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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Oakley Enterprises, LLC v. NPI, LLC (8/28/2015) sp-7042

Oakley Enterprises, LLC v. NPI, LLC (8/28/2015) sp-7042

         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  



OAKLY ENTERPRISES, LLC,                               )  

and RYAN FRIESEN,                                     )        Supreme Court No. S-15159  


                           Appellants,                )        Superior Court Nos. 3PA-08-01671 CI  

                                                      )        and 3PA-08-01349 CI (Consolidated)  

         v.                                           )  

                                                      )        O P I N I O N  

NPI, LLC; NPI TIMBER, LLC;  and                       )  

COREY WHITNEY, individually                           )       No. 7042 - August 28, 2015  

and d/b/a WHITNEY LOGGING,                            )  


                           Appellees.                 )  


                  Appeal from the Superior Court of the State of Alaska, Third  


                  Judicial District, Palmer, Kari Kristiansen, Judge.  

                  Appearances:   David D. Clark, Law Office of David Clark,  

                  Anchorage,  for  Appellant.    Jonathon  A.  Katcher,  Pope  &  

                  Katcher, and Debra J. Fitzgerald, Anchorage, for Appellees.  


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


                  Bolger, Justices.   

                  MAASSEN, Justice.  


                  This case arises from a dispute over whether the owner of a wood chipper  

may be held jointly and severally liable, along with two property owners, for damages  


caused to their property by the chipper's leak of diesel fuel.  The chipper's owner had  

leased it to another person, who abandoned it.  The property owners claim they were  

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

only severally liable, if at all, for a portion of the damages and that the chipper's owner             

was liable for the rest.  A jury found that the chipper did not contaminate one of the two       

properties, but as for the other the jury found its owner jointly and severally liable, along       

with the chipper's owner.   The superior court then equitably allocated damages among       

the liable property owner, the   owner   of   the chipper, and the chipper's lessee.  This  

allocation left the property owner liable for most of his own loss.   

                           Both property owners appeal the superior court's decision to equitably  

allocate damages.1                                                                                                    

                                       They also appeal an evidentiary ruling and the award of attorney's  

fees.    We  affirm,  holding  that  the  superior  court  properly  construed  the  governing  


statutes and the evidence rules and that its award of attorney's fees was not an abuse of  



                           Ryan Friesen and Oakly Enterprises, LLC, own properties across the road  


from each other in Wasilla.  Oakly Enterprises is a family-owned corporation, owned  

half by Friesen and half by his father and stepmother.  

                           In 2004 a logger named Corey Whitney leased wood chipping equipment  

from NPI, LLC, a company involved in construction and timber leases.  Whitney later  


entered into a lease with Oakly Enterprises for a shop and a place to store some of the  


leased equipment.  He entered into another lease with Friesen for a heavy equipment  

parking area, where he parked the piece of equipment at issue here - a 1995 Peterson  


chipper he had leased from NPI.  

                           In  early  2006  the  Alaska  Department  of  Environmental  Conservation  

discovered several diesel spills on the Oakly Enterprises property, near the chipper.  In  


             1             Although the property owners fared differently in the superior court, they  

present their arguments jointly on appeal.  

                                                                                  - 2 -                                                                                  7042  

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


June  the  Department  sent  notices  of  violation  to  Whitney  and  Oakly  Enterprises,  



asserting that they had violated state regulations  by failing to contact the Department  


and submit a site characterization plan before cleaning up surface stains from the diesel  


spills.  Neither Whitney nor Oakly Enterprises was cooperative.  In May 2007 Whitney  


notified Oakly Enterprises that he would vacate its property at the end of June, and in  

early July he transported some of the leased equipment back to NPI at Port MacKenzie,  

a  commercial  and  industrial  area  on  Cook  Inlet.    Whitney  left  the  remainder  of  the  


equipment, including the Peterson chipper, in place on Friesen's and Oakly Enterprises'  


                       In July 2007 Friesen hand-delivered a letter to NPI claiming he had become  

"aware of some pretty large oil spills" on his property and would "start cleanup [him]self  


to prevent further pollution" if NPI did not respond within five days.  Four days later he  


moved the Peterson chipper to property owned by his father.  During the months that  

followed, NPI removed most of its remaining equipment from the Friesen and Oakly  


Enterprises properties, but it did not undertake any environmental cleanup.  It recovered  


the Peterson chipper in October 2008.  

                       In  2009  Friesen  and  Oakly  Enterprises  brought  suit  against  NPI  and  

Whitney,  seeking  damages  in  excess  of  $150,000  for  the  contamination  of  their  


properties, costs of cleanup, and rent.3  

                                                                      Whitney did not answer the complaint, and a  

            2           18 Alaska Administrative Code (AAC) 75.335 (2015) provides in relevant   

part, "(a) Before proceeding with site cleanup under the site cleanup rules, a responsible                 

person shall characterize the extent of hazardous substance contamination at the site.                                                             (b)  

A responsible person shall submit a site characterization workplan to the department for          

approval before beginning site characterization work."  



                       Oakly and Friesen each brought suit under a variety of theories, including  


                                                                        - 3 -                                                                  7042

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


default judgment was entered against him. The superior court initially granted summary  


judgment to NPI, holding that NPI was not liable for Whitney's actions in polluting the  

Friesen and Oakly Enterprises properties as the "operator" of the involved "facility" (as  

these terms are defined for purposes of AS 46.03.822, which imposes strict liability for  


damages  and  other  costs  "resulting  from  an  unpermitted  release  of  a  hazardous  


substance"); as the lessor of the Peterson chipper; as Whitney's principal in an agency  


relationship; or through a veil-piercing "sham transaction" theory.  On reconsideration,  


however,  the  superior  court  found  genuine  issues  of  material  fact  regarding  NPI's  


liability under several theories, including whether it could be held liable as an "owner"  


or "operator" under AS 46.03.822 and whether it was liable for rent and other costs  

incurred after Whitney abandoned the Peterson chipper on the plaintiffs' property.  The  


superior court also granted NPI's motion in limine to exclude a report on environmental  


conditions at NPI's Port MacKenzie property, which Friesen had planned to introduce  


"to rebut [NPI's] assertion that it ran a clean camp."   

                    The superior court conducted an eight-day jury trial on the issue of whether  

NPI  was  liable  for  any  of  Friesen's  and  Oakly  Enterprises'  damages.  The  jury  


instructions  included  one  on  "avoidable  consequences,"  proposed  by  NPI,  and  a  


corresponding verdict form asking the jury to affix a  dollar amount to the damages  


Friesen reasonably could have avoided, if any.4  

                                                                          Answering specific questions on the  


trespass, negligence, and agency liability, but they ultimately limited their environmental  

claims to strict liability under AS 46.03.822, and their cases were consolidated.  

          4         The instruction stated:  

                    Ryan Friesen is not entitled to be paid for any loss or for part  


                    of any loss he could have avoided with reasonable efforts and  


                                                              - 4 -                                                        7042

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special verdict form, the jury found that NPI was not the "operator of a facility" from  


which diesel fuel was spilled on Oakly Enterprises' property but that the diesel spill on  


Friesen's property came from the Peterson chipper.  It found that "the reasonable costs  


of repairing the damage to the Ryan Friesen real property from the diesel spills" was  


$38,437, and that Friesen reasonably incurred $14,990 in expenses "in an effort to avoid  

or  reduce  other  losses  he  reasonably  believed  were  caused  by  NPI's  1995  Peterson  



Chipper on his land."             Finally, the jury answered "Yes" to the question whether Friesen  


could "reasonably have avoided all or part of the diesel spill on [his] property," and it  

found that "the dollar amount of loss to Ryan Friesen due to the diesel spill on [his]  

property that [he] reasonably could have avoided" was $7,687.40 (20 percent of the total  

amount it had found to represent the reasonable costs of repair).   

                    NPI filed a post-trial motion asking the court "to equitably allocate damages  

among the parties through the contribution process found in AS 46.03.882(j)."  The court  


granted NPI's motion in a comprehensive order that detailed the history of the parties'  


dispute, set out the jury's factual findings, and identified the equitable factors the court  

considered relevant.  These included the "Gore factors," which the court described in  


                    without undue risk, hardship, or embarrassment, even though  


                    the loss originally resulted from an act or omission for which  

                    NPI or Whitney is legally responsible.  If you decide that it  


                    is more likely true than not true that Ryan Friesen could have  


                    avoided  any  loss  or  any  part  of  any  loss  with  reasonable  

                    efforts and without undue risk, hardship or embarrassment,  


                    you may not require NPI or Whitney to pay the amount Ryan  


                    Friesen could have reasonably avoided.   



                    This latter amount, representing Friesen's expenses in moving the chipper  

from his property to property owned by his father, was reduced by remittitur to $10,787.  

                                                              - 5 -                                                        7042

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shorthand  as  "1)  fault,  2)  amount,  3)  toxicity,  4)  involvement,  5)  care[,]  and  



6)  cooperation."             Other  equitable  factors  the  court  found  relevant  were  "failure  to  

mitigate environmental damage, laches, unclean hands, and moral culpability."  Applying  


these factors to the facts of the case, the court concluded that "[t]he most equitable and  


fairest means of dividing responsibility for the diesel spill is to allocate fault based upon  

the  amount  of  time  each  party  had  responsibility  for  and  control  over  the  leaking  


chipper."   The court found that for 115 days - 96 percent of the 119 days the chipper  


was leaking diesel onto Friesen's property - "both Whitney and Ryan [Friesen] knew  


or should have known that the chipper was leaking, and had the ability to control the  


chipper and/or the land," whereas NPI had knowledge of the leak and control over the  

chipper for only the remaining four percent of time, after Friesen delivered his notice.  


The  court  therefore  made  this  initial  allocation  of  fault:                             48  percent  to  Whitney,  

48 percent to Friesen, and four percent to NPI.    

          6          "[T]he so-called 'Gore Factors[]' find their source in the legislative history  

(and unsuccessful amendment) of CERCLA [the federal Comprehensive Environmental  


Response, Compensation and Liability Act] by then-Representative Al Gore."  Lockheed  


Martin Corp. v. United States , 35 F. Supp. 3d 92, 123 (D.D.C. 2014).  In longhand, the  


factors  are  "[1.]  the  ability  of  the  parties  to  demonstrate  that  their  contribution  to  a  

discharge, release or disposal of a hazardous waste can be distinguished; [2.] the amount  


of  the  hazardous  waste  involved;  [3.]  the  degree  of  toxicity  of  the  hazardous  waste  

involved; [4.] the degree of involvement by the parties in the generation, transportation,  


treatment, storage, or disposal of the hazardous waste; [5.] the degree of care exercised  

by the parties with respect to the hazardous waste concerned, taking into account the  


characteristics of such hazardous waste; and [6.] the degree of cooperation by the parties  

with Federal, State or local officials to prevent any harm to the public health or the  


environment."  Id. (alterations in original) (quoting Envtl. Transp. Sys., Inc. v. ENSCO,  


Inc. , 969 F.2d 503, 508 (7th Cir. 1992)).  

                                                               - 6 -                                                         7042

----------------------- Page 7-----------------------


                    The  court  further  concluded  that  Whitney's  share  of  damages  was  

uncollectible and was thus an orphan share.7  It divided the orphan share between Friesen  

and NPI in proportion to their relative shares of damages, with the result that Friesen was  


responsible for $35,423.54 of the costs of remediating Friesen's property and NPI was  

responsible  for  the  remaining  $3,013.46.    The  court  subsequently  applied  the  same  


analysis to Friesen's expenses in removing the chipper from his property (the $14,990  


the jury found to be his removal expenses, reduced on remittitur to $10,787).  It found  


that NPI could have recovered the chipper for considerably less money than Friesen  

spent moving it but that Friesen and his father "unreasonably and unjustifiably refused  


to return the chipper to NPI for fifteen months."  Using the same percentages it had used  


for the costs of repair, the court concluded that Friesen was responsible for $9,941.30 of  

the removal expenses and NPI was responsible for the remaining $845.70.   


                    The court found that neither NPI nor Friesen was the prevailing party on  


the claim between them.  However, it found that NPI prevailed over Oakly Enterprises,  


and it awarded NPI attorney's fees from Oakly Enterprises in the amount of $36,764.63.  

          7         Under CERCLA, "orphan shares" have been defined as response costs  

attributable to bankrupt or financially insolvent potentially responsible parties, which are  

allocated  or  apportioned  among  all  solvent  potentially  responsible  parties  to  the  


litigation.  See Charter Twp. of Oshtemo v. Am. Cyanamid Co., 898 F. Supp. 506, 508-09  


(W.D. Mich. 1995).  

                    "Potentially responsible party" is another term of art, "promulgated by the  


EPA to represent parties subject to liability for cleanup costs under CERCLA section  

107(a)."      Larry   M.   Sargent,  Environmental   Law   -   AM   International,   Inc.   v.  

International Forging Equipment:  Release Agreements Between Private Parties Under  


CERCLA, 21 MEM .   ST .  U.L.REV . 423, 426 n.28 (1991).  It is reflected in Alaska law:     

"Any  entity  that   may   be  required  to  take  financial  responsibility  for  cleaning  up  a  

contaminated site is a potentially responsible party."  Fed. Deposit Ins. Corp. v. Laidlaw   

Transit, Inc., 21 P.3d 344, 349 (Alaska 2001) (citing AS 46.03.822(a)(3)).  

                                                              - 7 -                                                        7042

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                   Friesen and Oakly Enterprises appeal the superior court's decision to grant  


NPI's  motion  for  contribution.    They  argue  that  the  jury's  avoidable  consequences  


finding apportioned the harms caused by the diesel spill under AS 46.03.822(i) and  


contribution was unnecessary.  They also appeal the superior court's exclusion of the  

report  evidencing  the  condition  of  NPI's  Port  MacKenzie  property,  as  well  as  the  

calculation of NPI's attorney's fee award.  


                    The superior court's decision to allocate and apply contribution to a damage  


award involves the interpretation and application of a statute.   Questions regarding the  


interpretation and application of a statute are "questions of law to which we apply our  


independent judgment."   We interpret statutes "according to reason, practicality, and  


common sense, taking into account the plain meaning and purpose of the law as well as  


the  intent  of  the  drafters."              "Whether  the  superior  court  applied  an  incorrect  legal  

standard is a question of law that we review using our independent judgment."11  


                   We set aside factual findings of a lower court "only when they are clearly  



erroneous."          "[F]actual findings are clearly erroneous when, after a review of the record  


as a whole, we are 'left with a definite and  firm  conviction that a mistake has been  

made.' "13  

          8        See AS 46.03.822.

          9         Grimm v. Wagoner, 77 P.3d 423, 427 (Alaska 2003).

      Native Vill. of Elim v. State , 990 P.2d 1, 5 (Alaska 1999).  

          11        Guttchen v. Gabriel, 49 P.3d 223, 225 (Alaska 2002).  

          12       Fred Meyer of Alaska, Inc. v. Bailey                  , 100 P.3d 881, 883 (Alaska 2004).  

          13       Id . at 884 (quoting Bennett v. Bennett , 6 P.3d 724, 726 (Alaska 2000)).  

                                                            - 8 -                                                      7042

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                    "We review the superior court's decision to admit or exclude evidence for  


an abuse of discretion."    But "[t]he correct scope or interpretation of a rule of evidence  


creates a question of law 'to which this court applies its independent judgment, adopting  

the rule most persuasive in light of reason, precedent and policy.' "15  

                    "We  review  an  award  of  attorney's  fees  under  an  abuse  of  discretion  


                   "The trial court has broad discretion in awarding attorney's fees; this court  


will  not  find  an  abuse  of  discretion  absent  a  showing  that  the  award  was  arbitrary,  


capricious, manifestly unreasonable, or stemmed from improper motive."                                           


          A.	       The Superior Court Did Not Err When It Granted NPI's Post-Trial  


                   Request         For      Contribution            And       Equitable          Allocation         Under  

                   AS 46.03.822(j).  

                   Alaska Statute 46.03.822(a) provides that "the owner and the operator of  


a . . . facility, from which there is a release . . . of a hazardous substance,"18  is "strictly  



liable,  jointly  and  severally,  for  damages."                      This  is  Alaska's  analog  to  the  federal  

Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA),  

          14	       Greene v. Tinker, 332 P.3d 21, 31 (Alaska 2014).  

          15        City of Bethel v. Peters, 97 P.3d 822, 825 (Alaska 2004) (quoting                              State v.  

Coon, 974 P.2d 386, 389 (Alaska 1999)).  

          16	       Ware v. Ware, 161 P.3d 1188, 1192 (Alaska 2007).  



                   Id . (quoting United Servs. Auto. Ass'n v. Pruitt ex rel. Pruitt, 38 P.3d 528,  

531 (Alaska 2001)).  

          18       AS 46.03.822(a)(2).  "Facility" is broadly defined to include such things  

as a "structure," "equipment," and a "site or area at which a hazardous substance has  

been       deposited,          stored,       disposed          of,     placed,        or     otherwise          located."  


AS 46.03.826(3)(A)(i), (ii).  

          19       AS 46.03.822(a).  

                                                            - 9 -	                                                     7042

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which imposes strict joint and several liability under similar circumstances.                                          Because  


this case was brought under section .822, our analysis turns first to the plain language of  

that statute;21 federal law interpreting CERCLA is persuasive but not controlling.22  

                    A  person  can  escape  the  joint  liability  imposed  by  subsection  .822(a)  

through  apportionment.    Under  subsection  .822(i),  "a  person  otherwise  jointly  and  


severally  liable  under  [subsection  .822(a)]  is  relieved  of  joint  liability  and  is  liable  


severally for damages and costs . . . if the person proves that (1) the harm caused by the  

release . . . is divisible; and (2) there is a reasonable basis for apportionment of costs and  



damages to that person."                 "Equitable considerations play no role in the apportionment  

          20        42 U.S.C.  9607 (2012).                We have recognized that the Alaska legislature  

crafted the current version of AS 46.03.822 using CERCLA "as a pattern."                                        Fed. Deposit  

Ins. Corp. v. Laidlaw Transit, Inc. , 21 P.3d 344, 353-54 (Alaska 2001); see also Berg v.  

Popham , 113 P.3d 604, 606 (Alaska 2005) (identifying section .822 as "Alaska's version  


of [CERCLA]").   

          21        State, Dep't of Commerce, Cmty. & Econ. Dev., Div. of Ins. v. Alyeska  


Pipeline Serv. Co. , 262 P.3d 593, 597 (Alaska 2011) (explaining that under the "sliding  

scale approach" to statutory interpretation, "[t]he plainer the statutory language is, the  

more convincing the evidence of contrary legislative purpose or intent must be." (quoting  

Gov't Emps. Ins. Co. v. Graham-Gonzalez, 107 P.3d 279, 284 (Alaska 2005))).  



                    See Berg, 113 P.3d at 609 ("Th[e] difference between Alaska and federal  


law reflects our legislature's intent to expand liability beyond CERCLA's standards.").  



                    AS 46.03.822(i).  Cf. Burlington N. & Santa Fe Ry. Co. v. United States,  


556 U.S. 599, 614 (2009) ("[A]pportionment is proper when 'there is a reasonable basis  

for   determining   the   contribution   of   each   cause   to   a   single   harm.'   "   (quoting  


   ESTATEMENT (SECOND) OF TORTS  433A(1)(b) (1965))).  Subsection .822(i) is similar  


to Restatement  433A, which allows apportionment of damages "among two or more  


causes  where  (a)  there  are  distinct  harms,  or  (b)  there  is  a  reasonable  basis  for  


determining the contribution of each cause to a single harm."  Subsection .822(i) differs  

in  that  it  requires  a  showing  of  both  distinct  harms  and  a  reasonable  basis  for  


                                                              -  10 -                                                      7042

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


analysis; rather, apportionment is proper only when the evidence supports the divisibility  


of  the  damages  jointly  caused  by  the  [potentially  responsible  parties]."                                  Persons  


relieved of joint and several liability by apportionment are liable for only their own  


divisible shares of costs and damages.  The burden of proof is on the party seeking to  


avoid joint and several liability; this furthers the legislative policy that determinations of  

liability should be based on status, not fault, and should not stand in the way of prompt  


environmental response.                 


                    "Not  all  harms  are  capable  of  apportionment,  however";                             jointly  and  


severally liable parties who cannot prove the divisibility of harm and a reasonable basis  


for apportionment remain liable for the entire harm.                             But they may bring claims for  

contribution against other persons who are also jointly and severally liable for the same  



harm, either in the same civil action or in a subsequent one.                              Thus, once a party with  


a direct claim for damages against another has been found jointly and severally liable for  

          24       Burlington N. , 556 U.S. at 615 n.9.  

          25       See Laidlaw Transit, 21 P.3d at 348 ("When the legislature created a strict  

liability regime for hazardous substance contamination, it expressed its judgment that  

negligence   remedies   were   not   adequately   controlling   the   hazardous   substance  

contamination problem.").  

          26       Burlington N. , 556 U.S. at 614-15.  

          27       See Spruce Equip. Co. v. Maloney, 527 P.2d 1295, 1298 (Alaska 1974)  

("Where the harm is single and indivisible, it is not apportioned between the plaintiff and  


the defendant, in the absence of a statute providing for such division of the damages  

upon  an  arbitrary  basis."  (quoting  RESTATEMENT  (SECOND)  OF  TORTS    465  cmt.  c  


          28       AS 46.03.822(j); Laidlaw Transit , 21 P.3d at 354-55 (recognizing direct  

private  cause  of  action,  as  well  as  cause  of  action  for  contribution,  to  recover  for  

damages to property caused by environmental contamination under AS 46.03.822).  

                                                           -  11 -                                                     7042

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


a release of hazardous substances, the court may, as it did here, "recast the direct claim  


as a claim for contribution upon conclusion of the litigation."                                  

                    In contrast with apportionment, which relates to the responsibility of a  


particular cause for a particular amount of damages, contribution claims essentially seek  


to allocate damages equitably among those who share responsibility.                                           Contribution  


under subsection .822(j) allows parties who are jointly and severally liable to recover  


from each other on the basis of equitable factors that the superior court determines are  



appropriate to the case.               But a person who has been "relieved of joint liability and is  

liable   severally   for   damages   and   costs   attributable   to   that   person"   under   the  

apportionment analysis of subsection .822(i) cannot be made to contribute to persons  

who remain jointly and severally liable for all the damages; such a person is no longer  


an "other person who is liable under (a) of this section" and who can be pursued for  

contribution under subsection .822(j).  


                    On this appeal, there is no dispute that Friesen and NPI were both strictly  

liable under section .822(a) for the diesel spill on Friesen's property, as owners and  


operators of the "facility" (broadly defined by statute to include both the equipment and  

          29        Id. at 350.  

          30        See   McLaughlin   v.   Lougee,   137    P.3d   267,   275-79   (Alaska   2006)  

(discussing  history  of  contribution  claims  in  Alaska  and  recognizing   common  law  

contribution   remedy  "because  it  furthers  the  goal  of  apportioning  of  tort  losses  in  

accordance with each responsible person's percentage of fault").  

          31        See Laidlaw Transit, 21 P.3d at 350 (recognizing that "when a potentially  


responsible party sues for direct damages under the federal counterparts to subsections  


.822(a)  and  (j),  the  federal  statutes  allow  the  claim,  but  leave  room  for  equitable  


distinctions upon conclusion of the litigation").  

                                                             -  12 -                                                       7042

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



the site   ) where the spill occurred.  But Friesen argues that the superior court erred when  


it granted NPI's claim for contribution and applied the equitable analysis.  He contends  


that contribution was inappropriate in this case because the jury had already apportioned  


the damages for which he could be held severally liable under subsection .822(i) when,  


in response to the verdict's questions about avoidable consequences, it identified the  


amount of damages he reasonably could have avoided.  In his view, the jury's finding  


that he reasonably could have avoided some of the damages was a determination that he  


was  not  responsible for any of the other damages.   We reject this argument for  the  

reasons that follow.   

                    1.	       The  jury's  finding  of  avoidable  consequences  was  not  an  

                              apportionment under AS 46.03.822(i).  

                    In  its  most  common  configuration,  the  damages  rule  of  avoidable  


consequences bars injured parties from recovering damages for any harm they could  


have avoided "by the use of reasonable effort or expenditure after the commission of the  


            When a fact-finder has concluded that an injured party reasonably could have  


avoided   some   of   the   harm,   the   injured   party's   damages   may   be   reduced   by  


apportionment.             But as noted above, a party seeking apportionment under subsection  

          32	       See supra note 18.  

          33        RESTATEMENT  (SECOND)  OF  TORTS    918  (1979);  see  also  Anchorage  

Indep. Sch. Dist. v. Stephens , 370 P.2d 531, 533 (Alaska 1962) ("It is a cardinal rule in  


the law of damages that a plaintiff, with an otherwise valid right of action, is denied  


recovery for so much of the losses as are shown to have resulted from failure on his part  


to use reasonable efforts to avoid or prevent them.                               This  rule  . . .  is known as the  


avoidable consequences rule.").  

          34        See  RESTATEMENT  (SECOND)  OF  TORTS    433A  cmt.  f  (1979)  ("The  


damages rule as to avoidable consequences, stated in  918, which denies recovery for  


the aggravation of personal injuries or other harm resulting from the plaintiff's failure  


                                                              -  13 -	                                                     7042

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

 .822(i) must make a threshold showing that the harm is divisible and there is a reasonable  


basis  for  apportionment.               Here,  we  conclude  that  the  jury's  finding  of  avoidable  


consequences was not an apportionment under subsection .822(i), as Friesen argues,  


because neither the parties nor the court intended it to be and because Friesen did not  


make the threshold showing.  

                    The jury was specifically instructed to determine whether there was any  

loss  Friesen  "could  have  avoided  with  reasonable  efforts  and  without  undue  risk,  


hardship  or embarrassment, even  though  the loss originally  resulted  from  an  act  or  

omission for which NPI or Whitney is legally responsible."  In its special verdict form  


the jury identified $7,687.40 as "the dollar amount of loss to Ryan Friesen due to the  

diesel  spill  on  the  Ryan  Friesen  property  that  Ryan  Friesen  reasonably  could  have  

avoided."  The jury made no other findings on the subject of Friesen's liability.  Its  

finding that he could have avoided some consequences of the spill did not resolve his  

liability as an owner for the remainder of the harm the spill caused - liability which,  

absent the required findings, was joint and several strict liability regardless of fault.  


                    A review of the trial proceedings shows that the parties did not intend the  

jury to use the "avoidable consequences" instruction to apportion to Friesen a several  

share of harm.  Friesen initially took the position that the jury should not be asked to  


apportion damages; NPI's counsel, on the other hand, suggested that "the court could be  


helpfully informed by the jury's input on apportionment" without feeling bound by it.  


But the parties' positions evolved over several days, as their counsel debated whether the  


jury should have any input into the apportionment of damages and, if not, whether it  


should be informed of the court's role in apportioning damages after trial.  Friesen asked  


to use due care to avoid it after the commission of the tort, frequently requires such  


apportionment, and is merely an application of the rule stated here.").  

                                                            -  14 -                                                     7042

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


that the jury be instructed, "You will be asked to determine the total amount of damages  


to the property; the court will also decide  . . . how much damages to assign to each  


party."  NPI objected, arguing that such an instruction would confuse the jury, cast doubt  


on its work, and prompt it to speculate about what the court would do.  The court decided  

not to inform the jury about the possible post-verdict process.   

                     At the end of NPI's case Friesen moved for a directed verdict on whether  


harm  could  be  apportioned,  on  grounds  that  NPI  had  failed  to  prove  the  factual  


prerequisites.  The court suggested, as it had before, that the jury be asked to decide the  

issue, to which Friesen's counsel responded that NPI "hasn't produced any evidence  


regarding divisib[ility].  So it's not a question that can go to the jury."  The court denied  


the motion, explaining that it was still unclear whether the issue would be submitted to  

the jury in a second trial phase or decided post-trial by the court.  The court asked for  


briefing on the issue, but it does not appear the parties submitted any before the close of  



                     Still, it is clear from the record that both parties ultimately understood the  


jury was not being asked to apportion damages.  Friesen's counsel told the jury in his  


closing argument that it was being asked to determine the total amount of damage caused  


to his clients' property but not "to do any kind of allocation of fault . . . I don't want you  


to  go  back  to  the  jury  room  and  say,  .  .  .  we  think  perhaps  NPI  is  only  30  percent  


at . . . fault; and, therefore, 30 percent of the total damages we're going to write in here.  


That's not how you do it."  Before the court sent the jury out to deliberate, and referring  

specifically  to  "[subsection]  (i)  of  the  State  CERCLA  statute  [the  apportionment  

provision], whether that becomes a jury question or not," the court asked the parties  


whether they now were in agreement that apportionment was a question to take up only  


after the verdict.  NPI agreed that it was.  Friesen argued that the jury should at least be  

                                                                -  15 -                                                         7042

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

allowed to allocate damages as between Friesen and Whitney, but the court explicitly     


                   Finally, after the jury returned its verdict and the jurors were polled, the  

court asked the parties whether they "need[ed] the court to do any further inquiry on  

damages or apportionment or anything; the jury can go?" to which counsel for both  

parties answered in the affirmative.  


                   In sum, though positions shifted during trial, it is clear that neither party  


ultimately expected that the jury would decide how damages would be apportioned for  

purposes   of   subsection   .822(i),   notwithstanding   the   "avoidable   consequences"  


instruction, and neither party asked that the jury make factual findings that could satisfy  

the prerequisites of that subsection.  We conclude, therefore, that the jury's finding of  

avoidable consequences as to some damages was not, and was not intended to be, an  


apportionment of damages for purposes of subsection .822(i).  By deciding that Friesen  


could have avoided certain damages with reasonable effort, the jury was not deciding  

that he was not jointly and severally liable for the rest.  

                   2.	       The superior court properly ordered contribution pursuant to  

                             AS 46.03.822(j).  

                   Following  trial,  NPI  filed  a  motion  for  "contribution  and  equitable  


allocation" under AS 46.03.822(j).  The superior court granted the motion and properly  


                                                                              It conducted an analysis pursuant  

"recast the direct claim as a claim for contribution." 

to subsection .822(j), in which it equitably allocated the entire $38,437 in remediation  


damages among Whitney, Friesen, and NPI.  It properly relied on the jury's finding that  


Friesen could have avoided some of his damages to hold that he was "a non-innocent  


[potentially responsible party]" who could not avail himself of an "innocent landowner"  

          35       See Laidlaw Transit, 21 P.3d at 350.  

                                                           -  16 -	                                                      7042  

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


defense.  And the court was acting within its authority under Alaska law when it made  


equitable findings in the contribution phase independent of the jury findings to support  

its allocation of damages.36  

                         The court applied the same contribution analysis to the jury's award of  

$14,990  (reduced  on  remittitur  to  $10,787)  for  "expenses  Ryan  Friesen  reasonably  


incurred in an effort to avoid or reduce other losses he reasonably believed were caused  


by NPI's 1995 Peterson Chipper on his land" - damages Friesen labels as "mitigation  

damages."  He argues that "[i]nterpreting AS 46.03.822(j) to allow contribution for  


mitigation is an absurd result."   But he does not explain how section .822 could be  

interpreted  in  any  other  way,  or  why  mitigation  expenses  should  be  treated  any  

differently than any other recoverable damages for purposes of contribution.  


                         Strict liability under subsection .822(a) was the only cause of action that  

went to the jury.  The parties apparently agreed that among the damages Friesen could  

ask the jury to award under subsection .822(a) were the mitigation expenses he incurred  


in moving the chipper from his land.  The court so instructed the jury, the mitigation  

expenses were awarded under that category on the special verdict form, and there is no  

argument  on  appeal  that  the  removal  costs  were  not  recoverable  as  damages  under  



subsection .822(a).                     The "damages and costs" that may be allocated under subsection  

            36           See Vinson v. Hamilton                     , 854 P.2d 733, 736 (Alaska 1993) ("In Alaska, the               

right to a jury in civil cases 'is preserved to the same extent as it existed at common law,'                     

in  suits  where  the  amount  in  controversy  is  more  than  $250.    If   a   party  seeks  only  

equitable relief, then there is no right to a jury trial." (quoting Alaska Const. art. I,  16)).   

            37           Under  the  statutes'  broad  definitions,  "damages"  include  "damages  to  


persons," AS 46.03.822(m)(1), and "include but are not limited to injury to or loss of  


persons or property, real or personal, loss of income, loss of the means of producing  

income, or the loss of an economic benefit."  AS 46.03.824 (emphasis added).  We  

observed in Kodiak Island Borough v. Exxon Corp. ,  991 P.2d 757, 764 (Alaska 1999),  



                                                                            -  17 -                                                                     7042

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

.822(j) are not defined any differently than they are in subsection .822(a).  We see no  


error in the court's analysis.                 


          B.	       The Superior Court Did Not Abuse Its Discretion By Excluding The  

                    Environmental Report Regarding NPI's Port MacKenzie Property.  


                    The superior court granted NPI's motion to exclude a consultant's report  


on the environmental condition of NPI's property at Port MacKenzie, three years after  


the diesel spill at issue here, concluding that the report was "inadmissible Rule 404  


evidence and would result in confusion to the jury."  Alaska Evidence Rule 404 governs  

                                                                39 it provides that "[e]vidence of other . . . acts  

the admissibility of "propensity" evidence;                                                                              

is not admissible if the sole purpose for offering the evidence is to prove the character  


of a person in order to show that the person acted in conformity therewith."40  Propensity  


evidence may be admitted, however, if it is offered "for a proper purpose, 'including, but  



that "[n]othing in the wording or legislative history of the hazardous substances statutes  


hints that subsection .822(a)'s more recently added examples of compensable harms  

were meant to exclude other claims for different spill-related harms or to constrict the  

universe of future recovery - for municipalities or for any other prospective claimants."  


(Emphasis added.)  



                    Friesen does not challenge the findings that form the factual basis for the  

superior court's allocation of damages or the equitable factors that it chose to apply.  



                    "In this context, the phrase  'propensity evidence' is legal shorthand; it  

means:  evidence of a person's other bad acts whose  sole  relevance is to prove the  

person's character, so that the person's character can then be used as circumstantial  


evidence  that  the  person  acted  true  to  character  during  the  episode  being  litigated."  

Bingaman v. State , 76 P.3d 398, 403 (Alaska App. 2003).  

          40        Alaska R. Evid. 404(b)(1).  

                                                             -  18 -	                                                      7042

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

not  limited  to,  proof  of  motive,  opportunity,  intent,  preparation,  plan,  knowledge,  


identity, or absence of mistake or accident.' "                        

                   Oakly  Enterprises  argues  that  the  environmental  report  was  admissible  


under Alaska Evidence Rules 404 and 406 to show that the spill from  the Peterson  

chipper was due to "NPI's corporate culture [which] allowed for polluting" and was  

therefore not the "result of a mistake or an accident."  We reject this argument.  The  

proposed  use  of  the  evidence  can  only  reasonably  be  characterized  as  to  show  a  

propensity  -  i.e.,  because  NPI  was  responsible  for  pollution  found  at  a  different  

location, it must be responsible for the pollution on Friesen's and Oakly Enterprises'  


                                            The superior court's decision to exclude the report under  

property three years earlier.  

Evidence Rule 404 was not an abuse of discretion.  

                   Nor was the report admissible under Evidence Rule 406, which allows  

evidence of a person's habit or an organization's routine practice "to prove that the  


conduct or the person or organization on a particular occasion was in conformity with  


the habit or routine practice."  To be admissible, evidence of habit or routine practice  


must demonstrate, at the very least, a "regular practice of meeting a particular kind of  


situation  with  a  specific  type  of  conduct."                     A  habit  is  one  that  occurs  with  such  

          41       Conley  v.  Alaska  Commc'ns  Sys.  Holdings,  Inc., 323                         P.3d  1131,  1136  

(Alaska 2014) (quoting Alaska R. Evid. 404(b)(1)) (emphasis omitted).  

          42       See Wickwire v. Arctic Circle Air Servs., 722 P.2d 930, 934 (Alaska 1986)  


("[E]vidence  of  negligence  in  inspecting  one  plane  is  not  admissible  as  proof  of  

negligence in inspecting another plane."); Am. Nat'l Watermattress Corp. v. Manville ,  


642 P.2d 1330, 1336 (Alaska 1982) (holding that it was error to allow testimony in  


negligence action against waterbed manufacturer when it concerned the manufacturer's  


post-accident conduct in not recalling the product or issuing warning).  



                   Commentary, Alaska R. Evid. 406, first paragraph (quoting MCCORMICK  


                                                           -  19 -                                                    7042

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

frequency as to become nearly reflexive and automatic.44  This view "aligns with a policy  


of caution in admitting evidence of a pattern of conduct as habit, out of concern that the  

                                                                                                                           45   As  

rule admitting habit evidence will swallow the rule excluding character evidence." 

applied to this case, it would be unreasonable to conclude that a  report of environmental  


contamination three years after the diesel spill at issue shows NPI's "regular practice of  


meeting a particular kind of situation with a specific type of conduct."  The superior  


court did not abuse its discretion when it held the evidence inadmissible under Rule 406.  


                    Finally, evidence admissible under other rules must still be excluded under  


Alaska Evidence Rule 403 if its probative value is outweighed by its unfairly prejudicial  


                And  Evidence  Rule  404(b)(1)'s  presumption  that  propensity  evidence  is  


inadmissible "alters the normal Rule 403 balancing test" so that the party seeking to pass  


the  test  "must  show  that  the  evidence's  use  for  non-propensity  purposes  will  be  


substantial  enough  to  outweigh  the  substantial  risk  of  prejudice  that  such  evidence  


always carries."             Evidence of conditions at NPI's Port MacKenzie property had little  


relevance to whether NPI's Peterson chipper caused pollution on Oakly Enterprises'  

property. The three-year span between the spill and the report made its conclusions even  



ON  EVIDENCE   195, at 462 (2d ed. 1972)).  

          44        See Wacker v. State, 171 P.3d 1164, 1169 (Alaska App. 2007).  



                    Id. (citing STEPHEN A. SALTZBURG ET AL ., 2 FEDERAL RULES OF EVIDENCE  

MANUAL   406.02 (9th ed. 2006)).  

          46        See  Conley,   323  P.3d   at   1136   (noting   that   if   a   court   determines  that  

propensity evidence is admissible for a proper purpose under Evidence Rule 404(b)(1),  

then Evidence Rule 403 "requires the court to weigh the probative value of the evidence  


against the danger of unfair prejudice").  

          47        Id . at 1144 (Fabe, C.J., dissenting).  

                                                              - 20 -                                                       7042

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

less relevant to the issues being litigated.  And the superior court, in excluding the report,  


further noted that it would confuse the jury, likely because of its remoteness from the  


events at issue in terms of both time and geography.  For all these reasons, we see no  


abuse of discretion in the superior court's exclusion of the report.  

          C.	       The  Superior  Court  Did  Not  Abuse  Its  Discretion  In  Its  Award  of  

                    Attorney's Fees Against Oakly Enterprises.  

                    For cases that go to trial, prevailing parties who do not recover money  

judgments  are  entitled  to  fee  awards  that  are  30  percent  of  their  "reasonable  actual  


                                                                         48  The superior court determined that  

attorney's fees which were necessarily incurred."     

neither Friesen nor NPI was a prevailing party on the claim between them, but that NPI  


had prevailed over Oakly Enterprises and was entitled to attorney's fees of $36,764.63.  


The court's starting point in calculating the fee award was NPI's claimed actual fees of  


$321,812.50.  From this amount it subtracted $76,715, reflecting work done during the  


contribution phase when Oakly Enterprises was only minimally involved.  The court  


divided the remainder, allocating half to NPI's litigation against Friesen and half to its  


litigation against Oakly Enterprises.  Of the half of the total attributable to the litigation  


against Oakly Enterprises, the court awarded NPI 30 percent of it as required by Alaska  


Civil Rule 82(b).  

                    Oakly  Enterprises  contends  that  NPI's  fees  should  have  been  further  


reduced because they were disproportionate to both Oakly Enterprises' fees, which it  

claims were only $75,000, and the amounts ultimately at issue.   

                    We have held that "[a]n attorney's fees decision 'should not be disturbed  


                                                                  The  reasonableness  of  fees  depends  on  a  

unless  it  is  manifestly  unreasonable.'  "                                                        

          48        Alaska R. Civ. P. 82(b)(2).  

          49        Alaskan Crude Corp. v. State, Alaska Oil & Gas Conservation Comm'n                                         ,  


                                                            - 21 -	                                                      7042

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

number of factors, including whether there was a trial,  "the complexity of the litigation,  

the length of trial, and the reasonableness of the attorneys' hourly rates and the number  



of hours expended."              A large discrepancy between the fees incurred by the winning and  


losing sides "can be some evidence that [the prevailing party's] fees are unreasonable,"  


but "it is not conclusive on that point as there are a number of other possible explanations  


                                       For example, "burdens assumed by opposite sides of litigation  

for such a discrepancy." 


are not necessarily equal, and it is a judgment call as to whether such a discrepancy  


reflects  over-preparation  and  over-billing."                         In  this  case,  Oakly  Enterprises'  claim  


against NPI involved summary judgment proceedings and an eight-day jury trial.  The  

trial judge was personally aware of the quality and quantity of the work NPI's attorneys  


performed.  Her calculation of the award - including a list of reductions for specific  


entries  devoted  to  post-trial  proceedings  -  shows  that  she  carefully  reviewed  the  


itemized billing records in support of NPI's application.  We see no abuse of discretion  


in her conclusion that a discrepancy in fees did not require further reduction.                                       


309 P.3d 1249, 1254 (Alaska 2013) (quoting Miller v. Matanuska-Susitna Borough , 54  


P.3d 285, 289 (Alaska 2002)).  

          50        Krone v. State, Dep't of Health & Soc. Servs. , 222 P.3d 250, 253 (Alaska  


2009) (internal quotation marks omitted).  

          51        Gamble v. Northstore P'ship, 28 P.3d 286, 289-91 (Alaska 2001).  

          52        Id . at 289-90.  

          53        Oakly Enterprises highlights the work on an attorney's fees motion as an  

example  of  what  it  claims  to  be  excessive  billing  by  NPI's  attorneys.     The  motion,  

apparently drafted episodically over the course of se                      veral  months,  summarized the case's  

history before a        ddressing the pr       evailing party issue,  attorney's f   ees unde               r bot  h Alaska  

Civil  Rule  68  and  Rule  82,  and  the  allocation   of   fees  and  costs  between  Oakly  


                                                            - 22 -                                                       7042

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

                    Oakly Enterprises correctly observes that NPI's total fees exceeded the  

amount in controversy.  But "[w]e have never stated that spending more on attorney's  


                                                                                                   Friesen  and  Oakly  

fees  than  the  amount  in  controversy  is  per  se  unreasonable." 

Enterprises  alleged  in  their  complaint  that  their  property  damage  and  cleanup  costs  


would "exceed $150,000," and the summary judgment motions, jury trial, and extensive  


post-trial proceedings provide an explanation for why the costs of litigation were hard  

to contain.  Again, the claimed lack of proportionality does not cause us to question the  


superior court's exercise of its discretion.                     

V.        CONCLUSION  

                    The judgment of the superior court is AFFIRMED.  


Enterprises and Friesen.  Giving due deference to the superior court's closer view of the  


attorneys, their work, and its significance in the litigation, we see no abuse of discretion  


in the court's failure to reduce the fees claimed for this activity.  



                    Okagawa v. Yaple, 234 P.3d 1278, 1282 (Alaska 2010).   Cf. Rhodes v.  


Erion , 189 P.3d 1051, 1053 (Alaska 2008) (stating "that whether [defendant] spent more  

on her defense than the amount in controversy is not dispositive" when determining  

whether attorney's fees award should be reduced).  



                    Friesen  includes  a  challenge  to  the  superior  court's  prevailing  party  

determination in the appellants' statement of issues presented for review, but it is not  


addressed in his argument, and we therefore consider it waived.  See Adamson v. Univ.  

of Alaska, 819 P.2d 886, 889 n.3 (Alaska 1991) ("[W]here a point is given only a cursory  

statement  in  the  argument  portion  of  a  brief,  the  point  will  not  be  considered  on  


                                                           - 23 -                                                      7042

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