Wolf Mountain Resorts, LC, a Utah Limited
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Brigham Young University Law School BYU Law Digital Commons Utah Court of Appeals Briefs 2010 Wolf Mountain Resorts, L.C., a Utah limited liability company v. ASC Utah, Inc., a Delaware corporation : Brief of Appellant Utah Court of Appeals Follow this and additional works at: https://digitalcommons.law.byu.edu/byu_ca3 Part of the Law Commons Original Brief Submitted to the Utah Court of Appeals; digitized by the Howard W. Hunter Law Library, J. Reuben Clark Law School, Brigham Young University, Provo, Utah; machine-generated OCR, may contain errors. David M. Wahlquist; Rod N. Andreason; Ryan B. Frazier; Kirton & McConkie; Attorneys for Appellant. John R. Lund; Kara L. Pettit; Snow, Christensen, and Martineau; John P. Ashton; Clark K. Taylor; Van Cott, Bagley, Cornwall & McCarthy; Attorneys for Appellee. Recommended Citation Brief of Appellant, Wolf Mountain Resorts v. ASC Utah, No. 20100342 (Utah Court of Appeals, 2010). https://digitalcommons.law.byu.edu/byu_ca3/2314 This Brief of Appellant is brought to you for free and open access by BYU Law Digital Commons. It has been accepted for inclusion in Utah Court of Appeals Briefs by an authorized administrator of BYU Law Digital Commons. Policies regarding these Utah briefs are available at http://digitalcommons.law.byu.edu/utah_court_briefs/policies.html. Please contact the Repository Manager at [email protected] with questions or feedback. IN THE UTAH COURT OF APPEALS WOLF MOUNTAIN RESORTS, L.C., a Utah limited liability company, Plaintiff/Appellant, Appellate Case No. 20100342-CA Trial Court Case No. 070500485 ASC UTAH, INC., a Delaware corporation, (ORAL ARGUMENT REQUESTED) Defendant/Appellee On Appeal from an Order Denying Wolf Mountain Resorts, L.C.'s Motion for Partial Summary Judgment and Granting ASC Utah, Inc.'s Cross-Motion for Summary Judgment by the Third Judicial District Court, Silver Summit District, The Honorable Bruce C. Lubeck BRIEF OF APPELLANT John R. Lund David M. Wahlquist (Bar No. 3349) Kara L. Pettit RodN. Andreason (Bar No. 8853) Snow, Christensen & Martineau Ryan B. Frazier (Bar No. 9007) P.O. Box 45000 KIRTON & McCONKIE Salt Lake City, Utah 84145-5000 1800 Eagle Gate Tower 60 East South Temple John P. Ashton P.O. Box 45120 Clark K. Taylor Salt Lake City, UT 84145-0120 VanCott, Bagley, Cornwall & McCarthy Telephone: (801) 328-3600 P.O. Box 45340 Salt Lake City, Utah 84145-0340 Attorneys for Plaintiff/Appellant Attorneys for Defendant/Appellee tnAHAPP^TB COURTS *» 2 6 2010 4829-3160-1159.1 IN THE UTAH COURT OF APPEALS WOLF MOUNTAIN RESORTS, L.C., a Utah limited liability company, Plaintiff/Appellant, Appellate Case No. 20100342-CA Trial Court Case No. 070500485 ASC UTAH, INC., a Delaware corporation, (ORAL ARGUMENT REQUESTED) Defendant/Appellee On Appeal from an Order Denying Wolf Mountain Resorts, L.C.'s Motion for Partial Summary Judgment and Granting ASC Utah, Inc.'s Cross-Motion for Summary Judgment by the Third Judicial District Court, Silver Summit District, The Honorable Bruce C. Lubeck BRIEF OF APPELLANT John R. Lund David M. Wahlquist (Bar No. 3349) Kara L. Pettit Rod N. Andreason (Bar No. 8853) Snow, Christensen & Martineau Ryan B. Frazier (Bar No. 9007) P.O. Box 45000 KIRTON & McCONKIE Salt Lake City, Utah 84145-5000 1800 Eagle Gate Tower 60 East South Temple John P. Ashton P.O. Box 45120 Clark K. Taylor Salt Lake City, UT 84145-0120 VanCott, Bagley, Cornwall & McCarthy Telephone: (801) 328-3600 P.O. Box 45340 Salt Lake City, Utah 84145-0340 Attorneys for Plaintiff/Appellant Attorneys for Defendant/Appellee 4829-3160-1159 1 TABLE OF CONTENTS INTRODUCTION 1 STATEMENT OF JURISDICTION 4 ISSUES PRESENTED 4 DETERMINATIVE LEGAL PROVISIONS 7 STATEMENT OF THE CASE 8 A. Nature of the Case 8 B. Course of Proceedings 9 C. Disposition in the Trial Court 9 D. Statement of Facts 10 SUMMARY OF THE ARGUMENT 14 ARGUMENT 15 I. UNDER THE PLAIN TERMS OF THE LEASEHOLD MORTGAGE, THE TALISKER PURCHASE WAS AN UNEXCUSED EVENT OF DEFAULT. 15 II. THE TRIAL COURT ERRED IN APPLYING A "LACK OF CLARITY" STANDARD FOR REFORMATION 16 III. THE TRIAL COURT IMPROPERLY REFORMED THE LEASEHOLD MORTGAGE 18 A. The Trial Court Correctly Ruled that Unilateral Mistake Did Not Occur. 18 B. ASCU Failed to Plead Mistake, Let Alone "With Particularity." 19 C. ASCU Failed to Prove Mutual Mistake, Let Alone by Clear and Convincing Evidence 20 D. The Trial Court Erred in Sua Sponte Holding that Mutual Mistake Had Occurred 21 CONCLUSION 36 REQUEST FOR ORAL ARGUMENT 37 CERTIFICATE OF SERVICE 38 i 4829-3160-1159 1 TABLE OF AUTHORITIES Cases Am. Interstate Mortg. Corp. v. Edwards, 2002 UT App 16 ^j 12, 41 P.3d 1142 6, 8 Am. Towers Owners Ass'n, Inc. v. CCI Mechanical, Inc., 930 P.2d 1182 (Utah 1996) 5 Ashworthv. Charlesworth, 231 P.2d 724, 727 (Utah 1951) 19 Bown v. Loveland, 678 P.2d 292, 295 (Utah 1984) 19 Briggs v. Liddell, 699 P.2d 770, 772 (Utah 1985) 18, 19, 20, 22, 23, 37 Chen v. Stewart, 2004 UT 82, f 19, 100 P.3d 1177 4 Colosimo v. Roman Catholic Bishop of Salt Lake City, 2004 UT App 436, \ 1, 104 P.3d 646 4 Cunningham v. Cunningham, 690 P.2d 549, 552 (Utah 1984) 18, 27 Dixon Bldg, LLC v. Jefferson, 2010 UT App 34, \ 7, 227 P.3d 266 7 Embassy Group v. Hatch, 865 P.2d 1366, 1369 (Utah Ct. App. 1993) 6,8 England v. Horbach, 944 P.2d 340, 343 (Utah 1997) 24 Ervin v. Lowe's Cos., 2005 UT App 463, p, 128 P.3d 11 8 Gallegos ex rel. Rynes v. Dick Simon Trucking, Inc., 2004 UT App 322 ffif 8-9, 110 P.3d 710 6 Greener v. Greener, 212 P.2d 194, 204 (Utah 1949) 20 Guardian State Bank v. Stangl, 778 P.2d 1, 5-6 (Utah 1989) 19 Hermansen v. Tasulis, 2002 UT 52,U 10, 48 P.3d 235 7 Holbrook Co. v. Adams, 542 P.2d 191, 193 (Utah 1975) 28 Jackson v. Dabney, 645 P.2d 613,615 (Utah 1982) 28 Janke v. Beckstead, 332 P.2d 933, 934 (Utah 1950) 28 Jensen v. Manila Corp. of the Church of Jesus Christ ofLatter-Day Saints, 565 P.2d 63, 64 (Utah 1977) 29 Juricic v. Autozone, Inc., 2010 UT App 109, 1 5 n.l, 232 P.3d 1088 23 Klas v. Van Wagoner, 829 P.2d 135, 138 (Utah Ct. App. 1992) 5 Mabey v. Kay Peterson Const. Co., 682 P.2d 287, 289 22 Mackv. UtahDept. of Commerce, 2009 UT 47, If 14,221 P.3d 194 21 Neiderhauser Bldrs. & Dev. Corp. v. Campbell, 824 P.2d 1193, 1196 (Utah Ct. App. 1992) 7 R.A. McKell Excavating, Inc. v. Wells Fargo Bank, N.A., 2004 UT 48,17, 100 P.3d 1159 6 Robert Langston, Ltd. v. McQuarrie, 741 P.2d 554, 557 (Utah Ct. App. 1987) 25 Sacklerv. Savin, 897 P.2d 1217, 1220 (Utah 1995) 8 State v. Pena, 869 P.2d 932, 936 (Utah 1994) 4 The Cantamar, L.L.C v. Champagne, 2006 UT App 321, % 38, 142 P.3d 140 24 Thompson v. Smith, 620 P.2d 520, 523 (Utah 1980) 19 Warner v. Sirstins, 838 P.2d 666, 670 (Utah Ct. App. 1992) 18, 25,29 ii 4829-3160-1159 1 Statutes Utah Code Ann. §78A-4-103 (2009) 4 Other Authorities 45 Am. Jur. Reformation of Instruments § 113 28 Rules UTAH R. CIV. P. 12(b)(5) 21 UTAH R. CIV. P. 12(h) 21 UTAH R. CIV. P. 56(a)-(c) 9 UTAH R. CIV. P. 56(c) 3, 7,26,28 UTAH R. CIV. P. 8(c) 21 UTAH R CIV. P. 9(b) 22 iii 4829-3160-1159 1 INTRODUCTION This is an appeal of the trial court's decision on cross-motions for summary judgment. Plaintiff Wolf Mountain Resorts, L.C. ("Wolf Mountain") moved for partial summary judgment, and Defendant ASC Utah, Inc. ("ASCU") filed its cross-motion. The trial court held, and the parties agreed, that: (1) the contract at issue, a Leasehold Mortgage, was unambiguous; (2) the sale of ASCU to a third party was an "event of default" under the Leasehold Mortgage's "due-on-sale clause," absent the application of an exception; and (3) the Due-On-Sale Clause states that it is to be "strictly construed." The parties' dispute centers on the Second Exception to the Due-On-Sale Clause. That provision excludes from the "events of default" any transfer of all or substantially all of Mortgagee's [Wolf Mountain's] rights in and to the development currently known as The Canyons (including, without limitation, all of Mortgagee's [Wolf Mountain's] interest as tenant under the Ground Lease and the Mortgaged Estate) whether effected by stock or asset sale, provided that such transfer shall be expressly subject to each and every one of the liens, rights and interests of the Mortgagee under this Leasehold Mortgage. (Exh. B at Tf 4. A). Wolf Mountain testified that it specifically negotiated this provision so that a sale of a controlling interest in ASCU was not an "event of default" when Wolf Mountain's rights in The Canyons were also concurrently sold, so long as such transfer was subject to all of Wolf Mountain's obligations and rights under the Leasehold Mortgage. However, ASCU has argued that the text of the Second Exception should be altered to reflect what it asserted was the "only logical" way that the Second Exception 1 4829-3160-1159 1 should have been written - i.e., to exclude from the "events of default" specific sales of ASCU's interests, not Wolf Mountain's.