LD III v. Mapleton City

2020 UT App 41
THE UTAH COURT OF APPEALS
LD III LLC,
Appellant,
v.
M APLETON C ITY ,
Appellee.
Opinion
No. 20190090-CA
Filed March 19, 2020
Fourth District Court, Provo Department
The Honorable James R. Taylor
No. 170401683
Denver C. Snuffer Jr., Attorney for Appellant
Eric T. Johnson and Robert Alan Patterson, Attorneys
for Appellee
JUDGE D AVID N. M ORTENSEN authored this Opinion, in which
JUDGES K ATE A PPLEBY and R YAN M. HARRIS concurred.
MORTENSEN, Judge:
¶1 	Through the years, a tract of land (Property) in Mapleton,
Utah, passed through various hands, eventually ending up in
the possession of LD III, LLC (LDIII). When LDIII sought to
develop the Property into 176 residential units, the Mapleton city
council 	approved 	a 	modification 	of 	the 	applicable 	zoning
ordinance. 	Mapleton 	citizens 	challenged 	the 	zoning 	change,
however, and reversed it through a voter referendum. This
prompted LDIII to seek a declaratory judgment in the district
court, where LDIII lost on summary judgment. We affirm.

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BACKGROUND1
The Original Agreement
¶2 	In 2003, Suburban Land Reserve, Inc. (Suburban) owned
the Property, which at the time consisted of roughly 245 acres of
undeveloped real estate on Mapleton’s east bench. Suburban
thereafter 	entered 	into 	a 	development 	agreement 	(Original
Agreement) with Mapleton, wherein Suburban conveyed about
76 acres of the Property to Mapleton. In exchange, Mapleton
passed an ordinance zoning the remaining approximate 170
acres with a 136-residential-unit maximum density and a TDR-R
overlay, 	meaning 	it 	was 	a 	receiving 	site 	for 	transferable
development rights (TDRs).2 Mapleton also granted 77 TDRs to
Suburban.
¶3 	As 	relevant 	to 	this 	appeal, 	the 	Original 	Agreement
included the following provisions. Section 2 provided for the
zone change of the two parts of the Property and for the
conveyance of the TDRs to Suburban. Section 6 provided that
“the Owner has a vested right to develop a maximum of one
1. On appeal from a district court’s summary judgment ruling,
we 	view 	“the 	facts 	and 	all 	reasonable 	inferences 	drawn
therefrom in the light most favorable to the nonmoving party”—
here, LDIII. Jordan Constr., Inc. v. Federal Nat’l Mortgage Ass’n,
2017 UT 28, ¶ 24, 408 P.3d 296 (cleaned up).
2. 	TDRs allow landowners to 	be 	“compensated 	for 	loss of
development opportunities by being given development rights
that can be used elsewhere to exceed applicable restrictions in
the ‘receiving area.’ In effect, TDRs involve shifting potential
development from one area to another, with the result that
sensitive 	land 	is 	preserved.” 	Crystal 	Forest 	Assocs., 	LP 	v.
Buckingham Twp. Supervisors, 872 A.2d 206, 211 n.8 (Pa. Commw.
Ct. 2005). See generally Utah Code Ann. § 10-9a-509.7 (LexisNexis
2015).

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20190090-CA 	3 	2020 UT App 41
hundred 	thirty-six 	(136) 	single 	family 	residential 	units 	on
individual lots.” Section 10 stated in full:
10. 	Assignment of Agreement. Owner’s rights
under this Agreement shall be personal to Owner
and shall only run with the land so long as Owner
or a company which is affiliated with or under
common ownership and control of Owner shall
own and be the Owner of the Property. In the
event that Owner intends to sell the Property or
any portion thereof to any other party, Owner shall
advise 	City 	of 	such 	intention. 	Only 	upon 	the
express prior written approval by the City, shall
any rights of Owner with respect to the portion of
the Property being sold be deemed transferred to
the new owner thereof. City may withhold such
approval in the exercise of its reasonable business
judgment, based upon conditions that exist at the
time of the transfer, the proposed transferee and
the history of the development of the Project prior
to such time.
Section 19 also dealt with the Property passing to another entity:
19. 	Successors 	and 	Assigns. 	This 	Agreement
shall be binding on the successors and assigns of
Owner. . . . In the event of an approved sale or
transfer of the Project, or any portion thereof, the
seller or transferor and the buyer or transferee shall
be jointly and severally liable for the performance
of 	each 	of 	the 	obligations 	contained 	in 	this
Agreement, unless . . . [otherwise] approved by
City. Alternatively, prior to such approved sale or
transfer, 	Owner 	shall 	obtain 	from 	buyer 	or
transferee a letter [meeting certain conditions].

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Finally, 	Section 	21 	provided 	that 	“this 	Agreement 	or 	a
memorandum providing public notice of the existence of this
Agreement shall be recorded immediately as a covenant running
with the Property herein described in order to put prospective
purchasers or other interested parties on notice as to the terms
and provisions hereof.”
Transfer of the Property to the Preserve
¶4 	Ultimately, Suburban did not develop the Property as
planned. In December 2005, Suburban transferred the Property
to 	another 	entity 	(Preserve). 	Pursuant 	to 	Section 	10 	of 	the
Original Agreement, the Mapleton city council approved this
transfer. 	Later 	on, 	at 	the 	request 	of 	the 	Preserve 	(LDIII’s
predecessor in interest), the city council approved a change of
the base zoning of the Property from A-2 with a TDR-R overlay
to a base zone of PRC-4 without the TDR-R designation. The
PRC-4 zone is a site-specific designation that, in this case, called
for a planned residential community and the creation of a 92-
unit density cap. See Mapleton, Utah, Mun. Code § 18.82D.110
(2007) (“The total density allowed in the Preserve at Mapleton
PRC-4 zone is ninety-two (92) individual building lots and
common 	area 	buildings. 	No 	new 	subdivision 	lots 	shall 	be
permitted beyond those originally approved for the purpose of
increasing this density.”).3 Mapleton’s zoning maps reflected the
changes. The changes were entirely in line with the Preserve’s
request; indeed, the Preserve drafted the PRC-4 zone language.
3. Although the zoning ordinance does not expressly address the
TDR-R overlay, its second sentence states, “No new subdivision
lots shall be permitted beyond those originally approved for the
purpose of increasing this density,” Mapleton, Utah, Mun. Code
§ 18.82D.110 (2007), thereby removing the TDR-R overlay as
reflected by Mapleton’s subsequent zoning maps. Furthermore,
the Preserve was satisfied with a 92-unit-maximum density and
did not request that the TDR-R overlay remain.

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¶5 	After 	obtaining 	the 	zoning 	change 	it 	requested, 	the
Preserve executed a promissory note in favor of LDIII. In 2008,
LDIII foreclosed on the Property, which still was zoned as PRC-4
with a cap of 92 units, and obtained ownership. Mapleton did
not approve of the transfer of ownership of the Property to
LDIII, however, either before or after the foreclosure. And LDIII
does not contend that it ever obtained written approval of the
transfer of ownership.
¶6 	In 2017, many years after acquiring the Property, LDIII
contracted 	with 	another 	company 	to 	develop 	it. 	The
development company sought approval from Mapleton for a
176-unit 	development 	on 	the 	Property. 	In 	June 	2017, 	the
Mapleton city council acceded to the development company’s
request and modified the zoning designation of the Property to
include a TDR-R overlay and a maximum of 169 units. However,
shortly thereafter, Mapleton citizens challenged the Property’s
rezoning through a voter referendum. The referendum received
the required votes to invalidate the zoning change, and therefore
the Property ultimately did not obtain a change in its base
zoning, unit-density cap, or TDR-R overlay status.
¶7 	LDIII 	then 	sought 	a 	declaratory 	judgment 	from 	the
district court regarding whether pertinent zoning ordinances or
the Original Agreement allowed the development plan. LDIII
also argued that the referendum was invalid. Mapleton opposed
LDIII’s lawsuit and asked the district court to dismiss it on
summary 	judgment. 	The 	district 	court 	granted 	Mapleton’s
motion and dismissed LDIII’s lawsuit.
¶8 	LDIII appeals.
ISSUE AND STANDARD OF REVIEW
¶9 	LDIII contends that the district court erred in granting
summary judgment to Mapleton. To support this position, LDIII
first argues that it benefits from the zoning “density entitlement”

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set forth in the Original Agreement, claiming that the zoning
rights afforded to Suburban in the Original Agreement ran with
the land. LDIII alternatively claims that there is an ambiguity as
to whether the rights run with the land. LDIII also argues that
even if it did not receive its desired zoning through contractual
or property rights, it did through Mapleton city council’s 2017
decision to rezone the Property, and it claims that those rights
still exist because the referendum overriding that decision was
invalid.4
¶10 	“An 	appellate 	court 	reviews 	a 	[district] 	court’s 	legal
conclusions and ultimate grant or denial of summary judgment
for correctness,” giving no deference to the district court’s legal
conclusions. Jordan Constr., Inc. v. Federal Nat’l Mortgage Ass’n,
2017 UT 28, ¶ 24, 408 P.3d 296 (cleaned up). Summary judgment
is appropriate “only when, viewing all facts and reasonable
inferences 	therefrom 	in 	the 	light 	most 	favorable 	to 	the
nonmoving party, there is no genuine issue as to any material
fact and the moving party is entitled to a judgment as a matter of
law.” Morra v. Grand County, 2010 UT 21, ¶ 12, 230 P.3d 1022
(cleaned up); see also Utah R. Civ. P. 56(a). We therefore review
the district court’s grant of summary judgment to Mapleton for
correctness.
ANALYSIS
¶11 	LDIII 	searches 	for 	a 	legal 	means 	to 	increase 	its
developmental 	density 	rights 	through 	either 	the 	Original
4. The parties also dispute whether LDIII was time-barred from
asserting 	its 	rights 	and 	whether 	the 	Preserve 	(LDIII’s
predecessor in interest) waived its rights under the Original
Agreement. 	Because 	we 	conclude 	that 	the 	zoning 	rights
Suburban 	and 	the 	Preserve 	enjoyed 	under 	the 	Original
Agreement were not passed on to LDIII, we have no need to
address these other arguments.

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Agreement or through the 2017 rezoning of the Property and a
claimed invalidity of the voter referendum. We address these
issues in turn.
I. The Original Agreement
¶12 	The district court ruled that any rights under the Original
Agreement “did not survive [LDIII’s] foreclosure proceedings.”
We agree. “As with any contract, we determine what the parties
have agreed upon by looking first to the plain language within
the four corners of the document.” Peterson & Simpson v. IHC
Health Services, Inc., 2009 UT 54, ¶ 13, 217 P.3d 716. “When
interpreting the plain language, we look for a reading that
harmonizes the provisions and avoids rendering any provision
meaningless.” 	Id. 	(cleaned 	up). 	“Harmonizing 	conflicting 	or
apparently ambiguous contract language before concluding that
provisions are actually ambiguous is an important step in the
hierarchy of rules for contract interpretation.” Gillmor v. Macey,
2005 	UT 	App 	351, ¶ 	19, 	121 	P.3d 	57. “When 	the 	contract
provisions are clear and complete, the meaning of the contract
can 	appropriately 	be 	resolved 	by 	the 	court 	on 	summary
judgment.” Basic Research, LLC v. Admiral Ins. Co., 2013 UT 6, ¶ 5,
297 P.3d 578 (cleaned up); see also McEwan v. Mountain Land
Support Corp., 2005 UT App 240, ¶ 16, 116 P.3d 955 (“If language
within the four corners of the contract is unambiguous, the
parties’ intentions are determined from the plain meaning of the
contractual language, and the contract may be interpreted as a
matter of law.” (cleaned up)).
¶13 	Having applied these fundamental steps in our review of
the 	Original 	Agreement, 	we 	conclude 	that 	the 	Original
Agreement did not confer zoning rights to LDIII, and the rights
enjoyed by Suburban and the Preserve did not run with the land
to LDIII. For a covenant to run with the land, as opposed to
being a personal covenant, four elements must be met: “(1) the
covenant must touch and concern the land affected by the
covenant, (2) the original parties to the covenant must have
expressly or impliedly intended the covenant to run with the

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land, (3) there must be privity of estate, and (4) the covenant
must be in writing.” Stern v. Metropolitan Water Dist. of Salt Lake
& Sandy, 2012 UT 16, ¶ 40, 274 P.3d 935 (cleaned up).
¶14 	Here, the second element—intent that the covenant run
with 	the 	land—was unambiguously 	absent 	under 	the 	plain
language of the Original Agreement. Indeed, the original parties
specifically limited the extent to which the covenants might run
with the land. Section 10 described the contractual rights to be
“personal” to Suburban. Section 10 also specifically stated that
the rights “shall only run with the land so long as Owner or a
company which is affiliated with or under common ownership
and control of Owner shall own and be the Owner of the
Property” or “[o]nly upon the express prior written approval by
the City, shall any rights of Owner with respect to the portion of
the Property being sold be deemed transferred to the new owner
thereof.” Thus, this plain language dictated that LDIII meet the
affiliated-ownership 	requirement 	or 	the 	city-approval
requirement for the zoning rights to pass contractually.
¶15 	LDIII does not assert that it meets either requirement.
Rather, LDIII argues that its predecessors’ contractual rights ran
with 	the 	land 	and 	cites various provisions of 	the 	Original
Agreement—Sections 2, 6, 19, and 21—that it claims at least
create an ambiguity about whether the rights under the Original
Agreement ran with the land. We disagree. “A contract term is
not ambiguous simply because one party ascribes a different
meaning to it to suit his or her own interests.” Basic Research,
LLC, 2013 UT 6, ¶ 10 (cleaned up). This court faced a similar
situation in Gillmor. There, the contract stated, “in several places,
that 	the 	grants 	and 	limitations 	in 	the 	[a]greement 	[we]re
appurtenant to the land and r[a]n with the land to future
successors 	in 	interest.” 	Gillmor, 	2005 	UT 	App 	351, 	¶ 	17.
However, “the [a]greement also detail[ed] a specific and limited
class 	of 	individuals 	who 	[we]re 	to 	be 	benefitted 	by” 	the
provisions of the contract. Id. This court explained that the
“specificity of the provision granting access to ‘Gillmor and his
immediate family to the first degree of consanguinity, and their

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20190090-CA 	9 	2020 UT App 41
spouses and children,’ undermine[d] any notion that this benefit
[wa]s somehow intended to run with the land to the benefit of all
future owners of the Gillmor property.” Id. (emphasis added)
(cleaned up). Thus, like the contract in Gillmor, the Original
Agreement expressly limited the manner in which the rights
would pass (ownership-affiliated or city-approved parties)—
classes to which LDIII indisputably does not belong.
¶16 	Although other provisions of the Original Agreement,
including 	Sections 	19 	and 	21, 	indicate 	that 	the 	Original
Agreement will generally “be binding on the successors and
assigns” of Suburban, and that it should be “recorded . . . as a
covenant 	running 	with 	the 	Property 	. 	. 	. 	in 	order 	to 	put
prospective purchasers . . . on notice as to the terms and
conditions hereof,” Section 10 explicitly specifies the conditions
under which the contractual rights, including zoning rights,
would run with the land. None of the provisions LDIII cites
contradicts Section 10; instead, they merely elaborate how the
Original 	Agreement 	operates. 	For 	instance, 	Section 	21 	was
intended 	to 	put 	“parties 	on 	notice 	as 	to 	the 	terms 	and
provisions” of the Original Agreement—one of those provisions
being Section 10. And Section 19 is best read as a general
indication that the obligations of the Original Agreement would
be binding on future owners of the Property. Moreover, that
provision twice refers to an “approved sale or transfer” of the
Property, indicating that it can 	be read harmoniously with
Section 	10 	and 	indicating 	that 	the 	drafters 	of 	the 	Original
Agreement clearly intended that Mapleton approve any new
owners.5 In short, we do not see the provisions listed by LDIII as
5. What’s more, Section 2’s language that “the Property shall be
the recipient of the density transferred from” the sending site—
Mapleton’s TDR-S portion of the Property—was included to
reflect the intent to apply a TDR-R overlay to the Property, not to
grant 	TDRs 	to 	the 	Property 	itself. 	This 	is 	clear 	from 	later
language in Section 2 itself specifically granting to Suburban—as
opposed to the Property—a specified number of “density units,”
(continued…)

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raising an ambiguity about whether Mapleton had to approve
any new owner of the Property for the rights under the Original
Agreement 	to 	pass. 	The 	city-approval 	requirement 	is
unambiguously a part of the Original Agreement, and LDIII
indisputably never received Mapleton’s approval.
¶17 	And while all the provisions of the Original Agreement
can be read harmoniously under the interpretation advanced by
Mapleton, Section 10 would be rendered meaningless by LDIII’s
reading. Section 10 expressly provides that rights under the
Original Agreement run with the land only where Suburban or a
company affiliated with Suburban owns the Property, or where
Mapleton 	provides 	“express 	prior 	written 	approval” 	of 	the
transfer of any of the Owner’s rights—including TDRs—to a
new owner. Section 10 also expressly allows the City to withhold
approval. LDIII’s reading—that the zoning rights run with the
land 	no 	matter 	what—renders 	all 	these 	express 	provisions
without effect. Rather than an express or implied intention that
the terms of the Original Agreement would run with the land,
Section 10 provides an unambiguous intention that, without
express consent in writing, they do not.
¶18 	Accordingly, 	because 	the 	Original 	Agreement 	is 	not
ambiguous, and because there is no genuine dispute as to the
lack of Section 10’s requirements being met, we affirm the
district court’s ruling that the zoning rights under the Original
Agreement did not pass to LDIII. See Basic Research, LLC, 2013
UT 6, ¶ 5.
II. Validity of the Referendum
¶19 	Even if LDIII has no rights stemming from the Original
Agreement, LDIII claims that the Property nevertheless bears its
(…continued)
i.e., TDRs. And we see no ambiguity arising from Section 6 of the
Original Agreement either.

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desired zoning by virtue of the 2017 Mapleton city council
decision—which was made independent of any rights under the
Original Agreement—to rezone the Property. LDIII correctly
notes that the 2017 decision gave it the rights it sought, but that
decision was erased by a subsequent citizen referendum. LDIII
takes issue with the validity of that citizen referendum, claiming
that it was invalid because the 2017 rezoning was “an individual
property zoning decision” and thus not legislative and not
subject to a referendum. This issue indeed turns on whether the
rezoning of the Property was legislative or administrative. Krejci
v. City of Saratoga Springs, 2013 UT 74, ¶ 21, 322 P.3d 662
(“[W]hen a city council exercises its legislative authority, voters
retain the constitutional prerogative of challenging its decisions
by referendum. But where the city council is acting pursuant to
its administrative authority, the voters have no such right.”).
However, LDIII is incorrect that the rezoning of the Property
was not legislative. See id. ¶ 38.
¶20 	In 	Krejci, 	our 	supreme 	court 	held 	that 	“site-specific
rezoning [is] a legislative act—and thus subject to referendum.”
Id.6 In so holding, the court explained that site-specific zoning is
legislative because it “requires the weighing of broad, competing
policy 	considerations 	and 	results 	in 	a 	law 	of 	general
applicability”—the “chief hallmarks of legislative action.” Id.
¶¶ 22, 	31 	(cleaned 	up). 	Nevertheless, 	LDIII 	wields the 	two
6. 	LDIII’s 	argument 	that 	the 	referendum 	was 	statutorily
prohibited by then-section 20A-7-101(13) of the Utah Code, now-
section 20A-7-101(15)(b), was specifically rejected by the court in
Krejci. The court explained that although “site-specific rezoning
decisions are statutorily ineligible for referendum under the
terms of this provision[,] . . . the people’s power to legislate is not
a creature of statute. It is inherent power—authority reserved by
the people in our constitution. So the legislature’s failure to
delegate referendum power is not the end of the inquiry.” Krejci
v. City of Saratoga Springs, 2013 UT 74, ¶ 24, 322 P.3d 662; see also
Utah Const. art. VI, § 1.

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referendum holdings in Baker v. Carlson, 2018 UT 59, 437 P.3d
333, in an attempt to stave off Krejci’s holding and to show that
the rezoning was not legislative and therefore not referable. But
Baker’s holdings do not shed further light on the case at hand.
Neither decision was a zoning change. Rather, one dealt with
amending a site development plan, which was held to be a
legislative action, and the other was related to amending an
agreement for the development of land, which was held to be an
administrative action. Id. ¶¶ 39–40. Thus, LDIII’s focus on the
holdings in Baker is unhelpful in resolving this case, which
involves a site-specific rezoning.7
¶21 	In 	short, 	our 	analysis 	begins 	and 	ends 	with 	Krejci’s
holding. Based on it and the undisputed facts of this case, we
affirm the district court’s conclusion that the referendum was
valid.
CONCLUSION
¶22 	Because 	the 	district 	court’s 	conclusions 	of 	law 	were
correct—entitling Mapleton to judgment as a matter of law—and
there are no genuine disputes as to any material facts, we affirm
the district court’s entry of summary judgment in favor of
Mapleton.
7. Indeed, in Baker, the supreme court cited Krejci with approval,
setting forth its holding that “even though it would only affect
one piece of property, a site-specific rezoning was generally
applicable” and therefore subject to referendum “because all
present and future owners of the site would be bound by the
decision to rezone the property.” Baker v. Carlson, 2018 UT 59,
¶ 16, 437 P.3d 333 (citing Krejci, 2013 UT 74, ¶ 32).