Articles Posted in Business Law

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The Alaska Supreme Court affirmed the appraisal panel’s valuation of Calais Company, Inc. (a closely held corporation), but reversed the superior court’s denial of shareholder Deborah Ivy’s request for post-judgment interest. Ivy sued Calais in 2007 seeking dissolution of the company. The parties settled, and Calais agreed to buy out Ivy’s shares of the company based on a valuation of Calais conducted by a three-member appraisal panel. The appraisers returned an initial valuation in 2009. The superior court approved that valuation, but Calais appealed. The Supreme Court reversed and remanded, concluding that the appraisers had failed to understand their contractually assigned duty. The appraisal panel returned a second valuation in October 2014, which the superior court again approved. Ivy appealed again, arguing: (1) that on remand the superior court improperly instructed the appraisers; (2) that the appraisers made substantive errors in their valuation; and (3) that she was entitled to post-judgment interest. View "Ivy v. Calais Company, Inc." on Justia Law

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Recreational Data Services, Inc. (RDS) attempted to develop and market a smartphone that would come preloaded with outdoor-oriented software. RDS pursued a partnership to advance the project with Trimble Navigation Limited, through one of its divisions, Trimble Mobile Computing Services (Trimble Mobile), and Remington Arms Company. Remington withdrew from the project after about two years of research and review. Several months later Trimble Mobile left the project shortly before a different Trimble division, Trimble Outdoors, launched a similar product. RDS sued Trimble for misrepresentation, breach of contract, and breach of fiduciary duty, alleging that Trimble Mobile intentionally delayed RDS’s project while sharing confidential information about it with Trimble Outdoors. A jury agreed with RDS and awarded it $51.3 million in lost profits. The superior court, however, concluded that RDS had not proven the amount of lost profits with reasonable certainty and granted Trimble a judgment notwithstanding the verdict. RDS appealed, arguing the superior court erroneously conflated the standards of proof for the fact of harm and the amount of damages and asks that the jury verdict be reinstated. After review, the Supreme Court concluded that it was error to grant a judgment notwithstanding the verdict because a reasonable juror could conclude that RDS proved all elements of its claims. Furthermore, the Court held that the superior court was correct to conclude that RDS failed to prove any amount of lost profits to a reasonable certainty as the law requires. The Supreme Court therefore granted remittitur, directing the superior court to make an award of nominal damages and enter judgment for RDS. View "Recreational Data Services, Inc. v. Trimble Navigation Limited" on Justia Law

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The parties in this case divorced. The issue this case presented for the Supreme Court's review centered on the nature of the parties' marital interest in a limited liability company. They eventually agreed that the husband would retain the ownership interest but the wife would receive 25% “of the net commission” from certain sales if they occurred within a limited time after the divorce. When a sale occurred, the parties disagreed on how to define “net commission”: the wife contended that it meant the commission received by the company, but the husband contended that it meant only his share of it. The wife sought discovery in support of her interpretation of the agreement. The husband moved for a protective order, and the parties’ attorneys compromised on some limited production. Although the husband produced information that appeared to satisfy the compromise, the wife filed a motion to compel. The court granted the motion to compel and awarded the wife attorney’s fees for having had to file it. Then, following an evidentiary hearing, the superior court agreed with the wife’s interpretation of the settlement agreement. The husband appealed both the decision on the merits and the award of attorney’s fees on the motion to compel. Because the language of the agreement and relevant extrinsic evidence favored the wife’s interpretation of “net commission,” the Supreme Court affirmed the superior court’s decision of that issue. But because the Court could not find the rationale for the superior court’s award of attorney’s fees to the wife on her motion to compel, it remanded that issue to the superior court for reconsideration. View "Gunn v. Gunn" on Justia Law

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Using three photographs taken from a neighboring subdivision’s marketing materials (including one portraying the subdivision’s stylized entrance sign), a realtor group listed adjacent property for sale on a multiple listing service website. The listing also contained a property appraisal stating that: (1) based on plat-related information, existing legal access to the property might compromise the neighboring subdivision’s gated community perimeter fencing; and (2) based on statements made to the appraiser by employees of the local electric association, the neighboring subdivision’s electric service might be subject to legal issues. The subdivision’s developer then sued the realtors for misappropriation of the photos, trade name infringement, and defamation. The superior court granted summary judgment to the realtors and awarded them enhanced attorney’s fees; the developer appealed. Because there were no material factual disputes and the realtors were entitled to judgment as a matter of law, the Supreme Court affirmed the superior court’s grant of summary judgment. Furthermore, the Court found no abuse of discretion in the superior court's grant of attorney fees, and affirmed that decision too. View "Alaskasland.com, LLC v. Cross" on Justia Law

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Donald Olson and Aimee Moore met in 1995. Between 1995 and 2004 they had business and personal relationships. The business relationship began with Donald training Aimee to fly helicopters in exchange for Aimee’s work for Donald and his businesses. Eventually Aimee managed Donald’s businesses, and they agreed that she would receive a share of business profits. Aimee and Donald disputed the nature of their personal relationship: Aimee characterizes the relationship as a cohabative domestic partnership; Donald asserts the relationship was not a domestic partnership. Aimee terminated the personal relationship in July 2004. In December 2004 Aimee and Donald signed an agreement “related to the deferred compensation owed Aimee . . . for work performed during the period January 1996 through 2004.” In November 2005, after negotiating for more than a year, Aimee and Donald signed a final settlement agreement to end their business relationship. Aimee initiated arbitration against Donald, but not his businesses, in January 2012. Aimee alleged that Donald breached the agreement they had regarding her deferred compensation and certain aspects of managing the business. The matter was submitted to arbitration. The arbitrator ultimately agreed with Donald and his businesses, concluding that the parties’ personal relationship was not a domestic partnership and finding that Donald and the businesses had not materially breached the settlement agreement. The arbitrator ruled in Donald’s and the businesses’ favor and awarded them reasonable prevailing party costs and attorney’s fees. Aimee appealed the arbitrator's decision to the superior court, which affirmed the arbitrator's decision. She appealed to the Supreme Court, who in applying the deferential standards of review, affirmed the superior court's decision confirming the arbitration award. View "Moore v. Olson" on Justia Law

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In 2005 Gordon Timmerman, sole owner of MacDonald Miller Alaska, Inc., agreed to release a claim MacDonald Miller had against Ranes & Shine, LLC, and to pay an additional $18,000 in exchange for equipment Ranes & Shine claimed to own free of any encumbrances. Five years later First National Bank Alaska contacted Timmerman, asserting a security interest in the equipment and requesting its return. First National eventually filed this suit against Timmerman in 2010 to obtain possession of the equipment. Timmerman filed a third-party complaint against Ranes & Shine and its former managing member, Thomas Ranes, asserting breach of warranty of title, misrepresentation, unfair trade practices, and common law contract claims. Ranes & Shine alleged among its other contentions that the applicable statutes of limitation barred Timmerman’s suit because First National’s publicly filed Uniform Commercial Code (UCC) financing statement should have placed Timmerman on inquiry notice of First National’s security interest in the equipment at the time of the agreement in 2005. The superior court disagreed and held Ranes & Shine liable for breach of contract and misrepresentation, while also dismissing the claims asserted against Ranes individually. Ranes & Shine appealed. After review, the Supreme Court affirmed the superior court’s statute of limitations and attorney’s fees and costs rulings, as well as various procedural rulings. But the Court reversed the superior court’s decision to dismiss the misrepresentation claim that Timmerman’s company, MacDonald Miller, had asserted against Ranes in his individual capacity, and remanded for further proceedings on that issue. View "Ranes & Shine, LLC v. MacDonald Miller Alaska, Inc." on Justia Law

Posted in: Business Law, Contracts

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Ryan Air entered into a contractual agreement to sublease an airport lot in Kotzebue. The agreement gave Ryan Air an option to purchase the leasehold and apply its rent payments to the final purchase price. But when Ryan Air attempted to complete the purchase, Bruce Andrew Baker d/b/a Baker Leasing, LLC, the other party to the contract, disputed the outstanding balance and sent Ryan Air a notice of breach. Both parties brought their claims to the superior court. After a trial, the court concluded that Ryan Air did not materially breach the contract and ordered the parties to proceed with the transfer. Baker appealed the order, arguing that the court’s factual findings regarding his breach claims were erroneous, that the conveyance documents contained warranties beyond those he was contractually obligated to provide, and that Ryan Air’s attorney’s fees award was unreasonable. After review, the Supreme Court concluded that the trial court’s findings were not clearly erroneous, that the warranties contained in the conveyance documents did not exceed Baker’s contractual requirements, and that Ryan Air’s attorney’s fees were reasonable. The Court therefore affirmed the superior court’s judgment in most respects. However, the parties agreed that the superior court double-counted some of Ryan Air’s rent payments. The case was remanded to allow the superior court to address that issue. View "Baker v. Ryan Air, Inc." on Justia Law

Posted in: Business Law, Contracts

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A family of business owners obtained a bank loan to invest in a fledgling hotel project. The family later sued the bank, alleging that one of its loan officers fraudulently induced them to invest in the project. This appeal centered on numerous aspects of the resulting superior court proceedings. In particular, the family claimed that the bank committed a fraud upon the court through inaccurate and inconsistent portrayals of the loan officer’s conduct. After review, the Supreme Court concluded that although some testimony offered by the bank may have been misleading, it was not sufficiently egregious as to constitute fraud upon the court. View "Alaska Fur Gallery, Inc. v. First National Bank Alaska" on Justia Law

Posted in: Business Law

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Ronald Brooks was a director and one-third shareholder of W.B.H. Corp., a closely held Alaska corporation formed in 1991. The other two shareholder-directors were Joann Horner and Helen Warner. At the times relevant to this lawsuit, the corporation’s sole asset was a group of contiguous mining claims north of Fairbanks called Bittner Lode. Despite the parties’ agreement to share costs equally, Horner and Warner for a number of years paid Brooks’s share of the annual payments necessary to maintain the mineral leases. This case arose from a dispute over the sale of a corporate asset during the winding up of the corporation. Two of the shareholders successfully bid to purchase the asset; the other shareholder claims they failed to overcome their conflict of interest and prove that the transaction was just and reasonable as to the corporation. Following trial, the superior court found in favor of the interested shareholders, in large part because the disinterested shareholder had voted to approve the transaction with full knowledge of the material facts. The disinterested shareholder (Brooks) appealed. The Supreme Court affirmed, concluding that the superior court did not clearly err in its findings of fact or err in its application of Alaska law and the corporation’s bylaws. View "Brooks v. Horner" on Justia Law

Posted in: Business Law

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The Alaska Workers’ Compensation Board fined an uninsured employers Titan Enterprises, LLC, Titan Topsoil, Inc. and CCO Enterprises (collectively, "Titan," all owned by Todd Christanson) a substantial amount because they had operated for a significant period of time without carrying statutorily required workers’ compensation insurance. On appeal, the Alaska Workers’ Compensation Appeals Commission affirmed part of the Board’s decision, but it reversed the Board on the amount of the fine and remanded the case to the Board for further proceedings. The employer then asked the Commission for an award of attorney’s fees as a successful party on appeal. The State, Division of Workers’ Compensation, which had initiated the Board proceedings, opposed the award on the basis that it, too, had been successful on a significant issue. The Commission awarded the employer full fees of approximately $50,000. The Division petitioned for review of the fee award, and the Supreme Court granted review. Because the Commission failed to consider the Division’s partial success in the appeal, it reversed the Commission’s decision and remanded for further proceedings. View "Alaska Div. of Workers' Comp. v. Titan Enterprises, LLC" on Justia Law