ASC Utah, Inc. v. Wolf Mountain Resorts, L.C.
245 P.3d 184
Utah2010Background
- Wolf Mountain and ASCU entered a Ground Lease for The Canyons in 1997, with rent, development duties, and an exclusive option to transfer title to ASCU.
- In 1999 the SPA Agreement amended development plans for The Canyons; ASCU invested heavily while disputes persisted.
- In 2006 Wolf Mountain issued a Default Notice; ASCU sued for declaratory relief and obtained a preliminary injunction; the matter evolved into extensive litigation.
- From 2006 to 2009 there was extensive discovery, including thousands of document requests and dozens of depositions; a special master assisted with discovery.
- In March 2009 the district court denied Wolf Mountain’s motion to add new parties; three years into the suit, Wolf Mountain first moved to compel arbitration under the SPA’s Arbitration Provision.
- Wolf Mountain contends the district court lacked jurisdiction to consider waiver under Utah Code 78-31a-4, while ASCU contends the court can evaluate waiver consistent with Chandler; the court later held Wolf Mountain waived arbitration rights.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether district court had jurisdiction to find waiver under 78-31a-4 | ASCU argues the court has jurisdiction under 78-31a-4 to address waiver | Wolf Mountain argues 78-31a-4 is mandatory/jurisdictional and precludes waiver | Yes; court has jurisdiction and 78-31a-4 is not mandatory/jurisdictional |
| Whether Utah Arbitration Act abrogates equitable contract principles | ASCU argues equitable principles still apply to enforce waiver | Wolf Mountain argues Act overrides such principles | No; equitable principles remain applicable and waiver can be determined via Chandler |
| Whether the district court properly applied Chandler's two-part waiver test | ASCU asserts proper application of Chandler's test | Wolf Mountain contends test was misapplied or inapplicable | Yes; district court properly applied Chandler’s two-part framework |
| Whether Wolf Mountain's litigation participation prejudiced ASCU | ASCU argues extensive discovery and litigation prejudice would result in arbitration | Wolf Mountain argues no prejudice or timely arbitration rights | Yes; prejudice and extensive litigation support waiver |
| Effect of the SPA’s No Waiver Provision on waiver | ASCU argues no-waiver clause does not bar waiver | Wolf Mountain asserts no-waiver provision preserves rights | No; no-waiver provision can be overridden by waiver through conduct |
Key Cases Cited
- Chandler v. Blue Cross Blue Shield of Utah, 833 P.2d 356 (Utah 1992) (waiver through substantial participation in litigation)
- Central Florida Investments, Inc. v. Parkwest Assocs., 40 P.3d 599 (Utah 2002) (two-part test for arbitration waiver; participation and prejudice)
- Sosa v. Paulos, 924 P.2d 357 (Utah 1996) (equitable doctrines may bar arbitration)
- Smile Inc. Asia Pte. Ltd. v. BriteSmile Management, Inc., 122 P.3d 654 (Utah Ct. App. 2005) (illustrates partial litigation indicating intent to arbitrate)
- Living Scriptures, Inc. v. Kudlik, 890 P.2d 7 (Utah Ct. App. 1995) (no-waiver provisions considered among factors in waiver)