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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. AVCP Regional Housing Authority v. R.A. Vranckaert Co., Inc. (5/17/2002) sp-5573

AVCP Regional Housing Authority v. R.A. Vranckaert Co., Inc. (5/17/2002) sp-5573

     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


AVCP REGIONAL HOUSING         )
AUTHORITY,                    )    Supreme Court No. S-9872
                              )
             Appellant,            )    Superior Court No.
                              )    3AN-99-11339 CI
     v.                       )
                              )    O P I N I O N
R.A. VRANCKAERT COMPANY, )
INC.; KUUKPIK CORPORATION;    )    [No. 5573 - May 17, 2002]
and R.A. VRANCKAERT      )
COMPANY, INC./KUUKPIK         )
CORPORATION JOINT VENTURE,    )
                              )
             Appellees.            )
________________________________)
                              )
R.A. VRANCKAERT COMPANY, )
INC.; KUUKPIK CORPORATION;    )    Supreme Court No. S-9893
and R.A. VRANCKAERT      )
COMPANY, INC./KUUKPIK         )    Superior Court No.
CORPORATION JOINT VENTURE,    )    4BE-99-00058 CI
                              )
             Petitioners,          )
                              )
     v.                       )
                              )
AVCP REGIONAL HOUSING         )
AUTHORITY,                    )
                              )
             Respondent.      )
________________________________)


          Appeal  from the Superior Court of the  State
          of    Alaska,    Third   Judicial   District,
          Anchorage, Karen L. Hunt, Judge.

          Petition  for Review from the Superior  Court
          of  the  State  of  Alaska,  Fourth  Judicial
          District,   Bethel,  Niesje  J.  Steinkruger,
          Judge.

          Appearances:   Tracy  L.  Knutson,  Sisson  &
          Knutson,  P.C., Anchorage, for Appellant  and
          Respondent.  Roger F. Holmes, Biss &  Holmes,
          Anchorage, for Appellees and Petitioners.

          Before:    Fabe,  Chief  Justice,   Eastaugh,
          Bryner,  and Carpeneti, Justices.  [Matthews,
          Justice, not participating.]

          FABE, Chief Justice.


I.   INTRODUCTION

          Two  groups of tenants, the Nilsson plaintiffs and  the

Engler  plaintiffs,  sued  their  landlord,  the  Association  of

Village Council Presidents Regional Housing Authority (AVCP), for

injuries  caused  by exposure to carbon monoxide  emissions  from

their  gas ranges.  The contractor, R.A. Vranckaert Company,  had

forgotten  to  convert  the stoves from natural  gas  to  propane

before turning the housing project over to AVCP.

          After  settling with the Nilsson plaintiffs, AVCP moved

to  amend its third-party complaint against Vranckaert to include

a  claim  of equitable indemnity.  Superior Court Judge  Dale  O.

Curda  denied  the  motion and dismissed AVCP  from  the  action.

Rather than appealing, AVCP filed a new action against Vranckaert

asserting various indemnity claims.  Based on Judge Curdas order,

Superior  Court Judge Karen L. Hunt ruled that these claims  were

barred by the doctrine of res judicata.

          The   Engler  plaintiffs  then  sued  both   AVCP   and

Vranckaert.  AVCP asserted the same indemnity claims in its third-

party  complaint against Vranckaert.  Superior Court Judge Niesje

J.  Steinkruger granted Vranckaert summary judgment on the claims

of  express  contractual  indemnity and passive  negligence,  but

denied  summary  judgment on the claims  of  implied  contractual

indemnity, breach of contract, and negligence.

          We  affirm the decisions of Judge Steinkruger and Judge

Hunt  granting  summary judgment in Vranckaerts  favor  on  AVCPs

claim  of  passive negligence.  We also affirm Judge Steinkrugers

decision granting summary judgment in Vranckaerts favor on AVCP's

claim  of  express contractual indemnity.  But we  reverse  Judge

Steinkrugers  decision  on  AVCPs claim  of  implied  contractual

indemnity because Vranckaert is entitled to judgment as a  matter

of law on that claim.  In addition, to the extent that the breach

of  contract  and  negligence  claims  seek  implied  contractual

indemnification for amounts that AVCP paid in settlement  to  the

two  groups  of  plaintiffs or for AVCPs defense  costs  in  that

litigation,  we conclude that Vranckaert is entitled to  judgment

in its favor.

II.  FACTS AND PROCEEDINGS

          In  1991  Vranckaert installed gas  kitchen  ranges  in

twelve apartments under a contract with AVCP to construct new low-

income housing units in Bethel.  For purposes of this proceeding,

Vranckaert  admits that its workers failed to  properly  fit  the

stoves  for propane gas.  Beginning in August 1992, tenants  made

numerous  complaints  to  AVCP about the  stoves  and  ovens  not

working  properly.   Between May 1994  and  September  1997  AVCP

received   thirty-five  service  requests  from  ten   apartments

relating  to problems with the stoves and ovens.  AVCP  generally

responded to these complaints by repairing the stove or  oven  in

question.

          In  October  and  November 1995  several  tenants  from

different   apartments   called  the   Bethel   Fire   Department

complaining of nausea and headaches and reporting gas  odors  and

sounding  carbon  monoxide alarms.  The fire department  directed

AVCP to repair the gas leaks on November 22, 1995, after it found

excessive  carbon  monoxide levels in several apartments.   AVCPs

executive  director, Don Fancher, agreed to  install  proper  gas

orifices  in  the  stoves and carbon monoxide detectors  in  each

apartment by the following day.

          On  December 1, 1995, after receiving additional  calls

regarding possible gas leaks from tenants, the fire chief wrote a

second  letter  to Fancher, stating that the fire department  had

received  three  calls from the same apartment  reporting  unsafe

carbon  monoxide levels and had heard no word from AVCP regarding

replacement  of  the orifices.  It is unclear  when  or  if  AVCP

replaced the orifices.  Through 1997 tenants continued to  report

strong  propane  odors,  problems with  the  operation  of  their

stoves, and sounding carbon monoxide alarms.

          Tenants  known  as  the Nilsson plaintiffs  sued  AVCP,

claiming injury as a result of exposure to carbon monoxide.  AVCP

then  filed a third-party complaint against Vranckaert,  alleging

that  Vranckaert  had negligently installed  propane  stoves  and

seeking  equitable apportionment of damages.  AVCP  settled  with

the  Nilsson plaintiffs after mediation.  The Nilsson  plaintiffs

were  granted leave to amend their complaint to assert  a  direct

cause  of  action  against Vranckaert after they discovered  that

Vranckaert   had  insurance  coverage.   Vranckaert  subsequently

settled with the Nilsson plaintiffs.

          AVCP  then  sought  to amend its third-party  complaint

against  Vranckaert  to include a claim of  equitable  indemnity.

Judge  Dale  O. Curda denied AVCPs motion to amend and  dismissed

AVCP  from  the Nilsson suit, reasoning that as Alaska  does  not

recognize  non-contractual indemnity . . .  ,  AVCP-RHA  has  not

asserted  a  viable cause of action.  Tort Reform  focuses  on  a

relative allocation of the fault between the alleged tortfeasors.

(Internal  citations  omitted.)  Relying on Carriere  v.  Cominco

Alaska, Inc.,1 Judge Curda determined that a cause of action  for

implied indemnity does not exist under Alaska law.

          Rather than appeal Judge Curdas decision, AVCP filed  a

new  lawsuit against Vranckaert.  AVCP asserted claims of express

contractual  indemnity, implied contractual indemnity,  indemnity

for  passive  negligence,  breach of  contract,  and  negligence.

Vranckaert  moved  for summary judgment.   Judge  Karen  L.  Hunt

granted the motion on the ground that the new claims were  barred

by  res judicata because Judge Curda had already decided the same

indemnity claims.  She reasoned:

          Although  the  present complaint  gives  more
          detail  about  the underlying  circumstances,
          the  events alleged by AVCP in this case  are
          the  same events plead by AVCP in its  third-
          party complaint in the consolidated [Nilsson]
          cases.  .  . .  [A] mere change in the  legal
          theory asserted as a ground for recovery will
          not  avoid  the  preclusive effect  of  [the]
          judgment.[2]
          
AVCP appeals that decision.

          We  consolidated AVCPs appeal in the Nilsson case3 with

Vranckaerts petition for review in the Engler case,4  which arose

out  of  the  following facts.  A second group  of  tenants,  the

Engler  plaintiffs, sued AVCP and Vranckaert  after  the  Nilsson

plaintiffs  had  settled  their claims.   The  Engler  plaintiffs

asserted  the  same  claims  that  the  Nilsson  plaintiffs   had

asserted: negligence, breach of contract, failure to maintain fit

premises, strict liability, and breach of the implied warranty of

habitability.

          AVCP  filed  a  third-party complaint  and  cross-claim

against  Vranckaert,  asserting claims  of  express  and  implied

contractual  indemnity, indemnity for passive negligence,  breach

of  contract,  and  negligence.  These claims were  identical  to

those  which Judge Hunt ruled were barred by res judicata because

of  Judge  Curdas decision.  Vranckaert settled with  the  Engler

plaintiffs,  and  they released Vranckaert from  liability.   The

Engler plaintiffs released AVCP from liability only to the extent

that  AVCP-RHA  may  be vicariously liable  for  the  actions  of

Vranckaert and its partners.  AVCP subsequently settled with  the

Engler plaintiffs.

          Vranckaert  then  filed a motion for summary  judgment.

In  ruling on AVCPs third-party complaint and cross-claim against

Vranckaert  in  the  Engler  suit, Judge  Niesje  J.  Steinkruger

reached a different conclusion than Judge Hunt on the question of

whether  summary  judgment should be granted on  AVCPs  indemnity

claims.   Relying  on the doctrine of collateral estoppel  rather

than  res judicata, Judge Steinkruger concluded that Judge Curdas

decision   did  not  bar  the  express  and  implied  contractual

indemnity  claims.   She  reasoned  that  these  claims  are  not

identical  to  equitable indemnity because  express  and  implied

          contractual indemnity require proof of a contract, whereas

equitable  indemnity does not.  However, just as Judge  Hunt  had

concluded,  Judge  Steinkruger ruled that the passive  negligence

claim  was  barred because it is the same claim as the  equitable

indemnity  claim  brought in the Nilsson case, albeit  [under]  a

different name.

          Although  Judge  Steinkruger found  that  Judge  Curdas

decision  did  not  preclude AVCPs express contractual  indemnity

claim,  she ruled that Vranckaert was entitled to judgment  as  a

matter  of  law on that claim.  Judge Steinkruger denied  summary

judgment  on the claims of implied contractual indemnity,  breach

of contract, and negligence.

          The  decisions  of  Judges Steinkruger  and  Hunt  thus

conflict  on  the issue of whether AVCPs claims  of  express  and

implied contractual indemnity, breach of contract, and negligence

are barred by Judge Curdas decision.  Judge Steinkruger permitted

AVCPs   claims  of  implied  contractual  indemnity,  breach   of

contract,  and  negligence to go forward, in  contrast  to  Judge

Hunts decision that all of AVCPs indemnity claims were barred  by

Judge  Curdas  decision.   We granted  Vranckaerts  petition  for

review  of  Judge  Steinkrugers ruling and consolidated  it  with

AVCPs appeal from Judge Hunts decision.

III. DISCUSSION

     A.   Standard of Review

          The  issues before us are (1) whether the doctrines  of

res  judicata or collateral estoppel bar any of AVCPs claims; and

(2)  whether judgment as a matter of law is otherwise  proper  on

any  of  AVCPs  claims.  We review a grant or denial  of  summary

judgment  de  novo.5   A  moving party  is  entitled  to  summary

judgment  if  no  genuine issue of material fact exists  and  the

movant  is entitled to judgment as a matter of law.6  We are  not

bound by the reasoning articulated by the superior court and  can

affirm  a  grant  of  summary judgment  on  alternative  grounds,

including  grounds  not  advanced by the superior  court  or  the

          parties.7  The applicability of estoppel principles to a

particular  set  of  facts  is a legal  question  over  which  we

exercise independent review.8

     B.   The  Doctrines of Res Judicata and Collateral  Estoppel
          Bar AVCPs Claim of Passive Negligence.
          
          Judge Hunt ruled that AVCPs five indemnity claims  were

barred  by  the doctrine of res judicata because Judge Curda  had

already  decided the same claims.  We have held that [u]nder  the

doctrine  of res judicata, a judgment in a prior action  operates

as  a bar to a subsequent action if (1) the prior judgment was  a

final   judgment  on  the  merits,  (2)  a  court  of   competent

jurisdiction rendered the prior judgment, and (3) the same  cause

of action and same parties or their privies were involved in both

suits.9

          Judge  Steinkruger held that the doctrine of collateral

estoppel  did  not  bar  AVCPs express  and  implied  contractual

indemnity  claims  but  did bar AVCPs passive  negligence  claim.

Collateral estoppel or issue preclusion bars the relitigation  of

an issue where:

          (1)  the party against whom the preclusion is
          employed was a party to or in privity with  a
          party  to  the  first action; (2)  the  issue
          precluded  from relitigation is identical  to
          the  issue  decided in the first action;  (3)
          the issue was resolved in the first action by
          a  final judgment on the merits; and (4)  the
          determination of the issue was  essential  to
          the final judgment.[10]
          
          Both  doctrines  are  founded upon the  principle  that

parties ought not to be permitted to litigate the same issue more

than  once  and  that  when a right or fact has  been  judicially

determined by a court of competent jurisdiction or an opportunity

for such trial has been given, the judgment of the court, so long

as it remains unreversed, should be conclusive upon the parties.11

The earlier judgment in question here is Judge Curdas decision in

the  Bethel  trial  court  denying  AVCPs  motion  to  amend  its

complaint   to  assert  an  equitable  indemnity  claim   against

          Vranckaert.

          The  parties do not dispute that the Bethel trial court

is  a  court  of  competent jurisdiction, nor  do  they  question

whether  Judge Curdas involuntary dismissal of AVCP  is  a  final

judgment.   The  crux of the dispute before  us  is  whether  the

causes of action or issues before Judges Steinkruger and Hunt had

already been litigated before Judge Curda.

          Vranckaert  argues  that  all  five  indemnity   claims

asserted  by  AVCP  are barred by the doctrine  of  res  judicata

because  they arise out of the same transaction as the  equitable

indemnity claim.12  Vranckaert maintains that AVCPs pleadings  in

Nilsson  indicate  that AVCP did not limit itself  to  claims  of

legal  indemnity.   Rather, Vranckaert argues,  AVCPs  motion  to

amend  to  include an equitable indemnity claim also contemplated

claims  of  express and implied contractual indemnity, and  Judge

Curda  ruled  on those claims.  Therefore, Vranckaert  concludes,

AVCPs contract-based indemnity claims are barred by res judicata.

          We  conclude  that Judge Curda issued a final  decision

only on the merits of AVCPs equitable indemnity claim.  In ruling

that  equitable indemnity is not a viable cause of action,  Judge

Curda  distinguished the cases cited by AVCP in  support  of  the

viability of its equitable indemnity claim as relying on contract

theory and equitable apportionment.  Judge Curda quoted Benner v.

Wichman,  in which this court held that despite our rejection  of

equitable  indemnity  in  Vertecs, we certainly  did  not  reject

contractual  indemnity.13  Judge Curdas citation  of  contractual

indemnity cases to distinguish the equitable indemnity claim does

not  amount  to  a  decision on the merits of the  contract-based

indemnity  claims.  We interpret Judge Curdas decision as  merely

noting  that while contractual indemnity may constitute a  viable

cause of action in Alaska, equitable indemnity cannot.  AVCPs use

of  the  more  general term indemnity in its pleadings  does  not

alter our conclusion that Judge Curda ruled only on the merits of

the equitable indemnity cause of action.

          Judge  Steinkruger was correct in concluding that AVCPs

passive  negligence claim was adjudicated by  Judge  Curda.   She

reasoned:

          Since  the  claim for indemnity  for  passive
          negligence is the same claim as the equitable
          indemnity claim brought in the Nilsson  case,
          albeit [under] a different name, the doctrine
          of collateral estoppel should bar this claim,
          because  the  claim was disposed  of  on  its
          merits in a court of competent jurisdiction.
          
And  counsel for AVCP conceded at oral argument before this court

that AVCPs passive negligence claim was the same as the equitable

indemnity claim that Judge Curda dismissed.

          We also agree with Judge Steinkruger that AVCPs express

and  implied  contractual indemnity claims are  not  collaterally

estopped  because they do not require relitigation  of  an  issue

identical  to those issues resolved by Judge Curda.  Express  and

implied  contractual indemnity claims require proof of a contract

to indemnify, whereas equitable indemnity is based on concepts of

equity.14   Having concluded that only AVCPs equitable  indemnity

and passive negligence claims were adjudicated by Judge Curda, we

now  turn to an examination of whether summary judgment is proper

on  the  other  four  claims on any basis other  than  collateral

estoppel or res judicata.15

     C.   Vranckaert Is Entitled to Judgment as a Matter  of  Law
          on  AVCPs  Claims  of  Express  Contractual  Indemnity,
          Implied Contractual Indemnity, Breach of Contract,  and
          Negligence.
          
          1.   Express contractual indemnity

          Judge  Steinkruger granted Vranckaert summary  judgment
on   AVCPs   claim  of  express  contractual  indemnity.    Judge
Steinkruger  reasoned that the contract for the  construction  of
the  Bethel  housing units between AVCP and Vranckaert  does  not
unequivocally  provide that Vranckaert agreed to  indemnify  AVCP
for AVCPs own negligence:
          [Paragraph   26   of  the  contract   between
          Vranckaert  and AVCP] does not  indicate,  as
          AVCP  asserts,  that  Vranckaert  agreed   to
          indemnify AVCP for AVCPs own negligence. .  .
          .
          
               AVCP  nonetheless asserts that there  is
          still a genuine issue of material fact as  to
          its  negligence  against the plaintiffs,  and
          that  it is likely a jury would allocate 100%
          of  the fault to Vranckaert.  While this  may
          be  a  potential outcome, it does not  change
          the fact that Vranckaert already settled with
          the  plaintiffs for its negligence.  Nor does
          it   change  the  fact  that  AVCP  has  been
          released   from   vicarious   liability   for
          Vranckaerts actions.
          
We agree that Vranckaert is entitled to judgment on this claim as

a matter of law.

          In a construction contract, the unambiguous language of

an  indemnity  clause  as reasonably construed  should  be  given

effect.16   Where,  as  here,  there  is  no  dispute  about  the

surrounding circumstances of the contract, interpretation of  the

language  of  an  indemnity  clause is  a  question  of  law  and

appropriate to determine on summary judgment.17  Paragraph 26  of

the  contract  between  Vranckaert and  AVCP  provides  that  the

Contractor, Vranckaert, shall be responsible for all  damages  to

persons  or  property  that occur as a result  of  its  fault  or

negligence in connection with the prosecution of the work . . . .

(Emphasis  added.)  This provision merely states that  Vranckaert

will be responsible for its own fault or negligence, not that  it

will indemnify AVCP if AVCP acts negligently.18  Because its fault

or  negligence  qualified  Vranckaerts  undertaking,  the  clause

cannot  be  read  to  cover AVCPs negligence.   We  affirm  Judge

Steinkrugers order granting summary judgment to Vranckaert on the

express indemnity claim.

          2.   Implied contractual indemnity

          AVCP also alleges that Vranckaert failed in its implied

duty under the contract to perform the construction contract in a

non-negligent manner.  In Fairbanks North Star Borough v.  Kandik

Construction  &  Associates,  we concluded  that  an  action  for

implied  contractual  indemnity rests on  the  principle  that  a

contract to perform a service contains an implied promise: 1) the

          indemnitor will perform the service in a proper manner, or 2) the

indemnitor  will  discharge foreseeable  damages  resulting  from

improper performance, unless 3) the indemnitees own participation

in causing the damages precludes recovery.19  Implied contractual

indemnity  is  grounded  on the principle  that  the  indemnitors

agreement to perform a contract necessarily implies an obligation

to  perform  in  a  proper  manner and to  discharge  foreseeable

damages  resulting to the plaintiff as a result of its  breach.20

It is not based on equitable considerations.21

          In  Vertecs Corp. v. Reichhold Chemicals, a  case  that

predates  the current several liability statute,22 we  held  that

Alaska does not recognize a cause of action for implied indemnity

between   concurrently  negligent  tortfeasors.23   We   rejected

Vertecss  argument that the common law would allow  indemnity  in

any  situation  wherein  one  tortfeasors  conduct  was  not   as

blameworthy as anothers and it would be just and fair as  between

the parties that the entire loss fall upon the indemnitor.24   We

determined  that  adoption of Vertecss position would  impose  on

courts  the  difficult  task of determining  what  cases  justify

implied indemnity among concurrently negligent tortfeasors, would

undermine the modern tort law goal of having each tortfeasor  pay

for  the  damages  attributable to its own tortious  acts,  would

discourage settlement, and would be judicially inefficient.25  The

same  public  policy considerations dictate our  conclusion  that

AVCP may not recover on a theory of implied contractual indemnity

from  Vranckaert; the plaintiffs had fault-based  claims  pending

against AVCP, and AVCPs settlement was to resolve a dispute about

its   own   negligence  rather  than  to  extinguish  Vranckaerts

liability.

          Section  22  of  the  Restatement  (Third)  of   Torts:

Apportionment  of Liability (1999) supports our  conclusion.   It

requires  the  indemnitee  to extinguish  the  liability  of  the

indemnitor,  by  settlement or judgment,  to  collect  indemnity.

Section 22 provides:

          (a)   When two or more persons are or may  be
          liable  for  the same harm and  one  of  them
          discharges the liability of another in  whole
          or  in  part  by settlement or  discharge  of
          judgment,   the   person   discharging    the
          liability is entitled to recover indemnity in
          the   amount  paid  to  the  plaintiff,  plus
          reasonable legal expenses, if:
          
               (1)    the  indemnitor  has  agreed   by
               contract to indemnify the indemnitee, or
               
               (2)  the indemnitee
               
                    (i)     was   not   liable   except
                    vicariously  for the  tort  of  the
                    indemnitor or
                    
                    (ii)  was  not liable except  as  a
                    seller of a product supplied to the
                    indemnitee  by  the indemnitor  and
                    the      indemnitee     was     not
                    independently culpable.
                    
(Emphasis added.)  Comment b to section 22 explains:

          [A]n indemnitee must extinguish the liability
          of  the indemnitor to collect indemnity.  The
          indemnitee  may do so either by a  settlement
          with  the plaintiff that by its terms  or  by
          application of law discharges the  indemnitor
          from liability or by satisfaction of judgment
          that  by  operation  of  law  discharges  the
          indemnitor from liability.
          
(Emphasis added.)

          The   theory  behind  these  provisions  is  that   the

indemnitee  has  provided a benefit to the  indemnitor  by  fully

discharging   the   indemnitors  liability,  making   restitution

appropriate.26  Such a benefit is conferred only if the indemnitee

guarantees  that the indemnitor is protected from further  claims

by the plaintiffs that the indemnitor is liable.27  To hold that a

party  must indemnify another while the party is still liable  to

the   plaintiffs  would  lead  to  the  unjust  result  that  the

indemnitor could face double liability.28  It would also eliminate

any  incentive for parties to settle since settlement  would  not

limit  the  indemnitors exposure.29  The Restatement  (Third)  of

Torts:   Apportionment  of  Liability   22  and  Comment  b   are

consistent   with   AS   09.17.080,  which   provides   for   the

          apportionment of a damages award against a party according to the

factfinders allocation of that partys fault.30

          We  conclude  that AVCPs implied contractual  indemnity

claim  must  fail under our reasoning in Vertecs  and  under  the

Restatement  (Third)  of  Torts  22.   To  recover  damages  from

Vranckaert on an implied contractual indemnity theory, AVCP  must

not   itself  have  been  liable,  except  vicariously,  to   the

plaintiffs and must have obtained from the plaintiffs  a  release

of  liability  for  all  direct claims that  the  plaintiffs  had

against  Vranckaert.  AVCP did not pay the Engler  plaintiffs  to

settle  the Engler plaintiffs claims against Vranckaert.  Indeed,

the  record  indicates  that the Engler  plaintiffs  had  already

settled  with Vranckaert and had released AVCP from any vicarious

liability claims it was asserting.  In their settlement agreement

with  Vranckaert,  the Engler plaintiffs expressly  reserved  all

claims  which have been made or which may in the future  be  made

against [AVCP].  Only fault-based claims remained against AVCP at

the time AVCP settled with the Engler plaintiffs.  Therefore, the

AVCP   settlement  included,  at  least  in  part,   payment   in

consideration  for the plaintiffs release of claims  relating  to

AVCPs own negligence.

          Neither   did   AVCPs  settlement  with   the   Nilsson

plaintiffs  effect  a  settlement  of  the  claims  the   Nilsson

plaintiffs  had  against  Vranckaert.  The  settlement  agreement

makes  no mention of Vranckaert.  The agreement clearly indicates

that  its  purpose  is to settle direct claims  asserted  by  the

plaintiffs  against AVCP as a landlord:  Despite numerous  tenant

complaints and repeated warnings from the Bethel Fire Department,

AVCP-RHA unreasonably and without justification failed to correct

this  problem  in  a timely manner.  And even if  AVCP  had  paid

damages  to  the  Nilsson  plaintiffs  for  injuries  caused   by

Vranckaert,  AVCP  failed  to obtain  a  release  of  Vranckaerts

liability from the Nilsson plaintiffs.

          Without  a  release of liability, Vranckaert  was  left

          exposed to pay directly to the plaintiffs its own share of the

damages.   Indeed, Vranckaert did subsequently  settle  with  the

Nilsson plaintiffs.  If we were to conclude that Vranckaert  must

indemnify AVCP, Vranckaert would pay twice for the same  injuries

to  the same plaintiffs.  Because AVCP failed to obtain a release

of  liability  for Vranckaert and because AVCPs settlements  with

both  groups  of plaintiffs only discharged AVCPs  own  share  of

fault, AVCP is not entitled to implied contractual indemnity.

          3.   Negligence and breach of contract

          AVCP  argues that its negligence and breach of contract

claims against Vranckaert are not precluded because they were not

resolved  by  Judge Curda and are independent  of  its  indemnity

claims.  Vranckaert responds that these two causes of action  are

indemnity  claims in disguise.  Therefore, Vranckaert  maintains,

the claims are subject to dismissal on summary judgment.

          A  review of AVCPs third-party complaint and its cross-

claim  against  Vranckaert in the Engler suit reveals  that  AVCP

apparently  seeks  damages only in the amount  that  it  paid  in

settlement  to  the  plaintiffs and for the  fees  and  costs  it

incurred  in  defending  against the Nilsson  plaintiffs  claims.

AVCPs prayer for relief in its cross-claim states in full:

               1.   For indemnification from defendants
          Vranckaert/Kuukpik for any damages awarded to
          plaintiffs against AVCP-RHA;
          
               2.   For indemnification from defendants
          Vranckaert/Kuukpik for any settlement  amount
          paid  to plaintiffs as a result of plaintiffs
          claims against AVCP-RHA;
          
               3.   For indemnification from defendants
          Vranckaert/Kuukpik  for all  fees  and  costs
          incurred  by  AVCP-RHA in  defending  against
          plaintiffs claims; and
          
               4.    For  such other and further relief
          as the court deems just and equitable.
          
Similarly,  in  its complaint against Vranckaert after  AVCP  was

dismissed   from  the  Nilsson  suit,  AVCP  prays   only   [f]or

indemnification  from  defendants for the $850,000.00  settlement

amount  paid to the Nilsson plaintiffs as a result of the Nilsson

plaintiffs  claims  against AVCP-RHA and for indemnification  for

all  fees and costs incurred by AVCP-RHA in defending against the

Nilsson plaintiffs claims.

          In  its  opposition to Vranckaerts motion  for  summary

judgment,  AVCP  alleged  that  Vranckaert  breached   both   the

contractual  standard  of care and duty  to  indemnify  AVCP  for

damages resulting from Vranckaerts negligent performance  of  the

contract.   To the extent that the claims for breach of  contract

and  negligence seek to recover from Vranckaert the  amount  that

AVCP  paid  in settlement to the Nilsson or Engler plaintiffs  or

the  fees  or  costs  incurred in defending these  lawsuits,  the

claims  are  not  permitted.31  As  discussed  above,  under  our

reasoning in Vertecs and under the Restatement (Third) of  Torts:

Apportionment  of  Liability  22, AVCPs breach  of  contract  and

negligence claims must fail because they are, in essence, implied

contractual indemnity claims and AVCP failed to demonstrate  that

it  was  without  fault and that it settled  the  claims  against

Vranckaert  and  obtained  from  the  plaintiffs  a  release   of

Vranckaerts liability.

IV.  CONCLUSION

          We  AFFIRM  the rulings of Judge Steinkruger and  Judge

Hunt that AVCPs  claim of passive negligence is precluded because

it  is  the  same claim as the claim of equitable indemnity.   We

also  AFFIRM  Judge  Steinkrugers  ruling  that  Vranckaert   was

entitled to judgment as a matter of law on AVCPs claim of express

contractual   indemnity.    Because  AVCPs   claim   of   implied

contractual  indemnity must fail as a matter of law,  we  REVERSE

Judge   Steinkrugers   decision  denying  summary   judgment   to

Vranckaert  on  that claim.  Finally, to the  extent  that  AVCPs

remaining  claims  of  negligence and  breach  of  contract  seek

damages  in  the amount that AVCP paid in settlement to  the  two

groups  of plaintiffs or its costs and fees in defending the  two

suits  by  the plaintiffs, these claims are, in essence,  implied

          contractual indemnity claims.  AVCP failed to obtain from the

plaintiffs  a  release of Vranckaerts liability as  part  of  the

settlement  and failed to show that it was not itself  at  fault.

Therefore,  we  REVERSE Judge Steinkrugers  decision  as  to  the

negligence  and  breach  of  contract claims  and  conclude  that

Vranckaert was entitled to judgment as a matter of law.  Although

we  disagree  with Judge Hunt that Judge Curda adjudicated  AVCPs

indemnity claims, for the foregoing reasons we AFFIRM Judge Hunts

order  granting Vranckaert summary judgment on all five indemnity

claims.

_______________________________
     1    823 F. Supp. 680, 688 (D. Alaska 1993).

     2     Quoting  Donnelly v. Eklutna, Inc., 973  P.2d  87,  91
(Alaska 1999).

     3    AVCP Regional Housing Authority v. R.A. Vranckaert Co.,
Supreme  Court Case No. S-09872, Superior Court Case No.  3AN-99-
11339 CI.

     4    R.A. Vranckaert Co. v. AVCP Regional Housing Authority,
Supreme  Court Case No. S-09893, Superior Court Case No.  4BE-99-
0058 CI.

     5     United  Airlines, Inc. v. Good Taste, Inc.,  982  P.2d
1259,  1262 (Alaska 1999); Jackinsky v. Jackinsky, 894 P.2d  650,
654 (Alaska 1995).

     6     Alaska R. Civ. P. 56(c); see also Jackinsky, 894  P.2d
at 654.

     7     Hoffman  Constr. Co. of Alaska v. U.S.  Fabrication  &
Erection, Inc., 32 P.3d 346, 351 (Alaska 2001).

     8     Powers  v. United Servs. Auto. Assn, 6 P.3d  294,  297
(Alaska 2000).

     9     White v. State, Dept of Natural Res., 14 P.3d 956, 959
(Alaska 2000).

     10    Powers, 6 P.3d at 297.

     11     Campion  v. State, Dept of Cmty. & Regl Affairs,  876
P.2d 1096, 1101 (Alaska 1994) (internal citation omitted).

     12     The  five  indemnity claims that  AVCP  asserts  are:
implied  contractual  indemnity, express  contractual  indemnity,
indemnity  for  passive  negligence,  breach  of  contract,   and
negligence.

     13     874 P.2d 949, 956 (Alaska 1994) (citing Vertecs Corp.
v. Reichhold Chems., Inc., 661 P.2d 619, 625-26 (Alaska 1983)).

     14    See Fairbanks N. Star Borough v. Kandik Constr., Inc. &
Assocs.,  823  P.2d 632, 636 (Alaska 1991) (holding that  implied
contractual  indemnity  .  . . rests  on  the  principle  that  a
contract  to  perform  a service contains  a  three-part  implied
promise); Heritage v. Pioneer Brokerage & Sales, Inc.,  604  P.2d
1059,   1067   (Alaska  1979)  (describing  express   contractual
indemnity as a duty to indemnify [that] arises under contract).

     15    The parties dispute whether AVCP was required to bring
all  of  its  indemnity claims when it moved to amend its  third-
party  complaint in Nilsson.  Because we conclude that Vranckaert
is  entitled  to  judgment as a matter of law on AVCPs  indemnity
claims, we need not reach this issue.

     16     C.J.M. Constr., Inc. v. Chandler Plumbing &  Heating,
Inc., 708 P.2d 60 (Alaska 1985); Manson-Osberg Co. v. State,  552
P.2d  654,  659  (Alaska 1976); see also Burgess Constr.  Co.  v.
State, 614 P.2d 1380 (Alaska 1980).

     17     See  C.J.M.  Constr., 708 P.2d at 63; Earthmovers  of
Fairbanks, Inc. v. State, 644 P.2d 238, 239 (Alaska 1982).

     18     See City & Borough of Juneau v. Alaska Elec. Light  &
Power  Co.,  622 P.2d 954, 956 (Alaska 1981) (holding that  where
the  scope of the indemnity requirement is modified by the phrase
resulting  from  negligence on the part of the [indemnitor],  the
phrase  cannot  reasonably be construed  as  intending  that  the
indemnitor  indemnify  the indemnitee  for  the  indemnitees  own
negligence).

     19    823 P.2d 632, 636 (Alaska 1991).

     20     Fairbanks N. Star Borough v. Kandik Constr.,  Inc.  &
Assocs.,  795  P.2d  793, 804 (Alaska 1990)  (citing  Bear  Creek
Planning Commn v. Title Ins. & Trust Co., 211 Cal. Rptr. 172, 178
(Cal. App. 1985)).

     21    Id. (quoting Bear Creek Planning Commn, 211 Cal. Rptr.
at 180).

     22    AS 09.17.080.

     23     661 P.2d 619, 626 (Alaska 1983), superseded on  other
grounds by statute as stated in Benner v. Wichman, 874 P.2d  949,
956  (Alaska  1994) (holding that the 1987 ballot initiative  did
away  with  one  category of claims  contribution.   It  did  not
purport  to  abolish all claims between defendants and  potential
third-party  defendants.  For example, despite our  rejection  of
equitable  indemnity  in  Vertecs, we certainly  did  not  reject
contractual indemnity.).

     24    Id. at 621.

     25    Id. at 624-25.

     26      Restatement  (Third)  of  Torts:  Apportionment   of
Liability  22 Reporters Note cmt. b (1999).

     27    Id.

     28    Id.

     29    Vertecs, 661 P.2d at 625.

     30    AS 09.17.080 on [a]pportionment of damages provides:

               (a)   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  or, if  there  is  no  jury,
          shall make findings, indicating
          
               (1)  the amount of damages each claimant
          would  be entitled to recover if contributory
          fault is disregarded; and
          
               (2)   the percentage of the total  fault
          that   is   allocated   to   each   claimant,
          defendant, third-party defendant, person  who
          has  been  released from liability, or  other
          person responsible for the damages unless the
          person   was   identified  as  a  potentially
          responsible  person,  the  person  is  not  a
          person protected from a civil action under AS
          09.10.055,  and the parties had a  sufficient
          opportunity to join that person in the action
          but chose not to; . . .
          
          . . . .

               (b)   In determining the percentages  of
          fault, the trier of fact shall consider  both
          the  nature of the conduct of each person  at
          fault,  and the extent of the causal relation
          between the conduct and the damages claimed.
          
               (c)  The court shall determine the award
          of  damages  to  each claimant in  accordance
          with  the findings and enter judgment against
          each  party  liable.  The  court  also  shall
          determine  and  state in  the  judgment  each
          partys  equitable share of the obligation  to
          each   claimant   in  accordance   with   the
          respective percentages of fault as determined
          under (a) of this section. Except as provided
          under  AS  23.30.015(g), an assessment  of  a
          percentage of fault against a person  who  is
          not a party may only be used as a measure for
          accurately  determining  the  percentages  of
          fault  of  a  named party.  Assessment  of  a
          percentage of fault against a person  who  is
          not  a party does not subject that person  to
          civil liability in that action and may not be
          used  as  evidence  of  civil  liability   in
          another action.
          
               (d)   The  court  shall  enter  judgment
          against  each  party liable on the  basis  of
          several  liability  in accordance  with  that
          partys percentage of fault.
          
     31     At oral argument before us, counsel for AVCP asserted
that  its  negligence  and breach of contract  claims  were  also
designed  to  recover damages for AVCPs impugned reputation,  the
repair  work on the stoves, and the cost of replacing the stoves.
The merits of these potential direct claims are not before us.