Opinion
Supreme Court Nos. S-13131 / 13142.
September 22, 2010.
Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Stephanie E. Joannides, Judge, Superior Court No. 3AN 96-00502 CI and 3AN 05-13155 CI.
Appearances: John Richard Fitzgerald, Morrison Mahoney LLP, Boston, for Appellant. Michael J. Schneider, Law Offices of Michael J. Schneider, P.C., Anchorage, for Appellee.
Before: Fabe, Winfree, Christen, and Stowers, Justices. [Carpeneti, Chief Justice, not participating.].
NOTICE
Memorandum decisions of this court do not create legal precedent. See Alaska Appellate Rule 214(d). Accordingly, this memorandum decision may not be cited for any proposition of law or as an example of the proper resolution of any issue.
MEMORANDUM OPINION AND JUDGMENT
Entered pursuant to Appellate Rule 214.
1. Leisnoi, Inc. (Leisnoi) and Omar Stratman have a long history of litigation over lands in the Kodiak archipelago. Beginning in the 1970s the United States patented lands to Leisnoi, a Native corporation under the Alaska Native Claims Settlement Act. Stratman had used the lands for recreational purposes and had held grazing leases on them. The parties have been engaged in some form of litigation over the lands intermittently since 1976. 2. In 1996 Leisnoi filed a quiet title action against Stratman over land known as "Termination Point." After the superior court granted summary judgment in favor of Leisnoi, Stratman appealed to this court. In 1998 we vacated the grant of summary judgment, holding that a decertification action Stratman was pursuing in federal court could "affect Leisnoi's title to Termination Point." We remanded the case to the superior court with instructions to enter a stay pending the final resolution of the federal decertification litigation. 3. In 2005 Leisnoi filed a quiet title action against Stratman over all its lands other than Termination Point. Stratman moved to temporarily lift the stay in the action over Termination Point and consolidate the two quiet title actions. The superior court granted the motion to lift the stay and consolidated the cases. While the stay was lifted, Leisnoi moved for summary judgment to quiet title to all the lands involved. Stratman opposed, arguing that his decertification suit was still pending and that our 1998 opinion therefore required the superior court to deny summary judgment and reimpose the stay. The superior court granted Leisnoi's summary judgment motion in 2007, concluding that although the federal decertification action was still pending, "[n]umerous events" that had occurred since our 1998 opinion made it "highly unlikely, if not impossible, that a federal court would cause Leisnoi's land to revert back to the United States."
See Stratman v. Leisnoi, Inc., 969 P.2d 1139, 1139-41 (Alaska 1998).
Id.; 43 U.S.C. §§ 1602-29h (2008).
Stratman, 969 P.2d at 1139-40.
Id. at 1140-41.
Stratman had previously recorded a lis pendens against that land, on the theory that a decertification suit he was pursuing against Leisnoi in federal court could affect Leisnoi's title to the land.
Stratman, 969 P.2d at 1143.
Id.
4. The superior court entered final judgment quieting title in favor of Leisnoi with respect to all the lands in question. It also awarded Leisnoi 20% of "its reasonable, actual attorney's fees" under Civil Rule 82(b)(2), reaffirming earlier conclusions that Stratman was not a public interest litigant and that Leisnoi was not entitled to enhanced fees.
Alaska R. Civ. P. 82(b)(2) provides in relevant part: "In cases in which the prevailing party recovers no money judgment, the court . . . shall award the prevailing party in a case resolved without trial 20 percent of its actual attorney's fees which were necessarily incurred."
5. Only the superior court's award of attorney's fees is currently before us. Leisnoi appeals the superior court's refusal to award enhanced fees; Stratman cross-appeals, arguing the award should be diminished on several theories. 6. In general, we review a superior court's award of attorney's fees for abuse of discretion. A superior court abuses its discretion in awarding attorney's fees under Rule 82 only if "the award is arbitrary, capricious, manifestly unreasonable, or the result of an impermissible motive." For issues involving enhancement of fees under Rule 82(b)(3), we review only "to determine if the . . . court's decision was manifestly unreasonable." We also review a superior court's determination of a litigant's public interest status for the purposes of an attorney's fees award for abuse of discretion. 7. Leisnoi argues that "[u]pon due consideration" of Rule 82(b)(3), "this Court should enhance the standard Rule 82 attorneys fees that the trial court awarded to Leisnoi, Inc." Leisnoi requests an award of 100% of its reasonable, actual attorney's fees. Because the superior court calculated the award under Rule 82(b)(2), its award is "presumptively valid." The superior court was not required to apply the Rule 82(b)(3) factors to adjust its award; as we have noted, "[a]pplication of Rule 82(b)(3) factors is discretionary, not mandatory." We have never held that a superior court's refusal to award enhanced fees was an abuse of discretion, and we decline to do so here.
In 2008 the Ninth Circuit affirmed the federal district court's conclusion that Congress's enactment of the Alaska National Interest Lands Conservation Act, 16 U.S.C. § 3101 (1980), rendered Stratman's federal decertification action moot. Stratman v. Leisnoi, Inc., 545 F.3d 1161, 1172 (9th Cir. 2008). And in 2009 the United States Supreme Court denied Stratman's petition for a writ of certiorari, bringing the decertification case to a close. Stratman v. Salazar, 129 S. Ct. 2861 (2009).
Lakloey, Inc. v. Ballek, 211 P.3d 662, 664 (Alaska 2009) (citing Braun v. Denali Borough, 193 P.3d 719, 726 (Alaska 2008)).
Valdez Fisheries Dev. Ass'n, Inc. v. Alyeska Pipeline Serv., 45 P.3d 657, 672 (Alaska 2002) (citing Power Constructors, Inc. v. Taylor Hintze, 960 P.2d 20, 44 (Alaska 1998)).
Jones v. State, Dep't of Corr., 125 P.3d 343, 350 n. 26 (Alaska 2005) (citing Glamann v. Kirk, 29 P.3d 255, 265-66 (Alaska 2001)).
City of Kotzebue v. State, Dep't of Corr., 166 P.3d 37, 46 (Alaska 2007) (citing Koyukuk River Tribal Task Force on Moose Mgmt. v. Rue, 63 P.3d 1019, 1020 (Alaska 2003)).
Under Rule 82(b)(3) the superior court "may vary" an award if, upon consideration of specific factors, "the court determines a variation is warranted." The listed factors are:
(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.
Valdez Fisheries, 45 P.3d at 672 ("An award that tracks the scheduled fee award of Alaska Civil Rule 82 is presumptively valid." (citing Reid v. Williams, 964 P.2d 453, 460 (Alaska 1998))); see also McGlothlin v. Municipality of Anchorage, 991 P.2d 1273, 1277 (Alaska 1999).
Rhodes v. Erion, 189 P.3d 1051, 1055 (Alaska 2008) (noting the permissive language of Rule 82(b)(3)).
See Williams v. Fagnani, 228 P.3d 71, 78 n. 31 (Alaska 2010) ("[T]his court has never vacated a superior court's decision refusing to enhance fees under Rule 82(b)(3)."); Power Constructors, Inc. v. Taylor Hintze, 960 P.2d 20, 45 (Alaska 1998) ("We have never vacated a trial court's decision refusing to enhance fees under former Rule 82(b)(3).").
8. Leisnoi focuses primarily on the "vexatious or bad faith conduct" factor, Rule 82(b)(3)(G). Leisnoi argues that "Stratman's whole claim of some sort of alleged ability to affect title to Leisnoi's land was a mere sham, a ruse he pursued maliciously and in bad faith." We have repeatedly held that the superior court is "in the best position to determine whether a party's behavior was excessively litigious or in bad faith" for the purposes of attorney's fees awards, and the superior court made no finding of bad faith or vexatious conduct in the present case. Moreover, even if we accepted that Stratman's conduct was vexatious or in bad faith, it would demonstrate at most that the superior court could have, in its discretion, awarded enhanced fees; it would not establish that the superior court's refusal to do so was reversible error. The superior court did not abuse its discretion in declining to enhance Leisnoi's attorney's fees award under Rule 82(b)(3).
Reid, 964 P.2d at 461-62 (holding that the trial court did not abuse its discretion by refusing to award enhanced attorney's fees); Fagnani, 228 P.3d at 77 ("The superior court is in the best position to determine [questions about bad faith and excessive litigation]."); Wickwire v. McFadden, 633 P.2d 278, 281 n. 6 (Alaska 1981) ("The trial court is in the best position to determine [whether a party acted in bad faith for the purposes of enhanced attorney's fees]. . . .").
See Lockhart v. Draper, 209 P.3d 1025, 1031 (Alaska 2009) ("[T]he fact that . . . findings [of vexatious or bad faith conduct] could support a variation does not mean the court abused its discretion in denying enhanced fees."); Gibson v. GEICO Gen. Ins. Co., 153 P.3d 312, 320 (Alaska 2007) ("[W]hile enhanced fees might have been reasonable, we are unable to conclude that it was an abuse of discretion for the court to refuse to award them."); see also Rhodes, 189 P.3d at 1055 ("Application of Rule 82(b)(3) factors is discretionary, not mandatory.").
9. Stratman argues that the superior court abused its discretion in awarding Leisnoi any attorney's fees. He claims that Leisnoi's conduct required the superior court to reduce the presumptive award under Rule 82(b)(3)(K), which permits the superior court to vary an award based on "other equitable factors deemed relevant," citing Leisnoi's "fraud" and "perjury" in "acquir[ing] federal resources." Again, because the superior court calculated the award under Rule 82(b)(2), its award is "presumptively valid." And again, the superior court was not required to apply the Rule 82(b)(3) factors to adjust its award; "[a]pplication of Rule 82(b)(3) factors is discretionary, not mandatory." In any event, the superior court made no findings related to fraud or perjury. The court's refusal to reduce the award based on "other equitable factors" was not an abuse of discretion.
Valdez Fisheries, 45 P.3d at 672.
Rhodes, 189 P.3d at 1055.
10. Stratman also argues that the superior court abused its discretion in determining he was never a public interest litigant and awarding Leisnoi 20% of all its attorney's fees. He argues that he should be exempted from paying the 20% of the "$57,930 of [Leisnoi's] claimed attorney's fees . . . incurred before the September 11, 2003 changes to AS 09.60.010." A non-prevailing party determined to be a "public interest litigant" was, prior to 2003, exempt from paying Rule 82 attorney's fees. A 2003 Amendment to AS 09.60.010 "repeal[ed] the public interest litigant doctrine." But the amendment "applies only to suits filed on or after September 11, 2003." To determine whether a party qualifies as a public interest litigant, we look at four factors, all of which must be satisfied:
See, e.g., Simpson v. Murkowski, 129 P.3d 435, 448 (Alaska 2006).
Alaska Statute 09.60.010(b) now provides:
Except as otherwise provided by statute, a court in this state may not discriminate in the award of attorney fees and costs to or against a party in a civil action or appeal based on the nature of the policy or interest advocated by the party, the number of persons affected by the outcome of the case, whether a governmental entity could be expected to bring or participate in the case, the extent of the party's economic incentive to bring the case, or any combination of these factors.
Alaska R.R. Corp. v. Native Vill. of Eklutna, 142 P.3d 1192, 1202 (Alaska 2006); see also City of Kotzebue v. State, Dep't of Corr., 166 P.3d 37, 46 n. 32 (Alaska 2007).
Alaska R.R. Corp., 142 P.3d at 1202. We note that only the date a claim was filed — not the dates on which fees were incurred — is relevant. Therefore, if we were to conclude that Stratman was a public interest litigant prior to 2003, he would be exempt from all Rule 82 attorney's fees relating to the Termination Point claim, even those incurred after 2003. See id. ("AS 09.60.010(b) applies only to suits filed on or after September 11, 2003." (emphasis added)); see also City of Kotzebue, 166 P.3d at 46 n. 32 ("Because the city filed its claim in this case before the effective date of the new legislation, the claim was governed by the original provisions of Rule 82." (emphasis added)). Because Leisnoi's second quiet title claim was filed in 2005, Stratman would not be exempt from any associated Rule 82 attorney's fees.
City of Kotzebue, 166 P.3d at 46 ("A party seeking public interest litigant status must establish that it meets each of [the] elements." (citing Cabana v. Kenai Peninsula Borough, 21 P.3d 833, 837 (Alaska 2001))).
(1) whether the case is designed to effectuate strong public policies; (2) whether the plaintiff's success will cause numerous people to benefit from the lawsuit; (3) whether only a private party could have been expected to bring the suit; and (4) whether the purported public interest litigant would have sufficient economic incentive to file suit even if the action involved only narrow issues lacking general importance.11. The superior court found that Stratman had "significant economic interests . . . linked to the status of the land," and it determined that Stratman was therefore not a public interest litigant. Stratman argues that he no longer had any "economic interest" after this court's 1992 opinion holding that a previous settlement agreement between Stratman and Leisnoi was not an enforceable contract. Leisnoi argues that Stratman was "trying to obtain Leisnoi's land" for his own benefit, citing excessive settlement demands made by Stratman, the United States government's assertion before the Ninth Circuit that Stratman was "pursuing his own financial interests," an adverse possession claim to some of Leisnoi's land that Stratman made in 2004, testimony by Stratman's ex-wife in a federal administrative proceeding that Stratman pursued the decertification litigation "for [his] financial benefit," and Stratman's removal of sand and gravel from his subsurface estate under Leisnoi's land after 1992. Given these facts, the superior court acted well within its discretion in concluding that Stratman failed to satisfy the economic incentive factor and was therefore not a public interest litigant.
Alaska R.R. Corp., 142 P.3d at 1203 (citing Citizens Coal. for Tort Reform, Inc. v. McAlpine, 810 P.2d 162, 171 (Alaska 1991) (internal quotation marks omitted)).
Leisnoi, Inc. v. Stratman, 835 P.2d 1202, 1211 (Alaska 1992).
See generally Leisnoi, Inc. v. Stratman, 154 F.3d 1062 (9th Cir. 1998).
12. We therefore AFFIRM the superior court's award of 20% of Leisnoi's reasonable, actual attorney's fees.