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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Rude v. Cook Inlet Region, Inc. (12/21/2012) sp-6737
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, email
corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
ROBERT W. RUDE and NEW )
ALLIANCE FOR THE FUTURE OF ) Supreme Court Nos. S-13823/13943
CIRI, INC., ) (Consolidated)
)
Appellants, ) Superior Court No. 3AN-08-07998 CI
)
v. ) O P I N I O N
)
COOK INLET REGION, INC., ) No. 6737 - December 21, 2012
)
Appellee. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Frank A. Pfiffner, Judge,
Peter G. Ashman and Morgan Christen, Judges pro tem.
Appearances: Fred W. Triem, Petersburg, for Appellants.
Jahna M. Lindemuth and Katherine E. Demarest, Dorsey &
Whitney LLP, Anchorage, and William D. Temko, Munger,
Tolles & Olson LLP, Los Angeles, California, for Appellee.
Before: Carpeneti, Chief Justice, Fabe, Winfree, and
Stowers, Justices.
FABE, Justice.
I. INTRODUCTION
In 2008 Robert Rude, then a sitting Cook Inlet Region, Inc. (CIRI) director,
and three other candidates ran as an independent "New Alliance" slate for positions on
the CIRI board of directors. Shortly before the election, CIRI filed suit, claiming that the
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New Alliance proxy materials contained materially misleading statements. Rude and his
co-defendants counterclaimed, alleging that CIRI's election procedures were unfairly
tilted toward the interests of the current board and that the directors had improperly
refused to disclose shareholder and corporate information to Rude and the other New
Alliance candidates. The superior court granted summary judgment on all claims and
counterclaims in favor of CIRI. As a result, the New Alliance proxies were voided, and
Rude was not re-elected to the board. Rude appeals the rulings both on CIRI's claims
and his counterclaims. Although Rude's claims are now technically moot, we address
them insofar as they potentially affect prevailing party status. Because no issue of
material fact exists as to the claims at issue and because CIRI is entitled to judgment as
a matter of law, we affirm the superior court.
In a separate appeal, Rude challenges four other rulings of the superior
court. First, he challenges the award of attorney's fees to CIRI. Second, he challenges
the superior court's denial of his Rule 60(b) motion for relief from judgment. Third, he
challenges the superior court's exclusion of exhibits filed with that motion. Finally, he
challenges the superior court's dismissal of New Alliance as a party to this suit. Because
the superior court did not abuse its discretion in any of these rulings, we affirm the
superior court in all respects.
II. FACTS AND PROCEEDINGS1
A. Background
Cook Inlet Regional, Inc. (CIRI) is an Alaska Native Claims Settlement Act
(ANCSA) corporation organized under Alaska law. It is governed by a 15-member
board of directors, serving staggered three-year terms. Each year five director positions
1 When reviewing a grant of summary judgment, we construe the facts in the
light most favorable to the non-moving party. See McCormick v. City of Dillingham , 16
P.3d 735, 738 (Alaska 2001).
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are up for election by the shareholders, and each year the board of directors recommends
five candidates for the shareholders' vote and solicits proxies2 for those five candidates.
In addition to the board's recommended slate, other candidates often run.
B. Board Endorsement And Formation Of New Alliance Slate
For the 2008 elections, Robert Rude, as well as Dorothy J. Anagick, Chris
Kiana, and Mike Thomas, ran for seats on the board.3 Rude was at that time an
incumbent director whose term was set to expire at the annual meeting at which elections
would be held. The other three candidates were not incumbent directors. All four
applied for board endorsement. At a March 2008 board meeting, the board selected five
candidates, including Rude and Thomas, to be the board-recommended slate.4 One week
later, the board voted to reconsider its selections and selected a new slate, this time
without Rude or Thomas.5
Under CIRI's rules, individuals who wish to run for the board of directors,
but who are not included in the board-endorsed slate, may still be included in CIRI's
proxy materials. Such individuals are listed, along with their photographs and
2 3 Alaska Administrative Code (AAC) 08.365(12) (2012) defines proxy as
"a written authorization which may take the form of a consent . . . signed by a
shareholder . . . giving another person power to vote with respect to the shares of the
shareholder."
3 Anagick, Kiana, and Thomas were parties to the initial lawsuit in this case
but have since been dismissed.
4 The board's initial slate included, in addition to Rude and Thomas,
incumbent directors Roy Huhndorf, Penny Carty, and Patrick Marrs.
5 The revised slate included incumbent directors Penny Carty, Roy Huhndorf,
Patrick Marrs, and B. Agnes Brown, as well as Katrina Jacuk.
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background information, in CIRI's proxy statements;6 their names are listed on the
proxies; and their information and personal statements are included in the CIRI voter
guide. In 2008 three "other candidates" opted to be included in CIRI's proxy materials.
Rude, along with Thomas, Kiana, and Anagick, chose not to be included in CIRI's proxy
materials, instead opting to run as a slate under the aegis of the New Alliance for the
Future of CIRI, Inc. (New Alliance).
C. Proxy Solicitation
On March 28, 2008, New Alliance began soliciting proxies on behalf of the
four candidates and for a New Alliance proposal for a special dividend of $50 per share.7
Around the same time, Rude sent an email to CIRI President and Chief Executive Officer
Margie Brown requesting that CIRI include in its proxies either New Alliance's proposal
for a special dividend or a statement of how the CIRI board would vote its proxies on
such a proposal. Brown declined both requests. Brown also declined Rude's request for
the email addresses of each CIRI shareholder.
Shortly after New Alliance sent its first proxy materials, CIRI filed a
complaint with the Division of Banking, Securities and Corporations, alleging that New
Alliance's proxy solicitations contained false and misleading statements concerning,
most importantly, CIRI's alleged failure to pay adequate dividends in the past. While
CIRI, New Alliance, and the Division communicated back and forth regarding CIRI's
6 A proxy statement is "a letter, publication, press release, advertisement . . .
or other communication of any type which is made available to shareholders under
circumstances reasonably calculated to result in the procurement, withholding, or
revocation of a proxy." 3 AAC 08.365(14).
7 CIRI's annual shareholder meeting, at which elections would be held, was
scheduled for June 7, 2008, with proxies due May 30.
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complaint to the Division,8 New Alliance continued to solicit proxies through three
additional mailings and to maintain a website explaining its campaign for the four
candidates and for a special dividend.
These additional New Alliance mailings, as well as the New Alliance
website, contained a number of statements which CIRI believed to be false or
misleading. These statements, described in more detail below, concerned, among other
things, management compensation, allegations that CIRI had "liquidated" or sold
significant landholdings, shareholders' rights under Alaska law and ANCSA, CIRI's
election procedures, and CIRI's dividend policy. In CIRI's words, the statements as a
whole gave the false impression that "[a]lthough CIRI as a corporation has done well in
earning a profit over the years, the CIRI Board majority (and management) have refused
to share the corporation's success with the shareholders, instead keeping the vast
majority of the net profits for themselves."
Meanwhile, starting in April 2008, CIRI began soliciting its own proxies.
CIRI's first proxy solicitation included a proxy statement, including biographies of the
board-endorsed candidates as well as three "other candidates." The proxy statement also
included information about continuing directors (i.e., those not up for re-election) and
corporate information, including information about the current board of directors and
election procedures. The enclosed proxy included the names of the five board-
8 The alleged misstatements in New Alliance's first mailer - and the
procedural history of the dispute concerning those alleged misstatements - are not at
issue in this appeal. Because CIRI initially pursued its complaints concerning alleged
misrepresentations in New Alliance's first mailer with the Division of Banking,
Securities and Corporations, the superior court found that those claims upon which the
Division ruled must be pursued as an administrative appeal, and therefore converted that
portion of CIRI's complaint into an administrative appeal. That appeal has apparently
been stayed pending the resolution of this case.
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recommended candidates, as well as the three "other candidates" and a blank line labeled
"Write-In Candidates." The proxy did not include a space for shareholders to vote on
New Alliance's proposed special dividend.
CIRI's second proxy mailing, mailed approximately one week after the
first, included a voter guide with more in-depth information about the eight candidates
on the proxy, along with CIRI's annual financial report, a flyer in support of the board-
endorsed candidates, and another proxy form with the same information as the first.
CIRI subsequently sent two more mailings that included proxy forms and information
supporting its endorsed candidates. Throughout its proxy mailings, CIRI touted its
"Early Bird Prizes" - cash prize drawings for shareholders who returned proxies "for
any proxy holder or candidate" before the May 30 deadline.
D. The Lawsuit And The Election
On June 5, two days before the scheduled shareholder meeting, CIRI filed
suit against Rude, Anagick, Kiana, Thomas, and New Alliance, alleging that their proxy
materials contained numerous false and misleading statements. The suit sought to void
the New Alliance proxies.
Before the New Alliance candidates could respond, the shareholder meeting
was held, and Rude and Thomas had the most votes to win election to the board. At the
meeting, Thomas proposed the special dividend of $50 per share, but it was defeated
when CIRI voted its proxies against the measure.
Following the election, the New Alliance candidates answered CIRI's
complaint and filed numerous counterclaims. In its counterclaims, New Alliance9
alleged generally that CIRI's election procedures were unfair because CIRI favored its
9 We refer to the New Alliance candidates collectively as New Alliance,
except where more specificity is required.
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slate of candidates over the New Alliance candidates. New Alliance also counterclaimed
that CIRI's proxy forms were deficient because CIRI mailed the first forms before it
distributed its financial report, CIRI failed to put enough slots on the proxies for write-in
candidates, CIRI omitted the names of the New Alliance candidates from its proxy forms
and materials, and CIRI failed to inform shareholders of the New Alliance special
dividend proposal or give shareholders a way to vote on it. Rude also alleged that CIRI
omitted his name from proxy materials despite the fact that he was a current director, and
that this omission amounted to de facto removal from the board. Finally, New Alliance
counterclaimed that CIRI improperly refused the New Alliance candidates' requests for
lists of shareholders' names and phone numbers.10
CIRI moved for summary judgment on its claims against New Alliance.
New Alliance moved for partial summary judgment on its counterclaims against CIRI,
and CIRI filed a cross-motion for partial summary judgment on the counterclaims. The
superior court granted summary judgment in favor of CIRI on both sets of claims.
E. CIRI's Motion For Summary Judgment
In her ruling on CIRI's motion for summary judgment on the claims against
New Alliance, pro tem Superior Court Judge Morgan Christen found that five sets of
statements in New Alliance's proxy solicitation materials were misleading as a matter
of law.
First, the superior court found materially misleading New Alliance's claims
that CIRI's senior managers' compensation had increased by 32% between 2006 and
2007 (as opposed to a 9.5% increase in shareholder dividends). The superior court
reasoned that these claims were misleading because the New Alliance numbers had
10 In its counterclaims, styled as 56 separate claims, New Alliance suggested
several other possible counterclaims which are not germane to this appeal and so are not
described here.
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counted accruals under a long-term incentive plan that "were not fully vested and may
never be paid." The superior court further found that these statements were material as
a matter of law "because a reasonable shareholder would consider it important when
deciding how to vote if CIRI management's pay increased by 32% in one year."
Second, the superior court found materially misleading New Alliance's
claims that CIRI was being "liquidated" and that CIRI land entitlements had been
reduced by 700,000 acres of surface and 1,000,000 acres of subsurface estate. The
superior court determined that these statements were misleading because there was no
evidence in the record to support New Alliance's contention that CIRI was being
liquidated or selling off such significant landholdings. The superior court further found
that New Alliance did not have a good-faith basis for such a belief. The superior court
found that these statements were material as a matter of law "because a reasonable
shareholder would of course consider it important when deciding how to vote if he/she
understood that 700,000 acres of surface estate and 1,000,000 acres of subsurface estate
had been liquidated without explanation."
Third, the superior court found materially misleading New Alliance's
statement that
Section 2(b) of ANCSA says Natives shall have maximum
participation in decisions affecting their rights and property.
We believe shareholder participation is lacking in our
corporation . . . . Shareholders do not get to vote on: the sale
of large ANCSA land and natural resource properties; large
cash donations; the granting of CIRI owned stock to senior
executives; political donations; large payments made to
lobbyists and consultants; nor do they get to vote on
legislation that would affect the rights or property. We want
to change this!
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The superior court concluded that these statements were misleading because they
suggested that shareholders had a right to participate in CIRI's management decisions
and that "the board [was] improperly denying shareholders' input into corporate
governance." Instead, the superior court noted, "under Alaska law, the board of
directors, not shareholders[,] has the right to make . . . management and operational
decisions." The superior court found that New Alliance's statements to the contrary
were material because "[t]here is a substantial likelihood that a reasonable shareholder
would consider the statement about shareholders' voting rights important in deciding
how to vote."
Fourth, the superior court found materially misleading New Alliance's
statements that "New Alliance candidates have to pay their own election expenses" and
"[i]ndependent candidates . . . have to pay their own campaign expenses which often cost
an independent candidate tens of thousands of dollars and, if elected, they are not
reimbursed their campaign expenses." The superior court concluded that these
statements were misleading because the New Alliance candidates could have had some
of their campaign expenses paid for if they had chosen to follow CIRI's procedures for
being included in CIRI's proxy materials as "other candidates" and because CIRI did pay
for some of the expenses for Rude to attend an informational meeting for shareholders
in Washington. The superior court found that these statements were material as a matter
of law because there was "a substantial likelihood that a reasonable shareholder would
consider th[ese] statement[s] important in deciding how to vote . . . [because they]
perpetuate[d] the theme that minority board members are being treated unfairly by the
majority."
Fifth, the superior court found materially misleading New Alliance's
statements that "never again will a hardcore minority of 6 directors control our
corporation." Although New Alliance claimed it was referring to one faction's de facto
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control of the board, the superior court concluded that this statement was misleading
because "[a] minimum of eight of the fifteen directors is required to command a
majority." The superior court found that the statement was material as a matter of law
because "there [was] a substantial likelihood that a reasonable shareholder would
consider this statement important in deciding how to vote . . . because it implies that a
'super minority' is somehow improperly controlling the corporation."
The superior court concluded that because the misrepresentations in New
Alliance's proxy materials were sufficiently "egregious," the proxies given to New
Alliance "must be declared void." Because the New Alliance proxies were declared
void, Rude and Thomas, who had previously collected enough proxies to win election
to the board of directors, were removed from their seats.
F. New Alliance's Motion For Summary Judgment And CIRI's Cross-
Motion
On the same day that it granted CIRI's motion for summary judgment, the
superior court also granted CIRI's cross-motion for partial summary judgment on New
Alliance's counterclaims and denied New Alliance's motion for partial summary
judgment. Based on its understanding of New Alliance's motion, the superior court
identified eight claims in the motions before it, of which only the first five are raised in
this appeal. Those claims were whether CIRI violated Alaska securities law and
common law proxy rules by:
(1) sending out its proxy statement and proxy to the
shareholders before sending out its annual report;
(2) failing to comply with the proxy requirements under
3 AAC 08.335;
(3) failing to disclose material information on its proxy,
including the names and information of all the candidates
who were running for the board;
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(4) failing to provide sufficient space on the proxy for the
shareholders to write in the names of other candidates; [and]
(5) failing to disclose New Alliance's proposal for a
special dividend and to provide a way for shareholders to
vote on it; . . . .
As to the first issue, the superior court noted:
Alaska proxy regulation 3 AAC 08.345 provides:
(a) The solicitation of proxies on behalf of the board for
an annual meeting must be preceded or accompanied by the
annual report for the corporation's last fiscal year, unless
(1) the solicitation is made on behalf of the board
before the annual report is available;
(2) solicitation is being made at the time in
opposition to the board; and
(3) the board's proxy statement includes an
undertaking to furnish the annual report to all shareholders
being solicited at least 50 days before the date of the annual
meeting. (Emphasis added by superior court.)
The superior court found that all three of these requirements had been met.
The superior court noted that CIRI had filed a sworn statement that its financial statement
was not yet ready when CIRI sent its first proxy mailing. The superior court found that,
although New Alliance asserted that CIRI had the necessary information to publish its
annual report before it solicited proxies, there was no evidence to support this, and the
superior court therefore determined that CIRI had met the first prong. The superior court
then noted that there was no dispute that CIRI had satisfied the second prong. Finally,
the superior court noted that CIRI's initial proxy statement included an undertaking to
furnish the annual report to shareholders at least 50 days before the annual meeting.
Although New Alliance alleged that voters should not be asked to vote before they have
information that a reasonable shareholder would view as significant in deciding how to
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vote, the superior court found that Alaska law specifically permitted CIRI to solicit
proxies in response to New Alliance's solicitation and thus granted summary judgment
to CIRI on this issue.
As to the second and third claims, New Alliance contended that CIRI's
proxies should be voided because the proxy statement and voter guide failed to disclose
the names of all candidates running for the board and because they failed to disclose that
Rude was a member of the board of directors running for re-election. But the superior
court concluded that Alaska proxy regulation 3 AAC 08.345(b),11 which governs proxy
statements, did not require CIRI to do either and that CIRI had in fact provided the New
Alliance candidates a way to be included in the proxy materials. Further, in its cross-
motion, CIRI argued that its proxy fully met the requirements set out in 3 AAC 08.335,12
11 3 AAC 08.345 provides:
(b) The solicitation of proxies on behalf of the board must
be preceded or accompanied by a dated, written proxy
statement including, but not limited to, the following:
(1) if action is to be taken on the election of
directors, a description of each nominee of the board who has
consented to act if elected and of each director whose term of
office will continue after the shareholders' meeting . . . .
(Emphasis added.)
12 3 AAC 08.335 provides:
(c) The proxy must
(1) indicate that the proxy is solicited on behalf of
the board or, if solicited other than by the board, indicate the
identity of the persons on whose behalf the solicitation is
made;
(2) provide a specifically designated blank space for
dating the proxy; and
(continued...)
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and the superior court agreed. The superior court therefore granted summary judgment
to CIRI on this claim.
On the same claim, New Alliance argued that CIRI violated two common
law proxy rules - the Equal Prominence Rule and the Buried Facts Rule - by giving
Rude less prominence than other directors in CIRI proxy materials. The superior court
rejected this argument for two reasons. First, the court noted that "when the legislature
enacts a statute to govern a matter previously addressed by the common law, the statute
controls," and therefore the proxy regulations discussed above, not common law rules,
controlled. Second, the court found that even if the common law rules were applicable,
Rude was given the same treatment as other current directors in those parts of the proxy
12(...continued)
(3) provide a means for the shareholder to specify
by boxes a choice between approval or disapproval of each
matter or group of related matters identified in the proxy as
intended to be acted upon, other than the election of directors.
. . . .
(e) A proxy that provides for the election of directors must
(1) set out the names of the nominees for whom the
proxy is solicited; and
(2) clearly provide one of the following:
(A) a box opposite the name of each nominee
which may be marked to indicate that authority to vote for
that nominee is withheld;
(B) an instruction that the shareholder may
withhold authority to vote for a nominee by lining through or
otherwise striking out the name of that nominee;
(C) a "ballot" type of selection in which the
shareholder is permitted to award votes to selected nominees
of the shareholder's choosing.
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materials applying equally to all directors. And because he was not a continuing
director, a board-endorsed candidate, or an "other candidate," he was not included in
those sections. The superior court therefore concluded that CIRI did not violate the
Equal Prominence Rule or the Buried Facts Rule.
As to the fourth claim, New Alliance argued that the write-in section of
CIRI's proxies was insufficient and misleading because it only contained one blank line
following the term "Write-In Candidates." The superior court, though, found no legal
authority for New Alliance's claim that proxies were required to have multiple write-in
slots and further found that CIRI's use of the plural "candidates" would lead a reasonable
voter to understand that it was permissible to write in more than one name. The superior
court consequently found that CIRI's write-in section complied with Alaska law.
Finally, the superior court concluded that CIRI's proxy was not required
to disclose New Alliance's proposal for a special dividend, nor to provide a way for
shareholders to vote on it. The superior court concluded that the Alaska Securities Act
required CIRI "to include a proposal in its proxy statement when the board intends to
introduce a resolution to the shareholders" but that "[t]hird-party proposals which may
or may not be introduced at an annual meeting are not required to be in a corporation's
proxy and proxy statement." Accordingly, the court concluded that CIRI did not have
to include New Alliance's proposal in its proxy materials.
Although granting summary judgment to CIRI on CIRI's claims and on all
of the counterclaims at issue in the cross-motions for partial summary judgment, the
superior court issued a further order clarifying that it had dismissed "only those
counterclaims that were the subject of the motion practice, not all of the defendants'
counterclaims." Nevertheless, Anagick, Thomas, and Kiana entered a stipulation and
order dismissing with prejudice all counterclaims against CIRI on behalf of themselves
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and New Alliance. Accordingly, Robert Rude was left as the only defendant and
counterclaimant.
G. CIRI's Final Motions For Dismissal And Summary Judgment
In August 2009, pro tem Superior Court Judge Peter G. Ashman, who had
taken the case over from Judge Christen, ordered Rude to file a statement outlining any
claims Rude had against CIRI which remained live. When Rude failed to respond, CIRI
moved for dismissal, and Rude opposed. The superior court dismissed Rude's
counterclaims for failure to comply with the court's August 2009 order. The superior
court also found that CIRI was entitled to dismissal "on substantive grounds," noting that
Judge Christen's order on partial summary judgment had decided all of Rude's claims
relating to CIRI's election procedures and that Rude's remaining claims concerning his
demand for shareholders' information were now moot because Rude had been removed
as a director.
Rude moved for reconsideration of the dismissal, and the superior court,
though noting that Rude had offered no explanation for his failure to respond to the
August 2009 order, granted the motion, specifying that it would treat CIRI's motion to
dismiss as a motion for summary judgment. The superior court limited briefing to what
it found were the only four remaining issues, namely Rude's claims that (1) CIRI
unfairly took sides in elections and improperly used its resources to support its
candidates; (2) "CIRI's policies and practices are improperly intended to entrench
incumbents"; (3) CIRI refused to give Rude shareholder addresses and email addresses,
information to which he was entitled as a director; and (4) CIRI refused to give Rude
other corporate information to which he was entitled as a director. The superior court
gave CIRI an opportunity to supplement its motion as appropriate for summary judgment
and for Rude to respond.
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In January 2010, after hearing oral argument, Superior Court Judge
Frank A. Pfiffner, who had taken over the case from Judge Ashman, issued an oral
decision granting CIRI's motion for summary judgment on the remaining counterclaims.
As to the first two issues, that CIRI took sides and their election policies
entrench incumbents, the superior court concluded that they had been disposed of by
Judge Christen's earlier order on CIRI's cross-motion for partial summary judgment.
The superior court determined that once summary judgment was granted in favor of CIRI
regarding the specific claims of unfair election practices, the more general claims were
unsupported and fell away. As to the second two issues, the superior court concluded
that they were moot. The superior court noted that AS 10.06.450(d) did grant directors
the right to certain corporate information but found that because Rude's proxies were
invalid, he did not win the election and so was not a director.
With regard to a fifth issue, that Rude was entitled to certain corporate
information as a shareholder, the superior court rejected this argument for a number of
reasons. First, because this issue was outside the scope of the prior order outlining the
remaining issues, the court found that Rude had abandoned the claim. Second, the
superior court found that Rude had not made any requests in his capacity as a
shareholder, but instead only in his capacity as a director. Finally, the superior court
determined that even if Rude made requests as a shareholder, any requests did not meet
the statutory requirement of shareholder requests for information because the requests
did not state "with particularity the purpose of the inspection, identifying that it was a
proper purpose and that the documents were connected to an otherwise proper purpose"
as required under AS 10.06.430(b). Although the superior court noted that Judge
Christen had refused to grant summary judgment as to several of CIRI's claims that
statements in the New Alliance proxy materials were misleading, the court, with CIRI's
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agreement, concluded that there were no issues remaining and ordered CIRI to draft a
final judgment. Rude moved for reconsideration, and it was denied.
H. Post-Judgment Proceedings
The superior court ordered Rude to pay $43,773.80 in attorney's fees and
$5,441.14 in costs, for a total monetary judgment of $49,214.94.
After filing a notice of appeal, Rude filed a motion for relief from judgment.
Rude attached to his motion over 30 new exhibits. CIRI opposed the motion and moved
to strike the new exhibits. The superior court granted CIRI's motion to strike the new
exhibits, finding that they were irrelevant to the motion, untimely, and unauthenticated.
The superior court also denied Rude's motion for relief from judgment, ruling that
Rude's motion was not based on a mistake of law or newly discovered evidence as
required by Alaska Civil Rule 60(b), but was rather a rehash of his earlier arguments and
an attempt to introduce evidence that was unauthenticated and that had been available
for timely introduction during the litigation.
Rude has filed two appeals. In the first he appeals many of the substantive
matters decided in the superior court's three orders on summary judgment. In the second
he challenges four procedural matters: (1) the superior court's award of costs and
attorney's fees to CIRI; (2) the superior court's denial of Rude's Rule 60(b) motion for
relief from judgment; (3) the superior court's order striking exhibits attached to the 60(b)
motion; and (4) the superior court's entry of a stipulation dismissing the New Alliance
corporation as a party.
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III. STANDARDS OF REVIEW
We review grants of summary judgment de novo.13 In reviewing a grant
of summary judgment, we will "determine whether any genuine issue of material fact
exists and whether the moving party is entitled to judgment on the law applicable to the
established facts."14 "Mere assertions of fact in pleadings and memoranda are
insufficient for denial of a motion for summary judgment."15 We "may affirm the
superior court on any basis supported by the record, even if that basis was not considered
by the court below or advanced by any party."16
We apply "the deferential 'reasonable basis' standard of review . . . where
a question of law implicates [an] agency's expertise as to complex matters or as to the
formulation of fundamental policy."17 "[W]here an agency interprets its own regulation
. . . a deferential standard of review properly recognizes that the agency is best able to
discern its intent in promulgating the regulation at issue."18
13 See Yost v. State, Div. of Corps., Bus. & Prof'l Licensing, 234 P.3d 1264,
1272 (Alaska 2010).
14 Wright v. State, 824 P.2d 718, 720 (Alaska 1992).
15 State, Dep't of Highways v. Green, 586 P.2d 595, 606 n.32 (Alaska 1978).
16 Gilbert M. v. State, 139 P.3d 581, 586 (Alaska 2006).
17 Rose v. Commercial Fisheries Entry Comm'n , 647 P.2d 154, 161
(Alaska 1982).
18 Id.
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We will not reverse an award of attorney's fees,19 a denial of a Rule 60(b)
motion for relief from judgment,20 a decision regarding the admissibility of evidence,21
or a superior court's entry of a voluntary dismissal22 absent an abuse of discretion. "An
abuse of discretion exists when we are left with a definite and firm conviction that an
error has been made."23
IV. DISCUSSION
These two appeals encompass a total of 12 primary issues. Rude first
brings six claims relating to CIRI's conduct of the election for the board of directors.
The next two claims concern CIRI's refusal to turn over to Rude information about CIRI
shareholders. Rude then argues that the superior court erred in granting summary
judgment on CIRI's claims that the New Alliance proxy materials contained material
misrepresentations. In his second appeal, Rude argues that the superior court erred by
awarding CIRI attorney's fees. Finally, Rude brings three procedural claims. We
address these arguments in turn.
19 See Valdez Fisheries Dev. Ass'n, Inc. v. Alyeska Pipeline Serv. Co., 45 P.3d
657, 672 (Alaska 2002).
20 See Cook v. Cook, 249 P.3d 1070, 1077 (Alaska 2011).
21 See Carroll v. Carroll, 903 P.2d 579, 582 n.7 (Alaska 1995).
22 See Dome Labs. v. Farrell, 599 P.2d 152, 155-56 (Alaska 1979).
23 Marsingill v. O'Malley , 128 P.3d 151, 155 (Alaska 2006).
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A. Rude's Counterclaims
1. Most of Rude's claims are technically moot and reviewable only
for the purpose of determining prevailing party status for an
award of attorney's fees.
CIRI argues that nearly all of Rude's election claims are moot because,
owing to numerous delays in this case, the seats up for election in 2008 have since come
up for election again. Consequently, Rude's requested remedy - that CIRI's proxies
for the 2008 election be voided - can no longer provide him any relief.
"A claim is moot where . . . it has lost its character as a present, live
controversy, that is, where a party bringing the action would not be entitled to any relief
even if he or she prevailed."24 In O'Callaghan v. State, the appellant sought to overturn
the 1990 governor's election and have the State hold a new election.25 By the time the
appeal reached this court, the terms of office of the candidates elected in the 1990
election had already run, and we therefore held that the appeal was moot.26
As we have recognized, though, an exception to the mootness doctrine
exists through which technically moot claims can be reviewed if there is a strong public
interest reason for doing so. In order to determine whether the public interest exception
applies, we ask
(1) whether the disputed issues are capable of repetition, (2)
whether the mootness doctrine, if applied, may repeatedly
circumvent review of the issues and, (3) whether the issues
24 Clark v. State, Dep't of Corr., 156 P.3d 384, 387 (Alaska 2007) (internal
quotation marks and citations omitted).
25 920 P.2d 1387 (Alaska 1996).
26 Id. at 1388-89.
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presented are so important to the public interest as to justify
overriding the mootness doctrine.[27]
In Rude's case, because CIRI holds elections every year, his claims are at
least capable of repetition. Further, we may assume without deciding that the public
interest in open, fully informed corporate democracy is so great as to justify overriding
the mootness doctrine. However, in this case the public interest doctrine does not apply
because, like in O'Callaghan, "a timely election challenge [was] possible."28
The superior court granted summary judgment to CIRI on most of Rude's
election counterclaims in May 2009. On July 17, 2009, the superior court held a hearing
concerning the issues remaining following Judge Christen's initial summary judgment
orders; Rude did not appear at this hearing, nor did he respond to the superior court's
order compelling him to identify remaining counterclaims. Accordingly, CIRI filed a
motion to dismiss in October 2009. Only then did Rude respond, but the superior court
dismissed Rude's remaining claims in November 2009. Rude then filed a motion for
reconsideration, and the superior court agreed to convert the motion to dismiss into a
motion for summary judgment and give the parties time to brief the matter appropriately.
On January 21, 2010, the superior court granted summary judgment on Rude's remaining
counterclaims and a final judgment was entered on February 25. On March 26, 2010 -
when the candidates elected at the 2008 shareholder meeting still had more than one full
year left in their terms - Rude filed a statement of points on appeal. However, Rude
filed repeated motions requesting more time, many of which were filed after due dates
had run. He ultimately filed his corrected brief on July 13, 2011, ten months after his
brief was initially due and more than a month after the 2011 CIRI shareholders meeting.
27 Id. at 1389 (quoting Peloza v. Freas , 871 P.2d 687, 688 (Alaska 1994)).
28 Id.
-21- 6737
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In short, Rude had ample time to contest the election results, and so the second prong of
the public interest exception does not apply.29
Nonetheless, we have held that "where the outcome of an otherwise moot
claim may 'change[] the status of the prevailing party and thus an award of attorneys'
fees,' we reach the merits of that claim."30 Because in this case there has been an entry
of judgment against Rude consisting of attorney's fees and costs, we are bound to
consider the merits of Rude's claims, though the only relief he seeks (aside from setting
aside attorney's fees in his second appeal) is that CIRI's proxies be voided, his own
counted, and the 2008 election results recounted.31 We review Rude's claims, however,
29 See Mullins v. Local Boundary Comm'n, 226 P.3d 1012, 1019 (Alaska
2010) (comparing "the time it takes to bring the appeal with the time it takes for the
appeal to become moot," and determining that the second prong of the public interest
exception was not met because the time between the filing of a petition for incorporation
and the incorporation election was not "insufficient to permit judicial review") (internal
quotations and citations omitted).
30 Gold Country Estates Pres. Grp., Inc. v. Fairbanks N. Star Borough, 270
P.3d 787, 795 (Alaska 2012) (quoting Ulmer v. Alaska Rest. & Beverage Ass'n, 33 P.3d
773, 777 (Alaska 2001)); see also Smallwood v. Cent. Peninsula Gen. Hosp., Inc., 227
P.3d 457, 461 (Alaska 2010); Lamoureaux v. Totem Ocean Trailer Express, Inc. , 651
P.2d 839, 840 n.1 (Alaska 1982).
31 In one line in his brief, without any citation to any legal authority, Rude
asserts that he is owed either two or three years of unpaid director's fees for the time he
was unfairly denied a seat on the board (pursuant to the superior court's order voiding
Rude's proxies). However, "where a point is given only a cursory statement in the
argument portion of a brief, the point will not be considered on appeal." Adamson v.
Univ. of Alaska, 819 P.2d 886, 889 n.3 (Alaska 1991). Rude also suggests, in a single
clause in his brief and without any legal citation, that a further remedy is "to enjoin
CIRI's inequitable election practices from continuation." Again, such a cursory
treatment of an issue is not considered on appeal. Finally, Rude argues for the first time
on appeal that an appropriate remedy "is to remove the entrenched directors and officers
(continued...)
-22- 6737
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only to the extent that they may change the prevailing party determination.32
2. CIRI was not required to list the names of the New Alliance
candidates in its proxy materials.
Rude first argues that the superior court erred by determining that CIRI was
not obligated to include the names of the New Alliance candidates in its proxy materials.
Rude points to two federal cases from outside Alaska for the proposition that
corporations bear the obligation to use their proxy materials to inform shareholders of
non-board-endorsed candidates that the board knows to be running.33 He argues that by
failing to disclose the names of the opposition candidates the board gave the impression
that its candidates were unopposed and discouraged shareholders from voting.
CIRI responds that Alaska law does not require CIRI to list non-board-
recommended candidates in its proxy materials. CIRI also points out that under its
election procedures Rude had the opportunity to appear in CIRI's proxy materials but
31(...continued)
who have devised and implemented these schemes intended to maintain their grip on
corporate control." But we have said we "will not address for the first time on appeal an
issue the appellant failed to raise below," and so this claim for relief is waived. Alaska
State Emps. Ass'n/AFSCME Local 52, AFL-CIO v. State, 74 P.3d 881, 886 (Alaska
2003). In his second appeal, aside from seeking to have his attorney's fees award
reversed, Rude seeks to have the case remanded back to the superior court to have his
Rule 60(b) motion reconsidered, to have his previously denied exhibits admitted, and to
have New Alliance reinstated as a party. But these remedies all relate to a claim that is
now moot and so will not be considered by this court.
32 See Schweitzer v. Salamatof Air Park Subdivision Owners, Inc., 278 P.3d
1267, 1273 (Alaska 2012) ("To determine the prevailing party and resolve the attorney's
fees issue we need only review the superior court's holding on what we determine is the
'main issue.' ").
33 Chambers v. Briggs & Stratton Corp., 863 F. Supp. 900 (E.D. Wis. 1994);
Bertoglio v. Texas Intern. Co. , 488 F. Supp. 630 (D. Del. 1980).
-23- 6737
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that Rude declined the offer and "cannot now complain that his candidacy was not
included."
Rude relies primarily on Chambers v. Briggs & Stratton,34 a case from the
Eastern District of Wisconsin, for his claim that CIRI was obligated to include the names
of the New Alliance directors in its proxy materials. In Chambers, a corporation omitted
the name of a duly nominated candidate for the board of directors from its proxy
materials, and a shareholder sued, claiming the omission of the opposition candidate's
information was a material misrepresentation.35 The court, interpreting the Federal
Securities Exchange Act, agreed, finding that "opposition to the election of directors is
a material fact" because "there is a substantial likelihood that a reasonable shareholder
would regard the existence of opposition to the board's nominees for director important
in deciding how to vote."36 CIRI replies that this case is not binding in Alaska and that
"Alaska's proxy regulations specifically address what must be included in board
solicitations" and do not require the inclusion of non-board-nominated candidates. The
superior court agreed, granting summary judgment to CIRI.
As CIRI and the superior court point out, 3 AAC 08.345, which governs
the contents of proxy materials, provides:
(b) The solicitation of proxies on behalf of the board must
be preceded or accompanied by a dated, written proxy
statement including, but not limited to, the following:
(1) if action is to be taken on the election of
directors, a description of each nominee of the board who has
34 863 F. Supp. 900 (E.D. Wis. 1994).
35 Id. at 902.
36 Id. at 905.
-24- 6737
----------------------- Page 25-----------------------
consented to act if elected and of each director whose term of
office will continue after the shareholders' meeting.
3 AAC 08.335, which governs the contents of proxies, provides:
(c) The proxy must
(1) indicate that the proxy is solicited on behalf of
the board or, if solicited other than by the board, indicate the
identity of the persons on whose behalf the solicitation is
made;
(2) provide a specifically designated blank space for
dating the proxy; and
(3) provide a means for the shareholder to specify
by boxes a choice between approval or disapproval of each
matter or group of related matters identified in the proxy as
intended to be acted upon, other than the election of directors.
. . . .
(e) A proxy that provides for the election of directors must
(1) set out the names of the nominees for whom the
proxy is solicited; and
(2) clearly provide one of the following:
(A) a box opposite the name of each nominee
which may be marked to indicate that authority to vote for
that nominee is withheld;
(B) an instruction that the shareholder may
withhold authority to vote for a nominee by lining through or
otherwise striking out the name of that nominee;
(C) a "ballot" type of selection in which the
shareholder is permitted to award votes to selected nominees
of the shareholder's choosing.
The superior court is correct that 3 AAC 08.335, the section governing the
proxies themselves, does not require CIRI to include non-board-nominated candidates
like Rude in its proxies. Subsection (e)(1) specifically requires that the proxy must "set
-25- 6737
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out the names of the nominees for whom the proxy is solicited." (Emphasis added.) The
rule contemplates that each proxy solicitor will only solicit its own proxies, only
requiring a solicitor to include its own candidates. Accordingly, CIRI should not be held
to an obligation to solicit proxies on behalf of others.
As to 3 AAC 08.345, the section governing the contents of proxy
statements, we addressed this exact issue last year and held that corporations are not
required to include in their proxy statements the names of non-board-nominated
candidates or non-continuing directors.37
Further, as both CIRI and the superior court note, CIRI in fact provided
Rude and the other New Alliance candidates an opportunity to be included in the proxy
statement, but they chose not to be included. Rude now argues that they should have
been included despite this previous refusal. But surely CIRI cannot be required to solicit
a candidate's proxies against that candidate's will. The superior court did not err by
granting summary judgment to CIRI on this point.
3. CIRI's selection of board-recommended candidates was not
improper.
Rude next argues that it was improper for the board to hold "a closed
primary election" in which a board-endorsed slate was chosen without shareholder
participation. To support his argument he cites to cases concluding that shareholders
37 Henrichs v. Chugach Alaska Corp. , 260 P.3d 1036, 1044 (Alaska 2011)
("Chugach was not required to include the former directors in the proxy statement
because the board did not nominate them. And although Henrichs and Tabios were
incumbent directors, Chugach was not required to include their names because their
terms were scheduled to expire and therefore would not 'continue after the shareholders'
meeting.' ").
-26- 6737
----------------------- Page 27-----------------------
must be allowed to nominate candidates to oppose board-nominated slates.38 Here Rude
and the New Alliance candidates were able to do just that, running as an independent
slate opposed to CIRI's board-nominated candidates. Rude cites no authority for the
proposition that it is impermissible for a corporate board to recommend a slate, even
while allowing an opportunity for other candidates to be nominated and to run. Indeed,
Alaska's proxy regulations, noting that a proxy may be solicited "on behalf of the board
or . . . solicited other than by the board,"39 seem to assume that boards will be soliciting
proxies for their recommended candidates. CIRI's selection of a board-recommended
slate was not impermissible.
4. CIRI did not improperly remove Rude from the board of
directors.
Rude next argues that CIRI improperly removed him as a director by
"taking him off the list of its current directors" in its statement. This, he argues, violated
CIRI's duty to disclose the names of its directors, exceeded CIRI's powers to punish a
sitting director, violated common law rules of disclosure and candor, violated common
law proxy rules, and amounted to common law fraud.40
The superior court correctly granted summary judgment on these claims.
The fundamental flaw in Rude's contention is that his name was not removed from
38 Goldstein v. Lincoln Nat'l Convertible Sec. Fund, Inc., 140 F. Supp. 2d 424
(E.D. Pa. 2001), vacated in part, appeal dismissed by Goldstein v. Lincoln Nat'l
Convertible Sec. Fund, Inc., 2003 WL 1846095 (3d Cir. Apr. 2, 2003); Durkin v. Nat'l
Bank of Olyphant , 772 F.2d 55 (3d Cir. 1985).
39 3 AAC 08.335(c)(1).
40 Rude never argued common law fraud in the superior court, and we
accordingly do not consider this argument. See Alaska State Emps. Ass'n/AFSCME
Local 52, AFL-CIO v. State , 74 P.3d 881, 886 (Alaska 2003) ("We will not address for
the first time on appeal an issue the appellant failed to raise below.").
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CIRI's proxy statement. As discussed above, CIRI was not required to list Rude as a
candidate in its proxy statement, and so the omission of his name as a candidate cannot
be considered removal.41 The proxy statement did, though, contain numerous sections
in which all current directors were listed, and in each of those sections Rude's name was
included with equal prominence as his fellow directors. In the section discussing
directors' compensation, Rude's name was listed in alphabetical order. In the section
discussing committee assignments, Rude is listed as a member of two committees. In
short, Rude's name was not omitted from CIRI's proxy materials, and so summary
judgment was appropriate on this point.
5. CIRI did not impermissibly solicit proxies before distributing its
annual report.
Rude next argues that the superior court erred when it concluded that
"[u]nder these circumstances, the law permits CIRI to solicit proxies before issuing its
2007 annual [financial] report." CIRI's proxy statement and first proxy were mailed
approximately April 11, 2008. About one week later, CIRI sent out a second mailer
including a proxy and the corporation's 2007 annual report. According to Rude, CIRI
violated both common law disclosure rules and Alaska proxy regulations when it
solicited proxies before informing shareholders about the financial health of the
corporation under its current directors. To exacerbate the problem, Rude argues, CIRI
"seduc[ed]" shareholders to vote before they had the financial report by offering "Early-
Bird Prizes" for the prompt return of proxies.
The superior court rejected this argument, relying on 3 AAC 08.345(a).
That regulation provides:
41 See supra Part IV.A.2.
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(a) The solicitation of proxies on behalf of the board for
an annual meeting must be preceded or accompanied by the
annual report for the corporation's last fiscal year, unless
(1) the solicitation is made on behalf of the board
before the annual report is available;
(2) solicitation is being made at the time in
opposition to the board; and
(3) the board's proxy statement includes an
undertaking to furnish the annual report to all shareholders
being solicited at least 50 days before the date of the annual
meeting. (Emphasis added.)
The regulation provides an exception to the general rule that a proxy solicitation cannot
precede a financial report. Because there was no dispute as to the second and third
prongs of the exception, the superior court focused on the first. Rude argued, as he does
now, that the first prong was not satisfied because, although it is undisputed that the
financial report was not available when CIRI sent out its first proxy mailing, CIRI had
all the essential information it needed to compile the report well before its first mailing.
The superior court correctly rejected this argument.
CIRI Vice President Barbara Donatelli filed a sworn affidavit stating that
the report was not available when CIRI sent out its first mailing. Rude counters that
CIRI received its independent auditor's report on March 21, 2008, and therefore had
enough time to produce its final report before mailing its first proxy solicitation on
approximately April 11. But Rude's bare assertion that CIRI could have completed its
financial report within approximately 20 days of the completion of the independent
auditor's report does not create a genuine issue of material fact. Summary judgment was
therefore properly granted on this point.
-29- 6737
----------------------- Page 30-----------------------
6. CIRI was not required to include information about New
Alliance's proposed special dividend in its proxy materials.
Rude next argues that the trial court erred in granting summary judgment
on his claim that CIRI was required to disclose the New Alliance proposal for a special
dividend and to allow shareholders a way to vote on it. Several interlocking provisions
of the Alaska proxy regulations govern whether board proxy materials must provide
shareholders with a way to vote on proposals. As a general matter, 3 AAC 08.335(d)
provides that proxies can confer authority on proxy holders to vote on proposals only "if
the proxy discloses how the shares represented by the proxy will be voted in each case."
In some cases, though, proxies may grant proxy holders discretionary authority to vote
on certain matters. 3 AAC 08.335(f) provides two potentially relevant circumstances in
which discretionary authority may be granted.
First, 3 AAC 08.335(f)(1) allows for proxies to confer on their holders
discretionary authority to vote with respect to "matters which the persons making the
solicitation do not know, a reasonable time before the solicitation, are to be presented at
the meeting." CIRI argues, and the superior court agreed, that this exception applies
because "although Rude and the New Alliance had expressed their intention to include
the proposal, CIRI could not know whether that plan would indeed be carried out, nor
could CIRI know the language that would be used."
Second, 3 AAC 08.335(f)(4) allows for proxies to confer on their holders
discretionary authority to vote with respect to "a proposal omitted from the proxy
statement and proxy, if solicited for an annual meeting by participants other than the
board." Relatedly, 3 AAC 08.345(b)(15) requires that proxy statements include, "for
each matter which is to be submitted to a vote of the shareholders, other than the election
of directors, a description of the proposal and a statement of the vote required for its
approval." CIRI argues that 3 AAC 08.345(b)(15) applies "only to those [proposals] the
-30- 6737
----------------------- Page 31-----------------------
board itself intends to present for a vote." (Emphasis in original.) Accordingly, argues
CIRI, 3 AAC 08.335(f)(4) "expressly permits solicitation of discretionary authority to
vote on non-board proposals."
We will focus on the second exception.42 Whether the second exception
applies hinges on whether 3 AAC 08.345(b)(15) applies only to board proposals or to
all proposals. If the clause "for each matter which is to be submitted to a vote of the
shareholders" implicitly means "submitted by the board to a vote of the shareholders,"
then 3 AAC 08.335(f)(4) excepts CIRI from having to include the proposal in its proxies.
If not, then CIRI was not entitled to discretionary authority on the proposal under this
exception.
When interpreting an agency regulation for which an agency has provided
its own interpretation, we apply "a deferential standard of review [that] properly
recognizes that the agency is best able to discern its intent in promulgating the regulation
at issue."43 In its motion for partial summary judgment, CIRI attached a 2004 letter from
a Division of Banking and Securities examiner explaining that the Division's
interpretation of the regulation was the same as CIRI's. In that letter, written in response
to a complaint that CIRI was refusing to include a proposed floor resolution in its proxy
materials, Securities Examiner Ellen Buchanan stated that "[t]he regulations do not
require a corporation to include a shareholder's resolutions in its proxy statement and
proxy." She explained:
42 We conclude that the first exception applies because CIRI, though it had
general notice of New Alliance's intent, could not have known if the plan would be
completed or what language New Alliance would use in the proposal. See
3 AAC 08.335(f)(1).
43 Handley v. State, Dep't of Revenue , 838 P.2d 1231, 1233 (Alaska 1992)
(internal quotation marks omitted).
-31- 6737
----------------------- Page 32-----------------------
The proxy regulations at 3 AAC 08.335(f)(4) state that a
proxy may confer discretionary authority to vote on proposals
omitted from the proxy statement and proxy materials if
solicited for an annual meeting by participants other than the
board. We do not agree . . . that the intent of this section is to
allow discretion only if the promoters of it refuse to allow the
proposal's inclusion in the management proxy. We do not
find that CIRI's intent to use discretion to vote on
[shareholder] proposals is a violation of the regulations.
Rude proposes no alternative interpretation of the regulation except to assert that his
interpretation is correct. He makes no argument that the Division's interpretation of the
regulation lacks a rational basis. Because an agency is best able to interpret the intent
of its regulations,44 Rude's failure to articulate how the agency's facially defensible
interpretation is incorrect means that the agency interpretation controls. CIRI was not
required to include the special dividend proposal in its proxy materials, and summary
judgment on this point was therefore appropriate.
7. CIRI's proxy forms did not improperly contain too few slots for
write-in candidates.
Finally, in the last of his election-fairness claims, Rude argues the superior
court should have invalidated CIRI's proxies because they "did not contain five . . .
blanks for write-in candidates, but only one." According to Rude, this implied that a
voter could only vote for one write-in candidate. As the superior court correctly noted,
however, Rude provides no authority
to support [his] assertion that a proxy must provide space for
shareholders to write in the names of other candidates. Nor
does the format misrepresent the options available to the
shareholder casting a ballot. . . . [A] reasonable shareholder
would understand [CIRI's use of the term] 'write-in
44 Id.
-32- 6737
----------------------- Page 33-----------------------
candidates' to mean that a shareholder is permitted to write-in
more than one candidate.
Because the regulations governing proxies do not require spaces for write-in candidates,
and because even if such a requirement were inferred, CIRI's use of the plural
"candidates" conveys that more than one name may be written in, the superior court
correctly granted summary judgment on this point.
8. Rude's claim that CIRI impermissibly refused to disclose
information to which he was entitled as a director is moot.
Rude's next two claims argue that CIRI improperly denied him access to
corporate information to which he was entitled. In the first claim, Rude argues that he
was entitled to the information by virtue of his position as a director. In the second,
Rude argues that he was entitled to the information by virtue of his position as a
shareholder.
Rude argues that he was denied access to two types of corporate
information to which he was absolutely entitled as a director. First, he argues that CIRI
wrongfully refused to disclose shareholder email addresses and phone numbers. Second,
he argues that CIRI wrongfully refused to disclose "information related to the
management of the corporation." Rude argues that as a director he had an absolute right
to this information under AS 10.06.450(d).45
45 AS 10.06.450(d) provides:
A director has the absolute right at a reasonable time to
inspect and copy all books, records, and documents of every
kind and to inspect the physical properties of the corporation
or a domestic or foreign subsidiary of the corporation.
Inspection by a director may be made in person or by agent
or attorney and the right of inspection includes the right to
copy and make extracts.
-33- 6737
----------------------- Page 34-----------------------
CIRI argues, and the superior court found, that Rude's claim as a director
is moot because once he lost his seat as a director he was no longer entitled to this
information. Therefore, even if CIRI's denial was improper, Rude no longer has a right
to any relief. Rude concedes mootness but argues that the public interest exception
applies to his claims. But, in an unpublished decision, we addressed the public interest
exception in this context and determined that it does not apply because claims like this
would not "continually evade review."46
Unlike the other claims at issue in this appeal that are technically moot
though nonetheless justiciable, Rude's claim that he was denied corporate information
has no bearing on his status as a prevailing party and therefore cannot affect an award
of attorney's fees. Rude is seeking to invalidate CIRI's proxies. Whether Rude prevails
on this information claim has no bearing on whether CIRI's proxies should have been
invalidated, but only on whether Rude was entitled to certain information back when he
was a director. The appropriate relief for a denial of corporate information is an
injunction,47 to which, again, Rude is no longer entitled. Therefore, we do not address
Rude's moot claim that he was denied corporate information to which he was entitled as
a director.
46 Mielke v. Matanuska Elec. Ass'n , Mem. Op. & J. No. 1047, 2001 WL
34818260, at *2 (Alaska, Sept. 26, 2001) ("The public interest exception does not apply
to this case [addressing the same issue] . . . because applying the mootness doctrine
would not create a circumstance in which the issues in Mielke's claim are subject to
repetition yet continually evade review. It is possible that the issues disputed in Mielke's
case could be repeated. Informational access to a quasi-public entity is arguably
important to the public interest. But it is readily conceivable that another director could
bring suit to force MEA management to divulge sought-after information, and timely
judicial review would be possible, assuming the plaintiff remained a director.").
47 See Mielke, 2001 WL 34818260, at *3.
-34- 6737
----------------------- Page 35-----------------------
9. Rude abandoned his argument that CIRI impermissibly refused
to disclose information to which he was entitled as a
shareholder.
Rude's second information claim argues that he was denied access to
shareholder email addresses to which he was entitled as a shareholder. He argues that
AS 10.06.430(b)48 required CIRI to provide him this information for the "proper
purpose" of soliciting proxies. CIRI responds by arguing first that Rude abandoned this
argument below, second that no proper shareholder request for information appears in
the record, and third that AS 10.06.430(b) does not require a corporation to deliver
corporate information to a shareholder. The superior court granted summary judgment
on the first two of these bases and also found that Rude never identified a proper purpose
for a shareholder inspection.
Rude has abandoned his shareholder claim for information. Once the
superior court had granted summary judgment to CIRI on most of Rude's counterclaims,
the superior court gave Rude an opportunity to identify remaining counterclaims. When
Rude failed to do so CIRI filed a motion to dismiss the remaining counterclaims. Rude
48 AS 10.06.430(b) provides:
A corporation organized under this chapter shall make its
books and records of account, or certified copies of them,
reasonably available for inspection and copying at the
registered office or principal place of business in the state by
a shareholder of the corporation. Shareholder inspection
shall be upon written demand stating with reasonable
particularity the purpose of the inspection. The inspection
may be in person or by agent or attorney, at a reasonable time
and for a proper purpose. Only books and records of
account, minutes, and the record of shareholders directly
connected to the stated purpose of the inspection may be
inspected or copied.
-35- 6737
----------------------- Page 36-----------------------
opposed CIRI's motion and identified four remaining counterclaims, none of which
concerned shareholders' rights to information. The superior court then converted CIRI's
motion to a motion for summary judgment on the four remaining counterclaims exactly
as delineated by Rude and gave the parties an opportunity to file briefing. Rude's failure
to identify shareholder information requests as a live issue at this point constitutes an
abandonment of his claim.49 CIRI was therefore entitled to summary judgment on this
claim.
For the foregoing reasons, CIRI is entitled to summary judgment on all of
Rude's counterclaims. We now turn to CIRI's original claims that the New Alliance
proxy materials contained material misrepresentations.
B. CIRI's Claims
The superior court determined that five statements or sets of statements in
the New Alliance proxy solicitations were materially misleading as a matter of law.
Rude responds that four of these sets of statements are true while the fifth is not
misleading because it is aspirational. CIRI urges us to affirm the superior court and
further argues that the superior court erred by failing to grant CIRI summary judgment
on three other allegedly false statements made by New Alliance.
49 State v. O'Neill Investigations, Inc., 609 P.2d 520, 528 (Alaska 1980)
(citing Lewis v. State, 469 P.2d 689, 691-92 n.2 (Alaska 1970)) ("Failure to argue a point
constitutes an abandonment of it."); see also Powercorp Alaska, LLC v. Alaska Energy
Auth. , ___ P.3d ___, Op. No. 6715 at 24-25, 2012 WL 4840778, at *12 (Alaska, Oct. 12,
2012) (citing Hidden Heights Assisted Living, Inc. v. State, Dep't of Health & Soc.
Servs., Div. of Health Care Servs., 222 P.3d 258, 270 n.60 (Alaska 2009) and Adamson
v. Univ. of Alaska, 819 P.2d 886, 889 n.3 (Alaska 1991)) (holding that inadequate
briefing of a claim constitutes waiver).
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Alaska law prohibits material misrepresentations in proxy solicitations.50
Alaska's proxy regulations define when a statement or series of statements is misleading:
A misrepresentation is a statement that, at the time and under
the circumstances in which it is made (1) is false or
misleading with respect to a material fact; (2) omits a material
fact necessary in order to make a statement made in the
solicitation not false or misleading; or (3) omits a material
fact necessary to correct a statement, in an earlier
communication regarding the solicitation of a proxy for the
same meeting or subject matter, which has become false or
misleading.[51]
The same regulation provides that a "misrepresentation is material if there is substantial
likelihood that a reasonable shareholder would consider it important in deciding how to
vote."52 Additionally, the regulation provides that
[a] series of statements or omissions that are objectively false
or misleading, but which might not be material
misrepresentations if considered separately, might be material
misrepresentations if there is a substantial likelihood that a
reasonable shareholder would consider the series important
in deciding how to vote.[53]
50 AS 45.55.160 ("A person may not, in a document filed with the
[Commissioner of Commerce, Community, and Economic Development or a designee
of the commissioner] or in a proceeding under this chapter, make or cause to be made an
untrue statement of a material fact or omit to state a material fact necessary in order to
make the statements made, in the light of the circumstances under which they are made,
not misleading.") (substituted language from AS 45.55.990(1) (defining
"administrator")).
51 3 AAC 08.315(a).
52 Id. ; see also Meidinger v. Koniag, Inc., 31 P.3d 77, 83 (Alaska 2001).
53 3 AAC 08.315(a).
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Alaska applies the "total mix" standard for determining the materiality of
omitted facts.54 Under this standard, "an omitted fact is material if there is 'a substantial
likelihood that the disclosure of the omitted fact would have been viewed by the
reasonable investor as having significantly altered the 'total mix' of information made
available.' "55 For affirmative misrepresentations accompanied by accurate information,
the question is whether the accurate information neutralizes the misleading information.56
" '[N]ot every mixture with the true will neutralize the deceptive. If it would take a
financial analyst to spot the tension between the one and the other, whatever is
misleading will remain materially so, and liability should follow.' "57
Although the issue of materiality is generally one of fact, we have held that
the issue "may be resolved as a matter of law on summary judgment 'if the established
[misrepresentations] are so obviously important to an investor, that reasonable minds
cannot differ on the question of materiality.' "58
1. The superior court did not err by granting summary judgment
to CIRI on New Alliance's statements concerning CIRI's
liquidation.
The first set of statements the superior court found materially misleading
were found in New Alliance's third mailer:
54 Skaflestad v. Huna Totem Corp., 76 P.3d 391, 397 (Alaska 2003).
55 Meidinger , 31 P.3d at 84 (quoting TSC Indus., Inc. v. Northway, Inc., 426
U.S. 438, 449 (1976)).
56 Id.
57 Id. (quoting Virginia Bankshares, Inc. v. Sandberg, 501 U.S. 1083, 1097
(1991)).
58 Id. at 83 (quoting TSC Indus., 426 U.S. at 450) (internal quotations
omitted).
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Who is liquidating CIRI? The New Alliance believes CIRI
is being liquidated by management. As of May 2006: CIRI
sold total ANCSA land entitlements of $336,344,180.
Included in this amount was the sale of $275,141,211
worth of federal surplus properties.
The CIRI May 1996 newsletter listed CIRI's original
ANCSA land entitlement at 1,301,515 acres of surface and
2,366,685 acres of subsurface estate. CIRI traded 602,399
acres of surface and subsurface estate for our federal surplus
properties .
Page 7 of the CIRI 2007 Annual Report lists CIRI's current
ANCSA land entitlement at approximately 600,000 acres of
surface and 1,300,000 acres of subsurface estate. Our land
entitlements have been reduced by approximately 700,000
acres of surface and 1,000,000 acres of subsurface estate.
(Emphases in original.)
The basis for the superior court's conclusion that these statements, taken
together, were misleading was an affidavit filed by CIRI's Director of Land and
Resources Kim Cunningham. That affidavit stated, in part:
Since CIRI's inception, in no way has CIRI "sold" or
"liquidated" anywhere close to 700,000 acres of surface or
1,000,000 acres of subsurface lands that CIRI received as
[its] ANCSA entitlement. The original ANCSA lands made
available to CIRI for selection within its region were of little
value because they consisted largely of "mountain tops and
glaciers." Through a comprehensive settlement with the
federal government, followed by a series of land exchanges,
CIRI agreed to forego certain of its original entitlement
acreage in exchange for potentially more valuable land of a
lesser acreage outside of the CIRI region. As stated in the
1996 Annual Report at 21, the land CIRI agreed to accept for
its ANCSA entitlement consisted of approximately 699,000
acres of surface estate and 1,764,000 acres of subsurface
estate. To date, CIRI has received over 90% of its
entitlement, as restructured. . . .
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. . . CIRI's business records [attached to the affidavit]
reflect that as of April 2, 2008, CIRI owned 606,057 acres of
surface estate, and had sold only 11,755 acres of surface
estate, for a total sales price of $306,139,284. . . . CIRI
owned 1,559,033 acres of subsurface estate, and had sold
only 118,763 acres for a total sales price of $31,105,256. . . .
CIRI still owns over 90% of the acreage it received
under ANCSA . . . .
In granting summary judgment, the superior court found that asking "who is liquidating
CIRI" gave the false impression that its assets were being liquidated or sold off. The
superior court rejected the defendants' argument that they had a good-faith basis for
believing that CIRI was liquidating large landholdings.
On appeal, Rude does not argue that he had a good-faith belief that the New
Alliance statements were true, but rather that they are true. Rude argues that "[t]he New
Alliance's third mailer did not state or imply that CIRI had sold or liquidated 700,000
acres of surface estate or 1,000,000 acres of subsurface estate, only that CIRI's
entitlement to this acreage had been traded away for government surplus property, much
of which was sold between 1997 and the present." But taken together, the three
paragraphs clearly suggest the former. By titling this section of the mailer "Who is
liquidating CIRI?" and claiming that CIRI had disposed of vast estates, New Alliance
suggested that major assets are being sold as part of a total dismantling of CIRI. This is
an affirmative misrepresentation. It is material because, as the superior court noted, "a
reasonable shareholder would of course consider it important when deciding how to vote
if he/she understood that 700,000 acres of surface estate and 1,000,000 acres of
subsurface estate had been liquidated without explanation."
By mentioning the $336 million in land sales, along with the reductions in
CIRI's entitlement, without mentioning that the former was for the sale of only 12,000
acres of surface estate and 119,000 acres of subsurface estate and that the latter was as
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a result of swapping less valuable (though larger) acreage for more valuable (though
smaller) acreage, the mailer suggests that more than half of CIRI's original ANCSA
entitlement has been sold. The omission of any explanation as to the sales and land swap
is material because "there is 'a substantial likelihood that the disclosure of the omitted
fact would have been viewed by the reasonable investor as having significantly altered
the 'total mix' of information made available.' "59 Had a shareholder known that the
reductions in landholdings came as part of a swap for more valuable holdings, and that
the $366 million came from selling only a small part of CIRI's estate, this would have
significantly altered the total mix of information. CIRI was therefore entitled to
summary judgment on its claim that the New Alliance statements concerning CIRI's
"liquidation" are misleading.
2. The superior court did not err by granting summary judgment
to CIRI on New Alliance's statements concerning shareholder
rights.
The superior court also found materially misleading the following
statements from New Alliance's third mailer:
Shareholder participation. Section 2(b) of ANCSA says
"Natives shall have maximum participation in decisions
affecting their rights and property."
We believe shareholder participation is lacking in our
corporation. . . . Shareholders do not get to vote on: the sale
of large ANCSA land and natural resource properties; large
cash donations; the granting of CIRI owned stock to senior
executives; political donations; large payments made to
lobbyists and consultants; nor do they get to vote on
legislation that would affect their rights or property. We
want to change this! (Emphases in original.)
59 Meidinger , 31 P.3d at 84 (quoting TSC Indus., Inc., 426 U.S. at 449).
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The superior court concluded that "[t]he overall message communicated by
both statements, read together, is that CIRI is depriving shareholders of legal rights and
that shareholders are entitled to vote on operational decisions." The court noted that
Section 2(b) of ANCSA was a congressional declaration as to how the settlement of
Native claims should be accomplished, not a law concerning the day-to-day operations
of ANCSA corporations.60 Instead, the court noted, paraphrasing AS 10.06.450(a),61 that
"under Alaska law, the board of directors, not shareholders[,] has the right to make both
day-to-day and long-term management and operational decisions." The superior court
rejected New Alliance's argument that the statement only suggested that the law should
be changed, saying that it was "not at all clear from the statement . . . that [New Alliance]
was suggesting a change of law." Finally, the superior court noted that in 1997, Superior
Court Judge Peter A. Michalski had ordered Rude to issue a correction to his proxy
statement saying, among other things, "Under Alaska law, the Board of Directors, not
the shareholders, is responsible for managing the business and affairs of the corporation.
Ordinary business decisions, therefore, are not appropriate matters for a shareholder
vote."
Rude argues on appeal that these statements were not misleading because
they were "merely aspirational." "The New Alliance," he argues, "is stating that if
shareholders elect a majority of New Alliance directors, the directors will consult with
shareholders and seek advisory votes on certain large transactions." But the New
Alliance materials give the impression that the supposed lack of shareholder participation
in CIRI decisions is a violation of Section 2(b) of ANCSA. Rude's after-the-fact
60 43 U.S.C. § 1601(b) (2006).
61 "All corporate powers shall be exercised by or under the authority of, and
the business and affairs of a corporation shall be managed under the direction of, a board
of directors except as may be otherwise provided in this chapter." AS 10.06.450(a).
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explanation - that New Alliance was merely proposing advisory votes - is
unpersuasive because New Alliance could easily have said that in the mailer, but chose
not to.62 Instead, it left shareholders with the impression that their rights were being
violated by the CIRI board. Writing proxy materials is not and should not be an exercise
in how much can be insinuated about the other side without outright lying. As the
superior court correctly found, this misrepresentation was material because a reasonable
shareholder would consider the fact that the CIRI board was denying her rights important
in considering how to vote. Summary judgment was therefore appropriate as to these
statements.
3. The superior court did not err by granting summary judgment
to CIRI on New Alliance's statements that "a hardcore minority
of 6 directors" controlled CIRI.
Third, the superior court found that it was a material misrepresentation for
New Alliance to say on its website that "never again will a hardcore minority of 6
directors control our corporation." The superior court rejected New Alliance's argument
that it was referring to the power of six directors to select an executive committee that
conducted much of CIRI's business. New Alliance omitted this explanation from the
statement on its website. As a result, the total mix of available information suggested
improper corporate governance.63 The superior court concluded "[a] minimum of eight
of the fifteen directors is required to command a majority" and that the New Alliance
statement that a six-member minority was controlling the corporation was therefore false.
62 Kodiak Seafood Processors Ass'n v. State , 900 P.2d 1191, 1198 n.10
(Alaska 1995) (citing Alaska Int'l Constr., Inc. v. Earth Movers of Fairbanks , 697 P.2d
626, 629 (Alaska 1985)) ("[P]ost hoc rationalizations are suspect and must be viewed
critically, [although] they still may be considered.").
63 See Skaflestad v. Huna Totem Corp., 76 P.3d 391, 397 (Alaska 2003);
Meidinger , 31 P.3d at 84 (quoting TSC Indus., Inc., 426 U.S. at 449).
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The superior court further found that the statement suggested that a minority of directors
is "somehow improperly controlling the corporation," thus causing a reasonable
shareholder to consider the statement important in deciding how to vote. It is significant
that this statement dovetails with New Alliance's misrepresentation that shareholders are
being improperly deprived of their rights to participate in corporate governance. Since
a reasonable shareholder would consider New Alliance's series of statements concerning
improper corporate governance important in deciding how to vote, we conclude
summary judgment was appropriate as to this statement.
4. The superior court did not err by granting summary judgment
to CIRI on New Alliance's statements.
These three misrepresentations permeated New Alliance's proxy
solicitation and together gave the materially misleading impression that the CIRI board
was improperly depriving shareholders of the benefits of corporation ownership.
Because these three misrepresentations, taken together, are sufficient to justify the
superior court's decision to void the New Alliance proxies, we need go no further.
Addressing further alleged misrepresentations can have no bearing on CIRI's status as
the prevailing party.64 We affirm the superior court's grant of summary judgment to
CIRI and the court's decision to void the New Alliance proxies.
C. Rude's Second Appeal
Rude's second appeal in this case challenges the superior court's fee award
and three procedural matters. First, Rude argues that the attorney's fee award to CIRI
should be reduced to zero based on various alleged forms of misconduct committed by
64 Schweitzer v. Salamatof Air Park Subdivision Owners, Inc., 278 P.3d 1267,
1273 (Alaska 2012) (explaining that the prevailing party is "the one who is successful
on the main issue of the action and in whose favor the decision or verdict is rendered and
the judgment entered" (internal quotation marks omitted) (quoting Progressive Corp. v.
Peter ex rel. Peter , 195 P.3d 1083, 1092 (Alaska 2008))).
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CIRI. Second, Rude argues that the court improperly refused to admit the exhibits that
Rude attached to his Rule 60(b) motion. Third, Rude argues that the superior court
wrongly denied his Rule 60(b) motion for relief from judgment on procedural grounds
and should have reached the substance of his argument. Finally, Rude argues that the
court erred in dismissing New Alliance as a party. None of these arguments has merit,
and we affirm the superior court on all points.
1. The superior court did not abuse its discretion in awarding
attorney's fees to CIRI.
Following summary judgment on all of CIRI's claims and Rude's
counterclaims, the superior court ordered Rude to pay CIRI attorney's fees totaling
$43,773.80 and costs totaling $5,441.14.65 Rude challenges this award on several bases.
Alaska Civil Rule 82(b)(2) provides that in cases without money judgments,
the superior court "shall award the prevailing party in a case resolved without trial 20
percent of its actual attorney's fees which were necessarily incurred." Here CIRI
submitted evidence showing that it had spent $223,530 in litigating the claims and
counterclaims against Rude, and the superior court accordingly awarded attorney's fees
of slightly below 20%. Rude does not challenge that this was the proper presumptive
amount under Rule 82. Instead, he argues that the superior court abused its discretion66
in failing to vary the presumptive fee award according to the fee variance factors of
Rule 82(b)(3).67
65 Although the heading of this section of Rude's brief mentions costs as well
as attorney's fees, he makes no arguments about costs in the body of his brief.
66 "Application of Rule 82(b)(3) factors is discretionary, not mandatory."
Rhodes v. Erion , 189 P.3d 1051, 1055 (Alaska 2008).
67 Alaska R. Civ. P. 82(b)(3) provides:
(continued...)
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First, he argues that CIRI's fee award should be reduced because CIRI
acted in bad faith by: (1) refusing to disclose shareholder email addresses to the New
Alliance candidates;68 (2) failing to include the New Alliance candidates in its proxy
materials; (3) soliciting proxies before it sent out its annual report; (4) failing to include
the New Alliance dividend proposal in its proxy materials; (5) improperly nominating
a slate of board-endorsed candidates; (6) improperly placing only one line for write-in
candidates on its proxies; (7) paying the campaign expenses of board-nominated
67(...continued)
The court may vary an attorney's fee award calculated under
subparagraph (b)(1) or (2) of this rule if, upon consideration
of the factors listed below, the court determines a variation is
warranted:
. . . .
(G) vexatious or bad faith conduct;
. . . .
(I) the extent to which a given fee award may be so
onerous to the non-prevailing party that it would deter
similarly situated litigants from the voluntary use of the
courts;
(J) the extent to which the fees incurred by the prevailing
party suggest that they had been influenced by considerations
apart from the case at bar, such as a desire to discourage
claims by others against the prevailing party or its insurer;
and
(K) other equitable factors deemed relevant.
68 Included in this argument is an allegation that CIRI perjured itself by
"dissembl[ing] and misrepresent[ing] to the [superior] court that it did not use E-mail
addresses" for campaign purposes. However, Rude did not argue this below and has thus
waived it. See Brandon v. Corr. Corp. of Am., 28 P.3d 269, 280 (Alaska 2001) ("A party
may not raise an issue for the first time on appeal.").
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candidates but not the New Alliance candidates; and (8) removing Rude from the board
by failing to list his name in its proxy materials. But with the exception of the claim
about election expenses, these are just a rehash of Rude's counterclaims. Rude's
argument is basically that the very conduct for which CIRI is not liable should
nonetheless reduce the attorney's fees he owes. Because CIRI is entitled to judgment on
,
Rude's election-fairness claims, it is also entitled to attorney's fees on those claims.69 70
Further, with the exception of the claim that CIRI refused to disclose
shareholder email addresses, Rude explicitly stated in his opposition to CIRI's motion
for attorney's fees that neither party had engaged in vexatious or bad-faith conduct. He
has therefore waived this argument.71
Rude's second argument, relying on Rule 82(b)(3)(I),72 is that "[t]he fee
award granted by the trial court is so onerous . . . that it would deter similarly situated
litigants from the voluntary use of the courts to remedy any future misconduct of
ANCSA corporations." CIRI argues that subsection I does not apply to Rude because
69 See Lentine v. State, 282 P.3d 369, 381 (Alaska 2012) (A party's
"characterization of her actions as an 'innocent mistake' involves a question of fact that
was litigated at trial, and the superior court's failure to consider it again in determining
attorney's fees was not an abuse of discretion.").
70 Rude also argues that the superior court should have applied the equitable
doctrine of unclean hands to reduce CIRI's attorney's fee award. But because his
argument that CIRI's hands were unclean is premised on the claims of specific electoral
misconduct by CIRI - claims that have no merit - his argument must also fail.
71 See State v. O'Neill Investigations, Inc., 609 P.2d 520, 528 (Alaska 1980)
(citing Lewis v. State , 469 P.2d 689, 691-92 n.2 (Alaska 1970) ("Failure to argue a point
constitutes an abandonment of it.")).
72 See supra note 67.
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he did not make "voluntary use of the courts," but was instead sued by CIRI.73 As CIRI
seems to recognize, though, this rule does apply to Rude's counterclaims. As to those
claims, Rude argues that "rational apathy" discourages shareholders from bringing
potentially costly claims against corporations in which they can expect little individual
benefit (though systemic benefits may be great). As CIRI points out, though, here
"Rude's counterclaims were motivated by private concerns, particularly his personal
desire to seek election to the CIRI board of directors." Given that Rude had a strong
personal stake in the outcome of his counterclaims, the superior court did not abuse its
discretion in declining to vary from the Rule 82 fee schedule.
Relying on Rule 82(b)(3)(J), Rude next argues that "[t]his [c]ourt should
vacate CIRI's award of costs and attorney fees because CIRI's decision to bring this case
was influenced by management's desire to discourage actions by other shareholders to
reform CIRI." As CIRI notes, "[n]o factual or legal basis exists for this assertion," and
Rude cites to no evidence in this portion of his brief. Given the lack of any support for
Rude's assertion, it was not an abuse of discretion for the superior court to decline to
vary the fee award.
Finally, Rude argues that the superior court should have applied "the
equitable doctrine of common benefit" to "protect[] a lone shareholder from bearing the
burden of litigation that is intended to benefit many shareholders, to promote corporate
suffrage, and to protect the corporate democracy." As discussed above, though, Rude's
73 See Little Susitna Constr. Co. v. Soil Processing, Inc., 944 P.2d 20, 29
(Alaska 1997) (noting that a losing party "ha[d] failed to explain, either below or on
appeal, how [subsection I] might apply to its situation, particularly since [the prevailing
party] initiated the litigation and [the losing party] made no 'voluntary use of the
courts' ") (citing Rule 82(b)(3)(I)).
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private interest in bringing his counterclaims was substantial. The superior court was
therefore acting within its discretion when it declined to vary the fee award.
Because Rude has not shown that the superior court abused its discretion
in declining to vary from Rules 82's presumptive fee awards, we affirm the superior
court's fee award.
2. The superior court did not abuse its discretion by striking from
the record exhibits filed with Rude's Rule 60(b) motion.
Rude next argues that the superior court abused its discretion in refusing
to admit 33 exhibits attached to his Rule 60(b) motion. Rude's motion for relief from
judgment, filed after summary judgment had been granted on all of the claims and
counterclaims and after Rude had already filed a notice of appeal, contained 33 new
exhibits. CIRI then filed a motion to strike the exhibits on the grounds that they were
irrelevant to Rude's Rule 60 motion, that they were filed much too late and were "a
blatant attempt to inappropriately supplement the record on appeal," and that they were
not authenticated. The superior court granted CIRI's motion for the reasons stated
therein.
On appeal, Rude argues that the motion was brought as a Rule 12(f) motion
to strike and that Rule 12(f) empowers courts to strike material from pleadings only, and
not exhibits. He argues that even if Rule 12(f) were applicable, the exhibits in question
"were not redundant, immaterial, impertinent, or scandalous" because they were "CIRI's
own business records." He further argues that the superior court erred in finding that the
evidence was not relevant under Alaska Evidence Rules 401 and 403. He finally argues
that the superior court erred in finding that the exhibits were not admissible because they
were not authenticated.
The superior court did not abuse its discretion in refusing to admit the
exhibits. As the superior court found, Rude's new exhibits were filed after summary
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judgment had already been granted on all claims and those judgments had already been
appealed. At that point, Rude's delay in filing the exhibits could fairly be called undue,
and admitting the exhibits - i.e., giving Rude an opportunity to supplement the
appellate record after the case had already terminated - would have unfairly prejudiced
CIRI.74 Notably, Rude did not move for relief from judgment under Civil Rule 60(b)(2).
That rule provides for relief in cases of "newly discovered evidence which by due
diligence could not have been discovered in time to move for a new trial under
Rule 59(b)." However, even had Rude argued under this rule, there is nothing in the
record to suggest that the 33 new exhibits were "newly discovered evidence which by
due diligence could not have been discovered" earlier. Even under Rule 60(b)(2), then,
it appears the exhibits would have been properly excluded.
3. The superior court did not abuse its discretion by denying
Rude's Rule 60(b) motion.
Rude next argues that the superior court abused its discretion in denying his
Rule 60(b) motion for relief from judgment.75 Rude's arguments in his motion were
essentially identical to those he made in opposing summary judgment. Because the
74 Evidence Rule 403 allows a court to exclude relevant evidence "if its
probative value is outweighed by the danger of unfair prejudice . . . or by considerations
of undue delay."
75 Rule 60(b) provides, in relevant part:
On motion and upon such terms as are just, the court may
relieve a party or a party's legal representative from a final
judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise or excusable neglect;
(2) newly discovered evidence which by due diligence
could not have been discovered in time to move for a new
trial under Rule 59(b)[.]
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superior court did not err in granting summary judgment to CIRI on all claims and
counterclaims, its denial of the Rule 60(b) motion was not a reversible error.76
4. The superior court did not abuse its discretion by entering the
stipulated order dismissing New Alliance as a party.
Finally, Rude argues that the superior court erred by entering a stipulated
order dismissing New Alliance as a party. On July 6, 2009, following the superior
court's two main summary judgment rulings, the superior court entered a stipulation and
order dismissing defendants Anagick, Kiana, Thomas, and New Alliance as parties. The
stipulation was signed by CIRI's attorney, Thomas's attorney, Chris Kiana, and Ella
Anagick, who four days before had filed an entry of appearance as attorney on behalf of
New Alliance.77 The stipulation was not signed by Rude's attorney, Fred Triem, who
had filed an entry of appearance on behalf of New Alliance in June 2008.
Rude argues that this stipulation was "not effective" with respect to New
Alliance because Triem was the attorney of record for New Alliance, and he "has never
withdrawn or been substituted." Alaska Civil Rule 81(c), on which Rude relies,
provides:
(1) An attorney who files a pleading or appears in a court
proceeding on behalf of a party shall be deemed to have
entered an appearance for all purposes in that case unless the
attorney has filed and served a limited entry of appearance
under (d) of this rule.
76 Further, the disposition of this motion is moot. Resolving whether Rude's
Rule 60(b) motion was improperly denied has no bearing on prevailing party status at
this point.
77 Anagick's signature is actually dated June 29, 2009, five days before she
entered her appearance on behalf of New Alliance. Rude does not mention this in his
argument that the superior court abused its discretion in entering the order, and so we
will assume that the superior court was acting within its discretion to give after-the-fact
effect to Anagick's signature.
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----------------------- Page 52-----------------------
(2) Except as otherwise ordered by the court, or except as
provided in Rule 81(d) and 81(e)(1)(D), a party who has
appeared by an attorney may not thereafter appear or act in
the party's own behalf in any action or proceeding, unless
order of substitution shall have been made by the court after
notice to such attorney.
According to Rude, this rule required a substitution of counsel before Anagick could act
on behalf of New Alliance.
CIRI responds that neither Rude nor Triem objected to the dismissal below,
nor to Anagick's entry of appearance as counsel for New Alliance, and that this point is
therefore waived. CIRI is correct. "A party may not raise an issue for the first time on
appeal."78 To be sure, as the court of appeals has recognized in cases in which
represented parties try to file pro se pleadings, allowing a party to have multiple
representatives who might be working at cross-purposes "could cause considerable
confusion."79 But in situations such as these, the superior court has "the authority" to
require parties to consolidate their representation; there is no basis for requiring the court
to do so.80 Further, even in situations in which a late entry of appearance may undermine
the ability of a precedent attorney to pursue her client's claim effectively, it is up to the
party or the aggrieved attorney to raise an objection, at the latest, when the conflict
arises. Here, Rude and Triem failed to object and have thus forfeited any objection. The
superior court was therefore acting within its discretion to enter the stipulated order to
which no one had objected.81
78 Brandon v. Corr. Corp. of Am., 28 P.3d 269, 280 (Alaska 2001).
79 Martin v. State , 797 P.2d 1209, 1217 (Alaska App. 1990).
80 Id.
81 Rude only objected after summary judgment had been granted and
(continued...)
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V. CONCLUSION
For the foregoing reasons, we AFFIRM the superior court.
81(...continued)
attorney's fees awarded. At that point, the only benefit that could inure to Rude in
winning on this argument is that some portion of his award of attorney's fees could be
apportioned to New Alliance.
-53- 6737
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