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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Christianson v. Conrad-Houston Insurance (2/21/2014) sp-6868

Christianson v. Conrad-Houston Insurance (2/21/2014) sp-6868

        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, email 

        corrections@appellate.courts.state.ak.us. 



                 THE SUPREME COURT OF THE STATE OF ALASKA 



TODD CHRISTIANSON,                               ) 

individually and d/b/a GREAT                     )       Supreme Court No. S-14305 

ALASKA LAWN AND                                  ) 

LANDSCAPING, INC.,                               )       Superior Court No. 3AN-08-09565 CI 

                                                 ) 

                    Appellant,                   )       O P I N I O N 

                                                 ) 

        v.                                       )       No. 6868 - February 21, 2014 

                                                 ) 

CONRAD-HOUSTON INSURANCE, ) 

                                                 ) 

                    Appellee.                    ) 

                                                 ) 



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

                Judicial District, Anchorage, Frank A. Pfiffner, Judge. 



                Appearances:  Kevin T. Fitzgerald, Ingaldson, Maassen & 

                Fitzgerald,  P.C.,  Anchorage,  for  Appellant.    Thomas  A. 

                Matthews  and  Kenneth  G.  Schoolcraft,  Jr.,  Matthews  & 

                Zahare, P.C., Anchorage, for Appellee. 



                Before:  Fabe, Winfree, and Stowers, Justices, and Eastaugh, 

                                  * 

                Senior Justice.  [Carpeneti, Chief Justice, not participating.] 



                EASTAUGH, Senior Justice. 

                FABE, Justice, dissenting. 



        * 

                Sitting  by  assignment  made  under  article  IV,  section  11  of  the  Alaska 

Constitution and Alaska Administrative Rule 23(a). 


----------------------- Page 2-----------------------

I.      INTRODUCTION 



                When  Keith Jones sued Todd Christianson for severe personal injuries 



Jones  suffered  while  working  for  Christianson's  landscaping  business,  Christianson 



tendered his defense to his general liability insurer.  It did not accept his tender.  It 



instead sent him a letter that told him he should defend himself and that discussed an 



exclusion for claims of employees.  Christianson then began to incur defense expenses. 



No insurer on the policies obtained by Christianson's insurance broker, Conrad-Houston 



Insurance (CHI), ever defended him in Jones's lawsuit.  Nearly four years after receiving 



the  insurer's  letter,  Christianson  sued  CHI  for  malpractice.    After  conducting  an 



evidentiary hearing, the superior court applied the discovery rule and dismissed the 



malpractice  lawsuit  because  it  was  filed  after  the  applicable  three-year  statute  of 



limitations  had  run.    The  superior  court  ruled  that  because  the  insurer's  letter  put 



Christianson  on  inquiry  notice  he  might  have  a  claim  against  CHI,  the  statute  of 



limitations  had  begun  to  run  more  than  three  years  before  Christianson  sued  CHI. 



Because the superior court did not clearly err and committed no legal error, we affirm. 



II.     FACTS AND PROCEEDINGS 



        A.      Facts 



                Todd  Christianson  owns  and  has  owned  a  number  of  past  and  current 



                       1 

Alaska businesses.   He incorporated Great Alaska Lawn and Landscaping (GALL) in 



        1       Because the superior court granted summary judgment after conducting an 



evidentiary hearing and entering findings of fact, we rely here on the parties' evidentiary 

submissions, including passages from the depositions of Christianson and CHI's broker, 

and the hearing testimony of Christianson and his lawyer in this case.  Some facts set out 

in the record in this case differ immaterially from those described in Jones v. Bowie 

Industries, Inc. , 282 P.3d 316 (Alaska 2012) (reversing defendants' judgments in Jones's 

personal injury lawsuit and remanding). 



                                                  -2-                                               6868 


----------------------- Page 3-----------------------

1992, but it was involuntarily dissolved in 2002.  He started Titan Topsoil, Inc. in 1995, 



and started Titan Enterprises LLC in 2002.  Titan Enterprises performed many of the 



same services GALL had performed.  At all times, Christianson was the sole owner of 



both Titan entities.  We refer to the two Titan entities collectively as "Titan."  



               In 2003 Christianson approached Mike Dennis, an agent at CHI, and sought 



insurance.    A  different  brokerage  firm  had  obtained  insurance  for  Christianson's 



businesses in 2002.  Christianson later testified that when he talked to Dennis, he "was 



looking for complete insurance on all my commercial entities that needed insurance." 



He  testified  that  he  expected  the  broker  to  "get  the  information,  find  out  about  my 



business and make sure I'm covered."  He asserts in his appellate reply brief that he 



expected CHI to obtain insurance covering "all liabilities and potential liabilities" for his 



landscaping business.  It appears that CHI understood that it was primarily responsible 



for obtaining insurance covering Titan.  Christianson admitted when his deposition was 



taken that he owned entities that he did not insure through CHI.  But he also testified that 



he provided Dennis with information about GALL, titles and registration on his vehicles, 



and "all [his] past [commercial insurance] policies," including GALL's.  CHI's Titan file 



included a list of vehicle registrations; the file listed at least two vehicles registered to 



GALL, including the truck pertinent here.  CHI knew when the insurance was placed that 



Christianson's  business  used  a  piece  of  equipment  known  as  a  hydroseeder  or 



hydromulcher.  We refer to it here as a "hydroseeder" for consistency with the superior 



court decision we are reviewing.  



               CHI obtained three policies insuring Titan:  a workers' compensation policy 



from AIG, a general liability policy from Great Divide Insurance Company, and an auto 



policy from Cascade National Insurance Company.  The three policies took effect in 



April and May of 2003.  Christianson was an insured under the two liability policies. 



                                               -3-                                            6868 


----------------------- Page 4-----------------------

               Keith Jones was an employee of Titan.  In June 2003 Jones was severely 



injured  in  a  work-related  accident  with  the  hydroseeder  being  used  by  Titan.    The 



hydroseeder was owned by GALL, but was "on loan" to Titan.  It was mounted on a 



truck most recently registered to GALL.  Because GALL's assets were subject to a 



federal tax lien at the time, Christianson had not transferred them to Titan.  Titan reported 



the accident to CHI, and Titan's workers' compensation insurer, AIG, was notified.  AIG 



then provided workers' compensation benefits to Jones. 



               On September 14, 2004 Jones filed a personal liability lawsuit against the 



manufacturer of the hydroseeder (Bowie Industries, Inc.) and Christianson individually 



and doing business as GALL.  Titan was not a defendant.  As to Christianson, the lawsuit 



alleged  negligence  in  transferring  the  hydroseeder  to  Titan,  loaning  a  defective 



hydroseeder to Titan, making modifications to the hydroseeder that contributed to its 



defects, and failing to warn Jones of the inherent dangers involved in operating the 



machinery.  Christianson contacted his lawyer, and Christianson's defense in Jones's 



personal injury claim was tendered to Titan's general liability insurer, Great Divide.  



               Great Divide replied to the tender by letter dated September 24, 2004.  The 



letter  was  addressed  to  Christianson  and  Titan;  it  stated  that  Great  Divide  was 



investigating  the  claim  and  that,  in  the  interim,  Christianson  would  have  to  file  an 



appropriate response to Jones's lawsuit and pay for his own defense.  The letter stated 



that should Great Divide determine that it did have a duty to provide coverage or a 



defense,  Christianson  would  be  reimbursed  for  the  reasonable  fees  and  costs  of  his 



defense.  The letter then referred to and quoted the policy's exclusion of coverage for 



claims of bodily injury to an employee of the insured.  The letter stated that "[s]hould it 



be  determined  or  confirmed  through  the  investigation  .  .  .  that  Keith  Jones  was  an 



employee  of  Titan  Enterprises,  LLC  .  .  .  at  the  time  of  the  incident,  Great  Divide 



Insurance Company may refuse to defend or indemnify you for this matter."  Although 



                                               -4-                                            6868 


----------------------- Page 5-----------------------

Great Divide did not then, or ever, agree to defend Christianson or reimburse his defense 



costs with respect to the Jones lawsuit, the letter asserted that Great Divide was reserving 



all its rights under its policy. 



                Christianson  soon  began  personally  incurring  legal  fees  in  defending 



himself in the Jones lawsuit. 



                In March 2006, about 18 months later, Great Divide sent Christianson a 



letter  denying  coverage  and  filed  a  complaint  in  federal  court  seeking  a  judgment 



declaring that its policy did not cover Christianson for Jones's claims.  In November 



2006 Dennis's deposition was taken in Great Divide's declaratory judgment  action. 



Dennis took CHI's Titan file to the deposition and agreed that it contained a list of 



vehicle registrations that Dennis would use "to create an application with."  Dennis also 



testified that if Christianson was using GALL vehicles in his Titan business, CHI should 



have told Christianson to register them to Titan.  He agreed that auto coverage listing 



only Titan as an owner might well exclude liability coverage for GALL.  Asked whether, 



because some of the vehicles appeared to be owned by GALL, CHI attempted to make 



sure GALL was an insured, he answered, "no."  



                The Jones personal injury trial was scheduled to begin in August 2007.  In 



March 2007 Christianson tendered defense of the Jones lawsuit to Titan's auto insurer, 



                      2 

Cascade National.   In July 2007 the federal court declared that Great Divide's policy did 



not cover Jones's claims against Christianson.  That same month, Christianson tendered 



his defense in Jones's personal injury lawsuit to CHI.  CHI declined the tender.  In 



October  Cascade  National,  the  auto  insurer,  filed  a  declaratory  judgment  complaint 



        2       Cascade  National  was  taken  over  by  the  Alaska  Insurance  Guaranty 



Association,  but  for  the  sake  of  continuity  we  refer  to  the  auto  insurer  as  Cascade 

National.  



                                                   -5-                                                6868 


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

against  Christianson;  in  November  Cascade  National  obtained  a  declaration  of  no 



coverage. 



                The Jones personal injury trial eventually commenced in February 2008. 



Christianson and GALL prevailed at trial.  The superior court entered a directed verdict 



for Christianson and the jury returned a verdict for GALL.  This court later reversed the 



                            3 

defendants' judgments.   



        B.      Malpractice Lawsuit Against CHI  



                Christianson sued CHI on August 6, 2008.  His complaint alleged that CHI 



and Dennis breached their professional duty of care in exposing him to the costs of 



litigation and the risk of an uninsured judgment, and therefore caused him "to spend 



money in his own defense."  It also alleged that Christianson had incurred over $100,000 



in  attorney's  fees  in  defending  against  Jones's  claims  and  the  insurers'  declaratory 



judgment actions.  CHI's answer denied liability.  In 2010 CHI moved for summary 



judgment, arguing that Christianson's malpractice action was barred by AS 09.10.053 



because the statute of limitations began to run more than three years before Christianson 



sued CHI in August 2008.  CHI argued that the statute had begun to run no later than 



October  2004,  after  Christianson  was  sued,  was  informed  that  it  was  questionable 



whether the insurance policies CHI had obtained for Titan would cover the Jones lawsuit, 



and began incurring attorney's fees.  Christianson's opposition argued that a genuine 



issue of material fact existed as to when he discovered the elements of his claim against 



CHI.  Christianson did not contend that the doctrine of equitable tolling applied.  



                Before deciding CHI's summary judgment motion, Superior Court Judge 



Frank A. Pfiffner held an evidentiary hearing to determine when the statute of limitations 



        3       In  2012  this  court  reversed  the  superior  court's  directed  verdict  for 



Christianson, reversed the defendants' judgments, and remanded for retrial of most of 

Jones's claims.  Jones , 282 P.3d at 340. 



                                                  -6-                                               6868 


----------------------- Page 7-----------------------

began to run.  The court heard the testimony of Christianson and his lawyer, reviewed 



exhibits  that  included  passages  from  Dennis's  deposition,  and  read  Christianson's 



deposition.  The court granted CHI's summary judgment motion after making findings 



of  fact  about  the  contents  and  effect  of  the  September  24,  2004  letter  and  what 



information Christianson would have learned had he then made an inquiry.  The court 



made the following findings about the letter and its effect: 



                On [September 24, 2004], Great Divide sent Mr. Christianson 

                a  letter  with  several  critical  pieces  of  information.    First, 

                Great  Divide  informed  Mr.  Christianson  that  it  would  be 

                "necessary for [him] to protect [his] own interest in regard to 

                the Complaint."  And that he "should consider consulting 

                with  an  attorney  to  file  the  appropriate  response  to  the 

                Complaint."    This  is  critical  because  Great  Divide  was 

                effectively disclaiming its duty to defend Mr. Christianson. 

                Under Titan's general liability policy with Great Divide, it 

                had a "duty to defend the insured against 'any' suit seeking 

                 [personal injury] damages."  . . .  The September 24th letter 

                disclosed Great Divide's preliminary determination that the 

                hydroseeder incident did not trigger even the duty to defend. 

                At least for the time being, Mr. Christianson was on his own 

                and began incurring actual damages in the form of litigation 

                costs. 



                 . . . . 



                         Second,  Great  Divide  noted  that  [Christianson's] 

                policy "specifically excludes coverage for 'bodily injury' to 

                an 'employee' of the insured arising out of the course and 

                scope  of  employment."    The  letter  identifies  the  policy  at 

                issue as the "Commercial General Liability policy issued to 

                 Titan . . ." and informed Mr. Christianson that "[s]hould it be 

                determined  or  confirmed  through  the  investigation  of  the 

                above referenced incident that Keith Jones was an employee 

                of Titan Enterprises, LLC dba: Titan Top Soil at the time of 

                the incident, Great Divide Insurance Company may refuse to 

                defend or indemnify you for this matter."  Although Great 



                                                   -7-                                              6868 


----------------------- Page 8-----------------------

                Divide had not confirmed Mr. Jones's employment status, 

                Mr. Christianson was fully aware that Mr. Jones was Titan's 

                employee.    He  was  on  notice  of  the  precise  reason  Great 

                Divide eventually declined to indemnify his loss or reimburse 

                legal  costs.    At  that  point  it  was  evident  that  there  were 

                potential coverage gaps for Mr. Christianson and his non- 

                Titan entities.  The September 24, 2004, letter is a reasonably 

                clear indication that the Great Divide policy did not cover 

                entities other than Titan and did not cover Titan employees 

                injured in the scope of employment.  A reasonable person in 

                Mr. Christianson's circumstances would have had enough 

                information to alert him that he should begin an inquiry to 

                protect his rights. 



                . . . . 



                         . . .  The letter was, in effect, a disclaimer of Great 

                Divide's   duty   to   defend.      The   letter   also   drew   [Mr. 

                Christianson's]       attention     to   gaps     in   his    coverage. 

                Specifically,  the  letter  informed  Mr.  Christianson  of  the 

                possibility that Great Divide would deny both defense and 

                indemnification if it confirmed that Mr. Jones was a Titan 

                employee.  Mr. Christianson knew that Mr. Jones was a Titan 

                employee  and  was  on  notice  of  the  potential  coverage 

                gaps. . . .  



                         . . .  At that point [upon receipt of the September 24, 

                2004   letter],   Mr.   Christianson   was   aware   of   potential 

                coverage gaps, despite the fact he had asked his broker to 

                purchase all-inclusive insurance. 



(Emphasis in original.)   



                The court then made these findings about what an inquiry "at that point" 



would have revealed: 



                 [A]n inquiry at that point would have revealed what Mike 

                Dennis allegedly conceded at his deposition:  that CHI failed 

                to advise Mr. Christianson of the need to obtain coverage for 

                the continued operation of GALL's hydroseeder.  The inquiry 



                                                   -8-                                              6868 


----------------------- Page 9-----------------------

                 would   also   have   revealed   that   Cascade   National   was 

                 unwilling to cover the loss. 



                 The superior court consequently ruled that the applicable three-year statute 



of limitations had begun running on September 24, 2004, the date of Great Divide's 



initial  letter  to  Christianson,  and  that  the  limitations  period  had  expired  before 



Christianson commenced suit in August 2008.  It therefore dismissed Christianson's 



complaint. 



                 Christianson appeals.  



III.     STANDARD OF REVIEW 



                 When the superior court holds an evidentiary hearing to resolve factual 



disputes  about  when  a  statute  of  limitations  began  to  run,  we  review  the  resulting 



                                      4 

findings of fact for clear error.   A factual finding is clearly erroneous if, after reviewing 



the entire record in the light most favorable to the party prevailing below, we are left 



                                                                           5 

with a definite and firm conviction a mistake has been made.   We reverse a trial court's 



factual findings only when we are left with a definite and firm conviction a mistake has 



               6 

been made.   "[I]t is a legal question whether undisputed facts establish that a plaintiff 



                            7                                                                         8 

is on inquiry notice."   We give de novo review to rulings on legal questions.   We 



         4       Williams v. Williams, 129 P.3d 428, 431 (Alaska 2006). 



         5       John's Heating Serv. v. Lamb , 129 P.3d 919, 922 (Alaska 2006) (citations 



omitted). 



         6       Williams v. GEICO Cas. Co., 301 P.3d 1220, 1225 (Alaska 2013) (quoting 



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



         7       Egner v. Talbot's, Inc., 214 P.3d 272, 277 (Alaska 2009). 



         8       Id . 



                                                     -9-                                                 6868 


----------------------- Page 10-----------------------

                                                                                                  9 

review for clear error fact findings regarding the reasonableness of an inquiry.   It is a 



legal  question  whether  a  court  has  failed  to  make  necessary  findings  regarding  the 

reasonableness of a claimant's inquiry.10 



IV.     DISCUSSION 



                 The ultimate issue here is whether the superior court correctly decided that 



Great Divide's initial letter put Christianson on inquiry notice and that the statute of 



limitations on Christianson's malpractice claim against CHI therefore began to run when 



Great  Divide  sent  him  that  letter.    Christianson  agrees  that  "the  application  of  the 



discovery rule controls the result in this appeal," but advances various arguments to 



support his contention that the court erred factually and legally.  He also argues that the 



court erred in resolving the "reasonable inquiry" issue.  



                 Alaska   applies   a   three-year   statute   of   limitations   for   professional 

malpractice actions.11  A statute of limitations usually begins to run upon the occurrence 



of  the  last  element  essential  to  the  cause  of  action.12    But  Alaska  has  adopted  the 



discovery rule, which can affect when the applicable statute begins to run.13  Under the 



discovery rule, a cause of action accrues when the plaintiff has "information sufficient 



        9        Cf. Pedersen v. Zielski , 822 P.2d 903, 908 (Alaska 1991) (holding that 



issues of material fact existed concerning reasonableness of inquiry). 



        10       See  Beals  v.  Beals ,  303  P.3d  453,  459  (Alaska  2013)  (holding  that 



sufficiency of superior court's findings is subject to de novo review).   



        11       AS 09.10.053.  See Preblich v. Zorea , 996 P.2d 730, 733-34 (Alaska 2000) 



(applying statute of limitations for contract claims to malpractice case).  



        12       Greater Area Inc. v. Bookman, 657 P.2d 828, 829 (Alaska 1982). 



        13      Id . 



                                                   -10-                                                 6868 


----------------------- Page 11-----------------------

to alert a reasonable person to the fact that he has a potential cause of action."14  We look 



to  the  date  when  "a  reasonable  person  in  like  circumstances  would  have  enough 



information to alert that person that he or she has a potential cause of action or should 

begin  an  inquiry  to  protect  his  or  her  rights."15    Cameron  v.  State  articulated  the 



discovery rule as follows: 



                (1) a cause of action accrues  when  a  person discovers, or 

                reasonably  should  have  discovered,  the  existence  of  all 

                elements essential to the cause of action; 



                (2) a person reasonably should know of his cause of action 

                when he has sufficient information to prompt an inquiry into 

                the  cause  of  action,  if  all  of  the  essential  elements  of  the 

                cause  of  action  may  reasonably  be  discovered  within  the 

                statutory period at a point when a reasonable time remains 

                within which to file suit.[16] 



If a person makes a reasonable inquiry that does not reveal the elements of the cause of 



action within the limitations period while a reasonable time remains within which to file 



suit, the discovery rule tolls  the running of the limitations period until a reasonable 



person would obtain actual knowledge of, or would again be prompted to inquire into, 

the cause of action.17 



        14      Preblich , 996 P.2d at 734 (quoting Pedersen , 822 P.2d at 908). 



        15      Lee Houston & Assocs., Ltd. v. Racine , 806 P.2d 848, 851 (Alaska 1991) 



(quoting Mine Safety Appliances Co. v. Stiles , 756 P.2d 288, 291 (Alaska 1988)). 



        16      822 P.2d 1362, 1366 (Alaska 1991). 



        17      Id . at 1367 (citing Pedersen , 822 P.2d at 908). 



                                                 -11-                                             6868 


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

               The discovery rule therefore simply determines when the cause of action 

accrues for purposes of triggering the applicable limitations period.18  We have stated that 



"the discovery rule operates only to lengthen - and never to shorten - the limitations 

period."19    As  we  will  see,  that  principle  does  not  prevent  us  from  affirming  the 



judgment. 



               The first question is whether, as the superior court ruled, Christianson was 



put on inquiry notice by Great Divide's September 24, 2004 letter.  That legal question 



turns on whether the superior court committed clear error in finding the facts that led it 



to conclude that Christianson had "enough information to alert him that he should begin 



an inquiry to protect his rights."  The next question is whether Christianson made a 



reasonable inquiry that did not timely reveal all elements of his cause of action.  That 



question  turns  on  whether  the  superior  court  committed  clear  error  in  finding  facts 



bearing on what Christianson would have learned had he made an inquiry after receiving 



the September 24, 2004 letter.  It also turns on whether the court failed to make fact 



findings material to the reasonable-inquiry issue and therefore committed legal error. 



        18     Id. at 1365 n.5 (characterizing discovery rule as "specifying the meaning 



of 'accrual' under the statute"). 



        19     Gefre v. Davis Wright Tremaine, LLP, 306 P.3d 1264, 1274 (Alaska 2013) 



(citation  omitted).    The  dissenting  opinion  contends  that  affirming  CHI's  judgment 

violates  this  principle.    That  contention  mistakenly  assumes  that  the  discovery  rule 

cannot  establish  an  accrual  date  earlier  than  the  date  the  claimant  first  has  actual 

knowledge of all elements of his cause of action.  If the discovery rule applies, "[w]e 

have held the inquiry-notice date, rather than the actual-notice date, is generally the date 

from which the statutory period begins to run."  Id. at 1275. 



                                               -12-                                           6868 


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

        A.     The Superior Court Did Not Commit Clear Or Legal Error In Ruling 

               That Christianson Was Put On Inquiry Notice. 



                1.     The court did not clearly err in finding facts regarding inquiry 

                       notice. 



               After conducting the evidentiary hearing, the superior court made findings 



of fact about the information Christianson possessed when or soon after he received the 



September 24, 2004 letter.  We quoted its pertinent findings above, in Part II.B. 



               In summary, the court found that the letter told Christianson he had to 



"protect [his] own interest" and should consider consulting an attorney to respond to 



Jones's complaint.  It found that the liability insurer had effectively disclaimed its duty 



to defend Christianson.  It found that the letter disclosed a "preliminary determination" 



that the accident did not trigger the duty to defend.  It found that the letter indicated that 



the  policy  did  not  cover  entities  other  than  Titan  and  did  not  cover  claims  of  Titan 



employees injured at work.  It found that upon receipt of the letter, "Christianson was 



aware of potential coverage gaps, despite the fact he had asked his broker to purchase all- 

inclusive insurance."20  It found that this was sufficient to alert a reasonable person in 



        20     The  "coverage  gap"  was  the  absence  of  liability  insurance  covering 



Christianson against the claims in Jones's personal injury lawsuit.  The superior court 

described the Great Divide gap as resulting from policy provisions that covered Titan 

and Christianson with respect to Titan's activities, but not other entities, and excluded 

claims brought by Titan employees (such as Jones).  Had liability insurance covered the 

GALL  vehicle  and  hydroseeder  or  covered  Christianson  when  he  loaned  GALL's 

vehicles to Titan, the insurer would have had  a duty to defend Christianson against 

Jones's claims. 



               The superior court did not precisely describe the gap in the auto policy 

Cascade National issued to Titan.   It seems to have arisen out of the fact that the truck 

carrying the hydroseeder was most recently registered to GALL, not Titan.  Apparently 

no auto policy covered GALL at the time of the accident.   



                                                -13-                                            6868 


----------------------- Page 14-----------------------

Christianson's position that he should begin an inquiry to protect his rights.  And it found 



that Christianson began incurring actual damages in the form of litigation costs. 

               Christianson disputes these findings.  We review them for clear error.21 



"On appeal, findings of fact by a trial court may not be disturbed unless they are clearly 

erroneous."22     



               But before beginning that analysis, we consider the undisputed facts in their 



most elemental form.   As of the fall of 2004, Christianson had expected CHI to procure 



insurance coverage for his landscaping activities.  He knew Jones was suing him for 



reasons connected with those activities.  He knew Great Divide, following his tender, had 



not provided him a defense.  He knew Great Divide had identified two policy provisions 



that potentially foreclosed coverage.  He knew he was incurring defense costs.  Those 



circumstances were enough to put him on notice that he needed to make an inquiry to 



determine  why  Great  Divide  was  not  providing  him  a  defense  -  including  asking 

whether  CHI  had  failed  to  secure  adequate  insurance  for  his  businesses.23    These 



undisputed circumstances establish as a matter of law that Christianson had a duty to 



make a reasonable inquiry to protect his interests. 

               Gudenau  &  Co.  v.  Sweeney  Insurance,  Inc.  is  analogous.24    That  case 



involved a denial of coverage under an insurance policy obtained through a broker that 



       21      Williams v. Williams, 129 P.3d 428, 431 (Alaska 2006). 



       22      Griffin v. Weber, 299 P.3d 701, 704 (Alaska 2013) (citing In re Protective 



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



       23      See  Palmer  v.  Borg-Warner  Corp.,  818  P.2d  632,  634  (Alaska  1990) 



(holding that plaintiff has duty to "investigate all potential causes of action" (emphasis 

in original) (citing Mine Safety Appliances Co. v. Stiles , 756 P.2d 288, 292 (Alaska 

1988))). 



       24      736 P.2d 763 (Alaska 1987). 



                                             -14-                                          6868 


----------------------- Page 15-----------------------

had promised the insured a policy covering virtually all damage to the property at issue.25 



We held that the insurer's letter to the insured, "which drew the reader's attention to the 



policy's structural defect exclusion clause," was "sufficient to alert a reasonably diligent 



plaintiff" to the possibility of a gap in coverage and, accordingly, to the possibility of the 

broker's potential breach of warranty.26   



               Once Christianson began incurring defense costs, all elements of the alleged 



tort - the claim he filed almost four years later - were present: duty (to use adequate 



professional skill); breach of the duty (in failing to secure coverage allegedly requested 



or to recommend that GALL get coverage); causation (of the coverage gap by the alleged 

breach); and damages (from incurring defense costs).27  



               Moreover, the evidence persuades us that the superior court's findings of 



fact concerning the content and effect of the letter are not  clearly  erroneous.  After 



Christianson tendered his defense to Great Divide, it sent him the September 24, 2004 



letter telling him he would be responsible  for his own defense while it investigated 



whether coverage existed.  The letter thus communicated Great Divide's present refusal 



to  defend  Christianson.    Great  Divide's  contemporaneous  conduct  confirmed  this 



message:  It did not in fact defend him. 



               The  letter  also  called  attention  to  the  employee  exclusion  and  stated: 



"Should it be determined or confirmed through the investigation . . . that Keith Jones was 



an employee of Titan Enterprises, LLC . . . at the time of the incident, Great Divide 



        25     Id. at 765-66.  



        26     Id. at 767.  



        27     See Belland v. O.K. Lumber Co., 797 P.2d 638, 640 (Alaska 1990) (citing 



Linck v. Barokas & Martin , 667 P.2d 171, 173 n.4 (Alaska 1983)) (setting out elements 

of professional negligence claim). 



                                              -15-                                           6868 


----------------------- Page 16-----------------------

Insurance   Company   may   refuse   to   defend   or   indemnify   you   for   this   matter." 



Christianson  knew  Jones  was  a  Titan  employee  and  therefore  knew  Great  Divide's 



employee  exclusion  was  factually  applicable  to  Jones's  personal  injury  claims. 



Christianson has not discussed any theory that might have justified a reasonable belief 



in 2004 that this exclusion was inapplicable on legal or factual grounds.  He has likewise 



not discussed any theory that would have justified a reasonable belief Great Divide might 



have a change of heart.  



               Christianson also knew GALL, not Titan, owned the hydroseeder and the 



truck carrying it.  Christianson knew he had sought coverage for the equipment that was 



to be used in Titan's operations and believed he had talked with CHI about GALL.  He 



knew he had given CHI his vehicle registrations, including those for vehicles owned by 



GALL, and thus the registration for the equipment central to Jones's lawsuit against 



Christianson.  And from his communications with CHI when the insurance was being 



placed, he must have known the facts that later caused him to testify that CHI had not 



told him that he should insure GALL or vehicles registered to GALL.  He does not claim 



CHI ever told him that the truck or hydroseeder was covered by any liability insurance 

obtained by CHI.28 



               Normally no duty to inquire can be imposed under the discovery rule unless 

the plaintiff should know he has suffered some loss attributable to the defendant,29 or 



unless he realizes he has been injured and his injury may be connected to the defendant's 



       28      In contrast, the broker in  Gudenau & Co. reassured the insured that the 



policy provided coverage.  Gudenau & Co., 736 P.2d at 766. 



       29      Cf. Jarvill v. Porky's Equip., Inc., 189 P.3d 335, 340-41 (Alaska 2008). 



                                              -16-                                          6868 


----------------------- Page 17-----------------------

conduct.30  But Christianson knew he was personally incurring defense costs and knew 



it  was  because  the  insurer  on  the  general  liability  policy  obtained  by  CHI  was  not 



defending him.   

                The dissenting opinion contends that Jarvill v. Porky's Equipment, Inc .31 



is  similar  and  controls.    That  case  is  instructive,  but  not  for  the  reasons  the  dissent 



advances.    Jarvill  concerned  a  "product  defect  claim"  arising  out  of  a  commercial 

contract to purchase a boat.32  Although an inspector had warned the buyer that the boat's 



hull was too thin, the boat performed as expected until it sank.33  We held that no tort 



claim accrued until the boat sank; until then, the purchaser had suffered no tort damages, 



even though he might have suffered contract damages by "receiving a boat that was 'not 

serviceable.' "34  In this case, incurring expenses of a defense was equivalent to the 



sinking of the boat; both satisfied the damages element of a tort claim.  



                Christianson does not contend that he was unaware that Great Divide's 



conduct,  as  described  in  its  September  24,  2004  letter,  was  causing  him  to  incur 



significant expenses.  He does not appeal the superior court's finding that "[a]t least for 



the time being, Mr. Christianson was on his own and began incurring actual damages in 



the  form  of  litigation  costs."    Christianson  began  to  incur  attorney's  fees  almost 



immediately.  He was therefore aware he was presently suffering an out-of-pocket loss; 



        30      Cf.  John's  Heating  Serv.  v.  Lamb ,  129  P.3d  919,  925  (Alaska  2006) 



(holding that plaintiffs who were on inquiry notice furnace was causing soot problems 

were not necessarily on inquiry notice it was exposing them to carbon monoxide).  



        31      189 P.3d 335 (Alaska 2008). 



        32      Id. at 340. 



        33      Id. at 339. 



        34      Id. at 340. 



                                                 -17-                                              6868 


----------------------- Page 18-----------------------

he was also aware Great Divide might not reimburse him, and indeed would not do so 

unless it chose to waive the policy provisions it had identified.35  His loss was large 



enough to put him on notice of the damage element of a potential claim against CHI.36 



That he could not know in late 2004 what his damages might eventually total did not 

prevent his cause of action from accruing.37 



               The dissent contends that there was only a "potential future injury" and that 



Christianson "had not yet suffered an injury attributable to CHI."  These contentions are 



incorrect.  He was suffering an injury attributable to CHI's alleged malpractice because 



       35      Courts  in  other  states  have  determined  that  incurring  attorney's  fees 



constitutes damages for purposes of triggering the statute of limitations in a malpractice 

case against an insurance broker.  See Am. Home Assurance Co. v. Osbourn, 422 A.2d 

8, 15-16 (Md. App. 1980); Spurlin v. Paul Brown Agency, Inc., 454 P.2d 963, 964 (N.M. 

1969).  See also Wallace v. Helbig, 963 S.W.2d 360, 360-61 (Mo. App. 1998) (holding 

that insured's malpractice claim accrued at end of declaratory judgment action against 

insurer; before that, insured had suffered no damages because insurer was paying for 

defense of underlying lawsuit).  Cf. Int'l Mobiles Corp. v. Corroon & Black/Fairfield & 

Ellis, Inc., 560 N.E.2d 122, 124-25 (Mass. App. 1990) (holding that statute of limitations 

did  not  begin  to  run  until  judgment  was  entered  against  insured  because  until  then 

insured had not suffered a loss, but noting fact insurer paid for insured's defense "bears 

decisively  on  the  outcome").    Although  the  dissent  distinguishes  these  cases  and 

Gudenau & Co. from Christianson's case because they concerned a "definitive denial" 

of coverage, this distinction is irrelevant here.  Great Divide's letter correctly identified 

policy provisions relevant to defense of Jones's lawsuit against Christianson: (1) the 

employee   exclusion,   applicable   because   Jones   was   a   Titan   employee,   and   (2) 

identification of Titan - not GALL or Christianson's other businesses - as the insured. 

The dissent does not explain how a "definitive denial" would have given Christianson 

more information than he received in the September 2004 letter. 



       36      Christianson does not argue that the expenses he began incurring were 



insufficiently large to put him on notice in 2004 he was suffering a loss. 



       37      Sopko v. Dowell Schlumberger, Inc., 21 P.3d 1265, 1272 (Alaska 2001) 



(holding that lack of knowledge of full extent of injury was irrelevant in application of 

discovery rule). 



                                              -18-                                          6868 


----------------------- Page 19-----------------------

he was paying expenses an insurer would have borne had CHI secured the coverage 



Christianson claimed he had expected.  



               Nor  does the theoretical possibility his out-of-pocket defense expenses 



might be reimbursed in the future obviate the fact Christianson was then suffering an 



actual injury that triggered the duty of inquiry as a matter of law.  The possibility an 



insurer might later indemnify an insured party does not stop the statute of limitations 



from running once the party has been injured by the insurer's failure to defend.   



                The dissent argues that Christianson could not then (in the fall of 2004) 



have sued CHI for malpractice.  This contention mis-comprehends the discovery rule, 



which presupposes that a person who knows enough to have a duty to inquire may not 



yet know enough to file suit - that is, he has not yet discovered all of the existing 



elements of his  cause of action.  The issue to be decided by the superior court was 



whether Christianson had sufficient knowledge as of the fall of 2004 to require him to 



inquire whether he had a cause of action related to Great Divide's refusal to defend him 

in the Jones litigation.38  That issue did not turn on whether Christianson then could have 



filed  suit  against  CHI.    The  dissent's  contention  also  fails  to  recognize  that,  as  the 



superior  court  implicitly  found,  reasonable  inquiry  would  have  soon  revealed  the 



circumstances supporting the same malpractice complaint Christianson actually filed 

almost four years later, and thus all elements of his claim.39  



        38      In applying the discovery rule, the superior court focused on September 24, 



2004, the date of Great Divide's letter.  Although there is no evidence Christianson had 

yet suffered damages when he received the September 24 letter, it is undisputed that he 

soon began incurring defense costs.   



        39      In arguing that no tort claim had yet accrued, the dissent relies on Thomas 



v. Cleary, 768 P.2d 1090 (Alaska 1989).  In holding that the taxpayer had no cause of 

action against accountants who gave the taxpayer negligent advice, this court thought it 

                                                                                     (continued...) 



                                                -19-                                             6868 


----------------------- Page 20-----------------------

               2.     The superior court did not err in finding that the September 24, 

                      2004 letter alerted Christianson to the fact that Great Divide 

                      would not pay for his defense.  



               Christianson advances three main contentions in arguing that the superior 



court misinterpreted the September 24, 2004 letter. 



               He first contends that the letter did not disclaim the duty to defend.  We 



conclude that the superior court did not misinterpret the letter and did not clearly err in 



characterizing it as disclaiming a duty to defend Christianson.  The letter on its face 



conveyed that message, even though it purported to reserve a future right to reimburse 



reasonable defense costs following Great Divide's coverage investigation.  The letter 



made  it  clear  that  the  insurer  was  not  providing  Christianson  a  defense  in  Jones's 



personal injury lawsuit, and instead told Christianson to defend himself.  



               Christianson  notes  that  the  September  24,  2004  letter  held  out  the 



possibility that Great Divide would reimburse him for reasonable defense costs if it 



concluded after investigation that there was coverage.  But that message does not negate 



the letter's meaning or effect, and Christianson himself apparently read the letter as 



presently denying him a defense, because he promptly retained counsel to defend him, 



       39(...continued) 



crucial that the IRS had never assessed additional taxes against the taxpayer.  Id . at 1092- 

93.  Because the taxpayer had consequently incurred no damages, the cause of action was 

unripe.  Id.   Thomas is distinguishable because Christianson did incur damages.  The 

distinction is confirmed by the Thomas court's description of a case it cited in support 

of its holding, Godfrey v. Bick & Monte, 713 P.2d 655, 657 (Or. App. 1985).  Thomas 

described Godfrey with the following parenthetical: "(plaintiff was damaged when he 

incurred attorney and accounting  fees in his attempt to resolve the IRS problems)." 

Thomas,  768  P.2d  at  1093.    Thomas's  reliance  on  Godfrey  confirms  that  incurring 

attorney's  fees  can  satisfy  the  damages  element  of  a  professional  tort  claim.    That 

conclusion is especially germane to a claim that a broker's allegedly negligent failure to 

obtain coverage entitling the insured to a defense in a personal injury lawsuit caused 

damages measured by the insured's costs in defending himself. 



                                              -20-                                           6868 


----------------------- Page 21-----------------------

at substantial personal expense.40  The possibility Great Divide, after investigating, might 



someday  acknowledge  coverage  would  not  have  excused  a  reasonable  person  from 



realizing that Great Divide's initial denial was presently causing him to suffer significant 

financial injury and that CHI had potentially breached professional duties.41  The superior 



court did not misinterpret Great Divide's letter as failing to provide a present defense and 



as triggering the duty to inquire.   



                Similarly, Christianson asserts that the letter's discussion of exclusions was 



not unusual and did not inform him that his tender would ultimately be rejected.  He also 



asserts that his vigorous defense in Great Divide's declaratory judgment action shows 



he genuinely believed he was covered, and that the federal court's later declaration of no 



coverage did not prove that his position was frivolous or that he had believed it had no 



merit.  These assertions do not demonstrate any error by the superior court in interpreting 



the letter and its effect on a reasonable person; the superior court simply had to decide 



whether Christianson was on inquiry notice.  Christianson's subjective belief did not 



preclude  a  finding  of  fact  that  the  letter  would  cause  a  reasonable  person  with 



Christianson's knowledge to realize there was a question about whether the broker was 



responsible   for   the   potential   coverage   gap   identified   in   Great   Divide's   letter. 



Christianson's alleged "good faith belief" in contesting Great Divide's 2006 declaratory 



        40     His  malpractice  complaint  against  CHI  alleged  that  he  and  GALL  had 



incurred "well over" $100,000 in attorney's fees in litigating the Jones case and the two 

declaratory judgment actions.  



        41     For the same reason, the dissent's observation that Great Divide "could 



have decided" in the future to provide a defense misconceives the discovery rule and the 

duty to inquire.  It also ignores the extreme improbability, as of 2004, that the bases for 

Great  Divide's  unwillingness  to  defend  were  factually  and  legally  invalid  and  that 

Christianson did not know the relevant facts.  The dissent does not argue that the facts 

would have caused a reasonable person to think that the Great Divide policy actually 

covered Jones's claims.   



                                                -21-                                            6868 


----------------------- Page 22-----------------------

judgment action does not demonstrate that the court clearly erred in interpreting the letter 



or in finding that it put Christianson on inquiry notice in 2004.  Moreover, Christianson 



has offered no analysis of the September 24 letter that would plausibly demonstrate any 



reason to think, in 2004 or now, that Great Divide's policy actually covered him in 



Jones's lawsuit.  And to the extent he argues that the superior court erred in failing to 



consider his good faith belief, he has not brought to our attention any evidence that 



would permit a finding or conclusion that his professed belief was reasonable.  He has 



raised no dispute here (nor did he in the superior court) about either the validity of Great 



Divide's reading of its policy language or Great Divide's understanding of the facts 



(including Jones's employment status).  His subjective belief was at most one of the 



circumstances bearing on whether he was on inquiry notice.  The other circumstances 



overwhelmingly supported the superior court's findings of fact and inquiry-notice ruling. 



Christianson has not demonstrated either clear or legal error. 



               Second, Christianson contends that Great Divide's March 15, 2006 letter 



finally denying any duty to defend shows that Great Divide's September 24, 2004 letter 



had not denied a duty to defend.  But neither the sending nor the content of the 2006 



letter renders clearly erroneous the superior court's interpretation of the 2004 letter and 

its effect on the application of the discovery rule.42  



              And, notwithstanding the dissent's contentions, the insurer's actual failure 



to defend Christianson in 2004 made irrelevant to the inquiry-notice issue any contention 



       42     See Liberty Transp., Inc. v. Harry W. Gorst Co., 280 Cal. Rptr. 159, 165-66 



(Cal. App. 1991), overruled on other grounds by Adams v. Murakami, 813 P.2d 1348, 

1354-55 (Cal. 1991) (affirming trial court's interpretation of letter as denial of coverage 

even  though  letter  asked  for  information  about  loss  and  indicated  willingness  to 

investigate information further).  



                                            -22-                                         6868 


----------------------- Page 23-----------------------

that the September 24, 2004 letter did not convey a final, absolute refusal to defend.43 



No such refusal was required here to trigger a duty to inquire. 



              Third,  Christianson  contends  that  insurance  companies  rarely  accept a 



tender without a reservation of rights.  But Great Divide did not accept his tender and 



defend him under a reservation; it instead told him he should defend himself, causing 



him to begin suffering damages. 



              The superior court's findings of fact about what the September 24 letter said 



are not clearly erroneous.  



              3.      The  superior  court  did  not  erroneously  fail  to  find  facts 

                      regarding Christianson's good-faith belief that he was covered 

                      in the Jones lawsuit. 



              Christianson argues that, despite the letter, he was not put on inquiry notice. 



              In addition to the letter, the superior court's inquiry-notice ruling relied on 



findings that Christianson had asked his broker to purchase "all-inclusive" insurance; 



that Christianson knew Jones was a Titan employee; and that Great Divide's failure to 



defend him was causing him to incur "actual damages in the form of litigation costs." 



       43     The dissent describes the superior court's findings as interpreting the letter 



as "an actual denial of coverage" and as "equivalent" to denying the duty to indemnify. 

That description is at least in part incorrect, because the superior court did not interpret 

the letter as broadly denying "coverage" or as denying the duty to indemnify.  It instead 

found that the letter denied a duty to defend. 



              That description also raises an immaterial dispute.  The finding the court 

did make was the foundation for the court's inquiry-notice ruling.  Any dispute about 

whether the letter also denied a duty to indemnify is irrelevant to this appeal because the 

letter failed to accept the defense tender.  A liability insurer's duty to defend is broader 

than its duty to indemnify.  See, e.g., Afcan v. Mut. Fire, Marine & Inland Ins. Co. , 595 

P.2d 638, 645 (Alaska 1979) ("[T]he insurer may have an obligation to defend although 

it has no ultimate liability under the policy.").  Whether or not its letter also denied 

coverage or a duty to indemnify, Great Divide's failure to defend Christianson would 

have breached its defense duty if its policy covered Christianson.  



                                            -23-                                         6868 


----------------------- Page 24-----------------------

These findings are not clearly erroneous, and Christianson does not challenge them on 



appeal. 



               Christianson seems to argue that the court should have found additional 



facts that he thinks were relevant to the inquiry-notice issue:  that he had a good-faith 



belief he was covered when he contested Great Divide's declaratory judgment action; 



that Dennis did not admit, until he was deposed in 2006, he had failed to recommend 



purchasing needed insurance, and had instead told Christianson he and his companies 



were "fully covered" for Jones's injury; and that it was not until the Cascade National 



policy was "made available" at Dennis's deposition that Christianson learned that an auto 



coverage  form  listed  the  hydroseeder,  resulting  in  Christianson's  tender  to  Cascade 



National. 



               Christianson's arguments have little or no relevance to the inquiry-notice 



issue.  And they do not show that the superior court committed any legal or factual error. 



               We  assume  without  deciding  that  a  broker's  reassurances  that  could 



persuade a reasonable client that the broker had obtained the needed insurance coverage 

or had been professionally faultless could be relevant to the inquiry-notice issue.44  Such 



reassurances might delay imposing a duty to investigate a possible claim against the 



broker.   



               But there is no evidence of such reassurances here.  Christianson asserts 



that CHI, through Dennis, had represented that Christianson and his companies were 



fully covered for Jones's injury.  The testimony he cites only concerns reassurances 



about the workers' compensation coverage, not the accuracy of Great Divide's letter or 



       44      Cf. Sharrow v. Archer, 658 P.2d 1331, 1334 (Alaska 1983) (agreeing in 



dictum  with  superior  court  that  nature  of  doctor-patient  relationship  justified  some 

reliance by plaintiff on doctor's reassurances). 



                                             -24-                                          6868 


----------------------- Page 25-----------------------

the application of the employee exclusion to the Jones lawsuit.45  Christianson refers us 



to  no  evidence  CHI  reassured  him  that  it  had  obtained  liability  insurance  covering 



Christianson against the claims made in Jones's lawsuit.  He refers us to no evidence of 



reassurances  that  CHI  had  discharged  the  duties  identified  in  Christianson's  2008 



malpractice complaint.   



               No reassurances based on workers' compensation could have obviated the 



duty to inquire:  Despite the workers' compensation remedy and the exclusive liability 



statute, Jones had sued Christianson, causing him to incur defense costs.  For purposes 



of the discovery rule, no reassurances concerning workers' compensation could have 



been so compelling that the superior court could be regarded as having erred legally or 



factually.  



               Moreover,  if  Dennis  told  Christianson  he  was  "covered"  by  workers' 



compensation, it was potentially relevant only to the merits of Jones's lawsuit; it was 



irrelevant to the question of whether Great Divide's exclusion applied to Jones's claims 



or  to  the  question  of  whether  the  broker  had  breached  the  duties  Christianson  later 



claimed it owed him.  No insurer, including the workers' compensation insurer, was 



defending Christianson against Jones's lawsuit; a reassurance that the exclusive liability 



statute barred Jones's lawsuit could not have satisfied a reasonable person, because it did 



not address Christianson's exposure to substantial defense expenses.  Consequently, a 



defendant raising the exclusive liability issue as a defense to the tort suit should have 



        45     The  Alaska  Workers'  Compensation  Act's  exclusive  liability  statute, 



AS 23.30.055, would have prevented Jones, a Titan employee who received workers' 

compensation benefits for the injuries suffered during his employment, from suing Titan 

for his personal injuries.  Christianson does not claim that the statute prevented Jones 

from suing Christianson in his capacity as the owner of the hydroseeder or GALL.  Nor 

does he claim that anything CHI told him caused him to think CHI was without fault. 



                                              -25-                                           6868 


----------------------- Page 26-----------------------

realized  that  the  defense  might  not  be  successful,  that  CHI's  reassurance  might  be 

incorrect,46 and that no liability insurer was paying his tort defense costs.  



               Failing to find facts relevant to a material, factual dispute could be legal 

error,47  but  the  propositions  Christianson  raises  do  not  demonstrate  that  the  court's 



findings of fact were clearly erroneous or legally insufficient.  Nor do they demonstrate 



that the court's legal conclusions were erroneous.  Given what the court did find about 



the  message  communicated  by  the  letter  and  the  facts  known  to  Christianson,  a 



reasonable person in Christianson's position would have realized there was a significant 



possibility CHI had not discharged its professional duties to him.  The propositions 



Christianson advances do not rebut that conclusion. 



               The superior court concluded that a reasonable person in Christianson's 



"circumstances would have had enough information to alert him that he should begin an 



inquiry to protect his rights."  It held that Christianson "had a duty to investigate all 



potential claims, including those against his broker."  Because the circumstances put 



Christianson on notice of the likelihood there was a coverage gap, of the possibility his 



broker was responsible for that gap, and of the certainty he was suffering financial harm, 



the court's inquiry-notice rulings were not factually or legally erroneous.  



               It is irrelevant there were other possible explanations, not implicating CHI, 



why  Christianson  was  incurring  defense  costs.    As  we  stated  in  Gudenau  &  Co.  v. 



Sweeney Insurance, Inc., 



        46     AS 23.30.055 was not the basis for Christianson's directed verdict in the 



Jones lawsuit.  Jones v. Bowie Indus., Inc. , 282 P.3d 316, 323 (Alaska 2012).  And 

Christianson, in arguing for affirmance in Jones's appeal from Christianson's directed 

verdict, did not contend that Jones's tort suit against Christianson was barred by that 

statute. 



        47     See Lowery v. McMurdie, 944 P.2d 50 (Alaska 1997) (remanding for failure 



to make adequate findings).   



                                               -26-                                            6868 


----------------------- Page 27-----------------------

                To  the  extent  that  the  insurance  carrier  offered  different 

                interpretations of the policy language, Gudenau's cause of 

                action was not obscured, but rather two potential causes of 

                action were revealed: one against the carrier, another against 

                the   broker.      The   two   conflicting   interpretations   were 

                sufficient  to  alert  Gudenau  to  the  need  to  take  action  to 

                protect its rights.[48] 



The existence of other possibilities did not excuse or satisfy a duty to inquire.49  



                This does not mean that Christianson then had to know enough either to sue 



CHI for professional malpractice or to decide whether Great Divide had erroneously 



interpreted its insuring duties.  For purposes of applying the discovery rule, the superior 



court only had to decide whether Christianson knew enough to put him on notice that he 

should inquire whether he had a cause of action against CHI.50  Similarly, in discussing 



this discovery-rule dispute, we do not mean to suggest that CHI was actually at fault. 



The only question pertinent to this part of our analysis is whether the superior court, 



having considered the evidence, erred in deciding that a reasonable person who knew 



what Christianson knew or should have known about his insurance expectations, his 



dealings with CHI, the circumstances of Jones's accident, and his losses, was on notice 



in 2004 of a need to make diligent inquiry into whether CHI had been negligent. 



                We hold that the superior court did not err in holding that Christianson was 



on inquiry notice. 



        48      736 P.2d 763, 767 n.6 (Alaska 1987).  



        49      Id . at 768 (holding that statute of limitations began to run when plaintiff 



should have discovered exclusion clause).   



        50      See, e.g., Mine Safety Appliances Co. v. Stiles , 756 P.2d 288, 291 (Alaska 



1988) (holding inquiry notice exists "when a reasonable person has enough information 

to alert that person that he or she has a potential cause of action or should begin an 

inquiry to protect his or her rights").   



                                                 -27-                                             6868 


----------------------- Page 28-----------------------

        B.      The  Superior  Court  Did  Not  Erroneously  Resolve  The  Issue  Of 

                Reasonable  Inquiry  And  Did  Not  Fail  To  Consider  Christianson's 

                Efforts. 



                The superior court ruled that because Christianson was on inquiry notice 



and because a reasonable inquiry would have revealed the essential elements of the cause 



of action, the statute of limitations began to run on September 24, 2004. 



                Under the discovery rule, a cause of action "accrues if, within the statutory 

period, the essential elements [of the cause of action] may reasonably be discovered."51 



In considering an equivalent malpractice claim, we held in Gudenau & Co. that despite 



an insured's uncertainty about whether either its property insurer or its insurance broker 



was responsible for a coverage gap, the statute of limitations on Gudenau's claim against 



its  broker  began  running  on  the  date  its  insurance  company  sent  a  letter  denying 



            52 

coverage.        



                The superior court here correctly applied the discovery rule when it held 



that the statute of limitations began running when Christianson learned information that 



should have caused him to make an inquiry that would have discovered the essential 

elements of his cause of action against CHI.53   Our review of the record convinces us the 



court  did  not  err  in  holding  that  a  reasonable  inquiry  by  Christianson  would  have 



revealed the factual basis for a potential malpractice claim against CHI, and would have 



revealed Cascade National's unwillingness to cover the loss. 



        51      Pedersen v. Zielski , 822 P.2d 903, 908 (Alaska 1991) (citing Palmer v. 



Borg-Warner , 818 P.2d 632, 638 (Alaska 1990)). 



        52      736 P.2d at 767 & n.6.  See the text accompanying footnotes 48, 49, above. 



        53      The record does not reveal when Christianson received the letter, but he 



does  not  contend  any  delay  in  its  transmission  or  receipt  affects  application  of  the 

discovery rule or the result in this case.  There is no dispute that he received the letter and 

began to incur defense costs in 2004, more than three years before he sued CHI.  



                                                  -28-                                               6868 


----------------------- Page 29-----------------------

               The dissent argues that the superior court "erred by failing to make findings 



about whether Christianson's inquiry was reasonable," but Christianson did not preserve 



that argument.  His opening appellate brief does not argue that the superior court failed 



to make findings about reasonableness; it instead argues that the court failed to consider 



his inquiry, specifically, his tender to Cascade National in 2007.  Only one sentence of 



his reply brief claims that the court made no finding about reasonableness.  He asserts 



there that the superior court never found that his inquiry was not reasonable.  Failing to 

make a finding is not the same as failing to consider a fact.54  Raising the latter issue does 



not preserve the former. 



               Even if the issue had been preserved, Christianson discusses no evidence 



that would have permitted a finding that he made an objectively reasonable inquiry that 



delayed the running of the limitations period.  The statute of limitations is tolled if "a 



person makes a reasonable inquiry which does not reveal the elements of the cause of 



action within the statutory period at a point where there remains a reasonable time within 

which to file suit."55  



               The superior court made pertinent findings.  It found that "[a] reasonable 



inquiry  would  involve  an  investigation  of  both  his  insurer's  position  and  the  actual 



coverage that his broker obtained for him."  It found that "an inquiry [in October 2004] 



would have revealed . . . that CHI failed to advise Mr. Christianson of the need to obtain 



coverage for the continued operation of GALL's hydroseeder.  The inquiry would also 



        54     Cf. Lowery v. McMurdie, 944 P.2d 50 (Alaska 1997) (remanding for failure 



to make adequate findings). 



        55     John's  Heating  Serv.  v.  Lamb ,  46  P.3d  1024,  1031-32  (Alaska  2002) 



(quoting Cameron v. State, 822 P.2d 1362, 1367 (Alaska 1991)).  Christianson does not 

contend that a reasonable inquiry would have been unsuccessful or futile, or that he 

could not have learned in 2004 what he learned in 2006.  Cf. Egner v. Talbot's, Inc., 214 

P.3d 272, 281 (Alaska 2009).    



                                              -29-                                           6868 


----------------------- Page 30-----------------------

have revealed  that  Cascade National was unwilling to cover the loss."  Given what 



Christianson actually did and did not do after Jones sued and after Great Divide sent the 



September 24, 2004 letter, we read these findings as effectively finding that Christianson 



did not make a reasonable inquiry.  And the superior court's discussion of what facts a 



reasonable inquiry would have revealed, given Christianson's undisputed failure to learn 

those facts, would preclude a finding that he had made a reasonable inquiry.56   



              There is no evidence Christianson contacted CHI to determine whether 



there was a gap in his liability coverage, and if there was, whether CHI was responsible 



for that gap.  His only contacts with CHI after Jones sued him appear to have resulted in 



reassurances   that   Jones's   exclusive   remedy   was   workers'   compensation.      No 



reassurances on that topic could have justified a reasonable belief that CHI had obtained 



liability insurance covering Christianson for Jones's lawsuit and covering his defense 



expenses in that action.  Any reasonable inquiry would have promptly revealed that 



workers'  compensation  did  not  bar  Jones's  tort  lawsuit.    Jones's  exclusive  remedy 



against Christianson in Christianson's capacity as owner or operator of Titan would 



indeed have been workers' compensation.  But Jones was suing Christianson in his 



capacity  as  owner  and  operator  of  GALL,  which  owned  and  loaned  the  allegedly 



defective hydroseeder.  The exclusive liability statute, AS 23.30.055, did not bar Jones's 



tort claims, because he was not suing Christianson in his capacity as Jones's employer. 



Christianson therefore remained under a continuing duty to inquire. 



              Christianson also asserts that the superior court "ignore[d] the significance" 



of the admissions made by Dennis at his deposition in 2006.  But the court took that 



       56     See Gefre v. Davis Wright Tremaine, LLP, 306 P.3d 1264, 1275 (Alaska 



2013) ("If an inquiry has not been made, we ask in the abstract whether a reasonable 

inquiry would have produced knowledge of the cause of action." (citing Pedersen v. 

Zielski, 822 P.2d 903, 908 (Alaska 1991))). 



                                            -30-                                         6868 


----------------------- Page 31-----------------------

deposition into account when it found the same information would have been revealed 



if Christianson had inquired in 2004.  The court also implicitly found Christianson's 



inquiry  was  unreasonable  because  he  had  not  learned  that  information  sooner. 



Christianson also seems to argue that only in 2006 did Dennis's admissions reveal any 



failure by CHI; he asserts that until then, Dennis represented that Christianson and his 



companies were "fully covered for Jones'[s] injury."  But Christianson never testified 



that Dennis told him any insurer, including Great Divide, owed Christianson a defense 



in the Jones lawsuit or would indemnify his potential liability to Jones.  Christianson's 



description  of  Dennis's  reassurances  cannot  be  read  as  reassurances  that  CHI  had 



obtained any liability insurance that covered Christianson in Jones's tort suit.   



               Nor was there any evidence Christianson made other efforts to determine 



whether he in fact had liability coverage for the Jones lawsuit.  It should have been 



readily apparent to him that Great Divide was probably correct in thinking the employee 



exclusion applied. Christianson has offered no analysis of the September 24 letter or 



Great Divide's policy that would demonstrate any plausible reason to think then or now 



that   Great   Divide's   insurance   policy   actually   covered   him   in   Jones's   lawsuit. 



Christianson's  allegations  of  good  faith  in  contesting  Great  Divide's  declaratory 



judgment  action  do  not  demonstrate  that  he  made  a  reasonable  inquiry  or  that  the 



superior court clearly erred.  



               Christianson contends that the superior court ignored "the circumstances 



and legal significance" of his tender to Cascade National, Titan's auto insurer.  That 



contention is answered by the superior court's finding that a reasonable inquiry in the fall 



of 2004 would have revealed that Cascade National was unwilling to cover the loss. 



Christianson has not shown that finding was clearly erroneous.  Moreover, he refers us 



to no evidence he thought in 2004 that Cascade National's policy covered Jones's claims. 



Indeed, he refers us to no evidence he thought in 2004 he had any liability coverage other 



                                               -31-                                           6868 


----------------------- Page 32-----------------------

than Great Divide's.  Even after Great Divide declined in 2004 to defend him, causing 



him to begin incurring defense costs, he did not tender defense of the Jones lawsuit to 



Cascade National until 2007.  He likewise refers us to no evidence that it would have 



been  reasonable  for  him  to  think  that  CHI,  by  obtaining  the  Cascade  National  auto 



coverage  for Titan, had discharged its alleged professional duty to obtain insurance 



protecting him from claims based on use of vehicles owned by GALL. 



               Christianson's  opening  appellate  brief  implies  that  an  insurance  form 



produced from the CHI files at the 2006 deposition of Dennis caused him to tender the 



defense to Cascade National.  But because Christianson claims he first learned of that 



form in 2006, it could not have caused him to think in 2004 that CHI had obtained 



coverage for suits like Jones's; the form he first saw in 2006 likewise could not have 



justified  his  failure  to  make  a  reasonable  inquiry  after  he  received  Great  Divide's 



September 24, 2004 letter.  On the other hand, the availability of the form in CHI's file 



supports  the  superior  court's  finding  that  the  same  information  would  have  been 



available upon request made to CHI had Christianson made any reasonable inquiry after 



receiving Great Divide's letter.  Given the conceded importance of liability insurance to 



Christianson after Jones sued, and given that Christianson was personally paying for his 



own defense, it was unreasonable for Christianson to fail to ask CHI for the Cascade 



National policy until Dennis was deposed in November 2006.  



               The superior court did not clearly err or commit legal error in resolving the 



reasonable-inquiry issue. 



        C.     The Superior Court's Decision Raises No Public Policy Concerns. 



               Christianson argues that the superior court's decision has practical and 



public  policy  implications,  such  as  encouraging  excessive  or  premature  malpractice 



litigation. 



                                               -32-                                            6868 


----------------------- Page 33-----------------------

                The discovery rule can sometimes give rise to tension between a claimant's 



need  to  make  timely  claims  and  a  possible  social  desire  to  discourage  avoidable 



malpractice lawsuits.  And we assume, as Christianson implies, that a party defending 



himself in a personal injury lawsuit or in an insurer's action seeking a no-coverage 



declaration would prefer not to be distracted from his defense efforts by having to inquire 



about  his  insurance  broker's  possible  malpractice  or  having  to  sue  the  broker  for 



malpractice.  But what the discovery rule effectively does - requiring a party to take 



steps to protect its interests - is simply a reflection of what the statutes of limitations do. 



                Potentially conflicting social interests do not broadly vitiate the discovery 



rule, or indeed, the applicable statute of limitations.  Nor do they prevent the discovery 



rule's  application  here,  where  such  tensions  might  have  been  easily  mitigated. 



Reasonable inquiry would have given Christianson that information in ample time to sue 



CHI before the statutory period expired or to obtain CHI's agreement to extend the 



limitations period until after any coverage and liability issues were resolved.  And in any 



event, Christianson had a full three years after he began incurring defense costs in which 



to sue or reach an extension agreement with CHI.   



                Public policy was not somehow violated by applying the discovery rule to 



Christianson.  



        D.      Equitable Tolling Does Not Apply Here. 



                Finally, Christianson argues briefly that the limitations period equitably 



tolled.  As CHI points out, he did not raise this issue in the superior court. We also 



conclude that he did not brief it adequately in this court and has consequently waived the 



            57 

argument.        



        57      State  v.  Pub.  Safety  Emps.  Ass'n,  257  P.3d  151,  165  (Alaska  2011) 



("[A]rguments are waived on appeal if they are inadequately briefed." (citing Barnett v. 

                                                                                          (continued...) 



                                                  -33-                                                6868 


----------------------- Page 34-----------------------

               While rightly conceding that Christianson did not raise equitable tolling in 



the superior court and did not adequately brief the issue on appeal, the dissent would 



nonetheless hold that the limitations period was equitably tolled while the insurance 



companies'  declaratory  judgment  actions  and  Jones's  personal  injury  lawsuit  were 



pending.    But  because  the  superior  court  in  conformity  with  our  precedent  held  an 

evidentiary hearing to resolve the factual disputes relevant to the lawsuit's timeliness,58 



Christianson  was  obligated  to  raise  all  potentially  relevant  factual  disputes  so  the 

superior court could make the necessary findings of fact.59  Equitable tolling inherently 



       57(...continued) 



Barnett , 238 P.3d 594, 598 (Alaska 2010))).  Equitable tolling's inapplicability here 

might explain why Christianson did not raise the issue at trial or preserve it on appeal. 



       58      See   Pedersen    v.  Zielski,  882   P.2d   903,   907   n.4   (Alaska    1991) 



(recommending  that  trial  court  hold  evidentiary  hearing  on  statutes  of  limitations 

disputes to resolve fact questions). 



       59      The dissent cites Larson v. State, Department of Corrections , Mem. Op. & 



J. No. 1257, 2006 WL 1868494 (Alaska, July 5, 2006), in which we applied equitable 

tolling and remanded a case to the superior court, even though the pro se appellant had 

not relied on equitable tolling in the superior court.  But the State there agreed a remand 

was appropriate; it stated "it had 'no problem with' allowing [the] appeal of [the later 

case]  to  proceed."    Id.  at  *6  n.16.    CHI  made  no  similar  concession  here,  and 

Christianson,  who  was  not  pro  se,  mentioned  equitable  tolling  only  briefly  at  oral 

argument before us.  Also, Larson's two lawsuits involved the same issue (prisoner 

classification) and the same parties.  Id. at *5-*6.  But here Christianson brought a new 

cause of action - for professional malpractice - against a different party - CHI.  The 

opposing parties in the other lawsuits were his insurers and his former employee.  



                                              -34-                                          6868 


----------------------- Page 35-----------------------

raises potential factual disputes.60  There is no basis for remanding to try an unpreserved 



and fact-dependant issue that was not litigated at the evidentiary hearing.  



               Apart from these procedural barriers, equitable tolling does not apply here, 



because it requires, among other things, that the party have pursued a past claim in a 

"judicial  or  quasi-judicial  governmental  forum."61    Christianson  did  not  previously 



pursue  a  claim  against  CHI  in  any  forum.    Defending  in  the  insurers'  declaratory 



judgment  actions  and  Jones's  personal  injury  lawsuit  was  no  substitute  for  a  claim 



against CHI.  CHI was not a party, and its potential liability to Christianson was not 



relevant, in those lawsuits. 

               The dissent would apply Brannon v. Continental Casualty Co.62 to hold that 



the statute of limitations was equitably tolled until the declaratory judgment and personal 



injury lawsuits were resolved.  There we considered and explicitly rejected cases from 



other states that held that the limitations period in a duty-to-defend case does not begin 

to run until the underlying litigation ends.63 



               Brannon concerned the timeliness of an insured's claims against his liability 



insurer.  We adopted California's equitable tolling rule in duty-to-defend cases and held 



that although an insured may immediately file a contract action against the insurer for 



        60     See Dayhoff v. Temsco Helicopters, Inc. , 772 P.2d 1085, 1088 (Alaska 



 1989) (remanding "for resolution of the  factual questions" of notice and prejudice); 

Gudenau & Co. v. Sweeney Ins., Inc., 736 P.2d 763, 768 (Alaska 1987) (noting potential 

issues about whether any prior remedies gave the defendant notice of the claim). 



        61     Gudenau & Co., 736 P.2d at 768. 



        62     137 P.3d 280 (Alaska 2006).  Christianson's briefs do not cite Brannon . 



        63     Id. at 286.  Florida follows this rule.  Cont'l Cas. Co. v. Fla. Power & Light 



Co., 222 So. 2d 58, 59 (Fla. App. 1969). 



                                             -35-                                          6868 


----------------------- Page 36-----------------------

breach of the duty to defend, the insured is not required to do so.64  California has refused 



to extend its equitable tolling doctrine from duty-to-defend cases against insurers to 

malpractice actions against insurance brokers.65  The California Court of Appeal has 



explained  that  "the  relationships  among  insureds,  insurers,  and  brokers  give  rise  to 

different duties that, in turn, are subject to different statutes of limitations."66  We agree. 



An  insurance  broker  will  generally  not  have  the  same  opportunity,  motivation,  or 



contractual duty that an insurer has to investigate a coverage dispute.  



               The  dissent  argues  that  a  party  should  not  be  required  to  defend  two 



lawsuits  simultaneously.    In  Part  IV.C  we  considered  and  rejected  Christianson's 



equivalent policy argument.  And Brannon would not prevent simultaneous lawsuits 



even if no broker claim were being made:  An insurance company (or an insured) may 



always sue seeking a declaration on coverage issues before the underlying lawsuit ends. 



We  there  recognized  that  any  party  could  immediately  ask  a  court  to  construe  the 



insurance contract rather than wait for any underlying litigation to end, stating, "[t]he 



California approach . . . allows (but does not force) an insured to file suit for breach 

immediately after the insurance company denies the defense."67  But a malpractice action 



against a broker is different:  A broker cannot protect itself from stale claims by asking 



the court to declare that it has not committed malpractice. 



               The rule proposed by the dissent would permit a broker like CHI to be sued 



for malpractice many years after it placed the insurance and the insured began suffering 



        64     Brannon , 137 P.3d at 285-86. 



        65     Hydro-Mill Co. v. Hayward, Tilton & Rolapp Ins. Assocs., Inc. , 10 Cal. 



Rptr. 3d 582, 597-98 (Cal. App. 2004). 



        66     Id. at 598. 



        67     Brannon , 137 P.3d at 286 (citation omitted). 



                                               -36-                                           6868 


----------------------- Page 37-----------------------

actual damages from the broker's alleged malpractice.  This is not the case to adopt such 

a sweeping change.68 



               The  dissent,  in  discussing  equitable  tolling,  relies  on  Peat,  Marwick, 

Mitchell & Co. v. Lane .69    The Florida Supreme Court there held that an accounting 



malpractice cause of action did not accrue until a tax court entered a final judgment.70 



Peat, Marwick is founded on Florida's rule for accrual in attorney malpractice cases; in 



Florida "a cause of action for legal malpractice does not accrue until the underlying legal 

proceeding has been completed on appellate review."71  Alaska does not follow that 



approach to accrual:  We explicitly rejected "the 'exhaustion of appeals' rule" in Beesley 

v. Van Doren,72 and Christianson has not asked us to reverse settled law about accrual 



of malpractice actions.   



               Equitable  tolling  would  not  excuse  the  untimeliness  of  Christianson's 



lawsuit or justify remand. 



       68      This court reversed and remanded Jones's personal injury action against 



Christianson in 2012.  Jones v. Bowie Indus., Inc. , 282 P.3d 316 (Alaska 2012).  The 

dissent's analysis would toll the running of the limitations period on the claim against 

CHI until Jones's claims are finally resolved, at some future date following remand.  The 

limitations period would therefore be tolled for at least nine years after Christianson 

asked Dennis to get him insurance, and thus long after the communications and events 

relevant to obtaining insurance took place.  And only then would the three-year period 

arguably begin to run. 



       69      565 So. 2d 1323 (Fla. 1990). 



       70      Id. at 1327. 



       71      Id . at 1325 (citations omitted).   



       72      873 P.2d 1280, 1282 (Alaska 1994) (citing Wettanen v. Cowper, 749 P.2d 



362, 365 (Alaska 1988)).  Cf. Thomas v. Cleary, 768 P.2d 1090, 1093 (Alaska 1989) 

(holding that clients had suffered no harm because IRS had not sent deficiency notice). 



                                             -37-                                          6868 


----------------------- Page 38-----------------------

V.    CONCLUSION 



            We AFFIRM the judgment of the superior court. 



                                     -38-                                  6868 


----------------------- Page 39-----------------------

FABE, Justice, dissenting. 



I.      INTRODUCTION 



                Because I disagree with the court's application of the discovery rule in this 



case, I respectfully dissent.  "Under the discovery rule, a cause of action accrues 'when 



a person discovers, or reasonably should have discovered, the existence of all elements 



                                        1 

essential to the cause of action.' "   In my view, this rule compels the conclusion that the 



statute of limitations period on Christianson's malpractice claim did not begin to run 



until Great Divide formally disclaimed its duty to defend Christianson in March 2006. 



The court reasons that the statute of limitations period started to run when Christianson 



                                                               2 

received Great Divide's September 24, 2004 letter.   The court cites to authority from 



other jurisdictions to contend that Christianson's defense costs in 2004 completed the 



elements  of  his  malpractice  tort  claim  against  his  insurance  broker  and  therefore 



                                                   3 

triggered the statute of limitations period.   But in each of the cited cases, the defense 



costs were incurred after a definitive denial of insurance coverage, which did not occur 



in this case until 2006.  The essential elements of Christianson's cause of action could 



not be discovered in 2004 because Great Divide had not yet taken a definitive position 



on coverage or decided whether it would reimburse Christianson for the cost of his 



defense.  Furthermore, the statute of limitations period on Christianson's malpractice 



        1       Roach v. Caudle , 954 P.2d 1039, 1041 (Alaska 1998) (quoting Cameron 



v. State, 822 P.2d 1362, 1366 (Alaska 1991)). 



        2       Slip Op. at 10-19. 



        3       Slip Op. at 18 n.35. 



                                                  -39-                                                6868 


----------------------- Page 40-----------------------

claim  should  have  been  equitably  tolled  under  the  rule  declared  in  Brannon  v. 

Continental Casualty Co.4 



II.     DISCUSSION 



        A.      The  Statute  Of  Limitations  Could  Not  Have  Started  To  Run  On 

                September 24, 2004 Because Christianson Had Not Yet Suffered An 

                Injury. 



                1.      Christianson's claim was not yet ripe. 



                The court concludes that the superior court did not err in finding that "the 



statute of limitations began running [on September 24, 2004,] when Christianson learned 



information that should have caused him to make an inquiry that would have discovered 



                                                                      5 

the essential elements of his cause of action against CHI."   But in my view the statute 



of limitations could not possibly have started to run then because the essential elements 



of Christianson's claim had not yet accrued.  Because his insurers had not yet declined 



to defend him, Christianson had not yet suffered an injury attributable to CHI and thus 



could not have brought a malpractice claim against CHI at that time. 



                In Thomas v. Cleary, we held that suspected future harm is not enough to 



                                                 6 

ripen a claim of professional malpractice.   In that case, the Clearys sued their accounting 

firm, alleging that it had miscalculated and failed to file taxes owed by their business.7 



After a jury awarded damages to the Clearys, the accounting firm appealed, arguing that 



the Clearys' claim was not yet ripe because the corporation's tax liability for the year in 



        4       137 P.3d 280 (Alaska 2006). 



        5       Slip Op. at 28. 



        6       768 P.2d 1090, 1092-93 (Alaska 1989). 



        7       Id. at 1091. 



                                                  -40-                                              6868 


----------------------- Page 41-----------------------

                                                         8 

question had not yet been assessed by the IRS.   We held that there must be a definite 



injury before a claim for malpractice becomes actionable: 



                The mere breach of a professional duty, causing only nominal 

                damages, speculative harm, or the threat of future harm - 

                not yet realized - does not suffice to create a cause of action 

                for  negligence.  Hence,  until  the  client  suffers  appreciable 

                harm as a consequence of [the professional's] negligence, the 

                client cannot establish a cause of action for malpractice.[9] 



And we also held that, even though the Clearys knew about the accountant's misconduct 



and knew that they would be liable if the IRS ever did assess a deficiency, they had not 



yet suffered the required injury because the IRS had not yet assessed a tax deficiency 



against them:  "Even if [the client] discovers [the professional's] negligent acts before 



he  suffers  damages,  the  cause  of  action  for  malpractice  is  not  complete  until  actual 

damages are suffered."10  We concluded that the Clearys' claim was not yet ripe because 



harm could still be averted:  "If a deficiency had never been assessed, the plaintiff would 

not have been harmed and therefore would have had no cause of action."11  



                The present case is similar.  Christianson's malpractice claim against CHI 



was not yet ripe when Christianson received Great Divide's September 24, 2004 letter 



because the letter left open the possibility that Great Divide would defend Christianson 



or reimburse him for a defense.  The letter said only that Great Divide "may refuse to 



        8       Id. at 1092. 



        9       Id. (quoting Budd v Nixen , 491 P.2d 433, 436 (Cal. 1971), superseded by 



statute, 1977 Cal. Stat. Ch. 863,  1, as recognized in Laird v. Blacker, 279 Cal. Rptr. 

700 (Cal. App. 1991)). 



        10      Id. at 1094 (citing  Greater Area Inc. v. Bookman, 657 P.2d 828, 829 n.3 



(Alaska 1982)). 



        11      Id. at 1093 (quoting Atkins v. Crosland , 417 S.W.2d 150, 153 (Tex. 1967)). 



                                                  -41-                                               6868 


----------------------- Page 42-----------------------

indemnify [Christianson] in this matter" (emphasis added) and that Great Divide would 



provide Christianson with its position regarding coverage sometime in the future.  If, 



after  sending  the  letter,  Great  Divide  (or  one  of  Christianson's  other  insurers)  had 



provided coverage instead of denying it, Christianson would not have been harmed and 



would not have had a cause of action.  Prior to an actual denial of coverage from Great 



Divide, any injury from CHI's alleged malpractice was purely speculative.  Therefore, 



Christianson's claim for malpractice could not have ripened before a formal denial of 



coverage. 



               The  court  places  great  emphasis  on  the  fact  that  Christianson  incurred 



defense costs after Great Divide's September 24, 2004 letter informed him that Great 



Divide "may refuse to defend or indemnify [him] for this matter."  The court cites to 



cases  from  other  jurisdictions  to  support  its  contention  that  the  fact  of  incurring 



attorney's fees completes the elements of a malpractice tort claim against an insurance 

broker and triggers the statute of limitations.12  In each of those cases, however, the 



defense costs were incurred after a definitive denial of coverage.13  Similarly, the court 



        12     Slip Op. at 18 n.35. 



        13     See Am. Home Assurance Co. v. Osbourn, 422 A.2d 8, 16 (Md. App. 1980) 



(holding that the statute of limitations for the malpractice claim against the insurance 

broker began to run on the date when the insurance company sent a letter "stating there 

was no coverage and declining to provide a defense"); Spurlin v. Paul Brown Agency, 

Inc. ,  454  P.2d  963,  964  (N.M.  1969)  (holding  that  the  malpractice  cause  of  action 

accrued when the insurance broker's client was sued, which was nearly two years after 

being definitely informed by the insurance broker that there was no coverage on his 

vehicle); see also Wallace v. Helbig , 963 S.W.2d 360, 361-62 (Mo. App. 1998) (holding 

that the malpractice statute of limitations began to run when the trial court "entered a 

declaratory judgment . . . which determined that the insurance policy provided by [the 

insurance broker] did not provide coverage . . . . In the event the court had declared there 

was coverage, [the insured] would not have had a cause of action against [the insurance 

                                                                                  (continued...) 



                                              -42-                                           6868 


----------------------- Page 43-----------------------

relies  on  Gudenau  &  Co.,  Inc.  v.  Sweeney  Insurance,  Inc.,  where  we  held  that  the 



discovery  rule  was  triggered  and  the  statute  of  limitations  began  to  run  when  the 

insurance   claim   was   formally   rejected   by   the   insurer.14      But   Great   Divide's 



September  24,  2004  letter  indicated  that  it  was  not  stating  a  definitive  position  on 



coverage, which would be provided only after its investigation.  



                As we held in Jarvill v. Porky's Equipment, Inc. , the statute of limitations 

on a claim cannot begin to run until the claim is ripe.15  In that case, Jarvill bought a 



fishing boat from Porky's Equipment.16  When the boat was delivered, Jarvill's inspector 



expressed concern that the aluminum sheeting used for the hull was too thin to be safe.17 



Two-and-a-half years after delivery, the hull cracked and the boat sank.18  Jarvill sued 



Porky's  Equipment  for  negligence  and  for  selling  a  defective  product.19    Porky's 



Equipment claimed that the two-year statute of limitations barred Jarvill's suit because 



Jarvill had notice of the defect at the time of delivery and, under the discovery rule, 



        13(...continued) 



broker] under any recognized legal theory."). 



        14      736 P.2d 763, 767 (Alaska 1987) (in applying the discovery rule, we also 



noted that "[i]nsurance policy exclusions do not necessarily have independent meaning 

for a layperson.  The insured is entitled to rely on his broker's professional skill and 

representations when interpreting the scope of his insurance coverage."). 



        15      189 P.3d 335, 341 (Alaska 2008). 



        16      Id. at 336. 



        17      Id. 



        18      Id. at 337. 



        19      Id. 



                                                 -43-                                              6868 


----------------------- Page 44-----------------------

reasonable inquiry would have led Jarvill to discover all the essential elements of his 

claim.20 



                On appeal we rejected the argument of Porky's Equipment.21  Despite the 



fact that Jarvill was put on notice that the boat might be defective when it was delivered, 



we held that "any tortious injury to Jarvill remained a matter of speculation" until the 

boat  actually  sank.22    We  held  that  "the  discovery  rule  only  extends  the  statute  of 



limitations; it does not shorten it."23    And  we  recognized that starting the statute of 



limitations when Jarvill had notice of only potential future harm would require us to 



conclude, paradoxically, that Jarvill's claim had accrued before it was ripe, and would 



"lead us to the anomalous and grossly unfair result of the statute being held to have run 



and the bar becoming completed even before the hapless plaintiff suffered injury or 

damage."24 



                In my view, the present case is indistinguishable from Porky's Equipment . 



No matter what Christianson should have suspected when Great Divide first informed 



him it was considering denying his claim, he had no right of action against CHI until he 



had actually been denied insurance coverage.  Like the warning that the boat's hull was 



too thin, Great Divide's letter signaled potential future injury.  But it was only when the 



boat actually sank that harm was done and a claim accrued; if the boat had stayed afloat, 



there would have been no claim.  And if, after sending its initial letter, Great Divide had 



        20      Id. at 338-39. 



        21      Id. at 339-40. 



        22      Id. 



        23      Id. at 339. 



        24      Id. at 340-41 (internal citation omitted). 



                                                 -44-                                              6868 


----------------------- Page 45-----------------------

provided coverage and reimbursed Christianson for his defense, then Christianson would 



have had no right of action against CHI for malpractice.  Therefore, Christianson's claim 



could not have been brought when he received Great Divide's letter, and the statute of 



limitations cannot have started to run then. 



               The court claims that it is irrelevant to the discovery rule issues whether or 



not Christianson could have filed a malpractice lawsuit against CHI after receipt of Great 

Divide's September 24, 2004 letter.25  But this contention contradicts the court's own 



formulation of the discovery rule as "simply determin[ing] when the cause of action 

accrues for purposes of triggering the applicable limitations period."26  Black's Law 



Dictionary  defines "accrue," as applied to a cause of action, as follows: "[a] cause of 

action  'accrues'  when  a  suit  may  be  maintained  thereon."27  Therefore,  it  cannot  be 



irrelevant to consider whether Christianson could have maintained a malpractice lawsuit 



in the fall of 2004, when the court insists that the statute of limitations was triggered. 



The court's subsequent discussion of the difference between the knowledge sufficient 

to  require  inquiry  and  the  knowledge  sufficient  to  support  a  lawsuit28  obscures  the 



essential requirement that Christianson's cause of action must have accrued before the 



discovery rule became applicable. 



        25     Slip Op. at 19. 



        26     Slip Op. at 12. 



        27     See United States v. Meyer, 808 F.2d 912, 914 (1st Cir. 1987) (alteration 



in original) (quoting BLACK 'S LAW DICTIONARY  19 (5th ed. 1979)); see also Conrad v. 

Hazen , 665 A.2d 372, 375 (N.H. 1995) (holding that an action "does not accrue until 'a 

suit  may  be  maintained  thereon'  "  (quoting  BLACK 'S  LAW  DICTIONARY  21  (6th  ed. 

1990))). 



        28     Slip Op. at 19. 



                                               -45-                                           6868 


----------------------- Page 46-----------------------

               2.      The superior court clearly erred by finding that Great Divide's 

                       September 24, 2004 letter was a definitive denial of coverage. 



               The  superior  court  found  that  a  reasonable  person,  looking  at  Great 



Divide's September 24, 2004 letter, would have felt absolutely certain that Great Divide 



would eventually deny coverage, and that therefore the letter was as good as a formal 



denial.     The    superior   court   concluded     that   Christianson    suffered    injury   in 

September 2004.  Today the court concludes that this finding was not clearly erroneous.29 



But we have held that the statute of limitations is a disfavored defense and that "neither 

the law nor the facts should be strained in aid of it."30  Only by straining the facts could 



the superior court conclude that the September 24, 2004 letter was an actual denial of 



coverage.  I therefore conclude that the superior court's findings on this point were 



clearly erroneous.   



               The superior court found that the letter was an actual denial of coverage for 



two  reasons.    First,  the  superior  court  found  that  the  letter  essentially  informed 



Christianson that he "was on his own" and that Christianson began incurring damages 



shortly  thereafter.    Second,  the  superior  court  found  that  the  letter's  discussion  of 



exclusions in Christianson's policy informed him that he was not covered.  In my view, 



the superior court's analysis on both of these points was incorrect. 



        29     Slip Op. at 15. 



        30     Tipton v. ARCO Alaska, Inc., 922 P.2d 910, 912-13 (Alaska 1996) (quoting 



Safeco Ins. Co. v. Honeywell, 639 P.2d 996, 1001 (Alaska 1981)) (internal quotation 

marks omitted). 



                                               -46-                                           6868 


----------------------- Page 47-----------------------

                       a.      It  was  error  to  interpret  the  plain  language  of  the 

                               September  24,  2004  letter  as  "effectively  disclaiming 

                               Great Divide's duty to defend Mr. Christianson." 



                I  conclude     that  it  was    plain   error   to   interpret   Great    Divide's 



September 24, 2004 letter as a definitive denial of coverage.  The letter stated clearly and 



repeatedly that Great Divide was not yet denying coverage or a defense.  Specifically, 



the letter stated:  "We have assigned [an adjuster] to investigate the circumstances of this 



incident . . . .  Once the investigation has been conducted, we will review the information 



and documentation obtained . . . . We will then provide you with our position regarding 



coverage."  (Emphasis added.)  It also indicated that "Great Divide may refuse to defend 



or indemnify you for this matter."  (Emphasis added.)  Great Divide could have decided 



to defend Christianson without contradicting anything it wrote in the letter. 



                The  superior  court's  attempt  to  reconcile  this  clear  language  with  its 



conclusion that Great Divide's letter actually denied coverage led to factual findings that 



contain internal contradictions.  While the superior court found that Great Divide was 



"effectively" denying Christianson a defense, it also found that the letter was merely a 



"preliminary determination" that put Christianson "on notice of the precise reason Great 



Divide eventually declined to indemnify his loss or reimburse legal costs."  (Emphasis 



added.)  But  the  letter  must  have  either  been  an  actual  denial  or  a  preliminary 



determination.  In my view it was clear error to find that it was both. 



                The superior court also placed great weight on Great Divide's statement 



that it would be "necessary for [Christianson] to protect [his] own interest in regard to 



the Complaint."  The superior court found that this phrase was "critical" and interpreted 



it   to   mean   that   "Great   Divide   was   effectively   disclaiming   its   duty   to   defend 



Mr.  Christianson."    But  this  phrase  was  sandwiched  between  important  qualifying 



language, which the superior court failed to discuss.  Immediately before, Great Divide 



                                                -47-                                             6868 


----------------------- Page 48-----------------------

indicated that such action would only be necessary "[i]n the interim" until it provided 



Christianson with its "position regarding coverage."  And later in the same paragraph, 



Great Divide promised to reimburse Christianson "[s]hould we determine that we do in 



fact have a duty to provide a defense in this matter."  I would hold that it was clear error 



to interpret these plainly noncommital statements as a definitive denial of coverage. 



                The superior court's analysis is not saved by its insistence that the letter 



forced Christianson to provide his own defense.  Because Great Divide explicitly left 



open the possibility that it would reimburse Christianson for this expense, Christianson 



had not yet suffered any injury attributable to CHI.  The strongest claim that the facts 



will bear is the court's observation that "[Christianson] was therefore aware he was 



presently suffering an out-of-pocket loss [for which] Great Divide might not reimburse 

him . . . ."31  



                         b.      It was clear error to find that Great Divide's discussion of 

                                 policy exclusions implied a denial of the duty to defend. 



                It was also clear error for the superior court to find that Great Divide's 



discussion in the September 24, 2004 letter of exclusions in Christianson's policy was 



equivalent  to  an  actual  disclaimer  of  the  duty  to  defend  and  indemnify.    This  is 



essentially a finding that, through careful analysis of the policy exclusions, Christianson 



could have predicted that Great Divide would eventually deny coverage.  But we have 



rejected  the  idea  that  the  insured  should  be  expected  to  go  beyond  the  express 



representations of his insurer to divine the scope of his coverage.  In  Gudenau & Co., 



Inc. v. Sweeney Insurance, Inc. , we concluded that "[i]nsurance policy exclusions do not 



necessarily  have  independent  meaning  for  a  layperson"  and  held  that  the  statute  of 



limitations  began  to  run  not  when  the  insured  read  his  policy,  which  contained  an 



        31       Slip Op. at 17-18 (emphasis added). 



                                                  -48-                                                6868 


----------------------- Page 49-----------------------

exclusion of coverage, but when the insurer actually rejected the claim.32  The situation 



is similar here.  Great Divide's letter may have drawn Christianson's attention to the 



exclusions it would eventually invoke to deny his claim, but it was clear error to find that 



merely highlighting these exclusions operated as a definite denial of coverage.  



               And  engaging  in  a  murky  and  fact-sensitive  inquiry  into  whether  a 



hypothetical reasonable person would, despite Great Divide's express language to the 



contrary,  treat  the  September  24,  2004  letter  as  a  definitive  denial  of  a  defense  is 



inconsistent with the bright-line nature of a statute of limitations.  "Statutes of limitations 



should be capable of application without engendering extensive litigation before the case 



on the merits is litigated.  Thus, in theory, the statutes of limitations should begin to run 

on the occurrence of a definitive event."33  In my view, that definitive event in this case 



was Great Divide's actual, express denial of coverage. 



               I conclude that Christianson's malpractice claim was not yet ripe and that 



the statute of limitations on his claim did not begin to run until Great Divide formally 



denied coverage in March 2006.  I would therefore hold that Christianson's claim, filed 

in 2008, was not barred by the three-year statute of limitations.34 



        32     736 P.2d 763, 767-68 (Alaska 1987). 



        33     Pedersen v. Zielski , 822 P.2d 903, 907 (Alaska 1991). 



        34     Even assuming that Christianson suffered immediate injury and that all the 



elements  of  a  malpractice  suit  were  in  place,  waiting  to  be  discovered,  as  of 

September 24, 2004, the superior court also erred by failing to make findings about 

whether Christianson's inquiry was reasonable. 



               Whether an inquiry was reasonable is a "genuine issue[] of material fact 

which must be resolved at an evidentiary hearing." Id. at 908.  We have held that, where 

the plaintiff has made an inquiry, the court should ask not whether an ideal inquiry would 

have produced knowledge, but whether the inquiry that was made was reasonable.  Id. 

                                                                                    (continued...) 



                                               -49-                                            6868 


----------------------- Page 50-----------------------

        B.     The Statute Of Limitations Should Have Been Equitably Tolled Until 

               The Resolution Of The Underlying Litigation. 



               Even if the statute of limitations period would otherwise have started upon 



receipt of the September 24, 2004 letter, the equities of the case demand that the statute 



of limitations be tolled until the conclusion of Christianson's underlying litigation with 



Jones and Christianson's insurers.  The equitable tolling doctrine "relieve[s] a plaintiff 



from  the  bar  of  the  statute  of  limitations  when  he  has  more  than  one  legal  remedy 



        34(...continued) 



               The superior court failed to examine whether Christianson's inquiry was 

reasonable under this standard.  Christianson investigated the existence of a claim for 

malpractice against CHI by tendering the defense to his insurers and litigating the scope 

of their obligations in declaratory judgment actions.  Only three sentences in the superior 

court's opinion conceivably relate to the issue of whether this inquiry was reasonable, 

and they are all merely observations about the characteristics of an ideal inquiry:  



               A reasonable inquiry would involve an investigation of both 

               his insurer's position and the actual coverage that his broker 

               obtained  for  him.  .  .  .  [A]n  inquiry  [when  Christianson 

               received Great Divide's September 24, 2004 letter] would 

               have revealed what Mike Dennis allegedly conceded at his 

               deposition: that CHI failed to advise Mr. Christianson of the 

               need  to  obtain  coverage  for  the  continued  operation  of 

               GALL's hydroseeder.  The inquiry would also have revealed 

               that Cascade National was unwilling to cover the loss.  



Today this court reads these "as effectively finding that Christianson did not make a 

reasonable inquiry."  Slip Op. at 30.  But these sentences contain no such finding; they 

do not examine Christianson's conduct at all.  Instead of examining whether "a plaintiff's 

particular inquiry. . . was reasonable," the superior court examined whether "a reasonable 

inquiry would have produced knowledge," an approach we identified as clear error in 

Pedersen .  822 P.2d at 908. 



                                              -50-                                           6868 


----------------------- Page 51-----------------------

available to him."35  In such circumstances, the statute is equitably tolled if "(1) pursuit 



of the initial remedy gives defendant notice of plaintiff's claim, (2) defendant's ability 



to gather evidence is not prejudiced by the delay, and (3) plaintiff acted reasonably and 

in good faith."36  If the doctrine applies, the statute of limitations is tolled during the 



pendency of the initial litigation and the plaintiff is given the full statutory period to file 

once tolling ceases.37  In this case, the statute of limitations should have been tolled 



pending the resolution of the underlying personal injury lawsuit against Christianson and 



Christianson's declaratory judgment actions against his insurers.  



                It should be noted that Christianson did not argue below that the statute of 



limitations on his malpractice claim should be equitably tolled while he was pursuing 



other legal remedies.  Nor was the issue adequately briefed before us.  But in Larson v. 



State, Department of Corrections, we determined that the statute of limitations on the 



claim in that case was equitably tolled despite the fact that the issue had not been raised 



        35      Fred Meyer of Alaska, Inc. v. Bailey , 100 P.3d 881, 886 (Alaska 2004) 



(quoting Dayhoff v. Temsco Helicopters, Inc. , 772 P.2d 1085, 1087 (Alaska 1989)).  



        36      Id. 



        37      See  id.  (citing  Gudenau  &  Co.,  Inc.,  736  P.2d  at  768).    Although  our 



previous cases have uniformly held that once the circumstances that justify equitable 

tolling abate, the plaintiff has the full statutory period to file his claim, we left open the 

question whether this will be true in every case in Solomon v. Interior Regional Housing 

Authority , 140 P.3d 882, 885-86 (Alaska 2006).  But even if equitable tolling in this case 

merely paused the statute of limitations period instead of resetting it, Christianson filed 

his claim against CHI in time.  Christianson began litigating the declaratory judgment 

action  against  Great  Divide  less  than  two  years  after  Great  Divide  sent  the  letter 

definitively disclaiming its duty to defend in March 2006.  And Christianson filed his 

lawsuit against CHI only nine months after Cascade finally prevailed on its declaratory 

judgment action.  Therefore, excluding the time spent litigating the declaratory judgment 

actions  against Great Divide and Cascade, Christianson brought his claim against CHI 

within three years of receiving Great Divide's letter. 



                                                 -51-                                              6868 


----------------------- Page 52-----------------------

below.38    Failure  to  consider  whether  the  statute  of  limitations  should  have  been 



equitably tolled in this case would leave Christianson without a remedy and contradict 



our judgment that the statute of limitations is a disfavored defense and that we "will 

strain neither the law nor the facts in its aid."39 



               1.     Christianson's   litigation   against   Jones   and   Christianson's 

                      insurers  demands  a  tolling  of  the  statute  of  limitations  on 

                      Christianson's malpractice claim. 



               After Christianson received Great Divide's September 24, 2004 letter, he 



litigated three other actions before filing his claim for malpractice against CHI.  First, he 



defended himself in the personal injury suit filed by Jones, the Titan employee who was 



injured using the hydroseeder.  Second, Christianson litigated a declaratory judgment 



action filed by Great Divide for non-liability.  Finally, Christianson litigated a similar 



action filed by Cascade National.  In my view, all three of these actions demand that the 



statute of limitations on Christianson's malpractice claim be tolled. 

               In Brannon v. Continental Casualty Co. , we examined a similar situation.40 



In that case, the insurer refused to defend the insured party against claims filed by the 

Brannons.41    The  insured  party  filed  for  bankruptcy,  and  the  Brannons  obtained  a 



       38      Mem. Op. & J. No. 1257, 2006 WL 1868494, at *5-6 (Alaska, July 5, 



2006). 



       39      Solomon , 140 P.3d at 883 (holding that, where there is no dispute over 



relevant facts, the date on which the statute of limitations begins to run "becomes a 

question of law to which we will apply our independent judgment"). 



       40      137 P.3d 280 (Alaska 2006). 



       41      Id. at 282. 



                                              -52-                                          6868 


----------------------- Page 53-----------------------

                                                                                  42 

judgment  in  their  favor  as  part  of  the  bankruptcy  proceedings.                 The  insured  also 



transferred any claims he had against his insurer to the Brannons, and the Brannons 



subsequently sued the insurer for breaching its contractual duties under the insurance 

policy to defend and indemnify the insured.43  The superior court dismissed the suit on 



summary judgment, holding that the statute of limitations had started to run when the 

insurer denied the defense, more than three years before the Brannons filed suit.44 



                 On  review  we  adopted  the  rule  that  "although  the  statutory  period  for 



breach of the duty to defend commences upon the refusal to defend, it is equitably tolled 

until the underlying action is terminated by final judgment."45  Our decision was based 



on our judgment that requiring the insured to defend himself  in the underlying suit while 



also litigating against his insurance company would be unfair: 



                 [T]olling the statute of limitations during the pendency of the 

                 underlying      litigation   avoids     requiring     the   insured     to 

                 participate  in  two  lawsuits  at  once.  After  the  insurance 

                 company  has  denied  the  insured  a  defense,  it  would  be 

                 potentially  unfair  to  require  the  insured  to  file  a  lawsuit 

                 against    the    insurance     company       while     simultaneously 

                 defending himself in the underlying lawsuit.[46] 



         42      Id. at 283. 



         43      Id. 



         44      Id.  The applicable statute of limitations requires that contract actions be 



commenced within three years.  See AS 09.10.053. 



         45      Brannon , 137 P.3d at 285 (quoting Lambert v. Commonwealth Land Title 



Ins. Co. , 811 P.2d 737, 739 (Cal. 1991)) (internal quotation marks omitted). 



         46      Id. at 286. 



                                                    -53-                                                6868 


----------------------- Page 54-----------------------

In addition to preventing injustice to the insured, we also recognized that tolling the 



statute of limitations would "promote judicial economy, lead to certainty of damages, and 

assist courts by establishing a 'bright-line rule' " about the statute of limitations period.47 



               The  same  equitable  considerations  demand  tolling  of  the  statute  of 



limitations  period  in  this  case.    For  purposes  of  the  equitable  tolling  doctrine, 



Christianson's claim against his insurance broker for failure to secure insurance coverage 



is indistinguishable from the claim in Brannon against an insurer for failure to defend 



and indemnify.  Both cases involve a defendant who was, allegedly, wrongly exposed 



to liability.  We are thus bound by our conclusion in Brannon that it would be unfair to 



force a party to both defend himself and seek redress for wrongful exposure to liability 



at  the  same  time.    If  anything,  the  equities  requiring  tolling  in  this  case  are  more 



compelling than in Brannon because Christianson had more to litigate.  Christianson was 



both defending himself in the underlying personal injury lawsuit and litigating the scope 



of his insurance coverage in separate declaratory judgment actions against Great Divide 



and Cascade National.  



                       a.      The statute of limitations should have been tolled because 

                               Christianson  was  defending  himself  in  the  underlying 

                               personal injury suit. 



               In  September  2004  Titan  employee  Keith  Jones  sued  Christianson  to 



recover for injuries sustained while using a hydroseeder.  The fact that Christianson was 



being sued and was required to defend himself justifies tolling the statute of limitations 



on  his  claim  for  malpractice  for  the  same  reason  it  justified  tolling  the  statute  of 



limitations in Brannon :  It would be unjust to require Christianson to defend himself 



        47     Id. (citing Shaw v. State, Dep't of Admin., Pub. Defender Agency, 816 P.2d 



1358, 1361 (Alaska 1991) ("[W]e note the desirability of allowing a criminal defendant 

with a valid post-conviction relief claim to pursue that remedy without the distraction of 

also filing a legal malpractice claim.")). 



                                                -54-                                            6868 


----------------------- Page 55-----------------------

against Jones and to litigate against his insurance broker at the same time.  Christianson 



would  otherwise  be  required  to  litigate  two  cases  simultaneously  when  it  was  only 



because of CHI's alleged negligence that Christianson was required to litigate even one. 



               There is also a clear interest in judicial economy and certainty of damages 



to be served by allowing Christianson to bring his malpractice claim after judgment has 



been entered in the underlying lawsuit.  The full extent of the damages allegedly caused 



by  CHI's  negligence  could  not  be  known  until  the  defense  had  been  paid  for  and 



judgment entered in the underlying suit.  And such a holding would create a bright-line 



rule without the need for speculative findings.  I therefore believe the equities of this case 



are indistinguishable from those in Brannon . 



                      b.      The statute of limitations should have been tolled because 

                              Christianson  was  litigating  the  scope  of  his  insurance 

                              coverage with his insurers. 



               Christianson also litigated declaratory judgment actions against his insurers, 



and the statute of limitations on Christianson's malpractice suit should have been tolled 



pending resolution of these claims.  Requiring Christianson to proceed against CHI while 



litigating  declaratory  judgment  actions  against  his  insurers  would  force  him  to  take 



contradictory positions.  In the declaratory judgment actions he would seek to show that 



Great Divide or Cascade National owed him a defense.  In the malpractice suit he would 



seek to show the opposite - that CHI negligently left him exposed to liability.   Forcing 



him to take these contradictory positions at the same time could prejudice him in both 



actions. 



               Several jurisdictions have determined that requiring a litigant to take these 

types of contradictory positions is "untenable."48  In Peat, Marwick, Mitchell & Co. v. 



        48     E.g. , Peat, Marwick, Mitchell & Co. v. Lane , 565 So. 2d 1323, 1326 (Fla. 



                                                                                 (continued...) 



                                              -55-                                          6868 


----------------------- Page 56-----------------------

Lane , the Florida Supreme Court found that the statute of limitations on a malpractice 



claim against a tax accountant did not commence until after the plaintiff litigated the 

scope of his deficiency with the IRS.49  The court held that requiring the plaintiff to file 



their malpractice action, in which they would argue that their accountant engaged in 



misconduct, at the same time that they were challenging the IRS's deficiency assessment, 



in which they would argue that their accountant had done their taxes properly, "would 



have placed them in the wholly untenable position of having to take directly contrary 

positions in these two actions."50  The court concluded that "[t]o require a party to assert 



these  two  legally  inconsistent  positions  in  order  to  maintain  a  cause  of  action  for 

professional malpractice is illogical and unjustified."51  I agree with the logic of the 



Florida Supreme Court and would extend it to the issue of equitable tolling in this case. 



                 The fact that Great Divide and Cascade, not Christianson, initiated the 



declaratory judgment actions to litigate the scope of coverage seems of little consequence 



to the analysis of equitable tolling in this case.  Christianson was actively litigating the 



question  of  coverage  in  both  declaratory  judgment  actions,  and  if  Christianson  had 



prevailed in either action, his subsequent suit against CHI would have been unnecessary. 



He therefore had multiple legal remedies available to him regardless of which party filed 



the complaint in those cases.  I conclude that the equities in this case require the statute 



        48(...continued) 



1990); United States Nat'l Bank of Oregon v. Davies, 548 P.2d 966, 970 (Or. 1976); 

Hughes v. Mahaney & Higgens , 821 S.W.2d 154, 157 (Tex. 1991). 



        49      565 So. 2d at 1326.  



        50      Id. 



        51      Id. 



                                                 -56-                                              6868 


----------------------- Page 57-----------------------

of limitations to be tolled until the resolution of the lawsuit against Christianson and the 



resolution of the declaratory judgment actions with Christianson's insurers. 



                2.      The other conditions necessary to toll the statute of limitations 

                        were satisfied in this case. 



                Our well-established equitable tolling doctrine requires that, in addition to 



establishing the proper equities of the case, three conditions must be met before a statute 



of limitations may be tolled:  "(1) pursuit of the initial remedy gives defendant notice of 



plaintiff's claim, (2) defendant's ability to gather evidence is not prejudiced by the delay, 

and (3) plaintiff acted reasonably and in good faith."52  In Brannon , we concluded that 



the first two conditions were satisfied because tender of the defense to the insurance 



company gave them notice of a potential claim for coverage, and the insurance company 

would  not  be  prejudiced  while  the  underlying  suit  was  resolved.53    We  held  that 



"[w]hether an insured has acted reasonably and in good faith is a question of fact for the 

superior court to determine on a case-by-case basis."54 



                It appears that these conditions were similarly satisfied in this case as a 

matter of law.55  At a minimum, the case should be remanded to the superior court for 



additional  findings.    In  my  view,  CHI  was  on  notice  of  Christianson's  potential 



malpractice claim because CHI was informed on several occasions of the suit against 



Christianson and the potential gap in his insurance coverage.  When Christianson was 



        52      Dayhoff v. Temsco Helicopters, Inc. , 772 P.2d 1085, 1087 (Alaska 1989). 



        53      Brannon v. Continental Cas. Co. , 137 P.3d 280, 286 (Alaska 2006). 



        54      Id. 



        55      See Beegan v. State, Dep't of Transp. & Pub. Facilities , 195 P.3d 134, 141- 



42 (Alaska 2008) (holding that the requirements for equitable tolling were satisfied as 

a matter of law); Solomon v. Interior Reg'l Hous. Auth., 140 P.3d 882, 885 (Alaska 

2006) (same). 



                                                 -57-                                              6868 


----------------------- Page 58-----------------------

sued, he filed notice of the lawsuit with CHI, and it was CHI who tendered the defense 



to Great Divide.  In November 2006 Mike Dennis, Christianson's insurance broker and 



an  agent  of  CHI,  gave  a  deposition  in  which  he  was  informed  of  the  suit  against 



Christianson  and  reviewed  Christianson's  insurance  policy.    And  in  July  2007 



Christianson tendered his defense to CHI and informed CHI of his intent to take legal 



action should a gap in coverage be established through the declaratory judgment action 



against Cascade National.  CHI therefore had notice of a potential malpractice suit. 



               And CHI was not prejudiced by any delay.  Once CHI was on notice of its 

potential liability, it had the ability and motivation to gather evidence to defend itself.56 



There also has been no suggestion that Christianson was acting in bad faith by waiting 



until  after  the  resolution  of  the  underlying  Jones  suit  and  the  declaratory  judgment 



actions with Great Divide and Cascade National to file a malpractice claim. 

               Citing Gudenau & Co., Inc. v. Sweeney Insurance, Inc.,57  the court suggests 



that  equitable  tolling  is  inappropriate  in  this  case  because  "Christianson  did  not 

previously  pursue  a  claim  against  CHI  in  any  forum."58    In  Gudenau,  we  held  that 



"[i]nvariably, the statute of limitations is tolled only for those who initially pursue their 

rights in a judicial or quasi-judicial governmental forum."59  But we did not determine 



that  the  initial  action  must  be  against  the  same  party.    Nor  was  there  any  such 



requirement in Brannon .  There we held that Brannon's claim against the insurer was 



        56     See Brannon, 137 P.3d at 286 (holding that an insurance company that was 



sued for failure to defend was not prejudiced by tolling the statute of limitations until the 

end of the underlying suit because once the defense was tendered the insurance company 

had "the ability and motivation to gather evidence"). 



        57     736 P.2d 763 (Alaska 1987). 



        58     Slip Op. at 35. 



        59     Gudenau & Co., Inc., 736 P.2d at 768. 



                                              -58-                                           6868 


----------------------- Page 59-----------------------

tolled pending resolution of the underlying bankruptcy proceedings against a different 

party.60  Indeed, our holding in that case was based on the judgment that it would be 



unjust to force the plaintiff to litigate with his insurance company while defending the 

underlying suit.61  Therefore, a requirement that the statute of limitations may be tolled 



only pending resolution of claims against the same party conflicts with our holding in 



Brannon .  



III.    CONCLUSION 



               In  my  view,  it  was  error  to  conclude  that  the  statute  of  limitations  on 



Christianson's malpractice claim started to run on September 24, 2004.  Christianson had 



not yet suffered a definite injury, and so an essential element of his claim had not yet 



accrued.  I also believe that the statute of limitations in this case should have been tolled 



until  the  resolution  of  Christianson's  underlying  litigation.    I  therefore  respectfully 



dissent. 



        60     Brannon , 137 P.3d at 287.  



        61     Id. at 286. 



                                               -59-                                            6868 

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