Argus Real Estate v. E-470 PUB. HIGH. AUTH.

• Citation: 109 P.3d 604
• Decision Date: 28 March 2005
• Docket Number: No. 04SC100.,04SC100.
• Parties: Petitioner: ARGUS REAL ESTATE, INC., v. Respondent: E-470 PUBLIC HIGHWAY AUTHORITY.
• Court: Colorado Supreme Court

109 P.3d 604

Petitioner: ARGUS REAL ESTATE, INC., v. Respondent: E-470 PUBLIC HIGHWAY AUTHORITY.

No. 04SC100.

Supreme Court of Colorado.

March 28, 2005.

Montgomery Little & McGrew, P.C., Frederick B. Skillern, Patrick T. O'Rourke, Greenwood Village, for Petitioner.

Icenogle, Norton, Smith & Blieszner, P.C., Edward J. Blieszner, Carolyn R. Steffl, Denver, for Respondent.

MARTINEZ, Justice.

Petitioner, Argus Real Estate, Inc. (Argus), appeals from a court of appeals decision affirming the district court's entry of summary judgment in favor of respondent, E-470 Public Highway Authority (the Authority). See Argus Real Estate, Inc. v. E-470 Public Highway Auth., 97 P.3d 215 (Colo.App.2003)

. This case was filed in the district court after the entry of final judgment in a previous quiet title action. The district court in this case found, and the court of appeals agreed, that Argus' claim for statutory reformation pursuant to section 15-11-1106(2), C.R.S. (2004), was barred by the doctrine of res judicata because the rights associated with the property at issue and the agreement for which Argus seeks reformation were completely adjudicated in the previous quiet title action.

We granted certiorari on the issue of whether the court of appeals erred in upholding the district court's entry of summary judgment based on its conclusion that res judicata precludes the filing of a separate action requesting reformation of a property agreement under section 15-11-1106(2) when the claim for reformation could have been brought in the first action and was not. We hold that in absence of any clear intent to abrogate the common law doctrine of res judicata, section 15-11-1106(2) does not provide an exception to res judicata such that Argus may raise the statutory reformation claim in a subsequent judicial proceeding when the claim could have been raised in the previous action. Accordingly, we affirm the decision of the court of appeals.

I. Facts and Procedure

In 1990, landowner Britton Ranch, Ltd. (Britton) entered into an agreement (the agreement) with the Authority whereby Britton would donate a parcel of real property (the parcel) to the Authority for the purpose of constructing the E-470 highway. The agreement was signed on behalf of Britton by a representative of Britton's general partner Argus Real Estate Partners, Inc. (Partners). Pursuant to section 5.3 of the agreement, if the Authority no longer needed the parcel, or any portion of it, the Authority would offer the parcel, or the unneeded portion, back to Britton or its assigns by quitclaim deed for no charge.¹

Four months after entering into the agreement, Britton executed a "gift deed" granting the parcel to the Authority. The gift deed, however, did not have any provision mirroring that of section 5.3 in the agreement. After granting the parcel to the Authority, Britton then assigned its interest in the agreement to Argus.

The Authority subsequently constructed the highway, but did not use the parcel. The highway was instead built approximately one-half mile away from the parcel.

In 2000, the Authority initiated a civil action against Britton and Partners (hereafter collectively referred to as "Britton"²) asserting two claims (Argus I). First, the Authority sought declaratory judgment that section 5.3 of the agreement with Britton was extinguished or rendered ineffective because the gift deed was controlling and had no similar language. Second, the Authority asserted a quiet title claim requesting that title to the parcel be quieted in the Authority.

Britton answered on behalf of itself and its successors in interest and also counterclaimed for breach of contract, specific performance, and declaratory judgment. In addition, Britton counterclaimed seeking quiet title in Britton or its successors in interest. In support of the counterclaims, Britton asserted that the agreement was binding and, because the Authority did not use the parcel for the construction of the highway, the Authority "no longer needed" the parcel and was obligated under the agreement to convey it back to Britton or Britton's successors in interest by quitclaim deed.

On the Authority's motion for summary judgment, the district court found that any interest in the parcel created by section 5.3 was a nonvested interest and was subject to the rule against perpetuities. The court concluded that the interest was invalid because under the language of the agreement there was no means to determine when, if ever, the Authority would "no longer [have] a need" for the parcel and thus no way to determine when, if ever, Britton's interest would vest. As such, the district court held the nonvested interest was void under the rule against perpetuities and the Authority was entitled to judgment as a matter of law. On this basis, the district court quieted title to the parcel in the Authority.

Britton appealed the district court's entry of summary judgment and the court of appeals affirmed.³ See E-470 Public Highway Authority v. Argus Real Estate Partners, Inc., 70 P.3d 481 (Colo.App.2002)

.

In June 2002, Argus, as the assignee of Britton's interest in the agreement with the Authority, filed this action (Argus II) against the Authority asserting promissory estoppel and unjust enrichment claims. Argus also asserted claims seeking common law reformation of the agreement and statutory reformation pursuant to section 15-11-1106(2) of the Colorado Statutory Rule Against Perpetuities Act (the Act).

The Authority immediately moved to dismiss the claims as barred by the doctrines of res judicata and collateral estoppel. Argus contended the claims were not barred, arguing, inter alia, that section 15-11-1106(2) provides an exception to the doctrine of res judicata. Specifically, Argus argued that section 15-11-1106(2) authorizes a court to reform an agreement to effect the intent of the parties where a court has made a prior judicial determination that an interest violates Colorado's common law rule against perpetuities. Argus contended that the General Assembly intended section 15-11-1106(2) to apply to a second court proceeding, therefore abrogating any common law principles of res judicata. Accordingly, Argus argued that because the court in Argus I determined that the nonvested interest created by section 5.3 of the agreement violated the common law rule against perpetuities, the court in Argus II was authorized by section 15-11-1106(2) to reform the agreement.

The district court rejected Argus' argument that section 15-11-1106(2) provides an exception and held that the doctrine of res judicata was applicable to the claims Argus asserted. The court noted that res judicata bars subsequent claims where there exists a final judgment in the first case and identity of subject matter, claims, and parties between the two cases. The court determined that each of these factors were present: there was a final judgment in the first case; this case involved the same parcel of land; the claims in this case involve the same assertion of legal right to the parcel as the first case; and Argus was in privity of estate with Britton and therefore Argus had an identity of parties in both lawsuits. Thus, the district court concluded that Argus was bound by the judgment in Argus I and its claims were barred as a matter of law by res judicata. Consequently, the district court treated the Authority's motion to dismiss as a motion for summary judgment and entered summary judgment in favor of the Authority.

Argus appealed and the court of appeals affirmed the district court's entry of summary judgment. See Argus Real Estate, Inc. v. E-470 Public Highway Auth., 97 P.3d 215 (Colo.App.2003)

. The court of appeals refused to read section 15-11-1106(2) as an exception to the doctrine of res judicata. Id. at 219. The court found that the language of section 15-11-1106(2) does not identify when reformation claims should be raised and therefore an interested party could raise the claim in the same proceeding where it is determined that the rule against perpetuities was violated. Id. Because there is a "strong public policy favoring the finality of litigation and the security and marketability of titles, ... and the ability of a claimant to plead alternative claims for relief," the court found no compelling reason to read XX-XX-XXXX(2) as an exception to the finality of the quiet title determination made in Argus I. Id. The court of appeals concluded that Argus' claims were barred by res judicata and upheld the district court's entry of summary judgment. Id.

We granted certiorari.

II. Analysis

As an initial matter, we clarify the terminology used in our analysis. This court uses the terms "claim preclusion" and "issue preclusion" rather than "res judicata" and "collateral estoppel." See Farmers High Line Canal and Reservoir Co. v. City of Golden, 975 P.2d 189, 196 n. 11 (Colo.1999)

. In prior opinions, we have used the phrases interchangeably, however, as noted by the United States Supreme Court in Migra v. Warren City Sch. Dist. Bd. of Educ., 465 U.S. 75, 77 n. 1, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984), use of the phrases "res judicata" and "collateral estoppel" can lead to confusion because "res judicata" is commonly used as an overarching label for both claim and issue preclusion. Id. Although the parties in their briefs and both courts below discuss the preclusive effect of Argus I as "res judicata," we clarify the issue as one clearly giving rise to "claim preclusion."

We begin our analysis with a discussion of common law claim preclusion and the finality of quiet title actions to explain that Argus' statutory reformation claim is barred absent a statutory exception. Next, we discuss section 15-11-1106(2) and consider whether the General Assembly intended to abrogate common law claim preclusion. We conclude that the General Assembly lacked the clear intent necessary to abrogate the common law doctrine and hold that section...