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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Deaver v. The Auction Block Company (02/25/2005) sp-5870

Deaver v. The Auction Block Company (02/25/2005) sp-5870

     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


DENNIS DEAVER,           )
                              )    Supreme Court No. S-10724
             Appellant,            )
                              )     Superior Court No. 3HO-00-157
CI
     v.                       )
                              )    O P I N I O N
THE AUCTION BLOCK COMPANY,)
                              )    [No. 5870 - February 25, 2005]
             Appellee.             )
                              )
                              


          Appeal  from the Superior Court of the  State
          of  Alaska,  Third Judicial District,  Homer,
          Harold M. Brown, Judge.

          Appearances:   Shane C. Carew,  Shane  Carew,
          P.S.,  Seattle,  Washington,  for  Appellant.
          Steven J. Shamburek, Law Office of Steven  J.
          Shamburek, Anchorage, for Appellee.

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

          EASTAUGH, Justice.

I.   INTRODUCTION

          Dennis  Deaver  delivered  his  halibut  catch  to  the

Auction  Block  Company, which issued him an Auction  Block  fish

ticket.   Auction Block ultimately paid Deaver less for  some  of

the  halibut than the price specified on the fish ticket.  Deaver

sued  Auction Block for the specified price, claiming it was  the

buyer  of  his fish.  Following trial, the superior  court  found

that the parties had agreed Auction Block was an auctioneer,  not

a buyer.  Because it is undisputed that Auction Block gave Deaver

an  Auction Block fish ticket, we hold that Auction Block was the

primary fish buyer of Deavers halibut, within the meaning  of  AS

44.25.040(a).    If  the buyer does not fully pay  a  fisher  who

delivers  fish to the buyer, the fisher can proceed  against  the

buyer and, per AS 44.25.040(e), the buyers surety bond.  Further,

Auction  Block  must be considered a merchant  buyer  within  the

meaning  of Deavers claim under the Uniform Commercial Code.   We

therefore reverse and remand.

II.  FACTS AND PROCEEDINGS

          Dennis  Deaver is a commercial fisher and  owner  of  a

fishing vessel, the F/V Pacific Sun.1  He fishes commercially  in

the waters off the State of Alaska.

          The Auction Block Company is an Alaska corporation that

conducts  online auctions of fish and provides other services  to

fishers and fish buyers.  Auction Block is bonded and licensed in

Alaska  as a primary fish buyer.  Between May 1999 and May  2001,

it  was  the  principal on a $10,000 surety bond  issued  by  the

Continental  Casualty Company to Auction Block  conditioned  upon

Auction  Block  paying commercial fishers for the  price  of  raw

fishery resource purchased from them.

          Deaver  and  Auction Block engaged in two  transactions

relevant  here.  The dispute before us arises out of  the  second

transaction.   In the first transaction, Deaver took  a  load  of

fish to Seward on September 28, 1999 and sought to engage Auction

Blocks  services.  Deaver and Kevin Hogan, president  of  Auction

Block,   met   in   Seward  that  evening  to   discuss   Deavers

participation in an online auction of his fish.  Hogan  explained

that  if three qualified bidders submitted bids, Deaver would  be

committed to selling his fish to the highest bidder.  Hogan  also

explained  that  the  bidders  would  be  able  to  specify  sale

conditions,  such as a condition allowing the bidder  to  inspect

the  fish  for  quality and to reduce the price  for  number  two

quality  fish.   Deaver then hired Auction Block to  auction  his

fish.

          The  next morning, Deaver and Hogan watched the  online

          auction of Deavers fish from Auction Blocks Seward office.

Icicle  Seafoods submitted the highest bid, conditioned on Icicle

grading  the fish for quality and paying twenty percent less  for

number two quality fish.

          Deaver delivered the fish directly to Icicle in Seward,

where  Icicle  graded their quality.  After receiving  the  fish,

Icicle  issued  Deaver  an Alaska Department  of  Fish  and  Game

(ADF&G)  fish ticket.  The fish ticket identified Icicle  as  the

Company.   The  Fish  Received by line on  the  ticket  bore  the

signature  of  Larry  S.  Dalberg.  The  attached  catch  receipt

identified Dalberg as the Reg. Buyer Representative.

          Icicle graded some of the halibut as number two quality

and  consequently  reduced the purchase  price  for  those  fish.

Although  Icicles bid had specified that Icicle would pay  twenty

percent  less  for  number two quality fish,  Icicle  and  Deaver

negotiated a modified price reduction of ten percent.

          The  fish ticket Icicle issued to Deaver described  the

species (halibut) and specified by size the prices per pound  and

the number of pounds of fish Deaver had delivered to Icicle.   It

also  listed  the  number of pounds of number  two  quality  fish

delivered  and  the reduced price per pound for those  fish.   It

stated  the  total  weight delivered and the total  price  Icicle

agreed to pay Deaver for the halibut.  Deaver paid Auction  Block

a  one  percent  commission  for the transaction.   There  is  no

dispute  that Icicle was the primary fish buyer of this  load  of

halibut and that Auction Block was not.

          The   second  transaction  differed  somewhat.   Deaver

notified  Auction Block in early October 1999 that he  wanted  to

market  a  load  of  halibut and sablefish  (black  cod)  through

Auction  Block.   Auction Block conducted an  online  auction  of

these fish; Seafood Products, of Vancouver, British Columbia, was

the high bidder, offering to pay $2.60 per pound for the halibut.

Its  bid  also specified that Seafood Products would inspect  the

halibut  at its plant and that it would pay fifteen percent  less

for number two quality halibut.  Snug Harbor Seafoods, a buyer in

Kenai, ultimately purchased the black cod.

          Deaver  landed his halibut in Seward on October  5  and

Auction  Block  offloaded the fish from  Deavers  boat.   Auction

Block  issued  Deaver ADF&G Halibut/Sablefish  Ticket  P99008307.

The  fish  ticket  listed Auction Block as the Company.   Auction

Block  does not dispute that the fish ticket states that  Auction

Block  is the buyer of the halibut, although it does not  concede

that  it  actually  was  the  buyer of  the  fish.   The  parties

stipulated in the superior court that:  The Alaska Department  of

Fish  &  Game  Halibut/Sablefish Ticket states that  the  Auction

Block  Company is the buyer.  The Auction Block issued  the  fish

tickets  for the second sale discussed above.  The Auction  Block

is  listed  as  the  registered buyer  on  the  IFQ/CDQ  Shipping

Reports.

          The  fish received by line on the fish ticket bears the

signature  of  Molly J. OLeary, an Auction Block  employee.   The

attached  catch  receipt  identified OLeary  as  the  Reg.  Buyer

Representative.  The fish ticket specifies the number  of  pounds

of halibut delivered and the price per pound, $2.60, but does not

mention  any reduction for number two quality fish, and does  not

state a total price for the fish.  Auction Block arranged to have

the halibut trucked to Seafood Products in Vancouver.

          Seafood  Products paid for the shipping  and  inspected

and  graded  the fish when they were delivered in Vancouver  some

days  later.   It  decided that many of the fish  that  had  been

stored  in  refrigerated sea water (RSW) were of lesser  quality,

requiring  downgrade  to number two quality;  it  therefore  paid

$2.21  per  pound for the RSW portion of the halibut,  a  fifteen

percent  reduction from the $2.60 specified on  the  fish  ticket

delivered to Deaver.  The reduction was consistent with the terms

of  Seafood  Productss bid.  Seafood Products wired the  purchase

money  to Auction Block, which wrote two checks to Deaver.   Some

weeks  passed  between Deavers delivery of the  fish  to  Auction

Block  and  his  receipt of payment from Auction  Block,  because

Auction  Block  did  not pay Deaver until Seafood  Products  paid

Auction Block.  Auction Block paid Deaver the total amount bid by

Seafood  Products,  as  reduced by Seafood  Products  by  fifteen

percent  for  the  RSW  halibut graded number  two  quality,  and

further reduced by Auction Blocks commission.

          Deaver  sued  Auction Block to recover  the  difference

between the price listed on the fish ticket Auction Block  issued

to  Deaver  on October 5, 1999 when he delivered the  halibut  to

Auction  Block and the price Seafood Products paid for the  fish.

His  complaint concerned the reduction from $2.60  per  pound  to

$2.21  per  pound  for  the  19,000 pounds  of  RSW  fish  Deaver

delivered on October 5.  Auction Block responded that it was only

the  nominal  buyer,  and that Deaver should  have  sued  Seafood

Products, which was, according to Auction Block, the real buyer.

          The  superior  court conducted a one-day trial.   After

listening  to  testimony and reviewing the documentary  evidence,

the  court  found  with  respect to the second  transaction  that

Deaver knew he contracted with Auction Block to auction his  fish

to  the highest bidder.  Finding that Auction Block fulfilled its

bargain, the court dismissed Deavers claim against Auction Block.

The  court reasoned that the logical flaw in Deavers argument was

that  the statute [AS 44.25.040] does not provide (nor can it  be

implied)  that only buyers can issue fish tickets.   The  statute

does  not establish that [Auction Block] was a buyer.  The  court

also reasoned that the issuance of the fish ticket is merely some

evidence  to  be considered in determining the parties  contract.

Based on all the evidence, the court rejected Deavers claim  that

Auction  Block  was the buyer of the halibut.  The court  entered

final  judgment dismissing Deavers complaint and awarding Auction

Block attorneys fees and costs against Deaver.

          Deaver  appeals  the  dismissal of his  claims  against

Auction  Block.  He also appeals the award of attorneys  fees  to

Auction Block.

III. DISCUSSION

     A.   Standard of Review

          On  appeal,  we review a trial courts factual  findings

for  clear  error and its legal rulings de novo.2  We  apply  our

independent judgment to questions of statutory interpretation and

adopt  the  rule  of  law  that is most persuasive  in  light  of

precedent,  reason, and policy.3  Because the facts  relevant  to

the  narrow  issue before us are undisputed and  because  Deavers

appeal  turns  on  the  meaning  and  effect  of  a  statute  and

regulation, we apply our independent judgment.

     B.   Auction Blocks Role in the October 5 Transaction

          On  appeal, Deaver advances numerous factual and  legal

arguments to support his contention that it was error to  dismiss

his action against Auction Block: (1) the halibut were number one

quality when he delivered them to Auction Block; (2) as a  matter

of fact, the transaction between Deaver and Auction Block was not

an  auction; (3) as a matter of law, only a buyer may issue  fish

tickets;  (4) as a matter of law, when a fisher receives  a  fish

ticket,  the company listed on the fish ticket is the buyer;  (5)

when  a  company issues a fish ticket to a fisher and invoices  a

third party for the price, the company issuing the fish ticket is

the buyer; (6) a company that is licensed and bonded by the state

to  buy  fish  is  a merchant under the Uniform  Commercial  Code

(UCC); and (7) unless there is an effective rejection, a merchant

buyer  under the UCC must pay according to the terms of the  fish

ticket.

          Some  of  these  contentions present legal  or  factual

disputes  that were not expressly resolved below.   The  superior

courts  finding that Auction Block was an auctioneer  and  not  a

buyer rendered it unnecessary to decide some of the issues Deaver

raises  here.  We think that a single narrow legal issue controls

this  appeal: does the undisputed fact that Auction Block  issued

Deaver  an  Auction Block fish ticket when Deaver  delivered  his

halibut  to  Auction Block make Auction Block  the  primary  fish

          buyer of Deavers fish?  If so, it was error to dismiss Deavers

action against Auction Block.

          As  Auction  Block  recognized in  its  superior  court

brief,  the  commercial  fishing industry  in  Alaska  is  highly

regulated.4  This extensive regulation reflects the states strong

interest in the management of a renewable resource.5  But it also

reflects  a state social policy of protecting commercial fishers.

Thus,  AS  44.25.040(a) requires a primary fish buyer to  post  a

surety  bond  for  the  express purpose of  securing  payment  to

fishers for the raw fish they deliver.6  According to its  title,

AS  44.25.040 is intended to provide [s]ecurity for collection of

wages  and  payment  for raw fish.7  The statute  was  originally

enacted in 1977 and codified as AS 16.10.290,  as part of an  act

relating to security for the collection of wages and payment  for

raw  fish.8   In  1993 the governor, by Executive Order  No.  85,

transferred  from  the Department of Labor to the  Department  of

Revenue  administration  of the bonding program  that  serves  as

security  for the collection of wages and payment for raw  fish.9

Alaska Statute 16.10.290 then became AS 44.25.040.10

          Alaska Statute 44.25.040 requires a primary fish  buyer

to  file a surety bond running to the state conditioned upon  the

promise  to  pay independent registered commercial fisher[s]  for

the price of the raw fishery resource purchased from them . . . .11

The  primary  fish buyer must post this surety  bond  unless  the

buyer  has more than the amount of the bond in lienable  property

within  the state.12  The statute defines primary fish  buyer  to

mean  a  person  engaging  . . . in the  business  of  originally

purchasing or buying any fishery resource . . . .13

          The  legislature amended the statute in 1989 to  extend

the coverage of the bond to unemployment insurance contributions,14

but  in  doing  so gave priority to claims of persons  furnishing

labor   and   to  claims  of  independent  registered  commercial

fishermen.15

          Alaska  Statute 44.25.041 exempts specified  purchasers

          and entities.  Buyers that do not actually purchase fish or hire

employees do not have to post a bond, nor do

      restaurants, grocery stores, and established fish markets.16

There  is no statutory exemption for auctioneers who are  primary

fish buyers.17

          We read AS 44.25.040 to require a person or firm acting

as  a primary fish buyer to be licensed and to post the specified

bond.    We  also  read  it as treating the surety  bond  of  the

primary fish buyer as security for fulfilling the purchase  terms

promised to the fisher.  It therefore implicitly gives the fisher

a  claim against the buyer of the fish if the fisher is not fully

paid.

          Also  relevant to our inquiry are the state regulations

imposing  duties on fishers delivering raw fish to processors  or

buyers and on the persons to whom raw fish are delivered.18  Per 5

AAC  39.130, when a fisher delivers a load of fish to a buyer not

licensed to process fish, the buyer issues a fish ticket.19   The

fish  ticket  must  be imprinted with a permit  number  and  must

include  the  buyers  name.20  Only a buyer who  has  posted  the

required  surety  bond  may obtain these fish  tickets  from  the

state;  only  then  can  it act as a buyer.21   The  fish  ticket

regulation, 5 AAC 39.130, states that a person who is  the  first

purchaser   of   raw  fish  may  operate  only  after   receiving

authorization  and  fish  tickets  from  the  department.22   The

regulation  also  provides that forms will not be  processed  and

fish tickets will not be issued without certification that surety

bonds  as required by [AS 44.25.040] have been posted . .  .  .23

Thus,  the statutes and regulations require a primary fish  buyer

to  post  the  statutory bond before the  buyer  can  issue  fish

tickets and operate as a buyer.24

          Was Auction Block the primary fish buyer in the October

5  transaction?  Auction Block argues that it, per its  agreement

with  Deaver,  was  merely the auctioneer and not  the  buyer  of

Deavers  fish,  and that Seafood Products was  the  primary  fish

          buyer.  Auction Block characterized itself below as only the

nominal buyer  in the transaction.  Auction Block argues that  it

provided  services to Deaver  offloading the fish, arranging  for

their  shipment,  and  processing  the  necessary  administrative

paperwork and fisheries reporting requirements  but did  not  buy

his fish.

          Auction Block points to evidence that indicates it  was

acting as an auctioneer; this evidence includes the submission of

bids  by Seafood Products and other bidders and the testimony  of

trial   witnesses.    The   parties  pre-trial   stipulation   of

uncontested  facts  also  indicates  that  the  parties  intended

Auction  Block to act as the auctioneer.  Those stipulated  facts

and  the trial evidence would reasonably permit a fact finder  to

find  that Auction Block and Deaver had agreed that Auction Block

was Deavers auctioneer of the halibut Deaver delivered on October

5.  Indeed, the superior court did not clearly err in making that

finding.

          But  the issue whether Auction Block was a primary fish

buyer  under AS 44.25.040 does not depend on disputed facts,  for

two  reasons.  First, Auction Blocks status as an auctioneer  for

the October 5 halibut landing is not inconsistent with its status

as  the  primary  fish  buyer for purposes  of  the  statute  and

regulation.  Auction Block seems to assume that a finding that it

was  the auctioneer must mean that its conduct in issuing  Deaver

an  Auction  Block fish ticket when he delivered the  halibut  to

Auction  Block  was  of  no  legal  significance.   We  disagree.

Treating  Auction Block as the buyer to carry out  statutory  and

regulatory purposes does not preclude Auction Block from  relying

on  the parties contractual intentions for other purposes.  Thus,

even  if  Auction Block, as the primary fish buyer, must  satisfy

the  statute by paying Deaver in full for his fish, it may  still

invoke its contracted-for auctioneer status to defend against any

claims not precluded by  the statute.  For example, Deavers first

amended  complaint  sought  not only a  money  judgment  for  the

difference  in the $2.60 price specified on the fish  ticket  and

the  $2.21 reduced price he received for the RSW fish,  but  also

unspecified damages in an amount to be proven for Auction  Blocks

alleged breach of the duty of good faith and fair dealing.  As to

that  claim,  it  seems likely that Auction Blocks contracted-for

status, rather than its status as a statutory buyer, controls.

          Second,   even  assuming the roles  of  auctioneer  and

statutory  buyer  in  the  same  fish-purchase  transaction   are

fundamentally inconsistent, it would not follow that the  parties

contractual  arrangement surmounts the demands of public  policy.

Parties cannot by private contract avoid the requirements of this

kind of protective statutory and regulatory scheme or thwart  its

purpose.25   The  statute, by providing some  protection  against

nonpayment  or under-payment, was enacted to protect fishers  who

may   be  compelled  by  exigencies  to  enter  into  improvident

agreements  with  fish buyers or to deal with  buyers  whose  own

finances  may  be  shaky.  The remedy the  legislature   provided

would  be  obviated if a buyer could compel a fisher to  contract

away  this  statutory  protection.   Therefore,  if  the  initial

recipient  of  the  fish is deemed the primary  fish  buyer,  its

contractual role as auctioneer cannot relieve it of its statutory

duties.

          It  is therefore irrelevant that Deaver arguably agreed

to  contract  terms that are inconsistent with the statute.   The

public  policy  reflected by the statute must  control;  to  hold

otherwise  would  leave  non-parties  to  the  contract   without

effective  recourse.   Crew  entitled  to  shares  of  the  catch

proceeds  could  be harmed if unwise agreements defeat  statutory

protections.    An owners attempt to maximize price  could  leave

crew  members no effective recourse if the ultimate recipient  of

the  fish  were not amenable to claims in Alaska or were  without

assets.

          Auction  Block contends that its auction  services  are

beneficial  to fishers, and may help them obtain a  higher  price

          for their fish.  Regardless, Auction Block may not avoid the

duties  imposed  on it by statute and regulation,  or  limit  the

remedy the statute provides.  Auction Block is effectively asking

us to create an exemption the legislature did not enact.

          Moreover,  even assuming auctions may benefit  fishers,

this  transaction illustrates how an auction format may harm them

if  a  dispute arises.  If the auctioneer receives the  fish  and

issues  a  fish  ticket, no other subsequent purchaser  would  be

considered  the primary fish buyer.  Consequently,  the  ultimate

purchaser  would have no obligation to post the statutory  surety

bond.

          Auction Block observes that Seafood Products was itself

a  licensed  primary fish buyer and had posted its own  statutory

surety  bond.  Auction Block was nevertheless the buyer  in  this

transaction.  Seafood Products was not the primary fish buyer nor

was  it the initial recipient of Deavers fish.  It did not  issue

its  own  fish ticket to Deaver.  Furthermore, even  assuming  an

ultimate  purchaser  has posted a bond per AS  44.25.040(a),  the

briefing  before us in this case does not establish that  Seafood

Productss bond would apply to a transaction in which the ultimate

purchaser  was not the primary fish buyer.  We decline  to  reach

that  issue  in  this case; two of the entities potentially  most

interested  in that issue, Seafood Products and its  surety,  are

not  parties to this appeal.  Moreover, efforts of the auctioneer

to   determine   that  the  successful  bidder   is   financially

responsible  are  not  an adequate substitute  for  the  statutes

security  requirement  or for the states  ultimate  authority  to

discipline firms acting as licensed primary fish buyers.

          Finally,  an  auction  arrangement potentially  permits

exactly the sort of transaction that led to adoption of the  bond

requirement in the first place: purchase of the fish by an out-of-

state   buyer   which  may  resist  administrative  or   judicial

jurisdiction in Alaska, and which may not have the means  to  pay

the fisher in full or on time.26

          Because  the  surety  bond  statute  and  fish   ticket

regulation  govern initial sales of raw fish, a  factual  finding

that  Deaver and Auction Block intended to enter into a  contract

for  auction  services does not dispose of  Deavers  claim.   The

material  facts relevant to this appeal are Deavers  delivery  of

the  halibut  to  Auction Block, and Auction Blocks  issuance  to

Deaver of an Auction Block fish ticket listing the halibut Deaver

delivered  to  Auction Block, and listing Auction  Block  as  the

buyer.

     C.   Deavers UCC Claim

          Deaver also argues that Auction Block was a buyer under

the  Uniform Commercial Code (UCC) and therefore subject to rules

governing  buyers.  Fish are goods as defined by the UCC.27   The

undisputed facts also demonstrate that Auction Block held  itself

out  as a knowledgeable dealer in fish sales.  For example, Kevin

Hogan,  president of Auction Block, stated in his affidavit  that

the  company is the Home of the Cyber Fish and allows prospective

buyers and sellers of commercially harvested fish to meet in  the

cyberspace  marketplace.  Auction Block was therefore a  merchant

for purposes of the UCC.28  Because Auction Block was the primary

fish  buyer in the October 5, 1999 transaction, under the UCC  it

was  also a buyer who buys or contracts to buy goods.29   It  was

therefore subject to UCC rules governing buyers.

          The UCC provides that acceptance of goods occurs when a

buyer fails to make an effective rejection, or after a reasonable

opportunity  to inspect the goods, signifies to the  seller  that

the  goods  are conforming or that the buyer will take or  retain

them  in spite of their nonconformity.30  Deavers superior  court

affidavit  stated that he confirmed with Auction Block  personnel

on  site  that  the  fish were in excellent condition,  and  also

stated  that  Auction  Block accepted the fish  for  shipment  to

Seafood Products.  Auction Block did not rebut these facts, which

establish  that it had the opportunity to inspect  the  fish  and

that it did not indicate to Deaver that any defects were present.

          Auction Block therefore accepted the goods within the meaning of

the UCC.31

          Acceptance  imposes  on Auction  Block  the  burden  of

establishing any breach with respect to the accepted  goods  and,

failing  that, obligates Auction Block to pay Deaver the contract

rate.32

          Because  the dismissal of Deavers complaint was founded

on  a  ruling  that Auction Block was not the buyer  and  because

issues  of  material fact may remain, we remand for consideration

of  Deavers claims against Auction Block.  We express no  opinion

about the specific merits of Deavers claims beyond our conclusion

that  Auction  Block must be deemed the statutory  buyer  of  the

halibut  under  AS  44.25.040, that Deaver may therefore  proceed

against  Auction Blocks surety bond, and that Auction  Block  has

the  status  of  a buyer for purposes of a claim against  Auction

Block under the UCC.

          Deavers  Alaska  Civil  Rule  68  and  attorneys   fees

arguments  are mooted by our decision reversing the dismissal  of

Deavers action, because the award of attorneys fees and costs  to

Auction Block must be vacated.

IV.  CONCLUSION

          Because  Auction Block issued its own  fish  ticket  to

Deaver  when Deaver delivered his fish to Auction Block, we  hold

that  Auction Block was the buyer of the fish under AS 44.25.040.

We  therefore REVERSE the judgment of dismissal, VACATE the award

of attorneys fees and costs, and REMAND for further consideration

of Deavers claims against Auction Block.

_______________________________
     1     We describe these mostly undisputed facts to provide a
context  for the narrow legal issue of this appeal.   We  do  not
intend  to preclude the parties from litigating genuine  material
factual disputes on remand.

     2     Skaflestad  v.  Huna Totem Corp.,  76  P.3d  391,  395
(Alaska 2003).

     3    In re Life Ins. Co. of Alaska, 76 P.3d 366, 368 (Alaska
2003).

     4    State v. Dutch Harbor Seafoods, Ltd., 965 P.2d 738, 742
(Alaska  1998)  (evaluating strict liability  commercial  fishing
regulations  in the context of the highly regulated multi-million
dollar  fishing industry); State v. Lawler, 919 P.2d  1364,  1366
(Alaska  App.  1996) (calling commercial fishing a  licensed  and
heavily   regulated   commercial  activity   and   holding   that
participants  in  this activity can properly be  held  to  higher
standard  of  compliance than might be appropriate  for  ordinary
citizens);  Cole v. State, 828 P.2d 175, 178 (Alaska  App.  1992)
(stating  that commercial fishing qualifies as heavily  regulated
industry); see also McNabb v. State, 860 P.2d 1294, 1298  (Alaska
App. 1993) (noting that court had upheld the application of large
fines  in  commercial fishing cases and that  fines  reflect  the
heavily regulated nature of the industry, the large profits which
can occur from illegal fishing, and the value of the resource  to
the citizens of the state).

     5     We  have  noted that in conformity with article  VIII,
section 2 of the Alaska Constitution, the legislature created the
Board   of  Fisheries  for  purposes  of  the  conservation   and
development  of  the  fishery resources of the  state.   Interior
Alaska  Airboat Assn v. State, Bd. of Game, 18 P.3d  686,  690-91
(Alaska 2001) (citing Alaska Fish Spotters Assn v. State, Dept of
Fish & Game, 838 P.2d 798, 800 (Alaska 1992)); see also Nathanson
v.  State,  554  P.2d  456,  458 (Alaska  1976).   The  court  in
Nathanson  noted  that  Alaskas fisheries are  unquestionably  an
important resource of this state and, further, that to insure the
viability  of  this resource and the welfare of  those  dependent
upon  it,  the  state  has  broad powers  in  the  regulation  of
fisheries.  Id. at 458.

     6    AS 44.25.040(a) provides in part:

          A  person  applying for a license as  a  fish
          processor  or primary fish buyer  shall  file
          with  the  commissioner of revenue  a  surety
          bond   running   to  the  State   of   Alaska
          conditioned upon the promise to pay . . . (2)
          independent  registered commercial  fishermen
          for  the  price  of the raw fishery  resource
          purchased from them . . . .
          
     7     A  fiscal  note attached to House Bill 350 before  its
enactment as chapter 102, SLA 1977, described the bills  purposes
in these terms:

          This  bill will provide needed protection  to
          persons  furnishing labor in the business  of
          fish  processor or buyers, particularly those
          enterprises  that  are not  domestic  in  the
          state,   claims   against  the   latter   are
          difficult  if  not impossible to  collect  or
          require   considerable   time   to   resolve,
          creating a financial hardship to a claimant.
          
     8    Ch. 102,  2, SLA 1977.

     9    Executive Order No. 85  1 (1993).

     10    Id. at  3-4.

     11    AS 44.25.040(a) provides:

          A  person  applying for a license as  a  fish
          processor  or primary fish buyer  shall  file
          with  the  commissioner of revenue  a  surety
          bond   running   to  the  State   of   Alaska
          conditioned upon the promise to pay  (1)  all
          persons  furnishing labor to a fish processor
          or  primary fish buyer, including contractual
          employee benefits; (2) independent registered
          commercial fishermen for the price of the raw
          fishery resource purchased from them; and (3)
          unemployment insurance contributions.  If the
          surety  bond  is insufficient to satisfy  all
          obligations   under  this   subsection,   the
          obligations to persons furnishing  labor  and
          to    independent    registered    commercial
          fishermen  shall be paid before  unemployment
          insurance contributions are paid.  The surety
          or  sureties  must  be satisfactory,  in  the
          determination of the commissioner.
          
     12     AS  44.25.040(c) (A bond is not required if the  fish
processor or primary fish buyer has more than the amount  of  the
bond in lienable property in the state and provides proof of  the
property satisfactory to the commissioner.).

     13    AS 44.25.048(6).

     14    Ch. 100,  1, SLA 1989, codified as AS 16.10.290(a) (now
codified as AS 44.25.040(a)).

     15    AS 44.25.040(a).

     16    AS 44.25.041 provides:

          Exemptions from bonding requirement.   (a)  A
          fish  processor  or primary fish  buyer  that
          does  not purchase fish or hire employees  is
          exempt  from the bonding requirements  of  AS
          44.25.040.
          (b)    Restaurants,   grocery   stores,   and
          established fish markets are exempt from  the
          bonding requirement of AS 44.25.040.
          
     17    See AS 44.25.041(a)-(b).

     18    5 AAC 39.130.

     19     5  AAC 39.130(c) provides in part: Each buyer of  raw
fish,  each fisherman selling to a buyer not licensed to  process
fish  (a  catcher/seller), and each person or company who catches
and processes his or her own catch or that has catch processed by
another  person or company shall record each landing on an  ADF&G
fish ticket. (Emphasis added.)

     20    5 AAC 39.130(c)(1), (c)(9).

     21    5 AAC 39.130(a)(1).

     22    Id.

     23    Id.

     24     See State v. Tyonek Timber, Inc., 680 P.2d 1148, 1156
(Alaska  1984).   In  Tyonek, we stated  that  AS  36.25.010-.025
(Alaskas Little Miller Act) requires primary contractors to  post
a  payment  bond to protect persons supplying labor and material;
award   of   a  contract  is  conditioned  upon  the  contractors
furnishing  of  the  bond.  The requirement  here  is  analogous;
ability to buy fish is conditioned upon the buyers furnishing  of
the surety bond.

     25     See  Currington v. Johnson, 685 P.2d 73,  78  (Alaska
1984)  (stating  contract  is  void  if  made  in  violation   of
constitutional statute, even if statute does not contain  express
prohibition).   See  also Hoffman Constr. Co.  v.  United  States
Fabrication  &  Erection, Inc., 32 P.3d 346,  354  (Alaska  2001)
(stating    that   AS   45.45.900   limits   enforceability    of
indemnification clauses in private contracts).

     26    See supra note 7.

     27    AS 45.02.105(a) states that goods means all things . .
. which are movable at the time of identification to the contract
for  sale other than the money in which the price is to be  paid,
investment securities (AS 45.08) and things in action.

     28    AS 45.02.104(a) defines merchant to be:

          a  person who deals in goods of the  kind  or
          otherwise by occupation holds oneself out  as
          having  knowledge or skill  peculiar  to  the
          practices   or   goods   involved   in    the
          transaction  or  to  whom this  knowledge  or
          skill   may  be  attributed  by  the  persons
          employment  of  an agent or broker  or  other
          intermediary who by occupation holds  oneself
          out as having this knowledge or skill.
          
     29    AS 45.02.103(a)(1).

     30    AS 45.02.606(a)(1)-(2).

     31    Id.

     32    AS 45.02.607(a)-(b), (d); AS 45.02.709(a)(1).