Judge Tells PCMR To Pay $17.5 Million Bond

 

 

Oh Joy! We get to wait…again. It wouldn’t be a telenovela without a cliffhanger and the lawsuit between Park City Mountain Resort and Talisker Landholding LLC. wouldn’t be the biggest eviction case in the history of Utah without yet another delay.

Judge Ryan Harris ruled in 3rd District Court of Summit County this afternoon that PCMR will need to post a $17.5 million dollar bond if they wanted to operate this 2014/15 ski season. Instead of writing a check, paying, or filing for a surety bond right then and there, PCMR has a week to decide what they will do. “We need to post or advise the court [that they won’t be posting a bond],” said PCMR attorney Alan Sullivan. “We’re hopeful that there will be a ski season. That’s our objective. I will confer with my clients and comply with the court’s deadline.” Sullivan tap-danced around the questions of whether they would put up the bond and what he thinks of the judge’s decision.

The bond amount was tied to an estimate of PCMR’s annual rent but the two sides have been feuding (and mediating) over what that figure should be. Harris stipulated that none of his math is factual and that ultimate figures would be determined by factfinders such as an appellate judge, the jury or the parties themselves.

“The plaintiffs don’t have a right to remain on the land for free,” said Harris. The stay on his eviction is conditioned on the bond- an amount that should cover actual damages over the next ski season. He stated that the bond amount would include treble the damages as common in other landlord/tenant cases. “The amount is not punitive,” he said. “It exists to encourage a recalcitrant holdover tenant to vacate.”

As to the actual bond amount that PCMR needs to pay, it fell closer to what PCMR had proposed at last week’s hearing; an amount significantly less than Talisker’s $124 million request. The Judge said determining a value for the bond was “a difficult thing to do in this case.” He had to make a guesstimate as to the value of the PCMR land that Talisker owns then calculate what the rent would be based on that figure.

“Ski property doesn’t grow on trees,” said Harris. “[PCMR] is unique in and of itself.” He said you would need to determine what the property would lease for on the open market and factor in that the base and ski hill are divided. “The bond doesn’t need to be big enough so that the defendant can collect on the entire judgment. It only needs to cover damages that occur in the future as result of the plaintiff remaining on the property,” explained Harris.

With that said, he started with the $57.8 million value Vail proposed in their federal filings for the fair market value of the land then multiplied it by a capitalization rate of 10 percent to arrive at a rental price of $5.2 million per year. He then tripled that and included prejudgment interest and attorneys fee and ruled that PCMR needs to pay $17.5 million by next Friday or vacate.

He included a provision to extend the bond for another year to “make sure we don’t wind up back here. This is a ski town and folks need to know what’s going to happen.” The bond will remain in effect until April 30, 2015, and PCMR may extend the stay on the eviction to April 2016, if they pay an additional $19 million bond by March 2, 2015. “At some point the case will become final and we’ll need to discuss the posting of an appellate bond and that would be a much bigger amount than I am requiring now,” said Harris. “We’ll take this on a season by season basis until the case becomes final.”

The Judge also scheduled a telephone conference for 10:30 a.m. on September 30 to discuss a date for the appeal and whether PCMR still wants a jury trial. Let’s just hope that PCMR marked those dates in their calendar with a Sharpie this time.

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