February 26, 2013

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Legal Case Profiles

February 26, 2013

A notice of default was filed by Wolf Mountain on the Canyons’ lease in June 2006. The next month the Canyons sued Wolf Mountain for breach of contract.

The suit against Wolf Mountain stated that it had deliberately interfered with the resort’s ability to build a golf course by withholding land it had previously pledged. According to Lund, the golf course was key to developing the surrounding acreage (950,000 square feet of floor space) into lodges, townhouses, hotels and restaurants.

Going for the Green

After five years, including a seven-week trial in 2011, a verdict was reached. Ultimately the jury found that Wolf Mountain had breached two different contracts, had breached the implied covenants of good faith in both of those contracts, and had intentionally interfered with the Canyons’ economic relations with others.

The Canyons requested $54,437,000 for lost profits from the development of land planned around the golf course, and the lost potential business it would have received from those developments.

As an example of the damages lost, Lund says that in the 2005 – 2006 timeframe, condos were selling “like hot cakes.” Westgate, a project that was able to develop on parts of the land, sold out an entire building in a single day. “That’s how hot the market was, and that’s the point in which this thing should have come to market, would have come to market if Wolf Mountain had simply gone along the way we claimed they should have to finalize things.”

After the trial ended, the land owned by Wolf Mountain went up for sale, Wolf Mountain claimed bankruptcy, and it recently made an appeal to the Utah Supreme Court to have the case reversed.

On the Canyons’ side, it bought the land previously owned by Wolf Mountain at a sheriff’s sale. The golf course construction is underway and the parcels of land for development have now been created and defined.

The verdict reached is particularly good for the state’s economy and business community, says Lund. “In the end, we had citizens of this state fairly and responsibly decide a very significant contractual dispute. …That’s an important thing to remember here. And one of the reasons that it’s important is because people want to do business in a place where they know it’s a good court system and they know they can get a fair and objective determination of their case if they have to take something to court.”


BYU v. Pfizer: BYU Professor Stakes a Claim Against a Drug Giant   

By Heather Stewart

In 2006, Brigham Young University and Professor Daniel Simmons filed suit against the drug giant Pfizer. The legal dispute was big in the sense that it potentially involved billions of dollars—and it also had ramifications for how companies deal with electronic document retention and discovery.

The lawsuit stemmed from the early ‘90s, when Simmons discovered the gene and enzyme Cox 2. BYU and Simmons entered into a contractual partnership with Monsanto to develop an anti-inflammatory drug that would inhibit the Cox 2 enzyme, providing long-term relief from the pain and inflammation associated with arthritis and other chronic conditions, without the gastrointestinal side effects of traditional pain relievers.

According to attorney Mark Bettilyon of Ray Quinney & Nebeker, who represented BYU and Simmons, Monsanto agreed to protect the intellectual property and include Simmons on any patents. Under the agreement, BYU was to receive royalties from drug sales. Monsanto was eventually absorbed into Pfizer, which took over the contract. “Years later, Dr. Simmons realized he had been misled by Pfizer,” says Bettilyon.

Pfizer disagreed that there had been any breach of contract and claimed Simmons’ contributions were not important—that it was its own independent discoveries that ultimately led to the development of the drug, explains Bettilyon.

The drug, Celebrex, has become hugely profitable for Pfizer—the plaintiffs requested 15 percent of Pfizer’s revenue from the drug, or $9.7 billion. Additionally, the court could have awarded billions more in punitive damages. The parties settled a few weeks before the case was scheduled to go to trial in 2012. Although neither party disclosed the terms of the settlement, in regulatory filings Pfizer reported a $450 million charge against earnings to settle the dispute.       

“BYU is very happy with the settlement,” says Bettilyon, who cannot discuss the specific details of the settlement. “It will have a very positive impact on the university.” He notes the university intends to use some of the money to establish a Daniel Simmons Chair in recognition of the professor’s contributions to healthcare and science.

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