2020 UT App 89

THE UTAH COURT OF APPEALS

HONNEN EQUIPMENT COMPANY,

Appellant,

v.

DAZ MANAGEMENT LLC,

Appellee.

Opinion

No. 20190356-CA

Filed June 11, 2020

Second District Court, Ogden Department

The Honorable Jennifer L. Valencia

No. 180906337

Theodore E. Kanell and Daniel E. Young, Attorneys

for Appellant

Donald L. Dalton, Attorney for Appellee

JUDGE KATE APPLEBY authored this Opinion, in which 

JUDGES DAVID N. MORTENSEN and DIANA HAGEN concurred.

APPLEBY, Judge:

¶1 Pursuant to a rental agreement, Daz Management, LLC 

(Daz) rented a grading machine from Honnen Equipment 

Company (Honnen). During the rental period, Daz damaged the 

machine, and Honnen filed suit for breach of contract and 

negligence against the owner and manager of Daz (Owner) in his 

personal capacity (the first suit). After a bench trial, the district

court found Owner was not liable under the contract and that he 

was not negligent. Honnen then filed another suit (the second 

suit), this time against Daz, before a different district court judge, 

asserting the same causes of action. The district court dismissed 

the second suit as barred by claim preclusion. We reverse.
Honnen Equipment v. Daz Management

20190356-CA 2 2020 UT App 89

BACKGROUND1

¶2 In 2015, Honnen and Daz entered into a rental agreement 

for a grading machine. The agreement listed “Daz Management” 

as the lessee and was signed by Owner. During the rental period, 

the machine was damaged. Honnen filed the first suit against

Owner for breach of contract and negligence, and the case 

proceeded to a bench trial. After trial, the court determined that 

because the named lessee “referred to Daz Management, LLC,” 

Owner “in his personal capacity was not a party to the contract, 

so [Owner] [wa]s not personally liable on the contract.” The court 

also found that because the machine “was damaged as the result 

of an accident,” Owner was not negligent. Thus, the court

concluded, Honnen had “no cause of action.”

¶3 Shortly thereafter, Honnen filed the second suit, this time 

against Daz, again asserting breach of contract and negligence.

Daz moved for dismissal, arguing the suit was barred by claim 

preclusion. Honnen opposed the motion, but voluntarily 

dismissed the negligence claim, leaving only the contract claim

intact. Honnen then moved to consolidate the first and second 

suits and urged the district court to treat the complaint in the 

second suit as a filing under rule 15(b) and (d) of the Utah Rules 

of Civil Procedure. See Utah R. Civ. P. 15(b), (d) (allowing a party 

to amend and supplement pleadings).

¶4 After briefing and oral argument, the district court denied 

Honnen’s motion to consolidate and granted Daz’s motion to 

dismiss. The court determined the second suit was barred by 

claim preclusion because “both cases involve[d] the same parties 

or their privies,” “the breach of contract claim was already 

 

1. “On appeal from a motion to dismiss, we review the facts only 

as they are alleged in the complaint. We accept the factual 

allegations as true and draw all reasonable inferences from those 

facts in a light most favorable to the plaintiff.” Haynes v. 

Department of Public Safety, 2020 UT App 19, n.2, 460 P.3d 565 

(quotation simplified).
Honnen Equipment v. Daz Management

20190356-CA 3 2020 UT App 89

litigated in the first case,” any other claims “could and should 

have been raised in the first case,” and “the first case resulted in a 

final judgment on the merits.”

¶5 Honnen timely appeals.

ISSUE AND STANDARD OF REVIEW

¶6 Honnen alleges the district court erred in dismissing the 

second suit based on claim preclusion, a branch of the doctrine of

res judicata. “The ultimate determination of whether res judicata 

bars an action is a question of law, which we review for 

correctness.” Press Publ’g, Ltd. v. Matol Botanical Int’l, Ltd., 2001 UT 

106, ¶ 19, 37 P.3d 1121 (quotation simplified).

ANALYSIS

¶7 To establish an action is barred by claim preclusion, the 

movant must prove three elements:

First, both cases must involve the same parties 

or their privies. Second, the claim that is alleged 

to be barred must have been presented in the 

first suit or must be one that could and should 

have been raised in the first action. Third, the 

first suit must have resulted in a final judgment on 

the merits.

Press Publ’g, Ltd. v. Matol Botanical Int’l, Ltd., 2001 UT 106, ¶ 19, 37 

P.3d 1121 (quotation simplified). Because all three elements must 

be met, the absence of one element precludes dismissal based on 

claim preclusion. See Snyder v. Murray City Corp., 2003 UT 13, ¶ 36, 

73 P.3d 325 (determining claim preclusion was not established 

because the claim was not “the subject of a final judgment on 

the merits”).
Honnen Equipment v. Daz Management

20190356-CA 4 2020 UT App 89

¶8 Because the breach of contract claim in the first suit was not 

decided on the merits, the district court erred when it granted 

Daz’s motion for dismissal. “As a general rule, dismissals 

resulting from an ‘initial bar’ to the court’s adjudication of the 

parties’ claims and defenses are not preclusive. An initial bar to 

the court’s authority exists when . . . the wrong parties are before 

the court.” Fundamentalist Church of Jesus Christ of Latter-Day Saints 

v. Horne, 2012 UT 66, ¶ 24, 289 P.3d 502 (quotation simplified); see 

also Utah R. Civ. P. 41(b) (stating a dismissal based on “failure to 

join a party” is not on the merits); Madsen v. Borthick, 769 P.2d 245, 

249 (Utah 1988) (“Dismissals in which the merits could not be 

reached for failure of the plaintiff to satisfy a precondition do not 

ordinarily bar subsequent suits.” (quotation simplified)).

¶9 After a bench trial in the first suit, the court found in favor 

of Owner on the breach of contract claim because he was not a 

party to the rental agreement.

2 But this does not mean the district

court reached the merits of Honnen’s breach of contract claim.

Rather, the court’s decision merely established that, by not suing

Daz—the real party to the contract—Honnen failed to overcome

an “initial bar to the court’s authority,” because “the wrong 

parties [we]re before the court.” See Horne, 2012 UT 66, ¶ 24. Thus, 

because at least one element of claim preclusion was not met, the 

district court erred when it dismissed the second suit.

CONCLUSION

¶10 The district court erred in concluding the second suit was 

barred by claim preclusion, because the breach of contract claim 

in the first suit was not decided on the merits. Accordingly, we 

reverse and remand to the district court for further proceedings.

 

2. Because Honnen voluntarily dropped the negligence claim in 

the second suit, its disposition is not material to this analysis.