ARMANDO PIERUCCI, Plаintiff and Appellant, v. MARCHETA PIERUCCI Defendant and Appellee.
No. 20130379-CA
THE UTAH COURT OF APPEALS
Filed July 10, 2014
2014 UT App 163
Seventh District Court, Price Department; The Honorable Douglas B. Thomas; No. 120700041
Don M. Torgerson and Mandie J. Torgerson, Attorneys for Appellee
JUDGE STEPHEN L. ROTH authored this Opinion, in which JUDGES GREGORY K. ORME and J. FREDERIC VOROS JR. concurred.
ROTH, Judge:
¶1 The district court dismissed Armando Pierucci‘s complaint, concluding that his claims were barred by res judicata and the statute of limitations and that he had not demonstrated that he had standing as a real party in interest to assert them. Armando appeals the dismissal, and we affirm on the ground that he has not demonstrated that he is a real party in interest. Our decision to affirm, however, does not preclude Armando from seeking any remedy suggested by rule 17 of the Utah Rules of Civil Procedure to reinstate the proceedings.
¶2 In 1949, two brothers, Anselmo Pierucci and Victor Pierucci, each inherited an undivided one-half interest in the mineral rights to property in Carbon County.1 When Anselmo died in 1984, he left a will transferring his one-half interest to Armando, who was one of Victor‘s sons. A 1988 quitclaim deed recorded in Carbon County indicates that Victor transferred his one-half interest to his daughter-in-law, Marcheta Pierucci.2 After Victor died, Marcheta claimed an undivided one-half interest in the mineral rights.
¶3 Armando originally sued Marcheta in 2010, alleging breach of contract and other equitable claims based on the 1988 quitclaim deed transferring Victor‘s mineral rights interest to Marcheta. In that case, Armando sought to invalidate that deed аnd have title to the mineral interest devolve to him. Near the end of the discovery period, Armando engaged a handwriting expert, who concluded that the deed was “probably not” executed by Victor. Based on the expert‘s report, Armando moved to amend the complaint to add a claim of fraud. The district court denied his motion on the basis that “the new claim is significantly different from those claims previously pleaded.” The court disposed of Armando‘s other causes of action by motion. Armando did not appeal from any of the rulings in the 2010 litigation, including the denial of the motion to amend.
ISSUES AND STANDARD OF REVIEW
¶5 Armando challenges the three bases for the district court‘s decision to dismiss his 2012 complaint. He asserts that his claim was not barred by res judicata because, as the district court
¶6 “The propriety of a trial court‘s decision to grant . . . a motion to dismiss under
I. Res Judicata
¶7 The district court dismissed Armando‘s claim on the basis that it was barred by the claim preclusion branch of res judicata. “[C]laim preclusion corresponds to causes of action and bars a party from prosecuting in a subsequent action a claim that has been fully litigated previously.” State v. Sommerville, 2013 UT App 40, ¶ 30, 297 P.3d 665 (alteration in original) (citations and internal quotation marks omitted). A claim is precluded if “the parties or their privies” have been involved in previous litigation, “the claim that is alleged to be barred [was] presented in the first suit or . . . could and should have been raised in the first action,” and “the first suit . . . resulted in a final judgment on the merits.” Gillmor, 2012 UT 38, ¶ 10 (citation and internal quotation marks omitted). “The second prong is often the most contested element,” id., and that is the case here, as Armando readily concedes that both cases involved the same parties and that the first action was resolved on the merits. Armando disputes, however, that his forgery claim could have or should have been raised in the 2010 complaint. First, he argues, the claim arises from a different set of facts and evidence of a different character than the breach of contract and equitable claims he asserted in the first suit. Second, Armando contends that he could not have brought the claim in the first action because the district court expressly prohibited him from doing so by denying his motion to amend on the basis that “the new claim is significantly different from those claims previously pleaded.”
¶8 In Gillmor v. Family Link, LLC, 2012 UT 38, 284 P.3d 622, our supreme court adopted the transactional test for determining if a claim is precluded. Id. ¶¶ 12–13. “Under the transactional test, ‘[c]laims or causes of action are the same as those brought or that could have been brought in the first action if they arise from the same operative facts, or in other words from the same transaction.‘” Id. ¶ 14 (alteration in original) (citation omitted).
¶9 Applying these factors, the Gillmor court concluded that Gillmor‘s causes of action aimed at establishing a public right of way (the second suit) were not precluded by her earlier lawsuit that asserted a private easement right over the same property (the first suit). Id. ¶¶ 17–22. In particular, the court noted that Gillmor‘s second suit involved facts relating to the usage of the road by members of the public dating back to the 1800s, whereas the first suit only concerned the Gillmors’ own use since they acquired the property forty years before. Id. ¶¶ 17–18. Thus, the causes of action did not arise out of a common nucleus of operative facts. Id. ¶ 22. The supreme court also observed that the claims for relief in the second suit focused on public rights and public use, rather than private rights and private use, making them “legally [as well as] factually distinct from the claims advanced” in the first suit. Id. ¶ 19. Therefore, the prior private easement claim and the current highway-by-public use and public condemnation claims would not make a convenient trial unit because they did not involve a “significant overlap between the evidence necessary to establish the claims.” Id. ¶¶ 19, 22. Finally, the court explained that although both suits involved Gillmor‘s access to the road, each suit sought a separate remedy—private access in the first suit versus public access in the second suit—and the parties reasonably would expect that an action to provide broader access to the public would be separate from litigation intended to resolve the rights to use of the road as between two private parties. Id. ¶¶ 20–21. Therefore, the supreme court concluded, the causes of action in the second suit did “not arise from the same transaction” as the first suit. Id. ¶ 23.
¶11 In addition, the claims are legally distinct. To establish a breach of contract claim, one must show the existence of a contract between the plaintiff and defendant, performance by the plaintiff, non-performance by the defendant, and damages to the plaintiff. Bair v. Axiom Design, LLC, 2001 UT 20, ¶ 14, 20 P.3d 388. A fraud claim, on the other hand, requires the plaintiff to demonstrate
(1) that a representation was made (2) concerning a presently existing material fact (3) which was false and (4) which the representor either (a) knew to be false or (b) made recklessly, knowing that there was insufficient knowledge upon which to base such a representation, (5) for the purpose of inducing the other party to act upon it and (6) that the other party, acting reasonably and in ignorance of its falsity, (7) did in fact rely upon it (8) and was thereby induced to act (9) to that party‘s injury and damage.
Armed Forces Ins. Exch. v. Harrison, 2003 UT 14, ¶ 16, 70 P.3d 35. Thus, “there is no significant overlap between the evidence necessary to establish the claims” and the two claims do not form a convenient trial unit. See Gillmor, 2012 UT 38, ¶ 22.
¶12 Armando‘s fraud claim is therefore not precluded by res judicata. See id. (explaining that all three requirements must be present to preclude a claim).
II. Statute of Limitations
¶13 The district court also concluded that Armando‘s claim should be dismissed because the seven-year statute of limitations applicable to claims based upon title to real property had run. Armando contends that this was error because his claim is for fraud, and the statute of limitations period for fraud does not begin to run until after the plaintiff has discovered the fraud, a discovery he alleges he did not make until August 2011. Marcheta urges us to uphold the district court‘s conclusion that the statute of limitations period had expired. Alternatively, shе asserts that the three-year fraud statute of limitations expired by 1991 because Victor necessarily discovered or should have discovered any fraud in the 1988 deed upon its recording because a recorded deed imparts constructive notice to all persons of its contents.
A. Armando‘s Allegation that He Did Not Disсover the Forgery Until August 2011 Is Sufficient To Withstand a Motion to Dismiss.
¶15 Generally,
[a]n action . . . based upon title to the [real] property . . . shall be brought: (1) not later than seven years after the act on which it is based; and (2) by the ancestor, predecessor, or grantor of the person who owned or possessed the property for seven years before the act in Subsection (1) took place.
¶16 In the May 2012 complaint, Armando alleged that he did not discover that the 1988 deed was forged until August 2011. Although Armando does not expand upon that general statement, we must not only accept it as true, see Russell Packard, 2005 UT 14, ¶ 3, we must also conclude that it is “sufficient to get
¶17 A recorded deed generally provides notice of its contents to all the world: “Each document executed, acknowledged, and certified, in the manner prescribed by this title, . . . from the time of recording with the appropriate county recorder, impart[s] notice to all persons of their contents.”
¶18 Constructive notice is “both (1) record notice which results from a record or which is imputed by the recording statutes, and (2) inquiry notice which is presumed because of the fact that a person has knowledge of certain facts which should impart to him, or lead him to, knowledge of the ultimate fact.” Federal Deposit Ins. Corp. v. Taylor, 2011 UT App 416, ¶ 36, 267 P.3d 949 (citation and internal quotation marks omitted). Marcheta contends that because Victor was on constructive notice of the deed transferring ownership of the mineral rights to Marcheta by operation of the recording statutes, Armando cannot claim that the fraud was not disсovered until 2011.
¶19 The Utah Supreme Court rejected this very contention in Rasmussen v. Olsen, 583 P.2d 50 (Utah 1978). There, the Rasmussens sold Olsen some real property in 1959. Id. at 51. In the written purchase agreement, the parties did not discuss who would own the mineral rights associated with the property, but the Rasmussens ultimately conveyed the property to Olsen in a deed specifically reserving the mineral rights for themselves. Id.
¶20 Rasmussen‘s approach aligns well with the purposes of the recording statutes: to “impede fraud, to foster the alienability of real property, and tо provide predictability and integrity in real estate transactions,” Federal Deposit Ins. Corp., 2011 UT App 416, ¶ 23 (citation and internal quotation marks omitted). Adoption of Marcheta‘s constructive notice argument would permit a forged deed to overcome the lawful owner‘s title in cases, such as is alleged here, where the fraud is discovered after the passage of the statute of limitations. Adopting that view would not advance the purposes of impeding fraud and securing title. Accordingly, we conclude that Victor did not have constructive notice of the allegedly forged 1988 deed by virtue of its being recorded.
¶21 Because Armando alleged sufficient facts to support a claim that he did not discover the fraud in the 1988 mineral rights cоnveyance to Marcheta until 2011, we cannot affirm the district court‘s grant of the motion on this basis. Our ruling, however, is limited to the facts as alleged in the complaint, and
III. Real Party in Interest
¶22 Finally, Armando contends that the district court erred in dismissing his fraud claim on the basis that he did not have standing as a real party in interest.
¶23 Armando claims that if the 1988 deed transferring the one-half interest in the mineral rights to Marcheta is in fact invalid, as he contends, then the interest should have been part of Victor‘s estate. And he asserts that Victor‘s heirs are the real parties in interest to any claim that Victor‘s estate might have to the mineral interest. According to Armando, his complaint contained sufficient factual allegations to establish his status as an heir.
¶24 Heirs are “persons, including the surviving spouse and state, who are entitled under the statutes of intestate succession to the property of a decedent.”
¶25 Armando‘s presumed status as an heir,7 however, does not conclusively resolve the question of whether he is a real party in interest. A “real party in interest” is “[a] person entitled under the substantive law to enforce the right sued upon and who generally, but not necessarily, benefits from the action‘s final outcome.” Black‘s Law Dictionary 1232 (9th ed. 2009); accord Industrial Comm‘n v. Wasatch Grading Co., 14 P.2d 988, 991 (Utah 1932) (“One having the legal title to a cause of action is a real party in interest.“). But only “[a]n executor, administrator, guardian, bailee, trustee of an express trust, a party with whom or in whose name a contract has made for the benefit of another, or a party authorized by statute” can assert a claim on behalf of
¶26 Armando‘s claim that heirs аre the real parties in interest to property within an intestate estate finds some support in In re Cloward‘s Estate, 82 P.2d 336 (Utah 1938). There, the Utah Supreme Court noted, “The property of a decedent passes to the heirs (in whom the title vests at the death of the prior owner), subject only to administration.” Id. at 342; see also
¶27 However, Marcheta asserts that since the adoption of the Uniform Probate Code in 1975, Utah law has required claims belonging to the estate of the decedent to be prosecuted by the personal representative. To support her position, Marcheta cites Utah Code seсtion 75-3-708, which provides that a personal representative “may maintain an action to recover possession of property or to determine the title thereto,”
¶28 The district court did not resolve this dispute. Indeed, the court seemed to accept that either an heir or a personal representative could commence litigation on behalf of an estate but nevertheless granted Marcheta‘s motion on the basis that Armando hаd never “initiated proceedings to be declared a legally-recognized heir of Victor Pierucci‘s estate.” Because
¶29 When a person dies without leaving a will, any interested person may file, within three years of the decedent‘s death, a petition for an adjudication of intеstacy to determine whether the decedent died without a will and, if so, to identify the decedent‘s heirs for purposes of distributing the decedent‘s estate.
¶30 Appointment of a personal representative to administer an intestate estate is not required. See Utah Title 75, ch. 3, General Uniform Law Comments, Refs. & Annos. (“[A]n adjudication of intestacy may occur without any attendant requirement of appointment of a personal representative.“). However, a personal representative, if appointed, acts as a fiduciary to the estate‘s heirs in settling and distributing the decedent‘s estate and is vested with the authority to sue and be sued on behalf of the decedent‘s estate.
¶31 Indeed, the probate code explicitly provides that whenever there are claims to be asserted against an estate, a personal representative must be appointed because the estate is not a legal entity.
¶32 Armando has not directed us to any authority in the probate code, the pertinent real property or fraud code sections, or the case law on these subjects that grants an heir the power to bring this type of cause of action—to recover real property that was fraudulently obtained during the life of the decedent—on behalf of the estate. Indeed, the only authority that Armando does cite appears to be limited by its context and cannot be logically extended to reach the facts presented here. He cites In re Estate of Thorley, 579 P.2d 927 (Utah 1978), which cоncludes that heirs are authorized to contest a will. Id. at 928. Armando asserts that because heirs are the real parties in interest for a will contest, they must also be the real parties in interest for the purpose of bringing other claims from which they may ultimately benefit. The probate code, however, expressly allows any interested person to challenge a will.
CONCLUSION
¶33 Because Armando has not persuaded us that the district court erred in dismissing the case on the ground that he had not shown that he was a real party in interest, we affirm. Our decision to affirm, however, does not preclude Armando from seeking any remedy suggested by
He has not cited these cases on appeal, and they seem to highlight the weakness of his claim that an heir is a real party in interest in connection with an attempt to recover a decedent‘s property. For instance, a trustee acts as a fiduciary to the beneficiaries of the trust, аnd the beneficiaries have independent authority to challenge the trustee‘s actions when he or she seems to be acting contrary to the beneficiaries’ interests. Anderson v. Dean Witter Reynolds, Inc., 841 P.2d 742, 745 (Utah Ct. App. 1992). And the wrongful death statute specifically authorizes heirs to bring the claim because wrongful death is a statutory claim designed to compensate the heirs and is distinct from any action the decedent might have brought for personal injury had the decedent survived. Haro v. Haro, 887 P.2d 878, 879 (Utah Ct. App. 1994); see also Francis v. Southern Pac. Co., 162 F.2d 813, 816 (10th Cir. 1947) (discussing Utah‘s wrongful death statute).