Blowing Hot and Cold on the Frozen Tundra: a Review of Alaska's Quasi-estoppel Doctrine

• Publication year: 1998

§ 15 Alaska L. Rev. 281. BLOWING HOT AND COLD ON THE FROZEN TUNDRA: A REVIEW OF ALASKA'S QUASI-ESTOPPEL DOCTRINE

Alaska Law Review
Volume 15
Cited: 15 Alaska L. Rev. 281

BLOWING HOT AND COLD ON THE FROZEN TUNDRA: A REVIEW OF ALASKA'S QUASI-ESTOPPEL DOCTRINE

MICHAEL D. MOBERLY, LAURA L. FARLEY ^{[*] [**]}

I. INTRODUCTION

II. THE RELATIONSHIP OF QUASI-ESTOPPEL TO OTHER ESTOPPEL DOCTRINES

A. Equitable Estoppel

B. Collateral Estoppel

C. The Necessity of Three Preclusion Doctrines

III. ALASKA'S INTERPRETATION OF THE QUASI-ESTOPPEL DOCTRINE

A. Jamison v. Consolidated Utilities, Inc.

B. In re Lampert

C. An Analysis of Alaska's Leading Quasi-Estoppel Cases

IV. COMPARING ALASKA'S QUASI-ESTOPPEL WITH JUDICIAL ESTOPPEL IN OTHER JURISDICTIONS

V. THE IMPACT OF ALASKA'S LIBERAL PLEADING RULES ON THE QUASI-ESTOPPEL DOCTRINE

VI. A PROPOSAL FOR A MORE PREDICTABLE QUASI-ESTOPPEL TEST IN ALASKA

A. The Genuine Inconsistency Requirement

B. The Prior Judicial Success Requirement

C. The "Mutuality" or "Privity" Requirement

D. The Clean Hands Doctrine

VII. CONCLUSION

FOOTNOTES

I. INTRODUCTION

Consider a case in which a dairy farmer, unable to meet his debt obligations to the state, files a Chapter 11 bankruptcy petition in federal court. Suppose that he cooperates as the state repossesses his chattels that secured the state's loans. Now suppose that immediately after his debts are discharged by a bankruptcy court, he files a lender liability suit, requesting cancellation of his indebtedness to the state, an injunction prohibiting the state's collection efforts, rescission of his contractual obligations to the state, and monetary damages based on claims of misrepresentation, negligence, and breach of fiduciary duty, among others. This is precisely the affront to the judicial system that the Alaska Supreme [*pg 282] Court sought to prevent in Wright v. State ^[1] by invoking the doctrine of quasi-estoppel against a dairy farmer who attempted to take advantage of these contradictory positions. ^[2]

Quasi-estoppel is an equitable doctrine ^[3] that, where applicable, prevents litigants from taking positions inconsistent with those they have previously asserted. ^[4] As a general proposition, the doctrine ^[5] requires a party who has gained an advantage (or produced a disadvantage) by asserting a particular position ^[6] accept the burden of asserting that position in subsequent proceedings. ^[7] In essence, the doctrine protects the integrity of the judicial process ^[8] by preventing litigants from "blow[ing] both hot and cold" ^[9] where the as- [*pg 283] sertion of inconsistent positions would be unconscionable. ^[10] "Unconscionable" generally is defined as grossly unfair, unjust, inequitable, oppressive, or unduly harsh. ^[11] This doctrine provides the practitioner a tool to appeal to the conscience of the court. ^[12]

Unfortunately, while quasi-estoppel can be useful to both litigants and courts, Alaska's fact-specific application of the doctrine offers relatively little guidance on how to use it as a defense. In applying the doctrine, the Alaska Supreme Court presently considers such factors as "whether the party asserting the inconsistent position has gained an advantage or produced some disadvantage through the first position; whether the inconsistency was of such significance as to make the present assertion unconscionable; and whether the first assertion was based on full knowledge of the facts." ^[13] Because the concept of unconscionability, in particular, is inherently vague, legal precedent is only moderately instructive.

This Article considers Alaska's view of the quasi-estoppel doctrine, ^[14] which has also been recognized in several other jurisdictions, ^[15] and argues that the Alaska Supreme Court should refine the test used in determining the proper application of the doctrine. Part II of the Article summarizes the relationship between quasi-estoppel and two other estoppel doctrines recognized in Alaska, ^[16] [*pg 284] equitable estoppel ^[17] and collateral estoppel. ^[18] Part III analyzes Alaska cases that have examined the quasi-estoppel doctrine. ^[19] Part IV discusses quasi-estoppel and judicial estoppel as they are applied in other jurisdictions. ^[20] Part V examines potential conflicts between the quasi-estoppel doctrine and Alaska's liberal pleading rules. ^[21] Part VI proposes certain refinements for Alaska courts to consider when identifying the circumstances in which quasi-estoppel should be invoked against a party asserting inconsistent positions. ^[22] The Article concludes that clarification of the doctrine would make quasi-estoppel a more useful tool for litigants as well as for the courts.

II. THE RELATIONSHIP OF QUASI-ESTOPPEL TO OTHER ESTOPPEL DOCTRINES

Quasi-estoppel, like other estoppel doctrines, is equitable in nature. ^[23] It resembles other preclusion doctrines, such as equitable estoppel and collateral estoppel, insofar as each of these doctrines imbues the courts with authority to prevent parties from relitigating an established factual posture. ^[24] As the Alaska Supreme Court has stated, "[e]stoppel by any name is based primarily on considerations of justice and fair play." ^[25]

Despite the similarities between various types of estoppel, the policy considerations underlying quasi-estoppel are distinct from the other doctrines. Alaska's doctrine of quasi-estoppel is designed to prevent injustice by precluding a party from asserting a right inconsistent with a position previously taken, even where neither ignorance nor reliance on the part of the opposing party is present. ^[26] The intended beneficiary of this doctrine is the judicial [*pg 285] system itself, rather than the litigants involved in a particular case. ^[27] Quasi-estoppel protects the integrity of the judicial process by preventing litigants from casually adopting inconsistent positions for their own convenience. ^[28] While similar to equitable estoppel and collateral estoppel in some respects, quasi-estoppel can be distinguished from these doctrines in terms of the interests it protects.

A. Equitable Estoppel

Perhaps quasi-estoppel is most similar to equitable estoppel, ^[29] which also may prevent a party from asserting a position inconsistent with one it previously has taken. ^[30] Indeed, the Alaska Supreme Court has indicated that quasi-estoppel is a "species" of equitable estoppel. ^[31] Equitable estoppel precludes a person from asserting a right which he otherwise would have but for his previous acts or conduct proclaiming a contrary position and the reliance thereon by another party. ^[32] In Alaska, three essential elements are required for the application of the doctrine of equitable estoppel: (1) the assertion by conduct or word of a position, (2) reasonable reliance thereon by another party, and (3) resulting prejudice. ^[33]

Despite their similarities, quasi-estoppel and equitable estoppel differ in certain important respects. ^[34] In particular, equitable [*pg 286] estoppel focuses on the relationship between the parties, ^[35] while quasi-estoppel focuses on the interests of the court in promoting consistency when inconsistency would produce an unconscionable result. ^[36] Thus, the Alaska Supreme Court's present application of quasi-estoppel requires a finding that the assertion of inconsistent positions would be unconscionable. ^[37] In contrast, although unconscionability is a relevant consideration in analyzing equitable estoppel arguments, ^[38] it apparently is not a prerequisite to that doctrine's application. ^[39]

In addition, equitable estoppel typically applies only where the party asserting inconsistent positions willfully causes another to formulate a mistaken impression ^[40] in reliance on the first party's [*pg 287] representation. ^[41] Quasi-estoppel, on the other hand, potentially is applicable in the absence of reliance ^[42] or intentional misrepresentation by the party asserting inconsistent positions. ^[43]

B. Collateral Estoppel

Quasi-estoppel also is related to collateral estoppel, ^[44] which the Alaska courts occasionally refer to as "issue preclusion." ^[45] Collateral estoppel "bars relitigation, even in an action on a different claim, of all 'issues of fact or law that were actually litigated and necessarily decided' in [a] prior proceeding." ^[46] Specifically, collateral estoppel prevents a party from relitigating issues previously resolved against that party. ^[47]

[*pg 288] Collateral estoppel is similar to quasi-estoppel insofar as both doctrines protect the interests of the judicial system. However, whereas quasi-estoppel protects the integrity of the judicial process by preventing litigants from asserting inconsistent positions, the principal objective underlying collateral estoppel is to "ensure the finality of judgment, thereby ensuring a litigant's peace of mind, and to promote judicial economy." ^[48] Because these doctrines protect different interests, there are different prerequisites for their applications.

The Alaska Supreme Court has held that collateral estoppel should be applied only when three conditions have been met: (1) the plea of collateral estoppel is being asserted against a party or one in privity with a party to the first action; (2) the issue to be precluded from relitigation by operation of the doctrine is identical to that decided in the...