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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Madonna v. Tamarack Air, Ltd. (4/12/2013) sp-6774

Madonna v. Tamarack Air, Ltd. (4/12/2013) sp-6774

        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  


JAMES A. MADONNA,                               ) 

                                                )       Supreme Court No. S-14406 

                        Appellant,              ) 

                                                )       Superior Court No. 4FA-10-02202 CI 

        v.                                      ) 

                                                )       O P I N I O N 

TAMARACK AIR, LTD.,                             ) 

                                                )       No. 6774 – April 12, 2013 

                        Appellee.               ) 


                Appeal   from     the  Superior    Court    of   the  State  of   Alaska, 

                Fourth Judicial District, Fairbanks, Robert B. Downes, Judge. 

                Appearances:        Thomas       R.   Wickwire,       Fairbanks,     for 

                Appellant.     Alfred Clayton, Jr., Bliss, Wilkens & Clayton, 

                Anchorage, for Appellee. 

                Before: Fabe, Chief Justice, Winfree, Stowers, and Maassen, 

                Justices. [Carpeneti, Justice, not participating.] 

                FABE, Chief Justice. 


                Tamarack Air, Ltd. negligently damaged James Madonna’s airplane while 

it  was   on   Tamarack’s      airfield  after  it  had  been   in  Tamarack’s      shop   for  routine 

maintenance.       Tamarack   offered   to   fix   the   plane,   but   Madonna   refused   that   offer. 

Instead,   he   elected   to   ship   the   plane   to   Wyoming   and   had   the   plane   repaired   at   the 

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original factory.  Tamarack argued that Madonna had failed to mitigate his damages and 

refused   to   compensate   Madonna   for   the   full   cost   of   these   repairs.  A   jury   awarded 

Madonna   most,   but   not   all,   of   the   cost   of   having   the   plane   repaired   out   of   state. 

Madonna now argues that the trial court erred by refusing to let him present several other 

claims for damages related to the accident.   But we find no error and therefore affirm the 

trial court in all respects. 


                 James Madonna owns a two-seat fabric-covered airplane called an Aviat 

Husky.     Airplanes need regular repair, and Madonna orally contracted with Tamarack 

Air,   Ltd.   to   perform   annual   inspections   and   maintenance   on   his   plane.      Tamarack 

regularly serviced Madonna’s plane for several years, until, in 2009, while the plane was 

on Tamarack’s airfield following inspection, a Tamarack employee accidentally towed 

the Husky into two other planes and damaged it. 

                Vicky Domke, owner of Tamarack, called Madonna to tell him about the 

accident.  A few days later, Madonna inspected the damage and drafted a letter outlining 

his   expectation   that   Tamarack   would   be   responsible   for   organizing   and   conducting 

repairs on the aircraft.  Soon after delivering this letter to Tamarack, Madonna received 

a reply from Allstate Insurance Company, Tamarack’s insurer, informing Madonna that 

Allstate   would   pay   for   the   repairs   at   a   shop   of   his   choice,   the   reasonable   cost   of 

alternative   transportation,   and   any   loss   of   value   to   the   aircraft.   Allstate’s   letter   also 

indicated that Madonna was responsible for having these repairs done and mitigating his 


                 Madonna asked Domke for an estimate of the damage, and Madonna and 

Domke,   together   with   another   local   mechanic,   Steve   Conatser,   met   to   discuss   the 

necessary repairs.      Domke presented Madonna with details of the necessary repairs, 

including a list of parts and labor.   Domke thought that most of the work could be done 

                                                    -2-                                              6774

----------------------- Page 3-----------------------

at Tamarack but she recognized that the plane would have to be flown to Conatser’s shop 

for painting and fabric repair. Domke estimated that the needed repairs would cost about 

$20,000, although that estimate was open-ended because she could not be certain about 

the extent of the damage until repairs were underway. 

                Madonna was not satisfied with Domke’s repair plan.                 He worried that 

Tamarack was “going to patch this thing together, give it a[n] inferior paint job and [that 

he] was going to get the plane returned in a less than desirable condition.”                Madonna 

never gave Domke permission to make the suggested repairs. 

                Instead, Madonna made arrangements to repair the plane on his own.  He 

solicited repair estimates from three local shops.  He consulted a knowledgeable friend 

for advice.   And he finally decided to dismantle the plane and ship it back to the Aviat 

factory in Wyoming, where it could be rebuilt and repaired.  Although the cost of parts 

and labor was about the same for repair at the factory as local repair, Madonna had to 

pay much more to have the plane transported to and from Wyoming.                    Madonna paid to 

have the Husky disassembled, crated, and shipped to Wyoming; hired a pilot to fly to 

Wyoming and then fly the Husky back to Alaska; bought insurance for the shipment to 

Wyoming and the pilot’s flight back; and installed in the Husky a special transponder, 

which was required to make the flight over Canada.  All told, Madonna paid more than 

$50,000 to have his aircraft repaired.        Tamarack refused to pay this amount, Madonna 

sued, and the parties went to trial. 

                At   trial,   Tamarack   conceded   liability   for   the   accident   but   argued   that 

Madonna had chosen an unreasonably expensive course of repair and thus had failed to 

mitigate   his   damages.     Madonna   presented   evidence   that   only   the   factory   had   the 

necessary equipment (called “jigs”) to remedy any twisting of the wings, which can be 

dangerous in flight.     Tamarack presented contrary evidence that several mechanics in 

Fairbanks had the skills necessary to make satisfactory repairs. While Madonna claimed 

                                                  -3-                                            6774

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$50,909   in   damages   for   the   cost   of   repairs,   the   jury   awarded   Madonna   $43,878   in 

damages.  It also awarded $5,000 for the cost of chartering a flight Madonna had hoped 

to make in his Husky. The trial judge awarded 3.75% prejudgment interest on the award, 

as well as attorney’s fees and costs. 

                Madonna now challenges the award on a number of grounds.                     He claims 

that the trial court made seven errors:   failure to allow presentation to the jury of a claim 

for breach of contract; failure to allow presentation of a claim for punitive damages; 

failure   to   allow   questioning   of   Domke   regarding   whether   she   had   received   a   letter 

revealing his plan to ship the Husky to Wyoming; denial of Madonna’s claims for lost 

income to his business and for the cost of a charter trip to the Brooks Range; and denial 

of   his   claim   for   the   lost   interest   on   the   value   of   the   plane   while   it   was   damaged. 

Madonna also challenges the award of prejudgment interest at the statutory rate and the 

denial of his request for post-trial discovery.         We address these arguments in turn. 


                Interpretation of an established contract is a question of law and is reviewed 

de novo.1    But more basic questions about the existence, validity, and scope of a contract 

are questions of fact, which are reviewed under the clearly erroneous standard.2 

                We   review      a  trial   court’s   discovery   rulings   and   decisions   to   exclude 

evidence for abuse of discretion.3        “An abuse of discretion exists only when we are ‘left 

with a definite and firm conviction, after reviewing the whole record, that the trial court 

        1       Cook v. Cook, 249 P.3d 1070, 1077 (Alaska 2011). 

        2        Wyatt v. Wyatt, 65 P.3d 825, 828 (Alaska 2003) (citing Juliano v. Angelini , 

708 P.2d 1289, 1291 (Alaska 1985)). 

        3       See Peterson v. Ek, 93 P.3d 458, 467 (Alaska 2004) (quoting Fletcher v. 

S. Peninsula Hosp. , 71 P.3d 833, 844 (Alaska 2003)) (discovery rulings); Getchell v. 

Lodge , 65 P.3d 50, 53 (Alaska 2003) (decisions to exclude evidence). 

                                                   -4-                                             6774

----------------------- Page 5-----------------------

erred in its ruling.’ ”4 Even where a trial court abused its discretion, though, we will only 

reverse where “the error affected the substantial rights of a party.”5 

                Whether an entire type of damages is allowed is a question of law, which 

we review de novo.6      Statutory interpretation is also a question of law, which we review 

de novo.7 


        A.	     There Was No Contract With Tamarack To Repair The Plane After 

                The Accident. 

                1.	     Madonna argues that his claims sound in contract, not tort. 

                The   superior   court   treated   this   case   as   a   straightforward   trial   for   tort 

damages.      But Madonna has consistently advanced a theory of the case that sounds in 

contract   and   is   apparently   convinced   that   this   approach   is   preferable. Specifically, 

Madonna argues that his longstanding oral contract with Tamarack to perform annual 

maintenance on his plane gave Tamarack more duties after the accident than an ordinary 

tortfeasor would have.      Madonna concedes that this duty to repair and give advice was 

never written down or even made explicit, but he argues that it was implied by Domke’s 

promises and Tamarack’s course of performance.              After Tamarack damaged the plane, 

Madonna argues, it had a duty not only to pay for the repairs, but also to give him 

        4       Getchell, 65 P.3d at 53 (quoting Liimatta v. Vest , 45 P.3d 310, 313 (Alaska 


        5       Id. (quoting Dobos v. Ingersoll , 9 P.3d 1020, 1023 (Alaska 2000)) (internal 

quotation marks omitted). 

        6       Alaska   Constr.   Equip.,   Inc.   v.   Star   Trucking,   Inc. ,   128   P.3d   164,   167 

(Alaska 2006). 

        7       Curran v. Progressive Nw. Ins. Co., 29 P.3d 829, 831 (Alaska 2001). 

                                                  -5-	                                           6774

----------------------- Page 6-----------------------

assistance and advice in making those repairs.                Madonna attempts to leverage these 

duties into a claim for punitive damages based on Tamarack’s post-accident conduct. 

                The trial court refused to let Madonna’s contract theory go to the jury.  At 

a   pretrial   hearing,   the   trial   court   entertained   arguments   on   the   issue   and   ruled   that 

Madonna       would    not   be  allowed    to  present   evidence    about    any   contractual   duties 

Tamarack may have had to repair the plane after the accident. 

                On the first day of trial, Madonna again attempted to admit evidence that 

Tamarack had a contractual obligation to help him repair his plane.  The trial court again 

ruled that such evidence would not be admitted, but it allowed Madonna to make an offer 

of proof and preserve his objection for appeal. Madonna offered two pieces of evidence 

to support his claim.   First, he testified that Domke had promised to “care for [the plane] 

with all the attention that she would give her own airplane and maintain it in excellent 

condition.”  Second, he testified that Tamarack had once refastened, for free, an exhaust 

clamp bracket it had forgotten to tighten during the annual inspection.8                Madonna now 

appeals the trial court’s ruling. 

                2.	      Tamarack   had   no   contractual   obligation   to   repair   the   plane 


                We agree with the trial court that Tamarack had no contractual obligation 

to repair the plane after the accident.        Madonna’s proffered evidence does not indicate 

otherwise.     The loose exhaust clamp, unlike the accident at issue, was a defect covered 

by   the   bargained-for   annual   maintenance.       Tamarack’s   contractual   duty   to   perform 

satisfactory maintenance on the plane obliged it to fix any problems that arose during the 

        8       Madonna also indicated that Tamarack had once repaired a hole in the 

fabric   that   Madonna   believed   had   been   caused   by   the   mechanics   at   Tamarack.       He 

admitted, though, that he had been charged for this repair, so this cannot be the basis of 

an unspoken agreement to fix the plane free of charge. 

                                                   -6-	                                               6774 

----------------------- Page 7-----------------------

maintenance process for no further charge, but here no work was being done on the plane 

when it was damaged.9        It was merely resting in Tamarack’s parking field when it was 

accidentally towed into two other planes.  Tamarack’s resulting obligation to pay for the 

damage, therefore, has nothing to do with any obligation Tamarack may have had to 

make annual repairs on the plane. 

                Madonna also points to Domke’s promise to “care for [the plane] with all 

the attention that she would give her own airplane and maintain it in excellent condition.” 

We have previously held that a contract must have reasonably definite and certain terms 

to   be   enforceable.10  Here,   Domke’s   promise   was   vague   and   did   not   impose   a   duty 

beyond her common law obligation to pay for any damage she caused to Madonna’s 


                It is also fatal to Madonna’s claim that Domke did offer to make repairs on 

the   plane   after   reviewing   the   damage   with   him   and   estimating   the   cost. Madonna 

rejected this repair plan.     Madonna cannot now argue that Domke breached some duty 

to repair the plane herself unless he takes the untenable position that Tamarack had a 

perpetual obligation to submit repair plans until Madonna was satisfied and accepted one. 

Any contract to do so would be an unenforceable agreement to agree.11 

        9       There   is   surprisingly   little   evidence   in   the   record   concerning   how   the 

damage occurred, probably because Tamarack admitted liability for the accident.  Both 

parties agree that the plane was in Tamarack’s possession at the time of the accident, but 

Madonna has never alleged that Tamarack damaged it while actually conducting repairs. 

        10      Alaska Creamery Prods., Inc. v. Wells , 373 P.2d 505, 510 (Alaska 1962). 

        11      Davis v. Dykman , 938 P.2d 1002, 1009 (Alaska 1997). 

                                                  -7-                                             6774

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                3.	     Tamarack’s   status   as   bailee   does   not   impose   a   legal   duty   to 

                        repair damaged property. 

                Madonna also argues that we held in Burgess Construction Co. v. Hancock 

that a bailee is always obligated to repair bailed property damaged in her possession.12 

But ordinarily   a bailee has no fiduciary duty to the bailor and “a bailee’s liability is 

limited to ‘loss or injury to the bailed goods caused by [the bailee’s] failure to exercise 

the degree of care of a reasonably careful owner.’           No other duties [are] owed.”13       No 

contrary rule can be found in Burgess Construction Co. v. Hancock .                That case merely 

stands for the proposition that a bailee has the burden of explanation and proof if she 

wishes to avoid liability for damage caused to bailed property in her care.14             It does not 

impose a duty on the bailee to fix the damaged property herself in a specified manner. 

        B.	     The   Trial   Court   Did   Not   Err   By   Rejecting   Madonna’s   Claim   For 

                Punitive Damages. 

                Madonna argues that Tamarack breached the covenant of good faith and 

fair dealing implicit in every Alaska contract by refusing to coordinate the repairs to 

Madonna’s plane after it was damaged and by failing to compensate him for the cost of 

repairs without the need for legal intervention.  Madonna sought punitive damages based 

upon     this  alleged  breach   of   the  implied   covenant   of   good   faith  and  fair  dealing. 

Madonna asked the trial court to submit the question of punitive damages to the jury. 

Tamarack filed a motion for summary judgment on this point, and the trial judge granted 

it.   Tamarack also asked the trial court to exclude evidence of communications between 

        12      514 P.2d 236 (Alaska 1973). 

        13      Alaska Cont’l, Inc. v. Trickey , 933 P.2d 528, 536 (Alaska 1997) (quoting 

Dresser Indus., Inc. v. Foss Launch & Tug Co. , 560 P.2d 393, 395 (Alaska 1977)). 

        14      Burgess Constr. Co. , 514 P.2d at 239. 

                                                  -8-	                                          6774

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Madonna and Tamarack’s insurer, which Madonna planned to use to show Allstate’s 

misconduct.     The trial court granted this motion too.         Madonna appeals these rulings. 

                Punitive damages are a harsh remedy not favored in law.15  “ ‘[W]here there 

is no evidence that gives rise to an inference of actual malice or conduct sufficiently 

outrageous to be deemed equivalent to actual malice,’ the trial court need not, and indeed 

should not, submit the issue of punitive damages to the jury.”16               “The fact finder may 

make an award of punitive damages only if the plaintiff proves by clear and convincing 

evidence that the defendant’s conduct (1) was outrageous, including acts done with 

malice or bad motives; or (2) evidenced reckless indifference to the interest of another 


                Ordinarily, punitive damages are more readily available in a tort case than 

a contract case.   But Madonna allows that Tamarack did nothing so outrageous as to be 

sanctioned with punitive damages in tort.  Instead, Madonna argues that Tamarack had 

a contractual duty to help him repair the plane, that Tamarack breached the covenant of 

good faith implicit in this contract by refusing to make those repairs, and that this breach 

warrants punitive damages.   But we have already held that Tamarack had no contractual 

obligation   to   make   repairs   itself.   Moreover,   even   if   such   a   contract   had  existed, 

Madonna’s argument that punitive damages are warranted is based primarily on the 

actions of Allstate, Tamarack’s insurer.  But we held in O.K. Lumber Co. v. Providence 

Washington Insurance Co. that an injured claimant may not sue the defendant’s insurer 

        15      Chizmar v. Mackie, 896 P.2d 196, 210 (Alaska 1995) (citing State Farm 

Mut. Auto. Ins. Co. v. Weiford, 831 P.2d 1264, 1266 (Alaska 1992)). 

        16      Id. 

        17      AS 09.17.020(b). 

                                                  -9-                                             6774

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for breach of the duty of good faith and fair dealing.18         Therefore, Madonna’s contract- 

based claim for punitive damages must fail. 

        C.	     Madonna Was Not Prejudiced By The Trial Court’s Refusal To Allow 

                Him     To   Question     Domke     Regarding      Whether      She   Had    Received 

                Madonna’s August 20, 2009 Letter To Allstate. 

                On August 20, 2009, Madonna wrote a letter to Allstate and included the 

estimated cost of sending the plane to the Aviat factory in Wyoming.  At trial, Madonna 

tried   to   ask   Domke   if   she   had   received   or   had   knowledge   of   this   letter. Tamarack 

objected to the question, and   the   trial court sustained the objection.            Madonna now 

appeals this ruling. 

                Madonna argues that receipt of the letter is evidence that Tamarack knew 

of Madonna’s plan to repair the Husky in Wyoming, yet said nothing.  He argues in turn 

that Tamarack’s silence is evidence that the plan was reasonable.               Thus, he claims, the 

letter was relevant and its exclusion was erroneous. 

                But even if exclusion of the letter was erroneous, Madonna bears the burden 

of showing that this evidentiary ruling was prejudicial.19            He has not met this burden 

because he has not shown that exclusion of the letter had a “substantial influence” on the 

outcome of the trial.20 

                The letter includes Aviat’s estimated cost to repair the Husky and Aviat’s 

address in Wyoming. From this Tamarack could have deduced Madonna’s plan to repair 

the plane out of state.    But the jury’s award was far higher than Tamarack’s estimated 

cost of repairing the plane locally, so we must assume that the jury accepted Madonna’s 

        18      759 P.2d 523, 526 (Alaska 1988). 

        19      See,   e.g.,  Loof   v.   Sanders,   686   P.2d   1205,   1209   (Alaska   1984)   (citing 

Alaska R. Civ. P. 61). 

        20      Id. (citing Martinez v. Bullock , 535 P.2d 1200, 1206-07 (Alaska 1975)). 

                                                 -10-	                                           6774

----------------------- Page 11-----------------------

argument that it was reasonable to repair the plane in Wyoming.  In fact, it appears that 

the only costs the jury did not reimburse him for were a few expenses associated with 

unloading   the   plane   in   Wyoming.21    These   expenses   were   related   to   the   method   of 

transportation, not the decision to repair the plane at the factory.          Because the verdict 

already    reflects  the  jury’s  judgment     that  it  was  reasonable   to  repair  the  plane   in 

Wyoming, Madonna has not shown that exclusion of the letter was prejudicial.  We 

therefore conclude that exclusion of the letter was not reversible error. 

        D.	     The Trial Court Did Not Err By Precluding Madonna’s Claim For 

                Lost Income To His Business. 

                Madonna is a professor emeritus of geology at the University of Alaska. 

He    currently   runs  a  gemstone    shop   and   museum,     selling  prospecting    and   mining 

equipment as well as valuable rocks and minerals.            The shop is only open five months 

a year, from April to September.        Madonna is the only employee, and the specialized 

knowledge required to run the shop and museum makes it difficult to hire additional 


                Madonna asserts that he was forced to spend a significant amount of time 

arranging for repairs of his plane after the accident.  Madonna claims that this prevented 

him from working in his shop and significantly reduced his income.               He was prepared 

to present evidence that his earnings for the 2009 year were significantly lower than 

average.    The judge refused to allow Madonna to   present   this evidence, ruling that, 

        21      Although it is difficult to determine the precise genesis of the jury’s award, 

it is clear from an examination of the evidence that the jury compensated Madonna for 

the majority of the expenses he incurred shipping the plane to Wyoming.  It appears that 

the jury only declined to award Madonna the cost of unloading the plane and reinstalling 

the wings, as well as installing the transponder and other small upgrades and routine 

maintenance.       This    interpretation   closely   tracks   portions   of  Tamarack’s      closing 


                                                -11-	                                          6774

----------------------- Page 12-----------------------

without more corroboration or specific evidence, it was too speculative to go to a jury. 

Madonna appeals this ruling. 

                As a general rule, an injured party should be compensated for profits lost 

due to that injury if those losses are reasonably certain.22        But the jury “must be able to 

determine   the   amount   of   lost   profits   from   evidence   on  the  record   and   reasonable 

inferences therefrom, not from mere speculation and wishful thinking.”23 

                Madonna has presented no evidence to suggest that the trial court erred by 

ruling that the claim was too speculative to go to the jury.          At oral argument before us, 

Madonna conceded that he never made an offer of proof beyond testimony about the 

time it took to address the repairs and evidence that Madonna’s shop made less than the 

prior year.   And as the trial court judge pointed out: 

                [L]et’s assume [the tax returns showing lost profit] come in. 

                The cross examination then goes into his life, his emotional 

                state, his personal life, what’s happening in his life . . . there 

                can be a whole bunch of reasons why income is decreased if 

                somebody       is  running   a  one-man      shop   .  .  .  .  It’s  too 

                speculative and it invites too many other side issues that are 

                collateral to this case. 

We cannot conclude that the trial court erred by ruling that a claim for lost profits based 

on this evidence alone was too speculative to reach the jury. 

        E.	     The Trial Court Did Not Err By Refusing To Allow Madonna’s Claim 

                For The Cost Of Charter Trips To The Brooks Range To Go The Jury. 

                Madonna claims that while his Husky was damaged, he wanted to take two 

charter flights, one to the Black Rapids Glacier and one to the Brooks Range.  Madonna 

        22      See State v. Hammer, 550 P.2d 820, 824-25 (Alaska 1976);Dowling Supply 

& Equip., Inc. v. City of Anchorage, 490 P.2d 907, 909 (Alaska 1971); Suntrana Mining 

Co. v. Widich, 360 P.2d 84, 89 (Alaska 1961). 

        23	     Hammer , 550 P.2d at 825. 

                                                 -12-	                                            6774 

----------------------- Page 13-----------------------

solicited bids for both trips and received estimates that it would cost $5,000 for a trip to 

the Black Rapids Glacier and $8,800 for four round trips to the Brooks Range. 

                The trial court allowed Madonna to ask the jury for compensation for the 

cost of the Black Rapids Glacier trip, but not the cost of the Brooks Range charter flights. 

Madonna now appeals the trial court’s ruling. 

                Madonna cites Burgess Construction Co. v. Hancock for the proposition 

that the owner of damaged property is entitled to recover the rental cost of replacement 

equipment while it is down for repairs.24          But Madonna apparently waived this claim 

during discovery.  At his deposition, Madonna repeatedly said that he was not claiming 

damages   for   being   unable   to   make   trips   to   the   Brooks   Range   in   the   Husky. And 

Tamarack raised this objection at trial.  One purpose of discovery is to narrow the issues 

at trial, and a claim waived in discovery ordinarily cannot be resuscitated at trial.25           We 

therefore conclude that the trial court did not err by preventing Madonna from asking the 

jury for the cost of charter trips to the Brooks Range. 

        F.	     The Trial Court Did Not Err By Refusing To Allow Madonna’s Claim 

                For Lost Interest On The Value Of The Damaged Plane To Go To The 


                Madonna argues that he should be compensated for the “lost interest on his 

investment in the plane” while it was damaged.             It appears that this is a claim for the 

interest Madonna would have earned during the period the Husky was damaged if he had 

never bought the plane and had instead invested the purchase money. 

        24      514 P.2d 236 (Alaska 1973). 

        25      See McKibben v. Mohawk Oil Co., 667 P.2d 1223, 1231-32 (Alaska 1983) 

(interrogatories requiring party to state in detail facts upon which claim is based are 

proper in order to narrow the issues), overruled on other grounds by Wien Air Alaska v. 

Bubbel, 723 P.2d 627, 631 n.4 (Alaska 1986). 

                                                 -13-	                                          6774

----------------------- Page 14-----------------------

                 The   trial   court   did   not   allow   this   claim   to   go   to   the   jury,   finding   that 

Madonna would be appropriately compensated for this hypothetical lost return on his 

money by pre- and post-judgment interest.               That analysis is correct.26      We therefore 

conclude that the trial court did not err by refusing to allow Madonna’s claim to go to the 


        G.	      The Trial Court Did Not Err By Awarding Prejudgment Interest At 

                 The Statutory Rate. 

                 Madonna argues that the money he used to repair his plane would otherwise 

have earned interest at 10.65% and that prejudgment interest on the jury award should 

have been set accordingly.   The trial court judge ruled that the interest rate was a matter 

to be determined after damages and refused to let evidence of the higher interest rate go 

to the jury.    After trial, the judge awarded prejudgment interest at the statutory rate of 

3.75% and denied Madonna’s motion to set a higher interest rate without explanation. 

Madonna now appeals this ruling, arguing that this case falls within an exception to the 

statutory interest rate. 

                Alaska Statute 09.30.070(a) fixes prejudgment interest for all judgments 

except for “a judgment or decree founded on a contract in writing.”  Here, the trial court 

correctly ruled that there was no contract. 

                 Madonna argues that support for his contention can be found in Tookalook 

Sales   &  Service   v.   McGahan .27     In   that   case,   Tookalook   sold   the   plaintiffs   a   motor 

        26      See Pratt & Whitney Canada, Inc. v. Sheehan , 852 P.2d 1173, 1183 (Alaska 

 1993) (finding no authority for awarding prejudgment interest on the full value of a 

damaged plane in addition to repair damages). 

        27	      846 P.2d 127 (Alaska 1993). 

                                                   -14-	                                              6774 

----------------------- Page 15-----------------------

home.28	 The plaintiffs financed the purchase with a third-party bank.29  Dissatisfied with 

the motor home, the plaintiffs rescinded the contract and sued Tookalook to recover the 

purchase money.30       A jury found for the plaintiffs, and the trial court awarded interest on 

the judgment at the rate at which they had borrowed money from the bank: 

                In   cases   where   a   party   borrows   money   from   a   third-party 

                lender to meet its contractual obligations, and the contract is 

                subsequently   rescinded,   the   borrowing   party   may   recover 

                interest on the amount borrowed as calculated by using the 

                higher     of  the  contractual     interest  rate  and    the  statutory 

                interest rate.[31] 

                Madonna argues that “[s]ince a plaintiff can recover the cost of borrowed 

funds, Madonna should be able to recover the lost interest from his own investment 

account.    Both are caused by the same thing and both are readily quantified.”                    But in 

Tookalook,   the   plaintiff   had   a   written   contract   to   repay   money   at   the   higher-than­ 

statutory   rate.   In   the   current   case,   Madonna   had   no   such   contract.  Therefore,   we 

conclude that the trial court did not err by setting prejudgment interest at the statutorily 

set rate. 

        H.	     The   Trial   Court   Did   Not   Err   By   Denying   Madonna’s   Motion   To 

                Compel        Post-Trial     Discovery       And    Award       Attorney’s      Fees    To 


                Along with his motion asking the trial court to set prejudgment interest 

at   a  rate  higher   than   the  statutory   default   rate,  Madonna      also   noticed   an   Alaska 

Civil Rule 30(b)(6) deposition of “the person at Defendant or its insurer most familiar 

        28      Id. at 128. 

        29      Id. 

        30      Id. 

        31      Id. at 130. 

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with the rate of interest or appreciation Defendant’s insurer has earned on its investments 

from June 5, 2009 to the present.”          Madonna hoped this deposition would reveal that 

Allstate   earned   significant   interest   on   the   money   it   saved   by   not   paying   for   repairs 

immediately.       This,   he  argues,    would    have    bolstered    his  case   that  the   statutory 

prejudgment interest rate was inadequate. Tamarack informed Madonna that it objected 

to the proposed deposition and would seek sanctions if he persisted with his plan. 

                Nevertheless, Madonna attempted a telephonic deposition. By all accounts 

it was a failure.     Tamarack offered to have Tamarack’s owner testify, but refused to 

produce   anyone   from   Allstate   or   anyone   with   knowledge   of   Allstate’s   investments. 

Madonna, in turn, said that he was not interested in talking to anyone from Tamarack. 

After the deposition, Tamarack filed a motion for a protective order or for sanctions.  A 

day later, Madonna filed a motion to compel Tamarack to produce a witness pursuant to 

his deposition notice.  The trial court denied Madonna’s motion to compel and awarded 

Tamarack   $200   in   attorney’s   fees.     Madonna   now   argues   that   those   decisions   were 


                Tamarack       makes     several    convincing     arguments      that   the  attempted 

deposition was improper. Tamarack argues that the time for discovery had closed before 

trial,  that  inquiry    into  Allstate’s   investments     could    not  possibly    lead  to  relevant 

information,32 and that Tamarack did not represent Allstate, nor was Allstate a party to 

this litigation.  We agree with all of these arguments. 

        32      Madonna argues that Allstate’s return on investment is relevant because, 

if it is higher than 3.75%, that would bolster his claim that the statutory rate of interest 

“was far below Madonna’s actual loss and (suspected) Allstate’s actual gain.”                       This 

conflicts with our principle of compensation, which looks not to the benefit conferred on 

Allstate, but to the damage done to Madonna.  See State v. Hammer, 550 P.2d 820, 824 

(Alaska 1976). 

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               Madonna also argues that, in any case, the trial court should have awarded 

attorney’s fees to Madonna, not Tamarack.        Citing Alaska Civil Rule 37(d), Madonna 

argues that attorney’s fees are mandatory whenever the opposing party fails to attend a 

deposition.   But this is not true.  That rule says that “the court shall require the party 

failing to act . . . to pay the reasonable expenses, including attorney’s fees, caused by the 

failure, unless the court finds that the failure was substantially justified or that other 

circumstances make an award of expenses unjust.”33       Here, the trial court determined that 

Madonna’s deposition notice was improper, and Tamarack was fully justified in any 

failure to attend.  Therefore, the trial court was not bound to award attorney’s fees to 

Madonna.   Under Civil Rule 37(a)(4)(B), if a motion to compel discovery is denied, the 

trial court must award reasonable attorney’s fees to the opposing party, unless such 

expenses would be unjust.34     Therefore, the trial court did not err by awarding $200 in 

attorney’s fees to Tamarack. 


               Because the trial court did not err in its rulings, we AFFIRM that court in 

all respects. 

       33      Alaska R. Civ. P. 37(d) (emphasis added). 

       34      “If the motion [to compel discovery] is denied, the court . . . shall, after 

affording an opportunity to be heard, require the moving party or the attorney filing the 

motion or both of them to pay to the party or deponent who opposed the motion the 

reasonable expenses incurred in opposing the motion, including attorney’s fees, unless 

the court finds that the making of the motion was substantially justified or that other 

circumstances make an award of expenses unjust.”         Alaska R. Civ. P. 37(a)(4)(B). 

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