Opinion ID: 2590373
Heading Depth: 3
Heading Rank: 6

Heading: It Was Error To Impose Joint and Several Liability.

Text: The trial court first imposed joint and several liability, and then changed its damages theory to allocation of fault when it no longer had jurisdiction over this case. Although the trial court was correct that it should allocate fault rather than impose joint and several liability, it also committed clear error in its allocation of fault. At first the trial court found Mitch liable for the approximately $104,000 he stole from Alkan, and made Martha jointly and severably liable for $33,457 of that amount. That number represented the $30,000 that Mitch expected to get out of the sale of the house and the $3,457 for Martha's health insurance. Martha appealed, but also subsequently objected to joint and several liability in the superior court. The superior court then changed its damages theory, and instead made Martha twenty-five percent liable for the full $104,000 Mitch stole ($29,872.75). When Martha filed her notice of appeal, the trial court lost jurisdiction over the matter. Alaska Appellate Rule 203 gives supervision and control of the proceedings to the appellate court from the filing of the notice of appeal. Absent an express remand order, the superior court cannot then modify any matters directly or necessarily involved in the matter under review, although the superior court retains jurisdiction over collateral matters. [37] We proceed to analyze the superior court's alternative damages award, however, to provide guidance to the court on remand. As the trial court ultimately concluded, Alaska no longer uses joint and several liability in tort cases like this one. [38] Thus, the first damages award was erroneous. The trial court correctly concluded that it should allocate damages between those at fault. However, the trial court overlooked two legal requirements in allocating damages. First, it failed to consider the factors required by statute when calculating the percentage of damages allocated to Martha. Second, it found Martha partially liable for the full amount Mitch stole, when its findings support liability for Martha only as to her health insurance and her fraudulent affidavit. Alaska Statute 09.17.080 requires a court allocating damages to consider both the nature of the conduct of each person at fault, and the extent of the causal relation between the conduct and the damages claimed. There is no indication in the record that the trial court considered these factors. In fact, there is no indication at all how the trial court arrived at the twenty-five percent figure. On remand the trial court must consider those factors. Next, the trial court allocated fault to Martha for the full amount that Mitch stole, although Alkan never alleged, and the court never found, that Martha was involved in Mitch's embezzlement other than the insurance and the funds that Mitch hid in the house. [39] A trial court can allocate fault only in actions involving the fault of more than one person. [40] The only matters the trial court found that involved the fault of both Mitch and Martha were the insurance and the hidden house funds. As to these matters, the court must allocate fault in assessing damages. Thus, the trial court should have allocated fault to Martha only on the damages related to the health insurance and the house, not the entire amount Mitch stole. Martha argues, for the first time on appeal, that the trial court should also have allocated fault to Alkan when it allocated fault between Mitch and Martha. We review arguments not made in the trial court for plain error. [41] Plain error exists where an obvious mistake has been made which creates a high likelihood that injustice has resulted. [42] To determine whether there was plain error, we start with consideration of the governing statute, AS 09.17.080: In all actions involving fault of more than one person ... the court, unless otherwise agreed by all parties, shall instruct the jury to answer special interrogatories or, if there is no jury, shall make findings indicating... (2) the percentage of the total fault that is allocated to each claimant [and] defendant.... In Domke v. Alyeska Pipeline Service Co., we discussed allocation of fault where, as is the case here, the cause of action has a justification element. [43] In that case, the cause of action was tortious interference with a third party's contract, which requires the interference be unjustified. [44] We reasoned that if the plaintiff had been at fault, the defendant's interference in the contract would have been justified. [45] The definition of the cause of action does not allow a finding that the harm [the defendant] caused was partly justified. [46] Similarly, a successful fraudulent misrepresentation claim requires the plaintiff show it was justified in relying on the defendants' misrepresentations. If Alkan were at fault in trusting Mitch and Martha, then it would not have been justified in relying on their fraudulent misrepresentations. Thus, when the trial court found Martha liable for fraud, it impliedly found that Alkan was not at fault in relying on Martha's misrepresentations. Therefore, we conclude that in this case the trial court did not plainly err in failing to allocate damages to the plaintiff as well as the defendants.