Opinion ID: 1152368
Heading Depth: 3
Heading Rank: 1

Heading: Affirmative Defenses Are Specifically Pleaded or Waived

Text: Alaska Civil Rule 8(c) requires that certain specific defenses, as well as any other matter constituting an avoidance or affirmative defense be specifically set forth in the pleadings. The purpose of the pleading requirements of Rule 8(c) is to give the plaintiff sufficient notice of her opponent's defenses so that she may enable herself to adequately prepare for trial. Morrow v. New Moon Homes, Inc., 548 P.2d 279, 295 (Alaska 1976); see also Blonder-Tongue Labs. v. University of Ill. Found., 402 U.S. 313, 350, 91 S.Ct. 1434, 1453, 28 L.Ed.2d 788 (1971). Failure to so plead can result in waiver of the defense. Morrow, 548 P.2d at 295; Rollins v. Leibold, 512 P.2d 937, 940 (Alaska 1973); see generally 5 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1278, at 477 (1990) (analyzing parallel federal rule). In its brief, Northstore concedes that the defenses of bona fide purchaser and affirmance, though not specifically listed in Rule 8(c), are affirmative defenses. Therefore, the question presented is not whether the basic pleading requirements of Rule 8(c) apply, but whether Northstore satisfied the rule's conditions.
Northstore's February 1993 answer, under the heading Affirmative Defenses, stated: 1. Plaintiffs are barred by estoppel. 2. Plaintiffs are barred by laches. 3. Plaintiffs are barred by license. 4. Plaintiffs are barred by res judicata. 5. Plaintiffs are barred by accord and satisfaction. 6. Plaintiffs are barred by statute of limitations. 7. Defendant reserves the right to assert additional defenses as may be determined during the course of discovery. The Gambles contend that Northstore first raised the additional affirmative defenses of bona fide purchaser and affirmance in its April 1994 motion for summary judgment. Northstore argues that despite its failure to specifically list the two defenses in its answer, the trial court correctly concluded that the answer provided the Gambles with adequate notice. Northstore first asserts that the essential aspects of the bona fide purchaser defense were set forth in its answer. Northstore, explains that in response to the Gambles' factual allegation in the complaint that NORTHSTORE ... purchased their property from [the] Cruikshank[s], Northstore answered: Deny. Defendant bought the property from Marathon Company.... (emphasis added). In addition, in response to the Gambles' allegation that the easement agreement was unilaterally altered and changed, and then executed by the Cruikshanks, Northstore responded: Defendant is without knowledge or information sufficient to form a belief as to the truth of the ... averment, and therefore denies it. From these statements, Northstore concludes that its answer alleged that it was an innocent purchaser for value acting in good faith, i.e., a bona fide purchaser. Northstore also points to specific language in the answer that it considers sufficient to have raised the defense of affirmance. Northstore contends that affirmance is a species of estoppel, a defense which was specifically set forth in the answer. Northstore further argues that the answer affirmatively raised the defense of res judicata, a theory which can have no other reference than to the Gambles' prior suit against its title insurer. Northstore contends that under Alaska's notice pleading rules, the above references to each defense should be considered sufficient. We have stated in the past that pleadings are to be liberally construed, with the goal being to achieve substantial justice. Knight v. American Guard & Alert, Inc., 714 P.2d 788, 791 (Alaska 1986); Martin v. Mears, 602 P.2d 421, 427 (Alaska 1979); Schaible v. Fairbanks Medical & Surgical Clinic, Inc., 531 P.2d 1252, 1255-56 (Alaska 1975). The standards governing the pleading of affirmative defenses under Rule 8(c) are no different than the liberal approach taken for all pleadings. See Alaska R.Civ.P. 8(e) (Each averment of a pleading shall be simple, concise and direct. No technical forms of pleading or motions are required.); Wright & Miller, supra, § 1274, at 455. An affirmative defense is adequately pleaded if it provides the opponent fair notice of the nature of the defense. See Rollins, 512 P.2d at 941; c.f. Lumbermens Mut. Casualty Co. v. Continental Casualty Co., 387 P.2d 104, 111 (Alaska 1963) (observing that [g]eneral pleading of defenses is permissible under theory that pretrial procedure will result in full development of the issues). Although courts will give the pleadings a liberal construction, it is important to note that such liberal construction does not permit the pleader to unreasonably catch an unwary litigant; and such liberality of construction must be circumscribed by the plain requirements of the rules. Lopez v. United States Fidelity & Guar. Co., 15 Alaska 633, 637, 18 F.R.D. 59 (1955). Because this court is in virtually the same position as the trial court in its ability to assess the adequacy of the pleadings, we review Northstore's pleadings de novo. Guin v. Ha, 591 P.2d 1281, 1284 n. 6 (Alaska 1979). Turning first to Northstore's affirmance defense, [3] the Gambles argue that the specifically-pled defenses of estoppel and res judicata have prescribed meanings that are clearly not synonymous with affirmance. We agree. However, we observe that in practice, the rarely-used doctrine of affirmance is not clearly understood and is often closely associated with estoppel and res judicata, as well as the related doctrines of ratification, election of remedies, and acceptance of benefits. See, e.g., 28 Am.Jur.2d Estoppel and Waiver § 59 (1966) (Estoppel is frequently based upon the acceptance and retention, by one having knowledge or notice of the facts, of benefits from a transaction, contract, [or] instrument ... which he might have rejected or contested.); P.V. Smith, Annotation, Doctrine of Election of Remedies as Applicable Where Remedies Are Pursued Against Different Persons, 116 A.L.R. 601, 601-02 (1938) (The doctrine of election of remedies is closely related to, and sometimes not distinguished from, other principles of law and equity, such as ... res judicata, ... ratification, and estoppel. In fact, the doctrine of election of remedies has been frequently regarded as an application of the law of estoppel.); but see 28 Am.Jur.2d Estoppel and Waiver § 31 (1966) (While both acquiescence and ratification are frequently spoken of as estoppel, strictly speaking neither can be more than a part of an estoppel. An estoppel is a legal consequence....). We believe that although the parties agree that affirmance constitutes an affirmative defense for the purpose of Rule 8(c), the fair notice requirements of Rule 8 are not so stringent as to require Northstore to hone the details of its defense at such an early stage of the litigation. See 6 James W. Moore et. al., Moore's Federal Practice § 56.02[2], at 24 (2d ed. 1995) (Pleadings need do little more than indicate generally the type of litigation that is involved so that both plaintiff and defendant may have fair notice of the claim and its defense.). Northstore specifically pleaded defenses which, although not synonymous with affirmance, invoke some of the same concerns in more general terms. We deem the pleadings at issue here sufficient to raise the defense of affirmance. Any difficulty the Gambles experienced in understanding the nature of this defense could have been remedied by requesting, through discovery, a more particular basis for the defenses which were specifically pled. We are less persuaded by the trial court's reading of Northstore's pleadings with regard to the bona fide purchaser defense. Unlike the affirmance defense, none of the affirmative defenses listed in Northstore's answer even hint at the defense of innocent purchaser. Moreover, the two factual averments that Northstore identifies from its answer as embodying the essential aspects of the theory fall far short of the simple, concise and direct approach required by Rule 8(e). The first assertion, that Northstore bought the property, is obscured in a provision which essentially clarifies the identity of the vendor of Northstore's lot. The second assertion, in which Northstore stated that it was without knowledge or information sufficient to form a belief as to the truth of whether the easement was unilaterally altered, cannot reasonably be equated with an averment that Northstore acquired the property innocently and in good faith. In so pleading, Northstore employed the practice described in Civil Rule 8(b), which allows a party to respond to an averment by stating that it lacks sufficient information to affirm or deny the allegation; the rule provides that such a statement shall be treated as a denial. Alaska R.Civ.P. 8(b). The provision allows a party who either lacks knowledge of the substance of the allegation or, for whatever reason, is unable to ascertain whether the allegation is true at that time to deny in good faith the adverse party's assertion. 2A James W. Moore et. al., supra, § 8.22, at 148. Such a pleading does not convey to one's opponent that at a specific point in the past, one lacked, in good faith, any knowledge of the facts asserted. A Rule 8(b) denial for lack of knowledge is simply not the sort of affirmative pleading which Rule 8(c) minimally demands. Therefore, we initially conclude that although Northstore's answer gave the Gambles fair notice of the affirmance defense, it did not sufficiently indicate Northstore's intent to rely upon the defense of bona fide purchaser.
When a litigant fails to comply with Rule 8(c) by failing to plead in the answer the affirmative defenses which it intends to invoke, exceptions exist which can allow the error to be cured and prevent waiver. Because we ultimately remand this case for further proceedings, we choose to address here whether, despite its failure to give fair notice of the bona fide purchaser defense in the answer, Northstore nonetheless successfully raised this defense. Alaska follows the widely-used approach which, if undue prejudice would not be visited upon the opposing party, allows a litigant to raise new affirmative defenses at any time through a motion for summary judgment. Blake v. Gilbert, 702 P.2d 631, 639 (Alaska 1985) (affirming trial court's decision to allow reliance on statute of limitations defense first raised in post-answer motion for summary judgment where no prejudice resulted from defendant's delay); see also Camarillo v. McCarthy, 998 F.2d 638, 639 (9th Cir.1993); Healy Tibbitts Constr. Co. v. Insurance Co. of N. Am., 679 F.2d 803, 804 (9th Cir.1982). This practice was born out of the general preference underlying the Civil Rules that decisions be made on the merits rather than on pleading technicalities, and in recognition of the fact that Civil Rule 15 allows for liberal amendment of the pleadings. See 6 James W. Moore et. al., supra, § 56.17[4], at 380. Before this exception to the waiver rule applies, however, we must determine whether Northstore's attempt to rely upon the bona fide purchaser defense through its motion for summary judgment unduly prejudiced the Gambles. The Gambles have continually complained that they were prejudiced by Northstore's delay. The Gambles claim that because they relied upon Northstore's answer, the bona fide purchaser defense was totally unanticipated, and with discovery closed and one month remaining before trial, they had insufficient time and opportunity to prepare a response. Whether a litigant is unduly prejudiced by an opponent's post-answer attempt to obtain summary judgment on the basis of an affirmative defense not set forth in the pleadings is an inquiry invoking virtually the same concerns as a motion to amend the pleadings with leave of court. [4] See Alaska R.Civ.P. 15(a). In Estate of Thompson v. Mercedes-Benz, Inc., 514 P.2d 1269 (Alaska 1973), we reviewed a pre-trial request to amend the complaint, observing that although such relief is to be `freely given,' the court must consider whether the opposing party would be prejudiced. Id. at 1271 (quoting Alaska R.Civ.P. 15(a)). We noted that several factors may bear upon a finding of prejudice, including added expense, a more burdensome and lengthy trial, or if the issues being raised in the amendment are remote from the scope of the original case. Id. In Rutledge v. Alyeska Pipeline Service Co., 727 P.2d 1050 (Alaska 1986), we applied these factors, affirming a trial court's decision to deny a Rule 15(a) motion to amend because the potential for increased expense, burden of a more lengthy trial, and time constraints, brought on by a new claim only tangentially related to [the] initial complaint, would have been too prejudicial to the opposing party. Id. at 1054-55. We reached a different but analogous result in Wright v. Vickaryous, 598 P.2d 490 (Alaska 1979), in which a plaintiff sought to amend the complaint to introduce a new legal theory which was based upon the same conduct as complained of in the initial pleading. Id. at 495. We were unpersuaded by the defendant's allegation of undue surprise because the new theory did not widen the scope of the dispute. Id. Moreover, our opinion specifically advised that the remedy for inadequate time to prepare on a new theory is a continuance, not preventing a trial on the merits of the new theory. Id. at 496. We find the present case to be more akin to Wright than Rutledge and conclude that any hardship experienced by the Gambles does not outweigh Northstore's right to present, one month before trial, the additional defense that it was a bona fide purchaser. Given the general policies that legal disputes are to be decided on the merits and that leave to amend the pleadings is to be freely granted, and considering that the defense of bona fide purchaser is closely related to the facts presented in the complaint, it would be unjust to hold that the defense was waived. [5] Although it may have inconvenienced the Gambles to have been faced with a new defense theory only one month before trial and with discovery virtually over, such hardship was not undue. Under these circumstances, rather than claim waiver, a more appropriate remedy would have been for the Gambles to seek a continuance allowing for additional discovery. We therefore conclude that with regard to both the affirmance and bona fide purchaser theories, the trial court did not err in refusing to find that Northstore waived its defenses.