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Northgate Village Development, LC v. City of Orem

Supreme Court of Utah

October 2, 2019

Northgate Village Development, LC, Appellee,
v.
City of Orem, Appellant.

          On Certiorari to the Utah Court of Appeals, Fourth District, Utah County The Honorable Lynn W. Davis No. 090401127

          J. Craig Smith, Kathryn J. Steffey, Clayton H. Preece, Salt Lake City, for appellee

          Jody K. Burnett, Robert C. Keller, Salt Lake City, for appellant

          Justice Petersen authored the opinion of the Court in which Chief Justice Durrant, Associate Chief Justice Lee, Justice Himonas, and Judge Valencia joined.

          Having recused himself, Justice Pearce does not participate herein. District Judge Jennifer L. Valencia sat.

          OPINION

          PETERSEN JUSTICE

         INTRODUCTION

         ¶1 Ten years ago, Northgate Village Development, LC sued the City of Orem to recover the cost of cleaning up property Northgate had purchased from the City. Northgate contends that when it began to excavate the property to prepare it for sale to a developer, it found subsurface asphalt and "urban detritus." This litigation centers on who was responsible for cleaning up the property under the parties' agreement.

         ¶2 After a grant of summary judgment, an appeal, and a reversal and remand, this case was back in the district court. Northgate filed an interlocutory appeal, challenging two of the district court's pretrial evidentiary rulings. The court of appeals reversed, holding that the district court incorrectly excluded expert testimony and other evidence proposed by Northgate. The City petitioned for certiorari, which we granted.

         ¶3 Because we agree with the court of appeals' reasoning regarding both evidentiary rulings, we affirm.

         BACKGROUND

         ¶4 Northgate purchased a parcel of property from the City that the City had used to operate a public works facility. When Northgate began excavating the property, it found

car bumpers, bicycles, tires, water heaters, washing machines, car engines, car parts, asphalt, galvanized pipes, asbestos-containing transit pipe, trees, bushes, medical waste products, brick, mason blocks, concrete, toilets, electrical panels, refrigerators, silverware, 50-gallon drums, conduit, general garbage, storm drains, ADS pipe, slag, barbed wire, field fence, cedar fence posts, railroad ties, plywood, carpet, transformers, mercury-containing ballasts, gas cables, truck mud flaps, plastic sheeting, car doors, pallets, rebar, pop bottles, sewer pipe, metal t-posts, fire hydrants, water valves, ductile iron, copper parts and valves, brass parts, fiberglass insulation, twine, rubber traffic cones, concrete manhole sections, metal rings and lids for manholes, valve boxes, bags of leaves, and metal sheeting for roofs.

         ¶5 Northgate demanded that the City reimburse its clean-up costs or perform the work itself. The City refused, disputing Northgate's characterization of the parties' agreement. Ultimately, Northgate incurred approximately $3 million in clean-up costs.

         ¶6 In 2009, Northgate sued the City, alleging breach of contract. The parties filed competing summary judgment motions disputing the terms of their agreement. The parties' contract provided that the City was to "complete any environmental clean-up responsibilities specified in the written action plan." Northgate argued that the "written action plan" referred to both an Environmental Site Assessment referenced elsewhere in the contract and an Environmental Clean-Up List (Clean-Up List) attached to the agreement. The City argued that the Clean-Up List was the only "written action plan."

         ¶7 The Clean-Up List outlined certain obligations including: (1)"Landfilling construction materials with pieces of asphalt"; (2)"Permit required for continued landfilling"; (3) "Site assessment and application required for closure of site"; (4) "Landfill operations-burial of asphalt materials-Check permitting & closure requirements including Coordination with State of Utah Division of Solid & Hazardous Waste"; and (5) "Landfill operations-burial of electrical transformers with PCB's."[1]

         ¶8 The district court agreed with the City that the "written action plan" referred only to the Clean-Up List. Further, the court interpreted the Clean-Up List to require the City to remove only buried transformers. For the remaining debris and landfill material, the court concluded that the agreement obligated the City only to procure the necessary permits to leave it in place.

         ¶9 Northgate appealed. The court of appeals affirmed the district court's determination that the agreement obligated the City to perform only the clean-up identified in the Clean-Up List, but it disagreed that the list unambiguously required the City to remove only buried transformers. Northgate Vill. Dev., LC v. Orem City (Northgate I), 2014 UT App 86, ¶ 36, 325 P.3d 123. The court of appeals noted that the parties had "ascribe[d] contrary meanings" to a section of the Clean-Up List that could impose additional obligations on the City:

1. Landfilling construction materials with pieces of asphalt

2. Permit required for continued landfilling

3. Site assessment and ...

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