Opinion ID: 2600066
Heading Depth: 3
Heading Rank: 2

Heading: The Krauses May Pursue Their Statute-Based Claims.

Text: The Krauses argue that their claims relate to interests in real property and contend that any of the three statutes of limitations provided by AS 09.10.030 (actions regarding interests in land), AS 09.10.050 (actions for waste or trespass upon real property), or AS 09.10.100 (actions not otherwise provided for) should apply. We conclude that AS 09.10.070 and AS 09.10.090 are the controlling statutes here. The Krauses request relief for injury arising from the inappropriate recording of a plat; nearly all of their claims are properly described as claims for personal injury ... or injury to the rights of another not arising on contract and not specifically provided otherwise. [27] Alaska Statute 09.10.070(a)(5) specifically exempts statutory penalties, which are instead governed by AS 09.10.090, [28] so the Krauses' request for statutory penalties falls under that statute. The Krauses are not seeking the recovery of real property, so the limitations period in AS 09.10.030 does not apply. And the Krauses' cause of action is not based on trespass or waste, so AS 09.10.050 does not apply. Alaska Statute 09.10.100 governs only claims for which no other statute of limitation controls; it does not apply here because we conclude that other statutes provide time limitations for the Krauses' claims. Significantly more than two years passed between the recording of the plat in November 2002 and the filing of the complaint in April 2007. Based on the allegations set forth in the complaint, the superior court's initial ruling dismissing these claims as untimely was correct.
The Krauses argue that the applicable limitations period was tolled because the action complained of constitutes a continuing violation. [29] We review the legal question of what constitutes a continuing violation de novo. [30] We have explained that [t]he continuing violations doctrine allows plaintiffs to establish an ongoing tort through incidents that occurred before the statute of limitations period and that continued into the limitations period. [31] Here, because no action occurred after the plat was recorded, the continuing violations doctrine does not apply. We also note that though the continuing violations doctrine prevents claims that initially accrued outside the relevant limitations period from being time-barred, it only permits plaintiffs to collect damages caused by acts that occurred within the limitations period. [32] Even if the law permitted the Krauses to rely on this doctrine, they would not be able to recover the full remedy they seek.
Alaska Civil Rule 15(a) provides that a party seeking leave to amend a complaint to which a responsive pleading has been filed must receive permission from the court. Leave shall be freely given when justice so requires. [33] But we have held that if an amendment would be futile because it advances a claim or defense that is legally insufficient on its face, it is appropriate for a superior court to deny leave to amend. [34] We consider with independent judgment whether a proposed amended complaint could survive dismissal; if we conclude that it could not, we will hold that the superior court did not abuse its discretion by denying the motion for leave to amend. [35] As presented in their complaint, the Krauses' claims were time-barred; their amended complaint could only make out a viable claim if it sufficiently supported an argument that the applicable statute of limitations was tolled. The Krauses argue that they should have been granted leave to amend their complaint because [t]he equitable tolling doctrine should have been recognized and applied, or at a minimum, the superior court should have conducted an evidentiary hearing at which testimony pertinent to the tolling issue could have been received, and because the defendants should be equitably estopped from asserting the statute of limitations as a defense.
We have explained the circumstances under which a statute of limitations period may be equitably tolled: The equitable tolling doctrine applies to relieve a plaintiff from the bar of the statute of limitations when he has more than one legal remedy available to him. The statute is equitably tolled if (1) pursuit of the initial remedy gives defendant notice of plaintiff's claim, (2) defendant's ability to gather evidence is not prejudiced by the delay, and (3) plaintiff acted reasonably and in good faith. The statute is tolled only when the initial remedy is pursued in a judicial or quasi-judicial forum.[ [36] ] We consider each requirement in turn.
The Borough and the individual defendants argue that the Krauses fail to satisfy the notice requirement for equitable tolling. We are not persuaded by their reasoning. The Borough argues that it was not on notice of the claims in the Krauses' complaint because the claims in this case are distinct from those the Krauses made in their prior case. Specifically, the Borough argues that the Krauses' appeal to the BOAA included neither a demand for damages nor an argument regarding a change to an easement. The Borough also asserts the case was not an appeal of the approval of the plat. But equitable tolling does not require that the initial and current relief sought be identical. [37] The Krauses' two cases are based on the same underlying facts and issues, all of which involve the Borough's approval of the Christiansens' plat. Moreover, the Krauses' claims for declaratory and injunctive relief against the Borough are very similar to claims they raised in unsuccessful efforts to obtain relief elsewhere. We conclude that the differences between this case and the prior one are not sufficient to defeat the notice requirement of the equitable tolling doctrine. The individual defendants reason that they were not on notice of the prior case because they were not parties to it. This argument cannot defeat the motion to amend because when considering whether an amendment is futile, our court must presume all factual allegations of the complaint to be true and [make] all reasonable inferences ... in favor of the non-moving party. [38] The Krauses alleged in their amended complaint that they attempted to negotiate with the defendants. We must read the complaint as alleging that all of the defendants, including the individual property owners, were engaged in negotiations and were aware of the pending case before the BOAA. Because the complaint allows the inference that the Krauses gave notice to all of the defendants, the law requires that the Krauses be given the chance to prove this allegation. [39]
No party argues that the delay in filing the current case prejudiced any of the defendants. Therefore, we must assume for purposes of reviewing dismissal of the complaint and denial of the motion to amend the complaint that the Krauses could meet the second requirement for equitable tolling.
The Borough argues that the Krauses' initial pursuit of an alternative remedy was not reasonable. Specifically, the Borough contends that by approaching non-judicial Borough officials, the Krauses attempted to influence the outcome of a judicial determination by involving the legislative and executive branches of government. The Krauses contend that they acted in good faith. After the Krauses learned that the final plat had been recorded without the conditions they had insisted upon, the Krauses contacted the Borough Manager and other members of the executive branch about their concerns. [40] The Krauses met with the Borough Manager on December 18, 2002 to voice their objections to the recorded plat. In response to their complaints, the Borough Manager told them he would have the Acting Planning Director, Ron Swanson, look into their concerns. Swanson promptly met with them and requested additional documents, which they provided. The Krauses believed that the investigation was ongoing until they received a letter from Borough Manager Duffy dated March 3, 2003, stating that the plat met all of the conditions required for Platting Board approval and declaring the administrative review of this platting action is closed. Jean Krause addressed the Borough Assembly the next day. The joint affidavit the Krauses filed in support of their motion to amend states that Mayor Tim Anderson and Assembly Member Talis Colberg heard Ms. Krause's presentation and stated that they wanted to meet with the Krauses to discuss their concerns. On March 6, 2003, the Krauses met with the Mayor, the Borough Manager, Mr. Swanson, Mr. Colberg and the Deputy Borough Attorney. According to the Krauses, the Borough representatives proposed negotiations, and the Krauses agreed to participate. On March 13, 2003, the Krauses wrote two letters. The first asked Borough Manager Duffy to reconsider his March 3, 2003, decision to close the administrative review of their concerns. The Krauses never received a response to this request. In the second letter, the Krauses reiterated their willingness to engage in negotiations with the Borough. The Krauses appealed the Borough Manager's decision to the BOAA on March 24, 2003, but the Krauses and the Borough both requested stays of that appeal so they could continue with their negotiation, mediation, and settlement efforts. On July 3, 2003, the Borough and the Krauses signed a negotiated settlement agreement. According to the Krauses, that agreement fell through when the Christiansens objected to some of its terms, calling it a bogus settlement agreement and declaring, [t]his settlement has been stopped as of now in correspondence directed to the Platting Board dated on or about September 17, 2003. Despite the Christiansen's rejection of the settlement agreement, the Krauses wrote Borough Manager Duffy about the Borough's failure to fulfill its obligations under that agreement. He offered the Krauses two options: proceed with the BOAA hearing or attempt mediation. On November 13, 2003, the Krauses, the Christiansens and the Borough all signed an agreement to mediate. The mediation continued through January 2004 and culminated in a second settlement agreement but the parties again encountered difficulty when they attempted to execute it, and further mediation efforts reached an impasse. The BOAA entered its decision on April 1, 2005, concluding that it lacked jurisdiction to hear the Krauses' appeal of the Borough Manager's letter. The Krauses appealed the BOAA's decision to the superior court on April 27, 2005, and the superior court affirmed the BOAA's decision on March 12, 2007. On this record, we cannot conclude that the Krauses acted inappropriately or in bad faith by contacting local officials or accepting offers to negotiate and mediate this dispute. Furthermore, though the BOAA dismissed the Krauses' appeal on jurisdictional grounds and Judge Cutler affirmed that decision, there was no suggestion in either opinion that the Krauses' arguments were frivolous or malicious. [41]
The fourth requirement for equitable tolling is that the plaintiff initially sought relief in a judicial or quasi-judicial governmental forum. [42] Judge White concluded that the Krauses' claims were time-barred for two reasons relating to this factor. First, Judge White seems to have agreed with the Borough's argument that collateral estoppel bars the Krauses from asserting that the Borough Manager is a quasi-judicial forum. [43] The Borough's collateral estoppel argument stems from Judge Cutler's decision denying the Krauses' BOAA appeal. In order to establish an issue, the doctrine of collateral estoppel requires that the parties and the issues litigated in the second action to be identical to those involved in the first action. [44] Judge Cutler's decision did not address the equitable tolling doctrine; it considered whether the BOAA had jurisdiction over an appeal of the Borough Manager's letter, and concluded that it did not. The decision does observe that the Borough Manager has no authority to act as a judge or quasi-judicial officer, but those observations support Judge Cutler's conclusion that the Borough Manager's letter was not an appealable order; she did not decide whether the Borough Manager was a quasi-judicial forum for equitable tolling purposes. The issue to be decided in the second actionwhether the Borough Manager is a quasi-judicial forum for purposes of equitable tollingis different than the issue in the first actionwhether the BOAA had jurisdiction to hear an appeal from the Borough Manager's letter. Therefore, the Borough's collateral estoppel argument is unavailing. Judge White's second reason for denying the Krauses' motion to amend was that their attempt to seek quasi-judicial relief through the BOAA ... was untimely. The court did not elaborate on this reason, and we believe it is susceptible to two meanings. First, the Borough and the individual defendants argued in the superior court that the Krauses waived their equitable tolling argument by failing to raise it in response to the motion to dismiss their complaint. If the court's reference to timeliness referred to the argument that the Krauses should have raised the doctrine of equitable tolling when the motion to dismiss was being decided, it overlooks that the court's order stated, [i]f Plaintiffs can assert facts which would toll the two-year statute of limitations, the court will consider a motion to amend Plaintiff's complaint. The other possible interpretation of Judge White's order is that the reference to timeliness reflects the court's conclusion that the Krauses could not rely on the doctrine of equitable tolling because they did not file their BOAA appeal within fifteen days from the date they learned of the Platting Board's decision. [45] If this was the court's reasoning, it reflects a misapplication of the equitable tolling doctrine. Equitable tolling is available in situations where plaintiffs have multiple legal remedies available to them. [46] Rather than require a plaintiff to simultaneously pursue separate remedies, this doctrine tolls the statute of limitations on one remedy while the plaintiff pursues an alternate remedy. [47] If the plaintiff's first attempt to obtain relief fails, the plaintiff can pursue the other remedy based on the same right or claim. [48] The statute of limitations is thus tolled during the pendency of the initial defective action. A plaintiff's second action is certainly timely when, as in this case, it is filed before the un-tolled time exceeds the applicable statute of limitations period. [49] The Krauses' equitable tolling argument does not depend upon whether their appeal to the BOAA was timely filed or successful. The issue is whether the Krauses' efforts to obtain relief from the BOAA tolled the one-year or two-year limitation periods for the claims in their amended complaint. As already explained, we believe the Krauses' amended complaint alleges facts that, if proven, satisfy the first three elements of the equitable tolling doctrinenotice of claims, lack of prejudice, and good faith. [50] As for the requirement that the Krauses pursued their initial relief in a judicial or quasi-judicial governmental forum, the Borough, the Christiansens, and individual defendants only argue that the Borough Manager is not a quasi-judicial governmental forum; they do not contest the BOAA's status as a quasi-judicial governmental forum. The Krauses pursued their appeal with the BOAA long before the statute of limitations expired on any of the claims in their amended complaint. [51] If the Krauses ultimately prove the elements of equitable tolling, then the statute of limitations was tolled during the pendency of their action before the BOAA and the claims in their amended superior court complaint are not time-barred. [52] Because the doctrine of equitable tolling may toll the statute of limitations on the claims in the Krauses' amended complaint, it was an abuse of discretion to deny them leave to amend.
The Krauses' motion for leave to amend their complaint also argued that the doctrine of equitable estoppel prevented the appellees from relying on the statute of limitations to dismiss their claims. They cite Gudenau & Co., Inc. v. Sweeney Insurance, Inc., [53] in support of this argument. In Gudenau, we affirmed the superior court's ruling that the plaintiff failed to satisfy the elements of equitable tolling. [54] But we also said that the court's inquiry does not end with that conclusion; a plaintiff who is aware of the elements of his or her cause of action, but fails to file suit within the limitations period, may still be protected if he or she was induced by defendant's words or conduct to postpone filing suit until the limitations period has expired. [55] Here, the superior court's order did not address the Krauses' argument that misrepresentation(s) by the Borough should equitably estop it from relying on the statute of limitations. We are unable to assess the merits of this argument because it entails questions of fact. [56] The Krauses are entitled to an opportunity to prove this defense to the statute of limitations.