Opinion ID: 2606174
Heading Depth: 2
Heading Rank: 1

Heading: the business destruction claim

Text: The Borough argues that the superior court abused its discretion in permitting Kandik Construction to join the case as a party plaintiff on the eve of trial, and in failing to instruct the jury on the nature of the claim it asserted. Kandik & Associates initially sought damages against the Borough only for breach of contract. In April 1987, Kandik & Associates filed an amended complaint which included a claim that Kandik & Associates was entitled to recover damages because the Borough's conduct destroyed its ability to continue in business. [8] The Borough moved for summary judgment on the grounds that Kandik & Associates' existence as a joint venture ended by its own terms and not as a result of any misconduct by the Borough, and that Kandik Construction was not a party to the lawsuit. In December 1987, three weeks before trial and more than two months after the final day to amend the pleadings, Kandik Construction moved to join the lawsuit as a party plaintiff. Immediately before voir dire, the superior court added Kandik Construction as a party without requiring it to file any pleadings. The jury was never instructed that Kandik & Associates and Kandik Construction were different entities, nor did the court explain the nature of the claims asserted by each. The Borough contends that the superior court erred in permitting the addition of Kandik Construction on the eve of trial. Kandik & Associates replies that the Borough was aware from the time that the claim was first asserted in April 1987 that Kandik Construction was the real party in interest. Kandik thus reasons that joinder was appropriate pursuant to Civil Rule 17. Civil Rule 17(a) expressly requires that every action be prosecuted in the name of the real party in interest. Alaska R.Civ.P. 17(a). It further provides, however, that no claim should be dismissed for failure to name the real party in interest unless a reasonable time is allowed after objection for ratification, substitution, or joinder of the real party. Id.; Truckweld Equipment Co. v. Swenson Trucking & Excavating, 649 P.2d 234, 239 (Alaska 1982). Joinder of the real party in interest has the same effect as if the action had been commenced in the name of the real party in interest. Alaska R.Civ.P. 17(a). The question whether to permit or require joinder rests in the sound discretion of the superior court. Truckweld, 649 P.2d at 235. Kandik Construction maintains that the claim for business destruction damages sounds in both tort and contract, and that Kandik Construction has standing to assert a claim under either theory. [9] Although this is a close issue, we believe that the superior court did not abuse its discretion in adding Kandik Construction as a party plaintiff. The Borough had notice of the business destruction claim no later than April 1987, and it knew that the business purportedly destroyed was that of Kandik Construction and not Kandik & Associates. Thus, it had the ability to prepare a defense. Although Kandik Construction was not formally made a party until the eve of trial, it did join within a reasonable time after the Borough first objected to the claim on this basis. We hold that the court acted within its discretion in permitting Kandik Construction to join the case under Civil Rule 17(a). The court's failure to instruct the jury on the identity of the parties and the nature of their claims, however, is not so easily disregarded. In this connection, we agree with the Borough that the instructions pertaining to the business destruction claim were wholly inadequate to apprise the jury of the proper legal standards for recovery. As we observed in Poulin v. Zartman, 542 P.2d 251, 271 (Alaska 1975), aff'd on reh'g, 548 P.2d 1299 (Alaska 1976), [I]n a lengthy and complex case involving two theories of liability which are closely intertwined, yet wholly separate and distinct, it is incumbent upon the trial judge to make clear to the jury, in some manner, that the law recognizes and acknowledges the distinctions in the theories and that the jury must do likewise in rendering its verdict. In this case, the court did not explain to the jury why the Borough might be liable to Kandik & Associates as opposed to Kandik Construction. Further, the court failed to explain to the jury that they were separate legal entities. Although the amended complaint appears to assert causes of action sounding in tort and contract, the jury was never instructed on the requirements for recovery under either theory. The jury was merely instructed that Kandik claimed destruction of its business as a result of claimed breaches of contract, tortious or wrongful conduct of the Borough, and that Kandik is entitled to recover damages for these losses based on this theory if you decide it is more likely than not that the Borough's actions or inactions were the legal cause of the destruction of Kandik's business. The instruction fails to adequately advise the jury of the nature of the theory of liability. It is utterly devoid of references to the elements of any recognized intentional or negligent tort. Moreover, it fails to identify the contract under which Kandik asserts the right to damages, or to inform the jury under what theory Kandik Construction might recover under the contract between the Borough and Kandik & Associates. Accordingly, we hold that the award of damages for the destruction of Kandik Construction's business must be reversed and remanded for further proceedings.