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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Laidlaw Transit, Inc. v. Crouse (8/30/2002) sp-5619

Laidlaw Transit, Inc. v. Crouse (8/30/2002) sp-5619

     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,


                              )    Supreme Court No. S-9850/9869
               Appellant and  )
               Cross-Appellee,     )
                              )    Superior Court No.
          v.                  )    3AN-94-10301 CI
GAIL CROUSE, for and on behalf of  )
her daughter, SHAWN CROUSE,   )
a minor,                      )    O P I N I O N
               Appellee and   )
               Cross-Appellant.    )         [No. 5619  -  August
30, 2002]

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Sen K. Tan, Judge.

          Appearances:  Thomas A. Matthews,  Thomas  L.
          Hause,  Matthews  & Zahare, P.C.,  Anchorage,
          for    Appellant/Cross-Appellee.    Don    C.
          Bauermeister, Burke & Bauermeister, P.L.L.C.,
          Anchorage, for Appellee/Cross-Appellant.

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

          BRYNER, Justice.


          I.    A school bus ran off the roadway and rolled over,

injuring  passenger  Shawn Crouse.  Shawns mother  sued  the  bus

driver  and the drivers employer, Laidlaw Transit, Inc.;  a  jury

awarded  Crouse $19,259 in compensatory damages and $3.5  million

in punitive damages.  The trial court remitted the punitive award

to  $500,000  and entered judgment for Crouse.  Laidlaw  appeals,

challenging  the punitive award and disputing several evidentiary

rulings.   Crouse  cross-appeals, questioning  the  trial  courts

remittitur.  We affirm, concluding that the trial court correctly

found  Laidlaw vicariously liable for punitive damages,  did  not

err  in its evidentiary rulings, and did not abuse its discretion

in its remittitur.


          On  November  24,  1992, a school bus  driven  by  Dawn

Finitz, a Laidlaw employee, slid off an icy road and rolled over.

Shawn  Crouse,  a  bus passenger, suffered  minor  injuries.   In

keeping with its drug policy, Laidlaw gave Finitz a post-accident

drug  test,  which  revealed that Finitzs blood  contained  trace

amounts of marijuana.

          Shawns mother, Gail Crouse, filed a complaint on behalf

of  her daughter against Finitz and Laidlaw for compensatory  and

punitive  damages,  alleging that Finitz  recklessly  caused  the

accident.   Crouse  claimed  that Laidlaw  was  both  vicariously

liable  for  Finitzs conduct because the conduct occurred  within

the  course  and scope of Finitzs employment and directly  liable

because Laidlaw negligently or recklessly hired and/or supervised

Finitz   that it knew or should have known that Finitz was likely

to drive while under the influence of drugs or alcohol.

          In  its  answer,  Laidlaw admitted  liability  for  the

accident and confirmed that Finitz tested positive for marijuana.

As  a  result,  the  only issues for trial  were  the  amount  of

compensatory  damages, whether Finitzs or  Laidlaws  conduct  was

sufficiently outrageous to warrant a punitive damages award,  and

if so, the amount of that award.

          Laidlaw   subsequently  filed  a  motion  for   summary

judgment  on  its liability for punitive damages.   The  superior

court  concluded  that Laidlaw could not be held directly  liable

for  punitive  damages because it had not acted  outrageously  in

hiring  and supervising Finitz.  But the court ruled that Laidlaw

could be held vicariously liable for Finitzs conduct because  her

actions fell within the course and scope of her employment.

          Laidlaw also filed several pretrial motions seeking  to

exclude certain evidence, including all reference to Finitzs drug

use;  all evidence of Laidlaws financial resources; the testimony

of  Crouses expert witness, Forest S. Tennant, Jr., M.D.; and all

evidence of Laidlaws conduct.  The trial court partially  granted

the  motion  to exclude evidence of Laidlaws conduct,  precluding

evidence  of  alcohol and controlled substance abuse  by  Laidlaw

drivers  other  than  Finitz.  The court  denied  Laidlaws  other

pretrial motions.

          The  trial consisted of two phases: the first addressed

liability and compensatory damages; the second addressed punitive

damages.  In the first phase, the jury awarded Crouse $19,259  in

compensatory  damages  and found that Finitz  acted  sufficiently

outrageously  to  justify an award of punitive  damages;  in  the

second phase it awarded $3.5 million in punitive damages.

          Laidlaw filed a motion for remittitur, which the  trial

court granted.  Analyzing the punitive damages award in light  of

the  factors  in  Norcon,  Inc. v.  Kotowski,1  the  trial  court

concluded  that the maximum justifiable award was only  $375,000.

Crouse  moved to reconsider; the trial court granted  the  motion

and increased the punitive damages award to $500,000.

          Laidlaw appeals; Crouse cross-appeals.


     A.   Standard of Review

          A.   On appeal, Laidlaw challenges the trial courts summary

judgment  ruling  that  it was vicariously  liable  for  punitive

damages  and  also  disputes a number of the  courts  evidentiary

rulings.   We review grants of summary judgment de novo and  will

affirm if there are no genuine issues of material fact . .  .  .2

A  trial courts decision regarding the admissibility of evidence,

including  expert testimony, is generally reviewed for  abuse  of

discretion;3 but when admissibility turns on a question  of  law,

we apply our independent judgment.4

          On  cross-appeal,  Crouse challenges the  trial  courts

          remittitur of the punitive damages award from $3.5 million to

$500,000.  We review a trial courts grant of remittitur for abuse

of  discretion.  To reverse, we must be left with a definite  and

firm  conviction  that  the trial court  erred  in  granting  the


     B.   Laidlaws Vicarious Liability for Punitive Damages

          In  partially denying Laidlaws summary judgment motion,

the  trial  court ruled that Finitz acted within the  course  and

scope  of  her employment and, so, if the jury found her  conduct

sufficiently  outrageous to justify an award of punitive  damages

against  Finitz,  Laidlaw would be vicariously  liable.   Laidlaw

challenges that ruling.

          1.   Laidlaw failed to preserve its argument that  this

               court should adopt the complicity rule.

          In Alaskan Village, Inc. v. Smalley, we adopted the so-

called course of employment rule for determining when an employer

is  vicariously liable for punitive damages arising  out  of  its

employees  conduct.6  Under this rule, an employer is vicariously

liable, regardless of the employees rank, so long as the employee

was acting within the course and scope of employment.7

          On  appeal,  Laidlaw  urges us to  follow  a  different

standard,  the  complicity rule, which  requires  at  least  some

degree of employer complicity before vicarious liability attaches

for   punitive  damages  arising  from  the  conduct  of  a  non-

supervisory  employee.8  But Laidlaw did not raise this  argument

at the trial court level.  Because Laidlaw failed to preserve the

argument  for  appeal, we decline to consider overruling  Alaskan

Village or adopting the complicity rule.9

          2.   The trial court did not err in applying the course

               of employment rule.

          Laidlaw  next  argues  that the trial  court  erred  in

applying the course of employment rule by deciding as a matter of

law  that  Finitz had acted within the course and  scope  of  her

employment.   Because  Finitz did not smoke  marijuana  to  serve

          Laidlaw and because Laidlaws drug policy specifically prohibited

drug  use, Laidlaw contends, Finitzs conduct could not have  been

within the scope of her employment.

          But  the  conduct  giving rise to the punitive  damages

award was not Finitzs act of smoking marijuana; it was her act of

driving  children  in  a school bus while  she  was  impaired  by

marijuana.10  The issue, then, is whether the trial court erred by

concluding that Finitzs act of driving the school bus while under

the  influence of marijuana fell within the course and  scope  of

her employment.

          This court does not follow a rigid rule for determining

when  tortious  conduct occurs within the  scope  of  employment;

rather,  we  apply a flexible, multi-factored  test.11   We  have

generally  looked  to  the  various factors  in  the  Restatement

(Second)  of Agency  228 as relevant considerations,  though  not

prerequisites,  to determine whether an employer should  be  held

responsible for an employees acts.12  The Restatement (Second) of

Agency  228 provides:

          (1)  Conduct of a servant is within the scope
          of employment if, but only if:
               (a)  it is of the kind he is employed to
               (b)   it occurs substantially within the
          authorized time and space limits;
               (c)   it is actuated, at least in  part,
          by a purpose to serve the master, and
               (d)   if force is intentionally used  by
          the servant against another, the use of force
          is not unexpected by the master.
          (2)   Conduct of a servant is not within  the
          scope  of  employment if it is  different  in
          kind  from  that authorized, far  beyond  the
          authorized  time  or  space  limits,  or  too
          little  actuated by a purpose  to  serve  the
Applying  these factors to this case, we conclude that the  trial

court  properly found as a matter of law that Finitzs  outrageous

conduct occurred in the course and scope of her employment.

          First, Finitz had specifically been employed to drive a

school  bus.   That she performed this activity while  under  the

effects  of  marijuana does not mean that she acted  outside  the

scope   of   her   employment;  instead,  it   demonstrates   the

recklessness  with  which  she  performed  her  assigned  task.13

Moreover,  the  fact  that  Laidlaw policy  explicitly  prohibits

smoking  marijuana does not insulate the company from  liability:

A  wrongful  act  committed by an employee while  acting  in  his

employers business does not take the employee out of the scope of

employment, even if the employer has expressly forbidden the act.14

          Second,  the disputed conduct occurred within the  time

and  space limits of Finitzs employment.  Finitz drove under  the

influence of marijuana while on her usual morning route.

          Finally, even though Finitz acted recklessly in driving

the  bus,  she  nonetheless acted, at least  in  part,  to  serve

Laidlaw.   In  Doe v. Samaritan Counseling Center, we  held  that

where tortious conduct arises out of and is reasonably incidental

to  the  employees legitimate work activities, the motivation  to

serve test will have been satisfied.15  Here the conduct at issue

driving  while impaired by marijuana  both arose out of  and  was

incidental  to  Finitzs  legitimate work  activities  because  it

carried  out the very function that Finitz was hired  to  perform

driving  a  school  bus.   We  thus affirm  the  superior  courts


     C.   Evidentiary Issues

          1.   The  trial court did not err by admitting evidence

               regarding  Laidlaws  failure to  locate  a  driver

               named Mike.

          During  the  trials liability phase, Crouse  introduced

evidence  over  Laidlaws objection that  Laidlaw  had  failed  to

identify and locate a Laidlaw driver who was known to Finitz only

as Mike.  Finitz asserted that she and Mike had previously smoked

marijuana  together.  On appeal, Laidlaw claims that  whether  it

ever  found Mike was irrelevant to whether Finitzs marijuana  use

          impaired her driving on the day of the accident.  Moreover,

Laidlaw  points  out, the trial court had previously  ruled  that

evidence concerning drug and alcohol use by Laidlaw drivers other

than Finitz was irrelevant and thus inadmissable.

          Laidlaw  adopted  the theory at trial that  Finitz  was

merely  an occasional, recreational marijuana user and  that  the

jury  could  therefore believe her assertion  that  she  had  not

smoked  marijuana on the day of the accident.   This  theory  was

based  in  large  part on Finitzs testimony that  while  she  was

working for Laidlaw she smoked marijuana [v]ery irregularly, very

seldom.   Given Laidlaws affirmative reliance on the theory  that

Finitz was a recreational user, Crouse obviously had a legitimate

interest  in  locating witnesses who were familiar  with  Finitzs

drug  use  and might be able to shed light on the credibility  of

her testimony.

          During  pretrial discovery and at trial,  Finitz  named

only  two people with whom she had smoked marijuana in the  past:

Cora,  a  resident in Finitzs apartment complex, and  Mike.   She

could  not  recall either Coras or Mikes last names.   As  Crouse

points  out,  [p]laintiff  repeatedly  sought  through  discovery

identifying  information about Cora and Mike because  these  were

the  only witnesses [Finitz] could even recall the first name  of

who  had  knowledge  of her claimed recreational  marijuana  use.

Because  Cora had moved and was no longer in contact with Finitz,

the  only way Crouse could verify Finitzs testimony on this point

was  through  Mike.  But Laidlaw failed to locate Mike,  claiming

that,  despite an extensive inquiry, it had failed to find anyone

named  Mike who worked as a Laidlaw driver in Eagle River at  the

time of the accident.

          By  establishing  Laidlaws failure to locate  Mike  and

questioning  the  reasonableness  of  Laidlaws  efforts,   Crouse

legitimately sought to demonstrate not only the absence of anyone

who  could  corroborate Finitzs claim of merely  occasional  drug

use, but also that Laidlaw might have been less than diligent  in

uncovering  evidence that could contradict its recreational  user

theory.   Because  the  disputed  evidence  had  at  least   some

legitimate  tendency  to refute Laidlaws theory  of  defense,  we

reject Laidlaws claim of irrelevance and conclude that the  trial

court did not abuse its discretion in admitting the evidence.

          2.   The trial court did not err by refusing to give  a

               cautionary   instruction  after  Crouses   closing


          Laidlaw  claims  that even if we find  that  the  trial

court   properly  admitted  the  evidence  concerning  Mike,   it

nonetheless  erred  by  failing to give a cautionary  instruction

after  Crouse referred to this evidence during closing arguments.

In closing argument, Crouses attorney stated,

          But  Laidlaw not finding out who Mike was  is
          detestable.   Its one of their  drivers,  hes
          smoking marijuana with this driver.
          . . . .

          Were going to ask you to say Laidlaw shouldnt
          be  using drivers like Mike.  Now youve never
          seen  Mike and Ive never seen Mike, and  Mike
          might  still be driving, for all of us  know.
          If  you  do  nothing  in this  case,  you  do
          nothing, then tomorrow morning, when that bus
          pulls  up and those doors open, and  a  child
          looks up those big stairs and climbs into the
          bus,  Mike  may well be behind that  steering
          wheel.   And thats who youre going  to  leave
          there.   And if you think this is okay,  then
          you  say no to these questions.  But if youre
          worried  about  that child and youre  worried
          about this type of conduct, then your answers
          have to be yes in this action.  And thats the
          biggest decision youre going to make in  this
          Following   these  statements,  Laidlaw   requested   a

cautionary  instruction  to  explain that  Laidlaws  conduct  was

irrelevant.  The trial court denied this request, reasoning  that

the  argument was relevant to the issue of deterrence.  We  agree

with  the  trial courts conclusion.  Jury instruction 18  stated:

The  Plaintiff  has also requested that you find Defendant,  Dawn

Finitz, liable for punitive damages in order to punish her and to

deter  her  and others from repeating similar acts.  Laidlaw  did

not  object  to  this instruction.  As we have  stated  on  other

occasions,  the  purpose of punitive damages  is  to  punish  the

wrongdoer  and  prevent similar conduct  in  the  future.16   The

argument  at  issue  was based on evidence  presented  at  trial,

conformed  to the jury instructions, and was aimed at  convincing

the  jury  of  the need to deter other drivers and employers  who

were  similarly situated to Finitz and Laidlaw.  We conclude that

the  trial court did not err in refusing Laidlaws request  for  a

cautionary instruction.

          3.   The  trial court did not err by admitting evidence

               of Laidlaws wealth.

          The  trial  court  denied Laidlaws pretrial  motion  to

exclude   all  evidence  of  the  companys  financial  resources,

reasoning  that  Laidlaws financial wealth was  relevant  to  the

punitive  damages  question.   Laidlaw  challenges  this  ruling,

arguing that evidence of corporate wealth is irrelevant when,  as

here,  a  company  commits  no direct wrong  but  is  subject  to

punitive  damages  solely on the theory that  it  is  vicariously

liable for acts of a non-managerial employee.  Except perhaps  in

situations  involving managerial employees,  Laidlaw  reasons,  a

vicariously  liable  employer is not a wrongdoer,  and  financial

evidence therefore must be limited to the employees resources.

          We  have previously recognized that a defendants wealth

is  usually relevant to the issue of punitive damages.17  But  we

have not yet considered the narrower issue raised here: whether a

corporate employers financial resources are relevant to  punitive

damages  when  the  employer is only vicariously  liable  for  an

employees conduct.  The rationale behind the course of employment

rule  we  adopted  in  Alaskan Village  v.  Smalley  requires  an

affirmative answer.18

          The course of employment rule holds corporate employers

vicariously  liable  for  punitive damages  on  the  theory  that

corporations  can  act only through their employees  and  agents;

          hence, when employees act in the course of employment, their acts

are  indistinguishable from corporate actions.  An early  opinion

of the Maine Supreme Court exemplifies this theory:

          A  corporation is an imaginary being.  It has
          no  mind but the mind of its servants; it has
          no  voice but the voice of its servants;  and
          it  has  no hands with which to act  but  the
          hands  of  its servants.  All its schemes  of
          mischief,  as well as its schemes  of  public
          enterprise, are conceived by human minds  and
          executed by human hands; and these minds  and
          hands are its servants minds and hands.   All
          attempts,  therefore, to distinguish  between
          the guilt of the servant and the guilt of the
          corporation; or the malice of the servant and
          the   malice  of  the  corporation;  or   the
          punishment  of the servant and the punishment
          of the corporation, is sheer nonsense.[19]
          Under  the course of employment rule, then, an employee

acting within the course and scope of employment essentially is a

corporate  actor;  and  when the employee  acts  wrongfully,  the

corporation  becomes  the wrongdoer: [T]he tortious  act  of  the

servant  done  in the course of his employment is ordinarily  the

legal  act of the master, and in this sense, the employer is  not

free  of  fault.  20   Because the law treats  the  employer  and

employee  alike  as  wrongdoers, it is proper  for  the  jury  to

consider  what amount of punitive damages will suffice to  punish

and   motivate   the  vicariously  liable  employer;   as   other

jurisdictions  have  held in applying the  course  of  employment

rule, evidence of the employers financial wealth is relevant  and

admissible  in  these circumstances.21  The trial court  did  not

abuse  its discretion in admitting evidence of Laidlaws financial


          4.   The  trial  court  did not err  by  admitting  the

               testimony of Dr. Tennant.

          Laidlaw  next  contends that the trial court  erred  in

allowing  Crouses medical expert witness, Dr. Forest Tennant,  to

state  his opinion that, at the time of the accident, Finitz  was

under the influence of marijuana she had smoked earlier the  same

          morning.  But Laidlaw did not object to the challenged testimony

and therefore failed to preserve this issue for appeal.22

          Laidlaw  did  file  a pretrial motion  to  prevent  Dr.

Tennant from expressing his expert opinion concerning a different

theory of impairment: that Finitz was a long-term, heavy user  of

marijuana;   that  such  use  can  cause  residual  physiological

effects; and that Finitzs driving was probably impaired by  these

residual effects on the morning of the accident.  But despite the

trial courts pretrial ruling allowing testimony on this theory of

impairment, Dr. Tennant did not rely on the theory at trial.   He

testified instead that, in his opinion, Finitz had likely  smoked

marijuana on the morning of the accident and was impaired by  the

effects of that mornings consumption.

          Laidlaw  voiced no objection to this testimony, instead

choosing  to  cross-examine Dr. Tennant  about  his  reasons  for

failing   to  mention  this  theory  earlier.   The  doctor   had

acknowledged  that he had just reached his conclusion  the  night

before testifying, after examining emergency room records that he

had  not  previously  reviewed and that disclosed  Finitzs  post-

accident  pulse  rate  and  blood  pressure.   According  to  Dr.

Tennant,  this information enabled him to form his  new  opinion;

before  seeing  the  emergency room records,  he  had  relied  on

information indicating that Finitzs most recent marijuana use had

occurred at least several days before the accident.

          As  can be seen, Dr. Tennants trial testimony addressed

a  different theory than the theory he developed during  pretrial

discovery, and the new testimony obviously fell outside the scope

of  both Laidlaws pretrial motion to preclude Dr. Tennants expert

testimony  concerning residual effects and  the  superior  courts

pretrial  order  denying that motion.23  The record  provides  no

basis, then, for concluding that the court had already ruled  the

new  line  of  testimony  admissible or  that  a  contemporaneous

objection  would  have  been futile.  Given these  circumstances,

Laidlaw cannot reasonably rely on its pretrial motion as a timely

          objection; nor can it plausibly invoke the superior courts

pretrial   ruling   as  an  excuse  for   failing   to   make   a

contemporaneous objection.

          5.   The  trial court did not err by admitting evidence

               of Finitzs general drug habit.

          Laidlaw  argues that the trial court erred in admitting

evidence of Finitzs general drug use, particularly certain  post-

accident treatment records from the Alaska Womens Resource Center

indicating  that  Finitz had used marijuana  on  a  daily  basis.

Laidlaw  insists that evidence of Finitzs general  drug  use  was

inadmissible  because  Crouse presented  no  admissible  evidence

tending  to prove that Finitz was actually impaired by  drugs  at

the time of the accident.24

          But  as  explained  above, Dr. Tennant  testified  that

Finitz was impaired by marijuana when the accident occurred.  The

challenged  treatment records directly supported this  testimony:

they  reflected Finitzs own admissions that she engaged in  daily

marijuana use around the time the accident occurred.  The Centers

client  intake form states that Finitz had been taking 6 hits  of

marijuana  twice a day.  Because Finitzs admission of  daily  use

had   case-specific  relevance  by  discrediting  her  claim   of

occasional  recreational use and by indicating  that  she  smoked

marijuana  on the day she drove the school bus off the  road,  we

find  no  error  in  failing to exclude the  records  as  general

propensity evidence.

     D.   The  Trial  Court  Did  Not  Abuse  Its  Discretion  by
          Ordering a Remittitur of the Punitive Damages Award.
          On  cross-appeal,  Crouse challenges the  trial  courts

remittitur  of  the punitive damages award from $3.5  million  to

$500,000.  A trial court may remit a jurys punitive damages award

as  excessive  when  the  court  determines  that  the  award  is

manifestly  unreasonable; factors relevant to this  determination

include the compensatory damage amount, magnitude of the offense,

importance  of the policy violated, and the defendants  wealth.25

Also  relevant are the nine factors listed in the Model  Punitive

Damages Act:26

          (1)   the  nature of the defendants  wrongful
          conduct  and  its effect on the claimant  and
          (2)  the amount of compensatory damages;
          (3)    any  fines,  penalties,  damages,   or
          restitution  paid  or  to  be  paid  by   the
          defendant arising from the wrongful conduct;
          (4)    the  defendants  present  and   future
          financial  condition and  the  effect  of  an
          award on each condition;
          (5)   any  profit  or gain, obtained  by  the
          defendant  through the wrongful  conduct,  in
          excess of that likely to be divested by  this
          and  any  other actions against the defendant
          for compensatory damages or restitution;
          (6)   any  adverse  effect of  the  award  on
          innocent persons;
          (7)  any remedial measures taken or not taken
          by the defendant since the wrongful conduct;
          (8)   compliance  or noncompliance  with  any
          applicable   standard   promulgated   by    a
          governmental  or  other generally  recognized
          agency or organization whose function  is  to
          establish standards; and
          (9)   any  other  aggravating  or  mitigating
          factors  relevant  to  the  amount   of   the
When  a  trial court applies these factors and concludes that  an

award  is  excessive,  the  amount remitted  should  reflect  the

maximum that the jury could have awarded without being excessive.28

          The  offensive conduct in this case was Finitzs act  of

driving  a  school bus off the road while Finitz was impaired  by

marijuana.  In its original order of remittitur, the trial  court

focused on several relevant factors: (1) the relationship between

the  punitive  and compensatory damages awards; (2) the  offenses

magnitude;  (3)  the importance of the policy violated;  (4)  the

defendants  wealth;  and  (5) any fines, penalties,  damages,  or

restitution  paid  or to be paid by Laidlaw.   While  recognizing

          that Laidlaw had over $1 billion in annual revenues nationwide,

the  court  emphasized that the jurys award of  punitive  damages

exceeded  its  award  of  compensatory  damages  by  182   times;

moreover,  the  court noted, although Finitz violated  a  serious

policy  by driving under the influence of a controlled substance,

her wrongful conduct was not especially egregious, consisting  of

an  isolated act that caused only minor injuries.  This  analysis

initially led the court to reduce the jurys $3.5 million punitive

damages  award  to $375,000, a figure that, in the  courts  view,

represented the maximum punitive damages award supported  by  the


          After Crouse moved for reconsideration, the trial court

increased  the remitted award to $500,000 based on a reevaluation

of  two factors: the offenses magnitude and Laidlaws wealth.   In

reassessing these factors, the court found Finitzs conduct to  be

more  serious  than it originally believed, noting that,  despite

Shawn Crouses relatively minor injuries, an out of control school

bus,  full  of school children on an icy road, with  an  impaired

driver posed a very high degree of hazard to the occupants of the

school  bus  and to the public.  At the same time,  however,  the

court  tempered  its  original  estimate  of  Laidlaws  corporate

wealth,  pointing  out  that, although  the  companys  nationwide

annual  revenues  exceeded $1 billion,  its  annual  revenues  in

Alaska  totaled  only  $5  million.  Finding  statewide  revenues

relevant, the court reasoned that a $3.5 million award might seem

de  minimis  compared  to Laidlaws nationwide  revenues  but  was

obviously  excessive in relation to the companys Alaska revenues.

Because  this second factor largely offset the first,  the  court

decided  on reconsideration to raise the original remitted  award

by only a modest amount, to $500,000.

          In  challenging  the  remittitur, Crouses  cross-appeal

advances  three arguments.  First, Crouse argues, the  remittitur

is  inconsistent with the trial courts finding on reconsideration

that  the jurys punitive damages award is de minimis compared  to

Laidlaws  nationwide  revenues.  But this argument  misreads  the

courts  reconsideration  decision,  which  acknowledged  Laidlaws

nationwide  earnings  but  essentially found  the  companys  much

smaller  Alaska  revenues  to  be  a  more  realistic  point   of

reference for assessing the excessiveness of the punitive damages

verdict.  Punitive damages are meant to punish the wrongdoer  and

to  deter similar conduct.29  Given the localized nature  of  the

misconduct at issue, the limited scope of the resulting harm, and

the  absence  of any direct liability, the trial  court  did  not

abuse  its  discretion in selecting Laidlaws statewide operations

as  the  most appropriate measure to use in determining the  need

for deterrence and punishment.

          Second,  Crouse argues that, given the courts  findings

on   reconsideration   concerning  the   magnitude   of   Finitzs

misconduct, its ultimate decision overemphasized the mathematical

ratio  of  punitive damages to compensatory damages    a  measure

that should not alone be dispositive.  But again, Crouse misreads

the  trial  courts order on reconsideration.  Although the  trial

courts  findings  on  reconsideration acknowledged  that  Finitzs

misconduct  was  more serious than the court originally  thought,

these findings neither said nor suggested that the misconduct was

so  serious  as  to  support the original $3.5  million  punitive

damages  verdict.   Instead, the courts reconsideration  decision

simply recognized that the enhanced seriousness of the misconduct

supported an award larger than the $375,000 total that the  court

had awarded in its original remittitur order.  As the trial court

specifically noted, even though it originally underestimated  the

potential   hazard   posed  by  Finitzs  conduct,   the   overall

seriousness  of  the  misconduct continued  to  be  mitigated  by

several  significant  considerations:  to  a  large  extent   the

potential  harm  from Finitzs conduct did not materialize;  Shawn

Crouse  suffered only minor injuries; and Laidlaw itself  neither

contributed  to  Finitzs misconduct nor directly engaged  in  any

other  wrongdoing.   Moreover, Crouses  argument  on  this  point

          mistakenly posits that the trial courts order on reconsideration

found  the  ratio of punitive to compensatory damages to  be  the

only  mitigating  factor  calling for a  remittitur.  As  already

indicated, the court independently emphasized that the income and

size  of  [Laidlaws]  Alaska operations must temper  [the  amount


          Last,  Crouse attempts to establish the appropriateness

of   the  jurys  punitive  damages  verdict  through  a  detailed

discussion of economic efficiency theory.  But Crouse  failed  to

present  any evidence at trial supporting this theory, failed  to

argue   the   point   to  the  jury  or  to  request   supporting

instructions, and failed to argue this point before the  superior

court  either in its opposition to Laidlaws motion for remittitur

or  in  its motion for reconsideration.  Because a party may  not

present  new issues or advance new theories to secure a  reversal

of  a  trial  court  decision,  we decline  to  consider  Crouses

economic efficiency theory.30

          We thus reject Crouses principal claim on cross-appeal,

holding  that  the  trial court did not abuse its  discretion  in

ordering  a  remittitur of the punitive damages award  from  $3.5

million to $500,000.31


          We AFFIRM the superior courts final judgment.

     1    971 P.2d 158 (Alaska 1999).

     2     Municipality of Anchorage v. Repasky, 34 P.3d 302, 305
(Alaska 2001).

     3     Dobos  v.  Ingersoll, 9 P.3d 1020, 1023 (Alaska  2000)
(admissibility  of evidence); State v. Coon, 974  P.2d  386,  398
(Alaska 1999) (expert testimony).

     4    See Landers v. Municipality of Anchorage, 915 P.2d 614,
616 n.1 (Alaska 1996).

     5     Intl Bhd. of Elec. Workers, Local 1547 v. Alaska Util.
Constr., Inc., 976 P.2d 852, 857 (Alaska 1999).

     6     720 P.2d 945, 948-49 (Alaska 1986) ([I]f a tort by  an
employee renders the employer liable for compensatory damages and
the  employees actions justify a punitive damage award, then  the
employer  is  liable  for punitive damages, whether  or  not  the
employer  authorized or ratified the tortious  conduct.)  (citing
with  approval  the rule adopted by the Oregon Supreme  Court  in
Stroud v. Dennys Rest., Inc., 532 P.2d 790, 793 (Or. 1975));  see
also  VECO,  Inc. v. Rosebrock, 970 P.2d 906, 911  (Alaska  1999)
(noting  that  Alaska case law generally follows the  Restatement
(Second)  of  Agency  but  has  eliminated  the  requirement   in
subsection (c) that the employee be managerial).

     7     See Stroud v. Dennys Rest., Inc., 532 P.2d 790, 792-93
(Or. 1975).

     8     The  complicity rule is expressed by  the  Restatement
(Second)   of   Torts   909  (1979)  and  the  nearly   identical
Restatement (Second) of Agency  217C (1958), which states:

          Punitive  damages  can  properly  be  awarded
          against  a master or other principal  because
          of an act by an agent if, but only if:
            (a) the principal authorized the doing  and
          the manner of the act, or
            (b)  the  agent was unfit and the principal
          was reckless in employing him, or
            (c)  the agent was employed in a managerial
          capacity  and was acting within the scope  of
          employment, or
          (d)   the principal or a managerial agent  of
          the principal ratified or approved the act.
     9     See, e.g., Nenana City Sch. Dist. v. Coghill, 898 P.2d
929,  934 (Alaska 1995) (declining to consider an argument raised
for  the first time on appeal).  Laidlaw suggests that this court
recently  adopted the complicity rule in VECO, Inc. v. Rosebrock,
970  P.2d 906 (Alaska 1999)  a case decided after trial ended  in
the  present  case   and that the newly created conflict  between
VECO  and Alaskan Village must be resolved.  But Laidlaw misreads
VECO,  which expressly reaffirmed Alaskan Village as establishing
the  appropriate  vicarious liability test  for  cases  involving
conduct within the course and scope of employment but adopted the
complicity rule for cases involving employee conduct outside  the
course  and scope of employment.  VECO, 970 P.2d at 923  &  n.34.
After  our decision in Alaskan Village, the legislature undertook
to  regulate  and  narrow  the circumstances  in  which  punitive
damages  may  be awarded and to limit the amount of such  awards.
See  AS  09.17.020.   Further, the Supreme Court  of  the  United
States  has indicated that punitive damages are subject to review
for  excessiveness under the due process clause of the fourteenth
amendment to the United States Constitution.  Cooper Indus., Inc.
v. Leatherman Tool Group, Inc., 532 U.S. 424 (2001).  In light of
these   developments,   the   Alaskan   Village   rule   may   be
anachronistic.  If and when the point is properly  preserved  and
raised,  this court may consider adopting the narrower complicity

     10     See Stephenson v. United States, 771 F.2d 1105,  1107
(7th  Cir. 1985) (relying on Wisconsin law to say that it is  the
employees  conduct  at the time of the accident  that  determines
whether he is acting within the scope of his employment).

     11     Doe  v. Samaritan Counseling Ctr., 791 P.2d 344,  346
(Alaska 1990).

     12     Id. at 347; accord Williams v. Alyeska Pipeline Serv.
Co.,  650  P.2d 343, 349 (Alaska 1982); Luth v. Rogers  &  Babler
Constr.  Co.,  507 P.2d 761, 764 & n.14 (Alaska 1973)  (rejecting
proposition that must satisfy each factor).

     13     See Gutierrez de Martinez v. Drug Enforcement Admin.,
111  F.3d 1148, 1158 (4th Cir. 1997) (applying Virginia  law  and
concluding  that drinking alcohol by itself does not  remove  the
employee from the scope of his employment); Stephenson, 771  F.2d
at  1107-08 ([T]he fact that [the employee] was intoxicated  when
driving does not mean that he was acting outside the scope of his
employment, but only that he failed to use reasonable care  under
the circumstances.).

     14    Ortiz v. Clinton, 928 P.2d 718, 723 (Ariz. App. 1996);
accord  Stephenson,  771  F.2d  at 1108  (The  [employer]  cannot
insulate  itself from liability . . . by promulgating regulations
prohibiting  employees  from  drinking  and  driving.);  Pyne  v.
Witmer,  512  N.E.2d  993,  999 (Ill. App.  1987)  (holding  that
employees  violation of his employers policy against drinking  on
the job does not preclude liability under respondeat superior).

     15     791  P.2d 344, 348 (Alaska 1990), clarified by  VECO,
Inc.   v.  Rosebrock,  970  P.2d  906,  924  n.36  (Alaska  1999)
(disapproving  of  possible  broad interpretation  and  requiring
employees  act  to  have  at  least  some  motivation  to   serve

     16     Alaskan Village, Inc. v. Smalley, 720 P.2d  945,  948
(Alaska 1986).

     17     Norcon,  Inc. v. Kotowski, 971 P.2d 158, 175  (Alaska

     18    720 P.2d at 948-49.

     19     Goddard  v.  Grand Trunk Rwy., 575  Me.  202,  222-23
(1869),  as  quoted in Embrey v. Holly, 442 A.2d  966,  970  (Md.
1982)  (quoting this language as justification for following  the
course  of employment approach); see also Miller v. Blanton,  210
S.W.2d 293, 297 (Ark. 1948) (Having, by the constitution of their
being, to act solely by agents or servants, [corporations]  must,
as matter of sound public policy, be held liable for all the acts
of  their  agents and servants who commit wrongs while performing
the  masters business, and in the scope of their employment;  and
this  to  the extent of liability for punitive damages in  proper

     20     Embrey, 442 A.2d at 970; see also, e.g., Goddard, 575
Me.  at  222-23; Thorne v. Contee, 565 A.2d 102, 110  (Md.  Spec.
App.  1989) ([T]he tortious act of the servant done in the course
of  his  employment is ordinarily the legal act of the  master.);
Gifford  v.  Evans,  192  N.W.2d  525,  529  (Mich.  App.   1971)
(Respondeat  superior provides in essence  that  the  act  of  an
employee during the course of his employment is legally  the  act
of the employer.).

     21     See  Embrey,  442 A.2d at 973 (holding  that  it  was
appropriate  for  trial court to award separate punitive  damages
awards  against  an employee and his vicariously liable  employer
because  this  would enable each award to be  based  on  the  two
defendants  differing financial status); see also  Hyatt  Regency
Phoenix  Hotel Co. v. Winston & Strawn, 907 P.2d 506, 521  (Ariz.
App.   1995)   (holding  that  punitive  damages  award   against
vicariously  liable law firm was not excessive  in  part  because
[t]he  award  is  proportionate  to  [the  law  firms]  financial

     22     See  Alaska Evidence Rule 103(a)(1); see also Norcon,
Inc.,  971  P.2d  at 170 (holding that employer waived  issue  on
appeal  of whether employees testimony was unduly prejudicial  by
failing to object when testimony was offered at trial).

     23     At  trial Laidlaw did not object to Dr. Tennants  new
theory  as  beyond the scope of the expert disclosures or  report
and  Laidlaw  does not complain of such a discovery violation  on

     24     Laidlaw  cites other courts for support.  See,  e.g.,
Coleman  v.  Williams,  356  N.E.2d 394,  397  (Ill.  App.  1976)
(denying reference to partys alcohol consumption earlier  in  day
when  no  evidence  existed that at time of  accident  party  was
actually intoxicated); Gustavson v. Gaynor, 503 A.2d 340,  342-43
(N.J. Super. 1985) (same).

     25     ve Damages Act (U.L.A.)  7(a), quoted in Norcon,  Inc
.,  971  P.2d at 176.Norcon, Inc., 971 P.2d at 175.20  P.2d  945,
949 (Alaska 1986)).

     26    Id. at 176.

     27     Model Punitive Damages Act (U.L.A.)  7(a), quoted  in
Norcon, Inc., 971 P.2d at 176.

     28    Norcon, Inc., 971 P.2d at 175.

     29    Alaskan Village, 720 P.2d at 948.

     30     See Nenana City Sch. Dist. v. Coghill, 898 P.2d  929,
934  (Alaska 1995) ([A]n argument not raised in a suit before the
trial court will not be considered on appeal.); see also Zeman v.
Lufthansa  German  Airlines, 699 P.2d 1274,  1280  (Alaska  1985)
(noting that court may review an issue if new argument is closely
related  to  trial court arguments so that they could  have  been
gleaned from the pleadings).

     31     Crouse also raises several other cross-appeal  issues
for  consideration only if we grant Laidlaws request  for  a  new
trial.  Our decision rejecting Laidlaws arguments on appeal makes
it   unnecessary  to  consider  Crouses  contingent  cross-appeal