Justia Alaska Supreme Court Opinion Summaries

A former landlord sued two commercial tenants and their law firm, alleging negligent infliction of emotional distress (NIED), malicious prosecution, and abuse of process. The claims arose from prior litigation where the tenants had successfully counterclaimed for damages against the landlord. The landlord claimed that the tenants' actions during the prior litigation caused him emotional distress and were malicious and abusive.In the prior proceedings, the landlord had filed a forcible entry and detainer (FED) action against the tenants, which resulted in the tenants counterclaiming for breach of contract and other damages. The superior court dismissed the landlord's FED claim and some of the tenants' counterclaims but awarded the tenants damages for breach of contract related to property maintenance. The Alaska Supreme Court affirmed this decision.The superior court dismissed the landlord's new claims, taking judicial notice of the prior proceedings without converting the motion to dismiss into a motion for summary judgment. The court ruled that the NIED claim was barred by litigation privilege, the malicious prosecution claim failed because the prior proceedings did not terminate entirely in the landlord's favor, and the abuse of process claim failed because the landlord did not allege an ulterior purpose separate from the litigation process.The Alaska Supreme Court affirmed the superior court's decision. It held that the superior court properly took judicial notice of the prior proceedings and did not need to convert the motion to dismiss. The court agreed that the NIED claim was barred by litigation privilege, the malicious prosecution claim failed due to the lack of favorable termination, and the abuse of process claim failed because the landlord did not allege an ulterior purpose independent from the litigation process. View "Griffith v. Hemphill" on Justia Law

Kaiser-Francis Oil Company (KFOC), a Delaware corporation, and its subsidiary Aurora-KF, LLC, sold Aurora Gas, LLC, an Alaska company, to Rieck Oil, Inc., a Delaware corporation formed by Kay Rieck. The sale included an indemnity guarantee from Deutsche Oel & Gas, S.A. (DOGSA), another company owned by Rieck, to cover obligations under a pre-existing guarantee by George B. Kaiser to Cook Inlet Regional, Inc. (CIRI). When Aurora Gas went bankrupt, CIRI called on Kaiser and KFOC to fulfill the obligations, but DOGSA and Rieck Oil did not indemnify them.KFOC sued Rieck Oil, DOGSA, and Kay Rieck in the Alaska Superior Court, seeking to pierce Rieck Oil’s corporate veil to hold Rieck personally liable. The superior court applied Delaware law, reasoning that most jurisdictions apply the law of the state of incorporation for veil-piercing claims. Under Delaware law, the court found that KFOC failed to prove the necessary element of fraud or injustice to pierce the corporate veil and ruled in favor of Rieck.The Supreme Court of Alaska reviewed the case, focusing on whether Alaska or Delaware law should apply to the veil-piercing claim. The court held that Alaska law applies, as veil-piercing is not a matter of internal corporate affairs but involves the rights of third parties. The court reasoned that Alaska has a more significant interest in the matter, given the involvement of Alaska land and an Alaska Native Corporation. Consequently, the court vacated the superior court’s ruling and remanded the case for further proceedings under Alaska law. View "Kaiser-Francis Oil Company v. Deutsche Oel & Gas, S.A." on Justia Law

The case involves the State of Alaska's statutes that allow local school districts to operate correspondence study programs and provide public funds for educational expenses. Parents of public school students sued the State, arguing that these statutes violated the Alaska Constitution by allowing public funds to be used for private school tuition, which they claimed was unconstitutional.The Superior Court of Alaska ruled that the statutes were facially unconstitutional and invalidated them entirely. The court did not address the narrower question of whether the statutes were unconstitutional when applied to allow public funds to be used for private school tuition. The decision was appealed to the Supreme Court of Alaska.The Supreme Court of Alaska reviewed the case and determined that the Superior Court's ruling went too far. The Supreme Court noted that the statutes allowed for a substantial number of constitutionally valid uses of allotment funds, such as purchasing books, supplies, and other educational materials. The court emphasized that even if using allotment funds for private school tuition were unconstitutional, it would not justify invalidating the entire statutes.The Supreme Court vacated the Superior Court's judgment and remanded the case for further proceedings. The court instructed that the proper parties must be joined, and the Superior Court must first determine whether the statutes actually permit the use of allotment funds for private school tuition before addressing the constitutionality of such use. The Supreme Court did not decide whether using allotment funds for private school tuition is constitutional, leaving that question open for further consideration. View "State of Alaska, Dept. of Education & Early Development v. Alexander" on Justia Law

A group of foster children challenged the Office of Children’s Services (OCS) for using their federal Social Security benefits to reimburse itself for foster care costs. The children claimed this practice violated their due process and equal protection rights under the Alaska Constitution and sought restitution. The Superior Court of Alaska found a due process violation and ordered OCS to notify foster children about its practice regarding Social Security benefits. However, the court rejected the equal protection and restitution claims, deeming them preempted by federal law.The Superior Court held that OCS violated due process by not informing foster children about their Social Security benefits and the potential financial advantages of having a private representative payee. The court ordered OCS to provide notices explaining the concept of a representative payee, the consequences of OCS being the payee, and the possibility of proposing an alternative payee. OCS argued that complying with the notice order would violate federal privacy laws, but the court modified its order to address these concerns.The Supreme Court of Alaska reviewed the case and affirmed the Superior Court’s conclusions. The Supreme Court held that the due process claim and the court’s notice order were not preempted by federal law. The court determined that foster children have a property interest in knowing about their Social Security benefits and the ability to nominate a private payee. The court found that OCS’s systematic practice of using benefits to reimburse itself without notice created a high risk of depriving children of their rights.The Supreme Court also held that the equal protection claim was preempted because it would conflict with federal regulations governing the use of Social Security benefits. The court concluded that OCS’s practice of using benefits for foster care costs was permissible under federal law. Finally, the court rejected the proposed remedies of disgorgement and creating a trust, as they would constitute impermissible attachments on federal benefits and were preempted by federal law. View "State of Alaska, Department of Health and Social Services v. Z. C." on Justia Law

A woman sued her former attorneys for malpractice, alleging they failed to advocate for her interests during mediation, resulting in an unfavorable settlement for her and her business. The superior court granted summary judgment to the attorneys, concluding that the lawsuit was barred by the statute of limitations and denied her motion to amend her complaint.The superior court ruled that the statute of limitations for the malpractice claim had expired, as the woman filed her suit more than three years after her injury occurred. The court also rejected her argument for tolling the limitations period under the continuous representation rule, concluding that her communications with the attorneys did not show continued representation in her personal capacity. Additionally, the court rejected her equitable estoppel argument, reasoning that the alleged conflicts of interest did not raise concerns under the Rules of Professional Conduct.The Supreme Court of the State of Alaska reversed the grant of summary judgment, holding that the continuous representation rule applies to legal malpractice claims, delaying the accrual of the claim until the attorney's representation in the matter ceases. The court found a genuine factual dispute about when the attorneys' representation ended, vacating the superior court's decision and remanding for further proceedings. The court also affirmed the superior court's ruling that the attorneys are not barred by the doctrine of fraudulent estoppel from pleading the statute of limitations defense, as the woman failed to present evidence that her delay in filing suit was in reasonable reliance on the nondisclosure. Finally, the court vacated and remanded the superior court's decision to deny leave to amend the complaint, as the claims were not futile and leave to amend should have been granted. View "Sheldon-Lee v. Birch Horton Bittner, Inc." on Justia Law

A father opposed the petition of his child's foster parent for guardianship. The child, a member of his mother's tribe, had been in the foster parent's care for about two years. The Office of Children's Services (OCS) took custody of the child in 2019 due to domestic violence and drug abuse in the mother's home. The father, living in Arizona at the time, was contacted by OCS after the child was taken into custody. OCS attempted to place the child with the father, but an Arizona home study recommended against it. The child was placed with the foster parent, a relative and tribal member.The superior court granted the foster parent's guardianship petition after an evidentiary hearing, finding it in the child's best interests and that returning the child to the father would likely result in serious emotional damage. The father appealed, arguing that the guardianship was a de facto termination of parental rights and required additional findings and procedural steps.The Alaska Supreme Court remanded the case to the superior court to address whether OCS had made active efforts to prevent the breakup of the family, as required by the Indian Child Welfare Act (ICWA). On remand, the superior court made additional findings on the existing record and reaffirmed the guardianship order.The Alaska Supreme Court reviewed the case and concluded that the superior court did not clearly err or abuse its discretion. The court held that the superior court made the necessary findings under ICWA, including that OCS had made active efforts to prevent the breakup of the family and that guardianship was in the child's best interests. The court also clarified that guardianship proceedings do not require the termination of parental rights and can proceed independently of a Child in Need of Aid (CINA) proceeding. The order appointing the guardian was affirmed. View "In re Protective Proceedings of Macon J." on Justia Law

Paul Grosz was injured while helping his friend Gregory Kisling hang a crucifix in Kisling’s home. Grosz fell from a homemade scaffolding when the wire holding the crucifix broke, resulting in significant injuries including broken ribs, a spinal fracture, and a traumatic brain injury. Grosz sued Kisling for negligence, and the jury awarded Grosz $1.2 million in noneconomic damages but found Kisling only 25% at fault, attributing 75% of the fault to Grosz.The Superior Court of Alaska, Third Judicial District, Anchorage, presided over by Judge Josie Garton, handled the case. After the jury's verdict, Grosz requested the court to determine if his injuries qualified for a higher statutory cap on noneconomic damages due to severe permanent physical impairment or severe disfigurement. The court denied this request, stating it was a jury issue that Grosz had not properly raised during the trial. The court then applied the comparative fault percentages, reducing the $1.2 million award to $300,000 (25% of $1.2 million). The court found this amount was below the $400,000 statutory cap on noneconomic damages and did not reduce it further.The Supreme Court of the State of Alaska reviewed the case. The main issue on appeal was whether the superior court should have first applied the statutory cap on noneconomic damages before apportioning fault. The Supreme Court affirmed the superior court’s decision, holding that the correct sequence is to first allocate fault and then apply the statutory cap if necessary. The court reasoned that this approach respects the jury’s role in determining the actual loss and aligns with legislative intent to cap a defendant’s exposure without further reducing an already capped amount. Thus, Grosz’s recovery of $300,000 was upheld, as it was below the statutory cap. View "Kisling v. Grosz" on Justia Law

A school principal used the school's printer after hours to create a coaster as a retirement gift for a friend. The coaster design contained the School District's official logo but altered the District's motto in a disrespectful manner. A custodian took pictures of the coaster, which were shared on social media, leading to public outrage. The principal left the community the next day. The District proposed to terminate him for incompetence and violating anti-harassment policies. After a brief pretermination hearing, the District terminated the principal. The principal appealed, and the Board upheld the termination following an additional hearing.The principal then appealed to the superior court, which also affirmed his termination. The court found that the District had grounds to terminate the principal due to substantial noncompliance with District rules and regulations and that the community's reaction to the coaster was reasonable. The court also rejected the principal's free speech arguments, stating that his speech was not protected under the First Amendment. The court acknowledged that the pretermination hearing process was flawed but deemed the error harmless due to the subsequent post-termination hearing.The Supreme Court of the State of Alaska reviewed the case. The court held that the Board had a reasonable basis to terminate the principal for incompetency under AS 14.20.170(a)(1) due to his inability to perform his duties effectively after the incident. The court also concluded that the principal's termination did not violate his free speech rights under AS 14.20.095 or the First Amendment. However, the court found that the pretermination hearing process did not provide sufficient due process, as the principal was not informed of his right to call witnesses. The court affirmed the termination but reversed the superior court's decision denying back pay, awarding back pay through the date of the Board's post-termination hearing decision. View "Stirling v. North Slope Borough School District" on Justia Law

A husband and wife divorced after 19 years of marriage, with six children, including four adopted minors. The wife, a nurse practitioner, challenged the superior court's division of marital assets, particularly the valuation of the husband's law practice, which the court found lacked marketable goodwill. She also disputed the treatment of a $75,000 payout as a pre-distribution rather than interim support and the offsetting of adoption subsidies against the husband's child support obligation.The superior court, Third Judicial District, Anchorage, held a four-day custody trial and a five-day property trial. The court awarded 50/50 shared physical custody and divided the marital estate 60/40 in favor of the wife. The court valued the husband's law firm based on its net assets, excluding goodwill, and found the Wasilla office building was not a marital asset. The court also calculated the husband's child support obligation but reduced it to account for the adoption subsidies received by the wife.The Supreme Court of the State of Alaska reviewed the case. It affirmed the superior court's decision, holding that only marketable goodwill may be divided on divorce, and the evidence showed the law firm lacked such goodwill. The court found no error in the superior court's other decisions, including the pre-distribution in lieu of interim spousal support and the temporary adjustment of the child support obligation. The court also upheld the superior court's valuation of the law firm, the classification of the Wasilla office building, and the finding that the law firm had no excess cash. The Supreme Court concluded that the superior court did not abuse its discretion in declining to award interim spousal support, in its treatment of post-separation earnings, or in its decision not to award long-term spousal support, above-guidelines child support, or additional attorney's fees. The property division, including the award of the marital home to the husband, was found to be equitable. View "May v. Petersen" on Justia Law

Seventeen-year-old Josiah Wheeler rented a cabin in Tok, Alaska, owned by Deborah Overly and Terry Summers. Wheeler was found dead in the cabin’s bathtub, and an autopsy revealed he died of acute carbon monoxide poisoning. A deputy fire marshal discovered that a propane water heater in the bathroom had an exhaust flue unconnected to any external venting, causing high levels of carbon monoxide to accumulate when the bathroom door was shut. The cabin was covered under a homeowners insurance policy issued by Garrison Property and Casualty Insurance Company, which included a pollution exclusion clause.Wheeler’s estate and his parents sought an out-of-court settlement with the homeowners, who notified Garrison of the claims. Garrison denied coverage, citing the pollution exclusion clause, and refused to defend the homeowners. The homeowners confessed liability and assigned their right to proceed against Garrison to Wheeler’s estate. The estate then filed suit against Garrison in federal district court, seeking damages and a declaratory ruling that the policy provided coverage. The district court granted summary judgment to Garrison, concluding that the pollution exclusion unambiguously barred coverage for carbon monoxide poisoning.The United States Court of Appeals for the Ninth Circuit certified a question to the Supreme Court of Alaska, asking whether the pollution exclusion in the homeowners insurance policy excluded coverage for claims arising from carbon monoxide exposure. The Supreme Court of Alaska concluded that an insured could reasonably expect coverage for injuries resulting from exposure to carbon monoxide from an improperly installed home appliance. The court noted that the policy’s broad definition of “pollutants” and the specific exclusions for lead paint and asbestos suggested a narrower interpretation of the pollution exclusion. Therefore, the court held that the pollution exclusion did not bar coverage for Wheeler’s death. View "The Estate Wheeler v. Garrison Property and Casualty Insurance Company" on Justia Law