Kiernan Family Draper, LLC v. Hidden Valley Health Ctrs., LC

497 P.3d 330

KIERNAN FAMILY DRAPER, LLC, Appellant,

v.HIDDEN VALLEY HEALTH CENTERS, LC and Hidden Valley L.L.C., Appellees.

No. 20190588

Supreme Court of Utah.

Heard February 8, 2021

Filed September 2, 2021

Troy L. Booher, Beth E. Kennedy, Dick J. Baldwin, Salt Lake City, for appellant

Richard D. Burbidge, Carolyn J. LeDuc, Salt Lake City, for appellees

Chief Justice Durrant authored the opinion of the Court, in which Associate Chief Justice Lee, Justice Himonas, Justice Pearce, and Justice Petersen joined.

Chief Justice Durrant, opinion of the Court:

Introduction

¶1 Kiernan Family Draper, LLC (Kiernan) and Hidden Valley Health Centers, LC and Hidden Valley, L.L.C. (collectively, Hidden Valley) collaborated to develop their neighboring properties into a shopping center. They formalized their collaboration in a declaration of covenants, conditions, and restrictions (Declaration). Among other things, the Declaration stated that "[i]n no event shall the parking ratio within any Parcel be less than four spaces per 1,000 feet of Floor Area of all Buildings within that Parcel." The Declaration also included antiwaiver provisions stating that either party's failure to enforce a provision of the Declaration "shall not be construed as a waiver" of that provision or any other part of the Declaration.

¶2 When Hidden Valley finished construction on its parcel in 2002, it fell short of its obligation to provide four parking spaces per 1,000 square feet of floor area. But Kiernan waited to sue until 2017.

¶3 We must decide whether the six-year statute of limitations for contract claims limits Kiernan's right to enforce the parking ratio to the post-2002 status quo. We conclude that the Declaration's antiwaiver provisions preserve the parking provision even though Kiernan waited fifteen years to file suit. But what the antiwaiver provisions giveth the statute of limitations taketh away, barring Kiernan from enforcing the parking provision as written.

¶4 We must also decide whether Kiernan can circumvent the statute of limitations on its claim that Hidden Valley exceeded the scope of its cross-parking easement by casting its claim as an action for violation of an easement. We conclude that Kiernan's claim is subject to the statute of limitations even though it has alleged harm to a property right.

Background

¶5 Beginning in the 1990s, Kiernan and Hidden Valley agreed to develop their neighboring properties into a shopping center.¹ Through the years, their working relationship deteriorated, precipitating this case.

¶6 Before beginning construction on the shopping center, Kiernan and Hidden Valley formalized their joint development project by entering into a declaration of covenants, conditions, and restrictions. As part of this Declaration, they agreed to maintain a ratio of four parking spaces per 1,000 square feet of floor area on each parcel and provided for cross-parking easements for the properties. That way each party would bear a proportionate burden to provide parking for the shopping center. The parties also included two antiwaiver provisions in the Declaration stating that either party's failure to enforce a provision of the Declaration "shall not be construed as a waiver" of that provision or any other part of the Declaration.

¶7 In 1999, Kiernan and Hidden Valley amended the Declaration. Hidden Valley negotiated for larger building footprints on its parcel—which would reduce the available parking area—in exchange for constructing improvements that would benefit both parties' parcels. Kiernan agreed to these changes. But the parties did not amend the Declaration's parking ratio or either of the antiwaiver provisions.

¶8 After the parties amended the Declaration, Hidden Valley finalized its construction plan and submitted it to Draper City for approval. Draper City asked Hidden Valley to reduce the parking lot by about thirteen spaces. Hidden Valley modified its plan accordingly, so the city approved the plan and made it available to the public. Shortly thereafter, Hidden Valley began construction.

¶9 In 2002, both parties had completed some construction. In accordance with its construction plan, Hidden Valley constructed fewer than four parking spaces per 1,000 square feet of floor space on its parcel. But although Hidden Valley breached its obligation to provide parking as required in the Declaration, Kiernan chose not to enforce the parking ratio at that time.

¶10 About fifteen years later, Kiernan filed three claims for breach of contract, seeking damages and injunctive relief for Hidden Valley's breach of the Declaration.² Kiernan also included a broad claim for declaratory relief "as to the rights and obligations of the parties under the Declaration."

¶11 During discovery, Kiernan learned that Hidden Valley had restriped its parking lot on its parcel shortly before Kiernan filed suit, temporarily removing four additional parking spaces.

¶12 Before trial, Hidden Valley filed a motion for summary judgment, arguing that Kiernan's claims were time-barred under the six-year statute of limitations for contract claims.³ In response, Kiernan advanced two arguments for why its contract claims should not be subject to the statute of limitations.

¶13 First, Kiernan argued that the statute of limitations should not apply because Hidden Valley's operation of an under-parked business effected a continuing breach of the Declaration. Second, it argued that the expiration of the statute of limitations on its contract claims should not be interpreted as effectively granting Hidden Valley a greater easement interest on the Kiernan lot.

¶14 In its memorandum decision, the district court concluded that Kiernan's claims were time-barred because Hidden Valley's initial breach was the construction of its facilities and deficient parking lot. And Hidden Valley's daily operation of its business in those facilities, the court found, had not caused subsequent harm to Kiernan beyond the harm of the initial breach.⁴

¶15 The court reasoned that Hidden Valley's construction plan had been public since Draper City approved it in 1999. Moreover, the ratio of parking spaces to floor space had been visible on the property since 2002 when Hidden Valley completed construction. So Kiernan had notice of Hidden Valley's deficient parking lot for more than six years before filing suit in 2017. Any of Kiernan's claims regarding the 2002 changes to the parking lot were therefore time-barred under the statute of limitations because Kiernan filed suit more than six years after the changes.

¶16 The court nevertheless granted summary judgment to Kiernan regarding Hidden Valley's 2017 restriping because Hidden Valley did not dispute that it had temporarily removed some parking spaces in breach of the Declaration at that time. The court explained that, at trial, it would therefore measure Hidden Valley's 2017 breach by "whatever difference those changes made to the status quo at the time." That is, the court concluded that the expiration of the statute of limitations for Kiernan's claims regarding the 2002 changes to the parking lot had created a new post-2002 "status quo" in place of the parking ratio originally recorded in the Declaration.

¶17 At trial, the court concluded that Hidden Valley's 2017 restriping was a technical breach of the Declaration and considered whether Kiernan was entitled to any damages. As the court had explained in its summary judgment order, it considered the difference the removal of four spaces had made to the post-2002 status quo—the state of the parking ratio after Hidden Valley completed construction. The court determined that Kiernan had not suffered any financial or economic loss from Hidden Valley's 2017 breach, because the only business operating on Kiernan's parcel, Kmart, had gone out of business the year before. Kmart had shuttered its doors but continued to pay rent and retained its right to occupy the property until its lease expired. So the court noted that any harm resulting from the 2017 restriping would have been inflicted on Kmart because it held the right to occupy the Kiernan parcel for the period between when Hidden Valley had removed the spaces and when it had later replaced them. Kiernan, in contrast, did not hold the right to occupy the parcel at this time, and so it was not entitled to any compensatory damages. And because the court awarded no compensatory damages, it declined, in its discretion,⁵ to award Kiernan nominal damages for Hidden Valley's technical breach.

¶18 The district court also declined to award declaratory relief regarding the scope of Hidden Valley's cross-parking easement because Kiernan had "presented no evidence of any alleged change to, or impact upon, the scope of the cross-easements arising from Hidden Valley's temporary parking changes." And any dispute over future permitting was unripe.

¶19 Although the court concluded that Hidden Valley had technically breached the Declaration in 2017, because it declined to award Kiernan any relief, it designated Hidden Valley the prevailing party and awarded it attorney fees.

¶20 Kiernan appealed the district court's decision, arguing that the court erred in applying the statute of limitations to bar it from enforcing the parking ratio as written in the Declaration and in limiting Kiernan's recovery to the post-2002 status quo. In the alternative, Kiernan argues that, because Hidden Valley exceeded the scope of its cross-parking easement, and Hidden Valley has not met the requirements for a prescriptive easement, the district court erred in barring Kiernan's claim.

¶21 We have jurisdiction under Utah Code section 78A-3-102(3)(j).

Standard of Review

¶22 We review for correctness the district court's application of the statute of limitations to bar Kiernan's recovery because "[t]he applicability of a statute of limitations ... [is a] question[ ] of law."⁶

Analysis

¶23 On appeal, Kiernan argues the district court erred in concluding that, because its claims relating to...