- On September 18, Judge Harris heard oral arguments and ruled in favor of Greater Park City Company’s motion to amend its complaint in the case to add two new claims. A statement by Jenni Smith, President and General Manager of Park City Mountain Resort, is below:
We are pleased with Judge Harris’s decision to allow PCMR to amend its complaint to include claims that the Talisker / Vail transactions triggered PCMR’s right of first refusal and the restrictions on transferability under its leases. We look forward to showing in court that Talisker violated PCMR’s rights by transferring control of the property to Vail in May 2013.
The central legal issue in this case concerns PCMR’s rights as lessee under Utah state law. PCMR will prove that the parties expected and understood that the leases were to be extended. We will also show that Talisker, as the lessor, could not lawfully sell important parts of the leased lands, and PCMR had a right of first refusal on the sale or assignment of other portions of the leased lands.
We committed to resolving this legal dispute and reaching an outcome where the Resort continues to be a world-class destination and the center of the Park City community. As we’ve previously stated, we have no intention of selling our property at the base of the mountain and associated rights.
This legal dispute will not impact the 2013-14 ski season. This upcoming year, Park City Mountain Resort celebrates its 50th anniversary season, and we look forward to operating this resort for the next 50 seasons, and 50 more after that.
- On July 30, the Third District Court for Summit County held a status and scheduling conference with counsel for the parties. At the close of the hearing Judge Ryan Harris set January 17, 2014 as the deadline for completion of fact discovery in the case and set February 7, 2014, as the deadline for filing summary judgment motions. Judge Harris said that he would postpone further scheduling until these motions are filed, briefed and decided by the court.
- On July 26, Greater Park City Company filed a motion for leave to amend its complaint in this case to add two claims. The new claims charge that Talisker Land Holdings LLC and United Park City Mines Company have violated the leases covering Park City Mountain Resort’s ski terrain by selling a controlling interest in the leases to Vail Resorts, Inc. and possibly others, and by failing to allow Greater Park City Company to exercise its right of first refusal on the property. At the hearing on July 30, Talisker’s lawyer said his clients will oppose GPCC’s motion to amend the complaint. The court will schedule a hearing on that motion in a few weeks.
- At the hearing on July 30, the Salt Lake City lawyers representing Greater Park City Company introduced the court to their new co-counsel in the case, James Quinn and Bruce Meyer of Weil Gotshal & Manges in New York.
- The Court denied Talisker’s motion to dismiss in holding that the case may proceed with respect to some of PCMR’s claims, including its claim that Talisker and UPCM should be prevented from asserting that the leases have expired based upon communications between Talisker and PCMR and upon representations that Talisker and UPCM made to third parties.
- The Court ruled that PCMR’s claim for damages arising from Talisker’s delay in disclosing its intent to terminate the parties’ leases may go forward.
- The Court denied PCMR’s motion for partial summary judgment on its claim that the leases were extended to 2051 based upon representations made by UPCM to the Utah State Tax Commission in 2001-2003.
- The Court ruled that PCMR did not strictly comply with the renewal provisions in the parties’ leases and dismissed PCMR’s antitrust claims.
- At this early stage of the case, PCMR does not believe the Court could reasonably conclude that PCMR has no right to relief.
- PCMR’s complaint presents facts that, if proven, will demonstrate that it complied with the provisions of the leases concerning their renewal.
- The complaint and other materials also show that United Park and Talisker didn’t need to be notified concerning PCMR’s intent to renew because, for more than a decade, they knew the leases were extended to 2051.
Summary of Court’s Memorandum Decision and Order
Issued November 20, 2012
In its Memorandum Decision and Order (Nov. 20, 2012), the Court ruled on (1) a motion to dismiss filed by defendants United Park City Mines Company and Talisker Land Holdings, LLC and (2) PCMR’s motion for partial summary judgment. In a 47-page ruling, the Court granted in part and denied in part the first of these motions, and it denied the second motion. In moving to deny Talisker’s motion to dismiss, the Court agreed to hear the most critical elements of PCMR’s lawsuit. In summary:
Summary of Papers filed by Park City Mountain Resort on August 15, 2012
The papers filed by PCMR deal with two different motions: Talisker’s motion to dismiss PCMR’s amended complaint, and PCMR’s motion for partial summary judgment based on United Park City Mines Company’s representations to the Utah Tax Commission in the early 2000′s.
Earlier this year, PCMR sued United Park and Talisker to prevent them from evicting PCMR from the property, thereby closing the Resort.
United Park and Talisker have now moved to dismiss the case, arguing that the case should not go through the discovery process and then to a jury. PCMR disagrees:
Although it’s clear that the parties need to conduct discovery and try this case before a jury, they don’t require a trial on one point: In the early 2000′s United Park repeatedly and categorically told the Utah State Tax Commission that PCMR’s Leases would not expire until 2051 and that PCMR had the right to occupy the property until then. Based on these statements, the Tax Commission reduced the assessed value of the property by more than two-thirds. Having enjoyed the benefit of reduced property taxes resulting from these representations, UPCM and Talisker shouldn’t be allowed to change their position now.
Second Declaration of Jenni Smith
Motion to Strike
Memorandum in Support of Plaintiff’s Motion to Strike
Plaintiff’s Reply Memorandum in Support of Plaintiffs’ Motion for Partial Summary Judgement on Plaintiffs’ First Cause of Action
Plaintiff’s Memorandum in Opposition to Defendants’ Motion to Dismiss the First Amended Complaint
Summary of Papers Filed by Plaintiffs on May 21, 2012
Plaintiffs’ Motion for Leave to Amend the Complaint – Plaintiffs move the Court for permission to amend the complaint to assert two new claims for defendants’ violation of the Utah Antitrust Act. In the proposed amended complaint, plaintiffs allege that defendants, which own The Canyons, have unlawfully attempted to shut down Park City Mountain resort or to increase dramatically the Resort’s cost of operations, thereby disabling it as a competitor. Plaintiffs allege that defendants’ objective has been to obtain ownership and control of Park City Mountain Resort, thereby monopolizing or attempting to monopolize the relevant markets for skiing and snowboarding. Plaintiffs contend that defendants’ conduct was not justified by any legitimate economic reason and involved their intentional nondisclosure of material facts and their breach of the implied covenant of good faith and fair dealing in the parties’ leases.
Summary of Papers Filed by Plaintiffs on May 15, 2012
Plaintiffs’ Memorandum in Opposition to Defendants’ Motion to Dismiss - Plaintiffs oppose the motion to dismiss previously filed by United Park City Mines and Talisker Land Holdings primarily on the ground that, at this early stage of the case, before any discovery is taken, the Court cannot possibly conclude that plaintiffs have no right to relief. The question before the Court is whether the allegations in our complaint are sufficient to state an actionable claim. We argue that the complaint adequately alleges that Greater Park City Company, as owner of the Park City Mountain Resort, exercised its option to extend the leases on the Resort’s ski terrain to the year 2051. Beyond that, plaintiffs show that beginning in early 2000’s United Park City Mines (the lessor of the leases) repeatedly and categorically told the Utah State Tax Commission and other government officials that the leases would not expire until 2051 and that the Resort would have the right to use the property until then. In addition, plaintiffs argue that if Talisker and United Park City Mines believed (as they now profess to believe) that the leases expired in April 2011, they should have said so instead of remaining silent for seven months while plaintiffs paid their rent and spent over $7 million on leasehold improvements during the summer of 2011, in reliance on the lease extension.
Plaintiffs’ Motion for Partial Summary Judgment – Plaintiffs move for partial summary judgment, seeking an order of the Court declaring that their leases with defendants have been extended to the year 2051. Plaintiffs argue that in 2001, defendant United Park City Mines Company appealed the Utah State Property Tax Division’s determination that the property’s assessed value was $6.760 million. United Park City Mines told the Tax Commission that the assessed value should be reduced because the property will be burdened by the Resort’s leases until 2051. United Park’s lawyers and witnesses told the Tax Commission categorically that the resort had the unqualified right to use the property until 2051, with the result that the property’s value for tax purposes should be reduced dramatically. Based on United Park City Mines’ representations, the Utah State Tax Commission reduced the assessed value to approximately $1.9 million. Our motion argues that, having represented that the Resort has the right to use the property until 2051, and having realized the benefit of reduced property taxes since then, defendants are now bound by their representations.
Summary of Original Complaint – March 9, 2012
The owner of Park City Mountain Resort (PCMR) has filed suit against Talisker Land Holdings, LLC to ensure that PCMR will continue to operate as one of the nation’s premier destination ski resorts. Since 1971, PCMR has used land owned by Talisker as an important part of its ski terrain. On April 30, 2011, PCMR provided Talisker with written confirmation of PCMR’s extension of the parties land-use arrangement for 20 additional years. In addition, PCMR paid Talisker the rent required annually under the parties’ agreement. Between 2009 and mid-2011, PCMR provided Talisker with repeated declarations of its intent to operate the resort through 2051. PCMR also advised Talisker of its intent to make major expenditures for ski terrain infrastructure improvements—expenditures totaling over $7,000,000 during the summer of 2011 alone. In late December 2011, however, Talisker notified PCMR for the first time that it took the position that the parties’ agreement expired in April 2011.
PCMR first asks the court for a declaration that the parties’ agreements have not expired but have been extended to 2051.
PCMR next asks the court for an injunction to prevent Talisker from shutting down PCMR’s business operations. If Talisker is not enjoined, the financial consequences to PCMR, it employees, the Park City community and the state would be disastrous.
Alternatively, PCMR seeks damages for Talisker’s delay in disclosing its intent to terminate the parties’ agreements. With knowledge that it intended to evict PCMR, Talisker continued to collect rental fees, allowed PCMR to invest over $7,000,000 in infrastructure improvements, and participated in discussions regarding a possible interconnect between the two resorts. PCMR seeks compensatory damages in the amount of $7,000,000 plus interest as well as punitive damages.