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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Smith v. State, Dept. of Transportation and Public Facilities (7/1/2011) sp-6575

Smith v. State, Dept. of Transportation and Public Facilities (7/1/2011) sp-6575, 253 P3d 1233

        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 
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PAUL SMITH,                                   ) 
                                              )       Supreme Court No. S-13796 
                       Appellant,             ) 
                                              )       Superior Court No. 3AN-08-07059 CI 
        v.                                    ) 
                                              )       O P I N I O N 
STATE OF ALASKA,                              ) 
DEPARTMENT OF                                 )       No. 6575 - July 1, 2011 
TRANSPORTATION AND PUBLIC                     ) 
FACILITIES,                                   ) 
                       Appellee.              ) 

               Appeal from the Superior Court of the State of Alaska, Third 
               Judicial District, Anchorage, Frank A. Pfiffner, Judge. 

               Appearances:   Hugh W. Fleischer, Law Offices of Hugh W. 
               Fleischer,     LLC,    Anchorage,     for   Appellant.     Joan    M. 
               Wilkerson,      Assistant    Attorney    General,    and   Daniel   S. 
                Sullivan, Attorney General, Juneau, for Appellee. 

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

               FABE, Justice. 


               The Alaska Department of Transportation and Public Facilities (DOTPF) 

fired Paul Smith,  an equipment operator, for misconduct.  In 2005, Smith shot a moose 

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while on duty and received a 30-day suspension. In 2006, he took a fuel tank stand from 

his work station, later claiming that he thought he had received permission to do so.  At 

about the same time, 100 gallons of fuel disappeared from the same station.                 DOTPF 

concluded that Smith had stolen the fuel and terminated him. 

                After   unsuccessfully   filing   a   union   grievance   and   complaints   with   the 

Alaska Human Rights Commission and the federal Equal Employment Opportunity 

Commission, Smith, an Alaska Native, filed a complaint alleging four causes of action: 

(1) discriminatory employment practices violating AS 18.80.220 and Title VII of the 

Civil   Rights   Act   of   1964;   (2)   tortious   interference   with   contractual   relations;   (3) 

intentional infliction of emotional distress; and (4) breach of the implied covenant of 

good faith and fair dealing.  The superior court granted summary judgment for the State 

on all counts. Smith appeals the superior court's judgment on the first and fourth causes 

of action.  We affirm the superior court's decision on both claims. 


                The Alaska Department of Transportation and Public Facilities employed 

Paul Smith from 1986 to 2006.         Smith's title was "equipment operator," and his duties 

included snow removal and highway maintenance.                 He was employed at the Quartz 

Creek Station near Soldotna. 

        A.      Disciplinary Proceedings And Termination 

                On August 29, 2005, Smith shot and field-dressed a moose while on duty. 

Smith     had  not   requested   permission     for  this   absence,  and   he  received   a  30-day 


                On July 13, 2006, Smith was part of a team replacing an old fuel tank stand 

at the Quartz Creek Station.        According to Smith, he and two other employees, Wally 

Griglione and Carl Romig, discussed what would happen to the old tank stand and 

whether it was permissible for one of them to take it. According to Smith, Griglione said 

                                                 -2-                                            6575

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"if it's gone, it's gone," a statement which Smith took to grant permission to take the fuel 

tank stand.   Griglione denied making this statement.  Smith also later stated that he had 

"see[n] other people do it." 

                 The    fuel  tank   stand   disappeared     "on   or   about   July   13."   A   general 

announcement demanding the return of the fuel tank stand was made. Smith returned the 

tank stand on July 26, though he did not notify anyone that he had returned it.                     When 

asked if he taken the tank stand, Smith admitted that he had. 

                 Around the same time, in mid-to-late July, 100 gallons of fuel from the 

Quartz Creek Station disappeared.            Because Smith had admitted taking the tank stand, 

he   became   a   suspect   in   the   fuel's   disappearance.   Carl   High,   the   District   Chief   for 

Maintenance        and   Operations/Public       Facilities,   Highways       and   Aviation     Division, 

contacted      Charlotte    Mushat,    a  Human      Resource     Specialist    in  the   Department      of 

Administration.      Mushat organized a pre-determination hearing for August 7, 2006, at 

which Smith and a union representative would be present. 

                 At the hearing, Smith admitted taking the fuel tank stand but claimed that 

he thought he had received permission from Griglione.                 Because of unresolved issues, 

a second meeting was scheduled for August 17.  At the second meeting, Mushat asked 

Smith for his permission to test his personal fuel tanks to see whether they contained any 

traces   of   the   missing   fuel.   Mushat   explained   that   this   test   would   have   to   occur 

immediately        after  the   hearing.     Smith's      union    representative,      William     Meers, 

recommended   that   Smith   allow   this   testing,   but   Smith   did   not   agree   to   Mushat's 

proposal.      Smith stated that he would permit testing only if it were handled by state 

troopers. When the State declined to involve state troopers, Smith refused testing. Later 

in the meeting, Smith offered to have one 100-gallon tank that had been on the back of 

his truck tested.   The State declined this offer, as Smith had admitted recently emptying 

                                                    -3-                                              6575

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and repainting that tank.        Smith offered to take a polygraph test and asked DOTPF to 

have the state troopers investigate because they were "impartial." 

                After the hearing, because Smith had admitted taking the fuel tank stand 

and because Mushat "was convinced he had stolen the fuel," Mushat recommended to 

Jack Fullerton, the Maintenance Chief, that Smith be dismissed.  Fullerton approved the 

dismissal and authorized Mushat to draft a termination letter for his signature. The letter, 

dated August 24, 2006, stated that "[f]indings conclude that you [Smith] purposely and 

covertly removed the fuel tank and the diesel fuel from state-owned property for your 

own personal use."   Smith was dismissed based on his "past disciplinary record and the 

gross dishonesty of [his] actions that are evident in the July incident." 

                Smith     filed   a  grievance    on   August    31   under    his  union's    collective 

bargaining agreement.        Meers, the union representative who had also been present at 

Smith's   hearings,   forwarded   this   grievance   to   Judy   Porter,   a   Senior   Management 

Consultant at DOTPF, on September 13, 2006. Porter, in a letter prepared and signed by 

Mushat,   denied   the   grievance,   explaining   that   "[d]ismissal   was   both   warranted   and 

correct in light of Mr. Smith's gross misconduct, previous discipline record and gross 

dishonesty of his actions in the July incident."  On November 22, 2006, Meers, the union 

representative,   sent   Smith   a   letter   stating  that   there   was   "not   substance   enough"   to 

warrant pursuing the grievance further and that Smith's grievance had been withdrawn. 

        B.      Discrimination Claim And Lawsuit 

                Smith      filed  a   complaint     for  discrimination      with   the   Alaska    State 

Commission for Human Rights, as well as a charge of discrimination with the United 

States Equal Employment Opportunity Commission (EEOC).                       In his complaint Smith 

alleged racial discrimination because he is an Alaska Native. Mushat replied with a letter 

denying   that   any   discrimination   had   taken   place   and   asserting   that   Smith   had   been 

dismissed because of his theft and dishonesty.            The EEOC rejected Smith's complaint 

                                                   -4-                                             6575

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and closed its file on January 30, 2008, stating that it was "unable to conclude that the 
information obtained establishes violations of the statutes."1 

                Smith filed this lawsuit on April 25, 2008. In his complaint, Smith alleged 

several causes of action:  (1) discrimination, (2) interference with contractual relations, 

(3) intentional infliction of emotional distress, and (4) breach of the implied covenant of 

good faith and fair dealing.       The State responded on May 27, 2008, denying Smith's 


                Smith pointed to three incidents to substantiate his claims. First, he claimed 

that his superior accused him of faking injuries.          Smith's immediate superior was Ken 

Bartlett; Superintendent Carl High was the supervisor who was a level above Bartlett. 

According to Smith, in 2005 High made a comment that Smith was faking injuries. 

Second, Smith pointed to a rumor he heard that, after Smith had been fired, High told the 

crew at the Quartz Creek Station that "we finally got rid of that lazy Indian SOB."  Smith 

claimed he was told of this remark by someone who was not actually present but who had 

heard about the remark.        Smith could not recall the name of the person who told him 

about the rumor. Third, Smith alleged that he was given less desirable work assignments 

based on a discriminatory motive. 

                On March 9, 2009, eleven months after Smith filed his complaint and three 

months   before   trial   was   scheduled   to   begin,   the   State   filed   a   motion   for   summary 

judgment on all of Smith's claims.  The superior court granted summary judgment on all 


        1       The record before us does not contain the State Commission's resolution 

of Smith's claim. 

                                                  -5-                                               6575 

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                We will affirm a lower court's grant of summary judgment if the evidence 

in the record presents no genuine issue of material fact and the moving party is entitled 
to   judgment   as   a   matter   of   law.2 We   review   a   superior   court's   grant   of   summary 

judgment de novo.3      In deciding whether this burden has been met, we will "consider the 

affidavits, depositions, admissions, answers to interrogatories and similar material to 

determine . . . whether any of the [evidentiary] material suggests the existence of any . . . 
triable genuine issues of material fact."4 


        A.      Waiver 

                Smith's   complaint   lists   four   claims   for   relief.  The   first   is   based   on 

discrimination.     There are actually two components to Smith's first claim: a claim for 

hostile working environment and a claim for discriminatory termination. Smith's second 

claim for relief is for tortious interference with contractual relations. The third is a claim 

for intentional infliction of emotional distress.  The fourth is a claim for a breach of the 

implied covenant of good faith and fair dealing.  Smith's statement of points on appeal 

raises a challenge to the superior court's grant of summary judgment on all four claims, 

but his brief discusses only two of them. 

        2       Anderson   v.   Alyeska   Pipeline   Serv.   Co.,   234   P.3d   1282,   1286   (Alaska 


        3       Peterson v. State, Dep't of Natural Res., 236 P.3d 355, 361 (Alaska 2010). 

        4       Broderick v. King's Way, 808 P.2d 1211, 1215 (Alaska 1991) (quoting 

 Walker v. White, 618 P.2d 561, 563 (Alaska 1980)).              Alaska Civil Rule 56(c) provides 
that "[j]udgment shall be rendered forthwith if the pleadings, depositions, answers to 
interrogatories, and admissions on file, together with the affidavits, show that there is no 
genuine issue as to any material fact and that any party is entitled to a judgment as a 
matter of law." 

                                                  -6-                                            6575

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                We have explained that "[f]ailure to argue a point [of law] constitutes an 
abandonment of it."5        More specifically, we have held that "[w]hen, in the argument 

portion of a brief, a major point has been given no more than cursory statement, we will 
not consider it further."6     The argument portion of Smith's brief contains three sections: 

(1) "There Were Genuine Issues of Material Fact"; (2) "Smith Made A Prima Facie Case 

of Racial Discrimination"; and (3) "The State Breached The Covenant Of Good Faith 

And Fair Dealing."         The first section argues generally that summary judgment should 

seldom be granted.        The second section discusses Smith's discriminatory termination 

claim.    The   third   section   restates   the   allegation   that   the   State   breached   the   implied 

covenant of good faith and fair dealing by wrongfully terminating Smith and by racially 

discriminating against him. 

                Because Smith's brief does not discuss his claims for interference with 

contractual relations or his claim for intentional infliction of emotional distress, we do 

not address them. Additionally, though Smith's complaint alleged discrimination "on the 

basis   of   race,   national   origin,   and   physical   disability,"   Smith's   brief   only   discusses 

discrimination on the basis of his status as an Alaska Native and does not address the 
claim for discrimination based on disability.7           We therefore confine our review to the 

        5       State v. O'Neill Investigations, Inc., 609 P.2d 520, 528 (Alaska 1980). 

        6       Id. 

        7       Federal   courts   have   held   that   Native   Americans   are   protected   both   by 

Title VII's prohibition of discrimination on the basis of race and by its prohibition of 
discrimination      on   the  basis   of  national    origin.   BARBARA       T.  LINDEMANN,   PAUL 
ed.   2007)   ("Native   Americans   working   for   nontribal   employers   outside   the   tribal 
reservation or property are protected under Title VII from discrimination on the basis of 
national origin . . . .    Some courts have also held that Native Americans are protected 
from race discrimination under . . . Title VII.").             When applying the Alaska Human 

                                                   -7-                                                6575 

----------------------- Page 8-----------------------

claims of error discussed in Smith's brief.8 

        B.      Discrimination 

                Smith alleges that he was terminated because of discriminatory animus. 

The Alaska Human Rights Act, codified at AS 18.80.220, prohibits an employer from 

discriminating against a person in a "term, condition, or privilege of employment because 
of    the  person's    race."9   We    have    recognized     a  private   cause    of  action   under 

AS    18.80.220.       Title    VII  of  the   Civil  Rights    Act   of  1964   similarly    prohibits 

discrimination against any individual with respect to the "terms, conditions, or privileges 
of employment, because of such individual's race."11              Enforcement of Title VII must 

begin through an administrative filing with the EEOC; if the EEOC declines to pursue 
the complaint, the complainant can seek relief judicially.12           Smith met this requirement 


Rights Act, we have generally treated discrimination against Native Americans as a 
matter of racial discrimination.  See Miller v. Safeway, Inc., 102 P.3d 282, 291 (Alaska 

        8       Union Oil v. State, Dep't of Revenue, 677 P.2d 1256, 1259 n.6 (Alaska 

1984) (noting that issues included in a statement of points on appeal but not discussed 
in appellant's brief are considered abandoned);see also Wetzler v. Wetzler, 570 P.2d 741, 
742 n.2 (Alaska 1977) ("[We] consider as abandoned questions set forth in the Points but 
not argued in [appellant's] brief."). 

        9       AS 18.80.220(a)(1). 

        10      Ratcliff v. Security Nat'l Bank, 670 P.2d 1139, 1142 (Alaska 1983);Loomis 

v. Schaefer, 549 P.2d 1341, 1343 (Alaska 1976). 

        11      42 U.S.C.  2000e-2(a)(1) (2006). 

        12      See generally National R.R. Passenger Corp. v. Morgan, 536 U.S. 101 


                                                  -8-                                            6575

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by filing his lawsuit within 90 days of the notice that the EEOC had rejected his claim.13 

                 To determine whether an employment action was discriminatory, we have 

adopted a three-part test: 

                 Because it is usually impossible for an employee to prove that 
                 the actions of an employer were motivated by discriminatory 
                 intent, we have adopted the three-part pretext analysis that 
                 involves      a  series    of   shifting    burdens     for   claims    of 
                 employment discrimination where there is no direct evidence 
                 of discriminatory intent, known as the McDonnell Douglas 

First,   the   employee   must   establish   a   prima   facie   case   of   discriminatory   treatment.15 

Second, the burden shifts, and the employer must offer a legitimate nondiscriminatory 
reason for its action.16     Third, the burden shifts again, and the employee has the burden 

of proving that this reason was pretextual.17 

                 There are four elements to a prima facie case of employment discrimination. 

The plaintiff must show that (1) the plaintiff was a member of a protected class under the 

statute; (2) the plaintiff was qualified for the job; (3) the plaintiff was adversely affected 

by an employment decision despite those qualifications; and (4) others, not within the 

        13       42 U.S.C.  2000e-16(c) (2006). 

        14      Peterson v. State, Dep't of Natural Res., 236 P.3d 355, 364 (Alaska 2010) 

(internal quotation marks omitted); see also Brown v. Wood, 575 P.2d 760, 770 (Alaska 
1978) (adopting the test used in McDonnell Douglas Corp.  v. Green, 411 U.S. 792 

        15      Peterson, 236 P.3d at 364. 

        16      Id. at 365. 

        17      Id. 

                                                    -9-                                              6575

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protected class, were treated more favorably.18          Smith does not meet this initial burden. 

He does belong to a protected class of Native Americans, satisfying the first element. As 

to the second element, Smith has asserted his own qualifications in a deposition, but he 

has not provided performance reviews or other materials to corroborate that claim.  The 

State argues that Smith's theft rendered him unqualified for his job.              But the State also 

has not presented performance reviews or other assessments of Smith's qualifications 

prior   to   the   time   of   his   alleged   theft. Accordingly,   there   remain   genuine   issues   of 

material fact as to Smith's qualifications.         Smith satisfies the third element because he 

was adversely affected by the termination decision.  But Smith fails to satisfy the fourth 

element of the prima facie test because he cannot demonstrate that employees outside his 

protected class were treated more favorably.            Smith's replacement was also an Alaska 

Native.     And in 2003 DOTPF dismissed a white male employee for a theft similar to 

Smith's.  Because Smith cannot meet the first part of the three-part McDonnell Douglas 

test, we need not examine the second and third parts. 

        C.      Breach Of The Implied Covenant Of Good Faith And Fair Dealing 

                Smith claims that DOTPF breached the covenant of good faith and fair 
dealing that is implied in all contracts in Alaska.19  This covenant has a subjective and 

objective component:  "A party must act in subjective good faith, meaning that it cannot 

act to deprive the other party of the explicit benefits of the contract, and in objective good 

faith, which consists of acting in a manner that a reasonable person would regard as 
fair."20 The subjective prong examines the employer's motives. The employer may take 

an action that is otherwise legitimate but violates the covenant if the action is meant to 

        18      Miller v. Safeway, 102 P.3d 282, 291 (Alaska 2004). 

        19      Casey v. Semco Energy, Inc., 92 P.3d 379, 384 (Alaska 2004). 

        20      Id. 

                                                  -10-                                               6575 

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deprive the employee of contractual benefits.21            For example, in Mitford v. de Lasala, 

we held that an employer violated the implied covenant when it discharged an employee 
in order to prevent him from collecting on a profit-sharing program.22   The objective 

prong tests whether the employer's conduct was objectively fair:  "Disparate employee 

treatment, terminations on unconstitutional grounds, and firings that violate public policy 
are examples of actions that may violate the objective aspect of the implied covenant."23 

                Smith   argues   that   DOTPF   breached   the   implied   covenant   by   racially 

discriminating   against   him   and   by   falsely   accusing   him   of   theft. We   have   already 

addressed the merits of Smith's claim that he was racially discriminated against.  Smith 

has not established a prima facie case of racial discrimination; therefore, he cannot claim 

that DOTPF breached the implied covenant of good faith and fair dealing by racially 

discriminating against him. As to the accusations of theft, Smith admitted taking the fuel 

tank stand.     There was no "false accusation," and         Smith does not contest that this was 

an adequate ground to terminate him.           DOTPF did accuse Smith of taking 100 gallons 

of   fuel,   but   Smith   has   offered   no   evidence   that   DOTPF's   investigation   was   unfair. 

Indeed, DOTPF offered to test Smith's personal fuel tanks, a test that presumably would 

have exonerated Smith if he was innocent.  Even if DOTPF was in fact mistaken about 

        21      Ramsey v. City of Sand Point, 936 P.2d 126, 133 (Alaska 1997). 

        22      666 P.2d 1000, 1007 (Alaska 1983). 

        23      Pitka v. Interior Reg'l Hous. Auth., 54 P.3d 785, 789 (Alaska 2002).  It 

should be noted that, while the question whether the implied covenant was breached is 
a question of fact, trial courts can award judgment as a matter of law on these claims. 
See Holland v. Union Oil Co. of California, Inc., 993 P.2d 1026, 1032-33 (Alaska 1999) 
("We have held that whether an employer breached the covenant of good faith and fair 
dealing is usually a question for the trier of fact.        We have not held, however, that we 
could never conclude that as a matter of law an employer did not breach the implied 
covenant of good faith and fair dealing when it demoted an employee."). 

                                                  -11-                                            6575

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the theft of the fuel, Smith does not adduce facts reasonably permitting an inference that 

DOTPF's investigation was unfair or conducted in bad faith.  In Holland v. Union Oil, 

we explained that an employee's "mere denial of any wrongdoing is insufficient in and 
of itself to avoid summary judgment on his claim."24  Accordingly, there are no genuine 

issues of material fact as to whether DOTPF breached the implied covenant of good faith 

and fair dealing. 


              We AFFIRM the superior court's order granting summary judgment. 

       24     993 P.2d at 1036. 

                                           -12-                                        6575 
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