Ranes & Shine, LLC v. MacDonald Miller Alaska, Inc.
355 P.3d 503
Alaska2015Background
- In 2005 Gordon Timmerman (sole owner of MacDonald Miller Alaska, Inc.) settled a ~$32,000 claim against Ranes & Shine by releasing the claim and paying $18,000 in exchange for equipment Ranes & Shine represented it owned free and clear.
- First National Bank Alaska had earlier (2002) filed a UCC financing statement perfecting a security interest in Ranes & Shine’s equipment; First National contacted Timmerman in 2010 claiming the equipment and demanded its return.
- First National sued Timmerman in 2010; Timmerman asserted third-party claims against Ranes & Shine and Thomas Ranes individually for breach of title warranty (UCC), misrepresentation, UTPA, and common-law contract; First National’s claims were resolved, leaving the third-party claims.
- The superior court granted partial summary judgment dismissing the UCC breach-of-warranty claim as time-barred, but found issues of fact on misrepresentation and common-law contract and later, after trial, ruled for MacDonald Miller (substituted for Timmerman) on misrepresentation and breach of contract and awarded damages, fees, and costs.
- On appeal Ranes & Shine argued (1) MacDonald Miller was on constructive/inquiry notice in 2005 because of the public UCC filing (so statutes of limitation bar the claims), (2) Ranes should not be personally liable, and (3) various procedural errors (pleading amendment, telephonic testimony, fee award).
- The Supreme Court of Alaska affirmed most rulings (statute-of-limitations timing, fees, procedural rulings), reversed only the dismissal of the misrepresentation claim against Ranes individually, and remanded for further proceedings as to individual liability.
Issues
| Issue | Plaintiff's Argument (MacDonald Miller / Timmerman) | Defendant's Argument (Ranes & Shine) | Held |
|---|---|---|---|
| Whether public UCC financing statement gives constructive notice that starts statute-of-limitations clock | Constructive notice should not be imputed; plaintiff lacked knowledge and reasonably relied on Ranes’s representations | UCC filing gave constructive notice in 2002, so plaintiff was on notice in 2005 and claims are time-barred | Court rejected constructive-notice rule for statutes of limitations in this context; financing statements do not automatically start limitations periods |
| Whether plaintiff was on inquiry or actual notice in 2005 (accrual date) | Plaintiff reasonably relied on Ranes’s representation; lacked sophistication and did not know about UCC searches; limitations tolled until First National’s 2010 contact | Facts known in 2005 should have put plaintiff on inquiry notice; limitations accrued in 2005 | Trial court’s finding that plaintiff was not on inquiry/actual notice until 2010 was not clearly erroneous; claims timely |
| Whether Ranes (individual) is personally liable for misrepresentation | Misrepresentation was made by Ranes personally; an agent can be held individually liable for torts | Ranes acted as corporate agent and liability should be limited to Ranes & Shine | Court held dismissing the individual misrepresentation claim was error; agent may be personally liable for tortious misrepresentations; reversed and remanded as to Ranes’s individual liability |
| Whether the trial court abused discretion by amending pleadings sua sponte to substitute MacDonald Miller as plaintiff | Amendment reflects the evidence and unity of interest; no prejudice to defendant | Objection to substitution and claimed prejudice | Court did not abuse discretion: pleadings may be conformed to evidence and no prejudice shown |
| Whether court abused discretion permitting Ranes to testify telephonically and whether that prejudiced defendant | Telephonic testimony was necessary (incarcerated out-of-state), offered with notice; no prejudice | Prejudice from inability to confront witness and late notice | Court did not abuse discretion: good cause existed, no substantial prejudice shown |
| Whether award of attorney’s fees to MacDonald Miller was improper because Timmerman incurred fees personally | Fees were incurred for MacDonald Miller’s benefit and substitution showed unity of interests | Claimed fees were Timmerman’s, not the corporation’s | Court did not err: fees properly awarded to MacDonald Miller given unity of interests |
Key Cases Cited
- ConocoPhillips Alaska, Inc. v. Williams Alaska Petrol., Inc., 322 P.3d 114 (Alaska 2014) (standard for reviewing legal questions de novo)
- Gefre v. Davis Wright Tremaine, LLP, 306 P.3d 1264 (Alaska 2013) (articulation of discovery rule and accrual for statute-of-limitations)
- John’s Heating Serv. v. Lamb, 46 P.3d 1024 (Alaska 2002) (discussing when inquiry-notice and discovery rule apply)
- Armour v. Alaska Power Auth., 765 P.2d 1372 (Alaska 1988) (four-year UCC limitations period for breach of contract for sale)
- Bauman v. Day, 892 P.2d 817 (Alaska 1995) (declining to charge plaintiff with constructive notice from recorded plat where injury was not discovered until later)
- Austin v. Fulton Ins. Co., 498 P.2d 702 (Alaska 1972) (agent may be held individually liable for negligence/tort)
- Jarvill v. Porky’s Equipment, Inc., 189 P.3d 335 (Alaska 2008) (accrual may depend on occurrence of damage, not time of sale)