Administrative Law

The Year In Review 2006

Administrative Law

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Alaska Supreme Court

Allen v. Alaska Oil & Gas Conservation Commission

In Allen v. Alaska Oil & Gas Conservation Commission,[1] the supreme court held that the Alaska Oil & Gas Conservation Commission (“Commission”) applied the proper standard in denying a petition for a unitization order and that the superior court may deny a request for a de novo hearing on appeal from the Commission.[2] The day before his oil and gas exploration leases were set to expire, Allen petitioned the Commission for a unitization order to combine his valueless leases with other highly productive oil fields.[3] After the Commission denied the petition, the superior court refused Allen’s request to hear his appeal de novo and affirmed the Commission’s decision.[4] Allen appealed, arguing that the superior court incorrectly refused his request of a hearing and that the Commission applied the wrong standard in its denial of his petition.[5] The supreme court held that the statute relied upon by Allen as entitling him to a de novo hearing had been impliedly repealed by legislative developments, and therefore the decision to hear an appeal de novo was left to the superior court’s discretion.[6] The supreme court further held that the proper statutory standard for evaluating Allen’s unitization petition was the standard relating to involuntary unitization, since Allen’s petition was not seeking voluntary unitization.[7] The supreme court affirmed the decision of the superior court, holding that it was correct to deny Allen’s petition for a de novo hearing and that the Commission applied the proper statutory standard in rejecting Allen’s petition.[8]

Benavides v. State

In Benavides v. State,[9] the supreme court held that legislative employees are not necessarily entitled to the same per diem allowance as legislators.[10] Benavides, a legislative aide required to travel to Juneau for the legislative session, was not granted a per diem allowance for his time there.[11] He filed suit, claiming that he was guaranteed a per diem equal to that given to legislators under Alaska Statute section 24.10.130(b).[12] The supreme court held that the plain language of the statute[13] was consistent with the Alaska Legislative Council’s decision not to give Benavides a per diem allowance.[14] Additionally, a look at the legislative history was insufficient to rebut the conclusion that the plain language allowed the Council’s decision.[15] The supreme court affirmed the decision of the superior court, holding that Benavides and other legislative employees are not entitled to the same per diem allowance as legislators.[16]

Brandal v. State, Commercial Fisheries Entry Commission

In Brandal v. State, Commercial Fisheries Entry Commission,[17] the supreme court held that the Commercial Fisheries Entry Commission’s (the “CFEC”) denial of a limited entry fishing permit was valid despite a twenty-two year delay.[18] Brandal worked as a crew member on his father’s boat until 1972.[19] He was a gear license holder in 1974, and applied for a limited entry permit in 1977.[20] In order to receive a permit, an individual must accumulate twenty points for certain fishing related activities.[21] Brandal’s application was denied for lack of sufficient points, and he was given an interim permit.[22] Twenty-two years later, the CFEC officially denied his application.[23] The superior court affirmed the CFEC’s decision.[24] Brandal appealed, arguing that (1) he should have been awarded points for special circumstances, (2) CFEC was required to inform applicants that only partners of gear licensees in 1971-72 would be granted special circumstances points, and (3) the twenty-two year delay violated his due process.[25] The supreme court held that Brandal’s first argument failed, because the special circumstances provision applied to former co-owners of boats, not crew members.[26] Brandal’s second claim also failed because at least two individuals who were not partners of gear licensees in 1971-72 did in fact receive permits.[27] Finally, Brandal’s third claim failed because there was no risk of error based on the delay, and there was no evidence of prejudice.[28] The supreme court affirmed the decision of the superior court, holding that the CFEC’s denial of Brandal’s limited entry fishing permit was valid despite a twenty-two year delay.[29]

City of Saint Paul v. State

In City of Saint Paul v. State,[30] the supreme court held that a Department of Natural Resources ruling that used the statutory definition of a boundary for tidelands did not address a boundary dispute and, therefore, properly left the issue open for judicial resolution.[31] The City of Saint Paul (“City”) applied to the Department of Natural Resources (“Department”) for a conveyance of tidelands.[32] The Department conveyed the tidelands in accordance with the current boundary, which was statutorily defined according to the current mean high water line.[33] The City argued that by granting the tidelands according to the current boundary rather than an earlier line, it was adjudicating a boundary dispute.[34] The supreme court held that the Department was not adjudicating a boundary dispute by issuing the tidelands, because the Department used the statutory definition, there were no evidentiary hearings, and the commissioner made it clear that the conveyance did not establish a fixed boundary.[35] The commissioner conveyed the tidelands under a statute that does not require the commissioner to resolve the boundary dispute.[36] The supreme court affirmed the Department’s conveyance, holding that it did not adjudicate the boundary dispute.[37]

Flowline of Alaska v. Brennan

In Flowline of Alaska v. Brennan,[38] the supreme court held that an injured employee who had worked for more than thirteen weeks was an ongoing, hourly worker entitled to workers’ compensation benefits.[39] From November 1998 to March 1999, Brennan worked for Flowline of Alaska (“Flowline”) full-time, with intermittent breaks due to weather and equipment failure, among other things.[40] When Brennan was injured in early March 1999, he requested workers’ compensation payments as an ongoing, hourly worker with thirteen consecutive weeks of experience.[41] Flowline contested the classification before the Alaska Workers’ Compensation Board (“Board”), arguing first that Brennan was an “exclusively temporary” worker and, alternatively, that Brennan was a seasonal hourly worker.[42] The Board concluded that Brennan was an ongoing, hourly worker, and the superior court affirmed.[43] The supreme court adopted superior court’s decision and held that Brennan was an ongoing, hourly worker, not a temporary or seasonal worker, because of his ongoing relationship with Flowline, the gross number of hours he worked, and the fact that he worked for more than thirteen weeks.[44] The supreme court affirmed the superior court’s decision, holding that an injured employee who had worked for more than thirteen weeks was an ongoing, hourly worker entitled to workers’ compensation benefits.[45]

State v. Grunert

In State v. Grunert,[46] the supreme court held that the Alaska Board of Fisheries (“Board”) exceeded its authority in promulgating an emergency regulation to create a cooperative fishery scheme and in allocating fishery resources within a single fishery.[47] Grunert, a non-participating salmon fisher, challenged the Board’s regulation authorizing a cooperative of salmon purse seine fishers.[48] The superior court rejected the challenge but was reversed by the supreme court.[49] The Board then promulgated an emergency regulation to again authorize a cooperative.[50] Grunert challenged and the superior court entered final judgment for Grunert; the Board appealed.[51] The supreme court held that the Board exceeded its authority in promulgating an emergency regulation to create a cooperative fishery scheme because the regulation was at odds with the Limited Entry Act and that the means employed by the regulation, in authorizing different equipment for the cooperative and open fishers, did not create two distinct fisheries.[52] The regulation was at odds with the Limited Entry Act’s purpose to protect active, economically dependent fishers, because the emergency regulation required only some participation by the permit holders in the cooperative,[53] allowing fishers who made the minimum number of deliveries to receive the same profit as those who made more deliveries.[54] Also, the differences in gear authorized under the regulation did not create two distinct fisheries, and the Board therefore violated its authorizing statute by allocating fishery resources within a single fishery.[55] The supreme court upheld the superior court’s decision in part and reversed in part, holding that the Board exceeded its authority by promulgating an emergency regulation to create a cooperative fishery scheme and that the means employed by the regulation were outside the Board’s authority to allocate fishery resources within a single fishery.[56]

J & S Services v. Tomter

In J & S Services v. Tomter,[57] the supreme court held that the Alaska State Procurement Code’s exclusionary provision expressly exempted a government agency from liability for civil damages, but that damages could be recovered from a government officer in an individual capacity so long as the officer was acting outside of the scope of regular duties.[58] After losing a bid for leasing an airplane to the Department of Natural Resources, J & S Services (“J & S”) brought suit in superior court, alleging that Tomter, who headed the leasing project, and the procurement agency were liable for a number of torts relating to improper dealing in awarding the contract.[59] The superior court dismissed claims against Tomter and the State, and J & S appealed.[60] The supreme court held that the procurement agency was exempted from liability in a civil damage suit under the procurement code, but that officials acting outside of the scope of their official duties were not exempt from individual capacity civil suits.[61] No exemption from civil suit is explicitly provided for individuals in the procurement code, and under traditional principles of official immunity, officials acting outside of the scope of regular work duties may be held individually liable in civil damages suits.[62] The supreme court affirmed the superior court’s dismissal of claims against the State, but reversed the dismissal of claims against Tomter and remanded the case, holding that the procurement code expressly exempted a government agency from liability for civil damages, but that damages could be recovered from a government officer in an individual capacity who was acting outside of the scope of regular duties.[63]

Lakloey, Inc. v. University of Alaska

In Lakloey, Inc. v. University of Alaska,[64] the supreme court held that the costs expended in preparing a bid were not recoverable when irregularities in the bid solicitation process were not shown to have caused any actual damages.[65] In soliciting bids for improvements to its facilities, the University of Alaska (“University”) issued an addendum to the bid instructions on the day the bids were scheduled to be opened.[66] Lakloey, which had submitted a bid prior to the issuance of the addendum, protested, arguing that the addendum violated the instructions issued to bidders as well as relevant statutes.[67] After the University rejected the two properly submitted bids, including Lakloey’s, it denied Lakloey’s bid protest without a hearing.[68] On appeal, the superior court also rejected Lakloey’s arguments.[69] The supreme court held that a successful bid protester must show actual damages in order to recover the costs of bid preparation and that, while the University violated Alaska law and its own instructions, Lakloey failed to show that these violations and irregularities caused it any additional expenses.[70] The supreme court affirmed the superior court’s decision, holding that the costs expended in preparing a bid were not recoverable when irregularities in the bid solicitation process were not shown to have caused any actual damages.[71]

Lewis v. State

In Lewis v. State,[72] the supreme court held that the Department of Corrections (“Department”) did not violate due process of a state prisoner in refusing her request to be examined by a physician of her choosing in order to prove a medical condition that would entitle her to be considered for executive clemency.[73] Lewis, convicted of second-degree murder, was not to be eligible for parole until 2011.[74] Fearing she would not live until 2011 because of her poor health, she applied for executive clemency.[75] The Department’s medical staff determined there were no medical grounds to support her request for clemency.[76] Lewis filed a complaint against the State asking for a declaratory judgment on whether she should be allowed independent medical opinion evidence.[77] The superior court granted summary judgment to the State, finding that denial of Lewis’ request to see an independent doctor did not violate her due process.[78] The supreme court applied a three-factor test to determine whether Lewis had a fair opportunity to make a factual showing to support her clemency application.[79] The test balanced (1) the private interest affected by official action; (2) the risk of erroneous deprivation of that interest because of the procedures used and the value of additional safeguards; and (3) the government’s interest.[80] Under this test, the Department’s denial of Lewis’ access to an independent doctor did not violate her due process because Lewis did not demonstrate there would be any practical value in consulting an independent doctor.[81] The supreme court affirmed the decision of the superior court, holding that the Department did not violate a prisoner’s due process when it denied her access to an independent doctor to prove a medical condition that would entitle her to be considered for clemency.[82]

Western States Fire Protection Co. of Alaska v. Anchorage

In Western States Fire Protection Co. of Alaska v. Anchorage,[83] the supreme court held that, even under the rational basis standard of review, the decision of the Anchorage Board of Building Regulation Examiners and Appeals (“Board”) must be vacated where the Board has not addressed a critical issue in determining the appropriate outcome of the proceeding.[84] Western States Fire Protection Co. appealed a decision of the Anchorage Fire Department that the sprinkler system in a school was inadequate.[85] The Board reversed the decision of the fire department, based on a narrow reading of the fire code, but without considering the adequacy of water coverage for fire prevention.[86] The supreme court held that rational basis review of the Board’s decision was appropriate and found the decision lacking in proper reference to the overall goal of the fire code: to ensure the adequacy of water coverage of a potential fire hazard.[87] The supreme court vacated and remanded the decision of the Board, holding that the Board had not addressed a critical issue in determining the appropriate outcome of the proceeding.[88]

Wilson v. State, Department of Corrections

In Wilson v. State, Department of Corrections,[89] the supreme court held that the State’s policy of transporting released prisoners to the community nearest the “place of arrest” satisfies the Alaska administrative code’s requirement[90] of a return to the “place of arrest.”[91] Shortly before his release from prison, Wilson requested to be transported by airplane directly to his home and place of arrest, which was accessible only by footpath and airplane.[92] The Department of Corrections (“DOC”) denied his request,[93] and he filed an administrative grievance and appeal, arguing that the DOC was required by its regulation to transport him to his “place of arrest.”[94] The DOC denied his grievance and appeal,[95] the superior court denied his subsequent suit for declaratory relief and damages, and Wilson appealed.[96] The supreme court held that the DOC could return released prisoners to the community nearest the “place of arrest” since the phrase “place of arrest” is ambiguous,[97] there is no legislative history which helps define it,[98] and the statute’s purpose to get prisoners home is achieved by the DOC’s interpretation, which was reasonable and not arbitrary. [99] The supreme court affirmed the decision of the superior court, holding that the State’s policy of transporting released prisoners to the community nearest the “place of arrest” satisfies the Alaskan administrative code’s requirement of a return to the “place of arrest.”[100]

Business Law

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Ninth Circuit Court of Appeals

Valdez Fisheries Development Ass’n v. Alaska

In Valdez Fisheries Development Ass’n v. Alaska,[101] the Ninth Circuit held that a bankruptcy court lacked jurisdiction to interpret a settlement agreement in an adversary proceeding brought between two creditors after the underlying bankruptcy had been closed.[102] Valdez Fisheries Development Association (“VFDA”) and Sea Hawk Seafoods, Inc. (“Sea Hawk”), its creditor, entered into a settlement agreement in the course of VFDA’s bankruptcy proceedings.[103] The bankruptcy court approved the agreement and entered a final decree closing the bankruptcy proceedings.[104] The bankruptcy court then claimed jurisdiction over an adversary proceeding between Sea Hawk and the State of Alaska prompted by the VFDA case.[105] The Ninth Circuit held that the bankruptcy court (1) lacked “related to” jurisdiction over the resultant case, since the bankruptcy proceeding had been entirely closed prior to the adversary proceeding and could not, therefore, be impacted or altered by it and (2) lacked ancillary jurisdiction to “vindicate its authority” or “effectuate its decree” in the previous case, since the bankruptcy court had not explicitly retained jurisdiction or incorporated the terms of the settlement agreement as required for ancillary jurisdiction.[106] The Ninth Circuit reversed the order of the district court, holding that a bankruptcy court lacked jurisdiction to interpret a settlement agreement in an adversary proceeding brought between two creditors after the underlying bankruptcy had been closed.[107]

Alaska Supreme Court

Alaska Construction & Engineering, Inc. v. Balzer Pacific Equipment Co.

In Alaska Construction & Engineering, Inc. v. Balzer Pacific Equipment Co.,[108] the supreme court held that a lessor who succeeded on the primary issue in the case was the prevailing party and could therefore recover from a lessee the attorneys’ fees stipulated in the repossession provision of the lease, but could not recover its trial costs after repossession nor the higher interest rate printed on its repair invoices.[109] Alaska Construction & Engineering, Inc. (“ACE”) leased rock-crushing equipment with the option to purchase from Balzer Pacific Equipment Co. (“Balzer”).[110] ACE defaulted, and Balzer repossessed its equipment after posting a bond.[111] At trial, the jury found that ACE breached the contract and awarded $50,500 in damages to Balzer; it also rejected all of ACE’s affirmative defenses and three out of four counterclaims, awarding ACE $10,000.[112] The judge ruled that Balzer was the prevailing party and was entitled to attorneys’ fees accrued before it recovered its equipment, but not after, and set the prejudgment interest at the statutory rate rather than the much higher rate specified on invoices Balzer sent to ACE.[113] ACE appealed the prevailing party decision and Balzer cross-appealed the attorneys’ fees and interest rate decisions.[114] The supreme court held that the lessor prevailed on the primary issue in the case and, as the prevailing party, could therefore recover from the lessee the attorneys’ fees provided by the repossession provision of the lease, but not its trial costs, nor the higher interest rate printed on its invoices.[115] First, Balzer was the prevailing party because it prevailed on the main issue in the case, had the larger monetary award, and succeeded on greater and more significant portions of its claims than ACE.[116] Further, the supreme court read the lease and option to purchase as separate agreements.[117] Thus, the attorneys’ fees provision of the option to purchase was inapplicable since the option was never exercised, and the attorneys’ fees provided by the repossession clause of the lease only applied up to the time that Balzer obtained possession of its equipment.[118] Finally, the court set the interest rate at the statutory rate rather than the eighteen percent printed on the repair invoices sent to ACE because Balzer did not show that ACE had knowledge of the eighteen percent provision or a reasonable opportunity to reject it.[119] The supreme court affirmed the superior court’s decision, holding that Balzer was the prevailing party because it succeeded on the main issue and was therefore entitled by the repossession provision of the lease to attorneys’ fees incurred until repossession of the equipment, but not trial costs nor the higher interest rate printed on its repair invoices.[120]

Anchorage Chrysler Center, Inc. v. DaimlerChrysler Corp.

In Anchorage Chrysler Center, Inc. v. DaimlerChrysler Corp.,[121] the supreme court held that a statement can be fraudulent misrepresentation even if technically true and that a letter of intent is not necessary for fact-finders to determine the existence of an agreement.[122] Anchorage Chrysler Center, Inc. (“ACC”) entered into an agreement with DaimlerChrysler Motors Co. (“DCMC”) that ACC would rearrange its showrooms so as to sell only Dodge brand cars in one building and Chryslers, Plymouths, and Jeeps in another building.[123] ACC contended that this agreement included a DCMC promise to allow ACC to build another automobile dealership in the town of Wasilla and to disallow other new Dodge dealerships in the area.[124] DCMC never provided ACC any Jeeps, arguing that ACC had failed to remodel its buildings per the agreement.[125] DCMC also argued that although it had suggested that there were no plans for another Dodge dealership when ACC inquired, it did not break any promises when it allowed a new Dodge dealership to be built in the Anchorage area,[126] and that despite talks concerning an ACC dealership in Wasilla, DCMC never delivered or signed a written letter of intent giving ACC rights to a new dealership.[127] The supreme court held that even though DCMC’s statements that there were no plans for a new Dodge dealership were technically true, a true statement can be misleading and, therefore, can still be an actionable fraudulent misrepresentation if it induced actions that an informed party would not have undertaken.[128] The supreme court also held that ACC did not need a new letter of intent for the Wasilla dealership to create an agreement and that whether or not there was an agreement at all is a question for the fact-finder.[129] The supreme court vacated the dismissal of ACC’s contract claims, holding that a statement can be fraudulent misrepresentation even if technically true and that a letter of intent is not necessary for fact-finders to determine the existence of an agreement.[130]

Civil Procedure

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Ninth Circuit Court of Appeals

Johnson v. Columbia Properties Anchorage

In Johnson v. Columbia Properties Anchorage,[131] the Ninth Circuit held that limited liability companies (“LLCs”) share the citizenship of all of their members for purposes of invoking the district court’s diversity jurisdiction; thus, the district court properly exercised jurisdiction over an Alaska state court case removed to federal district court by the defendant, an LLC whose members were not Alaska citizens.[132] Johnson, an independent crane operator, provided crane services to Columbia Properties Anchorage (“Columbia”) between September 1998 and February 2000 and sent an invoice in January, 2002.[133] Columbia did not pay[134] and, in February 2003, Johnson filed suit in Alaska state court.[135] Columbia removed the case to federal district court based on diversity of citizenship and moved for partial summary judgment, arguing that the claims were time-barred by Alaska's three-year statute of limitations.[136] The district court granted the defendant's motion.[137] Johnson appealed, arguing that the district court should have remanded to state court based on the citizenship of the LLCs.[138] The Ninth Circuit held that an LLC is a citizen of every state of which its partners are citizens.[139] Since none of the partners were Alaska citizens, the district court properly denied the plaintiff's motion to remove.[140] The Ninth Circuit also held that the district court properly applied Alaska law by tolling the statute of limitations at the conclusion of the project, not at the submission of the invoice.[141] The Ninth Circuit affirmed the decision of the district court, holding that LLCs have the citizenship of all of their members; thus, the district court properly exercised jurisdiction over an Alaska state court case removed to federal district court by the defendant, an LLC whose members were not Alaska citizens.[142]

Alaska Supreme Court

In re Adoption of Erin G.

In In re Adoption of Erin G.,[143] the supreme court held that a father’s petition under the federal Indian Child Welfare Act to invalidate his daughter’s adoption was time-barred by Alaska’s one-year statute of limitations for challenging adoption decrees.[144] Erin G. was born to an unmarried, terminally ill mother and an incarcerated father.[145] In September, 2002, the superior court entered an adoption decree making the Grants the legal parents of Erin.[146] David L., Erin’s father, spent more than a year appealing other issues in the case and seeking new counsel, but did not file a petition to invalidate Erin’s adoption until October, 2004, more than two years after the adoption order.[147] The supreme court held that Alaska’s one-year statute of limitations on challenging adoptions applied to the federal Indian Child Welfare Act, thus barring David from entering his petition.[148] Because Congress did not put a statute of limitations in the Indian Child Welfare Act, it was appropriate to adopt the local statute of limitations as long as it did not conflict with federal laws or policies.[149] Here, there was no such conflict, and the one-year statute of limitations on petitioning adoptions provided a good balance between protecting the rights of Indian parents and protecting the rights of an adopted child.[150] The supreme court affirmed the ruling of the superior court, holding that a father’s petition under the federal Indian Child Welfare Act to invalidate his daughter’s adoption was time-barred by Alaska’s one-year statute of limitations for challenging adoption decrees.[151]

Blood v. Kenneth A. Murray Insurance, Inc.

In Blood v. Kenneth A. Murray Insurance, Inc.,[152] the supreme court held that the termination-of-coverage notice obligations of the insurer were satisfied by mailing multiple written notices to the last known address even though the notices were returned undelivered.[153] Blood bought a six month renewable auto insurance policy from Kenneth A. Murray Insurance, Inc. (“KMI”) but did not pay the renewal premium.[154] KMI mailed termination of coverage notices to Blood’s address which were returned undelivered. [155] Blood was then injured and his claim was denied.[156] The superior court found that even though KMI had satisfied its statutory duty by mailing the notices to the last known address, KMI had a separate, non-statutory duty of care and due diligence to inform the insured of terminated coverage, though that failure was not the legal cause of harm to Blood.[157] The supreme court held that KMI fulfilled its statutory duty by mailing notice of termination of coverage to his last known address and that the returned letters supplied sufficient proof of mailing.[158] The supreme court also held that the superior court erred in holding KMI to a separate duty of care to inform the insured of termination; the separate duty of care which may be found in real estate forfeitures is not comparable to routine termination or non-renewal of automobile policies.[159] The supreme court reversed the superior court’s finding of a non-statutory duty of care for KMI, holding that KMI satisfied its notice obligations by mailing multiple written notices to the last known address of the insured.[160]

Brannon v. Continental Casualty Co.

In Brannon v. Continental Casualty Co.,[161] the supreme court held that the statute of limitations began running on an insured’s claim for breach of duty to defend against the insurer at the initial refusal to defend, but that the statute of limitations was equitably tolled until the underlying litigation was complete.[162] Terry Pfleiger acted as a real estate broker for the Brannons in their purchase of franchising assets from investors.[163] The Brannons and Pfleiger were sued by the investors.[164] The Brannons, in turn, cross-claimed against Pfleiger for breach of his fiduciary duty as their broker.[165] Continental Casualty Co. (“Continental”), Pfleiger’s professional liability insurance carrier, refused to defend him in these suits in 1997.[166] Pfleiger’s rights to sue Continental for breach of a duty to defend were later assigned to the Brannons.[167] The Brannons asserted these rights by filing a complaint against Continental in 2002.[168] The superior court granted Continental’s motion for summary judgment, ruling that the three-year statute of limitations had begun running in 1997 and had expired.[169] The Brannons appealed.[170] The supreme court held that, although the statute of limitations began running when the contractual duty to defend was breached, it was equitably tolled until the underlying litigation was resolved, because the duty to defend is ongoing and can be assumed at any time before final judgment.[171] Tolling allows the insured to wait until he has finished litigating the underlying claim before filing a claim against the insurer.[172] The supreme court vacated the superior court’s dismissal and remanded, holding that the statute of limitations began running on an insured’s claim for breach of duty to defend against the insurer at the initial refusal to defend, but that the statute of limitations was equitably tolled until the underlying litigation was complete.[173]

Catholic Bishop of Northern Alaska v. Does

In Catholic Bishop of Northern Alaska v. Does,[174] the supreme court held that Alaska Statute section 09.10.065, which eliminates any statute of limitations for claims of sexual abuse, does not apply retroactively, but declined to decide whether the discovery rule tolled the statutes of limitations for this case because it involved questions of fact.[175] Petitioner, Catholic Bishop of Northern Alaska, appealed the superior court’s ruling against its motion for dismissal in a civil case arising from sexual abuse on the grounds that the claims were barred by the statute of limitations.[176] Petitioner argued that section 09.10.065 does not apply retroactively, meaning that the 2001 statute had no application to allegations of abuse from the 1970s and before.[177] The supreme court held that section 09.10.065 does not apply retroactively, because there is a presumption against statutes applying retroactively and because there was no legislative history indicating otherwise.[178] However, the supreme court declined to dismiss the case, finding that whether the statute of limitations had tolled was a question of fact, necessitating discovery and further trial proceedings.[179] The supreme court affirmed the decision of the superior court, holding that section 09.10.065 does not apply retroactively and that the question of the tolling of the statute of limitations was a factual one, deserving of further discovery proceedings.[180]

City of Kenai v. Friends of the Recreation Center, Inc.

In City of Kenai v. Friends of the Recreation Center, Inc.,[181] the supreme court held that full attorneys’ fees should be awarded to public interest litigants even though the case was ultimately dismissed as moot.[182] Friends of the Recreation Center, Inc. (“Friends”) sued the city for entering into a contract for private management of the city’s recreation center without competitive bidding, as required by city ordinance.[183] The superior court issued a preliminary injunction to stop the city from honoring its contract.[184] The city council then amended the ordinance to exclude recreation center managers from the competitive bidding requirement, and the case was dismissed as moot.[185] Friends was awarded full attorneys’ fees, and the city appealed.[186] The supreme court held that the attorneys’ fees award was not an abuse of discretion because if a prevailing party is a public interest litigant, it is normally entitled to the full amount of reasonable attorneys’ fees.[187] The court found that Friends had demonstrated probable success on the merits, making it the prevailing party despite the case being dismissed for mootness.[188] The supreme court affirmed the decision of the superior court, holding that full attorneys’ fees should be awarded to public interest litigants even though their case was dismissed as moot.[189]

Domke v. Alyeska Pipeline Co., Inc.

In Domke v. Alyeska Pipeline Co., Inc.,[190] the supreme court held that the superior court erred in a series of procedural decisions in a wrongful termination action.[191] Domke sued his employer (“Champion”) for wrongful termination as well as a customer of his employer (“Alyeska”) and the customer’s employee (“Disbrow”) for tortious interference with his employment contract.[192] Champion counterclaimed for conversion and unjust enrichment.[193] Domke and Champion each prevailed in part, and Domke appealed.[194] The supreme court held that the superior court erred when it denied Domke’s motion for judgment notwithstanding the verdict to hold Alyeska vicariously liable for Disbrow’s interference, because the record compelled this finding, as the interference occurred within the scope of Disbrow’s employment.[195] The supreme court also held that the superior court erred when it ruled that Champion’s counterclaims were compulsory and thus timely, finding that the claims were permissive because they were not logically related to Domke’s.[196] The supreme court further held that the superior court erred when it entered judgment against Domke based on a jury finding that Domke had contributed to the interference with his contract, finding that this contravened the statutory definition of the cause of action.[197] The supreme court affirmed the decisions of the superior court, but remanded for proceedings consistent with the three aforementioned holdings.[198]

Fairbanks North Star Borough v. Interior Cabaret, Hotel, Restaurant & Retailers Ass’n

In Fairbanks North Star Borough v. Interior Cabaret, Hotel, Restaurant & Retailers Ass’n,[199] the supreme court held that it was an abuse of discretion to find that Interior Cabaret, Hotel, Restaurant & Retailers Ass’n (“ICHRRA”) was a public interest litigant, because it did not meet its burden of showing that it was not motivated primarily by economic concerns.[200] ICHRRA initially filed suit in an attempt to block a referendum approving a five-percent retail-sales tax on alcoholic beverages from being placed on the election ballot, but amended its complaint after the tax proposal was approved by the voters, claiming that the tax violated another Alaska statute.[201] The supreme court held that a litigant must satisfy four criteria in order to be considered a public interest litigant: (1) whether the case is designed to effectuate strong public policies; (2) whether numerous people will receive benefits from the lawsuit if the plaintiff succeeds; (3) whether only a private party could have been expected to bring the suit; and (4) whether the litigant would have sufficient economic incentive to bring the suit forward even if the action only involved narrow issues that lacked general importance.[202] The supreme court held that ICHRRA failed the fourth criteria because its members had a direct economic incentive to prevent a sales tax on alcohol and that the potential benefits to winning the lawsuit were not “insubstantial” or “diffuse.”[203] The supreme court reversed and remanded the ruling of the superior court, holding that it was an abuse of discretion to find that ICHRRA was a public interest litigant, because it did not meet its burden of showing that it was not motivated primarily by economic concerns.[204]

Hogg v. Raven Contractors, Inc.

In Hogg v. Raven Contractors, Inc.,[205] the supreme court held that a deferential standard of review applies to reviewing the superior court’s denial of a motion for a new trial following a jury verdict.[206] Hogg sued Raven Contractors (“Raven”) for negligence after he suffered injuries from falling into a borough trash disposal unit.[207] The jury decided that though Raven had been negligent, Raven’s negligence was not the legal cause of Hogg’s injury.[208] Hogg moved for a new trial, arguing that the jury’s verdict did not follow court instructions on negligence and causation, and the superior court denied the motion.[209] The supreme court held that review of a trial court’s decision to deny a motion for a new trial following a jury verdict is highly deferential and that the denial will be reversed only if the verdict was “plainly unreasonable and unjust” because the verdict was “completely lacking or slight and unconvincing.”[210] The supreme court affirmed the superior court’s denial of a new trial, holding that under this deferential standard of review, there was an evidentiary basis for the jury’s decision and the verdict was not “plainly unreasonable and unjust.”[211]

Jarvis v. Ensminger

In Jarvis v. Ensminger,[212] the supreme court held that the superior court properly granted summary judgment on contract claims, but had incorrectly granted summary judgment sua sponte on the misrepresentation and promissory estoppel claims.[213] Jarvis, a former employee at a car dealership, sued his former employers regarding stock options provided in his contract of employment but never disbursed to him, claiming breach of contract, misrepresentation, and promissory estoppel.[214] Jarvis’s former employers moved for summary judgment based only on the breach of contract issue;[215] however, the superior court sua sponte granted summary judgment on the misrepresentation and promissory estoppel claims as well.[216] The supreme court held that since a contractual condition had not been met, summary judgment was appropriately granted to Ensminger.[217] Summary judgment was rendered in error on the misrepresentation and promissory estoppel claims, however, because Ensminger never moved for summary judgment on these issues, and, since the burden of showing any genuine issue of material fact never shifted to Jarvis, Jarvis’ claims should not have been dismissed for failing to do so.[218] Furthermore, granting summary judgment was not harmless.[219] The supreme court partly affirmed and partly reversed the superior court, holding that the summary judgment was properly granted on the contract claims, but incorrectly granted sua sponte on the misrepresentation and promissory estoppel claims.[220]

Jerry Kinn, Valley Motors, Inc. v. Alaska Sales & Service, Inc.

In Jerry Kinn, Valley Motors, Inc. v. Alaska Sales & Service, Inc.,[221] the supreme court held that an arbitrator who did not have financial ties to a party involved in arbitration was not evidently biased,[222] and that because of the construction of a contract, the arbitrator had the authority to require the rescission of part of a property contract.[223] Kinn sold to Alaska Sales & Service, Inc. an automobile dealership and the property upon which it was located, in two separate agreements.[224] After discovering that the land was contaminated, Alaska Sales & Service brought an arbitration action against Kinn.[225] The arbitrator ruled in favor of Alaska Sales & Service, requiring Kinn to rescind the property contract, but not the asset (dealership) contract.[226] Upon Kinn’s appeal, the superior court held that the arbitrator did have the authority to require rescission of the property contract, and that the arbitrator was not biased.[227] Kinn appealed.[228] The supreme court held that the ties between the arbitrator and the attorney for Alaska Sales & Services were not the kind of financial ties that would lead a reasonable person to believe that the arbitrator would be biased.[229] Also, a reasonable person could understand the exchange to involve two contracts, thus the arbitrator was allowed to require the rescission of one but not the other.[230] The supreme court affirmed the decision of the superior court, holding that an arbitrator who did not have financial ties to a party in an arbitration was not evidently biased and that he had the authority to require the partial rescission of the property contract.[231]

John’s Heating Service v. Lamb

In John’s Heating Service v. Lamb,[232] the supreme court held that the applicable two-year statute of limitations did not act as a bar to a suit arising from carbon monoxide poisoning, since the injured party filed suit less than one year after they were put on inquiry notice of the possible injury.[233] On October 15, 1991, the Lambs called John’s Heating Service to inspect their furnace, which was not functioning properly.[234] Although John’s Heating Service did some minor work, the problem was not solved, and on January 31, 1993 the Lambs learned from another furnace repair service that the furnace was likely circulating carbon monoxide throughout the home.[235] Later that year, the Lambs hired a lawyer, submitted to neurological tests which showed evidence of carbon monoxide poisoning, and filed suit against John’s Heating Service on December 23, 1993, more than two years after the initial service call.[236] At trial, the jury returned a verdict for the Lambs, which John’s Heating Service appealed on statute of limitations grounds.[237] The supreme court held that the suit was timely, because although the Lambs were on inquiry notice of the poor functioning of the furnace on October 15, 1991, the Lambs were not on notice of the possible health consequences until January 31, 1993.[238] The supreme court affirmed the decision of the superior court, holding that the complaint arising from carbon monoxide poisoning was timely because plaintiffs were not on notice until they learned of the possible health consequences.[239]

Kay v. Danbar, Inc.

In Kay v. Danbar, Inc.[240] the supreme court held that a plaintiff who elects to limit his damage claims under Civil Rule 26(g)[241] may subsequently withdraw his request and that where there is at least minimally sufficient evidence that a Realtor assumed a responsibility to protect a tenant, a jury must decide whether or not that assumed duty was breached.[242] Kay contacted a RE/MAX agent in an apartment search, moved into a duplex, and a month later fractured his ankle after slipping on loose carpet in the garage.[243] In the suit that followed, Kay initially invoked Civil Rule 26(g), which caps damages at $100,000 but also provides for expedited discovery.[244] However, after determining that damages would exceed that amount, he attempted to withdraw his use of Rule 26(g).[245] The court denied his request and, despite a jury verdict of over $400,000, reduced the amount in accordance with the cap.[246] The supreme court held that Kay could withdraw his use of Rule 26(g), because the rule is comparable to a motion for leave to amend, and a complaint may be amended if it is in the interest of justice to do so.[247] Here, Kay specifically told the opposing party that he may need to withdraw his election to use Rule 26(g), and he immediately informed them of his intent to do so once he found out that the damages would likely exceed $100,000.[248] Additionally, RE/MAX was explicitly designated as the property manager and was specifically mentioned in the rental agreement as the party which would undertake certain managerial duties.[249] As a result, there was enough evidence that a jury could reasonably find that RE/MAX had a duty to warn Kay about the hazard which eventually caused his injury.[250] The supreme court affirmed in part, reversed in part, and remanded the trial holding that a plaintiff who elects to limit his damage claims under Rule 26(g) may subsequently withdraw his request for the expedited procedure provided by the rule and that where there is at least minimally sufficient evidence that a Realtor assumed a responsibility to protect a tenant, it is a question for the jury whether or not that assumed duty was breached.[251]

International Seafoods of Alaska, Inc. v. Bissonette

In International Seafoods of Alaska, Inc. v. Bissonette,[252] the supreme court held that the trial court did not abuse its discretion in certifying the plaintiffs as a class, using a single verdict form, instructing the jury, sanctioning absent class members, and awarding attorneys’ fees.[253] A group of salmon fishers from the Egegik district sued International Seafoods of Alaska, Inc. (“International Seafoods”) after it failed to match the major fishing buyers with the higher “bay price,”[254] as the fishermen interpreted their contract to promise.[255] At trial, a jury agreed with the fishermen that International Seafoods had breached its contract as to the class of fishermen, and the court awarded damages and attorneys’ fees to the class.[256] The supreme court held that the trial court did not abuse its discretion in certifying all fishermen who, in the year 2000, took salmon from the Egegik district and sold them to International Seafoods as a certifiable class, because the class was sufficiently numerous, shared common issues, and was adequately represented by counsel.[257] Also, the trial court was within its discretion in declining to exclude members of the class who did not respond to discovery and instead limiting admissible evidence to that which was gathered from members who responded.[258] Further, the trial court was authorized to use a single verdict form in this class action rather than a verdict form for each member of the class.[259] The jury instructions that assumed a single contract, rather than separate contracts for each fisherman, were acceptable because both sides argued and admitted the single-contract theory at trial.[260] Finally, International Seafoods presented no authority for overturning the augmented attorneys’ fees.[261] The supreme court affirmed the jury award, holding that the trial court did not abuse its discretion in certifying the plaintiffs as a class, using a single verdict form, instructing the jury, sanctioning absent class members, and awarding attorneys’ fees.[262]

Lee v. State

In Lee v. State,[263] the supreme court held that facts alleged in a complaint were properly deemed admitted when an individual willfully failed to follow court orders in responding to discovery.[264] The State filed a complaint against Lee under Alaska’s Unfair Trade Practices and Consumer Protection Act, alleging that he engaged in consumer fraud in his advertisements and demonstrations for “free electricity.”[265] Lee did not adequately respond to discovery requests, despite repeated orders to do so from the court.[266] In response, the trial court ordered the facts alleged in the complaint to be deemed admitted.[267] The supreme court held that the complaint was properly deemed admitted, because Lee’s decision not to answer discovery was willful and prejudicial to the State’s case.[268] Also, there did not appear to be any effective alternatives that would correct the prejudice to the State’s case, other than deeming the facts to be admitted.[269] The supreme court affirmed the decision of the trial judge, holding that the facts in the complaint were properly deemed admitted when an individual willfully and prejudicially failed to follow court orders in responding to discovery.[270]

McLaughlin v. Lougee

In McLaughlin v. Lougee,[271] the supreme court held that the repeal of statutory contribution in Alaska did not preclude a common-law contribution action against defendants who were not parties to the original action.[272] The McLaughlins lost title to a property due to malpractice by their attorney Robson.[273] The McLaughlins allege that Robson’s law firm conspired with Robson in order to deprive the McLaughlins of their legal rights to sue Robson for malpractice.[274] Because Robson’s liability insurance was exhausted, the McLaughlins sought contribution for the remainder of their damages from Robson’s alleged co-conspirator, the law firm.[275] The superior court ruled that because the Uniform Contribution Act was repealed in 1989 by voter initiative, the McLaughlins could not seek contribution from Hughes Thorsness, a non-party to the original action.[276] The supreme court first stated that the ruling on this case applied only to cases between the 1989 voter initiative and the new contribution law enacted in 1997.[277] The supreme court held that common-law contribution is available against non-parties to the original action because fairly allocating damages according to the relative fault of all parties, or non-parties, furthers the objective of Alaska’s comparative-fault-several-liability rule.[278] Because Alaska does not reduce damages in an original action for the fault of non-parties, disallowing contribution in a subsequent action would be unfair to the parties deemed at fault in the original action.[279] The supreme court reversed the superior court’s decision and remanded the case, holding that the repeal of statutory contribution in Alaska did not preclude a common-law contribution action against defendants who were not parties to the original action.[280]

State, Department of Transportation and Public Facilities v. Miller

In State, Department of Transportation and Public Facilities v. Miller,[281] the supreme court held that the superior court did not err: (1) in denying the State a continuance where new information came to light two and a half months before trial; (2) in instructing the jury on negligence; (3) in permitting the jury to consider the lost earning capacity of the plaintiff; or (4) in failing to grant the State’s motion for judgment notwithstanding the verdict.[282] Miller was injured in a plane crash at an unmanned airport in Kipnuk owned and maintained by the State of Alaska.[283] He sued the State for negligence on the grounds that the State failed to maintain functioning windsocks on the runway and was awarded damages.[284] The State appealed.[285] The supreme court held that the superior court’s denial of a continuance for further discovery did not prevent the State from presenting evidence on four issues which affected the overall trial, because the State had enough time to present its core case and alert the jury as to the existence of the four new issues[286] and thus was not deprived of a “substantial right.”[287] Further, considering the condition of the airport as a whole, the jury was correctly instructed on the south windsock’s relevance.[288] Also, the superior court did not err in instructing the jury to consider lost earning capacity when Miller stipulated he was not seeking damages in relation to his decision to leave his job, because the issue of lost earning capacity was distinct from the issue of actual lost earnings, and on the facts a reasonable jury could have found that Miller was entitled to damages for lost earning capacity.[289] Finally, the State was not entitled to a judgment notwithstanding the verdict, because a reasonable person could find that the State, having installed but not maintained the windsock, was aware it had created a dangerous condition and failed to adequately warn about or remedy the condition.[290] The supreme court affirmed the decision of the superior court, holding that the superior court did not err: (1) in denying the State a continuance where new information came to light before trial; (2) in instructing the jury on negligence; (3) in permitting the jury to consider the lost earning capacity of the plaintiff; or (4) in failing to grant the State’s motion for judgment notwithstanding the verdict.[291]

Milos v. Quality Asphalt Paving, Inc.

In Milos v. Quality Asphalt Paving, Inc.,[292] the supreme court held that the evidence in a wrongful death suit permitted the inference that an employee killed at his worksite was off-shift at the time of the accident and that this fact was material to a determination of whether Alaska’s workers’ compensation statute would apply as an exclusive remedy.[293] Milos was killed after riding, without authorization, an ATV belonging to his employer, Quality Asphalt Paving, Inc. (“Quality”), up a large pile of gravel and accidentally contacting an overhead power line.[294] Milos’s estate sued Quality for negligence, and Quality moved for summary judgment, arguing that, under Alaska law, workers’ compensation was the estate’s sole remedy.[295] The superior court granted summary judgment to Quality, holding that Milos’s injuries arose out of and in the course of his employment.[296] The supreme court held that the estate had submitted enough evidence to create a genuine issue of fact about whether Milos was on the clock at the time of the accident.[297] Further, this issue was material because if Milos’s off-clock status were proven, it might exclude him from workers’ compensation coverage.