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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Tufco, Inc. v. Pacific Environmental Corporation (06/03/2005) sp-5904

Tufco, Inc. v. Pacific Environmental Corporation (06/03/2005) sp-5904

     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

TUFCO, INC.,                  	)
                              		)    Supreme Court No. S-11132
               Appellant,          	)
                              		)    Superior Court No.3AN-03-7088 CI
          v.                  		)    	
                              		)
PACIFIC ENVIRONMENTAL    )    O P I N I O N
CORPORATION,                  	)
                              		)    [No. 5904 - June 3, 2005]
               Appellee.      		)
                                                        )

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, John Suddock, Judge.

          Appearances: Samuel W. Cason, Anchorage,  for
          Appellant.  David M. Freeman, Holmes Weddle &
          Barcott, Anchorage, for Appellee.

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

          BRYNER, Chief Justice.

I.   INTRODUCTION

          Tufco,  Inc.,  leased property to Pacific Environmental

Corporation  (Penco)  for  use  in  a  business  that  cleans  up

environmental  contamination.  As part of the  agreement,  Tufcos

owner, Todd Fisher, worked as a Penco employee.  In the course of

his   employment,  Fisher  helped  arrange,  and  then   actively

participated  in,  cleanup work that required  storing  hazardous

materials on Tufcos property.  Later, acting on behalf of  Tufco,

Fisher sued to evict Penco, claiming that it had breached a lease

provision  that prohibited storing hazardous materials on  Tufcos

property.   The  superior court held a trial and  concluded  that

Fishers  conduct  estopped  Tufco from enforcing  the  hazardous-

materials provision.  Tufco then moved to amend its complaint  to

include  a  new claim  an allegation that the lease had  recently

been  modified   that  Tufco contended the parties  had  actually

tried;  the court denied this motion, finding that the new  issue

had  neither  been raised nor tried.  In entering  judgment,  the

court  awarded  Penco  the  full reasonable  fees  and  costs  it

incurred  from  the  time it received Tufcos notice  of  default,

basing this ruling on a lease provision that allowed recovery  of

prevailing-party  costs  and attorneys  fees.   Tufco  challenges

these  rulings.   We affirm, concluding that the record  supports

the  superior courts finding of estoppel, that the court properly

declined  to  amend  the complaint to include  Tufcos  post-trial

issue because the issue had not actually been tried, and that the

court  correctly  interpreted and applied  the  leases  provision

allowing prevailing-party costs and fees.

II.  FACTS AND PROCEEDINGS

          Todd   Fisher  owned  Jesco,  an  Alaska  company  that

specialized  in tank inspections and tank cleanings.   Jesco  had

recently purchased a building in Anchorage when Penco, a  Hawaii-

based  corporation  doing similar work, approached  Fisher  about

purchasing   Jesco.   The  parties  negotiated  a  lease/purchase

agreement.   The  terms  of the agreement called  upon  Penco  to

purchase the Jesco business for a sum of $400,000 and a share  of

the  businesss  ongoing profits; in addition, Penco  would  lease

Jescos  Anchorage  building  and  property  from  Fisher  for   a

renewable five-year term.  The agreement also required  Penco  to

employ  Fisher  and  one of Jescos existing Anchorage  employees,

George Shedlock, as Pencos Alaska representatives.  To carry  out

the agreement, Fisher formed a new company, Tufco, which acquired

Jescos assets, sold the Jesco business to Penco, and acted as the

lessor of the Anchorage building and property.

          Jesco and Penco signed the sale and lease agreements in

March 1999.  The building lease contained a provision prohibiting

Penco  from  storing hazardous materials on Tufcos premises.   It

also  included a provision that entitled either party to  recover

prevailing-party costs and attorneys fees if the party needed  to

retain counsel to enforce its rights under the lease.

          In  late  summer,  Penco negotiated a contract  with  a

company called Envirosolve that gave Penco ongoing responsibility

for  recovering and storing hazardous chemicals seized by various

law  enforcement agencies during raids on illicit methamphetamine

laboratories in Alaska.  Penco designated Fisher and Shedlock  to

lead teams of Penco employees in the hazardous-materials recovery

operations.  The contract required Penco employees to go  through

extensive  training  on handling hazardous materials  and  to  be

fingerprinted by government agencies.  It also required Penco  to

build  a  storage  facility for the hazardous  materials  on  its

Anchorage  property and to secure the storage  facility  with  an

alarm and razor-wire fencing.

          In  September or October 2002 Envirosolve  conducted  a

seminar   for  Penco  employees  to  demonstrate  the  procedures

involved  in  carrying out the contract.  Fisher participated  in

the  seminar.   Soon after, Fisher began acquiring the  equipment

needed  for Penco to build the new secure-storage facility.   The

equipment  included  a  connex  storage  trailer   which   Fisher

purchased from a company owned by his wife   and razor  wire  for

the  fence surrounding the trailer.  Once the connex trailer  was

placed  on Tufcos Anchorage property, Fisher spent several nights

and weekends installing the razor-wire fence around the trailer.

          In  November Fisher participated in Pencos first  meth-

lab  cleanup job, storing the hazardous materials in the  trailer

on  Tufcos  property.  Later the same month, acting on behalf  of

Tufco,  Fisher sent Penco a notice of default, claiming  that  it

had  breached the lease agreements hazardous-materials  provision

by   storing  hazardous  materials  on  Tufcos  property.   Penco

responded with a letter denying this claim, asserting that Fisher

had  effectively  consented to the use  of  Tufcos  property  for

storage  of  hazardous  materials by  helping  Penco  secure  the

Envirosolve  contract and by preparing the site  for  storage  of

hazardous  materials.  In reply, Tufco notified  Penco  that  its

breach  of  the hazardous-materials provision had terminated  the

lease but that Tufco would be willing to allow Penco to remain on

the premises for a higher rent.  Over the next several months the

parties  discussed ways to resolve this conflict,  including  the

possibility of a new lease agreement expressly allowing Penco  to

store  the  Envirosolve materials on Tufcos property.  Meanwhile,

Penco continued to recover hazardous materials from meth labs and

store   them   on  Tufcos  property;  and  Fisher  continued   to

participate in this work.

          The   parties  settlement  efforts  ultimately   proved

unsuccessful.  In May 2003 Tufco filed an action to  evict  Penco

from  the  property and for damages resulting from its breach  of

the  lease.   At  Tufcos  request, the  superior  court  held  an

expedited  trial; Fisher and Shedlock testified  for  Tufco,  and

four Penco officers testified for Penco. The superior court ruled

in  favor of Penco, finding that Tufco was estopped from invoking

the  hazardous-materials  provision  because,  by  helping  Penco

obtain  the  Envirosolve  contract,  purchasing  materials,   and

building the secure storage facility, Fisher had effectively  led

Penco  to  believe that he had approved Pencos storage  of  these

hazardous materials on Tufcos property.1

          Tufco moved for reconsideration, insisting that Fishers

conduct was not inconsistent with enforcing the lease, because he

had   merely  acted  as  a  Penco  employee  and  had  adequately

communicated his opposition to Pencos hazardous-materials storage

by  discussing the issue with Shedlock, who was then  working  as

Pencos  Alaska area manager.  Tufco separately moved under Alaska

Civil  Rule 15(b) for leave to amend its pleadings to conform  to

the  evidence presented at trial.  Tufco asserted that during the

parties settlement discussions before trial, Penco had agreed, as

a  condition of remaining on the property, to purchase  insurance

covering   pollution  damage;  in  Tufcos  view,  this  agreement

          amounted to a modification of the original lease.  Tufco insisted

that  the  parties  had actually litigated the lease-modification

issue at trial, so it requested that its complaint be amended  to

conform  to the issues actually tried by adding an allegation  of

lease  modification and a claim for declaration  of  the  parties

obligations under the modified lease.  At the same time,  in  its

motion  for  reconsideration, Tufco  asked  the  court  to  enter

additional  findings  determining  whether  the  lease  had  been

modified  and  whether Penco would be obligated to  maintain  its

coverage  if  it  continued to occupy Tufcos premises  under  the

lease.

          The  superior court denied Tufcos motions and  declined

to  address  the lease-modification issue, concluding that  Penco

did  not have notice of Tufcos intent to try this issue and  that

the  issue  had  not actually been tried.  Because  the  superior

courts ruling on eviction disposed of all issues raised in Tufcos

complaint,  the court entered judgment dismissing  Tufcos  action

with  prejudice.   In  keeping  with  the  leases  provision   on

prevailing-party costs and fees, the judgment included  an  award

to  Penco of the full attorneys fees and costs it incurred  after

Tufcos initial notice of default.

          Tufco appeals.

III. DISCUSSION

     A.   Standard of Review

          We  review  the  superior courts  factual  findings  on

estoppel  under the clearly erroneous standard.2   A  finding  of

fact  is  clearly erroneous when our review of the entire  record

leaves  us  with a definite and firm conviction  that  .  .  .  a

mistake has been made, even though there may be some evidence  to

support  the  finding.3   We review a  trial  courts  rulings  on

motions  to  amend the pleadings and on awards of attorneys  fees

for  abuse of discretion.4  The trial court abuses its discretion

when   its  decision  is  arbitrary,  capricious,  or  manifestly

unreasonable.5

     B.   Sufficiency of Evidence on Estoppel
          
          The  superior  court  found that  Tufco  was  equitably

estopped  from enforcing the leases hazardous-materials provision

against Penco because Fisher spearheaded th[e] endeavor to obtain

the  Envirosolve  contract.  It found that  Fishers  actions  had

amounted  to an assertion that Tufco did not object to hazardous-

materials  storage  on  its  property, that  Penco  detrimentally

relied  on this assertion, and that Fishers subsequent  claim  of

breach was unconscionable.  Tufco argues that the record does not

support the courts finding of estoppel.

          A  party  claiming equitable estoppel must  prove  four

elements: (1) an assertion of a position by word or conduct;  (2)

reasonable  reliance  on the assertion; (3) resulting  prejudice;

and  (4)  the  estoppel will be enforced only to the extent  that

justice  requires.6   Only the first two  elements  are  disputed

here.

          Tufco  argues  that Fisher did nothing  that  could  be

construed as an assertion that Tufco would not enforce the  lease

provision  regarding hazardous-materials storage.  Tufco  insists

that  Fishers  conduct in securing, implementing, and  performing

the  Envirosolve  contract  cannot reasonably  be  viewed  as  an

assertion of approval by Tufco, since, in Tufcos view, Fisher was

merely  doing  his  job  as  a Penco employee.   Moreover,  Tufco

argues,  Penco  could not have reasonably relied on  any  implied

approval  given by Fisher, because Fisher notified Penco  through

conversations  with Shedlock that Tufco intended to  enforce  the

hazardous-materials provision.

          Penco  responds  that  not  only  did  Fishers  actions

reflect his acquiescence in the breach, they actually caused  the

breach.   Furthermore, Penco insists, even if   Fisher  discussed

his  concerns with Shedlock, this conversation did not put  Penco

officials  on  notice of Tufcos intent to enforce the  hazardous-

materials provision, since the lease expressly required Fisher to

give  Pencos  Hawaii office written notice of any concerns  about

          Pencos compliance.

          The  superior  court  agreed with Penco,  finding  that

Fishers  actions  completely contradicted any conversations  that

Fisher  might have had with Shedlock, that Fishers and  Shedlocks

testimony  was  not  believable, and that Fisher  took  no  steps

reasonably  likely  to  inform  Penco  that  hazardous  materials

recovered  under the Envirosolve contract could not be stored  on

Tufcos property.

          The  question  at  issue, then, is whether  the  record

supports these findings.  We hold that it does.  The record shows

that  Tufco,  through Fisher, actively helped  Penco  secure  the

Envirosolve contract.  Fisher participated in a training  session

put  on  by Envirosolve to demonstrate the process for recovering

and  storing hazardous materials seized at the meth labs.   After

this  training session, Fisher spent several nights and  weekends

putting  up special razor-wire fencing around Tufcos premises  as

required by the contract with Envirosolve.  Fisher also purchased

the  connex  container  for storing the  hazardous  materials  on

Tufcos property.  And there is evidence that Fisher was in charge

of  Pencos  employees  in meth-lab cleanups  during  the  winter;

Fisher acknowledged that he shared this leadership responsibility

with  Shedlock,  who  was in charge of the  cleanups  during  the

summer.

          In  essence, then, Fisher worked extensively to  ensure

not  only  that Penco received the Envirosolve contract but  also

that  Penco  would  be able to store the hazardous  materials  on

Tufcos  property,  as  the  contract  required.  Fisher  actively

participated  in  Pencos  first  cleanup  and  helped  store  the

materials on Tufcos property  all before notifying Penco  of  the

breach.  Both individually and collectively, these actions  could

reasonably be construed as an implicit assertion that Tufco would

not enforce the hazardous-materials provision of the lease as  to

materials stored in connection with the Envirosolve contract.

          Tufco  nonetheless  argues that Fishers  communications

with  Shedlock  barred  Penco from claiming  that  it  reasonably

relied on his actions.  Although Penco does not dispute that  the

alleged  conversations between Fisher and Shedlock  occurred,  it

argues instead that they could not have provided notice of Tufcos

position,  because the lease expressly stated that if  Tufco  had

complaints  about  Pencos lease compliance, the complaints  would

have  to  be  submitted in writing to Pencos Hawaii  office.   At

trial, Fisher expressly conceded that, despite being aware of the

leases  written-notice requirement, and even though  he  had  the

opportunity  to comply with this requirement,  he  never  relayed

any of his concerns to Pencos Hawaii office.

          Because  the record contains ample evidence  supporting

the   superior   courts  findings  concerning   Fishers   implied

assertions  that  Tufco would not enforce the hazardous-materials

provision and Pencos reasonable reliance on those assertions,  we

hold  that the court did not clearly err in estopping Tufco  from

enforcing the provision.

     C.   Denial of Tufcos Request To Amend Its Complaint
          
        After  the  superior  court ruled against  Tufco  on  its

claims  for  eviction  and  damages, Tufco  moved  to  amend  its

complaint  under  Civil  Rule 15(b) to conform  to  the  evidence

presented  at  trial.  As we have already described above,  Tufco

claimed  that the parties had litigated the issue of  a  pretrial

lease  modification  that,  in Tufcos  view,  required  Penco  to

purchase  insurance  protecting the  Anchorage  property  against

damages  caused by pollution.  Tufco sought to have its complaint

amended  to reflect this claim.  At the same time, it  asked  the

court  to reconsider its original findings by entering additional

findings resolving this claim.  The superior court denied  Tufcos

motions,  finding that the lease-modification issue  had  neither

been litigated nor raised.  Tufco challenges this ruling.

        Civil  Rule  15(b) allows a party to amend  its  original

pleadings to include issues that the parties either expressly  or

impliedly litigated at trial:

          When  issues  not raised by the pleadings  are
          tried  by  express or implied consent  of  the
          parties, they shall be treated in all respects
          as  if  they had been raised in the pleadings.
          Such  amendment  of the pleadings  as  may  be
          necessary  to  cause them to  conform  to  the
          evidence and to raise these issues may be made
          upon  motion  of any party at any  time,  even
          after  judgment; but failure so to amend  does
          not  affect the result of the trial  of  these
          issues.[7]
          
We  have  interpreted this rule to apply when evidence  supporting

the  post-trial amendment was admitted at trial by consent of  the

parties  or  with the courts approval despite the opposing  partys

objection   that  the  evidence  addressed  issues   outside   the

pleadings.8   Here, Tufcos original complaint alleged  that  Penco

had  breached  the  lease and, based on this allegation,  set  out

claims  for  eviction and damages.  The complaint did  not  allege

that  the  lease  had been modified or seek a declaration  of  the

parties obligations under the modified lease.

          During the course of the parties pretrial discussions to

resolve  their dispute, Penco indicated that it would purchase  an

insurance policy for Tufcos premises effective May 2003  if  Tufco

allowed  it to remain on the premises.  Although Pencos  agreement

to  purchase insurance was mentioned at trial, the record fails to

support Tufcos contention that the issue of lease-modification was

litigated  by  express consent of the parties.  To  the  contrary,

when  Tufcos  counsel asked a witness whether Penco  had  provided

Tufco  with a certificate of insurance, Pencos attorney  objected,

insisting  that  there  is no issue that  [Tufco]  indicated  with

regard  to this hearing involving the . . . procurement or failure

to procure insurance.  Its not part of the complaint.  In response

to  this objection, the trial court observed that it might be more

trouble  than  its worth to discuss the matter.   Tufcos  attorney

then simply indicated that he would move on.

          Nor  does the record support Tufcos contention that the

lease-modification  issue  was tried  with  the  parties  implied

consent.   Implied consent . . . is . . . difficult to  establish

          and seems to depend on whether the parties recognized that an

issue  not presented by the pleadings entered the case at  trial.

If  they do not, there is no consent and the amendment cannot  be

allowed.9   Tufco notes that Penco introduced its  new  insurance

policy  as  an  exhibit at trial.  But as Penco correctly  points

out,  the  record  indicates that Penco  introduced  the  exhibit

together with other transactional documents for a limited reason:

to   present   a   complete  picture  of  the  parties   pretrial

transactions so as to avoid any implication that Penco might have

admitted  Tufcos allegations of breach.  The record  provides  no

indication that either party went further by seeking to  litigate

the  substantive  issue of whether Pencos agreement  to  purchase

insurance  was  intended  to  prospectively  modify  the  parties

original  lease.   Clifford Dart, Pencos Chief Financial  Officer

and  Vice  President, testified that Penco obtained the insurance

in the course of discussing a possible settlement only to satisfy

Tufcos  demands that Penco immediately buy the insurance.  Tufcos

attorney did not pursue the issue further, and the court admitted

the  policy  as  a trial exhibit without objection or  additional

explanation.   Notably, during its closing arguments,  Tufco  did

not contend that the lease had been modified; to the contrary, it

expressly  acknowledged that waiver and estoppel  were  the  only

issue[s before the court].

          Because  the record provides abundant support  for  the

superior courts finding  that the issue of lease modification was

not  actually  litigated, its denial of Tufcos motion   to  amend

under  Rule  15(b) cannot fairly be characterized  as  arbitrary,

capricious,  or  manifestly unreasonable.  It  follows  that  the

superior  court  did  not  abuse its discretion  in  denying  the

motion.

     D.   Award of Full Attorneys Fees and Costs

          The  lease in this case gave either party the right  to

recover  prevailing-party attorneys fees and costs any  time  the

party  needed  to  hire counsel to enforce its rights  under  the

          terms of th[e] agreement.  Relying on this provision, the

superior court awarded Penco the full attorneys fees and costs it

incurred after Tufco sent Penco the original notice of default.10

Tufco separately challenges the amounts awarded for fees and  for

costs.

          1.   Attorneys fees

          In  challenging the award of attorneys fees, Tufco does

not  dispute  that the lease allowed recovery of full  reasonable

fees  rather than the limited fees set out under Civil  Rule  82.

But  Tufco  contends  that  some of the  attorneys  fees  awarded

reflected  charges for matters beyond the scope of the action  at

issue.   In  Tufcos  view, the superior court  should  only  have

awarded  fees  for charges incurred in defending  against  Tufcos

complaint for eviction.11

          Penco  responds  that Tufcos reading of  the  lease  is

unduly  narrow;  because it was pursuing the enforcement  of  its

rights  under  the  terms  of the lease,  Penco  argues,  it  was

entitled  to recover the fees it reasonably incurred in  response

to  Tufcos  notice  of default, before Tufco actually  filed  its

complaint for eviction.

          We  have previously recognized that a prevailing  party

may  recover its full reasonable attorneys fees when  a  contract

provides for prevailing-party fees.12  In Ursin Seafoods, Inc. v.

Keener  Packing Co., Inc., for instance, we held that a  contract

provision  allowing a prevailing party to recover its  reasonable

attorneys fees trumped Civil Rule 82s provision for partial  fees

because  the  parties specifically contracted  for  the  full-fee

provision.13

          Here  Tufco  sent  Penco  a  notice  in  November  2002

accusing  Penco  of  breaching the  lease  by  storing  hazardous

materials on Tufcos property.  After its initial discussions with

Tufco  failed, Penco hired counsel in January 2003 to  assist  in

enforcing  its rights under the lease.  Pencos counsel  responded

to  Tufcos notice of default on January 22, 2003.  On February 4,

          2003, Tufcos attorney notified Penco that Tufco had terminated

Pencos lease as of January 31, 2003, but was willing to agree  to

a  new  lease.  Over  the next four months, the  parties  counsel

continued  to discuss the lease but ultimately failed  to  settle

the  dispute.   Tufco then filed its eviction action  on  May  2,

2003.

          The  superior  court  found  that  the  parties  should

reasonably have understood the leases fees-and-costs provision to

cover all attorneys fees incurred in enforcing their rights under

the  contract,  not just the fees incurred after a complaint  was

actually filed. This decision finds strong support in the text of

the  lease,  which allows recovery of fees any time a  prevailing

party has hired counsel to enforce its rights under the terms  of

this  agreement.  Even Tufco appears to have read  the  provision

this way: Tufcos pre-complaint letter notifying Penco that it had

terminated the lease referred to the fees provision and  demanded

that  Penco pay $1,400 in fees and costs that Tufco had spent  in

preparing  its notice of default.  Given these circumstances,  we

hold  that  the  superior court did not err in  interpreting  the

lease  to  cover  costs and fees reasonably incurred  before  the

eviction  action was formally filed and that the  court  did  not

abuse  its  discretion  in  awarding Penco  its  full  reasonable

attorneys fees from the date of Tufcos notice of default.

          2.   Costs

          Tufco  separately challenges the superior courts  award

of  costs,  arguing that the award should have  been  limited  to

costs  allowed under Civil Rule 79(f).  Penco responds  that  the

costs  provision  in the lease agreement is not limited  by  Rule

79(f),  just as the attorneys fees provision was not  limited  by

Rule 82.

          We  agree. The lease provided that the prevailing party

shall be entitled to recover attorneys fees and costs incurred in

enforcing  its rights. (Emphasis added.)  As we concluded  above,

the  superior  court correctly awarded Penco its  full  attorneys

fees  even  though  Civil  Rule 82 ordinarily  allows  prevailing

parties  to  be awarded only partial fees and even  though  Penco

incurred some of its fees before Tufco filed its eviction action.

We  reach a similar conclusion as to costs.  The language of  the

lease  does  not limit prevailing-party costs to those  awardable

under  Civil  Rule 79 or to costs incurred after a formal  action

has been filed.

          To  be sure, the lease requires that incurred costs  be

reasonable; yet the record discloses nothing unreasonable in  the

costs  actually  awarded.  The superior court awarded  Penco  its

costs  for obtaining an expedited transcript of the first day  of

trial and for copying documents at a rate modestly exceeding  the

one  allowed  under Rule 79.  But Pencos transcript costs  appear

justified by the expedited nature of Tufcos eviction action.  And

the  fact  that Pencos copying costs exceeded the amount  allowed

under  Rule 79(f) hardly compels the conclusion that those  costs

were  excessive.  Having reviewed the record, we cannot say  that

the  superior courts decision to award these costs was arbitrary,

capricious,  or  manifestly unreasonable.  We conclude  that  the

superior court did not abuse its discretion in awarding Penco its

full costs.

IV.  CONCLUSION

          For  these  reasons,  we  AFFIRM  the  superior  courts

decision.

_______________________________
     1     The  court also found that Tufco impliedly waived  the
hazardous-materials provision in the lease.  Our decision on  the
issue  of  estoppel  makes it unnecessary to address  the  courts
alternative ruling on waiver.

     2    Hubbard v. Hubbard, 44 P.3d 153, 155 (Alaska 2002).

     3    Barrett v. Alguire, 35 P.3d 1, 5 (Alaska 2001) (quoting
Jenkins v. Handel, 10 P.3d 586, 589 (Alaska 2000).

     4     Betz  v. Chena Hot Springs Group, 742 P.2d 1346,  1348
(Alaska  1987)  (motions  to amend pleadings);  Tenala,  Ltd.  v.
Fowler, 993 P.2d 447, 449 (Alaska 1999) (attorneys fees awards).

     5    Tenala, Ltd., 993 P.2d at 449.

     6    Ogar v. City of Haines, 51 P.3d 333, 335 (Alaska 2002);
Municipality of Anchorage v. Schneider, 685 P.2d 94,  97  (Alaska
1984).

      7    Alaska R. Civ. P. 15(b).
 
      8     Alderman  v.  Iditarod Properties, 32  P.3d  373,  396
 (Alaska 2001).
 
      9     6A  Charles Wright, Arthur R. Miller & Mary Kay Kane,
 Federal Practice and Procedure  1493 (2d ed. 1990).
 
      10     Paragraph  28 of the lease between Tufco  and  Penco
 provides in relevant part:
 
                If,  at  any  time, either party  shall
           employ   counsel  in  connection  with   the
           enforcement  of its rights under  the  terms
           of  this  agreement,  the  prevailing  party
           shall be entitled to recover attorneys  fees
           and  costs incurred with respect to pursuing
           such rights.
           
      11     In  addition, Tufco complains that some of the  fees
 were  incurred  by  Penco in re-negotiating  Fishers  employment
 contract; but as Penco correctly points out, the superior  court
 reduced   the  award  of  attorneys  fees  by  deleting  charges
 incurred in negotiating Fishers employment contract.
 
      12     See  Jackson v. Barbero, 776 P.2d 786 (Alaska 1989);
 see  also  Gamble v. Northstore Pship, 28 P.3d 286, 288  (Alaska
 2001).
 
      13    741 P.2d 1175, 1180-81 (Alaska 1987).