MAASSEN, Justice.
An elderly woman hired an in-home care company to assist her with day-to-day living. The company provided an in-home assistant who was later discovered to have stolen the woman's jewelry and prescription medication. The woman sued both the company and the assistant for conversion and assault, among other causes of action, and accepted an offer of judgment from the company. The assistant did not appear in the superior court.
Eventually the woman applied for entry of default against the assistant "on the condition that once default is entered[,] ... damages are to be determined by a jury." The superior court granted a default but ruled that trial on damages would take place without a jury. After a bench trial, the court found that the assistant's actions had caused the woman no additional suffering and therefore awarded her no damages.
The woman appeals. We affirm the superior court's decisions on the measure of damages for conversion and discovery sanctions. But we conclude it was an abuse of discretion to grant the woman's application for default while denying the condition on which it was based — retaining her right to a jury trial. We also conclude that it was error to award no damages or attorney's fees after entry of default when the allegations of the complaint and the evidence at trial put causation and harm at issue, and that the allegations of the complaint could have supported an award of punitive damages. We therefore vacate the superior court's judgment and remand for further proceedings.
Because of her advanced age and declining health, Verna Haines hired Comfort Keepers, Inc. to provide in-home care. Comfort Keepers assigned its employee Luwana Witzleben to work as Verna's personal assistant. Witzleben stole Verna's jewelry and prescription pain medication and, to conceal her theft of the medication, substituted pills that looked similar but had not been prescribed.
In December 2011 Verna filed a complaint against Comfort Keepers and Witzleben in superior court, alleging claims for negligent hiring, conversion, assault and battery, breach of contract, and unjust enrichment. Along with her complaint Verna filed a timely demand for a jury trial.
Verna served discovery requests on Witzleben, and after receiving no response filed a motion to compel. She also asked the court to hold that Witzleben's failure to timely respond to the discovery requests waived any objection to them. The court granted Verna's motion to compel but declined to impose sanctions, citing Witzleben's self-represented status and some doubt as to whether she "fully understood her [discovery] obligation."
Another year passed without any response from Witzleben. Verna died in the meantime, and Peter Haines (Haines), the personal representative of her estate, was substituted as plaintiff. In April 2014 the superior court invited Haines to apply for entry of default against Witzleben under Alaska Civil Rule 55(c). In another order issued the same day, the court granted Comfort Keepers' motion to strike Haines's unjust enrichment claim, which was based on the theory that the damages for conversion of Verna's medication should be calculated by reference to its "street value." Rejecting this theory, the court stated that "[t]here is no basis for permitting a party to recover the value realized by a defendant through illegal activity" and held that any damages for the medication's conversion were limited to "the fair market value or value to [Verna] at the time it was taken."
The default judgment hearing took place in December 2014, and the only issue was damages. The court heard testimony from several witnesses, including Verna's children, on the extent of her non-economic harm, but Haines did not attempt to prove economic damages. The court's subsequent written decision awarded Haines no damages at all, finding that Witzleben's tortious conduct, though "callous," caused Verna no pain or suffering beyond what she was already undergoing. The court later entered final judgment against Witzleben as well as a satisfaction of judgment against Comfort Keepers — though no final judgment against Comfort Keepers had been entered on the accepted Alaska Civil Rule 68 offer of judgment.
Haines appeals. He argues that the superior court erred when it (1) struck Haines's claim for unjust enrichment; (2) denied oral argument on the motion to strike; (3) "improperly denied [his] request for an order [stating] that any objections to discovery requests... were waived"; (4) denied Haines a jury trial on damages; (5) entered its damages award without considering the legal effect of the default against Witzleben; (6) failed to award punitive damages; (7) failed to award Haines attorney's fees; and (8) entered a satisfaction of judgment against Comfort Keepers "without having ever entered final judgment."
Comfort Keepers does not address most of the issues raised on Haines's appeal because they involve only Witzleben. It does address the court's grant of its motion to strike Haines's unjust enrichment claim, Haines's request for oral argument on the motion, and the satisfaction of judgment. Witzleben does not appear in this appeal.
"We decide constitutional issues of law" such as a party's right to a jury trial "by applying our independent judgment."
We review denials of oral argument on non-dispositive motions, sanctions for discovery violations, and awards of attorney's fees for abuse of discretion.
In the discussion that follows we conclude that the superior court did not err in striking Haines's claim for unjust enrichment, nor did it abuse its discretion in declining to award him sanctions and attorney's fees during the course of discovery. But we conclude it was an abuse of discretion to enter a default while denying Haines a jury trial on damages when Haines had expressly conditioned his application for default on retaining the jury trial right. We also conclude that the superior court erred in its findings on damages and attorney's fees in the proceedings that followed. Although these last issues might not arise again on remand given the procedural options, they are significant, and we address them now for the sake of efficiency.
On Comfort Keepers' pretrial motion the superior court struck Haines's claim for "unjust enrichment," which sought to measure damages by the "street value" of the medication Witzleben converted rather than fair market value or some other traditional measure of Verna's actual loss. The court concluded that "[t]here is no basis" in Alaska law "for permitting a party to recover the value realized by a defendant through illegal activity." This was not error.
"Unjust enrichment" is not a cause of action but a prerequisite to recovery under the doctrine of restitution.
But Haines did not attempt to prove economic damages at trial under these or any other measures. Instead he focused entirely on noneconomic damages, and the superior court, finding no proof of noneconomic harm, therefore awarded no damages at all. But the lack of a damage award does not mean that Haines lacked an adequate remedy at law. He could have presented evidence of economic damages but chose not to once the court had ruled against him on his favored measure of damages. And as for noneconomic harm, he was awarded no damages because the court found that the evidence was insufficient, not because damages were not legally available if proven. Because Haines had an
Haines also argues that Comfort Keepers' motion to strike the damages remedy was, in effect if not in form, an Alaska Civil Rule 12(b)(6) motion to dismiss on which the court was obliged to accept as true all well-pleaded allegations of his complaint, including his allegation that Witzleben was unjustly enriched by her wrongful conduct.
Finally, Haines argues that public policy supports his theory that damages in this context should be measured by the amount of the defendant's gain rather than the amount of the plaintiff's loss — the usual measure in tort cases.
Haines contends that the superior court abused its discretion in two discovery rulings, but we find no abuse of discretion in either. In the first, the court declined to hold that Witzleben waived any objections to written discovery by her failure to timely respond. Haines argues that this was error because Witzleben never showed the "good cause" required to excuse her nonresponse.
Second, Haines asserts that he was wrongly denied an award of attorney's fees after the court granted his motion to compel discovery from Witzleben. Alaska Civil Rule 37(a)(4)(A) directs the court to award "reasonable expenses .... including attorney's fees" to the successful proponent of a such a motion. But the rule also allows a court to decline to award fees if it "finds ... the opposing party's nondisclosure ... substantially justified, or [if] other circumstances make an award of expenses unjust."
The next issue we address involves Haines's right to a jury trial on damages following entry of default against Witzleben. When Haines applied for entry of default, his application was made expressly "on the condition that once default is entered ... damages are to be determined by a jury." The superior court granted the application for default but ruled that a damages hearing would occur without a jury. Haines argues that article I, section 16 of the Alaska Constitution granted him a right to a jury trial which he did not waive by seeking the entry of default. We disagree that he had a right to a jury trial following default. But because his application for default was expressly conditioned on keeping a jury trial, we agree it was an abuse of discretion to grant the default while rejecting the condition.
The Alaska Constitution guarantees the right to trial by jury "[i]n civil cases where the amount in controversy exceeds two hundred fifty dollars ... to the same extent as it existed at common law."
Accordingly, because the parties in this case did not consent to proceed without a jury, the first issue we address is whether Haines had a right to a jury trial on damages following default "under the state constitution or statutes of the state,"
We first observe that there are no "statutes of the state" that grant a right to a jury trial in these circumstances. The legislature, by statute, has provided for juries in various types of special proceedings,
In defining the reach of the constitutional right, we must determine whether the right to a jury following default "existed at common law." We have noted that "[a]t common law, the existence of a right to trial by jury depended upon whether the claim asserted was legal or equitable in nature."
Courts have disagreed on whether a jury demand survives the entry of default. One federal court surveyed the relevant precedent and concluded that "[c]aselaw dating back to the eighteenth century ... makes clear that the constitutional right to jury trial does not survive the entry of default."
A later opinion by the Oregon Supreme Court concluded that whether to request a jury's input on damages in cases of default "to inform the mind or conscience of the court" had always been a matter of judicial discretion rather than of right, in both English and American law.
The historical common law rule in this context is thus subject to different interpretations. But the common law as it existed at the time of the adoption of the Alaska Constitution is clearer.
Although Haines did not have a right to a jury trial following default, he was not obliged to seek a default at all; he could have proceeded to trial without first seeking entry of default and thereby preserved his right to have a jury decide the case.
Civil Rule 38(a) "preserve[s]" the "right of trial by jury ... inviolate," and we have emphasized the importance of the
The record in this case contains no evidence of "prior notice" to Haines that by seeking an entry of default he would extinguish his right to a jury trial; in fact, the conditional nature of his application shows that he had no such understanding of the consequences. And as noted above, the rules do not require a party to accept a default proceeding he did not ask for. Civil Rule 55(a)(1) allows a trial court to enter a default against a party who "has failed to appear and answer or otherwise defend as provided by these rules"; it is captioned "Application for Default," and it strongly implies that the process is initiated not by the court but by "[t]he party seeking default," who must show facts "by affidavit or otherwise" that entitle the party to the relief sought. Civil Rule 55(c) addresses default judgments in cases involving damage claims that cannot easily be reduced to a sum certain, and it describes the initiation of the process more clearly by stating that "the party entitled to a default judgment shall apply to the court therefor." The rule goes on to state:
The effect of the rule is that when a party seeks a default judgment the court has discretion as to how it will receive the evidence necessary to determine damages or to resolve other outstanding issues of fact. But the default judgment process does not preclude a party from telling the court, in effect: "I would like a default but not if it means that I give up my right to a jury trial on damages" — as Haines did here.
"There has always been a strong policy favoring jury trials in Alaska."
If a party applies for default expressly conditioned in such a way, the court, in the exercise of its discretionary authority under Rule 55(c)(1), should first ascertain whether submitting damages to a jury would be "necessary and proper." If it would be, then the court should enter the requested default and allow the jury to determine damages.
We hold that in this case it was an abuse of discretion to grant Haines's application for default without giving effect to the express condition upon which the application was made. The superior court was not bound to accept the condition; it could have denied the conditional application for default and required the entire case to proceed to trial. But Haines should not have been deprived of a jury trial when he was expressly attempting to preserve that right. We therefore vacate the entry of default and remand to the superior court for further proceedings.
Haines will have the opportunity on remand to apply again for entry of default while preserving his right to a jury trial on damages. If he chooses not to do so, or if the court denies his conditional application, the case will proceed to trial on liability and damages and the discussion that follows will be largely irrelevant. But if Haines applies again for default and the court grants the conditional application, or if Haines decides to expressly waive the jury trial right, the fact-finder, whether court or jury, will be required to evaluate not only the evidence but also the allegations of the complaint in order to determine what facts have been established by the pleadings.
The superior court did not award Haines any damages despite the entry of default against Witzleben. It awarded no economic damages because Haines presented no evidence of the value of the converted medication,
Entry of default "establishes the well pleaded allegations of the complaint unless they are incapable of proof," "contrary to facts judicially noticed," or contrary to "uncontroverted evidence presented by the parties."
Haines's complaint alleged that Witzleben "caused [Verna] physical injuries" and "harm[ ]." Testimony at trial supported these allegations. Verna's daughter Elizabeth testified that she believed her mother was experiencing pain and sleeping problems while in Witzleben's care because she was not receiving the medications she was prescribed. She also testified that her mother experienced "some" pain and anxiety even when not in Witzleben's care, and the court relied on this testimony to conclude that Witzleben's theft of the medication made no difference to Verna's symptoms. But Verna's other daughter and her son-in-law testified that there were times Verna suffered inexplicable pain while in Witzleben's care; that it was "a logical deduction" that this was because she was not receiving her proper pain medication; that she also experienced sleeplessness and anxiety because she was not getting her prescribed diazepam; that these problems continued for several months while she was helpless to do anything about it; and that these problems contributed to a decline in her quality of life. Haines had no burden to prove these facts by a particular quantum of evidence; he only needed to "put the questioned allegation in controversy."
Once pain and suffering are proven, it is error not to award general damages.
Haines next argues that the superior erred in denying an award of punitive damages because the well pleaded allegations of his complaint established that Witzleben acted "with malice or bad motives" and "in reckless indifference to the interest of another person."
We note, however, that it was error for the superior court to hold that it could award no punitive damages because it had awarded no compensatory damages. As explained above, Haines was entitled to an award of noneconomic damages after entry of default because the court was bound to accept as true the complaint's well pleaded allegations of harm.
Alaska Statute 09.17.020 allows an award of punitive damages "if the plaintiff proves by clear and convincing evidence that
Haines sought an award of attorney's fees following the entry of final judgment. Although the court identified Haines as the prevailing party, it concluded that he was not entitled to attorney's fees because he received no damages. This conclusion is likely to change if Haines succeeds in recovering a judgment on remand.
The court also rejected Haines's reliance on AS 09.60.070 in support of his attorney's fees application. Under the statute, "a person who has been injured ... may recover from the offender full reasonable attorney fees ... if the injury ... resulted from ... a serious criminal offense."
Alaska Statute 11.41.230(a)(1) defines "assault in the fourth degree" as "recklessly caus[ing] physical injury to another person."
Because Haines's well pleaded allegations satisfy the elements of assault in the fourth degree, we hold that it was error not to award attorney's fees to Haines under AS 09.60.070.
We VACATE the superior court's entry of default and default judgment against Witzleben and REMAND for further proceedings