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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. 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) .