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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Ranes & Shine, LLC v. MacDonald Miller Alaska, Inc. (5/1/2015) sp-7003

Ranes & Shine, LLC v. MacDonald Miller Alaska, Inc. (5/1/2015) sp-7003

         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, email  



RANES & SHINE, LLC,                                    )  

                                                       )        Supreme Court No. S-15222  

                  Appellant,                           )  

                                                       )        Superior Court No. 3AN-10-10232 CI  

         v.                                            )  

                                                       )        O P I N I O N  

MACDONALD MILLER                                       )  

ALASKA, INC.,                                          )        No. 7003 - May 1, 2015  


                  Appellee.                            )  

_______________________________ )  

                  Appeal from the Superior Court of the State of Alaska, Third  


                  Judicial District, Anchorage, John Suddock, Judge.   

                  Appearances:  Brent R. Cole, Law Office of Brent R. Cole,  

                  P.C., Anchorage, for Appellant. Jason J. Ruedy, Law Offices  


                  of Royce & Brain, Anchorage, for Appellee.   

                  Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and  


                  Bolger, Justices.  

                   STOWERS, Justice.  


                  In 2005 Gordon Timmerman, the sole owner of MacDonald Miller Alaska,  

Inc., agreed to release a claim MacDonald Miller had against Ranes & Shine, LLC, and  


to pay an additional $18,000 in exchange for equipment Ranes & Shine claimed to own  


free  of  any  encumbrances.    Five  years  later  First  National  Bank  Alaska  contacted  

Timmerman, asserting a security interest in the equipment and requesting its return.  First  


----------------------- Page 2-----------------------


National eventually filed this suit against Timmerman in 2010 to obtain possession of the  


                    Timmerman filed a third-party complaint against Ranes & Shine and its  


former  managing  member,  Thomas  Ranes,  asserting  breach  of  warranty  of  title,  

misrepresentation, unfair trade practices, and common law contract claims.  In its answer,  

Ranes  &  Shine  alleged  among  its  other  contentions  that  the  applicable  statutes  of  

limitation  barred  Timmerman's  suit  because  First  National's  publicly  filed  Uniform  

Commercial Code (UCC) financing statement should have placed Timmerman on inquiry  


notice of First National's security interest in the equipment at the time of the agreement  


in 2005.  The superior court disagreed and held Ranes & Shine liable for breach of  


contract and misrepresentation, while also dismissing the claims asserted against Ranes  

individually.  Ranes & Shine appeals.  


                   We affirm the superior court's statute of limitations and attorney's fees and  


costs rulings, as well as various procedural rulings for the reasons discussed below.  But  


we reverse the court's decision to dismiss the misrepresentation claim that Timmerman's  


company, MacDonald Miller, had asserted against Ranes in his individual capacity and  

remand for further proceedings on that issue.  


          A.       Facts  

                    Thomas Ranes, Ken Embley, and Tom Embley formed Ranes & Shine,  


LLC in October 2001.  Ranes owned 50% of the company, and the Embleys each owned  


25% of the company.  Ranes had complete managerial authority, and the Embleys were  

essentially silent partners.  



                   First National's claims are not relevant to this appeal, and we do not discuss  

them in any detail.  

                                                             -2-                                                          7003  

----------------------- Page 3-----------------------

                   In 2002 Ranes & Shine applied for a loan from First National Bank Alaska.  


In connection with the loan, Ranes and the Embleys signed a promissory note, a business  

loan  agreement,  and  a  commercial  security  agreement  to  secure  the  loan.                                       The  


commercial  security  agreement  gave  First  National  a  security  interest  in  various  

categories of collateral, including Ranes & Shine's equipment.  On October 30, 2002,  


First National filed a UCC financing  statement perfecting its security interest in the  


equipment.    First  National  filed  a  continuation   of  that  financing  statement  on  

August 7, 2007.  

                   In 2003 Circle Plumbing & Heating, a company majority-owned by the  


Embleys, was hired to build Ranes & Shine's facility.  Circle hired MacDonald Miller  


Alaska, Inc., a company wholly owned by Gordon Timmerman, to provide mechanical  

services for the new building.  

                   MacDonald Miller worked on the project and billed Circle, but was not  


promptly  paid.    MacDonald  Miller  eventually  filed  a  lien  against  Ranes  &  Shine's  


building for approximately $92,000. But MacDonald Miller released the lien a few hours  


later, allegedly because Tom Embley contacted Timmerman asking him to release the  


claim so Ranes & Shine could secure additional funding for the building project.  Tom  

Embley  allegedly  assured  Timmerman  he  would  be  paid,  and  Circle  later  paid  


MacDonald Miller $60,000 in 2004.  This left a claimed balance of $32,000 outstanding.  

                    Timmerman continued to pursue the debt without success until he contacted  

Ranes & Shine directly and spoke with Ranes.  In October  2005 Timmerman and Ranes  


came  to  an  agreement:   in  exchange for certain  equipment, Timmerman  executed  a  


release of the remaining $32,000 debt owed to MacDonald Miller and paid an additional  

$18,000 to Ranes & Shine.  

                   In the course of reaching this agreement, Ranes incorrectly represented to  

Timmerman that Ranes & Shine owned clear title to the equipment.  Timmerman did not  

                                                             -3-                                                       7003

----------------------- Page 4-----------------------

conduct a UCC record search; he later testified it was not his standard practice to do so  


and he "didn't even know what UCC stood for" prior to this lawsuit.  

                  After  Timmerman  took  possession  of  the  equipment,  he  stored  it  in  a  

shipping container.  There it remained until the summer of 2010 when First National  


contacted  him.          First  National  explained  it  had  filed  a  UCC  financing  statement  

documenting its security interest in the equipment several years before Timmerman's  

agreement with Ranes & Shine.  First National also stated that the loan secured by the  


equipment had gone into default.  First National demanded that Timmerman return the  

equipment, but Timmerman refused.  

         B.       Proceedings  

                  First National brought suit against Timmerman in 2010 seeking the return  


of the equipment.  Timmerman answered the complaint and asserted third-party claims  

against Ranes individually and Ranes & Shine based on Ranes's incorrect representation  

that Ranes & Shine owned the equipment without any encumbrances.  Timmerman  


asserted the following third-party claims:  (1) breach of warranty of title under the UCC;  

(2) misrepresentation; and (3) deceptive trade practices under Alaska's Unfair Trade  


Practices  and  Consumer  Protection  Act  (UTPA).    First  National's  claims  against  

Timmerman  were  disposed  of  on  summary  judgment,  leaving  only  Timmerman's  

third-party claims.  

                  Ranes & Shine moved for summary judgment on Timmerman's claims  

based  on  the  applicable  statutes  of  limitation.    Superior  Court  Judge  John  Suddock  


granted Ranes & Shine's motion in part, ruling that Timmerman's breach of warranty  



claim was subject to the UCC's strict four-year limitations period  and that Timmerman 

         2        See  AS 45.02.725(a)-(b) ("An action for breach of a contract for sale must  

be commenced within four years after the cause of action has accrued. . . .  A cause of  


                                                          -4-                                                   7003

----------------------- Page 5-----------------------


failed to bring his breach of warranty claim within that period.  The superior court denied  


Ranes  &  Shine's  motion  with  respect  to  the  misrepresentation  and  UTPA  claims,  


concluding that there were genuine issues of material fact regarding when Timmerman  

was put on inquiry notice.  The court did not address a common law contract claim  

Timmerman  had  added  through  an  amended  complaint  filed  while  the  parties  were  

briefing the summary judgment motion.3  

                   The superior court held a two-day bench trial in May 2013 to address the  

remaining claims.  The court ruled that Timmerman's misrepresentation, UTPA, and  

common law breach of contract claims were not barred by the statutes of limitation  


because Timmerman was not on inquiry notice until he was contacted by First National  

in 2010.  The court also concluded that Timmerman had proven his misrepresentation  

and breach of contract claims, but not his UTPA claim.  


                   The superior court observed, however, that the lawsuit had been "inaptly  

filed as a personal lawsuit by Mr. Timmerman against [Ranes & Shine] when all the  

evidence is that he was negotiating and settling and purchasing this equipment as a  


corporate officer of MacDonald Miller."  Based on this finding, and further finding that  

Ranes & Shine would suffer no prejudice, the court on its own initiative substituted  

MacDonald Miller as the plaintiff.  


action  accrues  when  the  breach  occurs,  regardless  of  the  aggrieved  party's  lack  of  

knowledge of the breach."); see also Armour v. Alaska Power Auth. , 765 P.2d 1372,  


1375 (Alaska 1988) (holding that the four-year UCC statute of limitations is not tolled  


under the common law discovery rule regardless of a purchaser's knowledge).  



                   Timmerman's contract claim alleged that Ranes & Shine had not provided  

"good and valuable consideration," apparently due to the seizure of the equipment, and  

that Ranes & Shine breached the duty of good faith and fair dealing by selling equipment  

that Ranes & Shine "was not authorized to sell."  

                                                           -5-                                                    7003

----------------------- Page 6-----------------------

                   MacDonald  Miller  prepared  a  final  judgment  for  the  superior  court's  


signature.  The proposed final judgment stated that the claims against Ranes individually  

were dismissed.  Ranes & Shine objected, arguing that the superior court's oral findings  

had not dismissed the individual claims against Ranes.  


                   The superior court signed the proposed final judgment without specifically  

discussing  its  decision  to  dismiss  the  claims  against  Ranes  individually.    The  court  

awarded  MacDonald  Miller  $50,329.37,  plus  interest,  attorney's  fees,  and  costs.  

Ranes & Shine appeals.  


                   "Determinations            of   which       legal    authorities       apply      in   a   case     and  

interpretations  of  what  those  legal  authorities  mean  are  questions  of  law  subject  to  



de  novo  review."     "When  applying  the  de  novo  standard  of  review,  we  apply  our  


independent  judgment  .  .  .  ,  adopting  the  rule  of  law  most  persuasive  in  light  of  

precedent, reason, and policy."5  



                   We review a trial court's findings of fact for clear error.   Clear error "exists  


when 'our review of the record leaves us with the definite and firm conviction that the  

superior court has made a mistake.' "7  

          4        ConocoPhillips Alaska, Inc. v. Williams Alaska Petrol., Inc.                        , 322 P.3d 114,  

122 (Alaska 2014) (footnotes omitted).  

          5        Id.   (quoting   Russell   ex   rel.   J.N.   v.   Virg-In ,   258   P.3d   795,   802  

(Alaska 2011)) (internal quotation marks omitted).  

          6        Gilbert M. v. State, 139 P.3d 581, 586 (Alaska 2006).  

          7        Id . (quoting D.M. v. State, Div. of Family & Youth Servs., 995 P.2d 205,  

207-08 (Alaska 2000)).  

                                                            -6-                                                      7003

----------------------- Page 7-----------------------

                   We   review   a   trial   court's   decision  to  admit   evidence,   including  the  


                                                                          A  decision  to  permit  or  deny  an  

testimony  of  a  witness,  for  abuse  of  discretion.                                       


amendment to the pleadings is reviewed for abuse of discretion.   We will find an abuse  


of discretion when the decision on review is manifestly unreasonable.10  


                   Ranes & Shine primarily argues that the superior court erred when it ruled  

that the statutes of limitation did not bar MacDonald Miller's claims.  Ranes & Shine  


also argues that the court erred in dismissing the claims against Ranes individually and  

awarding MacDonald Miller attorney's fees and costs.  Finally, Ranes & Shine raises  

several  procedural  issues.    We  generally  affirm  the  superior  court's  rulings,  but  we  

reverse  and  remand  its  dismissal  of  the  misrepresentation  claim  against  Ranes  



         A.	       MacDonald   Miller's   Common                     Law      Breach   Of         Contract   And  


                   Misrepresentation  Claims  Were  Not  Barred  By  The  Statutes  Of  


                   MacDonald Miller asserted three claims at trial:  (1) misrepresentation;  


(2) unfair trade practices; and (3) breach of contract.  Only the misrepresentation and  

breach of contract claims are at issue in this appeal.11  

         8         Getchell v. Lodge, 65 P.3d 50, 53, 58 (Alaska 2003).  

         9        Miller v. Safeway, Inc. , 102 P.3d 282, 288 (Alaska 2004).  

         10        See Tufco, Inc. v. Pacific Envtl. Corp., 113 P.3d 668, 671 (Alaska 2005).  

         11        The   trial   court   dismissed   MacDonald   Miller's   UTPA   claim,   and  

MacDonald Miller has not appealed that ruling.  

                                                          -7-	                                                   7003

----------------------- Page 8-----------------------


                      A  party  must  bring  a  misrepresentation  claim  within  two  years  of  the  


                                                     and a breach of contract claim within three years of  

accrual of his cause of action 


accrual.           Generally,  "accrual  of  a  cause  of  action  is  established  at  the  time  of  the  



injury."         But the common law discovery rule tolls the running of the statutory period  


"[w]here an element of a cause of action is not immediately apparent."                                               The discovery  


rule "mitigate[s] the harshness that can result from the [accrual] rule's preclusion of  

           12         AS 09.10.070(a).  

           13         AS 09.10.053.             But see AS 45.02.725(a) (four-year statute of limitations  

applicable to breach of a contract for sale of goods).  Ranes & Shine argues that the   

contract between Timmerman and Ranes was one for the sale of goods, making it subject                             

to the four-year statute of limitations in AS 45.02.725 to which the discovery rule does     

not apply.  Armour v. Alaska Power Auth. , 765 P.2d 1372, 1375 (Alaska 1988).  But we  

conclude that Ranes & Shine did not preserve this argument.  

                      MacDonald Miller first asserted its common law contract claim while the  


briefing on Ranes & Shine's motion for summary judgment was pending.  Ranes &  


 Shine thus argued for the application of AS 45.02.725 for the first time in its summary  


judgment reply brief.  But the superior court did not issue a ruling on that issue, and  

Ranes & Shine never sought reconsideration or filed a new motion seeking to bar the  

common law contract claim.  Ranes & Shine also did not ask the court to apply the four- 


year statute of limitations at trial even after the court specifically asked the parties if it  

needed to make any additional rulings.  Thus, Ranes & Shine asks that we review an  

order that was never properly requested and that was never issued.  We decline to do so.  


See Gunderson v. Univ. of Alaska, Fairbanks, 902 P.2d 323, 327 n.5 (Alaska 1995)  


("Gunderson  did  not  present  this  argument  to  the  trial  court  .  .  .  .    Therefore  it  is  


waived."); Alaska State Emps. Ass'n v. Alaska Public Emps. Ass'n , 813 P.2d 669, 671  


n.6  (Alaska  1991)  ("As  a  matter  of  fairness,  the  trial  court  could  not  consider  an  


argument raised for the first time in a reply brief.").  



                      Gefre v. Davis Wright Tremaine, LLP, 306 P.3d 1264, 1273 (Alaska 2013)  

(quoting  Cameron v. State, 822 P.2d 1362, 1365 (Alaska 1991)) (internal quotation  

marks omitted).  



                      Id. at 1274 (alteration in original) (quoting John's Heating Serv. v. Lamb ,  

46 P.3d 1024, 1031 (Alaska 2002)) (internal quotation marks omitted).  

                                                                    -8-                                                             7003

----------------------- Page 9-----------------------

claims  where  the  injury  provided  insufficient  notice  of  the  cause  of  action  to  the  



                   In discussing the discovery rule, we have previously explained:  

                    [T]he statute of limitations does not begin to run until the  

                    claimant discovers, or reasonably should have discovered, the  

                    existence  of  all  elements  essential  to  the  cause  of  action.  

                    Thus we have said the relevant inquiry is the date when the  

                    claimant   reasonably   should   have   known   of   the   facts  

                    supporting her cause of action.  We look to the date when a  

                   reasonable person has enough information to alert that person  


                   that he or she has a potential cause of action or should begin  



                    an inquiry to protect his or her rights.  


There are at least two dates from which the statute of limitations can begin to run:  (1) the  

actual-notice date, and (2) the inquiry-notice date.  The actual-notice date is "the date  

when [the] plaintiff reasonably should have discovered the existence of all essential  

elements of the cause of action."18  The inquiry-notice date is "the date when the plaintiff  


has information which is sufficient to alert a reasonable person to begin an inquiry to  



protect his rights."           The inquiry-notice date generally controls when a cause of action  



          16       Id. (second alteration in original) (quoting  Cameron, 822 P.2d at 1365)  

(internal quotation marks omitted).  

          17       Id.  at 1275 (alteration in original) (quoting                 Mine Safety Appliances Co. v.  

Stiles, 756 P.2d 288, 291 (Alaska 1988)).  

          18       Id. (alteration in original) (quoting John's Heating Serv. , 46 P.3d at 1031)  


(internal quotation marks omitted).  

          19       Id. (quoting John's Heating Serv. , 46 P.3d at 1031) (internal quotation  

marks omitted).  

          20       Id.  We note that there are exceptions to this rule not at issue in this case.  



                                                             -9-                                                       7003

----------------------- Page 10-----------------------


                    Ranes & Shine challenges the superior court's statute of limitations rulings  

on two grounds.  First, Ranes & Shine asserts that we should hold that MacDonald Miller  


was on notice of its claims in 2005 because First National's publicly filed UCC financing  


                                                                                    of the fact that the equipment  

statement put MacDonald Miller on constructive notice 

was  encumbered,  contrary  to  Ranes's  representation.    Whether  a  UCC  financing  


statement provides constructive notice of the elements of a claim for statute of limitations  

purposes is a question of law that we review de novo.22  


                    Second, Ranes & Shine argues that the facts of this case demonstrate that  


MacDonald Miller was on inquiry notice of its claims in 2005 even without imputing the  

information contained in the UCC financing statement to it.  Determining the accrual  

date  is  a  fact-intensive  inquiry  conducted  by  the  superior  court,  and  we  review  the  

court's findings for clear error.23  

                    1.	      UCC financing statements do not provide constructive notice of  

                             the elements of a claim for statute of limitations purposes.  


                    Ranes & Shine argues that First National's UCC financing statement gave  

MacDonald  Miller  constructive  notice  of  the  fact  that  Ranes  had  misrepresented  


For example, if the plaintiff made a reasonable inquiry but failed to discover the essential  


elements of his cause of action, the actual-notice date may control.  Cameron, 822 P.2d  

at 1367.  



                    "Constructive notice is information or knowledge of a fact imputed by law  


to  a  person,  although  he  or  she  may  not  actually  have  it  .  .  .  ."    58  AM .   JUR .   2D  

Notice  6 (2015).  

          22       Matanuska  Elec.   Ass'n  v.   Chugach  Elec.  Ass'n ,  152  P.3d  460,  465  

(Alaska 2007) (reviewing questions of law de novo).  

          23        Gefre, 306 P.3d at 1271 (citing Sengupta v. Wickwire, 124 P.3d 748, 752  


(Alaska 2005)); Pedersen v. Zielski , 822 P.2d 903, 907 (Alaska 1991) ("Application of  


the discovery rule . . . is dependent on facts that are often unclear.").  

                                                            -10-	                                                      7003

----------------------- Page 11-----------------------


Ranes & Shine's ability to pass clear title to the equipment.  Ranes & Shine reasons that  

the superior court should have charged MacDonald Miller with notice of First National's  


security interest in the equipment at the time of the 2005 agreement.  This would place  


the accrual date sometime in October 2005, and the statutes of limitation would bar  


MacDonald Miller's claims.                    But we decline to adopt Ranes & Shine's constructive  

notice argument because it is inconsistent with our statute of limitations jurisprudence  

and would be bad public policy.  

                              a.	      We   have   implicitly   rejected   the   constructive   notice  

                                       position Ranes & Shine asks us to adopt.  

                    Neither party has cited any statute of limitations cases where we charged  


a plaintiff with constructive notice of publicly recorded facts absent a finding that the  

          24        We   note  that  the  parties  have  briefed  this  case  as  though  MacDonald  

Miller's misrepresentation and common law contract claims must have accrued at the   

same time.    We have treated their arguments in the same manner because it does not  

affect the result in this case.  

                    But our holding in Jarvill v. Porky's Equipment, Inc. suggests that their  

assumption may not be correct. 189 P.3d 335, 339 (Alaska 2008).  In Jarvill the plaintiff  


purchased a boat that was allegedly constructed negligently.  Id. at 336.  Two and a half  


years after the plaintiff took delivery of the boat, the boat sank, and the plaintiff sued the  


builder.  Id. at 337.  We held that even though the boat was defective when it was sold,  


the plaintiff did not suffer an injury that would support his negligence and product defect  

claims until the boat sank, and, therefore, those causes of action did not accrue until the  


boat sank.  Id. at 339-41.  

                    Similarly, it could be argued that MacDonald Miller's misrepresentation  


action did not accrue until First National demanded the equipment be returned because  


MacDonald Miller had not suffered damages necessary to support its claim until that  

point.  If that were the case, MacDonald Miller's misrepresentation claim - but not  


necessarily its contract claim - would  be  timely even without the operation of the  


discovery rule.  But we decline to apply Jarvill here because it was not raised before us  


or the superior court, and its application would not change our ultimate conclusions  

regarding the timeliness of MacDonald Miller's claims.  

                                                             -11-	                                                       7003

----------------------- Page 12-----------------------



plaintiff was already on inquiry notice.                       Our review has identified only one Alaska  


case - Bauman v. Day - where it was argued that a party should have been charged  

with  knowledge  of  facts  in  a  publicly  recorded  document  for  statute  of  limitations  

purposes without already being on inquiry notice.26  

                    In Bauman the Baumans purchased a property in 1984 from the Days after  

allegedly asking the Days about the presence of permafrost on the property and being  

          25        While  we  have  held  that  a  person  may  be  charged  with   knowledge  of  

information in publicly available documents in a variety of contexts, none of these cases                        

specifically  considers  that  issue  with   respect   to  the  statute  of  limitations  where  the  

plaintiff  was  not  already  on  inquiry  notice.  See,  e.g.,  Kenai  Chrysler  Ctr.,  Inc.  v.  

Denison ,  167  P.3d  1240,  1248  (Alaska  2007)  (holding  that  a  dealership  was  on  


constructive notice of guardianship because of existence of guardianship order); Watega  


v.  Watega,  143  P.3d  658,  665  (Alaska  2006)  (holding  that  purchasers  of  divorcing  

couple's home had constructive notice of wife's claim to the property because wife had  


filed an opposition to the sale with the superior court and purchasers knew about the  

divorce and the husband's need to obtain court permission prior to sale); Methonen v.  

Stone, 941 P.2d 1248, 1252 (Alaska 1997) (charging a purchaser of real property with  


notice of information in public records where other facts known to the purchaser placed  

him on inquiry notice of a potential encumbrance); State v. Alaska Land Title Ass'n,  


667  P.2d  714,  725  (Alaska  1983)  (holding  that  title  insurer's  policy  was  triggered  

because insurer was held to be on constructive notice of a public land order published  

in the Federal Register).  Nothing in this opinion today affects these earlier holdings.  



                    892  P.2d  817  (Alaska  1995).                  The  theory  of  constructive  notice  has  


appeared elsewhere in our statute of limitations cases, but never in the way Ranes &  


Shine proposes here. See, e.g., Phillips v. Gieringer , 108 P.3d 889, 893 (Alaska 2005)  

(discussing constructive notice and the relation back doctrine); Breck v. Moore , 910 P.2d  


599,  604-05  (Alaska  1996)  (holding  that  plaintiffs  were  on  constructive  notice  of  


information known or that should have been known to the plaintiffs' attorney).  But cf.  

Moore v. Allstate Ins. Co. , 995 P.2d 231, 239 (Alaska 2000) (holding in the discovery  

rule context that a homeowner would not be charged with constructive notice of her  

claim that her insurer had allegedly misrepresented the coverage available to her under  


the National Flood Insurance Program despite the fact that she could have researched the  


policy in the Federal Register).  

                                                             -12-                                                        7003

----------------------- Page 13-----------------------


told that there was none.                But the recorded subdivision plat "showed the presence of  

permafrost-laden soils on the land."28  

                    The   Baumans   built   a   house   on   the   property,   and   in   1986   began  



experiencing permafrost-related problems.                            The early problems were not significant,  

and the Baumans  dismissed them as normal settlement of a new home.30                                               By 1988,  

however,  the  problems  were  so  significant  that  the  Baumans  stopped  paying  their  


property taxes until the property was reevaluated to take the apparent permafrost into  




                    The Baumans did not bring a suit against the Days until 1992, alleging  


breach of contract among other claims.                          At the time, a breach of contract action was  



subject to a six-year statute of limitations.                       On a motion for summary judgment, the  



superior court found that the contract action had accrued at the time of the sale in 1984  


and ruled that the Baumans' contract claims were barred.                                 The Baumans appealed and  

          27        Bauman , 892 P.2d at 820.  

          28        Id. at 822.  

          29        Id. at 820.  

          30        Id.  

          31        Id.  

          32        Id.  

          33        See id. at  827 & n.        16.   As noted above, a common law breach of contract  

claim is now subject to a three-year statute of limitations.  See AS 09.10.053.  

          34        Bauman , 892 P.2d at 822.  

                                                              -13-                                                         7003

----------------------- Page 14-----------------------

we reversed in part, holding that the statute of limitations on their contract claim did not  

begin to run until they began experiencing permafrost-related problems.35  

                      Chief Justice Moore, writing in partial dissent, concluded that the language         

regarding the presence of permafrost in the subdivision plat meant that the Baumans  


could have discovered the existence of permafrost on the land in 1984.                                             He would have  


held that the Baumans had constructive notice of the permafrost at the time they bought  

the house because (1) "[i]t is not unreasonable to expect the Baumans to have examined  


the subdivision plat, given that the deed of trust's description specifically referenced that  

plat," and (2) the Baumans were allegedly concerned before purchasing the property that  

it might contain permafrost.37  


                     This   court,   however,   implicitly   dismissed   this   constructive   notice  



argument.            Instead, we reviewed the facts in the light most favorable to the Baumans  


and concluded that the Baumans did not discover the permafrost "until they built on the  


property and problems began to arise."                              Noting that the Baumans allegedly became  

aware of the permafrost in 1988, we held that the breach of contract action was filed  

within the six-year statute of limitations period in effect at the time.40  

                     Ranes & Shine's reasoning is similar to Chief Justice Moore's dissenting  

opinion  and  is  not  supported  by  our  holding  in  Bauman .    If  we  had  construed  the  

           35        Id. at 828.

           36        Id. at 831 (Moore, C.J., dissenting).

           37        Id.

           38        Id. at 828.  

           39        Id.  

           40        Id.  

                                                                  -14-                                                             7003

----------------------- Page 15-----------------------

information in the subdivision plat as being sufficient to put the Baumans on inquiry  

notice, we would have needed to determine whether the Baumans undertook an inquiry  


and whether the inquiry was reasonable.                     Our not doing so in the face of Chief Justice  

Moore's  dissent  on  this  particular  point  demonstrates  our  implicit  rejection  of  the  

argument Ranes & Shine advances here.  

                            b.	      Public        policy       weighs        against        holding        that      a  

                                     misrepresentation victim is on constructive notice of the  

                                     information in publicly recorded financing statements for  

                                     the purposes of the statute of limitations analysis.  



                   A UCC financing statement is intended to provide notice to the world of a  


                                                                 The notice protects the party who obtains  

secured party's interest in specific collateral. 

the  security  interest,  it  also  protects  those  who  consider  dealing  with  the  debtor  by  


helping a potential creditor understand where it would stand  in  the order of priority  



among other creditors and by helping it take appropriate action to protect its interests. 

                   But a financing statement is not intended to shield a tortfeasor from the  

consequences of his misrepresentations.  "The recording laws establish a priority as  

between innocent claimants to the same property or right; they are not intended to give  


                                                                                          Any other rule would  

security to the perpetrators of fraud as against their victims." 

         41        See Cameron v. State         , 822 P.2d 1362, 1367 (Alaska 1991) (discussing the  

third part of the discovery rule analysis as stated in Pedersen v. Zielski , 822 P.2d 903,  

908 (Alaska 1991)).  

         42        68A AM .  JUR .  2D Secured Transactions  216 (2015).  

         43       Id.  

         44       Larabee v. Eichler , 271 S.W.3d  542, 547  (Mo. 2008)  (en  banc) (emphasis  


added) (quoting Dreckshage v. Cmty. Fed. Sav. & Loan Ass'n , 555 S.W.2d 314, 319-20  

(Mo.  1977)  (en  banc)).    Although  Larabee  involved  a  real  estate  transaction,  we  

conclude the same rationale is true for UCC financing statements.  See id. at 544-45.  

                                                         -15-	                                                   7003

----------------------- Page 16-----------------------

reward the party that convincingly misrepresents the status of his title by relieving him                       

of liability once the statute of limitations has run without any indication to his victim that              

there is a need to undertake additional investigation.  We see no convincing reason to   

adopt such a rule.  


                    The potential collateral consequences of extending the notice a financing  

statement  gives  beyond  the  realm  of  secured  transactions  also  give  us  pause.    For  


example, our case law establishes that a plaintiff must prove that he justifiably relied on  


                                                                                                 If we adopted Ranes &  

a defendant's incorrect statements to prove misrepresentation. 

Shine's broad constructive-notice argument, it is unlikely that any misrepresentation  

regarding ownership could be justifiably relied upon when a contradictory recorded  

document  exists:    the  misrepresentations  would  always  be  belied  by  the  publicly  

recorded documents of which the plaintiff would be deemed to have constructive notice.  

Nothing in our case law suggests such a result, and we decline to endorse it here.  


                    2.	       The superior court did not commit clear error when it set the  

                              inquiry-notice date.  


                    The parties do not dispute that Timmerman and  Ranes agreed to settle  

MacDonald Miller's outstanding debt in October 2005.  Nor is there any dispute that  


First National initially contacted Timmerman in the summer of 2010.  MacDonald Miller  

brought its third-party complaint in September 2010.  The superior court found that  

MacDonald Miller's causes of action did not accrue at the time of the 2005 agreement  

based   primarily   on   Ranes's   and   Timmerman's   lack   of   commercial   financing  


sophistication and Ranes's affirmative representation to Timmerman that Ranes & Shine  


owned clear title to the equipment. Instead, the court found that the statutes of limitation  

began to run when First National contacted Timmerman.  

          45        Reeves v. Alyeska Pipeline Serv. Co. , 56 P.3d 660, 670 (Alaska 2002).  

                                                              -16-                                                             7003  

----------------------- Page 17-----------------------

                         Ranes  &  Shine  argues  that  the  superior  court  erred  in  finding  that  the  

 statutes of limitation began to run upon First National's 2010 contact with Timmerman.  


Ranes & Shine asserts that the information known to MacDonald Miller at the time of  


the  2005  transaction  put  it  on  inquiry  notice  in  October  2005,  making  its  lawsuit  


                         We  have  reviewed  the  record  in  this  appeal  with  Ranes  & Shine's  

 arguments in mind and find no clear error.  Timmerman and Ranes both testified that  

they believed Ranes & Shine owned clear title to the equipment.  Timmerman and Ranes  


 also both testified that they did not know about UCC financing statements until this case.  

The superior court specifically found Timmerman credible on this point, while noting  

that both Timmerman and Ranes lacked commercial sophistication.  

                         While Timmerman appears to have known that a bank may have been  


involved in financing Ranes & Shine's building, Timmerman also claimed he believed  


that the Embleys had put a substantial amount of their own money into the project.  The  

 superior court apparently credited this testimony because it later explicitly referred to the  


Embleys'  investment  in  Ranes  &  Shine  as  one  explanation  for  why  Timmerman  

reasonably relied on Ranes's representation that Ranes & Shine owned clear title to the  



                          We conclude that the superior court did not commit clear error in finding  


Timmerman was not on inquiry notice at the time of the sale.  These facts and findings  

             46          Ranes & Shine argues this point in two different contexts:                                                      (1) the denial  

of its motion for summary judgment; and (2) the superior court's findings after trial.                                                                      We  

 address only the latter here.  The superior court denied Ranes & Shine's motion, at least   

 as to the misrepresentation claim, because it found there were genuine issues of material               

 fact.  It then held a trial.                  We will not review an order denying summary judgment after   

there has been a subsequent trial on                                    the merits of the facts at issue in                               the  summary  

judgment proceedings.  Larson v. Benediktsson , 152 P.3d 1159, 1170 (Alaska 2007).  

                                                                              -17-                                                                       7003

----------------------- Page 18-----------------------

provide sufficient support for the court's decision even in the face of contrary evidence.  


Thus, we affirm the court's finding that Timmerman was not on inquiry or actual notice  


until contacted by First National.  Because MacDonald Miller filed its claims against  

Ranes & Shine within two years of that contact, its claims were timely.  


          B.	       The   Misrepresentation   Claim   Against   Ranes   In   His   Individual  

                    Capacity Should Not Have Been Dismissed.  

                    MacDonald  Miller  asserted  its  misrepresentation  claim  against  both  


Ranes & Shine and Ranes in his individual capacity.  While the superior court orally  


ruled in MacDonald Miller's favor and specifically discussed Ranes & Shine's liability,  

it did not address Ranes's individual liability.  That issue first arose after trial when  


MacDonald Miller submitted a proposed final judgment including language dismissing  


the  claim  against  Ranes  individually.                   Ranes  &  Shine  objected  to  this  part  of  the  


proposed final judgment.  Despite Ranes & Shine's specific objection to this language,  

the  superior  court  adopted  the  proposed  final  judgment  as  its  order  without  any  

discussion of why it dismissed the claims against Ranes.  

                    Ranes  &  Shine  argues  that  the  superior  court  erred  in  dismissing  the  


misrepresentation claim against Ranes.  Ranes & Shine argues that an agent may be held  


liable  to  a  third-party  for  the  agent's  negligence,  and  asserts  that  it  was  Ranes's  

misrepresentations that gave rise to MacDonald Miller's claims.  MacDonald Miller  


argues that Ranes was not individually liable because Ranes was Ranes & Shine's agent  

acting on the company's behalf.  These arguments present questions of law which we  

review de novo.47  

          47       Matanuska Elec. Ass'n v. Chugach Elec. Ass'n , 152 P.3d 460, 465 (Alaska                    

2007) (reviewing questions of law de novo).  

                                                             -18-	                                                         7003  

----------------------- Page 19-----------------------

                    Our case law indicates that an agent's liability depends on the type of claim  



asserted.         "The law is well established that in the event of negligence by a disclosed  


agent acting within the scope of his authority the agent may be held individually liable  



to a third party."           But for breach of contract claims "officers of a corporation will not  


ordinarily be held personally liable for contracts they make as agents of the corporation"  


if they disclose their agency and the existence of the corporation.                                    Thus, an agent may  


be held individually liable for negligence the agent commits, but not, in the majority of  

circumstances, for breach of contract.  


                    The  only  claim  MacDonald  Miller  asserted  against  Ranes  on  which  

MacDonald Miller prevailed was its misrepresentation claim.  It is undisputed that Ranes  


was the person who misrepresented the status of title to the equipment, and it is through  


Ranes's misrepresentation that Ranes & Shine also became liable for misrepresentation.  


The case law discussed above compels the conclusion that Ranes would be individually  

liable for tortious acts he individually committed while acting as an agent for Ranes &  


Shine - he thus can be held individually liable for the misrepresentation he made.  An  


agent, even a corporate officer or director, is not cloaked with tort immunity because he  


was acting in the course and scope of his employment when he  committed  the tort.  

          48        We note that the briefing in this case assumes that Ranes was acting as  

Ranes & Shine's agent during his negotiations with Timmerman.  

          49        Austin  v.  Fulton  Ins.  Co. ,  498  P.2d  702,  704  (Alaska  1972);  see  

11 FLETCHER  CYCLOPEDIA  OF  THE  LAW  OF  CORPORATIONS   1135 (2014) ("It is the  

general rule that an individual is personally liable for all torts the individual committed,  


notwithstanding the person may have acted as an agent or under directions of another.");  


see also 18B AM .   JUR .   2D  Corporations  1629 (2015) ("If . . . a director or officer   

commits or participates in the commission of a tort, whether or not it is also by or for the  

corporation, he or she is liable to injured third persons . . . .").  

          50        Jensen v. Alaska Valuation Serv., Inc. , 688 P.2d 161, 162-63 (Alaska 1984).  

                                                               -19-                                                         7003

----------------------- Page 20-----------------------

Therefore, we hold it was error to dismiss the misrepresentation claim asserted against                                

Ranes in his individual capacity.  

           C.	        The Superior Court Did Not Abuse Its Discretion When It Amended                           

                      The Pleadings Sua Sponte.  

                      While  issuing   its  oral   decision,   the  superior  court   commented   that  it  

believed Timmerman was the wrong plaintiff and that the real party   in   interest was  

MacDonald Miller.  Finding that "the case was tried on the basis [of] what happened to             

MacDonald Miller and . . . the appropriate treatment of that," the court amended the                                       

pleadings sua sponte to substitute MacDonald Miller as the plaintiff.  The court further   

found  that  there  was  no  prejudice  to   Ranes   &  Shine  as  a  result  of  the  amendment.  

Ranes & Shine argues that this decision constituted an abuse of discretion.  


                      We disagree.  A trial court has broad power to conform the pleadings to the  


evidence  actually  presented.                         Alaska  Rule  of  Civil  Procedure  15(b)  provides  that  

"[w]hen issues not raised by the pleadings are tried by express or implied consent of the  


parties, they shall be treated in all respects as if they had been raised in the pleadings."52  


Nothing in Civil Rule 15(b) prohibits the superior court from amending the pleadings  

sua  sponte.    "Application  of  [Civil  Rule  15(b)]  is  appropriate  .  .  .  when  evidence  


supporting the amendment was offered at trial . . . with the opposing party's express or  

                                   53  "In determining implied consent, prejudice to the party opposing  

implied consent . . . ." 

amendment is relevant."54  

           51         See Alaska R. Civ. P. 15(b).  

           52         Id.  

           53         Alderman v. Iditarod Props., Inc. , 32 P.3d 373, 396 (Alaska 2001).  

           54         Id.  (citing 6A CHARLES ALLAN  WRIGHT , ARTHUR R. MILLER  &  MARY KAY  


KANE , FEDERAL PRACTICE AND PROCEDURE   1493 (2d ed. 1990)).  

                                                                     -20-	                                                             7003

----------------------- Page 21-----------------------

                   Reviewing  the  circumstances  here,  we  find  no  abuse  of  discretion.55  


Timmerman testified that he was MacDonald Miller's sole owner.  He also testified that  

when  he  entered  into  the  contract  with  Ranes  he  was  representing  himself  and  his  

company.  Part of the agreement he entered into with Ranes involved MacDonald Miller  

forgiving the remaining balance owed for work MacDonald Miller had done on Ranes &  

Shine's building.  Although Timmerman paid the additional $18,000 with a personal  


check and not a corporate check, he testified this was only a matter of convenience.  We  

also  note  that  Ranes  &  Shine  occasionally  referred  to  MacDonald  Miller  as  if  


MacDonald Miller were the party asserting claims against it and that Ranes & Shine's  

defense does not appear to have been predicated on Timmerman being an improper  



                   Based on the evidence presented, the way the parties tried their case, and  


the lack of prejudice to Ranes & Shine, we hold that the superior court did not abuse its  

discretion when it sua sponte amended the pleadings to substitute MacDonald Miller as  

the third-party plaintiff.  


          D.	      The Superior Court Did Not Abuse Its Discretion When It Permitted  

                   Ranes To Testify Telephonically.  


                   Leading up to the trial there was significant confusion regarding whether  


and  how  Ranes  would  testify  because he  was in  federal custody  outside  of  Alaska.  

MacDonald Miller had indicated it intended to depose Ranes telephonically, but later  


asked for a 60-day continuance to determine whether Ranes would testify at trial.  The  

superior  court  suggested  deposing  Ranes  but  also  offered  to  help  facilitate  Ranes's  

appearance at trial.  

                   A month before trial was to start, MacDonald Miller filed a witness list  

indicating  it  intended  to  have  Ranes  testify  telephonically.    Ranes  &  Shine  filed  an  



                   Cf. id. at 380 (reviewing amendment of pleadings for abuse of discretion).  

                                                            -21-                                                         7003  

----------------------- Page 22-----------------------

objection to Ranes appearing telephonically   based on MacDonald Miller's failure to  

comply with the civil rules.  On the first day of trial, the superior court ruled it would  


allow Ranes to testify telephonically and stated that, while counsel for Ranes & Shine  

"object[ed] that the I's aren't dotted and the T's aren't crossed[,] . . . in substance rather  

than form [Timmerman's motion was] compliant."  


                   Ranes & Shine appeals that decision, asserting that (1) it was prejudiced by  

the superior court's decision to permit Ranes to testify telephonically because it was  


unable to confront him with exhibits; (2) Timmerman filed the notice too close to trial;  

and (3) it was "led . . . to believe that the purpose of the sixty[-]day continuance in  


January 2013 was to facilitate the deposition of Ranes."  We review the superior court's  



decision to grant a motion to permit telephonic testimony for abuse of discretion. 


we have previously noted that procedural rules, such as those providing for telephonic  


testimony, "should be interpreted liberally in order to avoid determinations based on  


                   We hold the superior court did not abuse its discretion in permitting Ranes  

to testify telephonically.  Alaska Rule of Civil Procedure 99(a) provides that the court  


may allow a witness "to participate telephonically in any hearing or deposition for good  


cause and in the absence of substantial prejudice to opposing parties."  And in a case  

presenting similar issues, we determined that it was not an abuse of discretion for the  

superior court to undertake a good-cause analysis that considered the cost, time, and  


inconvenience of transporting a prisoner for in-person testimony.                                   We affirmed the  


superior court's finding that it would not prejudice the inmate - who was a party - to  

          56       Silvers v. Silvers, 999 P.2d 786, 789 (Alaska 2000).  

          57       Rollins v. Leibold , 512 P.2d 937, 941 n.8 (Alaska 1973).  

          58       Midgett v. Cook Inlet Pre-Trial Facility , 53 P.3d 1105, 1113 (Alaska 2002).  

                                                            -22-                                                      7003

----------------------- Page 23-----------------------


participate telephonically at trial, as opposed to being physically present in court.                                               


                    Here, the superior court made a brief good-cause finding that Ranes was  


incarcerated out of state.  The court also noted that it would work with the parties to  

address any problems arising out of Ranes's telephonic participation.  Our review of  

Ranes's testimony reveals that Ranes & Shine never requested such help or complained  

of being unable to show Ranes an exhibit.  If Ranes & Shine had asked for assistance,  


we believe the court would have tried to resolve any issues as it had previously offered  

to do.  Given that there was good cause to permit Ranes to testify telephonically and  


Ranes & Shine has not demonstrated any prejudice, we hold that the court did not abuse  

its discretion in allowing Ranes to testify telephonically.  


          E.	       The Superior Court Did Not Err When It Awarded Attorney's Fees  

                    And Costs To MacDonald Miller.  


                    Ranes & Shine also argues that the superior court abused its discretion in  


awarding  MacDonald  Miller  attorney's  fees  and  costs  because  Timmerman  -  not  


MacDonald Miller - actually incurred the charges in this case.  But any attorney's fees  

or costs Timmerman incurred were incurred for MacDonald Miller's benefit, and the  


evident unity of interests between Timmerman and MacDonald Miller that rendered  

MacDonald Miller's substitution proper similarly supports the award of attorney's fees  


                                                      Therefore, the superior court did not err when it  

and  costs  to MacDonald Miller. 

awarded MacDonald Miller's attorney's fees and costs.61  

          59	       Id .  

          60        See BP Pipelines (Alaska) Inc. v. State, Dep't of Revenue                               , 327 P.3d 185,  

192 (Alaska 2014) ("[O]ur case law has long made it clear that, regardless of how parties     

are  formally   arranged,  fees  and  costs  may  be  awarded  based  on  actual  adversity  of  




                    Ranes & Shine also appears to challenge the superior court's decision to  


                                                              -23-	                                                        7003

----------------------- Page 24-----------------------



                 We AFFIRM the superior court in all respects except its decision to dismiss  

MacDonald Miller's misrepresentation claim against Ranes in his individual capacity.  

We  REVERSE  the  dismissal  as  to  Ranes  and  REMAND  for  further  proceedings  

consistent with this opinion.  


enhance the fee award.  But we do not address that argument here because it was first  


raised in Ranes & Shine's reply brief. Sumner v. Eagle Nest Hotel, 894 P.2d 628, 632  

(Alaska 1995).  

                                                      -24-                                                7003

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