PCMR, in courtroom win, secures right to expand lawsuit
The 3rd District Court judge presiding over the lawsuit between Park City Mountain and Talisker Land Holdings, LLC ruled on Wednesday afternoon PCMR is able to broaden the case to claim that the resort was denied the right of first refusal on the Talisker land underlying much of the PCMR terrain.
Judge Ryan Harris also ruled that PCMR is able to add a point to the lawsuit claiming that there might have been a violation of the lease agreements between the Talisker side, which is the landowner, and PCMR when Talisker reached an agreement with Vail Resorts to operate Canyons Resort. That agreement could be expanded to include the Talisker land underlying much of PCMR depending on the outcome of the lawsuit.
The ruling, delivered at the end of a hearing that lasted nearly three hours, was a major victory for the PCMR side in a case that for months has seemed to tilt toward Talisker. The judge’s decision allows PCMR to amend the lawsuit to include the new points, but it was not a decision on the points themselves.
"It’s a real important ruling," Alan Sullivan, the lead attorney for PCMR, said in an interview afterward.
He said the redone lawsuit will also request an injunction prohibiting further transactions involving the land where PCMR operates. Sullivan said the PCMR side will likely add a party tied to Vail Resorts as a defendant as well as a firm called Flera, LLC, which controls the development rights at Canyons Resort. They will be added within seven days, he said.
The PCMR side has been interested in the details of the agreement between a firm under the Talisker umbrella and Vail Resorts since the deal was announced in late May. Under the deal, Vail Resorts leases and operates Canyons Resort with an initial term of 50 years. The Colorado firm said it put a long-term debt obligation on its balance sheet of approximately $305 million.
Sullivan said during the hearing the PCMR side wants to hold depositions with high-level people involved in the Talisker-Vail Resorts deal, including Talisker CEO Jack Bistricer and the chairman and CEO of Vail Resorts, Rob Katz. He said he wants to learn how long Talisker and Vail Resorts were in negotiations and whether the talks started prior to the date in 2011 when PCMR was required to renew its lease.
"We are entitled to know that," Sullivan said.
The lawsuit, filed by PCMR in the spring of 2012, centers on the resort’s attempt to renew the lease. The Talisker side claims the lease was not renewed.
The Wednesday hearing featured an extensive back-and-forth with the judge involving Sullivan and Daniel Beller, one of
the attorneys representing the Talisker side. They covered topics such as the idea of a right to first refusal and the arrival of Vail Resorts as they debated whether the new points should be added to the lawsuit.
Sullivan spent time talking about triggers of a right-to-first-refusal clause and said the deal with Vail Resorts was "studiously structured." He said there is "equity interest" when a firm controls a property. He said Vail Resorts "for all practical purposes" owns or controls the land underlying PCMR.
Beller, though, contended that PCMR’s bid to add points to the lawsuit should be seen as an attempt to submit a "supplemental" case based on events that occurred long after the original lawsuit was filed. He charged that it is profitable for PCMR to remain on the Talisker land as the lawsuit continues.
"It’s a completely different claim, theory, everything," Beller said.
A prepared statement issued later on Wednesday by the Talisker side offered respect to the ruling and acknowledged PCMR’s rights to file the additional points.
"This claim is completely without merit and we are confident we will prevail on it as well. The court has already dismissed substantially all of their previous claims," the statement said.
PCMR President and General Manager Jenni Smith also issued a statement afterward saying she was pleased with the ruling.
"We look forward to showing in court that Talisker violated PCMR’s rights by transferring control of the property to Vail in May 2013," Smith said. "The central legal issue in this case concerns PCMR’s rights as lessee under Utah state law. PCMR will prove that the parties expected and understood that the leases were to be extended. We will also show that Talisker, as the lessor, could not lawfully sell important parts of the leased lands, and PCMR had a right of first refusal on the sale or assignment of other portions of the leased lands."
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