Brown v. Knowles

307 P.3d 915, 21 Wage & Hour Cas.2d (BNA) 23, 2013 WL 4399131, 2013 Alas. LEXIS 106

Opinions

OPINION

CARPENETI, Chief Justice.

I. INTRODUCTION

The unpaid employee of a closely-held corporation sued the corporation and its president for back wages in superior court. The day after the employee filed suit, the corporation filed for Chapter 11 bankruptey. The bankruptcy court discharged the corporation's debts, and the superior court dismissed the corporation, but the superior court allowed trial to proceed against the president on a veil-piercing theory. A jury found that the corporation was a mere instrumentality of the president, and that the president owed the former employee wages under a bonus agreement. The president appeals the superior court's decision on multiple grounds.

When a corporation files for bank-ruptey, the corporation's legal claims become property of the bankruptcy estate. Here, the president claims that the corporation theoretically could have brought the plaintiff's veil-piercing claim against him prior to bank-ruptey. Thus, the president reasons, the employee's veil-piercing claim became property of the bankruptcy estate. But in this case, the plaintiff did not allege injury to the corporation, and therefore the corporation could not have brought the plaintiff's legal claim against its president. For this reason, the plaintiffs veil-piercing claim did not become property of the estate. And the discharge of the corporation's personal liability on the debt did not prevent the superior court from establishing the corporation's indebtedness for the sole purpose of holding the president liable. Thus, the court could pierce the corporate veil to hold the president liable.

Additionally, the mere-instrumentality test is a sufficient basis to pierce the corporate veil. The superior court did not err in piercing the veil based on the jury's finding that the mere-instrumentality test was met. The superior court correctly answered the jury's questions on the mere-instrumentality test and properly determined the statute of limitations on the employee's claims under the Alaska Wage and Hour Act (AWHA). The superior court's calculation of the overtime and derivative AWHA claims was also proper, and the superior court did not err in awarding attorney's fees. The superior court did not err in declining to find that a dismissed party who was only minimally involved in the litigation was a prevailing party. We therefore affirm.

II. FACTS AND PROCEEDINGS

A. Facts

In 1999, Edward Brown and Leon Knowles entered into a bonus agreement. At the time, Brown was the president, chief operating officer, managing officer, and either the sole owner or half-owner of a closely-held Anchorage-based construction company incorporated as E. Brown, Inc., but doing business as International Steel. Brown stated that his wife Heidi owned 50% of International Steel's stock, but Brown could not explain how or when Heidi obtained the stock, and his account of how she obtained the stock conflicted with International Steel's financial reports. In a 2004 financial statement, Brown stated that he owned 100% of the issued stock.

Brown admitted that he was not aware of the legal requirement that International Steel hold annual meetings. The only minutes found in the corporate record document a meeting between Brown and Heidi held on Grand Cayman Island, British West Indies, in 1988, shortly after Brown's marriage to Heidi. That meeting occurred in November 1988 after International Steel had been involuntarily dissolved by the State of Alaska for failure to pay its taxes. International Steel came back into good standing in 1989, but the corporate record contains no account of any annual meetings after 1988.

In 1994, Brown recruited Knowles to work for International Steel as an "expediter," but as International Steel's volume of work increased, Knowles began receiving project management work, taking on his first official project management job in 1997. In the fall of 1999, Knowles requested a raise. Knowles testified that Brown suggested using a bonus plan instead of a wage raise to compensate him. The two parties reached an agreement on a bonus plan, which Knowles drafted and the parties never signed.

On the basis of the bonus agreement, Knowles received a bonus of $27,455 in 2000, but in 2001 International Steel began to experience financial troubles and was unable to pay a bonus. The next year, after International Steel received a $968,000 settlement on an old project, Brown paid Knowles a bonus of $100,000 for work performed under the bonus agreement. Knowles claimed at trial that, according to his calculations, he was owed an additional $72,666 for that work. Knowles testified that Brown assured him that International Steel would pay him the rest when the company could afford it. Brown testified that he did not believe he owed Knowles any more bonus, but that he could not remember telling Knowles this, because he did not know "how that would come up."

At no time did International Steel pay Knowles overtime on his bonus payments. Knowles testified that when he and Brown negotiated the bonus agreement, Knowles was unaware of the provisions in the Alaska Wage and Hour Act that require overtime payments on non-discretionary bonuses.¹

International Steel's finances continually deteriorated until it had completely drawn down its credit line. Knowles, who testified he had "some serious medical issues," discovered that his health insurance had been can-celled due to nonpayment by International Steel on October 6, 2004. He resigned the same day. Knowles testified that Brown continued to communicate with him about an outstanding claim on one of Knowles's projects, the Bassett claim, which seemed potentially to be worth millions of dollars to International Steel. Knowles also purchased his company truck from International Steel, receiving a bill of sale in return, signed by Brown. The bill of sale, dated November 2004, refers to "wages and/or bonus payments which are outstanding and currently owed by International Steel to Knowles," and according to which "the parties will determine at a later time the total amount which Knowles is owed."

B. Proceedings

On January 19, 2005, Knowles filed suit in superior court against International Steel and Brown. His original complaint included: (1) a breach of contract claim against International Steel based on the bonus agreement; (2) a breach of contract claim against the company based on failure to pay the agreed-upon bonus; (8) accompanying AWHA claims against the company based on failure to pay overtime on the bonus and pay raise; (4) assorted common law claims directed against both the company and Brown; and (5) a claim under AS 28.05.140 based on International Steel's failure to pay Knowles all of his wages within three days of termination of the employment contract.

The next day, on January 20, 2005, International Steel filed a petition for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Alaska.

After Brown filed his answer to Knowles's complaint, the superior court noted that Knowles's case against International Steel had been stayed by the bankruptey proceedings and asked the parties whether they intended the bankruptcy stay to apply to Brown as well. The parties stipulated to a six-month stay. In November 2005, they renewed the stay to apply until March 10, 2006.

Meanwhile, Knowles filed a proof of claim with the bankruptcy court dated May 18, 2005, for unpaid compensation from International Steel in the years 2002 to 2005, estimating that he was owed $365,000 in unsecured debts and $5,000 in secured debts from International Steel, but noting in an attachment that he was still gathering information regarding the amounts due. On April 14, 2006, the bankruptey court confirmed International Steel's Amended Plan of Reorganization (the Plan). Knowles, along with other unsecured nonpriority claimants, received nothing under the Plan. Nonetheless, he filed a notice withdrawing his claim against International Steel in the bankruptcy court.

The superior court reported in a later order that at a status hearing on September 5, 2006, "in anticipation of the approval of the reorganization plan, the parties agreed the complaint against [Brown] could proceed." Later that month, Knowles filed an amended complaint, still directed toward both International Steel and Brown, but adding for the first time a veil-piercing claim against Brown. The claim alleged that International Steel "was a mere instrumentality or alter ego of Brown." Brown's answer asserted "collateral estoppel or res judicata" as an affirmative defense.

In early 2007, the parties stipulated to dismiss International Steel from the state court litigation without prejudice. After Knowles moved for partial summary judgment against Brown, Brown opposed and cross-moved for partial summary judgment, asserting as a defense that Knowles's wage and overtime claims were barred by AWHA's two-year statute of limitations.

In early 2008, Knowles was granted leave to file a second amended complaint, seeking to add a spoliation claim and to add Heidi as a defendant. His motion was supported by affidavits from himself and his attorney. These affidavits asserted that Brown had destroyed files and had been unable to produce International Steel's corporate book, "which includes corporate resolutions, minutes of annual shareholder meetings, and minutes of board meetings." Knowles's affidavit also indicated that he had recently discovered Heidi was a shareholder of International Steel, contrary to Brown's representations throughout Knowles's relationship with him that Brown was International Steel's sole shareholder.

In March 2008, the superior court issued an order that made several preliminary legal determinations regarding AWHA's overtime provisions, but it also found genuine issues of material fact surrounding the bonus agreement and its effects. The next month, International Steel moved for dismissal or summary judgment of Knowles's spoliation claim, arguing that the claim violated the company's discharge in bankruptcy, and noting in any case that the corporate book had now been found and produced to Knowles. International Steel, Brown, and Heidi also filed counterclaims alleging that Knowles breached the covenant of good faith and fair dealing in various ways and that Knowles's claims against International Steel violated the bank-ruptey discharge.

In May 2008, the U.S. Bankruptey Trustee moved to dismiss or convert International Steel's bankruptey case for cause, based on International Steel's "failure to file post-confirmation reports and to pay quarterly fees." The IRS joined the motion, based on late payments by International Steel. The company opposed the Trustee's motion on May 28, arguing that it had "performed its obligations to provide post-petition reports and is current on its quarterly fees."

In July 2008, Knowles moved to file a third amended complaint, to add parallel claims under the federal Fair Labor Standards Act (FLSA) to his wage claims under AWHA, and to drop unnecessary claims. The motion was granted.

In an October 2008 order granting in part and denying in part Brown's eross-motion for partial summary judgment, the superior court concluded that the acerual of both Knowles's AWHA and contract claims "cannot be decided as a matter of law, but is for the jury as a matter of fact."

The case went to trial, On the first day, November 3, 2008, Knowles moved to dismiss Heidi and International Steel. Brown asserted, without prior briefing, that because of International Steel's bankruptcy discharge, the superior court could not proceed against Brown on a veil-piercing theory. The superi- or court ordered a stay of claims against International Steel, allowed the veil-piercing claim to proceed against Brown, and ordered the dismissal with prejudice of the claims involving Heidi, while reserving the matter of attorney's fees for later resolution.

Before the jury began deliberations, the parties agreed that the court would address the matter of overtime after the verdiet was returned. On November 19, the jury delivered a verdict. It found "it to be more likely true than not true that [International Steel] owes [Knowles] additional bonus compensation" in the amount of $62,311. It found that Knowles was entitled to keep the $100,000 bonus compensation as of September 25, 2002. The jury did not find "it more likely true than not true that [International Steel] owes [Knowles] additional hourly pay." Finally, the jury did not find that "the corporate form of [International Steel] was used to defeat public convenience, justify wrong, commit fraud, or defend erime," but it did find that International Steel "was a mere instrumentality or alter ego of Ed Brown."

On February 3, 2009, the bankruptcy court issued an order granting the U.S. Trustee's motion to dismiss International Steel's bank-ruptey case, a motion which International Steel non-opposed on the day of the bank-ruptey court's decision. The bankruptcy court stated, at the company's request, that "International Steel shall continue to have the right and ability to operate its business, including any outstanding construction projects, as if it had not filed for bankruptcy."

After the jury delivered its verdict, the superior court issued an order denying Heidi's motion for attorney's fees, on the ground that there was no prevailing party as between Heidi and Knowles. The court also concluded that Knowles's AWHA claim to overtime on the unpaid bonus was not barred by AWHA's statute of limitations.

On September 28, 2009, the superior court issued an order granting in part Knowles's motion for attorney's fees under AWHA. The court declared that Knowles was the prevailing party. The court then granted Knowles 60% of his actual fees, taking into account: (1) the amount of work Knowles's attorneys dedicated to non-AWHA-related claims; (2) the Rule 82 fees Knowles would receive; and (8) the overlap in Knowles's attorneys' work when Knowles changed counsel. On the same day, the superior court issued its final judgment, awarding Knowles $216,894.83 based on Knowles's unpaid bonus; his unpaid overtime on that bonus; the liquidated damages, attorney's fees, and costs Knowles received under AWHA for non-payment of overtime; and interest.

Brown and Heidi appeal.

III. STANDARD OF REVIEW

We review questions of law de novo.² We also review "questions regarding personal and subject matter jurisdiction de novo because jurisdictional issues are questions of law subject to this court's independent judgment."³ Where a party has objected to a jury instruction in accordance with Rule 51(a), "[the correctness of jury instructions is reviewed de novo."⁴

We review findings of fact for clear error,⁵ and we find clear error only " 'when we are left with a definite and firm conviction based on the entire record that a mistake has been made."⁶ With regard to mixed questions of law and fact, we "review[ ] the superior court's factual findings for clear error, and the legal issues de novo."⁷

Finally, we review awards of attorney's fees for abuse of discretion,⁸ and we will identify an abuse of discretion only "if an award is arbitrary, capricious, manifestly unreasonable, or improperly motivated."⁹ ' Insofar as the trial court's calculation of attorney's fees consists purely of the interpretation of law, however, we review the interpretation de novo.¹⁰

IV. DISCUSSION

A. EKnowles's Veil-Piercing Claim Was Not The Property Of The Corporation's Bankruptcy Estate Because The Claim Alleged No Injury To The Corporation.

Once a bankruptey case has been initiated by the filing of a bankruptcy petition,¹¹ section 862(a)(8) of the Bankruptcy Code¹² operates as an automatic stay of "any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate."¹³ Property of the estate" includes "all legal or equitable interests of the debtor in property as of the commencement of the case."¹⁴ "Property of the estate" is construed broadly and includes any cause of action that belongs to the debtor.¹⁵ A cause of action belongs to the debtor if the debtor could have brought it as of the commencement of the case.¹⁶ Only the trustee has standing to bring the estate's legal claims,¹⁷ and the bankruptcy court is the proper forum to resolve disputes about property of the estate.¹⁸

A corporation can bring a veil-piercing claim against its own corporate insider only if the veil-piercing claim alleges that the corporate insider's conduct caused an actionable injury to the corporation.¹⁹ If a corporation could have brought a veil-piercing claim against its own corporate insider prior to bankruptcy, then the veil-piereing claim becomes property of the estate.²⁰

1. If a veil-pierecing claim alleges no injury to the corporation, then the claim belongs to the creditor.

Did the corporation in this case have a legal claim against Brown as of the commencement of its bankruptcy case? In re Educators Group Health Trust²¹ explained the proper framework for determining whether a claim belongs to a creditor of the corporation or to the corporation's bankruptcy estate, holding that claims alleging "direct injury" to ereditors belonged to creditors, but claims alleging injury to the corporation and only derivative injury to creditors belonged to the bankruptey estate.²² And this is the correct analysis under Alaska law: In Alaska if a plaintiff fails to assert a legal injury entitling the plaintiff to relief, the plaintiff has no legal claim and the suit must be dismissed.²³

If a claim alleges indirect harm to a creditor (e. harm that derives from an injury to the corporation), then the claim belongs to the corporation's estate.²⁴ A claim that a director defrauded the corporation would be such a claim.²⁵ Conversely, if a claim does not "explicitly or implicitly allege harm" to the corporation-such as the present claim that wages were unpaid to the claimant-then the corporation has no legal claim, and the claim does not become part of the corporation's estate.²⁶

In Smith v. Arthur Andersen LLP, the Ninth Cireuit explained that this distinction may at times be difficult:

Although the line between "claims of the debtor," which a trustee has statutory authority to assert, and "claims of creditors," which Caplin [v. Marine Midland Grace Trust Co. of New York] bars the trustee from pursuing, is not always clear, the focus of the inquiry is on whether the Trustee is seeking to redress injuries to the debtor itself caused by the defendants' alleged conduct.

Footnotes

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[27]

In re Transcolor illuminates the distinction between claims that belong to the estate and claims that belong to creditors:

Confusion results when courts mistakenly apply the term "piercing the corporate veil" to distinctly different causes of action against the individuals who stand behind the corporation. The true action to "pierce the corporate veil" is brought by parties injured by the corporation to hold liable those corporate officers, directors and/or - stockholders whose - [conduct] caused the injury to the plaintiffs. Liability for harm caused by the corporation is imposed upon the corporation's alter egos by disregarding the corporate form.

A. completely different cause of action is one brought directly by the corporation (or derivatively by shareholders) against corporate alter egos for damage to the corporation itself through mismanagement or fraud.[28]

The critical distinction is between (1) claims that allege injury to the corporation (and thus, indirect injury to all creditors generally) and (2) claims that allege direct injury to creditors personally. If a corporation files for bankruptey, the former constitute property of the estate, but the latter do not.

"The Ninth Circuit [has] held that misuse of a company's assets qualifies as an injury to the [corporation]. ..." ²⁹ And the Ninth Circuit has collected examples of claims where the corporation was injured, including an action to set aside fraudulent transfers made from the corporation to the alter-ego, an action against an alter-ego for conversion of the corporation's assets, and an action "on an alter ego theory upon allegations that ... defendants deposited corporation funds into their personal bank accounts or that corporation funds were received by the defendants personally.³⁰

Stated simply, if no injury to the corporation is alleged in the ereditor's alter-ego claim, then the alter-ego claim belongs to the creditor personally, and it does not become part of the bankruptey estate.³¹ When a claim belongs to the creditor personally, the creditor may bring it outside of the bank-ruptey case.³² Because Knowles's claim involved no injury to the corporation and belonged to Knowles personally, the superior court properly allowed him to bring the claim outside of the bankruptcy case.

2. EKnowles's claim alleged no injury to International Steel.

To identify the nature of the injury asserted we look to the "facial allegations in [the] complaint." ³³ Knowles's Third Amended Complaint alleged that Brown's conduct directly injured Knowles in several ways, including failure to pay wages, bonuses, and overtime. The complaint does not allege that Brown misused corporate assets, converted corporate funds to his own use, or otherwise injured the corporation.³⁴ Because Knowles alleged no injury to the corporation, International Steel could not have asserted Knowles's claim prior to its bankruptcy filing. Thus, Knowles's veil-piercing claim did not become property of the estate.³⁵

B. In The Ninth Circuit A Trustee May Not Sue On Behalf Of Creditors Whose Claims Are Not Property Of The Estate.

The court today considers two legal questions: (1) which legal claims are property of the estate (a matter of state law) and (2) whether the trustee has power to bring a claim on behalf of a creditor of the estate absent a legal claim held by the estate (a matter of federal law that has been decid ed by the Ninth Circuit in the negative). The Ninth Circuit has rejected the notion that a trustee may sue on behalf of creditors whose claims are not property of the estate: "In the Ninth Circuit, 'it is well settled that a bankruptey trustee has no standing generally to sue third parties on behalf of the estate's creditors, but may only assert claims held by the [debtor] itself" " ³⁶ Thus, under applicable Ninth Circuit precedent, the trustee in this case would have standing to bring claims only if those claims were "held by the [debt- or] itself." ³⁷ Under well-settled Ninth Circuit law, the trustee could not have asserted Knowles's claim because he alleged injury only to himself-not to International Steel.³⁸

C. International Steel, Not Brown, Was The Bankruptcy Debtor And Thus Only International Steel, Not Brown, Was Entitled To Bankruptcy Protection.

Brown - claims - that - allowing Knowles's alter-ego claim to proceed outside of bankruptcy would undermine the Bank-ruptey Code because: (1) Knowles would collect from an undiluted pool of assets rather than being limited "to no more than a pro rata distribution"; and (2) a multi-jurisdie-tional rush to potentially conflicting judgments would ensue. But the Bankruptcy Code generally ³⁹ protects only the debtor and its property.⁴⁰ In the instant case, In ternational Steel was the debtor-Brown was not.⁴¹ Nothing in the bankruptcy court's confirmation order purported to discharge Brown's debts. Brown in effect asks us to extend the Bankruptey Code's protections to a nondebtor-Brown himself.

Contrary to Brown's assertion that Knowles attempted to "undercut the general[ ] bankruptey policy of ensuring that all similarly-situated creditors are treated fairly," it is Brown who attempts to make an end run around the Bankruptey Code by achieving its protections without ever filing for bankruptey.⁴²

Veil-piercing is an equitable doe-trine, premised on the court's ability to look past the "legal fiction" to do equity.⁴³ In this regard, it must be remembered that Brown alone chose to put International Steel into bankruptey. In Brannon v. Continental Casualty Co.,⁴⁴ we refused to extend the discharge injunction to a non-debtor insurance company that forced the insured into bank-ruptey.⁴⁵ We explained:

Holding that the bankruptey court's discharge removed [the debtor's] ability to confess judgment on the [ereditors'] claims would allow [the non-debtor insurance company] to benefit from forcing its insured into bankruptey. Our reading of the bankruptey court's orders avoids this inequitable result.[46]

Similarly, allowing Brown to benefit because of his misuse of the corporate form would be an inequitable result. Courts and commentators have noted the inequity in extending the discharge injunction to non-debtors.⁴⁷ Extending the discharge injunction to non-debtors gives the non-debtors "the benefit of a bankruptey discharge without having to file a bankruptey petition."⁴⁸

D. The Superior Court Did Not Err In Its Application Of Alaska's Veil-Piercing Doctrine.

Brown presents a variety of additional arguments against the superior court's use of Alaska's veil-piercing doctrine. First, Brown questions whether the "alter ego" or "mere instrumentality" test for shareholder liability actually exists in Alaska. Second, if the test does exist, he argues that the superior court instructed the jury incorrectly on the nature of the test. Third, he argues that the superi- or court responded incorrectly to a question from the jury about the test. Fourth, he argues that the facts do not support piercing the corporate veil.

We reject Brown's arguments. In a recent decision addressing the doctrine of piercing the corporate veil, we summarized the central principles as follows:

In general, courts seek to recognize and uphold "the principles that the corporation exists as a separate legal entity and that owner liability for the debts of the corporation is limited." ... The corporate veil, however, may be pierced "if the corporate form is used to defeat public convenience, justify wrong, commit fraud, or defend crime"-a misconduct standard. In addition, in Uchitel Co. v. Telephone Co., we also recognized that the corporate veil may be piereed when a corporation is nothing more than a "mere instrument" of a shareholder, and we laid out six primary factors to evaluate the rationality of imposing personal liability on the shareholder.[49]

It is therefore clear that the corporate form may be disregarded in Alaska under either of two alternate theories. The relation between the theories is disjunctive, not conjunctive.⁵⁰ Accordingly, there is no merit to Brown's argument that the " 'alter-ego' theory is murky, at best." Reviewing de novo the superior court's determinations of law, we affirm its conclusion that there are two alternate tests for piercing the corporate veil in Alaska, one dealing with mere instrumentality and the other with misconduct.

Also contrary to Brown's assertion, the superior court's jury instructions correctly defined the "mere instrumentality" test. The pertinent portion of the instructions is as follows:

There are two ways in which a shareholder of a corporation may be liable for any damages assessed against the corporation: one, if the shareholder has used the corporate form to defeat public convenience, justify wrong, commit fraud or defend erime ... or two, if the corporation is the mere instrumentality or alter ego of the shareholder.

The superior court then proceeded, correctly, to recite the Uchitel factors. We conclude that the superior court properly instructed the jury on the applicable law.

Next, Brown argues that the superior court offered an incorrect answer when the jury asked: "please define 'mere instrumentality or alter ego'; does this mean occasional or continuous activities?" The superior court responded:

The conduct need not be continuous. It may be occasional conduct, but that conduct must be significant enough to meet the test described in Instruction No. 18A, B. The term "mere instrumentality or alter ego" is the conclusory label applied to the corporation if the test has been met.

In other words, the superior court referred the jury back to its original instructions. We affirm the superior court's instruction to the jury in response to the jury's question.

Finally, Brown argues that the facts do not support piercing the corporate veil. Brown made this argument to the superior court in his "Memorandum In Support Of Motion For Entry Of Judgment In Favor Of Edward Brown." We construe that motion as a motion for judgment notwithstanding the verdict, and we construe Brown's argument on appeal as a challenge to the denial of his motion. In Roderer v. Dash,⁵¹ we explained that we will not consider a court's refusal to grant judgment notwithstanding the verdict if the party failed to move for directed verdict at the close of evidence.⁵² Brown did not move for directed verdict at the close of evidence, and thus, we will not consider the court's refusal to grant judgment notwithstanding the verdict.

E. The Superior Court Did Not Err In Awarding Knowles Overtime Compensation And Penalties Under AWHA.

After the jury determined that Brown owed Knowles an additional bonus of $62,811, the superior court accepted Knowles's argument that he was entitled to overtime compensation for the additional bonus, based on AWHA.⁵³ AWHA also grants penalties, including liquidated damages in an amount equal to the unpaid overtime compensation,⁵⁴ and the superior court awarded those as well. Brown offers two arguments on appeal against the superior court's granting of Knowles's overtime and derivative AWHA claims. We address each argument in turn.

1. The superior court did not err in failing to dismiss Knowles's overtime and derivative AWHA claims as time-barred.

On September 25, 2002, Knowles received a bonus of $100,000. Knowles maintained that his bonus agreement with International Steel entitled him to a greater sum. The jury found that Brown did in fact owe Knowles an additional bonus of $62,811. Based on AWHA's requirement that overtime be paid on bonuses like Knowles's, the superior court awarded Knowles overtime on the increase in his bonus. Also pursuant to AWHA, the superior court awarded Knowles an equal amount in liquidated damages. Finally, AWHA grants Knowles additional penalties in the form of attorney's fees and costs,⁵⁵ and the superior court granted those to Knowles as well, at least in part.⁵⁶

Brown argues that Knowles's overtime and derivative claims were barred by AWHA's two-year statute of limitations. The superior court addressed this issue in detail and correctly determined that Knowles's claims were not time-barred.

As an initial matter, neither party disputes that under AWHA, "[aln employee is entitled to overtime compensation for hours worked in excess of eight hours a day" and "for hours worked in exeess of 40 hours a week.⁵⁷ Chapter 15 of the Alaska Administrative Code (AAC) makes clear that an employee receiving a bonus may be entitled to overtime compensation on that bonus,⁵⁸ and neither party disputes on appeal that the bonus agreement between Knowles and International Steel should have entitled Knowles to overtime compensation. But overtime claims under AWHA, and the liquidated damages that may derive from them, are subject to a two-year statute of limitations:

An action for unpaid minimum wages, unpaid overtime compensation, or liquidated damages under [AWHA] is forever barred unless it is started within two years after the cause of action accrues. For the purposes of this section an action is considered to be started on the date when the complaint is filed.[59]

The decisive issue is the date upon which Knowles's cause of action for unpaid overtime accrued. Because the term "accrue" is not defined in AWHA, and because AWHA calls for undefined terms to be construed in accordance with the federal Fair Labor Standards Act or regulations adopted under it,⁶⁰ the superior court inferred from an analysis of federal law that the cause of action for a non-discretionary bonus like the one paid to Knowles "does not acerue until the bonus should be paid." We agree with the superior court's analysis of federal law.⁶¹ The terms of Knowles's bonus agreement tied < the amount of his bonus to accounting procedures that might be performed long after the completion of Knowles's work. Thus, his cause of action for unpaid overtime could not have accrued until the accounting procedures had been completed and the bonus had been calculated.

The parties disputed whether the accounting on the projects underlying Knowles's bonus claims had been completed by January 19, 2008, two years prior to the filing of the complaint on January 19, 2005. The superior court reviewed the evidence submitted by the parties, including a November 2004 document, referring to "wages and/or bonus payments which are outstanding and currently owed by International Steel to Knowles," and according to which "the parties will determine at a later time the total amount which Knowles is owed." The superior court found that Knowles's bonus had not been determined by November 2004, and thus, the cause of action had not accrued as of January 19, 2008. The overtime claim was therefore timely filed.

As the superior court observed, had Brown told Knowles that International Steel owed no bonus, or owed a specific amount in bonus, then "that assertion would have triggered the running of the statutory period." But Brown made no such assertion:

Brown and [International Steel] cannot be permitted to put off an accounting on one or more projects, all the while telling Knowles, for months, if not years, that the amount of the bonus was uncertain, and then, when Knowles files his complaint, take the position in litigation that the bonus should have been paid years ago or that the amount of the bonus was known or should have been known sooner and thus the complaint was untimely filed.

Because the superior court's factual findings were not clearly erroneous and its legal interpretations were not error, we affirm its decision regarding the timeliness of Knowles's claims.

2. The court's calculation of the overtime and derivative AWHA claims did not amend the jury's findings.

Brown argues that the superior court's award was based on improper interference. Brown argues that this was error "because it essentially asked the superior court to make new factual findings and engage in additur as to disputed facts." Brown also suggests that the jury's $62,311 bonus calculation may already have included "some sort of overtime calculation." We conclude that the superior court did not modify the jury's findings, and that Brown waived any right to a jury trial on the issues determined by the superior court post-verdicet.

First, Brown's claims that the superior court's post-verdict determinations were a form of "additur," or "disturbed" the jury verdict, or "amend[ed] the jury verdict," are without merit. Brown asserts that the jury may have incorporated Brown's overtime liability into its calculation of the bonus owed to Knowles, despite the absence of any reference to overtime liability in the jury's instructions, or in the wording on the special verdict form, which refers only to "additional bonus compensation." The superior court's post-verdict determinations in no way modified or disagreed with the factual determinations made by the jury.

Second, Brown's suggestion that the superior court's post-verdict determinations may have violated his right to a trial by jury under the Alaska Constitution is equally without merit. Article I, section 16 of the Alaska Constitution provides, "In civil cases where the amount in controversy exceeds two hundred fifty dollars, the right of trial by a jury of twelve is preserved to the same extent as it existed at common law." But Rule 39(a) of the Alaska Rules of Civil Procedure clarifies that the right to a jury trial in general does not preclude a litigant from waiving the right to a jury trial on a specific issue:

When trial by jury has been demanded and not waived ... the trial of all issues so demanded shall be by jury, unless (1) the parties or their attorneys of record, by written stipulation filed with the court or by an oral stipulation made in open court, consent to trial by the court sitting without a jury....

At trial, Brown's attorney consented to the trial of certain issues by the court sitting without a jury. The concession arose during a discussion of what questions to include in the jury instructions, while the superior court considered aloud how to calculate overtime on Knowles's bonus if the jury determined that he was entitled to one:

THE COURT: I mean, because otherwise we're going to-I mean, it seems to me that if they say it's-he's owed $70,000 worth of a bonus....

[BROWN'S ATTORNEY]: Be happy to let the parties and/or the Court decide that after.

THE COURT: He's entitled to overtime on that. That's pretty clear to me, because bonuses get turned in-you know, you add them to your regular wage rate.

[KNOWLES'S ATTORNEY]: I would-I believe that....

[BROWN'S ATTORNEY]: There's a potential argument with that, but I don't even know if we'll raise it. We're not talking about much money.... [WJle're talking 5- or $6,000. ... I'd be happy to let the Court make that add-on.... Even if you ... have to make a factual determination.

THE COURT: All I have to do, then, is say to them is he entitled to bonus, what's the amount.

[BROWN'S ATTORNEY]: Yes.

[KNOWLESS ATTORNEY]: Yes.

THE COURT: ... And if it turns out we can't agree on what happens, it'll be a judge question.

[BROWN'S ATTORNEY]: I would agree to that.

Brown's attorney not only explicitly invited the superior court to make the determination of how much overtime Knowles was owed on any unpaid bonus compensation found by the jury, he also explicitly agreed to submit to the jury, in relation to Knowles's bonus, only the two questions that were in fact submitted to the jury on that topic: Did International Steel owe Knowles additional bonus compensation? And, if so, how much? By limiting the jury's bonus questions to these two issues, Brown's attorney conceded that the superior court, and not the jury, would make any factual determinations not encompassed by these questions and necessary to determine Brown's liability as a result of the bonus, particularly in relation to overtime.

In addition, Brown's attorney agreed that if the parties could not agree "on what happens" as a consequence of the jury's bonus determination, the disputed issues should be resolved by the judge rather than a jury. As it happened, the parties could not agree on what happens under AWHA when an employer in International Steel's situation fails to pay part of the bonus of an employee in Knowles's situation. The superior court resolved the outstanding issues as "a judge question," precisely as the parties agreed. We thus affirm the superior court's calculation of Brown's overtime-related liabilities.

F. The Superior Court Did Not Abuse Its Discretion In Its Attorney's Fees Award.

Brown offers several arguments for the reversal of the superior court's fee award. Specifically, Brown argues that: (1) Knowles was not, in fact, the prevailing party in the case; (2) the superior court incorrectly awarded AWHA's penalty fees for legal work on Knowles's non-AWHA claims; and (8) Heidi should have received attorney's fees under Civil Rule 82.

1. The superior court did not abuse its discretion in determining that Knowles was the "prevailing party."

Despite his appeal, Brown argues that he, and not Knowles, was the prevailing party in the litigation below, or at least that the litigation was a "wash" in which neither party prevailed.

We note at the outset that while "prevailing party" is the standard under Rule 82 for awarding attorney's fees, the superior court made clear that the vast majority of the fees it awarded to Knowles derived from AWHA's penalty provision, AS 23.10.110(e).⁶² The latter provision is triggered "[ilf the plaintiff prevails in an action for unpaid overtime compensation." ⁶³

Brown emphasizes on appeal the value of the claims on which Knowles did not prevail. But "[flailure to recover the full measure of relief sought or to prevail on all the issues raised does not necessarily preclude that party from 'prevailing party' status, provided that he is successful with regard to the 'main issue in the action.' ⁶⁴ In order to establish that the superior court did not abuse its discretion in identifying Knowles as the prevailing party, it is sufficient to note that Knowles emerged with a judgment that Brown had failed to pay him $62,811 in bonus compensation. It was reasonable to conclude that the bonus claim was the main issue in the action below, even if Knowles's unsuccessful claim to a wage raise could in theory have secured an even greater recovery.

2. The superior court did not abuse its discretion in awarding AWHA penalty fees to Knowles.

Against the superior court's calculation of attorney's fees for Knowles, Brown argues that the superior court abused its discretion by placing too much weight on Knowles's overtime claim under AWHA. Brown argues that Knowles's claim for his unpaid bonus was primarily a contract claim, and thus should have made Knowles eligible only for Rule 82 fees. In addition, Brown defeated Knowles's most significant AWHA claim, which asserted unpaid wages based on a claimed raise.

As the superior court noted, AWHA's fee award "is intended to provide a very significant disincentive to employers who might be pondering short changing an employee her wages or not settling a lawsuit making that claim." - On its face, AWHA simply awards "reasonable" attorney's fees to prevailing plaintiffs,⁶⁵ without further specification of the term "reasonable," thus granting substantial discretion to trial courts. Brown failed to pay Knowles overtime compensation of $22,125.14. There is no evidence to suggest that Knowles could have obtained the overtime payment due to him by any avenue other than something resembling the very costly and protracted litigation that ultimately took place. As Knowles notes, "The effort required to secure a judgment against Brown was complex and expensive in terms of discovery and trial."

Under these cireumstances, requiring Brown to pay 60% of Knowles's attorney's fees was not an abuse of discretion. Brown unlawfully withheld $22,125.14 in overtime compensation from Knowles over the course of several years, forcing Knowles to pursue a costly course of litigation in order to recover. It was not arbitrary, capricious, or manifestly unreasonable to conclude that at least 60% of Knowles's attorneys's work on the complexly interwoven claims in the case would have been necessary to prevail on Knowles's sue-cessful AWHA claims alone.⁶⁶

3. The superior court did not abuse its discretion in refusing to grant Rule 82 attorney's fees to Heidi.

Brown argues that Heidi is entitled to Rule 82 attorney's fees as a prevailing party against Knowles, based on Knowles joining Heidi as a defendant in his Second Amended Complaint, deposing her, then dismissing her with prejudice at the commencement of the trial. At that time, Heidi then dismissed - her - counterclaims _ against Knowles. Knowles suggests that he tried to dismiss Heidi at the close of discovery, at the time he filed his Third Amended Complaint, but that she "declined to sign Knowles's proposed stipulations for dismissal, although she did not object to dismissal."

On February 12, 2009, the superior court declared itself as yet unwilling to determine whether Heidi or Knowles was the prevailing party as between themselves, and requested further briefing. After review of the subsequent briefing, the superior court found that neither Heidi nor Knowles was a prevailing party as between each other, and thus denied Heidi's motion for attorney's fees.

Heidi seeks attorney's fees under Civil Rule 82. Rule 82(b)(2) states: "In cases in which the prevailing party recovers no money judgment, the court ... shall award the prevailing party in a case resolved without trial 20 percent of its actual attorney's fees which were necessarily incurred." As the superior court recognized, the dispositive issue is who, if anyone, between Heidi and Knowles, was the prevailing party.

Though the superior court's April 27, 2009 order denying Heidi's motion was apparently accompanied by no memorandum laying out the order's rationale,⁶⁷ the superior court was within its discretion to maintain its initial impression that neither Heidi nor Knowles "was a prevailing party since neither really pursued the claim or claims against the other."

v. - CONCLUSION

For the foregoing reasons, we AFFIRM the superior court's decision in all respects.

FABE, Justice, dissenting.

1

. See AS 23.10.060.

2

. Jacob v. State, Dep't of Health & Soc. Servs., 177 P.3d 1181, 1184 (Alaska 2008) ("We apply our independent judgment to questions of law, adopting 'the rule of law most persuasive in light of precedent, reason, and policy'" (quoting Guin v. Ha, 591 P.2d 1281, 1284 n. 6 (Alaska 1979))).

3

. In re Estate of Fields, 219 P.3d 995, 1003 (Alaska 2009) (internal quotation marks omitted).

4

. Ayuluk v. Red Oaks Assisted Living, Inc., 201 P.3d 1183, 1197 n. 30 (Alaska 2009).

5

. In re Protective Proceedings of W.A., 193 P.3d 743, 748 (Alaska 2008).

6

. Id. (quoting Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004)).

7

. Dashiell R. v. State, Dep't of Health & Soc. Servs., Office of Children's Servs., 222 P.3d 841, 849 (Alaska 2009).

8

. - Okagawa v. Yaple, 234 P.3d 1278, 1280 (Alaska 2010).

9

. Id. (quoting Cook Schuhmann & Groseclose, Inc. v. Brown & Root, Inc., 116 P.3d 592, 597 (Alaska 2005)) (internal quotation marks omitted).

10

. Id.

11

. "The filing of a ... bankruptcy petition commences a case in the bankruptcy court." In re Transcolor Corp., 296 BR. 343, 354 (Bankr.D.Md.2003) (referring to 11 U.S.C. §§ 301, 303).

12

. 11 U.S.C. §§ 101-1330 ("the Bankruptcy Code").

13

. 11 U.S.C. § 362(a)(3); see also Seymour Roberts, Jr., Alter-Ego Claims in Bankruptcy, 2005 Norton Ann. Surv. Bankr L. Part I § 18 at Part V (''The Stay") (2006); In re S.J. Acquisition, Inc., 817 F.2d 1142, 1150 (5th Cir.1987).

14

. 11 U.S.C. § 541(a)(1).

15

. See, e.g., Transcolor, 296 B.R. at 359 (noting that § 541(a) "casts a wide net"); Koch Ref. v. Farmers Union Cent. Exch., Inc., 831 F.2d 1339, 1343 (7th Cir.1987) (noting that § 541 "offers an expansive definition of property comprising the estate").

16

. See SI. Acquisition, 817 F.2d at 1150 ("a section 362(a)(3) stay applies to a cause of action that under state (or federal) law belongs to the debtor"); In re JNS Aviation, LLC, 350 B.R. 283, 291 (Bankr.N.D.Tex.2006) (concluding "that a cause of action belongs to the bankruptcy estate if, under applicable state law, the debtor could have raised the claim as of the commencement of the case").

17

. In re E.F. Hutton Sw. Props. II, Ltd., 103 B.R. 808, 812 (Bankr.N.D.Tex.1989).

18

. - Transcolor, 296 B.R. at 359.

19

. In re E.F. Hutton, 103 B.R. at 812 ('The injury characterization analysis should be considered as an inseparable component of whether an action belongs to the corporation or individual [creditor]."); In re Teknek, LLC, 563 F.3d 639, 647 (7th Cir.2009) ("To determine whether an action accrues individually to a claimant or generally to a corporation, then, we must look to the injury for which relief is sought."). If the claim alleges no actionable injury to the corporation, then the corporation has no legal claim against its insider. Stodd v. Goldberger, 73 Cal.App.3d 827, 833, 141 Cal.Rptr. 67 (Cal.App.1977) ("[TJrustee in bankruptcy of a bankrupt corporation, could not maintain an action against defendants to disregard the corporate entity absent some allegation of injury to the corporation giving rise to a right of action in it against defendants.").

Of course, for such a claim to be viable, applicable state law must allow a corporation to pierce its own veil. States are split on this issue. Compare In re S.I. Acquisition, 817 F.2d at 1152-53 (determining that Texas law would allow a corporation to pierce its own veil), with In re Ozark Rest. Equip. Co., 816 F.2d 1222, 1225-26 (8th Cir.1987) (determining that Arkansas law would not allow a corporation to pierce its own veil). See In re Icarus Holding, LLC, 391 F.3d 1315, 1321 (11th Cir.2004) certified question answered sub nom. Baillie Lumber Co. v. Thompson, 279 Ga. 288, 612 S.E.2d 296 (2005) ("Like many courts that have addressed this issue, we hold that in order to bring an exclusive alter ego action under section 541, a bankruptcy trustee's claim should (1) be a general claim that is common to all creditors and (2) be allowed by state law.").

But it is not necessary to reach this issue here, because the veil-piercing claim was not property of the bankruptcy estate, as shown below.

20

. In re EF. Hutton, 103 B.R. at 811-12.

21

. 25 F.3d 1281 (5th Cir.1994).

22

. Id. at 1284. The dissent analyzes whether "'the estate in this case did have standing to bring an alter ego claim against Brown." (Emphasis added.) But that is the wrong question. The correct question is whether the estate had standing to bring this claim. Because this claim (one for wages) alleged no injury to the corporation, the estate lacked standing.

23

. See Alaska R. Civ. Pro. 12(b)(6) (providing that a complaint may be dismissed for failure to state a claim upon which relief can be granted); Keller v. French, 205 P.3d 299, 305 (Alaska 2009) ("Because the Keller plaintiffs allege no plausible injury to their own interests, they lack interest-injury standing.") (emphasis added); Brause v. State, Dep't of Health & Soc. Servs., 21 P.3d 357, 359 (Alaska 2001) ("'The ripeness doctrine requires a plaintiff to claim that either a legal injury has been suffered or that one will be suffered in the future.") (emphasis added). See also Neese v. Lithia Chrysler Jeep of Anchorage, Inc., 210 P.3d 1213, 1219 (Alaska 2009) (affirming summary judgment in favor of certain defendants because the plaintiffs "failed to allege any actual injury caused by" those defendants) (emphasis added).

24

. - In re Educators Group Health Trust, 25 F.3d at 1284.

25

. See Ahcom, Ltd. v. Smeding, 623 F.3d 1248, 1252 (9th Cir.2010) (quoting Stodd v. Goldberger, 73 Cal.App.3d 827, 833, 141 Cal.Rptr. 67 (Cal.App.1977)) (collecting examples of conduct that injures the corporate debtor).

26

. See In re Educators Group Health Trust, 25 F.3d at 1284 ("[If the cause of action does not explicitly or implicitly allege harm to the debtor, then the cause of action could not have been asserted by the debtor as of the commencement of the case, and thus is not property of the estate."); see also Metro. Creditors' Trust v. Pricewaterhousecoopers, LLP, 463 F.Supp.2d 1193, 1200 (E.D.Wash.2006) ("In determining whether the trustee has standing to bring a particular claim, courts should focus on 'whether the Trustee is seeking to redress injuries to the debtor itself caused by the defendants' alleged conduct.'") (quoting Smith v. Arthur Andersen LLP, 421 F.3d 989, 1002 (9th Cir.2005)); In re E.F. Hutton, 103 B.R. at 812 (explaining that the trustee lacks standing to bring a creditor's personal claims because such claims are not "property of the estate").

27. 421 F.3d at 1002. In Caplin v. Marine Midland Grace Trust Co. of New York, 406 U.S. 416, 434, 92 S.Ct. 1678, 32 L.Ed.2d 195 (1972), the United States Supreme Court held that a Chapter 10 trustee did not have standing to sue on behalf of individual creditors. Chapter 10 was the reorganization chapter before Congress enacted the Bankruptcy Code in 1978. See In re Ozark Rest. Equip. Co., 816 F.2d 1222, 1227 (8th Cir.1987).