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Kaiser v. Umialik Insurance (03/11/2005) sp-5877
Kaiser v. Umialik Insurance (03/11/2005) sp-5877
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
WILLIAM KAISER, )
) Supreme Court No. S-11088
Appellant, )
) Superior Court No.
v. ) 4FA-02-02158 CI
)
UMIALIK INSURANCE, GARY ) O P I N I O N
FOSTER, and RURAL ALASKA )
INSURANCE, ) [No. 5877 - March 11, 2005]
)
Appellees. )
)
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Niesje J. Steinkruger, Judge.
Appearances: William Kaiser, pro se,
Sheridan, Oregon, Appellant. Gary Foster,
Fairbanks, for Appellees.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
FABE, Justice.
I. INTRODUCTION
In this bad faith action against insurers, the pro se
plaintiff filed his complaint at least a year after the statute
of limitations had run. He appeals the dismissal of his claim,
arguing that his untimeliness should be excused. He argues both
that the defendants should be estopped from relying on the
statute of limitations and that the statute should be tolled.
The estoppel argument is raised for the first time on appeal, and
the plaintiff does not meet the requirements for tolling. We
therefore affirm the superior courts order dismissing his claim.
II. FACTS AND PROCEEDINGS
A. Factual History
This case arises from a fire at William and Patricia
Kaisers North Pole home in April 1998. The home was insured by
Umialik Insurance, through agent Rural Alaska Insurance. William
Kaiser filed an insurance claim and began receiving some
payments. At the time, the Kaisers were in the midst of a
divorce and Patricia was, according to William, suffering from
severe psychological and emotional distress.1
In a pair of letters dated July 29 and September 2,
1998, Gary Foster, who apparently served as both attorney and
investigator for Umialik, wrote to Kaiser to deny the insurance
claim and explain the reasons for the denial. In these two
letters, the first one brief and the second more detailed, Foster
depicted the fire as suspicious and the Kaisers as homeowners
saddled with an unsellable property and an expiring insurance
policy. Foster noted that in March 1997 the Kaisers had
attempted to sell the house, but the sale fell through when the
prospective purchasers engineer found many, many structural,
systems, and code problems. Foster further recounted that in
December 1997 Kaiser informed Rural Alaska, his insurance agency,
that his wife had threatened to burn the house down and asked the
agency whether his policy would cover the house if she did.
Fosters letter then detailed an attempted refinancing of the home
in January 1998, which he surmised was intended to pay for
repairs. According to Fosters reconstruction of events, the
refinancing was approved but conditioned on an appraisal. An
appraiser visited the home and found that its condition rendered
it not appraisable. The refinancing never occurred.
On February 12, 1998, according to Fosters letters,
Kaiser informed Rural Alaska that he did not want to renew the
insurance policy because he and his soon-to-be ex-wife planned to
move out by April. On April 13, however, Kaiser requested an
extension on the insurance policy, explaining to the insurance
agent that he and his wife were going to stay in the house.
According to Fosters account, a Rural Alaska agent informed
Kaiser on the afternoon of April 20 that Umialik had denied the
extension and that other insurance was not forthcoming. The
house burned the next morning. In the course of the fire
investigation, Foster wrote, kerosene, not fuel oil, was found
near the homes furnace. Based on these events, Foster concluded
that it is more likely than not[] that [Kaiser] intentionally set
this fire. Kaisers insurance claim was therefore denied.
Fosters first letter also noted that Kaiser might have
ongoing liabilities: Umialik might be obliged to pay off the
mortgage, in which case Kaiser would be liable for reimbursing
Umialik. Umialik later obtained a default judgment against
Kaiser for just over $88,000.
Following the fire, Kaiser was hospitalized twice, in
1999 and 2000, for a serious illness that left him physically and
intellectually unable to function in a reasonably normal manner.
He was also arrested in December 2000 on unrelated drug charges
and has been incarcerated since then.
B. Procedural History
On September 12, 2002, while in a federal prison
hospital in Minnesota, Kaiser, acting as his own lawyer, filed a
complaint against Umialik, Foster, and Rural Alaska
(collectively, Umialik) in superior court in Fairbanks. The
complaint alleges that Kaiser had no involvement of any kind in
the fire, and further alleges bad faith by Umialik and Foster.
According to Kaiser, this bad faith was manifested in a
systematic method of intimidation to deny [Kaiser] his rightful
claim. This assertion seems to refer to Fosters conduct of the
investigation. Before answering Kaisers complaint, Foster moved
for dismissal under Alaska Rule of Civil Procedure 12(b)(6),
arguing that Kaisers claim was barred by the statute of
limitations. Rural Alaska joined the motion and Umialik filed a
statement of non-opposition. Kaiser then filed a Motion To Show
Good Cause To Allow Petitioner To File Claim, which contained a
series of factual assertions that Kaiser claimed supported
grant[ing] equitable tolling of the statute of limitations. The
superior court considered the motion as an opposition to
dismissal and dismissed the complaint.
III. DISCUSSION
A. Standard of Review
The superior court dismissed Kaisers claim under Alaska
Rule of Civil Procedure 12(b)(6). Kaisers Motion to Show Good
Cause asserted facts not included in the complaint. When
materials outside the pleadings are submitted with regard to a
motion to dismiss, the superior court must either explicitly
exclude the materials or convert the motion into one for summary
judgment under Alaska Rule of Civil Procedure 56.2 When the
superior court does neither, but instead decides the motion under
Rule 12(b)(6) without stating whether it is considering the
outside materials or not, this court has three options: [W] e
may reverse and remand for proper consideration, or we may review
the superior courts decision as if the motion for dismissal had
been granted after exclusion of outside materials, or as if
summary judgment had been granted after conversion of the motion
to dismiss into one for summary judgment.3
It is not clear which standard the superior court used
in this case, nor whether the court excluded outside materials.
On March 3, 2003, the superior court entered an order by which
Kaisers complaint [was] dismissed with prejudice. It noted on
that order that it considered Kaisers Motion To Show Good Cause
as an opposition to dismissal. But the superior courts final
judgment, entered on April 14, 2003, announced that it had
granted summary judgment for the defendants.
Under Rule 12(b)(6) a complaint may be dismissed for
failure to state a
claim upon which relief can be granted. We review a dismissal
under Rule 12(b)(6) de novo presum[ing] all factual allegations
of the complaint to be true and [making] all reasonable
inferences in favor of the non-moving party.4 The failure to
file a complaint within the time set out by a statute of
limitation is a ground for Rule 12(b)(6) dismissal.5 The
complaint should survive as long as there is a set of facts,
provable within the framework of the complaint, under which the
complaint was timely filed.6
Summary judgment may be entered for a party under Rule
56 when there is no genuine issue as to any material fact and . .
. [the] party is entitled to judgment as a matter of law.7 All
reasonable inferences of fact are drawn in favor of the party
opposing the motion [for summary judgment] and against the moving
party.8 We review grants of summary judgment de novo.9
Under either standard, if the facts presented by the
plaintiff, whether offered as allegations in a complaint or as
evidence in the record, do not excuse his untimeliness as a
matter of law, his claim fails. That is the case here. Kaisers
complaint was untimely as a matter of law even if we take into
account all of the facts he has alleged and asserted before this
court and the superior court. Our choice of whether to review
the superior courts decision as a dismissal or a summary judgment
therefore has no effect on the outcome of the case.10
B. Kaisers Claim Was Barred by the Statute of Limitations.
The statute of limitations began running on September
2, 1998, when Foster sent his letter offering a detailed
explanation for the denial of Kaisers claim. Kaiser filed his
complaint alleging bad faith in that denial on September 12,
2002, over four years later. The Alaska statute of limitations
for tort actions is two years11 and the statute for contract
actions is three years.12 Kaisers complaint was thus late
regardless of how the claim is characterized. Kaiser argues that
his unquestioned untimeliness should be excused.
He makes two distinct arguments, one related to the
doctrine of equitable estoppel and one related to equitable
tolling. Although both doctrines serve to excuse an untimely
filing, they differ in that equitable estoppel turns on
wrongdoing by the party invoking the statute of limitations,
while our equitable tolling rule looks only to the claimants
circumstances whether he has pursued an alternative remedy that
proved unavailing.13 Neither doctrine saves Kaisers claim, nor
does Alaskas statutory tolling provision.
1. Kaiser waived his claim to equitable estoppel.
When a defendants wrongful conduct lull[s] [a
plaintiff] into inaction or otherwise induces him to delay filing
a claim until the limitation period has run, the defendant is
equitably estopped from invoking the statute.14 To establish
grounds for equitable estoppel, the plaintiff must plead that he
or she relied on the defendants fraud by either consciously
relying on an affirmative misrepresentation, or failing to
discover fraudulently concealed evidence.15
Kaiser argues on appeal that Umialik is estopped from
invoking the statute of limitations because Gary Foster lulled
him into not filing suit or seeking independent legal advice
until the statute had run. But in his Motion To Show Good Cause,
which the superior court treated as an opposition to dismissal,
Kaiser only argued that his divorce, illness, and incarceration
should toll the statute of limitations. Kaiser averred in the
superior court that he had experienced a bitter and emotionally
draining divorce and that he had been sick, requiring
hospitalization in 1999 and again in 2000. He also relied on his
arrest and incarceration on an unrelated matter in 2000. He told
the superior court that he had unsuccessfully attempted to retain
counsel to represent him in the matter and did not have access to
the appropriate legal materials and state statutes while
incarcerated. Kaiser concluded by alleging that [u]nder what
have been extremely difficult circumstances, he had attempted to
address this matter in a timely manner and [] attempted to
preserve his right to pursue action on this claim. Based on
these circumstances, he asked the superior court to grant
equitable tolling for the mitigating circumstances. Kaiser did
not argue in the superior court, as he does here, that he was
unaware of his claim as a result of Gary Fosters conduct.
Indeed, at the time he opposed the motion to dismiss, Kaiser
argued that he had attempted to pursue his claim in a timely
fashion and was unable to proceed with his claim because of his
illness and incarceration. Estoppel is thus a new theory of
Kaisers case, not raised below. This court will not consider on
appeal new arguments which (1) depend on new or controverted
facts, (2) are not closely related to the appellants arguments
[in the superior court], and (3) could not have been gleaned from
the pleadings, unless the new issue raised establishes plain
error.16
Kaisers estoppel claim is based on new facts and cannot
be discerned from his pleadings. He appears to base his claim of
equitable estoppel on the allegation that [s]ubsequent to [the
letter denying Kaisers claim], Gary Foster informed appellant
that he could not sue or pursue any claim against Umialik. This
argument is presented only in Kaisers appellate briefs. Kaiser
alleges in his complaint that Foster engaged in a systematic
method of intimidation to deny plaintiff his rightful claim, but
this allegation does not go to equitable estoppel. It appears
that Kaiser is alleging interference with his claim for
reimbursement from the insurance company, not with his ability to
file a lawsuit, and there is no mention of communication by
Foster concerning Kaisers right to sue. The complaint also
alleges bad faith acts of the insurance company through their
attorney Gary Foster. Similarly, the alleged bad faith acts
appear to relate to the denial of the insurance claim, not to the
discouragement of a lawsuit.
Finally, Kaisers estoppel argument is not closely
related to the tolling argument he made before the superior
court. While the two doctrines have the same general effect of
excusing untimeliness, they focus on entirely different realms of
facts estoppel looks to the conduct of the party invoking the
limitation period while tolling is concerned with the
circumstances of the untimely party.17 Kaisers opposition to the
motion to dismiss was based on the extremely difficult
circumstances of divorce, illness, and incarceration that he had
experienced and his tolling argument was based on his inability
to retain counsel or address the known claims during this period.
Kaisers appellate claim that defendants should be estopped from
asserting the statute of limitations as a defense is thus a new
argument and is waived because he did not raise it in the
superior court; we will not consider it here.18
2. Kaiser is not entitled to equitable tolling.
In Alaska, the doctrine of equitable tolling has been
applied to halt the running of the statute of limitations when
multiple legal remedies are available to the plaintiff and time
runs out on one remedy while the plaintiff is pursuing another
unavailing remedy.19 A claim for tolling has three elements: (1)
pursuit of the initial remedy [must] give[] defendant notice of
plaintiffs claim, (2) defendants ability to gather evidence
[must] not [be] prejudiced by the delay, and (3) plaintiff [must]
act[] reasonably and in good faith.20 Kaiser has not pursued any
other remedy and therefore cannot toll the limitation period
under this theory.
Other jurisdictions apply equitable tolling in two
additional situations. The statute may be tolled where the
plaintiff, by exercising reasonable diligence, could not have
discovered essential information bearing on his or her claim.21
Alaska recognizes this principle in its discovery rule,
controlling the starting date of the statute of limitations for
certain claims.22 In many jurisdictions, equitable tolling also
applies where extraordinary circumstances outside the plaintiffs
control make it impossible for the plaintiff to timely assert his
or her claim.23 We have neither accepted nor rejected this theory
of tolling.
But this case does not require us to decide whether the
statute of limitations should be tolled when the plaintiff faces
extraordinary circumstances beyond his control, because Kaiser
faced no such circumstances. He claims the events following the
denial of his insurance claim his divorce, incarceration, and
illness add up to extraordinary circumstances. But these are
not the kind of extraordinary circumstances that would justify
tolling. Courts have allowed equitable tolling when plaintiffs
have been kept from the courts by legal barriers24 or by truly
extraordinary events, like wars.25 Even if we were to recognize
equitable tolling for extraordinary circumstances, Kaisers
circumstances, as a matter of law, would not earn it.26
3. Tolling under AS 09.10.140 does not save Kaisers
claim.
Alaska Statute 09.10.140 provides that when a person is
incompetent by reason of mental illness or mental disability
during the limitation period, the period is tolled for the time
of the disability. We interpret[] liberally the type of mental
condition that will toll a statute of limitations. The general
test is whether a person could know or understand his legal
rights sufficiently well to manage his personal affairs.27 Kaiser
does not raise this tolling statute, but he does assert that he
was totally incapacitated . . . for approximately six [] months
in 1999 and that he was physically and intellectually unable to
function in a reasonably normal manner during his second
hospitalization, in May of 2000. Even accepting the inference
that the 2000 hospitalization left him incapacitated for the
entire month of May, that adds up to seven months of incapacity.
Under the most generous statute of limitation that might be
available to him, Kaiser had three years to file his claim.28 He
filed four years after the statute began running. Even with
seven months tolling, he was untimely as a matter of law, and his
claim is barred by the statute of limitations.
IV. CONCLUSION
For the foregoing reasons, the judgment of the superior
court is AFFIRMED.
_______________________________
1 This factual account is drawn from the allegations of
Kaisers complaint, the attachments thereto, and assertions he
made in subsequent briefing. The attachments are properly
considered as part of the complaint. See Hal Roach Studios, Inc.
v. Richard Feiner & Co., Inc., 896 F.2d 1542, 1555 (9th Cir.
1990); Ahwinona v. State, 922 P.2d 884, 886 (Alaska 1996).
Although the subsequent assertions are unsworn and not part of
the record, they are not contested and we include them here in
order to provide the pro se appellant the fullest possible
opportunity to make his case.
2 Alaska R. Civ. P. 12(b); Martin v. Mears, 602 P.2d 421,
425-26 (Alaska 1979).
3 Reed v. Municipality of Anchorage, 741 P.2d 1181, 1184
(Alaska 1987).
4 Kollodge v. State, 757 P.2d 1024, 1026 & n.4 (Alaska
1988) (quotation marks and ellipsis omitted).
5 Hutton v. Realty Executives, Inc., 14 P.3d 977, 979
(Alaska 2000).
6 Toney v. City of Anchorage Police Dept, 950 P.2d 123,
124 (Alaska 1997).
7 Alaska R. Civ. P. 56(c).
8 Yurioff v. American Honda Motor Co., 803 P.2d 386, 388
(Alaska 1990).
9 Power Constructors, Inc. v. Taylor & Hintze, 960 P.2d
20, 28 (Alaska 1998).
10 The resolution of this particular case does not relieve
the superior court of its duty to clarify the standard it uses
and to announce whether it is excluding outside material.
11 AS 09.10.070.
12 AS 09.10.053.
13 See Abbott v. State, 979 P.2d 994, 997-98 (Alaska
1999); see also Fred Meyer, Inc. v. Bailey, 100 P.3d 881, 886
(Alaska 2004).
14 Gudenau & Co., Inc. v. Sweeney Ins., Inc., 736 P.2d
763, 769 (Alaska 1987); see also Groseth v. Ness, 421 P.2d 624,
630 (Alaska 1966).
15 Law Offices of Steven D. Smith, P.C. v. Borg-Warner
Security Corp., 993 P.2d 436, 446 (Alaska 1999).
16 Krossa v. All-Alaskan Seafoods, Inc., 37 P.3d 411, 418-
19 (Alaska 2001) (quotation marks and citation omitted).
17 See Abbott, 979 P.2d at 997-98.
18 Although the superior court apparently relied on facts
outside the pleadings without prior notice of conversion to a
Civil Rule 56 motion for summary judgment, the party potentially
prejudiced by the superior courts failure to rely on these
matters was Umialik. Had the superior court decided to deny
Umialiks motion to dismiss based on Kaisers factual assertions
without giving Umialik a chance to file further materials outside
the pleadings, Umialik could have complained about the lack of
notice. But because Kaiser was permitted by the superior court
to make factual claims that fell outside of the pleadings in
response to the motion to dismiss, he was not prejudiced by the
courts failure to formally convert the motion. And whether we
review the superior courts order as a ruling on the Rule 12(b)(6)
motion or as a decision granting summary judgment, Kaiser never
mentioned his equitable estoppel theory in opposition to the
motion in the superior court.
19 See Fred Meyer, Inc. v. Bailey, 100 P.3d at 886;
Dayhoff v. Temsco Helicopters, Inc., 772 P.2d 1085, 1087 (Alaska
1989).
20 Id.
21 Abbott, 979 P.2d at 998 (applying federal law).
22 See, e.g., Sopko v. Dowell Schlumberger, Inc., 21 P.3d
1265, 1270-72 (Alaska 2001); Bauman v. Day, 892 P.2d 817, 827-28
(Alaska 1995); Greater Area, Inc. v. Bookman, 657 P.2d 828, 829-
30 (Alaska 1982).
23 Abbott, 979 P.2d at 998; see also, e.g., Seattle
Audubon Socy v. Robertson, 931 F.2d 590, 596 (9th Cir. 1991)
([W]hen external forces, rather than plaintiffs lack of
diligence, account for the failure to file a timely claim,
equitable tolling is proper.); Dean Witter Reynolds, Inc. v.
Hartman, 911 P.2d 1094, 1099 (Colo. 1996) (allowing equitable
tolling when truly extraordinary circumstances prevented the
plaintiff from filing his or her claim despite diligent efforts);
Machules v. Dept of Admin., 523 So. 2d 1132, 1134 (Fla. 1988)
(allowing tolling when plaintiff has in some extraordinary way
been prevented from asserting his rights).
24 Cf. Seattle Audubon, 931 F.2d at 595-96 (equitably
tolling limitations period because unconstitutional statute
barred plaintiffs from filing claims).
25 E.g., Hanger v. Abbott, 73 U.S. 532, 542 (1867)
(tolling statute of limitations because Civil War made filing
suit impossible); Osbourne v. United States, 164 F.2d 767, 768-69
(2d Cir. 1947) (tolling statute of limitations because plaintiff
held in Japan during Second World War was unable to file claim).
26 Cf. Yurioff v. American Honda Motor Co., 803 P.2d 386,
389-90 (Alaska 1990) (holding that discovery rule did not save
plaintiffs untimely claim merely because he was bedridden).
27 Adkins v. Nabors Alaska Drilling, Inc., 609 P.2d 15, 23
(Alaska 1980).
28 See AS 09.10.053 (three-year statute of limitations for
contract actions).
