WDIS v. Hi-Country Estates (WDIS I)

August 13, 2019

Utah Supreme Court

August 13, 2019

2019 UT 45 (Click for full text) 

***Subsequent history. After remand from this opinion, a subsequent appeal was the subject of an additional opinion by the Utah Supreme Court. Please see WDIS v. Hi-Country Estates (WDIS II), 2022 UT 33

The Utah Supreme Court clarified two prior cases – In re Hoopiiaina Trust  and Bangerter v. Petty – and held that a plaintiff’s quiet title claim is not barred by a statute of limitations if the plaintiff is able to establish a prima facie quiet title case without first receiving some other relief from the court.

In this dispute between homeowners and an HOA, the homeowners (WDIS) brought a claim to quiet title in its properties against the HOA, seeking a judicial declaration that the HOA’s CC&Rs—which had been recorded in the early 1970’s—were void ab initio and did not encumber its properties. The district court dismissed the quiet title claim on statute of limitation grounds, finding that the quiet title claim was not a true quiet title action (which are never time-barred) because it was dependent on a preliminary determination that the HOA’s governing documents were invalid.

WDIS appealed, arguing that its action was not time barred because it is a “true quiet title action” under two theories: (1) that under Bangerter v. Petty, 2009 UT 67, it is a true quiet title action if it is brought by an individual or entity in actual possession of the property under a claim of ownership, or (2) under In re Hoopiiaina Trust, 2006 UT 53, it is a true quiet title action if the party merely requests that the court adjudicate the validity of an opponent’s adverse or hostile claim to property to which the party already holds title.

The Utah Supreme Court reviewed the decisions In re Hoopiiaina Trust and Bangerter, pointing out that over time, lower courts had interpreted the two as if they created two separate quite title exceptions, when in fact both cases gave effect to the same, long-standing rule that a genuine quiet title claim is not time barred. A quiet title claim is one to quiet an existing title against an adverse or hostile claim of another. It is not an action brought to establish title.

A prima facie quiet title case has two elements: (1) “title,” or other valid interest, to the property at issue and (2) a claim of an adverse estate or interest in the property. Statutes of limitations do not bar quiet title claims if the plaintiff establishes a prima facie quiet title case without first receiving some other affirmative relief from the court. WDIS established the two elements of a prima facie quiet title case against the HOA. Although the district court will have to determine whether the HOA’s encumbrances are void or voidable before WDIS prevails on the merits of its claim, the establishment of WDIS’s prima facie case is not dependent on this determination. Accordingly, the quiet title exception to statutes of limitations applies, and WDIS’s quiet title claim is not time barred.