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Attorney Sheds Light on PCMR, Talisker Lawsuit

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Attorney and Skiing Business contributor David B. Cronheim sheds some light on the recently filed Park City Mountain Resort/Talisker lawsuit. Here’s what he had to say:

“In its complaint, Park City Mountain Resort seeks several forms of relief relating to two tracts of land it leases from Talisker and on which PCMR operates a large portion of the ski resort. The main thrust of PCMR’s argument is that although it did not enter into a formal lease extension for either tract, the parties’ actions demonstrate that PCMR exercised its right to extend the leases until 2051.”

cronheim

David Cronheim

“The method by which PCMR is seeking to obtain a decision as to whether it extended the lease is a declaratory judgment. Plaintiffs normally seek declaratory judgments when a question exists as to their rights or duties. Declaratory judgments are intended to clarify the positions of adverse parties without forcing either party to expose itself to additional losses. In this case, PCMR argues that it is entitled to a declaratory judgment because: (1) it did provide adequate notice pursuant to the leases; (2) even if it did not provide adequate notice under the leases, Talisker either waived its right to object or should be estopped (prevented) from objecting; or (3) that equity demands that the failure to provide written notice should be excused because PCMR made an “honest mistake” that could cost it over $100M. PCMR also asks the court for an injunction preventing Talisker from evicting PCMR from the land which is the subject of the two leases until the case is complete.”

“If the court does not grant the declaratory judgment in PCMR’s favor, the resort’s fallback positions are that Talisker either fraudulently/negligently failed to disclose it intentions with regard to the leases or that Talisker breached its duty of good faith and fair dealing. PCMR seeks damages of over $7M – the cost of the infrastructure improvements made after the expiration of the leases. However, these claims are last resorts.  In all likelihood, PCMR would much prefer the declaratory judgment that the lease was extended. The other claims are less likely to succeed.”

“Both Talisker and PCMR are sophisticated parties who obviously had copies of the leases. Both are chargeable with knowledge of the covenants contained therein.  PCMR’s complaint all but concedes it failed to give the required formal written notice of its intention to extend the leases prior to their expiration. If this is the case, PCMR made a major and inexcusable mistake. Before commencing $7M worth of infrastructure improvements, it should have been 100% certain that the Talisker tracts were still under lease. That said, PCMR has highlighted the inference that Talisker’s ownership of nearby Canyons Resort led it to deal underhandedly with PCMR in an effort to damage its major competitor.  The court might be sympathetic to the argument that Talisker strung PCMR along with the intention of pulling the rug out from underneath them or otherwise wreaking havoc on PCMR’s operations. Either way, animosity between Talisker and PCMR is certainly not good for the Utah ski industry as a whole, particularly at a time when the state legislature is pushing a plan to link the seven Park City and Cottonwood Canyons resorts. Such an ambitious plan requires cooperation, not litigation.”

(David B. Cronheim, Esq. is an attorney at Norris, McLaughlin & Marcus, PA in Bridgewater, N.J. and a Skiing Business contributor. For more information, contact him at DBCronheim@nmmlaw.com.)

Categories: Newswire

7 Responses to “Attorney Sheds Light on PCMR, Talisker Lawsuit”

  1. tom says:

    David, thank you for your insight. We visit PCMR yearly, and currently have a condo booked for the 2013 season. We certainly hope PCMR and Talisker can resolve their differences and PCMR is allowed to operate as it has before. At the very least, we hope they can come to some timely conclusion so we, and many others I suspect, can plan accordingly. Look forward to any other opinion you care to share.

    • Pam says:

      Hi Tom
      I stayed in PC and skied for 4 weeks last year and dearly love to repeat the experience till we are too old to downhill ski. As we live in Australia I am finding it infuriating in getting information. Do you have a failsafe method of checking what the hell IS happening with this courtcase (on a regular basis) otherwise booking to come half way round the world will be TOO late

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