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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Jeff Graham v Municipality of Anchorage (8/9/2019) sp-7397
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
corrections@akcourts.us.
THE SUPREME COURT OF THE STATE OF ALASKA
JEFF GRAHAM, )
) Supreme Court No. S-16905
Appellant, )
) Superior Court No. 3AN-15-05301 CI
v. )
) O P I N I O N
MUNICIPALITY OF ANCHORAGE, )
)
No. 7397 - August 9, 2019
Appellee. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Eric A. Aarseth, Judge.
Appearances: Jeffrey J. Jarvi, Anchorage, for Appellant.
Samuel C. Severin, Assistant Municipal Attorney, and
Rebecca A. Windt-Pearson, Municipal Attorney, Anchorage,
for Appellee.
Before: Bolger, Chief Justice, Winfree, Stowers, Maassen,
and Carney, Justices.
STOWERS, Justice.
I. INTRODUCTION
Jeff Graham prevailed in a civil suit against the Municipality of Anchorage
for breach of contract and breach of the implied covenant of good faith and fair dealing.
He was awarded partial attorney's fees under Alaska Civil Rule 82(b)(1). Graham
argues that he should have instead been awarded full fees and costs under his union's
collective bargaining agreement with the Municipality. Because the fee recovery
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provision in the agreement is not applicable to Graham's case, we affirm the superior
court's order denying Graham's motion for full attorney's fees and costs.
II. FACTS AND PROCEEDINGS
Jeff Graham is employed as a firefighter/EMT by the Anchorage Fire
Department (AFD). He has worked for AFD since 1995 and has held his current
position since 2003. After taking AFD's engineer promotional exam in 2010, Graham
wrote a letter to the AFD fire chief criticizing the subjective nature of the test. In 2012
Graham failed the interview portion of the engineer exam. He subsequently filed a
complaint with the Alaska State Commission for Human Rights, alleging discrimination
on the basis of his race (Korean) and age (48). He also petitioned his union, the
International Association of Firefighters Local 1264 (the Union), to file a grievance
against the Municipality of Anchorage on his behalf, under the Union's Collective
Bargaining Agreement (CBA) with the Municipality. 1
TheCommissioninvestigated Graham'sdiscrimination claimbut officially
closed his case in September 2013, as the investigation did not find substantial evidence
to support his allegations. Similarly, the Union investigated "the facts and circumstances
surrounding [Graham's] performance on the engineer test," but it declined to file a
grievance against the Municipality to challenge Graham's exam results. In June 2012
the Union's counsel informed Graham: "You have exhausted your contractual remedies
under Article vII of the [CBA]. You are free, at your own cost, to retain counsel and
seek any other remedies to which you believe you may be entitled."
1 ThepurposeoftheCBAis "thepromotionofharmonious relations between
theMunicipality and theUnion, theestablishment ofan equitableand peaceful procedure
for the resolution of differences, the establishment of rates of pay, hours of work, and
other terms and conditions of employment."
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In February 2015 Graham filed suit against the Municipality, alleging
breach of contract, breach of the implied covenant of good faith and fair dealing, and
discrimination, among other legal theories. The case proceeded to trial, and in August
2017 a jury returned a verdict that the Municipality caused harmto Graham"by violating
the express terms of the [CBA]" and "by violating the implied promise of good faith and
fair dealing in the [CBA]." The jury also found that Graham's complaints about how the
2012 engineer exam was structured "were a motivating factor in him failing the oral
board." Graham was awarded $667,000 in damages for lost wages and benefits,
increased income taxes, and past emotional distress.
In October 2017 Graham moved for an award of full attorney's fees of
$258,960.31 and full costs of $38,962.45 under section 7.4.1 of the CBA. Section 7.4.1
provides that "[i]n the event the prevailing party must seek enforcement in court of the
arbitrator's decision, the expenses of such efforts shall be borne by the losing party."
Graham also presented two alternative theories for recovery: enhanced attorney's fees
under Alaska Civil Rule 82(b)(3) or partial attorney's fees under Civil Rule 82(b)(1).
In November 2017 the superior court awarded Graham $71,667 in partial
fees under Civil Rule 82(b)(1) and $15,616.06 in partial costs under Alaska Civil Rule
79(f). The court denied his theory of recovery under section 7.4.1 of the CBA, finding
that a "[p]lain reading of the CBA allows full fees only to enforce an arbitrator's
decision. Implicitly there has already been a fully contested hearing. The full fees would
only be for the enforcement action not the fully contested hearing." (Emphasis in
original.) The court also denied Graham's request for enhanced fees under Rule
82(b)(3).
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Graham appeals the superior court's denial of his full attorney's fees and
costs under section 7.4.1 of the CBA. 2
III. STANDARD OF REvIEW
3
but
"We review awards of attorney's fees for abuse of discretion,"
4
"[i]nterpretation of an attorney's fees clause in a contract is . . . a question of law." We
5
apply "our independent judgment in making such an interpretation."
Iv. DISCUSSION
A. The Superior Court Did Not Err By Denying Graham's Motion For
Full Attorney's Fees And Costs Under Section 7.4.1 Of The CBA.
Graham argues that the superior court's interpretation of section 7.4.1 of
the CBA was "erroneously strict and narrow" and that we should broadly construe
section 7.4.1 to encourage efficient litigation and to "give relief to employees who must
enforce CBA rights in court after [the Municipality] and the [U]nion deny arbitration."
In contrast, the Municipality argues that the plain language of section 7.4.1 "only
provides recovery of attorney's fees to the Municipality or [the Union] in the event that
an arbitration agreement needs to be enforced." Because Graham is not a party to the
2 Graham does not dispute that Civil Rule 82(b)(1) was an appropriate
alternative theory of recovery, nor does he dispute the superior court's calculation of fees
under this rule. He argues solely that the court should have awarded full fees under
section 7.4.1 of the CBA. He no longer argues for enhanced fees as an alternative theory
of recovery.
3 Kollander v. Kollander, 400 P.3d 91, 95 (Alaska 2017) (quoting Roderer
v. Dash, 233 P.3d 1101, 1106 (Alaska 2010)).
4 Johnson v. Olympic Liquidating Tr., 953 P.2d 494, 497 (Alaska 1998).
5 Id. ; see also Larsen v. Municipality of Anchorage, 993 P.2d 428, 431
(Alaska 1999) ("Contract interpretation presents a question of law that we review de
novo.").
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CBA and neither party is seeking to enforce an arbitration agreement, the Municipality
argues that section 7.4.1 is not applicable to this case at all. We agree.
1. Section 7.4.1 of the CBA applies only to enforcement of an
arbitration decision between the Municipality and the Union.
The goal of contract interpretation "is to 'give effect to the reasonable
6
expectations of the parties.' "
We determine "the parties' reasonable intentions by
looking 'to thelanguageofthedisputed provisionand other provisions,relevant extrinsic
7
evidence, and case law interpreting similar provisions.' " Furthermore, "interpretation
of a contract term does not take place in a vacuum, but rather requires consideration of
8
the provision and agreement as a whole."
a. Language of the disputed provision and other provisions
Graham argues that "a contract provision allowing a prevailing party to
recover its reasonable attorney's fees trump[s] Civil Rule 82's provision for partial
9
fees."
The Municipality does not dispute this legal concept but argues that the plain
language of section 7.4.1 is unambiguous and that it is simply inapplicable to Graham's
6 Stepanov v. Homer Elec. Ass'n ., 814 P.2d 731, 734 (Alaska 1991) (quoting
Mitford v. de Lasala , 666 P.2d 1000, 1005 (Alaska 1983)).
7 Flint Hills Res. Alaska, LLC v. Williams Alaska Petroleum, Inc., 377 P.3d
959, 975 (Alaska 2016) (quoting W. Pioneer, Inc. v. Harbor Enters., Inc., 818 P.2d 654,
656 (Alaska 1991)).
8 Id. (quoting Mahan v. Mahan, 347 P.3d 91, 95 (Alaska 2015)); see also
Schaub v. K & L Distribs., Inc., 115 P.3d 555, 563 (Alaska 2005) ("When interpreting
collective bargaining agreements, courts 'will if possible give effect to all parts of the
instrument and an interpretation which gives a reasonable meaning to all its provisions
will be preferred to one which leaves a portion of the writing useless or inexplicable.' "
(quoting 20 SAMUEL WILLISTON & R ICHARD A. L ORD, A T REATISE ON THE LAW OF
CONTRACTS § 55:20 (4th ed. 2001))).
9 Tufco, Inc. v. Pac. Envtl. Corp., 113 P.3d 668, 674 (Alaska 2005).
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----------------------- Page 6-----------------------
case. Whether the language of section 7.4.1 is ambiguous depends on whether "the
disputed terms are reasonably subject to differing interpretation after viewing the
10
contract as a whole and the extrinsic evidence surrounding the disputed terms."
Section 7.4.1 of the CBA provides in full: "In the event the prevailing party
must seek enforcement in court of the arbitrator's decision, the expenses of such efforts
shall be borne by the losing party." As the superior court found, the plain language of
section 7.4.1 indicates that it applies only to recovery of attorney's fees and costs for
enforcement of an arbitration decision. It is undisputed that an arbitrator was never
involved in Graham's case and that an arbitrator's decision was never made. This
provision is therefore inapplicable to Graham's case.
The Municipality argues that the overall structure of Article 7 of the CBA
also supports this conclusion. Article 7 outlines a three-step grievance procedure for a
claim by the Municipality or the Union. The first step is for either party to file a
grievance, which is "defined as a claim by the Union or the Municipality, alleging a
violation of th[e] Agreement." If a grievance has been filed but it cannot be resolved
internally between the Municipality and the Union, then either party may opt to submit
the grievance to an arbitrator. Section 7.4 provides that in such a scenario, the "decision
of the arbitrator shall be final and binding on all parties," and "[t]he losing party shall
11
pay all of the expenses and fees of the arbitrator." Section 7.4.1 is a subsection of 7.4
- it provides additional recovery of fees if "the prevailing party must seek enforcement
10 N. Pac. Processors, Inc. v. City & Borough of Yakutat, Alaska , 113 P.3d
575, 579 (Alaska 2005) (quoting Wessells v. State Dep't of Highways , 562 P.2d 1042,
1046 (Alaska 1977)).
11 See Marathon Oil Co. v. ARCO Alaska, Inc., 972 P.2d 595, 604 (Alaska
1999) (concluding that a provision's location in a contract is relevant to its
interpretation).
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----------------------- Page 7-----------------------
. . . of the arbitrator's decision." Section 7.4.1 is only triggered after a party pursued the
full three-step grievance procedure, an arbitration occurred, the arbitrator issued a
decision, and the losing party did not abide by the arbitrator's decision. None of these
steps occurred in Graham's case.
Interpretation of section 7.4.1 also "requires consideration of
12 As the Municipality points out, Graham is not a party
the . . . agreement as a whole."
to the CBA. The CBA is an agreement between the Union and the Municipality, and it
recognizes the Union "as the sole and exclusive bargaining agent for the purpose of
establishing . . . conditions of employment." Article 7 provides the procedure for the
Union and the Municipality to resolve a grievance between the two parties; it does not
provide a comparable process for an individual employee to pursue a grievance against
13 Although the Union may bring a grievance
the Municipality independent of the Union.
on behalf of an individual employee, that did not occur in this case. The grievance
procedure in Article 7 was therefore never invoked and section 7.4.1 was never
triggered. The overall structure of the CBA and Article 7 make clear that section 7.4.1
was not intended to apply to recovery of fees and costs for litigation brought by an
individual employee.
b. Extrinsic evidence
To interpret a contract, we also consider relevant extrinsic evidence such
as the "language and conduct of the parties, the objects sought to be accomplished[,] and
12 Flint Hills Res. Alaska, LLC , 377 P.3d at 975 (quoting Mahan, 347 P.3d at
95).
13 Section 7.7 does provide an "Employees' Bill of Rights" to ensure that
individual rights of employees are not violated, but it does not provide a process for an
individual employee to pursue a grievance against the Municipality.
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14
the surrounding circumstances at the time the contract was negotiated." If there is no
extrinsic evidence, "our analysis of this issue must rely on the language of the
15
contract."
Graham briefly asserts that the Union "gave him a right-to-sue letter and
authorized him to enforce the rights in the [CBA]." But Graham's characterization of
this letter is not accurate. The Union's June 2012 letter to Graham stated explicitly that
Graham had exhausted his contractual remedies under Article 7 of the CBA and any
further action he took against the Municipality would be independent of the Union and
at his own cost. The Union did not assign him the rights to pursue this claim under the
CBA, as Graham posits.
Accordingly, Graham did not submit extrinsic evidence that supports an
interpretation of section 7.4.1 contrary to its plain meaning. And as discussed above,
section 7.4.1 is unambiguous - it is not "reasonably susceptible to both asserted
16
meanings."
c. Case law interpreting similar provisions
We have not previously been asked to consider a fee-recovery provision in
this exact context. But our case law interpreting grievance procedures in similar
collective bargaining agreements supports our conclusion that section 7.4.1 is not
applicable to Graham's case. Collective bargaining agreements are contracts between
14 Peterson v. Wirum , 625 P.2d 866, 870 n.7 (Alaska 1981) (quoting Pepsi
Cola Bottling Co. v. N.H. Ins. Co. , 407 P.2d 1009, 1013 (Alaska 1965)).
15 Marathon Oil Co., 972 P.2d at 604.
16 Larsen v. Municipality of Anchorage, 993 P.2d 428, 431 (Alaska 1999)
(quoting Johnson v. Schaub, 867 P.2d 812, 818 (Alaska 1994)).
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17
a union and an employer; employees typically do not have the power to pursue the
18
grievance procedures provided in these agreements independent of their union.
Graham has not cited to any cases that would support a different conclusion.
d. Conclusion
We have considered the plain language of section 7.4.1, the overall
structure of Article 7, the CBA as a whole, and case law interpreting similar agreements;
it is clear that section 7.4.1 is not applicable to Graham's case. The superior court did
not err by denying Graham's motion for recovery of full attorney's fees and costs under
the CBA.
2. Section 7.4.1 of the CBA cannot be construed so broadly as
to encompass enforcement of CBA rights in court by individual
employees.
Grahamalso argues that section 7.4.1 should be broadly construed to "give
relief to employees who must enforce CBA rights in court." He asserts that "[the
17 Collective-Bargaining Agreement , B LACK 'S LAW DICTIONARY (10th ed.
2014) ("A contract between an employer and a labor union regulating employment
conditions, wages, benefits, and grievances.").
18 SeeBernard v. Alaska Airlines,Inc., 367 P.3d 1156, 1163-64(Alaska2016)
(concluding that "[t]he [collective bargaining] agreement thus emphasizes repeatedly
that . . . only appeals to arbitration taken by the union . . . are contemplated," and that
"[t]here is nothing in the agreement's plain language that would lead an employee to
believe that the Board was authorized to consider any appeals other than those that were
'properly submitted to it' by the union"); Schaub v. K & L Distribs., Inc., 115 P.3d 555,
561-62 (Alaska 2005) (concluding that collective bargaining agreement "clearly
require[d] union participation in steps two and three [of the grievance procedure]" and
that union had "sole power" under agreement to pursue full grievance procedure); Casey
v. City of Fairbanks, 670 P.2d 1133, 1137, 1139 (Alaska 1983) (finding "nothing on the
face of the [collective bargaining agreement] that requires or even allows an employee
to unilaterally file a written grievance with the Union and the City," and that employee
"cannot simply avail himself of the [collective bargaining agreement's] arbitration
procedure without the Union's involvement").
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Municipality] takes dues out of each paycheck of AFD employees for . . . the efficient
litigation of valid employment grievances in arbitration" and that he was denied access
to the efficient arbitration procedures provided in the CBA. He contends that the
attorney's fees clause in the CBA should therefore be broadly construed to "encourage
[the Municipality] to comply with its legal duties . . . [and] to efficiently arbitrate
employment claims out of court."
Graham particularly focuses on this court's precedent of "constru[ing]
contractual attorney's fees provisions broadly, and in a way that encourages efficient
19 He also argues that Alaska has a " 'strong public policy in favor of
litigation."
arbitration,' [and that] we apply a presumption in favor of arbitrability."20 While these
principles are valid, they are not relevant to his case. Our case law does not support
prioritizingabroadconstructionofcontractual attorney's fees provisions to theexclusion
of all other rules of contract interpretation, such as the plain meaning rule.21 And
Graham was not able to access the efficient arbitration procedures provided in the CBA
because the Union declined to pursue a grievance on his behalf. We are not persuaded
that we should ignore the plain and unambiguous language of the CBA; section 7.4.1
19 O'Connell v. Will , 263 P.3d 41, 46 (Alaska 2011).
20 Ahtna, Inc. v. Ebasco Constructors, Inc. , 894 P.2d 657, 662 (Alaska 1995)
(quoting Univ. of Alaska v. Modern Constr., Inc., 522 P.2d 1132, 1138 (Alaska 1974)).
21 See O'Connell, 263 P.3d at 46-47 (reiterating our previous holdings that
"where the parties intend it, contractual attorney's fees clauses must be construed as
calling for fee shifting at all [court] levels," and concluding that such "contractual
attorney's fees clauses . . . [also] provide for attorney's fees incurred during
post-judgment enforcement proceedings"; but noting that a broad construction was
appropriate because "the plain languageofthecontract[at issue] indicates that the parties
intended to provide for all reasonable attorney's fees").
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cannot be construed so broadly as to encompass the recovery of fees and costs for
litigation brought by an individual employee.
v. CONCLUSION
We AFFIRM the superior court's order denying Graham's motion for full
attorney's fees and costs under section 7.4.1 of the CBA.
-11- 7397
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