Alaska Construction & Engineering, Inc. v. Balzer Pacific Equipment Co.

130 P.3d 932, 2006 Alas. LEXIS 13, 2006 WL 205023
CourtAlaska Supreme Court
DecidedJanuary 27, 2006
DocketS-11168, S-11225
StatusPublished
Cited by6 cases

This text of 130 P.3d 932 (Alaska Construction & Engineering, Inc. v. Balzer Pacific Equipment Co.) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Alaska Construction & Engineering, Inc. v. Balzer Pacific Equipment Co., 130 P.3d 932, 2006 Alas. LEXIS 13, 2006 WL 205023 (Ala. 2006).

Opinion

OPINION

CARPENETI, Justice.

I. INTRODUCTION

Alaska Construction & Engineering, Inc. (ACE) leased various pieces of equipment from Balzer Pacific Equipment Company (Balzer). When ACE stopped making rental payments, Balzer sued for breach of contract and sought prejudgment delivery of the equipment. Balzer was allowed to retrieve its equipment after putting up a bond. The jury returned a verdict for Balzer on its breach of contract claims, rejected ACE’s affirmative defenses, and awarded ACE $10,000 on one of its counterclaims. Post-trial, the superior court ruled that: (1) Bal-zer was the prevailing party; (2) the attorney’s fees provisions in the lease did not apply to Balzer’s attorney’s fees at trial; and (3) Balzer was entitled to prejudgment interest at the statutory rate of three and three-quarters percent, as opposed to the eighteen percent rate listed on Balzer’s invoices to ACE. ACE appeals the prevailing party decision; Balzer appeals the decisions regarding the attorney’s fees provisions and the prejudgment interest rate.

Because ACE won on relatively minor claims while Balzer won on its main claim, we affirm the superior court’s designation of Balzer as the prevailing party. Because the lease and the option to purchase are separate agreements, we hold that the attorney’s fees provisions in the option to purchase and the repossession section of the lease are inapplicable to this case. Because Balzer did not offer sufficient record evidence regarding the invoice interest rate, we reject the argument that ACE agreed to pay eighteen percent prejudgment interest. Thus, we affirm the superior court in all respects.

*934 II. FACTS AND PROCEEDINGS

ACE, an Alaska corporation, contracted with Balzer, an Oregon corporation, to lease various pieces of rock crushing equipment with the option to purchase. Two agreements were involved: a December 15, 2000 agreement for conveyers and accessories at $8,980 per month, and a January 11, 2001 agreement for a screen plant at $7,000 per month. The agreements, which were drafted by Balzer, are identical except as to the items leased and their value.

By July 2001 ACE had defaulted on its rental payments. Balzer sued for back rent in Oregon in August 2001. In November 2001 Balzer filed a complaint for breach of contract against ACE in Alaska. Balzer claimed that ACE breached the contract by ceasing to make monthly rental payments and failing to return the equipment. The complaint prayed for the return of the equipment, attorney’s fees, and other relief appropriate under the circumstances. Balzer also moved for prejudgment delivery of the equipment pursuant to Alaska Civil Rule 88, and submitted a bond for $228,000, representing the combined contract price of the leased equipment. ACE answered the complaint and opposed the motion for prejudgment delivery. ACE offered various affirmative defenses (including that Balzer materially breached by providing defective equipment), and counterclaimed for unfair trade practices, breaches of contract and the duty of good faith and fair dealing, and intentional and negligent misrepresentation. ACE sought damages of just over $1 million.

A hearing on prejudgment delivery was held on December 11, 2001. ACE opposed the motion on the grounds that it had an ownership interest in the equipment stemming from the rent it had already paid. ACE also argued that Balzer’s bond of $228,000 was insufficient under AS 09.40.270, 1 which governs undertakings. At the hearing, the superior court ordered Balzer to post a bond of $489,560, about twice the value of the equipment as set out in the lease agreements. ACE then agreed to turn over the equipment to Balzer. In January 2002 Bal-zer picked up the equipment at ACE’s Anchorage storage yard and eventually transported it to Oregon.

A jury trial was held in February 2003 before Superior Court Judge Philip R. Vol-land. At trial Balzer sought $20,000 in transportation costs for returning the equipment to Oregon, $52,000 in repair costs, and $40,000 in back rent for ACE’s alleged running of a “second shift” in violation of the contracts. 2 In its counterclaim, ACE alleged that it incurred losses from defects in the equipment and loss of profits resulting from those defects; it sought damages totaling $359,000. 3 The jury found that ACE breached the contract and violated the implied covenant of good faith and fair dealing. Therefore, it awarded Balzer approximately $50,500 in damages. The jury rejected all of ACE’s affirmative defenses. It also rejected three of ACE’s counterclaims: that Balzer had breached the contract, contravened the implied covenant of good faith and fair dealing, and made intentional misrepresentations. The jury found that Balzer had made negligent misrepresentations and awarded ACE approximately $10,000 in damages.

Following the verdict, Judge Volland considered whether to award attorney’s fees. The court made three rulings regarding attorney’s fees. First, Judge Volland held that Balzer was the prevailing party for the purposes of Alaska Civil Rules 82 and 79. He *935 also held that, although Balzer was entitled to full attorney’s fees for the period before it recovered its equipment on January 10, 2002, none of the lease agreement’s attorney’s fees provisions applied to fees incurred at trial. Finally, Judge Yolland rejected Balzer’s argument that prejudgment interest be calculated at eighteen percent, as provided in invoices Balzer sent to ACE, and instead applied the statutory rate of three and three-quarters percent.

This appeal concerns only Judge Volland’s post-trial attorney’s fees decisions. ACE appeals the superior court’s designation of Bal-zer as the prevailing party. Balzer cross-appeals, seeking full attorney’s fees and calculation of prejudgment interest at eighteen percent.

III. STANDARD OF REVIEW

We review a trial court’s decision regarding prevailing party status as well as the award of costs and attorney’s fees for abuse of discretion. 4 An abuse of discretion exists when an award is arbitrary, capricious, manifestly unreasonable, or improperly motivated. 5

“Interpretation of a contract is a question of law to which we apply our independent judgment.” 6 We also apply our independent judgment in interpreting the Alaska Civil Rules. 7 In exercising our independent judgment we adopt the rule of law most persuasive in light of precedent, reason, and policy. 8

IV. DISCUSSION

A. The Superior Court Did Not Abuse Its Discretion in Ruling that Balzer Was the Prevailing Party.

ACE makes two challenges to the superior court’s ruling that Balzer was the prevailing party for the purpose of awarding attorney’s fees.

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Cite This Page — Counsel Stack

Bluebook (online)
130 P.3d 932, 2006 Alas. LEXIS 13, 2006 WL 205023, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alaska-construction-engineering-inc-v-balzer-pacific-equipment-co-alaska-2006.