Opinion ID: 1232145
Heading Depth: 3
Heading Rank: 3

Heading: hagans' misrepresentation claim

Text: Hagans' second claim for relief was added in its First Amended Complaint filed May 11, 1990. The basis of Hagans' claim is that if First National did not in fact assume Seair's obligation to pay Hagans, then First National deceived Hagans into thinking that it had. First National argues that Hagans knew that it was not the bank's attorney, and in the alternative that if Hagans mistakenly believed that First National had assumed the position of Seair it was due to Hagans' own confusion over the distinction between an assumption and an assignment, not due to any misleading on First National's part. First National also asserts that this claim was not brought within the statutory limitations period. Hagans' claim appears to be based alternately on intentional or negligent misrepresentation. The heart of the claim is that First National through its agents intentionally or negligently failed to disclose that the defendant did not intend to be bound by the terms of the contingency contract, and that Hagans could have taken action to protect its own interest in preserving the settlement opportunity had it known in sufficient time that the defendant would deny that it had substituted for Sea Airmotive in the contingency fee contract. To prevail in an action for fraudulent or negligent misrepresentation the plaintiff must prove the existence of either an affirmative misrepresentation or an omission where there is a duty to disclose. Matthews v. Kincaid, 746 P.2d 470, 471 (Alaska 1987). Hagans' argument is that First National failed to disclose that it would not honor the fee arrangement. The duty to disclose arises when facts are concealed or unlikely to be discovered because of the special relationship between the parties, the course of their dealings, or the nature of the fact itself. Matthews, 746 P.2d at 471-72. In this case the very fact that is alleged to have been concealed is the relationship between the parties. There is ample evidence from which one may infer a course of dealing between the parties as attorney and client. This evidence includes the August 29, 1986 letter from Mr. Beard to Husky stating that First National's counteroffer was made after consultations with, and the concurrence of, Mssrs. Hagans and Gibbs; Mr. Hagans' August 27, 1986 letter to Mr. Beard which urged First National to seriously consider Husky's offer and which explained the consequences if the Husky judgment were reversed; and Mr. Gibbs' September 9, 1986 letter to Mr. Beard which strongly urged First National to accept Husky's second offer of settlement. The same evidence which tends to show that First National assumed the position of Seair in the fee arrangement with Hagans also supports Hagans' contention that First National concealed its true relationship with Hagans and thereby induced Hagans to treat First National as a client. It was their entire course of dealings which tends to show that First National assumed the position of Seair, and that arguably led Hagans into believing First National would honor the fee agreement. Therefore, summary judgment on Hagans' second claim for relief was also inappropriate. [2] The superior court dismissed Hagans' claim for punitive damages on the ground that there was no longer any underlying claim for relief to support it. In view of our disposition of the superior court's orders on summary judgment, its dismissal of Hagans' punitive damage claim is vacated.