Ranes & Shine, LLC v. MacDonald Miller Alaska, Inc., Alaska (2015)
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Transcript of Ranes & Shine, LLC v. MacDonald Miller Alaska, Inc., Alaska (2015)
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7/25/2019 Ranes & Shine, LLC v. MacDonald Miller Alaska, Inc., Alaska (2015)
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Notice: This opinion is subject to correction before publication in the PACIFICREPORTER.
Readers are requested to bring errors to the at tention of the Clerk of the Appel late Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, em ail
THESUPREMECOURTOFTHESTATEOFALASKA
RANES&SHINE,LLC,
Appellant,
v.
MACDONALDMILLER
ALASKA,INC.,
Appellee.
_______________________________)
AppealfromtheSuperiorCourtoftheStateofAlaska,Third
JudicialDistrict,Anchorage,JohnSuddock,Judge.
Appearances:BrentR.Cole,LawOfficeofBrentR.Cole,
P.C.,Anchorage,forAppellant.
JasonJ.Ruedy,LawOffices
ofRoyce&Brain,Anchorage,forAppellee.
Before:
Fabe,ChiefJustice,Winfree,Stowers,Maassen,and
Bolger,Justices.
STOWERS,Justice.
I. INTRODUCTION
In2005GordonTimmerman,thesoleownerofMacDonaldMillerAlaska,
Inc.,agreedtoreleaseaclaimMacDonaldMillerhadagainstRanes&Shine,LLC,and
topayanadditional$18,000inexchangeforequipmentRanes&Shineclaimedtoown
free of any encumbrances. Five years later First National Bank Alaska contacted
Timmerman,assertingasecurityinterestintheequipmentandrequestingitsreturn.First
)
) SupremeCourtNo.S-15222
SuperiorCourtNo.3AN-10-10232CI
OPINION
No.7003May1,2015
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NationaleventuallyfiledthissuitagainstTimmermanin2010toobtainpossessionofthe
equipment.1
Timmermanfiledathird-partycomplaintagainstRanes&Shineandits
former managing member, Thomas Ranes, asserting breach of warranty of title,misrepresentation,unfairtradepractices,andcommonlawcontractclaims.Initsanswer,
Ranes & Shine alleged among its other contentions that the applicable statutes of
limitation barredTimmermans suit becauseFirstNationalspublicly filedUniform
CommercialCode(UCC)financingstatementshouldhaveplacedTimmermanoninquiry
noticeofFirstNationalssecurityinterestintheequipmentatthetimeoftheagreement
in2005.ThesuperiorcourtdisagreedandheldRanes&Shineliableforbreachof
contractandmisrepresentation,whilealsodismissingtheclaimsassertedagainstRanes
individually.Ranes&Shineappeals.
Weaffirmthesuperiorcourtsstatuteoflimitationsandattorneysfeesand
costsrulings,aswellasvariousproceduralrulingsforthereasonsdiscussedbelow. But
wereversethecourtsdecisiontodismissthemisrepresentationclaimthatTimmermans
company,MacDonaldMiller,hadassertedagainstRanesinhisindividualcapacityand
remandforfurtherproceedingsonthatissue.
II. FACTSANDPROCEEDINGS
A. Facts
ThomasRanes,KenEmbley,andTomEmbleyformedRanes&Shine,
LLCinOctober2001.Ranesowned50%ofthecompany,andtheEmbleyseachowned
25%ofthecompany.Raneshadcompletemanagerialauthority,andtheEmbleyswere
essentiallysilentpartners.
FirstNationalsclaimsarenotrelevanttothisappeal,andwedonotdiscuss
theminanydetail.
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In2002Ranes&ShineappliedforaloanfromFirstNationalBankAlaska.
Inconnectionwiththeloan,RanesandtheEmbleyssignedapromissorynote,abusiness
loan agreement, and a commercial security agreement to secure the loan. The
commercial security agreement gave First National a security interest in variouscategoriesofcollateral,includingRanes&Shinesequipment.OnOctober30,2002,
FirstNationalfiledaUCCfinancingstatementperfectingitssecurity interestin the
equipment. First National filed a continuation of that financing statement on
August7,2007.
In2003CirclePlumbing&Heating,acompanymajority-ownedbythe
Embleys,washiredtobuildRanes&Shinesfacility. CirclehiredMacDonaldMiller
Alaska,Inc.,acompanywhollyownedbyGordonTimmerman,toprovidemechanical
servicesforthenewbuilding.
MacDonaldMillerworkedontheprojectandbilledCircle,butwasnot
promptly paid. MacDonald Miller eventually filed a lien against Ranes & Shines
buildingforapproximately$92,000.ButMacDonaldMillerreleasedthelienafewhours
later,allegedlybecauseTomEmbleycontactedTimmermanaskinghimtoreleasethe
claimsoRanes&Shinecouldsecureadditionalfundingforthebuildingproject. Tom
Embley allegedly assured Timmerman he would be paid, and Circle later paid
MacDonaldMiller$60,000in2004.Thisleftaclaimedbalanceof$32,000outstanding.
Timmermancontinuedtopursuethedebtwithoutsuccessuntilhecontacted
Ranes&ShinedirectlyandspokewithRanes.InOctober2005TimmermanandRanes
came toan agreement: inexchangefor certainequipment,Timmermanexecuteda
releaseoftheremaining$32,000debtowedtoMacDonaldMillerandpaidanadditional
$18,000toRanes&Shine.
Inthecourseofreachingthisagreement,Ranesincorrectlyrepresentedto
TimmermanthatRanes&Shineownedcleartitletotheequipment.Timmermandidnot
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conductaUCCrecordsearch;helatertestifieditwasnothisstandardpracticetodoso
andhedidntevenknowwhatUCCstoodforpriortothislawsuit.
AfterTimmerman took possession of the equipment, he stored it ina
shippingcontainer.Thereitremaineduntilthesummerof2010whenFirstNationalcontacted him. First National explained it had filed a UCC financing statement
documentingitssecurityinterestintheequipmentseveralyearsbeforeTimmermans
agreementwithRanes&Shine.FirstNationalalsostatedthattheloansecuredbythe
equipmenthadgoneintodefault. FirstNationaldemandedthatTimmermanreturnthe
equipment,butTimmermanrefused.
B. Proceedings
FirstNationalbroughtsuitagainstTimmermanin2010seekingthereturn
oftheequipment.Timmermanansweredthecomplaintandassertedthird-partyclaims
againstRanesindividuallyandRanes&ShinebasedonRanessincorrectrepresentation
thatRanes&Shineownedtheequipmentwithoutanyencumbrances.Timmerman
assertedthefollowingthird-partyclaims: (1)breachofwarrantyoftitleundertheUCC;
(2)misrepresentation;and(3)deceptivetradepracticesunderAlaskasUnfairTrade
Practices and Consumer Protection Act (UTPA). First Nationals claims against
Timmerman were disposed of on summary judgment, leaving only Timmermans
third-partyclaims.
Ranes&ShinemovedforsummaryjudgmentonTimmermansclaims
based on the applicable statutes of limitation. Superior Court Judge John Suddock
grantedRanes&Shinesmotioninpart,rulingthatTimmermansbreachofwarranty
2claimwassubjecttotheUCCsstrictfour-yearlimitationsperiod andthatTimmerman
2 See AS45.02.725(a)-(b)(Anactionforbreachofacontractforsalemust
becommencedwithinfouryearsafterthecauseofactionhasaccrued....Acauseof
(continued...)
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failedtobringhisbreachofwarrantyclaimwithinthatperiod.Thesuperiorcourtdenied
Ranes & Shines motion with respect to the misrepresentation and UTPA claims,
concludingthatthereweregenuineissuesofmaterialfactregardingwhenTimmerman
wasputoninquirynotice.ThecourtdidnotaddressacommonlawcontractclaimTimmermanhadaddedthroughanamendedcomplaintfiledwhilethepartieswere
briefingthesummaryjudgmentmotion.3
Thesuperiorcourtheldatwo-daybenchtrialinMay2013toaddressthe
remainingclaims.ThecourtruledthatTimmermansmisrepresentation,UTPA,and
commonlawbreachofcontractclaimswerenotbarredbythestatutesoflimitation
becauseTimmermanwasnotoninquirynoticeuntilhewascontactedbyFirstNational
in2010.ThecourtalsoconcludedthatTimmermanhadprovenhismisrepresentation
andbreachofcontractclaims,butnothisUTPAclaim.
Thesuperiorcourtobserved,however,thatthelawsuithadbeeninaptly
filedasapersonallawsuitbyMr.Timmermanagainst[Ranes&Shine]whenallthe
evidenceisthathewasnegotiatingandsettlingandpurchasingthisequipmentasa
corporateofficerofMacDonaldMiller.Basedonthisfinding,andfurtherfindingthat
Ranes&Shinewouldsuffernoprejudice,thecourton itsowninitiativesubstituted
MacDonaldMillerastheplaintiff.
2(...continued)
action accrueswhen the breach occurs, regardless of the aggrieved partys lackof
knowledgeofthebreach.);see also Armour v. Alaska Power Auth.,765P.2d1372,
1375(Alaska1988)(holdingthatthefour-yearUCCstatuteoflimitationsisnottolled
underthecommonlawdiscoveryruleregardlessofapurchasersknowledge).3 TimmermanscontractclaimallegedthatRanes&Shinehadnotprovided
goodandvaluableconsideration,apparentlyduetotheseizureoftheequipment,and
thatRanes&Shinebreachedthedutyofgoodfaithandfairdealingbysellingequipment
thatRanes&Shinewasnotauthorizedtosell.
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MacDonald Miller prepared a final judgment for the superior courts
signature.TheproposedfinaljudgmentstatedthattheclaimsagainstRanesindividually
weredismissed.Ranes&Shineobjected,arguingthatthesuperiorcourtsoralfindings
hadnotdismissedtheindividualclaimsagainstRanes.Thesuperiorcourtsignedtheproposedfinaljudgmentwithoutspecifically
discussingitsdecisiontodismisstheclaimsagainstRanesindividually.Thecourt
awarded MacDonald Miller $50,329.37, plus interest, attorneys fees, and costs.
Ranes&Shineappeals.
III. STANDARDOFREVIEW
Determinations of which legal authorities apply in a case and
interpretationsofwhatthoselegalauthoritiesmeanarequestionsoflawsubjectto
denovoreview.4Whenapplyingthedenovostandardofreview,weapplyour
independent judgment . . . , adopting the rule of law most persuasive in light of
precedent,reason,andpolicy.5
Wereviewatrialcourtsfindingsoffactforclearerror.6Clearerrorexists
whenourreviewoftherecordleavesuswiththedefiniteandfirmconvictionthatthe
superiorcourthasmadeamistake. 7
4 ConocoPhillips Alaska, Inc. v. Williams Alaska Petrol., Inc.,322P.3d114,
122(Alaska2014)(footnotesomitted).
5 Id. (quoting Russell ex rel. J.N. v. Virg-In, 258 P.3d 795, 802
(Alaska2011))(internalquotationmarksomitted).
6 Gilbert M. v. State,139P.3d581,586(Alaska2006).
7 Id.(quotingD.M. v. State, Div. of Family & Youth Servs.,995P.2d205,
207-08(Alaska2000)).
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We review a trial courts decision to admit evidence, including the
testimonyofa witness, for abuseofdiscretion.8 A decision to permitor denyan
amendmenttothepleadingsisreviewedforabuseofdiscretion.9Wewillfindanabuse
ofdiscretionwhenthedecisiononreviewismanifestlyunreasonable.
10
IV. DISCUSSION
Ranes&Shineprimarilyarguesthatthesuperiorcourterredwhenitruled
thatthestatutesoflimitationdidnotbarMacDonaldMillersclaims.Ranes&Shine
alsoarguesthatthecourterredindismissingtheclaimsagainstRanesindividuallyand
awardingMacDonaldMillerattorneysfeesandcosts.Finally,Ranes&Shineraises
severalproceduralissues.Wegenerallyaffirmthesuperiorcourtsrulings,butwe
reverse and remand its dismissal of the misrepresentation claim against Ranes
individually.
A. MacDonald Millers Common Law Breach Of Contract And
Misrepresentation Claims Were Not Barred By The Statutes Of
Limitation.
MacDonaldMillerassertedthreeclaimsattrial:(1)misrepresentation;
(2)unfairtradepractices;and(3)breachofcontract.Onlythemisrepresentationand
breachofcontractclaimsareatissueinthisappeal.11
8 Getchell v. Lodge,65P.3d50,53,58(Alaska2003).
9 Miller v. Safeway, Inc.,102P.3d282,288(Alaska2004).
10 See Tufco, Inc. v. Pacific Envtl. Corp.,113P.3d668,671(Alaska2005).
11 The trial court dismissed MacDonald Millers UTPA claim, and
MacDonaldMillerhasnotappealedthatruling.
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A partymust bring amisrepresentation claim within twoyearsof the
accrualofhiscauseofaction12andabreachofcontractclaimwithinthreeyearsof
accrual.13 Generally, accrual ofa causeof action is establishedat the timeof the
injury.
14
Butthecommonlawdiscoveryruletollstherunningofthestatutoryperiod[w]hereanelementofacauseofactionisnotimmediatelyapparent.15Thediscovery
rulemitigate[s]theharshnessthatcanresultfromthe[accrual]rulespreclusionof
12 AS09.10.070(a).
13 AS09.10.053.But seeAS45.02.725(a)(four-yearstatuteoflimitations
applicabletobreachofacontractforsaleofgoods).Ranes&Shinearguesthatthe
contractbetweenTimmermanandRaneswasoneforthesaleofgoods,makingitsubjecttothefour-yearstatuteoflimitationsinAS45.02.725towhichthediscoveryruledoes
notapply.Armour v. Alaska Power Auth.,765P.2d1372,1375(Alaska1988).Butwe
concludethatRanes&Shinedidnotpreservethisargument.
MacDonaldMillerfirstasserteditscommonlawcontractclaimwhilethe
briefingon Ranes&Shines motion forsummaryjudgmentwaspending. Ranes&
ShinethusarguedfortheapplicationofAS45.02.725forthefirsttimeinitssummary
judgmentreplybrief.But thesuperiorcourtdidnot issue a rulingon that issue,and
Ranes&Shineneversoughtreconsiderationorfiledanewmotionseekingtobarthe
commonlawcontractclaim. Ranes&Shinealsodidnotaskthecourttoapplythefour-yearstatuteoflimitationsattrialevenafterthecourtspecificallyaskedthepartiesifit
neededtomakeanyadditionalrulings.Thus,Ranes&Shineasksthatwereviewan
orderthatwasneverproperlyrequestedandthatwasneverissued.Wedeclinetodoso.
See Gunderson v. Univ. of Alaska, Fairbanks,902P.2d323,327n.5(Alaska1995)
(Gunderson did not present this argument to the trial court . . . . Therefore it is
waived.);Alaska State Emps. Assn v. Alaska Public Emps. Assn,813P.2d669,671
n.6 (Alaska 1991) (As a matter of fairness, the trial court could not consider an
argumentraisedforthefirsttimeinareplybrief.).
14
Gefre v. Davis Wright Tremaine, LLP,306P.3d1264,1273(Alaska2013)(quotingCameron v. State,822P.2d1362,1365(Alaska1991))(internalquotation
marksomitted).
15 Id. at1274(alterationinoriginal)(quotingJohns Heating Serv. v. Lamb,
46P.3d1024,1031(Alaska2002))(internalquotationmarksomitted).
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claims where the injury provided insufficient notice of the cause of action to the
plaintiff.16
Indiscussingthediscoveryrule,wehavepreviouslyexplained:
[T]hestatuteoflimitationsdoesnotbegintorununtiltheclaimantdiscovers,orreasonablyshouldhavediscovered,the
existence ofall elements essential to the cause ofaction.
Thuswehavesaidtherelevantinquiryisthedatewhenthe
claimant reasonably should have known of the facts
supportinghercauseofaction.Welooktothedatewhena
reasonablepersonhasenoughinformationtoalertthatperson
thatheorshehasapotentialcauseofactionorshouldbegin[ ]aninquirytoprotecthisorherrights. 17
Thereareatleasttwodatesfromwhichthestatuteoflimitationscanbegintorun: (1)theactual-noticedate,and(2)theinquiry-noticedate.Theactual-noticedateisthedate
when[the]plaintiffreasonablyshouldhavediscoveredtheexistenceofallessential
elementsofthecauseofaction.18Theinquiry-noticedateisthedatewhentheplaintiff
hasinformationwhichissufficienttoalertareasonablepersontobeginaninquiryto
protecthisrights.19Theinquiry-noticedategenerallycontrolswhenacauseofaction
20accrues.
16 Id.(secondalterationinoriginal)(quoting Cameron,822P.2dat1365)
(internalquotationmarksomitted).
17 Id. at1275(alterationinoriginal)(quotingMine Safety Appliances Co. v.
Stiles,756P.2d288,291(Alaska1988)).
18 Id.(alterationinoriginal)(quotingJohns Heating Serv.,46P.3dat1031)
(internalquotationmarksomitted).
19 Id.(quotingJohns Heating Serv.,46P.3dat1031)(internalquotation
marksomitted).
20 Id.Wenotethatthereareexceptionstothisrulenotatissueinthiscase.
(continued...)
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Ranes&Shinechallengesthesuperiorcourtsstatuteoflimitationsrulings
ontwogrounds.First,Ranes&ShineassertsthatweshouldholdthatMacDonaldMiller
wasonnoticeofitsclaimsin2005becauseFirstNationalspubliclyfiledUCCfinancing
statementputMacDonaldMilleronconstructivenotice
21
ofthefactthattheequipmentwas encumbered, contrary to Raness representation. Whether a UCC financing
statementprovidesconstructivenoticeoftheelementsofaclaimforstatuteoflimitations
purposesisaquestionoflawthatwereviewdenovo.22
Second,Ranes&Shinearguesthatthefactsofthiscasedemonstratethat
MacDonaldMillerwasoninquirynoticeofitsclaimsin2005evenwithoutimputingthe
informationcontainedintheUCCfinancingstatementtoit.Determiningtheaccrual
dateisafact-intensiveinquiryconductedbythesuperiorcourt,andwereviewthe
courtsfindingsforclearerror. 23
1. UCCfinancingstatementsdonotprovideconstructivenoticeof
theelementsofaclaimforstatuteoflimitationspurposes.
Ranes&ShinearguesthatFirstNationalsUCCfinancingstatementgave
MacDonald Miller constructive notice of the fact that Ranes had misrepresented
20(...continued)
Forexample,iftheplaintiffmadeareasonableinquirybutfailedtodiscovertheessential
elementsofhiscauseofaction,theactual-noticedatemaycontrol.Cameron,822P.2d
at1367.
21 Constructivenoticeisinformationorknowledgeofafactimputedbylaw
to a person, although he or shemay not actually have it .. . . 58 AM. JUR.2D
Notice6(2015).
22
Matanuska Elec. Assn v. Chugach Elec. Assn, 152 P.3d 460, 465(Alaska2007)(reviewingquestionsoflawdenovo).
23 Gefre,306P.3dat1271(citingSengupta v. Wickwire,124P.3d748,752
(Alaska2005));Pedersen v. Zielski,822P.2d903,907(Alaska1991)(Applicationof
thediscoveryrule...isdependentonfactsthatareoftenunclear.).
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Ranes&Shinesabilitytopasscleartitletotheequipment.Ranes&Shinereasonsthat
thesuperiorcourtshouldhavechargedMacDonaldMillerwithnoticeofFirstNationals
securityinterestintheequipmentatthetimeofthe2005agreement. Thiswouldplace
theaccrualdatesometimeinOctober2005,andthestatutesoflimitationwouldbarMacDonaldMillersclaims.24ButwedeclinetoadoptRanes&Shinesconstructive
noticeargumentbecauseitisinconsistentwithourstatuteoflimitationsjurisprudence
andwouldbebadpublicpolicy.
a. We have implicitly rejected the constructive notice
positionRanes&Shineasksustoadopt.
Neitherpartyhascitedanystatuteoflimitationscaseswherewecharged
aplaintiffwithconstructivenoticeofpubliclyrecordedfactsabsentafindingthatthe
24 We note that the partieshave briefed this case as thoughMacDonald
Millersmisrepresentationandcommonlawcontractclaimsmusthaveaccruedatthe
sametime. Wehavetreatedtheirargumentsinthesamemannerbecauseitdoesnot
affecttheresultinthiscase.
ButourholdinginJarvill v. Porkys Equipment, Inc.suggeststhattheir
assumptionmaynotbecorrect.189P.3d335,339(Alaska2008).InJarvilltheplaintiffpurchasedaboatthatwasallegedlyconstructednegligently.Id. at336. Twoandahalf
yearsaftertheplaintifftookdeliveryoftheboat,theboatsank,andtheplaintiffsuedthe
builder.Id. at337. Weheldthateventhoughtheboatwasdefectivewhenitwassold,
theplaintiffdidnotsufferaninjurythatwouldsupporthisnegligenceandproductdefect
claimsuntiltheboatsank,and,therefore,thosecausesofactiondidnotaccrueuntilthe
boatsank.Id.at339-41.
Similarly,itcouldbearguedthatMacDonaldMillersmisrepresentation
actiondidnotaccrueuntilFirstNationaldemandedtheequipmentbereturnedbecause
MacDonaldMillerhadnotsuffereddamagesnecessarytosupportitsclaimuntilthatpoint. If thatwerethecase,MacDonaldMillersmisrepresentationclaimbut not
necessarilyitscontractclaimwouldbetimelyevenwithouttheoperationofthe
discoveryrule. ButwedeclinetoapplyJarvillherebecauseitwasnotraisedbeforeus
orthesuperiorcourt,anditsapplicationwouldnotchangeourultimateconclusions
regardingthetimelinessofMacDonaldMillersclaims.
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plaintiffwasalreadyon inquirynotice.25OurreviewhasidentifiedonlyoneAlaska
caseBauman v. Daywhereitwasarguedthatapartyshouldhavebeencharged
with knowledge of facts in a publicly recordeddocument for statute of limitations
purposeswithoutalreadybeingoninquirynotice.
26
InBauman theBaumanspurchasedapropertyin1984fromtheDaysafter
allegedlyaskingtheDaysaboutthepresenceofpermafrostonthepropertyandbeing
25 Whilewehaveheldthatapersonmaybechargedwithknowledgeof
informationinpubliclyavailabledocumentsinavarietyofcontexts,noneofthesecases
specifically considers that issue with respect to thestatuteof limitationswhere the
plaintiff was not already on inquiry notice. See, e.g.,Kenai Chrysler Ctr., Inc. v.Denison, 167 P.3d 1240, 1248 (Alaska 2007) (holding that a dealership was on
constructivenoticeofguardianshipbecauseofexistenceofguardianshiporder);Watega
v. Watega, 143P.3d658, 665(Alaska2006) (holding thatpurchasers ofdivorcing
coupleshomehadconstructivenoticeofwifesclaimtothepropertybecausewifehad
filedanoppositiontothesalewiththesuperiorcourtandpurchasersknewaboutthe
divorceandthehusbandsneedtoobtaincourtpermissionpriortosale);Methonen v.
Stone,941P.2d1248,1252(Alaska1997)(chargingapurchaserofrealpropertywith
noticeofinformationinpublicrecordswhereotherfactsknowntothepurchaserplaced
himoninquirynoticeofapotentialencumbrance); State v. Alaska Land Title Assn,
667P.2d 714, 725 (Alaska 1983) (holding that title insurers policy was triggered
becauseinsurerwasheldtobeonconstructivenoticeofapubliclandorderpublished
intheFederalRegister).Nothinginthisopiniontodayaffectstheseearlierholdings.
26 892 P.2d 817 (Alaska 1995). The theory of constructive notice has
appearedelsewhereinourstatuteoflimitationscases,butneverinthewayRanes&
Shineproposeshere.See, e.g.,Phillips v. Gieringer,108P.3d889,893(Alaska2005)
(discussingconstructivenoticeandtherelationbackdoctrine);Breck v. Moore,910P.2d
599, 604-05 (Alaska 1996) (holding that plaintiffs were on constructive notice of
informationknownorthatshouldhavebeenknowntotheplaintiffsattorney).But cf.Moore v. Allstate Ins. Co.,995P.2d231,239(Alaska2000)(holdinginthediscovery
rulecontextthatahomeownerwouldnotbechargedwithconstructivenoticeofher
claimthatherinsurerhadallegedlymisrepresentedthecoverageavailabletoherunder
theNationalFloodInsuranceProgramdespitethefactthatshecouldhaveresearchedthe
policyintheFederalRegister).
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toldthattherewasnone.27Buttherecordedsubdivisionplatshowedthepresenceof
permafrost-ladensoilsontheland.28
The Baumans built a house on the property, and in 1986 began
experiencingpermafrost-relatedproblems.
29
Theearlyproblemswerenotsignificant,andtheBaumansdismissedthemasnormalsettlementofanewhome. 30 By1988,
however, the problems were so significant that the Baumans stopped paying their
propertytaxesuntilthepropertywasreevaluatedtotake theapparentpermafrostinto
account.31
TheBaumansdidnotbringasuitagainsttheDaysuntil1992,alleging
breachofcontractamongotherclaims.32Atthetime,abreachofcontractactionwas
subjecttoasix-yearstatuteoflimitations.33 Onamotionforsummaryjudgment,the
superiorcourtfoundthatthecontractactionhadaccruedatthetimeofthesalein1984
andruledthattheBaumanscontractclaimswerebarred.34TheBaumansappealedand
27 Bauman,892P.2dat820.
28 Id.at822.
29 Id.at820.
30 Id.
31 Id.
32 Id.
33 See id.at827&n.16.Asnotedabove,acommonlawbreachofcontract
claimisnowsubjecttoathree-yearstatuteoflimitations. SeeAS09.10.053.
34 Bauman,892P.2dat822.
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wereversedinpart,holdingthatthestatuteoflimitationsontheircontractclaimdidnot
begintorununtiltheybeganexperiencingpermafrost-relatedproblems.35
ChiefJusticeMoore,writinginpartialdissent,concludedthatthelanguage
regardingthepresenceofpermafrostinthesubdivisionplatmeantthattheBaumanscouldhavediscoveredtheexistenceofpermafrostonthelandin1984.36 Hewouldhave
heldthattheBaumanshadconstructivenoticeofthepermafrostatthetimetheybought
thehousebecause(1)[i]tisnotunreasonabletoexpecttheBaumanstohaveexamined
thesubdivisionplat,giventhatthedeedoftrustsdescriptionspecificallyreferencedthat
plat,and(2)theBaumanswereallegedlyconcernedbeforepurchasingthepropertythat
itmightcontainpermafrost. 37
This court, however, implicitly dismissed this constructive notice
argument.38Instead,wereviewedthefactsinthelightmostfavorabletotheBaumans
andconcludedthattheBaumansdidnotdiscoverthepermafrostuntiltheybuiltonthe
propertyandproblemsbegantoarise.39NotingthattheBaumansallegedlybecame
awareofthepermafrostin1988,weheldthatthebreachofcontractactionwasfiled
withinthesix-yearstatuteoflimitationsperiodineffectatthetime. 40
Ranes&ShinesreasoningissimilartoChiefJusticeMooresdissenting
opinionandisnotsupportedbyourholdinginBauman.Ifwehadconstruedthe
35 Id.at828.
36 Id.at831(Moore,C.J.,dissenting).
37 Id.
38 Id.at828.
39 Id.
40 Id.
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informationinthesubdivisionplatasbeingsufficienttoputtheBaumansoninquiry
notice,wewouldhaveneededtodeterminewhethertheBaumansundertookaninquiry
andwhethertheinquirywasreasonable. 41OurnotdoingsointhefaceofChiefJustice
Moores dissent on this particular point demonstrates our implicit rejection of theargumentRanes&Shineadvanceshere.
b. Public policy weighs against holding that a
misrepresentationvictimisonconstructivenoticeofthe
informationinpubliclyrecordedfinancingstatementsfor
thepurposesofthestatuteoflimitationsanalysis.
AUCCfinancingstatementisintendedtoprovidenoticetotheworldofa
securedpartysinterestinspecificcollateral. 42Thenoticeprotectsthepartywhoobtains
thesecurityinterest,italsoprotectsthosewhoconsiderdealingwiththedebtorby
helpingapotentialcreditorunderstandwhereitwouldstandintheorderofpriority
amongothercreditorsandbyhelpingittakeappropriateactiontoprotectitsinterests.43
Butafinancingstatementisnotintendedtoshieldatortfeasorfromthe
consequencesofhismisrepresentations. Therecordinglawsestablishapriorityas
betweeninnocentclaimantstothesamepropertyorright;they are not intended to give
security to the perpetrators of fraud as against their victims.44Anyotherrulewould
41 See Cameron v. State,822P.2d1362,1367(Alaska1991)(discussingthe
thirdpartofthediscoveryruleanalysisasstatedinPedersen v. Zielski,822P.2d903,
908(Alaska1991)).
42 68AAM.JUR.2DSecured Transactions 216(2015).
43
Id.
44 Larabee v. Eichler,271S.W.3d542,547(Mo.2008)(enbanc)(emphasis
added)(quotingDreckshage v. Cmty. Fed. Sav. & Loan Assn,555S.W.2d314,319-20
(Mo. 1977) (en banc)). AlthoughLarabee involved a real estate transaction, we
concludethesamerationaleistrueforUCCfinancingstatements. See id.at544-45.
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rewardthepartythatconvincinglymisrepresentsthestatusofhistitlebyrelievinghim
ofliabilityoncethestatuteoflimitationshasrunwithoutanyindicationtohisvictimthat
thereisaneedtoundertakeadditionalinvestigation.Weseenoconvincingreasonto
adoptsucharule.Thepotentialcollateralconsequencesofextendingthenoticeafinancing
statement givesbeyond the realm of secured transactions also give us pause. For
example,ourcaselawestablishesthataplaintiffmustprovethathejustifiablyreliedon
adefendantsincorrectstatementstoprovemisrepresentation.45 IfweadoptedRanes&
Shinesbroadconstructive-noticeargument,itisunlikelythatanymisrepresentation
regardingownershipcouldbejustifiablyrelieduponwhen acontradictoryrecorded
document exists: the misrepresentations would always be belied by the publicly
recordeddocumentsofwhichtheplaintiffwouldbedeemedtohaveconstructivenotice.
Nothinginourcaselawsuggestssucharesult,andwedeclinetoendorseithere.
2. Thesuperiorcourtdidnotcommitclearerrorwhenitsetthe
inquiry-noticedate.
Thepartiesdonotdispute thatTimmermanandRanesagreedto settle
MacDonaldMillersoutstandingdebtinOctober2005.Noristhereanydisputethat
FirstNationalinitiallycontactedTimmermaninthesummerof2010.MacDonaldMiller
brought its third-party complaint inSeptember2010. Thesuperior court found that
MacDonaldMillerscausesofactiondidnotaccrueatthetimeofthe2005agreement
based primarily on Raness and Timmermans lack of commercial financing
sophisticationandRanessaffirmativerepresentationtoTimmermanthatRanes&Shine
ownedcleartitletotheequipment.Instead,thecourtfoundthatthestatutesoflimitation
begantorunwhenFirstNationalcontactedTimmerman.
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45 Reeves v. Alyeska Pipeline Serv. Co.,56P.3d660,670(Alaska2002).
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Ranes& Shine argues thatthe superiorcourt erredin finding that the
statutesoflimitationbegantorunuponFirstNationals2010contactwithTimmerman.
Ranes&ShineassertsthattheinformationknowntoMacDonaldMilleratthetimeof
the 2005 transaction put it on inquiry notice in October 2005, making its lawsuituntimely.46
We have reviewed the record in this appeal with Ranes &Shines
argumentsinmindandfindnoclearerror.TimmermanandRanesbothtestifiedthat
theybelievedRanes&Shineownedcleartitletotheequipment.TimmermanandRanes
alsobothtestifiedthattheydidnotknowaboutUCCfinancingstatementsuntilthiscase.
ThesuperiorcourtspecificallyfoundTimmermancredibleonthispoint,whilenoting
thatbothTimmermanandRaneslackedcommercialsophistication.
WhileTimmermanappears tohaveknown thata bankmayhavebeen
involvedinfinancingRanes&Shinesbuilding,Timmermanalsoclaimedhebelieved
thattheEmbleyshadputasubstantialamountoftheirownmoneyintotheproject. The
superiorcourtapparentlycreditedthistestimonybecauseitlaterexplicitlyreferredtothe
Embleys investment in Ranes & Shine as one explanation for why Timmerman
reasonablyreliedonRanessrepresentationthatRanes&Shineownedcleartitletothe
equipment.
Weconcludethatthesuperiorcourtdidnotcommitclearerrorinfinding
Timmermanwasnotoninquirynoticeatthetimeofthesale.Thesefactsandfindings
46 Ranes&Shinearguesthispointintwodifferentcontexts: (1)thedenial
ofitsmotionforsummaryjudgment;and(2)thesuperior courtsfindingsaftertrial. Weaddressonlythelatterhere.ThesuperiorcourtdeniedRanes&Shinesmotion,atleast
astothemisrepresentationclaim,becauseitfoundthereweregenuineissuesofmaterial
fact.Itthenheldatrial. Wewillnotreviewanorderdenyingsummaryjudgmentafter
therehasbeenasubsequenttrialonthemeritsofthefactsatissueinthesummary
judgmentproceedings.Larson v. Benediktsson,152P.3d1159,1170(Alaska2007).
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providesufficientsupportforthecourtsdecisioneveninthefaceofcontraryevidence.
Thus,weaffirmthecourtsfindingthatTimmermanwasnotoninquiryoractualnotice
untilcontactedbyFirstNational.BecauseMacDonaldMillerfileditsclaimsagainst
Ranes&Shinewithintwoyearsofthatcontact,itsclaimsweretimely.B. The Misrepresentation Claim Against Ranes In His Individual
CapacityShouldNotHaveBeenDismissed.
MacDonald Miller asserted its misrepresentation claim against both
Ranes&ShineandRanesinhisindividualcapacity. Whilethesuperiorcourtorally
ruledinMacDonaldMillersfavorandspecificallydiscussedRanes&Shinesliability,
itdidnotaddressRaness individualliability.That issue firstaroseaftertrialwhen
MacDonaldMillersubmittedaproposedfinaljudgmentincludinglanguagedismissing
the claim against Ranes individually. Ranes & Shine objected to this part of the
proposedfinaljudgment. DespiteRanes&Shinesspecificobjectiontothislanguage,
the superior court adopted the proposed final judgment as its order without any
discussionofwhyitdismissedtheclaimsagainstRanes.
Ranes & Shine argues that the superior court erred in dismissing the
misrepresentationclaimagainstRanes. Ranes&Shinearguesthatanagentmaybeheld
liable to a third-party for the agents negligence, and asserts that it was Raness
misrepresentationsthatgaverisetoMacDonaldMillersclaims.MacDonaldMiller
arguesthatRaneswasnotindividuallyliablebecauseRaneswasRanes&Shinesagent
actingonthecompanysbehalf.Theseargumentspresentquestionsoflawwhichwe
reviewdenovo.47
Matanuska Elec. Assn v. Chugach Elec. Assn,152P.3d460,465(Alaska
2007)(reviewingquestionsoflawdenovo).
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47
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Ourcaselawindicatesthatanagentsliabilitydependsonthetypeofclaim
asserted.48Thelawiswellestablishedthatintheeventofnegligencebyadisclosed
agentactingwithinthescopeofhisauthoritytheagentmaybeheldindividuallyliable
toathirdparty.
49
Butforbreachofcontractclaimsofficersofacorporationwillnotordinarilybeheldpersonallyliableforcontractstheymakeasagentsofthecorporation
iftheydisclosetheiragencyandtheexistenceofthecorporation.50Thus,anagentmay
beheldindividuallyliablefornegligencetheagentcommits,butnot,inthemajorityof
circumstances,forbreachofcontract.
The only claim MacDonald Miller asserted against Ranes on which
MacDonaldMillerprevailedwasitsmisrepresentationclaim.ItisundisputedthatRanes
wasthepersonwhomisrepresentedthestatusoftitletotheequipment,anditisthrough
RanessmisrepresentationthatRanes&Shinealsobecameliableformisrepresentation.
ThecaselawdiscussedabovecompelstheconclusionthatRaneswouldbeindividually
liablefortortiousactsheindividuallycommittedwhileactingasanagentforRanes&
Shinehethuscanbeheldindividuallyliableforthemisrepresentationhemade. An
agent,evenacorporateofficerordirector,isnotcloakedwithtortimmunitybecausehe
wasactinginthecourseandscopeofhisemploymentwhenhecommittedthetort.
48 WenotethatthebriefinginthiscaseassumesthatRaneswasactingas
Ranes&ShinesagentduringhisnegotiationswithTimmerman.
49 Austin v. Fulton Ins. Co., 498 P.2d 702, 704 (Alaska 1972); see
11FLETCHERCYCLOPEDIAOFTHE LAWOF CORPORATIONS1135(2014)(Itisthe
generalrulethatanindividualispersonallyliableforalltortstheindividualcommitted,
notwithstandingthepersonmayhaveactedasanagentorunderdirectionsofanother.);see also18BAM.JUR.2D Corporations1629(2015)(If...adirectororofficer
commitsorparticipatesinthecommissionofatort,whetherornotitisalsobyorforthe
corporation,heorsheisliabletoinjuredthirdpersons....).
50 Jensen v. Alaska Valuation Serv., Inc.,688P.2d161,162-63(Alaska1984).
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Therefore,weholditwaserrortodismissthemisrepresentationclaimassertedagainst
Ranesinhisindividualcapacity.
C. TheSuperiorCourtDidNotAbuseItsDiscretionWhenItAmended
ThePleadingsSuaSponte.
While issuing its oral decision, the superior court commented that it
believedTimmerman was the wrong plaintiff and that the real party in interest was
MacDonaldMiller.Findingthatthecasewastriedonthebasis[of]whathappenedto
MacDonaldMillerand...theappropriatetreatmentofthat,thecourtamendedthe
pleadingssuaspontetosubstituteMacDonaldMillerastheplaintiff.Thecourtfurther
found that therewasnoprejudice to Ranes &Shineas a resultoftheamendment.
Ranes&Shinearguesthatthisdecisionconstitutedanabuseofdiscretion.
Wedisagree.Atrialcourthasbroadpowertoconformthepleadingstothe
evidenceactually presented.51 Alaska Rule of Civil Procedure 15(b)provides that
[w]henissuesnotraisedbythepleadingsaretriedbyexpressorimpliedconsentofthe
parties,theyshallbetreatedinallrespectsasiftheyhadbeenraisedinthepleadings.52
NothinginCivilRule15(b)prohibitsthesuperiorcourtfromamendingthepleadings
sua sponte. Application of [Civil Rule 15(b)] is appropriate . . . when evidence
supportingtheamendmentwasofferedattrial...withtheopposingpartysexpressor
impliedconsent.... 53Indeterminingimpliedconsent,prejudicetothepartyopposing
amendmentisrelevant. 54
51 SeeAlaskaR.Civ.P.15(b).
52 Id.
53 Alderman v. Iditarod Props., Inc.,32P.3d373,396(Alaska2001).
54 Id. (citing6ACHARLESALLANWRIGHT,ARTHURR.MILLER&MARYKAY
KANE,FEDERALPRACTICEANDPROCEDURE1493(2ded.1990)).
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Reviewing the circumstances here, we find no abuse of discretion.55
TimmermantestifiedthathewasMacDonaldMillerssoleowner. Healsotestifiedthat
when heentered into the contract with Raneshewas representing himselfand his
company.PartoftheagreementheenteredintowithRanesinvolvedMacDonaldMillerforgivingtheremainingbalanceowedforworkMacDonaldMillerhaddoneonRanes&
Shinesbuilding.AlthoughTimmermanpaidtheadditional$18,000withapersonal
checkandnotacorporatecheck,hetestifiedthiswasonlyamatterofconvenience. We
also note that Ranes & Shine occasionally referred to MacDonald Miller as if
MacDonaldMillerwerethepartyassertingclaimsagainstitandthatRanes&Shines
defensedoesnotappeartohavebeenpredicatedonTimmermanbeinganimproper
plaintiff.
Basedontheevidencepresented,thewaythepartiestriedtheircase,and
thelackofprejudicetoRanes&Shine,weholdthatthesuperiorcourtdidnotabuseits
discretionwhenitsuasponteamendedthepleadingstosubstituteMacDonaldMilleras
thethird-partyplaintiff.
D. TheSuperiorCourtDidNotAbuseItsDiscretionWhenItPermitted
RanesToTestifyTelephonically.
Leadinguptothetrialtherewassignificantconfusionregardingwhether
andhowRaneswouldtestifybecausehewasinfederalcustodyoutsideofAlaska.
MacDonaldMillerhadindicateditintendedtodeposeRanestelephonically,butlater
askedfora60-daycontinuancetodeterminewhetherRaneswouldtestifyattrial. The
superiorcourtsuggesteddeposingRanesbutalsoofferedtohelpfacilitateRaness
appearanceattrial.
Amonthbeforetrialwastostart,MacDonaldMillerfiledawitnesslist
indicatingitintendedtohaveRanestestifytelephonically.Ranes&Shinefiledan
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55 Cf. id.at380(reviewingamendmentofpleadingsforabuseofdiscretion).
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objectiontoRanesappearingtelephonicallybasedonMacDonaldMillersfailureto
complywiththecivilrules.Onthefirstdayoftrial,thesuperiorcourtruleditwould
allowRanestotestifytelephonicallyandstatedthat,whilecounselforRanes&Shine
object[ed]thattheIsarentdottedandtheTsarentcrossed[,]...insubstanceratherthanform[Timmermansmotionwas]compliant.
Ranes&Shineappealsthatdecision,assertingthat(1)itwasprejudicedby
thesuperiorcourtsdecisiontopermitRanestotestifytelephonicallybecauseitwas
unabletoconfronthimwithexhibits;(2)Timmermanfiledthenoticetooclosetotrial;
and(3)itwasled...tobelievethatthepurposeofthesixty[-]daycontinuancein
January2013wastofacilitatethedepositionofRanes.Wereviewthesuperiorcourts
decisiontograntamotiontopermittelephonictestimonyforabuseofdiscretion.56And
wehavepreviouslynotedthatproceduralrules,suchasthoseprovidingfortelephonic
testimony,shouldbeinterpretedliberallyinordertoavoiddeterminationsbasedon
technicalities.57
WeholdthesuperiorcourtdidnotabuseitsdiscretioninpermittingRanes
totestifytelephonically.AlaskaRuleofCivilProcedure99(a)providesthatthecourt
mayallowawitnesstoparticipatetelephonicallyinanyhearingordepositionforgood
causeandintheabsenceofsubstantialprejudicetoopposingparties.Andinacase
presentingsimilarissues,wedeterminedthat itwasnotanabuseofdiscretion for the
superiorcourttoundertakeagood-causeanalysisthatconsideredthecost,time,and
inconvenienceoftransportingaprisonerforin-persontestimony. 58Weaffirmedthe
superiorcourtsfindingthatitwouldnotprejudicetheinmatewhowasapartyto
56 Silvers v. Silvers,999P.2d786,789(Alaska2000).
57 Rollins v. Leibold,512P.2d937,941n.8(Alaska1973).
58 Midgett v. Cook Inlet Pre-Trial Facility,53P.3d1105,1113(Alaska2002).
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participate telephonicallyat trial, as opposed to being physically present in court.59
Here,thesuperiorcourtmadeabriefgood-causefindingthatRaneswas
incarceratedoutofstate.Thecourtalsonotedthatitwouldworkwiththepartiesto
addressanyproblemsarisingoutofRanesstelephonicparticipation.OurreviewofRanesstestimonyrevealsthatRanes&Shineneverrequestedsuchhelporcomplained
ofbeingunabletoshowRanesanexhibit.IfRanes&Shinehadaskedforassistance,
webelievethecourtwouldhavetriedtoresolveanyissuesasithadpreviouslyoffered
todo.GiventhattherewasgoodcausetopermitRanestotestifytelephonicallyand
Ranes&Shinehasnotdemonstratedanyprejudice,weholdthatthecourtdidnotabuse
itsdiscretioninallowingRanestotestifytelephonically.
E. TheSuperiorCourtDidNotErrWhenItAwardedAttorneysFees
AndCostsToMacDonaldMiller.
Ranes&Shinealsoarguesthatthesuperiorcourtabuseditsdiscretionin
awarding MacDonaldMiller attorneys fees and costs because Timmerman not
MacDonaldMilleractuallyincurredthechargesinthiscase.Butanyattorneysfees
orcostsTimmermanincurredwereincurredforMacDonaldMillersbenefit,andthe
evidentunityofinterestsbetweenTimmermanandMacDonaldMillerthatrendered
MacDonaldMillerssubstitutionpropersimilarlysupportstheawardofattorneysfees
andcosts toMacDonaldMiller.60 Therefore,thesuperior courtdidnot errwhenit
awardedMacDonaldMillersattorneysfeesandcosts.61
59 Id.
60 See BP Pipelines (Alaska) Inc. v. State, Dept of Revenue,327P.3d185,
192(Alaska2014)([O]urcaselawhaslongmadeitclearthat,regardlessofhowpartiesareformallyarranged,feesandcostsmaybeawardedbasedonactualadversityof
interests.).
61 Ranes&Shinealsoappearstochallengethesuperiorcourtsdecisionto
(continued...)
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V. CONCLUSION
WeAFFIRMthesuperiorcourtinallrespectsexceptitsdecisiontodismiss
MacDonaldMillersmisrepresentationclaimagainstRanesinhisindividualcapacity.
We REVERSE the dismissal as to Ranes and REMAND for further proceedingsconsistentwiththisopinion.
61(...continued)
enhancethefeeaward.Butwedonotaddressthatargumentherebecauseitwasfirst
raisedinRanes&Shinesreplybrief.Sumner v. Eagle Nest Hotel,894P.2d628,632
(Alaska1995).
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