powdr corp. june 12, 2104 motion to stay any eviction order from park city mountain resort filed in...

19498449

Alan L. Sullivan (3152) Amber M. Mettler (11460) Snell & Wilmer L.L.P. 15 West South Temple, Suite 1200 Gateway Tower West Salt Lake City, Utah 84101-1004 Telephone: (801) 257-1900 [email protected] [email protected] Michael D. Zimmerman (3604) Troy L. Booher (9419) Zimmerman Jones Booher LLC Kearns Building, Suite 721 136 South Main Street Salt Lake City, Utah 84101 Telephone: (801) 924-0200 [email protected] [email protected] Attorneys for Plaintiffs/Counterclaim Defendants Greater Park City Company and Greater Properties, Inc.

James W. Quinn (pro hac vice) Bruce S. Meyer (pro hac vice) Weil Gotshal & Manges, LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8385 [email protected] [email protected]

IN THE THIRD JUDICIAL DISTRICT COURT IN AND FOR SUMMIT COUNTY, STATE OF UTAH

GREATER PARK CITY COMPANY, a Utah corporation, and GREATER PROPERTIES, INC., a Delaware corporation,

Plaintiffs,

vs.

UNITED PARK CITY MINES COMPANY, a Delaware corporation, and TALISKER LAND HOLDINGS, LLC, a Delaware limited liability company, TALISKER LAND RESOLUTION LLC, a Delaware limited liability company, VR CPC HOLDINGS, INC., a Delaware Corporation, FLERA, LLC, a Delaware limited liability company, TALISKER CANYONS LEASECO LLC, a Delaware limited liability company, TALISKER CANYONS FINANCE CO LLC, a Delaware limited liability company, and

MEMORANDUM IN SUPPORT OF

PLAINTIFFS’ MOTION TO POSTPONE OR STAY THE EFFECT AND

ENFORCEMENT OF ANY RULING THAT MAY BE RENDERED ON DEFENDANTS’

UNLAWFUL DETAINER COUNTERCLAIM

**ORAL ARGUMENT AND EXPEDITED

CONSIDERATION REQUESTED**

Case No. 120500157

Judge Ryan Harris

**REDACTED**

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JOHN DOE CORPORATIONS 1 THROUGH 10,

Defendants.

UNITED PARK CITY MINES COMPANY, a Delaware corporation, and TALISKER LAND HOLDINGS, LLC, a Delaware limited liability company,

Counterclaim Plaintiffs, vs. GREATER PARK CITY COMPANY, a Utah corporation, and GREATER PROPERTIES, INC., a Delaware corporation,

Counterclaim Defendants.

Plaintiffs/Counterclaim Defendants Greater Park City Company (“GPCC”) and Greater

Properties, Inc. (“GPI”) (collectively, “Plaintiffs”), by and through their counsel of record,

hereby submit this Memorandum in Support of their Motion to Postpone or Stay the Effect and

Enforcement of Any Ruling that May Be Rendered on Defendants’ Unlawful Defendants’

Counterclaim.

I. SUMMARY

On June 19, 2014, this Court will hear argument on Defendants’ motion for partial

summary judgment on their claim for unlawful detainer. Defendants United Park City Mines

Company’s (“UPCM”) and Talisker Land Holdings, LLC’s (“TLH”) (collectively, “Talisker”

or “Defendants”) have advised Plaintiffs that, if the Court grants the motion, they will seek

immediate entry of an order of restitution. They have also advised Plaintiffs that, if the order of

restitution is entered, they will seek to enforce it by requiring Park City Mountain Resort

(“PCMR”) to vacate the Talisker leasehold within 60 days.

In the present motion to stay, Plaintiffs respectfully ask the Court to postpone any

eviction and to adopt a measured and logical approach to the resolution of the remaining issues

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in this case, consistent with the terms of the Utah unlawful detainer statute, Utah Code Ann. §

78B-6-801, et seq., and to preserve Plaintiffs’ appellate rights. Specifically, Plaintiffs ask for

the following rulings:

Plaintiffs ask the Court to postpone the issuance of any order of restitution until

Defendants’ claims for rent and damages are decided by the Court, as

contemplated by Utah Code Ann. § 78B-6-811(1)(b).

Since Plaintiffs intend to appeal the Court’s rulings, and since Plaintiffs will

seek an order staying any eviction during the appeal, Plaintiffs believe that a

hearing on the manner of enforcement of any order of restitution should be

postponed, under Utah Code Ann. §§ 78B-6-810(5) and/or -812(1)(c). Plaintiffs

therefore ask the Court to postpone the hearing on the manner of enforcement

until the conclusion of an appeal from the unlawful detainer judgment.

Regardless of the sequence in which the Court rules on the order of restitution,

rent and damages, and in the event that an order of restitution is issued, Plaintiffs

ask the Court to stay its execution and enforcement until Plaintiffs have had the

opportunity to file an appeal and apply for a stay under Rule 62, Utah Rules of

Civil Procedure.

As suggested above, Plaintiffs intend to appeal (1) any ruling rendered against them on

the unlawful detainer counterclaim, (2) related rulings in the Court’s Memorandum Decision and

Order (May 21, 2014), and (3) the ruling in the Court’s Memorandum Decision and Order

(February 20, 2014) denying Plaintiffs’ motion to dismiss Defendants’ unlawful detainer

counterclaim. The issues decided in the Court’s May 21, 2014 Order and February 20, 2014

Order overlap factually with the issues raised in Defendants’ unlawful detainer counterclaim.

Under Rule 54(b), Utah Rules of Civil Procedure, therefore, the earliest time at which Plaintiff

may appeal will be following the Court’s entry of partial summary judgment on Defendants’

unlawful detainer counterclaim, and it is uncertain whether an appeal is appropriate without a

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decision on Defendnts’ request for rents, damages, and attorneys’ fees. The concern motivating

the present motion for stay is that, assuming the Court enters an order of restitution and does not

postpone its execution, Defendants will attempt to evict PCMR before Plaintiffs can post a bond

and obtain a stay pursuant to Rule 62.

As set forth in Part A of the Argument below, the Court’s ultimate judgment on the

unlawful detainer claim must include its determination on Defendants’ entitlement, if any, to

rent, damages and attorneys’ fees. See id. § 78B-6-11(2) & (3). These issues, as to which the

parties are entitled to a jury trial, are the same issues that must be decided before the Court can

set the amount of a supersedeas bond under Rule 62(j). For these reasons, the Court should

exercise its authority to manage the case by postponing issuance of an order of restitution, or else

staying enforcement of the order of restitution, until all issues required to be included in the

judgment and necessary to the determination of a bond amount have been decided.

As set forth in Part B of the Argument, the hearing on the “manner of enforcement” of

the order of restitution will be hotly contested. Although the hearing will be essential before any

eviction takes place, it should be postponed until the conclusion of an appeal on any unlawful

detainer judgment. It would be a waste of time and resources for the Court and the parties to

adjudicate what assets may be removed from the leasehold and how long it will take for PCMR

to vacate the premises, before the parties have a final determination of the matter on appeal.

Regardless of the sequence in which the issues of possession, rent, and damages are

adjudicated, the Court should stay Defendants’ execution on any order of restitution until

Plaintiffs have had the opportunity to appeal and obtain a stay. As shown in Part C of the

Argument, execution on any judgment of unlawful detainer should be stayed because: (1) a grave

injustice will result to Plaintiffs, and serious economic harm will result to innocent third parties

and the public, if execution is not stayed; (2) Defendants will not suffer any harm if the order of

restitution is stayed; and (3) Plaintiffs are entitled to a stay pending appeal under Rule 62, and its

right to seek a stay should be preserved.

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II. FACTS

A. Park City Mountain Resort and the Leases

1. GPCC owns and operates the Resort. (See, e.g., 5/21/2014 Mem. Decision and

Order at ¶ 1.)

2. A significant portion of the Resort’s skiable terrain is operated on land leased

through two lease agreements (the “Resort Area Lease” and the “Crescent Ridge Lease,”

collectively referred to as “Leases”). (Id. at ¶ 3.) The Leases were originally entered into

between GPCC, as tenant, and UPCM, as landlord, but in 1975, GPCC assigned the Leases to

GPI, which in turn, subleased the property back to GPCC. In 2004, UPCM assigned its rights

under the Leases to TLH. (Id. at ¶¶ 3-4.) The Leases cover approximately 3,000 acres of land.

(See 2/6/2014 Declaration of Jenni Smith Decl. at ¶ 4.)

3. Since the early 1970’s, GPCC has operated the Resort on the Leased Premises and

other lands. (5/21/2014 Mem. Decision and Order at ¶ 2.) GPCC has built and maintained on

the Leased Premises ski lifts, ski runs, day lodges, restaurants and other winter and summer

recreational and resort facilities associated with the operation of a recreational resort. (2/6/2014

Decl. of Jenni Smith at ¶ 7.) In doing so, GPCC has invested over $100 million on the Resort.

(See id. at ¶ 8.)

4. The Leases require that “all buildings, structures, facilities and improvements

situated upon and which are affixed to the soil” of the Leased Premises to “become the property

of the Lessor” at the expiration or termination of the Leases. Plaintiffs are entitled to retain all

“machinery, equipment, personal property and supplies not affixed to the soil.” (See Resort Area

Lease at ¶ 19, Ex. 1 to 2/7/2014 Decl. of Michael Zimmerman (“Zimmerman Decl.”); Crescent

Ridge Lease at ¶ 20, Ex. 2 to Zimmerman Decl.)

5. Although much of the Resort’s ski terrain is covered by the Leases, the Resort’s

base area, parking facilities, and the Town Lift base are owned by GPCC and/or Powdr Corp.

The terrain immediately uphill from the base (approximately 202 acres) is owned by non-party

Park Properties, Inc. (“PPI”) and leased by GPCC. (See 2/6/2014 Declaration of Jenni Smith

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Decl. at ¶ 6.) GPCC also owns outright the water, snowmaking and sewer infrastructure

necessary for the operation of the Resort. (Id.)

6. Currently, the Resort employs approximately 1,100 full and part-time employees

and generates hundreds of millions of dollars in revenue for businesses and individuals in Park

City and Summit County by drawing approximately % of the total skier days in Summit

County and % of out-of-state skier days for all of Utah’s winter resorts. (Id. at ¶ 3; see also

6/12/2014 Decl. of Greg Adams (“Adams Decl.”) at ¶ 6, attached hereto as Exhibit A.)

B. Relevant Procedural History

7. Plaintiffs initiated this litigation on March 9, 2012. (See Compl.)

8. The Court ruled on Defendants’ motion to dismiss and Plaintiffs’ cross-motion for

partial summary judgment in a Memorandum Decision and Order issued on November 20, 2012.

Thereafter, the case proceeded through fact discovery. The Court stayed expert discovery

pending adjudication of the dispositive motions on the remaining portions of Plaintiffs’ First

Cause of Action for Declaratory Relief. (See 9/26/2013 Scheduling Order (“Once the dispositive

motions are adjudicated, the Court will determine whether the trial should be bifurcated or how

the case should proceed from that point.”).)

C. Vail Transaction

9. On or about May 29, 2013, Talisker and Vail Resorts, Inc. (through Defendant

VR CPC Holdings, Inc.) consummated a transaction in a series of agreements, pursuant to which

VR CPC Holdings leased the Canyons Resort property for a fifty-year term, with six automatic

fifty-year renewal periods, for a total term of 350 years (the “Vail Transaction”). (See 5/21/2014

Mem. Decision and Order at ¶ 97.)

10. As part of the Vail Transaction, the parties created a new entity, known as

Talisker Land Resolution LLC, in order to afford Vail a means to exercise control over this

litigation. (Id. at ¶ 98.) Talisker Land Resolution acquired 100% of the equity in, and is the sole

member of, TLH. (Id.)

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11. In addition, as part of the Vail Transaction, the parties agreed that the Leased

Premises may be added to Vail’s lease if Talisker prevails in this litigation, although the amount

of rent paid by Vail to Talisker – a fixed base rent of $25 million per year – will not change, with

the exception that amounts paid by Vail tied to the resorts’ EBITDA may change to the extent

Vail is able to operate PCMR. (See, e.g., 4/8/2014 Decl. of Jack Bistricer at ¶ 6 (“The May 2013

deal with Vail was structured so that the Talisker-affiliated entities involved in the deal would

benefit financially from the potential upside that I believed could be achieved through the

arrangement with Vail. Specifically, in addition to the $25 million per year that VR CPC

Holdings pays as fixed base rent, VR CPC Holdings is also obligated to pay ‘participating rent’

of 42% of the amount by which the EBITDA from [Canyons Resort and PCMR] exceeds a

certain threshold amount.”).)

D. Unlawful Detainer Claim

12. On August 28, 2013, TLH, by and through its sole member, Talisker Land

Resolution, served GPCC and GPI with a Five Day Notice to Quit pursuant to Utah Code Ann.

§§ 78B-6-802, et seq. (5/21/2014 Mem. Decision and Order at ¶ 84.)

13. On October 28, 2013, TLH and UPCM filed counterclaims against GPCC and

GPI, including a counterclaim for unlawful detainer. On March 14, 2014, for the first time,

Talisker took action to obtain immediate occupancy of the Leased Premises by filing a motion

for partial summary judgment on the unlawful detainer counterclaim and an order of restitution.

(See Talisker Counterclaim at ¶¶ 66-75; 3/14/2014 Talisker Mem.)

14. In addition to seeking restitution of the Leased Premises, Talisker claims it has

been damaged by Plaintiffs’ “continued use of the Leased Premises and the buildings, structures,

facilities, and improvements thereon” and the alleged “waste of the buildings, structures,

facilities, and improvements on the Leased Premises, whose value has been depleted by GPCC

and GPI’s continued use.” Talisker further claims it is “entitled to the reasonable value of use of

the Leased Premises and the buildings, structures, facilities, and improvements thereon, from

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five days after service of the Notice to Quit to the present until the time [GPCC and GPI] vacate

the premises.” (See Talisker Counterclaim at ¶¶ 73-74.)

E. Facts Relating to the Threatened Eviction of PCMR

15. Currently, GPCC owns and operates 16 lifts on the Resort. (See 6/11/2014 Decl.

of Jenni Smith at ¶ 3, attached as Exhibit B.)

16. With the exception of the Jupiter Lift, the Thaynes Lift, and the Motherlode Lift,

all of the ski lifts on the Resort are constructed so that the ski lift towers are bolted to concrete

footings but are not otherwise affixed to the land. (See 4/1/2014 Decl. of Jenni Smith, at ¶ 3.)

17. Should GPCC be required to vacate the Leased Premises, GPCC intends to

remove:

a. all removable snowmaking equipment, including the compressors, pumps,

and fixed snow guns (collectively, the “Snowmaking Equipment”);

b. all equipment and furniture housed in the Summit House Restaurant, the

Mid Mountain Restaurant, and the Snow Hut Restaurant (collectively, the

“Restaurant Equipment”);

c. all equipment, parts, tools, and vehicles stored in the King Shop

Maintenance Building (collectively, the “Mechanical Equipment”);

d. all equipment located in the Summit Patrol and Demo Center buildings

and the Yurt (collectively, the “Patrol Equipment”);

e. the motors, gearboxes, drives, chairs, cables, assemblies, and terminals of

all lifts plus the towers for the Town Lift, the Crescent Lift, the King Con

Lift, the Silverlode Lift, the Bonanza Lift, the McConkey’s Lift, the

Pioneer Lift, the Eaglet Lift, and the Silver Star Lift (collectively, the “Lift

Equipment”).

(See id. at ¶ 4; see also 6/11/2014 Decl. of Jenni Smith at ¶ 4.)

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18. GPCC estimates that the removal of the foregoing equipment described in

paragraph 17 will require a minimum of 33 weeks and cost in excess of $4 million. (See

6/11/2014 Decl. of Jenni Smith at ¶¶ 6-8.) Some of this work can only be done during the

construction season, which runs from approximately June 1 through October 31. (See 6/11/2014

Decl. of Jenni Smith at ¶ 10.) Work that must be done outside the construction season will take

substantially more time and cost significantly more. (Id.)

19. Even if GPCC were able to vacate the Leased Premises during a single

construction season, there would be insufficient time for Vail or any other operator to install the

equipment necessary to keep PCMR open during the following winter season, even assuming

Vail could overcome such other obstacles to operation as lack of access to the base area, lack of

parking, and lack of water for snowmaking.

20. For periods in which GPCC is not permitted to occupy the Leased Premises and is

not involved in the work necessary to remove or reinstall its equipment, GPCC intends to

continue to operate in the summer season and to operate on a substantially reduced scale during

the winter. (See 6/11/2014 Decl. of Jenni Smith at ¶ 14.)

a. PCMR’s summer operations would include an alpine slide, an alpine

coaster, a zip line, and mountain biking and hiking on the property owned

by PPI.

b. PCMR’s reduced winter operations would include a terrain park, ski

school, and limited skiing on the skiable terrain owned by PPI and

accessible via the First Time Lift and the modified Payday, Eagle, and

Three Kings Lifts. (Id.) GPCC also has plans to build Woodward Park

City, an action sports mountain training center and camp, at the upper

portion of PCMR’s First Time parking lot, but GPCC does not anticipate

that the facility will be fully operational until 2017.

(Id.)

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21. In order to continue operating at this level, in addition to removing the property

identified in paragraph 17, above, it would be necessary for GPCC to (1) shorten, realign, or

relocate the Payday Lift, the Three Kings Lift, and the Eagle Lift, (2) reconfigure its

snowmaking pipe and guns, (3) relocate the top station of the zip line and two magic carpets, and

(4) reconfigure the alpine coaster. (See 6/11//2014 Decl. of Jenni Smith at ¶ 5.) Portions of the

modified ski lifts that are currently located on the Leased Premises and not necessary to the

resulting modified lifts would be removed. (Id.)

22. Should GPCC subsequently be permitted to reoccupy the Leased Premises, it

estimates that it would take at least two construction seasons to reinstall the previously removed

equipment and undo any lift modifications. (See 6/11/2014 Decl. of Jenni Smith at ¶ 13.) It is

difficult to estimate, but GPCC believes that this would cost in excess of $7 million. (Id.)

23. During any period in which GPCC is not permitted to occupy the Leased

Premises, GPCC will suffer an estimated $ in lost profits as a result of an eviction.

(See 6/12/2014 Decl. of Gil Miller (“Miller Decl.”) at ¶ 25, attached as Exhibit C.)

24. More importantly, closure of the Resort will have a catastrophic impact on the

local economy. GPCC’s expert estimates that, should GPCC be required to vacate the Leased

Premises and the Resort is closed for one or more winter seasons, thousands of jobs will be lost

or threatened, primarily in Summit County, and the hundreds of millions of dollars that PCMR

contributes to the Utah tourism economy will also be lost or threatened. (See Adams Decl. at ¶¶

6-7, 20-29, attached as Exhibit A.) For example, if only 25% of the out-of-state skier days at

PCMR were lost to another destination, such as Lake Tahoe or Colorado, because of the

downsizing or closure of PCMR, this would result in a loss of approximately $100 million in

economic activity per year, and approximately 1,100 jobs. (Id. at ¶ 28.)

F. Remaining Claims and Issues

25. After the Court’s May 21, 2014 Memorandum Decision and Order, the following

claims remain to be decided: (a) Talisker’s counterclaim for rent, in which it seeks unspecified

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amounts for Plaintiffs’ use and occupancy of the Leased Premises since April 30, 2011;

(b) Talisker’s counterclaim for unlawful detainer damages (also in an unspecified amount),

including compensation for “waste of the buildings, structures, facilities, and improvements on

the Leased Premises”; and (c) Talisker’s counterclaim for unjust enrichment, seeking unspecified

amounts related to Plaintiffs’ allegedly “unjustly obtained benefits.”1 (See Counterclaims at ¶¶

61-81.)

26. In disclosures and discovery responses relating to the foregoing damages claims,

Talisker has argued: (a) that it is entitled to an unspecified amount for the use of the Leased

Premises for the period from May 1, 2011 to April 30, 2012; (b) that it is entitled to at least $7.7

million for the period from May 1, 2012 to April 30, 2013; and (c) that it is entitled to treble

damages for the reasonable value of the use of the Leased Premises after service of the Notice to

Quit August 28, 2013. (See Talisker’s Supp’l Initial Disclosures at p. 5-6.) According to

Talisker, these amounts are to be the subject of future discovery, expert opinion, and trial. (Id.)

Talisker further claims that any waste to the Leased Premises and the buildings, structures,

facilities, and improvements thereon is “currently unknown but will be the subject of future

discovery, including perhaps expert evidence and testimony.” (Id.)

27. In addition, Plaintiffs have a claim remaining for negligent nondisclosure which

will be tried to a jury. (See 5/21/2014 Memorandum Decision and Order at 62.) Plaintiffs seek

$7 million in damages. (See, e.g., Second Am. Compl. at ¶¶ 47-56.)

28. Before the Court may adjudicate the remaining issues and claims, the parties will

require additional fact and expert discovery. The parties will try the remaining issues to a jury.

1 Originally, Talisker sought disgorgement of the profits earned by GPCC from the operation of PCMR on the Leased Premises. The Court dismissed this portion of Talisker’s counterclaim for unjust enrichment. (See 2/20/2014 Memorandum Decision and Order at 20-23.)

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III. ARGUMENT

A. Issuance of an Order of Restitution Should Be Postponed Pending the Full Adjudication of Talisker’s Unlawful Detainer Counterclaim.

Under section 78B-6-811, a judgment of unlawful detainer consists of four components:

(1) the order of restitution, (2) an award of damages resulting from the unlawful detainer, (3) an

award of rent due and owing, and (4) an award of any attorneys’ fees recoverable under the

statute. Since the judgment needs to include all of these elements, no order of restitution should

be entered until the damages, rent and attorney fees issues are adjudicated. There are some

obvious practical reasons to postpone the issuance of the order of restitution. As shown below,

entry of the order of restitution may enable Plaintiffs to seek a Rule 54(b) certification of all

issues relating to the right to possession of the Leased Premises and to seek a stay under Rule

62(h), which governs stays of judgment on multiple claims, but Plaintiffs believe this is unlikely.

If, however, Rule 54(b) certification is granted and security is required (upon which Defendants

will no doubt insist), under Rule 62(j), the Court will be required to set an appropriate amount

for the bond because of the damages awarded to the judgment creditor. But if the Court has not

yet adjudicated the amount of rent and damages, there will be no judgment creditor, and it is

unclear how the Court will adjudicate the amount of the bond.

Nevertheless, if the Court concludes that it should order restitution before adjudicating

rent and damages issues, Plaintiffs respectfully request that the Court postpone Defendants’

execution on the order pending resolution of these issues.2 Postponement of any eviction will be

essential to preserve Plaintiffs’ right to appeal. Utah trial courts have clear authority to delay

2 Plaintiffs have already requested a hearing on the manner of enforcement. (See 2/4/2014 Opp’n Br. at 14.) If a defendant requests a hearing as to the manner of enforcement of an order of restitution, Utah Code Ann. § 78B-6-812(2)(b) permits the Court to stay enforcement of the restitution order if “the defendant furnishes a corporate bond, cash bond, certified funds, or a property bond to the clerk of the court in an amount approved by the court according to the formula set forth in Subsection 78B-6-808(4)(b)” and “the court orders that the restitution order be stayed.” Subsection 78B-6-808(4)(b)(vi) provides that “[t]he court shall approve the bond in an amount which is the probable amount of costs of suit, including attorney fees and actual damages which may result to the plaintiff if the defendant has improperly withheld possession.”

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entry of or execution on orders to achieve efficiency and fairness. See, e.g., Mower v. Simpson,

2012 UT App 149, ¶ 13, 278 P.3d 1076 (noting that “the district court retains the authority and

discretion to take reasonable steps to make this case more manageable for everyone involved”);

State v. Bergeson, 2010 UT App 281, ¶ 7, 241 P.3d 777 (“It is clear that the district court

exercises the discretion to manage its docket and set firm deadlines for motion practice.”); Welsh

v. Hosp. Corp. of Utah, 2010 UT App 171, ¶ 9, 235 P.3d 791 (“Trial courts have broad discretion

in managing the cases assigned to their courts.” (quotation omitted)); see also Utah Code Ann. §

78B-6-810(5) (“A court adjudicating matters under this chapter may make other orders as are

appropriate and proper.”). The Court should exercise its authority in this case so that it may

adjudicate questions relating to Defendants’ alleged damages in an orderly fashion, and so that

Plaintiffs’ appellate rights will be protected.

We respectfully submit that the Court should postpone rendering any order of restitution

until the unlawful detainer claim has been fully adjudicated. Alternatively, we ask the Court to

enter a stay in terms similar to those in the proposed order attached as Exhibit D. A

postponement will allow time for the adjudication Defendants’ claims for rent and damages—

issues that must be decided before the Court can determine the amount of security for Plaintiffs

to post as a predicate for a stay pending appeal under Rule 62. A postponement will also allow

Plaintiffs to remain on the Leased Premises and continue to operate PCMR while they pursue an

appeal, either under Rule 54(b) or as of right under Utah Rule of Appellate Procedure 4.

B. The Hearing on the “Manner of Enforcement” of the Order of Restitution Should Be Postponed Until the Conclusion of the Appeal on the Unlawful Detainer Counterclaim.

Section 78B-6-812(1) of the unlawful detainer statute requires that any order of

restitution include (1) a determination of the “period . . . appropriate under the circumstances” to

allow the tenant to vacate the leasehold, and (2) a statement advising the tenant of its “right to a

hearing to contest the manner of [the order of restitution’s] enforcement.” In this case, the

parties disagree as to the appropriate period that should be allowed PCMR to vacate the Leased

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Premises and as to the manner in which an order of restitution should be enforced. Plaintiffs

expect to prove that, because of the nature of the assets on the leasehold, they will need a period

of months to vacate the property. They expect to prove as well that they are entitled under the

Leases to remove equipment that is not affixed to the soil. Plaintiffs’ description of the work that

will be necessary for PCMR to vacate the Leased Premises, together with their estimate of the

time and expense that will be involved, is set forth in the Declaration of Jenni Smith, which

accompanies this memorandum. We anticipate that Defendants will contest both the period that

should be allowed to vacate the premises and the categories of assets that may be removed.

Plaintiffs respectfully submit that there is no need for the Court to resolve these issues at

the present time. The Court’s determination of the manner of eviction should be postponed until

it is clear that there will be an eviction. The hearing required by section 78B-6-812(1) should be

postponed until Plaintiffs’ appeal on the substantive issues has been concluded.

C. Defendants Should Be Prevented from Evicting PCMR Until Plaintiffs Have Had the Opportunity to File an Appeal and Obtain a Stay.

As Plaintiffs have made clear from the outset, they intend to exhaust all available means

to retain possession of the Leased Premises, including appeal. Plaintiffs cannot do so, however,

until some or all of the remaining claims are resolved, including, in particular, any claims “based

on the same operative facts” as the claims or issues that have already been resolved by the Court.

See Kennecott Corp. v. Utah State Tax Comm’n, 814 P.2d 1099, 1103-05 (Utah 1991) (“Where

the facts are sufficiently similar to constitute res judicata on the remaining issues, 54(b)

certification is generally precluded.”); see also Cent. Utah Water Conservancy Dist. v. Upper E.

Union Irr. Co., 2013 UT 67, ¶¶ 39-42, 321 P.3d 1113 (discussing Rule 54(b) certification). As a

consequence, all issues relating to Talisker’s counterclaim for recovery of possession of the

Leased Premises must be resolved before Plaintiffs may seek a certification under Rule 54 (b).

See Bichler v. DEI Sys., Inc., 2009 UT 63, ¶ 32, 220 P.3d 1203 (after district court had granted

summary judgment on the issue of possession, outstanding rent, interest, late charges, and

attorneys’ fees, the Court held that “[b]efore directing an entry of final judgment under rule 54(b)

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on the issue of possession, the court must resolve all claims relating to possession.”); see also

DFI Prop. LLC v. GR 2 Enter. LLC, 2010 UT 61, ¶ 19, 242 P.3d 781 (dismissing appeal for lack

of jurisdiction because the district court’s judgment in an unlawful detainer action did not

establish the amount of the awards of attorney fees and treble damages); Phillips v. Biers, Case

No. 20100743-CA, 2010 WL 5027052, at *1 (Utah Ct. App. Dec. 9, 2010) (unpublished) (“The

order of restitution is not a final, appealable judgment because it does not resolve all issues

raised in the unlawful detainer case. Specifically, the order of restitution failed to resolve the

Phillipses' claims for monetary damages. This includes the Phillipses’ request for attorney

fees.”).3 In other words, the earliest Plaintiffs may seek Rule 54(b) certification is upon this

Court’s ruling on Talisker’s pending motion for partial summary judgment, but it is uncertain

whether such certification will or should be granted when Talisker’s claims for rent, damages,

and attorneys’ remain outstanding.

Plaintiffs should not be deprived of their appellate rights based on the procedural

peculiarities of this case. They should not be forced to face an eviction order that, in the absence

of a stay, may be enforceable immediately— especially if Plaintiffs are unable to appeal and

thereby seek a stay pursuant to Rule 62(d) or (h). See Utah R. Civ. P. 62(d) (“When an appeal is

taken, the appellant by giving a supersedeas bond may obtain a stay, unless such a stay is

otherwise prohibited by law or these rules. The bond may be given at or after the time of filing

the notice of appeal. The stay is effective when the supersedeas bond is approved by the

court.”), (h) (“When a court has ordered a final judgment on some but not all of the claims

presented in the action under the conditions stated in Rule 54(b), the court may stay enforcement

of that judgment until the entering of a subsequent judgment or judgments and may prescribe

such conditions as are necessary to secure the benefit thereof to the party in whose favor the

judgment is entered.”).

3 Copies of all unpublished cases cited herein are attached as Exhibit E.

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For the reasons set forth below, Plaintiffs respectfully request that the Court issue an

order temporarily staying Defendants’ attempts to execute on any order of restitution until

Plaintiffs have the opportunity to file an appeal and obtain a stay under Rule 62.

1. Injustice Will Result if Talisker is Permitted to Enforce or Execute on Its Judgment, Including an Order of Restitution.

The district court should exercise its discretion to preemptively stay enforcement of any

judgment, including an order of restitution, in order to prevent injustice. See Utah R. Civ. P.

62(a); Taylor Nat’l, Inc. v. Jensen Bros. Constr. Co., 641 P.2d 150, 154 (Utah 1982) (“court, in

its discretion, may temporarily stay execution in order to prevent injustice, but it may not negate

its own judgment by indefinitely staying execution thereon”); Palmquist v. Palmquist, 6 Utah 2d

294, 296, 312 P.2d 779, 780 (1957) (“Equitable relief from the enforcement of a judgment is not

granted on the ground that the parties have cross demands, merely, but rather that some injustice

would result were execution not stayed.”); see also 30 Am. Jur. 2d Executions, Etc. § 301 (“A

stay of execution is generally granted to satisfy the ends of justice or prevent injustice.”).

If Talisker is allowed to execute on an order of restitution before Plaintiffs are able to

obtain a stay pending their appeal, the result will be an injustice to the Plaintiffs and unnecessary

harm to the many third parties who depend on PCMR’s continuing operation for their economic

survival. Absent a stay, Plaintiffs would be forced to vacate the Leased Premises, which will

result in the immediate closure of PCMR. The closure of PCMR – even for a single winter

season – will destroy hundreds of jobs and will drive dozens of shops and restaurants out of

business. The economic impact on the people of Park City, Summit County, and the State of

Utah will be devastating. (See Adams Decl. at ¶¶ 23-29, Exhibit A.) GPCC itself will be forced

to incur costs in excess of $4 million merely to remove its equipment from the Leases Premises –

a task that may ultimately be determined to have been unnecessary. (See 6/11/2014 Decl. of

Jenni Smith at ¶¶ 6-7, Exhibit B.) An eviction will cause GPCC lost profits of approximately

$ . (See Miller Decl. at ¶ 25, Exhibit C.)

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17

Plaintiffs have the unquestioned right to appeal. A corollary to this right is the right to

stay any eviction pending resolution of Plaintiffs’ appeal. Otherwise, Plaintiffs’ right to appeal

will be rendered largely meaningless. The Court should, therefore, stay Talisker’s execution on

a judgment on the unlawful detainer claim, including an order of restitution, to allow Plaintiffs to

obtain and post a supersedeas bond sufficient to stay all proceedings pending appeal.4 See Utah

R. Civ. P. 62(a), (d), (h) & (j).

2. No Party Will Be Harmed by Staying Execution of an Order of Restitution.

The only party that could conceivably claim to be a judgment creditor in this case is

Talisker. Of all the Defendants, only TLH and UPCM have asserted counterclaims for damages,

yet none of these counterclaims has been decided. As a result, at present, there is no judgment

creditor whose interests would need “protect[ion]” during any stay. Cf. Utah R. Civ. P. 62(j)(1).

Moreover, as the result of its transaction with Vail last year, Talisker has already been paid more

than fair market rent for the Leased Premises since May 2013. In that transaction, Vail agreed to

pay Talisker rent that, according to Talisker’s chairman, far exceeded amounts it anticipated it

could obtain from PCMR. (See 4/8/2014 Decl. of Jack Bistricer at ¶¶ 4 (“the highest value for

the land underlying Canyons Resort and PCMR would be achieved by linking the two resorts

together – and, further, that such linkage would be more likely to occur if the resorts were

operated under unified management”), 6 (the Vail Transaction is “a much better deal for the

Talisker-affiliated companies involved in the transaction than any deal that could have been

achieved with PCMR management”).) Presumably Talisker will continue to receive such

payments during the remainder of this case, including through any appeal.

In short, since Talisker’s claims for rent and damages have not yet been the subject of

discovery or adjudication, it is impossible at this stage to identify any harm to Talisker from a

4 This is particularly true since, among the issues Plaintiffs intend to appeal, is the Court’s denial of Plaintiffs’ motion to dismiss Talisker’s counterclaim for unlawful detainer. (See 2/20/2014 Mem. Decision and Order.)

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18

stay pending appeal. And since Vail is already committed to pay Talisker a premium for the

PCMR Leasehold, it is difficult to see how Talisker could claim any loss at all. Talisker not only

lacks a money judgment against Plaintiffs: it is clear that the landlord is not being deprived of

rent for the property. Cf. Utah Code Ann. §§ 78B-6-812(b), -808(4)(b) (possession bond

includes costs of any “actual damages”).

As explained above, Plaintiffs intend to appeal at the first opportunity afforded by the

rules, either through certification pursuant to Utah Rule of Civil Procedure 54(b) or an appeal as

of right under Utah Rule of Appellate Procedure 4. Plaintiffs will post a supersedeas bond

adequate to protect any judgment creditor. Upon approval of the bond by the Court, Plaintiffs

will be entitled to a stay of all proceedings pending appeal. See Utah R. Civ. P. 62(d), (h); see

also 30 Am. Jur. 2d Executions, Etc. § 302 (temporary stay “may be appropriate because once an

appeal is taken for a money judgment, a stay of execution of the judgment generally must be

conditioned upon the filing of an appropriate bond”).5

3. Should the Court Require it, Plaintiffs Will Post Security.

Because, as noted above, Talisker’s claims for rent, attorneys’ fees, and unlawful detainer

damages (as well as Plaintiffs’ claim for negligent nondisclosure) have not yet been decided,

Plaintiffs do not believe it is necessary or appropriate to require Plaintiffs to post any security

5 Courts in Utah and elsewhere routinely stay orders of restitution pending appeal of unlawful detainer claims. See, e.g., Fed. Nat’l Mortg. Ass’n v. Sundquist, 2013 UT 45, ¶ 7, 311 P.3d 1004 (“The order of restitution was stayed pending appeal. We have jurisdiction under Utah Code section 78A–3–102(3).”); Coleman v. Thomas, 2000 UT 53, 4 P.3d 783, 785 (“The trial court denied the motion for a new trial but stayed execution of the restitution order pending an appeal of the court’s decision.”); see also Halajian v. Deutsche Bank Nat. Trust Co., 1:12-CV-00814 AWI, 2013 WL 593671, at *1 (E.D. Cal. Feb. 14, 2013) (unpublished) (after granting motion for summary judgment on an the unlawful detainer claim, the trial court stayed the writ of execution and on appeal, the appellate court granted the motion to stay enforcement of the judgment pending appeal); Bowshier v. Bowshier, Case No. 2013-CA-33, 2013 WL 5314565, at *8 (Ohio Ct. App. Sept. 20, 2013) (unpublished) (“When this cause of action was first on appeal to this court, until we dismissed that appeal, we stayed the execution of the restitution order, subject to the condition that Teddy deposit $650 per month either into an escrow account controlled by counsel for both parties, jointly, or with the clerk of the municipal court. It appears that the latter option was chosen.”).

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sufficient to cover the period from entry of the order of restitution until entry of judgment.

Should the Court disagree, Plaintiffs will post security in any amount required by the Court

which Plaintiffs are able to afford. Cf. Utah Code Ann. §§ 78B-6-812(b), -808(4)(b). And, of

course, upon entry of an appealable judgment, Plaintiffs will obtain and file a supersedeas bond

sufficient to stay execution pending resolution of the appeal. See Utah R. Civ. P. 62.

IV. CONCLUSION

For the reasons set forth herein, Plaintiffs ask the Court to (1) delay issuance or stay

execution of any order of restitution pending adjudication of Talisker’s counterclaim for

unlawful detainer and (2) preemptively stay execution of any appealable judgment, including

any order of restitution, pending entry of a supersedeas bond that, upon approval by the Court,

will stay all proceedings pending appeal.

DATED this 12th day of June, 2014.

Snell & Wilmer L.L.P.

/s/ Amber M. Mettler Alan L. Sullivan Amber M. Mettler

Zimmerman Jones Booher LLC Michael D. Zimmerman Troy L. Booher

Weil Gotshal & Manges, LLP James W. Quinn Bruce S. Meyer

Attorneys for Plaintiffs/Counterclaim Defendants

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CERTIFICATE OF SERVICE

I hereby certify that on the 12th day of June, 2014, I caused the foregoing

MEMORANDUM IN SUPPORT OF PLAINTIFFS’ MOTION TO POSTPONE OR

STAY THE EFFECT AND ENFORCEMENT OF ANY RULING THAT MAY BE

RENDERED ON DEFENDANTS’ UNLAWFUL DETAINER COUNTERCLAIM to be

served via the Court’s electronic filing system and/or U.S. mail upon the following:

John R. Lund Kara L. Pettit SNOW, CHRISTENSEN & MARTINEAU 10 Exchange Place, 11th Floor Post Office Box 4500 Salt Lake City, Utah 84145-5000 (Via electronic filing)

Howard M. Shapiro (pro hac vice pending) Jonathan E. Paikin (pro hac vice pending)

Christopher E. Babbit (pro hac vice pending) WILMER CUTLER PICKERING HALE and DORR LLP 1875 Pennsylvania Avenue, NW Washington, D.C. 20006 (Via U.S. mail) Attorneys for Defendants United Park City Mines Company; Talisker Land Holdings, LLC; Talisker Land Resolution LLC; and Talisker Canyons Leaseco LLC

Jonathan A. Dibble RAY QUINNEY & NEBEKER P.C. 36 South State Street, Suite 1400 Salt Lake City, UT 84111 (Via electronic filing)

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Robert C. Blume (pro hac vice) Ryan T. Bergsieker (pro hac vice) GIBSON, DUNN & CRUTCHER LLP 1801 California Street Denver, CO 80202-2642 (Via U.S. mail) Attorneys for Defendant VR CPC Holdings, Inc. Mark James Hatch, James & Dodge, P.C. 10 West Broadway, Suite 400 Salt Lake City, Utah 84101 (Via electronic filing) Attorneys for Talisker Canyons Finance Co LLC and Flera, LLC Michael Gill Daniel Storino Mayer Brown LLP 71 South Wacker Drive Chicago, Illinois 60606 (Via U.S. mail) Of Counsel for Talisker Canyons Finance Co LLC and Flera, LLC /s/ Patricia Haslam

EXHIBIT A

1



Plaintiffs,

vs.

UNITED PARK CITY MINES COMPANY, a Delaware corporation, and TALISKER LAND HOLDINGS, LLC, a Delaware limited liability company, TALISKER LAND RESOLUTION LLC, a Delaware limited liability company, VR CPC HOLDINGS, INC., a Delaware Corporation, FLERA, LLC, a Delaware limited liability company, TALISKER CANYONS LEASECO LLC, a Delaware limited liability company, TALISKER CANYONS FINANCE CO LLC, a Delaware limited liability company, and JOHN DOE CORPORATIONS 1 THROUGH 10,

Defendants.

DECLARATION OF

GREGORY D. ADAMS

Case No. 120500157

Judge Ryan Harris


Counterclaim Plaintiffs,

vs.



I, Gregory D. Adams, declare as follows:

1. I am over the age of 18 years, a resident of the State of Utah, and am fully competent in

all respects to testify regarding the matters set forth herein.

2

2. I am a Vice President at Charles River Associates (“CRA”) in Salt Lake City, Utah, and

an Adjunct Assistant Professor in the Department of Economics at the University of

Utah. I hold a Bachelor’s Degree in Economics from Wake Forest University, a Master’s

Degree in Agricultural and Resource Economics from the University of Main-Orono, and

a Doctorate Degree in Agricultural and Natural Resources Economics from the

University of California at Berkley.

3. I have over 20 years of experience in applied microeconomic analysis and consulting, and

I have served as an expert in a wide range of areas, including antitrust; lost profits;

intellectual property; environmental and natural resources; and the agricultural,

agribusiness, and food industries. I have testified as an economic expert in 4 trials as

well as several arbitration proceedings, and via deposition in over 15 instances. A copy

of my C.V. is attached to this Declaration as Exhibit 1. A list of my past testimony is

attached as Exhibit 2.

4. I have been asked by Plaintiff, Greater Park City Company (“GPCC”) d/b/a Park City

Mountain Resort (“PCMR”), to analyze the economic impact on the economies of Park

City and Summit Country Utah if PCMR were prevented from operating on the disputed

“resort lands.”

5. I have reviewed certain information provided by GPCC and PCMR, including the

materials referenced herein that contain data on the revenues, employment, and tax

payments by PCMR, and have had discussions with PCMR management. I have also

been provided the results of PCMR surveys of resort visitors, surveys of the Utah and

national ski industry, and I have reviewed publicly available data on the economy of

Summit County, including employment and tax revenues, as well publicly available

economic research on the impact of the ski industry to the economy of Utah. A list of all

materials that I have considered in this assignment is attached to this Declaration as

Exhibit 3.

3

Summary of Findings

6. The economic importance of PCMR to Park City and Summit County is substantial.

PCMR is easily the most popular ski resort in Summit County, recording approximately

% of total skier days in the County and % of out-of-state skier days for all Utah

winter resorts. Out-of-state visitors to PCMR stay an average of almost 6 nights in Park

City or Summit County, and spend an average of $309 per day, or almost $2,000 per

visit. PCMR directly employs over 1,100 people during peak operations, with 900

employees over most of the winter season. In addition, businesses located at the base

areas of PCMR employ approximately 700 additional people. The PCMR and base

business employees represent approximately 8% of total Summit County employment

and 22% of Summit County Hospitality and Leisure employment. PCMR tax payments

account for approximately 11% of local tax revenue for Park City. In total, the PCMR

contribution to the Utah tourism economy is over $400 million annually and out-of-state

visitors to PCMR support approximately 4,600 jobs in Utah.

7. The eviction of PCMR from the “resort lands” would result in a significant negative

impact on the overall economy of Park City and Summit County. These negative impacts

would include a significant drop in overall employment in the City and County, a

significant drop in tax revenues to the City and County, and a significant loss in business

and goodwill to many independent business owners. While I understand PCMR plans to

continue limited winter and summer operations if it is prevented from utilizing the resort

lands, PCMR would lose at least one full winter and summer season while converting to a

smaller operation, and the subsequent limited operations would do little to ameliorate the

negative economic impacts that will result from the smaller operational scale at PCMR.

Furthermore, while some out-of-state visitors who would otherwise visit PCMR may still

come to Summit County and ski and ride at Deer Valley and/or Canyons, the closure or

significant downsizing of PCMR will likely result in a significant decrease in overall out-

4

of-state visitors to Park City and Summit County. If only 11% of the out-of-state skier

days in Summit County are lost because visitors choose to vacation elsewhere when

PCMR is closed or dramatically smaller, I estimate this will result in a loss of

approximately 1,100 jobs and $100 million in annual economic activity in Utah. The

majority of this impact would be felt in the Park City and Western Summit County areas.

Direct Economic Impact of PCMR

8. PCMR first opened on December 21, 1963 under the name of Treasure Mountain with a

gondola and two lifts. The name of the resort was changed to Park City Ski Area in 1966

and then to Park City Mountain Resort in 1996.1 Today the resort has 16 lifts and three

conveyors that provide access to 116 trails on 3,300 acres of land.2 PCMR is one of the

largest Utah ski and snowboard resorts, measured by skier days, and also is one of the top

Utah resorts in the number of skier days from out-of-state (or “destination”) skiers.

PCMR has consistently been one of highest rated Utah resorts; for instance, it was ranked

by SKI Magazine as the 5th best ski resort in North America.3

9. For the 2012/2013 season, PCMR total revenues exceeded $ .4 During that

season, PCMR recorded total skier days.5 Total revenues are made up of lift

ticket sales, ski school, ski rental and repair, food and beverage sales, retail sales, and

other operating revenues, as shown in Table 1.

10. PCMR employs approximately 900 people during most of the winter ski season, with

peak employment of approximately 1,100 during the busiest times of the season,6 and

1 See http://en.wikipedia.org/wiki/Park City Mountain Resort. Last accessed May 8, 2014.

2 See http://www.parkcitymountain.com/site/mountain‐info/conditions/resort‐stats. Last accessed May 8, 2014.

3 See http://www.skiutah.com/news/Park‐City‐50th‐Anniversary. Last accessed June 11, 2014. 4 See “PCMR CNSD HIST.xls.”

5 See “PCMR CNSD HIST.xls.”

6 See “PCMR Headcount and Labor by pay period.xlsx.”

5

approximately 200 people during the summer season.7 Total full-time equivalent

employees were approximately 439.8 See Table 2. The total payroll for PCMR exceeded

$ in the 2012/2013 season.9 See Table 3. PCMR employees represent

approximately 14% of all Leisure and Hospitality workers in Summit County, and

approximately 5% of all employees in Summit County.10

11. Independent businesses (such as restaurants, ski shops, and gift shops) located at the base

of PCMR employ approximately 700 people during the winter season and over 250

during the summer season, nearly matching the employee count of PCMR.11 Taking

these employees into account, PCMR and the independent businesses at its base areas

account for approximately 22% of Summit County Leisure and Hospitality employment,

and 8% of total employment.12

12. The total sales and use tax revenue generated by GPCC for the State of Utah exceeds $3

million per year.13 GPCC accounts for approximately 11% of the local tax revenue for

Park City.14


8 See “PCMR Organizational Template 04 2014.xlsx.”


10 For Summit County employment information, see the 2012 Economic Report to the Governor, Table 14. The state employment data reported herein correspond closely to employment data reported by the Bureau of Labor Statistics (see http://www.bls.gov/opub/ee/2012/sae/tabled1 201202.pdf), which defines employed as the total number of persons on establishment non‐farm payrolls employed full‐ or part‐time who receive pay. For PCMR employment information, see “Headcount and Total Labor 11.12.xlsx.”

11 See “Copy of Resort Area Base Shops.xlsx.” Thirty five of these employees work at the Sundance Institute, and thus may not be directly affected by a change in operations at PCMR.

12 See “PCMR Headcount and Labor by pay priod.xlsx,” “Copy of Resort Area Base Shops.xlsx” and the 2012 Economic Report to the Governor, Table 14.

13 See “Copy of Salestax 11‐12 Season.xlsx” and “Salestax 12‐13 Season.xlsx.”

14 The local sales tax in Park City is a 1.0% tax. Applying this tax rate to the “net taxable sales and purchases” of PCMR in FY2012 (see “Copy of Salestax11‐12 Season.xls”) results in local sales tax payments of approximately $430,000 in FY 2012, which is approximately 11% of the $4 million local sales and use tax reported for Park City in 2012 (see the 2013 Annual Report, Utah Tax Commission, p. 39).

6

13. Park City Mountain Resort generates around skier days each year. This

represents approximately % of the skier days in Summit County and % of the skier

days in the State.15 The PCMR share of destination (or out-of-state) skier visitors is

higher than average for Utah resorts. Based on data from Ski Utah, I estimate that %

of the destination skier days in Utah are skiers at PCMR.16

Indirect Economic Impact of PCMR

14. The economic impact of PCMR on Park City and Summit County goes far beyond the

direct employment and tax payments of PCMR. As noted above, at the base of PCMR

are numerous lodging, ski/board rental, retail, coffee, restaurant, sales, and non-profit

companies. These businesses could not thrive – or likely even survive – in an atmosphere

where PCMR is not functioning as a destination winter resort. In addition to businesses

directly located at the PCMR base areas, many Park City and Summit County businesses

depend on the success of PCMR, and the spending by out-of-state skiers who come to

PCMR. Most obviously, hotels, restaurants and shops in Park City and Summit County

depend heavily on the patronage of out-of-state visitors who vacation in the area. When

out-of-state skiers come to PCMR, they stay an average of 5.8 nights and ski an average

of 4.7 days.17 During the 2010/2011 ski season, the per capita daily expenditure for out-

of-state ski visitors in Summit County was $309.18

15 See “Market Share Historical.xlsx.”

16 In the “Ski Utah 2010‐11 Final Research Presentation,” Ski Utah reports that 62% of visitors are destination (out‐of‐state) visitors. Applying this percentage to the reported 4,200,000 total Utah skier days gives an estimate of 2,604,000 destination skier days in Utah. PCMR reports that 81% of its visitors in the 2011/12 season were destination (out‐of‐state) visitors (see “PCMR Final Report 2011‐12” p. 6). Applying this percentage to the reported total PCMR skier days (“Copy of PCMR PL HISTORY SUMMARY.xls”) gives an estimate of destination skier days at PCMR. Comparing these estimates of destination skier days results in approximately % of destination skier days in Utah that are at PCMR.

17 See “1314 Park City Mountain Resort Report 18.xls,” “Biweek‐Table” tab. See also PCMR 2011/12 Season Final Report, pp. 38‐39 and PCMR 2012/13 Season Final Report, pp. 41, 43.

18 See “Ski Utah Expenditure Detail.pdf.” Daily expenditures for in‐state skiers average $94.

7

15. More broadly, businesses that supply goods and services to PCMR and PCMR guests, as

well as businesses that supply goods and services to those businesses, depend on the

continued success of PCMR in attracting destination skiers and other visitors. This so-

called indirect impact or “multiplier effect” is widely recognized in economics and public

policy studies and can be reliably quantified.19 Calculation of the multiplier effect results

in a reliable estimate of the total economic impact of a business such as PCMR.

16. The total economic impact of PCMR visitors, including both the direct spending by

visitors (and the associated employment) as well as the indirect spending and

employment, is typically measured in two categories: Direct Expenditures and Additional

Earnings. The Direct Expenditures associated with the ski industry include “all costs

associated with ski trips by visitors to the state, including lift tickets, meals, lodging,

entertainment, and transportation expenses.”20 Additional Earnings, on the other hand,

represent the “economic impact of spending that originates outside of a regional

economy”21 and include the economic activity that is supported by the employees and

businesses that provide the goods and services counted in Direct Expenditures. For

instance, when an out-of-state skier comes to Park City and rents skis, those expenditures

are Direct Expenditures, and these expenditures create the employment, profits and tax

payments from the ski rental shop. When the person who owns or is employed at the ski

shop then goes out to dinner using their earnings from the ski shop, those expenditures

are Additional Earnings, which support the creation of employment, profits and tax

payments from goods and services sold to “locals.”

19 The Input‐Output model used to calculate the economic impact of spending that originates outside of a regional economy is known as RIMS II and is commonly used. See, for example, Isaacson, Alan, “Economic Impact of the Utah Alpine Ski Industry,” July 25, 2006 ; Leaver, Jennifer, “The State of Utah’s Tourism, Travel, and Recreation Industry,” Bureau of Economic and Business Research, Vol. 73, No. 4, 2014, p. 7; “2007 Economic Report to the Governor,” p. 215; and Fjeldsted, Boyd, “Regional Input‐Output Multipliers: Calculation, Meaning, Use and Misuse,” Bureau of Economic and Business Research, Vol. 50, No. 10, Oct. 1990.

20 See Isaacson, Alan, “Economic Impact of the Utah Alpine Ski Industry,” July 25, 2006.

21 See Isaacson, Alan, “Economic Impact of the Utah Alpine Ski Industry,” July 25, 2006.

8

17. In the case of the Utah ski industry, the Direct Expenditures and Additional Earnings

have been well documented and analyzed. Several studies have measured the economic

impact of the Utah Ski Industry as noted in Table 4. These include analyses by Ski Utah

(the Utah ski industry trade association), as well as by the Office of the Governor and the

Bureau of Economic and Business Research.

18. The most recently available data for 2013 from the Bureau of Economic and Business

Research shows Out-of-State Direct Expenditures from the Utah ski industry to be $1.1

billion.22 Using information from other studies, I estimate the associated Additional

Earnings to be approximately $572 million.23 Considering both the Direct Expenditures

and Additional Earnings, the total economic impact on Utah of skiing-related tourism is

$1.672 billion. Furthermore, skiing-related tourism is estimated to support over 18,000

jobs in Utah.24

19. As noted previously, PCMR has approximately % of the skier days in the Utah

market.25 Furthermore, PCMR draws a disproportionally high number of out-of-state

visitors, and thus PCMR has approximately % of the out-of-state skier days in the Utah

market.26 Apportioning the tourism impact based on the percentage of out-of-state skier

days, I estimate PCMR’s contribution to Utah tourism to be over $400 million and 4,600

jobs.27 The vast majority of this economic impact likely occurs in Park City and Summit

County.

22 Leaver, Jennifer, “The State of Utah’s Tourism, Travel, and Recreation Industry,” Bureau of Economic and Business Research, Vol. 73, No. 4, 2014, p. 7.

23 Based on the studies included in Table 4, Additional Earnings are approximately 52% of Out‐of‐State Direct Expenditures. Applying this percentage to the reported $1.1 billion in Direct Expenditures results in approximately $572 million estimated Additional Earnings. 24 See Leaver, Jennifer, “The State of Utah’s Tourism, Travel, and Recreation Industry,” Bureau of Economic and Business Research, Vol. 73, No. 4, 2014, p. 7.

25 See “Market Share Historical.xlsx.”

26 Supra Footnote 16.

27 This apportionment likely understates the contribution of PCMR to the overall Utah ski economy. Out‐of‐state skiers in Summit County have a higher daily expenditure than out‐of‐state skiers overall at Utah ski resorts. (See “Ski Utah Expenditure Detail,” p. 1.) Therefore, my apportionment of the overall economic impact of Utah ski

9

Economic Impacts of Eviction of PCMR from the Resort Lands

20. If PCMR is evicted from the Resort Lands, not all of PCMR’s economic impact on the

community will lost. First, as I understand it, PCMR plans to continue limited winter and

summer operations in the event it is evicted from the resort lands, although re-configuring

the resort operations would likely cause PCMR to not operate at all for a full winter and

summer season. Second, if PCMR limits or ceases operations, some of the out-of-state

visitors who would have otherwise visited PCMR may continue to vacation in Park

City/Summit County and visit the other ski areas in Summit County (Deer Valley and

Canyons). Thus, while PCMR would lose the benefit of these visitors’ spending, Park

City and Summit County (and the independent business that cater to these visitors) would

not. In my judgment, however, the degree to which either of these factors would offset

any negative economic impacts on the local economy would be small. Thus, eviction of

PCMR from the resort lands will almost certainly have a very large negative impact on

Park City and Summit County (and to a lesser degree, Utah as a whole).

21. As noted above, if PCMR is evicted from the resort lands it plans to re-configure the lifts

(and as necessary other operations such as the Alpine Slide and Zip Line) in order to

operate on the land that it does control.28 This reconfiguration will involve significant

heavy construction activities, and cannot be accomplished quickly. I understand that, if

PCMR were ordered to vacate the resort lands by July 1, the resort would immediately

cease summer operations (since the associated construction activities would not be

compatible with commercial operations), and would not be able to open this winter on an

tourism – based on only the number of skiers who visit PCMR, and not their expenditures – will understate the true contribution of PCMR.

28 My understanding of the PCMR plans if it is evicted from the resort lands, and the time needed to implement these plans, is based on discussions with PCMR management.

10

even limited basis. Thus, an eviction order would cause the loss of an almost full

summer season and a full winter season.

22. Moreover, if evicted from the resort lands, the subsequent commercial operations of

PCMR will be very limited. PCMR has forecasted its future level of sales, revenues, and

expenses in the case that eviction was to occur. With an eviction, PCMR will cease

operation of 12 of its current 16 lifts, and it will have to shorten (and possibly re-align)

three of the four remaining lifts. These modified lifts would have 3,566,063 Vertical

Transport Feet/Hour (VTFH), which is 11% of its current 32,643,548 VTFH. The

number of skiable acres would drop from 3,300 to 202 (6% of the original acreage).29

23. Given these reductions in lift facilities and skiable land, PCMR has estimated that all

lines of businesses will operate at an 85% reduction compared to full operations, with the

exception of summer operations (assumed unchanged) and a 50% reduction in retail

sales. Based on these assumptions, the post-eviction revenue at PCMR is estimated to be

only 22.5% of its current level.30 However, this revenue will likely come from almost all

local visitors, rather than the current large proportion of out-of-state visitors. As noted

above, local visitors to Utah ski areas spend far less than out-of-state visitors. Thus, these

local visitors do not have nearly the same economic impact on independent businesses as

do out-of-state visitors. Also, the economic impacts of PCMR estimated above ($400

million annually and 4,600 jobs) are the economic impacts solely from out-of-state

visitors, and do not include any impact from local resort guests. Thus, the planned

limited operations at PCMR are unlikely to preserve any significant part of this economic

contribution to the local economy.

24. To be sure, should PCMR move to limited operations some of the out-of-state skiers who

would otherwise come to PCMR would still come to Summit County, but instead ski at

29 Information from PCMR. 30 See “PCMR PL Forecast 2014 2015.xlsx.”

11

Deer Valley and/or Canyons. Indeed, it is likely that many of the out-of-state skiers who

visit PCMR also ski at Deer Valley and/or Canyons on the same trip. If those visitors

continue to vacation in Summit County at the same rate (i.e., same number of visitors,

same duration of trip, same expenditure levels), then their economic impact will remain

even if they no longer ski at PCMR. The economic activity will not be lost to Summit

County; rather, the direct expenditures will simply be “diverted” from PCMR to Deer

Valley and/or Canyons. While I believe it is likely that some of this type of “diversion”

will occur, in my professional opinion the amount of the diversion will be limited.31

Therefore, eviction of PCMR from the resort lands will lead to a large reduction in out-

of-state visitors to Summit County, and a large decrease in overall economic activity.

25. I base my conclusion of limited diversion on several factors. First, neither Deer Valley

nor Canyons has sufficient capacity to take on all the skier days generated by PCMR. As

noted above, PCMR has approximately % of total skier days in Summit County. If all

of these skiers switch to skiing at Deer Valley and Canyons, this would almost double the

number of skiers at both resorts. Since most skier days occur by definition on the most

popular ski days, most of the diverted PCMR skier visits would occur on days when Deer

Valley and Canyons are already at their busiest. On these busy days these resorts are

usually already at capacity on parking, and are otherwise crowded (with long lift lines

and crowded on-mountain amenities such as restaurants and ski schools). Further, Deer

Valley limits the number of passes each day to 7,500, and states on its website that

“[d]uring holiday periods such as the week between December 25 through January 4, as

31 It is also important to note that even if there was complete diversion (which I believe would be extremely unlikely) and no net impact on the Park City/Summit County economy, this does not imply that there would be no harm to local independent businesses in Park City and Summit County. As noted above, independent businesses located at the base areas of PCMR employ approximately 700 people. If PCMR significantly downsizes its operations, leading all or most destination skiers to instead ski at Deer Valley or Canyons, these independent businesses will suffer significant harm.

12

well as Presidents’ Day weekend, the resort reaches capacity.”32 The holiday period,

December 25 – January 4, is precisely the period when PCMR is likely to be busiest.

26. In addition, Deer Valley does not allow snowboarding, and approximately % of PCMR

visitors are snowboarders (and thus much more than % of the out-of-state families and

other groups that visit PCMR likely have at least one snowboarder in their group).33

Thus, for many of the PCMR visitors, Deer Valley is not an alternative.

27. Finally, the dramatic downsizing (and closure for at least one season) of PCMR would

likely make Park City and Summit County a less desirable vacation destination, and lead

to a decrease in the number of out-of-state skiers who choose to vacation there. One of

the attractions of Park City and Summit County as a ski destination is the availability of

three ski resorts in close proximity. Visitors to Park City and Summit County can – and

do – ski and ride at multiple resorts (each with a distinctive personality) on a single visit.

The downsizing of PCMR would leave visitors with a choice of only two full service

resorts in Summit County, making Park City and Summit County a less desirable

vacation destination. Furthermore, of the three ski areas in Summit County, only PCMR

has a physical connection to the town of Park City, with the Town Lift and associated ski

runs that terminate in Old Town, as well as a main base location that is close to town.

Thus, only PCMR provides potential visitors with the option to stay in/close to town

while still at/close to the ski area.

28. If only 10% of the out-of-state skier days at PCMR were lost to another destination such

as Lake Tahoe or Colorado because of the downsizing/closure of PCMR, this would

result in a loss of approximately $40 million in economic activity per year, and

approximately 460 jobs. These 10% of PCMR out-of-state skier days would represent

32 See http://www.deervalley.com/About/Information/History and http://www.deervalley.com/Tickets/Ticket/TicketLanding. Last accessed May 20, 2014.

33 See “1314 Park City Mountain Resort Report 18.xls,” “Equipment” tab.

13

only about 4.5% of all out-of-state skier days in Summit County.34 If 25% of the out-of-

state skier days at PCMR – or only about 11% of out-of-state skiers days in Summit

County – were lost to another destination, this would result in a loss of approximately

$100 million in economic activity per year, and over 1,100 jobs. Most of these losses

would occur in Park City and Summit County.

Conclusion

29. It is clear that PCMR plays a critical role in the Park City and Summit County

economies. In addition to the significant direct impact of PCMR – in terms of direct

employment and taxes paid – spending by visitors to PCMR supports a large number of

jobs and businesses in the area. While some of these same resort visitors may continue to

visit Summit County should PCMR be forced to limit its operations, it is likely that many

visitors – especially out-of-state visitors – would choose to vacation in other destination

areas (such as Colorado, California, etc.). Thus, eviction of PCMR from the resort lands

would almost certainly have a very large negative impact on the economies of Park City

and Summit County, leading to widespread unemployment and harm to numerous

independent businesses. My general conclusion is apparently shared by the Park City

community. In a recent edition of the local newspaper, The Park Record, the

newspaper’s editor stated:

[The PCMR/Talisker] impasse poses a significant threat to the

local economy. There is no logical portal to the disputed terrain

other than the existing PCMR base area, and that plaza's proximity

to the heart of Park City's commercial district makes it an integral

34 As noted above, PCMR has approximately % of total skier days in Summit County. While PCMR has a higher than average – for the state of Utah – mix of out‐of‐state skiers, the same is likely true for Deer Valley and Canyons. Assuming that each resort has the same percentage of out‐of‐state skiers as it has of total skiers, then PCMR would have about % of out‐of‐state skier days in Summit County.

Charles River Associates

Exhibit 1. Curriculum Vita of Gregory D. Adams Page 2

1989–1992 Research Assistant and Teaching Assistant (1992), University of

California-Berkeley, Department of Agricultural and Resource Economics,

Berkeley, CA

Research assistant for Professor Gordon Rausser. Primary areas

of research were GATT reforms, US agricultural policy, and the

application of non-cooperative game theory and bargaining theory for

environmental-policy analysis.

Teaching assistant to Professor David Zilberman for an upper-division

undergraduate course in environmental and natural resource economics.

1987–1988 Research Assistant, Department of Agricultural and Resource Economics,

University of Maine, Orono, ME

Research assistant for Professor James Leiby. Primary areas of research

were the statistical evaluation of the productivity of agricultural research

and technology adoption among Maine farmers.

1983–1985 Volunteer, Peace Corps, Philippines

Designed and implemented a municipal agro-forestry extension program.

Publications

Articles

“Comment on Hospital Mergers and Competitive Effects: Two Retrospective Analyses.” With

Monica Noether. International Journal of the Economics of Business, Vol. 18, 2011.

"Not Good Enough for Government Work: Geographic Market Definition and the FTC’s Case

Against Chicagoland Physician Associations." Journal of Competition Law and Economics,

forthcoming.

“Risk, Stigma, and Property Values: What are People Afraid Of?” With Robin Cantor. In J. Flynn, H.

Kunreuther, and P. Slovic (eds.), Risk Media and Stigma, EarthScan Publications, Ltd., 2001.

“An Economic Evaluation of BWI Custom Kitchens and Indirect Purchaser Classes in Horizontal

Price-Fixing Cases.” With G.C. Rausser. Competition, 6:1, Summer 1997.

“Modeling Multilateral Negotiations: An Application to California Water Policy.” With G.C. Rausser

and L.K. Simon. Journal of Economic Behavior and Organization, Vol. 30, 1996.

“The Three Way Water Agreement Process: A Consensual Approach to Water Policy.” Natural

Heritage Institute, San Francisco, CA, 1993.

“A Collective Choice Model for Tradable Water Rights.” With G.C. Rausser and L.K. Simon.

Working Paper, Department of Agricultural and Resource Economics, University of California at

Berkeley, 1992.

“The Returns To Research in Maine: The Case of a Small Northeastern Experiment Station.” With

J.D. Leiby. Northeastern Journal of Agricultural and Resource Economics, 20:1–14, 1991.

Charles River Associates

Exhibit 1. Curriculum Vita of Gregory D. Adams Page 3

“The Gains From Investment in Agricultural Research and Extension at the University of Maine.”

With J.D. Leiby. Maine Agricultural Experiment Station, Miscellaneous Report 341, August 1989.

“The Estimation of the Returns to Agricultural Research and Extension in Maine: 1951–1985.” With

J.D. Leiby, Maine Agricultural Experiment Station, Technical Bulletin 135, June 1989.

Presented papers

“Switching, Adding, or Shifting: Network Effects, Network Compatibility and Lock-In.” With J.R.

Kearl. Invited paper presented at the annual meeting of the Society for Computational Economics,

2002.

“Risk, Stigma, and Property Value: What Are People Afraid Of?” With Robin Cantor. Presented at

the Annenberg Conference on Risk, Media and Stigma, University of Pennsylvania, March 23–24,

1997.

“The Value Added of Multilateral Bargaining.” With C. Bazelon. Annual Meetings of the American

Agricultural Economics Association, Baltimore, Maryland, August 8–10, 1992.

“A Collective Choice Model for Tradable Water Rights.” With G.C. Rausser and L.K. Simon.

Resources for the Future Conference on Resolving Water Quantity/Quality Disputes, Washington,

DC, May 2–3, 1992.


J.D. Leiby. Annual Meetings of the Northeast Agricultural and Resource Economics Association,

Truro, Nova Scotia, June 19, 1990.

Published abstracts


J.D. Leiby. Northeastern Journal of Agricultural and Resource Economics, 19:150, 1990.

Fellowships

Regents Fellowship, University of California at Berkeley, 1989–1991.

Naumann Fellowship, University of Maine, 1987–1989.

Awards

Outstanding Graduate Student Instructor, Department of Agricultural and Resource Economics,

University of California at Berkeley, Fall 1993

Exhibit 2. Prior Testimony of Gregory D. Adams Page 1

Trial and Deposition Testimony of Gregory D. Adams: 1999-2013 Advanced Micro Devices v. National Semiconductor

United States District Court, Northern District of California Deposition September 1999

Mark and Sheila Harris v. Richard Kohler and Kevan C. Eyre

Third Judicial District Court, Salt Lake County, Utah Deposition 2000

United States of America v. Rodney Cantwell

United States District Court for the District of Utah Trial Testimony August 2000

Weather Tec. v. Dow Chemical

United States District Court Eastern District of California Deposition December 2000 Trial Testimony April 2001

Monsanto v. Trantham

Deposition June 2001 Salaeh v. Consolidated Industries

Deposition June 2001 Yoshida v. Simplot

Deposition and Trial Testimony 2001 – 2002 Dolan v. World Oil Company

Deposition April 2002 Pinal Group, et al., v. Newmont Mining Corp., et al.

Deposition January 2003 Class v. Stericycle Inc. United States District Court District of Utah, Central Division Deposition July 2005 Owner-Operator Independent Driver Association v. Landstar Inway, Inc.

Deposition 2006 CITTA, Inc v. Skywest

Deposition 2007 IGT v. Alliance Gaming Corp., Bally Gaming, International, Inc., Bally Gaming, Inc. Deposition 2007

Exhibit 2. Prior Testimony of Gregory D. Adams Page 2

Testimony before the Utah State Water Board Deposition December 2008 Cedar Mountain Environmental, Inc. v. EnergySolutions, Inc. Deposition Narayan et. al., v. EGL, Inc.

Deposition September 2011 Alpacas of America v. Excel Feeds

Deposition February 2012

Jensen v Dow Chemical, Shell Chemical, et. Al. Deposition June 2012 Trial Testimony December 2013

Exhibit 3Materials Considered

Legal and PleadingsAmended Stipulated Protective Order, 10/25/2013Answer to Second Amended Complaint, 10/28/2013Complaint, 3/9/2012Corrected Memorandum, 5/15/2012Defendants' Memorandum ISO Motion for Partial Summary Judgement, 4/21/2014Defendants' Motion for Partial Summary Judgement, 3/14/2014Defendants' Motion to Dismiss, 4/12/2012Defendants' Reply Memorandum ISO Motion for Partial Summary Judgement, 4/21/2014, and ExhibitsDefendants' Response to 2nd set of requests for Admission and 3rd set of Interrogatories, 1/17/2014Defendants' Responses to Plaintiff's 1st set of Requests, 7/9/2013Defendants' Responses to Plaintiffs' 2nd set of Interrogatories and Requests, 8/26/2013Defendants' Supplemental Response to Interrogatory No. 5, 11/19/2013Defendants' Supplemental Responses to Plaintiffs' Request for Admission No. 12 and Interrogatory No. 4, 8/23/2013Memorandum Decision and Order, 11/20/2012Memorandum of Law ISO Defendants' Motion to Dismiss, 4/12/2012Motion for Leave to File Amended Complaint, 5/21/2012Plain iff's Memorandum IOT Mo ion for Partial Summary Judgement, 4/2/2014Plain iff's Memorandum IOT Mo ion to Dismiss, 5/15/2012Plain iff's Motion for Partial Summary Judgement, 5/15/2012Plain iff's Objections and Responses to 1st set of Requests, 8/15/2013Plain iff's Objections and Responses to 2nd set of Requests, 1/3/2014Plain iff's Objections and Responses to 3rd set of Requests, 1/20/2014Reply to Counterclaims of UPCM and Talisker, 11/18/2013Reply to Paragraphs 66-91 of Counterclaims by UPCM and Talisker, 3/6/2014Second Amended Complaint, 9/25/2013

Depositions and DeclarationsDeclaration of Jenni Smith, 5/14/2012Second Declaration of Jenni Smith, 8/14/2012Declaration of Jenni Smith, 2/6/2014Declaration of Jenni Smith, 4/1/2014Declaration of Mark Harrington, 2/7/2014, and ExhibitsDeposition of Anthony Iannazzo, 2/12/2014, and ExhibitsDeposition of David Smith, 11/22/2013, and ExhibitsDeposition of Flera, LLC, 1/8/2014 (30(b)(6)), and ExhibitsDeposition of Herwig Demschar, 9/13/2013, and ExhibitsDeposition of Ian Cumming, 12/17/2013, and ExhibitsDeposition of Jack Bistricer, 11/20/2013, and ExhibitsDeposition of Jenni Smith, 9/11/2013, and ExhibitsDeposition of Jenni Smith, Vol.2, 1/16/2014, and ExhibitsDeposition of Jennifer Botter, 9/12/2013, and ExhibitsDeposition of Jennifer Botter, Vol.2, 1/16/2014. and ExhibitsDeposition of John Cumming, 1/7/2014, and ExhibitsDeposition of Mandy Scully, 11/21/2013, and ExhibitsDeposition of Maria McGuiness, 10/7/2013, and ExhibitsDeposition of Matt Ireland, 12/17/2013, and ExhibitsDeposition of Michael Goar, 12/12/2013, and ExhibitsDeposition of Rebecca Chris ianson, 11/18/2013, and ExhibitsDeposition of Rob Katz, 1/16/2014, and ExhibitsDeposition of Tim Brennwald, 9/12/2013, and Exhibits

SurveysAppendix 1- Survey InstrumentEconomic Analysis of US Ski AreasKottke National End of Season SurveyNSAA Kottke SurveyPark City Customer Satisfaction SurveysPark City Mountain Resort Winter Research 2011/12PCMR 2011/12 Season Final ReportPCMR 2012/13 Season Final ReportPCMR Winter Research 2011/2012RRC Associates Resort Guest Sa isfactionSki Utah 2010/11 Research Final Report PresentationSki Utah Expenditure Model Calcula ionsSki Utah Open Ended Comments1314 Park City Mountain Resort Report 18

PCMR Financial Documents3 Kings Lift IRRAdventure Zones IRRAll at one time Pond and Equipment IRRAxcess Gates IRR

1

Axcess Gates IRR 4.26.12 Update for Y1Cash ContributionsCDC Restoration and Construction Budget Quotation, 12/8/2010CobraDog IRRCopy of PCMR-GORGO 3-29-2014 v2Copy of Salestax 11-12 SeasonFlying Eagle Zip Ride IRRFY 11 - 12 Capex per FASG&A Financial Analysis WorksheetGI Trial Property Tax 12-13GI Trial Property tax 13-14GPCC Property Tax InformationMid-Mnt BBQ IRRNSAA 1314 End of Season Survey Park City UTOn Mountain Beginner Zone with Conveyer Cover IRRPCMR 2012 Personal Property Statements and supportPCMR 5 Year Capital Expenditures Forecast, FY 2011-2015PCMR CNSD Dep Bud HistPCMR CNSD HISTPCMR Fixed AssetsPCMR FY14 WIPSPCMR General Ledger for 2012PCMR General Ledger Summary for 2012PCMR P&L 5 years in DollarsPCMR PL Dep HistPCMR PL Forecast 2014.2014PCMR PL History DetailPCMR PL History SummaryPCMR_BALSHT.xlsPCMR-GORGOZA 03-30-2013PCMR-WW Forecast 2016-2018Personal Property Tax Statements 13Phase 1 SM Pond IRRPhase 2 Pond Only IRRPowdr Corporation and Subsidiaries Consolidated Financial Statements, May 31, 2008 and 2007Powdr Corporation and Subsidiaries Consolidated Financial Statements, May 31, 2009 and 2008Powdr Corporation and Subsidiaries Consolidated Financial Statements, May 31, 2010 and 2009Powdr Corporation and Subsidiaries Consolidated Financial Statements, May 31, 2011 and 2010Powdr Corporation and Subsidiaries Consolidated Financial Statements, May 31, 2012 and 2011Prop & Personal Prop Tax 11 12Sales and Use Tax Documents, 2007-2012Salestax 12-13 SeasonSalestax 13-14 SeasonSki-SB Learner Zone no Covers IRRSki-SB Learner Zone wi h Covers IRRSnowcat Purchaes on Rotation ScheduleSnowmaking Recurring CapitalSummer F&B IRRTrial Balance 12-13Trial Balance 13-14

PCMR Other Documents08-09 Donation Log09-10 Donation Log10-11 Donation Log11-12 Donation Log12-13 Donation Log 12-13 Donation Log Marketing13-14 Donation Log 13-14 Donation Log Marketing2010 - 2011 In-Kind Dona ions2011 - 2012 Headcount and Total Labor2011 - 2012 In-Kind Dona ions2012 2013 Season Vouchers Issued List2013 2014 Season Vouchers Issued ListCapex 2013 Capex 2014Charitable Contributions 12-13Charitable Contributions 13-14Food Service Hourly Performance SummaryLoad Out.docLoad Out.xlsxMarket Share HistoricalPCMR Base Area MapPCMR Headcount and Labor by pay periodPCMR Load Out.xlsxPCMR Organizational Template 04 2014PCMR Ticket MixResort Base Area ShopsSkier Days Data

2

Winter Tracking Sheet 07.08Winter Tracking Sheet 08.09Winter Tracking Sheet 09.10Winter Tracking Sheet 10.11Winter Tracking Sheet 11.12Winter Tracking Sheet 13.14

Third Party Documents2007 Economic Report to the Governor2012 Economic Report to the GovernorIsaacson, Alan, “Economic Impact of the Utah Alpine Ski Industry,” July 25, 2006Economic Impact Analysis of Proposed Ski Interconnect, 2010, RCLCOFjeldsted, Boyd, “Regional Input-Output Multipliers: Calculation, Meaning, Use and Misuse,” Bureau of Economic and Business Research, Vol. 50, No. 10, Oct. 1990Leaver, Jennifer, “The State of Utah’s Tourism, Travel, and Recreation Industry,” Bureau of Economic and Business Research, Vol. 73, No. 4, 2014Utah State Tax Commission Annual Report, 2012-2013 Fiscal Year

3

Table 1Total Revenues at PCMR FY 2013

Confidential - Attorneys' Eyes Only Tier 2 1

Table 2PCMR Winter and Summer Employees


Table 3PCMR Winter and Summer Payroll


Table 4

SeasonOut-of-State Direct

ExpendituresAdditional Earnings

Jobs Supported

2005/20061 $745,000,000 $417,000,000 19,323

2005/20062 $563,000,000 $281,000,000 12,7002006/2007 - - -

2007/20083 $858,000,000 $441,000,000 18,0002008/2009 - - -2009/2010 - - -

2010/20114 $990,000,000 - -2011/2012 - - -

Sources:[1] Economic Impact of the Utah Alpine Ski Industry, 2006, BEBR, Table 3[2] 2007 Economic Report to the Governor, p. 215[3] Economic Impact Analysis of Proposed Ski Interconnect, 2010, RCLCO, p. 2[4] Ski Utah 2010-2011 Final Research Presentation, p. 35[5] The State of Utah's Tourism, Travel, and Recreation Industry, 2014, BEBR, p. 7

Notes:[1] Additional earnings in 2012/2013 are estimated based on the percent of Out-of-State

Direct Expenditures in other years (52%). Applying this percentage to the reported $1.1 billion in Direct Expenditures results in approximately $572 million estimated Additional Earnings.

2012/20135 $1,100,000,000 18,419$572,000,000 (estimated)

Utah Ski/SnowBoarding Tourism Impact

1

EXHIBIT B

19320090



Plaintiffs,

vs.


Defendants.

DECLARATION OF JENNI SMITH

Case No. 120500157

Judge Ryan Harris



vs.



19320090

2

I, Jenni Smith, declare as follows:

1. I am over the age of 18 years, a resident of the State of Utah, and am fully

competent in all respects to testify regarding the matters set forth herein.

2. I am the President and General Manager of Plaintiff Greater Park City Company

(“GPCC”) d/b/a Park City Mountain Resort (“PCMR”). I have held this position since July

2010. I have been employed by GPCC in various capacities since 1980. I have personal

knowledge of the facts set forth in this Declaration, except for those facts stated upon

information and belief. As to those facts, I am reliably informed and believe them to be true

according to my best information and belief.

3. Currently, GPCC owns and operates 16 lifts on PCMR.

4. Should GPCC be required to vacate the Leased Premises, GPCC will remove the

following equipment:

a. All removable snowmaking equipment, including the compressors, pumps, and

fixed snow guns (collectively, the “Snowmaking Equipment”);

b. All equipment and furniture housed in the Summit House Restaurant, the Mid

Mountain Restaurant, and the Snow Hut Restaurant (collectively, the “Restaurant

Equipment”);

c. All equipment, parts, tools, and vehicles stored in the King Shop Maintenance

Building (collectively, the “Mechanical Equipment”);

d. All equipment located in the Summit Patrol and Demo Center buildings and the

Yurt (collectively, the “Patrol Equipment”);

e. The motors, gearboxes, drives, chairs, cables, assemblies, and terminals of the

Jupiter Lift, the Thaynes Lift, and the Motherlode Lift;

f. The motors, gearboxes, drives, chairs, cables, towers, assemblies, and terminals of

19320090

3

the Town Lift, the Crescent Lift, the King Con Lift, the Silverlode Lift, the

Bonanza Lift, the McConkey’s Lift, the Pioneer Lift, the Eaglet Lift, and the

Silver Star Lift;

5. Should GPCC be required to vacate the Leased Premises, GPCC intends to (1)

shorten, realign, or relocate the Payday Lift, the Three Kings Lift, and the Eagle Lift, (2)

reconfigure its snowmaking pipe and guns, (3) relocate the top station of the zip line and two

magic carpets, and (4) reconfigure the alpine coaster. Any portions of the modified ski lifts that

are currently located on the Leased Premises and not necessary to the resulting modified lifts will

be removed.

6. GPCC estimates that, using a crew of approximately 40 people working 7 days a

week, it will take a total of ten weeks to remove the Snowmaking Equipment, the Restaurant

Equipment, the Mechanical Equipment, and the Patrol Equipment and that the removal will cost

approximately $427,570.

7. GPCC estimates that it will take approximately thirty-three weeks – working 24

hours a day, 7 days a week with nearly full-time use of one or more helicopters – to remove the

(1) motors, gearboxes, drives, chairs, cables, assemblies, and terminals of the Jupiter Lift, the

Thaynes Lift, and the Motherlode Lift and (2) the motors, gearboxes, drives, chairs, cables,

towers, assemblies, and terminals of the Town Lift, the Crescent Lift, the King Con Lift, the

Silverlode Lift, the Bonanza Lift, the McConkey’s Lift, the Pioneer Lift, the Eaglet Lift, and the

Silver Star Lift. GPCC estimates that the cost of the foregoing would be approximately

$3,570,000.

8. Thus, assuming no or nearly no snow and dry roads, GPCC believes it can remove

all of the equipment identified in paragraph 4 in a total of thirty-three weeks subject to

manpower availability.

19320090

4

9. With respect to the necessary realignments and modifications, GPCC estimates

that it could shorten the Eagle Lift in ten weeks at a cost of $325,000, shorten Three Kings Lift

in eight weeks at a cost of $275,000, and realign the Payday Lift in fifteen weeks, at a cost of

$1,100,000. GPCC has not determined the exact scope of the remaining modifications, but

estimates that these modifications would take roughly 15 weeks and cost approximately

$690,000.

10. Some of the foregoing work can only be done during the construction season,

which runs from approximately June 1 through October 31. Any work done outside the

construction season will take substantially more time and cost significantly more. For example,

if it starts to snow, GPCC estimates that it will take at least an additional seven weeks (for a total

of 40 weeks) to remove all the equipment identified above, in paragraph 4.

11. In addition, GPCC estimates that it will cost approximately $17,000 per month to

store the equipment removed from the Leased Premises.

12. All of the time and cost estimates herein are based upon GPCC’s experience with

construction and operating PCMR, but ultimate costs in time and money can vary substantially

based upon weather, snowmelt, labor availability, and other variables.

13. Should GPCC subsequently be permitted to reoccupy the Leased Premises, it

estimates that it would take at least two construction seasons to reinstall all the previously

removed equipment and undo any lift modifications. It is difficult to estimate, but GPCC

believes that this would cost approximately $7,292,270.

14. During any period in which GPCC was not permitted to occupy the Leased

Premises and was not involved in the construction necessary to remove, modify, or reinstall its

equipment, GPCC intends to continue to operate in the summer season and to operate on a

substantially reduced scale during the winter. PCMR’s summer operations include an alpine

EXHIBIT C



Plaintiffs,

vs.


Defendants.

DECLARATION OF

GIL A. MILLER

Case No. 120500157

Judge Ryan Harris



vs.



I, Gil A. Miller, declare as follows:

1. I am over the age of 18 years, a resident of the State of Utah, and am fully

competent in all respects to testify regarding the matters set forth herein.

2. I am the Senior Managing Member of Rocky Mountain Advisory, LLC (“RMA”)

in Salt Lake City, Utah and have been since I founded the firm in March 2010. I hold a Bachelor

2

of Science in Accounting and a Master of Accounting from Brigham Young University. I am a

Certified Public Accountant, a Certified Fraud Examiner, and a Certified Insolvency and

Restructuring Advisor. I am also Certified in Distressed Business Valuations.

3. I am a member of the American Institute of Certified Public Accountants, Utah

Association of Certified Public Accountants, Association of Certified Fraud Examiners, and the

Association for Insolvency and Restructuring Advisors.

4. Prior to founding RMA, I was the Managing Director in the Salt Lake City, Utah

office of the international public accounting firm PricewaterhouseCoopers, LLP. I have 30

years’ experience in public accounting where I have been primarily involved with investigative

accounting work, bankruptcy case work, troubled company workouts, breach of contract,

contract claims, and fraud examinations. I testify regularly in state and federal court. I also

regularly serve as a bankruptcy trustee, receiver, and arbitrator. I have testified numerous times

regarding economic damages and lost profits. I am a member of the Commercial Panel of the

American Arbitration Association and a Fellow in the American College of Bankruptcy.

5. I have reviewed certain financial information of Plaintiff Greater Park City

Company (“GPCC”) which owns and operates Park City Mountain Resort (“PCMR”) and other

documents, pleadings, and discovery in this case.

6. I understand that since the early 1970’s GPCC has operated PCMR on over 3,000

acres of property related to two leases (the “Leased Premises”) and other lands. GPCC has built

and maintained on the Leased Premises ski lifts, ski runs, day lodges, restaurants and other

winter and summer recreational and resort facilities associated with the operations of a

recreational resort.1 The financial statements I obtained indicate that as of today, in excess of

$110 million of assets have been invested in PCMR. According to PCMR management

(“Management”), without the right to occupy the Leased Premises, GPCC could not operate

PCMR as a destination ski resort.

7. During the winter months, PCMR operates a ski and snowboard destination resort

based in Park City, Utah. During the summer months, PCMR offers a variety of activities

1 Declaration of Jenni Smith, dated May 14, 2012 at ¶¶6-7.

3

including an alpine slide, alpine coaster, zip lines, mountain biking and hiking trails, scenic lift

rides, and a variety of other summer activities.2

8. Based on the materials I have reviewed, I understand that GPCC may be ordered

to vacate the Leased Premises. In this case, I understand GPCC would appeal the decision. I

have been asked to assist Management in quantifying the amount of lost profits for economic

damages that could be sustained by GPCC if it were required to vacate the Leased Premises, but

then prevail on appeal and reoccupy the Leased Premises. Actual profits lost will be more

readily ascertainable when and if PCMR is required to vacate but later permitted to reinstall.

9. In addition, I understand that GPCC would also suffer losses due to the costs that

would be incurred to vacate and reoccupy the Leased Premises in the event of a wrongful

eviction. Such costs would include estimated costs to remove and reinstall ski lift equipment,

snowmaking equipment, and lodge and restaurant equipment that exist on the Leased Premises. I

understand that those costs are being estimated by Management and therefore are not included in

this analysis. I discussed the analysis of costs to vacate and re-occupy the Leased Premises with

Management to ensure that certain costs are not duplicated in my analysis.

PCMR Limited Operations

10. I understand that if PCMR is required to vacate the Leases Premises, the GPCC

Management will remove snowmaking equipment, restaurant equipment, shop equipment, and

lift equipment from the Leased Premises (“Load-out”). In addition, PCMR would have to

realign and shorten certain lifts to continue to operate in a limited capacity and to completely

vacate the Leased Premises (“Realignment”).

11. We understand that PCMR’s current lifts would be removed, realigned, shortened,

or relocated as follows:

2 http://www.parkcitymountain.com/site/summer/activities

4

a. Town Lift - Removed

b. Payday Lift - Realigned

c. Crescent Lift - Removed

d. First Time Lift – No Change

e. 3 Kings Lift - Shortened

f. Eagle Lift – Shortened

g. Eaglet Lift - Removed

h. Silver Star Lift - Removed

i. King Con Lift - Removed

j. Bonanza Lift - Removed

k. Silverlode Lift - Removed

l. Motherlode Lift - Removed

m. Thaynes Lift - Removed

n. McConkey’s Lift - Removed

o. Pioneer Lift - Removed

p. Jupiter Lift - Removed

12. Vacating the Leased Premises would require PCMR to remove all but four lifts

that it has historically operated. PCMR would continue to operate the Payday, First Time, 3

Kings, and Eagle lifts. I understand that PCMR would modify three of these four remaining lifts.

All other lifts would be removed. Therefore, I understand that PCMR would be required to

remove or modify 15 of the 16 lifts it has historically operated.

13. I understand that after the Load-out and before the reinstallation, assuming PCMR

prevails on appeal, PCMR would continue to have limited summer and winter operations.

Summer operations would consist of an alpine slide, an alpine coaster, a zip line, and mountain

biking and hiking. Winter operations would include a terrain park, ski school, and limited

skiing. I refer to the operations described in this paragraph as “Limited Operations.”

14. I was asked to perform an analysis of lost profits GPCC could sustain assuming

that PCMR is required to vacate the Leased Premises. I have been asked to assume that GPCC is

ordered to vacate PCMR on July 1, 2014, and that the appeal process could take two years

(“Eviction Period”). I discussed with Management when, if evicted, they would be able to

complete the Load-out and Realignment and generate revenue under Limited Operations.

Management of PCMR indicated that during the Load-out and Realignment, there would be few,

if any, revenue generating operations that could be safely and effectively performed as PCMR

would essentially be a construction zone. Management of PCMR expects that based on a July 1,

2014, eviction order, it would take an estimated 40 weeks to perform the Load-out and

5

Realignment. This includes construction during winter months. Based on these assumptions,

PCMR does not believe it can begin revenue-generating Limited Operations until May of 2015.

15. We have been asked to assume that PCMR prevails on appeal and is permitted to

reoccupy the Leased Premises in June of 2016. June is generally considered the beginning of the

construction season for PCMR depending on how quickly snow melts. Management again

estimated the amount of time it would take to reoccupy the Leased Premises by reinstalling

equipment required to operate. To reoccupy the Leased Premises, PCMR would again operate as

a construction zone and accordingly generate little, if any, revenue during a reinstallation of

equipment. Management estimates that in the summer construction season beginning June of

2016, it will be able to realign or reinstall certain lifts to have a total of eight lifts operational by

December 2016 and all lifts operational within a total of 18 months, or December 2017

(“Reinstallation Period”).

Lost Profits

16. I analyzed the profits that GPCC could lose by operating PCMR based on Limited

Operations until it is able to reoccupy the Leased Premises. Our analysis is an estimate of lost

profits based on our consideration of historic operations and certain assumptions. Actual profits

lost will be more readily ascertainable when and if PCMR is required to vacate but later

permitted to reinstall. Therefore, I will update my analysis over the course of time.

17. My analysis followed the guidelines provided by the American Institute of

Certified Public Accountants (“AICPA”) to estimate lost profits. These guidelines include,

(i.) Estimating revenue but-for an eviction order,

(ii.) Estimating the revenue PCMR will generate based on Limited Operations. The

difference between the estimated but-for, uninterrupted revenue and revenue

during Limited Operations is lost revenue,

(iii.) Subtracting from lost revenue costs that PCMR avoided, in order to arrive at lost

profits, and

(iv.) Discounting future lost profits to present value.

18. Management estimated that it will be able to operate at approximately fifteen

6

percent capacity during the Eviction Period. This analysis is based on lift capacity, numbers of

lifts, amount of terrain available for continued use, and an estimate of ticket sales in units and

dollars during Limited Operations.

19. Revenue “but-for” an eviction is based on PCMR’s budgeted fiscal year 2015

expected operations. I projected uninterrupted revenue thereafter based on third party industry

growth estimates. I obtained industry growth estimates from a publication titled “IBISWorld

Industry Report 71392: Ski & Snowboard Resorts in the US,” to determine the projected changes

in revenue for ski and snowboarding resorts in the US over the Eviction Period. This report is

dated December 2013.

20. As discussed, Management estimated the interrupted lift revenue PCMR would

generate over the Eviction Period as fifteen percent of the uninterrupted revenue discussed

above. Apart from its mountain operations, Management estimated retail revenue at PCMR

would decline by 50 percent. After the Load-out and Realignment but during the Limited

Operations, Management estimated summer operations would continue, albeit with some

interruption. The difference between uninterrupted revenue and revenue expected during

Limited Operations equals lost revenue.

21. Next, I estimated costs that PCMR would save or avoid by not operating at full

capacity. Subtracting avoided costs from lost revenue equals lost profits. Avoided costs are

costs that PCMR would have incurred to generate the lost revenue. Since the revenue is not

generated, the costs are avoided. To estimate lost profits, I estimated the costs that PCMR is

expected to avoid on the incremental lost revenue.

22. To estimate avoided costs, I analyzed PCMR’s revenue and cost structure from

the previous five years of operations.3 I analyzed the nature of the costs incurred by category

and discussed PCMR’s cost structure with Management to determine whether the costs appear

variable, moving with changes in sales, or fixed, not fluctuating with sales. I performed some

3 The most recent fiscal year included actual operations through the fiscal period ended April 26, 2014, and budgeted operations through May 31, 2014.

Greater Park City Company, et al. vs. Talisker Land Holdings, LLC et al. Schedule 1Declaration of Gil A. MillerAnalysis of PCMR Lost Profits if Wrongfully Evicted as of June 1, 2014Fiscal Years 2015 through 2019

PRESENT VALUE OF FUTURE LOST PROFITS

Confidential – Attorneys’ Eyes Only Tier 2


FUTURE LOST PROFITS ANALYSIS


Greater Park City Company, et al. vs. Talisker Land Holdings, LLC et al. Schedule 2.1Declaration of Gil A. Miller Page 1 of 2Analysis of PCMR Lost Profits if Wrongfully Evicted as of June 1, 2014Fiscal Years 2015 through 2019

PROJECTED INTERRUPTED REVENUE BY FISCAL YEAR


PROJECTED INTERRUPTED REVENUE BY FISCAL YEAR Page 2 of 2


Greater Park City Company, et al. vs. Talisker Land Holdings, LLC et al. Schedule 3Declaration of Gil A. MillerAnalysis of PCMR Lost Profits if Wrongfully Evicted as of June 1, 2014Fiscal Years Ended 2010 through Aprile 26, 2014

HISTORIC BALANCE SHEETS


Greater Park City Company, et al. vs. Talisker Land Holdings, LLC et al. Schedule 4Declaration of Gil A. MillerAnalysis of PCMR Lost Profits if Wrongfully Evicted as of June 1, 2014Fiscal Years Ended 2010 through Forecasted Fiscal Year 2014

HISTORIC INCOME STATEMENTS - SUMMARIZED


Greater Park City Company, et al. vs. Talisker Land Holdings, LLC et al. Schedule 4.1Declaration of Gil A MillerAnalysis of PCMR Lost Profits if Wrongfully Evicted as of June 1, 2014Fiscal Years Ended 2010 through 2014

HISTORIC INCOME STATEMENTS - DETAILED


Declaration of Gil A. MillerAnalysis of PCMR Lost Profits if Wrongfully Evicted as of June 1, 2014Fiscal Year Ending 2014

TRAILING TWELVE MONTH REVENUE BY CATEGORY


Greater Park City Company, et al. vs. Talisker Land Holdings, LLC et al. Schedule 4.3Declaration of Gil A MillerAnalysis of PCMR Lost Profits if Wrongfully Evicted as of June 1, 2014Fiscal Years Ended 2010 through 2014

COMMON SIZE HISTORIC OPERATING RESULTS AND EXPENSE CATEGORY ANALYSIS


Greater Park City Company, et al. vs. Talisker Land Holdings, LLC et al. Schedule 5Declaration of Gil A. Miller Page 1 of 2

Analysis of PCMR Lost Profits if Wrongfully Evicted as of June 1, 2014Fiscal Years Ended 2015 through 2019

LOST PROFITS ANALYSIS - AVOIDED OPERATING COSTS


LOST PROFITS ANALYSIS - AVOIDED OPERATING COSTS Page 2 of 2


Greater Park City Company, et al. vs. Talisker Land Holdings, LLC et al. Schedule 6Declaration of Gil A MillerAnalysis of PCMR Lost Profits if Wrongfully Evicted as of June 1, 2014Fiscal Years 2015 through 2019

CAPITAL EXPENDITURE ANALYSIS



ESTIMATE OF ONGOING PCMR OPERATIONS IF ORDERED TO VACATE

1. Operations based on number of lifts

Number of ski lifts - Limited operations 4Number of ski lifts - Current operations 16Percentage of ski lifts operating 25.0%

2. Vertical Transport Feet per Hour (VTFH)

VTFH - Limited operations (Four lifts) 3,566,063 VTFH - Current operations (Sixteen lifts) 32,643,548 Percentage of VTFH 10.9%

3. Skiable Acres

Skiable acres - Limited operations 202 Skiable acres - Current operations 3,300 Percentage of skiable acres 6.1%

4. Estimated Ticket Sales (Units)

5. Estimated Ticket Sales (Dollars)

Range of Expected Winter Operations 6% to 25%

Selected Percent of Limited Operations to Current Operrations 15.0%


EXHIBIT D

19421949

1

Alan L. Sullivan (3152) Amber M. Mettler (11460) Snell & Wilmer L.L.P. 15 West South Temple, Suite 1200 Gateway Tower West Salt Lake City, Utah 84101-1004 Telephone: (801) 257-1900 [email protected] [email protected] Michael D. Zimmerman (3604) Troy L. Booher (9419) Zimmerman Jones Booher LLC Kearns Building, Suite 721 136 South Main Street Salt Lake City, Utah 84101 Telephone: (801) 924-0200 [email protected] [email protected] Attorneys for Plaintiffs/Counterclaim Defendants Greater Park City Company and Greater Properties, Inc.

James W. Quinn (pro hac vice) Bruce S. Meyer (pro hac vice) Weil Gotshal & Manges, LLP 767 Fifth Avenue New York, New York 10153 Telephone: (212) 310-8385 [email protected] [email protected]



Plaintiffs,

vs.

UNITED PARK CITY MINES COMPANY, a Delaware corporation, and TALISKER LAND HOLDINGS, LLC, a Delaware limited liability company, TALISKER LAND RESOLUTION LLC, a Delaware limited liability company, VR CPC HOLDINGS, INC., a Delaware Corporation, FLERA, LLC, a Delaware limited liability company, TALISKER CANYONS LEASECO LLC, a Delaware limited liability company, TALISKER CANYONS FINANCE CO LLC, a Delaware limited liability company, and

[PROPOSED] ORDER GRANTING PLAINTIFFS’ MOTION TO POSTPONE

OR STAY THE EFFECT AND ENFORCEMENT OF ANY RULING

THAT MAY BE RENDERED ON DEFENDANTS’ UNLAWFUL DETAINER

COUNTERCLAIM

Case No. 120500157

Judge Ryan Harris

mailto:[email protected]






19421949

2

JOHN DOE CORPORATIONS 1 THROUGH 10,

Defendants.


Counterclaim Plaintiffs, vs. GREATER PARK CITY COMPANY, a Utah corporation, and GREATER PROPERTIES, INC., a Delaware corporation,


The Court has considered the Motion to Postpone or Stay the Effect and Enforcement of

Any Ruling that May be Rendered on Defendants’ Unlawful Detainer Counterclaim filed by

Plaintiffs/Counterclaim Defendants Greater Park City Company (“GPCC”) and Greater

Properties, Inc. (“GPI”) (collectively, “Plaintiffs”) and the response submitted by

Defendants/Counterclaim Plaintiffs United Park City Mines Company and Talisker Land

Holdings, LLC (collectively, “Talisker”). After carefully reviewing and considering the

parties’ written submissions and any oral argument, the Court concludes that because of the

magnitude of the impact on Plaintiffs, the inevitable negative collateral consequences

associated with an eviction, and the fact that Talisker can and will be fully compensated for any

delay, Plaintiffs should not be ordered to vacate the Leased Premises until all claims related to

Plaintiffs’ rights to remain on the Leased Premises are fully and completely resolved, including

resolution of any and all appeals.

Order

Based on the foregoing and for good cause appearing, the Court hereby ORDERS as

follows:

19421949

3

1. An order of restitution will not be entered or will be stayed until fourteen (14)

days from the date on which Talisker’s counterclaim for unlawful detainer is

fully and finally adjudicated and subject to appeal through certification or an

appeal as of right;

2. Execution of any final, appealable judgment, including any order of restitution,

will be stayed for at least fourteen (14) days after entry to allow Plaintiffs to

obtain and post a supersedeas bond in the appropriate amount;

3. Upon approval by the Court of the supersedeas bond filed by Plaintiffs, all

proceedings will be stayed pending appeal. DATED this _____day of _____________, 2014.

BY THE COURT:

____________________________

Honorable Ryan M. Harris Third District Judge

19421949

4

CERTIFICATE OF SERVICE

I hereby certify that on the 12th day of June, 2014, I caused the foregoing [PROPOSED]

ORDER GRANTING PLAINTIFFS’ MOTION TO POSTPONE OR STAY THE EFFECT

AND ENFORCEMENT OF ANY RULING THAT MAY BE RENDERED ON

DEFENDANTS’ UNLAWFUL DETAINER COUNTERCLAIM to be served via the Court’s

electronic filing system and/or U.S. mail upon the following:

John R. Lund Kara L. Pettit SNOW, CHRISTENSEN & MARTINEAU 10 Exchange Place, 11th Floor Post Office Box 4500 Salt Lake City, Utah 84145-5000 (Via electronic filing)

Howard M. Shapiro (pro hac vice pending) Jonathan E. Paikin (pro hac vice pending)

Christopher E. Babbit (pro hac vice pending) WILMER CUTLER PICKERING HALE and DORR LLP 1875 Pennsylvania Avenue, NW Washington, D.C. 20006 (Via U.S. mail) Attorneys for Defendants United Park City Mines Company; Talisker Land Holdings, LLC; Talisker Land Resolution LLC; and Talisker Canyons Leaseco LLC

Jonathan A. Dibble RAY QUINNEY & NEBEKER P.C. 36 South State Street, Suite 1400 Salt Lake City, UT 84111 (Via electronic filing)

19421949

5

Robert C. Blume (pro hac vice) Ryan T. Bergsieker (pro hac vice) GIBSON, DUNN & CRUTCHER LLP 1801 California Street Denver, CO 80202-2642 (Via U.S. mail) Attorneys for Defendant VR CPC Holdings, Inc. Mark James Hatch, James & Dodge, P.C. 10 West Broadway, Suite 400 Salt Lake City, Utah 84101 (Via electronic filing) Attorneys for Talisker Canyons Finance Co LLC and Flera, LLC Michael Gill Daniel Storino Mayer Brown LLP 71 South Wacker Drive Chicago, Illinois 60606 (Via U.S. mail) Of Counsel for Talisker Canyons Finance Co LLC and Flera, LLC /s/ Patricia Haslam

EXHIBIT E

Bowshier v. Bowshier, Slip Copy (2013)

2013 WL 5314565, 2013 -Ohio- 4073

© 2014 Thomson Reuters. No claim to original U.S. Government Works. 1

2013 WL 5314565

CHECK OHIO SUPREME COURT RULES FORREPORTING OF OPINIONS AND WEIGHT OF LEGALAUTHORITY.

Court of Appeals of Ohio,Second District, Clark County.

Robert L. BOWSHIER, Plaintiff–Appelleev.

Teddy BOWSHIER, Defendant–Appellant.

No. 2013–CA–33. | Decided Sept. 20, 2013.

SynopsisBackground: Landlord filed forcible entry and detaineraction. The Municipal Court, Clark County, granted writ ofrestitution of property. Tenant appealed, and the Court ofAppeals, 2013 WL 425813, dismissed and remanded. Onremand, the Municipal Court rendered judgment orderingrestitution, and granted motion seeking release of appealbond. Tenant appealed.

Holdings: The Court of Appeals, Fain, P.J., held that:

[1] municipal court had no subject-matter jurisdiction overtenant's foreclosure action;

[2] landlord's title to property under a recorded deed wassufficient to support his claim against tenant for restitution ofthe premises;

[3] landlord's presence at trial was not necessary and hisfailure to appear did not deprive tenant of due process;

[4] magistrate's decision contained findings of fact andconclusions of law sufficient to facilitate the trial court'sruling;

[5] trial court's judgment of restitution was supported bysufficient evidence; and

[6] any error in the trial court's order to release the funds fromclerk of the municipal court was harmless.

Affirmed.

West Headnotes (6)

[1] CourtsForeclosure or Enforcement of Liens or

Mortgages

CourtsEffect of Transfer and Proceedings Had

Thereafter

Clark County Municipal Court had no subject-matter jurisdiction over tenant's mechanic's lienforeclosure action, and thus it could not transferthat cause of action to the common pleas court;pursuant to statute, only the Cleveland MunicipalCourt had jurisdiction over the foreclosure ofliens upon real property. R.C. § 1901.18(B).

Cases that cite this headnote

[2] Landlord and TenantGrounds of Action

Landlord's title to property under a recordeddeed was sufficient to support his claimagainst tenant for restitution of the premises,notwithstanding tenant's pending action againstlandlord for specific performance of the allegedland installment contract for the purchase of theproperty.


[3] Constitutional LawEviction and Proceedings Therefor

Landlord and TenantTrial

Landlord's presence at trial in forcible entry anddetainer action against tenant was not necessary,and his failure to appear did not deprive tenantof due process; landlord's testimony regardingleasing arrangement was unnecessary sincetenant admitted that he had an oral contract withlandlord whereby he had an obligation to pay$589 per month, and landlord had an obligationto allow him to occupy the premises, and headmitted that he stopped paying $589 a month.U.S.C.A. Const.Amend. 14.

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[4] Justices of the PeaceVerdict and Findings

Landlord and TenantJudgment and Enforcement Thereof

Magistrate's decision in forcible entry anddetainer action was not general; it containedfindings of fact and conclusions of lawsufficient to facilitate the trial court's rulingupon tenant's subsequent objections, and thusit was not necessary for magistrate to makeadditional findings following tenant's request.Rules Civ.Proc., Rule 53(D)(3)(a)(ii).


[5] Landlord and TenantWeight and Sufficiency of Evidence

Trial court's judgment of restitution in forcibleentry and detainer action brought by landlordagainst tenant was supported by sufficientevidence; tenant did not dispute that landlordwas the record owner of the garage or that heremained on the property despite having stoppedpaying landlord the $589 per month that he hadbeen paying pursuant to the terms of their oralcontract.


[6] Justices of the PeaceHarmless Error

Any error in the trial court's order to releasethe funds from clerk of the municipal court washarmless; the order to release the funds tenantdeposited with the clerk to landlord could nothave prejudiced tenant since the funds werebeing applied towards the rent that he failed topay, which exceeded the funds on deposit.


(Civil Appeal from Clark County Municipal Court).

Attorneys and Law Firms

Edwin A. Grinvalds, Urbana, OH, for plaintiff-appellee.

Wilfred L. Potter, Springfield, OH, for defendant-appellant.

Opinion

FAIN, P.J.

*1 {¶ 1} Defendant-appellant Teddy Bowshier appeals froma judgment of the Clark County Municipal Court orderingrestitution of the premises, formerly a commercial garage,located at 6 Vanada, in Springfield. The premises wereordered restored to the possession of plaintiff-appellee Robert

L. Bowshier, Teddy Bowshier's uncle. 1

{¶ 2} Teddy contends that the trial court erred by failing tosustain his motion to transfer this case to the Clark CountyCommon Pleas Court; that the trial court deprived him of dueprocess by hearing this case in Robert's absence (who wasrepresented by counsel at the hearing); that the magistrateerred by failing to grant Teddy's request for findings of factand conclusions of law; that the judgment is not supportedby the evidence, and is against the manifest weight of theevidence; and that the trial court erred when it released escrowfunds that he had deposited with the clerk of the trial courtas ordered by the court of appeals as a condition of its orderstaying the judgment pending a prior appeal. We find no meritto any of Teddy's contentions. Therefore, the judgment of thetrial court is Affirmed.

I. A Garage Becomes the Subject of a Family Dispute

{¶ 3} The property that is the subject of this litigation isa commercial garage that was built by Robert's father forTeddy's father, now deceased, in 1962. It was operated as theWest End Body Shop. At some point, the garage became theproperty of Betty L. Bowshier, now deceased, the mother ofRobert Bowshier.

{¶ 4} In 2008, Betty Bowshier gave her son Robert a generalpower of attorney. Using that power of attorney, Robertconveyed the garage to himself by a general warranty deed,recorded in May 2009.

{¶ 5} In May 2010, Robert and Teddy entered into atransaction concerning the garage, which was in poor






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condition. They disagree as to the nature of that transaction.According to Teddy, Robert agreed orally to sell him thegarage for $25,000, with monthly payments of $589 overabout a five-year time span. Teddy testified that TerryBowshier, Robert's son, came to him with a written landcontract, and told Teddy that Robert wanted a $2,500 downpayment. Teddy did not have $2,500. At that time, he talkedto Robert, and, according to Teddy, Robert agreed that Teddycould either pay the $2,500 at some time during the five-yearlife of the contract, or pay extra monthly payments at the endof the five years to cover the $2,500. According to Teddy,he saw the written contract at that time, but because he wasunable to pay the $2,500, he was not allowed to keep it, ora copy.

{¶ 6} According to Robert, the transaction was a straightlease, with monthly rental payments in the amount of $589.

{¶ 7} Teddy paid $589 a month, and did a lot of work onthe garage. According to Teddy, the work included cleaning,power washing, plumbing, electrical, the installation of a newfurnace, and the installation of new toilets. Twenty sheets ofdrywall were installed.

*2 {¶ 8} According to Teddy, in November 2011 hebecame aware, for the first time, that Robert viewed the $589payments as rent, not installment payments on a land contract.Teddy, who had moved into the garage in May 2011, stoppedmaking the payments. This litigation ensued.

II. The Course of Proceedings

{¶ 9} Robert brought this action in forcible entry and detainerin February 2012, in the Clark County Municipal Court,claiming that Teddy was a commercial tenant on an oralmonth-to-month lease, that Teddy had failed to pay the rentdue, and that Robert had served Teddy with a written noticeto leave the premises on February 10, 2012.

{¶ 10} Teddy filed an answer and counterclaim. In it, heclaimed that he had entered into a land contract with Robertfor the sale of the property, that in reliance upon that contract,he had made improvements and repairs totaling $18,000,and had paid installment payments totaling $10,600. Herecited that he had filed a mechanic's lien upon the garagein the office of the Clark County Recorder in the amountof $28,600. Teddy also claimed that the transfer of the titleto the property to Robert was void, because Robert had

unlawfully used a power of attorney to transfer the propertyfrom Betty Bowshier to himself. Teddy sought foreclosure ofhis mechanic's lien, and an order of specific performance ofthe land contract.

{¶ 11} Teddy then moved to transfer the cause of actionto the Clark County Common Pleas Court, contending thathis counterclaim exceeded the jurisdictional amount of themunicipal court, and also “involves the title to real propertywhich can only be done by the court of Common Pleas.”

{¶ 12} The affidavit of Shawn Bowshier was filed in themunicipal court. In it, Shawn Bowshier averred that he wasthe manager of the property for Robert, that Teddy was acommercial tenant of the property, that Teddy violated theterms of the oral lease by failing to pay rent, that the noticeto leave the premises had been served upon Teddy, and that$1,917 was due as unpaid rent and late fees as of January 31,2012.

{¶ 13} At the request of the trial court, both parties filedmemoranda on the issue of the municipal court's jurisdiction.

{¶ 14} The cause was heard before a magistrate on April4, 2012. Counsel for both parties were present. Robert,who resides in Florida, was not present. At the outset ofthe hearing, the averments in Shawn Bowshier's affidavitwere read into the record by the trial court, withoutobjection. Robert's counsel stated on the record that: “It's myunderstanding that Mr. Potter (Teddy's trial counsel) is notcontesting the fact that there's been no payments of moneysince the end of November.”Teddy's counsel did not takeexception to that statement.

{¶ 15} Robert did not offer any witnesses at the hearing.Teddy presented three witnesses, including himself.

{¶ 16} Thirteen days after the hearing, the magistraterendered a three-page decision, concluding that Robert wasentitled to restitution of the premises, and recommending thata writ of restitution be issued effective April 30, 2012. A weeklater, Teddy requested findings of fact and conclusions of law.Eight days thereafter, the magistrate rendered a decision that:“The Magistrate's Findings of Fact and Conclusions of Laware contained within the Magistrate's Decision, which wasfiled on April 17, 2012.”

*3 {¶ 17} On May 4, 2012, the trial court approvedand adopted the magistrate's decision. Teddy filed a timely


2013 WL 5314565, 2013 -Ohio- 4073


objection. In response on the objection, the trial court foundthat Teddy had an oral month-to-month lease of the premises,and had failed to pay rent. The trial court ordered theimmediate issuance of a writ of restitution. Teddy appealed.

{¶ 18} During the pendency of this appeal, we stayedexecution of the judgment on condition that bond in a monthlyamount of $650 be paid either into an escrow or trust accountin the names of the parties' counsel, or posted with the clerkof the Clark County Municipal Court. It appears that the latteralternative was chosen.

{¶ 19} We dismissed that appeal, and remanded the cause tothe trial court, finding that the trial court had neither addressedTeddy's objections, nor allowed him the full 30 days allowedby Civ.R. 53(D)(3)(b)(iii) for the filing of a transcript insupport of objections. Bowshier v. Bowshier, 2d Dist. ClarkNo.2012 CA 40, 2013–Ohio–297, ¶ 35–40.

{¶ 20} On remand, the trial court rendered judgment orderingrestitution, finding that Teddy had an oral month-to-monthlease, and had violated the terms of that lease.

{¶ 21} Robert moved to release the monies deposited withthe clerk of the Clark County Municipal Court, which thentotaled $4,550, to himself or his attorney. A hearing date wasset for this motion. Teddy's motion to continue the hearingwas overruled. Neither Teddy nor his attorney was present atthe hearing. The trial court, noting that Teddy had not filedany written opposition to the motion, sustained the motionand ordered the monies released to Robert and his counsel.

{¶ 22} From the judgment of restitution and from the orderreleasing the appeal bond, Teddy appeals.

III. The Trial Court Did Not Err by Failing toTransfer this Cause to the Common Pleas Court

{¶ 23} Teddy's First Assignment of Error is as follows:

THE MAGISTRATE ERRED AS AMATTER OF LAW WHEN HE DIDNOT TRANSFER THIS CASE TOCOMMON PLEAS COURT.

A. The Trial Court Had No Subject–Matter JurisdictionOver Teddy's Mechanic's Lien Foreclosure Action;

Therefore, it Lacked Jurisdiction to Transferthat Cause of Action to the Common Pleas Court

[1] {¶ 24} Teddy's first argument in support of thisassignment of error is that his mechanic's lien foreclosurecause of action, exceeding the jurisdictional monetary limitof the municipal court, should have resulted in the transfer ofthis case to the common pleas court.

{¶ 25}“ * * * [T]he term ‘exceeding’ the jurisdiction ofa court, when couched in monetary terms, is substantiallydifferent than that created by filing an action in a court thatis totally without jurisdiction. * * *. We conclude that acomplaint or counterclaim based on libel or slander in acourt without jurisdiction of the subject matter is properlysubject only to a motion to dismiss and not to a motion to[transfer].”Lin v. Reid, 11 Ohio App.3d 232, 236, 464 N.E.2d189 (10th Dist.1983).

*4 {¶ 26} In the case before us, the Clark County MunicipalCourt had no subject-matter jurisdiction over a foreclosureaction. The General Assembly has seen fit to confer upon theCleveland Municipal Court jurisdiction over the foreclosureof liens upon real property, but only the Cleveland MunicipalCourt. R.C.1901.18(B). Because the General Assembly foundit necessary to provide expressly for a grant of foreclosurejurisdiction to the Cleveland Municipal Court, we concludethat the jurisdiction to foreclose liens upon real property isnot part of the jurisdiction conferred upon municipal courtsgenerally. See Swarts v. Purdy, 2 Ohio Misc. 176, 177, 207N.E.2d 806 (Cincinnati Mun.Ct.1964).

{¶ 27} Because the Clark County Municipal Court lackedsubject-matter jurisdiction over Teddy's cause of action forthe foreclosure of his mechanic's lien, it did not err in failingto sustain his motion to transfer that cause of action, alongwith the case, generally, to the Clark County Common PleasCourt.

{¶ 28} Teddy also argues that he had a claim for unjustenrichment that exceeded the jurisdictional monetary limit ofthe Clark County Municipal Court, but we find no claim forunjust enrichment set forth in his answer and counterclaim.

B. Title to Property Under a Recorded Deed Is Sufficientto Support a Claim for Restitution of the Premises,

Notwithstanding the Existence of an Issue as to Title






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[2] {¶ 29} Teddy next argues that the Clark CountyMunicipal Court should have transferred this cause to theClark County Common Pleas Court because he has raisedtwo issues concerning the title to the property. The first ofthese is his claim for specific performance of the alleged landinstallment contract for the purchase of the property, wherebyhe claims that he has an equitable interest in the property.The second of these is his claim that Robert's title is invalid,because Robert's use of Betty Bowshier's power of attorneyto transfer the property from her to Robert was not permitted.

{¶ 30} As to the latter contention, although Teddy contendsthat Robert's recorded deed is “void,” the authority he reliesupon holds merely that a recorded deed based upon thegrantee's exercise of a power of attorney from the grantor isvoidable, not void. Montgomery v. Mosley, 4th Dist. Pike No.448, 1990 WL 127047, *1 (Aug. 24, 1990), quoted, but notcited, in Teddy's appellate brief.

{¶ 31} When Teddy filed his appellate brief in this court,no action was pending in another court involving title to thegarage. Recently, we have been provided with certified copiesof an action that Jack Bowshier, Robert's brother, filed July19, 2013, in the Clark County Common Pleas Court, ProbateDivision, in which Robert's title to the property is challengedon the basis of Robert's self-dealing use of Betty Bowshier'spower of attorney to transfer the title to himself. Upon theProbate Court's order to show cause why the complaint shouldnot be dismissed for lack of jurisdiction, Jack Bowshiermoved to transfer that cause of action to the General Divisionof the Clark County Common Pleas Court. He also moved toconsolidate that cause of action with the cause of action inthe Clark County Municipal Court with which this appeal isconcerned. The Probate Court, by order filed August 5, 2013,transferred the cause to the General Division of the CommonPleas Court, but did not order consolidation of that cause ofaction with the restitution action pending in the Clark CountyMunicipal Court.

*5 {¶ 32} In any event, a municipal court is not only notrequired to transfer an action in forcible entry and detainerto a common pleas court when there is an issue concerningthe title, it is not permitted to do so, so long as the plaintiffis the owner of record. “To allow the Municipal Court thediscretion to stay proceedings in this cause would be todefeat the purpose of the forcible entry and detainer statutes(i.e., immediate possession), to permit their circumventionby merely bringing title into question in a collateral suitin common pleas court, and to deny through successive

appeals the relief they were intended to provide.”State, ex rel.Carpenter v. Warren Municipal Court, 61 Ohio St.2d 208,210, 400 N.E.2d 391 (1980).See also Haas v. Gerski, 175Ohio St. 327, 330, 194 N.E.2d 765 (1963): “Since the forcibleentry and detainer action relates only to present possessionand not title, the fact that another action is pending relatingto the issue of title does not constitute a bar to the action inforcible detainer.”“Were appellee not permitted to prove hisright to possession by proving his record title, the forcibleentry and detainer statute would have little meaning.”Id., at331, 194 N.E.2d 765.

{¶ 33} The trial court did determine that the oral contractbetween the parties was a lease, not a land installmentcontract. But this was incidental to its determination thatTeddy was in violation of his contractual obligation to payrent, as a result of which Robert, the owner of record, wasentitled to restitution of the premises. The trial court had nojurisdiction to adjudicate, and did not adjudicate, the attacksupon Robert's title.

C. Ryan v. Kenley Is Distinguishable

{¶ 34} Teddy relies upon Ryan v. Kenley, 2dDist. Montgomery No. 10534, 2003–Ohio–2088, for theproposition that where the title to the premises is placed inquestion, a municipal court is without jurisdiction to heara forcible entry and detainer action. In that case, a countydistrict court in a forcible entry and detainer action hadconcluded that the defendant was the equitable owner ofthe property, despite the undisputed fact that the plaintiffwas the owner of record. We concluded that the countydistrict court had exceeded its jurisdiction when it adjudicatedthe defendant's claim to equitable title to the property, andreversed the judgment. Id. ¶ 14, 18.

{¶ 35} In Ryan, a quiet title action was pending in the commonpleas court when the county district court rendered judgment.Id. ¶ 7. In the interests of judicial economy, we remandedthe forcible entry and detainer cause of action to the countydistrict court with a “special mandate to * * * refer the forcibleentry and detainer claims and defenses to the common pleascourt for its determination in the quiet title action.”Id. ¶ 17,18.

{¶ 36} In the case before us, considerations of judicialeconomy militate against the referral of the forcible entryand detainer cause of action to the Clark County Common










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Pleas Court in which Jack Bowshier's challenge to Robert'srecorded title is now pending. Our affirmance of the trialcourt's order of restitution makes that a final adjudication ofthe forcible entry and detainer cause of action. The challengeto Robert's recorded title to the property was filed in theProbate Division of the Clark County Common Pleas Courton July 19, 2013, and was transferred to the General Divisionon August 5, 2013. Unlike the quiet title action in Ryan,which had been pending when the county district court in thatcase rendered judgment, before the appeal was even filed, theaction involving the title to the property in the case before us isonly now getting under way. And there had been no judgmentof restitution in Ryan, so that it made sense to consolidate theforcible entry and detainer cause of action with the quiet titleaction pending in the common pleas court. In the case beforeus, by contrast, to order the transfer the forcible detainer causeof action to the common pleas court would necessarily delaythe already completed adjudication of that cause of action,and that delay is forbidden by State, ex rel. Carpenter v.Warren Municipal Court and Haas v. Gerski, supra.

*6 {¶ 37} There is language in Ryan v. Kenley suggestingthat a municipal court may not decide a forcible entryand detainer claim when the action involves issues that themunicipal court does not have jurisdiction to determine. Ryan,at ¶ 16. We consider this to be dictum, since Ryan involved asituation where the municipal court had actually adjudicatedthe challenge to the plaintiff's recorded title to the property,holding that the defendant had equitable title. In the casebefore us, the challenges to Robert's recorded title to theproperty remain unadjudicated.

{¶ 38} Teddy's First Assignment of Error is overruled.

IV. Robert's Failure to Appear at the Hearing Did NotDeprive Teddy of Due Process of Law

{¶ 39} Teddy's Second Assignment of Error is as follows:

THE TRIAL COURT DEPRIVEDAPPELLANT OF DUE PROCESSOF LAW BY PROCEEDING TOTRIAL WITHOUT APPELLEE ANDUTILYZING EXTRA JUDICIALEVIDENCE TO MAKE ADECISION.

[3] {¶ 40} In Robert, who resided in Florida, did not appearat the April 4, 2012 evidentiary hearing before the magistrate.He was represented by counsel at the hearing.

{¶ 41} Teddy contends that Robert's failure to appeardeprived him of his right to confront and cross-examineRobert. As Robert notes, Teddy did not subpoena Robert as awitness at the hearing. Nor did Teddy object when it becameapparent, at the outset of the hearing, that Robert was notgoing to be there.

{¶ 42} Teddy cites Heard v. Sharp, 50 Ohio App.3d 34, 552N.E.2d 665 (8th Dist.1988) for the proposition that “a trialcourt does not abuse its discretion by dismissing a plaintiff'scomplaint with prejudice for failure to prosecute where theplaintiff fails to appear, without explanation, at a properlyscheduled trial.”That case involved an action in tort in whichthe plaintiff alleged that the defendant had hit him over thehead with an iron crowbar. Id. Plaintiff's counsel, theorizingthat injuries to the plaintiff's head had caused him to forgetthe trial date, asked for a continuance. Id., at 35, 552 N.E.2d665. The trial court denied the request for a continuance, anddismissed the action for want of prosecution. Id.

{¶ 43} In Heard, it was apparent that the plaintiff had noway of proving his cause of action without his own testimonythat the defendant had hit him over the head. Given thatcircumstance, we agree that it was not an abuse of discretionfor the trial court to have dismissed the cause of action. Inthe case before us, by contrast, the averments in the affidavitof Shawn Bowshier, Robert's manager of the property, whichhad previously been filed in the action, were read into therecord at the outset of the hearing, without objection byTeddy. These averments included that Teddy had become acommercial tenant of Robert at the premises, that the rent was$589 a month, that the rent had not been paid, and that anamount in excess of $1,917 was due for unpaid rent and latefees as of January 31, 2012.

*7 {¶ 44} During the hearing, Teddy admitted that he hadan oral contract with Robert whereby he had an obligationto pay $589 per month, and Robert had an obligation toallow Teddy to occupy the premises. The factual disputewas whether this contract was a lease or a land installmentcontract. Teddy further admitted that he stopped paying $589a month in November, 2011. Under these circumstances,which are different from those in Heard, Robert's presence atthe hearing was not necessary to prove his case for forcibleentry and detainer. Teddy did not dispute that Robert was theowner of record. If Teddy had any right to possession of thepremises, it must have devolved from the oral land contractthat Teddy attempted, unsuccessfully, to prove to the trial






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court's satisfaction, or from the lease that Robert claimed toexist, in which event, the rent was admittedly unpaid. Withoutone or the other, Teddy had no right to possession of thepremises.

{¶ 45} Teddy does not specify the “extra judicial evidence”referred to in his assignment of error. If it is Shawn Bowshier'saffidavit, that affidavit appears to have been received inevidence without objection by Teddy.

{¶ 46} Teddy's Second Assignment of Error is overruled.

V. The Magistrate Did Not Err When He Failedto Provide Findings of Fact and Conclusions of

Law Additional to those Contained in his Decision

{¶ 47} Teddy's Third Assignment of Error is as follows:

THE MAGISTRATE ERRED ASA MATTER OF LAW WHEN HEDID NOT RESPOND TO REQUESTFOR FINDINGS OF FACT ANDCONCLUSIONS OF LAW.

[4] {¶ 48} After the magistrate's decision, Teddy requestedfindings of fact and conclusions of law, under the authorityof Civ.R. 53(D)(3)(a)(ii), which provides that “a magistrate'sdecision may be general unless findings of fact andconclusions of law are timely requested by a party * * *.”In response, the magistrate filed a decision stating that: “TheMagistrate's Findings of Fact and Conclusions of Law arecontained within the Magistrate's Decision, which was filedon April 17, 2012.”

{¶ 49} The magistrate rendered a three-page, single-spaceddecision outlining the facts, and finding “that the Defendanthas failed to prove by clear and convincing evidence that therewas an oral land contract.”The magistrate found instead thatTeddy had an oral month-to-month lease, was in default forrent, was served with a notice to vacate, and had failed tovacate.

{¶ 50} In arriving at these ultimate conclusions of fact,and after reciting the Shawn Bowshier affidavit and Teddy'stestimony, the magistrate made the following findings in hisoriginal decision:

The fact that the Defendant improvedthe property by making necessaryrepairs in order to use the buildingin his commercial venture is notindicative that he was purchasingthe property rather than leasing.Furthermore, by his own testimonythe Defendant was presented with awritten land contract that Plaintiff'sagent refused to execute withoutpayment of the $2,500 down payment.Moreover, the Defendant labeled oneof his payments as “G rent” (seeDefendant's exhibit 2).

*8 {¶ 51} We agree with the magistrate that his originaldecision was not “general” within the meaning of Civ.R.53(D)(3)(a)(ii); it contained findings of fact and conclusionsof law sufficient to facilitate the trial court's ruling uponTeddy's subsequent objections. No additional findings of factand conclusions of law were required.

{¶ 52} Teddy's Third Assignment of Error is overruled.

VI. The Evidence in the Record Is Sufficientto Support the Judgment, and Is Not

Against the Manifest Weight of the Evidence

{¶ 53} Teddy's Fourth Assignment of Error is as follows:

THE DECISION OF THEMAGISTRATE WAS BASED UPONINSUFFUCIENT [sic] EVIDENCEAND WAS AGAINST THEMANIFEST WEIGHT OF THEEVIDENCE.

[5] {¶ 54} This appeal is taken from the judgment of thetrial court, not from the magistrate's decision, which, beinginterlocutory, is not a final appealable order. Consequently,although Teddy casts this assignment of error in terms of themagistrate's decision, the actual issue for this court is whetherthe judgment of restitution is not supported by the evidence,or is against the manifest weight of the evidence.

{¶ 55} Teddy did not dispute that Robert was the record ownerof the garage; nor did he dispute that he remained on the





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property despite having stopped paying Robert the $589 permonth that he had been paying pursuant to the terms of theiroral contract. These facts were set forth in Shawn Bowshier'saffidavit, which was received in evidence at the hearingwithout objection. These uncontroverted facts, alone, weresufficient to support the order of restitution, unless, arguably,Teddy had an oral contract with Robert for the purchase ofthe property. On that issue, Teddy had the burden of proofby clear and convincing evidence. Thus, the judgment ofrestitution is supported by sufficient evidence.

{¶ 56} Teddy cites a number of cases from this court for theproposition that the task of an appellate court, in conductinga weight-of-the-evidence review, is to “review the entirerecord, weigh all of the evidence and all the reasonableinferences, consider the credibility of the witnesses anddetermine whether in resolving conflicts in the evidence,the fact finder clearly lost its way and created such amanifest miscarriage of justice that the [judgment] must bereversed and a new trial ordered.”State v. Dossett, 2d Dist.Montgomery No. 20997, 2006–Ohio–3367, ¶ 32. “Only inexceptional cases, where the evidence ‘weighs heavily againstthe [judgment],’ should an appellate court overturn the trialcourt's judgment.”Id.

{¶ 57} Furthermore, as Teddy notes, the credibility of thewitnesses and the weight to be given to their testimony areprimarily matters for the trier of facts to resolve. State v.Gaddis, 2d Dist. Montgomery No. 24007, 2011–Ohio–2822,¶ 62.

{¶ 58} We have reviewed the transcript of the hearing beforethe magistrate, and we conclude that the judgment is notagainst the manifest weight of the evidence.

*9 {¶ 59} Russell Mitchem testified in Teddy's behalf.He testified that he could hear Teddy's end of a telephoneconversation that Teddy had with Robert in Florida:

Q. Did you hear Teddy make uh any statements aboutwhether he was buying or renting the garage?

A. Well, yeah, he said he needed some paperwork drawedup so what's happening now wouldn't be happening now.

{¶ 60} Later, Mitchem testified, on direct examination:

Q. Do you know how Teddy paid the rent?

A. He paid it, uh, money order and mailed it to Bob.

{¶ 61} On cross-examination, Mitchem testified that althoughhe could not hear Robert's end of this telephone conversation,at one point Mitchem took the phone to talk to Robert:

A. Well I said how you doin' Bob. It'sbeen a long time since I've heard fromya, you know, and he said yeah, and heasked me how I was doin' and I toldhim and I ask him how he was andhe told me and then I mentioned thatTeddy really appreciates you sellinghim the garage so he can do hisupholstering business there and he saidyeah, that's, I wanted to keep it in thefamily and that was the end of theconversation.

{¶ 62} Finally, on re-direct, Mitchem testified:

Q. And he indicated to you that he was selling that garageto uh Teddy Bowshier?

A. Right, when I said Teddy appreciates you selling himthat garage, he said yeah, I want to keep it in the family.

Q. Did he tell you how, what the terms of the, uh ...

A. No, he never got into no money or nothing. I never gotinto the, that detail, that far into it.

{¶ 63} Jean Arthur, who had been living with Teddy for nineyears, testified for him. She testified that Robert had told herhe was selling the garage to Teddy. On cross-examination,she acknowledged that she did not know the purchase price,just that Teddy was to pay Robert $589 per month. She alsoacknowledged that Teddy wrote “G rent” on one of the moneyorders used to pay the $589 per month. A copy of this moneyorder, along with others, was admitted as an exhibit at thehearing. She further acknowledged that none of the moneyorders reflected that they were for payment on a land contract.

{¶ 64} Teddy Bowshier also testified in his own behalf. Hetestified that he had an oral contract to purchase the garagefor $25,000, and that he never would have paid to repair andimprove the property if he was merely leasing it, without acontract to purchase. Concerning the money order with “Grent” written on it, Teddy testified: “That [writing] might be,be mine, but I doubt it. She [Jean Arthur] took care of all this,money orders.”







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{¶ 65} In summary, there is evidence in the record fromwhich the trial court might have found that Teddy had anoral contract to purchase the garage, but it did not make thatfinding, by clear and convincing evidence. We were not thereto see and hear the witnesses. We conclude that this is not theexceptional case where the fact finder lost its way, resultingin a miscarriage of justice.

*10 {¶ 66} Teddy's Fourth Assignment of Error is overruled.

VII. If the Trial Court Erred in Ordering the Release toRobert of the Funds Deposited During the Pendency of

the First Appeal, that Error Was Harmless, Since TeddyWas Not Prejudiced Thereby, Having Been Credited

in that Amount with Payment of the Unpaid Rent

{¶ 67} Teddy's Fifth Assignment of Error is as follows:

THE TRIAL COURT ERRED ASA MATTER OF LAW WHENIT RELEASED THE ESCROWFUNDS DEPOSITED PURSUANTTO COURT OF APPEALS ORDER.

[6] {¶ 68} When this cause of action was first on appealto this court, until we dismissed that appeal, we stayed theexecution of the restitution order, subject to the condition thatTeddy deposit $650 per month either into an escrow accountcontrolled by counsel for both parties, jointly, or with theclerk of the municipal court. It appears that the latter optionwas chosen.

{¶ 69} After the trial court's judgment of restitution onremand from this court, Robert moved for the release ofthe funds deposited with the clerk of the court, which thentotaled $4,550. Following a hearing at which Teddy failed

to appear, 2 the trial court ordered the release of the funds—then totaling $5,200—to Robert, finding that he was entitledto the unpaid rent for the property, and that the amount ofrent due exceeded $5,200. Implicit in the trial court's decisionreleasing the funds was that they represented unpaid rent, andthat Teddy would be credited with the payment of rent in thatamount.

{¶ 70} Teddy argues that the trial court was without thejurisdictional power to release the funds held by its clerk ofcourt. We disagree. A trial court has the jurisdictional powerto issue orders to its officers.

{¶ 71} At most, it might have been error for the trial court tohave released the funds. We need not decide whether the trialcourt erred in this regard, because even if its order to releasethe funds was error, that error would be harmless. The orderto release the funds Teddy deposited with the clerk cannothave prejudiced him, because they are being applied towardsthe rent that Teddy has failed to pay, which exceeds the fundson deposit. And Teddy is being credited with the payment ofrent in that amount.

{¶ 72} Teddy's Fifth Assignment of Error is overruled.

VIII. Conclusion

{¶ 73} All of Teddy's assignments of error having beenoverruled, the judgment of the trial court is Affirmed.

DONOVAN and HALL, JJ., concur.

Parallel Citations

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Footnotes

1 We will refer to the plaintiff-appellee as Robert, and to the defendant-appellant as Teddy.

2 Teddy moved for a continuance of this hearing, but his motion was overruled.

End of Document © 2014 Thomson Reuters. No claim to original U.S. Government Works.



Halajian v. Deutsche Bank Nat. Trust Co., Not Reported in F.Supp.2d (2013)

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United States District Court,E.D. California.

Barry HALAJIAN, an individual, Plaintiff,v.

DEUTSCHE BANK NATIONAL TRUST COMPANY,as Trustee for Gsamp Trust 2005–HE4, Mortgage

Pass–Through Certificates, Series 2005–HE4,a New York Corporation; JP Morgan ChaseBank N.A., a national banking association

incorporated in New York; NDEx West LLC,a Delaware limited liability company; and

Whitney K. Cook, an individual residing in Ohio;All Persons Known or Unknown Claiming an

Interest in 4917 E. Sooner Dr., Fresno, California93727; and Does 1–20 inclusive, Defendants.

No. 1:12–CV–00814 AWI GSA. | Feb. 14, 2013.


Randy Risner, Law Office Of Randy Risner, Fresno, CA, forPlaintiff.

Kristapor Vartanian, Laurie Hoefert Selkowitz, MarkLeonard Block , Natasha S. Ahmed, Wargo & French LLP,Los Angeles, CA, for Defendants.

Opinion

ORDER GRANTING IN PART AND DENYING INPART DEFENDANTS' MOTIONS TO DISMISS

ANTHONY W. ISHII, Senior District Judge.

*1 Plaintiff, acting through counsel, brings a second actionbefore this Court seeking injunctive relief, declaratory relief,and damages relating to real property at 4917 East SoonerAve, Fresno, California. (See 1:12–cv–00798–LJO–SMS.)Plaintiff seeks to enjoin his eviction from his Fresno Countyresidence (“property”) after a trustee's sale from the propertyby bringing six causes of action: (1) a violation of CaliforniaCivil Code section 2923.5, (2) Wrongful Foreclosure, (3)Lack of Privity of Contract, (4) Quiet Title, (5) Fraud and (6)Declaratory and Injunctive Relief.

Defendants Deutsche Bank National Trust Company andWhitney K. Cook have filed motions to dismiss for failureto state a claim under Federal Rule of Civil Procedure 12(b)(6). Defendants and Plaintiff both provided documents to theCourt in support of their pleadings of which the Court hastaken judicial notice.

For the reasons stated herein, the Court grants in part anddenies in part Defendants' Motions to Dismiss for failure tostate a viable claim.

I.

BACKGROUND 1

On May 18, 2005, Halajian borrowed $175,200.00 fromlender Fremont Investment & Loan, signing an adjustable-rate note in which he promised to repay the lender nolater than June 1, 2035. The loan was secured by adeed of trust for Halajian's property at 4917 East SoonerAvenue, Fresno, California. Halajian agreed to the termsand covenants of the deed of trust, executing it at thesame time as the note. The deed of trust named FremontGeneral Credit Corporation as the Trustee, and designatedMortgage Electronic Registration Systems, Inc., (MERS) asthe nominee for Fremont Investment & Loan, its successorsand assigns, to serve as the beneficiary of the deed of trust.

On June 28, 2010, Mortgage Electronic Registration Systems,Inc., as nominee for Fremont Investment & Loan, assignedto Deutsche Bank National Trust Company, as Trusteefor GSAMP Trust 2005–HE4, Mortgage Pass–ThroughCertificates, Series 2005–HE4, all beneficial interest in thedeed of trust and note executed by Halajian.

On May 17, 2010, ServiceLink, a Division of Chicago TitleCompany, on behalf of Chase Home Finance, L.L.C., andits agent NDEX West, LLC, filed a notice of default andintention to sell the property as a result of Halajian's failureto make required loan payments beginning February 1, 2010,and thereafter.

On March 7, 2011, Deutsche Bank filed an unlawful detaineraction against Halajian in Fresno County Superior Court(Case No. 11CECL01998).See Deutsche Bank Nat'l Trust Co.v. Halajian, 2012 WL 1076218 at *1 (E.D.Cal. March 29,2012) (No. 1:12–cv–00447–LJO–GSA).

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On April 28, 2011, Deutsche Bank moved for summaryjudgment in the unlawful detainer action; Halajian did notoppose the motion. Id. The Superior Court granted the motionand entered judgment on May 5, 2011. Id. A writ of executionfor restitution of the property issued on June 2, 2011. Id. OnJune 10, 2011, Halajian moved to set the judgment aside or,in the alternative, stay execution of judgment. Id. On June13, 2011, the Superior Court denied the motion to set asidethe judgment but stayed the writ of execution. Id. After asecond motion to set aside the judgment was denied, Halajianappealed to the state appellate court on June 20, 2011. Id. OnJune 22, 2011, Halajian moved to stay enforcement of thejudgment pending appeal. Id. On June 28, 2011, the SuperiorCourt granted the motion to stay.

*2 Halajian filed a new appeal on October 26, 2011. Id.

On February 27, 2012, Deutsche Bank filed another unlawfuldetainer complaint against Halajian (12CECL01530).Id. OnMarch 23, 2012, Halajian removed the case to federal court(Case No. 1:12–cv–00447–LJO–GSA).Id. The District Courtremanded the action to Fresno County Superior Court on

April 17, 2012. 2 On or about May 10, 2012, the FresnoCounty Superior Court entered judgment in favor of DeutscheBank. Doc. 13–2.

On May 15, 2012, Halajian filed a complaint in propriapersona with the District Court against Deutsche BankNational Trust Co., NDEX West LLC, JP Morgan ChaseBank N.A., and Whitney K. Cook. Halajian v. Deutsche BankNat'l Trust Co. (Case No. 1:12–cv–00798–LJOSMS). OnMay 31, 2012 the District Court, on its own motion, dismissedwith prejudice Halajian's complaint, calling the pleading “anill-conceived attempt at legal sleight of hand.”Id. Doc.2.

II.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(b)(6), a claimmay be dismissed because of a plaintiff's “failure to statea claim upon which relief can be granted.”A Rule 12(b)(6) dismissal is proper where there is either a “lack of acognizable legal theory” or “the absence of sufficient factsalleged under a cognizable legal theory.”Balistreri v. PacificaPolice Dept., 901 F.2d 696, 699 (9th Cir.1988); see also

Graehling v. Village of Lombard, Ill. ., 58 F.3d 295, 297 (7thCir.1995).“When a federal court reviews the sufficiency ofa complaint, before the reception of any evidence either byaffidavit or admissions, its task is necessarily a limited one.The issue is not whether a plaintiff will ultimately prevailbut whether the claimant is entitled to offer evidence tosupport the claims.”Scheurer v. Rhodes, 416 U.S. 232, 236,94 S.Ct. 1683, 40 L.Ed.2d 90 (1974); Gilligan v. JamcoDevelopment Corp., 108 F.3d 246, 249 (9th Cir.1997).”[A]complaint should not be dismissed unless ‘it appears beyonddoubt that the plaintiff can prove no set of facts in supportof his claim which would entitle him to relief.”Hartford FireInsurance Co. v. California, 509 U.S. 764, 811, 113 S.Ct.2891, 125 L.Ed.2d 612 (1993).

The court must also assume that “general allegations embracethose specific facts that are necessary to support theclaim.”Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 889, 110S.Ct. 3177, 111 L.Ed.2d 695 (1990). Thus, the determinativequestion is whether there is any set of “facts that couldbe proved consistent with the allegations of the complaint”that would entitle plaintiff to some relief. Swierkiewicz v.Sorema N.A., 534 U.S. 506, 514, 122 S.Ct. 992, 152 L.Ed.2d1 (2002). However, courts will not assume that plaintiffs“can prove facts which [they have] not alleged, or that thedefendants have violated ... laws in ways that have notbeen alleged.”Associated General Contractors of California,Inc. v. California State Council of Carpenters, 459 U.S.519, 526, 103 S.Ct. 897, 74 L.Ed.2d 723 (1983). Further,although they may provide the framework of a complaint,legal conclusions are not accepted as true and “[t]hreadbarerecitals of elements of a cause of action, supported by mereconclusory statements, do not suffice.”Ashcroft v. Iqbal, 556U.S. 662, 678, 129 S.Ct. 1937, 1949–50, 173 L.Ed.2d 868(2009); see also Warren v. Fox Family Worldwide, Inc. ., 328F.3d 1136, 1139 (9th Cir.2003).

*3 In deciding whether to dismiss a claim under Rule12(b)(6), the Court is generally limited to reviewing onlythe complaint. “There are, however, two exceptions ... First,a court may consider material which is properly submittedas part of the complaint on a motion to dismiss.... If thedocuments are not physically attached to the complaint,they may be considered if the documents' authenticity isnot contested and the plaintiff's complaint necessarily relieson them. Second, under Fed.R.Evid. 201, a court may takejudicial notice of matters of public record.”Lee v. City of LosAngeles, 250 F.3d 668, 688–89 (9th Cir.2001). The NinthCircuit later gave a separate definition of “the ‘incorporation




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by reference’ doctrine, which permits us to take into accountdocuments whose contents are alleged in a complaint andwhose authenticity no party questions, but which are notphysically attached to the plaintiff's pleading.”Knievel v.ESPN, 393 F.3d 1068, 1076 (9th Cir.2005). Moreover,“judicial notice may be taken of a fact to show that acomplaint does not state a cause of action.”Sears, Roebuck& Co. v. Metropolitan Engravers, Ltd., 245 F.2d 67, 70(9th Cir.1956); see Estate of Blue v. County of Los Angeles,

120 F.3d 982, 984 (9th Cir.1997). 3 “[A] court may not lookbeyond the complaint to a plaintiff's moving papers, suchas a memorandum in opposition to a defendant's motion todismiss. Facts raised for the first time in opposition papersshould be considered by the court in determining whetherto grant leave to amend or to dismiss the complaint with orwithout prejudice .”Broam v. Bogan, 320 F.3d 1023, 1026 n.2 (9th Cir.2003), citations omitted.

If a Rule 12(b)(6) motion to dismiss is granted, claims maybe dismissed with or without prejudice, and with or withoutleave to amend.”[A] district court should grant leave to amendeven if no request to amend the pleading was made, unless itdetermines that the pleading could not possibly be cured bythe allegation of other facts.” Lopez v. Smith, 203 F.3d 1122,1127 (9th Cir.2000) (en banc) (quoting Doe. v. United States,58 F.3d 494, 497 (9th Cir.1995)). In other words, leave toamend need not be granted when amendment would be futile.Gompper v. VISX, Inc., 298 F.3d 893, 898 (9th Cir.2002).

III.

DISCUSSION

The first basis of Plaintiff's complaint is his assertionsthat Defendants Deutsche Bank and JPMorgan Chase Bankare not true creditors of Plaintiff because the loan inquestion was securitized and therefore have no right toassign, substitute or foreclose upon the loan. (Complaint¶ 87.) Second, Plaintiff asserts that the assignment andsubstitution of trustee were invalid due to an absenceof agency relationship between Ms. Cook and MERS orDeutsche Bank National Trust. (Complaint ¶¶ 19, 20.) Third,Plaintiff alleges that Ms. Cook's assignment of beneficialinterest on behalf of MERS as nominee for Fremont GeneralCredit Corp. was invalid because Fremont was “defunct” atthe time of transfer. (Complaint ¶¶ 22,23.) Plaintiff furthercontends that Defendants failed to comply with statutory

notice requirements for non-judicial foreclosure proceedings.(Complaint ¶¶ 64–69.)

1. Notice of Default*4 Plaintiff's first cause of action alleges a violation of

California Civil Code Section 2923.5. Subsection (b) of2923.5 requires, “a notice of default filed pursuant to section2924 to include a declaration that the mortgagee, beneficiary,[or] authorized agent has contacted the borrower, or has triedwith due diligence to contact the borrower as required by thissection ...”“Civil Code sections 2924–2924h, inclusive, donot require actual receipt by a trustor of a notice of defaultor notice of sale. They simply mandate certain proceduralrequirements reasonably calculated to inform those who maybe affected by a foreclosure sale and who have requestednotice in the statutory manner that a default has occurredand a foreclosure sale is imminent.' ” Knapp v. Doherty,123 Cal.App.4th 76, 88–89, 20 Cal.Rptr.3d 1 (Cal.App. 6thDist.2004), citing Lupertino v. Carbahal, 35 Cal.App.3d 742,746–47, 111 Cal.Rptr. 112 (Cal.App.3d Dist.1973). Plaintiffdisputes the truth of the declaration contained in the noticeof default, not the fact of the notice of default's filing.Plaintiff pleads no facts in support of bald contention thatDefendants did not comply with section 2923.5. (Complaint¶¶ 66–68.) When attacking a non-judicial foreclosure sale, aborrower must overcome a presumption of propriety. Knappv. Doherty, 123 Cal.App.4th 76, 86 n. 4, 20 Cal.Rptr.3d 1(2004). He may do this by proving an improper procedureoccurred and by demonstrating resulting prejudice. Id. Evenassuming a failure to do due diligence on the part of Ms.McCarty, signatory on behalf of Chase Home Finance forpurposes of the declaration of compliance under CaliforniaCivil Code Section 2923.5(b), or Chase Home Finance, asagent for MERS as beneficiary, the plaintiff has neithershown prejudice nor even alleged that it exists.

Even if plaintiff could prove that the terms of section 2923.5were not complied with there is no remedy presently availableto plaintiff under this section. As this Court has previouslyrecognized, a California Court of Appeal has held that section2923.5 provides a pre-sale remedy only and that the onlyavailable remedy is a postponement of the foreclosure sale.Mabry v. Superior Court, 185 Cal.App.4th 208, 225, 110Cal.Rptr.3d 201 (Cal.Ct.App. June 2, 2010).“There is nothingin section 2923.5 that even hints that noncompliance withthe statute would cause any cloud on title after an otherwiseproperly conducted foreclosure sale.”Id. Once the sale is held,as it was here, the statute is no longer applicable. Id.

















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Under this cause of action plaintiff seeks to void the trusteesale. Under California law, “[a] valid and viable tender ofpayment of the indebtedness owing is essential to an actionto cancel a voidable sale under a deed of trust.”Karlsen v.American Sav. & Loan Assn., 15 Cal.App.3d 112, 117, 92Cal.Rptr. 851 (1971). Those courts that have examined theissue have found tender is required for claims under Section2923.5. See, e.g,. Keen v. American Home Mortg. Servicing,Inc., 2009 WL 3380454 at. *10 (E.D.Cal.2009) (noting thatoverwhelming majority of California district courts requiretender when examining wrongful foreclosure claims); Anayav. Advisors Lending Group, 2009 WL 2424037 at. * 10(E.D.Cal.2009) (“An action to set aside a foreclosure sale,unaccompanied by an offer to redeem, does not state a causeof action which a court of equity recognizes.”); Pantoja v.Countrywide Home Loans, Inc., 640 F.Supp.2d 1177, 1183–84 (N.D.Cal.2009) ( “Under California law, in an action toset aside a trustee's sale, a plaintiff must demonstrate that hehas made a ‘valid and viable tender [offer] of payment of theindebtedness.’”) (quoting Karlsen, 15 Cal.App.3d at 117, 92Cal.Rptr. 851). No such tender has been alleged here.

*5 Plaintiff's wrongful foreclosure claims under CaliforniaCivil Code Section 2923.5 must therefore be dismissedwithout leave to amend.

2. Wrongful ForeclosurePlaintiff's second cause of action alleges that “[n]one ofthe Defendants have standing to enforce the Note becausethey are not the owners of the Note, holder of the Noteor beneficiary under the Note. None of the Defendantsclaims to be a holder of the Note or a beneficiary under theNote.”(Complaint ¶ 73)

“If the trustee's deed recites that all statutory noticerequirements and procedures required by law for theconduct of the foreclosure have been satisfied, a rebuttablepresumption arises that the sale has been conducted regularlyand properly.”Nguyen v. Calhoun, 105 Cal.App.4th 428, 440,129 Cal.Rptr.2d 436 (2003). The California Court of Appealhas explained non-judicial foreclosure under California CivilCode sections 2924–2924l:

The comprehensive statutoryframework established to governnonjudicial foreclosure sales isintended to be exhaustive.... It includesa myriad of rules relating to noticeand right to cure. It would be

inconsistent with the comprehensiveand exhaustive statutory schemeregulating nonjudicial foreclosures toincorporate another unrelated cureprovision into statutory nonjudicialforeclosure proceedings.

Moeller v. Lien, 25 Cal.App.4th 822, 834, 30 Cal.Rptr.2d 777(1994).

Under California Civil Code section 2924(a)(1), a “trustee,mortgagee or beneficiary or any of their authorized agents”may conduct the foreclosure process. Under California CivilCode section 2924(b)(4), a “person authorized to record thenotice of default or the notice of sale” includes “an agentfor the mortgagee or beneficiary, an agent of the namedtrustee, any person designated in an executed substitutionof trustee, or an agent of that substituted trustee.”“Upondefault by the trustor, the beneficiary may declare a defaultand proceed with a nonjudicial foreclosure sale.”Moeller, 25Cal.App.4th at 830, 30 Cal.Rptr.2d (1994). In the present caseFremont General Credit Corporation was the original Trusteeand MERS the original Beneficiary of the Deed of Trust.

(Complaint ¶ 15.) (Notice of Default.) 4

As the designated beneficiary and nominee for the lenderunder the Deed of Trust, MERS had the authority to assign theDeed of Trust and to substitute Trustee Corps as trustee. See,e.g., Madrid v. Bank of Ameica Corp., 2011 WL 2729429,at *3 (S.D.Cal. July 13, 2011) (“[P]ursuant to the Deed ofTrust, MERS had the authority to assign its beneficial interestto another party.”); Castaneda v. Saxon Mortg. Services,Inc., 687 F.Supp.2d 1191, 1198 (E.D.Cal.2009) (“As thelisted nominee and beneficiary under the Deed of Trust,MERS had authority to assign its beneficial interest to anotherparty.”); Hensley v. Bank of New York Mellon, 2011 WL2118810, at *3 (E.D.Cal. May 27, 2011) (internal citationsomitted) (“[C]ourts have held that where MERS acts as abeneficiary under a deed of trust, it has the right to assign itsinterest. Moreover, California Civil Code § 2934a expresslyauthorizes a beneficiary under a deed of trust to substitutethe trustee.”); Edwards v. Aurora Loan Services, LLC, 2011WL 1668926, at *20 (E.D.Cal. May 2, 2011) (“California lawpermits a beneficiary to make a substitution of trustee andgrant the power to foreclose.”); Lawther v. Onewest Bank,2010 WL 4936797, at *6 (N.D.Cal. Nov.30, 2010) (“Courtsin this Circuit have repeatedly recognized that MERS, as anamed nominal beneficiary to a Deed of Trust, has the powerto make assignments and substitutions under California's





















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statutory foreclosure scheme.”). Further, the deed of trustspecifies that “[b]orrower understands and agrees that MERSholds only legal title to the interest granted by [b]orrower inthis Security Instrument, but, if necessary, to comply withlaw or custom, MERS (as nominee for Lender and Lender'ssuccessors and assigns) has the right: to exercise any or allof those interests, including but not limited to the right toforeclose and sell the property....” (Deed of Trust p. 3 of 5.)Additionally, California law does not require assignment tobe made in writing for an assignee beneficiary to foreclose.Parcray v. Shea Mortg. Inc ., 2010 WL 1659369 at. *11(E.D.Cal. Apr. 23, 2010) Accordingly, MERS had standingto assign its beneficial interest.

*6 Plaintiff claims that Ms. Cook was not a vice presidentor authorized agent of MERS acting as nominee for the“defunct” Fremont Investment and Loan for purposes ofassignment of a beneficial interest in the trust. (Complaint¶¶ 23, 60) Further, Plaintiff contends that the Substitutionof Trustee made by Ms. Cook was invalid because of thealleged invalid assignment of beneficial interest and becauseMs. Cook was not an authorized signatory of Deutsche Bank.(Complaint ¶ 62)

This Court recognizes a split of authority on the issueof whether allegations of lack of agency capacity of thesignatory may underlie a wrongful foreclosure claim withoutjudicially noticeable facts by either party. Many recentcases have held to the effect that the dual position of asignatory does not give rise to an inference of lack ofagency relationship. See Chua v. IB Property Holdings, LLC,2011 WL 3322884, at. *2 (C.D. Cal Aug. 1, 2011) ( [T]othe extent that Plaintiffs take issue with Lisa Markham'sdual position, Plaintiffs have not identified a relevant legalauthority prohibiting one individual from working for bothCitiMortgage and MERS or from acting as an agent for both.);see also Couch v. JPMorgan Chase Bank, N.A. No. CV11–8710–GHK (Ssx), at *5 (C.D.Cal. May 14, 2012) (Themere fact that Derborah Brignac was not an employee ofJPMorgan and Colleen Irby was not an employee of CRCdoes not give rise to a reasonable inference that they didnot have the authority to sign documents on behalf of thosecompanies.) Conversely, this District has also recognizeda claim where the complaint stated that the signatory ofthe substitution of trustee was not in fact an officer of thecorporation she purported to represent but rather an employeeof a third party lender and defendant provided no judiciallynoticeable documentation to the contrary. Michel v. DeutscheBank Trust Company, as Trustee for GSAA Home Equity

Trust 2006–2 et. al. No 1:10–cv–2375 AWI SKO (E.D.Cal.Sept. 20, 2012); see also Tang v. Bank of AM., N.A., 2012 WL960373, at *10–11 (C.D.Cal. Mar.19, 2012.)(Aside from thevery documents whose legitimacy is reasonably questionedby Plaintiffs, Defendants submit no judicially noticeabledocuments showing that [signatory] was indeed an agent forBOA and not MERS ... The Court believes that it wouldbenefit from the minimal discovery necessary to prove theagency relationship between BOA, MERS, and [signatory.] ).Consistent with its previous holding, the Court concludesthat this issue is more appropriately resolved at the summaryjudgment stage. Michel v. Deutsche Bank, No. 1:10–cv–2375AWI SKO at *9 (E.D. Cal. Sept 20, 2012); Milyakov v.JP Morgan Chase, N.A., 2012 U.S. Dist. LEXIS, at *12–13,2012 WL 879245 (N.D.Cal. Mar. 15, 2012.)Consistentwith its ruling in Michel v. Deutsche Bank, the court holdsthat discovery necessary to prove that Ms. Cook was in fact anagent of MERS and Deutsche Bank National Trust is requiredbefore the court would reconsider a motion for summaryjudgment on the same ground. If Ms. Cook was not authorizedto sign the assignment of deed of trust and substitution oftrustee then both are invalid.

*7 A trustee's sale undertaken by one who is not thevalid trustee is void. See Dimock v. Emerald Properties,81 Cal.App.4th 868, 876, 97 Cal.Rptr.2d 255 (Cal.App.4thDist.2000); Pro Value Properties, Inc. v. Quality LoanService Corp., 170 Cal.App.4th 579, 581, 88 Cal.Rptr.3d 381(Cal.App.2d Dist.2009). Where a trustee sale is void tenderneed not be alleged because the action is not based in equity.Dimock v. Emerald Properties LLC, 81 Cal.App.4th 868, 877,97 Cal.Rptr.2d 255 (2000).

Without judicially noticeable documents showing that Ms.

Cook was in fact authorized to sign on behalf of MERS 5 andDeutsche Bank National Trust Co., this court will not dismiss

the wrongful foreclosure cause of action at this stage. 6

3. SecuritizationPlaintiff does not have standing to challenge the securitizationof his loan because he is not a party to the Pooling ServiceAgreement (PSA).Junger v. Bank of Am., N.A., 2012 WL603262 *3 (C.D.Cal. Feb.24, 2012); see also In re Correia,452 B.R. 319, 324 (1st Cir.BAP 2011) (holding that debtors,as non-parties to a PSA, lack standing to challenge a mortgage

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Even if plaintiff had standing to address the securitizationprocess, “securitization of a loan does not in fact alter oraffect the legal beneficiary's standing to enforce the deed oftrust.”Sami v. Wells Fargo Bank, C 12–00108 DMR, 2012WL 967051, at. *5 (N.D.Cal. Mar. 21, 2012) (quoting Reyesv. Gmac Mortgage LLC, No. 11–0100, 2011 WL 132275,at. *3 (D. Nev. April 5, 2011)); see also Nguyen v. Bank ofAm. Nat'l Ass'n, 2011 WL 5574917, at. *9 (N.D.Cal. Nov.15, 2011) (securitization of mortgage loan does not providemortgagor with cause of action). To the extent Plaintiffcontends that Defendants Deutsche Bank or NDEx West donot have the authority to foreclose because the loan waspackaged and resold in the secondary market, this argumentis rejected. Lane v. Vitek Real Estate Industries Group, 713F.Supp.2d 1092, (E.D.Cal.2010) (“The argument that partieslose interest in a loan when it is assigned to a trust pool hasalso been rejected by numerous district courts.”); Benham v.Aurora Loan Services, 2009 WL 2880232 at. *3 (N.D.Cal.Sept. 1, 2009.) “[S]ecuritization merely creates a separatecontract, distinct from [p]laintiffs['] debt obligations underthe note, and does not change the relationship of the partiesin any way.” Reyes, 2011 WL 1322775, at. *3. Accordingly,plaintiff's claim of the impossibility of “any servicer or trustee[being] ... the agent for the holder of the note for purposes ofstanding to foreclose” is rejected. (Complaint ¶ 38.)

4. Privity of ContractPlaintiff's third cause of action asserts that “Plaintiff'sparticipation in the mortgage contract was procured byovert and covert misrepresentations and nondisclosures. Theparties did not share a single expectation with respect to any ofthe terms of the mortgage contract and therefore the contractis void ab initio. No enforceable contract was formed betweenPlaintiff and any of these Defendants, so the Deed of Trustand Promissory Note were not assets of Defendants that couldbe acquired or assumed.”(Complaint ¶¶ 106–107) Since thecourt has concluded previously that the plaintiff has stateda plausible claim based on the allegation that assignmentof beneficial interest by Ms. Cook on behalf of MERS wasinvalid (See supra part III.2. Wrongful Foreclosure) but thatthe securitization process had no legal impact on the legalpositions of the original parties to the note and deed of trust(See supra part III.3. Securitization), this section will dealonly with the validity of the execution of the original deed oftrust.

*8 California Civil Code Section 1550 requires four essentialelements to a contract: 1) parties capable of contracting, 2)their consent, 3) a lawful object, and 4) sufficient cause or

consideration. Cal. Civ.Code § 1550. Section 1565 specifiesthat the requisite consent must be: 1) free, 2) mutual, and3) communicated by each to the other. Cal. Civ.Code §1565. It is plaintiff's claim that, “The parties did not sharea single expectation with respect to any of the terms ofthe mortgage contract and therefore the contract is void abinitio.”(Complaint ¶ 106)

“[A]bsent special circumstances ... a loan transaction is atarm's length and there is no fiduciary relationship betweenthe borrower and the lender.”Oaks Management Corp. v.Superior Court, 145 Cal.App.4th 453, 466, 51 Cal.Rptr.3d561 (Cal.Ct.App.2006); Nymark v. Heart Fed. Savings &Loan Assn., 231 Cal.App.3d at 1093 n. 1, 283 Cal.Rptr.53 (“The relationship between a lending institution andits borrower-client is not fiduciary in nature.”); see Crossv. Downey S & L Ass'n, 2009 U.S. Dist. LEXIS 17946,at * 14,2009 WL 481482 (C.D.Cal. Feb. 23, 2009). Acommercial lender is entitled to pursue its own economicinterests in a loan transaction. Nymark, 231 Cal.App.3dat 1093, n. 1, 283 Cal.Rptr. 53. This right is inconsistentwith the obligations of a fiduciary, which require that thefiduciary knowingly agree to subordinate its interests to acton behalf of and for the benefit of another. Id. Moreover, alender “owes no duty of care to the [borrower] in approving[a] loan.”Wagner v. Benson, 101 Cal.App.3d 27, 35, 161Cal.Rptr. 516 (1980).Wagner held that as a matter of law,the lender did not owe a legal duty not to place borrowersin a loan even where there was a foreseeable risk that theborrowers would be unable to repay. Id.; see also Cross, 2009WL 481482 at. *5 (lender has no duty to disclose to plaintiffsthat they do not have the ability to repay the loan).

Plaintiff has pled no specific misrepresentations ornondisclosures that would give rise to the plausible existenceof a cause of action in this case. Even if the original lenderfully expected to sell the loan to investors immediately andwait for plaintiff's inevitable default, plaintiff states no claimfor relief since none of the Defendants had no duty to disclosean adverse financial interest.

Based on the judicially noticed Deed of Trust it appearsthat Mr. Halajian and Fremont General Credit Corp. at leastagreed to the terms of the 15 pages of the Deed of Trustbearing Halajian's initials and signature. This document issufficient to meet the California requisite of objective mutualassent based on the reasonable meanings of the words andactions of the parties, not their unexpressed intentions or



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understandings. Netbula, LLC. V. BlindView DevelopmentCorp., 516 F.Supp.2d 1137, 1155 (N.D.Cal.2007).

Since Plaintiff fails to state a claim upon which relief can begranted this claim is dismissed with leave to amend.

5. Quiet Title*9 Plaintiff's fourth cause of action attempts to state a claim

for quiet title. To establish a claim for quiet title, plaintiffmust file a verified complaint that alleges: (a) a description ofthe property; (b) plaintiff's title as to which a determinationis sought; (c) the adverse claims to the title; (d) the date asto which the determination is sought; and (e) a prayer forthe determination of title. Cal.Code Civ. Proc. § 761.020.Plaintiff fails as to part (c).

Plaintiff states that “Defendant Deutsche Bank now claimstitle to the property by virtue of a void Trustee's Deed ofSale.”(Complaint ¶ 111) Assuming that plaintiff is correct asto the invalid assignment of interest by MERS the plaintiffhas not pled facts that would give rise to the legal conclusionthat plaintiff has paramount title. An invalid assignmentand substitution would still leave MERS as beneficiary andFremont (or its successors or assigns) as lender and trustee asto the Deed of Trust defaulted on by Plaintiff.

Further, Plaintiff fails to explain the grounds on which hisclaim is based, as required by section 761.020(c), other thana conclusory and legally inaccurate allegation that defendantsare not the holders in due course of the promissory note ordeed of trust for the property based on the securitization ofthe loan. Nor has plaintiff alleged tender or the ability tooffer tender. See Kelley v. Mortg. Elec. Registration, 642F.Supp.2d 1048, 1057 (N.D.Cal.2009) (“Plaintiffs have notalleged ... that they have satisfied their obligation under theDeed of Trust. As such, they have not stated a claim to quiettitle.”); see also Distor v. U.S. Bank, NA, 2009 WL 3429700,at *6 (N.D.Cal.Oct.22, 2009) (“plaintiff has no basis to quiettitle without first discharging her debt, and ... she has notalleged that she has done so and is therefore the rightfulowner of the property”).“Nothing short of the full amount duethe creditor is sufficient to constitute a valid tender, and thedebtor must at his peril offer the full amount .”Rauer's Law& Collection Co. v. Sheridan Proctor Co., 40 Cal.App. 524,525, 181 P. 71 (1919).

To obtain “rescission or cancellation, the rule is that thecomplainant is required to do equity, as a condition to hisobtaining relief, by restoring to the defendant everything of

value which the plaintiff has received in the transaction....The rule applies although the plaintiff was induced to enterinto the contract by the fraudulent representations of thedefendant.”Fleming v. Kagan, 189 Cal.App.2d 791, 796, 11Cal.Rptr. 737 (1961).“A valid and viable tender of paymentof the indebtedness owing is essential to an action to cancel avoidable sale under a deed of trust.”Karlsen, 15 Cal.App.3dat 117, 92 Cal.Rptr. 851. Nowhere in Plaintiff's complaint istender even mentioned.

Therefore, Plaintiff's quiet title claim is insufficient towithstand a motion to dismiss under Twombly, 550 U.S. at555 and should be dismissed with leave to amend.

6. Fraud*10 Plaintiff's fifth cause of action attempts to state a

claim for fraud. Plaintiff's fraud claim relies on two centralpremises: First, securitization changed the relationships of theparties to the Deed of Trust and Promissory Note contracts,(Complaint ¶ 118.) and second, the parties who foreclosedupon plaintiff had no legal right to do so. (Complaint ¶¶ 119–123.) This court has already determined that securitizationdoes not alter the relationships of the parties to the originalagreement. See supra, part III.3., Securitization. Next, thiscourt has already determined that plaintiff has alleged factssufficient to state a plausible claim as to the lack of agencyrelationship between Ms. Cook and MERS and Ms. Cook andDeutsche Bank for purposes of a wrongful foreclosure action.See supra, part III.2, Wrongful Foreclosure. What is left tobe determined is whether Plaintiff can meet the heightenedpleading requirements of Federal Rule of Civil Procedure 9(b)and whether any of the Defendants had a duty to discloseinformation that they allegedly withheld from Plaintiff.

Federal Rule of Civil Procedure 9(b) provides that “[i]nallegations of fraud or mistake, a party must statewith particularity the circumstances constituting fraud ormistake.”To satisfy the rule, a plaintiff must allege the “who,what, where, when, and how” of the charged misconduct.Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir.1997). Inother words, “the circumstances constituting the alleged fraudmust be specific enough to give defendants notice of theparticular misconduct so that they can defend against thecharge and not just deny that they have done anythingwrong.”Vess v. Ciba–Geigy Corp. U.S.A., 317 F.3d 1097,1106 (9th Cir.2003).“The plaintiff must set forth whatis false or misleading about a statement, and why it isfalse.”Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1106(9th Cir.2003). By contrast, “[m]alice, intent, knowledge,



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and other conditions of a person's mind may be allegedgenerally.”Fed. R. Civ. Pro. 9(b). When a party pleadsfraud against a corporation, as plaintiffs in this case, thealready heightened pleading standard is further heightened.“The requirement of specificity in a fraud action against acorporation requires the plaintiff to allege the names of thepersons who made the allegedly fraudulent representations,their authority to speak, to whom they spoke, what theysaid or wrote, and when it was said or written.”Cerecedes v.U.S. Bankcorp, 2011 WL 2711071 at. *5 (C.D.Cal. July 11,2011) (citing Tarmann v. State Farm Mut. Auto. Ins. Co., 2Cal.App.4th 153, 2 Cal.Rptr.2d 861 (1991)). Moreover, “[i]nthe context of a fraud suit involving multiple defendants, aplaintiff must, at a minimum, identif[y] the role of [each]defendant[ ] in the alleged fraudulent scheme.”Swartz v.KPMG, LLP, 476 F.3d 756, 765 (9th Cir.2007) (quotingMoore v. Kayport Package Express, Inc., 885 F.2d 531, 541(9th Cir.1989)).

*11 Under California law, the “elements of fraud are:(1) a misrepresentation (false representation, concealment,or nondisclosure); (2) knowledge of falsity (or scienter);(3) intent to defraud, i.e., to induce reliance; (4) justifiablereliance; and (5) resulting damage.”Robinson Helicopter Co.,Inc. v. Dana Corp. ., 34 Cal.4th 979, 990, 22 Cal.Rptr.3d 352,102 P.3d 268 (2004).

Plaintiff's complaint alleges that, “Defendant Whitney K.Cook is a known robosigner having signed thousands ofdocuments without sufficiently reviewing said documentsor making any effort whatsoever to ascertain what thedocuments were for or what they were intended to do.”Thecourt is cognizant of reports of the use of robosigners byfinancial institutions. However, the court fails to see howthe personal knowledge of Ms. Cook as to the contents ofthe Deed of Trust is significant in this context when thePlaintiff does not argue that tender of the debt was paid or thatthe amount of the debt is inaccurate. See Cerecedes v. U.S.Bankcorp, 2011 WL 2711071 at p. * 5 (2011).

The court will recognize plaintiff's claim of misrepresentationinsofar as plaintiff has already stated a claim that Ms. Cookmay not have been authorized to sign on behalf of MERS andDeutsche Bank. Based on the recognized misrepresentationthere is no plausible claim that Mr. Halajian justifiablyrelied on the false statement. Plaintiff merely alleges that he“reasonably relied upon the representations of the Defendants

and or their predecessors, agents or assigns, in agreeingto execute the mortgage loan documents.”(Complaint ¶128). Contrary to his assertion that he relied upon therepresentation, Mr. Halajian brought the present wrongfulforeclosure suit based on the allegedly false assignment andsubstitution of trustee.

The failure or inability of plaintiff to allege reliance is fatalto plaintiff's fraud claim. It is therefore dismissed with leaveto amend.

7. Declaratory and Injunctive ReliefPlaintiff's sixth cause of action requests declaratory andinjunctive relief. This section of his Complaint is correctlyunderstood as requesting a remedy. The court would note thatthe declaratory and injunctive relief requested is contingenton the outcome of the wrongful foreclosure cause of action.Since the second cause of action, wrongful foreclosure, hasnot been dismissed the court will not dismiss the requestedrelief.

IV.

ORDER

Defendants' motions to dismiss are GRANTED in part andDENIED in part. Plaintiff has stated a claim in the second andsixth causes of action based on the theory that the assignmentand substitution of trustee were ineffective. Defendants'motions to dismiss the second and sixth causes of action areDENIED.

Defendants' motions to dismiss the first cause of actionalleging a violation of California Civil Code Section 2923.5are GRANTED without leave to amend as to them.

Defendants' motions to dismiss the third, fourth, and fifthcauses of action for lack of privity of contract, quiet title, andfraud, respectively, are GRANTED with leave to amend as toeach of them. Plaintiffs may file an amended complaint withintwenty one days of entry of this order.

*12 IT IS SO ORDERED.

















2013 WL 593671


Footnotes

1 The factual history is provided for background; the assertions contained therein are not necessarily taken as true. The legally relevant

facts relied upon by the court are discussed within the analysis.

2 A court may take judicial notice of its own records in other cases. United States v. Wilson, 631 F.2d 118, 119 (9th Cir.1980).

3 Deutsche Bank National Trust Co.'s request that the court take judicial notice of the Deed of Trust, Notice of Default and attached

declaration, Notice of Sale, Substitution of Trustee, Assignment of Deed of Trust, and Trustee's Deed Upon Sale is granted. See

Sears, 245 F.2d at 70;Lee, 250 F.3d at 688–89. Here, Plaintiff's complaint refers to the note, Deed of Trust, Notice of Default, Notice

of Sale, and Substitution of Trustee.

Plaintiff objects that these documents do not satisfy the requirements of FRE 201 (Docket No. 34). These documents, however,

are matters of public record and not generally subject to dispute. As such, this court may consider Plaintiff's pertinent loan and

foreclosure documents.

Whitney K. Cook's request that the court take judicial notice of the PACER case locator results for Fremont Investment and Loan is

granted to the extent that court recognizes Fremont Investment and Loan was actively attempting to enforce its rights as a creditor

as recently as May 2, 2012.

4 Plaintiff claims that “MERS has no standing to initiate legal actions concerning the property because MERS does not hold any legal

or equitable interest in the debt or the property.”(Complaint ¶ 30.) The judicially noticeable Deed of Trust specifically lists MERS

as the nominee for the lender and the lenders successors and assigns as well as beneficiary which directly contradicts Plaintiff's legal

conclusion.

5 The court gives little weight to Plaintiff's request for judicial notice of the two page list of corporate officers of MERS as evidence that

Ms. Cook is not an officer considering Plaintiff alleges in his complaint that MERS “has literally thousands of officers.” (Complaint

¶ 26.)

6 Plaintiff points out that “[MERS has] never ha[d] possession of the promissory note.”(Complaint ¶ 27) “Under Civil Code section

2924, no party needs to physically possess the promissory note.”Sicairos v. NDEX West, LLC, 2009 WL 385855, at *3 (S.D.Cal.2009)

(citing Cal. Civ.Code, § 2924(a)(1)). Rather, “[t]he foreclosure process is commenced by the recording of a notice of default and

election to sell by the trustee.”Moeller, 25 Cal.App.4th at 830, 30 Cal.Rptr.2d 777. An “allegation that the trustee did not have the

original note or had not received it is insufficient to render the foreclosure proceeding invalid.”Neal v. Juarez, 2007 WL 2140640,

*8 (S.D.Cal.2007). Whether MERS or Fremont ever had possession of the promissory note has no legal bearing.

7 Because the Court has determined that the plaintiff lacks standing, it does not address all of the remaining potential bases for dismissal

on the related securitization claims.





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Phillips v. Biers, Not Reported in P.3d (2010)

2010 UT App 348


2010 WL 5027052

UNPUBLISHED OPINION. CHECK COURT RULESBEFORE CITING.

This decision was reviewed by West editorialstaff and not assigned editorial enhancements.

Court of Appeals of Utah.

Daniel PHILLIPS and EmilyPhillips, Plaintiffs and Appellees,

v.Samuel L. BIERS and Jami Biers,

Defendants and Appellants.

No. 20100743-CA. | Dec. 9, 2010.

Second District, Ogden Department, 100904509; TheHonorable Mark R. DeCaria.


Samuel L. Biers and Jami Biers, Durham, North Carolina,Appellants Pro Se.

Jeremy M. Shorts, Orem, for Appellees.

Before Judges McHUGH, THORNE, and VOROS.

Opinion

MEMORANDUM DECISION(Not For Official Publication)

PER CURIAM:

*1 This matter is before the court on Daniel and EmilyPhillips's motion for summary disposition. The Phillipsesallege that the order of restitution that Samuel L. and JamiBiers seek to appeal is not a final judgment.

“An appeal may be taken from a district or juvenile courtto the appellate court with jurisdiction over the appeal fromall final orders and judgments.” Utah R.App. P. 3(a). “To befinal, the trial court's order or judgment must dispose of allparties and claims to an action.” Bradbury v. Valencia, 2000UT 50, ¶ 10, 5 P.3d 649. In order for a judgment to be final,“a trial court must even determine attorney fee awards.” Id.

The order of restitution is not a final, appealable judgmentbecause it does not resolve all issues raised in the unlawfuldetainer case. Specifically, the order of restitution failed toresolve the Phillipses' claims for monetary damages. Thisincludes the Phillipses' request for attorney fees. Therefore,while the order of restitution required the Bierses to vacate thepremises, the order did not resolve the entire dispute betweenthe parties. Accordingly, we lack jurisdiction over the appealand must dismiss. See Varian-Eimac, Inc. v. Lamoreaux, 767P.2d 569, 570 (Utah Ct .App.1989).

The appeal is dismissed without prejudice to the filing of atimely appeal from a final order.

Parallel Citations

2010 UT App 348


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