Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions

Touch N' Go
, the DeskTop In-and-Out Board makes your office run smoother.

  This site is possible because of the following site sponsors. Please support them with your business.

You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Domke v. Alyeska Pipeline Service Co., Inc. (06/16/2006) sp-6018

Domke v. Alyeska Pipeline Service Co., Inc. (06/16/2006) sp-6018, 137 P3d 245

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
     requested to bring errors to the attention of the Clerk
     of  the  Appellate  Courts, 303  K  Street,  Anchorage,
     Alaska 99501, phone (907) 264-0608, fax (907) 264-0878,


) Supreme Court No. S- 10885
Appellant, )
) Superior Court No.
v. ) 3AN-01-3644 CI
TECHNOLOGIES INC., ) No. 6018 - June 16, 2006
Appellees. )
Appeal    from     the
          Superior Court of the State of Alaska,  Third
          Judicial  District, Anchorage,  Sen  K.  Tan,

          Appearances:  Arthur  S.  Robinson  and  Eric
          Derleth, Robinson & Associates, Soldotna, for
          Appellant.  Cynthia L. Ducey, Delaney, Wiles,
          Hayes,   Gerety,   Ellis   &   Young,   Inc.,
          Anchorage, for Appellees.

          Before:   Bryner,  Chief  Justice,  Matthews,
          Fabe,  and  Carpeneti, Justices.   [Eastaugh,
          Justice, not participating.]

          BRYNER, Chief Justice.

          In  this  appeal  from a judgment  on  his  claims  for
wrongful  termination  as an employee of  Champion  Technologies,
Inc.,  Kenneth Domke seeks a new trial on damages,  disputes  the
superior  courts rulings on issues involving vicarious  liability
and  allocation of fault, and challenges the jurys award  on  the
defendants  counterclaims for conversion and  unjust  enrichment.
We vacate the judgment in part and remand for entry of a modified
judgment,   holding   that   Domkes   motion   for   a   judgment
notwithstanding the verdict as to vicarious liability should have
been granted; that further proceedings are necessary to determine
whether  Champions counterclaims are time-barred;  and  that  the
jury  should not have been allowed to allocate fault to Domke  on
his   claims   for  tortious  interference  with  his  employment
          In  March  1997,  Champion  Technologies,  Inc.,  hired
Kenneth  Domke as a consultant to advise . . . Champion personnel
.  .  . with the objective of selling Champions chemical products
to  oil,  gas,  pipeline and refinery operators.   That  October,
Champion  offered Domke at-will employment as project manager  on
BPO-213, a contract between Champion and Alyeska Pipeline Service
Co., Inc., under which Champion provided corrosion inhibitors and
engineering  services  for  the  Trans-Alaska  Pipeline.    Domke
accepted this position.
          Although  his  salary  and  position  had  changed,  an
accounting  error  resulted  in Domke receiving  five  additional
paychecks  from  his original consulting position,  covering  the
period from November 21 to March 18, 1998.  Domke deposited  four
of the five overpayments, returning the last.
          Alyeskas  steward  for  BPO-213 was  Larry  Disbrow,  a
senior  corrosion engineer.  Dealings between Disbrow  and  Domke
quickly soured.  Domke claimed that Disbrow falsified a corrosion
report and, when Domke refused to sign the report, retaliated  by
aggressively  directing Domkes day-to-day work,  assigning  Domke
impossible tasks, and bec[oming] angry on occasion, all of  which
became  more frequent as time went on.  But according to Alyeska,
Domke was uncooperative, routinely missed work, and threatened to
sue  Disbrow for violating Alyeskas internal co-employment policy
whenever Disbrow requested his help on contract-related tasks.
          In  the  summer  of 1998, at least in part  because  of
Domke  and Disbrows deteriorating relationship, Domke was demoted
from  his  position  as project manager by  Matt  Knickrehm,  his
Champion supervisor.  On October 1 Disbrow sent Knickrehm  an  e-
mail stating Ken Domke and I have experienced a number of what  I
would  categorize[] as communications problems.  Disbrow went  on
to say:
          In   the   best  interest  of  the  corrosion
          inhibitor    program    and    our    working
          relationship,  I  think that Champion  should
          [e]ffect   a   change.    Because   of    the
          coemployment  issue, I cannot tell  you  what
          change  to make.  I hope that you can make  a
          change   that   will  improve   the   working
          relationship between myself, as  the  Alyeska
          steward   of   the  Champion  contract,   and
          Champion Technologies, Inc.
          Knickrehm interpreted this as a request to remove Domke
from  the BPO-213 contract, but not a demand to terminate  Domkes
employment  at  Champion.  Knickrehm suggested  to  Disbrow  that
Domke  be allowed to continue to work on BPO-213 for ninety  more
days,  while  an  alternative position was found for  him  within
Champion.   Disbrow  asked  that Domke  be  chaperoned  while  he
continued to work on BPO-213 because Disbrow was concerned  about
Domkes hostility.
          In  late  October 1998 Disbrow complained to  Knickrehm
that  Domke  had  arrived to work in Valdez unchaperoned.   Domke
claims  that he was ordered to go to Valdez alone and  that  when
Disbrow  found out that he was in Valdez, Disbrow went  ballistic
again and demanded that I be pulled off the contract immediately.
Domke  was  terminated on November 2, 1998.  The parties  dispute
whether  Disbrow  and  Alyeska  requested  or  influenced  Domkes
ultimate termination by Champion.
          On  January  20,  2000, Domke sued  Champion,  Alyeska,
Disbrow and Knickrehm, alleging (1) that Alyeska and Disbrow  had
tortiously interfered with his Champion employment contract;  (2)
that  Alyeska, Disbrow, Champion and Knickrehm had  conspired  to
interfere  with  the  same contract; and (3)  that  Champion  and
Knickrehm  breached the implied covenant of good faith  and  fair
dealing  in terminating his employment.  Domke later amended  his
complaint  to  include allegations of breach of contract  and  of
tortious retaliatory discharge in violation of public policy  for
          Champion  counterclaimed  on  February  28,  2001,  for
conversion, assumpsit, unjust enrichment, and breach of  contract
against  Domke  for retaining the five overpayments  he  received
after leaving his consulting position.  Champion alleged that  it
only  discovered  that  Domke intended to keep  the  overpayments
after Domke brought suit.
          Domke  denied these counterclaims and moved for summary
judgment  against  Champion, arguing that its counterclaims  were
barred  by the statute of limitations.  The court found that  the
counterclaims were compulsory and thus related back to  the  date
of  Champions  answer.  The court also noted, in the alternative,
that  there  was  a genuine issue of material  fact  as  to  when
Champion discovered all the elements of its cause of action.  The
court  subsequently granted summary judgment motions  to  dismiss
Domkes  conspiracy claim as to Alyeska and his request  for  non-
economic damages against Champion.
          On  January 28, 2002, the defendants made an  offer  of
judgment for $150,000 plus prejudgment interest, costs calculated
under  Alaska  Rule  of Civil Procedure 79,  and  attorneys  fees
calculated  pursuant  to the schedule for  contested  with  trial
under  Alaska  Rule of Civil Procedure 82(b)(1).  Domke  rejected
this  offer,  and  the  case  proceeded  to  a  month-long  trial
beginning  April 22, 2002.  After hearing Domkes case, the  court
entered  a  directed  verdict dismissing  Domkes  claims  against
Knickrehm,  finding that Knickrehm could not be  held  personally
liable  because Domke had conceded that Knickrehm  acted  at  all
times  within the scope of his employment.  The jury  found  that
Disbrow  had  interfered  with Domkes employment  contract,  that
Champion had breached the implied covenant of good faith and fair
dealing as Domkes employer, but that Domke was thirty percent  at
fault  for the interference with his contract.  The jury  awarded
Domke $10,000 in economic and $5,600 in non-economic damages.  It
also  found  in  favor  of  Champions  counterclaims  for  unjust
enrichment  and conversion, awarding Champion $19,600 in  damages
but reducing the award to reflect that Champion was forty percent
at fault on the counterclaims.
          On   post-trial  motions,  the  court  found  that  the
pretrial   offer   of  judgment  exceeded  the   jurys   verdict;
accordingly,  the court entered final judgment in  favor  of  the
defendants  for  $157,376 in attorneys  fees  and  $54,148.16  in
costs.  Domke appeals.
     A.   Post-Trial Motions
          After the jury returned its verdict, Domke moved for  a
new   trial   on  the  issue  of  damages  and  for  a   judgment
notwithstanding  the verdict to hold Alyeska  vicariously  liable
for  Disbrows  tortious  interference.  The  court  denied  these
motions,  and  Domke  challenges these  rulings  on  appeal.   We
consider each ruling in turn.
          1.   Motion for new trial on damages
          Domke  initially asserts that the superior court  erred
by  denying  him  a  new  trial  on  the  issue  of  damages.   A
dissatisfied  litigant may move for a new trial in the  interests
of justice under Alaska Civil Rule 59(a).  Denial of a motion for
a new trial lies in the sound discretion of the trial court.1  We
will  affirm  a  denial order entered under  Rule  59(a)  if  the
evidence,  viewed in the light most favorable to  the  non-moving
party,  provides any basis for the jurys decision.2   Conversely,
we  will  reject a jurys award of damages and order a  new  trial
only  when  the  evidence supporting the jurys conclusion  is  so
completely  lacking or slight and unconvincing  as  to  make  the
verdict plainly unreasonable and unjust.3
          Here,  the  jury  awarded  Domke  $10,000  in  economic
damages  for  Champions breach of the implied  covenant  of  good
faith  and  fair  dealing and Disbrows interference  with  Domkes
employment contract.  Comparing this award to his monthly salary,
Domke reasons that the jury awarded him only two months back pay.
He protests that the evidence fails to support such a small award
for back pay because he was a valuable employee with a reasonable
expectation  of  further employment.  In Domkes view,  then,  the
jury  must  have  mistakenly speculated  that  Domkes  employment
contract  with Champion would have naturally expired on or  about
December 23, 1998 had Disbrow not interfered with this contract.
          Champion responds that the jurys award makes sense.  It
posits  that  [t]he  jury could have found [that]  there  was  no
unlawful interference [by Disbrow] prior to October 1, 1998,  but
that  Disbrow interfered between October 1 and November 2,  1998,
when  Disbrows  objection to Domke in Valdez  resulted  in  early
termination.  Pointing  to evidence that  Champion  had  assigned
Domke to work on BPO-213 only until the end of December 1998, and
that it had agreed to employ him after that only if it found  him
another  position, Champion argues that the jury could reasonably
          have found that Domke would not likely have worked beyond
December in any event, so any interference only resulted  in  two
months lost wages.
          Champions  argument finds support in the  record.   The
parties agreed that Domke was an at-will employee.  On October 1,
1998  Disbrow sent Knickrehm an e-mail that Knickrehm interpreted
as  requesting  that Domke be removed from the Alyeska  contract.
Knickrehm  asked for ninety days to find another position  within
Champion for Domke.  Knickrehm testified that he told Domke  that
Domke  was  being removed from the Alyeska project  after  ninety
days,  and  that Champion would have to try and find another  job
for  him  after  that.  Domke himself acknowledged  understanding
that  at  the end of the 90 days if Mr. Knickrehm could not  find
another  position  for  me,  that my  job  was  over.   Moreover,
Knickrehm  testified that he had located and offered Domke  other
available  positions outside Alaska  including  an  international
position  in  which Domke could have worked thirty  days  on  and
thirty  days  off  but that Domke had rejected all these  offers,
refusing  to  accept  any  positions outside  Alaska.   The  jury
further  heard  evidence that Disbrow had  pressed  Knickrehm  to
terminate  Domke in late October 1998.  As Domke put it,  Disbrow
went  ballistic  again and demanded that  I  be  pulled  off  the
contract immediately.  Domke was terminated on November 2, 1998.
          Based  on  this  evidence,  it  would  not  have   been
irrational for the jury to find that Domke was unfairly fired  in
early November but that his employment with Champion likely would
have  expired  at the end of December 1998 in any  event  because
Champion might not have been able to find a new job that met  his
satisfaction.   Because the evidence here was not  so  completely
lacking or slight and unconvincing as to make the verdict plainly
unreasonable  and  unjust,4 we decline to  reverse  the  superior
courts order denying a new trial on the damages issue.5
          2.   Motion for JNOV on vicarious liability
          The  jury  found  that Disbrow interfered  with  Domkes
contract but that Disbrows employer, Alyeska, was not vicariously
liable.   Domke argues that the trial court erred by refusing  to
grant  a judgment notwithstanding the verdict (JNOV)6 that  would
have  found  Alyeska  vicariously liable  for  Disbrows  tortious
interference.  In response, Alyeska initially contends that Domke
failed  to  move for a directed verdict as to Alyeskas  vicarious
liability,  so  he  waived  his  right  to  request  a   judgment
notwithstanding  the verdict.  But the record  fails  to  support
this contention.
          After  presenting his case at trial, Domke moved for  a
directed   verdict  establishing  both  Disbrows   and   Alyeskas
liability  on  the tortious interference claim. The  trial  court
responded that, in its view, there were material fact issues  for
the  jury to resolve.  The court invited Domke to argue the point
and gave him two minutes to do so, but it directed the subject of
the  argument  to the question whether Alyeska and  Disbrow  were
justified in their actions toward Domke.  Given the limited focus
of  the argument invited by the court, we think that it would  be
unrealistic to view Domkes failure to expressly mention vicarious
liability as a waiver of the point.  Under the circumstances, his
          general motion for a directed verdict establishing Alyeskas
liability  can  best  be  seen  as  encompassing  all  reasonably
apparent  theories of liability, including the  theory  that  the
company    was   vicariously   liable   as   Disbrows   employer.
Accordingly,  we  conclude that Domke adequately  preserved  this
question to raise it in his post-trial motion for a JNOV.
          Alyeska also contends that reasonable jurors could have
differed as to whether Disbrow was acting within the scope of his
employment  when  he interfered with Domkes employment  contract.
We  review  the denial of a judgment notwithstanding the  verdict
only  to determine whether the evidence, when viewed in the light
most  favorable to the non-moving party, is such that  reasonable
persons could not differ in their judgment of the facts. 7  Under
Alaska law, employers are ordinarily held vicariously liable  for
acts  performed  by  their employees within the  scope  of  their
employment.8   We  apply  a  flexible,  multi-factored  test   to
determine  whether  an  employee  has  acted  in  the  scope   of
employment  in a given case,9 looking to relevant factors  listed
in  228 of the Restatement (Second) of Agency:
          (1)  Conduct of a servant is within the scope
          of employment if, but only if:
          (a)   it  is  of the kind he is  employed  to
          (b)    it  occurs  substantially  within  the
          authorized time and space limits;
          (c)   it is actuated, at least in part, by  a
          purpose to serve the master, and
          (d)   if  force is intentionally used by  the
          servant against another, the use of force  is
          not unexpected by the master.
          (2)   Conduct of a servant is not within  the
          scope  of  employment if it is  different  in
          kind  from  that authorized, far  beyond  the
          authorized  time  or  space  limits,  or  too
          little  actuated by a purpose  to  serve  the
          Applying  these  factors here, we see  nothing  in  the
evidence  that might have enabled reasonable jurors  to  conclude
that  Disbrows interference with Domke occurred outside the scope
of his employment with Alyeska.  Disbrow was the contract steward
of BPO-213 for Alyeska.  Part of his job description, as outlined
in  section  29  of the BPO, was to review and confirm  Champions
performance  under the contract.  Thus, reviewing and  commenting
on  Domkes  performance  with respect to  BPO-213  fell  squarely
within the job that Disbrow was authorized to perform.
          Disbrow testified that he wanted Domke removed from the
Champion  contract for several reasons.  These  reasons  included
Domkes   lack   of   performance,  his  absenteeism,   continuing
communication  problems, and Domkes attitude.  Moreover,  Disbrow
testified that before he sent Knickrehm an e-mail requesting that
          Domke be removed from the employment contract, he cleared the e-
mail  with his own boss at Alyeska, Eldon Johnson.  These  events
demonstrate  that Disbrow acted within the time and space  limits
of  his  employment.  And even if the jury accepted Domkes theory
that Disbrows actions were motivated by his belief that Domke was
a  whistleblower, those actions would at least in part have  been
meant  to  serve  what  Disbrow saw as  being  in  Alyeskas  best
          Even  when  we  view  the evidence in  the  light  most
favorable to Alyeska, then, we conclude that the record compels a
finding that Alyeska was vicariously liable for Disbrows tortious
interference with Domkes contract.  Because Domke was entitled to
a  JNOV establishing Alyeskas liability for Disbrows conduct,  we
must remand with directions to amend the judgment to reflect this
     B.   Counterclaims
          Domke  next  argues  that Champions  counterclaims  for
conversion  and unjust enrichment were barred by the  statute  of
limitations.   In denying Domkes motion for summary  judgment  on
this  point, the superior court ruled that the counterclaims were
compulsory, so they related back to the date of Champions  answer
and  were  therefore timely.  The court alternatively ruled  that
there were material issues of fact regarding when Champion was on
notice  that Domke intended to keep the overpayments  an  element
of  Champions claims.  Domke returned to the timeliness  question
at the end of the trial, asking the court to instruct the jury on
the statute-of-limitations issue.  The court declined to give his
proposed instructions.  Domke now challenges these rulings.
          A compulsory counterclaim relates back to the date of a
partys answer; a permissive counterclaim does not.10  Under Alaska
Civil Rule 13(a), a claim is compulsory when it arises out of the
transaction  or  occurrence that is the  subject  matter  of  the
opposing  partys claim and does not require for its  adjudication
the  presence of third parties.  We have identified the following
factors  as  helpful  in  construing the  phrase  transaction  or
occurrence: whether the facts are related in time, space, origin,
or  motivation;  whether they form a convenient trial  unit;  and
whether  their  treatment  as  a unit  conforms  to  the  parties
expectations or business understanding or usage.11  Alternate ways
of determining whether two claims arise from the same transaction
or  occurrence include looking for a logical relationship between
the claims, or whether the claims would involve similar testimony
. . . the same exhibits, and the same parties.12
          Domke  asserts  that, since the overpayments  were  the
product  of  his  consulting contract rather than the  employment
contract  that resulted in his claims against Champion, Champions
counterclaims  did  not  arise  from  the  same  transaction   or
occurrence  as  his  own.  He insists that there  is  no  factual
overlap  between  the  claims because the  overpayments  occurred
roughly a year before Champion breached the implied covenant  and
because  there was no relationship or connection between the  two
          Champion responds that any counterclaims arising out of
the  employment relationship between Champion and Domke would  be
          compulsory because defense of Domkes claims and prosecution of
its  counterclaims would require the same witnesses and evidence.
It  argues  that  Domkes breach of contract claims  and  its  own
counterclaims  arise  from  the same  transaction  or  occurrence
because  they could only be decided by reference to the terms  of
Domkes  employment contract.  It asserts that once  Domke  placed
his  own  work  performance, work character  and  credibility  at
issue,  evidence  that  he wrongfully kept the  overpayments  was
relevant   in  rebuttal.   Also,  it   insists  that  the   facts
underlying  its  counterclaims would  necessarily  be  introduced
under the after-acquired evidence doctrine.
          In  Wells v. Noey, we held that an action to declare  a
tax deed invalid was compulsory when the validity of the tax deed
was  a necessary element in an earlier action between the parties
to  quiet  title by adverse possession.13  We concluded that  the
interdependence   of  the  two  claims  satisfied   the   logical
relationship  test.14  We noted that the claims shared  the  same
evidentiary  basis,  and that proving the  deed  valid  had  been
necessary  to  establish adverse possession in the  earlier  suit
between the parties; in our view, these factors established  that
the action to declare the tax deed invalid was compulsory.15
          We  find  no comparable interrelationship here  between
Champions  counterclaims and Domkes claim.  Champions evidentiary
argument  does  establish some similarity, but the similarity  of
evidence  between  the  two suits is not by  itself  controlling.
While  the  same  parties  and witnesses  might  appear  in  both
actions, Champions ability to recover the value of the consultant
overpayments did not depend on the success or failure  of  Domkes
claims.16  Conversely, a decision on Champions counterclaims  was
not necessary to the result in Domkes suit.  If Domke had pressed
suit  immediately and reached judgment before Champion discovered
the overpayments, Champion would not have been barred under Civil
Rule  13(a)  from  asserting its claims  in  a  separate  action.
Furthermore there is no logical relationship between the  claims.
In Ellingstad v. State, Department of Natural Resources, we found
no  logical relationship between claims that arose from the  same
land contracts but involv[ed] entirely different legal questions.17
While  we  can  imagine  many instances  where  counterclaims  of
conversion and unjust enrichment could have a logical relation to
an employees claims arising from breach of an employment contract
by the employer, that is not the case here.
          Because  we conclude that Champions counterclaims  were
permissive  rather than compulsory, we must next consider  Domkes
argument  that  the counterclaims were barred by the  statute  of
limitations.18   The  trial court did not squarely  address  this
point.   Instead,  in  denying  Domkes  motion  to  dismiss   the
counterclaims on summary judgment, the court found that  material
questions of fact remained in dispute regarding when Champion had
notice  of its counterclaims.  Because of this unresolved factual
dispute,  the  court also saw no need at that  point  to  address
Champions  alternative argument that Domke  should  be  equitably
estopped from asserting his statute of limitations defense.   But
as noted above, these rulings were based on the erroneous premise
that Champions counterclaims were compulsory and related back  to
          the date that Champion filed its answer.
          When Domke attempted to return to these issues at trial
by  requesting  a  jury instruction on the statute-of-limitations
issue,  the  superior court denied his motion on the ground  that
his  proposed  jury  instruction was untimely.   The  court  thus
submitted  the case to the jury, and eventually entered judgment,
with the disputed statute-of-limitations issues still unresolved.
Although  we  recognize that Domke admittedly filed his  proposed
jury  instruction  late,  and that the instruction  was  properly
rejected  on  that  ground, the unresolved statute-of-limitations
issues addressed in that instruction raised preliminary questions
of  fact  that did not need to be referred to the jury and  could
have   been   properly  decided  by  the  trial  court  itself.19
Accordingly, the courts rejection of Domkes late jury instruction
did  not  eliminate the need to address these unresolved  issues.
For  this  reason,  Domkes  procedural lapse  in  submitting  the
proposed  instruction late cannot be viewed as an abandonment  of
the underlying legal point the instruction addressed.
          Given  these  circumstances, we  hold  that  the  trial
courts  reliance  on the mistaken premise that the  counterclaims
were  mandatory  requires  us to remand  this  case  for  further
consideration  of  the unresolved statute-of-limitations  issues:
when  Champion  had  reasonable notice of Domkes  conversion  and
whether  the  doctrine  of  equitable  estoppel  applies  to  the
counterclaims.   On  remand, the superior  court  should  resolve
disputed  factual issues concerning these points  by  considering
all relevant evidence in the record, including evidence presented
in  connection with Domkes summary judgment motion  and  evidence
presented  during the trial.  If the court finds  that  Champions
counterclaims were barred in whole or in part by the  statute  of
limitations,   it  should  disallow  the  jurys  award   on   the
counterclaims to the extent necessary to conform with its ruling.
     C.   Severance of Champions Counterclaims
          Domke separately argues that the court erred by denying
his motion to sever the trial of the counterclaims from the trial
of  his  complaint.  He asserts that allowing Champion to present
its  counterclaims unfairly tainted the jurys perception  of  his
case, and he suggests that Champions pursuit of its counterclaims
was  motivated more from a desire to cast him in a negative light
than from belief in their merits.
          Under  Alaska  Civil  Rule 42(b), separate  trials  are
appropriate to ensure convenience or to avoid prejudice, or  when
conducive to expedition and economy. The trial courts decision to
deny a severance motion is reviewed for abuse of discretion.20  We
have held that a separate trial on a defendants counterclaims  is
unnecessary when the counterclaims share the same issues of  fact
as the defendants affirmative defenses.21  When that is the case,
the  plaintiff  suffers no prejudice other than  the  unavoidable
prejudice caused by the defendants assertion of the factual basis
of the affirmative defenses, so trying the counterclaims with the
plaintiffs case in chief is conducive to expedition and economy.22
          Here,  Champion  asserted  an  after-acquired  evidence
defense  to  Domkes  retaliatory  discharge  claim.   Under  this
theory,  it  claimed  that  it would have  fired  Domke  once  it
          discovered that he had kept the consultant overpayments.
Asserting  this defense required that Champion present  the  same
evidence  that it required for its counterclaims: that Domke  had
wrongfully retained the overpayments.  Indeed, before  trial,  in
response  to  Domkes  complaints  that  the  counterclaims  would
unfairly  put  his  character  at  issue,  Champion  offered   to
stipulate that the same facts underlay the counterclaims and  its
affirmative  defenses.  Because Domke asserts no concrete  reason
that presentation of the counterclaims prejudiced his case beyond
the damage that would have been done by Champions prosecution  of
its affirmative defense, we find that the trial court did not err
by denying his motion.
     D.   Champions After-Acquired Evidence Defense
          In Brogden v. City of Klawock, we recognized that after-
acquired evidence of an employees wrongdoing may be introduced in
employment  cases.23   But our discussion of  the  after-acquired
evidence  doctrine was brief.24  We did not, for example,  decide
what  limits the trial court should place on the introduction  of
post-termination  justifications, or  whether  a  new  cause  for
termination merely serves to limit damages or eliminates entirely
the right to damages.25
          In  its  answer to Domkes complaint, Champion  asserted
that  [t]he  doctrine of after-acquired evidence bars  plaintiffs
recovery in whole or in part.  The gist of Champions defense  was
that  it  would have terminated Domke once it discovered that  he
kept  and  cashed the consultant overpayments.  The  trial  court
declined  to  dismiss this defense at summary  judgment,  finding
that  issues of fact exist as to who knew about the checks,  what
was  known about these checks.  Further, issues of fact exist  as
to whether Domke would have been terminated if Champion had known
about  the  alleged  improper  retention  of  these  checks.   An
instruction on Champions defense was submitted to the jury.26  The
jury  found  that  Domkes wrongful retention  of  the  consultant
overpayments  did not bar him from recovery for Champions  breach
of the implied covenant of good faith and fair dealing.
          Domke nonetheless argues on appeal that the court erred
when  it  refused to grant summary judgment on Champions defense.
Domke asserts that he demonstrated in his summary judgment motion
that  Champion was aware of the overpayments  and that Domke  had
cashed   the   checks   during  the  course  of  his  employment.
According to Domke, this means that the evidence relating to  the
consultant overpayments was not after-acquired and that Champions
defense should have been dismissed at summary judgment.
          But  Domke fails to show that he was prejudiced by  the
trial courts decision.  The jury ultimately found in Domkes favor
on  Champions  defense.  The only potential source  of  prejudice
lies  in  the  evidence of Domkes misconduct with regard  to  the
overpayments  that  was introduced to support  Champions  theory.
Domke insists that the overpayments were known to Champion during
his  employment,  and he suggests that, since  Champion  did  not
terminate  him  after gaining this knowledge,  the  fact  of  the
overpayments is completely irrelevant to the issues raised by his
claims.   Yet  even  if Champion had learned of the  overpayments
while  Domke  was  still working, and even if  it  knew  that  he
          intended to keep them, this evidence still would have been
admissible to rebut Domkes evidence of his own good character and
reasonable  expectation of long-term employment.  At most,  then,
allowing  the  jury  to  hear  Champions  after-acquired-evidence
defense amounted to harmless error.
     E.   Special Verdict on Fault Allocation
          Under AS 09.17.080, the court must instruct the jury to
apportion  fault  among all parties in a civil action,  including
each  claimant, defendant, third-party defendant, person who  has
been  released from liability, or other person. . . .   According
to AS 09.17.900,  fault . . . includes acts or omissions that are
in  any  measure negligent, reckless, or intentional  toward  the
person  or  property of the actor or others, or  that  subject  a
person  to strict tort liability.  During the trial, the superior
court  ruled that these fault-allocation provisions did not apply
to  Domkes  claim  of tortious interference with  his  employment
contract.   The  court nonetheless thought that  this  issue  was
close,  acknowledging  that in this case  there  may  be  a  real
legitimate dispute in the law.  To avoid the need for a new trial
if  its ruling was reversed on appeal, the court announced,  just
before  submitting the case to the jury, that it  would  preserve
the record by submitting a special verdict form allowing the jury
to  allocate fault on the tortious interference claim.  After the
jury returned a verdict finding Domke thirty percent at fault  on
that  claim, the court changed its ruling on the fault-allocation
requirement,  held  it  applicable,  and  calculated  the   final
judgment by using the jurys finding on comparative fault.
          Domke  now  argues that the trial court  erred  in  two
respects.    First,  he  contends,  a  plaintiff   cannot   share
responsibility  for  a defendants intentional  tort  against  the
plaintiff.  Domke reasons that the lack-of-justification  element
of   a   tortious  interference  claim  essentially   rules   out
comparative fault, making the concept redundant and illogical  in
the  context of such claims:  If the plaintiff is at fault, Domke
posits,  then  the  defendants interference would  be  justified.
Second,  Domke  argues,  the last-minute  timing  of  the  courts
decision  to instruct on allocation prejudiced him by  precluding
any opportunity to argue the issue to the jury.
          Champion  responds that the trial court  did  not  have
discretion  to  exempt Domke from fault allocation,  because  the
allocation  statute is mandatory.27  Champion also  insists  that
Domke waived any claim of prejudice resulting from the timing  of
the  courts  decision  because he  did  not  assert  a  claim  of
prejudice  after  closing  statements, seek  additional  time  to
supplement  his closing, or provide a record of how  his  closing
may have been altered based on the trial courts ruling.
          But  the  record  demonstrates  that  Domke  adequately
preserved  his  argument  based  on  timing.28   And  under   the
circumstances  at issue here, we hold that it  was  an  abuse  of
discretion to announce for the first time after counsel had  made
their closing arguments that the allocation issue would go to the
jury.   The court submitted the disputed special verdict form  on
fault  allocation without allowing either party  the  benefit  of
closing   arguments  or  explanatory  jury  instructions.    This
          prejudiced both sides by depriving them of any opportunity to
discuss the issue of allocation in their arguments to the jury.
          To  determine  an appropriate remedy for the  prejudice
stemming from the late instruction, we must next consider whether
the  allocation statute required fault to be allocated here.   If
so,  a retrial on the issue of allocation would be necessary;  if
not,  the  proper remedy would simply be to disregard  the  jurys
          Relying on AS 09.17.900, which defines fault to include
all  acts  or  omissions  that  are  in  any  measure  negligent,
reckless,  or  intentional, Champion argues that [t]he  facts  in
this  case  permitted  the  jury to  reasonably  conclude  Domkes
failure to perform assigned tasks in a professional manner or his
unprofessional conduct negligently placed him in danger of  being
transferred  and/or  terminated while also concluding  that  when
Disbrow  sought Domkes early termination, it was due to  Disbrows
unjustified  motives.   In  Champions  view,  then,   Domke   was
negligent  through  his  actions of being  unprofessional,  which
combined  with Disbrows intentional interference to cause  Domkes
          But  Champions argument begs the question of  the  role
played  by the element of justification in a cause of action  for
tortious interference with a third partys contract.  Here, as  we
have  already  discussed, Disbrow was found liable  for  tortious
interference based on conduct occurring in the course of  working
as an employee of Alyeska on a contract with Champion.  If Domkes
allegedly  unprofessional conduct impaired Disbrow in  performing
his  job  or  damaged Alyeskas business interests,  then  Disbrow
would have been justified in seeking to have Domke disciplined or
discharged  by  Champion;  and  this  justification  would   have
completely absolved him from being held liable for interfering in
Domkes employment.  Conversely, if Domkes lack of professionalism
was  so  unrelated  to  Disbrows actions  that  it  gave  him  no
justification for interfering with Domkes employment,  then  this
lack   of   a   causal  nexus  would  preclude  treating   Domkes
unprofessional conduct as a legal cause of his own  firing.   Any
negligence   on  his  part  would  have  played  no  direct   and
significant  role  in causing the specific  harm  at  issue   the
interference  that  prompted his firing.  In context,  then,  the
lack-of-justification element played two simultaneous  roles:  it
established  actionable  misconduct  by  Disbrow  and  ruled  out
legally relevant contributory causation by Domke.
          Alaskas  statutory  provision governing  allocation  of
fault reinforces this view of the tortious conduct at issue here.
Though  AS  09.17.080 potentially encompasses a  broad  array  of
causes of actions, the statute specifically requires fault to  be
allocated  only  in  actions involving fault  of  more  than  one
person;  and in such cases it specifies that in allocating  fault
the  jury  must consider both the nature of the conduct  of  each
person  at  fault, and the extent of the causal relation  between
the  conduct  and the damages claimed.  Here, the nature  of  the
cause  of  action at issue  its established definition   required
Disbrows  unjustified  interference to be the  but-for  cause  of
Domkes  firing; at the same time, Disbrows lack of  justification
negated  the  existence of any legally relevant  causal  relation
between  unprofessional  or otherwise  inappropriate  conduct  by
Domke  and  the  specific damages claimed in his  action  against
          Put  simply: The definition of the cause of action does
not  allow  a  finding that the harm Disbrow  caused  was  partly
justified.   And Domke neither owed nor breached any identifiable
legal  duty to exercise due care to prevent unjustified  acts  of
tortious  interference by third parties like Disbrow.29  Notably,
Champion  cites  no  authority  to  support  its  claim  that  an
employees  general unprofessionalism or abrasiveness can  provide
an   actionable   basis  for  allocating   liability   based   on
contributory fault on a claim against a third party for  tortious
interference  with  the employees employment contract;  nor  does
Champion  cite  any  authority applying comparative  fault  under
similar  circumstances.  Under these circumstances we decline  to
hold  that  AS 09.17.080 required the superior court to  give  an
instruction  allowing the jury to consider  allocating  fault  to
Domke on his claim for tortious interference.
          Because  we  hold that an instruction on allocation  of
fault  was  not  called for here, we conclude that the  prejudice
resulting  from the last-minute instruction does  not  require  a
retrial  to  allow  reallocation of fault;  instead,  the  proper
remedy  on remand will be to strike the thirty-percent allocation
of  fault  against Domke and to amend the awards against  Disbrow
and Alyeska to reflect full liability.
     F.   Claims Against Knickrehm
          At  the  close of Domkes case, Knickrehm  moved  for  a
directed verdict, arguing that he could not be personally  liable
for  conspiring  to interfere with Domkes contract  or  breaching
Champions  implied  covenant  of good  faith  and  fair  dealing,
because  Knickrehm had acted within the scope of his  employment.
Domke  conceded that Knickrehm had acted within the scope of  his
employment but maintained that he could nonetheless be personally
liable  if  his actions in interfering with Domkes contract  were
intentional  and  malicious.   The  court  dismissed  the  claims
against  Knickrehm, concluding as a matter  of  law  that  as  an
employee  acting  within the scope of his  employment,  Knickrehm
could  not interfere with a contract to which his employer was  a
          Knickrehm  maintains that the superior court  correctly
reached  this conclusion.  He also notes that we have  previously
recognized that agents cannot be personally liable for  a  breach
of  contract so long as the fact of their agency and the identity
of  the  principal are disclosed.30  Here, it is undisputed  that
Domke was aware that Knickrehm acted on behalf of Champion.
          Domke  responds  that a supervisor  can  be  personally
liable  for  his  role in the interference with his  subordinates
employment  contract caused by his own independently tortious  or
malicious acts.  In support of this contention, Domke cites Jones
v.  Central Peninsula Hospital,31 where we favorably referred  to
Wagenseller  v. Scottsdale Memorial Hospital,32 an  Arizona  case
that  supports  Domkes  position.   According  to  Domke,  Joness
reliance  on  Wagenseller makes his theory the  rule  of  law  in
          Alaska.  Domke claims that there was enough evidence to support a
finding  that  Knickrehm engaged in independently tortious  acts:
According to Domke, Knickrehm failed to abide by Alyeskas  policy
against co-employment, lied to Champion about Domkes actions, and
lied  to  Alyeska when he told [Alyeska] that Domkes  termination
had nothing to do with Disbrow.
          But  we  need not decide if Domkes theory of error  has
legal merit; even assuming for the sake of argument that it does,
we  conclude  that  Domke  has failed  to  carry  his  burden  of
establishing   that  the  alleged  error  actually   caused   any
substantial prejudice.  Initially, we note that the extent of the
prejudice that Domke realistically might have suffered would have
been relatively slight at most.  As Domke conceded at trial,  his
implied   covenant  and  tortious  interference  claims   against
Champion,  which  remained intact, accomplished  essentially  the
same  thing  as his dismissed claim against Knickrehm could  have
accomplished.   Thus,  if the court had left Domkes  interference
claim  intact and he had won a judgment against Knickrehm,  there
is no reason to suspect that his judgment would have exceeded the
award he actually received on his judgment against Champion.   At
best, he might have had identical judgments against Knickrehm and
Champion instead of a judgment against Champion alone.
          More  important,  even  if  the  jury  accepted  Domkes
description of Knickrehms conduct, it would not necessarily  have
determined   that  Knickrehm  acted  maliciously   or   committed
independently  tortious acts, as would have been required  for  a
finding  of  liability under Wagenseller and Jones.  The  conduct
alleged  by  Domke  could as easily have been  seen  as  evincing
Knickrehms  genuine  desire  to  protect  the  interests  of  his
employer,  Champion.  Domke does not explain  why  a  finding  of
malicious  or  independently tortious  actions  would  have  been
likely, and our own review of the record fails to persuade us  of
a  fair probability that the jury would have made such a finding.
We  thus  conclude  that Domke has failed to make  a  showing  of
prejudicial error.
     G.   Champions Negligence on Its Counterclaim

          Finally,   Domke   argues  that   even   if   Champions
counterclaims were compulsory, the court erred when it refused to
instruct  the  jury  on  Champions  possible  negligence  in  its
counterclaim   based  on  unjust  enrichment.   Domkes   proposed
instruction  would  have told the jury that  Champion  could  not
recover  anything  on its counterclaims if the  jury  found  that
Champion  acted negligently in failing to discover  that  it  was
mistakenly  paying Domke for two jobs.  Domke  insists  that  the
evidence  supported  this  instruction, alleging  that  Champions
payroll supervisor knew of the overpayments as they occurred, and
violated  his duty to pay[] attention to his costs  like  he  was
required.   But Domke concedes that his proposed jury instruction
was  untimely, and he offers no valid excuse for filing it  late.
Domke also fails to cite any Alaska authority for the proposition
that negligence on Champions part should have barred recovery  on
its  counterclaims  completely.  As the case  stands  now,  Domke
received  the  benefit  of a comparative fault  determination  on
Champions  counterclaims,  in which the  jury  apportioned  forty
percent of the loss to Champion.  The superior courts refusal  to
give Domkes late instruction did not amount to plain error merely
because it might have produced a better result.
          For the reasons stated above, we REMAND with directions
for  the  superior  court  to  hold  an  evidentiary  hearing  to
determine  whether  Champions counterclaims were  barred  by  the
statute  of  limitations and to amend the judgment by disallowing
the  counterclaims to the extent that the court finds  that  they
were  time-barred.  We also direct the court to enter a  judgment
notwithstanding  the verdict holding Alyeska  vicariously  liable
for Disbrows tortious interference.  Finally, we direct the court
to  amend  the  judgment by vacating its provisions  apportioning
fault  to  Domke  on  his  tortious interference  claims  and  by
awarding him full, unapportioned damages on those claims.  In all
other respects we AFFIRM the judgment.
     1     Reeves v. Alyeska Pipeline Serv. Co., 56 P.3d 660, 668
(Alaska 2002).

     2    Pugliese v. Perdue, 988 P.2d 577, 581 (Alaska 1999).

     3    Id.

     4    Id.

     5     Compare,  e.g., Grant v. Stoyer, 10 P.3d  594  (Alaska
2000),  and Pugliese, 988 P.2d at 581-83 (both holding  that  new
trial  required  where unrebutted evidence established  liability
and  existence  of some damages, but jury awarded nothing),  with
Richey  v. Oen, 824 P.2d 1371 (Alaska 1992) (declining  to  order
new  trial  over disputed damages and over whether some  evidence
that tended to show plaintiffs injury pre-existed accident).

     6    See Alaska R. Civ. P. 50(b).

     7     Reeves, 56 P.3d  at 668 (quoting Richey, 824  P.2d  at

     8     VECO,  Inc.  v. Rosebrock, 970 P.2d 906,  911  (Alaska

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

     10     Alaska R. Civ. P. 13(a), (b) and 15(c); Mogg v.  Natl
Bank of Alaska, 846 P.2d 806, 813-14 (Alaska 1993).

     11     Miller  v.  LHKM, 751 P.2d 1356, 1361  (Alaska  1988)
(citing Restatement (Second) of Judgments  24(2) (1981)).

     12     Ellingstad v. State, Dept of Natural Res.,  979  P.2d
1000, 1010 (Alaska 1999) (quoting Miller, 751 P.2d at 1361, and 6
Charles  Alan  Wright  & Arthur R. Miller, Federal  Practice  and
Procedure  1410, at 65 (2d. ed. 1990)).

     13    399 P.2d 217 (Alaska 1965).

     14    Id. at 220.

     15    Id. at 219-20.

     16    See Wells, 399 P.2d at 219-20 (finding plaintiffs claim
that  tax  deed was invalid was compulsory and should  have  been
brought  in  prior action by defendant to quiet title by  adverse
possession,  because  earlier adverse possession  claim  required
that tax deed be proven valid).

     17     979  P.2d  1000, 1010 (Alaska 1999).  The  claims  in
Ellingstad also did not require examination of the same evidence,
facts,  or  circumstances.  Id.  Here, while evidence  of  Domkes
conversion  of  the  overpayments  was  admissible,  for  reasons
further   addressed  below,  the  controversy   surrounding   the
overpayments  was  not  necessary  to  prove  Domkes   claim   or
integrally  related to the claim.  See Iglesias  v.  Mutual  Life
Ins.  Co.  of  New  York, 156 F.3d 237, 240-42  (1st  Cir.  1998)
(employers  counterclaim for restitution  was  permissive  rather
than  compulsory, because the counterclaims did not  involve  the
same  operative  facts as employees discrimination  and  contract
claims,  despite use of evidence supporting restitution claim  to
attack credibility of the employee).

     18    We note that neither partys briefing has specified what
statutory limit would govern the disputed counterclaims, and  the
superior  court  does  not  appear to  have  decided  the  issue.
Although  Champions conversion claim would likely be governed  by
the  two-year  limit  for  tort  claims,  unjust  enrichment   is
essentially a contract claim, so it would be subject to the three-
year  limit  established  in  AS 09.10.053  for  actions  upon  a
contract or liability, express or implied.  Since the jury  found
in Champions favor on both alternative counterclaim theories, the
longer  time  limit  for unjust enrichment would  be  dispositive

     19     See  Cikan  v. ARCO Alaska, Inc., 125 P.3d  335,  339
(Alaska  2005) ([T]he task of interpreting and applying a statute
of  limitations  traditionally falls within the province  of  the
courts;  so  when  a factual dispute precludes entry  of  summary
judgment  the  dispute  must  ordinarily  be  resolved   by   the
court[.]);  Johns  Heating  Serv. v. Lamb,  46  P.3d  1024,  1033
(Alaska  2002) (remanding a statute of limitations issue  to  the
superior  court  for determination as a preliminary  question  of
fact);  see  also Pedersen v. Zielski, 822 P.2d 903, 907  (Alaska
1991)  (noting  that  issues concerning the  application  of  the
discovery  rule that are genuine issues of material fact  .  .  .
must  be  resolved  at an evidentiary hearing  before  the  trial

     20    Miller v. Sears, 636 P.2d 1183, 1192 (Alaska 1981).

     21    Id.

     22    Id. (quoting Alaska R. Civ. P. 42(b)).

     23    930 P.2d 989, 991-92 (Alaska 1997).

     24    Id. at 992.

     25    Id.

     26    Jury Instruction No. 32 read:

               Champion Technologies has asserted  that
          after  the  termination of Domkes employment,
          evidence    was    acquired    by    Champion
          Technologies  that  Domke  had   engaged   in
          misconduct  which justified termination,  and
          that this amounts to a defense to his claims.
          . . .
               First, you must determine whether . .  .
          Champion  .  .  .  had  knowledge  of  Domkes
          allegedly  wrongful  conduct  prior  to   his
               Next,   in   order  to  establish   this
          defense,  Champion has the burden of  proving
          by a preponderance of the evidence all of the
          facts necessary to establish:
               1)   Domke  wrongfully retained  $19,600
                    of  consultants pay  from  Champion
                    Technologies funds to which he  was
                    not entitled;
               2)   Domkes   wrongdoing  was  of   such
                    severity that he in fact would have
                    been  terminated on  those  grounds
                    alone if Champion Technologies  had
                    known  of  it  at the time  of  the
               If  you  find that Champion Technologies
          breached  the  contract of employment  and/or
          that  Domke  was  wrongfully terminated,  but
          also that Champion Technologies was justified
          in  that  action by reason of Domkes wrongful
          conduct discovered thereafter, Domkes damages
          are  limited  to the back pay he  would  have
          earned from the date of termination until the
          date of the discovery of the misconduct.
     27     In  Shields v. Cape Fox Corp., 42 P.3d 1083,  1087-89
(Alaska  2002), we held that it was plain error under an  earlier
version  of AS 09.17.080 for the trial court not to instruct  the
jury  on  comparative fault in a conversion case  involving  both
tangible-property loss and purely economic loss.  Our  ruling  in
this case on the timing of the trial courts decision to allow the
jury  to  allocate fault makes it unnecessary to  decide  whether
Domkes case is distinguishable from Shields.

     28    In arguing about whether the court should submit a last-
minute  verdict form allowing the jury to allocate fault on  this
claim, Domke maintained at trial that the verdict form should not
be  submitted,  because  the courts fault-allocation  ruling  was
correct on its merits, so omitting the special verdict form would
not  cause any harm.  But Champion argued in favor of the special
verdict, insisting that the fault-allocation statute applied  and
required  allocation.  In response to Domkes claim that  omitting
the  special  verdict form would cause no harm,  Champions  trial
counsel  insisted  that the defendants had already  been  harmed:
[D]efendants have been substantially prejudiced because they  did
have to alter their closing argument to take out any language  to
that  effect,  based on the Courts prior ruling.  Domkes  counsel
replied: Well, I think that prejudice would go both ways, wouldnt
it?   The  court  then acknowledged that It goes both  ways,  but
nonetheless  elected  to submit the last minute  special  verdict

     29    We recognize that even if Domke did nothing to justify
Disbrows efforts to have him terminated, Domke might have been  a
problematic employee, and his performance on the job  might  have
irritated  his  superiors  at Champion and  predisposed  them  to
terminate him more readily than they might have terminated a less
difficult   employee.   But  even  if  this   kind   of   general
unprofessionalism made Domke a likely prospect for  firing,  this
behavior  could  not  properly be deemed  a  proximate  cause  of
Champions  decision  to actually fire him on  November  2,  1998;
instead,  his  vulnerability  to termination  would  simply  have
diminished  his  predictable tenure as  a  Champion  employee   a
factor that the jury was entitled to consider, and presumably did
consider,  in  deciding how much to award Domke  for  lost  wages
resulting from his termination.

     30     Jensen v. Alaska Valuation Serv., Inc., 688 P.2d 161,
162-63 (Alaska 1984) (Although officers of a corporation will not
ordinarily be held personally liable for contracts they  make  as
agents  of  the corporation, they must disclose their agency  and
existence  of  the corporation before they will be absolved  from

     31    779 P.2d 783, 791 n.10 (Alaska 1989).

     32     710  P.2d  1025  (Ariz. 1985),  superseded  in  other
respects by Arizona Revised Statute  23-1501 (1996).

This site is possible because of the following site sponsors. Please support them with your business.
Case Law
Statutes, Regs & Rules

IT Advice, Support, Data Recovery & Computer Forensics.
(907) 338-8188

Please help us support these and other worthy organizations:
Law Project for Psychiatraic Rights