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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. John's Heating Service v. Lamb (02/24/2006) sp-5992
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,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| JOHNS HEATING SERVICE, | ) |
| ) Supreme Court No. S- 11228 | |
| Appellant, | ) |
| ) Superior Court No. 3KO-93-553 CI | |
| v. | ) |
| ) O P I N I O N | |
| MICHAEL A. LAMB and CYNTHIA | ) |
| E. JOHNSON-LAMB, | ) No. 5992 - February 24, 2006 |
| ) | |
| Appellees. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District, Kodiak,
John J. Reese, Judge.
Appearances: Michael D. Corey, Sandberg,
Wuestenfeld & Corey, Anchorage, for
Appellant. Sarah J. Tugman, Sarah J. Tugman,
Attorney at Law, Anchorage, for Appellees.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
The Lambs sued Johns Heating Service in December 1993,
alleging that it failed to repair their furnace during an October
1991 service call or warn them of the dangers it posed, causing
them to suffer carbon monoxide poisoning. A jury found for the
Lambs, but in Johns Heatings first appeal we remanded for
application of the discovery rule to determine whether the two-
year statute of limitations barred the Lambs claims.1 The
superior court concluded on remand that the lawsuit was timely.
Johns Heating appeals from that conclusion. We affirm.
Undisputed findings of fact on remand establish that before early
1993 the Lambs did not know and were not on notice that their
furnace might be a cause of their symptoms of impairment. Given
those findings, it cannot be said that the Lambs were on inquiry
notice before early 1993. Because they had at least two years
after early 1993 in which to file suit, their December 1993
complaint was timely.
II. FACTS AND PROCEEDINGS
This is the second time we have considered the
timeliness of the lawsuit brought by Michael Lamb and Cynthia
Johnson-Lamb against Johns Heating Service.2 Many of the
historical facts are set out in our first opinion and some were
presented to the superior court on remand.
The Lambs moved into a house in Kodiak in August 1991.3
On October 15 they called Johns Heating to inspect their furnace,
and on the same day Johns Heating sent Tim Galloway to
investigate the problem.4 The Lambs allegedly told Galloway that
the furnace was not functioning properly, that it seemed to be
circulating soot throughout the house, and that they were
concerned about the persistent smell of fuel in the house.5
Galloway leveled the fuel tank and relit the furnace, but did
nothing more.6 The Lambs began to suffer physical ailments from
what their complaint later alleged was carbon monoxide poisoning
caused by the furnace.7 The Lambs continued to live in the house
and use the furnace until January 31, 1993, when John Cloudy, a
furnace repairman for another service company, responded to
Cynthia Lambs call after the furnace started making a racket.
After inspecting the furnace, Cloudy told the Lambs that the
furnace was probably circulating carbon monoxide throughout the
house, and that the situation could be dangerous.8 He suggested
that their problems might be related to carbon monoxide and that
they should see a doctor.
The Lambs promptly replaced their furnace but continued
to suffer problems that they later attributed to chronic carbon
monoxide exposure.9 They hired a lawyer and in March an
investigator photographed the furnace for them; they shipped it
to an out-of-state expert. They were seen by a neurologist and a
neuropsychologist in Anchorage in March. The resulting reports
arguably found some mental impairment but were either
inconclusive about whether exposure to carbon monoxide was a
cause of any impairment, or expressed no firm conclusion on that
topic and suggested more testing.
In mid-November 1993 a Georgia neuropsychologist
recommended more tests because he thought the March examinations
strongly indicated carbon monoxide inhalation for both Lambs.
The Anchorage neuropsychologist performed more tests in late
November, including those the Georgia expert recommended. Upon
review of the new test results, the Georgia expert, by letter of
December 10, expressed his opinion that the test results show
clear and convincing signs of neurocognitive and neurobehavioral
impairment as a consequence of carbon monoxide exposure.
The Lambs filed suit against a number of defendants,
including Johns Heating, on December 23, 1993.10 They claimed
that Johns Heating negligently failed to repair their furnace or
warn them of its dangerous condition.11 Johns Heating raised a
statute of limitations defense, which the trial court rejected by
entering partial summary judgment for the Lambs and against Johns
Heating.12
Trial followed. The jury returned a verdict for the
Lambs. Johns Heating appealed, raising various issues, including
the statute of limitations issue.13 Because we concluded that
there was an unresolved, disputed issue of fact as to when the
statute of limitations began to run, we vacated the Lambs partial
summary judgment on the statute of limitations issue and remanded
for further proceedings.14 We stated that the earliest possible
inquiry notice date for accrual of the cause of action was
October 15, 1991 (when Galloway made his service call) and that
the latest possible actual notice date was January 31, 1993 (when
Cloudy told them the furnace was probably circulating carbon
monoxide).15
On remand, the superior court conducted an evidentiary
hearing and held that the suit was timely. Its order contained
these findings of fact:
The Lambs injuries were latent.
They evolved over a period of time, as is
characteristic of carbon monoxide (CO)
poisoning. At some point they were on
inquiry notice that there was a problem.
However, they were unsuccessful in
discovering the cause of their injury until
the spring of 1993.
They did not connect their symptoms and
the CO until Mr. Cloudy told them of CO risk
in January 1993, and their doctor, with that
new information, said CO could cause the
otherwise unexplained symptoms.
The Lambs were on inquiry notice about
soot problems from the furnace much earlier.
However, the key to this case is the brain
injury from CO exposure. That injury must be
connected to the furnace for the elements of
the tort to be reasonably known, and
therefore for the statute to run. This is not
a case about a dirty house; it is about brain
damage.
The Lambs diligently sought medical
advice about their developing symptoms. No
question has been raised in that regard. The
ultimate issue is whether it was reasonable
for them not to have connected their injury
to the furnace.
The superior court also found that:
It is not reasonable to expect the
Lambs, in the early 1990s, to make a causal
connection between the irritations of having
an old and sooty furnace, and the mysterious
symptoms that evolved over a lengthy period
of time. They consulted doctors, they had
the furnace checked, but there was no reason
to reasonably suspect they were connected.
The evidence is clear that CO poisoning in
homes was not a well-understood issue in the
early 1990s. Hindsight does not change this.
Having made these findings, the court then stated: The
Lambs were on inquiry notice more than two years before suit was
filed in December 1993. However, their inquiry was reasonable,
but unsuccessful until January of 1993. The statute began to run
at that time, and suit was filed well within the limitations
period. The superior court did not determine the precise date of
inquiry notice.
The superior court concluded that [t]he matter was
brought within the statute of limitations.
Johns Heating appeals.
III. DISCUSSION
A. Standard of Review
We review findings of fact under the clearly erroneous
standard.16 A finding is clearly erroneous if, after a review of
the entire record, we are left with a definite and firm
conviction that a mistake has been made.17 In reviewing factual
findings, we view the evidence in the light most favorable to the
prevailing party below.18
This court applies its independent judgment in
reviewing a lower courts application of law to undisputed facts.19
B. The Superior Court Did Not Err in Concluding that the
Lambs Complaint Was Timely.
1. Johns Heatings argument
Johns Heating contends that the superior court
committed legal error on remand and that its findings of fact
establish as a matter of law that the lawsuit is time-barred by
the applicable two-year statute of limitations, AS 09.10.070(a).20
Johns Heating does not challenge the superior courts fact
findings establishing that the Lambs did not know before January
1993 that the furnace might be responsible for their symptoms and
that their prior inquiry was reasonable. It instead advances a
more subtle and complex attack. Relying on the superior courts
statement that the Lambs were put on inquiry notice more than two
years before they filed suit,21 it reasons that our case law and
remand instructions obliged the superior court to determine
whether the interval between January 1993 and the second
anniversary of the inquiry notice date allowed a reasonable time
in which to file suit. It asserts that it is entitled to
judgment because the superior court could not have made the
findings that would have been necessary to render the Lambs
complaint timely. Thus, Johns Heating reasons that the court
would have been required to find that the Lambs had reasonable
time in which to sue between January 1993, when their inquiry
became successful, and the second anniversary of the inquiry
notice date. Although Johns Heating does not specify the date
when it thinks the Lambs were put on inquiry notice, it
necessarily assumes that it was more than two years before
December 23, 1993, when the Lambs filed suit.
Johns Heating derives its multi-part analysis from
Cameron v. State22 and Johns Heating Services v. Lamb.23
To support its contention that the Lambs exceeded the
reasonable time for filing suit, Johns Heating asserts that eight
and one-half months (the interval between the January 31, 1993
revelation and the second anniversary of Galloways October 15,
1991 service call) left the Lambs plenty of time in which to sue.
It refers us to a March 15, 1993 letter written by the Lambs
lawyer notifying a realty company that the Lambs intended to
bring claims for exposure to carbon monoxide in the house. From
this Johns Heating reasons both that the Lambs had the assistance
of counsel months before the complaint was filed and that their
lawyer understood the instrument of harm. It also asserts that
the Lambs bore the burden on the issue but failed to explain why
they did not file suit before December 23, 1993.
2. The discovery rule in Alaska
Resolution of Johns Heatings contentions requires us to
apply our iteration of the discovery rule. As we described that
rule in Cameron and Johns Heating I, if an element of a cause of
action is not immediately apparent, the discovery rule determines
when the statute of limitations begins to run. Our discovery
rule also potentially determines whether, and for how long, the
running of the statute may be tolled. It therefore may also
determine whether an action is timely even if suit was filed more
than two years after the cause of action accrued and the statute
began running. As we described it in Cameron, our discovery rule
provides that:
(1) a cause of action accrues when a person
discovers, or reasonably should have
discovered, the existence of all elements
essential to the cause of action;
(2) a person reasonably should know of his
cause of action when he has sufficient
information to prompt an inquiry into the
cause of action, if all of the essential
elements of the cause of action may
reasonably be discovered within the statutory
period at a point when a reasonable time
remains within which to file suit.[24]
Cameron also enunciated a third part to the discovery
rule.25 It
comes into play where a person makes a
reasonable inquiry which does not reveal the
elements of the cause of action within the
statutory period at a point where there
remains a reasonable time within which to
file suit. In those circumstances, the
limitations period is tolled until a
reasonable person discovers actual knowledge
of, or would again be prompted to inquire
into, the cause of action.[26]
Johns Heatings argument here hinges on the assumption
that, as a result of the superior courts apparent determination
that the Lambs were on inquiry notice before December 22, 1991,
the two-year statute of limitations had run before the Lambs
filed suit. It also hinges on the contention that the superior
court did not make the requisite findings for applying the third
part of the discovery rule, and could not have done so. Johns
Heating concludes that because the third part of the discovery
rule therefore did not apply, the two-year statutory limitations
period, having been triggered by inquiry notice before December
22, 1991, could not be extended to December 23, 1993.
Johns Heatings argument requires understanding of our
remand instructions in Johns Heating I after we held that it was
error to grant summary judgment to the Lambs on the statute of
limitations issue.27 We reasoned that Johns Heating had created a
genuine issue of material fact about whether the Lambs were on
inquiry notice before December 22, 1991.28 We therefore remanded
and instructed the superior court to first determine whether the
Lambs had sufficient information to alert a reasonable person to
begin an inquiry before December 22, 1991.29 If so, the court was
to determine whether the third part of the discovery rule
applies.30 If the superior court were to find on remand both that
the Lambs had been on inquiry notice before December 22, 1991 and
that the third part of the discovery rule did not apply to toll
the statute of limitations, the statute would bar their claims.31
But if the superior court were to find otherwise, the jury
verdict and award were to stand, subject to our other rulings
that are not at issue in the present appeal.32
3. The findings of fact on remand establish that the
Lambs were not on inquiry notice before early
1993; their December 1993 complaint was therefore
timely.
Johns Heatings appellate arguments presuppose that the
Lambs were on inquiry notice before December 22, 1991. Alaska
Statute 09.10.070(a) gave them two years in which to sue after
their cause of action accrued.33 An unqualified determination
that a plaintiff was on inquiry notice on a particular date would
normally mean that the applicable statute of limitations began
running on that date.34
The Lambs respond that they were not on inquiry notice
before December 22, 1991 and that Johns Heating is mistaken in
reading the superior courts ruling to have held that they had
inquiry notice sufficient to start the statute running before
December 22, 1991. They assert that [a] review of the trial
courts entire order and its reasoning, and the specific factual
findings, illustrates that while the Lambs knew at that point
that their furnace burned dirty, they did not have the kind of
information which is sufficient to alert a reasonable person to
begin an inquiry to protect his rights. 35 They contend that we
require, or should require, that the information needed for
inquiry notice is knowledge of some appreciable injury and at
least some idea of how it might have been caused.
Johns Heating argues in reply that the Lambs are really
attempting to challenge the superior courts factual finding on
remand that they were on inquiry notice more than two years
before they filed suit. It also asserts that they are bound by
that finding of fact because they have not cross-appealed,
because the finding is not clearly erroneous, and because in
Johns Heating I this court recognized that there was a genuine
issue of fact about whether the Lambs were on inquiry notice more
than two years before they sued.
The absence of a cross-appeal does not prevent
appellate consideration of the Lambs response. The Lambs raise a
valid issue about exactly what the superior court ruled. And
even if their appellate position required us to consider whether
the superior court clearly erred, they seek an affirmance of the
judgment; they can properly argue that the superior court reached
the right result for the wrong reason with respect to issues
litigated below.36
Nor did we say anything in Johns Heating I that
forecloses the Lambs response. We there discussed a genuine
issue of fact in context of the summary judgment originally
entered against Johns Heating on the statute of limitations
issue, and remanded so the superior court could conduct an
evidentiary hearing on the issue before deciding the timeliness
dispute.37 We did not prevent, or intend to prevent, any party
from contending in a subsequent appeal that the superior courts
remand findings on the issue were clearly erroneous.
We therefore turn to the superior courts comments
regarding the inquiry notice issue. The Lambs in essence contend
that the superior courts determination that they had been on
inquiry notice of soot problems was not a determination that they
had been on inquiry notice of a possible chronic carbon monoxide
exposure claim. That reading of the courts decision is
plausible. The court stated that [a]t some point they were on
inquiry notice that there was a problem. . . . The Lambs were on
inquiry notice about soot problems from the furnace much earlier.
(Emphasis added.) Because the Lambs moved into the house in
August 1991, and Tim Galloways visit was in October 1991, the
court appears to have been distinguishing between what it called
inquiry notice about soot problems and the sort of inquiry notice
that is legally significant. The court added that [t]his is not
a case about a dirty house; it is a case about brain damage. It
also described the Lambs diligence in inquiring, the
reasonableness of their inquiry, and their lack of success in
discovering a possible causal relationship before January 1993,
at the earliest. Thus, when the court stated that [t]he Lambs
were on inquiry notice more than two years before suit was filed
in December 1993, the court may have been referring to their
notice of cleanliness problems and their symptoms, not to notice
that caused the statute of limitations to begin running. This
reading is also consistent with the superior courts statement
that the two-year statute of limitations began to run in January
1993. Had the court truly meant to rule that inquiry notice
predated December 22, 1991, it would have been incorrect to have
concluded that the statute first began to run in January 1993.
Instead, as Johns Heating contends, it would have been necessary
to decide whether the Lambs filed suit within a reasonable amount
of time after they learned the elements of their claim (sometime
in 1993).38
But even if the superior courts inquiry notice comments
are read as Johns Heating reads them, they do not justify
reversal here. There is no reason to think that the superior
courts undisputed findings of fact, quoted above in Part II,
about what the Lambs did, the reasonableness of their inquiry,
and their lack of success until January 1993 at the earliest,
were clearly erroneous.39 Those findings of fact would not be
consistent with a legal conclusion that the Lambs were on inquiry
notice before December 22, 1991. Those facts establish that the
Lambs did not, before January 1993, have enough information to
alert them that they had a potential cause of action for their
symptoms. Hence, the Lambs were put on inquiry notice of their
cause of action no earlier than January 31, 1993. And, because
the two-year statute of limitations did not begin to run until
they were put on inquiry notice, their December 23, 1993
complaint was timely.
Because the Lambs filed their complaint within the two-
year period, there is no reason to consider Johns Heatings
argument that the Lambs did not sue within a reasonable time
after they discovered or should have discovered all the elements
of their cause of action.40
C. The Lambs Concededly Incorrect Attorneys Fees Awards
Require Correction.
The superior court awarded the Lambs the attorneys
fees proposed by the Lambs counsel: $50,969.13 to Michael and
$57,587.02 to Cynthia.
Although Johns Heating argues that any issue about the
Lambs attorneys fees should be moot because it is entitled to a
favorable judgment, it alternatively contends that correct
application of Alaska Civil Rule 82 yields attorneys fees of
$48,969.13 for Michael and $55,587.02 for Cynthia, rather than
the amounts the court awarded. The Lambs lawyer concedes that
she erroneously calculated the fees under Rule 82, and agrees
with the corrections proposed by Johns Heating.
We therefore remand for the corrections Johns Heating
proposes. Michael is entitled to an attorneys fees award of
$48,969.13 and Cynthia is entitled to an attorneys fees award of
$55,587.02.41
IV. CONCLUSION
For these reasons, we REMAND for correction of the
attorneys fees awards, but otherwise AFFIRM the judgment below.
_______________________________
1 Johns Heating Serv. v. Lamb, 46 P.3d 1024, 1033 (Alaska
2002) (Johns Heating I).
2 Id. In an earlier case, Brigdon v. Lamb, 929 P.2d 1274
(Alaska 1997), we considered the Lambs claims against the owners
of the house in which the Lambs lived.
3 Johns Heating I, 46 P.3d at 1028.
4 Id.
5 Id.
6 Id. at 1029.
7 Id.
8 Id.
9 Johns Heating I, 46 P.3d at 1029.
10 Id.
11 Id. at 1028.
12 Id. at 1029.
13 Id. at 1028.
14 Id. at 1033, 1044.
15 Johns Heating I, 46 P.3d at 1031 n.21. A person is on
inquiry notice when she has sufficient information to prompt an
inquiry into the cause of action, if all the elements of the
cause of action may reasonably be discovered within the statutory
period when a reasonable time remains within which to file suit.
Cameron v. State, 822 P.2d 1362, 1365 (Alaska 1991). A person on
inquiry notice is deemed to have notice of all facts which
reasonable inquiry would disclose. Id. (quoting Mine Safety
Appliances Co. v. Stiles, 756 P.2d 288, 292 (Alaska 1988)).
16 Peterson v. Ek, 93 P.3d 458, 463 (Alaska 2004).
17 Id. (quoting Demoski v. New, 737 P.2d 780, 784 (Alaska
1987)).
18 Rausch v. Devine, 80 P.3d 733, 737 (Alaska 2003).
19 Alaska Travel Specialists, Inc. v. First Natl Bank of
Anchorage, 919 P.2d 759, 762 (Alaska 1996); State, Dept of Corr.
v. Welch, 805 P.2d 979, 982 (Alaska 1991) (holding that if facts
are uncontroverted, the question whether a reasonable person was
on inquiry notice can be resolved as matter of law) (citing Mine
Safety Appliances, 756 P.2d at 292).
20 AS 09.10.070(a) states that [e]xcept as otherwise
provided by law, a person may not bring an action . . . for
personal injury or death . . . unless the action is commenced
within two years of the accrual of the cause of action.
21 The superior court stated: The Lambs were on inquiry
notice more than two years before suit was filed in December
1993.
22 Cameron v. State, 822 P.2d 1362 (Alaska 1992).
23 Johns Heating Serv. v. Lamb, 46 P.3d 1024 (Alaska 2002)
(Johns Heating I).
24 Cameron, 822 P.2d at 1366; see also Johns Heating I, 46
P.3d at 1031. We also explained the rule in Pedersen v. Zielski,
822 P.2d 903, 908 (Alaska 1991), a case in which the plaintiffs
inquiry was not successful until after the two-year statute of
limitations had run.
25 Cameron, 822 P.2d at 1367.
26 Johns Heating I, 46 P.3d at 1031-32 (emphasis added)
(quoting Cameron, 822 P.2d at 1367).
27 Id. at 1033. Summary judgment is not appropriate
unless the party is entitled to judgment as a matter of law and
unless there is no genuine issue of material fact. Palmer v.
Borg-Warner Corp., 818 P.2d 632, 634 (Alaska 1990).
28 Johns Heating I, 46 P.3d at 1033.
29 Id. If the Lambs were put on inquiry notice on or
after December 22, 1991, their December 23, 1993 personal injury
complaint unquestionably satisfied the applicable two-year
statute of limitations.
30 Johns Heating I, 46 P.3d at 1033.
31 Id.
32 Id.
33 See id. at 1031.
34 See Cameron, 822 P.2d at 1366.
35 Johns Heating I, 46 P.3d at 1031.
36 Dawson v. Temanson, 107 P.3d 892, 896 (Alaska 2005)
(holding that appellees can properly argue alternative bases for
trial court decision even if they did not cross-appeal).
37 Johns Heating I, 46 P.3d at 1033.
38 If a reasonable inquiry is unsuccessful in revealing
the elements at a point when there remains a reasonable time in
which to sue, the limitations period is tolled until a reasonable
person discovers actual knowledge of, or would again be prompted
to inquire into, the cause of action. Id. at 1031-32 (quoting
Cameron, 822 P.2d at 1367).
39 See Part II. The superior court found that the Lambs
made a reasonable inquiry that was not successful until January
1993. It also found that it was not reasonable to expect the
Lambs to discover the causal relationship between their old and
sooty furnace and their mysterious symptoms and that they were
unable to discover this relationship despite a reasonable
inquiry. The court also appears to have found that the Lambs did
not have actual knowledge earlier than the spring of 1993, that
they might have suffered brain damage or that there might be a
connection between their symptoms and exposure to carbon
monoxide. Johns Heating does not dispute these findings. Nor
does it contend that the Lambs inquiries before January 31, 1993
were unreasonable.
40 Johns Heating also asserts that the superior court
committed legal error in giving the Lambs two full years in which
to file suit after their inquiry became successful in January
1993. This claim of error presupposes that the Lambs were on
inquiry notice for more than two years before they filed suit.
Our holding that they were not makes it unnecessary to consider
this claim of error.
41 Johns Heating also argues that some documents contained
in the Lambs excerpts of record were not admitted into evidence
and that the Lambs did not appeal from their exclusion. We need
not reach this argument, because we have not relied on those
documents in resolving this appeal.
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