The following letter, delivered this week to City Attorney Ed Rutan, addresses one of the issues that Mayor Anderson has raised repeatedly. This is the so-called "severability clause" included in the Special Warranty Deed that transferred ownership of the new Church Plaza property from Salt Lake City to The Church of Jesus Christ of Latter-day Saints.
December 4, 2002
BY HAND DELIVERY
Ed Rutan, Esq.
Salt Lake City Attorney
451 South State Street, Room 505
Salt Lake City, Utah84111
Re: Main Street Plaza
Dear Mr. Rutan:
This firm has been asked to represent the Corporation of the Presiding Bishop of The Church of Jesus Christ of Latter-day Saints in relation to the current dispute over Salt Lake City's pedestrian access and passage easement on Main Street Plaza.I have been asked by H. David Burton, the Presiding Bishop of the Church, to address the legal issues raised in Mayor Anderson's letter to him of November 15, 2002, and other legal issues recently raised by the Mayor in the press.
1.The Severability Clause
We respectfully disagree with the conclusion in Mayor Anderson's letter to Bishop Burton that, as the result of the court's decision in First Unitarian Church vs. Salt Lake City, 308 F.3d 1114 (10th Cir. 2002), Main Street Plaza is burdened with an unrestricted public access easement.Specifically, we disagree with the conclusion that the severability clause in Section 6.2 of the Special Warranty Deed (April 27, 1999) from the City to the Church transformed what was, by agreement, a limited easement for pedestrian access and passage into an unlimited easement.The severability clause, of course, has not yet been triggered because the courts have not yet "finally" determined the parties' rights, as required by the severability clause itself.Until all appeals from the Tenth Circuit's decision are exhausted, there will be no final determination of the constitutionality of the restrictions on the City's easement.More importantly, however, we do not believe that the Special Warranty Deed's severability clause would be interpreted to give the City rights for which it never bargained.
Our disagreement with Mayor Anderson's interpretation of the severability clause stems from two related facts.
First, the restrictions on the easement were an essential part of the parties' agreement.The Church would not have purchased the relevant block of Main Street, and the City would not have been able to sell it to the Church, if the restrictions on public access had been absent from the Special Warranty Deed.In Mayor Anderson's public statement of October 22, 2002, he correctly observed what is clear from the public record —; that "the restrictions on conduct and other expressive activities" were among the "essential terms of the agreement between the parties."
Second, the City's pedestrian access and passage easement cannot be separated from the restrictions on the easement without doing violence to the intent of the parties.In other words, the Special Warranty Deed's easement and restrictions constituted mutually dependent promises and operated as an integrated whole; they were a single, essential term of the transaction.The City retained no more than a restricted easement.The Church made it clear that it would not buy the property unless the restrictions applied; the City agreed to the limited easement on that basis.
Under these circumstances, the Special Warranty Deed's severability clause could not reasonably be interpreted to enlarge the City's easement.Severability clauses have never, to our knowledge, been interpreted to allow parts of an essential provision of an agreement to survive other parts of the same essential provision, especially where, as here, the result would be an inequality of the benefits or burdens between the parties.In the present situation, a court may well hold that the restricted pedestrian access and passage easement (including the restrictions) is severable from the conveyance of real estate to the Church, but we do not believe that a court would hold the restrictions themselves, standing alone, to be severable from the easement which they limited.
Severability clauses are common in contracts and deeds.Their purpose is to make sure that the intent of the parties is carried out, even if non-essential parts of the deal are held to be unenforceable.They provide a mechanism for the survival of the remaining terms of the contract if the essential purposes of the contract can still be realized.In deeds, they ensure that the underlying conveyance does not fail even if non-essential conditions are unenforceable.
Such clauses cannot, however, be used to violate the intent of the parties, or to sever mutually dependent obligations."[A] severability clause is but an aid to construction, and will not justify a court in declaring a clause as divisible when, considering the entire contract, it obviously is not.The crucial question is whether the clauses to be severed are essential to the contract.Essentiality depends on the intent of the parties."Eckles vs. Sharman, 548 F.2d 905, 909 (10th Cir. 1977) (internal quotation and citation omitted).
Since the City's pedestrian access and passage easement and the restrictions on that easement operated together as an integrated, essential term, we believe it is extremely unlikely that a court would hold that the Church is now burdened with an unrestricted easement to which it did not agree, and never would have agreed, in the first place.Many cases have confirmed this conclusion.See, e.g., John R. Ray & Sons, Inc. v. Stroman, 923 S.W. 2d 80, 86–88 (Tex. Ct. App. 1996) ("[The severability clause] does not have the effect of making an otherwise dependent contract into one whose terms are independent and divisible."); AMB Property, L.P. v. MTS, Inc., 551 S.E. 2d 102, 105 (Ga. Ct. App. 2001) ("[S]evering an essential term of the contract is not allowed."); Eckles v. Sharman, 548 F.2d at 909.
These and other authorities confirm the more general principle that severability —; with or without a severability clause —; depends upon the intent of the parties.In Utah, contract provisions can only be severed if "the primary purpose of the contract could still be accomplished following severance."Sosa v. Paulos, 924 P.2d 357, 363 (Utah 1996).See also Management Services Corp. v. Development Associates, 617 P.2d 406, 408 (Utah 1980);Parents Against Drunk Drivers v. Graystone Pines Homeowners' Association, 789 P.2d 52, 56 (Utah App. 1990).The Restatement (Second) of Contracts provides that terms constituting "an essential part of the agreed exchange" may not be severed, and "[w]hether the performance is an essential part of the agreed exchange depends upon its relative importance in the light of the entire agreement between the parties."Restatement (Second) of Contracts §184(1) & cmt. a (1981).In the same vein, courts refrain from enforcing severability clauses where the result would lead to a material imbalance in the exchange between the parties with respect to essential terms.See, e.g., Zerbetz v. Alaska Energy Ctr., 708 P.2d 1270, 1282–833 & n.19 (Alaska 1985).
We note that in First Unitarian, the Tenth Circuit did not decide how the severability clause should be interpreted, or what consequences its decision would have on other terms of the 1999 transaction.The Tenth Circuit merely noted that the City and the Church disagreed on the issue.See First Unitarian 308 F.3d at 1126 n.8.
We believe, in short, that resort to the severability clause does not solve the problem faced by the parties.The clause cannot be interpreted to contravene the clear intent of the parties.More importantly for present purposes, the severability clause should not prevent the parties from endeavoring to find a fair middle ground for resolution of the present dispute.Rather than debating legal issues, we respectfully submit that the parties should seek ways in which the City and the Church could honor the parties' original intent, without violating the requirements of the First Amendment.
2. Litigation Concerning the Severability Clause
News reports last weekend suggested that the City and the Church might seek a declaration of the Third District Court for Salt Lake County concerning the correct interpretation of the severability clause.I have been asked to advise you that the Church believes that any such suit for declaratory relief would be premature.As you may know, the Church intends to seek an appeal of the Tenth Circuit's decision in First Unitarian.Beyond that, the parties are still attempting in good faith to resolve their differences;we are hopeful that they will be able to agree on a way to honor the parties' intent and, at the same time, comply with the requirements of the First Amendment.Under these circumstances, we believe little would be gained by initiating another law suit now.
If the parties are unable to resolve their differences, we respectfully suggest that, rather than filing a new law suit, the City join with the Church in petitioning the Supreme Court for review of the First Unitarian decision.We call upon the City to defend its agreement with the Church.
If you have any questions concerning the Church's positions outlined above, please let me know.
Very truly yours,
Snell &
Wilmer
Alan L. Sullivan
ALS:kb
cc: Members of the Salt Lake City Council:
David Buhler, Chair (by hand
delivery)
Carlton J. Christensen, Vice-Chair (by hand
delivery)
Van Blair Turner (by hand delivery)
K. Eric Jergensen (by hand delivery)
Nancy Saxton (by hand delivery)
Jill Remington Love (by hand delivery)
Dale Lambert (by hand delivery)
Honorable Ross C. ("Rocky") Anderson (by hand delivery)