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Willis v. Wetco, Inc. (6/4/93), 853 P 2d 533
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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
JOHN WILLIS, )
) Supreme Court No. S-4905
Appellant, )
)
v. ) Superior Court No.
) 3AN-89-5891 CIVIL
WETCO, INCORPORATED, )
) O P I N I O N
Appellee. )
______________________________) [No. 3963, June 4, 1993]
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage,
Dana Fabe and Peter Michalski, Judges.
Appearances: John E. Havelock, Ely &
Havelock, Anchorage, for Appellant. Walter
T. Featherly, III, Koval & Featherly, P.C.,
Anchorage, for Appellee.
Before: Moore, Chief Justice,
Rabinowitz, Burke, Matthews, and Compton,
Justices.
RABINOWITZ, Justice.
The primary issue in this appeal is whether the
superior court abused its discretion in dismissing, pursuant to
Civil Rule 41(e), Willis' counterclaim for failure to prosecute.
FACTS AND LOWER COURT PROCEEDINGS
John Willis is a boiler and water treatment
technologist who began work for Wetco Incorporated (Wetco) as a
commissioned salesman in May of 1986. Wetco's business includes
sales, consulting, and maintenance services related to the
operation of boiler systems, cooling towers, water softeners and
piping systems.
Willis signed a confidentiality agreement with Wetco.
The agreement provided that Willis would never use for himself or
others or convey to others "any secret or confidential
information, knowledge or data of WETCO, INC."obtained by Willis
during the course of his employment. Thereafter, Willis began
receiving base pay from Wetco in addition to his sales
commissions.
Willis also signed a noncompetition agreement.
Approximately one year later Willis resigned from Wetco. Willis
subsequently went to work for Matanuska Maid. Wetco alleges that
Willis violated the terms of the noncompetition and
confidentiality agreements both by working for a Wetco client
while ostensibly working for Wetco, and by using confidential
information that he had gained from Wetco during his subsequent
employment with Matanuska Maid.
Wetco filed a Complaint and Petition for Temporary
Restraining Order asking that Willis be enjoined from violating
the terms of the noncompetition agreement and confidentiality
agreements, alleging both that Willis was in breach of the
agreements and that Willis had tortiously interfered with the
business dealings of Wetco. Judge Fabe granted the Temporary
Restraining Order and thereafter entered a Preliminary Injunction
which limited the scope of Willis' waste water and sanitation
services in Alaska.
On July 26, 1989, Wetco filed a first amended
complaint. On August 14, 1989, Willis filed an answer and
counterclaim. On August 28, 1989, Wetco answered Willis'
counterclaim and filed a motion to remove the case from the fast
track calendar. On October 27, 1989, Judge Shortell reassigned
the case to a "non-fast track Judge." Wetco alleges that no
pleadings were filed in the case for the next 22 months.
On August 13, 1991, the clerk of the superior court
entered an order requesting the parties to show cause in writing
within 30 days why the case should not be dismissed, and noting
that if good cause were not shown, the case would be dismissed
for lack of prosecution under Civil Rule 41(e). On September 12,
1991, Willis filed an Opposition to Entry of Order of Dismissal
and a Statement of Good Cause, and a Memorandum to Set Civil Case
for Trial, noting that:
The reason that the case has been
inactive is that the defendant's injuries at
the hand of the plaintiff are continuing so
that uncertainties in the cumulative injuries
suffered by the defendant are clarified by
the passage of time. But the time is now
ripe for an adjudication of the defendant's
rights.
On October 24, 1991, Judge Michalski dismissed the
case. Willis then filed a motion to reconsider the dismissal,
which was denied. This appeal followed.1
DISCUSSION
A. Did the superior court abuse its discretion by
dismissing Willis' counterclaim for failure to
prosecute?
Civil Rule 41(e) states:
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. . . . A dismissal for
want of prosecution is without prejudice
unless the court states in the order that the
case is dismissed with prejudice.
Willis lists five points to support his claim that the
superior court erred in dismissing his action.2
Willis argues that:
Prior to the Power Constructors
decision, the ordinary practitioner would
appear to have been able to rely on a well
established line of authority in Alaska that
the clerk's notice under Rule 41(e) is a
ringing of the wake-up bell not a thud from
the first shovelful of dirt on the coffin.
We propose that the Power Constructors rule
should be read as meaning "A pretrial
memorandum filed after the court issues its
notice of dismissal does not always
constitute a `proceeding' which would block
dismissal under Court Rule 41(e)."
This argument is without merit. Our statement in Power
Constructors, 811 P.2d 1052, 1054 (Alaska 1991), is clear and
unambiguous: "A pretrial memorandum filed after the court issues
its notice of dismissal does not constitute a `proceeding' under
Civil Rule 41(e)."
Willis argues that his memorandum to set for trial,
coupled with his "good faith explanation"of the reasons for
delay constitute a showing of "good cause" pursuant to Rule
41(e). Willis' "good faith explanation"is his statement that
the case had been inactive because "the defendant's injuries at
the hand of the plaintiff are continuing so that uncertainties in
the cumulative injuries suffered by the defendant are clarified
by the passage of time. But the time is now ripe for an
adjudication of the defendant's rights."
A showing of "good cause"has been described as the
production of "a reasonable excuse for the lack of prosecution."
Power Constructors, 811 P.2d 1052, 1054 (Alaska 1991) (citing to
Brown v. State, 526 P.2d 1365 (Alaska 1974)).
Here, Willis' showing of good cause fails on two
grounds. First, Willis has not explained what aspect of his
damages were continuing to accumulate, or why the time is any
more "ripe"for trial now than earlier if the alleged damages are
still accumulating. Secondly, a review of his counterclaim
indicates that there is no support for this excuse.3 Thus we
conclude that the superior court did not abuse its discretion in
holding that Willis failed to demonstrate good cause.
Lastly, Willis claims that the superior court failed to
consider alternatives to dismissal noting that Power Constructors
requires that "the record clearly indicate a reasonable
exploration of possible and meaningful alternatives to
dismissal."
We have held that a litigation ending sanction, such as
dismissal with prejudice, is an extreme sanction. Prior to
imposition of such a sanction there must be record evidence of
the court's consideration of lesser sanctions. See Power
Constructors, 811 P.2d at 1055; cf. Sandstrom & Sons, Inc. v.
State of Alaska, 843 P.2d 645, 647-48 (Alaska 1992) (requiring
that the record demonstrate consideration of lesser sanctions
prior to a dismissal with prejudice under Rule 37(b)).4
Upon consideration of the foregoing we hold that the
superior court did not abuse its discretion in entering its Civil
Rule 41(e) order dismissing Willis' counterclaim for failure to
prosecute. Given the calendar clearing goal of Rule 41(e) as
well as its additional goal of protecting parties against undue
delay,5 and the fact that dismissals under the rule are without
prejudice, we conclude that a trial court is not under a duty to
explore meaningful alternatives before entering a dismissal
without prejudice under Rule 41(e). The relevant inquiry on the
court's part in cases of this nature is to determine whether any
proceedings have been taken within the one year period, and if no
proceedings have been taken for more than one year to determine
whether or not good cause has been shown why the action should
not be dismissed.6
The superior court's Civil Rule 41(e) dismissal without
prejudice of Willis' counterclaim is AFFIRMED.7
_______________________________
1. This court will review a lower court's dismissal of an
action under Rule 41(e) under the abuse of discretion standard.
Power Constructors, Inc. v. Acres American, 811 P.2d 1052, 1054
(Alaska 1991). Under the abuse of discretion standard, this
court will reverse a lower court if it is "left with the definite
and firm conviction on the whole record that the trial judge has
made a mistake." Gregor v. Hodges, 612 P.2d 1008, 1010 (Alaska
1980) (quoting Gravel v. Alaskan Village, Inc., 423 P.2d 273, 277
(Alaska 1967)).
2. First, Willis notes:
The function of the notice sent out by
the clerk of the superior court under Rule
41(e), ARCP, is to put the parties on notice
that the action will be dismissed if one of
the parties does not undertake an act to be
judicially recognized before the return date
on the notice.
This appears to be more of a statement than an
argument. Willis does not brief this issue with any
particularity, and the statement does not raise any issues not
covered by his fourth claim. Therefore we conclude it does not
merit further discussion.
3. In his counterclaim, Willis stated six causes of action;
(1) for recovery of earnings for services rendered, (2) for
wrongful discharge (alternatively referenced as constructive
discharge), (3) for tortious interference with the right to
contract with others, (4) for "abuse of process,"alleging that
Wetco had used false or intentionally misleading testimony, (5)
for conspiracy in restraint of trade, (6) for "attempt to
monopolize." By his own admission in the counterclaim, damages
for the first claim could be recovered based upon an accounting
by Wetco. Damages for the second claim, if found to be
warranted, would be awarded based on an estimate of the harm to
Willis' earning capacity projected forward in time. With regard
to the third claim, Willis could have requested an injunction to
address the claim for tortious interference, if he believed the
interference was ongoing. Crediting the allegations of the
fourth claim, Willis would have been benefited by a swift
resolution of the case, as the preliminary injunction could have
been dissolved. The primary focus of the final causes of action,
for conspiracy and attempt to monopolize, is damage to Willis at
the time that he signed the anti-competition agreement and
shortly thereafter, while he resided in Alaska. Again, if
proved, these damages could be estimated and projected forward in
time to provide him with adequate compensation under AS
45.50.576.
4. Rule 41(e) provides that unless the court specifically
states that a dismissal is with prejudice, the action is
dismissed without prejudice. See Champion Oil Co., Inc. v.
Herbert, 552 P.2d 670 (Alaska 1976). Here the notice of
dismissal reads: "It is ordered that the case is dismissed
without prejudice to the remaining issues." Therefore, under the
terms of Rule 41(e) the dismissal in the case at bar was without
prejudice.
5. In Power Constructors, Inc. v. Acres American, 811 P.2d
1052 (Alaska 1991) we said:
A pretrial memorandum filed after
the court issues its notice of dismissal does
not constitute a "proceeding" under Civil
Rule 41(e). Any other finding would severely
weaken Civil Rule 41(e). This rule serves
several functions. First, as an administra
tive matter, it allows the court to "clear
[its] calendar of cases that are not being
prosecuted diligently." First Nat'l Bank of
Fairbanks v. Taylor, 488 P.2d 1026, 1032
(Alaska 1971). Second, it forces plaintiffs
to keep their cases moving at a reasonable
speed. Id. "Under Rule 41(e), the plaintiff
bears the burden to diligently pursue the
enforcement of his cause of action."
Shiffman, 657 P.2d at 403. Finally, Civil
Rule 41(e) "serves to protect a defendant
from undue delays which might subject him to
harassment or force settlement of an
otherwise non-meritorious lawsuit."
Id. at 1054 (footnote omitted).
6. Alaska Statute 09.10.240, the Alaska savings statute,
applies to Civil Rule 41(e) dismissals. See Smith v. Stratton,
835 P.2d 1162, 1165 (Alaska 1992).
7. We have examined Willis' remaining assertions of error
and have determined that none are properly before us. All issues
pertaining to the superior court's issuance of the preliminary
injunction are now moot. Further, our review of the record
persuades us that no basis for invocation of the public interest
exception to the mootness doctrine has been demonstrated. None
of Willis' points regarding the enforceability of the covenant
not to compete has been raised properly in this appeal.
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