The attorneys engaged in a technical discussion in front of 3rd District Court Judge Ryan Harris that touched on numerous topics related to leases, renewals and legal precedents.
The Thursday hearing dealt with important motions from both sides. PCMR wants Harris to reconsider his earlier ruling that the resort was required to strictly comply with the terms of the leases. Talisker Land Holdings, LLC, meanwhile, wants the judge to find that it was not the firm's fault that PCMR did not renew the leases on time and that it did not waive the lease requirements for an extension.
Harris told the attorneys at the end of the hearing he was not sure when he would make his rulings. He said he typically wants to make rulings within 60 days of a hearing, but the timeline could be extended in this case.
Some of the arguments about strict compliance with the terms of the leases focused on a landlord-tenant dispute that unfolded more than a decade ago in Park City, pitting the outdoors store White Pine Touring against its landlord at the time, a firm known as Utah Coal and Lumber. In that case, White Pine Touring did not provide written notice of its intention to renew its lease for a building on Heber Avenue. The case wound its way to the Utah Supreme Court. White Pine Touring, now located just off Bonanza Drive, was forced out of the space.
Alan Sullivan, who is PCMR's lead attorney, said the case involving White Pine Touring "makes no sense here." He said the case should not be seen as a precedent in the PCMR-Talisker Land Holdings, LLC dispute. Sullivan argued there is much more at stake in the current case than was at stake in the earlier one. He noted the public interest of the PCMR case, the possible damage to people and businesses and that a new tenant on the PCMR terrain could not operate a mountain resort on the land. Sullivan also said $100 million worth of improvements to PCMR differentiates the case from the one involving White Pine Touring. Sullivan was White Pine Touring's attorney as well.
Sullivan said an "administrative mistake, at most" caused the dispute between PCMR and Talisker Land Holdings, LLC, referring to the resort's failure to properly renew its leases in 2011.
"The punishment doesn't fit the crime," Sullivan said.
He also argued Talisker Land Holdings, LLC was not harmed by the PCMR side's failure to renew the leases on time, but there could be disastrous consequences to the resort and the wider Park City community if the case is lost.
Howard Shapiro, one of the attorneys representing Talisker Land Holdings, LLC, countered that the White Pine Touring-Utah Coal and Lumber case is consistent with a century of rulings regarding strict compliance with a requirement of written notice of a lease renewal.
"That is not to be excused," Shapiro said.
Shapiro told Harris the court is "bound" by the earlier case. Shapiro disagreed with Sullivan's assertion about the importance of the stakes in the PCMR-Talisker Land Holdings, LLC case. He said such a claim is "unfounded." He said the PCMR side wants the judge to help it out of a jam that it created.
The sides, meanwhile, also debated Talisker Land Holdings, LLC's assertion that the firm was not responsible for PCMR not renewing the leases. Shapiro told the judge the PCMR side has essentially admitted it was a mistake. It was "a miss," Shapiro said, referring to deposition testimony by John Cumming, the CEO of PCMR parent Powdr Corp. Cumming was in the audience on Thursday in a rare courtroom appearance. Jenni Smith, the president and general manager of PCMR, was also there.
"The leases themselves are clear and unambiguous," Shapiro said, adding that Cumming had testified in a deposition that some sort of action was needed to renew them.
Shapiro said PCMR has described the situation with the renewal as an honest mistake at some points and at other points has said the leases were renewed verbally, there was an automatic renewal or there was substantial compliance with the renewal requirements. He said it was the PCMR side, not the Talisker Land Holdings, LLC one, that needed to track the renewal requirements.
"They have negligently slaughtered the goose that's been laying their golden eggs for decades," Shapiro said.
Bruce Meyer, one of the PCMR side's attorneys, argued that there was a common understanding that the leases would be extended until 2051. He said Cumming and Jack Bistricer, the chief of the Talisker corporate family, would joke about how old they would be when the leases expired.
He said Talisker Land Holdings, LLC did not realize the notice to extend the leases was required or the firm understood the terms but did not confront PCMR until it was beneficial to its side. Meyer also acknowledged that Talisker Land Holdings, LLC did not indicate PCMR was not required to renew the leases.
"It can be implied by conduct," he said.
The two sides are scheduled for another court date in front of Harris on Tuesday to debate PCMR's claim that it was denied a right of first refusal when Talisker Land Holdings, LLC reached an agreement with Vail Resorts to operate Canyons Resort. The agreement would be extended to include the disputed terrain at PCMR if Talisker Land Holdings, LLC wins the case.