Long v. Holland America Line Westours

• Decision Date: 13 July 2001
• Docket Number: No. S-8726.,S-8726.
• Citation: 26 P.3d 430
• Parties: Dorice LONG, Appellant, v. HOLLAND AMERICA LINE WESTOURS, INC., a Washington Corporation, Appellee.
• Court: Alaska Supreme Court

26 P.3d 430

Dorice LONG, Appellant, v. HOLLAND AMERICA LINE WESTOURS, INC., a Washington Corporation, Appellee.

No. S-8726.

Supreme Court of Alaska.

July 13, 2001.

Thomas L. Melaney, Anchorage, for Appellant.

Robert P. Blasco, Robertson, Monagle & Eastaugh, Juneau, for Appellee.

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

OPINION

BRYNER, Justice.

I. INTRODUCTION

Dorice Long sued for personal injuries she sustained during a Holland America tour in Alaska. She filed the suit well within the time limits of Alaska's tort statute of limitations but beyond the limit specified by a clause in her tour contract. Honoring the contract's choice of Washington law, the superior court upheld the limitations clause and dismissed Long's suit as untimely. We reverse. Because this case raises fundamental policy issues that are materially more interesting to Alaska than Washington, Alaska law applies. Under our law, the limitations clause was unenforceable without a showing of prejudice.

II. FACTS AND PROCEEDINGS

In the spring of 1994 Dorice Long, a Florida resident, booked a tour of Alaska with Holland America Line Westours, Inc., (Holland America) through a Florida travel agent. The tour, scheduled to begin on June 1, 1994, included eleven days of land touring before Long was to board a Holland America vessel for a cruise down the Inside Passage in Southeast Alaska. Long received her tickets and other tour information a few days before her scheduled departure. The packet of information included the tour contract. The tour contract contained a choice of law provision stating that, except when maritime law applied, the contract would be construed according to Washington state law.

While touring in Kotzebue on June 10, Long fell and sustained serious injuries outside a museum operated by NANA Regional Corporation, Inc. Long was transported to Anchorage for treatment of her injuries.

Long's attorney notified Holland America in writing of a possible claim by Long against Holland America ten and one-half months after her injury. Sixteen months after her injury, Long filed a complaint against Holland America and NANA Regional Corporation, Inc., alleging negligence on the part of both defendants.

Holland America moved for summary judgment, arguing that the terms of the tour contract barred Long's claims. It noted that the tour contract set a specific limitations period, barring all claims for personal injury unless the claimant provided notice to Holland America within six months of the alleged injury and filed suit within one year after the trip was completed. Because Long had not complied with these terms, Holland America requested that the court dismiss Long's claims.

The superior court agreed with Holland America and granted summary judgment, dismissing all of Long's claims against Holland America.¹ Long appeals.

III. DISCUSSION

A. Standard of Review

This court reviews appeals from summary judgment de novo.² Summary judgment will be affirmed if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law.³ Here, Long does not dispute any material facts, but challenges the superior court's ruling as a matter of law.

B. The Contractual Limitations Provision Is Not Enforceable.

Long asserts that the trial court erred when it held that the contract's limitations provision is governed by Washington law and is enforceable in Alaska. Long argues that Alaska's interest in having uniform statute of limitation periods is greater than Washington's interest in enforcing contractual provisions in Alaska and that the limitation provision of the contract is unenforceable under Alaska law. Holland America responds that the choice-of-law provision in the contract is enforceable and that Washington law would uphold the limitations provision. We agree with Long's conclusion.

1. Alaska law is applicable.

The first issue is whether the trial court correctly applied Washington law, as specified by the contract's choice-of-law provision. When deciding choice of law issues, we have in the past turned to the Restatement (Second) of Conflict of Laws (Restatement) for guidance.⁴ Where, as here, the parties' contract includes a choice-of-law provision, Restatement § 187 applies. Section 187 provides, in relevant part:

(1) The law of the state chosen by the parties to govern their contractual rights and duties will be applied if the particular issue is one which the parties could have resolved by an explicit provision in their agreement directed to that issue.

(2) The law of the state chosen by the parties to govern their contractual rights and duties will be applied, even if the particular issue is one which the parties could not have resolved by an explicit provision in their agreement directed to that issue, unless either

(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties' choice, or

(b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.⁵

The point in dispute here concerns the validity of the contractual limitations provision. Since parties cannot determine contractual validity by explicit agreement,⁶ the superior court was correct in determining that subsection (1) does not apply; neither party contests this decision.

Similarly, subsection (2)(a) does not affect the analysis here. The superior court correctly concluded that Holland America had a substantial relationship with the state of Washington because it was headquartered there and that was the location from which the contract was issued.⁷ Long does not dispute this.

Therefore, under Restatement § 187(2)(b) we should apply Alaska law only if three conditions are met: (1) Alaska's law would apply under Restatement § 188 in the absence of an effective choice of law; (2) Alaska has a materially greater interest in the issue; and (3) the application of Washington law would offend a fundamental policy of Alaska. Here, all three conditions are met.

The first condition is that Alaska's law would apply in the absence of an effective choice of law. It would. Under Restatement § 188, and in the absence of an effective choice of law by the parties, we must apply the principles of Restatement § 6 to determine which state has the most significant relationship.⁸ In doing so, we must consider the relevant policies of Alaska and Washington, giving special deliberation to the following:

(a) the place of contracting,

(b) the place of negotiation of the contract,

(c) the place of performance, [and]

....

(e) the domicil, residence, nationality, place of incorporation and place of business of the parties.⁹

The place of performance has "so close a relationship to the transaction and the parties that it will often be the state of the applicable laws";¹⁰ in this case, the place of performance is Alaska. The place of negotiation has little impact where, as here, the parties conduct negotiations from separate states by mail and telephone.¹¹ Similarly, the place of contract has little impact on the events at hand. Subsection (e), however, carries greater weight than either subsection (a) or (b). Nonetheless, we feel that the parties' domicile, residence, place of incorporation, or place of business, as listed in subsection (e), deserves less consideration than the place of contract performance.¹²

Because statutes of limitations are procedural, Alaska law, as law of the forum, governs in the absence of an effective choice of law.¹³ Additionally, there is a presumption that the "law of the state where the [personal] injury occurred" governs in the absence of an effective choice of law.¹⁴

The second requirement is that Alaska have a materially greater interest in the issue than Washington. Alaska has three interests that are materially greater than Washington's: (1) establishing uniform filing deadlines; (2) ensuring that fair compensation is available for personal injuries occurring in Alaska; and (3) deterring negligent future conduct in the state.

Alaska has an undeniably strong interest in establishing uniform filing deadlines.¹⁵ Uniform deadlines promote predictability for plaintiffs, defendants, and other interested parties alike.¹⁶ Equally strong is Alaska's interest in providing victims of negligence who sustain personal injuries within the state access to a legal system that affords them a fair opportunity to seek redress from the negligent party.¹⁷ So too is Alaska's interest in promoting public safety by deterring future negligent conduct within the state.¹⁸ In contrast, the State of Washington's only interest in the issue at hand is in protecting resident corporations' contract rights relating to torts that they commit in other states. While this interest is certainly not insubstantial, we find it decidedly weaker than Alaska's interests. We hold, then, that Alaska's interests are materially greater than Washington's.¹⁹

The choice of law in this case thus turns on whether the third condition of Restatement § 187(2)(b) is met—whether enforcing Washington law would offend a fundamental policy of the State of Alaska. In our view, enforcing Washington law would offend the fundamental policies underlying the three Alaska interests that we have just identified as being materially greater than Washington's interest in the issue at hand—enforcing uniform standards for commencing litigation in Alaska's courts, ensuring Alaska personal injury victims reasonable access to the Alaska legal system, and promoting public safety.

Uniform application of our statutes of limitations involves fundamental policy concerns.²⁰ Statutes of...