Alaskaland.com, LLC v. Cross (9/25/2015) sp-7057

Alaska Supreme Court Opinions made Available byTouch N' Go Systems and Bright Solutions

Touch N' GoŽ, the DeskTop In-and-Out Board makes your office run smoother.

You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Alaskaland.com, LLC v. Cross (9/25/2015) sp-7057

Alaskaland.com, LLC v. Cross (9/25/2015) sp-7057

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

corrections@appellate.courts.state.ak.us.

THE SUPREME COURT OF THE STATE OF ALASKA

ALASKASLAND.COM, LLC, )

) Supreme Court No. S-15270

Appellant, )

) Superior Court No. 3AN-12-04799 CI

v. )

) O P I N I O N

KEVIN CROSS d/b/a CROSS & )

ASSOCIATES and SALMAN GROUP ; ) No. 7057 - September 25, 2015

WILLIAM W. JACQUES; MATT )

DIMMICK; and KELLER WILLIAMS )

REALTY - ALASKA GROUP, )

)

Appellees. )

)

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

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

Appearances: Brian J. Stibitz, Reeves Amodio LLC,

Anchorage, for Appellant. Matthew W. Claman and

James B. Stoetzer, Lane Powell LLC, Anchorage, for

Appellees.

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

Bolger, Justices.

WINFREE, Justice.

I. INTRODUCTION

Using three photographs taken from a neighboring subdivision's marketing

materials - including one portraying the subdivision's stylized entrance sign - a realtor

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

group listed adjacent property for sale on a multiple listing service website. The listing

also contained a property appraisal stating that (1) based on plat-related information,

existing legal access to the property might compromise the neighboring subdivision's

gated community perimeter fencing, and (2) based on statements made to the appraiser

by employees of the local electric association, the neighboring subdivision's electric

service might be subject to legal issues. The subdivision's developer then sued the

realtors for misappropriation of the photos, trade name infringement, and defamation.

The superior court granted summary judgment to the realtors and awarded them

enhanced attorney's fees; the developer appeals. Because there are no material factual

disputes and the realtors are entitled to judgment as a matter of law, we affirm the

superior court's grant of summary judgment (although in part on grounds not relied upon

by the superior court). And because we cannot conclude that the superior court abused

its discretion in awarding attorney's fees, we affirm that decision as well.

II. FACTS AND PROCEEDINGS

A. Facts

Alaskasland.com , LLC (Alaskasland) is the owner-developer of a gated

subdivision located between the Parks Highway and the Susitna River. Asbury Moore

is Alaskasland's general manager, and Duane Mathes is its real estate broker. Since

2008 Alaskasland has marketed its subdivided lots under the name "Susitna Shores," but

the name was not registered. Alaskasland constructed a prominent concrete sign at the

subdivision entrance featuring the Susitna Shores name and logo, and it has used the

name and logo on its website and in printed marketing materials. Alaskasland estimates

it spent almost 900 hours and approximately $160,000 on developing and distributing

promotional materials for Susitna Shores. Of the subdivision's 37 lots, 15 had been sold

by the time the superior court granted summary judgment in July 2013; the most recent

sale was in May 2011.

-2- 7057

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

In 2009 Bryan and Tara Goode inherited property (Goode property) from

Florence Sawby. The Goode property is bounded on three sides by the Susitna Shores

subdivision and on the fourth by the Susitna River. Alaskasland had been interested in

purchasing the property and had unsuccessfully offered Sawby $45,000 for it in 2007.

Gregory Brooker appraised the Goode property and valued it at $150,000.

His appraisal noted that "[t]he electric service in the [Susitna Shores] subdivision may

be subject to legal issues due to the lack of [Matanuska Electric Association]

participation in construction of the infrastructure." The appraisal also noted that "the

[Goode property] has an undeniable access right that crosses the access to [the Susitna

Shores] subdivision boat ramp - and that access could be developed and probably left

open, thereby defeating the gated subdivision."

In August 2011 the Goodes listed their property for sale with realtor Kevin

Cross, associated with Keller Williams Realty - Alaska Group (Keller Williams), for

$146,000. Because the Goodes did not provide Cross any photographs of the property,

his assistant located on the internet photographs that came from Alaskasland's website

depicting: Susitna Shores' entrance sign with its stylized logo; Mt. McKinley; and

Moore fishing with his family on a river. Mathes had taken the first two photographs

himself and had obtained the third from Moore. The photographs were appended to the

Goode property listing on the Alaska Multiple Listing Service (MLS) website. MLS

maintains a comprehensive online database of real estate listings on both a realtor-only

website, called the FlexMLS site, and a separate publicly accessible site. Brooker's

appraisal also was appended to the Goode property listing on the FlexMLS website; it

was never available on the publicly accessible MLS website.

In early November 2011 Mathes discovered that the Goode property was

listed for sale and informed Moore. After viewing the MLS listing Moore determined

that the three Alaskasland photographs were being used to market the Goode property,

-3- 7057

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

and Mathes promptly notified MLS that Cross was improperly using these photographs.

Mathes then contacted Cross to express interest in purchasing the Goode property.

Mathes asked Cross for a copy of the appraisal, which Cross immediately sent to him.

Mathes apparently also viewed the appraisal through the FlexMLS site at various times.

Mathes then conveyed to Cross an offer from Moore to purchase the Goode property for

$95,000, which the Goodes promptly rejected.

In response to the information received from Mathes, MLS confirmed to

Cross that the photographs appended to the Goode property listing "were taken from

another licensee[']s listing and website" and that MLS was removing the photographs

from the listing. In mid-December Cross notified Mathes that he had been informed the

photographs were still viewable through other real estate listing sites due to a flaw in

MLS's system, and that Cross had contacted the other sites to request that the

photographs be removed immediately. Cross stated he was "assured that this is being

taken care of," and Moore later confirmed he could not find the photographs on any other

website after December 2011.

Because the Goodes had received only the one offer from Moore, they

decided to cancel their listing in mid-December 2011. Shortly thereafter William

Jacques, the Broker in Charge at Keller Williams, notified Cross that the appraisal

remained a part of the cancelled listing on the FlexMLS site and that Moore and Mathes

wanted it removed. Cross apparently was under the impression that cancelling the listing

had removed the appraisal from the site. At some point Cross contacted MLS "to see

what had to be done" to remove the appraisal. MLS removed the appraisal in early May

2013.

B. Proceedings

In January 2012 Alaskasland filed suit against Cross, Jacques, Keller

Williams and another Keller Williams employee, and the Goodes (collectively the

-4- 7057

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

Realtors). The complaint, as later amended, alleged several common law causes of

action: (1) "injunction" for harm from posting the photographs and appraisal;

(2) misappropriation of Alaskasland's advertising materials, specifically the photographs

from Alaskasland's website; (3) trademark and trade name infringement through use of

the Susitna Shores sign photograph; (4) publication of false and defamatory information

by posting the Brooker appraisal; (5) interference with existing and prospective business

relationships; (6) conspiracy to defraud by false representations; and (7) negligent

supervision of Cross and vicarious liability on the part of Keller Williams employees and

the Goodes. Alaskasland sought a permanent injunction and damages.

The Realtors moved to dismiss all claims. In its opposition Alaskasland

notably waived any copyright, trademark violation, and unfair competition claims under

state and federal statutes. The superior court denied the motion to dismiss.

Alaskasland moved for partial summary judgment on its misappropriation,

trade name infringement, defamation, and negligent supervision claims. The Realtors

opposed and cross-moved for summary judgment on all claims. After being granted

permission during oral argument, the parties supplemented the record with expert

reports. Shortly thereafter Moore reached an agreement with the Goodes to purchase

their property for $155,000.

The superior court granted summary judgment to the Realtors on all claims.

The court dismissed the "injunction" claim as moot because by then the photographs and

the appraisal had been removed from the MLS website. The court noted that Alaska has

not yet recognized the tort of misappropriation, but that even if it did, Alaskasland had

failed to satisfy what the court considered the tort's elements: "1) time, labor, and

money expended in the creation of the thing appropriated; 2) competition; and

-5- 7057

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

3) commercial damage to the plaintiff." The court implied that at least some time and

labor were expended in creating the photographs and concluded that the parties were in

competition, but held that "[t]his claim truly fails upon the third element, damages." The

court stated: "Alaskasland has failed to provide a scintilla of evidence that any purchaser

other than Mathes and Moore saw the photos."

Turning to the trade name and trademark infringement claims, the superior

court explained that such claims require establishing both that: (1) "the symbol [is]

recognizable to the public in a way that distinguishes it as unique to a particular

business"; and that (2) "the defendant's actions . . . cause a likelihood of confusion

among the relevant buyer class."2 Because the name "Susitna Shores" is geographically

descriptive, the first prong required Alaskasland to show that the name has secondary

meaning - a mental connection between the trade name and a single business.3 The

court found persuasive the Realtors' argument that Alaskasland's failure to sell at least

half its lots - and none in the prior two years - evidenced that its marketing efforts had

failed to produce a secondary meaning in the minds of the public. The court therefore

granted summary judgment dismissing the trade name and trademark infringement

claims.

The superior court then explained that a defamation claim requires

establishing four elements: (1) "a false and defamatory statement of or concerning

plaintiff"; (2) "unprivileged publication to a third party"; (3) "fault amounting to at least

1 See Int'l News Serv. v. Associated Press, 248 U.S. 215, 239-40 (1918).

2 See Alderman v. Iditarod Props., Inc., 32 P.3d 373, 382 (Alaska 2001).

3 See id. at 384-85.

-6- 7057

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

negligence"; and (4) "either per se actionability or special damages." The court

suggested there was a genuine issue of fact whether the appraisal contained false and

defamatory statements. But it held there was no genuine issue as to publication because

"Alaskasland has yet to identify a single individual other than Mathes and Moore [to

whom] the statements were published." Without addressing the damages element, the

court granted summary judgment to the Realtors on the defamation claim.

Noting that a claim for interference with business relationships requires a

potential business relationship with a third party, but that Alaskasland had not identified

one, the superior court granted the Realtors summary judgment on this claim. The court

then explained that Alaskasland's conspiracy to defraud claim alleged that the Realtors

had inflated the Goode property's purchase price to extract more money from

Alaskasland. But because Moore had recently purchased the Goode property for

$155,000, $9,000 more than the allegedly inflated price for which the Realtors had

advertised it, and because Alaskasland had failed to produce evidence of an unlawful act

and evidence of an agreement, the court granted the Realtors summary judgment on this

claim. Because the court dismissed all the tort claims against Cross, there could be no

liability for negligent supervision or vicarious liability for Keller Williams or its

employees; the court granted summary judgment on that claim as well.

The parties then stipulated to dismissing all claims against the Goodes.

Alaskasland moved for reconsideration of the grant of summary judgment, arguing in

part that the court had failed to consider Alaskasland's expert reports or evidence of web

hits to the Goode property MLS listing when the court concluded that Alaskasland had

4 See State v. Carpenter, 171 P.3d 41, 51 (Alaska 2007).

5 See Mattingly v. Sheldon Jackson Coll., 743 P.2d 356, 363 (Alaska 1987).

-7- 7057

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

not suffered damages and that the appraisal had not been published. The court denied

the motion.

The Realtors moved for attorney's fees, and the superior court awarded

approximately $55,500 under Alaska Civil Rule 82, about 35% of the $158,688 in

reasonably incurred actual fees. The court explained that it had varied the fee award

upward under Rule 82(b)(3)(A), (E), (G), and (K) because Alaskasland's "claims lacked

merit and because [it] unnecessarily increased the cost of litigation through the extent of

the asserted claims and the motion practice that necessarily resulted from these numerous

claims."

Alaskasland appealed the grant of summary judgment on its

misappropriation, trade name infringement, defamation, and negligent supervision

claims, as well as the attorney's fees award. We issued an order in August 2014

requiring the parties to be prepared to discuss at oral argument "whether Alaskasland's

misappropriation claim for use of its photographs is preempted by section 301 of the

federal 1976 Copyright Act."6

III. STANDARD OF REVIEW

We may affirm the

"We review grants of summary judgment de novo."

grant of summary judgment on alternative grounds if supported by the record. "We

6 Our order cited the Copyright Act, 17 U.S.C. §§ 102(a)(5), 106(1), 301(a)

(2012) and two cases: Fournier v. Erickson , 202 F. Supp. 2d 290, 299 (S.D.N.Y. 2002)

and Henry v. Nat'l Geographic Soc'y , 147 F. Supp. 2d 16, 21 (D. Mass. 2001).

Christensen v. Alaska Sales & Serv., Inc., 335 P.3d 514, 516 (Alaska 2014).

8 See Wiersum v. Harder, 316 P.3d 557, 563 (Alaska 2013).

-8- 7057

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

review for abuse of discretion both the determination of prevailing party status and the

award of attorney['s] fees."9

IV. DISCUSSION

A. The Federal Copyright Act Preempts Alaskasland's Misappropriation

Claim As It Relates To The Photographs Of Mt. McKinley And

Moore's Family Fishing.

1. Courts apply a two-prong analysis to determine if Federal

Section 301 of the 1976 Copyright Act preempts state law claims

attempting to vindicate "legal or equitable rights that are equivalent to any of the

exclusive rights within the general scope of copyright" and arising from a work "within

the subject matter of copyright."10

Congress enacted section 301 in reaction to the

"anachronistic, uncertain, impractical, and highly complicated dual system" of copyright

law that had developed around the premise that unpublished works deserved common

11 Congress

law copyright whereas published works were entitled to statutory copyright.

therefore intended section 301 to produce "national uniformity" in the law of copyright

to better effectuate its constitutional purpose: "To promote the progress of science and

useful arts."12

9 Nautilus Marine Enters. Inc. v. Exxon Mobil Corp. , 332 P.3d 554, 557

(Alaska 2014).

10 17 U.S.C. § 301(a) (2012). Subsection 301(b) provides in part: "Nothing

in this title annuls or limits any rights or remedies under the common law or statutes of

any State with respect to . . . activities violating legal or equitable rights that are not

equivalent to any of the exclusive rights within the general scope of copyright as

specified by section 106[.]"

11 See H.R. REP . NO . 94-1476, at 129 (1976).

U.S. Const. art. I, § 8, cl. 8. See also H.R. REP . NO . 94-1476, at 129 (1976)

(continued...)

-9- 7057

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

Pursuant to this constitutional authority, Congress in 1790

enacted the first federal patent and copyright law and ever

since that time has fixed the conditions upon which patents

and copyrights shall be granted. These laws, like other laws

of the United States enacted pursuant to constitutional

authority, are the supreme law of the land. When state law

touches upon the area of these federal statutes, it is "familiar

doctrine" that the federal policy "may not be set at naught, or

[13]

its benefits denied" by the state law.

Courts conduct a two-prong analysis modeled on section 301 to determine

whether the Copyright Act preempts a state law claim. The first prong of the

preemption analysis determines whether the work at issue "come[s] within the subject

Section 102 lists

matter of copyright as specified by sections 102 and 103" of the Act.

categories of works "fixed in any tangible medium of expression" that are eligible for

12 (...continued)

("One of the fundamental purposes behind the copyright clause of the Constitution, as

shown in Madison's comments in The Federalist, was to promote national uniformity and

to avoid the practical difficulties of determining and enforcing an author's rights under

the differing laws and in the separate courts of the various States. Today, when the

methods for dissemination of an author's work are incomparably broader and faster than

they were in 1789, national uniformity in copyright protection is even more essential

than it was then to carry out the constitutional intent.").

Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 228-29 (1964) (citations

omitted) (quoting Sola Elec. Co. v. Jefferson Elec. Co., 317 U.S. 173, 176 (1942)).

See Nat'l Basketball Ass'n v. Motorola, Inc., 105 F.3d 841, 848 (2d Cir.

1997); Del Madera Props. v. Rhodes & Gardner, Inc. , 820 F.2d 973, 976 (9th Cir. 1987),

overruled on other grounds by Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994).

17 U.S.C. § 301(a). See also Nat'l Basketball Ass'n, 105 F.3d at 848 ("The

subject matter requirement is met when the work of authorship being copied or

misappropriated 'falls within the ambit of [copyright] protection.' " (alteration omitted)

(quoting Harper & Row, Publishers, Inc. v. Nation Enters. , 723 F.2d 195, 200 (2d Cir.

1983), rev'd on other grounds, 471 U.S. 539 (1985))); Del Madera , 820 F.2d at 976.

-10- 7057

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

"works of authorship," and section 103 extends copyright protection to certain

"compilations and derivative works."17

The second prong of the preemption analysis focuses on whether the state

law claim attempts to vindicate the "exclusive rights" available under section 106 of the

works" based upon it, "distribute copies" of it, and "display the copyrighted work

publicly." The second prong ensures that the state law claim attempts to vindicate some

right different in kind from those provided by the Copyright Act: "To survive

preemption, the state cause of action must protect rights which are qualitatively different

from the copyright rights. The state claim must have an 'extra element' which changes

Whether the possessor of a copyrightable work registers for

the nature of the action."

Before oral argument

a copyright has no bearing on section 301's "preemptive effect."

16 17 U.S.C. § 102(a).

17 17 U.S.C. § 103.

18 17 U.S.C. § 301(a).

19 17 U.S.C. § 106.

20 Del Madera , 820 F.2d at 977 (quoting Mayer v. Josiah Wedgwood & Sons,

Ltd. , 601 F. Supp. 1523, 1535 (S.D.N.Y. 1985)); see also Nat'l Basketball Ass'n , 105

F.3d at 850 ("[C]ertain forms of commercial misappropriation otherwise within the

general scope requirement will survive preemption if an 'extra-element' test is met.").

21 Trandes Corp. v. Guy F. Atkinson Co., 996 F.2d 655, 658 (4th Cir. 1993).

-11- 7057

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

in this appeal, we directed the parties' attention to two cases illustrating the Copyright

Act's preemptive effect.22

In the superior court Alaskasland repeatedly characterized its

misappropriation claim as a common law claim with three elements: "(1) the plaintiff

must have invested time, money, or effort to extract the information, (2) the defendant

must have taken the information with no similar investment, and (3) the plaintiff must

Alaskasland concedes that

have suffered a competitive injury because of the taking."

22 One was Henry v. National Geographic Society , 147 F. Supp. 2d. 16 (D.

Mass. 2001). In that case a photographer contracted to provide photographs for a book

series then later negotiated a licensing fee for the use of one of the photographs in

software, but the purchaser refused to negotiate licenses for the other photographs

incorporated into its software. Id. at 18. The photographer brought state law claims in

federal court, including a conversion claim. Id. The district court conducted the two-

prong analysis to determine whether the conversion claim was preempted by the

"subject to copyright protection" the district court analyzed under the second prong

whether the conversion claim "contain[ed] an extra element that render[ed] it

'qualitatively different' from a copyright claim." Id. (quoting Harper & Row,

Publishers, Inc. v. Nation Enter. , 723 F.2d 195, 201 (2d Cir. 1983), rev'd on other

grounds , 471 U.S. 539 (1985)). The court reasoned that the conversion claim sought "to

protect [the] right to reproduce" the photographs, but "[b]ecause § 106 [of the Copyright

Act] also protects copyright owners from the unauthorized reproduction of the

copyrighted work, the state and federal rights are equivalent, and [the] conversion claim

[was] preempted." Id. at 21.

The other case was Fournier v. Erickson , 202 F. Supp. 2d 290 (S.D.N.Y.

2002), also involving photographs and holding that two state law claims - unfair

competition and tortious misappropriation of goodwill - were preempted by the

copying and subsequent use of [the] . . . photograph," and "neither of the . . . claims

contain[ed] or allege[d] an extra element that distinguish[ed] them from the copyright

infringement claim." Id. at 298-99.

23 BLACK 'S LAW DICTIONARY 1088 (9th ed. 2009). Alaskasland cited this

(continued...)

-12- 7057

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

we have neither recognized nor declined to recognize this tort, and we express no

opinion on its place in Alaska law; we assume only for purposes of argument that the tort

includes the elements Alaskasland posits.

The gist, then, of Alaskasland's misappropriation claim is that the

photographs the Realtors appended to the Goode property listing and posted on the MLS

website, especially the Susitna Shores concrete sign photo, represent the time and money

Alaskasland expended advertising the Susitna Shores subdivision. Although

Alaskasland concedes that creating the photographs "may have cost relatively little," it

urges us to account for the time it spent promoting the trade name Susitna Shores in

assessing the value of the photographs and argues specifically that the Realtors' use of

the Susitna Shores sign photo for the Goode property listing was intended "to create the

impression that [the Goode property] was in fact part of Susitna Shores." We address

the contention that the Realtors "passed off" the Goode property as belonging to the

Susitna Shores subdivision in a separate section.24

2. Alaskasland's photographs come within the subject matter of

Under the first prong of the federal copyright preemption analysis, we must

determine whether Alaskasland's photographs "come within the subject matter of

Section 102(a)(5) of the

Act extends copyright protection to "pictorial, graphic, and sculptural works," and the

23 (...continued)

definition in its opposition to the Realtors' motion to dismiss and in its summary

judgment opposition, relied on a similar definition in its motion for partial summary

judgment, and repeats these three elements to us on appeal.

24 See infra Section IV.B.

25 17 U.S.C. § 301(a).

-13- 7057

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

Act's definitional section plainly states that this phrase includes photographs.26

Accordingly the first prong of the preemption analysis is met.

3. Alaskasland's misappropriation claim fails the extra-element

test at least with respect to its photographs of Mt. McKinley and

of Moore's family fishing.

At oral argument before us Alaskasland contended that, because its

misappropriation claim included an extra element, "the unauthorized use of plaintiff's

goodwill and reputation," it could not be preempted by the Copyright Act. Alaskasland

also argued that its misappropriation claim encompassed more than the mere taking of

three photographs, but rather included the Realtors' "free-riding on [Alaskasland's]

extensive advertising and marketing efforts." To promote the Susitna Shores

26 See 17 U.S.C. § 101.

27 This is similar to the argument in Del Madera Properties v. Rhodes &

Gardner, Inc., involving a real estate development company that brought

misappropriation and unjust enrichment claims based on allegations that a competitor

had misappropriated a tentative subdivision map, "supporting documents, and [the] time

and effort . . . spent in creating the map and supporting documents and in seeking

approval of the subdivision." 820 F.2d 973, 975-76 (9th Cir. 1987), overruled on other

grounds by Fogerty v. Fantasy, Inc. , 510 U.S. 517 (1994). After the development

company filed for bankruptcy, another entity acquired the property, "hired the same

consultants" that the development company had employed, "and developed the property

according to the Tentative [Subdivision] Map." Id. at 975. Conducting the two-part

preemption analysis, the Ninth Circuit Court of Appeals concluded under the first prong

that the map itself was copyrightable as a "pictorial [or] graphic" work. Id. at 976 (citing

17 U.S.C. § 102). It then noted that "[e]ffort expended to create the Tentative Map and

supporting documents is effort expended to create tangible works of authorship," and

"[a]s such, . . . [was] within the scope of copyright protection." Id. (citing Mayer v.

Josiah Wedgwood & Sons, Ltd. , 601 F. Supp. 1523, 1535 (S.D.N.Y. 1985)). Turning to

the second prong - the extra-element test - the court noted that the development

company's allegation that its former employee had breached her fiduciary duty by giving

the map to its competitor did not "change[] the nature of [its] action" but rather simply

(continued...)

-14- 7057

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

subdivision, Alaskasland allegedly spent nearly $45,000 on advertising, including the

distribution of 50,000 informational postcards to potential buyers, and another $40,000

to create the concrete Susitna Shores subdivision sign, efforts that required nearly 900

hours of labor. Although Mathes shot the photo of the Susitna Shores sign and the photo

of Mt. McKinley, and obtained from Moore the photo of Moore's family fishing on the

Susitna River, Alaskasland argues that these three photographs are infused with the

extensive time and money it expended in marketing Susitna Shores. But the

misappropriation of "sweat equity" expended in the creation and advertisement of a

copyrightable work is "precisely the type of misconduct the copyright laws are designed

to guard against." Accordingly Alaskasland's assertion that its photographs are the

product of extensive effort and investment does not save its misappropriation claim, at

27 (...continued)

restated a copyright claim. Id. at 977. Accordingly the "unfair competition claim for

misappropriation of . . . time and effort expended in producing the Tenative map and

supporting documents [was] preempted" by the Copyright Act. Id.

28 Wedgwood, 601 F. Supp. at 1535. In Wedgwood an artist alleged that a

pottery company wrongfully misappropriated "her time, talent[,] and effort" by copying

her design. Id. at 1526, 1535. The district court determined that the artist's claim

sounded in misappropriation because she sought to protect against the company's

"competing use of a valuable product or idea [she had] created . . . through investment

of time, effort, money[,] and expertise." Id. at 1534 (citation omitted). Concluding

under the preemption analysis's first prong that the design fell "within the subject matter

of the copyright laws," id. at 1532, the court then analyzed whether the artist's

misappropriation claim "contain[ed] an 'extra element' [to] qualitatively distinguish[]"

it from rights provided under copyright law. Id. at 1535. But because the same act -

i.e., reproduction, distribution, or display - would trigger both a misappropriation and

a copyright claim, and because the artist's allegation that she had been deprived of her

sweat equity was "not qualitatively different from [a] . . . copyright infringement

[claim]," the district court held that the Copyright Act preempted the artist's

misappropriation claim. Id. at 1535-36.

-15- 7057

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

least with respect to the mountain photo and the fishing photo, from preemption under

the Copyright Act.29

Alaskasland defended its misappropriation claim in the superior court by

arguing that the taking of the three photos included taking "the unique and stylized

version of the name 'Susitna Shores' embodied in [the photograph of the subdivision]

sign," into which Alaskasland had expended considerable time and money. At oral

argument before us Alaskasland stated that its misappropriation claim encompassed not

only the taking of the three photos, but also the misappropriation of its "advertising

efforts . . . because [it] spent a lot of money and worked really hard to create [Susitna

Shores'] goodwill and reputation." It did not argue to the superior court, nor to us, that

the generic photograph of Mt. McKinley or the photograph of Moore's family fishing on

the banks of the Susitna, both of which the Realtors used to market the Goode property,

somehow embody the sweat equity and money it expended in marketing the Susitna

Shores subdivision. It indisputably acquired the photographs at little cost, and asserts

29 Numerous cases concerning reproduction of photographs have held that the

lacked an extra element. See, e.g., Levine v. Landy , 832 F. Supp. 2d 176, 191-92

(N.D.N.Y. 2011) (holding Copyright Act preempted photographer's misappropriation

claim when claim did not have extra element, such as breach of fiduciary duty); CoStar

Grp. Inc. v. LoopNet, Inc., 164 F. Supp. 2d 688, 691-92, 712-14 (D. Md. 2001) (holding

misappropriation claim by real estate information service provider against website using

service's photographs was preempted by Copyright Act because claim had no extra

element); Deo v. Gilbert , No. 260847, 2005 WL 2323808, at *1, *5 (Mich. App. Sept.

22, 2005) (per curiam) (holding in suit between sellers of historic photographs Copyright

Act preempted state law claim based on "right to exclusive reproduction" of

photographs); Editorial Photocolor Archives, Inc. v. Granger Collection , 463 N.E.2d

365, 366, 368 (N.Y. 1984) (holding in suit between film and photograph archive

companies that Copyright Act preempted misappropriation claim and "[p]laintiffs could

not, by miscasting their causes of action, secure the equivalent of copyright protection

under guise of State law").

-16- 7057

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

comparable stock photos would have cost under $5,000, a sum far less than the $100,000

in damages it claims to have suffered from the Realtors' misappropriation of its

photographs.

And in explaining the nexus between its photographs and its advertising

costs, Alaskasland stresses that the Realtors must have seen "value in the use of the

'Susitna Shores' logo and likeness in marketing their own property, or else they would

not have used the photos and logo to market the Goode Property." But Alaskasland does

not further articulate its argument that its photo of a mountain and its photo of a family

fishing represent the time and effort it expended in marketing Susitna Shores. And even

if time, energy, and effort were expended in the creation of these two photographs,

30 With

protection of this exertion falls exclusively under the ambit of the Copyright Act.

respect at least to these two photographs, Alaskasland offers no "extra element" to save

its misappropriation claim from preemption: it simply claims that they were taken

"without permission" and that Alaskasland had circulated them to the public before.

Because photographs come within the subject matter of copyright, and because the

distribution, and display - the same rights Alaskasland asserts in its misappropriation

claim - the Copyright Act preempts Alaskasland's misappropriation claims with respect

to the mountain photo and the fishing photo. Thus if Alaskasland desired to prevent

30 See Del Madera Props., 820 F.2d at 976-77; Wedgwood, 601 F. Supp. at

1535.

31 17 U.S.C. §§ 101, 102(5), 106(1), (3), (5), 301(a). See also Ehat v. Tanner,

780 F.2d 876, 878 (10th Cir. 1985) (holding that even if Utah law recognized tort of

misappropriation, such a claim would be preempted by Copyright Act).

-17- 7057

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

these photographs from being reproduced and displayed without its permission, it should

have sought an injunction under the Copyright Act.32

B. Although The Copyright Act Does Not Preempt A Passing Off Claim,

Such A Claim Requires Damages, Which Alaskasland Failed To

Support With Respect To The Photograph Of The Susitna Shores

Subdivision Sign.

In response to our order directing the parties' attention to the Copyright

Act's preemptive effect, Alaskasland contended at oral argument before us that its

misappropriation claim included a claim for "passing off," defined as "selling a good or

Although this is

service of one person's creation under the name or mark of another."

the first time Alaskasland styled its misappropriation claim as one for passing off, it has

argued throughout this litigation that by listing the Goode property alongside a photo of

Alaskasland's Susitna Shores sign, the Realtors intended "to create the impression that

[the Goode property] was in fact part of Susitna Shores." Because a passing off claim

requires an extra element of "misrepresentation or deception," it is not preempted by the

32 To claim infringement one must first register a work with the federal

Cir. 1993) (noting owner of copyrightable work "cannot escape the [Copyright Act's]

preemptive effect . . . merely by failing to register its copyright").

Lamothe v. Atl. Recording Corp. , 847 F.2d 1403, 1406 (9th Cir. 1988)

(citing Smith v. Montoro, 648 F.2d 602, 604 (9th Cir. 1981)); see also W. Star Trucks,

Inc. v. Big Iron Equip. Servs. Inc. , 101 P.3d 1047, 1053 n.29 (Alaska 2004) (noting that

passing off "action was historically available whenever one trader diverted patronage

from a rival by falsely representing that his goods were the goods of his rival").

34 1 MELVILLE B. NIMMER & DAVID NIMMER , NIMMER ON COPYRIGHT

§ 1.01[B][1][e], 1-35 (2015); see also Warner Bros. Inc. v. Am. Broad. Cos. , 720 F.2d

231, 247 (2d Cir. 1983) (noting that passing off claims protect "rights [not] equivalent

(continued...)

-18- 7057

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

opinion whether Alaska recognizes the common law tort of passing off, and assume only

for purposes of argument its contours as defined by Alaskasland.35

At oral argument Alaskasland urged us to apply the definition of passing

off articulated in Aagard v. Palomar Builders, Inc . But even if Alaska recognized the

34 (...continued)

to those protected by copyright and therefore do not encounter preemption") (citation

omitted); H.R. R

EP . NO . 94-1476, at 132 (1976) ("Section 301 is not intended to preempt

common law protection in cases involving activities such as false labeling, fraudulent

representation, and passing off even where the subject matter involved comes within the

scope of the copyright statute.").

35 Alaskasland chose to assert its common law unfair competition claim of

misappropriation, a claim it suggests encompasses passing off, despite the lack of Alaska

precedent to support such a claim. We surmise in passing that our case law holding that

the Unfair Trade Practices and Consumer Protection Act (UTPA) does not apply to real

estate sales, see, e.g., Alaska Trustee, LLC v. Bachmeier , 332 P.3d 1, 5-6 (Alaska 2014),

may have informed Alaskasland's choice. We do not decide whether the UTPA impacts

Alaskasland's claims because neither party raised the issue.

344 F. Supp. 2d 1211 (E.D. Cal. 2004). In that case a designer and builder

of residential homes employed another home designer to resize architectural plans. Id.

at 1213. The second designer copyrighted some of the plans without permission then

sued the original designer for copyright infringement; the original designer

counterclaimed for misappropriation and also asserted a state law unfair business

practices claim. Id. at 1213-15. The district court treated the common law

misappropriation counterclaim as "identical" to the state law unfair competition

counterclaim; one element necessary to establishing either claim was a showing that the

conduct had caused injury. See id. at 1216. The allegation that customers purchased the

plans believing they were the first designer's, allowing the second designer to leverage

"industry reputation to promote her own business," stated a traditional passing off claim

not preempted by the Copyright Act. See id. at 1216-17. The court noted that the first

designer's plans "were recognized nationally for unique and distinctive features." Id. at

1213 (internal quotation marks omitted). The claim survived the extra element test

because the court found consumers had believed the plans were the first designer's, and

because the second designer sold many plans to her customers, presumably satisfying the

(continued...)

-19- 7057

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

common law tort of passing off, Alaskasland's claim would fail for lack of damages. In

denying Alaskasland's motion for partial summary judgment and granting the Realtors'

cross-motion with respect to misappropriation, the superior court stated that Alaskasland

"failed to show evidence of any damages." We agree. Unlike in Aagard , involving an

allegation that many design plans had been deceitfully sold under a business competitor's

name,37 the only relevant sale here occurred when Alaskasland itself purchased the

Goode property for $155,000 shortly before the superior court granted summary

judgment in the Realtors' favor. Alaskasland argues that the Realtors "passed off" the

Goode property as part of the Susitna Shores subdivision, but there is no evidence that

anyone was deceived - certainly Alaskasland knew that the property it was purchasing

was not part of its subdivision38 - or that (1) the Realtors profited from the alleged

passing off or (2) Alaskasland actually was harmed by the alleged passing off.

When deposed Moore stated that during a Susitna Shores open house in

October 2011, one attendee specifically expressed interest in the Goode property, which

Alaskasland did not then know was for sale, but expressed no interest in Susitna Shores'

lots. Moore could name no one who wanted to purchase the Goode property because

they believed it was within the Susitna Shores subdivision, let alone anyone interested

in purchasing a Susitna Shores lot who instead purchased the Goode property. Moore

remembered an individual who made a nonrefundable down payment on a lot and then

36 (...continued)

tort's injury requirement. Id. at 1216-17. The passing off counterclaim survived a

motion to dismiss on the merits. Id.

37 Id . at 1213-14.

38 Cf. id. at 1217 ("[M]any home builders believed they were purchasing a

Palomar Plan - possibly with Palomar's approval - when they entered into business

with Aagard.").

-20- 7057

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

did not purchase it, but Moore did not attribute this lost sale to the Realtors' use of

Alaskasland's Susitna Shores sign photo.

Alaskasland contends that a genuine issue of material fact remains with

respect to the damages it suffered from the Realtors' use of its stylized sign photo

because dozens of people viewed the Realtors' Goode property listing online, and the

Alaskasland has demonstrated

listing included that photo. But that fact is not material.

no injury from these online viewings and does not connect them to any diversion of

profits from Alaskasland to the Realtors. It cannot show that any individual who viewed

the Susitna Shores sign photo expressed interest in the Goode property or lost interest

in purchasing Susitna Shores' property as a result of the Realtors' use of that photo.

Because Alaskasland's damages are only hypothetical, its claim fails as a matter of law.

In the same vein Alaskasland argues that its two expert reports create a

genuine issue of material fact with respect to damages and that the superior court

neglected to consider this evidence. Neglecting to mention the expert reports does not

necessarily mean that the court failed to consider them in its ruling - the court stated

39 See Christensen v. Alaska Sales & Serv., Inc., 335 P.3d 514, 519 (Alaska

2014) ("[A] material fact is one upon which resolution of an issue turns." (citation

omitted)).

40 Cf. Orsini v. Bratten, 713 P.2d 791, 794 n.6 (Alaska 1986) ("Damages

should not be awarded on the basis of speculation, surmise or conjecture.") (citation

omitted); State v. Hammer, 550 P.2d 820, 824-25 (Alaska 1976) ("Loss of profits

damages have been awarded in a variety of civil contexts, including tort actions . . . and

suits for infringement of a patent or trademark. In any case seeking loss of profits, such

damages must be 'reasonably certain': the trier of fact must be able to determine the

amount of lost profits from evidence on the record and reasonable inferences therefrom,

not from mere speculation and wishful thinking. Thus, claims which are truly

speculative, in that they depend on unrealized contingencies . . . or the like, are screened

out by the requirements of reasonable certainty, while damages which can be proven are

allowed." (footnotes omitted)).

-21- 7057

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

that it would consider both parties' expert reports before issuing a decision, and it may

simply have found them unhelpful. One of Alaskasland's expert reports assumes that

Alaskasland would have licensed its photos to the Realtors for a fee and then increases

that fee ten-fold because the photo licensing company upon whose policy the expert

relied similarly increases its fees when photos are "used illegally in some manner." The

expert report notes that the Copyright Act provides for statutory damages if the

42 and calculates damages accordingly. But

" 'infringement was committed willfully' "

to the extent that Alaskasland claims damages for the unauthorized use of its

photographs, this type of misappropriation claim, as discussed above, is preempted by

the Copyright Act.43

The expert reports also detail the money Alaskasland spent advertising

Susitna Shores by preparing "[a]rt," attending "[t]rade show[s]" and "other promotions,"

constructing its stylized sign, and designing and maintaining its website. Using this sum,

$361,827, one expert reasons that Alaskasland spent "$15,870 per acre" in promoting

the lots it sold and then contends that, because the Realtors marketed the 4.6 acre Goode

property and because they used Alaskasland's "advertising [and] not just the photos,"

they damaged Alaskasland in the amount of "$73,000 (4.6 acres x $ 15,870 per acre

41 Cf. Monette v. Hoff, 958 P.2d 434, 436 (Alaska 1998) ("Assessment of

witness credibility is left to the discretion of the superior court." (citing Hanlon v.

Hanlon , 871 P.2d 229, 232 (Alaska 1994))). One expert report, for instance, stated that

Alaskasland suffered $120,000 in damages because it was "forced" to purchase the

Goode property for $155,000 even though "the real fair market value of [that] parcel was

$35,000." It is difficult to discern how Alaskasland was "forced" into overpaying for the

property but simple to discern that Alaskasland would pay a premium for the Goode

property, surrounded as it was by the Susitna Shores subdivision.

42 See 17 U.S.C. § 504(c)(2) (2012).

43 See supra notes 25-32 and accompanying text.

-22- 7057

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

promotion costs)." (Emphasis omitted.) But these novel calculations fail to create a

reasonable inference that the Realtors profited at Alaskasland's expense or that

Alaskasland suffered an actual loss. Finally, Alaskasland's other expert report states

that, by using the sign photo and "keywords" similar to Alaskasland's, the Realtors'

listing "dilut[ed] the online marketing efforts of Susitna Shores." The report notes that

"searching for 'Susitna Shores' . . . would affect the search engine rankings negatively

for Susitna Shores and positively for the [Realtors'] online listings." (Emphasis added.)

It may be that online dilution of search results for the term "Susitna Shores" is a distinct

possibility, but no evidence in the record creates a genuine issue of fact as to

Alaskasland's actual injury from possible online marketing dilution. Even taken together

44 its experts' reports fail to raise a genuine issue

and construed in Alaskasland's favor,

of material fact as to any actual damages it suffered from the Realtors' use of the Susitna

Shores sign photo.

Alaskasland has not demonstrated that the Realtors "passed off" the Goode

property to any deceived purchaser - rather, Alaskasland bought the property. Even

assuming its passing off claim's validity for the sake of argument, Alaskasland has

produced no evidence of deception or damages. Regardless of how Alaskasland

characterizes its claim concerning the Realtors' use of the Susitna Shores sign photo, its

claim necessarily fails.

1. A reasonable royalty measure of damages is inappropriate for

a passing off claim.

Alaskasland urges us to follow other courts that "employ a 'reasonable

royalty' measure of damages in cases where [d]efendants did not profit from their

44 See Lockwood v. Geico Gen. Ins. Co. , 323 P.3d 691, 696 (Alaska 2014)

(explaining that on review of summary judgment ruling record is read in light "most

favorable to the non-moving party" with "all reasonable inferences drawn in its favor").

-23- 7057

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

misappropriation." A reasonable royalty "is a measure of damages for past infringement,

often used in patent cases and in the context of trade secrets, but its use in trademark has

been atypical."45 "Trade secret law places a premium on the value of secrecy, and creates

exclusive rights in the holder of the secret."46

A reasonable royalty cannot serve as a measure of damages here because

the photograph of Alaskasland's concrete sign is simply not a trade secret, visible as it

is to anyone traveling the Parks Highway. We decline to apply a measure of damages

derived from trade secret law to the claim for misappropriation of the sign photograph

as an end-run around the latter's damage requirement.

The cases Alaskasland invokes to support its argument are distinguishable.

In Sheldon v. Metro-Goldwyn Pictures Corp. the United States Supreme Court approved

the use of a reasonable royalty as a measure of damages only after copyright

infringement liability had been established: The reasonable royalty calculation itself

Alaskasland also points to ITT Corp. v.

does not establish that an injury has occurred.

45 A & H Sportswear, Inc. v. Victoria's Secret Stores, Inc. , 166 F.3d 197, 208

(3d Cir. 1999); accord Vt. Microsystems, Inc. v. Autodesk, Inc., 138 F.3d 449, 450 (2d

Cir. 1998). See also RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 45 cmt. g (1995)

("A reasonable royalty measure of relief awards to the plaintiff the price that would be

set by a willing buyer and a willing seller for the use of the trade secret made by the

defendant." (emphasis added)).

46 LinkCo, Inc. v. Fujitsu Ltd. , 230 F. Supp. 2d 492, 504 (S.D.N.Y. 2002).

47 309 U.S. 390, 396-400 (1940). The lawsuit involved a film that plagiarized

material from a copyrighted play and considered whether and how to apportion profits

between the film company and the play's copyright holder. Id . at 396-98. The Court

apportioned the profits, relying on its patent law precedent: " 'The infringer is liable for

actual, not for possible, gains. The profits, therefore, which he must account for, are not

those which he might reasonably have made, but those which he did make, by the use of

the plaintiff's invention . . . .' " Id. at 400 (quoting Tilghman v. Proctor, 125 U.S. 136,

(continued...)

-24- 7057

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

Xylem Group, LLC , a case which, like Sheldon, simply noted that if the plaintiff succeeds

in proving trademark infringement, then "a reasonable royalty is a viable measure of

damages."48

2. Alaskasland's common law trade name infringement claim is

indistinguishable from its passing off claim and also fails for

lack of damages.

At oral argument before us Alaskasland conceded that its misappropriation

or passing off claim was "bigger than" and therefore included its trade name and

trademark infringement claims. We discern no meaningful difference between

Alaskasland's passing off claim - alleging the Realtors marketed the Goode property

as though it were within the Susitna Shores subdivision - and its common law trade

name infringement claim, which also alleges that the Realtors used the sign photo to

"creat[e] the impression that the Goode Property was part of Susitna Shores." "At

common law . . . tradename infringement was only one form of tort encompassed under

the concept of unfair competition, a concept that also included passing off one's goods

47 (...continued)

146 (1888), superseded by statute on other grounds, Act of August 1, 1946, c. 726, § 1,

60 Stat. 778, as recognized in Gen. Motors Corp. v. Devex Corp., 461 U.S. 648, 651-52

(1983)).

963 F. Supp. 2d 1309, 1331 (N.D. Ga. 2013). See also Michael A.

Rosenhouse, Annotation, Proper Measure and Elements of Damages for

Misappropriation of Trade Secret , 11 A.L.R. 4th 12, 20 (1982) ("In the absence of

circumstances indicating what the parties thought the plaintiff's trade secret was worth,

the courts, in measuring damages for a misappropriation, seem to have been guided

substantially by what the plaintiff has proved . Thus, they have awarded the plaintiff his

lost profits . . . or an accounting for the defendant's profits . . . upon proper and sufficient

evidence as to the amount thereof, both measures being deemed acceptable in general by

most courts . . . ." (emphasis added)).

-25- 7057

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

as those of another . . . ." We also note that on the facts of this case, there is no

meaningful difference between Alaskasland's trade name and trademark infringement

claims because "the law affords protection against [the misappropriation of either] upon

the same fundamental principles."50

As with a passing off claim, to recover damages under a trade name

Even assuming

infringement claim "plaintiff must prove both causation and amount."

the name Susitna Shores acquired secondary meaning, Alaskasland failed to show that

it suffered any actual damages from the Realtors' use of its sign photograph in their

listing. We therefore conclude that the superior court properly granted summary

judgment to the Realtors on Alaskasland's common law trade name infringement claim. 52

49 20th Century Wear, Inc. v. Sanmark-Stardust Inc., 747 F.2d 81, 90 (2d Cir.

1984) (internal quotation marks omitted) (citing Am. Steel Foundries v. Robertson , 269

U.S. 372, 380 (1926)); see also Maguire v. Gorruso , 800 A.2d 1085, 1088 n.1 (Vt. 2002)

("Common law unfair competition includes a number of different tort theories, including

'passing-off,' which is in effect the common law name for trademark infringement, trade-

secret violations, and misappropriation." (citing PROSSER & KEETON ,T HE LAW OF TORTS

§ 130, at 1015-20 (5th ed.1984))).

50 Alderman v. Iditarod Props., Inc. , 32 P.3d 373, 381 (Alaska 2001) (quoting

Robertson , 269 U.S. at 380). "The distinction between trade name and trademark . . . is

generally not a critical distinction." Id. Alaskasland used these terms interchangeably

throughout its arguments to the superior court and to us.

51 5 J. THOMAS MCCARTHY , MCCARTHY ON TRADEMARKS AND UNFAIR

COMPETITION § 30:72, at 30-200 (4th ed. 2015); see also RESTATEMENT (THIRD) OF

UNFAIR COMPETITION §§ 20 cmt. b (1995) (noting that modern cases treat trademark and

trade name claims similarly and that "the standard of infringement is the same"); id. § 36

("One who is liable to another . . . for infringement of the other's . . . trade name . . . is

liable for the pecuniary loss to the other caused by the . . . infringement . . . ." (emphasis

added)).

We also note that the standard remedy for trademark infringement is an

(continued...)

-26- 7057

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

C. Alaskasland's Defamation Claim Fails Because The Two Statements

In The Appraisal Are Non-Defamatory Opinions.

A defamation claim requires proof of four elements: "(1) a false and

defamatory statement; (2) unprivileged publication to a third party; (3) fault amounting

at least to negligence; and (4) either per se actionability or special damages."53 In

granting summary judgment to the Realtors the superior court suggested there was a

genuine issue of fact whether the appraisal contained false and defamatory statements,

but ruled that the statements were not published and that the Realtors were not negligent

in posting the appraisal. We affirm on the alternative ground that the statements are non-

defamatory opinions.54

The tort's first element - whether a statement is defamatory - is a

question of law. "The First Amendment bars actions for defamation where the

allegedly defamatory statements are expressions of ideas and 'cannot reasonably be

52 (...continued)

injunction. 5 MCCARTHY , supra note 52, at § 30:1. The superior court correctly

concluded that Alaskasland's injunction claim was moot. When there is no proof of

passing off, and when the infringement neither damaged the plaintiff nor profited the

infringer, damages will not be awarded because "an injunction will satisfy the equities

of the case." Champion Spark Plug Co. v. Sanders, 331 U.S. 125, 130-32 (1947); see

also RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 35 & cmt. a (1995) (stating

"judicial preference for injunctive relief in unfair competition cases" involving

"deceptive marketing, trademark infringement, and trademark dilution"); id. § 36 &

cmt. i (stating that "the recovery of damages ordinarily requires proof that some

consumers have actually been confused or deceived").

State v. Carpenter, 171 P.3d 41, 51 (Alaska 2007) (citing French v. Jadon,

Inc. , 911 P.2d 20, 32 (Alaska 1996)).

54 See supra note 8 and accompanying text.

DeNardo v. Bax , 147 P.3d 672, 677 (Alaska 2006) (citing Schneider v.

Pay'N Save Corp. , 723 P.2d 619, 624-25 (Alaska 1986)).

-27- 7057

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

interpreted as stating actual facts about an individual.' " "To ascertain whether a

statement is factual," we will "consider 'the type of language used, the meaning of the

statement in context, whether the statement is verifiable, and the broader social

circumstances in which the statement was made.' " Even if a statement is an opinion,

it may give rise to a defamation claim if its "expression contains an implied assertion of

false fact and is sufficiently derogatory as to cause harm to the subject's reputation."58

But " 'if it is plain that the speaker is expressing a subjective view, an interpretation, a

theory, conjecture, or surmise, rather than claiming to be in possession of objectively

verifiable facts, the statement is not actionable.' " The tension in this area of the law

concerns the appropriate balance between the First Amendment's protections and

56 Sands v. Living Word Fellowship, 34 P.3d 955, 960 (Alaska 2001) (quoting

Milkovich v. Lorain Journal Co. , 497 U.S. 1, 20 (1990)).

57 Id. (quoting Milkovich , 497 U.S. at 24 (Brennan, J., dissenting)); see also

Kinzel v. Discovery Drilling, Inc. , 93 P.3d 427, 440 (Alaska 2004) (emphasizing that

whether statement is fact or opinion depends upon totality of circumstances, including

" 'all the words used,' " any " 'cautionary terms,' " and statement's audience (quoting

Lyons v. Globe Newspaper Co. , 612 N.E.2d 1158, 1162 (Mass. 1993))).

58 Carpenter, 171 P.3d at 51 (citing RESTATEMENT (SECOND) OF TORTS § 566

cmt. a (1977)).

59 Kinzel , 93 P.3d at 440 (quoting Haynes v. Alfred A. Knopf, Inc. , 8 F.3d

1222, 1227 (7th Cir. 1993)).

-28- 7057

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

society's " 'strong interest in preventing and redressing attacks upon reputation.' "60

" 'Whatever is added to the field of libel is taken from the field of free debate.' "61

Alaskasland argues that there are two false and defamatory statements in

Brooker's 21-page Goode property appraisal, which was available on the realtor-only

FlexMLS website. The first statement concerns Susitna Shores' electric service:

Matanuska Electric Association [(MEA)] Engineering

Department staff was unable to provide the exact location of

closest electric service or estimate the expense of bringing

electric service to the subject site. No map regarding electric

service in place for Susitna Shores is available according to

the engineer interviewed. The electric service in the

surrounding subdivision may be subject to legal issues due to

lack of MEA participation in construction of the

infrastructure. The exact nature of the difficulty, if any, was

not disclosed by the staff member interviewed. It is assumed

that the availability and expense of providing electric service

for the subject is equivalent to that of other land advertised to

have electric "in area."

(Emphases added.) Alaskasland argues that the electricity statement about possible legal

issues is defamatory because MEA actually had accepted Susitna Shores' electric service,

implying that it could not therefore be subject to "legal issues."

The second statement concerns Susitna Shores' gated security:

[T]he [Goode property] is the single remaining uncaptured lot

within the subdivided area; the subject has an undeniable

access right that crosses the access to [the] subdivision boat

60 Milkovich , 497 U.S. at 22 (quoting Rosenblatt v. Baer , 383 U.S. 75, 86

(1966)); see also Ollman v. Evans, 750 F.2d 970, 974 (D.C. Cir. 1984) (noting that

striking proper balance between First Amendment and "an individual's interest in

reputation" is "delicate and sensitive task").

61 Milkovich , 497 U.S. at 36 (Brennan, J., dissenting) (quoting N.Y. Times Co.

v. Sullivan, 376 U.S. 254, 272 (1964)).

-29- 7057

----------------------- Page 30-----------------------

ramp - and that access could be developed and probably left

open, thereby defeating the gated subdivision.

(Emphases added.) Alaskasland argues the gated security statement is defamatory

because "no matter how the Goode Property was developed, Susitna Shores could always

maintain the security of its gated community and road."

1. Applying the Sands v. Living Word Fellowship factors leads to

the conclusion that both statements are opinions.

To determine whether the statement is an opinion we apply the four Sands

factors: " 'the type of language used, the meaning of the statement in context, whether

the statement is verifiable, and the broader social circumstances in which the statement

was made.' "62

The first Sands factor considers "the type of language used." Brooker's

carefully chosen language conveys his appraisal's limitations. The paragraph containing

the electricity statement references MEA's employees three times and conveys that

Brooker interviewed MEA "staff." But Brooker spoke to only a few people: "No map

regarding electric service . . . is available according to the engineer interviewed"; and

"[t]he exact nature of the difficulty, if any, was not disclosed by the staff member

interviewed."

The allegedly defamatory electricity statement - "The electric service in

the surrounding subdivision may be subject to legal issues due to lack of MEA

participation in construction of the infrastructure" - likely contains the phrase "may be"

64 After reading the

to connote Brooker's uncertainty about the existence of legal issues.

62 34 P.3d at 960 (quoting Milkovich , 497 U.S. at 24 (Brennan, J., dissenting)).

63 Id . (internal quotation marks omitted).

64 See Kinzel, 93 P.3d at 440 (" '[T]he court must give weight to cautionary

(continued...)

-30- 7057

----------------------- Page 31-----------------------

paragraph one could conclude that the engineer Brooker interviewed could not provide

a map of the electric service in Susitna Shores and that "the staff member" Brooker

interviewed did not disclose whether Susitna Shores' electric service had any legal

issues.

The gated security statement contains the cautionary and speculative terms

"could be" and "probably." Brooker's use of hedging language would suggest to a

reasonable reader that a compromise of the gated subdivision's integrity is only a

possibility, not a certainty. Both statements contain declarative yet cautionary language.

The second Sands factor considers the statement's meaning in context.65

The alleged defamatory statements appear in an appraisal, by statutory definition an

opinion. After noting that Susitna Shores "may" have "legal issues" - "if any" -

with its electric service, Brooker then noted the minimal impact of this possible

impediment on the Goode property: "It is assumed that the availability and expense of

providing electric service for the subject is equivalent to that of other land advertised to

have electric 'in area.' " Brooker commented on the subdivision's electric service later

in the appraisal, writing: "Susitna Shores subdivision has underground electric and

telephone utilities [and] gravel surfaced streets . . . ." After mentioning the possible

existence of "legal issues" with Susitna Shores' electric service once, Brooker does not

64 (...continued)

terms used by the person publishing the statement.' " (quoting Lyons v. Globe

Newspaper Co. , 612 N.E.2d 1158, 1162 (Mass. 1993))).

65 34 P.3d at 960; see also RESTATEMENT (SECOND) OF TORTS § 614 cmt. d

(1977) ("[T]he context of written or spoken words is an important factor in determining

the meaning that they reasonably might convey to the person who heard or read them.").

66 See AS 08.87.900(2).

-31- 7057

----------------------- Page 32-----------------------

raise this issue again, suggesting that the possibility of legal issues was remote.67

Moreover, the appraisal's purpose was to establish the value of the Goode property, and

it was meant to be read by prospective purchasers of that property, not by prospective

purchasers of Susitna Shores' lots.

The contextual meaning of the gated security statement becomes more

apparent after viewing maps of the area, some of which were attached to Brooker's

appraisal. Brooker stated that he relied on maps and photographs in arriving at his

opinion of the property's value, noting that the Goode property's access easement

crossed Susitna Shores' boat launch road. Similarly one map in the record, although not

attached to the Brooker appraisal, shows that Susitna Shores' boat launch easement

intersects the Goode property's access easement. In the context of the entire appraisal,

including the maps, the statement that the gated subdivision's integrity might be

compromised does not seem implausible.

Brooker

The third Sands factor is " 'whether the statement is verifiable.' "

wrote that Susitna Shores' electric service "may be subject to legal issues due to lack of

MEA participation in construction of the infrastructure. The exact nature of the

The possibility

difficulty, if any, was not disclosed by the staff member interviewed."

67 See Partington v. Bugliosi , 56 F.3d 1147, 1153 (9th Cir. 1995) (explaining

that in analyzing a defamation claim "the general tenor of the entire work" should be

taken into account).

68 34 P.3d at 960 (quoting Milkovich v. Lorain Journal Co. , 497 U.S. 1, 24

(1990) (Brennan, J., dissenting)).

69 Although Alaskasland argues that Brooker's statement is false because

MEA accepted the electric service installed at Susitna Shores, the MEA employees

Brooker interviewed did not disclose this information. A statement's defamatory nature

depends on "whether reasonable readers would have actually interpreted the statement

(continued...)

-32- 7057

----------------------- Page 33-----------------------

that something will occur in the future cannot be verified: it is always technically true

to state that an occurrence is possible. A statement is not a fact if it cannot plausibly be

verified. We have previously noted that a statement's unverifiability favors concluding

that the statement is an opinion and not a fact.71

Like the electricity statement, the gated security statement cannot be

verified because it speculates that a future event is possible. Relying on the affidavit of

its general manager, Asbury Moore, Alaskasland argues that "no matter how the Goode

Property was developed, Susitna Shores could always maintain the security of its gated

community and road." When deposed Moore stated: "[The Goodes] have access north

and south. They don't have access east and west. So we could put up a fence and a gate

69 (...continued)

as implying defamatory facts," not on whether the statement, stripped of its context, is

verifiable in the abstract. See Milkovich, 497 U.S. at 27 n.3 (Brennan, J., dissenting).

Moreover, Brooker's assertion that the subdivision's electric service "may be subject to

legal issues" is unverifiable.

See Janklow v. Newsweek, Inc., 788 F.2d 1300, 1302 (8th Cir. 1986) ("A

statement regarding a potentially provable proposition can be phrased so that it is hard

to establish, or it may intrinsically be unsuited to any sort of quantification."); Ollman

v. Evans , 750 F.2d 970, 979 (D.C. Cir. 1984) ("Insofar as a statement lacks a plausible

method of verification, a reasonable reader will not believe that the statement has specific

factual content.").

See State v. Carpenter, 171 P.3d 41, 48, 51-52 (Alaska 2007) (reasoning

that sexual insults made during a radio show known for its lewdness "were not factually

verifiable" and therefore, although "offensive to any rational person," the statements

"were not defamatory"); Sands, 34 P.3d at 960 (holding statements that a church was a

"cult" and its pastor a "cult recruiter" were "not factual statements capable of being

proven true or false," and therefore could not support a defamation action); see also

Ollman, 750 F.2d at 981 ("In assessing whether the challenged statements are facts,

rather than opinion, courts should . . . consider the degree to which the statements are

verifiable . . . . The reason for this inquiry is simple: a reader cannot rationally view an

unverifiable statement as conveying actual facts." (citation omitted)).

-33- 7057

----------------------- Page 34-----------------------

[parallel to, but not intersecting, the Goode's access easement]." (Emphasis added.)

That Moore stated he "could put up a fence" connotes that one did not currently exist. 72

As Moore's deposition testimony illustrates, the statement that Susitna Shores' gated

security could be defeated postulates a future event and is therefore unverifiable, which

favors concluding that the statement is an opinion and not a fact. We note that

Alaskasland marketed three Susitna Shores lots as providing "gated or non-gated entry,"

which contradicts the proposition that the whole subdivision was entirely fenced.

The fourth Sands factor examines " 'the broader social circumstances in

Brooker wrote a professional appraisal to value a

which the statement was made.' "

parcel of real estate. Appraisers serve an important social function by reducing the

Accordingly they

value of real estate to a firm number to promote its free alienation.

should be free to express their complete and candid opinions in the interest of providing

the real-estate-buying public with the most practical and detailed information possible.

72 See AMERICAN HERITAGE DICTIONARY 426 (3d ed. 1992) (defining "could"

as an auxiliary verb "[u]sed to indicate ability [or] possibility . . . . [u]sed with

hypothetical or conditional force . . . . [or] [u]sed to indicate tentativeness or politeness").

73 34 P.3d at 960 (quoting Milkovich , 497 U.S. at 24 (Brennan, J., dissenting)).

74 See AS 08.87.900(2) (defining "appraisal" as "an analysis, opinion, or

conclusion prepared by a real estate appraiser relating to the nature, quality, value, . . . or

utility of specified interests in, or aspects of, identified real estate"); see also Ketchikan

Cold Storage Co. v. State, 491 P.2d 143, 151 (Alaska 1971) ("The appraisal of property

is not an exact science. It requires a complex balancing of the various principles and

techniques which are utilized in reaching the final estimate of value.").

See, e.g., BP Pipelines (Alaska) Inc. v. State, Dep't of Revenue , 325 P.3d

478, 483 (Alaska 2014) (stating Appraisal Institute "defines market value as [t]he most

probable price, as of a specified date . . . for which the specified property rights should

sell after reasonable exposure in a competitive market under all conditions requisite to

a fair sale" (quoting APPRAISAL INST ., THE APPRAISAL OF REAL ESTATE 23 (13th ed.

2008)) (internal quotation marks omitted)).

-34- 7057

----------------------- Page 35-----------------------

And real estate agents such as the Realtors here, who routinely rely on appraisals, should

not be burdened with a duty to independently verify every speculative or factual

assertion within an appraisal, a time-consuming and cumbersome endeavor. Safeguards

76 and we decline

exist for reprimanding negligent or incompetent real estate appraisers,

here to invent a sweeping rule making real estate agents vicariously liable for the alleged

misdeeds of appraisers upon whose appraisals these agents rely for their livelihoods. The

broader social circumstances surrounding real estate appraisals weigh in favor of free

speech, within reason, and against the imposition of liability.

Weighing these four factors - Brooker's use of cautionary language, the

single reference to legal issues in his lengthy appraisal, the maps attached to the

appraisal, the statements' unverifiability, and the broader social circumstances in which

77 But as an

the statements were made - we conclude that both statements are opinions.

opinion, a statement may still be defamatory if it "contains an implied assertion of false

fact."78

2. Neither statement implies the knowledge of undisclosed facts as

its basis.

Drawing all reasonable inferences in Alaskasland's favor, Brooker

disclosed the following facts. With respect to the electricity statement, Brooker disclosed

that he spoke to one MEA employee who could not produce a map of Susitna Shores'

76 See AS 08.87.200-.210.

77 See RODNEY A. SMOLLA , LAW OF DEFAMATION § 6:1 (2d ed. 2015) (noting

that the purpose of defamation law's distinction between fact and opinion is to

achieve "an accommodation between protection of valuable interests in reputation and

the provision of sufficient breathing space for critical and sometimes caustic free

expression").

78 State v. Carpenter, 171 P.3d 41, 51 (Alaska 2007) (citing RESTATEMENT

(SECOND) OF TORTS § 566 cmt. a (1977)).

-35- 7057

----------------------- Page 36-----------------------

electric service and that he spoke to another MEA employee who said MEA did not

participate in the infrastructure but did not disclose whether Susitna Shores' electric

service was subject to legal "difficulty." From these two facts, Brooker hypothesized

that Susitna Shores' electric service "may be subject to legal issues due to the lack of

MEA participation in construction of the infrastructure." A reasonable reader would

understand that a few people in an organization likely do not have the same institutional

knowledge as the organization itself. And a reader of this appraisal would be free to

draw a different conclusion, especially in light of the hedging language - "may be" and

"if any" - that Brooker used. As Justice Brennan aptly explained in his Milkovich v.

Lorain Journal Co. dissent:

Conjecture, when recognizable as such, alerts the audience

that the statement is one of belief, not fact. The audience

understands that the speaker is merely putting forward a

hypothesis. Although the hypothesis involves a factual

question, it is understood as the author's "best guess." Of

course, if the speculative conclusion is preceded by stated

factual premises, and one or more of them is false and

defamatory, an action for libel may lie as to them . But the

speculative conclusion itself is actionable only if it implies

[79]

the existence of another false and defamatory fact.

Brooker qualified his 21-page appraisal with a one-page "certificate of

appraisal" certifying:

79 497 U.S. 1, 28 n.5 (1990) (Brennan, J., dissenting) (emphasis in original);

see also Partington v. Bugliosi, 56 F.3d 1147, 1156-57 (9th Cir. 1995) ("[W]hen an

author outlines the facts available to him, thus making it clear that the challenged

statements represent his own interpretation of those facts and leaving the reader free to

draw his own conclusions, those statements are generally protected by the First

Amendment."); Lauderback v. Am. Broadcasting Co. , 741 F.2d 193, 195 (8th Cir. 1984)

("[G]iven all the facts of a situation, the public can independently evaluate the merits of

even the most outrageous opinion and discredit those that are unfounded.").

-36- 7057

----------------------- Page 37-----------------------

1. The statements of fact contained in this report are true and

correct.

2. The reported analyses, opinions, and conclusions are

limited only by the reported assumptions and limiting

conditions, and are my personal, unbiased professional

analyses, opinions, and conclusions.

Because Brooker revealed the underlying facts on which his opinion relied, leaving

readers of his appraisal free to form different opinions, we hold as a matter of law that

the electricity statement is not defamatory.

With respect to the gated security statement, Brooker wrote: "Access along

the [Goode property's] dedicated access easement . . . has not yet been developed[;]

however there is no legal impediment to developing this access[,] and it would cross the

Susitna Shores boat ramp en route to the subject." This statement is a straightforward

interpretation of the maps Brooker included in his appraisal. In more speculative terms

Brooker wrote:

It is unknown exactly where the private road between the

platted subdivision (north of the [Goode property]) and

existing private boat launch site (south of the [Goode

property]) runs relative to the [Goode property's] twenty-five

foot access easement. . . . Subject site is assumed to have

unimpaired access via the twenty-five foot easement

discussed, although the access has not yet been developed.

As evidenced by his use of the terms "unknown" and "assumed," Brooker disclosed that

he was uncertain where the Goode property's undeveloped easement ran in relation to

Susitna Shores' road and boat launch. This uncertainty likely informed Brooker's

speculative opinion that the Goode property's access easement "could be developed and

probably left open, thereby defeating the gated subdivision." (Emphases added.) These

cautionary terms serve as "clear signals" to the reasonable reader that Brooker's opinion

was "nothing more than conjecture and speculation" based on his stated assumptions,

-37- 7057

----------------------- Page 38-----------------------

factual observations, and the informative maps and photographs he included in his

appraisal.80

The appraisal also contains an excerpt from a 2007 public zoning hearing

on road access to Susitna Shores: "[T]he proposed frontage road within Susitna Shores

will not be private or gated, providing unimpeded access to Big Su River Road and the

public campground. AKDOT/PF may require the frontage road to be extended along the

Parks Highway when and if the south adjacent parcel [Goode property] is developed."

In sum, Brooker disclosed that: (1) he did not know the exact locations of

the Goode property's access easement and the subdivision's existing road in relation to

each other; (2) the Goode property's access easement was not developed; (3) if it were

developed, it would cross Susitna Shores' boat ramp road; and (4) the minutes from a

2007 public zoning hearing referenced a "proposed frontage road within Susitna Shores"

that would "not be private or gated." In reaching his opinion, Brooker clearly stated each

underlying factual premise and even included hearing minutes and maps in his appraisal.

None of these factual premises is defamatory, and Brooker's ultimate opinion does not

suggest as its basis other undisclosed, underlying, and defamatory facts. We therefore

conclude as a matter of law that this statement, like the electricity statement, is a non-

defamatory opinion, a mere speculation drawn from the stated assumptions and

uncertainties.

D. The Superior Court Did Not Abuse Its Discretion By Awarding

Enhanced Attorney's Fees.

"We have 'consistently held that both the determination of prevailing party

status and the award of costs and fees are committed to the broad discretion of the trial

80 See Levin v. McPhee, 119 F.3d 189, 197 (2d Cir. 1997).

-38- 7057

----------------------- Page 39-----------------------

court.' 'Therefore, any party seeking to overturn a trial court's decision in this regard

[bears] a heavy burden of persuasion.' "81

The superior court increased the Realtors' fee award to 35% of their actual

fees or approximately $55,500. As the court explained:

Because [Alaskasland's] claims lacked merit and because

[Alaskasland] unnecessarily increased the cost of litigation

through the extent of the asserted claims and the motion

practice that necessarily resulted from these numerous claims,

this court varies attorney's fees per Civil Rule 82(b)(3)(A),

(E), (G), and (K) upwards to 35% of the reasonable actual

[82]

attorney's fees incurred by the realtor defendants.

The court also based the increased fee award on its observation that Alaskasland had

brought "a complex lawsuit despite having sustained no damages."

Alaskasland raises three arguments against the fee award. It first argues

that although the Realtors prevailed on each of the claims below, it was also a prevailing

party because it succeeded in "compelling the removal of the Brooker appraisal from the

internet." Alaskasland then asks us to exercise our discretion "and refrain from

characterizing either [party] as the prevailing party, and from awarding [the Realtors]

fees in this matter." Alaskasland conflates the standard of review for attorney's fees with

the substantive law. This court reviews awards of attorney's fees for abuse of

81 Schultz v. Wells Fargo Bank, N.A., 301 P.3d 1237, 1241 (Alaska 2013)

(quoting K & K Recycling, Inc., v. Alaska Gold Co. , 80 P.3d 702, 721 (Alaska 2003); W.

Airlines, Inc. v. Lathrop Co. , 535 P.2d 1209, 1217 (Alaska 1975)).

82 These provisions of Rule 82 permit a trial court to increase a fee award

based on "the complexity of the litigation," "the attorneys' efforts to minimize fees,"

"vexatious or bad faith conduct," and "other equitable factors deemed relevant." Alaska

R. Civ. P. 82(b)(3)(A), (E), (G), (K).

-39- 7057

----------------------- Page 40-----------------------

discretion,83 and we " 'will not find an abuse of discretion absent a showing that the

award was arbitrary, capricious, manifestly unreasonable, or stemmed from improper

motive.' " We similarly review the superior court's prevailing party determination for

abuse of discretion.85

"The prevailing party is the one who has successfully prosecuted or

defended against the action, the one who is successful on the main issue of the action and

in whose favor the decision or verdict is rendered and the judgment entered."

Alaskasland sought to enjoin the Realtors from making the Brooker appraisal available

online and brought six other claims each requesting damages in "an amount exceeding

$100,000." In July 2013 the court deemed the injunction claim moot because "[t]he last

time the Brooker appraisal was available for download to the public was December

2011," and the Realtors had since removed the appraisal from the realtor-only website.

But Alaskasland did not characterize the main issue of its lawsuit as the

removal of the Brooker appraisal from the MLS website - it sought money damages.

During oral arguments on the cross motions for summary judgment, counsel for

Alaskasland suggested that expert reports would prove it suffered damages, arguing that

when the Realtors used three of its photographs, they were actually misappropriating

Alaskasland's entire Susitna Shores marketing effort. One expert's report asserted

83 See, e.g., Baker v. Ryan Air, Inc., 345 P.3d 101, 106 (Alaska 2015); M-B

Contracting Co. v. Davis, 399 P.2d 433, 437 (Alaska 1965).

84 Bush v. Elkins , 342 P.3d 1245, 1251 (Alaska 2015) (quoting

ConocoPhillips Alaska, Inc. v. Williams Alaska Petroleum, Inc., 322 P.3d 114, 137

(Alaska 2014)); see also Tobeluk v. Lind , 589 P.2d 873, 878 (Alaska 1979).

See, e.g., Taylor v. Moutrie-Pelham, 246 P.3d 927, 928-29 (Alaska 2011).

86 Id. at 929 (quoting Progressive Corp. v. Peter ex rel. Peter , 195 P.3d 1083,

1092 (Alaska 2008)) (internal quotation marks omitted).

-40- 7057

----------------------- Page 41-----------------------

Alaskasland had suffered over $350,000 in damages and itemized such things as

"Inflated Land Purchase Costs," "Photograph Usage Cost," and "Advertising

(Promotion) Usage Cost." Another expert's report arrived at a similar damages figure

by calculating dollar amounts for Alaskasland's "Advertising costs," "Art preparation

time," "Trade show and all other promotions," "Entrance sign," and website design and

maintenance. But Alaskasland did not prevail on its claims. We cannot say the superior

court abused its discretion when it determined the Realtors were the prevailing party.

Alaskasland next argues that the Realtors incurred unreasonable or

unnecessary fees because the case did not go to trial; it was "not overwhelmingly

complex"; and the Realtors employed four attorneys who made no efforts to minimize

fees. But, as the superior court reasoned, the Realtors were merely reacting to the

complexity of the novel legal theories Alaskasland pled. Alaskasland brought a common

law misappropriation claim that has never been recognized in Alaska. Alaskasland also

brought a conspiracy to defraud claim seeking $100,000 on the theory that the Brooker

appraisal had been fraudulently altered to disparage Susitna Shores and force

Alaskasland to "acquiesce[] to a greatly inflated purchase price for the [Goode

property]." The Goodes listed their property for $146,000, and Alaskasland made an

unsuccessful offer of $95,000. Alaskasland then had the Goode property independently

appraised at $35,000 and, on the strength of that appraisal, made a $50,000 offer, which

was also rejected. Despite its conspiracy to defraud claim, Alaskasland bought the

property for $155,000 shortly before the superior court granted summary judgment to

the Realtors.

The superior court, and not this court, is optimally positioned to resolve

whether the fees charged were unnecessary or unreasonable and whether too many

-41- 7057

----------------------- Page 42-----------------------

attorneys were employed. Because of their "greater familiarity with the details of the

case" superior courts have broad discretion in this area. Alaskasland's argument on

the excessiveness of the Realtors' fees fails to persuade us that the superior court abused

its discretion when it concluded that the Realtors' fees were not excessive.

Finally, Alaskasland argues there are no grounds for an enhanced fee

award. "We have held that '[i]n general, a trial court has broad discretion to award

Rule 82 attorney's fees in amounts exceeding those prescribed by the schedule of the

rule, so long as the court specifies in the record its reasons for departing from the

schedule.' " Citing Rule 82(b)(3)(A), (E), (G), and (K), the superior court awarded the

Realtors "35% of [their] reasonably incurred actual attorney's fees" because Alaskasland

failed to prove any damages to support its numerous claims and because those claims

"lacked merit" and resulted in "unnecessarily complex" litigation. The complexity of the

The

litigation alone could have supported the superior court's enhanced fee award.

court further reasoned that had it not enhanced the Realtors' fee award, future litigants

would be encouraged to bring unnecessarily complex claims in hopes of "extort[ing]

settlements" against the backdrop of extensive and costly motion practice. The argument

Alaskasland offers us, which cites no legal authority, does not persuade us that the

87 Valdez Fisheries D ev. Ass'n v. Froines , 217 P.3d 830, 833 (Alaska 2009).

88 Id.

89 Johnson v. Johnson , 2 39 P.3d 393, 400 (Alaska 2010) (quoting United

Servs. Auto. Ass'n v. Pruitt ex rel. Pruitt, 38 P.3d 528, 535 (Alaska 2001)).

90 See BP Pipelines (Alaska) Inc. v. State, D ep't of Revenue, 327 P.3d 185,

197 (Alaska 2014) (" 'While we have occasionally expressed concern about the use of

factor ( A) - complexity of the litig ation - to enhance fe es . . . we h ave repeatedly

upheld its use.' " (quoting Ware v. Ware, 161 P.3d 1188, 1199 (Alaska 2007))).

-42- 7057

----------------------- Page 43-----------------------

superior court abused its discretion when it awarded the Realtors 35% of their actual

fees.

V. CONCLUSION

We AFFIRM the superior court's judgment.

-43- 7057

Case Law
Statutes, Regs & Rules
Constitutions
Miscellaneous

IT Advice, Support, Data Recovery & Computer Forensics.
(907) 338-8188

Please help us support these and other worthy organizations:
Law Project for Psychiatraic Rights
Soteria-alaska
Choices
AWAIC