Lobato v. Taylor

Chief Justice MULLARKEY

delivered the Opinion of the Court.

Today's opinion is the third in a tmlogy of decisions that we have issued construing some of the oldest property rights in the state. Involved are access rights to a large, mountainous tract of land in southern Costil- - la County, Colorado known as the Taylor Ranch.1 These property rights trace their origins to the time before Colorado's statehood when southern Colorado was still a part of Mexico.

The Costilla County landowners, whose property rights are at issue, are the present-day descendants of 1850s frontier farming families who were recruited by Carlos Beau-bien to move north from the Taos area in New Mexico and settle in what is now southern Colorado.

Beaubien acted from self interest: without settlers, he could not perfect his rights to the one million-acre Sangre de Cristo land grant because the Mexican government made settlement an express condition of the grant to Beaubien. To convince these families to move north, Beaubien granted the settlers access to the wooded, mountainous area to graze their animals, gather firewood, and harvest timber to build their homes and outbuildings. Without these property rights, subsistence farming on the valley floor would have been impossible.

At trial, many current residents of Costilla County testified that, for over one hundred years, the use of these rights was widespread by the families residing in the region. These residents testified that it was general knowledge in their communities that the Taylor Ranch could be used to graze their animals, gather firewood, and collect timber. According to trial testimony, the mountainous tract purchased by Taylor had been known simply as "la merced," roughly translated from Spanish to mean the gift or grant.

Our prior decisions have recited the history of the landowners' property rights up to the present day in detail. To summarize the roots of today's conflict, Jack Taylor purchased the Taylor Ranch in 1960. After purchase, he fenced off the property, patrolled the area with armed guards, and instituted a Torrens Title action in federal court in order to extinguish the landowners' property rights. His lawsuit gave personal notice to a small fraction of the predominantly Spanish-speaking, Costilla County landowners. The great majority of the landowners received notice only by publication. Taylor subsequently was successful in extinguishing the landowners' property rights.

In our first decision, Rael v. Taylor, 876 P.2d 1210 (Colo.1994), we determined that due process required that Taylor exercise reasonable diligence in the Torrens action to identify and personally serve all reasonably ascertainable persons with an interest in his property. We remanded the case for devel*1156opment of the facts, concluding that the appellate record was inadequate to permit us to determine whether Taylor had met the due process standard. Id. at 1228.

After the trial court developed the record on remand, the case was appealed for the second time. In our second decision, we held that the landowners have the same property rights as the original settlers to reasonably access the Taylor property for grazing ani-mails, gathering firewood, and harvesting timber. Lobato v. Taylor, 2002 WL 1860482 *1, 71 P.3d 988, 942-948 (Colo. June 24, 2002) ("Lobato I"). As we explained in Lobato I, the rights Beaubien granted to the settlers were profits & prendre or, in more modern parlance, easements appurtenant to the land owned or occupied by the original settlers. See Restatement (Third) of Prop.: Servitudes § 5.2 (2000).

In this third opinion we resolve several remaining issues: (1) which present-day landowners may claim access rights to the Taylor Ranch; (2) whether Taylor met the due process requirements outlined in our first opinion when he gave notice to the landowners of his Torrens action; and (8) whether res judicata 2 bars the claims of the landowners who were personally named and served in the Torrens action.

Our decision can be summarized as follows. First, we conclude that reasonable access rights to the Taylor Ranch are available to Costilla County landowners who are successors in title to the original settlers of Beau-bien's grant. For practical purposes, landowners who are able to trace the settlement of their property to at least the time of William Gilpin's ownership of the Taylor Ranch shall be deemed successors in title to the original settlers of Beaubien's grant.

Second, we hold that the publication notice given by Taylor when he initiated his Torrens action violated due process. The facts developed at trial show that Taylor knew Costilla County landowners claimed rights to use the ranch and that reasonable diligence would have identified the names and addresses of the landowners.

Third, we hold that res judicata applies and precludes the claims of those Costilla County landowners and their successors who were personally named and served in the 1960s Torrens action.

Thus, we reverse the trial court's due process/res judicata decision and return the case to the court of appeals for remand to the trial court. We direct the trial court to identify all landowners who have access rights to the Taylor Ranch and to enter all necessary and appropriate orders to safeguard those rights.

I. Facts and Procedural History

In order to fully understand the due process and res judicata issues before this court today, it is important to review the circuitous procedural history that has led to today's decision. Because the facts of this case have been fully detailed in our prior decision, Lo-bato I, 2002 WL 1860432 at *1-4, 71 P.8d at 942-946, we now discuss only those facts that are relevant to the due process/res judicata inquiry presented in this case.

The petitioners, landowners in the Culebra River Drainage3 region of Costilla County, claim access rights to the Taylor Ranch. *1157These 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 4 that he filed as a diversity action in the federal district court in Denver. Taylor's exelusive ownership of the Taylor Ranch was subsequently confirmed in 1967. Sanchez v. Taylor, 377 F.2d 733 (10th Cir.1967).

In 1981, the landowners 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. We reversed and remanded the case because of our concerns about disputed issues of material fact and the constitutional validity of the Torrens action. Rael v. Taylor, 876 P.2d at 1228. On remand from this court's decision in Rael, we directed the trial court to develop the facts and to determine whether Taylor had exercised reasonable diligence in identifying all persons who claimed interests in the Taylor Ranch and personally served them as defendants in the Torrens action. For any plaintiffs whose claims were not barred by res judicata, the trial court was to determine whether their claims to the Taylor Ranch were meritorious. To better organize the trial process, the trial court bifurcated the proceedings. One trial was held to determine which plaintiffs had been denied due process and whose claims were not barred by res judicata, and a second trial was then held on the merits of the case.

In evaluating whether res judicata barred the landowners' claims, the trial court was required to determine whether the manner in which Taylor served the plaintiffs in his 1960s Torrens action complied with due process. To comply with due process, Taylor was required to serve each individual with an identifiable intérest in the Taylor Ranch whose name was also reasonably ascertainable. The trial court dismissed most of the original plaintiffs, finding that only seven could pursue théir claims to the Taylor Ranch. Using proof of grazing on the Taylor Ranch as a litmus test, the trial court concluded that although all of the plaintiffs could claim an identifiable interest in the Taylor Ranch, only seven had presented sufficient evidence of grazing practices for them to be reasonably ascertainable to Taylor. Thus, under the trial court's analysis, Taylor violated due process only by not personally naming and serving these seven persons.

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 merits analysis and did not address the due process/res judicata decision, finding it moot. This court, in Lobato I, reversed the decision of the court of appeals, finding substantive rights of access through implied easements appurtenant to the land by prescription, estoppel, and prior use. The landowners now challenge the trial court's due process/res judicata decision.

IIL Analysis

In addréssing the landowners' claims, we first clarify from our decision in Lobato I that in order to have actual access rights to the Taylor Ranch, landowners must be able to show that their lands were settled at the time of the creation of the Beaubien document in 1863. For practical purposes, this requirement can be established by tracing settlement of one's property to the time of Gilpin's ownership of the Taylor Ranch. As we will diseuss, this qualification comes directly from the nature of the easements at issue in this case.

Second, we review the 1960s Torrens action to determine whether Taylor provided sufficient notice of the Torrens action to com*1158ply with due process requirements. We conclude that, under the unique cireumstances of this case, Taylor 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. Thus, those individuals who should have been personally named and served, and were not, are not barred from presently bringing such claims.

Third, in light of the cireumstances of this case, we determine whether res judicata bars those 1960s landowners or their successors in title who were personally named and served in Taylor's 1960s Torrens action. We conclude that res judicata applies, finding that (1) public policy concerns or manifest injustice concerns do not outweigh the interests in applying res judicata; and (2) the misapplication of Colorado law by the federal courts in the 1960s Torrens action does not require waiving res judicata.

A. Identifying Present-Day Landowners with Access Rights

Having concluded in Lobato I that successors in title to the original settlers in Costilla County were granted access rights for the reasonable use of pasture, firewood, and timber, we now specify which present-day landowners can successfully claim these access rights to the Taylor Ranch. We hold that only those landowners capable of tracing their settlement claims to the time of the Beaubien document's creation in 1863 have access rights to the Taylor Ranch,. In so holding, we explain (1) why later landowners do not have implied easements in the Taylor Ranch pursuant to our decision in Lobato I; and (2) why, for practical purposes, landowners claiming access rights must trace settlement of their lands to at least the time of Gilpin's ownership of the Taylor Ranch.

1. Implied Easements were Granted only to the Original Settlers and Their Successors in Title -

In Lobato I, we held that successors in title to the original settlers in Costilla County were granted access rights to the Taylor Ranch for reasonable use of pasture, firewood, and timber through implied easements by prescription, prior use, and estoppel. Lo-bato I, 2002 WL 1360482 at *1, 71 P.3d at 942-948.

The landowners argue that these access rights should not be limited to landowners able to trace settlement claims to the original settlers, but contend that such rights should be available to all landowners in Costilla County not barred by res judicata. We disagree.

Under the evidence presented in this case, it was the unique cireumstances surrounding Beaubien's Mexican land grant and his promises to the original settlers which gave rise to the implied easements providing the settlers' successors with their rights of access. These easements appurtenant to the land were all created at the same time and stem from the actions and intentions of Beaubien. As outlined in Lobato I, Beaubien's intentions and actions were instrumental in the creation of these rights. Id. at *14-16, 71 P.3d at 954-957. There is no evidence in the record to substantiate the argument that access rights to the Taylor Ranch have been created for those individuals who settled after the cere-ation of the Beaubien document.

We thus conclude that only those present-day landowners-or their predecessors in title-who are successors in title to those persons who settled Costilla County by the time the Beaubien document was created, can claim rights of access to the Taylor Ranch for reasonable grazing, firewood, and timber.

Having determined which landowners can claim reasonable access rights to the Taylor Ranch, we now explain, for practical purposes, how the landowners can establish these rights.

2. Settlement Rights Must be Traced to the Original Settlers of Beaubien's Grant

In order for present-day landowners to legally gain access rights to the Taylor Ranch, they must first establish that their predecessors in title settled their lands at the *1159time of the Beaubien document's creation.5 Because of the practical impossibility of establishing the exact time of settlement, we hold that a landowner claiming access rights to the Taylor Ranch need only show that his or her land was settled at the last possible time that Beaubien's intentions remained in foree. Using the best available evidence, landowners must prove by a preponderance of the evidence that their property is included within the boundaries of property owned or occupied by settlers during the time of Gilpin's ownership of the lands of the Sangre de Cristo grant.6

The Mexican government awarded the Sangre de Cristo grant to Beaubien on the condition that he settle the land. To perfect his grant, Beaubien recruited farm families to settle by promising access rights to mountainous lands like the Taylor Ranch. Lobato I at *1-2, 71 P.8d at 942-944. Evidence of Beaubien's promise to give settlers access rights to the land provided the basis for the implied rights to pasture, firewood, and timber. Id. at *8-9, 71 P.8d at 948-950. Although these families began settling in the 1850s, many of these settlers did not receive the deeds to their lands until 1863, or even later after Beaubien's death in 1864. Id. at *2, 71 P.3d at 948-944.

After Beaubien's death, his lands were sold to Gilpin pursuant to an oral agreement previously negotiated between the two men. In this agreement, Beaubien kept his promise to the settlers and made the sale contingent on (iilpin's agreement to confirm the access rights of the settlers. This agreement is evidenced in the 1864 Cilpin agreement, which states:

[Gilpin agrees to thel express condition that the settlement rights before then conceded by said Charles Beaubien to residents of Costilla, Culebra & Trinchera, within said Tract included, shall be confirmed by the said William Gilpin as confirmed by him.

Because of this agreement between Beaubien and Gilpin, the original settlers who received title from Gilpin also possessed access rights to the Taylor Ranch.7 Thus, landowners of Costilla County who are able to show that their property was settled during the time of Gilpin's ownership of the Sangre de Cristo grant or earlier will be granted access rights to the Taylor Ranch for reasonable grazing, timber and firewood.

B. Due Process Requirements of the Torrens Proceeding

Having established which present-day landowners may claim access rights to the Taylor Ranch, we now consider whether Taylor's efforts in notifying potential claimants of his intent to quiet title in the Taylor Ranch were adequate to comply with the requirements of due process. The constitutional sufficiency of Taylor's 1960s Torrens action turns on whether Taylor provided sufficient notice to the landowners to extinguish their property claims in the Taylor Ranch. If the action was not constitutionally sufficient to meet due process requirements, the landowners will not be barred from bringing present-day claims.

To resolve this issue, we review and detail what notice is required by due process. Next, we apply that standard to the facts and evaluate whether the steps taken by Taylor in his attempt to notify interested parties were sufficient to bar future claims.

*11601. Notice Required by Due Process

The Torrens Title Act is a long-standing, seldom-used feature of Colorado real property law. It is intended to simplify the transfer of title and create certainty by strictly limiting attacks on a title registered under the Act. For example, a challenge must be initiated within 90 days of registration and successful claimants may recover only damages, not property rights. § 38-36-1381, 10 C.R.S. (2002). Laudable as these goals are, however, the act must yield to the United States Constitution.

To have a preclusive effect on the landowners' current claims, Taylor's Torrens judgment must satisfy the minimum procedural requirements of the Due Process Clause of the Fourteenth Amendment. Kremer v. Chemical Constr. Corp., 456 U.S. 461, 481, 102 S.Ct. 1883, 72 L.Ed.2d 262 (1982). Although section 118-10-31, 5 C.R.S. (1953), of the 1960s Torrens Act forecloses any challenges to a court's decree in a Torrens action and although the essential purpose of the Torrens Act is to eliminate attack on decrees of confirmation, the Torrens bar on future challenges cannot be sustained where constitutional deficiencies of notice are present. Rael v. Taylor, 876 P.2d at 1224 (citing Petition of Brainerd Nat'l Bank, 383 N.W.2d 284, 287 n. 2 (Minn.1986); Riley v. Pearson, 120 Minn. 210, 189 N.W. 361, 8366 (19183)).

In the seminal case Mullane v. Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314, 70 S.Ct. 652, 94 L.Ed. 865 (1950), the United States Supreme Court recognized that before an action that will affect an individual's interest in life, liberty or property is commenced, state law must provide interested parties with "notice reasonably calculated, under all the cireumstances, to apprise [the parties] of the pendency of the action and afford them an opportunity to present their objections." (citations omitted).

The central issue in Mullane involved the actions of the Central Hanover Bank and Trust Company in establishing a common trust fund from a total of 118 smaller trusts. This merging of trusts affected the respective property rights of the beneficiaries of these trusts and their ability to control their assets. The only notice given to the benefi-claries of this created common trust was through publication in a local newspaper.

The Court held that although publication notice for beneficiaries whose interests or addresses were unknown was sufficient to comply with due process, the trustee had erred in not personally notifying those beneficiaries whose names and addresses were easily obtainable. Id. at 317, 70 S.Ct. 652. In explaining its reasoning, the Court stated that

"Itlhe reasonableness and hence the constitutional validity of any chosen method [of notice] may be defended on the ground that it is in itself reasonably certain to inform those affected ... or, where conditions do not reasonably permit such notice, that the form chosen is not substantially less likely to bring home notice than other 'of the feasible and customary substitutes."

Id. at 815, 70 S.Ct. 652 (citations omitted). Under this standard, the Court disapproved of notice by publication for those beneficiaries whose identities and addresses were known because publication was not "reasonably calculated" to provide actual notice.8

As to unknown beneficiaries, the Court concluded that notice by publication was sufficient to satisfy due process requirements. The Court reasoned that although the chance that these beneficiaries would be notified by publication was remote, the publication would be as effective as any other method to notify the unknown beneficiaries. Id. at 317, 70 S.Ct. 652.

In subsequent cases, the United States Supreme Court has held to the principles of due process outlined in Mullane. See Walker v. City of Hutchinson, 352 U.S. 112, 77 S.Ct. 200, 1 L.Ed.2d 178 (1956) (finding notice of condemnation proceeding published in a local newspaper inadequate to inform an affected landowner whose name was known to the city and in official records); Schroeder v. City of New York, 371 U.S. 208, 88 S.Ct. *1161279, 9 L.Ed.2d 255 (1962) (holding that publication by newspaper and through posted notices was insufficient to alert property owner of condemnation proceedings where name and address were easily ascertainable from deed records and tax rolls); Greene v. Lindsey, 456 U.S. 444, 102 S.Ct. 1874, 72 L.Ed.2d 249 (1982) (concluding that posting a summons on the door of a tenant's apartment was inadequate to provide notice of forcible entry and detainer actions); Mennonite Bd. of Missions v. Adams, 462 U.S. 791, 103 S.Ct. 2706, 77 L.Ed.2d 180 (1983) (finding publication and posting of a tax sale of a property was insufficient to notify a mortgagee whose address was reasonably ascertainable and whose interest was publicly recorded). .

In Rael, we followed the United States Supreme Court's reasoning in Mul-lane. We held that to evaluate the sufficiency of publication notice, due process requires a court to determine "whether under all the cireumstances 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." Rael v. Taylor, 876 P.2d at 1225. This determination of reasonable diligence is an objective test. We look 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. Id. at 1226-27. In reference to Torrens Act 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." Id. at 1226 (emphasis added). Furthermore, a search for reasonably ascertainable interested parties need not extend beyond what would be discoverable by diligent inquiry into the public records. Id. at 1228 n. 26.

We were unable to apply that test in Rael because the facts were not sufficiently developed. Id. at 1128. With the facts now before us, we evaluate whether Taylor was required to personally name and serve the plaintiff landowners in his Torrens action. More specifically, we must determine whether Taylor exercised reasonable diligence in discovering all claimants (1) who claimed an identifiable interest in the Taylor Ranch, and (2) whose identities were reasonably ascertainable.

2. Identifiable Interest

The cireumstances surrounding Taylor's 1960s Torrens action lead us to conclude that at the time of the Torrens action, all landowners in Costilla County possessed an identifiable interest in the Taylor Ranch.

The trial court in this case found that under the Beaubien document, all the plaintiffs before the court could claim an identifiable interest in the Taylor Ranch. Taylor now argues that the landowners fail to meet this element of the due process analysis, contending that they, as landowners, have no identifiable interest in the Taylor Ranch and that he and his attorneys exercised reasonable care and due diligence in individually naming defendants in his Torrens application. We agree with the trial court determination and find Taylor's argument to be without merit. -

Taylor mistakenly assumes that the due process requirements set forth in Mullane and its progeny require that, in order for a party's interest to be identifiable, the interest must either be recorded or the party must be in open possession of the interest. Although an "identifiable interest" usually is associated with a recorded interest or an interest that is obvious via actual possession, the case before us is not the usual case. To the contrary, this is a highly unusual case that proves the Supreme Court's admonishment that constitutionally sufficient notice must be determined by examining the cireumstances of each individual case. See Mullane v. Cont. Hanover Bank & Trust Co., 389 U.S. at 814-15, 70 S.Ct. 652. Taking into account the information contained in the Beaubien document, the 1864 Gilpin agreement, Taylor's own deed, the title examiner's report, and other extrinsic facts, Taylor's argument that he could not have reasonably identified and named the landowners must fail.

*1162First, the language of the Beaubien document, the 1864 Gilpin agreement, and Taylor's own deed would have provided a reasonable applicant in Taylor's position with adequate notice that some landowners in Costilla County might have some interest or claim in the Taylor Ranch. Taylor knew he was buying land within the Sangre de Cristo Mexican land grant. The Jenkins translation 9 of the Beaubien document unequivocally provides that

[ilt has been decided that the Rito Seco lands shall remain uncultivated for the use of the residents of San Luis, San Pablo and the Vallejos, and other inhabitants of said towns, for pastures and community grounds, etc.... All the inhabitants shall have the use of pasture, wood, water, and timber and the mills that have been erected shall remain where they are, not interfering with the rights of others.

Although Taylor might eredibly contend that the language of the Beaubien document alone was insufficient to provide him with reasonable notice of potential claimants, this argument fails when the Beaubien document is combined with the language in the other two noted documents.

The instrument of conveyance of the Sangre de Cristo grant to Gilpin from Beau-bien's heirs in 1864-contained in Taylor's chain of title-also clearly provides notice to the average reader that landowners in Costil-la County might credibly claim access rights to the Taylor Ranch. The Gilpin agreement expressly conditions conveyance to Gilpin on the requirement that "certain settlement rights before then conceded by said [Carlos] Beaubien to residents of the settlements of Costilla, Culebra & Trinchera ... shall be confirmed by said William Gilpin."

Finally, Taylor's own deed specifically provides that "All of the land hereby conveyed ... being subject to claims of the local people by prescription or otherwise to right to pasture, wood, and lumber and so-called settlements [sic] rights in, to and upon said land." With these three documents at his disposal, it is clear that Taylor was on notice that landowners in Costilla County might have an interest in the Taylor Ranch.

In addition to these three documents, Taylor was notified of the landowners' claims through his lawyer who handled the Torrens proceedings. We noted in Rael that Taylor's lawyer, Raphael Moses, Esq., had personal knowledge of the claimed interests of the landowners and even acknowledged these interests in 1949 in a letter to some of the same landowners he sought to exclude in the 1960s Torrens action:

In 1986, Mr. Albert L. Moses gave an opinion to Mr. J.J. Valdez and Mr. J.E. Sanchez that the owners of land in the Grant who obtained their title through those originally settling the land have the right to go upon the timbered portions of the Grant and take therefrom the necessary fire wood for their oun personal uses and the necessary timber for use in connection with the land which they own ... and likewise have the right to pasture their own domestic animals, not by herding them upon the land but by permitting them to graze thereon. We still believe that this is the case and that you would have the right to stop anyone who interferes with these rights.

Rael v. Taylor, 876 P.2d at 1215 n. 7. See also Tom Faxon, "An Oral History: Raphael J. Moses," The Colorado Lawyer, March 1998, Vol. 27, No. 8, 115 (interview with Moses explaining that the 1960s Torrens action was filed roughly 250 miles from Costilla County in federal court in Denver to avoid possible conflicts with landowners over their access rights).

At the time Taylor commenced his Torrens action, there were approximately 1,918 landowners in Costilla County. Although we recognize that the land referenced in the Beau-bien document is not coextensive with the boundaries of Costilla County, other information available to Taylor in the 1960s put Taylor on notice that all landowners in Cos-tilla County had potential claims in the Taylor Ranch. The Torrens title examiner's report and other extrinsic information available to Taylor provided such notice.

*1163The court-appointed title examiner assigned to conduct the investigation concerning Taylor's Torrens application was W.W. Platt. In his report, Platt noted that claim rights to the Taylor Ranch to take pasture and wood were asserted by the Association of Civic Rights, which represented "all owners of land in Costilla County.10 Although Taylor was aware of the Association of Civic Rights and its asserted interests in the Taylor Ranch, he made no effort to name all landowners in Costilla County.." In fact, he failed to name these individuals even though his Torrens application specifically addresses the Association of Civic Rights and its claim to usufructuary rights in the Taylor Ranch.

Although Taylor noted in his application that the individuals represented by the Association of Civic Rights were claiming rights to pasture and wood as landowners, Taylor argued that this status did not provide them with any identifiable rights in the Taylor Ranch. This contention loses its credibility when considered in light of the title examiner's report. In Platt's report evaluating the propriety of Taylor's Torrens application, the examiner specifically notes that 269 of the people specifically named by Taylor were named only because of their status as landowners. As Platt unequivocally concluded, the only possible interest these 269 people have in the Taylor Ranch would be as "landowners in Costilla County claiming such rights to pasture and wood solely because they are such landowners." (emphasis added). Because these 269 individuals were named in his Torrens application, logic should have dictated that Taylor also name all landowners in Costilla County, considering that both groups claimed their respective interests in the Taylor Ranch solely as landowners of Costilla County.

In sum, as established by the details of Taylor's knowledge in the 1960s, it is clear that Taylor possessed adequate notice that all of the landowners of Costilla County claimed an interest in the Taylor Ranch. Having concluded that Taylor should have recognized that all the landowners of Costilla County claimed an identifiable interest in the Taylor Ranch, we now evaluate whether the identities of these landowners were reasonably ascertainable by Taylor.

3. Reasonably Ascertainable Individuals

With respect to whether the 1960s landowners were reasonably ascertainable by Taylor at that time, the landowners contend that the trial court erred in concluding that the identities of the great majority were not, reasonably ascertainable. Conversely, Taylor agrees with the trial court and argues that, aside from those landowners whom he specifically named, he could not have reasonably ascertained other landowners who claimed an interest in the Taylor Ranch. We disagree with Taylor's assertion and conclude that the trial court ruling was incorrect. Having established that through reasonable diligence, Taylor knew or should have known that all 1960s landowners in Costilla County claimed an interest in the Taylor Ranch, we now conclude that the landowners were reasonably ascertainable and could have been personally notified rather than served by: publication.

Specifically," we conclude that the trial court erred in (1) finding that the examination of real estate records was sufficient to locate interested individuals; and (2) relying on grazing as the test for whether the plaintiffs were reasonably ascertainable.

First, the trial court was mistaken in © concluding that Taylor was only required to search and examine the real estate records of the Clerk and Recorder in order to diligently ascertain those individuals with an identifiable interest in the Taylor Ranch. Because Taylor had knowledge of the claimed interests of the landowners in Costilla County, reasonable diligence required Taylor to search the Costilla County tax rolls as well.

Although, generally, only documents within a chain of title must be searched: to determine relevant interests in real property, more is required where it appears that outside interests may affect title. In such in*1164stances, an individual has a duty to investigate these other interests and is charged with knowledge of the facts to which the investigation would have led. Collins v. Scott, 948 P.2d 20, 22 (Colo.App.1996) (citations omitted).

That it is sometimes necessary to look beyond standard forms and legal methods is demonstrated by our decision in Jacobucci v. Dist. Ct., 189 Colo. 380, 388, 541 P.2d 667, 672 (1975). In Jacobucci, the City of Thornton initiated eminent domain proceedings against, among others, Farmers Reservoir and Irrigation Company, a mutual ditch company organized by local farmers to enable them to receive irrigable water for their farms. Id. at 386, 541 P.2d at 671.

Thornton served only the corporation. Id. at 384, 541 P.2d at 669. Finding the individual farmer-shareholders indispensable to the eminent domain proceedings, however, we recognized that the unique circumstances surrounding the creation of mutual ditch companies in Colorado required that we look beyond general corporate law principles. Id. 'at 390, 541 P.2d at 674. Although recognizing that shareholders are generally not considered real parties in interest in condemnation actions, we cautioned that "[dJleductions made from the application of general legal concepts may be dangerously inappropriate as applied to specific contexts." Id. at 389, 541 P.2d at 673. In looking beyond legal forms, we reasoned that the farmer-shareholders were real parties in interest because, in practical terms, "[the productivity and value of [the farmer-shareholder's] lands, as well as the assurance of their livelihoods, is . entirely dependent upon the continuing flow of water.... No court can ignore the magnitude of [disruption] which would result in a successful condemnation action." Id. at 391, 541 P.2d at 675. We thus required Thornton to individually serve shareholders whose water would be impacted by the condemnation. Id. at 892, 541 P.2d at 675-76.

The challenges of farming in an arid climate gave rise to the mutual ditch company, an entity that does not easily fit within the confines of corporate law and condemnation actions. We directed that the corporation be disregarded and notice be given to the farmers who had the most to lose in the condemnation action.

The logic of Jacobucci applies with equal force here because the facts in this case also reflect the harsh realities of farmers' lives in southern Colorado. The access rights made farming possible in Costilla County. Given Taylor's knowledge of those access rights, he could not pick and choose whom to notify personally and whom to notify only by publication. Under the circumstances of this unique case, reasonable diligence required that Taylor personally name and serve all landowners in Costilla County.

As noted in Rael, the reasonable diligence standard requires that " '[wlhere the names and post office addresses of those affected by a proceeding are at hand, the reasons disappear for resort to means less likely than the mails to apprise them of its pendencey' " Rael v. Taylor, 876 P.2d at 1225 (citing Mullane v. Cent. Hanover Tr. Co., 339 U.S. at 318, 70 S.Ct. 652). See also Schroeder v. City of New York, 371 U.S. 208, 88 S.Ct. 279, 9 L.Ed.2d 255 (names and addresses are easily ascertainable from tax rolls); see also Mennonite Bd. of Missions v. Adams, 462 U.S. at 798 n. 4, 108 S.Ct. 2706 (mortgagee easily ascertainable where only known address listed mortgagee as " 'corporation, of Wayne County, in the State of Ohio' ").

According to the record, the Costilla County tax rolls provided the names and addresses of every landowner in Costilla County. At trial, Frederick B. Skillern,11 an expert in the *1165field of real estate law, testified that Taylor could reasonably have accessed the public tax records to obtain the names and addresses of landowners in Costilla County and that the information therein would have been sufficient to effectuate service of process to said landowners. Skillern also testified that Taylor should have conducted this search in order to properly comply with the notice required by due process.

In reviewing the record and relevant case law, we agree with the landowners and conclude that they were reasonably ascertainable by Taylor through a basic search of the tax rolls. Because the names and addresses of the landowners were available through the tax rolls, Taylor's efforts in discovering potential claimants to the Taylor Ranch were not reasonably diligent to comply with due process. Although the number of names and addresses of the landowners might have been large,12 the process was not complex or difficult.

Second, the trial court arbitrarily applied proof of grazing as a litmus test to determine whether each plaintiff was reasonably ascertainable by Taylor and thus should have been named and served. The trial court's test stated that, "[Taylor] had a duty to ascertain the identity of owners of property that ran cattle or sheep within a reasonable proximity to [his] land and name and personally serve such person."

The trial court's reliance on grazing alone is inconsistent with our decision in Lobato I, which found rights of access for firewood, timber, and grazing. Therefore, we conclude that the trial court erred in relying solely on proof of grazing to determine which plaintiffs were reasonably ascertainable by Taylor.

As a whole, when taking into account the expert testimony and information at Taylor's disposal at the time he filed his Torrens application, it is clear that Taylor's actions were not sufficiently diligent to comply with due process. Under the cireumstances surrounding this case in the 1960s, a reasonably diligent applicant would have personally served all landowners in Costilla County whose names and addresses were available in the county's tax records. Therefore, the claims made by all present-day landowners or their predecessors in title not personally named or served in the 1960s Torrens action are not barred from asserting their claims now, because they cannot be deemed as parties to the Torrens action. As for those landowners or predecessors in interest who were actually served in the 1960s Torrens action, we now explain why they are barred by res judicata from claiming access rights to the Taylor Ranch. '

C. Res Judicata Bars Those Landowners Personally Named and Served in 'the 1960s Torrens Action

Having concluded that Taylor's efforts in notifying potential claimants of his Torrens action were inadequate to comply with the requirements of due process and thus bar the claims of present-day landowners, we now consider whether res judicata should be applied to bar the claims of those individuals who were personally named and served in Taylor's 1960s action to quiet title in the Taylor Ranch. The landowners argue that res judicata should not be applied based on the 1960s Torrens action because of the unique circumstances surrounding this case. We disagree.

The operation of res judicata works to preclude the relitigation of matters that have been litigated already as well as matters that could have been litigated in a prior proceeding. Wright, Miller, & Cooper, Federal Practice and Procedure: Jurisdiction 2d § 4403, 20 (2002). In barring the relitigation of tried matters, res judicata serves distinct and important public and private values. As the United States Supreme Court has stated, res judicata serves "the dual purpose of protecting litigants from the burden of relitigat-ing an identical issue with the same party or his privy and of promoting judicial economy *1166by preventing needless litigation." Parklane Hosiery Co. v. Shore, 489 U.S. 822, 326, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979) (citations omitted). Underlying these purposes of finality and efficiency is the vital interest in preserving the integrity of the judicial system. Wright, Miller, & Cooper, Federal Practice and Procedure Jurisdiction 2d § 4403 at 23. Specifically, if one matter could be easily relitigated with inconsistent results, judicial integrity would be compromised and the value of and respect for court rulings would be seriously devalued. Although exceptions to the application of res judicata have been allowed in instances where such application would undermine an important state, public policy .or result in manifest injustice, United States v. LaFatch, 565 F.2d 81, 83 (6th Cir.1977), after the United States Supreme Court's decision in Federated Dep't Stores, Inc. v. Moitie, 452 U.S. 894, 401, 101 S.Ct. 2424, 69 L.Ed.2d 108 (1981), such exceptions are extremely rare.

The landowners offer three reasons for why res judicata based on Taylor's 1960s Torrens action should not apply to this case. First, the landowners argue that res judicata cannot be applied because the federal court in the 1960s action incorrectly. applied Colorado law. Second, they argue that application of res judicata would create a manifest injustice in the tightly-knit community because certain landowners would have access to the Taylor Ranch while others would not. Finally, the landowners contend that the application of res judicata here would be contrary to the public policy in Colorado recognizing implied rights in land. Although we recognize that there are occasions in which res judicata cannot and should not be applied, none of the arguments offered by the landowners convinces us that the cireum-stances surrounding the 1960s Torrens actions present such an occasion.

First, the landowners argue that misapplication of the law should limit the application of res judicata. Specifically, the landowners contend that res judicata should not be applied because the United States District Court and the United States Court of Appeals of the Tenth Cireuit in Sanchez v. Taylor, 377 F.2d 783, wrongly interpreted Colorado law in holding that the landowners had no access rights to the Taylor Ranch as evidenced by our decision in Lobato I. We disagree.

The application of res judicata is not thwarted simply because a prior, final ruling was based on law subsequently overruled. See Precision Air Parts, Inc. v. Avco Corp., 736 F.2d 1499 (11th Cir.1984) (finding res judicata applicable despite a subsequent reinterpretation of Alabama's statute of limitations no longer barred claims as untimely filed). Res judicata cannot be so easily avoided here simply because the federal courts in the 19608's Torrens action misinterpreted Colorado law. See Federated Dep't Stores, Inc. v. Moitie, 452 U.S. at 898-99, 101 S.Ct. 2424 ("the res judicata consequences of a final, unappealed judgment on the merits [are not] altered by the fact that the judgment may have been wrong.... 'The indul-genee of a contrary view would result in creating elements of uncertainty and confusion and in undermining the conclusive character of judgments, consequences which it was the very purpose of the doctrine of res judicata to avert.' ") (quoting Reed v. Allen, 286 U.S. 191, 201, 52 S.Ct. 582, 76 L.Ed. 1054 (1982)).

Although cases exist where a misapplication of the law has resulted in the waiver of res judicata, such cases strictly involved instances in which the legal correction was based on significant changes in fundamental constitutional rights. See eg., Christian v. Jemison, 303 F.2d 52, 55 (5th Cir.1962) (res judicata not applied to state court judgment after Supreme Court overruled separate-but-equal doctrine in Brown v. Bd. of Educ., 347 U.S. 483, 74 S.Ct. 686, 98 L.Ed. 878 (1954)). Although the cireumstances surrounding the exclusion of landowners served in Taylor's 1960s Torrens action are unfortunate, the federal courts' erroneous interpretation of Colorado law is not of such constitutional magnitude as to compel this court to overlook the long-standing and important principles supporting the application of the res judicata doctrine.

The landowners next argue that the application of res judicata should be *1167waived because the bar will result in a manifest injustice whereby some landowners in the Costilla County community would be granted access rights while others would not. As expressed in Moitie, inequities resulting from the application of res judicata will not easily outweigh the principles supporting its application. Federated Dep't Stores, Inc. v. Moitie 452 U.S. at 400, 101 S.Ct. 2424; E.E.O.C. v. U.S. Steel Corp., 921 F.2d 489 (3d Cir.1990) (finding that res judicata barred the relitigation of illegal discrimination claims against an employer although some similarly situated employees were awarded relief and others were not).13 Although the possible creation of divisions within the local community would be troubling, we do not find that these divisions would rise to the level of creating a manifest injustice.

Finally, the landowners contend that applying res judicata would be contrary to public policy in Colorado recognizing implied rights in land. Contrary to the landowners' contentions, we find that applying res judica-ta based on the 1960s Torrens action serves the more important general public policy interest that there be an end to litigation, ' Federated Dep't Stores, Inc. v. Moitie, 452 U.S. at 401, 101 S.Ct. 2424, as well as Colorado's interest in ensuring that real estate titles are secure and marketable. Agee Revocable Trust v. Mang, 919 P.2d 908, 910 (Colo.App.1996); § 38-84-101, 10 C.R.S. (2002) ("it is declared to be the policy in this state that ... laws concerning or affecting title to real property ... shall be liberally construed with the end in view of rendering such titles absolute and free from technical defects so that subsequent purchasers ... may rely on the record title.") In balancing these interests, the public policy interests which favor the finality provided by res judicata outweigh any public policy interests served by recognizing implied rights in land.

Although we are sympathetic to the deeply-held views expressed by the landowners, under the law, we can find no facts, inequities, or public policy considerations which outweigh those vital purposes inherent in the application of res judicata. Thus, res judica-ta will bar the claims of those landowners personally named and served in Taylor's Torrens action.

III. Conclusion

In conclusion, we clarify that reasonable access rights to the Taylor Ranch will be available for those present-day landowners in Costilla County who are successors in title to the original settlers of Beaubien's grant, proved by showing that their lands were settled at the time of Gilpin's ownership of the Taylor Ranch.14

Applying the due process analysis of Rael to the facts developed on remand, we hold that those 1960s landowners not personally named and served in the 1960s Torrens action, or their successors, are not barred from bringing their present claims. Finally, we conclude that res judicata precludes the claims of those landowners or their successors who were personally named and served in the 1960s Torrens action.

In light of our holding that Taylor failed to exercise reasonable diligence in personally naming and serving all reasonably ascertainable individuals with an identifiable interest in the Taylor Ranch, the cost of remedying this failure on remand must be borne by Taylor. In Colorado, costs are awarded to the prevailing party unless mandated otherwise by statute. C.R.C.P. 54(d). Because the plaintiff landowners have prevailed on their claims, Taylor now must pay the costs associated with identifying and notifying all persons who have access rights to the Taylor Ranch.

The case is returned to the court of appeals for remand to the trial court. We direct the trial court to identify all landowners who have access rights to the Taylor *1168Ranch and to enter all necessary and appropriate orders to safeguard these rights.

Justice KOURLIS dissents, Justice RICE joins in the dissent.

. As referenced in our decision in Lobato v. Taylor, 2002 WL 1360432 *1, *2, 71 P.3d 938, 942-944 (Colo. June 24, 2002), the Taylor Ranch includes those lands known as the Salazar estate, purchased by Jack Taylor in 1973. As such, our decision in the present case also applies to the Salazar estate.

. We have previously expressed our preference for the term "claim preclusion" over the term "res judicata." Farmers High Line Canal & Reservoir Co. v. City of Golden, 975 P.2d 189, 196 n. 11 (Colo.1999). As the United States Supreme Court has noted, the use of the phrase res judica-ta may lead to confusion because it has been used to refer to both claim and issue preclusion. See Migra v. Warren City Sch. Dist. Bd. Of Educ., 465 U.S. 75, 77 n. 1, 104 S.Ct. 892, 79 L.Ed.2d 56 (1984). In this opinion, we use the term res judicata to be consistent with our terminology in Rael v. Taylor, 876 P.2d 1210.

. On appeal, the petitioners limit their claims to landowners in an area they define as the Culebra River Drainage, located in the southern part of Costilla County, Colorado. At trial, the petitioners identified this specific area of land in conjunction with their efforts to certify a class. The trial court never made any factual findings regarding this proposed area and whether it accurately represented the entire scope of Beaubien's grant. Subsequently, the trial court denied their motion for class certification. Because no factual findings were made regarding the proposed boundaries, we do not rely on them. Any individual able to meet the requirements set forth in this opinion will be able to claim access rights to the Taylor Ranch.

. Although lauded by legal scholars as a promising alternative to traditional title registration methods, practitioners have been less than enthusiastic in adopting the Torrens system. In fact, Torrens actions are so rare in Colorado that none of the three real estate experts testifying at trial had ever participated in a Torrens proceeding. See also Richard W. Laugesen, The Torrens Title System in Colorado, 39 Dicta 40, 43 (1962).

. During the merits phase of the trial court proceeding, the court specifically found that the seven plaintiffs could trace their titles to the time of Gilpin's ownership of the Taylor Ranch. Thus, these individuals need not prove their claims to the Taylor Ranch.

. We emphasize that the landowners need not prove a marketable chain of title for their property. As stated in the text, the landowners must use the best available evidence to prove their lands are benefited by the easements Beaubien granted. From the record before us, it appears that the best evidence of benefited properties conveyed by Beaubien is the official 1894 Costilla County survey and inventory of lands held by individuals along the Culebra, Vallejos, and San Francisco Creeks. Of course, we do not foreclose the landowners from presenting other evidence to prove their settlement claims.

. We recognize that this standard may be over-inclusive, but considering the grave depravation of rights suffered by the landowners over the past 40 years, we are unwilling to create a standard which may again unlawfully deny some landowners their guaranteed access rights.

. As an alternative to personal service, the Mul-lane Court recognized that service could be adequately undertaken via ordinary mail. Id. at 318, 70 S.Ct. 652.

. The trial court found that the Jenkins translation was a true and accurate translation of the Beaubien document from the Spanish to English language.

. Even if Taylor was made aware of these claimants only after his Torrens application, he was still responsible for providing them with adequate notice. See Bray v. Germain Inv. Co., 105 Colo. 403, 408, 98 P.2d 993, 995, (1940).

. 'The trial court heard testimony from three qualified real estate experts, Skillern, Don Le-sher, and Willis Carpenter. These experts provided testimony analyzing the Torrens Act and this court's decision in Rael, to provide an opinion on what steps a reasonably prudent applicant would take to exercise reasonable diligence in naming and ascertaining all persons claiming an interest in the Taylor Ranch. The trial court found Carpenter's testimony most credible and from this testimony concluded that the only rele- . vant public record that required search and examination was the real estate records of the Clerk and Recorder. The trial court's credibility finding is not a bar to us. These were not fact witnesses but rather lawyers offering their legal opinions. Carpenter's testimony was based on his opinion that the Beaubien document did not create or convey any rights-a position we have rejected as a matter of law. He conceded that *1165the assessor's records would be the easiest way to identify landowners.

. At trial, Dr. Robert A. Bardwell, a statistics expert, testified that the 1959 Costilla County tax roils listed 1,913 landowners in the County. He further testified that, at most, 273 of these landowners were named in Taylor's Torrens action.

. For federal courts, the United States Supreme Court's decision in Moifie has virtually extinguished a general fairness exception to res judi-cata. Wright, Miller, & and Cooper, Federal Practice and Procedure: Jurisdiction 2d § 4415 at 379.

. Due to the large number of potential claimants, the trial court should revisit the issue of class certification.