LDS Development, LLC v. City of Eugene
280 Or. App. 611
| Or. Ct. App. | 2016Background
- Moon Mountain subdivision in Eugene involved REDG's development agreement to install water and sewer improvements and to post a bond; REDG abandoned phase 2 after phase 1.
- LDS Development purchased the property and substituted as plaintiff, seeking city to complete improvements or call the DSIC bond.
- City filed two counterclaims for declaratory relief and breach of contract, arguing LDS, as successor to REDG, must complete the improvements.
- Trial court granted summary judgment for the city on LDS’s first and second claims and for the city on its counterclaims; no written reasoning or declaration issued.
- On appeal, LDS argued city had contractual or statutory obligation to complete improvements; city argued no such obligation and that LDS was not bound.
- Court reversed in part: first two claims affirmed (no city obligation); but reversed as to city’s counterclaims, concluding LDS had no contractual duty under the development agreement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the city have a contractual or statutory obligation to complete the improvements or call the bond? | LDS: city must complete or call bond under statute and agreement. | City: no such obligation; discretion to enforce bond or construct rests with city. | No obligation; LDS's first and second claims fail |
| Is LDS the successor in interest with contractual duties under the development agreement warranting the counterclaims? | LDS: no contractual duty; not a party or assignor to the agreement. | City/DSIC: LDS as successor incurs REDG’s obligations under the agreement. | Trial court erred; LDS has no contractual duty; counterclaims reversed and remanded |
| Did the development agreement create a covenant running with the land or an equitable servitude giving rise to LDS's obligation? | LDS: not established; no encumbrance running with land. | City/DSIC: yes, covenant or servitude binds successors. | Not decided; record lacked pleadings establishing such encumbrances |
| Was the summary judgment on the city’s counterclaims properly granted given the lack of a declaratory relief declaration? | LDS: pleadings do not show only contractual successor obligation; no declaration sought for encumbrance. | City: relief warranted under implied encumbrance or contractual successor theory. | Reversed and remanded for the first two counterclaims; remaining issues affirmed |
Key Cases Cited
- Burks v. Lane County, 72 Or App 257 (1985) (declaratory judgments require discernible rights; look to pleadings if no declaration issued)
- Prosch v. City of La Grande, 14 Or App 546 (1973) (acceptance of dedication does not obligate city to construct improvements)
- Jones v. General Motors Corp., 325 Or 404 (1997) (summary judgment standard; view facts in the light most favorable to nonmoving party)
- M. K. F. v. Miramontes, 352 Or 401 (2012) (pleading framework governs relief sought and appellate review)
- Ying v. Lee, 65 Or App 246 (1983) (pleadings frame relief; review under appellate standards)
- Hucke v. BAC Home Loans Servicing L.P., 272 Or App 94 (2015) (standing and relief issues governed by pleadings and final judgments)