Alaska General Alarm, Inc. v. Grinnell

• Decision Date: 21 April 2000
• Docket Number: No. S-8318.,S-8318.
• Parties: ALASKA GENERAL ALARM, INC., Petitioner, v. GRINNELL, a Delaware corporation, Respondent.
• Court: Alaska Supreme Court

1 P.3d 98

ALASKA GENERAL ALARM, INC., Petitioner, v. GRINNELL, a Delaware corporation, Respondent.

No. S-8318.

Supreme Court of Alaska.

April 21, 2000.

Patrick J. McKay and Michael R. Wirschem, Law Offices of Patrick J. McKay, and A. Robert Hahn, Jr., Anchorage, for Petitioner.

Robert P. Blasco, Robertson, Monagle & Eastaugh, P.C., Juneau, for Respondent.

Kenneth M. Gutsch, Richmond & Quinn, Anchorage, for Amicus Curiae The Defense Counsel of Alaska.

Mauri Long and Kristen D. Pettersen, Dillon & Findley, P.C., Anchorage, for Amicus Curiae Alaska Academy of Trial Lawyers.

Raymond M. Funk, Assistant Attorney General, Fairbanks, and Bruce M. Botelho, Attorney General, Juneau, for Amicus Curiae State of Alaska.

Before MATTHEWS, Chief Justice, EASTAUGH, FABE, and BRYNER, Justices.

OPINION

BRYNER, Justice.

I. INTRODUCTION

The superior court held that a third-party defendant sued for apportionment of fault under AS 09.17.080 after the statute of limitations on the plaintiff's underlying personal injury claim had run may nonetheless be liable to the plaintiff for money damages. Because we find that the statute of limitations for tort actions does not apply to claims for equitable apportionment, we affirm.

II. FACTS AND PROCEEDINGS

On June 4, 1993, Cheryl McIntire, Yvonne Dann, and Morgan Coggswell (hereinafter "McIntire") were allegedly injured when halon was discharged from a fire protection system in the Boney Courthouse in Anchorage. At the time, technicians from Grinnell Corporation and Alaska General Alarm, Inc., were examining the system to detect the cause of recent false alarms.

McIntire sued Grinnell on December 2, 1994. Grinnell answered the complaint on January 19, 1996, and, on August 13, 1996, filed a third-party complaint against Alaska General Alarm, claiming that it was responsible in whole or part for any injuries sustained by McIntire. Alaska General Alarm answered and filed a motion for partial summary judgment, asserting the defense of statute of limitations because the third-party complaint was filed more than two years after the halon incident.¹ The superior court denied the motion, holding that the statute of limitations did not bar a third-party complaint for apportionment of damages. Alaska General Alarm petitioned for review, and we granted the petition.²

III. DISCUSSION

A. Standard of Review

The sole issue presented is whether the superior court erred in holding that a third-party defendant sued for apportionment of fault under AS 09.17.080 after the statute of limitations on the underlying claim had run may still be liable to the plaintiff for money damages. In resolving questions of statutory construction, this court applies its independent judgment³ and adopts "the rule of law that is most persuasive in light of precedent, reason, and policy."⁴

B. Background of AS 09.17.080

Before 1986, Alaska followed the rule of joint and several liability, which allowed a plaintiff to recover all damages from one named defendant; that defendant could then seek reimbursement from other at-fault parties by filing an action for contribution within one year of judgment.⁵ The statute at issue in this case repealed that joint and several liability scheme; enacted by voter initiative,⁶ AS 09.17.080 provided that a plaintiff can recover from each party only in accordance with that party's percentage of fault.⁷ In striking down the existing scheme of joint and several liability, the voter initiative repealed AS 09.16, which had set out a contribution procedure that allowed defendants, after entry of judgment against them, to seek pro rata reimbursement from culpable third parties.⁸ But the newly enacted statute providing for apportioned liability established no comparable procedure to allow named defendants to allocate fault to potentially responsible parties that the plaintiff had not sued.

We addressed this omission in Benner v. Wichman.⁹ The defendant in Benner argued that the superior court erred by not instructing the jury that it could apportion liability for a construction accident among all those responsible for the plaintiff's injuries, including the plaintiff's employer and the general contractor, who were not parties to the lawsuit.¹⁰ We rejected this broad reading of the statute, holding that "party" within the meaning of AS 09.17.080 was restricted to "parties to the action, including third party defendants and settling parties."¹¹ We also concluded—in the absence of any explicit statutory procedure—that equity demanded that defendants be allowed to mitigate their damages by filing third-party claims against other potentially responsible persons.¹²

The following year, we adopted Alaska Civil Rule 14(c) to establish the procedure that defendants could use for equitable apportionment of damages to third parties who had no direct liability to the defendant but were potentially responsible to the plaintiff. Rule 14(c) provides that a defendant, as a third-party plaintiff, may join any party whose fault may have been a cause of the damages claimed by the plaintiff.¹³ The rule specifies that a judgment may be entered against the third-party defendant in favor of the plaintiff even in the absence of a direct claim.¹⁴

C. The Superior Court Did Not Err in Holding that the Statute of Limitations for Tort Actions Is No Bar to Equitable Apportionment.

Alaska General Alarm argues that the superior court's ruling allowing Grinnell to implead it as a third-party defendant with potential liability to McIntire even though the statute of limitations had run was based on a misreading of Benner and a misapplication of Civil Rule 14(c). The company contends that it should not be liable to the plaintiff as a third-party defendant if the plaintiff cannot sue it directly.

The superior court's ruling was based on two premises: (1) our holding in Benner mandates that fault only be apportioned among parties to an action; and (2) under Civil Rule 14(c), a party joined for apportionment of fault is also liable to the plaintiff for damages. The superior court concluded on the basis of these authorities that a third party cannot be joined solely to reduce the percentage of fault attributable to a named defendant. Thus, the superior court held that equity demanded that liable defendants be permitted to sue third parties for apportionment of fault after the statute of limitations on the underlying claim has expired.

We agree that it was implicit in our holding in Benner that fault can only be apportioned under AS 09.17.080 to parties who may be liable to the plaintiff for money damages, including third-party defendants and settling parties.¹⁵ Civil Rule 14(c) effectuates this purpose by allowing defendants to implead third-party defendants who then may become liable to the primary plaintiff.¹⁶ Although AS 09.17.080 does not address the limitations period, construing the statute to require that defendants file third-party claims for apportionment within the statute of limitations governing the plaintiff's underlying claim would give plaintiffs exclusive control over which at-fault parties shared liability. This would defeat the initiative's purpose to allocate damages not to one named defendant but to all those at fault.¹⁷ There is no express statutory language or legislative history supporting this inequitable result.

1. Allowing empty chair defendants would contravene Benner v. Wichman and the purpose of AS 09.17.080.

In Benner we held—after noting that a defendant's right to contribution from other at-fault parties did not survive the Tort Reform Initiative—that "equity requires that defendants have an avenue for bringing in others who may be liable to the plaintiff."¹⁸ To describe this remedy, we chose the term "equitable apportionment" as opposed to "equitable indemnity" to convey that we were vindicating not just the right of defendants to have damages apportioned in accordance with their fault, but the commensurate duty of responsible third parties to pay plaintiffs.¹⁹ The purpose of limiting fault allocation to joined parties—more specifically, to parties potentially liable to the plaintiff, rather than "empty chair" defendants—was to ensure that fault was accurately litigated.²⁰ As explained in the commentary to the Uniform Comparative Fault Act, which we relied on in Benner, a fair apportionment of fault requires adversarial fact-finding:

The limitation to parties to the action means ignoring other persons who may have been at fault with regard to the particular injury but who have not been joined as parties. This is a deliberate decision. It cannot be told with certainty whether that person was actually at fault or what amount of fault should be attributed to him, or whether he will ever be sued, or whether the statute of limitations will run on him, etc. An attempt to settle these matters in a suit to which he is not a party would not be binding on him. Both plaintiff and defendants will have significant incentive for joining available defendants who may be liable. The more parties joined whose fault contributed to the injury, the smaller the percentage of fault allocated to each of the other parties, whether plaintiff or defendant.²¹

The risk entailed in shifting blame to an "empty chair" is well-illustrated by the circumstances of this case: if the statute of limitations were a bar to Alaska General Alarm's liability and it were impleaded for purposes of fault allocation alone, Grinnell would have every motivation to blame Alaska General Alarm for McIntire's injuries. But Alaska General Alarm, facing no liability, would have little incentive to defend itself. The burden thus would fall on McIntire to demonstrate that Grinnell was at fault and that Alaska General Alarm was not. This burden shifting would encourage defense counsel to wait until the statute of limitations expired to join third parties, and would frustrate recovery by plaintiffs.²²

This result could be avoided by...