Holladay v. Brown

This opinion is subject to revision before final
publication in the Pacific Reporter.
2011 UT 9
IN T HE
SUPREME C OURT OF THE STATE OF UTAH
___________
H OLLADAY T OWNE CENTER, L.L.C.,
Plaintiff and Petitioner,
v.
BROWN F AMILY H OLDINGS, L.L.C.,
Defendant and Respondent.
___________
No. 20090050
FILED FEBRUARY 1, 2011
___________
Third District Court, Salt Lake
The Honorable John Paul Kennedy
No. 060913167
On Certiorari to the Utah Court of Appeals
___________
Attorneys:
James L. Ahlstrom, Robyn L. Wicks, Salt Lake City,
for plaintiff
Blake S. Atkin, William O. Kimball, Joseph H. Pugsley,
Bountiful, for defendant
___________
J USTICE LEE, opinion of the Court:
¶1 	This case arises out of a contract dispute over the terms of a
lease agreement. The principal issue on appeal concerns which
party (landlord or tenant) bore responsibility under the lease to
incur the expense of quieting title when an easement interfering
with tenant’s ability to obtain financing for the development of
the property was identified. We conclude that the parties to this
lease assigned the expense and burden of quieting title to the te-
nant, and accordingly affirm.

HOLLADAY T OWNE C ENTER v. BROWN FAMILY HOLDINGS
Opinion of the Court
No. 20070496 	2
I
A
¶2 	The Petitioners, Holladay Towne Center, L.L.C. (“HTC”),
entered into a lease agreement (the “Lease”) with Respondents,
Brown Family Holdings, L.L.C. (“Brown”), to lease and commer-
cially develop a particular property (the “Property” or “Lot 27”).
Brown previously acquired the Property in 1994, at which time it
received a clear title report from United Title Services of Utah,
Inc., a division of First American Title Insurance Company. 1 In
2004, prior to entering into the Lease, HTC obtained a similar clear
title report from the Talon Group, likewise a division of First
American Title Insurance Company. Then in 2006, after the execu-
tion of the Lease, and for reasons not entirely clear in the record,
HTC requested a third title report. This third title report revealed
an affirmative easement for ingress, egress, and parking listed on
the chain of title for an adjoining lot (“Lot 26”). This easement is at
the center of the present dispute.
¶3 	The Lease contemplates two events. First, Brown was to de-
liver possession of the property to HTC, who would possess the
property for a period of twenty years subject to the terms of the
Lease. Second, after a period of five years, HTC would be permit-
ted to exercise an option to purchase the Property. The option
provision states that upon exercise, the Property “shall be con-
veyed using a general warranty deed.” The Lease expressly re-
cognizes HTC’s intention to build a shopping center with retail
stores and offices on the premises, and grants to HTC a “fee es-
tate” in “any structures hereafter constructed on and affixed to”
the Property. The record suggests that both HTC and Brown an-
ticipated that HTC would exercise the option to purchase the
Property after the initial five-year term had expired.
¶4 	The Lease contains several provisions relating to the deli-
very and possession of the Property. One is the “Demise” provi-
sion, which states
1.1 Demise. Landlord hereby leases to Tenant the Pre-
mises, together with all rights, privileges, easements,
1 A “Commitment for Title Insurance” was issued with an effec-
tive date of December 28, 1994. This title report made no mention
of the easement at issue in this case.

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Opinion of the Court
3 	No. 20070496
and appurtenances belonging to or in any way apper-
taining thereto, including but not limited to, any and all
surface easements, rights, titles, and privileges of Lan-
dlord now or hereafter existing in and to adjacent
streets, sidewalks and alleys for the Term, at the rental,
and upon all the covenants and conditions set forth
herein.
The Landlord’s Estate is defined as “all of Landlord’s right, title,
and interest in its fee estate in the Premises, its reversionary inter-
est in the Improvements pursuant hereto, and all other Rent and
Benefits due Landlord hereunder.” According to the “Recitals,”
Brown is the “Landlord [and] . . . the fee owner of [the Proper-
ty] . . . together with all rights and interest, if any, of Landlord in
and to the land lying in the streets and roads in front thereof and
adjoining thereto and in and to any easements or other rights ap-
purtenant thereto.” The Lease contemplates a single “Permitted
Exception” to this delivery of all of Brown’s rights pertaining to
the property: After the execution of the Lease, Brown is still ac-
countable for the “Property Taxes and Assessments accruing for
the year 2005 and thereafter.”
¶5 	Additionally, there are a number of provisions allocating
particular rights and duties to the tenant during the pendency of
the Lease. Chief among these is the “Compliance with Laws”
clause, which states:
6.3 Compliance with Laws. Subject to the Provisions of
Article 8 below,2 Tenant shall comply with all Legal Re-
quirements in the use, occupation, control and enjoy-
ment of the Premises and in the prosecution and con-
duct of its business thereon. Tenant shall have the right,
at its own cost and expense, to contest or review by ap-
propriate legal or administrative proceeding the validi-
ty or legality of any such Legal Requirements, and dur-
ing such contest Tenant may refrain from complying
therewith provided that compliance therewith may le-
gally be held in abeyance without subjecting Landlord
2 Article 8 pertains to “Environmental Matters” and states in re-
levant part that “Tenant shall at all times comply with applicable
Environmental Laws affecting the Premises.”

HOLLADAY T OWNE C ENTER v. BROWN FAMILY HOLDINGS
Opinion of the Court
No. 20070496 	4
to any liability, civil or criminal, of whatsoever nature
for failure so to comply therewith and without the in-
currence of a lien, charge or liability against the Premis-
es or Landlord’s Estate; and provided further that all
such proceedings shall be prosecuted by Tenant with
due diligence.
The Lease further defines “Legal Requirements” as follows:
“Legal Requirements” means all present and future
laws, statutes, requirements, ordinances, orders, judg-
ments, regulations, administrative or judicial determi-
nations, even if unforeseen or extraordinary, of every
governmental or quasi-governmental authority, court
or agency claiming jurisdiction over the Premises now
or hereafter enacted or in effect (including, but not li-
mited to, Environmental Laws and those relating to ac-
cessibility to, usability by, and discrimination against,
disabled individuals), and all covenants, restrictions,
and conditions now or hereafter of record which may
be applicable to Tenant or to all or any portion of the
Premises, any of the Premises, even if compliance the-
rewith necessitates structural changes to the Improve-
ments or the making of Improvements, or results in in-
terference with the use or enjoyment of all or any por-
tion of the Premises.
¶6 	Finally, the Lease is characterized as a “triple net lease” in
which the “tenant agrees that the amount of annual rent will be
paid without offset and that the tenant will pay all impositions
and costs relating to the property so that the Landlord has no cost
or expense relating to the property during the term or any exten-
sion of the lease.”
¶7 	On December 22, 2004, prior to entering into the Lease,
HTC (then Thomas Fox Properties) obtained a “Commitment for
Title Insurance” (the “First Report”) from the Talon Group, a divi-
sion of First American Title Insurance Company (the “Talon
Group”). The First Report made no mention of the Easement. In
early 2006, after entering into the Lease agreement, HTC’s counsel
reviewed a survey map of the Property and discovered a possible
easement in favor of an adjoining parcel (“Lot 26”). HTC then

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Opinion of the Court
5 	No. 20070496
asked Joseph Capilli of the Talon Group to investigate the Proper-
ty’s title and the possible easement.
¶8 	Capilli’s research revealed that (1) prior to August, 1980,
Lot 27 and adjoining Lot 26 were owned by the same owner, and
(2) that in August, 1980, Lot 26 was transferred with an easement
recorded against Lot 26 for parking, ingress, and egress. This
Easement was recorded only on the chain of title for Lot 26 and is
not listed in the chain of title for Lot 27.
¶9 	Nothing in the record suggests that either party had actual
notice of the existence of the Easement at the time of the execution
of the Lease. There is no physical evidence of the Easement. The
path for “ingress and egress” has been obstructed for two decades
by impassable berms and for the past ten years by storage units.
As noted above, both parties had on separate occasions received
Title Reports making no mention of the Easement.
¶10 In an April 7, 2006, letter HTC’s then-counsel William Gray
of Miller Guymon, P.C., advised Brown of the existence of the
Easement, asserting that “the existence of the easement complete-
ly defeats the purpose of the Lease for our client and constitutes a
material breach.” The letter further claimed that an Easement
upon the land is not one of the Permitted Exceptions to the Lease
and demanded that Brown take steps to “cure the default” of the
Lease within 30 days. Brown refused to take steps to address the
Easement. On or about May 31, 2006, Capilli met with Rand and
Pamela Brown as well as Thomas Hulbert, HTC’s manager, and
discussed his findings with regard to the Easement. In this meet-
ing, Capilli stated that he “would not be able to issue a title insur-
ance policy for the Property, without excepting the Easement
from such policy.”
¶11 Capilli then prepared the second “Commitment for Title
Insurance” (the “Second Report”), dated September 21, 2006, on
behalf the Talon Group. The Second Report was again issued to
Thomas Fox Properties for Lot 27, this time excepting the Ease-
ment.3 	From 	November 	of 	2005 	and 	for 	approximately 	four
3 The second “Commitment for Title Insurance” states in perti-
nent part that the Property is “[s]ubject to a right of way for park-
ing and ingress and egress over a portion of the subject property

HOLLADAY T OWNE C ENTER v. BROWN FAMILY HOLDINGS
Opinion of the Court
No. 20070496 	6
months 	following, 	HTC 	consistently 	made 	late 	payments 	to
Brown, in an apparent attempt to persuade Brown to pursue a
quiet title action for Lot 27. This conduct was stopped upon the
demand of Brown, and HTC subsequently has made consistent,
on-time payments. HTC maintains that, as a result of the Ease-
ment and its inclusion on the Second Report, it cannot obtain the
financing necessary to begin the commercial development that it
bargained for in the Lease.
B
¶12 HTC initiated the present action against Brown by filing a
complaint on August 9, 2006, asserting claims for declaratory
judgment, breach of contract, and specific performance. Brown
filed a motion to dismiss in response. Brown subsequently filed a
counterclaim, alleging breach of contract, breach of good faith and
fair dealing, waste of premises, and unjust enrichment. In Decem-
ber 	2006, 	HTC 	moved 	to 	dismiss 	Brown’s 	counterclaim 	and
moved for summary judgment on HTC’s claim for declaratory
judgment and specific performance. In early 2007, Brown filed a
cross-motion for summary judgment on, among other things, its
breach of contract claim. Oral arguments were heard by Judge
John Paul Kennedy on both the motions to dismiss and the mo-
tions for summary judgment on March 12, 2007.
¶13 On May 1, 2007, Judge Kennedy issued his “Findings of
Fact, Conclusions of Law, and Order.” Three of the trial court’s
“Conclusions of Law” are relevant to this appeal. Judge Kennedy
first concluded that “[t]here is no easement on lot 27,” citing two
bases for this conclusion: (a) “[t]here is no evidence of an ease-
ment on the ground,” and (b) “to the extent that an easement pur-
porting to affect lot 27 is recorded against lot 26, that easement is
void because it was not recorded against lot 27.” “Because there is
no easement affecting lot 27,” Judge Kennedy found that “there is
no basis for the plaintiff’s claims against the defendant and this
action should not have been brought against the landlord causing
the landlord to incur costs.” Finally, “[i]f the easement . . . creates
legal requirements that interfere with plaintiff’s use of its lease-
hold,” Judge Kennedy concluded that “plaintiff has the right un-
as contained in that certain Notice of Contract Recorded August
20, 1980.”

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Opinion of the Court
7 	No. 20070496
der the lease . . . to contest those legal requirements by quiet title
action or otherwise.”
C
¶14 HTC appealed the trial court’s decision, arguing that the
district court erred by (1) “concluding that HTC had standing to
challenge the Easement,” (2) “ruling on the validity of the Ease-
ment as between the existing parties,” and (3) “interpreting the
Lease to place the obligation of challenging the Easement on HTC
rather than the Browns.” Holladay Towne Ctr., L.L.C., v. Brown Fam-
ily Holdings, L.C., 2008 UT App 420, ¶ 6, 198 P.3d 990. Brown filed
a cross-appeal, challenging the trial court’s conclusion that HTC
had not materially breached the Lease. Id. ¶ 14. 4
¶15 The court of appeals, in a decision by Judge Thorne, found
that “[i]n light of the language of the Lease, it is clear that the par-
ties contracted so as to anticipate and resolve the very dispute
presented in this appeal.” Id. ¶ 10. The court then determined that
the language of the Lease “clearly indicates that HTC may, inde-
pendently of the Browns, challenge the validity of the Easement.”
Id. ¶ 12. The court further stated that “[t]he Easement, to the ex-
tent it may have any validity, is clearly a covenant, restriction, or
condition of record that affects both the Premises and HTC’s use
and enjoyment thereof.” Id.
¶16 In a footnote, the court reasoned that there was no need “to
address HTC’s standing concerns, or its argument that the district
court erred in addressing the validity of the Easement as between
the parties.” Id. ¶ 13 n.3. The court reached this conclusion “[i]n
light of [its] determination that HTC may challenge the Easement
regardless of its validity.” Id. Thus, the court concluded that HTC
may challenge the Easement, without finding that HTC had
standing to do so.
¶17 HTC 	filed 	a 	petition 	for 	writ 	of 	certiorari, 	which 	we
granted to resolve the questions (1) whether the court of appeals
4 With regard to the cross-claim regarding material breach for
late payment of rent, the court stated that “[i]f it was intended that
the repeated late payment of rent under the default provision
would itself constitute a default, the parties could have so pro-
vided in the Lease. They did not.” Holladay Towne Ctr., 2008 UT
App 420, at ¶ 16.

HOLLADAY T OWNE C ENTER v. BROWN FAMILY HOLDINGS
Opinion of the Court
No. 20070496 	8
correctly interpreted the contract as requiring HTC to resolve an
undisclosed easement, and (2) whether a lessee may acquire
standing to quiet title by the terms of a Lease.
¶18 This court reviews questions of contract interpretation for
correctness. Fairbourn Commercial, Inc. v. Am. Hous. Partners, Inc.,
2004 UT 54, ¶ 6, 94 P.3d 292; Zions First Nat’l Bank, N.A. v. Nat’l
Am. Title Ins. Co., 749 P.2d 651, 653 (Utah 1988). Likewise, “a de-
termination of standing is generally a question of law, which we
review for correctness.” Mellor v. Wasatch Crest Mut. Ins., Co., 2009
UT 5, ¶ 7, 201 P.3d 1004.
D
¶19 HTC argues that the court of appeals misapplied and dis-
regarded established principles of contract law in (1) failing to
give effect to the plain meaning of the contractual terms of the
Lease, (2) failing to harmonize and give effect to all of its terms,
and (3) creating an absurd result through its interpretation of the
Lease.
¶20 With regard to plain meaning, HTC acknowledges that the
Legal Requirements clause of the Lease gives HTC the responsi-
bility of resolving “all covenants, restrictions, and conditions . . .
to the use, occupancy, possession, operation, maintenance, altera-
tion, repairs, or restoration of any of the Premises,” but argues
that this language does not include easements. HTC suggests that
“covenants, restrictions, and conditions” are terms of art in prop-
erty law and that “an easement is essentially an inherently legal
interest in land, as distinct from a restrictive covenant, which has
been described as but a creature of equity arising out of contract.”
(quoting Jeffrey J. Shampo, Covenants § 3, 20 Am. Jur. 2d).
¶21 HTC further argues that the court of appeals misinter-
preted the term “triple net lease” to suggest that Brown ought not
to incur any “monetary obligations as a result of HTC leasing the
Premises.” HTC argues that a “triple net lease” frees Brown only
from the obligation to pay use-related expenses. HTC then claims
that the court of appeals failed to harmonize all the terms of the
Lease, noting that paragraph 6.3 deals only with the Tenant’s re-
quirements in “the use, occupation, control and enjoyment of the
Premises,” and makes no reference to the Tenant’s responsibilities
regarding the quality of title. HTC further notes that the “Legal
Requirements” definition references only “covenants, restrictions,

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Opinion of the Court
9 	No. 20070496
and conditions” affecting the “use, occupancy, [or] possession of
the land,” but not, like the Easement, its title. HTC argues that the
existence of the Easement on the land is inconsistent with a con-
veyance in fee simple of “all rights and privileges” owned by the
Landlord, and excepting only those “taxes and assessments”
listed in Exhibit B of the Lease.
¶22 HTC further argues that the court of appeals reached an
absurd result, asserting that interpreting the “Legal Require-
ments” language to include an obligation to quiet title will mean
that such language “will be deemed to trump even express repre-
sentations made by the landlord as to the quality/status of title.”
“Such a result,” HTC argues, “will literally dismantle real proper-
ty leasehold law in Utah.”
¶23 Finally, HTC concludes that, although the court of appeals
did not reach the issue of standing, its interpretation of the con-
tract “effectively recognizes and endorses contractual provisions
that confer legal standing.” In HTC’s view, “legal standing cannot
be contractually conferred,” and the Lease accordingly cannot be
construed to impose on HTC an obligation to assert a claim to
challenge the validity of the Easement—a claim it purportedly has
no standing to assert. Standing, HTC notes, is a question of sub-
ject-matter jurisdiction, and in its view parties cannot “confer ju-
risdiction upon the court” by contract.
II
¶24 Although the trial judge found that no valid easement en-
cumbers the Property, we find for reasons explained below that
this case still presents a live controversy. Because the Lease makes
no express warranty that the Property is free of encumbrances and
because the Lease contemplates that HTC will pay all “costs relat-
ing to the property so that the Landlord has no cost or expense
relating to the property during the term or any extension of the
lease,” we conclude that HTC bears the burden of quieting title to
the Property under the Lease. Further, because HTC acquired a
present possessory interest in the Property pursuant to the Lease,
together with the option to purchase the Property, we hold that
HTC has sufficient interest to acquire standing to quiet title under
Utah law.

HOLLADAY T OWNE C ENTER v. BROWN FAMILY HOLDINGS
Opinion of the Court
No. 20070496 	10
A
¶25 Before proceeding to the arguments presented by counsel,
we must first address the question whether this case presents a
live controversy. Ellis v. Swensen, 2000 UT 101, ¶ 25, 16 P.3d 1233
(“Ordinarily we will not adjudicate issues when the underlying
case is moot. . . . A case is deemed moot when the requested judi-
cial relief cannot affect the rights of the litigants.” (internal quota-
tion marks omitted)). Whether or not addressed by the parties, we
may raise questions of mootness on our own motion. Shipman v.
Evans, 2004 UT 44, ¶ 36, 100 P.3d 1151 (“[A] court may properly
raise sua sponte the issue of mootness.”).
¶26 The parties in this case ask us to determine who bears the
responsibility under a lease to remove a supposed “cloud” of title
created by an easement after a court of competent jurisdiction has
determined that no such easement exists. Judge Kennedy found
that “[t]here is no evidence of an easement on the ground and to
the extent that an easement purporting to affect lot 27 is recorded
against lot 26, that easement is void because it was not recorded
against lot 27.” Neither this court nor the court of appeals has
been asked to review the correctness of these conclusions. Brown
observes that “[t]he effect of this unchallenged fact is obvious.
Brown cannot have breached the Ground Lease by refusing to
bring a quiet title action with regard to an easement that does not
exist under Utah law.” Because the Easement creates a “cloud” on
the title, HTC responds that it “is hindered from obtaining financ-
ing for development of or construction of the shopping center on
the Property in the manner contemplated by the Lease.” Conse-
quently, because “reversal would mean that Brown is required to
address the cloud of title caused by the Easement regardless of the
validity or invalidity of the same, the trial court’s determination as
to the validity or invalidity of the Easement is of no moment to
the current cert review.”
¶27 Though we have no reason to doubt Judge Kennedy’s con-
clusions about the validity of the contested easement, his resolu-
tion of that issue binds only the parties to the present action. This
is because the judgment of the trial court does not extend to the
owner of Lot 26, who was never joined. See Fisher v. Davis, 291 P.
493, 494 (Utah 1930) (holding that a decree to quiet title can bind
only the parties to the action). Judge Kennedy stated his concern

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Opinion of the Court
11 	No. 20070496
about the potential limitations of his ruling to the parties, 5 and
both HTC 6 and Brown 7 proceeded to adjudicate the present con-
troversy aware of these limitations but without ever joining the
owner of Lot 26 as a party. Consequently, regardless of what
5 Judge Kennedy articulated this view at the Summary Judg-
ment Hearing:
THE COURT: How could I say that there is an easement
or isn’t an easement unless someone who holds the
easement is here in court?
Judge Kennedy similarly characterized his ruling as to the exis-
tence of the Easement at the Hearing on the Proposed Order:
THE COURT: I think it’s correct to say that that doesn’t
necessarily mean there is no easement because I sup-
pose someone could come in and establish an easement
with evidence that we don’t have right now.
* * *
THE COURT: [I]t just extends to the litigants and others
who might be bound by other rules of procedure.
6 Counsel for HTC made a similar observation at the Hearing on
the Proposed Order:
MR. MILLER: First, I don’t think there’s a finding that
there is no easement generally but only as between
these two parties. . . . Your [sic] finding that there is no
easement with regard to the lease and these two parties.
7 Counsel for Brown likewise said the following at the hearing:
MR. ATKIN: The Court’s judgment was that there is no
easement and while it may be true that a third party
might be able to come in and say, well, I’m not bound
by that judgment, that burden should be on the third
party that’s coming in to try and make that kind of an
argument. There’s no reason for this court to couch its
decision in caveats that there might be somebody out
there that might be able to assert that they are not
bound by the judgment. The court had before it two
parties and the Court ruled that there was no easement
based on the evidence that was presented to the court.

HOLLADAY T OWNE C ENTER v. BROWN FAMILY HOLDINGS
Opinion of the Court
No. 20070496 	12
would seem to have been a more efficient, less costly, and ulti-
mately more reasonable resolution of this case (i.e., a quiet title
action with the owner of Lot 26 joined as a party), the parties have
chosen instead to adjudicate the question of who is obliged to
quiet title. In the absence of the owner of Lot 26, the title could not
be quieted, and the question of whose duty it is to quiet the title
continues to present a live case and controversy.
B
¶28 Despite HTC’s repeated assertions to the contrary, the
Lease at issue in this case does not warrant that the Property is
free of encumbrances. Brown has merely delivered to HTC a pos-
sessory interest of everything that Brown possessed in the Proper-
ty.
¶29 HTC relies primarily on three Lease provisions to assert
that Brown represented that it was conveying the Property free of
encumbrances: (1) the Lease’s characterization of Brown as the
“fee owner” of a “fee estate”; (2) Brown’s conveyance of “all
rights, privileges, easements, and appurtenances” of the Premises
or “all surface easements, rights, titles, and privileges”; and (3) the
Permitted Exceptions clause. None of these provisions, however,
contains any warranty that the title is free from encumbrances.
¶30 The Lease characterizes Brown as the “fee owner” of a “fee
estate.” HTC contends that an easement is an encumbrance that
“undermine[s] fee simple title.” We disagree. The existence of an
easement is not inconsistent with a fee simple ownership.8 Be-
8 See Swango Homes, Inc. v. Columbia Gas Transmission Corp., 806
F. Supp. 180, 184 (S.D. Ohio 1999) (“An easement implies neces-
sarily a fee in another, and hence it is a right by reason of such
ownership to use the land for a special purpose, and one not in-
consistent with the general property in the land of the owner of
the fee.”) (quoting 36 OHIO J UR . 3d, Easements and Licenses § 53
(1982)); see also, North Union Canal Co. v. Newell, 550 P. 2d 178, 179
(Utah 1976) (discussing the “dichotomy of interests” between fee
owners of easement owners); D AVID A. T HOMAS & J AMES H.
BACKMAN, U TAH R EAL P ROPERTY LAW § 2.02(a)(2) (“The fee simple
absolute may be subject to liens and other charges against it, but oth-
erwise is not subject to rights held by third parties. An attempted
limitation over is repugnant to the grant of a fee simple absolute,

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Opinion of the Court
13 	No. 20070496
cause fee ownership is not inconsistent with the existence of an
easement, HTC cannot rely on Brown’s representations of fee
ownership to suggest it was promised the Property free of en-
cumbrances.
¶31 The Lease likewise delivers to HTC “all rights, privileges,
easements, and appurtenances” of Brown and “all surface ease-
ments, rights, titles, and privileges.” The phrase “all rights, privi-
leges, and appurtenances” is a familiar phrase in Utah Property
Law, as it is featured on the Special Form Deeds, authorized in the
Utah Code. U TAH C ODE A NN. §§ 57-1-12, 12.5, & 13 (2010). This
phrase occurs not just on the Warranty Deed and Special Warran-
ty Deed forms, id. at §§ 57-1-12, 12.5, however, but also on the
Quitclaim Deed form, id. at § 57-1-13, which states:
A quitclaim deed when executed as required by law
shall have the effect of a conveyance of all right, title, in-
terest, and estate of the grantor in and to the premises
therein described and all rights, privileges, and appurten-
ances 	thereunto 	belonging, 	at 	the 	date 	of 	the 	con-
veyance.
Id. (emphasis added). “A quitclaim deed conveys whatever inter-
est the grantors possess at the time,” United States v. Wooten, 40
F.2d 882, 884 (10th Cir. 1930), which may include any encum-
brances upon the property. The analogy to these Lease forms is
striking. The phrase “all rights, privileges, and appurtenances,”
and its corollaries, cannot be said to convey interest free from en-
cumbrances, if that phrase occurs in the standard form Quitclaim
Deed. It should likewise be noted that both the Warranty Deed
form and the Special Warranty Deed form contain express warran-
ties that the premises are “free from all encumbrances.” U TAH
C ODE A NN. §§ 57-1-11(2)(c)(iv), 12.5(2)(b)(i). Significantly, both the
Quitclaim Deed form and the Lease at issue in this case contain no
but an easement is not.”) (emphases added); Kelley v. Tomas, 783
A.2d 1226, 1235, 1247 (Conn. App. Ct. 2001) (“[P]laintiff’s claim
that the court could not have found fee simple ownership of the
real property in question when . . . the property was encumbered
by an easement is without merit. It is well established that the
easement has no effect on the plaintiff’s fee ownership. . . .
[P]laintiff’s contention that property that is owned in fee simple
cannot be subject to an easement is absolutely wrong.”).

HOLLADAY T OWNE C ENTER v. BROWN FAMILY HOLDINGS
Opinion of the Court
No. 20070496 	14
such language. Thus, by analogy to Warranty, Special Warranty,
and Quitclaim Deeds under Utah law, the Lease bears perhaps the
greatest resemblance to a Quitclaim Deed, and the language of the
demise does no more than to convey the interest possessed by
Brown at the time of the conveyance—an interest that may have
included an easement.
¶32 HTC notes that the demise in paragraph 1.1 is subject only
to a single Permitted Exception, “Property taxes and Assessments
accruing for the year 2005 and thereafter.” HTC then notes that
the exceptions “relate to the quality of title held by Brown, as lan-
dlord, and make no mention of any easement or other encum-
brance on the Property.” But the Permitted Exceptions are entirely
derivative of the quality of title conveyed in the Demise. (The
Demise is in paragraph 1.1 of the Lease and the Permitted Excep-
tions clause is listed just below in 1.1(a)). Brown has simply con-
veyed all the rights and obligations it has in the Property, subject
only to a single permitted exception.
¶33 Because there is no warranty that the Property is conveyed
free from any encumbrance in the Demise, and because the Per-
mitted Exceptions are derivative of the Demise itself, HTC cannot
argue that it was promised a title free from encumbrances. Nor
can HTC persuasively assert that there is anything “absurd” (to
use HTC’s term)—or even inconsistent—about a construction of
the Lease that would oblige HTC to quiet title, as the Lease simply
does not include any representations about the quality or status of
the landlord’s title.
C
¶34 Having determined that the Lease contains no warranty
with respect to the Easement, we next consider whether the Lease
assigns to either party the obligation to quiet title in the event an
undisclosed encumbrance is discovered. The provisions of the
Lease make clear the parties’ intention that HTC would bear the
risk of any unforeseen expenses relating to the Property and that,
consequently, HTC had the option to either ignore the Lease or to
seek to quiet title at HTC’s own expense.
¶35 The first such Lease provision is the “Compliance with
Laws” clause, read together with the corollary definition of “Legal
Requirements.” These portions of the Lease state:

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Opinion of the Court
15 	No. 20070496
6.3 Compliance with Laws. Subject to the Provisions of
Article 8 below [requiring compliance with “Environ-
mental 	Laws 	affecting 	the 	Premises”], 	Tenant 	shall
comply with all Legal Requirements in the use, occupa-
tion, control and enjoyment of the Premises and in the
prosecution and conduct of its business thereon. Tenant
shall have the right, at its own cost and expense, to con-
test or review by appropriate legal or administrative
proceeding the validity or legality of any such Legal
Requirements, [etc.]
The Tenant is required to comply with both the Legal Require-
ments defined in the Lease and with Article 8, which deals with
“Environmental Matters.” The Lease defines these “Legal Re-
quirements” as follows:
“Legal Requirements” means all present and future
laws, statutes, requirements, ordinances, orders, judg-
ments, regulations, administrative or judicial determi-
nations, even if unforeseen or extraordinary, of every
governmental or quasi-governmental authority, court
or agency claiming jurisdiction over the Premises now
or hereafter enacted or in effect (including, but not li-
mited to, Environmental Laws and those relating to ac-
cessibility to, usability by, and discrimination against,
disabled individuals) and all covenants, restrictions, and
conditions now or hereafter of record which may be applicable
to Tenant or to all or any portion of the Premises, any of
the Premises, even if compliance therewith necessitates
structural changes to the Improvements or the making
of Improvements, or results in interference with the use
or enjoyment of all or any portion of the Premises.
(emphasis added). Under this clause, the Lease specifically pro-
vides that if there is a “covenant, restriction, and condition” that
“results in interference with the use or enjoyment” of the land,
then the Tenant may either accept the interference or exercise the
right to challenge it. The question raised by the parties is whether
“all covenants, restrictions, and conditions” includes the notion of
an easement.
¶36 HTC contends that applying the term “covenants, restric-
tions, and conditions” in the definition above to the easement at

HOLLADAY T OWNE C ENTER v. BROWN FAMILY HOLDINGS
Opinion of the Court
No. 20070496 	16
issue in this case “ignores the ordinary and established difference
between the encumbrance-based term easement and the contract-
based nature of covenants, conditions, and restrictions.” This ar-
gument is facially plausible. At common law, there was a distinc-
tion between legally enforceable easements and restrictive cove-
nants enforceable in equity.9 Restrictive covenants generally re-
strict the owner’s use of the land and include restrictions on resi-
dential use, the size or height of buildings, the keeping of animals,
etc. David A. Thomas & James H. Backman, Utah Real Property
Law § 2.03(b). In cases in which the related phrase “covenants,
conditions, and restrictions” or “CC&Rs” has occurred, the restric-
tions at issue were similar to the land-use restrictive covenants
just referenced.10 In contrast, affirmative easements like the one in
the present case permit a particular use by a third party, such as
the ingress and egress right recorded on the chain of title for Lot
26.11 Though Brown rightly observes that “the terms negative ease-
9 Jeffrey J. Shampo, Covenants § 3, 20 Am. Jur. 2d; see also R ES-
TATEMENT OF P ROPERTY § 6 (1936) (“[E]quitable interests may be
destroyed by a transaction which would not result in the destruc-
tion of legal interests. Thus an equitable interest in land is de-
stroyed by the transfer of the legal interest in the land to a pur-
chaser for value and without notice of the equitable interest, when
a legal interest in land would not be so destroyed. . . . A is the
owner of Blackacre and B is the owner of Whiteacre which adjoins
it. A grants an easement of way over Blackacre to B and his heirs
and covenants with B that he will not build a garage on Blackacre
for ten years. A transfers Blackacre to C, a purchaser for value and
without notice of the grant of the easement of way or of the cove-
nant. In the absence of a statute C takes Blackacre subject to the
easement of way but free from the restrictions of the covenant.”).
10 See e.g., Davencourt at Pilgrims Landing Homeowners Ass’n v.
Davenport at Pilgrims Landing, L.C., 2009 UT 65, ¶¶ 3–6, 221 P.3d
234; Moler v. CW Mgmt. Corp., 2008 UT 46, ¶ 2, 190 P.3d 1250; Dan-
sie v. Hi-Country Estates Homeowners Ass’n, 1999 UT 62, ¶ 9, 987 P.
2d 30.
11 R ESTATEMENT (T HIRD ) OF P ROPERTY: SERVITUDES § 1.2 (2000)
(“An easement creates a nonpossessory right to enter and use land
in the possession of another and obligates the possessor not to in-
terfere with the uses authorized by the easement.”).

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Opinion of the Court
17 	No. 20070496
ment and restrictive covenant are often used interchangeably,” Can-
yon Meadows Home Owners Ass’n v. Wasatch County, 2001 UT App
414, ¶ 12 n.5, 40 P.3d 1148 (emphasis added), neither term is em-
ployed in the Lease. Nor is the affirmative easement at issue in the
present case properly characterized as either a restrictive covenant
or a negative easement. 12
¶37 It is not at all clear, however, that the Lease’s phrase “cove-
nants, restrictions, and conditions” is a reference to the familiar
term “CC&Rs.” As Brown observes, the phrase “covenants, condi-
tions, and restrictions” or “CC&Rs” is “nowhere contained in the
Ground Lease.” Instead, the Lease uses the terms in a different
order, referring to “all covenants, restrictions, and conditions now
or hereafter of record.” Further, of the cases referenced above, in
which “CC&Rs” are discussed, the real property at issue was pur-
chased and not subject to a Lease agreement. 13
¶38 Thus, it seems possible that the term “restrictions” was
used in a broad, colloquial sense in the Lease to refer to any limi-
tation on the use of the Property. Under this interpretation, the
present Easement would properly be classified as a restriction, in
that the easement in question is alleged by HTC to interfere with
its ability to secure financing to develop the Property. It is also
possible, on the other hand, that the phrase “covenants, restric-
tions, and conditions” was an inartful invocation of a familiar
term of art (CC&Rs). Under that construction, the affirmative
easement at issue here may not be expressly implicated.
¶39 Ultimately, we need not choose between these two alterna-
tive constructions of the phrase “covenants, restrictions, and con-
ditions.” Even if the Legal Requirements Clause does not express-
ly assign the responsibility to HTC to resolve affirmative ease-
ments, it is not the only provision of the Lease that expresses the
12 See R ESTATEMENT (T HIRD) OF P ROPERTY: SERVITUDES § 1.2 cmt b
(“The term ‘easement’ . . . describes an ‘affirmative’ easement, the
right to make use of the land of another. A ‘negative’ easement,
the obligation not to use land in one’s possession in specified
ways, has become indistinguishable from a restrictive covenant.”);
id. at § 1.3 cmt c (“Negative easements are the same as restrictive
covenants; ‘negative easement’ dropped.”).
13 See supra note 10.

HOLLADAY T OWNE C ENTER v. BROWN FAMILY HOLDINGS
Opinion of the Court
No. 20070496 	18
parties’ overarching intent to allocate unanticipated costs arising
from the Lease to HTC.
¶40 Such intent is confirmed in paragraph 3.1 of the Lease. Un-
der this clause, Brown is relieved of the obligation to pay three
particular types of expenses: (1) taxes, (2) maintenance, and (3)
insurance during the pendency of the agreement.14 In addition, in
the same paragraph, the Lease makes the following sweeping
statement:
[T]enant agrees that the amount of annual rent will be
paid without offset and that tenant will pay all imposi-
tions and costs relating to the property so that the Landlord
has no cost or expense relating to the property during the
term or any extension of the lease.
(emphasis 	added). 	This 	language 	extends 	HTC’s 	obligation
beyond the three particular expenses contemplated within the
“triple net” Clause. It allocates to HTC any impositions, costs, or
expenses relating to the Property. There is no limitation to the
type of expense referenced, except that it must be related to the
Property.
¶41 HTC asserts that “triple-net leases are limited to only costs
and expenses associated with ongoing use of the property.” But
the Lease does more than relieve Brown of any use obligations
under the triple-net provision. It requires HTC to pay all imposi-
tions, costs, and expenses relating to the Property during the term
of the Lease. The expense of quieting title to the Property unques-
tionably “relate[s] to the property,” and we accordingly conclude
that the parties allocated the burden of that expense to HTC under
the Lease.
¶42 Because the Lease expressly allocates the burden of any un-
foreseen expense relating to the Property during the term of the
Lease to HTC, the court of appeals correctly concluded that HTC
could not compel Brown to quiet title to the Property.
D
¶43 We also find that HTC has standing to pursue a quiet title
action. Under Utah law, “[a] person may bring an action against
another person to determine rights, interests, or claims to or in
14 See James v. CIR, 899 F. 2d 905, 906 (10th Cir. 1990).

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Opinion of the Court
19 	No. 20070496
personal or real property.” U TAH C ODE A NN . § 78B-6-1301 (2010).
Further, parties have standing to bring suit if they can identify an
injury that was caused by the defendant and that was redressable
by the court. Brown v. Div. of Water Rights, 2010 UT 14, ¶ 18, 228
P.3d 747. Unlike the federal requirements for standing, the injury
need not be “actual or imminent”; an “actual or potential” injury is
sufficient. Cedar Mountain Envtl, Inc. v. Tooele Cnty., 2009 UT 48, ¶
9, 214 P.3d 95 (emphasis added) (citing Utah Chapter of the Sierra
Club v. Utah Air Quality Bd., 2006 UT 74, ¶ 23, 148 P.3d 960).
¶44 HTC argues that “tenants do not have standing to address
ownership interests,” and, consequently, the Lease could not pos-
sibly be interpreted as requiring that HTC pursue the quiet title
action. HTC conspicuously fails to cite a single authority for this
proposition. Nor does HTC make any reference to the quiet title
statute itself. See U TAH C ODE A NN. § 78B-6-1301. Instead, HTC
marshals authorities in support of two related, but ultimately dis-
tinct, propositions: (1) parties cannot confer standing upon one
another by agreement; and (2) standing is a jurisdictional issue,
and parties cannot add to or take away from the subject-matter
jurisdiction of the court.
¶45 HTC cites three cases for the notion that parties cannot con-
fer standing by contract. Steel Co. v. Citizens for a Better Env’t, 523
U.S. 83, 95 (1988); Rosen v. Tennessee Com’r of Finance & Admin., 288
F.3d 918, 931 (6th Cir. 2002); and Lacombe v. City of Cheyenne, 733
P.2d 601, 603 (Wyo. 1987). None of these cases says any such
thing.
¶46 In Steel Co., the United States Supreme Court addressed the
question whether the citizen-suit provision of the Emergency
Planning and Community Right-To-Know Act of 1986, authorizes
suits for purely past violations, and whether plaintiffs would have
standing to challenge such past violations when there could be no
effective remedy. 523 U.S., at 85. The Court determined that be-
cause the plaintiffs did not have standing to bring the suit, the
Court could not reach the merits of the case. The Court further ob-
served that “[e]very federal appellate court has a special obliga-
tion to ‘satisfy itself not only of its own jurisdiction, but also that
of the lower courts in a cause under review,’ even though the par-
ties are prepared to concede it.” Id., at 95 (internal quotation

HOLLADAY T OWNE C ENTER v. BROWN FAMILY HOLDINGS
Opinion of the Court
No. 20070496 	20
marks omitted).15 There is a difference between parties’ inability
to “concede” the subject-matter jurisdiction of a Court, however,
and the ability of parties to contract for interests sufficient to con-
vey standing. Parties may not add to or take away from the power
of the court to hear a particular class of cases; but parties routinely
bargain for rights or obligations that may give rise to justiciable
claims.
¶47 Likewise inapposite is the holding of the United States
Court of Appeals for the Sixth Circuit in Rosen. There the court
examined the availability of certain benefits for “uninsureables”
enrolled in Tennessee’s TennCare program. Rosen, 288 F.3d at
920–22. The plaintiffs, representing a class of “present and future
TennCare applicants and beneficiaries,” challenged a change in
eligibility requirements that would affect beneficiaries of the pro-
gram who enrolled after October 1, 2001. Id. at 921–22. All of the
plaintiffs had enrolled prior to that date, but argued that they had
standing because they were suing on behalf of unnamed members
of their class. Id. at 923. The case stands for the proposition that a
party “must assert his own legal interests, rather than those of
third parties.” Id. at 931 (internal quotation marks omitted). In the
present case, HTC does assert its “own legal interests.” The Lease
grants HTC a present possessory interest in the Property, as well
as an option to purchase the Property within five years of the ex-
ecution of the Lease. HTC has also asserted that the alleged
“cloud” on the title of the Property has prevented it from obtain-
ing financing. In suing to quiet title, HTC would therefore be as-
serting its own interests, and not those of a third party.
¶48 Finally, HTC cites the Wyoming Supreme Court’s Lacombe
case in which that court stated, “We do not permit parties to con-
fer standing by agreement.” Lacombe, 733 P.2d at 603. But the
agreement at issue in Lacombe is not a contract. Instead, in La-
combe, a criminal defendant challenged the constitutionality of a
Wyoming law that “inhibits the authority of the prosecuting at-
torney to enter into plea bargains.” Id. at 602. This inhibition, the
defendant claimed, was “an unconstitutional invasion by the leg-
15 There was no contract at issue in Steel Co., nor was standing
assigned to one party or another based upon any contract or
agreement. Instead, the standing argument was derived from a
federal statute. Steel Co., 523 U.S at 87–88.

Cite as: 2011 UT 9
Opinion of the Court
21 	No. 20070496
islative branch of government of the prerogatives of the executive
branch.” Id. The municipality simply stipulated that prior to the
passage of the Wyoming law, the defendant would have been
permitted to enter a plea. Id. at 603. This is what was meant by the
prohibition on finding standing by agreement. A criminal defen-
dant did not have standing to raise a separation of powers issue
on behalf of the municipality simply because the municipality sti-
pulated that under pre-existing law the defendant would have
been able to enter a plea.
¶49 The notion that “standing cannot be conferred by contrac-
tual agreement” is far from “established law.” HTC cites no case
suggesting that parties cannot grant, by agreement, legal interests
sufficient to confer standing. And in fact, the authority supporting
standing by contractual assignment of legal interests is plentiful.
¶50 [T]he law favors the assignability of contractual rights,”
Clark v. Shelton, 584 P. 2d 875, 877 (Utah 1978) and there are a
number of circumstances in which standing may be contractually
obtained. A party may assign its right to sue for breach of con-
tract. Hamilton v. Maryland Casualty Co., 41 P.3d 128, 132 (Cal.
2002); Deatsch v. Fairfield, 397-98, 233 P. 887, 891 (Ariz. 1925). A
third party may also acquire a contractual interest in another’s tort
claim, e.g., through subrogation. See U TAH C ODE A NN. § 31A-21-
108 (2010); State Farm Mut. Auto. Ins. Co. v. Northwestern Nat’l Ins.
Co., 912 P.2d 983, 985 (Utah 1996). There is accordingly no reason
to doubt the ability of the parties to the Lease to assign the right to
sue to quiet title to HTC.
¶51 HTC also observes that “standing is a jurisdictional re-
quirement” and asserts that “parties cannot, by agreement, confer
jurisdiction upon the court.” See Phoenix Indemnity Ins. v. Smith,
2002 UT 49, ¶ 5, 48 P.3d 976. Neither of the propositions is contro-
versial, nor are they relevant to the present inquiry. There is no
suggestion that the agreement at issue seeks to “confer jurisdic-
tion” in the sense in which those terms are used in the case law.
¶52 The question presented in this case has never been whether
or not a Utah court would have jurisdiction to adjudicate the con-
templated quiet title action. If that had been the question, the an-
swer could have been easily resolved. The parties here are both
Utah-registered limited liability companies, and the land in ques-
tion is located within the boundaries of the state. District judges

HOLLADAY T OWNE C ENTER v. BROWN FAMILY HOLDINGS
Opinion of the Court
No. 20070496 	22
are granted “original jurisdiction in all matters civil and criminal”
by the Utah Constitution and by statute. UTAH C ONST . art. VIII, §
5; U TAH C ODE A NN. § 78A-5-102 (2010). While it is true that parties
may not add to or subtract from that power by agreement or sti-
pulation, that is an altogether different question from whether the
parties may, by negotiating the terms of a contract, grant to one
another sufficient stake in the outcome of a dispute to satisfy the
standing requirement.
¶53 Through the Lease, HTC acquired a present possessory in-
terest in Lot 27. The existence of the undisclosed easement pre-
sented a potential injury to HTC, and in light of HTC’s alleged
failure to secure financing for the improvements, the Easement
also caused an actual injury—one easily redressable by a quiet
title order. The quiet title statute does not limit the availability of
the quiet title action to fee owners. The statute says simply that
“[a] person may bring an action against another person to deter-
mine rights, interests, or claims to or in personal or real property.”
U TAH C ODE A NN. § 78B-6-1301 (2010) (emphasis added). Whatever
the semantic range of the terms “person” and “interest” in the sta-
tute, we have little trouble concluding that a tenant to a long-term
ground lease that contemplates the construction of a shopping
center and that contains an option to purchase after five years for
which consideration is paid falls comfortably within the ambit of
the statute.
¶54 “Standing to bring a quiet title action to perfect title is li-
mited to parties who could acquire an interest in the property
created by the court’s judgment or decree.” Elder v. Nephi, 2007 UT
46, ¶ 20, 164 P.3d 1238. The cases relied upon the Elder Court,
however, were cases involving plaintiffs with no interest—not a
present, possessory leasehold interest in the land in question.16
HTC’s characterization of the Elder rule as designed “to ensure
that any court order in a quiet title action actually awards title to
one of the parties,” overstates this Court’s holding, which limits
16 See Andrus v. Bagley, 775 P.2d 934, 935 (Utah 1989) (“Because
[plaintiff] had no interest, he had no standing to bring the [quiet
title] action.”); Pender v. Bird, 224 P.2d 1057, 1060 (Utah 1950)
(“[P]laintiff’s connection with the record title was through a deed
which conveyed nothing. Therefore he had no standing in court to
object to a decree quieting defendants’ title against him.”).

Cite as: 2011 UT 9
Opinion of the Court
23 	No. 20070496
standing to “those who could acquire an interest,” not those who
could acquire title. This holding is consistent with the role of the
quiet title statute, which is simply “to determine, rights, interests,
or claims” of the parties. U TAH C ODE A NN. § 78B-6-1301. HTC has
not cited a single case for the proposition that lessees lack stand-
ing to quiet title. Such suits have in fact been allowed, but fly un-
der the radar because they are uncontroversial. See 51 A.L.R. 2d
1227, at *2 (“[M]any cases brought by lessees as complainants
were entertained by courts without the plaintiff’s status as lessee
being put at issue.”). Rather than acting “in contravention of law
and sound public policy,” a holding recognizing the standing of
lessees to quiet title would be consistent with a rule of law that is
elsewhere considered both traditional and quotidian. Id. (“[A] suit
to quiet title may be maintained by a lessee against any per-
son . . . who claims an adverse estate or interest in the leasehold,
for the purpose of determining the adverse claim.”).17
¶55 HTC acquired a present possessory interest in the Property
and contracted for an option to purchase and to build permanent
improvements on the Property. Because standing to quiet title is
conferred on “person[s]” with an interest in “real property,” we
conclude that HTC had standing to quiet title on the Property.
III
¶56 The court of appeals correctly concluded that Brown was
under no obligation under the Lease to quiet title to Lot 27 to re-
move the alleged cloud created by the purported Easement. Be-
cause HTC had standing to quiet title under Utah’s quiet title sta-
tute and a contractual responsibility to cover any expenses relat-
ing to the Property under the Lease, the judgment of the court of
appeals is affirmed.
___________
17 See also Willing v. Chicago Auditorium Ass’n, 277 U.S. 274 (1928);
German-American Savings Bank v. Gollmer, 102 P. 932 (Cal. 1909);
Upchurch v. Sutton Bros, 134 S.W. 477 (Ky. Ct. App. 1911); Webster
v. Tuttle, 22 A. 167 (Me. 1891); Peterson v. Vak, 70 N.W.2d 436 (Neb.
1955); Cooper v. Gordon, 164 N.W. 21 (N.D. 1917).

HOLLADAY T OWNE C ENTER v. BROWN FAMILY HOLDINGS
Opinion of the Court
No. 20070496 	24
¶57 Associate 	Chief 	Justice 	Durrant, 	Justice 	Parrish, 	Justice
Nehring, and Judge Howard concur in Justice Lee’s opinion.
¶58 Having disqualified herself, Chief Justice Durham did not
participate herein; District Court Judge Fred D. Howard sat.