Smith v. Stratton, S-4153
| Decision Date | 26 June 1992 |
| Docket Number | No. S-4153,S-4153 |
| Citation | 835 P.2d 1162 |
| Parties | Toni M. SMITH and Steven R. Smith, Appellants, v. Barbara B. STRATTON, Appellee. |
| Court | Alaska Supreme Court |
John C. Dittman, Kelly, Cossman & Associates, Anchorage, for appellants.
S. Ramona Longacre, Michael J. Hanson, Anchorage, for appellee.
Before RABINOWITZ, C.J., and BURKE, MATTHEWS, COMPTON and MOORE, JJ.
This appeal of a dismissal raises the issue of whether Alaska's savings statute applies to an action which is refiled within one year after being dismissed for failure to prosecute. The superior court dismissed the Smiths' complaint, finding that it was time-barred by the statute of limitations and that Alaska's savings statute, AS 09.10.240, did not apply. The superior court also rejected the Smiths' equitable estoppel arguments against application of the statute of limitations.
On November 30, 1984, Barbara Stratton rear-ended Toni Smith's car, injuring Smith in the accident. Through their lawyer, the Smiths attempted to negotiate a settlement with Allstate Insurance Company, Stratton's insurer. In order to comply with the two year statute of limitations, the Smiths filed an action against Stratton in the superior court in October 1986. On October 28, 1986, the Smiths granted Allstate's request for an indefinite extension of time in which to file an answer since the parties were attempting to negotiate a settlement. In 1987, Smith's car was rear-ended by Yu Son, and in 1988, Andrea Waldon collided with a car in which Smith was a passenger. Son and Waldon were both insured by Allstate. The two later accidents both complicated and slowed settlement negotiations with Allstate, particularly on the issue of Toni Smith's damages.
On January 15, 1988, the clerk of the superior court issued a Civil Rule 41 Notice to Show Cause why the Smiths' action should not be dismissed for want of prosecution. 1 The Smiths' attorney responded to the notice, taking the position that informal attempts at settlement made by the parties constituted sufficient prosecution of the case. In response, the superior court entered an order on March 3, 1988, denying dismissal under Rule 41 and stating that the case would be dismissed if the requirements of Civil Rule 16.1(g) were not satisfied by June 1, 1988. 2 Neither Stratton nor Allstate received a copy of the order. No further action was taken on the case and on June 24, 1988, the superior court dismissed the Smiths' complaint without prejudice.
After the dismissal, settlement negotiations continued. The Smiths retained new counsel and refiled the action, including the two other Allstate insureds in their complaint 3, on April 4, 1989. Again, Allstate requested and received an unlimited extension of time in which to answer the new complaint. Eventually, negotiations broke down and the Smiths asked that Allstate answer the complaint.
Thereafter, Stratton moved for summary judgment, requesting that the superior court dismiss the Smiths' action because the statute of limitations had expired before the complaint was refiled. In opposition, the Smiths argued that Alaska's savings statute allowed refiling of the case within one year of dismissal and, alternatively, that Stratton was estopped from asserting the statute of limitations because Allstate requested extensions which resulted in the Smiths' failure to formally prosecute the action and the consequent dismissal of their claim against Stratton.
The superior court granted summary judgment in Stratton's behalf and this appeal followed. 4
The Smiths contend that since the action was refiled within a year of the superior court's dismissal of their action for failure to prosecute, the savings statute should apply. Stratton disagrees, asserting that a case which has been dismissed for failure to prosecute does not fall within the ambit of the savings statute, which requires that the case be "dismissed upon the trial or upon appeal." AS 09.10.240. 5
The Alaska savings statute, AS 09.10.240, provides in pertinent part:
If an action is commenced within the time prescribed and is dismissed upon the trial or upon appeal after the time limited for bringing a new action, the plaintiff ... may commence a new action upon the cause of action within one year after the dismissal or reversal on appeal.
The applicability of the savings statute depends on the interpretation of the phrase "upon the trial or upon appeal."
The Smiths assert that the Alaska Legislature adopted the Oregon savings statute and rely on City of Fairbanks v. Schaible for the proposition that the legislature also adopted the Oregon common law interpretation of the statute. 375 P.2d 201, 207 (Alaska 1962). 6 In this regard the Smiths argue that the Oregon courts' interpretations were adopted with the statute and that, therefore, the interpretation of the statute in White v. Pacific Tel. & Tel. Co. controls. 168 Or. 371, 123 P.2d 193, 195 (Or.1942), overruled by Fuller v. Safeway Stores, Inc., 258 Or. 131, 481 P.2d 616 (Or.1971). White states in dictum that the Oregon savings statute applies to an action dismissed for want of prosecution. The Smiths further argue that since the savings statute is a remedial statute it should be given a liberal construction.
Stratton relies on Andreanoff v. State for the proposition that "the presumption is not conclusive and Alaska's courts may adopt a variant interpretation if convinced that the plain language of the statute, common sense and public policy require it." 746 P.2d 473, 476 n. 3 (Alaska App.1987) (citing Beckley v. State, 443 P.2d 51, 55-56 (Alaska 1968)). After Alaska's savings statute was adopted in 1962, the Oregon court decided Fuller v. Safeway Stores, Inc., 481 P.2d 616 (Or.1971). In Fuller, the court held that the savings statute did not apply to a case dismissed for lack of prosecution and overruled White. 7
We have often stated that "statutory interpretation begins with examination of the language construed in light of its purpose." Vail v. Coffman Eng'rs, Inc., 778 P.2d 211 (Alaska 1989); J & L Diversified Enter. v. Municipality of Anchorage, 736 P.2d 349, 351 (Alaska 1987). Here resolution of the issue turns upon construction of the language "upon the trial or upon appeal." In our view "trial" and "appeal" should be interpreted to mean "trial court level" and "appellate court level" respectively. Any other construction of these terms would be unreasonable. We are reluctant to impute an irrational intent to the legislature in its use of the phraseology "upon the trial or upon appeal." It is not rational to assume that the legislature intended to exclude from the savings statute causes of action which are dismissed before trial and not those which (for the same reasons) are dismissed after commencement of trial. Nor does it make sense to distinguish a dismissal which is entered after a notice of appeal has been filed from one which occurs subsequent to submission of the appeal on its merits or one which occurs at oral argument. Thus, we conclude that AS 09.10.240 applies to all actions which have been dismissed, other than on their merits, at both the trial court and appellate court levels. 8
The Smiths rely on equity in their argument that it is fundamentally unfair for Stratton to assert the bar of statute of limitations after receiving an indefinite extension of time in which to answer the complaint. Stratton characterizes the Smiths' argument as essentially an equitable estoppel argument. Because the Smiths failed to show fraud or misrepresentation and reliance, Stratton asserts that this argument should fail. One commentator explains the term "equitable estoppel" as follows:
Courts often employ what has been loosely termed "equitable estoppel" to remove the statutory bar in any situation in which the plaintiff's reasonable failure to sue appears to result from reliance on any sort of misleading conduct, such as assurances that the obligation would be discharged without suit, or a request that the plaintiff delay prosecution of the claim.
Developments in the Law: Statutes of Limitations, 63 Harv.L.Rev. 1177, 1223 (1950).
Stratton relies on Groseth v. Ness, 421 P.2d 624 (Alaska 1966), for the proposition that there must be reliance on misrepresentation or false statements for equitable estoppel. Stratton asserts that Groseth closely resembles the instant case. Groseth, however, can be distinguished because the plaintiff had not filed a suit when the statute of limitations expired and the failure to file suit was not a result of any agreement between the parties.
In Gudenau & Co. v. Sweeney Ins. Co., we held that a plaintiff who fails to file suit within the statute of limitations may be protected by equitable estoppel if the plaintiff has been induced to postpone filing suit by the defendant's words or conduct. 736 P.2d 763, 768 (Alaska 1987). In order to estop an assertion of the statute of limitations defense, the plaintiff must satisfy three conditions: (1) the plaintiff's pursuit of the initial remedy must give the defendant notice of the claims against her; (2) the defendant must not be prejudiced in her ability to gather evidence; and (3) the plaintiff must have acted in good faith. Id.
Here the Smiths were induced to postpone prosecution of the suit by Stratton's request for an indefinite extension of time to file an answer. Thus, we hold that all three conditions for application of equitable estoppel are satisfied: Stratton was aware of the claims against her and benefited from the delay because she was not required to retain an attorney to answer the complaint and the Smiths acted in good...
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