There is a case that Park City Mountain Resort (PCMR) executives may have committed attempted fraud in backdating a letter to make it look like they renewed a critical land lease in time, 3rd District Judge Ryan Harris said in an order released Tuesday.
But he also ruled that Talisker Land Holdings' attorneys won't have access to 22 internal PCMR emails when they begin deposing Park City Resort executives Wednesday in an effort to prove that point.
After reviewing the emails in private, Harris said they were protected by attorney-client privilege and that he did not find their content suggested "any intent on the part of the Park City parties to seek or obtain legal advice … to commit what [they] knew or reasonably should have known to be a crime or fraud."
Harris heard arguments on the case Friday.
So depositions will begin without the emails exchanged 2½ years ago between PCMR executives, on the weekend when they apparently discovered the lease was expiring. PCMR President Jenni Smith will be the first of a half dozen company officials to be questioned by Talisker in PCMR's lawsuit to extend its lease of 2,800 acres of Talisker-owned mountainside used for skiing since the mid-1960s.
That lease expired on April 30, 2011. In an earlier letter to the court, PCMR attorney Alan Sullivan acknowledged that a letter dated April 29, 2011, expressing PCMR's intention to extend the lease, actually was written on May 2, 2011, after the lease expired.
That was an honest mistake, he said, adding that PCMR officials believed the lease was going to be extended until 2031 and had invested millions of dollars in improvements with that in mind.
By contrast, Talisker attorney John Lund contended that changing the date on the renewal letter "was done to deceive us. It was done to desperately try to hold onto the resort after making an obvious mistake."
Sullivan's letter admits the fraudulent behavior, he added, and the emails would have provided details that proved "there [was] a scheme afoot."
Both sides viewed Harris's rulings in a positive light.
PCMR's Smith said that, in court, "we will show that PCMR acted responsibly and in good faith and that the agreements extending our use of the leased land are valid."
Lund said "our case that they clearly backdated the letter and did so deliberately is intact. … This idea we are not going to see what's in those emails doesn't change that and we are continuing to move forward with our investigation into the details of that."
Last month, Talisker served PCMR with an eviction notice. Vail Resorts Inc., which Talisker brought in to run nearby Canyons Resort and to take the lead on the litigation, later said it had no intention of shutting down PCMR this winter.
PCMR's parent company, Park City-based Powdr Corp., owns the resort's base facility and a lower stretch of the mountain, including the Superpipe. Just about everything above that is owned by Talisker. But without base facilities, Vail cannot run the resort either, raising community concern that this dispute between ski-industry titans could shut down PCMR this winter, on its 50th anniversary.