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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Baker v. Ryan Air, Inc. (3/27/2015) sp-6990

Baker v. Ryan Air, Inc. (3/27/2015) sp-6990

         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, email  




BRUCE ANDREW BAKER d/b/a                                      )  

BAKER LEASING, LLC,                                           ))    Supreme Court No. S-15354                           


                             Appellant,                       )     Superior Court No. 3AN-12-11199 CI  


          v.                                                  )    O P I N I O N  


RYAN AIR, INC.,                                               )    No. 6990 - March 27, 2015  


                             Appellee.                        )  


                   Appeal from the Superior Court of the State of Alaska,  


                   Third Judicial District, Anchorage, Frank A. Pfiffner, Judge.  


                   Appearances: Christopher D. Cyphers and Michael A. Rose,  


                   Frontier Law Group, LLC, Anchorage, for Appellant.  Roy  


                   Longacre,  Longacre  Law  Offices,  Ltd.,  Anchorage,  for  


                   Before:  Fabe, Chief Justice, Winfree, Stowers, Maassen, and  


                   Bolger, Justices.  

                   BOLGER, Justice.  


                   Ryan Air entered into a contractual agreement to sublease an airport lot in  


Kotzebue.  The agreement gave Ryan Air an option to purchase the leasehold and apply  


its rent payments to the final purchase price.  But when Ryan Air attempted to complete  


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

the purchase, Bruce Andrew Baker d/b/a Baker Leasing, LLC, the other party to the  

contract, disputed the outstanding balance and sent Ryan Air a notice of breach.   

                   Both parties brought their claims to the superior court.  After a trial, the  

court concluded that Ryan Air did not materially breach the contract and ordered the  


parties to proceed with the transfer.  Baker appeals the order, arguing that the court's  


factual findings regarding his breach claims were clearly erroneous, that the conveyance  


documents contained warranties beyond those he was contractually obligated to provide,  


and that Ryan Air's attorney's fees award was unreasonable.  

                   We conclude that the court's findings were not clearly erroneous, that the  


warranties contained in the conveyance documents did not exceed Baker's contractual  

requirements, and that Ryan Air's attorney's fees were reasonable.  We therefore affirm  


the  superior  court's  judgment  in  most  respects.    However,  the  parties  agree  that  the  

superior court double-counted some of Ryan Air's rent payments, and we remand to  

allow the superior court to address the issue.  

II.      FACTS  

                   This dispute concerns Lot B, Block 1 of the Kotzebue Airport Lease Lots  


and the two buildings constructed on it.  The lot and the buildings (together, the property)  


are owned by the State of Alaska, Department of Transportation (DOT).  

                   In 1985 Baker Aviation, Inc.1                                

                                                            entered into a long-term agreement with DOT  


to  lease  the  property.    In  December  2001  Baker  Aviation  and  Ryan  Air  signed  an  

agreement,  entitled  Earnest  Money  Receipt  and  Agreement  to  Purchase  (Purchase  

Agreement), whereby Ryan Air would purchase the leasehold from Baker Aviation for  

$600,000 within 105 days. The Purchase Agreement specified that Baker Aviation would  


          1        Baker Aviation is a separate entity from Bruce Andrew Baker d/b/a Baker  


Leasing, LLC and is not a party to this dispute.  Baker Aviation's principal shareholders  

are Bruce Andrew Baker's parents.  

                                                           -2-                                                        6990  

----------------------- Page 3-----------------------

provide an unconventional deed:  "At closing, Seller shall furnish a statutory quitclaim  

deed . .  .  , showing free title, clear of encumbrances, except conditions, restrictions,  

reservations, and rights-of-way of record as accepted by Buyer." Baker Aviation agreed  


to provide five specific warranties:  

                             a.       Seller  .  .  .  has,  or  will  have,  full  power  and  

                   authority  to  execute  this  agreement  and  perform  Seller's  

                   obligations hereunder;  

                             b.       The  sale  of  the  Property  by  Seller  does  not  


                   violate any applicable statute, ordinance[,] or regulation, nor  

                   any order of any governmental authority or agency, pertaining  


                   to the seller;  

                             c.       There are no claims of lien on the property and  

                   Seller has taken no action which would create any such lien  

                   in favor of any person;  

                             d.       There      are    no     currently      due     and     payable  


                   assessments           for     public       improvements            against        the  


                   property . . . ;  

                             e.       There   are   no   easements   or   encumbrances  

                   affecting the property except as disclosed on the plat and in  


                   the preliminary title report delivered in connection with this  


The Purchase Agreement specified that these warranties "shall not merge in the deed of  

conveyance but shall survive closing."  

                   The closing deadline date came and went.  Baker Aviation and Ryan Air  


were unable to complete the sale because of unacceptable liens against the property.  In  


June 2002 they modified the Purchase Agreement to delay the closing date until at least  

March 2003.  This modification, Addendum 2 to the Purchase Agreement, gave Ryan Air  


the "sole option" to extend the closing date an additional nine years.  The parties agreed  

that during the interim time, Ryan Air would rent the property for $3,000 per month.  


They also agreed that "all rental payments made subject to this Addendum [would] reduce  


                                                            -3-                                                      6990

----------------------- Page 4-----------------------

the sales price of the above described property  from [the] amount as outlined in the  


[Purchase Agreement]."  Ryan Air agreed in Addendum 2 that "when the property [was]  


ready  for  sale  under  the  terms  of  the  [Purchase]  Agreement,"  it  would  "proceed  to  

complete[] the purchase in a reasonable amount of time."  

                   In May 2003 Baker Aviation and Ryan Air again modified the Purchase  

Agreement,  extending  the  closing  deadline  to  July  2019.    This  modification  was  

Addendum 3.  

                   In September 2003 the parties entered into a new Commercial Sublease  


Agreement With Purchase Option (Sublease Agreement), which maintained Ryan Air's  


rent at $3,000 per month and incorporated Ryan Air's purchase option as set forth in the  

Purchase Agreement and Addenda.  The Sublease Agreement also contained a number  

of additional terms, several of which are of particular importance to this litigation.  It  


required Ryan Air to seek and receive written authorization from both Baker Aviation and  

DOT before making permanent improvements or alterations to the property.  It prohibited  


Ryan  Air  from  assigning,  subleasing,  or  encumbering  the  property  without  Baker  

Aviation's "express prior written consent."  It required Baker Aviation to notify both  


Ryan  Air  and  DOT  in  writing  of  any  alleged  breach  -  and  provide  Ryan  Air  an  

opportunity to cure - before exercising its legal rights or remedies.  It specified that any  

"amendment,  deletion,  addition[,]  or  novation"  would  be  effective  only  if  it  were  


"completely and unambiguously contained in a writing executed by all of the parties."  


And it provided that "[a]ll legal costs and attorneys fees actually incurred by any party  


to this Agreement to enforce the duties or obligations of any other party . . . shall be paid  


to the prevailing party by the other party."  

                   In 2006 the Internal Revenue Service (IRS) placed a levy on the property  


because Baker Aviation had fallen behind on its tax obligation.  From September 2006  

                                                             -4-                                                      6990

----------------------- Page 5-----------------------


to February 2008, Ryan Air sent its monthly rent payments directly to the U.S. Treasury.  

In April 2008 the IRS released the levy.  


                   Soon after the levy was released, Baker Aviation assigned its interest in the  

property  to  the  appellant,  Bruce  Andrew  Baker  d/b/a  Baker  Leasing,  LLC  (Baker).  

Baker replaced Baker Aviation as Ryan Air's sublessor, but the assignment had no effect  


on the terms of the Sublease Agreement or Ryan Air's purchase option.  

                   In 2009 Baker approached Ryan Air about increasing its monthly payments  

from $3,000 to $5,000.  Though Ryan Air does not deny that it paid Baker this increased  


amount from September 2009 to August 2012,  the parties disagree about the terms of this  


"rent  increase"  and  whether  it  constituted  a  formal  modification  of  the  Sublease  

Agreement.  Baker testified that the parties orally modified the Sublease Agreement to  

include this rent increase and that Ryan Air agreed that, starting in 2010, rent payments  


would no longer apply towards the purchase price of the leasehold.  In contrast, Ryan  


Air's President, Wilfred Ryan (Ryan), testified that he had not agreed to modify Ryan  

Air's contractual rent obligation and that the additional $2,000 per month was merely a  



                   At some point between 2008 and 2010, Ryan Air began renovating one of  


the  two  buildings  on  the  property.    The  parties  disagree  about  when  the  project  

commenced and whether Ryan Air obtained authorization before proceeding.  However,  

there  is  no  question  that  Baker  emailed  DOT  in  September  2010  to  consent  to  the  

renovations, and DOT granted a building permit shortly thereafter.  

                   Beginning in July 2011, Ryan Air began subleasing an aircraft tie-down  

space  to  DOT.    Baker  testified  that  Ryan  Air  failed  to  seek  or  receive  prior  written  


authorization for this sublease.  

                   Sometime around July 2012, the parties began to dispute the outstanding  

balance  on  the  property's  purchase  price.    In  late  July  Ryan  Air  sent  Baker  a  letter  

                                                            -5-                                                      6990

----------------------- Page 6-----------------------

claiming that the balance was $168,000 and asking whether Baker would be willing to  


move forward with the sale.  Baker replied that the correct balance was $278,000,  and 


he threatened to evict Ryan Air from the property for violating the Purchase Agreement.3  



                    In October Ryan Air sent Baker another letter, requesting details about the  


alleged breaches and claiming that the outstanding balance was $138,161.40.  Ryan Air  


also notified Baker that it would stop paying rent until the sale was completed and would  

instead rely on deductions from its prepayments to satisfy its required monthly rent.  

                    In  November  Baker's  attorney  sent  Ryan  Air  a  "Notice  of  Breach  of  


Contract."  The letter claimed that Ryan Air had breached the Sublease Agreement by  


paying only partial rent in September and failing to pay rent in October and November.  


Further, it alleged that Ryan Air's renovation project constituted a breach of the Sublease  

Agreement and that the damages exceeded $250,000. The letter demanded that Ryan Air  


send Baker a check for $282,607.35 by the end of November to avoid a lawsuit.  


                    In November 2012 Ryan Air filed an action for declaratory judgment.   Ryan  


Air  asked  the  superior  court  to  declare  that  the  Purchase  and  Sublease  Agreements  


remained in full force and effect.  Three days later Ryan Air moved for a preliminary  


injunction to preserve the status quo ante and requested leave to deposit $138,161.40 with  


the court clerk as security for the injunction.4  


                                                                   Ryan Air amended its complaint in January  


2013; Baker filed his answer later in January and counterclaimed for breach of contract.  

          2         In the alternative, Baker offered to compromise for $175,000 plus a Cessna     

207 aircraft.  

          3         Baker probably meant to refer to the Sublease Agreement instead of the  

Purchase Agreement.  

          4         This sum represented Ryan Air's estimate of the outstanding balance on the  



                                                               -6-                                                         6990

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                    Rather than hold a separate hearing on Ryan Air's request for a preliminary  

injunction,  the  superior  court  ordered  expedited  discovery  and  a  prompt  trial,  which  

occurred in early July 2013.  On the third and final day of the bench trial, the court read  


its factual findings and legal conclusions into the record.5  

                                                                                         Noting that the parties had  

never signed a written amendment to the Sublease Agreement, the court found that there  

was no 2009 contract modification and that Ryan Air's increased payments reflected  

prepayments, not an increase in the underlying rent.  The court calculated that Ryan Air  


had paid Baker a total of $473,000 in rent and ordered the parties to "work together" in  


"good faith . . . to complete the sale of the premises for [the remaining] $127,000 as  

expeditiously as possible."  

                    Because  the  superior  court  ordered  that  the  sale  should  proceed,  it  

determined that Baker's breach of contract claims were moot. In addition, the court found  


that  Ryan  Air  had  not  breached  the  contract  by  withholding  rent  payments  from  

September 2012 onwards because it had made significant prepayments to Baker.  The  


court found that Ryan Air's renovation project did not constitute a breach because Ryan  


Air had received Baker's permission to proceed.  The court found that, even if Ryan Air  


had breached the contract, Baker had failed to send Ryan Air a valid notice of breach  


because his notice letter "really d[id]n't detail the defects [and] problems" and was not  


copied to DOT, as required by the Sublease Agreement.  And the court found that the tie- 


down sublease was not a material breach and was "a non-issue in the case."  Finally, the  


court concluded that Ryan Air was the prevailing party and was therefore entitled to  


attorney's fees under the Sublease Agreement.  

          5         The superior court asked Ryan Air's attorneys to compile written findings  

and  conclusions  based  on  the  court's  oral  findings.    The  proposed  document  was  

presented to the superior court in August 2013 and issued by the court shortly thereafter.  


                                                              -7-                                                            6990  

----------------------- Page 8-----------------------

                   On July 25 Ryan Air moved to compel the execution of the conveyance  

documents, arguing that Baker was not working in good faith to complete the transfer of  


the property.  In an attached affidavit, Ryan Air's attorney stated that he had personally  


delivered conveyance documents to Baker's attorney on July 10, sent a follow-up letter  


on July 19 inquiring about the status of the documents, and followed up again with a  


voice message on July 24.  Ryan Air's attorney further attested that he had received "no  

response to any of the above contacts."  

                   Baker opposed the motion to compel, arguing that the warranties in the  

conveyance  documents  were  not  anticipated  by  the  Purchase  Agreement.    He  also  


claimed that Ryan Air, by delivering the documents in person instead of sending them by  


certified  mail  or  facsimile,  had  failed  to  comply  with  the  Purchase  Agreement's  


requirements for service.  Despite Baker's opposition, the superior court granted Ryan  

Air's motion on August 21 and ordered Baker to deliver the executed documents by  


August 26.  

                   On August 23 Baker moved for a stay of the order compelling Baker to sign  

and return the documents, which the superior court denied.  Baker simultaneously filed  


a  petition  for  review,  which  we  denied.    Also  on  August  23,  Ryan  Air  sent  Baker  

discovery requests seeking information about any liens remaining against the property  

and about Baker Leasing, LLC's assets.  

                   On  August  28  Ryan  Air  asked  the  court  to  authorize  the  leasehold  


conveyance documents without Baker's signature.  The court granted this motion,  though  


Ryan Air never made use of this authorization.  

                   On September 25 Baker's attorney replied to Ryan Air's discovery requests  


by objecting to every question and request for production.  He claimed that the requests  

were "irrelevant, not likely to lead to admissible evidence or discoverable admissible  

evidence, unduly burdensome, non-timely, and [sought using] improper procedure."   

                                                             -8-                                                      6990

----------------------- Page 9-----------------------

                   Also on September 25, Ryan Air, before receiving the discovery objections,  


moved to compel a response, claiming that the deadline for response was September 23.  

Baker  opposed  this  motion,  arguing  that  under  Alaska  Civil  Rule  6(c),  he  had  until  


September 25 to respond to the discovery requests and had timely done so by objecting.  

Ryan Air supplemented its motion by claiming that Baker's objections were invalid.  

Baker, in response, pointed out that Ryan Air had failed to confer or attempt to confer  

with him about his discovery objections; he argued that this failure made Ryan Air's  

motion to compel unripe.  The court granted the motion and ordered Baker to comply  

with Ryan Air's discovery requests.  

                   In  November  Baker  again  moved  for  a  stay  of  the  order  to  compel  the  

transfer, in light of his notice of appeal to this court.  The superior court denied the  


                   In December Ryan Air moved for an order to show cause why Baker should  

not be held in contempt for failing to comply with the court's orders to deliver executed  


conveyance documents to Ryan Air and to respond to Ryan Air's discovery requests. The  


court scheduled a show cause hearing to allow Baker to explain why he had failed to  


comply with these orders.  At the show cause hearing, Baker signed the conveyance  


                   As these post-trial proceedings continued, Ryan Air also filed three motions  

for actual attorney's fees and costs, as specified in the Sublease Agreement.  The first  


motion was filed soon after trial and sought $84,467 in attorney's fees and $887.92 in  

costs from the beginning of the litigation through July 12, 2013.  The second motion was  


filed  concurrently  with  Ryan  Air's  request for  a  show  cause  hearing  and  sought  an  


additional $39,663.50 in post-trial attorney's fees.  The final motion was filed in February  


2014 and sought a further $16,655.25.  Over Baker's repeated objections that Ryan Air's  


                                                           -9-                                                     6990

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

fees were inflated and unreasonable, the superior court granted Ryan Air's attorney's fees  


and costs requests in full.  

                  Baker appeals the superior court's finding that the Purchase Agreement  

remained in full force and effect, the order compelling him to transfer the leasehold to  

Ryan Air, the court's calculation of the remaining balance on the property, and Ryan  

Air's attorney's fees awards.  


                  We review factual findings for clear error and legal conclusions de novo.6  


"A factual finding is clearly erroneous if, after reviewing the record in the light most  


favorable to the prevailing party, we are definitely and firmly convinced that the finding  


is mistaken."7  

                      We resolve mootness issues using our independent judgment because  

applying the mootness doctrine presents a question of law.8  Contract interpretation is also  

a question of law that we review de novo.9  

                                                            When interpreting a contract, our "goal is to  


give effect to the reasonable expectations of the parties."10  

                  We "review a superior court's determination of prevailing party status and  


attorney's fees for abuse of discretion and will overturn such determinations only if they  

         6        Simone H. v. State, Dep't of Health & Soc. Servs., Office of Children's  

Servs., 320 P.3d 284, 288 (Alaska 2014) (citing Sherman B. v. State, Dep't of Health &  


Soc. Servs., Office of Children's Servs., 290 P.3d 421, 427-28 (Alaska 2012)).  

         7        Id. (citing  Barbara P. v. State, Dep't of Health & Soc. Serv., Office of  

Children's Servs., 234 P.3d 1245, 1253 (Alaska 2010)).  

         8        In re Mark V. , 324 P.3d 840, 843 (Alaska 2014) (citing Ulmer v. Alaska  


Rest. & Beverage Ass'n , 33 P.3d 773, 776 (Alaska 2001)).  

         9         ConocoPhillips Alaska, Inc. v. Williams Alaska Petroleum, Inc., 322 P.3d  

114, 122 (Alaska 2014) (citing Villars v. Villars, 277 P.3d 763, 768 (Alaska 2012)).  

         10        Villars, 277 P.3d at 768 (quoting Knutson v. Knutson , 973 P.2d 596, 600  


(Alaska 1999)) (internal quotation marks omitted).  

                                                         -10-                                                   6990

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


are manifestly unreasonable."                        However, "[t]he independent standard of review . . .  


applies to considering whether the trial court properly applied the law when awarding  

attorney's fees."12  

V.	        DISCUSSION  

           A.	        The  Superior  Court  Did  Not  Clearly  Err  By  Concluding  That  The  

                      Purchase  And  Sublease  Agreements  Remained  In  Full  Force  And  


                      Baker argues that the superior court erred by failing to recognize that Ryan                            

Air  had   materially  breached  the  Sublease  Agreement.    Baker  claims  that  Ryan  Air  


defaulted  on  the  Sublease  Agreement  by  altering  the  property  without  prior  written  

consent and by subleasing an aircraft tie-down spot without permission.  Baker argues   

that, as a result of these alleged breaches, he had the "right to terminate the sublease,  

repossess the buildings, and demand damages for repairs" rather than sell the leasehold  


to Ryan Air.  And he claims that the court's conclusion that the breach claims would be  


moot upon completion of the sale "put[] the cart before the horse," because the sale could  


only be completed if Ryan Air were not in default.  Ryan Air responds by noting that the  


superior court found no material breach of contract and supported this conclusion with  


factual findings.  Ryan Air also points out that Baker conceded the mootness issue in his  


testimony at trial.  

                      1.	       Ryan Air did not materially breach the contract.  

                      The superior court found that Ryan Air's renovations were "appropriate"  

under the contract, that the tie-down sublease was a "non-issue" and "not material in any  

           11         State v. Jacob, 214 P.3d 353, 358 (Alaska 2009) (quoting                                    Braun v. Denali  

Borough , 193 P.3d 719, 726 (Alaska 2008)) (internal quotation marks omitted).  

           12        DeNardo v. Cutler , 167 P.3d 674, 677 (Alaska 2007) (alteration in original)  


(quoting Ellison v. Plumbers & Steam Fitters Union Local 375 , 118 P.3d 1070, 1073  


(Alaska 2005)) (internal quotation marks omitted).  

                                                                   -11-	                                                            6990

----------------------- Page 12-----------------------

way,"  and  that  Baker  had  not  provided  Ryan  Air  with  a  valid  notice  of  breach  or  a  

sufficient opportunity to cure.  Baker appeals these findings.13  

                              a.	      Baker waived his right to object to Ryan Air's renovations  

                                       by approving Ryan Air's request for a building permit.  

                    The superior court determined that Ryan Air's renovations were appropriate  

because  Ryan  Air  received  a  building  permit  from  DOT.    The  court  noted  that  the  


Sublease Agreement specifically provided that Ryan Air "[b]efore placing fill material  

or beginning construction of any improvements or demolishing any improvements . . .  

must first obtain the written approval of [DOT and Baker]  in the form of an approved  


building permit."  (Emphasis added.) Baker argues that this finding was clearly erroneous  


because he never provided prior written consent to the demolition work and because the  


project exceeded the scope of the permit.  We disagree.  

                    Baker initially argues that "Ryan Air didn't have anything in writing from  


Baker authorizing Ryan Air's demolition."  (Emphasis in original.)  And he argues that  


Ryan Air only speculated as to Baker's consent. But these claims ignore the email Baker  


sent to DOT, which expressly stated, "Please accept this email as approval from me for  


[Ryan  Air's  proposed]  improvements."    These  improvements,  which  included  the  


replacement  of  exterior  siding  and  the  installation  of  a  new,  heated  concrete  floor,  

necessarily required at least some demolition.  

                    When presented at trial with his email to DOT, Baker testified that he had  


"no choice" but to authorize the project because he learned about it only after Ryan Air  

had begun demolition.  This claim strains credulity.  The Sublease Agreement specified  


an obvious alternative to consent:  Baker could have notified Ryan Air of the breach,  


          13        The superior court also found that Ryan Air was justified in discontinuing  

rent payment from October 2012 to the date of trial because of its prepayments.  Baker  


does not appeal this finding.  

                                                             -12-	                                                          6990  

----------------------- Page 13-----------------------


provided an opportunity to cure, and then terminated the Sublease Agreement if Ryan Air  


refused to comply.  Instead, Baker explicitly approved the project in his email to DOT,  


thereby waiving his right to take action against Ryan for this alleged breach.  While it is  


true that the Sublease Agreement contained an anti-waiver provision,                                          

                                                                                                        we have upheld  


the waiver of contractual rights even in the presence of much more stringent anti-waiver  


                    Baker argues in the alternative that he approved only the limited renovations  


authorized by the building permit, and he claims Ryan Air exceeded the scope of the  



               This argument is somewhat stronger than Baker's initial claim that he did not  

assent at all to the renovations, because Ryan implicitly acknowledged at trial that Ryan  


Air's plans exceeded those specified by the permit.  Nevertheless, for Baker's argument  


to carry weight, Baker would need to have lacked knowledge about Ryan Air's full intent  

when he approved the project and waived his right to object.17  

          14        The anti-waiver provision provided that "[t]he failure by any party to object  

to  a  default  under  or  breach  of  this  Agreement  shall  not  constitute  a  waiver,  either  

expressed or implied, of the right to do so in the event of any future or continuing default  


under or breach of this Agreement."  Baker not only failed to object but affirmatively  





                    See Dillingham Commercial Co. v. Spears, 641 P.2d 1, 7-8 (Alaska 1982)  


(finding an implied waiver despite a "non-waiver" clause stating that "[o]nly waivers in  


writing executed by Landlord shall be effective.  No delay or omission on the part of  

Landlord in exercising any of its rights shall operate as a waiver of such right or any  

other right.").  

          16        Specifically, the permit authorized only the installation of a new boiler, a  


heated concrete floor, an exterior concrete pad  on  one side of the building, and the  

replacement of exterior siding.  

          17        See Deptula v. Simpson, 164 P.3d 640, 644 (Alaska 2007) ("[W]aiver must  

be knowing and voluntary.").  

                                                             -13-                                                       6990

----------------------- Page 14-----------------------

                    While Baker makes this predicate claim, his testimony at trial rebuts it.  


Baker  claims  that  "Ryan  Air  did  not  set  forth  its  plans  to  turn  Building  B  into  a  

warehouse[] and did not request authorization to remove the second story and all the  

floors and walls."   He also states that he would "never" have gone along with the full  


extent of Ryan Air's demolition work.  But according to his own recounting of events,  


Baker  discovered  that  the  building  had  been  "completely  gutted"  in  June  or  July  of  


             If this claim is accurate, Baker knew about the full scope of the project more than  

two years before he authorized it in September 2010.  He can hardly plead ignorance  

about Ryan's intentions.  Therefore, even if his testimony is credited in full, Baker twice  


waived his right to object, first by failing to object to the project for more than two years  


and later by expressly authorizing it.  

                    For these reasons, the court did not clearly err by determining that Ryan  

Air's renovations were not a material breach of contract.  

                              b.	      Ryan Air's tie-down sublease was not a material breach,  

                                       and Baker failed to raise the issue in his pleadings.  

                    The superior court found that Ryan Air's tie-down sublease to DOT was  

"not material in any way" and a non-issue in the case.  Baker contests these findings,  


arguing that this sublease caused him to lose out on the "significant opportunity" to lease  


a tie-down spot to DOT himself and to enjoy "spinoff opportunities."  

                    But the superior court's conclusion that the tie-down breach was immaterial  


was supported by the parties' testimony at trial.  Ryan testified that Ryan Air lost money  


from  the  sublease and entered into the agreement for the sole purpose of pursuing a  


specific spinoff opportunity:  enticing DOT to use its freight services.  Baker admitted  

          18        Baker testified:  "I looked through the windows on the second story and I  


could see daylight through the other side . . . .  [I w]ent and . . .  looked in, and it had  


been completely gutted.  There was no upstairs.  There was no downstairs.  There was  


just ground."  

                                                             -14-	                                                         6990  

----------------------- Page 15-----------------------

that  he  does  not  provide  freight  services,  and  he  has  suggested  no  other  spinoff  


opportunities foreclosed to him by the sublease.  As a result, Baker was not denied any  


short-term  profits,  because  there  were  none.    And  Baker  has  failed  to  prove  lost  

opportunity damages, because he has suggested none.  

                    Moreover, the court's conclusion that the tie-down sublease was irrelevant  

is supported by Baker's failure to raise the issue in his pleadings. Baker's claims of  

breach  covered  only  Ryan  Air's  renovations  and  alleged  failure  to  pay  rent  from  


September 2012 onwards.  

                             c.	       Baker failed to provide Ryan Air with a valid notice of  


                    The superior court concluded that Baker failed to send Ryan Air a valid  


notice of default - a prerequisite for terminating the Sublease Agreement.  The court  


found Baker's eve-of-litigation notice of breach lacking because it did not adequately  


describe the alleged defects or problems and was not copied to DOT.  

                    In his briefing, Baker argues that he provided notice, but he fails to articulate  


any error in the court's conclusion that his notice letter to Ryan Air was inadequate.19  


Instead, Baker's sole argument seems to be that Ryan Air "never contended that it wasn't  

[apprised] of its breaches."  But this is incorrect.  Ryan testified at trial that the notice  

letter contained no particulars about the problems with the renovation project.  


                    Moreover, we agree with the superior court's conclusion that the contents  

of the notice letter were inadequate to apprise Ryan Air of its alleged breaches pertaining  

to the renovations.  Baker's letter merely claimed that "the sublessor has discovered that  


the building has been substantially altered from its original structure causing a decrease  

          19        Baker also argues that his failure to notify DOT was immaterial because  


that provision was intended to benefit DOT, not Ryan Air.  We do not need to reach this  


issue, because the inadequacy of Baker's notice to Ryan Air independently supports the  


court's conclusion that the notice of breach was insufficient.  

                                                             -15-	                                                         6990  

----------------------- Page 16-----------------------


in property value."  But Baker had known about this alteration for years and had at least  


partially consented to it in writing.  For Baker to have provided Ryan Air the "particulars"  


of the alleged default as required by the Sublease Agreement, he would have needed to  

explain how Ryan Air was exceeding the scope of his authorization.  The court did not  

clearly err by concluding that Baker had failed to do so.  


                     2.	       The sale of the leasehold rendered Baker's minor breach claims  


                     At  trial,  Baker  conceded  that  if  the  sale  were  to  proceed,  any  damages  

caused by Ryan Air's renovation project would be moot.20  

                                                                                          He nevertheless contests the  


court's mootness finding.  We review this already conceded argument for plain error  

only.21  "Plain error exists where an obvious mistake has been made which creates a high  

likelihood that injustice has resulted."22  

                                                              We see no such error here.  

                     Because the superior court concluded that the Purchase Agreement remained  


in full force and effect - a finding we affirm - it logically follows that the subsequent  


transfer of the property for the agreed-upon price rendered Ryan Air's remaining alleged  

breaches moot.  Baker's "Notice of Breach of Contract" contained only two alleged  

breaches: unpaid rent and damage to property.  But Ryan Air necessarily reimbursed  


Baker for any unpaid rent by paying Baker the outstanding balance on the property.  And  

          20         Baker was asked:  "If Ryan Air completes the purchase of the leasehold   

interest, then whether or not it's made improvements or repairs or caused damage to the   

building is moot; is that correct?"                   He answered in the affirmative and later conceded,             

"[Y]ou're right, . . . ruining the building is a moot point if [Ryan Air] own[s] it."   

          21        Partridge v. Partridge , 239 P.3d 680, 685 (Alaska 2010) ("We will not  


consider arguments that parties fail to raise in the lower court, let alone arguments they  

have conceded below, unless the trial court committed plain error."  (quoting Tybus v.  

Holland , 989 P.2d 1281, 1285 (Alaska 1999)) (internal quotation marks omitted)).  

          22         Sosa v. State, 4 P.3d 951, 953 (Alaska 2000) (quoting Broeckel v. State,  

Dep't of Corr. , 941 P.2d 893, 897 (Alaska 1997)) (internal quotation marks omitted).  

                                                               -16-	                                                         6990

----------------------- Page 17-----------------------

Ryan Air assumed any loss that stemmed from the alleged diminution in property value.  


Because Ryan Air took possession of the leasehold for the agreed-upon price, Baker and  


his predecessors in interest received their benefit from the bargain: $600,000.  

          B.	       The     Superior         Court's       General        Approach           To    Calculating          The  

                   Remaining Balance On The Property Was Not Clearly Erroneous.  

                   The  superior  court  concluded  that  Ryan  Air  owed  Baker  $127,000  to  

complete  the  sale.    The  court  reached  this  figure  by  finding  that  Ryan  Air  had  paid  


$473,000 in rent and subtracting that amount from the $600,000 purchase price provided  


in the Purchase Agreement.  Baker argues that the court erred by concluding that Ryan  


Air had already paid $473,000, because the court's calculations failed to reflect a contract  


modification  he  claims  occurred  in  2009.    Additionally,  Baker  argues  that  the  court  


double-counted $11,000 in rent payments.  

                   From October 2009 to August 2012, Ryan Air paid Baker $5,000 per month  


in rent instead of the $3,000 required by the Sublease Agreement.  The parties dispute the  

reason for this increase.  Baker testified that, after he bought the leasehold from Baker  

Aviation  and  realized  that  the  terms  of  the  agreement  were  unfavorable  to  him,  he  

approached Ryan to request additional rent and to notify Ryan that if the sale did not  

commence by the end of the year, they would "have to make sure no more rents go  

towards  paying  off  the  total."    Baker  further  claimed  that  Ryan  agreed  to  these  

modifications.    Ryan  acknowledged  that  he  increased  his  rent  payments  at  Baker's  


request,  but  he  characterized  the  increase  as  a  prepayment  that  did  not  change  the  

underlying terms of the contract. Ryan testified that the purpose of the increased rent was  


to help Baker's mother, who was experiencing health problems.  

                   The superior court concluded that "[t]here was never an agreement to raise  


the rent from $3,000 to $5,000" and backed this conclusion with three factual findings.  


Baker contests each of these findings.  

                                                            -17-	                                                      6990

----------------------- Page 18-----------------------

                    First, the court found that Baker was not in a position to unilaterally change  


the terms of the contract:  

                    [Baker] recognized that, from his perspective, the terms were  


                    not a good deal financially . . . .   However, his attempts to  


                    make  changes  were  contrary  to  the  written  terms  of  the  


                    Purchase Agreement and the Commercial Sublease,  which  


                    together gave Ryan Air the option in its sole discretion  to  


                    continue making rental payments of $3,000 per month and to  


                    have those payments applied to the purchase price.  

This finding is not clearly erroneous.  The court accurately summarized the rent payment  

and purchase option provisions of the Purchase and Sublease Agreements.  And Baker  


testified that he unilaterally requested an increase in rent payments and demanded that  

rents no longer apply to the purchase price.  He later admitted on cross-examination that  

he provided no consideration for this requested modification.  

                    Baker  argues  on  appeal  that  Ryan  Air  did  receive  consideration  -  


"additional time to complete the sale after the December 2009 target date."  We find this  


claim unconvincing because it assumes Ryan Air was required to close by December  

2009  -  an  assumption  predicated  on  Addendum  2's  requirement  that  Ryan  Air  


"complete[] the purchase in a reasonable amount of time" after the property became  

"ready for sale."  But the property was not ready for sale in 2009, at least not with a deed  


"showing free title, clear of encumbrances" as required by the Purchase Agreement.  The  


property was still burdened with at least one mortgage, which was attached in 2008 and  

remained until 2013.  Therefore Ryan Air was under no obligation to close in December  

2009.    Without  such  obligation,  Baker's  waiver  of  his  unilaterally  imposed  and  

                                                             -18-                                                       6990

----------------------- Page 19-----------------------


unenforceable           "deadline"         could       not    constitute        consideration.               And       without  

consideration, there could be no modification.24  


                    Second, the court found that, under the Sublease Agreement, any significant  

modification was required to be in writing:  

                    [I]f the parties had intended to change the rental rate from  


                    $3,000 to $5,000 per month, that kind of change was required  

                    to  be  documented  in  writing  as  a  change  to  the  [Sublease  

                    Agreement].    Similarly,  if  the  parties  had  agreed  that  the  

                    rental amount would not be a set-off to the purchase price,  

                    that change also was required to be documented in writing.  

The  text  of  the  Sublease  Agreement  supports  this  conclusion.    It  states  that  "[n]o  

amendment, deletion, addition or novation to or of this Agreement shall be effective  

unless it is completely and unambiguously contained in a writing executed by all the  


parties of this Agreement."  

                    Baker does not deny the absence of a written modification.   Instead, he  


argues that a party may demonstrate a contract modification through evidence of an oral  

agreement along with evidence of the parties' subsequent conduct,25 

                                                                                                     and that after parties  

          23        Baker also argues that Ryan Air received consideration in the                                     form  of  

"some assurance that Baker's mother, a person important to Ryan, would obtain needed                

medical  treatment."    This  is  simply   incorrect  as  a  matter  of  law.    "To  constitute  

consideration, a performance or a return promise must be bargained for."  RESTATEMENT  


(SECOND) OF  CONTRACTS   71(1) (1981); see also id. cmt. a (clarifying that "love and  


affection" are "insufficient" consideration to enforce a promise).  Even if Ryan received  

some  moral  or  emotional  benefit  from  helping  the  Baker  family,  he  received  no  

performance or return promise from Baker.  Thus there was no consideration.  

          24        See Zuelsdorf v. Univ. of Alaska, Fairbanks, 794 P.2d 932, 935 (Alaska  


1990)       ("[A]      modification           of    [an]     agreement         requir[es]        mutual       consent        and  




                    See  Alaska  Statebank  v.  Fairco ,  674  P.2d  288,  292  (Alaska  1983)  


                                                              -19-                                                         6990

----------------------- Page 20-----------------------


have  orally  modified  their  agreement,  principles  of  estoppel  bind  them  to  their  oral  



                         He claims that in the present case "both parties have testified to an oral  

agreement,   and   their   subsequent   conduct   from   August-September   2009   to   the  

commencement of litigation clearly supports that modification."  

                   While his statements of law are unobjectionable, Baker exaggerates the  


extent to which Ryan's testimony and conduct support the claim that the parties modified  


their  contract.    The  parties  did  agree  at  trial  that  Baker  approached  Ryan  for  a  rent  

increase, and that Ryan Air increased its monthly payments by $2,000 from 2009 to 2012.  

However, there is no agreement on how that increase should be characterized.  Baker  

testified that it was an increase in the rental rate representing a contract modification.  


Ryan testified that the increase was a mere prepayment of  rent that did not reflect a  


change  to  the  underlying  contract.    In  light  of  the  Sublease  Agreement  provision  

          25        (...continued)  

("[M]odification of a written contract may be effected either through subsequent conduct  


or oral agreements."); see also R                                                                                     

                                                ESTATEMENT  (SECOND) OF  CONTRACTS   202 cmt. g  

("[T]he conduct of the parties may be evidence of an agreed modification . . . .").  

          26       See Fairco, 674 P.2d at 292 (affirming the superior court's finding that  


"[b]y its conduct and course of dealing Alaska Statebank led the principals into believing  

that payments . . . were not currently required and that no default existed. . . .  Even if a  

default . . . did exist, Alaska Statebank waived the default and was further estopped to  


rely on any default . . . without first demanding payment or giving notice of default.").  


                                                            -20-                                                       6990

----------------------- Page 21-----------------------



prohibiting oral modifications,                     the superior court did not clearly err by finding that the  

lack of a written modification supported Ryan Air's version of events.28  

                      Finally,  the  court  found  that  if  the  parties  had  intended  to  modify  the  

Sublease Agreement, they would have signed Trial Exhibit 18, an unsigned proposed  


Addendum 4 to the Purchase Agreement.  Baker  argues  that Exhibit 18 lacked both  


relevance and foundation because Ryan Air presented no evidence to suggest that Baker  


was previously aware of its existence.  Baker is correct.  Trial Exhibit 18 was introduced  

during Baker's cross-examination, Baker denied ever seeing it, and Ryan Air provided  


no foundational support.  The document should not have been admitted or considered as  


                      But the superior court's other findings provide more than adequate support  


for its conclusion that the parties did not agree to modify the contract in 2009.  Therefore  


the  court  did  not  clearly  err  in  finding  that  Ryan  Air's  increased  monthly  payments  

constituted prepayments and that Ryan Air was entitled to apply those payments to the  

final purchase price.29  

           27         Cf. Freidco of Wilmington, Del., Ltd. v. Farmers Bank                                  , 529 F. Supp. 822,  

831 (D. Del. 1981) ("The lease provided that it could be amended only in writing.  While         

under Delaware law an agreement containing such a provision may be orally amended,  

the existence of an agreement calling for formal amendments is circumstantial evidence  


tending to show that informal amendments did not occur.").  

           28         Moreover, even if the parties did attempt to orally modify the contract, the  

modification would be invalid for lack of consideration, as noted above.  



                      Baker also argues that, even if the parties intended to treat the increased rent  


payments as prepayments, the payments from 2010 on should not be counted toward the  


purchase price because "the parties [separately] agreed that rental payments would not  


be applied to the purchase price . . . beginning in January 2010."  But the superior court  


also rejected Baker's claim that the parties had made this separate agreement.  And,  


again, there was no consideration to support this modification.  We therefore find this  


                                                                   -21-                                                             6990

----------------------- Page 22-----------------------

                   Nevertheless, Baker correctly notes that the superior court undercalculated  

the remaining balance on the  property by $11,000, because three of Ryan Air's rent  


payments were counted twice.  The court relied on Ryan Air's accounting spreadsheet to  


calculate  the  outstanding  purchase  price  of  the  leasehold  and  concluded  that  the  


spreadsheet  omitted  the  three  rent  payments,  which  were  referenced  in  a  separate  


accounting document.  But Baker points out that Ryan Air introduced the accounting  

document only to verify payments already included in the spreadsheet.  Ryan Air agrees  


that the $11,000 was erroneously double-counted.  We therefore remand to allow the  

superior court to address this single issue.  

          C.	      The Superior Court Did Not Clearly Err By Ordering Baker To Sign  


                   The Transfer Documents As Drafted By Ryan Air.  

                   After the trial, Ryan Air sent conveyance documents to Baker's attorney.  

When Baker repeatedly failed to respond to Ryan Air's inquiries about the status of the  

documents, Ryan Air moved to compel Baker to sign them and later moved that the  


property be transferred without Baker's signature.  The court granted both motions,  and  


Baker ultimately signed the conveyance papers.  

                   Baker contends that the warranties contained in the conveyance documents  


were  inconsistent  with  the  "statutory  quitclaim  deed"  specified  by  the  Purchase  


Agreement, and claims that the superior court erred by forcing him to sign the documents  

as drafted.  In response, Ryan Air argues that Baker misconstrues the language of the  


Purchase Agreement and ignores its explicit references to warranties.  

                   1.	       The   parties   originally   bargained   for   more   than   a   simple  

                             quitclaim deed.  

          29       (...continued)  

argument to be without merit.  

                                                           -22-	                                                       6990  

----------------------- Page 23-----------------------


                   The deed specified by the Purchase Agreement is unusual.  The Purchase  

Agreement's pertinent provision states in full:  

                   At closing, Seller shall furnish a statutory quitclaim deed in  

                   form and content as shown on attached Exhibit A, showing  

                  free     title,   clear     of    encumbrances ,           except      conditions,  

                   restrictions,  reservations,  and  rights-of-way  of  record  as  

                   accepted by Buyer.  (Emphasis added.)  

Though this provision references an attached "Exhibit A," the parties agree that Exhibit  

A was never attached.  Another provision of the Purchase Agreement also required Baker  


to  guarantee  that  there  were  no  liens  against  the  property  as  well  as  no  undisclosed  


easements or encumbrances.  

                   Baker argues that the Purchase Agreement did not require him to provide  

any warranties on the property.  He focuses on the provision's "statutory quitclaim"  

language and suggests that the conveyance documents should have been based on AS  

34.15.040, which provides a model quitclaim deed.30  

                                                                             Ryan Air responds by noting that  

Baker's "singular focus" on the term "quitclaim deed" ignores everything that comes after  

it, including the words "showing free title, clear of encumbrances."  

                   Baker claims that the phrase "free title" is undefined in the contract and  


unused in Alaska statutes, regulations, and case law.  While this may be technically true,  

the phrase "free and clear" is commonly found in our cases.31  

                                                                                             And the three words  

          30       "The grantor (here insert the name or names and place of residence), for and                     

in consideration of (here insert consideration) conveys and quitclaims to (here insert  

grantee's  name  or  names)  all  interest  which  I  (we)  have,  if  any,  in  the  following  


described  real  estate  (here  insert  description),  located  in  the  State  of  Alaska."  AS  





                   See, e.g., Partridge v. Partridge , 239 P.3d 680, 684 (Alaska 2010) ("James  


and Erlinda owned the Yamhill property 'free and clear' at the time of trial.");  Wolff v.  

Cunningham, 187 P.3d 479, 484 (Alaska 2008) ("Cunningham . . . desire[d] to obtain  


                                                           -23-                                                      6990

----------------------- Page 24-----------------------


following "free title" - "clear of encumbrances" - leave little room for interpretation;  

even Baker does not directly question their meaning.  


                    Instead, Baker argues that everything after the words "statutory quitclaim  


deed" was inserted to give Ryan Air the option of purchasing the leasehold despite its  


liens  and  encumbrances.    But  this  reading  renders  most  of  the  provision's  language  



                        It  also  ignores  the  specific  warranties  required  under  the  Purchase  

Agreement.  If the parties had intended to contract for a mere quitclaim deed, as Baker  


claims,  there  would  have  been  no  reason  to  include  the  superfluous  language  or  to  

explicitly list warranties against liens, easements, and encumbrances in the Purchase  


                    Despite Baker's attempt to read ambiguity into the language of the contract,  


we see only one way to reasonably interpret the intent of the parties at signing.  The  


parties agreed to start with a quitclaim deed, add the warranties specified in the Purchase  

Agreement, and subtract from those warranties any "conditions, restrictions, reservations,  

and rights-of-way of record" that Ryan Air chose to accept or had previously waived.  We  


therefore conclude that the court did not err by finding that the Purchase Agreement  

anticipated more than a simple quitclaim deed.  

          31        (...continued)  

Igloo Ice free  and  clear of CSED's lien."); Mullins v. Oates , 179 P.3d 930, 933-34  


(Alaska 2008) ("Oates . . . [sought] an order and judgement [sic] declaring that Mullins's  

'rights, title and interest in and to the . . . real property are foreclosed and title to the . . .  


real property is vested in [Oates] free and clear of any right, title and interest [Mullins]  


may have." (alterations in original)).  

          32        See RESTATEMENT (SECOND) OF CONTRACTS  203 cmt. b (1981) ("Since  


an agreement is interpreted as a whole, it is assumed in the first instance that no part of  


it  is  superfluous.");  accord  Alaska  State  Hous.  Auth.  v.  Sipary,  668  P.2d  824,  827  

(Alaska 1983) ("Effect should be given, where possible, to every part of a contract.").  

                                                             -24-                                                       6990

----------------------- Page 25-----------------------


                     2.	        The Purchase Agreement required Baker to provide all of the  

                                warranties included in the conveyance documents.  

                     The superior court ordered Baker to sign a Deed of Conveyance document  

requiring him to guarantee that the property was "free and clear of all mortgages, liens,   

claims, charges, encumbrances, security interests, pledges or title retention agreements  

or leases of any kind or nature."   The accompanying Assignment of Lease document  


further required:  

                     In addition to the representations and warranties set forth in  

                     the [Purchase Agreement and Addenda], Assignor represents  


                     and warrants to Assignee that as of the Closing Date . . . (a)  

                     Assignor  is  the  Lessee  under  the  Ground  Lease;  (b)  the  

                     Ground  Lease  is  in  full  force  and  effect;  (c)  Assignor  has  

                     good title to the leasehold interest in the property; (d) that the  

                     Lease is free of any and all claims, liens and encumbrances,  

                     and (e) Assignor has the legal right and authority to assign  

                     and transfer the Ground Lease . . . .  

                     Baker   claims   the   superior   court   erred   by   forcing   him   to   agree   to  

representations and warranties "in addition to" those set forth in the Purchase Agreement.  


In  response,  Ryan  Air  notes  that  Baker  has  not  articulated  any  warranties  in  the  

conveyance documents that were not included in the Purchase Agreement. We find Ryan  


Air's position more convincing.  

                     Although  Baker  expresses  valid  concern  that  the  warranties  in  the  

Assignment of Lease were stated to be "in addition to" those promised by the Purchase  


Agreement, he fails to explain how the listed warranties actually exceed those bargained  


for. The Purchase Agreement required Baker to warrant that he had full authority to sign  


the  agreement  and  perform  the  sale  and  that  there  were  no  liens  or  undisclosed  

encumbrances on the property.  The agreement also included a "[n]o merger" provision,  


which specified that these warranties would survive closing.  Baker fails to explain how  


                                                                  -25-	                                                           6990

----------------------- Page 26-----------------------


the  warranties  in  the  conveyance  documents  fall  outside  those  already  listed  in  the  

Purchase Agreement.  


                   Baker also argues that Ryan Air's alleged breaches of contract render him  


unable  to  provide  all  the  warranties  enumerated  in  the  conveyance  documents.  


Specifically, he argues that DOT might revoke the underlying lease because Ryan Air's  

renovation project exceeded the scope of the building permit.  This argument might have  

carried weight if the Assignment of Lease promised that the leasehold would remain  


intact after closing.  It does not.  Instead, Baker was required to warrant only that the  

leasehold was intact, free of encumbrances, and transferable by him as of the closing  

date.  Baker's argument is therefore without merit.  

                   Because the Purchase Agreement provided for the warranties included in  


the conveyance documents, we conclude that the superior court did not err by requiring  

Baker to sign the documents as drafted.33  


          D.	      The Superior Court Did Not Abuse Its Discretion By Declining To  

                   Reduce Ryan Air's Attorney's Fees Awards.  

                   The superior court granted Ryan Air's requests for attorney's fees, which  

totaled  $140,785.75.    Baker  argues  that  the  attorney's  fees  awards  were  per  se  


unreasonable in light of the amount in controversy and the simplicity and narrowness of  

the issues.  Baker also criticizes individual  billing entries, claiming that Ryan Air's  


attorney billed for administrative and irrelevant tasks, inflated his hours, and kept vague  


time records.   Ryan Air disputes these claims and notes that Baker's post-trial conduct  


led to no fewer than 40 additional filings, which significantly increased Ryan Air's legal  




                   Because we conclude that the drafted conveyance documents accurately  


reflected the parties' original agreement, we do not need to reach Baker's argument that  

Ryan Air committed constructive fraud by drafting warranties into the documents.  

                                                            -26-	                                                         6990  

----------------------- Page 27-----------------------


                    Baker's primary argument is that Ryan Air's attorney's fees awards were  


per se unreasonable in light of the amount at stake in this case, which Baker claims was  

only $ 144,445.95 - the difference between Ryan Air's and Baker's pre-trial estimates  

for the amount needed to complete the leasehold purchase.  But we have previously  

rejected the bright-line approach Baker advocates:  

                    Some   cases   involve   important   matters   of   principle,   or  

                    personal       liberty,      yet     offer     only     a    modest        monetary  


                    recovery. . . .  Even where a matter of principle is not at stake  


                    and  the  client  pays  his  or  her  attorney  by  the  hour,  the  

                    superior   court's   determination   of   the   maximum   likely  


                    recovery should not become a hard upper limit on the amount  


                    of reasonable actual attorney's fees.  


                    Moreover, as Ryan Air points out, the amount at stake was far greater than  

Baker  suggests.    Had  Baker  succeeded  on  his  counterclaims,  Ryan  Air  might  have  


forfeited  the  $462,000  it  paid  towards  the  purchase  price,  lost  the  $125,000  it  had  

invested in improving the facility, and been found liable for $282,607.35 in contract  


damages.  Compared to the risk of losing nearly $870,000, spending $140,785.75 for the  

assistance of counsel does not appear facially unreasonable.  

                    Baker also argues that the legal and factual issues in this case were too  


simple to justify spending $140,785.75 on attorney's fees.  He emphasizes that the trial  

involved only three witnesses and took only two days.  But other than noting the scope  


of the trial and disputing a few minor billing entries, Baker fails to point to any major  

tasks  on  which  Ryan  Air's  attorney  spent  inordinate  amounts  of  time.    The  largest  


billings in Ryan Air's attorney's fees exhibits covered research, drafting letters  and  



                    Valdez Fisheries Dev. Ass'n v. Froines, 217 P.3d 830, 833 n.19 (Alaska  


2009)  ("[T]he  superior  court  explained  that  its  first  award  was  also  based  on  its  


determination 'that it would not be reasonable for any party to expend attorney fees in  

excess of the maximum likely recovery.'  That assumption was incorrect.").  

                                                             -27-                                                            6990  

----------------------- Page 28-----------------------

motions,  conducting  discovery,  preparing  for  trial,  conducting  the  trial,  and  writing  

proposed findings of fact and conclusions of law at the court's request.  These tasks and  

the times allotted appear reasonable and reveal that Ryan Air's lawyer was diligent but  


not dilatory.  

                    Moreover, the cases Baker cites provide little support for his argument that  


the attorney's fees awards in this litigation were per se unreasonable.  In In re Johnson  


we concluded that an attorney's fee award was excessive because the billings were vague  


                                                                                                                     But we  

and the attorney was unable to account for about a third of the charged fees. 

declined  to  "determine  exactly  what  percentage,  if  any,  is  high  enough  to  make  

attorney's fees per se unreasonable," holding instead that "the higher the attorney's fees  

in relation to the total value of the estate, the more prepared an attorney should be to  



defend those fees."              And though we determined that the attorney failed to prove the  



reasonableness of the unaccounted-for fees, we sustained the rest of the award.                                        Here,  


Ryan Air's attorney accounted for all of his billings, and Ryan Air provided additional  

clarifications  to  the  superior  court  in  response  to  Baker's  specific  criticisms  about  

individual billings.  Baker's invocation of Johnson is therefore inapt.  

                    And in Zeilinger v. SOHIO Alaska Petroleum Co., a wrongful discharge  


case,  we  concluded  that  "the  claimed  actual  fees  of  $200,000  appear[ed]  clearly  


excessive" because the legal issues were relatively straightforward and "[t]he facts . . .  

          35        119 P.3d 425, 434, 436 (Alaska 2005).  The attorney explained only that  

the fees pertained to " 'tax matters' and 'assisting the personal representative in fiduciary  

matters.' "  Id. at 435.  


          36       Id. at 433.  

          37       Id. at 436 ("Because Hughes, Thorsness failed to  meet its burden as to  


$68,500 of the fees, we must vacate the superior court's order to that extent.").  

                                                             -28-                                                       6990

----------------------- Page 29-----------------------


were not particularly complex or unique,                              nor even subject to much dispute ."                           But here  

some of the most critical facts - the interpretation of the contract, whether the parties         

had modified their agreement, and whether Ryan   Air   was   in default - were highly  

contested.  And Baker himself increased the complexity of this case by claiming 14  

separate material breaches of contract in his counterclaim.  

                       Finally, we find Baker's criticisms of Ryan Air's specific billings to be  

unpersuasive.  The attorney's fees provision in the Sublease Agreement provided that  


"[a]ll legal costs and attorneys fees actually incurred by any party to this Agreement to  

enforce the duties or obligations of any other party under this Agreement . . . shall be  

paid to the prevailing party by the other party . . . ."  Baker presents us with many of the  

same arguments he made in his superior court briefing, but he fails to acknowledge that  


Ryan Air provided the court with additional clarifications in response to that briefing.  


The superior court could have reasonably concluded that the language of the Sublease  

Agreement encompassed all of the billings Baker now contests.  Furthermore, Baker  


significantly increased Ryan Air's attorney's fees after the trial by refusing to negotiate  

the transfer of the leasehold in good faith, as ordered by the court.  

                       After independently reviewing Ryan Air's billings, we conclude  that the  

superior court did not abuse its discretion when it made these attorney's fees awards.  



                       We  REMAND  to  allow  the  superior  court  to  adjust  the  judgment  by  


$11,000 to address Ryan Air's double-counted rent payments.  We AFFIRM the superior  

court's decision in all other respects.  

           38          823 P.2d 653, 659 (Alaska 1992) (emphasis added).  

                                                                      -29-                                                                     6990  

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