Grassy Meadows Sky Ranch Landowners Ass'n v. Grassy Meadows Airport, Inc.

2012 UT App 182, 283 P.3d 511, 712 Utah Adv. Rep. 8, 2012 WL 2617543, 2012 Utah App. LEXIS 186
CourtCourt of Appeals of Utah
DecidedJuly 6, 2012
Docket20100925-CA
StatusPublished
Cited by4 cases

This text of 2012 UT App 182 (Grassy Meadows Sky Ranch Landowners Ass'n v. Grassy Meadows Airport, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Utah primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Grassy Meadows Sky Ranch Landowners Ass'n v. Grassy Meadows Airport, Inc., 2012 UT App 182, 283 P.3d 511, 712 Utah Adv. Rep. 8, 2012 WL 2617543, 2012 Utah App. LEXIS 186 (Utah Ct. App. 2012).

Opinion

OPINION

DAVIS, Judge:

T1 Grassy Meadows Airport, Inc.; Sky Ranch Development, Inc.; and Michael O. Longley (collectively, Sky Ranch) appeal the trial court's ruling in favor of Grassy Meadows Sky Ranch Landowners Association (the Association). We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

BACKGROUND

T2 The Association is comprised of the lot owners of the Grassy Meadows Sky Ranch Development located near Hurricane, Utah. 1 Many of the lot owners are private pilots or airplane owners who were attracted to this residential community because it is centered around a private airstrip. The airstrip is owned by Grassy Meadows Airport and leased to the Association. The lease "grant[s] the Association and its members, guests and invitees the exclusive right of use of the ... [alirport" for a ninety-nine-year term. Sky Ranch also adopted a set of covenants, conditions, and restrictions in July 1990 (the 1990 CCRs) that applied to Sky Ranch and the Association. The 1990 CCRs provided that Sky Ranch could unilaterally amend the CCRs for certain enumerated purposes "until eighty percent (80%) of the lots in the Development (including additional phases as may be added) have been sold to purchasers" (the 80 Percent Provision). __

{3 In November and December 2001, Sky Ranch appeared before the Washington County Planning Commission to request a zoning change that would allow the construction of a fixed based operation (FBO) within the development. As described by Sky Ranch, the plans for the FBO included an on-site residence for the FBO operator, a large hangar to be used for aircraft maintenance, and ten to fifteen bed-and-breakfast-style lodging units to accommodate individuals interested in buying property at Grassy Meadows. A representative from the Association appeared at both meetings to oppose the zoning request, which was ultimately denied.

{ 4 By June 2002, 81.5% of the platted lots in the community had been sold, prompting the Association to write Sky Ranch a letter notifying it that its right to unilaterally amend the 1990 CCRs had terminated in accordance with the 80 Percent Provision. Nevertheless, in October 2002, Sky Ranch unilaterally amended the 1990 CCRs with a new set of CCRs (the 2002 CCRs). The 2002 CCRs contained provisions spelling out Sky Ranch's right to pursue the commercial improvements at issue in the zoning hearings and amending the voting rights of the different categories of lot owners, as well as several other provisions aimed at facilitating the development of a new planned community, Copper Rock, adjacent to the Grassy Meadows community. Michael Longley, the president of both Grassy Meadows Airport and Sky Ranch Development, is also behind the Copper Rock project and wanted "to open the traffic pattern and runway to visitors" of Copper Rock.

T5 On March 31, 20083, several months after the CCRs were amended, the Association received a "Notice of Termination of Lease" from Grassy Meadows Airport alleging that the Association failed to properly maintain the airport, to abide by the terms of the CCRs, to meet the lease's insurance requirements, and to make lease payments on time. Despite the Association's attempts to remedy the alleged breaches, Grassy Meadows Airport terminated the lease on May 5, 2003. 2 Sky Ranch refused to take the pay *515 ments the Association attempted to make under the lease after its termination. The Association subsequently deposited those funds into an escrow account.

T 6 The Association filed suit in June 2008. Sky Ranch responded with several counterclaims. The main issues presented at the two-day bench trial in April 2010 were (1) whether the 2002 CCRs were valid; (2) whether the Association breached the lease and, if so, whether Sky Ranch properly terminated the lease; and (8) whether the Association "tortiously interfered with the legitimate business interests of [Sky Ranch] by opposing proposed zoning ordinance changes affecting [the Association]." The trial court determined that the 2002 CCRs were "void ab imitio" because Sky Ranch had lost its ability to unilaterally amend the 1990 CCRs when 81.5% of the lots were purchased, and that the lease termination was not justified because the Association did not materially breach the lease. Furthermore, the trial court dismissed Sky Ranch's counterclaim for tortious interference, stating, "[TJhere [was] no basis to hold the Association liable...." In light of these conclusions, the trial court determined that the funds held in escrow were to "be released to Defendant Grassy Meadows Airport ... [and] applied as rent paid in full under the Lease."

ISSUES AND STANDARDS OF REVIEW

17 Sky Ranch presents four issues for appeal. First, Sky Ranch challenges the trial court's invalidation of the 2002 CCRs, which was based on the court's interpretation of a provision it deemed ambiguous in the 1990 CCRs. Second, Sky Ranch contends that it was entitled to terminate the Association's lease and that the manner in which it terminated the lease was appropriate. Third, Sky Ranch argues that the trial court prematurely dismissed its claim for tortious interference with business relations. Last, Sky Ranch argues that the issue of whether the escrow monies constituted full payment of the airport lease was never presented to the court, rendering the trial court's determination both unjustified and based on insufficient evidence.

18 We review the trial court's interpretation of the CCRs and lease, and its determination that a provision in the CCRs was ambiguous, for correctness. See Miller v. USAA Cas. Ins. Co., 2002 UT 6, ¶ 9, 44 P.3d 663; Sharon Steel Corp. v. Aetna Cas. & Sur. Co., 931 P.2d 127, 134 (Utah 1997). See generally Swenson v. Erickson, 2000 UT 16, ¶ 11, 998 P.2d 807 (Restrictive covenants that run with the land and encumber subdivision lots form a contract between subdivision property owners as a whole and individual lot owners; therefore, interpretation of the covenants is governed by the same rules of construction as those used to interpret contracts."). We grant the trial court no deference when its interpretation of an ambiguous contract term is not based on extrinsic evidence. See Meadow Valley Contractors, Inc. v. State Dept. of Transp., 2011 UT 35, ¶ 63, 266 P.3d 671. Next, "[wlhether an issue was properly before the trial court presents a question of law, which we review for correctness." Lee v. Sanders, 2002 UT App 281, ¶ 6, 55 P.3d 1127. And last, "[flindings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." Utah R. Civ. P. 52(a).

ANALYSIS

I. Validity of the 2002 CCRs

T9 Sky Ranch challenges the trial court's determination that the 1990-CCRs were ambiguous, arguing that the trial court improperly "focus[ed] on just one provision of the 1990 [CCRs], rather than construing the document as a whole." 3 Here, the provision in question, the 80 Percent Provision, states,

*516

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Johnson v. Schnabel
2023 UT App 102 (Court of Appeals of Utah, 2023)
WDIS v. Hi-Country Estates
2022 UT 17 (Utah Supreme Court, 2022)
MC Oil & Gas, LLC v. Ultra Resources, Inc.
145 F. Supp. 3d 1066 (D. Utah, 2015)
North Fork Special Service District v. Bennion
2013 UT App 1 (Court of Appeals of Utah, 2013)

Cite This Page — Counsel Stack

Bluebook (online)
2012 UT App 182, 283 P.3d 511, 712 Utah Adv. Rep. 8, 2012 WL 2617543, 2012 Utah App. LEXIS 186, Counsel Stack Legal Research, https://law.counselstack.com/opinion/grassy-meadows-sky-ranch-landowners-assn-v-grassy-meadows-airport-inc-utahctapp-2012.