Tooele City does indeed owe the developer of Overlake $20.7 million for breach of contract, according to a Utah Court of Appeals decision issued this morning.
The court reversed a 2010 mistrial ruling by a 3rd District Court judge and reinstated a 2009 jury verdict awarding Tooele Associates, the developer of Overlake, $20.7 million because Tooele City breached the development agreement for the 3,000-acre subdivision on the northwest edge of Tooele.
“We are happy to have the Court of Appeals decision agree with all of our arguments about the jury’s verdict,” said Bruce Baird, legal counsel for Tooele Associates. “We hope that now, having lost to the jury and now in the Court of Appeals, Tooele City will finally treat Tooele Associates fairly as it should have done for the last several years.”
Drew Hall, managing partner of Tooele Associates, said he always had confidence the Court of Appeals would uphold the jury’s decision.
“We are grateful to the Court of Appeals for its recognizing the wisdom and integrity of the jury’s verdict,” said Hall.
Baird said his client has only had a short time to review the decision but hopes that this decision will signal the end of a 10-year protracted legal battle with Tooele City.
“Drew has always been ready to sit down and have a reasonable discussion with the city about the future of his development,” said Baird.
Tooele City officials are carefully examining the decision before determining a course of action.
“This is an ongoing process,” said Patrick Dunlavy, Tooele City mayor. “We are looking at the court’s finding and will determine the next step to take to protect the interests of the citizens of Tooele.”
The tale of Overlake began in 1995, when Hall approached city officials with an idea for a master planned community. Tooele City negotiated a development agreement with Hall that was signed in 1997.
In 2002, Hall filed several lawsuits in 3rd District Court against Tooele City, claiming it had violated the development agreement.
Hall alleged that Tooele City misapplied public improvement ordinances, required public improvements in Overlake to meet standards not required of other developers, created an arbitrary punch list of items that needed to be fixed for public improvements to be considered complete, slowed down or refused to make final inspections, and refused to recognize prior admissions that some public improvements were complete.
In 2004, the city filed a countersuit against Tooele Associates asking for unspecified damages, claiming the company had violated the Overlake development agreement by failing to complete safe and satisfactory public improvements that prevented the establishment of schools; not operating the golf course according to terms of the agreement; not providing a functional secondary water system; not assuring that homes complied with the agreement’s architectural and landscape standards; and several other violations of the development agreement.
The case went to jury trial in the 3rd District Court in June 2009.
The jury found Tooele City was guilty of breaching agreements with Tooele Associates and awarded the developer $22.5 million in damages — an amount that was reduced to $20.7 million because Tooele Associates was ordered to pay the city $1.8 million for its own failure to honor agreements.
In 2010, 3rd District Court Judge Randall Skanchy, who presided over the jury trial, declared a mistrial, citing irreconcilable conflicts in the jury’s verdict.
Hall appealed the mistrial ruling, which lead to today’s decision by the Court of Appeals that reinstated the jury verdict.