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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Angleton v. Cox (9/3/2010) sp-6508

Angleton v. Cox (9/3/2010) sp-6508, 238 P3d 610

     Notice:   This opinion is subject to correction  before
     publication  in  the  Pacific  Reporter.   Readers  are
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INC., )
) Supreme Court No. S- 12896
Appellants, )
) Superior Court No.
v. ) 3SW-04-85 CI
Appellees. ) No. 6508 - September 3, 2010
          Appeal  from the Superior Court of the  State
          of  Alaska, Third Judicial District,  Seward,
          Sharon Gleason, Judge.

          Appearances:  Joseph L. Kashi, Soldotna,  for
          Appellants.   Phil N. Nash,  Law  Offices  of
          Phil N. Nash, Kenai, for Appellees.

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

          CARPENETI, Justice.

          I.    Members of a fraternal organization brought  suit
against other members asserting claims for breach of a settlement
agreement  and  a  derivative action on behalf of  the  fraternal
organization.   The superior court dismissed the derivative  suit
and  later granted summary judgment for defendants on the grounds
that,  because a previous contempt action raising the same claims
was  dismissed, the  damages claims for breach of settlement were
barred by res judicata.  Because Alaska law does not recognize  a
derivative right of action for non-profit members, we affirm  the
superior  courts dismissal of that claim.  However,  we  conclude
that the order on the contempt motion in the first action was not
a  judgment  on the merits of plaintiffs claims for  damages  and
therefore  the  claims for damages for breach of  the  settlement
agreement were not precluded by res judicata.  The fact that  the
judgment  in  the contempt action did not reach the  merits  also
prevents  the  application  of issue  preclusion,  or  collateral
estoppel,  to these claims.  Accordingly, we remand  for  further
     A.   Facts1
          In  November 2002 two of the appellants, Robert  Fulton
and  Robert  Summers, settled a previous suit  against  appellees
Stephen  L.  Cox  and  Leslie R. Little and  others.   That  suit
concerned  the  suspension of several members of various  Masonic
lodges in Alaska, including Fulton and Summers.  Cox was a leader
of the Alaska Grand Lodge at the time.  The final appellant, Fred
Angleton,  is  a former Grand Master of the Alaska Masonic  Lodge
and  advisor to Fulton and Summers and, though not a party to the
first suit, was named in the settlement of that suit because  the
plaintiffs  wished to protect him from any potential  retaliation
for his involvement in the dispute.
          The   parties  reached  a  settlement  at  a   judicial
settlement  conference on November 27, 2002, and  Superior  Court
Judge  Dan  A. Hensley placed the terms of the agreement  on  the
record  orally.  The settlements essential terms  were  that,  in
exchange  for  dismissal  of  all claims,  defendants  would  pay
plaintiffs  $10,000  cash within 30 days and immediately  restore
the  plaintiffs to their status as Master Masons.  Cox and Little
would  send letters to Masonic and related groups informing  them
of  the  reinstatement, and withdraw a 2002  Grand  Master  edict
expelling Masons who file lawsuits; they would then seek a review
and  vote regarding the Grand Masters power to suspend and  expel
members.   No Masonic charges would be brought against plaintiffs
or  any members who assisted the plaintiffs in the litigation for
any  reason arising in connection on . . . or before the date  of
this  settlement.   No parties would speak in a  disparaging  way
about  any other parties at the Grand Lodge.  Plaintiffs  counsel
further stated
          this  is  meant to be, obviously,  a  summary
          claim  in  that any  assum[ing]  the  current
          resolution,  any breach would  be  actionable
          only   in   the  context  of  the  settlement
          agreement  for rectification of  that  breach
          and would not invalidate the remainder of the
          It was very important to the suspended members that the
defendants promises be effective immediately because they  wished
          to attend annual elections at the Seward Masonic lodge six days
later  on December 3, 2002.  However, Cox took the position  that
Fulton and Summers were not effectively reinstated until after  a
stipulation  for  dismissal was entered.  Judge  Hensley  settled
this  dispute  at  a  show cause hearing  the  afternoon  of  the
election,  ordering  that defendants were bound  to  readmit  the
plaintiffs immediately.
          Throughout  December  2002 and January  2003,  Cox  and
Little  acted  in  ways  that may have  violated  the  settlement
agreement.   For example, they voided the December 3 election  at
which  Fulton  and Summers were voted into office.  They  decided
that  Fulton and Summers could not be reinstated until the entire
membership  of the Grand Lodge voted.  Angleton was suspended  in
connection with his assistance to Fulton and Summers, and members
were   instructed  to  exclude  Fulton  and  Summers  from  lodge
membership-only  functions, which included  funerals  of  Fultons
          On February 6, 2003, Summers, Fulton, and Angleton were
reinstated by the newly elected Grand Master at the annual  Grand
Lodge  meeting.  In their annual report, Cox and Little discussed
the  litigation without using names, stating that the members who
brought  the  suit  failed their brethren and  that  the  Masonry
should be devoid of lawsuits.  Little added that three members of
the  Grand Lodge sought to set aside their obligations as Masons.
The  pain  these actions have caused Masonry will, unfortunately,
reach  throughout the North American Continent and could  perhaps
even  tear down the very fabric of Masonry by allowing the courts
to interfere in our Grand Fraternity.
     B.   Proceedings
          1.   Final judgment and post-judgment contempt proceedings in the
               2002 action
          A  second  show cause hearing was held before  Superior
Court  Judge  Sharon  Gleason  on  December  23,  2002.   Fulton,
Summers,  and  Angleton  alleged  continuing  violations  of  the
settlement  agreement, including being barred  from  meetings  at
their  home lodge.  On January 7, 2003, Judge Gleason  issued  an
enforcement   order  enjoining  Cox,  Little,  and  other   named
defendants from interfering with Fulton and Summers attendance at
events,  from  suspending them or anyone named in the  settlement
for  events  connected to the first suit, and  from  voiding  the
Seward  Lodge  elections  at  which plaintiffs  had  won  elected
positions.   That  same day, Judge Gleason also entered  a  final
order memorializing the settlement terms and dismissing the first
          Fulton  and  Summers  again  moved  for  a  finding  of
contempt  on  January  13,  alleging that  Angleton  had  already
suffered  irreparable  harm  by not being  allowed  to  attend  a
meeting at which he was to have been installed as an officer of a
concordant  organization and that he and plaintiffs would  suffer
further  irreparable harm by being barred from a  February  Grand
Lodge meeting.  Fulton and Summers requested that the court  hold
defendants  Cox, Grand Lodge, and any other culpable  persons  in
contempt,  [and]  provide appropriate relief  .  .  .  that  will
compensate Plaintiffs . . . for the costs, injuries and damages .
.  .  since  Judge Hensleys November 27, 2002 order.   The  final
hearing in the first case regarding this motion was held on March
4, 2003, before Judge Gleason.
          At  the March hearing, the parties agreed that the  new
leadership of the Lodge was now in compliance with the settlement
agreement  and that violations of the order had ceased  in  early
February   2003,  when  the  suspended  members  were  officially
reinstated by the newly elected Grand Master.  The Lodges counsel
asserted that the compliance of the new leadership with the final
order  in  the case mooted everything.  When asked if he  agreed,
plaintiffs  counsel  Joseph Kashi stated that  the  issue  really
devolves primarily to Mr. Cox in his capacity and to Mr. Little .
.  .  [t]here  were a significant number of things that  happened
that  I think it would be appropriate for this court to give some
fair  consideration to.  He then stated that ultimate  compliance
doesnt  necessarily wash away the damages and problems that  were
caused prior to that point, and stated twice that a hearing would
be appropriate.  However, he then said that there were sufficient
affidavits  and  a  decision on the pleadings  as  to  whether  a
hearing should go forward would be the appropriate course in  any
event.  Finally, near the end of the hearing, he asked the  court
to   review   the  affidavits  because  there  was  some   fairly
significant  and still irreparable and unrepaired  injuries  that
occurred  during that two month time when the Court  orders  were
not obeyed.
            On  March  7,  2003, the superior  court  denied  the
contempt  motion as moot.  The order denying the contempt  motion
also denied Cox and Littles motion to enter a revised final order
[s]o  as  to eliminate any question as to the expiration  of  any
partys  right  of appeal.  The order is silent on any  claims  or
issues of damages.
          2.   The 2004 action for breach of settlement agreement
          1.   In November 2004 Angleton, Fulton, and Summers (collectively
Angleton)   filed a new action against two of the  defendants  in
the  prior action, Cox and Little, (collectively Cox) for damages
arising  from  breach  of  contract,  intentional  infliction  of
emotional  distress, and other alleged torts based on the  events
between  the  November 2002 settlement conference and  the  March
2003  reinstatement.  Cox moved to dismiss the action for failure
to  exhaust remedies within the Lodge, and to dismiss any  counts
seeking  recovery in a derivative action on behalf of the  Lodge.
The  court granted the motion on the derivative claims but denied
it  with  respect to failure to exhaust, noting that Cox had  not
pointed  to  any language in the Grand Lodges by-laws that  would
preclude this action, which appears to be essentially related  to
the  enforcement  of  a  settlement  agreement  entered  into  in
previous litigation.  Cox then moved for summary judgment on  the
grounds  that the previous case was dismissed on March  7,  2003,
the  court  entered  a final order memorializing  the  settlement
agreement, and all the disputed facts occurred before that date.2
The superior court granted the motion for summary judgment on the
grounds  that  its March 7, 2003, order should  be  accorded  res
judicata  effect for any claims arising from events  between  the
          entry of the settlement agreement in November 2002 and the final
order  on March 7, 2003.  The court noted that Angelton had  made
several  requests for hearings on damages, but that  the  parties
ultimately agreed that the court would instead decide the case on
the  pleadings.  Further, Angleton could have appealed  from  the
March  7,  2003, order because of the lack of a damages award  or
damages  hearing, but did not do so.  The March order became  the
final  and  binding decision regarding claims for  events  before
that order.
          The court allowed Angleton to file an amended complaint
to  clarify  plaintiffs  claims for the period  after  the  March
order.   The new amended complaint did not comply with the  order
and  the  court denied the motion to amend.  The court  dismissed
the  entire  case  with  prejudice in September  2007.   Angleton
          We  review  summary judgment rulings de novo3  and  may
affirm summary judgment on any basis appearing in the record.4  A
determination that a claim or issue is precluded is a question of
law which we review de novo.5
          We  review denial of a motion to amend a complaint  for
abuse of discretion.6
     A.   The March 7, 2003, Order Denying Angletons Contempt Claims
          Was Not A Final Judgment On The Merits.
          A.   A judgment is given res judicata effect by this court when
it  is  (1) a final judgment on the merits, (2) from a  court  of
competent jurisdiction, (3) in a dispute between the same parties
(or their privies) about the same cause of action.7  The question
of  whether the cause of action is the same does not rest on  the
legal theory asserted but rather on whether the claims arise  out
of  the same transaction  the same set of underlying facts.8  Res
judicata is also known as claim preclusion.9
          Cox  urges  us to accord collateral estoppel effect  to
the  March  7  order even if we find that res judicata  does  not
apply.   Collateral  estoppel is also known as  issue  preclusion
because  it  requires that a court has decisively  adjudicated  a
particular   factual  or  legal  issue.10   Like  res   judicata,
collateral estoppel also requires that an issue be decided on the
merits  in  order  for further litigation to be precluded.11   We
first analyze whether the issues and claims in the second lawsuit
were  the  same  as in the first.  We then analyze   whether  the
order  denying the motion for contempt as moot was a decision  on
the merits.
          1.   The issues and claims raised in the second lawsuit are the
               same as those raised in the motion for contempt.
          1.   1.   Angleton argues that there was no identity of claims
(for  res judicata or claim preclusion purposes) nor identity  of
issues  (for  collateral estoppel or issue preclusion  purposes).
First,  he  makes the point that all of the disputed transactions
occurred  after  final  settlement of  the  first  action  became
effective  on  November  27, 2002, and most  occurred  after  the
          action was dismissed on December 3, 2002.  He also argues that
damages  for  the  breach of the settlement  agreement  were  not
before the court as such in the contempt hearing held on March 4,
2003.   Both of these points miss the mark.  By filing a contempt
motion  in  which he asked the court to consider damages,  asking
the  court to hold a hearing on damages, and then accepting  that
the  court  could make that decision on the affidavits,  Angleton
clearly  raised  a  claim  for damages from  the  breach  of  the
settlement  agreement.   Angleton  even  pointed  to   the   same
affidavits submitted with the contempt motion as his evidence  in
the  second  action  on  summary  judgment  that  the  plaintiffs
suffered  actual  damages.  Alaska Statute 09.50.040  authorizes,
though   it   does   not  require,  a  trial   court   to   award
indemnification damages to a party harmed by a civil  contempt.12
The  statute provides that where an indemnification award is made
and accepted, the aggrieved party is barred from later claims for
the  same  harm.13   Therefore, Cox  satisfies  the  elements  of
identity of claims and identity of issues.
          2.   The order denying the motion for contempt as moot was not a
               decision on the merits of Angletons damages claims.
          Although  the claims and issues presented are the  same
claims and issues presented in the contempt action, the March  7,
2003,  order  will  preclude later litigation  under  either  res
judicata  or  collateral estoppel principles only  if  it  was  a
judgment  on the merits.14  Angleton argues that this  could  not
have  been  a  judgment on the merits under this courts  rule  in
Ostrow  v.  Higgins15 that a dismissal based  on  mootness  is  a
jurisdictional ruling and not based on the merits.  We agree with
          In  Ostrow  the  superior  court  adjudicated  a  first
lawsuit  for  an  injunction against the sale of a  property  and
damages.16   After the plaintiff failed to pursue the  injunction
beyond the temporary stage, the defendant sold the property while
the  suit  was  pending.17   The plaintiff  then  moved  for  the
injunction  but  defendants  argued mootness  and  the  plaintiff
withdrew  the motion.18  The superior court dismissed the  entire
suit  at  that  point and Ostrow did not appeal.19  Ostrow  later
brought  a  new  lawsuit.20 That new suit was  dismissed  on  res
judicata   grounds.21   We  disagreed  because  mootness   is   a
jurisdictional issue which does not preclude a second  action  on
the same claim if the justiciability problem can be overcome.22
          Ostrow  is applicable to this case whether the case  is
analyzed under res judicata or collateral estoppel.  Here, as  in
Ostrow,  the  claim  presented was dismissed as  moot  without  a
ruling  on  a  simultaneous  damages claim;  in  both  cases  the
plaintiff  did not appeal the failure to rule on damages  in  the
first  action.   Under  AS  09.50.040,  the  superior  court  had
discretion   to   award  damages  sufficient  to  indemnify   the
plaintiffs  for  the harm caused by the contempt.   However,  the
order  makes  no  mention of a determination of that  issue  even
though  damages  were requested in the motion  for  contempt  and
during the hearing.
          Whether  to award damages in an action for contempt  is
          within the discretion of the court.23  Under AS 09.50.040, a court
has discretion not to award any damages.  However, in the absence
of  an  explicit finding that no damages have been suffered,  the
fact that a court does not exercise its discretion to indemnify a
party  in  a  particular case is not equivalent to a  substantive
decision  that the party is not entitled to damages.  Damages  in
contempt  actions often have different purposes than  damages  in
other actions, which is why the decision to award damages is left
to the sound discretion of the trial court.24
          Here,  we cannot conclude from the order that the court
found  that  no  damages could be shown.  The  court  did  allude
during  the hearing to affidavits presented by Fulton and Summers
at  the  end of the contempt hearing and did ask Fultons  counsel
whether  the  court  could solve those  alleged  harms.   Fultons
counsel  suggested  that the affidavits would  be  sufficient  to
enable  the court to make a decision on the damages.  It  is  not
clear  that  the  evidence in the record shows an entitlement  to
damages,  but without an explicit statement in the order  by  the
finder  of  fact regarding the substantive merits of the  damages
claims, dismissal based on res judicata was inappropriate.25
          Because the court was not required to reach the  merits
of  the  damages question in the particular context of a contempt
hearing, and did not address the merits of the damages claims, we
conclude  that this particular contempt order was not a  judgment
on the merits of the claims for damages.26   We emphasize that the
only  reason   the  second action survives res judicata  is  that
dismissal  of  the contempt motion was  jurisdictional  and  thus
there  was no judgment on the merits.  If the dismissal had  been
on  the  merits, including a dismissal based on summary judgment,
res  judicata would bar a subsequent action and the  only  relief
available to the claimant would be an appeal of the dismissal.
     B.   It Was Not Error To Take Judicial Notice Only Of The Record
          From The First Case And Decline To Take Judicial Notice Of 83
          Facts Listed In Fultons Motion.
          Angleton  moved for partial summary judgment requesting
the  court to take judicial notice or to enter an order  that  83
specific facts were established.  The superior court noted in its
decision on the record that it disagreed with many of the  stated
facts and that it had taken judicial notice of the record in  the
previous case.  Angleton argues that the court fail[ed]  to  make
any  cognizable findings when denying a motion that was basically
ascertainable prima facie from the Courts own record and  further
states  that  he  will not argue each factual point  individually
because they are each self-proving.
          Judicial  notice is appropriate if the fact  is  either
(1)  generally known within the state or (2) capable of  accurate
and  ready  determination  by resort to  sources  whose  accuracy
cannot  be  reasonably questioned.27  Facts and inferences  about
which reasonable minds could differ are not the proper subject of
judicial notice.28  The basis for the courts denial of most of the
motion  for  partial summary judgment was clear: The court  found
the  statements  arguable or incorrect.   We  affirm  the  courts
ruling on this issue.

     C.   We  Decline  To Imply A Derivative Cause Of Action  For
          Nonprofit Organization Members.
          Judge  Gleason  dismissed  Angletons  derivative  claim
because  no  such  cause of action exists  in  Alaskas  nonprofit
corporation act.  Angleton cites no case law directly  supporting
his  arguments.  Instead, he urges that the court  should  create
such a cause of action because (1) AS 10.20.360 allows members to
dissolve  nonprofit corporations when directors  are  deadlocked,
acting   oppressively   or  illegally,  or   in   other   limited
circumstances  and  (2) creating a derivative action  relates  to
procedural  rights  and  therefore is within  the  constitutional
power of the courts.
          We  defer to the choices of the legislature in drafting
the    statutes   governing   corporations.    The    legislature
specifically  created  a  right  of  shareholders  of  for-profit
corporations to pursue a derivative cause of action on behalf  of
the  corporation against parties who commit a wrong  against  the
corporation,  but  created no analogous right for  members  of  a
nonprofit  corporation.29   We are  not  persuaded  by  Angletons
argument that AS 10.20.360, which enables a member of a nonprofit
corporation to sue for dissolution of the corporation in  extreme
circumstances,30   somehow implies the creation  of  a  right  to
pursue derivative suits.
     D.   We Decline To Reach The Denial Of Angletons Second Motion To
          On  February  7, 2007, following its grant  of  summary
judgment to Cox, the court gave Angleton an opportunity  to  file
an  amended complaint restricted to claims that arose after March
[7],  2003.   The  court had already given instructions  on  this
point.  Angleton filed an amended complaint on February 28, 2007,
but,  as  the court found, the claims for relief in the  proposed
Second Amended Complaint are not restricted to claims that  arose
after  March [7], 2003.  Indeed, the only action that it  alleged
occurred after March 7, 2003, was the dissemination of the annual
report  in  which  Cox  commented  disapprovingly  about  members
bringing   lawsuits.   Angleton  argues  that  the  binding   and
distribution  of  the  comments was  a  separate  breach  of  the
agreement from the reading of the comments at the annual meeting.
He  also argues that it constituted a continuing published libel.
The  superior court concluded that Angleton had not complied with
its  order  concerning  amendment of the  complaint,  denied  the
motion to amend, and afforded Angleton 20 days in which to  amend
the complaint in conformity with its earlier order.  Angleton did
not  do  so.  Angleton now argues that the superior court  abused
its discretion in denying his motion to amend.
          We decline to reach this issue.  First, our reversal of
the  superior  courts  grant of summary judgment  may  moot  this
question as a practical matter, because Angleton will be able  to
litigate  his principal claims on remand.  Second, we  note  that
the  superior court denied the motion to amend in the context  of
its  decision on summary judgment.  Now that the summary judgment
          has been reversed, that court should be the first to address the
propriety  of the motion to amend, if indeed Angleton  wishes  to
proceed with his amended complaint.31
          The order of March 7 that dismissed the contempt action
as  moot  was  not a final judgment on the merits as to  damages.
Therefore  Angletons subsequent damages claims are not precluded.
Accordingly,   we   REMAND  the  case  for  further   proceedings
consistent with this opinion.
     1     Although many facts are in dispute, for purposes of  a
summary   judgment   motion  we  assume  the  non-moving   partys
allegations of fact are true.  Mat-Su/Blackard/Stephan & Sons  v.
State,  647  P.2d 1101, 1102 n.1 (Alaska 1982).  We have  assumed
the  version  of Angleton, Summers, and Fulton to  be  true  here
because  the  grant  of the summary judgment motion  to  Cox  and
Little is the main issue on appeal.

     2     In  fact, the final order memorializing the settlement
agreement  was  entered  January 7,  2003,  and  some  violations
occurred  shortly after that, but apparently ended  by  March  7,
2003, the date of the final order dismissing the contempt action.

     3    Olivit v. City & Borough of Juneau, 171 P.3d 1137, 1142
(Alaska 2007).

     4    Martinez v. Ha, 12 P.3d 1159, 1162 (Alaska 2000).

     5     Alaska  Wildlife Alliance v. State, 74 P.3d  201,  205
(Alaska 2003); Maness v. Daily, 184 P.3d 1, 5 (Alaska 2008).

     6     Ruckle  v.  Anchorage Sch. Dist., 85 P.3d  1030,  1034
(Alaska 2004).

     7      Smith v. C.S.K. Auto, Inc., 132 P.3d 818, 820 (Alaska

     8     Alderman v. Iditarod Props., 104 P.3d 136, 141 (Alaska

     9     Alaska Pub. Int. Research Group v. State, 167 P.3d 27,
44 (Alaska 2007).

     10    See Rooney v. Rooney, 914 P.2d 212, 216 (Alaska 1996).

     11      Jackinsky  v. Jackinsky, 894 P.2d 650,  654  (Alaska

     12    AS 09.50.040 provides in relevant part:

          If  a  loss or injury to a party in an action
          or   proceeding  has  been  caused   by   the
          contempt,  the  court,  in  addition  to  the
          punishment imposed for the contempt, may give
          judgment in favor of the party aggrieved .  .
          .  for a sum of money sufficient to indemnify
          that  party  and  to satisfy  the  costs  and
          disbursements  of that party.   The  judgment
          and acceptance of that amount is a bar to  an
          action  or proceeding by the aggrieved  party
          for the loss or injury.

See  also  Doyle  v.  Doyle, 815 P.2d 366, 371-72  (Alaska  1991)
(holding  that  trial court has discretion to award  damages  for
contempt,  but that damages must correlate with actual injury  to

     13    AS 09.50.040.

     14     Smith v. CSK Auto, Inc., 132 P.3d 818 (Alaska  2006);
Jackinsky, 894 P.2d at 654.

     15     722 P.2d 936 (Alaska 1986).

     16    Id. at 938.

     17    Id.

     18    Id.

     19    Id.

     20    Id.

     21    Id.

     22       Id.  at  938-39  (concluding  that  any  error  was

     23    Doyle v. Doyle, 815 P.2d 366, 371 (Alaska 1991) (noting
that  civil  contempt  damages  are  means  for  coercing  future
compliance, and have both remedial  and punitive elements).

     24    Id.

     25     Usibelli  Coal Mine, Inc. v. State, Dept  of  Natural
Res.,   921   P.2d  1134,  1142  (Alaska  1996)  (holding   where
commissioner  did  not address argument in  final  decision,  res
judicata did not apply).

     26    While we conclude that summary judgment should not have
been granted on the basis of res judicata, we acknowledge that it
is uncommon for the same claim to be raised in the context of two
separate  lawsuits.  The values served by the  doctrines  of  res
judicata  and  collateral  estoppel include  societys  overriding
interest  in  reaching a final resolution in legal controversies,
promoting efficiency and preserving resources within the judicial
system, and allowing parties to rely on decisions by refusing  to
allow  future  litigation  on a cause of  action  that  has  been
decided.   50 C.J.S. Judgments  931 (2009).  In order to  promote
these  values,  we  encourage parties who elect  to  litigate  an
alleged breach of a settlement agreement within the context of an
existing lawsuit to resolve their claim within that lawsuit.

     27     Alaska R. Evid. 201(b).

     28     F.T. v. State, 862 P.2d 857, 864 (Alaska 1993).

     29    See AS 10.06.435.

     30     AS 10.20.360 allows a member to sue in superior court
to  liquidate the assets and business of a nonprofit  corporation
when:  (1) the directors are deadlocked in the management of  the
corporate  affairs, the members are unable to break the deadlock,
and irreparable injury to the corporation is being suffered or is
threatened  by  reason  of the deadlock;  (2)  the  acts  of  the
directors  or  those in control of the corporation  are  illegal,
oppressive,  or  fraudulent; (3) the members  are  deadlocked  in
voting  power,  and have failed, for a period which  includes  at
least  two  consecutive annual meeting dates, to elect successors
to  directors whose terms have expired or would have expired upon
the election of their successors; or (4) the corporate assets are
being misapplied or wasted.

     31     Although  an appellate court has the power  to  allow
amendment  of  pleadings on remand, see Haines  Pipeline  Const.,
Inc. v. Montana Power Co., 830 P.2d 1230, 1240 (Mont. 1991) (When
an  appellate  court  reverses and remands  for  new  trial,  the
appellate  court may, in furtherance of justice, grant  leave  to
the  parties  to amend their pleadings. . . .  Where  issues  are
inextricably  intertwined,  the  pleadings  may  be  amended   on
remand.),  overruled on other grounds by Porter v. Galameau,  911
P.2d  1996  (Mont.  1996), we conclude that it is  preferable  to
allow  the superior court to address it initially, if indeed  the
issue is even raised below.

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