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Fleegel v. Estate of Michael E. Boyles (11/15/2002) sp-5641
Fleegel v. Estate of Michael E. Boyles (11/15/2002) sp-5641
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
MONICA E. FLEEGEL, )
) Supreme Court Nos. S-9091/9441
Appellant/ )
Cross-Appellee, ) Superior Court No.
) 3AN-97-6910 CI
v. )
) O P I N I O N
ESTATE OF MICHAEL E. BOYLES, )
) [No. 5641 - November 15, 2002]
Appellee/ )
Cross-Appellant. )
______________________________)
Appeal from the Superior Court of the State
of Alaska, Third Judicial District,
Anchorage,
Dan A. Hensley, Judge.
Appearances: Wm. Grant Callow, Law Offices
of Wm. Grant Callow, APC, Anchorage, for
Appellant and Cross-Appellee. Paul W.
Waggoner, Law Offices of Paul W. Waggoner,
Anchorage, for Appellee and Cross-Appellant.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
FABE, Chief Justice.
BRYNER, Justice, with whom CARPENETI,
Justice, joins, dissenting.
I. INTRODUCTION
Monica Fleegel sought compensatory and punitive damages
from a drunk driver, Michael Boyles,1 who injured her in a car
accident. The jury awarded Fleegel compensatory damages, but
although it found that punitive damages were warranted, it made
no monetary award for punitive damages. On appeal Fleegel
appeals a number of the trial court's evidentiary rulings, and
Boyles cross-appeals the trial court's award of attorney's fees
to Fleegel. Because the trial court did not abuse its discretion
in its evidentiary rulings and because it appropriately concluded
that although Fleegel was not the prevailing party, she was
entitled to attorney's fees under the crime victims' statute, we
affirm the trial court's judgment.
II. FACTS AND PROCEEDINGS
A. Facts
Shortly after 5:00 p.m. on September 1, 1995, Monica
Fleegel sat in her car waiting for the light to turn green at the
intersection of 36th Avenue and Denali Street in Anchorage.
Before the light changed, Fleegel's car was hit by a pick-up
truck driven by Michael Boyles. Boyles failed to stop at the
accident scene.
After the collision Fleegel felt pain in her nose,
head, neck, chest, back, and hand. All of the injuries
ultimately healed except for the injury to Fleegel's left hand.
As a result of the collision, the tendon of Fleegel's left wrist
pulled off its attachment to the thumb, taking bone with it and
causing an avulsion fracture. Fleegel's orthopedic surgeon
testified that such injuries can result in long-term pain
associated with certain activities. In the intervening years
since the collision, Fleegel has undergone a variety of
treatments for her injury. She has received injections of anti-
inflammatory medication, had a cast on her arm for three weeks,
and has worn splints for varying periods of time almost every day
since the accident. Long-term treatment of the injury involves
wearing a splint and taking anti-inflammatory medication.
Fleegel has also been advised that the injury leaves her at
increased risk for premature arthritis in the joint.
Fleegel used approximately forty-two hours of sick
leave during her initial recovery from the collision. The
parties stipulated that she incurred $5,417 in medical expenses,
which State Farm Mutual Automobile Insurance Company, insurer of
both Fleegel and Boyles, paid.
Boyles admitted that he was under the influence of
alcohol and Valium at the time of the collision. Boyles
participated in alcohol treatment programs in the years both
before and after the collision. He also had a medical history
that included an anxiety disorder, panic attacks, depression,
post-traumatic stress disorder, and various gastrointestinal
disorders related to alcoholism.
After the accident, the Municipality of Anchorage
charged Boyles with leaving the scene of an injury accident and
reckless driving. Boyles pleaded no contest to the charges. As
part of his sentence, Boyles was required to complete treatment
recommended by the Anchorage Alcohol Safety Action Program
(ASAP). Seven months after the collision with Fleegel, Boyles
was again charged with driving while intoxicated. He claimed to
have stopped driving after that incident.
B. Proceedings
Fleegel filed suit against Boyles seeking compensatory
and punitive damages. Boyles admitted liability and acknowledged
that "consumption of alcohol was one of the causes of this
accident."
Fleegel filed a motion in limine requesting that all
references to insurance "be deleted" from the evidence at trial,
or, in the alternative, that all potential jurors insured by
State Farm Insurance be excused for cause. The superior court
ruled that because Boyles's insurance coverage had relevance to
punitive damages it could be discussed, but that the name of the
company providing the insurance could not be mentioned.
Fleegel also sought to introduce as evidence at trial
an outstanding warrant against Boyles for failure to comply with
ASAP requirements. The trial court deemed the warrant
inadmissible.
Boyles planned to present at trial a videotaped
deposition of Dr. James Peach, a gastroenterologist who treated
Boyles in the two years prior to trial. Fleegel sought to
exclude Dr. Peach's testimony on the ground that it was
irrelevant. Fleegel also sought to exclude medical records
relied upon and discussed by Dr. Peach during his testimony. The
trial court overruled Fleegel's objections to Dr. Peach's
testimony, finding Dr. Peach's discussion of Boyles's alcoholism
relevant to social standing and financial condition as they
related to the punitive damages claim. Moreover, the trial court
determined that Dr. Peach's reference to the medical records of
other doctors was permissible because these records formed the
foundation for Dr. Peach's opinion. But the trial court agreed
with Fleegel that the "actual packet of records that were
included in the deposition" should not be admitted. Fleegel
later sought to present two records of other physicians who had
treated Boyles, which were contained in Dr. Peach's file. The
trial court denied that request.
The case was tried before a jury on December 14-17,
1998. Other than a statement by Boyles's attorney during voir
dire that he had been retained by Boyles's insurance carrier to
represent Boyles, no mention or evidence of Boyles's insurance
coverage was made during trial. On the stipulation of the
parties, the trial court did give a jury instruction stating that
Boyles "has insurance coverage."
Prior to beginning deliberations, a juror asked: "are
. . . punitive damages direct[ed] to Mr. Boyles or to the
insurance company?" The court responded: "I cannot give you a
direct answer to that question. No evidence [of insurance] was
presented regarding what items of damage may be covered by Mr.
Boyles's insurance. Therefore, you may not speculate whether any
particular item of damage is covered by insurance."
The jury returned a special verdict finding that (1)
the negligence of Boyles was a legal cause of injury to Fleegel;
(2) Fleegel suffered damages in these amounts: $1,140 in past
economic loss, $7,500 in past non-economic loss, $1,000 in future
economic loss, and $3,500 in future non-economic loss -- for a
total of $13,140 in damages; (3) punitive damages should be
awarded against Boyles; and (4) the amount of punitive damages
awarded against Boyles should be zero.
Because Boyles made a Rule 68 offer of judgment that
substantially exceeded the jury award, the trial court determined
that Boyles was the prevailing party, and awarded him $6,000 in
attorneys fees, $1,990.71 in costs, and $50 in expert witness
fees. After subtracting Boyles's award of $8,040.71 from
Fleegel's compensatory damages award of $14,703.40, the trial
court entered judgment for Fleegel for $6,662.29.
Fleegel moved for Civil Rule 60(b)2 relief from the
judgment on the basis of AS 09.60.070, which awards "full
reasonable attorney fees" to victims of certain crimes, including
driving while intoxicated.3 The trial court granted Fleegel's
motion and ultimately determined that both parties were entitled
to attorney's fees -- Boyles for making a pretrial settlement
offer more generous than the jury award,4 and Fleegel as the
victim of a serious crime. Accordingly, the trial court added
one-third of Fleegel's net recovery of $6,662.29 ($2,220.90) to
compensate Fleegel for her attorney's fees5 under the crime
victims' statute, AS 09.60.070, yielding a total judgment in
favor of Fleegel of $8,883.59 ($6,662.29 plus $2,220.90). The
trial court entered amended judgments on September 27, 1999 and
January 31, 2000.
Fleegel appeals a number of the trial court's
evidentiary rulings. Boyles cross-appeals the attorney's fees
award to Fleegel under the crime victims' statute, AS 09.60.070.
III. STANDARD OF REVIEW
We review a trial court's decision to admit or exclude
evidence for abuse of discretion.6 Decisions about the
admissibility of evidence are committed to the sound discretion
of the trial court.7 We will only reverse evidentiary rulings if
upon review of the record as a whole we are left with the
definite and firm conviction that the trial court erred in its
ruling and the error affected the substantial rights of a party.8
Boyles's cross-appeal requires this court to interpret
AS 09.60.070. As we have stated, "[t]he independent judgment
standard of review is exercised by this court when the
interpretation and application of a statute is at issue,"9 and
"[t]he interpretation of a statutory provision . . . is a
question of law [that we resolve] by adopting 'the rule of law
that is most persuasive in light of precedent, reason, and
policy.'"10
IV. ARGUMENT
A. The Trial Court Did Not Err in Its Evidentiary Rulings.
1. The trial court did not err in admitting evidence
of insurance coverage without reference to the
insurance carrier's name.
Fleegel's motion in limine requested that the trial
court either direct that no references to insurance be made in
exhibits and evidence, or excuse for cause all potential jurors
who were insured by Boyles's insurance carrier, State Farm.
Fleegel cited concern that evidence of insurance would improperly
influence jurors, who might fear that a high punitive damages
award would raise their own insurance rates.
The superior court declined both of Fleegel's requests.
However, the court did rule that the parties could not mention
the name of Boyles's insurance carrier, State Farm. Fleegel
appeals the denial of both of her requests.
a. The superior court did not err in denying the
motion to exclude evidence of insurance
coverage.
The trial court ruled that insurance had relevance to
Boyles's financial condition as it related to punitive damages
and declined to prohibit evidence of insurance coverage. The
trial court explained its reasoning: "[E]ven if the insurance .
. . only covers the compensatory damages, it goes to the issue of
the defendant's financial condition."11 The trial court further
determined that evidence of insurance coverage would not
improperly influence the jurors: "I disagree . . . that jurors
will speculate as to whether it's their insurance or not and
whether their rates will be affected by what they do." The trial
court also ruled that the parties could not mention the name of
the insurance carrier, State Farm. Fleegel argues on appeal that
these rulings constituted prejudicial error.
The financial condition of a party is a relevant factor
in considering a claim for punitive damages. In Sturm, Ruger &
Co. v. Day, we recognized that the wealth of a defendant is an
important factor that bears on the amount of punitive damages.12
We also applied this factor in our analysis of the
appropriateness of the punitive damages award in Norcon v.
Kotowski.13 Furthermore, the Alaska Legislature established in a
subsequently enacted statute, not applicable to this case but
still informative, that the trier of fact may consider the
financial condition of the defendant when determining the amount
of punitive damages.14
In Shane v. Rhines, all five justices of this court, in
majority, concurring, and dissenting opinions, agreed that
insurance coverage in particular was relevant to a determination
of a punitive damages award.15 Two members of the majority stated
that "evidence of insurance arguably is relevant to the
appropriate measure of punitive damages," but concluded that the
trial judge's decision to exclude insurance evidence was harmless
error because the jury ultimately found no liability for punitive
damages.16 Justice Compton, in a concurring opinion, advocated
for the use of bifurcated trials in cases involving a claim for
punitive damages.17 He noted that at the second phase of the
trial, "the needed evidence of the defendant's wealth, including
evidence of any insurance coverage, could be presented."18 And
Justices Burke and Matthews noted in their dissent that "[a]
defendant's insurance policy is a part of his financial resources
and will obviously affect the degree to which a defendant is
punished by a punitive damage award."19
A number of courts permit insurance evidence to rebut a
defendant's attempt to portray himself as too poor to pay an
award of punitive damages.20 These cases stem from the
plaintiff's attempt to introduce the defendant's ability to pay
because of his insurance.21 In this case, defendant Boyles wanted
evidence admitted of his insurance coverage. A review of
decisions in other jurisdictions indicates that no court has held
that introduction of insurance evidence is reversible error
because it is prejudicial to a plaintiff, as Fleegel argues.
Also, Alaska Evidence Rule 411 does not require
reversal of the superior court's ruling. Fleegel argues that
evidence of liability insurance, even if it is relevant, is
generally inadmissible under Evidence Rule 411. But Rule 411
establishes that evidence of liability insurance "is not
admissible upon the issue whether the person acted negligently or
otherwise wrongfully." (Emphasis added.) Rule 411 "does not
require the exclusion of evidence of insurance against liability
when offered for another purpose."22 Liability was not contested
in this case; Boyles admitted liability. The trial court focused
on the relevance of insurance to Boyles's financial condition, a
purpose not excluded under Rule 411. Therefore, the trial court
did not err in failing to exclude evidence of insurance coverage.
b. The superior court did not err in refusing to
exclude all jurors who carried State Farm
insurance.
Fleegel alternatively sought, if the court permitted
evidence of insurance, to exclude all jurors who carried State
Farm insurance. The trial court denied Fleegel's request and
ruled that "there won't be any mention of the name of the company
providing the coverage, and you can voir dire on insurance
questions, but no one can mention State Farm." Fleegel appeals
this ruling, arguing that even if an award has little or no
actual effect on insurance rates, the jurors' perception that
they have a financial interest in the outcome of the case
unfairly prejudiced them against an award of punitive damages.
On appeal Fleegel suggests that at least four members
of the jury demonstrated during voir dire concern about insurance
rates rising because of lawsuit verdicts. Fleegel did not,
however, challenge these jurors for cause on the grounds of
either bias23 or preexisting opinions as to what the outcome
should be.24 Fleegel also did not use a peremptory challenge to
remove any of these four jurors.
Whether a juror is dismissed for cause is within the
discretion of the trial court.25 The trial court here carefully
considered whether a potential juror's insurance carrier had
relevance to any conflict of interest. It noted that most jurors
know that there is insurance in liability cases, but that common
practice dictates that "we don't inquire . . . who the carrier is
and excuse those jurors." Moreover, Fleegel has not shown that
any prejudice occurred as a result of the ruling.26 We therefore
find no error.
The dissent argues that our holding today contradicts
our rulings in Malvo v. J.C. Penney Company, Inc.27 and Reich v.
Cominco Alaska, Inc.28 These cases stand for the proposition that
jurors who fall within certain Civil Rule 47(c) categories must
be dismissed for cause. Specifically, in Reich, we recently held
that there is a "per se rule allowing challenges for cause of
prospective jurors with a financial interest in the litigation."29
The dissent posits that State Farm insureds have a financial
interest in the present case. We disagree for two reasons: (1)
the jurors who had State Farm insurance only had an indirect
financial interest in the litigation, and (2) they were unaware
of any possible financial interest in the litigation.
In Reich, we discussed whether indirect financial
interest was sufficient to disqualify jurors under Civil Rule
47(c). Reich held that a trial court must dismiss from the jury
pool stockholders of companies that have direct financial
interests in the outcome of the litigation, even if the companies
are not actual parties to the litigation.30 Reich also discussed
Harmotta v. Bender.31 The challenged jurors in Harmotta were
members of the Roman Catholic Church, and the case involved a
Roman Catholic parish in the same diocese as the potential
jurors.32 We distinguished Harmotta from Reich by stating that
"there was only a possibility church members would be called on
to reimburse the church."33 The same is true in this case.
If the jury returned a punitive damages award against
Boyles, State Farm insureds would only have a possibility of
bearing a cost, and that cost would be minimal. Insurance
premiums already take into account that trials will subject some
insureds to significant damages awards, so a damages award would
not automatically raise all insureds' premiums. The financial
interest that State Farm insured jurors have in this case is
speculative at best. Furthermore, unlike the situations in Reich
and J.C. Penney, where the jurors knew that J.C. Penney and NANA
were parties affected by the suits, State Farm insureds did not
know that State Farm was involved or might be affected by this
lawsuit. As a result, we cannot agree with the dissent's
assessment that Civil Rule 47(c) required State Farm insureds to
be dismissed for cause from the jury pool.
The dissent also contends that if Civil Rule 47(c)
requires the exclusion from juries of persons with financial
interest, then the trial court must inquire into those financial
interests. We agree that a trial court must inquire about any
financial interest known to a juror. We do not agree, however,
that the trial judge must make known to a juror an unknown
financial interest in the litigation. We note that the dissent
cites no authority to support the contention that courts must
inform jurors of potential financial interests of which the
jurors are unaware.
2. The trial court did not err in excluding evidence
of Boyles's outstanding arrest warrant.
The district court issued a warrant on July 16, 1998,
to arrest Boyles for failure to comply with ASAP requirements.
Fleegel sought to introduce this warrant as evidence at trial.
Fleegel's offer of proof provided the following reasons for
seeking admission of the warrant: (1) to impeach Boyles by
showing that his probation had in fact been revoked, and (2) to
demonstrate why Boyles was not in court at trial on December 15,
1998. The trial court ruled that evidence of the warrant was not
admissible, reasoning that the evidence had only a tenuous
connection with material issues in this case and was not
probative of why Boyles was not present at trial. The court also
determined that even if the evidence was minimally probative, it
would waste time and generate confusion about the details of
enforcing alcohol treatment orders.
Even without evidence of the warrant, Fleegel was able
to adduce evidence and make the arguments that no evidence
existed that Boyles actually was in a recovery program; that
Boyles had lied in the past about his participation in a
treatment program; and that Boyles had engaged in manipulation to
avoid having the full brunt of his criminal sanctions imposed.
The trial court did not abuse its discretion, and the
ruling did not substantially impair Fleegel's rights. We
therefore find no error.
3. The trial court did not err by admitting the
testimony of Boyles's gastroenterologist.
At trial Boyles presented the videotaped deposition of
Dr. David Peach, a doctor who specializes in gastroenterology --
diseases of the stomach, intestines, and liver. Dr. Peach
testified about his treatment of Boyles and the medical records
that he received from other physicians and alcohol treatment
facilities regarding Boyles.
Fleegel objected to the foundation of Dr. Peach's
testimony, its relevance, and Dr. Peach's competency to testify
regarding issues of the case, particularly given that he
specializes in gastroenterology rather than psychiatry or
psychology. The trial court overruled Fleegel's objections,
determining that the testimony had relevance and that an adequate
foundation had been provided. It explained its reasons for this
ruling:
This is a punitive damage case and the
defendant's social standing and financial
condition are relevant to a punitive damage
case. All of Dr. Peach's testimony regarding
the defendant's alcoholism is relevant to
those issues, social standing and financial
condition. There's an adequate foundation
for Dr. Peach to testify regarding those
issues: he treated the defendant for
alcoholism and he participated in proceedings
to have the defendant committed to a hospital
for further treatment.
The trial court also allowed Dr. Peach's references to Boyles's
other medical providers because these records formed a partial
basis for Dr. Peach's opinions.
In addition to the relevancy, foundation, and
competency arguments made at trial, on appeal Fleegel argues that
this evidence had an unfair effect by distracting the jurors and
generating undue sympathy for Boyles. She alleges that Boyles
used Dr. Peach's testimony improperly to present inadmissible
hearsay and other inappropriate information to the jury.
The trial court did not abuse its discretion in
determining that Dr. Peach's testimony was relevant to the issues
of Boyles's social standing and financial condition. Dr. Peach
testified regarding Boyles's "inability to function as a
reasonable human in society" as a health consequence of his
alcoholism. Moreover, Dr. Peach presented some evidence related
to Boyles's financial condition, including a hospital admission
form that listed Boyles's occupation as "disabled" and the nature
of Boyles's medical problems from which the jury could reasonably
infer that Boyles could not work. The trial court did not err in
determining that Dr. Peach's testimony was relevant to Boyles's
social standing and financial condition as they related to the
punitive damages claim.
4. The trial court did not commit reversible error by
excluding from evidence other medical records
contained in Dr. Peach's file.
Fleegel successfully prevented the admission at trial
of Boyles's actual medical records, even though these records
were used as exhibits during Dr. Peach's video deposition. But
later during trial, Fleegel sought to supplement her exhibits
with other of Boyles's medical records contained in Dr. Peach's
file, which the doctor had not referred to during the deposition.
The documents that Fleegel wished to admit concerned Boyles's
medical condition near the time of the collision and his refusal
to enter alcohol treatment programs.
The trial court ruled that Fleegel could not supplement
her exhibits with the medical records in the absence of a witness
providing an explanation and foundation for the records. It also
found that "[t]hose records could have been discussed during Dr.
Peach's deposition and, had they been discussed, they likely
would have been . . . admitted." Additionally, it determined
that Fleegel was not significantly prejudiced by the exclusion of
these records because other evidence in the record supported the
points for which Fleegel wanted the records presented.
Any error in excluding the medical records was harmless
because, as the trial court observed, Fleegel was able to show
through other evidence that Boyles did not cooperate in his
treatment. The trial court explained: "There's significant other
evidence in the record regarding Mr. Boyles['s] failure to comply
with treatment recommendation which is the subject matter
addressed by those records." Indeed, Dr. Peach's testimony
provided evidence of repeated substance abuse treatment attempts,
subsequent relapses, and non-compliance with treatment
recommendations. Moreover, Fleegel did not avail herself of the
opportunity to call Dr. Peach as a live witness to discuss the
desired records or to call the doctors and other medical
personnel who prepared the disputed records as witnesses.
Therefore, this ruling does not warrant reversal.34
5. The trial court's evidentiary decisions
do not constitute cumulative error requiring
reversal.
Fleegel has presented on appeal challenges to several
evidentiary decisions of the trial court. She urges this court
to apply the doctrine of "cumulative error" to find that even if
each individual error was harmless, the impact of the errors have
deprived her of a fair trial. In this case, the record included
evidence from which Fleegel could make all of the arguments
consonant with her theory of the case. Therefore, the trial
court's rulings did not violate Fleegel's right to a fair trial,
and reversal is not warranted.
B. The Trial Court Did Not Err by Awarding Attorney's Fees
to a Criminal Victim Who Was Not the "Prevailing Party"
Under Civil Rules 68 and 82.
Although Boyles was the prevailing party under Rule 68
and thus entitled to an award for attorney's fees under Rule 82,35
the trial court concluded that it was proper to offset that fee
award against a separate award to Fleegel as the victim of a
serious crime.
Alaska Statute 09.60.070(a) provides that a person who
has been injured may recover from the tortfeasor full reasonable
attorney's fees in a civil action if the injury resulted from an
attempt on the part of the offender to commit a serious criminal
offense.36 A "serious criminal offense" includes driving while
intoxicated.37 We have never before addressed the interaction of
this statute with other statutes and rules regarding attorney's
fees.
1. A crime victim need not be the "prevailing party"
as defined by Rule 68 to be awarded attorney's
fees under AS 09.60.070.
Boyles argues that Fleegel should not have received an
award of attorney's fees because Boyles was the prevailing party
for purposes of attorney's fees. Boyles contends that he is the
prevailing party based on his Rule 68 offer that exceeded the
jury award of damages against him. He argues that as the
prevailing party, his right to attorney's fees under Alaska Civil
Rule 82 preempts Fleegel's right to receive attorney's fees under
the crime victims' statute, AS 09.60.070.
The superior court attempted to reconcile the
provisions that separately provide attorney's fees for victims of
serious crimes and for parties who make a pretrial settlement
offer more generous than the jury award. It determined that
"[b]ecause each statute can be applied here without doing harm to
the purposes behind the other . . . each party is entitled to an
award of fees."
Boyles argues that the crime victims' statute, AS
09.60.070, "incorporates the prevailing party restriction of Rule
82," the rule providing attorney's fees to the prevailing party
in a civil case.38 However, AS 09.60.070 contains no prevailing
party requirement and appears to have been intended to apply
independently of Civil Rule 82.
Cases prior to the 1997 amendment of AS 09.30.065 (the
offer-of-judgment statute) and Rule 68 (the offer-of-judgment
rule) defined "prevailing party" as the party "successful with
regard to the main issues in the action."39 When in 1991 the
legislature adopted AS 09.60.070,40 the crime victims' statute,
Rule 82 provided for attorney's fees for the "prevailing party"
in a civil case without defining that term. The act enacting the
crime victims' statute amended Rule 82 "by requiring an award of
full reasonable attorney's fees to prevailing victims of certain
crimes."41 This amendment therefore directed that the provision
allowing full attorney's fees for crime victims replace the
partial attorney's fees award that the crime victim could
otherwise recover under Rule 82 had she prevailed in the civil
action. This is consistent with the legislative intent, as
expressed by then-Representative Dave Donley, a sponsor of the
victims' rights bill, to "readjust[] the balance between victims
and the perpetrators in the system by making the experience of
being involved in a crime a little less burdensome" and "allowing
victims of violent crimes to recover . . . full attorneys fees in
civil cases brought against the person who committed th[e]
crime."42
It was not until 1997, six years after the crime
victims' statute was enacted, that the legislature established
that the offeror of a settlement that met certain standards
"shall be considered the prevailing party for the purposes of an
award of attorney's fees under the Alaska Rules of Civil
Procedure."43 Therefore, at the time it enacted the provision
awarding attorney's fees to crime victims, the legislature could
not have contemplated that the 1997 offer-of-judgment definition
of prevailing party would apply. And when the legislature
enacted amendments to the offer-of-judgment rule in 1997, it did
not specifically address the crime victims' statute.
We have determined that the "prevailing party"
requirement of Rule 82 does not limit the ability to award
attorney's fees under other statutory provisions that use
standards separate from Rule 82. For example, a spouse may seek
attorney's fees during a divorce or annulment proceeding under AS
25.24.140.44 Considerations other than "prevailing party" dictate
whether such fees are awarded: "Cost and fee awards in a divorce
are not to be based on the prevailing party concept, but
primarily on the relative economic situations and earning powers
of the parties."45
Moreover, the interpretation of federal fee-shifting
statutes by federal courts indicates that an offer-of-judgment
rule and statutory fee-shifting coexist. Federal Rule of Civil
Procedure 68 differs from Alaska Civil Rule 68 in that the
federal rule allows the recovery of "costs" and does not specify
whether "costs" includes attorney's fees.46 Where attorney's fees
are statutorily awarded, in cases under the Clean Air Act and
Fair Labor Standards Act, for example, rejection of a Federal
Rule 68 offer does not preclude an award for post-offer fees.47
Professors Wright, Miller, and Marcus also indicate that an
offset of attorney's fees could be appropriate, in warning that
"courts must be careful to avoid the sort of automatic
prohibition on post-offer fees imposed by Rule 68."48
We therefore affirm the trial court's award of fees on
the basis that a crime victim need not be a "prevailing party" to
be awarded attorney's fees under AS 09.60.070, the crime victims'
statute. Apart from questioning the hypothetical propriety of
requesting full fees in the context of a contingent fee
arrangement, Boyles does not challenge the propriety of hybrid
fees or the specific calculation method used by the trial court.
Because these issues were not briefed, we decline to reach them.
2. Timing of motion for attorney's fees
Boyles also argues that the trial court should not have
awarded Fleegel attorney's fees under AS 09.60.070, the crime
victims' statute, because a motion for these fees was not filed
within ten days after the date of judgment. Civil Rule 82(c)
establishes the time period in which attorney's fees must be
requested: "Failure to move for attorney's fees within 10 days,
or such additional time as the court may allow, shall be
construed as a waiver of the party's right to recover attorney's
fees."
The initial judgment order was distributed on January
29, 1999. On May 14, 1999, Fleegel filed a motion requesting
that the superior court vacate the initial judgment and enter a
new judgment that conformed with AS 09.60.070, the crime victims'
statute. Fleegel sought relief under Alaska Civil Rule 60(b),
which permits the court to relieve a party from a judgment for
reasons of mistake, inadvertence, or excusable neglect where a
motion seeking such relief is filed "within a reasonable time."49
The superior court granted the motion for relief from judgment on
June 14, 1999, finding that such relief served "the interests of
justice."50 Because Fleegel sought relief from judgment under
Civil Rule 60(b), rather than attorney's fees under Civil Rule
82(c), the limitations period for Civil Rule 82(c) does not
apply.
The trial court did not abuse its discretion in
determining that Fleegel did not waive her request for attorney's
fees.51 We therefore affirm the attorney's fee award on its
merits.
V. CONCLUSION
We AFFIRM the evidentiary rulings made by the trial
court. We also AFFIRM the attorney's fee awards.
BRYNER, Justice, with whom CARPENETI, Justice, joins, dissenting.
I disagree with the opinion's conclusions concerning
the admissibility of evidence of Boyles's insurance coverage and
the propriety of denying Fleegel's alternative motion to exclude
for cause all prospective jurors who were State Farm
policyholders. I would reverse on those points.
EVIDENCE OF BOYLES'S INSURANCE COVERAGE
The opinion concludes that the superior court correctly
denied Fleegel's motion to exclude evidence of Boyles's insurance
coverage, reasoning that Alaska Evidence Rule 411 did not
preclude this evidence because evidence of a defendant's wealth
has relevance independent of fault in a punitive damages case:
"The trial court focused on the relevance of insurance to
Boyles's financial condition, a purpose not excluded under
Rule 411. Therefore, the trial court did not err in failing to
exclude evidence of insurance coverage."1 But the opinion's
analysis overlooks persuasive authority to the contrary and skips
two important questions in the chain of admissibility: whether
insurance coverage actually is relevant evidence of wealth and,
if it is, whether its prejudicial effect outweighs its probative
value.
While the opinion correctly observes that evidence of
the defendant's wealth is normally relevant in a punitive damages
case,2 it neglects to ask if evidence of insurance coverage for
punitive damages is relevant evidence of wealth under the
specific facts of this case. Here, assuming that Boyles had
shown that he was covered for punitive damages,3 evidence of his
coverage would have been irrelevant to prove his wealth. For as
the New Mexico Supreme Court recognized, "[P]unitive damages
liability coverage is not an asset which can be used to measure
true punishment and . . . therefore, it should not be considered
by the jury in assessing a defendant's financial standing."4
Wisconsin has recently ruled the same way: "Although we note
that when assessing punitive damages a jury is permitted to know
evidence of the wrongdoer's wealth, insurance coverage is not
evidence of wealth."5
And even if evidence of coverage were deemed relevant
to the issue of wealth in a punitive damages case, Evidence Rule
403 would preclude its admission if the trial court found that
the probative force of that evidence was outweighed by "the
danger of unfair prejudice, confusion of the issues, or
misleading the jury."6 Here, the trial court never undertook the
balancing process prescribed by Rule 403. But it seems to me
that the potential prejudicial effect of the disputed evidence
far outweighed whatever limited probative value it might have
had. As evidenced by a juror's all-too-predictable request to
know whether "punitive damages [are] direct[ed] to Mr. Boyles or
to the insurance company," as well as by the jury's anomalous
punitive damages verdict (which found Boyles deserving of
punishment but imposed no punitive damages), the trial court's
unfortunate decision to allow the jury to learn of Boyles's
insurance coverage opened the door to precisely the kind of
danger that Rule 403 was designed to prevent: causing confusion
and misleading the jury.
New Mexico and Wisconsin have both suggested that
evidence of coverage would have to be excluded as more
prejudicial than probative, even if it were relevant.7 Texas
agrees.8 And most recently, Idaho has reached the same
conclusion.9 Indeed -- barring a narrow exception carved out for
a situation not presented here -- it appears that no other court
addressing this issue has found such evidence admissible.10 The
narrow exception is a curative one: it allows plaintiffs to admit
evidence of coverage to rebut a defense that a defendant is
impoverished and therefore unable to pay punitive damages.11
Shane v. Rhines, which today's opinion holds out as its
guiding authority,12 is just such a case: it considered whether
evidence of coverage was admissible to rebut the defendant's
affirmative claim of poverty.13 Neither Shane's per curiam
plurality nor either of its separate opinions purports to hold
that evidence of coverage should be admitted except as actually
needed to cure a misleading impression left by affirmative
evidence of poverty. And notably, in Schaefer v. Ready, a more
recent punitive damages case in which admission of evidence
proving a defendant's coverage was sought to cure affirmative
evidence of poverty, the Idaho Supreme Court held that the better
approach would be to exclude with one stroke both the affirmative
defense and the consequent need for rebuttal.14
Shane and Schaefer, then, both serve to illustrate that
necessity plays an indispensable role in Evidence Rule 403's
balancing process. Evidence that is arguably relevant but has an
obvious potential to cause prejudice should be admitted under the
rule only when a realistic, case-by-case assessment reveals an
apparent need for its admission that predominates over its
potential to confuse, mislead, or unfairly prejudice the jury.
In the present case, there was no conceivably
legitimate need for evidence of Boyles's insurance coverage. For
Boyles's counsel himself injected the fact of coverage; and he
did so not to refute evidence that Boyles was unable to afford
punitive damages. To the contrary, defense counsel relied on this
information to forward a novel theory: that because Boyles -- the
only truly guilty party -- could not pay punitive damages, his
innocent insurer should not be targeted for punishment in his
place.
Yet this theory of relevance -- the only theory that
the disputed evidence of coverage realistically tended to support
-- is disingenuous and fundamentally subversive to the public
interest. Insurance is a regulated industry in Alaska, as it is
almost everywhere else in the nation, because the state
recognizes a strong public interest in fostering trust in
insurers and in protecting consumers who choose to buy
coverage.15 Once insurers contract to pay claims for punitive
damages, then, the state has a strong public interest in ensuring
that coverage is fairly provided and claims fairly paid. It
would be inimical to this public interest if insurers could avoid
legal responsibility for contractual obligation by the simple
expedient of insisting that they are innocent parties and that
their insured drivers should be punished only to the extent of
their personal ability to pay.
Correspondingly, there is simply no factual basis for
arguing that the insurer's liability to pay punitive damages
amounts to punishment for the insurer: to an insurer that accepts
premiums to cover punitive damages, the obligation to pay an
insured driver's punishment is simply a business debt that the
company has contracted to pay. In my view, then, there was no
legally permissible reason to allow Boyles's counsel to inform
the jury that Boyles was insured.
Nor can the record sustain a finding of harmless error.
Appellate courts have long recognized that evidence of insurance
coverage can easily inflame juries; courts have likewise
recognized that the risk of prejudice inherent in such evidence
poses especially grave dangers in punitive damages cases,16 where
the prejudice can cut either way, acting as "a two-edged sword
depending on the wealth or poverty of the defendant."17 And
courts have further recognized that this sword of unfair
prejudice is no less dangerous when wielded by an insured
defendant than when in the hands of an injured plaintiff.18
Here, Boyles's attorney artfully wielded the sword
against Fleegel. After convincing the trial court at the outset
of the proceedings to deny Fleegel's motion to exclude evidence
of coverage, Boyles's counsel immediately told the jury during
voir dire that he had been hired by Boyles's insurer. Fleegel
did everything she could to contain the inevitable damage flowing
from this revelation: she downplayed the issue, allowed Boyles's
attorney no obvious opening to dwell on Boyles's coverage during
the trial, and stipulated to an instruction at the end of trial
that mirrored the court's pretrial ruling and told the jury no
more than defense counsel took pains to tell it at the outset --
that Boyles was insured and was represented by a lawyer hired by
his insurer.
Despite Fleegel's best efforts, defense counsel used
Boyles's coverage as the foundation for a successful empty-chair
defense: a tactic that emphasized Boyles's absence and poverty
and that invited the jury to conclude that his insurer had been
unjustly left holding the bag -- abandoned by the only truly
guilty party. Defense counsel's first words in closing argument
reminded the jury that Boyles's insurer was the real party in
interest: "It's pretty silly to argue that an insurance company
likes a hit-and-run driver or a drunk driver." Defense counsel
proceeded to emphasize that Boyles would not be deterred by an
award of punitive damages, since "[h]e doesnt have any assets."
And the point was cemented in defense counsel's final words to
the jury: "[I]t's quite clear that they're not really trying to
get money back from Mr. Boyles. He doesn't have any capacity to
pay . . . . [H]e's not the target here."
Yet in the eyes of the law Boyles was Fleegel's only
target -- whether Boyles had insurance or not. Evidence of his
coverage -- or possible coverage -- was both immaterial as a
matter of law and irrelevant as a matter of fact. But as
illustrated by the jury's question concerning punitive damages
and its ensuing verdict, Boyles's strategy nonetheless had its
intended effect.
Today's opinion nonetheless declines to find error,
professing an inability to locate any cases holding that
"introduction of insurance evidence is reversible error because
it is prejudicial to a plaintiff."19 Yet this absence of
precedent is beside the point.20 A novel tactic whose sole
purpose is to prejudice an opponent is hardly proper merely
because it has never before been condemned; and the fact that the
tactic prejudices a plaintiff rather than a defendant is wholly
irrelevant.
More to the point is the opinion's refusal to follow
well-settled law that allows evidence of coverage to be admitted
only when offered by a party seeking to refute an opponent's
affirmative claim of inability to pay punitive damages. And more
telling still is the opinion's failure to identify any legitimate
purpose that evidence of coverage could conceivably serve when
offered on behalf of a party like Boyles, who actively asserted
that he was too poor to pay punitive damages.
On this record, then, it is simply unrealistic to find
either an absence of error or harmless error.
DISQUALIFICATION OF STATE FARM POLICYHOLDERS
I also disagree with the opinion's decision to affirm
the trial court's denial of Fleegel's alternative motion to
excuse State Farm policyholders from serving on her jury.
As a contingent remedy to be used in the event that the
court denied her motion to preclude evidence of Boyles's
insurance coverage, Fleegel asked the superior court for voir
dire examination to identify and excuse for cause all members of
the jury panel who were insured by State Farm. The court denied
the motion, instead precluding any mention of State Farm by name
and barring any inquiry as to the identity of prospective jurors'
insurers. In upholding this ruling, today's opinion posits that
"[w]hether a juror is dismissed for cause is within the
discretion of the trial court."21 The opinion then concludes
that the superior court did not abuse its discretion.22
But the opinion is mistaken in assuming that Fleegel's
challenge for cause raised a discretionary issue. Alaska Civil
Rule 47(c)(10) and (12) categorically require a challenge for
cause to be granted as to any prospective juror who is a client
of a party or who has a financial interest in the outcome of the
case.23 Our decisions applying these provisions explicitly
recognize that they prohibit "certain relationships between
jurors and parties" and that "[a] trial judge does not have
discretion to deny a challenge for cause once that relationship
has been established."24
In my view, when a court presiding over a punitive
damages claim allows an insured defendant to tell the jury that
the defendant's insurance company is the real party in interest -
- the plaintiff's real "target" -- this information inevitably
creates a genuine risk that jurors who are policyholders of the
same insurer, or who think that they might be, will perceive a
financial interest in the outcome. The financial interest here
is certainly no more attenuated than the one at issue in Reich v.
Cominco Alaska, Inc., where we held that Rule 47(c)(12) required
automatic disqualification of all prospective jurors who were
shareholders in an Alaska Native corporation that was not a party
to the litigation but had financial ties to the named defendant
and stood to benefit indirectly from the outcome of the case.25
And this interest is at least as substantial as the one in Malvo
v. J.C. Penney Co., where we held that Rule 47(c)(10)
categorically required exclusion of all prospective jurors who
had accounts with J.C. Penney and therefore technically qualified
as the companys "debtors."26
In reaching the opposite conclusion here, today's
opinion posits that "[t]he financial interest that State Farm
insured jurors have in this case is speculative at best."27 But
the opinion's analysis of the closeness of the relationship
between policyholders and their insurers is misdirected, for Rule
47(c)(10) expressly preempts the issue. As already mentioned,
Rule 47(c)(10) categorically excuses all prospective jurors who
are "clients" of a party or an attorney.28 Since policyholders
are undeniably clients of their insurers, Rule 47(c)
unequivocally deems the financial relationship between insurance
companies and their policyholders sufficiently close to require
automatic disqualification in any action where a policyholder's
insurer is a party or an attorney.
Suppose for example that State Farm was actually named
as a defendant in a lawsuit: there would be no doubt that its
policyholders would have a sufficiently close financial interest
to require their automatic disqualification as "clients" under
Rule 47(c)(10). Because the financial relationship between State
Farm and its policyholders is no different here than it would be
if State Farm were a named party, it follows that the
policyholder/insurer relationship itself is sufficiently close to
warrant disqualification, provided that the other requirements of
Rule 47 are met. The critical question, then, is whether the
role State Farm played in this case justifies treating it as a
party.
In the run-of-the-mill personal injury case against an
insured party, of course, an insurer's role might be insufficient
to warrant treating it as a party under Rule 47. But when a
policyholder acting through counsel retained by an insurer
expressly reveals the existence of coverage and portrays the
insurer as the plaintiff's true "target," it seems to me that, in
terms of triggering concerns for potential jury bias, the
insurer's role becomes virtually indistinguishable from the role
it would play as an actual party. Hence, in this situation I
would conclude that the insurer must be treated as a party under
Rule 47(c)(10)'s provisions governing automatic disqualification
of clients.
In the proceedings below, the superior court's order
restricting jury voir dire precluded Fleegel from establishing
the very relationship that would have triggered Rule 47(c)'s
mandatory right to a challenge for cause. True, the order also
prevented the jury panel from learning the name of Boyles's
insurer. But this precaution hardly cured the potential for
prejudice: by allowing Boyles to tell the jury that he was
insured by an unnamed insurer, the trial court effectively left
all insured jurors -- not just those insured by State Farm -- to
speculate about what impact a punitive damages verdict might have
on their own insurance premiums.
Thus, in my view, concealing State Farm's identity was
no more acceptable here than shielding J.C. Penney's identity
would have been in Malvo v. J.C. Penney Co. or shielding the
Native corporation's identity would have been in Reich v. Cominco
Alaska, Inc. As shown by the jury's question and its ensuing
verdict, the superior court's approach simply spread the danger
of prejudice; it failed to protect Fleegel from potential jury
bias as required under Rule 47(c).
Accordingly, given the superior court's decision
allowing defense counsel to tell the jury of Boyles's insurance
coverage, I would hold that Rule 47(c)(10) required the court to
grant challenges for cause as to all prospective jurors who were
State Farm policyholders.
CONCLUSION
I therefore dissent.
_______________________________
1 Michael Boyles passed away after this appeal was filed.
We granted Fleegel's motion to substitute Boyles's estate as the
appellee/cross-appellant, but we will continue to refer to
"Boyles" throughout the opinion.
2 Civil Rule 60(b) permits a court to relieve a party
from a final judgment for reasons including mistake,
inadvertence, and excusable neglect.
3 AS 09.60.070 provides attorney's fees for victims of
serious criminal offenses:
(a) A person who has been injured or
damaged, or the estate of a person who has
died, may recover from the offender full
reasonable attorney fees in a civil action or
a wrongful death action if the injury,
damage, or death resulted from
(1) an attempt on the part of the
person to prevent the commission of a serious
criminal offense or to apprehend an offender
who has committed a serious criminal offense,
or aiding or attempting to aid a police
officer to do so, or aiding a victim of a
serious criminal offense; or
(2) the commission or attempt on the
part of the offender to commit a serious
criminal offense.
Under this statute, a serious criminal offense includes driving
while intoxicated. See AS 09.60.070(c)(14).
4 See discussion of the applicable law to the "prevailing
party" determination infra notes 35 & 43.
5 The trial court reasoned that because Fleegel had a one-
third contingency fee agreement with her counsel, the award of
$2,220.90, as one-third of $6,662.69, constituted a full fee
award under AS 09.60.070.
6 Bliss v. Bobich, 971 P.2d 141, 144 n.3 (Alaska 1998).
7 Dobos v. Ingersoll, 9 P.3d 1020, 1023 (Alaska 2000).
8 Id.
9 Deal v. Kearney, 851 P.2d 1353, 1356 n.4 (Alaska 1993).
10 Sauve v. Winfree, 985 P.2d 997, 999 (Alaska 1999)
(quoting Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979)).
11 It appears that Boyless policy may, in fact, have
covered punitive damages. Counsel for Boyles stated at the
pretrial conference that "[m]y position is that there is
[insurance coverage for punitive damages]. There's no specific
exclusion in the policy for punitive damages."
12 594 P.2d 38, 48 (Alaska 1979), overruled on other
grounds by Dura Corp. v. Harned, 703 P.2d 396, 405 n.5 (Alaska
1985).
13 971 P.2d 158, 175-76 (Alaska 1999).
14 See AS 09.17.020(c)(6).
15 672 P.2d 895 (Alaska 1983).
16 Id. at 899-900.
17 Id. at 902 (Compton, J., concurring).
18 Id. (Compton, J., concurring).
19 Id. (Burke and Matthews, J., dissenting).
20 E.g., Humana Health Ins. Co. of Florida, Inc. v.
Chipps, 802 So. 2d 492, 497-98 (Fla. App. 2001) (holding that
trial court correctly admitted evidence of indemnity agreement to
rebut defendants assertions that a large punitive damages award
would force the company into financial straits); Wheeler v.
Murphy, 452 S.E.2d 416, 424 (W. Va. 1994) ("A defendant's net
worth is relevant to the issue of punitive damages, and in this
case, where defense counsel offered evidence of Mr. Murphy's
meager finances, the plaintiff's rebuttal evidence disclosing the
existence and policy limits of Mr. Murphy's liability insurance
is not barred by either [West Virginia Rules of Evidence] 401-03
or Rule 411."); Wilder v. Cody Country Chamber of Commerce, 933
P.2d 1098, 1108 (Wyo. 1997) (holding that trial court did not err
in admitting evidence of defendants inability to pay punitive
damages where plaintiff failed to elicit on re-direct information
concerning whether defendant had insurance, which would have been
proper rebuttal evidence).
21 See cases cited supra note 20.
22 Alaska R. Evid. 411.
23 See Alaska R. Civ. P. 47(c)(2).
24 See Alaska R. Civ. P. 47(c)(3).
25 See Dalvoski v. Glad, 774 P.2d 202, 205 (Alaska 1989)
("The grounds listed in Rule 47(c)(2), (3), and (4), which
approximate juror personal knowledge of facts of the case,
involve value judgments by the trial court and are committed to
the trial court's discretion."); Mitchell v. Knight, 394 P.2d
892, 897 (Alaska 1964) ("We shall interfere with the exercise of
[a trial judge's] discretion [in the determination of challenges
for cause] only in exceptional circumstances and to prevent a
miscarriage of justice.").
26 Although the jury returned a figure of zero for the
amount of punitive damages after determining that punitive
damages were warranted, Fleegel did not challenge the verdict as
inconsistent and she has not raised this point on appeal.
27 512 P.2d 575 (Alaska 1973).
28 ___ P.3d ___, Op. No. S-5637 (Alaska, Oct. 4, 2002).
29 Id. at 18.
30 Id. at 8 ("We now extend Noey and hold that the per se
rule that excludes as jurors stockholders in a company which is a
party to the litigation also applies to stockholders in a
corporation which is not a party but which is nonetheless
financially interested in the outcome.").
31 601 A.2d 837 (Pa. Super. 1992).
32 Id. at 838.
33 Reich v. Cominco Alaska, Inc., ___ P.3d ___, Op. No.
5637 at 11 (Alaska, Oct. 4, 2002).
34 We recently noted in Dobos v. Ingersoll, 9 P.3d 1020,
1027 (Alaska 2000), that "medical records, including doctors'
chart notes, opinions, and diagnoses, fall squarely within the
business records exception to the hearsay rule." But because any
error in excluding the medical records was harmless, we need not
reach the question of whether the records were sufficiently
authenticated to be admitted under the business records
exception.
35 Civil Rule 68 states, in part: "If an offeror receives
costs and reasonable actual attorney's fees under [the offer-of-
judgment rule], that offeror shall be considered the prevailing
party for purposes of an award of attorney fees under Civil Rule
82." (Emphasis added.)
Civil Rule 82 provides, in part:
(a) Allowance to Prevailing Party.
Except as otherwise agreed to by the parties,
the prevailing party in a civil case shall be
awarded attorney's fees calculated under this
rule.
(b) Amount of Award.
. . . .
(2) In cases in which the prevailing
party recovers no money judgment, the court
shall award the prevailing party in a case
which goes to trial 30 percent of the
prevailing party's reasonable actual
attorney's fees which were necessarily
incurred.
36 AS 09.60.070 provides:
(a) A person who has been injured or
damaged, or the estate of a person who has
died, may recover from the offender full
reasonable attorney fees in a civil action or
a wrongful death action if the injury,
damage, or death resulted from
. . . .
(2) the commission or attempt on the
part of the offender to commit a serious
criminal offense.
. . . .
(c) In this section, "serious criminal
offense" means the following offenses:
. . . .
(14) driving while intoxicated or
another crime resulting from the operation of
a motor vehicle, boat, or airplane when the
offender is intoxicated.
37 See AS 09.60.070(c)(14).
38 See Civil Rule 82(a) supra note 35.
39 Cooper v. Carlson, 511 P.2d 1305, 1308 (Alaska 1973).
40 AS 09.60.070 was initially enacted as AS 09.55.601, and
renumbered in 1994.
41 Ch. 57, 25, SLA 1991.
42 Hearing on H.B. 100, Victims' Rights, Before the House
Comm. on Health, Educ. & Social Servs., 17th Legis. (Alaska,
March 25, 1991) (summary of statement by Rep. Dave Donley, prime
sponsor of H.B. 100).
43 AS 09.30.065(b); see also Alaska Civil Rule 68(b) and
(c) (providing that "[i]f the judgment finally rendered by the
court is at least 5 percent less favorable to the offeree than
the offer . . . . that offeror shall be considered the prevailing
party for purposes of an award of attorney fees under Civil Rule
82"). The trial court concluded: "[Boyles] qualifies for
attorney fees because his pretrial settlement offer, rejected by
[Fleegel], was substantially more generous than the jury award."
Although the trial court concluded that Boyles was the prevailing
party under AS 09.30.065(b), the same conclusion may be reached
under Rule 68. In Supreme Court Order 1281 (effective August 7,
1997), this court accelerated the effective date of the amendment
to Civil Rule 68, providing that "the amendments to Civil Rule 68
adopted by paragraph 5 of this order are applicable to all cases
filed on or after August 7, 1997." Thus, Civil Rule 68, as
amended in 1997, applies in this case because this case was filed
on August 20, 1997.
44 AS 25.24.140(a)(1).
45 Cooke v. Cooke, 625 P.2d 291, 293 (Alaska 1981) (citing
Burrell v. Burrell, 537 P.2d 1, 7 (Alaska 1975)); see also Houger
v. Houger, 449 P.2d 766, 772 (Alaska 1969) (considering former AS
25.24.140, and noting that there was "legislative intent that
attorney's fees be allowable . . . in a divorce action regardless
of who is the prevailing party"); Johnson v. Johnson, 564 P.2d
71, 76 (Alaska 1977) ("[T]he 'prevailing party' rule, used for
determination of awards of attorney's fees under Rule 82, Alaska
Rules of Civil Procedure, is not applicable to awards of fees in
divorce actions.").
46 Federal Rule of Civil Procedure 68 states, in part:
At any time more than 10 days before the
trial begins, a party defending against a
claim may serve upon the adverse party an
offer to allow judgment to be taken against
the defending party for the money or property
or to the effect specified in the offer, with
costs then accrued. . . . If the judgment
finally obtained by the offeree is not more
favorable than the offer, the offeree must
pay the costs incurred after the making of
the offer.
47 See United States v. Trident Seafoods, 92 F.3d 855, 860
(9th Cir. 1996) ("[B]ecause attorneys' fees are not properly
awardable as 'costs' under the [Clean Air Act], they are not
within the scope of Rule 68."); Haworth v. Nevada, 56 F.3d 1048,
1051 (9th Cir. 1995) (Fair Labor Standards Act).
48 12 Charles Alan Wright et al., Federal Practice and
Procedure: Civil 2d 3006.2 (2d ed. 1997).
49 Civil Rule 60, which provides relief from a judgment or
order, states, in part:
(b) Mistakes -- Inadvertence --
Excusable Neglect -- Newly Discovered
Evidence -- Fraud -- Etc. On motion and upon
such terms as are just, the court may relieve
a party or a party's legal representative
from a final judgment, order, or proceeding
for the following reasons:
(1) mistake, inadvertence, surprise or
excusable neglect;
. . . .
(6) any other reason justifying relief
from the operation of the judgment.
The motion shall be made within a
reasonable time, and for reasons (1), (2) and
(3) not more than one year after the date of
notice of the judgment or orders as defined
in Civil Rule 58.1(c).
50 The order found: "Because plaintiff's counsel's
affidavit shows that he and other experienced counsel were
unaware of the attorney fee statute, the failure to assert an
attorney fee claim under AS 09.60.070 is excusable neglect. The
attorney fee statute reflects important public policy. Granting
the motion, and awarding fees required by the statute, will not
cause unfair prejudice to the defendant."
51 See Hatten v. Hatten, 917 P.2d 667, 670 n.3 (Alaska
1996) (applying abuse of discretion standard to review of relief
from judgment).
1 Slip Op. at 13.
2 See id. at 10-11.
3 Preliminarily, it is worth noting that evidence of
coverage would be categorically irrelevant to the issue of a
defendant's ability to pay punitive damages absent a specific
showing that the defendant was actually covered for punitive
damages. Cf. Owens-Corning Fiberglas Corp. v. Malone, 972 S.W.2d
35, 40-41 (Tex. 1998) (distinguishing between evidence of actual
and potential wealth in punitive damages case). Here, Boyles's
counsel equivocated on this issue when asked whether Boyles was
covered for punitive damages. Although hired by State Farm to
defend the case, counsel insisted that he could not speak for the
company and said only "[m]y position is that there is
[coverage]."
4 Baker v. Armstrong, 744 P.2d 170, 173 (N.M. 1987).
5 City of West Allis v. Wis. Elec. Power Co., 635 N.W.2d
873, 889 (Wis. App. 2001) (citations omitted), review denied, 643
N.W.2d 93 (Wis. 2002).
6 Alaska R. Evid. 403.
7 See Baker, 744 P.2d at 173; City of West Allis, 635
N.W.2d at 888-89.
8 See Owens-Corning Fiberglas Corp., 972 S.W.2d at 41.
9 Schaefer v. Ready, 3 P.3d 56, 59 (Idaho App. 2000):
[T]he [trial] court ruled that evidence of
the Readys' insurance coverage for punitive
damages awards was not admissible because
"the probative value was substantially
outweighed by its potential prejudicial
impact." Specifically, the court felt that
the "mention of insurance invites higher
awards than are justified by the facts."
This ruling is in accord with [Idaho Rule of
Evidence] 411[.]
10 The court's opinion tries to stand the point on its
head by observing that "no court has held that introduction of
insurance evidence is reversible error because it is prejudicial
to a plaintiff[.]" Slip Op. at 13. Yet the absence of authority
simply reflects the reality that few trial courts have ever
thought to admit evidence of coverage for purposes comparable to
those at issue here: to prove that a defendant deserving of
punishment should not be punished because the defendant's
innocent insurer should not have to pay -- even though the
insurer presumably has contracted and been paid to do just that.
The salient point, then, is that case law uniformly rejects the
admission of such evidence; no authority supports its admission
on the theory that prejudicing a plaintiff's case is somehow more
acceptable than prejudicing a defendant's case.
11 See, e.g., Wheeler v. Murphy, 452 S.E.2d 416, 424 (W.
Va. 1994).
12 See Slip Op. at 11-12.
13 672 P.2d 895, 899 (Alaska 1983).
14 See 3 P.3d at 59. Cases in jurisdictions cited by
Schaefer as applying the same rule indicate that those
jurisdictions routinely exclude evidence of coverage in punitive
damages cases. See id.
15 See, e.g., AS 21.03.010 (requiring "[a]ll persons
transacting a business of insurance in this state" to comply with
the Alaska Insurance Code); AS 21.06.010 (authorizing appointment
of statewide director of insurance); AS 21.06.020 (establishing
division of insurance); and AS 21.06.080 (empowering director of
insurance to enforce Alaska Insurance Code).
16 See, e.g., City of West Allis v. Wis. Elec. Power Co.,
635 N.W.2d 873, 889 (Wis. App. 2001).
17 S. Life & Health Ins. Co. v. Whitman, 358 So. 2d 1025,
1027 (Ala. 1978) (Jones, J., concurring).
18 See Schaefer, 3 P.3d at 59 (quoting Kemezy v. Peters,
79 F.3d 33, 37 (7th Cir. 1996)):
[I]t is bad enough that insurance or
indemnification reduces the financial
incentive to avoid wrongdoing . . . . It
would be worse if the cost of insurance fell,
reducing the financial disincentive to engage
in wrongful behavior, because the insurance
company knew that its insured could plead
poverty to the jury.
(Quotation marks omitted.)
19 Slip Op. at 13.
20 The observation is also incomplete in that it simply
ignores the Idaho Supreme Court's carefully reasoned opinion in
Schaefer v. Ready, which would categorically exclude evidence of
insurance coverage even if offered to refute a claim of inability
to pay. See 3 P.3d at 59.
21 Slip Op. at 14.
22 See id. at 14-15.
23 Alaska Civil Rule 47(c) states:
Challenges for Cause. After the
examination of prospective jurors is
completed and before any juror is sworn, the
parties may challenge any juror for cause. A
juror challenged for cause may be directed to
answer every question pertinent to the
inquiry. Every challenge for cause shall be
determined by the court. The following are
grounds for challenge for cause:
. . . .
(10) That the person is the guardian, ward,
landlord, tenant, employer, employee,
partner, client, principal, agent, debtor,
creditor, or member of the family of a party
or attorney . . . .
. . . .
(12) That the person has a financial
interest, other than that of a taxpayer or a
permanent fund dividend recipient in the
outcome of the case.
24 Reich v. Cominco Alaska, Inc., ____ P.3d ____, Op. No.
5637, at 5-6 (Alaska, October 4, 2002); see also Malvo v. J.C.
Penney Co., 512 P.2d 575, 579 (Alaska 1973).
25 ____ P.3d ____, Op. No. 5637, at 1-2, 18.
26 512 P.2d at 579.
27 Slip Op. at 17.
28 See supra note 23 and accompanying text.
