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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Anderson v. Alyeska Pipeline Service Co. (7/23/2010) sp-6496

Anderson v. Alyeska Pipeline Service Co. (7/23/2010) sp-6496, 234 P3d 1282

     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

SHARIN S. ANDERSON, )
) Supreme Court No. S- 13367
Appellant, )
) Superior Court No. 3AN-07-12062 CI
v. )
) O P I N I O N
ALYESKA PIPELINE SERVICE )
CO., ) No. 6496 July 23, 2010
)
Appellee. )
)
          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Craig Stowers, Judge.

          Appearances:   Richard W. Maki and  David  H.
          Shoup,  Tindall  Bennett & Shoup,  Anchorage,
          for Appellant.  David A. Devine, Groh Eggers,
          LLC, Anchorage, for Appellee.

          Before:   Carpeneti,  Chief  Justice,   Fabe,
          Winfree, and Christen, Justices.

          FABE, Justice.
          CHRISTEN, Justice, dissenting in part.

I.   INTRODUCTION
          An  employee  of Doyon Universal Services  sustained  a
head  injury  while  working  at a pipeline  pump  station.   She
applied  for and received workers compensation benefits  for  the
injury.   She  also brought a tort suit against Alyeska  Pipeline
Service  Company,  the  operator of the  pipeline  pump  station,
alleging  that  its  negligence was  a  proximate  cause  of  her
injuries.   Alyeska  sought  summary  judgment  in  the  lawsuit,
asserting  that  it  was a statutory employer  under  the  Alaska
Workers  Compensation  Act and thus was immune  from  suit.   The
superior  court  granted summary judgment  to  Alyeska  and  also
awarded  it Alaska Civil Rule 68 attorneys fees.  Because Alyeska
is a project owner, and immune from suit based on that status, we
affirm the summary judgment order dismissing the lawsuit.  But we
reverse the award of Rule 68 attorneys fees because the offer  of
judgment was not valid.
II.  FACTS AND PROCEEDINGS
          Sharin  Anderson  was injured while working  for  Doyon
Universal Services at Pump Station 5 on the Trans-Alaska Pipeline
System.   Alyeska  Pipeline Service Company, which  operates  the
pipeline,  contracted  with  Doyon to provide  security,  medical
support, lodging, and catering services for employees who operate
and  maintain the pipeline.  As part of its contract with  Doyon,
Alyeska  agreed  to  provide workers compensation  insurance  for
Doyons employees.
          On  July  25, 2007, Anderson was helping the head  cook
clean  the  loading  dock  area where  food  was  stored.   While
Anderson  was  vacuuming,  the  head  cook  moved  a  heavy  duty
industrial cart that was used for food storage from its  position
near  a wall.  A table weighing at least seventy pounds had  been
placed in a vertical position behind the cart; the cases of  food
on the cart obscured the table from view.
          Anderson was squatting while vacuuming.  When the  head
cook  removed  the  cart, the table, which  was  unsecured,  fell
directly on Anderson, hitting her in the head.  According to  the
head cook, the force of the table hitting Anderson pushed her ten
to   twelve  feet  from  her  original  position.   Anderson  was
unconscious  for at least three or four minutes after  the  table
hit  her.  The head cook reported that Anderson was having severe
convulsions,  and  he was afraid that she  would  die.   She  was
transported  to  Fairbanks Memorial Hospital by helicopter.   She
filed  a  report  of injury with the Alaska Workers  Compensation
Board  and  received  more than $72,000 in  workers  compensation
benefits on the claim.
          An  investigation by Alyeska concluded that the  table,
which belonged to Alyeska, had been propped against the wall  for
several   months.   On  December  20,  2007,  Anderson  filed   a
negligence  action  against Alyeska in  superior  court,  seeking
damages  in excess of $500,000.  Before Alyeska filed its answer,
it  wrote  a letter to Andersons attorney, highlighting the  2004
amendments  to the exclusive liability provisions of  the  Alaska
Workers  Compensation  Act.  The exclusive  liability  provisions
limit  an  injured workers remedy against the employer for  work-
related  injuries  to  workers  compensation  when  the  employer
secures payment of compensation.1  Alyeska informed Anderson that
the  amendments  extended the exclusive liability  provisions  to
project  owners, not just employers.  Alyeska contended  that  it
was  a  project owner as defined in the amendments and  therefore
immune from suit for Andersons injuries.
          Alyeska  answered Andersons complaint  on  January  15,
2008,  and  raised  these exclusive liability  provisions  as  an
affirmative  defense.  A little more than  two  weeks  after  its
answer,  Alyeska  made an offer of judgment to  Anderson  in  the
amount  of  ten  dollars, plus prejudgment interest,  costs,  and
Alaska  Civil  Rule 82 attorneys fees.  The fax transmittal  that
          accompanied the offer of judgment stated that Alyeska believe[d]
the exclusive remedy protection of AS 23.30.055 applie[d] to this
case.  Anderson did not accept the offer.
          Alyeska moved for summary judgment on March 6, 2008; it
asked  for  a judgment dismissing Andersons suit because  Alyeska
was  her  statutory  employer  and  exempt  from  suit  under  AS
23.30.055,  the  exclusive  liability provisions  of  the  Alaska
Workers  Compensation Act.  Anderson opposed the motion,  arguing
that  the  statute  should not be construed  to  include  Alyeska
within  its ambit because Alyeska was not a project owner  within
the  meaning  of the statute.  Anderson argued that applying  the
definition  of  project  owner in AS  23.30.045(f)  would  create
absurd  results and that the court should construe project  owner
according to its common usage.  She then argued that the pipeline
was  not a project, that Alyeska did not own it, and that Alyeska
was therefore not protected by the exclusive liability provisions
of  AS  23.30.055.  In response, Alyeska disagreed with Andersons
proposed method of statutory construction and maintained that  it
fell within the statutory definition of project owner.  It argued
in the alternative that maintenance of the pipeline was a project
and  that  it was a project owner even if the term was  construed
according to its common usage.
          The  superior court granted summary judgment to Alyeska
after  oral  argument on the motion.  The court found that  there
were  no  genuine  issues of material fact.   It  concluded  that
Alyeska  was a project owner within the statutory definition  and
was therefore entitled to judgment as a matter of law.  The court
specifically limited its holding to the facts of the case because
of  the  policy arguments Anderson made, noting that there  [was]
some  power  and  force to Andersons argument  that  the  statute
should not be construed broadly.
          After   the  superior  court  entered  final  judgment,
Alyeska  moved for Alaska Civil Rule 68 and 82 attorneys fees  in
the  amount of $12,409.88.  Anderson opposed the motion for  Rule
68  attorneys fees, asserting that Alyeskas offer of judgment was
a  token offer and should not trigger the provisions of Rule  68.
She  did  not  oppose imposition of Rule 82 attorneys  fees.   In
response,  Alyeska claimed that its offer was made in good  faith
and  thus  it  was entitled to Rule 68 fees.  Alyeska  maintained
that  it  had good reason to believe when it made its offer  that
its  exposure  was nominal.  It pointed out that it had  notified
Andersons  attorney before it filed its summary  judgment  motion
that it would be relying on the exclusive liability provisions of
the Alaska Workers Compensation Act.  It stated that its offer of
judgment  was  based upon an honest and good faith assessment  of
its potential liability to Anderson.
          The   superior  court  granted  Alyeskas   motion   for
attorneys fees.  The court disagreed with Andersons argument that
Alyeskas nominal offer of judgment should not trigger a  Rule  68
fee  award.   It  found that Alyeskas offer  of  judgment  was  a
reasonable,  good faith offer and granted Alyeskas attorneys  fee
request  for Rule 82 fees of $175.50, Rule 68 fees of $12,234.38,
and costs.
          Anderson  appeals  the dismissal of her  suit  and  the
award of Rule 68 attorneys fees.
III. STANDARD OF REVIEW
          We  review  a  grant  of  summary  judgment  de  novo.2
Summary judgment is proper if there is no genuine factual dispute
and the moving party is entitled to judgment as a matter of law.3
In  reviewing summary judgment, we draw all reasonable inferences
in favor of the nonmoving party.4  Interpretation of a statute is
a  question of law to which we apply our independent judgment; we
interpret  the  statute  according to reason,  practicality,  and
common  sense, considering the meaning of the statutes  language,
its legislative history, and its purpose.5
          Whether  an offer of judgment complies with Civil  Rule
68  is  a  question of law that we review using  the  independent
judgment  standard.6   The amount of attorneys  fees  awarded  is
reviewed for abuse of discretion.7
IV.  DISCUSSION
     A.   Alyeska Is A Project Owner Under AS 23.30.045.
          The  first issue presented in this appeal is the narrow
question  whether  Alyeska is a project owner as  defined  in  AS
23.30.045  and is therefore immune from suit under AS 23.30.055.8
Anderson urges us to construe project owner in AS 23.30.045(f) so
that  it  applies  only  to  projects, particularly  construction
projects, that have a limited duration.  Alternatively, she  asks
us  to  determine that because Alyeska does not own the pipeline,
it is not a project owner.  Alyeska counters that it falls within
the definition of project owner set out in AS 23.30.045(f)(2) and
is  therefore immune from suit for Andersons injuries.   It  also
points  out  that it provided the workers compensation  insurance
that covered Andersons workers compensation claim, so application
of   the  exclusive  liability  provisions  of  AS  23.30.055  is
particularly appropriate here.
          The  Alaska Legislature changed the exclusive liability
provisions of the Alaska Workers Compensation Act in 2004.9   The
2004  amendments  made  project  owners  potentially  liable  for
workers   compensation   benefits  to   their   contractors   and
subcontractors employees and expanded the definition of  employer
for  purposes of the exclusive liability provision of the workers
compensation act.10  Alaska Statute 23.30.045(a) now provides:
          An  employer  is liable for and shall  secure
          the  payment to employees of the compensation
          payable   under   AS  23.30.041,   23.30.050,
          23.30.095,    23.30.145,    and     23.30.180
          23.30.215.     If   the   employer    is    a
          subcontractor and fails to secure the payment
          of   compensation  to  its   employees,   the
          contractor is liable for and shall secure the
          payment  of the compensation to employees  of
          the  subcontractor.  If  the  employer  is  a
          contractor and fails to secure the payment of
          compensation   to   its  employees   or   the
          employees  of  a subcontractor,  the  project
          owner  is  liable  for and shall  secure  the
          payment  of the compensation to employees  of
          the    contractor   and   employees   of    a
          subcontractor, as applicable.
          
          Alaska Statute 23.30.045(f)(1) defines contractor,  for
purposes  of AS 23.30.045, as a person who undertakes by contract
performance  of certain work for another but does not  include  a
vendor  whose primary business is the sale or leasing  of  tools,
equipment, other goods, or property.  Project owner is defined as
a  person who, in the course of the persons business, engages the
services of a contractor and who enjoys the beneficial use of the
work.11
          The   exclusive  liability  provision  of  the  workers
compensation statute, AS 23.30.055, provides in part:
          The liability of an employer prescribed in AS
          23.30.045  is exclusive and in place  of  all
          other  liability  of  the  employer  and  any
          fellow  employee to the employee .  .  .  and
          anyone  otherwise entitled to recover damages
          from  the employer or fellow employee at  law
          or  in admiralty on account of the injury  or
          death.  .  .  .   In  this section,  employer
          includes, in addition to the meaning given in
          AS   23.30.395,  a  person  who,   under   AS
          23.30.045(a),  is liable for  or  potentially
          liable for securing payment of compensation.
          
          1.   The statutory definition is controlling.
          Anderson  asks  us  to construe the words  project  and
owner  according  to  common  usage  and  general  principles  of
statutory construction to determine whether Alyeska is a  project
owner  for  purposes of AS 23.30.045 and .055.  She  argues  that
broad   application  of  the  statutory  definition  would   have
unintended   consequences,  making  many  businesses  potentially
liable   for  workers  compensation  benefits  when   they   hire
independent  contractors and taking away an  employees  right  to
pursue  a negligence action.  To minimize these possible results,
she  contends that project should be construed to encompass  only
construction-type  projects  of limited  duration  and  that  the
legislative history supports this narrow reading.
          Alyeska  responds that the legislature  itself  defined
project  owner  and  maintains  that  the  separation  of  powers
doctrine  prohibits Andersons proposed method of  construing  the
statute.  It relies on State v. Jeffery to argue that the  canons
of  construction on which Anderson bases her argument only  apply
when  the  words in a statute do not have a peculiar meaning,  by
virtue of statutory definition.12
          Alaska   Statute   01.10.040(a)  provides,   in   part,
Technical  words  and  phrases and those which  have  acquired  a
peculiar   and   appropriate  meaning,  whether  by   legislative
definition  or  otherwise, shall be construed  according  to  the
peculiar  and appropriate meaning.  With a few narrow exceptions,
we  do  not  construe statutory language according to its  common
meaning when the legislature has provided a definition of a  word
or phrase, and our statutory construction cases look first to see
if the word or phrase to be construed has a specific definition.13
          Andersons  proposed construction of project owner  does
not  fall  within  the  narrow  exceptions  to  this  rule.   The
definition  of project owner is not circular:  It does  not,  for
example,  define project owner as a person who owns a  project.14
Nor  does  Anderson argue that the language of the definition  is
ambiguous; she does not, for example, argue that her work was not
in  the  course  of Alyeskas business and for that reason  should
fall outside the provisions of AS 23.30.045 and .055.15  Instead,
Anderson asks us to construe the term project owner according  to
the  common  usage of project and owner, arguing that application
of  the statutory definition would be contrary to the legislative
history.
          But  even accepting Andersons invitation to examine the
legislative  history  does not persuade  us  that  Alyeska  falls
outside   the  statutory  purview.   Anderson  argues  that   the
legislative history shows that the legislature only meant project
owner  to  apply  to  construction-type  projects,  not  to   all
businesses that use independent contractors.  She illustrates her
point  by using hypothetical examples where broad application  of
the  statutory definition might impose liability when a  business
owner  was  not  negligent  and  had  little  control  over   the
activities  that  caused  an  injury.   But  our  review  of  the
legislative  history does not support Andersons  contention  that
the  statute was meant to apply only in the construction context.
As   Alyeska  pointed  out  at  oral  argument  before  us,   the
legislative  history contains at least two hypothetical  examples
of  project owners that involved the oil and gas industrys use of
contract labor.
          Moreover,  the policy considerations that prompted  the
legislature   to  enact  the  2004  amendments  to  the   workers
compensation act apply outside the construction context.   As  we
noted  in  Schiel  v.  Union  Oil Co.  of  California,  the  2004
amendments  had  the  following purposes:  to  ensure  or  expand
workers  compensation coverage for workers, to increase workplace
safety, to prevent double dipping, and to provide protection from
tort  liability to those who are potentially liable for  securing
workers  compensation coverage.16  Limiting  application  of  the
amendments to the construction field or exempting large employers
with ongoing businesses from the definition of project owner,  as
Anderson  urges,  would  undermine  some  of  these  goals.    If
Andersons  limited construction of project owner were adopted,  a
grocery  store could use contract labor to stock its shelves  and
completely  avoid workers compensation liability for work-related
injuries  to  the  contract laborers simply because  its  use  of
contract  labor  was not related to building or  construction  or
because  it  used  contract  labor  as  part  of  its  day-to-day
operations.   We  see  nothing to suggest  that  the  legislature
intended such a result.
          Even  though we reject Andersons argument that the term
project  owner should be limited to the construction context,  we
acknowledge  that  she has posed difficult hypothetical  examples
about  the  potential  workers compensation  liability  of  small
business  owners  that  use contractors to  carry  out  functions
extraneous  to  their  businesses.17  But because  we  hold  that
          Alyeska falls within the statutory definition of project owner,
we   do   not  have  to  decide  the  questions  posed  in  these
hypothetical examples.
          2.   Alyeska meets the statutory definition.
          Alyeska  clearly  meets  the  statutory  definition  of
project  owner in AS 23.30.045(f)(2).  In the course of  Alyeskas
business, which is operating the Trans-Alaska Pipeline System, it
engaged  the  services  of  Doyon  Universal  Services.   No  one
contests that Doyon is a contractor.  Doyon undertook performance
of  work  for Alyeska, including catering services for  employees
who  operate  and maintain the pipeline.  It is also  uncontested
that  Alyeska  enjoys  the  beneficial use  of  Doyons  services:
Because of its contract with Doyon, Alyeska does not need to hire
its  own  employees to perform the work done by  Doyon.   Because
Alyeska   satisfies   the  definition   of   project   owner   in
AS  23.30.045(f)(2),  it  is covered by the  exclusive  liability
provisions of AS 23.30.055.  The superior court correctly granted
summary judgment to Alyeska and dismissed Andersons lawsuit.
     B.   It Was Error To Award Alyeska Rule 68 Attorneys Fees.
          
          Anderson also asks us to reverse the award of attorneys
fees under Alaska Civil Rule 68, arguing that Alyeskas ten-dollar
offer of judgment made at the outset of the case was only nominal
and therefore should not have triggered an enhanced attorneys fee
award.   We  agree  with Anderson that our  opinion  in  Beal  v.
McGuire18 controls our analysis of this issue.
          The  superior court issued its order for attorneys fees
before  we  decided  Beal.  In Beal, we held that the  one-dollar
offers  of judgment made at the outset of that case were  invalid
as  a matter of law and could not trigger application of Rule  68
for awarding attorneys fees.19  We stated that a one-dollar offer
of  judgment  did not serve the purpose of Rule 68, which  is  to
encourage   settlement  and  avoid  protracted  litigation    and
characterized   such  an  offer  as  a  tactical  demand[]   that
plaintiffs  dismiss  their claims to avoid exposure  to  Rule  68
fee[] awards.20  We noted that other courts require that an offer
be  made in good faith with the goal of settling the case  rather
than obtaining a larger fee award.21  We did not explicitly adopt
a  good-faith test for offers of judgment in Beal, but we decided
there  that given the timing and amount of the offers, they could
not  be  considered valid offers of settlement or compromise,  or
valid attempts to encourage negotiation.22
          There  is  no principled distinction between  the  ten-
dollar offer that Alyeska made to Anderson at the outset of  this
case  and the initial one-dollar offer in Beal.  Even though  the
superior  court found here that the offer was a reasonable,  good
faith offer, it also acknowledged that Andersons policy arguments
had  some  power and force.  We have no doubt that  when  Alyeska
made the offer, it believed that it would prevail in the lawsuit.
But  there  was no objectively reasonable prospect that  Anderson
would  accept ten dollars to settle her case  or that  the  offer
would  even  start a dialogue that could lead to  settlement   at
that  stage  of  the litigation.  This was particularly  true  in
light  of the fact that Andersons claim raised an issue of  first
          impression that involved interpretation of a new statute and
raised  difficult policy issues.  Moreover, nothing in the record
suggests  that Alyeska knew, when it made its offer of  judgment,
what  legal arguments Anderson might make to counter its reliance
on  AS  23.30.055, so it could not assess the strength  of  those
arguments.   Alyeskas  offer was in effect an  opening,  walkaway
offer that had no reasonable chance of acceptance or of fostering
further  settlement negotiations.  This is precisely the type  of
offer that we indicated in Beal could not trigger application  of
Rule 68.23
          As  we  noted in Beal, we have not adopted a good-faith
test  for  offers of judgment, and we do not do so  here.24   Our
disapproval of nominal offers made at the outset of a case is due
to  their  failure to serve the purposes of Rule 68: to encourage
settlement and avoid protracted litigation.25  When nominal offers
are  made  at  the  outset  of a case and  have  no  prospect  of
acceptance  or  of furthering settlement negotiations,  they  are
simply  attempts to shift the cost of litigation onto  the  other
party, without regard to the purpose and intent of Rule 68.
          We  do  not  mean  to suggest that  a  small  offer  of
judgment can never be valid or that the validity of the offer  of
judgment  should be determined simply by comparing the  offer  to
the  amount demanded in the lawsuit.  An offer in a case  with  a
tenuous factual basis or controlling legal precedent may be  much
lower than an offer in a case with a novel legal question.26  And
a  nominal offer that might be invalid when made at the outset of
a  case  could trigger application of Rule 68 when made later  in
the  litigation: During the course of litigation,  discovery  may
prompt a reassessment of a case, an offer including Alaska  Civil
Rule  82 fees and costs may have increased value, or a new  court
decision could alter the legal strength of a partys case.27
          Although  the dissent characterizes Andersons  case  as
weak,  our  opinion  recognizes that Anderson  posed  troublesome
policy questions.  Moreover, the superior court acknowledged that
Andersons   arguments had some power and force  and  limited  its
decision  to  the  facts of the case.  From  the  perspective  of
assessing the offer of judgment, though, there is simply  no  way
that  Alyeska  could  reasonably have assessed  the  strength  or
weakness of Andersons case.  Nothing in the record suggests  that
Alyeska knew what Andersons legal arguments might be  whether she
would  be  challenging the constitutionality of  the  statute  or
making  a fact-based argument peculiar to her case  when it  made
its offer of judgment.  Finally, Andersons case presented a novel
legal  question:   The  new  statute had  not  been  definitively
interpreted by any court when she brought her case.
          In  the  context of Andersons case, Alyeskas ten-dollar
offer  was made shortly after it filed its answer.  Anderson  was
seeking  $500,000  in  damages for an undisputedly  serious  head
injury  caused  by  a table that belonged to  Alyeska.   Alyeskas
planned  defense relied on a newly enacted statute that  had  not
been  interpreted  by  the  courts.  Under  these  circumstances,
Alyeskas  offer did not serve the legitimate purpose of  Rule  68
and  thus  cannot  serve  as a basis for  an  award  of  Rule  68
attorneys fees.28
V.   CONCLUSION
          Because  Alyeska is a project owner as set  out  in  AS
23.30.045,   we  AFFIRM  the  superior  courts  order  dismissing
Andersons claims against Alyeska.  We REVERSE the superior courts
order  awarding  Alyeska Rule 68 attorneys fees because  Alyeskas
offer  of judgment was invalid as a matter of law, and we  REMAND
for an award of Rule 82 attorneys fees.
CHRISTEN, Justice, dissenting in part.
          I  write separately to express my disagreement with the
courts conclusion that the trial court erred by awarding Rule  68
attorneys fees.
          The  court disapproves of the nominal offer of judgment
Alyeska  made  at the outset of this case due to its  failure  to
serve  the purpose of Rule 68: to encourage settlement and  avoid
protracted  litigation.  In my view, Alyeskas early  attempts  to
settle  this  case combined with the weakness of Andersons  legal
claims support the trial courts award of Rule 68 attorneys  fees.
I would affirm the superior courts order.
          Alyeska  responded to Andersons complaint by writing to
explain  that  the legislatures 2004 amendments to  AS  23.30.055
Alaskas Workers Compensation Act  extended the statutes exclusive
remedy  provisions  to Alyeska because Alyeska  fell  within  the
statutes  amended definition of project owner.  Alyeska  actually
forwarded  its legislative history research to Andersons  counsel
and invited counsel to discuss the law and your dismissal of this
suit  prior  to  any additional fees being incurred.   When  that
attempt  was  unsuccessful, Alyeska answered  the  complaint  and
asserted  that  the  suit was barred by the  exclusive  liability
provisions  of  AS  23.30.055.   Alyeska   made  an  early    and
admittedly  nominal  settlement offer under Rule 68.   The  offer
was  accompanied  by a cover sheet reiterating that  because  the
exclusive remedy protection of AS 23.30.055 applies to this case,
we think it makes sense to try and secure an early dismissal .  .
. before incurring costs and attorneys fees.  Apart from offering
to  pay  a  significant  amount of  money  despite  its  lack  of
litigation risk, it is hard to identify steps Alyeska could  have
taken  that  would  have  been more  likely  to  avoid  incurring
significant fees, or to foster a constructive dialogue about  the
2004 statutory amendments.
          The  court finds no principled distinction between  the
ten-dollar offer Alyeska made to Anderson at the outset  of  this
case and the initial one-dollar offer in Beal [v. McGuire].1   In
my  view,  there  are  several reasons Beal  is  distinguishable.
First,  the defendants in Beal served their individual offers  of
judgment before they asserted their counterclaims.2  Under  those
circumstances,  our court viewed the early one-dollar  settlement
offers in Beal to be consistent with tactical demands rather than
a   valid  attempt[]  to  encourage  negotiation.3   Because  the
settlement  offers in Beal were conveyed before the counterclaims
had  been  asserted,   the opposing parties had  a  very  limited
ability  to  assess  the  merits of the  dispute.   In  contrast,
Alyeska expressly communicated its theory of the case to Anderson
and  even  forwarded  its research on the applicable  legislative
history.   Alyeskas actions were objectively consistent  with  an
attempt  to  settle  the  case  in  its  earliest  stages  before
significant fees were incurred.4
          The  early  offers  in Beal were also  less  likely  to
result  in fruitful settlement discussions because fact discovery
was needed in order to gauge the merits of the parties respective
arguments.   Alyeskas defense to Andersons  claim  was  not  fact
dependent.   In the decision issued today, the court acknowledges
          that an offer in a case with a tenuous factual basis or
controlling legal precedent may be much lower than an offer in  a
case  with  a  novel  legal question.  But  the  court  does  not
acknowledge  that it was not necessary to conduct fact  discovery
to  assess the merits of Alyeskas defense; it turned on a  purely
legal issue of statutory interpretation.
          The  court  seems to place considerable weight  on  its
view that Andersons case presented a novel legal question because
Alyeska  relied  on  a newly enacted statute that  had  not  been
interpreted  by  the  courts.  I agree  there  was  no  case  law
precedent  controlling Andersons claim, but that  is  because  it
relied  on a recently enacted statute.  Andersons claim  was  not
based  on  any ambiguity or circularity in the statute.   It  was
based on the argument that the superior court should not construe
the term project owner according to its statutory definition.  As
the   supreme  courts  decision  observes,  we  do  not  construe
statutory  language  according to its  common  meaning  when  the
legislature  has provided a definition of a word or phrase.   The
court  goes  on  to  reject Andersons view that  the  legislative
history  of  the  2004  amendments  supports  her  position,  and
concludes that Alyeska clearly meets the statutory definition  of
project  owner under AS 23.30.045(f)(2).  Yet the court  suggests
that  nominal offers of judgment should be deemed invalid when  a
case  presents  a  novel legal question.  Here,  the  troublesome
policy questions presented by Anderson apply to hypotheticals not
at  issue in her case.  A novel claim may also be a weak one, and
in my view a party defending against a weak legal claim should be
able  to  employ Rule 68 to increase the chances of  reaching  an
early settlement before incurring significant legal fees.
          For  the  same  reasons our court  concludes  that  the
statutory   definition   of  project   owner   so   clearly   and
unambiguously applies to Alyeska, I conclude that Alyeskas  early
and   nominal offer, which was accompanied by its legal  analysis
and  not dependent on factual discovery, was reasonable and valid
under  Rule  68.  And I respectfully dissent from the portion  of
the courts decision that reverses the superior courts Rule 68 fee
award.
_______________________________
     1    AS 23.30.055.

     2    Parker v. Tomera, 89 P.3d 761, 765 (Alaska 2004).

     3    Id.

     4     Moore  v. Allstate Ins. Co., 995 P.2d 231, 233 (Alaska
2000).

     5     Grimm  v.  Wagoner,  77 P.3d 423,  427  (Alaska  2003)
(citing  Native  Vill. of Elim v. State, 990 P.2d  1,  5  (Alaska
1999)).

     6     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)).

     7     Lowell  v.  Hayes, 117 P.3d 745, 750-51 (Alaska  2005)
(citing  Van  Deusen  v.  Seavy, 53 P.3d 596,  603  n.23  (Alaska
2002)).

     8     Neither party has pointed to disputed facts that would
preclude summary judgment.

     9    Ch. 80, SLA 2004.

     10    Id.

     11    AS 23.30.045(f)(2).

     12     See 170 P.3d 226, 232 (Alaska 2007) (quoting Div.  of
Elections v. Johnstone, 669 P.2d 537, 539 (Alaska 1983)).

     13    See, e.g., Ranney v. Whitewater Engg, 122 P.3d 214, 218
(Alaska  2005)  (construing  wife for  purposes  of  the  workers
compensation act according to its common usage because it has not
been  defined  statutorily and has no technical  meaning  in  the
present context).

     14    See Parks Hiway Enters., LLC v. CEM Leasing, Inc., 995
P.2d 657, 661 (Alaska 2000) (construing owner according to common
usage  because  the  statutory definition was circular,  defining
owner  as in the case of a facility, any person owning . . .  the
facility).

     15    See Alaska Hous. Fin. Corp. v. Salvucci, 950 P.2d 1116,
1121-22 (Alaska 1997) (examining legislative history to determine
whether reports to a public body in AS 39.90.100 included reports
to an employees own employer).

     16    219 P.3d 1025, 1032 (Alaska 2009).

     17     She posed one hypothetical example involving a  small
law firm that used the services of a courier to deliver papers or
a snow plower in maintaining its building.

     18    216 P.3d 1154 (Alaska 2009).

     19    Id. at 1176, 1178.

     20    Id. at 1178.

     21     Id.  at 1177 (citing Warr v. Williamson, 195 S.W.  3d
903,  904  (Ark.  2004); Century 21 Today Inc.  v.  Tarrant,  No.
240696, 2003 WL 22443624, at *1 (Mich. App. Oct. 28, 2003)).

     22    Id. at 1178.

     23    While the dissent attempts to distinguish Beal because
of  the  timing of the offer, Alyeskas offer, like that in  Beal,
was  effectively zero in what appears to be a good faith  dispute
involving  potentially substantial damages.  Beal,  216  P.3d  at
1178.

     24    Id.

     25    Id.

     26     See Deltona House Rentals, Inc. v. Cloer, 734 So.  2d
586,  588  (Fla. App. 1999) (holding that $101 offer of  judgment
was  valid in a case of zero liability from the outset but noting
that a low offer may not be in good faith when a legal dispute is
novel or complex).

     27    Cf. Hartline v. Kaiser Found. Hosps., 33 Cal. Rptr. 3d
713  (Cal. App. 2005) (holding that an offer of judgment to waive
a  claim for costs made after summary adjudication of one of  two
of the plaintiffs claims was valid).

     28     We also note that it was error to award both Rule  68
and  Rule  82 attorneys fees to Alyeska.  Ellison v.  Plumbers  &
Steam Fitters Union Local 375, 118 P.3d 1070, 1078 (Alaska 2005).
Although  no  one  raised this issue and our disposition  of  the
Rule  68  attorneys  fees makes it moot, we  note  the  error  to
provide guidance in future cases.

1    Beal v. McGuire, 216 P.3d 1154, 1178 (Alaska 2009).

     2    Id.

     3    Id.

     4     The court observes that nothing in the record suggests
that Alyeska knew what Andersons legal arguments might be .  .  .
when  it  made  its offer of judgment.  In my view,  the  salient
point is that Anderson was in a position to assess the merits  of
the  statutory  interpretation question   Alyeska  gave  her  its
research and analysis.  Alyeska was the only one disadvantaged by
the fact that Anderson had not disclosed her legal argument.

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