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7/25/2019 Oakly Enterprises, LLC v. NPI, LLC, Alaska (2015)
1/23
Notice: This opinion is subject to correction before publication in the PACIFICREPORTER.
Readers are requested to bring errors to the at tention of the Clerk of the Appel late Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, em ail
THESUPREMECOURTOFTHESTATEOFALASKA
OAKLYENTERPRISES,LLC,
andRYANFRIESEN,
Appellants,
v.
NPI,LLC;NPITIMBER,LLC; andCOREYWHITNEY,individually
andd/b/aWHITNEYLOGGING,
Appellees.
)
) SupremeCourtNo.S-15159
SuperiorCourtNos.3PA-08-01671CI
and3PA-08-01349CI(Consolidated)
OPINION
No.7042-August28,2015
)
)
)
)
)
))
)
)
)
)
AppealfromtheSuperiorCourtoftheStateofAlaska,Third
JudicialDistrict,Palmer,KariKristiansen,Judge.
Appearances:DavidD.Clark,LawOfficeofDavidClark,
Anchorage, for Appellant. Jonathon A.Katcher, Pope&
Katcher,andDebraJ.Fitzgerald,Anchorage,forAppellees.
Before:Fabe,ChiefJustice,Winfree,Stowers,Maassen,and
Bolger,Justices.
MAASSEN,Justice.
I. INTRODUCTION
Thiscasearisesfromadisputeoverwhethertheownerofawoodchipper
maybeheldjointlyandseverallyliable,alongwithtwopropertyowners,fordamages
causedtotheirpropertybythechippersleakofdieselfuel.Thechippersownerhad
leasedittoanotherperson,whoabandonedit.Thepropertyownersclaimtheywere
mailto:[email protected]:[email protected]7/25/2019 Oakly Enterprises, LLC v. NPI, LLC, Alaska (2015)
2/23
onlyseverallyliable,ifatall,foraportionofthedamagesandthatthechippersowner
wasliablefortherest.Ajuryfoundthatthechipperdidnotcontaminateoneofthetwo
properties,butasfortheotherthejuryfounditsownerjointlyandseverallyliable,along
withthechippersowner. Thesuperiorcourtthenequitablyallocateddamagesamong
theliablepropertyowner,theownerofthechipper,andthechipperslessee.This
allocationleftthepropertyownerliableformostofhisownloss.
Bothpropertyownersappealthesuperiorcourtsdecisiontoequitably
allocatedamages.1Theyalsoappealanevidentiaryrulingandtheawardofattorneys
fees. We affirm, holding that the superior court properlyconstrued the governing
statutesandtheevidencerulesandthatitsawardofattorneysfeeswasnotanabuseof
discretion.
II. FACTSANDPROCEEDINGS
RyanFriesenandOaklyEnterprises,LLC,ownpropertiesacrosstheroad
fromeachotherinWasilla.OaklyEnterprisesisafamily-ownedcorporation,owned
halfbyFriesenandhalfbyhisfatherandstepmother.
In2004aloggernamedCoreyWhitneyleasedwoodchippingequipment
fromNPI,LLC,acompanyinvolvedinconstructionandtimberleases. Whitneylater
enteredintoaleasewithOaklyEnterprisesforashopandaplacetostoresomeofthe
leasedequipment.HeenteredintoanotherleasewithFriesenforaheavyequipment
parkingarea,whereheparkedthepieceofequipmentatissueherea1995Peterson
chipperhehadleasedfromNPI.
In early 2006 the Alaska Department of Environmental Conservation
discoveredseveraldieselspillsontheOaklyEnterprisesproperty,nearthechipper. In
Althoughthepropertyownersfareddifferentlyinthesuperiorcourt,they
presenttheirargumentsjointlyonappeal.
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1
7/25/2019 Oakly Enterprises, LLC v. NPI, LLC, Alaska (2015)
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June the Department sent notices of violation to Whitney and Oakly Enterprises,
assertingthattheyhadviolatedstateregulations2byfailingtocontacttheDepartment
andsubmitasitecharacterizationplanbeforecleaningupsurfacestainsfromthediesel
spills. NeitherWhitneynorOaklyEnterpriseswascooperative. InMay2007Whitney
notifiedOaklyEnterprisesthathewouldvacateitspropertyattheendofJune,andin
earlyJulyhetransportedsomeoftheleasedequipmentbacktoNPIatPortMacKenzie,
acommercialandindustrialareaonCookInlet.Whitneylefttheremainderofthe
equipment,includingthePetersonchipper,inplaceonFriesensandOaklyEnterprises
properties.
InJuly2007Friesenhand-deliveredalettertoNPIclaiminghehadbecome
awareofsomeprettylargeoilspillsonhispropertyandwouldstartcleanup[him]self
topreventfurtherpollutionifNPIdidnotrespondwithinfivedays. Fourdayslaterhe
movedthePetersonchippertopropertyownedbyhisfather.Duringthemonthsthat
followed,NPIremovedmostofitsremainingequipmentfromtheFriesenandOakly
Enterprisesproperties,butitdidnotundertakeanyenvironmentalcleanup.Itrecovered
thePetersonchipperinOctober2008.
In 2009 Friesen and Oakly Enterprises brought suit against NPI and
Whitney, seeking damages in excess of $150,000 for the contamination of their
properties,costsofcleanup,andrent.3Whitneydidnotanswerthecomplaint,anda
2 18AlaskaAdministrativeCode(AAC)75.335(2015)providesinrelevant
part,(a)Beforeproceedingwithsitecleanupunderthesitecleanuprules,aresponsible
personshallcharacterizetheextentofhazardoussubstancecontaminationatthesite. (b)Aresponsiblepersonshallsubmitasitecharacterizationworkplantothedepartmentfor
approvalbeforebeginningsitecharacterizationwork.
3 OaklyandFrieseneachbroughtsuitunderavarietyoftheories,including
(continued...)
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defaultjudgmentwasenteredagainsthim.Thesuperiorcourtinitiallygrantedsummary
judgmenttoNPI,holdingthatNPIwasnotliableforWhitneysactionsinpollutingthe
FriesenandOaklyEnterprisespropertiesastheoperatoroftheinvolvedfacility(as
thesetermsaredefinedforpurposesofAS46.03.822,whichimposesstrictliabilityfor
damages and other costs resulting from an unpermitted release of a hazardous
substance);asthelessorofthePetersonchipper;asWhitneysprincipalinanagency
relationship;orthroughaveil-piercingshamtransactiontheory.Onreconsideration,
however, the superior court found genuine issues ofmaterial fact regarding NPIs
liabilityunderseveraltheories,includingwhetheritcouldbeheldliableasanowner
oroperatorunderAS46.03.822andwhetheritwasliableforrentandothercosts
incurredafterWhitneyabandonedthePetersonchipperontheplaintiffsproperty. The
superiorcourtalsograntedNPIsmotioninliminetoexcludeareportonenvironmental
conditionsatNPIsPortMacKenzieproperty,whichFriesenhadplannedtointroduce
torebut[NPIs]assertionthatitranacleancamp.
Thesuperiorcourtconductedaneight-dayjurytrialontheissueofwhether
NPI was liable for any of Friesens and Oakly Enterprises damages. The jury
instructions included one on avoidable consequences, proposed by NPI, and a
correspondingverdictformaskingthejurytoaffixadollaramounttothedamages
Friesenreasonablycouldhaveavoided,ifany.4Answeringspecificquestionsonthe
3(...continued)
trespass,negligence,andagencyliability,buttheyultimatelylimitedtheirenvironmental
claimstostrictliabilityunderAS46.03.822,andtheircaseswereconsolidated.
4 Theinstructionstated:
RyanFriesenisnotentitledtobepaidforanylossorforpart
ofanylosshecouldhaveavoidedwithreasonableeffortsand
(continued...)
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specialverdictform,thejuryfoundthatNPIwasnottheoperatorofafacilityfrom
whichdieselfuelwasspilledonOaklyEnterprisespropertybutthatthedieselspillon
FriesenspropertycamefromthePetersonchipper.Itfoundthatthereasonablecosts
ofrepairingthedamagetotheRyanFriesenrealpropertyfromthedieselspillswas
$38,437,andthatFriesenreasonablyincurred$14,990inexpensesinanefforttoavoid
orreduceotherlosseshereasonablybelievedwerecausedbyNPIs1995Peterson
Chipperonhisland.5 Finally,thejuryansweredYestothequestionwhetherFriesen
couldreasonablyhaveavoidedallorpartofthedieselspillon[his]property,andit
foundthatthedollaramountoflosstoRyanFriesenduetothedieselspillon[his]
propertythat[he]reasonablycouldhaveavoidedwas$7,687.40(20percentofthetotal
amountithadfoundtorepresentthereasonablecostsofrepair).
NPIfiledapost-trialmotionaskingthecourttoequitablyallocatedamages
amongthepartiesthroughthecontributionprocessfoundinAS46.03.882(j).Thecourt
grantedNPIsmotioninacomprehensiveorderthatdetailedthehistoryoftheparties
dispute,setoutthejurysfactualfindings,andidentifiedtheequitablefactorsthecourt
consideredrelevant.TheseincludedtheGorefactors,whichthecourtdescribedin
4(...continued)
withoutunduerisk,hardship,orembarrassment,eventhough
thelossoriginallyresultedfromanactoromissionforwhich
NPIorWhitneyislegallyresponsible.Ifyoudecidethatit
ismorelikelytruethannottruethatRyanFriesencouldhave
avoidedanylossoranypartofanylosswithreasonable
effortsandwithoutunduerisk,hardshiporembarrassment,
youmaynotrequireNPIorWhitneytopaytheamountRyanFriesencouldhavereasonablyavoided.
5 Thislatteramount,representingFriesensexpensesinmovingthechipper
fromhispropertytopropertyownedbyhisfather,wasreducedbyremittiturto$10,787.
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shorthand as 1) fault, 2) amount, 3) toxicity, 4) involvement, 5) care[,] and
6) cooperation.6 Other equitable factors thecourt foundrelevant werefailure to
mitigateenvironmentaldamage,laches,uncleanhands,andmoralculpability.Applying
thesefactorstothefactsofthecase,thecourtconcludedthat[t]hemostequitableand
fairestmeansofdividingresponsibilityforthedieselspillistoallocatefaultbasedupon
the amount of time each party had responsibility for and control over the leaking
chipper. Thecourtfoundthatfor115days96percentofthe119daysthechipper
wasleakingdieselontoFriesenspropertybothWhitneyandRyan[Friesen]knew
orshouldhaveknownthatthechipperwasleaking,andhadtheabilitytocontrolthe
chipperand/ortheland,whereasNPIhadknowledgeoftheleakandcontroloverthe
chipperforonlytheremainingfourpercentoftime,afterFriesendeliveredhisnotice.
The court therefore made this initial allocation of fault: 48 percent to Whitney,
48percenttoFriesen,andfourpercenttoNPI.
6 [T]heso-calledGoreFactors[]findtheirsourceinthelegislativehistory
(andunsuccessfulamendment)ofCERCLA[thefederalComprehensiveEnvironmental
Response,CompensationandLiabilityAct]bythen-RepresentativeAlGore.Lockheed
Martin Corp. v. United States,35F.Supp.3d92,123(D.D.C.2014).Inlonghand,the
factorsare[1.]theabilityofthepartiestodemonstratethattheircontributiontoa
discharge,releaseordisposalofahazardouswastecanbedistinguished;[2.]theamount
ofthehazardouswasteinvolved;[3.]thedegreeoftoxicityofthehazardouswaste
involved;[4.]thedegreeofinvolvementbythepartiesinthegeneration,transportation,
treatment,storage,ordisposalofthehazardouswaste;[5.]thedegreeofcareexercisedby thepartieswith respect to thehazardouswasteconcerned, takingintoaccount the
characteristicsofsuchhazardouswaste;and[6.]thedegreeofcooperationbytheparties
withFederal,Stateorlocalofficialstopreventanyharmtothepublichealthorthe
environment.Id. (alterationsinoriginal)(quotingEnvtl. Transp. Sys., Inc. v. ENSCO,
Inc.,969F.2d503,508(7thCir.1992)).
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The court further concluded that Whitneys share of damages was
uncollectibleandwasthusanorphanshare. 7ItdividedtheorphansharebetweenFriesen
andNPIinproportiontotheirrelativesharesofdamages,withtheresultthatFriesenwas
responsiblefor$35,423.54ofthecostsofremediatingFriesenspropertyandNPIwas
responsiblefortheremaining$3,013.46.Thecourtsubsequentlyappliedthesame
analysistoFriesensexpensesinremovingthechipperfromhisproperty(the$14,990
thejuryfoundtobehisremovalexpenses,reducedonremittiturto$10,787). Itfound
thatNPIcouldhaverecoveredthechipperforconsiderablylessmoneythanFriesen
spentmovingitbutthatFriesenandhisfatherunreasonablyandunjustifiablyrefused
toreturnthechippertoNPIforfifteenmonths.Usingthesamepercentagesithadused
forthecostsofrepair,thecourtconcludedthatFriesenwasresponsiblefor$9,941.30of
theremovalexpensesandNPIwasresponsiblefortheremaining$845.70.
ThecourtfoundthatneitherNPInorFriesenwastheprevailingpartyon
theclaimbetweenthem. However,itfoundthatNPIprevailedoverOaklyEnterprises,
anditawardedNPIattorneysfeesfromOaklyEnterprisesintheamountof$36,764.63.
7 UnderCERCLA,orphanshareshavebeendefinedasresponsecosts
attributabletobankruptorfinanciallyinsolventpotentiallyresponsibleparties,whichare
allocated or apportioned among all solvent potentially responsible parties to the
litigation.See Charter Twp. of Oshtemo v. Am. Cyanamid Co.,898F.Supp.506,508-09
(W.D.Mich.1995).
Potentiallyresponsiblepartyisanothertermofart,promulgatedbythe
EPAtorepresentpartiessubjecttoliabilityforcleanupcostsunderCERCLAsection
107(a). Larry M. Sargent, Environmental Law AM International, Inc. v.InternationalForgingEquipment:Release Agreements Between Private Parties Under
CERCLA,21MEM .ST.U.L.REV .423,426n.28(1991).ItisreflectedinAlaskalaw:
Any entity that maybe required to take financial responsibility for cleaning up a
contaminatedsiteisapotentiallyresponsibleparty.Fed. Deposit Ins. Corp. v. Laidlaw
Transit, Inc.,21P.3d344,349(Alaska2001)(citingAS46.03.822(a)(3)).
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FriesenandOaklyEnterprisesappealthesuperiorcourtsdecisiontogrant
NPIs motion for contribution. They argue that the jurys avoidable consequences
findingapportionedtheharmscausedbythedieselspillunderAS46.03.822(i)and
contributionwasunnecessary.Theyalsoappealthesuperiorcourtsexclusionofthe
report evidencing the condition of NPIs Port MacKenzie property, aswell as the
calculationofNPIsattorneysfeeaward.
III. STANDARDSOFREVIEW
Thesuperiorcourtsdecisiontoallocateandapplycontributiontoadamage
awardinvolvestheinterpretationandapplicationofastatute.8Questionsregardingthe
interpretationandapplicationofastatutearequestionsoflawtowhichweapplyour
independentjudgment.9Weinterpretstatutesaccordingtoreason,practicality,and
commonsense,takingintoaccounttheplainmeaningandpurposeofthelawaswellas
theintentofthedrafters.10Whetherthesuperiorcourtappliedanincorrectlegal
standardisaquestionoflawthatwereviewusingourindependentjudgment.11
Wesetasidefactualfindingsofalowercourtonlywhentheyareclearly
erroneous.12[F]actualfindingsareclearlyerroneouswhen,afterareviewoftherecord
asawhole,weareleftwithadefiniteandfirmconvictionthatamistakehasbeen
made.13
8 See AS46.03.822.
9 Grimm v. Wagoner,77P.3d423,427(Alaska2003).
10 Native Vill. of Elim v. State,990P.2d1,5(Alaska1999).
11 Guttchen v. Gabriel,49P.3d223,225(Alaska2002).
12 Fred Meyer of Alaska, Inc. v. Bailey,100P.3d881,883(Alaska2004).
13 Id.at884(quotingBennett v. Bennett,6P.3d724,726(Alaska2000)).
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Wereviewthesuperiorcourtsdecisiontoadmitorexcludeevidencefor
anabuseofdiscretion.14 But[t]hecorrectscopeorinterpretationofaruleofevidence
createsaquestionoflawtowhichthiscourtappliesitsindependentjudgment,adopting
therulemostpersuasiveinlightofreason,precedentandpolicy. 15
We review an awardof attorneys feesunder an abuseof discretion
standard.16Thetrialcourthasbroaddiscretioninawardingattorneysfees;thiscourt
willnot findanabuseof discretion absent ashowing that the awardwas arbitrary,
capricious,manifestlyunreasonable,orstemmedfromimpropermotive. 17
IV. DISCUSSION
A. TheSuperiorCourtDidNotErrWhenItGrantedNPIsPost-Trial
Request For Contribution And Equitable Allocation Under
AS46.03.822(j).
AlaskaStatute46.03.822(a)providesthattheownerandtheoperatorof
a...facility,fromwhichthereisarelease...ofahazardoussubstance, 18 isstrictly
liable,jointlyandseverally,fordamages.19ThisisAlaskasanalogtothefederal
ComprehensiveEnvironmentalResponse,Compensation,andLiabilityAct(CERCLA),
14 Greene v. Tinker,332P.3d21,31(Alaska2014).
15 City of Bethel v. Peters,97P.3d822,825(Alaska2004)(quotingState v.
Coon,974P.2d386,389(Alaska1999)).
16 Ware v. Ware,161P.3d1188,1192(Alaska2007).
17 Id.(quotingUnited Servs. Auto. Assn v. Pruitt ex rel. Pruitt,38P.3d528,
531(Alaska2001)).
18
AS46.03.822(a)(2).Facilityisbroadlydefinedtoincludesuchthingsasastructure,equipment,andasiteorareaatwhichahazardoussubstancehas
been deposi ted, stored, disposed of, placed , or otherwise located.
AS46.03.826(3)(A)(i),(ii).
19 AS46.03.822(a).
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whichimposesstrictjointandseveralliabilityundersimilarcircumstances. 20Because
thiscasewasbroughtundersection.822,ouranalysisturnsfirsttotheplainlanguageof
thatstatute;21federallawinterpretingCERCLAispersuasivebutnotcontrolling. 22
A personcan escape the joint liability imposed by subsection .822(a)
through apportionment. Under subsection .822(i), a personotherwise jointly and
severally liable under [subsection .822(a)] is relieved of joint liabilityand is liable
severallyfordamagesandcosts...ifthepersonprovesthat(1)theharmcausedbythe
release...isdivisible;and(2)thereisareasonablebasisforapportionmentofcostsand
damagestothatperson.23Equitableconsiderationsplaynoroleintheapportionment
20 42U.S.C.9607(2012). WehaverecognizedthattheAlaskalegislature
craftedthecurrentversionofAS46.03.822usingCERCLAasapattern.Fed. Deposit
Ins. Corp. v. Laidlaw Transit, Inc.,21P.3d344,353-54(Alaska2001);see also Berg v.
Popham ,113P.3d604,606(Alaska2005)(identifyingsection.822asAlaskasversion
of[CERCLA]).
21 State, Dept of Commerce, Cmty. & Econ. Dev., Div. of Ins. v. Alyeska
Pipeline Serv. Co.,262P.3d593,597(Alaska2011)(explainingthatunderthesliding
scaleapproachtostatutoryinterpretation,[t]heplainerthestatutorylanguageis,themoreconvincingtheevidenceofcontrarylegislativepurposeorintentmustbe.(quoting
Govt Emps. Ins. Co. v. Graham-Gonzalez,107P.3d279,284(Alaska2005))).
22 See Berg,113P.3dat609(Th[e]differencebetweenAlaskaandfederal
lawreflectsourlegislaturesintenttoexpandliabilitybeyondCERCLAsstandards.).
23 AS46.03.822(i).Cf. Burlington N. & Santa Fe Ry. Co. v. United States,
556U.S.599,614(2009)([A]pportionmentisproperwhenthereisareasonablebasis
for determining the contribution of each cause to a single harm. (quoting
RESTATEMENT
(SECOND
)OF
TORTS
433A(1)(b)(1965))).Subsection .822(i)issimilartoRestatement433A,whichallowsapportionmentofdamagesamongtwoormore
causes where (a) there are distinct harms, or (b) there is a reasonable basis for
determiningthecontributionofeachcausetoasingleharm.Subsection.822(i)differs
in that it requires a showing of both distinct harms and a reasonable basis for
apportionment.
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analysis;rather,apportionmentisproperonlywhentheevidencesupportsthedivisibility
of the damages jointly caused by the [potentially responsible parties].24 Persons
relievedofjointandseveral liabilityby apportionmentareliable foronly theirown
divisiblesharesofcostsanddamages.Theburdenofproofisonthepartyseekingto
avoidjointandseveralliability;thisfurthersthelegislativepolicythatdeterminationsof
liabilityshouldbebasedonstatus,notfault,andshouldnotstandinthewayofprompt
environmentalresponse.25
Not all harms are capable of apportionment, however;26 jointly and
severallyliablepartieswhocannotprovethedivisibilityofharmandareasonablebasis
forapportionmentremainliablefortheentireharm. 27Buttheymaybringclaimsfor
contributionagainstotherpersonswhoarealsojointlyandseverallyliableforthesame
harm,eitherinthesamecivilactionorinasubsequentone.28Thus,onceapartywith
adirectclaimfordamagesagainstanotherhasbeenfoundjointlyandseverallyliablefor
24 Burlington N.,556U.S.at615n.9.
25
See Laidlaw Transit,21P.3dat348(Whenthelegislaturecreatedastrictliabilityregimeforhazardoussubstancecontamination,itexpresseditsjudgmentthat
negligence remedies were not adequately controlling the hazardous substance
contaminationproblem.).
26 Burlington N.,556U.S.at614-15.
27 See Spruce Equip. Co. v. Maloney,527P.2d1295,1298(Alaska1974)
(Wheretheharmissingleandindivisible,itisnotapportionedbetweentheplaintiffand
thedefendant,intheabsenceofastatuteprovidingforsuchdivisionofthedamages
uponanarbitrarybasis.(quotingRESTATEMENT (SECOND)OF TORTS 465cmt.c(1966))).
28 AS46.03.822(j);Laidlaw Transit,21P.3dat354-55(recognizingdirect
private cause of action, as well as cause of action for contribution, to recover for
damagestopropertycausedbyenvironmentalcontaminationunderAS46.03.822).
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areleaseofhazardoussubstances,thecourtmay,asitdidhere,recastthedirectclaim
asaclaimforcontributionuponconclusionofthelitigation. 29
Incontrastwithapportionment,whichrelatestotheresponsibilityofa
particularcauseforaparticularamountofdamages,contributionclaimsessentiallyseek
toallocatedamagesequitablyamongthosewhoshareresponsibility.30Contribution
undersubsection.822(j)allowspartieswhoarejointlyandseverallyliabletorecover
fromeachotheronthebasisofequitablefactorsthatthesuperiorcourtdeterminesare
appropriatetothecase.31Butapersonwhohasbeenrelievedofjointliabilityandis
liable severally for damages and costs attributable to that person under the
apportionmentanalysisofsubsection.822(i)cannotbemadetocontributetopersons
whoremainjointlyandseverallyliableforallthedamages;suchapersonisnolonger
anotherpersonwhoisliableunder(a)ofthissectionandwhocanbepursuedfor
contributionundersubsection.822(j).
Onthisappeal,thereisnodisputethatFriesenandNPIwerebothstrictly
liableundersection.822(a)forthedieselspillonFriesensproperty,asownersand
operatorsofthefacility(broadlydefinedbystatutetoincludeboththeequipmentand
29 Id.at350.
30 See McLaughlin v. Lougee, 137 P.3d 267, 275-79 (Alaska 2006)
(discussing history of contribution claims inAlaska and recognizing common law
contribution remedy because it furthers the goal of apportioning of tort losses in
accordancewitheachresponsiblepersonspercentageoffault).31 See Laidlaw Transit,21P.3dat350(recognizingthatwhenapotentially
responsiblepartysuesfordirectdamagesunderthefederalcounterpartstosubsections
.822(a) and (j), the federal statutes allow the claim, but leave room for equitable
distinctionsuponconclusionofthelitigation).
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thesite32)wherethespilloccurred.ButFriesenarguesthatthesuperiorcourterredwhen
itgrantedNPIsclaimforcontributionandappliedtheequitableanalysis.Hecontends
thatcontributionwasinappropriateinthiscasebecausethejuryhadalreadyapportioned
thedamagesforwhichhecouldbeheldseverallyliableundersubsection.822(i)when,
inresponsetotheverdictsquestionsaboutavoidableconsequences,itidentifiedthe
amountofdamageshereasonablycouldhaveavoided.Inhisview,thejurysfinding
thathereasonablycouldhaveavoidedsomeofthedamageswasadeterminationthathe
wasnot responsibleforanyoftheotherdamages. Werejectthisargumentforthe
reasonsthatfollow.
1. The jurys finding of avoidable consequences was not an
apportionmentunderAS46.03.822(i).
In its most common configuration, the damages rule of avoidable
consequencesbarsinjuredpartiesfromrecoveringdamagesforanyharmtheycould
haveavoidedbytheuseofreasonableeffortorexpenditureafterthecommissionofthe
tort.33Whenafact-finderhasconcludedthataninjuredpartyreasonablycouldhave
avoided some of the harm, the injured partys damages may be reduced by
apportionment.34
Butasnotedabove,apartyseekingapportionmentundersubsection
32 See supranote18.
33 RESTATEMENT (SECOND)OF TORTS918(1979);see also Anchorage
Indep. Sch. Dist. v. Stephens,370P.2d531,533(Alaska1962)(Itisacardinalrulein
thelawofdamagesthataplaintiff,withanotherwisevalidrightofaction,isdenied
recoveryforsomuchofthelossesasareshowntohaveresultedfromfailureonhispart
tousereasonable effortstoavoidorpreventthem. This rule . .. isknownasthe
avoidableconsequencesrule.).34 See RESTATEMENT (SECOND) OF TORTS 433A cmt. f (1979) (The
damagesruleastoavoidableconsequences,statedin918,whichdeniesrecoveryfor
theaggravationofpersonalinjuriesorotherharmresultingfromtheplaintiffsfailure
(continued...)
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.822(i)mustmakeathresholdshowingthattheharmisdivisibleandthereisareasonable
basis for apportionment. Here, we conclude that the jurys finding of avoidable
consequenceswasnotanapportionmentundersubsection.822(i),asFriesenargues,
becauseneitherthepartiesnorthecourtintendedittobeandbecauseFriesendidnot
makethethresholdshowing.
Thejurywasspecificallyinstructedtodeterminewhethertherewasany
loss Friesen could have avoided with reasonable efforts and without undue risk,
hardshiporembarrassment,eventhoughthelossoriginallyresultedfromanactor
omissionforwhichNPIorWhitneyislegallyresponsible.Initsspecialverdictform
thejuryidentified$7,687.40asthedollaramountoflosstoRyanFriesenduetothe
diesel spill on the Ryan Friesen property thatRyan Friesen reasonablycouldhave
avoided.ThejurymadenootherfindingsonthesubjectofFriesensliability.Its
findingthathecouldhaveavoidedsomeconsequencesofthespilldidnotresolvehis
liabilityasanownerfortheremainderoftheharmthespillcausedliabilitywhich,
absenttherequiredfindings,wasjointandseveralstrictliabilityregardlessoffault.
Areviewofthetrialproceedingsshowsthatthepartiesdidnotintendthe
jurytousetheavoidableconsequencesinstructiontoapportiontoFriesenaseveral
shareofharm.Frieseninitiallytookthepositionthatthejuryshouldnotbeaskedto
apportiondamages;NPIscounsel,ontheotherhand,suggestedthatthecourtcouldbe
helpfullyinformedbythejurysinputonapportionmentwithoutfeelingboundbyit.
Butthepartiespositionsevolvedoverseveraldays,astheircounseldebatedwhetherthe
juryshouldhaveanyinput into theapportionmentofdamagesand,ifnot,whether it
shouldbeinformedofthecourtsroleinapportioningdamagesaftertrial.Friesenasked
34(...continued)
touseduecaretoavoiditafterthecommissionofthetort,frequentlyrequiressuch
apportionment,andismerelyanapplicationoftherulestatedhere.).
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thatthejurybeinstructed,Youwillbeaskedtodeterminethetotalamountofdamages
totheproperty;thecourtwillalsodecide...howmuchdamagestoassigntoeach
party.NPIobjected,arguingthatsuchaninstructionwouldconfusethejury,castdoubt
onitswork,andpromptittospeculateaboutwhatthecourtwoulddo.Thecourtdecided
nottoinformthejuryaboutthepossiblepost-verdictprocess.
AttheendofNPIscaseFriesenmovedforadirectedverdictonwhether
harm could be apportioned, on grounds that NPI had failed to prove the factual
prerequisites. Thecourtsuggested,asithadbefore,thatthejurybeaskedtodecidethe
issue,towhichFriesenscounselrespondedthatNPIhasntproducedanyevidence
regardingdivisib[ility].Soitsnotaquestionthatcangotothejury.Thecourtdenied
themotion,explainingthatitwasstillunclearwhethertheissuewouldbesubmittedto
thejuryinasecondtrialphaseordecidedpost-trialbythecourt.Thecourtaskedfor
briefingontheissue,butitdoesnotappearthepartiessubmittedanybeforethecloseof
trial.
Still,itisclearfromtherecordthatbothpartiesultimatelyunderstoodthe
jurywasnotbeingaskedtoapportiondamages.Friesenscounseltoldthejuryinhis
closingargumentthatitwasbeingaskedtodeterminethetotalamountofdamagecaused
tohisclientspropertybutnottodoanykindofallocationoffault...Idontwantyou
togobacktothejuryroomandsay,...wethinkperhapsNPIisonly30percent
at...fault;and,therefore,30percentofthetotaldamagesweregoingtowriteinhere.
Thatsnothowyoudoit. Beforethecourtsentthejuryouttodeliberate,andreferring
specifically to [subsection] (i) of the State CERCLA statute [the apportionment
provision],whetherthat becomes a juryquestionor not, the courtasked thepartieswhethertheynowwereinagreementthatapportionmentwasaquestiontotakeuponly
aftertheverdict.NPIagreedthatitwas.Friesenarguedthatthejuryshouldatleastbe
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allowedtoallocatedamagesasbetweenFriesenandWhitney,butthecourtexplicitly
disagreed.
Finally,afterthejuryreturneditsverdictandthejurorswerepolled,the
courtaskedthepartieswhethertheyneed[ed]thecourttodoanyfurtherinquiryon
damagesorapportionmentoranything;thejurycango?towhichcounselforboth
partiesansweredintheaffirmative.
Insum,thoughpositionsshiftedduringtrial,itisclearthatneitherparty
ultimatelyexpectedthatthejurywoulddecidehowdamageswouldbeapportionedfor
purposes of subsection .822(i), notwithstanding the avoidable consequences
instruction,andneitherpartyaskedthatthejurymakefactualfindingsthatcouldsatisfy
theprerequisitesofthatsubsection.Weconclude,therefore,thatthejurysfindingof
avoidableconsequencesastosomedamageswasnot,andwasnotintendedtobe,an
apportionmentofdamagesforpurposesofsubsection.822(i).BydecidingthatFriesen
couldhaveavoidedcertaindamageswithreasonableeffort,thejurywasnotdeciding
thathewasnotjointlyandseverallyliablefortherest.
2. Thesuperiorcourtproperlyorderedcontributionpursuantto
AS46.03.822(j).
Following trial, NPI filed a motion for contribution and equitable
allocationunderAS46.03.822(j).Thesuperiorcourtgrantedthemotionandproperly
recastthedirectclaimasaclaimforcontribution.35Itconductedananalysispursuant
tosubsection.822(j),inwhichitequitablyallocatedtheentire$38,437inremediation
damagesamongWhitney,Friesen,andNPI.Itproperlyreliedonthejurysfindingthat
Friesencouldhaveavoidedsomeofhisdamagestoholdthathewasanon-innocent
[potentiallyresponsibleparty]whocouldnotavailhimselfofaninnocentlandowner
See Laidlaw Transit,21P.3dat350.
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defense. AndthecourtwasactingwithinitsauthorityunderAlaskalawwhenitmade
equitablefindingsinthecontributionphaseindependentofthejuryfindingstosupport
itsallocationofdamages. 36
Thecourtappliedthesamecontributionanalysisto thejurysawardof
$14,990 (reducedon remittitur to $10,787) forexpensesRyanFriesen reasonably
incurredinanefforttoavoidorreduceotherlosseshereasonablybelievedwerecaused
byNPIs1995PetersonChipperonhislanddamagesFriesenlabelsasmitigation
damages.Hearguesthat[i]nterpretingAS46.03.822(j)toallowcontributionfor
mitigationisanabsurdresult. Buthedoesnotexplainhowsection .822couldbe
interpreted in any other way, or why mitigation expenses should be treated any
differentlythananyotherrecoverabledamagesforpurposesofcontribution.
Strictliabilityundersubsection.822(a)wastheonlycauseofactionthat
wenttothejury.ThepartiesapparentlyagreedthatamongthedamagesFriesencould
askthejurytoawardundersubsection.822(a)werethemitigationexpensesheincurred
inmovingthechipperfromhisland.Thecourtsoinstructedthejury,themitigation
expenseswereawardedunderthatcategoryonthespecialverdictform,andthereisno
argumentonappealthattheremovalcostswere notrecoverableasdamagesunder
subsection.822(a).37Thedamagesandcoststhatmaybeallocatedundersubsection
36 See Vinson v. Hamilton,854P.2d733,736(Alaska1993)(InAlaska,the
righttoajuryincivilcasesispreservedtothesameextentasitexistedatcommonlaw,
insuitswhere the amount incontroversy ismore than$250. Ifa party seeksonly
equitablerelief,thenthereisnorighttoajurytrial.(quotingAlaskaConst.art.I,16)).
37
Under the statutes broaddefinitions, damages include damages topersons,AS46.03.822(m)(1),andincludebut are not limited to injurytoorlossof
personsorproperty,realorpersonal,lossofincome,lossofthemeansofproducing
income,orthelossofaneconomicbenefit. AS46.03.824(emphasis added). We
observedinKodiak Island Borough v. Exxon Corp.,991P.2d757,764(Alaska1999),
(continued...)
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.822(j)arenotdefinedanydifferentlythantheyareinsubsection.822(a).Weseeno
errorinthecourtsanalysis. 38
B. TheSuperiorCourtDidNotAbuseItsDiscretionByExcludingThe
EnvironmentalReportRegardingNPIsPortMacKenzieProperty.
ThesuperiorcourtgrantedNPIsmotiontoexcludeaconsultantsreport
ontheenvironmentalconditionofNPIspropertyatPortMacKenzie,threeyearsafter
thedieselspillatissuehere,concludingthatthereportwasinadmissibleRule404
evidenceandwouldresultinconfusiontothejury.AlaskaEvidenceRule404governs
theadmissibilityofpropensityevidence;39itprovidesthat[e]videnceofother...acts
isnotadmissibleifthesolepurposeforofferingtheevidenceistoprovethecharacter
ofapersoninordertoshowthatthepersonactedinconformitytherewith. 40Propensity
evidencemaybeadmitted,however,ifitisofferedforaproperpurpose,including,but
37(...continued)
that[n]othinginthewordingorlegislativehistoryofthehazardoussubstancesstatuteshintsthatsubsection.822(a)smorerecentlyaddedexamplesofcompensableharms
weremeanttoexcludeotherclaimsfordifferentspill-relatedharmsortoconstrictthe
universeoffuturerecoveryformunicipalitiesor for any other prospective claimants.
(Emphasisadded.)
38 Friesendoesnotchallengethefindingsthatformthefactualbasisforthe
superiorcourtsallocationofdamagesortheequitablefactorsthatitchosetoapply.
39 Inthiscontext,thephrasepropensityevidenceislegalshorthand;it
means: evidenceofapersonsotherbadactswhose sole relevance is toprove thepersons character, so that the personscharactercan thenbe used as circumstantial
evidencethatthepersonactedtruetocharacterduringtheepisodebeinglitigated.
Bingaman v. State,76P.3d398,403(AlaskaApp.2003).
40 AlaskaR.Evid.404(b)(1).
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not limited to, proof of motive, opportunity, intent, preparation, plan, knowledge,
identity,orabsenceofmistakeoraccident. 41
OaklyEnterprisesarguesthattheenvironmentalreportwasadmissible
underAlaskaEvidenceRules404and406toshowthatthespillfromthePeterson
chipperwasduetoNPIscorporateculture[which]allowedforpollutingandwas
thereforenottheresultofamistakeoranaccident.Werejectthisargument. The
proposed use of the evidence can only reasonably be characterized as to show a
propensity i.e., because NPI was responsible for pollution found at a different
location,itmustberesponsibleforthepollutiononFriesensandOaklyEnterprises
propertythreeyearsearlier.42 Thesuperiorcourtsdecisiontoexcludethereportunder
EvidenceRule404wasnotanabuseofdiscretion.
Norwas the reportadmissible under EvidenceRule406,which allows
evidenceofapersonshabitoranorganizationsroutinepracticetoprovethatthe
conductorthepersonororganizationonaparticularoccasionwasinconformitywith
thehabitorroutinepractice.Tobeadmissible,evidenceofhabitorroutinepractice
mustdemonstrate,attheveryleast,aregularpracticeofmeetingaparticularkindof
situation with a specific type of conduct.43 A habit is one that occurs with such
41 Conley v. Alaska Commcns Sys. Holdings, Inc.,323P.3d1131,1136
(Alaska2014)(quotingAlaskaR.Evid.404(b)(1))(emphasisomitted).
42 See Wickwire v. Arctic Circle Air Servs.,722P.2d930,934(Alaska1986)
([E]vidence of negligence in inspecting one plane is not admissible as proof of
negligenceininspectinganotherplane.);Am. Natl Watermattress Corp. v. Manville,
642P.2d1330,1336(Alaska1982)(holdingthatitwaserrortoallowtestimonyinnegligenceactionagainstwaterbedmanufacturerwhenitconcernedthemanufacturers
post-accidentconductinnotrecallingtheproductorissuingwarning).
43 Commentary,AlaskaR.Evid.406,firstparagraph(quotingM CCORMICK
(continued...)
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frequencyastobecomenearlyreflexiveandautomatic. 44Thisviewalignswithapolicy
ofcautioninadmittingevidenceofapatternofconductashabit,outofconcernthatthe
ruleadmittinghabitevidencewillswallowtheruleexcludingcharacterevidence.45 As
appliedtothiscase,itwouldbeunreasonabletoconcludethatareportofenvironmental
contaminationthreeyearsafterthedieselspillatissueshowsNPIsregularpracticeof
meetingaparticularkindofsituationwithaspecifictypeofconduct.Thesuperior
courtdidnotabuseitsdiscretionwhenitheldtheevidenceinadmissibleunderRule406.
Finally,evidenceadmissibleunderotherrulesmuststillbeexcludedunder
AlaskaEvidenceRule403ifitsprobativevalueisoutweighedbyitsunfairlyprejudicial
effect.46 And Evidence Rule 404(b)(1)s presumption that propensity evidence is
inadmissiblealtersthenormalRule403balancingtestsothatthepartyseekingtopass
the test must show that the evidences use for non-propensity purposes will be
substantialenough tooutweigh thesubstantial riskof prejudice that suchevidence
alwayscarries.47EvidenceofconditionsatNPIsPortMacKenziepropertyhadlittle
relevancetowhetherNPIsPetersonchippercausedpollutiononOaklyEnterprises
property.Thethree-yearspanbetweenthespillandthereportmadeitsconclusionseven
43(...continued)
ON EVIDENCE195,at462(2ded.1972)).
44 See Wacker v. State,171P.3d1164,1169(AlaskaApp.2007).
45 Id. (citingSTEPHENA.SALTZBURGETAL.,2FEDERALRULESOFEVIDENCE
MANUAL406.02(9thed.2006)).
46
See Conley, 323 P.3d at 1136 (noting that if a court determines thatpropensityevidenceisadmissibleforaproperpurposeunderEvidenceRule404(b)(1),
thenEvidenceRule403requiresthecourttoweightheprobativevalueoftheevidence
againstthedangerofunfairprejudice).
47 Id.at1144(Fabe,C.J.,dissenting).
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lessrelevanttotheissuesbeinglitigated.Andthesuperiorcourt,inexcludingthereport,
furthernotedthatitwouldconfusethejury,likelybecauseofitsremotenessfromthe
eventsatissueintermsofbothtimeandgeography.Forallthesereasons,weseeno
abuseofdiscretioninthesuperiorcourtsexclusionofthereport.
C. TheSuperiorCourtDidNot Abuse ItsDiscretion In ItsAwardof
AttorneysFeesAgainstOaklyEnterprises.
Forcasesthatgototrial,prevailingpartieswhodonotrecovermoney
judgments are entitled to fee awards that are 30 percent of their reasonable actual
attorneysfeeswhichwerenecessarilyincurred.48 Thesuperiorcourtdeterminedthat
neitherFriesennorNPIwasaprevailingpartyontheclaimbetweenthem,butthatNPI
hadprevailedoverOaklyEnterprisesandwasentitledtoattorneysfeesof$36,764.63.
ThecourtsstartingpointincalculatingthefeeawardwasNPIsclaimedactualfeesof
$321,812.50.Fromthisamountitsubtracted$76,715,reflectingworkdoneduringthe
contributionphasewhenOaklyEnterpriseswasonlyminimallyinvolved.Thecourt
dividedtheremainder,allocatinghalftoNPIslitigationagainstFriesenandhalftoits
litigationagainstOaklyEnterprises.Ofthehalfofthetotalattributabletothelitigation
againstOaklyEnterprises,thecourtawardedNPI30percentofitasrequiredbyAlaska
CivilRule82(b).
Oakly Enterprises contends that NPIs fees should have been further
reducedbecausetheyweredisproportionatetobothOaklyEnterprisesfees,whichit
claimswereonly$75,000,andtheamountsultimatelyatissue.
Wehaveheldthat[a]nattorneysfeesdecisionshouldnotbedisturbed
unlessitismanifestlyunreasonable.49Thereasonablenessoffeesdependsona
48 AlaskaR.Civ.P.82(b)(2).
49 Alaskan Crude Corp. v. State, Alaska Oil & Gas Conservation Commn,
(continued...)
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numberoffactors,includingwhethertherewasatrial,thecomplexityofthelitigation,
thelengthoftrial,andthereasonablenessoftheattorneyshourlyratesandthenumber
ofhoursexpended.50 Alargediscrepancybetweenthefeesincurredbythewinningand
losingsidescanbesomeevidencethat[theprevailingpartys]feesareunreasonable,
butitisnotconclusiveonthatpointasthereareanumberofotherpossibleexplanations
forsuchadiscrepancy. 51 Forexample,burdensassumedbyoppositesidesoflitigation
arenotnecessarilyequal,anditisa judgmentcallastowhethersuchadiscrepancy
reflectsover-preparationandover-billing. 52Inthiscase,OaklyEnterprisesclaim
againstNPIinvolvedsummaryjudgmentproceedingsandaneight-dayjurytrial. The
trialjudgewaspersonallyawareofthequalityandquantityoftheworkNPIsattorneys
performed. Hercalculationoftheawardincludinga listofreductionsforspecific
entries devoted to post-trial proceedings shows that she carefully reviewed the
itemizedbillingrecordsinsupportofNPIsapplication.Weseenoabuseofdiscretion
inherconclusionthatadiscrepancyinfeesdidnotrequirefurtherreduction. 53
49(...continued)
309P.3d1249,1254(Alaska2013)(quotingMiller v. Matanuska-Susitna Borough,54P.3d285,289(Alaska2002)).
50 Krone v. State, Dept of Health & Soc. Servs.,222P.3d250,253(Alaska
2009)(internalquotationmarksomitted).
51 Gamble v. Northstore Pship,28P.3d286,289-91(Alaska2001).
52 Id.at289-90.
53
OaklyEnterpriseshighlightstheworkonanattorneysfeesmotionasanexampleofwhatitclaimstobeexcessivebillingbyNPIsattorneys. Themotion,
apparentlydraftedepisodicallyoverthecourseofseveralmonths,summarizedthecases
historybeforeaddressingtheprevailingpartyissue,attorneysfeesunderbothAlaska
Civil Rule 68 and Rule 82, and the allocation of fees and costs between Oakly
(continued...)
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OaklyEnterprisescorrectlyobservesthatNPIstotalfeesexceededthe
amountincontroversy.But[w]ehaveneverstatedthatspendingmoreonattorneys
fees than the amount incontroversy isper seunreasonable.54 Friesen and Oakly
Enterprisesallegedintheircomplaintthattheirpropertydamageandcleanupcosts
wouldexceed$150,000,andthesummaryjudgmentmotions,jurytrial,andextensive
post-trialproceedingsprovideanexplanationforwhythecostsoflitigationwerehard
tocontain.Again,theclaimedlackofproportionalitydoesnotcauseustoquestionthe
superiorcourtsexerciseofitsdiscretion. 55
V. CONCLUSION
ThejudgmentofthesuperiorcourtisAFFIRMED.
53
(...continued)EnterprisesandFriesen. Givingduedeferencetothesuperiorcourtscloserviewofthe
attorneys,theirwork,anditssignificanceinthelitigation,weseenoabuseofdiscretion
inthecourtsfailuretoreducethefeesclaimedforthisactivity.
54 Okagawa v. Yaple,234P.3d1278,1282(Alaska2010). Cf. Rhodes v.
Erion,189P.3d1051,1053(Alaska2008)(statingthatwhether[defendant]spentmore
onherdefensethantheamountincontroversyisnotdispositivewhendetermining
whetherattorneysfeesawardshouldbereduced).
55
Friesen includes a challenge to the superior courts prevailing partydeterminationintheappellantsstatementofissuespresentedforreview,butitisnot
addressedinhisargument,andwethereforeconsideritwaived. See Adamson v. Univ.
of Alaska,819P.2d886,889n.3(Alaska1991)([W]hereapointisgivenonlyacursory
statement in the argument portion of a brief, the point will not be considered on
appeal.).
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