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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Kenai Chrysler Center, Inc. v. Denison (09/21/2007) sp-6167
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
| KENAI CHRYSLER CENTER, INC., | ) |
| an Alaskan Corporation, | ) Supreme Court Nos. S-11688/S-11707 |
| DAIMLERCHRYSLER INSURANCE | ) |
| AGENCY, INC., a Michigan | ) Superior Court No. 3KN-02-953 CI |
| Corporation, | ) |
| ) | |
| Appellants/Cross-Appellees, | ) |
| ) | |
| v. | ) O P I N I O N |
| ) | |
| DOROTHY and MICHAEL | ) No. 6167 September 21, 2007 |
| DENISON, as guardians of | ) |
| DAVID DENISON, | ) |
| ) | |
| Appellees/Cross-Appellants. | ) |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District, Kenai,
Harold M. Brown, Judge.
Appearances: Dennis R. Acker, Anchorage, for
Appellants/Cross-Appellees. Thomas A. Dosik,
Disability Law Center of Alaska, Anchorage,
for Appellees/Cross-Appellants.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
BRYNER, Chief Justice.
MATTHEWS, Justice, dissenting in part.
I. INTRODUCTION
Kenai Chrysler Center, Inc., sold a car to David
Denison, not knowing that David was developmentally disabled and
subject to the legal guardianship of his parents. When the
Denisons tried to return the car and insisted that the contract
was void, Kenai Chrysler refused to take it back and demanded
restitution to rescind the contract. The Denisons sued Kenai
Chrysler1 and won an award of treble damages under Alaskas Unfair
Trade Practices Act. On appeal, Kenai Chrysler challenges the
jury verdict and various rulings made by the superior court. The
Denisons cross-appeal, challenging the superior courts award of
attorneys fees and its failure to impose sanctions against Kenai
Chrysler. We find no merit in the parties arguments and affirm
the superior courts judgment.
II. FACTS AND PROCEEDINGS
A. Facts
David Denison is a developmentally disabled young man
who has been under the legal guardianship of his parents since
1999, when he turned eighteen. In October 2002 David was living
in his own apartment, but his parents strictly controlled his
finances. They visited him at least once each week to make sure
he had a clean and safe place to live and was budgeting his food
money properly. They also visited him socially several times
every week. They spoke with David nearly every day.
The Denisons first learned that David wanted to buy a
car when David called his father, Michael, from Kenai Chrysler
and asked him to cosign for a used car; David did not tell his
father where he was when he called. Michael refused to cosign.
The next day, David again tried to purchase a car from Kenai
Chrysler. This time, he was trying to buy a new car, a Dodge
Neon, which he could finance without a cosigner. David called his
mother, Dorothy, to ask for money for a down payment. Dorothy
refused and told him not to buy a car. She assumed her word
would be final because she did not realize that David could
obtain any appreciable amount of money with his debit card.
David used his debit card and bought the Neon. Kenai
Chrysler charged $16,614 for the car and $945 for the dealerships
extended service plan. With additional charges, fees, and taxes,
the total price came to $17,802. Kenai Chrysler gave David
credit for trading in his 1994 Pontiac Grand Am, and applied a
$2,000 factory rebate to the down payment, which allowed David to
buy the new Neon with only $500 in cash. Kenai Chrysler financed
the remaining $12,851.77 at 11.99% APR for five years.
One or two days after David signed the contract,
Dorothy came to Kenai Chrysler with David and informed the
salesman who had sold David the car and a Kenai Chrysler manager
that David was under the legal guardianship of his parents and
had no legal authority to enter into a contract to buy the Neon.
Dorothy showed the manager Davids guardianship papers and asked
him to take back the car. The manager refused; according to
Dorothy, he told her that Kenai Chrysler would not take back the
car, and that the company sold cars to a lot of people who arent
very smart. Dorothy insisted that the contract was void, but the
Kenai Chrysler manager ignored her and handed the keys to David
over Dorothys objection. David drove off in the new car.
Dorothy contacted Duane Bannock, the general manager of Kenai
Chrysler, the next day; he told her that he had seen the
guardianship papers, but he still thought that the contract was
valid and that David was bound by it.
A couple of days after Kenai Chrysler gave David back
the keys, David damaged the Neon in a one-car accident. The
Denisons then managed to get the car away from David and return
it to Kenai Chrysler, but six days later, when David called Kenai
Chrysler to ask for his Pontiac back, someone at the dealership
told him that he could not have it but could pick up his new car
any time. David got a ride to Kenai Chrysler and picked up the
Neon. The next day the Denisons were able to convince David to
return the car to Kenai Chrysler yet again, and this time he left
the car there.
While they were trying to handle the immediate
challenge of returning the Neon to Kenai Chrysler and preventing
anyone there from giving it back to David, the Denisons also
sought legal advice about the validity of the contract. They
consulted the Alaska State Association for Guardianship and
Advocacy and the Disability Law Center; advocates at both offices
confirmed Dorothys belief that the contract was void. Michael
Denison also contacted the court-appointed investigator for
Davids guardianship case. The investigator contacted Kenai
Chryslers general manager, Bannock, and advised Bannock that the
guardianship did indeed make the contract legally void; Bannock
refused to listen to the advice. An advocate from the Disability
Law Center contacted Robert Favretto, the owner of Kenai
Chrysler, on the Denisons behalf. Favretto would not listen to
the advocates advice. Despite these contacts, Kenai Chrysler
sought no legal advice concerning the validity of the sales
contract until November 15, a full month after the sale.
During this time, Kenai Chrysler continued in its
active efforts to enforce the contract. The company promptly
assigned Davids loan to the General Motors Acceptance Corporation
(GMAC) but never informed GMAC of Davids incapacity. It also
demanded storage fees from David for keeping the Neon on its lot.
It sold Davids Pontiac trade-in on the same day the Denisons
brought the Neon back for the second time, even though the
Denisons were still contesting the sale.
GMAC eventually repossessed the Neon and sold it,
resulting in a deficiency on the loan. After the Denisons
attorney informed GMAC of Davids guardianship, GMAC agreed to
treat the loan as uncollectible. Kenai Chrysler paid GMAC the
deficiency without asking whether GMAC intended to collect the
loan.
B. Proceedings
On December 4, 2002, Kenai Chrysler petitioned in
probate court to modify Davids guardianship order so that it
would allow him to purchase the car. The company claimed to have
standing to file the probate petition as a person interested in
the wards welfare. The probate court denied the petition and
awarded the Denisons attorneys fees, expressly finding the
petition to be frivolous and without good cause.
The day after Kenai Chrysler filed its petition in
probate court, the Denisons sued the company, seeking a judgment
declaring that the sales contract was void because of the
guardianship. The Denisons also sought an injunction to prevent
Kenai Chrysler from enforcing the contract, monetary damages
under the Unfair Trade Practices Act (UTPA),2 and punitive
damages. Kenai Chrysler counterclaimed for restitution,
including reimbursement for paying the deficiency to GMAC.
The parties filed cross-motions for summary judgment on
Kenai Chryslers liability under the UTPA. The superior court
denied both motions, but noted that the Denisons appeared to be
entitled to summary judgment on their claim to declare the
contract void as a matter of law. The court also observed that,
even though Kenai Chrysler had cited the Restatement (Second) of
Contracts to support the validity of the contract, the company
had failed to address the section of the restatement dealing
directly with the capacity of persons under guardianship by
reason of an adjudication of mental illness or defect to incur
contractual duties.
The Denisons then moved for summary judgment on their
claim for declaratory relief. Kenai Chrysler requested a
continuance for discovery to determine whether the Denisons had
abandoned their guardianship. The company characterized this
issue as the key to proving that the Denisons owed restitution.
The superior court granted the continuance, but Kenai Chrysler
failed to seek any appropriate discovery on the issue. The
Denisons renewed their motion for summary judgment after the
close of discovery, and Kenai Chrysler did not oppose their
motion. The court granted the Denisons motion for summary
judgment and declared the sales contract void as a matter of law.
It also summarily granted judgment against Kenai Chrysler on its
affirmative defenses and counterclaims.
The Denisons case proceeded to trial before a jury on
the Denisons UTPA claim. During the trial, the Denisons sought
to refresh the memory of a Kenai Chrysler employee by referring
to a rental rate quote that Dorothy had obtained from the
company. The trial court allowed the Denisons to rely on the
quote for this purpose, even though Kenai Chrysler objected that
the quote had not been disclosed to it before trial.
The trial court also directed Kenai Chrysler general
manager Duane Bannock to rely on a prepared script in responding
to questions by Kenai Chrysler that asked Bannock to describe the
legal advice he had received concerning the Denisons claim.
At the conclusion of the trial, the jury returned a
verdict in the Denisons favor. The verdict awarded David $500
for loss of his down payment, $4,650 for the value of his Pontiac
trade-in, and $5,000 for the loss of use of his Pontiac after the
sale. Although the jury found that Kenai Chrysler had
demonstrated reckless indifference to Davids interests, the jury
foreman advised the court that the jury did not favor awarding
punitive damages. Upon learning of the foremans advice, the
Denisons indicated that they would waive their claim for punitive
damages. The superior court later awarded the Denisons treble
damages under the UTPA; the award totaled $30,450.
The Denisons also requested $63,280 in attorneys fees.
After subtracting fees incurred by the Denisons in the probate
matter, the superior court awarded them eighty percent of the
amount they requested. The court noted that while it did not
challenge the accounting or hourly rate, it [did] find that the
time spent in pursuit of the claim was more than should [have
been] reasonably charged to the Defendants under the
circumstances . . . . The court then entered final judgment
against Kenai Chrysler. In entering judgment, the court
neglected to rule on two motions the Denisons had previously
filed asking the court to impose sanctions against Kenai
Chrysler; the court had reserved ruling on the motions until the
conclusion of trial, but evidently forgot to address them before
entering judgment.
Kenai Chrysler appeals on various grounds. The
Denisons cross-appeal, contesting the award of attorneys fees and
the trial courts failure to sanction Kenai Chrysler.
III. KENAI CHRYSLERS APPEAL
A. The Superior Courts Summary Judgment Rulings
Kenai Chrysler first challenges the superior courts
summary judgment orders.3
1. Summary judgment for Denisons on claim for
declaratory relief
The Denisons moved for summary judgment on their claim
for a declaratory judgment that the contract between David and
Kenai Chrysler was void and not merely voidable; they filed their
initial motion before the close of discovery. Kenai Chrysler
argued in opposition that issues of fact existed as to whether
the Denisons neglected and abandoned their duties as guardians;
the company moved for a continuance under Alaska Civil Rule 56(f)
until discovery was complete. The court granted the continuance.
The Denisons renewed their motion for summary judgment after the
close of discovery and supported their renewed motion with an
affidavit of Dorothy Denison describing the duties the Denisons
performed as Davids guardians. Kenai Chrysler failed to oppose
the renewed motion and offered no evidence suggesting that the
guardianship had been abandoned. The superior court granted the
renewed motion for summary judgment, declaring the sales contract
void as a matter of law. On appeal, Kenai Chrysler contests the
order granting summary judgment.
As a preliminary matter, we note that Kenai Chrysler
abandoned this issue by failing to oppose the Denisons renewed
motion for summary judgment. Even if Kenai Chrysler had
preserved the issue, moreover, the companys position would be
unpersuasive. Kenai Chrysler points out that Alaska has not
expressly held that a valid guardianship order automatically
voids an attempt by the ward to create a binding contract. In
Kenai Chryslers view, the party contracting with the ward should
at least be entitled to restitution; and in any event, Kenai
Chrysler maintains, factual issues existed here as to the
validity of Davids guardianship.
These arguments lack merit. Under the Restatement
(Second) of Contracts, the existence of a valid legal
guardianship precludes the formation of a valid contract with the
guardianships ward.4 In keeping with the Restatements view, we
ruled in Pappert v. Sargent that a party who attempted to enter
into a contract with a ward would be entitled to restitution only
in the absence of actual or constructive knowledge of the wards
incompetence.5 Kenai Chrysler nevertheless cites Pappert as a
case supporting its position that a genuine issue of material
fact existed as to whether the dealership had notice of Davids
guardianship. But Kenai Chrysler misreads Pappert. The
incompetent party in Pappert was not under a legal guardianship,6
and the circumstances of the disputed transaction in that case
failed to create any reason to suspect incompetence.7 By
contrast, in the present case, David Denison was a ward under a
formal guardianship order that declared him incompetent to enter
into a contract. And under the Restatement (Second) of
Contracts, the guardianship order gave notice to the public of
Davids incapacity:
The guardianship proceedings are treated as
giving public notice of the wards incapacity
and establish his status with respect to
transactions during guardianship even though
the other party to a particular transaction
may have no knowledge or reason to know of
the guardianship: the guardian is not
required to give personal notice to all
persons who may deal with the ward.[8]
Since Kenai Chrysler had constructive notice of Davids
incapacity, it was not entitled to restitution under Pappert v.
Sargent.9
Kenai Chryslers position also ignores Alaskas
territorial case law. In The Emporium v. Boyle, the Alaska
territorial court followed opinions from several states
recognizing that an adjudication of insanity is notice to all the
world of the fact that from that time on neither the lunatic nor
his estate can be held upon any contract except those completed
before that time.10 Applying this principle, the court in The
Emporium held that a letter of credit authorizing another person
to purchase goods on account was automatically revoked when the
person who wrote the letter was declared incompetent.11 This
conclusion was justified, the court explained, because the world
was charged with notice of the adjudication.12
Based on these authorities, we conclude that the
superior court correctly interpreted and applied the law. We
also reject Kenai Chryslers suggestions that factual issues
concerning Davids state of mind at the time of the sale precluded
summary judgment on the Denisons claim for declaratory relief.
The Restatement makes it clear that a ward does not
regain the ability to enter into a contract merely by having a
lucid interval; instead, to establish restored ability to enter
into a contract, the evidence must show that the guardianship was
terminated or abandoned.13 Although Kenai Chrysler argues here
that evidence of the Denisons neglect might have supported a
finding of restored capacity, the Restatements standard requires
more than a showing of mere neglect. The Restatement refers to
the termination of a guardianship occurring by death or removal
of the guardian, or by lapse where the ward resumes full control
of his property without interference over a substantial period of
time.14
To support its claim that the Denisons abandoned David
as their ward, Kenai Chrysler alleges that the Denisons (1)
failed to produce evidence that they had filed a visitor report
as required by AS 13.26.118(a); (2) allowed David to use his own
bank account; (3) permitted David to work in a retail
establishment where he used a cash register; (4) failed to
prevent David from entering into the Dodge Neon transaction; (5)
failed to inform Kenai Chrysler promptly of the guardianships
existence; (6) failed to prevent David from driving the Neon; and
(7) failed to appoint a conservator for David when they
encountered trouble controlling his purchases. But these
circumstances fail to raise a genuine question of material fact
on the issue of abandonment.
The absence of a routine report hardly amounts to
abandonment. Nor can abandonment be shown by evidence suggesting
that the Denisons encouraged David to act independently. To the
contrary, the terms of Davids guardianship order instructed his
guardians to encourage David to be as independent as possible
while still protecting him. Allowing David a bank account and a
job falls squarely within the scope of these instructions by
encouraging Davids development.
Furthermore, the guardianship order did not oblige the
Denisons to watch Davids every movement in order to prevent him
from trying to enter into contracts. Instead, as we have already
observed, the guardianship order itself gave legal notice to all
potential contracting parties to avoid entering into a bargain
with David. Accordingly, neither the Denisons failure to prevent
the Kenai Chrysler contract nor their failure to give Kenai
Chrysler advance warnings could reasonably be construed to imply
abandonment of the guardianship.15
Finally, the Denisons supposed inability to control
Davids spending does not reasonably suggest an abandonment; the
uncontradicted evidence of their ongoing efforts to control
Davids finances shows just the opposite. The Denisons are Davids
guardians, not his guarantors.
In short, Kenai Chrysler failed to adduce any evidence
sufficient to raise a genuine issue of material fact precluding
the superior court from ruling as a matter of law that Davids
status as a ward rendered his contract with Kenai Chrysler void.
We thus affirm the superior courts summary judgment order
declaring the contract void as a matter of law.
2. Summary judgment for the Denisons on Kenai
Chryslers affirmative defenses
The superior court also granted the Denisons summary
judgment motion on all of Kenai Chryslers affirmative defenses.
Kenai Chrysler argues on appeal that summary judgment was
inappropriate, specifically contending that the trial court erred
in precluding the company from defending on the grounds that the
Denisons failed to mitigate their damages and neglected to join a
necessary party, GMAC.
a. Mitigation of damages
Kenai Chrysler argues that the superior court erred in
granting summary judgment to the Denisons on the issue of their
alleged failure to mitigate their damages. The Denisons
recognize that they had a duty to act on Davids behalf to
mitigate his damages, but argue that they did everything they
could to comply with that duty. The only money damages
ultimately implicated by Kenai Chryslers mitigation defense were
those resulting from the companys UTPA violations: specifically,
the jury awarded the Denisons damages for the $500 down payment
Kenai Chrysler refused to refund, the $5,000 in damages David
incurred by losing the use of his Pontiac, and the $4,650
representing his permanent loss of the car itself.
Under the undisputed facts, only one of these three
items of damages lost-use damages arguably fell within the
Denisons control. Kenai Chrysler had the sole power to mitigate
the $500 down payment it received from David. But the company
refused to unwind the contract and refund the cash. Similarly,
only Kenai Chrysler could have mitigated Davids damages for the
permanent loss of his Pontiac. But the company refused to give
the car back, and thus permanently deprived David of its fair
market value. The superior courts summary judgment order
properly barred Kenai Chrysler from raising a mitigation defense
as to these damages.
The courts order granting summary judgment becomes more
problematic as applied to the Denisons claim for damages
attributable to Davids loss of use of his car. Our case law does
not preclude lost-use damages in cases involving permanent
deprivation. In fact, we have specifically allowed an award of
loss of use damages even when property has been totally
destroyed.16 We have further held that a plaintiff who loses
property is not always made whole by being paid fair market value
at some later time; we have recognized that, as long as the delay
in finding a suitable replacement is reasonably necessary, the
plaintiff in such cases can be awarded damages exceeding the
propertys fair market value.17 We have also ruled that a
plaintiff who claims loss of use need not incur any actual costs
for temporary replacement; the claimant may instead rely on an
estimate of the cost for temporary replacement.18
On the other hand, as the superior courts instructions
recognized, our case law unquestionably precluded the Denisons
from claiming loss of use damages beyond the time reasonably
necessary to replace Davids Pontiac.19 Because the Denisons
needed to take reasonable steps to limit the duration of their
lost-use damages, the trial courts summary judgment order was
inappropriate to the extent that it purported to rule as a matter
of law that the Denisons had actually met their duty to mitigate,
thereby precluding Kenai Chrysler from maintaining that their
delay in replacing the Pontiac was unreasonable. Since the
reasonableness of the Denisons delay was disputable when the
superior court granted summary judgment, we agree with Kenai
Chrysler that its right to raise a mitigation defense on this
point could not be denied as a matter of law.
The appellate record nevertheless establishes that any
error in granting summary judgment against Kenai Chrysler on the
Denisons duty to mitigate their loss of use damages amounted at
most to harmless error. Specifically, the record establishes
that, despite the seeming breadth of its summary judgment order,
the superior court allowed Kenai Chrysler to contest the
reasonableness of the Denisons claim for loss of use damages and
to argue that they could have limited their losses through
reasonable action.
At trial, the Denisons specifically objected to
evidence presented by Kenai Chrysler that challenged the
reasonableness of their loss of use claim, insisting that this
evidence violated the trial courts order granting them summary
judgment on Kenai Chryslers affirmative defense of mitigation.
But the trial court overruled this objection, allowed Kenai
Chrysler to rely on the disputed evidence, and specifically ruled
that Kenai Chrysler could argue to the jury whether the lost-use
damages claimed by the Denisons were reasonable under the
circumstances. By submitting the issue of reasonableness to the
jury after allowing the parties to contest the point, the trial
court effectively avoided any prejudice stemming from the
overbreadth of its summary judgment order.
Although Kenai Chrysler relatedly contends that it was
prejudiced by the superior courts failure to give a proper
instruction on the Denisons duty to limit their lost-use damages,
the record belies this claim of error. At trial, Kenai Chrysler
objected to the Denisons proposed instruction on the issue of
loss of use of Davids Pontiac. The company proposed an
alternative instruction, asserting that the language of its
proposed version more closely approximated Alaskas pattern jury
instruction on lost-use damages.20 Kenai Chryslers proposed
instruction provided:
Plaintiffs also claim they have been damaged
by the loss of use of the 1994 Pontiac. If
you find that the defendant caused the loss
of the 1994 Pontiac, then the plaintiff is
entitled to be compensated for the fair value
of the use of the 1994 Pontiac for the time
period reasonably necessary to replace it.
The court ultimately instructed the jury on loss of use
of property as follows:
Plaintiffs also claim on behalf of David
Denison that he was damaged by the loss of
use of the 1994 Pontiac since the time it was
delivered to Kenai Chrysler. The plaintiffs
are entitled to be compensated for the fair
value of the use of the 1994 Pontiac for the
time period reasonably necessary to replace
it.
Kenai Chrysler now objects that the courts instruction
modified Alaskas pattern loss of use instruction. But the
company fails to explain exactly what change it objects to, why
the change amounted to legal error, and how any error caused
actual prejudice. Kenai Chryslers argument is also puzzling
because the companys own proposed instruction seems to stray
further from the pattern instruction than the instruction the
trial court actually gave.21 In light of Kenai Chryslers
conclusory briefing on this point, we conclude that it has failed
to adequately preserve the issue.22
Kenai Chrysler also complains that the trial court
erred in failing to give the jury a specific instruction on the
Denisons duty to mitigate their damages. But while the trial
court did not specifically instruct on the duty to mitigate as
such, its instruction on loss of use damages communicated the
substance of that requirement.
Alaskas Pattern Jury Instruction on mitigation speaks
in terms of avoidable consequences and uses the language of
reasonableness, informing the jury that a plaintiff may not
recover for a loss that could have been avoided with reasonable
efforts and that the jury may not require the defendant to pay
for any loss that the plaintiff could reasonably have avoided.23
In this case, as we have seen, the trial courts instruction on
loss of use damages specifically told the jury that the Denisons
were entitled to be compensated for the fair value of the use of
the 1994 Pontiac for the time reasonably necessary to replace it.
We see no practical distinction between this instruction and
Alaskas Pattern Instruction on the duty to mitigate, as it would
have applied to the Denisons loss of use claim.
Hence, to the extent that the trial courts error in
granting summary judgment against Kenai Chrysler caused the court
to omit a specific instruction on mitigation, we conclude that
this omission proved inconsequential. We therefore hold that the
trial courts order granting summary judgment against Kenai
Chrysler on its mitigation defense did not result in reversible
error.
b. Failure to join a necessary party
Kenai Chrysler claimed as an affirmative defense below
that the Denisons claims under the UTPA were barred because the
Denisons had failed to join GMAC as a necessary party under
Alaska Civil Rule 19(a).24 Kenai Chrysler reasoned that GMAC
needed to be named because no other party had legal authority to
rescind the sales contract once Kenai Chrysler assigned it to
GMAC. Kenai Chrysler now challenges the superior courts order
granting the Denisons summary judgment on this point, renewing
the claim it asserted below.
Because it is undisputed that Kenai Chrysler assigned
the Neons financing contract to GMAC shortly after David signed
it, the only controversy is whether the assignment to GMAC
precluded the Denisons from obtaining complete relief from Kenai
Chrysler without naming GMAC.25 As the superior court correctly
recognized in addressing this point, there was no valid contract
for Kenai Chrysler to assign to GMAC. GMAC therefore played no
necessary role in the Denisons action. Their claims under the
UTPA concerned Kenai Chryslers treatment of David Denison and his
guardians, not whether the Denisons were entitled to rescind a
contract that had never been validly formed. The superior court
properly granted summary judgment on this point.
B. The Superior Courts Refusal To Compel Discovery
Kenai Chrysler moved under Civil Rule 37(a)(2) to
compel proper and sufficient responses to a list of discovery
requests. The Denisons opposed that motion on the ground that
Kenai Chrysler had not made a good faith attempt to meet and
confer with them, as required under Civil Rule 37(a)(2)(B); they
alternatively contended that Kenai Chrysler was not entitled to
the information it sought. Kenai Chrysler challenges the
superior courts denial of its motion to compel these responses.26
Although the superior court did not specify its reasons
for denying Kenai Chryslers motion to compel discovery, it was
well within the courts discretion to deny the motion based on
Kenai Chryslers failure to meet and confer. Civil Rule
37(a)(2)(B) requires a party moving to compel discovery to
certify that it has in good faith conferred or attempted to
confer with the person or party failing to make the discovery in
an effort to secure the information or material without court
action.27 When the Denisons initially refused to comply with Kenai
Chryslers discovery requests, the company sent the Denisons a
letter demanding that they comply or face a motion to compel.
The letter itemized the discovery requests at issue but failed to
respond to the Denisons objections of overbreadth and irrelevance
except in a cursory fashion. The letter also nominally claimed
to be an attempt to confer, but it included no offer to actually
meet with the Denisons or to engage in a dialogue in any medium.28
In moving to compel discovery from the Denisons, Kenai
Chryslers counsel certified that Kenai Chryslers letter to the
Denisons met Rule 37(a)(2)(B)s requirement of an offer to meet
and confer. But given these circumstances, the superior court
could reasonably have found that Kenai Chrysler made no genuine
attempt to resolve the disputed discovery issues before turning
to the court with its motion to compel. Because the superior
court properly could have denied Kenai Chryslers motion on this
basis, we find no abuse of discretion.
C. The Superior Courts Evidentiary Rulings
Kenai Chrysler challenges two evidentiary rulings made
by the superior court during trial.
1. Refreshing the memory of Kenai Chryslers general
manager
The Denisons called Justin Goodman as a witness at
trial. Goodman was the general manager of Kenai Chrysler and
frequently gave rate quotes for car rentals. The Denisons
counsel asked Goodman whether he remembered providing a rate
quote to Dorothy Denison for a rental car. Goodman replied that
he did not. The Denisons counsel then showed Goodman two
documents a fax cover sheet addressed to Dorothy Denison and a
price quote signed by Goodman estimating the rental rate for a
compact car. The day before, the superior court had refused to
admit the same rental quote into evidence after Kenai Chryslers
counsel objected that the Denisons had not disclosed the document
in advance of trial. Kenai Chrysler objected when the Denisons
sought to use the rate quote to refresh Goodmans recollection,
relying on the courts earlier order excluding it from evidence.
In response to the renewed objection, the trial court ruled that
the Denisons would not be barred from using it to refresh
Goodmans recollection.
Kenai Chrysler now argues that the trial court erred in
allowing the documents use to refresh recollection, contending
that the company suffered unfair surprise because the Denisons
failed to produce the rate quote before trial.
Alaska Rule of Evidence 612(a) governs this issue,
stating [a]ny writing or object may be used by a witness to
refresh the memory of the witness while testifying.29 Under this
rule, a document need not be admissible to be used to refresh a
witnesss memory.30 Instead, if the party using the document does
not wish to admit it, Rule 612(a) simply allows any party seeking
to impeach the witness whose memory is refreshed the right to
inspect the writing . . . , to cross-examine the witness thereon,
and to introduce those portions which relate to the testimony of
the witness.31 By expressly granting the right to immediate
inspection, the rule implicitly recognizes the absence of a
pretrial duty of disclosure.
Under the rule, then, Kenai Chrysler had the
opportunity to inspect the rate quote and to use it as a basis
for impeaching Goodman during cross-examination. But the rule
gave it no right of earlier disclosure. Kenai Chrysler cites no
other authority requiring early disclosure for this limited use.
Nor does it specify how the rate quotes use to refresh memory
caused any actual prejudice. Moreover, we note that Kenai
Chrysler was given a copy of the rate quote the day before the
Denisons used it to refresh Goodmans recollection. Under these
circumstances, the superior court did not abuse its discretion in
allowing the Denisons to use the rate quote for this purpose.
2. Requiring Kenai Chryslers witness to answer
questions by reading written answers prepared by
the trial court
During Kenai Chryslers direct examination of Kenai
Chryslers former general manager, Duane Bannock, Kenai Chryslers
trial counsel asked Bannock whether he had sought advice from an
attorney about David Denisons situation and, if so, what advice
he had received. The Denisons objected; in response, Kenai
Chryslers counsel insisted that Bannocks testimony on this point
was necessary to show that the dealerships actions merely
reflected its good faith efforts to follow the legal advice of
its counsel. Kenai Chryslers trial counsel assured the court
that were not arguing about the rule of law . . . . Were not
trying to state a legal conclusion here . . . . Were trying to
get to Duane Bannocks state of mind and the position of Kenai
Chrysler during that time period, and whether or not they were
acting fairly or whether or not they had a reasonable basis for
their actions.
After consulting with counsel for both sides and with
the witness, the trial court prepared two questions and responses
that it believed sufficient to allow Bannock to make Kenai
Chryslers desired point without dwelling on legal details that
might lead the jury to view the legal advice as a correct and
authoritative statement of applicable law. The court ruled that
questions and answers along the lines it proposed would be
admissible.
After the jury returned to the courtroom and Bannocks
direct examination resumed, Bannock began to stray beyond the
scope of the responses the court had ruled admissible. When the
Denisons objected, the court instructed Bannock to read from the
paper if he was unable to confine his answers to conform to the
courts written responses. The court then informed the jury that
the court had drafted the responses for Bannocks use and that
jurors should therefore not hold it against Bannock or question
his credibility if his answers did not appear to be spontaneous.
On appeal, Kenai Chrysler challenges the superior
courts decision to require Bannock to read from answers prepared
by the court. But Kenai Chrysler has failed to preserve this
point for appeal. Specifically, Kenai Chrysler never objected to
the trial courts rulings and made no offer of proof as to the
details excluded from Bannocks proposed testimony.32
Under Alaska Rule of Evidence 103(a)(2), a party may
not claim error in a ruling that excludes evidence unless the
substance of the evidence was made known to the court by offer or
was apparent from the context.33 These requirements have not been
met here, since Kenai Chrysler made no formal offer to establish
a record of the evidence it sought to include, and since the
context provided by the current record fails to make clear what
testimony the trial court excluded.
As it stands, the appellate record provides no basis
for meaningful appellate review of Kenai Chryslers claim of
prejudicial error. Accordingly, Kenai Chryslers failure to raise
the issue below, coupled with its failure to provide an adequate
offer of proof, precludes it from challenging the superior courts
ruling for the first time on appeal.34
We find no sign of plain error here.35 The questions
and responses directed by the trial court appear to have captured
the main point that Kenai Chryslers trial counsel believed to be
crucial namely, that Kenai Chryslers conduct comported with
advice received from its lawyer. Furthermore, Bannocks testimony
addressing this point was marginally relevant, at most, because
the advice Bannock described was received a month after the
disputed sale well after Kenai Chrysler had taken numerous steps
committing the dealership to its position that the contract was
valid and would be enforced. We thus see no basis for
overturning the superior courts rulings concerning Bannocks
testimony.
D. Unfair Trade Practices Act Claim
Kenai Chrysler next argues that the evidence failed to
support the jurys finding of liability under the UTPA and that
the companys conduct did not violate the UTPA as a matter of law.36
In arguing this point, Kenai Chrysler insists that a
merchants attempt to enforce what it sees as a valid contract
cannot, as a matter of law, amount to an unfair trade practice
under the UTPA. Kenai Chrysler appears to contend that the
evidence here showed nothing more.37
The Denisons sued under two sections of the UTPA: AS
45.50.471(a) and AS 45.50.471(b)(14). Subsection .471(a) is the
UTPAs catchall provision; it states that [u]nfair methods of
competition and unfair or deceptive acts or practices in the
conduct of trade or commerce are declared to be unlawful.
Subsection .471(b)(14) further provides that: [t]he terms unfair
methods of competition and unfair or deceptive acts or practices
include, but are not limited to, the following acts: . . .
representing that an agreement confers or involves rights,
remedies or obligations which it does not confer or involve, or
which are prohibited by law.
As a general matter, a prima facie case of unfair or
deceptive acts or practices under the UTPA requires proof of two
elements: (1) that the defendant is engaged in trade or commerce;
and (2) that in the conduct of trade or commerce, an unfair act
or practice has occurred.38 We have previously ruled that [a]n
act or practice is deceptive or unfair it if has the capacity or
tendency to deceive.39 The plaintiff need not prove that the
defendant intended to deceive; it is enough to show that the acts
and practices were capable of being interpreted in a misleading
way.40 Hence, an act or practice can be unfair without being
deceptive.41
A variety of factors can be considered in determining
the existence of an unfair practice, including
(1) whether the practice, without necessarily
having been previously considered unlawful,
offends public policy as it has been
established by statutes, the common law, or
otherwise whether, in other words, it is
within at least the penumbra of some common-
law, statutory, or other established concept
of unfairness; (2) whether it is immoral,
unethical, oppressive, or unscrupulous; (3)
whether it causes substantial injury to
consumers (or competitors or other
businessmen).[42]
The trial court in this case instructed the jury on these
provisions.
Kenai Chrysler correctly asserts that these provisions
require proof of something more than the mere assertion of a good
faith but mistaken belief that a contract was valid.43 Yet courts
have broadly interpreted similar provisions to prohibit merchants
from going beyond mere assertion of mistaken beliefs by engaging
in conduct that is deceptive, unethical, or unfair.44 The Fourth
Circuit Court of Appeals, for example, described an unfair trade
practice as an inequitable assertion of power or position, ruling
that [a]lthough it may be rare that the exercise of a contractual
right will meet this stringent standard, it is possible for such
an exercise, when it involves egregious and aggravating conduct,
to constitute an unfair . . . trade practice under North
Carolinas UTPA.45
Likewise, Georgia has recognized that a seller can
commit an unfair trade practice by failing to investigate the
validity of the sellers title after learning of a potential
problem with it; applying this principle, the Georgia Court of
Appeals held that, under the circumstances before it, the sellers
inaction amounted to an unfair practice because it reflected a
blatant disregard of the rights of innocent purchasers.46
Many other jurisdictions define unfair or deceptive
acts or practices to extend beyond conduct specifically
prohibited by statute or common law;47 instead of looking for
expressly prohibited conduct, these cases focus on the unfairness
of the disputed practice under the specific circumstances
presented.48
Applying the flexible, case-specific approach used in
these cases, we think that reasonable jurors could fairly find
that Kenai Chryslers conduct went far beyond a simple assertion
of the companys good faith belief that the sale contract was
valid.
The jury heard substantial evidence tending to show
that Kenai Chrysler waited a full month after actually learning
of Davids disability before it first consulted its lawyer about
the guardianships effect on the disputed contract. In the
interim, and every step of the way, Kenai Chrysler actively
fought to defeat the Denisons efforts to rescind the sale. The
company charged ahead with selling Davids trade-in and finalizing
the DMV paperwork for the sale. Its employees repeatedly ignored
the express requests of Davids legal guardians by returning the
keys directly to David; they also advised David that the car was
his, despite their knowledge that the state had declared him
developmentally disabled and had appointed his parents as legal
guardians. Later, after it knew of the guardianship, Kenai
Chrysler sent a letter to David himself demanding that he remove
the Neon from its lot or incur storage charges. And even though
GMAC agreed to treat the unpaid balance of Davids loan as
uncollectible, Kenai Chrysler after paying the balance to GMAC
nonetheless counterclaimed against the Denisons for the amount it
had paid.
In our view, a jury considering the totality of these
circumstances in the light most favorable to the Denisons could
reasonably have found that Kenai Chryslers attempts to enforce
the sales contract blatantly disregarded the Denisons rights and
amounted to unethical conduct.49 We thus conclude that the
evidence as a whole was sufficient to support the Denisons claims
under the UTPA.
E. Jurys Award
Kenai Chrysler challenges the jurys assessment of
damages for the value of Davids 1994 Pontiac and for his lost use
of the car.
1. Value of Davids Pontiac
The jury awarded the Denisons $4,650 in damages for
Davids permanent loss of his Pontiac. David had purchased the
Pontiac from another car dealership in Kenai for $5,500, a few
months before he traded it in at Kenai Chrysler. Evidence of the
price charged by the local dealership a few months before Kenai
Chrysler took Davids car provided the jury a sufficient basis for
determining the value of the Pontiac when he traded it in for the
Neon. David still owed about $850 for the car. It appears that
the jury subtracted this amount from Davids original purchase
price and awarded him the balance. Although Kenai Chrysler had
valued Davids trade-in at only $1,300, the jury was not obliged
to rely on this price, since it reflected the cars wholesale
value. Kenai Chryslers own manager acknowledged that the
Pontiacs retail value would be between $4,000 and $5,000. The
dealership offered no estimate of the cost required to restore
the Pontiac to retail condition. Given this evidence, the record
supports the jurys award for the car.
2. Loss of use of Davids Pontiac
The jury awarded David an additional $5,000 for loss of
use of his car. As we have previously mentioned, the superior
court instructed the jury that it could award David the fair
value of the use of the 1994 Pontiac for the time period
reasonably necessary to replace it. The court also instructed
the jury that [t]he value of the use of the 1994 Pontiac is to be
measured by the cost of obtaining a substitute for it during the
period of loss of use. At the time of trial, David had not yet
replaced the Pontiac; the Denisons claimed that their delay in
replacing the car was reasonably necessary because David was
unable to afford a replacement.
When the jury returned its verdict awarding loss of use
damages, about twenty months had elapsed since the date of the
sale. Spread over the twenty months, the $5,000 award amounts to
$250 per month for Davids loss of use of the Pontiac.
Justin Goodman, the general manager of Kenai Chrysler
and former manager of its rental fleet, testified that he had
seen rental rates as low as $499 per month in the Kenai area. He
also recalled that on at least one occasion he had quoted a price
of $1,200 per month for a new compact car. He further testified,
however, that if the Denisons had asked, he could have allowed
David to use a car free of charge.
Kenai Chrysler contends that this evidence fails to
support the award for loss of use damages. In Ben Lomond, Inc.
v. Campbell, we held that testimony concerning the reasonable
rental value for a diesel generator was sufficient to support a
jury award for loss of use of a comparable generator.50 Here, if
the jury found the Denisons twenty-month delay to be reasonably
necessary and disbelieved Goodmans after-the-fact contention that
a free car would have been available, Goodmans testimony
concerning rental value provided a substantial basis to support
the jurys award: the award, amounting to $250 per month for
twenty months, would fall well below the lowest rental value
mentioned by Goodman $499 per month. And it would nearly have
matched Goodmans low range estimate if the jury found that the
Denisons should reasonably have replaced the Pontiac within ten
months after the sale.51
Kenai Chrysler also argues that the jurys award for
loss of use damages was excessive because it was disproportionate
to the value of Davids Pontiac. To be sure, even if supported by
solid evidence of monthly rental value, an award for loss of use
over an extended period of time could at some point become
excessive especially if the award was combined, as it was here,
with an additional award for permanent loss of the propertys
value. But in Ben Lomond, Inc. v. Campbell, we emphasized that
[t]he question of whether damages are inadequate, or excessive,
is in the first instance committed to the discretion of the trial
judge.52 In light of the trial courts broad discretion over the
issue, we recognized in Ben Lomond that a trial courts award for
lost-use damages could be overturned as excessive only in the
most exceptional circumstances to prevent any miscarriage of
justice.53 Relying on this standard, we specifically declined to
hold that a loss of use award should be limited to the value of
the property,54 noting that we had explicitly rejected this
position on prior occasions.55
Our decision in Ben Lomond nevertheless recognized that
a rule of proportionality applies to such cases.56 Ben Lomond
involved a dispute over a diesel generator; the claimant,
Campbell, asserted the right to take possession of the generator
from the defendants.57 The jury valued the generator at $8,000
and awarded it to Campbell.58 In addition, the jury awarded
Campbell $13,000 in damages for loss of use of the generator over
a period of approximately ten months.59 It based the award on
testimony estimating the reasonable monthly rental value for a
comparable generator.60
In considering whether the award for loss of use was excessive,
we acknowledged that the rule of proportionality would preclude a
loss of use award that was all out of proportion to the fair
market value of the item itself.61 We then compared the
generators $8,000 value to the loss of use damages totaling
$13,000 and declined to find that this imbalance warranted a
finding of excessiveness: The $13,000 loss of use award is not so
much higher than an acceptable estimate of the generators value
as to violate the rule of proportionality . . . .62
Our proportionality analysis in Ben Lomond dictates the
same conclusion here. The jurys $5,000 award for loss of use
damages only slightly exceeds the Pontiacs fair market value and
is certainly not so high as to be all out of proportion to the
fair market value of the Pontiac.63 Because Kenai Chrysler offers
no meaningful basis for distinguishing this case from Ben Lomond,
we conclude that the jurys award for loss of use damages was not
excessive. In reaching this conclusion, we emphasize that Kenai
Chrysler did not contend below and has not argued on appeal that
a twenty-month period of lost use is per se unreasonable and that
the trial court should have imposed a shorter maximum time limit
for loss of use damages as a matter of law. We note that case
law in other jurisdictions arguably supports a rule that would
establish definite time limits for loss of use damages, at least
in cases where the lost use does not result from intentional
conduct.64 Although a time-cap on loss of use damages might have
much to recommend it under certain circumstances, given Kenai
Chryslers failure to raise the point before the superior court or
argue it on appeal, we decline to consider adopting such a
measure here.
F. The Jury Instructions
In addition to the jury instruction issues that we have
already discussed above in connection with Kenai Chryslers
arguments concerning the summary judgment order on its defense of
mitigation of damages, Kenai Chrysler raises challenges to the
superior courts instructions on the issues of punitive damages
and conversion.
1. Punitive damages
The superior court instructed the jury on punitive
damages. Kenai Chrysler asserts that the facts of the case did
not warrant the instruction. But any error in giving this
instruction became harmless when the Denisons expressly waived
their punitive damages claim after being informed that the jury
seemed disinterested in awarding punitive damages. Kenai
Chrysler advances no reason to conclude that the punitive damages
instruction affected any of the remaining issues decided by the
jury. Accordingly, the Denisons withdrawal of their punitive
damages claim makes it unnecessary to determine whether an
instruction on the claim was warranted.
2. Conversion instruction
Kenai Chrysler further asserts that the trial court
erred by instructing the jury on conversion. But Kenai Chrysler
fails to provide any citation to the record to support this
assertion. Our own review of the record indicates that the
superior court did not instruct the jury on conversion. We thus
reject Kenai Chryslers claim of error as inadequately briefed and
baseless.
G. Treble Damages
Kenai Chrysler argues that the superior court erred in
awarding the Denisons treble damages under the UTPA, asserting
that they waived their right to treble damages by withdrawing
their claim for punitive damages.65 Kenai Chrysler reasons that
treble damages under the UTPA are a form of punitive damages and
were therefore encompassed in the Denisons waiver. But this
reasoning conflicts with the language and purposes of Alaskas
treble damages provision.
The UTPAs treble damages provision, AS 45.50.531(a),
states that [a] person who suffers an ascertainable loss of
money or property as a result of another persons act or practice
. . . may bring a civil action to recover for each unlawful act
or practice three times the actual damages or $500, whichever is
greater . . . .66 This language appears to authorize treble
damages based solely on an allegation and finding that the UTPA
has been violated. In addition to specifying that treble damages
are to be awarded as a matter of course, subsection .531(a) goes
on to allow the court to provide other relief it considers
necessary and proper67 thereby reinforcing the provisions intent
to make treble damages automatic. Accordingly, once the Denisons
established a UTPA violation resulting in a monetary loss
exceeding the UTPAs $500 statutory damages threshold, subsection
.531(a) allowed them to recover treble damages regardless of
whether they chose to seek any other form of relief.
Kenai Chrysler nonetheless cites AS 45.50.531(i) as
supporting its position. Subsection .531(i) refers to awards of
punitive damages under subsection .531(a), stating that all such
awards are governed by Alaskas law allowing the state to take
fifty percent of all punitive damages awards:
If a person receives an award of punitive
damages under (a) of this section, the court
shall require that 50 percent of the award be
deposited into the general fund of the state
under AS 09.17.020(j). This subsection does
not grant the state the right to file or join
a civil action to recover punitive
damages.[68]
Kenai Chrysler reads this provisions mention of
punitive damages under (a) of this section as a reference to
treble damages awarded under the first sentence of that
subsection. But this reading ignores the second sentence of
subsection .531(a), which authorizes a person suing for treble
damages under that subsection to pursue other forms of relief
besides treble damages, including common law relief such as
punitive damages: Nothing in this subsection prevents a person
who brings an action under this subsection from pursuing other
remedies available under other law, including common law.69 In
our view, subsection .531(i)s mention of punitive damages simply
refers to punitive damages awarded as other remedies available
under subsection .531(a)s second sentence.
Kenai Chrysler also asserts that treble damages should
be equated to punitive damages because they serve a punitive
role. But this argument overlooks the other important purposes
that Alaskas legislature intended the UTPAs treble damages
provision to serve. The legislative history of Alaskas provision
establishes that treble damages were adopted not just to deter
fraud, but also to encourage injured parties to file suits under
the UTPA and to ensure that they would be adequately compensated
for their efforts.70 Moreover, because the current version of
subsection .531(a) no longer makes treble damages contingent on
proof of a willful violation, a separate award of punitive
damages for willful or reckless misconduct neither duplicates nor
conflicts with an award for treble damages under subsection
.531(a).
In short, we find no merit to Kenai Chryslers argument
that the Denisons waived their right to treble damages under the
UTPA by agreeing to withdraw their additional claim for punitive
damages.
IV. THE DENISONS CROSS-APPEAL
A. Attorneys Fees
As prevailing parties under the UTPA, the Denisons are
entitled to full reasonable attorney fees.71 The Denisons argue
in their cross-appeal that the trial court inappropriately
reduced the full fees they requested. In addition, the Denisons
argue that the court incorrectly refused to award them fees that
they incurred in the related probate matter.
1. The twenty-percent overall fee reduction
The superior court awarded the Denisons only eighty
percent of the amount of attorneys fees they requested for work
done during the UTPA litigation. In reducing the requested fees,
the court explained that, while it does not challenge the
accounting or the hourly rate, it does find that the time spent
in pursuit of the claim was more than should be reasonably
charged to the Defendants under the circumstances in this case.
The Denisons argue that the correct standard under the UTPA is
not whether it is reasonable to charge a losing defendant a
certain amount of fees, but whether the fees were reasonably
incurred by the prevailing plaintiff.72
Although we have not previously interpreted the UTPAs
provision for full reasonable fees, we have interpreted other
attorneys fee provisions using similar language and have
consistently ruled that they give the trial court considerable
discretion in determining the amount of fees that should be
considered reasonable.73 Alaskas general attorneys fee rule,
Civil Rule 82, similarly recognizes the need for judicial
discretion: Rule 82(b)(1) and (2) set out a specific schedule of
presumptively awardable fees,74 while Rule 82(b)(3) gives the
trial court broad discretion to depart from the schedule for any
equitable reason described in that subsection.75
In our view, the UTPAs full reasonable fee provision
gave the superior court similarly broad discretion to decide
whether the Denisons proposed fees were reasonable under the
totality of the circumstances presented. Here, the court did not
question the number of hours actually billed or the hourly rate
of the billings. It nevertheless reduced the amount the Denisons
requested by twenty percent to reflect the fees that the court
believed to be reasonable based on its own observations. In our
view, the court did not err in interpreting the UTPA to permit
this approach; and we find no abuse of discretion in the courts
evaluation of the full amount of fees that should reasonably be
awarded.
2. Exclusion of fees for time spent in probate court
Before reducing the award by twenty percent, the trial
court subtracted from the Denisons total attorneys fee request
all fees that the Denisons incurred in the probate court
proceedings in which Kenai Chrysler attempted to modify Davids
guardianship order. The Denisons argue that the superior court
should have awarded attorneys fees under the UTPA for the probate
case because the guardianship hearing was a part of Kenai
Chryslers UTPA violation.
Although this argument is logically plausible, it runs
into technical problems because the probate code includes its own
fee provision, which allows the probate court to require any
petitioning party to pay some or all of the costs of a
guardianship proceeding if the court finds that the petitioner
proceeded maliciously, frivolously, or without just cause.76 In
this case, the probate court specifically found that Kenai
Chryslers petition to amend Davids guardianship was frivolous; on
this basis, the probate court required Kenai Chrysler to pay
$1,600 in attorneys fees. Because the probate codes fee
provisions govern all guardianship proceedings, and because the
probate court in this case actually did award fees, any
additional award under the UTPA might result in double recovery
by the Denisons or expose Kenai Chrysler to double payment. We
therefore conclude that the superior court did not err in
subtracting billings attributable to the probate case from the
Denisons fee request under the UTPA.
B. Failure To Grant the Denisons Motions for Sanctions
The Denisons argue that the superior court erred in
denying its motions to impose sanctions against Kenai Chrysler
for (1) failing to provide a representative authorized to bind
the defendants at the pretrial settlement conference, and (2)
submitting legally inaccurate jury instructions. The Denisons
moved for sanctions on both of these grounds below, and Kenai
Chrysler opposed the motions. The trial court reserved its
ruling on the motions pending the conclusion of trial, but then
apparently lost track of them, leaving the issue of sanctions
unresolved when the court entered its final judgment. The
Denisons did not ask for a ruling before the court entered final
judgment and evidently failed to remind the court that the issues
remained pending.
Addressing similar circumstances, we have previously
held that a moving party forfeits the right to appeal an issue
raised in a motion left unresolved by the trial court unless the
party called the motion to the trial courts attention and
insisted on a ruling before the court entered final judgment.77
This precedent controls here. The Denisons failure to flag the
unresolved motions and request a superior court ruling before
entry of final judgment precludes them from arguing the merits of
the motions in this appeal. We thus decline to consider the
Denisons arguments on these points.
V. CONCLUSION
For these reasons, we AFFIRM the superior courts
judgment.
MATTHEWS, Justice, dissenting in part.
In this dissent I argue that the loss of use award is
excessive and should be remitted. I also suggest that car rental
costs that are not actually incurred should not be used to
measure loss of use damages over a long period of time because no
reasonable person rents a car at weekly or monthly rates on a
long-term basis.
The rule that loss of use damages can be obtained for
property that is destroyed or converted is of relatively recent
origin. Formerly it was thought that the correct measure of
damages simply was the fair market value of the property in
question plus prejudgment interest from the date of loss. This
was an ongoing controversy as of 1973 when we decided State v.
Stanley.1 We did not resolve it for Alaska until Alaska
Construction Equipment, Inc. v. Star Trucking, Inc. was decided
in 2006.2
Another somewhat less recent rule that is involved here
allows reasonable rental value as a measure of loss of use
damages even though no substitute property is actually rented.
We adopted this approach in Burgess Construction Co. v. Hancock,
while recognizing that actually renting a replacement is required
in some jurisdictions.3
Combining these two rules means that when a vehicle is
tortiously destroyed loss of use damages may be recovered, and
the measure of the loss of use can be the reasonable rental cost
of renting a substitute vehicle even though no substitute is
actually rented. Recognizing that loss of use damages should not
go on indefinitely, our rule is that they run only for the time
reasonably required to buy a suitable replacement vehicle.4
Buying a replacement vehicle for an eight-year-old
Pontiac should not be a time-consuming process. For all but the
impecunious the process should be completed in a couple of weeks.
One would expect then that the rules discussed here would leave
the plaintiff whose vehicle has been destroyed with a realistic
measure of recovery that is fair to both the plaintiff and the
defendant. The plaintiff would be entitled to the fair market
value of the destroyed vehicle plus car rental charges for a week
or two.
But complications develop when the plaintiff whose
vehicle is destroyed is impecunious and cannot afford to buy a
replacement vehicle. If the plaintiffs lack of financial means
may be considered, it may be that the time reasonably required to
obtain a substitute vehicle extends indefinitely or at least is
very lengthy. And if the measure of the loss of use is
prevailing car rental charges even though the plaintiff does not
actually rent a substitute vehicle (and could not afford to do
so) the loss of use recovery can readily become both unrealistic
and unfair. No reasonable person rents a passenger vehicle on a
long-term basis at retail weekly or monthly rates.
I would resolve this problem by limiting the use of
rental charges that are not incurred as a measure of loss of use
damages to the period of time that it would take a person of
ordinary means to buy a substitute vehicle. Beyond that period,
if the impecunious plaintiff incurs actual damages that exceed
prejudgment interest car pool and public transportation costs,
for example they may be recovered as well. But allowing
unincurred rental charges to run on a long-term basis is
unrealistic and unreasonable because, as stated, no one
reasonably incurs them on a long-term basis.
In the present case I can see no basis for allowing
unincurred rental charges for more than a month. Given that the
lowest figure for a months rental was $499 (and choosing the low
figure for an eight-year-old car seems right) and that there was
no evidence of actually incurred loss of use damages, any figure
in excess of that sum for loss of use would be excessive.
Accordingly, I would order a remittitur to $499 for the loss of
use award.
In all other respects I agree with todays opinion.
_______________________________
1 In addition to suing Kenai Chrysler Center, Inc., the
Denisons named DaimlerChrysler Insurance Agency as a defendant.
For convenience, we refer to both defendants collectively as
Kenai Chrysler.
2 AS 45.50.471-.561.
3 We review summary judgment rulings de novo. Parker v.
Tomera, 89 P.3d 761, 765 (Alaska 2004). Summary judgment is
appropriate when there is no genuine issue of material fact and
the moving party is entitled to judgment as a matter of law. Id.
In reviewing the record, we draw all inferences in favor of the
non-moving party. Id. Once the moving party satisfies its burden
of showing a lack of genuine issues of material fact and its
right to judgment as a matter of law, the non-moving party can
avoid summary judgment only by offering evidence reasonably
tending to dispute or contradict the movants evidence and thus
demonstrate that a material issue of fact exists. Id. (quoting
State, Dept of Highways v. Green, 586 P.2d 595, 606 n.32 (Alaska
1978)). We may affirm a grant of summary judgment on any legal
basis appearing in the record. Martinez v. Ha, 12 P.3d 1159,
1162 (Alaska 2000) (citing Denardo v. GCI Commcn Corp., 983 P.2d
1288, 1290 (Alaska 1999)).
4 See Restatement (Second) of Contracts 13 (1981).
5 Pappert v. Sargent, 847 P.2d 66, 69 (Alaska 1993).
6 Id. at 70.
7 Id. at 69.
8 Restatement (Second) of Contracts 13, cmt. a (1981).
9 Although Kenai Chrysler advances a conclusory argument
that the legal guardianship order did not establish constructive
notice in this case, the company cites no authority to support
this conclusion.
10 The Emporium v. Boyle, 7 Alaska 80, 82 (1923).
11 Id. at 84.
12 Id.; accord Huntington Natl Bank v. Toland, 594 N.E.2d
1103, 1105 (Ohio App. 1991) ([T]he probate record of judgment is
deemed to provide constructive notice to the world of the wards
legal disability.).
13 Restatement (Second) of Contracts 13, cmt. a (1981).
14 Restatement (Second) of Contracts 13, cmt. d (1981).
15 We also note that Dorothy Denison unequivocally
informed Kenai Chrysler of the guardianship within two days of
the sale, when she tried to return the car. And in any event,
the Denisons inability to prevent David from driving the Neon
after Kenai Chrysler refused to accept the car has no bearing on
the guardianships validity earlier, or when David actually signed
the contract.
16 Alaska Constr. Equip., Inc. v. Star Trucking, Inc., 128
P.3d 164, 169 (Alaska 2006).
17 Id. (citing Ben Lomond, Inc. v. Campbell, 691 P.2d
1042, 1047 (Alaska 1984)).
18 Id. at 169-70. We have nevertheless cautioned that
damages for lost use may not be awarded together with prejudgment
interest for damages representing permanent lost value, since
such an award would give the plaintiff a double recovery. See
id. at 170 (citing State v. Stanley, 506 P.2d 1284, 1295 (Alaska
1973)). In the present case, however, Kenai Chrysler does not
challenge the superior courts award on this basis.
19 State v. Stanley, 506 P.2d 1284, 1293 (Alaska 1973).
20 Alaska Pattern Jury Instruction No. 20.16 reads:
The (first, second, etc.) item of claimed
loss is the loss of
use of the (insert
item of property).
The plaintiff is entitled to be compensated
for the fair value of the use of the (insert
item of property) during the period
(reasonably necessary to fix it) (plaintiff
was unable to use it) (it was held by the
defendant) (reasonably necessary to replace
it). In a moment I will explain how to
measure the value of the loss of use.
21 Compare Alaska Pattern Jury Instruction No. 20.16 with
Kenai Chryslers Proposed Instruction and Instruction No. 14.
22 See Kristich v. State, 550 P.2d 796, 804 (Alaska 1976).
23 Alaska Pattern Jury Instruction No. 20.18A.
24 Alaska Civil Rule 19(a) states in part: A person who is
subject to service of process and whose joinder will not deprive
the court of jurisdiction over the subject matter of the action
shall be joined as a party in the action if (1) in the persons
absence complete relief cannot be accorded among those already
parties[.]
25 Alaska R. Civ. P. 19(a).
26 We review the superior courts rulings on discovery
issues for abuse of discretion. Coulson v. Marsh & McLennan,
Inc., 973 P.2d 1142, 1146 (1999). We will find an abuse of
discretion only when we are left with a definite and firm
conviction, after reviewing the whole record, that the trial
court erred in its ruling. Melendrez v. Bode, 941 P.2d 1254,
1256 (Alaska 1997) (quoting Peter Pan Seafoods, Inc. v.
Stepanoff, 650 P.2d 375, 378-79 (Alaska 1982)).
27 Alaska R. Civ. P. 37(a)(2)(B).
28 Kenai Chrysler also asserts that it sent a second
letter to the Denisons, but the Denisons deny having received it.
The letter merely reiterated Kenai Chryslers discovery demands
and again threatened a motion to compel. It therefore has no
significant bearing on the motion to compel.
29 Alaska R. Evid. 612(a).
30 See Alaska R. Evid. 612 cmt. (Rule 612 . . . rejects
limitations on the kinds of writings or objects that may be shown
to witnesses to refresh recollection.).
31 Alaska R. Evid. 612(a).
32 Alaska R. Evid. 103(a).
33 Alaska R. Evid. 103(a)(2); see Clement v. Fulton, 110
P.3d 927, 935 (Alaska 2005).
34 Wagner v. Stuckagain Heights, 926 P.2d 456, 459 (Alaska
1996).
35 Alaska R. Evid. 103(d).
36 In arguing this point, Kenai Chrysler appears to
challenge both the trial courts failure to grant a directed
verdict at trial and its earlier denial of summary judgment
against the Denisons. To the extent that Kenai Chryslers
challenge to the summary judgment order asserts an error in
interpreting the UTPA, our discussion of the UTPA in the text
covers the point. To the extent that Kenai Chrysler asserts that
the trial court erred in denying summary judgment on factual
grounds, its challenge to the summary judgment order is barred by
the cases trial on its merits. See Larson v. Benediktsson, 152
P.3d 1159 (Alaska 2007).
37 We have held that a jurys verdict may be overturned on
the ground of insufficient evidence only if there is no evidence
supporting the verdict. Nautilus Marine Enters. Inc. v. Valdez
Fisheries Dev. Assn, 943 P.2d 1201, 1205 n.8 (Alaska 1997).
Interpretation of the UTPA presents a question of law that we
review independently. J.M.R. v. S.T.R., 15 P.3d 253, 256 (Alaska
2001).
38 State v. ONeill Investigations, Inc., 609 P.2d 520, 534
(Alaska 1980).
39 Id.
40 Id. at 535.
41 Id.
42 Id. (quoting F.T.C. v. Sperry & Hutchinson Co., 405
U.S. 233, 244-45 n.5 (1972)).
43 Cf. Dura-Wood Treating Co. v. Century Forest Indus.,
Inc., 675 F.2d 745, 755-56 (5th Cir. 1982) (interpreting the
Texas Deceptive Trade Practices Act and holding that an
allegation of breach of contract without more does not
constitute a false, misleading, or deceptive act in violation of
the DTPA); Dealers Supply Co. v. Cheil Indus., Inc., 348 F. Supp.
2d 579, 591 (M.D. N.C. 2004) (interpreting N.C. Gen. Stat. 75-
1.1, North Carolinas statute prohibiting unfair or deceptive acts
or practices in or affecting commerce and noting that a breach of
contract alone does not give rise to a claim under that statute).
44 See, e.g., S. Atl. Ltd. Pship of Tenn., L.P. v. Riese,
284 F.3d 518, 539-40 (4th Cir. 2002) (holding under North
Carolinas UTPA that a partys timing of its exercise of its
contractual right to expel a member of the partnership so that
the member would lose the right to be paid for substantial work
amounted to an unfair trade practice).
45 Id. at 539.
46 Regency Nissan, Inc. v. Taylor, 391 S.E.2d 467, 470
(Ga. App. 1990) (interpreting Georgias Fair Business Practices
Act, Ga. Ann. Code 10-1-390 et seq., which prohibits unfair or
deceptive acts or practices in trade or commerce).
47 See Douglas M. Zupanec, Annotation, Practices Forbidden
by State Deceptive Practice and Consumer Protection Acts, 89
A.L.R. 3d 449, 463 (1979).
48 See, e.g., St. Paul Fire & Marine Ins. Co. v. Ellis &
Ellis, 262 F.3d 53, 66 (1st Cir. 2001) (noting that the standard
for conduct that falls within the proscription of Massachusettss
UTPA is notably imprecise, encompassing any actions that attain a
level of rascality that would raise an eyebrow of someone inured
to the rough and tumble of the world of commerce, have an
extortionate quality that gives it the rancid flavor of
unfairness, or fall within at least the penumbra of some common-
law, statutory, or other established concept of unfairness.
(quoting Commercial Union Ins. Co. v. Seven Provinces Ins. Co.,
217 F.3d 33, 40 (1st Cir. 2000)).
49 See ONeill, 609 P.2d at 535.
50 Ben Lomond, Inc. v. Campbell, 691 P.2d 1042, 1046
(Alaska 1984).
51 In fact, if the jury found that the Denisons should
reasonably have replaced the car within five months, its $5,000
award still would have been justified under Goodmans highest
quoted rental value $1,200 per month.
52 Ben Lomond, Inc., 691 P.2d at 1046 (quoting Heacock v.
Town, 419 P.2d 622, 623-24 (Alaska 1966)).
53 Id. (quoting Haskins v. Shelden, 558 P.2d 487, 494
(Alaska 1976)).
54 Id. at 1047.
55 Id. (citing ERA Helicopters, Inc. v. Digicon Alaska,
Inc., 518 P.2d 1057, 1059-60 (Alaska 1974) and Gregory v.
Padilla, 379 P.2d 951, 956 (Alaska 1963)).
56 Id. (citing Gregory, 379 P.2d at 956).
57 Id. at 1044.
58 Id. at 1045.
59 Id. at 1045-46.
60 Id. at 1046.
61 Id. at 1047 (quoting Gregory, 379 P.2d at 956).
62 Id.
63 Id.
64 See, e.g., United Truck Rental v. Kleenco Corp., 929
P.2d 99, 110 (Haw. App. 1996); Persinger v. Lucas, 512 N.E.2d
865, 869 (Ind. App. 1987); Moxley v. Cole, 736 So. 2d 249, 252
(La. App. 1999). But see Whitehead v. Kan. City S. R.R., 758 So.
2d 211, 221 (La. App. 2000); Lenz v. Cameron, 674 P.2d 1101, 1103
(Mont. 1984); Howard v. Holiday Inns, Inc., 280 S.E.2d 204 (S.C.
1981), overruled on other grounds by ONeal v. Bowles, 431 S.E.2d
555 (S.C. 1993); Elias v. Mr. Yamaha, Inc., 33 S.W.3d 54 (Tex.
App. 2000); Nashban Barrell & Container Co. v. G. G. Parsons
Trucking Co., 182 N.W.2d 448, 454 (Wis. 1971).
65 Kenai Chrysler also advances a conclusory argument that
UTPA treble damages, like punitive damages, should properly be
left to the jury instead of being awarded by the court. Apart
from being inadequately briefed, this argument seems to ignore
the 1998 amendment to Alaskas UTPA, which makes treble damages
mandatory for violations of the UTPA. See AS 45.50.531(a); see
also ch. 96, 3, SLA 1998.
66 AS 45.50.531(a).
67 Id.
68 AS 45.50.531(i).
69 AS 45.50.531(a).
70 See Judiciary Committee Report on HCSCS for Senate Bill
No. 352, House Journal Supp. No. 10 at 2, 1970 House Journal
(explaining that the treble damages provision is a long standing
tool in consumer matters, used to deter fraud, encourage injured
parties to bring suit, and compensate parties for their trouble).
71 AS 45.50.537(a) provides: In an action brought by a
private person under AS 45.50.471-45.50.561, a prevailing
plaintiff shall be awarded costs as provided by court rule and
full reasonable attorney fees at the prevailing reasonable rate.
72 We independently review the superior courts
interpretation of the UTPAs attorneys fee provision, see Halloran
v. State, Div. of Elections, 115 P.3d 547, 550 (Alaska 2005).
But we review the amount of the fee award itself for abuse of
discretion. Marsingill v. OMalley, 128 P.3d 151, 156 (Alaska
2006).
73 For example, we have affirmed a trial courts decision
that a prevailing partys fees were reasonable even though they
totaled twice the amount charged to the losing party by its own
attorney. Gamble v. Northstore Pship, 28 P.3d 286, 289-90
(Alaska 2001) (construing a contract provision regarding
attorneys fees); see also Hunsicker v. Thompson, 717 P.2d 358,
359 (Alaska 1986) (discussing attorneys fees awards to public
interest litigants under Civil Rule 82).
74 See Alaska R. Civ. P. 82(b)(1) & (2).
75 See Alaska R. Civ. P. 82(b)(3).
76 AS 13.26.131(d).
77 Thomas v. State, 391 P.2d 18, 20 (Alaska 1964).
1 506 P.2d 1284, 1292 (Alaska 1973).
2 128 P.3d 164, 169 (Alaska 2006).
3 514 P.2d 236, 238 & n.6 (Alaska 1973); see Nashban
Barrel & Container Co. v. G.G. Parsons Trucking Co., 182 N.W.2d
448, 453-54 (Wis. 1971) (noting that several courts surprisingly
do not require an actual rental and adopting rule that damages
for loss of use when vehicle is not repairable are recoverable
during period reasonably required for replacement in an amount
equal to that which was actually expended . . . provided such
amount was not unreasonable).
4 See Star Trucking, 128 P.3d at 169.
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