MAASSEN, Justice.
A jury found Ronald Brooks liable to his former brother-in-law, Timothy Hollaar, for the full amount of loans that had been memorialized by four promissory notes. On appeal, Ronald argues that the trial court erred in allowing Timothy to recover more than nominal damages, since Timothy was not the real source of the money and intended to pay any recovery to the family members who supplied it. Ronald also argues that the trial court erred by failing to make special findings of fact on Timothy's promissory estoppel claim. Finally, Ronald argues that the trial court erred in naming Timothy the prevailing party. Because Timothy could lawfully sue to recover the loans, the promissory estoppel claim was properly submitted to the jury, and Timothy was the prevailing party, we affirm the judgment.
Ronald Brooks and Carmen Hollaar were married in 1989. In 1991, as tenants by the entirety, they purchased a parcel of real property on Goldstream Road in Fairbanks. For more than a decade, they lived in a trailer on the property with their children.
These loans were memorialized in three promissory notes dated September 17, 2005, January 5, 2006, and February 13, 2006, and signed by both Ronald and Carmen. The notes recite that the loans were to be repaid to Timothy on December 31, 2006, or upon conveyance of the property, whichever came first.
Ronald and Carmen separated in 2005, and Ronald left the Goldstream property. Timothy continued to provide money to Ronald and Carmen between February and July 2006. Again the Hollaars were the source of these additional funds, which totaled $81,991. This amount was memorialized in a fourth promissory note dated August 31, 2006, and signed only by Carmen. In December 2006, Carmen, but not Ronald, signed a deed of trust which purported to secure all four promissory notes with the Goldstream property.
In January 2008, having not yet been repaid on any of the promissory notes, Timothy foreclosed on the Goldstream property pursuant to his deed of trust. He purchased the property at the foreclosure sale for a credit bid of $269,226.
Timothy brought suit against Ronald in March 2009, asking that the superior court award him half the Goldstream property and half its value, the full value of the property, or all the money owed on the four promissory notes. The superior court, in ruling on an early motion to dismiss, held that neither Ronald nor Carmen had the right to unilaterally convey an interest in the Goldstream property since it was their marital residence. The court held that Carmen's deed of trust was therefore void and that Timothy owned no interest in the Goldstream property despite his ostensible purchase of it at the foreclosure sale. The court held that Timothy was simply an unsecured creditor and that he could sue on the promissory notes.
After a jury trial, Ronald was found liable to Timothy on the first three promissory notes, those Ronald had signed, under a contract theory. As for the fourth promissory note, the one signed only by Carmen, the jury answered "Yes" to four questions on the verdict form asking whether the elements of promissory estoppel were met
We review questions of law de novo, using our independent judgment.
Ronald argues that Timothy cannot recover more than nominal damages because he admitted both that he had received the loan funds from the other members of his family, the Hollaars, and that he planned to give them any recovery from this lawsuit in repayment. According to Ronald, these admissions prove that his promise to pay Timothy was merely what the Restatement calls a "gift promise" and that Timothy had no economic interest in its performance; under this theory it was the other Hollaars who were the third-party "donee beneficiaries" of the promise and had the right to sue for its breach.
But Timothy's economic interest in payment of the loans is obvious: he is the named payee on the promissory notes. Ronald and Carmen promised to repay him the money. Whether the funds came to Timothy originally from a bank or from other family members, it is undisputed that he is the one who transferred the funds to Ronald and Carmen and who secured, by contract, the right to repayment. Timothy can sue to collect the loans.
We also reject the argument that the Hollaars are properly characterized as donee beneficiaries of the loan contract with Ronald and Carmen. The Hollaars had a separate legal relationship with Timothy, either creditor-borrower or principal-agent. If the Hollaars are viewed as Timothy's creditors, they loaned him money in exchange for his promise to pay them back when he was repaid by Ronald and Carmen. We have recognized the "established rule ... that `a contract to provide a borrower with funds to pay his debts does not give creditors a right to enforce
We could alternatively view Timothy as the Hollaars' agent for the purpose of making and collecting on the loans; that is how Timothy's complaint characterizes his role, and Ronald urged the court to deem this to be judicially admitted. If Timothy is the Hollaars' agent, the Hollaars are not third-party beneficiaries of the loan to Ronald but instead are the actual parties in interest.
Ronald argues that he will be subject to double liability if Timothy is allowed to recover, because he theoretically will be liable both to Timothy and to the other Hollaars for the same funds. Ronald's fears are unfounded. As discussed above, if the Hollaars are viewed as Timothy's creditors, they have no direct interest in his loans to Ronald and cannot sue to collect them. If Timothy made the loans as the Hollaars' agent, then he sued as their agent and takes the recovery as a fiduciary for the Hollaars, who cannot collect the same funds from Ronald again.
As noted above, the jury found that all four elements of promissory estoppel existed with regard to the fourth promissory note and therefore found Ronald liable on the note despite the fact that it had been signed only by Carmen. The trial court made no separate factual findings on the issue but stated, on the record, that it agreed with the jury's decision "in all aspects" and that justice demanded enforcement of Ronald's promise. Ronald contends that promissory estoppel had to be decided by the court, not the jury; that the jury was merely advisory on this issue and Timothy is judicially estopped from arguing otherwise; and that the court's oral statement that it agreed with the
Advisory juries are addressed by Civil Rule 39(c), which allows the trial court to empanel one in an action "not triable of right by a jury." If Timothy's promissory estoppel claim was "triable of right by a jury," then the jury could not have been advisory; the claim was properly presented to the jury to decide; and the court's post-verdict adoption of the jury's findings, though undoubtedly prudent for purposes of appellate review, was unnecessary, making irrelevant the requirement of special findings by the court under Civil Rule 52(a).
A civil litigant's right to a jury depends on the relief sought. "[W]here equitable relief is sought ... this court has disallowed the right to a trial by jury. But, where damages or other relief at law is sought this court has allowed a jury trial."
Ronald asserts that Timothy asked the trial court to make an independent determination of the fourth element of the promissory estoppel doctrine and is now judicially estopped from arguing that the jury was anything other than advisory on this issue. "Judicial estoppel bars `a party from contradicting previous declarations made during the same or an earlier proceeding if the change in position would adversely affect the proceedings or constitute a fraud on the court.'"
In the pretrial exchange on which Ronald relies for this argument, however, Timothy's counsel asked that the court "let the jury hear this entire case." He requested that the jury be instructed on promissory estoppel and that the court make a determination, post-verdict, as to whether "it's going to accept the jury verdict," all with the goal of allowing the parties to "address ... after the fact" whether promissory estoppel was properly for the court or the jury. The court expressly adopted this prudent approach:
In later debate over jury instructions, Timothy's counsel repeated his understanding "that everything goes to the jury and [the court] also ... [was] going to, you know, make a determination independently." The court observed that this was "the safest course." When Ronald's counsel argued that there was "no right to a jury trial at all on promissory estoppel," the court asked Timothy's counsel again whether he was contending that "the jury should decide number 4, whether justice requires enforcement;" Timothy's counsel answered, "I do." Timothy's position was thus consistent throughout: that the jury was to decide the entire claim, with the court making a separate finding of the fourth element just in case it was later determined that it was properly for the court, not the jury, to decide. In short, Timothy's counsel never made a "declaration," later contradicted, that could form the basis for judicial estoppel. Timothy is not estopped
Ronald also argues that the trial court erred in its handling of his unclean hands defense. Ronald describes the basis of his defense as "Timothy's bad conduct ... in entering into an illegal and void deed of trust with Carmen" in December 2006, thus clouding title and unduly complicating the property division in the divorce. Ronald argues that Civil Rule 52(a) required the trial court to make special findings of fact when rejecting the unclean hands defense.
We disagree. Rule 52(a) requires the trial court to make such findings only when a party has properly asserted the defense and presented evidence to support it.
Second, Ronald has presented no evidence that would support the defense. "To successfully raise the unclean hands defense under Alaska law, a defendant must show: (1) `that the plaintiff perpetrated some wrongdoing'; and (2) `that the wrongful act related to the action being litigated.'"
For both of these reasons, the trial court did not err by failing to make special findings on the unclean hands defense.
Finally, Ronald argues that the trial court abused its discretion when it decided that Timothy was the prevailing party. "A prevailing party is `one who successfully prosecutes the action or successfully defends against it, prevailing on the main issue, even though not to the extent of the original contention.'"
Timothy sued to recover on the debt. Ownership of the Goldstream property was at issue only because Timothy alleged that the property secured the debt. Although it is true, as Ronald observes, that Timothy was found to have no security interest in the property because the deed of trust was void, Timothy nonetheless recovered the total amount of the debt, in excess of the property's value. Even if ownership of the Goldstream property is "a main issue" in the case, as Ronald urges, the trial court did not abuse its discretion when it found on these facts
We AFFIRM the decision of the superior court.
CARPENETI, Justice, not participating.