Osguthorpe v. ASC Utah, Inc.

2015 UT 89, 365 P.3d 1201, 797 Utah Adv. Rep. 27, 2015 Utah LEXIS 270, 2015 WL 5967108
CourtUtah Supreme Court
DecidedOctober 13, 2015
DocketCase No. 20130861
StatusPublished
Cited by7 cases

This text of 2015 UT 89 (Osguthorpe v. ASC Utah, Inc.) is published on Counsel Stack Legal Research, covering Utah Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Osguthorpe v. ASC Utah, Inc., 2015 UT 89, 365 P.3d 1201, 797 Utah Adv. Rep. 27, 2015 Utah LEXIS 270, 2015 WL 5967108 (Utah 2015).

Opinion

Associate Chief Justice LEE,

opinion of the Court:

¶ 1 This appeal arises out of a longstanding dispute between the Stephen A. Osguthorpe family and ASC Utah, Inc. The Osguthorpes own land that has long been used for sheep ranching. For many years ASC operated The Canyons ski resort on land adjacent to that owned by the Osguthorpes. By contract the Osguthorpes authorized ASC to use their land in exchange for an annual payment. That contract has been amended by the parties a number of times. It also implicates the interests of a third party-the estate of Enoch Smith-which has been deemed entitled to 50 percent of any rents derived from the Osguthorpe land.

¶ 2 The Osguthorpes have asserted that ASC stands in breach of contract. Their claims arise out of ASC's management of the land in question. In challenging ASC's actions, the Osguthorpes asserted claims for breach of the covenant of good faith and fair dealing, for injunctive relief, and for equitable rescission or reformation of the agreement between ASC and the Osguthorpes. The first claim was resolved against the Os-guthorpes in a jury trial,. The second and third claims were decided by the district court in a bench trial-in a decision denying injunctive relief and refusing to terminate the agreement but agreeing to reform it in part.

¶ 3 We affirm in large part. First, we affirm the Osguthorpes' challenge to matters resolved in the course of the jury trial on the ground that we lack jurisdiction (given the Osguthorpes' failure to file a notice of appeal as to the jury verdict). Second, we affirm the trial court's refusal to award injunctive relief because we deem the court's decision a matter falling within its equitable discretion, and we see no abuse of that discretion. And third, we affirm the decision to reform the contract prospectively in part; we vacate only the portion of the trial court's order purporting to dispose of the rights of the Osguthorpes (and the Smith estate) to payments tendered by ASC but rejected by the Osguthorpes.

I

¶ 4 In 1996, D.A. Osguthorpe and the Os-guthorpe Family Partnership entered into a twenty-eight-year agreement with Wolf Mountain ski resort,. That agreement granted Wolf Mountain the right to use some of the land the Osguthorpes used for sheep herding. This simple, single-page document provided that Wolf Mountain would pay the Osguthorpes "annual rental payments for the Property in the amount of $100,000." That amount was to be paid in advance at the beginning of each year. A short time later, Wolf Mountain assigned its rights under the agreement to ASC, who has owned and oper *1204 ated The Canyons ski resort on the land for many years.

¶ 5 ASC and the Osguthorpes amended the agreement twice, with two effects. The first was to eventually bring the total payment to $200,000 annually. And the second was to add some references to services (like consulting) that the Osguthorpes were to provide under the agreement.

¶ 6 Shortly after the second amendment the estate of Enoch Smith-a business partner of D.A. Osguthorpe-sued the Os-guthorpes, seeking a share of the annual payments under a pre-existing partnership disgolution agreement. Smith v. Osguthorpe, 2002 UT App 361, ¶¶ 6, 8-9, 58 P.3d 854. The Osguthorpes' defense was that the partnership dissolution agreement entitled Smith's estate only to "lease" payments, and that the amended agreements between the Osguthorpes and ASC actually conveyed an easement (meaning there was no "rent") and were intended to be largely a contract for personal serves. Id. ¶¶ 36-38, 42-44.

¶ 7 In the Osguthorpe-Smith case, the district court asked ASC-a nonparty-to "set forth its position" with respect to the meaning of the amended 'agreements. ASC declined, citing its non-party status, And the district court wound up ruling in favor of Smith's estate, holding that it was entl‘cled to half of the annual payments and that the agreements in fact did not represent a contract for services. Our court of appeals upheld this interpretation of the amended lease agreement, though it remanded on the issue of whether the agreements were "integrated" with respect to the question of dividing the payment between rents and personal services. Id. ¶¶ 45-46.

¶ 8 While this litigation was pending, ASC and the Osguthorpes executed a "Restatement of Agreement" on August 1, 2001. The Restatement of Agreement attempted to establish a process to allocate the annual payment between the fair market value of ASC's rights in the land and the services to be provided by the Osguthorpes. The process chosen. in the Restatement of Agreement-valuation of the interest in the land by several appraisers-pegged the value of ASC's use of the land at a mere $3,275.50 annually, Thus, the balance of the $200,000 payment was to be for the services the Osguthorpes would render. The obvious effect, would have been to greatly diminish the value of the Smith estate's interest under the, partnership dissolution agreement.

¶ 9 These efforts notwithstanding, the district court in the Osguthorpe-Smith case concluded that the Restatement of Agreement had legally failed to accomplish this objective. Smith v. Osguthorpe, 2006 UT App 425, 2006 WL 2925451 (per curiam) (unpublished opinion), Thus, the court held that despite the allocation of the payment between rent and services, it was "not a new agreement" at all. Instead, "as evidenced by the caption," it was a " 'Restatement of Agreement.'" The court also found "eritical" the fact that the Restatement of Agreement's effective date was retroactive to August 1996-the signing date of the original agreement between the Osguthorpes and Wolf Mountain. Because it had already "held that the contractual relationship between the Os-guthorpes: and [ASC] [based on the 1996 agreement] concern{ed] solely the lease of the land and include[d] no compensation for services rendered by the Osguthorpes to [ASC]," the district court held that Smith's estate was still entitled to half of the entire annual payment, and not just the $1,600 or so it would receive under the Osguthorpes' reading of the Restatement of Agreement.

¶ 10 The court of appeals held that the Osguthorpes had failed to file a timely appeal from the decision regarding the validity of the Restatement, Id. And in the. Osgu-thorpe~-ASC suit, the district court held that this determination of the effect of the Restatement of Ag'xeement was bmdmg as a matter 'of res judicata.

¶ 11 As the above litigation. proceeded, the relationship between the Osguthorpes and ASC began to deteriorate. Over the course of several years, the Osguthorpes complained of a range of breaches by ASC-allegedly placing snow-making pipes above ground in a manner injuring the Osguthorpes' sheep, mowing areas intended for sheep grazing, permitting soil erosion in various places, and *1205 failing to prevent invasive weed species from taking root. In the Osguthorpes' view, ASC perpetually failed to heed the Osguthorpes' requests or to respond to their complaints. Around 2006, the Osguthorpes tried to get ASC to execute "two 'completely separate agreements" to make clear that the parties had all along (since 1996) intended for an allocation of the annual payment between rent and personal services, seemingly in yet another attempt to resolve the dispute with the Smith estate. But ASC refused to do so. And this was apparently a tipping pomt 1n the parties' relationship.

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

Related

Planned Parenthood Association v. State
2024 UT 28 (Utah Supreme Court, 2024)
State v. Smith
2024 UT 13 (Utah Supreme Court, 2024)
Christensen v. Tax Commission
2020 UT 45 (Utah Supreme Court, 2020)
Timber Lakes v. Cowan
2019 UT App 160 (Court of Appeals of Utah, 2019)
Camco Constr. Inc. v. Utah Baseball Acad. Inc.
2018 UT App 78 (Court of Appeals of Utah, 2018)
Utah Stream Access Coal. v. Orange St. Dev.
2017 UT 82 (Utah Supreme Court, 2017)
Osguthorpe v. ASC
2015 UT 89 (Utah Supreme Court, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
2015 UT 89, 365 P.3d 1201, 797 Utah Adv. Rep. 27, 2015 Utah LEXIS 270, 2015 WL 5967108, Counsel Stack Legal Research, https://law.counselstack.com/opinion/osguthorpe-v-asc-utah-inc-utah-2015.