A state court jury has found the national law firm Stoel Rives and the chair of its real estate and construction practice group, Salt Lake City-based partner Thomas A. Ellison, were negligent and mishandled a land use and development rights application for a 8,650-acre cattle ranch near Park City (Third Judicial District Court for Salt Lake County, Utah /100907407).
The jury deliberated for 6 hours following a 14-day trial before reaching a verdict on June 28 saying Ellison and Stoel Rives were negligent and that the 910 Cattle Ranch, owned by landowner David Bernolfo, declined in value by $21.4 million after Summit County amended its development code and reduced by 40 percent the number of units that could be built on the property. The verdict placed 60 percent of the blame for the lost value on Ellison and his firm and 40% on Bernolfo, which reduces the ranch owner’s recovery to $12.8 million (Third Judicial District Court for Salt Lake County, Utah /100907407).
The 13.5 square mile ranch, just north of the Jeremy Ranch exit on Interstate 80 in Summit County, is about 25 minutes from downtown Salt Lake City and about 15 minutes from downtown Park City.
“It is the single largest piece of developable private property in the area,” said Michael T. Mihm, of the Denver-based law firm Ogborn Mihm, who represented Bernolfo and tried the case with his partner Michael J. Ogborn, “It is a gorgeous property with spectacular views and a great location. Unfortunately, after losing 40% of the density rights, it no longer makes financial sense to develop the property.”
Mihm and Ogborn were assisted at trial by Bernolfo’s Utah attorney, Dorothy Pleshe of Lewis Hansen Waldo Pleshe & Flanders. Stoel Rives and Ellison were defended by Thomas A. Karrenberg, of Anderson & Karrenberg.
According to court documents Bernolfo wanted to have the land developed into a luxury residential community that preserved the wildlife and environmental components of the land. He intended to donate proceeds from the sale of the ranch to the David W. Bernolfo Memorial Foundation which supports vision, eye care and related medical purposes or to the University of Utah.
The trial before state District Court Judge Paul Maughan followed Bernolfo’s accidental discovery in 2008 that Ellison and Stoel Rives had done nothing to monitor the county’s efforts to amend the code to limit development rights and protect 910 Cattle Company, the company which filed the lawsuit and is 100 percent owned by Bernolfo (Third Judicial District Court for Salt Lake County, Utah /100907407).
Before that, Ellison and Stoel Rives filed a development plan that trial testimony showed was unlikely to be approved. Testimony also showed the firm and lawyer failed to protect the land’s vested development rights, which they could have easily done, as several days after the county learned of Bernolfo’s plans, the county began to pursue additional code changes that would further reduce the density available on the ranch. Trial testimony of witnesses and experts showed that after Ellison and the law firm learned of the loss of density rights, they failed to inform Bernolfo of his situation.
In closing arguments, Mihm told the jury 910 Cattle Company’s damages were $21.36 million that being the difference between the appraised market value of the ranch entitled with development rights for 116 units, the density legally permissible in 2005 and 2006 before the county code was amended, and the current appraised market value.