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Demmert v. Kootznoowoo (7/2/98), 960 P 2d 606
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
GERTRUDE A. DEMMERT and )
JESSIE N. JIM, For Themselves ) Supreme Court No. S-7536
And For All Others Who Are )
Similarly Situated, ) Superior Court No.
) 1JU-95-1688 CI
Appellants, )
)
v. ) O P I N I O N
)
KOOTZNOOWOO, INC., )
)
Appellee. ) [No. 5006 - July 2, 1998]
______________________________)
Appeal from the Superior Court of the State of
Alaska, First Judicial District, Juneau,
Larry R. Weeks, Judge.
Appearances: Fred W. Triem, Petersburg,
Douglas M. Branson, Tacoma, Washington, for Appellants. Clark Reed
Nichols, Perkins Coie, Seattle, for Appellee.
Before: Compton, Chief Justice, Matthews,
Eastaugh, Fabe, and Bryner, Justices.
MATTHEWS, Justice.
FABE, Justice, with whom COMPTON, Chief Justice,
joins, dissenting.
I. INTRODUCTION
The superior court converted a motion for judgment on the
pleadings to a motion for summary judgment and granted the motion
without advance notice of the conversion. The question in this
case is whether this was reversible error. We answer in the
affirmative, because the opposing party was not given a reasonable
opportunity to oppose the motion as a motion for summary judgment.
II. FACTS AND PROCEEDINGS
In order to impart an understanding of what occurred, it
is necessary to describe the proceedings below in some detail. In
this class action, certain shareholders of the Angoon village
corporation, Kootznoowoo, Inc., challenge the corporation's
practice of paying the travel costs of shareholders who are
employed as longshoremen by a joint venturer of the corporation at
a distant site. The complaint was initially filed in May 1995 and
amended on June 30, 1995. The complaint contained five substantive
causes of action: first, that the payments were discriminatory
dividends in violation of AS 10.06.305(b) and AS 10.06.313; second,
that the payments de facto created a class of preferred shares
without the preferences being specified in the articles of
incorporation in violation of AS 10.06.308; third, that the
payments violated the common law equal treatment rule; fourth, that
the payments amounted to waste and illegal gifting of corporate
assets; and fifth, that the payments were "ultra vires."
Kootznoowoo answered the first amended complaint on July
12, 1995, and moved for judgment on the pleadings on August 2,
1995. It stated two grounds to support its motion for judgment on
the pleadings: first, "the gravamen of Plaintiffs' complaint is in
the nature of a derivative action where the alleged injured party
is the Corporation"; and second, the plaintiffs were required to
join the longshoremen as defendants under Civil Rule 19. This
appeal concerns only Kootznoowoo's first theory for summary
judgment, the gravamen argument. In its supporting memorandum,
Kootznoowoo focused on the complaint's allegations that the
challenged payments were corporate waste and ultra vires. It
argued that plaintiffs' claims "do not constitute a class action";
instead they "are in the nature of a shareholders['] derivative
action to recover alleged wrongs against the Corporation." It went
on to contend that the prerequisites for bringing a derivative
action had not been met.
Two days after moving for judgment on the pleadings,
Kootznoowoo moved for partial summary judgment, seeking a
declaration that the two-year statute of limitations contained in
AS 09.10.070 governed the claims asserted in the amended complaint.
On August 2, 1995, Kootznoowoo moved to change venue from
Petersburg to Juneau. In support of this motion, Kootznoowoo filed
lengthy affidavits of Gerald J. Engel and Robert E. Manning. The
Engel affidavit, among other things, described in detail the
circumstances surrounding the challenged payments. These
affidavits were explicitly submitted only to support Kootznoowoo's
motion for change of venue, but their subject matter went beyond
venue issues.
In plaintiffs' response to Kootznoowoo's motion for
judgment on the pleadings, filed August 21, 1995, they argued that
the gravamen of the suit was the payment of discriminatory
dividends, and they filed a lengthy memorandum of law arguing that
the remedy for the payment of discriminatory dividends is a direct
rather than a derivative action.
In its reply filed September 5, 1995, Kootznoowoo
summarized plaintiffs' allegations and inserted a long footnote
which quoted extensively from the Engel affidavit "to clarify the
nature of the expenditures." Kootznoowoo then turned to
plaintiffs' allegations that the payments were discriminatory
dividends, and argued that plaintiffs' characterization was not
controlling. Instead, the court could determine "by viewing the
complaint taken as a whole"that the gravamen of the plaintiffs'
complaint was that the corporation had been injured by the
payments, and that the plaintiffs had alleged "no direct loss or
injury apart from the diminution in the value of their stock due to
the injury to the Corporation . . . ." Kootznoowoo's argument thus
continued to focus on the pleadings. It did not integrate into its
argument the factual averments of the Engel affidavit concerning
the travel payments.
At the outset of the oral argument on the motion for
judgment on the pleadings, held December 5, 1995, counsel for
Kootznoowoo announced that the motion for judgment on the pleadings
should be converted to a motion for summary judgment under Rule 56
because of the Engel and Manning affidavits. Kootznoowoo argued
that the affidavits set forth undisputed facts. In response, the
plaintiffs asserted that the evidence was controverted. They
requested the opportunity to take the depositions of Engel and
Manning, and to question them with regard to their affidavits. [Fn.
1]
After oral argument the court recessed briefly, then
reconvened and announced its decision. The court stated, "I'm
dealing with the motion as if it were a motion for summary
judgment." The court then ruled that the challenged distributions
were not dividends. "I don't think that there is anything in the
record to suggest that there were dividends. I don't think that
there's anything in the record to suggest that it was
discriminatory."
After announcing its ruling, the court asked co-counsel
for the plaintiffs if they had any questions. Counsel began what
appeared to be an objection to the ruling on the basis that it
concerned the merits rather than the issues raised by "defendant's
narrow motions." Counsel's statement was terminated by the court,
which repeated its request for questions, implying that it would
not entertain objections. [Fn. 2]
III. DISCUSSION
A. The Superior Court Committed Reversible Error by
Converting Kootznoowoo's Motion for Judgment on the Pleadings to a
Motion for Summary Judgment without Giving the Plaintiffs Notice
and an Opportunity to Oppose the Motion as a Motion for Summary
Judgment.
1. The superior court properly converted the motion
for judgment on the pleadings to a motion for summary judgment when
it considered matters outside of the pleadings.
Alaska Civil Rule 12(c) provides in part:
If, on a motion for judgment on the pleadings,
matters outside the pleadings are presented to and not excluded by
the court, the motion shall be treated as one for summary judgment
and disposed as provided in Rule 56, and all parties shall be given
reasonable opportunity to present all material made pertinent to
such a motion by Rule 56.
In Martin v. Mears, 602 P.2d 421 (Alaska 1979), we
interpreted language in Civil Rule 12(b), which is similar to the
language in Civil Rule 12(c), regarding what the trial court should
do when matters outside the pleadings are presented. We stated:
The terms of Rule 12(b) make conversion
mandatory whenever matters outside the pleadings "are presented to
and not excluded by the court." In this regard, "[t]he court has
complete discretion to determine whether or not to accept any
material beyond the pleadings that is offered in conjunction with
a Rule 12(b)(6) motion." If the trial court exercises its
discretion to exclude such outside materials, conversion is not
required, and the motion is then to be decided as a Rule 12(b)(6)
motion.
We deem it of significance that Civil
Rule 12(b)(6) requires the trial court affirmatively to exclude
outside materials if it does not consider the conversion of a Rule
12(b)(6) motion to one for summary judgment to be desirable.
Therefore, in the future all trial courts must expressly state
whether they have in fact excluded or considered such materials in
reaching their decisions. In the instant case the superior court
was under a mandatory duty to treat Mears' 12(b)(6) motion "as one
for summary judgment and [dispose of it] as provided in Rule 56"
after giving the parties a "reasonable opportunity to present all
material made pertinent to such a motion by Rule 56."
Id. at 426 (footnotes omitted).
In this case, the court properly announced that it had
chosen to deal with the motion for judgment on the pleadings as a
motion for summary judgment. Plaintiffs argue, however, that the
court failed to give them a "reasonable opportunity to present all
material"pertinent to opposition to a motion for summary judgment,
as required by Rule 12(c).
As noted, Kootznoowoo first gave notice that its motion
should be considered a motion for summary judgment at oral
argument, and the court first notified plaintiffs that the motion
would be so converted when it announced its decision. Given these
facts, plaintiffs' claim that they were not given a reasonable
opportunity to oppose the motion as a motion for summary judgment
has at least facial validity. Kootznoowoo argues, however, that
the superior court did not commit error, or at least committed no
reversible error, for reasons that we examine at this time.
2. The plaintiffs did not concede on appeal that there
are no genuine issues of material fact.
Kootznoowoo argues that the plaintiffs have conceded on
appeal that there are no factual issues which require resolution.
Kootznoowoo points out that plaintiffs state in the standard of
review section of their brief:
There are no factual disputes presented
in this appeal. The trial court granted summary judgment to the
defendant and then dismissed the case. The only facts needed for
a decision are proved by the evidence and the admissions in the
record: the testimony in the affidavits, the exhibits, and the
pleadings themselves.
However this statement is preceded by a seemingly conflicting
statement:
This is a case in which the opposing
parties harbor vastly differing versions of the facts and the legal
implications of each version of the facts. As such, plaintiffs
contend, rendition of a summary judgment, especially one rendered
by the court sua sponte, was highly improper. A trial is necessary
in order more fully to develop the facts of the case.
These statements concerning the non-existence or the
existence of factual issues may be reconcilable. Plaintiffs ask
this court to rule as a matter of law that the payments were
dividends. [Fn. 3] Plaintiffs may mean that the averments in the
affidavits offered by Kootznoowoo suffice to show that the travel
expense payments were dividends, and thus plaintiffs are entitled
to the ruling they request, but do not suffice to show that the
payments were not dividends; thus summary judgment for Kootznoowoo
must be reversed. This is not logically inconsistent, as the proof
needed to show the affirmative of a proposition is often different,
and more limited, than the proof needed to show the negative of the
same proposition. [Fn. 4] Alternatively, the plaintiffs may be
arguing that there are no "factual disputes,"because the case on
appeal should be decided on procedural grounds, i.e., that the
superior court did not comply with Rule 12(c). However, they also
argue, in case this court reaches the question whether summary
judgment was appropriate, that the evidence on whether the
expenditures were discriminatory dividends was controverted.
Regardless of the meaning of the statement on which
Kootznoowoo bases its concession argument, plaintiffs' brief may
not be read as conceding that there are no genuine issues of
material fact relating to the court's grant of summary judgment in
favor of Kootznoowoo. In addition to the second statement quoted
above, the plaintiffs contend that as a matter of fact, the
longshoremen interests have captured the board of directors, and
that the judgment of the board is "thoroughly infected by conflicts
of interest." More generally, they argue that they have not been
given a fair opportunity to develop factual opposition to the
converted motion, because this case was in its early stages when
the court made its ruling, and because Kootznoowoo had refused to
respond to their initial discovery efforts on the ground that
Kootznoowoo's pending motion would render discovery "irrelevant."
Based on the foregoing, we reject Kootznoowoo's argument that
plaintiffs have conceded that there are no genuine issues of
material fact.
3. Plaintiffs were not given notice and a reasonable
opportunity to oppose the motion as a motion for summary judgment.
Kootznoowoo also contends that "[a]ppellants were given
a reasonable opportunity to present all material made pertinent to
Kootznoowoo's motion for summary judgment." Although Kootznoowoo
does not directly explain this assertion, Kootznoowoo probably
means that plaintiffs should be charged with notice that
Kootznoowoo would seek to convert its motion for judgment on the
pleadings to a summary judgment motion, or that the trial court
would probably convert the motion. The event which might give rise
to such notice would be Kootznoowoo's reliance on the affidavits of
Engel and Manning. We do not believe that under the circumstances
of this case this reliance triggered a duty on the part of
plaintiffs to anticipate an unannounced conversion.
Kootznoowoo did not rely on, or even mention, the
affidavits in its initial motion. When the affidavits were filed,
they were explicitly filed only in support of Kootznoowoo's motion
for change of venue. Plaintiffs responded to the motion for
judgment on the pleadings as such, and not as a motion for summary
judgment. They did not mention the affidavits. Further, when, in
its reply memorandum, Kootznoowoo did for the first time refer to,
and quote, the Engel affidavit, it did so in a manner which was
tangential to its primary argument, which continued to be that the
complaint was insufficient on its face. Did plaintiffs then have
a duty to seek leave of the court to file an additional opposition
because the nature of Kootznoowoo's reply might effect a
conversion? Although the most cautious lawyer might have done so,
we think the answer is no. The function of a reply memorandum is
to respond to the opposition to the primary motion, not to raise
new issues or arguments, much less change the nature of the primary
motion. E.g., Alaska State Employees Ass'n v. Alaska Public
Employees Ass'n, 813 P.2d 669, 671 n.6 (Alaska 1991) (argument
raised for the first time in reply memorandum could not be
considered); Bittner v. State, 627 P.2d 648, 649 (Alaska 1981)
(summary judgment may not be upheld on the basis of a ground which
was urged for the first time in the movant's reply memorandum).
4. Plaintiffs adequately objected to the superior
court's decision and are not required to make a detailed showing of
prejudice.
Kootznoowoo also argues that "[a]ppellants did not
object, did not claim prejudice, did not claim surprise, did not
claim lack of notice, and did not move for a continuance pursuant
to Civil Rule 56(f)."These arguments are in many respects
inaccurate. When Kootznoowoo first announced an intention to have
its motion treated as a motion for summary judgment, the plaintiffs
responded, in effect, that such an action would be inappropriate
since the evidence was controverted, that Kootznoowoo had resisted
discovery, and that depositions of Engel and Manning were desired.
See supra note 1. Further, the court first announced its position
that it would treat the motion as a motion for summary judgment as
a part of its decision on the merits. We cannot expect counsel to
interrupt the court when it is announcing its decision. At the end
of the oral decision, counsel began to object to the scope of the
court's ruling, but the court made it clear that it did not want to
hear the objection. See supra note 2.
Finally, it is inappropriate to require a detailed
showing of prejudice from a party who has not had a reasonable
opportunity to oppose a motion for summary judgment, whether
converted or original. A party opposing a motion for summary
judgment is entitled to conduct discovery germane to its
opposition. Where the party has not been dilatory in seeking
discovery and identifies those people whom it intends to depose, it
should be granted an extension under Civil Rule 56(f) [Fn. 5] to
conduct discovery. Gamble v. Northstore Partnership, 907 P.2d 477,
485-86 (Alaska 1995). These conditions apply to plaintiffs in this
case, for they identified the witnesses whom they wished to depose
and, given the compressed sequence of events, Kootznoowoo cannot
claim they were dilatory.
We thus reject Kootznoowoo's arguments that the superior
court did not commit reversible error. The court violated Rule
12(c) by ruling on the converted motion for summary judgment
without giving the plaintiffs a reasonable opportunity to present
matter pertinent to the motion. [Fn. 6] We turn now to the
question of the appropriate remedy.
B. The Superior Court on Remand Can Consider Kootznoowoo's
Motion as a Motion for Summary Judgment, as Long as It Complies
with the Requirements of Civil Rule 56; Alternatively, It Can
Consider the Motion as a Motion for Judgment on the Pleadings,
Excluding All Matters Outside the Pleadings.
In Martin, we noted that a reviewing court has three
available options when it finds that the trial court has not
complied with the conversion requirements of Civil Rule 12(b):
One alternative calls for reversal of the
superior court for its failure to comply with the requirements of
Civil Rule 12(b) and a remand for proper consideration as either a
Rule 12(b)(6) dismissal motion with the outside matters expressly
excluded or a Rule 56 motion for summary judgment with the
attendant requirements of that rule. A second option is to review
the superior court's decision as a Rule 12(b)(6) dismissal,
treating that decision as if a motion for dismissal had been
granted after exclusion of the outside materials as required. A
third option is to review the superior court's decision as an entry
of summary judgment, treating that decision as if summary judgment
had been granted after the necessary conversion of the Rule
12(b)(6) motion into one for summary judgment.
602 P.2d at 427.
The third option -- reviewing the decision as if summary
judgment had been granted after conversion -- is inappropriate in
view of our conclusion that a reasonable opportunity to oppose the
converted motion was not afforded. We reached the same conclusion
in Shooshanian v. Wagner, 672 P.2d 455, 460-61 (Alaska 1983). The
second option -- reviewing the motion as an unconverted motion for
judgment on the pleadings -- seems inappropriate since the superior
court's decision and the parties' appellate briefs focus on the
propriety of summary judgment.
We choose, therefore, to vacate the judgment and remand
this case to the superior court. On remand, the superior court may
consider Kootznoowoo's motion as a motion for summary judgment
"with the attendant requirements"of Civil Rule 56. Martin, 602
P.2d at 427. Alternatively, the superior court may consider the
motion as a motion for judgment on the pleadings, excluding all
matters outside the pleadings. If the court chooses this option,
it may find guidance on the issue of whether a direct or derivative
action is appropriate in our recent opinion in Hanson v. Kake
Tribal Corporation, 939 P.2d 1320 (Alaska 1997).
IV. CONCLUSION
For the above reasons the judgment in this case is
VACATED and this case is REMANDED to the superior court for further
proceedings in accordance with this opinion.
FABE, Justice, with whom COMPTON, Chief Justice, joins, dissenting.
I. INTRODUCTION
Although I agree with the court's opinion that the trial
court erred in converting the motion to dismiss into a summary
judgment motion without prior notice of the conversion, I disagree
with its conclusion that the judgment should be vacated and
remanded. I believe that it would be preferable to proceed under
the second option presented by Martin v. Mears, 602 P.2d 421, 427
(Alaska 1979), which allows us to "review the superior court's
decision as a Rule 12(b)(6) dismissal, treating that decision as if
a motion for dismissal had been granted after exclusion of the
outside materials as required." Because analysis under the second
Martin option reveals that the superior court was correct in
concluding that plaintiffs' allegations must proceed as derivative
actions, I respectfully dissent.
II. DISCUSSION
The court rejects the second Martin option on the theory
that it "seems inappropriate since the superior court's decision
and the parties' appellate briefs focus on the propriety of summary
judgment." Op. at 15. First, when we review the trial court's
conversion of a Rule 12(b)(6) motion to a motion for summary
judgment, it is inevitable that the trial court's decision and the
parties' appellate briefs will focus on the propriety of summary
judgment. Were this fact sufficient to defeat our selection of the
second option, the second option would never be available. Second,
although the appellate briefing focused on the propriety of summary
judgment, the parties' arguments in the trial court focused almost
exclusively on the legal issues raised by the motion to dismiss.
Specifically, the plaintiffs argued that their claims were
appropriately brought as direct actions, and Kootznoowoo contended
that "the gravamen of Plaintiffs' complaint is in the nature of a
derivative action where the alleged injured party is the
Corporation."
The issue of whether plaintiffs' claims were required to
be filed as derivative actions should have been decided on the
basis of the pleadings without reliance on outside materials.
Although "the trial court is free to disregard the parties'
characterization of the cause of action,"it is my view that the
law does not "afford[] the trial court latitude in making its
determination"of the nature of the action. Hanson v. Kake Tribal
Corp., 939 P.2d 1320, 1334 (Alaska 1997) (Fabe, J., dissenting).
Rather, the trial court must look to the body of the complaint to
determine its true nature. See id. In this case, despite
plaintiffs' characterization of their claims as direct actions, the
superior court concluded that plaintiffs' allegations of corporate
waste and ultra vires payments must proceed as derivative actions.
For the reasons discussed below, I believe that the superior
court's conclusion was correct as a matter of law.
Scrutiny of the plaintiffs' complaint itself discloses
that there is an even stronger case to be made than in Hanson that
the allegations must proceed as derivative actions. First, the
plaintiffs in this case expressly allege in the complaint that the
travel payments at issue were ultra vires and "amount[ed] to waste
and gifting of corporate assets." Because these causes of action
represent breaches of the directors' fiduciary duty to the
corporation and a harm to the corporation as a whole, they should
be treated as derivative actions. See Hanson, 939 P.2d at 1327
(stating that "'when a wrong has been done to the corporation, the
shareholder's right to sue the directors or wrongdoers for redress
is derivative and not primary'") (quoting Charles R.P. Keating &
Jim Perkowitz-Solheim, 13 Fletcher Cyclopedia of the Law of Private
Corporations sec. 5928 (perm. ed. rev. vol. 1993)); 12B Fletcher,
supra, sec. 5911 ("The action is derivative if the gravamen of the
complaint is injury to the corporation . . . .").
Second, the travel payments described in the complaint
are even less like dividends than the distributions in Hanson.
Dividends are generally distributed pro rata among shares. See
Black's Law Dictionary 429 (5th ed. 1979). A finding that a
distribution is a dividend "establishes a contractual right on the
part of the individual shareholder to sue the corporation
directly." Hanson, 939 P.2d at 1335 n.6 (Fabe, J., dissenting).
In Hanson, the distributions were tied to the number of shares
owned by each shareholder such that only shareholders with one
hundred shares could participate in the financial security plan.
See id. at 1322. The travel payments in this case, by contrast,
were unrelated to the number of shares owned by each shareholder.
Third, the percentage of shareholders allegedly given
preferential treatment in this case is smaller than in Hanson and
constitutes a small minority of the shareholder class. The
plaintiffs allege in the complaint that approximately sixty to
seventy of the Kootznoowoo shareholders received travel subsidies
and that approximately 550 to 600 did not. Where approximately ten
percent of shareholders have received travel subsidies, the proper
remedy is not to extend the illegal distributions to the remaining
ninety percent of shareholders. Rather, common sense prescribes
that a derivative action is appropriate. If, as the complaint
alleges, the directors' travel payments were ultra vires and
amounted to waste and gifting of corporate assets, the proper
remedy would be to require the directors to repay the corporation.
This approach would make the corporation whole and place the
plaintiffs in the same position they would have been in had the
improper distributions not been made. Although the subsidized
shareholders would receive a windfall, the windfall would be paid
by the directors, not the corporation. Thus, "such a 'windfall'
would not harm the plaintiffs. The plaintiffs would receive no
more and no less than what they were entitled to: the full value of
their shares in the corporation. Any extra payment to shareholders
who received distributions under the plan would be funded entirely
by those found liable for the impermissible distributions, not by
the plaintiffs or the corporation." Hanson, 939 P.2d at 1334
(Fabe, J., dissenting).
Finally, the court in Hanson was particularly concerned
with providing the plaintiffs a meaningful remedy. See id. at
1326-27. The court observed that it was unlikely that a derivative
suit would yield an adequate remedy for the plaintiffs because the
beneficiaries of the payments would not be liable and because it
was "unlikely that any damages collected from the responsible
directors and officers would approximate the sum of payments made
under the plan." Id. at 1327. In this case, however, the
complaint alleges improper payments to only sixty to seventy
shareholders, and there is nothing to suggest that the directors
would be unable to repay the amount spent on these travel payments.
This rationale for departing from the basic principles of corporate
law and for allowing a direct action is therefore less a factor in
this case than it was in Hanson.
III. CONCLUSION
Because the gravamen of plaintiffs' complaint is a wrong
to the corporation as a whole, it is my view that the superior
court was correct as a matter of law in rejecting plaintiffs'
characterization of their allegations as direct actions and in
determining that the claims were in fact derivative in nature.
Given the trial court's legal conclusion, I believe this court
should proceed under the second option provided by Martin and
review the court's decision as a Rule 12(b)(6) dismissal. This
approach would avoid the need for the parties to relitigate the
issues and would promote judicial efficiency. As the court
declines to take this approach, I dissent.
FOOTNOTES
Footnote 1:
Counsel stated:
Good afternoon, your honor. May it
please the court, a few responses to defendant Kootznoowoo's
position. The evidence is controverted. Defendant Kootznoowoo has
stonewalled us on discovery, and we would like to take the
depositions of Mr. Engel and Mr. Manning, and question them with
regard to their affidavits.
With regard to the business judgment
rule, it's not properly before the court. It was introduced by
defendant Kootznoowoo in a reply brief, and the universal practice,
of course, is that new issues and new matters cannot be raised in
a reply brief. Were we to argue against it, we would contravene
the evidence of defendant Kootznoowoo. At least four of these
directors that we know of have members of their immediate families
who benefit from this program of discriminatory travel subsidies.
These travel subsidies are paid with respect to shareholding. It's
important to note that the recipients of these subsidies are not
employees of Kootznoowoo. They're employees of another
corporation. . . .
Footnote 2:
The full colloquy between the court and counsel on this point
is as follows:
The Court: Do you have questions about the
ruling, Mr. Triem [co-counsel for plaintiffs]?
Mr. Triem: Yes, your honor. I understand the
ruling, but it occurs to me that the
oppositions that were filed and the Affidavit
of Representative Parties that I filed on
behalf of the plaintiffs addressed only the
three topics that were before it, and not the
merits of the case itself. In other words, I
did not interpret the defendant's narrow
motions for . . . .
The Court: Do you have questions about the
ruling, Mr. Triem? Mr. Nichols [counsel for
Kootznoowoo], questions about the ruling?
Mr. Nichols: No, your honor.
The Court: I don't find that it's any material
issue of fact on those issues. Court will be
in recess.
Footnote 3:
Plaintiffs have not shown that they are entitled to such
relief, however.
Footnote 4:
In the trial court, the plaintiffs opposed Kootznoowoo's
motion for oral argument of the following motions: Kootznoowoo's
motion for judgment on the pleadings; its motion for partial
summary judgment (statute of limitations); plaintiffs' motion for
class certification; and their motion to strike Kootznoowoo's
opposition to class certification. In their opposition, plaintiffs
stated that the "admissions contained in these two affidavits
[Engel and Manning] and in Kootznoowoo's documents (corporate
memoranda, letters, newsletters, and directors' minutes) are all
the court needs to decide the merits of this case." (Emphasis
added.) The plaintiffs' use of the term "admissions"suggests that
in the trial court as well, plaintiffs meant only that the
affidavits and other materials showed that plaintiffs were entitled
to the relief they sought on their motions (relating to class
certification). From the standpoint of Kootznoowoo as a movant,
the affidavits and other materials were not admissions. See
Evidence Rule 801(d)(2) (admissions are statements of party
opponent or party opponent's representative offered against party
opponent). Thus the plaintiffs did not concede in this pleading
the absence of genuine issues of material fact, especially since
Kootznoowoo had not yet sought summary judgment.
Footnote 5:
Civil Rule 56(f) provides:
Should it appear from the affidavits of
a party opposing the motion that the party cannot for reasons
stated present by affidavit facts essential to justify the party's
opposition, the court may refuse the application for judgment or
may order a continuance to permit affidavits to be obtained or
depositions to be taken or discovery to be had or may make such
other order as is just.
Footnote 6:
We note our agreement with two recent federal circuit cases on
Rule 12(c) conversions having certain factual similarities:
Whiting v. Maiolini, 921 F.2d 5 (1st Cir. 1990) (motion for
judgment on pleadings initially accompanied by outside evidence;
movants gave express notice of intended conversion in reply brief,
four days before summary judgment granted; held: no reasonable
opportunity to respond; court stressed that discovery was in early
stages); and Krijn v. Pogue Simone Real Estate Co., 896 F.2d 687
(2d Cir. 1990) (motion for judgment on the pleadings accompanied by
affidavits stressed jurisdictional issues, but contained merits
claim; opposition including affidavit focused on jurisdictional
issues, also discussed merits claim; held following summary
judgment: no reasonable opportunity to respond; court relied on
primary focus of the motion and opposition).
