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Hester v. Landau

Supreme Court of Alaska

June 29, 2018

TRACY HESTER, Appellant,

          Appeal from the Superior Court of the State of Alaska, No. 3AN-11-06873 CI Third Judicial District, Anchorage, Mark Rindner, Judge.

          Michael A. Stepovich, Stepovich & Vacura Law Office, Fairbanks, for Appellant.

          Kenneth W. Legacki, Anchorage, for Appellee Landau.

          No appearance by Appellees Showboat Show Club Anchorage, LLC; Terry Maurice Stahlman; or Estate of James Goard.

          Before: Stowers, Chief Justice, Winfree, Maassen, Bolger, and Carney, Justices.


          CARNEY, JUSTICE.


         A woman sued her former employer for unpaid compensation, naming the company and both of its owners as defendants. One of the owners died while the suit was pending, and the former employee substituted the owner's estate in the proceedings. Judgment was eventually entered in favor of the former employee. A year later the deceased owner's widow moved for relief from the judgment as the sole beneficiary of his estate, arguing that neither her husband nor the estate had been properly served with notice of the suit. The former employee responded that service had been proper and that, in any case, the widow did not have authority to file a motion on behalf of the estate. The court denied the motion on the ground that the widow had not shown good cause for relief from the judgment. We affirm on the alternate ground that the widow did not have authority to act on the estate's behalf.


         Aurora Landau was a dancer at the Showboat Show Club in Anchorage. In April 2011 she filed a complaint in superior court against Showboat Show Club Anchorage, LLC, seeking to recover unpaid wages, overtime compensation, and impermissible deductions from her earnings. Her suit also named the LLC's two members and managers, Terry Stahlman and James Goard. Stahlman, also the LLC's registered agent, was personally served a summons and complaint for all three defendants at his Anchorage residence, which was listed in the LLC's state licensing reports as the entity's principal office and both Stahlman's and Goard's member address.

         It appears undisputed that Goard actually lived in Fairbanks. Yet Landau's efforts to serve Goard consisted of unsuccessfully sending the summons and complaint by certified mail to Stahlman's Anchorage residence and then serving Goard's copies of the summons and complaint on Stahlman at the same residence.

         Stahlman responded to the summons and complaint stating that he had settled the claim, but Landau later advised the court that no payment had been made and the settlement had failed. Landau then moved for entry of default against Goard and the LLC. When Landau sought Goard's default, Landau's attorney asserted in his affidavit that service on Goard had been accomplished by leaving the summons and complaint with Stahlman, "a person of reasonable age and discretion at the address of record pursuant to the Corporations Section, State of Alaska, for service on James Goard," and attaching the return of service to his affidavit. The attached return of service for Goard said that the summons and complaint were left with Stahlman at his Anchorage residence, which was described as "the defendant['s] usual place of residence." A deputy clerk entered their default in February 2012. In April the LLC appeared before the court through counsel, and shortly thereafter the court set aside the default with respect to it. The default remained in effect as to Goard.

         Goard died in April 2012. His widow, Tracy Hester, is evidently his estate's sole beneficiary. Robert Nesbitt sought appointment as the estate's personal representative in September but was not appointed by the probate court until April 2013.

         On August 21 the court held a trial setting conference for Landau's claims against the LLC, Stahlman, and Goard. The court noted that Goard was dead and re-entered default against the LLC because it no longer was represented by counsel. In a later colloquy between the court and Landau's attorney, the court noted that once notice of a party's death is on the record, the court must dismiss claims against the decedent unless there is a party substitution within 90 days.[1] Landau's attorney acknowledged that he "may have to bring in the estate."

         Trial began on December 19 and was then continued to a later date. On December 31 - more than 90 days after the August 21 hearing, after the first day of trial had concluded, and while Nesbitt's petition for appointment was pending in probate court-Landau moved to substitute the Estate of James Goard as a defendant in Goard's place. The court granted the substitution the following month, even though an estate had not yet been opened.[2] Landau then notified the putative estate that she had an interest.[3]

         Trial concluded June 18, 2013. In July the court found Stahlman, Goard's estate, and the LLC jointly and severally liable for Landau's damages. Landau was awarded a total of $74, 3 83.23 in damages, prejudgment interest, penalties, and attorney's fees and costs. She then notified the Goard estate by filing a copy of the judgment in the probate proceeding.

         In November 2014, a year after the estate was notified, Hester moved for relief from judgment under Alaska Civil Rule 60(b) "as sole beneficiary of the Estate of James Goard." She argued that neither Goard, his estate, nor herself as sole beneficiary had ever been properly served with the complaint. She further argued that Landau had moved to substitute the estate after the deadline set by Civil Rule 25(a). Throughout the motion Hester asserted her status as "sole beneficiary of the Estate" as the basis for her action.

         Landau responded that all relevant persons, including Hester, had been properly served and that Hester had not shown good cause to vacate the default judgment. She also noted that Hester was not the estate's personal representative and argued that she therefore lacked standing to object to the substitution of the estate or to the default judgment. Hester's reply repeated her arguments that Goard had not been properly served and argued that Hester had interest-injury standing because, as the sole beneficiary, her financial interest in the case was identical to that of the estate.

         The superior court denied Hester's motion in December 2014, stating that the defendants had been properly served and that both Goard and Hester "were aware of the litigation and the default." The court found that Hester had not shown good cause to vacate the judgment because she had not shown that the outcome of the suit might be different if relief were granted. The court did not address the dispute over Hester's standing to act for the estate.

         Hester appealed, arguing that neither Goard nor his estate had been properly served with notice of the litigation and that the default judgment entered against the estate should be vacated. We ordered supplemental briefing on Hester's standing to seek relief from judgment on behalf of the estate.


         Statutory interpretation is a question of law to which we apply our independent judgment.[4]


         We have not previously addressed whether the sole beneficiary of an estate who is not its personal representative has legal authority to appear in court on behalf of the estate. We conclude that Alaska's probate code gives that authority only to the estate's personal representative. We therefore affirm the superior court's order denying Hester's motion for ...

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