Oakly Enterprises, LLC v. NPI, LLC, Alaska (2015)

7/25/2019 Oakly Enterprises, LLC v. NPI, LLC, Alaska (2015)

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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

[email protected].

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]


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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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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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35


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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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Oakly Enterprises, LLC v. NPI, LLC, Alaska (2015)

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