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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Beal v. McGuire (9/25/2009) sp-6418

Beal v. McGuire (9/25/2009) sp-6418, 216 P3d 1154

     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


DAVID D. BEAL; JERRY L. COLES; )
STEVEN E. NATHANSON; ) Supreme Court No. S- 12626
MICHAEL C. NORMAN; )
RAYMOND E. GILLS; and ) Superior Court No. 3AN-03-6511 CI
STEPHEN C. SITTER, )
) O P I N I O N
Appellants, )
) No. 6418 September 25, 2009
v. )
)
DAVID A. MCGUIRE; HEALTH- )
SOUTH CORPORATION; ALASKA )
SURGERY CENTER, INC.; ALASKA )
SURGERY CENTER, LTD.; LOUISE )
BJORNSTAD; and LAKE OTIS )
PROFESSIONAL CENTER, LLC, )
)
Appellees. )
)
          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Mark Rindner, Judge.

          Appearances:  Douglas Pope, Pope  &  Katcher,
          Anchorage,   for  Appellants.    Timothy   J.
          Petumenos, Birch Horton Bittner & Cherot, and
          Roger  F.  Holmes, Biss & Holmes,  Anchorage,
          for Appellees.

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

          EASTAUGH, Justice.
I.   INTRODUCTION
          Six  members of a joint venture sued two other members,
primarily  claiming  breaches  of fiduciary  duties.   The  joint
venture, most of whose members were Anchorage physicians, owned a
medical services condominium on Laurel Street and leased  it  out
for use as an ambulatory surgical center.  The plaintiffs claimed
in part that the joint venturer defendants and others were liable
for  moving  the surgical center to a building not owned  by  the
joint  venture.   They claimed that this diminished  the  income-
earning capacity of the condominium because an Alaska statute, AS
18.07.031(c), effectively prevented the plaintiffs from replacing
the  surgery center on Laurel Street.  The superior court granted
complete  summary  judgment for all the defendants.   Because  we
conclude  that genuine issues of material fact exist both  as  to
the   extent  of  the  fiduciary  duty  the  two  joint  venturer
defendants  owed the plaintiffs and as to whether  they  breached
that  duty, we reverse in part and remand.  We affirm the summary
judgment entered for all the other defendants.
II.  FACTS AND PROCEEDINGS
          This  appeal  arises out of a lawsuit  brought  by  six
members  of  a joint venture, Advances in Surgical Care,  against
two  other joint venturers and against several other persons  and
entities.1  The plaintiffs were Anchorage physicians David  Beal,
Jerry Coles, Steven Nathanson, Michael Norman, Raymond Gills, and
Stephen   Sitter.    The  two  joint  venturer  defendants   were
HealthSouth  Corporation and Anchorage physician  David  McGuire;
the  other  defendants  were former HealthSouth  employee  Louise
Bjornstad and several business entities.
          Ten  physicians  and  one dentist  formed  Advances  in
Surgical  Care in 1981.  The owners of Advances changed over  the
years.   When  the  lawsuit was filed in 2003,  there  were  nine
members; each had an equal ownership interest.  The nine were the
six  plaintiffs, defendants HealthSouth and Dr. McGuire, and  one
other  individual.   Dr.  McGuire was not  one  of  the  original
Advances  members,  but  had  become  a  member  by  July   1982.
HealthSouth became a member in the mid-1990s.
          The 1981 organizing document was entitled Joint Venture
Agreement,  but it also consistently referred to the  members  as
partners  and to the entity as the Partnership.  The  1981  joint
venture agreement defines Partnership to mean joint venture.  The
members, including Dr. McGuire, executed an amended agreement  in
1982.   Like  the 1981 agreement, the 1982 agreement is  entitled
Joint  Venture Agreement, but it also consistently refers to  the
members as partners and to the entity as the Partnership.  Unlike
the   1981   agreement,  the  1982  agreement  does  not   define
Partnership.   The  record contains no later organizing  document
for  Advances,  and the parties refer to none, so we  assume  the
1982  agreement is the controlling document.  It was largely  the
same  as the 1981 agreement; we will discuss differences  in  the
two agreements as necessary.
          The  parties  dispute the nature and  legal  effect  of
Advancess  business  form.  We refer to the  entity  as  a  joint
venture,  per  the titles of the two joint venture agreements  in
the record.  Our usage is not meant to imply any legal or factual
distinction  between the joint venture form and  the  partnership
form.  We discuss that issue below.  Both agreements stated  that
          the sole purpose of Advances was to acquire, develop, and manage
property  for the production of income and profit.  But  it  also
appears  undisputed  that,  as  the  defendants  alleged  in  the
superior  court, the members specifically entered into the  joint
venture  agreement  to  construct  a  building  to  be  used  for
professional services.
          The  persons  who  were  the  original  Advances  joint
venturers  were also the shareholders of a separate  corporation,
Alaska   Surgery  Center,  Inc.,  that  was  then  operating   an
ambulatory  surgical center on Rhone Circle  in  Anchorage;  that
surgery  center  had been in operation since approximately  1976.
Alaska  Surgery  Center, Inc. has been known by different  names,
including Surgery Center, Inc. and Surgery Center.  We  refer  to
it  as  Alaska  Surgery  Center, Inc., the name  the  corporation
adopted  in  1983, or as Alaska Surgery Center  for  short.   The
plaintiffs  allege here, as did the defendants  below,  that  the
joint  venturers started the Advances joint venture primarily  to
construct  a  new  facility that could  house  a  new  ambulatory
surgery center.
          As  amended  in  1982,  AS  18.07.031  required  anyone
intending  to spend $1 million or more on the construction  of  a
health care facility to first obtain a certificate of need  (CON)
from the Alaska Department of Health and Social Services (DHSS).2
In  about  1982 Advances and Alaska Surgery Center, Inc.  jointly
applied  to  DHSS  for a CON to construct an ambulatory  surgical
center  on  Laurel Street in Anchorage so Alaska  Surgery  Center
could relocate from Rhone Circle.  Dr. Raymond Gills sent DHSS  a
letter on behalf of Alaska Surgery Center, Inc., stating in  part
that  the  space  at  Rhone Circle would no longer  be  used  for
outpatient surgery once that space was vacated.
          In  February  1983 DHSS issued to both  Alaska  Surgery
Center,  Inc. and Advances a CON for the construction  of  a  new
facility  and the relocation and expansion of the Surgery  Center
. . . .  The CON approved a maximum expenditure of $2,809,400 for
the  new  facility.  Advances then constructed a  new  ambulatory
surgical  facility  in  Condominium  A  of  4001  Laurel  Street;
Advances was the owner of that condominium.
          In late 1984 or early 1985 the individuals who were the
Alaska  Surgery Center, Inc. shareholders (and who were also  the
Advances  joint  venturers) sold a majority of  their  shares  in
Alaska  Surgery  Center, Inc. to a health care operating  company
called  AlternaCare.3   At  the same  time,  the  Advances  joint
venture  negotiated  a  twenty-year  lease  with  Alaska  Surgery
Center, Inc. for Condominium A at 4001 Laurel Street.  In effect,
the  joint  venture  leased the space for the surgery  center  to
AlternaCare  for twenty years.  The joint venturers also  entered
into  a  twenty-year non-competition agreement between themselves
and   AlternaCare  that  prohibited  Advances  and   the   former
shareholders  of  Alaska Surgery Center, Inc.  from  directly  or
indirectly engaging in the ambulatory surgery center business  at
any  location within a 25 mile radius of the current site of  the
Center  or  within  the Municipality of Anchorage,  whichever  is
smaller.   The  lease  and  the  non-competition  agreement  both
expired in 2005.
          The  ownership of Alaska Surgery Center, Inc.  changed,
and  in  1996  HealthSouth acquired a majority  interest  in  the
corporation.  Around the same time, HealthSouth also acquired  an
eleven percent interest in the Advances joint venture.  Thus,  by
the mid-nineties, the joint venturers included the six physicians
who are plaintiffs here and Dr. McGuire and HealthSouth.
          When  HealthSouth  acquired the  corporation  in  1996,
Alaska   Surgery  Center,  Inc.  had  approximately  nine   years
remaining on its Laurel Street lease with Advances.  In June 1998
HealthSouth  hired Dr. McGuire as a consultant to  help  relocate
the  Alaska  Surgery  Center before  its  lease  expired.   After
plaintiffs   filed  suit  in  2003,  Dr.  McGuire  testified   by
deposition that he believed that, to relocate the surgery  center
from Laurel Street, HealthSouth would have to either build a  new
facility  for  less  than $1 million or  apply  for  a  new  CON.
Because  he believed at the time that getting a new CON would  be
difficult,  Dr. McGuire informed HealthSouth that  the  best  and
most likely successful outcome would be legislative.
          Therefore,  around  1999, Dr. McGuire  and  HealthSouth
informed  the other joint venturers that they intended  to  lobby
the Alaska legislature either to repeal the CON requirement or to
raise  the  CON  threshold from $1 million to  $7  million.   The
plaintiffs  later asserted in their complaint that  they  had  no
objection to either of these proposed legislative changes.
          In  January  2000 a lobbyist hired by Dr.  McGuire  and
HealthSouth worked with legislators to introduce House Bill  297,
which  proposed  requiring CONs only for projects  with  proposed
costs  exceeding $7 million.  But the proposal to raise  the  CON
threshold  met  with  opposition.   By  March  2000  the  sponsor
statement for HB 297 indicated that the bill had been revised  to
provide  a solution to the immediate problem without raising  the
$1,000,000  floor.  The revised bill proposed allowing  a  health
care  facility to relocate to a new site without obtaining a  CON
as  long  as  there was no increase in the services offered.   As
revised,  HB  297 proposed in part adding this subsection  to  AS
18.07.031:
          (c)   Notwithstanding (a) of this section,  a
          person  who  is lawfully operating  a  health
          care  facility that is an ambulatory surgical
          facility at a site may make an expenditure of
          any  amount in order to relocate the services
          of  that  facility to a new site in the  same
          community without obtaining a certificate  of
          need as long as neither the bed capacity  nor
          the  number of categories of health  services
          provided   at   the  new  site  is   greater.
          However,   notwithstanding  the   expenditure
          threshold  in (a) of this section,  a  person
          may  not  use the site from which the  health
          care  facility  relocated for another  health
          care  facility  unless  authorized  under   a
          certificate of need issued by the department.
          
The  legislature  enacted the bill as so  revised;  the  governor
signed  it  into  law in April 2000.4  The last sentence  of  the
subsection  was  deleted when subsection .031(c) was  amended  in
2004.5
          In  2001  HealthSouth, relying on the new CON exception
created  in  2000  by AS 18.08.031(c), relocated  Alaska  Surgery
Center  from  4001  Laurel Street to the Lake  Otis  Professional
Center.   Dr.  McGuire,  Louise Bjornstad, and  HealthSouth  each
acquired an ownership interest in Lake Otis Professional  Center,
LLC,  the  company that owned the Lake Otis Professional  Center.
HealthSouths lease of the Laurel Street facility did  not  expire
until  2005 and HealthSouth apparently continued to pay  rent  to
the  Advances  joint venture through the end of the  lease.   The
defendants assert that the Laurel Street surgery center space has
remained vacant since Advances regained possession when the lease
expired in 2005.
          Five   of   the  joint  venturers  sued  Dr.   McGuire,
HealthSouth,  Louise  Bjornstad,  Alaska  Surgery  Center,  Inc.,
Alaska  Surgery Center, Ltd., and Lake Otis Professional  Center,
LLC  in April 2003.6  Another plaintiff was added later.  The six
plaintiffs  are  the appellants in the appellate  caption.  Their
March 2004 amended complaint asserted eight claims: (1) fraud  by
intentional  misrepresentation;  (2)  fraud  by  deception;   (3)
negligent  misrepresentation; (4) conversion; (5)  conspiracy  to
commit  fraud;  (6)  breach  of fiduciary  duty;  (7)  breach  of
contract; and (8) economic duress.
          The  superior  court granted complete summary  judgment
for  all the defendants in October 2006.  The court concluded  in
part  that  the plaintiffs had not demonstrated how  choosing  to
move rather than extending [the] lease breached  any duty owed by
defendants  McGuire and HealthSouth.  The court then awarded  all
of  the defendants attorneys fees under Alaska Civil Rules 68 and
82.
          The plaintiffs appeal.
III. DISCUSSION
     A.   Standard of Review
          We  review grants of summary judgment de novo,  drawing
all  factual inferences in favor of, and viewing the facts in the
light  most  favorable  to, the non-prevailing  party.7   Summary
judgment  is appropriate if there is no genuine issue as  to  any
material fact and the prevailing party is entitled to judgment as
a  matter  of law.8  A party opposing summary judgment  need  not
prove  that  it will prevail at trial, but only that there  is  a
triable  issue  of  fact.9  Any evidence sufficient  to  raise  a
genuine  issue  of material fact, so long as it amounts  to  more
than  a  scintilla of contrary evidence, is sufficient to  oppose
summary judgment.10
          The  applicability  of  a  legal  doctrine  presents  a
question  of  law  to  which we apply our  independent  judgment,
adopting  the  rule of law that is most persuasive  in  light  of
precedent,   reason,   and  policy.11   Questions   of   contract
interpretation generally raise questions of law that we review de
novo.12   Fact  questions may be created if the  meaning  of  the
contract  language  depends on conflicting extrinsic  evidence.13
Summary  judgment  is  inappropriate if there  is  an  unresolved
          material factual dispute about the intent of the contracting
parties.14  The parties expectations must be gleaned not only from
the   contract  language,  but  also  from  extrinsic   evidence,
including  evidence of the parties conduct, goals  sought  to  be
accomplished, and surrounding circumstances when the contract was
negotiated.15
          We review a superior courts award of attorneys fees for
an  abuse  of discretion.16  We will conclude there has  been  an
abuse of discretion if, after reviewing the whole record, we  are
left  with a definite and firm conviction that the superior court
erred in its ruling.17  Whether a superior court applied the  law
correctly in awarding attorneys fees is a question of law that we
review de novo.18  We apply the independent standard of review in
deciding   whether  a  superior  court  correctly  determined   a
settlement offers compliance with Rule 68.19
     B.   Whether It Was Error To Grant Summary Judgment  to  the
          Joint Venturer Defendants on the Fiduciary Duty Claim
          
          The  plaintiffs argue that the superior court erred  by
granting  summary  judgment to the two joint venturer  defendants
(HealthSouth and Dr. McGuire) on the fiduciary duty claim.20  This
claim  primarily concerns the joint venturer defendants  role  in
relocating  the  surgery center from the Laurel  Street  facility
owned  by the joint venture to a facility not owned by the  joint
venture at a time AS 18.07.031(c) effectively prevented operation
of a replacement surgery center at the Laurel Street address. The
plaintiffs  contend that the joint venture agreement  as  written
imposed  fiduciary duties relevant here.  They  also  argue  that
these  genuine  issues of material fact exist: (1) whether  joint
venturers  Dr.  McGuire  and HealthSouth  owed  the  other  joint
venturers   a  fiduciary  duty;  (2)  whether  Dr.  McGuire   and
HealthSouth  breached that duty; and (3) whether  the  plaintiffs
suffered damages as a result.
          1.   The   scope   of   Dr.  McGuire  and  HealthSouths
               fiduciary duties
          The  plaintiffs  contend preliminarily that  the  joint
venture  agreement created a fiduciary relationship and that  the
joint  venturers owed each other a duty to act without  fraud  or
deceit  and  with full disclosure at all times.  They also  argue
that  there  are  genuine issues of material fact concerning  the
scope  of  fiduciary duties owed by Dr. McGuire and  HealthSouth.
Dr.  McGuire  and HealthSouth respond that Advances was  a  joint
venture,  not a partnership, and assert that this distinction  is
significant because the scope of duties owed between partners  is
generally broader than that owed between joint venturers.
               a.   Whether the form of Advances matters
          In  granting summary judgment, the superior court noted
that  the  parties disagreed about whether partnership  or  joint
venture  law determined the scope of fiduciary duties owed.   The
superior  court did not resolve this disagreement,  having  ruled
there was no breach of any fiduciary duty.
          Because  joint ventures and partnerships  both  involve
fiduciary relationships, the outcome of this appeal does not turn
on  whether  Advances  was a partnership or  a  joint  venture.21
          Instead, the scope of any duties the members owed each other is
principally  determined by the terms of the  1982  joint  venture
agreement.   We  assume  the  1982 agreement  is  the  applicable
agreement.  That is the agreement signed by Dr. McGuire,  and  no
one suggests any later joint venture agreement exists or applies.
          That  said, there seems to be little justification  for
distinguishing  between  a  partnership  and  a  long-term  joint
venture  like  Advances when determining the scope  of  fiduciary
duty  owed.  Advances was created primarily to construct the 4001
Laurel  Street building and to own and manage the portion of  the
building  (Condominium A) containing a surgery center that  would
generate long-term profits for the joint venturers. Advances is a
profit-sharing enterprise formed to facilitate not just a  single
transaction or project relatively brief in duration, but rather a
long-term,   and  potentially  lucrative,  business  arrangement.
Although  we  have indicated that fiduciary duties  owed  between
partners  may  often  be broader than those  owed  between  joint
venturers,22 we have been referred to no authority that would make
such a distinction relevant in this case.23
          It   also  does  not  matter  that,  unlike  the   1981
agreement,   the 1982 amended agreement did not explicitly  state
that  general  partnership law would  apply  to  the  extent  the
agreement  did  not provide otherwise.  The joint venture  was  a
form  of partnership; the only question is whether the agreements
terms   and  purposes  gave  rise  to  or  foreclosed  particular
purported duties of loyalty and care.
          Under Alaskas Uniform Partnership Act (UPA),24 the scope
of  duties  owed  between partners is largely determined  by  the
partnership agreement.25  The UPA also governs relations  between
and among partners [t]o the extent the partnership agreement does
not otherwise provide.26  According to AS 32.06.404, partners owe
each other the duties of loyalty and care.27  The duty of loyalty
requires  a  partner to refrain from competing in the conduct  of
the partnership business and to account for any property, profit,
or  benefit  derived by the partner from the appropriation  of  a
partnership opportunity.28  A partner must discharge this duty and
any other duties under the partnership agreement and exercise any
rights  in accordance with the obligation of good faith and  fair
dealing.29  According to AS 32.06.960, the partnership  agreement
may  not  completely  eliminate the  duty  of  loyalty,  but  may
identify specific types or categories of activities that  do  not
violate the duty of loyalty, if not manifestly unreasonable.30
          To  determine  the  scope of duties  owed  between  the
Advances  joint venturers, we must therefore first consider  what
duties  the  joint  venture  agreement explicitly  or  implicitly
imposed on the members.

               b.   The terms of the agreement
          The  parties disagree about the extent of any fiduciary
duty   owed  under  the  1982  joint  venture  agreement.    Four
provisions  in  that agreement, sections 2.04,  2.05,  5.04,  and
13.07, are particularly relevant.
          The  defendants  argue  that sections  2.05  and  13.07
demonstrate that the joint venturers specifically agreed to limit
          their fiduciary duties, as former AS 32.05.130 legally entitled
them to do.31  The defendants appear to reason that sections 2.05
and  13.07 entitled Dr. McGuire and HealthSouth to deal with  the
plaintiffs at arms length, unencumbered by any fiduciary duty, in
any  matter involving Alaska Surgery Center, Inc. after its  sale
in 1985.
          Section  2.05, in effect, permitted members to  compete
with  the  joint  venture and among themselves, and  states  that
nothing  shall  deprive  or otherwise affect  the  right  of  the
Partners  to  own, invest in, manage or operate  property  or  to
conduct  business  activities  which  are  competitive  with  the
business of the Partnership.
          Section 13.07 authorized the individual joint venturers
to enter into transactions with Advances, and provides:
          Transactions  Between the Partnership  and  a
          Partner.   Any  Partner  may  deal  with  the
          Partnership other than in his capacity  as  a
          member  of  such Partnership,  and  any  such
          transaction shall be considered as  occurring
          between the Partnership and one who is not  a
          Partner.   Any such transaction(s)  shall  be
          governed  by  such terms and  conditions  and
          shall  be  based  on  such  compensation  and
          commissions  as  may  be agreed  between  the
          Partner   so  dealing  with  the  Partnership
          acting through the Executive Committee.
          The  plaintiffs implicitly contend that  section  13.07
was  intended to permit a joint venturer to deal at  arms  length
with  Advances  when leasing office space in  the  Laurel  Street
facility.32  They also argue that nothing in section 2.05,  which
permits  members to compete with Advances and the other  members,
implies a complete waiver of all fiduciary duties.
          We   conclude  that  the  defendants  analysis  of  the
agreements limiting effect on fiduciary duty is incorrect.   They
correctly  contend  that  sections 2.05  and  13.07  allow  joint
venturers  to  compete  with Advances and conduct  business  with
Advances  as  if they were at arms length.  But those  provisions
did   not  expressly  or  implicitly  relieve  Dr.  McGuire   and
HealthSouth  of  every fiduciary obligation they might  otherwise
owe  with  respect to the ownership and management of  the  joint
ventures  Laurel  Street property.  Indeed,  to  the  extent  the
fiduciary  violations alleged by the plaintiffs  do  not  involve
either  competing with or dealing at arms length with  the  joint
venture, sections 2.05 and 13.07 do not apply.
          The  plaintiffs contend that section 5.04 of the  joint
venture  agreement confirms that the members of Advances  owed  a
fiduciary  duty  to act without fraud and deceit  and  with  full
disclosure  at  all  times.  They also argue  that  section  5.04
prohibited  the  joint venturers from doing anything  that  would
effectively prevent Advances from carrying on its business, which
they  assert was to lease a majority of the space at  the  Laurel
Street facility [for use] as a surgery center.
          Section   5.04,  in  effect,  prohibits  members   from
engaging  in  unconsented  activities detrimental  to  the  joint
          ventures best interests.  It states in part that a member cannot,
without  the consent of the Majority-in-Interest of the Partners,
do any act that would be detrimental to the best interests of the
Partnership  or  otherwise make it impossible  to  carry  on  the
business of the Partnership.33
          The  superior court implicitly determined that  section
2.04  defined the extent of Advancess purpose and, by  extension,
the  extent of any fiduciary duty owed under section  5.04.   The
superior  court concluded that, per section 2.04, the purpose  of
Advances  was  specifically limited to the  acquisition  of  real
property  and  the  development,  leasing,  sale,  operation  and
management  of  the real property.  The court seemingly  reasoned
that  the business of the joint venture was not leasing a surgery
center, but rather generally owning and managing real property.
          Section  2.04, which defines the purpose and  character
of the Advances business, provides that:
          [t]he  sole purpose of the Partnership  shall
          be  limited  to (i) the acquisition  of  real
          property   listed   in   Exhibit   A   hereof
          (Property) and all personal property used  in
          connection with the operation of the Property
          and   improvements  thereof;  and  (ii)   the
          development,  leasing,  sale,  operation  and
          management   of  the  Property,  improvements
          thereon, and said personal property  for  the
          production of income and profit.[34]
          In  short, section 2.04 states that the sole purpose of
the  joint  venture is to manage real property for the production
of income and profit.  Defendants point to no evidence permitting
a  finding  that there was no such purpose.  Given  this  express
purpose,  we conclude that section 5.04 imposed a fiduciary  duty
on  the  joint  venturers to avoid gravely  harming  the  income-
earning capacity of the joint venture.  That duty was potentially
relevant  here.   We consequently conclude the  agreements  terms
imposed  actionable  fiduciary duties  on  the  members,  without
regard to whether extrinsic evidence would permit defining  those
duties more broadly.
          The plaintiffs also argue that the superior court erred
by  limiting  [its]  review  to  the  terms  of  the  partnership
agreement.   They  contend  that  the  court  also  should   have
considered  extrinsic evidence and the circumstances  surrounding
the  formation  and conduct of the partnership.   The  plaintiffs
argue  that  the  court  should have considered  that:  (1)  when
Advances  was  formed, the joint venturers  were  all  practicing
physicians  who owned and operated Alaska Surgery  Center,  Inc.;
(2)  Advances  applied  for  the 1983 CON  together  with  Alaska
Surgery  Center,  Inc.; and (3) Advancess  primary  business  for
twenty  years was leasing out most of the Laurel Street  facility
for use as a surgery center.
          We agree with the plaintiffs that the text of the joint
venture agreement is not necessarily dispositive when determining
the  purpose of the joint venture.  As the plaintiffs  argue,  in
determining  the meaning of an agreement courts should  consider,
in  addition to its text, relevant extrinsic evidence,  including
          the subsequent conduct of the parties.35  Courts may consult
extrinsic evidence without first finding that an agreements words
are ambiguous.36
          We  conclude  that  the record contains  evidence  that
would  permit an inference that the purpose of the joint  venture
was  broader  than the superior court found from  the  agreements
text.   For example, the joint venture was formed by a  group  of
health  care professionals who then owned and operated the  Rhone
Circle surgery center.  After Advances acquired the Laurel Street
property, the joint venture and a new corporation jointly applied
to  DHSS for a CON to construct a new, apparently larger,  health
care  facility  on  Laurel Street into which the  Alaska  Surgery
Center  would be moved.  The joint venture received  the  surgery
center  lease  payments for at least twenty years.  And  although
the  surgery center itself was sold in 1985, it was sold when  no
statute permitted the surgery center to be relocated unless a new
CON  was  obtained  for the new location.  A  fact  finder  might
therefore  find  that even though the current  lease  expired  in
2005,  given  the relative difficulty of obtaining a CON, it  was
reasonable for the joint venture to expect that the Laurel Street
facility  would  continue to operate as a surgery  center  beyond
2005  and would continue to generate commensurate lease payments.
It  cannot be said as a matter of law that the joint venture  had
no  purpose  of receiving those payments after 2005 just  because
the  current  lease was to expire in 2005.  It could be  inferred
that  Advances was formed not merely to manage real  property  at
4001  Laurel  Street,  but  with  the  specific  purpose  of  (1)
providing space to be leased for long-term use as the new  (post-
Rhone   Circle)  ambulatory  surgical  center  and  (2)   sharing
substantial  profits from that use.  The evidence  suggests  that
the joint venture had a purpose of leasing real estate for use as
a  surgery  center,  or  at least owning a  facility  that  would
generate the sort of revenue to be earned by leasing to a surgery
center.
          Therefore,  even  given a narrow reading  of  what  the
agreement said about the purpose of Advances, it cannot  be  said
as  a  matter of law that the joint venture had no purpose giving
rise  to  a fiduciary duty relevant here.  And extrinsic evidence
that  the  purposes  may have specifically included  leasing  the
space  for use as a surgery center creates a genuine fact dispute
that forecloses complete summary judgment on the duty issue.   It
will  be  necessary  on  remand  to consider  extrinsic  evidence
relevant  to  the  joint ventures purposes. Those  purposes  will
determine what the joint venturer defendants could permissibly do
(such as competing, as expressly authorized by section 2.05)  and
could  not do (such as any act that was detrimental to the  joint
venture or that made it impossible for the joint venture to carry
out its business, as expressly prohibited by section 5.04).
          2.   The alleged breaches of fiduciary duties
               a.   Relocation of the surgery center
          The  plaintiffs argue that the superior court erred  in
granting  summary  judgment on the issue whether  the  two  joint
venturer   defendants  breached  their  fiduciary  duties.    The
plaintiffs contend in part that there are triable issues  whether
          those defendants breached their fiduciary duties by destroying
[the  joint ventures] right to continue leasing the Laurel Street
facility as a competing surgery center.
          Whether  there  was a breach depends in  part  on  what
duties  were  owed. Given what we said above about those  duties,
there  is  a  genuine issue of material fact  about  whether  Dr.
McGuire and HealthSouth breached their fiduciary duties when they
moved  the  surgery center from Laurel Street to Lake  Otis.   If
Advances had a purpose of maximizing the rent at Laurel Street or
a  more  specific purpose of receiving rent from a surgery center
into  the  indefinite  future, there is a genuine  dispute  about
whether  the  conduct  of the joint venturer defendants  breached
their fiduciary duties by violating section 5.04.
          We  are unpersuaded that either section 2.05 or section
13.07  has  any  application to the relocation dispute.   Section
2.05  would  have permitted the defendants to open  a  brand  new
surgery  center in competition with the existing surgery  center;
doing  so  therefore could not, by itself, have been a breach  of
fiduciary   duty.   But  the  relocation  was  not  an   act   of
competition,  and indeed effectively prevented the joint  venture
from  competing  with the relocated surgery  center.   Relocation
prevented the joint venture from replacing the surgery center  at
the  Laurel  Street  facility, because AS 18.07.031(c),  even  as
amended  in 2004, prohibited Advances from establishing a surgery
center  there unless it either obtained a new CON or  spent  less
than $1 million on the replacement center.37
          The evidence permits an inference that neither of those
options  was  feasible.  There was evidence  the  Alaska  Surgery
Center operated six surgical suites at the Laurel Street facility
before  it  relocated.  And there was evidence that although  the
joint  venture might be able to re-equip and reopen  a  two-suite
surgery  center for under $1 million, there was no way that  [it]
could  get six rooms, even buying used equipment . . .  .   There
was  also  evidence  suggesting that DHSS was unlikely  to  issue
Advances a CON to reestablish a surgery center at Laurel  Street.
Dr.  Nathanson stated in a 2006 affidavit that Advances was being
told that it is not likely another CON will be issued in the near
future for an ambulatory surgery center in the Anchorage area.
          It  is  also inferable that the defendants knew  before
the relocation that it would be difficult to obtain a new CON for
a  surgery  center in Anchorage: Dr. McGuire recommended  in  the
late 1990s that HealthSouth pursue legislative changes that would
enable the Alaska Surgery Center to relocate without being issued
a  new  CON.   Dr.  McGuire testified in his deposition  that  he
believed  getting  a CON for the construction of  a  new  surgery
center  would be difficult and that legislative action  presented
HealthSouths best and most likely successful outcome.
          We  therefore conclude that there is a triable issue as
to  whether Dr. McGuire and HealthSouth breached their  fiduciary
duties by relocating Alaska Surgery Center in 2001.
          There  may  also be a triable issue about  whether  the
joint  venturers  consented  to the relocation.   The  defendants
argue  that  the plaintiffs expressed agreement with HealthSouths
plan  to  seek legislation that would exempt it from obtaining  a
          CON before moving the surgery center.  We interpret section 5.04
to  mean  that, if a majority-in-interest of the joint  venturers
consented to relocating the Alaska Surgery Center, the relocation
would have breached no fiduciary duty.38
          The   superior  court  concluded  that  the  plaintiffs
admitted that they approved the move.
          The  plaintiffs amended complaint stated that they  did
not object to defendants plans to build a new ambulatory surgical
facility  and to seek changes in the CON law.  But that admission
is   inferably  qualified  by  the  amended  complaints   related
allegation   that  the  plaintiffs  then  understood   that   the
defendants  were seeking to repeal the CON law or raise  the  CON
threshold.   Neither  of those changes would have  prevented  the
joint  venture  from  recreating  a  surgery  center  after   the
relocation  proposed by the defendants.  The plaintiffs  did  not
admit that they had consented, after AS 18.07.031 was amended  in
2000,  to  a  relocation that would effectively prevent  Advances
from  using  or leasing the Laurel Street property as  a  surgery
center after the proposed relocation.
          The  plaintiffs argue that consent must be informed  to
be meaningful in these contexts.  They cite in support the Oregon
Supreme Courts decision in Starr v. International Realty,  Ltd.39
In that case, partners in a real estate venture sued their fellow
partner to account for commissions he had received by acting as a
realtor  without  their  consent.40   The  Oregon  Supreme  Court
concluded  that  the consent required of the other  partners  was
informed  consent  with knowledge of the facts necessary  to  the
giving of an intelligent consent.41
          We  adopted the Starr consent standard in Wirum & Cash,
Architects  v.  Cash.42   We held there  that  [a]  partner  only
overcomes  a  breach of fiduciary duty if there  is  a  full  and
complete  disclosure to the other partner and  if  the  breaching
partner  secures the other partners approval and  consent.43   We
also  concluded  that the consent must be informed  consent  with
knowledge  of  facts necessary to an intelligent choice.44   That
standard applies here.
          We   accordingly  conclude  that  a  genuine  issue  of
material fact remains as to whether a majority-in-interest of the
joint  venture  consented  to the relocation  of  Alaska  Surgery
Center.   It  cannot  be said as a matter  of  law  that  consent
expressed before the plaintiffs knew of the revisions to  HB  297
was informed.
               b.   Misrepresentation
          The  plaintiffs argue that Dr. McGuire and  HealthSouth
also breached their fiduciary duties by making misrepresentations
to  David  Pierce, the CON coordinator for DHSS, about the  joint
ventures  intentions.   The  superior  court  appears   to   have
dismissed the misrepresentation, deception, and conversion claims
because  it had concluded plaintiffs had no property interest  in
the CON or claim arising out of the transfer of the CON.  What we
say  elsewhere in this opinion in subpart a above and  subpart  c
below  about the relocation and partnership property theories  of
fiduciary  duty breach also requires remand for consideration  of
the misrepresentation theory.
          Soon after HB 297 became law, Pierce sent an e-mail  to
a  HealthSouth representative congratulating HealthSouth  on  the
bills passage and instructing HealthSouth on how to expedite  the
process   for  receiving  a  health  care  facility  construction
license.   Pierce asked HealthSouth to submit a letter of  intent
provid[ing] a list of owners of the existing facility  and  their
signatures showing that they agree to close the existing facility
once the new facility is built.
          Louise  Bjornstad  responded  for  HealthSouth  with  a
letter  of  intent addressing Pierces questions regarding  Alaska
Surgery Centers relocation.  Bjornstad did not list the names  of
the  Advances  joint  venturers or provide  their  signatures  as
Pierce  had  requested.  Although HealthSouth  prepared  a  draft
signature  page for the Advances joint venturers,  the  page  was
never  signed.   Dr. Beal stated in his deposition  that  he  had
never seen the page before.
          Bjornstad  stated  in her letter to Pierce  that  [t]he
Laurel  Street  Building will [not be]  leased  or  sold  to  any
individual  or  group intending to operate an ambulatory  surgery
center.   She  further  addressed Pierces request  regarding  the
future  business of the Laurel Street facility in  the  following
way:
          [AS  18.07.031(c)] clearly does  not  require
          that the Laurel Street Building remain vacant
          after    the    Surgery   Center   relocates.
          Therefore,  we  do  not  understand  how  the
          purpose of the statute would be served by the
          agreement by the owners of the Laurel  Street
          Building  that the[y] will close the existing
          facility.   Nothing in AS 18.07.031 prohibits
          new  uses of the Laurel Street Building  that
          do   not  require  a  certificate  of   need,
          including health care related uses.
          
          Dr.  McGuire  then  sent an email to Pierce  expressing
frustration  about  the  CON  determination  process.   Seemingly
referring  to Pierces recent request for a letter of intent  from
HealthSouth,  Dr. McGuire remarked, [w]hy you would suppose  that
you  had the authority to demand that the exi[]sting facility  be
CLOSED  or  that  the  owners of the  facil[i]ty  should  sign  a
document  to  that  effect  is  beyond  me!!   You  have   caused
expenditures  for  attorneys fees that  should  never  have  been
required.   Dr.  McGuire further commented  that  Pierces  recent
demands  of HealthSouth were vindictive and prejudicial in  light
of  clear legislative intent that replacement projects be allowed
to proceed without interference from [Pierces] department.
          The  plaintiffs argue that HealthSouth and Dr.  McGuire
breached their fiduciary duty when they resisted providing Pierce
the information he requested regarding the intentions of Advances
and  misrepresented that the joint venturers intended to use  the
Laurel  Street  building in a way that would not require  a  CON.
The  plaintiffs  also  contend that Dr. McGuire  and  HealthSouth
breached their fiduciary duties by concealing: (1) the effect  of
the  2000  amendment, (2) their role in the legislative  process,
and  (3)  the  misrepresentations they made to Pierce  after  the
legislation passed.
          The  defendants  respond that there was  nothing  wrong
with  HealthSouths representations to Pierce.   But  we  conclude
that a fact finder could disagree.  There appears to be a factual
dispute about whether the joint venture had no interest in  using
the Laurel Street building for a surgery center, a use that would
require  a CON, and thus either the existing 1983 CON  or  a  new
CON.   Bjornstads statement was therefore potentially  incorrect.
The  defendants  communications with Pierce permit  an  inference
that  they deliberately avoided involving the plaintiffs in their
CON   approval  process  and  actively  discouraged   DHSS   from
contacting the other members of the joint venture.  Based on  the
plaintiffs  present  objections, had Pierce contacted  the  other
members, it is possible they would have stated that they intended
to  continue  renting  or even intended to  begin  operating  the
Laurel  Street facility as a surgery center themselves and  would
have objected to the relocation proposed by Health South.  It  is
also conceivable that news of such an intent or such an objection
would have affected Pierces determination.  That Pierce asked for
the  signatures of the Advances joint venturers is some  evidence
he  believed  their  consent was relevant  to  the  process.   We
therefore  conclude that a genuine issue of material fact  exists
as to whether Dr. McGuire and HealthSouths conduct amounted to  a
breach of their fiduciary duties.
          The  defendants  also contend, but very  tersely,  that
Bjornstads  statements  were constitutionally  and  legislatively
protected under both the First Amendment and the Noerr-Pennington
doctrine.45   The  plaintiffs  argue that  Noerr-Pennington  only
insulates  an  individuals petitioning activity  from  statutory-
based liability and does not extend to immunity to the breach  of
contract and breach of fiduciary duty claims in this case.
          The Noerr-Pennington doctrine evolved out of two United
States Supreme Court cases: Eastern R.R. Presidents Conference v.
Noerr Motor Freight, Inc.46 and United Mine Workers v. Pennington.47
The  Court  held in Noerr that the Sherman Act does not  prohibit
two  or  more persons from associating together in an attempt  to
persuade  the  legislature or the executive  to  take  particular
action with respect to a law that would produce a restraint or  a
monopoly.48   At  least one court has expanded  the  doctrine  to
insulate  First Amendment petitioning activity from any cause  of
action other than defamation.49
          The  superior  court did not rule that  the  defendants
communications with Pierce were protected by the petition clause.
There  may  be  unresolved  factual  disputes  material  to   any
invocation of the petition clause regarding those communications.
There may be questions about whether any immunity has been lost.50
There  may also be significant legal questions about whether  the
right  to  petition  is  consistent with imposing  liability  for
concealing    the   petitioning   activity   and   any    alleged
misrepresentations from
 a person to whom a fiduciary duty is owed.  And the scope of the
Noerr-Pennington  doctrine is in substantial legal  dispute.   We
therefore decline to resolve this unripe and under-briefed issue.
               c.   Misuse of partnership property
          The  plaintiffs argue that Dr. McGuire and  HealthSouth
breached  fiduciary duties by using partnership property  without
consent.   They allege that Advances acquired a valuable property
interest  in  the  1983  CON that the  defendants  then  used  to
relocate Alaska Surgery Center.
          The superior courts summary judgment order rejected all
arguments premised on an assertion the CON was itself property or
conveyed  any property right.  The court concluded that  the  CON
was  issued  specifically for constructing,  not  operating,  the
Laurel  Street facility.  It accordingly concluded that  the  CON
had  ceased  being a valid property interest when it  expired  on
February 15, 1985.
          Arguing that the superior court erred in reaching  this
conclusion, plaintiffs contend that the CON did not expire  post-
construction because it conferred the right to  use the  facility
as  a  surgery  center  indefinitely, as long  as  the  recipient
complied  with  the CONs terms.  A contrary interpretation,  they
argue,  (1)  would  render  meaningless  the  provisions  of   AS
18.07.081  that provide guidelines for when a CON may be  revoked
due to the sponsors non-compliance with its terms,51 and (2) would
be  inconsistent with the 1976 legislative mandate requiring  all
health  care facilities in existence or under construction before
July 1, 1976 to be issued a CON.52
          The  defendants respond that the CON is not a  property
right  but  rather a means of tracking medical services available
within  a  community.  They argue that, even  if  the  CON  is  a
property right, the right attaches, not to a building, but to the
health care business that operates within it.  They contend  that
the  CON  in this case was always owned by Alaska Surgery Center,
Inc.  and that any property right created by the issuance of  the
CON belonged to Alaska Surgery Center, Inc., not Advances.
          These arguments raise these issues: (1) whether issuing
a  CON vests its sponsor with a property right that continues  to
exist  post-construction; (2) whether the joint venture  had  any
property  interest in the operating rights granted  by  the  1983
CON; and (3) whether any such property interest still belonged to
Advances when the Alaska Surgery Center relocated in 2001.  These
issues  are  presented even if the CON itself is deemed  to  have
expired when construction was completed.
          Per  AS 32.06.204, property acquired in the name of the
partnership is partnership property.  Property is defined  in  AS
32.06.995(13)  to  include real, personal,  mixed,  tangible,  or
intangible  property,  or  an  interest  in  property.  (Emphasis
added.)   Other  jurisdictions  have  considered  whether  a  CON
confers  on  its  sponsor  a property interest  for  due  process
purposes and have held that it does.  The Iowa Supreme Court  has
acknowledged  that the actual issuance of a certificate  of  need
conveys  a  property interest on the holder of the certificate.53
The  Michigan Court of Appeals similarly held that, once granted,
a  CON  conveys a property interest on its holder.54  That  court
specifically  recognized that a certificate of  need  for  future
hospital  beds is a very valuable property interest, often  worth
millions of dollars.55
          At  least  one  jurisdiction has held  that  the  right
conferred by a CON is limited to the period of construction.  The
Washington  Court of Appeals held in Watkins v. Restorative  Care
Center  that a CON did not entitle the recipient nursing home  to
continuously maintain 250 beds at the facility.56  That court held
that the CON merely conferred the right to expand the Center into
a 250-bed nursing home facility, a right which expired . . . when
construction of the Centers new building was completed.57
          We  have  recognized that the public need  for  medical
facilities  makes  it  essential that DHSS be  able  to  regulate
health  care  facilities  by  way  of  the  CON  program.58   The
legislature   adopted  the  CON  program  to  avoid   unnecessary
duplication  of  health care resources in  any  one  geographical
area.59  We have recognized that granting a CON creates a type of
health care monopoly in the recipient medical facility.60   A CON
recipient is authorized to perform a category of health  services
for  an  indefinite  period  of time as  long  as  the  recipient
complies with the terms of the CON.  Per AS 18.07.041, subsequent
CONs  authorizing the operation of competing facilities will only
be issued if DHSS determines that the availability and quality of
existing  health  care  resources or the accessibility  to  those
resources  is less than the current or projected requirement  for
health  services required to maintain the good health of citizens
of this state.
          Given the difficulty of obtaining a CON, any enterprise
to  which one is issued possesses a potentially valuable asset.61
The  authority a CON confers is valuable because it  assumes  the
state   will  comply  with  the  statutory  scheme  and  restrict
competition.   A  CON confers the valuable right of  complete  or
partial  exclusivity.  It gives recipients a  de  facto  monopoly
until  DHSS  decides to issue a CON to a competitor  or  until  a
competitor  can  construct a facility at a  cost  that  does  not
require it to obtain a CON.  The valuable right extends past  the
period  of  construction and continues as long as  the  recipient
complies with the terms of the CON.
          We  also  think  it  significant that,  when  it  first
enacted the CON program in 1976, the legislature required all pre-
existing   health  care  facilities,  whether  they  were   under
construction  or  not,  to apply for a CON.62   This  requirement
implies  that  a  CON  has  importance  that  extends  past   the
completion  of  construction.  It is  also  significant  that  AS
18.07.081 provides that a CON can be revoked if the sponsor fails
to provide the services authorized.63  This provision suggests the
CON  has some continuing effect even after construction has  been
completed.  If, as the superior court concluded, the issuance  of
the  CON  were  unnecessary  for  a  facilitys  operation,  post-
construction  revocation of the CON would have no effect  on  the
facilitys continued ability to operate and therefore no deterrent
or   remedial   effect.    We  do  not   think   this   statutory
interpretation is consistent with legislative intent.
          We  accordingly hold that the issuance of a CON creates
a  valuable  property  interest in the  recipient  and  that  the
exclusive  authority created by the CON continues to exist  post-
construction.   The  issuance of the CON  in  this  case  created
          valuable rights that did not expire just because the construction
conditions  were  satisfied.  To the extent  the  superior  court
apparently  reasoned that no such rights survived the  completion
of construction, we disagree.
          We additionally hold that it was error to conclude as a
matter  of  law  that  the  CON expired  on  February  15,  1985.
Deposition  testimony of David Pierce, quoted in  the  plaintiffs
superior  court  motion papers, might permit a  finding  that  he
understood  that  if HealthSouth (or AlternaCare)  had  abandoned
Condominium  A  before  the enactment  of  the  2000  amendments,
Advances  could have operated a surgery center at  Laurel  Street
without  obtaining  a  new  CON.  Pierces  testimony  permits  an
inference  that  DHSS itself did not consider this  CON  to  have
expired.  It implies that it was DHSSs view that the issuance  of
the  CON  for the Laurel Street facility gave the owners of  that
facility  some continuing rights even if the designated  operator
quit  or  went out of business.  The statutes then in effect  did
not  expressly  provide that a CON expires when  construction  is
completed,  and  permit  a conclusion to  the  contrary.64   More
importantly,  even  if the CON itself expired  when  construction
ended,  the operating authority implicit in the issuance  of  the
CON  must  be distinguished at this stage of this case  from  the
constructional authority expressly granted by the CON.  There  is
no  basis for thinking that this operating authority expired when
construction  was completed.  After all, the CON  statute  has  a
purpose of preventing unwarranted competition, i.e., operation of
more facilities than are needed.
          We  next  consider whether Advances had  some  property
interest  in  the operating rights granted by the 1983  CON,  and
whether any such property interest still belonged to Advances  by
the time the Alaska Surgery Center relocated in 2001.
          Advances  and  Alaska  Surgery  Center,  Inc.   applied
together  for  the 1983 CON that authorized the construction  and
operation of the Laurel Street facility.  The defendants  do  not
dispute  that  the 1983 CON carried both Advance[s]  and  [Alaska
Surgery  Center, Inc.s] names.  The CON stated that it  has  been
determined   that   the  Surgery  Center,  Inc.   had   met   the
requirements.   The  CON  itself named both  applicants,  without
identifying them as recipients or applicants.
          When  the  CON was issued in 1983, the same  individual
medical  professionals owned both Advances (as  joint  venturers)
and  Surgery  Center, Inc. (as shareholders).  Those  individuals
sold their interest in the corporation, the entity operating  the
surgery  center,  in  late  1984 or early  1985  to  AlternaCare;
HealthSouth  ultimately acquired their interest.   The  documents
selling  the  center  to  AlternaCare did  not  mention  sale  or
transfer  of  the  CON  to AlternaCare, although  they  otherwise
listed everything AlternaCare was receiving, including the actual
license to operate the surgery center and the equipment needed to
run the center.
          Nor  did  the  sale of the shares and  the  license  to
operate  include Condominium A, the specific location  for  which
the  CON  was  apparently sought and issued.  When  the  sale  to
AlternaCare  took place, no statute authorized  relocation  of  a
          facility that required a CON.  The relocation statute was not
enacted  until  2000,  some fifteen years later.   We  think  the
record  demonstrates that there is a genuine issue about  whether
the  issuance  of  the CON in 1983 gave Advances some  continuing
property  interest  in  the continued operation  of  the  surgery
center  at Laurel Street even after the 1985 sale to AlternaCare.
If  Advances retained such an interest, any unconsented  acts  of
the  joint  venturer defendants in moving the  center  away  from
Laurel  Street  potentially  interfered  with  or  misused  joint
venture property rights.  It was therefore error to grant summary
judgment for defendants on plaintiffs misuse-of-property claim.
          We  do not mean to imply that there is no dispute about
these  propositions.  Even though the stock sale  agreement  does
not  explicitly mention that the authority granted under the 1983
CON   was   being   transferred   to  AlternaCare   (HealthSouths
predecessor-in-interest), it is arguable  that  the  shareholders
intended to relinquish any inchoate authority granted them by the
issuance  of  the  1983  CON to continue to  operate  the  Alaska
Surgery  Center.  The sales agreement does not seem to explicitly
retain  in  the  shareholders  any  reversionary  right  in  that
operation.  But for purposes of this appeal, it is enough to note
that  there are unresolved factual disputes that preclude summary
judgment on plaintiffs misuse-of-property claim.
               d.   The plaintiffs other arguments
          The plaintiffs also argue that there are triable issues
about   whether  Dr.  McGuire  and  HealthSouth  breached   their
fiduciary  duties  in other ways.  The plaintiffs  allege  fraud,
deceit,   failure  to  disclose,  concealment,  bad  faith,   and
profiting  from  a  prohibited  transaction  connected  with  the
conduct  of  the partnership.  Because the plaintiffs  give  only
cursory  treatment to many of these claims, it is unclear whether
they  add  anything  to plaintiffs fiduciary breach  claim.   But
because  we  are  reversing and remanding as to that  claim,  the
plaintiffs  may  also pursue these subsidiary claims  insofar  as
they relate to the breach of fiduciary duty claim.
          3.   Liability of the Other Defendants
          The plaintiffs argue that there is substantial evidence
in  the  record from which to infer that the remaining defendants
Bjornstad,  Alaska Surgery Center, Alaska Surgery  Center,  Ltd.,
and  Lake  Otis  Professional, LLC  were liable  for  aiding  and
abetting  a  breach  of  fiduciary duty  because  they  knowingly
assisted  the  joint  venturer  defendants  in  breaching   their
fiduciary  duties.  The plaintiffs cite Wirum & Cash,  Architects
v.  Cash  as  standing  for the proposition  that  a  person  who
knowingly assists someone in breaching a fiduciary duty is liable
for the harm caused.65
          We assume for discussions sake that a non-fiduciary may
be  liable for aiding or abetting a breach of fiduciary duty.  We
have  stated  that,  under subsection 876(b) of  the  Restatement
(Second) of Torts, aiding and abetting liability occurs when  the
actor knows that the others conduct constitutes a breach of  duty
and gives substantial assistance or encouragement to the other.66
          But  plaintiffs have waived this argument.  The amended
complaint  did  not  claim aiding and abetting fiduciary  breach.
          Nor did the plaintiffs raise their aiding-and-abetting theory in
the superior court.
          Moreover,    the   plaintiffs   produced    no    facts
demonstrating that defendants Alaska Surgery Center, Inc., Alaska
Surgery  Center,  Ltd.,  and  Lake Otis  Professional,  LLC  gave
substantial assistance or encouragement in any way that aided Dr.
McGuire and HealthSouths alleged breaches.
          We  are also unpersuaded by the plaintiffs argument  as
to  Bjornstads  liability.  As a general  principle  an  employee
cannot  be  held liable for the breach of a contract between  the
employer  and another party.67  An employee likewise may  not  be
held  liable  for his or her employers breach of  fiduciary  duty
with  respect  to  a third party.  Although an employee  such  as
Bjornstad  may  be held liable for damage caused by independently
tortious  or  malicious acts,68 there is no claim on  appeal  she
engaged in such acts.
          We accordingly hold that the superior court did not err
in  granting  complete  summary judgment  for  Bjornstad,  Alaska
Surgery Center, Inc., Alaska Surgery Center, Ltd., and Lake  Otis
Professional, LLC on all claims.
          4.   Whether  it was error to find that there  were  no
               damages
               
          The  superior court dismissed most of the claims partly
because  it concluded that there were no damages.  It appears  to
have  concluded  that the only possible harm  posed  to  Advances
originated  from  the  language in the 2000  statutory  amendment
providing that, notwithstanding the expenditure threshold in  (a)
of  this  section, a person may not use the site from  which  the
health  care facility relocated for another health care  facility
unless  authorized  under a certificate of  need  issued  by  the
department.69  Because the legislature deleted this language when
it  amended  subsection .031(c) in 2004, the superior  court  may
have  reasoned that the joint venture was thereafter in the  same
position  it  would  have been in before enactment  of  the  2000
amendment.70  The court found that HealthSouth continued  to  pay
the rent on the Laurel Street facility until its lease expired in
2005 and that the joint venture was thereafter free to do what it
wanted with the property.
          The plaintiffs argue that they suffered damages because
Advances  is  no  longer  able to lease  out  the  Laurel  Street
facility  as a surgery center or sell it to someone intending  to
operate  it  as  a surgery center.  They contend that  this  lost
ability has substantially reduced the joint ventures income  from
the  property  because Advances could otherwise have  leased  the
building at above-market rates.
          The   defendants   respond  that  the  joint   ventures
inability  to use the Laurel Street facility as a surgery  center
has  nothing  to  do  with  [HealthSouth]  and  Dr.  McGuire  and
everything to do with the business decision [the plaintiffs] made
to  cash out by selling the surgery center in 1985.  They contend
that  the  Laurel  Street  facility  has  remained  vacant  since
Advances  regained possession in 2005 because it  will  now  cost
more  than  the  CON threshold limit to start up another  surgery
          center in the vacated space.  Defendants also note that the lease
expired  in  2005  and that all lease payments were  made.   They
therefore  contend  that Advances suffered no  damages  and  that
Advances  is  in  the  same  position  it  would  have  been  had
HealthSouth simply shut down the facility in 2005 or waited until
2005 to relocate.
          We  conclude  that there is a genuine factual  question
about  whether Advances has been damaged.  The 2004 amendment  to
AS  18.07.031(c)  does  not establish as a  matter  of  law  that
Advances  was not damaged.  Even as amended in 2004, the  statute
did  not  allow Advances to construct a surgery center at  Laurel
Street without obtaining a new CON unless the cost would not have
exceeded  $1  million.  The evidence permits  an  inference  that
neither  alternative  was  feasible.   Moreover,  the  defendants
appear  to  concede that Advances is no longer able  to  house  a
surgical center in the Laurel Street facility.
          We concluded above that there is a material question of
fact  about whether the joint venturer defendants breached  their
fiduciary duties by relocating the Alaska Surgery Center from the
Laurel  Street facility after AS 18.07.031 was amended  in  2000.
We similarly hold that there is a triable issue about whether the
plaintiffs were damaged as a result of the relocation.
     C.   Attorneys Fees

          The  plaintiffs argue that the superior court erred  in
awarding the defendants Civil Rule 68 and Civil Rule 82 attorneys
fees.
          When  the plaintiffs filed their original complaint  in
April  2003,  they  were represented by the law  firm  of  Landye
Bennett  Blumstein  LLP (LBB).  In October  2003  the  defendants
moved  to disqualify LBB from representing the plaintiffs because
it had drafted the joint venture agreement for Advances, provided
guidance to Defendant McGuire about a CONs legal characteristics,
and  advised  Advances about the dispute between  Drs.  Beal  and
McGuire.  The superior court granted the disqualification  motion
on  November  13, 2003, concluding that LBB had  engaged  in  the
prohibited conduct of both representing and bringing suit against
a client.
          Before  LBB  was disqualified, defendants  HealthSouth,
Bjornstad,  Alaska Surgery Center, Inc., Alaska  Surgery  Center,
Ltd.,  and Lake Otis Professional Center, Inc. each made an offer
of  judgment  to each plaintiff.  Dr. McGuire made  an  offer  of
judgment to each plaintiff except Dr. Gills.  Most of the  offers
were  made  in  June 2003, about two months after the  plaintiffs
filed their first complaint.  Each offer provided that:
          Defendant . . . , pursuant to Alaska R.  Civ.
          P.  68  and  AS 09.30.065, hereby  offers  to
          allow entry of judgment for plaintiff .  .  .
          in this action for $1.00, including interest,
          costs  and attorneys fees.  This is an  offer
          of compromise only and is not to be construed
          as an admission.
          
No plaintiff accepted these offers.
          After  granting  complete  summary  judgment  for   the
defendants, the superior court awarded them attorneys fees  under
both  Rule  68 and Rule 82.  Under Rule 82, it awarded defendants
full  reasonable attorneys fees that the defendants incurred from
the commencement of the litigation until LBB was disqualified  on
November 13, 2003. Under Rule 68, the court also determined  that
each  plaintiff, with one exception, was liable for  seventy-five
percent  of  the  full reasonable attorneys fees  each  defendant
incurred after November 13, 2003.71
          1.   The awards to HealthSouth and Dr. McGuire
          Because  we have reversed the grant of complete summary
judgment  for defendants Dr. McGuire and HealthSouth and remanded
for further proceedings as to them, they are no longer prevailing
parties.   We  accordingly  vacate their  Rule  68  and  Rule  82
attorneys fees awards.
          2.   Whether  it  was error to award both Rule  68  and
               Rule 82 fees
          The  plaintiffs argue that the superior court erred  by
awarding attorneys fees under both Rule 68 and Rule 82.
          Alaska  Statute 09.30.065, which codifies when Rule  68
awards  may  be  granted,  states that  [a]  party  who  receives
attorney  fees  under this section may not also receive  attorney
fees under the Alaska Rules of Civil Procedure.  A party may  not
receive  awards  under both Rule 68 and Rule  82  even  if  those
awards correspond to different time periods within the same case.72
          Because it was error to award the defendants fees under
both  Rule  68 and Rule 82 in the same case, we vacate  the  fees
awards  to the prevailing party defendants and remand for further
proceedings.73
          3.   Whether the Rule 68 offers of judgment were valid
          The plaintiffs argue that we should reverse the Rule 68
awards because the offers of judgment were invalid.  They contend
in  part  that  the offers were unreasonable in both  timing  and
amount  because the defendants made one dollar offers of judgment
thirty  days after the litigation started as a tactical  move  to
benefit  from  the 75% clause in the rule and the statute.   They
also  argue  that the offers did not refer to resolution  of  the
counterclaims brought by HealthSouth and Dr. McGuire and thus did
not clearly indicate that all claims between the parties would be
resolved  if  the  offer were accepted.   The defendants  respond
that the offers explicitly offered to allow entry of judgment for
plaintiff  and  therefore clearly indicated that,  if  they  were
accepted, all claims would be resolved in the plaintiffs favor.
          Rule  68  provides  for attorneys fees  awards  when  a
prevailing  litigant has offered to allow judgment to be  entered
in  complete  satisfaction of the claim.74  If the case  involves
multiple defendants and the judgment finally rendered is at least
ten  percent  less  favorable to the offeree than  the  offer  of
judgment, the prevailing litigant is entitled to Rule 68  fees.75
A  prevailing party serving a successful offer of judgment within
sixty days after the date set for initial Rule 26 disclosures  is
entitled to recover seventy-five percent of his or her reasonable
actual attorneys fees.76
          Other  courts  have held that to obtain the  protection
          and benefit of enhanced attorneys fees, the offer of judgment
must  be  made in good faith with the goal of settling  the  case
rather  than  obtaining a larger attorneys  fee  award.77   Those
courts  have suggested that, as a general rule, one dollar offers
of judgment do not satisfy that good-faith test.78
          Although we have yet to adopt a similar good-faith test
for  offers of judgment, we suggested in Lowell v. Hayes  that  a
Rule  68  offer  of  judgment may be  invalid  if  the  offer  is
disingenuously  low.79   We there observed  that  in  Beattie  v.
Thomas, the Nevada Supreme Court had identified four factors  for
trial courts to consider in determining the validity of offers of
judgment.80   One  of  those factors was whether  the  offer  was
reasonable and in good faith in both its timing and amount.81  But
because  the  plaintiff in Lowell did not  claim  the  defendants
offer  was unreasonable or made in bad faith, we did not need  to
reach the issue in that case.82
          The  superior court here declined to apply  the  Lowell
dicta, concluding that the language of Rule 68 and A.S. 09.30.065
and  the  purposes of the rule and statute is best  served  by  a
bright  line  rule rather than a determination under the  Beattie
factors.
          Even  though  a  purpose of Rule  68  is  to  encourage
settlement  and avoid protracted litigation, offers  of  judgment
made without any chance or expectation of eliciting acceptance or
negotiation do not accomplish the purposes behind the rule.   The
offers of judgment in this case were for one dollar.  Most of the
defendants served their individual offers of judgment before they
asserted  their counterclaims.83  Their offers were nothing  more
than  tactical  demands that plaintiffs dismiss their  claims  to
avoid  exposure to Rule 68 fees awards.  The amount  offered  was
effectively  zero  in  what appears to be a  good  faith  dispute
involving  potentially substantial damages.  In  the  context  of
this  case, these offers could not be considered valid offers  of
settlement   or  compromise,  or  valid  attempts  to   encourage
negotiation.   They  do  not satisfy the Beattie  factors.84   We
conclude that they were not valid Rule 68 offers of judgment, and
therefore reverse the Rule 68 fees awards.
          We  have held that Rule 68 implicitly requires that  an
offer  of judgment include all claims between the parties and  be
capable  of  completely resolving the case  by  way  of  a  final
judgment  if accepted.85  The plaintiffs also argue that  because
the  offers  did  not explicitly indicate that the  counterclaims
would  be  resolved if the offers were accepted,  the  offers  of
judgment were not comprehensive.86  We do not need to reach  this
argument,  having decided that the offers were invalid for  other
reasons.
          Because the offers of judgment were invalid, we reverse
the Rule 68 attorneys fees awards.
          4.   Whether  it  was error to award enhanced  Rule  82
               attorneys  fees  for  the period  before  LBB  was
               disqualified
               
          The plaintiffs allege that it was unreasonable to award
all defendants full reasonable attorneys fees incurred before LBB
          was disqualified.  The defendants respond that the plaintiffs
persistent attempt to use the joint ventures counsel to  sue  the
defendants was per se vexatious, unreasonable, in bad  faith  and
utterly  devoid  of  merit, and therefore  mandated  an  enhanced
attorney fee award.  (Internal quotations omitted.)



          An  award of full attorneys fees under Rule 82  can  be
justified  by  the losing partys bad faith defense  or  vexatious
conduct.87   The  reasons for awarding full attorneys  fees  must
generally be explained by the superior court.88
          In holding the plaintiffs liable for the full attorneys
fees incurred by the defendants until LBBs disqualification,  the
superior   court   reasoned  that  the   plaintiffs   had   acted
unreasonably and in bad faith by retaining LBB despite  promising
not  to  do so and by vigorously opposing Dr. McGuires motion  to
disqualify LBB.  The court additionally found that the plaintiffs
had  sought  to use joint venture funds to pay for LBBs  services
and  that  virtually all of the litigation up until November  13,
2003 concerned whether LBBs representation of the plaintiffs  was
proper.
          The  plaintiffs  argue that they  should  not  be  held
responsible for their attorneys misconduct, especially given that
there has been no showing that their attorneys conduct tilted the
playing field against [the] defendants.
          It  does  not  matter whether the plaintiffs  knew  LBB
could  not  represent them or whether LBBs representation  harmed
the  joint  venturer defendants.  The record permits a conclusion
that  LBBs improper representation required all of the defendants
to  incur  some unnecessary legal fees.  Awarding full reasonable
attorneys fees until LBBs disqualification was therefore  not  an
abuse of discretion.
          That  still  leaves  open  what  fees  were  reasonably
incurred by which defendants, and why.  We have vacated the  Rule
82  awards to the joint venturer defendants, HealthSouth and  Dr.
McGuire.   But  the superior court actually entered two  separate
final   judgments  awarding  fees,  one  jointly  for  defendants
Bjornstad,  Alaska Surgery Center, Inc., Alaska  Surgery  Center,
Ltd., and HealthSouth, and the other jointly for Dr. McGuire  and
Lake  Otis Professional Center, LLC.  So far as we can tell based
on  the  limited arguments on appeal on this issue, only the  two
joint  venturer defendants (Health South and Dr. McGuire)  had  a
valid  basis  for seeking disqualification of LBB  as  plaintiffs
counsel.   The  LBB dispute therefore would have been  thoroughly
litigated  even  if  the  plaintiffs  had  not  sued  the   other
defendants.   We  assume that because the other  defendants  were
also parties, the disqualification dispute required them to incur
some additional fees, apart from fees necessarily incurred by the
two  joint  venturer defendants in successfully challenging  LBBs
representation.  Separating out the other defendants  incremental
fees incurred as a result of the disqualification dispute may  be
difficult.   It may also be a needless exercise if on remand  the
two  joint  venturer  defendants ultimately  prevail  and  become
          eligible to recover Rule 82 fees, including enhanced fees, and if
the  court  again  enters two judgments for  the  two  groups  of
defendants jointly covered by each judgment.  The superior  court
in  its discretion may wish to hold in abeyance the enhanced  fee
issue.
          Having   vacated  the  Rule  68  awards  to  defendants
Bjornstad,  Alaska Surgery Center, Inc., Alaska  Surgery  Center,
Ltd.,  and Lake Otis Professional Center, LLC, all of whom remain
prevailing parties, we remand for a redetermination of  the  Rule
82 fees to be awarded those defendants.89


IV.  CONCLUSION
          Because questions of material fact exist as to (1) what
fiduciary  duties Dr. McGuire and HealthSouth owed the plaintiffs
and  (2) whether the defendants breached those duties, we REVERSE
the  grant of summary judgment on the fiduciary duty and contract
claims  and REMAND for further proceedings.  We AFFIRM the  grant
of  summary  judgment as to defendants Louise  Bjornstad,  Alaska
Surgery Center, Inc., Alaska Surgery Center, Ltd., and Lake  Otis
Professional Center, LLC.
          Because  Dr.  McGuire  and HealthSouth  are  no  longer
prevailing parties, we VACATE their Rule 68 and Rule 82 attorneys
fees  awards.   Because the offers of judgment were  invalid,  we
REVERSE the Rule 68 attorneys fees awards to all defendants.   We
VACATE  the Rule 82 awards and REMAND for reconsideration of  the
Rule 82 awards for the non-joint venturer defendants in light  of
this opinion.
_______________________________
     1     This  description  of  the facts  is  taken  from  the
pleadings and materials filed by the parties on summary judgment.
Because  the  superior  court entered summary  judgment  for  the
defendants, we take all permissible factual inferences  in  favor
of  the  plaintiffs.  In describing the facts in this fashion  we
are  not resolving possible factual disputes.  To the extent that
there  are  factual disputes, they will have to be  litigated  in
accordance with the legal conclusions reached in this opinion.

     2    Former AS 18.07.031 provided that:

          (a)   No  person  may make an expenditure  of
          $1,000,000  or more for any of the  following
          unless  authorized  under  the  terms  of   a
          certificate of need issued by the office:
               (1)    construction  of  a  health  care
          facility;
               (2)  alteration of the bed capacity of a
          health care facility; or
               (3)    addition  or  elimination  of   a
          category  of  health services provided  by  a
          health care facility.
          
     3     At  the  time  of sale, the Advances  joint  venturers
included Drs. Beal, Chandler, Coles, McGuire, Nathanson,  Norman,
Gills, and Sitter.

     4    Ch. 18,  1, 2, SLA 2000.

     5    Ch. 48,  1-3, SLA 2004.

     6    The original complaint asserted that the role of Alaska
Surgery  Center, Ltd. is unclear but that it relates to operation
of the Alaska Surgery Center.

     7     Rockstad v. Erikson, 113 P.3d 1215, 1219 (Alaska 2005)
(citing  Ellis  v.  City  of Valdez, 686 P.2d  700,  702  (Alaska
1984)).

     8     Id.  at 1219 (citing Witt v. State, Dept of Corr.,  75
P.3d 1030, 1033 (Alaska 2003)).

     9     Indus. Commercial Elec., Inc. v. McLees, 101 P.3d 593,
597  (Alaska 2004) (citing Alaska Rent-A-Car, Inc. v. Ford  Motor
Co., 526 P.2d 1136, 1139 (Alaska 1974)).

     10     Maines  v.  Kenworth Alaska, Inc.,155 P.3d  318,  323
(Alaska  2007)  (quoting  Martech Constr.  Co.  v.  Ogden  Envtl.
Servs.,  Inc.,  852 P.2d 1146, 1149 n.7 (Alaska 1993))  (internal
quotations omitted).

     11    K & K Recycling, Inc. v. Alaska Gold Co., 80 P.3d 702,
724  n.66  (Alaska  2003) (citing Robles v. Shoreside  Petroleum,
Inc., 29 P.3d 838, 841 (Alaska 2001)).

     12    Norville v. Carr-Gottstein Foods Co., 84 P.3d 996, 1000
n.1 (Alaska 2004).

     13     Id.  (citing Alaska Diversified Contractors, Inc.  v.
Lower Kuskokwim Sch. Dist., 778 P.2d 581, 584 (Alaska 1989)).

     14     Monzingo v. Alaska Air Group, Inc., 112 P.3d 655, 659
(Alaska 2005) (quoting K & K Recycling, Inc., 80 P.3d at 712).

     15     Neal  & Co., Inc. v. Assn of Vill. Council Presidents
Regl  Hous.  Auth.,  895  P.2d 497,  502  (Alaska  1995)  (citing
Peterson v. Wirum, 625 P.2d 866, 870 & n.7 (Alaska 1981)).

     16    Balough v. Fairbanks N. Star Borough, 995 P.2d 245, 254
(Alaska  2000)  (citing Davila v. Davila,  908  P.2d  1027,  1031
(Alaska 1995)).

     17     Id.  (citing Buster v. Gale, 866 P.2d  837,  846  n.9
(Alaska 1994)).

     18    Glamann v. Kirk, 29 P.3d 255, 259 (Alaska 2001) (citing
Philbin v. Matanuska-Susitna Borough, 991 P.2d 1263, 1266 (Alaska
1999)).

     19     Ellison v. Plumbers & Steam Fitters Union Local  375,
118 P.3d 1070, 1073-74 (Alaska 2005) (citing Thomann v. Fouse, 93
P.3d 1048, 1050 (Alaska 2004)).

     20     The  plaintiffs also argue that the  court  erred  by
granting summary judgment on their breach of contract claim.   As
far as we can see from the briefing on appeal, the fiduciary duty
and contract claims are essentially coextensive.  Although we  do
not  address  the contract claim separately, we do  not  mean  to
imply  that  the  parties are foreclosed from  litigating  it  on
remand.

     21     Old Harbor Native Corp. v. Afognak Joint Venture,  30
P.3d  101,  106 (Alaska 2001) (citing Natl Soil Servs.,  Inc.  v.
Hurst, 630 P.2d 3, 7 (Alaska 1981)); Mathis v. Meyeres, 574  P.2d
447,  449  (Alaska 1978) (partnership is fiduciary relationship);
see  also  Meinhard  v.  Salmon, 164 N.E. 545,  546  (N.Y.  1928)
(refusing  to  allow  party  to take advantage  of  new  business
opportunity without revealing full details to joint venturer).

     22    Natl Soil Servs., 630 P.2d at 7 (citing Note, Apparent
Authority  and the Joint Venture: Narrowing the Scope  of  Agency
Between Business Associates, 13 U.C. Davis L. Rev. 831, 857 n.132
(1980) (The scope of fiduciary duties owed between partners inter
se  is  often  broader  from that owed by joint  venturers  inter
se.)).

     23     The  defendants cite to the law review note which  we
cited  in  National Soil Services.  Note, supra note 22,  at  857
n.132.  That law review note stated:

          While  joint  venturers, like  partners,  owe
          each  other  a fiduciary duty as  to  matters
          relating to the specific undertaking,  or  in
          the   formation   of  the  association,   the
          fiduciary  duty  is  less  with  respect   to
          outside and possibly competing interests.  In
          a partnership the fiduciary duty prevents any
          competition by a partner with the partnership
          business;   in  the  joint  venture   it   is
          understood  at the outset that the individual
          business pursuits of the members are not thus
          to  be  restricted by the mere union  of  the
          parties in an isolated venture.
          
Id. (internal quotations and citations omitted) (emphasis added).
The  plaintiffs  fiduciary  duty  claim  here  primarily  asserts
interference  with  or  destruction  of  opportunities   directly
related  to  the  ownership  and  management  of  Condominium  A.
Because  the fiduciary breach alleged here relates to the primary
undertaking of the joint venture, any arguable justification  for
distinguishing between joint venturer and partner fiduciary  duty
would not apply here.

     24    AS 32.06.201-.997.

     25     AS  32.06.960  ([R]elations  between  and  among  the
partners  and  between  the  partners  and  the  partnership  are
governed by the partnership agreement.).

     26    Id.
          
     27     Although former AS 32.05 was in effect when the joint
venture  was formed in 1981, we conclude that the current version
of  the  UPA,  as codified in AS 32.06, applies to this  dispute.
When  it  enacted AS 32.06 in 2000, the legislature  stated  that
[o]n  or after January 1, 2004, secs. 1 - 7 of this Act apply  to
all  partnerships and limited liability partnerships.   Ch.  115,
10, SLA 2000.  The new act contained a savings clause that stated
the  new UPA would not affect an action or proceeding begun or  a
right  accrued before January 1, 2001.  Ch. 115,  11,  SLA  2000.
The  rights at issue in this case did not accrue before 2001, the
year  in  which  the defendants relocated Alaska Surgery  Center,
Inc.  from  4001 Laurel Street to the new facility on Lake  Otis.
The  plaintiffs  did not file their complaint until  April  2003.
Because neither of these events occurred before January 1,  2001,
the savings clause does not apply in this case.

     28    AS 32.06.404(b)(1) & (3).

     29    AS 32.06.404(d).

     30    AS 32.06.960(b)(3)(A).

     31     Former  AS 32.05.130 provided that [t]he  rights  and
duties  of the partners in relation to the partnership  shall  be
determined, subject to any agreement between them, by  the  rules
outlined  in  that  statute.  (Emphasis added.)   The  equivalent
provision   in  the  applicable  version  of  the   UPA   is   AS
32.06.960(a).  It provides that relations between and  among  the
partners  and  between  the  partners  and  the  partnership  are
governed  by  the  partnership  agreement.   To  the  extent  the
partnership  agreement  does not otherwise  provide,  [AS  32.06]
governs relations between and among the partners and between  the
partners and the partnership.

     32     The plaintiffs also imply that the defendants did not
preserve  their  section 13.07 argument in  the  superior  court.
Even  though  the defendants argue for the first time  on  appeal
that  section  13.07 limits their fiduciary duties,  this  theory
closely  relates  to  their  properly preserved  contention  that
section 2.05 limited the duty owed.  We therefore consider  these
two  theories  together.  See Sea Lion Corp. v. Air Logistics  of
Alaska,  Inc.,  787  P.2d 109, 115 (Alaska 1990)  (Arguments  are
considered on appeal if raised explicitly in the superior  court,
or  if  the  issue is 1) not dependent on any new or controverted
facts;   2)  closely  related  to  the  appellants  trial   court
arguments; and 3) could have been gleaned from the pleadings,  or
if  failure  to  address the issue would propagate  plain  error.
(quoting  State v. Nw. Constr., Inc., 741 P.2d 235,  239  (Alaska
1987))).

     33     The  original joint venture agreement of 1981 defined
Partnership to mean joint venture.  The 1982 agreement  does  not
define  Partner or Partnership.  The 1981 agreement also  defined
Majority-in-Interest of the Partners to mean: one (1) or more  of
the  Partners  who at the time are entitled to  an  aggregate  of
seventy  percent (70%) or more of the net profits  and/or  losses
then  allocable to all Partners then living and not  incompetent,
Bankrupt  or  Insolvent,  pursuant  to  the  provisions   hereof.
Because  each of the nine joint venturers had an equal  ownership
share,  the majority-in-interest was seven or more of  the  joint
venturers.   The  1982 agreement defines Majority-in-Interest  in
substantially similar terms.

     34    We assume the term Property was intended in context to
refer either to 4001 Laurel Street or to Condominium A.

     35     Leisnoi, Inc. v. Stratman, 956 P.2d 452, 454  (Alaska
1998) (citing Municipality of Anchorage v. Gentile, 922 P.2d 248,
256 (Alaska 1996)).

     36    Id. at 454 (citing Gentile, 922 P.2d at 256 n.5).

     37    AS 18.07.031(c).

     38     Section 5.04 states that the joint venturers  cannot,
without  the consent of the Majority-in-Interest of the  Partners
.  .  .  (v) do any act detrimental to the best interests of  the
Partnership; or (vi) do any act which would make it impossible to
carry on the business of the Partnership.

          Per  the  joint  venture agreement, any seven  Advances
members  together  would  be  entitled  to  seventy  percent   of
Advancess  profit and thereby be the joint ventures  majority-in-
interest.   For  a  definition  of  Majority-in-Interest  of  the
Partners, see note 33.

     39     Starr  v. Intl Realty, Ltd., 533 P.2d 165,  169  (Or.
1975).

     40    Id. at 166-67.

     41    Id. at 169 (internal quotations omitted).

     42     Wirum  & Cash, Architects v. Cash, 837 P.2d 692,  701
(Alaska 1992).

     43     Id.  at 701 (quoting Skone v. Quanco Farms,  68  Cal.
Rptr. 26, 29 (Cal. App. 1968)).

     44    Id. (citing Starr, 533 P.2d at 168-69).

     45     The plaintiffs argued in the superior court that  Dr.
McGuire  and HealthSouth were liable for attempting to  influence
the legislative process.  They have not renewed this argument  on
appeal.   There is consequently no need to consider  whether  the
superior  court  was correct in holding that the Noerr-Pennington
doctrine  shielded the defendants from liability for seeking  the
2000 legislative changes.

     46     E. R.R. Presidents Conference v. Noerr Motor Freight,
Inc., 365 U.S. 127 (1961).

     47    United Mine Workers v. Pennington, 381 U.S. 657 (1965).

     48    Noerr, 365 U.S. at 136.

     49    Azzar v. Primebank, FSB, 499 N.W.2d 793, 795-96 (Mich.
App.  1993)  (holding that bank directors actions in successfully
petitioning  Federal Home Loan Bank Board to oppose  shareholders
attempt   to   acquire  bank  stock  was  attempt  to   influence
governmental  action  and  immune from liability  for  breach  of
fiduciary duty).

     50     Cf. Gunderson v. Univ. of Alaska, Fairbanks, 902 P.2d
323,  329  (Alaska  1995) (quoting Liberty Lake  Invs.,  Inc.  v.
Magnuson,  12  F.3d  155,  158 (9th  Cir.  1993))  (holding  that
[a]llegations  of  fraud and misrepresentation  in  the  judicial
process  will  only  block Noerr-Pennington  immunity  when  such
allegations go to the core of a lawsuits legitimacy );  see  also
Cheminor Drugs, Ltd. v. Ethyl Corp., 168 F.3d 119 (3d Cir.  1999)
(stating that [w]hile we do not condone misrepresentations  in  a
judicial  setting, neither will we deprive litigants of  immunity
derived   from  the  First  Amendments  right  to  petition   the
government  if the alleged misrepresentations do not  affect  the
core of the litigants . . . case).

     51    AS 18.07.081(d) provides that a CON may be revoked if:

          (1)  the  sponsor  has  not shown  continuing
               progress  toward  commencement  of   the
               activities authorized under AS 18.07.041
               or   18.07.043  after  six   months   of
               issuance;
          (2)  the applicant fails, without good cause,
               to complete activities authorized by the
               certificate;
          (3)  the  sponsor  fails to comply  with  the
               provisions    of   this    chapter    or
               regulations adopted under this chapter;
          (4)  the  sponsor  knowingly misrepresents  a
               material    fact   in   obtaining    the
               certificate;
          (5)  the facts charged in an accusation filed
               under   (c)   of   this   section    are
               established; or
          (6)  the  sponsor  fails to provide  services
               authorized   by   the   terms   of   the
               certificate.
               
     52    Ch. 275,  4, SLA 1976.

     53     Greenwood  Manor v. Iowa Dept of Pub.  Health,  State
Health  Facilities  Council,  641 N.W.2d  823,  837  (Iowa  2002)
(holding  that  petitioning  nursing  facilities  had  failed  to
demonstrate  establishment  of property  interest  in  competitor
facilitys certificate of need application).

     54     Downriver  Nursing Assocs. v. Michigan Dept  of  Pub.
Health, 484 N.W.2d 748, 751 (Mich. App. 1992) (holding that state
did not deprive plaintiff of use of its property interest).

     55    Id. at 751 (quoting Gulf Court Nursing Ctr. v. Dept of
Health  &  Rehabilitative Servs., 483 So. 2d 700, 708 (Fla.  App.
1985)).

     56     Watkins v. Restorative Care Ctr., 831 P.2d 1085, 1090
(Wash. App. 1992).

     57    Id. at 1090 (emphasis in original).

     58    Valley Hosp. Assn v. Mat-Su Coal. for Choice, 948 P.2d
963, 970 (Alaska 1997).

     59    S. Cent. Health Planning & Dev., Inc. v. Commr of Dept
of Admin., 628 P.2d 551, 553 (Alaska 1981) (If there is a surplus
of  similar  facilities  in  the area there  may  be  unnecessary
duplication of health resources.).

     60     Valley  Hosp., 948 P.2d at 970 (concluding  that  CON
program  created  type of health care monopoly in  only  hospital
serving Mat-Su Valley).

     61     Dr.  Nathanson  stated  in his  2006  affidavit  that
Advances was being told that it is not likely another CON will be
issued in the near future for an ambulatory surgery center in the
Anchorage area.  Dr. McGuire testified in his deposition that  he
had recommended that HealthSouth pursue legislative change to the
law  in  the  late  nineties because  he  believed  it  would  be
difficult to obtain a new CON.

     62    Ch. 275,  4, SLA 1976.

     63    AS 18.07.081(d)(6).

     64    See, e.g., AS 18.07.081(d)(6).

     65     Wirum  & Cash, Architects v. Cash, 837 P.2d 692,  712
(Alaska 1992) (concluding that, because partner had entrusted his
wife  to  manage partnerships financial records, wife  also  owed
fiduciary duty to partnership).

     66     Ellison v. Plumbers & Steam Fitters Union Local  375,
118  P.3d 1070, 1077 (Alaska 2005) (applying Restatement test  to
claims   against   third   parties  for   aiding   and   abetting
discrimination  (quoting Restatement (Second)  of  Torts   876(b)
(1979))).

     67     Rathke v. Corr. Corp. of America, Inc., 153 P.3d 303,
312  (Alaska 2007) (quoting Jones v. Cent. Peninsula Gen.  Hosp.,
779  P.2d  783,  791 (Alaska 1989)); see also  Domke  v.  Alyeska
Pipeline  Serv.  Co.,  137 P.3d 295, 307  (Alaska  2006)  (citing
Jensen  v.  Alaska  Valuation Serv., Inc., 688 P.2d  161,  162-63
(Alaska  1984))  (recognizing that agents  cannot  be  personally
liable  for breach of contract if both their agency and  identity
of principal are disclosed).

     68    Jones, 779 P.2d at 791.

     69    Ch. 18,  1-2, SLA 2000.

     70    Ch. 48,  1-3, SLA 2004.

     71     Because  Dr.  McGuire did not make a valid  offer  of
judgment to Dr. Gills, the court concluded that Dr. Gills  would,
under Rule 82, be liable for only twenty percent of the attorneys
fees Dr. McGuire incurred after LBB was disqualified.

     72     Ellison v. Plumbers & Steam Fitters Union Local  375,
118  P.3d  1070, 1078 (Alaska 2005) (vacating Rule 82 awards  for
work performed before settlement offers were made while retaining
higher  Rule  68 fees awards for work performed after  settlement
offers).

     73    The defendants argue that the Rule 68 and Rule 82 fees
awards  correspond  to  entirely separate  actions,  because  the
plaintiffs changed counsel, amended their complaint, and  engaged
in   more   extensive   discovery  once   the   issue   of   LBBs
disqualification had been resolved.  These circumstances  do  not
establish  that there were two different cases.  Nor  are  awards
under  both  rules necessary to hold plaintiffs  responsible  for
their vexatious conduct related to the inappropriate use of LBB.

     74    Alaska R. Civ. P. 68.

     75    AS 09.30.065; Alaska R. Civ. P. 68.

     76    AS 09.30.065(a)(1); Alaska R. Civ. P. 68.

     77     Warr v. Williamson, 195 S.W.3d 903, 904 (Ark.  2004);
Century  21 Today Inc., v. Tarrant, No. 240696, 2003 WL 22443624,
1 (Mich. App. 2003).

     78     Warr, 195 S.W.3d at 907 (reversing Rule 68 fee  award
based on defendants one dollar offer of judgment and stating that
to  obtain  protection and benefit of Rule 68, a  defendant  must
make  a  good faith offer, or in other words, an offer sufficient
to  compel  the  plaintiff to reassess his or her  case.   It  is
difficult  to imagine any circumstances under which an  offer  of
one  dollar  would  compel  a  plaintiff  to  seriously  consider
settling  a  case); Century 21, 2003 WL 22443624  at  1  (holding
trial  court  did  not  err  in  declining  to  award  defendants
attorneys fees based on one dollar offer of judgment and stating,
first,  that  where a party employs gamesmanship by making  a  de
minimis offer of judgment early in a case in the hopes of tacking
attorney  fees  to costs if successful at trial, and  the  partys
objective  is  not settlement and, second, that one dollar  offer
has little if any chance of seriously opening negotiations or  of
settling  a  case,  it would be hard to construe  it  as  genuine
attempt at settlement).

     79    Lowell v. Hayes, 117 P.3d 745, 760 n.76 (Alaska 2005).

     80    Id. (citing Beattie v. Thomas, 668 P.2d 268, 274 (Nev.
1983) (requiring courts evaluating validity of offers of judgment
to  consider:  (1) whether plaintiffs claim was brought  in  good
faith;  (2)  whether defendants offer of judgment was  reasonable
and  in  good  faith in both its timing and amount;  (3)  whether
plaintiffs  decision  to reject offer and proceed  to  trial  was
grossly unreasonable or in bad faith; and (4) whether fees sought
by offeror are reasonable and justified in amount)).

     81    Id.

     82    Id.

     83    The defendants served their offers of judgment between
June  and  October 2003.  Although HealthSouth, Dr. McGuire,  and
Alaska Surgery Center, Inc. had filed counterclaims before making
their  offers, defendants Alaska Surgery Center, Ltd. and  Louise
Bjornstad did not file their counterclaims until long after their
offer expired.

     84    Beattie, 668 P.2d at 274; see Warr, 195 S.W.3d at 907.

     85     Progressive  Corp. v. Peter ex rel. Peter,  195  P.3d
1083, 1088 (Alaska 2008).

     86    See Fernandes v. Portwine, 56 P.3d 1, 9 (Alaska 2002).

     87     Municipality  of Anchorage v. Anchorage  Police  Dept
Employees  Assn,  839 P.2d 1080, 1091-92 (Alaska  1992)  (quoting
State  v. Univ. of Alaska, 624 P.2d 807, 817 (Alaska 1981));  see
Alaska R. Civ. P. 82(b)(3)(G).

     88    Id. at 1092 (quoting Moses v. McGarvey, 614 P.2d 1363,
1368-69 (Alaska 1980)).

     89     We also note that if the joint venture defendants are
not prevailing parties on remand, a Rule 82 award of partial fees
to the other defendants may raise allocation issues.

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