Court Opinion

ID: 2798019
Source: CourtListenerOpinion
Date Created: 2015-05-01 17:01:40.367454+00
Date Added: 2024-06-11T11:29:25.636747
License: Public Domain

Notice: This opinion is subject to correction before publication in the P ACIFIC R EPORTER .
      Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
      303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
      corrections@akcourts.us.

               THE SUPREME COURT OF THE STATE OF ALASKA

RANES & SHINE, LLC,             )
                                )                       Supreme Court No. S-15222
           Appellant,           )
                                )                       Superior Court No. 3AN-10-10232 CI
     v.                         )
                                )                       OPINION
MACDONALD MILLER                )
ALASKA, INC.,                   )                       No. 7003 – May 1, 2015
                                )
           Appellee.            )
_______________________________ )

              Appeal from the Superior Court of the State of Alaska, Third
              Judicial District, Anchorage, John Suddock, Judge.

              Appearances: Brent R. Cole, Law Office of Brent R. Cole,
              P.C., Anchorage, for Appellant. Jason J. Ruedy, Law Offices
              of Royce & Brain, Anchorage, for Appellee.

              Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and
              Bolger, Justices.

              STOWERS, Justice.

I.    INTRODUCTION
              In 2005 Gordon Timmerman, the sole owner of MacDonald Miller Alaska,
Inc., agreed to release a claim MacDonald Miller had against Ranes & Shine, LLC, and
to pay an additional $18,000 in exchange for equipment Ranes & Shine claimed to own
free of any encumbrances. Five years later First National Bank Alaska contacted
Timmerman, asserting a security interest in the equipment and requesting its return. First
National eventually filed this suit against Timmerman in 2010 to obtain possession of the
equipment.1
              Timmerman filed a third-party complaint against Ranes & Shine and its
former managing member, Thomas Ranes, asserting breach of warranty of title,
misrepresentation, unfair trade practices, and common law contract claims. In its answer,
Ranes & Shine alleged among its other contentions that the applicable statutes of
limitation barred Timmerman’s suit because First National’s publicly filed Uniform
Commercial Code (UCC) financing statement should have placed Timmerman on inquiry
notice of First National’s security interest in the equipment at the time of the agreement
in 2005. The superior court disagreed and held Ranes & Shine liable for breach of
contract and misrepresentation, while also dismissing the claims asserted against Ranes
individually. Ranes & Shine appeals.
              We affirm the superior court’s statute of limitations and attorney’s fees and
costs rulings, as well as various procedural rulings for the reasons discussed below. But
we reverse the court’s decision to dismiss the misrepresentation claim that Timmerman’s
company, MacDonald Miller, had asserted against Ranes in his individual capacity and
remand for further proceedings on that issue.
II.    FACTS AND PROCEEDINGS
       A.     Facts
              Thomas Ranes, Ken Embley, and Tom Embley formed Ranes & Shine,
LLC in October 2001. Ranes owned 50% of the company, and the Embleys each owned
25% of the company. Ranes had complete managerial authority, and the Embleys were
essentially silent partners.

       1
             First National’s claims are not relevant to this appeal, and we do not discuss
them in any detail.

                                           -2-                                       7003
             In 2002 Ranes & Shine applied for a loan from First National Bank Alaska.
In connection with the loan, Ranes and the Embleys signed a promissory note, a business
loan agreement, and a commercial security agreement to secure the loan.            The
commercial security agreement gave First National a security interest in various
categories of collateral, including Ranes & Shine’s equipment. On October 30, 2002,
First National filed a UCC financing statement perfecting its security interest in the
equipment.    First National filed a continuation of that financing statement on
August 7, 2007.
             In 2003 Circle Plumbing & Heating, a company majority-owned by the
Embleys, was hired to build Ranes & Shine’s facility. Circle hired MacDonald Miller
Alaska, Inc., a company wholly owned by Gordon Timmerman, to provide mechanical
services for the new building.
             MacDonald Miller worked on the project and billed Circle, but was not
promptly paid. MacDonald Miller eventually filed a lien against Ranes & Shine’s
building for approximately $92,000. But MacDonald Miller released the lien a few hours
later, allegedly because Tom Embley contacted Timmerman asking him to release the
claim so Ranes & Shine could secure additional funding for the building project. Tom
Embley allegedly assured Timmerman he would be paid, and Circle later paid
MacDonald Miller $60,000 in 2004. This left a claimed balance of $32,000 outstanding.
             Timmerman continued to pursue the debt without success until he contacted
Ranes & Shine directly and spoke with Ranes. In October 2005 Timmerman and Ranes
came to an agreement: in exchange for certain equipment, Timmerman executed a
release of the remaining $32,000 debt owed to MacDonald Miller and paid an additional
$18,000 to Ranes & Shine.
             In the course of reaching this agreement, Ranes incorrectly represented to
Timmerman that Ranes & Shine owned clear title to the equipment. Timmerman did not

                                          -3-                                     7003

conduct a UCC record search; he later testified it was not his standard practice to do so
and he “didn’t even know what UCC stood for” prior to this lawsuit.
             After Timmerman took possession of the equipment, he stored it in a
shipping container. There it remained until the summer of 2010 when First National
contacted him.    First National explained it had filed a UCC financing statement
documenting its security interest in the equipment several years before Timmerman’s
agreement with Ranes & Shine. First National also stated that the loan secured by the
equipment had gone into default. First National demanded that Timmerman return the
equipment, but Timmerman refused.
      B.     Proceedings
             First National brought suit against Timmerman in 2010 seeking the return
of the equipment. Timmerman answered the complaint and asserted third-party claims
against Ranes individually and Ranes & Shine based on Ranes’s incorrect representation
that Ranes & Shine owned the equipment without any encumbrances. Timmerman
asserted the following third-party claims: (1) breach of warranty of title under the UCC;
(2) misrepresentation; and (3) deceptive trade practices under Alaska’s Unfair Trade
Practices and Consumer Protection Act (UTPA).          First National’s claims against
Timmerman were disposed of on summary judgment, leaving only Timmerman’s
third-party claims.
             Ranes & Shine moved for summary judgment on Timmerman’s claims
based on the applicable statutes of limitation. Superior Court Judge John Suddock
granted Ranes & Shine’s motion in part, ruling that Timmerman’s breach of warranty
claim was subject to the UCC’s strict four-year limitations period 2 and that Timmerman

      2
           See AS 45.02.725(a)-(b) (“An action for breach of a contract for sale must
be commenced within four years after the cause of action has accrued. . . . A cause of
                                                                         (continued...)

                                           -4-                                     7003

failed to bring his breach of warranty claim within that period. The superior court denied
Ranes & Shine’s motion with respect to the misrepresentation and UTPA claims,
concluding that there were genuine issues of material fact regarding when Timmerman
was put on inquiry notice. The court did not address a common law contract claim
Timmerman had added through an amended complaint filed while the parties were
briefing the summary judgment motion.3
             The superior court held a two-day bench trial in May 2013 to address the
remaining claims. The court ruled that Timmerman’s misrepresentation, UTPA, and
common law breach of contract claims were not barred by the statutes of limitation
because Timmerman was not on inquiry notice until he was contacted by First National
in 2010. The court also concluded that Timmerman had proven his misrepresentation
and breach of contract claims, but not his UTPA claim.
             The superior court observed, however, that the lawsuit had been “inaptly
filed as a personal lawsuit by Mr. Timmerman against [Ranes & Shine] when all the
evidence is that he was negotiating and settling and purchasing this equipment as a
corporate officer of MacDonald Miller.” Based on this finding, and further finding that
Ranes & Shine would suffer no prejudice, the court on its own initiative substituted
MacDonald Miller as the plaintiff.

      2
       (...continued)
action accrues when the breach occurs, regardless of the aggrieved party’s lack of
knowledge of the breach.”); see also Armour v. Alaska Power Auth., 765 P.2d 1372,
1375 (Alaska 1988) (holding that the four-year UCC statute of limitations is not tolled
under the common law discovery rule regardless of a purchaser’s knowledge).
      3
             Timmerman’s contract claim alleged that Ranes & Shine had not provided
“good and valuable consideration,” apparently due to the seizure of the equipment, and
that Ranes & Shine breached the duty of good faith and fair dealing by selling equipment
that Ranes & Shine “was not authorized to sell.”

                                           -5-                                      7003

             MacDonald Miller prepared a final judgment for the superior court’s
signature. The proposed final judgment stated that the claims against Ranes individually
were dismissed. Ranes & Shine objected, arguing that the superior court’s oral findings
had not dismissed the individual claims against Ranes.
             The superior court signed the proposed final judgment without specifically
discussing its decision to dismiss the claims against Ranes individually. The court
awarded MacDonald Miller $50,329.37, plus interest, attorney’s fees, and costs.
Ranes & Shine appeals.
III.   STANDARD OF REVIEW
             “Determinations of which legal authorities apply in a case and
interpretations of what those legal authorities mean are questions of law subject to
de novo review.”4 “When applying the de novo standard of review, we apply our
independent judgment . . . , adopting the rule of law most persuasive in light of
precedent, reason, and policy.”5
             We review a trial court’s findings of fact for clear error.6 Clear error “exists
when ‘our review of the record leaves us with the definite and firm conviction that the
superior court has made a mistake.’ ”7

       4
            ConocoPhillips Alaska, Inc. v. Williams Alaska Petrol., Inc., 322 P.3d 114,
122 (Alaska 2014) (footnotes omitted).
       5
            Id. (quoting Russell ex rel. J.N. v. Virg-In, 258 P.3d 795, 802
(Alaska 2011)) (internal quotation marks omitted).
       6
             Gilbert M. v. State, 139 P.3d 581, 586 (Alaska 2006).
       7
            Id. (quoting D.M. v. State, Div. of Family & Youth Servs., 995 P.2d 205,
207-08 (Alaska 2000)).

                                            -6-                                        7003

                We review a trial court’s decision to admit evidence, including the
testimony of a witness, for abuse of discretion.8 A decision to permit or deny an
amendment to the pleadings is reviewed for abuse of discretion.9 We will find an abuse
of discretion when the decision on review is manifestly unreasonable.10
IV.	   DISCUSSION
                Ranes & Shine primarily argues that the superior court erred when it ruled
that the statutes of limitation did not bar MacDonald Miller’s claims. Ranes & Shine
also argues that the court erred in dismissing the claims against Ranes individually and
awarding MacDonald Miller attorney’s fees and costs. Finally, Ranes & Shine raises
several procedural issues. We generally affirm the superior court’s rulings, but we
reverse and remand its dismissal of the misrepresentation claim against Ranes
individually.
       A.	      MacDonald Miller’s Common Law Breach Of Contract And
                Misrepresentation Claims Were Not Barred By The Statutes Of
                Limitation.
                MacDonald Miller asserted three claims at trial: (1) misrepresentation;
(2) unfair trade practices; and (3) breach of contract. Only the misrepresentation and
breach of contract claims are at issue in this appeal.11

       8
                Getchell v. Lodge, 65 P.3d 50, 53, 58 (Alaska 2003).
       9
                Miller v. Safeway, Inc., 102 P.3d 282, 288 (Alaska 2004).
       10
                See Tufco, Inc. v. Pacific Envtl. Corp., 113 P.3d 668, 671 (Alaska 2005).
       11
          The trial court dismissed MacDonald Miller’s UTPA claim, and
MacDonald Miller has not appealed that ruling.

                                            -7-	                                    7003

              A party must bring a misrepresentation claim within two years of the
accrual of his cause of action 12 and a breach of contract claim within three years of
accrual.13 Generally, “accrual of a cause of action is established at the time of the
injury.”14 But the common law discovery rule tolls the running of the statutory period
“[w]here an element of a cause of action is not immediately apparent.”15 The discovery
rule “mitigate[s] the harshness that can result from the [accrual] rule’s preclusion of

       12
              AS 09.10.070(a).
       13
              AS 09.10.053. But see AS 45.02.725(a) (four-year statute of limitations
applicable to breach of a contract for sale of goods). Ranes & Shine argues that the
contract between Timmerman and Ranes was one for the sale of goods, making it subject
to the four-year statute of limitations in AS 45.02.725 to which the discovery rule does
not apply. Armour v. Alaska Power Auth., 765 P.2d 1372, 1375 (Alaska 1988). But we
conclude that Ranes & Shine did not preserve this argument.
              MacDonald Miller first asserted its common law contract claim while the
briefing on Ranes & Shine’s motion for summary judgment was pending. Ranes &
Shine thus argued for the application of AS 45.02.725 for the first time in its summary
judgment reply brief. But the superior court did not issue a ruling on that issue, and
Ranes & Shine never sought reconsideration or filed a new motion seeking to bar the
common law contract claim. Ranes & Shine also did not ask the court to apply the four-
year statute of limitations at trial even after the court specifically asked the parties if it
needed to make any additional rulings. Thus, Ranes & Shine asks that we review an
order that was never properly requested and that was never issued. We decline to do so.
See Gunderson v. Univ. of Alaska, Fairbanks, 902 P.2d 323, 327 n.5 (Alaska 1995)
(“Gunderson did not present this argument to the trial court . . . . Therefore it is
waived.”); Alaska State Emps. Ass’n v. Alaska Public Emps. Ass’n, 813 P.2d 669, 671
n.6 (Alaska 1991) (“As a matter of fairness, the trial court could not consider an
argument raised for the first time in a reply brief.”).
       14
            Gefre v. Davis Wright Tremaine, LLP, 306 P.3d 1264, 1273 (Alaska 2013)
(quoting Cameron v. State, 822 P.2d 1362, 1365 (Alaska 1991)) (internal quotation
marks omitted).
       15
            Id. at 1274 (alteration in original) (quoting John’s Heating Serv. v. Lamb,
46 P.3d 1024, 1031 (Alaska 2002)) (internal quotation marks omitted).

                                             -8-                                        7003

claims where the injury provided insufficient notice of the cause of action to the
plaintiff.”16
                In discussing the discovery rule, we have previously explained:
                [T]he statute of limitations does not begin to run until the
                claimant discovers, or reasonably should have discovered, the
                existence of all elements essential to the cause of action.
                Thus we have said the relevant inquiry is the date when the
                claimant reasonably should have known of the facts
                supporting her cause of action. We look to the date when a
                reasonable person has enough information to alert that person
                that he or she has a potential cause of action or should begin
                an inquiry to protect his or her rights.[17]
There are at least two dates from which the statute of limitations can begin to run: (1) the
actual-notice date, and (2) the inquiry-notice date. The actual-notice date is “the date
when [the] plaintiff reasonably should have discovered the existence of all essential
elements of the cause of action.”18 The inquiry-notice date is “the date when the plaintiff
has information which is sufficient to alert a reasonable person to begin an inquiry to
protect his rights.”19 The inquiry-notice date generally controls when a cause of action
accrues.20

       16
              Id. (second alteration in original) (quoting Cameron, 822 P.2d at 1365)
(internal quotation marks omitted).
       17
              Id. at 1275 (alteration in original) (quoting Mine Safety Appliances Co. v.
Stiles, 756 P.2d 288, 291 (Alaska 1988)).
       18
              Id. (alteration in original) (quoting John’s Heating Serv., 46 P.3d at 1031)
(internal quotation marks omitted).
       19
            Id. (quoting John’s Heating Serv., 46 P.3d at 1031) (internal quotation
marks omitted).
       20
                Id. We note that there are exceptions to this rule not at issue in this case.
                                                                              (continued...)

                                             -9-                                       7003

              Ranes & Shine challenges the superior court’s statute of limitations rulings
on two grounds. First, Ranes & Shine asserts that we should hold that MacDonald Miller
was on notice of its claims in 2005 because First National’s publicly filed UCC financing
statement put MacDonald Miller on constructive notice21 of the fact that the equipment
was encumbered, contrary to Ranes’s representation.           Whether a UCC financing
statement provides constructive notice of the elements of a claim for statute of limitations
purposes is a question of law that we review de novo.22
              Second, Ranes & Shine argues that the facts of this case demonstrate that
MacDonald Miller was on inquiry notice of its claims in 2005 even without imputing the
information contained in the UCC financing statement to it. Determining the accrual
date is a fact-intensive inquiry conducted by the superior court, and we review the
court’s findings for clear error.23
              1.	    UCC financing statements do not provide constructive notice of
                     the elements of a claim for statute of limitations purposes.
              Ranes & Shine argues that First National’s UCC financing statement gave
MacDonald Miller constructive notice of the fact that Ranes had misrepresented

       20
         (...continued)
For example, if the plaintiff made a reasonable inquiry but failed to discover the essential
elements of his cause of action, the actual-notice date may control. Cameron, 822 P.2d
at 1367.
       21
             “Constructive notice is information or knowledge of a fact imputed by law
to a person, although he or she may not actually have it . . . .” 58 A M . JUR . 2 D
Notice § 6 (2015).
       22
            Matanuska Elec. Ass’n v. Chugach Elec. Ass’n, 152 P.3d 460, 465
(Alaska 2007) (reviewing questions of law de novo).
       23
             Gefre, 306 P.3d at 1271 (citing Sengupta v. Wickwire, 124 P.3d 748, 752
(Alaska 2005)); Pedersen v. Zielski, 822 P.2d 903, 907 (Alaska 1991) (“Application of
the discovery rule . . . is dependent on facts that are often unclear.”).

                                           -10-	                                      7003

Ranes & Shine’s ability to pass clear title to the equipment. Ranes & Shine reasons that
the superior court should have charged MacDonald Miller with notice of First National’s
security interest in the equipment at the time of the 2005 agreement. This would place
the accrual date sometime in October 2005, and the statutes of limitation would bar
MacDonald Miller’s claims.24 But we decline to adopt Ranes & Shine’s constructive
notice argument because it is inconsistent with our statute of limitations jurisprudence
and would be bad public policy.
                     a.	    We have implicitly rejected the constructive notice
                            position Ranes & Shine asks us to adopt.
              Neither party has cited any statute of limitations cases where we charged
a plaintiff with constructive notice of publicly recorded facts absent a finding that the

       24
              We note that the parties have briefed this case as though MacDonald
Miller’s misrepresentation and common law contract claims must have accrued at the
same time. We have treated their arguments in the same manner because it does not
affect the result in this case.
               But our holding in Jarvill v. Porky’s Equipment, Inc. suggests that their
assumption may not be correct. 189 P.3d 335, 339 (Alaska 2008). In Jarvill the plaintiff
purchased a boat that was allegedly constructed negligently. Id. at 336. Two and a half
years after the plaintiff took delivery of the boat, the boat sank, and the plaintiff sued the
builder. Id. at 337. We held that even though the boat was defective when it was sold,
the plaintiff did not suffer an injury that would support his negligence and product defect
claims until the boat sank, and, therefore, those causes of action did not accrue until the
boat sank. Id. at 339-41.
              Similarly, it could be argued that MacDonald Miller’s misrepresentation
action did not accrue until First National demanded the equipment be returned because
MacDonald Miller had not suffered damages necessary to support its claim until that
point. If that were the case, MacDonald Miller’s misrepresentation claim — but not
necessarily its contract claim — would be timely even without the operation of the
discovery rule. But we decline to apply Jarvill here because it was not raised before us
or the superior court, and its application would not change our ultimate conclusions
regarding the timeliness of MacDonald Miller’s claims.

                                            -11-	                                       7003

plaintiff was already on inquiry notice.25 Our review has identified only one Alaska
case — Bauman v. Day — where it was argued that a party should have been charged
with knowledge of facts in a publicly recorded document for statute of limitations
purposes without already being on inquiry notice.26
             In Bauman the Baumans purchased a property in 1984 from the Days after
allegedly asking the Days about the presence of permafrost on the property and being

      25
              While we have held that a person may be charged with knowledge of
information in publicly available documents in a variety of contexts, none of these cases
specifically considers that issue with respect to the statute of limitations where the
plaintiff was not already on inquiry notice. See, e.g., Kenai Chrysler Ctr., Inc. v.
Denison, 167 P.3d 1240, 1248 (Alaska 2007) (holding that a dealership was on
constructive notice of guardianship because of existence of guardianship order); Watega
v. Watega, 143 P.3d 658, 665 (Alaska 2006) (holding that purchasers of divorcing
couple’s home had constructive notice of wife’s claim to the property because wife had
filed an opposition to the sale with the superior court and purchasers knew about the
divorce and the husband’s need to obtain court permission prior to sale); Methonen v.
Stone, 941 P.2d 1248, 1252 (Alaska 1997) (charging a purchaser of real property with
notice of information in public records where other facts known to the purchaser placed
him on inquiry notice of a potential encumbrance); State v. Alaska Land Title Ass’n,
667 P.2d 714, 725 (Alaska 1983) (holding that title insurer’s policy was triggered
because insurer was held to be on constructive notice of a public land order published
in the Federal Register). Nothing in this opinion today affects these earlier holdings.
      26
              892 P.2d 817 (Alaska 1995). The theory of constructive notice has
appeared elsewhere in our statute of limitations cases, but never in the way Ranes &
Shine proposes here. See, e.g., Phillips v. Gieringer, 108 P.3d 889, 893 (Alaska 2005)
(discussing constructive notice and the relation back doctrine); Breck v. Moore, 910 P.2d
599, 604-05 (Alaska 1996) (holding that plaintiffs were on constructive notice of
information known or that should have been known to the plaintiffs’ attorney). But cf.
Moore v. Allstate Ins. Co., 995 P.2d 231, 239 (Alaska 2000) (holding in the discovery
rule context that a homeowner would not be charged with constructive notice of her
claim that her insurer had allegedly misrepresented the coverage available to her under
the National Flood Insurance Program despite the fact that she could have researched the
policy in the Federal Register).

                                          -12-                                     7003

told that there was none.27 But the recorded subdivision plat “showed the presence of
permafrost-laden soils on the land.”28
             The Baumans built a house on the property, and in 1986 began
experiencing permafrost-related problems.29 The early problems were not significant,
and the Baumans dismissed them as normal settlement of a new home.30 By 1988,
however, the problems were so significant that the Baumans stopped paying their
property taxes until the property was reevaluated to take the apparent permafrost into
account.31
             The Baumans did not bring a suit against the Days until 1992, alleging
breach of contract among other claims.32 At the time, a breach of contract action was
subject to a six-year statute of limitations.33 On a motion for summary judgment, the
superior court found that the contract action had accrued at the time of the sale in 1984
and ruled that the Baumans’ contract claims were barred.34 The Baumans appealed and

      27
             Bauman, 892 P.2d at 820.
      28
             Id. at 822.
      29
             Id. at 820.
      30
             Id.
      31
             Id.
      32
             Id.
      33
             See id. at 827 & n.16. As noted above, a common law breach of contract
claim is now subject to a three-year statute of limitations. See AS 09.10.053.
      34
             Bauman, 892 P.2d at 822.

                                          -13-                                     7003

we reversed in part, holding that the statute of limitations on their contract claim did not
begin to run until they began experiencing permafrost-related problems.35
              Chief Justice Moore, writing in partial dissent, concluded that the language
regarding the presence of permafrost in the subdivision plat meant that the Baumans
could have discovered the existence of permafrost on the land in 1984.36 He would have
held that the Baumans had constructive notice of the permafrost at the time they bought
the house because (1) “[i]t is not unreasonable to expect the Baumans to have examined
the subdivision plat, given that the deed of trust’s description specifically referenced that
plat,” and (2) the Baumans were allegedly concerned before purchasing the property that
it might contain permafrost.37
              This court, however, implicitly dismissed this constructive notice
argument.38 Instead, we reviewed the facts in the light most favorable to the Baumans
and concluded that the Baumans did not discover the permafrost “until they built on the
property and problems began to arise.”39 Noting that the Baumans allegedly became
aware of the permafrost in 1988, we held that the breach of contract action was filed
within the six-year statute of limitations period in effect at the time.40
              Ranes & Shine’s reasoning is similar to Chief Justice Moore’s dissenting
opinion and is not supported by our holding in Bauman. If we had construed the

       35
              Id. at 828.

       36
              Id. at 831 (Moore, C.J., dissenting).

       37
              Id.

       38
              Id. at 828.
       39
              Id.
       40
              Id.

                                            -14-                                       7003

information in the subdivision plat as being sufficient to put the Baumans on inquiry
notice, we would have needed to determine whether the Baumans undertook an inquiry
and whether the inquiry was reasonable.41 Our not doing so in the face of Chief Justice
Moore’s dissent on this particular point demonstrates our implicit rejection of the
argument Ranes & Shine advances here.
                     b.	    Public policy weighs against holding that a
                            misrepresentation victim is on constructive notice of the
                            information in publicly recorded financing statements for
                            the purposes of the statute of limitations analysis.
              A UCC financing statement is intended to provide notice to the world of a
secured party’s interest in specific collateral.42 The notice protects the party who obtains
the security interest, it also protects those who consider dealing with the debtor by
helping a potential creditor understand where it would stand in the order of priority
among other creditors and by helping it take appropriate action to protect its interests.43
              But a financing statement is not intended to shield a tortfeasor from the
consequences of his misrepresentations. “The recording laws establish a priority as
between innocent claimants to the same property or right; they are not intended to give
security to the perpetrators of fraud as against their victims.”44 Any other rule would

       41
               See Cameron v. State, 822 P.2d 1362, 1367 (Alaska 1991) (discussing the
third part of the discovery rule analysis as stated in Pedersen v. Zielski, 822 P.2d 903,
908 (Alaska 1991)).
       42
              68A A M . JUR . 2D Secured Transactions § 216 (2015).
       43
              Id.
       44
             Larabee v. Eichler, 271 S.W.3d 542, 547 (Mo. 2008) (en banc) (emphasis
added) (quoting Dreckshage v. Cmty. Fed. Sav. & Loan Ass’n, 555 S.W.2d 314, 319-20
(Mo. 1977) (en banc)). Although Larabee involved a real estate transaction, we
conclude the same rationale is true for UCC financing statements. See id. at 544-45.

                                           -15-	                                      7003

reward the party that convincingly misrepresents the status of his title by relieving him
of liability once the statute of limitations has run without any indication to his victim that
there is a need to undertake additional investigation. We see no convincing reason to
adopt such a rule.
              The potential collateral consequences of extending the notice a financing
statement gives beyond the realm of secured transactions also give us pause. For
example, our case law establishes that a plaintiff must prove that he justifiably relied on
a defendant’s incorrect statements to prove misrepresentation.45 If we adopted Ranes &
Shine’s broad constructive-notice argument, it is unlikely that any misrepresentation
regarding ownership could be justifiably relied upon when a contradictory recorded
document exists: the misrepresentations would always be belied by the publicly
recorded documents of which the plaintiff would be deemed to have constructive notice.
Nothing in our case law suggests such a result, and we decline to endorse it here.
              2.	    The superior court did not commit clear error when it set the
                     inquiry-notice date.
              The parties do not dispute that Timmerman and Ranes agreed to settle
MacDonald Miller’s outstanding debt in October 2005. Nor is there any dispute that
First National initially contacted Timmerman in the summer of 2010. MacDonald Miller
brought its third-party complaint in September 2010. The superior court found that
MacDonald Miller’s causes of action did not accrue at the time of the 2005 agreement
based primarily on Ranes’s and Timmerman’s lack of commercial financing
sophistication and Ranes’s affirmative representation to Timmerman that Ranes & Shine
owned clear title to the equipment. Instead, the court found that the statutes of limitation
began to run when First National contacted Timmerman.

       45
              Reeves v. Alyeska Pipeline Serv. Co., 56 P.3d 660, 670 (Alaska 2002).

                                            -16-                                        7003
              Ranes & Shine argues that the superior court erred in finding that the
statutes of limitation began to run upon First National’s 2010 contact with Timmerman.
Ranes & Shine asserts that the information known to MacDonald Miller at the time of
the 2005 transaction put it on inquiry notice in October 2005, making its lawsuit
untimely.46
              We have reviewed the record in this appeal with Ranes & Shine’s
arguments in mind and find no clear error. Timmerman and Ranes both testified that
they believed Ranes & Shine owned clear title to the equipment. Timmerman and Ranes
also both testified that they did not know about UCC financing statements until this case.
The superior court specifically found Timmerman credible on this point, while noting
that both Timmerman and Ranes lacked commercial sophistication.
              While Timmerman appears to have known that a bank may have been
involved in financing Ranes & Shine’s building, Timmerman also claimed he believed
that the Embleys had put a substantial amount of their own money into the project. The
superior court apparently credited this testimony because it later explicitly referred to the
Embleys’ investment in Ranes & Shine as one explanation for why Timmerman
reasonably relied on Ranes’s representation that Ranes & Shine owned clear title to the
equipment.
              We conclude that the superior court did not commit clear error in finding
Timmerman was not on inquiry notice at the time of the sale. These facts and findings

       46
               Ranes & Shine argues this point in two different contexts: (1) the denial
of its motion for summary judgment; and (2) the superior court’s findings after trial. We
address only the latter here. The superior court denied Ranes & Shine’s motion, at least
as to the misrepresentation claim, because it found there were genuine issues of material
fact. It then held a trial. We will not review an order denying summary judgment after
there has been a subsequent trial on the merits of the facts at issue in the summary
judgment proceedings. Larson v. Benediktsson, 152 P.3d 1159, 1170 (Alaska 2007).

                                            -17-                                       7003

provide sufficient support for the court’s decision even in the face of contrary evidence.
Thus, we affirm the court’s finding that Timmerman was not on inquiry or actual notice
until contacted by First National. Because MacDonald Miller filed its claims against
Ranes & Shine within two years of that contact, its claims were timely.
      B.	    The Misrepresentation Claim Against Ranes In His Individual
             Capacity Should Not Have Been Dismissed.
             MacDonald Miller asserted its misrepresentation claim against both
Ranes & Shine and Ranes in his individual capacity. While the superior court orally
ruled in MacDonald Miller’s favor and specifically discussed Ranes & Shine’s liability,
it did not address Ranes’s individual liability. That issue first arose after trial when
MacDonald Miller submitted a proposed final judgment including language dismissing
the claim against Ranes individually. Ranes & Shine objected to this part of the
proposed final judgment. Despite Ranes & Shine’s specific objection to this language,
the superior court adopted the proposed final judgment as its order without any
discussion of why it dismissed the claims against Ranes.
             Ranes & Shine argues that the superior court erred in dismissing the
misrepresentation claim against Ranes. Ranes & Shine argues that an agent may be held
liable to a third-party for the agent’s negligence, and asserts that it was Ranes’s
misrepresentations that gave rise to MacDonald Miller’s claims. MacDonald Miller
argues that Ranes was not individually liable because Ranes was Ranes & Shine’s agent
acting on the company’s behalf. These arguments present questions of law which we
review de novo.47

      47
             Matanuska Elec. Ass’n v. Chugach Elec. Ass’n, 152 P.3d 460, 465 (Alaska
2007) (reviewing questions of law de novo).

                                          -18-	                                     7003
              Our case law indicates that an agent’s liability depends on the type of claim
asserted.48 “The law is well established that in the event of negligence by a disclosed
agent acting within the scope of his authority the agent may be held individually liable
to a third party.”49 But for breach of contract claims “officers of a corporation will not
ordinarily be held personally liable for contracts they make as agents of the corporation”
if they disclose their agency and the existence of the corporation.50 Thus, an agent may
be held individually liable for negligence the agent commits, but not, in the majority of
circumstances, for breach of contract.
              The only claim MacDonald Miller asserted against Ranes on which
MacDonald Miller prevailed was its misrepresentation claim. It is undisputed that Ranes
was the person who misrepresented the status of title to the equipment, and it is through
Ranes’s misrepresentation that Ranes & Shine also became liable for misrepresentation.
The case law discussed above compels the conclusion that Ranes would be individually
liable for tortious acts he individually committed while acting as an agent for Ranes &
Shine — he thus can be held individually liable for the misrepresentation he made. An
agent, even a corporate officer or director, is not cloaked with tort immunity because he
was acting in the course and scope of his employment when he committed the tort.

       48
            We note that the briefing in this case assumes that Ranes was acting as
Ranes & Shine’s agent during his negotiations with Timmerman.
       49
              Austin v. Fulton Ins. Co., 498 P.2d 702, 704 (Alaska 1972); see
11 FLETCHER CYCLOPEDIA OF THE LAW OF CORPORATIONS § 1135 (2014) (“It is the
general rule that an individual is personally liable for all torts the individual committed,
notwithstanding the person may have acted as an agent or under directions of another.”);
see also 18B A M . JUR . 2D Corporations § 1629 (2015) (“If . . . a director or officer
commits or participates in the commission of a tort, whether or not it is also by or for the
corporation, he or she is liable to injured third persons . . . .”).
       50
              Jensen v. Alaska Valuation Serv., Inc., 688 P.2d 161, 162-63 (Alaska 1984).

                                           -19-                                       7003

Therefore, we hold it was error to dismiss the misrepresentation claim asserted against
Ranes in his individual capacity.
       C.	    The Superior Court Did Not Abuse Its Discretion When It Amended
              The Pleadings Sua Sponte.
              While issuing its oral decision, the superior court commented that it
believed Timmerman was the wrong plaintiff and that the real party in interest was
MacDonald Miller. Finding that “the case was tried on the basis [of] what happened to
MacDonald Miller and . . . the appropriate treatment of that,” the court amended the
pleadings sua sponte to substitute MacDonald Miller as the plaintiff. The court further
found that there was no prejudice to Ranes & Shine as a result of the amendment.
Ranes & Shine argues that this decision constituted an abuse of discretion.
              We disagree. A trial court has broad power to conform the pleadings to the
evidence actually presented.51 Alaska Rule of Civil Procedure 15(b) provides that
“[w]hen issues not raised by the pleadings are tried by express or implied consent of the
parties, they shall be treated in all respects as if they had been raised in the pleadings.”52
Nothing in Civil Rule 15(b) prohibits the superior court from amending the pleadings
sua sponte. “Application of [Civil Rule 15(b)] is appropriate . . . when evidence
supporting the amendment was offered at trial . . . with the opposing party’s express or
implied consent . . . .”53 “In determining implied consent, prejudice to the party opposing
amendment is relevant.”54

       51
              See Alaska R. Civ. P. 15(b).
       52
              Id.
       53
              Alderman v. Iditarod Props., Inc., 32 P.3d 373, 396 (Alaska 2001).
       54
             Id. (citing 6A CHARLES A LLAN W RIGHT , A RTHUR R. M ILLER & M ARY K AY
K ANE , FEDERAL PRACTICE AND PROCEDURE § 1493 (2d ed. 1990)).

                                            -20-	                                       7003

              Reviewing the circumstances here, we find no abuse of discretion.55
Timmerman testified that he was MacDonald Miller’s sole owner. He also testified that
when he entered into the contract with Ranes he was representing himself and his
company. Part of the agreement he entered into with Ranes involved MacDonald Miller
forgiving the remaining balance owed for work MacDonald Miller had done on Ranes &
Shine’s building. Although Timmerman paid the additional $18,000 with a personal
check and not a corporate check, he testified this was only a matter of convenience. We
also note that Ranes & Shine occasionally referred to MacDonald Miller as if
MacDonald Miller were the party asserting claims against it and that Ranes & Shine’s
defense does not appear to have been predicated on Timmerman being an improper
plaintiff.
              Based on the evidence presented, the way the parties tried their case, and
the lack of prejudice to Ranes & Shine, we hold that the superior court did not abuse its
discretion when it sua sponte amended the pleadings to substitute MacDonald Miller as
the third-party plaintiff.
       D.	    The Superior Court Did Not Abuse Its Discretion When It Permitted
              Ranes To Testify Telephonically.
              Leading up to the trial there was significant confusion regarding whether
and how Ranes would testify because he was in federal custody outside of Alaska.
MacDonald Miller had indicated it intended to depose Ranes telephonically, but later
asked for a 60-day continuance to determine whether Ranes would testify at trial. The
superior court suggested deposing Ranes but also offered to help facilitate Ranes’s
appearance at trial.
              A month before trial was to start, MacDonald Miller filed a witness list
indicating it intended to have Ranes testify telephonically. Ranes & Shine filed an

       55
              Cf. id. at 380 (reviewing amendm ent of pleadings for abuse of discretion).

                                          -21-                                     7003
objection to Ranes appearing telephonically based on MacDonald Miller’s failure to
comply with the civil rules. On the first day of trial, the superior court ruled it would
allow Ranes to testify telephonically and stated that, while counsel for Ranes & Shine
“object[ed] that the I’s aren’t dotted and the T’s aren’t crossed[,] . . . in substance rather
than form [Timmerman’s motion was] compliant.”
              Ranes & Shine appeals that decision, asserting that (1) it was prejudiced by
the superior court’s decision to permit Ranes to testify telephonically because it was
unable to confront him with exhibits; (2) Timmerman filed the notice too close to trial;
and (3) it was “led . . . to believe that the purpose of the sixty[-]day continuance in
January 2013 was to facilitate the deposition of Ranes.” We review the superior court’s
decision to grant a motion to permit telephonic testimony for abuse of discretion.56 And
we have previously noted that procedural rules, such as those providing for telephonic
testimony, “should be interpreted liberally in order to avoid determinations based on
technicalities.”57
              We hold the superior court did not abuse its discretion in permitting Ranes
to testify telephonically. Alaska Rule of Civil Procedure 99(a) provides that the court
may allow a witness “to participate telephonically in any hearing or deposition for good
cause and in the absence of substantial prejudice to opposing parties.” And in a case
presenting similar issues, we determined that it was not an abuse of discretion for the
superior court to undertake a good-cause analysis that considered the cost, time, and
inconvenience of transporting a prisoner for in-person testimony.58 We affirmed the
superior court’s finding that it would not prejudice the inmate — who was a party — to

       56
              Silvers v. Silvers, 999 P.2d 786, 789 (Alaska 2000).
       57
              Rollins v. Leibold, 512 P.2d 937, 941 n.8 (Alaska 1973).
       58
              Midgett v. Cook Inlet Pre-Trial Facility, 53 P.3d 1105, 1113 (Alaska 2002).

                                            -22-                                        7003

participate telephonically at trial, as opposed to being physically present in court.59
             Here, the superior court made a brief good-cause finding that Ranes was
incarcerated out of state. The court also noted that it would work with the parties to
address any problems arising out of Ranes’s telephonic participation. Our review of
Ranes’s testimony reveals that Ranes & Shine never requested such help or complained
of being unable to show Ranes an exhibit. If Ranes & Shine had asked for assistance,
we believe the court would have tried to resolve any issues as it had previously offered
to do. Given that there was good cause to permit Ranes to testify telephonically and
Ranes & Shine has not demonstrated any prejudice, we hold that the court did not abuse
its discretion in allowing Ranes to testify telephonically.
      E.	    The Superior Court Did Not Err When It Awarded Attorney’s Fees
             And Costs To MacDonald Miller.
             Ranes & Shine also argues that the superior court abused its discretion in
awarding MacDonald Miller attorney’s fees and costs because Timmerman — not
MacDonald Miller — actually incurred the charges in this case. But any attorney’s fees
or costs Timmerman incurred were incurred for MacDonald Miller’s benefit, and the
evident unity of interests between Timmerman and MacDonald Miller that rendered
MacDonald Miller’s substitution proper similarly supports the award of attorney’s fees
and costs to MacDonald Miller.60 Therefore, the superior court did not err when it
awarded MacDonald Miller’s attorney’s fees and costs.61

      59	
             Id.
      60
              See BP Pipelines (Alaska) Inc. v. State, Dep’t of Revenue, 327 P.3d 185,
192 (Alaska 2014) (“[O]ur case law has long made it clear that, regardless of how parties
are formally arranged, fees and costs may be awarded based on actual adversity of
interests.”).
      61
             Ranes & Shine also appears to challenge the superior court’s decision to
                                                                       (continued...)

                                           -23-	                                   7003

V.    CONCLUSION
             We AFFIRM the superior court in all respects except its decision to dismiss
MacDonald Miller’s misrepresentation claim against Ranes in his individual capacity.
We REVERSE the dismissal as to Ranes and REMAND for further proceedings
consistent with this opinion.

      61
         (...continued)
enhance the fee award. But we do not address that argument here because it was first
raised in Ranes & Shine’s reply brief. Sumner v. Eagle Nest Hotel, 894 P.2d 628, 632
(Alaska 1995).

                                         -24-                                     7003