J-M Manufacturing Company v. PWE Multi QRS 14-85

2025 UT App 23
CourtCourt of Appeals of Utah
DecidedFebruary 12, 2026
DocketCase No. 20230908-CA
StatusPublished

This text of 2025 UT App 23 (J-M Manufacturing Company v. PWE Multi QRS 14-85) 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
J-M Manufacturing Company v. PWE Multi QRS 14-85, 2025 UT App 23 (Utah Ct. App. 2026).

Opinion

2026 UT App 23

THE UTAH COURT OF APPEALS

J-M MANUFACTURING COMPANY, INC., Appellant and Cross-appellee, v. PWE (MULTI) QRS 14-85, INC., Appellee and Cross-appellant.

Amended Opinion * No. 20230908-CA Filed Februar 12, 2026

Third District Court, Salt Lake Department The Honorable Robert P. Faust No. 210903495

Bryon J. Benevento and Adam C. Buck, Attorneys for Appellant and Cross-appellee Julianne P. Blanch and John L. Cooper, Attorneys for Appellee and Cross-appellant

JUDGE RYAN D. TENNEY authored this Opinion, in which JUDGES DAVID N. MORTENSEN and JOHN D. LUTHY concurred.

TENNEY, Judge:

¶1 J-M Manufacturing Company, Inc. (JM), a tenant, exercised its option to purchase several properties that it had been leasing from PWE (Multi) QRS 14-85, Inc. (PWE), the landlord. When the parties could not agree on a purchase price, they brought the issue

* This amended opinion replaces the original opinion that was issued on December 11, 2025. In response to a rehearing petition filed by J-M Manufacturing Company, Inc., we have made changes to paragraph 25. In response to a rehearing petition filed by PWE (Multi) QRS 14-85, Inc., we have moved and then made changes to footnote 3. The rest of the opinion remains unchanged. JM Manufacturing v. PWE

to the district court. As the case unfolded, the parties also litigated the question of whether JM had ongoing rent obligations up through the time that the purchase was completed. The district court ultimately granted summary judgment in favor of PWE on both the purchase price and the ongoing rent issue, and it also awarded PWE its attorney fees.

¶2 JM now appeals, challenging the district court’s rulings on unpaid rent and attorney fees. For the reasons set forth below, we first agree with the district court that PWE was entitled to ongoing rent, although not for the full period awarded by the district court. We accordingly remand for a limited revision of the judgment. We next conclude that the lease was ambiguous as to whether PWE was entitled to attorney fees (and, if so, under what provision), so we reverse the district court’s grant of summary judgment on that issue and remand for further proceedings.

BACKGROUND 1

¶3 In February 2002, PWE and JM signed a lease agreement (the Lease) as landlord and tenant, respectively, for four properties in Utah, California, Oregon, and Washington (the Properties). The parties agreed to a 20-year term of the Lease.

¶4 The Lease gave JM an “Option to Purchase” (the Purchase Option) that allowed JM to buy the Properties from PWE for a “Purchase Price” outlined by the Lease. The Lease contained a

1. “When reviewing a decision to grant summary judgment, we must review the facts and all reasonable inferences drawn therefrom in the light most favorable to the nonmoving party, and we recite the facts accordingly.” E & H Land, Ltd. v. Farmington City, 2014 UT App 237, n.1, 336 P.3d 1077 (quotation simplified).

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provision under which the Purchase Price would be determined by the “Fair Market Value.” Paragraph 2 of the Lease provided,

“Fair Market Value” . . . shall mean the higher of (a) the fair market value of the [Properties] or any Related Premises, as the case may be, as of the Relevant Date as if unaffected and unencumbered by this Lease or (b) the fair market value of the [Properties] or Related Premises, as the case may be, as of the Relevant Date as affected and encumbered by this Lease and assuming that the Term has been extended for all extension periods provided for herein.

¶5 Paragraph 29 of the Lease outlined the procedure that would be used to determine Fair Market Value if JM exercised its Purchase Option. First, the parties agreed to attempt to negotiate Fair Market Value themselves. Second, if they were unable to reach an agreement, each party was to select an appraiser, and the two appraisers would then “endeavor to agree upon Fair Market Value based on a written appraisal made by each of them.” Third, if the appraisers were unable to agree upon Fair Market Value, those appraisers would “select a third appraiser to make the determination” based on the average of the third appraiser’s Fair Market Value amount and the amount determined by the appraiser “nearest to that of the third appraiser.”

¶6 On April 2, 2021, JM exercised the Purchase Option, and the parties soon attempted to agree upon Fair Market Value. When they were unable to reach an agreement, they each selected an appraiser. But the appraisers were also unable to reach an agreement as to Fair Market Value, in large part because the parties disagreed about whether “Additional Rent”—a term that was broadly defined in the Lease to include a variety of costs and expenses that JM would incur in the future—should be included in the assessment of Fair Market Value. PWE maintained that

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Additional Rent should be included, while JM maintained that it should not.

¶7 In July 2021, JM filed a complaint against PWE, asking the district court for (1) declaratory judgment in its favor regarding the “meaning of the term Fair Market Value,” and (2) an injunction to stop the appraisal process until the court made that determination. A month later, PWE filed an answer and a counterclaim against JM, wherein it asked the district court to enforce “the plain language of the Lease” and require “the parties to engage in the Appraisal Process as specifically set forth by the Lease.” PWE also filed a motion for declaratory judgment, arguing that the Lease required Additional Rent “to be included in the appraised Fair Market Value of the Properties.”

¶8 In December 2021, the district court denied PWE’s motion, concluding that the Lease was ambiguous as to whether Additional Rent should be part of the assessment of Fair Market Value. That same month, JM also stopped paying the quarterly rent payments that it had previously been paying as a tenant under the Lease. A short time later, PWE instructed its appraiser to not include Additional Rent in her appraisal and to try to work with JM’s appraiser to reach an agreement on Fair Market Value without that component. On May 5, 2022, the two appraisers reached an agreement that Fair Market Value for the Properties would be $42.5 million if unencumbered by the Lease, and $53.5 million if encumbered by the Lease. As noted, Paragraph 2 of the Lease stated that the higher of these two values would constitute the Purchase Price.

¶9 On May 20, 2022, PWE sent a letter to JM expressing its intention to close on JM’s purchase of the Properties on June 3, 2022, for the Purchase Price of $53.5 million. But after receiving this letter, JM did not agree to close on that date as requested, instead contending that the $53.5 million amount was “artificial

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and unsupportable,” and further claiming that there were still ambiguities in the Lease that needed to be resolved.

¶10 In response to these developments, PWE amended its counterclaim, now adding two additional claims that are relevant to this appeal: first, it asked the court to order specific performance of the Lease, and it more specifically asked the court to order JM to complete the purchase of the Properties with the Purchase Price being $53.5 million; second, it asserted that JM should be held liable for breach of the Lease based on its failure to maintain the Properties as the process of completing the purchase unfolded.

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Cite This Page — Counsel Stack

Bluebook (online)
2025 UT App 23, Counsel Stack Legal Research, https://law.counselstack.com/opinion/j-m-manufacturing-company-v-pwe-multi-qrs-14-85-utahctapp-2026.