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Wdis, LLC. v. Hi-Country Estates Homeowners Association

Supreme Court of Utah

August 13, 2019

WDIS, LLC, and Dreamworks Property Management, Inc., Appellants,
v.
Hi-Country Estates Homeowners Association, Appellee.

         On Direct Appeal

          Third District, Salt Lake The Honorable Laura Scott No. 160904994

          Troy L. Booher, Freyja R. Johnson, Beth E. Kennedy, Bruce R. Baird, Salt Lake City, for appellants

          Jeffrey L. Silvestrini, Stephen T. Hester, Bradley M. Strassberg, Salt Lake City, for appellee

          Chief Justice Durrant authored the opinion of the Court, in which Associate Chief Justice Lee, Justice Himonas, Justice Pearce, and Justice Petersen joined.

          OPINION

          JUSTICE DURRANT, CHIEF

         Introduction

         ¶1 This case involves a dispute between Hi-Country Estates Homeowners Association (HOA) and a group of landowners (WDIS) within the HOA's boundaries. At the district court level WDIS brought, among other actions, an action to quiet title in its properties against the HOA. Specifically, WDIS sought a judicial declaration that its properties were not encumbered by the HOA's covenants and restrictions. The district court dismissed the action because it determined that it was barred by a statute of limitations. The court also held that the doctrine of res judicata precluded WDIS from challenging certain encumbrances enacted in 1990.

         ¶2 WDIS appeals both determinations. As to the first determination, WDIS sets forth three arguments for why its quiet title claim is not time barred: (1) it qualifies for an "actual possession" exception to statutes of limitations established in Bangerter v. Petty, [1] (2) it qualifies for a "true quiet title" exception established in In re Hoopiiaina Trust, [2] and (3) statutes of limitations do not apply to challenges of void encumbrances.

         ¶3 Although we disagree with WDIS's framing of the quiet title exception, we agree that no statute of limitations applies to WDIS's quiet title claim, because WDIS is able to establish a prima facie case of quiet title without first receiving some other relief from the court. Our decisions in Hoopiiaina and Bangerter rely on the same quiet title exception to statutes of limitations. Because this conclusion renders a determination on WDIS's void encumbrance argument unnecessary, we decline to address it.

         ¶4 As to the res judicata determination, WDIS argues that reversal is warranted because the district court improperly considered evidence outside the pleadings without converting the motion to dismiss into a motion for summary judgment. Because the HOA failed to address WDIS's plausible argument on this issue, we reverse without reaching the merits of WDIS's argument.

         Background

         ¶5 In August of 1970, three men-Charles Lewton, Gerald Bagley, and Harold Glazier-filed "Articles of Incorporation of Hi-Country Estates, Inc." with the Utah Secretary of State.[3] That same day, they also filed a "Certificate of Limited Partnership of Hi-Country Estates, Second," with Hi-Country Estates, Inc. as the limited partnership's general partner. The purpose of both of these entities was to "acquire, develop and sell real and personal properties." At the time of these filings, none of the shareholders owned any real property within the purported boundaries of the HOA.

         ¶6 Three years later, Mr. Lewton, in his individual capacity, filed articles of incorporation for the HOA. Mr. Lewton was identified in the articles of incorporation as the HOA's incorporator. Although Mr. Lewton-together with three other individuals- owned only one, eight-acre parcel of property within the purported boundaries of the HOA, a property description attached to the articles of incorporation included approximately 2, 035 acres. Additionally, at the time the articles of incorporation were filed, none of the Hi-Country Estates entities owned any of the real property included in the attached property description. And none of the actual owners of the property had agreed to be bound by the articles of incorporation, had knowledge of its filing, or had conferred a power of attorney or other authorization upon Mr. Lewton to act on their behalf. So at the time the articles of incorporation were filed, Mr. Lewton did not have authorization from the owners of the remaining 2, 027 acres to include their land in the HOA.[4]

         ¶7 Around that same time, Mr. Lewton also recorded protective covenants for "Hi-Country Estates, Phase II" with the Salt Lake County Recorder's Office. Mr. Lewton was the only one who signed the covenants. A property description attached to the recorded covenants included only 1, 955 acres of real property-or eighty fewer acres than the area described in the attachment of the HOA's articles of incorporation. At the time the covenants were recorded, Mr. Lewton owned only eight acres of real property inside the encumbered area.

         ¶8 In the years following the initial incorporation of the HOA and recording of restrictive covenants, other addenda to the articles of incorporation, bylaws, and covenants were recorded. Following the filing of a new addendum in 2015, WDIS demanded production of documents from the HOA. After reviewing these documents, WDIS discovered many alleged deficiencies in the HOA's articles of incorporation and subsequent addenda, covenants, and bylaws. WDIS claims, for various reasons, that each of these addenda, bylaws, and covenants are invalid, improper, or unenforceable.

         ¶9 In August of 2016, WDIS filed the complaint in this case, alleging seven separate causes of action. The first three causes of action were for a declaratory judgment that the HOA's covenants, articles, and bylaws were void or invalid. The fourth cause of action was for a judicial dissolution of the HOA. The fifth cause of action was to quiet title to WDIS's property in WDIS's favor. And the sixth and seventh causes of action were for forms of injunctive relief.

         ¶10 Shortly after the complaint was filed, the HOA filed a motion to dismiss under rule 12(b)(6) of the Utah Rules of Civil Procedure. It argued that the complaint should be dismissed because all of WDIS's claims-except for certain claims arising after 2012- were barred by statutes of limitations. The HOA also argued that the complaint should be dismissed because WDIS's claims were precluded under the doctrine of res judicata.

         ¶11 WDIS replied to the HOA's motion to dismiss by arguing that there is no statute of limitations for an action (1) challenging a document that was "void ab initio" or (2) seeking to remove a cloud from, or to quiet, the title to real property. At oral argument on the motion, WDIS clarified that the statute of limitations should not apply to its claim, because it was a true quiet title action. Additionally, WDIS argued that the HOA's res judicata argument failed because the parties were not the same and the subject matter of previous litigation was substantially different.

         ¶12 In its March 10, 2017 Order, the district court granted the HOA's motion to dismiss as to all of WDIS's claims that arose before 2012 because it determined that they were barred by a statute of limitations. The court ruled that WDIS's quiet title claim was not a true quiet title action, because it was dependent on a preliminary determination that the HOA's governing documents were invalid or void ab initio.

         ¶13 Additionally, the district court accepted the HOA's res judicata argument, but only as to WDIS's first cause of action as it relates to the 1990 recording of additional restrictive covenants. So absent the district court's statute of limitations ruling, WDIS is not precluded from bringing any claims related to the original articles of incorporation, or any subsequent addendums, covenants (except for the 1990 recording of additional restrictive covenants), or bylaws.

         ¶14 WDIS agreed to dismiss its remaining claims without prejudice so that it could challenge the dismissal of its complaint through this appeal. We have jurisdiction pursuant to Utah Code section 78A-3-102(3)(j).

         Standard of Review

         ¶15 First, we must decide whether the district courted erred in ruling that a statute of limitations applied to WDIS's quiet title claim. A district court's application of a statute of limitations is a question of law we review for correctness.[5]

         ¶16 Additionally, we must decide whether the district court erred in considering material outside of the pleadings to decide a rule 12(b)(6) motion to dismiss. "[T]he propriety of a 12(b)(6) dismissal is a question of law," which we review "under a correctness standard."[6] "In reviewing the trial court's decision, we accept the factual allegations in the complaint as true and interpret those facts and all inferences drawn from them in the light most favorable to the plaintiff as the non-moving party."[7]

         Analysis

         ¶17 WDIS argues that, because quiet title claims are never time barred, the district court erred by ruling that a statute of limitations applied to WDIS's quiet title claim. Alternatively, it argues that the court erred because challenges of void encumbrances are likewise never barred.[8] We hold that WDIS's quiet title action is not barred by a statute of limitations, because WDIS is able to establish a prima facie case of quiet title without receiving any other relief from the district court. Because this determination renders a determination on WDIS's void encumbrance argument unnecessary, we decline to address that argument.

         ¶18 WDIS also argues that the district court erred by considering material outside of the pleadings in deciding, on a rule 12(b)(6) motion to dismiss, that some of WDIS's claims were barred by the doctrine of res judicata. Because the HOA failed to adequately brief the issue, we reverse the district court's res judicata determination.

         ¶19 But before turning to the merits of this case, we must address whether we have appellate jurisdiction.

         I. We Have Appellate Jurisdiction in This Case

         ¶20 After briefing and oral argument were complete, we identified a potential policy concern that could be created by exercising appellate jurisdiction in this case. As we noted above, after the district court issued its order dismissing, with prejudice, all of WDIS's claims to the extent they were based on facts arising before 2012, the parties stipulated to a dismissal without prejudice of what remained of WDIS's claims.[9] Although we are ordinarily free to exercise appellate jurisdiction over an order where there are no other claims pending in the district court, we recognized that the practice of exercising jurisdiction over a case in which some claims had been voluntarily dismissed without prejudice created the possibility that a party could use a voluntary dismissal without prejudice of some claims as a loophole through the requirements of rule 54(b) of the Utah Rules of Civil Procedure.

         ¶21 Under what we refer to as the final judgment rule, an "appeal is improper if it is taken from an order or judgment that is not final."[10] There are, however, a few exceptions to the final judgment rule, including a rule 54(b) certification. A rule 54(b) certification allows a district court to certify an otherwise non-final order as final "if the court expressly determines that there is no just reason for delay."[11] Because a voluntary dismissal without prejudice of some claims does not necessarily foreclose the possibility of resuscitating the dismissed claims after an appeal, a party could use a voluntary dismissal without prejudice of its remaining claims as a mechanism for appealing a district court's otherwise non-final order without obtaining a rule 54(b) certification.[12] In light of this policy concern, we ordered supplemental briefing on whether we have appellate jurisdiction under the final judgment rule. We conclude that we do.

         ¶22 A "final judgment for purposes of appeal is one that resolves all claims, counterclaims, cross-claims, and third-party claims before the court and fully and finally resolves the case."[13] To determine whether a case has been fully and finally resolved below, we apply a "pragmatic test" that "should not be applied as a sterile formality."[14] Under this test, we need not determine whether the factual controversy underlying the legal action "is concluded, but whether the particular [legal] proceeding or action is terminated by the judgment."[15] In other words, if there are no claims pending in a case, the case is final even though there is a possibility, because the parties have not fully resolved the factual controversy underlying the action, that the parties may soon commence a new legal proceeding. So if the action is terminated, "and, in order to proceed farther with regard to the same subject-matter, a new action or proceeding must be commenced, then, as a general rule, the judgment which ends the particular action or proceeding is final for the purposes of an appeal."[16] Under this rule, an order of dismissal, either with or without prejudice, fully and finally resolves the case.

         ¶23 "Utah has adopted the majority rule that an order of dismissal is a final adjudication, and thereafter, a plaintiff may not file an amended complaint . . . ."[17] This is true "even though the dismissal was without prejudice."[18] So when all the claims in a case have been dismissed the case is ended "as far as the district court [is] concerned," and, absent a reversal and remand by the appellate court, the plaintiff can only reassert claims that were dismissed without prejudice by commencing a new action.[19] This is an important aspect of our pragmatic approach to the final judgment rule. In other words, under our pragmatic approach to the final judgment rule, we treat dismissals, either with or without prejudice, as final orders that have the effect of fully terminating the action and rendering an appealed order a final order.[20] Thus, under this approach, an appealed order is a final order so long as there are no claims pending below.[21]

         ¶24 For example, in America West Bank, we held that an order dismissing certain claims "without prejudice to filing another suit does not make the [case] unappealable."[22] In that case, the district court dismissed a number of claims with prejudice and a number of claims without prejudice.[23] On appeal, the defendant argued that we did not have appellate jurisdiction because the dismissal without prejudice rendered the order of dismissal a non-final order.[24] But we disagreed. We stated that under the rule adopted in Utah, "an order of dismissal is a final adjudication . . . even if such a dismissal is without prejudice."[25] And we explained that under our "pragmatic" "test for finality, "[26] the question was whether "the effect of the ruling" was to finally resolve the issues.[27] Citing the rule that "an order of dismissal is a final adjudication . . . even if such a dismissal is without prejudice, "[28] and noting that "there [were] no counterclaims, cross-claims, or third-party claims"[29] remaining below, the court held that the dismissal without prejudice had "ended [the] suit as far as the district court was concerned."[30] For this reason we held that the dismissal without prejudice had the effect of "fully terminat[ing] the case."[31] Thus our decision in America West Bank confirms that, under our pragmatic approach to the final judgment rule, an appealed order is a final order so long as there are no claims pending below.

         ¶25 We note that the HOA disagrees with this interpretation of the final judgment rule. According to the HOA, our final judgment rule cases should be read as foreclosing appellate jurisdiction here because a contrary reading would allow parties to circumvent the requirements of rule 54(b). But, as WDIS points out in its brief, this proposed reading of our case law would be inconsistent with the holdings in four of our previous cases.[32] In each of the four cases WDIS cites, we held that we had appellate jurisdiction over the case after carefully acknowledging that the case had been perfected for appeal by way of a voluntary dismissal without prejudice.

         ¶26 For example, in Anderson v. Provo City Corp., [33] we explicitly held that a voluntary dismissal without prejudice of all remaining claims in a case transforms a previously non-final order into a final order. In that case, a group of homeowners filed a lawsuit against Provo City.[34] In their complaint they brought a facial constitutional challenge seeking to overturn a zoning ordinance and a number of as-applied constitutional challenges seeking to obtain compensation for harms inflicted by the ordinance.[35] On summary judgment the district court dismissed their facial claim.[36] After this dismissal, and "[p]ursuant to the stipulation of the parties," the district court dismissed the homeowners' remaining, as-applied claims without prejudice and "stayed the effective date of [the ordinance at issue] pending a decision on appeal."[37] Although it was clear that the homeowners intended to later refile their as-applied challenges if they lost their appeal, [38] on appeal, we stated that the voluntary dismissal without prejudice of the homeowners' remaining claims rendered the court's "summary judgment a final order in the case."[39]We then explicitly held that we had jurisdiction to hear the appeal.[40]

         ¶27 Thus Anderson established that a voluntary dismissal of all of the remaining claims in a case renders a previously non-final order a final, appealable order. In fact, because the district court granted a stay pending appeal in connection with the dismissal, Anderson established that a voluntary dismissal without prejudice renders previous orders final even where the remaining claims were voluntarily dismissed for the express purpose of expediting an appeal.

         ¶28 The holding in Anderson is consistent with our jurisdictional holdings in the other three cases WDIS cites.[41] In each of those cases we asserted appellate jurisdiction after noting that some claims had been voluntarily dismissed without prejudice. By asserting jurisdiction while being fully aware of the procedural posture in those cases-and of our duty to not decide cases in which we do not have jurisdiction-we clearly held that the procedural posture in those cases was not jurisdictionally defective.

         ¶29 So even were we to agree with the HOA's proposed reading of our other final judgment rule cases, we could not adopt that proposed approach without overturning the four cases WDIS cites. But, under the doctrine of stare decisis, we cannot overturn those cases unless the stare decisis factors we identified in Eldridge v. Johndrow[42] weigh in favor of doing so. Because those factors do not weigh in favor of overturning the four cases WDIS cites, we are bound by them.

         ¶30 Accordingly, we hold that, under our pragmatic test, an appealed order is a final order so long as there are no claims pending below. And we clarify that this is so even where some claims in the case had previously been dismissed without prejudice. After applying this pragmatic test to the facts of this case, we conclude that the order appealed is a final, appealable order.

         ¶31 Here, the district court dismissed all of WDIS's claims with prejudice to the extent they were based on facts arising before 2012. Because the "heart of [WDIS's] Complaint" was to quiet title to land improperly encumbered with an HOA in the 1970s, WDIS argues that the court's dismissal of WDIS's pre-2012 claims "effectively adjudicated WDIS's main argument as to the post-2012 [claims]" as well. In other words, even though WDIS's claims identified some "additional problems" in a few "post-2012 documents," all of WDIS's claims were based primarily on "the underlying documents signed and recorded without authorization in the 1970s." The district court's treatment of what remained of WDIS's claims is consistent with this characterization.

         ¶32 Recognizing that WDIS's original complaint was unusable, the court ordered WDIS either to draft a new complaint, "to the extent that there [were] other grounds" for its claims, or to voluntarily dismiss its remaining claims without prejudice so that it could pursue an appeal. WDIS chose the second option, and the court dismissed what remained of WDIS's claims. After this dismissal, no claims remained pending in the district court. Under our pragmatic approach to the final judgment rule, the district court's dismissal of WDIS's pre-2012 claims was rendered a final, appealable order. Accordingly, we hold that we have appellate jurisdiction in this case.

         ¶33 Nevertheless, because our current approach to the final judgment rule creates tension with a policy underlying rule 54(b), [43]we refer the issue to our rules committee for a recommendation regarding whether an amendment to rule 54 is needed. To be clear, by referring this issue to the committee, we are not suggesting that our current approach is wrong, nor are we suggesting that we should adopt an approach used in other jurisdictions. Rather, by referring this issue to the rules committee we are merely expressing a willingness to explore whether a preferable approach exists. Federal case law, for example, offers a variety of possible approaches to the final judgment rule. Some federal courts have adopted an approach consistent with our own.[44] Other federal courts allow the appeal to move forward upon a stipulation of the parties to treat the claims at issue as having been dismissed with prejudice unless the appellant prevails on appeal.[45] And still other courts allow the appeal to proceed after deeming the voluntarily dismissed claims to have been dismissed with prejudice[46] or after remanding to the district court for a dismissal with prejudice.[47] Because the federal approach to voluntary dismissals without prejudice is far from uniform, if the rules committee decides to recommend an amendment to rule 54 based on a federal approach (or on an approach from another state), there are a variety of ways in which it could do so. Accordingly, the committee should use all of the tools and information at its disposal to thoroughly study this issue before making any recommendations.

         II. WDIS's Quiet Title Action is Not Barred by a Statute of Limitations

         ¶34 We now turn to the merits of this appeal. WDIS argues that its quiet title action is not barred by a statute of limitations, because it is a "true quiet title action." Under Utah law, a true quiet title action is never barred by the statute of limitations.[48] According to WDIS, there are two scenarios in which a quiet title action may be considered a "true quiet title action." First, WDIS argues that under our decision in Bangerter v. Petty, [49] it is a true quiet title action if it is brought by an individual or entity in actual possession of the property under a claim of ownership. Second, it argues that under our decision in In re Hoopiiaina Trust, [50] it is a true quiet title action if the party merely requests that the court adjudicate the validity of an opponent's adverse or hostile claim to property to which the party already holds title. WDIS argues that its quiet title action qualifies as a true quiet title action under either scenario. Although we disagree that Bangerter and Hoopiiaina establish separate true quiet title exceptions, we agree that WDIS's quiet title claim qualifies as a true quiet title action.

         ¶35 In Utah it is well-established that quiet title actions are not barred by a statute of limitations. One rationale for this rule is that in "many instances one in possession would not know of dormant adverse claims of persons not in possession."[51] And "even if . . . the party in possession knows of . . . a potential [adverse] claimant, there is no reason to put him to the expense and inconvenience of litigation until such a claim is pressed against him."[52] Another rationale, articulated in other jurisdictions, is that because "the injury from a cloud on the title to real estate is continuing," the "cause of action for [a] removal [of a cloud on title] is likewise continuing, and never barred while the cloud exists."[53]

         ¶36 Although courts in Utah have been applying the statute of limitations exception to quiet title actions for over a century, it was not until our decision in Hoopiiaina that we provided much needed clarification for how and when the exception should be applied.

         ¶37 In Hoopiiaina we recognized that although generally "all actions, whether legal or equitable, are subject to a statute of limitations in Utah[, ] . . . suits brought to quiet the title to real property have always been an exception to this rule."[54] But we noted that courts "must proceed cautiously when applying this rule" because parties could attempt "to avoid the statute of limitations on other claims by simply disguising them as claims for quiet title relief."[55] For this reason, we clarified what constitutes a "true quiet title action" as opposed to an action that was disguised as a quiet title action but was actually seeking other relief.[56] We stated that a "true quiet title action is a suit brought 'to quiet an existing title against an adverse or hostile claim of another,' and 'the effect of a decree quieting title is not to vest title but rather is to perfect an existing title as against other claimants.'"[57] "Thus, the question becomes whether a claim is a true quiet title action or whether the claimant really seeks other relief . . . ."[58]

         ¶38 Determining whether a party truly seeks other relief when it brings a quiet title claim can be difficult. In Hoopiiaina we attempted to provide guidance for how courts should make this determination. We said that "[w]hen a party asserts a quiet title claim in which that party merely requests that the court adjudicate the validity of an opponent's adverse or hostile claim to property to which the party already holds title," the party is bringing a true quiet title claim.[59] So "if it is not necessary that the court grant other relief in favor of the party, such as cancelling a deed on the basis of fraud, in order to rule on the quiet title claim, then the statute of limitations cannot operate as a bar to the party's . . . claim."[60] In other words, "[i]f the party's claim for quiet title relief can be granted only if the party succeeds on another claim, then the statute of limitations applicable to the other claim will also apply to the quiet title claim."[61]

         ¶39 Three years after Hoopiiaina, in Bangerter v. Petty, [62] we once again addressed the question of whether a statute of limitations would bar a quiet title action. In that case Ms. Bangerter, the plaintiff, challenged a sheriff's deed on her home on the ground that the deed was void. The defendant argued "that Bangerter's claim [was] not a true quiet title action [under the test in Hoopiiaina, ] because Bangerter [had to] first succeed on her claim to void the sheriff's deed before she [could] have title quieted in her."[63] The defendant therefore asserted that the statute of limitations applicable to her challenge of the sheriff's deed barred the quiet title action.[64]

         ¶40 Even though we did not explain the reasoning for our decision, we held that the test in Hoopiiaina did "not apply to bar an individual or entity in actual possession of property under a claim of ownership from bringing an action to quiet title."[65] Because Ms. Bangerter had remained in actual possession of her home, we held that her quiet title action was not barred by the statute of limitations.[66]

         ¶41 Subsequent to our decisions in Hoopiiaina and Bangerter, lower courts have treated the two opinions as if they created two separate quiet title exceptions. And in so doing, they have struggled to apply the exceptions consistently. But Hoopiiaina and Bangerter did not create two separate exceptions. Rather, both cases attempted to give effect to the same, long-standing rule that a genuine quiet title claim is not barred by a statute of limitations. Given the confusion lingering in the wake of Hoopiiaina and Bangerter, [67] we now clarify the quiet title exception by reexamining our case law in light of the requirements for a successful quiet title claim. In doing so, we hold that a plaintiff's quiet title claim is not barred by a statute of limitations if the plaintiff is able to establish a prima facie quiet title case without first receiving some other relief from the court.

         A. Requirements of a meritorious quiet title claim

         ¶42 A quiet title claim, "as its name connotes, is one to quiet an [e]xisting title against an adverse or hostile claim of another."[68] It is not an action "brought to [e]stablish title."[69] Consequently, a quiet title claim fails if the plaintiff cannot establish valid title[70] or some other valid and existing property right.[71] Accordingly, when courts encounter a claim to quiet title, they must analyze the claim in two steps. First they must determine whether the plaintiff has established a prima facie quiet title case. A prima facie quiet title case has two elements: (1) "title, "[72] or other valid interest, to the property at issue and (2) a claim of an adverse estate or interest in the property.[73]

         ¶43 The second step of a quiet title claim analysis-after the plaintiff has established a prima facie quiet title case-requires the court to determine whether the plaintiff's property interest is superior to the interests of the other named adverse claimants.[74] This second step almost always requires the court to make a legal determination regarding the validity of the adverse claimant's interest, such as a determination that the adverse interest is void, voidable, or inferior to the plaintiff's interest.[75]

         ¶44 With this context in mind, our statement in Hoopiiaina-that a "party's claim for quiet title relief" cannot depend upon the success of "another claim"[76]-cannot be interpreted as requiring the success of the plaintiff's quiet title claim, as a whole, to be independent of the success of another claim. This is so because almost every quiet title claim depends upon a showing that the adverse parties' claims to the property are invalid or inferior. So when the standard set out in Hoopiiaina is considered in light of the requirements of a quiet title claim, it is clear that statutes of limitations do not apply to quiet title claims if the plaintiff is able to establish its prima facie quiet title case without first receiving some other affirmative relief from the court. This rule is consistent with our case law.

         B. Applying the statute of limitations to quiet title actions only if the plaintiff's prima facie case depends on receiving other relief is consistent with our prior case law

         ¶45 An examination of our case law reveals that statutes of limitations do not bar quiet title claims if the plaintiff establishes a prima facie quiet title case without first receiving some other affirmative relief from the court. But where the plaintiff's prima facie case depends on first receiving some other relief from the court, the statute of limitations applicable to that other claim will bar the success of the quiet title claim.

         ¶46 In one of our earliest cases discussing the quiet title exception, Branting v. Salt Lake City, [77] we considered the applicability of the statute of limitations to a plaintiff's quiet title action. In that case, Salt Lake City had passed several ordinances for the purpose of constructing a sewer and had assessed and levied a special tax on the property abutting the sewer-including the plaintiff's-to cover construction costs.[78] The plaintiff filed suit against the city, arguing that the city had exceeded its authority and requesting that the court declare the city's actions void and of no effect.[79]

         ¶47 As a defense, the city pled that the claim was barred by a four-year statute of limitations.[80] The plaintiff responded that the statute did not apply, because his suit was merely "an action to remove a cloud from the title, or [was] one to quiet the title to real property."[81] Although the court acknowledged the rule that "an action to remove a cloud from, or one to quiet the title to, real property[] is never barred," it noted that the city had "at no time or place asserted title to [the plaintiff's] property. Nor did it question in any way the soundness of his title."[82] And the court noted that the plaintiff had "attempted to make every person who was affected by [the tax assessment] a party to the action."[83] Because "actions to remove clouds from or to quiet title are not generally brought for and on behalf of whole communities," the court concluded that the plaintiff had not actually brought a quiet title action, and so the quiet title exception did not apply.[84] So Branting recognized the validity of the quiet title exception to statutes of limitations, but limited its application to cases where a plaintiff brings a genuine quiet title claim.

         ¶48 In Davidsen v. Salt Lake City,[85] decided twenty-three years after Branting, we again addressed the question of when the statute of limitations applies to quiet title actions. In that case the plaintiff had agreed to deed certain real property to the city. When he sent the deed to an agent of the city, the plaintiff included a letter stating that the deed was conditioned on the city making certain improvements.[86] But the agent sent the deed to the city commission without the letter.[87] The city "accepted the deed and had it recorded."[88] The plaintiff subsequently demanded that the conditions specified in the letter be met and brought suit when the city refused.[89] In his suit, the plaintiff asked to have the deed set aside on the ground of fraud, to quiet title, and for general relief.[90] But the plaintiff brought his suit outside the statute of limitations period for fraud claims.[91] And because the plaintiff could not establish a prima facie quiet title case without first establishing "his right to have the deed cancelled" through his fraud claim, we held that he was "not entitled to have his title quieted."[92] ...


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