Pioneer Home v. TaxHawk ( 2019 )

2019 UT App 213THE UTAH COURT OF APPEALS
PIONEER HOME OWNERS ASSOCIATION,
Appellant,
v.
TAXHAWK INC AND VANDELAY PROPERTIES LLC,
Appellees.
Opinion
No. 20180159-CA
Filed December 27, 2019
Fourth District Court, Provo Department
The Honorable Derek P. Pullan
No. 160400808
Paul W. Shakespear, Douglas P. Farr, W. Daniel
Green, and Andrew Jacobs, Attorneys for Appellant
Troy L. Booher, Beth E. Kennedy, Dick J. Baldwin,
Quinn M. Kofford, Gregory S. Roberts, and Greg M.
Newman, Attorneys for Appellees
JUDGE JILL M. POHLMAN authored this Opinion, in which
JUDGES GREGORY K. ORME and DAVID N. MORTENSEN concurred.
POHLMAN, Judge:
¶1 Pioneer Home Owners Association brought two
consecutive suits against TaxHawk Inc. and Vandelay Properties
LLC (collectively, TaxHawk) over rights to real property. The
first suit, in which Pioneer claimed boundary by acquiescence
based on the conduct of a previous owner, was dismissed on
summary judgment because Pioneer did not have a deed from
the previous owner. The second suit, in which Pioneer claimed
quiet title based on the deed that it had by then obtained, was
consolidated with the first suit and then dismissed on the
grounds of res judicata. Further, after dismissing the second suit
Pioneer Home v. TaxHawk
as claim precluded, the district court granted summary
judgment to TaxHawk on its quiet-title counterclaim and, in
doing so, barred Pioneer from asserting boundary by
acquiescence as an affirmative defense. Pioneer appeals all three
judgments. We affirm the grant of summary judgment as to the
first action but reverse the dismissal of the second action and the
grant of summary judgment on TaxHawk’s quiet-title
counterclaim. We therefore remand for further proceedings.
BACKGROUND 1
The Property
¶2 From 1952 to 2001, the operator of a drive-in movie
theater (the Drive-In) owned real property in Utah County, Utah
(the Property). A fence (the Fence), and later a row of trees along
the Fence (the Trees), separated the Property from adjacent
properties to the north.
¶3 The legal description in the Drive-In’s deed for the
Property sets the boundary elsewhere, but the Drive-In and the
owners of the adjacent properties treated the Fence as the
boundary line between the properties for several decades. For
example, the Drive-In maintained the land up to the Fence and
allowed its customers to park their cars there. With one
exception, “no adjoining land owner questioned or contested
that the [F]ence and [T]rees were the boundary, and no adjoining
1. This case involves an appeal from two summary judgment
rulings and an appeal from a rule 12(b)(6) dismissal. We
therefore view the facts on appeal in the light most favorable to
the non-moving party, Pioneer. See Pang v. International
Document Services, 2015 UT 63, ¶ 3, 356 P.3d 1190; Massey v.
Griffiths, 2007 UT 10, ¶ 8, 152 P.3d 312.
20180159-CA 2 2019 UT App 213Pioneer Home v. TaxHawk
landowner disputed or questioned [the Drive-In’s] use of the
land up to the [F]ence and [T]rees.” 2
¶4 In 2001, the Drive-In deeded the Property to a developer
(Developer). When Developer acquired the Property, it
undertook an extensive boundary line search and, based on its
understanding of the boundary line, it did not believe that the
Trees and the Fence were part of the Property.
¶5 Several years later, Pioneer began acquiring the Property
from Developer in stages. As relevant here, Pioneer obtained a
portion of the Property in 2007, and it obtained the remaining
land in 2016. In 2006 and 2010, TaxHawk acquired the adjacent
land on the north side of the Fence. Its deeds reflected the same
boundary line as Pioneer’s deeds. However, according to
Pioneer, both parties treated the Fence as the boundary during
this period.
The First Suit
¶6 Things changed in early 2016 when TaxHawk attempted
to remove the Fence and the Trees and assert the boundary
described in its deeds. Pioneer then sued TaxHawk for quiet title
(the First Suit), asserting boundary by acquiescence to the Fence
and, alternatively, to the Trees. TaxHawk counterclaimed and
similarly sought to quiet title in itself to the land described in its
deeds, which encompassed the Trees and the Fence (the
Disputed Strip). See infra Appendix. It also brought a
counterclaim seeking damages for trespass.
2. The exception noted concerned a landowner who told the
Drive-In sometime in the mid-1990s that the Fence was not the
legal boundary and that it intended to remove the Fence.
However, the landowner never did.
20180159-CA 3 2019 UT App 213Pioneer Home v. TaxHawk
¶7 At the end of 2016, TaxHawk moved for summary
judgment on Pioneer’s claims for boundary by acquiescence. It
claimed that Pioneer, which obtained the Disputed Strip no
earlier than 2007, did not occupy the Disputed Strip for the
requisite twenty years. It further argued that Pioneer could not
rely on the years of occupation by Developer (Pioneer’s
predecessor-in-interest), because Developer had actual
knowledge of the true boundary line based on its search.
According to TaxHawk, Pioneer could show at most that it had
occupied the Disputed Strip for “only nine years.”
¶8 Pioneer did not dispute TaxHawk’s facts for purposes of
summary judgment but asserted that the Drive-In had treated
the Fence and the Trees as the boundary line for several decades
and that, “until the mid-1990s, no party ever asserted a different
boundary.” Thus, Pioneer argued, the Drive-In met “all the
requirements of boundary by acquiescence” and gained
ownership of the Disputed Strip by operation of law no later
than 1989—before Developer took possession of the Property.
¶9 In its reply memorandum, TaxHawk accepted Pioneer’s
additional facts for purposes of summary judgment but argued
that even if the Drive-In had acquired the Disputed Strip it had
purportedly obtained through boundary by acquiescence, the
Drive-In never conveyed it to Pioneer or its
predecessor-in-interest. Relying on Q–2 LLC v. Hughes, 2016 UT
8, 368 P.3d 86, and Brown v. Peterson Development Co., 622 P.2d
1175 (Utah 1980), TaxHawk maintained that Pioneer “had notice
of the actual boundary lines,” which did not include the
Disputed Strip. TaxHawk further asserted that Pioneer “was
never conveyed or deeded the [Disputed Strip]” and that
Developer could not have transferred title to Pioneer because it
too had notice of the actual boundary and accordingly “never
had title to the [Disputed Strip]” to convey. TaxHawk reasoned
that, assuming the Drive-In had title to the Disputed Strip, only
it could have deeded the strip to Pioneer, which it had not done.
20180159-CA 4 2019 UT App 213Pioneer Home v. TaxHawk
¶10 The district court agreed with TaxHawk and granted the
summary judgment motion. It concluded that Pioneer “never
received title to the disputed land from [the Drive-In] by deed”
and that, under Brown, that “failure [was] fatal” to the
boundary-by-acquiescence claims as a matter of law. The court
accordingly dismissed Pioneer’s claims with prejudice. Although
TaxHawk still had remaining counterclaims, the court’s order
granting summary judgment to TaxHawk was labeled as a
“Final Judgment.” However, the court did not include any other
language indicating that the judgment was appealable.
The Second Suit
¶11 In March 2017, after the dismissal of its
boundary-by-acquiescence claims, Pioneer acquired a quitclaim
deed to the Disputed Strip from the Drive-In. It thereafter filed a
new complaint (the Second Suit) for quiet title alleging, as
relevant here, that it “owns [the Property and Disputed Strip] by
virtue of a quit claim deed” from the Drive-In, who had obtained
the Disputed Strip “by operation of the doctrine of boundary by
acquiescence.”
¶12 TaxHawk moved to consolidate the Second Suit with the
First Suit, which still included TaxHawk’s counterclaims for
quiet title and trespass. Pioneer opposed consolidation,
contending that “new claims have been asserted that make
consolidation of the two matters unnecessary,” but the court
granted the motion.
¶13 Shortly after moving to consolidate, TaxHawk also moved
to dismiss the claims in Pioneer’s Second Suit as barred by res
judicata. Specifically, it argued that claim preclusion foreclosed
those claims because (1) the parties were identical, (2) Pioneer
“could and should have” acquired the deed to the Disputed
Strip in the First Suit, and (3) the First Suit resulted in a final
judgment on the merits. Pioneer opposed the motion, asserting
20180159-CA 5 2019 UT App 213Pioneer Home v. TaxHawk
that there had “been a new transaction,” namely, “the execution
and recording of [the] quit claim deed” that rendered claim
prelusion inapplicable. It further argued that, despite
TaxHawk’s arguments that it could have obtained the deed
earlier, it was not “required to set out and obtain all possible
evidence for all possible claims.” Rather, it was required only to
“bring claims that [were] possible with the evidence as it
exist[ed] at the time the complaint [was] filed.”
¶14 The district court again agreed with TaxHawk. It
described Pioneer’s Second Suit for quiet title as “based on
claims of boundary by acquiescence,” which were previously
dismissed with prejudice on summary judgment in the First Suit.
It then ruled that Pioneer “could have and should have obtained
a quitclaim deed to the [P]roperty” during the First Suit and that,
therefore, the Second Suit was “barred by claim preclusion.”
This order was also labeled “a Final Judgment with regard to
[Pioneer’s] claims” but noted that TaxHawk’s counterclaims
“remain[ed] pending.”
¶15 The parties eventually filed cross-motions for summary
judgment on TaxHawk’s remaining counterclaims for quiet title
and trespass. TaxHawk relied on the legal descriptions in the
deeds to assert ownership of the Disputed Strip and to claim that
Pioneer trespassed on its property, while Pioneer argued that the
Disputed Strip, by virtue of boundary by acquiescence, belonged
to the Drive-In and, therefore, TaxHawk could neither quiet title
in itself nor hold Pioneer liable for trespass on land it did not
own.
¶16 The court dismissed TaxHawk’s trespass claim but
granted TaxHawk’s motion for quiet title. It concluded that there
was “no meaningful distinction” between Pioneer’s claim for
quiet title based on boundary by acquiescence and its affirmative
defense against TaxHawk based on the same theory. In other
20180159-CA 6 2019 UT App 213Pioneer Home v. TaxHawk
words, because Pioneer’s claim was barred by claim preclusion,
so too was its defense.
¶17 Pioneer appeals.
ISSUES AND STANDARDS OF REVIEW
¶18 Pioneer contends that “the district court erred in finding a
quitclaim deed a necessary element of boundary by
acquiescence” and therefore erred in granting summary
judgment to TaxHawk in the First Suit. (Cleaned up.) Summary
judgment is appropriate “if the moving party shows that there is
no genuine dispute as to any material fact and the moving party
is entitled to judgment as a matter of law.” Utah R. Civ. P. 56(a).
An “appellate court reviews a summary judgment for
correctness, giving no deference to the [district] court’s
decision.” Bahr v. Imus, 2011 UT 19, ¶ 15, 250 P.3d 56.
¶19 Pioneer next contends that the district court erred in
dismissing its Second Suit under the doctrine of claim
preclusion. “The purpose of a rule 12(b)(6) motion is to challenge
the formal sufficiency of the claim for relief, not to establish the
facts or resolve the merits of a case.” Van Leeuwen v. Bank of Am.
NA, 2016 UT App 212, ¶ 6, 387 P.3d 521 (cleaned up).
Accordingly, “dismissal is justified only when the allegations of
the complaint clearly demonstrate that the plaintiff does not
have a claim.” Id. (cleaned up). “Whether res judicata, and more
specifically claim preclusion, bars an action presents a question
of law that we review for correctness.” Haik v. Salt Lake City
Corp., 2017 UT 14, ¶ 7, 393 P.3d 285 (cleaned up).
¶20 Finally, Pioneer argues that the district court erred in
granting summary judgment to TaxHawk on its quiet-title
counterclaim. Specifically, Pioneer asserts that the district court
erred by barring Pioneer, under the doctrine of claim preclusion,
20180159-CA 7 2019 UT App 213Pioneer Home v. TaxHawk
from asserting boundary by acquiescence as a defense. As
explained above, we review a district court’s summary judgment
decision for correctness. Bahr, 2011 UT 19, ¶ 15.
¶21 Before we reach Pioneer’s first issue, however, we must
determine whether we have jurisdiction over the first summary
judgment decision. TaxHawk contends that we lack jurisdiction
because the order described itself as “a Final Judgment” and,
even though defective as a rule 54(b) certification under the Utah
Rules of Civil Procedure, it should have been immediately
appealed. “Whether appellate jurisdiction exists is a question of
law.” EnerVest, Ltd. v. Utah State Eng’r, 2019 UT 2, ¶ 12, 435 P.3d
209 (cleaned up).
ANALYSIS
I. We Have Jurisdiction Over Pioneer’s Appeal from the First
Summary Judgment Decision.
¶22 TaxHawk contends that we lack jurisdiction over the
appeal of the district court’s summary judgment decision in the
First Suit. TaxHawk argues that because counterclaims were still
pending when the court entered its order, “[t]he only way to
make sense of the court’s declaring that its judgment was final is
that the court sua sponte certified the judgment as final under
rule 54(b)” of the Utah Rules of Civil Procedure. But, TaxHawk
continues, the attempted certification was defective because, at
the least, “the court failed to ‘make an express determination
that there is no just reason for delay.’” (Quoting Copper Hills
Custom Homes, LLC v. Countrywide Bank, FSB, 2018 UT 56, ¶ 16,
428 P.3d 1133.) Even so, TaxHawk asserts that the defect and
underlying decision are “beyond appellate review” based on our
supreme court’s decision in Clark v. Archer, 2010 UT 57, 242 P.3d
758. There, our supreme court held that a rule 54(b) certification,
even if improper, must be immediately appealed. Id. ¶ 16.
20180159-CA 8 2019 UT App 213Pioneer Home v. TaxHawk
Because the first summary judgment decision in this case was
not appealed within thirty days of that decision, TaxHawk
maintains that we lack appellate jurisdiction over that decision.
¶23 Pioneer counters that the summary judgment decision
lacked any rule 54(b) language and thus did not have to be
immediately appealed. It argues that TaxHawk’s interpretation
of rule 54(b) is “illogical” and would require Pioneer to
immediately appeal an order that does not contain any language
that makes it immediately appealable.
¶24 We agree with Pioneer. Rule 54(b) provides,
When an action presents more than one claim for
relief—whether as a claim, counterclaim, cross
claim, or third party claim—and/or when multiple
parties are involved, the court may enter judgment
as to one or more but fewer than all of the claims or
parties only if the court expressly determines that
there is no just reason for delay.
Utah R. Civ. P. 54(b) (emphasis added.) Our supreme court has
“steadfastly adhered to a narrow approach to 54(b)
certifications” and has required district courts not only to make
an express determination that “there is no just reason for delay”
but to make specific findings that “advance a rationale as to why
such is the case.” Copper Hills, 2018 UT 56, ¶¶ 17, 21 (cleaned up).
The supreme court has also noted that district courts almost
“universally includ[e] an incantation that there is no just reason
for delay” when certifying an order under rule 54(b). First Nat’l
Bank of Layton v. Palmer, 2018 UT 43, ¶ 14, 427 P.3d 1169 (cleaned
up).
¶25 Here, the district court did not make this express
determination, did not include any factual findings supporting
such a determination, and did not cite rule 54(b) in any way.
20180159-CA 9 2019 UT App 213Pioneer Home v. TaxHawk
Though its decision was mislabeled “a Final Judgment,” there
was nothing to signal that either the parties or the court intended
to invoke rule 54(b). Even Clark, on which TaxHawk relies,
referenced the rote incantation, “The Court expressly finds no
just reason . . . to delay the entry of a final judgment.” 2010 UT
57, ¶ 2 (cleaned up). Without any suggestion in the record or the
court’s order of its intent to certify the non-final summary
judgment decision, we conclude that the decision did not
constitute a rule 54(b) certification—even a defective one—that
needed to be immediately appealed. Because Pioneer’s appeal
was otherwise timely, 3 we have jurisdiction over the first
summary judgment decision.
II. Pioneer Failed to Carry Its Burden on Summary Judgment.
¶26 Pioneer challenges the district court’s first summary
judgment decision rejecting Pioneer’s boundary-by-acquiescence
claims. Specifically, Pioneer contends that the court erred by
determining that a quitclaim deed is “a necessary element of
boundary by acquiescence” and that Pioneer’s claims failed
because it did not obtain a deed for the Disputed Strip. (Cleaned
up.) We resolve this issue based on the well-established burdens
of the respective parties on a summary judgment motion and
ultimately affirm the district court’s decision because Pioneer
failed to carry its burden in opposing TaxHawk’s motion.
¶27 The district court granted TaxHawk’s summary judgment
motion by determining that there were no disputed issues of
material fact on Pioneer’s boundary-by-acquiescence claims.
Like TaxHawk did in its reply, the court assumed for purposes
of the motion’s resolution that the Drive-In satisfied the
3. Pioneer’s appeal was timely taken from the final judgment
and order resolving all pending claims, including TaxHawk’s
counterclaims.
20180159-CA 10 2019 UT App 213Pioneer Home v. TaxHawk
boundary-by-acquiescence elements. 4 Nevertheless, relying on
Brown v. Peterson Development Co., 622 P.2d 1175 (Utah 1980), for
the proposition that a successor-in-interest to a piece of property
allegedly acquired through boundary by acquiescence must
“receive[] title to the disputed land from the former owner by
deed,” the court granted judgment in favor of TaxHawk because
it determined that “title to the disputed property was never
transferred to [Pioneer]” when Pioneer never received a deed to
the Disputed Strip from a former owner.
¶28 Because it is pertinent to our resolution of this issue, we
briefly describe Brown, which also involved a boundary dispute.
In Brown, an old fence separated adjoining properties—the east
property and west property. Id. at 1176. For over forty-six years,
the owners of the properties accepted the old fence as the
boundary until a survey was conducted to ascertain the actual
boundary line. Id. at 1177. The survey revealed that the record
title line was some seventy feet to the west of the old fence,
leaving a strip of land between the record boundary and the old
fence. Id. The supreme court determined that a previous owner
of the west property “had acquired title to the disputed strip of
land by operation of law under the doctrine of boundary by
acquiescence.” Id. And the court held that the plaintiffs, who
were successors-in-interest to the west property, subsequently
obtained legal title to the strip of land through quitclaim deeds
from the previous owner, stating,
The fact that the plaintiff lot buyers had notice of
the actual lot boundaries before buying and closing
their lot purchases would have been fatal to their
action if they had not received a conveyance of the
4. For purposes of this appeal, we follow suit and assume the
Drive-In’s legal title to the Disputed Strip without deciding the
same.
20180159-CA 11 2019 UT App 213Pioneer Home v. TaxHawk
legal title to the disputed strip of land by means of
quitclaim deeds from the former owners of it.
Id. at 1178. The court explained that the defendants had lost legal
title by operation of the doctrine of boundary by acquiescence
and that the title “did not revert to the defendants nor to the
former owners of the record title when the surveyors established
the record title line.” Id. Rather, title to the disputed strip
remained in the plaintiffs’ predecessor-in-interest, who
conveyed title to the plaintiffs through deed. Id.
¶29 On appeal, Pioneer assails the district court’s
determination on summary judgment that a deed was required
to establish its ownership of the Disputed Strip, contending that
its ownership of the strip was and is not dependent on whether
it received a deed to the Disputed Strip from the Drive-In. While
there may be some merit to Pioneer’s argument that a deed was
not strictly required for it to receive title to the Disputed Strip,
we nevertheless conclude that Pioneer did not carry its burden
below to identify evidence that would defeat summary
judgment on its claims. On this basis, we decline to reverse the
district court’s first summary judgment decision.
¶30 The relative burdens of proof on summary judgment are
well-established. On claims for which it will not carry the
burden of proof at trial, the moving party may demonstrate its
entitlement to judgment as a matter of law by pointing to an
absence of evidence establishing one or more of the elements of
the plaintiff’s claim. Salo v. Tyler, 2018 UT 7, ¶¶ 2, 22–32, 417 P.3d
581; see also Waddoups v. Amalgamated Sugar Co., 2002 UT 69, ¶ 31,
54 P.3d 1054 (describing the burden shifting between the moving
and non-moving parties in summary judgment). Once the
moving party does so, to defeat summary judgment the
non-moving party, who bears the burden of proof at trial, must
produce affirmative evidence, beyond mere reliance on the
20180159-CA 12 2019 UT App 213Pioneer Home v. TaxHawk
pleadings, showing that “there is a genuine issue for trial.” Salo,
2018 UT 7, ¶ 25 (cleaned up); see also Waddoups, 2002 UT 69, ¶ 31.
¶31 Here, Pioneer asserted boundary-by-acquiescence claims
against TaxHawk and, accordingly, would have carried the
burden of proof at trial on those claims. In its summary
judgment motion, TaxHawk argued that there was no evidence
supporting the elements of occupation and acquiescence for the
required time period and that, as a result, it was entitled to
judgment as a matter of law. To properly rebut TaxHawk’s
motion, Pioneer was thus required to set forth affirmative
evidence establishing that TaxHawk was not entitled to
judgment as a matter of law. See Salo, 2018 UT 7, ¶¶ 2, 22–32.
Pioneer did not do so. Accordingly, the district court’s grant of
summary judgment was proper. See id.
¶32 To establish boundary by acquiescence, a claimant must
satisfy four elements: “(i) occupation up to a visible line marked
by monuments, fences, or buildings, (ii) mutual acquiescence in
the line as a boundary, (iii) for a period of at least 20 years,
(iv) by adjoining landowners.” Anderson v. Fautin, 2016 UT 22,
¶¶ 8, 30–31, 379 P.3d 1186 (cleaned up). A party “obtain[s] title
[to the disputed property] by operation of law at the time the
elements . . . [are] satisfied.” Q–2 LLC v. Hughes, 2016 UT 8, ¶ 14,
368 P.3d 86; see also id. ¶ 18 (stating that “title is vested as soon as
the elements are satisfied just as if title had been transferred by
deed” (cleaned up)). 5
5. In Q–2 LLC v. Hughes, our supreme court resolved a single
issue: “how and when does a party acquire title to property
under the doctrine of boundary by acquiescence?” 2016 UT 8,
¶ 1, 368 P.3d 86. It held that “a party obtains title under the
doctrine of boundary by acquiescence by operation of law at the
time the elements of the doctrine are satisfied.” Id. (emphasis added);
(continued…)
20180159-CA 13 2019 UT App 213Pioneer Home v. TaxHawk
¶33 Importantly, once title vests under a theory of boundary
by acquiescence, it remains vested in the title owner “‘until it
passes by grant, descent, adverse possession, or some other operation of
law.’” Id. ¶ 18 (emphasis added) (quoting Goldman v. Quadrato,
114 A.2d 687, 690 (Conn. 1955)) (further explaining that “title
transfer” in boundary-by-acquiescence cases operates in the
same manner as that in adverse possession—“by operation of
law, not by judicial fiat”); see also DeShon v. St. Joseph Country
Club Village of the Country Club, 755 S.W.2d 265, 268 (Mo. Ct.
App. 1988) (“Once title becomes vested by adverse possession, it
remains so until passed by grant or by operation of law as
other titles are transferred.”); Murdock v. Zier, 2006 WY 80, ¶¶ 17,
19, 137 P.3d 147 (stating that “[o]nce all the elements of adverse
possession are met, the possessor is vested with a fully new
and distinct title,” and that “[o]nce vested, title can only be
divested by conveyance, descent or operation of law” (cleaned
up)). See generally Tripp v. Bagley, 276 P. 912, 916 (Utah 1928)
(stating the general rule that “where the owners of adjoining
lands occupy their respective premises up to a certain line
which they mutually recognize as the boundary line for a long
period of time, they and their grantees may not deny that the
boundary line thus recognized is the true one” (emphasis
added)).
¶34 As noted, Pioneer implicitly conceded below that it could
not meet the elements of boundary by acquiescence on its own
apart from its predecessors-in-interest, and the district court
(…continued)
see also id. ¶ 10. The court reaffirmed and clarified Brown v.
Peterson Development Co., 622 P.2d 1175 (Utah 1980), in so
holding. Id. ¶¶ 12, 14–15. And it described its determination in
Brown “that a party could acquire title to disputed property by
operation of law and transfer that title” without judicial
involvement as its holding. Id. ¶ 12.
20180159-CA 14 2019 UT App 213Pioneer Home v. TaxHawk
assumed that the Drive-In satisfied the required elements.
Relying on Brown, the court nevertheless concluded that to claim
title to the Disputed Strip, Pioneer could not simply rely on the
fact that one of its predecessors-in-interest acquired legal title
through the boundary-by-acquiescence doctrine. Instead, the
court explained that title in the predecessor “remains vested
until it passes by deed,” and it granted judgment to TaxHawk
because it determined that the law required Pioneer to show that
title to the Disputed Strip transferred to it by deed and that
Pioneer “never received title to the disputed land from the
former owner by deed.” (Emphasis added.)
¶35 We do not agree with the district court’s apparent
presumption that, in the abstract, legal title acquired through
boundary by acquiescence may be transferred to a
successor-in-interest only through deed. Our supreme court’s
recent decision in Q–2 clearly states that title vested through
boundary by acquiescence may be transferred to a
successor-in-interest in a variety of ways, including by “‘grant,
descent, adverse possession, or some other operation of law.’”
2016 UT 8, ¶ 18 (quoting Goldman, 114 A.2d at 690). The fair
conclusion to draw from Q–2 is thus that title acquired through
boundary by acquiescence may be transferred to a successor
through means apart from a deed. See id.
¶36 Nevertheless, even if transfer by deed may not be the
exclusive vehicle through which title acquired through
boundary by acquiescence may be transferred, it is clear that
some vehicle of title transfer as between the vested title owner
and a potential successor-in-interest must occur to establish the
successor’s entitlement to the disputed property. See id.; Brown,
622 P.2d at 1178 (explaining that, once title vested in the
predecessor through boundary by acquiescence, “[t]he legal title
to the disputed strip remained in [the predecessor] or his grantee
or successor in interest”); see also DeShon, 755 S.W.2d at 268; cf.
Home Owners’ Loan Corp. v. Dudley, 141 P.2d 160, 168–69 (Utah
20180159-CA 15 2019 UT App 213Pioneer Home v. TaxHawk
1943) (explaining, in the context of adverse possession, that
“[t]here must be privity between persons successively holding
adversely in order to tack the possession of a predecessor in
possession to that of his successor,” and noting that while “a
deed does not in and of itself create any privity between grantor
and grantee as to land not described in the deed,” tacking of the
prior owner’s possession to the successor’s may occur without a
deed in circumstances where evidence is presented to “show an
intent to transfer the possessory claim”). In other words, even if
Pioneer was perhaps not strictly required to establish its
ownership of the Disputed Strip through deed, for purposes of
summary judgment it was required to put forth evidence
establishing its acquisition of the Disputed Strip through some
other means. See Q–2, 2016 UT 8, ¶ 18; see also Salo, 2018 UT 7,
¶¶ 25–28.
¶37 Pioneer provided the district court no evidence
suggesting that the Drive-In’s purported legal title to the
Disputed Strip ever transferred to it. Rather, in its opposition to
TaxHawk’s summary judgment motion, Pioneer relied
completely on the fact of the Drive-In’s alleged legal title to
establish facts sufficient to rebut TaxHawk’s claims. It argued
only that TaxHawk was not entitled to judgment as a matter of
law because “the requirements for boundary by acquiescence
were satisfied [by the Drive-In] long before [Developer] took
possession of the Pioneer Property.” Pioneer effectively left the
court to fill in the blanks, both legally and factually, for any
chain of title existing between it and the Drive-In for the
Disputed Strip.
¶38 As a result, at the time TaxHawk’s motion was submitted
for decision, the only evidence before the court to establish the
essential elements of Pioneer’s claims was (1) the Drive-In’s
alleged legal title to the Disputed Strip and (2) Pioneer’s current
possession, which both parties essentially agreed was
insufficient on its own to establish title through boundary by
20180159-CA 16 2019 UT App 213Pioneer Home v. TaxHawk
acquiescence. Under those circumstances, and given the clear
statements of law in Q–2 and Brown regarding the necessity of
title transfer to a successor who has not acquired boundary by
acquiescence in its own right, the district court was correct to
resolve the motion in TaxHawk’s favor.
¶39 For the foregoing reasons, we therefore affirm the district
court’s grant of summary judgment to TaxHawk in the First Suit.
III. Pioneer’s Second Suit Should Not Have Been Barred by
Claim Preclusion.
¶40 Pioneer next contends that the district court should
not have dismissed its Second Suit on res judicata grounds.
Pioneer asserts that the acquisition of the quitclaim deed
from the Drive-In is a “new transaction” that made res judicata,
and specifically the claim preclusion branch, inapplicable.
We agree with Pioneer that acquiring the quitclaim deed was
a new transaction and that the district court erred by
concluding that Pioneer “could” or “should” have acquired the
deed from the Drive-In during the First Suit. On this basis, we
reverse.
¶41 Claim preclusion, a branch of res judicata, is “premised
on the principle that a controversy should be adjudicated
only once.” Salt Lake Citizens Congress v. Mountain States Tel.
& Tel. Co., 846 P.2d 1245, 1251 (Utah 1992); see also Mack v.
Utah State Dep’t of Commerce, 2009 UT 47, ¶ 29, 221 P.3d 194.
Whether a claim is precluded depends on a three-part test:
First, both cases must involve the same parties or
their privies. Second, the claim that is alleged to be
barred must have been presented in the first suit or
be one that could and should have been raised in
the first action. Third, the first suit must have
resulted in a final judgment on the merits.
20180159-CA 17 2019 UT App 213Pioneer Home v. TaxHawk
Mack, 2009 UT 47, ¶ 29 (cleaned up). Further, res judicata is an
affirmative defense, see Utah R. Civ. P. 8(c); State v. Baker, 2008
UT App 8, ¶ 3, 176 P.3d 493, and the proponent of res judicata
carries the burden of proving it, see H & H Network Services, Inc.
v. Unicity Int’l, Inc., 2014 UT App 73, ¶ 8, 323 P.3d 1025. Thus,
TaxHawk had the burden to establish its res judicata defense to
the Second Suit.
¶42 On appeal, Pioneer challenges the district court’s decision
only as to the second element—that it “could and should” have
raised its quiet-title claim based on the quitclaim deed in the
First Suit. 6 In determining whether the second element of claim
preclusion is satisfied, Utah courts have expressly adopted the
transactional test described in section 24 of the Restatement
(Second) of Judgments. Gillmor v. Family Link, LLC, 2012 UT 38,
6. Pioneer does not argue that the third element—a final
judgment on the merits—is not met. When the district court
dismissed Pioneer’s Second Suit, its dismissal of the First Suit
was not yet final because, at the least, TaxHawk had remaining
counterclaims pending. See WDIS, LLC v. Hi-Country Estates
Homeowners Ass’n, 2019 UT 45, ¶¶ 22–24 & n.21, 449 P.3d 171(explaining that an order is final and appealable “so long as
there are no claims pending below”); Jordan Constr., Inc. v. Federal
Nat’l Mortgage Ass’n, 2017 UT 28, ¶ 45, 408 P.3d 296 (noting that
“final judgment” for purposes of claim preclusion “has the same
meaning as that term does for purposes of appeal”). Indeed, in
resisting dismissal, Pioneer argued below that it was “clearly
erroneous to apply claim preclusion to [its] most recent claims
when there had been no final judgment on the merits.” But
Pioneer has not made that argument on appeal and states
numerous times that it challenges only the district court’s ruling
regarding the second element. We therefore treat the third
element as satisfied, although admittedly our analysis regarding
jurisdiction above suggests otherwise. See supra ¶¶ 22–25.
20180159-CA 18 2019 UT App 213Pioneer Home v. TaxHawk
¶ 13, 284 P.3d 622 (“Today, we fully embrace the Restatement’s
transactional test.”); see also Haik v. Salt Lake City Corp., 2017 UT
14, ¶ 9, 393 P.3d 285; Mack, 2009 UT 47, ¶ 30. The Restatement
transactional test is based on the overall “expectation that parties
who are given the capacity to present their ‘entire controversies’
shall in fact do so.” Restatement (Second) of Judgments § 24 cmt.
a (Am. Law Inst. 1982); see also Ringwood v. Foreign Auto Works,
Inc., 786 P.2d 1350, 1357 (Utah Ct. App. 1990).
¶43 Under the transactional test, “claims are the same if they
arise from the same operative facts, or in other words from the
same transaction.” Van Leeuwen v. Bank of Am. NA, 2016 UT App
212, ¶ 9, 387 P.3d 521 (cleaned up); see also Gillmor, 2012 UT 38,
¶ 13 (stating that under the transactional test, claim preclusion
“generally is thought to turn on the essential similarity of the
underlying events giving rise to the various legal claims” rather
than the “specific legal theory invoked” (cleaned up)).
What factual grouping constitutes a “transaction”
. . . [is] to be determined pragmatically, giving
weight to such considerations as whether the facts
are related in time, space, origin, or motivation,
whether they form a convenient trial unit, and
whether their treatment as a unit conforms to the
parties’ expectations or business understanding or
usage.
Restatement (Second) of Judgments § 24(2).
¶44 Significantly, while “a mere change in legal theory does
not create a new cause of action,” 18 Charles Alan Wright et al.,
Federal Practice and Procedure: Jurisdiction § 4407, at 193 (3d ed.
2016), “[m]aterial operative facts occurring after the decision of
an action with respect to the same subject matter may in
themselves, or taken in conjunction with the antecedent facts,
comprise a transaction which may be made the basis of a second
20180159-CA 19 2019 UT App 213Pioneer Home v. TaxHawk
action not precluded by the first,” Restatement (Second) of
Judgments § 24 cmt. f (emphasis added). Indeed, our supreme
court has held that “parties are required to include claims in an
action for res judicata purposes only if those claims arose before
the filing of the complaint in the earlier action.” Macris & Assocs.,
Inc. v. Neways, Inc., 2000 UT 93, ¶ 26, 16 P.3d 1214; see also Macris
& Assocs., Inc. v. Neways, Inc., 1999 UT App 230, ¶ 11, 986 P.2d
748 (stating that the “scope of litigation is framed by the
complaint at the time it is filed” and that claim preclusion “does
not apply to new rights acquired pending the action which
might have been, but which were not, required to be litigated”
(cleaned up)), aff’d, 2000 UT 93, 16 P.3d 1214.
¶45 Here, to establish its res judicata defense, TaxHawk
argued in its motion to dismiss that Pioneer “could and should”
have brought its quiet-title claim in the First Suit because
(1) Pioneer knew that its deed did not include the Disputed
Strip, (2) in the First Suit Pioneer necessarily relied on its
predecessors-in-interest to prove its quiet-title claims,
(3) TaxHawk put Pioneer on notice during the First Suit that
Pioneer would need a deed from the Drive-In to establish its
claims, and (4) Pioneer knew of and “had access” to the Drive-In
in the First Suit. Accordingly, TaxHawk argued, “the
conveyance of [the Disputed Strip] could and should have
occurred prior to or during the [First Suit] and the claim could
and should have been raised in the [First Suit].” 7
7. In moving to dismiss Pioneer’s complaint, TaxHawk made
these statements as though they were established facts.
Ordinarily, it would be improper for the district court, on a rule
12(b)(6) motion, to grant the motion based on facts not alleged in
the Second Suit’s complaint. Robinson v. Robinson, 2016 UT App
33, ¶ 17, 368 P.3d 105 (stating that a rule 12(b)(6) motion to
dismiss is “limited to consideration of the facts alleged in the
(continued…)
20180159-CA 20 2019 UT App 213Pioneer Home v. TaxHawk
¶46 At oral argument on the motion before the district court,
TaxHawk reiterated its position about what Pioneer purportedly
knew during the First Suit as well as Pioneer’s access to the
Drive-In. And as further evidence that Pioneer “could and
should” have obtained the quitclaim deed from the Drive-In
during the First Suit, TaxHawk pointed to an instance during the
First Suit when Pioneer did obtain a deed from Developer.
Specifically, in response to a motion filed by TaxHawk, Pioneer
requested a continuance pursuant to rule 56(d) of the Utah Rules
of Civil Procedure to obtain the deed from its immediate
predecessor, Developer. In essence, TaxHawk contended that the
Second Suit was claim precluded because Pioneer could and
should have again availed itself of rule 56(d) to acquire the
quitclaim deed from the Drive-In but opted not to in a failed
attempt to argue that a deed to the Disputed Strip was not
required.
¶47 The district court largely agreed with TaxHawk. In its oral
ruling, the court stated its conclusion that “[t]he claim resting on
the newly acquired quitclaim deed should or could have been
brought in the first action.” The court reasoned that the
“necessity of the quitclaim deed as an element of the boundary
by acquiescence cause of action was squarely presented to the
Court” in the First Suit, and that, in its view, the holding of
Brown was “directly on point with respect to that issue.” And the
court referenced Pioneer’s previous use of rule 56(d) to obtain a
deed during the First Suit, stating that that “procedural
mechanism” was “available to stay decision” on TaxHawk’s
summary judgment motion to also allow it to “acquire the
necessary quitclaim deed” from the Drive-In. Unfortunately for
(…continued)
pleading itself” (cleaned up)). However, because Pioneer does
not raise this issue as a basis for reversal, we do not address it
further.
20180159-CA 21 2019 UT App 213Pioneer Home v. TaxHawk
Pioneer, the court explained, Pioneer made the strategic decision
to argue that the deed was not required instead of simply using
rule 56(d) to obtain it—a strategy that ultimately failed. For these
reasons, the court determined that Pioneer “could have and
should have” used the procedural mechanism available to stay
the proceedings and obtain the deed from the Drive-In during
the First Suit. Accordingly, the court determined that Pioneer’s
quiet-title claim in the Second Suit was claim precluded as a
matter of law.
¶48 On appeal, Pioneer argues that the district court erred by
concluding that Pioneer “could and should” have acquired the
quitclaim deed from the Drive-In in the First Suit, and thus
“could and should” have brought its new claim in that suit.
Pioneer contends that its quiet-title claim is not precluded,
because the Drive-In’s quitclaim deed constituted a new,
material fact that depended on the voluntary relinquishment of a
right by a third party. More particularly, Pioneer argues that its
knowledge of and access to the Drive-In during the First Suit
(along with its alleged knowledge that it needed a quitclaim
deed) is not sufficient to establish claim preclusion where it did
not possess the quitclaim deed at the time of the First Suit and its
ability to obtain the quitclaim deed depended on the Drive-In.
¶49 We agree with Pioneer that the district court erred when it
determined that Pioneer’s receipt of the quitclaim deed was not
a new transaction. As explained above, Utah courts have
expressly adopted the transactional test described in section 24
of the Restatement (Second) of Judgments for resolving the
identity between claims. See Gillmor, 2012 UT 38, ¶ 13;
Restatement (Second) of Judgments § 24. And under this test,
Pioneer’s receipt of the quitclaim deed from the Drive-In
constituted a new, material operative fact—one that made the
quiet-title theory raised in the Second Suit available to Pioneer
for the first time. At the time of the First Suit, Pioneer did not
have a quitclaim deed from the Drive-In or any legal right to
20180159-CA 22 2019 UT App 213Pioneer Home v. TaxHawk
such a deed. As a result, at the time Pioneer filed its initial
complaint, it did not have available to it a quiet-title theory for
the Disputed Strip based on possessing a deed for that land, and
it therefore did not yet have “the capacity to present” a claim
based on the same. See Ringwood, 786 P.2d at 1357 (cleaned up);
see also Macris, 2000 UT 93, ¶ 25 (stating that “a party is required
to include claims in an action for res judicata purposes only if
those claims arose before the filing of the complaint in the first
action”); Schaer v. Department of Transp., 657 P.2d 1337, 1340
(Utah 1983) (rejecting application of res judicata to bar a second
action to acquire property where the two causes of action rested
“on a different state of facts” related to the status of the property
at two different times).
¶50 To be sure, the facts between the First Suit and Second
Suit are very similar. In both, Pioneer’s motivation is to
demonstrate its ownership of the Disputed Strip, and it must
rely on the Drive-In’s acquisition of it through boundary by
acquiescence. The evidence underlying the claims will, in some
part, be the same, and it certainly would have been more
efficient for Pioneer to obtain the deed earlier—or wait to bring
its lawsuit until it had the deed. But it was only through the
Drive-In’s voluntary decision, subsequent to the First Suit, to
quitclaim the Disputed Strip to Pioneer that the operative facts
and theory propounded in the Second Suit became available to
form the basis of a claim for relief. 8 Accordingly, because the
quiet-title claim in the Second Suit was based on new and
material operative facts sufficient to form a new, distinct
transaction, Pioneer could not have brought the claim in the First
Suit and thus was not required to. See Gillmor, 2012 UT 38, ¶ 23;
8. Indeed, the Drive-In was free to quitclaim its interest in the
Disputed Strip to whomever it chose—including Pioneer—at
whatever time it chose.
20180159-CA 23 2019 UT App 213Pioneer Home v. TaxHawk
Macris, 2000 UT 93, ¶ 25; cf. Whole Woman’s Health v. Hellerstedt,
136 S. Ct. 2292, 2305–07 (2016) (discussing the contours of claim
preclusion with respect to the “development of new material
facts,” and approving the approach described in comment f of
section 24 of the Restatement (Second) of Judgments);
Restatement (Second) of Judgments § 20(2) & cmt. k (Am. Law
Inst. 1982) (providing that “[a] valid and final personal judgment
for the defendant, which rests on the prematurity of the action or
on the plaintiff’s failure to satisfy a precondition to suit, does not
bar another action by the plaintiff instituted after the claim has
matured, or the precondition has been satisfied,” and explaining,
with reference to comment f of section 24, that a determination
that a claim is premature “is not a determination that [the
plaintiff] may not have an enforceable claim thereafter, and does
not normally preclude him from maintaining an action when the
claim has become enforceable”). See generally Mack, 2009 UT 47,
¶ 29 (setting forth the claim preclusion elements).
¶51 In short, the relevant question under the transactional test
is whether a party could and therefore should have brought a
claim at the time the lawsuit was filed, not whether a party could
and therefore should have done more before or during its
lawsuit to better its claim. See Macris, 2000 UT 93, ¶ 27
(explaining that Macris was “not obligated to amend its
complaint . . . to include the claims now pursued in the present
action” where “[t]he facts giving rise” to the claims “did not
arise until after the filing of the complaint” in the first action).
The district court erred by failing to determine that Pioneer’s
subsequent receipt of the quitclaim deed constituted a new,
different operative fact sufficient to render the quiet-title claim in
the Second Suit legally and factually distinct from those raised in
the First Suit. See id.
¶52 Accordingly, we hold that Pioneer’s Second Suit is not
barred by claim preclusion, because acquiring the deed to the
Disputed Strip from the Drive-In following the First Suit
20180159-CA 24 2019 UT App 213Pioneer Home v. TaxHawk
constituted a new, distinct transaction, and Pioneer therefore
could not have asserted the quiet-title claim based on the deed
during the First Suit. On this basis, we reverse the district court’s
dismissal of the Second Suit as claim precluded.
IV. The District Court’s Rejection of Pioneer’s
Boundary-by-Acquiescence Defense Must Be Reversed.
¶53 Finally, Pioneer argues that the district court erred by
rejecting its attempt to raise boundary by acquiescence as an
affirmative defense to TaxHawk’s quiet-title counterclaim. After
the district court dismissed Pioneer’s Second Suit as claim
precluded, the parties filed cross-motions for summary
judgment on TaxHawk’s counterclaims. In its motion, Pioneer
raised as an affirmative defense boundary by acquiescence,
arguing that TaxHawk could not succeed on its quiet-title
counterclaim because it did not own the Disputed Strip. The
court denied Pioneer’s motion for summary judgment on the
counterclaim, instead granting TaxHawk’s motion and quieting
title to the Disputed Strip in TaxHawk’s favor. In doing so, the
court explained that there was “no meaningful distinction
between [Pioneer’s] claim to quiet title in its favor under a theory
of boundary by acquiescence, which is now barred by the
doctrine of claim preclusion,” and Pioneer’s “defense against
title being quieted in the same property in favor of TaxHawk
under the same theory.” On that basis, the court concluded that
Pioneer “cannot repackage its barred claim in the form of an
affirmative defense.”
¶54 On appeal, Pioneer claims the court erred by not
permitting it to assert as a defense its boundary-by-acquiescence
theory. Conceding that, as a general rule, claims barred by claim
preclusion cannot later be raised in the same case as affirmative
defenses, Pioneer nevertheless asserts that there is a substantive
difference in a plaintiff’s assertion of boundary by acquiescence
20180159-CA 25 2019 UT App 213Pioneer Home v. TaxHawk
to establish its own land ownership and a defendant’s attempt
merely to show that the plaintiff “does not own the land.”
¶55 We have no occasion to reach the merits of Pioneer’s
challenge on this point. Central to the district court’s rejection of
Pioneer’s boundary-by-acquiescence defense was its
determination that Pioneer’s quiet-title claim based on the same
theory was claim precluded. As explained above, we have
reversed the district court’s dismissal of Pioneer’s Second Suit on
the basis of claim preclusion. Supra ¶¶ 40–52. Therefore, we also
necessarily reverse the district court’s refusal to consider
Pioneer’s boundary-by-acquiescence defense on that basis.
CONCLUSION
¶56 We have jurisdiction over Pioneer’s appeal. First, because
Pioneer failed to demonstrate that it had received ownership to
the Disputed Strip, we affirm the district court’s summary
judgment dismissing Pioneer’s First Suit. Second, we conclude
that the district court erred in determining that Pioneer’s
Second Suit was barred by claim preclusion. Third, we conclude
that the district court’s refusal to consider Pioneer’s
boundary-by-acquiescence defense is not sustainable, given our
conclusion that the Second Suit was not barred under the
doctrine of claim preclusion. Thus, we affirm in part, reverse in
part, and remand for further proceedings.
20180159-CA 26 2019 UT App 213Pioneer Home v. TaxHawk
APPENDIX
The graphic representation of the relevant properties comes
courtesy of Pioneer’s opening brief and is reproduced here for
illustrative purposes only. The dotted line represents the
boundary described in the parties’ deeds, while the solid lines
represent the boundaries purportedly established by
acquiescence.
.
.
.
TaxHawk Vandelay
.
Property Property
.
.
.
.
.
Disputed Strip .
. . . . . . . . . . . . . . . . . .
Pioneer Property
20180159-CA 27 2019 UT App 213