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Chambers v. Scofield

Supreme Court of Alaska

March 4, 2011

Reggie I. CHAMBERS, Appellant,
v.
Dana SCOFIELD as guardian of Curtis N. Carley, Appellee.

Page 983

Daniel W. Hickey and Anne M. Preston, Gruenstein & Hickey, Anchorage, for Appellant.

Bryon E. Collins, Bryon E. Collins & Associates, Anchorage, for Appellee.

Before: CARPENETI, Chief Justice, FABE, WINFREE, and STOWERS, Justices.

OPINION

STOWERS, Justice.

I. INTRODUCTION

A buyer bought a triplex from a seller. Two years later, the seller's daughter (who had been appointed to serve as his guardian) entered into a settlement agreement with the buyer to rescind the sale and compensate the buyer for the " fair market cost" of the improvements he had made to the property. In ruling on a motion to enforce the agreement, the superior court rejected the buyer's argument that the term " fair market cost" included compensation over and above the cost of labor and materials. The superior court also denied the buyer's motion to be named the prevailing party for purposes of Alaska Rules of Civil Procedure 79 and 82. Because the superior court's interpretation of the settlement agreement was not erroneous and the superior court did not abuse its discretion in declining to declare the buyer the prevailing party, we affirm.

II. FACTS AND PROCEEDINGS

Reggie Chambers purchased a triplex from Curtis Carley in 2006. Dana Scofield and Noelle Covington, Carley's daughters, were appointed Carley's co-guardians by court order in July 2007 due to Carley's mental condition. Several months later Scofield sued Chambers, alleging in part that Chambers had fraudulently induced Carley to sell the triplex for far less than its market value.

On October 3, 2008, the parties entered into a settlement agreement. The agreement rescinded the sale and attempted to restore the parties to the positions they would have been in had the sale not occurred. The agreement provided that Chambers would quitclaim the triplex to Scofield and credit her with rents he received plus an additional $2,000. It also provided that Scofield would pay Chambers: (1) the $20,000 Chambers had already paid for the triplex, (2) a property management fee calculated as 10% of the actual rents collected, (3) for the utilities, taxes, and insurance actually paid, and (4) the " fair market costs" of repairs and improvements Chambers made to the interior and exterior of the triplex.

In order to determine the " fair market cost" of the repairs and improvements, the parties agreed to share the cost of a " neutral third party remodel appraiser." Scofield was to nominate the appraiser. If Chambers accepted Scofield's nominee, then that individual would perform the appraisal. If Chambers did not accept Scofield's nominee, then each party's nominations would be provided to the superior court and the court would decide.

Page 984

On October 14, 2008, Scofield's attorney informed Chambers's counsel of Scofield's two nominations. Chambers accepted Keith Halsey, one of Scofield's nominations, because his services were less expensive than the other candidate's. Around the same time, Chambers's attorney also indicated to Scofield's attorney that he would be out of town for a month on his honeymoon and would prefer not to be disturbed with questions relating to the case. Scofield's attorney apparently asked Chambers's attorney if he would like to help instruct Halsey regarding the inspection, but Chambers's attorney declined, explaining that he was preparing to leave town and that the instructions in the settlement agreement were fairly straightforward. Scofield's attorney proceeded on her own to give Halsey instructions regarding the inspection. A week later Halsey inspected the triplex. Pursuant to the settlement agreement, which provided that each party had a right to attend the inspection, both Scofield and Chambers attended, along with representatives selected by each party.

Following the inspection Halsey called Scofield's attorney with several follow-up questions. Specifically, he wanted to know how to address various deficiencies he had discovered in the repairs Chambers had made. Scofield's attorney explained that because the parties had not expected these problems she could not offer specific guidance, but did ask him to take note of the deficiencies. Halsey prepared a two-page report. Halsey concluded that Chambers was entitled to a credit of $25,525 for the work performed on the triplex. Halsey acknowledged that the triplex had been substantially remodeled in recent years. But he observed that many repairs showed a " lack of craftsmanship" and that many of the renovations did not " demonstrate industry standards," which Halsey reflected in the estimates. He also asserted that the lack of municipal permits and inspections made any plumbing, electrical, and structural repairs obsolete. Halsey's report listed a number of specific deficiencies in the renovations, including a basement bedroom that illegally lacked an egress, a wheelchair ramp that lacked proper head-room, and a new roof that was not properly vented.

Halsey delivered the report to Scofield's attorney on November 7, 2008. Scofield submitted the report as an exhibit attached to her motion for enforcement of the settlement agreement on November 18, 2008. In response to Scofield's motion to enforce, Chambers moved for an extension of time, arguing that Halsey had neither written his report in good faith nor followed the settlement agreement's instructions. Superior Court Judge Morgan B. Christen held an evidentiary hearing to review Halsey's appraisal.

Halsey testified that prior to the inspection, Scofield's attorney had instructed him to:

go into the property, review the property, review the repairs, see if they were done to workmanship standards, see if they were things done that Mr. Chambers said were done, to evaluate them, and ... write up a report on it.

He also testified that when he called Scofield's attorney to clarify what she meant by " evaluate," she explained that his report should chronicle deficiencies in the property, including elements that were not up to code and would require further repairs. Although the settlement agreement clearly stated that the appraiser was to estimate the " fair market costs" for the repairs and improvements that Chambers made, Halsey admits that his final estimate took both cost and value into account.

Apparently as a result of the calculation approach Halsey used, which took both cost and value into account, Halsey decided not to give Chambers any credit for a number of repairs that were not up to code: electrical repairs, the new roof over the east side of the triplex, improvements to the basement bedroom, and repairs to the basement stairs. Halsey gave Chambers only partial credit for a wheelchair ramp, which Halsey felt did not have sufficient head-room. It is not clear, however, that the error in Halsey's methodology resulted directly from faulty instructions by Scofield's attorney. ...


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