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Stinson v. Holder (3/17/00) sp-5252
Stinson v. Holder (3/17/00) sp-5252
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
LARRY W. STINSON, )
) Supreme Court No. S-8286
Appellant, )
) Superior Court No.
v. ) 4FA-94-1778 CI
)
RUSSELL and JUDY HOLDER, ) O P I N I O N
)
Appellees. ) [No. 5252 - March 17, 2000]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
Charles R. Pengilly, Judge.
Appearances: Fleur L. Roberts, Law Offices of
Fleur L. Roberts, for Appellant. Gary Foster,
Law Office of Gary Foster, Fairbanks, for
Appellees.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.
EASTAUGH, Justice.
1. INTRODUCTION
Following a trial he did not attend, real estate agent
Larry Stinson was found by the jury to have breached his fiduciary
duty to buyers of a home and was held liable for damages. He moved
under Alaska Civil Rule 60(b) for relief from the resulting
judgment, making a prima facie showing that he had been incompetent
at the time of trial. The superior court denied his motion without
determining whether Stinson had been incompetent. We hold that it
was an abuse of discretion not to make that determination, and
therefore remand. If the superior court finds that Stinson was
incompetent, he will be entitled to relief from judgment and to a
new trial.
2. FACTS AND PROCEEDINGS
Russell and Judy Holder purchased a home through Larry
Stinson and his employer, ReMax of Fairbanks.1 Concerned by
cracked windows which appeared to be caused by settlement, they
conditioned their purchase on a satisfactory engineer's report.
Engineer Brian Borjesson inspected the house and reported that he
foresaw no major future problems.
Within four months after the Holders took possession,
cracks began to appear in the walls. The problem steadily worsened
and the Holders filed suit against the sellers, the Eckerts. The
Holders later amended their complaint to add claims against
Stinson, ReMax of Fairbanks, and the sellers' real estate agent,
Randy Smith.
An attorney represented Stinson during the pleading and
discovery phases of the case, but the court permitted the attorney
to withdraw with Stinson's consent on March 6, 1997. A few days
before the trial commenced on June 10, 1997, Stinson advised the
court that he would not be present due to a "serious medical
condition" and asked the court to play his videotaped deposition
testimony in his absence. He was neither present nor represented
at trial.
Judge Charles R. Pengilly presided over the jury trial of
the Holders' claims. Midway through the trial, the court addressed
Stinson's absence and decided to advise the jury that Stinson was
absent because of health reasons and that it should not draw any
inference from that fact. ReMax and the Eckerts then sought to
impeach Stinson's preserved deposition testimony by proffering
evidence of Stinson's current medical problems and alleged memory
loss going back to when he gave the first of several depositions.
The Holders' attorney objected, claiming the late notice made it
impossible for him to effectively address Stinson's alleged memory
problems. The court acknowledged that it was a close question, but
disallowed testimony from Stinson's treating physicians at the Mayo
Clinic and from Stinson's wife, Aviva Stinson. The court noted
that its concern was for the parties before it and concluded that
the Holders would be substantially prejudiced if they were unable
to conduct discovery. Stinson's videotaped deposition testimony
was played for the jury.
The jury found that Stinson had failed to disclose
relevant information to the Holders, causing them to suffer damages
totaling $280,000. Based on its conclusion that ReMax of Fairbanks
was vicariously liable, the court entered judgment for the Holders
against Stinson and ReMax jointly and severally. ReMax moved for
judgment notwithstanding the verdict and for a new trial. Stinson,
whose wife was by then acting for him under his power of attorney,
joined in ReMax's motion after the briefing was complete. The
superior court denied the motions.
Meanwhile, in a new superior court proceeding, Aviva
Stinson petitioned in August 1997 for appointment of a conservator
for Stinson; she alleged that he was unable to manage his property
and affairs. She attached copies of Stinson's Mayo Clinic records
to support her petition. The records noted that Stinson exhibited
mental deficiencies in learning, memory, cognitive speed and
flexibility, and confrontation naming, indicating an Alzheimer's
type dementia. Following a hearing, Judge Ralph R. Beistline found
that Stinson was "unable to manage property and financial affairs
because of incapacity" and appointed two conservators, one of whom
was Stinson's son, Dr. Lawrence William Stinson, Jr. Aviva Stinson
notified Judge Pengilly of the conservatorship action and of the
conservators' appointments.
In January 1998 Stinson, through his son, filed a Rule
60(b) motion for relief from the Holders' judgment against him.
The motion papers claimed that relief was required because Stinson
had been incompetent. Following briefing and the submission of
affidavits and transcripts discussing Stinson's mental state, Judge
Pengilly denied the motion. The court conducted no hearing to
resolve possible fact disputes before denying the motion. We
discuss the motion in more detail in Part III.A, below.
Stinson appeals.2
3. DISCUSSION
Stinson argues that it was error to deny his Civil Rule
60(b) motion without conducting an evidentiary hearing. He also
argues that reversal is required because the court committed other
alleged errors: (1) failing to include the names of Brian Borjesson
and Randy Smith on the special verdict form; (2) excluding evidence
of his mental state when ReMax and the Eckerts sought to impeach
his deposition testimony; and (3) failing to grant his motions for
judgment notwithstanding the verdict and for a new trial.
1. The Motion for Civil Rule 60(b) Relief
1. Stinson's alleged incompetency
In January 1998 Stinson moved under Civil Rule 60(b) for
relief from the judgment entered against him about six months
before.3 The motion papers quoted from Mayo Clinic records to
support Dr. Stinson's allegation that his father suffered from
dementia and was incapable of understanding the consequences of
failing to attend the trial or to request a trial continuance. He
also argued that Stinson's competence at the time of his
depositions was in doubt. Dr. Stinson also informed the court that
Stinson had been adjudicated incompetent in the conservatorship
proceeding.
Stinson sought relief under Rule 60(b)(1), on the theory
his incapacity caused mistake, inadvertence, surprise or excusable
neglect; under Rule 60(b)(4), on the theory his incapacity resulted
in entry of a void judgment; or under Rule 60(b)(6), on the theory
other reasons justified relief from the judgment.
In opposition, the Holders argued that there was no
cognizable evidence that Stinson was legally incompetent when the
matter went to trial in June 1997. The Holders filed excerpts of
sworn hearing and deposition testimony from a judgment debtor
inquiry to support their contention that Stinson was not legally
incompetent. Those transcripts, however, also included Dr.
Stinson's and Aviva Stinson's testimony that Stinson was impaired
before and around the time of the 1997 trial.
Dr. Stinson, a medical doctor, submitted his own
affidavit with Stinson's reply memorandum. He stated in it that
his father's memory problems began as early as 1993, recurred in
1994, and became "steadily progressive" in 1995. He also stated
that Alzheimer's and dementia are not conditions that can be turned
off and on but are chronic and progressive. He affied that his
father's treating physician, Dr. Janice Onorato, a neurologist,
would be available to testify at a hearing, and that he would be
filing a sealed report from a neurologist within the week. The
reply memorandum again noted the adjudication of incompetence
entered in the conservatorship proceeding.
The superior court denied Stinson's motion without
conducting an evidentiary hearing. A day after the denial order
was distributed the court received the Holders' request for a
hearing under Rule 77(e) and Stinson's request for a conference to
schedule an evidentiary hearing under Rule 60(b). Because the
court had already denied Stinson's motion, it stamped "moot" on the
hearing requests.
Stinson argues on appeal that it was an abuse of
discretion to deny him a hearing on his motion and to deny his
motion.
Rule 60(b) permits the court to grant relief from
judgment under certain circumstances.4 The rule "should be
liberally construed to enable courts to vacate judgments whenever
such action is necessary to accomplish justice."5 But we will not
disturb a trial court's denial of a Rule 60(b) motion except upon
a showing of abuse of discretion.6 To find an abuse of discretion,
we must be left with the definite and firm conviction on the whole
record that a mistake has been made.7
In Lovell v. Lovell8 we held that the movant made a
showing of excusable neglect under Rule 60(b)(1), entitling her to
relief, because the record disclosed that her failure to appear at
a divorce property division hearing was not the result of her
"free, calculated, and deliberate choice."9 We deemed significant
the fact that she had a long history of medical and psychological
problems which were known to the court.10 Given her absence and her
known problems, we had serious doubts concerning the fairness of
the proceeding.11 In that case, notice to the trial court that a
problem had arisen was "sufficient to trigger an inquiry."12 Her
absence and psychological problems justified setting aside the
judgment for excusable neglect.13
The motion papers here revealed a genuine dispute about
Stinson's competence when he permitted his defense attorney to
withdraw, chose not to attend the trial or present a defense, and
failed to move for a continuance. These circumstances demonstrated
the probable prejudice resulting from any incompetency, and
therefore demonstrated the materiality of the dispute. Given the
evidence submitted with the motion, the opposition, and the reply,
it was necessary to conduct an evidentiary hearing to allow
testimony about Stinson's mental state and to find facts about his
competence at relevant times. The superior court had discretion to
decide whether to hear oral argument on Stinson's motion,14 and it
could well have decided that oral argument on the legal
propositions presented was not necessary. But it was an abuse of
discretion to deny the motion without hearing and determining the
relevant facts. Stinson's conservator represented that he would
present testimony and evidence that Stinson was incompetent at
critical times in the litigation. Given Stinson's prima facie
showing of incompetence, and the plausibility of his claim that his
incapacity prejudiced him at trial, the court could not deny
Stinson's Rule 60(b) motion without resolving these fact disputes.15
The failure to conduct a hearing or resolve fact disputes
about a party's competence at trial does not inevitably require a
reversal. Has the party shown that the failure to hold a hearing
prejudiced him?16
We conclude that Stinson has demonstrated that his
alleged incompetence could have affected the outcome of the trial
or the entry of judgment in at least two ways.
First, if he was not competent, Stinson could not be
deemed to have knowingly consented to his attorney's withdrawal
shortly before trial, to have knowingly waived attending the trial
or presenting evidence, or to have knowingly permitted the trial to
proceed without him. Counsel at trial could have called Stinson as
a witness, perhaps to demonstrate his inability through his own
testimony to rebut the evidence against him. Given the credibility
issues at the heart of the Holders' claims against Stinson, such a
demonstration might have led the jury to view the Holders' evidence
more critically, and Stinson's position and his deposition
testimony more favorably. Counsel might also have bolstered the
mid-trial efforts of ReMax and the Eckerts to show that Stinson was
incapacitated when he was deposed. Counsel might have sought a
continuance to permit Stinson to attend the trial or to allow him
to be examined medically.
Second, counsel might have objected to the special
verdict form's failure to allow the jury to allocate fault to Randy
Smith. Smith, Stinson's co-real estate agent at ReMax, settled
with the Holders before trial. Under Alaska law in effect at the
time of the Holders' lawsuit, it would have been appropriate to
request an instruction requiring the jury to allocate fault among
all parties, including parties who had settled.17 The parties
attending the trial discussed including Smith on the verdict form
and the court agreed that Smith should be included. But ultimately
Smith's name did not appear on the verdict form. Neither ReMax nor
the Eckerts objected to this omission before the jury was
instructed or dismissed. The omission prevented allocating any
fault to Smith.
Stinson's liability for damages would have been reduced
if the jury had allocated fault to Smith. The omission was
therefore prejudicial. We must presume that if Stinson had not
permitted his attorney to withdraw, he would have objected to the
omission and avoided the resulting prejudice.
We conclude that if Stinson was incompetent at critical
stages of the litigation, it potentially caused him to suffer
prejudice that would justify setting aside the judgment against
him. It is consequently necessary to remand to determine his
mental state at relevant times, such as when he was deposed, when
he consented to his attorney's withdrawal, and when he decided not
to attend the trial. If the superior court finds that Stinson was
incompetent at any of these times, it must also determine whether
that incompetence prejudiced him, and if so, the relief needed to
remedy the prejudice. Depending on the nature of any prejudice,
Stinson may be entitled to a new trial to relitigate some or all of
the issues tried in June 1997.
2. The lawsuit against Borjesson
Because of the possibility the court on remand will not
find that Stinson was incompetent, we next consider Stinson's other
appellate arguments.
The engineer, Borjesson, was not a party at the time of
trial. Two months after the jury returned its verdict against
Stinson, the Holders filed a separate lawsuit against Borjesson for
professional negligence, negligent misrepresentation, negligent
infliction of emotional distress, and breach of contract. Stinson
claims that the Holders' complaint against Borjesson was newly
discovered evidence that required relief from the judgment under
Rule 60(b)(2).
We reject Stinson's argument. Rule 60(b)(2) permits
relief from judgment for "newly discovered evidence which by due
diligence could not have been discovered in time to move for a new
trial under Rule 59(b)."18 Although the Holders' complaint may have
been "newly discovered," it was not "evidence" of Borjesson's
liability and did not establish his fault. The evidence relevant
to Stinson's defense in the Holders' lawsuit was Borjesson's
potential fault -- not the fact of the Holders' lawsuit against
Borjesson. Evidence of Borjesson's fault, if any, was available
before the trial. Moreover, Stinson's counsel was on notice, long
before trial, of the possibility that Borjesson had contributed to
the loss. The Eckerts had filed a third-party complaint against
Borjesson in September 1995; it asserted that Borjesson was
negligent in fulfilling an alleged duty to the Holders. Stinson
became a party around the same time; he obtained counsel soon after
the Eckerts filed their third-party complaint. Stinson's counsel
therefore had many months before he withdrew in which to evaluate
Borjesson's potential responsibility for the Holders' damages.
The superior court did not abuse its discretion in
failing to grant relief to Stinson under Rule 60(b)(2).
2. Stinson's Claims of Trial and Post-judgment Error
We must also consider Stinson's non-Rule 60(b) arguments.
1. Failure to include Borjesson and Smith on the
verdict form
As a type of jury instruction, a special
verdict form is subject to the same standard
of review as other jury instructions. The
trial court's jury instructions generally
involve questions of law which are subject to
the independent judgment standard of review.
Errors in jury instructions will not be
grounds for reversal unless they caused
prejudice. We review de novo the question
whether there has been prejudicial error in
jury instructions. The decision whether to
include a particular instruction rests with
the discretion of the trial court.[19]
Stinson argues that the superior court erred in refusing
to allow the jury to apportion fault to Borjesson and Smith by
omitting their names from the special verdict form. He first
argues that he is entitled a credit reflecting Borjesson's share of
the fault.20 The Eckerts had proposed a verdict form apportioning
fault to Borjesson and the Holders objected to it. The court
rejected the Eckerts' request because Borjesson was not a party.
That ruling was not error. Borjesson was not a party at
the 1997 trial; under the law then in effect, a jury could not
allocate fault to a non-party.21 Stinson, while he was represented
by counsel, could have opposed Borjesson's summary judgment motion
or filed a cross-claim that would have kept Borjesson in the
lawsuit. And, as the Holders observe, Stinson might have had
tactical reasons for failing to oppose Borjesson's dismissal. It
is unimportant that Borjesson had previously been a party; because
the claims against him had been dismissed, he was not a party when
the case was tried. It would have been error to allow the jury to
apportion damages based on Borjesson's alleged fault.
Our discussion of Stinson's claim of incompetence in Part
III.A.1 makes it unnecessary to consider separately the omission of
Smith's name from the special verdict form. If Stinson was
competent to waive the assistance of counsel and to decide not to
attend the trial, it would be necessary to conclude that by failing
to object to the verdict form, he failed to preserve the issue of
Smith's omission from the verdict form for appellate review.22 If
Stinson was incompetent, he could not have knowingly waived
objection to Smith's omission from the verdict form, and Smith's
omission establishes the prejudice necessary for Rule 60(b) relief.
2. Excluding evidence of incompetence
Although Stinson did not attend the trial, ReMax and the
Eckerts proffered evidence at trial that Stinson had been
incompetent when his depositions were taken. The court rejected
the evidence.
The issue of Stinson's incompetence at the time of trial
makes it unnecessary for us to consider separately whether it was
an abuse of discretion to exclude evidence about his incompetence
when he was deposed.23 If Stinson was incompetent at the time of
trial, he will be entitled to relief from the judgment; if he was
competent, his failure to make an offer of proof at trial prevents
him from raising the issue on appeal.24
Stinson also argues that the superior court erred by
failing to assess his competence during the trial. Given his
absence at trial, Stinson argues that the court should have acted
sua sponte to discharge its duty to protect the interests of
incompetent persons incapable of protecting their own interests.
Because we remand for a determination of Stinson's competency to
dismiss his counsel and absent himself from the trial, we do not
need to determine whether the superior court should have inquired
into the issue at trial.
3. Denial of motions for new trial and judgment
notwithstanding the verdict
Stinson argues that it was error to deny his motions for
judgment notwithstanding the verdict and for a new trial. We
review the denial of a motion for a directed verdict "to determine
whether the evidence, when viewed in the light most favorable to
the non-moving party, is such that reasonable men could not differ
in their judgment."25 We review the denial of a motion for a new
trial for abuse of discretion.26
Stinson's failure to move for a directed verdict would
normally preclude him from arguing that it was error not to grant
his motion for judgment notwithstanding the verdict.27 And his
failure to file a timely motion for new trial would normally
prevent him from arguing on appeal that it was error to deny him a
new trial.28 If Stinson was competent at the time of trial, these
procedural deficiencies dispose of these claims of error. If he
was not competent, he will be entitled to relief under Rule 60(b)
for other reasons.29 We therefore need not reach the merits of
these arguments.
IV. CONCLUSION
We therefore REVERSE the denial of Stinson's Rule 60(b)
motion and REMAND for further proceedings.
Footnotes:
1 The Holders claimed that Stinson represented to them that
he was their agent. In fact, he was employed by ReMax, which
represented the sellers, and in a deposition Stinson denied that he
was the Holders' agent.
2 Among the original defendants, only Stinson is a party to
this appeal. Counsel for Stinson's conservator represents Stinson.
3 Appellant's excerpt of record fails to include the motion
for Rule 60(b) relief and the responsive court order. See Alaska
R. App. P. 210(c)(2).
4 See Alaska R. Civ. P. 60(b), providing in relevant part:
(b) Mistakes -- Inadvertence -- Excusable
Neglect -- Newly Discovered Evidence -- Fraud
-- Etc. On motion and upon such terms as are
just, the court may relieve a party or a
party's legal representative from a final
judgment, order, or proceeding for the
following reasons:
(1) mistake, inadvertence, surprise or
excusable neglect;
(2) newly discovered evidence which by
due diligence could not have been
discovered in time to move for a new
trial under Rule 59(b);
. . . .
(4) the judgment is void;
. . . .
(6) any other reason justifying
relief from the
operation of
the judgment.
5 O'Link v. O'Link, 632 P.2d 225, 230 (Alaska 1981).
6 See McCracken v. Davis, 560 P.2d 771, 776 (Alaska 1977).
7 See id. (citing Gravel v. Alaska Village, Inc., 423 P.2d
273, 277 (Alaska 1967)).
8 645 P.2d 151 (Alaska 1982).
9 Id. at 154 (citing O'Link, 632 P.2d at 229-30).
10 See id.
11 See id.
12 Id.
13 See id.
14 See Alaska R. Civ. P. 77(e)(4).
15 Cf. McCracken, 560 P.2d at 775 (concluding that party was
not prejudiced when court denied hearing on motion to set aside
judgment because court was "fully apprised of the issue before the
court and the appellant's position was fully and fairly presented
for the judge's consideration").
16 See Alaska R. Civ. P. 61 ("The court at every stage of
the proceeding must disregard any error or defect in the proceeding
which does not affect the substantial rights of the parties.");
Cleary Diving Serv. v. Thomas, Head & Greisen, 688 P.2d 940, 942
(Alaska 1984) ("A party on appeal who alleges that oral argument
was improperly denied must show both that the denial was in error
and that the error caused substantial prejudice.").
17 See former AS 09.17.080(a)(2) (1996); Benner v. Wichman,
874 P.2d 949, 958 (Alaska 1994).
18 Alaska R. Civ. P. 60(b)(2).
19 Coulson v. Marsh & McLennan, Inc., 973 P.2d 1142, 1150
n.21 (Alaska 1999) (citations omitted).
20 See former AS 09.17.080 (1996) (providing for
apportionment of damages amongst parties, including third-party
defendants and persons released under former AS 09.16.040).
21 See former AS 09.17.080 (1996); Benner, 874 P.2d at 957-
58.
22 See Alaska R. Civ. P. 51(a) (providing that no party may
assign as error failure to give instruction unless party objects).
23 We review challenges to a trial court's decision to
exclude evidence for abuse of discretion. Agostinho v. Fairbanks
Clinic Partnership, 821 P.2d 714, 721 n.2 (Alaska 1991).
24 See Alaska R. Evid. 103(a)(2) (providing that error may
not be predicated upon ruling which excludes evidence unless
substantial right of party is affected and offer of proof was
made). Here, even though ReMax and the Eckerts made an offer of
proof to admit evidence of Stinson's incompetence to impeach his
deposition testimony, Stinson made no such offer. In fact, Stinson
made clear to the court that he desired that his deposition
testimony be heard in his absence. If he was competent, his stated
wish to the court contradicts this asserted error.
25 Holiday Inns of Am., Inc. v. Peck, 520 P.2d 87, 92
(Alaska 1974).
26 See Buoy v. ERA Helicopters, Inc., 771 P.2d 439, 445
(Alaska 1989).
27 See Alaska R. Civ. P. 50(b); Metcalf v. Wilbur, Inc., 645
P.2d 163, 170 (Alaska 1982).
28 See Alaska R. Civ. P. 59(b) (providing that motion for
new trial shall be served not later than ten days after date shown
in clerk's certificate of distribution on judgment). Judgment was
first distributed on July 11, 1997. Final judgment was distributed
on September 2. Stinson did not join in ReMax's motion for a new
trial until September 24. The court denied the motion September
29. The judgment was corrected on October 22 but Stinson did not
refile his motion for a new trial within ten days of that date,
either.
29 See Lovell, 645 P.2d at 154 (stating basic justice
required that judgment be set aside and that party be given day in
court when party absent during proceedings and had known
psychological problems).
-15- 5252
