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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Beeson v. City of Palmer (3/25/2016) sp-7092

Beeson v. City of Palmer (3/25/2016) sp-7092

           Notice:   This opinion is subject to correction before publication in the P                      ACIFIC  REPORTER.  

           Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,  


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                       THE SUPREME COURT OF THE STATE OF ALASKA                                         

JOHN  C.  BEESON  and                                             )  

XONG  CHAO  BEESON,                                               )          Supreme  Court  No.  S-15018  



                                 Appellants,                      )          Superior Court No. 3PA-08-01972 CI  



           v.                                                     )          O P I N I O N  



CITY OF PALMER,                                                   )          No. 7092 - March 25, 2016  


                                 Appellee.                        )  




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


                      Judicial District, Palmer, Kari Kristiansen, Judge.  


                      Appearances:   Ross A. Kopperud, Palmer, for Appellants.  


                      Michael R. Gatti and Mary B. Pinkel, Wohlforth, Brecht,  


                      Cartledge & Brooking, Anchorage, for Appellee. Laura Fox,  


                      Assistant  Attorney  General,  Anchorage,  and  Michael  C.  


                      Geraghty, AttorneyGeneral, Juneau, for Amicus CuriaeState  


                      of Alaska.   James S. Burling, Sacramento, California, for  


                      Amicus Curiae Pacific Legal Foundation.  


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


                      Bolger, Justices.  


                      FABE, Chief Justice.  



                      John and Xong Chao Beeson own and live on a property in the Palmer West  


Subdivision in the City of Palmer.   Since they moved to the property in 1985, the  


Beesons have experienced several flooding incidents on their land.  They attribute this  

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

flooding   to   water   backing   up   against   Helen   Drive,   a   long-standing   two-lane   road  

adjacent   to   their   property   originally   built   by   the   Matanuska-Susitna   Borough   but  

controlled by the City since 2003. After the City installed a water line under Helen Drive                                                                                                                                                                                                                                               

and repaved the road surface in 2005, the flooding became more severe and caused                                                                                                                                                                                                                                                   

 serious damage to the Beesons' home.                                                                                                                         The Beesons brought an inverse condemnation                                                                                             

claim against the City, arguing that the City was liable for the damage to their property.                                                                                                                                                                                                                                                                          

After a three-day bench trial the superior court found that the City's road reconstruction                                                                                                                                                                                                            

project was not a substantial cause of the flooding and therefore the City could not be                                                                                                                                                                                                                                                               

liable in inverse condemnation.                                                                                                    The superior court also granted attorney's fees to the                                                                                                                                                          

City.   The Beesons appeal both rulings.                                                                                                                             We affirm the superior court's decision with                                                                                                                            

respect to the inverse condemnation claim and remand for further proceedings regarding                                                                                                                                                                                                                                   

attorney's fees.                                                

II.                        FACTS AND PROCEEDINGS                                       

                           A.                          Factual Background   

                                                       TheBeesons purchased their homein                                                                                                                   thePalmer West                                                    Subdivision in1985;                                          

their property was and remains adjacent to Helen Drive, a pre-existing two-lane gravel                                                                                                                                                                                                                                                 

road constructed by the Matanuska-Susitna Borough.                                                                                                                                                                          The Beesons first noticed water  

pooling in their yard and the Helen Drive right-of-way in the spring of 1986.                                                                                                                                                                                                                                                      At the   

Beesons' request the Matanuska-Susitna Borough, which was responsible for the road                                                                                     

                                                                                                                              1 to try to eliminate the pooling. Water continued to pool  

at that time, installed a dry well                                                                                                                                                                                                                                                                                                            

on  the  Beesons'  property  in  subsequent  years.  The  characteristics  of  the  pooling  


depended on snow and rain conditions each spring.  In 1998 the Borough paved Helen  


Drive, raising the road at least five inches.  Although John Beeson testified at trial that  


                            1                         A  dry  well i  s a     large-diameter  pipe  installed  vertically  in  the  ground  and  

filled  with  porous  material  that  facilitates  the  absorption  of  water  into  the  ground.  

                                                                                                                                                                           -2-                                                                                                                                                                                7092  

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 flooding conditions after the paving remained "[a]bout the same," the superior court                                                                                                                                                                                                                  

 found that Beeson's testimony was not credible and concluded that the Beesons had                                                                                                                                                                                                                          

 routinely pumped water fromtheir property across Helen Drive to alleviate ponding after                                                                                                                                                                                                                  

 the paving.   

                                                 In   2003   the   City   of   Palmer  annexed  the   area   in   which   the   Beesons'   

 property   is   located   and   assumed   ownership   of   and   responsibility   for  Helen   Drive.   

 In 2005 the City undertook the Helen Drive Project, in which it installed a water line to                                                                                                                                                                                                                         

 deliver municipal water and reconstructed                                                                                                                the road.                           The following spring a larger than                                                                           

 usual pool of water formed on the Beesons' property, extending over their parking area                                                                                                                                                                                                                    

 and into their garage.                                                            The Beesons' property flooded again in 2007 during a warm                                                                                                                                                         

 period when a great deal of rain fell while there was still snow on the ground.                                                                                                                                                                                                        The City   

 responded by providing a steamer truck to try to rehabilitate the dry well, delivering                                                                                                                                                                                             

 material to create dikes and berms, and pumping water from the Beesons' property using                                                                                                                                                                                                                

 City   and   hired   equipment.     The property flooded                                                                                                                                    yet again                             in   2009,   damaging   the  

 Beesons' living room, basement, garage, and personal property.                                                                                                                                                                              The Beesons hired a                                                      

 professional restoration service to repair the damage.                                                                                                           

                         B.                      Proceedings  

                                                 TheBeesons filedsuit against theCity inSeptember 2008, claiming inverse  


 condemnation  under  article  I,  section  18  of  the  Alaska  Constitution2   and  the  Fifth  


 Amendment to the United States Constitution,3  for flooding damage that the Beesons  


 alleged was associated with Helen Drive.  In December 2010 the City made an offer of  


judgment to the Plaintiffs for $10,000.  The Beesons did not accept the offer.  


                         2                       "Private property shall not be taken or damaged for public use without just                                                                                                                                                                                  

 compensation."   Alaska Const. art. I,  18.                                                                                               

                         3                       "[N]or  shall  private  property  be  taken  for  public  use,  without  just  


 compensation."  U.S. Const. amend. V.  


                                                                                                                                                         -3-                                                                                                                                             7092

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                     In  the  spring  of  2011  the  City  and  the  Beesons  moved  for  summary  


judgment and partial summary judgment, respectively. After hearing oral argument, the  


superior court denied both motions.   The superior court concluded that there was a  


genuine issue of fact regarding whether the City's 2005 Helen Drive Project caused the  



                     At trial in October 2012 the Beesons focused on two issues.   First, the  


Beesons argued that the 2005 Helen Drive Project raised the elevation and changed the  


drainage of the road, causing flooding in their home.  After hearing all the evidence, the  


superior court rejected this first theory, finding that the road was in fact slightly lower  


after the Project.  The Beesons do not appeal the superior court's finding regarding the  


road elevation.  


                     Second, the Beesons asserted that even if the Project did not raise the  


elevation of the road, the City was liable in inverse condemnation because it did not  


install a culvert during the Project to relieve the drainage runoff water that backs up from  


Helen Drive; the Beesons argued that this failure to install a culvert led to their increased  


flooding damage after 2005.  John Beeson testified that he asked a site engineer for the  


2005 Helen Drive Project to install a culvert under the road in front of his property. The  


City of Palmer's design engineer, David Lundin, testified that he had been asked by the  


City to investigate a culvert as a fix to the Beesons' flooding and that he had drawn a  


culvert plan but had no finished design.  The superior court noted in its decision that  


"[t]he experts agree that if a culvert is built across Helen Drive . . . , then water could be  


diverted across the street and towards a path for natural drainage to occur."  


                     The superior court ultimately found that "Helen Drive, as repaved by the  


City, was not a substantial cause of the periodic flooding to the [Beesons'] property."  


Based on the testimony of professional engineer Donald Carlson, it found that "the  


flooding was caused by a combination of factors," one of which was "the roadway  

                                                                -4-                                                         7092

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obstructing movement of water." The other factors cited were "significantly higher than                                                                                                                                          

average temperature and rain during winter months" and the location of the Beesons'                                                                                                                                

home on their property, which "sits at the lowest point in a small basin of properties."                                                                                                             

The superior court concluded that "a takings claim cannot be based on interference with                                                                                                                                         

property rights that is 'merely the consequence of negligent government conduct' " and                                                                                                                                           

that "government activity itself must be the cause of the damage," citing an Oregon                                                                                                                                    

                                                                                                                                             4  The superior court concluded that  

Supreme Court case,                                     Vokoun v. City of Lake Oswego                                                       .                                                                                     

"[t]he Beesons cannot establish a claim for inverse condemnation based on the alleged  


negligence  of  the  City  in  failing  to  construct  a  culvert  with  the  Helen  Drive  




                                     The superior  court awarded attorney's  fees  in a February  2013  order.  


                                                                                                                                                    5  the superior court ordered the  

Relying on Alaska Rule of Civil Procedure 68(b)(2),                                                                                                                                                                                


Beesons to pay "fifty percent of [the City of Palmer's] actual reasonable attorney's fees  


                  4                  56  P.3d  396,  401  (Or.  2002).   

                  5                 Rule  68(b)  provides  in  pertinent  part:  

                                                       If  the  judgment  finally  rendered  by  the  court  is  at  least  

                                     5  percent less  favorable  to  the  offeree  than  the  offer,  .  .  . the  

                                     offeree,   whether   the   party   making   the   claim   or defending  

                                     against   the   claim,   shall   pay   all   costs   as   allowed   under   the  

                                     Civil  Rules   and   shall  pay  reasonable   actual   attorney's   fees  

                                    incurred by  the offeror  from  the  date  the  offer  was  made  as  


                                                       . . . .  

                                                       (2)               if  the  offer  was  served  more  than  60  days  after  

                                    the  date  established  in  the  pretrial  order  for  initial  disclosures  

                                    required by  Civil  Rule  26  but  more  than  90  days  before  the  

                                    trial  began,  the  offeree  shall p                                               ay  50  percent  of  the  offeror's  

                                    reasonable  actual  attorney's  fees.  

                                                                                                                  -5-                                                                                                          7092

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incurred from December 21, 2010, when it made an offer of judgment to the Beesons,                                                                                                                                                                       

to the [time of the February 4, 2013 order]."                                                                                                                                                                                 The court awarded the City $81,902.50 in                                                                                                                                                                  

attorney's fees, determining that the City had provided a reasonable accounting of time                                                                                                                                                                                                                                                                                                                                     

and labor spent on the case.                                                                                     

                                                                   The Beesons argue on appeal that the superior court erred in failing to find                                                                                                                                                                                                                                                                               

that their property had been taken or damaged by the City because their property had                                                                                                                                                                                                                                                                                                                                           

been damaged by flooding caused by a City street. The Beesons primarily claim that the                                                                                                                                                                                                                                                                                                                                            

City is liable in inverse condemnation simply because it now owns Helen Drive and the                                                                                                                                                                                                                                                                                                                                             

road as designed without a culvert blocks the natural drainage of water away from the                                                                                                                                                                                                                                                                                                                                             

Beesons' property.                                                                                 The Beesons argue that the superior court was obligated to find                                                                                                                                                                                                                                                          

compensable damage under Alaska's Constitution and the United States Constitution                                                                                                                                                                                                                                                                                                  

because all of the expert valuation witnesses testified that the Beesons suffered damage                                                                                                                                                                                                                                                                                                                  

to their property. In contrast, the City frames the issue on appeal as whether the superior                                                                                                                                                                                                                                                                                                              

court erred in ruling that periodic flooding is not a taking when the 2005 Helen Drive                                                                                                                                                                                                                                                                                                                              

Project did not create or cause the flooding. The Beesons also appeal the superior court's                                                                                                                                                                                                                                                                                                                     

award of attorney's fees.                                                                           

III.                              STANDARD OF REVIEW                                                                          

                                                                                                                                                                                                                                                                                                                               6  We review the factual  

                                                                   We review questions of constitutional law de novo.                                                                                                                                                                                                                                                                                           

 findings of a trial court for clear error, "a standard that is met if, after a thorough review  


of the record, we come to a definite and firm conviction that a mistake has been made."7  


                                  6                               Anchorage  v.  Sandberg,  861  P.2d  554,  557  (Alaska   1993).  

                                  7                                Rausch  v.  Devine,  80  P.3d  733,  737  (Alaska  2003).   

                                                                                                                                                                                                                   -6-                                                                                                                                                                                                    7092  

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

We review de novo whether the superior court correctly applied the law in awarding                                                                         

attorney's fees.               8  

IV.          DISCUSSION  


                           A  party  alleging  inverse  condemnation  must  establish  the  following  


elements: (1) a taking or damaging of private property (2) proximately caused by a  


government  entity  (3)  exercising  power  in  the  public  interest  without  formal  



condemnation proceedings.                                     A property owner  can  only  recover  damages if,  after  


meeting these three elements, he can show that the government's activities deprived him  



of some "economic advantages of ownership." 


                           Because there is ambiguity regarding when the actions of a government  


entity exercising power in the public interest can give rise to inverse condemnation  


liability for damage from surface waters, we begin by clarifying the third element of  


inverse condemnation in that specific context.  We next clarify the second element:  the  


causation standard for inverse condemnation.   We then review the superior court's  


decision  that  the  Beesons'  claim  regarding  the  2005  Helen  Drive  Project  fails  on  


causation,  the  second  element  of  the  inverse  condemnation  test,  and  the  Beesons'  


alternative argument that the City's mere ownership of the road and failure to build a  


culvert to alleviate flooding constitutes an inverse taking.   Finally, we consider the  

             8             Glamann v. Kirk                  , 29 P.3d 255, 259 (Alaska 2001).                                     

             9             See, e.g.,  Fairbanks N. Star Boroughv.LakeviewEnters., Inc.                                                            ,897 P.2d47,         


52 (Alaska 1995); Bakke v. State, 744 P.2d 655, 657 (Alaska 1987) (requiring a property  

owner to show that damage is "proximately caused . . . by the construction of a public                                                                        


work deliberately planned and carried out by a public agency").  

             10           Homeward Bound, Inc. v. Anchorage Sch. Dist., 791 P.2d 610, 614 (Alaska  



                                                                                    -7-                                                                            7092

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

proper grounds for awarding attorney's fees in an inverse condemnation case, which by                                                                                                                                  

definition raises a constitutional question.                                                                 

                 A.               Liability For Surface Water Damage Based On Government Action                                                                                                          

                                  The Washington Supreme Court has articulated a sensible standard for                                                                                                               

determining whendamagefromagovernmentroadproject                                                                                                   that affectssurfacewaters can                                     

give rise to inverse condemnation liability. Under that standard, "a municipality may be                                                                                                                                

liable for [water] damage[] to an adjoining landowner's property caused by a street                                                                                                                            

which acts to collect, channel[,] and thrust water in a manner different from the natural                                                                                                                   

               11                                                                                                                                                                                                         12  


                    before the government project, and which does so in a "concentrated volume." 


This prevents a municipality from being able to "avoid all liability by building a road  




without devices to control the flow of surface water, regardless of the consequences." 


This  standard  provides  a  helpful  framework  for  analyzing  when  the  actions  of  a  


government  entity  exercising  power  in  the  public  interest  can  give  rise  to  inverse  


condemnation liability based on damage from surface waters.  


                 B.               Legal Cause In A Claim Of Inverse Condemnation  


                                  In Bakke v. State we briefly discussed the question of proximate cause for  



a claim of inverse condemnation.                                                                                                                                                                                     

                                                                                             There we held that a cause is proximate when the  

                 11               DiBlasi  v.  City  of  Seattle,  969  P.2d   10,   16  (Wash.   1998)  (en  banc).  

                 12               Id.  at  15  (quoting  Wood  v.  City  of  Tacoma,  119  P.  859,  862  (Wash.  1911)).  

                 13               Id.  at   16;  cf.  Phillips  v.  King  County,  968  P.2d  871,  882  (Wash.  1998)  (en  

banc)   ("[A]   long line   of  Washington   cases  holds  that   a  municipality  may  not   collect  

surface  water  by  an  artificial  channel,  or  in  large  quantities,  and  pour  it,  in  a  body,  on  the  

land  of  a  private  person,  to  his  or  her  injury.").   

                 14               See 744 P.2d at 656 (addressing an inverse condemnation claim arising  


from a landowning couple's complaint that a state logging operation caused a landslide  


years later, resulting in damage to their property).  


                                                                                                           -8-                                                                                                   7092

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

injury would not have occurred "but for the act" and reasonable persons would regard                                          


this act "as a cause and attach responsibility to it."                                                                                         

                                                                                         We noted that "[a] corollary of this  


statement is, of course, that if the injury would have happened in exactly the same  




manner in the absence of the act," it "is not the proximate cause of the injury." 

                       Elsewhere we have said that one element of proximate cause is whether a  


cause was a "substantial factor" in bringing about the damage at issue.17  This substantial  


factor test is fitting with regard to inverse condemnation liability.  Though this test is  


borrowed from the tort realm and we use caution in adopting tort language in the takings  


context, we have previously looked to tort law to inform our understanding of the  


elements of proximate cause as required for a finding of inverse condemnation.  Bakke,  


an inverse condemnation case,18  cited Sharp v. Fairbanks North Star Borough, a tort  


                             19    Sharp  held  that  to  give  rise  to  a  compensable  injury  and  be  a  

negligence  case.                                                                                                                                  


            15         Id.  

            16         Id.  

            17         See,  e.g.,   Winschel  v.  Brown,   171  P.3d   142,   148  (Alaska  2007)  ("Alaska  

follows the   'substantial  factor  test'  of   [proximate]  causation,  which  generally  requires  

the  plaintiff  to  show  that  the  accident  would  not  have  happened  'but  for'  the  defendant's  

[act] and that  the . .  . act was so important in bringing about the injury that reasonable  

individuals  would  regard  it  as  a  cause  and  attach  responsibility  to  it.");  P.G.  v.  State,  

Dep't of Health & Human  Servs.,  4  P.3d  326,  334  (Alaska  2000)  ("We  have generally  

recognized that a  defendant's   .   .   .  conduct  may  be  the  legal  or  proximate  cause  of  the  

plaintiff's injury  if the .  . . act  was more  likely than not a  substantial  factor  in bringing  

about   the   injury."   (citing  Morris   v.  Farley  Enters.,  Inc.,   661   P.2d   167,   169   (Alaska  

 1983)));  Vincent  by  Staton  v.  Fairbanks  Mem'l  Hosp.,  862  P.2d  847,  851  (Alaska  1993);  

State  v.  Abbott ,  498  P.2d  712,  726-27  (Alaska   1972).   

            18         See 744 P.2d at 656-57.  


            19         See 569 P.2d 178, 181 (Alaska 1977).  


                                                                        -9-                                                                 7092

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

proximate "legal cause," an act must be "more likely than not a substantial factor in                                                                  

bringing about the injury."                     20  

                        Other states have adopted similar substantial factor tests in the takings  


context.  The California Supreme Court has held that "to establish a causal connection  


between the public improvement and the plaintiff's damages, there must be a showing  


of a substantial cause-and-effect relationship excluding the probability that other forces  


alone produced the injury."21   This aligns with the definition of proximate cause that we  


articulated in Bakke and demonstrates how the substantial factor test dovetails into our  


existing proximate cause jurisprudence.  


                        We now clarify that in the inverse condemnation realm, to be proximate a  


cause must have been more likely than not a substantial factor in bringing about the  


injury.   This does not preclude the possibility that there can be multiple substantial  


causes of damage, as appears to have been the case here, and aligns with our past holding  


in Bakke that "[a]n act . . . need not be the single producing cause of an injury to be a  


                                                                                                    22    Rather, it focuses the legal  

proximate cause, but need only be a producing cause."                                                                                             


inquiry on whether one producing cause, possibly among multiple causes of damage, is  


a substantial factor sufficient to render it a proximate cause.  


            20          Id.  (alteration omitted) (quoting                      City of Fairbanks v. Nesbett                     , 432 P.2d 607,       

610 (Alaska 1967)).                   

            21          Belair v. Riverside Cty. Flood Control Dist., 764 P.2d 1070, 1075 (Cal.  


 1988) (en banc); see also Warner/Elektra/Atl. Corp. v. County of DuPage, 771 F. Supp.  


911,  914  (N.D.  Ill.  1991),  aff'd,  991  F.2d  1280,  1286  (7th  Cir.  1993)  (referring  


approvingly to the California test).  


            22          744 P.2d at 656 (emphasis in original).  


                                                                          -10-                                                                    7092

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                                  C.	                               Whether The City Is Liable In Inverse Condemnation                                                                                                                                                                 

                                                                    Although the Beesons have consistently argued that the City is liable in                                                                                                                                                                                                                                                                                                

inverse condemnation for flooding on their property, their argument as to why has                                                                                                                                                                                                                                                                                                                                                    

 evolved over the course of this case. During trial the Beesons focused on the City's 2005                                                                                                                                                                                                                                                                                                                                     

Helen Drive Project and argued that the City was liable for (1) changing the drainage of                                                                                                                                                                                                                                                                                                                                                     

the road during the 2005 Project, which they allege caused their flooding, and (2) failing                                                                                                                                                                                                                                                                                                                             

to build a culvert during the 2005 Project, which they allege would have alleviated their                                                                                                                                                                                                                                                                                                                                        

 flooding.    But on appeal the Beesons have shifted their focus away from the City's                                                                                                                                                                                                                                                                                                                                 

2005 Project and argue that the City is liable simply because it now owns Helen Drive                                                                                                                                                                                                                                                                                                                                     

 and the road as designed without a culvert blocks the natural drainage of water away                                                                                                                                                                                                                                                                                                      

 from the Beesons' property.                                                                                                                         Under any of these theories, the City is not liable.                                                                                                                                                                                                                         We  

 address each of the Beesons' arguments in turn.                                                                                                                                                                           

                                                                     1.	                              Whether the City's actual work during the 2005 Helen Drive                                                                                                                                                                                                                                                        

                                                                                                      Project   was   a  substantial   factor   in   causing   flooding   on   the  

                                                                                                      Beesons' property   

                                                                    The superior court found as a factual matter that "Helen Drive, as repaved                                                                                                                                                                                                                                                                  

by   the   City,   was   not   a   substantial   cause   of   the   periodic   flooding   to  the   Beesons'  

property."   Though the superior court used the term "substantial cause," we assume it                                                                                                                                                                                                                                                                                                                 

was referring to the substantial factor test as a component of proximate cause.                                                                                                                                                                                                                                                                                                                                                    "A  

 finding of proximate cause is normally considered to be factual in nature and as such will                                                                                                                                                                                                                                                                                                                                          


be reversed only when clearly erroneous."                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                                                                                                    "A finding of fact is clearly erroneous if it  


leaves this court with a definite and firm conviction on the entire record that a mistake  

                                  23                               Id.  (citations  omitted).   

                                                                                                                                                                                                                  -11-	                                                                                                                                                                                                                                7092  

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

has been made.                      This standard, therefore, requires us to give great deference to the                                                                      

findings of the superior court."                                 24  

                            The superior court heard testimony and evidence regarding the causes of  


the Beesons' flooding and found that "the flooding was caused by a combination of  


factors," none of which explicitly included the work done during the 2005 Helen Drive  


Project.  On appeal the Beesons claim that the superior court's findings regarding the  


2005 Project are clearly erroneous. But their brief merely highlights the damage to their  


property and the potential relief a culvert would have provided.  The Beesons do not  


challenge the flooding causation testimony of the City's professional engineer, Donald  


Carlson, which the superior court found to be both credible and convincing. Because we  


are not left "with a definite and firm conviction on the entire record that a mistake has  

                         25  by the superior court in its reliance on Carlson's testimony, we cannot  

been made"                                                                                                                                                            


concludethat thesuperior court clearly erred in itscausationfinding regardingtheimpact  


of the 2005 Helen Drive Project. We affirm the superior court's conclusion that the City  


is not liable to the Beesons under their claim of inverse condemnation related to the 2005  


Helen Drive Project because the Project in and of itself was not a substantial factor  


contributing to the Beesons' flooding and thus could not have been a proximate cause.  


                            2.	           Whether  the  City's  failure  to  install  a  culvert  to  alleviate  


                                          flooding caused by a road it owns constitutes a taking  


                            In  addition  to  the  inverse  condemnation  claim  arising  from  the  work  


performed in connection with the 2005 Helen Drive Project, the Beesons also assert an  


              24            Nerox Power Sys., Inc. v. M-B Contracting Co.                                                    , 54 P.3d 791, 794 (Alaska             

2002) (citation omitted);                            see also Kollander v. Kollander                                     , 322 P.3d 897, 904 (Alaska                

2014) (noting that the clearly erroneous standard of review is "deferential to the superior                                                                         

court's findings").                     

              25            See Nerox Power Sys., 54 P.3d at 794.  


                                                                                      -12-	                                                                               7092

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

inverse condemnation claim stemming from the original construction of Helen Drive                                                                                                                                                                                                                                                                                                                                           

without a culvert to direct runoff water away from their property and from the 1998                                                                                                                                                                                                                                                                                                                                            

paving of the road.                                                                                  The parties litigated whether the statute of repose barred inverse                                                                                                                                                                                                                                             

condemnation  claims that might be made by the Beesons arising from the original                                                                                                                                                                                                                                                                                                                                

construction of the road and from the Borough's 1998 paving project.                                                                                                                                                                                                                                                                                                          The statute of                                                   

repose, Alaska Statute 09.10.055, provides that a person may not bring an action for                                                                                                                                                                                                                                                                                                                                                      

property damage unless commenced within 10 years of "substantial completion of the                                                                                                                                                                                                                                                                                                                                                        

construction alleged to have caused the . . . property damage."                                                                                                                                                                                                                                                                                    The superior court                                                         

concluded that such claims were barred by the statute because the paving of the road had                                                                                                                                                                                                                                                                                                                                                

been completed in July 1998 and the Beesons filed their claim in September 2008.                                                                                                                                                                                                                                                                                                                                                    The  

Beesons have not challenged the superior court's ruling on the statute of repose on                                                                                                                                                                                                                                                                                                                                                         

 appeal and we therefore do not address it.                                                                                                                                                                             

                                                                     The Beesons also claim that "when the City's road blocks the natural                                                                                                                                                                                                                                                                           

drainage [of a property], then the state and federal constitutions require that the City                                                                                                                                                                                                                                                                                                                                           

compensate the landowners for their losses."  But the Beesons have cited no authority                                                                                                                                                                                                                                              

holding that a government has a legal duty,                                                                                                                                                                                    tied to inverse condemnation                                                                                                                           , that requires            

it   to   modify   a   public   improvement   or   correct   a   pre-existing   design   defect   to   allay  

property  damage.     There   are   some   cases   in   which   inverse   condemnation   has   been  

predicated on a government's failure to perform necessary ongoing maintenance of a                                                                                                                                                                                                                                                                                                                                                                  

                                                                           26  but failed maintenance is not the focus of the Beesons' claim in this  

public project,                                                                                                                                                                                                                                                                                                                                                                                                         

                                  26                                See, e.g.                                  ,  Livingston v. Va. Dep't of Transp.                                                                                                                                               , 726 S.E.2d 264, 276-77 (Va.                                                                                                    

2012) (holding that the government could be required to compensate a property owner                                                                                                                                                                                                                                                                                                                                       

 for damage caused by stormwater overflow off a waterway that the State had rerouted                                                                                                                                                                                                                                                                                                                           

 and failed to maintain by not dredging sediment accumulation).                                                                                                                                                                                         

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 case.         Instead, the Beesons' claim is focused on remediation of an original project                                                          


 design flaw.                                                                                                                                          

                            Thus, the Beesons' inverse condemnation claim predicated on the City's  


 ownership of Helen Drive and the road's long-standing existence without a culvert fails.  


             D.          Attorney's Fees  


                         The superior court granted attorney's fees to the City in the amount of  


 $81,902.50. It based its ruling on Alaska Rule of Civil Procedure 68, which provides for  


 an award of reasonable attorney's fees to a defendant if the defendant makes an offer of  


judgment "[a]t any time more than 10 days before trial begins," the plaintiff rejects the  


 offer, and the final judgment in the case is "at least 5 percent less favorable to the offeree  


than the offer."  The Beesons do not dispute the reasonableness of the attorney's fees  


here, but rather they argue that attorney's fees should not be assessed against them in this  


 inverse condemnation case based on AS 09.60.010.  


                         Alaska Statute 09.60.010(c)(2) provides that "[i]n a civil action or appeal  


 concerning the establishment, protection, or enforcement of a right under the United  


 States Constitution or the Constitution of the State of Alaska," a court "may not order a  


 claimant  to  pay  the attorney  fees  of  the  opposing  party  .  .  .  if  [1]  the  claimant  as  


plaintiff . . . did not prevail in asserting the right, [2] the action or appeal asserting the  


right was not frivolous, and [3] the claimant did not have sufficient economic incentive  

             27          There was some discussion at trial regarding whether the City's failure to                                                            

maintain   the   dry  well   caused   flooding   on   the   Beesons'   property,   but   the   Beesons  

ultimately abandoned arguments related to maintenance of the dry well in the trial court                                                                 

 and on appeal.     

             28          See Phillips v. King County, 968 P.2d 871, 881 (Wash. 1998) (en banc) ("It  


may be that in some factual situations there could be liability on the part of a county for  


 failure to maintain a public drainage system. However, there is no allegation in this case  


that lack of proper maintenance caused the damages.  The only allegation is that design,  


not maintenance, caused the problems." (citations omitted)).  


                                                                             -14-                                                                       7092

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


to bring the action or appeal regardless of the constitutional claims involved."                                                                                                                      Even if   

those three components are not met, AS 09.60.010(e) still gives trial courts discretion to                                                                                                                          

"abate, in full or in part, an award of attorney fees . . . if the court finds, based upon                                                                                                                  

sworn affidavits or testimony, that the full imposition of the award would inflict a                                                                                                                                 

substantial and undue hardship upon the party ordered to pay the fees and costs."                                                                                                          

                                  The superior court did not consider whether under AS 09.60.010(c) the                                                                                                          

                                                                                                                                                                          30      But even if the  

Beesons had "sufficient economic incentive" to bring their action.                                                                                                                                               

superior court did determine that the Beesons had a "sufficient economic incentive" to  


bring  their  claims,  it  may  still  have  been  improper  to  assess  roughly  $80,000  in  


attorney's fees if doing so would "inflict a substantial and undue hardship" on the  


Beesons as described at AS 09.60.010(e).   Indeed, AS 09.60.010(e) focuses on the  


claimant's economic circumstances, rather than the reasonableness of attorney's fees.  


                                 Because the superior court did not consider either AS 09.60.010(c) or (e),  


we remand for the superior court to make a determination as to (1) whether the Beesons'  


economic  incentive  was  sufficient  to  exclude  them,  as  a  non-prevailing  party  who  


brought anon-frivolous constitutionalclaim,fromtheprotectionofAS09.60.010(c), and  


if so, (2) whether, in its discretion, an award of attorney's fees of over $80,000 against  


                 29              AS 09.60.010 controls here because it governs constitutional claims, and   

inverse   condemnation   claims   are   brought   under   the   Alaska   Constitution,   article   I,  

section 18:                  "Private property shall not be taken or damaged for public use without just                                                                                                        


                 30               This third prong of AS 09.60.010(c) is the only relevant element here  


because the Beesons meet the first two prongs: they did not prevail in asserting the right,  


and the right they asserted was not frivolous.  Because the City conceded that the value  


of  the  Beesons'  property  had  been  lowered  between  $35,900  and  $42,300  by  the  


flooding, sufficient economic incentive may have been present here.  


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the Beesons should be abated as an "undue hardship" under AS 09.60.010(e) based on  


the Beesons' economic circumstances.  


V.        CONCLUSION  

                   We AFFIRM the judgment with respect to the inverse condemnation claim  


because the Beesons have not established that the City's 2005 Helen Drive Project was  


a proximate cause of their flooding damage, but we REMAND for further proceedings  


regarding attorney's fees in accordance with AS 09.60.010.  


                                                          -16-                                                     7092

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