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Van Huff v. Sohio Alaska Petroleum Co. (6/26/92), 835 P 2d 1181
<![CDATA[
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
ALBERT M. VAN HUFF, )
) Supreme Court File No.
Appellant, ) S-4373
) Superior Court File No.
v. ) 3AN-85-2816 Civil
)
) O P I N I O N
SOHIO ALASKA PETROLEUM )
COMPANY, SOHIO CONSTRUCTION )
COMPANY, and THE STANDARD ) [No. 3857 - June 26, 1992]
OIL COMPANY, )
)
Appellees. )
______________________________)
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage, Karen L. Hunt, Judge.
Appearances: Robert C. Erwin, Erwin &
Smith, Anchorage, for Appellant. Terrance A.
Turner and Scott J. Nordstrand, Owens &
Turner, P.C., Anchorage, for Appellees.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton and Moore, Justices.
MOORE, Justice.
MATTHEWS, Justice, with whom COMPTON, Justice, joins,
dissenting in part.
I. INTRODUCTION
Albert Van Huff filed a complaint against Sohio Alaska
Petroleum Company ("SAPC"), Sohio Construction Company ("SCC"),
and the Standard Oil Company ("SOCO"), alleging that he was
terminated in violation of his employment contract and as a
result of the malice and ill will of his supervisors. After a
jury trial conducted by Judge Karen Hunt, the jury returned a
verdict in favor of the defendants.
Van Huff appeals, alleging five errors. He claims that
the superior court employed an improper method of jury selection,
improperly admitted certain alleged hearsay statements, issued an
improper jury instruction, erred in refusing to grant a new trial
for alleged juror misconduct, and abused its discretion in
awarding attorney's fees. We affirm.
II. FACTUAL AND PROCEDURAL BACKGROUND
In February 1985, Van Huff sued SAPC, SCC, and SOCO
(collectively "Sohio") for wrongful discharge, seeking
compensatory and punitive damages. In its defense, Sohio argued
that Van Huff was a marginal employee who was terminated during a
reduction in force which resulted from a good faith business
decision.
Prior to trial, Sohio filed a motion requesting a
ruling that the SCC supervisors responsible for Van Huff's
termination could testify concerning the opinions expressed to
them by Van Huff's supervisors about Van Huff's work performance.
Sohio argued that these opinions were admissible evidence of the
state of mind of the supervisors who rated Van Huff, and were
therefore admissible under Alaska Rule of Evidence 803,
paragraphs (3) and (23), the "state of mind exception" and
"general exception" to the hearsay rule. Despite Van Huff's
objections, the superior court granted this request in its
entirety. During trial, Sohio was permitted on several occasions
to question SCC supervisors about the opinions which Van Huff's
supervisors had expressed to them.
Sohio also filed a pretrial motion requesting the trial
court to employ the "struck jury"method of selecting jurors.
Despite Van Huff's objections, this motion was granted and the
court utilized the "struck jury"method.
At the conclusion of the trial, the trial court issued
many instructions to the jury. Van Huff objected to the form of
instruction number 31, which provided:
In response to Albert Van Huff's
second claim that Sohio Construction Company
breached his [sic] employment contract with
him by wrongfully terminating him before his
retirement, Sohio Construction Company (1)
denies that the termination was wrongful and
(2) claims that it had a legitimate business
purpose for the termination. The legitimate
business purpose it claims is an anticipated
significant reduction in amount of work
available to the Sohio Construction Company.
An employer may terminate an
employee if it has a fair or honest reason
based upon a business purpose which the
employer acts on in good faith.
An employer's termination decisions
are based upon a legitimate business purpose
if you conclude that management acted upon
information which reasonable minds might
accept as adequate to support its
conclusions. You are not permitted to
substitute your judgment for that of Sohio
Construction Company even if you would have
acted differently had it been up to you.
In order for Sohio Construction
Company to win on its claims, you must decide
it is more likely true than not true that its
reason for terminating Albert Van Huff is a
legitimate business purpose.
Otherwise, you must decide for
Albert Van Huff on his second claim that
Sohio Construction Company wrongfully
terminated his employment before he reached
retirement at age 62.
Van Huff argued that this instruction failed to explain that the
business purpose claimed by SCC as a defense must be
"reasonable," and that SCC's termination of Van Huff must have
been honestly done for that purpose. Judge Hunt overruled this
objection because "[b]oth of those are already in the
instruction."
The jury returned a verdict of no liability. After
each juror had been polled, juror Vernon Henrickson rose and
stated that improprieties had occurred during jury deliberations.
The superior court immediately sequestered the jurors, ordered
them not to talk to one another, and conducted an extensive voir
dire of each juror concerning the matters raised by Henrickson.
Henrickson, the first juror examined, testified that
juror Randall Butts had expressed frustration on Saturday morning
over the possibility of continuing deliberations past Saturday
afternoon because Butts was starting a new job and needed to be
at work on Monday. Henrickson suggested that Butts changed his
vote during deliberations from a position in favor of Van Huff to
one supporting Sohio in order to expedite a verdict. Henrickson
also testified that he overheard Butts say that his wife was
"going to work for Sohio or ARCO within a week."
Butts, the next juror examined, testified that he had
been frustrated by the difficulty the jury was having in reaching
a verdict, but that he had not felt any pressure to reach a
verdict by a certain time. He originally agreed with Van Huff
that Sohio had breached the covenant of good faith and fair
dealing, but was later convinced of Sohio's position and
therefore changed his vote. Butts stated that his wife was
working at ARCO and "might be transferring next week to Sohio,"
but did not discuss this with other jurors until after a verdict
had been reached.
Judge Hunt and counsel for both parties then questioned
the other jurors individually. Some jurors remembered Butts'
statement that he did not want deliberations to continue past the
weekend, but these jurors did not believe that Butts was
influenced by this desire because he continued to actively
discuss the issues. Some jurors also remembered that Butts had
said that his wife was being transferred to Sohio during the week
after the conclusion of the trial. These jurors stated that they
were not influenced by that fact and did not believe that it
influenced Butts. Several jurors remembered that Henrickson had
threatened the jury with a mistrial if his position was not
adopted by the other jurors. Van Huff filed a motion
for a new trial, alleging juror misconduct. Judge Hunt denied
this motion, and subsequently entered a final judgment in
November 1990. Sohio then requested an award of costs and
attorney's fees. Sohio claimed that it had incurred $351,854.55
in actual legal fees, and requested an award of sixty percent of
that amount. Van Huff opposed the motion for attorney's fees,
claiming that Sohio's counsel had charged for unnecessary work,
and that Sohio should not be reimbursed for more than twenty
percent of its legal fees. Judge Hunt awarded Sohio thirty
percent of its claimed actual legal fees, $117,251.52. This
appeal followed.
III. DISCUSSION
A. Did the superior court err by using the
"struck jury"method of jury selection?
Van Huff first argues that the superior court abused
its discretion by using the "struck jury" method of jury
selection. He argues that the struck jury method is inconsistent
with Alaska Rule of Civil Procedure 47(d) because that rule
provides for the exercise of peremptory challenges as to jurors
in the box, and under the struck jury method peremptory
challenges are exercised before jurors are seated in the box.1
He also claims that the struck jury approach limited his control
over the selection of jurors, and that he was improperly forced
to exercise all of his peremptory challenges.2
Although not a constitutional right, "[t]he persistence
of peremptories and their extensive use demonstrate the long and
widely held belief that peremptory challenge is a necessary part
of trial by jury." Swain v. Alabama, 380 U.S. 202, 219 (1965),
overruled on other grounds, Batson v. Kentucky, 476 U.S. 79
(1986). The method for exercising peremptory challenges
depends upon the method of jury selection. The Second Circuit
discussed the traditional "jury box"and "struck jury"selection
methods in United States v. Blouin, 666 F.2d 796 (2d Cir. 1981):
Under what might be called the "jury
box"system, twelve members of the array are
selected by lot to enter the jury box;
counsel for each side then exercise
challenges for cause and their allotted
number of peremptory challenges, in some
prescribed pattern of alternation, against
those seated in the jury box and against
those drawn to replace any of the first
twelve who have been challenged. When both
sides have either used or waived their
allotted challenges, the twelve members of
the venire then in the jury box become the
petit jury. Under the "struck jury"system,
an initial panel is drawn by lot from those
members of the array who have not been
challenged and excused for cause; the size of
this initial panel equals the total of the
number of petit jurors who will hear the case
. . . , plus the combined number of
peremptories allowed to both sides . . . .
Counsel for each side then exercise their
peremptory challenges, usually on an
alternating basis, against the initial panel
until they exhaust their allotted number and
are left with a petit jury of twelve.
Id. at 796-97. The struck jury method "has its roots in ancient
common law heritage,"and is now available in many states for
both criminal and civil cases. Swain v. Alabama, 380 U.S. at 217-
18.
We reject Van Huff's argument that the struck jury
method is inconsistent with Rule 47(d). That rule provides that
"[a] party who waives peremptory challenge as to the jurors in
the box does not thereby lose the challenge but may exercise it
as to new jurors who may be called." While this rule seems to be
directed to the jury box method of choosing jurors, for it refers
to the replacement of a challenged juror in the box by another
potential juror, the rule does not require usage of the jury box
method.3 Since Rule 47(e) gives the trial court discretion to
set procedures for the exercise of peremptory challenges, that
rule must not be read to prohibit usage of the struck jury
method.
We also reject Van Huff's argument that the struck jury
method limited his control over the selection of jurors.
Although the jury box method allows more control over the
rejection of specific jurors in the petit jury, the struck jury
method better allows a party to shape an entire jury. "By
permitting full comparative choice among a panel of twenty-eight
prospective jurors, the _struck jury_ system lets the parties
make the most effective use of their challenges, in the sense
that through their choices they are able to determine from the
initial panel not only who will not serve but also who will serve
as the petit jury." Blouin, 666 F.2d at 798. See also United
States v. Sams, 470 F.2d 751, 754 (5th Cir. 1972) ("It is
difficult to conceive of a fairer method of giving the defendant
an opportunity to make a full choice of the range of the venire
of 32 persons . . . ."); Swain, 380 U.S. at 217-18 ("Since
striking a jury allowed both sides a greater number of challenges
and an opportunity to become familiar with the entire venire
list, it was deemed an effective means of obtaining more
impartial and better qualified jurors."). Because the struck
jury method is, overall, at least as effective as the jury box
method in terms of selecting the jury as a whole, the superior
court did not abuse its discretion in using the struck jury
method.
Van Huff's final argument, that he was improperly
forced to exercise all of his peremptory challenges, lacks merit.
The struck jury method does not require a party to exercise all
of its peremptory challenges. If one party does not exercise all
of its challenges, resulting in more jurors than are needed, the
judge may choose a jury from the potential jurors not challenged.
See United States v. Ricks, 802 F.2d 731 (4th Cir. 1986).
B. Did the superior court err in admitting
out-of-court statements made by third
parties to Van Huff's supervisors?
Van Huff claims that the superior court erroneously
overruled his objections to the admission of the testimony of SCC
supervisors concerning the opinions of other SCC supervisors.
This testimony was the subject of the pretrial order allowing the
introduction of the "opinions of SCC's supervisors and contract
and contractor personnel concerning Van Huff's job performance
and relative job performance, which were relied upon by SCC
supervisors in rating and ranking him." The bases for this
pretrial ruling were Alaska Rule of Evidence 803, paragraphs (3)
and (23), the "state of mind exception" and the "general
exception"to the hearsay rule. Van Huff does not challenge the
pretrial ruling, but instead argues that Sohio failed to show the
circumstances under which the statements were made, and thus
failed to establish a proper foundation for the admissibility of
hearsay testimony pursuant to Rule 803(3).
Sohio argues that Van Huff's assertions are irrelevant
because the third-party statements were not hearsay, since those
statements were not offered to prove the truth of the matter
asserted. Citing International Longshoremen's & Warehousemen's
Union v. Juneau Spruce Corp., 189 F.2d 177 (9th Cir. 1951),
aff'd, 342 U.S. 237 (1952), Sohio argues that the opinions were
admissible to show that the supervisors in charge of rating Van
Huff acted reasonably and in good faith. If Van Huff wanted to
limit the impact of those statements, Sohio argues, he should
have requested a limiting instruction pursuant to Civil Rule
51(a). Sohio also claims that the disputed evidence was merely
cumulative of other testimony introduced at trial, and therefore
could not have adversely affected the jury's decision. See In re
D.J.A., 793 P.2d 1033, 1035-36 n.2 (Alaska 1990) ("In determining
whether an erroneous evidentiary ruling was harmless, the court
shall put itself in the position of the jury to determine
whether, as reasonable persons, any error committed probably
affected their verdict.").
We find Sohio's arguments persuasive. The contested
statements were not hearsay because they were introduced as proof
of the state of mind of the supervisors that selected Van Huff
for termination, and not as proof of the truth of the matter
asserted in those statements. To the extent that the pretrial
ruling implied that Sohio was required to establish a foundation
for the admission of the statements under Rule 803(3), that
ruling was erroneous. Because Van Huff did not request a
limiting instruction, he cannot now assign as error the court's
failure to instruct that the statements were to be considered
only as evidence of the reasonableness of Van Huff's ratings, and
not as evidence of Van Huff's poor performance.
C. Did the superior court err in giving
jury instruction number 31?
Van Huff claims that the superior court improperly
instructed the jury as to Sohio's economic necessity defense
because jury instruction number 31 failed to define "legitimate
business purpose." Regardless of whether he properly objected to
this error, Van Huff posits, the error requires a new trial.
Under Alaska Rule of Civil Procedure 51(a), "[n]o party may
assign as error the giving or the failure to give an instruction
unless the party objects thereto before the jury retires to
consider its verdict, stating distinctly the matter to which the
party objects and the grounds of the objection." See Girves v.
Kenai Peninsula Borough, 536 P.2d 1221, 1223 (Alaska 1975)
("Civil Rule 51(a) is intended to ensure that a trial judge is
clearly made aware of the precise nature of the alleged error.").
The record indicates that Van Huff did not object
during trial that instruction number 31 did not define
"legitimate business purpose." Instead, Van Huff objected to
that instruction because it failed to explain that the business
purpose claimed by SCC as a defense must be "reasonable," and
that SCC's termination of Van Huff must have been honestly done
for that purpose. Because Van Huff now raises an objection which
is entirely different from those he voiced at trial, we do not
consider his objection.4
D. Did the superior court err by denying
Van Huff's motion for a new trial
based upon alleged juror misconduct?
Van Huff argues that the superior court abused its
discretion by denying Van Huff's motion for a new trial based
upon alleged juror misconduct. He apparently believes that
Butts' statements that he did not want the jury deliberations to
continue past Saturday, and that "his wife was going to work the
following week for Sohio or ARCO,"indicated Butts' bias and also
prejudiced the other jurors.
The standard of review applicable to a superior court's
denial of a motion for a new trial based upon alleged juror
misconduct is the abuse of discretion standard. West v. State,
409 P.2d 847, 852 (Alaska 1966). This court "will not disturb a
trial court's decision on [a motion for a new trial] except in
exceptional circumstances to prevent a miscarriage of justice."
Buoy v. Era Helicopters, Inc., 771 P.2d 439, 442 (Alaska 1989).
In West v. State, we explained under what circumstances
juror misconduct should result in a new trial.5 Chief Justice
Nesbett wrote:
It is the overwhelming weight of
authority that a juror generally cannot
impeach the jury's verdict by his testimony
or affidavit. Public policy supporting this
rule is well expressed in McDonald v. Pless
[283 U.S. 264, 267 (1915)] where the United
States Supreme Court refused to permit jurors
to testify that they had arrived at their
verdict arbitrarily and unjustly by using the
quotient formula. . . . The court observed
that any detriment to a party resulting from
the rule is outweighed by the benefit
realized by preventing the tampering with or
harassment of juries.
Exceptions to the general rule have
been made and it has been held that the type
of misconduct which may impeach a verdict is
fraud, bribery, forcible coercion or any
other obstruction of justice. Whether the
verdict should be set aside and a new trial
ordered rests in the sound discretion of the
trial judge, but generally the verdict should
stand unless the evidence clearly establishes
a serious violation of the juror's duty and
deprives a party of a fair trial.
West v. State, 409 P.2d at 852 (footnotes omitted). In Fickes v.
Petrolane-Alaska Gas Serv., Inc., 628 P.2d 908 (Alaska 1981), we
identified three factors to be considered in determining whether
a party was deprived of a fair trial:
First, if the party asserting prejudice
had known the true facts, is it probable that
it would have challenged the juror? Second,
did the improper comment merely go toward a
collateral matter, e.g., the general
credibility of a witness, or did it go to the
essence of a claim or defense? Third, viewed
objectively, was the probable effect of the
comment prejudicial?
Id. at 911 (citations and footnotes omitted).
Butts' alleged bias and the alleged impact of his
statements upon the other jurors do not warrant impeaching the
verdict, because Butts' actions do not constitute severe juror
misconduct and Van Huff was not deprived of a fair trial. There
is no evidence in the record to support an allegation of fraud,
bribery, forcible coercion or obstruction of justice, the types
of misconduct with which West was concerned. As such, the
threshold test of West was not met by Van Huff. In addition, our
consideration of the Fickes factors strongly suggests that the
juror misconduct alleged by Van Huff did not deprive him of a
fair trial. We therefore find that the superior court did not
abuse its discretion in denying Van Huff's motion for a new
trial.
E. Did the superior court err in
awarding attorney's fees?
Van Huff's final claim of error involves a two-pronged
attack upon the superior court's award of attorney's fees to
Sohio. The court awarded Sohio $117,251.50 in attorney's fees
pursuant to Alaska Rule of Civil Procedure 82. Van Huff claims
that this award was excessive, and that Rule 82 violates the due
process clauses of the state and federal constitutions.
Van Huff's constitutional argument is that if Rule 82
is used to award attorney's fees against good-faith plaintiffs,
the risk of incurring a large attorney's fee award will deter
many plaintiffs from bringing suit, effectively depriving these
litigants of access to the courts. Using his case as an example,
he claims that it is unfair to expect an unemployed laborer to
pay the attorney's fees of a large corporation after litigation
of a non-frivolous wrongful termination claim.6
We reject Van Huff's constitutional argument for the
same reasons we rejected that argument in Stepanov v.
Gavrilovich, 594 P.2d 30, 37 (Alaska 1979). The argument
"completely ignores the financial burden that such plaintiffs
impose upon those who are forced to defend against such actions
in equal good-faith." Id. We understand that attorney's fees
can be very burdensome, but we do not believe that Rule 82, as
applied in this case, violates the state or federal
constitutional guarantees of due process of the law.7
We also reject Van Huff's argument that the attorney's
fee award was excessive.8 As Sohio notes, a large fee was
required because the case was actively pending for over five
years, there was extensive pretrial discovery, numerous complex
legal issues were briefed and argued before the trial court, the
trial lasted thirteen days, and Sohio won a total victory in the
case. Judge Hunt therefore did not abuse her discretion in
awarding 30 percent of Sohio's actual fees, particularly when one
considers that Van Huff opposed Sohio's request for 60 percent of
its actual fees with a request that the court award 20 percent of
the actual fees.9
AFFIRMED.
MATTHEWS, Justice, with whom COMPTON, Justice, joins,
dissenting in part.
In the dissenting opinion which I wrote in Bozarth v.
Atlantic Richfield Oil Company, Inc., __ P.2d __, Op. No. 3843
(May 18, 1992), I cited the superior court decision in the
present case as an example of a disturbing trend of awarding
financially ruinous attorney's fees against good faith losing
litigants. Accordingly, and for the reasons expressed in my
dissent in Bozarth, I would reverse the award of $117,251 in
attorney's fees against Van Huff and remand for entry of an award
calculated with due consideration to the right of access to the
courts.
_______________________________
1. AS 09.20.090 provides in part: "The prospective jurors
shall be examined, challenged, and sworn as provided by rules of
the supreme court."
2. Alaska Rule of Civil Procedure 47(e) provides that
"[t]he court has discretion to set procedures for the exercise of
challenges and for the replacement of challenged jurors . . . ."
Accordingly, this court employs an abuse of discretion standard
of review in examining the method of jury selection utilized by
the trial court.
3. The fact that Rule 47(d) refers to a "box"does not make
that rule inconsistent with the struck jury method. As Judge
Hunt noted during jury selection, it would have been possible to
seat the twenty-two jurors who had been passed for cause in the
jury box, although the jury box would have been quite crowded.
4. Van Huff argues that this court held in Reader v. Ghemm
Co., 490 P.2d 1200 (Alaska 1971), that a trial court has a duty
to provide the jury with a complete statement of those factors to
be considered by the jury when considering the principal defense
at trial, despite the lack of a specific objection under Rule
51(a). Actually, we held that Reader's objection that the
instruction "does not correctly state the law" adequately
preserved his right to urge error in the instruction, despite the
fact that the replacement instruction he had proposed during
trial was no better than the instruction to which he objected.
Id. at 1202 n.1.
5. Van Huff urges this court to apply the test articulated
in the recent Alaska Court of Appeals case, Swain v. State, 817
P.2d 927 (Alaska App. 1991). That case dealt with the question
of whether a juror's personal knowledge of inadmissible
extraneous evidence warranted a new trial. Writing for the
court, Chief Judge Bryner concluded that for purposes of
determining the influence on a juror of her exposure to
potentially prejudicial extraneous matter, a reviewing court must
apply an objective test and is precluded from considering
evidence of the subjective impact of the extraneous matter on the
juror. Id. at 931-33.
Because Van Huff does not allege that the jury in the
present case was tainted by prejudicial extraneous matter, but
instead that a juror was biased and made statements likely to
affect the other jurors, the Swain test should not be applied.
6. Van Huff stated that he was unemployed for almost two
years following his discharge, his condominium was foreclosed,
and he now earns $36,000 per year. He alleges that it will take
him ten years to repay the attorney's fee award if he pays
$12,000 plus interest per year.
7. Van Huff urges this court to apply the reasoning in
Crisp v. Kenai Peninsula School District, 587 P.2d 1168, 1169
(Alaska 1978), partially overruled by Rosen v. State Bd. of Pub.
Accountancy, 689 P.2d 478 (Alaska 1984), to his case. In Crisp,
we held that attorney's fees could not be assessed against a
public school teacher whose dismissal from his job was upheld by
the trial court after a hearing to determine if dismissal was
justified. An important reason for our willingness to relax Rule
82's application was that Crisp had exercised his statutorily
guaranteed right to contest his dismissal in the courts. We also
explicitly noted that our decision was influenced by the law that
a tenured teacher "has an expectation of continued employment
that is in the nature of a property interest and must, therefore,
be afforded certain elemental due process rights before being
deprived of that interest." Id. at 1170 n.7. We concluded that
"[i]f some lesser interest were involved, our conclusion might be
different." Id. Rosen overruled Crisp "[i]nsofar as Crisp
purports to establish a rule of law applicable to all cases where
there exists the right or opportunity for a de novo review of an
administrative proceeding, or where an important right is being
asserted . . . ." Id. at 482.
We decline to apply Crisp in this case because we do
not believe that the strict application of Rule 82 violated Van
Huff's due process rights.
8. "The power to award attorney's fees is within the
discretion of the trial court, and this court will not interfere
absent a clear abuse of discretion." Stevens v. Richardson, 755
P.2d 389, 396 (Alaska 1988).
9. Van Huff does not argue on appeal that Sohio's counsel
billed excessive attorney hours or exaggerated its actual
attorney's fees. Van Huff raised these arguments before the
trial court.
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