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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Stinson v. Holder (3/17/00) sp-5252

Stinson v. Holder (3/17/00) sp-5252

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
	


LARRY W. STINSON,			)
					)	Supreme Court No. S-8286
	   Appellant,		)
					)	Superior Court No.
v.					)	4FA-94-1778 CI
					)
RUSSELL and JUDY HOLDER,	)	O P I N I O N
					)
	   Appellees.		)	[No. 5252 - March 17, 2000]
______________________________)



Appeal from the Superior Court of the State of 
Alaska, Fourth Judicial District, Fairbanks,
	Charles R. Pengilly, Judge.


Appearances:  Fleur L. Roberts, Law Offices of 
Fleur L. Roberts, for Appellant.  Gary Foster, 
Law Office of Gary Foster, Fairbanks, for 
Appellees.  


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


EASTAUGH, Justice. 


1. INTRODUCTION

Following a trial he did not attend, real estate agent 
Larry Stinson was found by the jury to have breached his fiduciary 
duty to buyers of a home and was held liable for damages.  He moved 
under Alaska Civil Rule 60(b) for relief from the resulting 
judgment, making a prima facie showing that he had been incompetent 
at the time of trial.  The superior court denied his motion without 
determining whether Stinson had been incompetent.  We hold that it 
was an abuse of discretion not to make that determination, and 
therefore remand.  If the superior court finds that Stinson was 
incompetent, he will be entitled to relief from judgment and to a 
new trial.
2. FACTS AND PROCEEDINGS
Russell and Judy Holder purchased a home through Larry 
Stinson and his employer, ReMax of Fairbanks.1   Concerned by 
cracked windows which appeared to be caused by settlement, they 
conditioned their purchase on a satisfactory engineer's report. 
Engineer Brian Borjesson inspected the house and reported that he 
foresaw no major future problems. 
Within four months after the Holders took possession, 
cracks began to appear in the walls.  The problem steadily worsened 
and the Holders filed suit against the sellers, the Eckerts.  The 
Holders later amended their complaint to add claims against 
Stinson, ReMax of Fairbanks, and the sellers' real estate agent, 
Randy Smith. 

An attorney represented Stinson during the pleading and 
discovery phases of the case, but the court permitted the attorney 
to withdraw with Stinson's consent on March 6, 1997.  A few days 
before the trial commenced on June 10, 1997, Stinson advised the 
court that he would not be present due to a "serious medical 
condition" and asked the court to play his videotaped deposition 
testimony in his absence.  He was neither present nor represented 
at trial.  
Judge Charles R. Pengilly presided over the jury trial of 
the Holders' claims.  Midway through the trial, the court addressed 
Stinson's absence and decided to advise the jury that Stinson was 
absent because of health reasons and that it should not draw any 
inference from that fact.  ReMax and the Eckerts then sought to 
impeach Stinson's preserved deposition testimony by proffering 
evidence of Stinson's current medical problems and alleged memory 
loss going back to when he gave the first of several depositions. 
 The Holders' attorney objected, claiming the late notice made it 
impossible for him to effectively address Stinson's alleged memory 
problems.  The court acknowledged that it was a close question, but 
disallowed testimony from Stinson's treating physicians at the Mayo 
Clinic and from Stinson's wife, Aviva Stinson.  The court noted 
that its concern was for the parties before it and concluded that 
the Holders would be substantially prejudiced if they were unable 
to conduct discovery.  Stinson's videotaped deposition testimony 
was played for the jury.

The jury found that Stinson had failed to disclose 
relevant information to the Holders, causing them to suffer damages 
totaling $280,000.  Based on its conclusion that ReMax of Fairbanks 
was vicariously liable, the court entered judgment for the Holders 
against Stinson and ReMax jointly and severally.  ReMax moved for 
judgment notwithstanding the verdict and for a new trial.  Stinson, 
whose wife was by then acting for him under his power of attorney, 
joined in ReMax's motion after the briefing was complete.  The 
superior court denied the motions.
Meanwhile, in a new superior court proceeding, Aviva 
Stinson petitioned in August 1997 for appointment of a conservator 
for Stinson; she alleged that he was unable to manage his property 
and affairs.  She attached copies of Stinson's Mayo Clinic records 
to support her petition.  The records noted that Stinson exhibited 
mental deficiencies in learning, memory, cognitive speed and 
flexibility, and confrontation naming, indicating an Alzheimer's 
type dementia.  Following a hearing, Judge Ralph R. Beistline found 
that Stinson was "unable to manage property and financial affairs 
because of incapacity" and appointed two conservators, one of whom 
was Stinson's son, Dr. Lawrence William Stinson, Jr.  Aviva Stinson 
notified Judge Pengilly of the conservatorship action and of the 
conservators' appointments.
In January 1998 Stinson, through his son, filed a Rule 
60(b) motion for relief from the Holders' judgment against him.  
The motion papers claimed that relief was required because Stinson 
had been incompetent.  Following briefing and the submission of 
affidavits and transcripts discussing Stinson's mental state, Judge 
Pengilly denied the motion.  The court conducted no hearing to 
resolve possible fact disputes before denying the motion.  We 
discuss the motion in more detail in Part III.A, below.

Stinson appeals.2 
3. DISCUSSION
Stinson argues that it was error to deny his Civil Rule 
60(b) motion without conducting an evidentiary hearing.  He also 
argues that reversal is required because the court committed other 
alleged errors: (1) failing to include the names of Brian Borjesson 
and Randy Smith on the special verdict form; (2) excluding evidence 
of his mental state when ReMax and the Eckerts sought to impeach 
his deposition testimony; and (3) failing to grant his motions for 
judgment notwithstanding the verdict and for a new trial.
1. The Motion for Civil Rule 60(b) Relief
1. Stinson's alleged incompetency
In January 1998 Stinson moved under Civil Rule 60(b) for 
relief from the judgment entered against him about six months 
before.3   The motion papers quoted from Mayo Clinic records to 
support Dr. Stinson's allegation that his father suffered from 
dementia and was incapable of understanding the consequences of 
failing to attend the trial or to request a trial continuance.  He 
also argued that Stinson's competence at the time of his 
depositions was in doubt.  Dr. Stinson also informed the court that 
Stinson had been adjudicated incompetent in the conservatorship 
proceeding.

Stinson sought relief under Rule 60(b)(1), on the theory 
his incapacity caused mistake, inadvertence, surprise or excusable 
neglect; under Rule 60(b)(4), on the theory his incapacity resulted 
in entry of a void judgment; or under Rule 60(b)(6), on the theory 
other reasons justified relief from the judgment.
In opposition, the Holders argued that there was no 
cognizable evidence that Stinson was legally incompetent when the 
matter went to trial in June 1997.  The Holders filed excerpts of 
sworn hearing and deposition testimony from a judgment debtor 
inquiry to support their contention that Stinson was not legally 
incompetent.  Those transcripts, however, also included Dr. 
Stinson's and Aviva Stinson's testimony that Stinson was impaired 
before and around the time of the 1997 trial.
Dr. Stinson, a medical doctor, submitted his own 
affidavit with Stinson's reply memorandum.  He stated in it that 
his father's memory problems began as early as 1993, recurred in 
1994, and became "steadily progressive" in 1995.  He also stated 
that Alzheimer's and dementia are not conditions that can be turned 
off and on but are chronic and progressive.  He affied that his 
father's treating physician, Dr. Janice Onorato, a neurologist, 
would be available to testify at a hearing, and that he would be 
filing a sealed report from a neurologist within the week.  The 
reply memorandum again noted the adjudication of incompetence 
entered in the conservatorship proceeding. 

The superior court denied Stinson's motion without 
conducting an evidentiary hearing.  A day after the denial order 
was distributed the court received the Holders' request for a 
hearing under Rule 77(e) and Stinson's request for a conference to 
schedule an evidentiary hearing under Rule 60(b).  Because the 
court had already denied Stinson's motion, it stamped "moot" on the 
hearing requests.
Stinson argues on appeal that it was an abuse of 
discretion to deny him a hearing on his motion and to deny his 
motion.

Rule 60(b) permits the court to grant relief from 
judgment under certain circumstances.4   The rule "should be 
liberally construed to enable courts to vacate judgments whenever 
such action is necessary to accomplish justice."5   But we will not 
disturb a trial court's denial of a Rule 60(b) motion except upon 
a showing of abuse of discretion.6   To find an abuse of discretion, 
we must be left with the definite and firm conviction on the whole 
record that a mistake has been made.7 
In Lovell v. Lovell8  we held that the movant made a 
showing of excusable neglect under Rule 60(b)(1), entitling her to 
relief, because the record disclosed that her failure to appear at 
a divorce property division hearing was not the result of her 
"free, calculated, and deliberate choice."9   We deemed significant 
the fact that she had a long history of medical and psychological 
problems which were known to the court.10   Given her absence and her 
known problems, we had serious doubts concerning the fairness of 
the proceeding.11   In that case, notice to the trial court that a 
problem had arisen was "sufficient to trigger an inquiry."12   Her 
absence and psychological problems justified setting aside the 
judgment for excusable neglect.13 

The motion papers here revealed a genuine dispute about 
Stinson's competence when he permitted his defense attorney to 
withdraw, chose not to attend the trial or present a defense, and 
failed to move for a continuance.  These circumstances demonstrated 
the probable prejudice resulting from any incompetency, and 
therefore demonstrated the materiality of the dispute.  Given the 
evidence submitted with the motion, the opposition, and the reply, 
it was necessary to conduct an evidentiary hearing to allow 
testimony about Stinson's mental state and to find facts about his 
competence at relevant times. The superior court had discretion to 
decide whether to hear oral argument on Stinson's motion,14  and it 
could well have decided that oral argument on the legal 
propositions presented was not necessary.  But it was an abuse of 
discretion to deny the motion without hearing and determining the 
relevant facts.  Stinson's conservator represented that he would 
present testimony and evidence that Stinson was incompetent at 
critical times in the litigation.  Given Stinson's prima facie 
showing of incompetence, and the plausibility of his claim that his 
incapacity prejudiced him at trial, the court could not deny 
Stinson's Rule 60(b) motion without resolving these fact disputes.15 

The failure to conduct a hearing or resolve fact disputes 
about a party's competence at trial does not inevitably require a 
reversal.  Has the party shown that the failure to hold a hearing 
prejudiced him?16  
We conclude that Stinson has demonstrated that his 
alleged incompetence could have affected the outcome of the trial 
or the entry of judgment in at least two ways.  
First, if he was not competent, Stinson could not be 
deemed to have knowingly consented to his attorney's withdrawal 
shortly before trial, to have knowingly waived attending the trial 
or presenting evidence, or to have knowingly permitted the trial to 
proceed without him.  Counsel at trial could have called Stinson as 
a witness, perhaps to demonstrate his inability through his own 
testimony to rebut the evidence against him.  Given the credibility 
issues at the heart of the Holders' claims against Stinson, such a 
demonstration might have led the jury to view the Holders' evidence 
more critically, and Stinson's position and his deposition 
testimony more favorably.  Counsel might also have bolstered the 
mid-trial efforts of ReMax and the Eckerts to show that Stinson was 
incapacitated when he was deposed.  Counsel might have sought a 
continuance to permit Stinson to attend the trial or to allow him 
to be examined medically.

Second, counsel might have objected to the special 
verdict form's failure to allow the jury to allocate fault to Randy 
Smith.  Smith, Stinson's co-real estate agent at ReMax, settled 
with the Holders before trial.  Under Alaska law in effect at the 
time of the Holders' lawsuit, it would have been appropriate to 
request an instruction requiring the jury to allocate fault among 
all parties, including parties who had settled.17   The parties 
attending the trial discussed including Smith on the verdict form 
and the court agreed that Smith should be included.  But ultimately 
Smith's name did not appear on the verdict form.  Neither ReMax nor 
the Eckerts objected to this omission before the jury was 
instructed or dismissed.  The omission prevented allocating any 
fault to Smith. 
Stinson's liability for damages would have been reduced 
if the jury had allocated fault to Smith.  The omission was 
therefore prejudicial.  We must presume that if Stinson had not 
permitted his attorney to withdraw, he would have objected to the 
omission and avoided the resulting prejudice.

We conclude that if Stinson was incompetent at critical 
stages of the litigation, it potentially caused him to suffer 
prejudice that would justify setting aside the judgment against 
him.  It is consequently necessary to remand to determine his 
mental state at relevant times, such as when he was deposed, when 
he consented to his attorney's withdrawal, and when he decided not 
to attend the trial.  If the superior court finds that Stinson was 
incompetent at any of these times, it must also determine whether 
that incompetence prejudiced him, and if so, the relief needed to 
remedy the prejudice.  Depending on the nature of any prejudice, 
Stinson may be entitled to a new trial to relitigate some or all of 
the issues tried in June 1997.
2. The lawsuit against Borjesson

Because of the possibility the court on remand will not 
find that Stinson was incompetent, we next consider Stinson's other 
appellate arguments.
The engineer, Borjesson, was not a party at the time of 
trial.  Two months after the jury returned its verdict against 
Stinson, the Holders filed a separate lawsuit against Borjesson for 
professional negligence, negligent misrepresentation, negligent 
infliction of emotional distress, and breach of contract.  Stinson 
claims that the Holders' complaint against Borjesson was newly 
discovered evidence that required relief from the judgment under 
Rule 60(b)(2).

We reject Stinson's argument.  Rule 60(b)(2) permits 
relief from judgment for "newly discovered evidence which by due 
diligence could not have been discovered in time to move for a new 
trial under Rule 59(b)."18   Although the Holders' complaint may have 
been "newly discovered," it was not "evidence" of Borjesson's 
liability and did not establish his fault.  The evidence relevant 
to Stinson's defense in the Holders' lawsuit was Borjesson's 
potential fault -- not the fact of the Holders' lawsuit against 
Borjesson.  Evidence of Borjesson's fault, if any, was available 
before the trial.  Moreover, Stinson's counsel was on notice, long 
before trial, of the possibility that Borjesson had contributed to 
the loss.  The Eckerts had filed a third-party complaint against 
Borjesson in September 1995; it asserted that Borjesson was 
negligent in fulfilling an alleged duty to the Holders.  Stinson 
became a party around the same time; he obtained counsel soon after 
the Eckerts filed their third-party complaint. Stinson's counsel 
therefore had many months before he withdrew in which to evaluate 
Borjesson's potential responsibility for the Holders' damages.
The superior court did not abuse its discretion in 
failing to grant relief to Stinson under Rule 60(b)(2).
2. Stinson's Claims of Trial and Post-judgment Error
We must also consider Stinson's non-Rule 60(b) arguments.
1. Failure to include Borjesson and Smith on the 
verdict form

As a type of jury instruction, a special 
verdict form is subject to the same standard 
of review as other jury instructions. The 
trial court's jury instructions generally 
involve questions of law which are subject to 
the independent judgment standard of review. 
 Errors in jury instructions will not be 
grounds for reversal unless they caused 
prejudice.  We review de novo the question 
whether there has been prejudicial error in 
jury instructions.  The decision whether to 
include a particular instruction rests with 
the discretion of the trial court.[19]


Stinson argues that the superior court erred in refusing 
to allow the jury to apportion fault to Borjesson and Smith by 
omitting their names from the special verdict form.  He first 
argues that he is entitled a credit reflecting Borjesson's share of 
the fault.20   The Eckerts had proposed a verdict form apportioning 
fault to Borjesson and the Holders objected to it.  The court 
rejected the Eckerts' request because Borjesson was not a party. 
 
That ruling was not error.  Borjesson was not a party at 
the 1997 trial; under the law then in effect, a jury could not 
allocate fault to a non-party.21   Stinson, while he was represented 
by counsel, could have opposed Borjesson's summary judgment motion 
or filed a cross-claim that would have kept Borjesson in the 
lawsuit.  And, as the Holders observe, Stinson might have had 
tactical reasons for failing to oppose Borjesson's dismissal.  It 
is unimportant that Borjesson had previously been a party; because 
the claims against him had been dismissed, he was not a party when 
the case was tried.  It would have been error to allow the jury to 
apportion damages based on Borjesson's alleged fault.

Our discussion of Stinson's claim of incompetence in Part 
III.A.1 makes it unnecessary to consider separately the omission of 
Smith's name from the special verdict form.  If Stinson was 
competent to waive the assistance of counsel and to decide not to 
attend the trial, it would be necessary to conclude that by failing 
 to object to the verdict form, he failed to preserve the issue of 
Smith's omission from the verdict form for appellate review.22   If 
Stinson was incompetent, he could not have knowingly waived 
objection to Smith's omission from the verdict form, and Smith's 
omission establishes the prejudice necessary for Rule 60(b) relief.
2. Excluding evidence of incompetence
Although Stinson did not attend the trial, ReMax and the 
Eckerts proffered evidence at trial that Stinson had been 
incompetent when his depositions were taken.  The court rejected 
the evidence.
The issue of Stinson's incompetence at the time of trial 
makes it unnecessary for us to consider separately whether it was 
an abuse of discretion to exclude evidence about his incompetence 
when he was deposed.23   If Stinson was incompetent at the time of 
trial, he will be entitled to relief from the judgment; if he was 
competent, his failure to make an offer of proof at trial prevents 
him from raising the issue on appeal.24 

Stinson also argues that the superior court erred by 
failing to assess his competence during the trial.  Given his 
absence at trial, Stinson argues that the court should have acted 
sua sponte to discharge its duty to protect the interests of 
incompetent persons incapable of protecting their own interests. 
Because we remand for a determination of Stinson's competency to 
dismiss his counsel and absent himself from the trial, we do not 
need to determine whether the superior court should have inquired 
into the issue at trial.
3. Denial of motions for new trial and judgment 
notwithstanding the verdict 

Stinson argues that it was error to deny his motions for 
judgment notwithstanding the verdict and for a new trial.  We 
review the denial of a motion for a directed verdict "to determine 
whether the evidence, when viewed in the light most favorable to 
the non-moving party, is such that reasonable men could not differ 
in their judgment."25   We review the denial of a motion for a new 
trial for abuse of discretion.26 

 Stinson's failure to move for a directed verdict would 
normally preclude him from arguing that it was error not to grant 
his motion for judgment notwithstanding the verdict.27   And his 
failure to file a timely motion for new trial would normally 
prevent him from arguing on appeal that it was error to deny him a 
new trial.28   If Stinson was competent at the time of trial, these 
procedural deficiencies dispose of these claims of error.  If he 
was not competent, he will be entitled to relief under Rule 60(b) 
for other reasons.29   We therefore need not reach the merits of 
these arguments.
IV.	CONCLUSION
We therefore REVERSE the denial of Stinson's Rule 60(b) 
motion and REMAND for further proceedings.


Footnotes:

1 	The Holders claimed that Stinson represented to them that 
he was their agent.  In fact, he was employed by ReMax, which 
represented the sellers, and in a deposition Stinson denied that he 
was the Holders' agent. 
2 	Among the original defendants, only Stinson is a party to 
this appeal.  Counsel for Stinson's conservator represents Stinson.
3 	Appellant's excerpt of record fails to include the motion 
for Rule 60(b) relief and the responsive court order.  See Alaska 
R. App. P. 210(c)(2).
4 	See Alaska R. Civ. P. 60(b), providing in relevant part: 

(b) Mistakes -- Inadvertence -- Excusable 
Neglect -- Newly Discovered Evidence -- Fraud 
-- Etc.  On motion and upon such terms as are 
just, the court may relieve a party or a 
party's legal representative from a final 
judgment, order, or proceeding for the 
following reasons:
(1)  mistake, inadvertence, surprise or 
excusable neglect;
(2)  newly discovered evidence which by 
due diligence could not have been 
discovered in time to move for a new 
trial under Rule 59(b); 
. . . .
(4)	the judgment is void; 
. . . .
(6)  any other reason justifying 
relief from the 
operation of 
the judgment.	
		
5  	O'Link v. O'Link, 632 P.2d 225, 230 (Alaska 1981).
6 	See McCracken v. Davis, 560 P.2d 771, 776 (Alaska 1977).
7 	See id. (citing Gravel v. Alaska Village, Inc., 423 P.2d 
273, 277 (Alaska 1967)).
8 	645 P.2d 151 (Alaska 1982).
9 	Id. at 154 (citing O'Link, 632 P.2d at 229-30).
10 	See id.
11 	See id.
12 	Id.
13 	See id.
14 	See Alaska R. Civ. P. 77(e)(4).
15 	Cf. McCracken, 560 P.2d at 775 (concluding that party was 
not prejudiced when court denied hearing on motion to set aside 
judgment because court was "fully apprised of the issue before the 
court and the appellant's position was fully and fairly presented 
for the judge's consideration").
16	See Alaska R. Civ. P. 61 ("The court at every stage of 
the proceeding must disregard any error or defect in the proceeding 
which does not affect the substantial rights of the parties."); 
Cleary Diving Serv. v. Thomas, Head & Greisen, 688 P.2d 940, 942 
(Alaska 1984) ("A party on appeal who alleges that oral argument 
was improperly denied must show both that the denial was in error 
and that the error caused substantial prejudice.").
17 	See former AS 09.17.080(a)(2) (1996); Benner v. Wichman, 
874 P.2d 949, 958 (Alaska 1994). 
18 	Alaska R. Civ. P. 60(b)(2).
19 	Coulson v. Marsh & McLennan, Inc., 973 P.2d 1142, 1150 
n.21 (Alaska 1999) (citations omitted).
20 	See former AS 09.17.080 (1996) (providing for 
apportionment of damages amongst parties, including third-party 
defendants and persons released under former AS 09.16.040).
21 	See former AS 09.17.080 (1996); Benner, 874 P.2d at 957-
58. 
22 	See Alaska R. Civ. P. 51(a) (providing that no party may 
assign as error failure to give instruction unless party objects).
23 	We review challenges to a trial court's decision to 
exclude evidence for abuse of discretion.  Agostinho v. Fairbanks 
Clinic Partnership, 821 P.2d 714, 721 n.2 (Alaska 1991).
24	See Alaska R. Evid. 103(a)(2) (providing that error may 
not be predicated upon ruling which excludes evidence unless 
substantial right of party is affected and offer of proof was 
made).   Here, even though ReMax and the Eckerts made an offer of 
proof to admit evidence of Stinson's incompetence to impeach his 
deposition testimony, Stinson made no such offer.  In fact, Stinson 
made clear to the court that he desired that his deposition 
testimony be heard in his absence.  If he was competent, his stated 
wish to the court contradicts this asserted error.
25 	Holiday Inns of Am., Inc. v. Peck, 520 P.2d 87, 92 
(Alaska 1974).
26 	See Buoy v. ERA Helicopters, Inc., 771 P.2d 439, 445 
(Alaska 1989).
27 	See Alaska R. Civ. P. 50(b); Metcalf v. Wilbur, Inc., 645 
P.2d 163, 170 (Alaska 1982).
28 	See Alaska R. Civ. P. 59(b) (providing that motion for 
new trial shall be served not later than ten days after date shown 
in clerk's certificate of distribution on judgment).  Judgment was 
first distributed on July 11, 1997.  Final judgment was distributed 
on September 2.  Stinson did not join in ReMax's motion for a new 
trial until September 24.  The court denied the motion September 
29.  The judgment was corrected on October 22 but Stinson did not 
refile his motion for a new trial within ten days of that date, 
either.
29 	See Lovell, 645 P.2d at 154 (stating basic justice 
required that judgment be set aside and that party be given day in 
court when party absent during proceedings and had known 
psychological problems).

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