Utah Court of Appeals
The Utah Court of Appeals ruled that a property owner was not barred from challenging a stop-work notice that was previously the subject of court action litigated only between the County and a third-party neighbor, whereas the property owner had not been joined as a party to that case.
Kodiak America LLC purchased land in an agricultural subdivision, then sought a grading permit from Summit County to install a motocross track. The County granted the permit, but then issued a “Stop Work Notice” after receiving complaints from neighbors. Kodiak appealed the notice to Summit County Council, who determined that the County was estopped from requiring Kodiak to restore the land after they issued the grading permit. Owners of a neighboring parcel petitioned the district court to review the Council’s decision (the “Johnson case”), naming the County as a respondent but not Kodiak. 90 days after the court concluded that the County is not estopped from prohibiting use of the motocross course, Kodiak moved to intervene in the Johnson case. The court denied the motion, concluding that it was untimely and that the County had adequately represented Kodiak’s interest. Because the Johnson case reinstated the “Stop Work Notice” and “Final Land Use Determination,” Kodiak then sought to challenge the notice, but an administrative law judge’s concluded that (1) the outcome of the Johnson case was final as to Kodiak’s challenge, and (2) Kodiak and the County were in privity. The district court reversed, finding that the parties had different legal interests and therefore were not in privity. The County appealed.
The Court of Appeals upheld the district court’s decision, concluding that Kodiak and the County were not in privity with respect to the Johnson case. In determining whether or not parties are in privity for purposes of res judicata (claim or issue preclusion), the Court engaged in two distinct inquiries: first, whether the two parties represent the same legal right, and second, whether a would-be intervenor’s interest is adequately represented by existing parties. The Court differentiated between privity and adequate representation, in that privity requires the parties to have a relationship that entails the same legal right or interest, whereas adequate representation requires both parties to share only an interest in the same outcome, regardless of legal rights. There was adequacy of representation between the parties in the Johnson case, but because “Kodiak and the County clearly were not defending the same legal right,” the district court did not err in holding that the two parties were not in privity and that res judicata did not bar Kodiak’s present litigation. Kodiak’s legal interest was that of a property owner wishing to use its land in a certain manner, while the County’s legal interest was limited to defending their decision. The Court held that the district court’s ruling does not reverse the Johnson decision; rather, it upholds it as correct. The purpose of the current decision is to declare that Kodiak and the County had separate legal interests in that case, and therefore Kodiak is not barred by res judicata to dispute it.