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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
GEOTEKALASKA,INC.,
Appellant,
v.
JACOBSENGINEERINGGROUP,
INC.,andJACOBSFIELDSERVICESNORTHAMERICA,
INC.,
Appellees.
)
) SupremeCourtNo.S-15449
SuperiorCourtNo.3AN-12-05453
OPINION
No.7031-August14,2015
)
) CI
)
)
)
))
)
)
)
)
AppealfromtheSuperiorCourtoftheStateofAlaska,Third
JudicialDistrict,Anchorage,ErinB.Marston,Judge.
Appearances: Michael Jungreis and Jason Hartz, Davis
WrightTremaineLLP,Anchorage,forAppellant.RobertJ.
DicksonandChristopherJ.Slottee,Atkinson,Conway&
Gagnon,Anchorage,forAppellees.
Before:Fabe,ChiefJustice,Winfree,Stowers,Maassen,and
Bolger,Justices.
MAASSEN,Justice.
I. INTRODUCTION
Aninsolventsubcontractorfailedtopayitssub-subcontractorforwork
performed, and the sub-subcontractor sought payment directly from the general
contractor through a demand for arbitration. The general contractor declined to
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participate. Thearbitrator awarded damages to the sub-subcontractor,who filedan
actiontoconfirmtheawardinsuperiorcourt.Thesub-subcontractoralsobroughta
negligenceclaim,contendingthatthegeneralcontractorknewofitssubcontractors
financialinstabilityandnegligentlyfailedtoensurethatthesub-subcontractorwouldbe
paid.Thesuperiorcourtgrantedsummaryjudgmenttothegeneralcontractoronboth
theenforceabilityofthearbitrationawardandtheviabilityofthenegligenceclaim. The
sub-subcontractorappeals.
We affirm, concluding that whether the general contractor effectively
exerciseditscontractualrighttodeclinearbitrationisanissueofarbitrability,correctly
decidedbythesuperiorcourt,andthatthegeneralcontractorhadnoextra-contractual
dutyintorttoguaranteeitssubcontractorspaymentobligations.
II. FACTSANDPROCEEDINGS
A. Facts
JacobsEngineeringGroup,Inc.wasawardedacontractbytheUnited
StatesAirForceforenvironmentalremediation. Whilepreparingtobidontheproject,
JacobsEngineeringGroupanditssubsidiaryJacobsFieldServicesNorthAmerica,Inc.
(collectivelyJacobs)sentoutarequestforproposal(RFP)forsoilsamplingservices
atatankfarmnearNomeandattheNikolskiRadioStationonUmnakIsland.Included
in the RFP was a requirement that the subcontractor have bonding tocoverall its
payment and performance obligations. One of the recipients of Jacobss RFP was
PrecisionSampling, Inc.,doingbusinessasDirectSensing, Inc. (DSI). Ultimately
JacobsawardedthesubcontracttoDSI.DSIenteredintoasecond-tiersubcontractwith
GeoTek Alaska, Inc., to provide the required Ultra-Violet Optical Screening Tool(UVOST)equipment.
DSIsparentcorporationinCanadawasundergoingfinancialdifficulties
atthetimeofthebiddingprocess;thepartiesdisputewhatJacobskneworshouldhave
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knownaboutDSIssituation. TheyalsodisputetheextenttowhichJacobssawardof
the subcontract toDSIwasbecauseof Jacobssdesire to work withGeoTek. It is
undisputed,however,thatDSIwasunabletoobtainthepaymentandperformancebonds
requiredbytheRFPandaskedJacobstowaivetherequirement.Jacobsagreedtomove
forwardwiththeDSIsubcontract,butitdevelopedariskmanagementplanrequiringthat
15percentofJacobsspaymenttoDSIberetainedto assure thepaymentofDSIs
second-tiersubcontractorsandthatthosesecond-tiersubcontractorssubmitreleasesof
claims,certifyingtheyhadbeenpaid.
ShortlybeforeGeoTekdeployedtotheNomeprojectlocation,itlearned
thatJacobshadwaiveditsrequirementthatDSIbebonded.GeoTeknonethelesssigned
itssecond-tiersubcontractwithDSIafewdayslater. Accordingtoitsvicepresidents
affidavit,[a]tthatpointGeoTekwascommitted,andhadnootherworkavailableon
shortnotice;andadditionallywasreassuredbyJacobsspolicyofensuringthatitslower
tiersubcontractorsarepaid.
DSIandGeoTeksatisfactorilycompletedtheNomeproject. Jacobspaid
DSIand DSIsigneda release inSeptember2009,certifying that ithad paid forall
servicesfurnishedinconnectionwiththecontract.Jacobsdidnotretainanyamountsor
require a release from GeoTek, ascontemplated by the riskmanagement plan. In
September2009,DSIandGeoTekattempteddeploymenttoNikolskibutweredelayed
inDutchHarborbecauseofweather. Theprojectwaseventuallyputoffuntil2010but,
forreasonsnotrelevanttothisappeal,DSIandGeoTekneverreachedNikolskiand
neverdidanyworkthere.
DSIdidnotpayGeoTekforitsworkontheNomeprojectorforits2009mobilizationforNikolski.
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B. Proceedings
JacobsscontractwithDSIincludedanarbitrationprovisionthatiscentral
tothisappeal. Theprovisionslanguagewillbedissectedlaterinthisopinion,butin
summaryitgivesJacobstheunilateralrighttoacceptorrejectarbitrationonceademand
hasbeenmade. JacobsdidnothaveacontractwithGeoTek,butJacobsscontractwith
DSIincludedaprovisionthatrequiredDSItoflowdownalltermsandconditionsof
thesubcontractintoanysub-subcontract.TheJacobs-DSIcontractalsohadaprovision
onassignment,whichprovides:
Neither thisSubcontract noranyinterest therein including
anyclaimthereundershallbeassignedortransferredbythe
Subcontractor to another entity, except as expresslyauthorized in writing by the Subcontract Manager. The
Company reserves the exclusive right to assign this
Subcontractandallrightsandinteresttherein.
InademandforarbitrationdatedApril28,2010,GeoTekassertedaclaim
againstJacobsfortheamountsDSIhadfailedtopayit.1 Thedemandwasapparently
forwardedtoJacobsbytheAmericanArbitrationAssociation(AAA).Jacobsresponded
toGeoTeksdemandforarbitrationonMay13,assertinginalettertotheAAAthat
JacobsdoesnothaveacontractwithGeoTekandtherefore,GeoTekhasnobonafide
contract claim against Jacobs and it would be inappropriate for Jacobs to engage
GeoTekinanarbitrationproceeding. JacobsstatedthatitrejectsGeoTeksdemand
forarbitrationandrecommendsthatGeoTekpursueitscontractualrightsandclaims
againstitscustomer,[DSI].
GeoTekproceededalonewitharbitrationundertheaegisoftheAAA. On
January20,2011,DSIandGeoTekexecutedanagreementinwhichtheyassertedthat
GeoTeksarbitrationdemandisnotintherecord,butneitherpartydisputes
thatitwasmade;itsdateisreferencedinJacobssresponse.
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[n]eitherDSI[norGeoTekhas]beenpaidinfullbyJacobsfortheworkdoneonthe
WestNomeorNicolski[sic]ProjectsandDSIassigneditsclaimsagainstJacobsto
GeoTek,retainingarightto30percentofanyamountscollected. OnGeoTeksmotion,
thearbitratorthenruledonthearbitrabilityoftheseclaims,decidingthatbothGeoTeks
originalclaimsagainstJacobsandDSIsassignedclaimswerearbitrable.Thearbitrator
allowedGeoTektoamenditsdemandforarbitrationtoincludebothsetsofclaimsand
gaveJacobs14daystorespondtotheamendeddemand. Therecordshowsnofurther
writtenresponsefromJacobs.
ThearbitratorheldanevidentiaryhearinginAugust2011,whichwas
attendedonlybyrepresentativesofGeoTekandDSI;thearbitratorsfindingsoffactand
conclusionsoflawnotethatJacobswasagaincontactedbutdeclinedtoparticipate. The
arbitratorawardedGeoTek$257,687.62onbehalfofworkdonebyGeoTekAlaskaand
[DSI],withinterestcontinuingtoaccrueat10.5percentperannum.
GeoTek filed a complaint in superior court seeking to confirm the
arbitration award and asserting several other theories of recovery against Jacobs,
includingbreachofcontract,unjustenrichment,quantummeruit,andbreachofthe
covenantofgoodfaithandfairdealing.Jacobsansweredandmovedforsummary
judgment,arguingthatithadnocontractwithGeoTekand,ifitdid,ithadeffectively
exercised itscontractualrighttorefusetoarbitrate. GeoTekfileda cross-motionto
confirmthearbitrationaward.ThesuperiorcourtgrantedJacobsssummaryjudgment
motion,concludingthatJacobstimelyrejectedGeoTeksdemandtoarbitrate...[and
that]Jacobswasnotlegallyobligatedtoparticipateinthearbitration.
Whilethecourtsdecisionofthesemotionswaspending,GeoTekamendeditscomplainttoassertanegligenceclaim. Jacobsmovedforsummaryjudgmentonthat
claimaswell,andthesuperiorcourtgrantedsummaryjudgmentonthegroundthat
JacobsdidnotoweGeoTekadutyofcareintorttoensureitwaspaidbyDSI.
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OnappealGeoTekarguesthatthesuperiorcourterredingrantingJacobss
motionsforsummaryjudgment. GeoTekarguesthat(1)ithadanagreementtoarbitrate
withJacobs,anditwasuptothearbitratortodecidewhetherJacobshadexercisedits
right to reject arbitration; and (2) Jacobs had an actionable duty in tort to protect
GeoTeksfinancialinterests.
III. STANDARDSOFREVIEW
Asuperiorcourtsdecisionreviewinganarbitrationawardissubjectto
denovoreview.2 Whether[a]claimisarbitrableisaquestionoflawsubjecttode
novoreview.3Theexistenceandextentofadutyofcarealsopresentsaquestionof
law,whichwereviewdenovo.4
IV. DISCUSSION
A. TheSuperiorCourtDidNotErrInGrantingSummaryJudgmentTo
JacobsOnTheArbitrabilityIssue.
ThesuperiorcourtcorrectlydecidedthatwhetherJacobshadagreedto
arbitratethisdisputewasaquestionforthecourtratherthanthearbitrator.Thesuperior
courtthenreliedonthespecificlanguageofthearbitrationprovisionatissuetoconclude,
againcorrectly,thatJacobsdidnotagreetoarbitratethisdisputeandthat theawardthereforecouldnotbeconfirmed.
2 Johnson v. Aleut Corp.,307P.3d942,947(Alaska2013).
3 Lexington Mktg. Grp., Inc. v. Goldbelt Eagle, LLC,157P.3d470,472
(Alaska2007).
4 Hurn v. Greenway,293P.3d480,483(Alaska2013).
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Forpurposesofargumentweassume,asthesuperiorcourtapparentlydid, 5
thatthearbitrationprovisionintheJacobsscontractwithDSIfloweddownandby
flowingdowngovernedtherelationshipbetweenJacobsandGeoTekaswell.
1. WhetherJacobsagreedtoarbitratethedisputewasaquestionforthecourt,notthearbitrator.
6TheFederalArbitrationAct andAlaskasUniformandRevisedUniform
7 8ArbitrationActs allreflectastrongpolicyinfavorofthearbitrationofdisputes. Like
federal law, Alaskas statutes provide that [a]n arbitrator shall decide whether a
conditionprecedenttoarbitrabilityhasbeenfulfilled. 9Alaskasstatutesalsoprovide,
however,that[t]hecourtshalldecidewhetheranagreementto arbitrateexistsora
5 Atoral argumenton Jacobss first motion for summary judgment, the
superiorcourtaskedcounselforJacobswhetheritwasJacobsspositionthatevenif
therewasaflow-down,aforcibleflow-downprovision,...thatitdoesntreallymatter,
becausewithin30daystheyhavethesolerighttoacceptorreject[,][a]nd,inthiscase,
theyunequivocallyrejectedthearbitration.ThecourtlateraskedcounselforGeoTek
whetheritwashispositionthateveniftherewasanassignmentoraflowdown,thatdoesntchangethetermsofthearbitrationclause...thatJacobswouldstillhavethe
right toarbitrate ornot, at their discretion. Both counsel agreed with the courts
characterizationsoftheirclientspositions.
6 9U.S.C.1etseq.(2012).
7 AS09.43.010 .180 (UniformArbitration Act); AS09.43.300 .595
(RevisedUniformArbitrationAct).
8
Gibson v. Nye Frontier Ford, Inc.,205P.3d1091,1096(Alaska2009).9 AS09.43.330(d);see BG Grp., PLC v. Republic of Argentina,134S.Ct.
1198,1207(2014)(citationsomitted)(explainingthatcourtspresumethattheparties
intendarbitrators,notcourts,todecidedisputesaboutthemeaningandapplicationof
particularproceduralpreconditionsfortheuseofarbitration).
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controversyissubjecttoanagreementtoarbitrate,10mirroringfederallawthatcourts
aretheproperforumtodeterminewhetheradisputeisarbitrable. 11Onereasonforthis
divisionofauthorityis[that][b]ecausearbitratorshavesuchbroaddiscretion,itisoften
problematicforthemtodecidetheirownjurisdiction,foriftheyarewrong,theremay
beessentiallynoreviewbecauseoftheextremedeference[thatacourtwillgive]to
thearbitrator.12
The first question wemust answer in thiscase,therefore, iswhether
Jacobssconsentwasnecessarybeforeaparticulardisputecouldbesubjectto[the]
agreement to arbitrate in which case the issue is one of arbitrability under
AS09.43.330(c),andthequestionofconsentwasforthesuperiorcourttodecide;or,on
theotherhand,whetherJacobssconsentwasaconditionprecedenttoarbitrability
inwhichcasethequestionofconsentwasuptothearbitratorunderAS09.43.330(d).
The United States Supreme Court recently described this dichotomy in terms of
presumptionsthathelpcourtsdeterminepartiesintentifthecontractissilentonthe
matter of who primarily is to decide threshold questions about arbitration.13
According to the Court, parties are presumed to intend that courts will decide
arbitrabilityissuessuchaswhetherthepartiesareboundbyagivenarbitration
clause,orwhetheranarbitrationclauseinaconcededlybindingcontractappliestoa
10 AS09.43.330(c).
11 Lexington Mktg. Grp., Inc. v. Goldbelt Eagle, LLC,157P.3d470,477
(Alaska2007).
12 Classified Emps. Assn v. Matanuska-Susitna Borough Sch. Dist.,204P.3d
347,353(Alaska2009)(quotingFairbanks Fire Fighters Assn, Local 1324 v. City of
Fairbanks,48P.3d1165,1169(Alaska2002))(internalquotationmarksomitted).
13 BG Grp., PLC,134S.Ct.at1206.
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particulartypeofcontroversy.14 Ontheotherhand,partiesarepresumedtointendthat
arbitratorswilldecidedisputesaboutparticularproceduralpreconditionsfortheuseof
arbitration,whichmayincludewhetherprerequisitessuchastimelimits,notice,laches,
estoppel, and other conditions precedent to an obligation to arbitrate have been
satisfied.15
Werecognizethatsomeconditionsprecedentcanreadilyberecharacterized
asquestionsofarbitrability;apartycouldargue,forexample,thatithasagreedto
arbitrateonlythosedisputesthataresubmittedtoarbitrationbyacertaintime,orona
certainform,oratacertainaddressraisingissuesofarbitrabilitythatclearlyhinge
on the determination of what are actually procedural preconditions. For a cogent
explanationofhow todifferentiatethetwo,Jacobsdirectsus toRockland County v.
Primiano Construction Co.16 In that case the Court of Appeals of New York,
recognizingthat[w]hethertheparticularrequirementfallswithinthejurisdictionofthe
courtsorofthearbitratorscouldbereducedtoagameofsemantics,explainedthatthe
realdifferencedependson[therequirements]substanceandthefunctionitisproperly
perceivedasplayingwhetheritisinessenceaprerequisitetoentryintothearbitration
processoraproceduralprescriptionforthemanagementofthatprocess.17Thecourt
notedthattheparties,bycontract,mayhaveerectedaprerequisitetothesubmissionof
anydisputetoarbitration,ineffectapreconditiontoaccesstothearbitralforum,and
14 Id. (quotingHowsam v. Dean Witter Reynolds, Inc., 537 U.S. 79, 84
(2002)).
15 Id.at1206-07(internalfootnotes,citations,andinternalquotationmarksomitted).
16 409N.E.2d951(N.Y.1980).
17 Id.at954.
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that[i]nsucheventthereluctantpartymaybeforcedtoarbitrationonlyifthecourt
determinesthatthisportionoftheagreementhasbeencompliedwith. 18Itcitedanother
casewithparallelstothisone:Opan Realty Corp. v. Pedrone,inwhichapartnership
agreementstipulatedthatanydisputewouldbedecidedbytheAmericanArbitration
Associationbutthatadisputeshallnotbedeterminedtoexistthereunderuntilthe
matterisfirstsubmittedfordeterminationtothepartnership,whichcouldresolvethe
matterbyan80percentvote.19 ThecourtinOpan Realty heldthatwhetherthiscondition
hadbeenfulfilledwasaquestionatleastinitiallyforthecourt,notthearbitrator. 20
AndthecourtinRockland Countyconcluded: Beyondthatitistoberememberedthat
inasmuchastheentirearbitrationprocessisacreatureofcontract,thepartiesbyexplicit
provisionoftheiragreementhavetheabilitytoplaceanyparticularrequirementinone
categoryortheother. 21
TheUnitedStatesSupremeCourtundertookasimilaranalysisinHowsam
v. Dean Witter Reynolds, Inc., in which it categorized all threshold questions as
gatewayquestionsthatcanbesortedintoquestionsofarbitrabilitydecidedbythecourt
andproceduralquestionsdecidedbythearbitrator.22 LikethecourtinRockland County,
theSupremeCourtrecognizedthatthesemanticdifficultyindrawingtheboundary
betweenthetwotypesofgatewayquestionsisbestresolvedbydeterminingwhetherthe
18 Id.(footnoteomitted).
19 335N.E.2d854,855(N.Y.1975).
20 Id.
21 409N.E.2dat955. Notably,theNew YorkCourtofAppealsusedan
earlierformulationoftherelevantdichotomy,inwhichquestionsofarbitrability,rather
thanproceduralpreconditions,weretermedconditionsprecedent. Id.at954-55.
22 537U.S.79,83-85(2002).
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particularquestionatissueisofatypethatthepartieswouldlikelyexpecttobedecided
byanarbitratororajudge:
TheCourthasfoundthephrase[questionofarbitrability]
applicable in the kind of narrow circumstance where
contractingpartieswouldlikelyhaveexpectedacourttohave
decidedthegatewaymatter,wheretheyarenotlikelytohave
thoughtthattheyhadagreedthatanarbitratorwoulddoso,
and,consequently,wherereferenceofthegatewaydisputeto
the court avoids the risk of forcing parties to arbitrate a
matterthattheymaywellnothaveagreedtoarbitrate.
....
At the same time the Court has found the phrase
questionofarbitrabilitynotapplicableinotherkindsofgeneralcircumstancewherethepartieswouldlikelyexpect
thatanarbitratorwoulddecidethegatewaymatter. Thus
proceduralquestionswhichgrowoutofthedisputeand
bearon its final disposition arepresumptivelynotforthe[ ]judge,butforanarbitrator,todecide.23
Withinthisgeneralframeworkweseektodeterminewhatthepartiestothe
Jacobs-DSIcontractcouldreasonablyhaveexpectedfromthespecificlanguagethey
usedtodescribethearbitrationoption.Weresolveambiguitiesinfavorofarbitrability
where such construction is not obviously contrary to the parties intent.24 But
[b]ecausearbitrationisacreatureofcontract,partiescanonlybecompelledtoarbitrate
amatterwhentheyhaveagreedtodoso.25Accordingly,ifadisputeisnot,undera
plausible interpretation,coveredunderthearbitrationclauseofa[n] ...agreement,it
23 Id.at83-84(emphasisinoriginal)(internalfootnotesandcitationsomitted).
24 Lexington Mktg. Grp., Inc. v. Goldbelt Eagle, LLC,157P.3d470,476
(Alaska2007)(quotingUniv. of Alaska v. Modern Constr., Inc.,522P.2d1132,1138
(Alaska1974)).
25 Id.at477.
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shouldnotbearbitratedbecauseapartycannotberequiredtosubmittoarbitrationany
disputewhichhehadnotagreedsotosubmit. 26Wearethereforerequiredtovacate
anarbitrationawardifwefindthattherewasnotanagreementtoarbitrate. 27
TheDisputesonClaimssectionoftheJacobs-DSIcontractbeginswith
thesubcontractorsagreementtofirstsubmitanyclaimordisputearisingunder,related
toor inconnectionwith theWork, thisSubcontract,or theProject, toCompany in
writingpriortoinitiatinganylegalorotherdisputeprocedure.Afewparagraphslater
thearbitrationprovisionreads,inrelevantpart:
All claims, disputes and other matters in question
betweenSubcontractorandCompanyarisingoutoforrelated
totheWork,thisSubcontractortheProject...shall, at thesole option of the Company,bedecidedbyarbitration.In the
event the Company elects to have the matter resolved through
arbitration,then atCompanysdirection,Subcontractorshall
submitthemattertotheAmericanArbitrationAssociationfor
processing under the appropriate Industry Rules of the
AmericanArbitrationAssociationthenineffect.Ifaclaim
is made, or a demand for arbitration is filed, by
Subcontractor,Company will adviseSubcontractorwithin
thirty30days[sic]afterthereceiptofsuchademandfor
arbitration...,if Company exercises the option to arbitrate
or rejects arbitration; such election, once made, shall be[ ]binding. 28
Weconcludethatthisprovisionisunambiguous.TheonlyclaimsJacobshasagreedto
arbitrateare those itelects,on acase-by-casebasis, tohavedecidedby arbitration.
26 Classified Emps. Assn v. Matanuska-Susitna Borough Sch. Dist.,204P.3d
347,353(Alaska2009)(quotingAT & T Techs., Inc. v. Commcns Workers of Am.,475U.S.643,648(1986)).
27 AS09.43.500(a)(5).
28 Emphasisadded.
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ArbitrationofanyclaimwilloccuratJacobsssoleoption,whichJacobswillexercise
within30daysofreceivingademand.Jacobsselection,oncemade,isbinding.And
it isonly [i]n the event [that] [Jacobs]elects tohave the matter resolved through
arbitration that the matter will then be referred to the American Arbitration
AssociationforprocessingundertheAAArules.
Jacobssconsenttoarbitrateanyparticulardisputeisnotamereprocedural
preconditionto arbitrability, such as time limits, notice, laches, estoppel, andother
conditionsprecedenttoanobligationtoarbitrate.29Jacobsagreedtoarbitratealimited
categoryofdisputes:thoseitidentified,onacase-by-casebasis,asdisputesitwas
willingtosubmittoarbitration. TheissueofJacobssconsentthereforepresenteda
questionofarbitrabilitywhether[the]controversyissubjectto[the]agreementto
arbitrateandwasproperlyforthecourttodecide. 30
2. ThesuperiorcourtcorrectlyheldthatJacobsdidnotagreeto
arbitrateGeoTeksclaim.
GeoTekapparentlydemandedarbitrationonApril28,2010.31Although
it is not apparentfromtherecordwhenJacobs receivedGeoTeks demand,Jacobs
respondedon May 13,2010,wellwithin 30days of the demandsdate. Jacobss
response was unequivocal: Jacobs rejects Geo Teks demand for arbitration and
recommendsthatGeoTekpursueit[s]contractualrightsandclaimsagainstitscustomer,
[DSI]. Jacobssresponsecouldnotreasonablyhavebeenmisunderstood.Itsclearand
29 See BG Grp., PLC v. Republic of Argentina,134S.Ct.1198,1207(2014)
(internalquotationmarksandcitationomitted).
30 AS09.43.330(c).
31 Asnotedabove,JacobssresponsetotheAmericanArbitrationAssociation
referencedtheAssociationsMay5,2010letterandGeoTeksApril28,2010demand.
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unequivocaldecision nottoarbitratewas,accordingtothecontract,bindingonthe
parties.
3. GeoTeksargumentsareunpersuasive.
GeoTekcontendsthattherequirementofJacobssconsenttoarbitrationis
notadeterminantofarbitrabilitybutratheraconditionprecedenttoarbitration,likethe
others time limits, notice, laches, and estoppel that courts have left for the
arbitratorsdetermination. GeoTekalsoassertsthatthesuperiorcourtfailedtoengage
in the limited arbitrability inquiry allowed under Alaska law because the courts
decisionwasnotlimitedtowhetherthepartieshadanarbitrationagreementorwhether
itcoveredthepartiesdispute.GeoTekarguesthatJacobssletter[rejectingarbitration]
didnotabsolveitofanyobligationtoparticipateinthearbitrationbecauseitwas
necessaryforJacobs toparticipatein thearbitrationto theextentitobjectedto the
arbitrators exercise of jurisdiction. Finally, GeoTek argues that even if Jacobss
rejectionpresentedanissueofarbitrability,thesuperiorcourtshouldnothaveaddressed
itbecausethepartieshadexplicitlydelegatedarbitrabilitydeterminationstothearbitrator
throughtheirincorporationoftheAAAIndustryRules.
Asexplainedabove,discerningthepartiesintentisourparamountconcern
whenwearedecidingwhetherconsenttoarbitrationpresentsaquestionofarbitrability
oraproceduralconditionprecedent.32 Wehaverepeatedlyrecognizedthat[b]ecause
arbitrationisamatterofcontract,partiescanonlybecompelledtoarbitrateamatter
wheretheyhaveagreedtodoso.33Thus,iftherearetermsinacontractthateither
excludearbitrationorindicatethatanissueshouldnotbesubjecttoarbitration,then
32 Lexington Mktg. Grp., Inc. v. Goldbelt Eagle, LLC,157P.3d470,478
(Alaska2007)(providingforarbitrationwhenitisconsistentwiththepartiesintent).
33 Id.at477.
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requiringthatthematterbesenttoarbitrationwouldbeinappropriate.34 Inthiscasewe
areconvinced that the plain languageof thearbitration provisiondemonstrates the
parties intent that Jacobs decide unilaterally whether any given dispute will be
arbitrated;thatis,adisputesarbitrabilityisdeterminedbywhetherJacobsagreesto
arbitrateit.Werespectthepartieschoiceoflanguage.ToadoptGeoTeksposition
insteadwouldbetoholdthatapartythathasbargainedforthecontractualrighttoavoid
arbitrationatitssoleoptionmustinfactarbitrateinordertovindicatethatrightwith
noprospectofdenovojudicialreview.
GeoTek also argues that the parties arbitration provision expressly
providesthatdisputesshallberesolvedaccordingtotheappropriateIndustryRulesof
theAmericanArbitrationAssociationandthattheserulesgivethearbitratorthepower
toruleon his orher ownjurisdiction, including any objections with respect tothe
existence,scope,orvalidityofthearbitrationagreement. 35 Weneednotdecidewhat
theAAAIndustryRuleswouldrequireinthiscase,becausewedisagreewithGeoTeks
assertionthattheygoverntheprocedurethepartieshaveadoptedfortheinitiationof
arbitration.
Thepresumptionthatarbitrabilityisaquestionforthecourtscanonlybe
rebuttedifthepartieshave clearlyandunmistakablyprovide[d]otherwise.36 The
arbitrationprovisionatissuehereplainlystatesthatamattershallbesubmittedtothe
AmericanArbitrationAssociationforprocessingundertheappropriateIndustryRules
34 Classified Emps. Assn v. Matanuska-Susitna Borough Sch. Dist.,204P.3d
347,353(Alaska2009).
35 See Am.ArbitrationAssn,Comm.ArbitrationRule7(a)(2013).
36 State v. Pub. Safety Emps. Assn,798P.2d1281,1285(Alaska1990)
(quotingAT & T Techs., Inc. v. Commcns Workers of Am.,475U.S.643,649(1986)).
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oftheAmericanArbitrationAssociationthenineffectonly[ i]n the event [Jacobs]
elects to have the matter resolved through arbitration;ifJacobssoelects,thenthe
matterwillbesubmittedtotheAAAat[Jacobss]direction.37Underthecontracts
explicitlanguage,theAAArulescomeintoplayonlyafterJacobshasagreedtosubmit
aclaimtoarbitrationwhichinthiscaseitrefusedtodo. 38 Thepartiesdidnotclearly
andunmistakablyprovidethatthearbitratordeterminequestionsofarbitrability,but
rathertheopposite. 39
B. TheSuperiorCourtDidNotErrInGrantingSummaryJudgmentTo
JacobsOnGeoTeksNegligenceClaims.
GeoTekalsoappealsfromthesuperiorcourtsgrantofsummaryjudgment
toJacobsonGeoTeksnegligenceclaims.GeoTekallegedinitsamendedcomplaintthat
JacobswasresponsibleforDSIspaymentstoGeoTekbecauseofJacobssnegligent
failure (1) torequireDSI to post a performance bond toensure the paymentof its
subcontractors,asrequiredbyJacobssformcontract;(2)tofollowtheprovisionsofits
proposedriskmanagementplanregardinga15percent retainageand signedreleases
fromDSIssecond-tiersubcontractors;and(3)toinformGeoTekthatithadnottaken
thesesteps.Thesuperiorcourtfoundnosupportinthecontract,instatutes,orinthe
37 Emphasisadded.
38 See Opan Realty Corp. v. Pedrone,335N.E.2d854,855(N.Y.1975)
(holdingthatwherepartnershipagreementstatedthatanydisputewouldbedecidedby
theAmericanArbitrationAssociationbutmustfirstbesubmittedtothepartnershipfor
consideration,whetherthispreconditionhadbeensatisfiedwasamatterforthecourt).39 We necessarily reject GeoTeks additional argument that the claims
assignedtoitbyDSIwereseparatelyarbitrable.ArbitrabilitydependedonJacobss
electiontoarbitrate,whichitnevermadewithregardtoanyoftheclaimsatissue,
whetherdirectorassigned.
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commonlawfortheimpositionofanegligencedutyonJacobs. Weconcludethatthe
superiorcourtdidnoterr.
1. ThesuperiorcourtcorrectlyheldthatJacobsdidnothavean
extra-contractualdutytoprotectGeoTekagainsttheriskof
nonpaymentbyDSI.
Todeterminewhetheradefendantowesaplaintiffadutyofreasonable
care,wefirstdeterminewhetheradutyisimposedbystatute,regulation,contract,
undertaking,thepartiespreexistingrelationship,orexistingcaselaw.40Ifthese
sources do not resolve the issue, we apply the multi-factor approach discussed in
D.S.W....todeterminewhetheranactionabledutyexists. 41Theso-calledD.S.W.
factorsaresevenpublicpolicyconsiderationsweusetodeterminewhetherweshould
recognizeanegligencedutynototherwisedefinedbylaw.42
40 McGrew v. State, Dept of Health & Soc. Servs., Div. of Family & Youth
Servs.,106P.3d319,322(Alaska2005)(footnoteomitted).
41 Id.(citingD.S.W. v. Fairbanks N. Star Borough Sch. Dist.,628P.2d554,
555(Alaska1981)).
42 TheD.S.W.factorsare:
The foreseeability of harm to the plaintiff, the degree of
certaintythattheplaintiffsufferedinjury,theclosenessofthe
connectionbetweenthedefendantsconductandtheinjury
suffered, the moral blame attached to the defendants
conduct,thepolicyofpreventingfutureharm,theextentof
the burden to the defendant and consequences to the
communityofimposingadutytoexercisecarewithresultingliabilityforbreach,andtheavailability,costandprevalence
ofinsurancefortheriskinvolved.
D.S.W.,628P.2dat555(quotingPeter W. v. San Francisco Unified Sch. Dist.,131Cal.
Rptr.854,859-60(Cal.App.1976)).
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Foritsimpositionofadutyinthiscase,GeoTekreliesonMattingly v.
Sheldon Jackson College.43InMattingly weheldthatadefendantowesadutyofcare
totakereasonablemeasurestoavoidtheriskofcausingeconomicdamages,asidefrom
physicalinjury[orpropertydamage],toparticularplaintiffsorplaintiffscomprisingan
identifiableclass[ofpersonswho]defendantknowsorhasreasontoknowarelikelyto
suffer such damages from its conduct.44 GeoTek contends that [i]n accord with
Mattingly,...JacobssawarenessofGeoTekcombinedwithitsknowledgethatGeoTek
couldsuffer[the]economicharmofnotbeingpaidbyDSIiswhatgaverisetoaduty.
ButGeoTekmisinterpretsourholdinginMattingly. Mattingly didnot
createanewdutyintort,letaloneonesobroadastoprovideanegligencecauseof
action for any foreseeable economic harm caused by anothers lack of due care.
Mattingly simply expanded liability in tort to include purely economic losses; this
marked asignificantdeparturefrom thelong-standingvirtuallyper se rulebarring
recoveryforeconomiclossunlessthenegligentconductalsocausedphysicalharm.45
AfterMattingly wehaveneverheldthatforeseeableeconomicharmtoan
identifiableplaintiffisallthatisrequiredtoestablishadutyofcare. 46Forexample,in
Mesiar v. HeckmanweconsideredwhethertheAlaskaDepartmentofFishandGame
43 743P.2d356(Alaska1987).
44 Id.at360(quotingPeople Express Airlines, Inc. v. Consol. Rail Corp.,495
A.2d107,116(N.J.1985))(firstalterationinMattingly;secondalterationadded).
45 Id.at359(quotingPeople Express,495A.2dat109).
46
AfederalcourtrecognizedthisinU.S. ex rel. N. Star Terminal & StevedoreCo. v. Nugget Constr., Inc., 445 F. Supp. 2d 1063, 1076 n.42 (D. Alaska 2006)
(Mattingly ...standsforthepropositionthatapartythatisonlyeconomicallyinjured
cannonethelesssuefornegligence,so long as a duty exists.Itdefinestheparametersof
anexistingdutyanddoesnot,asPlaintiffsimply,imposeanewdutywherethere
otherwisewouldbenone.)(emphasisadded).
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couldbeliableonclaimsithadnegligentlymiscountedasalmonrun,therebycausing
unnecessary restrictionson certainYukonRiverfisheriesandeconomicharmto the
plaintiffs.47Todeterminewhetheranactionabledutyofcareexist[ed]weturnedtothe
D.S.W. factors.48InourdiscussionofthefirstD.S.W. factortheforeseeabilityof
harmwecitedMattinglyforthepropositionthatforpurelyeconomicharm,the
identifiableclassofplaintiffsmustbeparticularlyforeseeableinnumber,type,and
economicexpectations.49 WeagreedwiththeplaintiffsthattheDepartmentsclosure
decisionspredictablyandspecificallyharmedusers[includingtheplaintiffs].50 But
notingthatanyfisheries-managementactionthatharmsoneusergroupmayfavorothers,
weconcludedthattheforeseeabilityofharmto[theplaintiffs]isnotadispositive
factorindeterminingtheexistenceofatortdutyandwentontoweightheremaining
D.S.W. factors.51WeultimatelyconcludedthattheDepartmentowednoactionableduty
totheplaintiffsaconclusionwewouldnothavereachedifallthatisrequiredunder
Mattingly foradutytoexististheforeseeabilityofeconomicharmtoanidentifiable
plaintiff.52
47 964P.2d445,448-49(Alaska1998).
48 Id. at450(citingD.S.W. v. Fairbanks N. Star Borough Sch. Dist.,628P.2d
554,555(Alaska1981)).
49 Id.
50 Id.
51
Id.
52 Id. at452;see also Lynden Inc. v. Walker,30P.3d609,614(Alaska2001)
(summarizingMesiar and noting that in that case, [d]espite the foreseeability of
economicinjurytofishermenifdatawasimproperlycollected,wefoundthat[other
D.S.W.]factorsarguedagainstimposingaduty).
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WefollowedthesamecourseinStephens v. State, Department of Revenue,
decidedjustafewmonthsafterMattingly.53AtaxpayersuedtheState,allegingthatthe
Department of Revenue hadnegligently and maliciously attempted to collect on a
judgment for unpaid taxes after the debt had been discharged in bankruptcy.54 To
determine whether the defendant owed the plaintiff a duty of care under the
circumstances,wereviewedtheD.S.W.factors.55Weobservedinitiallythat[i]nnocent
defendantsorthosenotliabletoaplaintiffwillforeseeablysufferharmasadirectresult
ofanegligentlybroughtprosecutionorlawsuit,butagaintheforeseeabilityofeconomic
harmtoanidentifiableplaintiffwasnotsufficienttoestablishaduty: weanalyzedthe
remainingpublicpolicyconsiderationsfromD.S.W. andconcludedthatnodutyexisted.56
Notably,theNewJerseycasewefollowedinMattingly,People Express
Airlines v. Consolidated Rail Corp.,57recognizedthelimitsoflookingtoforeseeability
alonetodeterminewhetheradutyintortexists. Reflectingourownrelianceonpublic
policy concerns as identified inD.S.W., the New Jersey Supreme Court inPeople
Expressobservedthatcourtswillberequiredtodrawuponnotionsoffairness,common
senseandmoralitytofixthelinelimitingliabilityasamatterofpublicpolicy,ratherthan
anuncriticalapplicationofparticularforeseeability.58NewJerseycourtssincePeople
53 746P.2d908(Alaska1987).
54 Id.at909.
55 Id.at910.
56 Id.at911.
57 495A.2d107(N.J.1985).
58 Id.at116.
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Express haveheldthatforeseeabilityaloneisinsufficienttoshowtheexistenceofaduty
inanegligencecaseclaimingeconomicharm. 59
Insum,whilewehavelabeledforeseeabilitythesinglemostimportant
criterionforimposingadutyofcare, 60itisclearthatAlaskascourtsmuststillconsider
thefullpanoplyofD.S.W. factorswhendecidingwhetheranactionabledutyofcare
exists.WerejectGeoTeksargumentthat,underMattingly,Jacobssknowledgeof
DSIsfinancialsituationanditsknowledgethatGeoTekwouldbeharmedifDSIdidnot
pay its subcontractors would be enough, without more, to establish a duty of care
actionableintort.61
59 See, e.g.,Carter Lincoln-Mercury, Inc., Leasing Div. v. EMAR Grp., Inc.,
638A.2d1288,1294(N.J.1994)(Abilitytoforeseeinjurytoapotentialplaintiffdoes
notinitselfestablishtheexistenceofaduty.... Oncetheforeseeabilityofaninjured
party is established, we must decide whether considerations of fairness and policy
warranttheimpositionofaduty.(citationsomitted)).
60 R.E. v. State, 878 P.2d 1341, 1346 (Alaska 1994);see also State v.
Sandsness,72P.3d299,305-06(Alaska2003)(WhilethemostimportantsingleD.S.W.
factorisforeseeability,itisnotdispositive.).
61 GeoTek also contends that, independent of Mattingly, Jacobss
developmentofariskmanagementplanwasavoluntaryundertakingthatextendedits
liabilitybeyondwhatwasotherwiserequiredbylaw,citingGuerrero v. Alaska Hous.
Fin. Corp.,6P.3d250,258(Alaska2000).GeoTekdoesnotdevelopthisargument
further. In Guerrero we reviewed the dismissal of a complaint under the lenient
standardsofAlaskaCivilRule12(b)(6)andheldthattheallegationsofthecomplaintdidnot necessarily rule out the possibility that the defendant landlord had voluntarily
expandedthescopeofitsdutyofcare.Butwenotedthatourrulingontheimpropriety
ofadismissalunderRule12(b)(6)doesnotnecessarilyprecludethesuperiorcourtfrom
decidingdisputedissuesofdutyonsummaryjudgment,id. at 258n.33,ashappened
inthiscase.
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2. GeoTek does not identify other D.S.W. factors that could
supporttherecognitionofadutyinthiscase.
Intheabsenceofanyothersourceofadutyofcare,weweightheseven
D.S.W.factorstodeterminewhetheracommonlawdutyofcareexists.62Hingingits
argumentonforeseeabilityaloneunderMattingly,GeoTekdoesnotaddresstheother
D.S.W. factors.Thesuperiorcourtdidnotaddressthemeither,findingthatthequestion
ofdutywascontrolledbyourdecisioninMunicipality of Anchorage v. Tatco, Inc.63 The
plaintiffs in Tatco had supplied materials to the contractor on a municipal landfill
project.64Whenthecontractorfailedtopay,thesupplierssuedtheMunicipalityforits
failuretorequirethecontractortopostapaymentbondortocertify,beforebeingpaid,
thatithadpaidallitslaborersandsuppliers.65WeheldthattheMunicipalitywasentitled
tosummaryjudgmentbecauseapaymentbondforthebenefitofsubcontractorswasnot
required either by statute66 or by the contract between the Municipality and the
contractor.67 WedonotconsiderTatco controllinginthiscase,however,asthesuppliers
62 See Parnell v. Peak Oilfield Serv. Co.,174P.3d757,767(Alaska2007)
(quotingBolieu v. Sisters of Providence in Wa.,953P.2d1233,1235(Alaska1998))
(internalquotationmarksomitted).
63 774P.2d207(Alaska1989).
64 Id.at208.
65 Id.
66
Wedeterminedthatthecontractatissuewasnotcoveredby theLittleMillerAct,AS36.25.010.025,andspecificallyitsrequirementthatpublicentities
requirepublic-workscontractorstopostbondsforthepaymentoflaborersandsuppliers,
AS36.25.010(a).Id.at211.
67 Id.at210-12.
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in Tatco apparently did not ask the court to decide whether the Municipality had
breachedadutyintortindependentofstatuteandcontract.
BecauseGeoTekdoesnotanalyzetheD.S.W. factorsinitsbriefingbefore
us,weneednotdecidewhethertheyrequireustorecognizeanactionabledutyintort.68
We do note, however, that most factors militate against it. First, as contrasted to
negligence creating a risk of death or physical injury, we have ascribed little
blameworthinesstoordinarynegligencethatmerelycauseseconomic...harm.69This
isparticularlytruewhenpartiesareinapositiontohavecontractedaroundtherisk;
GeoTeksinjurywouldnothaveoccurredabsentitsowndecisiontoenterintoacontract
withDSI,knowing,asitdid,thatDSIhadfailedtosecurebonding.Thepolicyof
preventingfutureharmalsodoesnotrequirerecognitionofanoveldutyintort,asother
contractingpartieshavetheabilitytoprotectthemselveseitherbyrefusingtoenterinto
relationships theyconsiderfinancially fraughtor bynegotiatingformoreprotective
provisionsintheircontractsbeforesigningthem.70 Imposingadutyincaseslikethisone
wouldsubjectcontractorstotheaddedburdenofprotectingthepurelyeconomicinterests
ofpartieswithwhomtheyhavenoprivity; 71itwouldalsoenhancetheirriskofhaving
68 See Glover v. Ranney,314P.3d535,545(Alaska2013)([W]hereapoint
isgivenonlyacursorystatementintheargumentportionofabrief,thepointwillnotbe
consideredonappeal.)(internalquotationmarksomitted).
69 See Mesiar v. Heckman,964P.2d445,451(Alaska1998).
70 See Alaska Pac. Assurance Co. v. Collins,794P.2d936,946(Alaska1990)
(notingthat[p]romisessetforthinacontractmustbeenforcedbyanactiononthat
contract).71 See Imperial Mfg. Ice Cold Coolers, Inc. v. Shannon,101P.3d627,630
(Alaska2004)(explainingthat theLittleMillerActisbasedonthepremisethat the
governmentcannotbechargedbythosewithwhomthegovernmenthasnocontractual
(continued...)
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topaytwiceforthesamelaborormaterials.72Andfinally,GeoTekdoesnotprovide
public-policysupportfromotherjurisdictions;itdoesnotciteanycasesinwhichcourts
imposed an extra-contractual duty on contractors to answer for the debts of their
subcontractorsincircumstanceslikethosepresentedhere.
V. CONCLUSION
ThesuperiorcourtsgrantsofsummaryjudgmentareAFFIRMED.73
71(...continued)
relationship).
72 See id. (holding that the Little Miller Act does not provide a private
negligencecauseofactionagainstagovernmententityforitsfailuretorequireapayment
bondinpartbecauseifthelegislaturehadintendedtoimposegovernmentliability
ineffect...torequirepublicentitiestopaytwiceforapublicprojectthisintentionwouldhavebeenexpressedbecauseitisasignificantvariationfromtheexistingnorm).
73 Becauseweaffirmthesuperiorcourtsjudgment,wenecessarilyreject
GeoTeksargumentthatitshouldbeconsideredtheprevailingpartyforpurposesofan
attorneysfeesaward.
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