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Smith v. Stratton (6/26/92), 835 P 2d 1162
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NOTICE: This opinion is subject to
formal correction before publication in the
Pacific Reporter. Readers are requested to
bring typographical or other formal errors to
the attention of the Clerk of the Appellate
Courts, 303 K Street, Anchorage, Alaska
99501, in order that corrections may be made
prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
TONI M. SMITH and STEVEN R. SMITH, )
) Supreme Court No. S-4153
Appellants, )
)
v. ) Superior Court No.
) 3AN-89-2744
BARBARA B. STRATTON, )
) O P I N I O N
Appellee. )
___________________________________) [No. 3852 - June 26,
1992]
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage,
Peter A. Michalski, Judge.
Appearances: John C. Dittman, Kelly,
Cossman & Associates, Anchorage, for
Appellants. S. Ramona Longacre, Anchorage,
Michael J. Hanson, Anchorage, for Appellee.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton, and Moore,
Justices.
RABINOWITZ, Chief Justice.
COMPTON, Justice, concurring.
BURKE, Justice, dissenting in part, concurring in part.
INTRODUCTION
This appeal of a dismissal raises the issue of whether
Alaska's savings statute applies to an action which is refiled
within one year after being dismissed for failure to prosecute.
The superior court dismissed the Smiths' complaint, finding that
it was time-barred by the statute of limitations and that
Alaska's savings statute, AS 09.10.240, did not apply. The
superior court also rejected the Smiths' equitable estoppel
arguments against application of the statute of limitations.
FACTS AND PROCEEDINGS
On November 30, 1984, Barbara Stratton rear-ended Toni
Smith's car, injuring Smith in the accident. Through their
lawyer, the Smiths attempted to negotiate a settlement with
Allstate Insurance Company, Stratton's insurer. In order to
comply with the two year statute of limitations, the Smiths filed
an action against Stratton in the superior court in October 1986.
On October 28, 1986, the Smiths granted Allstate's request for an
indefinite extension of time in which to file an answer since the
parties were attempting to negotiate a settlement. In 1987,
Smith's car was rear-ended by Yu Son, and in 1988, Andrea Waldon
collided with a car in which Smith was a passenger. Son and
Waldon were both insured by Allstate. The two later accidents
both complicated and slowed settlement negotiations with
Allstate, particularly on the issue of Toni Smith's damages.
On January 15, 1988, the clerk of the superior court
issued a Civil Rule 41 Notice to Show Cause why the Smiths'
action should not be dismissed for want of prosecution.1 The
Smiths' attorney responded to the notice, taking the position
that informal attempts at settlement made by the parties
constituted sufficient prosecution of the case. In response, the
superior court entered an order on March 3, 1988, denying
dismissal under Rule 41 and stating that the case would be
dismissed if the requirements of Civil Rule 16.1(g) were not
satisfied by June 1, 1988.2 Neither Stratton nor Allstate
received a copy of the order. No further action was taken on the
case and on June 24, 1988, the superior court dismissed the
Smiths' complaint without prejudice.
After the dismissal, settlement negotiations continued.
The Smiths retained new counsel and refiled the action, including
the two other Allstate insureds in their complaint3, on April 4,
1989. Again, Allstate requested and received an unlimited
extension of time in which to answer the new complaint.
Eventually, negotiations broke down and the Smiths asked that
Allstate answer the complaint.
Thereafter, Stratton moved for summary judgment,
requesting that the superior court dismiss the Smiths' action
because the statute of limitations had expired before the
complaint was refiled. In opposition, the Smiths argued that
Alaska's savings statute allowed refiling of the case within one
year of dismissal and, alternatively, that Stratton was estopped
from asserting the statute of limitations because Allstate
requested extensions which resulted in the Smiths' failure to
formally prosecute the action and the consequent dismissal of
their claim against Stratton.
The superior court granted summary judgment in
Stratton's behalf and this appeal followed.4
I. DOES THE ALASKA SAVINGS STATUTE, AS 09.10.240, APPLY TO
CASES DISMISSED FOR FAILURE TO PROSECUTE?
The Smiths contend that since the action was refiled
within a year of the superior court's dismissal of their action
for failure to prosecute, the savings statute should apply.
Stratton disagrees, asserting that a case which has been
dismissed for failure to prosecute does not fall within the ambit
of the savings statute, which requires that the case be
"dismissed upon the trial or upon appeal." AS 09.10.240.5
The Alaska savings statute, AS 09.10.240, provides in
pertinent part:
If an action is commenced within the
time prescribed and is dismissed upon the
trial or upon appeal after the time limited
for bringing a new action, the plaintiff
. . . may commence a new action upon the
cause of action within one year after the
dismissal or reversal on appeal.
The applicability of the savings statute depends on the
interpretation of the phrase "upon the trial or upon appeal."
The Smiths assert that the Alaska Legislature adopted
the Oregon savings statute and rely on City of Fairbanks v.
Schaible for the proposition that the legislature also adopted
the Oregon common law interpretation of the statute. 375 P.2d
201, 207 (Alaska 1962).6 In this regard the Smiths argue that
the Oregon courts' interpretations were adopted with the statute
and that, therefore, the interpretation of the statute in White
v. Pacific Tel. & Tel. Co. controls. 123 P.2d 193, 195 (Or.
1942), overruled by Fuller v. Safeway Stores, Inc., 481 P.2d 616
(Or. 1971). White states in dictum that the Oregon savings
statute applies to an action dismissed for want of prosecution.
The Smiths further argue that since the savings statute is a
remedial statute it should be given a liberal construction.
Stratton relies on Andreanoff v. State for the propo
sition that "the presumption is not conclusive and Alaska's
courts may adopt a variant interpretation if convinced that the
plain language of the statute, common sense and public policy
require it." 746 P.2d 473, 476 n.3 (Alaska App. 1987) (citing
Beckley v. State, 443 P.2d 51, 55-56 (Alaska 1968)). After
Alaska's savings statute was adopted in 1962, the Oregon court
decided Fuller v. Safeway Stores, Inc., 481 P.2d 616 (Or. 1971).
In Fuller, the court held that the savings statute did not apply
to a case dismissed for lack of prosecution and overruled White.7
We have often stated that "statutory interpretation
begins with examination of the language construed in light of its
purpose." Vail v. Coffman Eng'rs, Inc., 778 P.2d 211 (Alaska
1989); J & L Diversified Enter. v. Municipality of Anchorage, 736
P.2d 349, 351 (Alaska 1987). Here resolution of the issue turns
upon construction of the language "upon the trial or upon
appeal." In our view "trial"and "appeal"should be interpreted
to mean "trial court level" and "appellate court level"
respectively. Any other construction of these terms would be
unreasonable. We are reluctant to impute an irrational intent to
the legislature in its use of the phraseology "upon the trial or
upon appeal." It is not rational to assume that the legislature
intended to exclude from the savings statute causes of action
which are dismissed before trial and not those which (for the
same reasons) are dismissed after commencement of trial. Nor
does it make sense to distinguish a dismissal which is entered
after a notice of appeal has been filed from one which occurs
subsequent to submission of the appeal on its merits or one which
occurs at oral argument. Thus, we conclude that AS 09.10.240
applies to all actions which have been dismissed, other than on
their merits, at both the trial court and appellate court levels.8
II. MAY A DEFENDANT WHO HAS REQUESTED AN INDEFINITE EXTENSION,
RESULTING IN A DISMISSAL FOR FAILURE TO PROSECUTE, RELY ON
THE STATUTE OF LIMITATIONS TO DISMISS THE REFILED CLAIM?
The Smiths rely on equity in their argument that it is
fundamentally unfair for Stratton to assert the bar of statute of
limitations after receiving an indefinite extension of time in
which to answer the complaint. Stratton characterizes the
Smiths' argument as essentially an equitable estoppel argument.
Because the Smiths failed to show fraud or misrepresentation and
reliance, Stratton asserts that this argument should fail. One
commentator explains the term "equitable estoppel"as follows:
Courts often employ what has been
loosely termed "equitable estoppel"to remove
the statutory bar in any situation in which
the plaintiff's reasonable failure to sue
appears to result from reliance on any sort
of misleading conduct, such as assurances
that the obligation would be discharged
without suit, or a request that the plaintiff
delay prosecution of the claim.
Developments in the Law: Statutes of Limitations, 63 Harv. L.
Rev. 1177, 1223 (1950).
Stratton relies on Groseth v. Ness, 421 P.2d 624
(Alaska 1966), for the proposition that there must be reliance on
misrepresentation or false statements for equitable estoppel.
Stratton asserts that Groseth closely resembles the instant case.
Groseth, however, can be distinguished because the plaintiff had
not filed a suit when the statute of limitations expired and the
failure to file suit was not a result of any agreement between
the parties.
In Gudenau & Co. v. Sweeney Ins. Co., we held that a
plaintiff who fails to file suit within the statute of
limitations may be protected by equitable estoppel if the
plaintiff has been induced to postpone filing suit by the
defendant's words or conduct. 736 P.2d 763, 768 (Alaska 1987).
In order to estop an assertion of the statute of limitations
defense, the plaintiff must satisfy three conditions: (1) the
plaintiff's pursuit of the initial remedy must give the defendant
notice of the claims against her; (2) the defendant must not be
prejudiced in her ability to gather evidence; and (3) the
plaintiff must have acted in good faith. Id.
Here the Smiths were induced to postpone prosecution of
the suit by Stratton's request for an indefinite extension of
time to file an answer. Thus, we hold that all three conditions
for application of equitable estoppel are satisfied: Stratton
was aware of the claims against her and benefited from the delay
because she was not required to retain an attorney to answer the
complaint and the Smiths acted in good faith in granting Allstate
extensions of the time to answer.9
A similar situation to the instant case occurred in
State v. Reefer King Co., 559 P.2d 56, 63 (Alaska 1976), where
the state and New Nelco entered into a stipulation extending the
state's time in which to answer the complaint until after this
court decided a pending case. After our decision, the state
filed its answer, asserting that New Nelco lacked capacity to sue
and that the statute of limitations had run. We concluded that
if the state had filed its answer at the time required, New Nelco
would have had the opportunity to remedy its lack of capacity
before the statute of limitations had run. Therefore, we held
that equitable estoppel barred the assertion of the statute of
limitations defense.
CONCLUSION
Alaska Statute 09.10.240 applies to actions dismissed
for failure to prosecute. Thus, we conclude that the superior
court's dismissal of the Smiths' action on the grounds that it
was barred by the two year statute of limitations is reversed.
Further, given the particular circumstances of this record, we
hold that Stratton is equitably estopped from asserting the
statute of limitations defense.
REVERSED and REMANDED for further proceedings
consistent with this opinion.
COMPTON, Justice, concurring.
The court concludes that Alaska's Savings Statute,
AS 09.10.240, applies to all actions which have been dismissed,
whether at the trial court or appellate court level. I agree.
Since this issue is dispositive of the case, there is no reason
to address whether Stratton is equitably estopped from asserting
the defense of the statute of limitations. I express no opinion
whether I agree with the court's analysis and conclusion on this
issue.
BURKE, Justice, dissenting, in part, and concurring, in
part.
I join in part II of the court's opinion and concur,
therefore, in the result. I disagree, however, with part I of
the opinion.
First, there is no need to decide the issue discussed
in part I. Second, I think the holding in part I is plainly
wrong. Using the reasoning of the Oregon Supreme Court in Fuller
v. Safeway Stores, Inc., 481 P.2d 616, 617 (Oregon 1971), I would
hold AS 09.10.240 inapplicable in the case at bar.
_______________________________
1. Civil Rule 41(e) provides:
Dismissal for Want of Prosecution.
Actions which have been pending in a court
for more than one year without any
proceedings having been taken may be
dismissed as a matter of course, for want of
prosecution, by the court on its own motion
or on motion of a party to the action. The
clerk shall review all pending cases semi-
annually and in all cases in which no
proceedings have been taken for more than one
year, the court shall hold a call of the
calendar or the clerk shall send notice to
the parties to show cause in writing why the
action should not be dismissed. If good
cause to the contrary is not shown at a call
of the calendar or within 30 days of
distribution of the notice, the court shall
dismiss the action. The clerk may dismiss
actions under this paragraph if a party has
not opposed dismissal. A dismissal for want
of prosecution is without prejudice unless
the court states in the order that the case
is dismissed with prejudice.
2. Civil Rule 16.1(g) reads:
Inactive Calendar and Dismissal. Where
a motion to set trial and certificate have
not been filed within 270 days after the
service of the summons and complaint, the
case shall be transferred to the inactive
calendar by the clerk of the court. The
clerk shall promptly notify counsel in
writing of the transfer. All cases which
remain on the inactive calendar for more than
60 days shall be dismissed, unless within
that period: (1) A proper motion to set trial
and certificate is filed; or (2) the court on
motion for good cause orders a case continued
on the inactive calendar for a specified
additional period of time. Notwithstanding
Civil Rule 41(b), the dismissal does not
operate as an adjudication upon the merits
unless a previous dismissal has been entered
by the court under this rule, or by the plain
tiff or parties under Civil Rule 41(a)(1).
If a case dismissed under this rule is filed
again, the court may make such order for the
payment of costs of the case previously dis
missed as it may deem proper, and may stay
the proceedings in the case until the party
has complied with the order.
3. The cases against both Son and Waldon were subsequently
dismissed with prejudice on July 3, 1990, and January 30, 1991,
respectively.
4. Since the issues before the superior court involved
questions of law, the standard of review is de novo. Kollodge v.
State, 757 P.2d 1028, 1032 (Alaska 1988).
5. This court previously has declined to reach this issue.
Evron v. Gilo, 777 P.2d 182, 184 (Alaska 1989); Shiffman v. K,
Inc., 657 P.2d 401, 402 n.1 (Alaska 1983); Atlas Enters., Inc. v.
Consolidated Const. Co., 572 P.2d 68, 70 n.1 (Alaska 1977).
6. Alaska Statute 09.10.240 was first enacted in 1962. Ch.
101, 1.24, SLA 1962. It appears likely that the Oregon savings
statute was the source of AS 09.10.240, given the identical text.
7. The Smiths call attention to the court's subsequent
decision in Hatley v. Truck Ins. Exch., 494 P.2d 426 (Or. 1972),
characterizing the decision as a retreat from the court's opinion
in Fuller. This characterization is inaccurate. While the
Hatley court extended the reach of the statute to cover any case
in which the court has been called on to exercise its judicial
function, by determining questions of fact or law, or both, it
only addressed the issue of whether a case dismissed for lack of
jurisdiction may be refiled under the savings statute. 494 P.2d
at 429-30 n.1. In Ferguson, The Statutes of Limitations: Saving
Statutes, 324 (1978), the author notes that "[a]rguably a motion
to dismiss for want of prosecution involves a judicial
examination of issues between the parties so as to constitute a
trial," however, he continues by observing that it is possible
that the court "will restrict the definition to issues relating
to the merits or to procedural issues such as jurisdiction." The
Hatley court stated that the purpose of the statute is "to avoid
the bar of the statute of limitations for a diligent plaintiff
whose timely action has been dismissed over his objection without
a determination on the merits." 494 P.2d at 430. The court also
noted that "[t]here is a distinct policy reason for denying the
benefit of the statute to a plaintiff who has by inaction allowed
his claim to be dismissed for want of prosecution." 494 P.2d at
429-30 n.1.
8. The safeguards from abusive delays provided by Civil
Rules 16.1 and 41 support our conclusion. Rule 16.1(g) provides
that a dismissal "does not operate as an adjudication on the
merits unless a previous dismissal has been entered by the court
under this rule." Rule 16.1(g) further empowers the court to
require the payment of costs and to impose a stay of the
proceedings until the costs are paid when the case is refiled
after dismissal under the rule. Additionally, Rule 41(e)
provides that a case dismissed for want of prosecution is
dismissed without prejudice under Rule 41(e) unless the court
states otherwise.
9. Quasi estoppel "precludes a party from taking a position
inconsistent with one he or she has previously taken where circum
stances render assertion of the second position unconscionable."
Jamison v. Consolidated Util. Inc., 576 P.2d 97, 102 (Alaska
1978). Quasi estoppel does not require ignorance or reliance by
the party claiming estoppel. Id. In determining quasi estoppel
issues, a court should consider whether the party asserting the
inconsistent position has benefited or produced a detriment by
the first position, the magnitude of the inconsistency, and
whether the first position was asserted with full knowledge of
the facts. Id.
Here it is unconscionable for Stratton to request and
receive two extensions of time to answer the complaint and then
to assert the statute of limitations. Allstate benefited from
the extension of time because Allstate did not have to retain and
pay for an attorney to file the answer.
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