DAVIS, Judge:
¶ 1 Grassy Meadows Airport, Inc.; Sky Ranch Development, Inc.; and Michael O. Longley (collectively, Sky Ranch) appeal the trial court's ruling in favor of Grassy Meadows Sky Ranch Landowners Association (the Association). We affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.
¶ 2 The Association is comprised of the lot owners of the Grassy Meadows Sky Ranch Development located near Hurricane, Utah.
¶ 3 In November and December 2001, Sky Ranch appeared before the Washington County Planning Commission to request a zoning change that would allow the construction of a fixed based operation (FBO) within the development. As described by Sky Ranch, the plans for the FBO included an on-site residence for the FBO operator, a large hangar to be used for aircraft maintenance, and ten to fifteen bed-and-breakfast-style lodging units to accommodate individuals interested in buying property at Grassy Meadows. A representative from the Association appeared at both meetings to oppose the zoning request, which was ultimately denied.
¶ 4 By June 2002, 81.5% of the platted lots in the community had been sold, prompting the Association to write Sky Ranch a letter notifying it that its right to unilaterally amend the 1990 CCRs had terminated in accordance with the 80 Percent Provision. Nevertheless, in October 2002, Sky Ranch unilaterally amended the 1990 CCRs with a new set of CCRs (the 2002 CCRs). The 2002 CCRs contained provisions spelling out Sky Ranch's right to pursue the commercial improvements at issue in the zoning hearings and amending the voting rights of the different categories of lot owners, as well as several other provisions aimed at facilitating the development of a new planned community, Copper Rock, adjacent to the Grassy Meadows community. Michael Longley, the president of both Grassy Meadows Airport and Sky Ranch Development, is also behind the Copper Rock project and wanted "to open the traffic pattern and runway to visitors" of Copper Rock.
¶ 5 On March 31, 2003, several months after the CCRs were amended, the Association received a "Notice of Termination of Lease" from Grassy Meadows Airport alleging that the Association failed to properly maintain the airport, to abide by the terms of the CCRs, to meet the lease's insurance requirements, and to make lease payments on time. Despite the Association's attempts to remedy the alleged breaches, Grassy Meadows Airport terminated the lease on May 5, 2003.
¶ 6 The Association filed suit in June 2003. Sky Ranch responded with several counterclaims. The main issues presented at the two-day bench trial in April 2010 were (1) whether the 2002 CCRs were valid; (2) whether the Association breached the lease and, if so, whether Sky Ranch properly terminated the lease; and (3) whether the Association "tortiously interfered with the legitimate business interests of [Sky Ranch] by opposing proposed zoning ordinance changes affecting [the Association]." The trial court determined that the 2002 CCRs were "void ab initio" because Sky Ranch had lost its ability to unilaterally amend the 1990 CCRs when 81.5% of the lots were purchased, and that the lease termination was not justified because the Association did not materially breach the lease. Furthermore, the trial court dismissed Sky Ranch's counterclaim for tortious interference, stating, "[T]here [was] no basis to hold the Association liable...." In light of these conclusions, the trial court determined that the funds held in escrow were to "be released to Defendant Grassy Meadows Airport ... [and] applied as rent paid in full under the Lease."
¶ 7 Sky Ranch presents four issues for appeal. First, Sky Ranch challenges the trial court's invalidation of the 2002 CCRs, which was based on the court's interpretation of a provision it deemed ambiguous in the 1990 CCRs. Second, Sky Ranch contends that it was entitled to terminate the Association's lease and that the manner in which it terminated the lease was appropriate. Third, Sky Ranch argues that the trial court prematurely dismissed its claim for tortious interference with business relations. Last, Sky Ranch argues that the issue of whether the escrow monies constituted full payment of the airport lease was never presented to the court, rendering the trial court's determination both unjustified and based on insufficient evidence.
¶ 8 We review the trial court's interpretation of the CCRs and lease, and its determination that a provision in the CCRs was ambiguous, for correctness. See Miller v. USAA Cas. Ins. Co., 2002 UT 6, ¶ 19, 44 P.3d 663; Sharon Steel Corp. v. Aetna Cas. & Sur. Co., 931 P.2d 127, 134 (Utah 1997). See generally Swenson v. Erickson, 2000 UT 16, ¶ 11, 998 P.2d 807 ("Restrictive covenants that run with the land and encumber subdivision lots form a contract between subdivision property owners as a whole and individual lot owners; therefore, interpretation of the covenants is governed by the same rules of construction as those used to interpret contracts."). We grant the trial court no deference when its interpretation of an ambiguous contract term is not based on extrinsic evidence. See Meadow Valley Contractors, Inc. v. State Dept. of Transp., 2011 UT 35, ¶ 63, 266 P.3d 671. Next, "[w]hether an issue was properly before the trial court presents a question of law, which we review for correctness." Lee v. Sanders, 2002 UT App 281, ¶ 6, 55 P.3d 1127. And last, "[f]indings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge the credibility of the witnesses." Utah R. Civ. P. 52(a).
¶ 9 Sky Ranch challenges the trial court's determination that the 1990 CCRs were ambiguous, arguing that the trial court improperly "focus[ed] on just one provision of the 1990 [CCRs], rather than construing the document as a whole."
The trial court determined the 80 Percent Provision to be unclear as to "whether the number of lots[] from which the 80 percent calculation would be made[] includes only then-existing lots or all future lots." As a result, the trial court concluded that the 1990 CCRs are ambiguous because the language of the 80 Percent Provision is susceptible to two different interpretations. See generally United States Fid. & Guar. Co. v. Sandt, 854 P.2d 519, 523 (Utah 1993) ("An ambiguity in a contract may arise (1) because of vague or ambiguous language in a particular provision or (2) because two or more contract provisions, when read together, give rise to different or inconsistent meanings, even though each provision is clear when read alone."). In light of this ambiguity, the trial court concluded that Sky Ranch's ability to unilaterally amend the CCRs terminated in June 2002 when 81.5% of the platted lots were purchased and that, as a result, the 2002 CCRs were "void ab initio" because Sky Ranch did not have "the authority to amend unilaterally the [1990 CCRs]" when it issued the 2002 CCRs.
¶ 10 However, the trial court "did not base its interpretation of the [80 Percent Provision] ... on extrinsic evidence of the parties' intent. Rather, the trial court simply held that" the ambiguity would be construed against Sky Ranch. See Meadow Valley, 2011 UT 35, ¶ 63, 266 P.3d 671. This course of action is unconventional because when a "contract is ambiguous, we seek to resolve the ambiguity by looking to extrinsic evidence of the parties' intent" and only "[i]f extrinsic evidence does not resolve the ambiguity and uncertainty, ... will we resolve the ambiguity against the drafter." Id. ¶ 64. Thus, "because the trial court did not base its conclusion ... on extrinsic evidence of the parties' intent, we give that conclusion no deference and review for correctness." Id. ¶ 63; see also Kimball v. Campbell, 699 P.2d 714, 716 (Utah 1985) ("A contract's interpretation may be either a question of law, determined by the words of the agreement, or a question of fact, determined by extrinsic evidence of intent. If a trial court interprets a contract as a matter of law, we accord its construction no particular weight, reviewing its action under a correctness standard."). Accordingly, "[w]e begin ... with the contract itself," see Meadow Valley, 2011 UT 35, ¶ 64, 266 P.3d 671, looking first to its plain "language ... to determine meaning and intent," see Glenn v. Reese, 2009 UT 80, ¶ 10, 225 P.3d 185 (citation and internal quotation marks omitted). When reviewing the plain language of a contract, we seek to "[h]armonize conflicting or apparently ambiguous contract language before concluding that provisions are actually ambiguous." See Gillmor v. Macey, 2005 UT App 351, ¶ 19, 121 P.3d 57. Additionally, "[e]ach contract provision is to be considered in relation to all of the others, with a view toward giving effect to all and ignoring none." Utah Valley Bank v. Tanner, 636 P.2d 1060, 1061-62 (Utah 1981).
¶ 11 Sky Ranch contends that the 80 Percent Provision's meaning is clear when read in conjunction with other provisions in the 1990 CCRs, particularly the provisions regarding annexation. Sky Ranch interprets the annexation provisions as demonstrating "a clear intent ... that Sky Ranch ... retain the power to amend the [CCRs] until it is finished developing" by providing Sky Ranch with the ability to "continue to annex land to the Development `for common areas or for subdivisions into additional residential or commercial lots.'" Sky Ranch acknowledges that its right to annex land is limited by the 1990 CCRs "to fifteen years, and to 150 total residential lots," and reconciles these limitations with the 80 Percent Provision by concluding that the 1990 CCRs provide that Sky Ranch's power to unilaterally amend would not terminate until "it has finished developing and 80% of the lots are sold."
¶ 13 Sky Ranch argues that because the Association "materially breached the terms of the Airport Lease," it was "entitled to termination of the lease and to recover its damages incurred." Sky Ranch cites numerous breaches by the Association relating to the Association's obligation to maintain the airport and the facilities and components associated with the airport, and the Association's failure to maintain liability insurance on the airport. Sky Ranch argues that these breaches indicate that the trial court's finding that the Association substantially complied with the lease is clearly erroneous.
¶ 14 "Substantial compliance is one of the contract law doctrines that has been imported into lease cases." Housing Auth. of Salt Lake City v. Delgado, 914 P.2d 1163, 1165 (Utah Ct.App.1996) (applying the doctrine of substantial compliance to a residential lease); see also Cache Cnty. v. Beus, 1999 UT App 134, ¶¶ 31, 41, 978 P.2d 1043 (acknowledging the potential application of the substantial compliance doctrine to a "negotiated commercial lease between sophisticated parties"). In evaluating lease termination issues, "[w]e observe a general policy disfavoring forfeitures. The substantial compliance doctrine furthers that policy by allowing equity to intervene and rescue a lessee from forfeiture of a lease when the lessee has substantially complied with the lease in good faith." Delgado, 914 P.2d at 1165 (citation omitted). "Whether a breach is so insubstantial as to trigger the application of [the substantial compliance doctrine] is a question of fact." Id. A trial court can look to the following factors for assistance in determining the materiality of a breach:
Beus, 1999 UT App 134, ¶ 37, 978 P.2d 1043 (quoting Restatement (Second) of Contracts § 241 (1981)).
¶ 15 Here, the trial court considered the above factors in turn, determining that neither Longley nor the Grassy Meadows Airport would be "deprived of any benefit to which they are entitled under the Lease, including receiving regular lease payments," while "the Association would suffer greatly if the lease were terminated" because "[t]he very purpose for the Community was to have access to a private airport." Next, the trial court found that "[t]he evidence presented established that any alleged breaches have been cured." The trial court noted Longley's own "admission that the Association reacted to his Notice of Termination with `frenzied efforts' to cure the alleged deficiencies," which "also evinces good faith on the part of the Association to comply with all its obligations under the Lease." The trial court listed several repairs and improvements the Association performed on the airport property and noted that "[a]lthough maintenance issues arose from time to time, ... [they fell] within what would reasonably be expected as normal wear and tear," and that otherwise, "the Airport was always in reasonably good
¶ 16 Sky Ranch next contends that it was not given the opportunity to present evidence on its tortious interference counterclaim. The tortious interference claim is based on the argument that the Association agreed to the development of the FBO, thereby prohibiting it from opposing Sky Ranch's request for the zoning change necessary to permit that development. In other words, Sky Ranch alleges that the Association effectively contracted away its right to petition the government in a manner that would "interfere with the development of the FBO."
¶ 17 Based on the record before us, we determine that it is impossible to know one way or another whether Sky Ranch's tortious interference claim was properly dismissed by the trial court in the manner that occurred here.
¶ 18 In sum, there were dozens of potential witnesses, exhibits, and documents that were not presented to the court that may have supported Sky Ranch's tortious interference claim. Sky Ranch simply did not have an opportunity to present its evidence on this counterclaim. Accordingly, we remand to the trial court for the narrow purpose of hearing the evidence Sky Ranch intended to present in support of its tortious interference claim. The trial court's determinations as to the 1990 CCRs and breach of the airport lease remain unchanged, as indicated above.
¶ 19 Last, Sky Ranch argues that "[t]he trial court erred in making any ruling as to the sufficiency of the amount of money held in escrow, as it was not properly before the court." "A trial court's findings should fit within the framework of the petition as originally drawn, or as amended and should be supported by the evidence presented," although "a trial court may infer an amendment to the pleadings if the issue is tried by the [p]arties' express or implied consent." Lee v. Sanders, 2002 UT App 281, ¶ 7, 55 P.3d 1127 (internal quotation marks omitted). A court can determine that implied consent was given "where one party raises an issue material to the other party's case or where evidence is introduced without objection, [and] where it appear[s] that the parties understood the evidence [was] to be aimed at the unpleaded issue." Id. (alterations in original) (internal quotation marks omitted). However, "[a] trial court may not base its decision on an issue that was tried inadvertently." Archuleta v. Hughes, 969 P.2d 409, 413 (Utah 1998) (internal quotation marks omitted).
¶ 20 Here, the airport lease issue unavoidably involves the sub-issue of what to do with the monies held in escrow. Therefore, we disagree with Sky Ranch that the issue was not properly before the trial court. Where the trial court did err, however, was in concluding that the amount in escrow constituted the amount of rent actually due, when the amount due under the lease was to be determined "on an annual basis based on the Published National Consumer Price Index for Southwestern Utah" and no evidence was presented as to such. Accordingly, we reverse the trial court's determination that the amount held in escrow constituted the amount due and remand for further proceedings during which the trial court can hear the evidence necessary to determine the amount due under the lease from the date of the Association's last accepted lease payment through the time at which the trial court resolves this matter.
¶ 21 We affirm the trial court's determination that the 2002 CCRs were invalid because Sky Ranch's ability to unilaterally amend the 1990 CCRs terminated when 80% of the lots
¶ 22 WE CONCUR: WILLIAM A. THORNE JR., and STEPHEN L. ROTH, Judges.
Dipoma v. McPhie, 2001 UT 61, ¶ 18, 29 P.3d 1225 (emphasis and internal quotation marks omitted).
