Alaska Law Blog

In the interest of truth in advertising, I will no longer describe these posts as "weekly" summaries of Alaska Supreme Court opinions. Nonetheless, here is a selection of some relevant and interesting opinions issued by the Alaska Supreme Court over the past month.

May 8, 2009

In Cragle v. Gray, a granddaughter claimed that her grandmother orally promised to leave her house to her if she would care for her until she died. The grandmother’s will left the house to her daughter, and not the granddaughter. The court reversed the trial court’s denial of a motion for partial summary judgment, holding that the oral promise was a succession contract and unenforceable under AS 13.12.514.

Municipality of Anchorage v. Regulatory Commission of Alaska held that the Regulatory Commission had no reasonable basis for denying approval of rate increases requested by the Anchorage Water and Wastewater Utility. The rate increases were necessary because of new regulations adopted by the Municipality regarding payment in lieu of property taxes.

April 24, 2009

E.P. v. Alaska Psychiatric Institute contains a good discussion of Alaska’s involuntary committee laws. The opinion affirms the commitment of a mentally ill individual on three consecutive occasions. The court found that the individual had suffered organic brain injury as a result of his substance abuse, and was a danger to himself and others.

Smith v. Kofstad addressed the time limit for executing on a judgment, and the effect passage of property by operation of law to the judgment debtor’s spouse had the judgment creditor’s effort to executive on the judgment – the property could not be executed on.

April 10, 2009

Ruest v. Alaska Petroleum Contractors addressed the State’s 50% share of any punitive damage award, and held that the parties to a case in which punitive damages are awarded cannot enter into a settlement post-verdict to avoid the State receiving its share of punitive damages. Consequently, the State’s interest in 50% of any punitive damage award attaches at the time the verdict is published, and not at final judgment.

April 3, 2009

In Gibson v. Nye Frontier Ford, Inc., the Alaska Supreme Court reaffirmed that it will do much to preserve an arbitration clause in a contract. Although it found that part of an arbitration provision was unconscionable, it also held that the unconscionable provision was severable, leaving the remainder of the arbitration agreement enforceable. The court did hold that requiring an employee to pay arbitration costs was not permitted by the Alaska Wage and Hour Act. As such, the employer could require arbitration of the employee’s claims only if the employer agreed to pay the arbitration costs.

We’ve hit a “perfect storm” of sorts for guns and the law.

First, we had heavily armed attorney Wayne Anthony Ross rejected for the post of Alaska Attorney General. This one made you catch your breath for a second since it’s the first time in state history a cabinet-level nominee has gone down in flames. But at least WAR accepted his fate and retired from the scene with as much dignity as he could muster. I think it significant that WAR did not strap on a Peacemaker and invite Hollis French (Anchorage Democratic Senator and fellow lawyer) to meet him out on 4th Street at high noon. (“Go ahead, Hollis. Make my day.”)

Next, the 10th anniversary of the Columbine shootings came up. This one made you catch your breath for a minute because of the awful memory of the senseless attack. It was particularly disconcerting to find out that all the motivations we had been lead to believe lay behind the tragedy were bogus. According to the myth busters, the shooters were not actually bullied, did not set out for revenge against the jocks, and were never part of the Trench Coat Mafia. Instead, the reasons for the terrible killings were just that Eric Harris was a maniacal psychopath and Dylan Klebold was not very good at picking his friends. Not real comforting for the fans of an ordered society who like explanations for what went wrong. Even Oprah was discouraged by it.

Now, we’ve got the Ninth Circuit jumping into the fray with both barrels blazing. On April 20, 2009, the Nines issued an important ruling in Nordyke v. King about the Second Amendment to the Constitution. This one made you hold your breath for a full half hour while sorting through the Scalia-esque twists and turns of constitutional law that are set out in the hefty opinion.

The Nordyke case arose because Alameda County, California denied some folks a permit to hold a gun show at the County Fairgrounds. The County based its decision on an ordinance it had adopted that made it a misdemeanor to pack a gun or ammo on County property. The Nordyke plaintiffs took exception to this, claiming in essence that the Second Amendment gave them the right to take a gun or ammo wherever they wanted to go.

The remarkable part of the opinion is that the Nines had to wrestle with the fundamental question of whether the Second Amendment even applied to the States at all. Apparently there was some doubt about the issue and other courts had rejected the notion. But rest assured gun advocates. The Ninth Circuit, in spite of its reputation as a den of liberality, found the Second Amendment applied to the States through the black art of "selective incorporation" under the Due Process Clause of the Fourteenth Amendment.

Yet the application of the Second Amendment to the State of California and its counties did not mean the Nordyke plaintiffs won their case. Instead, the Nines held the ordinance prohibiting guns and ammo on County property did not really infringe on the right to keep and bear arms. The Nordyke plaintiffs could keep their guns and pass them around amongst themselves all they wanted, just not on this particular spot. So in spite of the lofty constitutional issues involved, it was a half-a-loaf deal in the final analysis.

Here in Alaska, the fundamental question the Ninth Circuit confronted is a non-starter since the Constitution of the State of Alaska contains its own version of the Second Amendment. Section 19 of Article I to the Alaska Constitution even says the “individual right to keep and bear arms shall not be denied or infringed by the State or a political subdivision of the State.” This “individual right” phrase differs from the words of the federal Constitution. The unique Alaska language saved us the bother of having to pay much attention at all to the U.S. Supreme Court’s recent decision in District of Columbia v. Heller.

Still, I commend the Nordyke decision to your reading list. It’s a mini-course in constitutional law and it even brings up some old law school chestnuts that are perhaps better off forgotten, such as the Slaughter-House Cases.

Nordyke also has a short concurring opinion that’s worth reading. In the concurrence, Judge Gould feels compelled to point out that "[a]ll weapons are not ‘arms’ within the meaning of the Second Amendment, so, for example, no individual could sensibly argue that the Second Amendment gives them a right to have nuclear weapons or chemical weapons in their home for self-defense.” I’m thinking about highlighting this segment of the decision and sending it over to WAR. You know, just in case he might be getting any ideas about responding to the Alaska Legislature.

Folks who ought to know are saying that Justice Robert Eastaugh is retiring from the Alaska Supreme Court. My information is that Justice Eastaugh is going to be hanging up the black robe in early November 2009.

Justice Eastaugh has served on the Court for the last 15 years. He was appointed by Governor Wally Hickel. You can access Justice Eastaugh's biographical information on the Court System's website.

Given the last go-round between Govenor Palin's supporters and the Judicial Council over Justice Morgan Christen's appointment, it will be interesting to see how this upcoming vacancy on the State's highest court is handled.

(I haven't seen this item reported in the media or elsewhere yet. So now you can't ever say that the Alaska Law Blog is always way behind the current news cycle.)

4/15 UPDATE: Justice Eastaugh's retirement is now confirmed on the Alaska Judicial Council's website.

It is with heavy hearts that we report the death of John M. Conway, one of this firm’s founding members and its guiding hand for many decades.

John suffered a stroke while at his second home on the island of Molokai in Hawaii. He was taken to the hospital where he passed away on March 31. John was 72 years old.

John Conway was born in Juneau, Alaska in 1936. He grew up in Sitka where his father, J. J. Conway, ran a commercial dock and other business enterprises. John received an undergraduate degree from the University of Washington in 1958, and a law degree from the same university in 1961.

After law school, John came to Anchorage and started practicing law, initially as an associate in the office of John Hellenthal. Shortly thereafter, in 1962, John joined with Jerry Wade to form the law firm of Wade & Conway, which became Atkinson, Wade & Conway once Ken Atkinson joined them in 1965. The firm prospered and grew and is today Atkinson, Conway & Gagnon, Inc. John served as the firm’s de facto managing partner from the beginning through the 1990s.

Starting out on everything from divorce cases to admiralty claims, John established himself as a gifted trial attorney. He had a true talent for getting right to the heart of any dispute. John’s no-nonsense approach and frankness gave him a real courtroom presence and won him the respect of the judges and jurors before whom he tried cases.

As his reputation grew, John was sought out by many of the biggest clients to handle many of the biggest civil cases in Alaska. He represented Providence Hospital for decades and served on its advisory board. He handled many litigation matters for the National Bank of Alaska. Perhaps John’s most famous case was the impeachment trial of his friend and client, Governor Bill Sheffield. John organized the Governor’s defense and handled the impeachment hearing as co-counsel with Philip Lacovara. The Governor, of course, was acquitted.

In later years, John focused his legal efforts on defending complex products liability cases, including cases involving firearms. He won some remarkable defense verdicts for his clients in these cases, proving yet again his great talent as a trial advocate.

John was preceded in death by his wife, Sally. He is survived by his longtime companion, Ruthann Hansen, and by his four daughters, Shannon, Lael, Maribeth and Molly, sons-in-law, and a fine future jury pool of grandchildren.

We are covering two weeks worth of opinions today.

Last week, the court issued Irby v. Fairbanks Gold Mining, Inc., where it held that a workers’ compensation claim was not untimely when the family of a deceased employee waited until after the five-year presumptive death period expired to file a successful presumptive death petition. The court relied on the fact that the employer had notice of the claim and was not prejudiced by the delay, as well as the fact that the family’s first presumptive death petition, filed soon after the industrial accident in which the employee likely died, had been denied for insufficient evidence. This case was a relatively straight-forward application of the doctrine of equitable tolling, as the employee’s family consistently asserted their rights in a different judicial forum. What is missing from the case is a discussion why the employer denied that the employee had died, given that the employee's bulldozer was found at the bottom of a tailings pond shortly after the employee (and his bulldozer) disappeared.

This week, the Alaska Supreme Court issued four opinions. In Allen v. State, Dept. of Health & Social Services, Div. of Public Assistance, the court considered whether the State could recover overpayments of food stamps from recipients, where the overpayment was caused by the State’s error. The court held that Alaska’s common law of equitable estoppel, which would normally have barred the State’s claim for repayment, was preempted by federal law, which required the State to recoup overpayments. The court, however, also held that the notice provided by the State to the recipients was insufficient and violated due process, and ordered the State to issue a new notice before seeking reimbursement. The court recommended that, in connection with the new notice, the State consider the hardship the beneficiaries would suffer as a result of the State’s recoupment efforts.

In In the Matter of the Adoption of S.K.L.H., the court addressed whether an adoption could be rescinded based on the birth mother’s misunderstanding as to the level of visitation she would have with the child that was being put up for adoption. The court held that the birth mother’s misunderstanding was not a basis for rescinding the adoption, but that the trial court should determine the proper amount and type of visitation between the birth mother and the child.

Ted W. v. State, Dept. of Health & Social Services, OCS, held that a father whose parental rights had been revoked had no standing to contest a finding that his child was a child in need of aid, even if the child had been temporarily placed in his custody after his parental rights were terminated.

Finally, in Clemensen v. Providence Alaska Medical Center, an elderly woman with Alzheimer’s was released by a hospital to her adult daughter. The elderly woman subsequently filed for divorce from her husband. Her husband brought suit against the hospital, claiming economic damages and emotional distress out of the fact that the hospital had promised to release the elderly woman only into his custody. The court affirmed the trial court’s dismissal of the husband’s claims that were based on the divorce filing, finding that, as a matter of law, there is no claim for damages arising out of a divorce. The court also held that the husband’s claim for breach of fiduciary duty, which sought damages independent of his divorce, was barred by the tort statute of limitations.

It is this last finding of the Alaska Supreme Court that is most interesting. In past decisions, the court has consistently applied the contract statute of limitations to claims for breach of fiduciary duty. In Clemensen, however, the court stated in a footnote that the source of the fiduciary duty will determine the proper statute of limitations. Thus, in some breach of fiduciary duty cases, the tort, and not contract, statute of limitations will apply. This is a significant break from prior Alaska case law, and it is surprising that it was done in a footnote, and when such a holding was not necessary to decide the case.

Alaska is celebrating 50 years of statehood this year. Speaking as a 50-plus year old guy, I know what comes next. That’s right, it’s time for Alaska to get a colonoscopy.

No doubt the State could really benefit from a good cleansing and inspection of its lower tract. All the nastiness the federal gummint, the oil companies and the politicians have shoved down Alaska’s throat over the years had to end up somewhere. We need to be sure those hazardous materials are out of the way to prepare for the smooth operation of the State for the next 50 years. Sure, these medical procedures can be expensive, but I think we could use federal stimulus money to pay for it. It ought to qualify as a shovel-ready infrastructure project since it’s critical maintenance of Alaska’s Old Dirt Road.

I can just imagine our Official State Gastroenterologist, Dr. Ashman, performing the procedure. The Doc will slip the colonoscope into Alaska’s anal canal, which is otherwise known as the State Capitol Building in Juneau. A little lubrication may be required to do the job properly. The usual lubricant for that location would probably work best. So the Doc is going to have to slip the Sergeant-At-Arms guarding the door a little cold hard cash.

As the scope enters the State’s sigmoid colon, Doc A is going to encounter a tough bezoar of hair and whatnot lodged there. The hair is left over from Ramona Barnes’ beehive 'do when she ran the Legislature, and it’s all bound up with tufts of llama fur that must have come off of one of the power suits former Senate President Jan Faiks wore. Yikes! Alaska doesn’t need that stuff anymore, not now that a new woman has a firm grip on the seat of power. The Doc will have to prise the hairball loose and flush it out of there.

Moving on up the descending colon, the scope will come upon a series of lesions in the intestine wall leaking an oily fluid and surrounded by ugly bile stains. Yes, it’s the sad remnants of the Exxon Valdez oil spill. The Doc makes a note in the medical chart to be sure to pursue the $100 million “Reopener” clause in the settlement agreement reached in the civil lawsuit against Exxon. In legal terms, this is known as asking for additional unforeseen damages, but in medical parlance the procedure is called a “walletectomy.” The Doc also notes that perhaps the lesions would heal up on their own if Exxon would just spoon-feed the State a strong dose of gas line development elixir.

The scope next passes into the transverse colon. Here, the Doc finds an odd looking polyp wiggling around. His first inclination is to snip the thing off. But then he takes a closer look and recognizes it as the Alaskan Independence Party. The Doc knows that this thing is benign. In fact, Alaska has gotten good use out of the AIP. It made for great copy during the last election when reporters from Outside discovered Todd Palin was previously an AIP member. So they thought the First Dude was advocating for Alaska to secede from the union!

Plus, Doc A recalls that there are guys in Russia predicting the economic collapse of the USA with Alaska reverting to Russian control. The AIP could come in handy if that came to pass. Almost all Alaskans would agree it’s far better to set up the independent Republic of Alaska than to become Extremely East Siberia. So the Doc leaves the AIP polyp alone.

Dr. Ashman finally pushes the scope all the way up to the ascending colon. Oh My Goodness! He finds diverticulosis, not far from the cecum. And it’s red and inflamed, clear signs of an active infection. This, of course, is the VECO scandal through which Alaskans have discovered just how little money it takes to buy an Alaska politician. For instance, it turns out that you can purchase a couple of State House Representatives from the Mat-Su Valley for a collective price that is less than a used Daewoo. Since everything costs more up here in the Greatland, the citizenry naturally had assumed the political leaders would as well. Nope, the Alaska State Legislature has been run as a discount store operation. Their motto: “We sell [out] for less.”

Doc A makes a final note to call the specialists from Washington, D.C. about this diverticulosis. A diet higher in fiber would also help, with the fiber being politicians who have a backbone and some actual integrity. The Doc has no illusions, though, about Alaska embracing the lifestyle changes that are necessary for this to happen.

And there you have it. Not a pretty picture, but a necessary thing for the future health of any 50 year old.

In Southeast Alaska Conservation Council v. State, the court held that Article IX, Section 7 of the Alaska Constitution, which bans dedicated funds, prohibited the legislature from directing that income earned on lands transferred by the State to the University of Alaska be placed in the University’s endowment fund. The court also rejected the State’s argument that Article IX, Section 7 did not apply to lands owned by the University, holding that University lands are State lands. The court concluded by finding that the land grant provision of the challenged legislation could not be severed from the unconstitutional portion of the challenged legislation.

In Cusack v. Cusack, the court considered a custody dispute. The court affirmed the trial court’s decision to award physical and legal custody to one parent, to no order family counseling, and to permit the parent with physical and legal custody the option of sending the child to boarding school.

There were three reported decisions issued by the Alaska Supreme Court this week.

In Wooten v. Hindon, an insurer had defended the insured under a reservation of rights, and the insured had retained its own counsel. The plaintiff settled with the defendant’s insurer. When the plaintiff attempted to dismiss the case with prejudice, because of its settlement with the defendant’s insurer, the defendant objected, and argued that it (the defendant/insured) was the prevailing party and should be awarded attorney’s fees. The Alaska Supreme Court rejected this argument, unsurprisingly finding that payment by the insurer to the plaintiff in complete settlement of the plaintiff’s claims against the insured meant that the insured was not the prevailing party.

In Progressive Casualty Ins. Co. v. Skin, the Alaska Supreme Court considered whether an automobile insurance policy covered the son of an insured for liability arising out of an accident that happened when the son was operating an ATV. Applying well-recognized principles of insurance contract interpretation, the court held that the policy’s liability coverage covered only accidents involving automobiles and trucks, and excluded coverage for accidents involving ATVs. The court, however, also held that the son was entitled to coverage under the policy’s medical payments provisions, as that part of the policy did not clearly exclude coverage for accidents that occurred while operating an ATV. The court held that the language in the medical payments provision of the policy was inconsistent with the language of in the policy’s liability coverage provision, and that inconsistency should be construed in favor of coverage.

Finally, in Brotherton v. State, Dept. of Revenue, CSSD, the Alaska Supreme Court considered the proper amount of child support to award in a child custody case.

While some members of Atkinson Conway & Gagnon have been using this blog to get their name in the paper, others, namely your humbled writer, have fallen by the wayside, as has been so directly (and unnecessarily) pointed out. That trend ends now, in large part because of Ayuluk v. Red Oaks Assisted Living, Inc., in which the Alaska Supreme Court expanded the scope of vicarious liability in Alaska. Under the normal rules, an employer is legally responsible for any harm caused by an employee only if that employee was acting within the “course and scope” of his or her employment. In Ayuluk v. Red Oaks Assisted Living, Inc., the Alaska Supreme Court held that an employer could be legally responsible for the acts of an employee, even if those acts are clearly outside the course and scope of their employment, if (1) the employee had, by reason of their employment, “substantial power or authority” over the victim, and (2) that power or authority played a “substantial factor” in bringing about the tort. While this holding is a logical extension of the Court’s previous decisions in the cases involving sexual harassment, it is a significant expansion of an employer’s possible liability. Although the “course and scope” of employment test will continue to be the predominate test for vicarious liability, there is now the possibility that an employer can be liable for even egregious torts (or crimes) committed by an employee, if that employee was able to commit that tort because of the power and authority granted to him by his employer.

The other decisions issued by the Alaska Supreme Court on February 20th and 27th do not, however, break any new ground. Kazan v. Dough Boys, Inc."> addresses a dispute arising out of the sale of a business and an “overbroad financing statement,” and stands for the rather unremarkable position that a court should not enforce a contract against just one of the parties, absent unconscionable terms. Alaska Exchange Carries Association, Inc. v. Regulatory Commission of Alaska applies the rules governing intervention, while State v. Smart held that the United States Supreme Court’s decision in Blakely v. Washington did not apply to persons convicted prior to the issuance of that opinion.

Atkinson, Conway & Gagnon is pleased to announce that Best Lawyers in America has ranked it as number 1 for 2009 in several categories.

Out of the law firms in the entire State of Alaska and those in Anchorage, Best Lawyers has ranked Atkinson, Conway & Gagnon #1 in the areas of Health Care Law, Product Liability Litigation, Professional Malpractice Law and Securities Law.

A separate rating service, Benchmark: Litigation, has also released its litigation law firm recommendations for 2009. Atkinson, Conway & Gagnon earned Benchmark's highest possible ranking: "Highly Recommended."

Both Best Lawyers in America and Benchmark: Litigation utilize peer review surveys to determine the rankings. These surveys establish which firms are regarded by their peers as performing exceptional legal work.

Bruce E. Gagnon, one of the attorneys at Atkinson, Conway and Gagnon, Inc., has just been selected as a "Lawyer Of The Year" by Best Lawyers in America. Mr. Gagnon is one of three lawyers to be recognized from Alaska, and the only Alaska lawyer recognized in the specialty practice of Corporate Law.

Another lawyer from the firm, Richard E. Vollertsen, was also selected by Best Lawyers in America as a "Lawyer Of The Year" in the specialty practice of Personal Injury Litigation.

Best Lawyers in America is one of the oldest publications rating lawyers in the United States, and is the gold standard for accuracy and integrity. Best Lawyers in America compiles its lists of outstanding attorneys by conducting exhaustive peer-review surveys in which thousands of leading lawyers confidentially evaluate their professional peers. The lawyers being honored as "Lawyer Of The Year" received particularly high ratings in their surveys by earning a high level of respect among their peers for their abilities, professionalism, and integrity.

Steven Naifeh, Managing Editor of Best Lawyers, says, “We continue to believe – as we have believed for more than 25 years – that recognition by one’s peers is the most meaningful form of praise in the legal profession. We would like to congratulate Bruce E. Gagnon on being selected as the ‘Alaska Best Lawyers Corporate Lawyer of the Year’ for 2009.”

It’s right there at the end of your contract. A funky little clause that most people probably skip right over. Jane Widgetmaker has exhausted herself studying the main business points covered in the contract so she just skims the rest of it. It’s just boilerplate legal stuff anyway, right?

What I’m talking about, of course, is the lowly INTEGRATION clause. Often they read something like this:

This document contains the complete and final agreement of the parties on the subject matter. All prior negotiations, representations and understandings are expressly superseded and may not be relied upon.

(Actually, this is a damn fine example of an integration clause. Too often, the ones I see leave out some of the important lingo. For instance, you need to use both “complete” and “final” in the first sentence to really have an effective integration clause. Otherwise you end up with a “final” contract, but not a “complete” one. This means the Yo-Yo on the other side of the deal can say something else has to be added to make it a “complete” writing, which then changes the “final” deal entirely. And I’m not just talking about transactions with Master Cellists here.)

Now, “integration” has nothing to do with the 1960s civil rights movement. When Governor Wallace stood in the schoolhouse door to stop integration he was not trying to thwart effective contract drafting. No, “integration” in this instance means that the contract is a complete unit. It’s the whole kit and caboodle, the entire shooting match, the 100% genuine article. When you’ve got an integrated contract, there is theoretically nothing outside of the written document that can have any affect on the deal.

Well, that’s the theory any way. The practical reality is something else again. The legal rule that is supposed to control is known as the “Parol Evidence Rule.” The Parol Evidence Rule comes into play once you have a integrated contract; it says that evidence of prior or contemporaneous oral discussions can’t be used to vary the written words of the contract. Yet in spite of the legal sounding bodaciousness of the Parol Evidence Rule, its application can often be sidestepped. Whether a contract is integrated or not, the courts in Alaska will still admit outside evidence to show what the words of the contract mean, or to determine whether there is a basis for setting the whole contract aside.

Notwithstanding the courts’ floccinaucinihilipilification of the Parol Evidence Rule, integration is still important in contract drafting. If you want to have any hope of the words used in the contract being given actual effect, then a proper integration clause is necessary. Also, the clause brings it to both parties' attention that every aspect of their transaction needs to be stated in the written document. For instance, if Jane Widgetmaker really wants the guy on the other side of her deal to throw in his CD collection of Yo-Yo Ma Plays Elvis' Greatest Hits, then she had better make sure the contract says so. (Just imagine, "Burning Love" sawed out on a cello!)

So check that there is a proper fine version of the funky little clause is at the end of each of your contracts.