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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Association of Village Council Presidents Regional Housing Authority v. Dietrich Mael (4/15/2022) sp-7591

Association of Village Council Presidents Regional Housing Authority v. Dietrich Mael (4/15/2022) sp-7591

          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,  


          303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  



                     THE  SUPREME  COURT  OF  THE  STATE  OF  ALASKA  

ASSOCIATION  OF  VILLAGE                                    )


                                                                 Supreme Court Nos. S-17802/17821  

HOUSING  AUTHORITY,                                         )


                                                                 Superior Court No. 4BE-17-00061 CI  


                    Appellant and                           )  

                    Cross-Appellee,                         )                       

                                                                 O P I N I O N  


          v.                                                )                                     

                                                                 No. 7591 - April 15, 2022  



DIETRICH MAEL, on his own behalf   )  


and on behalf of his minor children                         )  


D.K. and E.M.; THOMAS MAEL; and  )


ROSE MAEL,                                                  )



                    Appellees and                           )

                    Cross-Appellants,                       )


          and                                               )



STATE OF ALASKA,                                            )


                    Intervenor/Cross-                       )

                    Appellee.                               )



                    Appeal  from  the  Superior  Court  of  the  State  of  Alaska,  


                    Fourth Judicial District, Bethel, Terrence P. Haas, Judge.  


                    Appearances:           Aaron  D.  Sperbeck  and  Shane  C.  Coffey,  


                    Birch  Horton  Bittner  &  Cherot,  Anchorage,  and  Thomas  


                    Weathers, The Law Offices of Thomas Eagle Weathers, P.C.,  


                    San Rafael, California, for Appellant and Cross-Appellee.  


                    Susan Orlansky, Reeves Amodio, LLC, Anchorage, Russell  

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

                             L.  Winner, Winner &Associates,                                         PC,Anchorage, and Myron                     

                             Angstman, Angstman Law Office, Bethel, for Appellees and                                                                   

                             Cross-Appellants.    Anna Jay, Assistant Attorney General,                                                     

                             Anchorage, and Treg R. Taylor, Attorney General, Juneau,                                                          

                             for Intervenor/Cross-Appellee.                                       

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

                                                                                                                                 *   [Borghesan,  

                             Carney, Justices, and Eastaugh, Senior Justice.                                                          

                             Justice, not participating.]  


                             MAASSEN, Justice.  


I.             INTRODUCTION  

                             A  boiler  exploded  in  a  home  owned  by  a  nonprofit  regional  housing  


authority, severely injuring a man who lived there. He sued the housing authority in both  


contract and tort, claiming that his lease-purchase contract with the authority included  


a promise that it would inspect the boiler, which it had failed to do with reasonable care.  


After the man dismissed his contract claim, the housing authority asked the court to  


decide as a matter of law that a breach of a contractual promise cannot give rise to a tort  


claim.  But the superior court allowed the man to proceed to trial on his tort claim, and  


the  jury  awarded  over  $3  million  in  damages,  including  over  $1.5  million  in  


noneconomic  damages  and  separate  awards  to  several  of  his  family  members  for  


negligent infliction of emotional distress. The court reduced the man's noneconomic  


damages award to $1 million because of a statutory damages cap, but it excluded the  


family members' awards from the amount subject to the cap.  


                             The housing authority appeals.  It argues that the superior court erred by  


concluding that the contract created a continuing legal duty to inspect the boiler with  


               *             Sitting by assignment made under article IV, section 11 of the Alaska                                                                           

Constitution and Alaska Administrative Rule 23(a).                                                  

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reasonable   care.             It   maintains   that   it   should   have   been   granted   a   judgment  


notwithstanding the verdict for that reason.   It also argues that it should have been  


granted a new trial because it had established that the boiler explosion was caused by a  


product  defect  rather  than  negligent  inspection.                         Finally,  it  argues  that  the  family  


members'  damages  for  negligent  infliction  of  emotional  distress  should  have  been  


included in the amount subject to the statutory damages cap.  The man cross-appeals,  


arguing that the damages cap violates due process because it fails to account for inflation  


or the severe nature of his physical injuries.  


                    We uphold the jury verdict because the superior court properly concluded  


that  the  housing  authority  had  an  independent  tort  duty  to  inspect  the  boiler  with  


reasonable care and because the jury had sufficient evidence to find that the explosion  


was caused by the housing authority's negligence rather than a product defect.  We also  


conclude that the superior court properly reduced the damages award; the noneconomic  


damages were properly capped at $1 million and the other family members' emotional  


distress damages were properly excluded from the amount subject to the cap.  We thus  


affirm the superior court's judgment on all issues.  



          A.        Facts  


                    TheAssociationofVillageCouncil Presidents RegionalHousing Authority  


is a nonprofit corporation that provides housing and housing assistance to persons living  


in the Yukon-Kuskokwim Delta region.  The housing authority administers a federal  


home ownership program established by the Indian Housing Act, which authorizes the  


Department  of  Housing  and  Urban  Development  (HUD)  to  enter  into  contracts  to  

                                                               -3-                                                         7591

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provide financial assistance to Indian housing authorities.                                                                        The program stipulates that                           

in order to receive government funds, a housing authority must enter into a mutual help                                                                                                 

and occupancy agreement (the Agreement) with each family selected to occupy one of                                                                                                           

                                             2    The Agreement must contain terms such as the family's required  

the provided homes.                                                                                                                                                            

initial contribution to the housing authority and its subsequent monthly payments.3   The  


Agreement must also stipulate that the family is "responsible for the maintenance and  


monthly utility expenses of the dwelling," while the housing authority is responsible for  


having in effect procedures "sufficient for ensuring the timely periodic maintenance of  


the  dwelling  by  the  family."4                                         Further,  the  Agreement  must  allow  the  family  the  


opportunity to buy the dwelling under a lease-purchase arrangement.5  


                              Thomas  and  Rose  Mael  moved  into  a  home  in  Chefornak  under  this  


program in 1984.  They did not sign the required Agreement until 1989, but the parties  


appear to agree that the effective date of their Agreement was the date the Maels moved  


in. The Agreement contains the mandated terms noted above, establishing the respective  


responsibilities of the housing authority and the "homebuyer" - the occupant who had  


not yet become the owner.  The Agreement states that the homebuyer is responsible for  


the home's maintenance.   But it also provides that if "the condition of the property  


creates a hazard to the life, health or safety of the occupants, the [housing authority] shall  


have the work done" to remedy the problem.  


               1              Former 42 U.S.C.  1437bb(b)(1) (repealed 1996).                                                   

               2              Id.  at  1437bb(e).      

               3              Id.  

               4              Id.  

               5              Id .  

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


                    The Agreement does not have an express expiration date.  It stipulates that  


the "lease under this Agreement" commences upon occupancy and expires when the  


purchase price has been fully amortized pursuant to a schedule that provides for "a 25- 


year period."   The Agreement explains that it can be terminated in two ways:   by a  


breach of the homebuyer's obligations or by the homebuyer's notice of termination. The  


Agreement also identifies the two ways the house can be conveyed to the homebuyer:  


The homebuyer may request to purchase it, or the housing authority may require the  

homebuyer to purchase it once certain financial thresholds are met.  After the housing  


authority has given notice that the homebuyer is required to purchase the home, all the  


homebuyer's rights under the agreement are unchanged until the purchase is completed.  


                    The price of the Maels' home became fully amortized, and the home was  


thus "eligible for conveyance," in 2009.  But the home was never formally conveyed to  


the Maels; the housing authority never notified the Maels that they now had to purchase  


the home, and neither party ever gave the other notice that the Agreement should be  


otherwise   terminated.                 The  housing   authority   continued   to   charge   the   Maels  


administrative fees, and it conducted annual inspections of the home nearly every year  


between 1986 and 2011. The March 2011 inspection, which was labeled as an "Annual"  


as opposed to a "Final" inspection, did not indicate any problems with the boiler, and  


Rose Mael confirmed at trial that the Maels were not aware of any problems at the time.  


No more inspections occurred after 2011.  


                    In January 2016 Rose heard a whistling noise coming from the boiler. She  


asked Dietrich, her adult son, to take a look at it.   As he went to do so the boiler  


exploded, injuring him severely.  He was thrown against a wall, sprayed with scalding  


water and glycol, and knocked unconscious.   He spent  about  a week in a hospital  


followed by extensive physical therapy.  He testified at trial that he continued to suffer  

                                                               -5-                                                         7591

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from  debilitating  back  pain  which  prevented  him  from  working,  playing  with  his  


children, or engaging in subsistence activities.  


          B.        Pre-Trial Proceedings  


                    In 2018 Dietrich sued the housing authority on behalf of himself and two  


of his minor children. He asserted a negligence claim, alleging that the housing authority  


assumed a duty to properly inspect the boiler and negligently violated that duty, causing  


his injuries.  He also asserted a breach of contract claim, alleging that the Agreement  


contained "an express and implied contractual duty to properly inspect" the boiler and  


that the housing authority violated that duty as well.  On behalf of his children, Dietrich  


alleged that they had heard the explosion, witnessed their father's injuries, and suffered  


emotional distress as a result of the housing authority's breach of its duty to properly  


inspect.  In its answer the housing authority joined as third-party defendants Burnham  


LLC, the manufacturer of the boiler, and Dietrich's parents, Thomas and Rose, "for  


allocation of fault and apportionment of damages."  The housing authority alleged that  


Thomas and Rose's negligent repair and service of the boiler and Burnham's negligent  


design caused the explosion.  Burnham settled with Dietrich and his two children and  


was dismissed from the case before trial.  


          C.        Trial Evidence  


                    Trial  began  in  September  2019  and lasted  nine days.                              The jury  heard  


testimony from the Maels about the boiler explosion, along with extensive testimony  


from  medical  experts  about  the  scope  of  Dietrich's  injuries  and  his  prospects  for  




                    The jury also heard testimony about the state of the boiler and the cause of  


the explosion.   The jury was read portions of the deposition testimony of a housing  


authority employee who testified that he was trained and certified in boiler repair.  He  


did not believe the boiler was defective in any way.  He testified, however, that boilers  


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could explode if not maintained and that in his opinion - based on the existence of rust  


sediment and corrosion on the pressure relief valve - the Maels' boiler had not been  


properly maintained.  He further testified that the housing authority should continue to  


conduct inspections even after a house becomes eligible for conveyance to make sure it  


remains safe, and that the housing authority has a duty to make repairs if there is a hazard  


to the health or safety of one of its residents.  He thought that an inspection after 2011  


would have detected any problems with the boiler.  


                    An expert in boiler repair testified that a typical homeowner does not know  


how to service and maintain a boiler. The warning label from the boiler's pressure relief  


valve was entered into evidence.  The label stated that the valve should be removed and  


physically inspected by a licensed plumber at least once every three years to identify  


corrosion.   It also warned against attempting an inspection "on your own" and that  


failure to properly inspect could cause serious injury or death.  


                    The housing authority presented the testimony of an engineering expert.  


He testified that the Maels' use of the boiler to heat their home was a foreseeable use,  


and that the boiler failed to perform as a reasonable consumer would expect. He testified  


that the pressure release valve is a boiler's most important safety feature because it is the  


"last line of defense against overpressure."  It was his opinion that the boiler exploded  


because the control system allowed the water to overheat and a malfunction in the valve  


allowed the pressure to build until the tank ruptured. He thought the valve failed because  


of its age and degradation. He acknowledged that an inspection done six months before  


the explosion may not have detected any danger because the valve could have degraded  


in six months, though he conceded on cross-examination that an inspection could have  


revealed an issue.  He thought the risks of the design outweighed the benefits, and that  


Burnham, the manufacturer, should have used a more reliable valve.  

                                                                -7-                                                         7591

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                    The housing authority also called an Indian housing expert to testify about  


the meaning of the Agreement.  This expert testified that all the housing authorities he  


had worked with interpreted the Agreement to mean that homebuyers were responsible  


for the maintenance of their homes. In his opinion, the housing authority's responsibility  


was limited to fixing hazards to health or safety once it learned of them.  He opined that  


the housing authority had no duty to inspect the Maels' home after 2009 when the home  


became "eligible for conveyance":   Twenty-five years had passed since the parties  


entered into the Agreement, the price of the house had been fully amortized, and the  


house "should have been conveyed."  He based this opinion on a 2008 HUD notice, in  


effect when the house became eligible for conveyance in 2009. In his opinion there was  


no legal relationship between the housing authority and the Maels at the time of the  


explosion because the Agreement had terminated by its own terms.  


                    Following arguments from both parties, the superior court ruled that the  


Agreement  imposed  a  duty  on  the  housing  authority  to  conduct  inspections  with  


reasonable care and that the duty was still in effect at the time of the explosion.  The  


court  reasoned  that  while  the  homebuyer  had  an  obligation  to  maintain  the  home,  


Congress intended that the relationship be mutual, and the housing authority retained a  


duty to make sure the home was safe to live in.  The court further held that the parties  


intended this arrangement to last as long as they both had an interest in the home.  


          D.        Verdict And Post-Trial Motions  


                    After  the close of evidence Dietrich dropped  his contract  claim while  


retaining a claim for tort damages under the theory that the contract gave rise to a tort  


duty to inspect the boiler with reasonable care.   The housing authority preserved an  


objection to a jury instruction explaining that the Agreement "required [the housing  


authority] to perform periodic inspections of the boiler and to exercise reasonable care  


to  discover  and  remedy  any  hazardous  problems  with  it"  and  that  the  Agreement  

                                                                -8-                                                         7591

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

remained "in effect at the time of the boiler explosion."                                                                                                                                             The housing authority also                                                        

moved for a directed verdict, arguing that no reasonable jury could find a breach of duty                                                                                                                                                                                               

because the unrefuted evidence established that the Agreement expired in 2009.                                                                                                                                                                                                         The  

court denied the motion.                                                              

                                              The jury returned a verdict in favor of the Maels. It found that the housing                                                                                                                                                  

authority was negligent and that its negligence was a substantial factor in causing harm                                                                                                                                                                                             

to the Maels.                                 It concluded that the boiler was not defective and that Thomas and Rose                                                                                                                                                                 

were not negligent in maintaining it.                                                                                               It attributed 100% of the fault to the housing                                                                                        

authority.  It found that Dietrich suffered a severe permanent physical impairment and                                                                                                                            

awarded  him   $1,672,000   in   economic   damages   and   $1,580,000   in   noneconomic  

damages, for a total award of $3,252,000.                                                                                                      The jury also awarded a total of $175,000 to                                                                                                     

Dietrich's family members on their claims for negligent infliction of emotional distress                                                                                                                                                                                     



                                              The housing authority moved for a judgment notwithstanding the verdict  


(JNOV) and remittitur and for a new trial.  In its JNOV motion the housing authority  


again argued that no reasonable jury could find it had violated a tort duty to inspect,  


because  the  parties'  relationship  was  contractual  and  the  evidence  established  


conclusively that their contract ended in 2009.   It also argued that the noneconomic  


damages  Dietrich  was  awarded  should  be  reduced  to  $1  million  under  a  statutory  


damages cap7  and that the emotional distress damages awarded to the other Mael family  


                       6                      Damages may be awarded for the negligent infliction of emotional distress                                                                                                                                                       

under a "bystander" theory if "(1) the plaintiff is located near the scene of the accident,                                                                                                                                                                             

(2)   the    shock    results    from    a    direct    emotional    impact    from    the    sensory    and  

contemporaneous observance of the accident, and (3) a close relationship exists between                                                                                                                                                                                    

plaintiff and victim."                                                    Kallstrom v. United States                                                                  , 43 P.3d 162, 165 (Alaska 2002).                                                            

                       7                      AS 09.17.010(c).  


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members should all fall under the same cap.                                                                                                                                                                                                               In its motion for a new trial the housing                                                                                                                                              

authority   argued   that   the   unrefuted   evidence   established   that   the   explosion   was  

attributable to a defect in the boiler rather than a failure to inspect it.                                                                                                                                                                                                                                                                                                                 

                                                                          The superior court granted the housing authority's motions in part.                                                                                                                                                                                                                                                                                                                                  It  

concluded that the statutory cap limited Dietrich's noneconomic damages award to                                                                                                                                                                                                                                                                                                                                                                                                

 $1 million but that the other family members' NIED claims were sufficiently distinct                                                                                                                                                                                                                                                                                                                                                               

injuries that they could not be subject to the same cap.                                                                                                                                                                                                                                                                  The court denied the JNOV                                                                                                     

motion because reasonable jurors could differ on the question of tort liability, and it                                                                                                                                                                                                                                                                                                                                                                                              

denied the motion for a new trial because the verdict was not against the clear weight of                                                                                                                                                                                                                                                                                                                                                                                         

the evidence.                                                              

                                                                          The housing authority appeals the verdict, the court's denial of its JNOV                                                                                                                                                                                                                                                                                                       

and new trial motions, an evidentiary ruling, and the court's failure to aggregate all of  

the noneconomic damages awards under a single statutory damages cap.                                                                                                                                                                                                                                                                                                                                                           The Maels   

cross-appeal the application of the cap to Dietrich's damages.                                                                                                                                                                                                                                                                                                       The State of Alaska                                                             

intervened   in   the superior                                                                                                                         court   and  participates on                                                                                                                          appeal because the case raises                                                                                                                 

constitutional challenges to the damages statute.                                                                                                                                                                                                                          8  

                                     8                                    See  Alaska R. App. P. 514(e) ("The clerk of court shall notify the Attorney                                                                                                                                                                                                                                                                                       

General of Alaska of the case raising the question [of the constitutionality of a state                                                                                                                                                                                                                                                                                                                                                                   


                                                                                                                                                                                                                                    -10-                                                                                                                                                                                                                            7591

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III.       STANDARD OF REVIEW            


                     Wereviewdenovo                 questions oflawinvolvingcontractinterpretation,                                  


                    10                                                                                     11  


                        and "a statute's constitutionality and interpretation."                                And unless there  


are "genuine disputes of material fact, the existence and scope of a legal duty are [also]  



questions of law which we review de novo." 


                     "In  reviewing  orders  granting  or  denying  JNOV  motions,  we  must  


'determine  whether  the  evidence,  when  viewed  in  the  light  most  favorable  to  the  


non-moving party, is such that reasonable persons could not differ in their judgment of  



the facts.' "          "[T]o the extent that a ruling on a motion for [JNOV] involves questions  



of law, those questions will be reviewed de novo." 


                     "The question of whether to grant or refuse a new trial 'rests in the sound  



discretion of the trial court.' "                     "In reviewing the substance of a trial court's order  


denying a new trial, we view the evidence in the light most favorable to the non-moving  

           9         Flint  Hills  Res.  Alaska,  LLC  v.  Williams  Alaska  Petrol.,  Inc .,  377  P.3d  959,  

967  (Alaska  2016).  

           10        City  of  Hooper  Bay  v.  Bunyan,  359  P.3d  972,  978  (Alaska  2015).  

           11        C.J.  v.  State,  Dep't  of  Corr.,   151  P.3d  373,  377  (Alaska  2006).  

           12         Whitney   v. State  Farm  Mut.  Auto.  Ins.   Co.,   258   P.3d   113,   116   (Alaska  


           13        Alaska Interstate  Constr., LLC  v. Pac. Diversified Invs., Inc ., 279 P.3d  


1156, 1162 (Alaska 2012) (quoting Richey v. Oen, 824 P.2d 1371, 1374 (Alaska 1992)).  


           14        Id. (second alteration in original) (quoting Sisters of Providence in Wash.  


v. A.A. Pain Clinic, Inc., 81 P.3d 989, 999 n.10 (Alaska 2003)).  


           15        Hunter  v.  Philip  Morris  USA Inc .,  364  P.3d  439,  447  (Alaska  2015)  


(quoting Kava v. Am. Honda Motor Co., 48 P.3d 1170, 1173 (Alaska 2002)).  


                                                                  -11-                                                            7591

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


party . . . ."                We "will only reverse a decision to deny a new trial if the evidence                                                    

supporting the verdict was so completely lacking or slight and unconvincing as to make                                                                        

the verdict plainly unreasonable and unjust."                                          17  


                          Finally, "[w]e review the superior court's evidentiary rulings for abuse of  


IV.          DISCUSSION  


                          The housing authority challenges the jury verdict on several grounds.  It  


argues that the superior court erred by deciding that the Agreement could create a tort  


duty that was in effect at the time of the explosion, and that it further erred when it relied  


on this legal conclusion in denying the housing authority's motion for JNOV and in  


instructing the jury. The housing authority also argues that the court should have granted  


a new trial because the jury's conclusion that the boiler was not defective was against the  


clear weight of the evidence, and that the court erred when it admitted some of Dietrich's  


medical records without a proper foundation.  


                          Finally, the housing authority argues that the damages to other Mael family  


members for negligent infliction of emotional distress should have been aggregated with  


Dietrich's own noneconomic damages for purposes of the statutory damages cap.  The  


Maels argue in their cross-appeal that the superior court's application of the damages cap  


to Dietrich's award violates due process.  

             16           Id.  

             17           Id.  (quoting  Hogg v. Raven Contractors, Inc                                         ., 134 P.3d 349, 352 (Alaska             


             18           Noffke v. Perez, 178 P.3d 1141, 1144 (Alaska 2008).  


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          A.	       The Superior Court Correctly Decided That At The Time Of The  


                    Explosion The Housing Authority Owed The Maels A Tort Duty To  


                    Inspect The Boiler.  


                    The  housing  authority  first  argues  that  the  superior  court  erred  by  


concluding that it had a duty to inspect the boiler.  The housing authority concedes that  


the Agreement imposed such a duty; it argues, however, that a contractual promise  


cannot create a tort duty to inspect, and that any duty created by the Agreement, whether  


contractual or in tort, necessarily expired in 2009 when the Agreement expired.  We  


conclude that both the Agreement and federal regulations gave rise to a tort duty to  


inspect the boiler with reasonable care and that this duty still existed at the time of the  



                    1.	       The Agreement and federal regulations created a tort duty to  


                              inspect the boiler.  


                    Dietrich initially brought claims against the housing authority for breach  


of contract and  negligence,  but he dropped  his contract  claim.                                    When the housing  


authority challenged thecontinued viability ofastand-alonetort claim, the superior court  



                    I am going to hold that [Dietrich] may abandon [his] contract  


                    claim and pursue it only as a tort claim even though the duty  


                    that  we're  talking  about  appears  to  have  arisen  as  a  


                    relationship between the parties that is contractual under the  


                    [Agreement].  And because that duty was a duty to inspect,  


                    and because either a failure to inspect with care or perhaps a  


                    failure to inspect altogether is the kind of breach of a duty  


                    that is traditionally available under tort law, [I hold] that in  


                    this instance the contract is relevant and that the breach of the  


                    contract,  if  found,  can  also  constitute  a  tort,  and  that  


                    [Dietrich] can pursue the tort independently.  


The housing authority argues that this conclusion was error because, as a matter of law,  


a violation of a duty imposed by contract cannot create liability in tort.  

                                                              -13-	                                                        7591

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

                      It   is   true   that   in   most   cases   "a   violation   of   a   duty   arising   from  

contract - such as the duty to pay wages under an employment contract or tender                                                       

                                                                                                   19   "Promises set forth in a  

payment for goods - does not give rise to a tort claim."                                                                                       

                                                                                                                   20    But there is a  

contract must [instead] be enforced by an action on that contract."                                                                            


significant exception: "[W]hen a party's actions violate a general duty of care, its actions  


may give rise to an action in tort, even if the violation also breaches a contract."21  


                      We have recognized such a general duty of reasonable care on the part of  


a party who has agreed to conduct inspections. In Adams v. State , individuals injured in  


a hotel fire sued the State for negligently inspecting the hotel; the inspector had found  


serious fire hazards but failed to take any further action to abate them.22                                               We observed  


that it was "ancient learning that one who assumes to act, even though gratuitously, may  


                                                                                                 23  and  that this "concept of  

thereby become subject to the duty of acting carefully"                                                                                      


voluntary assumption of a duty has long been recognized in Alaska."24                                                      We held that  


having assumed a duty to conduct fire safety inspections, the State had taken on "a  


further duty to exercise reasonable care in conducting [the] inspections, and that liability  


           19         Jarvis  v.  Ensminger,   134  P.3d  353,  363  (Alaska  2006).  

           20         Alaska  Pac.  Assurance  Co.  v.  Collins,  794  P.2d  936,  946  (Alaska   1990).  

           21         Jarvis,  134  P.3d  at  363;  see  also  Alaska  Pac.,  794  P.2d  at  946  ("Only  where  

the  duty breached is one imposed by law, such as  a  traditional tort law duty  furthering  

social  policy,  may  an  action  between  contracting  parties  sound  in  tort.").  

           22         555 P.2d 235, 236, 238-39 (Alaska 1976).  


           23         Id. at 240 (quoting Glanzer v. Shepard, 135 N.E. 275, 276 (N.Y. 1922)).  


           24         Id.  

                                                                     -14-                                                               7591

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

will attach where there is a negligent failure to discover fire hazards which would be                                                                       


brought to light by an inspection conducted with ordinary care."                                                              

                         We applied this rule again in Van Biene v. ERA Helicopters, Inc., in which  


                                                                                                                                      26    The estates  

the estates of two deceased pilots sued their employer and its insurer.                                                                              


contended that the insurer, when conducting workplace inspections, had negligently  


failed to detect the conditions that caused the pilots to be dangerously overworked.27  We  


followed Adams , holding that the insurer could be liable for negligent inspections and  


quoting as additional support  324A of the Restatement (Second)  of Torts, which  




                         One who undertakes, gratuitously or for consideration, to  


                         render  services  to  another  which  he  should  recognize  as  


                         necessary for the protection of a third person or his things, is  


                         subject  to  liability  to  the  third  person  for  physical  harm  


                         resulting  from  his  failure  to  exercise  reasonable  care  to  


                         [perform] his undertaking, if  


                         (a) his failure to exercise reasonable care increases the risk of  


                         such harm, or  


                         (b) he has undertaken to perform a duty owed by the other to  


                         the third person, or  


                         (c) the harm is suffered because of reliance of the other or the  


                         third person upon the undertaking.[28]  


                         Both Adams and this restatement of a commonlawrulesupport thesuperior  


court's  conclusion  in  this  case.                                 The  housing  authority  undertook  to  render  a  


            25           Id.  

            26           779 P.2d 315, 316 (Alaska 1989).                    

            27           Id. at 316-17.  




                         Id.  at 322 (quoting RESTATEMENT   (SECOND)   OF   TORTS    324A (A                                                          M. L.   

INST . 1965)).   

                                                                             -15-                                                                       7591

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

service - regular boiler inspections - to the Maels as homebuyers, a service it should                                                                                                  

have "recognize[d] as necessary                                                 for  the protection of" other persons in the Maels'                                                     

household as well as their property.                                                  The housing authority may therefore be liable to                                                              

those other persons "for physical harm resulting from [its] failure to exercise reasonable                                                                                       

care to [perform its] undertaking."                                             29  

                               For the contrary view, the housing authority relies primarily on Alaska  


Pacific Assurance Co. v. Collins, in which we applied the general rule that "[p]romises  


set forth in a contract must be enforced by an action on that contract."30                                                                                                     But Alaska  


Pacific  can be readily distinguished.   A building contractor alleged that his insurer  


breached  the insurance policy  by  negligently denying  coverage  and  a defense in  a  


homeowner's suit involving claims of faulty construction.31                                                                                    The contractual duties at  


issue in Alaska Pacific - to provide insurance coverage and to defend the insured in  


litigation - have no analog in a "general duty of care,"32  nor do they implicate the risk  


of "physical harm" to third parties addressed by  324A of the Restatement (Second) of  


              33  Here, in contrast, the housing authority's contractual duty to inspect carried with  


it the "further duty" recognized in Adams :  "to exercise reasonable care in conducting  



 [the] inspections." 


                                                And in Alaska Pacific we explicitly excepted cases involving such  


a duty from our holding:  "[W]here the duty breached is one imposed by law, such as a  

                29             Id.  (quoting R                  ESTATEMENT  (SECOND) OF  TORTS    324A).

                30             794 P.2d 936, 946 (Alaska 1990).

                31             Id.

                32             See Jarvis v. Ensminger, 134 P.3d 353, 363 (Alaska 2006).  


                33             See Van Biene                     , 779 P.2d at 322.             

                34             555 P.2d 235, 240 (Alaska 1976).  


                                                                                                -16-                                                                                         7591

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

traditional tort law duty furthering social policy, [then] an action between contracting                      

parties [may] sound in tort."                  35  

                      The housing authority also cites a more recent case in which we declined  


to graft a tort remedy onto an action based on contract.  In Geotek Alaska, Inc. v. Jacobs  


Engineering Group, Inc. a sub-subcontractor on an environmental remediation project  


claimed, among other things, that the general contractor negligently caused it economic  


harm by failing to enforce provisions in the subcontract that would have helped ensure  


that  the  subcontractor  paid  the  sub-subcontractor  for  its  work.36                                            We  began  our  


discussion of this claim by noting that "[t]o determine whether a defendant owes a  


plaintiff a duty of reasonable care, 'we first determine whether a duty is imposed by  


statute, regulation,contract, undertaking, theparties' preexistingrelationship, or existing  


                    37    It is only if we find no existing duty that we look to various policy  

case law.' "                                                                                                                         


considerations - the D.S.W. factors - "to determine whether we should recognize a  


                                                                               38   Here, the duty imposed by contract  

negligence duty not otherwise defined by law."                                                                              


           35         794  P.2d  at  946.   

           36         354  P.3d  368,  370,  376  (Alaska  2015).  

           37         Id.  at  376  (quoting  McGrew  v.  State,  Dep't  of  Health  &  Soc.  Servs.,  Div.  of  

Fam.  &  Youth  Servs.,   106  P.3d  319,  322  (Alaska  2005)).  

           38         Id. (citing D.S.W. v. Fairbanks N. Star Borough Sch. Dist., 628 P.2d 554,  


555 (Alaska 1981)).  The D.S.W. factors are:  


                      The  foreseeability  of  harm  to  the  plaintiff,  the  degree  of  


                      certainty that the plaintiff suffered injury, the closeness of the  


                      connection between the defendant's conduct and the injury  


                      suffered,  the  moral  blame  attached  to  the  defendant's  


                      conduct, the policy of preventing future harm, the extent of  


                      the  burden  to  the  defendant  and  consequences  to  the  


                      community of imposing a duty to exercise care with resulting  



                                                                    -17-                                                              7591

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

(and by regulation, as we discuss next) carries with it the further duty recognized by                                                                 

"existing case law"; therefore there is no need for us to consider, as we did in                                                               Geotek  


Alaska , whether public policy requires us to recognize a novel tort duty.                                                              


                        We  note  further  that  the  housing  authority's  duty  to  inspect  has  an  


independent source in federal law.  The regulations in place at the time the Agreement  


was signed placed "overall responsibility" for the home's maintenance and safety on the  


housing authority:  


                        The  [Indian  housing  authority  (IHA)]  shall  enforce  those  


                        provisions  of  a  Homebuyer's  agreement  under  which  the  


                        Homebuyer is responsible for maintenance of the home. The  


                        IHA shall have overall responsibility to HUD for assuring  


                        that the housing is being kept in decent, safe and sanitary  


                        condition, and that the home and grounds are maintained in  


                        a manner that will preserve their condition, normal wear and  


                        depreciation excepted.  Failure of a Homebuyer to meet his  

            38	         (...continued)  


                        liability for breach, and the availability, cost and prevalence  


                        of insurance for the risk involved.  


D.S.W., 628 P.2d at 555 (quoting Peter W. v. S.F. Unified Sch. Dist., 131 Cal. Rptr. 854,  


 859-60 (Cal. App. 1976)).  

            39          We also note that the sub-subcontractor in Geotek Alaska relied solely on  


the foreseeability of harm as establishing an extra-contractual duty of care.  354 P.3d at  


377-78.  We observed, however, that "we have never held that foreseeable economic  


harm to an identifiable plaintiff is all that is required to establish a duty of care."  Id. at  


377.  Reviewing the other D.S.W. factors, we concluded that they failed to support the  


sub-subcontractor's claim, including the fact that, "as contrasted to negligence creating  


a risk of death or physical injury, 'we have ascribed little blameworthiness to ordinary  


negligence that merely causes economic . . . harm.' "  Id. at 379 (alteration in original)  


(quoting Mesiar v. Heckman, 964 P.2d 445, 451 (Alaska 1998)).  A breach of contract  


that "creat[es] a risk of death or physical injury" - as is at issue here - is more likely  


to  implicate  "a  traditional  tort  law  duty  furthering  social  policy"  of  the  sort  we  


recognized in Alaska Pacific , 794 P.2d at 946.  


                                                                          -18-	                                                                    7591

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

                           obligations   for   maintenance   shall   not   relieve   the   IHA   of  

                           responsibility in this respect.                               Accordingly, the IHA shall                      

                           conduct a complete interior and exterior examination of each                                                   

                           home at least once a year, and shall furnish a copy of the                                                       

                           inspection report to the Homebuyer.                                            The IHA shall take              

                           appropriateaction,                    as needed, to remedyconditionsshown by                                        

                           the inspection, including steps to assure performance of the                                                      

                           Homebuyer's                       obligations                  under            the        Homebuyer's  



                           The housing authority argues that theseregulations did not create a duty but  


rather mandated terms to be included in the mutual help and occupancy agreements. But  


comparing  the  regulation's  language  to  that  of  neighboring  sections  disproves  this  


theory.41   The regulation's language is unambiguous as to both its mandatory nature and  


where the duty lies:  "The IHA shall enforce those provisions . . . .  The IHA shall have  


overall responsibility . . . .  [T]he IHA shall conduct a complete interior and exterior  


examination . . . .  The IHA shall take appropriate action . . . ."42  


                           Because the housing authority had a duty independent of the contract to  


inspect the boiler subject to the proper standard of care, we conclude that the superior  


court did not err in its ruling on this issue.43  


              40           Former 24 C.F.R.  805.306(d) (1979).                            



                           Compare id. ("[T]he [housing authority] shall conduct a complete interior  


and exterior examination of each home at least once a year . . . ."), with former 24 C.F.R.  


  805.306(c) (1979) ("[T]he maintenance rules or regulations shall contain provisions  


on at least the following subjects:  . . . .").  

             42            See Petitioners for Incorporation of City & Borough of Yakutat v. Loc.  


Boundary Comm'n, 900 P.2d 721, 724 (Alaska 1995) ("Unless the context otherwise  


indicates, the use of the word 'shall' denotes a mandatory intent." (quoting Fowler v.  


City of Anchorage, 583 P.2d 817, 820 (Alaska 1978))).  


             43            Because the housing authority's challenges to the jury instructions and to  



                                                                                   -19-                                                                            7591

----------------------- Page 20-----------------------

                                            2.	                   The housing authority's duty to inspect existed at the time of the                                                                                                                                             

                                                                  boiler explosion.   

                                            The housing authority argues that whether its duty was in contract or tort,                                                                                                                                                       

the duty                      expired   long   before the boiler exploded.                                                                                                   It   concedes that the Agreement                                        

required regular inspections, but it contends that any duty it had by contract expired 25                                                                                                                                                                                          

years after the Maels moved in, when federal regulations made the home eligible for                                                                                                                                                                                              

conveyance.    The housing authority further contends that once it stopped its annual                                                                                                                                                                               

inspections, the Maels maintained and inspected the boiler themselves, indicating their                                                                                                                                                                                     

understanding that the responsibility had shifted to them. But we agree with the superior                                                                                                                                                                        

court's conclusion that under the terms of the Agreement the housing authority retained                                                                                                                                                                         

the duty to inspect until the home was formally conveyed and the Maels were given legal                                                                                                                                                                                     

title to it.                    

                                                                  a.	                   Contract language   

                                            Under the de novo standard of review, "we assess the expectations of the                                                                                                                                                             

parties   to   the   contract   by   'examining   the   language   used   in   the   contract,   case   law  

interpreting similar language, and relevant extrinsic evidence, including the subsequent                                                                                                                                                               


conduct of the parties.' "                                                                                                                                                                                                                                                       

                                                                                           The housing authority's contractual argument relies on the  


Agreement  3.2, which provides that the "lease under this Agreement . . . shall expire  


when the Initial Purchase Price has been fully amortized."  Because the initial purchase  

                      43                    (...continued)  


the court's denial of its motion for JNOV rest on the same theory - that the court erred  


by deciding that "[n]egligence can be found by a person or entity failing to exercise  


reasonable care in performing a duty or promise set out in a contract" - we reject these  


challenges as well.  

                      44                   Black v. Whitestone Ests. Condo. Homeowners' Ass'n, 446 P.3d 786, 791  


(Alaska 2019) (quoting Norville v. Carr-Gottstein Foods Co., 84 P.3d 996, 1004 (Alaska  



                                                                                                                                       -20-	                                                                                                                               7591

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


price is amortized over 25 years, the housing authority argues that the Agreement and  


all of the housing authority's duties under it expired in 2009, 25 years after the Maels  


moved in. The housing authority essentially argues that the lease and the Agreement are  


the same thing: When the lease expires upon full amortization of the purchase price, the  


Agreement expires as well.  


                    But  we  interpret  the  term "lease"  as  referring  to  some  subpart  of  the  


Agreement.   The contract uses the shorthand term "Agreement" to mean the whole  


mutual help and occupancy agreement - the parties' entire written  contract.   The  


contract  provides,  "This  Mutual  Help  and  Occupancy  Agreement  ('Agreement')  is  


entered  into  by  and  between  AVCP  RHA  ('IHA')  and  the  Homebuyer  whose  


signature(s) appear below."  A later provision addresses "the Homebuyer's lease under  


this Agreement."   Under the Agreement the "term of the lease" is the period during  


which the homebuyer is required to make monthly payments toward the "acquisition of  


ownership."  The Agreement specifies the two ways it can be terminated:  The housing  


authority  may  terminate  it  if  the  homebuyer  breaches  it,  and  the  homebuyer  may  


terminate it apparently for any reason.  In either instance, the party seeking to terminate  


must give the other party written notice. And " 'Termination' as used in this Agreement  


does not include acquisition of ownership by the Homebuyer."  It is undisputed in this  


case that the homebuyers did not acquire ownership of the home and that neither party  


gave the other notice of termination.  


                    The Maels observe that to accept the housing authority's argument that the  


Agreementsimply terminated when the purchase pricewas fully amortized "would mean  


that the family would continue to live in a house, with legal title still held by the Housing  


Authority, but neither party would have any obligations to the other" - a result the  


Maels contend would be "nonsensical."  Notably, the Agreement provides that once the  


housing authority "has given notice . . . that the Homebuyer is required to purchase his  

                                                              -21-                                                         7591

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

Home, and until the Homebuyer purchases his Home, he shall have all the rights of a                                                                                                                                     

Homebuyer . . . and shall be subject to all the obligations of this Agreement."                                                                                                                   Although  

a strict reading of this sentence would indicate that the parties' respective rights and                                                                                                                         

obligations continue until conveyance                                                           only if     the housing authority "has given notice . . .                                                               

that   the   Homebuyer   is   required   to   purchase   his   Home,"   we   reject   that   reading   as  

                      45     It would be unreasonable to conclude that the housing authority's failure to  


give  the  required  notice  means  that  homebuyers  lose  their  contractual  rights  and  


obligations  as  soon  as  the  home  becomes  eligible  for  conveyance,  whereas  the  


homebuyers retain those rights and obligations if the housing authority has given notice.  


A common sense reading of the Agreement requires us to conclude that it governs the  


parties' relationship until the home is conveyed to the homebuyer or the Agreement is  


terminated by either party in accordance with its written notice requirements - neither  


of which happened here.46  


                                                   b.               Subsequent conduct  


                                  The parties' conduct supports a conclusion that they mutually understood  


the Agreement to be in effect at the time of the explosion.  The conduct surrounding  


                 45               See Est. of Polushkin ex rel. Polushkin v. Maw                                                                     , 170 P.3d 162, 172 (Alaska                       

2007) (When interpreting a contract we will prefer "[a]n interpretation which gives a                                                                                                                                   

reasonable, lawful, and effective meaning to all the terms . . . to an interpretation which                                                                                                                

leaves a part unreasonable, unlawful, or of no effect." (quoting R                                                                                             ESTATEMENT  (SECOND)  

OF CONTRACTS  203(a) (A                                              M. L. I        NST . 1981))).   




                                  The housing authority also relies on the testimony of its Indian housing  


expert that the Agreement expired 25 years after the Maels entered into it.   But that  

reading led the expert to conclude that there was no legal relationship at all between the                                                                                                                         


housing authority and the Maels at the time of the explosion; the Maels became squatters  


as soon as the purchase price was fully amortized, with neither party owing any duties  


to the other.   We reject this interpretation as unreasonable; the parties cannot have  


intended an automatic trigger date that left the Maels' home in perpetual legal limbo.  

                                                                                                        -22-                                                                                                  7591

----------------------- Page 23-----------------------


inspections is mixed.  The housing authority concedes that it continued to inspect the  


home until 2011 - two years after it contends that its duty to do so had expired.  It  


labels these extra inspections "mistake[s]."   But the 2011 inspection was marked as  


"Annual" rather than "Final," giving no indication that there would not be another.  The  


Maels concede that no inspections occurred after 2011.  Five years without inspections  


may be long enough for the Maels to have reasonably understood that there would be no  


more, and there was little evidence that the Maels ever inquired about their status.  But  


other testimony indicated that inspections werealwaysinitiated by thehousing authority;  


the Maels typically waited for the housing authority to act without prompting, and the  


jury  could  conclude  that  this  conduct  was  consistent  with  the  housing  authority's  


retention of the duty.  


                     The housing authority also points to testimony from the Maels that they  


performed  their  own  maintenance  of  the  boiler  after  the  housing  authority's  last  


inspection  in  2011.             But  this  is  not  convincing  on  the  issue  of inspections,  as  the  


Agreement separately addressed the duties to inspect and to maintain, imposing the duty  


to maintain on the homebuyer.  


                     More broadly, the housing authority's actions indicate that it understood  


there  to  be  a  continuing  legal  relationship  with  the  Maels  under  the  Agreement.  


Although  the  home's  purchase  price  was  fully  amortized  as  of  2009,  the  housing  


authority continued to accept the Maels' monthly administrative fees right up to the time  


of  the  explosion.            The  fees  are  evidence  of  both  the  Maels'  expectation  of  some  


continued services and the housing authority's agreement that some services were still  


owed.  And after the explosion the housing authority repaired damage to the home and  


replaced the boiler.  


                     In sum, the language and structure of the contract, along with sufficient  


extrinsic evidence, indicate that the rights and obligations imposed by the Agreement  

                                                               -23-                                                         7591

----------------------- Page 24-----------------------

were intended to remain in effect until the Agreement was terminated or the property was                                                                                                                     

conveyed.  The superior court did not err in deciding that the housing authority's duty                                                          

to inspect still existed at the time of the explosion.                                             

                                                  c.              Federal regulations   

                                 Federal regulations also support a continuing duty to inspect.                                                                                            Former 24   

C.F.R.    805.306(d), quoted above, required annual inspections at the time the Maels                                                                                                                 

moved into the home and entered into the Agreement.                                                                                     The housing authority relies on                                          

a 2008 notice issued by HUD explaining that a housing authority's duty to inspect                                                                                                                   

mutual                 help             homes                 "expires                   when               unit            ownership                       is        conveyed                      to         the  

homebuyer/purchaser,   or   when   unit   ownership   should   have   been   conveyed   to   the  

                                                                                                               47                                                                           48     In 2012  



homebuyer/purchaser, whichever is sooner."                                                                            That notice expired in 2010. 

HUD  "modifie[d]  and  update[d]"  its  notice  to  say  that  "the  recurring  inspection  


requirement expires when unit ownership is conveyed to the homebuyer/purchaser" -  


omitting the "or when ownership should have been conveyed" clause.49                                                                                                                   The housing  


authority argues that because the house should have been conveyed in 2009, when the  


2008 guidance was in effect, its duty to conduct annual inspections of the Maels' home  


was permanently extinguished.  According to the housing authority's argument at trial,  


this  meant  there  was  a  narrow  category  of  Indian  homes  that  became  eligible  for  


                 47              U.S. D           EP 'T OF HOUS. & U                               RB. D         EV. O          FF.   OF  PUB. & I                   NDIAN  HOUS., PIH-  

                                                  EINSTATEMENT OF PIH NOTICE 2006-19 (2008).  


2008-32 (ONAP), R 



                                 U.S. DEP 'T OF HOUS. & URB. DEV. OFF. OF PUB. & INDIAN  HOUS., PIH- 

                                                  XTENSION (2009).  


2009-30 (ONAP), E 

                 49              U.S.  DEP 'T OF                      HOUS. & U                    RB. D         EV. O          FF.   OF  PUB. & I                   NDIAN  HOUS., PIH-  

                                          S), RECIPIENT  INSPECTION OF  HOUSING UNITS  ASSISTED UNDER THE  


2012-45 (TDHE 




(NAHASDA) (2012).  

                                                                                                      -24-                                                                                                7591

----------------------- Page 25-----------------------

conveyance between 2008 and 2012 which housing authorities had no duty to inspect                                                                                                                     

even if they still owned them.                                              

                                 We reject the argument that the 2008 guidance shows the intent of the                                                                                                         

parties at the time they entered into the Agreement decades earlier.                                                                                                        "We discern the                     

parties' intent by looking 'to the written contract as well as extrinsic evidence . . .                                                                                                               at the   

                                                                            50     The housing authority points to no extrinsic evidence  

time the contract was made                                           .' "                                                                                                                         

fromthe 1980s, "the time the contract was made," that would illustrate an intent different  


from what we can discern from looking at the written contract and the regulations then  


in effect.  Furthermore, if subsequent regulations could define the parties' earlier intent,  


then  we  would  consider  not  only  the  2008  notice  but  also  the  2012  notice  which  


"modifie[d] and update[d]" it, and which - presumably intentionally - omitted the  


                                                                                                                      51     Nothing in the 2012 notice indicates  

language on which the housing authority relies.                                                                                                                                                   


that it applies only to homes that become eligible for conveyance after its issuance.  If  


the 2008 notice could extinguish a duty in an existing contract, then the 2012 notice  


could reinstate it.  


                 50              Lingleyv.AlaskaAirlines,                                         Inc ., 373 P.3d 506, 512 (Alaska2016) (alteration                                            

in original) (emphasis added) (quoting                                                          Larsen v. Mun. of Anchorage                                             , 993 P.2d 428, 431                    

(Alaska 1999)).   

                 51               Cf. Davis Wright Tremaine LLP v. State, Dep't of Admin., 324 P.3d 293,  


303  (Alaska  2014)  (noting  that  "a  provision's  omission  in  a  statute  typically  is  


interpreted to be intentional when the provision is present in a similar statute" (citing 2B  



STATUTORY CONSTRUCTION  51:2, at 213-14 (7th ed. 2007))).                                                                               


                                                                                                       -25-                                                                                                7591

----------------------- Page 26-----------------------

                               In sum, we agree with the superior court's conclusion that, as a matter of           

 law, both the contract and the federal regulations created a duty to inspect that was in                                                                                                        

 effect at the time of the explosion.                                          52  


                B.	            The Superior Court Did Not Abuse Its Discretion By Denying The  


                               Housing Authority's Motion For A New Trial.  


                               The housing authority next argues that the superior court should have  


 granted its motion for a new trial as it was against "the clear weight of evidence" for the  


jury to conclude that the housing authority breached a duty to inspect and that the boiler  


 explosion was not caused instead by a design defect.  


                               The housing authority's third-party claim against Burnham was based on  


 the theory that the explosion must have been caused by a defect in the boiler.  Burnham  


 settled with Dietrich and his children before trial and was dismissed from the suit.  For  



purposes of considering whether to allocate fault to Burnham,                                                                                     the jury was instructed  


 on both of our recognized tests for determining whether a manufactured product is  


 defective:  (1) the boiler "failed to perform as safely as an ordinary consumer would  


 expect when used in an intended or reasonably foreseeable manner" (the consumer  


 expectations test), and (2) "the boiler's design legally caused injury and . . . Burnham  


 LLC fail[ed] to prove, in light of the relevant factors, that, on balance, the benefits of the  

                52             Because we agree with the superior court's conclusion that the housing                                                                              

 authority's   duty   to   conduct   annual   inspections   continued   after   the   date   of   its   last  

 inspection in 2011, we do not need to discuss the housing authority's argument that it                                                                                                  

 cannot have been negligent for failing to detect a problem with the pressure relief valve                                                                                                

 during the 2011 inspection.                                     

                53             See AS 09.17.080(a)(2) (requiring trial court to instruct jury to consider  


 "the percentage of the total fault that is allocated to each claimant, defendant, third-party  


 defendant, person who has been released from liability, or other person responsible for  


 the damages").  


                                                                                               -26-	                                                                                      7591

----------------------- Page 27-----------------------


  design outweigh the risk of danger inherent in such design" (the risk-benefit test).                                                                                                                                                                                                                                                                                                                                                                                               The  

jury found that Burnham did not "supply a defective boiler." We conclude that there was                                                                                                                                                                                                                                                                                                                                                                                                 

  sufficient evidence to support the jury's decision that the housing authority failed to                                                                                                                                                                                                                                                                                                                                                                                                        

 prove that the boiler was defective under either design defect test.                                                                                                                                                                                                                                                                                           

                                                                              1.                                    Consumer expectations test                                                                                                                      

                                                                              The housing authority relies on testimony from its boiler expert which it                                                                                                                                                                                                                                                                                                                                              

  claims   is   uncontradicted   evidence   proving  a   product   defect   under   the   consumer  

  expectations test.                                                                                  The expert observed that the Maels were using the boiler for home                                                                                                                                                                                                                                                                                                      

 heating, which was its intended and foreseeable use.                                                                                                                                                                                                                                                                   He concluded that the pressure                                                                                                      

 relief valve was not functioning properly and was allowing the pressure inside the boiler                                                                                                                                                                                                                                                                                                                                                                                   

 to rise to a level beyond the strength of the tank to contain it, which resulted in the                                                                                                                                                                                                                                                                                                                                                                                  

  explosion. When asked if the boiler was well maintained, the expert testified that he did                                                                                                                                                                                                                                                                                                                                                                                                 

 not "see any specific issues with the [valve or] the boiler itself." Based on the age of the                                                                                                                                                                                                                                                                                                                                                                                                

 unit, his review of the components, and testimony that the boiler was whistling shortly                                                                                                                                                                                                                                                                                                                                                                              

 before the explosion, he concluded that the boiler may have exploded even if it had been                                                                                                                                                                                                                                                                                                                                                                                          

  inspected six months before, because the valve could degrade in that amount of time.                                                                                                                                                                                                                                                                                                                                                                                                                    

                                                                             But the expert also testified that the pressure valve was not poorly designed                                                                                                                                                                                                                                                                                                  

 but rather "wasn't sufficient based on the age and the use to prevent [the explosion]."                                                                                                                                                                                                                                                                                                                                                                                                                            

  The jury heard that the boiler was 30 years old and that after the explosion the housing                                                                                                                                                                                                                                                                                                                                                                      

  authority   replaced   it   with   one   of   the   exact   same   model.     And  a   housing   authority  

 repairman testified that the pressure valve clearly was not maintained, as evidenced by                                                                                                                                                                                                                                                                                                                                                                                                       

  corrosion and signs of leakage, and that he did not believe the design was defective.                                                                                                                                                                                                                                                                                                                                                                                                         A  

jury that believed this version of the facts "could intelligently conclude that the [boiler]                                                                                                                                                                                                                                                                                                                                                                       



                                                                             See Gen. Motors Corp. v. Farnsworth, 965 P.2d 1209, 1220 (Alaska 1998)  


  (quoting Caterpillar Tractor Co. v. Beck, 593 P.2d 871, 884 (Alaska 1979)).  

                                                                                                                                                                                                                                             -27-                                                                                                                                                                                                                                                             7591  

----------------------- Page 28-----------------------


was [fit] for ordinary use"                                                 and therefore reject a design defect theory based on the                                                                                     

consumer expectations test.                                   

                                   2.	              Risk-benefit test   

                                   The housing authority also relies on its boiler expert's testimony to argue                                                                                                     

that the Maels "failed to show that on balance the benefits of the challenged design                                                                                                                            

outweighed the risk of danger inherent in such design."                                                                                                The expert testified that the                                     

explosion could have been avoided if the boiler had a more reliable pressure relief valve.                                                                                                                                          

But weighing the risks and benefits of the chosen design is only one element of the risk-                                                                                                                             

benefit test; the housing authority also had to convince the jury that the "boiler's design                                                                                                                      


legally caused injury."                                                                                                                                                                                   

                                                                  There was enough evidence for a jury to reasonably conclude  

that the explosion was not caused by a design defect but rather was due to the boiler's  


age and condition, factors out of Burnham's control. The evidence that something other  


than the design caused the boiler to explode was not "so completely lacking or slight and  

                                                                                                                                                                                          57  we therefore  


unconvincing as to make the verdict plainly unreasonable and unjust"; 

affirm the superior court's denial of the motion for a new trial on the product defect  



                  C.	              The  Admission  Of  Dietrich's  Medical  Records  Without  A  Proper  


                                   Foundation Was Harmless Error.  


                                   The housing authority argues that the superior court abused its discretion  


when it admitted medical records under the business records exception to the hearsay  


rule without the required foundational testimony of a records custodian.  "As a general  


                 55               Id.  at   1221.  

                 56                See  id.  at   1220.  

                 57                Hunter   v.   Philip   Morris   USA   Inc .,  364  P.3d   439,   447   (Alaska   2015)  

(quoting  Hogg  v.  Raven  Contractors,  Inc .,   134  P.3d  349,  352  (Alaska  2006)).  

                                                                                                           -28-	                                                                                                    7591

----------------------- Page 29-----------------------

rule hearsay statements are inadmissible at trial unless they fall under an enumerated                                           


exception or exclusion . . . ."                                                                                                              

                                                     "Medical records kept by hospitals and doctors are often  

                                                                                 59   This exception, found in Alaska Rule  



admitted under the business records exception." 

of Evidence 803(6), allows records that are otherwise hearsay to be admitted if five  


requirements are met:  


                       [F]irst, the record must be of a "regularly conducted business  


                       activity"; second, the record must "be regularly kept"; third,  


                       the source of information "must be a person who has personal  


                       knowledge";   fourth,   the   information   must   have   been  


                       "recorded contemporaneously with the event or occurrence";  


                       and  fifth,  "foundation  testimony  by  the  custodian  of  the  


                       record" must be provided.[60]  


                       The housing authority does not argue that Dietrich's medical records could  


not substantively qualify for the business records exception; it does not question the  


records'  content  or  authenticity.                          It  argues  only  that  the  fifth  of  the  Rule's  five  


requirements was not met: There was no foundation testimony provided by the records'  


custodian.           The superior  court acknowledged  this shortcoming  when  admitting  the  


records over the housing authority's objection:  "I am going to let them in as business  


records.  I would note that it is true that the foundation for that was somewhat thin.  On  


the other hand, medical records aresuch acommonand well-understood exception under  


the hearsay rules . . . ."  


           58          Wassillie  v.  State,  411  P.3d  595,  600  (Alaska  2018).  

           59          Liimatta  v.   Vest,  45  P.3d  310,  318  (Alaska  2002).  

           60          Wassillie,  411  P.3d  at  600  (quoting  Noffke  v.  Perez,   178  P.3d   1141,   1147  

(Alaska  2008)).  

                                                                       -29-                                                                 7591

----------------------- Page 30-----------------------

                          It   was   error   to  admit  the   records   without   the   foundational   testimony  

required by Rule 803(6).                            But that conclusion does not end our inquiry; the housing                                            


 authority "must still show that the error was harmful or prejudicial."                                                                    


                          "The test for determining whether an error was harmless is 'whether on the  


whole record the error would have had a substantial influence on the verdict of a jury of  

                                           62    The housing authority posits two theories of prejudice:  The  


reasonable laymen.' " 

 error  allowed  the  jury  to  consider  hearsay  evidence  of  Dietrich's  "medical  issues,  


 diagnosis, and prognosis," and the error allowed him to use the sheer "volume of the  


records (hundreds and hundreds of pages) to reinforce the seriousness of the injuries."  


While neither argument calls into question the jury's finding of liability, the arguments  


 could, if accepted, affect the amount of damages awarded.  


                          We conclude, however, that any effect this evidence could have had on the  


jury was harmless.  The jury was exposed to the same information in unobjectionable  


ways.   The jury saw the stack of medical records during the testimony of a medical  


 expert, who relied on them in his testimony and described the volume as "[p]ushing 600  


pages." And the jury learned of the records' content through the extensive testimony of  


medical  experts  including  two  doctors  and  a  rehabilitation  specialist,  along  with  


Dietrich's own testimony about his injuries. The housing authority's brief discussion of  


this issue on appeal does not suggest any information the jury could have learned from  


the erroneously admitted medical records that was both prejudicial and not otherwise in  


 evidence.  Because the error could not have had a substantial influence on the jury, the  


             61           Noffke, 178 P.3d at 1147;                           see also Jones v. Bowie Indus., Inc                                  ., 282 P.3d     

 316, 328 (Alaska 2012) ("Even though admission of evidence is erroneous, we will                                                                                

reverse only if the error was not harmless.").                   

             62           Noffke, 178 P.3d at 1147-48 (quoting Dalkovski v. Glad, 774 P.2d 202, 207  


 (Alaska 1989)).  


                                                                                -30-                                                                           7591

----------------------- Page 31-----------------------

superior court's failure to require foundational testimony from a records custodian was                                                                                                                                                

harmless error.   

                   D.	                The    Superior    Court    Did    Not    Err    By    Applying    The    Statutory  

                                     Noneconomic Damages Cap To Dietrich's Award.                                                                                   

                                     ThejuryawardedDietrich $1,580,000in                                                                             noneconomicdamages,acategory                                        

the jury instructions defined as "a fair amount to compensate him for past and future pain                                                                                                                                             

and suffering, loss of enjoyment of life, and physical impairment resulting from the                                                                                                                                                     

injury." The superior court reduced that award pursuant to AS 09.17.010(c). The statute                                                                                                                                         

provides that when noneconomic damages "are awarded for severe permanent physical                                                                                                                                          

impairment or severe disfigurement," they "may not exceed $1,000,000 or the person's                                                                                                                                      


life expectancy in years multiplied by $25,000, whichever is greater."                                                                                                                                     


                                     The Maels argue that the court's reduction of the damages award violated  


Dietrich's substantive due process rights in two ways.  First, they argue that imposing  


the cap is "arbitrary and irrational" because "inflation has significantly eroded the value  


of the award" since the time the legislature decided the cap's amount.  Second, they  


argue that the cap "unreasonably fails to allow an exception for a plaintiff with the most  


serious imaginable non-economic injuries."   The Maels acknowledge  that we have  


upheld the cap's constitutionality in previous cases, but they argue that those cases  


involved facial challenges to the statute, whereas they are challenging the statute only  

                                                              64  They argue that they should prevail even under rational basis  

as applied to Dietrich.                                                                                             

                   63	               AS 09.17.010(c).   



                                     A  facial  challenge  to  a  law's  constitutionality  alleges  that  the  law  is  

unconstitutional "as enacted"; we will uphold a law against a facial challenge "even if  


it might occasionally create constitutional problems in its application, as long as it 'has  


a plainly legitimate sweep.' "  State v. Planned Parenthood of the Great Nw., 436 P.3d  


984, 1000 (Alaska 2019) (quoting Planned Parenthood of the Great Nw. v. State, 375  


                                                                                                                   -31-	                                                                                                            7591

----------------------- Page 32-----------------------

review,   but   also   that   we   should   apply   intermediate   scrutiny   because   noneconomic  

interests are at stake - namely Dietrich's "very will to live."                                                     

                         1.          We review the due process claims for rational basis.                                        

                         "Substantive due process is a doctrine that is meant to guard against unfair,                                               


irrational, or arbitrary state conduct that 'shock[s] the                                        universal sense of justice.' "                         "We  


have employed three standards under which claims of substantive due process violations  



may be reviewed:  strict scrutiny, intermediate scrutiny, and rational basis review." 


Strict  scrutiny  is  reserved  for  those  cases  in  which  "a  law  substantially  burdens  a  


fundamental right"; in such cases "the State must articulate a compelling state interest  


that justifies infringing the right and must demonstrate that no less restrictive means of  



                                                                    Intermediate scrutiny is applied when "state action  

advancing the state interest exists." 


interferes with an individual's liberty interest that is not characterized as fundamental";  


in such cases "the State must show a legitimate state interest and a 'close and substantial  

                                                                                                                                         68    The most  


relationship' between that interest and the chosen means of achieving it." 

lenient level of scrutiny is rational basis review, under which "the party claiming a  


            64           (...continued)  

P.3d  1122,  1133  (Alaska  2016)).   An  as-applied  challenge  alleges  that  although  the  law  

may  be  constitutional  in  some  circumstances,  it  is  unconstitutional  under  the  particular  

facts  of  the  case.   State  v.  ACLU  of  Alaska ,  204  P.3d  364,  372  (Alaska  2009).  

            65           Doe v. Dep't of Pub. Safety, 444 P.3d 116, 125 (Alaska 2019) (alteration  


in original) (quoting Church v. State, Dep't of Revenue, 973 P.2d 1125, 1130 (Alaska  



            66           Id.  

            67           Id. (emphasis in original).  


            68           Id. at 125-26 (quoting Sampson v. State, 31 P.3d 88, 91 (Alaska 2001)).  


                                                                            -32-                                                                       7591

----------------------- Page 33-----------------------

substantive due process violation has the                           burden of showing that there is no rational basis                     

for the challenged legislation."                    69  

                       "[W]e have consistently held that restrictions on the types or amounts of  


damages  that  a  plaintiff  can  pursue  in  court  impair  economic  interests  only"  and  


therefore are subject to the most lenient scrutiny, rational basis review.70                                                  Both of the  


Maels' challenges to the statutory damages cap are economic.  Their first challenge -  


that the statute arbitrarily fails to account for inflation - is squarely about the "amount[]  


of damages that a plaintiff can pursue."71  


                       The Maels argue that their  second  challenge - that the cap  does not  


account for themostseriouslyinjured plaintiffs -requiresintermediatescrutiny because  


the extent of Dietrich's injuries implicates his will to live.  But we rejected essentially  


the same argument in C.J. v. State, Department of Corrections, in which a woman who  


had been attacked by a man out on parole sued the State for negligence.72                                                   The superior  


                                                                                                                      73   On appeal the  

court ruled that her damages were subject to the $400,000 damages cap.                                                                       


plaintiff argued that the cap violated the Alaska Constitution's equal protection clause  


by creating two separate classes of plaintiffs:  those fully compensated because their  


noneconomic damages fell below the cap and those who could not be fully compensated  


           69         Id.  at   126.  

           70         L.D.G.,  Inc.  v.  Brown,  211  P.3d  1110,  1132  (Alaska  2009)  (quoting  C.J.  v.  

State,  Dep't  of  Corr.,   151  P.3d  373,  379  (Alaska  2006)).  

           71         Id.  (quoting  C.J.,   151  P.3d  at  379).  

           72          151  P.3d  at  376.  

           73         Id . at  377;  see AS 09.17.010(b) (limiting noneconomic  damages "arising  

out   of   a   single   injury   or   death"   to   $400,000, "[e]xcept   as  provided  under   (c)   of   this  

section"   providing  the  higher  cap  "when  the  damages  are  awarded  for  severe  permanent  

physical  impairment  or  severe  disfigurement").  

                                                                     -33-                                                                7591

----------------------- Page 34-----------------------


because their damages were reduced by the cap.                                                    We concluded that the plaintiff's              

interests were economic and rejected the notion that a "disproportionate amount of pain                                                                     

and suffering compared to monetary loss" warranted a higher level of scrutiny.                                                                       75  


                         The Maels also argue that the degree of Dietrich's suffering is so elevated  


that an interest higher than the merely economic is necessarily implicated.  While the  


degree of Dietrich's injury may be heightened, as in C.J., the nature of his claim is still  



about the "amount[] of damages that [he] can pursue" and is therefore economic. 

Rational basis review thus applies to both of the Maels' due process arguments.  Their  


burden to prove the statute's unconstitutionality "is a heavy one, for if any conceivable  


legitimate public policy for the enactment is apparent on its face or is offered by those  


defending the enactment, the opponents of the measure must disprove the factual basis  


for such a justification."77  


                         2.	          The statutory cap's failure to account for inflation does not  


                                      violate Dietrich's right to due process.  


                         The  Maels  contend  that  the  damages  cap  violates  Dietrich's  right  to  


substantive due process, as applied to him, because time and inflation have arbitrarily  


reduced the cap's real value from the level the legislature considered appropriately  


compensatory when the cap was enacted in 1997.  The Maels argue that if the cap is  


adjusted for inflation, as it should be, Dietrich's jury award falls below it.  


             74          C.J.,   151  P.3d  at  378.  

             75          Id.  at  380-81.  

             76          L.D.G.,  Inc.,  211  P.3d  at   1132  (quoting  C.J.,   151  P.3d  at  379).  

             77          Doe  v.  Dep't  of  Pub.  Safety,  444  P.3d   116,   126   (Alaska  2019)   (quoting  

Concerned  Citizens of S.  Kenai Peninsula v. Kenai  Peninsula  Borough,  527  P.2d  447,  

452  (Alaska   1974)).  

                                                                              -34-	                                                                       7591

----------------------- Page 35-----------------------

                          As a preliminary matter, we reject the Maels' characterization of their                                                               

argument as an as-applied challenge. "An as-applied [constitutional] challenge requires                                                                   

                                                                                                                                                      78  while a  

evaluation of the facts of the particular case in which the challenge arises,"                                                                                         

facial challenge means "that there is no set of circumstances under which the statute can  


be applied consistent with the requirements of the constitution."79   The Maels argue that  


"there is no rational basis for limiting such a plaintiff to an award worth only 60% of the  


value of the award the legislature approved."   But they do not explain why the 60%  


figure should have any special significance, and all litigants are affected by inflation to  


some degree.  If the cap's failure to account for inflation violates due process as it is  


applied in this case, then there is "no set of circumstances under which the statute can be  


applied consistent with the requirements of the constitution."80  


                          We  have  repeatedly  upheld  the  constitutionality  of  the  noneconomic  


damages cap as against facial challenges.  Shortly after the statute was passed, a group  


of plaintiffs and prospective plaintiffs sought a declaratory judgment that the cap was  


unconstitutional because it violated the Alaska Constitution's equal protection and due  


process clauses.81                   In Evans ex rel. Kutch v. State an equally divided court upheld the  


superior court's ruling that the cap did not violate either protection.82  We first concluded  


that "the plaintiffs' interests in unlimited damages are merely economic" and that the  


             78           Dapo  v.  State,   Off.  of   Child.'s Servs.,  454  P.3d   171,   180   (Alaska  2019)  

(alteration  in  original)  (quoting  Kyle  S. v.  State,  Dep't of Health  &  Soc.  Servs.,  Off.  of  

Child.'s  Servs.,  309  P.3d   1262,   1268  (Alaska  2013)).  

             79           State v. ACLU of Alaska , 204 P.3d 364, 372 (Alaska 2009).  


             80           Id.  

             81           Evans ex rel. Kutch v. State, 56 P.3d 1046, 1048, 1050 (Alaska 2002).  


             82           Id. at 1070.  


                                                                                 -35-                                                                           7591

----------------------- Page 36-----------------------

State's enumerated interests in applying the cap - discouraging frivolous litigation,                                                                                


curbing excessive damages awards, and controlling insurance rates -                                                                                 were legitimate.                       

We applied the "low end" of the sliding scale for review of equal protection claims,  


which  requires  a substantial relationship  between  the legislative objectives and  the  


statute.84  We recognized a substantial relationship and held that the cap therefore did not  


violate equal protection.85  


                             We rejected an argument raised by the appellants in Evans that across-the- 


board application of a single cap was not substantially related to the legislature's goals  


because it failed to account for rural Alaskans' higher costs of living.86                                                                                      The Maels'  


inflation argument relies on similar logic:  that the statute is unconstitutional because it  


does not provide all Alaskans with compensation of the same real value.   In Evans we  


noted that "[t]here is also no violation of equal protection merely because the damages  


caps do not provide for cost of living adjustments."87                                                            And because the "substantive due  


              83            Id.  at 1052-53.   

              84            Id.  at 1054.   

              85            Id.  at 1055.   

              86            Id.  at 1054.   

              87            Id.  at 1055.   

                                                                                        -36-                                                                                  7591

----------------------- Page 37-----------------------

process test is a more deferential version of the equal protection test already discussed,"                                            


the statute complied with due process as well.                                         


                        The Evans decision is not binding because the court was evenly divided.                                                              



But in C.J. we adopted Evans 's controlling opinion and relied on it in rejecting facial and  

                                                                                                               90      We  reiterated  that  


as-applied  challenges  to  the  noneconomic  damages  cap. 

noneconomicdamages awards are "subject to minimal protection"; theyareby definition  


one-time awards and therefore not "source[s] of sustaining income" that would merit  


higher protection.91                 We concluded that the means-end fit between the cap and the goal  


of lowering the cost of insurance was satisfied: the legislature was entitled to decide that  


large damage awards overestimate the value of a victim's noneconomic loss, and it could  


reasonably conclude that alternative ways of addressing insurance costs would be less  


fair than the cap.92  


                        Although in  C.J. we addressed an equal protection challenge, the equal  


protection analysis involves a more exacting standard than the rational basis review we  


            88          Id.   The  dissenting  opinion  of  the  equally  split  court  in  Evans  would  have  

held  that the cap  violated equal protection.  The dissent  disagreed with the controlling  

opinion's  conclusion  that  the  interest  in  damages  is  purely  economic  and  receives  only  

the lowest  level of equal protection scrutiny.   Id. at 1072 (Bryner, J., dissenting).  The  

dissent  also  disagreed  with  the  controlling  opinion's  means-to-end  analysis.   Id.  at  1074.   

The  dissent  did  not  address  due  process  as  it  related  to  the  damages  cap.  

            89          L.D.G., Inc. v. Brown, 211 P.3d 1110, 1130 (Alaska 2009).  


            90          C.J. v. State, Dep't of Corr., 151 P.3d 373, 375, 379-81 (Alaska 2006).  


            91          Id. at 380.  


            92          Id. at 381.  


                                                                          -37-                                                                    7591

----------------------- Page 38-----------------------


apply in due process cases.                                           The Maels do not point to any compelling reason for us to                                                                             

change our analysis in                                Evans  and  C.J.   We must therefore reject their facial challenge to                                                                                

the noneconomic damages cap.                                      

                                3.	             The damages cap rationally considers the extent of a plaintiff's                                                                      


                                The Maels next argue that we should limit                                                                    C.J.   and   Evans   by making   


exceptions for the "most serious imaginable non-economic injuries," observing that  

Dietrich has suffered an extreme form of pain.                                                                  They argue that the cap has left Dietrich                                   

so   undercompensated   that   it   has   lost   any   substantial   relationship   to  the   legislative  

purposes.   Because this argument relies on the specific facts of Dietrich's case - the                                                                                                                 

extent of his injuries - it is appropriately characterized as an as-applied challenge.                                                                                                                  94  


                                But our analysis in C.J. still controls.  The victim in C.J. argued that it was  


"irrational to single out the most severely injured tort victims to pay for the reduction in  



premiums."                         She argued that the inequity was especially " 'exacerbated' when applied  


to her because (1) as a rape victim, her injury involves a 'disproportionate amount of  


pain  and  suffering  compared  to  monetary  loss'  and  (2)  as  a  low-wage  earner  her  



 'recovery will depend almost entirely on noneconomic damages.' "                                                                                                        We rejected the  


plaintiff's argument, noting that "while limiting the noneconomic damages for such a  


grievous injury may seem harsh, we have held that 'under a minimum scrutiny [equal  

                93              Evans, 56 P.3d at 1055.                     



                                See Dapo v. State, Off. of Child.'s Servs., 454 P.3d 171, 180 (Alaska 2019).  



                                C.J., 151 P.3d at 380.  



                                Id. at 381.  

                                                                                                   -38-	                                                                                            7591

----------------------- Page 39-----------------------

protection]   analysis,   we   do   not   determine   if   a   regulation   is   perfectly   fair   to   every  

individual to whom it is applied.' "                    97  

                     Furthermore,  the  legislature  specifically  addressed  the  most  seriously  


injured plaintiffs by creating two separate damage caps.  The cap is set at "$400,000 or  


the injured person's life expectancy in years multiplied by $8,000, whichever is greater,"  


for "a single injury or death" but it allows awards up to "$1,000,000 or the person's life  


expectancy in years multiplied by $25,000, whichever is greater, when the damages are  


awarded for severe permanent physical impairment or severe disfigurement."98  Dietrich  


was subject to the higher of the two caps.99   Although the cap is not perfectly tailored to  


the extent of Dietrich's loss as determined by the jury, we must reject the argument that  


the legislature irrationally failed to account for the suffering of the most severely injured  



           E.	       The  Superior  Court  Did  Not  Err  By  Concluding  That  Dietrich's  


                     Noneconomic Damages And The Other Family Members' Damages  


                     For Negligent Infliction Of Emotional Distress Were Not Subject To  

                     The Same Statutory Cap.  


                     The housing authority also takes issue with the superior court's application  


of the noneconomic damages cap.   It argues that the court should have aggregated  


Dietrich's noneconomic damages award of $1,580,000 with the amounts awarded to his  


family members for NIED, totaling $175,000, and applied the cap to the total rather than  


capping  only  Dietrich's  award;  in  other  words,  that  the  noneconomic  damages  to  


           97        Id.  (quoting  Eldridge v. State, Dep't of Revenue                       , 988 P.2d 101, 104 (Alaska           


           98        AS 09.17.010(b)-(c).  


           99        See AS 09.17.010(c).  


                                                                 -39-	                                                           7591

----------------------- Page 40-----------------------

Dietrich, his two children, and his parents combined should have been reduced to no                                                                                                   

more than $1,000,000.                              

                             The   statutory   caps   are   for   damages   "arising   out   of   a   single   injury   or  

                100    The determinative question here, therefore, is whether the damages awarded  


to Dietrich, his two children, and his parents all arose "out of a single injury."  The  


superior court decided that the NIED injuries suffered by Dietrich's family members  


were "sufficiently distinct" fromDietrich's injury that they weresubject to separate caps.  


The housing authority contends, however, that the cap is intended to apply to each  


"occurrence," and that all the Maels' claims arose out of a single occurrence, the breach  


of the duty to inspect. The Maels counter that the NIED claims are not merely derivative  


of Dietrich's injuries, as they involve injuries the NIED plaintiffs suffered directly, and  


that holding otherwise would lead to nonsensical results.  


                             "To determine the meaning of a statute, we 'look to the meaning of the  


language, the legislative history, and the purpose of the statute and adopt the rule of law  


                                                                                                                                           101  "Under our 'sliding  

that is most persuasive in light of precedent, reason, and policy.' "                                                                                                      


scale approach to statutory interpretation, . . . "the plainer the statutory language is, the  


               100           AS 09.17.010(b). The statute also states that "[m]ultiple injuries sustained                                                               

by one person as a result of a single incident shall be treated as a single injury for                                                                                              

purposes of this section." AS 09.17.010(d).                      

               101           Bohn v. Providence Health Servs.-Wash., 484 P.3d 584, 593-94 (Alaska  


2021) (quoting Alaska Spine Ctr., LLC v. Mat-Su Valley Med. Ctr., LLC, 440 P.3d 176,  


 180-81 (Alaska 2019)).  


                                                                                         -40-                                                                                   7591

----------------------- Page 41-----------------------

more convincing the evidence of contrary legislative purpose or intent must be" ' to                                                                              

convince this court to adopt a different meaning."                                             102  

                          Wefirst observethat NIEDinvolvesaninjury uniquetothevictim, separate  


fromthe witnessed injury that caused it. We have explained that "[u]nlike claims for loss  


of consortium, claims for emotional distress concern injuries that the claimants have  


suffered  directly,  rather  than  derivative  injuries  that  resulted  from  an  injury  to  


another."103   But this does not settle the statutory interpretation issue, as the statute uses  


broad language for the cap's reach, applying it not just to each injury but to all claims  

"arising out of a single injury or death."104  "Arise" means to originate from or to stem  


from.105  The statute's plain language shows a legislative intent to include in the cap more  


than just a single plaintiff's direct claim.  


                          Our  case law, however,  does not support an  interpretation  that would  


subject the claims of separately injured plaintiffs to a single cap.  In C.J. we addressed  


both the cap's application to damages "arising out of a single injury or death" and the  


additional  limitation  of  AS  09.17.010(d),  which  provides  that  "[m]ultiple  injuries  


sustained by one person as a result of a single incident shall be treated as a single injury  


for purposes of this section."106                                 We concluded  that the plaintiff who was sexually  


assaulted three times during one attack was entitled to recover up to the cap amount for  


             102         Id.  at 594 (alteration in original) (quoting                                 Alaska Spine Ctr., LLC                      , 440 P.3d     

at 181).   

             103         State Farm Mut. Auto. Ins. Co. v. Lawrence, 26 P.3d 1074, 1079 (Alaska  



             104         AS 09.17.010.  


             105         Arise , BLACK 'S  LAW  DICTIONARY  (11th ed. 2019).                                   


             106          C.J. v. State, Dep't of Corr., 151 P.3d 373, 382 (Alaska 2006).  


                                                                               -41-                                                                         7591

----------------------- Page 42-----------------------


each instance of assault.                         We held that each penetrative act was its own "distinct act[],                                       


each   an   intentional tort,                   each   causing   a separate injury."                                                                      

                                                                                                                     We explained  that the  


damages cap "is intended to limit recovery for a single tortious act that causes multiple  


injuries"; "[e]liminating liability for distinct tortious acts that cause distinct injuries  


would run counter to the stated purpose of the statute to decrease the cost of litigation  


'without diminishing the protection of innocent Alaskans' rights to reasonable, but not  

                                                                                                                             109     Central to our  


excessive, compensation for tortious injuries caused by others.' " 

discussion  in  C.J. was the fact that the case involved  a single victim and multiple  


injuries; in the instant case there are multiple victims, each suffering a distinct injury.  


                         In L.D.G., Inc. v. Brown we held that derivative claims arising out of a  


single injury are subject to the same cap, but the result was driven by clear statutory  


                  110   Two children who prevailed on a loss of parental consortium claim argued  


that the damages cap violated the fairness prong of equal protection as applied to them  


because it irrationally required multiple claimants to split a single recovery in a manner  


                                                                                    111    The children argued that the statutory  

that bore no relationship to their actual losses.                                                                                               


phrase "arising out of a single injury or death" should be interpreted to refer to each  


separate  claim  of  a  surviving  dependent,  because  each  surviving  dependent  had  a  


            107         Id.  at 384.   

            108         Id.  at 383.   

            109         Id.  (quoting Ch. 26,  1(1), SLA 1997).                                    We also noted that the damages     

cap was a derogation of common law and therefore must be construed narrowly.                                                                          Id.  at  

383 n.52.  


            110          211 P.3d 1110, 1135 (Alaska 2009).  


            111         Id. at 1131.  


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separate cause of action.                                      We rejected that argument, noting that the lack of modifiers                                                     

on "all claims" and language in the legislative history applying the cap per "occurrence"                                                                               

indicated that "the legislature was aware that multiple individuals could have claims                                                                                                  

arising from a single death or injury, and that the legislature nevertheless intended to                                                                                                         

apply a single cap to all such claims" arising from each "occurrence."                                                                                          113  

                               Our reasoning in L.D.G.  relied on the fact that the claims at issue were  


derivative claims for loss of consortium.114                                                            The legislature expressly identified such  


claims as subject to the "single injury or death" cap, intended to cover "the damages  


awarded by a court or a jury . . . for all claims, including a loss of consortium claim."115  


But we have recognized NIED as involving a separate injury to a different victim, so  


L.D.G. 's  reasoning  does  not  apply  to  the  emotional  distress  damages  awarded  to  


Dietrich's children and parents.  


                               Rather, because the Mael family members' NIED claims involve injuries  


separate from those suffered by Dietrich, each reflects a "single injury" subject to the  


statutory cap. This conclusion is consistent with legislative intent as well as the statutory  


language.   One of the cap's primary purposes was to ensure fair but not excessive  


compensation for tort victims.116  Applying one cap to victims who have suffered distinct  


injuries would not be consistent with this purpose.  One victim's recovery could leave  


other victims with no or a significantly reduced damage remedy.  We do not believe the  


                112           Id.  at 1134.   

                113           Id.  at 1135.

                114           Id.

                115            AS 09.17.010(b).  


                116            Minutes, House Judiciary Comm. Hearing on H.B. 58, 20th Leg., 1st Sess.  


(Feb. 21, 1997) (sponsor statement of Rep. Brian Porter).  


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legislature intended such a result.                                                                                                                                                                    The superior court did not err when it decided that                                                                                                                                                                                                                 

the awards of noneconomic damages to Dietrich and his family members were subject                                                                                                                                                                                                                                                                                                                                                                       

to separate statutory caps.                                                                                                                        

V.                                    CONCLUSION  

                                                                          The judgment of the superior court is AFFIRMED.  


                                      117                                 An amendment to narrow the cap to "all claims of a person . . . arising out                                                                                                                                                                                                                                                                                                                         

of a single injury or death" was adopted by the House Finance Committee out of concern                                                                                                                                                                                                                                                                                                                                                              

that the statute "could be interpreted [to mean] that the cap applies in aggre[g]ate," but                                                                                                                                                                                                                                                                                                                                                                                    

that language was omitted from the final version of the bill. Minutes, House Fin. Comm.                                                                                                                                                                                                                                                                                                                                                                

Hearing on H.B. 58, 20th Leg., 1st Sess. (Mar. 14, 1997); Ch. 26,  9, SLA 1997.                                                                                                                                                                                                                                                                                                                                                     

                                                                          The housing authority points to several references to "occurrence" in the                                                                                                                                                                                                                                                                                                                               

committee minutes and in a sectional summary to indicate that the legislature did not                                                                                                                                                                                                                                                                                                                                                                                            

intend   the   cap   to   apply   per   claimant.     Senate   Rules   Comm.,   Sectional   Analysis  of  

Proposed H.B. 58  9, 20th Leg., 1st Sess. at 2-3 (Apr. 16, 1997); Minutes, Senate Rules                                                                                                                                                                                                                                                                                                                                                                             

Comm. Hearing on H.B. 58, 20th Leg., 1st Sess. (Apr. 15, 1997) (statement by Rep.                                                                                                                                                                                                                                                                                                                                                                                        

Porter);   see Occurrence                                                                                                                , B               LACK 'S   LAW   DICTIONARY   (11th ed. 2019) ("An accident,                                                                                                                                                                                                                           

event, or continuing condition that results in personal injury or property damage that is                                                                                                                                                                                                                                                                                                                          

neither expected nor intended from the standpoint of an insured party.").                                                                                                                                                                                                                                                                                                                                          And we relied                                    

on those passing mentions of "occurrence" in                                                                                                                                                                                                               L.D.G., 211 P.3d at 1135.                                                                                                                         But for reasons                              

explained above we do not think "occurrence" should be read so broadly as to include                                                                                                                                                                                                                                                                                                                                                        

 separate injuries suffered by separate victims.                                                                                                                                                                

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