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Denardo v. CGI Communication Corp. (8/20/99) sp-5164
Notice: This opinion is subject to correction before publication in
the Pacific 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.
THE SUPREME COURT OF THE STATE OF ALASKA
DANIEL DENARDO, )
) Supreme Court No. S-8705
) Superior Court No.
v. ) 3AN-97-2617 CI
GCI COMMUNICATION CORP., ) O P I N I O N
Appellee. ) [No. 5164 - August 20, 1999]
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Peter Michalski, Judge.
Appearances: Daniel DeNardo, pro se,
Anchorage. Dan K. Coffey, Law Offices of Dan K. Coffey, P.C.,
Anchorage, for Appellee.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, Bryner, and Carpeneti, Justices.
In a suit against his telephone company, a customer
claimed that its failure to reactivate his account prevented him
from entering its call-to-enter sweepstakes and deprived him of
prizes having a total value of $1,020,000. The superior court
granted summary judgment and attorney's fees to the company,
reasoning that the company's tariff barred the customer's claim and
that the claimed damages were too speculative. We affirm. Given
the great improbability that the customer would have won any prize,
we conclude that the customer's claim that the company caused him
damages equal to the value of the prizes is too speculative.
II. FACTS AND PROCEEDINGS
GCI Communication Corporation opened a long-distance
telephone calling card account for Daniel DeNardo in 1984. DeNardo
used the account for seven years and then did not use it for a
considerable period of time. After the account had not been used
for eighteen months, GCI put the account on inactive status. When
DeNardo attempted to use the account again in November 1995, [Fn.
1] a recording told him to call a toll-free number. When he did
so, a GCI customer service representative asked DeNardo to identify
himself by providing his social security number (SSN). GCI claims
its representative also offered DeNardo the option of confirming
his identity by giving his driver's license number or a current
residence address. DeNardo refused and asked to speak to the
customer service representative's supervisor, who confirmed the
In December 1995 DeNardo again called to reactivate his
account; this time, he provided an employer identification number
(EIN). The customer service representative thought the number was
DeNardo's SSN. Because the number was not a valid SSN, GCI
declined to reactivate DeNardo's account.
Two weeks later DeNardo again called GCI; he was told
that the "SSN"he had provided was invalid, and that he would have
to fill out a new credit application to reactivate his account.
DeNardo refused and his account remained inactive.
From September 1995 to January 1996, GCI ran a promotion
called the "Thanks a Million"sweepstakes, in which GCI's
residential customers would be entered in a sweepstakes contest
each time they made a long-distance call through GCI. GCI
customers and non-GCI customers could also enter by submitting a
hand-printed entry containing specified information. GCI
advertised prizes, including interim prizes and a $1,000,000 grand
prize. DeNardo, who claimed to have made one qualifying call
during this period, was not entered in the contest.
DeNardo sued GCI in April 1997. He alleged that he
suffered damages of $1,020,000 because, no longer having access to
GCI's services, he was not permitted to enter the contest. DeNardo
claimed breach of contract, bad faith, and punitive damages. GCI
moved for summary judgment, and the superior court granted GCI's
motion. DeNardo appeals.
A. Standard of Review
We use our independent judgment to review grants of
summary judgment. [Fn. 2] "We will affirm a grant of summary
judgment if the evidence in the record, viewed in the light most
favorable to the non-moving party, fails to disclose a genuine
issue of material fact, and the moving party is entitled to
judgment as a matter of law."[Fn. 3] We may affirm a grant of
summary judgment on any basis appearing in the record. [Fn. 4]
We review a trial court's award of attorney's fees and
costs under the "abuse of discretion"standard. [Fn. 5]
B. Issues Arising under the Alaska and United States
DeNardo's appeal asserts various claims under the Alaska
and United States constitutions. DeNardo did not mention either
constitution or any constitutional provision in his superior court
complaint or his memorandum opposing summary judgment. DeNardo
raised his constitutional claims for the first time in his motion
for reconsideration, and did so there in only a cursory fashion.
Issues raised for the first time in a motion for
reconsideration are untimely. [Fn. 6] Because these issues are not
properly before us on appeal, we decline to consider them. [Fn. 7]
C. DeNardo's Damages Claims
DeNardo claims it was error for the superior court to
conclude that his compensatory damages claim was too speculative
and that punitive damages were unavailable.
1. Compensatory damages
The superior court granted summary judgment to GCI in
part because it considered DeNardo's compensatory damages claim to
be too speculative. It reasoned that the chance could have been
worth as much as the value of first prize and, "much more likely,"
as little as nothing. As we have said before,
a plaintiff alleging breach of contract must
present evidence sufficient to calculate the amount of the loss
caused by the breach. The plaintiff "need not prove the amount of
damages with exact detail, but the evidence must provide a
reasonable basis for the jury's determination."[ [Fn. 8]]
The calculation of the damages DeNardo seeks is not in
itself difficult. He seeks the value of the prizes he claims he
could or would have won if he had been able to enter the
sweepstakes. The amount of each prize was certain.
But that does not mean the judgment should be reversed.
To recover, DeNardo must show that the damages he alleges are not
so remote from the alleged breach as to be conjectural. DeNardo
engages in calculations to demonstrate that the chance was worth
something, but his damages claim is for the value of the prizes,
not the value of the chance to win the prizes. His calculations
concern only the value of the lost chance, and are therefore
irrelevant to his claim. [Fn. 9] The uncertainty here is not in
the amount of damages, but in the possibility any breach of duty by
GCI was a legal cause of the injury DeNardo claims he suffered.
In a case involving the eminent domain taking of mining
property, the Supreme Court of Montana addressed the different
types of speculation in damages assessment. [Fn. 10] Mine owners
there alleged they were entitled to both (1) the surface value of
the land taken, and (2) damages resulting from the difficulty of
conducting future, prospective mining operations on neighboring
land they continued to own. [Fn. 11] The court approved the first
category of damages and disapproved the second. [Fn. 12] It noted:
Throughout this opinion the word
"speculative"has appeared in two senses. In the one sense, it is
used to describe undeveloped property that may have a value due to
mineral, timber, housing, or other potential. A market value for
such property may be shown. The value is speculative, but it is
able to be objectively appraised. . . . The other use of the word
is when in the company of the word "conjectural". In this sense
the meaning is that certain damages to property may not be
recognized by law and compensated for because they are too remote,
obscure, undefinable, problematical, or the like.[ [Fn. 13]]
DeNardo's claim falls into the latter category. Had
DeNardo been able to enter the contest by making 100 telephone
calls, his chances of winning one of the prizes would have been
remote, on the order of 9 out of 50,000. [Fn. 14] This
improbability would have been so great, and the chances of his
winning so remote, that we see no basis for asking a fact finder to
consider whether GCI's alleged breach was a legal cause of injury
to DeNardo. The damages (assuming breach, causation, and injury)
may not themselves be too speculative to calculate, but we cannot
see how DeNardo, as the party bearing the burden of persuasion,
could prove by a preponderance of the evidence that a breach caused
him to suffer the injury he claims: loss of any one of the prizes.
Accordingly, there is no reasonable basis on which to award him the
damages he seeks.
DeNardo cites Van Gulik v. Resource Development Council
for Alaska, Inc., [Fn. 15] to support his contention that these
damages are not speculative. But in that case the plaintiff had
already won the contest, or at the very least had become one of the
two remaining contenders. [Fn. 16] He either had a certain right
to $5,000 (half the grand prize per an equal-split agreement), or
an equal chance at the whole $10,000 grand prize. [Fn. 17] The
probability the plaintiff would win some substantial prize in that
case was far more certain than DeNardo's. Moreover, the
plaintiff's chance at winning did not require any additional
expenditure, unlike the long distance phone calls DeNardo would
have had to make to win.
As we noted in Van Gulik, sec. 348(3) of the Restatement
(Second) of Contracts [Fn. 18] discusses prospective and
conditional damages. [Fn. 19] Section 348(3) observes:
If a breach is of a promise conditioned on a
fortuitous event and it is uncertain whether the event would have
occurred had there been no breach, the injured party may recover
damages based on the value of the conditional right at the time of
the breach.[ [Fn. 20]]
The comment to sec. 348 notes that under this rule, the injured
"has the alternative remedy of damages based on the value of his
conditional contract right at the time of breach, or what may be
described as the value of his 'chance of winning.'"[Fn. 21] But
DeNardo did not seek compensation for his chance of winning; he
sought the value of the prizes.
DeNardo finally contends that GCI affiant Stephanie
Kesler's failure "to produce her expert's report"prejudiced his
case, and prevented him from making his damages more concrete.
Kesler was listed as a lay witness, and made averments in her
affidavit well within the realm of those permitted for lay
witnesses. [Fn. 22] GCI owed no production obligation under Alaska
Civil Rule 26(a)(2) with regard to Ms. Kesler's affidavit.
We affirm GCI's summary judgment.
2. Punitive damages
A punitive damages claim cannot stand alone; because we
reject DeNardo's underlying claim, we also necessarily affirm
summary judgment on his punitive damages claim. [Fn. 23]
Because we affirm GCI's summary judgment on other
grounds, we need not consider whether GCI's tariff protected it
from DeNardo's claims. [Fn. 24]
D. Costs and Attorney's Fees
DeNardo attacks the awards of attorney's fees and costs
as improper. His argument is based on his assumption that we will
overturn GCI's summary judgment. Because we affirm the summary
judgment, we also affirm the awards of attorney's fees and costs.
E. Spoliation of Evidence
GCI destroyed, in the two years following completion of
the sweepstakes, "most of the records"regarding sweepstakes
entries. DeNardo contends that this destruction constitutes
spoliation of evidence. [Fn. 25] GCI responds by asserting that
basic elements of a spoliation claim -- notice of a potential
claim, proximate cause, and damages -- are absent.
Spoliation is by nature a separate tort action. [Fn. 26]
DeNardo's original complaint did not allege spoliation, and he did
not move to amend his complaint to assert a spoliation claim.
DeNardo first raised spoliation in his motion for reconsideration,
where he argued that the destruction of evidence "carries with it
a presumption against defendant's defense, if not allowing an
amendment of the complaint to add the tort of spoliation." The
superior court did not discuss this argument in denying
DeNardo argues on appeal that he should have been given
the opportunity to amend his complaint. But he never moved to
amend his complaint in the superior court. Because he first raised
the spoliation issue in moving for reconsideration, he failed to
preserve the issue in the superior court. The issue is therefore
not properly before us on appeal. [Fn. 27]
For these reasons, we AFFIRM the judgment below.
DeNardo claims he used the account without difficulty in
September and October of 1995, though his own evidence is
inconclusive on this point.
See Baxley v. State, 958 P.2d 422, 428 (Alaska 1998).
See Kooly v. State, 958 P.2d 1106, 1107 (Alaska 1998).
City of Valdez v. Valdez Dev. Co., 523 P.2d 177, 184 (Alaska
See Stadnicky v. Southpark Terrace Homeowner's Ass'n, Inc.,
939 P.2d 403, 405 (Alaska 1997).
Ben Lomond, Inc. v. Schwartz, 915 P.2d 632, 636 (Alaska 1996)
(quoting City of Palmer v. Anderson, 603 P.2d 495, 500 (Alaska
1979)) (citation omitted).
His calculations are also probably wrong. Based on his claim
that he would have made 100 calls, DeNardo reasons he had a 9 in
50,000 (or 1 in 5,555) chance of winning one prize in any of the
three contests. DeNardo argues on appeal that this missed chance
was worth $192.62. But this method does not take into account the
fact that an entrant cannot win two prizes within one contest. The
actual expected value of DeNardo's lost chance at winning one prize
in any of the three contests is closer to $21.
These calculations appear, by and large, to be consistent
with the approach a majority of the court took in Van Gulik v.
Resource Development Council for Alaska, Inc., 695 P.2d 1071, 1073-
74 (Alaska 1971). Other calculations might also be required to
determine the value of a lost chance, potentially including the
cost to DeNardo of meeting the contest entry requirements.
GCI does not argue that DeNardo's ability to enter the
contest by submitting hand-printed entries, without making calls,
has any bearing on the issues raised on appeal.
See State Highway Comm'n v. Antonioli, 401 P.2d 563, 564-66
Id. at 567. Black's Law Dictionary defines "speculative
damages"as "[p]rospective or anticipated damages . . . which
depend upon future developments which are contingent, conjectural,
or improbable." See Black's Law Dictionary 392 (6th ed. 1990).
There were nine prizes total; three of these were final
prizes, and six were preliminary prizes.
695 P.2d 1071 (Alaska 1985).
See id. at 1072.
Restatement (Second) of Contracts sec. 348(3), at 120 (1981).
See id. at 1073.
Id. cmt. d, at 122.
See Alaska R. Evid. 701 (allowing "those opinions or
inferences which are (a) rationally based on the perception of the
witness and (b) helpful to a clear understanding of his testimony
or the determination of a fact in issue."). See also Alaska R.
Evid. 702 (delimiting expert testimony).
See Rutledge v. Alyeska Pipeline Serv. Co., 727 P.2d 1050,
1057 (Alaska 1986).
The tariff provided in part:
The liability of the Company for damages:
arising out of mistakes, omissions, interruptions, delays, errors
or defects in transmission, or failures or defects in facilities
furnished by the Company, occurring in the course of furnishing
service or other facilities and not caused by the negligence of the
customer or; of the Company in failing to maintain proper standards
of maintenance and operation and to exercise reasonable personnel
supervision; shall in no event exceed an amount equivalent to the
proportioned charge to the customer for the period of service
during which such mistake, omission, interruption, delay or error
or defect in transmission, or failure or defect in facilities
We recognized spoliation of evidence as a tort in Hazen v.
Municipality of Anchorage, 718 P.2d 456, 463-64 (Alaska 1986).
See id. at 463.
See Stadnicky v. Southpark Terrace Homeowner's Ass'n, Inc.,
939 P.2d 403, 405 (Alaska 1997).