author: Justice BENDER

text:
    ARVADA URBAN RENEWAL AUTHORITY, a body corporate and politic of the State of Colorado, Petitioner v. COLUMBINE PROFESSIONAL PLAZA ASSOCIATION, INC.; Columbine West Medical Office Building, Ltd., RLLLP; Lake at CPP, LLC; Lake Front, LLC; Parker Ojala, LLC; Public Service Company of Colorado; Swinerton Real Estate, Inc.; W.S.A. Life, a/k/a W.S.A. Fraternal Life; and Mark Paschall, in his official capacity as Treasurer of Jefferson County, Respondents.
    No. 03SA329.
    Supreme Court of Colorado, En Banc.
    March 1, 2004.
    Duncan, Ostrander & Dingess, P.C., Robert R. Duncan, Donald M. Ostrander, James Birch (Special Counsel), T. Daniel Platt (Special Counsel), Denver, Colorado, Attorneys for Petitioner.
    Faegre & Benson LLP, Leslie A. Fields, John R. Sperber, M. Patrick Wilson, Patrick T. Madigan, Denver, Colorado, Attorneys For Respondents Columbine Professional Plaza Association, Inc.; Columbine West Medical Office Building, Ltd., RLLLP; Lake at CPP, LLC; Lake Front, LLC; Parker Ojala, LLC; and Swinerton Real Estate, Inc.

      Bloom Murr & Accomazzo, P.C., Joseph A. Murr, Wendy E. Weigler, Denver, Colorado, Attorneys for Respondent W.S.A. Life, a/k/a W.S.A. Fraternal Life.
    No Appearance by or on behalf of Public Service Company of Colorado; and Mark Paschall, in his official capacity as Treasurer of Jefferson County.
   Justice BENDER

delivered the Opinion of the Court.

I. Introduction

In this urban renewal case, we consider the scope of an urban renewal authority’s condemnation power under Colorado’s Urban Renewal Law, §§ 31-25-101 to -115, 9 C.R.S. (2003). In particular, we consider whether an urban renewal authority retains the power to condemn a portion of a parcel situated within an area that was determined to be blighted at the outset of an urban renewal project, even though the entire parcel has been sold by the authority, developed in accordance with its urban renewal plan, and formally released by the authority.

We hold that once a parcel within a redevelopment area has been sold, developed, and released in this manner, an urban renewal authority may not exercise its condemnation power over any part of that parcel absent renewed findings of blight by the appropriate authority. An urban renewal authority derives its power to condemn private property from our Urban Renewal Law, which authorizes condemnation of private property only to prevent or eliminate the spread of blight. Once blight has been cured or eliminated from a particular parcel, an urban renewal authority loses its statutory condemnation power with respect to that parcel. In this case, the trial court erred when it found that the parcel was still blighted and that the renewal authority retained the power to condemn it. Thus, we reverse and remand this case to the trial court with directions to grant the landowners’ motion to dismiss the condemnation action.

II. Facts and Proceedings Below

The City of Arvada created the Arvada Urban Renewal Authority (AURA) in 1981. AURA’s mandate was to oversee the redevelopment of a blighted 500-acre tract within the City of Arvada over a period of twenty-five years. The plan would thus expire in 2006. Pursuant to its mandate, AURA prepared a comprehensive plan to guide its redevelopment efforts. AURA envisioned the creation of “a mixed use urban-activity area [to] create a visually strong and attractive entranceway into the Arvada community....” To this end, AURA would enlist the aid of both private and public entities to provide “commercial, office, retail, and residential development opportunities to serve the needs of the City of Arvada and the regional area.”

The original redevelopment area included an eight-acre parcel containing a quarry lake. This parcel was purchased by developer Crow-CISI in the mid-1980s along with a 35-acre tract that lies immediately to the west of the lake. In accordance with a plan approved by AURA, Crow-CISI built the Arvada Marketplace on the 35-aere tract. The marketplace housed four anchor stores — Sam’s Club, Gart Sports, Office Depot, and Home Base — as well as several other stores and restaurants.

When Crow-CISI completed construction of the Arvada Marketplace, AURA issued Crow-CISI a “Certificate of Completion of Improvements and Renunciation of Right of Re-Entry for Condition Broken,” which covered both the 35-acre Arvada Marketplace and the quarry lake parcel. AURA intended the certificate to be “a conclusive determination and satisfaction of the obligation of [Crow-CISI] to construct ... Improvements on the Property,” and included a clause confirming that “all the Improvements conform to the uses specified in the Arvada Urban Renewal Plan.” AURA also surrendered its right to re-enter both properties in the following terms:

The Authority’s Rights of Re-entry for Condition Broken as reserved in the Deeds is hereby terminated as to the Property because the condition recited in the Deeds has been fulfilled as to the Property. The Authority renounces said right of Re-entry in favor of [Crow-CISI], their successors and assigns, to have and to hold the Property forever so that neither the Authority nor any of its successors in interest shall at any time hereafter have, claim, or demand any right, title or interest in or to the Property or any part thereof....

After the Arvada Marketplace was completed, another developer, Parker Ojala, purchased a thirteen-acre parcel that lies immediately to the east of the quarry lake from AURA. Parker Ojala purchased this parcel for the purpose of building a high-quality office park with an adjacent lake. .Around the same time, a member of the Parker Ojala group purchased the quarry lake parcel from Crow-CISI. Allan Ojala of the Parker Ojala group attended several public meetings held by AURA at which he described his plans for the office park, including the improvements he expected to add to the lake.

Parker Ojala later submitted its development plan, which included a site plan encompassing the lake, to AURA. After securing AURA’s approval for the office park, Parker Ojala constructed the Columbine Professional Plaza and improved the lake property by adding walking paths, landscaping, picnic areas, and fountains. During the construction process, Parker Ojala engaged an architecture firm to prepare drawings showing how the lake property was to be integrated into the office park. One of these plans depicted the landscaping and improvements that were constructed around the lake, and this plan was approved by the City of Arvada.

When the Columbine Plaza was completed, AURA issued Parker Ojala a certificate of ■approval covering-the office park tract. The certificate stated that the developer had satisfactorily completed the project and that “all of the improvements conform with the uses specified in the Arvada Urban Renewal Plan.” The certificate also released the office park property from AURA’s right of re-entry using nearly identical language to that used in the certificate issued to Crow-CISI.

Approximately three years after the office park was completed, the Arvada Marketplace lost one of its anchor stores when Home Base went bankrupt and closed its store. The Trammel Crow Company (now the manager of the Arvada Marketplace) sought new retailers to fill the empty space and eventually secured a letter of intent from Wal-Mart.

In a letter to AURA’s executive director, Tim Steinhaus, Trammel Crow described the conditions of the Wal-Mart deal. Wal-Mart agreed to pay $13.5 million for the Home Base property, subject to an expected sales tax reimbursement of $7.5 million, which brought the net purchase price to $6 million. In order to accommodate the planned superstore and parking lot, several of the surrounding businesses, including the Office Depot and Gart Sports, would be required to relocate, reduce the size of their retail space, or terminate their leases. In addition, Wal-Mart would have to acquire “some portion of the adjacent Lake Property at an acceptable price.”

Trammel Crow also predicted that, despite the costs associated with bringing Wal-Mart into the Arvada Marketplace, Wal-Mart would eventually prove to be a major asset to the area. In particular, Trammel Crow estimated that Wal-Mart would generate between $3 and $3.5 million in sales tax revenue for the City of Arvada each year.

Trammel Crow requested that AURA exercise its condemnation power to acquire the lake property in accordance with Wal-Mart’s conditions. AURA first tried to discuss a purchase of the lake property, but when the owners refused, AURA initiated a condemnation action.

■ The petitioners before us, whom we refer to collectively as “Columbine,” were the respondents in the trial court. They consist of owners, tenants, and other parties who possess an interest in the Columbine Office Park property. In the trial court, Columbine sought to dismiss AURA’s condemnation action, arguing that AURA has no authority to condemn the lake property because the blight that originally affected the lake parcel had been eliminated' or cured. The trial court rejected the motion.

The trial court found that “nothing has happened since the [1981 blight finding] to change the character of the quarry pond itself.” The court did state, however, that “some very attractive amenities have been constructed all around [the lake] and it has been a great asset to [the Columbine Office Plaza].” The court also opined that Parker Ojala “built and ... utilized ... the pond very effectively.” The court acknowledged the certificates of release and conceded that Columbine was probably right to argue that AURA had “abrogated [its] right to reenter.” Nonetheless, the court held that these factors did not “override the simple fact in this case that the lake has never been redeveloped,” and therefore concluded that the lake was blighted.

The following day at the immediate possession hearing, the trial court stated that the lake property and the office plaza were owned separately but found that the lake property “is a subservient estate and the office buildings a dominant estate.” The court went on to find that the office buildings would be damaged as a result of the development of the condemned portion of the lake and awarded Columbine $190,000.00 in damages. The court granted a stay of execution for one week while Columbine sought extraordinary relief in this Court. We issued a rule to show cause and an order staying all further proceedings pending resolution of this Rule 21 petition.

For reasons we explain below, we now hold that AURA does not have the authority to condemn the lake parcel because the quarry lake is no longer blighted. Accordingly, before AURA can initiate any condemnation action with respect to the lake property, the City of Arvada must determine whether the area AURA seeks to condemn is currently blighted as that term is defined in Colorado’s Urban Renewal Law. § 31-25-101 to -115, 9 C.R.S. (2003).

III. Analysis

Two issues must be decided in this case. The first is whether the City of Arvada’s 1981 blight finding has been cured or eliminated by subsequent development of the quarry lake parcel. The second is whether, if the blight has been cured, AURA nonetheless retains the power to condemn the quarry lake parcel pursuant to the urban renewal plan, which remains in effect until 2006. Because both of these questions are legal in nature and require construction of our Urban Renewal Law, we review the trial court’s decision in this case de novo. See Simpson v. Bijou Irrigation Co., 69 P.3d 50, 58 (Colo.2003) (a trial court’s interpretations of Colorado statutes or case law are reviewed de novo).

For reasons we explain below, we hold that neither the quarry lake parcel nor the shopping center is subject to the City of Arvada’s 1981 blight finding. Without the support of the 1981 finding, the statutory basis underlying AURA’s condemnation power over the lake parcel no longer exists. Absent renewed findings of blight on the part of the City of Arvada, then, AURA no longer has the power to exercise its condemnation powers over the quarry lake parcel.

A. Blight

Columbine argues the “blight” that affected the quarry lake in 1981 has been cured or eliminated by the improvements added during the construction of the office plaza. As evidence, Columbine cites the certificates of release, through which Columbine contends AURA “acknowledged that the 1981 findings of blight had been effectively eliminated and/or cured by subsequent redevelopment [of the lake property].”

In response, AURA acknowledges that it did sell the lake parcel to Crow-CISI, which in turn sold it to Parker Ojala, but maintains that the lake was never redeveloped pursuant to AURA’s urban renewal plan. Thus, AURA maintains that none of the improvements added to the lake by Parker Ojala affect the City of Arvada’s original blight determination or AURA’s power to condemn the quarry lake pursuant to its statutory authority.

Before a municipality may create an urban renewal authority or adopt an urban renewal project, the municipality must hold a public hearing and find that a slum or blighted area exists in the municipality. See §§ 13-25-104(l)(a) and (b), 13-25-107(1), 9 C.R.S. (2003). See also City and County of Denver v. Block 173 Assoc., 814 P.2d 824, 828 (Colo.1991) (“The requirement that the city council make a finding that the area in question is blighted ... is a prerequisite to adoption of an urban renewal plan.”). Absent a finding of blight or slum conditions, an urban renewal authority is powerless to act. See 11 McQuillin, Municipal Corporations § 32.11 (3d ed. 2000) (“The power of eminent domain, though inherent in the state ..., cannot be exercised without a legislative declaration of its objects and purposes.”).

A “blighted area” is defined by statute as one that “in its present conditions and use ... substantially impairs or arrests the sound growth of the municipality ... or constitutes an economic or social liability.” § 31-25-103(2), 9 C.R.S. (2003). In addition, at least four of the following factors must be present before an area can be considered blighted:

(a) Slum, deteriorated, or deteriorating structures;
(b) Predominance of defective or inadequate street layout;
(c) Faulty lot layout in relation to size, adequacy, accessibility, or usefulness;
(d) Unsanitary or unsafe conditions;
(e) Deterioration of site or other improvements;
(f) Unusual topography;
(g) Defective or unusual conditions of title rendering the title nonmarketable;
(h) The existence of conditions that endanger life or property by fire and other causes;
(i) Buildings that are unsafe or unhealthy for persons to live or work in because of building code violations, dilapidation, deterioration, defective design, physical construction, or faulty or inadequate facilities;
(j) Environmental contamination of buildings or property; [or]
(k) Inadequate public improvements or utilities.”

§ 31-25-103(2)(a)-(k), 9 C.R.S. (2003).

The statute does not directly address how blight is cured or eliminated. In the absence of statutory guidance, we apply well-settled rules of statutory construction and construe the statute in a manner that effectuates the intent of the General Assembly and the “beneficial purpose of the legislative measure.” Matter of Estate of Royal, 826 P.2d 1236, 1238 (Colo.1992) (citations omitted).

The intent of Colorado’s Urban Renewal Law is to prevent and eliminate the spread of blight through, where necessary, “acquisition, clearance, and disposition [of property] subject to use restrictions.” § 31-25-102(2), 9 C.R.S. (2003). To accomplish this task, the General Assembly has authorized urban renewal authorities to transfer property to private entities for redevelopment. In fact, the General Assembly expressed a preference for ameliorating blight through private redevelopment in section 31-25-107(3.5)(g), which provides that an urban renewal plan should “afford maximum opportunity ... for the rehabilitation or redevelopment of the urban renewal area by private enterprise.” To ensure that private redevelopment accords with the goals of an urban renewal project, section 31-25-106(1) authorizes a renewal authority to sell property acquired or held by the authority “subject to such covenants, conditions, and restrictions ... as it deems ... necessary to carry out the purposes of [the Urban Renewal Law].”

In this case, AURA employed precisely these statutory procedures to address the blighted condition of the quarry lake. AURA sold the lake and the Arvada Marketplace parcels to Crow-CISI, a private entity, which developed the Arvada Marketplace in accordance with the purposes of the Arvada Urban Renewal plan. The deeds to both properties contain a restrictive covenant, which states that until 2016, “the Property shall only be devoted to ... the uses specified in the ... Arvada Urban Renewal Plan.” When Crow-CISI completed the Arvada Marketplace, AURA certified that the properties “conform to the uses specified in the Arvada Urban Renewal Plan.” Further, AURA stated unequivocally that the authority renounced its right of re-entry “in favor of [Crow-CISI], their successors and assigns.”

After the certificate of release was issued, Crow-CISI was free to convey the lake property to Parker Ojala, another private entity. Parker Ojala, in turn, informed AURA of its plans to incorporate the lake property into its office park. Once the office park was completed, AURA again certified that the improvements added to the office park property conformed to the specifications of the renewal plan and surrendered its right of re-entry.

Under these circumstances, we hold that the quarry lake is no longer subject to the 1981 blight determination because the statutory procedures for removing blight were followed in this case. AURA disposed of the quarry lake property according to the terms of Colorado’s Urban Renewal Law and certified that the uses to which the lake was devoted comported with the Arvada Urban Renewal Plan. After duly disposing of the lake property, certifying that the property was being used in accordance with the renewal plan, and having notice at all relevant times of Parker Oj ala’s efforts to incorporate the lake into its office park, AURA cannot now claim that the lake has never been redeveloped in accordance with the Arvada Renewal Plan. On the contrary, the quarry lake has been developed in accordance with the procedures laid out in Colorado’s Urban Renewal Law and thus can no longer be considered “blighted” under the City of Arvada’s 1981 finding.

B. AURA’s Condemnation Power

Having determined that the quarry lake is no longer subject to the City of Arvada’s 1981 blight finding, we now consider whether AURA nonetheless retains the power to acquire the lake by exercising its condemnation power.

AURA argues that as long as the redevelopment plan is in effect, it has plenary authority to condemn “any property necessary to prevent blight or deterioration.” In this case, AURA contends it must exercise its condemnation powers to “prevent the spread of blight” due to the departure of the Home Base store from the Arvada Marketplace.

To support this argument, AURA cites our holding in Rabinoff v. District Court, 145 Colo. 225, 360 P.2d 114 (1961), under which AURA claims an urban renewal authority may “condemn properties within an overall urban renewal area containing blight, regardless of whether the particular property being condemned is itself deemed blighted.”

As an initial matter, AURA overstates the significance of our Rabinoff holding. In that case we held that a municipality may make blight determinations on an area-wide rather than a structure-by-structure basis. Thus, we concluded, a municipality may consider the overall character of an area in making a blight determination, and need not assess the state of every parcel and structure within the area. See id. at 238-29, 360 P.2d at 121. Once a municipality determines that an area is blighted and creates an urban renewal authority to address that condition, the authority may exercise its condemnation power over every parcel and structure within the urban renewal area. This holding, however, addresses only the power of an urban renewal authority to act pursuant to a municipality’s initial determination that an area is blighted. Rabinoff does not address, as this case requires, whether an urban renewal authority may exercise its condemnation power over parcels that have already been sold by the authority and redeveloped in accordance with the goals of an urban renewal plan.

Even if we were to construe Rabinoff more broadly, however, AURA’s argument that it may condemn the lake property to prevent the spread of blight on the Arvada Marketplace parcel fails for another reason. Like the lake parcel, the Arvada Marketplace parcel was redeveloped in accordance with the statutory procedures laid out in our Urban Renewal Law and is therefore no longer subject to the City of Arvada’s 1981 blight finding. Thus, AURA cannot condemn the lake parcel to rectify blight on the Arvada Marketplace parcel unless the City of Arvada conducts public hearings and makes a renewed finding of blight pertaining to the shopping center as well. See § 31-25-107(1).

The Supreme Court of Connecticut reached a similar conclusion in Aposporos v. Urban Redevelopment Commission, 259 Conn. 563, 790 A.2d 1167 (2002). In Aposporos, the plaintiffs owned a diner that was located within an urban renewal area. The urban renewal plan was first adopted in 1963 to address blight in a section of downtown Stamford. Roughly twenty years later, the plan was amended when merchants in the urban renewal area grew concerned about the effects a new mall constructed in another part of the city would have on their businesses. The amended plan called for construction of housing and retail stores in the redevelopment area and authorized the condemnation of the plaintiffs’ property. Because of a downturn in the real estate market, however, that plan was never realized. A few years later, when the plan was due to expire, the renewal authority voted to extend the plan to allow economic conditions to improve. When they did, the authority again modified the plan, which called for a new construction project and authorized condemnation of the plaintiffs’ property.

Under these circumstances, the Supreme Court of Connecticut held that the redevelopment authority could not rely on the initial blight finding “indefinitely to amend and extend a redevelopment plan to respond to conditions that did not exist, or to accomplish objectives that were not contemplated, at the time that the original plan was adopted.” Aposporos, 790 A.2d at 1175. To do so, the court cautioned, would “confer on redevelopment agencies an unrestricted and unreviewable power to condemn properties for purposes not authorized by the enabling statute and to convert redevelopment areas into their perpetual fiefdoms.” Id. The court went on to hold that the initial blight finding did not relate to the redevelopment goals identified in the amended urban renewal plan and thus found that the renewal authority had no statutory authority to condemn the plaintiffs property. Id. at 1176.

We agree with the conclusions reached by the Aposporos court, but for different reasons. We acknowledge, as AURA points out, this is not a case where the renewal authority repeatedly modified and extended the original renewal plan. Nonetheless, we hold that when AURA sought to exercise its condemnation power over the lake parcel for the benefit of the Arvada Marketplace, when neither parcel was subject to the City of Arva-da’s 1981 blight finding, it sought to exercise its powers “for purposes not authorized by the enabling statute.”

A renewal authority may engage in activity pursuant to an urban renewal plan only where “a statutorily recognized public purpose is the stated basis for [the] action.” Thornton Dev. Auth. v. Upah, 640 F.Supp. 1071, 1081 (D.Colo.1986). This requirement ensures that condemnation actions undertaken pursuant to an urban renewal project do not run afoul of the constitutional requirement that private property be taken only for a public use. See Berman v. Parker, 348 U.S. 26, 75 S.Ct. 98, 99 L.Ed. 27 (1954) (urban renewal project undertaken for the purpose of eliminating blight or slum is undertaken for a valid public purpose in accordance with the Taldngs Clause of the Fifth Amendment).

Under our Urban Renewal Law, the only valid public purpose for which an urban renewal plan may be adopted is to eliminate or prevent the spread of slum or blight. See §§ 31-25-102(1) and (2), 31-25-107(1), 9 C.R.S. (2003). See also Rabinoff, 145 Colo. at 234, 360 P.2d at 119 (“[T]he acquisition of properties and the elimination of their slum or blighted character constitutes a public purpose.”). Once that purpose has been achieved, an authority may no longer rely on a municipality’s initial blight determination to condemn property because it can no longer exercise its condemnation powers in furtherance of a valid public purpose. Thus, where blight has been eliminated from a parcel that lies within an urban renewal area, an urban renewal authority no longer has any statutory basis to exercise its condemnation power over or for the benefit of that parcel.

In accordance with our analysis above, we hold that AURA no longer has any statutory authority to condemn the quarry lake parcel. As we explain above, neither the lake parcel nor the Arvada Marketplace parcel is subject to the City of Arvada’s 1981 blight finding. Thus, the statutory basis for AURA’s authority to condemn the lake parcel — the elimination of blight — is no longer present. Without a statutorily recognized public purpose, AURA is powerless to exercise its condemnation power over the quarry lake parcel unless the City of Arvada makes a new determination that the area AURA seeks to condemn, in its current condition, is blighted.

Conclusion

For the reasons given above, we reverse the trial court and remand this case to that court with directions to grant Columbine’s motion to dismiss.

      . The lake parcel was historically used as a gravel mining pit. After the mine was abandoned, the lake formed when the pit filled with water.

      . The United States Supreme Court considered the constitutionality of urban renewal projects that involve the condemnation of private property in Berman v. Parker, 348 U.S. 26, 75 S.Ct. 98, 99 L.Ed. 27 (1954). In that case, the Court held private property, including structures that are not themselves substandard, may be taken to ameliorate or prevent the spread of blight. See Berman, 348 U.S. at 33-34, 75 S.Ct. 98. The Court further held that once an area is determined to be blighted, an urban renewal authority may transfer condemned property to a private entity for redevelopment without running afoul of the "public use” requirement of the Takings Clause of the Fifth Amendment. Id. at 33-34, 75 S.Ct. 98. In defense of this holding, the Court noted, "the public end [of removing blight] may be as well or better served through an agency of private enterprise than through a department of government.” Id. at 33-34, 75 S.Ct. 98.
      We adopted the Berman analysis in Rabinoff v. District Court, 145 Colo. 225, 360 P.2d 114 (1961). In Rabinoff, we held that where property is condemned pursuant to an urban renewal project and then sold to a private entity for redevelopment, "[t]he acquisition and transfer to private parties is a mere incident of the chief purpose of the act which is rehabilitation of the area." Rabinoff, 145 Colo. at 233, 360 P.2d at 119.

      . In 1981, when the original blight determination was made, a "blighted area” was defined in substantially similar terms, however only one of the necessary factors was required to be present. See § 13-25-103(2), 12B C.R.S. (1986) (repl. vol.).

      . As an example of the extent of the power AURA claims it has, AURA’s executive director, Tim Steinhaus, testified that he believed the renewal authority could "go in and buy up any property within the project area and ... go in and condemn any property in the project area, no matter what the condition is and no matter if it had just been built."
      Upon further questioning, Steinhaus went on to say that he believed the renewal authority could condemn a property simply because the authority was dissatisfied with a retailer's economic performance. Thus, for example, if AURA were dissatisfied with the economic performance of the Gart Sports store, the authority could condemn the Gart Sports store and replace it with a retailer who would generate more revenue.
      As our holding below indicates, this characterization far exceeds an urban renewal authority's power to act pursuant to a municipality's initial blight determination.

      . Although we hold that AURA no longer has any statutory power over the quarry lake parcel, it retains the power to enforce the restrictive covenants included in the deed to the quarry lake parcel. As AURA points out, the covenant provides that until 2016, the property must be "devoted to ... the uses specified in the ... plan.” Thus, if the owners of the lake parcel ever cease using the lake in accordance with this covenant, AURA could rely on the deed to ensure that the purposes of the renewal plan are achieved.


source: Caselaw Access Project

license: Public Domain

text:
    Michael J. GUYERSON, Petitioner, The PEOPLE of the State of Colorado, Respondent.
    No. 03PDJ077.
    Feb. 19, 2004.

      Attorney Regulation. Michael J. Guyer-son was readmitted to the practice of law following a full readmission proceeding.
    Opinion issued by a Hearing Board consisting of Presiding Officer RALPH G. TORRES, and Hearing Board members MADELINE A. COLLISON and ROBER M. MAES, both members of the bar.
   OPINION AND ORDER READMITTING MICHAEL J. GUYERSON TO THE PRACTICE OF LAW

ATTORNEY READMITTED TO THE PRACTICE OF LAW

On January 7, 2004, a readmission hearing was held pursuant to C.R.C.P. 251.29(a) before a Hearing Board consisting of the Presiding Officer Ralph G. Torres and Hearing Board members Madeline A. Collison and Robert M. Maes, both members of the bar. Kim E. Ikeler, Assistant Attorney Regulation Counsel, represented the People of the State of Colorado (the “People”). Michael J. Guyerson (“Guyerson”) appeared on his own behalf. The following witnesses testified on behalf of Guyerson: Theodore A. Borrillo, Lauren Quiat, Paul D. Rubner, James B. Dean, S. Kirk Ingebretsen (by telephone), Phillip D. Barber, David E. Graven, Rev. Larry J. Donoghue, Robert Mosher and Wendy Guyerson. Michael Guyerson testified on his own behalf. Petitioner’s exhibits A, E, F, I, K, Q, U, Y, W, and X were admitted into evidence in their entirety. The following exhibits consisting of affidavits were admitted for the limited purpose of establishing they were filed: exhibits B, D, H, J, L, M, N, and 0. The first page of exhibit G was admitted into evidence. Pages 1 through 12 of exhibit P were admitted into evidence to establish that Guyerson submitted a statement in mitigation in the underlying disciplinary proceeding. Exhibit R was admitted for the limited purpose of establishing that Guyerson collected and transmitted checks to the recipients on behalf his church for a special collection involving Columbine High School.

The Hearing Board considered the testimony and exhibits admitted, the Stipulation of Facts submitted by the parties, considered the credibility of the witnesses, and made the following findings of fact, which were established by clear and convincing evidence.

I. FINDINGS OF FACT

Michael J. Guyerson took the oath of admission and was admitted to the bar of the State of Colorado on October 10, 1981, attorney registration number 11279. Guyerson was disbarred from the practice of law in Colorado by Order of the Supreme Court on June 30, 1995, effective thirty days thereafter. People v. Guyerson, 898 P.2d 1062 (Colo.1995).

Beginning in approximately 1987, Guyer-son and his wife determined to start a family. Numerous miscarriages occurred over a two-year period. Guyerson and his wife underwent costly infertility treatments and artificial insemination procedures, none of which were covered by insurance. Faced with the possibility of never being able to conceive, the Guyersons adopted a child, incurring additional expenses in adoptions fees and birth-mother medical expenses. Surprisingly, during this period of time, Mrs. Guyerson was able to conceive a child and despite tremendous health risks to the mother, a healthy child was born in 1989. Less than one year later, Mrs. Guyerson conceived another child. Consequently, over a very short span of time, the Guyerson family unexpectedly grew to include three infants. The miscarriages, medical problems, infertility and adoption expenses created physical and emotional difficulties and were devastating to the family’s financial resources. Eventually, Guyerson exhausted all savings and his family went into significant debt. Guyerson rationalized that he could obtain funds from his law firm through the submission of fraudulent expense reimbursement requests.

Beginning in late 1990 and continuing through part of 1993, Guyerson began to make certain falsified requests to his law firm for travel and other out-of-pocket expenses. Most of ■ the requests were in amounts of $200 to $300. As a result of the fraudulent billing statements, Guyerson improperly received a total amount of approximately $13,500 from his law firm. Guyerson concealed his embezzlement from his wife. Guyerson’s conduct continued until July 1993, when he was asked for receipts to substantiate certain items for which he had received funds. Guyerson, 898 P.2d 1062. He initially said he would look for related billing receipts, and subsequently submitted unrelated receipts for the funds in question. When confronted, Guyerson finally admitted he had submitted improper expense requests and assisted the law firm in reconciliation of all accounts and records. He made full restitution to the firm and forfeited his capital account. Guyerson disclosed his misconduct to the then Office of Disciplinary Counsel. He declared bankruptcy in September 1993. After leaving the firm, Guyerson became affiliated with another law firm as special counsel and continued to practice law without incident for approximately two years during the period his disciplinary action was pending.

Thereafter, Guyerson was charged with and pled guilty to felony theft and received a one-year unsupervised deferred judgment. Guyerson, 898 P.2d at 1063. He fully complied with all terms of the stipulation in the criminal matter and charges were ultimately dismissed by court order in May 1995.

The Order of Disbarment required that Guyerson pay costs arising out of the underlying disciplinary proceeding. He paid all costs of the disciplinary action and filed the requisite affidavit with the Colorado Supreme Court indicating his compliance with all disciplinary orders pursuant to C.R.C.P. 241.21. Guyerson fully complied with all past disciplinary orders.

Following his disbarment, Guyerson sought and obtained employment in a variety of positions. He worked as a paralegal on a contract basis for several different attorneys and organizations. As part of his contract paralegal work, Guyerson billed for his services and sought reimbursement for out-of-pocket expenses, mileage and costs. Attorneys for whom Guyerson performed contract paralegal work attested to Guyerson’s accuracy with regard to his paralegal billing statements, and his honesty and integrity in his dealings with others. At one point, Guy-erson sought and obtained a position with a company as a full time paralegal, a position he coveted in order to provide health benefits to his family. However, when he believed the actions of one of the company officers were potentially unethical, he immediately resigned the position.

Guyerson also worked in the loan department of a local bank for approximately eleven months in 1999 and 2000 and prepared loan documentation. He was trusted with access to the bank’s collateral vault, he routinely issued checks for closing costs and other disbursements, and filed and recorded collateral documents, liens and releases. He also worked for American Express handling financial transactions. Both in his position at the bank and his employment with American Express, he was entrusted to handle valuable documents and assets.

Guyerson also attended night classes and, after an eighteen-month period, obtained a Certificate in Financial Planning, including several hours of business and personal ethics. Thereafter, Guyerson provided business and personal financial consulting to clients and to members of his church and community. He also presented seminars on responsible financial management through his church. In this capacity, clients routinely entrusted original documents and items of value to him for safekeeping and he handled them responsibly.

Guyerson anonymously published an article in The Docket, a publication of the Denver Bar Association, on the experiences of a disbarred attorney in the January 2003 issue. His intent in doing so was to dissuade other attorneys from engaging in the conduct that has resulted in his being disbarred, while preserving the anonymity of his family in the interests of his children.

Guyerson has been and continues to be active in his church and community. He has served as an usher collecting contributions for the church and was entrusted with the unsupervised counting of church collections. Guyerson also served on the. building and bishop’s committee of his church and was actively involved in fund' raising and budgeting for church construction and operations. He gained the trust of his church community to ethically handle funds on behalf of the church community. Guyerson presented numerous seminars and programs on financial stewardship, personal money management and making the right ethical and moral decisions regarding money and finances through his church.

Guyerson has been active in his community, volunteering as a parent and coach for the Southwest YMCA, the South Jeffco Sports Association, and Apache League Baseball. He has helped deliver Thanksgiving baskets to the needy and participated in a Habitat for Humanity Project-in Longmont, through his church. He is an involved and attentive parent to his three children.

The Guyerson family remained together throughout the difficulties arising from Guy-erson’s misconduct. They are now able to live within their means and have good income and a positive net worth, and have purposefully eradicated the financial pressures that resulted in Guyerson’s -misconduct. Guyer-son now communicates with his wife where before he did not share financial and other concerns with her. He previously believed that because clients seek a lawyer’s help in resolving problems, lawyers could not have problems themselves and could not share the problems with others. He no longer adopts this way of thinking..

Guyerson underwent therapy to assist in discovering and resolving the character deficit that led to his disbarment. He realized that he believed' at the time he was entitled to the funds, and justified taking them because of the personal stress he and his wife experienced as a result of the attempts to start a family. He rationalized his behavior, thinking the amounts he took from various clients would not harm them and would help his family. During the eight years following his disbarment, he matured considerably. Stripped of his identity as a lawyer, he evaluated the character flaws that caused the misconduct. Through this process, he realized that it is acceptable to fail and move on from a position of failure. He realized the magnitude of his actions and the disrespect this brought upon the profession and his family. He is determined to set an example for his children and the profession. Guyerson demonstrated remorse for his conduct.

II. CONCLUSIONS OF LAW

Michael J. Guyerson, is subject to the jurisdiction of this court pursuant to C.R.C.P. 251.1(b).

C.R.C.P. 251.29(a) provides:

Readmission After Disbarment. A disbarred attorney may not apply for readmission until at least eight years after the effective date of the order of disbarment. To be eligible for readmission the attorney must demonstrate the attorney’s fitness to practice law and professional competence, and must successfully complete the written examination for admission to the Bar. The attorney must file a petition for. readmission, properly verified, with the Presiding Disciplinary Judge, and furnish a copy to the Regulation Counsel. Thereafter, the petition shall be heard in procedures identical to those outlined by these rules governing hearings of complaints, except it is the attorney who must demonstrate by clear and convincing evidence the attorney's rehabilitation and full compliance with all applicable disciplinary orders and with all provisions of this Chapter. A Hearing Board shall consider every petition for readmission and shall enter an order granting or denying readmission.

People v. Klein, 756 P.2d 1013, 1016 (Colo.1988), interprets the language of the prior rule governing readmission to the bar, C.R.C.P. 21,1.22, and sets forth criteria which must be considered in readmission proceedings in order to evaluate an attorneys rehabilitation. Klein requires:

[A]ny determination of that issue [rehabilitation] must include consideration of numerous factors bearing on the respondents state of mind and ability, such as character, conduct since the imposition of the original discipline, professional competence, candor and sincerity, recommendations of other loitnesses, present business pursuits of the respondent, the personal and community service aspects of the respondents life, and the respondents recognition of the seriousness of his previous misconduct.

An attorney seeking readmission following disbarment must establish compliance with the provisions of C.R.C.P. 251.29(c). Those provisions are as follows:

The facts other than the passage of time and the absence of additional misconduct upon which the petitioning attorney relies to establish that the attorney possesses all of the qualifications required of applicants for admission to the Bar of Colorado, fully considering the previous disciplinary action taken against the attorney;
Evidence of compliance with all applicable disciplinary orders and with all provisions of this chapter regarding actions required of suspended attorneys;
Evidence of efforts to maintain professional competence through continuing legal education or otherwise during the period of suspension.

Guyerson has complied with all prior court orders, has filed the required affidavit and paid all costs of the underlying disciplinary action. He paid full restitution with interest to his law firm.

Guyerson has demonstrated through his employment and his volunteer activities that he can be trusted to collect and account for funds. In his employment as a contract paralegal, he submitted billing statements to the attorneys for whom he worked, who attested to his forthrightness and honesty in his billing practices. In his other employment as a loan document specialist and at American Express, he was entrusted with securities, promissory notes and other valuable documents and assets. He has worked diligently to stabilize his difficult personal financial situation, and has obtained a degree in financial planning in order to maintain his business and personal finances.

Through his church and other community commitments, he presented financial planning seminars, counseling others to avoid the same type of mistakes he made. Guyerson anonymously wrote an article about his misconduct and the consequences resulting from the disbarment as a means of deterring other members of the bar from similar misconduct. Through these actions, Guyerson has attempted to demonstrate his sincere remorse for his misconduct. He also openly acknowledged the wrongfulness of his actions with attorneys for whom he worked as a paralegal.

Guyerson sat for and passed the July 2003 Colorado Bar Exam and the August Multi-state Professional Responsibility Exam. He has continued to maintain his legal skills and abilities. He has taken numerous Continuing Legal Education courses to update his understanding of the law. He has endeavored to improve his paralegal services and to keep his analytical skills sharp and focused by regularly reading The Colorado Lawyer and The Annual Survey of Colorado Law.

Guyerson has made a contribution to his community through volunteer activities: he volunteers regularly at his church, and he is active in his children’s activities through the YMCA and local sports associations as a coach and volunteer parent.

Guyerson candidly admits the wrongfulness of his actions. He is determined to act as a roll model for his children. He believes that the approach he took to his disbarment to admit the gravity of his misconduct and pursue the long road of readmission to the bar has provided his children with an example of his admitting his grave mistake and demonstrating rehabilitation through action. The Hearing Board finds based on the analysis set forth above that Guyerson has established rehabilitation by a clear and convincing standard.

However, insofar as the Hearing Board is charged with the important responsibility of protecting the public, the Hearing Board finds that given the seriousness of Guyer-son’s prior misconduct, a practice monitor is warranted to oversee Guyerson’s initial representation of clients after readmission. The Hearing Board therefore imposes the condition of a practice monitor on Guyer-son’s practice for a period of one year. The practice monitor shall be selected by Guyer-son and paid by him for his services. The practice monitor shall review any and all financial transactions involving Guyerson’s legal representation of clients, and shall review Guyerson’s trust and operating accounts in the event he is in a sole practice. The practice monitor shall then submit a quarterly report with the Office of Attorney Regulation Counsel for a one year period of time effective ninety-one days from the date of this Order.

III. ORDER

It is therefore ORDERED:

1. MICHAEL J. GUYERSON’S Petition for Readmission is GRANTED;

2. Within thirty-one days of the date of this Order, Guyerson shall arrange for a practice monitor to oversee his financial transactions with his clients. The practice monitor shall oversee Guyerson’s practice for a one year period commencing thirty-one days from the date of this Order.

3. Guyerson is ordered to appear at the Office of Attorney Registration or appear before Presiding Officer Torres to be sworn in. Guyerson shall pay all necessary dues to the Office of Attorney Registration within thirty-one days of the date of this Order. Guyerson shall be given his original attorney registration number.

J). If any costs are due and owing arising from Guyerson’s readmission, Guyerson shall pay all reasonable costs within sixty (60) days of the date of this Order. If any amounts are due Guyerson, they shall be tendered to him within sixty (60) days of the date of this Order. In the event there is a dispute over costs, the parties shall file motions to that effect with the Office of the Presiding Disciplinary Judge forthwith.

      . Guyerson had become a partner at the firm in 1988.

      . C.R.C.P. 241.21 was replaced with and renumbered as C.R.C.P. 25Í.28 effective January 1, 1999.


author: BILLINGS, Presiding Judge:

text:
    2004 UT App 27
    H.C. MASSEY, Plaintiff and Appellant, v. BOARD OF TRUSTEES OF the OGDEN AREA COMMUNITY ACTION COMMITTEE, INC., a non-profit organization, Defendant and Appellee.
    No. 20020999-CA.
    Court of Appeals of Utah.
    Feb. 12, 2004.
    David J. Holdsworth, Sandy, for Appellant.
    Janet Huge Smith and Scott A. Hagen, Ray Quinney & Nebeker, Salt Lake City, for Appellee.
    Before BILLINGS, P.J., BENCH, Associate P.J., and GREENWOOD, J.
   OPINION

BILLINGS, Presiding Judge:

¶ 1 H.C. Massey appeals the district court’s order granting summary judgment to the Board of Trustees of the Ogden Area Community Action Committee, Inc. (the Board). We affirm.

BACKGROUND

¶ 2 Beginning in 1969, the Board employed Massey as executive director of the Ogden Area Community Action Committee, Inc. (the Committee), a Utah non-profit corporation providing assistance to low-income area residents. The Committee’s bylaws provided that Massey could be terminated only “for cause.” Massey served continually as executive director until November 25, 1997, when the Board voted to terminate his employment. Following his termination, Massey filed a civil action in the U.S. District Court for the District of Utah (the federal suit) alleging, inter alia, violations of 42 U.S.C. section 1983 (1997). Massey argued that when the Board terminated his employment without notice and hearing, it deprived him of a property interest without constitutional due process. See 42 U.S.C. § 1983 (1997).

¶ 3 The Board ultimately filed a motion for summary judgment, contending Massey could not prevail on his section 1983 claim because the Board was not a state actor and was not engaged in state action when it terminated Massey. In January 2000, the federal court granted the Board’s motion for summary judgment and dismissed Massey’s federal suit with prejudice. Massey appealed to the U.S. Court of Appeals for the Tenth Circuit, which affirmed the lower court’s grant of summary judgment for the Board. See Massey v. Board of Trs., No. 00-4037, 2001 WL 120438, 2001 U.S.App. LEXIS 2171 (10th Cir. Feb. 13, 2001) (unpublished opinion), cert. denied.

¶4 Thereafter, on November 21, 2001, Massey filed suit in Utah Second District Court (the state suit) for breach of contract and wrongful termination. The Board filed a motion for summary judgment arguing that the judgment rendered in the federal suit barred Massey’s claims in state court on principles of res judicata. The district court agreed. The court granted the Board’s motion for summary judgment and dismissed Massey’s state suit with prejudice. Massey appeals.

ISSUE AND STANDARD OF REVIEW

¶ 5 Massey claims the district court erred in granting summary judgment to the Board on the basis of res judicata. “ ‘A trial court may properly grant summary judgment when “there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law.” ’ ” Snyder v. Murray City Corp., 2003 UT 13,- ¶ 16, 73 P.3d 325 (alteration in original) (quoting WebBank v. American Gen. Annuity Serv. Corp., 2002 UT 88,¶ 10, 54 P.3d 1139 (quoting Utah R. Civ. P. 56(c))). “ ‘The propriety of a trial court’s grant of summary judgment is a question of law.’ ” Id. (citation omitted). “ We thus review the trial court’s legal conclusions for correctness, according them no deference.’ ” Id. (citation omitted). The “determination of whether res judicata bars an action presents a question of law[,]” which we review for correctness. Macris & Assocs. v. Neways, Inc., 2000 UT 93,¶ 17, 16 P.3d 1214.

ANALYSIS

I. Choice of Law

¶ 6 As a preliminary matter, the Board asserts that because the first judgment against Massey was entered in federal court on an issue of federal law, “federal law must be applied in determining the preclu-sive effect of that judgment.” Hence, the Board would have us apply the federal common law of res judicata instead of relying on Utah state common law. To support this proposition, the Board cites to United States Supreme Court case law, see Heck v. Humphrey, 512 U.S. 477, 488 n. 9, 114 S.Ct. 2364, 2373 n. 9, 129 L.Ed.2d 383 (1994) (“State courts are bound to apply federal rules in determining the preclusive effect of federal-court decisions on issues of federal law.”), and ease law from the Supreme Court of Kansas. See Stanfield v. Osborne Indus., Inc., 263 Kan. 388, 949 P.2d 602, 608 (1997) (“[W]hile Kansas law does not appear to differ significantly from the federal law regarding the preclusion doctrines, the controlling authority in this case is federal law.”). See also Restatement (Second) of Judgments § 87 (1982) (“Federal law determines the effects under the rules of res judicata of a judgment of a federal court.”).

¶ 7 In Utah, there is no case law clearly establishing the applicability of federal preclusion law to federal judgments in Utah state courts. We conclude that the current majority and better-reasoned approach is to apply federal law. However, we emphasize that there will usually be no difference in outcome from applying Utah common law on res judicata.

II. Res Judicata

¶ 8 Under Utah law, “[t]he doctrine of res judicata serves the important policy of preventing previously litigated issues from being relitigated.” Salt Lake City v. Silver Fork Pipeline Corp., 913 P.2d 731, 733 (Utah 1995). “The doctrine of res judicata embraces two distinct branches: claim preclusion and issue preclusion.” Macris & Assocs. v. Neways, Inc., 2000 UT 93,¶ 19, 16 P.3d 1214. This appeal involves claim preclusion. “Generally, ‘claim preclusion bars a party from prosecuting in a subsequent action a claim that has been fully litigated previously.’ ” Miller v. USAA Casualty In-sur. Co., 2002 UT 6,¶ 58, 44 P.3d 663 (quoting Culbertson v. Board of County Cormn’rs, 2001 UT 108,¶ 13, 44 P.3d 642).

¶ 9 The “[f]ederal law of claim preclusion ... requires: (1) a judgment on the merits in the earlier action; (2) identity of the parties or their privies in both suits; and (3) identity of the cause of action in both suits.” Yapp v. Excel Corp., 186 F.3d 1222, 1226 (10th Cir.1999). Massey concedes the identity of the parties.

¶ 10 Massey, in his brief, however, claims that his state suit is not based on the same cause of action litigated in the federal suit because “the claims are different in fundamental theory.” Neither federal law nor Utah law supports this assertion.

¶ 11 “The Tenth Circuit Court of Appeals in Petromanagement Corp. v. Acme-Thomas Joint Venture, 835 F.2d 1329 (10th Cir.1988) adopted the transactional approach, advocated by the Restatement (Second) of Judgments 24 (1982),” to determine the identity of claims. Clark v. Haas Group, Inc., 953 F.2d 1235, 1237-38 (10th Cir.1992). The federal approach bars claims not brought in the former action when the claims arise from a “ ‘transaction, or series of connected transactions.’ ” Id. at 1238 (quoting Restatement (Second) of Judgments § 24 (1982)). What constitutes a “transaction” or “series of transactions” is determined by “ ‘giving weight to such considerations as to whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties’ expectations or business understanding or usage.’ ” Id. (quoting Restatement (Second) of Judgments § 24 (1982)).

¶ 12 In this case, the federal court specifically stated in its memorandum decision granting the Board summary judgment that Massey’s section 1983 claim was based on allegations that he was wrongfully terminated from his employment. See Massey v. Board of Trs., No. 00-4037, 2001 WL 120438, 2001 U.S.App. LEXIS 2171 (10th Cir. Feb. 13, 2001). Both the federal suit and the state suit clearly were based on the same facts— the termination of Massey’s employment by the Board. The claims Massey brought in the state suit and the federal suit are unquestionably part of the same transaction; they are related in time, space, origin, and motivation, and form a convenient trial unit that any defendant could expect to be brought in one suit. We find it impossible to conclude otherwise. Hence, under federal law, the identity-of-claims prong of claim preclusion is satisfied. Because Massey’s wrongful termination claim under state law stems from the same claim as the section 1983 claim, Massey “could and should have brought [his state claims] in the prior suit.” American Estate Man. Corp. v. International Inv. & Dev. Corp., 1999 UT App 232, ¶ 12, 986 P.2d 765.

¶ 13 Finally, Massey contends that the federal court’s grant of summary judgment was not “on the merits” because the state-actor prong of section 1983 is a “threshold issue.” We disagree.

¶ 14 In Gomez v. Toledo, 446 U.S. 635, 100 S.Ct. 1920, 64 L.Ed.2d 572 (1980), the United States Supreme Court definitively stated:

By the plain terms of [section] 1983, two ... allegations are required in order to state a cause of action under that statute. First, the plaintiff must allege that some person has deprived him of a federal right. Second, he must allege that the person who,has deprived him of that right acted under color of state or territorial law.

Id. at 640, 100 S.Ct. at 1923. Hence, section 1983 claims require the plaintiff to prove two elements, one of which is state action. The Gomez court clearly did not view the state-actor prong as a mere “threshold issue.”

¶ 15 In the case at hand, the federal court granted the Board summary judgment and dismissed Massey’s section 1983 claim with prejudice. The federal court held that Massey failed to establish state action, one of two required elements a plaintiff must show when alleging a section 1983 claim. Previous to this ruling, the federal court granted the Board’s motion to dismiss Massey’s claims that the Board was improperly constituted and that the Board improperly interfered with the Committee’s elections. Hence, the grant of summary judgment determined on the merits that Massey had no cause of action, left no claims pending, and effectively-ended the federal litigation.

CONCLUSION

¶ 16 We conclude that all three prongs of claim preclusion are satisfied in this case, and thus, Massey’s claims are barred. We therefore affirm.

¶ 171 CONCUR: PAMELA T. GREENWOOD, Judge.

¶ 18 I CONCUR IN THE RESULT: RUSSELL W. BENCH, Associate Presiding Judge.

      .In addition, many other state jurisdictions have adopted this approach. See, e.g., Donnelly v. Eklutna, Inc., 973 P.2d 87, 92 (Alaska 1999) ("[S]tate law does not govern the res judicata issue in this case; instead, we must look to federal law to determine the preclusive effect of the federal litigation.”); Garcia v. General Motors Corp., 195 Ariz. 510, 990 P.2d 1069, 1072 (Ariz.Ct.App.1999) ("Plaintiffs correctly assert that federal law, the law of the forum to first decide the issue, governs the effect to be given the ... federal court ruling.”); International Bd. of Elec. Workers v. Hawaiian Tele. Co., 68 Haw. 316, 713 P.2d 943, 955 n. 17 (1986) ("In a subsequent state court action, the collateral estoppel effect of a federal law ruling in a prior federal court adjudication is a question of federal law.”); Reeder v. Succession of Palmer, 623 So.2d 1268, 1271 (La.1993) ("When a state court is required to determine the preclusive effects of a judgment rendered by a federal court exercising federal question jurisdiction, it is the federal law of res judicata that must be applied.”); Brown v. Osier, 628 A.2d 125, 127 (Me.1993) ("In determining the preclusive effect of a federal court judgment, federal law controls."); Edwards v. First Fed. Savs. & Loan Ass’n, 102 N.M. 396, 696 P.2d 484, 492 (N.M.App.1985) ("[F]ederal law ... governs the preclusive effect of the federal judgment in this case which decided a federal question.”); Veiser v. Armstrong, 688 P.2d 796, 799 (Okla.1984) ("Federal law governs both the preclusive and res judicata effect of the prior federal-court judgment....”).

      . McCarthy v. State, 1 Utah 2d 205, 265 P.2d 387, 388 (1953) and Stables v. Homestead Golf Club, Inc., 2003 UT App 411,¶¶ 13-18, 82 P.3d 198, both appear to apply Utah res judicata rules to federal judgments in Utah courts, but neither decision directly deals with the issue of choice of law.

      . At oral argument, counsel seemed to concede this issue, but in an abundance of caution we address it on the merits.

      . The analysis under Utah law is substantially similar. Utah law looks to the “ 'aggregate of operative facts, ... the situation or state of facts which entitles a party to sustain an action,' " to determine whether two suits stem from the same cause of action. American Estate Man. Corp. v. International Inv. & Dev. Corp., 1999 UT App 232,¶ 9, 986 P.2d 765 (quoting Swainston v. Intermountain Health Care, Inc., 766 P.2d 1059, 1061 (Utah 1988)). The "[ajpplication of the doctrine of res judicata [in Utah] is not depen-dant upon the label placed upon a cause of action.... Rather than resting on the specific legal theory invoked, res judicata ... turn[s] on the essential similarity of the underlying events giving rise to the various legal claims.” Burnett v. Utah Power & Light Co., 797 P.2d 1096, 1098 (Utah 1990) (quotations and citations omitted).

      . Though Massey does contest the finality of the judgment, the main thrust of his argument is that the judgment was not "on the merits” as discussed above. However, we conclude the judgment in this case is final. Where parties have been afforded an opportunity to he heard and to contest the issues, "[f]or the purposes of the doctrine of res judicata, a judgment entered on a motion for summary judgment is just as binding as a judgment entered after a trial of the facts.” 50 C.J.S. Judgment § 716 (1997). Federal law provides that a grant of summary judgment may be a judgment on the merits for the purposes of res judicata. See State Farm Mut. Auto. Ins. Co. v. Dyer, 19 F.3d 514, 518 n. 8 (10th Cir.1994).

      . Massey also argues that had he brought his state claims in the federal suit, the federal court would have exercised its discretionary authority to dismiss Massey’s supplemental state law claims without prejudice when it dismissed the section 1983 claim on summary judgment. However, Massey concedes, as he must, that federal courts may, but are not required to dismiss pendant state claims after federal claims are dismissed. See 28 U.S.C. § 1367(c) (1998). Furthermore, the Tenth Circuit has held that " ‘[a] federal court justifiably may retain jurisdiction of the pendant claims when substantial time and energy have been expended on the case prior to the disposition of the federal claims.’ ” Anglemyer v. Hamilton County Hosp., 58 F.3d 533, 541 (10th Cir.1995) (quoting Jones v. Intermountain Power Project, 794 F.2d 546, 550 (10th Cir.1986)).