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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. McLaughlin v. Lougee (06/09/2006) sp-6015
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
| PAMELA FRANCIS MCLAUGHLIN, | ) |
| LORIMAR LANCE MCLAUGHLIN, | ) Supreme Court No. S-11423 |
| and LARRY COMPTON, Trustee, | ) |
| ) | |
| Appellants, | ) |
| ) Superior Court No. | |
| v. | ) 3AN-03-11881 CI |
| ) | |
| KEN LOUGEE; HUGHES, THORSNESS, | ) O P I N I O N |
| GANTZ, POWELL & BRUNDIN; and | ) |
| its successor in interest, HUGHES, | ) |
| THORSNESS, POWELL, HUDDLESTON | ) |
| & BAUMAN, L.L.C., | ) |
| ) | |
| Appellees. | ) [No. 6015 - June 9, 2006] |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, Peter A. Michalski, Judge.
Appearances: Michael W. Flanigan, Chris
Bataille, Walther & Flanigan, Anchorage, for
Appellants. William M. Bankston, Chris D.
Gronning, Bankston, Gronning, OHara, Sedor,
Mills, Givens & Heaphey, P.C., Anchorage, for
Appellees.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
MATTHEWS, Justice.
The question in this case is whether a defendant
against whom a judgment in a tort case has been entered can later
file an action against a third person who was not a party to the
original action in order to require the third person to pay a
part of the judgment. The superior court held that such an
action may not be maintained because (1) under the law applicable
when the alleged tortious conduct occurred statutory contribution
had been eliminated and (2) a defendant seeking to allocate fault
to a third party can do so only in the original action. We
disagree because the applicable law did not preclude common law
contribution claims against defendants whose responsibility was
not considered in an original action, nor did it require that all
claims seeking to allocate fault be brought in a single action.
I. FACTS AND PROCEEDINGS
Appellants are Pamela and Lorimar McLaughlin, and Larry
Compton, the trustee in bankruptcy of the McLaughlins bankrupt
estate. They sued attorney Ken Lougee and his firm, Hughes,
Thorsness, Gantz, Powell & Brundin, and its successor firm, as
writ of execution assignees of claims belonging to their former
attorney Arthur Robson. In this opinion we collectively refer to
the appellants as the McLaughlins and the appellees as Hughes
Thorsness. The superior court stated the underlying facts of the
case as follows:1
Arthur Lyle Robson (Robson) represented
the McLaughlins between 1990 and 1995 in a
series of legal actions concerning a property
formerly owned by the McLaughlins. The
McLaughlins lost title to their property
through foreclosure due to malpractice on the
part of Robson. Robson however did not
disclose to the McLaughlins that they had
lost viable title. During the pendancy of
that litigation, Robson also represented the
McLaughlins in their negotiations with a
foreign investor, Okumura, who invested
monies based on Robsons misrepresentations as
to the legal status of the property. Robson
also represented the McLaughlins in a
subsequent lawsuit brought by Okumura against
the McLaughlins based on misrepresentations
made during the negotiations between the
parties. Although Robson knew he was
responsible for the liability of the
McLaughlins based on his misrepresentations,
Robson defended the McLaughlins without
bringing out his culpability for the
misrepresentations. As a result of Robsons
conduct, the McLaughlins were found liable to
Okumura in the amount of $1,008,536.05. The
McLaughlins then filed for bankruptcy on June
23, 1993, and Robson continued to represent
them.
After Okumura obtained a judgment
against the McLaughlins, Okumura then brought
a similar action against Robson alleging
misrepresentation, which the court in that
case found had occurred as a matter of law.
In this suit, defendant law firm Hughes
Thorsness represented Robson.
It is during the course of this
representation that the McLaughlins allege
Hughes Thorsness committed acts that
constituted an illegal co-conspiracy with
Robson to deprive the McLaughlins of their
legal rights. This claim is based at least
in part on the allegation that Hughes
Thorsness, as part of a scheme to defraud the
McLaughlins, prepared for Robsons signature
(and without the McLaughlins informed
consent) a pleading in the McLaughlins
bankruptcy withdrawing the McLaughlins motion
to clarify that they still owned legal
malpractice claims against Robson.
Plaintiffs allege that Hughes Thorsness was
aware that Robson could not ethically agree
on behalf of the McLaughlins to withdraw
their motion claiming that they still had
claims against Robson, yet Hughes Thorsness
prepared documents for Robsons signature to
do just that. Plaintiffs allege that the
purpose of Hughes Thorsnesss actions were to
further Robsons fraudulent scheme to avoid
personal liability for his actions. Although
the withdrawal of the motion was later
reversed and the Bankruptcy Court eventually
held that Robson could be sued by the
McLaughlins and the Bankruptcy Estate,
Robsons malpractice liability insurance had
been exhausted due to the settlement of
Okumuras claims against Robson as negotiated
by Hughes Thorsness. Plaintiffs claim that
as a proximate result of the combined conduct
of Robson and the defendants, Robsons
liability insurance, which should have been
used to obtain a joint release from Okumura
in favor of both Robson and McLaughlins or to
pay Okumuras claims down for the benefit of
both Robson and the McLaughlins, was spent
only obtaining a release of Robson from the
Okumura claims.
The McLaughlins subsequently filed an
action against Robson for malpractice and
fraud and obtained a judgment against Robson
in the amount of $3,571,429.33 on October 2,
2001, in case number 4FA-96-2602 Civil. To
collect on this judgment, the McLaughlins
executed on all claims that Robson had
against the current defendants, which claims
are alleged by the McLaughlins to have been
assigned to them by court order. Pursuant to
AS 09.17.080, plaintiffs allege that Robson
had claims for allocation that could have
been asserted against defendants following
the entry of judgment in 4FA-96-2602 Civil
and that defendants are liable for their
percentage of fault in causing the harm.
The McLaughlins sued in September of 2003, claiming
that Hughes Thorsness was liable to them as Robsons assignees for
some portion of their judgment against Robson in proportion to
Hughes Thorsnesss responsibility for Robsons conduct. Hughes
Thorsness promptly filed three separate motions to dismiss
claiming that (1) assignments of legal malpractice claims are not
permitted, (2) the applicable statute of limitations had expired,
and (3) a defendant such as Robson cannot seek to require others
to share fault and liability except in the initial action in
which he is sued. Ruling only on the last ground, the superior
court ordered the complaint dismissed.
The superior court reasoned that the McLaughlins case
is effectively one for contribution and because contribution
actions were repealed by the 1989 voter initiative establishing
proportionate fault, Alaska Rule of Civil Procedure 12(b)(6) bars
the instant action. The court determined that the relevant fault
allocation statute, AS 09.17.080 (1989), does not create a
separate cause of action in which a defendant can obtain an
affirmative recovery . . . . All that [AS 09.17.080 (1989)]
allows a defendant to do is join other persons who may be liable
to a claimant, and to have a factual determination made of the
percentages of fault for each responsible person. Consequently,
the court held that the McLaughlins as assignees of Robson could
not initiate a post-judgment action against Hughes Thorsness.
II. STANDARD OF REVIEW
Decisions granting motions to dismiss for failure to
state a claim upon which relief can be granted are reviewed de
novo and the allegations contained in the complaint are accepted
as true for purposes of review.2 Such decisions will be affirmed
only if it appears that the claimants can prove no set of facts
which would entitle them to relief.3
III. RELEVANT STATUTES
Because the alleged tortious conduct in this case
occurred between 1993 and 1995, the 1989 tort reform initiative
in effect from 1989 to 1997 governs this case.4 This initiative
enacted a comparative fault-several liability system and repealed
Alaskas version of the Uniform Contribution Among Joint
Tortfeasors Act (Uniform Contribution Act). As modified by the
1989 initiative, AS 09.17.080 provided:
(a) In all actions involving fault of
more than one party to the action, including
third-party defendants and persons who have
been released under AS 09.16.040, the court,
unless otherwise agreed by all parties, shall
instruct the jury to answer special
interrogatories or, if there is no jury,
shall make findings, indicating (1) the
amount of damages each claimant would be
entitled to recover if contributory fault is
disregarded; and (2) the percentage of the
total fault of all of the parties to each
claim that is allocated to each claimant,
defendant, third-party defendant, and person
who has been released from liability under AS
09.16.040.
(b) In determining the percentages of
fault, the trier of fact shall consider both
the nature of the conduct of each party at
fault, and the extent of the causal relation
between the conduct and the damages claimed.
The trier of fact may determine that two or
more persons are to be treated as a single
party if their conduct was a cause of the
damages claimed and the separate act or
omission of each person cannot be
distinguished.
(c) The court shall determine the award
of damages to each claimant in accordance
with the findings, subject to a reduction
under AS 09.16.040, and enter judgment
against each party liable. The court also
shall determine and state in the judgment
each partys equitable share of the obligation
to each claimant in accordance with the
respective percentages of fault.
(d) The court shall enter judgment
against each party liable on the basis of
several liability in accordance with that
partys percentage of fault.
Under the initiative, AS 09.17.900 defined fault as follows:
In this chapter fault includes acts or
omissions that are in any measure negligent
or reckless toward the person or property of
the actor or others, or that subject a person
to strict tort liability. The term also
includes breach of warranty, unreasonable
assumption of risk not constituting an
enforceable express consent, misuse of a
product for which the defendant otherwise
would be liable, and unreasonable failure to
avoid an injury or to mitigate damages.
Legal requirements of causal relation apply
both to fault as the basis for liability and
to contributory fault.[5]
Under Alaskas version of the Uniform Contribution Act,
repealed by the 1989 initiative, a tortfeasor that paid more than
its pro rata share of the common liability had a right of
contribution against other tortfeasors. Each tortfeasor was
liable for contribution pro rata, that is per capita. The act
provided that in determining a defendants share of damages
relative degrees of fault shall not be considered.6
IV. ARGUMENTS ON APPEAL
The McLaughlins argue that the precedents of this court
indicate that a defendant may bring suit against a third party to
allocate fault and liability after a judgment is entered against
it. They note that such a result was allowed in Borg-Warner
Corp. v. Avco Corp.,7 and argue that even though Borg-Warner was
decided under an earlier, and significantly different, version of
AS 09.17.080,8 essentially the same result was endorsed in
Universal Motors, Inc. v. Neary,9 a case arising under the 1989
initiative. They also contend that our decision in Alaska
General Alarm, Inc. v. Grinnell10 indicates that while a defendant
has the option of impleading third-party defendants in the
original action, a defendant is not required to do so and may
instead bring a separate action.11
Hughes Thorsnesss position is that Robson, as the
defendant in the McLaughlins case against him for malpractice and
fraud, had an obligation to file a third-party action in that
case against Hughes Thorsness or be barred from subsequently
suing Hughes Thorsness. Robsons decision not to bring Hughes
Thorsness into McLaughlins initial action for fault allocation
purposes, before final judgment, extinguishes any fault
allocation rights. Hughes Thorsness also argues that Borg-Warner
is inapplicable because the claim asserted by Borg-Warner was one
for contribution, as is the McLaughlins claim, and contribution
has been abolished. Hughes Thorsness distinguishes Neary,
arguing that while that case allowed a plaintiff to bring a
second action against defendants not named in the first action,
that does not mean a defendant can bring a separate, second
action . . . . Hughes Thorsness also argues that there are
reasons of judicial economy for requiring fault allocation to
take place in only one action.12
V. DISCUSSION
A. Summary
We conclude, for the reasons that follow, that the 1989
initiative does not bar a defendants post-judgment separate
action against a third party that seeks to allocate a share of
the defendants fault and liability to the third party. Our
decision in Neary permitting post-judgment separate actions by
plaintiffs largely governs this point. The Neary rationale
cannot fairly be limited to establishing a right that runs to
plaintiffs, but not defendants. We agree with Hughes Thorsnesss
argument that a separate action brought by a defendant against a
third party is, in essence, a claim for contribution. We do not
agree, however, that all contribution claims were prohibited by
the 1989 initiative. The initiative repealed Alaskas Uniform
Contribution Act. This was necessary because the Uniform
Contribution Acts system of per capita loss sharing among
defendants was inconsistent with the comparative fault-several
liability system established by the 1989 initiative. But the
repeal merely meant that Alaska no longer had a statutory
contribution system. It did not mean that common law
contribution that is consistent with comparative fault and
several liability would be unavailable. The need for a
contribution remedy has been greatly reduced by Civil Rule 14(c),
which allows defendants to bring third-party claims for equitable
apportionment in the original tort case. By using this procedure
a defendant can avoid liability for a disproportionate share of
the plaintiffs damages by ensuring that the relative fault of all
responsible actors is determined by the jury. But sometimes it
is not expedient or even possible to implead third-party
defendants. In such cases, an action for common law contribution
can serve to fairly apportion damages according to the relative
fault of all responsible persons and thus further the underlying
objective of a comparative fault-several liability system. We
conclude that common law contribution is an appropriate available
remedy that is consistent with the 1989 initiative. We remand
this case for further proceedings in order to determine whether a
common law contribution claim can be maintained under the facts
and circumstances of this case.
B. AS 09.17.080 Does Not Require That All Claims of Either
Plaintiffs or Defendants Be Litigated in a Single Case.
With the advent of comparative fault and several
liability some courts have held that all claims must be tried in
one action.13 But this court has declined to adopt this rule. In
Neary the appellant advocated the adoption of the so-called one-
action rule that was developed by the Supreme Court of Kansas and
had been adopted by some other jurisdictions. In Neary the
plaintiff was struck by a vehicle driven by a young motorist who
was both unlicensed and uninsured. The plaintiff sued the
motorists parents for negligent entrustment. This suit was
dismissed on summary judgment. Then the plaintiff filed a
separate suit against Universal Motors, claiming that Universal
had negligently sold the vehicle involved in the accident to the
unlicensed motorist. Universal moved to dismiss, claiming that
Alaska should adopt a one-action rule under which the fault of
all potentially responsible parties must be tried in a single
case.14
We held, in language that is broad enough to apply to
separate actions brought by defendants as well as plaintiffs,
that AS 09.17.080 does not mandate a single action for each
injury or accident.15 Our primary rationale was that the model
act on which AS 09.17.080 is based contemplated the possibility
of subsequent litigation against other potential tortfeasors.16
This rationale was also expressed in terms applicable to separate
actions brought either by plaintiffs or defendants:
Subsection (a) of the statute derives from
Section 2(a) of the Uniform Comparative Fault
Act of 1977. The comment pertaining to the
latter indicates that the drafters of the
Uniform Act contemplated the possibility of
subsequent suits against other potential
tortfeasors:
The limitation to parties
to the action means
ignoring other persons
who may have been at
fault with regard to the
particular injury but who
have not been joined as
parties. This is a
deliberate decision. It
cannot be told with
certainty whether that
person was actually at
fault or what amount of
fault should be
attributed to him, or
whether he will ever be
sued, or whether the
statute of limitations
will run on him, etc. An
attempt to settle these
matters in a suit to
which he is not a party
would not be binding on
him.
In construing statutes taken from model
acts we generally regard the commentary to
the model act as a reliable guide to the
statutes meaning. We so regard the
commentary quoted above and conclude that our
statute was not intended to preclude separate
actions against different tortfeasors.[17]
The leading case propounding the one-action rule is
Albertson v. Volkswagenwerk Aktiengesellschaft.18 The court
outlined the rule in terms highlighting one of its drawbacks:
Under the doctrine of comparative fault all parties to an
occurrence must have their fault determined in one action, even
though some parties cannot be formally joined or held legally
responsible. Those not joined as parties or for determination of
fault escape liability.19 Albertson involved a second action
brought by a plaintiff, but the one-action rule has also been
applied to separate actions brought by defendants.20
In Benner v. Wichman we held that fault should be
assessed in an action under AS 09.17.080 only against parties to
an action, including third-party defendants and settling parties
and not against other persons who might be responsible for the
accident.21 By contrast, in Kansas the fault of all potentially
responsible persons sometimes referred to in Kansas cases as
phantom parties is assessed.22 This feature is an important
reason for the one-action rule. By assessing the fault of absent
responsible persons as well as the parties to the action, the
jury has assessed all the fault of all the actors responsible for
the accident. The proportionate fault attributable to phantom
parties reduces the amount of damages attributable to the
defendants in an action, in a sense indemnifying those defendants
for the damages caused by the phantoms. The statute assures that
each defendant will bear only his proportionate share of the
loss.23 In Alaska there is no reduction attributable to the fault
of non-parties.24 In cases where non-parties may be at fault, it
cannot be said that each defendant will bear only his
proportionate share of the loss. Thus, this reason for applying
the one-action rule does not apply to Alaska.
An A.L.R. annotation has noted the importance of this
distinction.25 Referring to jurisdictions that attribute fault to
phantom parties the annotation states:
Courts that have expressed the view that
all fault is allocated in one action under
the doctrine of comparative negligence have
held that prior explicit or implicit
determinations of fault in comparative
negligence proceedings served to preclude
later actions arising from the same incidents
against defendants not named in the prior
proceedings . . . .[26]
By contrast, as to jurisdictions such as Alaska, the annotation
states:
In jurisdictions in which the one-action rule
has not been applied, some courts have held
that prior determinations of fault in
comparative negligence proceedings did not
serve to preclude later actions arising from
the same incidents against defendants not
named in the prior proceedings. . . . The
courts emphasized that the comparative fault
with respect to the nonnamed defendants had
never been determined in the prior
proceedings.[27]
Hughes Thorsnesss argument that reasons of judicial
economy should preclude defendants from bringing separate actions
is not substantially different from the argument that was made
and rejected in Neary. Nearys rationale concerning the judicial
economy argument also applies here:
From a judicial economy standpoint, it
is generally true that one trial is
preferable to multiple trials. But existing
parties already possess a strong incentive to
name all potential tortfeasors. As we
observed in Benner:
Both plaintiff and
defendants will have
significant incentive for
joining available
defendants who may be
liable. The more parties
joined whose fault
contributed to the
injury, the smaller the
percentage of fault
allocated to each of the
other parties, whether
plaintiff or defendant.
Further, one drawback of the one-action rule
is that it may result in the needless joinder
of parties whose fault is remote. Whether
the benefit from the additional incentive for
joining all potentially liable actors
supplied by the one-action rule is outweighed
by the detriment resulting from the
complications of multi-party litigation is a
policy question best left to the
legislature.[28]
Our observation in Neary that there are drawbacks to a
one-action rule bears further comment. Adding numerous parties
to a lawsuit obviously has a strong potential to delay litigation
and make it more expensive. Relatedly, the liability issues in
the case against an unjoined defendant may be completely
different from those in the original action. In addition, the
fault of a responsible entity may not be discovered, or
understood, in time to join it as a defendant, or a third-party
defendant, in the original action.29 Moreover, some third-party
claims are, practically speaking, inconsistent with a partys
position in the original action and may serve to undermine it.
Other third-party claims may needlessly and unfairly stress a
valuable relationship.30
Hughes Thorsness also argues that if defendants are
allowed to bring separate actions the third-party defendant would
be entitled to bring in all responsible parties, including the
original plaintiff, and that collateral estoppel would not
prevent the third-party defendant from relitigating any issue.
Hughes Thorsness is not correct that other defendants or the
plaintiff in the original action would need to become parties in
the second action.31 Prior judgments and settlements would not be
disturbed by the second action.32
But Hughes Thorsness is correct that third-party
defendants will not ordinarily be barred from relitigating prior
fault allocations or damages. While such relitigation will not
affect the finality of the prior judgment or settlements, it may
influence what the third-party defendant is required to pay. The
third-party defendants objective in relitigating fault would be
to show it was either not responsible at all or only responsible
for a relatively low percentage of the total fault that
contributed to the loss. A reassessment of the fault of the
other responsible parties is relevant to this determination. The
third-party defendant can also minimize its damages by attempting
to prove that the plaintiffs damages are lower than the amount
assessed in the first suit.
Hughes Thorsnesss observation that the third-party
defendant will be arguing against empty chairs in attempting to
minimize its responsibility by ascribing fault to absent prior
parties is also correct. But this is not a disadvantage to the
third-party defendant. Allocating fault to absent parties is an
easier task than allocating fault to parties who are present and
defending their conduct. The empty chair burden thus falls on
the defendant who initiates the separate action. This is not
generally unfair because this burden is the product of the
defendants choice not to join the third-party defendant in the
original action.
In sum, the 1989 initiative does not require that the
fault of all parties be tried in a single case. We so held in
Neary. The reasons supporting that conclusion legislative
intent, the complexity, expense, and delay of multi-party
litigation, and the fact that the second litigation will not
involuntarily involve others who have settled or whose claims or
defenses have been adjudicated apply to separate claims brought
by defendants as well as plaintiffs.
C. Common Law Contribution Is Available.
The superior court held that the McLaughlins action as
the assignees of claims held by Robson against Hughes Thorsness
was effectively one for contribution and because contribution
actions were repealed by the 1989 voter initiative establishing
proportionate fault . . . the action could not be maintained. We
agree that the action can fairly be described as seeking
contribution. Robsons assignees seek to allocate a share of
Robsons fault to Hughes Thorsness which is alleged to have acted
concurrently with Robson in causing harm to the McLaughlins. The
assignees claim that Robson has been held one hundred percent at
fault for their loss, whereas another tortfeasor, Hughes
Thorsness, was also responsible and should reimburse Robson.
Although this remedy could be given any number of names,33 it is
effectively contribution.
We do not agree, however, that the 1989 initiative was
intended to bar common law contribution. As already noted, the
initiative repealed Alaskas version of the Uniform Contribution
Act. This repeal was necessary because the act called for
contribution on a per capita rather than a fault-proportional
basis. The Uniform Contribution Act was therefore inconsistent
with the comparative fault-several liability system of the 1989
initiative.
The injustice of retaining the per capita contribution
system is readily illustrated by reference to the facts of Ehredt
v. DeHavilland Aircraft Co. of Canada, Ltd.34 In Ehredt the jury
found that the plaintiff was ten percent at fault, defendant
Ehredt fifteen percent at fault, and defendant DeHavilland
seventy-five percent at fault.35 DeHavilland paid the plaintiff
roughly $2 million for the release of the whole amount of the
defendants joint and several liability and then sought half of
that sum from Ehredt in a claim for contribution.36 We held,
based on the per capita measure mandated in the Uniform
Contribution Act, that DeHavilland was entitled to a full fifty
percent of the sum it paid even though Ehredt was only fifteen
percent responsible.37 Under a proportional fault contribution
system Ehredt would have been liable for only about $333,333 (the
product of 15/90 x 2,000,000) rather than the $1,000,000 it had
to pay using the Uniform Contribution Acts pro-rata measure.
This example, from a case that was decided not long before the
initiative was proposed, illustrates how the pro-rata measure of
contribution liability contained in the Uniform Contribution Act
would have undermined the comparative fault-several liability
system enacted by the 1989 initiative.
But the repeal of the Uniform Contribution Act meant
only that Alaskas pro-rata statutory contribution system was no
longer in effect. The repeal does not imply rejection of the
principle of contribution based on proportional fault. We
recognized this in Alaska General Alarm, Inc. v. Grinnell.38 We
held there that a tort defendants third-party claim for equitable
apportionment under Civil Rule 14(c), filed after the statute of
limitations governing the original action had expired, was not
time-barred.39 We recognized that such claims were similar to
contribution actions: At its root each claim is a mechanism for
spreading damage.40 To illustrate this similarity we observed
that the draft Restatement (Third) of Torts preserved
contribution as a remedy under systems like Alaskas in cases
where fewer than all those responsible had been joined:
Indeed, the draft Restatement (Third) of
Torts recognizes that even under apportioned
liability a defendant sued in an action in
which fewer than all the relevant persons
have been joined might be liable for more
than its percentage of fault and thus might
be entitled to contribution. See Proposed
Final Draft, Restatement (Third) of Torts 33
cmt. f (1999).[41]
We concluded that a defendants equitable apportionment
claim, like contribution, did not accrue when the underlying tort
was committed, but upon settlement or judgment concerning the
underlying claim.42 This was true even though the equitable
apportionment claim could be joined for litigation with the
underlying claim before it technically accrued.43 One
complication was that with the repeal of the Uniform Contribution
Act the separate contribution statute of limitations was also
repealed. But we held that this repeal did not imply a rejection
of third-party procedures well established in this state and the
common law.44 The scant legislative history demonstrates that the
initiatives supporters were concerned almost exclusively with
ensuring that defendants would be liable only for their share of
fault.45
Most other states have contribution systems. In many
states contribution is statutory. But in a substantial number of
states contribution has been developed as a matter of common law.46
One of the leading cases is American Motorcycle Assn v.
Superior Court of Los Angeles County.47 American Motorcycle was
decided three years after California by judicial decision
abolished the all-or-nothing rule of contributory negligence in
favor of a comparative negligence system.48 In American
Motorcycle the court adopted a rule of comparative contribution,
termed partial equitable indemnity, under which liability among
multiple tortfeasors may be apportioned on a comparative
negligence basis.49 This rule was found necessary in order to
further the objective of the newly adopted comparative negligence
system under which liability for damage will be borne by those
whose negligence caused it in direct proportion to their
respective fault.50 The court further observed that its holding
represented an evolutionary development of the common law
equitable indemnity doctrine that furthered an equitable
distribution of loss among multiple tortfeasors.51
American Motorcycle adopted a contribution remedy even
though California had an existing contribution statute. The
statute was applicable only to joint judgment debtors and, like
Alaskas repealed statute, called for contribution per capita
rather than proportional to fault.52 The American Motorcycle
court observed that the contribution statute merely represented
an effort to lessen the harshness of the early common law rule
that prohibited contribution.53 The statute was not intended to
preempt the field or to foreclose future judicial developments
which further the acts principal purpose of ameliorating the
harshness and inequity of the old no contribution rule.54
The courts of New York and Missouri have also adopted
common law contribution under similar circumstances as in
California, even though those states also had contribution
statutes which provided for a limited contribution remedy.55
Contribution in these states, as in most other states, may be
asserted in the original tort action or in a separate action.56
Common law contribution is also permitted by the
Restatement of Torts.57 The current Restatement makes it clear
that contribution has a viable role in several liability
jurisdictions where the contribution defendants responsibility
was not considered in the original action.58 Comment f to section
23 of the current Restatement59 states:
If a person is otherwise entitled to
recover contribution, contribution is limited
to the amount that person pays to the
plaintiff above that persons percentage of
responsibility. In a jurisdiction where a
defendant is only severally liable . . . , a
defendant normally would pay no more than its
own percentage share and would not be
entitled to contribution. Even in a
jurisdiction that does not use joint and
several liability, however, a severally
liable defendant might be sued with less than
all of the relevant persons and be liable for
more than its own percentages of
responsibility, and therefore be entitled to
contribution. See Comment c and Illustration
4.
Comment c states in part: Normally, liability for the same
indivisible injury will result from joint and several liability
. . . but a severally liable person might sometimes be liable for
the same indivisible injury caused by another severally liable
person. Such a person may be entitled to contribution.
Illustration 4 following this comment gives the following example
pertaining to contribution in a severally liable jurisdiction:
A is injured jointly by B, C, and D and
sues B and C. In a jurisdiction that has
rejected joint and several liability, B and C
are each held severally liable for As damages
without any consideration of Ds
responsibility. B and C have been held
liable for the same indivisible harm caused
by D and may be entitled to contribution from
D.
In our view contribution should be available as a
common law remedy because it furthers the goal of apportioning of
tort losses in accordance with each responsible persons
percentage of fault. Adopting this remedy for Alaska is a
logical concomitant of two aspects of our law. The first is the
holding of Benner v. Wichman.60 Since the fault of non-parties is
not assessed in the original trial, some defendants may be made
to bear more than what their share of fault would be if the
responsibility of all those at fault were considered. The second
is the rule of Universal Motors, Inc. v. Neary.61 Our rejection
of a one-action rule leaves little reason to insist that
defendants seeking to spread their damages must bring their
claims under Civil Rule 14(c) rather than independently.62
D. Issues on Remand
Although we have decided that common law contribution
is available in appropriate cases, it is not clear that this is a
case to which the remedy applies. The McLaughlins did not style
their complaint explicitly as stating a claim for contribution.
But they did allege that Robson had claims for allocation and
cited in their complaint as a part of this allegation Borg-Warner
v. Avco Corp.63 The claim in Borg-Warner was a contribution
claim. This allegation plus the citation of the case gave Hughes
Thorsness fair notice of the nature of their claim. Common law
contribution requires a discharge of the liability of the
contribution defendant and payment by the contribution plaintiff
in excess of the contribution plaintiffs comparative share of
responsibility.64 The complaint does not allege either discharge
or payment by Robson. But we must ask under the standard by
which motions to dismiss are reviewed whether the McLaughlins can
prove no set of facts which would entitle them to maintain a
contribution claim.65 On the record before us we cannot give an
affirmative answer to this question. It is conceivable that the
McLaughlins have successfully executed on Robsons personal
assets. Further, whether the discharge requirement may be met by
the running of a statute of limitations may be an open question.66
Hughes Thorsness also argues that contribution cannot
be available in this case because there can be no fault
allocation between intentional tortfeasors. Given that under the
initiative fault is defined in terms of negligent or reckless
conduct without mentioning intentionality, there may be merit to
this argument.67 On the other hand, we have indicated that an
expansive interpretation of intentional is inconsistent with the
comparative negligence principles contained in AS 09.17.080.68 In
Borg-Warner we stated that AS 09.17.900 clearly contemplates a
relative allocation of fault between all unintentional
tortfeasors, whether negligent, grossly negligent or willful and
wanton and excluded only tortfeasors who act with the specific
intent to cause the resultant harm.69 Reviewing the complaint in
light of the applicable standard of review for motions to
dismiss, we cannot say that the conduct complained of on the part
of Robson and Hughes Thorsness necessarily meets the narrow
standard of intentionality that goes beyond comparability under
AS 09.17.900.
The parties also seek rulings on the motions to dismiss
that the superior court did not decide relating to the
assignability of legal malpractice claims and the statute of
limitations. We decline the invitation to rule on these matters
and believe that both subjects would benefit from further
briefing and development in the superior court. The McLaughlins
have also challenged as excessive the award of fees and costs.
Our reversal of the grant of the motion to dismiss moots this
issue.
VI. CONCLUSION
For the above reasons, the judgment is REVERSED and
this case is REMANDED for further proceedings.
_______________________________
1 Elements of the current case are also discussed in
Compton v. Chatanika Gold Camp Props., 988 P.2d 598 (Alaska
1999).
2 Valdez Fisheries Dev. Assn, Inc. v. Alyeska Pipeline
Serv. Co., 45 P.3d 657, 664 (Alaska 2002).
3 Id.
4 We refer to the initiative as the 1989 initiative
because it became effective in 1989, although it was passed in
1988. Initiative 87TOR2, Relating to Civil Liability, was passed
on November 8, 1988. It remained in effect until 1997 when the
legislature substantially amended AS 09.17.080. Our holding in
this case is limited to cases controlled by the 1989 initiative;
we intimate no view as to its application to the post-1997
system.
5 This definition was amended in 1997, when the words or
intentional were inserted after reckless. Ch. 26, 15, SLA 1997.
6 Former AS 09.16.020(1). These features were codified
in Former AS 09.16.010(a) & (b) and Former AS 09.16.020(1).
Former AS 09.16.010(a) & (b) provided:
(a) Except as otherwise provided in this
chapter, where two or more persons become
jointly or severally liable in tort for the
same injury to person or property or for the
same wrongful death, there is a right of
contribution among them, even though judgment
has not been recovered against all or any of
them.
(b) The right of contribution exists
only in favor of a tortfeasor who has paid
more than that tortfeasors pro rata share of
the common liability, and the total recovery
of that tortfeasor is limited to the amount
paid in excess of the pro rata share. No
tortfeasor is compelled to make contribution
beyond the tortfeasors pro rata share of the
entire liability.
Former AS 09.16.020(1) provided: In determining pro-
rata shares of tortfeasors in the entire liability (1) their
relative degrees of fault shall not be considered[.]
7 850 P.2d 628 (Alaska 1993).
8 Before the 1989 initiative became effective, subsection
.080(d) provided for modified joint and several liability. A
party allocated less than fifty percent of the total fault was
liable for no more than twice the total fault allocated to that
party. The initiative changed subsection (d) by mandating
several liability according to a partys percentage of fault.
Subsections (a)-(c) of .080 were not changed, except for changes
in statutory citations necessitated by a recodification.
9 984 P.2d 515 (Alaska 1999).
10 1 P.3d 98 (Alaska 2000).
11 The McLaughlins also argue that this suit is not barred
by the statute of limitations or by a rule prohibiting the
assignability of legal malpractice claims. They also contend
that the award of fees and costs in this case were excessive. We
do not reach these claims for reasons explained below. See infra
page 30.
12 Hughes Thorsness also argues that the underlying torts
for which allocation is sought, fraud and conspiracy, are
intentional torts for which there can be no fault allocation. We
briefly address this claim below at page 29. Hughes Thorsness
additionally asserts that for policy reasons Robsons claim should
not be assignable. We do not reach this claim for reasons
asserted on page 30 infra.
13 See generally David Polin, Annotation, Comparative
Negligence: Judgment Allocating Fault in Action Against Less
Than all Potential Defendants as Precluding Subsequent Action
Against Parties not Sued in Original Action, 4 A.L.R. 5th 753
(1992).
14 Neary, 984 P.2d at 516.
15 Id.
16 Id. at 517.
17 Id. at 516-17 (citations omitted) (emphasis added).
18 634 P.2d 1127 (Kan. 1981).
19 Id. at 1132.
20 E.g., St. Francis Regl Med. Ctr., Inc. v. Critical
Care, Inc., 997 F. Supp. 1413 (D. Kan. 1997) (recognizing
applicability of Kansass one-action rule to settling defendants
attempt to sue third party to recoup settlement); Teepak, Inc. v.
Learned, 699 P.2d 35 (Kan. 1985) (when a defendant participates
in a settlement which operates as a full release of any and all
claims the plaintiff may have had, the defendant may not compel
successive tortfeasors against whom the plaintiff filed no claims
to contribute to the settlement); Travelers Ins. Cos. v. Jackson
Commcns Corp., 573 F. Supp. 1139 (D. Kan.1983) (applying Kansas
law to prevent defendant insurer that settled claim from seeking
indemnification from third party not sued by plaintiff); Ellis v.
Union Pac. R. R. Co., 643 P.2d 158 (Kan. 1982) (defendant in a
comparative negligence action cannot settle a claim on behalf of
a party and then seek contribution from that party in proportion
to the percentage of causal negligence attributable to that
party); Eurich v. Alkire, 579 P.2d 1207 (Kan. 1978) (defendant
who failed to make a claim against his co-defendant or against
plaintiff was thereafter barred from asserting claim against co-
defendant in subsequent action).
21 874 P.2d 949, 958 (Alaska 1994).
22 See, e.g., Baird v. Phillips Petroleum Co., 535 F.
Supp. 1371, 1378 (D. Kan. 1982); Brown v. Keill, 580 P.2d 867,
876 (Kan. 1978).
23 Travelers Ins., 573 F. Supp. at 1141.
24 Benner, 874 P.2d at 958.
25 Polin, supra note 13.
26 Id. at 759.
27 Id. at 760.
28 Neary, 984 P.2d at 517 (footnotes omitted).
29 A case demonstrating these drawbacks is discussed in
Olds v. Donnelly, 696 A.2d 633, 657-58 (N.J. 1997) (Stein, J.,
concurring) (discussing Rapuano v. Altongy, No. A-003854-95T2
(N.J. Sup. Ct. App. Div., April 18, 1997), cert. denied, 697 A.2d
549 (N.J. 1997)). The plaintiff in Rapuano was injured and
required surgery as a result of a motor vehicle collision. He
sued both drivers. Sixty days before the suit was settled he
received a report indicating that malpractice was committed in
the surgery. He brought a separate suit against the surgeon, but
this was dismissed based on New Jerseys version of the one-action
rule, called the entire controversy doctrine. Noting that
equitable consideration suggests that the sixty-day window
between receipt of the experts report and the settlement of the
automobile accident litigation is too short a time to justify the
extreme remedy of dismissal of the malpractice claim for failure
to join it in the original action and the entirely distinct
nature of the liability issues, the concurring justice cited this
case as one example in support of his conclusion that the
judicial adoption of the one-action rule had been a mistake.
30 The continuous representation rule applied to statutes
of limitations in some jurisdictions reflects the desirability of
deferring litigation against a potentially responsible party
where there is an ongoing relationship. See Wettanen v. Cowper,
749 P.2d 362, 365 & n.1 (Alaska 1988); Beesley v. Van Doren, 873
P.2d 1280, 1283 n.4 (Alaska 1994). The court in Olds v. Donnelly
decided that New Jerseys version of the one-action rule should
not be applied to lawyer malpractice cases. In reaching this
conclusion the court relied on some reasons that are unique to
the lawyer/client relationship, such as jeopardizing
lawyer/client confidences. But the court also relied on reasons
that are strategic and common to many ongoing relationships
between defendants and potential third-party defendants:
Because the first attorney is now a potential
witness, that attorneys own interests are no
longer aligned with those of the client.
Although we do not suggest that potentially
negligent attorneys would misrepresent facts,
an attorney charged with malpractice, like
any other litigant, would have an incentive
to testify guardedly when sued by a former
client. Thus, clients are put in the
untenable position of either pursuing a claim
against their attorney, whose negligence may
never result in an unfavorable outcome, or
forever foregoing a legal-malpractice action.
Clients who are satisfied with their
attorneys and want to maintain an otherwise
satisfactory relationship may for[e]go the
right to sue. That result does not provide
the fairness that the entire controversy
doctrine is designed to encourage.
696 A.2d at 642.
31 Hughes Thorsness appears to concede as much in a
footnote in its brief: Because the judgment between the original
plaintiff and defendant could not be altered by case two, it
would seem likely that plaintiff would not bother to contest case
two, leaving the original defendants to assert the plaintiffs
claim, and the new defendant to argue the empty chair.
32 See, e.g., Neary, 984 P.2d at 518 (inconsistent results
will not result from failure to adopt one-action rule); Durden v.
Hydro Flame Corp., 983 P.2d 943, 949 (Mont. 1999) (settlement by
tortfeasor precludes claims for contribution against it); see
also Restatement (Third) of Torts: Apportionment of Liab. 23(a)
(2000) (prior settlement by defendant a bar to liability for
contribution in subsequent action).
33 In California it is called partial indemnity. See
American Motorcycle Assn v. Superior Court, 578 P.2d 899 (Cal.
1978). As the Restatement notes, this is effectively a
contribution remedy. See Restatement (Third) of Torts:
Apportionment of Liab. 23, reporters note to cmt. (a) (2000).
See also 18 Am. Jur. 2d Contribution 2 (2004) (noting that
California uses the term comparative indemnity to refer to what
most jurisdictions call contribution). Wyoming refers to the
same remedy as comparative indemnity for equitable implied
indemnity actions. Schneider Natl, Inc. v. Holland Hitch Co.,
843 P.2d 561, 580 (Wyo. 1992).
34 705 P.2d 913, 917 (Alaska 1985).
35 Id. at 917 n.9.
36 Id. at 915.
37 Id. at 917.
38 1 P.3d 98 (Alaska 2000).
39 Id. at 101-02.
40 Id. at 105.
41 Id. at 105 n.40. Section 33 of the Proposed Final
Draft is now 23 of the Restatement.
42 Id. at 105.
43 Id.
44 Id.
45 Id. at 106. In Grinnell we also observed that it
appears that voters repealed these provisions [the Uniform
Contribution Act including the contribution statute of
limitations] as superfluous because a pure comparative fault
regime rendered it theoretically unnecessary for defendants to
seek post-judgment reimbursement, particularly given existing
civil rules that generally permit liberal joinder of parties.
Id. This observation did not take into account that the per
capita basis for contribution liability under the Uniform
Contribution Act was inconsistent with the comparative fault-
several liability system of the 1989 initiative. The observation
was dictum and does not appear to be supported by the initiative
history set out in Grinnell. In any case, the Grinnell court did
not conclude that the superfluous rationale meant that post-
judgment actions were barred. Rather, in contemplation of such
actions, the court stated that what statute of limitations would
apply to such actions remained an open question:
In the present case, Grinnell filed its
third-party complaint for apportionment of
damages prior to judgment. Because third-
party actions of this kind are traditionally
deemed to accrue upon judgment or settlement
our conclusion that Grinnells action is
distinct from McIntires underlying action in
tort makes it unnecessary to decide what
period of limitation might apply to an
apportionment action filed after judgment or
settlement.
Id. (emphasis added).
46 See Georges Radio, Inc. v. Capital Transit Co., 126
F.2d 219 (D.C. Cir.1942); American Motorcycle Assn v. Superior
Court of Los Angeles County, 578 P.2d 899 (Cal. 1978); Skinner v.
Reed-Prentice Div. Package Mach. Co., 374 N.E.2d 437 (Ill. 1977);
Best v. Yerkes, 77 N.W.2d 23 (Iowa 1956); Quatray v. Wicker, 151
So. 208 (La. 1933); Roberts v. American Chain & Cable Co., 259
A.2d 43 (Me. 1969); Underwriters at Lloyds v. Smith, 208 N.W. 13
(Minn. 1926); Safeway Stores, Inc. v. City of Raytown, 633 S.W.2d
727 (Mo. 1982); Royal Indemnity Co. v. Aetna Cas. & Sur. Co., 229
N.W.2d 183 (Neb. 1975); Dole v. Dow Chem. Co., 282 N.E.2d 288
(N.Y. 1972); Goldman v. Mitchell-Fletcher Co., 141 A. 231 (Pa.
1928); Davis v. Broad St. Garage, 232 S.W.2d 355 (Tenn. 1950);
Sitzes v. Anchor Motor Freight, Inc., 289 S.E.2d 679 (W.Va.
1982); Bielski v. Schulze, 114 N.W.2d 105 (Wis. 1962); Schneider
Natl, Inc. v. Holland Hitch Co., 843 P.2d 561 (Wyo. 1992).
Some of these decisions were later legislatively
codified. E.g., Illinois Joint Tortfeasor Contribution Act, 740
Ill. Comp. Stat. 100/0.01 to 100/5; Uniform Contribution Among
Tort-feasors Act, 42 Pa. Cons. Stat. 8321-8327; Uniform
Contribution Among Tort-feasors Act, Tenn. Code Ann. 29-11-101
to 29-11-106.
47 578 P.2d 899 (Cal. 1978).
48 Li v. Yellow Cab Co., 532 P.2d 1226 (Cal. 1975).
49 578 P.2d at 902.
50 Id. (quoting Li, 532 P.2d at 1232).
51 Id.
52 Id. at 913.
53 Id. at 908.
54 Id. at 914.
55 Safeway Stores, Inc. v. City of Raytown, 633 S.W.2d 727
(Mo. 1982); Dole, 282 N.E.2d at 288.
56 Gem Developers v. Hallcraft Homes of San Diego, Inc.,
261 Cal. Rptr. 626, 631 (Cal. App. 1989) (As part of the
comparative equitable indemnity doctrine, a defendant who is sued
has a right to bring in other tortfeasors who are allegedly
responsible for plaintiffs action through a cross-complaint or by
a separate complaint for equitable indemnification.); Safeway
Stores, 633 S.W.2d at 731-32 & n.6; Schneider, 843 P.2d at 579
(additional proceedings permitted).
57 See Restatement (Second) of Torts 886A (1977),
supplanted by Restatement (Third) of Torts: Apportionment of
Liab. 23 (2000).
58 Restatement (Third) of Torts: Apportionment of Liab.
23, comment f, c & illustration 4 (2000).
59 This is the comment referred to by this court in
Grinnell, 1 P.3d at 105 n.40, as part of what was then the
proposed final draft to the since-renumbered section 33.
60 See supra page 14. Benner held that fault should be
assessed only against parties (including third-party defendants
and settling parties), not other persons who might be
responsible. We also observed in Benner that the [1989]
initiative did away with one category of claims contribution.
874 P.2d at 956. This was a reference to the statutory per
capita contribution system that was repealed by the initiative,
not to common law contribution.
61 See supra pages 11-13, 15-17.
62 Under the federal rules on which our Civil Rules 14(a)
and (b) are based impleader is always permissive and not
compulsory. As Moore states: The impleader rule provides that a
defending party may implead, not that it shall or must and if a
defending party fails to use impleader . . . that defending party
remains free to sue the third-party separately to assert a right
of indemnity or contribution. 3 James Wm. Moore Et Al., Moores
Federal Practice 14.03[3] (3d ed. 1997) (emphasis in original).
Although Civil Rule 14(c) is unique to Alaska it is, by its
terms, permissive and it bears no indication that claims coming
within its purview, unlike other claims covered by Civil Rule 14,
are to be regarded as compulsory.
63 850 P.2d 628 (Alaska 1993).
64 See Restatement (Third) of Torts: Apportionment of
Liab. 23(a) and (b) (2000):
(a) When two or more persons are or may
be liable for the same harm and one of them
discharges the liability of another by
settlement or discharge of judgment, the
person discharging the liability is entitled
to recover contribution from the other,
unless the other previously had a valid
settlement and release from the plaintiff.
(b) A person entitled to recover
contribution may recover no more than the
amount paid to the plaintiff in excess of the
persons comparative share of responsibility.
65 Valdez Fisheries Dev. Assn, Inc. v. Alyeska Pipeline
Serv. Co., 45 P.3d 657, 664 (Alaska 2002).
66 See Criterion Ins. Co. v. Laitala, 658 P.2d 112, 118
(Alaska 1983) (Rabinowitz, J., concurring).
67 AS 09.17.900. In 1997 AS 09.17.900 was amended to
include intentional acts or omissions.
68 See Borg-Warner, 850 P.2d at 633-34.
69 Id. at 633.
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