*1 CARTER, Eleanor B. Sr. and James E.
Smalley, in inter- and successor widow deceased, Ap- B.
est to Edward
pellants, HOBLIT, Appellee.
D.P.
No. S-1801. Alaska.
Supreme Court of 28, 1988.
Rehearing Denied June
requiring emergency medical treatment. This the joint seemed mark end of their development plan apparently nothing and done the property been to this date. paid
Since Hoblit has all taxes and against property. assessments From time, Smalley time to or Carter offered reimbursement, but Hoblit state would that Maffei, Anchorage, appellants. Albert problem there was no since the taxes were Edwards, Hartig, Rhodes, G. Kent Nor- quite only low—until 1959 the were taxes man, Edwards, Mahoney Anchorage, & per year. Smalley May Edward died on $5 appellee. 23,1966 appellant and Smalley Eleanor suc- to his property. ceeded interest In C.J., RABINOWITZ, Before and early sought 1970’s Hoblit Carter’s ad- BURKE, MATTHEWS, COMPTON and concerning vice Anchorage the Greater MOORE, JJ. Borough’s Area efforts obtain a sewer right-of-way sug- on the It was OPINION gested that the three share owners MATTHEWS, Justice. expenses dealing Borough with the granted summary judg- trial court declined, equally saying but Hoblit it was ment in of D.P. favor Hoblit. We conclude hardship no financial to him and that the genuine that there issues material expenses could be evened out when the fact and reverse. property was sold. FACTS1 In Hoblit invited Carter, Sr., Smalley, James E. B. Edward Eleanor house. There Hob- agreed D.P. purchase and in 1948 to purchase explained lit that he wanted to Myrtle owned land D.D. and Clover. daughter property from them for a who purchase price was which Hoblit $750 getting He to buy was married. offered agreed understanding with the that $10,000. each share for and Carter Smal- he would promptly be reimbursed Car- ley appraised the property had discov- and Smalley. and Title was be taken $96,500 it ered that was worth between and purchasers. names of the three Hoblit $104,000. They declined the offer. bought on Clovers Carter first learned that the title was March but took the in his deed February, in Hoblit’s name paid name alone. and each when, divorce, during process of purchase as their share $250 title was search conducted. Eleanor Smal- price timely They in a fashion. did not ley was advised of this soon thereafter. solely know that the deed was in Hoblit’s name. The deed was not recorded until
June 1973. PROCEEDINGS Hoblit, Carter, negotiations parties and were friends After between the differences, and intended to subdivide the into failed to settle this action three lots on each build was filed on December 1983. The com- parties plaint alleges home. To this end the started Eleanor common, or, survey survey but the and Hoblit are tenants alter- they doing clearing partners, requests natively, aborted when were a decree ax, leg requiring convey work Hoblit cut his with an an undivided Hoblit to (Alaska 1979). reviewing judgments grant Highways, on based orders 581 n. 4 ing summary judgment, we take view of per The statement is made of facts non-moving facts which is most favorable spective. party. Dep’t B-E-C-K Constructors Keeton, Dobbs, parties. D. R. Keeton to each and for one-third interest Owen, D. Prosser and Keeton on the related relief. & (5th Law Torts at 738 on summary judgment Hoblit moved fiduciary relationship A will arise where limitations, grounds: four voluntarily agent anoth one acts as laches, frauds, on the the statute er, purchase as where one offers to granted The motion without merits. *3 Winter, Ill. Ray estate for another. We therefore assume specifying reasons. 2d 10 Ill.Dec. 367 N.E.2d ground presented was found to that each (Ill.1977); (Second) Agency Restatement assign- has taken an valid. who be (1958). fiduciary duty has a §§ Smalley, appeals. from Eleanor ment fully might disclose information which to person’s rights affect the other and influ LIMITATIONS I. OF STATUTE Smith, E.g., ence his action. Wilkinson provides that Statute 09.10.2302 Alaska Wash.App. the determination of a claim an action for property must be commenced within to real produced evidence Carter brought years. This suit was not until ten question demonstrates a factual as years thirty-five after Hoblit breach- some fiduciary relationship, existence of a alleged agreement and assumed sole fiduciary the duties that it entailed. As a question. property in In the title to obliged for Carter and toll absence of circumstances might to disclose all facts which affect period, this action year the ten limitations their interests. One such fact would be the would be barred. placing of title Hoblit's name alone. failure to disclose this information could be contends that the of limita- viewed as a fraud. February tions should be tolled until deed re- when Carter discovered the Fraud can also be committed in the argues corded in Hoblit’s name. He fiduciary duty de absence of a where the ownership concealed sole truths, fendant’s statements are half or “thirty-five year course of mis- true remarks material informa which omit statements, representation, false (Second) tion. The Restatement of Torts fraudulent acts.” (1977) provides literally that a true express if may
Alaska Statute 09.10.230 statement be fraudulent it omits ly provides qualifying likely that in for fraud information an action additional running “A represen of the time within which an action affect the listener’s conduct. may stating goes from be commenced starts the dis tation the truth so far as it covery of the fraud. Fraud can estab the maker or be but which knows believes misleading materially lished silence or non-disclosure when a be because of his fiduciary relationship qualifying exists between the failure to state additional or provides: patent. upon promise, 2. Alaska Statute 09.10.230 In an action a new mistake, running or of the time person may bring No an action for the deter- right mination of a or to or within which an action be claim interest commenced property real unless commenced within the making promise starts of the new or provided limitations ery for the recov- actions discovery of the or fraud mistake. This possession of the of real But no equitable does bar an section not owner aside, person may bring an action to set can- possession defending of real cel, annul, patent or otherwise affect a to land possession by equitable means of the title. States, by this issued state or the United or to equitable of an owner to defend compel claiming holding or under a possession by complaint in an action or patent convey the land described in the injunction by lapse is not barred of time while patent portion or a of the land to the possession prop- real action action, in the or to hold the land in trust for erty provisions barred not of this plaintiff, or to the use benefit of or on chapter. matter, thing, account of or transaction recovery possession Actions for the had, done, suffered, transpired which was or brought years real must be within ten patent before the date unless com- possession AS loss seizen. 09.10.030. years menced within 10 from the date of the representation.” statutory discovery matter is a fraudulent rule AS 09.10.230.3 Id,.; Torts at see also Prosser on involving actions for fraud not prop- (“[I]f speak, the defendant does he erty, involving and thus not statutory enough prevent must disclose his words rule, we have held that the stat- being misleading....”) ute of long limitations is tolled so reliance remains
According appellants, reasonable. Sharrow v. Smalley, believing they Archer, held an owner- ship property, inquired interest as to 230, however, Section speaks of dis obligation taxes. On covery of the fraud as a fact rather than as 50’s, 60’s, occasion in the and 70’s Hoblit might when have been discov they allegedly told them that need not con- ered had the victim acted reasonably. We tribute because would them and the suggested have in the context of a real matter taken would be care later. Hob- estate fraud case on the merits that lack of averred, responses, lit’s if the facts are as *4 by due care the victim is not a defense. deceptive they imply because that Car- Walker, Cousineau v. property. own the The (Alaska 1980): may same be said for Hoblit’s refusal to growing The trend and tendency of the allow Carter and for the courts will continue to move toward the
expenses negotiating Borough with the negligence concerning trusting doctrine that in in way. sewer Of a misrepresentation posi- will not excuse Further evidence of fraudulent conceal- deprive tive willful fraud or the defraud- ment is found in the 1977 discussion which remedy. Hoblit had with Carter and Eleanor Smal- ley where Hoblit is said to have offered to (quoting Jaeger, Id. Williston on Con purchase their shares of the 1515B, (3d 1970)). tracts at 487 § Again, such an imply offer would an own- Among per the reasons for this is trend a interest, ership concealing thus ception fraud victims are often cred offerees the fact that title to the trusting or ulous to an unreasonable ex was not their names. tent, and that a due care defense tends to ap reward the defrauder.4 These reasons Having concluded that is there ply equal statutory force to the dis enough evidence of fraud to raise an issue covery trial, rule for fraud. Because of them we legal question a must be resolved. requirement decline to read a question The that a fraud require is whether there is a reasonably ment that a fraud act in victim have acted into section victim order to be entitled to the benefit of the 230.5 is, event, language expresses any presumption
3. The
of AS
09.10.230
not conclu-
discovery
upon
rule is: "In an action
a
merely
...
sive but
a rule based on convenience
fraud, mistake,
running
decisis,
or
of the time which
principles
whereby things
of stare
an action
be commenced starts from ...
constantly
once decided need not
be redeter-
or
mistake."
precedent underlying
mined. ...
if a
an
adopted
longer
statute were no
vital or were
II,
Gray, Misrepresentation
4. James and
—Part
reasoned,
poorly
we would decline to follow
(1978);
Md.L.Rev.
(Second)
511-528
Restatement
it.
reporter’s
Contracts
note
(Footnote omitted).
(1981).
changed
The law of fraud has
in the last one
law,
years. Today,
hundred
under Alaska
concurring opinion disagrees
with this
negligence
trusting misrepresenta-
victim’s
Gilbert,
conclusion.
It cites Carver v.
deprive
remedy.
tion will not
the victim of his
(Alaska 1963)
proposition
that when
compelled
adopt
interpre-
We do not feel
an
state,
adopted
a statute is
from another
and that
espoused
Oregon
tation
in an 1887
statute,
case decided
highest
state’s
court has construed the
it
negligence
when such
was a defense.
presumed
adopted
is
that the statute has been
concurring
However,
opinion
also draws a distinc-
with that construction.
in Zerbe v.
State,
(Alaska 1978),
pertain-
tion between the statute of limitations
P.2d
overruled
ing
grounds, Stephens
Dep’t
on other
to fraud and other fraud defenses. Under
Revenue,
(Alaska 1987),
concurring opinion’s approach,
Therefore, laches is an available defense
interest therein....
under the rule of Kodiak Electric.6
4315(5)
CLA
*5
successfully
We have held that to
assert
writing
There is
by
a
initialed
laches,
the defense of
the defendant
3,1948
April
dated
receipt
the form of a
(1)
delay by
plain-
must show that the
the
Smalley
issued to Edward
It
$250.
inexcusable,
tiff was unreasonable and
Spenard
states: “Cash on
Heights.”
lot at
(2)
prejudice
and
that undue
to the de-
Carter, however, does not contend that this
delay.
fendant resulted from the
Moore
writing satisfies the
In-
statute
frauds.
(Alaska 1976).
553 P.2d
15
stead,
argues
that this case falls within
delay
necessary
unreasonable
to sat-
performance exception
the full
to the stat-
isfy
requirements only
the first of these
ute.
by
occurs after the
discovers or
the exercise
diligence
reasonable
performance
exception
full
to the
wrong
should have
the
discovered
part
statute of
is
frauds
now
of our stat
complains.
which he
v. Arctic
09.25.020(1)provides
ute. Alaska Statute
Wolff
Bowl, Inc.,
(Alaska
767
exception applies
that
the
if “there has
1977).
performance
been full
accepted
on one side
by the other in
Hill,
(Alaska
accordance with the con
Straight v.
In
1981).
tract.”
1948 there was no codified ex
ception
performance.
for full
Nonetheless
Accepting
appellants’
the
version of
exception
recognized
such an
was
as a mat
true,
the facts as
neither
nor
ter of decisional law.
Cary,
Rassmus v.
Smalleys
had
reason to believe that
Alaska
they were not each one-third owners of the
1981;
property until
they any
Accepting
nor had
rea
present-
the view of the facts
protect
rights
son to take action to
their
and
both he
Edward
appears
until
then.
It
fully performed
that within two
had
obligations
their
under
thereafter,
years
following
agreement
considerable
by paying
with Hoblit
credulous could
apply
maintain a cause of action for
6. Where statutes of limitations
suits
equity,
delay
but he would lose
"a
for a shorter time than the
that
if his unrea-
statute,
period
applicable
if unreasonable
credulity prevented
realizing
sonable
him from
defendant,
prejudicial
and
be a bar
that he had been defrauded for the
Re,
equitable
relief.” H.
Cases and Materials
result,
possible,
limitations. This
while
does
(5th
Equity
Equitable
on
Remedies 765
logically
not seem
consistent.
1975).
so,
purchase price.
procedure,
adopted,
If
was
share of
almost verbatim
code
Oregon’s
on June
frauds would not bar this claim.
1900. The
statute of
(then
IV,
text of AS 09.10.230
Part
Codes),
Carter’s Annotated Alaska
IV. THE MERITS
particular
provision
its
argued before
trial
as
starting point
fraud or mistake
deposition testimony
Car
court that
period,
the limitations
has not
materi-
been
vague
was so
as to
and Eleanor
ally
adopted
altered since it was
Ore-
a breach of con
he insufficient
gon.
tract or fraud claim. This contention is
Alaska,
In
a
adopted
from anoth
without merit.
er state
has been
construed
to,
was for
agreement,
testified
highest
presumed
state’s
court
to be
buy specified lot for
parties
the three
adopted with that construction. Carver v.
specified
in the
price
to take title
Gilbert,
hold fraud victims to a standard of due
diligence discovering pur the fraud for
poses complying statutes of limita See, Sand, e.g.,
tions. ‘N Sun Inc. v. Unit Bank, 671, Cal.3d California Cal.Rptr. (Cal. P.2d
1978); Hoeck, Mathies v. 2-3 (Or.1978); Brungardt, 215 Kan. Wolf (1974); Greco v.
Pullara, 166 Colo.
I would hold that the limitations begins forth in
set AS 09.10.230 to run
when a fraud victim discovers the fraud or
should have discovered diligence.
exercise reasonable
ALASKA INTERNATIONAL CON Employers
STRUCTORS
Casualty Appellants, Company, Alaska,
STATE of SECOND INJURY
FUND, Appellee.
No. S-1873.
Supreme Court Alaska. *7 Klasen, Gantz, Gary
James F. Thorsness, Hughes, Gantz, Brun- Powell & din, Anchorage, appellants.