Bell Canyon Acres Homeowners Ass'n v. McLelland

This opinion is subject to revision before final
publication in the Pacific Reporter
2019 UT 17IN THE
SUPREME COURT OF THE STATE OF UTAH
BELL CANYON ACRES HOMEOWNERS ASSOCIATION, 1
Appellants,
v.
MICHAEL SEAN MCLELLAND, 2
Appellees.
No. 20180072
Filed May 21, 2019
On Appeal of Interlocutory Order
Third District, Salt Lake
The Honorable Gary D. Stott
No. 160907281
Attorneys:
Gregory S. Moesinger, Salt Lake City, for appellants
Dale B. Kimsey, Salt Lake City, for appellees
JUSTICE HIMONAS authored the opinion of the Court in which
CHIEF JUSTICE DURRANT, ASSOCIATE CHIEF JUSTICE LEE,
JUSTICE PEARCE, and JUSTICE PETERSEN joined.
JUSTICE HIMONAS, opinion of the Court:
_____________________________________________________________
1 CRAIG F. MCCULLOUGH, PATRICIA A. MCCULLOUGH, ZACHARY E.
FRANKEL, WENDY E. FISHER, BARRY SEYMOUR STOUT, and BONNIE F.
STOUT are also parties to this appeal.
2 KERRY D. MCLELLAND, MICHAEL SEAN AND KERRY DEE
MCLELLAND TRUST, CHRIS CARL WOHLHUETER, VERONICA MARIE
WOHLHUETER, JEFFREY E. STOPPENHAGEN, and MICHAEL NORDHOFF
are also parties to this appeal.
BELL CANYON ACRES v. MCLELLAND
Opinion of the Court
INTRODUCTION
¶1 Good fences, it appears, stop making good neighbors right
about where they start to encroach on bridle paths. 3 In this case we
are asked to decide whether the Utah Declaratory Judgment Act
requires neighbors objecting to such fences to sue all homeowners
whose property is subject to the bridle path easement or just those
homeowners who have fences (or other improvements) that are
alleged to infringe on the path. The district court thought the Act
required joinder of all homeowners and therefore declined to enter
summary judgment for appellants. We hold, however, that no such
joinder is required and reverse and remand this matter to the district
court for proceedings consistent with this opinion.
BACKGROUND
¶2 Bell Canyon Acres Community is a unique residential
neighborhood that is zoned for housing large animals and has
historically been used for the housing and enjoyment of horses.
Located throughout Bell Canyon Acres is a network of riding
easements and rights-of-way that are dedicated as bridle paths for
the use of residents. These bridle path easements originate in a series
of restrictive covenants that apply to the lots in Bell Canyon Acres.
The size and location of the bridle paths are reflected in a series of
recorded plat maps.
¶3 Appellants brought suit alleging that appellees—four of the
approximately one hundred homeowners in Bell Canyon Acres—
have intruded upon the bridle path, thereby violating the restrictive
covenants. Appellants sought a declaratory judgment determining
the parties’ rights in the bridle paths, determining the enforceability
of the restrictive covenants, and declaring that appellees are
encroaching on the bridle paths in violation of the restrictive
covenants. Appellees filed a motion to dismiss and appellants later
filed a motion for summary judgment. The district court denied both
motions. At issue in this case is the denial of appellants’ motion for
summary judgment.
¶4 The district court ruled that it could, as a matter of law,
determine that the restrictive covenant establishes a fifty-foot wide
bridle path easement over the appellees’ lots. The district court also
_____________________________________________________________
3For the less equestrian minded, a bridle path is “a trail suitable
for horseback riding.” Bridle path, WEBSTER’S NEW COLLEGIATE
DICTIONARY 138 (1973).
2
Cite as: 2019 UT 17Opinion of the Court
determined that a limitation period set forth in the restrictive
covenants did not preclude appellants’ enforcement of the bridle
path easement. But the district court denied summary judgment
because appellants did not join all homeowners in the community
whose property is subject to the restrictive covenants and the bridle
path easement (collectively, the outsiders). Drawing on the Utah
Declaratory Judgment Act, which provides that “[w]hen declaratory
relief is sought all persons shall be made parties who have or claim
any interest which would be affected by the declaration, and a
declaration may not prejudice the rights of persons not parties to the
proceeding,” UTAH CODE § 78B-6-403(1), the district court reasoned
that a declaration determining the scope of the bridle path easement
would also establish the scope of the easement for the outsiders. In
the district court’s estimation, then, the outsiders have interests that
would be affected by the declaration appellants seek. Accordingly,
the district court denied appellants’ motion for summary judgment.
¶5 Appellants filed this interlocutory appeal, asking us to
overturn the district court’s ruling that section 403 of the Utah
Declaratory Judgment Act mandates joinder of the outsiders before
appellants can proceed with their action for declaratory relief.
Specifically, appellants ask us to determine whether section 403
requires the outsiders—whose lots are subject to the restrictive
covenants and the bridle path easement—to be joined in appellants’
declaratory action seeking the interpretation and enforcement of the
restrictive covenants and easement as against appellees. 4
¶6 We exercise jurisdiction pursuant to Utah Code
section 78A-3-102(3)(j).
STANDARD OF REVIEW
¶7 “A district court’s interpretation of a statute is a question of
law, which we . . . review for correctness.” Bryner v. Cardon Outreach,
LLC, 2018 UT 52, ¶ 7, 428 P.3d 1096 (alteration in original) (citation
omitted) (internal quotation marks omitted).
_____________________________________________________________
4 Both parties also spend considerable portions of their briefs
making arguments regarding the enforceability and scope of the
restrictive covenants. But we granted this interlocutory appeal only
on the question of whether section 403 mandates joinder of the
outsiders. Accordingly, we do not address any of the parties’
arguments regarding the enforceability and scope of the restrictive
covenants.
3
BELL CANYON ACRES v. MCLELLAND
Opinion of the Court
ANALYSIS
¶8 Appellants ask us to determine whether, pursuant to
section 403 of the Utah Declaratory Judgment Act, the outsiders
must be joined in this action before appellants can proceed with their
claim for declaratory relief. We hold that they do not. The outsiders
have no legal interests that could be affected by the declaration
appellants seek here and therefore section 403 presents no
impediment to the declaratory relief appellants seek. This holding
dispositively resolves the issue before us on interlocutory appeal.
¶9 However, because the district court’s interpretation of
section 403 raises some constitutional concerns, we also take this
opportunity to briefly acknowledge and address these concerns.
I. SECTION 403 DOES NOT MANDATE JOINDER OF THE
OUTSIDERS IN THIS ACTION
¶10 Section 403 of the Utah Declaratory Judgment Act provides
that “[w]hen declaratory relief is sought all persons shall be made
parties who have or claim any interest which would be affected by
the declaration, and a declaration may not prejudice the rights of
persons not parties to the proceeding.” UTAH CODE § 78B-6-403(1).
The district court held that the outsiders have interests that would be
affected by a declaration here because “the determination of the size
of the Bridle Path easement on [appellees’] Property will establish
the width thereof not just for [appellees], but for all homeowners
whose property is traversed thereby.” Not so.
¶11 Below, appellants sought a declaratory judgment “in favor
of [appellants], and against [appellees], including that the Restrictive
Covenants are enforceable, that [appellants] have rights, title, and
interest in the Bridle Paths, and that [appellees] are violating,
trespassing, and encroaching the same, and thereby, damaging
[appellants].” Nowhere in their complaint do appellants ask the
court to determine or adjudicate the rights or interests of persons
that are not parties to this proceeding. In other words, appellants
seek a declaration affecting only their own legal interests and the
legal interests of the named appellees.
¶12 Additionally, it is a “core principle of due process” that
“outsiders not joined in a proceeding (and not in privity with
someone who was joined)” must be able to have their day in court.
Krejci v. City of Saratoga Springs, 2013 UT 74, ¶ 16, 322 P.3d 662 (citing
Blonder-Tongue Labs., Inc. v. Univ. of Ill. Found., 402 U.S 313, 329
(1971)). As a result, “if an outsider is not joined in an action, it is not
4
Cite as: 2019 UT 17Opinion of the Court
bound by the judgment and not precluded from filing a separate
proceeding to resolve the same or similar issues.” Id. ¶ 15.
¶13 There are therefore at least two impediments that preclude
holding that the outsiders have an interest that will be affected by a
declaration in this case. First, appellants have not sought a
declaration that purports to affect the interests of any outsider.
Rather, appellants seek a declaration that establishes rights only as to
appellants and appellees. And second, even if appellants sought a
declaration purporting to affect the legal interests of the outsiders,
that declaration would have no legal effect on the outsiders unless
they were joined in the action or were privies to a party joined in the
action—neither of which is satisfied here. 5
_____________________________________________________________
5 The outsiders cannot be considered privies of any party joined
in this action simply by virtue of also owning property subject to the
same restrictive covenants. “The legal definition of a person in
privity with another, is a person so identified in interest with another
that he represents the same legal right.” Searle Bros. v. Searle, 588 P.2d
689, 691 (Utah 1978). Examples of parties that have been found to be
in privity with one another—and therefore potentially subject to
claim and issue preclusion in a subsequent case—are “officers or
owners of a closely held corporation, partners, co-conspirators,
agents, alter egos or other parties with similar legal interests.” Press
Publ’g, Ltd. v. Matol Botanical Int’l, Ltd., 2001 UT 106, ¶ 20, 37 P.3d
1121 (surveying cases in which parties were considered privies). It is
not enough that the outsiders and the named parties here are both
parties to a contract—in this case, the restrictive covenants. The
individual property rights held by the outsiders are separate and
distinct from the individual property rights held by the named
parties. So the parties cannot be said to have rights so similar such
that the named parties represent the same legal rights as the
outsiders. Consequently, any of the outsiders’ rights under the
restrictive covenants may only be determined—and therefore their
legal interests may only be affected—in an action in which they are
joined as parties.
Additionally, it could be argued that section 403 eliminates claim
and issue preclusion with respect to declaratory judgments
involving privies. As the second half of subsection 403(1) provides,
“a declaration may not prejudice the rights of persons not parties to
the proceeding.” UTAH CODE § 78B-6-403(1). One reading of this
language is that a declaration may not prejudice any person that is
not party to a proceeding—i.e. not joined as a party—even if that
(continued . . .)
5
BELL CANYON ACRES v. MCLELLAND
Opinion of the Court
¶14 Because the outsiders not joined in this lawsuit—but whose
lots are also subject to the restrictive covenants—have no legal
interest that would be affected by the declaration appellants seek
here, section 403 provides no barrier to the declaratory relief
appellants seek. 6
II. SECTION 403 CANNOT PRESCRIBE RULES FOR JOINDER OR
INTERVENTION
¶15 Our determination that the outsiders have no legal interest
that would be affected by the declaration the appellants seek here is
dispositive. But we would also like to address another problem with
the district court’s interpretation of section 403 that raises a concern
about the operation of section 403. Specifically, if section 403 were
interpreted to somehow mandate and provide the procedure for
joinder or intervention of parties, that would raise serious concerns
about the constitutionality of section 403.
¶16 The Utah Constitution vests this court with the power and
obligation to “adopt rules of procedure and evidence to be used in
the courts of the state.” UTAH CONST. art. VIII, § 4. Pursuant to this
constitutional grant of authority, we have established rules of civil
procedure that address joinder of parties, UTAH R. CIV. P. 19, and
intervention by outside parties, UTAH R. CIV. P. 24.
¶17 This grant of rulemaking authority is not limitless.
Article VIII, section 4 also provides that “[t]he Legislature may
person is in privity with a named party. This issue, however, is not
before us and we need not pass on this question.
6 This conclusion also makes sense in practice. Take, for instance,
a planned community that contains hundreds—or even thousands—
of individual lots, all of which are subject to the same restrictive
covenant dictating the type of structures that can be built in the
community. If a single landowner chooses to build an unapproved
structure in violation of the restrictive covenant, it cannot be the case
that every person who resides in the community must be joined in
the action. To require that kind of joinder would exponentially
increase the cost of any litigation involving a restrictive covenant,
likely to the point that the restrictive covenants would become
effectively unenforceable given the immense costs associated with
enforcing them. Such a regime would frustrate the very purpose of
restrictive covenants, would result in huge amounts of unnecessary
litigation, and would, unlike good fences, make poor neighbors.
6
Cite as: 2019 UT 17Opinion of the Court
amend the Rules of Procedure and Evidence adopted by the
Supreme Court upon a vote of two-thirds of all members of both
houses of the Legislature.” But any such amendment “need[s] to
contain a reference to the rule to be amended and a clear expression
of the Legislature’s intent to modify our rules.” Brown v. Cox, 2017
UT 3, ¶ 20, 387 P.3d 1040.
¶18 Neither section 403 nor any other section of the Act contains
a reference to rule 19 or rule 24, much less “a clear expression of the
Legislature’s intent to modify” those rules. Id. Because nothing in the
Act purports to modify our rules for joinder and intervention, those
rules govern. Therefore, even if the outsiders had a legal interest that
would be affected by the declaration appellants seek, joinder of or
intervention by the outsiders would be dictated by rule 19 and rule
24, not by section 403. To interpret and understand the operation of
section 403 otherwise would be to intrude on our own rulemaking
authority and would present a serious concern about section 403’s
constitutionality.7
¶19 Because we are able to resolve this case without ruling on
whether section 403 mandates the joinder or intervention of certain
parties, and because the parties did not brief these constitutional
questions, we leave them for another day.
CONCLUSION
¶20 Section 403 provides no impediment to the declaratory
judgment appellants seek here. Because the outsiders have no legal
interest that would be affected by a declaration in this case, they do
_____________________________________________________________
7 This is true at least with respect to the first half of
subsection 403(1), which provides that “all persons shall be made
parties who have or claim any interest which would be affected by
the declaration.” It is less apparent that there is any problem with the
second half of subsection 403(1), which provides that “a declaration
may not prejudice the rights of persons not parties to the
proceeding.” As alluded to above, see supra ¶ 13 n.5, section 403
could be read to eliminate claim and issue preclusion with respect to
declaratory judgments affecting privies. But claim and issue
preclusion are not creatures of our rules of civil procedure and
evidence. Instead, they are creatures of the common law. And it is
well within the legislature’s power to preempt or displace the
common law. See In re Estate of Hannifin, 2013 UT 46, ¶ 10, 311 P.3d
1016.
7
BELL CANYON ACRES v. MCLELLAND
Opinion of the Court
not need to be joined as parties. We reverse and remand to the
district court for a ruling consistent with this opinion.
8