A federal judge ruled in favor of a local neighborhood alliance being sued for millions of dollars by a land developer who alleged the neighbors improperly interfered with plans to build on the Bar J Chuckwagon property. The judge also credited the neighbors with actively participating in local government and pressing Teton County to follow its own rules.
U.S. District of Wyoming Judge Scott W. Skavdahl ruled that HRH LLC’s plans to build 69 homes on the 21.2-acre parcel just south of the Teton Pines golf course wasn’t a sure bet.
Skavdahl’s 51-page decision brings the seven-year-long, multimillion-dollar dispute to a close.
“The cumulative evidence presented at trial supports the fact that approval of HRH’s application to amend the Bar J Master Plan was unlikely, at best,” Skavdahl’s decision reads.
The March 31 ruling comes almost a year after a jury trial ended June 29. Skavdahl found no malicious intent on the part of Alliance of Route 390, a nonprofit formed in 2015 by residents who lived primarily on the Teton Pines Country Club property next to the Bar J.
The Alliance and some of its core members named as individual defendants said their appeals of the proposed development were necessary to get the developer and county to comply with the Teton County Land Development Regulations and Comprehensive Plan.
HRH, a developer duo of Steve Hancock and Tom Reynolds, filed the suit in June 2018, alleging the neighbors used baseless appeals to willfully prevent their application from advancing through the county approval process. HRH ultimately ran out of time on its agreement with Bar J to develop the property and withdrew the application.
“Defendants believed [the approval of HRH’s application] would have adversely impacted traffic, wildlife, property values, and the general quality of life along Teton Village Road,” Skavdahl’s ruling said. “Ultimately, this Court finds Defendants’ conduct in the filing of appeals does not constitute improper interference.”
Skavdahl’s decision contained three pertinent findings in favor of the neighbors: that their actions were taken in good faith, that their actions did not cause HRH to lose its option to purchase the Bar J land and that HRH failed to show it sustained any damages.
“It’s a win for the Comprehensive Plan,” said Jerry Kitchen, one of the defendants.
The Jackson/Teton County Comprehensive Plan is a vision document that guides the county in creating land development regulations. Although it carries no legal significance, it categorizes the different types of areas within the county, allowing for an increased density of housing in some areas while preserving other areas from development.
“That’s the nature of the preservation of the Bar J property,” Kitchen said. “The community spent over $600,000 over five years to get that plan approved.” HRH’s development “would have eviscerated the ideas and goals of the Comprehensive Plan, so we thought that was extremely important to preserve from the community point of view.”
HRH was seeking $14 million in damages to recover both the lost profits from the 69-unit development proposal, the amount of the option contract itself and the amount it expended pursuing the proposal.
These damages were purely speculative, Skavdahl ultimately ruled, since both Hancock and Reynolds testified that neither contributed any funds to the LLC. Frank Lyons of First Interstate Bank also testified he would not have loaned money to HRH to purchase the property.
“To fund the cost of preparing plans and pursuing the Bar J Property purchase and development, HRH entered into an agreement to borrow $400,000 on the terms that the lenders/investors would receive threefold return if the project was approved,” Skavdahl’s ruling said. “As was testified to by Nannette Beckley, if the project was never approved, the lenders/investors would receive nothing.”
Steve Hancock declined to comment on the ruling, saying “our company policy is not to comment on ongoing litigation.” He also declined to say whether HRH would appeal the decision.
HRH alleged it lost over $21 million in expected profits from the proposed development. But Skavdahl ruled “such a finding is fatally flawed because it is based upon the false assumption that the application to amend the Bar J Master Plan would have been approved by the County.”
HRH first planned to develop the Bar J property by transferring unused development rights from Teton Pines to Bar J. The county redirected HRH to amend the Bar J Master Plan. In 2017 former county planner Rob Hurley told HRH to apply for a planned use development permit, despite the amendment in the LDRs prohibiting PUDs.
Skavdahl’s ruling cited testimony of former Principal Planner Hurley and former Teton County Planning Director Bill Collins, who cited a number of issues regarding water and sewer, traffic, housing concerns and problems with the development’s density, specifically with respect to wildlife migration, which led Hurley to recommend denying HRH’s application.
The case also highlighted how the neighbors stepped in to hold county officials to their own land development rules, which they were not following.
Skavdahl’s ruling bluntly acknowledged the county’s “apparent ongoing disregard of the PUD prohibition and the property’s zoning.”
“The Defendants undertook a public process through means identified in County regulations, which presents an important interest in active participation in local government,” Skavdahl’s ruling said.
“We were surprised by the county’s apparent ignoring its own rules,” Kitchen said. “We were never quite sure why that happened. I still don’t know why that occurred.”
“The decision vindicates our almost seven years of opposition to a proposed project which failed to comply with existing zoning, the County LDR’s and the Comp Plan,” a letter sent out by the Alliance said. “This was a community undertaking, and it has achieved an outcome which should benefit the community, as well.”
Leah Schwartz, attorney for the Alliance, said the case fits a wider pattern of what professor George Pring, emeritus of law at the University of Denver, has coined “SLAPPs,” or “strategic lawsuits against public participation.” A SLAPP lawsuit is intended to intimidate and silence critics by forcing them into burdensome litigation.
“It’s highly unfortunate that this effort landed my client in federal court and exposed the group to nearly four years of costly and consuming litigation,” Schwartz said. “The defendants were staring down a claim in excess of $20 million, but the Alliance stood up to the threat of that claim, which in my view took a lot of courage and resolve.”
Kitchen and his wife, Diana, were the last two defendants standing. Three other Alliance members settled before the case went to trial.
Other attorneys have said it doesn’t quite qualify as a SLAPP suit because HRH’s option to buy the property had already disappeared when it brought the suit against the neighbors and, therefore, the motive to intimidate them out of meddling didn’t quite apply.
Twenty-six states have anti-SLAPP legislation, but Wyoming is not one of them.
“These laws are designed to encourage participation in matters of public significance and safeguard the constitutional right of citizens to petition the government and speak freely on matters of public concern,” Schwartz said.
As a result of this case, the county has amended its process in responding to citizen-filed appeals. To avoid the potential for using the appeal system to slow down development processes, the county now holds a hearing within 20 days of receiving the appeal to determine whether the parties have legal standing and are aggrieved parties. The hearing is held in front of county commissioners.
In January 2021 the Bar J Property sold for $13 million to Running Deer LLC. An official for the county confirmed that the plans for development are within the current zoning requirements of one home for every 3 acres.