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Law Offices of Steven D. Smith v. Borg-Warner Security Corp.12/23/1999
[No. 5222 - December 23, 1999]
Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, John Reese, Judge.
I. INTRODUCTION
This is the fourth appeal to arise from a 1986 airplane crash apparently caused by a defective carburetor made by Borg-Warner Security Corporation (Borg-Warner). The first two appeals concerned the superior court's 1989 dismissal, on statute-of-limitations grounds, of a wrongful-death suit against Borg-Warner. Attorney Steven Smith, representing the estate of passenger Merrett Palmer, had filed the suit. Smith learned after the suit's dismissal that Borg-Warner had fraudulently concealed evidence of the allegedly defective carburetor. In 1994, after the estate's successful second appeal, the superior court held on remand that Borg-Warner's conduct excused the estate's lateness in filing suit. The estate eventually recovered five million dollars. Smith, however, was paid nothing. While its appeals were pending, the estate had terminated Smith's contingent-fee contract and sued him for malpractice. In settling that suit, Smith had waived any claim for attorney's fees based on his contingent-fee contract with the estate.
In 1994 Smith sued Borg-Warner for fraud and intentional interference with contract. The superior court dismissed his claims on the basis of the statute of limitations. Applying the two-year limitation period for torts, and the discovery rule, the court held that by the time Smith had lost his contingent-fee contract, been sued for malpractice, and learned of Borg-Warner's fraudulent concealment, he had discovered his potential claims against Borg-Warner. Unfortunately for Smith, that time was 1990.
Smith argues on appeal that he could not have sued until the superior court reinstated the estate's claim in 1994. He reasons that he had been collaterally estopped to argue, and/or had not yet discovered, that Borg-Warner's fraud, and not his own negligence, had been the legal cause of the estate's tardiness in filing suit. Smith also argues that the six-year statute of limitations for actions for injury to personal property governs his claims, not the two-year tort statute, because he seeks to recover economic losses. Finally, he claims that Borg-Warner's misconduct should estop it to plead or should equitably toll the statute of limitations. We affirm.
II. FACTS AND PROCEEDINGS
A. Preface
The complex history of this second-generation lawsuit is necessary to provide the context for the issues before us. It involves two streams of sometimes overlapping events, each of which has its own causal sequence. One is the Palmer estate's ultimately successful claim against Borg-Warner, including five key rulings by the superior court and this court from 1989 to 1994. The other is Smith's litigation with the estate and with Borg-Warner and its attorneys. We first recount the history of Palmer v. Borg-Warner from 1986 to 1994, and then return to 1986 and recount Smith's interactions with the estate, Borg-Warner, its counsel, and the courts, indicating the stage of and then-in-force holdings in Palmer v. Borg-Warner.
B. The Palmer v. Borg-Warner Litigation
The following account, with alterations as noted in the margin, is from this court's second Palmer v. Borg-Warner Corp. opinion (Palmer II). We stress that Borg-Warner's fraudulent concealment was not, as in many such cases, a response to the underlying tort, i.e., the 1986 crash that killed Palmer. It instead consisted of Borg-Warner's 1981 deception of the Federal Aviation Administration (FAA) in order to conceal a manufacturing defect that later caused, inter al
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