Simmons Media Group, LLC v. Waykar, LLC
2014 UT App 145
Utah Ct. App.2014Background
- In 1991 Wayne McBride renewed a billboard lease (the "renewed lease") described imprecisely as "500 West 2000 South," which included a right of first refusal (ROFR) triggered if the lessor decided to sell the premises and received a third-party offer.
- In 1996 Karen and Wayne formed Waykar, LLC and transferred the land (the Property) to Waykar; Wayne later relinquished his interest after a divorce.
- The Underland Group assigned the lease to Simmons Media Group, which operated the billboard and paid rent; Waykar (and Karen) cashed Simmons’s rent checks after formation of Waykar.
- In 2002 Karen entered a Lease with Option to Purchase with the Evanses (granting them an exclusive purchase option and crediting rent toward purchase); Waykar did not notify Simmons or offer Simmons the ROFR.
- In 2005 Karen and her father sold Waykar (and the Property) to entities owned by the Evanses; Simmons later sued for breach of the ROFR. The district court granted partial summary judgment for Simmons (lease valid, applies to Property, ROFR breached) and ordered specific performance with a purchase-price adjustment for lost profits; the court also awarded Simmons fees on appeal for Waykar’s deficient briefing.
Issues and Key Arguments
| Issue | Plaintiff's Argument (Simmons) | Defendant's Argument (Waykar) | Held |
|---|---|---|---|
| Motion to dismiss — sufficiency of complaint | Complaint alleged lease, payments, ROFR, and transfer without offering ROFR; states a colorable claim | Lease description mismatch (wrong address) defeats claim as matter of law | Denial of dismissal affirmed: complaint pleaded elements and lease attached; facts assumed for 12(b)(6) review |
| Rule 56(f) relief / stay of Waykar’s SJ motion | Court properly granted Simmons additional discovery under Rule 56(f) | Court improperly stayed/denied Waykar’s summary-judgment motion | Affirmed: court granted 56(f) relief (not denial of SJ) and did not abuse discretion |
| Validity and applicability of the renewed lease; ratification | Renewed lease governs the Property; Waykar ratified Wayne’s act by cashing checks and Wayne’s knowledge binds Waykar | Lease invalid because Wayne lacked authority; address misstates Property so lease doesn’t govern | Affirmed: lease valid (ratified by conduct); the ‘‘500 West 2000 South’’ shorthand unambiguously identified the Property; ROFR applied and was breached (both 2002 Lease/Option and 2005 sale triggered ROFR) |
| Procedural timing and reentry of partial SJ under rule 7(f) | (implicit) no prejudicial error | Entry was premature and procedural error | Not reviewed substantively: Waykar’s briefing inadequate; any procedural error cured when court vacated, reconsidered, and reentered order |
| Remedies — specific performance, price calculation, offsets for lost profits | Specific performance appropriate; offset lost net profits against price to account for time-value and lost earnings | Specific performance improper; purchase price and offsets erroneous (e.g., $488k v. $498k, gross vs net profits) | Affirmed: district court did not abuse discretion; Waykar failed to marshal record and omitted evidence supporting findings (including witnesses’ own testimony) |
| Appellate attorney fees for deficient briefing | Seek fees under Utah R. App. P. 24(k) (and 33) because Waykar’s brief was inaccurate, burdensome, and caused extra work/delay | Fees baseless | Awarded: appellate fees awarded under Rule 24(k); remanded to determine amount |
Key Cases Cited
- Turner v. Staker & Parson Cos., 284 P.3d 600 (Utah 2012) (standard of review for motions to dismiss)
- Brown v. Glover, 16 P.3d 540 (Utah 2000) (district court’s discretion on Rule 56(f))
- Orvis v. Johnson, 177 P.3d 600 (Utah 2008) (summary judgment review — view facts in light most favorable to nonmoving party)
- Bradshaw v. McBride, 649 P.2d 74 (Utah 1982) (principles of ratification and conduct implying assent)
- Jensen v. IHC Hosps., Inc., 82 P.3d 1076 (Utah 2003) (agent’s knowledge imputed to principal)
- Brown's Shoe Fit Co. v. Olch, 955 P.2d 357 (Utah Ct. App. 1998) (essential terms of a lease — identity of property)
- Ockey v. Lehmer, 189 P.3d 51 (Utah 2008) (effect of ratification on voidable contracts)
- Crossland Savings v. Hatch, 877 P.2d 1241 (Utah 1994) (cured procedural errors and prejudice analysis)