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Adams v. City of Tenakee Springs (8/21/98), 963 P 2d 1047

     Notice:  This opinion is subject to correction before publication in
the Pacific Reporter.  Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.


MICHAEL T. ADAMS and          )
BETTYE ADAMS,                 )    Supreme Court Nos. S-8061/8091
             Appellants and   )    Superior Court No.
             Cross-Appellees, )    1JU-94-2161 CI
     v.                       )    O P I N I O N
THE CITY OF TENAKEE SPRINGS,  )    [No. 5026 - August 21, 1998]
ALASKA,                       )
             Appellee and     )
             Cross-Appellant. )

          Appeal from the Superior Court of the State of
Alaska, First Judicial District, Juneau,
                      Larry R. Weeks, Judge.

          Appearances: Robert K. Reges and William G.
Ruddy, Ruddy, Bradley & Kolkhorst, Juneau, for Appellants/Cross-
Appellees.  Paul M. Hoffman, Robertson, Monagle & Eastaugh, P.C.,
Juneau, for Appellee/Cross-Appellant.

          Before: Matthews, Chief Justice, Compton,
Eastaugh, Fabe, and Bryner, Justices.  

          FABE, Justice.

          In 1993 a fire destroyed several buildings in Tenakee
Springs, including the Tenakee Inn.  Michael and Bettye Adams,
owners of the Inn, filed an action against the City, alleging that
the City was negligent in fighting the fire and that its negligence
was the proximate cause of the Inn's destruction.  Following trial,
the jury found that the City was not negligent.  This appeal arises
principally out of the superior court's decision to grant the
City's pre-trial motion to exclude evidence that the City
inadequately staffed its fire department.  We must decide whether
the City was entitled to discretionary function immunity for its
allegedly inadequate staffing of the fire department.  Because we
conclude that staffing is a discretionary matter of resource
allocation, we affirm.
          The City of Tenakee Springs lies on the north shore of
Tenakee Inlet, Chicagof Island.  This rural community has a
population of approximately 100 residents.  The Tenakee Inn, owned
by the Adamses, stood on the waterfront side of the main street in
Tenakee Springs.
          The City established a fire department in 1974.  In 1982
the Tenakee Springs City Council passed an ordinance establishing
a department of public safety.  The ordinance merged law
enforcement, fire protection, emergency medical services, and
search and rescue services into a single department with a Village
Public Safety Officer (VPSO) as its director.  The ordinance also
created the office of the chief of fire services and provided that
the "chief and other fire service officers shall be appointed by
the Director of public safety and confirmed by the city council." 
It further provided that the director should determine the
organization of the department and provide for its staffing. The
ordinance authorized the director to appoint both "regular"
salaried members of the department of public safety and "special"
members, such as volunteer firefighters.
          In the early hours of July 19, 1993, a fire started on
the waterfront in Tenakee Springs.  The fire spread, eventually
destroying the Tenakee Inn.  According to the City, "[i]n less than
two hours, nine buildings were just smoldering ruins."
          The fire began at a cabin adjacent to the Tenakee Inn.
Michael Adams estimated that the Inn was built fifteen to twenty
feet away from the cabin.  An alarm was sounded, and volunteer
firefighters and others responded.  The parties present differing
accounts of what happened next.  The City describes a competent
fire department responding to a "rapidly expanding fire"that
quickly engulfed the Inn in flames.  But according to the Adamses
the fire department was understaffed, ill prepared, and without a
chief, VPSO, or "regular"firefighters.  They claim that this
inadequate department responded to a fire "spotted while it was
confined to a small area,"and that "[a]ctual firefighting fell to
well-meaning, but totally untrained and unprepared citizens."
          The Adamses sued to recover damages for the loss of their
property.  They alleged that the City was negligent in fighting the
fire and that its negligence was the proximate cause of the
destruction of the Tenakee Inn.  The City moved for summary
judgment, asserting discretionary function immunity for its
actions.  Ruling from the bench, Superior Court Judge Larry R.
Weeks granted the motion "[t]o the extent that the motion is a
motion with respect to how much Tenakee Springs spent."  The court
explained that the decision of how much money to allocate to
firefighting was immune from suit.  The court denied the motion,
however, with respect to how the fire was fought, observing that
decisions made "at the fire truck"were not discretionary policy
matters entitled to immunity.
          The City also filed a motion in limine to exclude
"evidence and arguments suggesting that the fire department was
inadequately staffed on July 19, 1993."  This motion is at the
heart of the appeal.  The court granted the motion, reasoning that
it was a "logical extension of the summary judgment motion with
respect to resources."  The Adamses moved for reconsideration. 
Their motion was denied on the ground that the City's resource
allocation decisions were immune from review.
          The case proceeded to trial on the question of the City's
negligence.  At the six-day trial, thirty witnesses testified, and
the Adamses introduced evidence and advanced arguments regarding
the fire department's inadequate training, planning, and
leadership.  At the close of trial, the judge instructed the jury
that the City could not be liable for resource allocation
decisions, but could be liable for negligent conduct:
          The city has the right to make decisions about
how much money it wants to spend on a city service.  However, once
it takes on a responsibility to have a fire fighting service, it
must conduct the operation in a non-negligent manner and it must
conduct the service in the manner required by state law.

          The jury returned a special verdict, finding that the
City was not negligent in fighting the fire.  The jury also found
that the City did not fail to provide regulations for programs or
actual programs "of pre-fire planning surveys, training, and fire
safety and burn prevention education[] for its volunteer
firefighters."  The court then entered judgment for the City.
          The Adamses appeal the exclusion of evidence of
inadequate staffing.  They also appeal the exclusion of a portion
of a witness's testimony and a post-trial decision granting a
directed verdict on the issue of proximate cause. [Fn. 1]  The City
cross-appeals, challenging the standard of care adopted by the
court and the finding that the City's decision about how to fight
the fire was not immune from review.
     A.   The Superior Court Did Not Err by Excluding Evidence that
          the Fire Department Was Inadequately Staffed.
          The Adamses advance several theories in support of their
argument that the superior court erred by granting the City's
motion in limine to exclude evidence or any argument that the fire
department was inadequately staffed the night of the fire.  We
review the superior court's decision to exclude evidence for abuse
of discretion.  See Agostinho v. Fairbanks Clinic Partnership, 821
P.2d 714, 716 n.2 (Alaska 1991).  Abuse of discretion is found
"only 'when we are left with a definite and firm conviction, after
reviewing the whole record, that the trial court erred in its
ruling.'"  Dura Corp. v. Harned, 703 P.2d 396, 409 (Alaska 1985)
(citation omitted). 
          Alaska Statute 09.65.070(d)(2) provides that neither a
municipality nor its agents, officers, or employees are liable for 
failing to exercise a discretionary function. [Fn. 2]  Whether the
superior court erred by excluding evidence of inadequate staffing
therefore depends upon whether the City's staffing decisions were
in fact discretionary.
          We have established that while planning decisions are
considered discretionary and are immune from suit, operational
decisions are not.  See R.E. v. State, 878 P.2d 1341, 1349 (Alaska
1994); [Fn. 3] Adams v. State, 555 P.2d 235, 244 (Alaska 1976)
("The thread common to the many cases on the issue [of
discretionary function immunity] is that the basic policy decision
to undertake an activity is immune, but the execution is not."). 
Planning decisions involve policy formulation.  See State, Dep't of
Transp. & Pub. Facilities v. Sanders, 944 P.2d 453, 456 (Alaska
1997).  Operational decisions are defined as "those that involve
either no room for discretion or involve only discretion free from
policy considerations."  R.E., 878 P.2d at 1349.  Under the
planning/operational test, "liability is the rule and immunity is
the exception."  Sanders, 944 P.2d at 456.
          In considering the discretionary function immunity
doctrine, we find guidance in the policy underlying it.  See id. 
As we observed in Sanders,
          [t]he policy underlying immunity is the
necessity for judicial abstention in certain policy-making areas
that have been committed to other branches of government.  This
policy in turn is based upon notions of separation of powers, and
limitations on this court's ability to reexamine the questioned
decision and the considerations that entered into it.

Id. at 456-57 (quotations and citations omitted).
          1.   Resource allocation
          The Adamses first contend that the City's staffing
decisions merely executed the policy decision to create a municipal
fire department.  Thus, the Adamses argue that the staffing
decisions were not entitled to immunity.  We disagree.
          Staffing a fire department, as the superior court
concluded, is fundamentally a matter of resource allocation.  See
Harry Stoller & Co. v. City of Lowell, 587 N.E.2d 780, 785 (Mass.
1992) (observing that the size of a fire department involves
"policy considerations, especially the allocation of financial
resources").  Decisions about how to allocate scarce resources are
matters of policy immune from judicial review.  See Estate of
Arrowwood v. State, 894 P.2d 642, 646 (Alaska 1995) (holding that
"legislative appropriations and executive department budget
decisions are discretionary functions immune from judicial
inquiry"); Industrial Indem. Co. v. State, 669 P.2d 561, 564-65
(Alaska 1983) ("Decisions regarding the allocation of scarce
resources are usually discretionary, and thus immune from judicial
inquiry.").  Thus, in Freeman v. State, 705 P.2d 918 (Alaska 1985),
for example, we held the State immune from liability for not
allocating adequate funds to provide highway dust control because
the decision involved "such basic policy factors as the cost of
such a program, alternative uses for the money that would be needed
for such a program, and the physical and environmental detriments
which would be inherent in the several . . . alternatives under
consideration."  Id. at 920.
          In this case, the City's decision whether to allocate
funds to hire firefighters involved comparable policy factors. 
Tenakee Springs is a rural community with about 100 residents.
Review of the City's 1993 budget discloses a wide variety of
municipal expenditures and relatively limited city revenues.  The
City had to weigh the fire department's staffing needs against the
competing budgetary concerns of a small community.  This balancing
required the City to make policy decisions about the appropriation
of funds.  Cf.  Defrees v. United States Forest Serv., 738 F. Supp.
380, 385 (D. Or. 1990) (observing that allocation of fire
suppression resources involved "social and economic policy
decisions"entitled to discretionary function immunity); Invest
Cast, Inc. v. City of Blaine, 471 N.W.2d 368, 371 (Minn. App. 1991)
(stating that "fire department's decision on how many firefighter
personnel and trucks to send to a fire is a policy decision
protected as a discretionary function").  We therefore conclude
that the City's staffing decisions were matters of resource
allocation immune from judicial inquiry.
          2.   Municipal ordinances
          The Adamses contend that even if the failure to hire
firefighters would ordinarily be entitled to discretionary function
immunity, it was not entitled to immunity in this case "because
discretion may not be used to violate City Ordinances."  According
to the Adamses, the "doctrine of discretionary immunity does not
protect a city from liability for damages which result from the
City's failure to follow its own rules." 
          Discretionary functions performed by government officials
may not be entitled to immunity if the officials violate "clearly
established"law.  Integrated Resources Equity Corp. v. Fairbanks
N. Star Borough, 799 P.2d 295, 301 (Alaska 1990); see also Breck v.
Ulmer, 745 P.2d 66, 73 (Alaska 1987) (holding that where officials
exercised discretion within the scope of their authority, they were
entitled to qualified immunity so long as they did not violate
"clearly established"law).  Thus, AS 09.65.070(d)(2) does not
immunize a city for its "failure to follow its own rules." 
Stanfill v. City of Fairbanks, 659 P.2d 579, 582 n.3 (Alaska 1983). 
          Additionally, a lack of resources does not permit a
municipality to deviate from clearly established law.  In State,
Department of Fish & Game v. Meyer, 906 P.2d 1365, 1374 (Alaska
1995), the State Commission for Human Rights closed cases to
control its budget despite a legislative mandate to investigate
cases supported by substantial evidence.  Although "sympathetic to
the Commission's claim of lack of resources,"we concluded that if
the Commission wanted discretionary authority to dismiss cases, "it
must be obtained from the legislature, not the judiciary."  Id.
          We must determine whether clearly established law
required Tenakee Springs to hire firefighters.  The Tenakee Springs
City Council enacted an ordinance establishing a fire department in
1974. [Fn. 4]  In 1982 it created a department of public safety
with the VPSO as its director. [Fn. 5]  Although the record does
not disclose whether the Tenakee Springs City Council expressly
repealed the 1974 ordinance, we conclude that it did so impliedly
when it passed the 1982 ordinance. [Fn. 6]  We therefore interpret
the 1982 ordinance.
          Our analysis begins with section 00.03.02(a), under which
"[t]he office of chief of fire services is . . . created." 
Significantly, neither it nor any other provision of the ordinance
establishes additional offices or positions in the fire department. 
Staffing of the department of public safety, including the fire
department, is instead left to the determination of the department
director under section  Section 00.03.02(b), however,
provides that the "[t]he chief and other fire service officers
shall be appointed by the [d]irector of public safety and confirmed
by the city council."  The Adamses urge us to adopt a mandatory
reading of "shall"such that the City is required to hire "salaried
officers."  We decline to do so.  In the context of section (a),
which creates only the office of the chief, we do not interpret
section (b) to require the City to create additional offices or
positions.  Rather, we read section (b) as setting forth the
mandatory procedures to be followed if additional appointments are
made.  Thus, section (b) is mandatory only in the sense that if
additional officers are hired, the appointments must be made by the
director of public safety and confirmed by the city council.  We
therefore conclude that no clearly established law requires the
City to hire firefighters other than the chief of fire services.
          Because the ordinance does require the City to have a
fire chief, however, we must determine whether the superior court
excluded evidence that the City failed to staff the office of the
chief.  The City contends that, despite the motion in limine, the
Adamses did introduce evidence and present argument regarding the
City's staffing of the office of the chief of fire services.  We
          At trial, several witnesses, including Dale Ziel, the
mayor of Tenakee Springs in July 1993, and J.C. Wisenbaugh, the
vice president of the city council in July 1993, testified about
fire department leadership on the night of the fire.  Ziel
explained that the VPSO, who was the chief of fire services under
the 1982 ordinance, had left Tenakee Springs sometime before the
fire and that his replacement had not been designated by that time. 
Wisenbaugh confirmed that at the time of the fire, no one had been
appointed to replace the departed VPSO.  Additionally, in closing
argument, the Adamses argued that the City was required by
ordinance to have a fire chief.  They further referred to the fact
that the VPSO had left Tenakee Springs shortly before the fire.
Indeed, the Adamses concede that they were able to introduce
evidence that "had to do with this question of whether someone was
in charge at the fire."  Against this backdrop, we conclude that
the Adamses were not prevented from introducing evidence and
arguing about the inadequate staffing of the office of chief of
fire services.  Given the substantial material the Adamses were
able to introduce at trial, any error related to the exclusion of
evidence on this topic was harmless.
          The Adamses also advance a reliance argument.  They
contend that had Tenakee Springs not created a fire department, the
citizens could have created their own fire response team. 
"[H]aving ensured that the citizens would rely upon the municipal
fire department,"the Adamses argue that "the municipality was
required to provide effective fire protection."  This argument is
          Reliance is relevant to whether a duty exists.  Thus, a
city may owe its residents a duty to provide fire protection if its
residents rely to their detriment on the fire department.  In this
case, however, Tenakee Springs does not contest that it owed a duty
to its residents; instead, the City assumes the existence of a duty
and argues that its decisions made in furtherance of the duty were
entitled to discretionary immunity.  The reliance of Tenakee
Springs residents on the fire department does not pertain to this
     B.   The Superior Court Did Not Err by Excluding a Portion of 
          a Witness's Testimony.

          The Adamses maintain that the superior court should not
have excluded a portion of the testimony of Mel DeHart, a Tenakee
Springs resident.  DeHart testified in a deposition that on an
unspecified date before the events at issue in this appeal, he saw
the Tenakee Springs fire department fight a fire ineffectively.  He
testified that he learned from the experience "[t]hat I better be
prepared to stop a fire if it starts at my place right at the
beginning."  The court excluded the testimony. [Fn. 7]  The Adamses
claim that DeHart's testimony "would have tended to show that the
citizens would have been prepared to defend themselves but for the
City's representations of preparedness."  The superior court's
decision on the admissibility of evidence is reviewed for abuse of
discretion.  See Estate of Arrowwood, 894 P.2d 642, 646 n.13
          First, to the extent the testimony supports the Adamses'
reliance argument, it is misplaced.  Second, under Alaska Rule of
Evidence 403, a trial court may exclude evidence "if its probative
value is outweighed by the danger of unfair prejudice."  Nothing in
the record indicates when the fire that DeHart witnessed occurred
or that it was similar to the fire in this case.  Indeed, DeHart
testified that the general time period was "pretty vague in [his]
mind."  Moreover, the testimony does not clearly support the
proposition for which it was introduced.  In short, review of the
excluded testimony does not indicate that its probative value
outweighed the danger of unfair prejudice.  Finally, under Alaska
Rule of Evidence 404(b), [Fn. 8] testimony about the City's
negligence in fighting one fire is not admissible as proof of
negligence in fighting another. [Fn. 9]  We hold that the superior
court did not abuse its discretion by excluding this portion of
DeHart's testimony.
          Given our conclusion that the superior court's decision
to exclude evidence of inadequate staffing was sound and in light
of the jury's finding that the City was not negligent, we need not
reach the Adamses' argument that a directed verdict on the issue of
proximate cause would not have been granted if the evidence of
inadequate staffing had not been excluded.  Furthermore, given our
disposition of the Adamses' arguments on appeal, we need not reach
the City's arguments on cross-appeal.
          For the foregoing reasons, the judgment of the superior
court is AFFIRMED.


Footnote 1:

     The trial court reserved ruling on the City's motion for a
directed verdict on causation until after the jury returned its
verdict.  Following the jury verdict, the court granted the motion.

Footnote 2:

     AS 09.65.070(d) provides in relevant part:

          An action for damages may not be brought
against a municipality or any of its agents, officers, or employees
if the claim

          . . . . 

          (2)  is based upon the exercise or performance
or the failure to exercise or perform a discretionary function or
duty by a municipality or its agents, officers, or employees,
whether or not the discretion involved is abused[.]

Footnote 3:

     R.E. v. State, 878 P.2d 1341, 1348-50 (Alaska 1994), addressed
discretionary immunity for the State under AS 09.50.250(1).  AS
09.50.250(1) provides similar discretionary function immunity for
the State as AS 09.65.070(d)(2) provides for municipalities.  We
have previously applied the planning/operational test under both
statutes.  See, e.g., Plancich v. State, 693 P.2d 855, 857-58
(Alaska 1985); Urethane Specialties, Inc. v. City of Valdez, 620
P.2d 683, 687-88 (Alaska 1980).

Footnote 4:

     Tenakee Springs Ordinance 74-3 (1974) provides in part:

          010. City Fire Department Established.  There
shall be a Fire Department in and for the City to be known as the
"Tenakee Springs Fire Department."  It shall consist of a Fire
Chief and Assistant Fire Chief, and as many other officers and
firefighters as the Council may deem necessary for the effective
operation of the department.

          020. Volunteer Fire Department.

               a. [O]rganization. Members of the Fire
Department may organize into a voluntary association with the
e[]lection of their own officers and by-laws.

          . . . .

          030. Fire Chief.

               a. Appointment. The Fire Chief shall be
appointed by the Council and shall be responsible to that body. 
His appointment shall be made for a term of one year, after the
Council is re-organized following the annual city election.

               b. Powers and Duties.
               1. The Fire Chief shall determine the
number and kind of companies of which the Department is to be
composed and shall determine the response of such companies to
               2. He shall annually submit a budget
request for his department upon a date fixed by the Council. 

               3. He shall appoint all other officers
and firefighters. . . .

Footnote 5:

     Tenakee Springs Ordinance 82-14 (1982) provides in part:

          00.01.00 DEPARTMENT CREATED.  There is hereby
established a department of public safety for the City of Tenakee

          00.01.01 DIRECTOR. The Village Public Safety
Officer shall be the director of the department.

          00.02.00 APPOINTMENT OF DIRECTOR. The director
is appointed by the mayor and confirmed by the Council.  He serves
at the pleasure of the mayor.

OF THE DEPARTMENT.  The department shall have broad powers in the
areas of law enforcement, fire protection, emergency medical
service, and search and rescue.

          . . . . 

          00.03.02 FIRE PROTECTION.  It is the duty of
the Department to supervise the activities of the Tenakee Springs
Volunteer Fire Department; extinguish fires; rescue persons
endangered by fire; promote fire prevention; enforce all ordinances
pertaining to fire, fire prevention and safety of persons
threatened by fire; and in all respects perform all duties
pertaining to the office of fireman.  The department shall register
with the State Fire Marshall's office as a formally constituted
fire department.

               (a) The office of chief of fire services
is hereby created.

               (b) The chief and other fire service
officers shall be appointed by the Director of public safety and
confirmed by the city council.

               (c) Members of the fire department may
organize into a voluntary association with the election of their
own officers and by-laws.

               1. The functions and duties of the
          officers of the voluntary association shall
not interfere with those of regular department officers who are
charged with responsibility for all fire service activities of the

          . . . .

          00.04.00 DEPARTMENT DIRECTOR.  The Director
(VPSO) is the commanding officer of the department.  His or her
duties shall include, but are not necessarily limited to, the

               01. determine the organization of the
department and provide for its staffing; 

          . . . . 


               A. The number of regular and special
department members shall be appointed by the director consistent
with existing personnel policies of the city. . . .

Footnote 6:

     Courts generally recognize "a presumption against repeal of
prior laws by implication."  1A Norman J. Singer, Sutherland
Statutory Construction sec. 23.10, at 353 (5th ed. 1993).  But pre-
existing law may be abrogated by comprehensive revision:  

          Legislation which operates to revise the
entire subject to which it relates, gives strong implication of a
legislative intent . . . to repeal former statutory law. . . . 
Therefore, the failure to set out former statutory provisions in a
later comprehensive enactment will operate to repeal the omitted
provisions which are inconsistent, and also former provisions which
are not repugnant to the later legislation. 

Id. sec. 23.13, at 366 (footnote omitted).

          The 1982 Tenakee Springs ordinance represents a
comprehensive reorganization of the City's public safety program,
including the fire department.  In the area of fire protection, the
latter ordinance grants "broad powers"to the department of public
safety and supplants the previously established fire department. 
In effect, the 1982 ordinance revises the entire subject of the
fire department and operates to repeal its 1974 predecessor.  See
also McInnis v. State, 603 S.W.2d 179, 183 (Tex. 1980) ("A statute
that covers the subject matter of a former law and is evidently
intended as a substitute for it, although containing no express
words to that effect, operates as a repeal of the former law to the
extent that its provisions are revised and its field freshly
covered."); Nehring v. Russell, 582 P.2d 67, 73 (Wyo. 1978)
(stating that implied repeal is shown where "the whole subject of
the earlier [ordinance] is covered by the latter one having the
same object, clearly intending to prescribe the only rules
applicable to the subject").

Footnote 7:

     The court ruled: 

          I will exclude it.  I guess I think that it
may have some relevancy.  I think that it's also potentially
unfairly prejudicial.  And I think in the weighing of it, it
doesn't say when it really occurred in the context.

After a brief exchange with counsel, the court elaborated: 

          And I do it because of the proximity to the
time and that not being definite, the lack of similar
circumstances.  And that's not the issue that is to be tried here. 
It's not that fire.  It's how they responded to this fire.

Footnote 8:

     Alaska Rule of Evidence 404(b) provides in part:

          (1)  Evidence of other crimes, wrongs, or acts
is not admissible if the sole purpose for offering the evidence is
to prove the character of a person in order to show that the person
acted in conformity therewith.  It is, however, admissible for
other purposes, including, but not limited to, proof of motive,
opportunity, intent, preparation, plan, knowledge, identity, or
absence of mistake or accident.

Footnote 9:

     See, e.g., Wickwire v. Arctic Circle Air Servs., 722 P.2d 930,
934 (Alaska 1986).