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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Domke v. Alyeska Pipeline Service Co., Inc. (06/16/2006) sp-6018
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,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| KENNETH DOMKE, | ) | |
| ) Supreme Court No. S- 10885 | ||
| Appellant, | ) | |
| ) Superior Court No. | ||
| v. | ) 3AN-01-3644 CI | |
| ) | ||
| ALYESKA PIPELINE SERVICE | ) O P I N I O N | |
| CO., INC., CHAMPION | ) | |
| TECHNOLOGIES INC., | ) No. 6018 - June 16, 2006 | |
| LARRY (LAWRENCE | ) DISBROW, | ) |
| and MATT (MATTHEW | ) | ) |
| KNICKREHM, | ) | |
| ) | ||
| Appellees. | ) | |
| ) | ||
Appeal from the
Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Sen K. Tan,
Judge.
Appearances: Arthur S. Robinson and Eric
Derleth, Robinson & Associates, Soldotna, for
Appellant. Cynthia L. Ducey, Delaney, Wiles,
Hayes, Gerety, Ellis & Young, Inc.,
Anchorage, for Appellees.
Before: Bryner, Chief Justice, Matthews,
Fabe, and Carpeneti, Justices. [Eastaugh,
Justice, not participating.]
BRYNER, Chief Justice.
I. INTRODUCTION
In this appeal from a judgment on his claims for
wrongful termination as an employee of Champion Technologies,
Inc., Kenneth Domke seeks a new trial on damages, disputes the
superior courts rulings on issues involving vicarious liability
and allocation of fault, and challenges the jurys award on the
defendants counterclaims for conversion and unjust enrichment.
We vacate the judgment in part and remand for entry of a modified
judgment, holding that Domkes motion for a judgment
notwithstanding the verdict as to vicarious liability should have
been granted; that further proceedings are necessary to determine
whether Champions counterclaims are time-barred; and that the
jury should not have been allowed to allocate fault to Domke on
his claims for tortious interference with his employment
contract.
II. FACTS AND PROCEEDINGS
In March 1997, Champion Technologies, Inc., hired
Kenneth Domke as a consultant to advise . . . Champion personnel
. . . with the objective of selling Champions chemical products
to oil, gas, pipeline and refinery operators. That October,
Champion offered Domke at-will employment as project manager on
BPO-213, a contract between Champion and Alyeska Pipeline Service
Co., Inc., under which Champion provided corrosion inhibitors and
engineering services for the Trans-Alaska Pipeline. Domke
accepted this position.
Although his salary and position had changed, an
accounting error resulted in Domke receiving five additional
paychecks from his original consulting position, covering the
period from November 21 to March 18, 1998. Domke deposited four
of the five overpayments, returning the last.
Alyeskas steward for BPO-213 was Larry Disbrow, a
senior corrosion engineer. Dealings between Disbrow and Domke
quickly soured. Domke claimed that Disbrow falsified a corrosion
report and, when Domke refused to sign the report, retaliated by
aggressively directing Domkes day-to-day work, assigning Domke
impossible tasks, and bec[oming] angry on occasion, all of which
became more frequent as time went on. But according to Alyeska,
Domke was uncooperative, routinely missed work, and threatened to
sue Disbrow for violating Alyeskas internal co-employment policy
whenever Disbrow requested his help on contract-related tasks.
In the summer of 1998, at least in part because of
Domke and Disbrows deteriorating relationship, Domke was demoted
from his position as project manager by Matt Knickrehm, his
Champion supervisor. On October 1 Disbrow sent Knickrehm an e-
mail stating Ken Domke and I have experienced a number of what I
would categorize[] as communications problems. Disbrow went on
to say:
In the best interest of the corrosion
inhibitor program and our working
relationship, I think that Champion should
[e]ffect a change. Because of the
coemployment issue, I cannot tell you what
change to make. I hope that you can make a
change that will improve the working
relationship between myself, as the Alyeska
steward of the Champion contract, and
Champion Technologies, Inc.
Knickrehm interpreted this as a request to remove Domke
from the BPO-213 contract, but not a demand to terminate Domkes
employment at Champion. Knickrehm suggested to Disbrow that
Domke be allowed to continue to work on BPO-213 for ninety more
days, while an alternative position was found for him within
Champion. Disbrow asked that Domke be chaperoned while he
continued to work on BPO-213 because Disbrow was concerned about
Domkes hostility.
In late October 1998 Disbrow complained to Knickrehm
that Domke had arrived to work in Valdez unchaperoned. Domke
claims that he was ordered to go to Valdez alone and that when
Disbrow found out that he was in Valdez, Disbrow went ballistic
again and demanded that I be pulled off the contract immediately.
Domke was terminated on November 2, 1998. The parties dispute
whether Disbrow and Alyeska requested or influenced Domkes
ultimate termination by Champion.
On January 20, 2000, Domke sued Champion, Alyeska,
Disbrow and Knickrehm, alleging (1) that Alyeska and Disbrow had
tortiously interfered with his Champion employment contract; (2)
that Alyeska, Disbrow, Champion and Knickrehm had conspired to
interfere with the same contract; and (3) that Champion and
Knickrehm breached the implied covenant of good faith and fair
dealing in terminating his employment. Domke later amended his
complaint to include allegations of breach of contract and of
tortious retaliatory discharge in violation of public policy for
whistleblowing.
Champion counterclaimed on February 28, 2001, for
conversion, assumpsit, unjust enrichment, and breach of contract
against Domke for retaining the five overpayments he received
after leaving his consulting position. Champion alleged that it
only discovered that Domke intended to keep the overpayments
after Domke brought suit.
Domke denied these counterclaims and moved for summary
judgment against Champion, arguing that its counterclaims were
barred by the statute of limitations. The court found that the
counterclaims were compulsory and thus related back to the date
of Champions answer. The court also noted, in the alternative,
that there was a genuine issue of material fact as to when
Champion discovered all the elements of its cause of action. The
court subsequently granted summary judgment motions to dismiss
Domkes conspiracy claim as to Alyeska and his request for non-
economic damages against Champion.
On January 28, 2002, the defendants made an offer of
judgment for $150,000 plus prejudgment interest, costs calculated
under Alaska Rule of Civil Procedure 79, and attorneys fees
calculated pursuant to the schedule for contested with trial
under Alaska Rule of Civil Procedure 82(b)(1). Domke rejected
this offer, and the case proceeded to a month-long trial
beginning April 22, 2002. After hearing Domkes case, the court
entered a directed verdict dismissing Domkes claims against
Knickrehm, finding that Knickrehm could not be held personally
liable because Domke had conceded that Knickrehm acted at all
times within the scope of his employment. The jury found that
Disbrow had interfered with Domkes employment contract, that
Champion had breached the implied covenant of good faith and fair
dealing as Domkes employer, but that Domke was thirty percent at
fault for the interference with his contract. The jury awarded
Domke $10,000 in economic and $5,600 in non-economic damages. It
also found in favor of Champions counterclaims for unjust
enrichment and conversion, awarding Champion $19,600 in damages
but reducing the award to reflect that Champion was forty percent
at fault on the counterclaims.
On post-trial motions, the court found that the
pretrial offer of judgment exceeded the jurys verdict;
accordingly, the court entered final judgment in favor of the
defendants for $157,376 in attorneys fees and $54,148.16 in
costs. Domke appeals.
III. DISCUSSION
A. Post-Trial Motions
After the jury returned its verdict, Domke moved for a
new trial on the issue of damages and for a judgment
notwithstanding the verdict to hold Alyeska vicariously liable
for Disbrows tortious interference. The court denied these
motions, and Domke challenges these rulings on appeal. We
consider each ruling in turn.
1. Motion for new trial on damages
Domke initially asserts that the superior court erred
by denying him a new trial on the issue of damages. A
dissatisfied litigant may move for a new trial in the interests
of justice under Alaska Civil Rule 59(a). Denial of a motion for
a new trial lies in the sound discretion of the trial court.1 We
will affirm a denial order entered under Rule 59(a) if the
evidence, viewed in the light most favorable to the non-moving
party, provides any basis for the jurys decision.2 Conversely,
we will reject a jurys award of damages and order a new trial
only when the evidence supporting the jurys conclusion is so
completely lacking or slight and unconvincing as to make the
verdict plainly unreasonable and unjust.3
Here, the jury awarded Domke $10,000 in economic
damages for Champions breach of the implied covenant of good
faith and fair dealing and Disbrows interference with Domkes
employment contract. Comparing this award to his monthly salary,
Domke reasons that the jury awarded him only two months back pay.
He protests that the evidence fails to support such a small award
for back pay because he was a valuable employee with a reasonable
expectation of further employment. In Domkes view, then, the
jury must have mistakenly speculated that Domkes employment
contract with Champion would have naturally expired on or about
December 23, 1998 had Disbrow not interfered with this contract.
Champion responds that the jurys award makes sense. It
posits that [t]he jury could have found [that] there was no
unlawful interference [by Disbrow] prior to October 1, 1998, but
that Disbrow interfered between October 1 and November 2, 1998,
when Disbrows objection to Domke in Valdez resulted in early
termination. Pointing to evidence that Champion had assigned
Domke to work on BPO-213 only until the end of December 1998, and
that it had agreed to employ him after that only if it found him
another position, Champion argues that the jury could reasonably
have found that Domke would not likely have worked beyond
December in any event, so any interference only resulted in two
months lost wages.
Champions argument finds support in the record. The
parties agreed that Domke was an at-will employee. On October 1,
1998 Disbrow sent Knickrehm an e-mail that Knickrehm interpreted
as requesting that Domke be removed from the Alyeska contract.
Knickrehm asked for ninety days to find another position within
Champion for Domke. Knickrehm testified that he told Domke that
Domke was being removed from the Alyeska project after ninety
days, and that Champion would have to try and find another job
for him after that. Domke himself acknowledged understanding
that at the end of the 90 days if Mr. Knickrehm could not find
another position for me, that my job was over. Moreover,
Knickrehm testified that he had located and offered Domke other
available positions outside Alaska including an international
position in which Domke could have worked thirty days on and
thirty days off but that Domke had rejected all these offers,
refusing to accept any positions outside Alaska. The jury
further heard evidence that Disbrow had pressed Knickrehm to
terminate Domke in late October 1998. As Domke put it, Disbrow
went ballistic again and demanded that I be pulled off the
contract immediately. Domke was terminated on November 2, 1998.
Based on this evidence, it would not have been
irrational for the jury to find that Domke was unfairly fired in
early November but that his employment with Champion likely would
have expired at the end of December 1998 in any event because
Champion might not have been able to find a new job that met his
satisfaction. Because the evidence here was not so completely
lacking or slight and unconvincing as to make the verdict plainly
unreasonable and unjust,4 we decline to reverse the superior
courts order denying a new trial on the damages issue.5
2. Motion for JNOV on vicarious liability
The jury found that Disbrow interfered with Domkes
contract but that Disbrows employer, Alyeska, was not vicariously
liable. Domke argues that the trial court erred by refusing to
grant a judgment notwithstanding the verdict (JNOV)6 that would
have found Alyeska vicariously liable for Disbrows tortious
interference. In response, Alyeska initially contends that Domke
failed to move for a directed verdict as to Alyeskas vicarious
liability, so he waived his right to request a judgment
notwithstanding the verdict. But the record fails to support
this contention.
After presenting his case at trial, Domke moved for a
directed verdict establishing both Disbrows and Alyeskas
liability on the tortious interference claim. The trial court
responded that, in its view, there were material fact issues for
the jury to resolve. The court invited Domke to argue the point
and gave him two minutes to do so, but it directed the subject of
the argument to the question whether Alyeska and Disbrow were
justified in their actions toward Domke. Given the limited focus
of the argument invited by the court, we think that it would be
unrealistic to view Domkes failure to expressly mention vicarious
liability as a waiver of the point. Under the circumstances, his
general motion for a directed verdict establishing Alyeskas
liability can best be seen as encompassing all reasonably
apparent theories of liability, including the theory that the
company was vicariously liable as Disbrows employer.
Accordingly, we conclude that Domke adequately preserved this
question to raise it in his post-trial motion for a JNOV.
Alyeska also contends that reasonable jurors could have
differed as to whether Disbrow was acting within the scope of his
employment when he interfered with Domkes employment contract.
We review the denial of a judgment notwithstanding the verdict
only to determine whether the evidence, when viewed in the light
most favorable to the non-moving party, is such that reasonable
persons could not differ in their judgment of the facts. 7 Under
Alaska law, employers are ordinarily held vicariously liable for
acts performed by their employees within the scope of their
employment.8 We apply a flexible, multi-factored test to
determine whether an employee has acted in the scope of
employment in a given case,9 looking to relevant factors listed
in 228 of the Restatement (Second) of Agency:
(1) Conduct of a servant is within the scope
of employment if, but only if:
(a) it is of the kind he is employed to
perform;
(b) it occurs substantially within the
authorized time and space limits;
(c) it is actuated, at least in part, by a
purpose to serve the master, and
(d) if force is intentionally used by the
servant against another, the use of force is
not unexpected by the master.
(2) Conduct of a servant is not within the
scope of employment if it is different in
kind from that authorized, far beyond the
authorized time or space limits, or too
little actuated by a purpose to serve the
master.
Applying these factors here, we see nothing in the
evidence that might have enabled reasonable jurors to conclude
that Disbrows interference with Domke occurred outside the scope
of his employment with Alyeska. Disbrow was the contract steward
of BPO-213 for Alyeska. Part of his job description, as outlined
in section 29 of the BPO, was to review and confirm Champions
performance under the contract. Thus, reviewing and commenting
on Domkes performance with respect to BPO-213 fell squarely
within the job that Disbrow was authorized to perform.
Disbrow testified that he wanted Domke removed from the
Champion contract for several reasons. These reasons included
Domkes lack of performance, his absenteeism, continuing
communication problems, and Domkes attitude. Moreover, Disbrow
testified that before he sent Knickrehm an e-mail requesting that
Domke be removed from the employment contract, he cleared the e-
mail with his own boss at Alyeska, Eldon Johnson. These events
demonstrate that Disbrow acted within the time and space limits
of his employment. And even if the jury accepted Domkes theory
that Disbrows actions were motivated by his belief that Domke was
a whistleblower, those actions would at least in part have been
meant to serve what Disbrow saw as being in Alyeskas best
interests.
Even when we view the evidence in the light most
favorable to Alyeska, then, we conclude that the record compels a
finding that Alyeska was vicariously liable for Disbrows tortious
interference with Domkes contract. Because Domke was entitled to
a JNOV establishing Alyeskas liability for Disbrows conduct, we
must remand with directions to amend the judgment to reflect this
conclusion.
B. Counterclaims
Domke next argues that Champions counterclaims for
conversion and unjust enrichment were barred by the statute of
limitations. In denying Domkes motion for summary judgment on
this point, the superior court ruled that the counterclaims were
compulsory, so they related back to the date of Champions answer
and were therefore timely. The court alternatively ruled that
there were material issues of fact regarding when Champion was on
notice that Domke intended to keep the overpayments an element
of Champions claims. Domke returned to the timeliness question
at the end of the trial, asking the court to instruct the jury on
the statute-of-limitations issue. The court declined to give his
proposed instructions. Domke now challenges these rulings.
A compulsory counterclaim relates back to the date of a
partys answer; a permissive counterclaim does not.10 Under Alaska
Civil Rule 13(a), a claim is compulsory when it arises out of the
transaction or occurrence that is the subject matter of the
opposing partys claim and does not require for its adjudication
the presence of third parties. We have identified the following
factors as helpful in construing the phrase transaction or
occurrence: whether the facts are related in time, space, origin,
or motivation; whether they form a convenient trial unit; and
whether their treatment as a unit conforms to the parties
expectations or business understanding or usage.11 Alternate ways
of determining whether two claims arise from the same transaction
or occurrence include looking for a logical relationship between
the claims, or whether the claims would involve similar testimony
. . . the same exhibits, and the same parties.12
Domke asserts that, since the overpayments were the
product of his consulting contract rather than the employment
contract that resulted in his claims against Champion, Champions
counterclaims did not arise from the same transaction or
occurrence as his own. He insists that there is no factual
overlap between the claims because the overpayments occurred
roughly a year before Champion breached the implied covenant and
because there was no relationship or connection between the two
events.
Champion responds that any counterclaims arising out of
the employment relationship between Champion and Domke would be
compulsory because defense of Domkes claims and prosecution of
its counterclaims would require the same witnesses and evidence.
It argues that Domkes breach of contract claims and its own
counterclaims arise from the same transaction or occurrence
because they could only be decided by reference to the terms of
Domkes employment contract. It asserts that once Domke placed
his own work performance, work character and credibility at
issue, evidence that he wrongfully kept the overpayments was
relevant in rebuttal. Also, it insists that the facts
underlying its counterclaims would necessarily be introduced
under the after-acquired evidence doctrine.
In Wells v. Noey, we held that an action to declare a
tax deed invalid was compulsory when the validity of the tax deed
was a necessary element in an earlier action between the parties
to quiet title by adverse possession.13 We concluded that the
interdependence of the two claims satisfied the logical
relationship test.14 We noted that the claims shared the same
evidentiary basis, and that proving the deed valid had been
necessary to establish adverse possession in the earlier suit
between the parties; in our view, these factors established that
the action to declare the tax deed invalid was compulsory.15
We find no comparable interrelationship here between
Champions counterclaims and Domkes claim. Champions evidentiary
argument does establish some similarity, but the similarity of
evidence between the two suits is not by itself controlling.
While the same parties and witnesses might appear in both
actions, Champions ability to recover the value of the consultant
overpayments did not depend on the success or failure of Domkes
claims.16 Conversely, a decision on Champions counterclaims was
not necessary to the result in Domkes suit. If Domke had pressed
suit immediately and reached judgment before Champion discovered
the overpayments, Champion would not have been barred under Civil
Rule 13(a) from asserting its claims in a separate action.
Furthermore there is no logical relationship between the claims.
In Ellingstad v. State, Department of Natural Resources, we found
no logical relationship between claims that arose from the same
land contracts but involv[ed] entirely different legal questions.17
While we can imagine many instances where counterclaims of
conversion and unjust enrichment could have a logical relation to
an employees claims arising from breach of an employment contract
by the employer, that is not the case here.
Because we conclude that Champions counterclaims were
permissive rather than compulsory, we must next consider Domkes
argument that the counterclaims were barred by the statute of
limitations.18 The trial court did not squarely address this
point. Instead, in denying Domkes motion to dismiss the
counterclaims on summary judgment, the court found that material
questions of fact remained in dispute regarding when Champion had
notice of its counterclaims. Because of this unresolved factual
dispute, the court also saw no need at that point to address
Champions alternative argument that Domke should be equitably
estopped from asserting his statute of limitations defense. But
as noted above, these rulings were based on the erroneous premise
that Champions counterclaims were compulsory and related back to
the date that Champion filed its answer.
When Domke attempted to return to these issues at trial
by requesting a jury instruction on the statute-of-limitations
issue, the superior court denied his motion on the ground that
his proposed jury instruction was untimely. The court thus
submitted the case to the jury, and eventually entered judgment,
with the disputed statute-of-limitations issues still unresolved.
Although we recognize that Domke admittedly filed his proposed
jury instruction late, and that the instruction was properly
rejected on that ground, the unresolved statute-of-limitations
issues addressed in that instruction raised preliminary questions
of fact that did not need to be referred to the jury and could
have been properly decided by the trial court itself.19
Accordingly, the courts rejection of Domkes late jury instruction
did not eliminate the need to address these unresolved issues.
For this reason, Domkes procedural lapse in submitting the
proposed instruction late cannot be viewed as an abandonment of
the underlying legal point the instruction addressed.
Given these circumstances, we hold that the trial
courts reliance on the mistaken premise that the counterclaims
were mandatory requires us to remand this case for further
consideration of the unresolved statute-of-limitations issues:
when Champion had reasonable notice of Domkes conversion and
whether the doctrine of equitable estoppel applies to the
counterclaims. On remand, the superior court should resolve
disputed factual issues concerning these points by considering
all relevant evidence in the record, including evidence presented
in connection with Domkes summary judgment motion and evidence
presented during the trial. If the court finds that Champions
counterclaims were barred in whole or in part by the statute of
limitations, it should disallow the jurys award on the
counterclaims to the extent necessary to conform with its ruling.
C. Severance of Champions Counterclaims
Domke separately argues that the court erred by denying
his motion to sever the trial of the counterclaims from the trial
of his complaint. He asserts that allowing Champion to present
its counterclaims unfairly tainted the jurys perception of his
case, and he suggests that Champions pursuit of its counterclaims
was motivated more from a desire to cast him in a negative light
than from belief in their merits.
Under Alaska Civil Rule 42(b), separate trials are
appropriate to ensure convenience or to avoid prejudice, or when
conducive to expedition and economy. The trial courts decision to
deny a severance motion is reviewed for abuse of discretion.20 We
have held that a separate trial on a defendants counterclaims is
unnecessary when the counterclaims share the same issues of fact
as the defendants affirmative defenses.21 When that is the case,
the plaintiff suffers no prejudice other than the unavoidable
prejudice caused by the defendants assertion of the factual basis
of the affirmative defenses, so trying the counterclaims with the
plaintiffs case in chief is conducive to expedition and economy.22
Here, Champion asserted an after-acquired evidence
defense to Domkes retaliatory discharge claim. Under this
theory, it claimed that it would have fired Domke once it
discovered that he had kept the consultant overpayments.
Asserting this defense required that Champion present the same
evidence that it required for its counterclaims: that Domke had
wrongfully retained the overpayments. Indeed, before trial, in
response to Domkes complaints that the counterclaims would
unfairly put his character at issue, Champion offered to
stipulate that the same facts underlay the counterclaims and its
affirmative defenses. Because Domke asserts no concrete reason
that presentation of the counterclaims prejudiced his case beyond
the damage that would have been done by Champions prosecution of
its affirmative defense, we find that the trial court did not err
by denying his motion.
D. Champions After-Acquired Evidence Defense
In Brogden v. City of Klawock, we recognized that after-
acquired evidence of an employees wrongdoing may be introduced in
employment cases.23 But our discussion of the after-acquired
evidence doctrine was brief.24 We did not, for example, decide
what limits the trial court should place on the introduction of
post-termination justifications, or whether a new cause for
termination merely serves to limit damages or eliminates entirely
the right to damages.25
In its answer to Domkes complaint, Champion asserted
that [t]he doctrine of after-acquired evidence bars plaintiffs
recovery in whole or in part. The gist of Champions defense was
that it would have terminated Domke once it discovered that he
kept and cashed the consultant overpayments. The trial court
declined to dismiss this defense at summary judgment, finding
that issues of fact exist as to who knew about the checks, what
was known about these checks. Further, issues of fact exist as
to whether Domke would have been terminated if Champion had known
about the alleged improper retention of these checks. An
instruction on Champions defense was submitted to the jury.26 The
jury found that Domkes wrongful retention of the consultant
overpayments did not bar him from recovery for Champions breach
of the implied covenant of good faith and fair dealing.
Domke nonetheless argues on appeal that the court erred
when it refused to grant summary judgment on Champions defense.
Domke asserts that he demonstrated in his summary judgment motion
that Champion was aware of the overpayments and that Domke had
cashed the checks during the course of his employment.
According to Domke, this means that the evidence relating to the
consultant overpayments was not after-acquired and that Champions
defense should have been dismissed at summary judgment.
But Domke fails to show that he was prejudiced by the
trial courts decision. The jury ultimately found in Domkes favor
on Champions defense. The only potential source of prejudice
lies in the evidence of Domkes misconduct with regard to the
overpayments that was introduced to support Champions theory.
Domke insists that the overpayments were known to Champion during
his employment, and he suggests that, since Champion did not
terminate him after gaining this knowledge, the fact of the
overpayments is completely irrelevant to the issues raised by his
claims. Yet even if Champion had learned of the overpayments
while Domke was still working, and even if it knew that he
intended to keep them, this evidence still would have been
admissible to rebut Domkes evidence of his own good character and
reasonable expectation of long-term employment. At most, then,
allowing the jury to hear Champions after-acquired-evidence
defense amounted to harmless error.
E. Special Verdict on Fault Allocation
Under AS 09.17.080, the court must instruct the jury to
apportion fault among all parties in a civil action, including
each claimant, defendant, third-party defendant, person who has
been released from liability, or other person. . . . According
to AS 09.17.900, fault . . . includes acts or omissions that are
in any measure negligent, reckless, or intentional toward the
person or property of the actor or others, or that subject a
person to strict tort liability. During the trial, the superior
court ruled that these fault-allocation provisions did not apply
to Domkes claim of tortious interference with his employment
contract. The court nonetheless thought that this issue was
close, acknowledging that in this case there may be a real
legitimate dispute in the law. To avoid the need for a new trial
if its ruling was reversed on appeal, the court announced, just
before submitting the case to the jury, that it would preserve
the record by submitting a special verdict form allowing the jury
to allocate fault on the tortious interference claim. After the
jury returned a verdict finding Domke thirty percent at fault on
that claim, the court changed its ruling on the fault-allocation
requirement, held it applicable, and calculated the final
judgment by using the jurys finding on comparative fault.
Domke now argues that the trial court erred in two
respects. First, he contends, a plaintiff cannot share
responsibility for a defendants intentional tort against the
plaintiff. Domke reasons that the lack-of-justification element
of a tortious interference claim essentially rules out
comparative fault, making the concept redundant and illogical in
the context of such claims: If the plaintiff is at fault, Domke
posits, then the defendants interference would be justified.
Second, Domke argues, the last-minute timing of the courts
decision to instruct on allocation prejudiced him by precluding
any opportunity to argue the issue to the jury.
Champion responds that the trial court did not have
discretion to exempt Domke from fault allocation, because the
allocation statute is mandatory.27 Champion also insists that
Domke waived any claim of prejudice resulting from the timing of
the courts decision because he did not assert a claim of
prejudice after closing statements, seek additional time to
supplement his closing, or provide a record of how his closing
may have been altered based on the trial courts ruling.
But the record demonstrates that Domke adequately
preserved his argument based on timing.28 And under the
circumstances at issue here, we hold that it was an abuse of
discretion to announce for the first time after counsel had made
their closing arguments that the allocation issue would go to the
jury. The court submitted the disputed special verdict form on
fault allocation without allowing either party the benefit of
closing arguments or explanatory jury instructions. This
prejudiced both sides by depriving them of any opportunity to
discuss the issue of allocation in their arguments to the jury.
To determine an appropriate remedy for the prejudice
stemming from the late instruction, we must next consider whether
the allocation statute required fault to be allocated here. If
so, a retrial on the issue of allocation would be necessary; if
not, the proper remedy would simply be to disregard the jurys
allocation.
Relying on AS 09.17.900, which defines fault to include
all acts or omissions that are in any measure negligent,
reckless, or intentional, Champion argues that [t]he facts in
this case permitted the jury to reasonably conclude Domkes
failure to perform assigned tasks in a professional manner or his
unprofessional conduct negligently placed him in danger of being
transferred and/or terminated while also concluding that when
Disbrow sought Domkes early termination, it was due to Disbrows
unjustified motives. In Champions view, then, Domke was
negligent through his actions of being unprofessional, which
combined with Disbrows intentional interference to cause Domkes
firing.
But Champions argument begs the question of the role
played by the element of justification in a cause of action for
tortious interference with a third partys contract. Here, as we
have already discussed, Disbrow was found liable for tortious
interference based on conduct occurring in the course of working
as an employee of Alyeska on a contract with Champion. If Domkes
allegedly unprofessional conduct impaired Disbrow in performing
his job or damaged Alyeskas business interests, then Disbrow
would have been justified in seeking to have Domke disciplined or
discharged by Champion; and this justification would have
completely absolved him from being held liable for interfering in
Domkes employment. Conversely, if Domkes lack of professionalism
was so unrelated to Disbrows actions that it gave him no
justification for interfering with Domkes employment, then this
lack of a causal nexus would preclude treating Domkes
unprofessional conduct as a legal cause of his own firing. Any
negligence on his part would have played no direct and
significant role in causing the specific harm at issue the
interference that prompted his firing. In context, then, the
lack-of-justification element played two simultaneous roles: it
established actionable misconduct by Disbrow and ruled out
legally relevant contributory causation by Domke.
Alaskas statutory provision governing allocation of
fault reinforces this view of the tortious conduct at issue here.
Though AS 09.17.080 potentially encompasses a broad array of
causes of actions, the statute specifically requires fault to be
allocated only in actions involving fault of more than one
person; and in such cases it specifies that in allocating fault
the jury must consider both the nature of the conduct of each
person at fault, and the extent of the causal relation between
the conduct and the damages claimed. Here, the nature of the
cause of action at issue its established definition required
Disbrows unjustified interference to be the but-for cause of
Domkes firing; at the same time, Disbrows lack of justification
negated the existence of any legally relevant causal relation
between unprofessional or otherwise inappropriate conduct by
Domke and the specific damages claimed in his action against
Disbrow.
Put simply: The definition of the cause of action does
not allow a finding that the harm Disbrow caused was partly
justified. And Domke neither owed nor breached any identifiable
legal duty to exercise due care to prevent unjustified acts of
tortious interference by third parties like Disbrow.29 Notably,
Champion cites no authority to support its claim that an
employees general unprofessionalism or abrasiveness can provide
an actionable basis for allocating liability based on
contributory fault on a claim against a third party for tortious
interference with the employees employment contract; nor does
Champion cite any authority applying comparative fault under
similar circumstances. Under these circumstances we decline to
hold that AS 09.17.080 required the superior court to give an
instruction allowing the jury to consider allocating fault to
Domke on his claim for tortious interference.
Because we hold that an instruction on allocation of
fault was not called for here, we conclude that the prejudice
resulting from the last-minute instruction does not require a
retrial to allow reallocation of fault; instead, the proper
remedy on remand will be to strike the thirty-percent allocation
of fault against Domke and to amend the awards against Disbrow
and Alyeska to reflect full liability.
F. Claims Against Knickrehm
At the close of Domkes case, Knickrehm moved for a
directed verdict, arguing that he could not be personally liable
for conspiring to interfere with Domkes contract or breaching
Champions implied covenant of good faith and fair dealing,
because Knickrehm had acted within the scope of his employment.
Domke conceded that Knickrehm had acted within the scope of his
employment but maintained that he could nonetheless be personally
liable if his actions in interfering with Domkes contract were
intentional and malicious. The court dismissed the claims
against Knickrehm, concluding as a matter of law that as an
employee acting within the scope of his employment, Knickrehm
could not interfere with a contract to which his employer was a
party.
Knickrehm maintains that the superior court correctly
reached this conclusion. He also notes that we have previously
recognized that agents cannot be personally liable for a breach
of contract so long as the fact of their agency and the identity
of the principal are disclosed.30 Here, it is undisputed that
Domke was aware that Knickrehm acted on behalf of Champion.
Domke responds that a supervisor can be personally
liable for his role in the interference with his subordinates
employment contract caused by his own independently tortious or
malicious acts. In support of this contention, Domke cites Jones
v. Central Peninsula Hospital,31 where we favorably referred to
Wagenseller v. Scottsdale Memorial Hospital,32 an Arizona case
that supports Domkes position. According to Domke, Joness
reliance on Wagenseller makes his theory the rule of law in
Alaska. Domke claims that there was enough evidence to support a
finding that Knickrehm engaged in independently tortious acts:
According to Domke, Knickrehm failed to abide by Alyeskas policy
against co-employment, lied to Champion about Domkes actions, and
lied to Alyeska when he told [Alyeska] that Domkes termination
had nothing to do with Disbrow.
But we need not decide if Domkes theory of error has
legal merit; even assuming for the sake of argument that it does,
we conclude that Domke has failed to carry his burden of
establishing that the alleged error actually caused any
substantial prejudice. Initially, we note that the extent of the
prejudice that Domke realistically might have suffered would have
been relatively slight at most. As Domke conceded at trial, his
implied covenant and tortious interference claims against
Champion, which remained intact, accomplished essentially the
same thing as his dismissed claim against Knickrehm could have
accomplished. Thus, if the court had left Domkes interference
claim intact and he had won a judgment against Knickrehm, there
is no reason to suspect that his judgment would have exceeded the
award he actually received on his judgment against Champion. At
best, he might have had identical judgments against Knickrehm and
Champion instead of a judgment against Champion alone.
More important, even if the jury accepted Domkes
description of Knickrehms conduct, it would not necessarily have
determined that Knickrehm acted maliciously or committed
independently tortious acts, as would have been required for a
finding of liability under Wagenseller and Jones. The conduct
alleged by Domke could as easily have been seen as evincing
Knickrehms genuine desire to protect the interests of his
employer, Champion. Domke does not explain why a finding of
malicious or independently tortious actions would have been
likely, and our own review of the record fails to persuade us of
a fair probability that the jury would have made such a finding.
We thus conclude that Domke has failed to make a showing of
prejudicial error.
G. Champions Negligence on Its Counterclaim
Finally, Domke argues that even if Champions
counterclaims were compulsory, the court erred when it refused to
instruct the jury on Champions possible negligence in its
counterclaim based on unjust enrichment. Domkes proposed
instruction would have told the jury that Champion could not
recover anything on its counterclaims if the jury found that
Champion acted negligently in failing to discover that it was
mistakenly paying Domke for two jobs. Domke insists that the
evidence supported this instruction, alleging that Champions
payroll supervisor knew of the overpayments as they occurred, and
violated his duty to pay[] attention to his costs like he was
required. But Domke concedes that his proposed jury instruction
was untimely, and he offers no valid excuse for filing it late.
Domke also fails to cite any Alaska authority for the proposition
that negligence on Champions part should have barred recovery on
its counterclaims completely. As the case stands now, Domke
received the benefit of a comparative fault determination on
Champions counterclaims, in which the jury apportioned forty
percent of the loss to Champion. The superior courts refusal to
give Domkes late instruction did not amount to plain error merely
because it might have produced a better result.
IV. CONCLUSION
For the reasons stated above, we REMAND with directions
for the superior court to hold an evidentiary hearing to
determine whether Champions counterclaims were barred by the
statute of limitations and to amend the judgment by disallowing
the counterclaims to the extent that the court finds that they
were time-barred. We also direct the court to enter a judgment
notwithstanding the verdict holding Alyeska vicariously liable
for Disbrows tortious interference. Finally, we direct the court
to amend the judgment by vacating its provisions apportioning
fault to Domke on his tortious interference claims and by
awarding him full, unapportioned damages on those claims. In all
other respects we AFFIRM the judgment.
_______________________________
1 Reeves v. Alyeska Pipeline Serv. Co., 56 P.3d 660, 668
(Alaska 2002).
2 Pugliese v. Perdue, 988 P.2d 577, 581 (Alaska 1999).
3 Id.
4 Id.
5 Compare, e.g., Grant v. Stoyer, 10 P.3d 594 (Alaska
2000), and Pugliese, 988 P.2d at 581-83 (both holding that new
trial required where unrebutted evidence established liability
and existence of some damages, but jury awarded nothing), with
Richey v. Oen, 824 P.2d 1371 (Alaska 1992) (declining to order
new trial over disputed damages and over whether some evidence
that tended to show plaintiffs injury pre-existed accident).
6 See Alaska R. Civ. P. 50(b).
7 Reeves, 56 P.3d at 668 (quoting Richey, 824 P.2d at
1374).
8 VECO, Inc. v. Rosebrock, 970 P.2d 906, 911 (Alaska
1999).
9 Doe v. Samaritan Counseling Ctr., 791 P.2d 344, 346
(Alaska 1990).
10 Alaska R. Civ. P. 13(a), (b) and 15(c); Mogg v. Natl
Bank of Alaska, 846 P.2d 806, 813-14 (Alaska 1993).
11 Miller v. LHKM, 751 P.2d 1356, 1361 (Alaska 1988)
(citing Restatement (Second) of Judgments 24(2) (1981)).
12 Ellingstad v. State, Dept of Natural Res., 979 P.2d
1000, 1010 (Alaska 1999) (quoting Miller, 751 P.2d at 1361, and 6
Charles Alan Wright & Arthur R. Miller, Federal Practice and
Procedure 1410, at 65 (2d. ed. 1990)).
13 399 P.2d 217 (Alaska 1965).
14 Id. at 220.
15 Id. at 219-20.
16 See Wells, 399 P.2d at 219-20 (finding plaintiffs claim
that tax deed was invalid was compulsory and should have been
brought in prior action by defendant to quiet title by adverse
possession, because earlier adverse possession claim required
that tax deed be proven valid).
17 979 P.2d 1000, 1010 (Alaska 1999). The claims in
Ellingstad also did not require examination of the same evidence,
facts, or circumstances. Id. Here, while evidence of Domkes
conversion of the overpayments was admissible, for reasons
further addressed below, the controversy surrounding the
overpayments was not necessary to prove Domkes claim or
integrally related to the claim. See Iglesias v. Mutual Life
Ins. Co. of New York, 156 F.3d 237, 240-42 (1st Cir. 1998)
(employers counterclaim for restitution was permissive rather
than compulsory, because the counterclaims did not involve the
same operative facts as employees discrimination and contract
claims, despite use of evidence supporting restitution claim to
attack credibility of the employee).
18 We note that neither partys briefing has specified what
statutory limit would govern the disputed counterclaims, and the
superior court does not appear to have decided the issue.
Although Champions conversion claim would likely be governed by
the two-year limit for tort claims, unjust enrichment is
essentially a contract claim, so it would be subject to the three-
year limit established in AS 09.10.053 for actions upon a
contract or liability, express or implied. Since the jury found
in Champions favor on both alternative counterclaim theories, the
longer time limit for unjust enrichment would be dispositive
here.
19 See Cikan v. ARCO Alaska, Inc., 125 P.3d 335, 339
(Alaska 2005) ([T]he task of interpreting and applying a statute
of limitations traditionally falls within the province of the
courts; so when a factual dispute precludes entry of summary
judgment the dispute must ordinarily be resolved by the
court[.]); Johns Heating Serv. v. Lamb, 46 P.3d 1024, 1033
(Alaska 2002) (remanding a statute of limitations issue to the
superior court for determination as a preliminary question of
fact); see also Pedersen v. Zielski, 822 P.2d 903, 907 (Alaska
1991) (noting that issues concerning the application of the
discovery rule that are genuine issues of material fact . . .
must be resolved at an evidentiary hearing before the trial
court).
20 Miller v. Sears, 636 P.2d 1183, 1192 (Alaska 1981).
21 Id.
22 Id. (quoting Alaska R. Civ. P. 42(b)).
23 930 P.2d 989, 991-92 (Alaska 1997).
24 Id. at 992.
25 Id.
26 Jury Instruction No. 32 read:
Champion Technologies has asserted that
after the termination of Domkes employment,
evidence was acquired by Champion
Technologies that Domke had engaged in
misconduct which justified termination, and
that this amounts to a defense to his claims.
. . .
First, you must determine whether . . .
Champion . . . had knowledge of Domkes
allegedly wrongful conduct prior to his
termination.
Next, in order to establish this
defense, Champion has the burden of proving
by a preponderance of the evidence all of the
facts necessary to establish:
1) Domke wrongfully retained $19,600
of consultants pay from Champion
Technologies funds to which he was
not entitled;
2) Domkes wrongdoing was of such
severity that he in fact would have
been terminated on those grounds
alone if Champion Technologies had
known of it at the time of the
termination.
If you find that Champion Technologies
breached the contract of employment and/or
that Domke was wrongfully terminated, but
also that Champion Technologies was justified
in that action by reason of Domkes wrongful
conduct discovered thereafter, Domkes damages
are limited to the back pay he would have
earned from the date of termination until the
date of the discovery of the misconduct.
27 In Shields v. Cape Fox Corp., 42 P.3d 1083, 1087-89
(Alaska 2002), we held that it was plain error under an earlier
version of AS 09.17.080 for the trial court not to instruct the
jury on comparative fault in a conversion case involving both
tangible-property loss and purely economic loss. Our ruling in
this case on the timing of the trial courts decision to allow the
jury to allocate fault makes it unnecessary to decide whether
Domkes case is distinguishable from Shields.
28 In arguing about whether the court should submit a last-
minute verdict form allowing the jury to allocate fault on this
claim, Domke maintained at trial that the verdict form should not
be submitted, because the courts fault-allocation ruling was
correct on its merits, so omitting the special verdict form would
not cause any harm. But Champion argued in favor of the special
verdict, insisting that the fault-allocation statute applied and
required allocation. In response to Domkes claim that omitting
the special verdict form would cause no harm, Champions trial
counsel insisted that the defendants had already been harmed:
[D]efendants have been substantially prejudiced because they did
have to alter their closing argument to take out any language to
that effect, based on the Courts prior ruling. Domkes counsel
replied: Well, I think that prejudice would go both ways, wouldnt
it? The court then acknowledged that It goes both ways, but
nonetheless elected to submit the last minute special verdict
form.
29 We recognize that even if Domke did nothing to justify
Disbrows efforts to have him terminated, Domke might have been a
problematic employee, and his performance on the job might have
irritated his superiors at Champion and predisposed them to
terminate him more readily than they might have terminated a less
difficult employee. But even if this kind of general
unprofessionalism made Domke a likely prospect for firing, this
behavior could not properly be deemed a proximate cause of
Champions decision to actually fire him on November 2, 1998;
instead, his vulnerability to termination would simply have
diminished his predictable tenure as a Champion employee a
factor that the jury was entitled to consider, and presumably did
consider, in deciding how much to award Domke for lost wages
resulting from his termination.
30 Jensen v. Alaska Valuation Serv., Inc., 688 P.2d 161,
162-63 (Alaska 1984) (Although officers of a corporation will not
ordinarily be held personally liable for contracts they make as
agents of the corporation, they must disclose their agency and
existence of the corporation before they will be absolved from
liability.).
31 779 P.2d 783, 791 n.10 (Alaska 1989).
32 710 P.2d 1025 (Ariz. 1985), superseded in other
respects by Arizona Revised Statute 23-1501 (1996).
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