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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Beaux v Jacob (09/07/2001) sp-5463

Beaux v Jacob (09/07/2001) sp-5463

     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
                                 


WILEY F. and L'MARIE BEAUX,   )
                              )    Supreme Court Nos. S-9265/9395
          Appellants/         )
          Cross-Appellees,    )    Superior Court No.
                              )    3AN-97-1812 CI
     v.                       )
                              )    O P I N I O N
JACK and JANET JACOB,         )
                              )    [No. 5463 - September 7, 2001]
          Appellees/          )
          Cross-Appellants.   )
______________________________)



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


          Appearances:  A. William Saupe, Ashburn &
Mason, Anchorage, for Appellants/Cross-Appellees.  Ronald L. Baird,
Office of Ronald L. Baird, Anchorage, for Appellees/Cross-
Appellants.  


          Before: Fabe, Chief Justice, Eastaugh, Bryner,
and Carpeneti, Justices.   [Matthews, Justice, not participating.] 


          EASTAUGH, Justice.


I.   INTRODUCTION
          The superior court awarded damages to purchasers of a
home after finding that the sellers violated the Disclosures in
Residential Real Property Transfers Act.  We hold that it did not
clearly err in so finding and that it implicitly addressed the
sellers' allegations of comparative fault and failure to mitigate
damages.  But largely because the damages awarded exceeded the cost
of putting the home in the condition the disclosure form
represented, we reverse the damage award and remand for further
proceedings.  We also remand because prejudgment interest must be
recalculated to distinguish between damages for economic loss and
damages for harm to property.
II.  FACTS AND PROCEEDINGS
          In 1976 Wiley Beaux, a licensed engineer and real estate
developer, subdivided a parcel of real property on the north shore
of Campbell Lake in Anchorage.  Beaux selected the lot at 3300
North Shore Drive for his family home.  Construction began in 1976,
with Beaux serving as the general contractor.
          The original design called for a one-floor, ranch-style
home with a crawl space, but Beaux decided to build a full basement
beneath the first floor.  Because excavation of the lot extended
several feet below the lake level, groundwater was a concern.
          To control the groundwater underneath the basement slab,
Beaux installed a sump in the basement mechanical room.  The sump
was equipped with an automatic pump activated by a flotation
device, and was connected by a permanent outlet to the municipal
sewer system.  The Beauxs refer to this arrangement as the "main
sump." 
          During construction, Wiley Beaux also installed a
vertical eight-inch diameter corrugated aluminum pipe extending
four feet below the basement concrete slab.  This pipe was
originally designed to aid in the installation of a jacuzzi pool.
But after the pool was installed, Beaux decided to leave the pipe
in place.
          The Beauxs resided in the house from 1978 until 1994.
They controlled the groundwater level under the house by using both
the main sump in the mechanical room and a portable pump to drain
water out of the eight-inch pipe in the pool room.  The Beauxs
called the latter arrangement the "deep sump."  They did not
experience any groundwater infiltration in the basement.
          In February 1994 Wiley and L'Marie Beaux listed the house
for sale.  Soon thereafter, Jack and Janet Jacob visited the house
for a preliminary view.  After a series of offers and
counteroffers, the parties executed an earnest money agreement for
the sale of the house on March 23, 1994.
          Before the sale, the Beauxs gave the Jacobs a real
property transfer disclosure form as required by AS 34.70.010 of
the Disclosures in Residential Real Property Transfers Act. [Fn. 1] 
A question on the disclosure form asked: "Is there any indication
of water/seepage/dampness in basement/crawl space?  If yes,
explain."  In response, the Beauxs checked "NO," but also wrote by
hand that "Sump Pumps must be maintained and used."  (Emphasis
added.)
          After the Jacobs moved in, they used the automatic sump
pump in the mechanical room to control the water table under the
basement; they did not use the eight-inch pipe in the pool room as
a sump.
          In 1995 the Jacobs experienced three episodes of water
infiltration in the basement.  On each occasion the basement carpet
was soaked.  
          In August 1995 the Jacobs hired Greg Carpenter, a
geotechnical engineer, to review the water infiltration problem.
Carpenter opined that precipitation and the proximity of the house
to Campbell Lake caused the water table to rise to (or above) the
level of the basement slab, resulting in water infiltration.
Carpenter concluded that a perimeter drain system would control the
water infiltration. 
          In August 1996 the Jacobs hired a contractor to install
an exterior perimeter drain system.  The Jacobs also installed new
carpet in the basement.
          In March 1997 the Jacobs sued the Beauxs, alleging
misrepresentation, failure to disclose, and violation of the
Disclosures in Residential Real Property Transfers Act.  After a
bench trial, the superior court found that the Beauxs had
negligently failed to inform the Jacobs of the use of the deep sump
for removal of groundwater.  On September 24, 1999 the superior
court entered a judgment of $56,393.88 against the Beauxs.  The
judgment included $8,126.63 of prejudgment interest from January
12, 1997, when the Beauxs received written notification of the
Jacobs' claims, and an Alaska Civil Rule 82(b)(1) attorney's fees
award of $7,116.89.  The Beauxs appeal, and the Jacobs cross-
appeal.
III. DISCUSSION
     A.   The Superior Court Did Not Clearly Err in Finding that
the Beauxs Failed to Use the Degree of Reasonable Care that a
Reasonably Prudent Person Would Have Used in Answering the
Disclosure Form's Questions. 
          The superior court found by a preponderance of the
evidence that the Beauxs had negligently failed to inform the
Jacobs of the use of the deep sump to control the groundwater
beneath the basement slab.  The superior court found that the
Beauxs' statement in the disclosure form that "Sump Pumps must be
maintained and used," without more elaboration, was ambiguous, and
subject to a reasonable interpretation that the term "sump pumps"
referred only to the permanently installed automatic sump pump in
the mechanical room.  The superior court therefore concluded that
the Beauxs had "failed to use that degree of reasonable care that
a reasonably prudent person would have used in responding in good
faith to some of the questions in the Real Property Transfer
Disclosure Form."

           The Beauxs contend on appeal that the superior court
clearly erred in finding that the statement "Sump Pumps must be
maintained and used" was ambiguous and was subject to a reasonable
interpretation that the term "sump pumps" referred only to the
permanent sump in the mechanical room.  They argue that the plural
"pumps" cannot reasonably be interpreted to refer to a single pump.
The Beauxs further argue that while they may have used the term
"sump pump" in an unconventional sense when referring to the deep
sump, the Jacobs' actual knowledge of the deep sump and its utility
in controlling the groundwater eliminated any ambiguity in their
statement.  The Beauxs note that they showed the Jacobs the deep
sump and explained to them how to use it.  The Beauxs also note
that they gave the Jacobs a written instruction sheet which, they
argue, explained that the deep sump was effective at lowering the
level of the groundwater underneath the basement.  The Beauxs
further note that the Jacobs admitted at trial (1) that they knew
about the deep sump; (2) that they had read and understood the
written pool instructions; and (3) that they knew how to work the
deep sump.  Finally, the Beauxs argue that further elaboration was
unnecessary because the Jacobs were sophisticated buyers -- he is
a medical doctor and she is a registered nurse -- who were familiar
with the use of sump pumps because they had previously lived on the
shore of Campbell Lake in a house that had three sump pumps.
          We review a trial court's finding of negligence under the
clearly erroneous standard, [Fn. 2] and we reverse only if we are
left with the definite and firm conviction, on the entire record,
that a mistake has been made. [Fn. 3] 
          The record contains substantial evidence supporting the
superior court's finding that the Beauxs' disclosure was ambiguous. 
The Jacobs correctly argue that while an engineer might broadly
describe the pipe in the pool room as a sump, an average home
purchaser would regard only the installation in the mechanical room
as a sump for home use.  Greg Carpenter, the geotechnical engineer
the Jacobs hired to review the water infiltration in the basement,
testified that "sump pump" usually refers to a permanent
installation, such as the one found in the mechanical room.  The
professional inspector who inspected the house before the sale also
used the term "sump pump" to refer only to the permanent
installation in the mechanical room.  Moreover, the Beauxs'
argument that the written pool instructions should have alerted the
Jacobs to the deep sump's utility in controlling the groundwater
level is not well taken.  The instructions imply that the deep sump
should be used only "[i]f pool is to be left empty for some time."
The instructions do not disclose the need to use the deep sump to
avoid water infiltration in the basement.  We therefore affirm the
superior court's finding of negligence.

     B.   The Findings Adequately Addressed Comparative Fault.

          The Beauxs next argue that the trial court erred in
failing to make fact findings regarding the Jacobs' comparative
fault.  The Beauxs contend that the trial court should have
apportioned fault to the Jacobs under the principle of comparative
negligence for:
          (1) their failure to read and think about the
clearly disclosed need to "maintain and use" both sump pumps; (2)
their unexplained failure to connect the disclosure statement to
their direct knowledge of the second pump; (3) their failure to
mention the second pump and pool room sump to the engineers; (4)
their unexplained failure to use the second pump sooner[; and (5)
their failure] to call the Beauxs for advice.[ [Fn. 4]] 

          The superior court's fact findings implicitly addressed
each of the Beauxs' allegations of comparative fault. [Fn. 5]  The
superior court found that the Beauxs' disclosure that "sump pumps
must be maintained and used" was ambiguous, and was subject to a
reasonable interpretation that the term "sump pumps" referred only
to the permanent sump in the mechanical room.  The superior court
also found that the Beauxs did not fully inform the Jacobs "of the
inadequacy of the permanent sump in the boiler room to keep the
water table at a safe level."  Finally, the superior court found
that the Beauxs did not fully inform the Jacobs of the need to use
the deep sump to prevent water infiltration into the basement. 
          These findings, read together, suggest that the superior
court found that the Jacobs reasonably interpreted the disclosure
statement, and necessarily imply that the superior court found that
the Jacobs "read and [thought] about" the disclosures.  The
findings are also inconsistent with finding that the Jacobs
negligently failed "to connect the disclosure statement to their
direct knowledge of the second pump."  And the finding that the
Jacobs were not informed of the need to use the deep sump to
prevent water infiltration in the basement precludes a finding that
they were negligent in failing to mention the deep sump to the
engineers, or in failing to use the deep sump sooner.  Because the
superior court implicitly addressed each of the Beauxs' allegations
of comparative fault, and because its findings were not clearly
erroneous, [Fn. 6] we need not remand for further fact findings. 
     C.   The Court Did Not Err Regarding Mitigation of Damages.
          The Beauxs assert that the superior court erred by
failing to find that the Jacobs breached their duty to mitigate
their damages. [Fn. 7]  We perceive no error.
          The Beauxs first argue that the Jacobs could have
mitigated their damages by contacting the Beauxs after the first
water infiltration episode to inquire about its cause and how it
could have been prevented.  But as commentator Dan Dobbs notes,
"Sometimes minimizing rules should not be applied because the risk
seems too high that the defendant will repeat misconduct if he [or
she] gets the benefit of the minimizing rules.  A defense must not
routinely operate to negate duties already imposed." [Fn. 8] 
Similarly, Restatement (Second) of Torts sec. 918, comment i,
provides: "[I]f the original act [of the tortfeasor] was
intentionally wrongful or negligent, it may not be unreasonable for
a person to decline to trust . . . the good will or skill of the
tortfeasor." [Fn. 9]  Given the superior court's finding that the
Beauxs had previously negligently failed to disclose the need to
use the deep sump to prevent water infiltration, [Fn. 10] we
conclude that the superior court was not obliged to find that the
Jacobs' failure to contact the Beauxs was a failure to mitigate. 
          The Beauxs next argue that the Jacobs could have
mitigated their damages by using the deep sump to prevent flooding
long before they actually began to do so in August 1995.  But this
argument is precluded by the superior court's implicit finding that
the Jacobs reasonably interpreted the disclosure statement to refer
only to the permanent sump pump in the mechanical room. [Fn. 11] 
          Finally, the Beauxs contend that the Jacobs should have
installed a permanent, automatic pump in the pool room for
approximately $1,500, rather than the perimeter drain system.  This
argument raises the question of the proper measure of damages and
we consider it in Part III.D.
     D.   The Damages Award Requires Remand.
          1.   The perimeter drain system
          The damages award included $22,192.86 for installing the 
perimeter drain system.  The Beauxs argue that the Jacobs cannot
recover the cost of installing the drain system because a permanent
pump installed in the deep sump would have sufficiently remedied
any wrong.
          A trial court's determination of damages is a finding of 
fact which we affirm unless it is clearly erroneous. [Fn. 12]  But
we  apply our independent judgment in deciding whether the trial
court's award of damages is based on an erroneous application of
law. [Fn. 13]
          Alaska Statute 34.70.090(b) provides that a person who
makes a negligent disclosure under AS 34.70 is liable for "actual
damages" suffered because of the negligent disclosure.  "Actual
damages" is synonymous with "compensatory damages." [Fn. 14]  The
general principle underlying the assessment of compensatory damages
in tort cases is that "an injured person is entitled to be replaced
as nearly as possible in the position he [or she] would have
occupied had it not been for the defendant's tort." [Fn. 15]  In
negligent nondisclosure cases, an appropriate measure of damages is
the "cost of putting the property in the condition that would bring
it into conformity with the value of the property as it was
represented." [Fn. 16]
          The Beauxs represented to the Jacobs that the house had
a sump pump system that would keep the basement dry.  They did not
represent that the house had a perimeter drain system, and the
Jacobs did not expect to purchase a house with a perimeter drain
system.  Thus, it was error to award damages measured by the cost
of a perimeter drain system, given the superior court's finding
that using both pumps had prevented water infiltration in the
basement in the sixteen years the Beauxs had occupied the house,
and given the absence of any finding that a perimeter drain system
was needed to remedy the Beauxs' nondisclosure.  The superior court
should have awarded the Jacobs the cost of installing a functional
sump pump system, i.e., installing a permanent pump in the deep
sump. [Fn. 17]  
          In defending the award, the Jacobs refer us to Greg
Carpenter's testimony that a permanent pump in the deep sump could
not be said with assurance to lower the water table at the
perimeter of the foundation of the house.  But the cited testimony
is Carpenter's evaluation of the adequacy of the mechanical room
sump for controlling the groundwater level.  He also testified that
if it was used diligently, the deep sump would prevent water
infiltration.  And the trial court's finding that using both sumps
had prevented infiltration while the Beauxs occupied the house 
necessarily forecloses affirming by relying on the Carpenter
testimony.  Concluding that it was legal error to select the wrong
measure of damages, we reverse this part of the damages award and
remand for further proceedings.
          2.   The basement carpet
          The damages award also included $7,918.70 for the cost of
replacing the basement carpet.  The Beauxs argue on appeal that the
superior court's award is clearly erroneous, because (1) their
conduct did not proximately cause the harm to the carpet; and (2)
the Jacobs are not entitled to recover the full cost of replacing
the depreciated basement carpet with "brand new, more expensive
Karastan carpet."
          The Beauxs first argue that they were not responsible for
the critical damage to the basement carpet.  They observe that an
insurance adjuster testified that the recreation room carpet was
reusable when he inspected it in August 1995, after the last
infiltration episode that can be causally linked to the Beauxs'
disclosures.  The Beauxs claim that the basement carpet was damaged
when an unidentified person accidentally opened the valve of an
abandoned water line in the house in October 1995, and when a sewer
backup occurred soon thereafter.  The Beauxs note that Jack Jacob
testified that the sewer backup was "kind of the final event" for
the carpet.  
          The superior court found that the damage directly
associated with the final two episodes of flooding in the basement
was minimal, and that "the damage to the basement floor covering
had already been done by the three previous water incursions."  The
superior court's finding is not clearly erroneous.  It is supported
by substantial evidence that replacement of the basement carpet was
necessary even before the final two episodes of water infiltration,
because the carpet was moldy.
          The Beauxs next argue that it was error to award the full
cost of installing new Karastan carpet in the basement.  The Beauxs
argue that the superior court's award unjustly enriched the Jacobs
by exceeding the value of the carpet that was damaged.  The Beauxs
claim that the Jacobs should have recovered only the depreciated
value of the basement carpet at the time the house was sold. [Fn.
18]
          Even though the damages award exceeded the depreciated
value of the basement carpet when the house was sold, we reject the
Beauxs' assertion that the Jacobs were limited to the depreciated
value of the carpet.  Awarding the full cost of replacing
depreciated carpet with new carpet confers a windfall upon the
Jacobs. [Fn. 19]  But we noted above the general principle that "an
injured person is entitled to be replaced as nearly as possible in
the position he [or she] would have occupied had it not been for
the defendant's tort." [Fn. 20]  Absent evidence of a market source
for used carpet of similar useful life, the Jacobs could only be
made whole if they recovered the cost of installing new carpet.  
          Nonetheless, the Jacobs were entitled to recover only the
cost of replacing the damaged carpet with carpet of like original
quality.  The appellate record does not clearly establish whether
the Karastan carpet was of quality similar to the original quality
of the replaced carpet.  We therefore remand for findings on the
comparative values of the new carpet and the old carpet in its
original condition.      
     E.   It Was Not Error to Award the Jacobs Partial Attorney's
Fees under Civil Rule 82(b)(1).

          The superior court awarded the Jacobs partial attorney's
fees of $7,116.89 under Alaska Civil Rule 82(b)(1).  The Jacobs had
moved for an award of reasonable, actual attorney's fees of $41,895
in reliance on the terms of the earnest money agreement, which
provides that "[i]n any action, proceeding or arbitration arising
out of this agreement, the prevailing party shall be entitled to
reasonable attorney's fees and costs."  The superior court granted
only partial fees because it ruled that the Jacobs' claims "did not
arise out of the earnest money agreement," but were tort and
statutory, rather than contract, causes of action.  The Jacobs
argue in their cross-appeal that they were entitled to reasonable
actual attorney's fees. 
          Interpretation of an attorney's fees clause in a contract
is a question of law which we review de novo. [Fn. 21]
          In Sullivan v. Subramanian, [Fn. 22] we held that a
lawsuit plaintiffs filed against their former landlord, alleging
breach of contract, retaliatory eviction, failure to return
security deposits, and violation of the Uniform Residential
Landlord and Tenant Act, [Fn. 23] arose out of the statute for
purposes of an attorney's fees award. [Fn. 24]  
          Similarly, Arizona courts have held that a contractual
provision for attorney's fees entitling the prevailing party in an
action "arising out of" the contract to an award of attorney's fees
does not apply when a plaintiff sues under a statutory cause of
action. [Fn. 25]  In Kennedy v. Linda Brock Automotive Plaza, Inc.,
the plaintiff, who had leased a car from the defendant, sued the
defendant under the Arizona "Lemon Law." [Fn. 26]  The Arizona
Court of Appeals held that the plaintiff's cause of action did not
"arise out of . . . contract" because it was purely statutory,
although the court "recognize[d] that a claim for relief under the
'Lemon Law' presupposes an express contract." [Fn. 27]
          The Jacobs alleged only tort and statutory causes of
action -- misrepresentation, failure to disclose, and violation of
AS 34.70 -- and did not allege a breach of contract or request
contract remedies.  We therefore hold that the Jacobs' claims did
not "arise out of" the earnest money agreement and consequently
affirm the superior court's award of partial attorney's fees under
Rule 82. [Fn. 28] 
     F.   Prejudgment Interest Must Be Recalculated.

          The Jacobs argue in their cross-appeal that they were
entitled to additional pre-judgment interest.  The judgment
included prejudgment interest from January 12, 1997, when the
Beauxs received written notification of the Jacobs' claims. [Fn.
29]  The Beauxs contend that under AS 09.30.070(b) [Fn. 30] the
superior court correctly treated prejudgment interest as accruing
from the date they received written notice of the Jacobs' claims. 
          
          The Jacobs argue that AS 09.30.070(b) applies only to
claims for "personal injury, death, or damage to property." [Fn.
31] Because, the Jacobs argue, their claims were for purely
economic loss, prejudgment interest should have accrued from March
23, 1994, when the parties executed the earnest money agreement and
the Jacobs' cause of action accrued.  
          When prejudgment interest begins to accrue is a question
of law which we review applying our independent judgment. [Fn. 32] 
We review interpretations of statutes de novo, adopting the rule of
law that is most persuasive in light of precedent, reason, and
policy. [Fn. 33]
          In several recent cases we have suggested, but not held,
that AS 09.30.070(b) applies only to actions for personal injury,
death, or damage to property. [Fn. 34]  In Henash v. Ipalook, we
observed that AS 09.30.070(b) "might only apply to actions for
'personal injury, death, or damage to property.'" [Fn. 35]  But
because the issue was inadequately briefed, we directed the
superior court in that case to determine on remand whether AS
09.30.070(b) applied to the plaintiff's claim under the Alaska Wage
and Hour Act. [Fn. 36]  Similarly, in Johnson v. Olympic
Liquidating Trust, we questioned whether AS 09.30.070(b) applied to
the plaintiff's contract claim, noting that the statute might apply
only "to cases involving 'personal injury, death, or damage to
property.'" [Fn. 37] But because the parties had assumed that the
statute applied, and because we did not need to decide the issue to
resolve the case, we declined to reach the issue. [Fn. 38]  And in
McConkey v. Hart, we stated that AS 09.30.070(b) modifies the
general rule of awarding prejudgment interest from the accrual date
of a cause of action by providing that "the starting date for
prejudgment interest on certain tort judgments shall be the date on
which the defendant receives written notice that a claim may be
brought, or the date on which process is served, whichever is
earlier." [Fn. 39] 
          We now explicitly hold that AS 09.30.070(b) applies only
to actions for personal injury, death, or damage to property, and
does not apply to claims for purely economic loss.  This approach
is consistent with our recent decision in Cole v. Bartels. [Fn. 40] 
In that case, purchasers of a home sued the defendant for failing
to disclose wall decay, in violation of the Disclosures in
Residential Real Property Transfers Act. [Fn. 41]  A jury found for
the plaintiffs, and the judgment included prejudgment interest from
the date the plaintiffs' claim accrued. [Fn. 42]  On appeal, we
affirmed the prejudgment interest award. [Fn. 43]  In affirming, we
rejected the defendant's argument that an award of prejudgment
interest on unexpended repair costs -- the purchasers had not yet
repaired the undisclosed defect at the time of trial -- constituted
an improper double recovery. [Fn. 44]  The Cole parties did not
cite AS 09.30.070(b), and we did not discuss whether the statute
applied to the purchasers' claim.  Nevertheless, affirming the
superior court's prejudgment interest award, which awarded
prejudgment interest from the date when the purchasers' claim
accrued, was consistent with reading AS 09.30.070(b) to be
inapplicable to a nondisclosure claim for purely economic loss.
[Fn. 45]
          A plaintiff's claim is for purely economic loss if the
plaintiff has suffered only "damage based on insufficient product
value." [Fn. 46]  For example, where a plaintiff seeks to recover
"loss of bargain" damages -- i.e., the difference in value of what
is received and its value as represented -- the claim is for purely
economic loss. [Fn. 47]  
          The Jacobs sought awards both for economic loss -- i.e.,
"loss of bargain" damages caused by the negligent disclosures --
and for property damage caused by the Beauxs' negligence -- i.e.,
damages for the cost of replacing the basement carpet, which was
damaged by water infiltration.  On remand, the superior court
should apply AS 09.30.070(b) only to the Jacobs' claims for "damage
to property." 
IV.  CONCLUSION
          For these reasons, we AFFIRM with respect to the issues
of liability, comparative fault, and mitigation of damages, but
REVERSE the damage award and REMAND for further proceedings
consistent with this opinion, including recalculation of the
prejudgment interest award.  And although we AFFIRM the methodology
by which the superior court calculated attorney's fees, changes in
the awards for damages and prejudgment interest will require that
the attorney's fees be recalculated.  


                            FOOTNOTES


Footnote 1:

     AS 34.70.010-.200.  AS 34.70.010 provides: "Before the
transferee of an interest in residential real property makes a
written offer, the transferor shall deliver . . . a completed
written disclosure statement . . . ."


Footnote 2:

     See State v. Guinn, 555 P.2d 530, 534-35 (Alaska 1976); Graham
v. Rockman, 504 P.2d 1351, 1353 (Alaska 1972). 


Footnote 3:

     See Hildebrandt v. City of Fairbanks, 863 P.2d 240, 243 n.4
(Alaska 1993).


Footnote 4:

     The Beauxs also argue that the Jacobs were comparatively
negligent because they installed a perimeter drain system to remedy
the water infiltration problem, rather than a less expensive
permanent pump in the deep sump.  This argument is most relevant to
the issue of damages and we therefore consider it in Part III.D.


Footnote 5:

     Whether particular conduct is negligent is a question of fact
normally reserved for the trier of fact.  See Schumacher v. City
and Borough of Yakutat, 946 P.2d 1255, 1256 n.1 (Alaska 1997).


Footnote 6:

     See supra Part III.A.


Footnote 7:

     The Beauxs argue that because "[a] remand would achieve
nothing but added expense," we should hold as a matter of law based
on the record "that the Jacobs' failure to mitigate excuses the
Beauxs from paying any damages in excess of the . . . cost of
purchasing and installing" a permanent pump in the deep sump.  The
reasonableness of a plaintiff's effort to mitigate damages is
normally a question for the trier of fact.  See Gates v. City of
Tenakee Springs, 822 P.2d 455, 460 (Alaska 1991).  Therefore, if we
were to accept the Beauxs' argument that the superior court erred
in failing to make fact findings regarding the Jacobs' duty to
mitigate damages, we would remand to allow the superior court to
make the appropriate findings.


Footnote 8:

     1 Dan B. Dobbs, Law of Remedies sec. 3.9, at 385 (2d ed.
1993).


Footnote 9:

     Restatement (Second) of Torts sec. 918 cmt. i (1977).


Footnote 10:

     The superior court found that the Beauxs' failure to disclose
the need to use the deep sump to prevent water infiltration in the
basement was not intentional.


Footnote 11:

     See supra Part III.B.


Footnote 12:

     See Curt's Trucking Co. v. City of Anchorage, 578 P.2d 975,
977 (Alaska 1978).


Footnote 13:

     See id.


Footnote 14:

     See Black's Law Dictionary 394 (7th ed. 1999); McMillian v.
Federal Deposit Ins. Corp., 81 F.3d 1041, 1055 (11th Cir. 1996);
Saunders v. Taylor, 50 Cal. Rptr. 2d 395, 398 (Cal. App. 1996).


Footnote 15:

     Beaulieu v. Elliott, 434 P.2d 665, 670-71 (Alaska 1967);  see
also Luth v. Rogers & Babler Constr. Co., 507 P.2d 761, 766 (Alaska
1973) ("A cardinal common law principle establishes that in the
absence of punitive damages a plaintiff can recover no more than
the loss actually suffered.").


Footnote 16:

     Carpenter v. Donohoe, 388 P.2d 399, 401 (Colo. 1964); see also
37 Am. Jur. 2d Fraud and Deceit sec. 357 (1968) (stating that in
misrepresentation actions, "the courts have recognized the
propriety of allowing, as damages, the cost of changing the
property so as to make it conform to the condition which was
represented to exist"); Breck v. Moore, 910 P.2d 599, 608 (Alaska
1996) (holding that purchasers of real property were entitled to
receive "the property as they expected to receive it," as damages
for attorney's malpractice that left cloud on their title).


Footnote 17:

     The Beauxs assert that there is evidence that the installation
of a second, permanent sump pump would have cost a maximum of
$1,500.


Footnote 18:

     The Beauxs note that when they sold the house, the basement
bedroom carpet was sixteen years old and had depreciated between
fifty and seventy-five percent; the recreation room carpet was five
years old and had depreciated between ten and fifty percent.


Footnote 19:

     See 1 Dobbs, supra note 8, sec. 5.2(7), at 734 ("Some repairs
to
land or structures will provide the owner with property more
valuable than it was before the injury.  For example, if the
plaintiff's roof is 15 years old, and, when new, had a normal
expected life of 20 years, replacement of the damage may give the
plaintiff an effectively new roof with a 20 year expected life.  If
the plaintiff recovers the full costs of this new roof, he will
certainly have a windfall.").


Footnote 20:

     Beaulieu, 434 P.2d at 670-71.


Footnote 21:

     See Johnson v. Olympic Liquidating Trust, 953 P.2d 494, 497
(Alaska 1998); Jackson v. Barbero, 776 P.2d 786, 788 (Alaska 1989).


Footnote 22:

     2 P.3d 66 (Alaska 2000).  


Footnote 23:

     AS 34.03.010-.380.


Footnote 24:

     See Sullivan, 2 P.3d at 73.


Footnote 25:

     See, e.g., Kennedy v. Linda Brock Automotive Plaza, Inc., 856
P.2d 1201, 1203 (Ariz. App. 1993); O'Keefe v. Grenke, 825 P.2d 985,
997-98 (Ariz. App. 1992).


Footnote 26:

     Kennedy, 856 P.2d at 1202.  


Footnote 27:

     Id. at 1203-04.


Footnote 28:

     AS 34.70.090(d) provides: "In addition to the damages allowed
under . . . this section, a court may also award the transferee
costs and attorney fees to the extent allowed under the rules of
court."  Although Rule 82(b) contemplates an award of partial
attorney's fees, Rule 82(a) expressly permits awards as "provided
by law or agreed to by the parties."  Because no statute or
contract term applicable to the Jacobs' claims required an award of
full reasonable fees, Rule 82(b) controls.  


Footnote 29:

     The July 7, 1999 judgment awarded prejudgment interest
beginning January 12, 1997, when the Beauxs received written
notification of the Jacobs' claims.  The Jacobs moved to amend the
judgment, seeking prejudgment interest from March 23, 1994.  The
superior court denied the Jacobs' motion.  But the September 24,
1999 amended judgment awarded prejudgment interest from "June 12,
1997, the date of the demand."  It appears that the amended
judgment erroneously substituted "June" for "January."


Footnote 30:

     Before its amendment effective January 1, 2000, AS
09.30.070(b) provided:

          Except when the court finds that the parties
have agreed otherwise, prejudgment interest accrues from the day
process is served on the defendant or the day the defendant
received written notification that an injury has occurred and that
a claim may be brought against the defendant for that injury,
whichever is earlier.  The written notification must be of a nature
that would lead a prudent person to believe that a claim will be
made against the person receiving notification, for personal
injury, death, or damage to property.

(Emphasis added.) 


Footnote 31:

     AS 09.30.070(b). 


Footnote 32:

     See Johnson, 953 P.2d at 497; Tookalook Sales & Serv. v.
McGahan, 846 P.2d 127, 129 (Alaska 1993).


Footnote 33:

     See Sosa v. State, 4 P.3d 951, 953 (Alaska 2000).


Footnote 34:

     See Henash v. Ipalook, 985 P.2d 442, 450-51 (Alaska 1999);
Johnson, 953 P.2d at 499 n.4.


Footnote 35:

     Henash, 985 P.2d at 451 (citations omitted).


Footnote 36:

     See id.


Footnote 37:

     Johnson, 953 P.2d at 499 n.4 (citations omitted).


Footnote 38:

     See id.


Footnote 39:

     McConkey v. Hart, 930 P.2d 402, 404-05 (Alaska 1996) (emphasis
added); see also Hofmann v. von Wirth, 907 P.2d 454, 455 n.2
(Alaska 1995) (noting that AS 09.30.070 "encompass[es] personal
injury, death, and property damage cases"); but see Alaska Hous.
Fin. Corp. v. Salvucci, 950 P.2d 1116, 1126-27 (Alaska 1997)
(applying without discussion AS 09.30.070(b) to Alaska
Whistleblower Act claim).


Footnote 40:

     4 P.3d 956, 958 (Alaska 2000).


Footnote 41:

     See id.


Footnote 42:

     See id.


Footnote 43:

     See id.


Footnote 44:

     See id. at 958-59.


Footnote 45:

     See id.  If AS 09.30.070(b) had applied to the purchasers'
claim in that case, they would have been entitled to prejudgment
interest only from the date when the defendant received written
notice that a claim might be brought, or the date on which process
was served, whichever was earlier.


Footnote 46:

     Morrow v. New Moon Homes, Inc., 548 P.2d 279, 290 (Alaska
1976) (citation omitted).


Footnote 47:

     See id.