District Court, Salt Lake Department The Honorable Barry G.
Lawrence No. 130905407
L. Barnett, Darren G. Reid, and Steven M. Lau, Attorneys for
K. Tracy, Joshua L. Lee, and James C. Dunkelberger, Attorneys
Kate Appleby authored this Opinion, in which Judges Gregory
K. Orme and Diana Hagen concurred.
KB Squared LLC dba Park City Live (PCL), entered into a lease
agreement (the Lease) with Memorial Building LLC (Memorial)
to operate a nightclub (the Club) including presenting
concerts in a building owned by Memorial in Park City, Utah.
PCL used an upper-level "bridge" (the Bridge) for
high capacity premium concert seating. Out of occupancy and
safety concerns Park City ordered PCL to stop using the
Bridge in that way. PCL sued Memorial for a breach of the
Lease, arguing that its inability to use the Bridge was
caused by Memorial's failure to repair it. After a bench
trial, the district court ruled Memorial did not breach the
Lease. We affirm.
In December 2011, Memorial entered into the Lease with PCL to
occupy the Club "for the purpose of [operating a]
nightclub, entertainment, and other event use." Before
PCL occupied the Club, a prior tenant (Prior Tenant) operated
in the space. In 2005, Prior Tenant had the Bridge built
inside the Club. The Bridge was intended to connect "the
right and left side mezzanine levels of [the Club]."
Engineers prepared construction drawings that
"reflect[ed] that the Bridge was approximately 42 feet
wide and would accommodate a seating area" that could
hold "21 people total." The plans showed a standing
area behind the seating area, which, the experts at trial
calculated, could "accommodate an additional 38 people,
for a total occupancy of 59 on the Bridge." "The
plans also contained an express occupancy limit of 50 for the
Bridge addition for egress purposes." Based on the
testimony presented at trial the district court ruled that
"it was reasonable, based upon the intended use of the
Bridge, that it was designed to hold between 50 and 60 people
for the stated and intended use-i.e., fixed seating and
standing for a restaurant or nightclub."
The district court found the testimony regarding Prior
Tenant's use of the Bridge after it was constructed
"somewhat unspecific about the precise number of people
that [Prior Tenant] housed on the Bridge." But the court
concluded "[Prior Tenant] used the Bridge in a manner
that appears to have exceeded the stated limit set forth in
the plans." At one point, Prior Tenant also used the
Bridge "to accommodate [concert] equipment."
The Lease did not contain "any representation or
guaranty concerning the occupancy of the [Club], or any part
thereof" nor "any representation or guaranty
concerning the manner of use of any particular part of the
[Club]." But the Lease generally provided that the Club
as a whole was to be used as a nightclub. Prior to entering
into the Lease, PCL did not investigate the purpose for which
the Bridge was designed. PCL intended to use the Bridge for
"premium event seating" in the same way it believed
Prior Tenant used it.
In January 2013, Park City officials "observed 85 to 100
people . . . dancing and jumping" on the Bridge and
observed "excessive deflection of the floor."
Because of this, the officials requested that PCL
"limit the occupancy of the Bridge to 35."
"They came back the following night and again observed
80-85 people on the Bridge." After PCL failed to follow
the officials' directives, the officials "believed
PCL could not control the occupancy load, [and] issued [a]
'Stop Work' order prohibiting any occupancy on the
Bridge until otherwise approved."
PCL contacted the engineers involved in the construction of
the Bridge and had them inspect it. The engineers concluded
the Bridge was structurally sound. Their report stated that
"[t]he original intent of [the Bridge] was to serve as
an access platform to mount lighting and sound equipment. In
the construction documents, the drawings indicate a value of
50 persons (attributed to [the Bridge] area) used to
calculate the means of egress width." The report also
noted, "Recently, it has become apparent that the usage
of [the Bridge] (under new ownership) has been changed to an
assembly area without fixed seats." The engineers
recommended that to "prevent excessive
deflection/vibration of [the Bridge] under the new usage, . .
. the maximum occupant load of [the Bridge should be reduced]
to 25 persons." But the engineers also believed
"the structural integrity of [the Bridge] system [was]
not compromised" and was still fit for its intended
PCL asked Memorial to "restore the seating area to its
former and promised use as premium event seating as required
by the Lease." Memorial refused, noting that the city
officials' directives resulted from PCL's misuse of
the Bridge, not from its condition, and that the Bridge was
structurally sound and undamaged.
PCL sued Memorial, alleging that it breached the Lease. The
claims arose "out of [an] alleged representation that
Memorial made in the Lease" that the Bridge was intended
to be used as premium event seating. PCL asserted Memorial
breached the Lease by failing "to make the structural
repairs necessary to enable PCL to use [the Bridge]
After a bench trial, the district court dismissed PCL's
claim. It first noted that "PCL [did] not argue that the
representation included a specific number of seats, or a
specific occupancy number. Instead, it [asked] the Court to
conclude that 50 would be a 'reasonable' occupancy
number." "[I]t is undisputed that the Lease did not
contain any express promise concerning the number of
permissible occupants on the Bridge, or any specific use of
At trial, the principal of PCL (PCL Principal) testified that
Memorial made no oral representations or guarantees to PCL
regarding how the Bridge was to be used. PCL Principal
"believed there was an implicit promise that [PCL] would
be able to use the Bridge for nightclub [premium event]
seating, which, according to [PCL's] understanding of
nightclub industry usage, connotes dancing and jumping."
PCL argued Prior Tenant's use of the Bridge should allow
PCL to similarly use it because Memorial's Principal