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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Alaina Adkins & Maxim Healthcare Services, Inc. v Jesse Michael Collens (7/12/2019) sp-7386

Alaina Adkins & Maxim Healthcare Services, Inc. v Jesse Michael Collens (7/12/2019) sp-7386

           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  

                                                                                                                            

           corrections@akcourts.us.  



                       THE SUPREME COURT OF THE STATE OF ALASKA                                        



ALAINA  ADKINS  and  MAXIM                                        )  

HEALTHCARE  SERVICES,  INC.,                                      )    Supreme  Court  No.  S-16930  

                                                                  )  

                                 Appellants,                                                                                       

                                                                  )    Superior Court No. 3AN-14-05961 CI  

                                                                  )  

           v.                                                                               

                                                                  )    O P I N I O N  

                                                                  )  

                                                                                                         

                                 

JESSE MICHAEL COLLENS,                                            )    No. 7386 - July 12, 2019  

                                                                  )  

                                 Appellee.                        )  

                                                                  )  



                                                                                                               

                                                  

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

                                                                                                     

                      Judicial District, Anchorage, Frank A. Pfiffner, Judge.  



                                                                                                                  

                      Appearances:   Gregory S. Fisher, Nicholas I. Bajwa, and  

                                                                                                      

                      Kristal L. Leonard, Davis Wright Tremaine LLP, Anchorage,  

                                                                                                              

                      for  Appellants.              Susan  Orlansky,  Reeves  Amodio  LLC;  

                                                                                                     

                      Jeffrey M. Feldman, Summit Law Group; and Michael T.  

                                                                                                                   

                      Stehle, Law Office of Michael Stehle, PC, Anchorage, for  

                                                                                                                    

                      Appellee. Roger F. Holmes, Biss & Holmes, Anchorage, for  

                                                                                                                      

                      Amicus Curiae Alaska State Medical Association.  John J.  

                                                                                                                   

                      Tiemessen,   Clapp,   Peterson,   Tiemessen,   Thorsness   &  

                                                                                                            

                      Johnson,  Fairbanks,  for  Amicus  Curiae  Alaska  Dental  

                      Society.  



                                                                                                         

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

                                            

                      and Carney, Justices.  



                                                   

                      BOLGER, Chief Justice.  


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

I.        INTRODUCTION  



                    Maxim Healthcare Services and its Alaska office manager, Alaina Adkins,  

                                                                                                                        



made  misrepresentations  while  discharging  Jesse  Collens  from  Maxim's  care,  in  

                                                                                                                                



violation of the company's own policies and procedures.  Collens sued them for breach  

                                                                                                                          



of contract, fraudulent misrepresentation, unfair and deceptive acts and practices under  

                                                                                                                           

Alaska's Unfair Trade Practices and Consumer Protection Act (UTPA),1 and intentional  

                                                                                                                    



infliction of emotional distress (IIED).  The superior court ruled for Collens on all his  

                                                                                                                               



claims  and  entered  a  $20,379,727.96  judgment  against  Adkins  and  Maxim,  which  

                                                                                                                          



included attorney's fees. Maxim and Adkins now appeal, arguing that (1) they were not  

                                                                                                                               



liable under the UTPA; (2) the superior court erred in precluding their expert witnesses  

                                                                                                                     



from testifying at trial; (3) the court's damages award was excessive; and (4) the court's  

                                                                                                                         



attorney's fee award was unreasonable. We agree that the superior court's attorney's fee  

                                                                                                                               



award was unreasonable, but on all other issues we affirm the superior court's decision.  

                                                                                                                      



II.       FACTS AND PROCEEDINGS  

                                  



                    In May 2009 Jesse Collens, then 21 years old, was permanently injured in  

                                                                                                                                 



a bicycle accident that left him a C-1 quadriplegic, paralyzed from the neck down, and  

                                                                                                                              



dependent on a ventilator to breathe. Collens was living in Anchorage when the accident  

                                                                                                                       



occurred, and he chose to remain there after recuperating to be near friends and family.  

                                                                                                                                     



                    Because long-term care facilities in Anchorage are not prepared to serve a  

                                                                                                                                  



ventilator-dependent individual such as Collens, he sought in-home care.  In December  

                                                                                                                    



2009  he  contracted  with  Maxim,  a  national  healthcare  corporation  with  a  home  

                                                                                                                          



healthcare division, to provide his nursing care.  At the time Collens had a prescription  

                                                                                                                  



for in-home nursing care that was refillable for life.  Maxim was licensed as a home  

                                                                                                                           



health agency in Alaska at all relevant times.  

                                                                      



          1         The UTPA is codified at AS 45.50.471-.561.  

                                                                 



                                                               -2-                                                             7386  


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

                                                                                                                   

                    In late 2011 issues arose between Collens and Maxim over the company's  



                                                                                                               

management of his care.   These issues escalated, and in early March 2012, Alaina  



                                                                                                                      

Adkins, Maxim's Alaska office manager, met with Collens to discuss his main concerns  



                                     

with Maxim's services.  



                                                                                                                      

                    The following business day, Adkins emailed various members of Maxim's  



                                                                                                                        

legal and  administrative staff about  one  of  the issues Collens had  raised.                                        Internal  



                                                                                                                                     

concerns  surfaced  about  the  legal  compliance  of  the  staff  working  with  Collens.  



                                                                                                                            

Maxim's Compliance Department produced a report on March 21 that suggested some  



                                                                                                                   

issues with how Collens's nurses were supplying him insulin as well as other scheduling  



                                                                                                                             

and dosage discrepancies.   In an email responding to the report, Maxim's area vice  



                                                                                                                             

president wrote, "We are in dangerous territory right now with the liability of this case  



                                                                                          

and we are going to have to seriously consider discharge."  



                                                                                                                           

                    Collens's contract with Maxim included a form that told him of his rights  



                                                                                                                

as a patient.  In this document Maxim affirmed that Collens had the right to:  



                                                                                                            

                    Know that the home health plan of care/treatment will be  

                                                                                                         

                    developed   by   the   physician,   in   cooperation   with   the  

                                                                                                   

                    appropriate Maxim professional staff member, and with the  

                                                                                    

                    patient and family to the extent possible.  



                                                                            

The document also affirmed that Collens had the right:  



                                                                           

                    Not to be transferred or discharged unless:  



                                                                                                                 

                              a.	       Theindividual'smedicalneeds requiretransfer;  



                                                                                                            

                              b.	       The individual's health  and  safety  or  that of  

                                                                                                             

                                        another personrequires transfer or discharge;or  



                                                                                                      

                              c.	       The individual fails to pay for services, except  

                                                                                                           

                                        as such transfer or discharge is prohibited by  

                                                 

                                        law.  



                                                               -3-	                                                        7386
  


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

                                                d.	             The individual does not meet any criteria for                                                           

                                                                continued service set forth by Maxim, federal,                                               

                                                                state, or local statute or regulation.                                              



                                In accordance with state regulations, Maxim had adopted policies and                                                                                                 

                                                                                                                                                           2     Those policies and  

procedures to govern its provision of home healthcare services.                                                                                                                                       



procedures stated that a patient could not be discharged from Maxim's home healthcare  

                                                                                                                                                                                       



program without a physician's order.  

                                                                                           



                                Collens's care plan was subject to routine recertification every 60 days.  

                                                                                                                                                                                                                 



Maxim's Alaska Director of Clinical Services visited Collens's house to complete the  

                                                                                                                                                                                                       



review necessary for this recertification on March 23. Three days later she submitted the  

                                                                                                                                                                                                        



recertification paperwork, noting that "discharge is not warranted."  

                                                                                                                                                                   



                                Thatsameday Adkins requestedthatMaxim'slegaldepartmentprovideher  

                                                                                                                                                                                                        



a draft discharge letter for Collens.  This draft letter stated that the discharge had been  

                 



discussed with Collens's physician and care coordinator and that they agreed with the  

                                                                                                                                                                                                       

discharge decision.  But in fact neither approved the discharge.3                                                                                              The draft discharge  

                                                                                                                                                                                        



letter also included a space for names of other entities that could provide the care needed  

                                                                                                                                                                                              



by the patient. Although Adkins emailed the legal department saying, "Wealready know  

                                                                                                                                                                                                  



that there are no providers in our area that provide this type of service," the discharge  

                                                                                                                                                                                        



letter she eventually delivered to Collens filled in the blank with four agency names.  

                                                                                                                                                                                                                 



Adkins delivered and read aloud the discharge letter at Collens's home on March 30.  

                                                                                                                                                                                                             



                2               See  7 Alaska Administrative Code (AAC) 12.507(b)(3) (2015) (requiring                                                                                 



home health agencies to adopt written policies and procedures).                                                                                           



                3               Maxim  spoke  with  Collens's  care  coordinator  prior  to  delivering  the  

                                                                                                                                                                                                      

discharge letter but did not speak to his physician.  Both sent letters to Maxim several  

                                                                                                                                                                                              

days after Collens's discharge disagreeing with the decision.  

                                                                                                                                                   



                                                                                                    -4-	                                                                                           7386
  


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

                       Collens filed suit against Maxim in early 2014, alleging breach of contract                                    



                                                           4  

and fraudulent misrepresentation.                                                                                                         

                                                               Maxim moved for summary judgment on these  



                                                                                                                                      

claims. Collens opposed and cross-moved for partial summary judgment on the contract  



                                                                                                                       

claim.  In the memorandum supporting that motion, Collens asserted claims under the  



                                                                                                                                                

UTPA for the first time.  The superior court denied all motions, finding the existence of  



                                                                                                                                              

disputed facts relevant to the fraud and contract claims.  Its order did not address the  



                          

UTPA claims.  



                                                                                                                                                     

                       During  a  protracted  pretrial  period,  multiple  discovery  disputes  arose.  



                                                                                                                                                 

Among other things, Collens moved to strike Maxim's expert witnesses, arguing that it  



                                                                                                                                      

had not submitted their reports before the relevant deadline.  In April 2017 the superior  



                                                                                                                                            

court granted this motion and precluded Maxim's experts from testifying at trial.  



                                                                                                                                       

                       After a six-day bench trial in June 2017, the superior court ruled for Collens  



                                                                                                                                      

on all counts.  The court awarded him $4,315,007 in damages for his breach of contract  



                                                                                                                                             

claim. This was trebled under the UTPA's damages provision to total $12,945,021. The  



                                                                                                                                     

court also awarded Collens $400,000 in damages for IIED and $500,000 in punitive  



                                                                                                                                       

damages.  The court later awarded Collens $5,676,668.17 in attorney's fees.  Maxim  



appeals.  



III.       DISCUSSION  



                                                                                                                                           

                       Maxim asks us to vacate the superior court's judgment and remand for a  



                                                                                                                                          

new trial on contract and tort damages, with instructions that Maxim was not liable under  



                                                                                                                                              

the UTPA.  It also asks us to vacate the fee award as unreasonable.  We agree that the  



                                                                                                                                              

superior court's attorney's fee award was unreasonable, but in all other respects we  



                                                                                                                                                

affirm the superior court's judgment.  Maxim is liable under the UTPA; its conduct is  



           4  

                                                                                                                                              

                       Maximalso suedAdkins individually. For convenience, wereferto thetwo  

                                              

defendants collectively as "Maxim."  



                                                                       -5-                                                                     7386  


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

clearly subject to sanctions under the Act.                                                                                   The superior court's decision to preclude                                                        



Maxim from presenting expert testimony on damages was not an abuse of discretion.                                                                                                                                                                          



And the court's damages assessment was not excessive.                                                                                                              



                   A.                 Maxim Is Liable Under The UTPA.                                                         



                                      On appeal Maxim makes two main arguments for why the UTPA does not                                                                                                                                       



                                                          5  

apply to its conduct.                                                                                                                                                                                                                     

                                                               First Maxim argues that Collens's UTPA claim was exempt from  



                                                                                                                                                                                                                                                

the  Act's  coverage  because  it  involved  conduct  already  prohibited  by  statute  or  



                               6  

                                                                                                                                                                                                                                                           

regulation.                            We refer to this argument as Maxim's "statutory exemption defense."  



                                                                                                                                                                                                                                

 Second Maxim argues that the conduct at issue was a healthcare, not business, decision  



                                                                                                                              7  

                                                                                                                                                                                                                       

that should be exempt from UTPA liability.                                                                                          We refer to this as Maxim's "healthcare  



                                                                                                                                                                                                                                   

exemption defense."  In response Collens argues that these defenses have been waived  



                                                                                                                                                                                                                                              

as  issues  for  appeal  because  Maxim failed  to  develop  them sufficiently  before  the  



                                                                                                                                                                                                                                         

superior court.  If they are preserved, he contends that neither exempts Maxim from  



                                               

UTPA liability.  



                                                                                                                                                      

                                       1.                Maxim preserved both UTPA defenses.  



                                                                                                                                                                                                                              

                                      Whether a particular claim has been waived is a question of law reviewed  



                   5                  Maxim also briefly argues that Collens failed to prove his claim under                                                                                                                           



AS 45.50.471(b)(12), the particular subsection of the UTPA cited in his trial brief.                                                                                                                                                        But  

the superior court concluded that Maxim was liable under different provisions of the Act                                                                                                                                                      

-  AS 45.50.471(a) and AS 45.50.471(b)(14) - and Maxim does not challenge that                                                                                                                                                               

conclusion.   Thus we do not address Maxim's liability under AS 45.50.471(b)(12).                                                                                                          



                   6                  AS 45.50.481(a)(1) provides that the UTPA does not apply to "an act or  

                                                                                                                                                                                                                                                  

transaction regulated by a statute or regulation administered by the state."  

                                                                                                                                                                                                 



                   7                  The Alaska State Medical Association joined in this argument as amicus  

                                                                                                                                                                                                                           

curiae.  

                     



                                                                                                                        -6-                                                                                                               7386
  


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

               8                                                                                                                   9  

de novo.          Arguments raised for the first time on appeal are generally waived,                                                but those   



                                                                                                                                                  10  

explicitly raised in the trial court may be expanded or refined in appellate argument.                                                                 



Collens contends that Maxim waived the statutory exemption defense by failing to  

                                                                                                                                                 



develop it at trial after mentioning it in summary judgment briefing.   But Collens's  

                                                                                                                                     



complaint did not include an express claim based on the UTPA. And Maxim later raised  

                                                                                                                                           



the defense in objections to Collens's proposed findings of fact and conclusions of law  

                                                                                                                                               



on this claim.  In those objections Maxim cited the statutory exemption and argued that  

                                                                                                                                               



certain statutes and regulations of the nurse licensing board prohibited its disputed  

                                                                                                                                      



conduct.  This was adequate to preserve the defense.  

                                                                             



                       Although  it is a closer  question,  Maxim also  preserved  the healthcare  

                                                                                                                                   



exemption defense. Maxim repeatedly argued that its decision to discharge Collens had  

                                                                                                                                               



nothing to do with the sale or advertisement of goods and services and thus was not  

                                                                                                                                               



covered by the UTPA.   The basic premise behind the healthcare exemption defense  

                                                                                                                    



Maxim asserts on appeal is that the UTPA is intended to apply to a circumscribed set of  

                                                                                                                                                  



commercial transactions, not disputes involving the provision of healthcare.  Since this  

                                                                                                                                               



defense is fairly characterized as an "expansion or refinement" of arguments Maxim  

                                                                                                                                         



made before the superior court, we also consider it preserved for our review.  

                                                                                                                        



            8          Mitchell  v.  Mitchell,  370  P.3d   1070,   1076  (Alaska  2016).  



            9          See   Wells  v.  Barile,  358  P.3d  583,  589  n.17  (Alaska  2015).  



            10         See  Zeman  v.  Lufthansa   German  Airlines ,  699  P.2d   1274, 1280  (Alaska  



 1985)  (stating  that  appellants  "can  expand  or  refine  details  of  an  argument  otherwise  

preserved  on  appeal").  



                                                                        -7-                                                                 7386
  


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

                            2.           Collens's UTPAclaimwas                                    notexemptunderAS45.50.481(a)(1).              



                            Both of Maxim's exemption defenses involve arguments about how to                                                                                 



                                                                                                                                           11  

interpret   the   UTPA.     Reviewing   these   legal   questions   de   novo,                                                                                     

                                                                                                                                                 we  find  neither  



                     

argument persuasive.  



                                                                                                                                                                         

                            Maxim's statutory exemption defense relies on AS 45.50.481(a)(1).  This  



                                                                                                                

subsection provides that the UTPA does not apply to:  



                                                                                                                                 

                            an  act  or  transaction  regulated  by  a  statute  or  regulation  

                                                                                                                                           

                            administered by the state, including a state regulatory board  

                                                                                                                                                

                            or  commission,  unless  the  statute  or  regulation  does  not  

                                                                                                                                                    

                           prohibit the practices declared unlawful in AS 45.50.471.  



                                                                                                                                                                        

Put another way, if acts declared unlawful under the UTPA are prohibited by some other  



                                                                                                                

state law or regulation, then they are exempt from the UTPA.  



                                                                                                                                                                           

                           WehavepreviouslynotedthatAS45.50.481(a)(1) "exempts only thoseacts  

                                                                                                                                                 12   And we have  

                                                                                                                                                                         

or transactions which are the subject of 'ongoing, careful regulation.' " 



emphasized  that such  regulation  must prohibit  the specific act in question:                                                                                      "Mere  

                                                                                                                                                                     



regulation under a separate and distinct statutory scheme, however, satisfies only one  

                                                                                                                                                                           



prong of [the UTPA's exemption provision]; unfair acts and practices are exempt from  

                                                                                                                                                                         



the purview of the Act only where the business is both regulated elsewhere and the unfair  

                                                                                                                                                                       

acts and practices are therein prohibited."13                                                  To qualify for the statutory exemption,  

                                                                                                                                                           



              11           See Kenai Chrysler Ctr., Inc. v. Denison                                         , 167 P.3d 1240, 1255 n.37 (Alaska                     



2007)   ("Interpretation   of   the   UTPA   presents   a   question   of   law   that   we   review  

independently.").   Under this standard of review, we "adopt the rule of law that is most                                                                                

persuasive in light of precedent, reason, and policy."                                                      City of Fairbanks v. Amoco Chem.                          

Co., 952 P.2d 1173, 1176 (Alaska 1998).                                 



              12           Matanuska Maid, Inc. v. State, 620 P.2d 182, 186 (Alaska 1980).  

                                                                                                                                                     



              13           State v. O'Neill Investigations, Inc., 609 P.2d 520, 528 (Alaska 1980).  

                                                                                                                                                                              



                                                                                      -8-                                                                               7386
  


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

Maxim must show both that its conduct is subject to ongoing, careful regulation and that                                                                                                                           



 such regulation prohibits the conduct the superior court identified as violating the UTPA                                                                                                                  



-  Maxim's failure to follow its own policies and procedures and its misrepresentations                                                                                      



                                                                               14  

to Collens about his discharge.                                                      



                                  Maximhas not metthis burden. Alaska Statute 47.32.010-.900, the chapter  

                                                                                                                                                                                                          



governing "Centralized Licensing and Related Administrative Procedures" for a range  

                                                                                                                                                                                                             



of  social  service  providers,  establishes  a  regulatory  scheme  that  governs  Maxim's  

                                                                                                                                                                                                    

conduct as a home health agency.15                                                                 But Maxim has not established the exemption  

                                                                                                                                                                                                 



provision's second prong, that the regulations governing home health agencies prohibit  

                                                                                                                                                                                                        



the specific conduct at issue.  Although the regulations require home health agencies to  

                                                                                                                                                                                                                        



adopt  a  set  of  policies  and  procedures,  they  do  not  explicitly  require  home  health  

                                                                                                                                                                                                            

                                                                                                                                                 16       And Maxim provided no  

agencies to  comply with these policies and procedures.                                                                                                                                                              

                                                                                                                   



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



 1156,   1167   (Alaska   2012)  ("PDI  did   not   meet   its   burden   of   showing   the   UTPA  

exemption was applicable to AIC's claims because it did not establish that the Federal                                                                       

AviationAdministration(FAA)specificallyregulatesthefraudulentconductAICalleged                                                                                                                             

in connection with its aircraft leases.").                                   



                 15               Seealso 7AAC12.500-.590 (regulations governinghomehealthagencies).  

                                                                                                                                                                                                                               

Amicus  curiae  Alaska  State  Medical  Association  argues  that  Maxim's  conduct  is  

                                                                                                                                                                                                                       

regulated by AS 09.55.530-.560, the Article governing medical malpractice actions. But  

                                                                                                                                                                                                                    

these statutory provisions do not provide for the sort of ongoing, careful regulation this  

                                                                                                                                                                                                                   

court  has  held  is  necessary  to  satisfy  prong  one  of  the  statutory  exemption.                                                                                                                           See  

                                                                                                                                                                                                                 

Matanuska  Maid,  620 P.2d  at 186  (holding  existence of statute simply  prohibiting  

                                                                                                                                                                                               

conduct not enough to consider conduct "regulated" by statutory scheme).  Moreover,  

                                                                                                                                                                                                

while these statutes govern how medical malpractice claims may be brought, they do not  

                                                                                                                                                                                                                     

themselves prohibit or regulate the specific conduct at issue.  

                                                                                                                                            



                 16               See 7 AAC 12.507(b)(3) (requiring home health agencies to "adopt written  

                                                                                                                                                                                                           

by-laws, policies, and procedures"); 7 AAC 12.531(a) ("A home health agency shall  

                                                                                                                                                                                                                

                                                                                                                                                                                          (continued...)  



                                                                                                           -9-                                                                                                  7386
  


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

evidence at trial or in briefing to show that the Department of Health and Social Services                                                    



interprets or enforces the regulations as if they impose such an obligation.  As a result                                                          



Maxim has not established that the regulations governing home health agencies prohibit                                                         

noncompliance with a home health agency's own procedures.                                                       17  



                        It   is   also   ambiguous   whether   the   regulations   promulgated   under  

                                                                                                                                                 



AS 47.32.010-.900 prohibit Maxim's misrepresentation to Collens about the reason for  

                                                                                                                                                        



his discharge.  The regulations state that "[a] patient receiving home health services has  

                                                                                                                                                       

the right to . . . be informed of the reason for impending discharge."18  Admittedly a right  

                                                                                                                                                    



to information is not worth much if the information is not accurate.  But it is not clear  

                                                                                                                                                    



that the regulations' statement of this right translates, in practice, to a prohibition on  

                                                                                                                                                        



misrepresentations such as Maxim's.   The regulations' emphasis on the  existence of  

                                                                                                                                                         



policies and procedures, rather than compliance with them, suggests that the Department  

                                                                                                                                        



focuses enforcement on home health agencies' adoption of procedures and policies that  

                                                                                                                                                       



are  generally  protective  of  patients'  rights.                                         Whether  the  Department  devotes  

                                                                                                                                              



            16          (...continued)  



                                                                                                                                                     

establish,  implement,  and  make  available  to  all  personnel,  written  policies  and  

                                                                                                                                                      

procedures  appropriate  to  the  services  offered  by  the  agency.                                                    These  policies  and  

                                                                                                                                    

procedures   must   be   reviewed   at   least   annually   and   revised   as   necessary.");  

                                                                                                                                         

7 AAC 12.531(b)(2) ("A home health agency shall establish policies and procedures  

                                                                                                                                                         

covering . . . conditions for acceptance, transfer, discharge, and continuing care of  

                                                                                                                                               

patients."); 7 AAC 12.600(f) ("A home health agency must comply with 7 AAC 12.500- 

               

7 AAC 12.590.").  



            17          SeeAlaska Interstate, 279 P.3dat1167-68(holdingdefendant did not prove  

                                                                                                                                                   

the UTPA exemption's second prong because defendant's specific conduct was not  

                                                                                                                                                       

regulated by regulations' terms and expert trial testimony had not established FAA  

                                                                                                                                                   

regulated it in practice).  

                           



            18          7 AAC 12.534(b)(10).  

                                       



                                                                           -10-                                                                    7386
  


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

 enforcement resources to policing                                                                                         individual acts of misrepresentation                                                                                               is uncertain.                                  



 Absent evidence that the Department does so, Maxim has not met its burden of proving                                                                                                                                                                                           



 the statutory exemption provision's second prong. Maxim's conduct is not exempt from                                                                                                                                                                                                     



 UTPA liability under AS 45.50.481(a)(1).                                                



                                               3.	                    We decline to adopt the "entrepreneurial aspect" rule on the                                                                                                                                                             

                                                                      facts   of   this  case;   regardless,   it   would   not   exempt   Maxim's  

                                                                      conduct.  



                                               Maxim also argues that there is a general healthcare exemption from the                                                                                                                                                                          



 UTPA.   It contends that health professionals should be subject to the UTPA only for                                                                                                                                                                                                           



                                                                                                                                                                                                                                                                                                  

 conduct related to the business or "entrepreneurial" aspects of the health profession -  



                                                                                                                                                                                                                                                                                                 

 not conduct involving the provision of medical care.  But we are not convinced that we  



 should adopt this proposed common law exclusion on the facts of this case.                                                                                                                                                                                            



                                               Other jurisdictions have limited the scope of consumer protection laws as                                                                                                                                                                            



                                                                                                                                                                                                                                                                             19  

 applied   to   the   so-called   "learned   professions,"   such   as   law   and   medicine.                                                                                                                                                                                        Such  



                                                                                                                                                                                                                                                                           

jurisdictions  generally  conclude  that  state  consumer  protection  laws  may  apply  to  



                                                                                                                                                                                                                                                                                          

 medical and legal professionals when the"entrepreneurial"or "business"aspectsofthese  



                                                                                                                                           20  

                                                                                                                                                                                                                                                                                                     

 professionals'  services  are  implicated.                                                                                                              But  if  a  claim  raises  questions  about  a  



                                                                                                                                                                                                                                                                                          

 professional's competence, the professional is exempt from liability under the state  



                        19                     See, e.g.                   ,  Haynes v. Yale-New Haven Hosp.                                                                                       , 699 A.2d 964, 972-74 (Conn.                                                   



  1997);  Short v. Demopolis                                                               , 691 P.2d 163, 168 (Wash. 1984).                                                                                      See generally Brookins v.                                                          

Mote, 292 P.3d 347, 358-60 (Mont. 2012) (cataloging approach of other states before                                                                                                                                                                                                 

 holding  Montana's   consumer   protection   law   applied   only   to   the   "entrepreneurial,  

 commercial, or business aspects of running a hospital").                                                                                                  



                        20                     See, e.g., Haynes, 699 A.2d at 974.  

                                                                                                                                                        



                                                                                                                                               -11-	                                                                                                                                      7386
  


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

                                             21  

consumer protection law.                          Courts that adopt such an "entrepreneurial aspect" rule                                     



reason that "[t]o hold otherwise would transform every claim for . . . malpractice into a                                                          

[consumer protection act] claim."                         22  



                                                                                                                                                

                       We have previously applied the UTPA to professional misconduct in the  

                                                                                                          23   In those cases we saw  

                                                                                                                                               

legal profession and to claims involving the medical industry. 



no need to apply or delineate the scope of a professional services exemption to the  

                                                                                                                                                



UTPA.  Under the right circumstances, it may be appropriate to exempt some conduct  

                                                                                                           



of the learned professions from UTPA liability. But those circumstances are not present  

                                                                                                                                         



here.   The only medical professional involved in the decision to discharge Collens  

                                                                                                                                        



advised Maxim that the discharge was not warranted for medical reasons - Collens's  

                                                                                                                                



discharge was unquestionably a business decision.  Thus even if we were to adopt an  

                                                                                                                                                 



"entrepreneurial aspect" exception for the UTPA's application to certain professional  

                                                                                                                                



services, Maxim would still be liable under the Act.  The superior court did not err by  

                                                                                                                                    



concluding that Maxim could be liable under the facts of this case.  

                                                                                                           



            21         See, e.g.     ,  id.  



            22         See   id.;   see   also   Brookins,   292   P.3d  at   359   ("[F]ailing   to   exempt  



professional negligence in the course of the 'actual practice' of medicine could render  

                                                                                                                                              

medical malpractice law 'obsolete.' " (quoting Nelson v. Ho, 564 N.W.2d 482, 486  

                                      

(Mich. App. 1997))).  



            23         See Jones v. Westbrook, 379 P.3d 963, 969-71 (Alaska 2016) (resolving  

                                                                                                                                    

statute  of  limitations  dispute  for  UTPA  claims  against  attorney);  Pepper  v.  Routh  

                                                                                                                       

Crabtree, APC, 219 P.3d 1017, 1025 (Alaska 2009) (holding lawyers liable under the  

                                                                                                                                                

UTPA for debt collection misconduct); Smallwood v. Cent. Peninsula Gen. Hosp., 151  

                                                                                                                                               

P.3d  319,  329  (Alaska  2006)  (holding  claim  regarding  hospital's  billing  practices  

                                                                                                                                     

covered by the UTPA); Odom v. Fairbanks Mem'l Hosp., 999 P.2d 123, 131-32 (Alaska  

                                                                                                                                        

2000) (allowing UTPA claims related to alleged coercive trade practices by hospital to  

                                                                                                                                                  

go forward).  

      



                                                                       -12-                                                                 7386
  


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

                        B.                     The Superior Court's Attorney's Fee Award Was Unreasonable.                                                                                                                                                                                          



                                               The superior court awarded Collens attorney's fees in accordance with                                                                                                                                                                            



Alaska Civil Rule 82(b)(1) for his successful IIED and punitive damage claims.                                                                                                                                                                                                          It then   



determined attorney's fees for Collens's UTPA claim per AS 45.50.537(a), which states                                                                                                                                                                                                         



that a prevailing private plaintiff in an UTPA action "shall be awarded costs as provided                                                                                                                                                                                        



by court rule and full reasonable attorney fees at the prevailing reasonable rate."                                                                                                                                                                                                             The  



superior court noted that we have not yet decided whether "full reasonable attorney fees"                                                                                                                                                                                                      



under   this   provision   can   mean   attorney's   fees   as   defined   by   the   prevailing   party's  



contingency fee agreement. The                                                                                   court concluded that defining attorney'sfees                                                                                                              in this way  



was consistent with the statute, so long as the contingency fee agreement in question was                                                                                                                                                                                                           



reasonable.   



                                               The superior court found that the 45% contingency fee in the agreement                                                                                                                                                       



between   Collens   and   his   counsel   was   not   a   prevailing   reasonable   rate.     The   court  



adjusted this down to a 40% contingency rate and used that to calculate the attorney's                                                                                                                                                                                       



fees for Collens's UTPA damages award.                                                                                                                 The court acknowledged that the resulting                                                                                 

                                                                                                                                                                                                                                                                                            24        but  

award   was   nearly   four   times   the   award   under   Rule   82   proposed   by   Maxim,                                                                                                                                                                                                      



concluded that the award was reasonable given the case's complexity and the effort and  

                                                                                                                                                                                                                                                                                                    



quality of Collens's counsel's work.  

                                                                                                                                  



                                               Maxim challenges the superior court's construction of AS 45.50.537(a),  

                                                                                                                                                                                                                                                                 



namely its conclusion that "full reasonable attorney fees" can be based on a contingency  

                                                                                                                                                                                                                                                                  



fee agreement, rather than a calculation of the reasonable hours worked multiplied by a  

                                                                                                                                                                                                                                                                                                             

reasonable hourly rate. We review the superior court's statutory construction de novo,25  

                                                                                                                                                                                                                                                                                        



                        24                     $5,676,668.17  compared  to  $1,492,950.40.  



                        25                     Michael   W.  v.  Brown,  433  P.3d   1105,   1109  (Alaska  2018).  



                                                                                                                                                  -13-                                                                                                                                                        7386  


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

                                                                                                                                                 26  

considering   the   statute's   language,   legislative   history,   and   legislative   purpose.                                                     



                                                                             

Ultimately we reject its interpretation of the statute.  



                                                                                                                                            

                       The UTPA's current attorney's fee language was adopted through a 1998  

                     27   The committee minutes related to the amendment indicate that its drafters  

amendment.                                                                                                                              

hoped to enhance UTPA enforcement by encouraging private litigation under the Act.28  

                                                                                                                                                      



The  phrase  "full  reasonable  attorney  fees  at  the  prevailing  reasonable  rate"  was  

                                                                                                                                             



specifically intended to ensure that attorney's fees for prevailing plaintiffs would not be  

                                                                                                                                                 

capped by Rule 82.29   Some legislators also suggested that the provision was inspired by  

                                                                                                                                                



           26          City  of   Valdez  v.  State,  372  P.3d  240,  248  (Alaska  2016).  



           27          Ch.  96,    5,  SLA   1998.  



           28          See   Minutes,   H.   Labor   &   Commerce   Standing  Comm.   Hearing   on  



H.B.  203,  20th  Leg.,  1st  Sess.  No.  1513  (Apr.  23,  1997)  (comments  of  Rep.  Dyson);  id.  

at  No. 1889 (testimony of Daveed Schwartz, Assistant Att'y Gen.);  Minutes, H. Judiciary  

Standing Comm. Hearing on H.B. 203, 20th Leg., 2d Sess. No. 0763 (Feb. 9, 1998)                                                           

                                              

(comments of Rep. Dyson that "the problem has been with 'the small guy going after                                                          

                                                                                                                                                  

Goliath' "); id. at No. 0847 (comments of Chairman Green "that a transaction for a  

$2,000 car . . . could quickly go beyond $5,000 just in time, motions, and that sort of                                                          

               

thing").  



           29          For committee testimony comparing Rule 82 awards to the more generous  

                                                                                                                                     

award  expected  under  the  amended  attorney's  fee  provision's  new  language,  see  

                                                                                                                                              

Minutes, H. Labor & Commerce Standing Comm. Hearing on H.B. 203, 20th Leg.,  

                                                                                                                                           

 1stSess. No. 2146 (Apr. 23, 1997) (testimony of Daveed Schwartz, Assistant Att'y Gen.)  

                                                                                                                                           

and Minutes, H. Judiciary Standing Comm. Hearing on H.B. 203, 20th Leg., 2d Sess.,  

                                                               

No. 0006 (Feb. 9, 1998) (comments of Rep. Croft).  

                                                                             



                       Rule82establishesseveralcontext-dependent schedules for attorney's fees.  

                                                                                                                                                      

In cases where the prevailing party recovers no money judgment, the Rule requires the  

                                                                                                                                               

court to award acertain percentage oftheprevailing party's"reasonableactual attorney's  

                                                                                                                                    

fees" depending on whether the case went to trial.  Alaska R. Civ. P. 82(b)(2).  We have  

                                                                                                                                            

held that since "[t]he purpose of Civil Rule 82 is to compensate partially a prevailing  

                                                                                                                                  

                                                                                                                             (continued...)  



                                                                      -14-                                                                 7386
  


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

                                                                                     30  

similar fee-shifting provisions in civil rights statutes.                                  



                                                                                                                             

                      The  fee-shifting  provision's  legislative  history  indicates  the  intent  to  



                                                                                                                                    

encourage private lawsuits by providing more generous attorney's fee awards than those  



                                                                                                                            

available under Rule 82.  But the legislative history does not indicate how legislators  



                                                                                                                                      

intended  courts  to  calculate  "full  reasonable  attorney  fees"  under  the  statute.                                             For  



                                                                                                                          

guidance we look to federal interpretation of the fee-shifting provisions in the Clayton  



                                                                                                                            

Act and civil rights statutes.  The Clayton Act, like the UTPA, is a consumer protection  



                                                                                                                                  

act providing a private right of action, and its fee-shifting provision's language is similar  

                          31    Federal  courts  acknowledge  that  rules  guiding  interpretation  of  

                                                                                                                                        

to  the  UTPA's. 



attorney's  fee  provisions  in  civil  rights  statutes  apply  to  their  interpretation  of  

                                                                                                                                        

"reasonable attorney's fee" under the Clayton Act.32   Moreover the legislative history of  

                                                                                                                                         



           29         (...continued)  



                                                                                                                       

party[,] . . . full attorney's fees are never awarded absent 'justification' and consideration  

                                                                                                                                         

of the 'good faith' nature of the unsuccessful party's claim or defense."  Heritage v.  

                                                                                                                                   

Pioneer Brokerage &Sales, Inc., 604 P.2d 1059, 1065-66 (Alaska 1979) (quoting Malvo  

                                                                                          

v. J.C. Penney Co., 512 P.2d 575, 587 (Alaska 1973)).  



           30         Representative Dyson, for example, noted that the proposed legislation  

                                                                                                                           

"follows a practice learned during the civil rights era, when most people realized that  

                                                                                                                                      

state attorney general's offices didn't have the resources, or perhaps the inclination, to  

                                                                                                                                         

file . . . civil rights actions . . . .  So, they allowed for, if you were successful in an action,  

                                                                                                                                  

                                                             [ ]s fees and, therefore, the cost of bringing the  

                                                                                                                                       

that you could recover your attorney ' 

                                                

action."        Minutes,  H.  Judiciary  Standing  Comm.  Hearing  on  H.B.  203,  20th  Leg.,  

                                                                                                                                    

2d Sess. No. 0577 (Feb. 9, 1998).  

                                             



           31         See  15 U.S.C.  15(a) (2012) ("[A]ny person . . . injured . . . by reason of  

                                                                                                                                         

anything forbidden in the antitrust laws may sue therefor . . . and shall recover threefold  

                                                                                                                              

the damages by him sustained, and the cost of suit, including a reasonable attorney's  

                                                                                                                            

fee.").  



           32         See, e.g., Copper Liquor, Inc. v. Adolph Coors Co., 624 F.2d 575, 581 (5th  

                                                                                                                                      

                                                                                                                      (continued...)  



                                                                   -15-                                                             7386
  


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

the UTPA's fee-shifting provision indicates it was at least partly inspired by those of                                                                                                   



civil rights statutes.                       We also look to how courts in other jurisdictions have interpreted                                                        



fee-shifting   provisions   in   similar   consumer   protection   acts.     After   reviewing   these  



persuasive authorities, we conclude that the superior court's calculation of Collens's                                                                                    



attorney's fee award deviates from the norm likely intended by the statute.                                                                          



                              Courts calculating reasonable attorney's fees under similar fee-shifting                                                               



                                                                                                                                                                                           33  

provisions generally employ what we have called the "modified lodestar" method.                                                                                                                  



Trial courts following this approach first calculate a baseline attorney's fee award by  

                                                                                                                                                                                         



determining the reasonable number of hours the attorney worked and multiplying that  

                                                                                                             

by a reasonable hourly rate.34                                        Courts then have the discretion to adjust this baseline  

                                                                                                                                                                             



               32             (...continued)  



                                                                                                                                                                                  

Cir. 1980) (citing Johnson v. Ga. Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974)  

                                                                                                                                                                   

(adopting  12  factors  used  to  determine  reasonable  attorney's  fees  in  employment  

                                                                                                                                                                                    

discrimination law for attorney's fees disputes under Clayton Act), abrogated on other  

                                                                                                                          

grounds by City of Burlington v. Dague, 505 U.S. 557 (1992).  



               33             See State, Dep't of Health & Soc. Servs. v. Okuley, 214 P.3d 247, 253  

                                                                                                                                                                                       

(Alaska2009) (describing modified lodestar method); seealsoHensleyv.Eckerhart,461  

                                                                                                                                                                                       

U.S. 424, 433-34 (1983) (applying modified lodestar method to fee shifting under Civil  

                                                                                                                                                                                     

Rights Attorney's Fee Awards Act of 1976); Advanced Constr. Corp. v. Pilecki , 901  

                                                                                                                                                                                       

A.2d 189, 199 (Me. 2006) (stating that "when analyzing entitlement to attorney fees  

                                                                                                                                                                                      

pursuant to Maine consumer protection statutes . . . the methods of analysis courts use  

                                                                                                                                                                         

in cases involving the federal civil rights attorney fee provision . . . are appropriate");  

                                                                                                                                                                

Furst v. Einstein Moomjy, Inc., 860 A.2d 435, 446-48 (N.J. 2004) (affirming modified  

                                                                                                                                                                           

lodestar approachto fee-shifting provision in NewJersey'sconsumer protection statute).  

                                                                                                                                                                                                 



               34             See, e.g., Hensley, 461 U.S. at 433 ("The most useful starting point for  

                                                                                                                                                                                        

determining the amount of a reasonable fee is the number of hours reasonably expended  

                                                                                                                                                                          

on the litigation multiplied by a reasonable hourly rate."); see also Okuley, 214 P.3d at  

                                                                                                                                                                                           

253 ("[A] court following the modified lodestar method first 'determines the number of  

                                                                                                                                                                                           

hours  an  attorney  reasonably  spent  on  the  case  and  multiplies  that  number  by  a  

                                                                                                                                                                                   

                                                                                                                                                                 (continued...)  



                                                                                           -16-                                                                                     7386
  


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

                                                                                                                              35  

"lodestar" amount to arrive at the final fee award.                                                                                  They may consider a variety of                                            



factors in calculating the lodestar and deciding whether to adjust it, including what we                                                                         



have called the                       Johnson-Kerr  factors:    



                                 (1)             The time and labor required. . . .                                            



                                 (2)             The             novelty                 and            difficulty                  of         the           questions  

                                 involved. . . .         



                                 (3)             The    skill    requisite    to    perform    the    legal    service  

                                 properly. . . .       



                                 (4)             The preclusion of other employment by the attorney                                                             

                                 due to acceptance of the case. . . .                                           



                                 (5)             The customary fee. . . .                             



                                 (6)             Whether the fee is fixed or contingent. . . .                                                        



                                 (7)             Time    limitations    imposed    by    the    client   or    the  

                                 circumstances. . . .       



                                 (8)             The amount involved and the results obtained. . . .                                                                       



                                 (9)             The            experience,                      reputation,                    and           ability             of        the  

                                 attorneys. . . .       



                                 (10)            The "undesirability" of the case. . . .                                               



                34               (...continued)  



                                                                                                                                                                                                           

reasonable hourly rate.' " (quoting Edwards v. Alaska Pulp Corp., 920 P.2d 751, 757  

                     

(Alaska 1996))).  



                35               See Okuley, 214 P.3d at 253; see also Hensley, 461 U.S. at 434 ("The  

                                                                                                                                                                                                      

product of reasonable hours times a reasonable rate does not end the inquiry.  There  

                                                                                                                                                                                                     

remain other considerations that may lead the district court to adjust the fee upward or  

                                                                                                                                                                                                               

downward, including the important factor of the 'results obtained.' "); Furst, 860 A.2d  

                                                                                                                                                                                                         

at 447-48 (describing considerations trial court should make when determining whether  

                                                                                                                                                                                                 

to adjust lodestar amount).  

                                            



                                                                                                     -17-                                                                                               7386
  


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

                        (11)        The nature and length of the professional relationship                      

                        with the client. . . .           

                        (12)        Awards in similar cases.                     [36]  



                        Unlike the superior court's approach, the modified lodestar method does  

                                                                                                                                      



not invite a situation in which fees could vary  widely  depending on the plaintiff's  

                                                                                                                                           



recovery. We are convinced that Alaska courts should employ it when determining "full  

                                                                                                                                                     



reasonable attorney fees" under the UTPA's fee-shifting provision.  We note, however,  

                                                                                                                                            



that the modified lodestar approach we adopt today differs from that favored by the  

                                                                                                                                                       



United States Supreme Court.  The U.S. Supreme Court has "held that an enhancement  

                                                                                                                                     



[in the second step of the modified lodestar calculation] may not be awarded based on  

              

a  factor  that  is  subsumed  in  the  lodestar  calculation."37                                           And  some  of  the  Court's  

                                                                                                                                               



decisions strongly suggest that certain factors, including whether an attorney's fee is  

                                                                                                                                                          



fixed  or  contingent,  are  inherent  to  the  considerations  necessary  for  a  lodestar  

                                                                                                                                             



determination and thus may never serve as grounds for decrease or enhancement in the  

                                                                                                                                                        

second step of the modified lodestar calculation.38  

                                                                                             



            36          Johnson, 488 F.2d at 717-19;                           see also Kerr v. Screen Extras Guild, Inc.                                  ,  



526 F.2d 67, 70 (9th Cir. 1975) (adopting these factors);                                              Okuley, 214 P.3d at 251 n.13                  

(labeling these the "               Johnson-Kerr  factors").    



            37          Perdue v. Kenny A. ex rel. Winn, 559 U.S. 542, 553 (2010).  

                                                                                                                       



            38          See City of Burlington v. Dague, 505 U.S. 557, 562 (1992) ("We note at the  

                                                                                                                                                        

outset that an enhancement for contingency would likely duplicate in substantial part  

                                                                                                                                                      

factors  already  subsumed  in  the  lodestar.");  Pennsylvania  v.  Del.  Valley  Citizens'  

                                                                                                                                            

Council  for  Clean  Air,  483  U.S.  711,  726  (1987)  ("[I]t  may  well  be  that  using  a  

                                                                                                                                                          

contingency enhancement is superfluous and unnecessary under the lodestar approach  

                                                                                                                                            

to  setting  a  fee.");  Blum  v.  Stenson,  465  U.S.  886,  898-901  (1984)  (holding  that  

                                                                                                                                                      

complexity of litigation, novelty of issues, high quality of representation, and benefit to  

                                                                                                                                                          

class were factors subsumed in lodestar calculation and thus insufficient justification for  

                                                                                                                                                        

                                                                                                                                    (continued...)  



                                                                           -18-                                                                    7386
  


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

                             But the U.S. Supreme Court's interpretation of fee-shifting provisions in                                                                                    



federal statutes is not binding on our interpretation of the UTPA's fee-shifting provision.                                                                                                     



And like other jurisdictions that have sought guidance in federal jurisprudence when                                                                                              



interpreting   fee-shifting   provisions  in  their   own   state   statutes,   we   are   not   entirely  

                                                                                                         39    For one, we agree with the courts of  

persuaded by the Court's reasoning in this area.                                                                                                                                          



other jurisdictions, and the dissenting opinions of key U.S. Supreme Court cases, that a  

                                                                                                                                                                                            



contingency enhancement in the second step of the lodestar determination can provide  

                                                                                                                                                                             



a "risk premium"necessary toinducecompetent counsel to litigate claims when payment  

                                                                                                                                                                            

for legal services is contingent on success in the case.40   We thus leave it within the trial  

                                                                                                                                                                                      



court's discretion to consider the contingent nature of a fee agreement when calculating  

                                                                                                                                                                      



an  attorney's  fee  award  under  the  modified  lodestar  approach,  and  to  incorporate  

                                                                                                                                                                    



               38            (...continued)  



                                     

enhancement of lodestar).  



               39  

                                                                                                                                                                                         

                             See, e.g., Schefke v. Reliable Collection Agency, Ltd., 32 P.3d 52, 94, 96  

(Haw. 2001) (concluding that  Dague 's and  Delaware Valley 's dissenting opinions are   

                                                                                                                                       

better reasoned than Dague 's majority opinion and therefore holding that contingency  

                                                                                                                                                                                   

enhancements of a lodestar are permissible); Rendine v. Pantzer, 661 A.2d 1202, 1228  

(N.J.  1995) (holding that despite U.S. Supreme Court jurisprudence to the contrary, trial                                                                                            

                                                                                                                                                                                   

courts should consider whether contingency enhancementsto a lodestar awardwill result  

                                                                       

in a more reasonable attorney's fee).  



               40            See Del. Valley, 483 U.S. at 735-36 (Blackmun, J., dissenting); Ketchum  

                                                                                                                                                                           

v. Moses , 17 P.3d 735, 744 (Cal. 2001); Joyce v. Federated Nat'l Ins. Co., 228 So. 3d  

                                                                                                                                     

 1122, 1130, 1132-33 (Fla. 2017); Schefke, 32 P.3d at 96-97; Rendine, 661 A.2d at  

                                                                                                                                                                                          

337-38; see also Blum, 465 U.S. at 903 (Brennan, J., concurring) (stating that permitting  

                                                                                                                                                                        

lodestar enhancements to "compensate for the contingent nature of success, and thus for  

                                                                                                                                                                                        

the risk of nonpayment in a particular case" is "entirely consistent with [a] market-based  

                                                                                                                                                                 

approach to hourly rates").  

                                            



                                                                                           -19-                                                                                    7386
  


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

considerations about this factor                                   into   either   the first or                    second step               of the modified     

lodestar calculation.                    41  



                           Here the superior court erred in its assessment of full reasonable attorney's  

                                                                                                                                                           



fees.  It did not complete the first step in a modified lodestar determination:  calculating  

                                                                                                                                                         



a baseline award based on an approximation of hours reasonably worked multiplied by  

                                                                                                                                                                          



a reasonable hourly rate.   We reverse the superior court's attorney's fee award and  

                                                                                                                                                                       



remand for an award based on a reasonable rate for the services, as calculated using the  

                                                                                                                                                                         



modified lodestar method outlined above.  We note that the Johnson-Kerr factors are  

                                                                                                                                                                        



similar to the factors we apply to determine reasonable attorney's fees in other situations  

                                                                                                                                                            

using Alaska Rule of Professional Conduct 1.5(a) and Alaska Bar Rule 35(a).42   The trial  

                                                                                                                                                                       



             41            As for the other factor, the U.S. Supreme Court has indicated may be                                                                          



subsumed in the lodestar calculation, we need not determine at this time whether they                                                                                 

must   always   be   incorporated   in   the   first  step   of   the   modified   lodestar   approach.   

However,   we   note   our   agreement  with  the   statement   in   Hensley   that   trial   courts  

considering the                 Johnson-Kerr  factors "should note that many of these factors usually are                                                                

subsumed within the initial calculation of hours reasonably expended at a reasonable                                                                    

hourly rate."              461 U.S. at 434 n.9.                       



             42            The factors are:  

                                                            



                           (1)          the time and labor required, the novelty and difficulty  

                                                                                                                                 

                           of the questions involved, and the skill requisite to perform  

                                                                                                                                    

                           the legal service properly;  

                                                                                 



                           (2)          the likelihood[] that the acceptance of the particular  

                                                                                                                                

                           employment will preclude other employment by the lawyer;  

                                                                                                                                                     



                           (3)          the fee customarily charged in the locality for similar  

                                                                                                                                      

                           legal services;  

                                       



                           (4)	         the amount involved and the results obtained;  

                                                                                                                                      

                                                                                                                                                   (continued...)  



                                                                                   -20-	                                                                            7386
  


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

court may draw on its experience with these factors when determining how to calculate                                                                                                                                                                                                       



a baseline reasonable rate award and whether to enhance                                                                                                                                                                      or  decrease that baseline                                      



amount.  



                         C.                      We Affirm The Superior Court's Decision In All Other Respects.                                                                                                                                                           



                                                 1.	                     It   was   not   an   abuse   of   discretion   to  preclude   Maxim   from   

                                                                         presenting expert testimony on damages at trial, and Maxim                                                                                                                                                                                           

                                                                         failed to preserve this as an issue for appeal.                                                                                                                                 



                                                 Maxim retained two expert witnesses - one to testify about Collens's                                                                                                                                                                   



"claimed economic damages" and another to testify about his "medical treatment and                                                                                                                                                                                                                             



costs" - but did not disclose their reports before the deadline set by the superior court.                                                                                                                                                                                                                                    



The court eventually issued an order precluding Maxim's experts from testifying at trial.                                                                                                                                                                                                                                     



Maxim claims this was an abuse of discretion, but we do not agree.                                                                                                                                                              



                                                 As a threshold matter, Maxim did not preserve this issue because it never                                                                                                                                                                              



filed the expert reports.                                                              Under Alaska Evidence Rule 103, error may not be predicated                                                                                                                                    



on a ruling that excludes evidence unless "the substance of the evidence was made                                                                                                                                                                                                                      



known to the court by offer or was apparent from the context within which questions                                                                                                                                                                                                      



                        42	                      (...continued)  



                                                                                                                                                                                                                                                                

                                                 (5)                     the time limitations imposed by the client or by the  

                                                                                                         

                                                 circumstances;  



                                                                                                                                                                                                                                

                                                 (6)                     the nature and length of the professional relationship  

                                                                                                          

                                                 with the client;  



                                                                                                                                                                                                                                                                    

                                                 (7)                     the experience, reputation, and ability of the lawyer or  

                                                                                                                                                                                          

                                                 lawyers performing the services; and  



                                                                                                                                                                           

                                                 (8)	                    whether the fee is fixed or contingent.  



                                                                                                                                                                                                                                                    

Alaska R. Prof. Conduct 1.5(a); see also Nautilus Marine Enters., Inc. v. Exxon Mobil  

                                                                                                                                                                                                                                                                                                                    

 Corp., 332 P.3d 554, 558 n.18 (Alaska 2014) (noting that these factors are listed in  

                                                                                                                                                                   

"near-identical parallel" in Bar Rule 35(a)).  



                                                                                                                                                       -21-	                                                                                                                                               7386
  


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

                          43  

were asked."                  Under the Rule, "a party ordinarily 'waives its right to challenge the                                                            



exclusion of evidence unless an offer of proof as to the substance of the evidence is made                                                                  

                                                                         44    The purpose of the offer of proof requirement  

at the time the evidence is excluded.' "                                                                                                       



                                                                                                                                                                  45  

is to "resolve doubts as to what testimony the witness would have in fact given."                                                                                      

                                                                                                                                                    



Maxim's January 2017 expert disclosure does not serve as an offer of proof because  

                                                                                                                                                      



without the substance of the proposed experts' testimony, it is impossible to determine  

                                                                                                                                                   



whether Maxim suffered any prejudice by its exclusion. By failing to file expert reports  

                                                                                                                                                         



with the superior court, Maxim waived this claim of error.  

                                                                                                     



                          Even if Maxim had not waived the issue, we would affirm the superior  

                                                                                                                                                      



court's  preclusion  orders,  for  they  were  not  an  abuse  of  discretion.                                                              Alaska  Civil  

                                                                                                                                                            



Rule 26(a)(2) mandates timely disclosure of expert witness reports.  Alaska Civil Rules  

                                                                                                                                                           



 16(f) and 37(c)(1)  authorize the imposition of sanctions if a party fails to disclose  

                                                                                                                                                      



required information or fails to obey a pretrial order.  Rule 37(c)(1) makes exclusion of  

                                                                                                                                                                  



testimony the presumptive rule when evidence is not disclosed as required:  

                                                                                                                               



                         A party that without substantial justification fails to disclose  

                                                                                                                             

                          information required by Rule[] 26(a) . . . shall not, unless  

                                                                                                                                

                          such failure is harmless, be permitted to use as evidence at a  

                                                                                                                                          

                         trial . . . any witness or information not so disclosed.   In  

                                                                                                                                       

                          addition to or in lieu of this sanction, the court, on motion  

                                                                                                           

                          and after affording an opportunity to be heard, may impose  

                                                                                                                               

                          other appropriate sanctions.  

                                                            



             43          Alaska R. Evid. 103(a)(2).       



             44          Muellerv.Buscemi                    , 230P.3d          1153, 1155 (Alaska2010) (quoting                                  Agostinho  



v.  Fairbanks Clinic P'ship                        , 821 P.2d 714, 717 (Alaska 1991)).                    



             45          Alaska  R.  Evid.  103  cmt.  (quoting  Fed.  R.  Evid.  103(b),  Advisory  

                                                                                                                                                   

Committee's Notes to 1972 proposed rules).  

                                                                          



                                                                               -22-                                                                         7386
  


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

                              Trial courts generally have discretion to determine                                                             the appropriate sanction           



for the violation of a discovery order, but this discretion is limited when the sanction's                                                                                  



effect "is to impose liability on the offending party, establish the outcome of or preclude                                                                                     

                                                                                                                                 46    Here, precluding Maxim's  

evidence on a central issue, or end the litigation entirely."                                                                                                                  



expert witness testimony did not entirely eliminate evidence on a central issue -Maxim  

                                                                                                                                                                                   



was free to interrogate Collens's expert witnesses through cross-examination after they  

                                                                                                                                                                                          

presented evidence on damages.47                                              In reviewing the superior court's discovery sanction  

                                                                                                                                                                                 



for abuse of discretion, we therefore grant it the wide latitude generally afforded trial  

                                                                                                                                                                                          



courts in these situations.  

                                   



                              Under  Civil  Rule  37(c)(1),  the  trial  court  must  generally  exclude  

                                                                                                                                                                               



undisclosed evidence unless there is substantial justification for the party's failure to  

                                                                                                                                                                                              



make timely disclosure and this failure is harmless.  Here, Maxim's justification for the  

                                                                                                                                                                                            



delay was disputed by Collens, and weighing the parties' conflicting accounts against  

                                                                                                                                                                                   



one  another,  the  court  reasonably  determined  that  Maxim's  delay  was  unjustified.  

                                                                                                                                                                                                     



Maxim's failure to produce expert reports was not harmless since, absent the sanction,  

                                                                                                                                                                               



it would have unacceptably delayed an already oft-postponed trial. The superior court's  

                                                                                                                                                                                    



application of Rule 37(c)(1) was not an abuse of discretion.  

                                                                                                               



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



Creek   Mining,   Inc.,   952   P.2d   1164,   1169   (Alaska   1998)).     We   review   discovery  

sanctions for abuse of discretion.                                          Id .  



               47             See Cartee v. Cartee, 239 P.3d 707, 719-20, 722 (Alaska 2010) (affirming  

                                                                                                                                                                            

the exclusion of expert witness testimony where the sanctioned party had an opportunity  

                                                                                                                                                                         

to challenge and critique the opposition's expert).  

                                                                                               



                                                                                             -23-                                                                                       7386
  


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

                                             2.                     The damages award was not excessive.                                                                    



                                             Maxim raises multiple objections to the damages award.                                                                                                                                        We address only                           



thosearguments                                         that meritdiscussion and affirmthe superior court's award on all counts.                                                                                                                                             



                                             First the court's compensatory damages for breach of contract were not                                                                                                                                                                     



excessive. Trial evidence established that Collens's medical condition is permanent and                                                                                                                                                                                                 



that he will need full-time nursing care for his lifetime.                                                                                                                                   The superior court calculated                                       



Collens's breach of contract damages as the value of nursing care Maxim promised but                                                                                                                                                                                                     



failed   to   provide;   the   past   and  future   value   of   services   Collens   lost   when   he   was  



discharged from Maxim and forced to move to Washington state, where he was not                                                                                                                                                                                                          



eligible for these services; and Collens's past and future out-of-pocket costs resulting                                                                                                                                                                              



from his discharge and subsequent move to Washington.                                                                                                                                             



                                             We review a trial court's assessment of compensatory damages for clear                                                                                                                                                                



                   48  

error,                                                                                                                                                                                                                                                                                

                          upholding the award as long as the trial judge "follows the correct rules of law,  

                                                                                                                                                                                                                                                            49  Collens's  

                                                                                                                                                                                                                                                                    

and [the] estimation appears reasonable and is grounded upon the evidence." 



plan of care might vary over his lifetime, but nothing in the record suggests that such  

                                                                                                                                                                                                                                                                                    



variations would create meaningful deviations from the court's estimated damages. And  

                                                                                                                                                                                                                                                                                     



no evidence establishes how to calculate and deduct from the estimated damages the  

                                                                                                                                                                                                                                                                                         



impact of other factors that Maxim alleges the court failed to consider.  The superior  

                                                                                                                                                                                                                                                                       



court's compensatory damages for breach of contract are not clearly erroneous.  

                                                                                                                                                                                                                                                                              



                                              Second  damages  for  Collens's  IIED  claim  were  appropriate.                                                                                                                                                              Maxim  

                                                                                                                                                                                                                                                                        



challenges the $400,000 in IIED damages, apparently on grounds that it was error for the  

                                                                                                                                                                                                                                                                                          



                       48                    See Burton v. Fountainhead Dev., Inc.                                                                                             , 393 P.3d 387, 393 (Alaska 2017).                                                             



                       49                    Pluid v. B.K.                             , 948 P.2d 981, 983 (Alaska 1997) (quoting                                                                                                       Morrison v. State                                         ,  



                                                                                             

516 P.2d 402, 405 (Alaska 1973)).  



                                                                                                                                           -24-                                                                                                                                    7386
  


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

                                                                                                                                                50  

superior court to find that Collens suffered severe distress.                                                                                         We have defined severe                       



emotional distress as "distress of such substantial quality or enduring quantity that no                                                                                                                     

                                                                                                                                                                                     51     "In some  

reasonable person in a civilized society should be expected to endure it."                                                                                                                            



cases, the circumstances surrounding a claim may be sufficient to persuade a jury that  

the plaintiff has actually suffered serious emotional trauma."52                                                                                          The symptoms Collens  

                                                                                                                                                                                                



described  experiencing  after  learning  of  his  premature  discharge,  corroborated  by  

                                                                                                                                                                                                           



testimony from his mother, doctor, and care coordinator, support the superior court's  

                                                                                                                                                                                                  



finding that his emotional distress was severe, as do the circumstances of this stress.  

                                                                                                                                                                                                                     



Based on this record, it was not clear error for the superior court to conclude that these  

                                                                                                                                                                                                       

elements  of  the  tort  were  established.53                                                                 Compensatory  damages  for  IIED  were  

                                                                                                                                                                                                     



warranted.  



                50               To   prevail   on   an   IIED   claim,   the   plaintiff   must  show   "(1)   that   the  



defendant's conduct was extreme and outrageous, (2) that the conduct was intentional   

or reckless, (3) that this conduct caused the plaintiff emotional distress, and (4) that the                                                                                                               

distress was severe."                               Cameron v. Beard                             , 864 P.2d 538, 548 (Alaska 1993). Maxim also                                                           

contends that the statutory cap on non-economic damages in medical malpractice actions                                                                                                            

should apply here.                             See  AS 09.55.549.                              But this is not a medical malpractice action.                                               



                51               State v. Carpenter, 171 P.3d 41, 59 (Alaska 2007) (quoting Fyffe v. Wright,  

                                                                                                                                                                                                 

93 P.3d 444, 456 (Alaska 2004)).  

                                                                



                52               Chizmar v. Mackie, 896 P.2d 196, 205 (Alaska 1995).  

                                                                                                                                                     



                53               "We review the superior court's factual findings for clear error, which  

                                                                                                                                                                                                   

occurs when a review of the entire record leaves us with a definite and firm conviction  

                                                                                                                                                                                         

that a mistake has been made."  See Offshore Sys.-Kenai v. State, Dep't of Transp. &  

                                                                                                                                                                                                              

Pub. Facilities, 282 P.3d 348, 354 (Alaska 2012).  

                                                                                                                            



                                                                                                    -25-                                                                                              7386
  


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

                                  Third the superior court's award of punitive damages was not erroneous.                                                                                                                    



To recover punitive damages, a plaintiff must establish that                                                                                            



                                  the wrongdoer's conduct was outrageous, such as acts done                                                                                  

                                  with malice or bad motives or a reckless indifference to the                                                                                   

                                  interests   of   another.     Actual   malice   need   not   be   proved.   

                                  Rather, [r]eckless indifference to the rights of others, and                                                                                 

                                  conscious action in deliberate disregard of them . . . may                                                                         

                                  provide   the   necessary   state   of   mind   to   justify   punitive  

                                                          [54]  

                                  damages.                         



A trial court's determination that punitive damages are warranted must be supported by  

                                                                                                                                                                                                                    

clear and convincing evidence.55  

                                                       



                                  The record provides ample support for the superior court's finding that  

                                                                                                                                                                                                                



Maxim committed outrageous conduct demonstrating reckless indifference to Collens's  

                                                                                                                                                                                                   



health and safety. Adkins admitted that she delivered Collens's discharge letter without  

                                                                                                                                                                                                       



first speaking to his physician, that at the time of delivery she knew his care coordinator  

                                                                                                                                                                                              



did not consent to discharge, and that she knew of no alternative care providers for  

                                                                                                                                                                                                                   



Collens. Giventheseadmissions,Collens'sdischargedemonstrated disregardfor critical  

                                                                                                                                                                                                          



                 54               Cummings  v.  Sea   Lion   Corp.,   924   P.2d   1011,   1022   (Alaska   1996)  



(alteration and omission in original) (quoting                                                                    Barber v. Nat'l Bank of Alaska                                                 , 815 P.2d     

857, 864 (Alaska 1991)).                     



                 55              Brandner   v.   Hudson,   171   P.3d   83,   89   (Alaska   2007);  see   also  

                                                                                                                                                                                                             

AS  09.17.020.                               "  'Clear  and  convincing'  evidence  is  evidence  establishing  that  

                                                                                                                                                                                                                

something is 'highly probable.' "  In re Reinstatement of Wiederholt, 89 P.3d 771, 772  

                                                                                                                                                                                                                 

n.6 (Alaska 2004) (quoting Denuptiis v. Unocal Corp., 63 P.3d 272, 275 n.3 (Alaska  

                                                                                                                                                                                                       

2003)).  



                                                                                                        -26-                                                                                                  7386
  


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

health professionals' careassessments                                               and recklessness as to Collens'sfuture                                              health. We    

affirm the punitive damages award.                                             56  



                              Finally Collens was not required to elect his remedies as between punitive  

                                                                                                                                                                              



and treble damages.  "[E]lection of remedies is the choice by a party to an action of one  

                                                                                                                                                                                        



of two or more coexisting remedies or rights or theories of recovery[] arising out of the  

                                                                                                                                                                                         

same facts."57  

                                 



                              Some  jurisdictions  implement  election  of  remedies  as  a  common  law  

                                                                                                                                                                                       



doctrine and require plaintiffs to choose one of multiple potential remedies when those  

                                                                                                                                                                                     



remedies are "so inconsistent or repugnant that pursuit of one necessarily involves  

                                                                                                                                                                             

negation of the other."58                               In those jurisdictions plaintiffs who could claim both punitive  

                                                                                                                                                                              



damages and consumer protection act treble damages for a single claim may be required  

                                                                                                                                                                              

                                                                               59  Courts in such jurisdictions reason that permitting  

to choose between thetwo remedies.                                                                                                                                        

                                                           



receipt of both would allow "impermissible double recovery because the two forms of  

                                                  



               56             Maximalso                 argues that thesuperior court's                                     punitivedamagesaward should                           



be reversed because the court never held a separate proceeding to determine the punitive                                                                                      

damages amount, as required by AS 09.17.020.                                                              But Maxim failed to object to this error                                    

in either of its post-trial motions responsive to the superior court's findings of fact and                                                                                             

conclusions   of   law.     Failing   to   contemporaneously   object   to   the   superior   court's  

procedural error waives the issue for appeal.                                                          See Berry v. Berry                          , 277 P.3d 771, 775                 

(Alaska 2012).   



               57             28A  C.J.S.  Election  of  Remedies     1,  Westlaw  (database  updated  

                                                                                                                                                                             

Mar. 2019).  

             



               58            E.g., Miller v. United Automax, 166 S.W.3d 692, 696-97 (Tenn. 2005)  

                                                                                                                                                                                   

(quoting Forbes v. Wilson Cty. Emergency Dist. 911 Bd., 966 S.W.2d 417, 421 (Tenn.  

                                                                                                                                                                                 

 1998)).  



               59            Id. at 697.  

                                           



                                                                                            -27-                                                                                     7386
  


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

                                                                               60  

enhanced   damages   serve   the   same   functions."                                Whether   to   adopt   the   election-of- 



                                                                                                                                            61  

remedies doctrine is a question of law to which we apply our independent judgment.                                                               



                      We have not previously applied the election of remedies doctrine in a  

                                                                                                                                             



context such as this one.  But in Kenai Chrysler Center, Inc. v. Denison, we were asked  

                                                                                                                                      



to determine whether UTPA treble damages are a form of punitive damages such that a  

                                                                                                                                              



plaintiff waiving his claim for punitive damages also waives his right to treble damages  

                                                                                                                                 

under the Act.62  We held that the UTPA authorizes individuals suing for treble damages  

                                                                                                                                 

under the Act to also pursue "common law relief such as punitive damages."63                                                      And we  

                                                                                                                                           



noted  that  the  UTPA's  treble  damages  provision  serves  "important  purposes"  that  

                                                                                                                                         

punitive damages do not.64   Given our precedent it was not error for the superior court  

                                                                                                   



to conclude that Collens could claim both punitive and treble damages for the same  

                                                                                                                                       

              65   Our statements in Kenai indicate that the rationale behind the common law  

conduct.                                                                                                                                  



           60         Id.  (quoting   Concrete  Spaces,  Inc.  v.  Sender,  2   S.W.3d  901,  906  (Tenn.  



 1999)).  



           61         See  Mat-Su  Valley  Med.  Ctr.,  LLC  v.  Advanced  Pain  Ctrs.  of  Alaska,  Inc.,  



218  P.3d  698,  700  (Alaska  2009);  Beal  v.  McGuire,  216  P.3d  1154,  1162  (Alaska  2009).  



           62         167  P.3d   1240,   1259  (Alaska  2007).  



           63         Id. at 1260.  

                                



           64         Id.  

                            



           65         Collens argues that the damages awards were for different conduct. But the  

                                                                                                                                           

superior court identified Maxim's UTPA violations as the false promises made in their  

                                                                                                                                        

Patients' Rights document and their deceptive discharge of Collens.  The discharge was  

                                                                                                                                         

the basis for Maxim's IIED liability, and the false promises are the conduct the court  

                                                                                                                                       

identified as misrepresentation.  Even though the punitive damages flow from the IIED  

                                                                                                                                       

and misrepresentation claims, they were awarded for the same conduct as the UTPA  

                                                                                                                                    

                                                                                                                         (continued...)  



                                                                    -28-                                                              7386
  


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

election of remedies doctrine - to avoid double recovery - does not apply here.                                                                                                                                                                                                                                                                                                                       We  



decline Maxim's invitation to read the doctrine into the statute.                                                                                                                                                                                                                                             



IV.                             CONCLUSION  



                                                               We REVERSEthe superior court's attorney's feeaward andREMANDfor                                                                                                                                                                                                                                                                              



an award consistent with this opinion.  We AFFIRM the superior court's judgment on                                                                                                                                                                                            



all other issues.                        



                                      65                        (...continued)  



treble damages, contrary to the superior court's statement otherwise.  

                                                                                                                                                                                                                                                                                                                                         



                                                                                                                                                                                                    -29-                                                                                                                                                                                                                 7386  

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