Matanane v. Hyannis Air Service, Inc.

Opinion

4 IN THE SUPERIOR COURT OF GUAM 5

6 ) TERESITA Q. MATANANE and EDWARD MATANANE, ) CASE NO. CV0300-12 7 ) 8 Plaintiffs, ) ) 9 v. ) DECISION AND ORDER 10 ) Re: Motion to Dismiss HYANNIS AIR SERVICE, INC., doing ) II business as Cape Air; CONTINENTAL ) 12 MICRONESIA, INC.; CONTINENTAL ) AIRLINES, INC.; and DOES 1 ) 13 THROUGH 5, ) 14 ) Defendants. ) 15

16 INTRODUCTION 17 This matter came before the Honorable Alberto C. Lamorena III on August 6, 18 2012 on Defendant's Motion to Dismiss. Attorney Elyze McDonald Iriarte 19 represented Defendants Continental Airlines, Inc. and Continental Micronesia, Inc. 20 Attorney David P. Ledger represented Defendant Hyannis Air Service, Inc. 21 Plaintiffs were represented by Attorney Jeffrey A. Cook. Following the hearing the 22 Court took the matter under advisement. Having considered the parties' arguments 23 and the applicable law, this Court now issues its Decision and Order. 24 BACKGROUND 25 Plaintiffs filed their complaint on March 5, 2012, alleging Defendants' 26 negligence resulted in personal injuries and loss of consortium. Defendant Hyannis, 27 doing business as Cape Air (hereinafter, "Cape Air"), filed its answer on June 1,

28 2012. Defendant Continental Airlines, Inc. filed an answer on June 4, 2012. On Decision and Order Case No. CV0300-12

June 22, 2012, Continental Airlines filed for dismissal pursuant to Guam R. Civ. P. 2 12(b)(6). On July 10, Continental Micronesia, Inc. filed its answer and joined in the 3 motion to dismiss. Plaintiffs filed their opposition to the motion to dismiss on July 4 23, 2012 and Defendants filed their reply to the opposition on July 30, 2012. Based 5 on the applicable law and the unique circumstances of this case, this Court finds 6 that denial of Defendant's motion is appropriate.

7 DISCUSSION 8 Defendants Continental Airlines and Continental Micronesia (collectively, 9 "Continental") assert that Plaintiffs' claims are barred by the statute of limitations. 10 They point out that according to Plaintiffs' briefs, the incident from which the cause 11 of action stems occurred in December of 2009. The complaint was filed with the 12 court on March 5, 2012, more than two months past the two-year statute of 13 limitations provided for in 7 G.C.A. §§ 11301 and 11306. 14 Plaintiffs agree that the complaint was filed beyond the two year statute of 15 limitations. However, they deny the claim against Defendants Cape Air and 16 Continental is barred by the statute of limitations because there has been a waiver 17 on the part of Cape Air. Plaintiffs rely on agency theory to support its position that 18 when Cape Air waived the statute of limitations defense, it acted as an agent of 19 Continental thus making the waiver effective as to all Defendants. 20 Continental Airlines and Continental Micronesia dispute this theory, arguing 21 that Plaintiffs failed to demonstrate an agency relationship as between Continental 22 and Cape Air. Continental asks that the claims be dropped because there has been 23 no effective waiver of the statute of limitations on their part. 24 I. Statute of Limitations Waiver. 25 The period prescribed for the commencement of actions for injury to a person 26 caused by the wrongful act or neglect of another is two years. See 7 GCA §§ 11301 27 and 11306. The statute of limitations is an affirmative defense which is subject to 28 waIver. See Guam R. Civ. P. 8. See also Zipes v. Trans World Airlines, Inc., 455

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U.S. 385, 393 (1981) (stating the statute of limitations is subject to waiver, tolling 2 and estoppel). Under Guam law, a waiver occurs when a person voluntarily and 3 intentionally relinquishes a known right or privilege. Yanfag v. Cyfred, Ltd., 2009 4 Guam 16 ,r 20. 5 California has adopted a similar definition for waiver. See Lucchesi v. Bar-O 6 Boys Ranch, 353 F.3d 691 (9th Cir. 2003) (recognizing California's definition of 7 waiver as "voluntary relinquishment of a known right"). Similarly under California 8 law, waiver of a statute of limitations must be established with a clear showing of 9 an intent to relinquish that right. Isaacson v. City of Oakland, 263 CaLApp.2d 414, 10 419 (1968). 11 Evidence has been presented that on two occaSlOns, Cape Air, through its 12 insurer, agreed to extend the deadline to file a complaint at the request of Plaintiffs' 13 counseL First, there was an agreement to extend the filing deadline to February 6, 14 2012. Cook Decl, Ex. B. Second, there was an agreement to extend the deadline to 15 March 6, 2012. Cook Decl., Ex. D. The communications between Plaintiffs' and 16 Cape Air's insurer support a finding that Cape Air voluntarily and intentionally 17 relinquished the right to assert the statute of limitations defense. 18 II. Effect of Hyannis' Waiver on Co-Defendants. 19 Whether the statute of limitations waiver is effective as to all Defendants 20 turns on the existence or absence of an agency relationship between the Defendants. 21 As stated supra, Plaintiffs rely on agency theory in arguing Cape Air's waiver of the 22 statute of limitations is effective as to all Defendants. Continental argues that such 23 a relationship does not exist and that they have done nothing to lead Plaintiffs to 24 believe that one exists. 25 A. Agency Relationship Between Hyannis, Continental Micronesia, and 26 Continental Airlines. 27 Under Guam law, agency is either actual, where the agent is really employed 28 by the principal, or ostensible. An agency is ostensible when the principal

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intentionally, or by want of ordinary care, causes a third person to believe another 2 to be his agent who is not really employed by him. 18 G.C.A. §§ 20104 - 20106. 3 There has been no evidence presented to the Court to show the existence of an 4 actual agency. Therefore, this Court will consider the existence of ostensible 5 agency. 6 Ostensible authority is such as a principal intentionally, or by want of 7 ordinary care, causes or allows a third person to believe the agent possesses. 18 8 G.C.A. § 20214. In ostensible agency, the principal need not expressly confer 9 authority upon the agent. Leong v. Deng, 2002 Guam 2 '1 12. "[O]stensible 10 authority may be implied if the principal's conduct causes anyone to believe that 11 authority has been conferred upon the agent." Id. The agent's acts and 12 representations to a third party are imputed to his or her principal. Id. 13 Continental contends that the Plaintiffs were not made to believe that an 14 agency relationship existed. In making that assertion, they rely on the 15 communications made prior to Plaintiffs' filing of the complaint. "Our investigation 16 revealed that she was on a flight operated by Cape Air. Therefore, we have sent 17 your letter to Cape Air for their handling and direct response to you." Matanane 18 Decl., Ex. D. Continental uses this to show a denial of liability on their part. 19 Additionally, Continental relies on language found in a correspondence from 20 Cape Air's insurer, Chartis Aerospace Adjustment Services, Inc. 21 Your letter of February 4,2010 addressed to Continental Airlines has 22 been forwarded to my attention. The flight that Ms. Matanane alleges to have fallen while deplaning was operated by our insured, 23 Cape Air. Since we represent the insurable interests of Cape Air, please direct all future correspondence concerning this matter to my 24 attention at the above address. 25 Matanane Decl. Ex. E. Continental construes this as language that limits the scope 26 of Chartis' authority as only representative of Cape Air, and not Continental. In . 27 short, it is Continental's stance that it is unreasonable for anyone, especially the 28 Plaintiffs, to think an agency relationship exists between Cape Air and Continental.

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In reviewing a motion to dismiss pursuant to Guam R. Civ. P. 12(b)(6), this 2 Court must construe the pleading "in the light most favorable to the non-moving 3 party, and resolve all doubts in the non-moving party's favor." Taitano v. Calvo 4 Finance Corp., 2009 Guam 9 ~ 6. Similarly, in a Guam R. Civ. P. 56 motion for 5 summary judgment,l this Court "must draw inferences and view the evidence in a 6 light most favorable to the non-moving party." Bank of Guam v. Flores, 2004 Guam 7 25 ~ 7. 8 This Court has been presented declarations with attached exhibits. On the 9 date the incident occurred, Plaintiff Matanane was issued a Continental boarding 10 pass. The incident report she and the Cape Air employees filled out was a 11 Continental form. While Continental argues the communication referring the issue 12 to Cape Air "for their handling and response" is a denial of liability, it could just as 13 reasonably be construed as a delegation of authority indicative of an actual agency 14 relationship. Contrary to Continental's assertions that it is unreasonable to find 15 the existence of an ostensible agency relationship, such a finding is reasonable. The 16 correspondence from Chartis Aerospace does little to change this as Chartis could 17 reasonably have been acting as, essentially, an agent of an agent. When viewed in a 18 light most favorable to plaintiffs, there is sufficient evidence to support a finding of 19 agency as between Continental and Cape Air. 20 B. Motion to Dismiss and Summary Judgment. 21 In their response to Continental's Rule 12(b)(6) motion to dismiss, Plaintiffs 22 ask the Court to treat the motion as a Rule 56 motion for summary judgment "In 23 ruling on a 12(b)(6) motion, a court's consideration is limited to the complaint, 24 written instruments attached to the complaint as exhibits, statements or documents 25 incorporated in the complaint by reference, and documents on which the complaint 26 heavily relies." Newby v. Government of Guam, 2010 Guam 4 ~ 14.. In ruling on a 27

28 1 Plaintiffs' reply to the motion to dismiss asks this Court to adopt a summary judgment approach, which will be discussed infra.

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Rule 12(b)(6) motion to dismiss, a trial court "must convert the dismissal motion 2 into a summary judgment motion whenever it considers extraneous material 3 outside the pleadings." Core Tech Intern. Corp. v. Hanil Engineering & Const. Co., 4 Ltd., 2010 Guam 13 ~ 29. This Court has already demonstrated that it has 5 considered material outside the pleadings in relying on the declarations and 6 exhibits not incorporated in the complaint. Therefore, the Court proceeds on 7 summary judgment standards. 8 Summary judgment is proper when "the pleadings, depositions, answers to 9 interrogatories, and admissions on file, together with the affidavits, if any, show 10 that there is no genuine issue as to any material fact and that the moving party is 11 entitled to a judgment as a matter of law." Bank of Guam v. Flores, 2004 Guam 25 12 '1 7. As discussed supra, the period prescribed for the commencement of actions for 13 injury to a person caused by the wrongful act or neglect of another is two years. See 14 7 GCA §§ 11301 and 11306. 15 Based on the date Plaintiffs' complaint was filed, the statute of limitations 16 was seemingly violated. However, Defendant Cape Air waived the statute of 17 limitations defense. As this Court has discussed, the evidence supports a finding 18 that an ostensible agency relationship between Cape Air and Continental exists. 19 The agent's acts and representations to a third party are imputed to his or her 20 principal. Leong, 2002 Guam 2 ~ 12. Therefore, the waiver of the statute of 21 limitations by Cape Air would also be effective as to Continental. In effect, 22 Continental may not assert the statute of limitations defense in this matter. 23 CONCLUSION 24

25 Though Defendants Continental Airlines and Continental Micronesia have 26 filed a motion to dismiss pursuant to Guam R. Civ. P. 12(b)(6), this Court has 27 considered material outside of the pleadings and proceeds on a Guam R. Civ. P. 56 28 motion for summary judgment basis. Because the facts support a finding of an agency relationship between Cape Air and Continental, and because the Cape Air's

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waiver of the statute of limitations would be effective as to Continental under the 2 circumstances, the motion to dismiss is hereby DENIED. 3

4 It is SO ORDERED this 18th day of DecembG= 5

7 ORENA, III 8 Presiding Judge, Supe ~.~.........,,_ 9

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