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Chilton-Wren v. Olds (5/5/00) sp-5268
Chilton-Wren v. Olds (5/5/00) sp-5268
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
JANICE CHILTON-WREN, )
) Supreme Court No. S-8476
Petitioner, )
) Superior Court No.
v. ) 1JU-96-523 CI
)
)
WALLACE R. OLDS, ) O P I N I O N
)
Respondent. ) [No. 5268 - May 5, 2000]
______________________________)
Petition for Review from the Superior Court of
the State of Alaska, First Judicial District, Juneau, Walter L.
Carpeneti, Judge.
Appearances: Robert K. Hickerson, James J.
Davis, Jr., Mark Regan, Alaska Legal Services Corporation, Juneau,
and Judith R.T. O'Kelley, Jones, Day, Reavis and Pogue, Atlanta,
Georgia, for Petitioner. Anthony M. Sholty, Faulkner Banfield,
Juneau, for Respondent.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, and Bryner, Justices. [Carpeneti,
Justice, not participating.]
MATTHEWS, Chief Justice.
I. INTRODUCTION
A landlord, Wallace Olds, brought a forcible entry and
detainer (FED) action against his tenant, Janice Chilton-Wren,
seeking eviction on the basis of non-payment of rent. Chilton-Wren
asserted several affirmative defenses and counterclaims. After
prevailing in the FED action, Chilton-Wren requested a jury trial
on the counterclaims. The district court granted summary judgment
to Olds, holding that Chilton-Wren had waived her right to a jury
trial and that she was collaterally estopped from pursuing the
claims because they had been decided in the FED action. The
superior court affirmed, and Chilton-Wren petitions for review to
this court.
Because the doctrine of collateral estoppel was
improperly applied in this case, and because FED actions should be
restricted to the issue of possession, we reverse and remand the
case for trial on Chilton-Wren's counterclaims.
II. FACTS AND PROCEEDINGS
A. Facts
In January 1996 Janice Chilton-Wren rented an apartment
in Juneau from Wallace Olds for a rental fee of $950 per month. On
the same day the parties signed the lease, the Tlingit and Haida
Central Council issued a check for $2,438.72 to Olds, with the
description "RENT JANICE CHILTON" and the notation
"1ST/LAST/DEPOSIT."
The landlord-tenant relationship between the parties had
a number of problems, and on March 1, 1996, Chilton-Wren informed
Olds in writing that she would be moving out of the apartment at
the end of the month. In this letter, Chilton-Wren requested that
"the monies given for 'last' months [sic] rent" be applied to the
March rent. Chilton-Wren was apparently referring to the check
written by the Tlingit and Haida Central Council. On March 4 Olds
served Chilton-Wren with a notice to quit for non-payment of rent.
In response to Chilton-Wren's request that the Tlingit and Haida
money be applied to the last month's rent, Olds characterized the
funds as a "security and damage deposit" which could not be
credited toward the owed rent. Chilton-Wren did not pay the amount
demanded, and on March 14 Olds filed a complaint in the district
court instituting an FED action against Chilton-Wren.
B. Proceedings
1. The FED hearing
A hearing was scheduled for March 19 in the FED action,
but was postponed until March 27. On March 25 Chilton-Wren filed
an answer listing five "Counterclaims and Affirmative Defenses"
based on Olds's alleged breach of the rental contract and the
Uniform Residential Landlord Tenant Act (URLTA). For each
counterclaim she requested the relief of damages and/or a rent
abatement. At the same time, she filed a jury demand, requesting
that all of her counterclaims be heard by a jury.
At the FED hearing on March 27, Olds asserted that
Chilton-Wren failed to pay the rent due for March and should
therefore be evicted. In response, Chilton-Wren argued her
affirmative defenses. First, she claimed that she had paid the
March rent, as the Tlingit and Haida payment to Olds had included
last month's rent. Alternatively, she claimed that no rent was due
for March because Olds had illegally entered her apartment on
several occasions in violation of AS 34.03.140. The statutory
penalty under AS 34.03.300(b) would therefore offset any rent
obligation. She further claimed that Olds had violated his
statutory obligations to provide heat and hot water and to maintain
safe and habitable premises and that these violations decreased the
rental value of the apartment by an amount greater than or equal to
her rental obligation. Finally, she claimed retaliatory eviction.
Chilton-Wren presented six witnesses in support of these defenses.
During the hearing, the district court twice raised the
question of whether Chilton-Wren's counterclaims should be
considered in the context of the FED hearing. The first time, the
court asked Olds's attorney whether it would be necessary to
address Chilton-Wren's counterclaims. Olds's attorney responded
that the claims should be addressed to the extent necessary to
resolve whether Chilton-Wren owed Olds rent for March. The second
time, the court asked Chilton-Wren's attorney whether he had waived
Chilton-Wren's jury demand on the counterclaims "for the purposes
of this proceeding on the FED matter." Chilton-Wren's attorney
responded that he did not waive a jury for the counterclaims and
that he was raising the counterclaims at the FED hearing solely for
the purpose of rent abatement.
The district court issued a memorandum decision and order
the day after the FED hearing. The court found that the Tlingit
and Haida check to Olds included the last month's rent. The court
also found that Olds had illegally entered Chilton-Wren's apartment
in violation of AS 34.03.140, and that Chilton-Wren was therefore
entitled to recover one month's rent in damages under AS
34.03.300(b). The court apparently used these two findings to
offset the March rent and preserve the deposit in full. The court
found that the proof was insufficient to support the affirmative
defense of retaliatory eviction. Finally, the court found that,
although Olds had violated AS 34.03.180 by failing to supply heat
and hot water and AS 34.03.100 by failing to maintain safe and
habitable premises, Chilton-Wren had presented insufficient
evidence to enable the court to determine the amount of damages.
In evaluating Chilton-Wren's damages claims, the court applied the
standard that the evidence must "afford a sufficient basis for the
trier of fact to calculate, with reasonable certainty, the amount
of loss caused by the opposing party's breach."
Having held that Chilton-Wren was entitled to an offset
in the amount of the March rent and to the refund of her deposit in
full, the court entered judgment "for the tenant in the action for
possession."
Olds's motion for reconsideration was denied.
2. Chilton-Wren's counterclaims
Two days after the FED hearing, Chilton-Wren filed an
"Answer, Amended Counterclaims, and Affirmative Defenses," in which
she added a claim for civil rights violations to the five
counterclaims she had alleged in the original answer. Olds filed
his answer to Chilton's counterclaims, and the court set the trial
date for November 4, 1996.
On June 25, 1996, Olds moved for summary judgment. The
district court granted the motion as to the original five
counterclaims, finding that Chilton-Wren had waived her right to a
jury trial by proceeding on her claims at the eviction hearing and
that she was collaterally estopped from asserting the former
counterclaims by the decision in the FED proceeding.
3. The superior court decision
Chilton-Wren appealed the summary judgment to the
superior court, which affirmed. The superior court expressed
concern that the case "present[ed] a difficult setting for the
application of the doctrine of collateral estoppel" because of the
tension between the purposes of FED proceedings and the URLTA, but
concluded that the alternative to collateral estoppel would be a
"procedural morass."
III. STANDARD OF REVIEW
The applicability of collateral estoppel to a particular
set of facts is a question of law. [Fn. 1] We review such
questions of law using our independent judgment. [Fn. 2] In
reviewing a grant of summary judgment, we will draw all reasonable
inferences of fact in favor of the party against whom judgment was
granted. [Fn. 3]
IV. DISCUSSION
A. Did Chilton-Wren Waive Her Right to a Jury Trial on Her
Counterclaims?
The Alaska Constitution provides the right to a jury
trial on claims exceeding $250. [Fn. 4] Chilton-Wren made a timely
jury demand, and Olds does not contest her right to have her claims
heard by a jury. Instead, he argues that she waived this right by
electing to try her claims at the FED hearing.
Alaska law is clear regarding the importance of the right
to a jury trial. Civil Rule 38(a) declares that "[t]he right of
trial by jury . . . shall be preserved to the parties inviolate."
This right will not be deemed waived (outside of the exceptions in
Rule 38(d)) unless the waiver is explicit, or illustrated by
actions "so inconsistent with [an] intent to enforce the right in
question" as to indicate that the right has been waived. [Fn. 5]
The proper inquiry is whether "the party's prior notice of the
consequences of his action . . . justifies the court in finding a
waiver." [Fn. 6]
Olds argues, and the district court found, that Chilton-
Wren waived her right to a jury trial by raising the counterclaims
in the FED proceeding -- a proceeding in which there is no jury.
[Fn. 7] A review of the proceedings, however, leaves no doubt that
Chilton-Wren was not on notice that raising the counterclaims would
waive her right to a jury trial.
All of the participants in the FED hearing appeared to
believe that Chilton-Wren could raise the claims both as defenses
at the FED hearing for possession and as subsequent counterclaims
for damages. The trial judge asked Olds's attorney whether the
counterclaims should be discussed at the FED hearing, and the
attorney replied that they should be discussed to the extent
necessary to determine whether rent was due. The trial judge later
had the following exchange with Chilton-Wren's attorney:
COURT: I'm assuming since we proceeded today
that notwithstanding the fact counsel asked for a jury demand on
counterclaims and claims, that that's been waived for purposes of
this proceeding on the FED matter.
COUNSEL: I'm not sure how the statute as to
rent abatement for counterclaims interact. We don't want to waive
a jury for counterclaims. Under the statute, it appears the court
looks at counterclaims and abates rent as the court decides. In so
far as we want to maintain jury for counterclaims but in support of
court looking at counterclaims for rent abatement, that's what I
meant to raise for purposes of the FED.
COURT: Okay, so we don't have a problem about
a jury trial on the issue of the FED proceeding and that's what
we're here for. (Emphasis added).
This exchange reveals that Chilton-Wren believed she had explicitly
reserved her right to a later jury trial on the counterclaims.
Indeed, the exchange indicates that the judge was merely asking
whether Chilton-Wren thought her jury demand applied to the FED
hearing. When she responded that she thought the court could look
at her counterclaims for the purpose of rent abatement (an
affirmative defense in an action for possession), the court was
satisfied.
Thus, Chilton-Wren did not receive adequate notice that
by raising affirmative defenses to the eviction action she would
waive a jury trial on the merits of her damages claims. She
therefore did not waive her constitutional right to a jury trial.
B. Is Chilton-Wren Barred by the Doctrine of Collateral
Estoppel from Asserting Her Counterclaims in a Proceeding
Subsequent to the Forcible Entry and Detainer Action?
Both the district court and the superior court held that
the judgment in the FED action collaterally estopped Chilton-Wren
from bringing her counterclaims to trial. Collateral estoppel, or
issue preclusion, applies if four conditions are met:
[T]he party against whom preclusion would work
must have been a party, or in privity with a party, to the first
action; the issue to be precluded from relitigation must be
identical to the issue decided in the first action; the first
action must have resolved the issue by final judgment on the
merits; and the determination of the issue must have been essential
to the final judgment.[ [Fn. 8]]
In addition to these four conditions, the issue to be collaterally
estopped must have been "actually and fully litigated in the first
action." [Fn. 9] In other words, the precluded party must have had
"a fair opportunity procedurally, substantively, and evidentially
to contest the issue." [Fn. 10]
Although Chilton-Wren was a party to the FED hearing
which was resolved by a final judgment in her favor, her asserted
claims for relief were not identical to the issues raised in the
FED hearing; nor were they essential to the final judgment. The
FED hearing dealt exclusively with the question of possession. [Fn.
11] Chilton-Wren's purpose in raising the counterclaims in the FED
hearing was to determine whether there was sufficient evidence to
show that her damages claims were at least as valuable as one
month's rent and that she was therefore entitled to retain
possession. The court was not required, therefore, to decide
whether Chilton-Wren's counterclaims might amount to damages in
excess of her one month's rent. This question was expressly
reserved for a jury trial at a later date.
In Vinson v. Hamilton, we held that a tenant has the
right to raise defenses under the URLTA in an FED hearing. [Fn. 12]
However, we held that the right to these defenses does not mean
that the tenant has the right to a jury trial in the FED action,
because "the central issue of the case is still possession, for
possession, not money damages, is what the landlord seeks, and a
tenant has the alternative of pursuing her counterclaims in a
separate judicial proceeding." [Fn. 13] This does not mean,
however, that a tenant necessarily waives her right to a jury trial
by including counterclaims in her defense to the FED action. A
tenant should not be forced to choose between being evicted from
her home but preserving her right to seek monetary damages or
retaining possession of her home but forfeiting recovery of her
damages claims.
FED hearings exist to protect a landlord's right to
possession and to prevent the use of self-help. They are designed
to be uniquely expedited processes that ensure a fair hearing on
the issue of possession. But they often lack many of the
procedural aspects, such as the right to a jury, discovery,
preparation time, and procedural continuances, that are needed for
a "full and fair" trial on issues other than possession. [Fn. 14]
The parties can choose to agree, with the court's approval, to
modify the expeditious and summary nature of the FED action in
order to fully and fairly litigate the tenant's counterclaims. If
they do so, the litigation will have collateral effect. However,
barring such a court-approved agreement, the proper approach is to
bifurcate the trials -- litigating the counterclaims in the FED
action only to the extent necessary to determine the question of
possession and preserving the damages issues for a later jury
trial. [Fn. 15]
Thus, regardless of the outcome of the FED action and the
determinations made by the FED judge, a tenant should have the
right to a full and fair litigation of his or her damages claims
before a jury. Absent an express waiver of the right to a jury
trial or a court-approved agreement between the parties to change
the streamlined nature of the FED action, collateral estoppel
should not apply to these types of counterclaims. The tenant
should therefore be free to litigate these claims anew in a
separate action before a jury.
V. CONCLUSION
The doctrine of collateral estoppel does not prevent
Chilton-Wren from litigating her claims for money damages because
the issues are neither identical to those in the FED action nor
necessary to the resolution of the FED action. In addition, the
summary process of an FED action does not afford a tenant a full
and fair opportunity to litigate damages claims. Because collateral
estoppel does not apply, and because Chilton-Wren did not waive her
right to a jury trial, we REVERSE and REMAND this case for trial on
the counterclaims.
FOOTNOTES
Footnote 1:
See Sopcak v. Northern Mountain Helicopter Servs., 924 P.2d
1006, 1008 (Alaska 1996) (citing State v. United Cook Inlet Drift
Ass'n, 895 P.2d 947, 950 (Alaska 1995)).
Footnote 2:
See id.
Footnote 3:
See Sea Lion Corp. v. Air Logistics of Alaska, Inc., 787 P.2d
109, 116 (Alaska 1990) (citing Zeman v. Lufthansa German Airlines,
699 P.2d 1274, 1281 (Alaska 1985)).
Footnote 4:
Alaska Const. art. I, sec. 16.
Footnote 5:
Frank v. Golden Valley Elec. Ass'n, 748 P.2d 752, 754-55
(Alaska 1988).
Footnote 6:
Id. at 755 (emphasis in original).
Footnote 7:
See Vinson v. Hamilton, 854 P.2d 733, 737 (Alaska 1993)
("[T]he parties in an FED hearing do not have a right to a jury
trial.").
Footnote 8:
Johnson v. Alaska State Dep't of Fish & Game, 836 P.2d 896,
906 (Alaska 1991) (citations omitted).
Footnote 9:
Murray v. Feight, 741 P.2d 1148, 1153 (Alaska 1987).
Footnote 10:
Id. at 1154 (internal quotations omitted).
Footnote 11:
See AS 34.03.190(a)(1).
Footnote 12:
854 P.2d 733, 736 (Alaska 1993).
Footnote 13:
Id. at 738 & n.11 ("Notably, AS 34.03.190(a) does not require
tenants to pursue counterclaims by way of an FED hearing."
(emphasis in original)).
Footnote 14:
Cf. Kopanuk v. AVCP Reg'l Hous. Auth., 902 P.2d 813, 816 n.1
(Alaska 1995) ("Although an FED action may result in equitable
relief, it is a swift and summary process. FED actions are
unsuited for resolution of more complex inquiries . . . .").
Footnote 15:
This is the approach adopted by the Hawaii Supreme Court in
Lum v. Sun, 769 P.2d 1091, 1097 (Haw. 1989) (interpreting a rule
identical to our Civil Rule 38(b) to mean that if a tenant asserts
counterclaims in an FED action, the court severs the counterclaims
for trial by jury and proceeds with summary process on the issue of
possession).
