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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Daggett v. Feeney (6/16/2017) sp-7179

Daggett v. Feeney (6/16/2017) sp-7179, 397 P3d 297

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

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


           303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email  



                       THE SUPREME COURT OF THE STATE OF ALASKA                                      

JAMES  WILLIAM  DAGGETT  and                                         )  

NADIA  TORA  DAGGETT,                                                )  

                                                                     )     Supreme  Court  Nos.  S-15799/15819  

                                Appellants  and                      )  

                                Cross-Appellees,                     )  


                                                                     )     Superior Court No. 3HO-11-00359 CI  

           v.                                                        )  


                                                                           O P I N I O N  


RICHARD L. FEENEY,                                                   )  


                                                                     )     No. 7179 - June 16, 2017  


                                Appellee and                         )  

                                Cross-Appellant.                     )  




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


                      Judicial District, Homer, Charles T. Huguelet, Judge.  


                     Appearances:               James  William  Daggett  and  Nadia  Tora  


                     Daggett, pro se, Anchorage, Appellants.   Lindsay Wolter,  


                     Homer, for Appellee.  


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


                      and Carney, Justices.  


                      CARNEY, Justice.  



                     A property owner cancelled a contract to install a wind turbine on his  


property and sued the contractor to recover his down payment.  The contractor filed a  


counterclaim for breach of contract.  The superior court concluded that the contractor  


was required to be licensed by the State and had misrepresented its licensing status.  It  

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also concluded that the contractor could not maintain the counterclaim because the                                                                                                                                                                                                                      

contractor was unregistered. The court ordered the contract rescinded and the contractor                                                                                                                                                                                         

to return the down payment less a setoff covering costs incurred in the transaction.                                                                                                                                                                                                                 The  

contractor failed to pay and the court amended the judgment to include the contractor's                                                                                                                                                                                   

individual owners and a successor company. The contractor's individual owners appeal                                                                                                                                                                                                          

the licensing determination and the amended judgment.                                                                                                                                                          The property owner cross-                                                      

appeals   the   setoff   calculation.     We   conclude   that   the   court   erred   only  in  its   setoff  


II.                     FACTS AND PROCEEDINGS                                

                        A.                      Facts  

                                                This  case   involves   a   cancelled   contract   between   Richard   Feeney   and  

Alaskan   Wind   Industries   (AWI),   a   renewable   energy   contractor,   for   the   sale   and  

installation of a wind turbine on Feeney's property in Homer.                                                                                                                                                              AWI was the trade name                                                 

for Daggett LLC, owned by James and Nadia Daggett.                                                                                                                                                         The Daggetts owned several                                                      

 similarly named organizations, as well as Standard Steel, Inc.                                                                                                                                               

                                                Feeney and his wife, Elizabeth Bashaw, began discussing the purchase of                                                                                                                                                                                      

a wind turbine with AWI representatives in the summer of 2009.                                                                                                                                                                             In these discussions  

AWI was often represented by sales representative Erik Schreier and occasionally by                                                                                                                                                                                                                        

Nadia Daggett. The parties dispute whether Schreier told Feeney and Bashaw that AWI                                                                                                                                                                                                                

                                              1  and bonded as a steel erection contractor and whether Schreier promised  

was licensed                                                                                                                                                                                                                                                                       

to make sure neighboring landowners would not oppose the turbine's installation.  But  


the parties agree that they discussed AWI's successful installation of another turbine in  


the same area without opposition from neighboring landowners.  


                        1                       Theparties and thesuperior courtfrequentlyusedtheterm"license"to refer  


to registration under AS 08.18.011-.061.  


                                                                                                                                                      -2-                                                                                                                                                         7179  

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                    The parties ultimately signed a contract in October 2010, with Schreier  


signing on behalf of AWI.  The contract was on AWI letterhead and did not mention  


Daggett LLC.  It required AWI to provide and install a wind turbine, a 49-foot tower,  


and an inverter.  The contract expressly affirmed that AWI was "qualified by law as a  


licensed steel erector in the state of Alaska" and allocated to Feeney the responsibility  


for "meet[ing] all builders['] permit requirements, variances, [and] height restriction  




                    Bashaw paid the 60% down payment of $32,880 immediately after the  


contract  was  signed.             AWI  then  ordered  the  wind  turbine  from  a  California-based  


supplier and had it shipped to Alaska.  AWI began digging the turbine's foundation in  


November 2010.   The work was soon stopped by Bashaw because a neighbor was  


concerned that the 49-foot turbine would violate a subdivision land-use covenant. AWI  


agreed that Feeney and Bashaw could take a few months to resolve the conflict with their  




                    In late November the neighbor formally notified Feeney and Bashaw of a  


land-use covenant that prohibited structures over 35 feet tall in the subdivision and  


threatened legal action if the project moved forward.   In December Bashaw emailed  


Nadia Daggett saying, "We need to get this contract cancelled as soon as possible,  


especially since it is illegal and you were aware that was so when it was signed." Despite  


discussions during the first half of 2011 to try to reach a mutually agreeable solution  


regarding  contract  cancellation  and  refund,  the  parties  were  unable  to  reach  an  



          B.        Proceedings  


                    Feeney filed suit in early December 2011, naming AWI, James Daggett,  


and Nadia Daggett as the defendants.  Feeney alleged that AWI and its representatives  


had "assured" him that they were familiar with the subdivision covenants, that the wind  

                                                               -3-                                                        7179

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

turbine would not violate them, and that AWI would check with Feeney's neighbors to                                                                                                                                                                                                                                    

make sure they did not object to the turbine.                                                                                                                                Feeney asked the court to rescind the                                                                  

contract and order the return of his down payment, "less any offset which the court                                                                                                                                                                                                                       

deems appropriate"; he also requested an accounting to determine the offset amount.                                                                                                                                                                                                                                       

                                                 AWI's answer admitted that it had entered into a contract with Feeney and                                                                                                                                                                                       

asserted wrongful rejection of the turbine delivery as an affirmative defense.                                                                                                                                                                                                           AWI also   

filed   a   counterclaim,   alleging   that   Feeney   had  materially   breached   the   contract   by  

refusing to accept full performance and pay the full price for the turbine.                                                                                                                                                                                                         James and   

Nadia Daggett filed separate answers raising affirmative defenses that they were not                                                                                                                                                                                                                              

party to the contract between Feeney and AWI and were not liable to Feeney under                                                                                                                                                                                                                        


AS 10.50.265, which limits LLC members' liability to third parties.                                                                                                                                                                                           

                                                 Feeney replied to AWI's counterclaim and amended his complaint seeking  


to pierce the corporate veil and reach the Daggetts personally because of some confusion  


                                                                                                                                                                        3   Feeney expanded his claim for contract  

about the Daggetts' various corporate entities.                                                                                                                                                                                                                                                  


rescission, alleging that rescission was justified because "AWI was not registered as a  


general or specialty contractor with the State of Alaska" when it entered the contract, as  


required by state law.  Having discovered that AWI was no longer a registered business  


and that the Daggetts had set up a new entity under the name Standard Steel, Inc., Feeney  


also sought to add Standard Steel as a defendant.  


                         2                       AS 10.50.265 provides that "[a] person who is a member of a limited                                                                                                                                                                               

liability company or a foreign limited liability company is not liable, solely by reason of                                                                                                                                                                                                                            

being a member, under a judgment, decree, or order of a court, or in another manner, for                                                                                                                                                                                                                            

a liability of the company to a third party."                                                                                       

                         3                       Because the superior court ultimately concluded that the correct entity was  


Daggett LLC d/b/a Alaskan Wind Industries, we use that name throughout.  


                                                                                                                                                          -4-                                                                                                                                                7179

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                                      A two-day bench trial took place in Homer in November 2012.                                                                                                                           Feeney  

testified that he had specifically asked Schreier whether AWI was a licensed and bonded                                                                                                                                       

contractor   and   that   Schreier   had   affirmed   AWI   was   licensed   and   bonded.     Feeney  

explained that this information was important to him in deciding to purchase the wind   

turbine.  Schreier testified that Feeney had never asked about AWI's licensing status.                                                                                                                                                               

                                     Nadia   Daggett   testified   that  she   and   James   had   believed   wind   energy  

installers were not required to be licensed as construction contractors at the time of the                                                                                                                                                

contract with Feeney.                                         She stated that "[i]t was industry standard" not to carry a license                                                                                            

at the time and claimed that none of AWI's competitors had done so. Nadia also testified                                                                                                                                    

that she had contacted the State and had been told there was no North American Industry                                                                                                                                    

                                                                                           4   code  for  renewable  energy  installers.                                                                          She  further  

Classification   System (NAICS)                                                                                                                                                                                               

testified that in late 2010 a state licensing inspector had told them that renewable energy  


contractors would be required to be licensed beginning in 2011.  


                                     The superior court issued a written opinion in favor of Feeney in July 2013.  


The   court   decided   that   Feeney   was   entitled   to   rescission   on   the   ground   of  


misrepresentation5 because AWI had misrepresented its licensing status, noting that "the  


                   4                 AS   43.70.020(a)(2)   requires   business   licenses   to   include   the   lines   of  

business to be conducted, and the State uses some NAICS codes to determine lines of                                                                                                                                                         

business   for   this   purpose.     What   is   "Line   of   Business"   or   "LOB"?   and   "What   is  

 "NAICS"?, in                           Line of Business/Alaska NAICS Code                                                                      , D     EP 'T OF             COMMERCE, C                             MTY.,  AND  

E C O N .                     DE V .,                    DI V .                 O F             C O R P S .,                       BU S .                  &            PR O F 'L                        L I C E N S I N G ,  



(last visited Apr. 7, 2017).  

                   5                 See Foster v. Cross                                  , 650 P.2d 406, 409 (Alaska 1982) (holding that, to void                                                                                    


a contract, a party must show that the other party "made a false representation of material  

fact which was actually and justifiably relied upon" (first citing                                                                                                                  Cousineau v. Walker                                         ,  


613 P.2d 608, 612 (Alaska 1980); then citing Halpert v. Rosenthal, 267 A.2d 730, 733  

                                                                        ESTATEMENT   (SECOND)   OF   CONTRACTS   164(1) (A                                                                                                 M. L        AW  

(1970); and then citing R 


                                                                                                                     -5-                                                                                                            7179

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

 [c]ontract itself expressly establishe[d] that '[AWI was] qualified by law as a licensed                                                                              

 steel erector in the State of Alaska.' "                                        The court concluded that wind energy installers                                     

were required to be licensed as steel erection contractors because tower-mounted wind                                                                                         

                                                                                                                                          6  adopted pursuant to  

turbines qualify as "steel towers and pylons" under regulations                                                                                                                     

AS 08.18.0137  and AS                                              And the court found that AWI had been "neither  


 licensed nor bonded as a 'steel erection contractor' " when the contract was executed.  


                             The superior court noted that there was "evidence to suggest" that AWI had  


known it needed to be licensed because it had previously held a specialty contractor  


 license which expired in 2009, before execution of the contract. The court found AWI's  


representation of its licensing status to be a misrepresentation of a material fact, and it  


pointed to Feeney's testimony that he would not have entered into the contract without  


 it.  The court therefore concluded that Feeney was entitled to rescission of the contract  


based on AWI's misrepresentation of its non-licensed status because he " 'actually and  


                                                                                                                                                           9      The  court  

justifiably  relied  upon'  a  'false  representation  of  a  material  fact.'  "                                                                                           


 accordingly ruled that Feeney was entitled to reimbursement of his down payment.  


                             But the superior court noted that Feeney's position on the issue of licensing  


 appeared "pretextual."  It believed Feeney had "unilaterally cancelled" the contract to  


               5             (...continued)  

 INST . 1981))).   

               6             See   12 Alaska Administrative Code (AAC) 21.510(a)(3) (2012).                                                            

               7             AS   08.18.013   authorizes   regulations   that   categorize   and   require   the  

registration of contractors.     

               8             AS 08.18.024 describes specialty contractors.  


               9             See Foster, 650 P.2d at 409 (citing Cousineau, 613 P.2d at 612; Halpert,  


 267 A.2d at 733; RESTATEMENT  (SECOND) OF  CONTRACTS    164(1)).                                                                                   


                                                                                         -6-                                                                                 7179

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avoid the threatened suit from his neighbor and doubted he would have objected to                                                                                                                                                                                                                                                                                                                              

AWI's non-licensed status without that threat.                                                                                                                                                                                   The court suggested it would take this                                                                                                                                  

into account as an equitable consideration in determining AWI's recovery amount.                                                                                                                                                                                                                                                                                                                             

                                                                The   superior   court   also   addressed   AWI's   counterclaim   for   breach   of  

contract.    Although it was "inclined to entertain the merits" of AWI's counterclaim                                                                                                                                                                                                                                                                      

because Feeney's termination of the contract was "suspect," the court concluded that the                                                                                                                                                                                                                                                                                                                    

counterclaim was barred by AS 08.18.151, which provides that a contractor "may not                                                                                                                                                                                                                                                                                                                        

bring an action . . . for breach of a contract for which registration is required" unless the                                                                                                                                                                                                                                                                                                               

contractor can show it "was a registered contractor . . . at the time of contracting."                                                                                                                                                                                                                                                                                                                                       

Having already decided AWI was required to be licensed as a steel erection contractor                                                                                                                                                                                                                                                                                     

and was not licensed at the time of the contract, the superior court concluded AWI was                                                                                                                                                                                                                                                                                                                  

barred from bringing the counterclaim.                                                                                                                                                     The court rejected the Daggetts' argument that                                                                                                                                                               

AWI was exemptfromAS08.18.151 under the"finishedproducts"exemptionexpressed                                                                                                                                                                                                                                                                                                 

in AS 08.18.161(5), because the wind turbine "bec[a]me a permanent, fixed part of a                                                                                                                                                                                                                                                                                                                                 

 structure" and was not a finished product as contemplated in the exemption.                                                                                                                                                                                                                                                                                                

                                                               Nonethelessthesuperiorcourtexplainedthat                                                                                                                                                                         even an unlicensed contractor                                                              

may recover "any sums which may be equitably due [it]" through a setoff against the                                                                                                                                                                                                                                                                                                                        

damages to be paid. It relied on                                                                                                                   Sumner Development Corp. v. Shivers                                                                                                                                                 , in which we held                                             

that a setoff against the plaintiff's recovery is appropriate if a contract has been partially                                                                                                                                                                                                                                                                                     

performed and the plaintiff would receive a windfall from retaining the benefit of the                                                                                                                                                                                                                                                                                                                     

                                                                                                                                                                                                                                                                                                                                        10            Here the court  

partially performed work in addition to receiving contract damages.                                                                                                                                                                                                                                                                                                                              

allowed a setoff because Feeney was "not without unclean hands" and "AWI suffered  


 substantial financial loss as a result of" Feeney's cancelling the contract.  




                                                                517 P.2d 757, 765-66 (Alaska 1974) (quoting S & Q Constr. Co. v. Palma  


 Ceia Dev. Org., 3 Cal. Rptr. 690, 692 (Cal. Dist. Ct. App. 1960)).  

                                                                                                                                                                                                       -7-                                                                                                                                                                                          7179  

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                    The superior court determined that AWI was entitled to a setoff for any  


resale  costs,  out-of-pocket  costs,  and  incidental  costs  it  had  incurred  in  partially  


performing the contract.  It did not award a setoff for resale costs because it calculated  


that AWI had not lost money on resale but instead made a small profit.   The court  


awarded out-of-pocket expenses that were incurred following execution of the contract,  


which  included  commissions,  the  cost  of  shipping  the  turbine  to  Alaska,  and  the  


materials, equipment, and labor used to begin creating the foundation.  The court also  


awarded certain incidental expenses mainly related to moving the turbine to its new  


purchaser.  The total setoff was $9,609.06.  


                    The superior court expressly withheld judgment on the question whether  


Feeney could seek recovery of his down payment from anyone other than AWI. But the  


court concluded that if Feeney was not able to recover his reimbursement from AWI, it  


would "consider whether Defendants James and Nadia Daggett, or any entity registered  


to them or otherwise owned by them, should be held liable."  


                    In December 2013 the superior court issued a final judgment awarding  


Feeney$23,270.94 indamages (theamount ofthedown payment minus AWI's equitable  


setoff), plus pre- and post-judgment interest, attorney's fees, and court costs, for a total  


of $36,010.15.  The court authorized Feeney to seek to amend the judgment to permit  


recovery from the other defendants if AWI failed to satisfy the judgment within 90 days,  


suspending the ordinary timeline established by Alaska Civil Rule 59(f) and allowing  


Feeney to file within 120 days of the entry of judgment.  


                    When AWI did not satisfy the judgment within 90 days, Feeney filed a  


motion  to  amend  the  final  judgment,  naming  James  Daggett,  Nadia  Daggett,  and  


Standard Steel as additional defendants.  The Daggetts objected to both their individual  


liability and that of Standard Steel.  They also opposed the superior court's decision to  


allow Feeney to move to amend after the Civil Rule 59(f) time limit had expired.  

                                                               -8-                                                         7179

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                                             The superior court issued an amended final judgment in December 2014.                                                                                                                                                                                   

The court found that the "primary contractor entity" Feeney had contracted with was                                                                                                                                                                                                 

Daggett LLC d/b/a AWI, but that Feeney had not had notice that Daggett LLC was the                                                                                                                                                                                                      

principal because the contract named only AWI and "did not disclose the existence of"                                                                                                                                                                                                  

Daggett LLC.                                     And the court explained that because the contract only used the AWI                                                                                                                                                            

trade name, Feeney was not given notice that he was contracting with a limited-liability                                                                                                                                                   

entity.   The court therefore concluded that James and Nadia Daggett were personally                                                                                                                                                                          

liable to Feeney as agents of an undisclosed principal on the contract, with Erik Schreier                                                                                                                                                                            


acting as their subagent.                                                               

                                             The superior court also concluded that Standard Steel was liable to Feeney  


as  AWI's  successor  under  the  "mere  continuation"  and  "continuity  of  enterprise"  



exceptions to the general rule that a corporation is not liable for its predecessor's acts.                                                                                                                                                                                                          


The court found that Standard Steel was "simply a change in name and corporate form"  


from Daggett LLC, noting that Standard Steel continued the LLC's renewable energy  


and wind turbine installation  business at the same address and  website; that "[t]he  


Daggetts remained the sole stockholders and officers of the new entity"; and that the new  


entity  did  business  as  "Alaska's  Wind  Industries,"  a  "negligible  change"  from  its  


previous name. The court thus concluded that Standard Steel was liable to Feeney as the  


successor to AWI.  


                       11                    See Jensen v. Alaska Valuation Serv., Inc.                                                                                                        , 688 P.2d 161, 163 (Alaska                                             

 1984)   ("An   agent   who  makes  a   contract   for   an   undisclosed   or   partially   disclosed  

principal will be liable as a party to the contract." (citing R                                                                                                                                         ESTATEMENT   (SECOND)  OF  

AGENCY,  321, 322 (A                                                               M. L          AW  INST . 1958))).   

                       12                    Savage Arms, Inc. v. W. Auto Supply Co.                                                                                               , 18 P.3d 49, 55-56 (Alaska 2001)                                                           

(explaining doctrine of successor liability).                                                                    

                                                                                                                                             -9-                                                                                                                                  7179

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                                James and NadiaDaggett                                      representthemselvesin                                  thisappealofthesuperior                  

court's initial decision issued in July 2013, the final judgment issued in December 2013,                                                                                                         

and the amended final judgment issued in December 2014.                                                                                                 They contest                       multiple  

elements of these rulings.                                        Feeney cross-appeals the court's determination of AWI's                                                                     

setoff amount.                       

III.            STANDARD OF REVIEW                           

                                "Interpretation of a statute is a question of law to which we apply our                                                                                               

independent judgment; we interpret the statute according to reason, practicality, and                                                                                                                 

common sense, considering the meaning of the statute's language, its legislative history,                                                                                                    


and its purpose."                                                                                                                                                                             

                                             For mixed questions of law and fact, including applications of agency  

           14                                                                                                                                                                                              15  



law,            we review legal questions de novo and review factual findings for clear error. 


"A fact finding is not clearly erroneous unless the reviewing court has a definite and firm  



conviction that a mistake has been made." 

                                "We review the grant of an equitable remedy . . . for abuse of discretion,  


but we review de novo any underlying questions of law and the application of law to  




                13              Adamson v. Municipality of Anchorage                                                             , 333 P.3d 5, 11 (Alaska 2014)                                 

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

                14              See Foster v. Cross, 650 P.2d 406, 408 (Alaska 1982).  


                15              Diblik v. Marcy, 166 P.3d 23, 25 (Alaska 2007) (first citing Forshee v.  


Forshee, 145 P.3d 492, 497 (Alaska 2006); then citing Keturi v. Keturi, 84 P.3d 408, 412  


(Alaska 2004)).  


                16              Id. at 25-26 (citing Keturi, 84 P.3d at 412).  


                17              In re Estate of Fields, 219 P.3d 995, 1002 (Alaska 2009), as modified on  


denial of reh'g (Dec. 16, 2009) (citing Riddell v. Edwards, 76 P.3d 847, 852 (Alaska  



                                                                                                   -10-                                                                                            7179

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

                           Whether a party has standing to assert a given claim is a question of law                                                                 

that we review de novo.                         18  

IV.	         DISCUSSION  


             A.	           The  Superior  Court  Did  Not  Err  In  Concluding  That  AWI  Was  


                           Required To Be Registered As A Specialty Contractor.  


                           TheDaggetts arguethat thesuperior courtwas wrongto concludeAWI was  


required to be registered as a specialty steel erection contractor, asserting that AWI was  


exempted by an express exception covering contractors who install "finished products."  


Feeney counters that wind turbine installation does not fall under the finished products  


exemption.  We conclude that the superior court correctly interpreted the statute and  


              17           (...continued)  


              18          Keller v. French                 , 205 P.3d 299, 302 (Alaska 2009) (citing                                        St. Paul Church,     

Inc. v. Bd. of Trs. of the Alaska Missionary Conference of the United Methodist Church,                                                                      

Inc., 145 P.3d 541, 549-50 (Alaska 2006)).                              

              19           In their statement of points on appeal, the Daggetts also challenge the  


superior court's finding that AWI misrepresented its licensing status and the court's  


subsequent conclusion that this misrepresentation was grounds for rescission.  But they  


do not explicitly contest these issues in their appellate briefing.  In general, "issues not  


briefed or only cursorily briefed are considered waived."  Shearer v. Mundt, 36 P.3d  


 1196, 1199 (Alaska 2001) (citing Adamson v. Univ. of Alaska , 819 P.2d 886, 889 n.3  


(Alaska  1991)).                      Because  self-represented  litigants  are  held  to  a  less  demanding  


procedural standard, we will consider a self-represented litigant's argument if his or her  


"briefing was such that [the court] could discern [the party's] legal arguments and [the  


opposing party] could reply to them." Mitchell v. Mitchell, 370 P.3d 1070, 1083 (Alaska  


2016) (alterations in original) (quoting Peterson v. Ek, 93 P.3d 458, 464 n.9 (Alaska  


2004)). Feeney's brief does not discuss the issues. Even under the more lenient standard  


for self-represented litigants, the Daggetts have waived this issue on appeal.  


                                                                                  -11-	                                                                           7179

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                                          1.                   The statute requires registration.                                    

                                          Alaska Statute 08.18.171(4) defines a contractor as "a person who, in the                                                                                                                                                    

pursuit of an independent business, undertakes or offers to perform . . . or submits a bid                                                                                                                                                                          

for a project to construct, alter, repair, move, or demolish a building . . . or any type of                                                                                                                                                                              

fixed structure, including excavation and site development and erection of scaffolding."                                                                                                                                                                                           

It further provides that " 'contractor' includes a general contractor, builder, mechanical                                                                                                                                                   

contractor, specialty contractor, and subcontractor."                                                                                                                Alaska Statute 08.18.011 requires                                                 

all contractors to be registered with the Alaska Department of Commerce, Community,                                                                                                                                                      


and   Economic   Development.                                                                                                                                                                                                                                        

                                                                                                           Alaska  Statutes  08.18.013  and  .024  authorize  the  


Department to register and issue licenses to contractors and specialty contractors.  The  

                                                                                                                                                                                                                                                                  21   A  



Department has adopted regulations defining 37 categories of specialty contractor. 

contractor who installs steel towers or pylons is considered a steel erection contractor.22  



The superior court concluded that the 49-foot tower for the wind turbine qualifies as a  


steel tower or pylon under this statutory framework and that AWI was therefore required  


to be registered as a steel erection contractor.  


                                          The Daggetts do not contest that the wind turbine tower falls within this  


category or that an installer of steel towers generally is required to register as a steel  


erection contractor.  Instead they argue that AWI was exempt from registration under  

                     20                   "A person may not submit a bid or work as a contractor until that person                                        

has   been   issued   a   certificate   of   registration   as   a   contractor   by   the   department."  

AS   08.18.011(a).     "Department"   is   defined   as   "the   Department   of   Commerce,  

Community,   and   Economic   Development,   unless   the   context   indicates   otherwise."   

AS 08.18.171(5).                                         

                     21                   See  12 AAC 21.200 (2010).  


                     22                    12  AAC  21.510.                                               See  12  AAC  21.200  (31)  (listing  "Steel  Erection  


Contractor" as a type of specialty contractor).  


                                                                                                                                  -12-                                                                                                                           7179

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

AS08.18.161(5),which                                        provides that thechapter governing                                                    contractor registration"does                            

not apply to . . . the sale or installation of finished products, materials, or articles of                                                                                                                       

merchandise that are not actually fabricated into and do not become a permanent, fixed                                                                                                                     

part of a structure."                            The Daggetts argue that the wind turbine kit was a finished product                                                                                 

and   AWI   "would   simply   have   been   putting   the   pieces   together   and   installing   [the  

turbine] on Feeney's property."                                                  

                                 We have discussed this exemption only once before, in                                                                                      Industrial Power  

                                                                                                            23  Western Modular supplied pre-fabricated  

&Lighting Corp. v. Western Modular Corp.                                                                                                                                             

homes that Industrial Power assembled on-site.24   We decided that AS 08.18.161(5) did  


not apply to Western Modular because the section was "aimed at a supplier who actually  


installs  his  [or  her]  products,"  whereas  "Western  Modular  had  no  installation  


                                                                                                                                                                                     25     Instead we  

responsibilities" because the homes were installed by Industrial Power.                                                                                                                                         


concluded that Western Modular was exempt under a different section of AS 08.18.161  


that covered suppliers who "only furnished materials" without installing them.26  


                                 The Daggetts read Industrial Power to support their contention that AWI's  


wind turbine installation falls under the finished products exemption. But the Daggetts'  


focus on this language is misplaced.   In Industrial Power  we inquired whether the  


supplier installed the product in order to distinguish between two exemptions with  


otherwise similar language.27                                                  We did not suggest that  any  supplier who installed a  


                 23              623 P.2d 291, 294-95 (Alaska 1981).                                          

                 24              Id.  at 292-93.                     

                 25              Id.  at 295.   

                 26              Id.  at 294;               see  AS 08.18.161(7).   

                 27              Indus. Power                      , 623 P.2d at 295.                           

                                                                                                       -13-                                                                                                7179

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product would be exempt under AS 08.18.161(5); to do so would let the exception                                                                                                             

swallow the rule.               

                                 Instead, asFeeneysuggests,                                          wemustevaluatetheprovision'sfull                                                        language,  

which exempts "the sale or installation of finished products . . . that are not actually                                                                                                         

                                                                                                                                                                                        28     Thus the  

fabricated into and do not become a permanent, fixed part of a structure."                                                                                                                                   

question is not only whether the turbine was to be installed but whether a turbine kit is  


a "finished product[]" that "become[s] a permanent, fixed part of a structure."   This  


language and related elements of the statutory structure indicate that a turbine becomes  


a permanent, fixed structure within the meaning of this provision.  


                                 Alaska Statute 08.18.171(4) defines "contractor" to include someone who  


constructs or alters "any type of fixed structure, including . . . erection of scaffolding."  


A wind turbine affixed to a 49-foot tower is clearly a fixed structure in the plain sense  


of the phrase, and towers have been recognized as "structures" in other statutory contexts  


                                                     29    Moreover, when scaffolding, which is inherently temporary, is  

such as zoning codes.                                                                                                                                                                                            


considered a fixed structure under AS 08.18.171(4), a more permanent structure such as  


a wind turbine must also be considered a fixed structure.  As a fixed structure, the pole  


and turbine would not fall under AS 08.18.161(5)'s exemption for finished products that  


are not part of a fixed structure when installed.  


                                 TheDaggettspoint outthat theturbinesystemis "afree[-]standing,finished  


product that [is] not 'fabricated' into another structure," perhaps implying that a fixed  


structure product like a wind turbine is exempt because it is not made part of  another  


                28               AS 08.18.161(5).   

                29               See Pruitt v. City of Seward                                         , 152 P.3d 1130, 1133 (Alaska 2007) (citing                                                   

Seward City Code  15.10.140, which defines "structure" as "[a]nything constructed or                                                                                                                           

erected on the ground or attached to something having location on the ground, including,  


but not limited to, buildings, towers, and sheds," but excluding short walls).                                                                                             

                                                                                                     -14-                                                                                               7179

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


structure.                                But this interpretation is unsustainable.                                                                                                                The provision must be read as                                                                                

exempting the installation of finished products that do not become a permanent, fixed                                                                                                                                                                                                                 

part of a structure                                               or  do not become permanent, fixed structures themselves.                                                                                                                                                                Feeney  

notes that the construction of an entire house would be exempted from all contractor                                                                                                                                                                                               

regulations under the Daggetts' interpretation because the house does not become part                                                                                                                                                                                                                      

of another fixed structure.                                                                      Such a result would be nonsensical and would undermine                                                                                                                          

much of the chapter governing contractors, which was clearly intended to apply to the                                                                                                                                                                                                                         

construction of new houses and other structures in addition to modification of existing                                                                                                                                                                                                     

                                      31   Alaska Statute 08.18.161(5)'s finished products exemption does not apply  


to the Daggetts because we have already determined that the turbine becomes a fixed  




                                                 Our decision in Industrial Power confirmsthisinterpretation ofthefinished  


products exemption. There we held that Industrial Power, the contractor that assembled  



and installed the prefabricated houses on-site, was required to register as a contractor.                                                                                                                                                                                                                                    


The wind turbine kit that would have been assembled and installed by AWI to become  


                        30                      At oral argument James Daggett argued that among steel professionals,                                                                                                                                                 

"fabricate" has a specialized meaning:                                                                                                          "to construct from raw materials" by cutting,                                                                                                

welding, and drilling them to build a structure. He considered AWI's work to be simple                                                                                                                                                                                                           

"assembly," using                                                    hand   tools,   of components fabricated                                                                                                        by   the   manufacturer.     But  

AS 08.18.161(5) applies to all kinds of finished products, so a specialized meaning, even                                                                                                                                                                                                               






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