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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Sea Hawk Seafoods, Inc. v. State (09/11/2009) sp-6412

Sea Hawk Seafoods, Inc. v. State (09/11/2009) sp-6412

     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

SEA HAWK SEAFOODS, INC., )
) Supreme Court No. S- 13107
Appellant, )
) Superior Court Nos.
v. ) 3AN-95-03500 CI
)
STATE OF ALASKA, ) O P I N I O N
)
Appellee. ) No. 6412 September 11, 2009
)

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Sen K. Tan, Judge.

          Appearances:    John    G.    Young,    Young
          deNormandie, and Michael T. Schein and  Kevin
          P.  Sullivan,  Sullivan & Thoreson,  Seattle,
          Washington,   for  Appellant.    Mary   Ellen
          Beardsley,   Assistant   Attorney    General,
          Anchorage,  and  Talis J.  Colberg,  Attorney
          General, Juneau, for Appellee.

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

I.   INTRODUCTION
          This  appeal raises the question whether the State  can
waive  its sovereign immunity through litigation conduct.   After
Sea  Hawk Seafoods, Inc. obtained a final judgment against Valdez
Fisheries   Development  Association,  it  alleged  that   Valdez
Fisheries fraudulently conveyed millions of dollars to the State.
The  State  litigated  the case for almost ten  years  before  it
raised  the  defense of sovereign immunity.   Although  Sea  Hawk
maintained  that the defense had been waived, the superior  court
dismissed  Sea Hawks fraudulent conveyance and conspiracy  claims
against  the  State, concluding that the State cannot  waive  its
claim  of sovereign immunity by failing to raise the issue  in  a
timely  manner because only the Alaska Legislature can waive  the
States  immunity from suit.  Because we conclude that  the  State
can  waive the affirmative defense of sovereign immunity  through
its   litigation  conduct  and  because  the  proper   test   for
determining  whether the State waived this defense has  not  been
applied to the facts of this case, we reverse and remand for  the
superior court to apply the correct test for waiver.
II.  FACTS AND PROCEEDINGS
          In  July  1997  a jury awarded Sea Hawk Seafoods,  Inc.
just  over  $1.5 million against Valdez Fisheries.  The  superior
court  entered final judgment against Valdez Fisheries  for  more
than  $2.1  million in compensatory damages, costs, and attorneys
fees  in  August 1997.   Apparently the State was concerned  that
the  jury  verdict would jeopardize Valdez Fisheries  ability  to
make  its  loan payments to the State, and the State demanded  in
August  1997 that Valdez Fisheries pay approximately $7.7 million
in  principal, which it owed to the State.  Two months later, the
State  approved a new loan to Valdez Fisheries for just  over  $1
million in operating expenses.
          Sea  Hawk  filed a post-judgment petition for avoidance
of  fraudulent conveyance in October 1997, claiming that the loan
transactions between the State and Valdez Fisheries constituted a
fraudulent  conveyance and seeking that the State return  all  of
the money it had received from Valdez Fisheries.  The State filed
its answer to Sea Hawks petition in October 1997.  In addition to
reserv[ing] the right to assert additional defenses as  they  may
become known, the State asserted that Sea Hawk failed to state  a
claim  upon which relief can be granted and maintained  that  the
State is not liable for punitive damages under AS 09.50.280.   In
late  October  the State filed a motion to dismiss  the  petition
under  Alaska Civil Rule 12(c), which was converted by the  trial
court to a motion for summary judgment.1
          Sea  Hawk filed a cross-motion for summary judgment  on
its  fraudulent conveyance petition in November 1997.  Later that
month  Sea Hawk filed a motion to amend the petition to  add  the
tort  claim of conspiracy against the State for participating  in
the  alleged  fraudulent conveyance and it attached the  proposed
amended  petition to its motion.  The State and Valdez  Fisheries
opposed  the motion.  According to the State, the superior  court
never issued a ruling on Sea Hawks motion to amend the petition.2
          In  March  1998 Valdez Fisheries filed for  chapter  11
bankruptcy protection in federal bankruptcy court, resulting in a
notice  of  automatic  stay  in the superior  court.   After  the
bankruptcy  court approved the settlement agreement  executed  by
Sea  Hawk  and  Valdez  Fisheries, it  dismissed  the  bankruptcy
proceedings in April 1999.  That month Sea Hawk filed a motion in
the  superior court that renewed its requests for rulings on  its
claims  against the State and sought about $1 million in  damages
to  cover  the  shortfall that it had failed  to  obtain  in  its
settlement  with Valdez Fisheries.  The superior court  ruled  in
          February 2000 that the bankruptcy court retained jurisdiction to
interpret whether any of Sea Hawks claims against the State  were
eliminated by its settlement with Valdez Fisheries, and the court
directed the parties to submit the issue to the bankruptcy court.
Following  decisions  by the bankruptcy  court  and  the  federal
district court, the United States Court of Appeals for the  Ninth
Circuit  ruled in February 2006 that the bankruptcy court  lacked
jurisdiction to interpret the settlement agreement.3
          Sea  Hawk  filed  a  motion in  May  2006,  asking  the
superior  court to reopen its case against Valdez  Fisheries  and
the  State  as  well as to rule on the pending cross-motions  for
summary judgment.  The State opposed the motion, requesting  that
the superior court determine whether Sea Hawks claims against the
State   were  barred  by  the  settlement  agreement  before   it
considered  the  pending motions.  In October 2006  the  superior
court denied both summary judgment motions.
          Sea  Hawk  and the State again filed cross-motions  for
summary judgment in 2007.  In its opposition to Sea Hawks summary
judgment motion and reply to its own summary judgment motion, the
State  for  the  first time claimed that it was immune  from  Sea
Hawks  suit.   Sea  Hawk  moved to strike  the  States  sovereign
immunity  defense,  contending that the  State  had  waived  this
defense by failing to assert it as an affirmative defense in  its
answer.   In  October 2007 the superior court  denied  Sea  Hawks
motion  to  strike  the  States sovereign  immunity  defense  and
granted  the  States  motion for summary  judgment  on  sovereign
immunity  grounds.   The superior court reasoned  that  only  the
legislature, by statute, can waive sovereign immunity  and  found
that  [t]here  is  no such statutory waiver here.   The  superior
court  remarked  that [i]f conduct can serve  as  an  implied  or
constructive  waiver,  then the State has  waived  its  sovereign
immunity  by failing to raise the issue after over ten  years  of
litigation.4   But  the superior court went on to  conclude  that
waiver  of  the sovereign immunity defense cannot be  implied  by
failing to raise the issue in a timely manner.
          The superior court awarded the State twenty percent  of
its  attorneys  fees under Alaska Rule of Civil Procedure  82(a).
Addressing  the  question  whether  the  late  assertion  of  the
sovereign  immunity defense caused Sea Hawk to expend unnecessary
attorneys fees, the superior court found that the State  did  not
act  in  bad faith or in a vexatious manner and that even  if  [a
motion  asserting the sovereign immunity defense] had been  filed
much  earlier,  it  is doubtful that it would have  been  decided
earlier,  or  that  it would have impacted  the  many  layers  of
litigation  that  followed.  The superior court also  denied  Sea
Hawks request for attorneys fees, reasoning that Alaska Appellate
Rule 508(e) was inapplicable and that use of its equitable powers
to override Civil Rule 82 was not warranted.
          Sea  Hawk  appeals  the  superior  courts  rulings   on
sovereign immunity and attorneys fees.
III. STANDARD OF REVIEW
          This  appeal  involves a grant of summary judgment  and
presents questions of law concerning waiver of sovereign immunity
through  litigation  conduct.   We  therefore  apply  a  de  novo
          standard of review, adopting the rule of law that is most
persuasive in light of precedent, reason, and policy.5   We  will
affirm  a grant of summary judgment if the evidence in the record
fails to disclose a genuine issue of material fact and the moving
party is entitled to judgment as a matter of law.6
IV.  DISCUSSION
          The  doctrine of sovereign immunity originates from the
ancient  maxim  that  the  king can  do  no  wrong,  and  it  has
historically  barred  parties from bringing  claims  against  the
government.7   But sovereign immunity has been criticized  as  an
anachronism, without rational basis, that has existed only by the
force of inertia.8  As the doctrine evolved in the United States,
individual  states  began consenting to  be  sued  under  certain
conditions.9  The State of Alaska consents to suits against it in
article   II,  section  21  of  the  Alaska  Constitution:    The
legislature  shall  establish procedures for  suits  against  the
State.   Presently,  the  general rule  in  Alaska  is  that  the
government is liable for its wrongs.10
          Pursuant  to  article  II, section  21  of  the  Alaska
Constitution,    AS   09.50.250   establishes   that    contract,
quasi-contract,  or  tort claim[s] may  be  brought  against  the
State, but it places some limitations on the States liability for
these  claims.   Among  the exceptions to  the  general  rule  of
liability  are  claims aris[ing] out of . . .  misrepresentation,
deceit, or interference with contract rights.11  The applicability
of  this  exception to liability in this case  is  not  disputed.
Instead,  Sea  Hawk  argues that the State waived  its  claim  of
sovereign immunity by raising the defense after almost ten  years
of litigation.
          As  the parties recognize, the first question raised in
this  appeal  is  whether  a waiver of sovereign  immunity  is  a
jurisdictional requirement.  In other words, does the defense  of
sovereign  immunity affect a courts authority to hear  the  case?
Although  some courts have held that a states sovereign  immunity
relates to a courts jurisdiction over the subject matter  of  the
case  and therefore the government can raise its immunity at  any
time,12 most courts do not take this approach.13  For example, the
Supreme  Court of South Carolina overrule[d] the antiquated  rule
that sovereign immunity is a jurisdictional bar and, accordingly,
cannot  be  waived to join those jurisdictions  which  hold  that
sovereign  immunity  is  an  affirmative  defense  that  must  be
[pleaded].14  New Jersey15 and Utah16 are among the states that have
concluded that sovereign immunity is an affirmative defense,  and
sovereign immunity is an affirmative defense by statute in  other
states, including Michigan,17 Pennsylvania,18 and South Dakota.19
And  even  some  courts  have treated sovereign  immunity  as  an
affirmative defense in decisions that have not directly addressed
whether  sovereign  immunity relates to the  courts  jurisdiction
over the subject matter of the case.20
          We  have  recognized  that a court  has  subject-matter
jurisdiction over a case when it has  the legal authority .  .  .
to  hear  and  decide [that] particular type of case.  21   Under
article   IV,  section  1  of  the  Alaska  Constitution,   [t]he
jurisdiction  of courts shall be prescribed by law.  Accordingly,
          AS 22.10.020(a) provides that the superior court has jurisdiction
in  all  civil  and  criminal matters.  In  recognition  of  this
provision,  the State does not deny that the superior  court  had
the  legal authority to hear the civil claims brought by Sea Hawk
against private parties such as Valdez Fisheries.
          Instead,  the  State contends that AS 09.50.250  limits
the  superior  courts authority to hear Sea Hawks claims  to  the
extent  that  they  are  asserted against  the  State.   Yet  the
language of AS 09.50.250 indicates that the States consent to  be
liable   for  certain  activities  is  independent  of  a  courts
authority   to   hear   such   claims   for   recovery.    Alaska
Statute 09.50.250 provides that all civil claims22 may be brought
against  the  State  in a state court if the court  has  subject-
matter  jurisdiction: A person or corporation having a  contract,
quasi-contract,  or  tort claim against the state  may  bring  an
action  against the state in a state court that has  jurisdiction
over the claim.  This statute was enacted pursuant to article II,
section  21  of  the Alaska Constitution,23 which authorizes  the
Alaska  Legislature to prescribe the terms and  conditions  under
which  the  State  consents  to  be  sued,  and  not  under   the
constitutional  provision  that  authorizes  the  legislature  to
establish  the  courts  jurisdiction.24  Thus,  the  language  of
AS  09.50.250  does  not suggest that the  statute  serves  as  a
limitation  on a state courts authority to hear particular  types
of cases.25
          Moreover,  our  prior  treatment  of  the  defense   of
sovereign  immunity confirms that it is a defense that  does  not
affect  a  courts subject-matter jurisdiction.  Many courts  have
concluded that sovereign immunity is an affirmative defense  that
must be pleaded to avoid waiver.26  This conclusion is implicit in
our decision in University of Alaska v. Simpson Building Supply.27
There,  the  University of Alaska first asserted  that  sovereign
immunity could bar a materialmans lien against its property at  a
hearing  on  a summary judgment motion that was held  almost  two
years after the university had filed its answer.28  On appeal the
university  argued  that the superior courts  lien  judgment  was
erroneous because its property was immune from lien attachment.29
We  noted  that there is considerable merit in Simpson  Buildings
contention that immunity is an affirmative defense which must  be
specifically  pleaded  because  even  though  immunity   is   not
specifically  denominated in Civil Rule 8(c)  as  an  affirmative
defense,  immunity from liens is an avoidance  and  thus  can  be
characterized  as  an affirmative defense.30   Despite  this,  we
remanded  the matter to develop the facts and law on whether  the
property was immune from liens because of our reservations  about
endorsing a potentially null judgment.31
          We  clarify now what we implied in Simpson: the  States
claim  of  sovereign  immunity is properly  characterized  as  an
affirmative defense because it is an avoidance under  Civil  Rule
8(c).   This  rule  requires that a litigant  set  forth  certain
specific  defenses  as well as any other matter  constituting  an
avoidance  or  affirmative defense.  We have  explained  that  an
avoidance  is  a  matter  that avoids the  action  and  that  the
plaintiff does not have to prove at the outset in support of  the
          action.32  Sovereign immunity satisfies this definition because it
bars  a  person  from bringing a claim against  the  State33  and
plaintiffs are not required to show that they may sue  the  State
in order to proceed with their claims.34
          Our   determination  that  sovereign  immunity  is   an
affirmative defense leads us to the question whether it  must  be
pleaded to avoid waiver.  Alaska Civil Rule 8(c) provides that  a
party  shall  set forth affirmative defenses [i]n pleading  to  a
preceding  pleading.   This requirement aims  to  give  litigants
sufficient  notice  of  their opponents  defenses  to  adequately
prepare for trial.35  But failing to plead an affirmative defense
does  not  necessarily result in waiver of  the  defense  because
Alaska follows the widely-used approach which, if undue prejudice
would  not be visited upon the opposing party, allows a  litigant
to  raise  new affirmative defenses at any time through a  motion
for summary judgment.36  This approach stems from the policy that
decisions  should be based on the merits rather than on  pleading
technicalities37 and from Civil Rule 15s intention that  requests
for  leave to amend pleadings be liberally granted.38   Thus,  we
agree  with  the  courts  that have concluded  that  whether  the
government   waived  its  sovereign  immunity   by   failing   to
affirmatively  plead the defense in the answer turns  on  whether
the  adverse  party is prejudiced by the moving partys  delay  in
raising the defense.39
          We have previously determined that [w]hether a litigant
is  unduly  prejudiced  by an opponents  post-answer  attempt  to
obtain  summary  judgment on the basis of an affirmative  defense
not  set  forth in the pleadings is an inquiry invoking virtually
the  same concerns as a motion to amend the pleadings with  leave
of  court.40   Accordingly, we have applied the same  factors  to
determine  whether a party would be prejudiced  if  the  opposing
party  were permitted to raise a new affirmative defense  at  the
summary  judgment  stage as to decide whether a  party  would  be
prejudiced  if  the opposing party were permitted  to  amend  its
pleadings.41   These factors include added expense and  delay,  a
longer or more burdensome trial, or if the issues being raised in
the amendment are remote from the scope of the original case.42  A
finding of prejudice, however, is not necessarily fatal.   Before
resolving  whether  the State has waived its  sovereign  immunity
defense through litigation conduct, the trial court must consider
whether  additional  time  or money can  remedy  the  prejudicial
effect of the States late assertion of the defense.43
          In the present case, the trial court remarked that [i]f
conduct can serve as an implied or constructive waiver, then  the
State  has waived its sovereign immunity by failing to raise  the
issue  after  over ten years of litigation.  But the trial  court
did  not provide any explanation for this conclusion nor  did  it
determine  whether Sea Hawk had been prejudiced.   Moreover,  the
courts  comments  regarding its award of attorneys  fees  to  the
State appear to cut against its waiver conclusion.  In addressing
whether  the  late  assertion of the sovereign  immunity  defense
caused  Sea Hawk to expend unnecessary attorneys fees, the  trial
court  remarked  that  because  the  case  had  been  delayed  by
bankruptcy  proceedings and several appeals, even  if  [a  motion
          asserting the sovereign immunity defense] had been filed much
earlier,  it is doubtful that it would have been decided earlier,
or that it would have impacted the many layers of litigation that
followed.  The trial court also noted that [i]t appears  that  in
the  intervening  years there were concerns as  to  whether  this
court  had  jurisdiction  to  deal  with  issues  including   the
sovereign  immunity claim.  Thus, we remand  so  that  the  trial
court  may apply the proper waiver analysis to determine  whether
the State waived its sovereign immunity defense.44
V.   CONCLUSION
          The State can waive its claim of sovereign immunity  by
failing  to  raise  the affirmative defense in a  timely  manner.
Whether  the  State  waived  the defense  turns  on  whether  the
plaintiff  is  prejudiced by the States  late  assertion  of  the
defense.  To make a determination on the prejudice issue, a court
must consider factors including added expense and delay, a longer
or  more burdensome trial, and if the issues being raised in  the
amendment are remote from the scope of the original case, as well
as  whether  additional time or money can remedy the  prejudicial
effect of the States delay in raising the defense.  If the  trial
court  determines  that the State waived its claim  of  sovereign
immunity,  the  court will need to rule on Sea Hawks  outstanding
motion  to  amend  its petition to include the conspiracy  claim.
Because it was error to conclude that the State cannot waive  its
sovereign immunity defense through litigation conduct and to fail
to  apply  the correct test for determining waiver of the  States
sovereign immunity, we REVERSE and REMAND for further proceedings
consistent with this opinion.
_______________________________
     1     Although  the State asserted that its motion  was  for
judgment  on  the  pleadings under Alaska Civil  Rule  12(c),  it
supported its motion with documents on file with the trial court,
attached   an   exhibit   to  its  supporting   memorandum,   and
acknowledged  that  the trial court might  decide  to  treat  its
motion  as a motion for summary judgment.  See Alaska R. Civ.  P.
12(c)  (If,  on  a motion for judgment on the pleadings,  matters
outside  the pleadings are presented to and not excluded  by  the
court,  the  motion shall be treated as one for summary  judgment
and disposed as provided in Rule 56 . . . .).

     2     Sea Hawk maintains that its complaint has been amended
by implied consent under Alaska Civil Rule 15.

     3     In  re Valdez Fisheries Dev. Assn, Inc., 439 F.3d  545
(9th Cir. 2006).

     4     Sea Hawk added the State to its lawsuit against Valdez
Fisheries  on October 3, 1997, and the State for the  first  time
claimed sovereign immunity on July 20, 2007, about nine years and
ten months after the State was added.

     5     State Farm Mut. Auto. Ins. Co. v. Dowdy, 192 P.3d 994,
998 (Alaska 2008) (internal quotation marks omitted).

     6     Ware  v.  Ware,  161  P.3d 1188,  1192  (Alaska  2007)
(internal quotation marks omitted).

     7    State v. Zia, Inc., 556 P.2d 1257, 1260 (Alaska 1976).

     8     State  v.  Abbott,  498 P.2d 712,  717  (Alaska  1972)
(alteration and internal quotation marks omitted).

     9    Zia, 556 P.2d at 1260.

     10    See Kinegak v. State, Dept of Corr., 129 P.3d 887, 889
(Alaska 2006) ([L]iability is the rule, immunity the exception in
claims  against  the state. (internal quotation marks  omitted));
Adams  v.  State,  555 P.2d 235, 244 (Alaska 1976)  (The  law  of
sovereign immunity has evolved from the early common law that the
King can do no wrong through a stage where . . . the King can  do
only little wrongs to its present posture, where liability is the
rule, immunity the exception. (footnote, alteration, and internal
quotation marks omitted)).

     11    AS 09.50.250(3).

     12     See, e.g., Kirk v. Kennedy, 231 So. 2d 246, 248 (Fla.
Dist.  App. 1970) (holding that because the defense of  sovereign
immunity relates solely to the jurisdiction of the court over the
subject  matter of the cause, a defendant may move to  dismiss  a
complaint  on the ground of sovereign immunity at any time  under
the  Florida civil procedure rules); Henderson v. Dept  of  Corr.
Servs.,  589  N.W.2d 520, 522 (Neb. 1999) (holding that  [a]bsent
legislative  action  waiving sovereign immunity,  a  trial  court
lacks  subject  matter jurisdiction over an  action  against  the
state   and   that  [l]itigants  cannot  confer  subject   matter
jurisdiction  on  a judicial tribunal by either  acquiescence  or
consent and the states immunity from suit cannot be waived  by  a
voluntary general appearance by the Attorney General);  see  also
57  Am.  Jur.  2d  Municipal,  County,  School,  and  State  Tort
Liability   605  (2001) (citing decisions holding that  a  states
sovereign immunity can be raised at any time because the  defense
goes to a courts subject-matter jurisdiction).

     13    See, e.g., Gauvin v. City of New Haven, 445 A.2d 1,  3
(Conn.  1982) (Governmental immunity is essentially a defense  of
confession and avoidance similar to other defenses required to be
affirmatively pleaded.); Cross v. City of Kansas City,  638  P.2d
933,  937  (Kan.  1982) (holding that governmental  immunity  has
[t]raditionally . . . been raised as a failure to state  a  claim
upon  which  relief can be granted[] or failure  to  state  facts
sufficient to constitute a cause of action (citation and internal
quotation  marks  omitted)); Hern v. Crist, 735 P.2d  1151,  1154
(N.M. App. 1987) (ruling that it [is] preferable practice for the
immunity  defense  to be specifically raised  as  an  affirmative
defense or by way of a motion to dismiss).  Cf. Wendelken v. JENK
LLC,  661 S.E.2d 152, 155 (Ga. App. 2008) (applying the rule that
the  party seeking to benefit from a waiver of sovereign immunity
must  establish that the governments sovereign immunity has  been
waived  because  immunity from suit is a  privilege  and  not  an
affirmative  defense); Drake v. Smith, 390  A.2d  541,  543  (Me.
1978)  (declining to address whether jurisdictional grounds  were
the  basis  of  its  holding  that in  the  absence  of  specific
authority  conferred by [a legislative enactment], the sovereigns
immunity  from  suit cannot be waived through the  imposition  of
procedural  requirements  or be deemed  forfeited  by  procedural
defaults).  For examples of decisions by other states that  treat
sovereign immunity as an affirmative defense, see infra notes 14-
20.  See also 57 Am. Jur. 2d Municipal, County, School, and State
Tort  Liability   621 (listing decisions holding  that  sovereign
immunity  is  an  affirmative  defense  that  is  waived  if  not
affirmatively pleaded).

     14     Washington  v. Whitaker, 451 S.E.2d  894,  898  (S.C.
1994).

     15    Kolitch v. Lindedahl, 497 A.2d 183, 189 (N.J. 1985) (It
is  well established that the burden is on the public entity both
to plead and prove its immunity under our Act . . . .).

     16     Ferree  v.  State, 784 P.2d 149, 152-53  (Utah  1989)
(Sovereign immunity . . . is an affirmative defense . . . .).

     17    See Mich. Civ. R. 2.111(F)(3)(a).

     18    See Pa. R. Civ. P. 1030(a).

     19    See S.D. Codified Laws  21-32A-3 (1987).

     20     See Sierra v. Assoc. Marine Insts., Inc., 850 So.  2d
582,  590  (Fla.  Dist.  App.  2003) (noting  sovereign  immunity
generally  is an affirmative defense that may justify granting  a
motion  to  dismiss  only when the complaint itself  conclusively
establishes  its  applicability in addressing  the  lower  courts
holdings  that  the  defendants  were  immune  from  the  alleged
intentional  torts and that the second amended complaint  alleged
conduct  that  constituted  planning-level  activity  for   which
sovereign  immunity  was not waived), superseded  by  statute  on
other  grounds, 2003 Fla. Sess. Law Serv. ch. 2003-412,   14,  as
recognized in Cabrera v. T.J. Pavement Corp., 2 So. 3d  996,  999
n.4  (Fla.  Dist.  App.  2008); Goad v. Cuyahoga  County  Bd.  of
Commrs, 607 N.E.2d 878, 879-80 (Ohio App. 1992) (explaining  that
pleading  the affirmative defense of failure to state claim  upon
which   relief  can  be  granted  is  sufficient  to  raise   the
affirmative  defense  of  sovereign  immunity  as  long  as   the
complaint  itself bore conclusive evidence that  the  action  was
barred by sovereign immunity).

     21     Nw. Med. Imaging, Inc. v. State, Dept of Revenue, 151
P.3d  434, 438 (Alaska 2006) (quoting Erwin Chemerinsky,  Federal
Jurisdiction 257 (3d ed. 1999)).

     22     See Wright Truck & Tractor Serv., Inc. v. State,  398
P.2d  216, 220 (Alaska 1965) (holding that AS 09.50.250  includes
all  civil  claims), superseded by statute on other grounds,  ch.
30,   2,  SLA 1965, as recognized in State v. Phillips, 470  P.2d
266, 272 (Alaska 1970).

     23    See State v. Haley, 687 P.2d 305, 318 (Alaska 1984) (By
enacting   section  250,  the  legislature  has   exercised   its
authority, pursuant to Alaska Const. art. II,  21, to  waive  the
States immunity to suits asserting contract claims against it.).

     24    Alaska Const. art. IV,  1.

     25     In  State  v. Zia, Inc., 556 P.2d 1257, 1263  (Alaska
1976),   where   we  held  that  AS  09.50.250   establishes   an
administrative  procedure  that  is  a  condition  precedent   to
recovery  against the State, we noted that we  did  not  find  AS
09.50.250  to  be of the jurisdictional nature,  but  rather  was
founded on a policy whereby a court refrains from exercising  its
existing jurisdiction.

     26     See,  e.g., Kolitch v. Lindedahl, 497 A.2d  183,  189
(N.J.  1985) (It is well established that the burden  is  on  the
public entity both to plead and prove its immunity under our  Act
. . . .); Washington v. Whitaker, 451 S.E.2d 894, 898 (S.C. 1994)
([W]e overrule the antiquated rule that sovereign immunity  is  a
jurisdictional bar and, accordingly, cannot be waived.   We  join
those  jurisdictions  which hold that sovereign  immunity  is  an
affirmative  defense  that  must be pled.  (citations  omitted));
Ferree  v.  State,  784 P.2d 149, 152-53 (Utah  1989)  (Sovereign
immunity . . . is an affirmative defense and conceptually  arises
subsequent to the question of whether there is tort liability  in
the  first instance.); see also 57 Am. Jur. 2d Municipal, County,
School,  and State Tort Liability  621 (2001) (listing  decisions
holding that sovereign immunity is an affirmative defense that is
waived if not affirmatively pleaded).

     27    530 P.2d 1317 (Alaska 1975).

     28    Id. at 1323.

     29    Id. at 1322.

     30    Id. at 1323.  Similarly, in State, Commercial Fisheries
Entry  Commission  v. Carlson (Carlson III),  65  P.3d  851,  873
(Alaska 2003), we rejected the States argument that had sovereign
immunity overtones, reasoning that [t]he States failure to  raise
its  immunity argument before the superior court and before  this
court  at  the time this issue was being litigated precludes  the
State from raising this defense now.

     31    Simpson, 530 P.2d at 1324.

     32     Rollins  v. Leibold, 512 P.2d 937, 941 (Alaska  1973)
(citing  2A J. Moore, Federal Practice  8.27(3) (2d ed. 1972);  5
C.  Wright  &  A.  Miller,  Federal Practice  &  Procedure   1271
(1969)).

     33     See  AS 09.50.250 (listing limitations to the  States
consent to be sued).  See generally State v. Zia, Inc., 556  P.2d
1257,  1260  (Alaska  1976)  (explaining  that  historically  the
doctrine  of  sovereign immunity operated  as  a  bar  to  claims
brought  against the state but that states began to permit  suits
against  themselves as long as they were brought in a manner  and
in the courts prescribed by law).

     34     See  AS  09.50.250 (waiving the States immunity  from
contract,   quasi-contract,  and  tort  suits  without  requiring
plaintiffs  to  prove waiver before suing the State);  see  also,
e.g.,  Carlson  III,  65  P.3d at 873-74  (rejecting  the  States
argument  that it was immune from class actions for  fee  refunds
because  the  argument was waived and outside the  scope  of  the
remand without requiring the class members to have shown that the
State  had waived its immunity before proceeding with the  suit);
Simpson,  530  P.2d  at  1324 (remanding the  immunity  issue  to
develop  the  requisite  facts  and  law  regarding  whether  the
universitys  property was immune from liens  without  imposing  a
requirement that the plaintiff show that the State had waived its
immunity in order to proceed with the suit).

     35     Gamble v. Northstore Pship, 907 P.2d 477, 481 (Alaska
1995).

     36    Id. at 483 (quoting Blake v. Gilbert, 702 P.2d 631, 639
(Alaska  1985),  overruled on other grounds by Bibo  v.  Jeffreys
Rest., 770 P.2d 290, 296 n.9 (Alaska 1989)).

     37    Id.

     38     Id.; see also Alaska R. Civ. P. 15(a) (providing that
leave  to amend a pleading shall be freely given when justice  so
requires).

     39    Pickle v. Bd. of County Commrs of County of Platte, 764
P.2d 262, 264 (Wyo. 1988); accord Morris v. City of Chicago,  474
N.E.2d 1274, 1278-79 (Ill. App. 1985).

     40    Gamble, 907 P.2d at 484.  We reasoned that a motion to
amend  the  pleadings with leave of court in combination  with  a
standard summary judgment motion is functionally equivalent to  a
summary  judgment  motion that raises a new affirmative  defense.
Id.  at 484 n.4.  Similarly, a motion to amend the pleadings with
leave  of  court  in combination with a standard  response  to  a
summary  judgment motion is functionally equivalent to a response
to  a  summary  judgment  motion that raises  a  new  affirmative
defense.

     41     See,  e.g., id. at 484; Rutledge v. Alyeska  Pipeline
Serv. Co., 727 P.2d 1050, 1054-55 (Alaska 1986).

     42     OCallaghan  v.  Rue, 996 P.2d 88, 101  (Alaska  2000)
(internal quotation marks omitted).  Another possible factor that
may  be  relevant to the trial courts prejudice determination  is
the  plaintiffs  ability  to amend the complaint  to  name  state
officials  in their individual capacities.  See generally  State,
Dept of Health & Social Servs., Div. of Family & Youth Servs.  v.
Native  Village  of  Curyung, 151 P.3d  388,  404  (Alaska  2006)
(explaining that even if the government is immune from suit,  the
plaintiff may seek to enjoin the actions of state officials or to
obtain  a  declaratory judgment that the state officials  actions
violate  federal  statutory or constitutional rights  and  noting
that  as  a practical matter, either remedy . . . is functionally
the same as an injunction prohibiting the state itself from doing
those acts).

     43     Cf. DeNardo v. ABC Inc. RVs Motorhomes, 51 P.3d  919,
926-27  (Alaska  2002)  (explaining that  before  a  trial  court
dismisses an action under Civil Rule 37, the court must  consider
alternative  remedies  to  cure the  prejudicial  effect  of  the
discovery  violations and to deter further  violations,  such  as
monetary  sanctions); Gamble, 907 P.2d at 484 ([T]he  remedy  for
inadequate time to prepare on a new theory is a continuance,  not
preventing  a  trial on the merits of the new  theory.  (internal
quotation  marks omitted)); Zeller v. Poor, 577 P.2d 695,  697-98
(Alaska 1978) (noting that the inconvenience and additional legal
fees  associated  with  a  litigants delay  may  be  remedied  by
assessing  costs and attorneys fees in a discussion of dismissals
for want of prosecution under Civil Rule 41(e)).

     44     As alternative grounds for reversing the trial courts
dismissal  of  its  claims,  Sea  Hawk  argues  that  the  States
sovereign  immunity  defense was not properly  before  the  trial
court  because  the  State first raised its  claim  of  sovereign
immunity  in a reply memorandum for its summary judgment  motion.
The  trial  court  appropriately  considered  and  addressed  the
parties   arguments  concerning  whether  the  States  claim   of
sovereign  immunity had been waived, as we do here.   Because  we
decide  this case on the merits and instruct the trial  court  on
remand to determine whether the States sovereign immunity defense
has  been  waived,  we  need  not address  Sea  Hawks  procedural
argument.   See Hughes v. Bobich, 875 P.2d 749, 756 n.11  (Alaska
1994) (Our reversal of the trial courts decision on these grounds
makes  it  unnecessary for us to decide the  various  alternative
grounds  advanced  by the [plaintiffs] in challenging  the  trial
courts orders of dismissal and summary judgment.).  Finally,  our
disposition  moots  Sea Hawks argument that  the  superior  court
abused its discretion in awarding the State attorneys fees.   See
Cikan  v. ARCO Alaska, Inc., 125 P.3d 335, 342 n.22 (Alaska 2005)
(Our  reversal of the summary judgment order necessarily  vacates
the  superior  courts  award of attorneys fees  to  ARCO,  making
Cikans separate challenge to the fee award moot.).

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