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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Shields v. Cape Fox Corp. (03/08/2002) sp-5547

Shields v. Cape Fox Corp. (03/08/2002) sp-5547

     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,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA

PATRICIA SHIELDS, KRISTY           )
SHIELDS, and THOMAS MARTINEZ, JR., )    Supreme Court No. S-9134
                                   )
               Appellants,              )
                                   )    Superior Court No.
     v.                            )    1KE-97-294 CI
                                   )
CAPE FOX CORPORATION, an           )    O P I N I O N
Alaskan corporation, and the BOARD      )
OF DIRECTORS OF CAPE FOX      )
CORPORATION,                       )
                                   )
               Appellees.               )    [No. 5547 - March 8,
2002]
                                   )


          Appeal  from the Superior Court of the  State
          of    Alaska,   First    Judicial   District,
          Ketchikan, Michael A. Thompson, Judge.

          Appearances:    David  W.   Rosendin,   P.C.,
          Ketchikan,   for   Appellants.    Frank    A.
          Pfiffner,    Hughes,    Thorsness,    Powell,
          Huddleston  &  Bauman,  LLC,  Anchorage,  and
          James  D.  Nelson, Betts, Patterson &  Mines,
          P.S., Seattle, for Appellees.

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

          MATTHEWS, Justice.


          Cape  Fox  Corporation  recovered  a  judgment  against

Kristy  Shields,  Patricia  Shields, and  Thomas  Martinez,  Jr.,

arising  out  of  losses incurred by a store owned  by  Cape  Fox

during 1995 and 1996.  The main question presented in this appeal

is  whether  the trial court committed plain error in failing  to

instruct  the  jury to determine Cape Foxs comparative  fault  in

causing  the  losses.  Because there was evidence of  comparative

fault,  comparative fault was pled and argued, each of Cape  Foxs

claims  was  at least partly negligence-based, and the applicable

statute  clearly  requires a comparative  fault  instruction,  we

conclude that the trial court committed plain error.

I.   FACTS AND PROCEEDINGS

          Cape  Fox  Corporation is the village  corporation  for

Saxman.   It  owns a number of businesses, including The  Village

Store,  a gift shop that primarily sells items to tourists.   The

Village Store incurred losses in 1995 and 1996, although  it  was

profitable in other years of operation.  Patricia Shields managed

the store from 1993 through 1996; in 1995 and 1996 her management

became  more  autonomous.   Kristy  Shields,  Patricias  teenaged

daughter,  worked at The Village Store during 1995-1996.   Thomas

Martinez,  Patricias brother-in-law, was a director of  Cape  Fox

until  he  was  removed as a result of this case.   He  was  also

chairman of the board until the summer of 1996.

          Cape  Fox  sued the defendants for the stores  losses.1

It  presented claims of negligence and conversion against each of

the  three  and  a  claim  of breach of  fiduciary  duty  against

Martinez.   It  sought  punitive  damages  against  Patricia  and

Martinez.  Cape Fox also sought the removal of Martinez from  the

board  and  a  decree barring him for life from  serving  on  the

board.   They  based this request upon allegations  of  Martinezs

fraudulent or dishonest acts and gross misconduct.

          During  discovery, the defendants failed to appear  for

scheduled  depositions.   The trial court thus entered  discovery

sanctions  precluding them from testifying.   At trial,  however,

the  court  permitted  Patricia to call Martinez  as  a  witness.

Otherwise, the sanctions were enforced.

          After  a  four-day  trial the jury returned  a  special

verdict in favor of Cape Fox on all counts.  The jury awarded the

following amounts against each defendant on the claims presented:

          Kristy Shields
               Conversion           $10,000.00
               Negligence           $10,000.00

          Patricia Shields
               Conversion          $201,727.08
               Negligence          $352,440.08
               Punitive Damages    $125,000.00

          Thomas Martinez
               Conversion          $206,427.08
               Negligence          $321,427.08
               Breach of
               Fiduciary Duty $206,427.08
               Punitive Damages    $175,000.00

The jury also determined that Martinez should be removed from the

board of directors and barred for fifteen years from serving as a

director.

          Following receipt of the verdict, the court entered  an

award  of  attorneys fees and costs against the defendants.   The

court  also  limited  the  compensatory damages  awarded  against

Patricia   for  her  negligence  and  conversion  to  the   jurys

determination   of   damages  owing  to  her  negligence   alone,

$352,440.08.   Similarly  with respect  to  Martinez,  the  court

limited  damages  against  him  for  conversion  and  breach   of

fiduciary duty to the jurys determination of damages owing to his

negligence,  $321,427.08.  Finally, treating  the  jurys  special

verdict on the removal and bar of Martinez as advisory, the court

entered an order removing Martinez from the board and barring him

from service on the board for fifteen years.

          The defendants now raise a variety of challenges to the

trial courts judgment.

II.  DISCUSSION

     A.   Did  the Court Err in Failing to Appoint a Guardian  ad
          Litem for Kristy?
          
          Patricia,  without counsel, filed an answer on  Kristys

behalf  as her next friend.  Defendants contend that the judgment

against Kristy is void because she was a minor when she was  sued

and  the absence of a court-approved guardian ad litem makes  any

judgment  against a minor void.  Further, they contend  that  the

fact  that Kristy had reached the age of majority by the time  of

the  trial does not mean that the judgment is valid, because  she

was a minor at critical pretrial stages.

          Alaska  Civil  Rule  17(c) governs  this  issue.2   The

second sentence of this rule makes clear that while a next friend

may sue on behalf of a minor, she may not defend a suit against a

minor.   Further,  a  next friend cannot  generally  represent  a

minor, even as a plaintiff, without counsel.3





          As  noted, Patricia, acting pro se, filed an answer for

Kristy  as  Kristys next friend.  Thus Kristy  was  not  properly

represented and the trial court should have appointed a  guardian

ad  litem  or entered some other appropriate protective order  on

Kristys behalf pursuant to Civil Rule 17(c).

          However, this error does not require reversal  in  this

case  because Kristy turned eighteen almost a year before  trial.

She  became  an  adult after the case was filed  but  before  any

events had occurred in pretrial practice that might prejudice her

interests.  Once she became an adult she was, in the eyes of  the

law, competent to represent herself and was no longer entitled to

protection  under  the  rule.4  Absent  a  showing  of  prejudice

resulting  from  her lack of representation or protection  before

she turned eighteen, the error was harmless.5

     B.   Did  the  Court Err When it Failed to Instruct  on  the
          Comparative Fault of Cape Fox?
          
          The   defendants   argue  that  a   comparative   fault

instruction should have been given.  But they did not  propose  a

comparative fault instruction or object to the courts failure  to

give one.  Civil Rule 51(a)6 therefore applies, and this argument

must be reviewed under the stringent plain error standard.7

          Plain  error  exists where there is an obvious  mistake

that  creates  a  high likelihood that the jury  will  follow  an

erroneous  theory resulting in a miscarriage of  justice.8   This

standard  imposes a heavy burden on appellants to  show  that  an

error  was  both  obvious  and very  likely  consequential.9   We

believe that there was plain error in this case.

          Alaska  Statute 09.17.080(a) requires trial  courts  to

          instruct on comparative fault in all cases involving the fault of

more  than one person unless the parties agree that there  should

be  no  such instruction.  This requirement is expressed in clear

and mandatory terms:  In all actions involving fault of more than

one person, including third-party defendants and persons who have

settled  or otherwise been released, the court, unless  otherwise

agreed  by all parties, shall instruct the jury to answer special

interrogatories . . . .  (Emphasis added.)

          Here, Patricia and Kristy pled comparative fault as  an

affirmative defense.  Martinez, answering pro per, did not  plead

comparative fault as an affirmative defense, but he did interpose

it  as  a  counterclaim for damages.  Further, Martinez, who  was

subsequently  represented by counsel, made Cape Foxs  comparative

fault  the centerpiece of his trial brief.  There was no  express

agreement  by  the  Shields or Martinez not to  instruct  on  the

subject  of  comparative fault. Thus the failure to  instruct  on

comparative  fault  was error sufficiently obvious  to  meet  the

obvious mistake component of the plain error doctrine.

          The defendants at the trial stressed the responsibility

of  Cape  Fox Corporation for the losses during 1995 and 1996  at

The  Village  Store.  They argued that Patricia did  not  receive

adequate   administrative   support,   training,   or   equipment

maintenance.    They  contended  that  Cape  Fox   administrative

personnel  were aware of the problems she was having and  of  the

practices  that she had permitted.  Defendants argued  that  Cape

Fox  personnel  negligently failed to act  in  response  to  this

knowledge.  Furthermore, Martinez argued that the Cape Fox  board

concurred  with  his  acts which allegedly facilitated  Patricias

mismanagement  and  wrongful conduct.  The  defendants  developed

evidence  on  these  points and emphasized them  in  their  final

arguments.

          In  our  view, if the jury had been properly instructed

on the subject of comparative fault, Cape Fox would probably have

been  made to bear some significant responsibility for  the  1995

and  1996 losses.  Therefore, we conclude that the likelihood  of

harm component of the plain error standard has also been met.  We

thus find that the court committed plain error when it failed  to

give a comparative fault instruction.

          This   conclusion  applies  to  the  negligence  claims

against all defendants.  The defendants argue that it must  apply

also to the conversion claims.  They correctly point out that the

pre-1997  version  of  AS  09.17.900, which  governs  this  case,

included  within  the concept of fault all tortious  acts  except

those  where  the defendant acted with the intent  to  cause  the

resultant harm.10  Defendants also note that the jury instruction

on  conversion did not require an intent on their part to deprive

Cape  Fox  of  the  benefits of ownership of the items  allegedly

converted.11  Instead, the court required an intentional exercise

of  dominion or control over property or money which so seriously

interferes with the right of another to control it that the actor

may  justly  be required to pay the other the full value  of  the

property  or  money.   According to  that  instruction,  a  store

manager  such  as  Patricia, who intentionally exercises  control

over  store  property, might be liable for losses resulting  from

negligent acts in connection with such control.  Thus, the  fault

giving rise to liability for conversion could be mere negligence.

Accordingly,   fault   as  defined  by  the   courts   conversion

instruction falls within the ambit of AS 09.17.900, and the court

should  have  instructed the jury on comparative negligence  with

regard to these claims.12

          What  remains  is  the question whether  a  comparative

fault  instruction  should  have encompassed  the  claim  against

Martinez  for  breach  of  his  fiduciary  duties.   The   courts

instruction  on  this  theory  of  liability  maintained  that  a

director such as Martinez has the duty to honestly and diligently

direct  the business of the corporation.13  Cape Fox argues  that

actions against corporate directors for breach of fiduciary  duty

are contract actions and that comparative fault principles should

          not apply to them.  In support of this proposition Cape Fox cites

Bibo  v. Jeffreys Restaurant.14  There the question was which  of

two  possible statutes of limitations applied to a claim  against

corporate  directors  for breach of their fiduciary  obligations.

The  choices  were  the  six-year period  applicable  to  implied

contracts  or  the  two-year  period  applicable  to  torts.   We

recognized  that there was authority supporting both choices  and

decided  that  such  actions should be governed  by  the  implied

contract  statute of limitations because of the preference  given

to  the  longer period of limitations when two periods reasonably

may apply.15

          This  aspect  of Bibo was discussed in  Lee  Houston  &

Associates, Ltd. v. Racine.16  There we compared Bibo   involving

claims that directors had breached their fiduciary duties  to Van

Horn  Lodge,  Inc.  v.  White,17 a  case  involving  a  claim  of

professional malpractice against an attorney.  In Van Horn  Lodge

we  held  that  the  malpractice claim fell within  the  two-year

period  of limitations established by the tort statute.   In  Lee

Houston  we found the two cases difficult to reconcile.  In  each

case  the  duty  that was allegedly breached was imposed  by  law

rather  than by an explicit promise.  We observed that  in  these

circumstances  the  claims may be reasonably  be  said  to  arise

either in tort or in contract.18  We referred to such actions  as

hybrid actions and held that they would be governed by the longer

implied  contract statute of limitations, while leaving open  the

possibility  that  they  might  be considered  tort  actions  for

purposes of determining the availability of punitive damages.19

          Subsequently, in Breck v. Moore20 we were presented with

a professional malpractice action against an attorney and a title

company  involving an alleged breach of a duty of due care  which

was  implied  by  law as a result of a contractual undertaking.21

Referring to the hybrid nature of such actions, we held that  the

implied  contract statute of limitations should be  applied,  but

that  a tort rather than a contract measure of damages should  be

          used.22

          Cape  Foxs  breach  of  fiduciary  duty  claim  against

Martinez  is  a  hybrid claim.  Like the claims involved  in  the

foregoing  cases, the fiduciary duty claim is  based  on  a  duty

implied by law as a result of a contractual undertaking.  Insofar

as  the  duty  requires due diligence it is merely  a  particular

application  of  a negligence standard.  To say that  this  claim

should not be subject to a comparative fault instruction would be

to  elevate  form  over substance.  As we said  in  Lee  Houston,

[t]his  court should avoid applications of the law which lead  to

different  substantive  results based  upon  distinctions  having

their  source solely in the niceties of pleading and not  in  the

underlying realities.23

          Cape  Fox advances another reason why it was not  plain

error  not  to  give a comparative fault instruction.   Cape  Fox

contends  that  fault  should  not  be  allocated  in  situations

involving  solely economic loss.  It bases this argument  on  the

definition  of  fault set out in AS 09.17.900:  In this  chapter,

fault  includes  acts  or  omissions  that  are  in  any  measure

negligent, reckless, or intentional toward the person or property

of  the  actor  or  others  . . . .  Cape  Fox  notes  that  this

language was taken from the Uniform Comparative Fault Act of 1977

and  that  the  comment to the act indicates that  fault  is  not

intended  to be allocated in situations involving economic  loss.

The commissioners comment to section 1 of the Uniform Comparative

Fault Act states:

          The  specific application of that  principle,
          as  provided for in this Act, is confined  to
          physical harm to person or property.  But  it
          necessarily  includes  consequential  damages
          deriving  from  the physical  harm,  such  as
          doctors  bills,  loss of wages  or  costs  of
          repair  or replacement of property.  It  does
          not   include  matters  like  economic   loss
          resulting  from  a  tort  such  as  negligent
          misrepresentation,   or   interference   with
          contractual relations or injurious falsehood,
          or   harm   to   reputation  resulting   from
          defamation.   But  failure to  include  these
          harms specifically in the act is not intended
          to   preclude  application  of  the   general
          principle to them if a court determines  that
          the  common law of the state would  make  the
          application.
          
          A  number of jurisdictions have been presented with the

question of whether cases involving only economic loss should  be

subject  to  comparative negligence principles.24  The prevailing

view  is  that comparative negligence does apply in such cases.25

But  we need not resolve this controversy in the present case for

this  not  a case involving only economic loss.  Cape Foxs  claim

for  conversion  was  necessarily a claim for  tangible  property

loss.   Where substantial claims for tangible property  loss  are

combined with claims for economic loss, it would be confusing and

unduly  complex  to  apply  a rule of comparative  fault  to  the

former,  but not to the latter.  Cape Fox does not advocate  that

such  a  course  should  be followed, and  we  are  aware  of  no

authority that so holds.

          In  summary, we conclude that it was plain error not to

give a comparative fault instruction and that such an instruction

should  have been given encompassing all of Cape Foxs claims  for

compensatory damages against each defendant.

     C.   Did  the  Court  Err When it Instructed the  Jury  that
          Patricia Shields and Kristy Shields Could Be Liable for
          Failing to Exercise Ordinary Care in the Work They Were
          Hired to Perform for Cape Fox?
          
          The  court instructed the jury that Patricia and Kristy

had  a  duty to exercise reasonable skill and ordinary  care  and

diligence  in  the  work  they  were  hired  to  perform.26   The

defendants  claim  that this instruction was  erroneous,  arguing

that there is no tort of negligent job performance.  They contend

that  in case of poor job performance, [t]he employers remedy  is

to fire the employee for ineptness  or lack of diligence.

          Since  defendants failed to raise this issue below  and

did  not object to Instruction No. 12, we review this issue  only

for  plain error.  The focus of their argument is on the case  of

Brown  v.  United Cerebral Palsy/Atlantic & Cape May, Inc.27   In

          that case the court indicated that ordinary negligence would

apply  to  nondiscretionary  acts  of  employees  such  as  those

resulting in shortages in a cash drawer, but not to acts  of  bad

management causing a loss of profits.28

          Cape  Fox  responds  that Brown represents  a  distinct

minority view and that the Restatement (Second) of Agency  379(1)

(1958),  expresses the more general rule that [u]nless  otherwise

agreed, a paid agent is subject to a duty to the principal to act

with  standard care and with the skill which is standard  in  the

locality  for  the kind of work which he is employed  to  perform

. . . .

          We  agree with Cape Fox that the general rule  is  that

expressed by  379(1) of the Restatement (Second) of Agency,29 and

that it was not plain error to give Instruction No. 12.

     D.   Did  the  Court  Err When it Failed  to  Instruct  that
          Martinezs   Liability  Was  Limited  by  the   Business
          Judgment Rule?
          
          Defendants contend that Jury Instruction Nos. 14 and 15

concerning  Martinezs liability as a director of the  corporation

were  plain  error30  because they did not reflect  the  business

judgment  rule.   The business judgment rule is  set  out  in  AS

10.06.450(b).31  It requires a director to use the care . . . that

an  ordinarily prudent person in a like position would use  under

similar  circumstances.  As such, liability  under  the  business

judgment   rule  does  not  differ  appreciably  from  negligence

liability   the standard used in Instructions Nos. 14  and  15.32

Thus  it  was not plain error to fail to instruct on the business

judgment rule.

     E.   Were  the Courts Findings Removing Martinez and Barring
          Him from Serving as an Officer and Director Adequate?
          
          Defendants  contend that the entire case was  equitable

rather  than  legal  in nature, that certain  equitable  defenses

therefore  should have been allowed, that findings  of  fact  and

conclusions  of  law  on all issues were required,  and  that  no

punitive  damages  could be awarded.  This global  contention  is

          without merit.  All of Cape Foxs damage claims were legal rather

than equitable in nature.33  Cape Fox did, however, seek equitable

relief  insofar  as  it sought the removal of Martinez  from  the

board  of  directors and a ban on his future service.  The  court

treated the special verdict on this subject as advisory only  and

subsequently  entered the following statement as a  part  of  the

final judgment:

               It  is  further  ORDERED,  ADJUDGED  AND
          DECREED  that Defendant Thomas Martinez,  Jr.
          engaged  in  fraudulent  or  dishonest  acts,
          gross  neglect  of duty and  gross  abuse  of
          authority   or  discretion  with  regard   to
          Plaintiff Cape Fox Corporation and,  pursuant
          to  AS  10.06.463,  is  hereby  removed  from
          office  as a director of Plaintiff  Cape  Fox
          Corporation. It is further
          
               ORDERED,  ADJUDGED AND DECREED that  for
          the reasons noted in the preceding paragraph,
          Defendant Thomas Martinez, Jr. is barred from
          office  as a director of Plaintiff  Cape  Fox
          Corporation  for  a period  of  fifteen  (15)
          years commencing from January 13, 1999.
          
Martinez  contends that the above statement is merely  conclusory

and  does  not  satisfy the findings requirement  of  Civil  Rule

52(a).34   We  agree.   The statement does not  explain  in  what

respects  Martinez  committed the wrongs  he  is  found  to  have

committed.   Without detailing the particulars of his misconduct,

the  trial courts judgment does not satisfy Rule 52(a)s  findings

requirement.35  We therefore remand for further findings.

III. CONCLUSION

          Because  the court committed plain error in failing  to

instruct  the jury on comparative fault, a new trial  as  to  the

comparative  fault  of  the parties and compensatory  damages  is

required.   Because  comparative fault is  relevant  to  punitive

damages,  a  new  trial as to Cape Foxs entitlement  to  punitive

damages and the amount of punitive damages is also required.

          Because  the  court  did  not  make  adequate  findings

concerning  the  removal and ban from service of Martinez  as  an

officer and director of Cape Fox, this aspect of the trial courts

          judgment is vacated.  On remand, the court should make and enter

findings specifying the particular conduct of Martinez upon which

the  relief granted is based.36  The award of costs and  fees  to

Cape  Fox must also be vacated since the judgment on which it  is

based has been reversed.

          VACATED, REVERSED, and REMANDED.

_______________________________
     1     Cape  Fox  also  presented a claim that  Martinez  had
charged  unauthorized  travel  expenses  of  some  $3500  to  the
corporation.

     2    Civil Rule 17(c) provides:

               Whenever an infant or incompetent person
          has  a  representative,  such  as  a  general
          guardian,  committee, conservator,  or  other
          like fiduciary, the representative may sue or
          defend on behalf of the infant or incompetent
          person.  An infant or incompetent person  who
          does not have a duly appointed representative
          may sue by a next friend or by a guardian  ad
          litem.  The court shall appoint a guardian ad
          litem for an infant or incompetent person not
          otherwise represented in an action  or  shall
          make such other order as it deems proper  for
          the  protection of the infant or  incompetent
          person.
          
     3    The Ninth Circuit Court of Appeals addressed this issue
in Johns v. County of San Diego.  The court stated:

               While we have not addressed the question
          of  whether a guardian ad litem can represent
          a child without retaining a lawyer, all other
          circuit courts addressing the issue have held
          that  the guardian or parent cannot  bring  a
          lawsuit on behalf of a minor in federal court
          without retaining a lawyer. See, e.g.,  Osei-
          Afriyie v. Medical College, 937 F.2d 876, 882-
          83  (3d  Cir.1991); Cheung v. Youth Orchestra
          Found.  of Buffalo, Inc., 906 F.2d 59,  61-62
          (2d  Cir.1990); Meeker v. Kercher,  782  F.2d
          153,  154  (10th Cir.1986) (per curiam).  The
          Third Circuit explained the rationale:
          
                 A litigant in federal court has a
               right  to  act as his  or  her  own
               counsel.   See  28   U.S.C.    1654
               (1982)....  However, we agree  with
               Meeker  v.  Kercher, 782 F.2d  153,
               154  (10th Cir.1986) (per  curiam),
               that a non-attorney parent must  be
               represented by counsel in  bringing
               an  action on behalf of his or  her
               child. The choice to appear pro  se
               is not a true choice for minors who
               under  state law, see Fed. R.  Civ.
               P. 1(b), cannot determine their own
               legal  actions. There  is  thus  no
               individual choice to proceed pro se
               for courts to respect, and the sole
               policy   at   stake  concerns   the
               exclusion  of non-licensed  persons
               to appear as attorneys on behalf of
               others.
               
          It  goes without saying that it is not in the
          interest of minors or incompetents that  they
          be  represented by non-attorneys.  Where they
          have  claims that require adjudication,  they
          are  entitled to trained legal assistance  so
          their  rights may be fully protected.   Osei-
          Afriyie, 937 F.2d at 882-83 (quoting  Cheung,
          906 F.2d at 61).
          
               We   agree  with  this  reasoning.    In
          addition, we are bound by our general holding
          in  C.E.  Pope  that  a  non-lawyer  "has  no
          authority to appear as an attorney for others
          than  himself." C.E. Pope, 818 F.2d  at  697.
          The issue of whether a parent can bring a pro
          se  lawsuit  on  behalf  of  a  minor  "falls
          squarely  within the ambit of the  principles
          that militate against allowing non-lawyers to
          represent  others in court." Brown  v.  Ortho
          Diagnostic Sys., Inc., 868 F. Supp. 168,  172
          (E.D.  Va.1994). Accordingly, we hold that  a
          parent or guardian cannot bring an action  on
          behalf  of a minor child without retaining  a
          lawyer.
          
114 F.3d 874, 876-77 (9th Cir. 1997).

     4     See  Wagnon v. Gaines, 526 P.2d 500, 501  (Okla.  App.
1974).

     5    Civil Rule 61 provides in relevant part:

               No  error  .  .  . in anything  done  or
          omitted by the court or by any of the parties
          is  ground  for granting a new trial  .  .  .
          unless refusal to take such action appears to
          the   court   inconsistent  with  substantial
          justice.   The  court at every stage  of  the
          proceeding must disregard any error or defect
          in  the proceeding which does not affect  the
          substantial rights of the parties.
          
     6    Civil Rule 51(a) provides:

               At  the close of the evidence or at such
          earlier time as the court reasonably directs,
          any  party may file written requests that the
          court  give  the jury specific  instructions.
          The  court shall inform counsel of the  final
          form  of  jury  instructions prior  to  their
          arguments  to the jury.  Following the  close
          of   the   evidence,  before  or  after   the
          arguments   of  counsel,  the   court   shall
          instruct  the jury.  Additionally, the  court
          may  give  the jury such instructions  as  it
          deems  necessary at any stage of  the  trial.
          No  party  may assign as error the giving  or
          the failure to give an instruction unless the
          party objects thereto before the jury retires
          to  consider its verdict, stating  distinctly
          the matter to which the party objects and the
          grounds  of the objection.  Opportunity  must
          be  given  to make the objection out  of  the
          hearing of the jury, by excusing the jury  or
          hearing objections in chambers.
          
     7    See Manes v. Coats, 941 P.2d 120, 125 (Alaska 1997).

     8     Alaska  Marine  Pilots v. Hendsch, 950  P.2d  98,  110
(Alaska  1997);  see also Merrill v. Faltin, 430  P.2d  913,  917
(Alaska  1967)  (We  have held that we shall  not  pass  upon  an
assertion  that the giving of an instruction was error where  the
matter  had  not  been properly brought to the attention  of  the
trial  court.  But we have also held that we shall consider plain
errors,  even  though  not  objected  to  below,  which  are   so
substantial as to result in injustice.).

     9    See Alaska Marine Pilots, 950 P.2d at 110.

     10     See  Borg-Warner Corp. v. Avco Corp. (Lycoming Div.),
850 P.2d 628 (Alaska 1993).

     11    The conversion instruction given by the court provided
as follows:

                       INSTRUCTION NO. 13

               Plaintiff  Cape  Fox Corporation  claims
          that   each   of  the  defendants   converted
          property  or  money from the corporation  and
          wants compensation for the fair value of  the
          losses resulting from the conversion.
          
               Conversion is an intentional exercise of
          dominion  or control over property  or  money
          which  so seriously interferes with the right
          of  another to control it that the actor  may
          justly be required to pay the other the  full
          value of the property or money.
          
               In order to find that plaintiff Cape Fox
          Corporation  is entitled to recover  on  this
          claim, you must decide that it is more likely
          true than not true that:
          
               1.   Defendants Patricia Shields, Thomas
          Martinez,   Jr.,   and/or   Kristy    Shields
          converted  property or money  from  plaintiff
          Cape Fox Corporation; and
          
               2.     The  fair  value  of  the  losses
          resulting from the conversion.
          
     12    By contrast, the Alaska Pattern Civil Jury Instructions
(1990 revisions) concerning conversion require an intentional act
on  the  part of the defendant damaging or interfering  with  the
plaintiffs right to possess property.  Pattern Instruction 18.02.
Instruction 18.03 defines intentional act as encompassing  either
an intent to interfere with the property or knowledge on the part
of  the  defendant to a substantial certainty  that  the  act  or
omission  would result in such interference.  Even as so defined,
conversion  sometimes  may be negligent  in  character,  for  the
second  sentence  of Pattern Instruction 18.03 indicates  that  a
mistaken belief on the part of a defendant that he or she  had  a
right   to   interfere  with  the  property   does   not   negate
intentionality.

     13    The fiduciary duty instruction provided as follows:

                       INSTRUCTION NO. 14

               Plaintiff  Cape  Fox Corporation  claims
          that  as  a  director of Cape Fox Corporation
          defendant   Thomas  Martinez,  Jr.   breached
          fiduciary   duties  that  he  owed   to   the
          corporation   and  wants  compensation   from
          defendant Thomas Martinez, Jr. for  the  harm
          resulting   from  the  breach  of   fiduciary
          duties.
          
               A   director  is  a  fiduciary  to   the
          corporation.   Directors are  entrusted  with
          the  management of the corporations  business
          and  property  for  the benefit  of  all  the
          shareholders.  As such, directors occupy  the
          position of trustees for the collective  body
          of   shareholders.    This   fiduciary   duty
          constitutes  an  agreement  to  honestly  and
          diligently   direct  the  business   of   the
          corporation.
          
               In order to find that plaintiff Cape Fox
          Corporation  is entitled to recover  on  this
          claim, you must decide that it is more likely
          true than not true that:
          
               1.     Defendant  Thomas  Martinez,  Jr.
          breached  fiduciary duties that  he  owed  to
          plaintiff Cape Fox Corporation;
          
               2.    The breach of fiduciary duties  by
          defendant  Thomas Martinez, Jr. was  a  legal
          cause   of   harm  to  plaintiff   Cape   Fox
          Corporation; and
          
               3.    Plaintiff Cape Fox corporation was
          actually harmed.
          
     14    770 P.2d 290, 295 (Alaska 1989).

     15    Id. at 296.

     16    806 P.2d 848, 853-54 (Alaska 1991).

     17    627 P.2d 641 (Alaska 1981).

     18    Lee Houston, 806 P.2d at 853-54.

     19    Id. at 854-55.

     20    910 P.2d 599 (Alaska 1996).

     21    Id. at 603.

     22    Id. at 604.

     23     Lee  Houston,  806  P.2d  at  853  (quoting  Higa  v.
Mirikitani, 517 P.2d 1, 4-5 (Haw. 1973)).

     24     See Sonja Larsen, J.D., Annotation, Applicability  of
Comparative  Negligence Doctrine to Actions  Based  on  Negligent
Misrepresentation, 22 A.L.R. 5th 464 (1994).

     25     Id. at  2.  There are also contrary authorities.  Id.
at  4.

     26    Instruction No. 12 provides:

               Plaintiff  Cape  Fox Corporation  claims
          that it was harmed because of the failure  of
          defendants   Patricia  Shields   and   Kristy
          Shields  to  exercise  reasonable  skill  and
          ordinary care and diligence in the work  they
          were hired to perform for plaintiff Cape  Fox
          Corporation   and  wants  compensation   from
          defendants   Patricia  Shields   and   Kristy
          Shields for the harm.
          
               Employees  have  the  duty  to  exercise
          reasonable  skill  and  ordinary   care   and
          diligence  in  the work they  were  hired  to
          perform.
          
               In order to find that plaintiff Cape Fox
          Corporation  is entitled to recover  on  this
          claim, you must decide that it is more likely
          true than not true that:
          
               1.    Defendants Patricia Shields and/or
          Kristy  Shields failed to exercise reasonable
          skill and ordinary care and diligence in  the
          work they were hired to perform for plaintiff
          Cape Fox Corporation;
          
               2.    The failure to exercise reasonable
          skill  and ordinary care and diligence was  a
          legal  cause  of harm to plaintiff  Cape  Fox
          Corporation; and
          
               3.    Plaintiff Cape Fox Corporation was
          actually harmed.
          
     27    650 A.2d 848 (N.J. Super. Law. Div. 1994).

     28     Id. at 852.  Brown, if followed, therefore would have
no  effect on Kristys liability for she was not a manager, but it
could affect Patricias liability.

     29    Still, the matter is not free from doubt.  For example,
the  commentary to  379(1) of the Restatement (Second) of  Agency
(1958) does not necessarily encompass lost profits liability.  It
states:

               The  negligence for which  an  agent  is
          subject  to  liability to the  principal  may
          consist  of  misconduct in negotiations  with
          third persons, of conduct causing harm to the
          principals tangible things in his custody, or
          of   conduct  causing  the  principal  to  be
          subject  to liability for a tort,  crime,  or
          breach of contract.
          
     30    These instructions were also not objected to at trial.

     31    AS 10.06.450(b) provides:

               A director shall perform the duties of a
          director, including duties as a member  of  a
          committee of the board on which the  director
          may  serve,  in good faith, in a  manner  the
          director  reasonably believes to  be  in  the
          best  interests of the corporation, and  with
          the  care, including reasonable inquiry, that
          an   ordinarily  prudent  person  in  a  like
          position    would    use    under     similar
          circumstances.  Except as provided in (c)  of
          this  section, a director is entitled to rely
          on    information,   opinions,   reports   or
          statements,  including  financial  statements
          and   other  financial  data,  in  each  case
          prepared or presented by
          
               (1) one or more officers or employees of
          the  corporation whom the director reasonably
          believes to be reliable and competent in  the
          matters presented;
          
               (2)  counsel,  public  accountants,   or
          other persons as to matters that the director
          reasonably believes to be within the person's
          professional or expert competence;  or
          
               (3)  a committee of the board upon which
          the  director  does not serve, designated  in
          accordance  with a provision of the  articles
          or  the  bylaws,  as  to matters  within  the
          authority  of  the committee if the  director
          reasonably  believes the committee  to  merit
          confidence.
          
     32     AS  10.06.210(1)(N) provides  that  the  articles  of
incorporation can restrict the liability of a director  generally
to  acts  that  are  not  in good faith  or  involve  intentional
misconduct.   Martinez  did  not contend  that  the  articles  of
incorporation of Cape Fox contain such a provision.

     33    See Vinson v. Hamilton, 854 P.2d 733, 737 (Alaska 1993)
(money damage claims are legal in nature).

     34    The first sentence of Civil Rule 52(a) provides:

               In  all  actions  tried upon  the  facts
          without a jury or with an advisory jury,  the
          court  shall  find  the facts  specially  and
          state  separately  its  conclusions  of   law
          thereon   and  judgment  shall   be   entered
          pursuant  to  Rule  58; and  in  granting  or
          refusing interlocutory injunctions the  court
          shall  similarly  set forth the  findings  of
          fact  and conclusions of law which constitute
          the grounds of its action.
          
     35     See  Borchgrevink v. Borchgrevink, 941 P.2d 132,  139
(Alaska 1997).

     36    The appellants have made a number of additional claims
of  error.   They  have been considered and found  to  be  either
without merit or moot in view of our decision in this case.