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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Boiko v. Kapolchok (8/24/2018) sp-7278

Boiko v. Kapolchok (8/24/2018) sp-7278

           Notice:   This opinion is subject to correction before publication in the P                    ACIFIC  REPORTER.  

           Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  


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                      THE SUPREME COURT OF THE STATE OF ALASKA                                       

INNA  V.  BOIKO  and                                             )  

LOUIS  PICARELLA,                                                )    Supreme  Court  Nos.  S-16482/16512  



                                Appellants and                                                                                   

                                                                 )    Superior Court No. 3AN-14-10765 CI  

                                Cross-Appellees,                 )  

                                                                 )    O                    

                                                                          P I N I O N  

           v.                                                    )  

                                                                 )    N                                      

                                                                         o. 7278 - August 24, 2018  


GEORGE M. KAPOLCHOK and                                          )


GEORGE KAPOLCHOK LAW                                             )


OFFICES, INC.,                                                   )



                                Appellees and                    )

                                Cross-Appellants.                )




                        ppeal from the Superior Court of the State of Alaska, Third  


                     Judicial  District,  Anchorage,  Pamela  Scott  Washington,  


                     Judge pro tem.  


                     Appearances:   James Alan  Wendt, Law Offices of James  


                     Alan  Wendt,  Anchorage,  for  Appellants/Cross-Appellees.  


                     George M. Kapolchok, George Kapolchok LawOffices, Inc.,  


                     Anchorage, for Appellees/Cross-Appellants.  


                     Before:  Stowers, Chief Justice, Winfree, Maassen, Bolger,  


                     and Carney, Justices.  


                     WINFREE, Justice.  

----------------------- Page 2-----------------------


                    A self-represented couple sued their lawyer for legal malpractice.  After  


lengthy  and  contentious  discovery  disputes,  at  the  end  of  which  the  couple  was  


sanctioned, the couple retained counsel to assist them in terminating the litigation.  The  


parties agreed to dismiss the  suit  with prejudice, leaving open the couple's former  


lawyer's right to seek an award of attorney's fees.  This appeal focuses  on the superior  


court's decisions regarding that lawyer's motion for attorney's fees.  


                    Very   early   in   the   litigation   the  lawyer   gave   the   couple   a   joint,  


unapportioned Alaska Civil Rule 68 offer of judgment.  The superior court ruled the  


offer was invalid. Following our precedent that joint, unapportioned offers of judgment  


generally are invalid, we affirm the superior court's ruling as a matter of law.  


                    The superior court applied Alaska Civil Rule 82 for its award of partial  


reasonable attorney's fees to the lawyer.   But instead of employing Rule 82(b)(2)'s  


standard 20% calculation for an award without a money judgment, the court applied  


Rule 82(b)(3), which allows courts to vary from the standard award.  The court made  


findings and exercised its discretion to use 15% for calculating its fee award to the  


lawyer, and it left the discovery sanction against the couple in place.  We conclude that  


the superior court's findings are not clearly erroneous and that the court did not abuse  


its discretion or otherwise err when it applied Rule 82(b)(3); we also conclude that the  


court did not abuse its discretion in levying and leaving in place the discovery sanction.  


                    We therefore affirm the superior court's judgment.  




                    Inna Boiko and Louis Picarella retained attorney George Kapolchok and  


his law firm to represent them in dental malpractice and loss of consortium claims after  


Boiko underwent procedures allegedly resulting in disfigurement and extreme pain. The  


dentist moved for partial summary judgment, arguing that the statute of limitations  


                                                               -2-                                                        7278

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


period had expired before the initial complaint was filed.  Boiko and Picarella opposed,  


asserting that there were genuine issues of material fact regarding the date the statute of  


limitations began to run.  


                    While the summary judgment motion was pending, the parties engaged in  


settlement negotiations.   Months later, on December 13, 2012, the court denied the  


motion, holding that - based on the continuing course of treatment doctrine - the  


original complaint was timely filed.  A certificate of distribution on the order indicates  


it was mailed to the parties' attorneys the day it was issued. On December 17 Boiko and  


Picarella  signed  a  settlement  agreement  in  Kapolchok's  office.                                  They  stipulated  to  


dismissal of the case, with prejudice, in return for a settlement payment.  The day after  


the  settlement  agreement  was  signed,  Kapolchok's  paralegal  emailed  Picarella  the  


favorable summary judgment decision.  


                    Boiko  and  Picarella,  self-represented,  subsequently  filed  a  complaint  


against Kapolchok and his law firm (collectively Kapolchok unless otherwise noted).  


They contended that they had settled the dental malpractice lawsuit without knowledge  


of the favorable summary judgment ruling and that Kapolchok deliberately had withheld  


the decision to  induce them to  settle at that time.                             They  alleged  legal malpractice,  


intentional  and  negligent  misrepresentation,  intentional  and  negligent  infliction  of  


emotional distress, breach of fiduciary duties, breach of contract, and unfair business  



                    Kapolchok retained a second attorney to represent his corporate law firm  


and assist him in defending the legal malpractice claim.  One month after service of the  


complaint, Kapolchok made the couple a $1,500 joint, unapportioned Rule 68 offer of  

                                                                -3-                                                         7278

----------------------- Page 4-----------------------


judgment.   The offer was not accepted. Following a lengthy and contentious discovery                                                                                                                                                    

 process, including Kapolchok filing several motions to compel, the superior court levied                                                                                                                                                           

 $2,000 in sanctions against Boiko and Picarella:                                                                                                        $1,000 to be paid to the court, and                                                               

 $1,000 to be paid to Kapolchok.                                                                    

                                         At this point Boiko and Picarella hired an attorney, who filed a motion for                                                                                                                                          

 complete dismissal of their claims with prejudice, conditioned on their ability to contest                                                                                                                                                      

 any attorney's fees motion by Kapolchok.  The superior court dismissed the case with   

 prejudice and gave Kapolchok a deadline to file a motion for attorney's fees.                                                                                                                                                             

                                         Boiko and Picarella preemptively moved for the superior court to hold the                                                                                                                                            

                                                                                                                                                                                                                                               2  and to  

 Rule 68 offer of judgment invalid because it was an unapportioned, joint offer                                                                                                                                                                                 

 instead calculate any attorney's fees award under Rule 82.3  Kapolchok opposed, arguing  


 that  no  apportionment  problems  existed  because  they  were  husband  and  wife  and  


 Picarella's loss of consortiumclaimwas purely derivative ofBoiko's claims. Kapolchok  


 noted they had accepted a joint check for the dental malpractice settlement, undermining  


 their purported need for apportioned offers in thelegal malpracticecase. Kapolchok then  


 sought attorney's fees under Rule 68.  He contended that after a year's defense work he  


 had incurred $85,296 in fees and was entitled to an award of 75% of that amount.  


                                         Boiko and Picarella opposed; they asserted that instead of Rule 82's usual  


 20%  award,  the  court  should  decline  to  award  any  attorney's  fees  at  all.                                                                                                                                                                  They  


                     1                   See  Alaska R. Civ. P. 68 (providing rules for offer of judgment and that                                                                                                                                         

 offeree shall pay offeror's allowable costs and reasonable attorney's fees incurred after                                                                                                                                                               

 offer date if final judgment is a given percentage "not more favorable" than offer).                                                                                                                                                                       

                     2                   See John's Heating Serv. v. Lamb, 46 P.3d 1024, 1041-42 (Alaska 2002)  


 (discussing difficulties of unapportioned joint offers in Rule 68 context).  


                     3                   See Alaska R. Civ. P. 82 (providing standard schedule and enumerating  


 grounds for varying attorney's fee awards).  


                                                                                                                                -4-                                                                                                                     7278

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

enumerated several grounds for a variance under section (b)(3) of the rule, including                                                                  

reasonableness of their legal malpractice claims, Kapolchok's vexatious and bad faith                                                                            

conduct in boththedental and legal malpractice                                             cases, and their status as self-represented           



                          Before Kapolchok replied, the superior court ruled without elaboration that  


the Rule 68 offer of judgment was invalid. Kapolchok then recomputed his prospective  


fee award under Rule 82, submitting billings dating back to the first day of litigation  


instead of the offer of judgment, totaling $123,099.50.  Kapolchok also requested an  


enhancement  from  20%  to  50%  under  section  (b)(3)  of  the  rule,  based  on  the  


unreasonableness of Boiko's and Picarella's claims and their vexatious and bad faith  


conduct throughout the litigation.5  


                          Thesuperiorcourt awarded Kapolchok Rule82 attorney'sfees,but reduced  


the calculation from 20% to 15% under section (b)(3) of the rule.  The final judgment  


included the discovery sanction levied against Boiko and Picarella, for a total judgment  


of $18,902.33.  


                          Boiko and Picarella filed a motion to reconsider, arguing that the court  


should  have  considered  Kapolchok's  vexatious  conduct  in  the  underlying  dental  


malpractice  case  and  that  the  court  overlooked  Kapolchok's  use  of  privileged  


information to harass the couple in the present litigation.  The court denied the motion,  


stating that "[i]t is not appropriate for this court to consider [Boiko's and Picarella's]  


claims about [Kapolchok's] bad faith or vexatious conduct in the underlying action that  


             4            See  Alaska R. Civ. P. 82(b)(3)(F) (reasonableness of claims and defenses),                                                  

(G)  (vexatious or bad faith conduct), and (K) (other equitable factors).                                                 

             5            See Alaska R. Civ. P. 82(b)(3)(F) (reasonableness of claims and defenses)  


and (G) (vexatious or bad faith conduct).  


                                                                                  -5-                                                                           7278

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

forms the basis of this malpractice case when deciding whether to enhance or reduce                                                                                                                                         

attorney fees in this case."                                               

                                     Boikoand Picarellaappeal thecourt's decision                                                                                   to awardattorney's fees and                                       

to maintain the discovery sanction.                                                                    Kapolchok cross-appeals, challenging both the                                                                                  

court's decision invalidating the Rule 68 offer and its decision to reduce rather than                                                                                                                                            

enhance attorney's fees under Rule 82(b)(3).                                                       

III.               STANDARD OF REVIEW                                 

                                     The validity of a Rule 68 offer of judgment presents a question of law that                                                                                                                     


we review de novo.                                                                                                                                                                                                                       

                                                           We review an award of attorney's fees under Rule 82 for abuse of  


discretion and will not disturb the award on appeal unless it is "arbitrary, capricious,  


manifestly unreasonable, or improperly motivated."   When an award or enhancement  


"calls into question [a party's] litigation conduct and the potential merits of [the party's]  


underlying . . . motions, we assess de novo the legal and factual viability of [the] motions  

                                                                                                                                           8  We review imposition of discovery  


and review relevant findings of fact for clear error." 

 sanctions for abuse of discretion.9  


                   6                 Marshall v. Peter                               , 377 P.3d 952, 956 (Alaska 2016);                                                              Progressive Corp. v.                                 

Peter ex rel. Peter, 195 P.3d 1083, 1089 (Alaska 2008);                                                                                                      Pagenkopf v. Chatham Elec.,   

Inc., 165 P.3d 634, 638 (Alaska 2007) (treating Rule 68 offer and acceptance as contract                                                                                                                                 

and therefore applying de novo review).                                                                          

                   7                 Kollander v. Kollander, 400 P.3d 91, 95 (Alaska 2017) (quoting Roderer  


v. Dash, 233 P.3d 1101, 1106 (Alaska 2010)).  


                   8                 Herring v. Herring, 373 P.3d 521, 528 (Alaska 2016) (first threealterations  


in original) (quoting Johnson v. Johnson, 239 P.3d 393, 399 (Alaska 2010)); Cizek v.  


 Concerned Citizens of Eagle River Valley, Inc., 71 P.3d 845, 848-49 (Alaska 2003).  


                   9                 Roderer, 233 P.3d at 1106.  


                                                                                                                    -6-                                                                                                          7278

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



          A.        The Rule 68 Offer Was Invalid.  


                    Kapolchok made a $1,500 joint offer of judgment to Boiko and Picarella  


"in complete satisfaction of all [their] claims."   Kapolchok argues that the couple's  


rejection of this offer compelled the superior court to employ Rule 68's more generous  


formula for calculating attorney's fees.  We conclude otherwise.  


                    Rule   68's   goal   is   to   "encourage   settlement   and   avoid   protracted  



litigation."         It allows a party before trial to make an offer of judgment "in complete  



satisfaction of the claim . . . with costs then accrued."                          If the offer is served less than 60  


days after the date set for initial disclosures, the offeree does not accept within 10 days,  


and the ultimate judgment is "at least [5%] less favorable to the offeree than the offer,"  



then the offeree must pay 75% of the offeror's reasonable and actual attorney's fees. 

The rule "creates a financial incentive for settlement by 'encourag[ing] parties to assess  


their litigation risks carefully and penaliz[ing] an offeree's rejection of a reasonable  


settlement offer.' "13  


          10        Beal   v.  McGuire, 216   P.3d   1154,   1178   (Alaska   2009);  see  Progressive  

Corp.,   195  P.3d  at   1088.  

          11        Alaska  R.  Civ.  P.  68(a).   

          12        Alaska R. Civ. P. 68(a), (b)(1).  


          13        Marshall  v.  Peter,  377  P.3d  952,  957  (Alaska  2016)  (alterations  in  original)  

(quoting   Windel  v.  Mat-Su  Title  Ins.  Agency,  Inc.,  305  P.3d  264,  279  (Alaska  2013)).   

                                                                -7-                                                         7278

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


                       But "[n]ot all settlement offers trigger Rule 68."                                   An invalid offer "may   


notbeconsidered               in determining costs andattorney's fees."                                                          

                                                                                                     Apportionment difficulties  

                                                                                                            16    We have held that  



are one ground upon which a court may find an offer invalid. 

difficulties  are  "intrinsic  to  cases  involving  unapportioned  joint  offers  because  the  


offerees must agree . . . how proceeds are to be divided."17  "In determining whether a  


joint  offer  may  nonetheless  be  valid,  we  consider  two  factors:                                           (1)  whether  '[t]he  


 settlement offer clearly indicated all claims between the parties would be resolved if the  


offer  were  accepted';  and  (2)  whether  apportionment  difficulty  actually  exists."18  


Apportionment difficulties exist "if [the offer] would leave unresolved serious disputes  


that, absent settlement, would have to be resolved by a jury."19  


                       The  parties  dispute  only  the  second  prong,  whether  "apportionment  


                                                20  Kapolchokasserts thejoint offer was appropriatebecause  

difficultyactually exist[ed]."                                                                                                        


Picarella's claims were purely derivative in both the dental and legal malpractice cases,  


and no apportionment difficulties existed between the husband and wife, as they had  


accepted a joint offer for the dental malpractice case.  Kapolchok also contends that we  


            14         Id.  

            15        Alaska Fur Gallery,                  Inc.   v.   First Nat'l Bank Alaska                    ,   345   P.3d   76,   98  

 (Alaska 2015) (quoting                  Grow v. Ruggles             , 860 P.2d 1225, 1227 (Alaska 1993)).                              

            16         See John's Heating Serv. v. Lamb, 46 P.3d 1024, 1042 (Alaska 2002).  


            17         Id. ; see also Alaska Fur Gallery, Inc., 345 P.3d at 99 ("[J]oint offers . . . are  


usually invalid as Rule 68 offers of judgment due to apportionment difficulties.").  


            18        Alaska Fur Gallery, Inc. , 345 P.3d at 99 (alteration in original) (quoting  


John's Heating Serv., 46 P.3d at 1042 & n.85).  


            19         Roderer v. Dash, 233 P.3d 1101, 1113 (Alaska 2010).  


            20         See Alaska Fur Gallery, Inc., 345 P.3d at 99.  


                                                                       -8-                                                               7278

----------------------- Page 9-----------------------

are obligated to remand because the court failed to specify any basis for holding the offer                                                                                                     

invalid, hindering Kapolchok's ability to contest the ruling.                                                                                

                               We disagree on both counts. Although the superior court's decision did not                                                                                           

explicitly state the basis upon which it found the Rule 68 offer invalid, it need not have                                                                                                      

                    21   Apportionment was the sole basis upon which the parties litigated the offer's  

done so.                                                                                                                                                                                    

validity.                 Contrary  to  Kapolchok's  assertions,  we  see  no  reason  to  remand  for  




                               We also agree with the superior court that the offer was invalid.   The  


$1,500 offer to Boiko and Picarella was a classic joint offer:  an offer of a lump sum to  


two offerees without reference to apportionment.22                                                                           Our past decisions recognize the  


difficulties of apportioning offers and hold that such difficulties "warrant a general  


exclusion of joint offers from the penal cost provisions of Rule 68."23  


                               Picarella had a separate legal malpractice claim and was thus owed an  


apportioned offer.  It is irrelevant that Boiko and Picarella were joint payees for the  


dental malpractice claim or treated as a single client by Kapolchok.  Picarella's original  


loss of consortium claim in the dental malpractice lawsuit being derivative does not bear  


on whether he had an independent legal malpractice claim in this litigation.  Kapolchok  


formed a separate attorney-client relationship with Picarella by obtaining his signature  


on the attorney-client fee agreement and adding his loss of consortiumclaimto the dental  


                21             See Parks v. Parks                         , 214 P.3d 295, 304 (Alaska 2009) ("Trial courts are not                                                                  

required   to   state   all   findings   in   their   written   orders   'so  long   as   the   basis   for   their  

decisions is clear from the record and thus susceptible to review.' " (quoting                                                                                                       Duffus v.  

Duffus, 932 P.2d 777, 779 (Alaska 1997))).                                                              

                22             See, e.g., John's Heating Serv., 46 P.3d at 1042 (citing Brinkerhoff v.  


Swearingen Aviation Corp., 663 P.2d 937, 943 (Alaska 1983)).  


                23             See Brinkerhoff, 663 P.2d at 943.  


                                                                                                  -9-                                                                                          7278

----------------------- Page 10-----------------------

 malpractice lawsuit.                                     Duties individually owed to Picarella flowed from the creation of                                                                                                             


 that attorney-client relationship in addition to thoseseparately owed to Boiko.                                                                                                                                       Because  


 Picarella had aseparate legal relationship with and therefore aseparate malpractice claim  


 against Kapolchok, Picarella was owed an apportioned offer.  


                                     We see no grounds for deviating from the general rule against joint offers  


 under the facts of this case.  Because we agree that the Rule 68 offer was invalid, we  


 affirm the superior court's decision to calculate attorney's fees under Rule 82.  


                   B.                The Rule 82 Attorney's Fees Award Was Not An Abuse of Discretion.  


                                     Rule 82(b)(2) provides that when a prevailing party recovers no money  


judgment and the case is resolved without trial, the court shall award the prevailing party  


 20%  of  its  actual  attorney's  fees.                                                               But  Rule  82(b)(3)  allows  the  court  to  vary  an  


 attorney's fees award upon consideration of certain enumerated factors as well as "other  



 equitable factors deemed relevant." 

                   24                Alaska Rule of Professional Conduct 1.7 provides guidance concerning                                                                                                      

 representation of multiple clients and emphasizes that an attorney bears responsibilities                                                                                                           

 to each.               The commentary to Rule 1.2, which details the principles governing the scope                                                                                                                          

 of a lawyer's representation, states that although lawyers and clients have "substantial                                                                                                                     

 latitude to limit the representation," such limitation "does not exempt a lawyer from the                                                                                                                                            

 duty   to   provide   competent   representation."     Alaska   R.   Prof.   Conduct   1.2   cmt.   7.   

 Kapolchok has not persuaded us that his representation of both Boiko and Picarella was                                                                                                                                             

 so limited or that he did not owe separate legal obligations to Picarella in the event a                                                                                                                                                  

 conflict did arise.              

                   25                Alaska R. Civ. P. 82(b)(3)(K).  


                                                                                                                  -10-                                                                                                          7278

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


                               We review all Rule 82 attorney's fees awards for abuse of discretion,                                                                                         and  

"[a]n award constitutes an abuse ofdiscretion                                                         only whenit is manifestly unreasonable."                                                    27  

In the event of a variance, "legal questions . . . are reviewed de novo, while exceptions  


                                                                                                                                      28     The court enjoys "broad  

that rely on factual findings are reviewed for clear error."                                                                                                         


discretion to award fees and to alter the amount it intends to award."29  



                               1.             Reduction of attorney's fees from 20% to 15%  


                               In determining whether varying an award under Rule 82 is warranted, the  



superior court may consider "the complexity of the litigation"                                                                                 and "the reasonableness  



of the numbers of attorneys used."                                                  It may also consider "the extent to which a given  


fee award may be so onerous to the non-prevailing party that it would deter similarly  



                                                                                                                                       as well as "other equitable  

situated litigants from the voluntary use of the courts," 



factors deemed relevant." 

               26             Herring v. Herring                           , 373 P.3d 521, 528 (Alaska 2016) (citing                                                         Johnson v.   

Johnson, 239 P.3d 393, 399 (Alaska 2010));                                                           Cizek v. Concerned Citizens of Eagle River                                           

 Valley, Inc.              , 71 P.3d 845, 850 (Alaska 2003) ("[T]he decision to award and to alter fees                                                                                      

under Rule 82 is committed to the discretion of the trial court and will only be reversed                                                                                          

if the court has abused its discretion.").                  

               27              Cizek, 71 P.3d at 848 (quoting Thorstenson v. ARCO Alaska, Inc., 780 P.2d  


371, 376 (Alaska 1989)).  


               28             Id . at 848-49.  


               29             Id. at 851.  


               30              Alaska R. Civ. P. 82(b)(3)(A).  


               31              Alaska R. Civ. P. 82(b)(3)(D).  


               32              Alaska R. Civ. P. 82(b)(3)(I).  


               33              Alaska R. Civ. P. 82(b)(3)(K).  


                                                                                              -11-                                                                                        7278

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                                                Here   the   court   reduced   the   fee   award  from   20%   to   15%   "due   to   the  

unreasonableness   of   paying   two   attorneys   to   defend   what   appears   to   be   a   rather  

unremarkable attorney malpractice case" brought by self-represented plaintiffs.                                                                                                                                                                                                                    This  

view was compounded by Kapolchok not documenting the full amount of fees sought,                                                                                                                                                                                                            

prompting the court to rely on a lower estimate. The fee reduction was further motivated                                                                                                                                                                                           

by   the   court's   policy   concern   that   "a   large   fee   award   may   deter   similarly   situated  

plaintiffs from bringing similar cases."                                                                                                    The court noted that "[i]mposition of a large fee                                                                                                               

award when a defendant attorney ultimately prevails insidiously closes the doors of the                                                                                                                                                                                                                    

courthouse ever so slightly to plaintiffs who choose to represent themselves and assume                                                                                                                                                                                                     

the formidable task of suing their former attorney."                                                                                                

                                                Kapolchok advances three arguments supporting his position that the court                                                                                                                                                                            

erred in its decision to reduce attorney's fees.                                                                                                                     First, Kapolchok argues that because he                                                                                                  

was sued both in an individual capacity and as a corporation, a second attorney had to   

be   retained   under   the   statute   requiring   that   corporations   appear   by   attorney.     But  

Kapolchok contorts the purpose of AS 22.20.040, requiring corporations to appear by                                                                                                                                                                                                                          

                                                                  34              The  essence  of  the  rule  is  that,  unlike  individual  persons,  

licensed   attorney.                                                                                                                                                                                                                                                                  

corporations do not have the right of self-representation.35                                                                                                                                                         But AS 22.20.040 does not  


require an  incorporated law firm to  obtain  outside counsel to  represent it in  court,  


                        34                      See  AS 22.20.040(a)(2) ("[A] corporation, either public or private, shall                                                                                                                                                                           

appear by attorney in all cases unless an exception to the corporation's appearance by                                                                                                                                                                                                                       

an attorney has been explicitly made by law.").                                                                                                  

                        35                      See Roberts v. State, Dep't of Revenue, 162 P.3d 1214, 1220-21 (Alaska  


2007)  (discussing  policy  reasons  for  preventing  lay  persons  from  representing  


corporation in litigation and concluding "[t]o allow an individual the protections of the  


corporate form, as well as the option to shed the corporate form when it serves his or her  


interest, undermines the purposes of [AS 22.20.040(a)(2)]").  


                                                                                                                                                    -12-                                                                                                                                             7278

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

however advisable that may be; the statute simply means a lay person cannot represent                                                                                                                                       

the law firm.          

                                      Second, Kapolchok disputes the court's characterization of the litigation as                                                                                                                               

"unremarkable" and "not complex."  Kapolchok frames the legal malpractice suit as a   

case involving the larger dental malpractice case, and he asserts he would have needed                                                                                                                                            

to hire at least 3 experts, conduct 30 depositions, and interview 40 doctors across 4                                                                                                                                                             

                                                                                                                                                                                                                                      36     He  

different states to defend the suit, which he claims sought $3 million in damages.                                                                                                                                                           

contendsretainingasecond attorney "to overseethelitigation was reasonable, necessary,  


and prudent."  


                                      In Nautilus Marine Enterprises, Inc. v. Exxon Mobil we upheld an award  


of fees when 15 attorneys had billed large sums for duplicative efforts; we accepted the  


superior court's rationale that "it is often advantageous to have more than one attorney  


present," and we concluded the award was not an abuse of discretion.37                                                                                                                                        But we did so  


out of recognition that a trial court is "uniquely situated" to analyze the reasonableness  


of fees "because of its 'greater knowledge of the case,' " and we emphasized that "[i]t  


is . . . for the trial judge to determine . . . whether too many attorneys were employed."38  


                                      Similarly, in Gamble v. Northstore Partnership we affirmed an award even  


though the prevailing party's fees were double those of the unsuccessful party, observing  


"it is a judgment call . . . whether such a discrepancy reflects over-preparation and over- 


billing by one set of attorneys, or under-preparation and under-billing by the other set  


                   36                 Boiko and Picarella did not specify damages in their legal malpractice                                                                                                        

complaint, stating only that they believed they were owed more than $100,000. The only                                                                                                                                                    

other concrete estimate they provided for losses and future expenses was $832,939.81.                                                                                                                           

                   37                 332 P.3d 554, 561 (Alaska 2014).  


                   38                 Id. (alterations in original).  


                                                                                                                     -13-                                                                                                               7278

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


of attorneys."                     We noted that "there was much discovery practice, two sets of motions                                                                    

for summary judgment, and a five-day trial" and that the trial court reviewed itemized   

billings and "was personally aware of the quality and quantity of the work . . . [done] at                                                                                               

                                 40  Given the record and the court's level of engagement, we concluded  

the trial level."                                                                                                                                                      

the court had not abused its discretion.41  


                             Here the superior court engaged in the type of analysis for which it is  


particularly well-suited: reviewing itemized billing, considering whether the number of  


attorneys  was  appropriate,  and  assessing  the  fees'  proportionality  to  the  case's  


requirements.42  The superior court was "personally aware" of the course and complexity  


of the litigation, "the quality and quantity of the work" performed, and the lengths to  


which Kapolchok was willing to go in defending his reputation from attack by his former  


                                                                                                                                                    43    The court found  

clients, who were rather unsuccessfully proceeding self-represented.                                                                                                             


that Kapolchok had over-billed for a case that was not complex and did not merit the  


attention of two attorneys.  Assuming none of the court's factual findings were clearly  


erroneous, it was within the court's discretion to reduce the percentage of fees awarded  


on this basis.  


                             Onreviewwe conclude that the superior court's findings with respect to the  


complexity of the case and the number of attorneys needed were not clearly erroneous.  


Contrary to Kapolchok's assertions, the legal malpractice claim's primary focus was a  


               39            28 P.3d 286, 289-90 (Alaska 2001).                                               

               40            Id.  at 290.            

               41            Id.   

               42            See Nautilus Marine Enters.                                   , 332 P.3d at 561.                      

               43            See Gamble                 , 28 P.3d at 290.                    

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simpler question:                                                   whether Kapolchok knew of and deliberately withheld information                                                                                                                                                      

about a favorable court ruling to induce his clients to settle rather than continue the                                                                                                                                                                                                                                   

litigation. It was not clearly erroneous to find that litigation over a document distribution                                                                                                                                                                                              

date was not complex and that billing for two attorneys' time, especially after the scope                                                                                                                                                                                                                        

of the litigation narrowed, was unreasonable.                                                                         

                                                  We also note that the billings submitted for computation under Rule 68                                                                                                                                                                                                    

show Kapolchok handled the lion's share of the work.                                                                                                                                                             It appears the second attorney                                                        

billed over $20,000 for communications with Kapolchok, document review, and a single                                                                                                                                                                                                                         

court appearance; the second attorney neither produced apparent work product nor                                                                                                                                                                                                                                        

engaged   expert   witnesses,   and   a   significant   portion   of   the   fee   requested   was   not  

supported by documentation. All court filings, consultation with experts, and discovery                                                                                                                                                                                                           

communications were done by Kapolchok alone.                                                                                                                                                    On this record, we cannot say the                                                                                         

superior court clearly erred in finding that only one attorney was needed.                                                                                                                                                                             

                                                  We continue to                                                 accept that it is often                                                                 necessary and                                               prudent to                                retain  

                                                                             44  and we do not at all mean to suggest a legal malpractice defendant  

additional attorneys,                                                                                                                                                                                                                                                                             

should  not  retain  counsel  for  representation.                                                                                                                                      However,  given  this  record  of  work  


allocation, as well as our general deference to the superior court's personal knowledge  


of the parties and the case,45  we cannot say the court's reduction of fees based on the  


number of attorneys was an abuse of discretion or premised upon clearly erroneous fact  



                                                  Finally, Kapolchok contends that the superior court's concern about a  


"chilling effect" on future litigants was improper.  But Rule 82(b)(3) explicitly permits  


the court to consider "the extent to which a given fee award may be so onerous to the  


                         44                       See  Nautilus  Marine  Enters.,  332  P.3d  at  561.   

                         45                       See  id;  Gamble,  28  P.3d  at  290.  

                                                                                                                                                            -15-                                                                                                                                                                     7278  

----------------------- Page 16-----------------------

non-prevailing party that it would deter similarly situated litigants fromthevoluntaryuse                                               

of the courts."46                                                                                       

                            The attorney's fees award here is $17,887.43, hardly an insignificant  


sum.  Given that the rule explicitly permits consideration of this factor, it was not error  


for the court to do so.  


                      Because  the  court's  legal  analysis  and  factual  findings  are  sound,  we  


conclude the court did not abuse its discretion.  We therefore affirm the reduction of  


attorney's fees from 20% to 15%.  


                      2.        Denial of motion for enhanced attorney's fees  


                      Kapolchok  argues  that  the  superior  court  "failed  to  appreciate  the  


unreasonableness" of Boiko's and Picarella's claims and did not adequately penalize the  


couple for the difficulties they caused during the discovery process.  He asserts that the  


superior court erred when it declined to enhance the award under Rule 82(b)(3)(F), "the  


reasonableness of the claims," and (G), "vexatious or bad faith conduct."  


                      The superior court's underlying determination that Boiko's and Picarella's  


uncooperativeness  during  the  discovery  process  was  more  attributable  to  their  


misunderstanding as self-represented litigants than bad faith, particularly in light of the  


numerous instances in which Picarella exhibited confusion about the rules and purpose  

                                                                  47  Neither was the court's determination that  


of discovery, was not clearly erroneous. 

Boiko and Picarella's claims - that Kapolchok "used coercive tactics to induce [them]  


to settle" and attempted to hide the possibility of continuing to trial - were reasonable  


and brought in good faith.   We have reviewed enhanced attorney's fees awards for  


unreasonableness  and  bad  faith  when,  for  example,  claims  lacked  any  evidentiary  


           46         Alaska R. Civ. P. 82(b)(3)(I).                   



                      See Cizek v. Concerned Citizens of Eagle River Valley, Inc., 71 P.3d 845,  

850-52 (affirming trial court's decision not to reduce fees because it was not an abuse  


of discretion).  

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----------------------- Page 17-----------------------

support, were fraudulent from inception, or were clearly brought with the intent to                                                                                                                      



                         But  the  record  shows  that  the  order's  certificate  of  distribution  is  dated  


December 13, 2012 and that Boiko and Picarella signed the legally binding settlement  


agreement on December 17, 2012, the day before receiving notice of the decision.  We  


cannot say the court's decision "not to visit a penalty on" them for bringing the legal  


malpractice claim was based upon clearly erroneous factual findings or constituted an  

                                               49    We therefore affirm the superior court's decision not to vary the  


abuse of discretion. 

award based on Rule 82(b)(3)(F) or (G).  


                                3.              Denial of motion to further reduce attorney's fees  


                                Boiko and Picarella argue that the superior court neglected to consider their  


argument that Kapolchok's bad faith conduct in the litigation violated standards of  


professional conduct and warranted a further reduction of attorney's fees.  They allege  


Kapolchok committed perjury in response to an interrogatory asking why he did not  


inform his clients that he did not carry legal malpractice insurance.  Rather than answer  


the question, Kapolchok responded:  "Defendants and Plaintiffs discussed this issue at  


least three (3) times and signed off on it."  Boiko and Picarella also cite as evidence of  


                48              See,   e.g.,   Kollander  v.  Kollander,   400   P.3d   91,   96-97   (Alaska   2017)  

(affirming 60% attorney's fees award because losing party relitigated claims already                                                                                       

disproved by credible testimony and barred by laches);                                                                               Crittell v. Bingo                       , 83 P.3d 532,         

534, 537 (Alaska 2004) (affirming enhanced attorney's fees award against party who                                                                                                                  

brought fraudulent claim based on fabricated documents and fraudulent will of their                                                                                                                 

creation);     Garrison   v.   Dixon,   19   P.3d   1229,   1235   (Alaska   2001)   (affirming   full  

attorney's fees award because plaintiffs never introduced credible evidence, conceded  


after two years they had no individual claims, and appeared to have brought suit to harass  


and chill activity of business competitor); Keen v. Ruddy, 784 P.2d 653, 657 (Alaska  


 1989) (finding no abuse of discretion where claim "was not supported by law or fact"  



and clearly brought to hinder litigation of different suit).  

                49              See Cizek              , 71 P.3d at 851-52 (affirming superior court's decision not to                                                                                    

vary attorney's fees because decision was not "manifestly unreasonable").                                                                                                          

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----------------------- Page 18-----------------------

bad faith Kapolchok's motion to compel production of tax returns they had not filed,                                                                   

which he knew from privileged communications in his capacity as their attorney.                                                                         

                         Alaska   Rules   of   Professional   Conduct   require   attorneys   to   disclose   in  

                                                                                                                                         50     Alaska's  

writing   whether   they  carry   requisite   amounts   of   malpractice   insurance.                                                           

professional rules also require that a lawyer "not reveal a client's confidence or secret  


unless  the  client  gives  informed  consent,  except  for  disclosures  that  are  impliedly  


authorized."51   "Confidence" is defined as "information protected by the attorney-client  


privilege  under  applicable  law"  and  "secret"  refers  to  "information  gained  in  the  


professional relationship if the client has requested it be held confidential or if it is  


reasonably foreseeable that disclosure of the information would be embarrassing or  


detrimental to the client."52  However, a lawyer is permitted to breach this confidence "to  


establish a claim or defense on behalf of the lawyer in a controversy between the lawyer  


and the client."53  


                          We conclude the superior court's decision not to vary the award on this  


ground was within its discretion.   The court decided Kapolchok's actions were best  


characterized as "harsh litigation tactics" rather than bad faith or vexatious conduct.  


Moreover, Kapolchok's request for the couple's tax returns to prove lost income did not  


violate attorney-client confidentiality.  The tax returns conceivably were necessary to  


establish the defense that Boiko's income loss was less than alleged, a permitted use  


            50           Alaska  R.  Prof.  Conduct   1.4(c)  ("A  lawyer  shall  inform  an  existing  client  

in  writing  if  the  lawyer   does  not  have  malpractice  insurance   of   at   least   $100,000  per  

claim  and  $300,000  annual  aggregate.").  

            51           Alaska R. Prof. Conduct 1.6(a).  


            52           Id.  

            53           Alaska R. Prof. Conduct 1.6(b)(5).  


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----------------------- Page 19-----------------------


under the rules.                                   Even if Kapolchok knew from his previous representation that the                                                                                                                       

couple   did   not   possess   the   requested   tax   returns,   he   did   not   himself   divulge   the  

information or actually breach confidentiality.                                                                                       The court's findings were not clearly                                         

erroneous, nor was its decision manifestly unreasonable or arbitrary.                                                                                                  

                                      4.	               Refusal   to   consider   evidence   of   attorney   misconduct   in   the  

                                                        underlying dental malpractice case                                                                         

                                      Boiko and Picarella contend that the superior court erred when it neglected                                                                                                     

to consider the "overwhelming" evidence of Kapolchok's vexatious or bad faith conduct                                                                                                                                        

while litigating the dental malpractice case. The court relied upon                                                                                                                     Alderman v. Iditarod                


Properties, Inc.                                                                                                                                                                                                                    

                                                 to support its holding, noting that "[c]onduct undertaken in 'bad faith'  


for the purposes of . . . Rule 82(b)(3)(G) must relate to conduct during the course of  


litigation, and not to actions during the underlying transaction." Boiko and Picarella cite  

                                               56                                                                      57  


 Crittell v. Bingo                                    and  Garrison v. Dixon                                                  for the proposition that when varying an  


award under Rule 82(b)(3)(G) the court must consider both the "filing of the case and  


the prosecution of it."  They interpret this to mean that the court should go outside the  


bounds of the immediate litigation to consider the merits of their legal malpractice claim  


and Kapolchok's misconduct more broadly.  



                                      We agree with the superior court that our holding in Alderman controls. 

An allegation of bad faith conduct under Rule 82 "must relate to conduct during the  


litigation, and not to actions taken during the underlying transaction or other litigation  


                   54	                See id.             

                   55                 104 P.3d 136 (Alaska 2004).                                                        

                   56                 83 P.3d 532, 537 (Alaska 2004).                                          

                   57                 19 P.3d 1229, 1234 (Alaska 2001).                                                                   

                   58                 104 P.3d at 145.                 

                                                                                                                    -19-	                                                                                                            7278

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between the parties."                            Boiko and Picarella misconstrue the rule recited in                                                        Crittell  and  

Garrison, which permits a court to consider the                                                   plaintiff's  motives for filing the lawsuit,                       

i.e., whether the underlying case was frivolous or brought in bad faith, when awarding                                                                           

enhanced attorney's fees to a prevailing defendant.  In                                                           Crittell we upheld an enhanced  

attorney's fees award to a prevailing defendant when evidence showed that the plaintiffs                                                                          

fabricated a will and then advanced their fraudulent claim through fraudulent actions at                                                                                         

          60    Similarly, in Garrison we upheld a full attorney's fees award to a real estate  


agencythat successfully defended against an unfair tradepracticeclaimbecausethecourt  


found the plaintiffs had "prosecuted the case in bad faith and to gain an advantage over  


a business competitor."61  Neither case - nor any other of this court - supports what  


Boiko and Picarella suggest here:  that in determining attorney's fees, the court must  


consider the misconduct of the party who successfully defended against those very  


claims of misconduct.  We conclude the superior court was correct to decline to do so.  


              C.	           Upholding The Previously Imposed Sanctions Was Not An Abuse of  



                            Alaska  Civil  Rule  37(b)(2)  permits  the  court  to  impose  sanctions  for  


reasonable expenses caused by failure to comply with a discovery order.62                                                                                     Boiko and  


Picarella argue that the court erred in imposing sanctions for their "single discovery  


violation" -a failure to supply requested tax returns - and should have permitted them  


              59            Id.   

              60            83  P.3d  at  537.   

              61            19  P.3d  at   1230.   

              62            Alaska  R.  Civ.  P. 37(b)(2) ("[T]he  court  shall  require  the  party  failing  to  

obey  the  order  .  .  .  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.").  

                                                                                      -20-	                                                                               7278

----------------------- Page 21-----------------------

to revisit the issue when litigating the motion for attorney's fees, particularly as self-                                                                                                

represented litigants.                           They also raise the point that Kapolchok's motion to compel did                                                                             

not contain a certification that he had attempted in good faith to confer with them on                                                                                                        

production of the tax returns prior to involving the court, as required, but rather had                                                                                                     

included a general statement about difficulties throughout the discovery process.                                                                                                            

                              We   review   an   imposition   of   sanctions   under   Rule   37(b)   for   abuse   of  

                        63    Rule 37 " 'affords trial courts broad power to enforce discovery orders by  


the use of sanctions' up to and including dismissal of a party's claim because 'outright  


 failures to respond to discovery halt the case development process dead in its tracks, and  


threaten the underpinnings of the discovery system.' "64                                                                           Self-represented litigants are  


held to a less stringent standard than lawyers.65                                                             Before imposing sanctions, we expect  


the trial court to "inform a pro se litigant of the proper procedure for the action he or she  


is obviously attempting to accomplish."66  


                              We conclude that it was not an abuse of discretion to impose sanctions.  


The superior court fulfilled its responsibilities to Boiko and Picarella as self-represented  


litigants before issuing sanctions. The court made every attempt to supply guidance and  


informthe couple of the procedures necessary to comply with the discovery process, and  


they had ample notice that sanctions loomed. There was a pattern of noncompliance, and  


               63             Roderer v. Dash                       , 233 P.3d 1101, 1107 (Alaska 2010).                                                   



                              Khalsa v. Chose, 261 P.3d 367, 372 (Alaska 2011) (quoting DeNardo v.  


ABC Inc. RVs Motorhomes , 51 P.3d 919, 921-22 (Alaska 2002)).  

               65             Johnston v. Brumlow, Nos. S-14275, S-14306, 2012 WL 3764426, at *6  


 (Alaska Aug. 29, 2012) (quoting Breck v. Ulmer, 745 P.2d 66, 75 (Alaska 1987)); see  


also Azimi v. Johns, 254 P.3d 1054, 1066-67 (Alaska 2011) (discussing dismissal as a  


discovery sanction for self-represented litigants).  


               66             Johnston, 2012 WL 3764426, at *6.  


                                                                                              -21-                                                                                       7278

----------------------- Page 22-----------------------

the court levied sanctions only after numerous motions to compel and repeated warnings                                                                                                                                                                                                                                                                           

regarding other discovery violations.                                                                                                                                     Boiko and Picarella had adequate opportunity to                                                                                                                                                                        

cure the defects in their discovery production, yet they failed to do so.                                                                                                                                                                                                                                         


                                                             Moreover, Boiko and Picarella recognized that they forfeited their right to  

revisit the sanctions issue when they voluntarily dismissed the legal malpractice case.                                                                                                                                                                                                                                                                                                                      

Their motion expressly stated that it was not conditioned on the couple's ability to                                                                                                                                                                                                                                                                                                            

contest the sanctions imposed.                                                                                                                 Given they neither cured the defect nor contested the                                                                                                                                                                                       


 sanctions prior to voluntarily dismissing the case, it was not an abuse of discretion to  

deny them the opportunity to revisit the sanctions.                                                                                                                                                                                                 We affirm the superior court's                                                                                       


decision to uphold the previously imposed sanctions.  

V.                             CONCLUSION  

                                                             The superior court's judgment is AFFIRMED.                                                                                                              

                                                                                                                                                                                             -22-                                                                                                                                                                                    7278

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