Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca10-88-01387/USCOURTS-ca10-88-01387-0/pdf.json

Parties Involved:
B.F.C. Oil Company
Appellant
Consolidated Mayflower Mines, Inc.
Appellant
Newpark Resources, Inc.
Appellant
Stichting Mayflower Mountain Fonds
Appellee
Stichting Mayflower Recreational Fonds
Appellee

Document Text:

~niteo jtates (!fourt of J\ppeals 

TENTH CIRCUIT 

OFFICE OF THE CLERK 

C404 UNITED STATES COURTHOUSE 

DENVER, COLORADO 80294 

ROBERT L. HOECKER November 9, 1990 CLERK 

TO: ALL RECIPENTS OF THE CAPTIONED OPINION 

RE: Nos. 88-1102; 88-1293 and 88-1387 

Stichting Mayflower Recreational Fonds, et al 

vs. Newpark Resources, Inc., et al 

Filed May 11, 1990 by Judge Wesley E. Brown. 

TELEPHONE 

(303) 844·3157 

(FTS) 564·3157 

Attached is a new page 21 to be substituted for page 21 

in the original opinion which was sent to you on May 11, 1990. 

ROBERT L. HOECKER, Clerk 

Enclosure 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 1
In this case, the motion to amend was filed two years after the 

suit was initiated, after the completion of discovery, and shortly 

before the trial was scheduled to begin. It came in the wake of 

a motion, hearing, and ruling on the defendants' request for 

summary judgment on the slander of title claim. These 

circumstances do not warrant a finding of abuse of discretion. Cf. 

Franks v. Nimmo, 796 F.2d 1230, 1238 n. 4 (10th Cir. 1986). 

Accordingly, the district court's ruling on this issue is affirmed. 

VI. CONCLUSION 

The order requiring Stichting to pay $30,301.00 to defendants 

for reimbursement is affirmed. On the parties' claims for 

declaratory relief, the judgment of the district court is reversed 

and the matter is remanded for further findings consistent with 

this opinion. Likewise, the judgment as to attorney's fees is 

reversed and remanded for further findings consistent with this 

opinion. The district court's ruling on the claim for abuse of 

process is affirmed. 

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED. 

21 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 2
FI LED 

Unir.ed StMcs Coun t:Jf Appeals 

·r enu ' c.. ... ir•.::1.11: . 

PUBLISH t

\/j ~v 11 poo ,.,-\' ..J..,J 

UNITED STATES COURT OF APPEALS ROBERT L. HOECKER 

Clerk 

FOR THE TENTH CIRCUIT 

STICHTING MAYFLOWER RECREATIONAL 

FONDS and STICHTING MAYFLOWER 

MOUNTAIN FONDS, 

v. 

Plaintiffs-Appellants/ 

Cross-Appellees, 

NEWPARK RESOURCES, INC., 

CONSOLIDATED MAYFLOWER MINES, 

INC., and B.F.C. OIL COMPANY, 

Defendants-Appellees/ 

Cross-Appellants. 

) 

) 

) 

) Nos. 88-1102 

) 88-1293 

) 88-1387 

) 

) 

) 

) 

) 

) 

) 

) 

) 

Appeal from the United States District Court 

for the District of Utah 

(D.C. No. 85-C-0176S) 

E. Craig Smay, Sessions & Moore, Salt Lake City, Utah, for 

Plaintiffs-Appellants/Cross-Appellees. 

Michael F. Richman, Van Cott, Bagley, Cornwall & McCarthy, Salt 

Lake city Utah, (David L. Arrington, of the same firm, with him on 

the brief) for Defendants-Appellees/Cross-Appellants. 

Before HOLLOWAY, Chief Judge, LOGAN, Circuit Judge, and BROWN,* 

District Judge. 

BROWN, District Judge. 

* Honorable Wesley E. Brown, Senior Judge, U. s. District Court 

for the District of Kansas, sitting by designation. 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 3
This action concerns a dispute over rights in the "Mayflower 

Properties, 11 an area of some 4,600 acres in Wasatch and Summit 

Counties, Utah. Plaintiffs-Appellants (hereinafter "Stichting") 

are developing the surface of the property for use as a resort. 

Defendants-Appellees have certain rights in the mineral estate of 

the Mayflower Properties. Stichting filed this action alleging 

slander of title and seeking a declaratory judgment of its rights 

and obligations under a 1975 mining lease. Stichting also sought 

quiet title to a disputed parcel of land and requested attorney's 

fees. Defendants filed various counterclaims. 

The district court's diligent efforts to resolve the disputes 

and contentions of the parties resulted in the following: The 

district court dismissed Stichting's claim for slander of title; 

the court then quieted title to the disputed parcel in favor of 

Stichting, but held that stichting was required to reimburse 

defendant Newpark to the extent that Newpark had incurred expenses 

for the disputed property; the court also determined the parties' 

rights under the 1975 mining lease and awarded both sides 

attorney's fees for certain claims. 

On appeal, Stichting raises the following three issues: 

whether the court erred in requiring Stichting to pay Newpark on 

the quiet title claim; whether the district court misconstrued the 

language of the 1975 mining lease; and whether the district court 

erred in refusing to permit Stichting to amend its complaint to 

allege a claim for abuse of process. Additionally, both sides 

appeal the district court's award of attorney's fees. 

2 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 4
I. FACTS 

Newpark and/or its predecessor corporations acquired the 

Mayflower Properties prior to 1961. The Properties included the 

NEl/4 of Section 25 in Township 2 South, Range 4 East, Salt Lake 

Base and Meridian, and was the site of the Mayflower Mine from 1933 

to 1972. In 1961, Newpark entered into a joint operating agreement 

with the Hecla Mining Company ("Hecla") respecting the Mayflower 

Mine. In 1962, Hecla discovered that a portion of the surface of 

the NEl/4 of Section 25 that was included in the joint operating 

agreement and which was needed for the construction of a mill had 

previously been sold to the Union Pacific Railroad as a portion of 

a railroad right-of-way. Hecla approached the Union Pacific to 

inquire about purchasing a 4. 2 acre parcel from the railroad. This 

4.2 acre parcel (described in Exhibit A attached to the district 

court opinion) is referred to by the parties as the "Hecla parcel." 

In March of 1962, Hecla advised Newpark that Hecla would buy the 

Hecla parcel in its own name, charge the cost of purchase to the 

operating account under the joint operating agreement, and 

thereafter convey the Hecla parcel to Newpark subject to the joint 

operating agreement. Hecla in fact purchased the parcel and a mill 

was constructed and operated on it. In 1972, the joint operating 

agreement was terminated. For undisclosed reasons, Hecla did not 

convey title to the Hecla parcel to Newpark. 

In August, 1972, an individual named Leonard Lewis acquired 

an option to purchase the Mayflower Properties from Newpark. The 

option agreement described the covered properties and expressly 

3 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 5
excluded "the rights of Hecla Mining Company under the ( 1961 Joint] 

operating agreement." In September, 1972, Lewis assigned the 

option to LON Investment Company ("LON") • In 1972, Newpark 

conveyed title to the surface of the Mayflower Properties to LON 

by means of special warranty deeds that reserved to Newpark certain 

veins of minerals therein "together with the right of access to and 

from said veins from adjoining properties." The deeds provided 

that the conveyance was subject to the rights of the Hecla Mining 

Company under the 1961 agreement. LON had constructive notice of 

the fact that record title to the Hecla parcel was held by Hecla. 

LON executed two promissory notes in favor of Newpark as part of 

the purchase price and gave Newpark two mortgages on the Mayflower 

Properties to secure the notes. LON planned to develop the surface 

of the property into a resort. By 1975, LON was in arrears on its 

mortgage payments and LON entered into negotiations with Newpark 

concerning the properties. Newpark did not want to reacquire the 

Mayflower Properties but decided to seek sufficient surface rights 

in the properties to permit access for mining. Pursuant to a June 

30, 1975 agreement, a new corporation--Consolidated Mayflower 

Mines, Inc. ("CMMI")--was formed, with Newpark owning 70 percent 

of the stock and LON owning 30 per cent. LON and Newpark each 

executed a long-term mining lease by which mineral rights in the 

properties were leased to CMMI. 

The 1975 Mining Lease provided that CMMI had no right to use 

the surface of a parcel referred to by the parties as the "Village 

Area." The lease also placed certain restrictions on CMMI's use 

4 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 6
of the remainder of the property under the lease, which are 

discussed in section III of this opinion. Additionally, Newpark 

sought to obtain a parcel of land from LON contiguous to the old 

Mayflower Mine portal for use in future mining operations, but LON 

refused to lease any land contiguous to the portal because it was 

well suited for resort development. LON feared that a mining 

operation within this area would be unduly disruptive of its 

resort. LON and Newpark eventually found a parcel within the 

Mayflower Properties that was suitable for construction of a mining 

and milling operation. This parcel (referred to as the 11 25 Acre 

Parcel") was conveyed by LON to Newpark for $50,000.00. 

LON continued to pursue its plans for development of a resort 

on the Mayflower Properties. As part of a plan to sell limited 

partnerships in the venture, LON had a title report prepared for 

the properties. The report indicated that LON's title to the NEl/4 

of Section 25 in Township 2 South, Range 4 East was subject to 

certain exceptions, one of which was the Hecla parcel. In 1977, 

LON decided to sell the Mayflower Properties. LON conveyed the 

property to Ross Lare Realty in August, 1977, who in turn conveyed 

it to appellant Stichting. The deed conveying the property to Ross 

Lare Realty and the instrument conveying the property to stichting 

both excluded the Hecla Parcel. The purchase price paid by 

Stichting for the property did not include obtaining the Hecla 

Parcel. 

No later than May, 1981, Stichting discovered that record 

title to the Hecla Parcel was held by the Hecla Mining Company. 

5 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 7
Recognizing that there were certain title defects affecting the 

Mayflower Properties, LON entered into an agreement with stichting 

under which LON agreed to convey certain "omitted properties" to 

Stichting. This agreement was apparently not drafted with the 

Hecla Parcel in mind, however. On July 2, 1981, LON executed a 

Special Warranty Deed by which it conveyed to Stichting certain 

properties, including "all of the Grantor's right, title and 

interest in and to . Section 25 . Township 2 South, Range 

4 East . II The Hecla Parcel is located in the NEl/ 4 of 

Section 25. The only warranty contained in the deed was a warranty 

by LON that they "have not heretofore conveyed, hypothecated, or 

otherwise diminished any title they have had in any property 

conveyed hereby." The deed provided that it was made subject to 

the rights of the Hecla Mining Company under the 1961 operating 

agreement. 

At the time LON conveyed the Mayflower Properties to Ross Lare 

Realty, the Hecla Mining Company was the record title holder to the 

Hecla Parcel. On various occasions between 1981 and 1984, 

Stich ting attempted to purchase the parcel from Hecla. In May 

1983, Newpark contacted Hecla to demand that Hecla convey the 

parcel to Newpark, asserting a right to the property under the 

parties' 1961 Joint Operating Agreement. Hecla initially denied 

that Newpark had any right to the parcel, but in 1984 Hecla agreed 

to convey and Newpark agreed to accept an undivided one-half 

interest in the Hecla Parcel. The interest was conveyed by a 

quitclaim deed dated March 29, 1984. Thereafter, Hecla notified 

6 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 8
both Newpark and Stichting that Hecla would sell its remaining onehalf interest in the Hecla Parcel to the highest bidder. Newpark 

submitted a bid of $31,500.00 for the property, while Stichting bid 

$30,301._00. Hecla accepted Newpark's bid and conveyed the 

remaining one-half interest to B.F.C. Oil Company, a subsidiary of 

Newpark. 1 

In April 1984, the Wasatch County Planning Commission held 

hearings on stichting's plans for resort development of the 

Mayflower Properties. The defendants appeared at these hearings 

and voiced objections to the plans, contending that the plans did 

not recognize their right to conduct mining operations on the 

property. Stichting told the Commission that under the 1975 Mining 

Lease, Stichting had the power to restrict all mining development 

on the Mayflower Property to avoid any interference with 

Stichting' s resort plans. The defendants disputed this view of the 

Mining Lease. 

stichting filed this action in the district court, claiming 

that under the 1975 Mining Lease CMMI could not use the surface of 

Stichting's property without the prior written consent of 

Stichting. Further, Stichting maintained that CMMI was prohibited 

from using the surface if such use would in any way disturb 

Stichting's actual or contemplated use of the surface. Defendant 

CMMI conceded that its surface use of the lands required 

Stich ting's consent, but argued that stichting was required to 

1 The defendants stipulated at trial that B.F.C. stood in the 

shoes of Newpark for purposes of determining title to the Hecla 

Parcel. 

7 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 9
consent if the proposed mining activity did not unreasonably 

interfere with plaintiff's use of the property. Both parties 

brought causes of action concerning the surface use of the 

Mayflower Properties. 

II. THE HECLA PARCEL 

The district court found that, as to the Hecla parcel, Newpark 

had an equitable interest in the property in 1972 even though Hecla 

held the record title to the parcel. When Newpark conveyed its 

interest in the NEl/4 of Section 25 to LON, Newpark's equitable 

interest in the property also passed to LON. By the Special 

Warranty Deed of July 2, 1981, LON in turn conveyed all of its 

interest in the NEl/4 of Section 25 to stichting. This deed was 

effective to convey to stichting all of LON's equitable interest 

in the Hecla parcel. 

The district court found that when Newpark acquired record 

title to the Hecla parcel in 1984, Newpark held the title in a 

constructive trust in favor of Stichting. The court found that the 

defendants did not obtain the Hecla parcel fraudulently or 

maliciously, but ruled that the agreements between the parties 

contemplated that as between defendants and plaintiffs, plaintiffs 

would have title to the Hecla parcel. 2 The court further ruled 

that the plaintiffs were required by equity to pay Newpark the 

costs of acquiring the trust property (i.e. the Hecla parcel) to 

the extent such acquisition had benefitted the plaintiffs. The 

2 The finding of the district court that title to the Hecla 

property passed to Stichting by a constructive trust is not 

challenged on appeal. 

8 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 10
court found the best measure of the benefit conferred on plaintiffs 

to be the $30,301.00 that Stichting had bid for the Hecla parcel. 

Consequently, the court quieted title to the Hecla parcel in favor 

of Stichting and ordered them to pay Newpark $30,301.00. 

Appellants first challenge the district court's order that 

they reimburse Newpark for Newpark's expenditures to obtain the 

Hecla parcel. Stichting concedes that a person who discharges a 

valid claim against property is normally entitled to restitution 

from the owner of the property. 3 Appellants object, however, to 

the district court's finding that Newpark' s acquisition of the 

title to the Hecla parcel conferred a benefit upon stichting. 

Stichting argues that it received no benefit from Newpark's payment 

because Newpark had been entitled to the parcel even when Hecla 

held the record title. In support of this argument, stichting 

asserts that the district court found that "Hecla had been merely 

a trustee of the millsite for Newpark ... and was, therefore, 

trustee for Newpark' s successors. 11 (Appellant's Brief, p. 12). 

Similarly, appellant asserts that "(t)here is no question, based 

upon the district court's findings, that had appellants been in 

possession of the information possessed by Newpark in 1984, it 

could have obtained possession of the millsite without further 

payment .... 11 (Id. at 15). These assertions have no basis in 

3 This principle is expressed in the Restatement of the Law of 

Restitution as follows: "A person is entitled to specific 

restitution of property from another ... only on condition that 

he compensate the other for expenditures with reference to the 

subject matter which have inured to his benefit, to the extent that 

justice between the parties requires." Restatement on Restitution 

§ 158. 

9 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 11
the district court's findings and are not supported by any 

authority. The district court found only that Newpark, not Hecla, 

held the Hecla parcel in trust. Hecla denied that Newpark had a 

right to the parcel. Based upon an opinion of Hecla's counsel, 

which disclosed that the parcel had been purchased with joint funds 

from Hecla and Newpark, Hecla agreed to convey and Newpark agreed 

to accept an undivided one-half interest in the Hecla parcel to 

settle Newpark's claim against the property. Although Hecla had 

previously informed Newpark that the parcel would be transferred 

to Newpark, the record does not clearly establish that Newpark was 

lawfully entitled to the entire parcel. Because Hecla provided 

half of the funds needed to obtain the parcel, Hecla may have had 

an equitable claim on the property. 4 Accordingly, we do not find 

the district court's determination that Newpark conferred a benefit 

upon appellants to be clearly erroneous. Newpark's acquisition of 

the remaining one-half interest in the property had the effect of 

extinguishing any claim to the property by Hecla and gave 

4 Stichting's contention that Hecla held the parcel in trust 

for Newpark is apparently based upon correspondence between Hecla 

and Newpark in which Hecla indicated that it intended to transfer 

title to the parcel to Newpark. The circumstances surrounding the 

acquisition of the parcel and the termination of the joint 

operating agreement, however, are simply too clouded to allow a 

conclusion that Newpark was entitled to the property outright. 

Under the parties' joint agreement, for example, Newpark apparently 

had an option to purchase Hecla' s interest in joint operation 

property. If the Hecla parcel was subject to the joint operating 

agreement, then Hecla retained an. interest in the property until 

it was purchased by Newpark. Moreover, even if Hecla held title to 

the property in trust for Newpark, Hecla may have had an equitable 

claim on the property because it provided half of the funds needed 

to purchase the parcel. As such, Hecla may have been entitled to 

reimbursement for acquiring the trust property. 

10 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 12
appellants a clear title to the property. It was certainly not 

unreasonable for the district court to view the settlement of this 

disputed claim as a benefit to the holder of the Hecla parcel. See 

Restatement on Restitution § 158 Comment a: 11 [T]he person obtaining 

restitution is ordinarily benefitted by expenditures which improve 

the subject matter or diminish a claim against it. 11 Although 

Stichting repeatedly suggests that Newpark acted improperly in 

obtaining the property, the district court specifically found that 

11 [d]efendants did not obtain the Hecla Parcel fraudulently or 

maliciously . " Based on the foregoing, we find that the 

district court did not abuse its considerable discretion to fashion 

an appropriate equitable remedy under the circumstances. See e.g. , 

McKinney v. Gannett Co., Inc., 817 F.2d 659, 670 (10th cir. 1987). 

See also Chain O'Mines v. United Gilpin Corporation, 109 F.2d 617, 

621 (7th Cir. 1940), cert. denied, 311 U.S. 659.· Furthermore, we 

find the district court's use of the $30,301.00 bid as a gauge of 

the benefit conferred upon Stichting to be entirely reasonable 

under the circumstances. 

III. THE 1975 MINING LEASE 

The district court found that the 1975 Mining Lease 

contemplated a cooperative effort between LON (Stichting's 

predecessor in interest) and CMMI to bring about dual use of the 

Mayflower Properties for both resort development and mining 

operations. Of particular importance was the following provision 

of the lease: 

Lessee agrees that it will not make, allow or permit any 

operation or activity of any type which involves any 

11 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 13
occupation or use of the Surface Premises or which would 

or might interfere with any actual or contemplated use 

of the Surface Premises by Lessor, without the prior 

written consent of Lessor, which will not be unreasonably 

withheld. 

The court stated in its findings that this provision was ambiguous 

to the extent "it fails to define the tolerable degree of 

interference for which the lessor's consent could not be reasonably 

withheld." The court therefore relied on testimony concerning the 

parties' intent to determine what was required by the lease. The 

court found that the lease obliged the parties to cooperate in 

allowing both surface mining and a resort development to be 

conducted on the Mayflower Properties "so long as the surf ace 

mining activities do not unreasonably interfere with plaintiff's 

use of the surface premises for a resort development." 

Appellant contends that the lease is unambiguous and that its 

terms prohibit any activity which would or might interfere with the 

resort development. Appellee maintains that the court erred in 

interpreting the lease as prohibiting only "unreasonable" 

interference. 

one of the most basic rules of contract interpretation is that 

the intent of the parties to a written agreement is to be 

ascertained from the content of the instrument itself. Hal Taylor 

Associates v. Unionamerica, 657 P.2d 743 (Utah 1982); Utah Valley 

Bank v. Tanner, 636 P.2d 1060 (Utah 1981). It is only when an 

ambiguity exists which cannot be reconciled by an objective and 

reasonable interpretation of the contract as a whole that resort 

may be had to the use of extrinsic evidence. Utah Valley Bank, 

12 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 14
supra. We therefore consider the relevant portions of the 1975 

Mining Lease, which provided as follows: 

A. Lessor does hereby grant and lease to Lessee and 

Lessee does hereby take and lease from Lessor: 

1. The exclusive right, subject to the provisions 

of paragraph I c, to enter into and upon the Leased 

Premises for the purpose of exploring for, developing, 

mining and removing all ores and minerals or products 

therefrom which are or may be found upon the Leased 

Premises, at such times, in such manner and using such 

methods as Lessee deems advisable. 

2. The surface rights, easements and right-of-way 

described on Exhibit B attached hereto and made a part 

hereof. 

B. Notwithstanding any provision in this Agreement to 

the contrary, it is agreed and acknowledged that Lessor 

or its assigns is developing the surface Premises as a 

ski and recreational area and housing area, and that 

parts of the Surface Premises, including but not 

restricted to the village area described in Exhibit A, 

will or may be used and occupied for purposes relating 

to such development including, but without limitation, 

ski runs, tramways, lifts, multiple and single family 

dwellings, condominiums, stores, shops, public areas, 

parking areas, utilities and improvements and structures 

of any kind. In no event will Lessee have the right to 

use the land constituting the village site described in 

Exhibit A hereto. Any operation or activity conducted 

by Lessee on the Leased Premises other than the village 

area which interferes or might interfere with any actual 

or proposed use of the surface Premises by Lessor could 

result in substantial damage to Lessor. The covenants 

and agreements herein contained relating to nondisturbance of the Surface Premises by Lessee are, 

therefore, substantial consideration to Lessor for the 

granting of this Agreement. Lessee also acknowledges 

that Lessor and its assigns and any third parties that 

become involved in the development of the Surface 

Premises, including parties providing financing for any 

part of such development, will act in reliance upon such 

covenants and agreements herein contained and on Lessee's 

part to be kept and performed. 

c. Lessee agrees that it will not make, allow or permit 

any operation or activity of any type which involves any 

occupation or use of the Surface Premises or which would 

or might interfere with any actual or contemplated use 

13 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 15
of the Surface Premises by Lessor, without the prior 

written consent of Lessor, which will not be unreasonably 

withheld. By way of illustration and not in limitation, 

Lessee shall not, except as otherwise expressly set forth 

herein, be allowed to construct, use or occupy mill 

sites, drill sites, shafts, adits or portals without 

Lessor's prior written consent. However, Lessor and 

Lessee acknowledge that in order to explore for, develop, 

mine and remove ores and minerals from the Leased 

Premises, Lessee will need to occupy and make use of a 

portion of the Surface Premises of areas other than the 

village area, and Lessor will cooperate in good faith 

with Lessee in permitting, without charge, said limited 

use of the said area. 

There is no ambiguity in the lease as to the "tolerable degree 

of interference" contemplated by the parties. 5 Contractual terms 

are not rendered ambiguous merely because the parties to the 

agreement subsequently urge di verse interpretations. Jones v. 

Hinkle, 611 P.2d 733, 735 (Utah 1980). The language of the lease 

does not allow mining activities that would interfere with the 

lessor's use of the surface premises. Indeed, the district court 

implicitly recognized this fact when it found that the lease was 

unambiguous to the extent "it grants priority to resort development 

when these dual uses (mining and resort development] are 

incompatible." (Findings of Fact and Conclusions of Law p. 24.) 

In Paragraph I(C) of the lease, lessee agrees that "it will not 

permit any operation or activity of any type which would or 

might interfere with any actual or contemplated use of the Surface 

Premises by Lessor ..• "without the consent of the lessor. The 

mining rights granted to the lessee are subject to Paragraph I.C 

5 The fact that "interference" is not defined in the lease 

does not make the lease ambiguous. Whether a proposed activity 

would "interfere" amounts to a factual issue, just as whether an 

activity would "unreasonably interfere" is a factual is~ue. 

14 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 16
of the lease. (1 I(A)l.). That these provisions were intended to 

prevent interference with the lessor's development of the surface 

is made even clearer by Paragraph I (B) of the lease, which 

provides: 

Any operation or activity conducted by Lessee on the 

Leased Premises other than the village area which 

interferes or might interfere could result in substantial 

damage to Lessor. The covenants and agreements herein 

relating to non-disturbance of the Surface Premises by 

Lessee are, therefore, substantial consideration to 

Lessor for the granting of this Agreement. Lessee also 

acknowledges that Lessor and its assigns and any third 

parties that become involved in the development of the 

surface Premises ... will act in reliance upon such 

covenants and agreements herein contained and on Lessee's 

part to be kept and performed. 

Although it is true that the lease was designed to grant the 

lessee rights to explore for and develop minerals in the property, 

those rights are subject to the limitations expressed in the lease. 

To the extent the district court interpreted the lease as only 

prohibiting interference that is "unreasonable, " the court inserted 

a term into the agreement that the parties did not choose. 6 It 

6 We think the district court's initial reading of the lease 

was correct. After arguments on May 8, 1987, the court stated from 

the bench: 

Now, I don't know that the lease is that difficult, 

counsel. It seems to me, based on how the court views 

this, that the defendant does have a right to go on to 

the surface for the purpose of developing and extracting 

the minerals within the limitation provided by the lease. 

I don't know that I would go so far as to agree with Mr. 

Richman that they may do so if the development or 

extraction does not exceed a reasonable interference with 

the contemplated -- either the use -- actual use or 

contemplated use of the surface. I think the lease says 

they may do so so long as it does not interfere with any 

actual or contemplated use of the surface premise. I 

think the lease is clear in that regard, counsel. I think 

in order to do so there must be prior written consent of 

the plaintiff which will not be unreasonably withheld. 

15 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 17
must be presumed that the parties to the lease knew the effect of 

the words chosen and intended them to have their ordinary meaning. 

Cf. Tomino v. Greater Park city Co., 570 P.2d 701 (Utah 1977). 

The lease allows the lessor to determine in the first instance 

whether ' a proposed mining activity "would or might" interfere with 

lessor's actual or contemplated use of the surface. In making this 

determination the lessor is bound to act reasonably, since consent 

"will not be unreasonably withheld." The "reasonable" provision 

in this sentence applies to the lessor's determination of whether 

an activity is allowed by the lease; it does not amend the 

preceding clause to allow "reasonable" interference with the 

surface premises. Similarly, the lessor promises to cooperate in 

good faith with lessee in permitting "said limited use" of the 

surface premises. The "limited use" of the premises means those 

activities allowed by the first sentence of Paragraph I (C) --

activities that do not interfere with the lessor's use of the 

surface. 

Insofar as the judgment below allows mining activities that 

would or might interfere with Stichting's actual or contemplated 

use of the surface premises covered by the lease, the judgment of 

the district court must be reversed and remanded for further 

* * * But my reading of the lease and language would be 

that the lease does allow exploration, that is to go on 

to the site and explore without charge. And that would 

not be unreasonably withheld so long as it does not 

interfere with the surface use being made or contemplated 

being made by plaintiff. I don't know that it is more 

difficult than that, counsel. 

16 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 18
findings consistent with this opinion. 7 

IV. ATTORNEY'S FEES 

A. The 1975 Mining Lease 

Paragraph XIX(C) of the 1975 Mining Lease provides: "In the 

event of any dispute between the parties hereto, the prevailing 

party shall be entitled to recover reasonable attorney's fees 

II In its findings, the district court stated that neither 

party was a prevailing party under Paragraph XIX(C) of the lease. 

The district court awarded attorney's fees to the defendants as the 

prevailing party, however, on plaintiff's seventh cause of action, 

a claim for royalties allegedly due under the lease. Appellant 

argues that this award of fees is inconsistent with the court's 

finding that neither party was the prevailing party. We agree and 

reverse the award of attorney's fees on the seventh cause of 

action. 

Because our interpretation of the lease provisions relating 

to surface rights differs from that of the district court, we find 

it necessary to remand the case for a redetermination of who, if 

anyone, is the prevailing party. In order to guide the district 

court's determination, we make two observations. First, in making 

its determination of the prevailing party, the district court 

should consider only those claims involving disputes under the 

7 The parties do not challenge the district court's findings 

as to the parties' rights in the village area or the 25 acre parcel 

purchased by defendants. The district court's findings on those 

issues are affirmed. 

17 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 19
mining lease. 8 Trayner v. Cushing, 688 P.2d 856, 858 (Utah 1984) 

(A party is entitled only to those fees attributable to the 

successful vindication of contractual rights within the terms of 

their agreement.) Second, under the contract language at issue 

here, there can generally be only one "prevailing party. 11 Mountain 

States Broadcasting Co. v. Neale, 783 P.2d 551, 556 (Utah App. 

1989) ; Cf. Trayner v. Crawford, 688 P. 2d 856, 858 (Utah 1984) . 

Because the contract disputes in this case all arose out of the 

same transaction, the court should consider all of the contract 

claims together in making a determination of who is the prevailing 

party. In other words, the court should first attempt to apply the 

"net judgment rule" rather than award fees on each individual 

claim. 9 See Mountain States, 783 P.2d at 556 n. 8. 

B. Costs 

Stich ting also objects to the award of costs other than 

attorney's fees to the defendants. We note that the taxing of 

costs is a matter on which the trial court is given broad 

8 Thus, the only claims relevant to this determination are 

both parties' claims for declaratory relief, the plaintiffs' claim 

for royalties, and the defendants' claim for breach of contract. 

9 We recognize the difficulty of applying a "net" rule in the 

context of multiple claims and actions for declaratory relief. 

Nevertheless, the Mountain States decision indicates a preference 

for such a rule, and we think the district court should attempt to 

weigh the relative success of the parties on the contract claims 

if it can find a reasoned basis for doing so. one possibility, for 

example, is to determine whether one party prevailed on the most 

significant issues underlying the dispute. The net judgment rule 

need not be mechanically applied, though, and Mountain States 

recognizes the need for a "flexible and reasoned approach" to 

deciding in particular cases who actually is the prevailing party. 

Id. at 556 n. 7. This flexible approach implies that the district 

court's assessment will be given due deference upon review. 

18 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 20
discretion. U.S. Industries. Inc. v. Touche Ross & Company, 854 

F.2d 1223, 1245 (10th Cir. 1988). Because our opinion alters the 

relief obtained by the parties to some degree, on remand the 

district court should exercise its discretion and determine what, 

if any, changes should be made to the original assessment of costs. 

c. Quiet Title Claim 

In a cross-appeal, Newpark challenges the award of attorney's 

fees to Stichting on its quiet title claim. The district court 

recognized the lack of authority for such an award, but found that 

Stichting was equitably entitled to attorney's fees for having to 

litigate the title to the Hecla parcel. 

We agree with Newpark that this award is not supported by 

authority. Utah adheres to the "American rule" with regard to 

attorney's fees under which, as a general rule, each party bears 

his or her own attorney's fees in the absence of a statute or 

enforceable contract provision to the contrary. Cobabe v. 

Crawford, 780 P.2d 834, 836 (Utah App. 1989). Although there may 

be several equitable exceptions to this rule, 10 Stich ting has cited 

no authority that would support an award of attorney's fees under 

the circumstances of this case. Cf. South Sanpitch Co. v. Pack, 

765 P.2d 1279 (Utah App. 1989) (Attorney's fees are recoverable 

under the "third party tort rule," where the negligence of one 

defendant causes plaintiff to incur attorney's fees quieting title 

as to a third person.) Accordingly, the award of attorney's fees 

on the quiet title claim is reversed. See Lyman Grazing 

10 See T ur tl e M anagemen, t 645 P . 2d 667 , 671 n. 1 (Ut a h 1982) . 

19 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 21
Association v. Smith, 473 P.2d 905, 908 (Utah 1970) (Record did not 

support an award of attorney's fees to a party who was forced to 

procure a restraining order; the court will not award such fees in 

the absence of a showing of such fraud, malice or wantonness as 

would authorize an award of punitive damages.) 

V. ABUSE OF PROCESS 

In its complaint, Stichting asserted a claim for slander of 

title. Stichting maintained that the defendants made false 

statements to the Wasatch County Planning Commission during the 

course of density hearings on the Mayflower Properties. The 

district court granted the defendants' motion for summary judgment 

on this issue, finding that the defendants' statements were 

privileged statements made by witnesses in a quasi-judicial 

proceeding. This ruling is not challenged on appeal. After the 

motion for summary judgment was granted, however, Stichting filed 

a motion seeking leave to amend the complaint to change the theory 

of their claim from slander of title to abuse of process. The 

district court found that there was no evidence of an abuse of 

process. 11 

The determination of whether to grant or deny leave to amend 

the complaint is within the discretion of the trial court and is 

subject to reversal only for an abuse of that discretion. 

Leaseamerica Corp. v. Eckel, 710 F.2d 1470, 1473 (10th Cir. 1983). 

11 The · court also stated that the absolute privilege for 

testimony given in a judicial proceeding barred the abuse of 

process claim. In view of our disposition of the claim for abuse 

of process, we do not address this issue. 

20 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 22
In this case, the motion to amend was filed two years after the 

suit was initiated, after the completion of discovery, and shortly 

before the trial was scheduled to begin. It came in the wake of 

a motion, hearing, 

summary judgment 

and ruling on the defendants' request for 

on the slander of title claim. These 

circumstances do not warrant a finding of abuse of discretion. Cf. 

Franks v. Nimmo, 796 F.2d 1230, 1238 n. 4 (10th Cir. 1986). 

Moreover, even if we were to find error in the district court's 

ruling, the error would be harmless because the district court's 

findings preclude a claim for abuse of process. Under a section 

of the 1975 Mining Lease entitled "Zoning and Land Use," the 

parties agreed to cooperate in obtaining and maintaining zoning and 

land use laws to allow the activities contemplated by the lease. 

Although plaintiff contends that the defendants' bad faith use of 

the zoning hearings in Wasatch County constituted an abuse of 

process, the district court found after hearing the evidence that 

"(t]here has been no breach by either plaintiffs or defendants of 

an express or implied duty under the 1975 Mining Lease to cooperate 

in good faith." (Findings of Fact and Conclusions of Law, p. 27). 

This finding is supported by substantial evidence in the record. 

It precludes appellant's argument that Newpark used the zoning 

hearings for an improper purpose. Accordingly, the district 

court's ruling on this issue is affirmed. 

VI. CONCLUSION 

The order requiring Stichting to pay $30,301.00 to defendants 

for reimbursement is affirmed. On the parties' claims for 

21 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 23
declaratory relief, the judgment of the district court is reversed 

and the matter is remanded for further findings consistent with 

this opinion. Likewise, the judgment as to attorney's fees is 

reversed and remanded for further findings consistent with this 

opinion. The district court's ruling on the claim for abuse of 

process is affirmed. 

AFFIRMED IN PART, REVERSED IN PART, AND REMANDED. 

22 

Appellate Case: 88-1387 Document: 010110296378 Date Filed: 11/09/1990 Page: 24