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J. Bozarth v. Atlantic Richfield Oil Co. (5/18/92), 833 P 2d 2
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Notice: This is subject to formal correction before
publication in the Pacific Reporter. Readers are
requested to bring typographical or other formal errors
to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, in order that
corrections may be made prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
JOHN V. BOZARTH, )
) Supreme Court No. S-3990
Appellant, )
) Trial Court No.
) 3AN-88-9462 Civil
v. )
) O P I N I O N
ATLANTIC RICHFIELD OIL )
COMPANY, INC., )
)
Appellee. ) [No. 3843 - May 18, 1992]
______________________________)
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage,
J. Justin Ripley,
Judge.
Appearances: Don Clocksin, Wagstaff,
Pope & Clocksin, Anchorage, for Appellant.
Russellyn S. Carruth, Michael W. Seville,
Burr, Pease & Kurtz, Anchorage, and Lloyd C.
Loomis, Atlantic Richfield Company, Los
Angeles, for Appellee.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton, and Moore,
Justices.
MOORE, Justice.
MATTHEWS, Justice, with whom COMPTON, Justice, joins,
dissenting in part.
John Bozarth, a pilot for Atlantic Richfield Company
(ARCO), was fired after he refused to participate in ARCO's
random drug-testing program. Bozarth sued, claiming that the
dismissal was really in retaliation for whistle-blowing. Bozarth
had repeatedly complained about unsafe practices in ARCO's
aviation department.
Shortly after filing suit, Bozarth applied for state
unemployment insurance benefits. These were denied on the
grounds that Bozarth's discharge was due to work-related
misconduct. The denial was upheld by the Appeals Tribunal of the
Employment Security Division. No appeal of this decision was
taken.
After discovery, both parties moved for summary
judgment. ARCO's motion was granted. The court based its
decision on two alternative grounds. The first was collateral
estoppel. Bozarth was bound by the decision of the Appeals
Tribunal which established that his dismissal was the result of
his misconduct. Second, even if Bozarth was not bound by the
decision of the Appeals Tribunal, there was no genuine issue of
material fact. Bozarth failed to introduce admissible evidence
that his firing was based on any reason other than his refusal to
take the drug test. The trial court stated:
Because [Bozarth] and [ARCO] were
represented at the Employment Security
Division Appeals Tribunal, because the issues
argued here are identical to those argued
before the Appeals Tribunal, and because
[Bozarth] did not appeal the Tribunal's final
decision on the termination issue, the Court
concludes that [Bozarth] is collaterally
estopped from litigating before this forum
the circumstances leading to his termination
and that his refusal to participate in the
drug-testing program was misconduct. DeNardo
v. State, 740 P.2d 453 (Alaska 1987).
[ARCO] prevails even without resort
to a collateral estoppel analysis, for there
exists no genuine issue of fact regarding the
circumstances leading to [Bozarth's]
termination. Although [Bozarth] argues that
he and his immediate supervisor, John
Schmidt, were in conflict over [Bozarth's]
participation in the National Guard and
[Bozarth's] "whistle-blowing", he fails to
raise a genuine issue of material fact
thereby. Camron Cooper, the ARCO supervisor
who made the decision to terminate [Bozarth],
maintains she was not aware of [Bozarth's]
conflict with Schmidt and based her decision
to terminate [Bozarth] solely upon
[Bozarth's] refusal to participate in
[ARCO's] drug-testing program. [Bozarth]
dismisses Cooper's testimony as ludicrous,
but such dismissal is not sufficient. The
Cooper testimony stands unrebutted in this
record by any opposing admissible evidence.
No genuine issue of material fact is created.
ARCO then moved for attorney's fees, seeking an award
equal to seventy percent of the attorney's fees incurred,
$156,425. The court found a slight overcharge, and determined
that a reasonable fee for the services performed by ARCO's
attorneys was $152,000. The court then awarded fifty percent of
this amount, $76,000, as partial compensation under Civil Rule
82. In addition, the court awarded $14,600 in costs.
On appeal, Bozarth claims that the court erred in
granting summary judgment to ARCO because the decision of the
Appeals Tribunal of the Employment Security Division should not
have been given preclusive effect, and because there were genuine
issues of material fact regarding the reasons for Bozarth's
termination.1 In addition, Bozarth claims that the award of
attorney's fees is excessive and that the cost award is the
product of several errors.
We affirm the decision of the trial court on the
grounds that there were no genuine issues of material fact. The
record demonstrates that the decision to fire Bozarth was made by
Camron Cooper, a senior vice-president of ARCO, and that she made
that decision solely on the basis of his refusal to participate
in ARCO's drug-testing program. Cooper asserted that she knew
nothing about Bozarth's safety complaints or about other
conflicts with his immediate supervisors. This assertion stands
unrebutted in the record.
A private employer may, with notice, require its
employees to take a test for drugs. Luedtke v. Nabors Alaska
Drilling, Inc., 768 P.2d 1123 (Alaska 1989). Failure of an
employee to comply with a reasonable order of his employer is
cause for discharge. Central Alaska Broadcasting v. Bracale, 637
P.2d 711 (Alaska 1981). Bozarth was ordered to submit to a drug
test after being notified of ARCO's drug-testing program, and he
refused to submit. Under the above authorities, this failure was
a legitimate basis for Bozarth's discharge.
Opposing the award of attorney's fees, Bozarth argues
that some of ARCO's attorneys billed at an excessive hourly fee.
Bozarth cites Municipality of Anchorage v. Baugh Construction and
Engineering Co., 722 P.2d 919 (Alaska 1986). To calculate an
award under Civil Rule 82, the trial court in that case reduced
attorney's fees billed at $200 per hour for in-trial work and
$175 for out-of-trial work, to $120 and $105 respectively. The
issue in Baugh, however, was not whether $175 per hour was
excessive. The issue was whether the trial court made a
mathematical error in calculating the hourly rate it would allow.
Baugh does not stand for the proposition that attorneys may not
reasonably charge $175 per hour.
Hourly fees of $165-$175 were charged by the more
senior members of the law firm defending ARCO. These fees were
represented to be the standard fees for those attorneys. No
persuasive evidence has been presented that they are
unreasonable. Further, because much work was done by firm
associates, the average hourly fee charged ARCO was about $136
per hour. This rate likewise has not been shown to be
unreasonable.
In the context of this case, while the court's award of
attorney's fees seems high, we are unable to say that the work
performed by ARCO's attorneys was not necessary or appropriate,
or that billing $152,000 for their services was unreasonable.2
Awarding fifty percent of this amount falls comfortably within
the partially compensatory standard of Civil Rule 82. Brunet v.
Dresser Olympic Div. of Dresser Indus., Inc., 660 P.2d 846, 847-
48 (Alaska 1983); Stevens By Park View Corp. v. Richardson, 755
P.2d 389, 396 (Alaska 1988). Therefore, the award of attorney's
fees is valid.3
With respect to costs, Bozarth challenges the allowance
of costs for certain unspecified depositions, arguing that
"[d]eposition costs may be awarded only where the depositions are
actually used at trial, or where depositions were actually relied
upon in ruling on a pre-trial motion." Civil Rule 79(b) allows
as awardable costs "the necessary expense of taking depositions
for use at trial and producing exhibits . . . ."
In Kaps Transport, Inc. v. Henry, 572 P.2d 72 (Alaska
1977), we interpreted Civil Rule 79(b) broadly to allow an award
for the cost of depositions taken in good faith which were
reasonably necessary, even if they were not actually used at
trial. We noted that depositions might be used to support a pre-
trial motion, or for cross-examination, or to preserve the
testimony of a witness who might become unavailable. Id. at 78.
Implicit in our discussion in Kaps is the conclusion that it is
not possible to make a clear distinction between depositions
taken for discovery purposes and depositions taken in preparation
for trial. That is illustrated by this case. ARCO contends
credibly that all depositions were taken for purposes such as
preservation of testimony, cross-examination, and impeachment, as
well as discovery. We conclude the actual use standard which
Bozarth advocates is in conflict with the reasonably necessary
standard of Kaps, and that the award of costs met the latter
standard and was not an abuse of discretion.
AFFIRMED.
MATTHEWS, Justice, joined by COMPTON, Justice,
dissenting in part.
The framers of the Alaska Constitution established the
superior court as the trial court of general jurisdiction for our
state. Alaska Const. art. IV, 3. One purpose of the superior
court is to serve as an institution to which the people of Alaska
may resort when they believe that they have suffered a legal
wrong. Crushing attorney's fees such as the $76,000 award which
today's opinion approves so seriously limit this purpose that
they are, in my opinion, fundamentally at odds with our
constitution.
The general right of access to civil courts was recog
nized by this court in Bush v. Reid, 516 P.2d 1215, 1218-21
(Alaska 1973), where we invalidated on due process and equal
protection grounds a statute which precluded a person on parole
from bringing a civil action. In so doing, we relied primarily
on Boddie v. Connecticut, 401 U.S. 371 (1971), in which the
United States Supreme Court held that indigents could not be
deprived of access to divorce courts by the imposition of filing
fees which they were unable to pay. Because the parolee's
lawsuit in Bush arose out of a personal injury suffered in an
automobile accident, it was distinguishable from the divorce
litigation in Boddie. We found, however, that this distinction
should not dilute the force of the Boddie rationale, especially
as a matter of state constitutional law. Bush at 1219-20.
Similarly, in Patrick v. Lynden Transport, Inc., 765 P.2d 1375
(Alaska 1988), we recognized the right of access to the courts as
declared in Boddie and rejected the view that Boddie should be
limited to divorce cases. Id. at 1378-79.
We have also recognized the right of access to the
courts in the specific context of court awarded attorney's fees.
In Malvo v. J.C. Penney Co., 512 P.2d 575, 588 (Alaska 1973), we
reversed a $10,500 award which represented the prevailing
litigant's full attorney's fees. After noting that the purpose
of Civil Rule 82 "is to partially compensate a prevailing party
for the costs to which he has been put in the litigation in which
he was involved," id. at 587 (quoting Preferred General Agency
of Alaska, Inc. v. Raffetto, 391 P.2d 951, 954 (Alaska 1964)), we
stated:
If a successful litigant were to receive
full reimbursement for all expenses incurred
in the case with no requirement of
justification and no consideration of the
"good faith" nature of the unsuccessful
party's claim or defense, there would be a
serious detriment to the judicial system.
For where in order to seek judicial remedies,
a plaintiff must risk liability for the full
amount of attorney's fees the other side sees
fit to incur, it takes little imagination to
foresee that the size of a party's bank
account will have a major impact on his
access to the courts.
Id. (emphasis supplied). We then cited Boddie and quoted the
following language from that opinion:
[A] cost requirement, valid on its face,
may offend due process because it operates to
foreclose a particular party's opportunity to
be heard. The State's obligations under the
Fourteenth Amendment are not simply general
ized ones; rather, the State owes to each
individual that process which, in light of
the values of a free society, can be
characterized as due.
Malvo at 587. Having referred to the constitutional issue, we
declined to reach it because, as we put it, "it is `manifestly
unreasonable' to establish a policy under Civil Rule 82 that
would enable a store owner to receive such a sizeable allowance
for attorney's fees against a party who has brought suit in good
faith." Id.
Although the discussion in Malvo was directed to a
trial court's award of full fees, much of the rationale is also
applicable to substantial awards of partial fees against
litigants of limited resources. If a $10,500 attorney's fee
award is so great as to "foreclose a particular party's
opportunity to be heard" it has that effect independent of
whether it represents the prevailing party's full, or merely
partial, fees.
Former Chief Justice Boochever recognized this in his
dissent in Sloan v. Atlantic Richfield Co., 552 P.2d 157, 161-62
(Alaska 1976). In Sloan, the trial court ordered the widow of a
deceased construction worker to pay attorney's fees of $10,750 in
a wrongful death case, about half of the full fees requested by
the prevailing party. Id. at 161. Citing the reasoning of
Malvo, Mrs. Sloan argued that the award against her was so large
it would have a chilling effect on the use of our courts by many
holding bona fide claims. A majority of the court rejected this
argument, noting, "we do not view this case as falling within an
exceptional category." Sloan at 161. Chief Justice Boochever
dissented, stating that if Mrs. Sloan had "[f]oreknowledge that
such a sizeable sum would be awarded as attorney's fees in the
event of her losing" it "could well have constituted an
impediment to access to the courts preventing litigation of an
issue which she had every right to have resolved." Id. at 162.
Noting the concern expressed in Malvo "that access to the courts
might be governed by the size of one's bank account,"id., Chief
Justice Boochever stated that in applying Civil Rule 82, trial
courts "must give consideration to the nature of the claim and
the need for making courts available to resolve disputes without
the imposition of intolerable burdens." Id.
I agree with Chief Justice Boochever that in deter
mining what fees constitute a "reasonable amount" under Civil
Rule 82(a)(1), trial courts must consider whether the award is so
great that it imposes an intolerable burden on a losing litigant
which, in effect, denies the litigant's right of access to the
courts.
The guidelines for making such a determination are not
easy to express. Chief Justice Boochever in Sloan indicated that
"other than stating broad policy considerations,"he was "unable
to delineate specific guidelines for a trial judge to follow in
awarding attorney's fees." Id. He then settled on the
"admittedly . . . arbitrary figure"of $2500 as "the maximum that
I think could be awarded without unduly limiting access to the
courts under the facts of this case." Id.
While it is difficult to prescribe guidelines for the
trial courts to follow in this area, trial courts should at least
consider whether an award may be so onerous to the losing
litigant that it unduly limits the constitutional right of
access. Over time, the process of case-by-case adjudication will
yield more specific directions. I suggest presently that in
wrongful discharge claims the award of attorney's fees not exceed
some fraction of the former employee's annual income.
This case is only one of a number of cases which we
have had occasion to review recently involving very large awards
of attorney's fees. See Zeilinger v. Sohio Alaska Petroleum Co.,
823 P.2d 653 (Alaska 1992) (superior court awarded $80,470 to
employer in wrongful discharge case -- reversed on appeal as
excessive); Van Huff v. Sohio Alaska Petroleum Co., appeal
pending, No. S-4373 (superior court awarded $117,251 in
attorney's fees in favor of employer in wrongful discharge case).
In each of these cases an individual citizen believing in good
faith that his or her legal rights had been violated pursued
dispute resolution in the superior court in the manner
contemplated by our constitution. The citizen lost and was
subjected to a financially ruinous award of attorney's fees.
If the superior court is to serve its constitutional
purpose as a forum available to all the people, superior court
judges must consider whether an award of attorney's fees will
impair the constitutional right of access to the courts. In the
present case it is evident that no such consideration was given.
Therefore, I would reverse the award of attorney's fees and
remand for further proceedings in accordance with the views
expressed herein.
_______________________________
1 Both parties assume for the purposes of this point on
appeal that Bozarth could be discharged only for cause.
2 Bozarth sought an award of compensatory damages in excess
of $500,000; numerous pre-trial motions were made; and at least
twenty-one depositions were taken.
3 The award of $76,000 in attorney's fees against a
dismissed employee is nonetheless disturbing. It tends to cast
doubt on the continued desirability of Civil Rule 82. The rule
is grounded on basic fairness. One who has been forced to
litigate in order to vindicate one's rights should be reimbursed
in part for litigation expenses. It may be, however, that costs
of litigation have increased to such an extent that the prospect
of having to pay Rule 82 fees deters a broad spectrum of our
populace from the voluntary use of our courts. We have asked our
Civil Rules Standing Committee to review this question. In this
case, however, we can conceive of no principled basis by which
the award of attorney's fees granted by the superior court can be
reduced or vacated.
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