Bunton v. Alaska Airlines, Inc., Supreme Court No. S-17110

• Court: Supreme Court of Alaska (US)
• Citation: 482 P.3d 367
• Docket Number: Supreme Court No. S-17110
• Parties: Tera BUNTON, Personal Representative of the Estate of Helen A. Lingley, Appellant, v. ALASKA AIRLINES, INC. and Dan Kane, Appellees.
• Decision Date: 19 February 2021

482 P.3d 367

Tera BUNTON, Personal Representative of the Estate of Helen A. Lingley, Appellant,

v.ALASKA AIRLINES, INC. and Dan Kane, Appellees.

Supreme Court No. S-17110

Supreme Court of Alaska.

February 19, 2021

As Revised on Rehearing March 31, 2021

Michael P. Nash, Law Offices of Michael P. Nash, P.C., Wrangell; Deborah A. Holbrook, Law Office of Deborah A. Holbrook, Juneau; and Mary Alice McKeen, Law Office of Mary Alice McKeen, Juneau, for Appellant.

Gregory S. Fisher and Elizabeth P. Hodes, Davis Wright Tremaine LLP, Anchorage, for Appellees.

Before: Bolger, Chief Justice, Winfree, Maassen, and Carney, Justices.

OPINION

BOLGER, Chief Justice.

I. INTRODUCTION

An employee sued her former employer for wrongful termination. The employee died, but her attorney continued to litigate, negotiate, and mediate the case for another year before informing the court or opposing counsel of her death. The superior court concluded that the attorney had committed serious ethical violations related to this delay and disqualified him from the case. Post-disqualification, the attorney filed a motion to substitute the personal representative of the employee's estate as plaintiff. The superior court issued an order dismissing the case on several grounds. We conclude that the court did not abuse its discretion by disqualifying the attorney and denying the motion for substitution he submitted. The superior court was correct to dismiss the case, as only one party remained, but we conclude that granting summary judgment in favor of the former employer and supervisor was error. The estate is not entitled to appeal the court's refusal to enforce a draft settlement agreement signed by the employee before her death and does not have standing to appeal the sanctions imposed against the attorney. But because the estate was not allowed to participate as a party, we conclude that awarding affirmative relief against it was error.

II. FACTS AND PROCEDURAL HISTORY

Helen Lingley worked for Alaska Airlines in Juneau as an airport customer service representative beginning in 1997. In February 2012 Alaska Airlines terminated Lingley's employment, citing violations of company rules and policies. Lingley filed a complaint against Alaska Airlines and her supervisor, Dan Kane, alleging wrongful termination and breach of the implied covenant of good faith and fair dealing. The superior court dismissed the complaint, but we reversed on appeal, holding that Lingley should have been allowed to amend her wrongful termination and potential age discrimination allegations.¹ We remanded the case to the superior court in May 2016.²

In June 2016 Alaska Airlines offered Lingley $20,000 in exchange for a "standard settlement agreement and release." Lingley's attorney, Fred Triem, prepared a settlement agreement without consulting Alaska Airlines, and Lingley signed it on June 22. After Triem tendered the agreement, Alaska Airlines countered that his submission was not "Alaska Airlines' standard settlement agreement" and drafted a "Confidential Settlement and Release Agreement," which it sent to Triem on June 27.

But Lingley never had a chance to review the proposed settlement. She died on June 24, having suffered from terminal metastatic lung cancer

for more than a year. Triem did not inform the court or Alaska Airlines of her death. Unaware that Lingley had died, Alaska Airlines continued settlement negotiations and discovery preparation. At one point Alaska Airlines offered to use Triem's settlement agreement, with the addition of federally mandated terms and a more thorough waiver of claims. Triem rejected the proposal.

On August 1 Triem filed a motion to enforce the settlement agreement that Lingley had signed on June 22.³ On August 11 Triem filed a third amended complaint, alleging breach of the settlement agreement as a new claim against Alaska Airlines, again without informing the court or Alaska Airlines of Lingley's death. After oral argument the superior court denied the motion to enforce the signed settlement agreement and granted Alaska Airlines' cross-motion for attorney's fees. The superior court noted the parties' inability to reconcile their competing versions of a standard settlement agreement, concluding that this meant that they had not reached the "meeting of the minds" required to generate an enforceable contract.⁴ The superior court awarded Alaska Airlines $5,000 in fees for Triem's "unreasonable and vexatious" behavior, imposed jointly and severally on both Lingley and Triem.⁵

In February 2017 Alaska Airlines moved for a settlement conference, and the attorneys participated in mediation throughout April 2017. According to Alaska Airlines' counsel the parties appeared close to an accord, but Triem requested that the attorneys sign an agreement instead of the clients and that the settlement funds be deposited in his trust account as a lump sum without withholding taxes. When Alaska Airlines refused, the mediation concluded without a settlement being reached. On May 1 Triem informed Alaska Airlines of Lingley's death and filed a Notice of Death stating that Triem had been unaware of Lingley's death until that day.

Alaska Airlines immediately filed a Notice of Suggestion of Death. Alaska Airlines then moved to disqualify Triem from representing any interested person in the case, which the superior court granted. Alaska Airlines also moved for sanctions, dismissal, and summary judgment.

One month after the disqualification order, Triem moved to substitute the personal representative for Lingley's estate (the Estate) as plaintiff in Lingley's stead.⁶ Alaska Airlines opposed the motion on the grounds that "Fred Triem cannot represent the Estate or any interested person because he has already been disqualified." It renewed its motions for dismissal and summary judgment, arguing that Triem's "egregious litigation misconduct" warranted dismissal and that no issues of material fact remained.⁷

The superior court held oral argument on August 22 to address the pending motions. The Estate's lawyer, Deborah Holbrook, entered a limited appearance to address the "matters currently scheduled for oral argument." She asked that the case be allowed to go forward and that Triem not be disqualified because the Estate could not afford or identify a different lawyer.⁸ Holbrook stated:

Mr. Triem had and has the Estate's authorization to seek substitution of the Estate for the Plaintiff Helen Lingley in the wrongful termination case. Both Helen Lingley and the personal representative were very pleased with Mr. Triem's professional representation in the case ....

....

... In fact, the Estate wants to state very clearly on the record that if the court ... maintains its ruling that the Estate doesn't have the right to choose its own attorney and must hire someone other than Mr. Triem, that that's basically going to be handing down a death sentence to the Estate's pursuit of the wrongful termination case ....

She noted that Triem had taken Lingley's case pro bono, that it was unlikely any other attorney would take the case, and that she was not "willing to work the hundreds of unpaid hours that have been ... required in this case." And she concluded that "the Estate is knowingly and voluntarily willing to waive whatever conflict of interest the court believes exists between the Estate and Mr. Triem."

In January 2018 the superior court issued an omnibus order denying the motion for substitution and dismissing the case. It concluded that Triem's disqualification clearly denied him the authority to move for substitution. The court concluded:

Because Triem had no authority to file the motion to substitute, its filing was ineffective as to its purported purpose. No valid motion for substitution of a party was filed within the 90 days contemplated by Rule 25. The Motion for Substitution is denied on that basis and pursuant to Rule 25, this matter may be and is dismissed. (Emphasis omitted.)

As an independent basis for dismissal, the court also noted that Lingley's "demise ... without preserving her testimony in any way ... left [Lingley] and her estate unable to prove her various claims."

Finally, the superior court also granted summary judgment to Alaska Airlines and its supervisor. The court found that, "as a matter of law," Lingley had not been wrongly terminated because it was undisputed that she violated a company policy. The court stated that Lingley had proffered only a "generalized pleading" in support of her claims for wrongful discharge, age discrimination, and economic discrimination, which "lack[ed] any foundational basis." The court noted that the motion for summary judgment had been filed before Triem had been disqualified but, as Triem had not filed any response, Lingley had effectively not opposed the motion. Finding "no genuine issue of fact regarding the unopposed motion for summary judgment," the superior court concluded that Alaska Airlines was entitled to judgment as a matter of law.

Alaska Airlines filed a proposed judgment naming the Estate as plaintiff; Triem filed an opposition, arguing that the court could not enter a judgment against the Estate after ruling that it was not a party. But the superior court rejected Triem's opposition because "Triem no longer represents [Lingley], having been disqualified from doing so."

On March 27, 2018, the superior court issued a final judgment in favor of Alaska Airlines. Although Alaska Airlines was declared the prevailing party, the court ruled that it could recover "$0" from the Estate and instead assessed costs and attorney's fees "against counsel." Alaska Airlines sought an award of $225,607.60, representing fees and costs from June 2016 through August 2017 and a $50,000.00 penalty under Alaska Civil Rule 95(b). It argued that the Estate should be jointly liable based on Triem's contention that Lingley had authorized him to "act on her behalf as he saw fit, without having to communicate or give notice to her regarding his...