Burbidge Mitchell Successfully Defends Multi-Million-Dollar Commercial Suit Involving Alleged Breach of Covenants and Restrictions Governing Draper Commercial Property

On June 16, 2019, Judge Andrew H. Stone of the Third District Court, State of Utah, entered Final Judgment in favor of Burbidge Mitchell’s clients, Hidden Valley Health Centers, LC, and Hidden Valley, LLC (collectively, “Hidden Valley Defendants”), in a matter involving alleged breach of covenants and restrictions governing commercial real estate in Draper, Utah. 

Plaintiff Kiernan Family Draper, LLC (“Kiernan”), and the Hidden Valley Defendants own adjoining parcels of real property in Draper, Utah.   The Kiernan parcel is currently occupied by a vacant commercial building, formerly a K-mart store.  The Hidden Valley parcel has an athletic club and office building, both of which were fully constructed by 2002.   The parties’ properties are subject to a certain Declaration of Covenants, Conditions and Restrictions and Grant of Easements (“CC&Rs”), entered into and recorded in 1992 (as amended).  The CC&Rs governed development and maintenance of the parties’ respective parcels. 

Plaintiff’s Complaint asserted that the Hidden Valley Defendants had insufficient parking capacity on their parcel; that Hidden Valley Defendants had allegedly failed to obtain Kiernan’s prior consent before construction of the athletic club and office building; and that the size of the athletic club was purportedly too large and in violation of the CC&Rs.  Kiernan also sought a declaratory judgment that Hidden Valley must consent to any proposed change of development plans on the Kiernan parcel, so long as the plans did not affect “traffic flow, visibility, parking upon and access to the Shopping Center.” 

Although Hidden Valley’s buildings were worth tens of millions of dollars, Kiernan sought a judicial order that Hidden Valley “reduce its building size(s).”  Kiernan also sought to enjoin all further business activity on the Hidden Valley parcel, unless and until Hidden Valley complied with Kiernan’s demands as to parking capacity and building size.  Late in the litigation, Kiernan also sought to recover $2.1 million on a claim that Hidden Valley was an “uncooperative co-contracting party” in respect of proposed changes on the Kiernan parcel.

Judge Stone dismissed several of Kiernan’s claims on a motion for summary judgment—finding the claims barred by the 6-year statute of limitations.  Later, Judge Stone dismissed Kiernan’s “uncooperative co-contracting party” claim, finding that the claim had not been properly pled and damages not properly disclosed pursuant to the Utah Rules of Civil Procedure.   Finally, Judge Stone held a bench trial on Kiernan’s action for declaratory judgment.  On hearing the testimony of the witnesses and reviewing relevant documents, Judge Stone found Kiernan’s action for declaratory judgment “unripe” and entered an order of dismissal.

In this multi-million-dollar suit, Burbidge Mitchell’s clients, the Hidden Valley Defendants, thus prevailed on every issue.  Kiernan recovered nothing.  Judge Stone ordered Kiernan to pay Hidden Valley’s attorneys’ fees and costs.  

The judgment is now on appeal.