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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Brooks v. Hollaar (3/22/2013) sp-6761

Brooks v. Hollaar (3/22/2013) sp-6761

         Notice: This opinion is subject to correction before publication in the PACIFIC  REPORTER . 

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RONALD A. BROOKS,                                  ) 

                                                   )   Supreme Court No. S-14181 

                       Appellant,                  ) 

                                                   )   Superior Court No. 4FA-09-01303 CI 

        v.                                         ) 

                                                   )  O P I N I O N 

TIMOTHY HOLLAAR,                                   ) 

                                                   )  No. 6761 - March 22, 2013 

                       Appellee.                   ) 


                Appeal from the Superior Court of the State of Alaska, Fourth 

                Judicial District, Fairbanks, Michael A. MacDonald, Judge. 

                Appearances:      James M. Hackett, Law Office of James M. 

                Hackett, Fairbanks, for Appellant.  Shelby B. Mathis, Oravec 

                Law Group, LLC, Fairbanks, for Appellee. 

                Before:  Fabe, Chief Justice,  Winfree, Stowers, and Maassen, 

                Justices.  [Carpeneti, Justice, not participating.] 

                MAASSEN, Justice. 


                A jury found Ronald Brooks liable to his former brother-in-law, Timothy 

Hollaar, for the full amount of loans that had been memorialized by four promissory 

notes.  On appeal, Ronald argues that the trial court erred in allowing Timothy to recover 

more than nominal damages, since Timothy was not the real source of the money and 

intended to pay any recovery to the family members who supplied it.  Ronald also argues 

that   the   trial   court   erred   by   failing   to   make   special   findings  of   fact   on   Timothy’s 

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promissory estoppel claim.        Finally, Ronald argues that the trial court erred in naming 

Timothy the prevailing party.   Because Timothy could lawfully sue to recover the loans, 

the promissory estoppel claim was properly submitted to the jury, and Timothy was the 

prevailing party, we affirm the judgment. 


                Ronald Brooks and Carmen   Hollaar were married in 1989.                  In 1991, as 

tenants by the entirety, they purchased a parcel of real property on Goldstream Road in 

Fairbanks.     For more than a decade, they lived in a trailer on the property with their 


                Between late 2005 and early 2006, Timothy Hollaar, Carmen’s brother, 

loaned   Ronald   and   Carmen   a   total   of   $184,439   to   be   used   for   the   construction   of   a 

permanent residence on the Goldstream property. The funds originated from Leroy, Ilean, 

and Gwen Hollaar (the Hollaars) — Carmen and Timothy’s father, mother, and sister. 

The   Hollaars   transferred   the   funds   to   Timothy’s   bank   account,   and   Timothy   in   turn 

transferred the funds to Ronald and Carmen. 

                These loans were memorialized in three promissory notes dated September 

17,   2005,   January   5,   2006,   and   February   13,   2006,   and   signed   by   both   Ronald   and 

Carmen.     The notes recite that the loans were to be repaid to Timothy on December 31, 

2006, or upon conveyance of the property, whichever came first. 

                Ronald   and   Carmen   separated   in   2005,   and   Ronald   left   the   Goldstream 

property. Timothy continued to provide money to Ronald and Carmen between February 

and July 2006.      Again the Hollaars were the source of these additional funds, which 

totaled   $81,991.    This   amount   was   memorialized   in   a   fourth   promissory   note   dated 

August 31, 2006, and signed only by Carmen.                In December 2006, Carmen, but not 

Ronald, signed a deed of trust which purported to secure all four promissory notes with 

the Goldstream property. 

                                                   -2-                                            6761

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                In January 2008, having not yet been repaid on any of the promissory notes, 

Timothy      foreclosed    on   the  Goldstream     property    pursuant    to  his  deed   of   trust.   He 

purchased the property at the foreclosure sale for a credit bid of $269,226.1  Ronald and 

Carmen   divorced   in   December   2008.         The   divorce   decree   awarded   the   Goldstream 

property to Ronald, subject to any liens or encumbrances that Timothy had against it. 

Ronald assumed all the debt to Timothy related to the property, to the extent the debt was 

“based on Promissory Note(s) upon which Ron is personally liable.” 

                Timothy brought suit against Ronald in March 2009, asking that the superior 

court award him half the Goldstream property and half its value, the full value of the 

property, or all the money owed on the four promissory notes.                  The superior court, in 

ruling on an early motion to dismiss, held that neither Ronald nor Carmen had the right 

to unilaterally convey an interest in the Goldstream property since it was their marital 

residence.     The   court   held   that   Carmen’s   deed   of   trust   was   therefore   void   and   that 

Timothy owned no interest in the Goldstream property despite his ostensible purchase of 

it at the foreclosure sale.   The court held that Timothy was simply an unsecured creditor 

and that he could sue on the promissory notes. 

                After a jury   trial, Ronald was found liable to Timothy on the first three 

promissory notes, those Ronald had signed, under a contract theory.                  As for the fourth 

promissory   note,   the   one   signed   only   by   Carmen,   the   jury   answered   “Yes”   to   four 

questions on the verdict form asking whether the elements of promissory estoppel were 

         1       “[A] credit bid means that the holder of the note bids up to the amount of 

 money due it by the debtor, thereby extinguishing the debtor’s debt to the extent of the 

 bid.”   Fed. Home Loan Mortg. Corp. v. Appel , 137 P.3d 429, 431 (Idaho 2006).  We 

 observe that the promissory notes total $266,430, and that the superior court, in denying 

 a motion to dismiss, recited   that figure as the amount of Timothy’s credit bid.  The 

 difference is not material to the issues on appeal. 

                                                    -3-                                             6761

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met  and on that basis found Ronald liable on that note as well.                  In light of a dispute as 

to   whether   the   jury   or   the   court   should   decide   the   fourth   question   about   promissory 

estoppel, i.e., whether justice required enforcement of the promise, the court stated on the 

record that it “agrees with the jury in all respects, but agrees that the jury having found 

the first three [elements of promissory estoppel], that justice requires enforcement of the 

defendant’s   promise.”        The   court   entered   judgment   in   Timothy’s   favor   on   all   four 

promissory notes and awarded him attorney’s fees as the prevailing party. 

                 Ronald appeals.   He argues that because Timothy had no economic interest 

of his own in performance of the notes, he could sue for nominal damages but not full 

contract damages.  He contends that the trial court erred by not instructing the jury on this 

argument   and   by   failing   to   grant   his   motion   for   directed   verdict   and   for   judgment 

notwithstanding the verdict based on this argument.                 He also argues that the trial court 

violated Alaska Civil Rule 52(a) when it failed to make specific findings as to Timothy’s 

promissory estoppel claim and Ronald’s unclean hands defense.  Finally, Ronald argues 

that the trial court erred by finding that Timothy was the prevailing party for purposes of 

the award of attorney’s fees.3 

          2       The four questions for the jury on this issue were:  “1) Did the defendant 

 make a promise to the plaintiff regarding any money advanced relating to promissory 

 note number four? . . . 2) Did the defendant expect or should the defendant reasonably 

 have expected that the promise would cause the plaintiff to act? . . .   3) In reliance on the 

 defendant’s promise, did the plaintiff act by advancing money? . . . [and] 4) Does justice 

 require enforcement of the defendant’s promise?” 

         3        Ronald argued in his brief that the trial court also erred by failing to instruct 

 the jury on Ronald’s unclean hands defense.   The record shows that the jury was in fact 

 given   such   an   instruction,   which   Ronald's   counsel   conceded   at   oral   argument.          We 

 therefore consider the point no further. 

                                                      -4-                                               6761

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               We review questions of law de novo, using our independent judgment.4  We 

review the superior court’s factual findings for clear error.5       We review jury instructions 

de novo.6    We review the superior court’s prevailing party determination and award of 

attorney’s fees for an abuse of discretion.7 


        A.      Timothy Is Entitled To Recover Contract Damages From Ronald. 

               Ronald argues that Timothy cannot recover more than nominal damages 

because he admitted both that he had received the loan funds from the other members of 

his family, the Hollaars, and that he planned to give them any recovery from this lawsuit 

in repayment.     According to Ronald, these admissions prove that his promise to pay 

Timothy was merely what the Restatement calls a “gift promise” and that Timothy had 

no economic interest in its performance; under this theory it was the other Hollaars who 

were the third-party “donee beneficiaries” of the promise and had the right to sue for its 

breach.8  The Restatement observes that “[i]f the promisee has no economic interest in the 

performance, as in many cases involving gift promises, the ordinary remedy of damages 

for   breach   of   contract   is   an   inadequate   remedy,   since   only   nominal   damages   can   be 

         4      Jacob v. State, Dep’t of H ealth & Soc. Servs., Office of Children’s Servs., 

 177 P.3d 1181, 1184 (Alaska 2008) (citing Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 


         5      In re Protective Proceedings of W.A. , 193 P.3d 743, 748 (Alaska 2008). 

         6      Sowinski v. Walker, 198 P.3d 1134, 1160 (Alaska 2008). 

         7      Fernandes v. Portwine , 56 P.3d 1, 4-5 (Alaska 2002). 

         8       RESTATEMENT (SECOND) OF  CONTRACTS § 302 cmt. c (1981). 

                                                  -5-                                          6761

----------------------- Page 6-----------------------


recovered,” and “[i]n such cases specific performance is commonly appropriate.”   Citing 

this Restatement provision, Ronald contends that Timothy, as merely the gift promisee, 

can only recover nominal damages or bring suit for specific performance, an equitable 


                 But Timothy’s economic interest in payment of the loans is obvious:   he is 

the named payee on the promissory notes. Ronald and Carmen promised to repay him the 

money.  Whether the funds came to Timothy originally from a bank or from other family 

members, it is undisputed that he is the one who transferred the funds to Ronald and 

Carmen and who secured, by contract, the right to repayment.   Timothy can sue to collect 

the loans. 

                 We also reject the argument that the Hollaars are properly characterized as 

donee beneficiaries of the loan contract with Ronald and Carmen.                    The Hollaars had a 

separate legal relationship with Timothy, either creditor-borrower or principal-agent.  If 

the Hollaars are viewed as Timothy’s creditors, they loaned him money in exchange for 

his promise to pay them back when he was repaid by Ronald and Carmen.                            We have 

recognized the “established rule . . . that ‘a contract to provide a borrower with funds to 

pay   his   debts   does   not   give   creditors   a   right   to   enforce   the   contract   as   third   party 

beneficiaries.’   ”10    A   creditor   can   sue   to   enforce   the   contract   only   where   the   payor 

promises to make payment directly to the creditor.11            Ronald and Carmen promised to pay 

Timothy, not the Hollaars.        Although the Hollaars ultimately benefitted from the loans’ 

         9       Id . at § 305 cmt. a. 

         10      Alaska Cont’l, Inc. v. Trickey , 933 P.2d 528, 533 (Alaska 1997) (quoting 

 Exch. Bank & Trust Co. v. Lone Star Life Ins. Co. , 546 S.W.2d 948, 950 (Tex. Civ. App. 


         11      Id. 

                                                     -6-                                              6761

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repayment, they were not intended beneficiaries of the promises made by Ronald and 

Carmen and could not have sued to enforce those promises. 

              We could alternatively view Timothy as the Hollaars’ agent for the purpose 

of making and collecting on the loans; that is how Timothy’s complaint characterizes his 

role, and Ronald urged the court to deem this to be judicially admitted.  If Timothy is the 

Hollaars’ agent, the Hollaars are not third-party beneficiaries of the loan to Ronald but 

instead are the actual parties in interest.12  But this does not mean Timothy may not sue 

for damages.    An agent who is the promisee on a contract between his principal and a 

third party may maintain an action for breach of contract in his own name.13         Even if 

Timothy is the promisee on the loans only as the Hollaars’ agent, he has the right to sue 

for repayment.  The Restatement observes that “[i]f the agent brings an action in his own 

name but on account of the principal, he sues as a fiduciary and hence he recovers the full 

measure of damages although he is personally caused no pecuniary loss by the failure of 

the third person to perform.”14  Thus, under an agency theory, too, Timothy was entitled 

        12     RESTATEMENT      (SECOND)     OF  AGENCY     §  140   (1958);  RESTATEMENT 

 (SECOND) OF  CONTRACTS § 2(4) (1981). 

        13     RESTATEMENT      (SECOND)   OF  AGENCY     §   363   (“An   agent   who   makes   a 

 contract on behalf of a principal cannot maintain an action thereon in his own name on 

 behalf of the principal although authorized by the principal to bring suit, unless the agent 

 is a promisee or transferee.”) (emphasis added); id. at § 364 (“A person with whom an 

 agent makes a contract on behalf of a principal is subject to liability in an action brought 

 thereon by the agent in his own name on behalf of the principal if the agent is a party 

 promisee. ”) (emphasis added). 

        14     Id. at § 364 cmt. k. 

                                              -7-                                       6761

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to recover full damages regardless of the origins of the funds that were loaned to Ronald 

and Carmen.15 

                Ronald   argues   that   he   will   be   subject   to   double   liability   if   Timothy   is 

allowed to recover, because he theoretically will be liable both to Timothy and to the 

other Hollaars for the same funds.          Ronald’s fears are unfounded.        As discussed above, 

if the Hollaars are viewed as Timothy’s creditors, they have no direct interest in his loans 

to Ronald and cannot sue to collect them.            If Timothy made the loans as the Hollaars’ 

agent, then he sued as their agent and takes the recovery as a fiduciary for the Hollaars, 

who cannot collect the same funds from Ronald again. 

        B.	     The Trial Court Was Not Required To Make Specific Findings Of Fact 

                On Timothy’s Promissory Estoppel Claim Or Ronald's Unclean Hands 


                1.	     Timothy had the right to a jury trial on his promissory estoppel 

                        claim because the relief he sought was legal. 

                As noted above, the jury found that all four elements of promissory estoppel 

existed with regard to the fourth promissory note and therefore found Ronald liable on 

the note despite the fact that it had been signed only by Carmen.  The trial court made no 

separate factual findings on the issue but stated, on the record, that it agreed with the 

jury’s   decision   “in   all   aspects”   and   that   justice   demanded   enforcement   of   Ronald’s 

promise.     Ronald contends that promissory estoppel had to be decided by the court, not 

the   jury;   that   the   jury   was   merely   advisory   on   this   issue   and   Timothy   is   judicially 

estopped from arguing otherwise; and that the court’s oral statement that it agreed with 

the jury’s verdict fails to satisfy the requirement of Civil Rule 52(a) that “the court shall 

         15      Ronald also argues that Timothy is not a “holder in due course” of the 

 promissory notes and therefore holds them subject to various defenses. But Timothy has 

 not argued   that   he  is  a   holder   in   due   course,   and   Ronald’s   defenses   are   unavailing 

 whether Timothy is a holder in due course or not. 

                                                    -8-	                                              6761 

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find the facts specially and state separately its conclusions of law thereon” in any action 

tried with an advisory jury. 

                Advisory juries are addressed by Civil Rule 39(c), which allows the trial 

court to empanel one in an action “not triable of right by a jury.” If Timothy’s promissory 

estoppel claim was “triable of right by a jury,” then the jury could not have been advisory; 

the   claim   was   properly   presented   to   the   jury   to   decide;   and   the   court’s   post-verdict 

adoption of the jury’s findings, though undoubtedly prudent for purposes of appellate 

review, was unnecessary, making irrelevant the requirement of special findings by the 

court under Civil Rule 52(a). 

                A civil litigant’s right to a jury   depends on the relief sought.              “[W]here 

equitable relief is sought . . . this court has disallowed the right to a trial by jury.               But, 

where damages or other relief at law is sought this court has allowed a jury trial.”16                  We 

treat claims sounding in equity as legal when the litigant seeks a   legal remedy.17  In this 

case Timothy relied on promissory estoppel, an equitable doctrine, but sought money 

damages.  He therefore had a right to have a jury decide the claim, and there was no need 

for additional findings by the trial court. 

                 Ronald asserts that Timothy asked the trial court to make an independent 

determination   of   the   fourth   element   of   the   promissory   estoppel   doctrine   and   is   now 

         16      Keltner v. Curtis , 695 P.2d 1076, 1079 n.5 (Alaska 1985) (internal citations 


         17      Henrichs   v.   Chugach   Alaska   Corp. ,   250   P.3d   531,   539   (Alaska   2011) 

 (finding no error in trial court’s failure to instruct jury   on   equitable defenses where 

 plaintiff sought legal remedy of damages for breach of fiduciary duty); cf. Shields v. 

 Cape Fox Corp., 42 P.3d 1083, 1092 (Alaska 2002) (holding that in an action by a 

 village corporation which sought, in part, the removal of  a director, the jury verdict on 

 this issue was merely advisory and the trial court should have entered special findings 

 as required by Civil Rule 52(a)). 

                                                     -9-                                              6761

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judicially estopped from arguing that the jury was anything other than advisory on this 

issue.    “Judicial estoppel bars ‘a party from contradicting previous declarations made 

during the same or an earlier proceeding if the change in position would adversely affect 

the proceedings or constitute a fraud on the court.’ ”18 

                In the pretrial exchange on which Ronald relies for this argument, however, 

Timothy’s counsel asked that the court “let the jury hear this entire case.”          He requested 

that the jury be instructed on promissory estoppel and that the court make a determination, 

post-verdict, as to whether “it’s going to accept the jury verdict,” all with the goal of 

allowing the parties to “address . . . after the fact” whether promissory estoppel was 

properly for the court or the jury.     The court expressly adopted this prudent approach: 

                [H]andling     it  that  way  will  both   preserve   any   objection 

                [Ronald’s counsel] has and also have a complete record, so 

                whatever     the  answer   to  that  question   is  —   I  mean,   the 

                Supreme Court hasn’t answered it yet — they can direct an 

                outcome because all the data will be in for them to do either 


                In  later   debate   over  jury  instructions,   Timothy’s   counsel   repeated    his 

understanding “that everything goes to the jury and [the court] also . . . [was] going to, 

you know, make a determination independently.”   The court observed that this was “the 

safest course.”    When Ronald’s counsel argued that there was “no right to a jury trial at 

all on promissory estoppel,” the court asked Timothy’s counsel again whether he was 

contending that “the jury should decide number 4, whether justice requires enforcement;” 

Timothy’s counsel answered, “I do.” Timothy’s position was thus consistent throughout: 

that the jury was to decide the entire claim, with the court making a separate finding of 

         18     Bruce L. v. W.E., 247 P.3d 966, 976 n.37 (Alaska 2011) (quoting BLACK ’S 

 LAW DICTIONARY 631 (9th ed. 2009)). 

                                                 -10-                                            6761 

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the fourth element just in case it was later determined that it was properly for the court, 

not the jury, to decide.   In short, Timothy’s counsel never made a “declaration,” later 

contradicted, that could form the basis for judicial estoppel. Timothy is not estopped from 

contending that all elements of the promissory estoppel doctrine were properly for the 


              2.	     The trial court was not required to make special findings with 

                      regard to Ronald’s unclean hands defense. 

              Ronald also argues that the trial court erred in its handling of his unclean 

hands defense.   Ronald describes the basis of his defense as “Timothy’s bad conduct . 

. . in entering into an illegal and void deed of trust with Carmen” in December 2006, thus 

clouding   title and unduly complicating the property division in the divorce.        Ronald 

argues that Civil Rule 52(a) required the trial court to make special findings of fact when 

rejecting the unclean hands defense. 

              We disagree.  Rule 52(a) requires the trial court to make such findings only 

when a party has properly asserted the defense and presented evidence to support it.19 

Ronald did neither.    First, unclean hands is an equitable doctrine   that bars claims in 

equity.20  The promissory estoppel claim against Ronald was a claim at law because it 

sought legal relief, as explained above,21 and unclean hands was not available to Ronald 

as a defense. 

               Second, Ronald has presented no evidence that would support the defense. 

“To successfully raise the unclean hands defense under Alaska law, a defendant must 

        19     Henrichs , 250 P.3d at 540. 

        20     Shears v. Myers, 280 P.3d 552, 558-59 (Alaska 2012) (holding that unclean 

 hands is an equitable defense that applies to equitable claims). 

        21      Gudenau v. Bang, 781 P.2d 1357, 1363 n.9 (Alaska 1989) (holding that 

 equitable defenses do not apply to claims at law). 

                                             -11-	                                      6761

----------------------- Page 12-----------------------

show: (1) ‘that the plaintiff perpetrated some wrongdoing’; and (2) ‘that the wrongful act 

related to the action being litigated.’ ”22        In Henrichs, the subject of the litigation was 

“events during the six months in 2004 when Henrichs served as chairman of the board of 

directors,” and we held that alleged wrongdoing in a later board election was not “related 

to the action being litigated” and therefore did not support the defense.23                 So too here. 

Ronald raised unclean hands as a defense to Timothy’s attempt to collect on the four 

promissory notes, the last of which was signed in August 2006, four months before the 

allegedly wrongful act, the signing of the deed of trust.                When the case went to trial, 

Timothy’s rights under the deed of trust had already been determined; the deed of trust 

was void, and he was proceeding as an unsecured creditor.                  The unclean hands defense 

was not related to the remaining issue, the enforceability of the earlier promissory notes. 

                For   both   of   these   reasons,   the   trial   court   did   not   err   by   failing   to   make 

special findings on the unclean hands defense. 

        C.      The Attorney’s Fees Award Was Not An Abuse Of Discretion. 

                Finally,   Ronald   argues   that   the   trial   court   abused   its   discretion   when   it 

decided     that   Timothy    was   the   prevailing    party.    “A   prevailing    party  is  ‘one   who 

successfully prosecutes the action or successfully defends against it, prevailing on the 

main issue, even though not to the extent of the original contention.’ ”24             Ronald contends 

that one of the main issues in the case was the ownership of the Goldstream property, on 

which he prevailed. 

         22      Henrichs , 250 P.3d at 540 (quoting Knaebel v. Heiner , 663 P.2d 551, 554 

 (Alaska 1983)). 

         23      Id . at 540-41. 

         24      Alliance of Concerned Taxpayers, Inc. v. Kenai Peninsula Borough , 273 

 P.3d 1123, 1126 (Alaska 2012) (quoting K & K Recycling, Inc. v. Alaska Gold Co. , 80 

 P.3d 702, 721 (Alaska 2003)). 

                                                    -12-                                             6761

----------------------- Page 13-----------------------

                Timothy sued to recover on the debt. Ownership of the Goldstream property 

was at issue only because Timothy alleged that the property secured the debt.  Although 

it is true, as Ronald observes, that Timothy was found to have no security interest in the 

property because the deed of trust was void, Timothy nonetheless recovered the total 

amount   of   the   debt,   in  excess  of   the  property’s  value.   Even    if   ownership   of   the 

Goldstream property is “a main issue” in the case, as Ronald urges, the trial court did not 

abuse its discretion when it found on these facts that Timothy was entitled to prevailing- 

party status. 


                We AFFIRM the decision of the superior court. 

                                                 -13-                                           6761

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