omitted).
28 Id. ¶ 30 n.5 (internal quotation marks omitted).
29 We caution that this case does not present the question of
whether or when the provisions of a county‘s development
approval become ―vested rights‖ such that the county can no
longer take them away. Here we are asked to determine whether
ERUs granted by a county in a development approval are ―rights‖
as between the private parties, not with regard to the government.
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interpretation of the deed is not reasonable and her breach of
contract claim fails as a matter of law.
¶ 26 We first discuss the nature of a preliminary development
approval and its attendant ERUs. We then determine that the
deed did not include the development rights granted by the 2002
approval. Finally, we conclude that Ms. Keith‘s interpretation of
the deed language is not reasonable. The plain language of the
deed does not and cannot under these circumstances include the
provisional rights granted by the county in the 2002 approval.
¶ 27 In order to develop property in Wasatch County, as in
most counties, a developer must obtain a permit from the county.
Wasatch County imposes different restrictions depending on the
size of the development, the nature of the development, and the
―zone‖ that it is in. Each zone has permitted principal uses and
permitted conditional uses. Conditional uses are allowed only if
the county grants the developer a conditional use permit. The
property at issue in this case was in the ―Mountain Zone,‖ and
thus under Wasatch County Code any uses that are part of a
―planned performance development‖30 (for example, the
construction of multi-family residences, ski lodges, or hotels) are
conditional uses and would require a conditional use permit.
Additionally, the county code states that planned performance
developments in the Mountain Zone must have a minimum of 160
acres.31
30 The Wasatch County Code does not explicitly define
―planned performance development‖ but states generally that the
―purpose of the Planned Performance Developments Chapter is to
encourage imaginative and efficient utilization of land, to develop
a sense of community, and to ensure compatibility with the
surrounding neighborhoods . . . This is accomplished by
providing greater flexibility in the location of buildings on the
land, the consolidation of open spaces and clustering of dwelling
units.‖ WASATCH CNTY., UTAH, CODE § 16.29.01 (Sterling 2013). In
2010, the code also stated that planned performance
developments were specifically applicable to only two zones, one
of which was the Mountain Zone. Id. § 16.29.02 (Sterling 2010).
31 Id. §§ 16.09.03, 16.29.08 (Sterling 2013).
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Opinion of the Court
¶ 28 ERU is another way of saying population density.32 The
Wasatch County Code defines ERUs as ―[t]he number of
residential equivalents to determine density based on sewer,
water and square footage of a structure.‖33 Under the Utah Code,
an ERU is ―a dwelling, unit, or development that is equal to a
single-family residence in terms of the nature of its use or impact
on an improvement to be provided in the assessment area.‖34
¶ 29 Finally, we note that the Wasatch County Code also
states that ―[a] conditional use permit is transferable with the title
to the underlying property so that an applicant may convey or
assign an approved project without losing the approval so long as
all conditions continue to be met.‖35 It continues, ―[t]he applicant
32 See, e.g., id. § 16.29.08(B) (Sterling 2013) (―Any mountain
zone (M) development more dense than one ERU for every five
(5) net developable acres must earn additional density by
complying with items listed on the performance chart.‖).
33 Id. § 16.04.02 (Sterling 2013).
34 UTAH CODE § 11-42-102(20).
35 WASATCH CNTY., UTAH, CODE § 16.23.06(A) (Sterling 2013)
(emphasis added). Though neither party addresses expiration of
the permit in their briefing, Wasatch County Code § 16.23.06(C)
states that
[u]nless otherwise specified in the motion granting a
conditional use permit, a permit that has not been
utilized within twelve (12) months from the approval
date, shall become null and void by operation of law.
Once any portion of the conditional use permit is
utilized, the conditions related thereto become
immediately operative and must be strictly obeyed.
Utilization shall be construed to mean pouring of
concrete, or commencement of framing on
construction, or commencement of the use or uses for
which the permit was granted.
However, because this issue has not been raised, we do not
address it.
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cannot transfer the permit off the site on which the approval was
granted.‖36
¶ 30 ―Until the rights vest on a particular piece of property,
the city or state can change land-use and zoning regulations and
apply the new laws to the development of the property.‖37 The
vested rights doctrine is the body of law that addresses at what
point development rights ―vest‖ such that subsequent zoning
changes cannot be retroactively applied.38 This area of law
generally concerns the constitutional rights of landowners harmed
by post-approval changes to county or municipal permitting and
zoning regulations.39 The common problem seen in these cases is
that a landowner or developer applies for and receives the local
government‘s approval to build a development, takes various
steps in reliance on that approval, and then the local government
changes the applicable regulations to the detriment of the
developer. This is not the case here.
¶ 31 In Utah, rights in a development application vest upon
submission of a completed application that conforms to the
county land use and zoning ordinances in effect at the time.40
Thus, the submission of the Pioche Mountain Estates development
plan did create certain ―vested‖ rights in the 321 acres upon
which the approval was granted. But the right created was the
36 Id.37 Thomas G. Pelham et al., “What Do You Mean I Can’t Build!?”
A Comparative Analysis of When Property Rights Vest, 31 URB. LAW.
901, 901 (1999) (footnote omitted).
38 See W. Land Equities, Inc. v. City of Logan, 617 P.2d 388, 390–96
(Utah 1980) (―[A]dopting the rule that an applicant is entitled to a
building permit or subdivision approval if his proposed
development meets the zoning requirements in existence at the
time of his application and if he proceeds with reasonable
diligence, absent a compelling, countervailing public interest.‖).
39 See John J. Delaney & William Kominers, He Who Rests Less,
Vests Best: Acquisition of Vested Rights in Land Development,
23 ST. LOUIS U.L.J. 219, 221–22 (1979).
40 UTAH CODE § 17-27a-508; Western Land Equities, 617 P.2d at
396.
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KEITH v. MOUNTAIN RESORTS
Opinion of the Court
right not to have the county revoke approval of the development
based on a change in the applicable zoning laws.41 A
development approval does not create independent free-floating
vested property rights—the rights obtained by the submission
and later approval of a development plan are necessarily
conditioned upon compliance with the approved plan.
¶ 32 When a county approves property for development but
then that property is sold to someone else, no additional approval
is necessary ―so long as the [new owner‘s] use [is] consistent with
that that had already been approved.‖42 This rule is consistent
with the Wasatch County Code, which states that ―[a] conditional
use permit is transferable with the title to the underlying property
so that an applicant may convey or assign an approved project
without losing the approval, so long as all conditions continue to be
met.‖43 Here, however, the conditional use permit (i.e., the 2002
approval) was for a 321-acre piece of property. Under the 2005
settlement agreement, that property was divided into two parts—
and there was no agreement between the parties to continue to
develop the properties together. Ms. Keith‘s forty-acre parcel was
not the ―underlying property‖44 upon which the approval was
granted and thus the rights attendant to the approval did not
survive the division. In other words, this changed condition
destroyed the approval. Accordingly, there was no vested right
that ran with parcel A.
¶ 33 Ms. Keith, as the purchaser of parcel A, did not obtain a
―vested‖ right in the ERUs allocated under the 2002 approval
because the 2002 approval applied to all three parcels. In other
41 W. Land Equities, 617 P.2d at 395–96 (―A property owner
should be able to plan for developing his property in a manner
permitted by existing zoning regulations with some degree of
assurance that the basic ground rules will not be changed in
midstream.‖).
42 Maintain Our Desert Env’t. v. Town of Apple Valley, 15 Cal.
Rptr. 3d 322, 332 (Cal. Ct. App. 2004).
43WASATCH CNTY., UTAH, CODE § 16.23.06(A) (Sterling 2013)
(emphasis added).
44 Id.
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words, the density allocated to the Pioche development as a
whole did not create independent rights to ERUs that attached to
parcel A. Once parcel A was divorced from the property that was
the subject of the approval, and in the absence of any agreement
to continue to develop the properties together under the approved
plan, Ms. Keith did not retain any right to hold on to ERUs
granted under the approval. Accordingly, the deed‘s language
granting ―rights and privileges‖ could not have included the
ERUs. Ms. Keith asks us to hold that provisions of a development
approval vest in and run with the land even when that land has
been divided and the separate owners no longer agree to develop
the property in accordance with the approval. This argument fails
as a matter of law. Accordingly, Ms. Keith‘s interpretation of the
deed language is not reasonable.
¶ 34 We note further that a county‘s approval of a
development plan and the corresponding assignment of density
(ERUs) is not a matter that is within the control of private parties.
The county regulations themselves contradict Ms. Keith‘s
interpretation of the deed language by stating that development
approvals made for one piece of land cannot be transferred to a
different piece of land.45 Insofar as Ms. Keith‘s deed was for a
different, smaller piece of land than the land upon which the
development approval was granted, and because she was not
working together with MRD to comply with the conditions of the
approval, the county‘s regulations extinguished any right
Ms. Keith might have had to ERUs granted in that approval.
¶ 35 Ms. Keith makes a number of arguments concerning the
parties‘ alleged intent to include ERUs when they exchanged the
deeds.46 But it is not appropriate for us to evaluate the parties‘
45Id. (―The applicant cannot transfer the permit off of the site
on which the approval was granted.‖).
46 For example, Ms. Keith contends that the parties intended to
include ERU allocation in their contract by pointing to the 2004
settlement offer, in which MRD‘s predecessor proposed that the
parties could exchange interests in the properties and then
continue working together on the development plan, and that
Ms. Keith would ―share in such costs based upon our
proportionate densities.‖ Ms. Keith, however, rejected that offer.
Ms. Keith mischaracterizes the record when she states that her
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KEITH v. MOUNTAIN RESORTS
Opinion of the Court
intent unless the language on the face of the deed is ambiguous—
which it is not.47
¶ 36 Ms. Keith also appears to argue that the ERUs
constituted a covenant that runs with the land. Ms. Keith‘s
briefing of this argument is inadequate, as she fails to provide
―reasoned analysis‖ and instead provides only ―bald citations‖48
to support her assertion that the parties ―were conveying the
rights and interests that existed in the property,‖ which ―included
. . . the ERUs that had already been allocated‖ under the 2002
approval. Ms. Keith points out that some courts have found that
density restrictions and open space agreements can sometimes
constitute covenants that run with the land.49 She fails to brief the
law of real covenants, however, and if she had, she would have
noted the basic rule that a covenant that runs with the land is ―a
formal agreement or promise . . . to do or not do a particular act.‖50
―eventual offer to settle the partition litigation was the same offer
that was made in the course of these prior negotiations with
MRD.‖ It was not.
47 Ault, 2002 UT 33, ¶ 38 (―[W]e determine the parties‘ intent
from the plain language of the four corners of the deed.‖); see also
Stern, 2012 UT 16, ¶¶ 59–60.
48 Allen v. Friel, 2008 UT 56, ¶ 9, 194 P.3d 903 (internal
quotation marks omitted). For example, Ms. Keith cites Raymond
v. Holliday, No. 297146, 2011 WL 2462671, at *2, *3 (Mich. Ct. App.
June 21, 2011) for the proposition that ―density restrictions are
covenants that run with the land.‖ But in that case the Michigan
Court of Appeals held that a contract containing an explicit
promise that the grantee would build only one building per ten
acres was a covenant running with the land. Id. Ms. Keith fails to
explain how this case is similar to her own, and indeed it is
readily distinguishable because here Ms. Keith does not allege the
existence of any of the elements of a real covenant.
49 See, e.g., Canyon Meadows Home Owners Ass’n v. Wasatch
Cnty., 2001 UT App 414, 40 P.3d 1148 (addressing whether an
open space agreement was a covenant that ran with the land).
50BLACK‘S LAW DICTIONARY 419 (9th ed. 2009) (emphasis
added).
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Here, Ms. Keith has failed to address any of the four
characteristics of a real covenant51 and thus has failed to
adequately brief this argument. Accordingly, we are
unpersuaded by the argument and will not address it beyond
saying that even if Ms. Keith had properly briefed this claim, she
almost certainly would not have been able to prove the elements
of a real covenant.52
¶ 37 Finally, Ms. Keith has not alleged that the parties had a
separate agreement to continue to develop the properties together
in accordance with the development plan—which is the only way
that the 2002 approval could have remained viable and in effect.
To the contrary, Ms. Keith acknowledged that when she entered
the settlement, she believed that each party would ―be able to
proceed independently of one another to develop their parcels.‖
In a deposition on September 26, 2011, Ms. Keith acknowledged
that there was no agreement between the parties to follow the
development plan.53 As MRD points out, ―the very cause of the
51 Flying Diamond Oil Corp. v. Newton Sheep Co., 776 P.2d 618,
622–23, 629 (Utah 1989) (stating that ―(1) The covenant must
‗touch and concern‘ the land; (2) the covenanting parties must
intend the covenant to run with the land‖; (3) ―there must be
privity of estate‖; and (4) the covenant ―must be in writing‖).
52This is because (1) the ERUs most likely do not ―touch and
concern‖ the land because they are a conditional benefit granted
by Wasatch County, which is dependent on compliance with the
approved development plan—compliance that was lacking here;
(2) Ms. Keith has pointed to no evidence of MRD‘s intent to
covenant, express or otherwise; and (3) the purported covenant
was not put into writing. See id., 776 P.2d at 623.
53 Q: Did you have an understanding one way or the
other whether or not the development would
proceed forward jointly between you . . . and
Talisker [MRD] after a partition order was
entered?
Keith: Well, my understanding was that the
development would continue, but I would be in
charge of Parcel A, they would be in charge of
Parcels B and C.
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KEITH v. MOUNTAIN RESORTS
Opinion of the Court
Partition Action‖ was ―the parties‘ inability to reach an agreement
regarding joint development of the property.‖ We hold that
absent any agreement to develop the properties together, the
provisions of the 2002 approval were no longer in effect and MRD
did not breach the settlement agreement or the terms of the deed.
¶ 38 In sum, because (1) the 2002 approval was granted for
the entire 321 acres, (2) the property was divided, (3) the parties
failed to follow the conditions of the development plan, (4) there
was no contract between the parties to continue to follow the plan,
and (5) the plain language of the deed did not address a
development right like ERUs, the provisional rights granted by
the 2002 approval were extinguished and there was no breach of
contract. The plain deed language conveying parcel A to
Ms. Keith with all of its ―rights and privileges‖ does not include
conditional rights granted by the development approval.
Moreover, the deed language cannot reasonably be interpreted to
mean that the parties intended to do something that they did not
have the ability to do—namely, alter the county‘s conditional use
permit.54 The only way that the 2002 approval would have
remained viable, according to Wasatch County regulations, was
―so long as all conditions continue[d] to be met‖ and only on ―the site
Q: Could the development, in fact, go forward, then,
if you disagreed with what they were proposing
for Parcel A?
Keith: Well, they wouldn‘t have a voice in proposing
anything on Parcel A.
...
Q: So you understood that they could do what they
wanted with their ground and you could do what
you wanted with your ground?
Keith: Precisely.
Q: And there would not be a joint development?
Keith: Right.
54 See RESTATEMENT (THIRD) OF PROP.: SERVITUDES § 1.1(1), (3)
(2000) (―A servitude is a legal device that creates a right or
obligation that runs with land or an interest in land. . . . Zoning
and other public land-use regulations . . . are not servitudes . . . .‖).
20
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on which the approval was granted.‖55 The parties refused to
develop their now separately owned property together and no
rights from the 2002 approval could have survived this drastic
change in circumstances.
¶ 39 Because Ms. Keith‘s interpretation of the deed language
was not reasonable, the deed was unambiguous as a matter of
law. And the unambiguous language of the deed did not
reference county development rights or the Pioche development
plan. Summary judgment was appropriately granted to MRD on
Ms. Keith‘s breach of contract claim because the undisputed facts,
construed in favor of Ms. Keith, nevertheless show that MRD did
not breach the contract as a matter of law. Accordingly, we affirm
the district court‘s dismissal of Ms. Keith‘s breach of contract
claim.
II. FRAUDULENT INDUCEMENT
¶ 40 Ms. Keith made a claim for fraudulent inducement based
upon representations made to her during the ―parties‘ prior
course of dealing.‖ As she cannot point to a false representation
made by MRD, this claim has no merit and we thus affirm the
district court‘s ruling.
¶ 41 To prevail on a claim of fraudulent inducement, a
plaintiff must establish:
(1) that a representation was made (2) concerning a
presently existing material fact (3) which was false
and (4) which the representor either (a) knew to be
false or (b) made recklessly, knowing that there was
insufficient knowledge upon which to base such a
representation, (5) for the purpose of inducing the
other party to act upon it and (6) that the other
party, acting reasonably and in ignorance of its
falsity, (7) did in fact rely upon it (8) and was
thereby induced to act (9) to that party‘s injury and
damage.56
55WASATCH CNTY., UTAH, CODE § 16.23.06(A) (Sterling 2013)
(emphasis added).
56Daines v. Vincent, 2008 UT 51, ¶ 38, 190 P.3d 1269 (internal
quotation marks omitted).
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KEITH v. MOUNTAIN RESORTS
Opinion of the Court
Ms. Keith fails to demonstrate any evidence that MRD made a
false representation and her claim fails on that basis alone.
¶ 42 Ms. Keith cites generally to the parties‘ correspondence,
which spans a five-year period from 1999 through 2004 and
chronicles her negotiations with the company that is now MRD.
In her complaint, Ms. Keith focuses in particular upon a 2004 offer
made by MRD‘s predecessor, Capital Growth Partners (2004
settlement offer). In the 2004 settlement offer, Capital Growth
Partners offered to exchange interests in the various parcels, to the
effect that Ms. Keith would receive a complete interest in some
twenty-seven acres that would ―includ[e] any and all appurtenant
benefits thereto such as . . . water rights.‖ Ms. Keith rejected that
offer. Nevertheless, she argued below that because ERUs are
associated with water rights, the use of the term ―water rights‖ in
the 2004 offer letter was a knowing misrepresentation that was
aimed at inducing her to enter into the 2005 settlement agreement,
which she drafted. Ms. Keith fails to mention that she drafted the
2005 settlement agreement and fails to mention that she rejected
the offers that MRD/Capital Growth Partners made in 2004. It is
difficult to see how MRD could have fraudulently induced
Ms. Keith to enter a contract that Ms. Keith herself drafted.
Moreover, any statements made in settlement offers that Ms.
Keith rejected in 2004 could not possibly have induced her to
enter the settlement agreement she drafted over a year later; an
agreement that made no mention of water rights, ERUs, or the
Pioche development.
¶ 43 ―Rather than offer evidence satisfying the fraud standard
in [her] appeal, [Ms. Keith] does little more than color the fraud
elements with conjectural allegations based on [her] subjective
experience of the transaction. We have held that, mere conclusory
allegations in a pleading, unsupported by a recitation of relevant
surrounding facts, are insufficient.‖57 Accordingly, Ms. Keith‘s
fraudulent inducement claim fails as a matter of law and we
affirm the district court‘s summary judgment ruling.
57 Id. ¶ 39 (internal quotation marks omitted).
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III. TORTIOUS INTERFERENCE WITH
PROSPECTIVE ECONOMIC RELATIONS
¶ 44 Ms. Keith argues that the district court erred when it
granted summary judgment in favor of MRD on her claim of
intentional interference with prospective economic relations. She
argues that MRD committed this tort when it asserted,
immediately following the settlement in 2005 and for some time
thereafter, that it was entitled to all of the ERUs granted in the
preliminary development plan, and that they were valuable,
vested rights that MRD had retained in its property only.
Ms. Keith argues that MRD ―actively sought to prevent Ms. Keith
from moving forward with the entitlement of her property . . .
without any legitimate need to do so‖ in order to ―improperly
damage Ms. Keith.‖
¶ 45 In order to recover damages for intentional interference
with prospective economic relations, ―the plaintiff must prove
(1) that the defendant intentionally interfered with the plaintiff‘s
existing or potential economic relations, (2) for an improper
purpose or by improper means, (3) causing injury to the
plaintiff.‖58
¶ 46 To show an improper purpose, ―the plaintiff must prove
more than a defendant‘s motivation of ill will toward the plaintiff;
[r]ather, the plaintiff must show that the defendant‘s predominant
purpose was to injure the plaintiff.‖59 When a party is
―reasonably acting to protect a legitimate economic interest of its
58 Leigh Furniture & Carpet Co. v. Isom, 657 P.2d 293, 304 (Utah
1982). We note that a challenge to the ―improper purpose‖
element of Utah‘s intentional interference with prospective
economic relations cause of action has been fully briefed and is
currently under advisement before this court. Eldridge v.
Johndrow, No. 20130263 (Utah filed Oct. 17, 2013). We do not
address the future viability of the improper purpose element
today because it was not raised or briefed by the parties in this
case. Moreover, because we affirm the grant of summary
judgment on this issue, the question presented in Eldridge would
not change the outcome of this case one way or the other.
59 Ferguson v. Williams & Hunt, Inc., 2009 UT 49, ¶ 35, 221 P.3d
205 (alteration in original) (internal quotation marks omitted).
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KEITH v. MOUNTAIN RESORTS
Opinion of the Court
own,‖ this is not an improper purpose.60 ―Improper means are
present where the means used to interfere with a
party‘s economic relations are contrary to law, such as violations
of statutes, regulations, or recognized common law rules.
Improper means include violence, threats or other intimidation,
deceit or misrepresentation, bribery, unfounded litigation,
defamation, or disparaging falsehood.‖61
¶ 47 MRD stated that it took the actions it did because it
believed, accurately, as it turns out, that because Ms. Keith‘s
property did not meet the 160-acre requirement for a
development in the Mountain Zone, it did not qualify for more
than the standard amount of ERUs (in this case, two lots of
record) without a variance. MRD further claimed that it
mistakenly believed that it held all approvals and entitlements
under the 2002 approval. Even if MRD harbored ill will towards
Ms. Keith, MRD‘s statements were made in pursuit of its own
economic interest. Thus, its statements were not made for the
predominant purpose of injuring Ms. Keith.62 Accordingly,
Ms. Keith failed as a matter of law to establish improper purpose
or improper means under Leigh Furniture and her claim of
intentional interference with prospective economic relations was
properly dismissed on summary judgment.
CONCLUSION
¶ 48 The terms of the deed were unambiguous. Land
development rights, which are a conditional right granted and
controlled by the county government, are not included as a matter
of law in a deed‘s general terms of conveyance giving a grantee
the ―rights and privileges thereunto belonging‖ to a piece of real
property. Because Ms. Keith and MRD did not agree to continue
to develop their properties in compliance with the 2002
development plan as approved by Wasatch County, there was no
reasonable basis for Ms. Keith to believe that she would retain
some amount of ERUs as detailed in that plan. Even if Ms. Keith
had argued for deed reformation, a unilateral mistake is generally
60 Leigh Furniture, 657 P.2d at 305.
61 Overstock.com, Inc. v. SmartBargains, Inc., 2008 UT 55, ¶ 18,
192 P.3d 858 (internal quotation marks omitted).
62 See, e.g., Ferguson, 2009 UT 49, ¶ 35.
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not grounds to reform a deed.63 Thus, MRD did not breach the
terms of the deed and summary judgment was appropriate.
Additionally, Ms. Keith‘s claims for fraudulent inducement and
intentional interference with prospective economic relations fail
because she did not allege facts sufficient to satisfy the elements of
those causes of actions. We affirm the district court‘s grant of
summary judgment on all claims.
63See, e.g., RHN Corp. v. Veibell, 2004 UT 60, ¶ 36, 96 P.3d 935;
Guardian State Bank v. Stangl, 778 P.2d 1, 4–6 (Utah 1989).
25