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Blanas v. Dept. of Natural Resources (7/23/93), 856 P 2d 766
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Notice: This is subject to formal
correction before publication in the Pacific
Reporter. Readers are requested to bring
typographical or other formal errors to the
attention of the Clerk of the Appellate
Courts, 303 K Street, Anchorage, Alaska
99501, in order that corrections may be made
prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
STATE OF ALASKA, DEPARTMENT OF)
NATURAL RESOURCES, )
) Supreme Court File Nos.
Appellant/ ) S-4915/S-4940
Cross-Appellee, ) Superior Court File No.
) 3AN-88-10686 Civil
v. )
)
TRANSAMERICA PREMIER INSURANCE)
COMPANY; HARALAMBOS BLANAS, )
a/k/a HARRY BLANAS; THE DELTA )
GREELY ARTS COUNCIL; and )
STATE OF ALASKA, DEPARTMENT )
OF ADMINISTRATION, )
)
Appellees/ )
Cross-Appellants. )
______________________________)
)
HARALAMBOS BLANAS a/k/a HARRY ) Supreme Court File No. S-4992
BLANAS, ) Superior Court File No.
) 3AN-90-1702 Civil
Appellant, )
) O P I N I O N
v. )
)
STATE OF ALASKA, DEPARTMENT )
OF NATURAL RESOURCES; STATE )
OF ALASKA, DEPARTMENT OF )
ADMINISTRATION; DELTA-GREELY ) [No. 3979 - July 23, 1993]
ARTS COUNCIL; TRANSAMERICA )
PREMIER INSURANCE COMPANY, )
)
Appellees. )
______________________________)
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage, Dana Fabe, Judge.
Appearances: S-4915/S-4940 Virginia A.
Rusch, Assistant Attorney General, Anchorage,
and Charles E. Cole, Attorney General,
Juneau, for Appellant/Cross-Appellee. David
R. Trachtenberg and Traeger Machetanz, Oles,
Morrison & Rinker, Seattle, Washington, for
Appellee/Cross-Appellant Transamerica Premier
Insurance Company. S-4992 Haralambos Blanas,
Anchorage, Pro Per. Virginia A. Rusch,
Assistant Attorney General, Anchorage, and
Charles E. Cole, Attorney General, Juneau,
for Appellee State of Alaska, Department of
Natural Resources.
Before: Moore, Chief Justice,
Rabinowitz, Burke, Matthews, and Compton,
Justices.
MOORE, Chief Justice.
I. INTRODUCTION
This appeal consolidates three actions arising from the
construction of an arts education facility at Big Delta State
Historical Park, near Delta Junction. Transamerica Premier
Insurance Co. (Transamerica), the surety for contractor
Haralambos Blanas, claims that erroneous plans and specifications
caused Blanas to incur so many extra costs completing the project
that his business collapsed. In original actions before the
superior court, Transamerica sought tort damages from the state
for business destruction, and Blanas sought damages for related
personal losses. The superior court awarded the state summary
judgment in both actions, but held that Transamerica could pursue
a contract claim for consequential damages in the administrative
forum. We affirm.
II. FACTS
Planning for this project began when the Delta-Greely
Arts Council proposed building a performing arts center in Big
Delta State Historical Park, on the site of an old Alaska Road
Commission garage. The council obtained state grant proceeds for
the initial design work, and contracted with architect Samuel D.
Combs to prepare the building plans and specifications.
Because the project would be located at a state
historic site and on state land, the Division of Parks insisted
that any new structure appear as the original Road Commission
garage did. In order to ensure that the facility's location,
dimensions, and building materials were historically accurate,
the Division reviewed the project plans and directed Combs to
make numerous changes. Complaining that he lacked the time to
incorporate a number of last-minute changes into the final plans
themselves, Combs instead attached these changes to the plans as
addenda. Combs also refused to incorporate subsequent changes,
arguing that the state should pay him the cost of making them.
In 1985 the Division of Parks made an agreement with
the Delta-Greely Arts Council, under which the Division would put
the project out for bid, "[a]dminister and manage the
construction of the Project," and "[p]erform project
inspections." The Division of Parks told the council that
budgeted management expenses included costs for "continuous on-
site monitoring by our engineering assistant."
Meanwhile, because insufficient funds were available
for completing the whole project, the Division broke it down into
four construction phases, which would complete the facility's
exterior shell and basic mechanical systems but leave its
interior essentially unfinished. Daryl Haggstrom, the project
manager and a civil engineer, and Robert Mitchell, the project
engineer, reviewed Combs's plans and specifications in order to
determine what jobs could be done at each phase, and attached
addenda to clarify any errors or inconsistencies discovered in
the process. During the review process, the Division made no
substantive changes in the plans or specifications without first
getting the approval of Combs or an outside engineer.
At the time of the review, a deadline for putting the
project out to bid was fast approaching, and funding for the
facility would lapse if the Division failed to meet the deadline.
Therefore, the plan review was a hurried one. Because of the
time constraints involved, the Division did not do a full review
of the plans for consistency.
In April 1986 the Division of Parks put the project out
to bid, allocating $215,000 for performance of as many phases of
the contract as possible. Blanas offered the lowest bid,
$211,700 for all four phases, and signed a contract with the
Division of Parks.
During the course of construction, a number of problems
arose as a result of errors and discrepancies in the plans and
specifications, and the Division had to issue extra work orders
and change orders to correct these mistakes. At first, the
Division of Parks kept an inspector on the work site, but in
order to offset budget overruns incurred while preparing the
plans for bid, the Division later removed him. The Division of
Parks handled most of the subsequent problems over the telephone,
and communication problems between the Division and Blanas arose.
In September Blanas informed the Division of his intent
to file a claim for the extra costs incurred as a result of plan
defects. In November the Division sent Blanas its calculations
of the compensation it owed for the remaining extra work orders
and change orders associated with the project. Blanas rejected
all of these calculations, as well as the calculations for three
change orders issued earlier.
III. SUMMARY OF PROCEEDINGS BELOW
In February 1987, pursuant to AS 44.77.010(a),1 Blanas
submitted a claim to the state for $156,588.69 in extra costs.
On May 8, 1987, the Department of Natural Resources issued its
claims decision, awarding Blanas $16,516.97 for extra costs.
In late June Blanas appealed this decision to the
Department of Administration, pursuant to AS 44.77.020(a).2 In
addition to his claim for extra costs, Blanas sought up to
$242,000 in consequential damages, arguing that the debts that he
incurred on the project destroyed his business. The Department
of Administration held a hearing on Blanas's claims in July.
Blanas originally refused to present evidence as to the damages
for business destruction, arguing that the state's tortious
conduct, rather than a breach of contract, caused the harm.
However, at the end of the proceedings Blanas requested the
chance to present this evidence, and the hearing officer set a
second hearing for October.
A week before the second hearing, Blanas moved for a
stay of the proceeding, because he wished to assert his business
destruction claims in the superior court and "seek a
determination . . . regarding the necessity of any further
proceedings on such claims at the administrative level." Blanas
added that he was not moving "for any stay or other delay in the
determination of those claims which have been presented and
argued to the Hearing Officer." The state agreed to the stay,
and the hearing officer granted it on October 25.
A few days later, Blanas assigned all of the claims of
his contracting firm to Transamerica, his surety, and on that
same day, Transamerica filed an original action in superior
court, seeking tort damages for the destruction of Blanas's
business. Also included in the complaint was a request for a
declaratory judgment as to whether the business destruction
claims must be brought through an administrative proceeding. The
state moved for summary judgment on these claims.
In January the Department of Administration decided the
remaining extra cost claims. The hearing officer increased
Blanas's extra cost award to $30,208.95. In addition, he
expressly stated that he had postponed any evidentiary hearing,
discovery, or findings on the consequential damages claim
"pending receipt of instructions from the Superior Court."
On March 1, 1990, Blanas filed a complaint against the
state, seeking damages for the losses that he and his wife
personally incurred because of the collapse of his business. In
particular, he sought damages for loss of business, loss of
personal assets, and emotional distress. The state moved to
dismiss the complaint under Alaska Civil Rule 12(b)(6),3 arguing,
among other things, that the Blanases had filed the complaint
after the statute of limitations had run.
In July 1991 Judge Dana Fabe decided the state's
motions. Judge Fabe granted the state summary judgment on
Transamerica's tort claims, but permitted Transamerica to return
to the administrative hearing for a determination of any contract
claim for consequential damages. Judge Fabe also dismissed
Blanas's complaint for personal damages, ruling, among other
things, that Blanas's allegations were in tort, that the two-year
statute of limitations for torts therefore applied, see AS
09.10.070, and that Blanas had filed his complaint after the
limitations period had run.
Transamerica and the state moved for reconsideration
and clarification. In particular, the state asked Judge Fabe to
reconsider her return of Transamerica's damage claims to the
administrative forum, and to bar litigation of those claims in
the administrative hearing. Judge Fabe denied the state's
request.
Blanas also moved for reconsideration, arguing, inter
alia, that his claims were in contract, not tort. For the first
time, he also invoked an equitable estoppel argument, alleging
that the Division of Parks induced him into not filing a suit
within the limitations period. Judge Fabe denied Blanas's
motion.
All three parties appeal. The state appeals Judge
Fabe's remand of the consequential damage claims to the
administrative hearing. Transamerica cross-appeals Judge Fabe's
grant of summary judgment to the state on the tort claims.
Blanas appeals the dismissal of his personal damage claims.
These appeals have been consolidated for review.
IV. DISCUSSION
A. The Nature of the Duty Owed to Blanas
Transamerica contends that its tort claims for business
destruction are proper, on the grounds that "the state owed
Blanas a duty of care to ensure that neither the preparation of
the plans and specifications nor the administration of the
project contract were negligently performed,"and that the state
breached this duty.4 Transamerica argues that though the state
was the owner of the building site, the review of Combs's designs
by the Division of Parks made the state a design professional as
well.
A design professional has a duty in tort "to exercise
reasonable care, or the ordinary skill of the profession, for the
protection of anyone lawfully upon the premises whose injury is
reasonably foreseeable as the result of negligent design, plans,
orders, or directions." Moloso v. State, 644 P.2d 205, 217
(Alaska 1982). Thus a design professional owes a duty of care
not to injure an independent contractor's employees through the
negligent provision of services. See id. Furthermore, a project
owner may sue a design professional in tort for economic losses
arising from the professional's malpractice, despite the
existence of a contractual relationship between the parties. See
Clark v. City of Seward, 659 P.2d 1227, 1231 n.3 (Alaska 1983).
A tort action is available in such cases because the duty of
professional care is one that the law imposes, not the contract.
Id.
Unlike design professionals, project owners owe purely
contractual duties as to the accuracy of designs. When providing
plans and specifications to a contractor, an owner makes an
implied warranty that they will be sufficient for their
particular purpose. Fairbanks N. Star Borough v. Kandik Constr.,
Inc. & Assocs., 795 P.2d 793, 797 (Alaska 1990), vacated in part
on other grounds, 823 P.2d 632 (Alaska 1991). If defective
specifications cause the contractor to incur extra costs in
performing the contract, then the contractor may recover those
costs that result from breach of the implied warranty. Id. The
implied warranty is part of the bargain between the owner and the
independent contractor, and does not exist outside the contract.
Because this duty arises solely from a contractual promise, a
party cannot use a tort action to enforce it. See Alaska Pac.
Assurance Co. v. Collins, 794 P.2d 936, 946 (Alaska 1990).
Transamerica relies on two doctrines to argue that the
Division was more than a project owner. First, Transamerica
cites Moloso's application of the retained control theory of
liability. If an employer hires an independent contractor, but
"retains the right to direct the manner of the independent
contractor's performance, or assumes affirmative duties with
respect to safety,"then the employer is liable for its negligent
exercise of control, whenever such tortious acts cause physical
harm to the independent contractor's employees. 644 P.2d at 211.
Second, Transamerica relies on the tort theory of a voluntary
undertaking or an assumption of duty. A party that assumes a
duty through its own affirmative conduct must discharge that duty
with due care. Id. at 212; Adams v. State, 555 P.2d 235, 240
(Alaska 1976). Transamerica argues that the Division incurred
tort liability under either doctrine by affirmatively undertaking
a review of the plans and initially assigning an on-site
inspector to the project.
Transamerica is mistaken. As Judge Fabe properly
concluded, Moloso is inapplicable, because in that case the plans
and specifications that the employer used were its own, and thus
the employer was in fact both the owner and the architect of the
project. 644 P.2d at 216. Here, the Division of Parks did not
devise its own plans and specifications, but rather used those of
an independent architect, Samuel Combs. The Division did not
assume a design professional's duties simply because it reviewed
the plans before putting them out for bid or because it assigned
an inspector to the construction site.5 Through such acts an
owner insures that the plans are suitable both for its own
purposes and for the purposes of the contractor, and that the
plans thus satisfy the warranty of sufficiency implied in the
owner-contractor bargain.
The contract between the Division of Parks and Blanas,
like most construction contracts, allowed for unanticipated
deviations from the plans and specifications. The contract terms
allowed the Division to issue orders for changes and extra work
as needed. The contract also allocated unexpected losses by
defining which of the contractor's extra costs the Division would
compensate and how the Division would compensate them. In the
event of a dispute over costs, the parties could obtain
administrative review pursuant to AS 44.77.
To expose an owner to liability as a design
professional might negate the ability of contracting parties to
allocate and bargain for risk of loss in commercial transactions.
Oldenburg v. Hagemann, 512 N.E.2d 718, 723 (Ill. App. 1987),
appeal denied, 520 N.E.2d 387 (Ill. 1988). Therefore, even if
the owner negligently provides defective plans and
specifications, which cause economic loss to the contractor in
the course of performance, the contractor's action for the
owner's breach is in contract, not tort. See Collins, 794 P.2d
at 946 ("We decline to hold that where a party breaches a
contractual promise _negligently,_ such conduct may form the
basis for a tort action."); see also Scott Co. v. MK-Ferguson
Co., 832 P.2d 1000 (Colo. App. 1991) (denying subcontractor a
tort action for negligence against general contractor who
supplied defective plans and specifications); Oldenburg, 512
N.E.2d at 721, 722 (denying subcontractor a tort action against
general contractor who, among other things, allegedly did not
inspect subcontractor's work).
In this case, Judge Fabe correctly concluded that
Samuel Combs, not the Division of Parks, was the project
architect, and that the Division assumed no duty to review
Combs's plans for accuracy. The record indicates that the sole
purpose for the state's review of the plans was to check for
historical accuracy and to divide the plan into four phases for
construction. Though it clarified any errors it happened to
notice during its review, the Division of Parks did not
substantively change Combs's plans and specifications without
consulting Combs or an outside engineer, and Transamerica does
not allege that the Division did otherwise. Therefore,
Transamerica's tort claims for professional negligence must fail.
B. The Tort Claim for Bad Faith Breach of Contract
In the alternative, Transamerica contends that the
state systematically denied all of Blanas's extra cost claims,
regardless of their merit, in a calculated effort to wear Blanas
down through expensive litigation. Transamerica looks primarily
to a Division of Parks' administrative brief, which notes the
high cost to Blanas of pursuing his claims past a Department of
Administration hearing. In addition, the state required Blanas
to break down his claim item by item for administrative review.
Transamerica argues that this "war of attrition" amounts to a
tortious breach of the implied warranty of good faith and fair
dealing.
As a matter of law, a covenant of good faith and fair
dealing is an implied component of any contract. Alaska Pac.
Assurance Co. v. Collins, 794 P.2d 936, 947 (Alaska 1990).
Breach of this covenant in an at-will employment contract does
not constitute a tort. ARCO Alaska, Inc. v. Akers, 753 P.2d
1150, 1153 (Alaska 1989). However, when the contract is an
insurance contract, we have allowed an insured to maintain a tort
action against an insurer for breach of the covenant. State Farm
Fire & Casualty Co. v. Nicholson, 777 P.2d 1152, 1156 (Alaska
1989). Transamerica contends that Nicholson, rather than Akers,
governs the relationship between Blanas and the Division of
Parks.
We disagree. Nicholson did not "turn[] every breach of
a commercial contract into a tort cause of action." 777 P.2d at
1156-57. Instead, Nicholson recognized the special relationship
between insurer and insured: the use of standardized contract
terms, the insurer's superior bargaining position over the
insured, and the fact that the insured seeks protection against
calamity, rather than commercial advantage. These exceptional
features of the insurance contract justified the creation of a
tort action for an insurer's bad faith breach. See id.
In the case of an ordinary commercial contract between
sophisticated business entities, a tort for breach arises only
when "a party's conduct . . . rises to the level of a
traditionally recognized tort." Akers, 753 P.2d at 1154.
Creating a broader tort remedy would disrupt the certainty of
commercial transactions and allow parties to escape contractual
allocation of losses. Therefore, an action for breach of the
implied covenant of good faith and fair dealing sounds in
contract alone.6 Id.; Great Western Sav. Bank v. George W.
Easley Co., 778 P.2d 569, 581 (Alaska 1989).
Here, Blanas entered into an arm's length construction
contract for the purpose of commercial gain, and submitted claims
for extra costs incurred in performance. The belief of the
Division of Parks that a suit in superior court would be costly
to Blanas does not prove a premeditated scheme to reject all of
Blanas's cost claims in bad faith. Similarly, the fact that
Blanas had to break down his claim item by item does not indicate
bad faith, because we do not allow use of the "total cost"method
in calculating claims. See Kandik Constr., 795 P.2d at 798-99.
However, even if Blanas raised a genuine factual issue as to
whether the state violated the good faith covenant, his remedy
would still be in contract, not tort. On this question, we
affirm Judge Fabe's grant of summary judgment to the state.7
C. The Remand of the Consequential Damages Claim to
the Administrative Hearing
In its appeal of the superior court decision, the state
argues that Judge Fabe erred when she ruled that Transamerica
could bring its consequential damages claim in the administrative
hearing.8 This contention has no merit whatsoever and borders on
being frivolous.
Characterizing Judge Fabe's decision as "a remand to
the administrative forum,"the state first argues that because
the superior court was not engaging in the appellate review of an
administrative action,9 Judge Fabe effectively preempted the
power of the hearing officer. This argument is plainly
untenable. Judge Fabe did not direct the hearing officer to do
anything, but rather held that the administrative forum was the
proper one for Transamerica's claims. In any case, as
Transamerica correctly notes, the hearing officer's decision on
Blanas's extra cost claims expressly put off any determination of
the consequential damage claims until the officer received
instructions from the superior court.
Second, even though Transamerica's complaint sought a
declaratory judgment as to which forum was proper for the
consequential damages claims, the state argues that Alaska Civil
Rules 57(a), 7(b), and 77 require Transamerica to file a motion
for such relief. This argument is baseless. Nothing in the
Civil Rules says that Transamerica must file a motion to seek a
declaratory judgment. Seeking a declaratory judgment in the
pleadings is perfectly proper. See, e.g., American Building &
Loan Ass'n, Inc. v. State, 376 P.2d 370, 372 (Alaska 1962). The
absence of a motion for a declaratory judgment does not prevent
the state from making its own motions and arguments for dismissal
or summary judgment on the matter.
The state also contends that Transamerica's failure to
act promptly on its declaratory judgment complaint violated the
conditions of the hearing officer's stay. This argument is
equally baseless. The hearing officer did not condition his
grant of the stay on speedy resolution of the issue. If it
wished swift resolution of the proceedings, the state could have
moved to vacate the stay.
The state's final argument is that because Transamerica
argued that its claims before the superior court were in tort,
Judge Fabe had no contract claims to "remand." This contention
makes no sense. Because parties must raise all contract claims
in the administrative hearing process before seeking relief in
the superior court, see AS 44.77; State v. ZIA, Inc., 556 P.2d
1257, 1262-63 (Alaska 1976), the only way for Transamerica to
succeed in raising an original action would be to recast the
business destruction claim as a tort action. As Judge Fabe
correctly notes, "Transamerica should not be prejudiced by its
decision to first pursue tort theories in Superior Court."
D. Blanas's Claim for Personal Damages
The final issue in this appeal is whether Judge Fabe
erred in applying the two-year statute of limitations for tort
claims to Blanas's suit for personal damages.10 Blanas offers two
arguments related to this matter. First, Blanas argues that
equitable estoppel should block the running of the limitations
period, see Groseth v. Ness, 421 P.2d 624, 630 (Alaska 1966),
because the state lulled him into not filing his tort claims.
Second, Blanas argues that his claims arise from contract, not
tort.
Blanas's equitable estoppel claim cannot survive,
because his evidence raises no genuine issue of fact.11 Part of
the evidence for this claim is a post trial affidavit. Because
an appellate brief can neither append nor refer to evidence
outside the record, this affidavit must be struck. L.L.M. v.
P.M., 745 P.2d 599, 600 (Alaska 1987); see also Alaska R. App. P.
210. Blanas's other evidence is a memorandum dated October 31,
1986, which discussed the state's intent to resolve Blanas's
claims through change orders or extra work orders and to resort
to administrative review, judicial process, or arbitration if
Blanas remained dissatisfied. This document offers no indication
that the state lulled Blanas into not filing claims.
Furthermore, as the state notes, Blanas was on notice
that the Department of Natural Resources had rejected most of his
claims as of May 8, 1987, when the agency issued its claims
decision. Yet Blanas did not file an action until March 1, 1990,
almost three years after the decision.
Next, Blanas argues that the statute of limitations for
tort claims does not apply because he has raised claims in
contract, and that the six-year statute of limitations therefore
applies.12 As Judge Fabe correctly noted in her order on
reconsideration, if Blanas's arguments were in contract, then he
should have raised them in the administrative hearing, not in an
original action before the superior court.13 See AS 44.77; State
v. ZIA, Inc., 556 P.2d 1257, 1262-63 (Alaska 1976).
Because we affirm Judge Fabe's dismissal of Blanas's
complaint as untimely, we need not address Blanas's other
arguments.
V. CONCLUSION
Transamerica's claims for consequential damages lie in
contract, not tort. The Division of Parks did not assume the
duties of a design professional through its review of the project
plans and specifications or its assignment of an on-site
inspector. Moreover, Transamerica cannot state a tort claim for
violation of the implied covenant of good faith and fair dealing.
Therefore we affirm the superior court's grant of summary
judgment dismissing Transamerica's tort claims.
Because Blanas filed his personal action after the two-
year statute of limitations had run, his suit must also be
dismissed. Blanas has not shown that the state should be
equitably estopped from asserting a statute of limitations
defense.
AFFIRMED.
_______________________________
1. AS 44.77.010(a) states, in part:
[E]very claim for reimbursement for money expended, or
for compensation for labor, materials, or supplies
furnished, or services given to or for the state,
whether based on a contract or on a ratification, shall
be promptly presented to the appropriate administrative
or executive officer for approval and payment.
2. AS 44.77.020(a) states, in part:
If the administrative or executive officer disallows
all or part of the claim, the claimant may obtain a
review of the officer's action by applying within 60
days to the Department of Administration . . . .
3. According to Alaska Civil Rule 12(b)(6), "[T]he
following defenses may at the option of the pleader be made by
motion: . . . (6) failure to state a claim upon which relief can
be granted."
4. Transamerica cites several cases from other
jurisdictions that allow contractors to bring malpractice claims
against design professionals. These cases make an architect or
engineer liable in tort to a contractor for professional
negligence, even if the harm caused is purely economic, where the
design professional and the contractor have no contractual
relationship and thus no privity. See, e.g., Donnelly Constr.
Co. v. Oberg/Hunt/Gilleland, 677 P.2d 1292, 1295-96 (Ariz. 1984).
See generally Frank D. Wagner, Annotation, Tort Liability of
Project Architect for Economic Damages Suffered by Contractor, 65
A.L.R.3d 249 (1975). This case law is not on point, because
Blanas signed a construction contract with the Division of Parks
and thus was in contractual privity with the state.
5. Whether owners who review the plans of independent
design professionals act as design professionals themselves is a
question of law. We consider all questions of law de novo, and
will adopt the rule of law that is most persuasive in light of
precedent, reason, and policy. Ford v. Municipality of
Anchorage, 813 P.2d 654, 655 (Alaska 1991).
6. Transamerica also relies on a California case, Seaman's
Direct Buying Serv., Inc. v. Standard Oil Co., 686 P.2d 1158,
1167 (Cal. 1984). The Seaman's court allowed a tort action
against a party who first breached a commercial contract and then
litigated the question of the contract's existence, even though
the party knew that it had no defenses. Id. at 1167. We have
not recognized a Seaman's tort in Alaska, and we decline to do so
now.
7. Transamerica argues that even if Akers applies, a tort
remedy for bad faith breach is still available, because by
failing to tell Blanas that no money was available to pay his
extra cost claims, the Division of Parks committed the tort of
nondisclosure, a traditionally recognized tort for purposes of
the Akers rule. Although we recognize a cause of action in tort
for "failure to disclose information when there is an affirmative
duty to do so,"Turnbull v. LaRose, 702 P.2d 1331, 1334 (Alaska
1985), Transamerica has not demonstrated that the Division had
such a duty. Transamerica's evidence regarding the availability
of funds pertains to Blanas's extra cost claims, not to any sums
that the state had already promised to pay. Transamerica offers
no evidence that the Division promised to pay any amount that
Blanas deemed appropriate for extra work. In fact, from the
start the state disputed the validity of many of Blanas's claims.
Transamerica's nondisclosure claims before Judge Fabe
were based solely on the state's failure to disclose errors in
the plans and specifications. Because Transamerica presents its
current nondisclosure argument for the first time on appeal, and
did not raise the same argument before the superior court, we
need not address this claim. See Borrego v. State, Dep't of Pub.
Safety, 815 P.2d 360, 366 & n.13 (Alaska 1991).
8. In 1990, Transamerica amended its complaint to add an
indemnity claim that Samuel Combs had assigned to the company.
On reconsideration, Judge Fabe allowed Transamerica to raise this
claim in the administrative forum. Though the state objected at
the trial court level to this treatment of the indemnity claim,
the arguments in the state's briefs neither discuss nor dispute
Judge Fabe's decision. The state therefore has waived this
issue. See Petersen v. Mutual Life Ins. Co., 803 P.2d 406, 411 &
n.8 (Alaska 1990).
9. According to AS 22.10.020(d), "[t]he superior court has
jurisdiction in all matters appealed to it from a[n] . . .
administrative agency when appeal is provided by law."
10. Under AS 09.10.070, "[n]o person may bring an action (1)
for libel, slander, assault, battery, seduction, false
imprisonment, or for any injury to the person or rights of
another not arising on contract and not specifically provided
otherwise . . . unless commenced within two years."
11. If the trial court considers materials outside the
pleadings when deciding a motion to dismiss under Alaska Civil
Rule 12, then the court must treat the motion as one for summary
judgment. Reed v. Municipality of Anchorage, 741 P.2d 1181, 1184
(Alaska 1987). Judge Fabe treated the state's motion to dismiss
Blanas's claim as one for summary judgment. Therefore, we must
determine "whether there is a genuine issue of material fact and
whether the moving party is entitled to judgment on the law
applicable to the established facts." Sea Lion Corp. v. Air
Logistics of Alaska, 787 P.2d 109, 116 (Alaska 1990). From the
materials presented, we make all reasonable inferences of fact in
favor of the nonmoving party. Id.
12. According to AS 09.10.050, "[n]o person may bring an
action (1) upon a contract or liability, express or implied . . .
unless commenced within six years."
Blanas also argues that AS 12.10.020 gives him a three-
year limitations period in which to make his claim. As the state
correctly notes, AS 12.10.020 governs criminal fraud actions, not
civil ones, and is inapplicable here. At any rate, Blanas raised
this issue for the first time on appeal, and therefore this court
should not consider it. State v. Northwestern Constr., Inc., 741
P.2d 235, 239 (Alaska 1987).
13. At oral argument, Blanas also claimed that under
Alaska's "discovery rule,"the statute of limitations did not
start to run until he learned of the state's tortious activity.
See Lee Houston & Assocs., Ltd. v. Racine, 806 P.2d 848, 851
(Alaska 1991). Though he raised this issue before Judge Fabe and
in his points on appeal, Blanas gives it only cursory treatment
in his appellate briefs. Therefore, we shall treat this claim as
abandoned. See Gates v. City of Tenakee Springs, 822 P.2d 455,
460 (Alaska 1991). Furthermore, Judge Fabe properly concluded
that "[b]ecause the Blanases knew of their business losses by
June 1987 and had been pursuing remedies for faulty plans, . . .
a reasonable person would have been on notice of the
misrepresentation and fraud claims by June, 1987."
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