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on the Sangre de Cristo grant |
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April 28.2003
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SUPREME
COURT, STATE OF COLORADO Certiorari
to the Colorado Court of Appeals Case
No. 00SC527 Petitioners: Eugene
Lobato; Zack Bernal; Gabrielita Adeline
Espinosa; Edward Espinosa; Pete E.
Espinosa, Jr.; Corpus Gallegos, by and
through his conservator Yvette Gallegos;
GLORIA GALLEGOS; RUPERT GALLEGOS; RAYMOND
GARCIA; CHARLIE JACQUEZ, JR.; ADOLPH J.
LOBATO; BONIFACIO "BONNIE" LOBATO, by and
through his conservator Teresa Lobato;
CARLOS LOBATO; EMILIO LOBATO, JR.; JOSE F.
LOBATO; PRESESENTACION J. LOBATO; GLORIA
MAESTAS; NORMAN MAESTAS; ROBERT "BOBBY"
MAESTAS; RAYMOND J. MAESTAS; EUGENE
MARTINEZ; MARK MARTINEZ; AGATHA MEDINA;
GILBERT "ANDRES" MONTOYA; SHIRLEY ROMERO
OTERO; EPPIE QUINTANA; LUCILLE SAMELKO;
ARNOLD VALDEZ; ERVIN L. VIGIL; LARRY J.
VIGIL; MICHAEL J. VIGIL; BILLY ALIRE;
ROBERT ATENCIO; FRANCES D.
BERGGRAN-BUHRLES; JOSE FRED CARSON; ELMER
MANUEL ESPINOSA; MARGURITO ESPINOSA;
MOISES GALLEGOS; RUBEN GALLEGOS; RICHARD
J. GARCIA; MANUEL GARDUNIO; RUBEN HERRARA;
JEFFREY JACQUEZ; ADELMO KABER; CRUCITO
MAES; DANIEL MARTINEZ; DAVID MARTINEZ;
JESSE MARTINEZ; LEONARDO MARTINEZ; ROSENDO
MARTINEZ; SOLESTIANO MARTINEZ; ALFONSO
MEDINA; GILBERT MEDINA; LEANDARDO MEDINA;
LOYOLA MEDINA; MARVIN MEDINA; ORRY MEDINA;
RAYMOND N. MEDINA; RUDY MONTOYA; GURTRUDE
C. OLIVAS; EPPY WAYNE QUINTANA; ROBERT
ROMERO; SHIRLEY ROMERO; ANTHONY SANCHEZ;
BONNIE SANCHEZ; EUGENE SANCHEZ; EVAN
SANCHEZ; JAMES SANCHEZ; JOSE G. SANCHEZ;
RUFINO SANCHEZ; S.R. SANCHEZ; VERNON
SANCHEZ; RONALD A. SANDOVAL; ELESAM
SANTISTEVAN; DANIEL SEGURA; FLOYD R.
SOLAN; CAROLYN TAYLOR; SAM VALDEZ; MARTHA
VIALPONDO; JOE P. VIGIL; and WALTER
VIGIL, v. Respondents: ZACHARY
TAYLOR, as executor of the Estate of Jack
T. Taylor, Jr., deceased; THE TAYLOR
FAMILY PARTNERSHIP; J. HOY ANDERSON;
MARVIN LAVERN STOHS; EDYTHE KELLY STOHS;
CHARLES W. GELDERMAN; WILLIAM F. PHINNEY;
HARLAN A. BROWN; DENA F. FUHRMANN; JIMMY
C. CROOK; FREELAND D. CRUMLEY; JOSEPH P.
CAMPISI; HUGH R. DENTON; ROBERT PAUL
RESTELI; EUGENE J. KAFKA; AVIS M.
ANDERSON; CLIFFORD R. JENSON; DON W.
JACOBS; RAYMOND E. GAUTHIER; FRANCIS P.
HESTON; and HOWARD G. FRAILEY. Goldstein
and Dodge, LLC Jeffrey
A. Goldstein Denver,
Colorado Littler
Mendelson, P.C. William
F. Schoeberlein Denver,
Colorado Robert
Maes Denver,
Colorado David
Martinez Denver,
Colorado Walters
& Joyce, PC Julia T.
Waggener Denver,
Colorado Kelly|Haglund|Garnsey+Kahn
LLC Norman
D. Haglund Denver,
Colorado Don
Hiller & Galleher, PC Watson
Galleher Denver,
Colorado Elisabeth
Arenales Denver,
Colorado Attorneys
for Petitioners Wolf
& Slatkin, PC Albert
B. Wolf Raymond
P. Micklewright Jonathan
L. Madison Denver,
Colorado Attorneys
for Respondent Richard
Garcia Denver,
Colorado Richard
L. Reich Costa
Mesa, California Federico
Cheever Denver,
Colorado Gorsuch
Kirgis, LLP Loretta
P. Martinez Denver,
Colorado David J.
Stephenson, Jr. Denver,
Colorado David H.
Miller Denver,
Colorado Attorney
for Amicus Curiae American Civil Liberties Union
Foundation of Colorado Henry J.
Feldman Denver,
Colorado Attorney
for Amicus Curiae National Lawyers Guild, Colorado
Chapter CHIEF
JUSTICE MULLARKEY delivered the Opinion of the
Court. JUSTICE
KOURLIS dissents, JUSTICE RICE joins in the
dissent. JUSTICE
Coats does not participate. Today's
opinion is the third in a trilogy of decisions that
we have issued construing some of the oldest
property rights in the state. Involved are access
rights to a large, mountainous tract of land in
southern Costilla County, Colorado known as the
Taylor Ranch.1 These property rights
trace their origins to the time before Colorado's
statehood when southern Colorado was still a part
of Mexico. The
Costilla County landowners, whose property rights
are at issue, are the present-day descendants of
1850s frontier farming families who were recruited
by Carlos Beaubien to move north from the Taos area
in New Mexico and settle in what is now southern
Colorado. Beaubien
acted from self interest: without settlers, he
could not perfect his rights to the one
million-acre Sangre de Cristo land grant because
the Mexican government made settlement an express
condition of the grant to Beaubien. To convince
these families to move north, Beaubien granted the
settlers access to the wooded, mountainous area to
graze their animals, gather firewood, and harvest
timber to build their homes and outbuildings.
Without these property rights, subsistence farming
on the valley floor would have been
impossible. At
trial, many current residents of Costilla County
testified that, for over one hundred years, the use
of these rights was widespread by the families
residing in the region. These residents testified
that it was general knowledge in their communities
that the Taylor Ranch could be used to graze their
animals, gather firewood, and collect timber.
According to trial testimony, the mountainous tract
purchased by Taylor had been known simply as "la
merced," roughly translated from Spanish to mean
the gift or grant. Our
prior decisions have recited the history of the
landowners' property rights up to the present day
in detail. To summarize the roots of today's
conflict, Jack Taylor purchased the Taylor Ranch in
1960. After purchase, he fenced off the property,
patrolled the area with armed guards, and
instituted a Torrens Title action in federal court
in order to extinguish the landowners' property
rights. His lawsuit gave personal notice to a small
fraction of the predominantly Spanish-speaking,
Costilla County landowners. The great majority of
the landowners received notice only by publication.
Taylor subsequently was successful in extinguishing
the landowners' property rights. In our
first decision, Rael v. Taylor, 876 P.2d
1210 (Colo. 1994), we determined that due process
required that Taylor exercise reasonable diligence
in the Torrens action to identify and personally
serve all reasonably ascertainable persons with an
interest in his property. We remanded the case for
development of the facts, concluding that the
appellate record was inadequate to permit us to
determine whether Taylor had met the due process
standard. Id. at 1228. After
the trial court developed the record on remand, the
case was appealed for the second time. In our
second decision, we held that the landowners have
the same property rights as the original settlers
to reasonably access the Taylor property for
grazing animals, gathering firewood, and harvesting
timber. Lobato v. Taylor, 2002 WL 1360432 *1
(Colo. June 24, 2002) ("Lobato I").
As
we explained in Lobato I, the rights Beaubien
granted to the settlers were profits à
prendre or, in more modern parlance, easements
appurtenant to the land owned or occupied by the
original settlers. See Restatement (Third) of
Prop.: Servitudes § 5.2 (2000). In this
third opinion we resolve several remaining issues:
(1) which present-day landowners may claim access
rights to the Taylor Ranch; (2) whether Taylor met
the due process requirements outlined in our first
opinion when he gave notice to the landowners of
his Torrens action; and (3) whether res
judicata2 bars the claims of the
landowners who were personally named and served in
the Torrens action. Our
decision can be summarized as follows. First, we
conclude that reasonable access rights to the
Taylor Ranch are available to Costilla County
landowners who are successors in title to the
original settlers of Beaubien's grant. For
practical purposes, landowners who are able to
trace Second,
we hold that the publication notice given by Taylor
when he initiated his Torrens action violated due
process. The facts developed at trial show that
Taylor knew Costilla County landowners claimed
rights to use the ranch and that reasonable
diligence would have identified the names and
addresses of the landowners. Third,
we hold that res judicata applies and precludes the
claims of those Costilla County landowners and
their successors who were personally named and
served in the 1960s Torrens action. Thus, we
reverse the trial court's due process/res judicata
decision and return the case to the court of
appeals for remand to the trial court. We direct
the trial court to identify all landowners who have
access rights to the Taylor Ranch and to enter all
necessary and appropriate orders to safeguard those
rights. In order
to fully understand the due process and res
judicata issues before this court today, it is
important to review the circuitous procedural
history that has led to today's decision. Because
the facts of this case have been fully detailed in
our prior decision, Lobato I, 2002 WL
1360432 at *1-4, we now discuss only those facts
that are relevant to the due process/res judicata
inquiry presented in this case. The
petitioners, landowners in the Culebra River
Drainage3 region of Costilla County,
claim access rights to the Taylor Ranch. These
access rights had been granted to the original
settlers in Costilla County and had been utilized
for over one hundred years. In 1960, Jack Taylor
purchased the Taylor Ranch and forcibly excluded
landowners by fencing the land. Soon after, Taylor
sought to quiet title in the land via a Torrens
Action4 that he filed as a diversity
action in the federal district court in Denver.
Taylor's exclusive ownership of the Taylor Ranch
was subsequently confirmed in 1967. Sanchez v.
Taylor, 377 F.2d 733 (10th Cir.
1967). In 1981,
the landowners filed suit in the Costilla County
District Court to regain access to the land. The
trial court dismissed the landowners' claims,
holding that the 1960s Torrens action precluded the
suit. The landowners then appealed to this court
arguing that the notice publication procedure
adopted by Taylor in the Torrens action violated
their rights to due process. We reversed and
remanded the case because of our concerns about
disputed issues of material fact and the
constitutional validity of the Torrens action.
Rael v. Taylor, 876 P.2d at 1228. On remand
from this court's decision in Rael, we
directed the trial court to develop the facts and
to determine whether Taylor had exercised
reasonable diligence in identifying all persons who
claimed interests in the Taylor Ranch and
personally served them as defendants in the Torrens
action. For any plaintiffs whose claims were not
barred by res judicata, the trial court was to
determine whether their claims to the Taylor Ranch
were meritorious. To better organize the trial
process, the trial court bifurcated the
proceedings. One trial was held to determine which
plaintiffs had been denied due process and whose
claims were not barred by res judicata, and a
second trial was then held on the merits of the
case. In
evaluating whether res judicata barred the
landowners' claims, the trial court was required to
determine whether the manner in which Taylor served
the plaintiffs in his 1960s Torrens action complied
with due process. To comply with due process,
Taylor was required to serve each individual with
an identifiable interest in the Taylor Ranch whose
name was also reasonably ascertainable. The trial
court dismissed most of the original plaintiffs,
finding that only seven could pursue their claims
to the Taylor Ranch. Using proof of grazing on the
Taylor Ranch as a litmus test, the trial court
concluded that although all of the plaintiffs could
claim an identifiable interest in the Taylor Ranch,
only seven had presented sufficient evidence of
grazing practices for them to be reasonably
ascertainable to Taylor. Thus, under the trial
court's analysis, Taylor violated due process only
by not personally naming and serving these seven
persons. During
the merits phase of the case, the trial court found
that the seven plaintiffs possessed no substantive
rights in the Taylor Ranch. The court of appeals
affirmed the trial court's merits analysis and did
not address the due process/res judicata decision,
finding it moot. This court, in Lobato I,
reversed the decision of the court of appeals,
finding substantive rights of access through
implied easements appurtenant
to the land
by prescription, estoppel, and prior use. The
landowners now challenge the trial court's due
process/res judicata decision. In
addressing the landowners' claims, we first clarify
from our decision in Lobato I that in order
to have actual access rights to the Taylor Ranch,
landowners must be Second,
we review the 1960s Torrens action to determine
whether Taylor provided sufficient notice of the
Torrens action to comply with due process
requirements. We conclude that, under the unique
circumstances of this case, Taylor did not exercise
reasonable diligence in effectuating proper notice
because he did not personally name and serve all
reasonably ascertainable persons with an
identifiable interest in the Taylor Ranch. Thus,
those individuals who should have been personally
named and served, and were not, are not barred from
presently bringing such claims. Third,
in light of the circumstances of this case, we
determine whether res judicata bars those 1960s
landowners or their successors in title who were
personally named and served in Taylor's 1960s
Torrens action. We conclude that res judicata
applies, finding that (1) public policy concerns or
manifest injustice concerns do not outweigh the
interests in applying res judicata; and (2) the
misapplication of Colorado law by the federal
courts in the 1960s Torrens action does not require
waiving res judicata. Having
concluded in Lobato I that successors in
title to the original settlers in Costilla County
were granted access rights for the reasonable use
of pasture, firewood, and timber, we now specify
which present-day landowners can successfully claim
these access rights to the Taylor Ranch. We hold
that only those landowners capable of tracing their
In
Lobato I, we held that successors in title
to the original settlers in Costilla County were
granted access rights to the Taylor Ranch for
reasonable use of pasture, firewood, and timber
through implied easements by prescription, prior
use, and estoppel. Lobato I, 2002 WL 1360432
at *1. The
landowners argue that these access rights should
not be limited to landowners able to trace
Under
the evidence presented in this case, it was the
unique circumstances surrounding Beaubien's Mexican
land grant and his promises to the original
settlers which gave rise to the implied easements
providing the settlers' successors with their
rights of access. These easements appurtenant to
the land were all created at the same time and stem
from the actions and intentions of Beaubien. As
outlined in Lobato I, Beaubien's intentions
and actions were instrumental in the creation of
these rights. Id. at *14-16. There is no
evidence in the record to substantiate the argument
that access rights to the Taylor Ranch have been
created for those individuals who settled after the
creation of the Beaubien document. We thus
conclude that only those present-day landowners--or
their predecessors in title--who are successors in
title to those persons who settled Costilla County
by the time the Beaubien document was created, can
claim rights of access to the Taylor Ranch for
reasonable grazing, firewood, and
timber. Having
determined which landowners can claim reasonable
access rights to the Taylor Ranch, we now explain,
for practical purposes, how the landowners can
establish these rights. 3. In order
for present-day landowners to legally gain access
rights to the Taylor Ranch, they must first
establish that their predecessors in title
settled their lands at the time of the
Beaubien document's creation.5 Because
of the practical impossibility of establishing the
exact time of settlement, we hold that a landowner
claiming access rights to the Taylor Ranch need
only The
Mexican government awarded the Sangre de Cristo
grant to Beaubien on the condition that he settle
the land. To perfect his grant, Beaubien recruited
farm families to settle by promising access rights
to mountainous lands like the Taylor Ranch.
Lobato I at *1-2. Evidence of Beaubien's
promise to give settlers access rights to the land
provided the basis for the implied rights to
pasture, firewood, and timber. Id. at *8-9.
Although these families began settling in the
1850s, many of these settlers did not receive the
deeds to their lands until 1863, or even later
after Beaubien's death in 1864. Id. at
*2. After
Beaubien's death, his lands were sold to Gilpin
pursuant to an oral agreement previously negotiated
between the two men. In this agreement, Beaubien
kept his promise to the settlers and made the sale
contingent on Gilpin's agreement to confirm the
access rights of the settlers. This agreement is
evidenced in the 1864 Gilpin agreement, which
states: Because
of this agreement between Beaubien and Gilpin, the
original settlers who received title from Gilpin
also possessed access rights to the Taylor
Ranch.6 Thus, landowners of Costilla
County who are able to Having
established which present-day landowners may claim
access rights to the Taylor Ranch, we now consider
whether Taylor's efforts in notifying potential
claimants of his intent to quiet title in the
Taylor Ranch were adequate to comply with the
requirements of due process. The constitutional
sufficiency of Taylor's 1960s Torrens action turns
on whether Taylor provided sufficient notice to the
landowners to extinguish their property claims in
the Taylor Ranch. If the action was not
constitutionally sufficient to meet due process
requirements, the landowners will not be barred
from bringing present-day claims. To
resolve this issue, we review and detail what
notice is required by due process. Next, we apply
that standard to the facts and evaluate whether the
steps taken by Taylor in his attempt to notify
interested parties were sufficient to bar future
claims. The
Torrens Title Act is a long-standing, seldom-used
feature of Colorado real property law. It is
intended to simplify the transfer of title and
create certainty by strictly limiting attacks on a
title registered under the Act. For example, a
challenge must be initiated within 90 days of
registration and successful claimants may recover
only damages, not property rights. ß
38-36-131, 10 C.R.S. (2002). Laudable as these
goals are, however, the act must yield to the
United States Constitution. To have
a preclusive effect on the landowners' current
claims, Taylor's Torrens judgment must satisfy the
minimum procedural requirements of the Due Process
Clause of the Fourteenth Amendment. Kremer v.
Chemical Constr. Corp., 456 U.S. 461, 481
(1982). Although section 118-10-31, 5 C.R.S.
(1953), of the 1960s Torrens Act forecloses any
challenges to a court's decree in a Torrens action
and although the essential purpose of the Torrens
Act is to eliminate attack on decrees of
confirmation, the Torrens bar on future challenges
cannot be sustained where constitutional
deficiencies of notice are present. Rael v.
Taylor, 876 P.2d at 1224 (citing Petition of
Brainerd Nat'l Bank, 383 N.W.2d 284, 287 n.2
(Minn. 1986); Riley v. Pearson, 139 N.W.
361, 366 (Minn. 1913)). In the
seminal case Mullane v. Cent. Hanover Bank &
Trust Co., 339 U.S. 306, 314 (1950), the United
States Supreme Court recognized that before an
action that will affect an individual's interest in
life, liberty or property is commenced, state law
must provide interested parties with "notice
reasonably calculated, under all the circumstances,
to apprise [the parties] of the pendency of
the action and afford them an opportunity to
present their objections." (citations
omitted). The
central issue in Mullane involved the
actions of the Central Hanover Bank and Trust
Company in establishing a common trust fund from a
total of 113 smaller trusts. This merging of trusts
affected the respective property rights of the
beneficiaries of these trusts and their ability to
control their assets. The only notice given to the
beneficiaries of this created common trust was
through publication in a local
newspaper. The
Court held that although publication notice for
beneficiaries whose interests or addresses were
unknown was sufficient to comply with due process,
the trustee had erred in not personally notifying
those beneficiaries whose names and addresses were
easily obtainable. Id. at 317. In explaining
its reasoning, the Court stated that Id.
at 315 (citations omitted). Under this standard,
the Court disapproved of notice by publication for
those beneficiaries whose identities and addresses
were known because publication was not "reasonably
calculated" to provide actual
notice.7 As to
unknown beneficiaries, the Court concluded that
notice by publication was sufficient to satisfy due
process requirements. The Court reasoned that
although the chance that these beneficiaries would
be notified by publication was remote, the
publication would be as effective as any other
method to notify the unknown beneficiaries.
Id. at 317. In
subsequent cases, the United States Supreme Court
has held to the principles of due process outlined
in Mullane. See Walker v. City of
Hutchinson, 352 U.S. 112 (1956) (finding notice
of condemnation proceeding published in a local
newspaper inadequate to inform an affected
landowner whose name was known to the city and in
official records); Schroeder v. City of New
York, 371 U.S. 208 (1962) (holding that
publication by newspaper and through posted notices
was insufficient to alert property owner of
condemnation proceedings where name and address
were easily ascertainable from deed records and tax
rolls); Greene v. Lindsey, 456 U.S. 444
(1982) (concluding that posting a summons on the
door of a tenant's apartment was inadequate to
provide notice of forcible entry and detainer
actions); Mennonite Bd. of Missions v.
Adams, 462 U.S. 791 (1983) (finding publication
and posting of a tax sale of a property was
insufficient to notify a mortgagee whose address
was reasonably ascertainable and whose interest was
publicly recorded)). In
Rael, we followed the United States Supreme
Court's reasoning in Mullane. We held that
to evaluate the sufficiency of publication notice,
due process requires a court to determine "whether
under all the circumstances the means selected was
reasonably calculated to reach interested parties
and whether the party giving notice had exercised
due diligence to ascertain the identities of
interested parties." Rael v. Taylor, 876
P.2d at 1225. This determination of reasonable
diligence is an objective test. We look to the
actions that a reasonably prudent applicant would
have taken under the circumstances, either known or
reasonably discoverable by the applicant at the
time of filing, to guarantee that interested
parties would be identified and served as named
defendants. Id. at 1226-27. In reference to
Torrens Act proceedings specifically, "applicants
have a duty to exercise reasonable diligence in
identifying all reasonably ascertainable persons
who claim interests in the property and are thus
entitled to personal service." Id. at
1226 (emphasis added). Furthermore, a search for
reasonably ascertainable interested parties need
not extend beyond what would be discoverable by
diligent inquiry into the public records.
Id. at 1228 n.26. We were
unable to apply that test in Rael because
the facts were not sufficiently developed.
Id. at 1128. With the facts now before us,
we evaluate whether Taylor was required to
personally name and serve the plaintiff landowners
in his Torrens action. More specifically, we must
determine whether Taylor exercised reasonable
diligence in discovering all claimants (1) who
claimed an identifiable interest in the Taylor
Ranch, and (2) whose identities were reasonably
ascertainable. The
circumstances surrounding Taylor's 1960s Torrens
action lead us to conclude that at the time of the
Torrens action, all landowners in Costilla County
possessed an identifiable interest in the Taylor
Ranch. The
trial court in this case found that under the
Beaubien document, all the plaintiffs before the
court could claim an identifiable interest in the
Taylor Ranch. Taylor now argues that the landowners
fail to meet this element of the due process
analysis, contending that they, as landowners, have
no identifiable interest in the Taylor Ranch and
that he and his attorneys exercised reasonable care
and due diligence in individually naming defendants
in his Torrens application. We agree with the trial
court determination and find Taylor's argument to
be without merit. Taylor
mistakenly assumes that the due process
requirements set forth in Mullane and its
progeny require that, in order for a party's
interest to be identifiable, the interest must
either be recorded or the party must be in open
possession of the interest. Although an
"identifiable interest" usually is associated with
a recorded interest or an interest that is obvious
via actual possession, the case before us is not
the usual case. To the contrary, this is a highly
unusual case that proves the Supreme Court's
admonishment that constitutionally sufficient
notice must be determined by examining the
circumstances of each individual case. See
Mullane v. Cent. Hanover Bank & Trust
Co., 339 U.S. at 314-15. Taking into account
the information contained in the Beaubien document,
the 1864 Gilpin agreement, Taylor's own deed, the
title examiner's report, and other extrinsic facts,
Taylor's argument that he could not have reasonably
identified and named the landowners must
fail. First,
the language of the Beaubien document, the 1864
Gilpin agreement, and Taylor's own deed would have
provided a reasonable applicant in Taylor's
position with adequate notice that some landowners
in Costilla County might have some interest or
claim in the Taylor Ranch. Taylor knew he was
buying land within the Sangre de Cristo Mexican
land grant. The Jenkins translation8 of
the Beaubien document unequivocally provides
that Although
Taylor might credibly contend that the language of
the Beaubien document alone was insufficient to
provide him with reasonable notice of potential
claimants, this argument fails when the Beaubien
document is combined with the language in the other
two noted documents. The
instrument of conveyance of the Sangre de Cristo
grant to Gilpin from Beaubien's heirs in
1864--contained in Taylor's chain of title--also
clearly provides notice to the average reader that
landowners in Costilla County might credibly claim
access rights to the Taylor Ranch. The Gilpin
agreement expressly conditions conveyance to Gilpin
on the requirement that "certain settlement rights
before then conceded by said [Carlos]
Beaubien to residents of the settlements of
Costilla, Culebra & Trinchera . . . shall be
confirmed by said William Gilpin." Finally,
Taylor's own deed specifically provides that "All
of the land hereby conveyed . . . being subject to
claims of the local people by prescription or
otherwise to right to pasture, wood, and lumber and
so-called settlements [sic] rights in, to
and upon said land." With these three documents at
his disposal, it is clear that Taylor was on notice
that landowners in Costilla County might have an
interest in the Taylor Ranch. In
addition to these three documents, Taylor was
notified of the landowners' claims through his
lawyer who handled the Torrens proceedings. We
noted in Rael that Taylor's lawyer, Raphael
Moses, Esq., had personal knowledge of the claimed
interests of the landowners and even acknowledged
these interests in 1949 in a letter to some of the
same landowners he sought to exclude in the 1960s
Torrens action: We
still believe that this is the case and that
you would have the right to stop anyone who
interferes with these
rights. Rael
v. Taylor, 876 P.2d at 1215 n.7. See
also Tom Faxon, "An Oral History: Raphael J.
Moses," The Colorado Lawyer, March 1998,
Vol. 27, No. 3, 115 (interview with Moses
explaining that the 1960s Torrens action was filed
roughly 250 miles from Costilla County in federal
court in Denver to avoid possible conflicts with
landowners over their access rights). At the
time Taylor commenced his Torrens action, there
were approximately 1,913 landowners in Costilla
County. Although we recognize that the land
referenced in the Beaubien document is not
coextensive with the boundaries of Costilla County,
other information available to Taylor in the 1960s
put Taylor on notice that all landowners in
Costilla County had potential claims in the Taylor
Ranch. The Torrens title examiner's report and
other extrinsic information available to Taylor
provided such notice. The
court-appointed title examiner assigned to conduct
the investigation concerning Taylor's Torrens
application was W.W. Platt. In his report, Platt
noted that claim rights to the Taylor Ranch to take
pasture and wood were asserted by the Association
of Civic Rights, which represented "all owners
of land in Costilla County." Although Taylor
was aware of the Association of Civic Rights and
its asserted interests in the Taylor Ranch, he made
no effort to name all landowners in Costilla
County.9 In fact, he failed to name
these individuals even though his Torrens
application specifically addresses the Association
of Civic Rights and its claim to usufructuary
rights in the Taylor Ranch. Although
Taylor noted in his application that the
individuals represented by the Association of Civic
Rights were claiming rights to pasture and wood
as landowners, Taylor argued that this
status did not provide them with any identifiable
rights in the Taylor Ranch. This contention loses
its credibility when considered in light of the
title examiner's report. In Platt's report
evaluating the propriety of Taylor's Torrens
application, the examiner specifically notes that
269 of the people specifically named by Taylor were
named only because of their status as landowners.
As Platt unequivocally concluded, the only possible
interest these 269 people have in the Taylor Ranch
would be as "landowners in Costilla County claiming
such rights to pasture and wood solely because
they are such landowners." (emphasis added).
Because these 269 individuals were named in his
Torrens application, logic should have dictated
that Taylor also name all landowners in Costilla
County, considering that both groups claimed their
respective interests in the Taylor Ranch solely as
landowners of Costilla County. In sum,
as established by the details of Taylor's knowledge
in the 1960s, it is clear that Taylor possessed
adequate notice that all of the landowners of
Costilla County claimed an interest in the Taylor
Ranch. Having concluded that Taylor should have
recognized that all the landowners of Costilla
County claimed an identifiable interest in the
Taylor Ranch, we now evaluate whether the
identities of these landowners were reasonably
ascertainable by Taylor. With
respect to whether the 1960s landowners were
reasonably ascertainable by Taylor at that time,
the landowners contend that the trial court erred
in concluding that the identities of the great
majority were not reasonably ascertainable.
Conversely, Taylor agrees with the trial court and
argues that, aside from those landowners whom he
specifically named, he could not have reasonably
ascertained other landowners who claimed an
interest in the Taylor Ranch. We disagree with
Taylor's assertion and conclude that the trial
court ruling was incorrect. Having established that
through reasonable diligence, Taylor knew or should
have known that all 1960s landowners in Costilla
County claimed an interest in the Taylor Ranch, we
now conclude that the landowners were reasonably
ascertainable and could have been personally
notified rather than served by
publication. Specifically,
we conclude that the trial court erred in (1)
finding that the examination of real estate records
was sufficient to locate interested individuals;
and (2) relying on grazing as the test for whether
the plaintiffs were reasonably
ascertainable. First,
the trial court was mistaken in concluding that
Taylor was only required to search and examine the
real estate records of the Clerk and Recorder in
order to diligently ascertain those individuals
with an identifiable interest in the Taylor Ranch.
Because Taylor had knowledge of the claimed
interests of the landowners in Costilla County,
reasonable diligence required Taylor to search the
Costilla County tax rolls as well. Although,
generally, only documents within a chain of title
must be searched to determine relevant interests in
real property, more is required where it appears
that outside interests may affect title. In such
instances, an individual has a duty to investigate
these other interests and is charged with knowledge
of the facts to which the investigation would have
led. Collins v. Scott, 943 P.2d 20, 22
(Colo. App. 1996) (citations omitted). That it
is sometimes necessary to look beyond standard
forms and legal methods is demonstrated by our
decision in Jacobucci v. Dist. Ct., 189
Colo. 380, 388, 541 P.2d 667, 672 (1975). In
Jacobucci, the City of Thornton initiated
eminent domain proceedings against, among others,
Farmers Reservoir and Irrigation Company, a mutual
ditch company organized by local farmers to enable
them to receive irrigable water for their farms.
Id. at 386, 541 P.2d at 671. Thornton
served only the corporation. Id. at 384, 541
P.2d at 669. Finding the individual
farmer-shareholders indispensable to the eminent
domain proceedings, however, we recognized that the
unique circumstances surrounding the creation of
mutual ditch companies in Colorado required that we
look beyond general corporate law principles.
Id. at 390, 541 P.2d at 674. Although
recognizing that shareholders are generally not
considered real parties in interest in condemnation
actions, we cautioned that "[d]eductions
made from the application of general legal concepts
may be dangerously inappropriate as applied to
specific contexts." Id. at 389, 541 P.2d at
673. In looking beyond legal forms, we reasoned
that the farmer-shareholders were real parties in
interest because, in practical terms,
"[t]he productivity and value of [the
farmer-shareholder's] lands, as well as the
assurance of their livelihoods, is . . . entirely
dependent upon the continuing flow of water. . . .
No court can ignore the magnitude of
[disruption] which would result in a
successful condemnation action." Id. at 391,
541 P.2d at 675. We thus required Thornton to
individually serve shareholders whose water would
be impacted by the condemnation. Id. at 392,
541 P.2d at 675-76. The
challenges of farming in an arid climate gave rise
to the mutual ditch company, an entity that does
not easily fit within the confines of corporate law
and condemnation actions. We directed that the
corporation be disregarded and notice be given to
the farmers who had the most to lose in the
condemnation action. The
logic of Jacobucci applies with equal force
here because the facts in this case also reflect
the harsh realities of farmers' lives in southern
Colorado. The access rights made farming possible
in Costilla County. Given Taylor's knowledge of
those access rights, he could not pick and choose
whom to notify personally and whom to notify only
by publication. Under the circumstances of this
unique case, reasonable diligence required that
Taylor personally name and serve all landowners in
Costilla County. As noted
in Rael, the reasonable diligence standard
requires that "`[w]here the names and post
office addresses of those affected by a proceeding
are at hand, the reasons disappear for resort to
means less likely than the mails to apprise them of
its pendencey.'" Rael v. Taylor, 876 P.2d at
1225 (citing Mullane v. Cent. Hanover Tr.
Co., 339 U.S. at 318). See also
Schroeder v. City of New York, 371 U.S. 208
(names and addresses are easily ascertainable from
tax rolls); see also Mennonite Bd.
of Missions v. Adams, 462 U.S. at 798 n.4
(mortgagee easily ascertainable where only known
address listed mortgagee as "'corporation, of Wayne
County, in the State of Ohio'"). According
to the record, the Costilla County tax rolls
provided the names and addresses of every landowner
in Costilla County. At trial, Frederick B.
Skillern,10 an expert in the field of
real estate law, testified that Taylor could
reasonably have accessed the public tax records to
obtain the names and addresses of landowners in
Costilla County and that the information therein
would have been sufficient to effectuate service of
process to said landowners. Skillern also testified
that Taylor should have conducted this search in
order to properly comply with the notice required
by due process. In
reviewing the record and relevant case law, we
agree with the landowners and conclude that they
were reasonably ascertainable by Taylor through a
basic search of the tax rolls. Because
the names and addresses of the landowners were
available through the tax rolls, Taylor's efforts
in discovering potential claimants to the Taylor
Ranch were not reasonably diligent to comply with
due process. Although the number of names and
addresses of the landowners might have been
large,11 the process was not complex or
difficult. Second,
the trial court arbitrarily applied proof of
grazing as a litmus test to determine whether each
plaintiff was reasonably ascertainable by Taylor
and thus should have been named and served. The
trial court's test stated that, "[Taylor]
had a duty to ascertain the identity of owners of
property that ran cattle or sheep within a
reasonable proximity to [his] land and name
and personally serve such person." The
trial court's reliance on grazing alone is
inconsistent with our decision in Lobato I,
which found rights of access for firewood, timber,
and grazing. Therefore, we conclude that the trial
court erred in relying solely on proof of grazing
to determine which plaintiffs were reasonably
ascertainable by Taylor. As a
whole, when taking into account the expert
testimony and information at Taylor's disposal at
the time he filed his Torrens application, it is
clear that Taylor's actions were not sufficiently
diligent to comply with due process. Under the
circumstances surrounding this case in the 1960s, a
reasonably diligent applicant would have personally
served all landowners in Costilla County whose
names and addresses were available in the county's
tax records. Therefore, the claims made by all
present-day landowners or their predecessors in
title not personally named or served in the 1960s
Torrens action are not barred from asserting their
claims now, because they cannot be deemed as
parties to the Torrens action. As for those
landowners or predecessors in interest who were
actually served in the 1960s Torrens action, we now
explain why they are barred by res judicata from
claiming access rights to the Taylor
Ranch. Having
concluded that Taylor's efforts in notifying
potential claimants of his Torrens action were
inadequate to comply with the requirements of due
process and thus bar the claims of present-day
landowners, we now consider whether res judicata
should be applied to bar the claims of those
individuals who were personally named and served in
Taylor's 1960s action to quiet title in the Taylor
Ranch. The landowners argue that res judicata
should not be applied based on the 1960s Torrens
action because of the unique circumstances
surrounding this case. We disagree. The
operation of res judicata works to preclude the
relitigation of matters that have been litigated
already as well as matters that could have been
litigated in a prior proceeding. Wright, Miller,
& Cooper, Federal Practice and
Procedure: Jurisdiction 2d ß 4403, 20
(2002). In barring the relitigation of tried
matters, res judicata serves distinct and important
public and private values. As the United States
Supreme Court has stated, res judicata serves "the
dual purpose of protecting litigants from the
burden of relitigating an identical issue with the
same party or his privy and of promoting judicial
economy by preventing needless litigation."
Parklane Hosiery Co. v. Shore, 439 U.S. 322,
326 (1979) (citations omitted). Underlying these
purposes of finality and efficiency is the vital
interest in preserving the integrity of the
judicial system. Wright, Miller, & Cooper,
Federal Practice and Procedure: Jurisdiction
2d ß 4403 at 23. Specifically, if one matter
could be easily relitigated with inconsistent
results, judicial integrity would be compromised
and the value of and respect for court rulings
would be seriously devalued. Although exceptions to
the application of res judicata have been allowed
in instances where such application would undermine
an important state public policy or result in
manifest injustice, United States v.
LaFatch, 565 F.2d 81, 83 (6th Cir. 1977), after
the United States Supreme Court's decision in
Federated Dep't Stores, Inc. v. Moitie, 452
U.S. 394, 401 (1981), such exceptions are extremely
rare. The
landowners offer three reasons for why res judicata
based on Taylor's 1960s Torrens action should not
apply to this case. First, the landowners argue
that res judicata cannot be applied because the
federal court in the 1960s action incorrectly
applied Colorado law. Second, they argue that
application of res judicata would create a manifest
injustice in the tightly-knit community because
certain landowners would have access to the Taylor
Ranch while others would not. Finally, the
landowners contend that the application of res
judicata here would be contrary to the public
policy in Colorado recognizing implied rights in
land. Although we recognize that there are
occasions in which res judicata cannot and should
not be applied, none of the arguments offered by
the landowners convinces us that the circumstances
surrounding the 1960s Torrens actions present such
an occasion. First,
the landowners argue that misapplication of the law
should limit the application of res judicata.
Specifically, the landowners contend that res
judicata should not be applied because the United
States District Court and the United States Court
of Appeals of the Tenth Circuit in Sanchez v.
Taylor, 377 F.2d 733, wrongly interpreted
Colorado law in holding that the landowners had no
access rights to the Taylor Ranch as evidenced by
our decision in Lobato I. We
disagree. The
application of res judicata is not thwarted simply
because a prior, final ruling was based on law
subsequently overruled. See Precision Air
Parts, Inc. v. Avco Corp., 736 F.2d 1499 (11th
Cir. 1984) (finding res judicata applicable despite
a subsequent reinterpretation of Alabama's statute
of limitations no longer barred claims as untimely
filed). Res judicata cannot be so easily avoided
here simply because the federal courts in the
1960s's Torrens action misinterpreted Colorado law.
See Federated Dep't Stores, Inc. v.
Moitie, 452 U.S. at 398-99 ("the res judicata
consequences of a final, unappealed judgment on the
merits [are not] altered by the fact that
the judgment may have been wrong. . . . ëThe
indulgence of a contrary view would result in
creating elements of uncertainty and confusion and
in undermining the conclusive character of
judgments, consequences which it was the very
purpose of the doctrine of res judicata to
avert.'") (quoting Reed v.
Allen,
286 U.S. 191, 201 (1932)). Although
cases exist where a misapplication of the law has
resulted in the waiver of res judicata, such cases
strictly involved instances in which the legal
correction was based on significant changes in
fundamental constitutional rights. See
e.g., Christian v. Jemison, 303 F.2d
52, 55 (5th Cir. 1962) (res judicata not applied to
state court judgment after Supreme Court overruled
separate-but-equal doctrine in Brown v. Bd. Of
Educ., 347, U.S. 483 (1954)). Although the
circumstances surrounding the exclusion of
landowners served in Taylor's 1960s Torrens action
are unfortunate, the federal courts' erroneous
interpretation of Colorado law is not of such
constitutional magnitude as to compel this court to
overlook the long-standing and important principles
supporting the application of the res judicata
doctrine. The
landowners next argue that the application of res
judicata should be waived because the bar will
result in a manifest injustice whereby some
landowners in the Costilla County community would
be granted access rights while others would not. As
expressed in Moitie, inequities resulting
from the application of res judicata will not
easily outweigh the principles supporting its
application. Federated Dep't Stores, Inc. v.
Moitie, 452 U.S. at 400; E.E.O.C. v. U.S.
Steel Corp., 921 F.2d 489 (3d Cir. 1990)
(finding that res judicata barred the relitigation
of illegal discrimination claims against an
employer although some similarly situated employees
were awarded relief and others were
not).12 Although the possible creation
of divisions within the local community would be
troubling, we do not find that these divisions
would rise to the level of creating a manifest
injustice. Finally,
the landowners contend that applying res judicata
would be contrary to public policy in Colorado
recognizing implied rights in land. Contrary to the
landowners' contentions, we find that applying res
judicata based on the 1960s Torrens action serves
the more important general public policy interest
that there be an end to litigation, Federated
Dep't Stores, Inc. v. Moitie, 452 U.S. at 401,
as well as Colorado's interest in ensuring that
real estate titles are secure and marketable.
Agee Revocable Trust v. Mang, 919 P.2d 908,
910 (Colo. App. 1996); ß 38-34-101, 10 C.R.S.
(2002) ("it is declared to be the policy in this
state that . . . laws concerning or affecting title
to real property . . . shall be liberally construed
with the end in view of rendering such titles
absolute and free from technical defects so that
subsequent purchasers . . . may rely on the record
title.") In balancing these interests, the public
policy interests which favor the finality provided
by res judicata outweigh any public policy
interests served by recognizing implied rights in
land. Although
we are sympathetic to the deeply-held views
expressed by the landowners, under the law, we can
find no facts, inequities, or public policy
considerations which outweigh those vital purposes
inherent in the application of res judicata. Thus,
res judicata will bar the claims of those
landowners personally named and served in Taylor's
Torrens action. In
conclusion, we clarify that reasonable access
rights to the Taylor Ranch will be available
Applying
the due process analysis of Rael to the
facts developed on remand, we hold that those 1960s
landowners not personally named and served in the
1960s Torrens action, or their successors, are not
barred from bringing their present claims. Finally,
we conclude that res judicata precludes the claims
of those landowners or their successors who were
personally named and served in the 1960s Torrens
action. In
light of our holding that Taylor failed to exercise
reasonable diligence in personally naming and
serving all reasonably ascertainable individuals
with an identifiable interest in the Taylor Ranch,
the cost of remedying this failure on remand must
be borne by Taylor. In Colorado, costs are awarded
to the prevailing party unless mandated otherwise
by statute. C.R.C.P. 54(d). Because the plaintiff
landowners have prevailed on their claims, Taylor
now must pay the costs associated with identifying
and notifying all persons who have access rights to
the Taylor Ranch.
The case
is returned to the court of appeals for remand to
the trial court. We direct the trial court to
identify all landowners who have access rights to
the Taylor Ranch and to enter all necessary and
appropriate orders to safeguard these
rights. JUSTICE
KOURLIS dissents, JUSTICE RICE joins in the
dissent. No.
00SC527, Lobato v. Taylor JUSTICE
KOURLIS dissenting: Jack T.
Taylor, Jr. and his successors in interest have
been litigating the title to the land at issue in
this case for forty-three years, beginning in the
federal district court of the district of Colorado.
Because I believe that principles of res judicata,
finality and certainty of title direct the outcome
of this most recent proceeding, I would uphold the
findings and conclusions of the trial court as to
due process and res judicata. Therefore, I
respectfully dissent from the portion of the
majority opinion that reopens this controversy and
grants rights to landowners who are able to trace
their In 1960,
Jack T. Taylor, Jr. purchased the mountain tract of
the Taylor Ranch estate. Because he knew that there
was a cloud on his title arising out of uses
historically made of that property by some
inhabitants of the area, he sought to clear up any
ownership disputes by commencing a Torrens action.
He filed the action in the federal district court,
on the basis of diversity jurisdiction predicated
on his status as a resident of North Carolina. In
his application, he named and served 316 defendants
individually who he anticipated could have sought
to assert a claim against his property. During the
course of the Torrens proceedings, he named and
served 142 additional defendants at the instigation
of the court, based upon testimony of the
court-appointed title examiner, who opined that the
compilation of named defendants were the only
individuals who had a possible interest in the
property as landowners of Costilla
County. The
federal district court confirmed Taylor's title in
an order in 1965, finding that the defendant
claimants had no rights of any kind or nature to
the estate. Specifically, the court denied the
three grounds upon which the claimants attempted to
assert their rights. First, the court found that
any rights the original settlers asserted under
Mexican law did not survive the acquisition of
lands by the United States. Second, the court found
that the Beaubien document conveyed no rights by
express grant or dedication, it did not mention the
lands comprising the mountain tract and it did not
contain language of conveyance. Finally, the court
found that the claimants had not acquired any
rights through their previous uses of the land by
prescription or adverse possession, because they
could not establish the requisite exclusivity,
hostility, or adversity to ownership. Two years
later, the Tenth Circuit Court of Appeals approved
the court's reasoning and affirmed entry of the
Torrens decree. Taylor
acquired additional adjacent lands in 1973, known
as the Salazar Estate. The Salazar Estate was the
subject of a quiet title action in 1960, and the
successful owner recorded his deed and then
conveyed his title. Beginning
in 1978, Taylor subdivided portions of the
properties and sold off the parcels. Three years
later, in 1981, petitioners filed suit in the
district court for Costilla County, initially
attacking the Torrens decree and attempting to
quiet title to the mountain tract. They claimed
usufructuary rights in the mountain tract to fish,
hunt, recreate, gather firewood, harvest timber and
graze cattle and sheep. On
Taylor's motion on the pleadings, the trial court
entered judgment denying the claimants' assertion
of rights. The court found that because of the
prior Torrens proceedings and decree, res judicata
and statutes of limitations barred all of
petitioners' claims. The court of appeals affirmed
and the claimants sought certiorari before this
court. On
review before this court in 1994, claimants argued
that res judicata did not bar their claims, because
they did not receive constitutionally adequate
notice of the Torrens action. Specifically, the
claimants contended that they were readily
ascertainable parties due personal notice of the
Torrens proceedings, because their interests were
recorded in the Costilla County records, were
referenced in both Taylor's deed and the Gilpin
agreement, were mentioned in the title examiner's
report, and were referred to in Taylor's own
application. Rael v. Taylor, 876 P.2d 1210,
1227 n. 26 (Colo. 1994). This court observed that
in a Torrens proceeding, an applicant must
personally serve known parties, but may give notice
to unknown parties by publication. Id. at
1222. The
court determined that the legislature intended to
"require applicants to exercise reasonable
diligence in ascertaining the names and addresses
of persons having any interest in the subject
property and therefore required to be listed in the
application and personally served." Id. at
1227. The court declared that the burden of proving
that notice was inadequate rests on the party
challenging the Torrens decree. However, the court
concluded that because the record was not fully
developed, a material fact remained as to whether
the claimants would be able to satisfy their burden
of showing that Taylor should have known their
names and personally served them when he filed his
application in 1960. Id. at 1222. Thus, this
court concluded that the record was inadequate to
determine the constitutionality of the notice upon
which the Torrens decree was predicated. Id.
at 1219. Three
justices dissented on the grounds that res judicata
did bar the claims and that notice was sufficient.
The chief issue on which the majority and dissent
disagreed was what a Torrens petitioner was
required to do in order to "ascertain the
identities of otherwise ëunknown' claimants,
that is, claimants whose names or interests do not
appear in the record chain of title and who are not
in possession of the land." Id. at 1231
(J. Vollack, dissenting). The dissenting
justices feared that the majority had exaggerated
the constitutional requirement, imposing a duty on
Torrens applicants "to search for a potential
claimant beyond public records or beyond inspecting
the land to ascertain who was in possession," in
spite of the United States Supreme Court's
directions in Mullane v. Cent. Hanover Bank
& Trust Co., 339 U.S. 306, 317 (1950) that
there is "no requirement of ëimpracticable and
extended searches' to locate those beneficiaries
whose interests were remote." Rael, 876 P.2d
at 1234. The dissent cited other Court precedent
for the proposition that, "One is not required to
undertake ëextraordinary efforts to discover
the identity and whereabouts of a
[claimant] whose identity is not in the
public record.'" Id. at 1234 (quoting
Mennonite Bd. of Missions v. Adams, 462 U.S.
791, 799 n.4 (1983)). Further, the dissent posited
that even if the majority's standard was correct,
the determination of whether Taylor exercised
reasonable diligence was a question of law for the
court, not an issue of fact that required remand to
the trial court. Id. at 1235. The
majority remanded the case to the trial court for
the purpose of determining whether the claimants
were readily ascertainable persons who had an
interest in the property and who had, thus, been
entitled to personal service of notice of the
Torrens action. To the extent the plaintiffs were
such readily ascertainable persons with an
identifiable interest, the majority held that they
had been denied due process and, as to them, the
Torrens action could not stand. On
remand, the trial court bifurcated the subsequent
proceedings, first addressing the notice issues.
The plaintiffs claimed an interest in the property
as landowners in Costilla County, who were not
named and personally served in the 1960 Torrens
action, but whose names were readily ascertainable
in the records of the Assessor of Costilla County.
The defendant claimed that he had exercised
reasonable diligence in identifying the persons
claiming an interest in his property under the
Beaubien document. Specifically, he offered
evidence that he obtained an abstract of title that
identified all persons who had claimed any interest
of record in the property and that he named and
served those individuals. Second, he offered
evidence that he undertook an inspection of the
property and named and served all individuals who
were occupying or using the land. The real issue of
contention in this phase of the trial court
proceeding was: could Taylor reasonably rely upon
the real property records maintained by the Clerk
and Recorder of Costilla County for the purpose of
identifying individuals with an asserted interest
in the property? The trial court agreed with
defendant and his real estate experts that such
reliance was reasonable and sufficient.
Specifically, the court noted that the Assessor's
records could serve to provide addresses for
otherwise identified individuals, but were in no
sense indices of title. The court then found that
the claimants were not identified either in
Taylor's abstract of title or the real property
records, and therefore were only entitled to
personal service if they had an identifiable
interest in the land by their occupancy of the
land. Eliminating all other parties, and refusing
to certify a class action, the court found only
eight potential claimants who had a readily
ascertainable interest and who had not been
personally served with notice. At a
later point in time, the court moved to the
proceeding on the merits. In that proceeding, the
court refused to permit the claimants to assert
rights based on prescription, finding that the
claimants had added a claim for prescriptive rights
at a very late point in the litigation and should
therefore not be allowed to pursue it. The court
also found that although four of the claimants were
barred from asserting rights to the mountain tract
because they or their predecessors were named in
the Torrens action, those same claimants had
corresponding identifiable rights to the Salazar
estate and had not been personally named and served
in the quiet title action. Another claimant was
eliminated because he acquired his property many
years after the Torrens action. The court did
uphold the rights of two individuals to use roads
on the Taylor estate necessary to access their
adjudicated water rights. For the remaining
parties, the court considered whether the Beaubien
document legally or factually established rights of
use. The court found that the document did not
pertain to the lands of the mountain tract or the
Salazar estate. Further, the court found that the
Beaubien document was merely a writing of
regulations of the earlier territory, rather than a
document of conveyance, hence no rights were ever
conveyed. Thus with the exception of access rights
for the two individuals with separate water rights,
the court dismissed all claims with
prejudice. The
court of appeals affirmed and this court granted
certiorari again. This court reversed the
substantive rulings of the trial court, holding
that even though the Beaubien document did not
expressly grant any rights, the claimants acquired
rights through prescription, estoppel and prior
use. I dissented from that conclusion; however, it
is now the law of the State and it is from that
junction that the present opinions, both the
majority and this dissent, flow. Today, the court
reverses the trial court's holdings regarding
sufficiency of notice. I suggest that, even given
the majority's earlier conclusions as to the rights
established by the Beaubien document, the trial
court's rulings on Taylor's due diligence search
and inquiry should stand. I first
note an inconsistency between this court's 1994
opinion in Rael and the present opinion. The
majority here determines, as a matter of law, that
all landowners in Costilla County were entitled to
notice of the Torrens Action. In Rael, the
court specifically rejected any such conclusion,
and rather carved out a question of fact and
returned that question of fact to the trial court.
The trial court then reached principled findings,
grounded in law and evidence, regarding the
identity of the various individuals whose interests
were readily ascertainable. The majority court
reverses those findings, now holding as a matter of
law that all landowners in the County had readily
ascertainable interests. If the court had so
intended, a remand to the trial court in 1994 would
not have been necessary. Accordingly, I read the
majority opinion as contravening our earlier
opinion in Rael. More
particularly, I take issue with the majority's
conclusion that, as a matter of law, every
individual landowner in Costilla County was a
potential holder of implied or adverse rights in
the Taylor Ranch. Such a broad-brush determination
belies all requirements associated with the
acquisition of such rights ñ which are,
necessarily, related to the use a particular
claimant may have made of the property. Certainly,
an inspection of the tax records of the assessor's
office could not have revealed which landowners in
the county had gained rights through
prescription. The
majority decision does acknowledge, rightfully in
my view, that those individuals who recorded an
interest, or who were using the property and were
therefore personally named and served in the
Torrens and quiet title actions are now barred from
asserting their interests because of the operation
of res judicata. Those individuals were clearly the
ones with the most palpable, readily ascertainable
interests. Nonetheless, the majority revives the
interests of landowners in the county whose rights
were so attenuated and ephemeral as to avoid ready
identification by Taylor or by the court-appointed
title examiner. Many of those individuals to this
day remain nameless, unidentified by any party, and
yet they may now, thirty years later, finally
assert a claim. The simple point is that for these
individuals to become legitimate parties to a
Torrens action, all they had to do was file a
document recording their asserted interest. That is
the sanctioned, statutory process in this state
designed to protect certainty of title. The
individuals here who did so were precluded because
they had no legitimate interest, and various courts
so held. I suggest that it is unreasonable now to
hold that Taylor was required to name and serve
every landowner in Costilla County in order to
secure title to his property. I also note, in
passing, that had he done so, his title would now
be secure because none of those individuals could
have asserted better rights than the ones who did
litigate their claims. Because I conclude that
reasonable diligence does not require a landowner
to serve all the parties in a county in case they
might at some point have acquired rights by
prescription or implication, and because I feel
that this decision defeats the purpose of the
Torrens Act by rendering Torrens decrees
inconclusive, I respectfully dissent. Over
fifty years ago, the Colorado Bar Association (CBA)
adopted title standards. 2 Cathy Stricklin Krendl,
Colorado Methods of Practice ß 62.33, at
148 (1998). These standards represent CBA's
assessment of the manner in which experienced title
examiners in the state of Colorado consider certain
issues affecting the marketability of title.
Id. Specific to our purposes, the title
standards set forth the methods that a competent
attorney should undertake to investigate
marketability of a title so as to be able to issue
an opinion to that effect. Krendl, supra
ß 62.33, at 12-13 (Supp. 2002).
Plaintiffs in this case argue, and the majority
agreed, that a reasonable search of the title of
Taylor Ranch would have included a search of the
tax records of the county. The Colorado Real Estate
Title Standards do not assign any such
responsibility under any circumstances. According
to section 1.1.2 of the standards, an examining
attorney must search "for the recorded documents
which affect title to such real property . . .
either from a personal examination by the examining
attorney of the real property records of the
county in which such real property is located or
from an examination of an abstract of title which
purports to contain such recorded documents."
Attorneys Title Guar. Fund, Inc., Colorado Real
Estate Title Standards 1.1.2 (1997) (emphasis
added) (internal citations omitted). Although
circumstances may make it necessary for the
examiner to inquire further, "more frequently, such
matters are excepted from the scope of the
examining attorney's title opinion" as outside of
such circumstances, generally, "the examining
attorney has no obligation to question the accuracy
or completeness of the real property records of the
county or the abstract of title." Id.
at 1.1.5 (Scope of search of matters not of
record). When
such circumstances arise: Id.
at 1.1.5. These
materials all relate specifically to the land at
issue and to real property in general. They would
all contain information as to the specific rights
and statutes affecting the title to the property.
By contrast, a search of tax records offers no
information as to the burdens upon a piece of
property, which may have arisen by
prescription. Colorado
courts have recognized that "[d]ocuments
outside the chain of title provide no notice unless
a possible irregularity appears in the record which
indicates the existence of some outside interest by
which the title may be affected." Collins v.
Scott, 943 P.2d 20, 22 (Colo. App. 1996).
Constructive notice is given when a document is
recorded "in the office of the appropriate clerk
and recorder." Id. However, Colorado courts
have declined "to extend the presumption of
constructive notice to information contained in"
outside materials such as trade name affidavits.
Nile Valley Fed. S & L v. Sec. Title Guar.
Corp., 813 P.2d 849, 852 (Colo. App.
1991). The
Beaubien document was outside the chain of title
and had never been recorded in the title so as to
create a cloud on the Taylor title. Even if we
assume that Taylor had a duty of inquiry notice
arising out of that document, the duties attendant
upon inquiry notice have never included those now
prescribed by the majority. This court suggested in
Bray v. Germain Inv. Co., 98 P.2d 993, 995
(Colo. 1940) that publication notice is not
sufficient when an examiner may, by the exercise of
reasonable diligence, "discover the identity of a
party interested in the res." However, the court in
that case considered the rights of individuals
whose identities and addresses were made known to
the publishing party by the interested party's
attorneys, prior to the publication. Id. at
994. The court noted that until their identities
were made known, "reasonable diligence was
exercised" and publication notice would have
sufficed. Id. at 995. The
Federal District Court in 1965 reviewed the
sufficiency of notice in the Torrens action,
requiring Taylor to name and serve a number of
additional parties. That determination was upheld.
Again, a trial court has reviewed in detail what
Taylor did, what he knew or should have known at
the time, and has upheld the procedure he
undertook, except as to a few claimants. This issue
has been fully resolved, in accordance with
prevailing law and title examination requirements.
It should be allowed some postponed
finality. IV.
Torrens Title Registration: the Purpose and
Procedure Title
searches are necessitated by the land title
recording system used in almost every state today.
The recording system traces its roots back to the
earliest conveyances of real property during the
colonial period. This system makes no promises to
reward a diligent search, but merely invites the
purchaser to inspect an index organized by the
names of those parties who have recorded their
interest in real estate and allows the searcher to
gamble on that basis as to the certainty of his
title. Roger A. Cunningham et al., The Law of
Property ß 11.15, at 827
(1984). In
contrast, the Torrens system of registration of
title was designed to convey absolute certainty of
title. Developed in 1858 by Sir Robert Torrens, the
system differs from land title recording systems
both in nature and result. 14 Richard R. Powell,
Powell on Real Property
ß 83.01[2] (rev. ed. 1999).
Tangibly, under a recording system, the records
maintained merely include evidence of the
instruments of conveyance by which a title was
transferred. However, under the registration
system, what is registered is the actual title to
the land. 42 A.L.R.2d 1388 ß 1 (1955).
After the title is registered, a transfer of title
may only take place when the owner voluntarily
submits his copy of the registration to the
registrar, who then issues a new certificate.
Id. Academics
bemoan the uncertainty of title conveyed under the
recording system, and champion the Torrens system
as offering a sensible modern solution to many
problems. Calls for conveyancing reform focus on
three major areas of concern: 1) inadequate
security for land titles, 2) speed in determination
of title status, and 3) cost of assuring title.
John E. Cribbet & Corwin W. Johnson, Principles
of the Law of Property 347-48 (3rd ed. 1989). All
of these concerns are readily answered by a
registration system. The
purpose of Torrens registration is to "make the
title to property more certain and readily
ascertainable [to] third parties." Powell,
supra, ß 83.02[1]. Unlike
the traditional recording system, under a
registration system it is not necessary for
purchasers "to search, examine and analyze the
evidence of title." Id. The purchaser can
readily find the exact status of the title.
Id. "No historical search of the title is
ever necessary or relevant." Cunningham,
supra, ß 11.15, at 829. "The
title examination process is vastly simplified and
duplication of searches as successive transfers of
the same land occur is eliminated." Id.
Further, it is efficient and cost effective - in
most cases a competent attorney can verify a
registered title in about an hour. Cribbet,
supra, at 351. Most
importantly, title registration affords maximum
security of title. Id. at 352. "So long as
the owner takes proper care of his
duplicate, it is an absolute safeguard
against loss of title by reason of a forged deed."
R.G. Patton, Priorities, Recording,
Registration, in 4 American Law of
Property 521, ß 17.41 (A. James Casner
ed., 1952). The conclusiveness of the title is "of
vital interest to the holder, to mortgagees who
loan him money, and to anyone who is about to
purchase the title from him." Id. at
ß 17.47. The
purpose of Torrens registration systems is thus
accurately characterized as follows: State
ex rel. Draper v. Wilder, 62 N.E.2d 156, 158
(Ohio 1945) (quoting 8 Thompson on Real Property,
Perm. Ed., 258, ß 4415). Registration
statutes are voluntary rather than mandatory, and
current owners have little motivation to undergo
the expense of guaranteeing their title via
registration unless the courts then uphold such
registration decrees. It is easy to appreciate that
the degree of effectiveness of title registration
depends fundamentally upon "the degree to which a
certificate of title . . . is
conclusive and able to withstand challenge as to
the ownership of a specific parcel of real estate."
Powell, supra,
ß 83.02[3][a]. Colorado
has adopted a system of voluntary registration
under the Torrens Registration Act. When a court
enters a decree of registration, that decree binds
the land and quiets the title thereto, and is
"forever binding and conclusive upon all persons."
ß 38-36-130, 5 C.R.S. (2002). The
registration decree may not be attacked unless an
individual holding an interest in or lien upon the
land, who was not actually served with process or
notified of the application filing, and who
in fact had no actual notice or information
of the filing, petitions to reopen the registration
within 90 days of its entry and before an innocent
purchaser for value has acquired an interest.
ß 38-36-131. All other complaints
against the decree must be pursued as actions in
tort or indemnity. Id. Thus
after 90 days, no person may attempt to recover any
interest in registered land.
ß 38-36-132. The recipient of the
registration decree and subsequent purchasers may
rest confident in their absolute title. No adverse
party may ever attack the estate; the property is
protected even against adverse possession.
ß 3-36-137 ("No title to registered land
in derogation of that of the registered owner shall
ever be acquired by prescription or adverse
possession."). The decree is an agreement forever
running with the land, and all dealings with the
land are controlled by the statutes of the
registration act, unless the owner formally removes
the land from registration.
ß 38-36-136. This
court has long upheld the validity of Torrens
registration decrees against attack. As early as
People ex rel. Smith v. Crissman, 92 P. 949
(Colo. 1907), this court upheld the constitutional
validity of Torrens decrees against complaints of
due process violation. A short time later, this
court protected a creditor's reliance on a Torrens
decree against a subsequent possessor of the
property with a valid recorded interest.
Sterling Nat'l Bank v. Fischer, 226 P. 146
(Colo. 1924). The court observed, "the purpose of
the [Torrens] act was to escape from the
old rules governing the transfer of real estate."
Id. at 147. Other
states have recognized the important role Torrens
registration plays in solidifying title to real
property. Comparing registration to recording, the
Supreme Court of Minnesota observed that under a
recording system: Hersh
Props., LLC v. McDonald's Corp., 588 N.W.2d
728, 732-33 (Minn. 1999) (citing Paul E. Basye,
Trends and ProgressóThe Marketable Title
Acts, 47 Iowa L. Rev. 261, 261 (1962)).
Comparatively, the court recognized that
Minnesota's registration system "operates to vest
conclusive title in the holder of a certificate of
title issued pursuant to judicial proceedings."
Id. at 733. It is the "conclusive nature of
certificates of title [which] allows real
property owners to rely on the certificate of title
while disregarding most interests not evidenced on
the current certificate of title." Id. at
734. Similarly,
in Massachusetts, the Supreme Court recognized that
Torrens systems are "deemed advantageous since
ë[t]he difficulty with the
[recording] system is that no one can be
absolutely certain whether he is buying a good
title or a bad one . . . . The great purpose of the
Torrens System is to rid land titles of this peril,
for with its disappearance disappears all the
expense, trouble and delay that attend running the
title back through previous transfers.'" Kozdras
v. Land/Vest Props., Inc., 413 N.E.2d 1105,
1111 (Mass. 1980) (quoting Hurd, Exposition of
the Torrens System of Registration of Title,
in The Torrens System of Registration and
Transfer of the Title to Real Estate 88-89 (Yeakle
ed. 1894)). The
Supreme Court of North Carolina thus accurately
concluded that the just purpose of the Torrens
system is: State
v. Johnson, 179 S.E.2d 371 (N.C. 1971) (quoting
Frederick B. McCall, The Torrens
SystemóAfter Thirty-Five Years,
10 N.C. L. Rev. 329
(1932)). Of
course, Colorado's Torrens Registration Act must
comply with the due process requirements of the
United States Constitution. Specifically, the
Torrens system may not deprive any individual of
his interest in land without providing him due
notice of the registration proceedings, that he may
appear to assert his
rights.13 Under
Mullane v. Cent. Hanover Bank & Trust
Co., 339 U.S. 306 (1950), due process requires
that any interested parties must be given notice of
the proceedings that is reasonably calculated,
under the circumstances, to apprise them of the
action and give them an opportunity to present
their objections. Id. at 314. While a mere
gesture toward supplying notice is insufficient,
personal service is not always required. Id.
at 314-15. The
focus is whether the means adopted by the
petitioner are those that a reasonable person who
truly desires to reach any absent parties would use
to do so. Id. at 315. Thus the notice must
"reasonably convey the required information" and
afford a reasonable time for parties to appear.
Id. at 314. Always the "practicalities and
peculiarities of the case" weigh into the
consideration of the appropriateness of the notice.
Id. A state may dispense with certain
notice to beneficiaries "whose interests or
whereabouts could not with due diligence be
ascertained," "whose interests are either
conjectural or future," or who "do not in the due
course of business come to knowledge" even when
they could be discovered upon investigation.
Id. at 317. While
the Court noted in Mullane that, where the
names and post office addresses of affected parties
are "at hand," notice by mail is required, the
court was not referring to any and all parties who
may be unearthed through investigation. Id.
at 318-19. Rather the court referenced those
parties whose identities, as in that case, were "on
[the] books" of the petitioning party
himself and thus gave him ready actual knowledge of
the parties' in interest identities and
whereabouts. Id. at 318. Importantly,
of course, I repeat the statutory mandate that any
attack on the Torrens decree under Colorado law
must be initiated within 90 days of entry of the
decree. All other remedies are damages remedies.
Hence, even if the Torrens decree here is in some
way defective, the claimants' only remedy is money
damages, and not rights to the property. Jack
Taylor, and the title examiner appointed to examine
the interests of competing parties in the 1960
Torrens action, exercised due diligence to identify
and notify all reasonably ascertainable parties of
the Torrens proceedings. Following standard
Colorado procedures, they examined the title to the
estate, tracing the record of title through the
real estate records of the clerk and recorder's
office and inspecting the land for unidentified
occupants. In addition, the examiner made requests
of two parties claiming to represent further
unidentified individuals with interests. Finally,
Taylor fenced in the property to give actual notice
to any parties attempting to use the property, and
published notice in the county newspaper for six
weeks. These methods exceeded the necessary
procedures and served to support the entry of a
valid Torrens decree. Subsequent purchasers were
entitled to rely upon the certificate of
registration to protect their acquisition of the
estates. Alternatively, any errors justifying
relief must, according to statute, be brought as
actions for damages, as title to the land
indisputably rests in the hands of those in whom
title was quieted by the Torrens decree or
purchasers who relied upon that decree. I
find no basis for assessment of prospective costs
against Taylor under C.R.C.P. 54(d). "Costs" under
the Rule reflect expenditures already made by a
prevailing party, not expenditures occasioned by a
remand order. The discretion to award future costs
is committed to the trial court. Taylor and his
successors in interest have made every effort to
follow statutory and court-ordered procedures,
presumably at great expense. Now to be ordered to
pay costs of serving unidentified and uncounted
claimants operates as an unwarranted sanction.
Lastly, it is the plaintiffs who seek to quiet
title as against a registered Torrens decree.
Irrespective of the legal merit of their claim,
they continue to bear the burden of going forward
should they so choose. Taylor is the defendant
here. This
case has had a tortuous history, of almost
Dickensian proportion. Yet, despite the convoluted
procedural background, clear rules of law apply and
those clear rules operate to preclude these
claimants from asserting any interest in the Taylor
Ranch property. Counterbalanced against those clear
rules of law are individuals who represent part of
the history and heart of Colorado. However,
acceding to their claims is truly a departure from
settled principles of property law, finality of
judgment, and certainty of title. I respectfully
dissent, and would affirm the trial court's rulings
regarding the sufficiency of notice and operation
of res judicata. I am
authorized to state that JUSTICE RICE joins in this
dissent. 1
As referenced in our decision in Lobato v.
Taylor, 2002 WL 1360432 *1, *2 (Colo. June 24,
2002), the Taylor Ranch includes those lands
known as the Salazar estate, purchased by Jack
Taylor in 1973. As such, our decision in the
present case also applies to the Salazar
estate. 2
We have previously expressed our preference for the
term "claim preclusion" over the term "res
judicata." Farmers High Line Canal &
Reservoir Co. v. City of Golden, 975 P.2d 189,
196 n.11 (Colo. 1999). As the United States Supreme
Court has noted, the use of the phrase res judicata
may lead to confusion because it has been used to
refer to both claim and issue preclusion.
See Migra v. Warren City Sch. Dist. Bd.
Of Educ., 465 U.S. 75, 77 n.1 (1984). In this
opinion, we use the term res judicata to be
consistent with our 3
On appeal, the petitioners limit their claims to
landowners in an area they define as the Culebra
River Drainage, located in the southern part of
Costilla County, Colorado. At trial, the
petitioners identified this specific area of land
in conjunction with their efforts to certify a
class. The trial court never made any factual
findings regarding this proposed area and whether
it accurately represented the entire scope of
Beaubien's grant. Subsequently, the trial court
denied their motion for class certification.
Because no factual findings were made regarding the
proposed boundaries, we do not rely on them. Any
individual able to meet the requirements set forth
in this opinion will be able to claim access rights
to the Taylor Ranch. 4
Although lauded by legal scholars as a promising
alternative to traditional title registration
methods, practitioners have been less than
enthusiastic in adopting the Torrens system. In
fact, Torrens actions are so rare in Colorado that
none of the three real estate experts testifying at
trial had ever participated in a Torrens
proceeding. See also Richard W.
Laugesen, The Torrens Title System in
Colorado, 39 Dicta 40, 43 (1962). 5
During the merits phase of the trial court
proceeding, the court specifically found that the
seven plaintiffs could trace their titles to the
time of Gilpin's ownership of the Taylor Ranch.
Thus, these individuals need not prove their claims
to the Taylor Ranch. 5b
We emphasize that the landowners need not
prove a marketable chain of title for their
property. As stated in the text, the landowners
must use the best available evidence to prove their
lands are benefited by the easements Beaubien
granted. From the record before us, it appears that
the best evidence of benefited properties conveyed
by Beaubien is the official 1894 Costilla County
survey and inventory of lands held by individuals
along the Culebra, Vallejos, and San Francisco
Creeks. Of course, we do not foreclose the
landowners from presenting other evidence to prove
their settlement claims.
6
We recognize that this standard may be
over-inclusive, but considering the grave
depravation of rights suffered by the landowners
over the past 40 years, we are unwilling to create
a standard which may again unlawfully deny some
landowners their guaranteed access
rights. 7
As an alternative to personal service, the
Mullane Court recognized that service could
be adequately undertaken via ordinary mail.
Id. at 318. 8
The trial court found that the Jenkins translation
was a true and accurate translation of the Beaubien
document from the Spanish to English
language. 9
Even if Taylor was made aware of these claimants
only after his Torrens application, he was still
responsible for providing them with adequate
notice. See Bray v. Germain Inv. Co.,
105 Colo. 403, 408, 98 P.2d 993, 995,
(1940). 10
The trial court heard testimony from three
qualified real estate experts, Skillern, Don
Lesher, and Willis Carpenter. These experts
provided testimony analyzing the Torrens Act and
this court's decision in Rael, to provide an
opinion on what steps a reasonably prudent
applicant would take to exercise reasonable
diligence in naming and ascertaining all persons
claiming an interest in the Taylor Ranch. The trial
court found Carpenter's testimony most credible and
from this testimony concluded that the only
relevant public record that required search and
examination was the real estate records of the
Clerk and Recorder. The trial court's credibility
finding is not a bar to us. These were not fact
witnesses but rather lawyers offering their legal
opinions. Carpenter's testimony was based on his
opinion that the Beaubien document did not create
or convey any rights--a position we have rejected
as a matter of law. He conceded that the assessor's
records would be the easiest way to identify
landowners. 11
At trial, Dr. Robert A. Bardwell, a statistics
expert, testified that the 1959 Costilla County tax
rolls listed 1,913 landowners in the County. He
further testified that, at most, 273 of these
landowners were named in Taylor's Torrens
action. 11b
Due to the large number of potential
claimants, the trial court should revisit the issue
of class certification.
11c
The majority requires that prospective
claimants document that they currently own a parcel
of land, a portion or all of which was settled
during the Gilpin era. Whether or not the occupants
of the parcel exercised the rights claimed on
Taylor Ranch for the one hundred and fifty years
since that time, the majority offers those
occupants a legal interest in Taylor Ranch. By
bypassing a requirement that the claimant trace his
or her title back to an owner during the Gilpin
era, I fear that the majority has created a
circumstance in which these rights may come as a
windfall to individuals who have no history in the
area, no tie to people who actually exercised the
rights and no legal entitlement. 12
For federal courts, the United States Supreme
Court's decision in Moitie has virtually
extinguished a general fairness exception to res
judicata. Wright, Miller, & and Cooper,
Federal Practice and Procedure: Jurisdiction
2d ß 4415 at 379. 13
I do not find Jacobucci v. Dist. Court, 541
P.2d 667 (Colo. 1975) instructive on this issue. In
Jacobucci, this court ruled as a matter of
law that readily ascertainable possessors of water
rights could not collectively be served notice
through a mutual ditch company, which itself had no
actual ownership rights in or rights to use the
water. These
opinions are not final. They may be modified,
changed or withdrawn in accordance with Rules 40
and 49 of the Colorado Appellate Rules. Changes to
or modifications of these opinions resulting from
any action taken by the Court of Appeals or the
Supreme Court are not incorporated here.
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