Tooele Transcript Bulletin – News in Tooele, Utah

September 6, 2012
Tooele to appeal Overlake lawsuit to Supreme Court

Tooele City is taking its legal battle with the developer of Overlake to the Utah Supreme Court.

The city has decided to appeal an August state Court of Appeals decision that overturned a 2010 3rd District Court declaration of a mistrial in the Tooele Associates versus Tooele City trial.

“The Court of Appeals 2012 decision in the decade-old case raises important questions of law, including ones affecting other Utah municipalities, which should be resolved by the Utah Supreme Court,” wrote Tooele City officials in a written statement released Wednesday. The statement also called the 2009 jury verdict unjust and asserted that 3rd District Court Judge Randall Skanchy correctly refused to enter a judgment against the city after the 2009 trial.

Drew Hall, managing partner of Tooele Associates said the city’s decision to appeal to the Supreme Court was not a surprise.

“Tooele City officials can’t face the fact that they lost,” said Hall. “The city’s position appears to be that eight jurors and three Court of Appeals justices all got it wrong.”

Hall contends that the judgment, which nets out to $20 million for Overlake Associates, is amassing $5,665 a day in interest. Tooele City officials claim that the final judgment has not been entered in the case, so no interest has accumulated.

Tooele City has spent $4.2 million defending itself against the lawsuit since 2002.

“If the city wants to spend more money on legal fees for an appeal, that is their problem,” said Hall.

The long-running legal battle started in 2002 when Hall filed several lawsuits in 3rd District Court against Tooele City, claiming it had violated the development agreement for Overlake. Tooele City filed a countersuit against Tooele Associates claiming that Tooele Associates had violated the development agreement in 2004.

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, 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 an Aug. 2 ruling by the Court of Appeals that reinstated the jury verdict.

While Tooele City claims they have tried to reach a settlement with Hall out of court, Hall said he has not heard from Tooele City since city officials walked out of arbitration before the 2009 trial.

“I have not had one phone call from Tooele City since the trial,” said Hall.

Dunlavy said he met with Hall soon after he was elected mayor in 2005 and had a fair and open discussion, but no settlement was reached.

Tooele City Mayor Patrick Dunlavy said arbitration was tried before the trial but did not work.

Prior to the 2009 trial both sides participated in formal arbitration.

“There was arbitration, it went on for approximately six hours, offers to settle went back and forth,” said Dunlavy. “The city felt our offers were more than fair, and our expectation was to agree to settle that day. Unfortunately they could not agree.

“It’s important to know that attempts have been made, but negotiation must be reasonable. I’m sure they [Tooele Associates] feel their demands were reasonable. I know the city’s were.”

Once the trial started, the city felt it would prevail based on the evidence of the case, according to Dunlavy.

“The verdict was unjust and unreasonable based on trial testimony,” said Dunlavy.

Following the filing of that response, the Supreme Court will take approximately 60 days to decide if they will hear the appeal, according to Roger Baker, Tooele City attorney.

If the Supreme Court decides to hear the appeal, then both sides will submit written briefs and the court will schedule a time for oral arguments. That process is at the discretion of the Supreme Court with no anticipated time frame, according to Baker.

Tim Gillie

Staff Writer at Tooele Transcript Bulletin
Tim covers education, Tooele City government, business, real estate, politics and the state Legislature. He became a journalist after a long career as an executive with the Boy Scouts of America. Tim is a native of Washington state and a graduate of Central Washington University.

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