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Williams v. Engen (12/05/2003) sp-5757
Williams v. Engen (12/05/2003) sp-5757
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
JOHN WILLIAMS, )
) Supreme Court No. S-10475
Appellant, )
) Superior Court No.
v. ) 1JU-01-1375CI
)
ROGER and CARMEN ENGEN, ) O P I N I O N
)
Appellees. ) [No. 5757 - December 5,
2003]
)
Appeal from the Superior Court of the State
of Alaska, First Judicial District, Juneau,
Larry C. Zervos, Judge.
Appearances: James W. McGowan, Sitka, for
Appellant. Steven Lewis Hempel, Juneau, for
Appellees.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
BRYNER, Justice.
I. INTRODUCTION
Alaska Civil Rule 27 gives a court limited powers to
order production of evidence for a legal action that has not yet
been filed. The rule has usually been read to allow early
production only to preserve existing evidence - not to discover
whether evidence exists. John Williams believed that he might
have a claim for misrepresentation arising from a real estate
transaction and wanted evidence to confirm his suspicions and
identify the prospective defendant. Relying on Rule 27, Williams
asked for an order compelling a mortgage company to produce a
report, not otherwise available to him, containing the
information he needed. The superior court declined to order
production, applying the conventional meaning of Rule 27.
Williams appeals, urging us to read the rule as allowing
discovery of facts needed to frame a complaint. We find no
exceptional circumstances in this case that would justify
expanding the rule's usual limits, and thus affirm the superior
court's decision.
II. FACTS AND PROCEEDINGS
Roger and Carmen Engen bought a home from the Estate of
Vera Lowe. John Williams, a real estate agent associated with
Re/Max of Juneau, represented the estate in the sale. As part of
the transaction, the estate agreed to finance part of the Engens'
purchase with a nine-month, $180,000, interest-free note.
Soon after the Engens signed the agreement, they
discovered a crack in the home's foundation. They hired an
engineer, John Cooper, who estimated that repairs would cost
$125,000 to $200,000. Believing that this cost would prevent
them from refinancing to pay off their $180,000 note, the Engens
notified their attorney, who prepared a draft complaint alleging
misrepresentation and failure to disclose required information.
The draft complaint named as defendants the estate, Williams, and
two partners of Williams at Re/Max of Juneau.1 After the
defendants reviewed the Engens' proposed complaint, all parties
agreed to mediate the dispute.
At the mediation, Williams and Re/Max made a combined
offer to settle their share of liability for $25,000. Williams
was to pay $10,937.50 of this amount. With this proposal on the
table as their final settlement offer, Williams and Re/Max left
the mediation proceeding, saying that they did not care how the
Engens and the estate resolved their dispute. The estate and the
Engens proceeded to settle, agreeing that the original sale would
simply be rescinded, while the Engens would remain free to accept
the $25,000 offer from Williams and Re/Max. The mediator
recorded this oral agreement and adjourned proceedings until a
date could be set for all the parties to convene and sign the
final, written version.
Almost immediately after reaching this agreement, the
Engens began having second thoughts about giving up the home, so
they resolved to check for available refinancing. The estate
evidently did not object to this change of heart. Williams soon
heard that the Engens had applied for refinancing from
Residential Mortgage. He contacted the company, and one of its
employees confirmed that the Engens had applied for refinancing,
supporting their application with a letter from their engineer,
Cooper. The employee also said that Residential could not show
him Cooper's letter until the refinancing closed. Williams then
learned from his own attorney that Residential had agreed to
refinance the Engens' home because Cooper's letter assured the
company that the building was not in imminent danger and could be
repaired after the refinancing agreement closed.
Nevertheless, two days after hearing this information,
Williams met with the other parties and signed a final settlement
agreement; the agreement changed the original settlement terms
between the estate and Engens by leaving the home sale intact,
but it expressly incorporated the $25,000 payment that Williams
and Re/Max had offered at the mediation.
After waiting until the Engens completed their
refinancing arrangements, Williams asked Residential Mortgage
again for a copy of Cooper's letter. Residential again denied
his request, stating that the Engens had instructed the company
not to release the letter. But a member of Residential
Financing's staff evidently advised Williams that the company
would not have approved the refinancing unless the foundation had
already been repaired. Williams contacted the Engens directly
and asked for a copy of Cooper's letter, but they refused to
disclose it.
Williams then petitioned the superior court under
Alaska Civil Rule 27, seeking to compel Residential Mortgage to
produce Cooper's letter. He alleged that he was "unable to
pursue a suit to secure relief for the monies paid to the Engens,
because I do not know who to sue, the Engens, [the] engineer [],
or some other person or entity." Williams further alleged that
"[p]erpetuation of the testimony will avoid a delay or failure of
justice which would result if I cannot determine against whom I
have a cause of action."
The Engens opposed the petition, contending that
Williams's petition fell outside the scope of Rule 27 because it
sought discovery to determine if evidence existed to support a
cause of action rather than seeking to preserve known evidence of
an already existing cause of action.2 Following a hearing,
Superior Court Judge Larry C. Zervos denied Williams's petition,
ruling that our decision in McNett v. Alyeska Pipeline Service
Co.3 supported the Engens' position and barred Williams from
using Rule 27 to collect evidence for a future claim.
Williams appeals.
III. DISCUSSION
Alaska Civil Rule 27(a) allows a prospective litigant
"who desires to perpetuate testimony" to petition the court for
permission to take a deposition, inspect a document, or conduct a
medical examination before commencing an action.4 Paragraph
27(a)(1) of the rule requires the petition to show:
(1) that the petitioner expects to be a party
to an action in a court of the state but is
presently unable to bring it or cause it to
be brought, (2) the subject matter of the
expected action and petitioner's interest
therein, (3) the facts which the petitioner
desires to establish by the proposed
testimony and the reasons for desiring [to]
perpetuate it, (4) the names or description
of the persons the petitioner expects will be
adverse parties and their addresses so far as
known, and (5) the names and addresses of the
persons to be examined and the substance of
the testimony which the petitioner expects to
elicit from each . . . .[5]
Paragraph 27(a)(3) allows the court to order the deposition,
medical examination, or document production "if the court is
satisfied that the perpetuation of the testimony may prevent a
failure or delay of justice."6
In McNett v. Alyeska Pipeline Service Co.,7 we noted
that Alaska's Civil Rule 27 derives from Federal Rule of Civil
Procedure 27; we thus observed that cases interpreting the
federal rule provide a "useful general framework of the purpose
of [Alaska Civil] Rule 27."8 Rule 27's literal terms describe a
method for a litigant with an existing claim, or facing an
existing claim, "to perpetuate" evidence before the claim is
filed. In keeping with the rule's literal purpose, federal
courts generally bar would-be litigants from using Rule 27 as a
tool to discover new information.9 Courts and commentators alike
agree that the rule does not authorize searches for causes of
action,10 and McNett spoke approvingly of these authorities:
Federal cases have noted that Rule 27(a) "
`is not a method of discovery to determine
whether a cause of action exists; and, if so,
against whom action should be instituted.' "
Instead, the Rule applies ["]to situations
where, for one reason or another, testimony
might be lost to a prospective litigant
unless taken immediately . . . . Such
testimony would thereby be perpetuated or
kept in existence and, if necessary, would be
available for use at some subsequent time.["]
Both federal and state courts have read Rule
27(a) to restrict depositions that are merely
searches for a cause of action, rather than
an effort to preserve testimony concerning
facts already known to the potential
litigant.[11]
Here, Williams does not dispute that the superior court
correctly applied the rule's mainstream interpretation. But
relying on Rule 27(a)(3)'s language allowing court-ordered
production to "prevent a failure or delay of justice," Williams
asks us to broaden the rule's conventional reach.12 He proposes
"a fairly modest liberalization" that would "allow Mr. Williams -
or a similarly situated party - to avail himself of Rule 27 if he
can convince a trial court that an impediment to his bringing a
viable cause of action can reasonably be expected to be removed
through . . . a Rule 27 proceeding." In such cases, Williams
reasons, early discovery should be granted because it will
"prevent a failure or delay of justice."
But this argument mistakenly reads Rule 27's "failure
or delay of justice" phrase out of context. The phrase appears
within a sentence that deals with perpetuating evidence: as
indicated above, Rule 27(a)(3) allows court-ordered production
only "if the court is satisfied that the perpetuation of the
testimony may prevent a failure or delay of justice."13 This
singular focus on perpetuating evidence strongly suggests that
courts should generally refrain from applying the rule unless the
petitioner demonstrates a need to prevent a failure or delay of
justice specifically arising from a risk of losing evidence. In
other words, " `The reasons for perpetuating the proposed
testimony must demonstrate danger of losing the evidence by
delay.' "14
Here, the superior court expressly found that Williams
had failed to show any danger that Cooper's letter might be lost.
The superior court's finding is not clearly erroneous. Indeed,
Williams does not seriously question the finding. Instead, he
asks us to hold that Alaska courts may consider factors other
than danger of destruction or loss in deciding whether a
petitioner has proved a sufficient need to perpetuate evidence.
Williams points out, for example, that the Advisory Committee for
the Federal Rules of Civil Procedure approvingly cited Hall v.
Stout, an opinion declaring that "lapse of time [is] a risk
affecting all evidence, irrespective of any particular condition
of a witness."15 But Hall's broad dictum addresses testimonial
evidence and translates poorly when directed at documentary
evidence, because the passage of time alone generally poses
little risk that evidence like Cooper's letter will be lost or
destroyed. And as the superior court properly found here,
Williams presented nothing to establish a case-specific risk of
destruction or loss.
Williams cites several Rule 27 cases in which federal
trial courts have considered factors other than risk of
destruction, such as the uniqueness of the information at issue16
and whether it lies in the adverse party's exclusive control.17
But the cases cited by Williams generally consider factors like
these to help measure the actual need for perpetuation of
evidence when a case-specific danger of loss or destruction is
shown. The cases do not suggest that these factors displace the
need to establish some actual risk. All but one of the cited
cases involved circumstances in which a danger of loss or
destruction was apparent;18 and in sharp contrast to Williams's
situation, in all but one of the cited cases, the impediment
preventing immediate commencement of an action was external to
the petitioner's need for the evidence.19 Notably, the sole
exception cited by Williams, In re Alpha Industries,20 has been
roundly criticized and consistently rejected by other courts.21
Williams nonetheless points out that Rule 27 was
drafted under the assumption that notice pleading would govern
court proceedings; he questions the accuracy of this assumption,
contending that today's courts have largely abandoned notice
pleading and now require a high level of specificity. According
to Williams, this trend in modern pleading practices makes
limited pre-filing discovery necessary to prevent a failure or
delay of justice. Specifically, Williams complains, unless he
obtains Cooper's letter he will not be able to comply with Civil
Rule 9(b), which requires complaints to plead the circumstances
constituting a fraud with particularity,22 and he also will be
unable to comply with Civil Rule 11, which requires an attorney
filing a claim to certify, after conducting a diligent inquiry,
"that the complaint is well grounded in fact and is warranted by
existing law." 23
But these arguments are unpersuasive. Civil Rule 9(b)
calls for specificity, not certainty. The rule simply requires a
claim of fraud to specify the time and place where the fraud
occurred;24 it seeks to prevent conclusory pleading by requiring a
complaint to do more than "recit[e] without specificity that
fraud existed,"25 but it does not prevent plaintiffs from filing
complaints based on available information and belief.
Furthermore, while some courts have mentioned Civil Rule 11 in
ruling on motions to perpetuate evidence under Rule 27, they have
deemed the rule relevant only in circumstances suggesting that
existing evidence might be lost or destroyed before the
petitioner can complete a diligent inquiry for other evidence
needed to frame a complaint.26 Williams cites no authority or
holding persuasively suggesting that Rule 27 can be used as he
proposes to use it - as a substitute for diligent inquiry or as a
tool to be used when diligent inquiry yields inadequate evidence.27
Williams also urges us to find his case exceptional
because it "falls squarely into the pattern" described by the
Ninth Circuit in Martin.28 But Martin itself is an unexceptional
case - except in a narrow sense that has no relevance here. The
court in Martin allowed pre-filing disclosure of evidence
unavailable to a potential defendant who lacked control over the
timing of the plaintiff's claim but established that the
plaintiff appeared to be destroying the evidence.29 Martin thus
applies uniquely to defendants who lack control over filing and
face destruction of evidence by their opponents.30 The case has
no bearing on the present case, where Williams is the potential
plaintiff and has failed to demonstrate any appreciable risk of
destruction or loss.
In summary, then, assuming that Rule 27(a) might vest
trial courts with discretion in exceptional cases to go beyond
the rule's traditional goal of preserving known evidence, we
find here that Williams failed to establish any convincing reason
to treat his case as exceptional. We thus conclude that the
superior court properly denied his petition.
IV. CONCLUSION
We AFFIRM the superior court's order denying Williams's
Rule 27 petition.31
_______________________________
1For simplicity, we will refer to Williams's partners and Re/Max
of Juneau collectively as Re/Max.
2Alternatively, the Engens argued that Williams waived his right
to pursue a future cause of action by signing the settlement
agreement, which expressly released the Engens from liability for
any matters arising from the dispute over their purchase
agreement. The superior court did not decide this issue.
3856 P.2d 1165 (Alaska 1993).
4Alaska R. Civ. P. 27(a)(1).
5Alaska R. Civ. P. 27(a)(1).
6Alaska R. Civ. P. 27(a)(3). See also Martin v. Reynolds Metals
Corp., 297 F.2d 49, 55-56 (9th Cir. 1961) ("a party may, in a
proper case, proceed under Rule 27 for an order under Rule 34
without taking a deposition at all").
7856 P.2d 1165 (Alaska 1993).
8Id. at 1168.
9See, e.g., Nevada v. O'Leary, 63 F.3d 932, 936 (9th Cir. 1995);
Penn Mut. Life Ins. Co. v. United States, 68 F.3d 1371, 1376
(D.C. Cir. 1995) (because Rule 27 is not a substitute for
discovery, petitioner "must set forth in some detail the
substance of the testimony it needs to preserve"); Ash v. Cort,
512 F.2d 909, 912 (3d Cir. 1975) ("Rule 27 is not a substitute
for discovery."). Cf. Martin, 297 F.2d at 55 (putative defendant
who makes showing that prospective plaintiff is destroying
evidence may conduct limited discovery under Rule 27); In re Town
of Amenia, 200 F.R.D. 200, 203 (S.D.N.Y. 2001) (prospective
parties to cost-recovery suit under Comprehensive Environmental
Response, Compensation, and Liability Act may discover
information in the course of perpetuating testimony in danger of
loss); In re Delta Quarries & Disposal, Inc., 139 F.R.D. 68, 69
(M.D. Pa. 1991) (same). But see In re Alpha Indus., 159 F.R.D.
456, 456-57 (S.D.N.Y. 1995) (allowing pre-filing discovery to
"prevent failure or delay of justice" where Rule 11 would
otherwise prevent company from determining whom to name as
defendant).
10See, e.g., Ash, 512 F.2d at 909; 8 Charles Alan Wright & Arthur
R. Miller, Federal Practice and Procedure 2071 (2d ed. 1994)
("the courts have generally agreed that to allow Rule 27 to be
used for [discovery of facts needed to frame a complaint] would
be an `abuse of the rule' ") (quoting Martin, 297 F.2d at 55); 6
James Wm. Moore et al., Moore's Federal Practice 27.03 (3d ed.
1999) ("Rule 27 may not be used to search for possible claims, or
to search for possible defendants. Nor should it be used to
gather facts for use in framing a complaint."); see also Sandmann
v. Petron, 404 N.W.2d 800, 802 (Minn. 1987) (plaintiff may not
use Rule 27 to discover facts on which to base expert opinion
required for complaint under medical malpractice statute); Harmon
v. Mercy Hosp., 460 N.W.2d 404, 407 (N.D. 1990) (party seeking
pre-filing discovery of facts needed to frame complaint
"misperceived the purpose of Rule 27").
11McNett, 856 P.2d at 1168 (internal citations omitted).
12McNett did not squarely address this issue. While noting that
the meaning of the rule's "failure or delay of justice" language
had been raised before the trial court to support "a need for
court flexibility," we expressly observed that this ground had
not been briefed on appeal. Id. at 1167 n.1. And in deciding
McNett's claim, we simply concluded that, on the record before
it, the superior court could reasonably conclude that McNett's
petition had failed to show that relief was necessary to prevent
a failure or delay of justice. Id. at 1169.
13Alaska R. Civ. P. 27(a)(3) (emphasis added).
14In re Ford, 170 F.R.D. 504, 508 (M.D. Ala. 1997) (quoting 4
James Wm. Moore et al., Moore's Federal Practice 27 (3d ed.
1999)).
15Hall v. Stout, 4 Del. Ch. 269, 1871 WL 2089, *3 (Del. Ch. 1871);
see also Mosseller v. United States, 158 F.2d 380, 382 (2d Cir.
1946) (district court could have allowed deposition without
showing of deponent's ill health) (citing Hall, 4 Del. Ch. at
274). But see Penn Mut. Life Ins. Co., 68 F.3d at 1373-74
(general allegation that passage of time might impair prospective
deponent's ability to recall events not sufficient showing of
danger to evidence); Lombard's, Inc. v. Prince Mfg., Inc., 753
F.2d 974, 976 (11th Cir. 1985) (general allegation that
prospective witnesses were "not immune from the uncertainties of
life and death" not enough to show danger of losing evidence);
Ash, 512 F.2d at 913 (conclusory statement of proposed deponents'
advanced ages does not satisfy rule's requirement to show need to
perpetuate testimony).
16See In re Bay County Middlegrounds Landfill Site, 171 F.3d 1044,
1047 (6th Cir. 1999); Penn Mut. Life Ins. Co., 68 F.3d at 1375;
Tennison v. Henry, 203 F.R.D. 435, 441 (N.D. Cal. 2001).
17See Reints v. Sheppard, 90 F.R.D. 346, 347 (M.D. Pa. 1981).
18See In re Bay County, 171 F.3d at 1046 (only issues on appeal
are whether petitioner adequately showed facts it sought to
establish or substance of testimony it sought to elicit); Penn
Mut. Life Ins. Co., 68 F.3d at 1375 (district court should have
considered witness's advanced age in deciding whether evidence
was in danger of being lost); Tennison, 203 F.R.D. at 442-43 (age
of witnesses and long passage of time demonstrate risk of loss of
evidence); In re Town of Amenia, 200 F.R.D. at 202 (petitioner
made showing of witness's age and ill health); In re Delta
Quarries, 139 F.R.D. at 70 (petitioner made showing of witness's
serious illness).
19See In re Bay County, 171 F.3d at 1047 (potential defendant to
CERCLA lawsuit sought to preserve testimony about other
potentially responsible party); Penn Mut. Life Ins. Co., 68 F.3d
at 1374 (petitioners could not yet bring suit because they had
not exhausted their administrative remedies); In re Town of
Amenia, 200 F.R.D. at 203 (potential CERCLA defendant sought to
preserve testimony); In re Delta Quarries, 139 F.R.D. at 69
(same).
20 159 F.R.D. at 456.
21See, e.g., In re Ford, 170 F.R.D. at 508-09; In re Sitter, 167
F.R.D. 80, 82 (D. Minn. 1996). Moreover, in contrast to
Williams's situation, In re Alpha arguably did involve
exceptionally compelling circumstances for early discovery.
Although no imminent loss of evidence was shown in the case, a
valid claim for economic harm unquestionably existed; the
petitioner simply lacked information to identify the responsible
party, and, in the absence of pre-filing discovery, it appeared
that this inability to identify the correct defendant would
expose the petitioner to significant, ongoing economic damages.
See In re Alpha, 159 F.R.D. at 457.
22Alaska Civil Rule 9(b) provides:
In all averments of fraud or mistake, the
circumstances constituting fraud or mistake
shall be stated with particularity. Malice,
intent, knowledge, and other condition of
mind of a person may be averred generally.
23Alaska Civil Rule 11 provides, in relevant part:
The signature of an attorney or party
constitutes a certificate by the signer that
the signer has read the pleading, motion, or
other paper; that to the best of the signer's
knowledge, information, and belief formed
after reasonable inquiry it is well grounded
in fact and is warranted by existing law or a
good faith argument for the extension,
modification, or reversal of existing law,
and that it is not interposed for any
improper purpose, such as to harass or to
cause unnecessary delay or needless expense
in the cost of litigation.
(Emphasis added.)
24Law Offices of Vincent Vitale, P.C. v. Tabbytite, 942 P.2d 1141,
1147 (Alaska 1997).
25Id.
26See, e.g., In re Town of Amenia, 200 F.R.D. at 203 (allowing pre-
filing discovery upon showing of proposed deponent's age and poor
health); In re Delta Quarries & Disposal, Inc., 139 F.R.D. at 69
(allowing pre-filing discovery upon showing of ailing health of
proposed deponent whose testimony might be lost while prospective
plaintiff conducted a separate essential inquiry).
27Williams relies primarily on In re Alpha Industries, 159 F.R.D.
at 456. As already noted, Alpha has been persuasively rejected
by other courts. Moreover, unlike Williams, the claimant in
Alpha had unquestionably established the existence of a valid
claim and was stymied only in attempting to identify the
potential defendant.
28297 F.2d at 49.
29O'Leary, 63 F.3d at 936.
30See O'Leary, 63 F.3d at 936 (noting a significant "distinction
between Rule 27's invocation by a prospective defendant, as in
Martin, and a prospective plaintiff or other applicant for
judicial relief, as in this case," and quoting Martin's comment
that it would be an "[a]buse of the rule" for potential
plaintiffs to use Rule 27 "as a means of discovery to enable them
to draw a complaint").
31Our disposition of the case makes it unnecessary to address the
Engens' alternative argument that Williams waived his right to
sue by signing the settlement agreement.
