UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

 

KRISTY A. GONZALES; SHAWN A. 

GONZALES; ANARCHY ARTS, LLC, 

 Plaintiffs-Appellants, 

v. 

ARTSPACE AFFORDABLE HOUSING, 

LP; ARTSPACE RUBBER COMPANY, 

LC; EVERGREEN MANAGEMENT 

GROUP, LLC, 

 Defendants-Appellees. 

No. 12-4070 

(D.C. No. 2:09-CV-00465-BCW) 

(D. Utah)

 

ORDER AND JUDGMENT*

 

Before HARTZ, BALDOCK, and GORSUCH, Circuit Judges. 

 

 This is an appeal from an order dismissing the suit on the grounds of res 

judicata. We have jurisdiction under 28 U.S.C. § 1291, and we reverse. 

 

*

 After examining the briefs and appellate record, this panel has determined 

unanimously that oral argument would not materially assist the determination of this 

appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore 

ordered submitted without oral argument. This order and judgment is not binding 

precedent, except under the doctrines of law of the case, res judicata, and collateral 

estoppel. It may be cited, however, for its persuasive value consistent with 

Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. 

FILED 

United States Court of Appeals 

Tenth Circuit 

August 14, 2013

Elisabeth A. Shumaker 

Clerk of Court
- 2 - 

BACKGROUND 

Litigation in this case began in 2008, when Artspace Affordable Housing, LP 

and Artspace Rubber Company (the Landlord) filed a state court unlawful detainer 

action in Utah against Anarchy Arts, LLC (Anarchy) as a result of its default on a 

lease for the premises used to operate a coffee shop. The court later issued an order 

of restitution in favor of the Landlord. The Landlord did allow Anarchy and its 

principals, Kristy A. Gonzales and Shawn A. Gonzales (the Gonzaleses) to remove 

some of their property. The remaining property, however, was placed in storage 

pending public auction. 

 Anarchy filed in the state court action an amended answer and claims against 

the Landlord and Evergreen Management Group, LLC (Evergreen) and Chris 

Montoya for breach of contract, breach of the implied covenant of good faith and fair 

dealing, and misrepresentation. As to the underlying unlawful detainer action, the 

court entered judgment against Anarchy for $43,472, which was followed by entry of 

a writ of execution. The public auction yielded $3,920, which was applied to reduce 

the judgment. 

 Shortly after the public auction, Anarchy and the Gonzaleses filed suit in 

federal court against the Landlord, Evergreen, and Kirk A. Cullimore, the Landlord’s 

lawyer. Their toehold in federal court was a claim under 42 U.S.C. § 1983, in which 

they alleged that the Landlord, Evergreen and Mr. Cullimore “have deprived [them] 

of their property under color of state action without due process of law in violation of 
- 3 - 

their Federal and State Constitutional rights.” Aplt. App. at 20. More particularly, 

they alleged that the Landlord and Evergreen unlawfully seized and sold the 

Gonzales’s personal property as part of the state court proceedings. In addition to the 

§ 1983 claim, they asserted state law claims for conversion, unjust enrichment and 

civil conspiracy.1

 

 In the meantime, back in state court, Anarchy filed a motion to set aside the 

judgment, which was denied. The court also denied Anarchy’s later-filed motion in 

which it argued that the writ of execution had been unlawfully obtained and that the 

auction was conducted in a commercially unreasonable manner. The parties agree 

that Anarchy’s claims in the state court suit against the Landlord, Evergreen and 

Mr. Montoya have not been resolved. 

 The Landlord and Evergreen moved to dismiss the federal suit on the grounds 

of res judicata. Anarchy and the Gonzaleses opposed the motion and filed a motion 

for partial summary judgment on their § 1983 and conversion claims. The magistrate 

judge granted the motion to dismiss.2

 This appeal followed. 

ANALYSIS 

 We review de novo the legal question of whether a claim is barred by res 

judicata. Valley View Angus Ranch, Inc. v. Duke Energy Field Servs., 497 F.3d 1096, 

 

1

 Mr. Cullimore was never served with process and was therefore dismissed. 

2

 The parties consented to the jurisdiction of the magistrate judge. 
- 4 - 

1100 (10th Cir. 2007). “Under 28 U.S.C. § 1738, the preclusive effect of a state 

judgment is governed by the rules of preclusion of that state.” Id. (footnote omitted). 

 “The doctrine of res judicata embraces two distinct branches: claim preclusion 

and issue preclusion.” Macris & Assoc., Inc. v. Neways, Inc., 16 P.3d 1214, 1219 

(Utah 2000). Although the elements of claim preclusion and issue preclusion are in 

some respects different, they share the common requirement that the first suit must 

have resulted in a final judgment. See id. (holding that one of the elements of claim 

preclusion is that “the first suit must have resulted in a final judgment on the 

merits”); see also Jensen ex rel. Jensen v. Cunningham, 250 P.3d 465, 477 (Utah 

2011) (holding that one of the elements of issue preclusion is that “the first suit 

resulted in a final judgment on the merits”) (ellipses omitted). Under Utah law, 

[f]or an order or judgment to be final, it must dispose of the case as to 

all the parties, and finally dispose of the subject-matter of the litigation 

on the merits of the case. In other words, a judgment is final when it 

ends the controversy between the parties litigant. 

Bradbury v. Valencia, 5 P.3d 649, 651 (Utah 2000) (internal quotation marks omitted 

and citation omitted). 

 The magistrate judge and the parties acknowledged that there was not a final 

state court judgment. Nonetheless, the magistrate judge decided to disregard this 

requirement for two reasons: First, “[a]t oral argument, [Anarchy] admitted that in 

nearly four years [it] ha[d] done nothing to move forward on those claims.” Aplt. 

App. at 251. Second, “the issues raised in the counterclaim[s] have been decided by 
- 5 - 

[the state court judge in] his findings of fact, rulings and orders.” Id. We disagree 

with this reasoning. 

The Landlord and Evergreen have not cited any authority that excuses the need 

for a final judgment under circumstances of alleged dilatory conduct. To be sure, the 

magistrate judge was faced with a challenging situation at oral argument when 

Anarchy admitted that it had not “taken any [action] recently” in the state court suit 

because it “pursued” the federal suit instead. Id. at 277. However, the fact remains 

that there is no final judgment in the state court action. Further, we have carefully 

examined the state court orders referenced by the magistrate judge. While they may 

not bode well for the ultimate fate of the state court counterclaims, the orders cannot 

be read so broadly as to have disposed of them on the merits or otherwise. See id. at 

64-93. 

Initially, we were inclined to affirm the magistrate judge’s order dismissing 

the § 1983 claim on the grounds that the complaint does not state a claim for relief 

under § 1983 because neither the Landlord nor Evergreen appear to be state actors. 

See, e.g., Lugar v. Edmondson Oil Co., 457 U.S. 922, 937 (1982) (explaining that 

private conduct constitutes state action when it is fairly attributable to the state and 

also explaining when that requirement is satisfied). In their motion for partial 

summary judgment, Anarchy and the Gonzaleses argued that the Landlord and 

Evergreen were “acting under the auspices of the Utah Courts — hence ‘under color 

of state law.’” Aplt. App. at 108 (brackets omitted). Although we have discretion to 
- 6 - 

affirm on any ground adequately supported by the record and neither the allegations 

in the complaint nor the fleeting statements scattered throughout the record appear to 

indicate that either the Landlord’s or Evergreen’s actions were fairly attributable to 

the state, we nonetheless decline to affirm on this ground because Anarchy and the 

Gonzaleses have not had a fair opportunity to address the issue. See Elkins v. 

Comfort, 392 F.3d 1159, 1162 (10th Cir. 2004) (“In exercising [the] discretion [to 

affirm on any ground adequately supported by the record] we consider [among other 

things] whether the ground was fully briefed and argued here and below.”). 

The judgment of the district court is reversed and the case is remanded for 

further proceedings. 

 Entered for the Court 

 Bobby R. Baldock 

 Circuit Judge