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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Jeff Graham v Municipality of Anchorage (8/9/2019) sp-7397

Jeff Graham v Municipality of Anchorage (8/9/2019) sp-7397

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

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                       THE SUPREME COURT OF THE STATE OF ALASKA                                       

JEFF  GRAHAM,                                                         )  

                                                                      )     Supreme  Court  No.  S-16905  

                                Appellant,                            )  


                                                                      )     Superior Court No. 3AN-15-05301 CI  

           v.                                                         )  


                                                                      )     O P I N I O N  


MUNICIPALITY OF ANCHORAGE,                                            )  


                                                                            No. 7397 - August 9, 2019  

                                Appellee.                             )  



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


                      Judicial District, Anchorage, Eric A. Aarseth, Judge.  


                      Appearances:             Jeffrey  J.  Jarvi,  Anchorage,  for  Appellant.  


                      Samuel  C.  Severin,  Assistant  Municipal  Attorney,  and  


                      Rebecca A. Windt-Pearson, Municipal Attorney, Anchorage,  


                      for Appellee.  


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


                      and Carney, Justices.  


                      STOWERS, Justice.  



                      Jeff Graham prevailed in a civil suit against the Municipality of Anchorage  


for breach of contract and breach of the implied covenant of good faith and fair dealing.  


He was  awarded partial  attorney's  fees under  Alaska  Civil Rule  82(b)(1).   Graham  


argues that he should have instead been awarded full fees and costs under his union's  


collective  bargaining  agreement  with  the  Municipality.                                      Because  the  fee  recovery  

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

provision in the agreement is not applicable to Graham's case, we affirm the superior                                                                                                                                                                                                              

court's order denying Graham's motion for full attorney's fees and costs.                                                                                                                                                                                                           

II.                      FACTS AND PROCEEDINGS                                  

                                                  Jeff Graham is employed as a firefighter/EMT by the Anchorage Fire                                                                                                                                                                                              

Department (AFD).                                                              He has worked                                                   for   AFD since 1995 and                                                                            has held                            his current   

position since 2003.                                                         After taking AFD's engineer promotional exam in 2010, Graham                                                                                                                                                           

wrote a letter to the AFD fire chief criticizing the subjective nature of the test.                                                                                                                                                                                                                In 2012   

Graham failed the interview portion of the engineer exam.                                                                                                                                                                           He subsequently filed a                                             

complaint with the Alaska State Commission for Human Rights, alleging discrimination                                                                                                                                                                                         

on   the   basis   of   his   race   (Korean)   and   age   (48).     He   also   petitioned   his   union,   the  

International Association of Firefighters Local 1264 (the Union), to file a grievance                                                                                                                                                                                                        

against the Municipality of Anchorage on his behalf, under the Union's Collective                                                                                                                                                                                                         

Bargaining Agreement (CBA) with the Municipality.                                                                                                                                                      1  

                                                  TheCommissioninvestigated Graham'sdiscrimination claimbut officially  


closed his case in September 2013, as the investigation did not find substantial evidence  


to support his allegations. Similarly, the Union investigated "the facts and circumstances  


 surrounding [Graham's] performance on the engineer test," but it declined to file a  


grievance against the Municipality to challenge Graham's exam results.  In June 2012  


the Union's counsel informed Graham: "You have exhausted your contractual remedies  


under Article vII of the [CBA].  You are free, at your own cost, to retain counsel and  


 seek any other remedies to which you believe you may be entitled."  


                         1                        ThepurposeoftheCBAis "thepromotionofharmonious                                                                                                                                                                 relations between  

theMunicipality                                               and theUnion, theestablishment                                                                                          ofan equitableand peaceful procedure                                                                   

for the resolution of differences, the establishment of rates of pay, hours of work, and                                                                                                                                                                                                                            

other terms and conditions of employment."                                                                     

                                                                                                                                                            -2-                                                                                                                                                 7397

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                    In February 2015 Graham filed suit against the Municipality, alleging  


breach of contract, breach of the implied covenant of good faith and fair dealing, and  


discrimination, among other legal theories.  The case proceeded to trial, and in August  


2017 a jury returned a verdict that the Municipality caused harmto Graham"by violating  


the express terms of the [CBA]" and "by violating the implied promise of good faith and  


fair dealing in the [CBA]." The jury also found that Graham's complaints about how the  


2012 engineer exam was structured "were a motivating factor in him failing the oral  


board."        Graham  was  awarded  $667,000  in  damages  for  lost  wages  and  benefits,  


increased income taxes, and past emotional distress.  


                    In October 2017 Graham moved for an award of full attorney's fees of  


$258,960.31 and full costs of $38,962.45 under section 7.4.1 of the CBA. Section 7.4.1  


provides that "[i]n the event the prevailing party must seek enforcement in court of the  


arbitrator's decision, the expenses of such efforts shall be borne by the losing party."  


Graham also presented two alternative theories for recovery:  enhanced attorney's fees  


under Alaska Civil Rule 82(b)(3) or partial attorney's fees under Civil Rule 82(b)(1).  


                    In November 2017 the superior court awarded Graham $71,667 in partial  


fees under Civil Rule 82(b)(1) and $15,616.06 in partial costs under Alaska Civil Rule  


79(f).  The court denied his theory of recovery under section 7.4.1 of the CBA, finding  


that  a  "[p]lain  reading  of  the  CBA  allows  full  fees  only  to  enforce  an  arbitrator's  


decision. Implicitly there has already been a fully contested hearing. The full fees would  


only  be  for  the  enforcement  action  not  the  fully  contested  hearing."  (Emphasis  in  


original.)        The  court  also  denied  Graham's  request  for  enhanced  fees  under  Rule  


                                                               -3-                                                         7397

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                             Graham appeals the superior court's denial of his full attorney's fees and                                    

costs under section 7.4.1 of the CBA.                                             2  





                             "We  review  awards  of  attorney's  fees  for  abuse  of  discretion," 



"[i]nterpretation of an attorney's fees clause in a contract is . . . a question of law."                                                                                            We  



apply "our independent judgment in making such an interpretation." 

Iv.	           DISCUSSION  


               A.	           The Superior Court Did Not Err By Denying Graham's Motion For  


                             Full Attorney's Fees And Costs Under Section 7.4.1 Of The CBA.  


                             Graham argues that the superior court's interpretation of section 7.4.1 of  


the CBA was "erroneously strict and narrow" and that we should broadly construe  


section 7.4.1 to encourage efficient litigation and to "give relief to employees who must  


enforce CBA rights in court after [the Municipality] and the [U]nion deny arbitration."  


In  contrast,  the  Municipality  argues  that  the  plain  language  of  section  7.4.1  "only  


provides recovery of attorney's fees to the Municipality or [the Union] in the event that  


an arbitration agreement needs to be enforced."  Because Graham is not a party to the  

               2             Graham does                     not   dispute   that   Civil   Rule   82(b)(1)   was   an   appropriate  

alternative theory of recovery, nor does he dispute the superior court's calculation of fees                                                                                         

under this rule.                    He argues solely that the court should have awarded full fees under                                                                         

section 7.4.1 of the CBA. He no longer argues for enhanced fees as an alternative theory                                                                                        

of recovery.   

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


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


               4             Johnson v. Olympic Liquidating Tr., 953 P.2d 494, 497 (Alaska 1998).  


               5             Id. ; see also Larsen v.  Municipality of Anchorage, 993 P.2d 428, 431  


(Alaska 1999) ("Contract interpretation presents a question of law that we review de  



                                                                                           -4-	                                                                                   7397

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CBA and neither party is seeking to enforce an arbitration agreement, the Municipality                                                                             

argues that section 7.4.1 is not applicable to this case at all.                                                                     We agree.   

                              1.	           Section   7.4.1   of   the   CBA   applies   only   to   enforcement   of   an  

                                            arbitration decision between the Municipality and the Union.                                                                     

                              The goal of contract interpretation "is to 'give effect to the reasonable                                                                


expectations of the parties.' "                                                                                                                                                          

                                                                         We determine "the parties' reasonable intentions by  


looking 'to thelanguageofthedisputed provisionand other provisions,relevant extrinsic  



evidence, and case law interpreting similar provisions.' "                                                                      Furthermore, "interpretation  


of a contract term does not take place in a vacuum, but rather requires consideration of  



the provision and agreement as a whole." 


                                            a.	            Language of the disputed provision and other provisions  


                              Graham argues that "a contract provision allowing a prevailing party to  


recover its reasonable attorney's fees trump[s] Civil Rule 82's provision for partial  



                  The Municipality does not dispute this legal concept but argues that the plain  


language of section 7.4.1 is unambiguous and that it is simply inapplicable to Graham's  

               6              Stepanov v. Homer Elec. Ass'n                                      ., 814 P.2d 731, 734 (Alaska 1991) (quoting                                 

Mitford v. de Lasala                          , 666 P.2d 1000, 1005 (Alaska 1983)).                                

               7             Flint Hills Res. Alaska, LLC v. Williams Alaska Petroleum, Inc., 377 P.3d  


959, 975 (Alaska 2016) (quoting W. Pioneer, Inc. v. Harbor Enters., Inc., 818 P.2d 654,  


656 (Alaska 1991)).  


               8             Id.  (quoting Mahan v. Mahan, 347 P.3d 91, 95 (Alaska 2015)); see also  


Schaub v. K & L Distribs., Inc., 115 P.3d 555, 563 (Alaska 2005) ("When interpreting  


collective bargaining agreements, courts 'will if possible give effect to all parts of the  


instrument and an interpretation which gives a reasonable meaning to all its provisions  


will be preferred to one which leaves a portion of the writing useless or inexplicable.' "  


(quoting 20 SAMUEL   WILLISTON   & R                                                 ICHARD   A. L                ORD, A T             REATISE ON THE                        LAW OF  


CONTRACTS  55:20 (4th ed. 2001))).                              


               9              Tufco, Inc. v. Pac. Envtl. Corp., 113 P.3d 668, 674 (Alaska 2005).  


                                                                                             -5-	                                                                                   7397

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case.    Whether the language of section 7.4.1 is ambiguous depends on whether "the                                                                            

disputed   terms  are   reasonably   subject   to   differing   interpretation   after   viewing   the  


contract as a whole and the extrinsic evidence surrounding the disputed terms."                                                                                


                          Section 7.4.1 of the CBA provides in full: "In the event the prevailing party  


must seek enforcement in court of the arbitrator's decision, the expenses of such efforts  


shall be borne by the losing party."  As the superior court found, the plain language of  


section 7.4.1 indicates that it applies only to recovery of attorney's fees and costs for  


enforcement of an arbitration decision.   It is undisputed that an arbitrator was never  


involved in Graham's case and that an arbitrator's decision was never made.   This  


provision is therefore inapplicable to Graham's case.  


                          The Municipality argues that the overall structure of Article 7 of the CBA  


also supports this conclusion.  Article 7 outlines a three-step grievance procedure for a  


claim by the Municipality or the Union.   The first step is for either party to file a  


grievance, which is "defined as a claim by the Union or the Municipality, alleging a  


violation of th[e] Agreement."  If a grievance has been filed but it cannot be resolved  


internally between the Municipality and the Union, then either party may opt to submit  


the grievance to an arbitrator. Section 7.4 provides that in such a scenario, the "decision  


of the arbitrator shall be final and binding on all parties," and "[t]he losing party shall  



pay all of the expenses and fees of the arbitrator."  Section 7.4.1 is a subsection of 7.4 

- it provides additional recovery of fees if "the prevailing party must seek enforcement  


             10           N. Pac. Processors, Inc. v. City & Borough of Yakutat, Alaska                                                            , 113 P.3d     

575, 579 (Alaska 2005) (quoting   Wessells v. State Dep't of Highways                                                                  , 562 P.2d 1042,   

 1046 (Alaska 1977)).       

             11           See Marathon Oil Co. v. ARCO Alaska, Inc., 972 P.2d 595, 604 (Alaska  


 1999)  (concluding  that  a  provision's  location  in  a  contract  is  relevant  to  its  



                                                                                 -6-                                                                          7397

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. . . of the arbitrator's decision."                          Section 7.4.1 is only triggered after a party pursued the                                         

full   three-step   grievance   procedure,   an   arbitration   occurred,  the   arbitrator   issued   a  

decision, and the losing party did not abide by the arbitrator's decision.                                                                None of these     

steps occurred in Graham's case.                       

                          Interpretation                of       section           7.4.1         also        "requires             consideration                 of  

                                                          12   As the Municipality points out, Graham is not a party  

the . . . agreement as a whole."                                                                                                                            

to the CBA.  The CBA is an agreement between the Union and the Municipality, and it  


recognizes the Union "as the sole and exclusive bargaining agent for the purpose of  


establishing . . . conditions of employment."  Article 7 provides the procedure for the  


Union and the Municipality to resolve a grievance between the two parties; it does not  


provide a comparable process for an individual employee to pursue a grievance against  


                                                                                 13  Although the Union may bring a grievance  

the Municipality independent of the Union.                                                                                                         


on behalf of an individual employee, that did not occur in this case.   The grievance  


procedure  in  Article  7  was  therefore  never  invoked  and  section  7.4.1  was  never  


triggered.  The overall structure of the CBA and Article 7 make clear that section 7.4.1  


was not intended to apply to recovery of fees and costs for litigation brought by an  


individual employee.  


                                      b.           Extrinsic evidence  


                          To interpret a contract, we also consider relevant extrinsic evidence such  


as the "language and conduct of the parties, the objects sought to be accomplished[,] and  


             12          Flint Hills Res. Alaska, LLC                          , 377 P.3d at 975 (quoting                       Mahan, 347 P.3d at                 


             13           Section 7.7 does provide an "Employees' Bill of Rights" to ensure that  


individual rights of employees are not violated, but it does not provide a process for an  


individual employee to pursue a grievance against the Municipality.  


                                                                                -7-                                                                         7397

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the surrounding circumstances at the time the contract was negotiated."                                                                  If there is no       

extrinsic   evidence,   "our   analysis   of   this   issue   must   rely   on   the   language   of   the  




                         Graham briefly asserts that the Union "gave him a right-to-sue letter and  


authorized him to enforce the rights in the [CBA]."  But Graham's characterization of  


this letter is not accurate.  The Union's June 2012 letter to Graham stated explicitly that  


Graham had exhausted his contractual remedies under Article 7 of the CBA and any  


further action he took against the Municipality would be independent of the Union and  


at his own cost.  The Union did not assign him the rights to pursue this claim under the  


CBA, as Graham posits.  


                         Accordingly, Graham did not submit extrinsic evidence that supports an  


interpretation of section 7.4.1 contrary to its plain meaning.  And as discussed above,  


section  7.4.1  is  unambiguous  - it  is  not  "reasonably  susceptible  to  both  asserted  




                                     c.           Case law interpreting similar provisions  


                         We have not previously been asked to consider a fee-recovery provision in  


this  exact  context.                   But  our  case  law  interpreting  grievance  procedures  in  similar  


collective  bargaining  agreements  supports  our  conclusion  that  section  7.4.1  is  not  

applicable to Graham's case.  Collective bargaining agreements are contracts between  

             14          Peterson v. Wirum                  , 625 P.2d 866, 870 n.7 (Alaska 1981) (quoting                                             Pepsi  

Cola Bottling Co. v. N.H. Ins. Co.                             , 407 P.2d 1009, 1013 (Alaska 1965)).                      

             15          Marathon Oil Co., 972 P.2d at 604.  


             16          Larsen v. Municipality of Anchorage, 993 P.2d 428, 431 (Alaska 1999)  


(quoting Johnson v. Schaub, 867 P.2d 812, 818 (Alaska 1994)).  


                                                                              -8-                                                                       7397

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a union and an employer;                          employees typically do not have the power to pursue the                                          


grievance   procedures   provided   in   these   agreements   independent   of   their   union.                                                           

Graham has not cited to any cases that would support a different conclusion.  


                                   d.	         Conclusion  

                       We  have  considered  the  plain  language  of  section  7.4.1,  the  overall  


structure of Article 7, the CBA as a whole, and case law interpreting similar agreements;  


it is clear that section 7.4.1 is not applicable to Graham's case.  The superior court did  


not err by denying Graham's motion for recovery of full attorney's fees and costs under  


the CBA.  


                       2.	         Section 7.4.1 of the CBA cannot  be construed so broadly as  


                                   to encompass enforcement of CBA rights in court by individual  



                       Grahamalso argues that section 7.4.1 should be broadly construed to "give  


relief to employees who must enforce  CBA rights in court."   He asserts that "[the  


            17          Collective-Bargaining Agreement                            , B  LACK 'S   LAW  DICTIONARY  (10th ed.   

2014) ("A contract between an employer and a labor union regulating employment                                                    

conditions, wages, benefits, and grievances.").           

            18         SeeBernard v. Alaska Airlines,Inc., 367 P.3d 1156, 1163-64(Alaska2016)  


(concluding that "[t]he [collective bargaining] agreement thus emphasizes repeatedly  


that . . . only appeals to arbitration taken by the union . . . are contemplated," and that  


"[t]here is nothing in the agreement's plain language that would lead an employee to  


believe that the Board was authorized to consider any appeals other than those that were  


'properly submitted to it' by the union"); Schaub v. K & L Distribs., Inc., 115 P.3d 555,  


561-62  (Alaska  2005)  (concluding  that  collective  bargaining  agreement  "clearly  


require[d] union participation in steps two and three [of the grievance procedure]" and  


that union had "sole power" under agreement to pursue full grievance procedure); Casey  


v. City of Fairbanks, 670 P.2d 1133, 1137, 1139 (Alaska 1983) (finding "nothing on the  


face of the [collective bargaining agreement] that requires or even allows an employee  


to unilaterally file a written grievance with the Union and the City," and that employee  


"cannot  simply  avail  himself  of  the  [collective  bargaining  agreement's]  arbitration  


procedure without the Union's involvement").  


                                                                         -9-	                                                                  7397

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

Municipality] takes dues out of each paycheck of AFD employees for . . . the efficient                                                                                   

litigation of valid employment grievances in arbitration" and that he was denied access                                                                                               

to   the   efficient   arbitration   procedures   provided   in   the   CBA.     He   contends   that   the  

attorney's fees clause in the CBA should therefore be broadly construed to "encourage                                                                                     

[the Municipality]                          to comply                 with   its legal duties .                           .   . [and] to               efficiently arbitrate   

employment claims out of court."                                               

                              Graham particularly focuses on this court's precedent of "constru[ing]                                                                 

contractual attorney's fees provisions broadly, and in a way that encourages efficient                                                                                           

                         19     He  also  argues  that  Alaska  has  a  "  'strong  public  policy  in  favor  of  


arbitration,' [and that] we apply a presumption in favor of arbitrability."20                                                                                            While these  


principles are valid, they are not relevant to his case.  Our case law does not support  


prioritizingabroadconstructionofcontractual attorney's fees provisions to theexclusion  


of all other rules of contract interpretation,  such  as the plain meaning rule.21                                                                                                        And  


Graham was not able to access the efficient arbitration procedures provided in the CBA  


because the Union declined to pursue a grievance on his behalf.  We are not persuaded  


that we should ignore the plain and unambiguous language of the CBA; section 7.4.1  


               19             O'Connell v. Will                       , 263 P.3d 41, 46 (Alaska 2011).                            

               20             Ahtna, Inc. v. Ebasco Constructors, Inc. , 894 P.2d 657, 662 (Alaska 1995)  


(quoting Univ. of Alaska v. Modern Constr., Inc., 522 P.2d 1132, 1138 (Alaska 1974)).  


               21             See O'Connell, 263 P.3d at 46-47 (reiterating our previous holdings that  


"where the parties intend it, contractual attorney's fees clauses must be construed as  


calling  for  fee shifting  at all [court] levels," and  concluding  that such  "contractual  


attorney's  fees  clauses  .  .  .  [also]  provide  for  attorney's  fees  incurred  during  


post-judgment enforcement proceedings"; but noting that a broad construction  was  


appropriate because "the plain languageofthecontract[at issue] indicates that the parties  


intended to provide for all reasonable attorney's fees").  


                                                                                             -10-                                                                                        7397

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

cannot be construed so broadly as to encompass the recovery of fees and costs for  


litigation brought by an individual employee.  


v.       CONCLUSION  

                   We AFFIRM the superior court's order denying Graham's motion for full  


attorney's fees and costs under section 7.4.1 of the CBA.  


                                                          -11-                                                    7397

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