Petersen v. City

784 F.Supp.2d 1234

Willis Lauritz PETERSEN, Jr., Leslee P. Christensen, Allan D. Petersen, Kristine Petersen Smith, and Dean B. Petersen, as trustees of the Margarett Park Petersen Family Living Trust, Plaintiffs,

v.RIVERTON CITY, a Utah municipality, Defendant.

Case No. 2:08–CV–664 SA.

United States District Court, D. Utah, Central Division.

March 24, 2011.

Dale F. Gardiner, Sam Meziani, Scott M. Lilja, Nicole Miller Deforge, Van Cott Bagley Cornwall & McCarthy, Salt Lake City, UT, for Plaintiffs.

Jody K. Burnett, Robert C. Keller, Williams & Hunt, Salt Lake City, UT, for Defendant.

MEMORANDUM DECISION AND ORDER GRANTING MOTION FOR SUMMARY JUDGMENT

SAMUEL ALBA, United States Magistrate Judge.

Before the court is a motion for summary judgment filed by Defendant Riverton City. (Docs. 25, 55.) Riverton City argues that the claims brought in this action by Plaintiffs Willis Lauritz Petersen, Jr., Leslee P. Christensen, Allan D. Petersen, Kristine Petersen Smith, and Dean B. Petersen, as trustees of the Margarett Park Petersen Family Living Trust (collectively “the Petersens”) are barred by issue preclusion. Having carefully considered the parties' memoranda and oral arguments, the court grants Riverton City's motion and orders that this case be dismissed.

BACKGROUND

This action arises from the Petersens' dissatisfaction with Riverton City's decision not to change the zoning designation on a 20.84 acre parcel of undeveloped property (“the property”) owned by the Petersens. The Petersens had entered into a conditional agreement with developer D.R. Horton to buy the property for $5.5 million; however, the deal did not occur because D.R. Horton terminated its purchase contract with the Petersens. The Petersens allege that Riverton City's denial of D.R. Horton's application to rezone the property to R–3 zoning resulted in the contract's termination.

In response to Riverton City's denial of the rezoning request, the Petersens filed two actions. First, they filed a petition for review pursuant to section 10–9a–801 of the Utah Code (“state case”). The Petersens' state case was unsuccessful. Utah State Judge Anthony Quinn granted Riverton City's motion for summary judgment, and the Utah Supreme Court unanimously upheld Judge Quinn's decision following the Petersens' appeal. See Petersen v. Riverton City, 2010 UT 58, ¶¶ 5, 30, 243 P.3d 1261.

The Petersens also filed this federal civil rights action, alleging takings claims under the Utah and Federal Constitutions, as well as due process claims, an equal protection claim, and a state tort claim for interference with existing and prospective economic relations. This action was initially filed in Utah State Court, then Riverton City removed it to this court and the case was assigned to United States Magistrate Judge Samuel Alba.¹ (Docs. 1, 2.) When Riverton City removed this action to this court, it filed a motion to dismiss (Doc. 3), which the court denied on March 5, 2009, 2009 WL 564392 (Doc. 19).

Riverton City then filed a motion for summary judgment on April 15, 2009. (Doc. 25.) The Petersens filed a motion for leave to amend their complaint on April 27, 2009 (Doc. 29), followed by a Rule 56(f) motion on May 6, 2009 (Doc. 32). At a July 22, 2009 hearing, the court granted the Petersens' two motions. (Docs. 44–46.) The Petersens filed their amended complaint on August 4, 2009. (Doc. 47.)

After the court allowed extensive time for discovery to be conducted pursuant to the order granting the Petersens' Rule 56(f) motion, on December 22, 2010, Riverton City filed a renewed motion for summary judgment, which is now before the court. (Doc. 55.) The Petersens filed their opposing memorandum on January 31, 2011 (Doc. 61), and Riverton City filed its reply memorandum on February 18, 2011 (Doc. 62). The parties presented oral arguments to the court on March 8, 2011. (Doc. 67.)

ANALYSIS

Summary judgment is appropriate when “the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). In its summary judgment motion, Riverton City argues that it is entitled to summary judgment because four of the Petersens' claims are barred by issue preclusion and the other one is barred by governmental immunity.

I. Issue Preclusion

The court first addresses Riverton City's issue preclusion argument. Section 1738 of the United States Code “requires federal courts to give preclusive effect to any state-court judgment that would have preclusive effect under the laws of the State in which the judgment was rendered.” San Remo Hotel, L.P. v. City and County of San Francisco, 545 U.S. 323, 335, 125 S.Ct. 2491, 162 L.Ed.2d 315 (2005); see also id., at 347–48, 125 S.Ct. 2491. “Federal courts ... are not free to disregard 28 U.S.C. § 1738 simply to guarantee that all takings plaintiffs can have their day in federal court.” Id. at 338, 125 S.Ct. 2491.

Under Utah law, issue preclusion—also known as collateral estoppel—bars parties from relitigating facts and issues in a second suit that were fully litigated in the first suit if the following four elements are met:

(i) the party against whom issue preclusion is asserted must have been a party to or in privity with a party to the prior adjudication; (ii) the issue decided in the prior adjudication must be identical to the one presented in the instant action, (iii) the issue in the first action must have been completely, fully, and fairly litigated; and (iv) the first suit must have resulted in a final judgment on the merits.

Oman v. Davis Sch. Dist., 2008 UT 70, ¶ 29, 194 P.3d 956 (citation omitted); see also id., ¶ 31.

“[I]ssue preclusion ‘prevents the relitigation of issues that have been once litigated and determined in another action even though the claims for relief in the two actions may be different.’ ” Id., ¶ 31 (citation omitted) (emphasis in original). “When an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” Restatement (Second) of Judgments § 27 (1982) (emphasis added) (cited with approval and quoted in parenthetical in Oman, 2008 UT 70, at ¶ 31). Thus, “the question is whether the [Utah courts in the state action] actually decided an issue of fact or law that was necessary to its judgment,” San Remo Hotel, 545 U.S. at 342, 125 S.Ct. 2491, not whether the Petersens brought the same claims in the state action as they are bringing in this federal action.

A. Identical Parties

Turning to this case and the first element of issue preclusion, there is no dispute that the parties involved in this case are the same parties that were involved in the previous state litigation. Therefore, the first element of issue preclusion is met.

B. Identical Issues

Second, for issue preclusion to apply, the issues decided in the previous case must be identical to the ones presented in this case. The court concludes that this second element of issue preclusion is met as to four of the five claims brought by the Petersens in their amended complaint.

Four of the five claims brought by the Petersens in this action present two issues which are identical to issues presented in the Petersens' state case: (1) whether the Petersens had any constitutionally protectable property interest under state law and (2) whether there was a reasonable basis for Riverton City's denial of the rezoning application. The state courts' findings and conclusions regarding these two issues dispose of four (of the five) claims brought by the Petersens in their amended complaint, which alleges that Riverton City's denial of their application for rezoning: (1) constituted a regulatory taking under the United States and Utah Constitutions (Doc. 47, ¶¶ 36–41); (2) violated substantive due process because it was arbitrary, unreasonable, and irrational ( id., ¶¶ 42–51); (3) deprived them of procedural due process ( id., ¶¶ 67–73); and (4) deprived them of their equal protection rights ( id., ¶¶ 60–66).²

The Petersens argue that “[t]he legal and factual issues presented in this federal civil rights case are not ‘identical’ to those considered by the Utah Supreme Court in reviewing the Petersen Family's petition for review [because] [t]he standard and scope of review ... is not the same.” (Doc. 61, at 23.) Nevertheless, as discussed in more detail below, the Petersens have not shown that material differences in the standard and scope of review exist.

1. Regulatory Takings Claim

The Petersens' complaint alleges that “[t]he denial of the [application to rezone the property] constitute[d] a regulatory taking.” (Doc. 47, ¶¶ 37–40.) For their regulatory takings claim to succeed, the Petersens must establish that they had “a protectable property interest” that was sufficiently adversely affected by Riverton City's decision not to rezone their property to constitute a constitutional taking. E.SPIRE Communications, Inc. v. New Mexico Public Regulation Comm'n, 392 F.3d 1204, 1210 (10th Cir.2004); see also Utah Public Emps. Ass'n v. State, 2006 UT 9, ¶ 27, 131 P.3d 208 (“A claimant must possess some protectable interest in property before [being] entitled to recover[y] under this [takings] provision.”)

This issue—whether the Petersens had a protectable property interest in Riverton City's denial of the rezoning application—is critical to the Petersens' regulatory takings claim, and was addressed by the Utah Supreme Court in the state case. In the state case, the Utah Supreme Court determined that the Riverton City Council's decision not to rezone the property took nothing from the Petersens because the decision left the property as it was, and that the Petersens did not have a constitutionally protected property interest in a favorable zoning decision that they allege would have increased the property's ...