Opinion
Supreme Court No. S-11193.
November 3, 2004.
Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, John Reese, Judge. Superior Court No. 3AN-98-11406 Civil.
William K. Jermain, Sarah E. Josephson, Jermain Dunnagan Owens, Anchorage, for Appellant.
Thomas M. Daniel, Jacob B. Nist, Perkins Coie, LLP, Anchorage, for Appellee.
Before: Bryner, Chief Justice, Matthews, Eastaugh, and Carpeneti, Justices. [Fabe, Justice, not participating.]
MEMORANDUM OPINION AND JUDGMENT
Entered pursuant to Appellate Rule 214.
I. INTRODUCTION
The Alaska Community Colleges' Federation of Teachers, Local 2404 (Union) appeals the superior court's award of attorney's fees to the University of Alaska (University) pursuant to Alaska Civil Rule 82. Because the superior court was well within its discretion in following the Rule 82 schedule and awarding the University twenty percent of its attorney's fees, we affirm.
II. FACTS AND PROCEEDINGS
These parties were previously before this court in University of Alaska v. Alaska Community Colleges' Federation of Teachers, Local 2404. The attorney's fees at issue in this appeal were incurred through litigation concerning an arbitration award against the University. In 1996 the University commissioned a study to identify non-union university employees who were underpaid. As a result of the study, certain non-union employees received pay raises of up to 2.6 percent. The Union and six female faculty members then filed a grievance alleging that the University had discriminated against the women by paying them lower salaries than those given to their male counterparts, and alleging that the decision to exclude union members was a violation of the non-discrimination clause of the collective bargaining agreement. After a hearing, Chancellor Gorsuch denied the Union's grievance, finding that it was not filed within the required thirty days from the time that the employee became aware of the complained-of conduct.
64 P.3d 823 (Alaska 2003).
Id.
Id. at 824.
Id.
Id.
Id.
The Union appealed the Chancellor's denial to Arbitrator George Lehleitner. On September 17, 1998, Lehleitner issued a decision dismissing the claim of gender discrimination but finding that the University did violate the non-discrimination clause of the collective bargaining agreement by excluding union employees from the study and subsequent pay raises. On December 17, 1998, the University filed a petition to vacate or modify the arbitrator's decision in the superior court. The Union then filed a motion to confirm the arbitration award, and the superior court granted this motion and denied the petition to vacate or modify in an opinion dated May 22, 2000. On appeal, this court reversed the arbitration award and remanded to the trial court with instructions to dismiss the grievance.
Id. at 825.
Id.
Id. at 827.
On remand, the University moved for attorney's fees as the prevailing party pursuant to Rule 82. The University listed its actual attorney's fees as $47,847.65 and asked for twenty percent of those fees, or $9,569.53. This motion was supplemented by an affidavit of counsel for the University and with copies of invoices sent to the University from its law firm. The Union opposed the University's motion for attorney's fees, arguing that it would be unfair to impose fees when the Union was forced by its duty of fair representation to defend the arbitration award. The Union also complained that it was impossible to tell if the University's claimed fees were reasonable because it did not disclose the amount charged per hour by each attorney. The University replied by arguing that the Union is not a public interest litigant, and thus does not fit under Rule 82's only public policy exception. The University also supplied a list of each attorney's hourly rate. On July 28, 2003, the superior court entered an order awarding the University $9,569.53 in attorney's fees. The Union now appeals.
III. STANDARD OF REVIEW
This court reviews a trial court's award of attorney's fees for an abuse of discretion. We will reverse an award if it is shown to be manifestly unreasonable, but "awards made pursuant to the schedule in Alaska Civil Rule 82(b) are presumptively correct."
McGlothlin v. Municipality of Anchorage, 991 P.2d 1273, 1277 (Alaska 1999).
Id.
IV. DISCUSSION
A. The Superior Court's Award of $9,569.53 in Attorney's Fees to the University of Alaska Was Not an Abuse of Discretion.
The only issue raised in this appeal is whether the award of attorney's fees under Rule 82 was an abuse of discretion. Superior Court Judge John Reese awarded the University twenty percent of its actual fees incurred in the superior court, which is what is provided for by Rule 82(b)(2). Because an award that follows Rule 82's schedule is presumptively valid, and because we only review an award of attorney's fees for an abuse of discretion, the Union must provide convincing evidence that Judge Reese's award was unreasonable. The Union fails to do so, and accordingly, we affirm.
Civil Rule 82 provides:
(a) Allowance to Prevailing Party. Except as otherwise provided by law or agreed to by the parties, the prevailing party in a civil case shall be awarded attorney's fees calculated under this rule.
(b) Amount of Award.
. . . .
(2) In cases in which the prevailing party recovers no money judgment, the court shall award the prevailing party in a case which goes to trial 30 percent of the prevailing party's reasonable actual attorney's fees which were necessarily incurred, and shall award the prevailing party in a case resolved without trial 20 percent of its actual attorney's fees which were necessarily incurred. The actual fees shall include fees for legal work customarily performed by an attorney but which was delegated to and performed by an investigator, paralegal or law clerk.
(3) The court may vary an attorney's fee award calculated under subparagraph (b)(1) or (2) of this rule if, upon consideration of the factors listed below, the court determines a variation is warranted:
(A) the complexity of the litigation;
(B) the length of trial;
(C) the reasonableness of the attorneys' hourly rates and the number of hours expended;
(D) the reasonableness of the number of attorneys used;
(E) the attorneys' efforts to minimize fees;
(F) the reasonableness of the claims and defenses pursued by each side;
(G) vexatious or bad faith conduct;
(H) the relationship between the amount of work performed and the significance of the matters at stake;
(I) the extent to which a given fee award may be so onerous to the non-prevailing party that it would deter similarly situated litigants from the voluntary use of the courts;
(J) the extent to which the fees incurred by the prevailing party suggest that they had been influenced by considerations apart from the case at bar, such as a desire to discourage claims by others against the prevailing party or its insurer; and
(K) other equitable factors deemed relevant.
McGlothlin, 991 P.2d at 1277.
The Union argues on appeal that the award was unreasonable because the superior court should have reduced the award under subsections (I) and (K) of Rule 82(b)(3). Subsection (I) provides grounds for departing from the Rule 82 schedule when "a given fee award may be so onerous to the non-prevailing party that it would deter similarly situated litigants from the voluntary use of the courts." Subsection (K) is the catch-all provision, which allows trial courts to consider "other equitable factors deemed relevant" in order to depart from the schedule. Although the Union cites subsection (I) in its briefs, it does not argue that the fee award was "so onerous" that it would "deter similarly situated litigants from the voluntary use of the courts." Instead, the Union seems to make almost the opposite argument, stating that because of concerns that it might be liable to the employees who initiated the grievances if it decided not to defend the arbitration award, it was forced to defend the award. This argument has no relevance to deterrence, thus it was not an abuse of discretion for the superior court not to rely on subsection (I).
The Union argues that because of its duty of fair representation to its members it was forced to defend the arbitration award, and thus an award of attorney's fees is unfair in this instance. This is both an argument that Judge Reese should have relied on subsection (K) to depart from the schedule, as well as a public policy argument that unions should not be subject to liability for attorney's fees when they are forced either to litigate or face possible liability for failing to fulfill their duties of fair representation. The University replies that the superior court was not required to depart from the schedule on these grounds under Rule 82, and that the Union was not required to defend this award in order to fulfill its duty of fair representation.
A union owes its members a duty of fair representation. This policy is breached when a union acts towards a member in a manner that is "arbitrary, discriminatory or in bad faith." This court has held that refusing to bring a member's grievance when the union assessed the chance of success on the grievance to be only around ten percent was not a violation of the duty of fair representation. In order to act arbitrarily, unions must act "without any rational basis . . . `simply ignore a meritorious grievance, or handle it in a perfunctory manner.'" Mere negligence on the part of the union with respect to a decisional error is not enough to violate its duties toward its members.
Kollodge v. State, 757 P.2d 1028, 1034 (Alaska 1988) (quoting Vaca v. Sipes, 386 U.S. 171, 177 (1967)).
Id. at 1036.
Id. at 1034 (quoting Peterson v. Kennedy, 771 F.2d 1244, 1254 (9th Cir. 1985)).
Wilson v. Municipality of Anchorage, 977 P.2d 713, 719 (Alaska 1999).
The University argues that the Union could have refused to defend the arbitration decision underlying this appeal because this court found that the decision constituted a "gross error." The Union replies that given the deferential standard applied to arbitration decisions, it would have been irrational for it to refuse to defend an award that had a high chance of being sustained. It is unnecessary for us to address whether the Union was required to defend the award because this issue is irrelevant to an award of schedule fees under Rule 82. Even assuming that the Union was compelled to defend the arbitration award, it does not follow that it was an abuse of discretion for the superior court to award fees against the Union.
This court has never before recognized a blanket public policy exemption from Rule 82, except that for a public interest litigant. In White v. Alaska Insurance Guaranty Association, this court held that "[a]ppellants' argument that equitable considerations militate against requiring them to suffer `still further economic loss' in the form of attorneys' fees is not cognizable in light of the purpose of Rule 82: to compensate partially a prevailing party for costs which he has incurred in litigation." In Moody-Herrera v. State, Department of Natural Resources, Moody argued that in order to effectuate the legislative policies expressed by the state civil rights laws, a party suing under those provisions should not be subject to Rule 82 attorney's fees unless the suit was frivolous, unreasonable, or without foundation. We dismissed that argument, finding that there was no indication that the legislature intended to further its legislative purpose by exempting certain litigants from attorney's fees. Similarly, the Union here argues that the legislative policies of AS 23.40.070 will be undermined if attorney's fees are imposed in this situation. But just as in Moody-Herrera, we are given no evidence to suggest that the legislature intended to exempt unions in this situation from liability for attorney's fees. The fact that the Union might have been compelled to defend this arbitration award would be relevant to a consideration of whether the action was defended in good faith. But in this instance, the superior court awarded only the fees required by Rule 82 and did not enhance the award based on bad faith. Such awards are presumptively reasonable, and the Union has not presented us with any argument that compels a different result.
592 P.2d 367, 370 (Alaska 1979).
967 P.2d 79, 89 (Alaska 1998).
Id. at 90.
AS 23.40.070 provides:
The legislature finds that joint decision-making is the modern way of administering government. If public employees have been granted the right to share in the decision-making process affecting wages and working conditions, they have become more responsive and better able to exchange ideas and information on operations with their administrators. Accordingly, government is made more effective. The legislature further finds that the enactment of positive legislation establishing guidelines for public employment relations is the best way to harness and direct the energies of public employees eager to have a voice in determining their conditions of work, to provide a rational method for dealing with disputes and work stoppages, to strengthen the merit principle where civil service is in effect, and to maintain a favorable political and social environment. The legislature declares that it is the public policy of the state to promote harmonious and cooperative relations between government and its employees and to protect the public by assuring effective and orderly operations of government. These policies are to be effectuated by
(1) recognizing the right of public employees to organize for the purpose of collective bargaining;
(2) requiring public employers to negotiate with and enter into written agreements with employee organizations on matters of wages, hours, and other terms and conditions of employment;
(3) maintaining merit-system principles among public employees.
V. CONCLUSION
The superior court's award of attorney's fees is AFFIRMED.