Martin v. Mears

• Decision Date: 02 November 1979
• Docket Number: No. 4091,4091
• Citation: 602 P.2d 421
• Parties: William R. MARTIN, Appellant, v. Kenneth J. MEARS, Appellee.
• Court: Alaska Supreme Court

Page 421

602 P.2d 421

William R. MARTIN, Appellant, v. Kenneth J. MEARS, Appellee.

No. 4091.

Supreme Court of Alaska.

Nov. 2, 1979.

Thomas H. Dahl, Gallagher, Cranston, Snow, Walters & Dahl, Anchorage, for appellant.

G. Kent Edwards, Anchorage, for appellee.

OPINION

Before RABINOWITZ, C. J., CONNOR, BOOCHEVER and MATTHEWS, JJ., and DIMOND, Senior Justice.

RABINOWITZ, Chief Justice.

This appeal arises from the superior court's entry of an order dismissing appellant Martin's complaint "with prejudice for the reason that it fails to state a claim upon which relief can be granted due to the provisions of Alaska's statute of frauds, AS 09.25.010(a)." ¹

Martin's complaint stated that he and Mears "owned as tenants in common" 4.6 acres of land "situated on the east bank of the Nuyakuk River, near the outlet of Tikchik Lake, Alaska," and that they "each wished to sever from the tenancy in common an individual lot to be held in fee simple, separate from the tenancy in common for their own respective business purposes." The complaint further alleged that Martin and Mears arranged to sever a lot containing approximately 5,160 square feet from the larger parcel and that this lot was conveyed by them, as co-tenants, to Mears by "Grant Deed." As consideration for the fee simple ownership, Mears tendered the sum of $1,026, which was "equal to a pro-rata portion (based on square footage) of the original purchase price." ²

The complaint alleged that this "severance and option agreement contemplated severance by (Martin), at a future date, of an equivalent parcel upon the same terms and conditions and upon granting a similar option (right of first refusal) to defendant Mears." It further alleged that Martin has respected Mears' ownership rights and "wishes to exercise his selection and severance of an individual lot of equal dimension and under the same terms and conditions as . . . severance (was) accomplished by defendant (Mears), as was mutually contemplated by the parties." Martin asserted that he requested "equal performance" of Mears, but that Mears "has refused to join as co-tenant in a conveyance to plaintiff of his selected lot." The complaint further stated:

That plaintiff detrimentally relied upon the aforesaid Agreement, bestowing benefit thereunder upon defendant, who accepted such performance and the benefits of separate ownership of the described premises without rendering to plaintiff the performance in kind which plaintiff reasonably expected when releasing his interest in the lot selected by defendant.

Martin's prayer for relief requested specific performance "ordering defendant to convey by appropriate deed his interest to plaintiff in a lot selected by plaintiff" on the same terms and conditions "as those which governed the earlier transfer between the parties."

Mears then filed a motion to dismiss the complaint grounded on the assertion that it failed to state a claim upon which relief could be granted due to the bar of the statute of frauds. Mears argued that Martin was seeking specific performance of an oral contract to convey real property, which was prohibited by the statute of frauds; that the exception to the statute for part performance should not apply in this case; and that Martin's claim was otherwise lacking in support and specificity so as to preclude enforcement of the alleged oral agreement by the court.

Martin's opposition to the motion to dismiss argued that his complaint should not be dismissed because

1. The agreement to sever the lots was an agreement to distribute assets of a partnership, which assets are personal property and not barred by the statute of frauds for lack of a writing;

2. Even if the statute of frauds does apply, Plaintiff's performance of the agreement is sufficient to take the case out of the operation of the statute of frauds.

Martin also filed several documents in opposition to the motion to dismiss. The first of these documents was an affidavit from the attorney who "represented the partnership of (Martin and Mears) in at least part of the transactions related to the sale of the parcel of land" here involved. The affidavit stated that the attorney had "drafted certain documents which allowed the parties, as tenants in common, to separate out two portions of the whole parcel, one portion to be granted to each party individually." It further stated that "(t)he parties requested that I prepare a document reflecting that each would grant to the other (at different points in time) clear title to an individual lot, separate from the whole parcel. Mr. Martin signed certain documents, including the Grant Deed that conveyed a portion of the larger parcel to Dr. Mears." The affidavit was interlineated in many places; crossed out were sections stating that it was the "intent" of the parties to grant each a parcel individually and that "it was not the intent of either party that the purchase price be full consideration for the lot."

Also attached to Martin's opposition to the motion was a copy of a handwritten note, which Martin alleged was written by Mears to their attorney. This note discusses several of the parties' business concerns, including the land transfer between Mears and Martin. Of interest is the opening portion of this note which reads:

Pete

left copy of Tickchik land transfer agreement with some write ins I want to get a deed on this now also as I've already staked my area last June & Bill (Martin's first name is William) knows the land also see if can do (with) a quick (sic) claim (unreadable in copy) along with this (unreadable in copy). Bill could survey his later if he wishes.

A further attachment is apparently a portion of an unexecuted document which sets out the agreement of each party to the severance of "one lot approximately 75' X 100' from the property held as tenants in common to be held by each of them separately for their own respective business purposes." This agreement is also notated and is possibly the copy of the "agreement with some write ins" referred to in the note allegedly from Mears to the attorney.

The final attachments to Martin's opposition memorandum were documents relating to Governor Hammond's release of Mears' individual lot from the terms of the contract of sale by which Hammond conveyed the entire parcel to Martin and Mears. These include a letter from the partners' attorney to the governor's attorney requesting the governor's conveyance of the small parcel free of the sale contract, ³ a reply letter from the governor's attorney and the warranty deed transferring the parcel from Hammond to Martin and Mears as co-tenants.

In response, Mears filed an affidavit which simply states:

I never intended or agreed to allow Bill Martin to acquire a lot or sever a parcel from our jointly owned land in Tikchik Lake, by tendering to me now or at any time in the future the sum of $1,026, or any other sum.

Mears also filed an affidavit from the partners' attorney which states that the copy of the "Agreement" attached to Martin's opposition memorandum, relating to the parties' severance of individual lots, "was subsequently redrafted into another (document) which also was not executed by both parties" and that "I cannot recall or discern from viewing said document who made the (interlineations) reflected on it." The affidavit concludes:

I am unable to state that Kenneth J. Mears and William R. Martin ever reached a firm agreement with respect to any of the unsigned documents which I prepared for them. I did not intend my Affidavit of February 21, 1978 to imply otherwise, just as I do not intend that this Affidavit implies that such an agreement may not have, in fact, taken place unknown to me.

It was after this exchange that the superior court entered its "Order of Dismissal."

Initially, it is necessary to address a procedural problem. The superior court treated the dismissal motion as made pursuant to Civil Rule 12(b)(6) (failure to state a claim upon which relief can be granted). Civil Rule 12(b) provides with respect to this type of motion that:

If, on a motion asserting the defense numbered (6) to dismiss for failure of the pleading to state a claim upon which relief can be granted, matters outside the pleading are presented to and not excluded by the court, the motion shall be treated as one for summary judgment and disposed of as provided in Rule 56, and all parties shall be given reasonable opportunity to present all material made pertinent to such a motion by Rule 56.

Here the record shows that matters outside the pleadings were presented to the superior court and not excluded by the court. ⁴ We think it clear that these "outside" materials were sufficient to require conversion of the Rule 12(b)(6) motion into a motion for summary judgment. ⁵ The terms of Rule 12(b) make conversion mandatory whenever matters outside the pleadings "are presented to and not excluded by the court." ⁶ In this regard, "(t)he court has complete discretion to determine whether or not to accept any material beyond the pleadings that is offered in conjunction with a Rule 12(b) (6) motion." ⁷ If the trial court exercises its discretion to exclude such outside materials, conversion is not required, and the motion is then to be decided as a Rule 12(b)(6) motion.

We deem it of significance that Civil Rule 12(b)(6) requires the trial court affirmatively to exclude outside materials if it does not consider the conversion of a Rule 12(b)(6) motion to one for summary judgment to be desirable. Therefore, in the future all trial courts must expressly state whether they have in fact excluded or considered such materials in reaching their decisions. ⁸ In the instant case the superior court was under a mandatory duty to treat Mears' 12(b)(6) motion "as one for summary judgment and (dispose of it) as provided in Rule 56" after giving the parties a "reasonable opportunity to present all material made pertinent to such a motion by Rule 56." ⁹ W...