Casco LLC v. McDonald's Real Estate Co.
666 F. App'x 743
| 10th Cir. | 2016Background
- In 2002 Casco and JB’s recorded a Declaration covering Lots 4–6 that created (a) covenants requiring Casco to install a new parking lot and garbage receptacle "prior to" removing existing ones, and (b) perpetual easements for access, signage, and reciprocal parking. Casco drafted the Declaration.
- Casco never redeveloped the property; it owned and used its portion but did not install the new parking or dumpster for 11 years.
- McDonald’s purchased Lot 5 in 2013, redeveloped the lot (new restaurant, relocated dumpster and a storage shed, removed two parking spaces, and installed a larger sign). McDonald’s never blocked the access easement and did not deny parking to Casco employees/guests.
- Casco sued for declaratory relief, specific performance (forcing reconfiguration/relocation and reduction of McDonald’s sign), and damages; McDonald’s counterclaimed that the Declaration was indefinite and that Casco breached and lost rights.
- The district court held the Declaration enforceable, found Casco materially breached and therefore lost its contractual and property rights under the Declaration. The Tenth Circuit affirmed breach findings as to the parking and dumpster covenants, but reversed the termination of easement/property rights and remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument (Casco) | Defendant's Argument (McDonald’s) | Held |
|---|---|---|---|
| Enforceability of the Declaration given no time for performance | Declaration is sufficiently definite; omission of a time term was intentional and does not void the agreement | Silence as to time makes the Declaration indefinite and unenforceable | Held enforceable; Wyoming law implies a reasonable time for performance when none is stated |
| Whether the New Parking Lot and Garbage Receptacle provisions create obligations or optional rights | Provisions confer rights to act (optional) and do not impose an absolute duty to construct/relocate | Provisions use mandatory language (“shall”) and impose obligations to install new facilities before removing old ones | Held they impose obligations; Casco breached by failing to perform for 11 years |
| Remedies/Effect of breach on contractual relief (redevelopment, removal of McDonald’s structures) | Casco seeks specific performance to reconfigure parking, relocate dumpster and remove shed, and force sign reduction | McDonald’s contends Casco’s delay and breach preclude specific performance; laches and prejudice bar enforcement | Held Casco cannot alter parking, remove McDonald’s dumpster or shed, and laches bars enforcement of contractual rights tied to the exhibits; specific performance denied as to those matters |
| Whether breach extinguished easements/property rights created by the Declaration | Breach terminates Casco’s property rights under the Declaration | Breach does not terminate easements; easements are property interests not extinguished by mere contractual breach | Held breach did not terminate the access, sign, and parking easements; Casco retains easement/property rights and case remanded to define scope |
Key Cases Cited
- Osborne v. Baxter Healthcare Corp., 798 F.3d 1260 (10th Cir.) (standard of review for summary judgment)
- Fox v. Transam Leasing, Inc., 839 F.3d 1209 (10th Cir.) (treatment of cross-motions for summary judgment)
- Roussalis v. Wyo. Med. Ctr., Inc., 4 P.3d 209 (Wyo. 2000) (contract must be sufficiently definite to ascertain terms)
- Baker v. Speaks, 177 P.3d 803 (Wyo. 2008) (where no time is specified, law implies reasonable time)
- Reed v. Wadsworth, 553 P.2d 1024 (Wyo. 1976) (implying reasonable time when contract is silent)
- Brumbaugh v. Mikelson Land Co., 185 P.3d 695 (Wyo. 2008) (distinction between covenants and easements; covenants as promises regarding land use)
- Wimer v. Cook, 369 P.3d 210 (Wyo. 2016) (interpret covenants with contract principles)
- Seven Lakes Dev. Co. v. Maxson, 144 P.3d 1239 (Wyo. 2006) (easements create property rights)
- Reynolds v. Tice, 595 P.2d 1318 (Wyo. 1979) (elements of breach: enforceable contract, unjustified failure to perform, entitlement to damages)
- G.C.I., Inc. v. Haught, 7 P.3d 906 (Wyo. 2000) (what is a reasonable time is a question of fact)
- Olsen v. Kilpatrick, 161 P.3d 504 (Wyo. 2007) (interpretation from four corners when language is clear)
- Lozier v. Blattland Invs., LLC, 100 P.3d 380 (Wyo. 2004) (apply contract construction principles to interpret easements)
- Davidson Land Co., LLC v. Davidson, 247 P.3d 67 (Wyo. 2011) (merger as a method to terminate easement)
- Stephens v. Lavitt, 239 P.3d 634 (Wyo. 2010) (misuse can terminate easement)
- Mueller v. Hoblyn, 887 P.2d 500 (Wyo. 1994) (adverse possession/abandonment and easements)
- Carney v. Bd. of Cty. Comm’rs, 757 P.2d 556 (Wyo. 1988) (abandonment as means to extinguish easement)