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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Alvin Kennedy and Eliezer Feliciano v. The Anchorage Police & Fire Retirement System (5/7/2021) sp-7528
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
ALVIN KENNEDY and ELIEZER )
FELICIANO, ) Supreme Court Nos. S-17553/17684
) (Consolidated)
Appellants, )
) Superior Court No. 3AN-18-05165 CI
v. )
) O P I N I O N
THE ANCHORAGE POLICE & FIRE )
RETIREMENT SYSTEM; THE )
No. 7528 - May 7, 2021
BOARD OF TRUSTEES, )
ANCHORAGE POLICE & FIRE )
RETIREMENT SYSTEM, in its )
official capacity; and EDWARD )
JARVIS, as director of the Anchorage )
Police & Fire Retirement System, in an )
official capacity, )
)
Appellees. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Andrew Guidi, Judge.
Appearances: Michael W. Flanigan, Flanigan & Bataille,
Anchorage, for Appellants. Matthew Singer and Lee C.
Baxter, Holland & Knight LLP, Anchorage, and Robert D.
Klausner, Klausner, Kaufman, Jensen & Levinson,
Plantation, Florida, for Appellees.
Before: Bolger, Chief Justice, Winfree, Maassen, Carney,
and Borghesan, Justices.
----------------------- Page 2-----------------------
CARNEY, Justice.
I. INTRODUCTION
Two police officers retired from the Anchorage Police Department (APD)
due to discrimination and retaliation. Years later, a jury found that they had been
constructively discharged and awarded them lost past wages and benefits. The officers
requested that the Anchorage Police and Fire Retirement System(APFRS) increase their
retirement benefits based on the award of lost wages. When the APFRS Board denied
their request, they appealed to the superior court. The superior court affirmed the
Board's decision and awarded it attorney's fees.
The officers appeal the court's decision denying them an increase in
retirement benefits, arguing that the Anchorage Municipal Code requires a recalculation
of benefits. They also appeal the attorney's fee award as unreasonably high. Because
the Anchorage Municipal Code does not permit the requested increase in retirement
benefits, we affirmthe superior court's order denying the officers' administrative appeal.
Because the superior court did not abuse its discretion when it awarded fees, we also
affirm the attorney's fee award.
II. FACTS AND PROCEEDINGS
A. Facts And Administrative Case
Alvin Kennedy and Eliezer Feliciano are retired members of APD. In
2009, while still in active service, both Kennedy and Feliciano filed discrimination
complaints with the Municipality of Anchorage. A year later they filed complaints in the
superior court. In 2011 Kennedy and Feliciano both resigned and began withdrawing
retirement pay from APFRS.
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----------------------- Page 3-----------------------
In March 2017, after lengthy proceedings including aninterlocutory appeal
1
to this court,
a jury found that the Municipality had constructively discharged Kennedy
2
The jury awarded past
and Feliciano by making their working conditions intolerable.
lost wages and benefits in the amount of $380,000 to Kennedy and $358,000 to
Feliciano.3 The jury also awarded each of them $70,304 in future lost wages and
4
benefits. Kennedy and Feliciano argue that these damages awards represent 6.29 years'
worth of compensation for Kennedy and 6.17 years' worth of compensation for
Feliciano.
The APFRS plan is a defined-benefit plan described in Anchorage
Municipal Code (AMC) Chapter 3.85. APFRS has three types of plans; Kennedy and
Feliciano are both Plan III members. As Plan III members, their retirement benefits are
calculated "at the rate of two and one-half percent of final average compensation
multiplied by the number of years of credited service."5 Thus, the relevant factors in
determining amember's retirement benefits are(1) years of credited service, and (2) final
average compensation.
1
Kennedy v. Municipality of Anchorage , 305 P.3d 1284 (Alaska 2013).
2 An employee is constructively discharged when "an employer makes
working conditions so intolerable that the employee is forced into an involuntary
resignation." Charles v. Interior Reg'l Hous. Auth., 55 P.3d 57, 60 (Alaska 2002)
(quoting Cameron v. Beard, 864 P.2d 538, 547 (Alaska 1993)).
3 "Past lost wages and benefits" refers to lost wages and benefits before
January 30, 2017, the first day of the jury trial. "Future lost wages and benefits" refers
to lost wages and benefits after January 30, 2017.
4 The jury also awarded each plaintiff non-economic damages, which are not
at issue here.
5 AMC 03.85.070(A).
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----------------------- Page 4-----------------------
Following the jury award, Kennedy and Feliciano wrote to Edward Jarvis,
6
the director of APFRS,
seeking an "enhancement to [their] retirement benefits based on
the jury's award and the court order." They argued that the Board was required under
7
AMC03.85.050(B) to recalculatetheir retirement benefits based on the damages award.
Jarvis wrote back, denying their request and informing them of their right to appeal his
decision to the full Board. Jarvis stated that they were not eligible for recalculation
because they were prohibited from receiving retirement benefits and service credits at
the same time. He also pointed out that the verdict did not distinguish between lost
wages and benefits, making the determination of service credits based on lost wages
impossible.
After several months of correspondence between them failed to change
either party's position, Kennedy and Feliciano appealed to the full APFRS Board. The
Board denied the appeal, finding that granting their request to recalculate "would result
in [Kennedy and Feliciano] receiving both a pension payment and a salary payment" at
the same time in violation of both AMC Chapter 3.85 and the Internal Revenue Code.
The Board offered Kennedy and Feliciano the opportunity to correct the problem by "a
suspension of future benefits equal to the amount of retirement benefits received" but
noted that Kennedy and Feliciano seemed uninterested in such a settlement. The Board
stated that it "is the final authority . . . of all matters arising under AMC Chapter 3.85"
6 The appellees in this case are APFRS; the Board of APFRS; and Edward
Jarvis, as director of APFRS; we refer to them collectively as the Board.
7 It is not clear from the initial letter whether Kennedy and Feliciano sought
a recalculation of their years of credited service, their final average compensation, or
both. In a later letter from their attorney to Jarvis, they sought an increase in their years
of credited service.
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----------------------- Page 5-----------------------
and its decisions are "final, binding and conclusive on all parties." The letter did not
inform Kennedy and Feliciano of their right to an administrative appeal.
B. Administrative Appeal
Kennedy and Feliciano sued the Board in superior court in March 2018.
The initial complaint was not filed as an administrative appeal. In early April the Board
moved to treat the complaint as a notice of appeal. Kennedy and Feliciano then moved
to amend their complaint to includegrounds for administrativeappeal. The court granted
the Board's motion to treat the complaint as a notice of appeal and denied Kennedy and
Feliciano's motion to amend as moot.
In the administrative appeal, Kennedy and Feliciano argued that
AMC03.85.050 required the Board to recalculate their retirement benefits to account for
retroactive compensation from their lawsuit. The superior court affirmed the Board's
decision, holding that Kennedy and Feliciano could not receive increased retirement
benefits because AMC Chapter 3.85 "expressly prohibits a member fromearning service
credits concurrently with the distribution of a retirement benefit." Kennedy and
Feliciano appeal, arguing that the superior court erred by failing to order the Board to
recalculate their retirement benefits.
C. Attorney's Fees Dispute
The Board moved for an award of 20% of its attorney's fees and full costs
under Alaska Appellate Rules 508(e)(4) and 508(d). The Board sought $20,007.06 in
attorney's fees (based upon $100,035.33 in total fees) and $5,519.99 in costs. Kennedy
andFeliciano opposed, arguing that counsel for theBoardbilled an unreasonablenumber
of hours and that certain costs were not permitted by statute. The Board conceded that
3.3 hours of work should be subtracted from its fee request but argued that the hours
spent on the case were otherwise not excessive.
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----------------------- Page 6-----------------------
The superior court awarded the Board $18,000 in attorney's fees and
$4,279.99 in costs. The court explained its decision to deny $1,240 in costs for
"miscellaneous online Westlaw legal research in preparation for hearing." However, it
did not explain its reduction of $2,007.06 from the requested attorney's fee award
beyond noting in the order that it was awarding fees incurred "necessarily and
reasonably."
Kennedy and Feliciano appeal the award of attorney's fees, arguing that the
amount billed was excessive and fees should be limited to the amount their attorney
billed them. They do not appeal the award of costs.
We consolidated the two appeals.8
III. STANDARD OF REVIEW
"When the superior court is acting as an intermediate court of appeal in an
administrative matter, we independently review the merits of the agency or
administrative board's decision."9
When interpreting "questions of law where no agency
expertise is involved," we apply "the substitution of judgment standard."10
"The
8 Kennedy v. Jarvis , No. S-17553/17684 (Alaska Supreme Court Order,
May 21, 2020).
9 Davis Wright Tremaine LLP v. State, Dep't of Admin., 324 P.3d 293, 299
(Alaska 2014) (quoting Shea v. State, Dep't of Admin., Div. of Ret. & Benefits, 267 P.3d
624, 630 (Alaska 2011)).
10 Id. We use a four-part standard for appeals of administrative rulings:
"(1) the 'substantial evidence test' for questions of fact, (2) the 'reasonable basis test' for
questions of law involving agency expertise, (3) the 'substitution of judgment test' for
questions of law involving no agency expertise, and (4) the 'reasonable and not arbitrary
test' for review of administrative regulations." Oels v. Anchorage Police Dep't Emp.'s
Ass'n , 279 P.3d 589, 595 (Alaska 2012) (quoting ConocoPhillips Alaska, Inc. v. State,
Dep't of Natural Res., 109 P.3d 914, 919 (Alaska 2005)). As both parties acknowledge,
(continued...)
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----------------------- Page 7-----------------------
'substitution of judgment' test is equivalent to de novo review and requires that we
'adopt the rule of law that is most persuasive in light of precedent, reason, and
11
policy.' "
We review an award of attorney's fees by a superior court acting as an
12
"We will find an abuse of
intermediate appellate court for abuse of discretion.
discretion when the superior court's award of attorney's fees is 'arbitrary, capricious,
manifestly unreasonable, or improperly motivated.' "13
IV. DISCUSSION
A. The Superior Court Did Not Err When It Decided That Kennedy And
Feliciano Are Not Entitled To Recalculation Of Retirement Benefits.
1. Preliminary arguments
The Board makes two threshold arguments: that APFRS should not be
bound by the judgment against the Municipality of Anchorage, and that Kennedy and
Feliciano's claim is barred by quasi-estoppel. Both lack merit.
a. The Board is bound by the superior court judgment
against the Municipality.
The Board argues that it should not be bound by the judgment in Kennedy
and Feliciano's case against the Municipality of Anchorage because the Board was not
a party to that case and is not in privity with the Municipality. But we already rejected
10 (...continued)
this case presents a question of law involving no agency expertise.
11
Id. (quoting Kingik v. State, Dep't of Admin., Div. of Ret. & Benefits , 239
P.3d 1243, 1248 (Alaska 2010)).
12
Hodari v. State, Dep't of Corr., 407 P.3d 468, 471 (Alaska 2017) (noting
that the same standard of review applies whether or not the superior court acts as
intermediate appellate court).
13 Id. (quoting Roderer v. Dash, 233 P.3d 1101, 1106 (Alaska 2010)).
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----------------------- Page 8-----------------------
14
this argument in Board of Trustees, APFRS v. Municipality of Anchorage . In that case,
the Board sought compensation from the Municipality for "resulting adverse actuarial
15 One of
impact on [APFRS] when the Municipality of Anchorage settles a grievance."
the Board's arguments was that, because it was not a party to litigation between the
Municipality and a police officer, it "should not be bound to absorb the actuarial impact
from [the officer's] grievance."16 We rejected that argument, reasoning that "the Board
in fact agreed to the imposition of the . . . obligation because the contract between the
parties, memorialized at AMC 3.85.050(B), sets forth the procedure for accounting for
retroactive compensation in the event of a grievance."17 The Board remains bound by
its contract and by AMC 3.85.050(B)'s requirement to consider in its calculation any
18
compensation paid as a result of a "court ordered judgment or settlement." Because
the Board's argument here is indistinguishable from the argument we rejected in Board
of Trustees, APFRS v. Municipality of Anchorage, it is without merit.
14
144 P.3d 439, 447 (Alaska 2006).
15 Id. at 441.
16 Id. at 447.
17 Id.
18 AMC 3.85.050(B) ("Retroactive compensation, that m eets t he definition
of compensation of this chapter, shall be considered by the board in the calculation of
benefits if paid as a result of a grievance, arbitration award, collective bargaining
agreement or court ordered judgment or settlement. However, any amounts awarded or
paid as c ourt c osts, interest, attorney's fees, statutory penalties, punitive damages and
any other type of retroactive compensation that does not meet the definition of
compensation in this chapter shall be specifically excluded.").
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----------------------- Page 9-----------------------
b. Kennedy and Feliciano's claim is not barred by quasi-
estoppel.
The Board also argues that Kennedy and Feliciano's claim is barred by
quasi-estoppel. "Quasi-estoppel 'precludes a party from taking a position inconsistent
with one . . . previously taken where circumstances render assertion of the second
19
position unconscionable.' "
Kennedy and Feliciano successfully argued that due to the
collateral source rule their pension benefits could not be used to offset damages and no
evidence of the pension benefits they were receiving could be presented to the jury. The
collateral source rule excludes "evidence of other compensation on the theory that such
evidence would affect the jury's judgment unfavorably to the plaintiff on issues of
20 The Board argues that because "[Kennedy and Feliciano]
liability and damages."
opposed making their pension benefits losses part of the damage calculation in their
discrimination case," their "present assertion [is] indefensible."
KennedyandFeliciano'scollateral sourceargument is not inconsistent with
their position in this case, let alone so inconsistent as to make their current position
unconscionable. Their invocation of the collateral source rule to prevent an offset of
damagesin their trial against theMunicipality isunrelated to their statutory interpretation
argument here. The Board argues that Kennedy and Feliciano had "an opportunity to
include pension benefits adjustments as part of the damage calculation . . . but chose to
forego it." But the issue at trial was not whether pension benefits would be adjusted.
Rather, the issue was whether Kennedy and Feliciano's receipt of pension benefits could
19 John's Heating Serv. v. Lamb, 46 P.3d 1024, 1040 (Alaska 2002)
(alteration in original) (quoting Jamison v. Consolidated Util., Inc. , 576 P.2d 97, 102
(Alaska 1978)).
20 Jones v. Bowie Indus., Inc., 282 P.3d 316, 326 (Alaska 2012) (quoting
Tolan v. ERA Helicopters, 699 P.2d 1265, 1267 (Alaska 1985)).
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----------------------- Page 10-----------------------
be used to reduce their damages award. Because Kennedy and Feliciano did not take a
prior inconsistent position, we reject the Board's quasi-estoppel argument.
2. Interpretation of AMC Chapter 3.85
The primary dispute in this case is how to interpret different sections of
AMC Chapter 3.85; the main conflict is between AMC 03.85.050, which requires that
jury awards be "considered by the board" as compensation; and AMC 03.85.070, which
requires separation of service before a member can receive benefits. The intent behind
Section .070 is to prevent the simultaneous receipt of retirement benefits and
employment compensation,known as "doubledipping." Section .050(B)-(C) of Chapter
3.85 reads:
B. Retroactivecompensation, that meetsthedefinition
of compensation of this chapter, shall be considered by
the board in the calculation of benefits if paid as a result
of a grievance, arbitration award, collective bargaining
agreement or court ordered judgment or settlement.
However, any amounts awarded or paid as court costs,
interest, attorney's fees,statutory penalties, punitivedamages
and any other type of retroactive compensation that does not
meet the definition of compensation in this chapter shall be
specifically excluded.
C. Active members may elect to have retroactive pay
treated as compensation in the year in which paid or to have
retroactive pay allocated to the pay periods where it would
have been actually paid. The method chosen by the active
member shall apply to all instances of eligible retroactive
pay. For retired members, retroactive pay shall be
allocated to the pay periods where it would have been
actually paid. [21]
21
AMC 03.85.050(B)-(C) (emphasis added).
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And Section .070(F)-(G) states:
F. Unless otherwiserequired bylaw, a membershall not
receive a retirement benefit from the system at the same
time that the member is accruing credited service in the
system. In the event that a retired member again accrues
credited service, retirement benefits payable from the system
shall be automatically suspended until such time as the
accrual of service has ceased. Benefits shall be calculated on
the basis of total credited service.
G. In order to be eligible to receive pension benefits
from the system, a Plan III member must have a
separation from service. [22]
Kennedy and Feliciano argue that Section .050(B)-(C) entitles them to
recalculation of their retirement benefits to account for the jury awards of lost past wages
and benefits. Because Section .050(B) requires APFRS to consider retroactive
compensation from a court ordered judgment in the calculation of retirement benefits,
Kennedy and Feliciano argue that APFRS must recalculate their pensions to account for
the award of lost pay for the six years between their constructive dismissal and the start
of their trial. They point out that Section .050(C) expressly provides for allocation of
pay for retired members and argue that this means the statute contemplates recalculation
for members in their position. They also argue that the Board has previously included
damages awards in its calculation of benefits and should do the same for them.23
The Board counters that Section .070(F) controls, prohibiting the Board
from applying service credits to the lost wages for the period in which Kennedy and
Feliciano were already drawing retirement benefits. It points out that statutes must be
22
AMC 03.85.070(F)-(G) (emphasis added).
23
SeeBd. of Trs., APFRS v. Municipalityof Anchorage, 144 P.3d 439, 444-45
(Alaska 2006) (describing occasions when retirement benefits were adjusted based on
damages awards or settlements).
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----------------------- Page 12-----------------------
construed "as a whole, not in parts," and argues that Kennedy and Feliciano's reading
would violate Section .070 as well as several terms defined in AMC 03.85.015. The
Board acknowledges that it has included awards of back pay in its calculation of
retirement benefits for other members. But it explains that in those cases the back pay
was for "compensation duringtheir pre-retirement working years." In contrast, factoring
in back pay for periods in which Kennedy and Feliciano were already drawing retirement
would amount to double dipping "contrary to the plain language of the municipal code
and to the logic of a retirement system."
The key issue, then, is whether Section .050(B)-(C) creates an exception
to Section .070(F)'s prohibition on receiving retirement benefits and service credits
simultaneously and to Section .070(G)'s requirement that a Plan member have a
separation from service before receiving retirement benefits.
a. This case is not controlled by Board of Trustees, APFRS
v. Municipality of Anchorage .
Kennedy and Feliciano argue that the issues in this case were settled by
24
In that case, the Board
Board of Trustees, APFRS v. Municipality of Anchorage .
sought compensation from the Municipality for its increased actuarial liability due to
back pay awarded to police officers in two underlying cases.25 One case concerned a
police officer who was terminated, then reinstated with back pay and benefits.26
The
other concerned officers who had been underpaid when their hours were changed and
24
Id.
25 Id. at 444-45.
26 Id. at 444.
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----------------------- Page 13-----------------------
27
were given overtime pay to make up for it. Neither of the underlying cases involved
compensation for a period in which the member was receiving retirement benefits.
APFRS v. Municipality did not address whether Section .050(B) creates an exception to
Section .070(F).
b. Kennedy and Feliciano's damages award does not change
their years of credited service.
Kennedy and Feliciano concede that the damages award does not change
their final average compensation. They acknowledge that final average compensation
is based on pay "prior to their last day of actual work prior to retirement" and therefore
their post-retirement awards should not change their final average compensation.
Because the only variables in the calculation of retirement benefits are final average
compensation and years of credited service, the only issue is whether AMC Chapter 3.85
requires the Board to consider the damages award for purposes of determining years of
credited service. We conclude that it does not. When read in light of the other
provisions in Chapter 3.85, Section .050(B)-(C) does not require the Board to apply
service credits to retroactive compensation for periods in which a member was already
receiving retirement benefits.
Section .050(B) states, in relevant part: "Retroactive compensation, that
meets the definition of compensation of this chapter, shall be considered by the board in
28 The
the calculation of benefits if paid as a result of a . . . court ordered judgment . . . ."
plain reading of Section .050(B) is that compensation under this section shall be treated
the same as other compensation. The section classifies certain jury awards as
"retroactive compensation" and requires that they "shall be considered by the board in
27 Id.
28 AMC 03.85.050(B).
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the calculation of benefits." And Section .050(C) requires, "For retired members,
retroactive pay shall be allocated to the pay periods where it would have been actually
29 Neither section discusses service credits or claims to supersede other parts of
paid."
30 The most natural reading of these sections is that compensation earned
the Chapter.
under Section .050(B) must be considered the same as normal compensation and
allocated as required by Section .050(C). There is nothing in Section .050 that suggests
retroactive compensation earned under Section .050(B) should be excluded from the
requirements that apply to normal compensation under the Chapter.
We have held that "[i]f one statutory 'section deals with a subject in general
terms and another deals with a part of the same subject in a more detailed way, the two
should be harmonized, if possible; but if there is a conflict, the specific section will
control over the general.' "31 Kennedy and Feliciano argue that these canons support
their interpretation of AMC Chapter 3.85. But Section .070(F)32 deals more specifically
with Kennedy and Feliciano's situation than does Section .050(B)-(C). Section .050(B)
merely requires that retroactive compensation like a jury award "be considered by the
29 AMC 03.85.050(C).
30 See AMC 03.85.050(B)-(C).
31 Nelson v. Municipality of Anchorage , 267 P.3d 636, 642 (Alaska 2011)
(quoting In re Hutchinson's Estate, 577 P.2d 1074, 1075 (Alaska 1978)); see also
ANTONIN SCALIA & BRYAN A. GARNER, READING LAW : THE INTERPRETATION OF LEGAL
TEXTS 180-88 (2012) (discussing harmonious-reading canon and general/specific canon).
32 AMC 03.85.070(F) states: "Unless otherwise required by law, a member
shall not receive a retirement benefit from the system at the same time that the member
is accruing credited service in the system. In the event that a retired member again
accrues credited service, retirement benefits payable from the system shall be
automatically suspended until such time as the accrual of service has ceased. Benefits
shall be calculated on the basis of total credited service."
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----------------------- Page 15-----------------------
33
board in the calculation of benefits." It does not require that retroactive compensation
be considered for the purpose of calculating service credits when ordinary compensation
would not be. Similarly, Section .050(C) explains how retroactive compensation should
be allocated, but does not state that it should be treated differently than other
compensation.
Section .070 addresses only the treatment of retirement benefits for
members of Plan III. Section .070(F) prohibits a member from receiving "a retirement
benefit from the system at the same time that the member is accruing credited service in
the system." And Section .070(G) specifically requires that members be separated from
34 Sections .050 and .070 can be
service in order to receive retirement benefits.
harmonized by treating retroactive compensation earned under Section .050 the same as
other compensation, which is subject to Section .070.
The plain reading of Section .050(B) treats compensation earned under
Section .050(B) the same as normal compensation. This reading also allows Sections
.070 and .050 to be read harmoniously. Although Kennedy and Feliciano's retroactive
compensation must be considered under Section .050, it remains subject to the same
requirements as other forms of compensation, including Section .070's prohibition on
earning service credits while receiving retirement benefits. Because they were receiving
retirement benefits during the years for which the jury awarded them retroactive
compensation, that compensationcannot yield additionalservicecredits. WhileKennedy
and Feliciano are entitled to a recalculation of benefits, the recalculation does not change
their benefits because their retroactive compensation does not affect either their final
33 AMC 03.85.050(B).
34
AMC 03.85.070(G) states: "In order to be eligible to receive pension
benefits from the system, a Plan III member must have a separation from service."
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average compensation or their years of credited service. The superior court did not err
when it decided that a recalculation of benefits would result "in no change." 35
B. The Superior Court Did Not Abuse Its Discretion When It Awarded
Attorney's Fees.
Kennedy and Feliciano appeal the superior court's award of $18,000 in
attorney's fees (based on $90,000 of actual attorney's fees) to the Board. Alaska
Appellate Rule 508(e)(4) states that the prevailing party in an administrative appeal
generally shall be awarded "20% of its actual attorney's fees that were necessarily
incurred." Kennedy and Feliciano argue that the amount of time the Board's attorneys
billed was excessive and certain hours were erroneously billed. They request that we
limit the amount of attorney's fees "reasonably and necessarily incurred" by the Board's
36
attorneys to $27,420, the amount billed by Kennedy and Feliciano's own attorney.
1. Request to limit attorney's fees
Kennedy and Feliciano first argue that the superior court abused its
discretion by awarding an excessive amount of attorney's fees given the simple nature
of the case. They request that this court cap the amount of fees "reasonably and
necessarily incurred" by the Board at "the same amount that the Appellant[s'] attorney
35 Because we affirm the superior court's decision, we do not reach the
Board's alternative argument that Kennedy and Feliciano's interpretation of the
Anchorage Municipal Code is barred by the Internal Revenue Code.
36 Kennedy and Feliciano do not make a request for any other relief in their
opening brief, although in their reply brief, they request in passing that the court should
remand for an explanation of the attorney's fee award. Their argument on this issue is
underdeveloped to the point that it is waived. See Windel v. Carnahan, 379 P.3d 971,
980 (Alaska 2016) ("[W]aiver due to inadequate briefing 'is not correctable by arguing
the issue in a reply brief.' " (quoting Adamson v. Univ. of Alaska , 819 P.2d 886, 889 n.3
(Alaska 1991))).
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----------------------- Page 17-----------------------
37
charged his clients, which was $27,420." Kennedy and Feliciano's argument that the
attorney's fee award should be capped at the amount their attorney charged has no merit.
We have previously held that "[a] large discrepancy between the fees incurred by each
38 And we have
side may be evidence of unreasonableness, but it is not conclusive."
upheld attorney's fee awards based on fees incurred by the prevailing party that were
double or more the amount incurred by the non-prevailing party.39 Such discrepancies
may be the result of "over-preparation and over-billing by one set of attorneys," but may
also be the result of "under-preparation and under-billing by the other set of attorneys"
or unequal burdens in litigation.40 To cap attorney's fees at the amount of fees incurred
by the non-prevailing party would imply that attorney's fees must be equal, which would
be inconsistent with our cases establishing that large discrepancies in attorney's fees are
a relevant but not conclusive factor. Kennedy and Feliciano's request to cap the Board's
attorney's fee award at the amount their own attorney charged is denied.
37 This figure, when multiplied by the 20% fraction typically awarded in
administrative appeals, would yield an attorney's fee award of $5,484. See Alaska R.
App. P. 508(e)(4) (providing for award of 20% of actual attorney's fees necessarily
incurred in most administrative appeals).
38 Nautilus Marine Enter., Inc. v. Exxon Mobil Corp., 332 P.3d 554, 560-61
(Alaska 2014) (quoting N. Pac. Processors, Inc. v. City &Borough of Yakutat, 113 P.3d
575, 589 (Alaska 2005)).
39 See id. at 560 n.32 (upholding fee award when non-prevailing party alleged
its fees were one-fifth the prevailing party's fees); Oakly Enters., LLC v. NPI, LLC, 354
P.3d 1073, 1084-85 (Alaska 2015) (upholding attorney's fee award when prevailing
party's fees wereapproximately $245,000 and non-prevailing parties'feeswere$75,000
each); Gamble v. Northstore P'ship, 28 P.3d 286, 289-90 (Alaska 2001) (upholding
attorney's fee award when prevailing party's fees were double the amount of non-
prevailing party's fees).
40 Gamble, 28 P.3d at 290.
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2. Reasonableness of APFRS's fees
In addition to arguing that fees should be capped, Kennedy and Feliciano
object to specific items billed. The superior court has "broad discretion" to award fees
and costs, and the party seeking to overturn attorney's fees bears "a heavy burden of
41
persuasion."
Because the superior court did not abuse its discretion when it awarded
attorney's fees, we uphold the attorney's fee award.
We have held that hours billed are unreasonable where they are "billed for
activities that are not reasonably intended to advance the litigation," or "in excess of
42
those [hours] that ought to be required to complete" a task. Kennedy and Feliciano
argue that APFRS's attorneys billed hours "for areas of research that have no application
to the appeal" and "[r]esearch work which appears to have no relevance to this case."
They claim the Board's attorneys "advanced many extraneous arguments . . . that were
without merit or frivolous," including that the past wages award was not retroactive, lack
of privity, quasi-estoppel, and that the Internal Revenue Code prohibited the court from
granting the relief sought. Inaddition, Kennedy and Feliciano challenge as unreasonable
billing for the following tasks: researching sovereign immunity, researching Chevron
43 and the Alaska Constitution, drafting a motion to file a "Petition for
deference
41
Alaskasland.Com, LLCv. Cross , 357 P.3d 805, 825 (Alaska2015) (quoting
Schultz v. Wells Fargo Bank, N.A. , 301 P.3d 1237, 1241 (Alaska 2013)).
42
Valdez Fisheries Dev. Ass'n, Inc. v. Froines, 217 P.3d 830, 833 (Alaska
2009).
43 Chevron deference, named for Chevron, U.S.A., Inc. v. Nat. Res. Def.
Council, Inc., 467 U.S. 837 (1984), is an administrative law principle requiring the court
to defer to an agency's interpretation of an ambiguous statute if the agency is tasked with
administering the statute and the interpretation is permissible. Id. at 842-43.
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44
Common Law Cert," and reviewing potential issues for an education program.
Kennedy and Feliciano also argue that the hours billed were excessive and duplicative.
But research on issues that were not ultimately pursued is not necessarily
unreasonable. Researchon sovereignimmunitywasrelevantto Kennedy and Feliciano's
claims against the Executive Director and the Board, even if sovereign immunity was not
ultimately raised as a defense. Research on Chevron deference and the Alaska
Constitution was not unreasonable; while the standard of review in this case is
substitution of judgment, it was not unreasonable for the Board's attorneys to look into
whether the agency might be due deference in interpreting its enabling statute. And
while the Board's arguments concerning lack of privity, quasi-estoppel, and the Internal
RevenueCodewere unavailing, the superior court did not abuse its discretion in deciding
45
that work spent on these arguments was reasonably intended to advance the litigation.
The Board's attorney's fees may have been unusually high for an
administrative appeal. But contrary to Kennedy and Feliciano's claim that it was a
simple case, this was an unusually complex case and was further complicated by the fact
that the parties first had to litigate whether the complaint was an administrative appeal.46
Further, the superior court did reduce the amount of attorney's fees in its award. And the
superior court's close attention to the costs in this case, as well as its decision to award
a lower amount of attorney's fees than the amount requested, suggest that the superior
44
The latter two billing items were already conceded by the Board before the
superior court issued its order.
45 See Valdez Fisheries, 217 P.3d at 833.
46 The Board bears partial responsibility for the confusion about whether or
not the case was an administrative appeal. Kennedy and Feliciano correctly point out
that the Board failed to notify them of their right to appeal and disputed their right to
appeal before the superior court.
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court carefully evaluated the reasonableness of attorney's fees and costs. Because
Kennedy and Feliciano have failed to show that the superior court's partial award of
attorney's fees was arbitrary, capricious, manifestly unreasonable, or improperly
motivated, we affirm the award.
V. CONCLUSION
The superior court's decision denying a recalculation of benefits is
AFFIRMED. The superior court's decision awarding attorney's fees is AFFIRMED.
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