Lewis v. US Bank, 463 P.3d 694

Background

Dispute over ownership of property after prior owner defaulted on a 2008 promissory note, filed bankruptcy, and abandoned the property. A notice of default issued in 2009 was rescinded in April 2014 and a second notice of default issued the same day.
Brian K. Lewis moved into the property in 2014 with the prior owner’s permission and purchased it by warranty deed in early 2015; he made substantial improvements thereafter.
In 2016 Lewis received notice the mortgage loan had been sold to LSF9; U.S. Bank later became the successor trustee for LSF9.
Lewis sued U.S. Bank in 2018 to quiet title and for unjust enrichment. U.S. Bank moved to dismiss under Utah R. Civ. P. 12(b)(6), asserting res judicata based on a prior quiet-title suit Lewis filed that had been removed to federal court and involuntarily dismissed.
U.S. Bank attached multiple documents to its motion (deed of trust, notices of default/rescission, assignments, warranty deed, trustee substitution, loan-sale notice, and Lewis’s earlier filings) but did not include the prior federal complaint; the district court granted the 12(b)(6) dismissal on res judicata grounds.
On appeal, the Utah Court of Appeals reversed and remanded, holding the district court erred by deciding res judicata without excluding the extra-pleading materials or converting the motion to one for summary judgment because the res judicata determination required examining materials outside the complaint.

Issues

Issue	Lewis's Argument	U.S. Bank's Argument	Held
Whether the district court could resolve res judicata on a 12(b)(6) motion without conversion to summary judgment	The court erred; the motion relied on materials outside the pleadings and thus must be converted under Rule 12(b)(6)/Rule 56	The prior federal dismissal bars Lewis’s claims; the record attached to the motion supplies grounds for dismissal	Reversed: dismissal was premature—court relied on outside materials and should have converted to summary judgment or excluded them
Whether privity/same parties element of claim preclusion was established	Lewis: the complaint does not reference the prior suit; privity cannot be established from the complaint alone	U.S. Bank: it is trustee for LSF9 and the prior suit named LSF9, so parties/privies are the same	Held: U.S. Bank could not establish privity from the face of the complaint without relying on outside materials; premature on 12(b)(6)
Whether Lewis’s claims could/should have been raised in the prior suit (same operative facts)	Lewis: prior complaint is not in the record, so court cannot compare operative facts	U.S. Bank: the claims derive from the same property/loan events and thus were or could have been raised earlier	Held: Determination requires comparing the two complaints; absent the prior complaint or judicial notice, dismissal on that basis was improper at 12(b)(6) stage
Whether dismissal could be justified without considering outside documents	Lewis: dismissal cannot be justified without those documents; conversion required	U.S. Bank: attached records demonstrate res judicata applies and support dismissal	Held: Dismissal cannot be justified without outside materials; conversion to summary judgment required and parties must be given opportunity to present evidence

Key Cases Cited

Starship Enters. of Atlanta, Inc. v. Coweta County, 708 F.3d 1243 (11th Cir. 2013) (res judicata defense may be raised on a 12(b)(6) motion only when apparent on the face of the complaint)
Tuttle v. Olds, 155 P.3d 893 (Utah Ct. App. 2007) (dismissal without excluding outside documents or converting to summary judgment is reversible error unless dismissal can be justified without those documents)
BMBT, LLC v. Miller, 322 P.3d 1172 (Utah Ct. App. 2014) (when a 12(b)(6) motion is converted, parties must be given reasonable opportunity to present evidence; courts may take judicial notice of public records)
Van Leeuwen v. Bank of Am. NA, 387 P.3d 521 (Utah Ct. App. 2016) (elements and analysis for claim preclusion require comparing operative facts of the two complaints)
Macris & Assocs., Inc. v. Neways, Inc., 16 P.3d 1214 (Utah 2000) (res judicata comprises claim preclusion and issue preclusion)
State v. Johnson, 416 P.3d 443 (Utah 2017) (appellate courts have discretion to consider unpreserved issues)
O'Connor v. Burningham, 165 P.3d 1214 (Utah 2007) (appellate courts are not obligated to review alternative grounds for affirmance)