Lobato v. Taylor - 70 P.3d 1152 (Colo. 2003)

Rule:

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. This determination of reasonable diligence is an objective test. The appellate court looks 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. In reference to Torrens Act, Colo. Rev. Stat. § 38-36-101 et seq., 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. Furthermore, a search for reasonably ascertainable interested parties need not extend beyond what would be discoverable by diligent inquiry into the public records.

Facts:

The petitioners, landowners in the Culebra River Drainage region of Costilla County, claimed access rights to the Taylor Ranch. The 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 Action that he filed as a diversity action in the federal district court in Denver. Taylor’s ownership was confirmed in 1967. In 1981, petitioners 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. The case was remanded to the trial court, and 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 decision. Petitioners petitioned for certiorari. 

Issue:

1. Did the petitioners possess substantive rights in the Taylor Ranch? 
2. Would res judicata bar the claims of the petitioners?  

Answer:

1) Yes. 2) Yes, but only the petitioner landowners who were personally named and served in Taylor’s Torrens action.

Conclusion:

The Court held that the landowners who were able to trace their titles from the time of Gilpin's ownership of the Sangre de Cristo grant or earlier would be granted access. According to the Court, the language of land grant documents and the ranch owner's deed would have provided a reasonable applicant in the owner's position with adequate notice that some county landowners might have some interest in the ranch. The owner knew he was buying land within the Mexican land grant. The landowners were reasonably ascertainable and could have been personally notified rather than served by publication. Thus, under the unique circumstances of the case, the owner 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. Hence, the individuals who should have been personally named and served were not barred from presently bringing such claims. Conversely, the landowners who were personally named and served in Taylor's 1960s Torrens action were barred by res judicata. The Court concluded that applying res judicata served the public policy interest that there be an end to litigation, as well as ensuring that real estate titles were secure and marketable.