Miller v. Fowler

424 P.3d 306
CourtAlaska Supreme Court
DecidedJune 29, 2018
Docket7255 S-16538
StatusPublished
Cited by7 cases

This text of 424 P.3d 306 (Miller v. Fowler) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Miller v. Fowler, 424 P.3d 306 (Ala. 2018).

Opinion

BOLGER, Justice.

*308 I. INTRODUCTION

The purchaser of an apartment building filed suit to bar the seller's attempt to foreclose on the property after the purchaser stopped making payments. The purchaser also alleged that the seller had misrepresented the condition of the building's sewer lines at the time of sale. The superior court granted summary judgment in the seller's favor on all of the misrepresentation claims on the basis that they were barred by the statute of limitations. During the trial, the superior court denied the purchaser leave to amend his complaint. After a bench trial on the remaining claims, the superior court concluded that the seller did not wrongfully foreclose on the building because the purchaser was in default. The purchaser appeals these three decisions. We reverse the grant of summary judgment because the seller failed to establish an absence of material fact issues regarding when the purchaser's causes of action accrued. We vacate the order denying the wrongful foreclosure claim because the superior court erred when it found the purchaser in default. We affirm the denial of the purchaser's motion to amend.

II. FACTS AND PROCEEDINGS

A. Facts

In 2009 Calvin Miller purchased from June Fowler by warranty deed an eight-unit, three-story apartment building located in Anchorage. Fowler is licensed by the Alaska Real Estate Commission and served as the listing licensee and listing brokerage on the sale. Miller and Fowler entered into a Purchase and Sale Agreement, and the sale was completed on September 2. Miller made a down payment of $20,000 and financed the remaining balance with a promissory note to Fowler. The note provided that it would be repaid over a five-year term in monthly installments starting at $2,000 and increasing to $2,500 in October 2010. The note was secured by a deed of trust, which Fowler recorded on September 4.

As part of the sale, Fowler provided the written property disclosure statement required under Alaska law. 1 In relevant part, Fowler disclosed defects in the building's private sewer line: "Sewage: has plugged up. 2006 correction to sewer pipe with excavation. All records of service calls at Alaska sewer and drain. Recent problems-very occassional [sic] caused by tenants mis-use." In addition to this written statement, Miller alleges that Fowler verbally told him at the time of the sale that any structural problems with the sewer line had been resolved and that any lingering issues were the result of tenant misuse. Miller claims that Fowler cited examples of tenants disposing of cat litter and dog waste in the toilet as the cause of any remaining drainage issues.

Miller alleges that soon after his purchase of the building, the sewer line began posing significant issues. He claims that tenants complained of sewage backing up in the drains and overflowing from toilets, tubs, and sinks. According to Miller, at first he tried to address these issues himself. He and his wife, Vicky Powell, manually vacuumed the building's sewer line and transferred the waste to RV dump sites. Miller eventually hired plumbers to snake the sewer line and, after plumbing expenses started adding up, later bought his own snake. He claims that he sometimes snaked the line several times a week. As the back-ups and overflows recurred, Miller was forced to refurbish the bathrooms of several of the units.

The sewer problems persisted and, in August 2012, Miller hired a plumber who used a camera to view the inside of the building's sewer pipe. The camera showed tree roots growing through the pipe and numerous breaks and buckles in the pipe. Miller claims *309 that, after learning of the extent of the damage to the pipe, he began to investigate the building's history of sewer issues. Miller contacted a former owner of the building who had purchased it from Fowler shortly before Miller had. According to Miller, the former owner had owned the building for about six months and had experienced similar issues with the sewer line. The former owner exhausted his funds trying to fix the sewer issues and ultimately lost the building in foreclosure to Fowler, who in turn sold it to Miller. Miller also spoke to some of the building's tenants, many of whom were longtime residents. Several of them told Miller that the sewage issues had been ongoing for years, including during the time Fowler owned the building. In addition, Miller consulted Anchorage officials who told him they had received several complaints about the building's sewer line over the years, but had ultimately been informed that the issues were resolved.

Miller decided to reroute the building's sewer line to connect it with a different segment of the public sewer. He claims that he secured a permit for the reroute and hired engineers to design it, a process that was complicated by the proximity of the new sewer line to Campbell Creek. He alleges he spent over $100,000 on this process but ultimately exhausted his funds before the new line was constructed.

To help Miller pay for the repairs, Fowler agreed to a series of modifications to the terms of the promissory note. First, in August 2012, Fowler agreed to a modification that deferred and reduced monthly payments and reduced the note balance. The note balance was reduced on the condition that Miller provide Fowler "Proof of Completed Repairs and Certification of Inspection by the Municipality of Anchorage of the Sewage System ... by December 20, 2012." Fowler agreed to a second modification to the terms in September that further reduced monthly payments and the note balance. Like the first modification, the note balance reduction was conditioned on Miller providing the same proof of repairs by December 20, 2012.

Fowler agreed to a third and final modification on November 12, 2012. Only this modification is directly at issue in this appeal. Unlike the prior two modifications, which took the form of typed letters from Fowler to the escrow bank, the third modification is a handwritten one-page note from Fowler to Miller and Powell. The third modification provides for two additional changes: (1) "No payments of principal or interest on loan ... until June 2013" and (2) "An additional credit of $80,000 to be deducted from loan balance upon completion of certification of sewer upgrades."

In February 2013 counsel for Fowler sent Miller a letter declaring that the modifications were "null and void" and stating that Miller would be offered no reductions to offset the expenditures on the sewer line. The letter instructed Miller to fully pay all past due amounts on the note by May 15 and provide proof of insurance for the building; it also requested copies of permits that he had secured for the repair project. After Miller apparently failed to comply, Fowler commenced nonjudicial foreclosure proceedings on the building in May 2013. The notice of default stated that Miller had breached the deed of trust by failing to make payments on the note since September 2012.

B. Proceedings

On August 7, 2013 Miller sued Fowler and her company, Homestead Properties Investment, Inc., to stop the foreclosure. 2

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424 P.3d 306, Counsel Stack Legal Research, https://law.counselstack.com/opinion/miller-v-fowler-alaska-2018.