Maddox v. Hardy

• Decision Date: 11 July 2008
• Docket Number: No. S-12243.,No. S-12246.,S-12246.,S-12243.
• Citation: 187 P.3d 486
• Parties: Russell MADDOX, dba R & R Dog Boarding, Appellant/Cross-Appellee, v. Penny HARDY and Dorene Lorenz, Appellees/Cross-Appellants.
• Court: Alaska Supreme Court

187 P.3d 486

Russell MADDOX, dba R & R Dog Boarding, Appellant/Cross-Appellee, v. Penny HARDY and Dorene Lorenz, Appellees/Cross-Appellants.

No. S-12246.

No. S-12243.

Supreme Court of Alaska.

July 11, 2008.

Peter R. Ehrhardt, Kenai, for Appellant/Cross-Appellee.

Robert C. Erwin, Robert C. Erwin, LLC, Anchorage, for Appellee/Cross-Appellant Penny Hardy.

Douglas J. Serdahely, David J. Mayberry, Patton Boggs LLP, Anchorage, for Appellee/Cross-Appellant Dorene Lorenz.

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

OPINION

MATTHEWS, Justice.

I. INTRODUCTION

This appeal involves a controversy surrounding a large fire started by Dorene Lorenz and other persons for the purpose of clearing rubbish. Russell Maddox, a next-door neighbor, sued Lorenz and other parties he thought were involved for damages the fire caused to his home-based business and property. Lorenz counterclaimed, primarily stating claims based on Maddox's behavior toward her after the fire. The superior court dismissed Lorenz's counterclaims and all of Maddox's claims except his nuisance action. At trial, the jury found in favor of Maddox and awarded him compensatory and punitive damages.

Maddox appeals the superior court's refusal to impose joint and several liability on the alleged owner of the property where the fire took place. We affirm because this person did not own the property during the relevant time period. Lorenz appeals the jury's findings and its award of damages. She also appeals the dismissal of her counterclaims. We affirm the jury's verdict, but reverse the dismissal of most of her counterclaims.

II. FACTS

Russell Maddox owns a home in Seward. In 2000 he began a home-based dog boarding business called R & R Dog Boarding. According to Maddox, by late 2001 business was strong and his kennels were full.

On November 24 and 25, 2001, Dorene Lorenz decided to clear debris from a piece of property neighboring Maddox's land. The ownership of this property at the time of the fire is contested in this appeal.¹ Wilbur "J.R." Thomas Jr., a family friend of Lorenz, drove his excavator to the property. Using the excavator, he began pulling and crushing debris, piling it in a common area about fifty feet away from Maddox's fence.² While the parties dispute the pile's exact contents, it likely included, among other things, a Quonset hut, a trailer, a storage shed, a school bus, old cars, furniture, and wood.

Concerned by this activity, Maddox came over to the property and asked Lorenz what was happening. Lorenz told him that she was cleaning up the property and, according to Maddox, "made fun of" him for his concern. Maddox testified that, as he was leaving the property, he smelled gasoline and the pile burst into flame. Thomas added more refuse to the pile as the fire burned. The wind was in the direction of Maddox's property.

The parties dispute the ferocity and size of the fire, although there is general agreement that it was large. Maddox testified that flames came over his fence. He further testified that embers landed on his property and that occasional small explosions threw pieces of metal onto his property. Maddox spent much of the evening stomping out embers that fell on the straw he used for his dogs. The November 24th fire lasted into the night. The following day, Thomas returned and continued his work cleaning the property, burning debris in a second location.

After the fires, Maddox's property was covered with ash. Maddox contacted the Alaska Department of Environmental Conservation (ADEC) and complained about the fire. The ADEC told Maddox to take samples of the ash on his property and have them sent for testing. Maddox did so, paying for the testing with his funds. The testing revealed elevated levels of lead. After these results, the ADEC and the Alaska Department of Health and Social Services became involved, as did the federal Environmental Protection Agency (EPA). The agencies conducted their own testing — the parties dispute the interpretation of the results — and recommended cleanup procedures.

In light of the testing results, Maddox closed his dog boarding business and began efforts to clean his property. Maddox reopened his business two years later, in January 2004. Maddox explained the delay by stating that the ADEC and EPA told him to leave his property alone so they could assess the contamination and clean the property. After two years, Maddox tired of waiting for agency action and reopened.

III. PROCEEDINGS

Maddox, represented by counsel, filed a complaint in March 2003 against Dorene Lorenz, Wilbur "J.R." Thomas, Ethel "Penny" Hardy, and others he believed were involved in the fire.³ Hardy was sued as a possible owner of the property. Maddox asserted claims of nuisance, offensive contact, negligence, negligence per se, and strict liability and asked for compensatory and punitive damages. Lorenz's pro se answer,⁴ after amendments, included a number of compulsory and permissive counterclaims: defamation, intentional infliction of emotional distress, battery, and two counts of nuisance (one for Maddox's dog boarding business, the other for an alleged marijuana business).

Maddox moved to dismiss Lorenz's counterclaims in May 2004. In June Superior Court Judge Harold M. Brown issued a notice of intent to dismiss counterclaims for failure to state a claim on which relief may be granted and gave Lorenz an opportunity to amend her counterclaims. After Lorenz filed amended counterclaims, Maddox again moved to dismiss them. Lorenz made no response and the judge dismissed Lorenz's counterclaims without further explanation. Lorenz appeals this dismissal, arguing that the judge failed to treat her pro se pleadings charitably and failed to provide her with a minimum level of information so that she could properly correct her counterclaims. She also argues that her counterclaims stated proper claims.

Trial was in Seward on November 15-17, 2005. The jury returned a verdict in favor of Maddox, finding Lorenz and Thomas liable in nuisance.⁵ The jury allocated fault as follows: Lorenz — sixty percent; Thomas — forty percent; Hardy — zero percent. The jury further found that Maddox did not fail to mitigate his damages. In total, the jury awarded Maddox $21,000 for lost earnings, $72,000 for lost property value, and $2,000 for mitigation expenses. The superior court allocated these damages according to the degree of fault found by the jury. The jury also assessed punitive damages against Lorenz and Thomas in the amounts of $500 and $50,000, respectively.

At trial, the judge only instructed the jury on Maddox's nuisance claim. Maddox appeals the superior court's refusal to instruct the jury on his claim of strict liability based on AS 46.03.822.

After the verdict, Lorenz moved for a new trial. The court denied the motion. Lorenz repeats her arguments on appeal. Specifically, she appeals the jury's finding of causation and its award of damages. Thomas has not participated on appeal.

IV. DISCUSSION

A. Statutory Strict Liability Did Not Apply to Hardy Because She Was Not the Owner of the Property.

Maddox challenges the superior court's refusal to impose joint and several strict liability on Hardy based on AS 46.03.822. We review questions of law and the trial court's application of the law to facts de novo.⁶

Alaska Statute 46.03.822 is an environmental statute providing joint and several strict liability for damages resulting from a release of a hazardous substance.⁷ The statute applies when two elements are met. First, there must have been an "unpermitted release of a hazardous substance" that caused damages.⁸ Second, the party being sued must own the hazardous substance at the time of the release.⁹

Maddox's argument rests solely on the statute, but the parties' briefs occasionally refer to common law strict liability. This reliance is misplaced. The elements of the statute are distinct from tort law's ultrahazardous activity analysis.¹⁰ Moreover, the goal of Maddox's appeal is to "impos[e] joint and several strict liability on Penny Hardy for the full amount of the compensatory damages awarded by the jury below." Strict liability in tort, as modified by AS 09.17.080(d), only provides several liability. Because the jury allocated zero fault to Hardy, Maddox's legal theory cannot be based on common law strict liability.¹¹

We assume arguendo that the fire released a hazardous substance within the meaning of AS 46.03.826(5). Accordingly we only discuss the second element of the statute.

For the second element, Maddox invokes the portion of the statute that imposes liability on the owner of a hazardous substance at the time of its release.¹² Maddox argues that Hardy was the owner of the property at the time of the fire's release of lead-tainted ash. Hardy responds that she did not own the property at the time of the fire.¹³ The trial court did not reach the issue of property ownership because the court erroneously applied the common law strict liability test and concluded that the fire was not ultrahazardous.

When applying AS 46.03.822 this court follows a title theory of ownership.¹⁴ Accordingly, an owner of property is the person holding title.¹⁵ The issue of property ownership turns on the August 8, 2001 bill of sale that Hardy delivered to Lorenz. Maddox did not object to the admission of this document at trial and on appeal the parties do not dispute the genuineness of this document. Maddox argues that the controlling fact is that Hardy and Lorenz did not execute and record a quitclaim deed until after the fire in 2002. Hardy responds that the pre-fire bill of sale transferred title.

Maddox first argues, citing the recording statute AS 40.17.090, that the 2002 (post-fire) quitclaim deed "should have been conclusive on this issue [of ownership]." Maddox is wrong. The recording statute provides that properly acknowledged documents are "admissible as evidence of the conveyance...