The Lambs sued John's Heating Service in December 1993, alleging that it failed to repair their furnace during an October 1991 service call or warn them of the dangers it posed, causing them to suffer carbon monoxide poisoning. A jury found for the Lambs, but in John's Heating's first appeal we remanded for application of the discovery rule to determine whether the two-year statute of limitations barred the Lambs' claims.
II. FACTS AND PROCEEDINGS
This is the second time we have considered the timeliness of the lawsuit brought by Michael Lamb and Cynthia Johnson-Lamb against John's Heating Service.
The Lambs moved into a house in Kodiak in August 1991.
The Lambs promptly replaced their furnace but continued to suffer problems that they later attributed to chronic carbon monoxide exposure.
In mid-November 1993 a Georgia neuropsychologist recommended more tests because he thought the March examinations strongly indicated carbon monoxide inhalation for both Lambs. The Anchorage neuropsychologist performed more tests in late November, including those the Georgia expert recommended. Upon review of the new test results, the Georgia expert, by letter of December 10, expressed his opinion that the test results "show clear and convincing signs" of neurocognitive and neurobehavioral impairment as a consequence of carbon monoxide exposure.
The Lambs filed suit against a number of defendants, including John's Heating, on December 23, 1993.
Trial followed. The jury returned a verdict for the Lambs. John's Heating appealed, raising various issues, including the statute of limitations issue.
On remand, the superior court conducted an evidentiary hearing and held that the suit was timely. Its order contained these findings of fact:
The superior court also found that:
Having made these findings, the court then stated: "The Lambs were on inquiry notice more than two years before suit was filed in December 1993. However, their inquiry was reasonable, but unsuccessful until January of 1993. The statute began to run at that time, and suit was filed well within the limitations period." The superior court did not determine the precise date of inquiry notice.
The superior court concluded that "[t]he matter was brought within the statute of limitations."
John's Heating appeals.
A. Standard of Review
We review findings of fact under the clearly erroneous standard.
"This court applies its independent judgment in reviewing a lower court's application of law to undisputed facts."
B. The Superior Court Did Not Err in Concluding that the Lambs' Complaint Was Timely.
1. John's Heating's argument
John's Heating contends that the superior court committed legal error on remand and that its findings of fact establish as a matter of law that the lawsuit is time-barred by the applicable two-year statute of limitations, AS 09.10.070(a).
John's Heating derives its multi-part analysis from Cameron v. State
To support its contention that the Lambs exceeded the reasonable time for filing suit, John's Heating asserts that eight and one-half months (the interval between the January 31, 1993 revelation and the second anniversary of Galloway's October 15, 1991 service call) left the Lambs "plenty of time" in which to sue. It refers us to a March 15, 1993 letter written by the Lambs' lawyer notifying a realty company that the Lambs intended to bring claims for exposure to carbon monoxide in the house. From this John's Heating reasons both that the Lambs had the assistance of counsel months before the complaint was filed and that their lawyer "understood the instrument of harm." It also asserts that the Lambs bore the burden on the issue but failed to explain why they did not file suit before December 23, 1993.
2. The discovery rule in Alaska
Resolution of John's Heating's contentions requires us to apply our iteration of the discovery rule. As we described that rule in Cameron and John's Heating I, if an element of a cause of action is not immediately apparent, the discovery rule determines when the statute of limitations begins to run. Our discovery rule also potentially determines whether, and for how long, the running of the statute may be tolled. It therefore may also determine whether an action is timely even if suit was filed more than two years after the cause of action accrued and the statute began running. As we described it in Cameron, our discovery rule provides that:
John's Heating's argument here hinges on the assumption that, as a result of the superior court's apparent determination that the Lambs were on inquiry notice before December 22, 1991, the two-year statute of limitations had run before the Lambs filed suit. It also hinges on the contention that the superior court did not make the requisite findings for applying the third part of the discovery rule, and could not have done so. John's Heating concludes that because the third part of the discovery rule therefore did not apply, the two-year statutory limitations period, having been triggered by inquiry notice before December 22, 1991, could not be extended to December 23, 1993.
John's Heating's argument requires understanding of our remand instructions in John's Heating I after we held that it was error to grant summary judgment to the Lambs on the statute of limitations issue.
3. The findings of fact on remand establish that the Lambs were not on inquiry notice before early 1993; their December 1993 complaint was therefore timely.
John's Heating's appellate arguments presuppose that the Lambs were on inquiry notice before December 22, 1991. Alaska Statute 09.10.070(a) gave them two years in which to sue after their cause of action accrued.
The Lambs respond that they were not on inquiry notice before December 22, 1991 and
John's Heating argues in reply that the Lambs are really attempting to challenge the superior court's factual finding on remand that they were on inquiry notice more than two years before they filed suit. It also asserts that they are bound by that finding of fact because they have not cross-appealed, because the finding is not clearly erroneous, and because in John's Heating I this court recognized that there was a genuine issue of fact about whether the Lambs were on inquiry notice more than two years before they sued.
The absence of a cross-appeal does not prevent appellate consideration of the Lambs' response. The Lambs raise a valid issue about exactly what the superior court ruled. And even if their appellate position required us to consider whether the superior court clearly erred, they seek an affirmance of the judgment; they can properly argue that the superior court reached the right result for the wrong reason with respect to issues litigated below.
Nor did we say anything in John's Heating I that forecloses the Lambs' response. We there discussed a genuine issue of fact in context of the summary judgment originally entered against John's Heating on the statute of limitations issue, and remanded so the superior court could conduct an evidentiary hearing on the issue before deciding the timeliness dispute.
We therefore turn to the superior court's comments regarding the inquiry notice issue. The Lambs in essence contend that the superior court's determination that they had been on inquiry notice of soot problems was not a determination that they had been on inquiry notice of a possible chronic carbon monoxide exposure claim. That reading of the court's decision is plausible. The court stated that "[a]t some point they were on inquiry notice that there was a problem.... The Lambs were on inquiry notice about soot problems from the furnace much earlier." (Emphasis added.) Because the Lambs moved into the house in August 1991, and Tim Galloway's visit was in October 1991, the court appears to have been distinguishing between what it called "inquiry notice about soot problems" and the sort of inquiry notice that is legally significant. The court added that "[t]his is not a case about a dirty house; it is a case about brain damage." It also described the Lambs' diligence in inquiring, the reasonableness of their inquiry, and their lack of success in discovering a possible causal relationship before January 1993, at the earliest. Thus, when the court stated that "[t]he Lambs were on inquiry notice more than two years before suit was filed in December 1993," the court may have been referring to their notice of cleanliness problems and their symptoms, not to notice that caused the statute of limitations to begin running. This reading is also consistent with the superior court's statement that the two-year statute of limitations began to run in January 1993. Had the court truly meant to rule that inquiry notice predated December 22, 1991, it would have been incorrect to have concluded that the statute first began to run in January 1993. Instead, as John's Heating contends, it would have been necessary to decide whether the Lambs filed suit within a
But even if the superior court's "inquiry notice" comments are read as John's Heating reads them, they do not justify reversal here. There is no reason to think that the superior court's undisputed findings of fact, quoted above in Part II, about what the Lambs did, the reasonableness of their inquiry, and their lack of success until January 1993 at the earliest, were clearly erroneous.
Because the Lambs filed their complaint within the two-year period, there is no reason to consider John's Heating's argument that the Lambs did not sue within a reasonable time after they discovered or should have discovered all the elements of their cause of action.
C. The Lambs' Concededly Incorrect Attorney's Fees Awards Require Correction.
The superior court awarded the Lambs the attorney's fees proposed by the Lambs' counsel: $50,969.13 to Michael and $57,587.02 to Cynthia.
Although John's Heating argues that any issue about the Lambs' attorney's fees should be moot because it is entitled to a favorable judgment, it alternatively contends that correct application of Alaska Civil Rule 82 yields attorney's fees of $48,969.13 for Michael and $55,587.02 for Cynthia, rather than the amounts the court awarded. The Lambs' lawyer concedes that she erroneously calculated the fees under Rule 82, and agrees with the corrections proposed by John's Heating.
We therefore remand for the corrections John's Heating proposes. Michael is entitled to an attorney's fees award of $48,969.13 and Cynthia is entitled to an attorney's fees award of $55,587.02.
For these reasons, we REMAND for correction of the attorney's fees awards, but otherwise AFFIRM the judgment below.