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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Collins v. Blair (8/9/2002) sp-5606

Collins v. Blair (8/9/2002) sp-5606

     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.


            THE SUPREME COURT OF THE STATE OF ALASKA

RALPH COLLINS, CORNELIA            )
COLLINS, RONALD COLLINS, and  )
ERIC W. COLLINS,                        )
                              )    Supreme Court No. S-9810
             Appellants,      )
                              )    Superior Court No.
     v.                       )    3AN-96-7333 CI
                              )
ANDREW BLAIR, TRINA M. BLAIR, )
RICKY BLAIR, and F/V PREDATOR,     )
INC.,                                                  )    O P I
                              N I O N
                              )
             Appellees.                  )     [No. 5606 - August
                              9, 2002]
________________________________)

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

          Appearances:  Melvin M. Stephens, II, Kodiak,
          for  Appellants.   Paul  D.  Kelly,  Kelly  &
          Patterson, Anchorage, for Appellees.

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

          CARPENETI, Justice.

I.   INTRODUCTION

          I.    Andy Blair and Ralph Collins began their business

relationship in 1987 when Blair chartered Collinss  boat.   Blair

bought  the  boat  two  years later, along with  an  undetermined

interest  in  prospective fishing rights.  A dispute  over  these

fishing rights arose in 1994 and the parties entered into a joint

venture, forming a closely held corporation.  After more problems

with   fishing  rights  and  a  general  deterioration   in   the

relationship,  Blair  petitioned the  court  for  an  involuntary

dissolution   of  the  corporation.   The  court  dissolved   the

corporation and ordered a distribution of assets that followed  a

proposal  submitted by Blair.  Collins appeals from  this  order.

Because  the  trial  courts  factual  findings  are  not  clearly

erroneous, we affirm the order of dissolution.  However,  because

Blair  used  corporate funds to pay both corporate  and  personal

legal  bills,  we  reverse  the superior  courts  order  awarding

attorneys fees and remand for an allocation between corporate and

personal services.

II.  FACTS AND PROCEEDINGS

     A.   Facts

          In  1987  Andy Blair chartered the F/V Milky  Way  from

Ralph Collins.  Included in the charter was an option to purchase

the  vessel  (option  agreement).  Paragraph  21  of  the  option

provided  for  the transfer of fishing rights for halibut  and/or

black  cod  (sablefish)  if a limited entry  permit  system  were

instituted   by  federal  authorities.1   In  1989,  when   Blair

purchased  the F/V Milky Way from Collins, the purchase agreement

referred to the option agreement as being the entire agreement of

the   parties,   regardless   of  any   collateral,   prior,   or

contemporaneous agreements.

          In  1995  the federal government adopted a  program  to

regulate the halibut and black cod fisheries in Alaska through an

Individual  Fishing  Quota (IFQ) system.  To  implement  the  IFQ

program, applications were sent to each vessel owner or charterer

who had a fishing history in the qualified fisheries for each  of

the  years 1984 through 1990.  Blair received an application  for

the  F/V  Milky Way for the years 1988 to 1990.  Collins received

an  application for the F/V Milky Way that covered the years 1984

through  1987.   The  National Marine  Fisheries  Service  (NMFS)

awarded IFQs based on the F/V Milky Ways catch to Blair (based on

his  catch from 1988 to 1990) and to Collins (based on his  catch

from 1984 to1987).

          As  paragraph  21 of the option agreement provided  for

          the transfer of the F/V Milky Ways fishing rights, the court

found  at trial that there was conflict between Blair and Collins

over  the  pre-1988 quota shares allocated to the F/V  Milky  Way

under the IFQ program.  Blair contacted attorney Joe Sullivan  to

determine the best way to recover the pre-1988 shares to which he

felt  he  was  entitled.  Sullivan suggested  that,  rather  than

contest  his claim through expensive litigation, Blair  pursue  a

joint venture with Collins.

          In  1994 Blair and Collins entered into an agreement to

begin  a  joint  venture.  The agreement, an intent  to  purchase

drafted  and signed without counsel, stated that Collins intended

to  purchase a 50% interest in the F/V Milky Way and that Collins

and  Blair  were  to combine their halibut and sablefish  shares.

The parties approached attorney Sullivan to prepare the paperwork

to  implement their joint fishing venture.  They chose to do this

through  F/V  Predator,  Inc.  (the corporation),  a  corporation

previously formed by Collins that was eligible to hold IFQs.  The

corporation was chosen because the IFQ regulations required  that

IFQ  transfers be made only to an entity that existed during  the

qualifying  period,  and the corporation  met  this  requirement.

Collins  represented that the F/V Predator (a fishing  boat,  not

the  corporation) had companion fished with the  F/V  Milky  Way.

The  boats  quota shares, Collins maintained, would therefore  be

about equal.

          Blair  agreed to transfer his post-1988 F/V  Milky  Way

shares to the corporation.  Collins had F/V Predator shares  that

he  was  going  to  issue  to  the  corporation.   Neither  party

specified  how  many  shares  he  would  contribute.   After  the

corporation  received a loan from the bank, Collins  purchased  a

50%  interest  in the F/V Milky Way and the accompanying  fishing

rights.   The  F/V Milky Way was then transferred to  the  newly-

formed corporation.

          Blair  never transferred his F/V Milky Way quota shares

to  the  corporation due to a dispute with NMFS over the division

of shares between his catch on the F/V Milky Way and his catch on

his  other  boat.   Blair did, however, fish his  F/V  Milky  Way

shares  on  the F/V Milky Way in 1995 and deposited all  proceeds

into the corporations bank account.

          When Collins had his F/V Predator shares issued to  the

corporation,  he  became ineligible to personally  receive  other

quota  shares  (the  lost shares) to which  he  would  have  been

entitled.   After talking with NMFS about a way  to  rectify  the

situation,  Collins  transferred to himself  personally  the  F/V

Predator  shares  that had been issued to the corporation.   NMFS

then  issued Collins his lost shares.  Collins apprised Blair  of

his  actions and gave him the F/V Predator shares to fish on  the

F/V Milky Way.  Although Blair fished the F/V Predator shares  in

1995,   he  had  Sullivan  contact  Collins  on  behalf  of   the

corporation  and himself requesting that Collins  return  to  the

corporation   the   shares  Collins  had   withdrawn.    Sullivan

eventually  forced the transfer of Collinss shares  back  to  the

corporation.   Upon the return of the shares to the  corporation,

NMFS revoked Collinss lost shares.

     B.   Proceedings

          A.   In September 1996 Blair filed suit in superior court

alleging  that  Collinss action in withdrawing the  F/V  Predator

shares  from  the corporation was a breach of Collinss  fiduciary

duty.  He requested an accounting and reimbursement and asked the

court  to  dissolve the corporation under Alaska  law.2   Collins

counterclaimed alleging that Blair violated his fiduciary duty by

failing   to  contribute  his  F/V  Milky  Way  shares   to   the

corporation.  Collins also petitioned the court for  a  recission

of  the option and intent to purchase agreements entered into  by

Blair   and  Collins  and  the  return  of  all  assets   Collins

contributed to the corporation.

          Because  the  case involved issues of  dissolution  and

liquidation  of  a  closely held corporation   issues  that  were

complicated by IFQ contributions  a special master was appointed.

          In June 1998 Special Master Gregory L. White, a certified public

accountant,   prepared  a  report  that  reviewed   transactions,

rendered  an  accounting, and recommended alternate  methods  for

dissolution, sale, or liquidation of the corporation.

          In  making  his  recommendations  on  the  division  of

assets, Special Master White made several findings of fact.  Most

importantly,  he  found  that  neither  the  intent  to  purchase

agreement   nor  the  actual  purchase  of  the  F/V  Milky   Way

constituted a settlement of any claims of the parties.   Although

Blairs  1987 option agreement and 1989 purchase of the F/V  Milky

Way may have resulted in his acquiring the quota shares generated

by  Collinss  fishing on the F/V Milky Way  prior  to  1988,  the

special master found that the joint venture was not entered  into

in  order  to  settle  Blairs claims to Collinss  F/V  Milky  Way

shares.

          Special  Master  White also found  that  Blair  had  an

obligation  to contribute approximately 50,000 pounds of  halibut

shares  to  the  corporation and that Collins did  not  agree  to

contribute  additional shares to make up the  difference  between

the  pre-1988  F/V Milky Way shares and the F/V  Predator  shares

actually contributed to the corporation. The special master  then

recommended  that  Blairs  interest be redeemed  by  distributing

certain  assets of the corporation, including the F/V  Milky  Way

and all its fishing rights, and that Collins be allowed to retain

100%  of  the  stock of the corporation, including  most  of  the

fishing  rights arising from the operation of the  F/V  Predator.

The  report  also  recommended that  Blair  be  charged  for  his

personal  legal  and  professional fees that  had  been  paid  by

corporate funds.

          In  May  1999 Superior Court Judge Michael L. Wolverton

issued  a  decision  and order dissolving the  corporation.   The

court  found  that paragraph 21 of the option agreement  (calling

for  the  assignment of all fishing rights to Blair if a  limited

entry  fishing permit system was instituted) indicated  that  the

assignment of rights was part and parcel of the purchase price of

the  vessel.   The  court found that when NMFS  began  allocating

quota  shares, Collins flaunted the fact that he had been awarded

shares  for his fishing of the F/V Milky Way prior to  the  boats

lease  and  sale  to  Blair, which shares Blair  thought  he  was

entitled to under the option and purchase agreements.

          The  court  found  that Blair, rather than  approaching

Collins  in  a  confrontational manner and asking  for  a  formal

settlement, proposed the joint venture as an informal  settlement

of  the  rightful ownership of the pre-1988 F/V Milky Way fishing

rights.   After trial the court found that Blair had  proven  his

version of the facts by a preponderance of the evidence and  that

his proposed distribution of the assets was the most equitable.

          The  court found that neither Blair nor Sullivan  acted

improperly  in  obtaining for the corporation  the  F/V  Predator

shares  withdrawn  by Collins, and that, because  Blair  had  not

acted  improperly, he should not be charged for  the  legal  fees

paid  by the corporation.  The court also found that Collins  had

to  account  for the difference between the F/V Milky Way  shares

pledged  to the corporation and the F/V Predator shares  actually

contributed.

          As  for  the  dissolution, the court  agreed  with  the

masters   recommendation  that  an  equitable  distribution   was

warranted.  The court adopted Blairs proposal for the liquidation

of   the   corporate  assets  and  adopted  all  of  the  masters

recommendations for adjustments to the corporate books, with  the

exception of the legal fees charged to the corporation by  Blair.

After  the  final  masters  report was  issued  and  adopted  and

judgment entered, the court awarded Blair attorneys fees pursuant

to  Alaska Rule of Civil Procedure 82(b)(2), increasing the award

under  Rule  82(b)(3) because of the complexity  of  the  issues,

laws,  and  facts in the case and Collinss unjustified violations

of his fiduciary duties.

          Collins appeals from this order and award.

III. STANDARD OF REVIEW

          We  accept  a  superior courts findings of fact  unless

they  are  clearly  erroneous.3  A finding  of  fact  is  clearly

erroneous  if it leaves [us] with a definite and firm  conviction

on the entire record that a mistake has been made.4

          Interpretation  of  a contract is a question  of  law.5

However, where extrinsic evidence is presented by the parties  to

clarify  a contracts meaning, that evidence points to conflicting

interpretations of the contract, and the contract  is  reasonably

susceptible to either meaning, the proper interpretation  of  the

contract  becomes  a question for the trier of  fact.6   When  an

appellant  challenges the trial courts findings relating  to  the

intent and actions of the parties, we review those findings under

a clearly erroneous standard.7

          We  review an award of attorneys fees under an abuse of

discretion  standard.8   A superior court abuses  its  discretion

when,  after  reviewing the whole record,  we  are  left  with  a

definite  and firm conviction that the trial court erred  in  its

ruling.9

IV.  DISCUSSION

     A.   The  Superior Courts Factual Findings Are Supported  by
          the Evidence and Are Therefore Not Clearly Erroneous.
          
                In  arguing that the trial court erred in setting

aside  or  ignoring the masters factual findings, Collins  argues

that  the  trial  court  erred in substituting  its  own  factual

findings  for that of the master.10  Blair responds that  whether

the  trial  court made clearly erroneous findings was  waived  by

Collins, in that Collins only challenged the trial courts setting

aside  of the masters findings, not the trial courts own  factual

findings.  Collins counters by stating that if the trial court is

allowed  to  disregard  the  masters findings,  Judge  Wolvertons

findings  must  then be reviewed for clear error.  Blairs  waiver

argument is unpersuasive.  Collins specifically mentions  in  his

brief   that  one  of  the  trial  courts  findings  was  without

evidentiary  support  and indicates in  each  instance  where  he

argued  that  the trial court erred in setting aside the  masters

findings  that he was also challenging the trial courts findings.

Accordingly, he did not waive his challenges to Judge  Wolvertons

factual findings.

          The   testimony  at  trial  and  during   the   masters

depositions  was conflicting.11  In making his factual  findings,

Judge  Wolverton  does  not cite to  the  record.   He  did  say,

however,  that  he  found  Blairs  version  of  the  events  that

transpired  between  Blair and Collins  to  be  more  valid  than

Collinss  version.  When determining whether a  trial  court  has

made a clearly erroneous finding, [d]ue regard shall be given  to

the  opportunity  of  a trial judge to weigh the  credibility  of

witnesses.12  As to each of Collinss claims of erroneous findings,

there is testimony to support Judge Wolvertons findings.

          1.   The intent to purchase agreement reflected a settlement of a

               dispute between Blair and Collins.

          In rejecting the masters finding that the joint venture

was  not a settlement of the dispute over the pre-1988 F/V  Milky

Way shares, the superior court stated that [h]owever denominated,

the  July, 1994 agreement had a legal force and effect which, de-

facto, settled the claims between the parties.

          Blair  testified at trial he had paragraph  21  of  the

lease and option agreement put in so that he could guarantee  his

right  to  fish if a limited entry system were ever  implemented.

He stated that when he applied for his quota shares, he sent NMFS

the  option and purchase agreements.  NMFS told Blair  that  they

were  not  going to get involved in litigation over who  was  the

proper owner of the pre-1988 F/V Milky Way shares and that  Blair

should  contact  an  attorney.   Blair  then  contacted  attorney

Sullivan, who told him that to contest the contract would take  a

great deal of time and money.  Sullivan suggested that Blair  try

to work it out with Collins personally.

          In  setting up the joint venture, Blair stated that  he

thought  the deal favored Collins because Blair was not going  to

          try to exercise his rights under the option and purchase

agreements.  Under the agreement, Blair would get only 55% of the

pre-1988  F/V Milky Way shares to which he felt he was  entitled.

Though  Collins  could get less than what he  had  put  into  the

corporation, Blair felt that the agreement was fair in  light  of

the  option  agreement.  If, Blair testified,  he  had  not  gone

through with the joint venture, he feared that he would have been

caught  up  in  litigation and therefore unable to  fish.   Blair

stated  that the 1994 intent to purchase was a settlement  before

there  was an overt dispute between Collins and himself.   Blairs

description  of  the  transactions between  himself  and  Collins

supports  the  trial courts finding that the intent  to  purchase

was, in effect, a settlement.13

          2.   Collins agreed to contribute additional shares in order to

               make up the difference in landings between the F/V Milky Way and

               the F/V Predator.

          The  order issued by the superior court stated that the

evidence  showed that Collins represented that the  F/V  Predator

shares  could be substituted for the F/V Milky Way shares because

Collins  thought they were identical.  While the  superior  court

did not find that Collins intentionally misrepresented the amount

of  shares  he was going to contribute, the fact that he  was  to

contribute  all of his F/V Milky Way shares meant that  he  would

need   to   make  up  any  difference  that  resulted  from   his

substitution of the F/V Predator shares.

          Blair  testified  that  the corporation  was  entitled,

under  the  agreement, to Collinss F/V Milky Way  shares.   Blair

testified that the F/V Predator shares were used because the  F/V

Milky  Way  shares  could not be contributed to the  corporation.

The  corporation was entitled to an amount equal to Collinss  F/V

Milky Way shares.14

          3.   Blair did not agree to contribute approximately 50,000

               pounds of halibut shares to the joint venture.

          The superior courts decision does not indicate how many

          pounds of halibut shares Blair was to contribute to the joint

venture.   The  special master, on the other  hand,  found  that,

although  not  explicitly pointed out by the parties,  it  seemed

reasonable  to  expect that Blair would contribute  approximately

50,000 pounds.

          Blair   testified  that  when  he  and   Collins   were

discussing the joint venture, they figured they would need  about

100,000  pounds of halibut shares in order to succeed.   He  also

stated that they did not discuss how much each party was going to

contribute  to the corporation.  They never mentioned  that  each

party would contribute 50,000 pounds.  Rather, they were going to

combine  all of their shares together, as the intent to  purchase

agreement  indicated.  As Blairs shares were unclear due  to  the

dispute with his other vessel, he could not know how many  shares

he had to contribute.

          4.   Collinss actions to recover his lost sablefish shares were

               wrongful.

          1.   The trial court found that Collins never explained to Blair

or  attorney  Sullivan his reasoning behind his withdrawal of the

pre-1988  F/V Milky Way corporate assets.  The court  found  that

had  Collins  advised  Blair or Sullivan of his  intentions,  the

relationship between the parties would not have deteriorated.

          The lost shares at issue are sablefish shares from 1986

and 1987 landings on the F/V Milky Way.  To qualify for sablefish

shares, a person (defined as an individual or a corporation) must

have  owned  or leased a vessel that caught sablefish with  fixed

gear  during any quota share qualifying year,15 which  for  these

shares would have been 1988, 1989, 1990, or part of 1991.

          In  his  initial  application, Collins asked  that  his

quota  share be allocated to the corporations that owned the  F/V

Predator  and the F/V Milky Way, that is, the F/V Predator,  Inc.

and  the  F/V  Milky  Way, Inc.,16 respectively.   However,  this

prevented Collins from receiving the lost sablefish shares:   F/V

Predator, Inc. could not receive those shares because it was  not

          a successor in interest to the F/V Milky Way, Inc., and F/V Milky

Way, Inc. could not receive the shares because it was leasing the

vessel to Blair during the qualifying years of 1988-1991.   Blair

was  unable  to receive the shares because he neither  owned  nor

leased the vessel during 1986 or 1987.  Collins could not receive

the  shares because he was not eligible, as the corporation owned

the F/V Milky Way.  The shares, therefore, were lost.

          NMFS, though, informed Collins that F/V Predator,  Inc.

was  a qualified person for sablefish shares as it had owned  the

F/V  Predator  during the qualifying years and had  a  qualifying

landing  of sablefish.  To obtain his lost shares, Collins  asked

NMFS  to  rescind the quota shares allocated to the F/V Predator,

Inc.  and  F/V  Milky  Way,  Inc.  and  reallocate  them  to  him

personally.  As  F/V  Predator, Inc. was generally  permitted  to

receive  sablefish  shares,  personally  receiving  F/V  Predator

shares enabled Collins to qualify under the regulations to obtain

the previously lost F/V Milky Way 1986 and 1987 shares.

          However,  the  problem  with  this  solution  was  that

Collins  was  not  permitted  under the  corporations  bylaws  to

unilaterally remove quota shares.  NMFS thought at  the  time  it

transferred the F/V Predator, Inc. shares to Collins that he  was

the  sole  stockholder of the corporation.  When  Blair  informed

NMFS of the true ownership and rights of F/V Predator, Inc., NMFS

rescinded  its  action.  The trial courts  decision,  then,  that

Collins acted wrongfully in removing the F/V Predator, Inc. quota

shares is supported by the evidence.

     B.   The Superior Court Did Not Err in Ordering the Distribution.

          Collins  argues  that the distribution ordered  in  the

special   masters   final  report  does  not  reflect   a   55:45

distribution  when  one considers the hard assets  owned  by  the

corporation and who contributed them.  Collins claims that  there

were hard assets totaling approximately $1.6 million and that  he

had contributed at least 74% of that total.  In the distribution,

however, Collins received approximately $425,000, 26% of the hard

assets.  Blair argues that the distribution ordered by the  court

was  consistent with the evidence presented at trial.  Given that

the  pre-1988 F/V Milky Way shares were Blairs, Blair argues that

Collins  received  45% of the rights to which he  had  no  viable

claim.

          The  superior court ordered the distribution of  assets

according  to the proposal presented by Blair.  The  court  found

that  an  equitable distribution was the only sensible  solution.

It  adopted Blairs proposal in order to maximize the value of the

assets  available  for distribution and to avoid  dissipation  by

adverse  tax  consequences that may result from denominating  the

result as a recission.

          In  Blairs liquidation proposal, Blair received  54.96%

of  the  corporations assets and Collins received  45.04%.   This

comports  with  the  55:45 share of stock owned  by  each  party.

Before   the  superior  court,  Collins  did  not  explain   what

constituted  the  hard  assets  he  claimed.   Without  a   clear

indication  of the assets Collins referred to and who contributed

those  assets,  the trial court did not abuse its  discretion  in

awarding  a  distribution based on each partys  respective  stock

holdings.

     C.   The Superior Court Did Not Err in Finding that Blair Did Not

          Violate His Fiduciary Duties.

          Collins states that Blair breached the covenant of good

faith  and  fair dealing by intentionally deceiving Collins.   He

argues  that  this breach was ongoing during their  relationship.

Collins  also  argues  that Blair, the majority  and  controlling

shareholder  in  the  corporation, had  an  obligation  to  treat

Collins  fairly.  Blair argues that he acted properly in carrying

out  the  intent  to purchase and in the best  interests  of  the

corporation  in  his  retrieval of  the  corporate  quota  shares

withdrawn by Collins.

          Stockholders  in  closely  held  corporations  owe  one

another a fiduciary duty.17  The superior court found that  Blair

          had done nothing wrong in petitioning NMFS for the return of the

withdrawn  quota shares.  Given Collinss reticence in  discussing

his  reasons  for his withdrawal of the quota shares,  the  court

found  that,  rather than breaching a fiduciary duty,  Blair  was

acting in the best interests of the corporation in recouping  the

corporations assets.  Furthermore, the court stated  that  Blair,

though  in a dispute with NMFS over his own quota shares,  fished

those  shares for the benefit of the corporation the  first  year

and  should contribute the earnings from the other years  in  the

final distribution.

          In  petitioning  NMFS for the return of  the  withdrawn

shares,  Blair made clear the corporations reasons for seeking  a

return  of  the shares.  Furthermore, the dispute with NMFS  over

the proper allocation of Blairs shares is well documented.  Since

the superior court ordered that Blairs failure to fish his shares

for  the  corporation after 1995 be accounted for in the  special

masters final report, the court did not err in its decision  that

Blair had not violated his fiduciary duties.

     D.   The Superior Court Erred in Allowing Blair To Use Corporate

          Funds To Pay His Personal Legal Expenses.

          Collins  argues that the trial court erred in reversing

the  special masters decision to require Blair to pay  his  legal

fees,  rather  than allowing him to pay his fees  with  corporate

funds.   Blair  argues that the fees incurred were  fees  of  the

corporation  as  they  were incurred during attempts  to  recover

corporate  assets  converted by Collins and  during  the  ensuing

litigation over the corporations accounting and liquidation.

          The  special master found that charging the corporation

for  counsel  that primarily represented Blair and  attempted  to

settle  the  dispute  by having Collins contribute  shares  while

Blair  contributed  nothing  was not proper,  especially  because

Collins  was  not able to charge the corporation  for  his  legal

fees.  The superior court, though, finding that neither Blair  or

Sullivan had acted improperly, disagreed with the special masters

conclusion.  The superior court allowed Blair to recover  all  of

his legal fees from the corporation.

          By  the  time  the  dissolution came before  the  trial

court,  however,  many  of  the issues being  litigated  involved

Collins and Blair personally.  Blair filed suit on behalf of  the

corporation and himself.  As Blairs actions benefitted  not  only

the  corporation  but also benefitted him personally,  the  trial

courts decision to allow Blair to use corporate funds to pay  for

all of his legal fees was error.  On remand, an allocation should

be  made  to  determine  which of Blairs fees  were  incurred  in

pursuit of corporate goals, which the corporation shall pay,  and

which  were  incurred in pursuit of personal goals,  which  Blair

shall pay.

     E.   The Superior Court Did Not Err in Awarding Blair Enhanced

          Attorneys Fees.

          The  superior  court ordered Collins to  pay  attorneys

fees  totaling  $37,704  to Blair under  Civil  Rule  82.   Blair

incurred $83,782 in fees.  His award, therefore, totaled  45%  of

his  incurred fees.  Collins alleges that this award resulted  in

Collins paying 90% of Blairs actual fees.  As Blair paid his fees

with  corporate  funds,  Collins argues  that  he  (Collins)  had

already contributed $37,702 towards Blairs fees.18

          In awarding Blair attorneys fees, the court stated that

the  award  was  based on the complexity of the issues,  law  and

facts of the case which the court has found to be one of the most

complex it has seen.  Furthermore, the court stated that Collinss

conduct  in  removing  corporate  assets  without  justification,

violation  of fiduciary duties, the failure to offer  a  credible

explanation  of  his  actions  constituted  unreasonable  conduct

within the criteria of Civil Rule 82(b)(3) justifying an enhanced

award.

          As  there  was no money judgment awarded in this  case,

attorneys fees are governed by Rule 82(b)(2).  A prevailing party

is  entitled  to  30% of the partys fees when the  case  goes  to

          trial.  The trial court justified the higher percentage award of

45%  after  a  consideration  of the factors  in  Rule  82(b)(3),

allowing  for  variance in a fee award.        We  have  affirmed

awards  of  up  to  75% of attorneys fees.19  As  Blair  was  the

prevailing party, the courts findings that the law and facts were

complex and that Collins pursued unreasonable claims and defenses

in  the  suit  supports the conclusion that an award  of  45%  of

Blairs fees was not an abuse of discretion.   However, on remand,

this  award  should  only  be applied to  those  fees  personally

incurred by Blair.

V.   CONCLUSION

          Because  the  trial  courts findings  are  not  clearly

erroneous, we AFFIRM its order of dissolution of the corporation.

However, because the trial court erred in allowing Blair  to  use

corporate funds to pay for personal legal expenses, we REMAND for

an allocation of Blairs legal fees.


_______________________________
     1    Paragraph 21 states:

          Limited Entry Permits:
          It  is agreed that if a limited entry fishing
          permit  system is instituted with respect  to
          halibut and/or black cod in Alaska, the Owner
          shall  assign any and all rights he may  have
          with  respect to his usage of the  vessel  in
          those   fisheries  to  Charterer  to   enable
          Charterer   to  obtain  such  limited   entry
          permits.
          
     2      Alaska  Statute  10.06.628  generally  provides  that
certain persons may seek the involuntary dissolution of an Alaska
corporation.  It sets out the grounds for involuntary dissolution
and provides that certain interested persons may intervene in  an
action for involuntary dissolution.

     3     State, Dept of Revenue v. Merriouns, 894 P.2d 623, 625
(Alaska 1995).

     4    City of Hydaburg v. Hydaburg Coop. Assn, 858 P.2d 1131,
1135 (Alaska 1993) (internal quotation marks omitted).

     5     Little  Susitna Constr. Co., Inc. v. Soil  Processing,
Inc., 944 P.2d 20, 23 (Alaska 1997).

     6    Id.

     7    Oaksmith v. Brusich, 774 P.2d 191, 195 (Alaska 1989).

     8     Alderman  v. Iditarod Props., Inc., 32 P.3d  373,  380
(Alaska 2001).

     9    Id. (citing Stoshs I/M v. Fairbanks N. Star Borough, 12
P.3d 1180, 1183 (Alaska 2000)).

     10    This argument is made explicitly only in regards to the
trial  courts  finding that the intent to purchase  and  purchase
agreements  were a settlement of the dispute over who  owned  the
pre-1988  F/V  Milky Way shares.  The rest of Collinss  arguments
are phrased in terms of the trial court error in setting aside or
ignoring  the  masters findings, with no reference to  the  trial
courts findings.

     11     In  making his findings of fact, Special Master White
stated that he had to reach an understanding of the facts.   This
was  complicated  by conflicting testimony.  Where  Collinss  and
Blairs  testimony  conflicted, Special  Master  White  considered
whose  explanation was more plausible given the circumstances  at
the time, and knowledge of how the fishing industry operates.

     12    Barios v. Brooks Range Supply, Inc., 26 P.3d 1082, 1085
(Alaska 2001).

     13    At trial, Blair testified as follows:

          Q:   Now  do you believe the deal you made that day and
               the  deal  were  talking about  today  [the  joint
               venture agreement], favored you or Mr. Collins?
               
          A:   I think it favored Mr. Collins.
               
          Q:   Why do you say that?
               
          A:   Because I wasnt exercising my  the 1987 agreement,
               we were combining everything together, so actually
               I was  yeah, thats why.
               
          . . . .

          Q:   And  if you hadnt made this deal, what would  1995
               have looked like to you?
               
          A:   I  dont think it would have been good for  no,  we
               wouldve  been  tied up in conflict so  [his  quota
               shares] wouldve been tied up.
               
          Q:   Did  Mr.  Collins ever ask you for a  better  deal
               than  the one that you think is described in  that
               intent to purchase agreement?
               
          A:   No.  No.
               
          . . . .

          Q:   And thats why you think this offer was fair?
               
          A:   According to our 1987 agreement . . . I  think  it
               was fair, yes.
               
          . . . .

          A:   Like I said, Ralph and I never had any dis  actual
               dispute because I think we  we settled it  in  the
               1994 agreement.
               
     14    At trial, Blair testified:

          Q:   So you were entitled to what?
          
          A:   Milky Way shares.
               
          Q:   An  amount equal to the Milky Way shares, is  that
               right?
               
          A:   Yes.  Yeah, thats what we both talked about.
               
          A:   Well,  that wed  we had to put Predator shares  in
               the  Predator, Inc. because he couldnt  put  Milky
               Way   shares  in  the  Predator,  Inc.;  it  wasnt
               allowable, I guess.
               
          Q:   Okay.
               
          A:   So   so, thats  that was the big  thats what  they
               were talking about.
               
          Q:   Was   there  any  discussion  that  resolved   any
               question  about  the amount of quota  shares  that
               would be put in in order to comply with the July 5
               agreement?
               
          A:   Well,  Ralph  said, well, well  have  to  put  the
               Predator in, but its about equal to the Milky  Way
               because   because they fish right along side  each
               other for all those years.  Its got about the same
               amount  of fish, so itll  itll be the same anyway,
               so no big deal.
               
          Q:   So  at that point you were no longer talking about
               putting  in Milky Way shares into a business,  you
               were talking about putting Predator shares into  a
               business, is that right?
               
          A:   Thats correct.
               
          Q:   And  the  amount  of  shares, in  your  mind,  was
               satisfied  by  a representation that the  Predator
               shares equaled the Milky Way shares?
               
          A:   Thats correct.
               
          Q:   Correct?
               
          A:   Thats correct.
               
          Q:   And  Mr.  Collins  was telling  you   how  did  he
               explain  to  you that they were approximately  the
               same?
               
          A:   He said they fished the same years and . . . .
               
          Q:   They meaning what, please?
               
          A:   The Predator boat and the Milky Way, he owned them
               both  at  the same time.  They fished right  along
               side  each other that they  theyll have  the  same
               amount  of shares so shouldnt be a  any big  deal,
               any problem, should be the same, should be equal.
               
     15    50 C.F.R.  679.40(a)(2)(i) (2001).

     16    Collins was the sole stockholder of F/V Milky Way, Inc.

     17     Alaska Plastics, Inc. v. Coppock, 621 P.2d  270,  276
(Alaska 1980).

     18     Collins argues that the funds used to pay Blairs fees
would  have  otherwise  been distributed to  him  in  the  assets
available for distribution.  Collins, therefore, would have  been
entitled  to  45%  of the funds used by Blair, or  $37,702.   The
courts  additional award under Rule 82 results in Collinss  share
of Blairs fees totaling 90%.

     19    Stevens ex rel. Park View Corp. v. Richardson, 755 P.2d
389, 396 (Alaska 1988).