Opposition Brief — Alaska Trams Corp. v. Alaska Electric Light & Power

9) bron Cut

4

No. 87-1129 FFR 3 1988

CLERK

In The

Supreme Court of the United § States

October Term, 1987

sy

ww

ALASKA TRAMS CORPORATION,

a/k/a ALASKA TRAMS, INC.,

Petitioner,

VS.

ALASKA ELECTRIC LIGHT & POWER COMPANY,

an Alaska Corporation; WILLIAM A. CORBUS; DOES

I-XX; and an aerial right-of-way, an easement 1300

linear feet in length, more or less,

Respondents.

, ——— rons

Vv

ON PETITION FOR A WRIT OF CERTIORARI

TO THE SUPREME COURT OF THE

STATE OF ALASKA

ty.

!

RESPONDENTS’ BRIEF IN OPPOSITION

ty

Vv

Joun F. Cioven, II

FauLKNER, BanFiecp, Doocan

& HoLmeEs

302 Gold Street

Juneau, Alaska 99801

(907) 586-2210

Counsel for Respondenits

COCKLE LAW BRIEF PRINTING CO.. (800) 2225-6964

or call collect (402) 342-2831

~

QUESTIONS PRESENTED FOR REVIEW

I. Does this Court have jurisdiction over issues that

were never raised, argued or decided in the lower courts?

II. Does the dismissal of petitioner’s case for willful

refusal to comply with the trial court’s numerous discovery

orders constitute a denial of due process?

III. Does this Court have jurisdiction over matters

of exclusively state law?

PARTIES TO THE PROCEEDING

The parties to the proceeding are:

Alaska Trams Corporation

Alaska Electric Light and Power Company

William A. Corbus

Does I-XX

An aerial right-of-way, an easement 1300 linear

feet in length, more or less.

Pr Pe

So far as is known to respondents, Alaska Trams Cor-

poration has no parent corporations, subsidiaries, or af-

filiates.

Alaska Electric Light and Power Company has the

following subsidiaries :

1. Alaska Electric Light and Power Company of

Juneau

Haines Light and Power Company

Alaska Land and Pier Company

AJT Mining Properties, Inc.

ee

ili

TABLE OF CONTENTS

Page(s)

QUESTIONS PRESENTED FOR REVIEW ... i

PARTIES TO THE PROCEEDING ii

TABLE OF CONTENTS iii

TABLE OF AUTHORITIES iv

STATEMENT OF JURISDICTION 1

STATEMENT OF THE CASE

REASONS FOR DENYING THE WRIT

I. THIS COURT DOES NOT HAVE JURISDIC-

TION OVER ISSUES THAT WERE NEVER

RAISED OR ARGUED IN THE COURTS

BELOW 3

Il. PETITIONER WAS AFFORDED DUE PRO-

CESS OF LAW BY THE COURTS OF THE

STATE OF ALASKA ..._..

Ill. CONCLUSION

IV. APPENDIX

Alaska Trams Corporation, a/k/a Alaska Trams,

Ine. v. Alaska Electric Light & Power, et al.,

No. 3229 slip op. (Alaska Supreme Court, Oct.

yO ES ORB ieee ee App. 1

Alaska Trans Corporation, a/k/a Alaska Trams,

Ine. v. Alaska Electric Light & Power, et al.

No. 1JU-84-1469 (Alaska Superior Court, Nov.

6, 1985) (Memorandum Decision and Order) App. 14

iv

TABLE OF AUTHORITIES

CasEs

Beck v. Washington, 369 U.S. 541 (1962)

Cardinale v. Louisiana, 394 U.S. 437 (1969) ............

Crowell v. Randell, 35 U.S. (10 Pet.) 368 (1836) .

Dade v. State, 725 P.2d 706 (Alaska 1986)

Hammond Packing Co. v. Arkansas, 212 U.S. 322

(1909)

Hawes Firearms Co. v. Edwards, 634 P.2d 377 —

(Alaska 1981)

National Hockey League v. Metropolitan Hockey

Club, Inc., 427 U.S. 639 (1976) ...................

4,7

Oceanview Homeowner’s Ass’n. v. Quadrant Con-

struction and Engineering, 680 P.2d 793 ae

1984) .

Stone v. Powell, 428 U.S. 465 (1976) ......

Wvle v. R.J. Reynolds Industries, Inc., 709 F.2d

585 (9th Cir. 1983) ......

STATUTES

28 U.S.C. § 1257(3) .........

1, 3,5

STATEMENT OF JURISDICTION

This Court has no jurisdiction over the issues sought

to be raised by the petitioner. As discussed infra, in the

argument on Reasons for Denying the Writ, no federal

question was argued or decided in the state court below.

Both the statute governing the jurisdiction of this Court

on writ of certiorari and this Court’s own rules prevent

petitioner’s case from being heard. See 28 U.S.C. § 1257(3) ;

Supreme Court Rules 17.1(b) and (c) and 21.2(h).

°

STATEMENT OF THE CASE

For a number of years, petitioner Alaska Trams Cor-

poration, a/k/a Alaska Trams, Inc., has talked about con-

structing a hotel/resort and tramway project utilizing the

top of Mt. Juneau in Juneau, Alaska. In furtherance of

these plans, Alaska Trams representatives approached

respondent Alaska Electric Light and Power Company

(hereinafter ‘‘AELP’’) concerning the purchase of AELP

property near downtown Juneau to serve as a hotel site

and lower terminus for the tramway. Alaska Trams also

desired to obtain an extensive aerial easement across other

property belonging to AELP, to permit the passage of the

proposed tram.

During 1975 and 1976, representatives of Alaska

Trams and AELP conducted extensive negotiations con-

cerning these properties (R. 196-199). Although the par-

ties were able to agree on the terms for the sale of the

parcel, they were unable to reach agreement upon the terms

of the separate aerial easement (R. 197-199). Notwith-

standing this lack of agreement, Alaska Trams went ahead

with the purchase of the parcel (R. 23-29, 197-99, 335-37).

In November 1976, the parties entered into a contract

of sale whereby Alaska Trams agreed to purchase a two

and one-half acre parcel of real property from AELP

(R. 23-29). The contract contained a specific description

of the property AELP agreed to sell, which included nei-

ther a description nor a reference to any aerial easements.

AELP delivered a warranty deed to the real property to

a closing agent in December of 1976 (R. 23, 28). At no

time did the parties ever enter into any transaction which

purported to convey the aerial easement.

Over the course of the next eight years, Alaska Trams

made a number of demands that AELP convey an aerial

easement to the company for no additional consideration.

AELP declined to accede to Alaska Tram’s demands. Fi-

nally, Alaska Trams filed suit on August 6, 1984, claiming

breach of the 1976 contract, seeking conveyance of the

easement and claiming damages in excess of one billion

dollars. Each of Alaska Trams’ thirteen causes of action

was dismissed through the grant of summary judgment

motions in AELP’s favor. The trial court also dismissed

Alaska Trams’ suit with prejudice pursuant to Alaska

Civil Rule 37(b)(2), as a sanction for Alaska Trams’

willful and inexcusable refusal to comply with at least

four separate discovery orders.

Alaska Trams appealed to the Alaska Supreme Court,

challenging the imposition of dismissal as a discovery

sanction, as well as the lower court’s unfavorable rulings

on several of Alaska Trams’ contract, tort, and condemna-

ee

. ee

3

tion claims. Alaska Trams also appealed the trial court

judge’s and an independent superior court judge’s refusal

to disqualify the trial court judge, Judge Pegues, for

cause. The Alaska Supreme Court upheld the lower court

judges’ refusal to disqualify the trial judge, and affirmed

the court’s imposition of dismissal as a discovery sanction.

Because the supreme court upheld the sanction of dis-

missal, it did not consider Alaska Trams’ other arguments.

REASONS FOR DENYING THE WRIT

I. THIS COURT DOES NOT HAVE JURISDIC.

TION OVER ISSUES THAT WERE NEVER

RAISED OR ARGUED IN THE COURTS BE-

LOW

This Court has jurisdiction to review the decisions of

the highest court of a state only under narrow circum-

stances. See 28 U.S.C. § 1257(3). The jurisdiction extends

only to the state court decisions in which substantial fed-

eral questions have been properly raised in the state

forum. Cardinale v. Louisiana, 394 U.S. 437, 439 (1969) ;

Crowell v. Randell, 35 U.S. (10 Pet.) 368 (1836).

As this Court explained in Cardinale, questions that

are not raised in state court are ‘‘those on which the ree-

ord is very likely to be inadequate, since it certainly was

not compiled with those questions in mind.’’ 394 U.S. at

439. That is exactly the situation here. Alaska Trams ad-

mits that the Alaska Supreme Court ‘‘did not address con-

stitutional due process.’’ (Pet. for Cert., p. 13). This is

not surprising, since the issue was not raised or argued

4

before that court. In the course of petitioner’s 74 page

brief to the Alaska Supreme Court, due process is men-

tioned just once, in the following discussion : |

There are several reasons for increased scrutiny in

review of a litigation ending sanction imposed pur-

suant to Rule 37(b). One reason is that an abuse of

discretion may involve a constitutional due process

violation.

_ _—— ao

(Appellant’s Brief at 61). Only a single citation was of-

fered as support of the statement. No analysis or sub-

stantive argument was presented. In its reply brief be-

fore the Alaska Supreme Court, Alaska Trams did not

mention the federal issue at all.' The Alaska Supreme

Court provided exactly one sentence dealing with due

process. It said:

Although sanctions which end litigation are generally

disfavored and may even constitute a denial of due

process, the imposition of such sanctions is justified

if the failure to comply with a discovery order is

willful.

(Appendix at 7). These equivocal references do not con- |

stitute an argument or an adjudication. |

The United States Supreme Court has no jurisdiction |

to review the action of a state court unless a federal issue |

is raised and decided in the lower court. This principle |

was stated clearly in Cardinale: ‘‘It was very early es-

'The argument was never even inferentially raised before

the trial court, within whose discretion the sanction power re-

sides. See Dade v. State, 725 P.2d 706, 708 (Alaska 1986); ac-

cord, National Hockey League v. Metropolitan Hockey Club,

427 U.S. 639, 642-43 (1976).

SS ee oe

tablished that the Court will not decide federal constitu-

tional issues raised here for the first time on review of

state court decisions,’’ 394 U.S. at 438. Even the petitioner

concedes that the federal issue it now seeks to create was

not addressed by the state court. There is therefore noth-

ing for this Court to review.

In addition, the issue was not raised in the Statement

of Points on Appeal required to be filed by every Alaskan

appellant. See Alaska Rule of Appellate Procedure 210(e).

The Alaska Supreme Court has held that matters not

raised in the Statement of Points on Appeal will not be

considered. Oceanview Homeowner’s Ass'n. v. Quadrant

Construction and Engineering, 680 P.2d 793, 797 (Alaska

1984). This Court has made the same point. In Beck v.

Washington, 369 U.S. 541, 553 (1962), this Court held

that the issue sought to be raised by the petitioner had

» been waived because it had not been raised in the assign-

ment of errors below, had not been argued in the peti-

tioner’s brief, and had been mentioned only once in the

petitioner’s 125 page brief before the lower court.

For the reasons given in Beck, and because of the

limitations imposed by the grant of jurisdiction in 28 U.S.C.

1257(3), this court should refuse to grant a review of pe-

titioner’s alleged federal claim.

II. PETITIONER WAS AFFORDED DUE PRO.

CESS OF LAW BY THE COURTS OF THE

STATE OF ALASKA

The Alaska Supreme Court’s decision is obviously

correct on the merits. Alaska Trams repeatedly refused

to produce materials related to its alleged damages, financ-

a

6

ing, ownership and tax liability despite four separate or-

ders that it do so. See Alaska Supreme Court’s detailed

history of discovery orders at Appendix 10-12. The trial

court’s final order required that Alaska Trams comply

fully with the court’s order to produce by August 27, 1985

or prove to the court its inability to comply. The court

warned that failure to heed its order would result in dis-

missal with prejudice of Alaska Trams’ complaint. Alaska

Trams nevertheless failed to produce the requested docu-

ments or to make any showing that it was unable to comply

with the court’s order. Appendix 11-12, 19. At this point

more than a year had passed since AENLP’s original re-

quest for the materials in question. AELP moved to dis-

miss Alaska Trams’ action on September 5th, 1985. Ap-

pendix 12.

~

Following AELP’s motion, Alaska Trams invited

counsel for AELP to attend a production session in an

unrelated case, at which many, but not all, of the requested

materials were finally produced? The trial court found

that this belated discovery did not preclude dismissal of

Alaska Trams’ complaint. It noted that

Alaska Trams willfully disobeyed orders of this court

and ultimate discovery was made only after the final

deadlines set in this case and then as a result of events

in an unrelated case....

Appendix 20. The court acknowledged that litigation-end-

ing sanctions should be employed sparingly, but found

that

2Contrary to the implications set forth at page 9 of the

Petition, the amount of withheld material was quite voluminous,

comprising most of three entire boxes of documents (R. 1427-

1442).

they are necessary here to deter just the kind of con-

duct that Alaska Trams has purposely decided to

employ.

Appendix 22. This Court has expressly recognized the

appropriateness of litigation-ending sanctions to deter par-

ties who would be inclined to ignore a court’s discovery

orders in the absence of such a deterrent. National Hockey

League v. Metropolitan Hockey Club, Inc., 427 U.S. 639

(1976).

As the trial court noted, the requested documents

were essential to Alaska Trams’ claims that it had changed

position in reliance on AELP’s alleged promises and had

incurred damages. They were also important to prove

or disprove AELP’s claim that Alaska Trams had never

secured financing fer the project because the project was

not economically feasible. Appendix 20-21. These issues

went to the heart of Alaska Trams’ case. In its opinion, the

Alaska Supreme Court explained that the existence of

damages is often of primary importance in litigation;

information concerning damages is essential in assessing

the strength of an opponent’s case, and thus in deter-

mining fundamental questions of trial strategy, such as

one’s position toward settlement. Appendix 9-10. Accord

Wyle v. RJ. Reynolds, Industries, Inc., 709 F.2d 5835,

591 (9th Cir. 1983).

The economic feasibility of the project was relevant

to Alaska Trams’ intent in entering the land purchase

contract with AELP; information Alaska Trams provided

to prospective financers, and the conditions on which any

financing was advanced, had bearing on whether Alaska

Trams’ project constituted a ‘‘ public use’’ under Alaska’s

eminent domain laws. The same information would have

yielded evidence as to whether ‘equitable relief was re-

quired to make Alaska Trams whole, and information con-

cerning ownership of the tramway company was relevant

to the issues of witness identification and potential bias,

among others.

Clearly, the requested information contained material

that was fundamental to every aspect of Alaska Trams’

claims. Alaska Trams’ refusal to produce materials that

would corroborate its assertions that the tramway project

was economically viable and that hundreds of millions of

dollars were at stake in the litigation, together with its

failure to offer any reasonable justification for its refusal

to do so, suggested strongly that such evidence did not

exist or that the requested materials would tend to disprove

Alaska Trams’ claims. Therefore, the superior court con-

cluded it was

reasonable for this court to infer that Alaska Trams

has no case—or at best a very weak case—on the

merits.

Appendix 21. Consequently, the discovery sanction im-

posed was not ‘‘mere punishment,’’ but recognized Alaska

Trams’ failure to produce documents essential to its case

as ‘‘an admission of the want of merit’’ of its asserted

claims. Hammond Packing Co. v. Arkansas, 212 U.S. 322,

351 (1909).

There is no federal question for this Court to decide.

The Alaska Superior Court dismissed Alaska Trams’ suit

because of violations of discovery orders issued pursuant to

Rule 37(b)(2)(C) of the Alaska Rules of Civil Procedure.

Alaska Trams failed to produce documents after explicit

warnings that dismissal would result if Alaska Trams

continued to defy the court’s orders. As a result of Alas-

ka Trams’ ‘‘willful noncompliance’’ with court orders,

and in accordance with the Alaska law set out in Hawes

Firearms Co. v. Edwards, 634 P.2d 377, 378 (Alaska 1981),

the trial court imposed the sanction of dismissal.

The real issue in this suit is purely one of state law.

The state courts must be permitted to interpret the state

rules of civil discovery in accordance with state law.

Where they do so with full appreciation and deference

to federal due process standards, their decisions should

not be disturbed. Cf. Stone v. Powell, 428 U.S. 465, 493

n. 35 (1976). Because the state courts here have inter-

preted and applied the state rules properly, and have

not raised any implicit or explicit due process concerns,

no important federal question can be at issue.

III. CONCLUSION

One of the dominant features of this litigation, from

its very inception, has been the petitioner’s flagrant dis-

regard of both the substantive and procedural legal doc-

trines which govern Alaska Trams’ extravagant claim.

Just as Alaska Trams ignored the numerous reasonable

discovery orders of the trial court, so has it now ignored

the requirements for jurisdiction in this Court. In its

petition, Alaska Trams has raised and argued issues which

have not previously been the subject of briefing, argu-

ment or even serious consideration before the Alaska

courts. On that basis alone, this Court should refuse to

entertain Alaska Trams’ petition.

10

For Alaska Trams to argue that the Superior Court’s

sanction constituted a denial of due process is ludicrous.

In three carefully crafted opinions totalling 68 pages the

trial court considered the merits of each one of Alaska

Trams’ causes of action. None was sufficient to withstand

summary judgment. Alaska Trams’ flagrant disregard of

the court’s orders and willful abuse of the discovery pro-

cess constituted an independent justification for the dis-

missal of its case. The Alaska Supreme Court affirmed

the lower court’s determination that Alaska Trams’ be-

havior fully justified the imposition of a litigation-ending

sanction under Alaska law. The courts of Alaska have

not denied Alaska Trams due process. Alaska Trams’

problems are clearly of its own making, and do not war-

rant the intercession of the United States Supreme Court.

RESPECTFULLY SUBMITTED this 3rd day of

February, 1988.

FauLkKner, BANFIELD, Doocan

& Ho_mEs

Joun F. Cioven, II

302 Gold Street

Juneau, Alaska 99801 ~

(907) 586-2210

Attorneys for Respondents

App. 1

APPENDIX

NOTICE: This opinion is subject to formal correction

before publication in the Pacific Reporter. Readers are re-

quested to bring typographical or other formal errors to

the attention of the Clerk of the Appellate Courts, 303 K

Street, Anchorage, Alaska 99501, in order that corrections

may be made prior to permanent publication.

THE SUPREME COURT OF THE

STATE OF ALASKA

ALASKA TRAMS

CORPORATION, a/k/a

ALASKA TRAMS, INC., File No. S-1360

Appellant,

OPINION

v.

ALASKA ELECTRIC LIGHT &

POWER, an Alaska Corporation;

WILLIAM A. CORBUS; DOES

I-XX; and an AERIAL RIGHT-

OF-WAY, an Easement 1300 Linear

Feet in Length, More or Less,

[ No. 3229 - October

2, 1987]

Appellees.

me ae a a a a a a a Ne ee ee Nee ee ae ee”

Appeal from the Superior Court of the State of Alas-

ka, First Judicial District, Juneau, Rodger W. Pegues

and Henry C. Keene, Jr., Judges.

Appearances: Bruce A. Moore and A. Lee Petersen,

Law Offices of A. Lee Petersen, Anchorage, for Ap-

pellant. John F. Clough, ITI, Leon T. Vance, and Ann

(i. Vance, Faulkner, Banfield, Doogan & Holmes,

Juneau, for Appellees. \

App. 2

Before: Rabinowitz, Chief Justice, Burke, Matthews,

Compton, and Moore, Justices.

BURKH, Justice.

This appeal arises from the dismissal of appellant

Alaska Trams’ action against appellees Alaska Electric

Light & Power, William A. Corbus, and certain real prop-

erty (hereinafter AELP, collectively) to secure an aerial

easement required for the construction of a tramway.’ Be-

cause we are unable to say that the trial court abused its

discretion in dismissing the action, the judgment of the

superior court is affirmed.

I

For several years, Alaska Trams had wanted to build

a tramway between the City of Juneau and the top of Mt.

Juneau as part of a resort/hotel complex. In prepara-

tion for the anticipated construction, Alaska Trams con-

tacted AELP to purchase certain real property to be used

as a base for the tram terminal and hotel. Alaska Trams

also wanted to obtain an aerial easement to permit the

tramway to cross AELP’s adjacent property.

Negotiations were consummated in November 1976

when Alaska Trams and AELP signed a contract for the

sale of 2.5 acres near downtown Juneau. The sale was

closed in December 1976. The contract did not mention

an aerial easement over adjacent AELP property. It is

this omission which forms the basis of this appeal.

Roughly nine months later, in August 1977, Alaska

Trams sent a letter to AELP in which Alaska Trams indi-

1. William A. Corbus and Does I-XX are employees or

agents of AELP.

App. 3

cated that it was aware that the contract did not contain

explicit mention of the easement in question. The letter also

indicated, however, that it was Alaska Trams’ belief that

‘*this was just an oversight in typing.’’ This letter was the

opening salvo: between 1977 and 1984, Alaska Trams sent

AELP no fewer than twelve letters, all threatening legal

action if AELP did not immediately convey the aerial ease-

ment. AELP did not convey the easement; Alaska Trams

finally filed suit on August 6, 1984 seeking conveyance of

the easement or damages.

In January 1985, Alaska Trams filed a motion to dis-

qualify Judge Pegues for cause. Judge Pegues denied the

motion. The motion was referred to an independent judge,

Judge Keene, for a ruling pursuant to AS 22.20.020(c).?

Judge Keene also denied the motion.

Ultimately, all of Alaska Trams’ causes of action were

dismissed on AELP’s various summary judgment motions.

In addition, the trial court dismissed Alaska Trams’ action

with prejudice as a sanction under Civil Rule 37(b) (2)? for

2. AS 22.20.020(c) provides in part:

If a judicial officer denies disqualification the question

shall be heard and determined by another judge assigned

for the purpose by the presiding judge of the next higher

level of courts or, if none, by the other members of the

supreme court.

3. Alaska R. Civ. P. 37(b)(2) provides in part:

If a party or an officer, director, or managing agent of a

party . . . fails to obey an order to provide or permit dis-

covery, . . . the court in which the action is pending may

make such orders in regard to the failure as are just, and

among others the following:

(C) An order . .. dismissing the action or proceeding

or any part thereof, or rendering a judgment by default

against the disobedient party ....

App. 4

what the trial court termed Alaska Trams’ unexcused and

willful refusal to comply with discovery orders. This ap-

peal followed.

Il

The first issue we address concerns Judge Pegues’ and

Keene’s refusal to disqualify Judge Pegues after he was

challenged for cause. Alaska Trams argues that both

Judge Pegues and Judge Keene based their determinations

solely upon AS 22.20.020(a)(6),* rather than upon the re-

cusal considerations discussed in Alaska Code of Judicial

Conduct Canon 3(C)(1)(a).5 Alaska Trams asserts that,

had Canon 3(C) been considered, Judge Pegues would have

been disqualified because of the reasonable inference that

Judge Pegues was biased against Alaska Trams. This ar-

gument is supported by citation to a number of instances

of alleged bias, including counsel’s generalized feelings of

4. AS 22.20.020(a)(6) provides:

A judicial officer may not act as such in a court of which

the judicial officer is a member in an action in which....

(6) the judicial officer feels that, for any reason, a fair

and impartial decision cannot be given.

Subsections (1)-(5) of AS 22.20.020(a) involve objective measures

of cause for disqualification, such as personal involvement in

a case, as opposed to the subjective measure relevant here.

5. Alaska Code of Judicial Conduct Canon 3(C)(1) provides:

A judge should disqualify himself in a proceeding in which

his impartiality might reasonably be questioned, including

but not limited to instances where:

(a) he has a personal bias or prejudice concerning

a party, or personal knowledge of disputed evidentiary

facts concerning the proceedings; ...

App. 5

unfair treatment, Judge Pegues’ past involvement in en-

vironmental protection movements, unspecified sarcastic

comments made by Judge Pegues in another proceeding,

and a comment contained in a memorandum opinion in

which Judge Pegues denied Alaska Trams’ motion for

preliminary injunction.®

In making this argument, Alaska Trams misses an im-

portant point: the trial court explicitly considered the re-

cusal standard found in Canon 3(C) and determined that

recusal under that standard was inappropriate. Thus,

Alaska Trams’ argument alleging that the judge failed to

consider the ethical canon is without merit.’

The remaining question is whether Judges Pegues’

and Keene’s refusal to disqualify Judge Pegues consti-

tuted an abuse of discretion. Amidon v. State, 604 P.2d

575, 577 (Alaska 1979). Such a refusal is to be accorded

great weight and will be reversed on appeal only when it

is evident that reasonable persons could not rationally

6. In the order denying the preliminary injunction, Judge

Pegues referred to ‘Alaska Trams’ imminent, alleged irreparable

injury.” He then noted that: :

The court uses the modifier “alleged” for a reason. There

is something about Alaska Trams’ proposal that invokes the

memory of Catherine the Great’s Potemkin villages.

The court later explained this comment as an attempt at “ju-

dicial humor.’

7. The recusal provision found in Canon 3(C)(1)(a) and the

reasons requiring disqualification set forth in AS 22.20.020(a) (6)

are related, but somewhat different. We have said that where

a judge’s refusal to disqualify himself is “patently unreasonable,”

we will reverse, but that in cases “[w]here only the appearance

of partiality is involved” we will require a “greater showing”

for reversal. Amidon v. State, 604 P.2d 575, 577 (Alaska 1979).

App. 6

come to the same conclusion on the basis of known facts.

Blake v. Gilbert, 702 P.2d 631, 640 (Alaska 1985). In this

regard, ‘‘[i]t should be kept in mind that a judge has as

great an obligation not to disqualify himself, when there is

no occasion to do so, as he has to do so in the presence of

valid reasons.’’ Amidon 604 P.2d at 577.

Applying these principles to the present action, we are

unable to say that the refusal to disqualify Judge Pegues

was an abuse of discretion. A review of the record as a

whole fails to reveal any unfairness in the conduct of the

trial and the alleged instances of bias, considered either

collectively or individually, fail to demonstrate any specific

bias or generalized pattern of bias. We, therefore, affirm

Judges Pegues’ and Keene’s refusal to disqualify Judge

Pegues for cause. |

Ill

In its memorandum opinion, the trial court dismissed

Alaska 'l'rams’ complaint with prejudice pursuant to Civil

Rule 37(b) for failure to comply with discovery orders.

The court stated, in part:

The court previously issued orders on April 11, 1985,

and May 3, 1985, requiring Alaska Trams to make dis-

covery as requested by [AELP]. On July 8, 19835,

this court ordered Alaska Trams to make discovery by

August 27, 1985, of the documents to be requested by

[AELP] by July 28, 1985. The court granted this ad-

ditional time in order for [AELP] to restate its dis-

covery requests with still greater specificity to avoid

any further claims of confusion by Alaska Trams.

Alaska Trams was expressly warned that failure to

comply with the order or to show to the court its in-

ability to comply by August 27, 1985, would result in

the complaint being dismissed with prejudice.

.

2

App. 7

This court finds, ... that Alaska Trams willfully

and inexcusably failed to comply with this court’s

order after being warned of the dire consequences.

While litigation-ending sanctions should be imposed

sparingly, they are necessary here to deter just the

kind of conduct that Alaska Trams has purposely de-

cided to employ. Accordingly, [AELP’s] motion to

dismiss with prejudice is granted.

Alaska Trams argues that the dismissal sanction was im-

proper because the court erroneously concluded that Alaska

Trams willfully failed to comply with its discovery orders

and because the sanction was excessive in light of the ma-

terial actually withheld.®

Civil Rule 37(b) authorizes the trial court to impose

a wide range of sanctions on a party who fails to comply

with discovery orders. Dade v. State, Child Support En-

forcement Division ex rel. Lovett, 725 P.2d 706, 708 (Alas-

ka 1986). The purpose of the sanctions is to encourage

discovery and deter noncompliance by allowing trial judges

to enforce their discovery orders, and to ensure that parties

will not profit from their own willful failure to comply

with such orders. Hawes Firearms v. Edwards, 634 P.2d

377, 378 (Alaska 1981). Although sanctions which end

litigation are generally disfavored and may even constitute

a denial of due process, the imposition of such sanctions

is justified if the failure to comply with a discovery order

is willful. Hawes Firearms, 634 P.2d at 378. ‘‘Willful-

8. Alaska Trams also argues that the court’s discovery

orders were “unlawful,” but it does not explain why and we

are unable to perceive a basis for the allegation. Consequently,

we do not consider this part of Alaska Trams’ argument. F.g.,

Forquer v. State, Commercial Fisheries Entry Comm’‘n, 677 P.2d

1236, 1238 n.2 (Alaska 1984); Craig Taylor Equipment v. Petti-

bone Corp., 659 P.2d 594, 596 n.1 (Alaska 1983); State v. O’Neill

Investigations, 609 P.2d 620, 628 (Alaska 1980).

J

App. 8

ness’’ is defined as a conscious intent to impede discovery.

Dade, 725 P.2d at 708; Hawes Firearms, 634 P.2d at 378.

Once noncompliance is shown, the burden is upon the non-

complying party to prove that its failure to provide dis-

covery was not willful. Dade, 725 P.2d at 708; Hawes Fire-

arms, 634 P.2d at 378. The choice of a particular sanction

is committed to the broad discretion of the trial court and

will not be set aside absent an abuse of discretion. Dade,

725 P.2d at 708; Hawes Firearms, 634 P.2d at 378.

While Alaska Trams admits that it did not fully com-

ply with the discovery order in this case, it appears to ar-

gue that the imposition of any sanction was improper be-

cause there was substantial compliance before the discovery

deadline, full compliance was obtained after the deadline

had passed, and its noncompliance was not willful. The

trial court considered and rejected these arguments, stat-

ing:

Alaska Trams admits that some accounting and bank-

ing records requested by [AELP] were not produced

until September 11 or 12. Alaska Trams argues that

any prior nonproduction of materials previously in

existence was inadvertent, not willful, and ‘‘was due~

to confusion resulting from volume and from the fact

that the great majority of the records of Alaska Trams

were already in the custody of the court.’’ ... While

it is possible, although just barely, that counsel for

Alaska Trams was himself personally unaware of the

existence and location of the additional materials, it

is totally ineredible under the circumstances that his

client, Chuck Keen, was unaware of them. The only

reasonable conclusion, in the absence of a credible ex-

planation—and none has been offered—is that Keen

willfully withheld the materials until their discovery

was compelled by the events in an unrelated case.

App. 9

We agree. Because Alaska Trams admits that it did not

fully comply with the trial court’s discovery orders by the

stated deadline, it bore the burden of demonstrating to the

court that its noncompliance was not willful. This it clear-

ly has failed to do. Nor will the fact that Alaska Trams

ultimately produced the requested materials remove the

taint of its willful disregard of the trial court’s production

orders. See Dade, 725 P.2d at 707 n.1. We, thus, find no

abuse of discretion in the trial court’s imposition of a Civil

Rule 37(b) sanction.

Alaska Trams also argues that the sanction actually

imposed was excessive in light of the nature of the docu-

ments withheld and the issues to which they did or did

not relate. In brief, we understand Alaska Trams to be

arguing that because the materials withheld related pri-

marily to damages issues on only certain of its tort claims,

dismissal of the entire case was excessive; the sanction

should have been limited to those claims actually involved.

While there certainly may be cases where outright dis-

missal would be an inappropriate sanction because of the

trivial or incidental nature of the materials in relation

to the overall action, we do not believe this to be a case

of trivial noncompliance. The fact that an action_includes

issues other than damage issues does not mean that dam.

ages are not important; indeed, they are often of primary

importance. Withholding materials relating to a party’s

damages may seriously prejudice the adverse party by

making it difficult or impossible to adequately assess the

strength of the opponent’s case, thereby leaving the oppo-

nent in a weakened position for settlement negotiations

or other purposes. Thus, far from being incidental, the

App. 10

withheld materials in this case could be viewed as essential

to the formulation of AELP’s overall trial strategy. In

such a case, where the noncompliance relates to substan-

tial, as opposed to incidental, materials our inquiry must

focus upon the sanctioned party’s behavior. Cf., Diapulse

Corp. of America v. Curtis Publishing, 374 F.2d 442, 446-47

(2d Cir. 1967) (dismissal of libel complaint justified where

sanctioned plaintiff exhibited flagrant disregard for rules

of discovery even though withheld material related only

to issue of truth).

AELP’s first formal request for production was

served on Alaska Trams on October 12, 1984. AELP con-

tended that the materials produced by Alaska ‘Tiams in

response to this request were not complete because they

included no materials relating to the ownership or financ-

ing of the tramway, no corporate or banking records, and

no expenditure or tax information. Alaska Trams ob-

jected to these requests on the grounds that they were

‘foverly broad,’’ ‘‘burdensome,’’ and ‘‘irrelevant.’’ Alaska

Trams also indicated that it could not be compelled to

produce information pertaining to the financing of the

tramway.

On December 14, 1984, AELP moved to compel pro-

duction of the requested materials. This motion was

granted on April 11, 1985. In granting the motion, the

trial court specifically indicated that Alaska Trams was

free to move for a protective order if it had justifiable

concerns pertaining to the wrongful use of the financial

information. However, the trial court warned Alaska

Trams that it could interpose no further delay in making

discovery. Alaska Trams did not move for a protective

App. 11

order but it did inform AELP that it would not provide

the requested financial information.

On April 25, AELP moved for sanctions for nonpro-

duction. ANLP sought an order establishing the fact that

Alaska Trams had no financing for the tram project be-

cause of the project’s inherent defects. Alaska Trams filed

no opposition. ‘Ihe trial court did not, however, grant the

motion, but instead, on May 3, issued a second production

order to be satisfied on or before May 13.

Alaska Trams responded to this order by delivering

several documents to AELP. On May 9, it filed a motion

for a protective order relieving it of the obligation to pro-

duce any financial information until 90 days prior to trial.

On June 18, the trial court denied Alaska Trams’ ‘‘ overly

broad motion for [a] protective order,’’ but it did pro-

vide Alaska Trams some limited protection and ordered

Alaska Trams to comply with discovery requests on or be-

fore June 28.

Alaska ‘i'rams had still not complied with the dis-

covery requests by July 8, and the trial court imposed

limited sanctions, indicating that:

[Alaska Trams] has until the close of business on

August 27, 1985, to comply fully with this order [to

produce] or to prove to this court that it does not have

the ability to comply. [AELP] shall by July 28, 1985,

furnish [Alaska Trams] specifics on the discovery

which [Alaska Trams] has failed to make, and if

[Alaska Trams] fails to make that discovery by Aug-

ust 27, 1985, its complaint shall be dismissed with pre-

judice.

AELP complied with the court order in a timely manner.

Despite this order, however, Alaska Trams still refused

App. 12

to produce requested materials pertaining to the financial

aspects and ownership interests of the tramway project.

These materials had been requested more than a year pre-

viously; Alaska Trams did not file any valid objections

to production or make any showing that it could not com-

ply by the specified deadline.

On September 5, AELP moved to dismiss Alaska

Trams’ action for failure to comply with the trial court’s

July 8 production order. On September 11, Alaska Trams j

invited AELP’s counsel to attend a production of docu-

ment session the next day in an unrelated case, Craine v.

Keen, No. 13-U-83-354 Civ., and at that time most of the

materials requested for the present action were finally

produced. The trial court dismissed the complaint on No-

vember 6.

Thus, in this case, the trial court issued four separate

production orders regarding the same materials over the

course of fourteen months, imposed non-litigation ending

sanctions, and warned Alaska Trams that continued failure

to produce would result in-dismissal. Even after this ex-

plicit Warning, however, Alaska Trams refused to produce

the requested materials and provided no credible explana- ©

tion for its recalcitrance. In the face of such obstinate and

flagrant disregard for the court’s orders and the rules

of discovery, we are unable to say that the trial court’s dis-

missal was unjustified or without reason. Accordingly, the

trial court’s order dismissing Alaska Trams’ action with

prejudice cannot be considered an abuse of discretion and

is affirmed.

Ce

App. 13

IV

Because of the disposition above, we need not consider

Alaska Trams’ other arguments.2 The judgment of the

trial court is AFFIRMED.

9. Alaska Trams also appealed the trial court’s summary

judgments in favor of AELP on its contract based claims, its

equitable claims, its tort claims, and its condemnation claim.

App. 14

IN THE SUPERIOR COURT FOR

THE STATE OF ALASKA

FIRST JUDICIAL DISTRICT AT JUNEAU

ALASKA TRAMS

CORPORATION, a/k/a ALASKA

TRAMS, INC.,

Plaintiff,

No. 1J U-84-1469

Civil

Vv.

ALASKA ELECTRIC LIGHT &

POWER COMPANY, an Alaska

corporation; WILLIAM A.

CORBUS; DOES I THROUGH

XX; and an AERIAL RIGHT-OF-

WAY AND EASEMENT 1300

LINEAR FEET IN LENGTH,

MORE OR LESS, PURSUANT TO

PARAGRAPH 59 BELOW,

Defendants.

ee ee ee ae ee ee ee ee ee a

(P)

MEMORANDUM DECISION AND ORDER

(Filed November 6, 1985)

I. Motion for Summary Judgment.

AEL&P has moved for summary judgment on the five

remaining causes of action in this case. The causes of ac-

tion are for: (1) specific performance based on AEL&P’s

contract breach; (2) reformation of contract based on mis-

take; (3) reformation of contract based on fraud; (4) re-

formation of deed based on mutual mistake; and (5)

reformation of deed based on fraud. AEKL&P contends all

five of these claims are barred by the defense of laches.

App. 15

Alaska Trams disputes the applicability of the doctrine

of laches to this case.

A defendant must show two independent elements for

the doctrine of laches to apply. First, the plaintiff must

have unreasonably delayed in bringing the action. Second,

this unreasonable delay must have caused the defendant

prejudice or undue harm. City and Borough of Juneau v.

Betty Breck, — P.2d — (Alaska Sup. Ct. Op. No. 2982,

Sept. 20, 1985), p. 6-7. AEL&P alleges that Alaska Trams

did delay unreasonably in bringing this action. This court

has already determined that the delay in filing this action

was unreasonable, Mem. Dec., Aug. 28 1985, p. 42, but

refused to apply the defense of laches at that time, how-

ever, because AEL&P had not alleged any resulting preju-

dice. AEL&P now alleges that the unreasonable delay has

resulted in prejudice in the form of key witnesses who have

died or had their memories fade.

The most significant prejudice to AEL&P is the loss

of a key witness, former AKL&P President Franz Nagel,

who died in March of 1981. Mr. Nagel was intimately in-

volved in the negotiations at issue in this case and, in fact,

executed the warranty deed delivered to Mr. Keen in 1976.

Mr. Keen has stated that he dealt equally with Bill Corbus

and Franz Nagel in the negotiation process and that ‘‘this

dispute would be resolved immediately’’ if Mr. Nagel were

still alive. Declaration of Chuck D. Keen in Opposition to

Motion for Summary Judgment dated February 14, 1985.

Mr. Nagel died well over four years after the land sale

contract was entered into. If suit had been brought in a

reasonable period of time, Mr. Nagel would still have been

alive and available as a witness. Another potential wit-

App. 16

ness, Ruedi Kuenzler, a former business associate of Mr.

Keen’s, also died before this action was brought. Loss of

a witness through death can be sufficient to demonstrate

prejudice. Hanns v. Hanns, 423 P.2d 499, 513 (Ore. 1967).

The party claiming it has been prejudiced does not have

to show that the unavailable witness’s testimony would

have been favorable to his or her position. Gerhard v.

Stephens, 442 P.2d 692, 723 n. 44 (Cal. 1968) ; cf., Boone v.

Mechanical Specialties Co., 609 F.2d 956 (9th Cir. 1979)

(severe prejudice demonstrated by a showing that possible

witnesses were unavailable.

Additionally, at least one important witness has stated

that his recollection has faded considerably in the more

than eight years since he was involved in the negotiations

at issue. Affidavit of Warren Wild, Aug. 16, 1985. Suf-

ficient prejudice to justify the application of laches can

result from a witness’s having ‘‘suffered impairment of

memory or mental faculties.’’ Jernigan v. Scott, 518 S.W.

2d 278, 283 (Tex. Civ. App. 1974).

This court finds that AEL&P has been prejudiced by

Alaska Trams’ unreasonable delay in bringing:this action.

Alaska Trams’ arguments against applying laches here

lack merit.

AEL&P’s motion for summary judgment against

Alaska Trams on the remaining five claims for equitable

relief is, therefore, granted.

Il. Motion to Dismiss.

AEL&P has also moved this court for an order dis-

missing this action with prejudice pursuant to the court’s

MAb toe

App. 17

order of July 8, 1985.' The court previously issued orders

on April 11, 1985, and May 3, 1985, requiring Alaska Trams

to make discovery as requested by AEL&P. On July 8,

1985, this court ordered Alaska Trams to make discovery

by August 27, 1985, of the documents to be requested by

AEL&P by July 28, 1985. The court granted this additional

time in order for AEL&P to restate its discovery requests

with still greater specificity to avoid any further claims of

confusion by Alaska Trams. Alaska Trams was expressly

warned that failure to comply with the order or to show

to the court its inability to comply by August 27, 1985,

would result in the complaint’s being dismissed with preju-

dice. AEL&P contends that Alaska Trams failed to com-

ply with the court’s order and the complaint should, there-

fore, be dismissed with prejudice.

AEL&P has adequately demonstrated that not all of

the specified materials were produced and that no showing

of inability was made by the prescribed date. AEL&P

contends that some of the specified material requested,

which it believes to be in existence, has still yet to be dis-

closed, e.g., loan applications. It is undisputed that a large

amount of the material that had been requested by AEL&P

was not made available until September 11 or 12, 1985, and

then only as an indirect result of an order issued in an-

other proceeding. On September 4, 1985, counsel for Alas-

ka Trams, Mr. Petersen, and counsel for AEL&P, Mr.

Clough, were both present in court at an evidentiary hear-

. Although it is arguable that this motion was rendered

moot by the granting of summary judgment, this court will still

consider and rule on the motion to dismiss so that, in the

event of an appeal, the appellate court will have before it this

court's rulings on both motions.

App. 18

ing in another civil case in which an out-of-state creditor

was trying to enforce a judgment against Mr. Keen, Craine

v. Keen, Case No. 1JU-83-554. Keen had been directed to

make production of financial information about Alaska

Trams at or before the evidentiary hearing. When Keen

failed to produce the financial information, Judge Car-

peneti continued the evidentiary hearing until September

12, 1985, and directed Keen to make the financial docu-

ments available at or before that time. Mr. Petersen sub-

sequently informed Mr. Clough of when and where Keen

would be making his financial records available to the

plaintiff in the Craine case and invited Mr. Clough to at-

tend. Mr. Clough attended the production session and, for

the first time, was given access to thousands of documents

on the financial operations of Alaska Trams. These docu-

ments had previously been requested by AEL&P but had

never been produced.

Imposing sanctions which end litigation without reach-

ing the merits is generally disfavored and such sanctions

should not be imposed merely to punish a failure to com-

ply with a court order. See Hammond Packing Co. v. Ar-

kansas, 212 U.S. 322, 350, 53 L.Ed. 530, 544-45 (1909). Liti-

gation ending sanctions are appropriate in some circum-

stances, however. In National Hockey League v. Metro-

politan Hockey Club, Inc., 427 U.S. 639, 643, 49 L. Ed. 2d

747, 751 (1976), the United States Supreme Court recog-

nized the appropriateness of using litigation ending sanc-

tions ‘‘to deter those who might be tempted to such con-

duct in the absence of such a deterrent.’’

For a litigation ending sanction to be imposed under

Civil Rule 37(b)(2), Alaska Trams must willfully have

App. 19

failed to make the ordered production. Hawes Firearms

Co. v. Edwards, 634 P.2d 377, 378 (Alaska 1981). Willfully

means ‘‘not mere delay, inability or good faith resistance.’’

Id. Once the court finds that the material available to

Alaska Trams was not produced as required by the court’s

order, Alaska Trams has the burden of proving such non-

production was not willful. Pew v. Foster, 660 P.2d 447,

449 n. 3 (Alaska 1983). Hawes Firearms Co. v. Edwards,

634 P.2d at 378 n. 2. Alaska Trams admits that some ac-

counting and banking records requested by AEL&P were

not produced until September 11 or 12. Alaska Trams ar-

gues that any prior nonproduction of materials previously

in existence was inadvertent, not willful, and ‘‘was due

to confusion resulting from volume and from the fact that

the great majority of the records of Alaska Trams were

already in the custody of the court.’’ Attorney for Alaska

Trams’ Certificate of Counsel, September 22, 1985. While

it is possible, although just barely, that counsel for Alaska

Trams was himself personally unaware of the existence and

location of the additional materials, it is totally incredible

under the circumstances that his client, Chuck Keen, was

unaware of them. The only reasonable conclusion, in the

absence of a credible explanation—and none has been of-

fered—is that Keen willfully withheld the materials until

their discovery was compelled by the events in an unre-

lated case.

The fact that discovery was ultimately made does not

preclude dismissing Alaska Trams’ complaint. In Hawes

Firearms Co., the Alaska Supreme Court reviewed the

trial court’s use of sanctions under Civil Rule 37(b). The

defendant had failed to comply with the trial court’s order

to answer interrogatories and make discovery. The trial

App. 20

court sanctioned the defendant by striking its defenses

which effectively decided the defendant’s liability and pre-

cluded consideration of any meritorious defense. The de-

fendant answered the interrogatories and made discovery

after sanctions were ordered. On appeal, the Alaska Su-

preme Court upheld the sanctions ordered by the trial court

and quoted the following with approval:

Final production is not determinative. The rule per-

mits a sanction when a party ‘‘fails to obey an order.’’

. .. The ultimate, and reluctant, production of docu-

ments, more than a year after a legitimate request does

not absolve [a party] of the charge that it willfully

failed to obey a valid court order.

634 P.2d at 380, quoting, State of Ohio v. Arthur Ander-

sen & Co., 570 F. 2d 1370, 1374 (10th Cir. 1977). cert. de-

nied, 439 U.S. 833, 58 L. Ed. 2d 129 (1978).

The instant case is analogous to the factual situation

in Hawes Firearms Co. Alaska Trams willfully failed to

obey repeated orders for discovery just as the defendant

in Hawes Firearms Co. did. The fact that discovery was

not made in Hawes Firearms Co. until after sanctions were

imposed does not distinguish the two cases. Alaska Trams

willfully disobeyed orders of this court and ultimate dis-

covery was made only after the final deadlines set in this

case and then as a result of events in an unrelated case and

not to comply with the order in this case.

The documents which AEL&P finally received at the

production session for the Craine case involve the financial

status and operations of Alaska Trams. These documents

are essential to Alaska Trams’ claims that it expended

large amounis of money on the tramway project in reliance

App. 21

on AEL&P’s promises and, thus, incurred damages. These

documents are also essential to AEL&P’s claim that Alaska

Trams never possessed financing for the tramway project

because the project is not economically feasible. Given the

nature of the documents that Alaska Trams has been will-

fully refusing to disclose, it is reasonable for this court to

infer that Alaska Trams has no case—or at best a very

weak case—on the merits. In Hammond Packing Co. v.

Arkansas, the supreme court approved a presumption by

the trial court that a party’s failure to produce documents

essential to the case ‘‘was but an admission of the want

of merit in the asserted defense.’’ 212 U.S. at 351, 53 L. Ed.

at 545.

In light of Alaska Trams’ repeated willful noncom-

pliance with this court’s orders, including willful noncom-

pliance after being expressly warned that continued non-

compliance would result in the dismissal with prejudice

of the complaint, this court concludes that Alaska Trams’

ultimately making discovery after the deadline is irrele-

vant in determining the appropriateness of sanctions. As

already stated, discovery was finally made not in an effort

to comply with this court’s order but rather as a result of a

court proceeding in an unrelated case.

Additionally, AEL&P asserts that Alaska Trams has

also failed to make a complete and full written response

to the request for production as required by Civil Rule

34(b) and by the court’s July 8, 1985, order. In response,

Alaska Trams states that it fully complied by making writ-

ten responses to AEL&P on three occasions, the most re-

cent being August 27, 1985. The only evidence Alaska

Trams has offered in support of its position is a state-

ment by its counsel, A. Lee Petersen's Certificate of Coun-

lhiiaaeiataaincaa ciate ate

App. 22

sel, dated September 22, 1985, and a copy of a response

dated November 14, 1984. AEL&P contends that the re-

sponses which Alaska Trams did make were insufficient

and did not comply with Rule 34(b). This court concludes

that Alaska Trams’ response does not adequately support

its assertion that it has fully complied with this provision

of the July 8, 1985, court order.

This court finds, therefore, that Alaska Trams will-

fully and inexcusably failed to comply with this court’s

order after being warned of the dire consequences. While

litigation-ending sanctions should be imposed sparingly,

they are necessary here to deter just the kind of conduct

that Alaska Trams has purposely decided to employ. Ac-

cordingly, AEL&P’s motion to dismiss with prejudice is

granted.

III. Motion for Additional Attorney’s Fees.

AEL&P asks for an award of their attorney’s fees for

work incurred as a result of Alaska Trams’ noncompliance

with the court’s discovery orders. Alaska Trams does not

dispute the amount of AEL&P’s request but rather dis-

putes AEL&P’s entitlement to any award of attorney’s

fees.

Alaska Trams makes two arguments why attorney’s

fees should not be assessed against it. First, Alaska Trams

argues that it should not have to pay for work AEL&P’s

counsel would have to do in any event since, whether fur-

ther discovery motions were sought or not, AEL&P’s

counsel would still have to review every document dis-

closed in preparing its case. Further, if AEL&P only re-

quested the production of the materials so it could make

App. 23

further motions for discovery, then the discovery requests

could not have been in good faith. This argument would

be valid only if AEL&P had sought discovery in bad faith

merely to frustrate Alaska Trams’ case. This is not the

situation, however. AEL&P has repeatedly made showings

to this court that full discovery is necessary and essential

to the preparation of its case.

Second, Alaska Trams argues that sanctions are un-

justified and relies on A efchikan Cold Storage Co. v. State,

491 P.2d 1438, 148 (Alaska 1971), for the proposition that

a party refusing to make discovery can only be required

to pay the other party’s attorney’s fees when the refusal

is ‘‘without substantial justification.’’ In that opinion,

the court stated that the sanction of paying the opposing

party’s attorney’s fees for obtaining the discovery order

is appropriate when the refusing party had disregarded

the court’s discovery order, acted unreasonably, recalci-

trantly or captiously, but it is inappropriate to punish

an innocent party whose refusal to make discovery is rea-

sonable. /d., at 148-49. Alaska Trams asserts that it ‘‘has

not been recalcitrant. It has gone far beyond the require-

ments of the rules in its compliance.’’ Alaska Trams’

Memorandum in Opposition to Motion for Additional At-

torney’s Fees. The evidence is to the contrary.

Alaska Trams appears to argue that the requirement

in Ketchikan Cold Storage Co. that noncompliance be

‘‘without substantial justification’’ applies to all the at-

torney’s fees sought in this motion. This is not correct.

A noncomplying party must have acted ‘‘without substan-

tial justification’’ only to properly be ordered to pay the

opposing party’s costs im obtaining the discovery order.

App. 24

Id., at 148. Once discovery has been ordered, failure to

comply subjects the noncomplying party to the sanction

of paying the other party’s costs in attempting to enforce

the discovery order. Id., at 149. As the court stated in

Ketchikan Cold Storage Co., ‘‘costly tardiness and lack of

cooperation with the discovery process does justify the

imposition of sanctions under Rule 37(b).’’ Zd. It is not

required that the noncomplying party act in bad faith or

without substantial justification. The mere fact that the

party unexcusably failed to comply with the court’s dis-

covery order is sufficient to justify awarding the other

party’s attorney’s fees.

Accordingly, AEL&P’s motion for additional attor-

ney’s fees in the amount of $2,440.50 for work incurred as

a result of Alaska Trams’ noncompliance with the court’s

discovery order is granted.

CONCLUSION.

Summary judgment is granted in AEL&P’s favor on

all the remaining claims in this case. Additionally, this

action is dismissed with prejudice for Alaska Trams’ non-

compliance with this court’s order dated July 8, 1985.

AEL&P’s motion for additional attorney’s fees is granted.

Alaska Trams is ordered to pay to AEL&P $2,446.50 for

attorney’s fees.

iT IS SO ORDERED.

DATED this 6th day of November, 1985.

/s/ Rodger W. Pegues

Superior Court Judge

App. 25

CERTIFICATION

This is to certify that on the 6th day of November,

1985, I provided a true and correct copy of the above to:

A. Lee Petersen, Esq.

Ronald A. Clark, Esq.

Melvin M. Belli, Esq.

John F. Clough, Esq.

/s/ Sue E. Bailey

Secretary to the Judge