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Pioneer Home Owners Association v. Taxhawk Inc.

Court of Appeals of Utah

December 27, 2019

Pioneer Home Owners Association, Appellant,
v.
TaxHawk Inc and Vandelay Properties LLC, Appellees.

          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.

          OPINION

          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 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 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.

         ¶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.

         ¶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 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 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, ...


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