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Brandner v. Agre (10/31/2003) sp-5747
Brandner v. Agre (10/31/2003) sp-5747
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,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
MICHAEL D. BRANDNER, ) Supreme Court No. S-10639
)
Appellant, ) Superior Court No.
) 3AN-02-7029 CI
v. )
)
JAMES A. AGRE, ) O P I N I O N
)
Appellee. ) [No. 5747 - October 31, 2003]
)
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage, James N. Wanamaker, Judge, pro
tem.
Appearances: Robert C. Erwin and Roberta C.
Erwin, Erwin & Erwin, LLC, Anchorage, for
Appellant. James Agre, pro se, and Steven J.
Shamburek, Law Office of Steven J. Shamburek,
Anchorage, for Appellee.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
BRYNER, Justice.
I. INTRODUCTION
The main question in this case is whether resolution of
an equitable inquiry into a contractor's substantial compliance
with state licensing requirements deprived the district court of
jurisdiction over the contractor's suit for compensation. We
find that the district court had jurisdiction over the case and
that transfer to the superior court was unnecessary. Although
the superior court would normally review a judgment of the
district court, we reach the merits of the case as a matter of
discretion and affirm the judgment in the contractor's favor.
II. FACTS AND PROCEEDINGS
James Agre orally contracted with Dr. Michael Brandner
to renovate Brandner's new medical office. Agre began working on
Brandner's office in September 2001 and completed his work in
November 2001. Agre billed Brandner for $18,030.34, but Brandner
paid only $10,000. Agre filed an action in the district court
seeking payment of the remaining $8,030.34. Brandner
counterclaimed, alleging that he was entitled to lost income and
reimbursement for future repairs because the work was not
satisfactory and Agre did not meet the move-in deadline. Both
parties agreed to argue the case in small claims court, which
limits the recoverable amount to $7,500 and relaxes the district
court procedural rules.1 District Court Civil Rule 9
provides that in a small claims action, "formality in pleadings,
motions, and the introduction of evidence is not required."
About one week before the trial date, Brandner filed a
motion to dismiss Agre's complaint, alleging that Agre was not a
licensed contractor at the time they contracted for the work, and
was therefore barred under AS 08.18.151 from bringing an action
for compensation. Alaska Statute 08.18.151 provides:
A person acting in the capacity of a
contractor may not bring an action in a court
of this state for the collection of
compensation for the performance of work or
for breach of a contract for which
registration is required under this chapter
without alleging and proving that the
contractor was a registered contractor at the
time of contracting for the performance of
the work.
Agre filed a motion for continuance so that he could
consult his attorney, who would be out of town until after the
trial date. Both parties appeared pro se in small claims court
at the trial time, and Judge Peter Ashman granted Agre's request
for continuance, ordered him to reply to Brandner's motion within
ten days, and rescheduled the trial for one month later. Agre
responded to Brandner's motion by supplying a copy of his Alaska
business license but not a contractor's license. By the second
trial date, the district court had not yet ruled on Brandner's
motion to dismiss.
Judge James Wanamaker presided over the rescheduled
trial. Agre was represented by counsel and Brandner appeared pro
se. The district court had already begun hearing testimony when
Brandner raised his argument that AS 08.18.151 barred Agre from
bringing the action. Agre's counsel responded that an unlicensed
contractor was permitted to bring an action for compensation if
the court found that the contractor had substantially complied
with the contractor licensing statute. Judge Wanamaker
determined that the substantial compliance inquiry was an
equitable issue that could not be resolved by the district court,
since the district court lacks jurisdiction over equitable
actions. Judge Wanamaker therefore recessed the trial and
referred the case to Presiding Superior Court Judge Elaine
Andrews, who appointed him a judge of the superior court pro tem
to complete the trial.
When the trial resumed later that day, Brandner moved
for a continuance so that his counsel could be present; the court
denied the request. The court then found that although Agre's
specialty contractor's license had expired on August 31, 2001,
before the work began, Agre was entitled to bring an action for
compensation because he had substantially complied with the
contractor licensing statute. The judge ultimately found in
favor of Agre, awarding him $9,719.05 and denying Brandner's
counterclaims.
Brandner appeals.
III. DISCUSSION
A. Jurisdiction
Both parties assume that the district court did not
have jurisdiction over the case and that transfer to the superior
court was necessary.2 Based on that assumption, Brandner argues
that it was improper to resume the trial after its transfer to
superior court, and it was improper to restart the trial. But
because the parties' jurisdictional assumption is mistaken, we
need not consider Brandner's argument.
Recently, in Shaw v. Nanook, Inc., we held that when a
statute gives the district court jurisdiction over a cause of
action, the district court may apply equitable remedies that are
necessary and incidental to its decision of that cause of action.3
The same principle applies here.
Here, Judge Wanamaker found it necessary to consider an
issue of substantial compliance - an equitable question - in the
context of a small claims case. Alaska Statute 22.15.040(a)
unquestionably placed the small claims action within the district
court's jurisdiction.4 But AS 22.15.050 generally denies the
district court jurisdiction over "actions of an equitable
nature."5 Under Shaw v. Nanook, then, the jurisdictional
question turns on whether the substantial compliance analysis was
necessary and incidental to resolving Agre's small claims action.
In Martin v. County of Los Angeles,6 the California
Court of Appeal observed that "[f]rom the fact that equitable
principles are . . . used to establish the alleged liability of
the defendants, it does not necessarily follow that the action to
enforce that liability is equitable."7 The United States Court
of Appeals for the Ninth Circuit followed Martin in Wyler Summit
Partnership v. Turner Broadcasting System, Inc., holding that the
need to apply an equitable doctrine in deciding whether to grant
relief in a contract case did not convert the case from an action
at law to an action in equity.8 As the Ninth Circuit explained,
"where a plaintiff seeks a legal remedy requiring the application
of equitable principles to determine if relief is justified," the
claim "sounds at law."9 In these circumstances, "[t]he fact that
the court must apply the equitable doctrine . . . is incidental."10
The situation here is functionally identical to the one
considered in Wyler Summit. Agre sought money damages in a
breach of contract action, but his right to relief turned on
resolution of a preliminary equitable issue. Resolving the
question of Agre's substantial compliance with the contractor
licensing statute was necessary and incidental to the resolution
of his small claim and did not convert it into an equitable
action. A transfer to the superior court was thus unnecessary
and created no jurisdictional gap to fill.
Our holding moots Brandner's claim that Judge Wanamaker
should have started the trial anew after converting the case from
a small claims matter to a superior court action.11
B. Continuance
Brandner argues that the superior court abused its
discretion when it denied his request to continue the trial until
his counsel would be available.12 Brandner moved for continuance
on the understandable assumption that the transfer to superior
court changed his situation. Brandner notes that parties in
superior court have rights that district court litigants do not
have, such as the right to a jury trial and the right to request
a change of judge. But as we have seen, there was no defect in
Judge Wanamaker's ability to decide the case as a district court
judge sitting in small claims. Moreover, the potential
procedural and legal complexities that led to Brandner's motion
for continuance never materialized.
Had Judge Wanamaker actually changed the scope of the
action or applied different substantive or procedural rules,
Brandner might have been prejudiced by denial of the continuance.
But Judge Wanamaker handled the case in the same informal manner
as a superior court proceeding as he did in small claims court,
so the nominal transfer of jurisdiction had no prejudicial
effect. In short, Brandner identifies no actual prejudice
resulting from the court's denial of a continuance.
We therefore affirm the trial court's denial of
Brandner's motion for continuance.
C. Substantial Compliance13
The trial court found that Agre had substantially
complied with Alaska's contractor registration requirements and
that AS 08.18.151 therefore did not bar his claim. Brandner
challenges this finding, contending that Agre allowed his
registration to expire before beginning the job and thereafter
failed to reactivate it. Brandner also asserts that Agre
performed work that was outside the scope of his expired painting
and wallcovering specialty contractor's licenses and should have
registered as a general contractor. For these reasons, Brandner
argues, Agre could not have substantially complied with the
statutory registration requirements. Brandner points out that
AS 08.18.141 makes it a misdemeanor to violate 12 AAC 21.110,
which prohibits specialty contractors from working in a trade for
which they are not registered;14 Brandner also points to
AS 08.18.011(a), which requires contractors to be registered with
the state.15
Registration as a construction contractor under AS
08.18 requires: a registration fee,16 a surety bond,17 public
liability and property damage insurance,18 and worker's
compensation insurance.19 "Registration was intended by the
legislature to ensure `competence and financial responsibility in
those who undertake work as contractors.' "20
Alaska Statute 08.18.151 provides that a contractor
must have been registered under AS 08.18 at the time of
contracting to perform work in order to bring an action for
breach of contract. But because "[s]ection 151 imposes a harsh
penalty on contractors,"21 we have held that "AS 08.18.151's
statutory bar may be abrogated by a contractor's substantial
compliance with the registration requirements."22 In McCormick v.
Reliance Insurance Company we explained that a court may find
substantial compliance if: "(1) the contractor's prior
registration or other public information would give the public
the same information that current registration would give (i.e.,
the contractor's insurance information); and (2) the contractor's
bond and insurance remained effective during the period his or
her registration lapsed."23
None of Brandner's arguments affects the existence of
substantial compliance under this test. The inquiry into
substantial compliance focuses on the time that the parties
entered into the contract, not the time after litigation
commenced.24 Agre's failure to renew his contractor's license
between the time he started work on Brandner's contract in August
2001 and the time of the trial in May 2002 has little to do with
whether Agre's bond and insurance remained in effect when he
performed the work and whether Brandner had access to information
concerning Agre's coverage when the contract was formed. Here,
it appears that the parties began discussing Brandner's contract
in early August 2001, while Agre's registration was still
current. Thus, Agre may well have been registered when he
entered into the contract and, at most, his registration expired
only weeks before the actual work began. The record indicates
that Agre's bond and insurance remained in effect. And we find
nothing in the record to indicate that this information was
unavailable to Brandner.25
Brandner separately alleges that Agre's work exceeded
the scope of his specialty trades. He contends that Agre could
not have substantially complied with the contractor licensing
statute because he was never a licensed general contractor, which
would have required him to increase his bond from $5,000 to
$10,000. But Brandner fails to identify any place in the record
where he raised this argument before the trial court. We
therefore decline to consider this point.26
The record supports the trial court's finding that Agre
substantially complied with the contractor licensing requirements
of AS 08.18 based on the factors set out in McCormick. Agre
proved at trial, and Brandner does not challenge, that Agre's
insurance coverage and bond remained in effect when he performed
the work and met or exceeded the statutory requirements for a
specialty contractor. Moreover, the relevant information
concerning Agre's insurance and bonding coverage appears to have
been a matter of public record when the parties initially met and
discussed the work in mid-August 2001. Given these
circumstances, we hold that the trial court's finding of
substantial compliance was not clearly erroneous.
IV. CONCLUSION
Because the substantial compliance analysis was
necessary and incidental to the resolution of Agre's breach of
contract action, which fell squarely within the trial court's
small claims jurisdiction, and because the court's finding of
substantial compliance was not clearly erroneous, we AFFIRM the
judgment.
_______________________________
1AS 22.15.040 grants district court judges and magistrates the
authority to hear claims for relief in the amount of $7,500 or
less as small claims.
District Court Civil Rule 8 allows parties to waive the
amount of damages over $7,500 if they wish to proceed in small
claims court.
2We review questions of subject matter jurisdiction de novo. See
Hydaburg Co-op. Ass'n v. Hydaburg Fisheries, 925 P.2d 246, 248
(Alaska 1996).
364 P.3d 131, 132 (Alaska 2003); see also Anchorage Helicopter
Serv., Inc. v. Anchorage Westward Hotel, 417 P.2d 903, 908
(Alaska 1966) (district court's incidental exercise of equitable
authority did not convert debt collection action into an
equitable action).
4AS 22.15.040(a) reads, in relevant part:
Except as otherwise provided in this
subsection, when a claim for relief does not
exceed $7,500, exclusive of costs, interest,
and attorney fees, and request is so made,
the district judge or magistrate shall hear
the action as a small claim unless important
or unusual points of law are involved or the
state is a defendant[.]
5AS 22.15.050 provides:
The jurisdiction of the district courts does not extend
to
(1) an action in which the title to real property is
in question;
(2) an action for false imprisonment, libel,
slander, malicious prosecution, or actions of
an equitable nature, except as otherwise
provided by law.
651 Cal. App. 4th 688, 694 (1996).
7Id. (quoting C & K Eng'g Contractors v. Amber Steel Co., 587
P.2d 1136, 1140 (Cal. 1978)).
8235 F.3d 1184, 1195 (9th Cir. 2000).
9Id. at 1194.
10Id. at 1195. Accord Celestin v. American Transit Ins. Co., 747
N.Y.S.2d 920, 921-22 (N.Y. City Civ. 2002) ("In ruling on
damages, the fact that a court, of necessity, interprets a
contract or lease, is simply incidental to the relief sought.").
11Normally, we would remand this case to the superior court to
review Judge Wanamaker's rulings on Brandner's remaining claims
of error. See AS 22.15.240(a) ("Either party may appeal a
judgment of the district court in a civil action to the superior
court."). This is true even though Judge Wanamaker presided as a
judge of the superior court, pro tem. See Stephens v. Hammersley,
550 P.2d 1268, 1269 (Alaska 1976) (superior court may review
district court decision even if superior court judge was
presiding); see also Milne v. Anderson, 554 P.2d 402, 403-04
(Alaska 1976). But in the present case, since the parties have
briefed and argued the issues, and since the transfer was based
on a question of subject matter jurisdiction that both parties
understandably assumed was correct, we see no sense in the delay
and expense of remand and will decide the remaining issues as a
matter of discretion. Cf. Hammersley, 550 P.2d at 1269.
12We review a trial court's denial of a continuance for abuse of
discretion. See Gregoire v. Nat'l Bank of Alaska, 413 P.2d 27,
33 (Alaska 1966). "Denial of a motion for continuance
constitutes an abuse of discretion `when a party has been
deprived of a substantial right or seriously prejudiced.' "
Siggelkow v. Siggelkow, 643 P.2d 985, 986-87 (Alaska 1982)
(quoting Barrett v. Gagnon, 516 P.2d 1202, 1203 (Alaska 1973)).
13We review the superior court's findings of fact for clear error.
See Fernandes v. Portwine, 56 P.3d 1, 4 (Alaska 2002). "A
factual finding is clearly erroneous when the court is `left with
a definite and firm conviction on the entire record that a
mistake has been made.' " Id. (quoting Jenkins v. Handel, 10
P.3d 586, 589 (Alaska 2000)).
1412 AAC 21.110 provides:
A person registered as a specialty contractor
may not undertake or offer to perform or
claim to have the capacity to perform or
submit a bid for a project which requires the
use of a trade for which he is not
registered.
AS 08.18.141 provides in pertinent part:
(a) A contractor or a person acting in the
capacity of a contractor who knowingly
violates AS 08.18.011 . . . is guilty of a
class B misdemeanor.
AS 08.18.011 is listed as partial authority for 12 AAC 21.110.
15AS 08.18.011(a) provides in pertinent part:
A person may not submit a bid or work as a
contractor until that person has been issued
a certificate of registration by the
department.
16AS 08.18.041.
17AS 08.18.071.
18AS 08.18.101(2).
19AS 08.18.101(1).
20Gross v. Bayshore Land Co., 710 P.2d 1007, 1012 (Alaska 1986)
(quoting Sumner Dev. Corp. v. Shivers, 517 P.2d 757, 763 (Alaska
1974)).
21Alaska Protection Servs., Inc. v. Frontier Colorcable, Inc., 680
P.2d 1119, 1122 (Alaska 1984) (citing Industrial Power v. Western
Modular Corp., 623 P.2d 291, 294 (Alaska 1981)).
22McCormick v. Reliance Ins. Co., 46 P.3d 1009, 1012 (Alaska 2002)
(citing Jones v. Short, 696 P.2d 665, 668 (Alaska 1985)).
23Id. at 1012-13.
24See AS 08.18.151.
25Brandner's point that Agre may be guilty of a misdemeanor has no
bearing on his substantial compliance, since the misdemeanor
liability set out in AS 08.18.141 is unrelated to AS 08.18.151's
bar on contract actions. See Alaska Protection Servs., Inc., 680
P.2d at 1122.
26See Braun v. Alaska Commercial Fishing & Agric. Bank, 816 P.2d
140, 145 (Alaska 1991) (supreme court need not address
insufficiently briefed issues); Brandon v. Corr. Corp. of Am., 28
P.3d 269, 280 (Alaska 2001) (arguments raised for the first time
on appeal are waived) .
