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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Matthew J. Fischer v. Kenai Peninsula Borough School District (5/24/2024) sp-7701
Notice: This opinion is subject to correction before publication in the PACIFIC 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.gov.
THE SUPREME COURT OF THE STATE OF ALASKA
MATTHEW FISCHER, )
) Supreme Court No. S-18568
Appellant, )
) Superior Court No. 3KN- 19-00185 CI
v. )
) O P I N I O N
KENAI PENINSULA BOROUGH )
SCHOOL DISTRICT, ) No. 7701 - May 24, 2024
)
Appellee. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Kenai, Jennifer K. Wells, Judge.
Appearances: Matthew Fischer, pro se, Soldotna, Appellant.
Kendra E. Bowman, Jermain, Dunnagan, and Owens,
Anchorage, for Appellee.
Before: Maassen, Chief Justice, and Borghesan, Henderson,
and Pate, Justices. [Carney, Justice, not participating.]
HENDERSON, Justice.
INTRODUCTION
A teacher was involved in a car accident caused by a third party and
sustained serious injuries. The teacher was covered under his employer's (the
District's) self-insured healthcare plan (the Plan). The Plan provides that the District
has a right of reimbursement for medical expenses if a covered person receives a
separate settlement. The District paid for the teacher's medical expenses through the
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Plan. The teacher also received $500,000 in settlements from two separate insurers.
Twice the teacher requested that the District waive its right to reimbursement, but the
District never agreed. About two years after the teacher notified the District of his
insurance settlements, the District sent the teacher a letter requesting reimbursement
and later sued him for breach of contract.
The superior court granted summary judgment to the District on the issue
of whether the teacher breached the contract to reimburse the District. The District then
moved for summary judgment on the amount of damages, providing an affidavit from
its Plan Administrator and a claims ledger. The teacher opposed the motion, providing
his own affidavit and a self-created spreadsheet in support of his argument that some of
the medical costs paid by the District were not associated with the accident. The court
granted the District's motion for summary judgment on contract damages. The teacher
appeals.
We affirm the court's summary judgment order regarding breach of
contract, but we hold Fischer raised a genuine dispute of material fact regarding
damages. We therefore reverse and remand the court's summary judgment order
regarding contract damages.
FACTS AND PROCEEDINGS
A. Facts
1. Accident and background on insurance coverage
In November 2015, Matthew J. Fischer was in a car accident and, as a
result, broke his femur and suffered other injuries requiring medical treatment. A third
party was responsible for the accident. At the time of the accident Fischer was
employed by the Kenai Peninsula Borough School District and was insured under the
District's Plan. He also had an underinsured motorist policy with State Farm.
The District's Plan is self-funded. District and employee contributions
fund the benefits. The District administers the Plan through an appointed Plan
Administrator and uses Rehn & Associates (Rehn) for claims processing. The Plan's
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terms grant the Plan Administrator "maximum legal discretionary authority" to interpret
the Plan, determine benefits eligibility, and decide disputes.
The Plan contains provisions for third -party recovery, subrogation, and
reimbursement that apply when a covered person incurs medical expenses "related to
injuries or illness caused by the act or omission of another person." If the covered
person has claims against a third party for payment of medical expenses, "the Plan will
be secondary, not primary, and the Plan will be subrogated to all rights the Covered
Person may have against that other person . . . and will be entitled to Reimbursement."
If the covered person does not comply with the recovery, subrogation, and
reimbursement provisions, the Plan Administrator may choose to "deny payment of any
claims for benefits by the Covered Person and to deny or reduce future benefits
payable." It may also bring legal action against the covered person and the covered
person must "pay the Plan's attorneys' fees and costs, regardless of the action's
outcome." The Plan's non-waiver clause states, "N o term, condition or provision of
this Plan shall be deemed to have been waived, and there shall be no estoppels against
the enforcement of any provision of this Plan, except by written instrument of the party
charged with such waiver or estoppels. "
2. Payment of the medical claims and corr espondence
In December 2015 Fischer emailed the District Superintendent and the
Plan Administrator, "asking that the District health plan agree to 75% reimbursement"
and waive the other 25%, referencing the Plan policy that states the Plan Administrator
has the discretion to interpret the terms of the Plan and make changes. The Plan
Administrator emailed back stating, "We're working [o]n this and will be in contact
with you."
In January 2016 Fischer received a settlement from USAA, the insurer of
the other driver involved in the accident, for $300,000. Subsequently, in February,
Fischer signed a right of recovery form from Rehn and returned the form to them. In
this form Fischer noted the USAA settlement had been paid out and shared information
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regarding his policy with State Farm. Shortly after this the District paid for one of
Fischer's medical claims related to his accident.
In March Fischer reached out again to the District Superintendent asking
the District to waive the reimbursement clause of the Plan. The Superintendent
responded that it was early in the process to consider a waiver of claims and stated, "If
the [D]istrict were to consider even a partial waiver, which I have not agreed to do, we
would first need complete documentation of your cla imed damages and all insurance
coverages that may be available to you for this accident." Later in March, Fischer
signed a notarized r ight of recovery form provided by the District and listed the name
of the third party responsible for the accident, as we ll as that party's insurer, USAA .
The District paid additional medical claims from April through December. In October
Fischer received another settlement related to the accident, in the amount of $200,000,
through the underinsured motorist coverage provi ded under his own State Farm policy.
In May 2018 the District sent Fischer a letter requesting reimbursement of
$164,111.28 for medical claims related to his motor vehicle accident. In August the
District reiterated its request in a follow -up letter. Along with the letter, it attached a
claims ledger and a copy of the right of recovery policy and form.
B. Proceedings
In February 2019 the District filed its initial complaint against Fischer
alleging six causes of action related to his failure to reimburse the District. The District
sought recovery of the medical costs it had paid. Fischer answered by denying many
of the District's claims and asserting seven affirmative defenses, including failure to
mitigate damages and waiver.
1. Summary judgment for breach of contract
In June 2020 the District moved for summary judgment on the breach of
contract claim, arguing it had established the elements of breach of contract. Fischer
opposed summary judgment, arguing that the action was barred by the applicable statute
of limitations and that the District failed to mitigate its damages.
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In February 2022 the superior court granted summary judgment in favor
of the District for the breach of contract claim. The court concluded that the action was
timely and "Fis cher breached the contract when he failed to immediately reimburse
[t]he Plan with settlement money that he received from third-party insurance
companies." The court also determined that the Plan was a self-funded employee
benefit similar to the plan analyzed by this court in Best v. Fairbanks North Star
1
Borough . It did not consider Fischer's arguments related to mitigation of damages
because the amount of damages was not at issue in that motion.
2. Summary judgment for contract damages
In June the Distric t filed a motion for summary judgment related to the
amount of contract damages at issue. The District argued that it paid $164,111.28 in
Fischer's medical expenses and that the Plan entitled it to 100% reimbursement. It
supported the motion with an exhi bit that contained an August 2018 letter from the
District requesting repayment, an attached claims ledger, details about the Plan's policy
for reimbursement and recovery, and a right of recovery form signed by Fischer. The
claims ledger is on District le tterhead and contains columns for claim numbers, payment
status, provider, diagnosis codes, the date the claim was incurred, the charges, what the
District paid, the date of payment, and the check number.
The District also supplied an affidavit from the current Plan
Administrator. The Plan Administrator explained how the Plan works as a self -insured
plan. With regard to Fischer's case, the Plan Administrator stated the District never
agreed to waive reimbursement, Fischer signed the right of recovery form, and
"[d]espite receiving $500,000 in settlement recoveries arising out of the accident, Mr.
Fischer never reimbursed" the District and thus owed $164,111.28.
1
493 P.3d 868 (Alaska 2021).
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----------------------- Page 6-----------------------
Fischer opposed the District's motion, disputing the $164,111.28 damages
figure. He claimed that "[a]t most, the District paid $106,081.05 in medical expenses
related to [his] 2015 motor vehicle collision." He also argued the District's recovery
was limited to only "appropriate equitable relief." He submitted his own affidavit, a
spreadsheet containing expenses paid by the Plan related to his car accident, a letter
containing his settlement offer to the District, and a report from the District's attorney
about a union issue he was involved in.
In his affidavit Fischer stated:
The maximum amount of medical bills the Health Plan paid
related to my November 2015 [motor vehicle collision
(MVC)] is $106,081.05. These expenses were incurred
between November 3, 2015 - April 3, 2016. Medical costs
incurred on or after 4/4/2016 are unrelated to the November
2015 MVC. Costs related to the April 4, 2016 diagnosis of
"left femur delayed union" and "bursitis" and are not
reimbursable medical expenses related to the 11/2015 MVC
and should not be included.
He also cited his spreadsheet purporting to show the total motor vehicle collision-
related medical expenses the District paid. He further contended that the District filed
the lawsuit for breach of contract and many other claims to "impugn [his] character and
render [him] ineffective as a negotiator on the Health Care Committee for the Teacher's
Union."
In September the superior court granted the District's motion for summary
judgment on the amount of contract damages. The court found the District supported
its damages claim of $164,111.28 "with multiple exhibits, and has maintained that this
is the amount that was paid by the Plan throughout litigation." The court did not find
Fischer's evidence "credible" because "[h]e included a spreadsheet that is unverifiable
and appears to have been created by himself. He did not include doctor's notes, an
affidavit from a healthcare provider, or any invoicing relating to the expenses he alleges
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----------------------- Page 7-----------------------
were unrelated to the car accident." The court rejected Fischer's claim about limiting
recovery to equitable relief.
3. Motion for reconsideration, final judgment, and appeal
In October Fischer submitted a motion for reconsideration along with two
attachments: a supplemental affidavit from his doctor and responses to interrogatories.
The affidavit from his doctor, dated October 2022, explained that Fischer developed a
2
nonunion about six months after his accident, and that Fischer's treatment from May
2016 on addressed this nonunion. The motion for reconsideration was deemed denied
3
after 30 days.
The court entered final judgment in favor of the District, granting the
District $164,111.28 in damages, along with prejudgment interest, against Fischer.
Fischer appeals, arguing the trial court erred in granting the motions for summary
judgment for breach of contract and damages.
STANDARD OF REVIEW
Under Alaska Rule of Civil Procedure 56(c), "[j]udgment shall be
rendered forthwith if the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, show that there is no genuine issue as
to any material fact and that any party is entitled to a judgment as a matter of law." "We
review a grant of summary judgment de novo, 'affirming if the record presents no
genuine issue of material fact and if the movant is entitled to judgment as a matter of
2
His doctor defined nonunion "as failure of the fracture to heal after six
months."
3
See Alaska Civil Rule 77(k)(4) ("If the motion for reconsideration has not
been ruled upon by the court within 30 days from the date of the filing of the motion,
or within 30 days of the date of filing of a response requested by the court, whichever
is later, the motion shall be taken as denied.").
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----------------------- Page 8-----------------------
4 5
law.' " "[A] material fact is one upon which resolution of an issue turns." At the
summary judgment stage, trial courts must not "make trial-like credibility
determinations, [nor] conduct trial-like evidence weighing."6
We generally decline to review an issue not presented below unless the
claim raises plain error "or the issues (1) do not depend upon new facts, (2) are closely
related to other arguments at trial, and (3) could have been gleaned from the
7
pleadings." "Plain error exists where an obvious mistake has been made which creates
8
a high likelihood that injustice has resulted."
DISCUSSION
A. The Court Did Not Err In Granting Summary Judgment As To
Fischer's Breach Of Contract.
Fischer challenges the superior court's order granting summary judgment
as to breach of contract, arguing that the District waived its right to reimbursement.
Fischer claims the Plan grants the Plan Administrator discretion to waive
reimbursement. He contends the District knew about his USAA settlement in February
2016 and notes that he requested waiver of the reimbursement clause in December 2015
and March 2016. Fischer argues that because the District paid his medical claims from
February through December 2016, but did not request reimbursement until the summer
of 2018, there is a genuine issue of material fact regarding whether the District
impliedly waived its right to reimbursement. He contends that where the District "long
4
Sulzbach v. City & Borough of Sitka, 517 P.3d 7, 13 (Alaska 2022)
(quoting Kelly v. Mun. of Anchorage, 270 P.3d 801, 803 (Alaska 2012)).
5
Christensen v. Alaska Sales & Serv., Inc., 335 P.3d 514, 519 (Alaska
2014).
6
Id. at 520.
7
McCavit v. Lacher , 447 P.3d 726, 731 (Alaska 2019) (quoting Hoffman
Constr. Co. of Alaska v. U.S. Fabrication & Erection, Inc. , 32 P.3d 346, 351 (Alaska
2001)).
8
Miller v. Sears , 636 P.2d 1183, 1189 (Alaska 1981).
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----------------------- Page 9-----------------------
neglect[ed] to insist upon its right to reimbursement," it should be found to have waived
that right. Fischer further notes that the District's failure to request reimbursement until
the summer of 2018 "lulled" him into "us[ing] most of the settlement funds on non -
traceable expenditures."
9
Waiver is " the intentional relinquishment of a known right." It can be
10
express or implied. "Proving implied waiver of a legal right requires 'direct,
unequivocal conduct indicating a purpose to abandon or waive the legal right, or acts
11
amounting to an estoppel by the party whose conduct is to be construed as a waiver. ' "
The presence of a non -waiver provision " supports a finding of non -waiver unless one
12
party 's 'unreasonable acquiescence ' has lulled the other into inaction."
As a preliminary matter, we observe that Fischer failed to preserve his
implied waiver argument for appeal because he failed to adequately rai se it before the
superior court. Reviewing for plain error, we conclude the court properly granted
13 14
summary judgment for breach of contract. Here we interpret the Plan as a contract
and its plain language, along with the District's actions, establish that the District did
9
Milne v. Anderson , 576 P.2d 109, 112 (Alaska 1978).
10
Creekside Ltd. P'ship v. Alaska Hous. Fin. Corp., 482 P.3d 377, 385
(Alaska 2021).
11
Id. (quoting Milne , 576 P.2d at 112).
12
Duenas-Rendon v. Wells Fargo Bank, N.A. , 354 P.3d 1037, 1042-43
(Alaska 2015) (quoting Sengul v. CMS Franklin, Inc. , 265 P.3d 320, 328 (Alaska
2011)).
13
See Miller , 636 P.2d at 1189.
14
See Best v. Fairbanks N. Star Borough , 493 P.3d 868, 873-74 (Alaska
2021) (deciding Borough's self-insured medical plan was technically bargained-for
employee benefit and not insurance, so it should be interpreted as contract). Like the
plan in Best, the Plan here is self-funded through District and employee contributions,
it contains subrogation and reimbursement clauses, the District makes no profit from
the Plan, and it is negotiated by the employee union representatives. See id. at 871,
873-74.
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----------------------- Page 10-----------------------
not impliedly waive its right to reimbursement. Fischer requested waiver of the
reimbursement clause twice, but the District never agreed with those requests. In one
email exchange, the Plan Administrator explicitly stated "I have n ot agreed to" a partial
waiver. Although the District delayed seeking reimbursement for over two years after
learning of Fischer's USAA settlement, the delay in pursuing litigation did not
constitute "one party's 'unreasonable acquiescence ' [that] lulled the other into
15
inaction," particularly in light of the contract's non -waiver clause. Seeing no plain
error, we affirm the superior court's summary judgment order as to breach of contract.
B. It Was Error To Grant Summary Judgment As To The Amount Of
Contract Damages.
1. The District did not fail to mitigate its damages.
Fischer argues the superior court erred in not considering a purported
failure by the District to mitigate its damages. Fischer maintains the District could have
reduced its damages if it denied Fischer and his family's benefits claims and collected
its reimbursement earlier before pursuing litigation. He contends the District instead
chose litigation, which he argues caused additional attorney's fees and was motivated
16
by a desire to discredit him during a contentious union negotiation.
15
See Duenas-Rendon, 354 P.3d at 1042 -43 (quoting Sengul, 265 P.3d at
328); cf. Airoulofski v. State , 922 P.2d 889 , 894 -95 (Alaska 1996) (concluding there
was no waiver when plaintiff did not pursue litigation against municipality for period
of time while it was pursuing litigation over same issues against another party because
"prejudice to a party alone is not sufficient to support a wai ver argument").
16
The District argues Fischer failed to raise mitigation of damages before
the superior court, but it appears that Fischer did raise the issue. He discussed
mitigation of damages in his pleadings and affidavit opposing summary judgment for
breach of contract. Fischer also challenged the District's method of seeking
reimbursement in his affidavit opposing summary judgment on contract damages.
Although disagreement with the District's chosen method of collecting reimbursement
is distinct from an argument or showing that the District failed to mitigate its damages,
we assume without deciding that challenging the method of reimbursement is closely
related enough to mitigation of damages that Fischer preserve d the argument for appeal.
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----------------------- Page 11-----------------------
"Alaska law requires that parties to a contract mitigate damages in
17
situations of breach." The nonbreaching party " must use reasonable efforts to avoid
18
the consequences of injury done by another." However, a nonbreaching party's "duty
to make reasonable efforts to mitigate damages does not extend to subjecting oneself to
19
undue risk and expense."
Here Fischer has identified no genuine issue of material fact regarding
whether the District mitigated its damages. Rather, Fischer challenges the method the
District pursued to collect its reimbursement. He has presented no evidence that the
District somehow increased the amount of damages that it suffered or that Fischer
20
owed. Pursuing recovery through litigation may certainly be costly in terms of
attorney's fees. But the District's decision to request reimbursement and then pursue
litigation, rather than deny coverage for Fischer's medical costs - as he advocates the
District should have done - did not actually increase any amount of damages Fischer
21
owes. The superior court therefore did not err in its treatment of this issue.
17
D.H. Blattner & Sons, Inc. v. N.M. R othschild & Sons, Ltd. , 55 P.3d 37 ,
49 (Alaska 2002).
18
Univ. of Alaska v. Chauvin, 521 P.2d 1234, 1239 (Alaska 1974) .
19
Gates v. City of Tenakee Springs , 822 P.2d 455, 460 (Alaska 1991) (citing
West v. Whitney-Fidalgo Seafoods , Inc., 628 P.2d 10, 18 (Alaska 1981) ).
20
See Alaska Child . 's Servs., Inc. v. Smart , 677 P.2d 899, 902 -03 (Alaska
1984) ("[T]he burden of proving mitigation or failure to mitigate falls on the breaching
party." (citing West, 628 P.2d at 18; Chauvin, 521 P.2d at 1240 )).
21
Attorney's fees are part of the costs of litigation and are separate from the
damages related to a party's substantive claims. See Ehredt v. DeHavilland Aircraft
Co. of Canada , 705 P.2d 446, 452 n.8 (Alaska 1985) ("[A]ttorney's fees are not an item
of damage. ").
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----------------------- Page 12-----------------------
2. Fischer raised a genuine issue of material fact regarding
contract damages.
Although Fischer's mitigation of damages argument fails, we conclude
that he has nonetheless raised a genuine issue of material fact related to the amount of
damages attributable to his bre ach of contract. Under the Plan the covered person must
reimburse the District when the covered person incurs medical expenses "related to
injuries or illness caused by" a third party, the District pays for these medical expenses,
and the covered person recovers medical expenses from the third party. Fischer points
to the parties' opposing accounts of, and affidavits regarding, his accident-related
medical costs, and argues the trial court engaged in impermissible weighing of evidence
when it granted summ ary judgment as to the amount of contract damages he owed. He
notes that the District supported its summary judgment motion with a claims ledger
prepared by Rehn listing its claim of $ 164,111.28. Although this ledger was
accompanied by the Plan Administr ator's affidavit, he contends this ledger was not
supported by any evidence from medical providers to connect the claims in the ledger
to Fischer's injuries from the motor vehicle accident. On the other hand Fischer claims
he supported his opposition to t he summary judgment motion with his own affidavit
and a spreadsheet referenced in his affidavit. He asserts his affidavit and spreadsheet
dispute the District's assertion that it accrued $164,111.28 in contract damages and
support his claim that only some of the damages claimed by the District were for
medical costs related to the car accident. In particular, he argues that the expenses
incurred on or after April 4, 2016 were unrelated to the car accident and therefore should
not be included in the contra ct damages owed.
The District responds that the superior court properly found Fischer did
not provide sufficient evidence to rebut its evidence because Fischer's "naked
assertion" in his affidavit was not enough to create a genuine issue of material fact . It
also maintains that its summary judgment motion was supported by sufficient evidence
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----------------------- Page 13-----------------------
because the claims were detailed in a ledger and the Plan Administrator's affidavit
adequately supported the $164,111.28 figure.
We conclude the court erred in gra nting the motion for summary judgment
because a "reasonable person could discern a genuine factual dispute on a material
22
issue." Here the parties presented two opposing spreadsheets supported by two
opposing affidavits. Fischer provided a spreadsheet of claims and an affidavit
explaining that he only included the claims before April 4, 2016 because those claims
related to the November 2015 motor vehicle collision and those after April 4, 2016 were
due to an unrelated injury. To the extent that the existence of a separate injury and the
relatedness of certain treatment to the car accident were issues that a layperson such as
Fischer could testify about, his affidavit and spreadsheet raised an issue of material
23
fact. And to the extent expert testimony was necessary to explain the relatedness -
or lack thereof - of certain treatment and damages to the car accident at issue, the
District also failed to provide such evidence in support of its damages figure, and thus
failed to establish its entitlement to judgment. The affidavit from the Plan
Administrator did not address how the District determined that certain medical
treatment and related claims for medical costs were connected to the accident, and the
Plan Administrator lacked personal knowledge of the treatment provided to Fischer and
24
what that treatment did or did not relate to. Because the evidence before the superior
22
See Christensen v. Alaska Sales & Serv., Inc., 335 P.3d 514, 520 (Alaska
2014).
23
Cf. Hoendermis v. Advanced Physical Therapy, Inc., 251 P.3d 346, 352-
54 (Alaska 2011) (concluding there was genuine dispute of material fact because each
party provided sworn factual assertions for each required element and determining issue
would require "weighing the credibility and persuasive strength of the parties ' witnesses
and evidence").
24
See Walton v. Ramos Aasand & Co., 963 P.2d 1042, 1043-45 (Alaska
1998) (affirming grant of summary judgment to moving party because moving party
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----------------------- Page 14-----------------------
court at the summary judgment stage created a genuine issue of material fact about what
treatment and medical costs were associated with the accident, and thus what contract
damages the District was entitled to, it was an error to grant summary judgment on that
25
issue.
CONCLUSION
We AFFIRM the superior court's order granting summary judgment as to
Fischer's breach of contract. We REVERSE the court's separate order granting
summary judgment as to the amount of contract damages the District is entitled to, and
REMAND for proceedings consistent with this opinion.
provided explanations of billing process and work performed along with invoices and
affidavit from person who performed work, and nonmoving party p resented his own
testimony and conclusory assertions).
25
See Wilson v. Pollet, 416 P.2d 381, 384 (Alaska 1966) (holding when
considering motion for summary judgment if there is contradicting evidence "the court
should not attempt to resolve any genuine issue as to credibility"). Fischer also argues
that the court erred in denying his motion for reconsideration; because we reverse and
remand the summary judgment order on contract damages, we do not address Fischer's
claims related to reconsideration.
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