Salt Lake Tribune
Weekly Ad Specials
Developer seeks unusual path to incorporation
This is an archived article that was published on sltrib.com in 2010, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

The Utah Supreme Court wouldn't hear it.

Heber City's 4th District Court didn't seem to be a winning venue, either.

So Arizona developer Dean K. Sellers has gone to U.S. Bankruptcy Court for Utah, alleging a vast conspiracy kept him from incorporating a town in Wasatch County he wanted to call Aspen.

In a sweeping lawsuit filed last week, Sellers alleges the mayor of the town of Daniel, the Wasatch county clerk, county attorney, county sheriff and a host of others violated his civil rights by "the conspiring and abusing of the criminal justice system for purposes of impeding and hindering [his] constitutional rights ... to pursue the incorporation of the town of Aspen, Utah."

In a parallel move, the Arizona developer filed a motion to transfer his incorporation case from 4th District Court to Bankruptcy Court, where he would argue that his 2007 petition for Aspen should be approved. He originally filed the incorporation complaint with the Utah Supreme Court, but justices ruled he must adjudicate that matter at the district court level.

Sellers filed the civil rights complaint in bankruptcy court as he was about to lose his lengthy legal battle for Aspen in 4th District Court, according to Daniel Mayor Mike Duggin, citing a partial summary judgment.

"I think it's outrageous," the mayor said. "This has been almost entirely adjudicated in state court."

The unusual civil rights complaint is just the latest in a string of lawsuits Sellers brought after his incorporation bid was thwarted in November 2007 by a small band of residents along U.S. Highway 40 who did not want to be part of his plan for a high-density, "world-class" resort.

The saga begins in 2005, when Sellers entered into an agreement with the West Daniels Land Association for the purchase of 5,172 acres of hillside land south of Daniel and west of U.S. 40. He paid 25 percent down on the purchase price of about $5 million, according to shareholders in the nonprofit company.

Sellers took control of the association as the nonprofit's president, with the promise that within two years he would complete payment to the company's 13 shareholders.

During the summer of 2007, he announced his plan for a Park City-style development on the acreage and sought to incorporate the land, zoned for one house per 160 acres.

Legislation that took effect in 2007 allowed a single landowner to incorporate a municipality, if that person owned 50 percent of the land and if the boundaries included at least 100 residents.

The Wasatch County municipalities of Independence and Hideout were quickly incorporated under the law, passed in the Legislature as HB466. But hours before Sellers filed his petition to incorporate with Wasatch County, residents of Storm Haven and Crazy Acres submitted annexation papers to the county clerk seeking to become residents of the town of Daniel.

They didn't want to be part of Sellers' high-density resort. Among other things, that meant Sellers could not meet requirements for incorporation under the controversial law because he no longer had the required number of residents.

By 2008, it had become clear that HB466 had a major flaw in that it allowed land owners to create their own zoning. The Legislature changed the law that year so that a single landowner cannot form a municipality.

That prompted Sellers' to seek relief in court.

Meanwhile, West Daniels Land Association shareholders were still looking for their money. At annual meetings in October 2007 and October 2008, they granted Sellers extensions on his payments. But on Oct. 19, 2009, they denied more extensions and voted him out of office. Verdawn Nelson was elected president.

Three weeks later, Sellers sought Chapter 11 protection for the land association. Seller's Tucson-based attorney, Michael Baldwin, said his client disputes the claim that he was not the company's president when it filed for Chapter 11.

On Feb. 8, Sellers filed the civil rights complaint.

Shareholders now fear they won't get what they're owed, Nelson said.

"I think he took out bankruptcy to get our land," she said. "I either want what he owes me, or the ground back."

Salt Lake City-based attorney Dale Gardiner, who represents the Daniel mayor and others named in Seller's 4th District Court suit, said the civil rights complaint and parallel motion to try the lawsuit for incorporation in bankruptcy court is highly unusual.

"I've been doing this for 30 years, and I've never seen anything like it."

A hearing date has yet to be scheduled in the bankruptcy case.

csmart@sltrib.com

Courts » Filing in bankruptcy court alleges civil rights violation.
Article Tools

 
Affiliates and Partners