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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Burton v. Fountainhead Development, Inc. (3/17/2017) sp-7158

Burton v. Fountainhead Development, Inc. (3/17/2017) sp-7158

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

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                     THE  SUPREME  COURT  OF  THE  STATE  OF  ALASKA  

RONALD  M.  BURTON,                                          )  

                                                             )         Supreme  Court  No.  S-15990  

                               Appellant,                    )  


                                                             )         Superior Court No. 4FA-12-01642 CI  

                    v.                                       )  


                                                                       O P I N I O N  



INC.,                                                        )                                             

                                                                       No. 7158 - March 17, 2017  


                               Appellee.                     )



                    Appeal  from  the  Superior  Court  of  the  State  of  Alaska,  


                    Fourth Judicial District, Fairbanks, Jane F. Kauvar, Judge.  


                    Appearances:  James M. Hackett, Law Office of James M.  


                    Hackett,  Fairbanks,   for  Appellant.                        David  H.   Bundy,  


                    David H. Bundy, P.C., Anchorage, for Appellee.  


                    Before:  Stowers, Chief Justice, Winfree, Maassen, Bolger,  


                    and Carney, Justices.  


                    MAASSEN, Justice.  



                    A tour company hired an employee to work the tourist season as one of its  


representatives at a Fairbanks hotel where he had worked seasonally in the past.  During  


training, hotel management recalled that the employee had been difficult to work with.  


They  told  the  tour  company  they  did  not  want  him  working  at  their  hotel  and,  in  


explaining their decision, made several unfounded statements about him.  When the tour  

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

company was unable to place the employee at a different hotel because of his limited  


transportation, it terminated his employment.  


                    The employee sued the hotel for defamation and for tortious interference  


with his prospective business relationship with his employer. Following a bench trial the  


superior court rejected the tortious interference claim based on lack of causation but  


found that several of the hotel's statements were defamatory per se, justifying an award  


of general damages but not special or punitive damages.   The court also denied the  


employee's motion to amend his complaint to add a new defamation claim based on  


events that arose mid-trial.  The employee appeals.  


                    We conclude that:  (1) the superior court did not abuse its discretion in  


denying the employee's post-trial motion to amend his complaint; (2) the court did not  


clearly err in its application of a conditional business privilege or in its finding that the  


defamation did not cause the employee's damages; and (3) the court did not clearly err  


in its award of damages.  We therefore affirm the judgment of the superior court.  




          A.        Facts  

                    Princess Tours hired Ronald Burton to work the 2011 tourist season as a  


"guest service host."  Guest service hosts are stationed at hotels where Princess houses  


its tour groups; they help hotel employees greet and serve the large numbers of Princess  


guests as they arrive and require various services.  Burton was hired to work primarily  


at  Bear  Lodge,  owned  by  Fountainhead  Development,  Inc.,  because  it  was  within  


walking distance of his home and he lacked alternative transportation; however, he also  


agreed to work as needed at other Princess-affiliated hotels in Fairbanks.  Burton had  


worked seasonally for Princess Tours before, from 1999 to 2004, and at Bear Lodge  


from 2000 to 2003.  


                                                               -2-                                                        7158

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

                                                            Burtoncompletedseveral weeks oftrainingin the spring                                                                                                                                                                                                     of2011,including                       

a visit to Bear Lodge.                                                                                     There, in the presence of his Princess supervisor, Jonathan                                                                                                                                                                                     

Bradish, and aFountainhead manager,                                                                                                                                       StuartCampbell, Burton criticized the traffic flow                                                                                                                                                      

in the hotel's parking lot.                                                                                              Campbell relayed the criticism to Fountainhead's general                                                                                                                                                                                  

manager, Shane Arnold, who passed it on to the personnel and operations manager,                                                                                                                                                                                                                                                                           

Kathleen Lanning.                                                                     The criticism reminded the management team of other complaints                                                                                                                                                                     

Burton had made while working on Fountainhead's property years before. Lanning and                                                                                                                                                                                                                                                                                                    

Timothy Cerny, Fountainhead's president, decided they did not want Burton as a guest                                                                                                                                                                                                                                                                                     

 service host at Bear Lodge, and they asked Arnold to speak to Princess about their                                                                                                                                                                                                                                                                                             


                                                            Arnold told Bradish of Fountainhead's decision on May 13.                                                                                                                                                                                                                    The two men                               

later recalled the conversation differently, but the superior court found that Arnold told                                                                                                                                                                                                                                                                                          

Bradish that Burton was "not allowed" on Fountainhead's property.                                                                                                                                                                                                                                                              When Bradish  

asked why, Arnold said that Burton had once been involved in an altercation with a guest                                                                                                                                                                                                                                                                                 


and that he had "defaced" Fountainhead property.                                                                                                                                                                                       


                                                            Burton  was  scheduled  to  begin  work  at  a  different  hotel  on  May  16.  


Bradish pulled Burton from the schedule and told him about Fountainhead's allegations.  


Burton denied them, and Bradish granted him a "grace period" to sort things out with  


Fountainhead. Over the next several days Burton exchanged emails and phone calls with  


Lanning, and on May 24 she sent him a letter "to recap [a] phone conversation of last  


week." According to the letter, Burton was not "banned" from Fountainhead's property;  

                               1                            Bradish's testimony implies that the "defacing property" comment may                                                                                                                                                                                                                                                 

have had to do with damage to the Fountainhead "brand's image" rather than physical                                                                                                                                                                                                                                                                             

property, though it is not entirely clear. Bradish testified that Arnold was hesitant to "go                                                                                                                                                                                                                                                                                         

into it" and that the "defacing property" comment could have been taken "multiple                                                                                                                                                                                                                                                                        


                                                                                                                                                                                             -3-                                                                                                                                                                                7158

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

he  was  welcome  there  "anytime  as  a  guest,"  but  he  would  not  be  welcome  as  an  


employee. Fountainhead's decision was based on its impression that Burton was "never  


happy  with  [the hotel's]  policies and procedures" when  working  there in the past.  


Lanning also mentioned a different incident when Burton "had not been supportive of  


a management decision while in the presence of guests," though she had heard the story  


second-hand and lacked any other details.  Lanning's letter concluded that employing  


Burton at Bear Lodge would not be "in the best interest of [Fountainhead] or that of  


Princess's guests."  


                    On May 28 Burton emailed Bradish, reminding himthat he could not easily  


"work at any other location than Bear Lodge except on rare occasions" because of his  


transportation issues.  Anticipating that this meant the end of his Princess employment,  


he asked "that any action for [his] separation from employment be in writing and address  


the cause."  Bradish emailed back, confirming that Princess had hired Burton "hoping  


to place [him] at Bear Lodge" and that it could "no longer have [him] on [its] team [due]  


to schedule parameters."  Princess documented Burton's termination internally with a  


note that said he "[w]as banned from Fountainhead Properties by their management,  


which meant he couldn't work where we wanted him to."  Princess also marked Burton  


as ineligible for rehire.  


          B.        Proceedings  

                    In May 2012 Burton filed a complaint against Fountainhead alleging two  


causes of action:  (1) tortious interference with a prospective business relationship, for  


causing Princess to terminate his employment; and (2) defamation based on Arnold's  


statements to Bradish about "Burton's past performance as a [Fountainhead] employee."  


Fountainhead raised defenses of truth and privilege, among others.  The superior court  


                                                               -4-                                                         7158

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

held a bench trial over three days in December 2014, then scheduled closing arguments  


for February 2015.  


                    Before  closing  arguments,  Burton  moved  pursuant  to  Alaska  Civil  


Rule 15(b) to amend his complaint to add an additional defamation claim based on  


conduct that "occurred . . . during the course of the court trial." The court had suggested  


mid-trial that Fountainhead talk to Princess and attempt to correct any misimpression  


Princess might have about why Burton was barred from working at Bear Lodge.  That  


evening Fountainhead wrote a letter to Princess asking the company to correct  the  


"termination paperwork"in Burton's personnel fileto reflectthat he"was never'banned'  


from [Fountainhead's] properties."  To help explain why it had not wanted Burton to  


work at Bear Lodge, it attached a copy of Lanning's 2011 letter to Burton.  Burton's  


amended complaint alleged that this mid-trial correspondence was a separate publication  


and  libel  that  caused  him additional  harm and  entitled  him  to  additional  damages.  


Fountainhead did not oppose Burton's motion to amend, and it filed an answer to the  


amended complaint.  


                    InFebruary2015,whilehearing theparties' closing arguments, thesuperior  


court noted that Burton's motion to amend was not yet ripe for decision.  But the court  


said it would take Fountainhead's mid-trial letter into consideration in crafting any  


damages award.  


                    A few weeks later the court issued its written decision on the merits.  It  


found against Burton on his claim for tortious interference with a prospective business  


relationship on the ground that his employment ended because of his "refusal to work at  


Princess locations besides Bear Lodge," not because of what Fountainhead said about  


him to Princess.  The court concluded that Fountainhead had a "conditional privilege to  


publish defamatorystatements"becauseofitssharedbusinessrelationship withPrincess,  


                                                               -5-                                                         7158

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

but that it abused this privilege with two statements to Princess that were defamatory per                                                                                                                                                                                                                                 

 se:     "that   [Burton]   had   an   altercation  with   a   guest,   and   that   [Burton]   defaced  

 [Fountainhead's] property."                                                                                The court awarded Burton $15,000 in general damages on                                                                                                                                                            

the defamation claim but denied special and punitive damages.                                                                                                                                                                                       In a separate written                                  

order the court denied Burton's motion to amend his complaint, though it reiterated in                                    

its decision that it had taken Fountainhead's mid-trial letter into account "in fashioning                                                                                                                                                                                                     

 [Burton's] award in this case."                                                                                      

                                                   Burton requested a new trial or additur, both of which were denied.  The                    

court awarded attorney's fees to Fountainhead as the prevailing party because Burton                                                                                                                                                                                                                        

had failed to accept an Alaska Civil Rule 68 offer of judgment in an amount greater than                                                                                                                                                                                                                               

the award of damages.                                                                2  


                                                   Burton appeals.   He argues that the superior court abused its discretion  


when it denied his post-trial motion to amend his complaint; that it erred in determining  


that Fountainhead was privileged to interfere with his employment relationship; that it  


misstated the legal standard for causation and erred in finding that he failed to prove this  


element of his tortious interference claims; that it erred in failing to include lost wages  


and benefits in its award of general damages; and that it erred in failing to award punitive  



                         2                         See  Alaska R. Civ. P. 68(b) ("If the judgment finally rendered by the court                                                                                                                                                                                     

is at least 5 percent less favorable to the offeree than the offer, . . . the offeree . . . shall                                                                                                                                                                                                                 

pay [a portion of ] reasonable actual attorney's fees incurred by the offeror from the date                                                                                                                                                                                                                             

the offer was made.").                             

                         3                         Burton also asserts that the superior court "erred and abused its discretion  


in denying [his] motion for new trial and additur," but he does not expand on this  


argument.  "[W]here a point is given only a cursory statement in the argument portion  


of a brief, the point will not be considered on appeal." Burts v. Burts, 266 P.3d 337, 344  



                                                                                                                                                               -6-                                                                                                                                                   7158

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


                      We review a trial court's "decision to permit or deny an amendment to the                                           

pleadings . . . for abuse of discretion."4                                                                     

                                                                  Abuse of discretion exists "when the decision  




on review is manifestly unreasonable." 

                                                                                                          6   We review the trial  

                      "In a bench trial, the judge is the trier of fact . . . ."                                                        


court's factual findings for clear error, as "[i]t is the function of the trial court, not of this  


court, to judge witnesses' credibility and to weigh conflicting evidence."7  

                                                                                                                            Clear error  


exists "when 'after a thorough review of the record, we come to a definite and firm  


                                                                       8  "[W]hether the superior court applied the  

conviction that a mistake has been made.' "                                                                                               


correct  legal  standard  is  a  question  of  law  to  which  we  apply  our  independent  





(Alaska 2011) (quoting Adamson v. Univ. of Alaska , 819 P.2d 886, 889 n.3 (Alaska  


           4          Ranes & Shine, LLC v. MacDonald Miller Alaska, Inc., 355 P.3d 503, 508  


(Alaska 2015) (citing Miller v. Safeway, Inc ., 102 P.3d 282, 288 (Alaska 2004)).  


           5          Id.  (citing  Tufco, Inc.  v. Pac.  Envtl.  Corp.,  113 P.3d  688, 671 (Alaska  



           6           Wasserman v. Bartholomew, 38 P.3d 1162,  1166 (Alaska 2002) (citing  


Alaska R. Civ. P. 52(a)).  


           7          Lentine  v.  State,  282  P.3d  369,  375-76  (Alaska  2012)  (quoting  In  re  


Adoption of A.F.M. , 15 P.3d 258, 262 (Alaska 2001)).  


           8          Laybourn v. City of Wasilla, 362 P.3d 447, 453 (Alaska 2015) (quoting 3-D  


 & Co. v. Tew's Excavating, Inc., 258 P.3d 819, 824 (Alaska 2011)).  


           9          Ayuluk  v. Red  Oaks Assisted Living, Inc., 201 P.3d  1183, 1194 (Alaska  


2009)  (citing Landers  v. Municipality of Anchorage, 915 P.2d  614, 616 n.1  (Alaska  


                                                                     -7-                                                              7158

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

                                We note some inconsistency in how we have formulated our standard of                                                                                                   

review of a damage award made by a judge sitting as the finder of fact.                                                                                                        In  Breck v.   

Moore  we said that we "review[] an award of damages for an abuse of discretion and                                                                                                                


independently review[] the law applied by the trial court,"                                                                                                                                    

                                                                                                                                             and some later cases relied  



on Breck for this abuse-of-discretion standard.                                                                  But Breck cited only Johnson v. Alaska  



State Department of Fish & Game,   which states, consistent with earlier cases, that the  


applicable standard is clear error except with regard to questions of law:  


                                "[A] determination of damages by the trial court is a finding  


                                of fact which will not be disturbed on appeal unless clearly  


                                erroneous."  State v. Guinn, 555 P.2d 530, 544-45 (Alaska  


                                1976). We have reviewed the record in this case and[] we do  


                                not find clear  error  in  any  of the superior  court's  factual  


                                findings.                 However,  we  do  not  limit  our  review  of  the  


                                superior court's damages decision to simply an evidentiary  


                                review.                "[T]his  court  will  also  intervene  when  the  trial  


                                court's  calculations  are  in  disregard  of  a  rule  of  law  



                               pertaining to damage measures."  Id. at 545. 



                10              910 P.2d 599, 606 (Alaska 1996) (citing                                                        Johnson v. Alaska State Dep't of                                        

Fish & Game                       , 836 P.2d 896, 910 (Alaska 1991)) (remanding for redetermination of                                                                                                 

damages measured by cost of removing plat restriction or diminution in property value                                                                                                          

caused by restriction, in case involving failure to disclose water and sewage disposal                                                                                                  

restrictions in real estate sale).                                       

                11              See, e.g., 3-D & Co., 258 P.3d at 829; State, Commercial Fisheries Entry  


 Comm'n v. Carlson, 191 P.3d 137, 141 (Alaska 2008); Fyffe v. Wright, 93 P.3d 444, 451  


(Alaska 2004).  


                12              836 P.2d at 910.  


                13             Id.  

                                                                                                   -8-                                                                                          7158

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

                          Notwithstanding  Breck, we again applied the clear error standard a year                                                                 

later. In        Pluid v. B.K.             we held that "[t]he determination by a trial court sitting as a finder                                               

of fact as to the proper amount to be awarded as compensatory damages is not to be                                                                                      

                                                                                                  14 we went on to say that as long as the  

disturbed on appeal unless it is clearly erroneous";                                                                                                                   

trial court "follows the correct rules of law, and [its] estimation appears reasonable and  


is grounded upon the evidence, [its] finding will remain undisturbed."15   We applied the  


same standard in other cases.16  


                           Even while applying the clear error standard of review, however, we have  


recognized that the fact-finder necessarily has some latitude in determining the amount  


of damages to award.  "Certainly in many cases . . . some items of damage cannot be  


fixed with mathematicalprecision,"and "[i]n thoseinstances thetrialjudgeis necessarily  


                                       17    Reviewing an award of general damages in another defamation  

forced to estimate."                                                                                                                                  


case,  we  observed  that  "the  trier  of  fact  [is  permitted]  a  great  deal  of  latitude  in  


determining the magnitude of . . . damage awards," and "[s]ince proof of damages is not  


required if words are deemed actionable per se, they clearly cannot be computed with  


mathematical certainty."18                             We quoted a California case for the proposition that fixing  


             14            948 P.2d 981, 983 (Alaska 1997) (citing                                         Morrison v. State                  , 516 P.2d 402,       

405 (Alaska 1973)).       

             15           Id. (quoting Morrison, 516 P.2d at 405).  


             16           Brandner v. Hudson, 171 P.3d 83, 86 (Alaska 2007) (citing Pluid, 948 P.2d  


at 983); Peterson v. Ek, 93 P.3d 458, 463 (Alaska 2004) (citing Beaux v. Jacob, 30 P.3d  


90, 97 (Alaska 2001)); MAPCO Express, Inc. v. Faulk, 24 P.3d 531, 536 (Alaska 2001)  


(citing Pluid, 948 P.2d at 983).  


             17           Morrison, 516 P.2d at 405.  


             18           Alaska  Statebank  v.  Fairco,  674  P.2d  288,  295  (Alaska  1983) (citing  



                                                                                   -9-                                                                            7158

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

 "damages [for harm suffered to intangible interests such as reputation] has long been                                                                   

vested in the sound discretion of the trier of fact . . . subject only to the passion and                                                                  

                                      19    In short, a damages award, and particularly a general damages  

prejudice standard."                                                                                                                             

 award, will often require the fact-finder to exercise some discretion along an acceptable  


 continuum - unlike, for example, a finding about whether the traffic signal was red or  



                         At bottom, however, deciding the amount of compensatory damages is the  


job of the finder of fact, whether a jury or the judge in a bench trial; as such it is subject  


to the clear error standard of review.  We do not review jury awards for an abuse of  


 discretion, and we see no reason to review judges' awards differently when judges are  


performing the same fact-finder role.  We take this opportunity to reaffirm that "[a] trial  


 court's determination of damages is a finding of fact which we affirm unless it is clearly  


 erroneous[, b]ut we apply our independent judgment in deciding whether the trial court's  



 award of damages is based on an erroneous application of law."                                                             




Eslinger v. Henderson, 457 P.2d 998, 1000 (N.M. 1969)).  

             19          Id. at 295-96 (alterations in original) (quoting Bertero v. Nat'l Gen. Corp.,  


 529 P.2d 608, 624 (Cal. 1974)).               

             20          Beaux, 30 P.3d at 97 (citing Curt's Trucking Co. v. City of Anchorage, 578  


P.2d 975, 977 (Alaska 1978)). We accordingly disavow inconsistent language in Breck  


v. Moore, 910 P.2d 599, 606 (Alaska 1996);  Fyffe v. Wright, 93 P.3d 444, 451 (Alaska  


2004);  State, Commercial Fisheries Entry Commission v. Carlson, 191 P.3d 137, 141  


 (Alaska 2008); and 3-D & Co. v. Tew's Excavating, Inc., 258 P.3d 819, 829 (Alaska  



                                                                             -10-                                                                       7158

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

IV.	         DISCUSSION  


             A.	          TheSuperiorCourt DidNot AbuseItsDiscretionBy DenyingBurton's  


                          Post-Trial Motion To Amend His Complaint.  


                          Burton contends that Fountainhead's decision to republish Lanning's 2011  


letter in its mid-trial correspondence with Princess was a new instance of defamation that  


the parties then litigated by consent.  He argues that the superior court therefore abused  


its discretion when it denied his post-trial motion to amend his complaint to include a  


new defamation claim.   But the record does not support the contention that the re- 


publication, though raised as an issue toward the end of trial, was then litigated as a  


separate claim.  


                          Under Civil Rule 15(b), "[w]hen issues not raised by the pleadings are tried  


by express or implied consent of the parties, they shall be treated in all respects as if they  


had been raised in the pleadings."  But "[i]mplied consent . . . is . . . difficult to establish  


and seems to depend on whether the parties recognized that an issue not presented by the  


pleadings entered the case at trial. If they do not, there is no consent and the amendment  

                                       21    We have recognized trial by consent when the new issue was  


cannot be allowed." 

identified at the beginning of trial and litigated by both sides,22  but not when the parties  


             21           Tufco, Inc. v. Pac. Envtl. Corp.                          , 113 P.3d 668, 673 (Alaska 2005) (ellipses                        

in original) (quoting 6A C                       HARLES  A. W              RIGHT, A         RTHUR  R. M            ILLER  & M          ARY  KAY  KANE,  

   EDERAL PRACTICE AND PROCEDURE  1493 (2d ed. 1990)).                                               


             22           See Gold Dust Mines, Inc. v. Little Squaw Gold Mining Co.                                                       , 299 P.3d 148,       

 164 (Alaska 2012) (noting that the claim was "generally covered in the pleadings" and                                                                          

"actively litigated by both parties at trial"); Sparks v. Gustafson, 750 P.2d 338, 341-42  


(Alaska 1988) ("Although the theories which plaintiffs presented for trial were murky   

at best, [defendant's] counsel indicated at the beginning of trial that he viewed plaintiffs'  


claim as one for unjust enrichment and was prepared to try the case as such.").  


                                                                               -11-	                                                                         7158

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

failed to actively litigate the claim                              23 or when one party did not have the opportunity to     

contest it.        24  

                          Here, though Fountainhead appears to concede on appeal that "the issues  


                                                                                                  25  the record does not show that the  

raised by the amendment" were tried by consent,                                                                                                                    


issues were litigated as a new and separate claim. The issue of re-publication arose mid- 


trial when the superior court asked Fountainhead's president whether his company had  


ever  informed  Princess  that  Burton  was  not  in  fact  "banned"  from  Fountainhead  


property, giving Princess the opportunity to correct its internal records about the reason  


for Burton's termination. The court "invite[d] the parties, while we have a break tonight,  


to look and see if they might not see how they could address this problem with what  


Princess heard in 2011 and maybe what Princess should have heard."  


                          Thenext day Fountainhead recalledLanning, its manager ofoperations and  


personnel, to the stand as its last witness.  Lanning testified that she had sent a letter to  


Princess the night before "[b]ecause the [c]ourt asked  us to."                                                                   The letter  informed  


             23           See Tufco           , 113 P.3d at 673-74;                     Sparks, 750 P.2d at 341 (noting that "the                                 

court refused to find implied consent to try an issue on which the evidence was brief,                                                                

undeveloped, and one[-]sided" (citing                                      Alaska Prot. Servs., Inc. v. Frontier Colorcable,                       

Inc., 680 P.2d 1119, 1124 (Alaska 1984))).                           

             24           See Hill v. Ames, 606 P.2d 388, 390 (Alaska 1980) (concluding that the  


"appellee  did  not  have  an  opportunity  to  put  in  countervailing  evidence  on  those  


theories, . . . the court was not apprised that those questions were to be litigated," and  


the  appellant  failed  to  file  a  motion  to  amend);  but  see  Sparks,  750  P.2d  at  341  


(concluding that, unlike in Hill, the defendant's counsel was aware of the plaintiffs'  


theory of the case from the beginning of trial "and was prepared to try the case" on that  


theory (citing Hill, 602 P.2d at 390)).  


             25           Fountainhead's  brief  notes  that  "failure  to  amend  does  not  affect  the  


outcome when the issues raised by the amendment are tried anyway, as was the case  



                                                                                 -12-                                                                           7158

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


Princess that Burton had never in fact been "banned" from Fountainhead properties, and  

it included as an attachment the letter Lanning had sent Burton in May 2011 outlining  


the company's concerns about his attitude.  The 2011 letter also mentioned "an incident  


where [Burton was not] supportive of a management decision while in the presence of  


guests," while acknowledging that Fountainhead lacked any other details about that  




                    The court interjected that it had intended something else:  "[I]t wasn't that  


I said you should send any particular letter, the idea was to have you use the time to talk  


among yourselves to see if, perhaps, there is a way that you could help overcome this  


stigma on [Burton's] record."  The court further observed, "I think actually this [new  


letter] probably did more damage than good."  


                    Fountainhead's new correspondence was admitted into evidence without  


objection, and Burton's attorney cross-examined Lanning about her 2011 letter.  But  


although Burton's attorney stated that he did "not agree[]" that the new correspondence  


was "a valid, proper retraction" of the earlier defamation, he did not suggest that it was  


itself  a  new,   separate  instance  of  defamation.                             Nor  did  he  address  the  new  


correspondence during Burton's brief rebuttal case.  


                    Instead,  it  was  only  when  Burton  moved  to  amend  his  complaint  in  


February 2015, two months after the close of evidence, that he first asserted that the mid- 


trial correspondence was a re-publication and hence a new libel.  The superior court  


heard closing arguments several days later and announced that "the motion to amend the  


complaint is not ripe and won't be considered as part of this oral argument" because the  


court wanted to "go ahead [with its verdict] on the evidence that was presented at the  


trial."   Burton nevertheless addressed his motion to amend in his closing argument,  


arguing that the mid-trial letter further damaged him.  Fountainhead did not respond to  


that argument.  The court reiterated at the end of the hearing that the motion to amend  

                                                              -13-                                                         7158

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

was not ripe and that the court did not want "another volume of post-trial litigation," but                                                                                                                        

it said it would consider whether the new letter contributed to Burton's damages.  The        

court's later written order confirms that this is what it did.                                                                                      

                                  This record does not support Burton's contention that a new defamation                                                                                      

claim was tried by consent. The mid-trial correspondence was not entered into evidence                                                                                                               

                                                           26     Burton's counsel did not call it a new instance of defamation  

until the trial's last day.                                                                                                                                                                   

at the time.                       Without notice that a new claim had  arisen,  Fountainhead  lacked  the  


opportunity or incentive to mount a defense to it as a separate claim.27                                                                                                           It was therefore  


reasonable for the court, when considering Burton's later motion to amend, to observe  


that a new defamation claim could not be resolved without "another volume of post-trial  


litigation" addressing the specific circumstances of the mid-trial letter.  


                                  Instead of a separate claim for defamation, the letter was treated at trial as  


evidence of Fountainhead's failure to properly remedy the defamation that Burton had  


pleaded at the outset; the court accordingly considered the letter in calculating Burton's  


damages.  The court thus treated the alleged re-publication just as the parties had at trial  


- as evidence relevant to the claims already pleaded.  No amendment of the complaint  


was necessary for this purpose.  


                                  Nor was Burton entitled to an amendment to conform the pleadings to a  


new, mutually litigated claim of defamation.  Trial by implied consent is "difficult to  


establish," and the record supports a conclusion that it was not established here.28                                                                                                                            The  


                 26               Cf.Sparks                 , 750 P.2d at 341-42 (noting that issue                                                     triedby consentwas raised                           

at the beginning of trial).                       

                 27               See Tufco, 113 P.3d at 673.  


                 28              Id. (quoting WRIGHT, M                                        ILLER  & K                ANE, supra                   note 21,  1493).         


                                                                                                        -14-                                                                                                  7158

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

superior court did not abuse its discretion when it denied Burton's motion to amend his                                                                                            



              B.	            The Superior Court Did Not Err In Finding That Fountainhead Was  


                             Protected By A Conditional Business Privilege.  


                             The superior court found that Fountainhead "was within its rights" when  


it decided to reject Burton's employment at Bear Lodge and that it was protected by a  


business privilege when it reported this decision to Princess.  The court decided that  


Fountainhead's only potential liability could be for its abuse of that privilege when it  


made the two unsubstantiated claims:  that Burton had an altercation with a guest and  


that he had defaced hotel property. Burton argues that the court applied the wrong legal  


standard in analyzing whether Fountainhead's decision was privileged, clearly erred in  


finding that the decision was made in good faith, and abused its discretion by failing to  


adequately explain its finding.  


                             One of the necessary elements of a claim for tortious interference with a  

                                                                       30  is the "absence of privilege or justification for the  


prospective business relationship 

              29             Burton   also   challenges   the    superior   court's   "refus[al]   to   rule   that  

[Fountainhead's] December 10, 2014 written publications to Princess libeled Burton."                                                                                                       

But as discussed above, the superior court did not abuse its discretion when it declined                                                                               

to consider a separate claim of libel. And since the question whether the December 2014                                                                                        

correspondence constituted defamation involves factual issues which were not decided                                                                                     

below, the question is not properly before us.                                             

              30             On appeal Burton identifies his claim as one for tortious interference with  


an employment contract.  We address his argument instead as he framed it in the trial  


court - as one for tortious interference with a prospective business relationship - but  


we note that the law governing the two claims often overlaps.  See, e.g., Cornelison v.  


TIG Ins., 376 P.3d 1255, 1269 (Alaska 2016) (noting that "[t]he superior court analyzed  


[the plaintiff's] claim as either a tortious interference with contract claim or a tortious  


interference with a prospective economic advantage claim" but deciding to consider the  


claim "to be one for tortious interference with contract because no prospective business  



                                                                                        -15-	                                                                                 7158

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


defendant's conduct."                                             We agree with the superior court's decision that Fountainhead's                                                                  

conduct in this case was subject to a conditional business privilege.                                                                                                                    When considering   

claims of tortious interference, we recognize a clear distinction between persons who                                                                                                                                           

interfere with the contracts of competitors and those who interfere with contracts in                                                                                                                                                 

which they have a direct interest themselves - and "where a direct interest in a contract                                                                                                                           


is involved, there is reason to be more liberal in granting the privilege to interfere."                                                                                                                                                      

Accordingly,  "where  there  is  a  direct  financial  interest  in  a  contract,  the  essential  


question in determining if interference is justified is whether the person's conduct is  


motivated by a desire to protect his economic interest, or whether it is motivated by spite,  


malice, or some other improper objective."33  




relationship [was] at issue.").  

                  31                K & K Recycling, Inc. v. Alaska Gold Co.                                                                       , 80 P.3d 702, 717 (Alaska 2003)                                         

 (citing Odom v. Fairbanks Mem'l Hosp., 999 P.2d 123, 132 (Alaska 2000)). The claim's  


elements are:                         "(1) an existing prospective business relationship between [the plaintiff]                                                                                                    

and a third party; (2) defendant's knowledge of the relationship and intent to prevent its                                                                                                                                            

fruition; (3) failure of the prospective relationship to culminate in pecuniary benefit to  


the plaintiff; (4) conduct of the defendant interfering with the prospective relationship;  


 (5) damages caused by the defendant; and (6) absence of privilege or justification for the  


defendant's conduct."  Id. (citing Odom, 999 P.2d at 132).  


                  32                Bendix Corp. v. Adams, 610 P.2d 24, 30 (Alaska 1980).  


                  33                Id. at 31. In Bendix we recognized a parent company's privilegeto interfere  


in contractual relations between its subsidiary and a third party.  Id.   In  Waldroup v.  


Lindman we recognized an insurance company's privilege to interfere with a physician- 


patient relationship by denying a claim for medical payments.   28 P.3d 293, 297-99  


 (Alaska 2001).  


                                                                                                                 -16-                                                                                                          7158

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

                             Burton argues that Fountainhead's decision to reject his employment at                                                                                   


 Bear Lodge was "motivated by animus, malice, and a desire to injure Burton."                                                                                                           

                                                                                                                                                                              But a  


party's motivation "for invading the [prospective business relationship] of another is  




normally [an issue] for the trier of fact, particularly when the evidence is in conflict." 

We give the trial court's factual determinations "particular deference" when they are  


based on oral testimony, "because the trial court, not this court, performs the function of  


judging the credibility of witnesses and weighing conflicting evidence."36                                                                                            Here, the  


 superior court found that Fountainhead acted "within its rights" except with regard to the  


two defamatory statements, implicitly concluding that the privilege was not otherwise  


 abused.  That Fountainhead was motivated to protect its legitimate business interests,  


rather than by malice or spite, has ample support in the record.37  


               34            See RAN Corp. v. Hudesman                                    , 823 P.2d 646, 648 (Alaska 1991) (observing                              

that an interested party retains the privilege only so long as he acts in good faith, and                                                                                         

 "not where he is motivated by spite, malice, or some other improper objective");                                                                                        Alyeska  

Pipeline Serv. Co. v. Aurora Air Serv., Inc.                                                 , 604 P.2d 1090, 1094 (Alaska 1979).                               

               35            Aurora Air , 604 P.2d at 1094 (citing Am. Sur. Co. v. Schottenbauer , 257  


 F.2d 6, 12-13 (8th Cir. 1958); Cal. Beverage & Supply Co. v. Distillers Distrib. Corp.,  


 323 P.2d 517, 524 (Cal. Dist. App. 1958); Barlow v. Int'l Harvester Co., 522 P.2d 1102  


 (Idaho 1974); Owen v. Williams, 77 N.E.2d 318 (Mass. 1948)).  


               36            Ebertz v. Ebertz, 113 P.3d 643, 646 (Alaska 2005) (quoting In re Adoption  


 of A.F.M., 15 P.3d 258, 262 (Alaska 2001)).  


               37            Because the court's finding that Fountainhead did not act with an unlawful  


motivation is implicit in its other conclusions and its discussion of the evidence, we also  


reject Burton's argument that the court abused its discretion when it failed to make  


 express findings about Fountainhead's motivations. See MAPCO Express, Inc. v. Faulk,  


 24 P.3d 531, 537-38 (Alaska 2001) ("A trial court's findings are sufficiently 'clear and  


 explicit' if they (i) allow for meaningful appellate review and (ii) resolve all critical  


 issues and disputes between the parties." (citing Sullivan v. Subramanian, 2 P.3d 66, 69- 


 72 (Alaska 2000); Beaulieu v. Elliott, 434 P.2d 665, 670 (Alaska 1967))).  


                                                                                         -17-                                                                                  7158

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

                                                  We affirm the trial court's determination that Fountainhead was protected                                                                                                                                                                       

by the conditional business privilege and that it did not abuse the privilege except with                                                                                                                                                                                                                           

regard to the two defamatory statements Arnold made to Bradish.                                                                                                                                                                                        38  


                          C.	                      The   Superior   Court   Did   Not   Clearly   Err   In   Deciding   That  


                                                   Fountainhead's  Defamatory  Statements  Did  Not  Cause  Burton's  


                                                   Termination By Princess.  


                                                   The  question  remains  whether  Fountainhead  tortiously  interfered  with  


Burton's prospective business relationship with Princess through its two defamatory and  


therefore unprivileged statements:  that Burton had an altercation with a guest and that  


he defaced hotel property.  The superior court concluded that Burton failed to prove  


 causation, finding that his termination was caused not by Fountainhead's defamatory  


 statements to Princess but rather by Burton's "refusal to work at Princess locations  


besides Bear Lodge."  Burton contends this was clear error, but we disagree.  


                                                   Bradish, Burton's supervisor at Princess, testified that Burton advised him  


throughout the 2011 hiring process that he "could only work at Bear Lodge, as opposed  

                         38                        By discussing whether Fountainhead's actions were subject to a qualified                                                                                                                                                                     

business privilege we do not mean to overlook the possibility that Fountainhead was not                                                                                                                                                                                                                                  

 liable for tortious interference with a contract because it was in effect a party to the                                                                                                                                                                                                                                

 contract.   Compare Wells Fargo Bank v. Ariz. Laborers, Teamsters & Cement Masons                                                                                                                                                                                                                     

Local No. 395 Pension Tr. Fund                                                                                            , 38 P.3d 12, 31 n.19 (Ariz. 2002) (en banc) (declining                                                                                                              

to decide "whether a party to a tripartite contract can be liable in tort for interfering with                                                                                                                                                                                                                       

rights as between the other parties to the agreement"),                                                                                                                                                  with Atlanta Mkt. Ctr. Mgmt. Co.                                                                               

 v.  McLane, 503 S.E.2d 278, 283 (Ga. 1998) ("The intended third-party beneficiary of a                                                                                                                                                                                                                                          

 contract, legally authorized to enforce the contract, cannot be held liable for tortious                                                                                                                                                                                                              

 interference since he is not a stranger to the contract." (citing                                                                                                                                                             Cohen v. William Goldberg                                          

 &Co.                  , 413 S.E.2d 759 (Ga. 1991))).                                                                                    See also K &K Recycling, Inc. v. Alaska Gold Co.                                                                                                                                           ,  

 80   P.3d   702,   716   (Alaska   2003)   (holding  that   because   a   contractual   assignment  

 "essentially gave [the defendant] the rights of a party, [the defendant] was not a true                                                                                                                                                                                                                          

 outsider to the contract, and thus [a claim for tortious interference with a contract] could                                                                                                                                                                                                                   

not lie against him").  We decide the issue as the superior court and the parties framed                                                                                                                                                                                                                   

 it, as one of privilege.                                                            

                                                                                                                                                            -18-	                                                                                                                                                  7158

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


to other Princess locations, due to [his] lack of transportation."  Bradish testified that  


although Burton was scheduled to work at a non-Fountainhead hotel the first few days  


after training, Burton told him that "due to transportation, he [couldn't] reliably commit  


to showing up to those locations on a continuous basis." Bradish testified that he offered  


Burton work at other locations after Bear Lodge turned him away but "it was still the  


same case . . . he had no transportation still."  According to Bradish, this was ultimately  


why Burton was terminated.  


                    Burton conceded at trial that his only dependable means of transportation  


were walking and taking taxis.  His May 28, 2011 email to Bradish, anticipating his  


termination,  reminded Bradish that "[s]ince the first day we talked, you already know  


that it is not . . . practical for me to work at any other location than Bear Lodge except  


on rare occasions." And when the court questioned him persistently on this point during  


trial, Burton said repeatedly that he did not tell Bradish he was open to working at other  


locations because it would be "embarrassing," given his view that Princess would not  


consider him for those other assignments unless he first "cleared up" the issues with  


Fountainhead.             After  considering  this  evidence  the  court  concluded  that  while  


Fountainhead  prevented  Burton  "from having  his ideal job  at Bear  Lodge," it  was  


Burton's own "refusal to work at Princess locations besides Bear Lodge" on anything  


other  than  a  short-term  and  occasional  basis  that  caused  Princess  to  terminate  his  




                    Arguing that this was error, Burton relies in part on Bradish's deposition  


testimony, which Bradish reaffirmed at trial. Bradish testified that when Arnold told him  


why Fountainhead did not want Burton working at Bear Lodge, Bradish trusted Arnold's  


information a "[h]undred percent" and was glad he learned it early in the season; he  


testified that he did not "want to have someone on [the Princess] team that potentially  


would have, you know, had these issues with defacing property or altercations with  

                                                               -19-                                                         7158

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

guests."   According to Burton, this proves that Arnold's defamatory statements were                                                                                                                                                                                                                                   

necessarily   a   "substantial   part"   of   the   causal   chain   leading   to   his   termination   and  

therefore must have been a legal cause of his harm as a matter of law.                                                                                                                                                                                                       

                                                   But Bradish's trial testimony, taken overall, was equivocal.                                                                                                                                                                           He testified   

repeatedly that he felt "caught in the middle" and did not know what really happened,     

which is why he gave Burton a "grace period" to work things out with Fountainhead.                                                                                                                                                                                                                                                            

The superior court noted that Princess did not terminate Burton until 13 days after                                                                                                                                                                                                                                    

Fountainhead's defamatory statements, following Burton's May 28 email "reiterat[ing]                                                                                                                                                                                                     

his inability to work at Princess locations besides Bear Lodge."                                                                                                                                                                                    The court specifically                    

found that "had [Burton] told Bradish that [he] was willing to work at Princess locations                                                                                                                                                                                                               

besides Bear Lodge, Princess would not have terminated [Burton's] employment."                                                                                                                                                                                                                                                   It  

was up to the superior court to resolve apparent inconsistencies in witness testimony                                                                                                                                                                                                               


when making its finding about causation, and we cannot say it clearly erred in doing so.                                                                                                                                                                                                                                                      

                          D.                       The Superior Court Did Not Err In Its Award Of Damages.  


                                                   We have recently reiterated that "[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.' "40                                                                           The superior court found that Burton proved the first three  


elements plus per se actionability, because the allegations that he had an altercation with  


a guest and defaced hotel property  were  "only susceptible to an interpretation that  


injure[d]  [Burton's]  reputation,  particularly  in  light  of  [his]  work  in  the  tourism  


                          39                       Lentine v. State                                           , 282 P.3d 369, 375-76 (Alaska 2012) ("[I]t is the function                                                                                                                                 

of the trial court, not of this court, to judge witnesses' credibility and to weigh conflicting                                                                                                                                                                                                  

evidence." (alteration in original) (quoting                                                                                                                       In re A.F.M.                                      , 15 P.3d at 262)).                          

                          40            , LLCv. Cross , 357 P.3d 805, 820 (Alaska 2015) (quoting  


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


                                                                                                                                                              -20-                                                                                                                                                      7158

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


industry."                                            The court awarded Burton $15,000 in general damages for the defamation                                                                                                                                                                                                                       

per se but decided that he was not entitled to special or punitive damages.                                                                                                                                                                                                                       

                                                            Burton challenges this award on three grounds.                                                                                                                                                                             First, he argues that the                                                                       

court should have included lost wages and benefits in his general                                                                                                                                                                                                                                                          damages award;  

 second, he argues that the court should have awarded special damages because the                                                                                                                                                                                                                                                                                                     

defamation was a substantial factor in causing himspecial harm; and third, he argues that                                                                                                                                                                                                                                                                                            

the superior court should have awarded punitive damages.                                                                                                                                                                                                                 We reject these arguments.                                                

                                                             1.                            General damages   

                                                            The superior court's $15,000 general damages award was intended                                                                                                                                                                                                                                                                  as  

compensation for "the mental anguish and humiliation that [Burton] suffered as a result                                                                                                                                                                                                                                                                                 

of [Fountainhead's] defamatory per se statements to Princess, in addition to the harm                                                                                                                                                                                                                                                                                         

 [Fountainhead's] statements caused to [Burton's] reputation in the Fairbanks tourism                                                                                                                                                                                                                                                                             

industry." Burton argues that this general damages award should also have included the                                                                                                                                                                                                                                                                                                  

value   of   his   lost   wages   and   benefits.     But   general   damages   in   defamation   cases  


compensate only for reputational harm.                                                                                                                                                                                                                                                                                                                                           

                                                                                                                                                                                             In contrast, "[c]oncrete financial losses, such  



as . . . lost wages . . . , are considered special damages." 

                              41                            See Alaska Statebank v. Fairco                                                                                                               , 674 P.2d 288, 295 (Alaska 1983) ("It has                                                                                                                                    

been held that statements injurious to plaintiff's business reputation are defamatory per                                                                                                                                                                                                                                                                                              

 se . . . ." (citing                                                 Cook v. Safeway Stores, Inc.                                                                                                     , 511 P.2d 375, 378 (Or. 1973) (en banc))).                                                                                                                 

                              42                            RESTATEMENT  (SECOND) OF  TORTS    621 cmt. a (A                                                                                                                                                                                       M. L                AW. I   NST . 1977).   

                              43                             Galarneau v. Merrill Lynch, Pierce, Fenner & Smith, Inc.                                                                                                                                                                                                             , 504 F.3d 189,                                 

203 (1st Cir. 2007);                                                                    see also                              RESTATEMENT  (SECOND)  OF  TORTS   621 cmt. a (A                                                                                                                                                                                  M. L               AW.  

    NST . 1977)   (defining   special   harm   as   "the   loss  of   something   having   economic   or  


pecuniary value").   

                                                                                                                                                                                          -21-                                                                                                                                                                                  7158

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

                        As for the amount of general damages, trial courts are permitted "a great                                                 


deal   of   latitude."                                                                                                                      

                                      "Since  proof  of  damages  is  not  required  if  words  are  deemed  




actionable  per  se,  they  clearly  cannot  be  computed  with  mathematical  certainty." 


Burton  argues  that  the  December  2014  letter  to  Princess,  as  a  re-publication  of  


Fountainhead's previous libel, justified "an increase in Burton's general damages as an  


aggravating  factor."                    But the superior  court expressly took the mid-trial letter  into  


account, and its general damages award must therefore reflect any increase the court  


believed was warranted by this evidence.  We see no clear error in the award of general  



                        2.          Special damages  


                        Thesuperiorcourtfound that Fountainhead'sdefamatorystatementsdidnot  


cause Burton special harm because, as explained above, he was terminated because of  


his "refusal to work at alternative Princess locations," not because of the defamation.  


Burton appeals this finding, arguing that the court failed to apply the "substantial factor"  


test of legal causation and that under this test, as properly applied, "Arnold's slanderous  


per se statements about Burton constituted a legal cause of Burton's special harm as a  


matter of law."  


                        The "substantial factor test" generally requires both "but for" causation -  


that the injury would not have occurred "but for" the tortious act - and that the tortious  


act "was so important in bringing about the injury that reasonable individuals would  

                                                                                            46   The determination of proximate  


regard it as a cause and attach responsibility to it." 

            44          Alaska Statebank               , 674 P.2d at 295.         

            45          Id.  (citing  Eslinger v. Henderson                        , 457 P.2d 998, 1000 (N.M. 1969)).                 

            46          Winschel v. Brown, 171 P.3d 142, 148 (Alaska 2007) (citing  Vincent by  



                                                                          -22-                                                                    7158

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

cause usually requires the resolution of questions of fact by the fact-finder; it "becomes                                                       

a matter of law only where reasonable minds cannot differ."                                                       47  

                         To the extent Burton argues that the superior court failed to apply the  


substantial factor test, we disagree.  Although the court did not elaborate on the legal  


standard for causation in its discussion of tortious interference, where it first concluded  


that  Burton  failed  to  prove  causation,  we  see  no  reason  to  believe  that  the  court  


misunderstood the basic legal concepts it employed.  


                         As explained above, the superior court decided in the context of the claim  


for tortious interference that Fountainhead's defamatory statements "did not interfere  


with [Burton's]relationship with Princess"or causeBurton's "termination fromPrincess  


and resulting damages." Indeed, the trial court found that "the evidence overwhelmingly  


shows" that Fountainhead did not terminate Burton's employment upon hearing the  


defamatory statements but only later, and the court plainly credited Bradish's testimony  


"that  he  would  not  refuse  to  hire  a  prospective  employee  based  on  unconfirmed  


accusations" like those at issue here. (Emphasis added.) As noted above, we cannot say  


that these findings of fact are clearly erroneous.  And based on this view of the facts, the  


court did not clearly err in finding no "but for" causation.  


                         Burton also argues that thesuperior court clearly erred when it failed to find  


that  Princess  identified  Burton  as  ineligible  for  rehire  because  of  Fountainhead's  


defamatory  statements.                           The  superior  court  found  it  could  not  make  this  causal  


connection because there was "insufficient evidence . . . as to the source, timing, or  




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

             47          Id.  (citing  P.G. & R.G. v. State, Dep't of Health & Human Servs., Div of                                                             

Family & Youth Servs., 4 P.3d 326, 334 (Alaska 2000); Turnbull v. LaRose, 702 P.2d  


 1331, 1336 (Alaska 1985)).  


                                                                              -23-                                                                        7158

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

impact of such labeling." The                                                                                                                                            one Princess witness who was asked about the ineligibility  

label, a division manager, could not explain it.                                                                                                                                                                                                                           And contrary to Burton's argument, the                                                                                                                                                                              

 defamation was not the only possible explanation for the ineligibility label; it could have                                                                                                                                                                                                                                                                                                                                                                                         

been Fountainhead's privileged decision to exclude Burton from working at its hotel                                                                                                                                                                                                                                                                                                                                                                                               

properties or Burton's unwillingness to work wherever Princess wanted to station him.                                                                                                                                                                                                                                                                                                                                                                                                                              

It was not clear error to find no "but for" causation in this context either.                                                                                                                                                                                                                                                                                                               

                                                                             Given the evidence at trial, reasonable minds could differ as to whether the                                                                                                                                                                                                                                                                                                                                      

 defamatory statements were a substantial factor in bringing about Princess's termination                                                                                                                                                                                                                                                                                                                                                     

 of Burton's employment and its identification of Burton as ineligible for rehire. Because                                                                                                                                                                                                                                                                                                                                                                     

the only special damages Burton sought were those related to his termination and his                                                                                                                                                                                                                                                                                                                                                                                 

ineligibility for rehire, we do not disturb the superior court's finding that Burton "failed                                                                                                                                                                                                                                                                                                                                                                             

to prove that [he] suffered special harm as a result of [Fountainhead's] defamatory                                                                                                                                                                                                                                                                                                                                                         


                                                                             3.                                    Punitive damages   

                                                                             Finally, Burton argues that the superior court erred when it found he was                                                                                                                                                                                                                                                                                                                                   

not entitled to punitive damages.                                                                                                                                                           To recover punitive damages he had to prove by clear                                                                                                                                                                                                                                    

 and convincing evidence "that the defendant's conduct (1) was outrageous, including                                                                                                                                                                                                                                                                                                                                                                     

 acts done with malice or bad motives; or (2) evidenced reckless indifference to the                                                                                                                                                                                                                                                                                                                                                                                                        

                                                                                                                                                             48              Though the superior court "found by a preponderance of  

interest of another person."                                                                                                                                                                                                                                                                                                                                                                                                                                                                        

the evidence that [Fountainhead] was reckless in making defamatory statements about  


                                       48                                    AS   09.17.020(b).   Clear   and   convincing   evidence   is   characterized   as  

 "greater   than   a   preponderance,   but   less   than   proof   beyond   a   reasonable   doubt."   

 Theresa L. v. State, Dep't of Health & Soc. Servs., Office of Children's Servs.                                                                                                                                                                                                                                                                                                                                                                        , 353 P.3d                    

 831, 838 (Alaska 2015) (quoting                                                                                                                                                              Bigley v. Alaska Psychiatric Inst.                                                                                                                                                                 , 208 P.3d 168, 187                                                                      

 (Alaska 2009)).   

                                                                                                                                                                                                                                              -24-                                                                                                                                                                                                                                   7158

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


 [Burton]," it "refuse[d] to find such recklessness by clear and convincing evidence."                                                                                                          


 Burton now contends that "[t]he entire record contains clear and convincing evidence  


that [Fountainhead] management consciously and deliberately disregarded Burton's  


rights," and that the superior court "overlook[ed] additional, uncontradicted evidence"  


that raised Burton's proof to the level of clear and convincing.  


                              But "[i]n a bench trial, the judge . . . determin[es] . . . how to weigh the  

                                                50      In  this  case  the  superior  court  was  required  to  assess  the  


 evidence  presented." 

testimony and credibility of Fountainhead's witnesses, including Arnold's recollection  


 of his conversation with Bradish and Fountainhead's subsequent handling of the issue.  


 The superior court explicitly considered many of the facts Burton claims it failed to  


 consider. The court recognized that "[a]ll of [Fountainhead's] agents . . . have . . . denied  


knowing of any incident" that would suggest the conduct described in the defamatory  


 statements  actually  occurred.                                        The  court  noted  Fountainhead's  failure  to  respond  


 adequately to several of Burton's communications during the time he was attempting to  


 set the record straight. The court observed that Fountainhead "had several opportunities  


to ameliorate the effects of [its] defamatory statements about [Burton] to Princess both  


 in 2011 as well as during trial" but "refused to properly cure their defamatory statements,  


 even when provided an opportunity to do so during trial."  


               49             See   Spenard   Action   Comm.   v.   Lot  3,   Block   1,   Evergreen   Subdivision,  

 902 P.2d 766, 774 n.15 (Alaska 1995) ("Where one has the burden of proving asserted                                                                                         

 facts by a preponderance of the evidence, he must induce a belief in the minds of the                                                                                                 

jurors that the asserted facts are probably true. If clear and convincing proof is required,                                                                               

there must be induced a belief that the truth of the asserted facts is highly probable."                                                                               

 (quoting  Curran v. Mount                                , 657 P.2d 389, 391 n.4 (Alaska 1982))).                               

               50             Wasserman v. Bartholomew, 38 P.3d 1162, 1166-67 (Alaska 2002) (citing  


Alaska R. Civ. P. 52(a)).  


                                                                                           -25-                                                                                    7158

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

                             But the superior court ultimately decided that the evidence of recklessness,                                                          

while   satisfying   the   preponderance-of-the-evidence   burden,   fell   short   of   clear   and  

convincing. We recognize that the question is a close one, but the court's determination                                                                         

                                                                51   The court could have considered the fact that Arnold did  

finds support in the evidence.                                                                                                                                                           

notvolunteer theunfounded examplesofBurton's past conduct but gave themonly when  


Bradish pressed himfor an explanation ofFountainhead'sdecision. Bradish testified that  


Arnold "was being fairly professional about it and said, you know, . . . I can't really go  


into it."  And because Arnold himself testified he had no recollection of making the  


defamatory statements and Bradish's recollection of them was vague and inconsistent,  


the court could have had some reservations about what Arnold actually said or intended.  


With regard to the allegation that Burton had defaced hotel property, Bradish testified  


that what Arnold said could be taken "multiple ways."  Bradish testified, "[I]n the back  


of my  mind, I'm not 100 percent sure" whether Arnold meant damage to physical  


property or damage to "the reputation of the property.  I couldn't tell you."  


                             We appreciate the difficulty the superior court faced in having to draw a  


line between what it believed Burton had proven to be more likely true than not true and  


what remained to be proven by clear and convincing evidence.   We cannot say the court  


clearly erred in drawing the line where it did.  We therefore affirm the court's denial of  


punitive damages.  


V.             CONCLUSION  

                              The judgment of the superior court is AFFIRMED.  


               51            See   Nelson   v.   Progressive   Corp.,   976   P.2d   859,   865   (Alaska   1999)  

(affirming jury's decision not to award punitive damages "even though it found knowing                                                                                      

misrepresentation" in part because the jury could have found knowing misrepresentation                                                                   

by a preponderance but not by clear and convincing evidence).                                                        

                                                                                           -26-                                                                                     7158

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