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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. John Diamond III v. Platinum Jaxx, Inc. (8/9/2019) sp-7396

John Diamond III v. Platinum Jaxx, Inc. (8/9/2019) sp-7396

           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                                         



JOHN  DIAMOND  III,                                                    )  

                                                                       )     Supreme  Court  No.  S-16908  

                                 Appellant,                            )  

                                                                                                                                         

                                                                       )     Superior Court No. 3AN-15-07879 CI  

           v.                                                          )  

                                                                                                  

                                                                       )     O P I N I O N  

                                    

PLATINUM JAXX, INC.,                                                   )  

                                                                                                                   

                                                                       )     No. 7396 - August 9, 2019  

                                 Appellee.                             )  

                                                                       )  



                                                                                                                           

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

                                                                                                                   

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



                                                                                                                 

                      Appearances:              Whitney  A.  Power,  Power  & Power  Law,  

                                                                                                                           

                      LLC, Anchorage, for Appellant. No appearancebyAppellee.  



                                                                                                          

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

                                            

                      and Carney, Justices.  



                                            

                      STOWERS, Justice.  



I.         INTRODUCTION  



                                                                                                                                     

                      JohnDiamondIIIwasassaultedand sustained severeinjuries whileapatron  



                                                                                                                                           

at Platinum Jaxx, a restaurant and bar.   He filed suit against Platinum Jaxx, Inc., its  



                                                                                                                                           

landlord, and his assailant, Noel Bungay. A default was entered against Bungay, and the  



                                                                                                                                

landlord  was  later  granted  summary  judgment  on  the  claims  against  it.                                                Diamond  



                                                                                                                                

proceeded to trial on his remaining claims against Platinum Jaxx.  After an eight-day  



                                                                                                                                          

trial, the jury returned a special verdict finding Platinum Jaxx criminally negligent. The  


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

jury   awarded   Diamond   $1.85   million  in  damages   and   apportioned   fault   between  



 Platinum Jaxx and Bungay.                                                                                                                       Platinum Jaxx was found to be 20% at fault for the injuries                                                                                                                                                                                                                



 Diamond received, and Bungay was found 80% at fault.                                                                                                                                                                                                                                                Diamond appeals the superior                                                                                       



 court's pre-trial order that precluded him from proceeding on a piercing the corporate                                                                                                                                                                                                                                                                                                      



 veil theory.                                                  He asks us to reverse the order and remand to allow the superior court to                                                                                                                                                                                                                                                                                                                



 make findings of fact and conclusions of law on the veil piercing issue.                                                                                                                                                                                                                                                                                                       He also appeals                             



 other pre-trial orders excluding evidence, as well as the superior court's post-judgment                                                                                                                                                                                                                                                                                               



 cost award allocation.                                    



                                                                       Because Diamond did not plead the veil piercing                                                                                                                                                                                                                                  issue, we affirm the                                                                     



  superior court's order.                                                                                              The superior court also did not abuse its discretion by excluding                                                                                                                                                                                                                       



 the challenged evidence and by allocating costs according to the percentage of fault of                                                                                                                                                                                                                                                                                                                                                                



  each defendant. We therefore affirm the court's pre-trial orders and post-judgment cost                                                                                                                                                                                                                                                                                                                                                     



  award.  



 II.                                FACTS AND PROCEEDINGS                                                       



                                                                       In October 2013 John Diamond, III and his girlfriend were patrons at                                                                                                                                                                                                                                                                                                             



 PlatinumJaxx,                                                                a restaurant and bar in downtown Anchorage. While                                                                                                                                                                                                                               the two were sitting  



  at the bar, another patron, Noel Bungay, hit Diamond in the head with a pint glass,                                                                                                                                                                                                                                                                                                                                               



 causing severe disfigurement. In June 2015 Diamond and his girlfriend filed suit against                                                                                                                                                                                                                                                                                                                                      



 Platinum Jaxx, Inc., its landlord, La Mexicana, Inc., and Bungay. Diamond alleged that                                                                                                                                                                                                                                                                                                                                                         



  (1)   Platinum Jaxx violated the dram shop statute by serving alcohol to a "drunken                                                                                                                                                                                                                                                                                                                          

                                              1  (2) Platinum Jaxx was negligent in the operation of its premises and failed to  

 person,"                                                                                                                                                                                                                                                                                                                                                                                                                                               



  exercise reasonable care to protect its patrons, (3) La Mexicana was negligent in its  

                                                                                                                                                                                                                                                                                                                                                                                                                                                     



                                    1                                  See  AS 04.16.030(a) ("A licensee, an agent, or employee may not with                                                                                                                                                                                                                                                                                               



 criminal   negligence   (1)   sell,   give,   or   barter   alcoholic   beverages   to   a   drunken  

 person; . . . . [or] (3) allow a drunken person . . . to consume an alcoholic beverage within                                                                                                                                                                                                                                                                                                                                    

 licensed premises . . . .").                                                                        



                                                                                                                                                                                                                            -2-                                                                                                                                                                                                            7396
  


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duties as landlord and owner of the property, (4) Bungay assaulted Diamond causing                                                                                                                                                                                                                                                           



 serious physical injury, and (5) all parties negligently caused the girlfriend to suffer                                                                                                                                                                                                                                                           



 severe emotional distress and loss of consortium.                                                                                                                                                              By the time suit was filed, the bar had                                                                                                        



been   closed   for   one   year,   and   Platinum   Jaxx,   Inc.   was   subsequently  involuntarily  



dissolved in September 2015.                                                                         



                                                         In May 2016 the superior court entered a default against Bungay.                                                                                                                                                                                                                    In June   



2017 the court granted summary judgment against the girlfriend's claims for emotional                                                                                                                                                                                                                                              



distress and loss of consortium.                                                                                                            In July the court granted La Mexicana's motion for                                                                                                                                                                   



 summaryjudgment on the landlord liability claim, and the                                                                                                                                                                                       remaining parties -Diamond                                                             



and Platinum Jaxx - proceeded to a jury trial.                                                                                                                                    



                                                          Prior   to   trial,  in  February   2017,   Diamond's   attorney   sent   a   letter   to  



Platinum Jaxx's attorney, stating: "Plaintiffs did not plead piercing the corporate veil as                                                                                                                                                                                                                                                                           



                                                                                                              [  ]  

                                                                                                                2          Nevertheless, for notice purposes, please be advised that  

a count in the Complaint.                                                                                                                                                                                                                                                                                                                                     



Plaintiffs  intend to  argue at  trial  that  [the] corporate veil should be pierced."                                                                                                                                                                                                                                                                         But  

                                                                                                                                                                                                                                                                                                                                                           



Diamond did not seek to amend his complaint to plead a veil piercing theory or to join  

                                                                                                                                                                                                                                                                                                                                                              



theindividual owners of PlatinumJaxx as defendants. Diamond later sought tointroduce  

                                                                                                                                                                                                                                                                                                                                       



evidence of Platinum Jaxx's lack of liability insurance to show that Platinum Jaxx was  

                                                                                                                                                                                                                                                                                                                                                             



undercapitalizedand thereforeits corporateveilshouldbepierced. PlatinumJaxx moved  

                                                                                                                                                                                                                                                                                                                                                  



                            2                            Generally, "courts seek to recognize and uphold 'the principles that the                                                                                                                                                                                                                               



corporation exists as a separate legal entity and that owner liability for the debts of the                                                                                                                                                                                                                                                                      

corporation is limited.' "                                                                             L.D.G., Inc. v. Brown                                                                                   , 211 P.3d 1110, 1125 (Alaska 2009)                                                                                                  

(quoting  Pyramid Printing Co. v. Alaska StateComm'n for Human Rights                                                                                                                                                                                                                                             , 153 P.3d 994,                           

 1000 (Alaska 2007)).                                                                       But the corporate veil may be pierced - and the corporate status                                                                                                                                                                                          

disregarded - to hold the individual owners liable for the acts of the corporation "if the                                                                                                                                                                                                                                                                        

corporate form is used to defeat public convenience, justify wrong, commit fraud, or                                                                                                                                                                                                                                                                                

defend crime," or if the "corporation is nothing more than a 'mere instrument' of a                                                                                                                                                                                                                                                                                     

 shareholder."   Id.  (first quoting                                                                                             Elliott v. Brown                                                   , 569 P.2d 1323,                                                   1326 (Alaska                                              1977); and   

then quoting                                            Uchitel Co. v. Telephone Co.                                                                                                , 646 P.2d 229, 235 (Alaska 1982)).                                                                                      



                                                                                                                                                                                  -3-                                                                                                                                                                     7396
  


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

to preclude the evidence and argued that Diamond did not plead a veil piercing theory.                                                                                                                                                                                                                                                                                                                                                     



In two pre-trial orders the superior court precluded Diamond from mentioning liability                                                                                                                                                                                                                                                                                                          



insurance at trial and stated that it would "not allow [Diamond] to proceed on a piercing                                                                                                                                                                                                                                                                                               



the corporate veil [theory] to pursue claims against the individual, non-named officers                                                                                                                                                                                                                                               



or shareholders of Platinum Jaxx, Inc."  The court reiterated at trial that Diamond was                                                   



precluded fromproceeding on a                                                                                                                       veil piercing theory because "it wasn't pled" and "would                                                                                                                                                                                      



be grossly prejudicial . . . this late in time."                                                                                                                                    



                                                                  The jury returned a special verdict in favor of Diamond, finding that (1)                                                                                                                                                                                                                                                                            



Platinum Jaxx, with criminal negligence, violated the dram shop statute; (2) Platinum                                                                                                                                                                                                                                                                                                    



Jaxx was negligent as a possessor of land; (3) Platinum Jaxx's negligence was a legal                                                                                                                                                                                                                                                                                                                   



cause of harm to Diamond; (4) Diamond suffered severe disfigurement and damages of                                                                                                                                                                                                                                                                                                                                          



 $1.85 million; and (5) Platinum Jaxx was 20% at fault and Bungay was 80% at fault.                                                                                                                                                                                                                                                                                                                                                        



Final judgment was entered against Bungay and Platinum Jaxx in September 2017, with                                                                                                                                                                                                                                                                                                                             



costs awarded in October.                                                                                                       The judgment against Platinum Jaxx was for $331,332.93 in                                                                                                                                                                                                                                    

                                                                                                                                                                                                                                                               3   and $2,619.34 in costs (20% of  

damages (20% of Diamond's total damage award)                                                                                                                                                                                                                                                                                                                                                                             



Diamond's total allowable costs).  

                                                                                                                                    



                                                                 Diamond appeals pre-trial orders by the superior court that (1) precluded  

                                                                                                                                                                                                                                                                                                                                              



him from proceeding on a piercing the corporate veil theory, (2) excluded evidence  

                                                                                                                                                                                                                                                                                                                                                                                         



related to the veil piercing theory, and (3) excluded evidence related to Platinum Jaxx's  

                                                                                                                                                                                                                                                                                                                                                                                                       



reputation that Diamond argues might have increased the jury's percent allocation of  

                                                                                                                                                                                                                                                                                                                                                                                                                          



 fault to Platinum Jaxx.  Diamond also appeals the superior court's award of costs based  

                                                                                                                                                                                                                                                                                                                                                                                                          



on a percentage-of-fault formula. Diamond requests that we reverse the aforementioned  

                                                                                                                                                                                                                                                                                                                                                         



                                 3                                This amount is based on 20% of $1,567,750 - the damages award was                                                                                                                                                                                                                                                                               



reduced from $1.85 million based on statutory tort caps - plus prejudgment interest of                                                                                                                                                                                                                                                                                                                                     

 $17,782.93.   See generally                                                                                                        AS 09.17.010.   



                                                                                                                                                                                                             -4-                                                                                                                                                                                               7396
  


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

orders and remand for specific findings relating to his veil piercing theory.                                                                             Platinum  



Jaxx did not participate in this appeal.                       



III.          STANDARDS OF REvIEW                     



                           The superior court precluded Diamond from proceeding on a piercing the                                                                       



corporate veil theory because it was not pleaded.                                                    Whether a party provided adequate                      



                                                                                                                             4  

notice to argue a claim is a question of law we review de novo,                                                                                                         

                                                                                                                                and "we will adopt the  



                                                                                                                                                         5  

                                                                                                                                         

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



                                                                                                                                                             

                           The superior court excluded evidence related to Diamond's veil piercing  



                                                                                                                                                                         

theory and to Platinum Jaxx's reputation.  We review trial court "decisions to admit or  



                                                                                                                 6  

                                                                                                                                                                    

exclude evidence under the abuse of discretion standard."                                                            We will find that a trial court  



                                                                                                               

abused its discretion if "the reasons for the exercise of discretion are clearly untenable  



                                   7  

                                       

      

or unreasonable." 



                                                                                                                                                                     

                           The superior court denied Diamond's requested reallocation of costs. "We  

                                                                                                                 8  "When a review of an award  

                                                                                                                                                                  

review a trial court's cost award for abuse of discretion." 



of  .  .  .  costs  requires  an  interpretation  of  the  Alaska  Civil  Rules,  we  apply  our  

                                                                                                                                                                      

independent judgment."9  

                           



             4            Alakayak   v.  British Columbia  Packers,  Ltd.,   48   P.3d   432,   448   (Alaska  



2002).  



             5            Healy  Lake   vill.  v.  Mt.  McKinley  Bank,  322  P.3d  866,  871  (Alaska  2014)  



(quoting  John  v.  Baker,  982  P.2d  738,  744  (Alaska   1999)).  



             6            Loncar v. Gray, 28 P.3d 928, 930 (Alaska 2001).  

                                                                                                                 



             7             Burke v. Maka, 296 P.3d 976, 980 (Alaska 2013) (quoting Lewis v. State,  

                                                                                                                                                                  

469 P.2d 689, 695 (Alaska 1970)).  

                                                        



             8            Alexander v. State, Dep't of Corr., 221 P.3d 321, 324 (Alaska 2009).  

                                                                                                                                                         



             9            Kozevnikoff v. Tanana vill. Council, 89 P.3d 757, 759 (Alaska 2004).  

                                                                                                                                                          



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Iv.	      DISCUSSION  



                                                                                                                           

          A.	       The  Superior  Court  Did  Not  Err  By  Precluding  Diamond  From  

                                                                                                 

                    Proceeding On A Piercing The Corporate veil Theory.  



                                                                                                                              

                    In its July 2017 pre-trial order the superior court stated that it would "not  



                                                                                                                           

allow [Diamond] to proceed on a piercing the corporate veil [theory] to pursue claims  



                                                                                                                                      

against  the  individual,  non-named  officers  or  shareholders  of  Platinum Jaxx,  Inc."  



                                                               

Diamond argues that "[i]n ordering that [he] was precluded from proceeding on a veil  



                                                                                                              

piercing theory, the trial court did not analyze the veil piercing factors on the record,"  



                                                                                                                                 

and that the court "failed to make any findings of fact or conclusions of law related to its  



                                                                                                                           

corporate veil piercing order." He requests that we "reverse the trial court's order related  



                                                                                                                                  

to corporate veil piercing . . . [and] remand this case to the trial court for the purpose of  



                                             

making detailed and explicit findings."  



                                                                                                                                  

                    Diamond is correct that the superior court did not make findings of fact or  



                                                                                                                               

conclusions of law in its order - but it did not need to.  The court's explanations at trial  



                                                                                                                         

-  that the theory "wasn't pled" and that allowing the theory in "would be grossly  



                                                                                                                                

prejudicial . . . this late in time" - are adequate to give us "a clear understanding of the  



                                                   10  

                                                                                                                       

basis of the trial court's decision."                  The question before us instead is whether Diamond  



                                                                 

adequately raised the veil piercing issue.  



                                                                                                                     

                    Diamond did not plead a piercing thecorporateveiltheory in his complaint,  



                                                                                                                                

and he did not seek to file an amended complaint asserting this claim at any point in the  



                                                                                                                       

proceedings.  Diamond argues that his February 2017 letter to Platinum Jaxx provided  



                                                                                                                           

sufficient notice to overcome his failure to plead, and he relies on L.D.G., Inc. v. Brown  



                                                                                                                             

for the proposition that "if a party has notice of the conduct for which the opposing party  



          10        Beaulieu  v.  Elliott,  434  P.2d  665,  670  (Alaska   1967).  



                                                                -6-                                                             7396  


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

is seeking relief, the opposing party may recover under any theory supported by the                                                                

 evidence."11  



                        In L.D.G. we considered whether failure to plead the veil piercing theory  

                                                                                                                                             

                                                                                                           12   The plaintiff in L.D.G.  

was "sufficient to keep the question from going to the jury."                                                                               

                                                                                                 



indicated  "six  months before the start of trial[] that he was prepared  to  argue that  

                                                                                                                                                 



L.D.G.'s corporate veil should be pierced," and he "submitted supplemental proposed  



jury instructions . . . pertaining to piercing the corporate veil, accompanied by a notice  

                                                                                                                                              

indicating that . . . he would also argue that the corporate veil should be pierced."13   We  

                                                                                                                                                  



held that the parties "were on sufficient notice of [the plaintiff's] piercing the corporate  

                                                                                                                                        

veil theory."14             But L.D.G. is distinguishable because the plaintiff originally filed suit  

                                                                                                                                                  

 against both L.D.G. and the sole shareholder of the company personally.15                                                              The sole  

                                                                                                                                                 



 shareholder was thus on notice that the plaintiff sought to hold him personally liable.  

                                                                                                                                                          



Diamond's complaint did not name any of the individual owners of Platinum Jaxx, and  

                                                                                                                                                  



he never sought to join the owners as parties to the suit.   They therefore were not  

                                                                                                                                                  



required - nor did they have the opportunity - to defend themselves individually.  

                                                                                                                                                     



                        Wealso evaluated failuretoplead in Alakayakv.BritishColumbia Packers,  

                                                                                                                                          



Ltd.,  reviewing  a  superior  court  ruling  "that  the  plaintiffs  did  not  properly  plead  

                                                                                                                                              



corporate 'alter ego' claims" and were therefore precluded from conducting discovery  

                                                                                       



            11          211   P.3d   1110,   1124   (Alaska   2009)   (quoting   McCormick   v.   City   of  



Dillingham,   16  P.3d  735,  743  (Alaska  2001)).  



            12         Id.  at   1124-25.  



            13         Id.  



            14         Id.  at   1125.  



            15         Id.  at   1116.  



                                                                          -7-                                                                  7396
  


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

                                 16  

on those claims.                       While we acknowledged that the complaint "did not specifically                                             



request piercing of the corporate veil," we also observed that "it did name the [parent                                                                    



corporations]   as   defendants,   and   it   stated   that   it   would   seek   recovery   from   those  

                                                                                          17   We concluded that because the parent  

defendants for the actions of the subsidiaries."                                                                                                             



corporations had "notice of the conduct for which the opposing party [was] seeking  

                                                                                                                                                         

relief," the plaintiffs' "alter ego" theory was therefore adequately pleaded.18   Alakayak  

                                                                                                                                                       



is  thus  also  distinguishable  because  the  parent  corporations  "were  independently  

                                                                                                                                            



sued  .  .  .  and  the  complaint  expressly  alleged  that  they  were  'responsible  for  the  

                                                                                                                                                                  

liabilities' of their wholly owned subsidiaries."19  Diamond's complaint contains no such  

                                                                                                                                                                



language that would put the individual owners of PlatinumJaxx on notice that they might  

                                                                                                                                                              



be held personally liable.  

                                      



                          In both L.D.G. and Alakayak we relied on McCormickv. City of Dillingham  

                                                                                                                                                   

for the proposition that notice can be sufficient to overcome the failure to plead.20                                                                               In  

                                                                                                                                                                    



McCormick we considered whether a party who originally brought suit on a de facto  

                                                                                                                                                               

                                                                                                                                                           21    We  

partnership theory could later proceed on a piercing the corporate veil theory.                                                                                  

                                                                                                                                              



concluded that because the initial complaint named McCormick as the sole defendant,  

                                                                                                                                           



             16           48 P.3d 432, 459 (Alaska 2002).
                    



             17           Id.  at 460.
   



             18           Id. (quoting McCormick v. City of Dillingham, 16 P.3d 735, 743 (Alaska
  

                                                                                                                                       

2001)).  



             19           Id.
  



             20
          McCormick, 16 P.3d at 743.
  

                                                                         



             21           Id.
  



                                                                                  -8-                                                                          7396
  


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

                                                                                                                                                                                                                                                                   22  

 he   was   on   notice   that   he   might  be   held  personally   liable.                                                                                                                                                                                                 Accordingly,   L.D.G,   



Alakayak , and                                               McCormick  all involved some form of actual notice - in the pleadings,                                                                                                                                                                                            



 to a party to the case - that the plaintiff sought to hold the party liable.                                                                                                                                                                                                                                   



                                                         Here, Diamond's complaint provides no notice to the individual owners of                                                                                                                                                                                                                                 



 Platinum Jaxx that they might be held personally liable.                                                                                                                                                                                        And because the individual                                                    



 owners were not parties to Diamond's suit against Platinum Jaxx, Diamond's February                                                                                                                                                                                                                                                



 2017 letter to Platinum Jaxx's counsel did not provide the owners notice of Diamond's                                                                                                                                                                                                                                      



 intent to pierce the corporate veil.                                                                                                                Being actually named as a party is important.                                                                                                                                                             A  



 named party has the right to assert affirmative defenses, counterclaims, and cross-claims                                                                                                                                                                                                                            



 and to conduct discovery, file motions, and make its own defense at trial.                                                                                                                                                                                                                                      And a named      



 party may be held personally liable for its share of damages.                                                                                                                                                                                            It is difficult to understand                                     



 how Diamond believes he could pierce Platinum Jaxx's corporate veil and obtain a                                                                                                                                                                                                                                                                                   



judgment againstPlatinumJaxx's                                                                                                              individual ownerswhentheywerenot joined                                                                                                                                                 as parties   

 to the action.                                        23  



                                                         Diamond also did not pursue other opportunities to raise his veil piercing  

                                                                                                                                                                                                                                                                                                                                        



 theory.  He presumably became aware of the need to pierce the corporate veil by at least  

                                                                                                                                                                                                                                                                                                                                                       



 February 2017, the date his attorney sent the letter, yet he did not seek to amend his  

                                                                                                                                                                                                                                                                                                                                                             



 complaint to plead a veil piercing theory or to join the individual owners of Platinum  

                                                                                                                                                                                                                                                                                                                                    

 Jaxx as defendants.24  

                                                                                          



                             22                         Id.  



                             23                          Cf.  Alaska R. Civ. P. 19 ("A person . . . shall be joined as a party in the                                                                                                                                                                                                                        



 action if . . . the person claims an interest relating to the subject of the action and is so                                    

 situated that the disposition of the action in the person's absence may . . . as a practical                                                                                                                                                                                                                                     

 matter impair or impede the person's ability to protect that interest . . . .").                                                                                                                                                                                                              



                             24                          See Alaska R. Civ. P. 15(a) ("[A] party may amend the party's pleading  

                                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                   (continued...)  



                                                                                                                                                                                -9-                                                                                                                                                                   7396
  


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

                            Because Diamond did not plead a veil piercing claim, the claim was not                                                                             



adequately raised.                      The individual owners of Platinum Jaxx were not parties to the case                                                                  



and therefore did not receive notice that they might be held personally liable.                                                                                             The  



superior court did not err in precluding this claim for failure to plead.                                                                       We also conclude     



that the superior court did not abuse its discretion in concluding it would be "grossly                                                                             

                                                                                                                                                                        25    We  

prejudicial" to allow Diamond to introduce this theory so late in the proceedings.                                                                                            



affirm the superior court's order precluding Diamond from proceeding on a piercing the  

                                                                                                                                                                               



corporate veil theory.  

                               



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

                                                                                                                                                                                       

                            Evidence Related To Piercing The Corporate veil.  

                                                                                                                                   



                            Diamond argues that the superior court erred by (1) precluding mention of  

                                                                                                                                                                                 



liability insurance and (2) precluding mention of Wallie Scott vierra, a former owner of  

                                                                                                                                                                                 



Platinum Jaxx.  

                     



                            Under Alaska Evidence Rule 411, evidence of liability insurance "is not  

                                                                                                                                                                               



admissible  upon  the  issue  whether  the  person  acted  negligently  or  otherwise  

                                                                                                                                                               

wrongfully."26  

                                                                                                                                                                           

                                 But Diamond argues he "sought to offer the evidence not for the issue  



                                                                                                                                                                                

whether  Platinum  Jaxx  acted  negligently  or  otherwise  wrongfully,  but  rather  to  



                                                                                                                                                                             

demonstrate that it was undercapitalized and subject to corporate veil piercing."  But  



                                                                                                                                                                                       

whether  Platinum  Jaxx  was  undercapitalized  was  not  at  issue  in  Diamond's  case.  



              24            (...continued)  



                                                                                                                                                                                

only by leave of court or by written consent of the adverse party; and leave shall be  

                                                             

freely given when justice so requires.").  



              25            While Diamond first asserted his veil piercing theory in the February 2017  

                                                                                                                                                                           

letter to Platinum Jaxx, it does not appear that he argued this theory before the superior  

                                                                                                                                                                    

court until June 2017 - only a month and a half before trial - in his opposition to  

                                                                                                                                                                                 

Platinum Jaxx's motion to preclude evidence of liability insurance.  

                                                                                                                        



              26            Alaska R. Evid. 411.  

                                                               



                                                                                      -10-	                                                                                7396
  


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

Because a veil piercing claim was not pleaded, and therefore was not at issue, this                                                                                 



                                                                                                                     27  

evidence was not relevant under Alaska Evidence Rule 402,                                                                                                        

                                                                                                                         was not admissible under  

                                        28                                                                                                                   29    The  

                                             and was unfairly prejudicial under Evidence Rule 403.                                                                 

                                                                                                                                                    

                                

Evidence Rule 411, 



superior court did not abuse its discretion by excluding this evidence.  

                                                                                                                        



                          vierra was a former owner of Platinum Jaxx who was convicted in 2008  



of money laundering and drug distribution and forced to forfeit his 25% ownership  

                                                                                                                                                      



interest in the corporation.  Diamond intended to use evidence related to vierra, the  

                                                                                                                                                                     



history of Platinum Jaxx's operation, and its ownership structure to pierce the corporate  

                                                                                                                                                         



veil.  But again, Diamond did not plead this claim and therefore this evidence was not  

                                                                                                                                 



relevant under Evidence Rule 402 and was unfairly prejudicial under Rule 403.  The  

                                                                                                                                                                   



superior court did not abuse its discretion by excluding this evidence.  

                                                                                                                                             



                          Weaffirmthesuperiorcourt'sordersexcludingevidencerelated topiercing  

                                                                                                                                                            



Platinum Jaxx's corporate veil because this evidence was not relevant to the trial on  

                                                                                                                                                                      



Platinum Jaxx's negligence.  

                                  



             C.	           The  Superior  Court  Did  Not  Abuse  Its  Discretion  By  Excluding  

                                                                                                                                                                             

                          Evidence Related To Platinum Jaxx's Reputation.  

                                                                                                            



                           1.	          Media coverage of shootings outside Platinum Jaxx  

                                                                                                                                           



                          Diamond argues that the superior court erred by excluding media evidence  

                                                                                                                                                           



regarding the reputation of Platinum Jaxx.   He asserts that media coverage of prior  

                                                                                                                                                                 



             27	          Alaska R. Evid. 402 ("Evidence which is not relevant is not admissible.").                                            



             28           Alaska R. Evid. 411 ("Evidence that a person was or was not insured                                                                



against liability is not admissible upon the issue whether the person acted negligently or                                                                              

otherwise wrongfully.").  

                     



             29           Alaska R. Evid. 403 ("Although relevant, evidence may be excluded if its  

                                                                                                                                                                       

probative value is outweighed by the danger of unfair prejudice, confusion of the issues,  

                                                                                                                                                               

or misleading the jury . . . .").  

                                                    



                                                                                  -11-	                                                                          7396
  


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

shootings outside Platinum Jaxx demonstrates (1) that Platinum Jaxx had notice that                                                                                                                                                                       



violent acts had occurred, (2) that it was foreseeable that such acts might occur again,                                                                                                                                                           



and   (3)   that   Platinum Jaxx                                                       had  a   duty  to   take   precautions   and   provide   reasonable  



protections to its patrons.                                                   Diamond argues this "evidence would likely have increased                                                                                                  



the jury's allocation of fault to Platinum Jaxx" and that we should reverse the superior                                                                                                                                                     



court's exclusion of this evidence and remand for the court to make specific findings                                                                                                                                                       

under Alaska Civil Rule 52.                                                          30  



                                         The two shootings in question occurred in 2011 and 2012, and both took  

                                                                                                                                                                                                                                        



place outside and off the premises of Platinum Jaxx.   This evidence would not be  

                                                                                                                                                                                                                                                             



relevant to the security measures in place inside Platinum Jaxx over a year later or to the  

                                                                                                                                                                                                                                                             



propensity for violence inside the bar, which is where Diamond's assault took place.  

                                                                                                                                                                                                                                                                         



And Evidence Rule 404 specifically excludes evidence of prior bad acts to show a  

                                                                                                                                                                                                                                                                 

general propensity to act in conformity therewith.31  It was reasonable for the superior  

                                                                                                                                                                      



court to conclude that any relevance of the evidence would likely have been substantially  

                                                                                                                                                                                                                                



outweighed by the risk of unfair prejudice and the potential for the jury to use the  

                                                                                                                                                                                                                                                           

evidence for an improper purpose32  - i.e., to conclude that because Platinum Jaxx may  

                                                                                                                                                                                                                                                         



have been negligent in the past that it was also negligent on the night of Diamond's  

                                                                                                                                                                                                                                   



                    30                  We do not understand why Diamond asks us to remand for the superior                                                                                                                                 



court to make specific findings of fact.                                                                              The relief Diamond would actually need would                                                                                 

be for us to reverse the court's orders and judgment and remand for a new trial.                                                                                                                                                  



                    31                  Alaska R. Evid. 404(b)(1).  

                                                                                          



                    32                  Alaska R. Evid. 403.  

                                                                                          



                                                                                                                             -12-                                                                                                                      7396
  


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

                                33  

assault.                                The superior court did not abuse its discretion by excluding media coverage                                                                                  



evidence.   



                                                         2.                          Cherie Lee Burno's testimony                                                               



                                                         Diamond also challenges the superior court's preclusion of testimony by                                                                                                                                                                                                                                    



Cherie Lee Burno, an employee of Platinum Jaxx during the time period when Diamond                                                                                                                                                                                                                                                      



was assaulted by Bungay.                                                                                       Diamond sought to admit Burno's testimony to demonstrate                                                                                                                                                    



that (1) Platinum Jaxx was a dangerous place, (2) it was on notice of the violence within                                                                                                                                                                                                                                                           



its bar, and (3) its management of the bar was negligent given the foreseeability of harm                                                                                                                                                                                                                                                                 



to a patron.                                           He asserts that her testimony "would likely have increased the jury's                                                                                                                                                                                                                        



allocation of percentage of fault to Platinum Jaxx."                                                                                                                                          



                                                         But Burno was not present at the time of Diamond's assault and therefore                                                                                                                                                                                                        

                                                                                                                                                                                                                                                                                                                                                        34 and  

did not have "personal knowledge of the matter" as required by Evidence Rule 602,                                                                                                                                                                                                                                                                               



 she could not share an opinion "rationally based on [her] perception" as required by  

                                                                                                                                                                                                                                                                                                                                                                   

Evidence Rule 701.35   Of greater significance, her testimony about prior acts of violence  

                                                                                                                                                                                                                                                                                                                                           



                            33                           Cf.Oakly Enters., LLCv. NPI, LLC                                                                                                                  , 354 P.3d 1073,                                                   1083-84(Alaska2015)                                                      



("Oakly Enterprises argues that the environmental report was admissible . . . to show that                                                                                                                                                                                                                                                                      

the spill . . . was due to 'NPI's corporate culture [which] allowed for polluting' . . . .                                                                                                                                                                                                                                                                       

 [But]   [t]he   proposed   use   of   the   [environmental   report]   can  only   reasonably   be  

characterized as to show a propensity - i.e., because NPI was responsible for pollution                                                                                                                                                                                                                                                  

found   at   a   different   location,   it   must   be   responsible   for   the   pollution   on   [another]  

property three years earlier. . . . [T]he superior court, in excluding the report, further                                                                                                                                                                                                                                                       

noted that it would confuse the jury, likely because of its remoteness from the events at                                                                                                                                                                                                                                                                              

issue in terms of both time and geography.                                                                                                                                                For all these reasons, we see no abuse of                                                                                                                                   

discretion in the superior court's exclusion of the report." (third alteration in original)).                                                                                                                                                                                                                                       



                            34                           Alaska R. Evid. 602 ("A witness may not testify to a matter unless evidence  

                                                                                                                                                                                                                                                                                                                                          

is introduced sufficient to support a finding that the witness has personal knowledge of  

                                                                                                                                                                                                                                                                                                                                                                      

the matter.").  

               



                            35                           Alaska R. Evid. 701 ("If the witness is not testifying as an expert, the  

                                                                                                                                                                                                                                                                                                                                                                 

                                                                                                                                                                                                                                                                                                                       (continued...)  



                                                                                                                                                                                -13-                                                                                                                                                                       7396
  


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

within the bar may have been relevant to Platinum Jaxx's notice and duty, but as with                                                     



the media coverage evidence, her testimony would be inadmissible propensity evidence                                                                      



under  Rule   404(b).     It   was   reasonable   for   the   superior   court   to   conclude   that   any  



relevance of her testimony would have been substantially outweighed by the risk of                                                                                     



unfair prejudice and the potential                                     for  the jury to use the evidence for an improper                                 

                 36      The  superior  court  did  not  abuse  its  discretion  by  excluding  Burno's  

purpose.                                                                                                                                                   



testimony.  

                         



             D.	           The  Superior  Court  Did  Not  Abuse  Its  Discretion  By  Awarding  

                                                                                                                                                                             

                          Diamond's Costs Based On Percentage Of Fault.  

                                                                                                                      



                          Diamond argues that the superior court abused its discretion by awarding  

                                                                                                                                                         



his  costs  against  Bungay  and  Platinum  Jaxx  in  accordance  with  each  tortfeasor's  

                                                                                                                                                    



percentage of fault.  He posits that equitable apportionment in fact "would require only  

                                                                                                                                                                   



that Bungay be responsible for costs incurred in proving damages, not those incurred in  

                                                                                                                                                                        



proving Platinum Jaxx's liability."  Because the majority of Diamond's litigation costs  

                                                                                                                                                                  



were associated with proving Platinum Jaxx's liability, not Bungay's, he argues it would  

                                                                                                                                                               



be unjust to require the defaulted defendant to subsidize the defendant which litigated the  

                                                                                                                                                                      



case.  Diamond requests that we reverse the superior court's order denying his motion  

                                                                                                                                                              



for review of the clerk's costs award and allocate the majority of costs to Platinum Jaxx.  

                                                                                                                                                                  



             35            (...continued)  



                                                                                                                                                                        

witness's testimony in the form of opinions or inferences is limited to those opinions or  

                                                                                                                                                              

inferences which are (a) rationally based on the perception of the witness and (b) helpful  

                                                                                                                                                                       

to a clear understanding of the witness's testimony or the determination of a fact in  

issue.").  



             36           If what Diamond really hoped for was to inflame the jury's passion against  

                                                                                                                                                              

Platinum Jaxx, that is precisely the type of improper effect the Evidence Rules are  

                                                                                                                                                                     

intended to prohibit.  See Alaska R. Evid. 403.  

                                                                                    



                                                                                  -14-	                                                                          7396
  


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

                             While Diamond's motion to reallocate costs was filed late and failed to                                                                                      



meet the standard for excusable neglect, the superior court nevertheless reviewed the                                                                                                  



motion on the merits before denying it; the court found that the clerk properly allocated                                                                                  



costs based on the jury award.                                      Under Civil Rule 79, "[i]n a case in which damages are                                                              



apportioned among the parties . . . costs must be apportioned and awarded according to                                                                                                    

                                                                              37  Rule 82(e) provides that fees awarded must "be  

the provisions of Civil Rule 82(e)."                                                                          

apportioned among the parties according to their respective percentages of fault."38   The  

                                                                                                                                                                                      



clerk therefore allocated 80% of the costs to Bungay and 20% of the costs to Platinum  

                                                                                                                                                                          



Jaxx in accordance with the jury's allocation of fault to each party.  

                                                                                                                                       



                             Diamond argues that Civil Rule 94 "permits the relaxation of the [civil]  

                                                                                                                                                                                 

rules to advance justice"39   and that it would be unjust to hold Bungay liable for the  

                                                                                                                                                                              



majority of Diamond's costs associated with litigating against Platinum Jaxx.  We have  

                                                                                                                                                                                    



never held that the superior court has the discretion under Rule 94 to alter the allocation  

                                                                                                                                                                         



of costs if it believes that injustice would otherwise occur, and it is not necessary for us  

                                                                                                                                                                                         



to  do  so  here.                      We  will  assume  without  deciding  that  the  superior  court  has  that  

                                                                                                                                                                                     



discretion.   But under an abuse of discretion standard we will uphold an award of  

                                                                                                                                                                                         

attorney's fees and costs "unless it is manifestly unreasonable."40                                                                              Costs were correctly  

                                                                                                                                                                           



awarded as provided by Rules 79 and 82(e), and we conclude that the superior court's  

                                                                                                                                                           



               37            Alaska  R.  Civ.  P.  79(h).  



               38            Alaska  R.  Civ.  P.  82(e).  



               39            Alaska  R.  Civ.  P.  94  ("These  rules  are designed to facilitate business  and  



advance  justice.   They  may  be  relaxed  or  dispensed  with  by  the  court  in  any  case  where  

it  shall  be  manifest  to  the  court  that  a  strict  adherence  to  them  will  work  injustice.").  



               40             Circle De Lumber Co. v. Humphrey, 130 P.3d 941, 946 (Alaska 2006); see  

                                                                                                                                                                                        

also Dickerson v. Goodman, 161 P.3d  1205, 1207 (Alaska 2007) ("A refusal to apply  

                                                                                                                                                                                  

Civil Rule 94 is reviewed for abuse of discretion.").  

                                                                                      



                                                                                           -15-                                                                                    7396
  


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

cost award was not manifestly unreasonable and did not result in manifest injustice. We                                                                                                                                                                                                                                                                                                                  



affirm the court's order and the costs award.                                                                                                                                      



v.                              CONCLUSION  



                                                               The superior court's pre-trial orders and its post-judgment costs award are                                                                                                                                                                                                                                                                 



AFFIRMED.  



                                                                                                                                                                                                                   -16-                                                                                                                                                                          7396
  

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