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Cummins, Inc. v. Nelson (06/24/2005) sp-5917
Cummins, Inc. v. Nelson (06/24/2005) sp-5917
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
CUMMINS, INC. and )
CUMMINS NORTHWEST, INC., ) Supreme Court Nos. S-11172/11201
)
Appellants/Cross-Appellees, ) Superior Court No. 1JU-01-1386 CI
)
v. ) O P I N I O N
)
NORVAL NELSON, JR., individually ) [No. 5917 - June 24,2005]
and BARBARA CADIENTE- )
NELSON, individually; NORVAL )
NELSON, JR. and BARBARA )
CADIENTE-NELSON d/b/a )
F/V ALEUT PRINCESS, )
)
Appellees/Cross-Appellants. )
)
Appeal from the Superior Court of the State
of Alaska, First Judicial District, Juneau,
Larry R. Weeks, Judge.
Appearances: Larry G. Berry, Robertson,
Monagle & Eastaugh, Anchorage, and James D.
Dasso and Therese C. King, Foley & Lardner,
Chicago, Illinois, for Appellants/Cross-
Appellees. Michael L. Lessmeier, and Sheldon
E. Winters, Lessmeier & Winters, Juneau, for
Appellees/Cross-Appellants.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
EASTAUGH, Justice.
I. INTRODUCTION
The Nelsons fishing boat caught fire, burned, and sank
soon after Piston and Rudder Corporation (P&R) renovated it. The
renovations, called a repower, included installation of a
Cummins, Inc. marine engine. The Nelsons sued P&R, Cummins,
Inc., and Cummins Northwest, Inc. A jury found that P&R acted
negligently and that the Cummins defendants cloaked P&R with the
authority to act on their behalf by directing the Nelsons to P&R
and assuring them that P&R could repower their vessel. The
Cummins defendants appeal. We affirm. We conclude that (1) the
evidence adequately supports the jurys negligence and vicarious
liability findings; (2) the special verdict form appropriately
paraphrased the jury instructions; (3) any potentially erroneous
jury instruction that did not influence the negligence or
vicarious liability findings was not prejudicial; and (4) any
potentially erroneous denial of a directed verdict motion was
harmless.
II. FACTS AND PROCEEDINGS
A. The Repowering of the Aleut Princess and the Fire
Norval and Barbara Nelson own and operate a fishing
business based out of Juneau.1 The F/V Aleut Princess was a
seventy-eight-foot wooden boat and one of their two commercial
fishing vessels. Cummins, Inc. manufactures marine engines and
Cummins Northwest is a distributor for Cummins, Inc.s products.
We refer to Cummins, Inc. and Cummins Northwest collectively as
Cummins except when context requires specificity.
In July 2000 the Aleut Princess suffered an engine
breakdown in the Lynn Canal area between Haines and Juneau.
Norval Nelson chose to replace the main engine with one
manufactured by Cummins, Inc. because he had a Cummins engine in
his other vessel and liked its performance. He called his wife
and asked her to look for a Cummins ad he had seen in a trade
magazine. Barbara Nelson gave her husband the Cummins Northwest
telephone number she found in an advertisement in Pacific
Fishing. Norval Nelson testified that he called Cummins
Northwest, explained to its representative that he wanted to
repower his boat, and was told I sure can help you out.2 He
testified that the Cummins Northwest representative told him
Petersburgs where you want to go and we can fix you up there.
Norval Nelson also testified that he was told by the Cummins
Northwest representative that Piston and Rudder, a marine repair
shop in Petersburg, could put in the engine there for [him] and
take care of [him] and get [him] back on the road. P&R is an
authorized dealer for Cummins Northwest.
Norval Nelson testified that the Cummins Northwest
representative gave him the phone number for P&R. He testified
that he had never heard of P&R before this conversation, that he
called P&R and spoke with Mike Luhr, P&Rs owner, about repowering
the Aleut Princess, and that he gave Luhr the boats
specifications. Barbara Nelson testified that Luhr told her that
he had the appropriate reduction gear in stock and that the
repower could be completed by August 2000.
The Nelsons had the Aleut Princess towed to P&R in
Petersburg. Jason Luhr, Mike Luhrs nephew, testified that P&R
removed the old engine and fuel system, installed a 600-
horsepower Cummins KTA19 diesel engine, rebuilt the exhaust
system, mounted and wired instrument panels, and installed
coolant and plumbing. P&R also changed the main and return fuel
lines, performed work on the hydraulic system, and installed a
new reduction gear. P&R encountered multiple problems during the
engines installation and on subsequent sea trials.
P&R was ready to release the Aleut Princess to Nelsons
son on August 17, 2000. Barbara Nelson testified that her
husband did not want the boat to leave P&Rs control without a
warranty. Norval Nelson testified that he telephoned Cummins
Northwest to discuss the warranty. He claimed that he told
Cummins Northwest of the problems P&R had during the sea trials
and that Cummins Northwest told him that they could not provide a
warranty until P&R completed a required installation form.
Norval Nelson testified that he told his son to get written
confirmation of a warranty from Luhr. Luhr faxed Barbara Nelson
a note stating Scott Graf from Cummins is going to call Norval
and verify warranty start date 8/16/00.
The Nelsons received an invoice for $122,820.01 from
P&R for the repower project. Barbara Nelson wrote a check for
the full amount to Mike Luhr and P&R.
Nelsons son left Petersburg for Juneau aboard the Aleut
Princess on August 17, 2000. He and other crew members testified
that the boat vibrated badly when they ran the new engine at 1400
revolutions per minute. Norval Nelson emailed Cummins about the
vibration problem on August 18. Cummins called the Nelsons once
but it was early in the morning and Barbara Nelson testified that
she asked them to call back. Cummins never called back.
On August 25 the Nelsons took the Aleut Princess to
Angoon. Upon arrival, the boat was docked and the Cummins engine
was shut down. Nelson testified that the only power source left
running was a Detroit Diesel 271 auxiliary engine.
Around midnight a bystander testified that he saw the
Aleut Princess go real dim and then [go] bright twice. He
checked on the boat, noticed smoke, and rang the siren. Nelson
testified that by the time he arrived on the dock, the Aleut
Princess was filled with smoke. He and his crew did not see
flames on the exterior of the vessel or in the galley. The only
flames they saw were in an area above and slightly forward of the
still-running Detroit Diesel engine. One crew member testified
that he looked into the engine room and saw flames. Nelson
claimed that he was attempting to extinguish the fire when there
was an explosion and he was forced to abandon the boat. The fire
could not be stopped and the Aleut Princess had to be cut loose
from the dock; it drifted away and eventually sank. Because the
boat sank in water too deep for recovery, no physical evidence of
the cause of the fire exists.
B. Proceedings Below
The Nelsons filed a superior court complaint in Juneau
against Cummins, Inc., Cummins Northwest, and P&R for (1) breach
of contract; (2) breach of express and implied warranties; (3)
product liability; and (4) negligence.3 The case was tried to a
jury in Juneau.
Shortly before trial, the Nelsons settled with P&R.
P&R was excused from participation at trial and agreed not to put
on a defense. In exchange, the Nelsons agreed to pursue recovery
on any judgment against Cummins before attempting to collect from
P&R. The agreement was introduced as an exhibit at trial.
Two fire investigators testified for the Nelsons. One
testified that he had determined that the fire did not originate
on the deck, in the wheelhouse, or in any area above deck. They
both thought that it was highly probable that the fire was caused
by some alteration to the Aleut Princess during the repower. The
only active fuel source was the auxiliary engine, which was
situated below a newly relocated T in the fuel line. One
investigator testified that the fire most likely originated in
the area of the T. But neither investigator could conclusively
determine the exact cause of the fire. Both ruled out the
Cummins engine itself as a possible source of the fire.
At the close of all evidence, Cummins moved for a
directed verdict on all counts and objected to some jury
instructions, including one defining product. It also objected
to portions of the special verdict form.
The jury returned a verdict against Cummins, Inc.,
Cummins Northwest, and P&R on each of the four counts and found
that Cummins, Inc. and Cummins Northwest were vicariously liable
for the actions of P&R. The jury allocated fault as follows:
P&R: sixty-six percent; Cummins, Inc.: fourteen percent;
Cummins Northwest: twenty percent; and the Nelsons: zero
percent. The jury found that the Nelsons suffered damages
totaling $923,509.4 The superior court denied Cumminss motions
for judgment notwithstanding the verdict and for a new trial, and
entered final judgment.
On appeal, Cummins contends that (a) the definition of
product in jury Instruction No. 19 was erroneous and prejudicial;
(b) the superior court erroneously refused to grant a directed
verdict or new trial on the product liability, direct
negligence, direct breach of contract, and direct breach of
warranty claims; (c) the superior court erroneously refused to
grant a directed verdict or new trial on the vicarious liability
claims; and (d) portions of the jury instructions prejudicially
conflicted with the special verdict form.5
III. DISCUSSION
A. Standard of Review
We review the denial of a directed verdict motion to
determine whether the evidence, when viewed in the light most
favorable to the non-moving party, is such that reasonable
persons could not differ in their judgment as to the facts.6 We
review the superior courts legal rulings de novo, adopting the
rule of law that is most persuasive in light of precedent,
policy, and reason.7 We review jury instructions de novo when a
timely objection is made.8 Without a timely objection, we will
only review instructions for plain error.9 A special verdict
form is a type of jury instruction subject to the same standard
of review.10
B. The Jurys Finding that Cummins Was Vicariously Liable
for P&Rs Negligence Was Supported by the Evidence.
Cummins argues that it should have been granted a
directed verdict on the vicarious liability claim because the
trial evidence was so weak that, as a matter of law, it could not
justify a finding of apparent authority. Cummins contends that
Nelson presented no evidence showing that Cummins did anything
that the Nelsons reasonably relied upon to believe that P&R had
any relationship beyond a traditional
manufacturer/distributor/dealer relationship with Cummins.
(Emphasis in original.)
The superior court concluded that reasonable jurors
could find for the Nelsons and denied Cumminss directed verdict
motion. The jury found that P&R was negligent and that P&Rs
negligence was a legal cause of the fire. Cummins has not
appealed this finding. The jury also found Cummins vicariously
liable for P&Rs negligence based on apparent authority.11
Apparent authority is used to hold a principal
accountable for a third partys belief about an actors authority
to act as an agent for the principal when the belief is
reasonable and is traceable to a manifestation of the principal.12
Apparent authority is created by written or spoken words or any
other conduct of the principal which, reasonably interpreted,
causes the third person to believe that the principal consents to
have the act done on his behalf by the person purporting to act
for him.13 There are three considerations in evaluating apparent
agency: (1) the manifestations of the principal to the third
party; (2) reliance on the principals manifestations by the third
party; and (3) the reasonableness of the third partys
interpretation of the principals manifestations and the
reasonableness of the third partys reliance.14 If a principal
cloaks its apparent agent with authority to enter into a
transaction on its behalf, the principal is liable as if it had
entered into the transaction personally.15
1. Cumminss manifestations to Nelson
A manifestation may be in the form of written or spoken
words or any other conduct . . . .16 The manifestation may be
directly communicated to the third party or may come through
signs, advertising, authorization of an agent to claim that he is
authorized, or continuous employment of the agent.17
Nelson testified that, after his wife gave him the
phone number from an advertisement, he called Cummins Northwest
in Anchorage, explained which engine he wanted to purchase, and
asked if they could help him out.18 According to Nelson, Cummins
Northwests employee responded: Yeah, I sure can help you out. .
. . Petersburgs where you want to go and we can fix you up there.
Nelson testified that the Cummins Northwest employee
gave him P&Rs phone number and told him that P&R could put in the
engine there for [him] and take care of [him] and get [him] back
on the road. Nelson then called P&R and negotiated the repower
with Mike Luhr. There was no evidence that Nelson had further
contact with Cummins, Inc. or Cummins Northwest until after the
repower was complete.
Cummins correctly argues that in this case our review
of the evidence should focus on Cumminss manifestations that
Nelson was aware of. In a case in which there was no
communication between the principal and the third party, we
overturned a finding of apparent authority.19 But in this case,
Nelson testified that he spoke with an employee of Cummins
Northwest and that the employee referred him to P&R, telling him
that we can fix you up there. The evidence of Cumminss
manifestations to Nelson was sufficient to present a jury
question concerning this element of the Nelsons apparent
authority claim.20
2. Nelsons reliance on Cumminss manifestations
The commentary to the Restatement (Second) of Agency
states [t]he mere fact that acts are done by one whom the injured
party believes to be the defendants servant is not sufficient to
cause the apparent master to be liable. There must be such
reliance upon the manifestation as exposes the plaintiff to the
negligent conduct.21
The evidence was sufficient to allow the jury to
determine whether Nelson relied on Cumminss manifestations in
choosing to have his new engine installed by P&R.22 Nelson
testified that he decided to have a Cummins engine installed in
the Aleut Princess because he liked the performance of the
Cummins engine in his other vessel. Nelson had his wife retrieve
the Cummins Northwest advertisement, called Cummins Northwest,
and was referred by Cummins Northwest to P&R. Nelson testified
that he had never heard of P&R before this conversation. If he
had known that P&R was not part of Cummins, Nelson testified he
would not have had his engine installed there because it is too
small of an operation. Ive got to work with people that I know
will back me if something goes wrong, be able to get me . . .
fixed up, get me back out on the grounds, like they said they
would. Nelson testified that he chose Cummins [b]ecause theyre a
big company and they stand by . . . their word.
Reasonable persons could permissibly find from the
evidence that Nelson believed he was dealing with Cummins during
the entire repower transaction. His initial contact was with
Cummins Northwest. When the installation was complete and Nelson
was looking for a warranty for the work done on the Aleut
Princess, he called Cummins Northwest directly. After the Aleut
Princess was released by P&R, Nelson sent an email directly to
Cummins asking for help with the vibration problem. The evidence
of Nelsons reliance on Cumminss manifestations was sufficient to
present a jury question on this element of apparent authority.
3. Reasonableness of Nelsons belief that P&R was
acting for Cummins and reasonableness of his
reliance on Cumminss manifestations
Per the commentary to Restatement (Second) of Agency
8, [a]pparent authority exists only to the extent that it is
reasonable for the third party dealing with the agent to believe
that the agent is authorized.23
Nelson testified that he believed that he was dealing
with Cummins during the entire installation. Cummins argues that
Nelson should have known that P&R was not an agent of Cummins
because P&R is an authorized dealer for manufacturers other than
Cummins. But we must consider Cumminss manifestations to Nelson
in light of what Nelson knew or should have known at the time of
the manifestations.24 Nelson testified that he did not know that
P&R was a dealer for other manufacturers or distributors. He
testified that he had never done business with P&R before the
repower. Cummins argues that, because P&R displayed brochures
from other manufacturers in its shop and was listed as an
authorized dealer for other manufacturers in the Marine Yellow
Pages, Nelson should have been alerted to the fact that P&R was
not Cumminss agent. But Norval Nelson testified that he
negotiated the engine installation with Mike Luhr over the
telephone and that he never personally visited P&Rs shop during
the installation. At trial, Cummins questioned Norval Nelson
about the reasonableness of his belief that he was dealing with
Cummins through P&R because Cumminss name was not listed on P&Rs
letterhead and there was no mention of Cummins in the bill. But
Nelson testified that he did not receive any written
documentation from P&R until after the repower was nearly
complete.
There was also evidence that tended to show Nelsons
belief was unreasonable. When Nelson telephoned P&R, no one that
Nelson spoke to represented themselves as an employee of Cummins
and the telephone was answered as Piston & Rudder. Nelson
testified that he understood the difference between an appliance
manufacturer and a dealer but that he did not think that the same
manufacturer-dealer relationship existed in the automobile
industry.
Cumminss main argument on appeal is that the
manufacturer/ distributor/dealer relationship does not give rise
to apparent authority. But the evidence reasonably permitted a
finding that Nelson did not rely simply on P&Rs status as an
authorized dealer when he chose to have his vessel repowered by
P&R. Norval Nelson testified that a Cummins Northwest employee
told him that we can fix you up in Petersburg.
It is usually for the trier of fact to decide whether a
reasonable person in the position of the third party would
believe that the agent had the authority or the right to do a
particular act.25 The jury brings broad practical experience to
bear on the evidence, and motions for directed verdict should be
scrutinized under a principle of minimum intrusion into the right
to jury trial . . . .26 Viewed in the light most favorable to the
prevailing parties at trial, there was adequate evidence
supporting Norval Nelsons belief that P&R was acting on behalf of
Cummins to allow the jury to consider the reasonableness element
of the Nelsons apparent authority claim.
4. Submission of apparent authority to the jury
As we saw above, there was sufficient evidence
supporting each element of the Nelsons apparent authority claim
to allow the jury to determine whether Cummins cloaked P&R with
authority to act on its behalf. The superior court did not err
by refusing to grant Cumminss directed verdict motion. Because
the jury permissibly found that P&R had apparent authority to act
for Cummins Northwest and Cummins, Inc., both defendants are
liable for the negligence of P&R as if they were personally
negligent.27
C. The Special Verdict Form Appropriately Paraphrased the
Jury Instructions.
Cummins argues that the special verdict form invited
the jury to stray from the elements of apparent agency. In
essence, Cummins argues that, even though Instruction No. 38
correctly required the jury to find both a manifestation by
Cummins and reasonable reliance on that manifestation by Nelson,
the special verdict form only asked the jury whether Nelson had
reason to believe that P&R was acting for Cummins.
Alaska Civil Rule 49(b) allows the superior court to
submit to the jury written questions susceptible of categorical
or other brief answer . . . . We treat a special verdict form as
a type of jury instruction subject to the same standard of review
applicable to claims of instructional error.28 To be reversibly
erroneous, an instruction must contain an erroneous statement of
the law and the error must be prejudicial.29
Instruction No. 38 read in part:
The law makes Cummins Northwest or Cummins
Engine responsible for the acts of Piston and
Rudder if you decide it is more likely than
not true that:
(1) Cummins Northwest or Cummins Engine did
or said something that caused the plaintiff
reasonably to believe that Piston and Rudder
was authorized to act on behalf of Cummins
Northwest or Cummins Engine; and
(2) The plaintiff reasonably relied on this
belief.
Question No. 10(a) of the special verdict form asked: Did the
plaintiffs have reason to believe that Piston and Rudder was an
agent of Cummins Northwest? Question No. 10(b) asked: Did the
plaintiffs have reason to believe that Piston and Rudder was an
agent of Cummins Engine?
A special verdict form question need not lay out all of
the elements in a cause of action.30 A special verdict form
question is intended to be simple and concise, not repetitive or
misleading.31 Indeed, if the special verdict form could not
paraphrase the instructions to some extent, the special verdict
form would be as long as the relevant instructions themselves,
and would have to repeat them verbatim. We assume that a jury
follows the trial courts instructions,32 and we consider this
special verdict form in the context in which it was given.33
Instruction No. 38 required the jury to find both a manifestation
by Cummins and reasonable reliance on that manifestation by
Nelson. It instructed the jury that if both requirements were
not fulfilled, Cummins was not responsible for the actions of
P&R.34 Questions No. 10(a) and 10(b) appropriately paraphrased
the jury instruction and were therefore not erroneous.
D. Jury Instruction No. 19 Did Not Influence the Findings
of Negligence or Apparent Authority and Was Not
Prejudicial.
Cummins argues that Instruction No. 19 erroneously
instructed the jury on the definition of product. Cummins claims
that it was severely prejudiced because the jury found Cummins
strictly liable for the fire even though Nelson presented no
evidence that the Cummins engine was defective or that it caused
the fire.
Instruction No. 19 read:
In considering plaintiffs separate theories
of recovery, you are instructed that the
product at issue is a marine engine, model
KTA 19-M3, manufactured by Cummins, Inc. As
used in these instructions, the term product
includes the installation of all those things
necessary for the installation of the engine.
To remand for an incorrect jury instruction, we must
conclude both that the instruction incorrectly states the law and
that it was prejudicial.35 An erroneous instruction is prejudicial
if it can be said that the verdict may have been different had
the erroneous instruction not been given.36
We conclude that Instruction No. 19 was not
prejudicial.37 Instruction No. 15 made it clear that the jury was
being instructed on the Nelsons four alternate theories of
liability: product liability, negligence, breach of contract, and
breach of warranty.
Instruction No. 17 began: Plaintiffs first theory of
recovery is that Plaintiffs were damaged by a defect in a product
which the Defendant made or sold; it then described the elements
of a product liability claim. Instructions No. 18, 19, and 20
defined words and phrases used in Instruction No. 17.
Instructions No. 21, 22, and 23 related to the burden of proof
and how it could be met, and comparative negligence.
Instruction No. 24 began: [t]he plaintiffs second claim
is that they were harmed because of the negligence of the
defendants . . . ; it then described the elements of a negligence
claim. The word product did not appear in this instruction or in
the next five instructions that related to the negligence claim.
Reading the instructions as a whole, it is apparent
that the jury was instructed separately on each of the plaintiffs
four liability theories. For example, Instructions No. 20 and
No. 28 separately define legal cause for the product liability
claim and the negligence claim, respectively. Instruction No. 20
provided that [a] defective condition in a product is a legal
cause of harm if it is a substantial factor in bring[ing] about
the harm. Instruction No. 28 defined legal cause as an act or
failure to act which is a substantial factor in bring[ing] about
the harm. This demonstrates that the jury was told to consider
Instruction No. 19s definition of product when it was determining
liability under the product liability claim, but not when it was
considering the negligence claim. The jury found liability on
the negligence claim. The jurys negligence finding was not
dependent on the definition of product in Instruction No. 19.
Nor would Instruction No. 19 have influenced the jurys
consideration of the vicarious liability claim. Instruction No.
38 explained the elements of apparent agency. The word product
did not appear in this instruction, and the instruction did not
refer the jury back to the product liability instructions.
Cummins alternatively argues that we should remand for
a new trial because the definition of product took the issue of
vicarious liability away from the jury by permitting it to hold
Cummins responsible for the installation of all those things
necessary for the installation of the engine.38 Cummins contends
that the jury might have found differently on the vicarious
liability claim had this instruction had not been given. This
argument is unpersuasive because the jury instructions clearly
dealt separately with the four claims.
The Nelsons counsel did not argue to the jury that
Instruction No. 19 required the jury to find vicarious liability.
He relied on the definition of product in Instruction No. 19 to
argue that Cummins had warranted the entire repower project. When
explaining the evidence that supported the apparent authority
claim, he did not refer to Instruction No. 19. He argued that
Cummins cloaked P&R with apparent authority through its
advertisements and direct manifestations to the Nelsons.
We conclude that the record contains adequate evidence
to support the jurys findings that P&R was negligent and that
Cummins was vicariously liable for P&Rs actions. The jury
instructions and special verdict questions that related to
negligence and apparent agency were not erroneous and we affirm
the verdict and damage award on these legal bases. Any
potentially erroneous jury instruction unrelated to the claims of
vicarious liability or negligence is therefore not prejudicial.
D. The Superior Courts Refusal To Direct a Verdict on the
Direct Liability Claims Was Harmless Error.
Cummins argues that the superior court erred by
refusing to direct a verdict for Cummins on the product
liability, direct negligence, breach of contract, and breach of
warranty claims. Even assuming error, the failure to grant a
directed verdict on the direct (non-vicarious) liability claims
was harmless. If a jury returns separate verdicts on independent
claims, we can affirm the judgment if substantial evidence
supports any of those claims.39 Substantial evidence here
supported the jurys findings that P&R was negligent and that
Cummins, Inc. and Cummins Northwest were vicariously liable for
P&Rs negligence. There is consequently no need to address the
merits of Cumminss directed verdict motions on the direct
liability claims.
IV. CONCLUSION
For these reasons, we AFFIRM the judgment.
_______________________________
1 The facts outlined below were presented to the jury at
trial. We view the facts in a light most favorable to the
Nelsons, who prevailed at trial. Intl Bhd. of Elec. Workers,
Local 1547 v. Alaska Util. Constr., Inc., 976 P.2d 852, 853 n.1
(Alaska 1999).
2 Norval Nelson testified that he called Cummins Alaska,
or something like that but he referred to a Cummins Northwest
advertisement as the source of the telephone number that he
dialed.
3 The Nelsons also asserted a res ipsa loquitor claim
that was dismissed on summary judgment.
4 The jury awarded the Nelsons the following damages:
(a) value of the Aleut Princess, $315,000; (b) items of personal
property, $20,260; (c) past lost income, $64,249; (d) future lost
income, $24,000; (e) personal injury, $200,000; (f) emotional
distress (Norval Nelson), $200,000; and (g) emotional distress
(Barbara Nelson), $100,000.
5 The Nelsons cross-appeal argues that the superior court
erroneously limited damages to fair market value of the Aleut
Princess. It also argues that the superior court erroneously
refused to instruct the jury on punitive damages. They condition
their cross-appeal on a reversal for a new trial in Cumminss
appeal. Because we affirm, we need not address the cross-appeal
arguments.
6 K&K Recycling, Inc. v. Alaska Gold Co., 80 P.3d 702,
722 (Alaska 2003).
7 Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).
8 Reich v. Cominco Alaska, Inc., 56 P.3d 18, 25 (Alaska
2002).
9 Manes v. Coats, 941 P.2d 120, 125 (Alaska 1997).
10 Glamann v. Kirk, 29 P.3d 255, 259 (Alaska 2001).
11 Special verdict Question Nos. 10(a) and 10(b) addressed
the issue of apparent authority. Question No. 10(a) asked: Did
the plaintiffs have reason to believe that Piston and Rudder was
an agent of Cummins Northwest? Question No. 10(b) asked: Did
the plaintiffs have reason to believe that Piston and Rudder was
an agent of Cummins Engine? The jury answered Yes to both
questions.
12 Restatement (Second) of Agency 8 (1958). Section 8
states [a]pparent authority is the power to affect the legal
relations of another person by transactions with third persons,
professedly as agent for the other, arising from and in
accordance with the others manifestations to such third persons.
13 City of Delta Junction v. Mack Trucks Inc., 670 P.2d
1128, 1130 (Alaska 1983) (adopting the Restatement (Second) of
Agencys general rule for creation of apparent authority).
14 Restatement (Second) of Agency 8 (1958).
15 Restatement (Second) of Agency 140, cmt. a (1958).
16 Restatement (Second) of Agency 27 (1958).
17 Restatement (Second) of Agency 8, cmt. b (1958).
18 For more detailed discussion of the proceedings and
evidence, see Part II above.
19 Bruton v. Automatic Welding & Supply Corp., 513 P.2d
1122, 1126 (Alaska 1973) (holding that trial court clearly erred
in finding agency relationship when principal never indicated to
third party that supposed agent had authority). See also Perkins
v. Willacy, 431 P.2d 141, 143 (Alaska 1967) (holding it was clear
error for trial court to find apparent agency when third party
never spoke with principal about transaction at issue).
20 See, e.g., Fleming Co. v. NLRB, 349 F.3d 968, 973 (7th
Cir. 2003) (sustaining boards conclusion that management cloaked
employee with authority in part by introducing employee as
supervisor and referring to employee as team leader); Anchor
Crane & Hoist Serv. Co. v. Sumrall Pers. Serv., Inc., 620 S.W.2d
653, 654 (Tex. Civ. App. 1981) (affirming jurys finding that
company president cloaked employee with hiring power because
president transferred call from recruiter directly to employee).
21 Restatement (Second) of Agency 267, cmt. a (1958).
22 City of Delta Junction v. Mack Trucks Inc., 670 P.2d
1128, 1131 (Alaska 1983) (holding it was jury question whether
Mack Trucks acquiescence to Alaska Macks use of its name and
reputation was sufficient for apparent agency). See also Mercer
v. Weyerhaeuser Co., 735 A.2d 576, 594 (N.J. Super. App. Div.
1999) (holding plaintiffs assertions that principals reputation
influenced their decision created issue of fact for jury).
23 Restatement (Second) of Agency 8, cmt. c (1958).
24 See Restatement (Second) of Agency 49(a) (1958).
25 Mack Trucks, 670 P.2d at 1130.
26 Id. at 1130 n.2 (internal citations omitted).
27 See Austin v. Fulton Ins. Co., 498 P.2d 702, 705
(Alaska 1972) (noting that principal is liable for tort committed
by agent within scope of apparent authority); see also
Restatement (Second) of Agency 8, cmt. a (noting that if
apparent authority exists, third party has same rights with
reference to principal as when agent is authorized); Restatement
(Second) of Agency 215 (1958) (stating principal is liable to
third party for torts committed by authorized agent).
28 If no timely objection is made to an instruction, we
will review the instruction only for plain error. See supra note
9. Cummins asserted a general objection to the special verdict
form as being potentially confusing but did not specifically
object to Question Nos. 10(a) or 10(b). It is doubtful that this
was an adequate objection, but the applicable standard of review
is irrelevant because we conclude that Question Nos. 10(a) and
10(b) were not incorrect.
29 Grimes v. Haslett, 641 P.2d 813, 818 (Alaska 1982).
30 See Simmons v. Garces, 763 N.E.2d 720, 735 (Ill. 2002);
Seattle W. Indus., Inc. v. David A. Mowat Co., 750 P.2d 245, 251
(Wash. 1988).
31 Simmons, 763 N.E.2d at 735. See also Smith v. Sturm,
Ruger & Co., 695 P.2d 600, 604 (Wash. 1984) ([A]n instruction
which does not purport to summarize all the issues is not held to
the same standard as a formula instruction.).
32 Central Bering Sea Fishermens Assn v. Anderson, 54 P.3d
271, 281 (Alaska 2002).
33 See Simmons, 763 N.E.2d at 735.
34 Instruction No. 38 as it appears in the record contains
a double negative. The superior court deleted one of the
negative terms when it read the instruction to the jury. No
party claims that the jury was misled by Instruction No. 38.
35 General Motors Corp. v. Farnsworth, 965 P.2d 1209, 1214
(Alaska 1998).
36 Beck v. State, Dept of Transp. & Pub. Facilities, 837
P.2d 105, 114 (Alaska 1992).
37 The majority of Cumminss argument contends that
Instruction No. 19 was an incorrect statement of Alaska law.
Because we determine that any error was not prejudicial, we do
not address the threshold question of whether the substance of
Instruction No. 19 was a correct statement of the law.
38 See supra p. 17.
39 See Del Monte Dunes at Monterey, Ltd. v. City of
Monterey, 95 F.3d 1422, 1426 (9th Cir. 1996), rehg granted by 118
F.3d 660 (9th Cir. 1997), affd by 526 U.S. 687 (1999) (holding
that, where jury was instructed separately on two claims and
found defendant liable on both, verdict could be affirmed if
substantial evidence supported either claim).
