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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Wagner v. Wagner (05/23/2008) sp-6268

Wagner v. Wagner (05/23/2008) sp-6268, 183 P3d 1265

     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

                    
GREGORY WAGNER, )
) Supreme Court No. S- 12306
Appellant, )
) Superior Court No. 4FA-03-00181 CI
v. )
) O P I N I O N
RICHARD WAGNER, )
) No. 6268 May 23, 2008
Appellee. )
)


          Appeal  from the Superior Court of the  State
          of    Alaska,   Fourth   Judicial   District,
          Fairbanks, Mark I. Wood, Judge.

          Appearances: John J. Connors, Law  Office  of
          John   J.   Connors,  P.C.,  Fairbanks,   for
          Appellant.  No appearance by Appellee.

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

          FABE, Chief Justice.

I.   INTRODUCTION
          A  father breached a contract with his son to share oil
revenues  with  him  in consideration for the sons  co-signing  a
$1.025  million  bank  loan.  Following a  jury  trial,  the  son
obtained a partial final judgment for back payment and an  Alaska
Rule  of Civil Procedure 82(b)(1) attorneys fees award.  The  son
also  received a partial final judgment for specific  performance
and  a  Rule 82(b)(2) attorneys fees award.  The son appeals  the
Rule  82(b)(2)  attorneys fees award.  Because the partial  final
judgment  for specific performance was not a money judgment,  the
superior court properly relied on Rule 82(b)(2), and therefore we
affirm the superior courts award of attorneys fees.
II.  FACTS AND PROCEEDINGS
          Richard  Wagner owns oil and gas leases  on  the  North
Slope  and  in Cook Inlet.  His royalty interests are  valued  at
between  $7.572 and $19.559 million.  He filed for bankruptcy  in
1988,  and  as  of  2001  still  owed  substantial  sums  to  his
creditors.   In December 2001 Richard and his son Gregory  Wagner
agreed that Gregory would co-sign for a $1.025 million loan  from
Northrim  Bank to Richard, with the funds to be used  to  satisfy
one  of  Richards creditors.  In consideration for Gregory making
his  own credit available and pledging the real estate he and his
wife owned as collateral for the loan, Gregory and Richard agreed
that  Gregory would be entitled to at least $2,500 per month from
Richards oil royalties.
          For  several  months,  Richard  made  no  payments   to
Gregory,  and  on November 25, 2002, Gregory sent  his  father  a
demand  letter.   In  response,  Richard  made  two  payments  to
Gregory,  the first in December 20021 and the second  in  January
2003.2   Richard  made no further payments, and Gregory  filed  a
complaint  for specific performance in superior court on  January
24,  2003.3  A jury trial was held before Judge Mark I.  Wood  in
August  2005.   The  jury found that an oral  agreement  existed,
outlined  the basic terms of that agreement,4 found that  Richard
had  breached the agreement, determined that Richard owed Gregory
$139,180.89  in  back  payments,  and  concluded  that   Richards
obligation  to  share royalties per the terms  of  the  agreement
would  continue until production on wells ends.  The trial  court
heard oral argument on the specific performance claim on November
10, 2005.
          Judge   Wood  issued  a  partial  final  judgment   for
$182,130.06  against Richard on November 14, 2005.   This  amount
included  the  $139,180.89 in back payments  that  the  jury  had
determined   Richard  owed  Gregory,  $10,160.33  in  prejudgment
interest, $17,434.12 in attorneys fees, and $15,354.72 in  costs.
On  December 23, 2005, Judge Wood issued a partial final judgment
for  specific  performance,  requiring  Richard  to  perform  his
obligations  under the agreement found by the jury and  including
an award for $33,300.30 in attorneys fees.  Judge Wood calculated
attorneys fees under the partial final judgment for back  payment
using Rule 82(b)(1) and relied on Rule 82(b)(2) to calculate  the
attorneys fees award for the partial final judgment for  specific
performance.
          Gregory  appeals  the  attorneys fees  awarded  in  the
partial final judgment for specific performance.
III. DISCUSSION
     A.   Standard of Review
          We  review  awards of attorneys fees for  an  abuse  of
discretion5  and  will only reverse if the  award  is  arbitrary,
capricious,  manifestly unreasonable, or  stemmed  from  improper
motive.6  We consider de novo whether the trial court should have
applied  Rule  82(b)(1) or Rule 82(b)(2) in calculating  the  fee
award.7
     B.   The  Superior  Court Applied the Appropriate  Attorneys
          Fees  Schedule to Gregorys Partial Final  Judgment  for
          Specific Performance.
          
          Gregory  contends  that  the superior  court  erred  by
calculating  the  attorneys  fees award  for  the  partial  final
judgment  for  specific  performance under  Rule  82(b)(2).8   He
argues  that  the  trial courts reliance  on  Rule  82(b)(2)  was
misplaced  because  the  partial  final  judgment  for   specific
performance  was a monetary judgment.  He maintains that  because
the  present value of his prospective recovery under the judgment
is  $2.125  million,9 Civil Rule 82(b)(1) fees of . . .  $212,500
are thus payable.
          We disagree.  In Dillingham Commercial Co. v. Spears,10
we  recognized that the superior court erred in applying the  fee
schedule  applicable  to  money judgments11  to  a  judgment  for
specific  performance of an option contract.12   We  specifically
indicated  that  [r]esort to the schedule of attorneys  fees  set
forth  in  Civil Rule 82(a)(1) was inappropriate since Dillingham
did  not  receive  a  money judgment.13  We  have  defined  money
judgment for attorneys fees purposes as a judgment in which money
change[s]  hands.14   Gregorys  partial  judgment  for   specific
performance was an equitable remedy,15 not a money judgment.  The
superior  court appropriately applied Rule 82(b)(2)  to  Gregorys
motion for attorneys fees under his partial judgment for specific
performance.
     C.   The Superior Court Did Not Deviate from the Schedule in
          Rule 82(b) in Its Award of Attorneys Fees.
          
          Gregory  argues  in the alternative that  the  superior
court  erred in calculating its award of attorneys fees  for  the
judgment for specific performance.  Gregory maintains that  under
Rule  82(b)(2),  he  was  entitled  to  thirty  percent  of   his
reasonable  actual attorneys fees,16 which totaled $169,115,  and
contends  that  the  award  did not  conform  to  this  schedule.
Gregory  also  contends  that  the  superior  court  provided  no
explanation  for its deviation from the schedule listed  in  Rule
82(b)(2).
          We  disagree.  Gregorys attorneys fees were awarded  in
two phases:  the first covered the $161,284 in fees incurred from
January  2003  through November 30, 2005.  Under  Rule  82(b)(2),
Gregory  was  entitled to thirty percent of his  total  attorneys
fees  for  that  first  phase,  or $48,385.20,  for  the  partial
judgment  on  specific performance.17  However,  had  Judge  Wood
awarded this amount, Gregory would have enjoyed a double recovery
because  Gregory  had already recovered $17,434.12  in  attorneys
fees  in  November  2005 on the partial final judgment  for  back
payment.   Instead,  the  superior court subtracted  the  earlier
award,  leaving  an  award of $30,951 for fees  incurred  through
November  2005  for  work related to the  judgment  for  specific
performance.
          The  second  phase  covered fees incurred  in  December
2005.   The superior court anticipated the need for an additional
attorneys fees award when it made its award for the first  phase:
          This award is for billings through 11/30/05.  Gregory Wagner is
entitled  to  30%  of  reasonable,  actual  attorneys  fees  from
11/30/05 through 12/23/05 (the dates of judgment) in addition  to
the  above figure.  Counsel for Gregory Wagner shall submit their
affidavits  for  that period and another judgment  for  attorneys
fees.
          When   Gregory  filed  his  supplemental   motion   for
attorneys  fees  for  work  performed during  December  2005,  he
indicated  that  he had incurred $7,831.00 in  fees  during  this
period.  Thirty percent of that total is $2,349.30.18  When added
to  the award of $30,951 on the judgment for specific performance
through   November  30,  2005,  the  Rule  82(b)(2)  fees   total
$33,300.30,  and this is exactly what Judge Wood  awarded.   When
added  to  the Rule 82(b)(1) award of $17,434.12 on the  judgment
for  back  payment, the fees total $50,734.42, which  amounts  to
thirty  percent  of  the total fees expended  in  the  litigation
$169,115.
          Because  the  superior court adhered  strictly  to  the
formula  of  Rule  82(b)(2) in its award of  attorneys  fees,  it
committed no error.
IV.  CONCLUSION
          We   AFFIRM  the  superior  courts  fee  award  in  all
respects.
_______________________________
     1    This payment was for $24,419.13 and was sent along with
a  spreadsheet  from  [Richards] accountant  which  purported  to
calculate   the   payments  owed  under  the  agreement.    While
acknowledging  the contract terms, [Richard] suggested  that  the
agreement   had   been   hastily  written   and   required   some
clarifications.   Neither Gregory nor Richard ever took steps  to
modify or clarify their agreement.

     2    The second payment was for $3,875.72.

     3    Gregory eventually filed two amended complaints listing
additional  claims against Richard, including a  claim  for  back
payment.

     4     In response to the question, [W]hat were the terms  of
that  agreement?, the jury answered, In exchange  for  getting  a
$1,025,000 loan from Northrim Bank to repay Richard Wagners  debt
at  Key Bank, Gregory Wagner will receive a share of profits from
Richard  Wagners  oil royalties.  In its findings  of  fact,  the
superior court described the agreement as follows:

          Richard  and Gregory agreed that the  monthly
          income  from  the oil royalties that  secured
          the  Key Bank loan would be used first to pay
          all  required  payments on the Northrim  Bank
          loan.   The  next  $10,000 of monthly  income
          would be allocated $2,500 to Gregory and then
          $7,500,  or the balance, whichever was  less,
          to  Richard.  Anything over $10,000 would  be
          divided equally between them.
          
     5    Ware v. Ware, 161 P.3d 1188, 1192 (Alaska 2007).

     6    Id.; Strong Enters., Inc. v. Seaward, 980 P.2d 456, 458
(Alaska 1999).

     7    Strong Enters., 980 P.2d at 458.

     8     Rule  82(b)(1) applies to a party recovering  a  money
judgment in a case, while Rule 82(b)(2) applies to cases in which
the prevailing party recovers no money judgment.

     9    Gregory calculated this value by taking $9,068,608, one
estimate  of  the  discounted present day value of  Richards  oil
royalties,  subtracting the approximately  $500,000  required  to
retire  the  Northrim Bank debt (which, he calculated,  left  the
value  of  the  royalties  at $8.5 million),  and  dividing  $8.5
million  by  25%,  which Gregory contends is  his  share  of  the
royalties, for a total of $2.125 million.

     10    641 P.2d 1 (Alaska 1982).

     11    This schedule is now contained in Rule 82(b)(1), but at
the  time  Dillingham  was decided, this  schedule  was  in  Rule
82(a)(1).  Russell v. Criterion Ins. Co., 917 P.2d 664,  665  n.2
(Alaska 1996).

     12    Spears, 641 P.2d at 10 n.16.

     13    Id.

     14     Atl.  Richfield  Co. v. State, 723  P.2d  1249,  1252
(Alaska 1986); see also Strong Enters., 980 P.2d at 458.

     15     Oaksmith v. Brusich, 774 P.2d 191, 197 (Alaska  1989)
(citing  Hall v. Add-Ventures, Ltd., 695 P.2d 1081, 1087  (Alaska
1985));  Blacks  Law  Dictionary 1435 (8th  ed.  2004)  (Specific
performance is an equitable remedy.).

     16     The  rule  indicates that [i]n  cases  in  which  the
prevailing  party  recovers no money judgment,  the  court  shall
award  the  prevailing party in a case which  goes  to  trial  30
percent of the prevailing partys reasonable actual attorneys fees
which were necessarily incurred.

     17    $161,284 x .30 = $48,385.20.

     18    $7,831 x .30 = $2,349.30.

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