Pederson v. Arctic Slope Regional Corporation

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,
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THE SUPREME COURT OF THE STATE OF ALASKA
RODNEY S. PEDERSON, )
) Supreme Court No. S-16386
Appellant, )
) Superior Court No. 3AN-14-05525 CI
v. )
) OPINION
ARCTIC SLOPE REGIONAL )
CORPORATION, ) No. 7236 – April 13, 2018
)
Appellee. )
)
Appeal from the Superior Court of the State of Alaska, Third
Judicial District, Anchorage, Paul E. Olson, Judge.
Appearances: Rodney S. Pederson, pro se, Anchorage,
Appellant. James E. Torgerson, Stoel Rives LLP,
Anchorage, and C. Robert Boldt, Kirkland & Ellis LLP, Los
Angeles, California, for Appellee.
Before: Stowers, Chief Justice, Winfree, Maassen, Bolger,
and Carney, Justices.
WINFREE, Justice.
I. INTRODUCTION
A corporate shareholder sought a shareholder list to mail proxy solicitations
for an annual director election. The corporation required a signed confidentiality
agreement in exchange for releasing the list. After obtaining and using the list, the
shareholder later declared the agreement unenforceable, refused to return or destroy the
list, and invited the corporation to file suit. The corporation obliged, seeking to establish
that the shareholder had breached the confidentiality agreement and that the corporation
was not obligated to provide the shareholder access to its confidential information for
two years.
After the superior court refused to continue trial or issue written rulings on
the shareholder’s two pending summary judgment motions — which the court effectively
denied at the start of trial — the shareholder declined to participate in the trial. The court
proceeded with trial, ruled in favor of the corporation, and denied the shareholder’s
subsequent disqualification motion. The shareholder appeals.
Because the superior court did not err in determining the shareholder had
materially breached a valid, enforceable contract and did not err or abuse its discretion
in its pretrial decisions or in denying the post-trial disqualification motion, we affirm
those aspects of the decision. But because the declaratory relief granted by the superior
court regarding the shareholder’s statutory right to seek corporate information no longer
pertains to a live controversy, we vacate it as moot without considering its merits.
II. FACTS AND PROCEEDINGS
A. Facts
Rodney Pederson is an Arctic Slope Regional Corporation (ASRC)
shareholder. Pederson, an attorney, has had disputes with ASRC about both
(1) corporate books and records access requests and (2) materials he has sent ASRC
shareholders in proxy solicitations and other mailings. We decided one such dispute
regarding Pederson’s requests to review certain corporate books and records in Pederson
v. Arctic Slope Regional Corp.1
1
331 P.3d 384 (Alaska 2014).
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In late April 2013 Pederson requested an ASRC shareholder list for
soliciting proxies in that year’s annual directors election. He agreed to “complete and
sign ASRC’s standard shareholder address list request.” A week later Pederson
submitted the standard request form, stating that his purpose was “[t]o distribute a proxy
solicitation to selected ASRC shareholders for the 2013 ASRC annual meeting &
election of [d]irectors.” The form included the following provisions:
I understand that I may, at my own expense, use the services
of a third-party mailing house designated by ASRC who will
have access to the shareholder list. I acknowledge that the
information contained in the list is ASRC proprietary and
confidential information, and may not be (i) disclosed or
disseminated by me to any other party or (ii) reproduced (in
physical or electronic format) or used in any manner by me
except for the above stated purpose.
The form also included the following clause: “I understand that any unauthorized or
improper use of the shareholder records, including this list, will, among other things, be
cause for the Corporation to deny future records requests I may make . . . .”
ASRC also required Pederson to sign a separate confidentiality agreement,
which he did in May, approximately one month before the 2013 annual election. That
agreement included the following provisions:
[I]n consideration of the Recitals and receipt of Confidential
Information and the covenants and conditions herein
contained, the parties agree as follows:
. . . Pederson agrees that the Confidential Information
shall be used solely for the purposes described in the
Inspection Requests. . . .
Consistent with the stated purpose in the Inspection
Requests, if Pederson chooses to copy any Confidential
Information in whole or in part, Pederson agrees to return all
written or electronic copies of the Confidential Information
on or before June 24, 2013, together with a statement signed
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under penalty of perjury that Pederson has returned all copies
of the Confidential Information.
The agreement was limited in scope to information not otherwise part of the public
domain or available to Pederson on a non-confidential basis, and it included the
following clause: “Pederson understands that the Company may use any breach of this
Agreement by Pederson as a basis to deny any future inspection requests.”
Pederson created a spreadsheet from the shareholder list and sent the
information to a commercial printing company that mailed his proxy solicitation to
approximately 6,000 ASRC shareholders. Pederson did not return the shareholder list
by the deadline contained in the confidentiality agreement. In July an ASRC officer sent
Pederson an email requesting he return any copies of the shareholder list in his
possession and comply with all other terms of the confidentiality agreement. Pederson
did not respond.
In October, after submitting another request to inspect and copy ASRC’s
shareholder list, Pederson sent ASRC’s counsel an email asserting that he had spent
about 100 hours inputting the hard copy of the earlier shareholder list into his
spreadsheet and stating:
[T]he electronic version ASRC forced me to produce on my
own [is] my work product, and not the “property” of ASRC.
I am reasonable though, and may be willing to negotiate a
reasonable rate for the work to convert the list, if they want
my work product as opposed to what they provided me.
In another email sent the same day Pederson asserted he had never been “provided a
legible copy of the ‘agreement’ . . . so I could not comply with ‘terms’ that I was not
aware of. Further, it was made clear . . . that I would not be allowed to inspect the list
unless I first signed the ‘agreement’ in the exact form that ASRC demanded.” He
continued, “ASRC was well aware that annual meeting time constraints made it
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impossible for me to object to the highly unreasonable terms . . . or to file a court action
to compel production.” Pederson asserted for the first time that many addresses were
unreadable or intentionally misprinted to sabotage his mailing, and he threatened suit.
In November Pederson sent ASRC’s counsel another email, stating:
[I]f your client thinks they are in such a great position
regarding the “agreement” they forced me to sign to get the
addresses to distribute my proxies, then why don’t they just
sue me? Lets [sic] have a judge decide if the agreement is
enforceable under the circumstances under which my
signature was obtained.
In spring 2014 Pederson used the information to distribute a proxy
solicitation to ASRC shareholders for the 2014 annual director election. Pederson
returned a paper copy of the shareholder list to ASRC in 2015, but never returned any
electronic information he had created.
B. Proceedings
ASRC brought suit in March 2014, primarily seeking: (1) a determination
that Pederson had breached the confidentiality agreement; (2) injunctive relief for the
return of its confidential information; and (3) declaratory judgment that ASRC was not
obligated to provide Pederson access to its confidential information for two years. The
superior court issued a routine pretrial order in May, setting the deadline for dispositive
motions in late June 2015, a trial call in early September 2015, and trial in the middle of
that month.
Pederson filed a summary judgment motion in February 2015. He argued
that there was “no actual controversy or harm” for the court to decide, and that ASRC
had no affirmative right to seek declaratory judgment. ASRC filed an opposition the
following month, pointing to what it contended were a number of factual disputes barring
summary judgment. In June, Pederson was elected as an ASRC director. Late in
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August, a week before the trial call and well beyond the June dispositive motion
deadline, Pederson filed a second summary judgment motion. He argued that
“Pederson’s [recent] election to the Board of Directors of the Plaintiff ASRC and his
return of the ‘confidential’ shareholder list to ASRC render[ed] this action moot.” This
argument referenced Pederson’s recent return of the paper copy of the ASRC shareholder
list; Pederson also stated that he had destroyed all electronic and disc copies of the
shareholder information.
Pederson attended the early September trial call telephonically; ASRC’s
counsel attended in person. ASRC requested “discovery specifically on and limited to
the representations made in support of Mr. Pederson’s new [summary judgment] motion.
We can then . . . decide how to respond . . . .” The court later restated this request to
ensure Pederson understood it: “[ASRC’s counsel] is saying he wants an opportunity to
do some discovery to find out whether all these things are true . . . . And I’m not
speaking for him, but it sounds like the only way there’s some possibility this might
resolve is if they can verify all this information.” The court confirmed Pederson had
heard and understood the request, repeating “[s]o that sounds like do a deposition and
get all their information, . . . they want to make sure that you have the time and ability
to do this.” After Pederson confirmed he had no objection, the court set a deadline for
ASRC’s reply and rescheduled trial for mid-November.
About two weeks later Pederson filed a motion “request[ing] that the court
[deny] ASRC’s request to re-open discovery [to] depose Pederson prior to opposing
Pederson’s Second Motion for Summary Judgment.” Pederson asserted he had not
agreed to re-open discovery at the trial call, he had “heard no request or a motion to
reopen discovery,” he “certainly was NOT asked or properly given an opportunity to
oppose the request,” and he “learned a long time ago not to agree to anything that ASRC
requests.”
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At the end of September the superior court stayed Pederson’s first summary
judgment motion because in his second summary judgment motion he asserted the case
was moot. Pederson moved for reconsideration of the stay less than two weeks later.
Pederson continued refusing to be deposed, and ASRC requested a scheduling
conference for the end of October. Pederson did not attend that scheduling conference,
later explaining he had fallen behind in checking his mail. At the conference ASRC
represented to the court that Pederson had continued to stymie its efforts to take his
deposition; the court reviewed the trial-call transcript and confirmed its understanding
that Pederson had agreed to the discovery. The court gave ASRC the option of moving
to compel discovery or proceeding to trial as planned.
In early November ASRC requested to proceed with trial as scheduled and
the court so ordered. Six days before trial Pederson requested the trial date be continued;
he argued that the court should rule on his two summary judgment motions and that the
parties should be granted time to consider and respond to those rulings before trial
commenced.
On the first trial day Pederson again raised his continuance request,
objecting to trial proceeding before the court ruled on the pending summary judgment
motions. The court denied the continuance, rejecting Pederson’s argument that he had
not agreed to discovery at the earlier trial call. The court noted that the case had been
ready for trial since September and that “there are facts in dispute and summary
judgment would have been denied anyway, frankly.” Pederson objected to the court’s
rulings, informing the court that he was “going to decline to participate in the trial,”
although he did not “see any reason why [ASRC’s counsel] can’t put on his case.”
Despite the court verbally instructing Pederson to remain as a party and witness,
Pederson left the courtroom, and the trial continued without him.
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After the first day of trial the court emailed Pederson an order giving him
“an opportunity to present evidence,” which Pederson allegedly did not receive until
after trial had concluded. ASRC filed an affidavit on the second day of trial stating it had
a courier deliver the order to Pederson’s residence following the first day of trial; when
no one answered, the courier posted the order on the door. Trial continued that day, and
ASRC concluded the presentation of its case.
Over the next month Pederson filed a number of post-trial motions. He
requested reconsideration of the continuance denial and of the order providing an
opportunity to present evidence, requested that the court rule on his summary judgment
motions, and sought disqualification of the superior court judge adjudicating the case.
The court denied all of Pederson’s post-trial motions; in the order denying Pederson’s
request to rule on his summary judgment motions, the court found that it had denied
those motions at trial on factual grounds. The order denying disqualification was
reviewed and affirmed by another superior court judge.
The court issued its findings of fact and conclusions of law in March 2016.
The court ruled that the confidentiality agreement was a valid, enforceable contract and
Pederson had materially breached it; that ASRC was entitled to declaratory judgments
that Pederson had “offered for sale a list of shareholders” (by referring to negotations for
a “reasonable rate” for his “work product” in making the spreadsheets) and “improperly
used” the shareholder list (by using it for the 2014 director elections in addition to the
2013 elections) as those terms are employed in AS 10.06.430(c); and that ASRC was
entitled to injunctive relief regarding the confidential information in Pederson’s
possession, as well as costs and attorney’s fees.
Pederson appeals.
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III. STANDARD OF REVIEW
“We review procedural decisions of the superior court for an abuse of
discretion.”2 “Discovery rulings are also reviewed for abuse of discretion.”3
“Contract interpretation is a question of law subject to de novo review.
When applying the de novo standard of review, we apply our ‘independent judgment to
questions of law, adopting the rule of law most persuasive in light of precedent, reason,
and policy.’ ”4 We likewise review the interpretation of statutes de novo.5
“A judge’s decision that he is actually capable of conducting a fair trial is
reviewed for abuse of discretion. The separate question whether a judge’s participation
in a case would lead reasonable people to question his ability to be fair is a question of
law reviewed de novo.”6
2
Willoya v. State, Dep’t of Corr., 53 P.3d 1115, 1119 (Alaska 2002) (citing
Dougan v. Aurora Elec., Inc., 50 P.3d 789, 793 (Alaska 2002)).
3
Id. (citing Christensen v. NCH Corp., 956 P.2d 468, 473 (Alaska 1998)).
4
ConocoPhillips Alaska, Inc. v. Williams Alaska Petroleum, Inc., 322 P.3d
114, 122 (Alaska 2014) (footnote omitted) (first citing Villars v. Villars, 277 P.3d 763,
768 (Alaska 2012); then quoting Russell ex rel. J.N. v. Virg-In, 258 P.3d 795, 802
(Alaska 2011)).
5
L.D.G., Inc. v. Brown, 211 P.3d 1110, 1118 (Alaska 2009) (citing Alaskans
For Efficient Gov’t, Inc. v. Knowles, 91 P.3d 273, 275 (Alaska 2004)).
6
Heber v. Heber, 330 P.3d 926, 934 (Alaska 2014) (footnote omitted) (first
citing Hymes v. DeRamus, 222 P.3d 874, 880 (Alaska 2010); Phillips v. State, 271 P.3d
457, 459 (Alaska App. 2012); then citing Griswold v. Homer City Council, 310 P.3d 938,
941 (Alaska 2013); Phillips, 271 P.3d at 468).
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IV. DISCUSSION
A. The Superior Court Did Not Abuse Its Discretion By Re-opening
Discovery After Pederson’s Late-Filed Summary Judgment Motion.
Pederson argues the superior court erred by “grant[ing] the Plaintiff’s oral
motion to re-open discovery, long after discovery had closed.” Pederson’s primary
argument is that he had not “heard a motion being made, much less ‘agreed’ to it.” But
the hearing transcript provides clear evidence supporting the superior court’s ruling to
the contrary. The court ensured Pederson could hear and understand the proceedings
throughout the hearing, because Pederson participated telephonically. When ASRC
requested the opportunity to conduct discovery regarding the recently filed second
summary judgment motion, the court expressly repeated to Pederson that ASRC’s
counsel was “saying he wants an opportunity to do some discovery to find out whether
all these things are true.” Moments later the court again confirmed Pederson could hear
and asked if ASRC’s proposal worked for him. Pederson responded affirmatively.
It is unclear from Pederson’s briefing what harm he alleges resulted from
the decision to re-open discovery in this limited fashion. Additional discovery obviously
was necessary: Pederson filed a summary judgment motion well after the deadline for
dispositive motions and about two weeks before the scheduled trial date, claiming events
after the close of discovery had rendered the case moot. Because that claim depended
in part on Pederson’s own assertions about the return or destruction of his copies of
ASRC’s shareholder list, in all forms, ASRC’s counsel asked for “discovery specifically
on and limited to the representations made in support of” Pederson’s motion. The court
granted that request because “it sounds like the only way there’s some possibility this
might resolve is if they can verify all this information.” But Pederson refused to provide
the required deposition, and the court accordingly denied the summary judgment motions
on the ground that facts remained in dispute.
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Pederson seems to argue he was prejudiced because ASRC never had to
respond to his second summary judgment motion as a consequence of the discovery
issue. But the motion was denied on the ground that facts remained in dispute; the
requested deposition could only have helped resolve those disputed facts. The court
would have been well within its discretion to strike the summary judgment motion as
untimely;7 it did not abuse its discretion by re-opening discovery and delaying the trial
— with Pederson’s initial agreement — when the purpose was to facilitate its ability to
rule on Pederson’s late-filed summary judgment motion and potentially resolve the
litigation in Pederson’s favor. As discussed below, Pederson’s later disagreement with
this decision and refusal to cooperate with discovery led directly to the denial of his
summary judgment motion.
B. The Superior Court Did Not Abuse Its Discretion By Denying
Pederson’s Summary Judgment Motions At The Beginning Of Trial.
Pederson argues it was not “proper for the court to proceed to trial without
first ruling on [his] [first] Motion for Summary Judgment,” which he contends would
have “narrow[ed] the issues prior to trial.” Related to this argument, Pederson claims the
court erred by “rely[ing] upon and us[ing] the supposed ‘agreement’ by [Pederson] to
reopen discovery as justification for denying Pederson the benefit of his factual and legal
arguments presented in his two Motions for Summary Judgment.” He asserts the
superior court “ ‘disposed’ of [his] motions for summary judgment by finding that he
‘agreed’ to reopening of discovery” and imposed “the extreme sanction of completely
eliminating, wiping out his motions for summary judgment and the evidence and legal
arguments provided in them from Pederson’s defense.” But Pederson misconstrues the
function and effect of a summary judgment motion.
7
See Prentzel v. State, Dep’t of Pub. Safety, 169 P.3d 573, 593 (Alaska
2007).
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Pederson argues that “[i]t is common practice in Alaska courts for summary
judgment orders to rule on numerous legal and factual issues prior to trial or to resolve
cases completely. The orders routinely dispose of the legal or factual issues decided and
only those remaining are specified and the trial is conducted accordingly.” But courts
do not decide factual issues on summary judgment; they “ascertain what material facts
exist without substantial controversy and what material facts are actually and in good
faith controverted.”8 After Pederson’s second summary judgment motion the superior
court could not “practicabl[y] ascertain what material facts exist[ed] without substantial
controversy”9 because Pederson refused to submit to a deposition that might establish
that consensus.
The court did not fail to consider Pederson’s summary judgment motions,
nor did it dispose of them as a sanction for the discovery issue. At the start of trial the
court stated it had stayed Pederson’s first motion at the September status conference
“because there was no reason to go forward, to have any further discussion or argument
or ruling on the first motion for summary judgment on legal issues because [Pederson’s
second motion for summary judgment] deemed it was moot.” The court then explained:
“The case has been ready for trial since September, and there are facts in dispute and
summary judgment would have been denied anyway, frankly.” By denying Pederson’s
continuance motion and proceeding to trial, any ambiguity in the ruling should have been
made clear.10 Finally, in a post-trial order denying Pederson’s post-trial motion for
8
Alaska R. Civ. P. 56(d); see also Alaska R. Civ. P. 56(c) (“There must also
be served and filed with each motion a memorandum showing that there is no genuine
issue as to any material fact . . . .” (emphasis added)).
9
Alaska R. Civ. P. 56(d).
10
See Bridges v. Banner Health, 201 P.3d 484, 493 (Alaska 2008) (quoting
(continued...)
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decisions on his summary judgment motions, the court “f[ou]nd it [had] denied
Pederson’s [summary judgment] motions at trial on factual grounds.”11
Thus it is clear that the court considered the summary judgment motions
before trial, determined that genuine issues of fact were disputed, and reserved for trial
the opportunity for the parties to resolve those disputes in their favor. The superior court
did not abuse its discretion in handling Pederson’s summary judgment motions, nor did
it eliminate or otherwise deny Pederson the legal defenses contained in those motions.
Pederson had the opportunity to present those defenses at trial, but he chose not to do so.
To the extent Pederson asks us to review the denials of his summary
judgment motions, our case law is clear that “post-trial review of orders denying motions
for summary judgment — at least when the ‘motions are denied on the basis that there
are genuine issues of material fact’ ” — is precluded.12 In short, “the order becomes
unreviewable after a trial on the merits.”13 Accordingly, the superior court’s denials of
Pederson’s summary judgment motions on “factual grounds” are unreviewable.
10
(...continued)
Brandon v. Corr. Corp. of Am., 28 P.3d 269, 274 (Alaska 2001)) (“[A] ruling on one
motion is an implicit denial of another contradictory pending motion.”).
11
See Del Rosario v. Clare, 378 P.3d 380, 383-84 (Alaska 2016) (noting “the
court that entered the original order is in the best position to interpret its own order” and
holding we review court’s “interpretation of its own order for abuse of discretion”).
12
Larson v. Benediktsson, 152 P.3d 1159, 1169 (Alaska 2007) (quoting
Ondrusek v. Murphy, 120 P.3d 1053, 1056 n.2 (Alaska 2005)).
13
See id.
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C. The Superior Court Did Not Abuse Its Discretion By Proceeding With
Trial After Pederson Chose To Leave.
Pederson argues that “[i]t was error and an abuse of discretion to proceed
with trial” and allow ASRC to present its case, witnesses, and “arguments with no
opportunity for [Pederson] to cross examine the witnesses or object to the presentation
of evidence or arguments; basically to allow one side to present its case with no defense
or opportunity for the other side to present a case.” But the superior court provided
Pederson an opportunity to present his case at trial. Pederson voluntarily, on his own
initiative, and against the court’s advice “decline[d] to participate in the trial.” He stated
before leaving the courtroom that he did not “see any reason why [ASRC’s counsel]
can’t put on his case.”
Pederson justifies his decision not to participate on the ground that the court
improperly proceeded to trial without deciding his summary judgment motions. But, as
explained above, the court did not abuse its discretion in handling Pederson’s summary
judgment motions. And it is not an abuse of discretion to proceed with trial when a party
voluntarily is not present.14 The superior court did not abuse its discretion by proceeding
with trial after Pederson chose to depart.
14
We note that a court may go so far as to enter default against a non­
participating party. Alaska R. Civ. P. 55(c)(1) (“[I]f the party fails to appear for trial . . .
the court may proceed ex parte upon any motion for default or default judgment.”); see
also Snyder v. Am. Legion Spenard Post No. 28, 119 P.3d 996, 1001-02 (Alaska 2005)
(“Entry of default would unquestionably have been proper [where defendant did not
appear for trial], for the ‘fails to appear for trial’ language of the rule was specifically
designed to end . . . uncertainty as to a trial court’s power in cases like this.”).
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D. The Superior Court Did Not Err By Determining Pederson Had
Materially Breached A Valid, Enforceable Contract.
1. Pederson received valuable consideration.
After trial the superior court ruled that the confidentiality agreement was
“a valid, enforceable contract.” Pederson argues on appeal that “ASRC gave nothing,
in return for Pederson’s signature, that he was not already entitled to receive, pursuant
to [AS 10.06.430], and that ASRC was [not] already required to provide. Absolutely
nothing was given in consideration.”15 The confidentiality agreement stated that
Pederson’s receipt of the requested information was consideration for his assent to the
agreement’s terms. Although this consideration appears to be facially valid, Pederson
argues that “as a matter of law, ASRC did not have a right to” condition his receipt of the
information on his assent to the confidentiality agreement, making the agreement an
invalid form of consideration.
Alaska Statute 10.06.430 entitles Pederson to the information he requested
and received. But in Pederson v. Arctic Slope Regional Corp. we made clear the right
to that information is not absolute when we held “a corporation may unilaterally demand
a reasonable confidentiality agreement because there is no indication that AS 10.06.430
prohibits such a demand.”16 We explained: “If the shareholder refuses to sign such a
confidentiality agreement, the corporation may then refuse to release confidential
information and either institute a declaratory action seeking a court order containing
15
See AS 10.06.430(a)-(b) (requiring a corporation to maintain “a record of
its shareholders, containing the names and addresses of all shareholders and the number
and class of the shares held by each” and to allow shareholders to inspect and make
copies of that record).
16
331 P.3d 384, 402 n.54 (Alaska 2014).
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reasonable confidentiality protections or await the shareholder’s exercise of legal
options.”17
Regardless whether ASRC would have succeeded in such an action, it had
a right to “challenge the inspectability of the information” or seek in court a “reasonable
protective order[] safeguarding the use and dissemination of sensitive information to
ensure that the information to which a shareholder has a right is used only for the
shareholder’s proper purpose . . . and does not do damage to the company.”18 Forbearing
from exercising those options and delivering the requested information constitute
bargained-for performance and valuable consideration.19
2. The agreement is not unenforceable as a matter of law.
Pederson also asks us to conclude that the confidentiality agreement was
improper because: (1) the requested information was not confidential; (2) the agreement
was overly restrictive; and (3) the legislative history relied upon for the
Pederson holding authorizing a confidentiality agreement does not apply to requests for
the shareholder list.
17
Id. at 402 (footnote omitted) (citing Bank of Heflin v. Miles, 318 So. 2d 697,
699 (Ala. 1975)).
18
Id. at 400-01 (citing 5A WILLIAM MEADE FLETCHER, FLETCHER
CYCLOPEDIA OF THE LAW OF CORPORATIONS §§ 2220, 2255, at 286, 449 (2012); MODEL
BUSINESS CORPORATIONS ACT § 16.04(d); Pershing Square, L.P. v. Ceridian Corp., 923
A.2d 810, 820 (Del. Ch. 2007)).
19
See RESTATEMENT (SECOND) OF CONTRACTS § 71 (AM. LAW INST. 1981)
(“The performance may consist of . . . a forbearance . . . .”); cf. id. at § 73 (“Performance
of a legal duty owed to a promisor which is neither doubtful nor the subject of honest
dispute is not consideration; but a similar performance is consideration if it differs from
what was required by the duty in a way which reflects more than a pretense of bargain.”
(emphasis added)).
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a. The superior court’s finding that the requested
information was confidential is not clearly erroneous.
The superior court found that “[m]aintaining the confidentiality of the
Confidential Information is important to ASRC and its shareholders,” and in support
cited trial testimony to that effect by ASRC officers and employees. The court further
found that Pederson had agreed the requested information was confidential, citing not
only the confidentiality agreement itself — in which Pederson agreed the information
was confidential and he would maintain its confidentiality — but also the initial request
for shareholder access that Pederson voluntarily submitted. In his request form Pederson
“acknowledge[d] that the information contained in the list is ASRC proprietary and
confidential information.” And, in direct contradiction of his argument that the
information should not be considered confidential, Pederson states on appeal that he
“should . . . be held to the requirements and terms of the standard Request for
Shareholder Addresses form that he signed.” Pederson points to no evidence
contradicting the court’s finding that the information was confidential.
Pederson contends the information is not confidential as a matter of law
because “AS 10.06.413 provides shareholders with nearly unfettered access to the
shareholder list” and “this [c]ourt made it apparent [in Pederson] that when another
statute or regulation establishes a clear right to records or information, a corporation
cannot claim that those records are confidential for purposes of demanding a
confidentiality agreement prior to allowing inspection.” But this is an overbroad
interpretation of our holding.
In Pederson we stated that “[i]n particular, it would be difficult for the
Corporation to argue that it has a confidentiality interest in the compensation it pays to
its five most highly compensated officials in light of the mandatory disclosure
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requirements of the pertinent state regulation.”20 The referenced regulation required that
Alaska Native Claims Settlement Act21 corporations include in all proxy solicitations a
statement detailing executive remuneration during the preceding fiscal year.22 That
requirement has important differences from AS 10.06.413. A written statement of five
employees’ remuneration mailed to all shareholders in effect makes that information
public. In contrast, although AS 10.06.413 requires corporations to make a shareholder
list available for shareholder inspection at corporate offices for 20 days prior to
shareholder meetings, the statute says nothing about giving shareholders copies of the
shareholder list. Instead, shareholders seeking copies of the list must submit shareholder
requests under AS 10.06.430. And in Pederson we made clear that under AS 10.06.430
“a corporation may request a confidentiality agreement as a prerequisite to distributing
otherwise-inspectable documents.”23 When copies of the shareholder list are distributed
on a by-request basis only after receipt of shareholder requests containing confidentiality
clauses — which Pederson concedes are appropriate — that information does not enter
the public domain like an annual statement of executive remuneration mailed to all
shareholders. Pederson’s argument that as a matter of law the shareholder list could not
be confidential fails.
b. The agreement was not overly restrictive.
Pederson next argues the agreement was “overly restrictive and would have
prevented [him] from making use of the list efficiently and effectively for his intended
20
331 P.3d at 403 (citing 3 Alaska Administrative Code (AAC)
08.345(b)(2)(A) (2014)).
21
See 43 U.S.C. §§ 161601-29 (2017).
22
3 AAC 08.345(b)(2)(A).
23
331 P.3d at 387.
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purpose.” This argument relies on our Pederson holding that a confidentiality agreement
may be appropriate if “it (1) reasonably defines the scope of what is confidential
information subject to the agreement and (2) contains confidentiality provisions that are
not unreasonably restrictive in light of the shareholder’s proper purpose and the
corporation’s legitimate confidentiality concerns.”24 This argument also fails.
Pederson’s professed purpose in requesting the information was “[t]o
distribute a proxy solicitation to selected ASRC shareholders for the 2013 ASRC annual
meeting & election of [d]irectors.” But Pederson indisputably accomplished that
purpose, because the confidentiality agreement permitted him to make an electronic
spreadsheet to distribute his solicitation. ASRC brought suit for breach not because of
Pederson’s use, but because he refused to comply with his agreement to return all copies
of the information. To the extent Pederson argues that the agreement unreasonably
restricted him from relying on others to help generate a spreadsheet containing the
information, he also asserted to the superior court that he never accepted any offered
assistance, so help apparently was not necessary for him to accomplish his purpose. And
although he argues that “[t]he agreement prohibited showing the list to anyone, which
was impossible given that the printer had to have access,” the agreement in fact permitted
him to use a specific printing company that had a confidentiality agreement with ASRC.
Pederson also argues that “[t]he agreement attempted to classify
information that should not have been considered confidential to shareholders and is
generally freely made available for Pederson’s intended purpose,” apparently in reliance
on our Pederson holding that “it is unreasonable to designate as confidential all
information subject to an inspection request without differentiating between confidential
and non-confidential portions of the requested information or explaining why the
24
Id. at 402.
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corporation has good cause to believe that all of the information sought is confidential.”25
But in Pederson “the proffered confidentiality agreements purported to subject ‘[a]ll’ of
the information to be released to the terms of the confidentiality agreement, without any
attempt to differentiate between confidential and non-confidential information.”26 The
confidentiality agreement here explicitly exempted from its restrictions any information
that was or became “part of the public domain other than as a result of disclosure by
[Pederson] or his agents,” any information Pederson could show was otherwise available
to him on a non-confidential basis, and any information Pederson received from a third
party on a non-confidential basis, “provided that [Pederson], after reasonable inquiry,
ha[d] no reason to believe that the third party [was] otherwise prohibited from
transmitting the information to [him].”27 Contrary to Pederson’s assertions, the
agreement did not “attempt[] to classify information that should not have been
considered confidential to shareholders and is . . . freely available.”
Finally, Pederson argues that “[t]he most onerous and patently unreasonable
provision was that if [he] ‘violated’ any of the terms, ASRC could deny any future
requests.” Pederson affirmatively asserts that the standard shareholder request form —
which he voluntarily submitted when initially making his request — is appropriate and
that he should be bound by its strictures. Yet that request form contains virtually all of
the clauses he contends are unreasonable in the confidentiality agreement, including the
enforcement clause: “I understand that any unauthorized or improper use of the
25
Id.
26
Id. (alteration in original).
27
Had Pederson participated at trial perhaps he could have demonstrated that
any copies he kept contained only information already available to him on a non-
confidential basis. But he elected not to present a case at trial, so we cannot on that basis
rule in his favor.
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shareholder records, including this list, will, among other things, be cause for the
Corporation to deny future records requests . . . .”
Although such relief initially was sought in the complaint, ASRC did not
obtain any prospective judicial relief against Pederson based on the contract provision.
ASRC obtained judgment that Pederson had materially breached the confidentiality
agreement, injunctive relief requiring Pederson to return shareholder list documents, and
declaratory judgment that Pederson had “offered for sale a list of shareholders” and
“improperly used” the shareholder list as those terms are employed in AS 10.06.430.28
We do not know whether ASRC will seek to enforce its putative contract remedy despite
the shareholder rights established in AS 10.06.430. ASRC did not seek a declaratory
judgment that, based on Pederson’s breach of the confidentiality agreement, ASRC could
deny any further records requests under AS 10.06.430. If Pederson makes a further
AS 10.06.430 records request, ASRC will have the options set out in Pederson: “either
institute a declaratory action seeking a court order containing reasonable confidentiality
protections or await the shareholder’s exercise of legal options.”29
c. The Pederson holding is not dependent on legislative
history.
Pederson argues the legislative history that “this [c]ourt relied upon in
Pederson for authorizing the right to a confidentiality agreement in the books and
records of account context” does not apply to requests for the shareholder list. Pederson
refers to a Pederson footnote stating, in reference to reasonable confidentiality
28
See AS 10.06.430(c) (providing “a defense to an action for penalties”
brought for denying shareholder access to books and records if the person suing has in
the preceding two years “offered for sale a list of shareholders” or “improperly used
information secured through a prior examination of the . . . record of shareholders”).
29
Pederson, 331 P.3d at 402 (footnote omitted) (citing Bank of Heflin v.
Miles, 318 So. 2d 697, 699 (Ala. 1975)).
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agreements, “the legislative history indicates that the legislature may have intended to
give corporations just such a tool.”30 Regardless of the merits of Pederson’s analysis of
the legislative history’s distinction between shareholder lists and books and records of
account, our holding in Pederson was not dependent on that history. We instead
concluded “that a corporation may unilaterally demand a reasonable confidentiality
agreement because there is no indication that AS 10.06.430 prohibits such a demand.”31
There is no suggestion in Pederson that confidentiality agreements should not be
available when the request is for a shareholder list.
3. Pederson failed to establish affirmative defenses at trial.
Throughout Pederson’s appeal briefs he raises arguments pertaining to
affirmative defenses against contract enforceability, such as duress, unconscionability,
fraud, and impossibility, as well as to ASRC’s alleged breach of the agreement. He
argues, for instance: “the ‘agreement’ . . . was certainly not the result of fair and arms-
length negotiations . . . . Pederson was forced to sign the ‘agreement’ because he would
not have been allowed to inspect and copy the list unless he signed”; “[t]he agreement
contained terms that Pederson could not reasonably comply with to accomplish his
purpose”; and “[t]he list provided . . . was so darkened grey in the background . . . that
Pederson’s copies were nearly unreadable . . . . ASRC had an obligation under the statute
to provide a list usable for Pederson’s purpose and intentionally failed to do so.”
ASRC responds that “the trial record contains no evidence to support any
of these assertions” and that Pederson points to none; it contends “the court’s findings
and the admitted evidence directly contradict them.” (Emphasis in original.) The
30
Id. at 402 n.54 (citing Legislative Counsel, Sectional Analysis of Proposed
Code Revision Bills Revising the Corporations Code, 15th Leg., 1st Sess. at 88 (May 7,
1987)).
31
Id.
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superior court found Pederson received and signed a legible copy of the confidentiality
agreement without proposing any changes to it, received a legible copy of the requested
information, used that information for his stated purpose, and, as ASRC summarizes on
appeal, found “that only after receiving those benefits did [Pederson] make a post hoc
claim that the agreement was somehow invalid.” The superior court’s conclusion that
“[t]he [a]greement is a valid, enforceable contract” is supported by evidence presented
at trial. Pederson points to no evidence supporting his allegations, and we will not
entertain his fact-based claims that the agreement is unenforceable when he chose to
walk out of the courtroom rather than attempt to establish those facts at trial.
E. Whether ASRC Is Entitled To An AS 10.06.430(c) Defense In An
Action For Penalties Is Moot.
In its complaint ASRC requested declaratory judgment that under
AS 10.06.430 it was “not required to provide Pederson with access to its shareholder
records” as a consequence of his breach of the confidentiality agreement. But at trial
ASRC sought more specific declaratory relief, that Pederson had “offered for sale” and
“improperly used” the shareholder list he received as those terms are used in
AS 10.06.430(c).32 The superior court granted ASRC the requested relief, finding — and
32
The statute provides:
An officer or agent who, or a corporation that, refuses to
allow a shareholder, or the agent or attorney of the
shareholder, to examine and make copies from its books and
records of account, minutes, and record of shareholders, for
a proper purpose, is liable to the shareholder for a penalty in
the amount of 10 percent of the value of the shares owned by
the shareholder or $5,000, whichever is greater, in addition
to other damages or remedy given the shareholder by law. It
is a defense to an action for penalties under this section that
the person suing has within two years sold or offered for sale
(continued...)
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entering declaratory judgment — that Pederson “ ‘improperly used’ the Confidential
Information in spring 2014 for purposes other than those he agreed to in the Agreement,”
and “ ‘offered for sale a list of shareholders’ of ASRC” as those terms are used in
AS 10.06.430(c).
The parties present countervailing arguments regarding the validity of the
court’s rulings. But these issues are moot.33 Pederson’s “offer[] for sale” email was sent
in October 2013, more than two years before the court’s decision was issued, at which
point it could no longer provide ASRC a defense to an action for penalties under
AS 10.06.430(c). The spring 2014 proxy mailing was possibly still a defense to an
action for penalties when the court issued its decision, but that no longer is the case. We
have no indication that Pederson has again sued ASRC for violation and penalties under
AS 10.06.430(c); a Courtview search reveals no such pending litigation. Given that the
court’s declaratory judgment no longer can provide ASRC a defense to an action for
32
(...continued)
a list of shareholders of the corporation or any other
corporation or has aided or abetted a person in procuring a
list of shareholders for this purpose, or has improperly used
information secured through a prior examination of the books
and records of account, minutes, or record of shareholders of
the corporation or any other corporation, or was not acting in
good faith or for a proper purpose in making the person's
demand.
AS 10.06.430(c).
33
See Ahtna Tene Nene v. State, Dep’t of Fish & Game, 288 P.3d 452, 457
(Alaska 2012) (citing Ulmer v. Alaska Rest. & Beverage Ass’n, 33 P.3d 773, 776,
(Alaska 2001) (“We have previously recognized that we must be especially careful while
reviewing requests for a declaratory judgment because those cases may easily become
advisory opinions if the controversy is moot.”)); Cochrane v. State, 629 P.2d 512, 512
(Alaska 1980) (Mem.) (dismissing sua sponte petition for bail review as moot).
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penalties under AS 10.06.430(c), whether Pederson “offered for sale” or “improperly
used” the shareholder list as contemplated by the statute is now a moot issue;34 we
therefore vacate the superior court’s declaratory judgments on these points.35
34
Ahtna Tene Nene, 288 P.3d at 457 (quoting Ulmer, 33 P.3d at 776) (“[A]
case is moot if the party bringing the action would not be entitled to any relief even if it
prevails.”).
35
We nonetheless note some concerns about the declaratory judgments.
ASRC originally sought a “[d]eclar[ation] that ASRC has no obligation to
provide Pederson access to ASRC’s Confidential Information for two years.” But
AS 10.06.430(c) provides only “a defense to an action for penalties,” not an unfettered
license to refuse future proper records requests. See also AS 10.06.430(d) (“Nothing in
this chapter impairs the power of a court, upon proof by a shareholder of a demand
properly made and for a proper purpose, to compel the production for examination by
the shareholder of the . . . record of shareholders of a corporation.”). And it is not readily
apparent that ASRC was entitled to the defense AS 10.06.430(c) provides.
ASRC asserted that Pederson’s demand for compensation in exchange for
turning over the spreadsheet constituted an “offer for sale” of the shareholder list.
Pederson’s compensation demand may have been both unnecessarily hostile and
frivolous given the clear language of the confidentiality agreement. But we are skeptical
that his behavior falls within the purview of a provision that appears intended to deter
the sale of confidential information to third parties in competition with or otherwise
adverse to a corporation.
Nor do we see evidence in the record that Pederson “improperly used” the
confidential information. The only “improper[] use” identified in the superior court’s
order was the spring 2014 proxy solicitation; that mailing was not among the purposes
Pederson listed in his access request, which covered only solicitations for the 2013
election. But a proxy solicitation is not an “improper[] use” under AS 10.06.430(c); it
is the archetypal purpose of shareholder access requests. ASRC and the superior court
appear to have mistakenly conflated a contract violation with a statutory violation.
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F. There Was No Error In The Denial of Pederson’s Disqualification
Motion.
1. Actual bias
Pederson argues the superior court “exhibited bias against [him] or
partiality in favor of [ASRC] or [ASRC’s] counsel,” citing unsubstantiated allegations
of partiality and collusion. “A judicial officer must disqualify himself if he ‘feels that,
for any reason, a fair and impartial decision cannot be given.’ ”36 We review for abuse
of discretion the superior court’s denial of Pederson’s disqualification motion on bias
grounds.37
Pederson cannot rely solely on the court’s adverse rulings as evidence of
bias; he must point to specific words or actions showing the court was partial.38
Pederson otherwise must show the court “formed an opinion of [him] from extrajudicial
sources, resulting in an opinion other than on the merits.”39 He has not made these
showings.
As discussed earlier the court’s rulings are supported by the record, and
Pederson demonstrates no extrajudicial source of bias. Although Pederson claims
“[e]very single decision and anything requiring discretion of any kind went in favor of
[ASRC],” “the fact that the [superior court] frequently ruled against [Pederson] does not,
36
Heber v. Heber, 330 P.3d 926, 933 (Alaska 2014) (quoting
AS 22.20.020(a)(9)).
37
Id. at 934; see also Snider v. Snider, 357 P.3d 1180, 1184 (Alaska 2015).
38
See Williams v. Williams, 252 P.3d 998, 1010 (Alaska 2011).
39
Id.
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by itself, demonstrate that recusal was required.”40 Disqualification “was never intended
to enable a discontented litigant to oust a judge because of adverse rulings made,” and
“[m]ere evidence that a judge has exercised his judicial discretion in a particular way is
not sufficient to require disqualification.”41 The baseless allegations Pederson advances
do not suggest the court’s interactions with Pederson were influenced by anything other
than “the facts adduced [and] the events occurring at trial,” and they were not “so
extreme as to display clear inability to render fair judgment.”42 Pederson’s bias
allegations have no merit, and the superior court did not abuse its discretion in declining
to disqualify itself.
2. Appearance of bias
Pederson also claims recusal was required because the superior court’s
alleged advocacy on behalf of ASRC gave rise to a reasonable appearance of
impartiality. “[W]hether [the superior court]’s participation in a case would lead
reasonable people to question [its] ability to be fair is a question of law reviewed de
novo,”43 and requires “a ‘greater showing’ . . . for recusal.”44 We conclude Pederson
does not make that “greater showing” because he does not present — and the record does
not reveal — evidence to substantiate this claim.
40
Patterson v. Cox, 323 P.3d 1118, 1123 (Alaska 2014).
41
Luker v. Sykes, 357 P.3d 1191, 1199 (Alaska 2015) (alteration in original)
(quoting Sagers v. Sackinger, 318 P.3d 860, 867 (Alaska 2014)).
42
See Hanson v. Hanson, 36 P.3d 1181, 1184 (Alaska 2001) (quoting Liteky
v. United States, 510 U.S. 540, 551 (1994)).
43
Heber v. Heber, 330 P.3d 926, 934 (Alaska 2014); see also Snider v.
Snider, 357 P.3d 1180, 1184 (Alaska 2015).
44
Patterson, 323 P.3d at 1123 (quoting Greenway v. Heathcott, 294 P.3d
1056, 1063 (Alaska 2013)).
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The “advocacy” Pederson cites in support of his appearance of impropriety
claim includes the superior court’s recounting of Pederson’s agreement to participate in
limited discovery at the September trial call, the court’s discussion with ASRC at the
October status conference scheduled to address Pederson’s refusal to participate in
discovery, which Pederson did not attend, and the court’s advice to Pederson that as a
named party and witness he needed to be present at trial. Pederson accuses “[t]he
[superior] court [of having] absolutely no concern for protecting the rights of the
defendant to be represented during the trial [when it advised Pederson to remain at trial
due to his status as a party and witness]; only to get an additional factual basis for [its]
impending ruling” in ASRC’s favor.
Contrary to Pederson’s characterizations, the superior court took affirmative
measures to ensure Pederson — an attorney — understood the ramifications of his
actions: (1) the court confirmed Pederson’s assent to reopen limited discovery at the
September trial call; (2) the court informed Pederson at the start of trial that as a party
and witness he needed to be present; and (3) once Pederson walked out of trial, the court
emailed an order giving Pederson an opportunity to present evidence at trial the
following day. We conclude that the court’s actions would not cause reasonable people
to doubt the court’s ability and willingness to be fair.45
V. CONCLUSION
The superior court’s declaratory judgments regarding AS 10.06.430(c) are
VACATED as moot, but its decision is AFFIRMED in all other respects.
45
Cf. Olivit v. City &Borough of Juneau, 171 P.3d 1137, 1147 (Alaska 2007)
(noting superior court’s “exemplary efforts in instructing and advising” pro se litigant
on how to proceed in analysis when determining court was not biased in granting
summary judgment).
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