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v. Silvers (4/14/00) sp-5258
Silvers v. Silvers (4/14/00) sp-5258
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.
THE SUPREME COURT OF THE STATE OF ALASKA
MICHAEL G. SILVERS, )
) Supreme Court No. S-8631
Appellant, )
) Superior Court No.
v. ) 3PA-96-627 CI
)
IRENE L. SILVERS, )
) O P I N I O N
Appellee. )
______________________________) [No. 5258 - April 14, 2000]
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Palmer,
Eric Smith, Judge.
Appearances: Danny W. Burton, Wasilla, for
Appellant. William K. Walker, Anchorage, for Appellee.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.
MATTHEWS, Chief Justice.
I. INTRODUCTION
Michael Silvers appeals the superior court's entry of
judgment against him for both conversion of personal property and
liability on a series of loans from his mother, Irene Silvers. We
reverse and remand.
II. FACTS AND PROCEEDINGS
Irene L. Silvers advanced money to her son, Michael G.
Silvers, several times between March 7, 1983, and October 22, 1991.
Michael repaid Irene only partially for these advances.
Over time, Irene and her domestic companion, Garfield
Funnell, also stored several items of personal property at
Michael's Wasilla residence. Funnell died intestate in 1993.
Michael eventually sold his house and directed Irene to remove her
possessions from the premises. Under Michael's observation, Irene
retrieved various items. A subsequent inventory of the personal
property revealed that numerous items belonging to Irene had
disappeared.
On August 9, 1996, Irene recorded a notice of right to
lien against Michael's Wasilla residence to secure repayment of her
loans. In response, Michael filed a complaint against Irene on
August 19, 1996, seeking to expunge the notice of lien. Irene's
answer asserted counterclaims for repayment of the advanced funds
and conversion of her missing personal property. The superior court
granted a preliminary injunction expunging Irene's claim of lien,
leaving only her counterclaims at issue for trial.
At trial, Irene appeared pro se. Michael, who had
relocated to Washington state, did not appear.
The superior court issued its findings of fact and
conclusions of law, ruling in relevant part that (1) Irene's
monetary advancements to Michael constituted an open-ended "family
loan," under which Michael had assumed a good faith obligation to
repay the funds when able; (2) due to the nature and context of the
loan, the applicable statute of limitations did not bar Irene's
claim for repayment; and (3) Michael had converted several items
belonging to Irene. The court established Michael's combined
liability for both the loan and the conversion at $27,410.01 and
entered judgment for Irene in this amount.
Michael moved for relief from judgment or alternatively
to amend judgment. The court amended its findings and conclusions
to clarify its previous ruling, but ultimately denied Michael's
motion. Michael appeals.
III. JURISDICTION
Irene challenges the court's jurisdiction to hear this
appeal because the appeal was not filed within thirty days of
judgment. [Fn. 1] Irene contends that Michael's motion for relief
from judgment was filed under Alaska Civil Rule 60(b) and therefore
did not terminate the time for filing appeals in civil cases. But
we conclude that Michael's motion was also a Civil Rule 59(f)
motion to alter or amend a judgment, thus terminating the time for
appeal. [Fn. 2] Accordingly, Michael's notice of appeal, filed
within thirty days of the superior court's ruling on the motion,
was timely.
IV. DISCUSSION
A. Did the Superior Court Abuse Its Discretion by Refusing
to Allow Michael and His Witness to Appear Telephonically?
We first consider whether the superior court committed
reversible error by rejecting Michael's request to appear at trial
telephonically. We review the trial court's ruling on this
question for abuse of discretion. [Fn. 3] Reversal is warranted
only if we are left with a definite and firm conviction, after
reviewing the entire record, that a mistake has been made. [Fn. 4]
Michael had relocated to Washington state before the
trial began. He submitted a motion under Civil Rule 99 requesting
permission for himself and his witness Alice Beals to testify
telephonically at trial. The superior court had previously granted
Irene's request to permit the telephonic appearance of her
witnesses, and Irene herself agreed to permit Michael's telephonic
testimony. The superior court denied Michael's motion, however,
explaining that evaluating Michael's credibility required in-court
observation. Michael elected not to attend the trial and thus did
not participate personally in the proceedings below. [Fn. 5] He
now argues that the court abused its discretion by rejecting his
request to appear telephonically.
The visual demeanor of a witness can be a factor in
evaluating the witness's credibility. But, in a variety of
circumstances, the court will dispense with visual demeanor. For
example, under exceptions to the hearsay rule, the court will admit
a declarant's statement without the declarant's presence, making do
without any visual demeanor. [Fn. 6] Similarly, under Civil Rule
32, a witness's deposition can be introduced in court.
Particularly relevant here is Civil Rule 32(a)(3)(B), which
provides that the deposition of a witness -- including a party
witness -- may be used for any purpose at trial if the witness is
more than 100 miles from the place of trial or is out of state.
Thus, Michael could have presented his testimony by deposition
(without visual demeanor) and the superior court would have had no
discretion to exclude Michael's deposition testimony. [Fn. 7]
Civil Rule 99 provides that "[t]he court may allow one or
more parties . . . to participate telephonically in any hearing or
deposition for good cause and in the absence of substantial
prejudice to opposing parties." [Fn. 8] Although the rule allows
the trial court some discretion, in Carvalho v. Carvalho, [Fn. 9]
we voiced our preference for a liberal application of Rule 99.
Carvalho involved a mother's collection action for child support
arrearage. [Fn. 10] The trial court denied the father's request to
appear telephonically at an evidentiary hearing and entered
judgment for the mother without accepting any evidence from the
father. [Fn. 11] We reversed the trial court's ruling, holding
that the court's refusal to permit the father to testify or present
other evidence regarding contested facts had violated his due
process right to a meaningful opportunity to be heard. [Fn. 12] We
thus concluded that, because of both the father's availability to
testify and the desirability of allowing him to present his
defenses, the trial court had abused its discretion by failing to
permit his telephonic testimony. [Fn. 13]
Similarly, in the present case, we believe that the
superior court should have allowed Michael's requested telephonic
appearance. Michael was residing in Washington state at the time
of trial and would have incurred significant expense in returning
to Alaska to testify. Since the circumstances justified presenting
Michael's testimony by deposition without visual demeanor, and
since Irene agreed to his participation by telephone, it was an
abuse of discretion to deny Michael's request for telephonic
appearance. The trial court could also have advised Michael that
if there were credibility issues for which his demeanor was truly
critical, those issues might be resolved against him.
For these reasons, we remand this case for a new trial in
which Michael can participate by telephone if he so chooses.
We also address the parties' other contentions since, in
light of our remand, the superior court may again face them.
B. Could Irene Recover on the Loans?
Irene advanced funds to Michael periodically from March
1983 until October 1991. She filed her counterclaim against
Michael for repayment of the loans on September 9, 1996. Michael
argues that the loan contract failed for indefiniteness and that
the applicable six-year statute of limitations [Fn. 14] barred
Irene's recovery of those funds advanced before September 1990. We
address each of these contentions in turn.
1. Does the contract fail for indefiniteness?
Michael first argues that his contract with Irene was
impermissibly indefinite. He contends that the absence of a
specific time of repayment term in Irene's loan agreement caused
the entire contract to fail. Because contract interpretation
involves questions of law, we review this issue de novo. [Fn. 15]
Michael's argument lacks merit. A pledge to repay money
when the borrower becomes financially able merely represents a
conditional promise and is legally enforceable upon satisfaction of
the condition. [Fn. 16] Such contracts do not fail for
indefiniteness. [Fn. 17] Accordingly, the limitations period began
to run only after Michael actually achieved the ability to repay
Irene. [Fn. 18]
2. Does the statute of limitations bar Irene's claims?
In its findings and conclusions, the superior court
addressed the statute of limitations issue as follows:
A contract was entered into between the
parties in the context of a family loan, and as such, should be
interpreted within the circumstances of a loan from a mother to a
son.
It was expected and anticipated by the
Defendant and Plaintiff understood that he was to repay the loan
when he was in a position to do so; therefore, the statute of
limitations did not apply, and the parties were expecting to be
operating in good faith.
The superior court also found that "[e]vidence was
presented during trial that Plaintiff did not repay said loan even
though he has been in a position to do so, throughout the period of
the loans."
Michael subsequently moved for relief from judgment or
alternatively to amend judgment, arguing that the superior court
erred by refusing to apply the statute of limitations to Irene's
claim. In response, the court explained its previous finding:
[L]oans must be interpreted in their full
context. The context here was a set of loans from mother to son,
with an understanding that the loans would be repaid when the son
was able to do so. The "due date" therefore was not a set date,
but it also was not undefined: the loans were due when the son
could pay them, which is a time which can be determined
objectively. As such, the statute of limitations would only begin
to run when the son in fact was able to pay back the loans. No
testimony was presented that the son was able or had been able to
pay back the loans on a certain date. Hence, the statute of
limitations had not begun to run on the loans, and so the time
limits imposed by the statute did not apply.
Michael argues that the superior court's ruling was
internally inconsistent. Emphasizing the "payable when able"
nature of his loan from Irene, Michael contends that the court's
finding that he had been able to repay the debt "throughout the
period of the loans" indicates that his status in this regard
should have triggered the statute of limitations. The superior
court's determination concerning Michael's ability to repay the
loan involves a question of fact which we will reverse only if
clearly erroneous. [Fn. 19]
We find merit in Michael's argument. The superior court
found that "[e]vidence was presented during trial that Plaintiff
did not repay said loan even though he has been in a position to do
so, throughout the period of the loans." The court's ruling is
self-contradictory in this regard. The statute of limitations runs
from the point at which Michael was able to repay the loans. But
exactly when Michael attained the ability to repay Irene remains
unclear from the record. Therefore on remand, the superior court
should determine when Michael attained the ability to repay these
loans and apply the statute of limitations from that date.
C.
Can Irene Recover the Full Value of the Converted
Property That She Jointly Owned with Garfield Funnell?
Many of the items of personal property at issue below
belonged at least in part to Garfield Funnell, Irene's now-deceased
domestic companion. Funnell died intestate before Irene asserted
her conversion claim against Michael. The superior court found
that Funnell and Irene either jointly acquired or intended to share
ownership of the various items stored at Michael's residence.
Characterizing Irene and Funnell as co-tenants of these
possessions, the court permitted Irene to recover the property's
full value in her conversion suit against Michael.
Michael challenges this ruling, arguing that Funnell's
heirs -- as successor co-tenants in the property -- were
indispensable parties to the conversion action and that Irene's
failure to join them should bar her claims. He asserts that he
potentially faces double liability from Funnell's heirs. This
issue involves a question of law to which we apply our independent
judgment. [Fn. 20]
"As a general rule, an owner of property must be joined
as an indispensable party in any action that may adversely affect
her interest in the property." [Fn. 21] Applying this principle to
co-tenants depends upon the factual context of the case. In B.B.P.
Corp. v. Carroll, we noted that "[t]enants in common are not always
indispensable parties to litigation involving the property,
particularly where the judgment will not directly affect the
interests of the co-tenant." [Fn. 22] But "co-tenants should be
joined where the right of any one tenant is not distinct and the
relief sought is interwoven with the rights of the other tenants."
[Fn. 23]
The Montana Supreme Court's reasoning in Dew v. Dower
illustrates the potential unfairness to both defendants and absent
co-tenants that could result if joinder was not required in actions
to recover jointly owned, indivisible personal property:
Adopting a general rule that allows one
co-tenant to sue for all of the damages could easily infringe on
the rights of another co-tenant, thus creating due process
problems. In addition, co-tenants are not generally agents of each
other and do not have the privity necessary for application of the
doctrine of res judicata. Therefore, a rule allowing one co-tenant
to sue in a personal action for the entire amount of tort damages
for injury arising out of the tenancy could expose defendants to
multiple actions.[ [Fn. 24]]
But where a party fails to join a necessary party, the appropriate
remedy is not dismissal, but rather joinder of the necessary party.
[Fn. 25] Additionally, Irene should not be precluded from
recovering her share of the value of the property. Under the terms
of our Carroll test, Irene's one-half share is distinct from
Funnell's and the relief Irene seeks is not necessarily interwoven
with the relief which Funnell's heirs might seek. Michael will
suffer no double liability since he will, at most, face liability
for each half only once.
Therefore, on remand, Irene has two options. She can
join Funnell's estate as a party to this litigation or she can seek
recovery for only her share.
D. Does Substantial Evidence Support the Finding That
Michael Converted Irene's Property?
Michael also contends that the superior court erred in
ruling that he had converted any of Irene's personal property. He
argues that the record lacks any evidence of this purported
conversion.
We review a trial court's findings of fact for clear
error. [Fn. 26] Our review is particularly deferential in cases
where most of the trial evidence consists of oral testimony. [Fn.
27] We view all of the evidence in the light most favorable to
Irene as the prevailing party. [Fn. 28]
"Conversion is an intentional exercise of dominion or
control over a chattel which so seriously interferes with the right
of another to control it that the actor may justly be required to
pay the other the full value of the chattel." [Fn. 29] To
establish a claim for conversion, the plaintiff must prove (1) that
she had a possessory interest in the property; (2) that the
defendant interfered with the plaintiff's right to possess the
property; (3) that the defendant intended to interfere with
plaintiff's possession; and (4) that the defendant's act was the
legal cause of the plaintiff's loss of the property. [Fn. 30]
Where the plaintiff voluntarily places her property with the
defendant, the "defendant ordinarily is not required to do more
than permit the plaintiff to come and get the chattel." [Fn. 31]
But Irene may also recover under a theory of negligence.
[Fn. 32] As with any negligence case, the plaintiff must establish
(1) a duty of care; (2) breach of the duty; (3) causation; and (4)
harm. [Fn. 33] Where the plaintiff transfers only the possessory
interest in her property to the defendant, a bailment is created.
[Fn. 34] The bailment creates a duty of care. Therefore, the
bailee is liable for any loss caused by his failure to exercise
reasonable care. [Fn. 35]
The plaintiff can establish a prima facie case of
negligent bailment, or conversion in some jurisdictions, by proving
that she delivered the property to the care of the defendant and
that the defendant refused a timely request to return the property.
Once the plaintiff has established a prima facie case, the
defendant bears the burden of explaining his refusal to return the
property, [Fn. 36] since the bailee is in the best position to
explain the loss of the property. [Fn. 37] This standard was
expressed as follows by the New Jersey appellate court in Lembaga
Enterprises, Inc. v. Cace Trucking & Warehouse, Inc.:
in a conversion action, the bailor has the
burden to prove that the bailee has unlawfully converted the goods.
When goods are delivered to a bailee in good condition and then are
lost or damaged, the law presumes a conversion and casts upon the
bailee the burden of going forward with the evidence to show that
the loss did not occur through his negligence or if he cannot
affirmatively do this, that he exercised a degree of care
sufficient to rebut the presumption of it. Proof of loss of or
injury to the goods while in the custody of the bailee establishes
a prima facie case against the bailee to put him upon his defense.
This is so even though the burden of proof of the cause of action
rests with the plaintiff and never shifts from him.[ [Fn. 38]]
Courts are divided as to whether delivery, demand, and
refusal establish a prima facie case of intentional conversion, or
merely negligence. [Fn. 39] But this distinction is irrelevant for
purposes of the present case. The remedy Irene seeks --
compensatory damages -- is available under either theory. [Fn. 40]
The trial court found that Irene left her belongings with
Michael and that Michael failed to return some items. This
evidence established a prima facie right to recovery for Irene,
placing upon Michael the burden of explaining the loss. Michael
failed to offer an explanation. But, as we have held above,
Michael did not have a fair opportunity to make an explanation
because he was not permitted to appear telephonically.
V. CONCLUSION
Because the superior court abused its discretion in
refusing to permit Michael to appear telephonically at trial, the
judgment is REVERSED. This case is REMANDED for further
proceedings consistent with this opinion.
FOOTNOTES
Footnote 1:
See Alaska R. App. P. 204(a)(1) ("The notice of appeal shall
be filed within 30 days from the date shown in the clerk's
certificate of distribution on the judgment appealed
from . . . .").
Footnote 2:
See Alaska R. App. P. 204(a)(3)[c]. Michael's motion was
captioned "Motion for Relief from Judgment or Alternatively to
Amend Judgment [Civil Rule 60(b)(1); Rule 59(f)]" (brackets in
original).
Footnote 3:
See Gregg v. Gregg, 776 P.2d 1041, 1044 (Alaska 1989)
(reviewing for abuse of discretion trial court's allowance of
party's telephonic testimony over opposing party's objection).
Footnote 4:
See Wright v. Shorten, 964 P.2d 441, 443 (Alaska 1998).
Footnote 5:
Michael was, however, represented by counsel at trial.
Footnote 6:
See Alaska R. Evid. 803, 804.
Footnote 7:
See Buster v. Gale 866 P.2d 837, 843 (Alaska 1994)
(holding that superior court erred by excluding deposition of a
witness living more than 100 miles from place of trial).
Footnote 8:
Alaska R. Civ. P. 99(a).
Footnote 9:
838 P.2d 259 (Alaska 1992).
Footnote 10:
Id. at 259-60.
Footnote 11:
See id. at 260-63.
Footnote 12:
See id. at 263.
Footnote 13:
See id. at 262.
Footnote 14:
Former AS 09.10.050 established a six-year statute of
limitations for contract actions. The statute was repealed in
1997, and AS 09.10.053 now provides for a three-year limitations
period for contract cases. Because AS 09.10.053 applies only to
causes of action which accrued after August 7, 1997, Irene's claims
are governed by the former version of AS 09.10.050. See Ch. 26,
sec.sec.
3-4, 55, SLA 1997.
Footnote 15:
See State v. Arbuckle, 941 P.2d 181, 184 (Alaska 1997).
Footnote 16:
See, e.g., Smith v. Hergett (In re Clover's Estate), 237 P.2d
391, 395 (Kan. 1951); Annotation, When Statute of Limitations
Commences to Run Against Promise to Pay Debt: "When Able," "When
Convenient," or the Like, 28 A.L.R.2d 786, 788 (1953).
Footnote 17:
See, e.g., Clover's Estate, 237 P.2d at 395; Guerin v.
Cassidy, 119 A.2d 780, 783 (N.J. Super. Ch. Div. 1955).
Footnote 18:
See, e.g., Estate of Page v. Litzenburg, 865 P.2d 128, 134-35
(Ariz. App. 1993); Clover's Estate, 237 P.2d at 395; Guerin, 119
A.2d at 783; Pitts v. Wetzel, 498 S.W.2d 27, 28-29 (Tex. Civ. App.
1973); see also In re Estate of Buckingham, 224 N.E.2d 383, 385
(Ohio App. 1967) (characterizing this approach as the majority
view). We decline Michael's invitation to adopt the minority
approach under which the statute of limitations for "payable when
able" contracts begins to run within a "reasonable time." See
Ricker v. Ricker, 270 P.2d 150, 153 (Or. 1954).
Footnote 19:
See Alaska R. Civ. P. 52(a); Walton v. Ramos Aasand & Co.,
963 P.2d 1042, 1045 n.2 (Alaska 1998).
Footnote 20:
See Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).
Footnote 21:
B.B.P. Corp. v. Carroll, 760 P.2d 519, 525 (Alaska 1988).
Footnote 22:
Id. (citing 3A James Wm. Moore et al., Moore's Federal
Practice 19.09[2] (2d ed. 1987)).
Footnote 23:
Id. at 525-26 (citations and internal quotations omitted).
Footnote 24:
852 P.2d 549, 557 (Mont. 1993) (citations omitted).
Footnote 25:
See Alaska R. Civ. P. 19(a) ("If the person has not been
joined, the court shall order that the person be made a party.");
Carroll, 760 P.2d at 526 (appropriate remedy for failure to join
indispensable co-tenants was not dismissal, but rather joinder of
the co-tenants).
Footnote 26:
See Walton, 963 P.2d at 1045 n.2.
Footnote 27:
See Martens v. Metzgar,
