District Court, Brigham City Department The Honorable Brandon
J. Maynard No. 160100006
Stephen Marshall and Jason R. Hull, Attorneys for Appellant
D. Boren and David P. Mooers-Putzer, Attorneys for Appellees
Judge Diana Hagen authored this Opinion, in which Judges Jill
M. Pohlman and Ryan M. Harris concurred.
In 2001, Promontory Point Land Resources LLC (PPLR) was
formed to develop a landfill in Box Elder County, Utah. As
part of this venture, Young Resources Limited Partnership
agreed to contribute real property to PPLR to serve as the
site of the landfill, subject to certain restrictions. When
the property was conveyed to PPLR, however, the warranty deed
failed to reflect those restrictions. PPLR then sold the
unencumbered property to Promontory Landfill LLC in 2004.
Nearly twelve years later, Young Resources brought this
lawsuit, which the district court dismissed as barred by the
statute of limitations and the merger doctrine. Because we
agree with the district court that Young Resources'
claims are barred by the statute of limitations, we affirm on
that basis without reaching the alternative ground for
Young Resources, Samuel N. Chournos, and Kerry Zundel formed
PPLR for the purpose of developing a landfill in Box Elder
County, Utah. They agreed that Zundel would act as manager
and provide the necessary capital, and that Chournos and
Young Resources would contribute real property that they
separately owned to serve as the site of the landfill (the
Landfill Area). Under PPLR's Operating Agreement, Zundel
did not have authority to "[e]ncumber or do anything
affecting the use of Company Property without prior consent
of all Members."
Before conveying the real property to PPLR, Young Resources
and Chournos entered into an Amended Operating Agreement with
Zundel. Young Resources and Chournos agreed to contribute
equal property acreage to PPLR for the Landfill Area,
reserving the "appurtenant water or mineral
rights." In addition, the Amended Operating Agreement
provided that Young Resources and Chournos would retain a
reversionary interest in the property, which entitled them to
the return of their property if the Landfill Area had not
been developed within five years.
To facilitate the transfer of Young Resources' property
to PPLR, Zundel provided Young Resources with a warranty deed
(the First Warranty Deed). Contrary to the terms of the
Amended Operating Agreement, the First Warranty Deed
purported to transfer all of Young Resources' interest in
the property without any reservations or conditions. Young
Resources executed the First Warranty Deed, and Zundel
recorded it in April 2003.
¶5 In 2004, PPLR transferred the Landfill Area to
Promontory Landfill, another company managed by Zundel.
According to Young Resources, Zundel made this transfer
"without notice to [PPLR's] members and without
receiving authority from all members." Like the First
Warranty Deed, the deed transferring the Landfill Area to
Promontory Landfill (the Second Warranty Deed) did not
contain a right of reverter or the reservation of water and
mineral rights. The Second Warranty Deed was recorded in
In 2016, Young Resources sued Promontory Landfill and PPLR
(collectively, Defendants), alleging that Zundel lacked
authority to transfer the property and that any transfer was
subject to the conditions contained in the Amended Operating
Agreement. The Claims 1, 2, 3, and 7 are at issue in this
appeal. In Claim 1, Young Resources seeks a declaratory
judgment derivatively on behalf of PPLR quieting title
against Promontory Landfill on the ground that "Zundel
did not have authority to convey the Young Resources Property
to Promontory Landfill without the consent of Young
Resources." If the court grants relief on Claim1, Claim
2 seeks a judgment against PPLR that Young Resources is
entitled to the return of the property not developed within
five years, as provided by the Amended Operating Agreement.
In the alternative, Claim 3 seeks a declaratory judgment that
Promontory Landfill is not a bona fide purchaser but took the
property from PPLR subject to the right of reverter in the
Amended Operating Agreement. Claim 7, also in the
alternative, seeks a declaratory judgment that PPLR's
rights and duties with respect to the Landfill Area were
nonassignable and could not be transferred to Promontory
In response to these claims, Defendants moved to dismiss the
complaint or, in the alternative, for summary
judgment. The district court granted the motion to
dismiss, ruling that the claims were barred by both the
merger doctrine and the statute of limitations.
AND STANDARD OF REVIEW
On appeal, Young Resources challenges the dismissal of Claims
1, 2, 3, and 7 based on the statute of
limitations. "A Rule 12(b)(6) motion to dismiss
admits the facts alleged in the complaint but challenges the
plaintiff's right to relief based on those facts."
Oakwood Village LLC v. Albertsons, Inc., 2004 UT
101, ¶ 8, 104 P.3d 1226 (quotation simplified).
"Under a rule 12(b)(6) dismissal, our inquiry is
concerned solely with the sufficiency of the pleadings, and
not the underlying merits of the case." Id.
(quotation simplified). "In reviewing the trial
court's decision, we accept the factual allegations in
the complaint as true and interpret those facts and all
inferences drawn from them in the light most favorable to the
plaintiff as the non-moving party." Id. ¶
The grant of a motion to dismiss pursuant to rule 12(b)(6)
presents a question of law that this court reviews for
correctness. See Lilley v. JP Morgan Chase, 2013 UT
App 285, ¶ 4, 317 P.3d 470. Similarly, the
"determination that a statute of limitations has expired
is also a question of law which we review for correctness,
giving no particular deference to the lower ...