DAVID GRIFFITH v. ROGER HEMPHILL and DONALD DAVIS
Supreme Court No. S-18041
THE SUPREME COURT OF THE STATE OF ALASKA
December 16, 2022
No. 7634
Andrew Guidi, Judge
Superior Court No. 3AN-19-04477 CI
Nоtice: This opinion is subject to correction before publication in the PACIFIC REPORTER. Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email corrections@akcourts.gov.
Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Andrew Guidi, Judge.
Appearances: David Griffith, pro se, Eagle River, Appellant. Kendra E. Bowman, Jermain, Dunnagan & Owens, Anchorage, for Appellees.
Before: Winfree, Chief Justice, Maassen, Carney, Borghesan, and Hendersоn, Justices.
I. INTRODUCTION
A landlord leased a commercial building to two tenants who operated an automotive repair business on the property. The landlord refused to adhere to provisions in the lease requiring him to maintain and repair the property and to cover the property insurance, so the tenants paid for the property insurance and for substantial repairs that were needed after the roof failed. The landlord initiated a forcible entry and detainer action after the tenants held over at thе end of the lease term; the tenants counterclaimed for breach of contract. After trial, the superior court ruled that the landlord had breached the lease and awarded the tenants damages. The superior court also awarded the tenants attorney‘s fees.
The landowner appeals, arguing that (1) the tenants did not file their counterclaim within the applicable statute of limitations, (2) the evidence did not support the damages award, and (3) the attorney‘s fees award was an abuse of discretion. Sеeing no error, we affirm the superior court‘s decisions.
II. FACTS AND PROCEEDINGS
A. Facts
In November 2008 David Griffith entered into an agreement with Roger Hemphill and
The lease was for a ten-year term. Among other things, the lease required Griffith to “maintain a policy of fire and other casualty insurance upon the premises” and to “maintain the premisеs ... in reasonable good order and condition.” It gave Hemphill and Davis the option, at the end of the lease term, to hold over under specified terms or to purchase the property for fair market value.
In 2010 the roof of the building began leaking water, damaging Hemphill and Davis‘s tire balancer. Hemphill and Davis asked Griffith to repair the roof and pay for the balancer. Griffith refused to pay for the roof repair or balancer replacement and told them the roof only needed a patch, which they could perform themselves. The record does not indicate whether Hemphill and Davis performed this repair, but their attorney represented at trial that they did, and Griffith did not contradict that assertion. In 2016 Hemphill and Davis discovered that the roof had failed in several places due to water accumulation; two scuppers1 had not been maintained, causing a clog. In either August or November of that year, the parties met to discuss the damage and repairs. At that meeting Hemphill and Davis maintained that the lease required Griffith to repair the damage. Griffith refused to repair the damage and claimed the lease was “fraudulent,” threatening Hemphill and Davis with eviction, revocation of their option to purchase, and a lawsuit. Hemphill and Davis eventually repaired the damage themselves.
In November 2018 — the last month of their lease term — Hemphill and Davis sent written notice to Griffith attempting to exercise their option to purchase. Griffith did not sell the property to Hemphill and Davis. After the lease term expired, Hemphill and Davis held over on the property. Griffith then brought a forcible entry and detainer (FED) action against Hemphill and Davis in district court in January 2019. Hemphill and Davis ended their holdover in April 2019 and vacated the property.
B. Proceedings
1. Pleadings and offer of judgment
Griffith‘s complaint sought to evict Hemphill and Davis from the property and claimed $25,000 in damages due to the roof failure. In February 2019 Hemphill and Davis answered the complaint, alleging that Griffith had breached the lease by refusing to maintain and repair the property and by refusing to honor their option to purchase. Hemphill and Davis countеrclaimed for over $100,000 in damages, pursuing claims of breach of contract, breach of the implied covenant of good faith and fair dealing, unjust enrichment, and specific performance. The case was then removed to superior court.
In April 2019 — less than a month after the parties agreed to exchange initial disclosures2 — Hemphill and Davis served Griffith with an offer of judgment pursuant to
Griffith amended his complaint for FED to add three other claims: fraudulent misrepresentation, promissory estoppel, and breach of implied-in-fact contract. Griffith alleged that the written lease was fraudulent and that the parties had instead negotiated and followed an oral implied-in-fact “triple-net lease” requiring Hemphill and Davis to maintain the property and to pay for Griffith‘s property taxes and insurance.4
2. Summary judgment order
Griffith moved for summary judgment on Hemphill and Davis‘s sрecific performance counterclaim. Hemphill and Davis moved for voluntary dismissal of that claim, which the superior court granted. Griffith proceeded to move for summary judgment on Hemphill and Davis‘s breach of contract counterclaim, asserting a statute of limitations defense. Hemphill and Davis then moved for summary judgment on their counterclaims and on Griffith‘s claims.
In June 2020 the superior court issued an order on the parties’ cross-motions for summary judgment. The court summarized its rulings as follows:
(1) The alleged oral [triple-net] agreement is invalid under the Statute of Frauds.5
(2) The 2008 written contract is enforceable but there are genuine issues of material fact as to whether certain key terms of the contract were modified [by] the parties’ course of dealing or subsequent agreements ....
(3) There is an issue of fact as to whether the defendants waived the provision in the signed contract that requires the lessor to pay for maintenance and repairs.
(4) There is an issue of fact as to whether the defendants attempted to perform the option pursuаnt to the contract terms.
(5) There is an issue of fact as to whether the defendants were capable of exercising the option to purchase.
The court‘s order did not contain a ruling on Griffith‘s statute of limitations defense.
3. Superior court‘s findings and conclusions
After a two-day bench trial at which Hemphill, Davis, and Griffith each testified, the superior court entered its findings and conclusions on the record. The court made findings pertaining to the parties’ credibility, including that “the more reliable reporters in this case, with respect to the facts and circumstances and transactions, were Mr. Davis and Mr. Hemphill.” The court added that Hemphill provided “the most accurate account” of the late 2016 meeting between the parties regarding repairs after the roof failure.
The court rejected Griffith‘s argument that an oral triple-net lease modified the written contract, reiterating its ruling on summary judgment that any oral agreement between the parties was unenforceable due to the statute of frauds. The court similarly rejected Griffith‘s argument that the parties followed an implied-in-fact triple-net lease after signing the written contract, explaining that the parties’ actions were generally consistent with the terms of the written contract with respect to allocating costs. The court also ruled that the affirmative defenses of waiver and promissory estoppel did not bar Hemphill and Davis‘s breach of contract counterclaim, because waiver had not been “expressed in clear and uncertain terms” and because Griffith had not detrimentally relied on any promise made by Hemphill and Davis.
The court determined that the lease required Griffith to pay for property insurance and found, based on Hemphill‘s testimony, that Hemphill and Davis could recover the $1,173 they paid for that insurance in 2016 and the $243 they paid in 2017. The court also determined that the lease required Griffith to maintain the property and that he was responsible for the repair costs associated with the 2016 roof failure. The court found,
The court dismissed Hemphill and Davis‘s breach of contract claim involving the option to purchase, finding that they had not properly exercised the option. Likewise, the court dismissed Hemphill and Davis‘s claim for breach of the covenant of good faith and fair dealing. The court also dismissed Griffith‘s FED claim, explaining that Hemphill and Davis “had a right to remain holdover tenants for a limited reasonable period of time” and had not abused that right. The court also dismissed Griffith‘s unjust enrichment claim.
4. Award of attorney‘s fees
The superior court awarded $59,604.75 in attorney‘s fees to Hemphill and Davis under Civil Rule 68. The court explained that the award was based on Griffith‘s failure to “beat” Hemphill and Davis‘s Rule 68 offer of judgment.8 The court entered
final judgment in favor of Hemphill and Davis in the amount of $85,895.62, accounting for the damages award, prejudgment interest on the damages award, attorney‘s fees, and costs.
Griffith moved for reconsideration of the court‘s findings and conclusions, which the superior court denied. Griffith appeals.
III. DISCUSSION
A. The Superior Court Did Not Err By Ruling That Hemphill And Davis‘s Breach Of Contract Claim Was Timely.
The superior court ruled that Griffith had breached the lease by failing to pay for property insurance and by failing to maintain and repair the property. The court awarded damages only for claims that had accrued within the three-yеar statute of limitations for contract actions:9 (1) the property insurance premiums that Hemphill and Davis paid in 2016 and 2017 and (2) damages flowing from the 2016 roof failure.
Griffith appeals the denial of his statute of limitations defense.10 He argues
that Hemphill and Davis‘s February 2019 counterclaim for damages based on Griffith‘s failure to maintain and repair the property was untimely filed. Griffith maintains that the limitations period for this claim began
Regardless of whether Griffith breached the lease‘s covenant to maintain and repair the premises in 2010 when the roof leaked, a distinct cause of action accrued when clogged scuppers led the roof to fail in an unrelated incident six years later. Contracts can contain promises that, although phrased as a single obligation, “provide for more than one performance by a promisor.”12 In this event “the nonperformance of each thing promised is a separate breach of contract” giving rise to a separate cause of action.13 Griffith‘s promise to “maintain the premises” was such a promise. Each time
the building needed a repair to keep the premises in good working order, Griffith was required to perform the repair. Each time he failed to perform such a repair, he breached the contract anew, giving rise to a new cause of action.14 Griffith‘s failure to maintain the scuppers or repair the resulting roof damage in 2016 was therefore a new breach giving rise to a new claim even if he had previously breached his repair obligations in 2010.
Griffith‘s statute of limitations defense rested solely on the theory that Hemphill and Davis‘s claim arose in 2010. He never argued, either in the superior court or on appeal, that their claim was untimely because they were on notice of the 2016 roof failure or its cause more than three years before filing suit in 2019.15 Therefore Griffith has waived any such argument,16 and we affirm the superior court‘s ruling that Hemphill
and Davis‘s breach of contract claim was timely filed.17
B. The Superior Court Did Not Clearly Err By Awarding Hemphill And Davis $19,330 In Damages For Breach Of Contract.
The superior court awarded $19,330 in damages to Hemphill and Davis, relying primarily
Griffith first argues that Hemphill and Davis violated
Griffith waived this argument by retracting it in the superior court. The
remedy for an unjustified failure to disclose information required by Rule 26 is exclusion of that information as evidence.19 Griffith filed a pretrial motion in limine to exclude certain evidence that he alleged Hemphill and Davis imрroperly withheld. But Griffith later asked to withdraw this motion, explaining that he wished to use some of this evidence in presenting his case. The superior court granted Griffith‘s request to withdraw his motion to exclude; it does not appear that Griffith ever renewed the motion. Griffith cannot now renew this argument on appeal.20
Griffith next takes issue with the lack of “documentation” proving breach of contract damages. He appears to argue that Hemphill‘s oral testimony was insufficient to prove the amount of these damages. Whether evidence is specific enough to support an economic damages award is a question of law that we review de novo.21 We review the superior court‘s damages award for clear error, which exists “when[,] ‘after a thorough review of the record, we come to a definite and firm conviction that a mistake
has been made.’ ”22
Hemphill‘s testimony supported the amount of the award. Hemphill — who was familiar with the business‘s finances — testified that he and Davis spent $6,500 to repair the wall that had suffered water damage from the roof failure. Hemphill аlso testified that he and Davis spent $11,450 in painting costs to finish those repairs, itemizing the costs of wood trim, supplies, paint, a paint sprayer, scaffolding, and labor. Finally, Hemphill testified that he and Davis paid $1,173 for property insurance in 2016 and $242 in 2017. Griffith did not present any evidence refuting the amount of these damages, choosing instead to focus on Hemphill and Davis‘s failure to show receipts proving the expenses they incurred.
Plaintiffs in a contract suit are not required to present documentary evidence to substantiate their damages. Rather, the testimony
testimony, we conclude the amount of damages awarded was not clearly erroneous.24
C. The Superior Court Did Not Err By Awarding Hemphill And Davis Attorney‘s Fees Under Civil Rule 68.
The superior court granted Hemphill and Davis‘s motion for $59,604.75 in attorney‘s fees, representing 75% of their claimed total reasonable attorney‘s fees. The court explained that Griffith failed to “beat” Hemphill and Davis‘s Rule 68 offer of judgment totaling $20,000, inclusive of costs and interest. The court also determined that Hemphill and Davis were the prevailing parties.25 The court entered final judgment in favor of Hemphill and Davis in the amount of $85,895.62.
Griffith takes issue with the superior court‘s prevailing party determination, arguing that the superior court abused its discretion by determining that Hemphill and Davis were the prevailing parties and arguing that Griffith, instead, is the prevailing party. But Griffith‘s focus on prevailing party status is beside the point. Although the superior court determined that Hemphill and Davis were the prevailing parties for purposes of
The superior court did not err by awarding Hemphill and Davis attorney‘s fees under Rule 68 because Griffith did not beat their $20,000 offer of judgment.27 “When a party declines an offer of judgment and then fares worse at trial than under the offer, Rule 68 allows the offering party to claim post-offer costs and attorney‘s fees.”28 “To determine whether an offeree beat an offer of judgment, courts . . . [should] begin with the jury award and add prejudgment interest and costs incurred prior to the offer of judgment. This sum is compared with the offer of judgment.”29 If the sum is “at least 5 percent less favorable to the offeree than the offer,” the offeree is on the hook for Rule 68 attorney‘s fees.30
One of Hemphill and Davis‘s attorneys submitted an affidavit with their motion for attorney‘s fees which calculated the damages award plus prejudgment interest and costs at $21,647.94. Griffith did not challenge these
IV. CONCLUSION
We AFFIRM the judgment of the superior court.
