Alaska Foods, Inc. v. American Mfrs. Mut. Ins. Co.
|18 March 1971
|ALASKA FOODS, INC., an Alaska corporation, Appellant, v. AMERICAN MANUFACTURER'S MUTUAL INSURANCE COMPANY, a foreign corporation; Birmingham Fire Insurance Company of Pennsylvania, a foreign corporation; National Surety Corporation, a foreign corporation; and United States Fidelity and Guaranty Company, a foreign corporation, Appellees.
|Alaska Supreme Court
Theodore R. Dunn, of Matthews & Dunn, Anchorage, for appellant.
Daniel A. Moore, R., of Delaney, Wiles, Moore, Hays & Reitman, Inc., Anchorage, for appellees.
Before BONEY, C. J., and DIMOND, RABINOWITZ and CONNOR, JJ.
Appellant's merchandise, consisting of groceries, houseware items, clothing, drugs and miscellaneous stock, was damaged by soot and smoke in a warehouse fire in Fairbanks. The total net loss to appellant was in excess of $38,000. In this suit against insurance companies to recover for the loss, the trial judge sustained appellees' position that they were responsible for insurance coverage only to the extent of $2,500. Appellant maintains on this appeal that the judge's determination was clearly erroneous. The first question raised by appellant relates to the scope of our review of the trial judge's findings.
Civil Rule 52(a) provides in part:
Findings of fact shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses.
We have applied the clearly erroneous standard of review many times. 1 In doing so we have frequently pointed to the trial judge's opportunity to observe the demeanor of witnesses and judge their credibility, as affecting the scope of our review of his findings. 2
In this case no witnesses appeared at the trial. The case was tried entirely on the basis of written depositions, documentary evidence, and a statement of undisputed facts. Since demeanor evidence was not involved, appellant contends that we are in as good a position as the trial judge to evaluate the evidence, and therefore are not bound by the clearly erroneous standard of review.
Earlier decisions of this court suggest a basis for the practice urged by appellant. In Paskvan v. Mesich 3 and Fairbanks Publishing Co. v. Pitka 4 it was held that where nondemeanor evidence was involved, this court was in as good a position as the trial judge to determine issues of fact. 5 In the more recent case of State v. Phillips, 6 we held that 'where the trial judge's findings are based on nondemeanor sources, such as documentary evidence, deposition testimony, or transcribed testimony In these few decisions we have certainly indicated that where findings are based on nondemeanor evidence, our scope of review is different from the situation where findings may be based on the trial judge's assessment of witnesses' credibility, which he makes from hearing and seeing them in person. But we have not yet articulated precisely what the standard of review is where findings are based on documentary or other nondemeanor evidence. We do so now.
our scope of review is broader than under the clearly erroneous standard.' 7
The portion of Civil Rule 52(a) involved here is identical with a procedural rule in the federal judiciary relating to findings of fact made by the United States District Courts. 8 In interpreting that rule, where findings are based upon documentary evidence or undisputed facts, it is said that the federal courts of appeals are 'indescribably confused', and that '(e)ven within a single circuit, decisions vacillate inexplicably from one test to another.' 9
Some federal courts have taken the position that where the trial judge did not see the witnesses, the appellate court is in as good a position as the trial court to interpret the evidence, and will 'more readily' declare the trial judge's findings to be clearly erroneous. 10 This is what has been referred to as placing a 'gloss' on the rule. 11
Other federal appellate courts have gone further and held flatly that they are not bound at all the clearly erroneous standard where the evidence was not oral, and that they are free to completely disregard the trial judge's findings and make for themselves a de novo review of the evidence. 12 The decision most frequently cited in support of this approach is that of Judge Jerome Frank in Orvis v. Higgins. 13 Judge Frank stated that if the trial judge decides a fact issue on written evidence alone, the appellate court is as able as he to determine credibility, and could disregard the trial judge's finding. Judge Frank then went on to formulate different degrees of freedom of review depending upon the proportion of the evidence that was oral and the proportion that was written, including the effect that the written testimony may have had upon the credibility of the oral testimony. 14 This Then there are the courts that take the position that the words 'findings of fact shall not be set aside unless clearly erroneous' mean what they say, and that the clearly erroneous test applies to all nonjury cases, regardless of the nature of the evidence involved, whether oral, written, or both. 16 The writers principally espousing this view are Judge Clark, one of the draftsmen of the Federal Rules of Civil Procedure, 17 and Professor Charles Alan Wright in his revision of Barron and Holtzoff's work on federal practice and procedure. 18 It is pointed out by Professor Wright in 2B W. Barron and A. Holtzoff, Federal Practice and Procedure, section 1132, at 522-23, that the United States Supreme Court took this view of Rule 52(a) in its 1948 decision in United States v. United States Gypsum Co., 19 and has reiterated that position in later decisions. 20
so-called 'Frank' position on standard of review has been recommended as proper by Professor Moore in his work on federal practice and procedure. 15
The pertinent language of Civil Rule 52(a) states that '(f)indings of fact shall not be set aside unless clearly erroneous * * *.' A plain English reading of this language leads to only one conclusion-that the clearly erroneous standard of review applies to all findings of fact, regardless of the nature of the evidence they are based upon. The additional words, 'and due regard shall be given to the opportunity of the trial court to judge of the credibility of the witnesses', form a conjunctive, and not a hypothetical proposition, as Professor Wright has pointed out. 21 The rule does not establish the clearly erroneous standard of review only in those cases where the trial judge has had the opportunity to judge of the credibility of witnesses. This standard of review applies to all findings. The provision regarding the credibility of witnesses means only that when there has been oral testimony, and the trial judge has observed the witnesses in person, we must pay some deference to his judgment as to credibility to the extent that his findings are based on such oral testimony. 22 This makes sense, because until such time as we review cases, perhaps on the basis of videotaped proceedings, we cannot have the advantage that the trial judge has had of basing a judgment as to credibility on the demeanor of the witnesses that appear before him.
In a case where there has been no oral testimony, the rule still provides that In determining the meaning of 'clearly erroneous', it might be helpful to start with what it does not mean. We do not agree with the concept that we may not substitute our judgment for that of the trial judge where conflicting inferences may be drawn from the evidence by reasonable men, and the trial judge's findings are based on inferences which a reasonable man might have drawn. 23 This is basically the rule applied in jury cases to determine whether a particular issue must be submitted to he jury for determination, or whether it should be decided as a matter of law by the judge. 24 It is applied in such cases because of the historic right to trial by jury as it existed at common law, which is preserved by our constitution. 25
'(f)indings of fact shall not be set aside unless clearly erroneous.' We cannot agree with the proposition that in such a case the clearly erroneous standard has no application, and that the trial judge's findings may be simply disregarded. We must 'regard' the judge's findings, in the context of the evidence presented, in order to form a considered judgment as to whether such findings were not just erroneous, but clearly so. The question is not whether the clearly erroneous standard applies, which it obviously does, but what it means so far as our appellate review jurisdiction is concerned.
We believe such a rule should not be applied to our review of a trial judge's findings. There might be several competing inferences upon which reasonable minds could differ, which could be drawn from documentary evidence or undisputed facts. The fact that the trial judge chooses one of these inferences does not necessarily mean that we could not consider his choice clearly erroneous. 26
Nor do we agree with the suggestion that a finding which is supported by substantial evidence may not be clearly erroneous. 27 This is the rule we apply on judicial review of administrative findings. 28 But this is so because of our recognition of the respective functions of administrative agencies and the superior court, and of the deference the courts feel constrained to show to findings made by such an agency charged by law with the making of factual determinations in a particular area within the scope of executive power. 29
To limit our setting aside of a trial judge's findings to instances where there is no room for difference of opinion among reasonable men, or where there is no substantial evidence to support such findings, would too narrowly limit the scope of our review. A broader scope of review is, to use the words of Professor Moore, 'a natural and proper concomitant of...
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