Opinion
Supreme Court No. S-11478.
November 16, 2005.
Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Peter A. Michalski, Judge. Superior Court No. 3AN-02-6147 Civil.
Traeger Machetanz, Oles Morrison Rinker Baker LLP, Anchorage, for Appellant.
Jeffrey P. Stark, Assistant Attorney General, Anchorage, Gregg D. Renkes, Attorney General, Juneau, for Appellees.
Before: Bryner, Chief Justice, Matthews, Eastaugh, Fabe, and Carpeneti, Justices.
MEMORANDUM OPINION AND JUDGMENT
Entered pursuant to Appellate Rule 214.
In this appeal Jim Psenak Construction challenges the decision of an independent hearing officer adjudicating claims of Psenak and the State arising out of the performance of a contract for the reclamation of an abandoned coal mine pit and spoil pile. The major conclusions of the hearing officer were as follows: (1) the State was not in material breach of its contract at the time that it terminated Psenak for default; (2) the State had adequate grounds to terminate Psenak for default; (3) under AS 36.30.687(a)(1) Psenak forfeited all claims relating to the contract because he made intentional misrepresentations to the State as to the quantities of excavation performed; (4) the State should recover the cost of substitute performance in order to have the contract completed in the sum of $206,886; (5) the State should recover the cost of overpayments that it made to Psenak in the sum of $182,806; and (6) the State should recover liquidated damages in the sum of $87,450.
The commissioner of the Department of Transportation and Public Facilities approved the hearing officer's decision without change. On appeal to the superior court, Judge Peter A. Michalski affirmed the decision of the commissioner.
Judge Michalski's memorandum opinion and judgment states the relevant facts and resolves most of the contentions now made by Psenak on appeal to this court. We agree with Judge Michalski's opinion and set it out at this point.
The superior court opinion has been edited to conform with the formal standards of this court.
MEMORANDUM OPINION AND JUDGMENT
This matter comes before the court on appeal from a determination by the Commissioner of the State of Alaska Department of Transportation and Public Facilities.
The Superior Court has jurisdiction to hear and decide this appeal pursuant to AS 22.10.020(d) (Administrative Appeal) and Alaska Rule of Appellate Procedure 601.
This court, having fully considered the arguments and record on appeal, hereby orders that the decision of the Commissioner is AFFIRMED. The court finds that appellant was properly terminated for default, that AS 36.30.687 (Misrepresentations and fraudulent claims) forfeits all claims appellant has relating to the contract, and that the appellee should recover all costs and damages awarded by the Commissioner.
I. The Issues Presented
The appellant, Jim Psenak Construction ("Psenak"), claimed it was wrongfully terminated for default in its construction contract with appellee, State of Alaska, Department of Transportation and Public Facilities ("State"). Psenak claimed damages arising out of the alleged wrongful termination. The State argued that the termination for default was appropriate and claimed damages against Psenak based on overpayment to Psenak for its performance, liquidated damages, and for the cost of the work Psenak contracted to do, but did not finish. The Commissioner of the Department of Transportation and Public Facilities, adopting the Recommended Decision of the hearing officer in its entirety, ruled in favor of the State. On appeal, Psenak argues that (1) the State was in material breach of the contract at the time of termination, and was therefore barred from terminating Psenak for default, (2) Psenak was not in default at the time the State terminated it, and (3) the hearing officer incorrectly applied AS 36.30.687 (Misrepresentations and fraudulent claims) to forfeit all claims Psenak has relating to the contract.
II. Facts and Proceedings
On March 3, 1998, the State sent out an invitation to bid on a construction project named the North Jones Mine Reclamation Phase III. Psenak bid on the project and was awarded the bid on April 27, 1998.
The construction began by June 18, 1998, and continued with various equipment for over two months before Psenak or the State's representatives understood there was a problem with the way Psenak was proceeding with the work. Sometime in August 1998 Psenak realized that his construction plan was not producing the required design elevations. As soon as Psenak discovered the discrepancy between the slopes he was producing and those dictated by the design elevations, he brought the problem to the attention of the project engineer in late August or early September 1998 who told him to "cut to finish design elevations."
Thereafter, Psenak began recutting the slopes in the excavation portion of the project to meet the design elevations, rather than observing his previous construction plan. Psenak kept no records of the slopes that were recut, the personnel employed to perform the recut, the equipment that was dedicated to the recut, or any other costs related to the accomplishment of the recut.
Sometime in or around September 1999, and after a request from the State for volume calculations, Psenak instructed Eric Simons to accumulate quantities in his volume calculations that Psenak used as a basis for compensation. Psenak never informed Simons of provisions in the contract that were inconsistent with the accumulation, i.e. adding together, of interim survey quantities. Simons subsequently, through his employer Alaska Rim Engineering, submitted to the State volume calculations that were calculated by adding an interim survey calculation from December 1998 by Slana Surveys and Simons' calculation determining the excavation accomplished between the December 1998 survey and the August 1999 survey.
Mr. Simons was a State employee, however when asked by Psenak to calculate volume quantities he was working for Alaska Rim Engineering, another survey firm engaged by Psenak.
Psenak, sometime in or around September 1999, then had these accumulated quantities submitted to the State in a form that would conceal the nature of the quantities and the manner of their calculation. By these actions Psenak intended to and did secure overpayments for quantities of excavation in excess of those for which Psenak was entitled to payment. Such accumulated calculations were submitted to the State without being represented as accumulated quantities on at least three occasions.
In January of 2000 the State advised Psenak it was surprised at the final quantity of excavation Psenak reported and that it intended to have an "independent third party" perform new calculations to check Psenak's final numbers. The State was unable to secure Psenak's agreement to have USKH, another engineering firm, act as an independent surveyor, but still hired USKH to recalculate the quantities produced by Psenak in accordance with the provision on quantity measurement in the contract. Based on USKH's calculations, Psenak was overpaid at least $182,806.00 for 179,222 cubic meters of excavation, which sum was not earned under the terms of the contract.
After some correspondence between the parties, the State finally terminated the contract under Section 108-1.08 of the Standard Specifications for default on August 11, 2000, citing Psenak's failure to return the overpayments made, and Psenak's failure to submit a plan to complete the unfinished work as demanded by the State in a letter dated July 12, 2000. The State, in order to complete the project left unfinished by Psenak, put the remainder of the work out to competitive bid. The State, after the bid process was concluded, contracted to have the work completed for $206,886.00.
Psenak then filed a complaint for wrongful termination of his contract. The Contracting Officer ruled against Psenak and Psenak appealed to the Commissioner of the Department. The Commissioner appointed a hearing officer. After a four week hearing where 25,000 pages of material were entered into evidence, the hearing officer concurred with the procurement officer. In addition the hearing officer determined that Psenak made misrepresentations to the department in violation of AS 36.30.687(a), and all of Psenak's claims were forfeited pursuant to AS 36.30.687(a)(1). The Commissioner adopted, in its entirety, the hearing officer's Recommended Decision thereby denying Psenak's claims and awarding the State damages on their counterclaims to collect overpayments, liquidated damages, and costs of contract completion. This appeal follows.
III. Standard of Review
This appeal raises questions of contract interpretation and statutory construction. See e.g., State Farm Mut. Auto. Ins. Co. v. Lawrence, 26 P.3d 1074, 1076 (Alaska 2001). When the superior court acts as an intermediate court of appeal it substitutes its own judgment for questions of law not involving agency expertise, such as contract interpretation. See Alaska Hous. Fin. Corp. v. Salvucci, 950 P.2d 1116, 1119 (Alaska 1997). The court resolves questions of statutory construction de novo by applying its independent judgment. See Progressive Ins. Co. v. Simmons, 953 P.2d 510, 512 (Alaska 1998) (citing Deal v. Kearney, 851 P.2d 1353, 1356 n. 4 (Alaska 1993)). In doing so, it should "adopt the rule of law that is most persuasive in light of precedent, reason, and policy." Id. (internal quotation marks omitted) (quoting Guin v. Ha, 591 P.2d 1281, 1284 n. 6 (Alaska 1979)).
For questions of fact, however, this court reviews the hearing officer's findings of fact under the substantial evidence test. Quality Asphalt Paving, Inc. v. State, Dept. of Transp. Pub. Facilities, 71 P.3d 865, 870 (Alaska 2003) (citing Estate of Basargin v. State, Commercial Fisheries Entry Comm'n, 31 P.3d 796, 799 (Alaska 2001)). The court will uphold the hearing officer's findings if they are supported by "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Id. at 800.
IV. Termination
Psenak argues that it was improperly terminated for two reasons. First, Psenak argues that it was improperly terminated because the State was in material breach of the contract at the time of the alleged default. Second, Psenak asserts that it was not in default at the time of termination.
a. Was the State in material breach of the contract at the time it terminated Psenak for default?
Psenak argues that it was incorrectly terminated for default because the State was in material breach of the contract at the time of the alleged default. Specifically, Psenak claims the State breached the implied warranty of accuracy, suitability, and constructability of the plans and specifications. Psenak claims this breach arises out of the conflict created by the prepositional phrase in Special Provision 203-3.02 of the Special Provisions. Flowing from this breach, Psenak also argues that the State was in breach for its failure to (1) adequately administer a change and compensate Psenak for significant re-excavation, (2) and give timely and adequate direction to Psenak after the discovery of the design conflict. Thus, because substantially all of Psenak's wrongful termination claims flow from the design conflict, the court must determine whether the conflicting contractual terms mean that the State was in material breach at the time of default termination.
"Part 4, Special Provisions," section of the contract contains Section 203, entitled "Excavation and Embankment." Subsection 203-3.02 provides: " Embankment Construction. Delete paragraphs number 2, 4, 5, 10, 11, 13, and 16. Add the following: Embankments shall be constructed as shown on the plans with no slope being greater than 3:1. Finish grade shall not vary more than 1 meter in 20 meters" (emphasis added). The parties agree that there was an irreconcilable conflict between the design plans and Special Provision 203-3.02. If the embankments were constructed as shown on the plans, it would have produced slopes steeper than 3:1.
The court agrees with the hearing officer's determination that the conflict in Special Provision 203-3.02 is a true conflict, and not an ambiguity. No method of contract interpretation can harmonize the 3:1 limitation with the directive to construct as shown on the plans. However, to decide that the conflict rises to the level of material breach, Psenak must convince the court that the conflicting language somehow injured it.
To reach this conclusion, Psenak suggests that the court read the contract to mean something other than what it says. Specifically, Psenak argues that although Special Provision 203-3.02 is entitled "Embankment Construction," it should be interpreted to apply to the excavation portions of the project as well. This interpretation is essential to Psenak's material breach argument because Psenak's problems arose out of the excavation side of the project, where, to meet design elevations, it had to recut slopes it had already cut, costing it time and money. Based on the delay caused by the recut, Psenak was also assessed liquidated damages. In contrast, Psenak was not required to reconstruct any slopes on the embankment portion and claimed no increased burden on the embankment side resulting from confusion over Special Provision 203-3.02.
For this question of contract interpretation, the court will apply its independent judgment. See Alaska Hous. Fin. Corp. v. Salvucci, 950 P.2d at 1119. "In determining a contract's meaning, `[t]he parties' expectations must be gleaned not only from the contract language, but also from extrinsic evidence.'The words of the contract are nevertheless the most important evidence of intention." K K Recycling, Inc. v. Alaska Gold Co., 80 P.3d 702, 712 (Alaska 2003) (internal quotations omitted) (emphasis added). On this issue the plain words of the contract are clear: any 3:1 slope limitation applies only to the embankment portion of the contract, and thus the excavation side should have been built to the design elevations. After reviewing the record below and considering the parties' briefing, this court adopts the reasoned analysis of the hearing officer's recommended decision that interprets the contract to mean what it says, i.e., that the 3:1 slope limitation/plan elevation conflict only applies to the embankment portion of the project.
See Hearing Officer's Recommended Decision, Conclusions of Law 7-19. This analysis leads to this interpretation for many reasons, including, but not limited to: (1) the consistent distinction drawn between embankment and excavation portions of the project throughout the contract; (2) the avoidance of an interpretation of the contract that would render significant portions of the contract meaningless; and (3) the necessity of ignoring extra-contractual statements as required by both the contract and Alaska case law.
In sum, the State was not in material breach because there was no conflict in the plans and specifications of which Psenak can complain because the plans and specifications were perfectly adequate for the performance of the excavation on the project. The conflict that existed in Special Provision 203-3.02 only applied to the embankment portion of the project and thus caused Psenak no harm.
b. Did the hearing officer correctly find that Psenak was in default when it was terminated?
The State terminated the contract under Section 108-1.08 of the Standard Specifications for default on August 11, 2000, citing Psenak's failure to return overpayments made, and its failure to submit a plan to complete the unfinished work. The hearing officer determined that the State had adequate grounds to terminate Psenak under this section. The hearing officer also determined that Psenak had failed to resume work which had been discontinued after reasonable notice, had become insolvent through no fault of the State, had performed the work unsuitably, had refused to perform anew work which was rejected as unsuitable, and had failed to carry on the work in an acceptable manner. The hearing officer held that even if any of these grounds were not mentioned in the termination notice, this does not invalidate the termination or prohibit the use of any such ground to justify termination.
See id. at Conclusion of Law 28.
The Federal Court of Claims has stated that default termination of a government contract can be a drastic, but still proper contractual sanction:
Default termination is a "drastic sanction," and should be imposed only on the basis of "solid evidence." J.D. Hedin Constr. Co. v. United States, 187 Ct. Cl. 45, 408 F.2d 424, 431 (1969); Sun Cal, Inc. v. United States, 21 Cl. Ct. 31, 39 (1990) (citing Lisbon Contractors, Inc. v. United States, 828 F.2d 759, 765 (Fed. Cir. 1987)). It is a type of forfeiture. De Vito v. United States, 188 Ct. Cl. 979, 413 F.2d 1147, 1153 (1969). Nevertheless, it is well settled that the contracting officer possesses authority to terminate a contract for default, and under the proper circumstances is obligated to exercise his discretion to do so. Schlesinger v. United States, 182 Ct. Cl. 571, 390 F.2d 702, 707-08 (1968).
Mega Const. Co., Inc. v. United States, 29 Fed. Cl. 396, 414 (1993).
In this case, the State had adequate grounds to terminate Psenak for default under 108-1.08 of the contract. Psenak undisputedly failed to prosecute work under the contract and became insolvent.
Psenak argues that to the extent it was (1) in default for failure to prosecute the work and (2) insolvent, these problems were caused by the State, and thus the State is prohibited from terminating Psenak on those grounds. This argument is based on the idea that the State failed to adequately instruct Psenak regarding the 3:1 embankment slope, thus causing Psenak excessive additional costs. Psenak's argument, however, ignores that it is premised on an untenable interpretation of the contract. As described in the previous section, any concerns Psenak had related to the design conflict were not material to Psenak's performance of the contract unless the 3:1 slope limitation applied to both the embankment and excavation portion of the project. Because the limitation only applied to the embankment portions, Psenak cannot complain that the State caused its failure to prosecute the work and its insolvency.
The hearing officer also found that Psenak breached the implied covenant of good faith and fair dealing and intentionally misrepresented the quantities of materials it had excavated in order to secure payments to which it was not entitled. Although these were not the State's stated reasons for default termination, "[a]ny extant reasons supporting a default termination are sufficient to sustain the default, even if not known or discovered until after the decision to terminate for default is made." The termination for default was initially based on Psenak's failure to return overpayments made and for its failure to submit a plan to complete the unfinished work. This court agrees with the hearing officer's determination that the termination was justified, as well, by Psenak's breach of the implied covenant of good faith and fair dealing and its intentional misrepresentations of the quantities of material it had excavated as further described in section V below.
Mega Const. Co., Inc. v. United States., 29 Fed. Cl. 396, 422 (1993) (citing College Point Boat Corp. v. United States, 267 U.S. 12, 15-16, (1925); Pots Unlimited, Ltd. v. United States, 600 F.2d 790, 793 (1979) (citations omitted); Samuel T. Isaac Assocs., Inc. v. United States, 7 Cl. Ct. 255, 258 (1985); Joseph Morton Co. v. United States, 3 Cl. Ct. 120 (1983), aff'd, 757 F.2d 1273 (Fed. Cir. 1985).
V. Application of AS 36.30.687 (a)(1) — Misrepresentations and Fraudulent Claims
Psenak argues against the application of AS 36.30.687(a)(1) to forfeit his claims under the contract for two reasons. First, Psenak argues that it did not make or use any misrepresentations or attempt to practice or commit any frauds in relation to the contract. Psenak argues that the contract did not preclude the use of accumulated quantities to calculate payments, and thus Psenak did nothing wrong in presenting accumulated quantities to the State. Second, Psenak cites a recent Alaska Supreme Court memorandum decision for the proposition that AS 36.30.687(a)(1) requires that any allegedly falsified information must have been material and relied on by the State to justify the hearing officer's forfeiture ruling.
a. Did the hearing officer correctly find that Psenak intentionally misrepresented to the State the quantities of excavation it had performed?
As an initial matter, Psenak does not dispute that it presented volume calculations to the State as accumulated quantities. Thus, this inquiry turns on the contract and what it allows in regard to the accumulation of volume calculations between surveys for determining compensation.
Under the terms of the contract, Psenak was paid based upon the amount of cut or excavation it performed. The method of measurement for determining the amounts of excavation that had been produced was set out specifically in the contract in 109-1.02 of the Standard Specifications and provided that "the average end area method" would be employed.
This specification, on its face, does not appear to forbid the accumulation of quantities. However, the contract also provides that:
The Contractor shall measure quantities for items that are paid for by volume or by area and record the quantities in a format acceptable to the Engineer. . . .
Special Provisions, Section 642-3.01 (emphasis added). This provision shows that when Psenak reported accumulated volume calculations, without reporting them as accumulated, to the State against the State's September 13, 1999 instruction that "[C]alculations should reflect only the total cut and fill to date to avoid prior volume calculations," Psenak knowingly and intentionally misrepresented its work to receive payments to which it was not entitled. The contract, at a minimum, provided the State with the right to request quantity measurements in the form it requested. The State requested calculations that reflected how much excavation had occurred from original ground, not the accumulation of the various interim surveys. Psenak knew this was required but instead falsely reported accumulated quantities such that it would receive payment for the numerous times the material was moved within the cut area.
Psenak's behavior was not accidental or negligent. Mr. Psenak specifically instructed Simons to report accumulated quantities to trick the State into overpaying Psenak. This intent to deceive the State is even more apparent when considering that Psenak directed Eric Simons to accumulate quantities and present them in the same format as their previous surveyors, Slana Surveys, which did not accumulate quantities. Thus, it is clear that the hearing officer correctly found that Psenak intentionally misrepresented the quantities of excavation it had performed.
b. Were Psenak's misrepresentations material and relied on by the State?
Psenak cites the Alaska Supreme Court's Memorandum Opinion and Judgment in Azimi-Tabrizi v. State of Alaska, Dept. of Transportation, 2003 WL 23002625, as the first Alaska Supreme Court decision regarding AS 36.30.687. Psenak cites the case for this statement, "[a]bsent reliance, any misrepresentation that occurred was not material, and does not entitle AMAT to relief." Id. at *10.
There are a number of problems with Psenak's citation of this case. For example, by rule he is not allowed to cite summary decisions of the Alaska Supreme Court. See Alaska Rules of Appellate Procedure 214(d). Such decisions are without precedential effect. See id. But even if Alaska law required reliance to affect a forfeiture of claims under AS 36.30.687, clearly there was reliance in this case. The State relied on Psenak's misrepresentations when it overpaid Psenak. Thus, Psenak's misrepresentations clearly were material and relied upon by the State.
VI. Conclusion
This court, having fully considered the arguments and record on appeal, hereby orders that the decision of the Commissioner is AFFIRMED.
Psenak makes the following arguments to this court on appeal. Our response to each follows the statement of each argument.
"A. The Hearing Officer Committed Reversible Error When He Failed To Consider the Conduct of the Parties in Interpreting the Meaning of Special Provision 203-3.02 Entitled `Embankment Construction.'"Response: The question of the meaning of Special Provision 203-3.02 is discussed in Part IV.a of the opinion of the superior court. We agree with that discussion and add the following observations. The premise of Psenak's argument is that the hearing officer refused to consider evidence of the conduct of the parties that is relevant to the meaning of the contract. This premise is erroneous. The hearing officer considered in detail the evidence of performance that was said to be relevant to what the contract meant and concluded that this evidence did not justify the nonliteral interpretation of the contract that Psenak advocated. The analytical method used by the hearing officer is consistent with our case law. We conclude therefore that this argument has no merit.
See supra pp. 6-9.
See Froines v. Valdez Fisheries Dev. Ass'n, Inc., 75 P.3d 83, 86-89 (Alaska 2003).
"B. ADNR Terminated JPC for Default Improperly As ADNR Was the Cause for JPC's Inability To Fulfill Its Contractual Obligations."Response: Parts IV. a and b and Part V of the superior court's opinion answer this argument.
See supra pp. 6-13. One point not directly addressed in the superior court's opinion bears mention. Psenak argues that the State inappropriately imposed liquidated damages at $550 per day between November 1 and the project winter shutdown on December 9, 1998. It contends that the wrongful withholding of liquidated damages for this period, taken together with the State's nonpayment of amounts due under the contract, made repayment financially impossible. Psenak concludes:
Thus, even if payment was owed, ADNR could not use JPC's failure to pay as a basis for default when ADNR's breach created JPC's inability to repay those sums. "If a contractor can show that improper government actions were the primary or controlling cause of the default and rendered the contractor financially incapable of performing, then the default will be excused." Abcon Assoc., Inc. v. United States, 49 Fed. Cl. 678, 687 (2001).
The superior court's opinion deals with part of this argument by establishing that the State did not improperly fail to pay for work performed by Psenak. Rather, the State overpaid for work that Psenak had falsely claimed that it had done. But the court did not mention Psenak's claim that part of the liquidated damages that were withheld should not have been. The answer to this aspect of the claim is that even if liquidated damages for the winter shutdown period in question should not have been assessed, a point that we do not decide, their assessment has not been shown to have been "the primary or controlling cause of the default" and, given the relatively small amount involved when compared to the overpayments made by the State and the other factors leading to the default, any such claim would be implausible.
"C. The Hearing Officer's Misrepresentation Findings Were Contrary to the Contract, Not Supported by Credible Evidence, in Derogation of Change Order No. 1, and Contradicted by JPC's Post-Hearing Reprocurement Survey Data."Response: Part V of the opinion of the superior court adequately answers this argument.
See supra pp. 11-13.
"D. The Superior Court Abused Its Discretion by Denying JPC's Motion To Supplement the Record as to the ADNR's Excessive Reprocurement Costs and In Awarding Excessive Reprocurement Costs."Response: The hearing officer allowed as reasonable reprocurement costs $206,886. Psenak claims that the reprocurement contract was materially different from the contract that he was to perform. The notice of intent to award the reprocurement contract was dated October 25, 2001. The administrative hearing took place in November and early December 2001. Although the reprocurement contract was not performed until after the administrative hearing, the terms and specifications of the contract were known at the administrative hearing. Whether the reprocurement contract was materially different from the contract Psenak was to perform was an issue at the administrative hearing. Psenak's counsel stated in his opening statement:
But I have to acknowledge that if they rightfully terminated him and had to go out and finish the job, then they're entitled to substantial additional compensation, even though I think you would have to take into consideration that there are modifications in the approach that they used which may cause those numbers to be discounted.
At the administrative hearing the State presented the reprocurement contract documents and testimony that the volumes involved in the reprocured work were essentially the same as those left unfinished by Psenak. Psenak in final argument did not contend that the reprocurement contract was materially different from its contract with the State.
In its motion to supplement the record, Psenak did not distinguish between evidence that was available and could have been presented by it at the administrative hearing, and evidence that only became available after the hearing. It did not claim that the reprocurement contract was not performed according to terms and specifications that were established in the initial reprocurement contract documents. Indeed, it states in its brief before this court that the reprocurement contract itself demonstrated the material variance it claims. Psenak's brief states:
Here the reprocurement contract varies materially from the JPC contract in terms of the tolerances for finished grades. ADNR specifically revised the completion contract's finish grade specification so as to render a significant percentage of JPC's completed work, which was compliant with the finished grade tolerance for JPC's contract, non-compliant for purposes of the reprocurement contract. (Emphasis added.)
Psenak's request to supplement the record with evidence of the performance of the reprocurement contract is somewhat analogous to a motion under Civil Rule 60(b)(2) to set aside a judgment based on newly discovered evidence. To justify relief based on newly discovered evidence the moving party must meet a number of standards including (1) that the evidence must be such as would probably change the result and (2) "must not be merely cumulative." Similarly, we have observed in the context of an administrative review that a superior court's refusal to supplement the record will be regarded as "harmless if the excluded material would not have changed the outcome of the dispute on appeal." Because Psenak did not show that the evidence concerning the performance of the reprocurement contract was materially different from the terms and specifications of the reprocurement contract that were available at the time of the administrative hearing, he has failed to satisfy either the requirement that the evidence would probably have changed the result or the requirement that the evidence must be more than merely cumulative. We conclude therefore that the superior court did not abuse its discretion when it denied Psenak's motion to supplement the record and to conduct an evidentiary hearing.
Montgomery Ward v. Thomas, 394 P.2d 774, 776 (Alaska 1964); see also Sengupta v. University of Alaska, 21 P.3d 1240, 1261 (Alaska 2001).
Alvarez v. Ketchikan Gateway Borough, 28 P.3d 935, 939 (Alaska 2001).
For these reasons the judgment of the superior court is AFFIRMED.