Madonna v. Tamarack Air, Ltd.

Notice: This opinion is subject to correction before publication in the P ACIFIC R EPORTER .
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
JAMES A. MADONNA, )
) Supreme Court No. S-14406
Appellant, )
) Superior Court No. 4FA-10-02202 CI
v. )
) OPINION
TAMARACK AIR, LTD., )
) No. 6774 – April 12, 2013
Appellee. )
)
Appeal from the Superior Court of the State of Alaska,
Fourth Judicial District, Fairbanks, Robert B. Downes, Judge.
Appearances: Thomas R. Wickwire, Fairbanks, for
Appellant. Alfred Clayton, Jr., Bliss, Wilkens & Clayton,
Anchorage, for Appellee.
Before: Fabe, Chief Justice, Winfree, Stowers, and Maassen,
Justices. [Carpeneti, Justice, not participating.]
FABE, Chief Justice.
I. INTRODUCTION
Tamarack Air, Ltd. negligently damaged James Madonna’s airplane while
it was on Tamarack’s airfield after it had been in Tamarack’s shop for routine
maintenance. Tamarack offered to fix the plane, but Madonna refused that offer.
Instead, he elected to ship the plane to Wyoming and had the plane repaired at the
original factory. Tamarack argued that Madonna had failed to mitigate his damages and
refused to compensate Madonna for the full cost of these repairs. A jury awarded
Madonna most, but not all, of the cost of having the plane repaired out of state.
Madonna now argues that the trial court erred by refusing to let him present several other
claims for damages related to the accident. But we find no error and therefore affirm the
trial court in all respects.
II. FACTS AND PROCEEDINGS
James Madonna owns a two-seat fabric-covered airplane called an Aviat
Husky. Airplanes need regular repair, and Madonna orally contracted with Tamarack
Air, Ltd. to perform annual inspections and maintenance on his plane. Tamarack
regularly serviced Madonna’s plane for several years, until, in 2009, while the plane was
on Tamarack’s airfield following inspection, a Tamarack employee accidentally towed
the Husky into two other planes and damaged it.
Vicky Domke, owner of Tamarack, called Madonna to tell him about the
accident. A few days later, Madonna inspected the damage and drafted a letter outlining
his expectation that Tamarack would be responsible for organizing and conducting
repairs on the aircraft. Soon after delivering this letter to Tamarack, Madonna received
a reply from Allstate Insurance Company, Tamarack’s insurer, informing Madonna that
Allstate would pay for the repairs at a shop of his choice, the reasonable cost of
alternative transportation, and any loss of value to the aircraft. Allstate’s letter also
indicated that Madonna was responsible for having these repairs done and mitigating his
damages.
Madonna asked Domke for an estimate of the damage, and Madonna and
Domke, together with another local mechanic, Steve Conatser, met to discuss the
necessary repairs. Domke presented Madonna with details of the necessary repairs,
including a list of parts and labor. Domke thought that most of the work could be done
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at Tamarack but she recognized that the plane would have to be flown to Conatser’s shop
for painting and fabric repair. Domke estimated that the needed repairs would cost about
$20,000, although that estimate was open-ended because she could not be certain about
the extent of the damage until repairs were underway.
Madonna was not satisfied with Domke’s repair plan. He worried that
Tamarack was “going to patch this thing together, give it a[n] inferior paint job and [that
he] was going to get the plane returned in a less than desirable condition.” Madonna
never gave Domke permission to make the suggested repairs.
Instead, Madonna made arrangements to repair the plane on his own. He
solicited repair estimates from three local shops. He consulted a knowledgeable friend
for advice. And he finally decided to dismantle the plane and ship it back to the Aviat
factory in Wyoming, where it could be rebuilt and repaired. Although the cost of parts
and labor was about the same for repair at the factory as local repair, Madonna had to
pay much more to have the plane transported to and from Wyoming. Madonna paid to
have the Husky disassembled, crated, and shipped to Wyoming; hired a pilot to fly to
Wyoming and then fly the Husky back to Alaska; bought insurance for the shipment to
Wyoming and the pilot’s flight back; and installed in the Husky a special transponder,
which was required to make the flight over Canada. All told, Madonna paid more than
$50,000 to have his aircraft repaired. Tamarack refused to pay this amount, Madonna
sued, and the parties went to trial.
At trial, Tamarack conceded liability for the accident but argued that
Madonna had chosen an unreasonably expensive course of repair and thus had failed to
mitigate his damages. Madonna presented evidence that only the factory had the
necessary equipment (called “jigs”) to remedy any twisting of the wings, which can be
dangerous in flight. Tamarack presented contrary evidence that several mechanics in
Fairbanks had the skills necessary to make satisfactory repairs. While Madonna claimed
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$50,909 in damages for the cost of repairs, the jury awarded Madonna $43,878 in
damages. It also awarded $5,000 for the cost of chartering a flight Madonna had hoped
to make in his Husky. The trial judge awarded 3.75% prejudgment interest on the award,
as well as attorney’s fees and costs.
Madonna now challenges the award on a number of grounds. He claims
that the trial court made seven errors: failure to allow presentation to the jury of a claim
for breach of contract; failure to allow presentation of a claim for punitive damages;
failure to allow questioning of Domke regarding whether she had received a letter
revealing his plan to ship the Husky to Wyoming; denial of Madonna’s claims for lost
income to his business and for the cost of a charter trip to the Brooks Range; and denial
of his claim for the lost interest on the value of the plane while it was damaged.
Madonna also challenges the award of prejudgment interest at the statutory rate and the
denial of his request for post-trial discovery. We address these arguments in turn.
III. STANDARD OF REVIEW
Interpretation of an established contract is a question of law and is reviewed
de novo.1 But more basic questions about the existence, validity, and scope of a contract
are questions of fact, which are reviewed under the clearly erroneous standard.2
We review a trial court’s discovery rulings and decisions to exclude
evidence for abuse of discretion.3 “An abuse of discretion exists only when we are ‘left
with a definite and firm conviction, after reviewing the whole record, that the trial court
1
Cook v. Cook, 249 P.3d 1070, 1077 (Alaska 2011).
2
Wyatt v. Wyatt, 65 P.3d 825, 828 (Alaska 2003) (citing Juliano v. Angelini,
708 P.2d 1289, 1291 (Alaska 1985)).
3
See Peterson v. Ek, 93 P.3d 458, 467 (Alaska 2004) (quoting Fletcher v.
S. Peninsula Hosp., 71 P.3d 833, 844 (Alaska 2003)) (discovery rulings); Getchell v.
Lodge, 65 P.3d 50, 53 (Alaska 2003) (decisions to exclude evidence).
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erred in its ruling.’ ”4 Even where a trial court abused its discretion, though, we will only
reverse where “the error affected the substantial rights of a party.”5
Whether an entire type of damages is allowed is a question of law, which
we review de novo.6 Statutory interpretation is also a question of law, which we review
de novo.7
IV. DISCUSSION
A. There Was No Contract With Tamarack To Repair The Plane After
The Accident.
1. Madonna argues that his claims sound in contract, not tort.
The superior court treated this case as a straightforward trial for tort
damages. But Madonna has consistently advanced a theory of the case that sounds in
contract and is apparently convinced that this approach is preferable. Specifically,
Madonna argues that his longstanding oral contract with Tamarack to perform annual
maintenance on his plane gave Tamarack more duties after the accident than an ordinary
tortfeasor would have. Madonna concedes that this duty to repair and give advice was
never written down or even made explicit, but he argues that it was implied by Domke’s
promises and Tamarack’s course of performance. After Tamarack damaged the plane,
Madonna argues, it had a duty not only to pay for the repairs, but also to give him
4
Getchell, 65 P.3d at 53 (quoting Liimatta v. Vest, 45 P.3d 310, 313 (Alaska
2002)).
5
Id. (quoting Dobos v. Ingersoll, 9 P.3d 1020, 1023 (Alaska 2000)) (internal
quotation marks omitted).
6
Alaska Constr. Equip., Inc. v. Star Trucking, Inc., 128 P.3d 164, 167
(Alaska 2006).
7
Curran v. Progressive Nw. Ins. Co., 29 P.3d 829, 831 (Alaska 2001).
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assistance and advice in making those repairs. Madonna attempts to leverage these
duties into a claim for punitive damages based on Tamarack’s post-accident conduct.
The trial court refused to let Madonna’s contract theory go to the jury. At
a pretrial hearing, the trial court entertained arguments on the issue and ruled that
Madonna would not be allowed to present evidence about any contractual duties
Tamarack may have had to repair the plane after the accident.
On the first day of trial, Madonna again attempted to admit evidence that
Tamarack had a contractual obligation to help him repair his plane. The trial court again
ruled that such evidence would not be admitted, but it allowed Madonna to make an offer
of proof and preserve his objection for appeal. Madonna offered two pieces of evidence
to support his claim. First, he testified that Domke had promised to “care for [the plane]
with all the attention that she would give her own airplane and maintain it in excellent
condition.” Second, he testified that Tamarack had once refastened, for free, an exhaust
clamp bracket it had forgotten to tighten during the annual inspection.8 Madonna now
appeals the trial court’s ruling.
2. Tamarack had no contractual obligation to repair the plane
post-accident.
We agree with the trial court that Tamarack had no contractual obligation
to repair the plane after the accident. Madonna’s proffered evidence does not indicate
otherwise. The loose exhaust clamp, unlike the accident at issue, was a defect covered
by the bargained-for annual maintenance. Tamarack’s contractual duty to perform
satisfactory maintenance on the plane obliged it to fix any problems that arose during the
8
Madonna also indicated that Tamarack had once repaired a hole in the
fabric that Madonna believed had been caused by the mechanics at Tamarack. He
admitted, though, that he had been charged for this repair, so this cannot be the basis of
an unspoken agreement to fix the plane free of charge.
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maintenance process for no further charge, but here no work was being done on the plane
when it was damaged.9 It was merely resting in Tamarack’s parking field when it was
accidentally towed into two other planes. Tamarack’s resulting obligation to pay for the
damage, therefore, has nothing to do with any obligation Tamarack may have had to
make annual repairs on the plane.
Madonna also points to Domke’s promise to “care for [the plane] with all
the attention that she would give her own airplane and maintain it in excellent condition.”
We have previously held that a contract must have reasonably definite and certain terms
to be enforceable.10 Here, Domke’s promise was vague and did not impose a duty
beyond her common law obligation to pay for any damage she caused to Madonna’s
plane.
It is also fatal to Madonna’s claim that Domke did offer to make repairs on
the plane after reviewing the damage with him and estimating the cost. Madonna
rejected this repair plan. Madonna cannot now argue that Domke breached some duty
to repair the plane herself unless he takes the untenable position that Tamarack had a
perpetual obligation to submit repair plans until Madonna was satisfied and accepted one.
Any contract to do so would be an unenforceable agreement to agree.11
9
There is surprisingly little evidence in the record concerning how the
damage occurred, probably because Tamarack admitted liability for the accident. Both
parties agree that the plane was in Tamarack’s possession at the time of the accident, but
Madonna has never alleged that Tamarack damaged it while actually conducting repairs.
10
Alaska Creamery Prods., Inc. v. Wells, 373 P.2d 505, 510 (Alaska 1962).
11
Davis v. Dykman, 938 P.2d 1002, 1009 (Alaska 1997).
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3. Tamarack’s status as bailee does not impose a legal duty to
repair damaged property.
Madonna also argues that we held in Burgess Construction Co. v. Hancock
that a bailee is always obligated to repair bailed property damaged in her possession.12
But ordinarily a bailee has no fiduciary duty to the bailor and “a bailee’s liability is
limited to ‘loss or injury to the bailed goods caused by [the bailee’s] failure to exercise
the degree of care of a reasonably careful owner.’ No other duties [are] owed.”13 No
contrary rule can be found in Burgess Construction Co. v. Hancock. That case merely
stands for the proposition that a bailee has the burden of explanation and proof if she
wishes to avoid liability for damage caused to bailed property in her care.14 It does not
impose a duty on the bailee to fix the damaged property herself in a specified manner.
B. The Trial Court Did Not Err By Rejecting Madonna’s Claim For
Punitive Damages.
Madonna argues that Tamarack breached the covenant of good faith and
fair dealing implicit in every Alaska contract by refusing to coordinate the repairs to
Madonna’s plane after it was damaged and by failing to compensate him for the cost of
repairs without the need for legal intervention. Madonna sought punitive damages based
upon this alleged breach of the implied covenant of good faith and fair dealing.
Madonna asked the trial court to submit the question of punitive damages to the jury.
Tamarack filed a motion for summary judgment on this point, and the trial judge granted
it. Tamarack also asked the trial court to exclude evidence of communications between
12
514 P.2d 236 (Alaska 1973).
13
Alaska Cont’l, Inc. v. Trickey, 933 P.2d 528, 536 (Alaska 1997) (quoting
Dresser Indus., Inc. v. Foss Launch & Tug Co., 560 P.2d 393, 395 (Alaska 1977)).
14
Burgess Constr. Co., 514 P.2d at 239.
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Madonna and Tamarack’s insurer, which Madonna planned to use to show Allstate’s
misconduct. The trial court granted this motion too. Madonna appeals these rulings.
Punitive damages are a harsh remedy not favored in law.15 “ ‘[W]here there
is no evidence that gives rise to an inference of actual malice or conduct sufficiently
outrageous to be deemed equivalent to actual malice,’ the trial court need not, and indeed
should not, submit the issue of punitive damages to the jury.”16 “The fact finder may
make an award of punitive damages only if the plaintiff proves by clear and convincing
evidence that the defendant’s conduct (1) was outrageous, including acts done with
malice or bad motives; or (2) evidenced reckless indifference to the interest of another
person.”17
Ordinarily, punitive damages are more readily available in a tort case than
a contract case. But Madonna allows that Tamarack did nothing so outrageous as to be
sanctioned with punitive damages in tort. Instead, Madonna argues that Tamarack had
a contractual duty to help him repair the plane, that Tamarack breached the covenant of
good faith implicit in this contract by refusing to make those repairs, and that this breach
warrants punitive damages. But we have already held that Tamarack had no contractual
obligation to make repairs itself. Moreover, even if such a contract had existed,
Madonna’s argument that punitive damages are warranted is based primarily on the
actions of Allstate, Tamarack’s insurer. But we held in O.K. Lumber Co. v. Providence
Washington Insurance Co. that an injured claimant may not sue the defendant’s insurer
15
Chizmar v. Mackie, 896 P.2d 196, 210 (Alaska 1995) (citing State Farm
Mut. Auto. Ins. Co. v. Weiford, 831 P.2d 1264, 1266 (Alaska 1992)).
16
Id.
17
AS 09.17.020(b).
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for breach of the duty of good faith and fair dealing.18 Therefore, Madonna’s contract-
based claim for punitive damages must fail.
C. Madonna Was Not Prejudiced By The Trial Court’s Refusal To Allow
Him To Question Domke Regarding Whether She Had Received
Madonna’s August 20, 2009 Letter To Allstate.
On August 20, 2009, Madonna wrote a letter to Allstate and included the
estimated cost of sending the plane to the Aviat factory in Wyoming. At trial, Madonna
tried to ask Domke if she had received or had knowledge of this letter. Tamarack
objected to the question, and the trial court sustained the objection. Madonna now
appeals this ruling.
Madonna argues that receipt of the letter is evidence that Tamarack knew
of Madonna’s plan to repair the Husky in Wyoming, yet said nothing. He argues in turn
that Tamarack’s silence is evidence that the plan was reasonable. Thus, he claims, the
letter was relevant and its exclusion was erroneous.
But even if exclusion of the letter was erroneous, Madonna bears the burden
of showing that this evidentiary ruling was prejudicial.19 He has not met this burden
because he has not shown that exclusion of the letter had a “substantial influence” on the
outcome of the trial.20
The letter includes Aviat’s estimated cost to repair the Husky and Aviat’s
address in Wyoming. From this Tamarack could have deduced Madonna’s plan to repair
the plane out of state. But the jury’s award was far higher than Tamarack’s estimated
cost of repairing the plane locally, so we must assume that the jury accepted Madonna’s
18
759 P.2d 523, 526 (Alaska 1988).
19
See, e.g., Loof v. Sanders, 686 P.2d 1205, 1209 (Alaska 1984) (citing
Alaska R. Civ. P. 61).
20
Id. (citing Martinez v. Bullock, 535 P.2d 1200, 1206-07 (Alaska 1975)).
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argument that it was reasonable to repair the plane in Wyoming. In fact, it appears that
the only costs the jury did not reimburse him for were a few expenses associated with
unloading the plane in Wyoming.21 These expenses were related to the method of
transportation, not the decision to repair the plane at the factory. Because the verdict
already reflects the jury’s judgment that it was reasonable to repair the plane in
Wyoming, Madonna has not shown that exclusion of the letter was prejudicial. We
therefore conclude that exclusion of the letter was not reversible error.
D. The Trial Court Did Not Err By Precluding Madonna’s Claim For
Lost Income To His Business.
Madonna is a professor emeritus of geology at the University of Alaska.
He currently runs a gemstone shop and museum, selling prospecting and mining
equipment as well as valuable rocks and minerals. The shop is only open five months
a year, from April to September. Madonna is the only employee, and the specialized
knowledge required to run the shop and museum makes it difficult to hire additional
help.
Madonna asserts that he was forced to spend a significant amount of time
arranging for repairs of his plane after the accident. Madonna claims that this prevented
him from working in his shop and significantly reduced his income. He was prepared
to present evidence that his earnings for the 2009 year were significantly lower than
average. The judge refused to allow Madonna to present this evidence, ruling that,
21
Although it is difficult to determine the precise genesis of the jury’s award,
it is clear from an examination of the evidence that the jury compensated Madonna for
the majority of the expenses he incurred shipping the plane to Wyoming. It appears that
the jury only declined to award Madonna the cost of unloading the plane and reinstalling
the wings, as well as installing the transponder and other small upgrades and routine
maintenance. This interpretation closely tracks portions of Tamarack’s closing
argument.
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without more corroboration or specific evidence, it was too speculative to go to a jury.
Madonna appeals this ruling.
As a general rule, an injured party should be compensated for profits lost
due to that injury if those losses are reasonably certain.22 But the jury “must be able to
determine the amount of lost profits from evidence on the record and reasonable
inferences therefrom, not from mere speculation and wishful thinking.”23
Madonna has presented no evidence to suggest that the trial court erred by
ruling that the claim was too speculative to go to the jury. At oral argument before us,
Madonna conceded that he never made an offer of proof beyond testimony about the
time it took to address the repairs and evidence that Madonna’s shop made less than the
prior year. And as the trial court judge pointed out:
[L]et’s assume [the tax returns showing lost profit] come in.
The cross examination then goes into his life, his emotional
state, his personal life, what’s happening in his life . . . there
can be a whole bunch of reasons why income is decreased if
somebody is running a one-man shop . . . . It’s too
speculative and it invites too many other side issues that are
collateral to this case.
We cannot conclude that the trial court erred by ruling that a claim for lost profits based
on this evidence alone was too speculative to reach the jury.
E. The Trial Court Did Not Err By Refusing To Allow Madonna’s Claim
For The Cost Of Charter Trips To The Brooks Range To Go The Jury.
Madonna claims that while his Husky was damaged, he wanted to take two
charter flights, one to the Black Rapids Glacier and one to the Brooks Range. Madonna
22
See State v. Hammer, 550 P.2d 820, 824-25 (Alaska 1976); Dowling Supply
& Equip., Inc. v. City of Anchorage, 490 P.2d 907, 909 (Alaska 1971); Suntrana Mining
Co. v. Widich, 360 P.2d 84, 89 (Alaska 1961).
23
Hammer, 550 P.2d at 825.
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solicited bids for both trips and received estimates that it would cost $5,000 for a trip to
the Black Rapids Glacier and $8,800 for four round trips to the Brooks Range.
The trial court allowed Madonna to ask the jury for compensation for the
cost of the Black Rapids Glacier trip, but not the cost of the Brooks Range charter flights.
Madonna now appeals the trial court’s ruling.
Madonna cites Burgess Construction Co. v. Hancock for the proposition
that the owner of damaged property is entitled to recover the rental cost of replacement
equipment while it is down for repairs.24 But Madonna apparently waived this claim
during discovery. At his deposition, Madonna repeatedly said that he was not claiming
damages for being unable to make trips to the Brooks Range in the Husky. And
Tamarack raised this objection at trial. One purpose of discovery is to narrow the issues
at trial, and a claim waived in discovery ordinarily cannot be resuscitated at trial.25 We
therefore conclude that the trial court did not err by preventing Madonna from asking the
jury for the cost of charter trips to the Brooks Range.
F. The Trial Court Did Not Err By Refusing To Allow Madonna’s Claim
For Lost Interest On The Value Of The Damaged Plane To Go To The
Jury.
Madonna argues that he should be compensated for the “lost interest on his
investment in the plane” while it was damaged. It appears that this is a claim for the
interest Madonna would have earned during the period the Husky was damaged if he had
never bought the plane and had instead invested the purchase money.
24
514 P.2d 236 (Alaska 1973).
25
See McKibben v. Mohawk Oil Co., 667 P.2d 1223, 1231-32 (Alaska 1983)
(interrogatories requiring party to state in detail facts upon which claim is based are
proper in order to narrow the issues), overruled on other grounds by Wien Air Alaska v.
Bubbel, 723 P.2d 627, 631 n.4 (Alaska 1986).
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The trial court did not allow this claim to go to the jury, finding that
Madonna would be appropriately compensated for this hypothetical lost return on his
money by pre- and post-judgment interest. That analysis is correct.26 We therefore
conclude that the trial court did not err by refusing to allow Madonna’s claim to go to the
jury.
G. The Trial Court Did Not Err By Awarding Prejudgment Interest At
The Statutory Rate.
Madonna argues that the money he used to repair his plane would otherwise
have earned interest at 10.65% and that prejudgment interest on the jury award should
have been set accordingly. The trial court judge ruled that the interest rate was a matter
to be determined after damages and refused to let evidence of the higher interest rate go
to the jury. After trial, the judge awarded prejudgment interest at the statutory rate of
3.75% and denied Madonna’s motion to set a higher interest rate without explanation.
Madonna now appeals this ruling, arguing that this case falls within an exception to the
statutory interest rate.
Alaska Statute 09.30.070(a) fixes prejudgment interest for all judgments
except for “a judgment or decree founded on a contract in writing.” Here, the trial court
correctly ruled that there was no contract.
Madonna argues that support for his contention can be found in Tookalook
Sales & Service v. McGahan.27 In that case, Tookalook sold the plaintiffs a motor
26
See Pratt & Whitney Canada, Inc. v. Sheehan, 852 P.2d 1173, 1183 (Alaska
1993) (finding no authority for awarding prejudgment interest on the full value of a
damaged plane in addition to repair damages).
27
846 P.2d 127 (Alaska 1993).
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home.28 The plaintiffs financed the purchase with a third-party bank.29 Dissatisfied with
the motor home, the plaintiffs rescinded the contract and sued Tookalook to recover the
purchase money.30 A jury found for the plaintiffs, and the trial court awarded interest on
the judgment at the rate at which they had borrowed money from the bank:
In cases where a party borrows money from a third-party
lender to meet its contractual obligations, and the contract is
subsequently rescinded, the borrowing party may recover
interest on the amount borrowed as calculated by using the
higher of the contractual interest rate and the statutory
interest rate.[31]
Madonna argues that “[s]ince a plaintiff can recover the cost of borrowed
funds, Madonna should be able to recover the lost interest from his own investment
account. Both are caused by the same thing and both are readily quantified.” But in
Tookalook, the plaintiff had a written contract to repay money at the higher-than­
statutory rate. In the current case, Madonna had no such contract. Therefore, we
conclude that the trial court did not err by setting prejudgment interest at the statutorily
set rate.
H. The Trial Court Did Not Err By Denying Madonna’s Motion To
Compel Post-Trial Discovery And Award Attorney’s Fees To
Tamarack.
Along with his motion asking the trial court to set prejudgment interest
at a rate higher than the statutory default rate, Madonna also noticed an Alaska
Civil Rule 30(b)(6) deposition of “the person at Defendant or its insurer most familiar
28
Id. at 128.
29
Id.
30
Id.
31
Id. at 130.
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with the rate of interest or appreciation Defendant’s insurer has earned on its investments
from June 5, 2009 to the present.” Madonna hoped this deposition would reveal that
Allstate earned significant interest on the money it saved by not paying for repairs
immediately. This, he argues, would have bolstered his case that the statutory
prejudgment interest rate was inadequate. Tamarack informed Madonna that it objected
to the proposed deposition and would seek sanctions if he persisted with his plan.
Nevertheless, Madonna attempted a telephonic deposition. By all accounts
it was a failure. Tamarack offered to have Tamarack’s owner testify, but refused to
produce anyone from Allstate or anyone with knowledge of Allstate’s investments.
Madonna, in turn, said that he was not interested in talking to anyone from Tamarack.
After the deposition, Tamarack filed a motion for a protective order or for sanctions. A
day later, Madonna filed a motion to compel Tamarack to produce a witness pursuant to
his deposition notice. The trial court denied Madonna’s motion to compel and awarded
Tamarack $200 in attorney’s fees. Madonna now argues that those decisions were
erroneous.
Tamarack makes several convincing arguments that the attempted
deposition was improper. Tamarack argues that the time for discovery had closed before
trial, that inquiry into Allstate’s investments could not possibly lead to relevant
information,32 and that Tamarack did not represent Allstate, nor was Allstate a party to
this litigation. We agree with all of these arguments.
32
Madonna argues that Allstate’s return on investment is relevant because,
if it is higher than 3.75%, that would bolster his claim that the statutory rate of interest
“was far below Madonna’s actual loss and (suspected) Allstate’s actual gain.” This
conflicts with our principle of compensation, which looks not to the benefit conferred on
Allstate, but to the damage done to Madonna. See State v. Hammer, 550 P.2d 820, 824
(Alaska 1976).
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Madonna also argues that, in any case, the trial court should have awarded
attorney’s fees to Madonna, not Tamarack. Citing Alaska Civil Rule 37(d), Madonna
argues that attorney’s fees are mandatory whenever the opposing party fails to attend a
deposition. But this is not true. That rule says that “the court shall require the party
failing to act . . . to pay the reasonable expenses, including attorney’s fees, caused by the
failure, unless the court finds that the failure was substantially justified or that other
circumstances make an award of expenses unjust.”33 Here, the trial court determined that
Madonna’s deposition notice was improper, and Tamarack was fully justified in any
failure to attend. Therefore, the trial court was not bound to award attorney’s fees to
Madonna. Under Civil Rule 37(a)(4)(B), if a motion to compel discovery is denied, the
trial court must award reasonable attorney’s fees to the opposing party, unless such
expenses would be unjust.34 Therefore, the trial court did not err by awarding $200 in
attorney’s fees to Tamarack.
V. CONCLUSION
Because the trial court did not err in its rulings, we AFFIRM that court in
all respects.
33
Alaska R. Civ. P. 37(d) (emphasis added).
34
“If the motion [to compel discovery] is denied, the court . . . shall, after
affording an opportunity to be heard, require the moving party or the attorney filing the
motion or both of them to pay to the party or deponent who opposed the motion the
reasonable expenses incurred in opposing the motion, including attorney’s fees, unless
the court finds that the making of the motion was substantially justified or that other
circumstances make an award of expenses unjust.” Alaska R. Civ. P. 37(a)(4)(B).
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