Moody v. Royal Wolf Lodge ( 2018 )

Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER.
Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts,
303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email
corrections@akcourts.us.
THE SUPREME COURT OF THE STATE OF ALASKA
JEFF MOODY, )
) Supreme Court Nos. S-16713/16733
Appellant and )
Cross-Appellee, ) Superior Court No. 3AN-08-07621 CI
)
v. ) OPINION
)
ROYAL WOLF LODGE, LINDA ) No. 7322 – December 14, 2018
BRANHAM, and CHRIS BRANHAM, )
)
Appellees and )
Cross-Appellants. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Erin B. Marston, Judge.
Appearances: Kenneth W. Legacki, Anchorage, for
Appellant/Cross-Appellee. William M. Bankston and Renee
J. Sheyko, Bankston Gronning O’Hara, P.C., Anchorage, for
Appellees/Cross-Appellants.
Before: Stowers, Chief Justice, Winfree, Maassen, Bolger,
and Carney, Justices.
MAASSEN, Justice.
I. INTRODUCTION
This appeal involves a pilot’s claim for unpaid overtime compensation. The
superior court concluded after a bench trial that the pilot, who flew seasonally for a
remote wilderness lodge, was a professional employee and therefore subject to an
exemption from the overtime requirements of the Alaska Wage and Hour Act (AWHA).
We reversed that decision on appeal, holding that the pilot was not exempt, and
remanded the case for a determination of the overtime hours actually worked.1
On remand the superior court framed the issue as whether the pilot, during
his time at the lodge, was “engaged to wait or waiting to be engaged.” The superior
court applied a multi-factor test and found that the pilot was “waiting to be engaged” and
therefore was not entitled to overtime compensation for hours other than those he spent
actually performing duties for his employer. The court found that the pilot had worked
6.4 hours of unpaid overtime but declined to award liquidated damages, finding that an
exception to the liquidated damages statute applied because the lodge had acted
reasonably and in good faith. The court also declined to award attorney’s fees to the
lodge despite the fact that it had bettered the terms of several offers of judgment.
Both parties appeal. We conclude that the superior court did not err in its
legal analysis when determining whether the pilot was entitled to overtime compensation.
We also affirm the superior court’s decision not to award attorney’s fees to the employer.
But because the superior court made no findings about the lodge’s subjective good faith,
we remand the liquidated damages issue to the superior court for further consideration
of whether the good-faith exception applies.
II. FACTS AND PROCEEDINGS
A. Facts
Linda and Chris Branham owned and operated Royal Wolf Lodge, a fishing
1
Moody v. Royal Wolf Lodge, 339 P.3d 636, 642 (Alaska 2014) (Moody I).
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lodge in Katmai National Park that operated seasonally from June to late September.2
Employees lived there for the season, and because the lodge had no road access they
depended on aircraft for materials and supplies.3
Royal Wolf Lodge employed Jeff Moody as a pilot for six seasons, from
2002 through 2007, to fly the lodge’s de Havilland Beaver aircraft.4 A separate
employment agreement covered each year. In January 2008 the Branhams sent Moody
a letter informing him that he would not be rehired for the 2008 season.
B. Proceedings
1. Trial before Judge Joannides and Moody I
Moody filed a complaint against the Branhams and Royal Wolf Lodge in
May 2008, seeking damages under AWHA for unpaid overtime compensation and
liquidated damages in an equal amount. Superior Court Judge Stephanie E. Joannides
issued a decision in June 2011 following a bench trial, making specific findings about
Moody’s job responsibilities and his other activities while at the lodge. She found that
Moody was “responsible for preparing the plane for flights,” properly loading and
unloading it, flying guests to and from the lodge for fishing, and flying in “supplies and
other materials,” and that he sometimes volunteered for other duties around the lodge.
She also found, however, that the time he spent on tasks “not directly related to” his
duties as a pilot “comprised only a small percentage of his time.” She found that
between flights Moody “was able to visit with other employees and guests while eating,
use the internet, watch movies, do laundry, stay in his room, and take naps,” though she
recognized that the lodge’s remote location meant he had to stay nearby.
2
Id. at 637.
3
Id.
4
Id.
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A determinative issue was whether Moody was a professional employee
exempt from AWHA’s overtime requirements.5 Judge Joannides decided he was and
therefore was not entitled to overtime compensation. She found that he was, however,
entitled to contract damages because his agreed salary was based on a 30-day month and
one day off per week, and it was uncontested that he did not take days off in 2006 or
2007. While awarding no overtime, Judge Joannides awarded Moody unpaid wages for
July 31 and August 31 of 2006 and 2007 and for the extra day he worked every week.
In Moody I we reversed Judge Joannides’s determination that Moody fell
under the professional employee exemption.6 We followed United States Department
of Labor advice and federal cases holding that airline pilots do not meet the definition
of “professional employees” for the purpose of the exemption because their “primary
duty” — piloting an aircraft — does not require specialized academic training.7 But we
affirmed Judge Joannides’s factual findings about the days Moody worked and his
entitlement to contract damages.8 We remanded the case “for further proceedings on
whether Moody in fact worked overtime as defined by AS 23.10.060 and whether he is
entitled to recover compensation for unpaid overtime.”9
2. Remand proceedings before Judge Marston
The case on remand was assigned to Superior Court Judge Erin B. Marston.
Following a four-day bench trial in May 2016, Judge Marston issued a written decision,
5
Id. at 637-38.
6
Id. at 639-42.
7
Id. at 641-42.
8
Id. at 642-43.
9
Id. at 642.
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finding that Moody had worked a total of 6.4 hours of uncompensated overtime. To
reach this conclusion the judge first had to determine whether Moody was “engaged to
wait” — i.e., was entitled to pay while waiting for the lodge to call for his services —
or was “waiting to be engaged” — i.e., was on his own time and not entitled to pay until
called. Judge Marston noted that “parties are permitted to agree on what constitutes
work hours in situations where an employee lives on the work site.” He determined,
however, that the contracts at issue were “unclear and inconsistent” and reflected “no
meeting of the minds” as to job requirements, number of work hours, or hourly rate.
Therefore, in order “[t]o determine whether Mr. Moody was engaged to wait, the court
must determine whether he was permitted to use his time for his own purposes.”
Judge Marston reviewed the factors set out in Owens v. Local No. 169,
Association of Western Pulp & Paper Workers,10 for determining whether an employee
is free to engage in personal activities, and found that Moody’s job responsibilities left
him “free to do whatever he decided to do for much of the day.” The judge found that
“none of the employment agreements between the parties contemplated on[-]call or
standby time[,] . . . there were no policies, written or otherwise, that required any of the
pilots to be on call[,] . . . [and] [t]he 2007 employment agreement specifically states there
is no on[-]call or standby time.” He concluded that because the parties had not agreed
to standby or on-call time, and because “in practice Mr. Moody was free to use his
non[-]flying time for his own purposes, he was not engaged to wait, but rather was
waiting to be engaged.”
10
971 F.2d 347, 350-51 (9th Cir. 1992), recognized in Air Logistics of Alaska,
Inc. v. Throop, 181 P.3d 1084, 1091 (Alaska 2008); see also Hutka v. Sisters of
Providence in Wash., 102 P.3d 947, 958-59 (Alaska 2004) (citing Owens, 971 F.2d at
350) (noting that one factor to consider in determining whether on-call time is
compensable as overtime is employee’s freedom to engage in personal activities).
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Judge Marston next determined the number of hours Moody actually
worked. Finding the employment agreements unhelpful because of their inconsistencies
and ambiguities, the judge found “Moody’s log books to be the most accurate primary
source,” as they “were kept contemporaneously and have indicia of reliability.” Judge
Marston determined how many flight hours Moody logged in 2006 and 2007 and added
some time for related duties, “such as preparing and preflighting the airplane, loading
and unloading passengers, loading and unloading cargo[,] and making supply runs and
errand runs.” He concluded that “[t]o exceed eight hours in a day, [Moody] would have
to have flown at least five and a half hours.” Extrapolating from calendars that in turn
collected information from Moody’s flight logs and Chris Branham’s summaries of work
hours, Judge Marston concluded that “Moody worked overtime hours in 2006 in the
amount of 5.4 hours . . . [and] one hour of overtime in 2007.”
Judge Marston then decided that liquidated damages under AS 23.10.110(a)
were not appropriate because of the statute’s exception for employers who have acted
reasonably and in good faith.11
Royal Wolf Lodge moved for an award of costs and attorney’s fees, citing
AS 23.10.110(f), which allows the court “in an action for unpaid overtime
compensation” to award attorney’s fees to a prevailing defendant who has “made an offer
of judgment to the plaintiff, . . . unless the plaintiff proves to the satisfaction of the court
that the action was both brought and prosecuted in good faith and that the plaintiff had
reasonable grounds for believing that the act or omission was in violation of [AWHA].”
Judge Marston denied the attorney’s fees motion, finding that Moody had “pursued his
legal claim on remand in good faith,” but he awarded Royal Wolf Lodge its costs
11
AS 23.10.110(d).
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because such an award was mandated by Alaska Civil Rule 68 and not precluded by
AWHA.
Both parties appealed. Moody argues that the superior court erred or
abused its discretion in the following ways: (1) by failing to apply the proper
methodology in determining whether Moody was entitled to compensation for unpaid
overtime; (2) by failing to apply the law of the case doctrine; (3) by declining to award
liquidated damages; and (4) by failing to consider the public policy effects of its
decision. Royal Wolf Lodge argues that the superior court erred by not awarding it
attorney’s fees.
III. STANDARD OF REVIEW
Whether a superior court “on remand has correctly applied our mandate is
a question of law which we review de novo,”12 as is “the interpretation of the controlling
statutes and regulations.”13
A “determination regarding subjective good faith is generally factual and
reviewed for clear error,” while a “determination regarding objective reasonableness
‘involves applying the proper interpretation of the [law] to uncontested facts’ ” and is
primarily a legal determination we review de novo.14 “Once it is established that the
superior court did not err in finding clear and convincing evidence of good faith and
12
Beal v. Beal, 209 P.3d 1012, 1016 (Alaska 2009) (quoting Williams v.
Crawford ex rel. Estate of McVey, 47 P.3d 1077, 1079 (Alaska 2002)).
13
Moody I, 339 P.3d at 638.
14
Air Logistics of Alaska, 181 P.3d at 1097 n.57 (quoting Bratt v. County of
Los Angeles, 912 F.2d 1066, 1072 (9th Cir. 1990)).
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reasonableness, the superior court’s decision regarding whether or not to award any level
of liquidated damages is reviewed for abuse of discretion.”15
We review attorney’s fees awards for abuse of discretion.16 “An abuse of
discretion exists if an award is ‘arbitrary, capricious, manifestly unreasonable, or the
result of an improper motive.’ ”17 “The trial court’s application of law in awarding
attorney’s fees is reviewed de novo.”18
IV. DISCUSSION
A. Judge Marston Applied The Correct Methodology In Determining
Whether Moody Was Owed Compensation For Unpaid Overtime.
Moody argues that Judge Marston used the wrong methodology in
determining whether an employee like Moody is entitled to overtime pay. He points to
the relevant federal regulation, 29 C.F.R. § 785.23, which recognizes that “[a]n employee
who resides on his employer’s premises on a permanent basis or for extended periods of
time is not considered as working all the time he is on the premises,” because ordinarily
he is given time to “engage in normal private pursuits” such as “eating, sleeping, [and]
entertaining.” The regulation also recognizes that in such cases it is “difficult to
determine the exact hours worked,” and therefore “any reasonable agreement of the
parties which takes into consideration all of the pertinent facts will be accepted.”19 The
burden is on the employer to prove “plainly and unmistakably” both that (1) there was
15
Id. at 1097.
16
Bachner Co. v. Weed, 315 P.3d 1184, 1189 (Alaska 2013) (quoting Krone
v. State, Dep’t of Health & Soc. Servs., 222 P.3d 250, 252 (Alaska 2009)).
17
Id. (quoting Krone, 222 P.3d at 252).
18
Id. (citing Krone, 222 P.3d at 252).
19
29 C.F.R. § 785.23 (2017).
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an agreement to compensate the employee for overtime work, and (2) “the agreement
was ‘reasonable,’ having taken into account ‘all of the pertinent facts.’ ”20
Moody asserts that there was such an agreement, that both Judge Joannides
and our decision in Moody I recognized the agreement’s existence and reasonableness,
and that Judge Marston erred when he “undid the agreement” on remand. But we
disagree that the factual issues central to Moody’s overtime claim had been established
for remand, and we conclude that Judge Marston applied the correct legal analysis to
Moody’s claim.
1. The decision on remand did not violate the law of the
case.
Moody relies on the law of the case doctrine to argue that Judge Marston
erred on remand by ignoring findings Judge Joannides made in the first trial and we
affirmed in Moody I. “The law of the case doctrine . . . generally ‘prohibits the
reconsideration of issues which have been adjudicated in a previous appeal in the same
case,’ ” unless there are “exceptional circumstances” presenting “clear error constituting
a manifest injustice.”21
Moody asserts that “[Judge] Joannides found that the agreement between
Moody and Royal Wolf [Lodge] under 29 C.F.R. § 785.23, which stated Moody was to
be compensated for 72 hours of work in a six-day workweek, was reasonable” and that
Royal Wolf Lodge has not challenged this finding. He observes that in Moody I we
affirmed Judge Joannides’s decision on all issues other than the applicability of the
20
Leever v. Carson City, 360 F.3d 1014, 1018 (9th Cir. 2004) (quoting
Brigham v. Eugene Water & Elec. Bd., 357 F.3d 931, 941 (9th Cir. 2004)).
21
Beal v. Beal, 209 P.3d 1012, 1016-17 (Alaska 2009) (quoting State,
Commercial Fisheries Entry Comm’n v. Carlson, 65 P.3d 851, 859 & n.52 (Alaska
2003)).
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professional services exemption.22 Because AWHA requires overtime pay for any hours
over 40 in a week,23 he asserts that, following Moody I, his right to overtime pay was
governed by the parties’ reasonable agreement that he would work an additional 32 hours
above the 40-hour maximum. He asserts that all Judge Marston was left to decide on
remand, therefore, was “the proper compensation due [Moody] for [that] 32 hours of
overtime as set forth in the agreement,” as well as “how many more hours Moody was
to be compensated for when he worked the seventh day in a week.”
But Judge Joannides’s finding that the parties’ agreement was “reasonable”
was in the context of her determination that Moody was an exempt professional
employee who was not entitled to overtime pay under AWHA regardless of the number
of hours he was required to work. She specifically declined to find “that the base salary
was for only 40 hours of work,” concluding that “even if the number of hours of work
exceeded 40 hours, Moody would not be entitled to be paid additional funds unless he
worked over 30 days per month and if he did not receive his paid days off.” She
therefore awarded Moody additional base pay for days he worked and for which he had
not been compensated at all (July 31, August 31, and scheduled days off). She notably
did not find that the agreements required Moody to work any particular number of hours.
Her finding on this issue — that the parties’ agreements were reasonable as to the pay
of an exempt employee — cannot substitute for a determination whether the agreements
were reasonable and accounted for “all of the pertinent facts”24 as to a non-exempt
employee.
22
Moody I, 339 P.3d 636, 643-44 (Alaska 2014).
23
AS 23.10.060(b).
24
Leever, 360 F.3d at 1017 (quoting 29 C.F.R. § 785.23).
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Our decision in Moody I stated the superior court’s task on remand: to
conduct “further proceedings on whether Moody in fact worked overtime as defined by
AS 23.10.060 and whether he is entitled to recover compensation for unpaid overtime.”25
These open questions were inconsistent with a decision that Moody was contractually
entitled to 32 hours of overtime pay. In a related footnote we stated: “Royal Wolf
Lodge claims the superior court found that Moody never worked more than 40 hours per
week[, b]ut the superior court merely disclaimed a factual finding on the issue.”26 We
concluded “that this issue remains unresolved.”27 The trial on remand, exploring
“whether Moody in fact worked overtime,” was thus consistent with our view of what
remained to be decided.
2. Judge Marston applied the correct legal test to the
determination of overtime.
“The AWHA requires an employer to pay employees at the overtime rate
of one and one-half times the regular rate for ‘hours worked in excess of eight hours a
day’ or forty hours a week.”28 The starting point for determining whether overtime pay
is due is thus a determination of employee time spent “actually working.”29 Federal
courts have “looked to two predominant factors when dealing with [the] question” of
whether employees’ time is so restricted that they deserve to be compensated for it:
“(1) the degree to which the employee is free to engage in personal activities; and (2) the
25
Moody I, 339 P.3d at 642.
26
Id. at 642 n.38.
27
Id.
28
Air Logistics of Alaska, Inc. v. Throop, 181 P.3d 1084, 1090 (Alaska 2008)
(emphasis in original) (quoting AS 23.10.060(b)).
29
Id.
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agreements between the parties.”30 We adopted this analysis in Hutka v. Sisters of
Providence in Washington.31
When considering the first of these two factors — the employee’s degree
of personal freedom — we consider the following subsidiary factors from the Ninth
Circuit Court of Appeals’ case Owens v. Local No. 169, Association of Western Pulp &
Paper Workers:
(1) whether there was an on-premises living requirement;
(2) whether there were excessive geographical restrictions on
employee’s movements; (3) whether the frequency of calls
was unduly restrictive; (4) whether a fixed time limit for
response was unduly restrictive; (5) whether the on-call
employee could easily trade on-call responsibilities;
(6) whether use of a pager could ease restrictions; and
(7) whether the employee had actually engaged in personal
activities during call-in time.[32]
The “list is illustrative, not exhaustive,” and “[n]o one factor is dispositive.”33
Consideration of the second factor of the two-part analysis — the parties’
agreement — “assists the trier of fact in determining whether the parties characterized
the time spent waiting on-call as actual work,”34 but the agreement is not determinative.35
Contractual provision for “at least some type of compensation for on-call waiting time
30
Id. at 1091 (quoting Owens v. Local No. 169, Ass’n of W. Pulp & Paper
Workers, 971 F.2d 347, 350 (9th Cir. 1992)).
31
102 P.3d 947, 959 (Alaska 2004).
32
Air Logistics of Alaska, 181 P.3d at 1091 (quoting Owens, 971 F.2d at 351).
33
Id.
34
Id. at 1093 (quoting Berry v. County of Sonoma, 30 F.3d 1174, 1180-81
(9th Cir. 1994)).
35
See id. at 1092 n.28.
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may suggest the parties characterize waiting time as work,” in contrast to an agreement
that “employees are to be paid only for time spent actually working, and not merely
waiting to work.”36
Judge Marston properly applied this analytical framework. Consistent with
the two-part analysis we adopted in Hutka, he considered both the impact of the parties’
agreements and the Owens factors relevant to “making a determination as to whether an
employee is free to engage in personal activities.” He discussed the parties’ agreements
first, finding that they were “unclear and inconsistent” and that “the inconsistencies in
the language . . . reflect . . . no meeting of the minds as to” job requirements, number of
hours, or hourly rate. Therefore, “[w]hile parties are permitted to agree on what
constitutes work hours in situations where an employee lives on the work site, such as
Royal Wolf Lodge,” the parties here had not reached such an agreement.
Judge Marston next considered the Owens factors. He found that (1)
Moody “was required to reside on the premises because the job itself was being a pilot
for a remote wilderness fly fishing lodge”; (2) there were no excessive geographic
restrictions on Moody’s mobility, as he was free to hike, fish, and explore on his own
time and to run personal errands when he flew work-related trips to town; (3) the
frequency of calls to work was not unduly restrictive as he usually knew his schedule
well in advance and was rarely called to work on short notice; (4) he was generally not
expected to stay in a particular location, ready to fly; and (5) he “was free to engage in
personal activities during the time he was allegedly on call, and he did so”: socializing
36
Id. at 1093 (quoting Berry, 30 F.3d at 1181).
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with other employees, watching movies, reading, using the internet, and doing “laundry
and other personal chores.”37
Judge Marston then returned to the parties’ agreements. He noted that none
of them “contemplated on[-]call or standby time and there were no policies, written or
otherwise, that required any of the pilots to be on call,” and that one agreement — from
2007 — “specifically states there is no on[-]call or standby time.” He concluded that
because “the parties did not agree to . . . [or] require standby or on[-]call time,” and
because “in practice Mr. Moody was free to use his nonflying time for his own purposes,
he was not engaged to wait, but rather was waiting to be engaged” — in other words, his
time spent waiting was not his employer’s but his own, and he was not entitled to be
compensated for it.38
Judge Marston’s factual findings are not challenged. He appropriately
applied to those findings the multi-factor test identified in Hutka and Owens, reaching
a conclusion that is well supported by the evidence. We see no error.39
37
The court found other Owens factors, “whether the on-call employee could
easily trade on-call responsibilities” and “whether use of a pager could ease restrictions,”
irrelevant given its finding that Moody was generally not on call. Owens, 971 F.2d at
351.
38
In Air Logistics of Alaska, 181 P.3d at 1092, we found that “the isolated and
inaccessible location” of the employer’s premises and “the extended period of time”
employees spent there outweighed other Owens factors favoring the employer. But
unlike here, the disputed hours were compensable overtime because both prongs of the
Hutka analysis — the Owens factors and the employment agreement — favored the
employees. Id. at 1091-94.
39
Moody argues that Judge Marston’s decision is contrary to public policy
because Chris Branham admitted at trial that he failed to accurately report employee
wages to interested federal and state agencies. He also notes Judge Joannides’s finding
(continued...)
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B. Remand Is Necessary To Address The Subjective Good Faith
Element Of Moody’s Liquidated Damages Claim.
Moody next argues that Judge Marston erred when he declined to award
liquidated damages. “An employer who violates the overtime or minimum wage
provisions of the AWHA is usually liable for both unpaid overtime or minimum wage
and an equal amount in liquidated damages.”40 The only exception is when the employer
can show good faith and reasonable grounds for believing it is in compliance; then “the
court may decline to award liquidated damages” or award them in a reduced amount.41
“This provision contains both a subjective element — that the employer acted in good
faith — and an objective element — that the employer reasonably believed it was not
violating AWHA’s overtime provision.”42
Moody asserts that “[t]here was no evidence whatsoever that [Royal Wolf
Lodge] attempted to comply with [AWHA], as mandated by the statute,”43 and
particularly that there was no evidence the lodge “went to the Department of Labor to
39
(...continued)
that the lodge likely terminated him “in part” because of his refusal “to take sides” in
another employee’s wage dispute and to support the lodge in a trooper investigation of
“an illegal bear hunting incident involving Chris Branham.” But Moody provides no
legal analysis explaining why either of these arguments supports his claim to unpaid
overtime compensation.
40
Air Logistics of Alaska, 181 P.3d at 1097; AS 23.10.110(a) (“An employer
who violates a provision of AS 23.10.060 or 23.10.065 is liable to an employee affected
in the amount of unpaid minimum wages, or unpaid overtime compensation, as the case
may be, and, except as provided in (d) of this section, in an additional equal amount as
liquidated damages.”).
41
AS 23.10.110(d) (emphasis added).
42
Air Logistics of Alaska, 181 P.3d at 1097.
43
Emphasis omitted.
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determine whether it was in compliance with [AWHA], [or] that the employer attempted
to take affirmative steps to learn the law.” Royal Wolf Lodge counters that Judge
Marston conducted the proper analysis under the statute and that his finding that the
lodge acted reasonably and in good faith is not clearly erroneous.
The only evidence Judge Marston cited in support of his conclusion that
Royal Wolf Lodge acted reasonably and in good faith was Judge Joannides’s conclusion,
following the first trial, that Moody was an exempt employee. “[T]he closeness of the
legal question” may indeed bear “on the issue of objective reasonableness,” even if the
employer’s interpretation is eventually rejected by the courts.44 But a finding of both
objective reasonableness and subjective good faith requires more: “For example, an
employer who does not take affirmative steps to learn the law will not be able to show
good faith and reasonableness.”45 In both Air Logistics of Alaska 46 and Resurrection Bay
Auto Parts, Inc. v. Alder,47 we discussed the types of evidence relevant to a finding that
the employer acted in subjective good faith: this included contacting the Department of
Labor, seeking a lawyer’s advice, and clearly explaining its policies to its employees.
We recognize that in this case, as Royal Wolf Lodge argues, the record contained
evidence that could be relevant to a finding of subjective good faith. But the lack of
specific findings on the issue inhibits meaningful appellate review.48 We therefore
44
Air Logistics of Alaska, 181 P.3d at 1099.
45
Id. at 1098; see also AS 23.10.110(g) (“Failure to inquire into Alaska law
is not consistent with a claim of good faith under this section.”).
46
181 P.3d at 1097-99.
47
338 P.3d 305, 311 (Alaska 2014).
48
See Petrilla v. Petrilla, 305 P.3d 302, 307 (Alaska 2013) (“We have held
(continued...)
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remand the issue to the superior court to expressly consider whether Royal Wolf Lodge
acted with the subjective good faith required by the exception from the liquidated
damages provision.
C. Judge Marston Did Not Err By Denying Royal Wolf Lodge Attorney’s
Fees.
Under AS 23.10.110(f), a prevailing defendant who “previously made an
offer of judgment to the plaintiff” is entitled to an award of attorney’s fees “unless the
plaintiff proves to the satisfaction of the court that the action was both brought and
prosecuted in good faith and that the plaintiff had reasonable grounds for believing that
the act or omission was in violation of AS 23.10.060.” This statute “allows a defendant
to collect attorney’s fees in an action for unpaid overtime compensation only in the event
of a frivolous or bad faith claim.”49 In its cross-appeal Royal Wolf Lodge argues that
Judge Marston erred by failing to award the lodge its attorney’s fees because the lodge
was the prevailing party, it had made offers of judgment, and Moody had failed “to
prosecute his AWHA claim in good faith and on reasonable grounds . . . during the
second phase of litigation.”50 Royal Wolf Lodge argues that Moody should have
recognized the weakness of his position following the first trial — especially given Judge
Joannides’s extensive findings about his free time during work days — and should have
made some effort to discover and present “new or more detailed evidence in support of
48
(...continued)
on many occasions that the trial court must provide sufficient factual findings to enable
appellate review.”); Olmstead v. Ziegler, 42 P.3d 1102, 1107 (Alaska 2002) (“The trial
court is required to enter sufficiently detailed findings of fact to allow for meaningful
appellate review.”).
49
Diaz v. Silver Bay Logging, Inc., 55 P.3d 732, 737 n.11 (Alaska 2002).
50
Emphasis omitted.
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his AWHA claim” on remand. Royal Wolf Lodge points out that Judge Marston reached
essentially the same factual conclusions following remand as Judge Joannides had
reached at the first trial.
We conclude that Judge Marston did not err in declining to award
attorney’s fees to Royal Wolf Lodge. The judge reasoned that “Moody’s claim that he
was ‘engaged to wait,’ while ultimately a losing one, involved a complex interpretation
of law and fact that merited a full trial on the merits” and that “[r]egardless of a lack of
further discovery on Moody’s part, [he] pursued his legal claim on remand in good
faith.” These findings are supported by the record, including the superior court’s
extensive written findings and legal analysis following trial.51 On these findings, the
court properly concluded that AS 23.10.110(f) did not require an award of fees to Royal
Wolf Lodge.
51
We note the distinction between our remand of the liquidated damages issue
— on the ground that the superior court failed to make specific findings of fact to support
its finding that Royal Wolf Lodge acted with subjective good faith — and our decision
to affirm the superior court’s bare finding that Moody “pursued his legal claim on
remand in good faith.” Whether Royal Wolf Lodge acted in good faith for purposes of
AS 23.10.110(d) relates to its conduct before Moody’s suit was filed, i.e., whether the
lodge’s failure to pay overtime compensation was an “act or omission . . . made in good
faith.” The finding thus depends on evidence submitted by the parties. On the other
hand, whether Moody acted in good faith for purposes of the attorney’s fees provision,
AS 23.10.110(f), relates to his conduct as a litigant, directly observable by the superior
court. We have repeatedly held that “the trial court is in the best position to evaluate a
litigant’s good faith” and are likely to defer to its determination of the issue. Khalsa v.
Chose, 261 P.3d 367, 375 (Alaska 2011); see also Reid v. Williams, 964 P.2d 453, 461­
62 (Alaska 1998) (“The superior court was in the best position to determine whether a
party’s behavior was excessively litigious or in bad faith.”).
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V. CONCLUSION
We REMAND the liquidated damages issue to the superior court for its
consideration of Royal Wolf Lodge’s subjective good faith. In all other respects we
AFFIRM the judgment of the superior court.
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