Can a town reject a second land use application as identical when the applicant submits new evidence and a revised grading plan? Potter v. Town of Leeds Explained

Background and facts

Lynn Potter and Dianna Powell (Landowners) purchased an 11.94-acre parcel in Leeds, Utah, intending to build a residence and a commercial building. The parcel contained slopes exceeding 30%, placing it squarely within the Town of Leeds’s Hillside Ordinance—which prohibits development on land with slopes of 30% or greater—unless the parcel had been subdivided before January 1, 1999. The Town twice denied Landowners’ site plan applications, and three district court petitions for judicial review were all dismissed. The second district court also awarded the Town $48,618.84 in attorney fees under the ombudsman advisory opinion statute, Utah Code § 13-43-206(12). Both sides appealed.

Key legal issues

The consolidated appeal presented four principal questions: (1) whether Landowners preserved their legal theory for challenging dismissal of the first lawsuit; (2) whether that dismissal should have been with prejudice given the incurable nature of the exhaustion defect; (3) whether the second lawsuit was properly dismissed on the grounds that the second application was materially identical to the first and that claims were barred by issue preclusion; and (4) whether the ombudsman advisory opinion statute’s use of the word “may” grants district courts discretion to decline a fee award even when statutory prerequisites are met.

Court’s analysis and holding

The court affirmed dismissal of the first lawsuit because Landowners failed to preserve their appellate theory—that the Town can issue multiple appealable land use decisions on a single application—having argued below only that no final decision was made at the June 2021 meeting. On the prejudice question, the court held that a dismissal for failure to exhaust administrative remedies should be with prejudice when the defect cannot be cured—here, because Landowners’ thirty-day administrative appeal window had long closed. A without-prejudice dismissal is appropriate only where the litigant can practically refile.

The court reversed dismissal of the second lawsuit. The second application included a materially different cover page, a revised rough grading plan proposing different cut-and-fill volumes and a new road path, and a sworn affidavit from a former council member attesting to a pre-1999 subdivision approval—evidence powerful enough to secure a 4-1 Planning Commission vote in Landowners’ favor. These differences were legally significant: the Town’s own ordinance expressly contemplates successive applications and sets no limit on their number. Because the applications were not materially identical, no exhaustion-of-remedies problem carried over from the first lawsuit. Issue preclusion likewise failed because the Town Council never rendered a definitive merits-based decision on whether the parcel was subdivided before 1999—the central question was left open at successive meetings and never actually voted upon.

On attorney fees, the court held that the word “may” in the ombudsman advisory opinion statute is permissive, affording district courts discretion to deny fees even when all statutory prerequisites are satisfied. Because the second lawsuit was reinstated, the fee award in that case was vacated pending final resolution of which party substantially prevailed.

Practice implications

Practitioners representing land use applicants should meticulously document every material difference between successive applications—revised engineering plans, changed road alignments, and newly obtained sworn evidence—because those differences are the dispositive shield against both exhaustion-of-remedies dismissals and issue preclusion. Equally important, counsel challenging dismissal orders must ensure that the specific legal theory advanced on appeal was squarely presented to the district court; raising the overarching issue is insufficient to preserve a distinct sub-theory. Finally, when a client’s exhaustion defect is truly incurable, practitioners should anticipate and address the with-prejudice question at the trial level rather than leaving it for appellate correction.