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Universal Motors Inc. v. Neary (8/20/99) sp-5162


     Notice:  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.



             THE SUPREME COURT OF THE STATE OF ALASKA
                                 


UNIVERSAL MOTORS, INC.,       )
                              )    Supreme Court No. S-8349
             Petitioner,      )
                              )    Superior Court No.
     v.                       )    3AN-95-254 CI
                              )    (Consolidated with
                              )    Superior Court No.
DANIEL C. NEARY, BOBBIE L.    )    3AN-96-6002 CI)
McDONALD, SR., BOBBIE L.      )
McDONALD, JR., and            )    O P I N I O N
CLAUDETTE M. McDONALD,        )
                              )
             Respondents.     )    [No. 5162 - August 20, 1999]
______________________________)



          Petition for Review from the Superior Court of
the State of Alaska, Third Judicial District, Anchorage,
Rene J. Gonzalez, Judge.


          Appearances: Scott J. Nordstrand, Owens &
Turner, P.C., Anchorage, for Petitioner.  Roger E. Holl, Anchorage,
for Respondent Daniel C. Neary.


          Before:   Matthews, Chief Justice, Compton,
Eastaugh, Fabe, and Bryner, Justices.  


          MATTHEWS, Chief Justice.


          On July 30, 1994, Daniel Neary was injured when he was
struck by a vehicle driven by eighteen-year-old Bobbie McDonald,
Jr., who lacked both a driver's license and insurance.  Neary sued
McDonald for negligence and McDonald's parents for negligent
entrustment.  After the suit against McDonald's parents was
dismissed by summary judgment, [Fn. 1] Neary filed a separate suit
against Universal Motors alleging that it had negligently sold the
vehicle involved in the accident to an unlicensed driver.  The
actions were subsequently consolidated.  Universal moved for
summary judgment, contending that the superior court should adopt
the "one-action rule."  From the denial of this motion we granted
Universal's petition for review.  We now affirm.  
          Universal describes the one-action rule as follows: 
"[I]f a plaintiff brings a tort action against one potential
tortfeasor and the merits of that claim are adjudicated by a court
or jury, he may not subsequently bring a separate tort action
against another potential tortfeasor for the same accident and
injuries."  Universal argues that the 1989 version of our
comparative fault statute requires the one-action rule by
implication. [Fn. 2]  
          The 1989 statute provided:
          Apportionment of Damages.

               (a) In all actions involving fault of
more than one party to the action, including third-party defendants
and persons who have been released under AS 09.16.040, the court,
unless otherwise agreed by all parties, shall instruct the jury to
answer special interrogatories or, if there is no jury, shall make
findings, indicating

                    (1) the amount of damages each
claimant would be entitled to recover if contributory fault is
disregarded; and

                    (2) the percentage of the total
fault of all of the parties to each claim that is allocated to each
claimant, defendant, third-party defendant, and person who has been
released from liability under AS 09.16.040.

               (b) In determining the percentages of
fault, the trier of fact shall consider both the nature of the
conduct of each party at fault, and the extent of the causal
relation between the conduct and the damages claimed.  The trier of
fact may determine that two or more persons are to be treated as a
single party if their conduct was a cause of the damages claimed
and the separate act or omission of each person cannot be
distinguished.

               (c) The court shall determine the award
of damages to each claimant in accordance with the findings,
subject to a reduction under AS 09.16.040, and enter judgment
against each party liable.  The court also shall determine and
state in the judgment each party's equitable share of the
obligation to each claimant in accordance with the respective
percentages of fault.

               (d) The court shall enter judgment
against each party liable on the basis of several liability in
accordance with that party's percentage of fault.
 
          Specifically, Universal contends that "[t]he only
reasonable method of litigating in a pure comparative fault
jurisdiction . . . is to require the parties to bring all potential
tortfeasors into a single action."  It argues that the one-action
rule promotes judicial economy, avoids inconsistent judgments, and
precludes double recoveries.
          In our view AS 09.17.080 does not mandate a single action
for each injury or accident.  Subsection (a) of the statute derives
from Section 2(a) of the Uniform Comparative Fault Act of 1977.
[Fn. 3]  The comment pertaining to the latter indicates that the
drafters of the Uniform Act contemplated the possibility of
subsequent suits against other potential tortfeasors:  
          The limitation to parties to the action means
ignoring other persons who may have been at fault with regard to
the particular injury but who have not been joined as parties. 
This is a deliberate decision.  It cannot be told with certainty
whether that person was actually at fault or what amount of fault
should be attributed to him, or whether he will ever be sued, or
whether the statute of limitations will run on him, etc.  An
attempt to settle these matters in a suit to which he is not a
party would not be binding on him.[ [Fn. 4]]  

In construing statutes taken from model acts we generally regard
the commentary to the model act as a reliable guide to the
statute's meaning. [Fn. 5]  We so regard the commentary quoted
above and conclude that our statute was not intended to preclude
separate actions against different tortfeasors.  
          Our conclusion is supported by Selchert v. State. [Fn. 6]
Iowa's comparative fault act is also modeled on the Uniform Act. 
The Selchert court declined to interpret the act as encompassing a
one-action rule, observing that to do so would be "to rewrite our
comparative fault act."[Fn. 7] 
          We also do not accept Universal's argument that the one-
action rule represents the only reasonable method of conducting
litigation in a comparative negligence jurisdiction.  
          From a judicial economy standpoint, it is generally true
that one trial is preferable to multiple trials.  But existing
parties already possess a strong incentive to name all potential
tortfeasors.  As we observed in Benner: 
          Both plaintiff and defendants will have
          significant incentive for joining available
defendants who may be liable.  The more parties joined whose fault
contributed to the injury, the smaller the percentage of fault
allocated to each of the other parties, whether plaintiff or
defendant.[ [Fn. 8]]

Further, one drawback of the one-action rule is that it may result
in the needless joinder of parties whose fault is remote.  Whether
the benefit from the additional incentive for joining all
potentially liable actors supplied by the one-action rule is
outweighed by the detriment resulting from the complications of
multi-party litigation is a policy question best left to the
legislature. [Fn. 9]  
          We remain unconvinced that the one-action rule represents
a necessary guard against inconsistent results or double
recoveries.  Universal hypothesizes that a creative plaintiff (P)
could sue one defendant (D1), obtain an award holding that he and
D1 are both fifty percent at fault, subsequently sue a second
defendant (D2), obtain another fifty-fifty allocation and thus
recover one hundred percent of his total damages.  Applying
customary rules of offset and collateral estoppel, however, would
prevent this result.
          Starting with Universal's hypothetical, assume $1,000,000
in damages in the first trial.  This would have resulted in a
$500,000 award against D1 who is fifty percent at fault. [Fn. 10] 
In the second trial D2 is entitled to a ruling based on collateral
estoppel that P's damages are not greater than $1,000,000. [Fn. 11] 
In the second trial there should be a determination of the
comparative fault not only of P and D2, but also of D1.  Even
though D1 is not a party to the second case he functionally
occupies the position of a "person[] who has been released"under
AS 19.17.080(a).  D2 would also be entitled to a ruling based on
collateral estoppel that P and D1 are negligent.  But the
percentage of their total fault when that of D2 is also considered
cannot be specified, for that issue has not been litigated.  Now
assume the jury in the second trial finds total damages to be
$1,000,000, P to be fifty percent at fault, D1 to be ten percent at
fault and D2 to be forty percent at fault. [Fn. 12]  Except for the
first trial, D2 would have to pay P $400,000.  But P has already
received $500,000 and D2 is entitled to offset this amount against
the award. [Fn. 13]  Thus, under this example P obtains no double
recovery and the result is not inconsistent with the first trial. 

          Now change the findings in the second trial so that P is
found twenty percent at fault, D1 is ten percent, and D2 is seventy
percent.  Except for the first trial, D2 would have to pay P
$700,000.  But since P has already received $500,000 from the first
trial, D2 is entitled to an offset of this amount and will only be
liable for $200,000.  Thus P's total recovery is $700,000.  P's
recovery is in no sense double, and the second judgment is not
inconsistent with the first, for the fault of D2 was not considered
in the first trial. [Fn. 14]  
          In summary, AS 09.17.080 does not contain or require an
implied one-action rule.  To the contrary, the drafters of the
model act upon which it is based anticipated the possibility of
more than one action.  Further, whether the overall interests of
judicial economy are advanced by the one-action rule remains
unclear, and the rule is unnecessary to prevent inconsistent
results and double recoveries.  For these reasons we conclude that
the trial court did not err in refusing to grant summary judgment
to Universal. [Fn. 15] 
          AFFIRMED.


                            FOOTNOTES


Footnote 1:

     See Neary v. McDonald, 956 P.2d 1205 (Alaska 1998). 


Footnote 2:

     The 1989 statute was enacted by initiative and was codified as
AS 09.17.080.  It has been superceded by a statute, also codified
as AS 09.17.080, that was enacted in 1997.  The 1997 statute
differs substantially from the 1989 version. 


Footnote 3:

     12 U.L.A. 126 (1977).


Footnote 4:

     Benner v. Wichman, 874 P.2d 949, 958 n.19 (Alaska 1994)
(quoting Unif. Comp. Fault Act sec. 2 cmt., 12 U.L.A. 50 (Supp.
1993)
(emphasis added)).


Footnote 5:

     See Matter of D.D.S., 869 P.2d 160, 164 n.5 (Alaska 1994); 
Johnson v. Schaub, 867 P.2d 812, 817 n.11 (Alaska 1994); Crews v.
Crews, 769 P.2d 433, 435 (Alaska 1989); Armour v. Alaska Power
Auth., 765 P.2d 1372, 1374 (Alaska 1988).  See also Slager v. HWA
Corp., 435 N.W.2d 349, 352 (Iowa 1989) (citing 2A N. J. Singer,
Sutherland Statutory Construction sec. 52.05, at 546 (revised ed.
1984)).


Footnote 6:

     420 N.W.2d 816 (Iowa 1988).


Footnote 7:

     Id. at 820.


Footnote 8:

     Benner, 874 P.2d at 958 n.19 (quoting Univ. Comp. Fault Act
sec.
2 cmt., 12 U.L.A. 50 (Supp. 1993)).


Footnote 9:

     One commentator who advocates the use of three doctrinal
devices to mandate what is essentially a one-action rule in a broad
variety of contexts in order to avoid multiple suits nonetheless
cautions:  

               What I have said here goes to the
relative merits of the devices considered.  Beyond that, I must
acknowledge the real possibility that all of them may carry evils
worse than the problem to which they are addressed.  Use of any of
them may foment assertion of claims that otherwise would never be
litigated and thereby increase the adjudication burden of the
courts. . . .  Even if the devices do not generate additional
claims, they may deter settlement of existing ones.  Moreover, they
may increase the expenses of the parties, for example, by
increasing recovery.

               I do not know how to assess these risks,
but their presence argues for caution in developing a response to
the multiplicity problem.  Further experimentation in all three
directions therefore seems desirable to me.  It is as well,
perhaps, that the responses thus far have been ad hoc and
tentative.  The remedy is sometimes worse than the disease.

John C. McCoid, A Single Package for Multiparty Disputes, 28 Stan.
L. Rev. 707, 728 (1976).


Footnote 10:

     In the first action D2's fault was not assessed because he was
a non-party.  See Benner, 874 P.2d at 958. 


Footnote 11:

     The elements of collateral estoppel, or "issue preclusion,"
are:

               (1) the party against whom the preclusion
is employed was a party to or in privity with a party to the first
action;
               (2) the issue precluded from relitigation
is identical to the issue decided in the first action;
               (3) the issue was resolved in the first
action by a final judgment on the merits; and 
               (4) the determination of the issue was
essential to the final judgment.  

Renwick v. State, Bd. of Marine Pilots, 971 P.2d 631, 634 (Alaska
1999) (citing Jackinsky v., Jackinsky, 894 P.2d 650, 654 (Alaska
1995)).


Footnote 12:

     We cannot precisely duplicate Universal's hypothetical here
because the jury has to find D1 at least slightly at fault because
of the collateral estoppel effect of the first judgment. 


Footnote 13:

     See Norcon, Inc. v. Kotowski, 971 P.2d 158, 171 (Alaska 1999)
(citing Navistar Int'l Transp. Co. v. Pleasant, 887 P.2d 951, 957-
58 (Alaska 1994) (offsetting plaintiff's recovery against second
defendant by amount of recovery against first defendant)). 


Footnote 14:

     The theoretical problems with the second trial are that D1
paid too much and D2 too little.  But those problems exist even if
there is no second action and thus are not cured by the bar imposed
under the one-action rule.  Common law contribution in favor of a
defendant who has paid more than his comparative share of damages
would help to address these problems.  See Restatement (Third)
Torts: Apportionment of Liability sec. 33, cmt. f. (Proposed Final
Draft (March 22, 1999)) ("[A] severally liable defendant might be
sued with less than all of the relevant persons and be liable for
more than its own percentages of responsibility and therefore be
entitled to contribution.").  But whether this remedy is available
is not a question presented in this case and we express no view on
it. 


Footnote 15:

     The trial court was mistaken in one respect in its discussion
of Universal's one-action contention.  The court suggested
Universal would be bound by the earlier ruling that exonerated
McDonald's parents from fault.  But because Universal was not a
party to the earlier action, it is not bound by the determinations
made there.