Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-akd-3_15-cv-00200/USCOURTS-akd-3_15-cv-00200-0/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1332 Diversity-Other Contract

---

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ALASKA

PATHFINDER AVIATION, INC., )

) 

 Plaintiff, ) 

) 

vs. ) 

)

XTO ENERGY INC. and SCOTT GRIFFITH, )

) No. 3:15-cv-0200-HRH

 Defendants. ) 

__________________________________________) 

O R D E R

Motion to Dismiss

Defendants move to dismiss plaintiff’s negligent misrepresentation and UTPA

claims and to strike plaintiff’s prayerfor punitive damages.1 This motion is opposed.2 Oral

argument was not requested and is not deemed necessary. 

Background

Plaintiff is Pathfinder Aviation, Inc. Defendants are XTO Energy Inc. and Scott

Griffith. 

1Docket No. 22. 

2Docket No. 24. 

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 1 of 20
Plaintiff “is a Homer-based provider of helicopter services and logistical support...,

providing services to the oil and gas, mining and construction industries.”3

 Michael and

Mary Fell are plaintiff’s owners and Michael Fell (“Fell”) is the president of plaintiff.4 

“XTO is a subsidiary of ExxonMobil.... Its Alaska Operations focused on oil

production in the Cook Inlet....”5 During the time at issue in this case, “Griffith served as

the production superintendent for the Alaska Operations division of XTO.”6 

Plaintiff alleges that “[o]n June 4, 2014, XTO reached out to Pathfinderto explore the

possibility of hiring [Pathfinder] to support its Alaskan operations because it was not

happy with its current provider of transportation services.”7 Plaintiff alleges that in

January 2015, “Fell and Griffith met ... to discuss the acquisition of a specific helicopter

airframe that met XTO’s particular contract requirements: An Airbus EC135P2+....”8

Plaintiff further alleges that “[t]hereafter, XTO’s aviation management team met with

Pathfinderto perform a ‘gap analysis’ of Pathfinder’s assets and services, after which XTO

3

First Amended Complaint at 3, ¶ 8, Docket No. 21. 

4

Id. 

5

Id. at 2, ¶ 7. 

6

Id.

7

Id. at 3, ¶ 10. 

8

Id. at ¶ 11. 

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 2 of 20
determined that Pathfinder qualified as an acceptable vendor.”9

Plaintiff alleges that “[o]n February 25, 2015, Griffith and Fell had a telephone

conversation wherein Griffith announced that Pathfinder had been awarded the contract

and would be XTO’s transportation services provider.”10 Plaintiff alleges that Griffith sent

Fell a follow-up email, in which Griffith stated that “XTO Energy has made the decision to

go with Pathfinder Aviation as our helicopter support contractor for our Alaska

Operations. I will begin working immediately to put the contract together underthe terms

we have discussed.”11 Plaintiff alleges that as of February 25, 2015, the parties had agreed

upon the length of the contract (10 years), the effective date of the contract (September 1,

2015), and the price plaintiff would be paid forits services ($176,636 per month, plus $1,100

perflight hour).12 Plaintiff alleges that “[t]he February 25, 2015 email also included details

regarding a start-up fee of $50,000 and a termination clause.”13“The February 25, 2015

email also confirmed that XTO Energy planned to enterinto an additional agreement with

Pathfinder whereby if the primary helicopter – the Airbus EC – was taken off the XTO

contract in support of other aviation clientele or for repairs and maintenance, XTO would

9

Id. 

10

Id. at 4, ¶ 13. 

11

Id. at ¶ 14. 

12

Id. at ¶ 15. 

13

Id. at ¶ 16. 

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 3 of 20
pay for the use of a twin-engine Bell 212 helicopter for backup, up to the first 12 months of

the contract.”14 And, plaintiff alleges that “[t]he February 25, 2015 email further indicated

that XTO was about to notify its then-current helicopter provider, ERA Helicopters, that

it would be terminating its contract and ‘going in another direction.’”15

Plaintiff alleges that “[a]fter the February 25, 2015 confirmation email and over the

course of the spring 2015, [it] worked to acquire the additional aircraft and to arrange for

[the] modifications to conform to XTO’s operation guidelines.”16 Plaintiff further alleges

thatit “purchased ground support equipment, helicopter support equipment, and devoted

hundreds of labor hours into ensuring that [its] personnel and equipment complied with

XTO’s requirements and needs.”17 Plaintiff alleges that it expended over $400,000 on this

equipment and preliminary work.18

 

Plaintiff alleges that “[o]ver the course of spring 2015, Fell and Griffith worked

together on minor remaining details of the contract between XTO and Pathfinder.”19

Plaintiff further alleges that “Griffith continually communicated to Fell that there was an

14

Id. at 5, ¶ 18. 

15

Id. at ¶ 19. 

16

Id. at ¶ 20. 

17

Id. at 6, ¶ 20. 

18

Id. 

19

Id. at ¶ 21. 

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 4 of 20
enforceable and binding contract in place[.]”20 Plaintiff alleges that these communications

included a March 23, 2015 email, an April 30, 2015 email, and numerous verbal conversations.21 Plaintiff alleges that in the March 23, 2015 email, Griffith “made clearthat there was

a binding contract in place with the use of quotations” and that in the April 30, 2015 email,

Griffith “reiterat[ed] the existence of a ‘ten year contract[.]’”22

 

Plaintiff alleges that despite Griffith’s representation in the February 25, 2015 email

that he would put the contract together immediately, “XTO delayed in signing the actual

written contract.”23 Plaintiff alleges that Griffith finally emailed the written contract to

Pathfinder on May 8, 2015 for Pathfinder’s signature.24 But, plaintiff alleges that Griffith

never signed the written contract.25 

Plaintiff alleges that while it “was diligently working on building the infrastructure

needed to perform underthe contract, XTO was in active negotiations withHilcorpEnergy,

20

Id. 

21

Id.

22

Id.

23

Id. at ¶ 22. 

24

Id. at 7, ¶ 22. 

25

Id.

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Inc. (‘Hilcorp’) regarding the sale of all of XTO’s assets in Alaska[.]”26 Plaintiff believes that

XTO began discussions with Hilcorp in late 2014.27 Plaintiff alleges that “XTO made a

concerted effort not to make these negotiations public, and actively hid these negotiations

from Pathfinder because it wanted Pathfinder to continue to build the infrastructure

needed to support the transportation services contract in the event the sale with Hilcorp

fell through....”28

Plaintiff alleges that “[b]ecause [it] was unaware that XTO was considering a sale to

Hilcorp, it continued to work on putting the necessary equipment in place to support the

contract, including the purchase of a Bell 212 helicopter for over $1.2 million.”29 Plaintiff

further alleges that it “also located an Airbus EC that met XTO’s standards and requirements with a purchase price of over $3.5 million.”30

Plaintiff alleges that 

[j]ust prior to purchasing the Airbus EC, Fell received a call

from a Hilcorp representative ... who was close to the negotiations between Hilcorp and XTO.... While the Hilcorp representative did not inform Fell that Hilcorp was about to purchase

XTO, he did instruct Fell to be very careful when dealing with

26

Id. at 7, ¶ 24. 

27

Id.

28

Id. at 8, ¶ 26. 

29

Id. at ¶ 27. 

30

Id. 

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 6 of 20
XTO and committing resources to Pathfinder’s contract with

XTO. The Hilcorp Representative hinted that Fell needed to do

whatever was necessary to ensure that XTO understood that

there was an enforceable contract in place.[31]

Plaintiff alleges that 

Fell contacted Griffith on or about June 20, 2015 to further

discuss the purchase of the Airbus EC and to again confirm the

agreement between the two parties. Fell asked Griffith if they

had an enforceable contract in place and Griffith assured Fell

that the contract between the two parties was enforceable and

binding....[32] 

Plaintiff further alleges that “Fell asked Griffith a second time if the contract was binding,

and explained that XTO’s act of walking away from this contract ‘had the potential to put

him out of business.’ Griffith again stated that the contract was enforceable, by responding

as follows: ‘Mike, this contract is solid.’”33 Plaintiff alleges, however, that at this point in

time, Griffith knew “XTO would later claim that the contract was no good for a number of

reasons, including that there was no signed contract.”34

Plaintiff alleges that “[o]n July 1, 2015, a little over a week after [its] purchase of the

Airbus EC, and a little more than a week after Griffith assured Fell that the contract was

31

Id. at ¶ 28. 

32

Id. at 10, ¶ 32. 

33

Id. at ¶ 33. 

34

Id. at 11, ¶ 35. 

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 7 of 20
enforceable and ‘solid’, XTO announced that it had sold its Alaska operations to Hilcorp.”35

Plaintiff alleges that “Griffith called Fell and told him that XTO would not be going

forward with its contract with Pathfinder.”36 Plaintiff alleges that Griffith also sent an email

on July 2, 2015, in which he “admitted that there was a ‘contract’ with Pathfinder, but

[stated that] XTO would not be going forward with it ‘due to the sale of [XTO’s] Alaska

assets.’”37

Plaintiff alleges that “[a]fter this communication, Fell attempted to contact Griffith

and XTO regarding the contract, but to no avail.”38

Plaintiff alleges that 

[s]ince XTO’s communication indicating that it would not

agree to the terms of the contract, and in order to avoid a

monthly payment in excess of $40,000 to support and maintain

the helicopters, Pathfinder sold the Bell 212 helicopter at a loss

of over $140,000 , and Pathfinder has been making every effort

to sell the Airbus EC, but has not yet been successful.[39] 

Plaintiff alleges that “[i]t is anticipated that due to the unique nature of the Airbus EC,

which is a result of [XTO’s] unusual specifications, the aircraft will likely be sold for a loss

35

Id. at ¶ 36. 

36

Id. at ¶ 37. 

37

Id.

38

Id. at ¶ 38. 

39

Id. at 11-12, ¶ 39. 

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of over $1 million.”40

On September 17, 2015, plaintiff commenced this action. In its original complaint,

plaintiff asserted six counts against defendants: 1) breach of contract, 2) breach of quasicontract and quantum meruit, 3) promissory estoppel, 4) breach of the covenant of good

faith and fair dealing, 5) misrepresentation, and 6) violation of Alaska Unfair Trade

Practices Act. Defendants moved to dismiss the contract claims against Griffith, the breach

ofthe covenant of good faith and fair dealing claim against XTO, and the misrepresentation

and UTPA claims against both defendants.41 Defendants also moved to strike plaintiff’s

prayerfor punitive damages.42 The courtgranteddefendants’ motion to dismiss but denied

the motion to strike.43 The court gave plaintiff leave to amend its breach of the implied

covenant of good faith and fair dealing claim against XTO and its misrepresentation and

UTPA claims against both defendants.44

Plaintiff timely filed an amended complaint. In its amended complaint, plaintiff

asserts five counts: 1) a breach of contract claim against XTO, 2) a breach of quasi-contract

and quantum meruit claim against XTO, 3) a promissory estoppel claim against XTO, 4) a

40

Id. at 12, ¶ 39. 

41Docket No. 10. 

42Docket No. 10. 

43Order re Motion to Dismiss; Motion for Leave to Amend at 19, Docket No. 20.

44

Id.

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 9 of 20
negligent misrepresentation claim against XTO and Griffith, and 5) a UTPA claim against

XTO and Griffith. 

Pursuant to Rule 12(b)(6), Federal Rules of Civil Procedure, defendants now move

to dismiss plaintiff’s negligent misrepresentation and UTPA claims and to strike plaintiff’s

prayer for punitive damages.

Discussion

“Rule 12(b)(6) is read in conjunction with Rule 8(a), which requires not only ‘fair

notice of the nature of the claim, but also grounds on which the claim rests.” Zixiang Li v.

Kerry, 710 F.3d 995, 998 (9th Cir. 2013) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544,

556 n.3 (2007)). “To survive a Rule 12(b)(6) motion to dismiss, a ‘plaintiff must allege

enough facts to state a claim to relief that is plausible on its face.’” Turner v. City and

County of San Francisco, 788 F.3d 1206, 1210 (9th Cir. 2015) (quoting Lazy Y Ranch Ltd. v.

Behrens, 546 F.3d 580, 588 (9th Cir. 2008)). “In assessing whether a party has stated a claim

upon which relief can be granted, a court must take all allegations of material fact as true

and construe them in the light most favorable to the nonmoving party; but ‘conclusory

allegations of law and unwarranted inferences are insufficient to avoid a Rule 12(b)(6)

dismissal.’” Id. (quoting Cousins v. Lockyer, 568 F.3d 1063, 1067 (9th Cir. 2009)). “‘A claim

has facial plausibility when the plaintiff pleads factual content that allows the court to draw

the reasonable inference that the defendant is liable for the misconduct alleged.’” Id.

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(quoting Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)). “This standard ‘asks for more than a

sheer possibility that a defendant has acted unlawfully,’ but it ‘is not akin to a probability

requirement.’” Id. (quoting Iqbal, 556 U.S. at 678). “In sum, for a complaint to survive a

motiontodismiss,thenon-conclusory ‘factual content,’ and reasonable inferences fromthat

content, must be plausibly suggestive of a claim entitling the plaintiff to relief.” Moss v.

U.S. Secret Service, 572 F.3d 962, 969 (9th Cir. 2009) (quoting Iqbal, 556 U.S. at 678). 

Defendants first move to dismiss plaintiff’s negligent misrepresentation claim. The

elements of a negligent misrepresentation claim are 

(1) the party accused of the misrepresentation must have made

the statement in the course of his business, profession or

employment, or in any other transaction in which he has a

pecuniary interest, (2) the representation must supply false

information, (3) there must be justifiable reliance on the false

information supplied, and (4) the accused party must have

failed to exercise reasonable care or competence in obtaining or

communicating the information.

Reeves v. Alyeska Pipeline Service Co., 56 P.3d 660, 670-71 (Alaska 2002) (citations

omitted). 

[A] cause of action for negligent misrepresentation is complete

when the injured party has suffered a pecuniary loss as a result

of the misrepresentation. To that extent, future occurrences

can be related back to the time when the misrepresentation

which resulted in the loss was made. However, to establish

liability under this theory it is not enough to demonstrate that

subsequent occurrences made an originally-accurate representation ultimately false. For a representation to be actionable, ...

the representation must be false when made.

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 11 of 20
Bubbel v. Wien Air Alaska, Inc., 682 P.2d 374, 381 (Alaska 1984). While negligent

misrepresentation does not require “proof that the maker knew of the untrue character of

his or her representation[,]” it does require proof that the statement was false when made. 

Id. 

Plaintiff alleges that Griffith made numerous representations that the parties had a

binding and enforceable contract but that “[a]ll of these representations contained false

information when they were made because XTO claims that there was never an enforceable

contract inplace....”45 Plaintiff also alleges that these communications “were made without

reasonable care or competence because each time Griffith communicated to Pathfinderthat

there was an enforceable contract in place, these representations were false due to XTO’s

belief that no contract ever existed.”46 By way of example, plaintiff alleges that when

Griffith told Fell that the contract was “solid” in June 2015, “Griffith most certainly knew

that XTO would not need Pathfinder’s services”, given that the sale to Hilcorp was

announced a little over one week later.

47

Defendants argue that plaintiff has not alleged any factual support forits allegations

that Griffith’s representations were false at the time they were made. Defendants

45First Amended Complaint at 15, ¶ 56, Docket No. 21.

46

Id. at ¶ 57. 

47

Id. at ¶ 58. 

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 12 of 20
acknowledge that plaintiff has alleged that Griffith told Fell that there was an enforceable

contract on February 25, 2015; March 23, 2015; April 23, 2015; and on other unspecified

dates between February and July 2015. But defendants argue that an after-the-fact change

in circumstances, namely Hilcorp’s acquisitionof XTO’s Alaska assets, does not make these

statements false when made.

Defendants argue that nothing about the timing of events in this case suggests that

Griffith’s statements were false when made. Defendants contend that any inference based

on the timing of events would be unreasonable, as the court has already decided. In

opposition to the first motion to dismiss, plaintiff argued that the timing of events, XTO’s

unwillingness to sign the written contract, and XTO’s refusal to communicate with plaintiff

after XTO was acquired by Hilcorp gave rise to inferences that XTO knew all along that it

was going to breach the contract and that XTO was seeking to maliciously cause plaintiff

injury.48 The court found that these inferences were not reasonable in part because plaintiff

had not alleged that XTO knew for months that it was going to be sold to Hilcorp.49

Plaintiff has attempted to fix this problem in its amended complaint. Plaintiff has

alleged that “on information and belief”, XTO’s negotiations with Hilcorp started in late

48Order re Motion to Dismiss; Motion for Leave to Amend at 12, Docket No. 20. 

49

Id. 

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 13 of 20
2014 and continued into 2015.50 Defendants argue that allegations based on “information

and belief” are not sufficient. “But, [p]ost Twombly and Iqbal, the Ninth Circuit has not

considered the sufficiency of ... allegations made on ‘information and belief.’” Clifton v.

Houghton Mifflin Harcourt Publishing Co., — F. Supp. 3d —, 2015 WL 9319402, at *3 (N.D.

Cal. 2015). “The Second Circuit has, holding (in a copyright case) that the Twombly and

Iqbal plausibility standard allows factual allegations made ‘upon information and belief’

where (1) ‘the facts are peculiarly within the possession and control of the defendant,’ or

(2) ‘where the belief is based on factual information that makes the inference of culpability

plausible.’” Id. (quoting Arista Records, LLC v. Doe 3, 604 F.3d 110, 120 (2d Cir. 2010)). 

Here, the facts as to when Hilcorp and XTO began their negotiations would not be in

plaintiff’s possession and control, but rather XTO’s. Thus, plaintiff has adequately alleged

that XTO knew for several months that it is was going to be acquired by Hilcorp. More

importantly, as to the timing of events, plaintiff alleges that on June 20, 2015, Griffith told

Fell that the parties’ contract was “solid”, which was only a little over a week before

Hilcorp’s acquisition of XTO was announced. It is reasonable to inferfrom this timing that

Griffith’s representation on June 20, 2015 was false when made. 

Defendants also argue that the fact that Griffith did not “immediately” sign a written

contract does not give rise to an inference that Griffith’s representations were false when

50

First Amended Complaint at 7, ¶ 24, Docket No. 21. 

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made. Rather, defendants argue that the only inference that can be drawn from this “fact”

is that the parties were still in contract negotiations.

But the facts alleged in plaintiff’s amended complaint do not suggest that the parties

were still in contract negotiations, but rather that defendants were stalling in signing the

written contract. Plaintiff has alleged that many of the terms of the contract had been

agreed upon by February 25, 2015 and that during the spring of 2015, there were only

“minorremaining details” of the contract to be worked out.51 And plaintiff has alleged that

XTO did not send a written contract to plaintiff until May 8, 2015 and “then only after

being continually requested to do so by Pathfinder.”

52

“If there are two alternative

explanations, one advanced by defendant and the other advanced by plaintiff, both of

which are plausible, plaintiff’s complaint survives a motion to dismiss under Rule 12(b)(6). 

Plaintiff’s complaint may be dismissed only when defendant’s plausible alternative

explanation is so convincing that plaintiff's explanation is implausible.” Starr v. Baca, 652

F.3d 1202, 1216 (9th Cir. 2011). Defendants’ argument that the parties were still in contract

negotiations until July 2015 is not so convincing that it makes plaintiff’s contention to the

contrary implausible. Plaintiff has alleged sufficient factual support forits contention that

XTO was delaying signing the contract. That allegation, along with plaintiff’s allegation

51

Id. at 6, ¶ 21. 

52

Id. at 7, ¶ 22. 

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 15 of 20
that XTO was in negotiations with Hilcorp by late 2014, is sufficient to suggest that

Griffith’s representations that the parties’ contract was binding and enforceable were false

when made. 

Defendants also argue that plaintiff’s allegations about Fell’s conversation with the

Hilcorp Representative do not suggest that Griffith’s statements were false when made.53

Defendants argue that it would not be reasonable to infer from these allegations that XTO

and Griffith knew that they never intended to enter into a contract with plaintiff. 

Defendants point out that plaintiff expressly alleged that “the Hilcorp Representative did

not inform Fell that Hilcorp was about to purchase XTO[.]”

54 Defendants argue that the

Hilcorp Representative’s alleged suggestionthatplaintiffget contractual assurances simply

does not demonstrate that Griffith’s representations about an enforceable contract were

false when made. Defendants insist that all plaintiff has alleged is that a Hilcorp

Representative called Fell and told Fell to be careful and get contractual assurances from

XTO, but defendants argue that these “facts” do not in anyway suggest that Griffith’s

representations about the parties’ contract were false when made. 

53Contrary to defendants’ contention, the allegations about the phone call from the

Hilcorp Representative to Fell are not the only new factual allegations in plaintiff’s first

amended complaint. Plaintiff’s first amended complaint contains otherfactual allegations

that were not in plaintiff’s original complaint or in plaintiff’s proposed first amended

complaint. 

54

First Amended Complaint at 8, ¶ 28, Docket No. 21. 

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 16 of 20
The alleged call from the Hilcorp Representative does suggest that Griffith’s

statements about there being a binding and enforceable contract were false. Even though

the Hilcorp Representative did not mention the possible acquisition, the Hilcorp

Representative appeared to be warning Fell that plaintiff’s contract with XTO might not be

as “solid” as Griffith was assuring Fell it was. 

Plaintiff has adequately alleged thatGriffith’s representations that plaintiff and XTO

had a binding and enforceable contract were false when made. Thus, plaintiff has stated

a plausible negligent misrepresentation claim. 

Defendants next move to dismiss plaintiff’s UTPA claim. “Two elements must be

proved to establish a prima facie case of unfair or deceptive acts or practices under the

Alaska Act: (1) that the defendant is engaged in trade or commerce; and (2) that in the

conduct of trade or commerce, an unfair act or practice has occurred.” State v. O'Neill

Investigations, Inc., 609 P.2d 520, 534 (Alaska 1980). “An act or practice is deceptive or

unfair if it has the capacity or tendency to deceive.” Id. “An act or practice need not be

‘deceptive’ to be ‘unfair.’” Id. at 535. Factors the court may consider when determining

whether an act or practice is unfair include 

“(1) whether the practice, without necessarily having been

previously considered unlawful, offends public policy as it has

been established by statutes, the common law, or otherwise

whether, in other words, it is within at least the penumbra of

some common-law, statutory, or other established concept of

unfairness; (2) whether it is immoral, unethical, oppressive, or

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 17 of 20
unscrupulous; [and] (3) whether it causes substantial injury to

consumers (or competitors or other businessmen).”

Id. (quoting F. T. C. v. Sperry & Hutchinson Co., 405 U.S. 233, 244-45 n.5 (1972)). Alaska

law requires a plaintiff to demonstrate that the defendant did something more egregious

than breach a contract or assert the non-existence of a contract. Kenai Chrysler Center, Inc.

v. Denison, 167 P.3d 1240, 1256 (Alaska 2007); see also, Alaska Rent-A-Car, Inc. v. Cendant

Corp., Case No. 3:03–cv–00029–TMB, 2007 WL 2206784, at *22 (D. Alaska July 27, 2007)

(“The fact that an act is a breach of a contractual obligation does not, ipso facto, render it

an unfair trade practice”). 

Plaintiff alleges that defendants 

engaged in unfair and deceptive practices, including but not

limited to, the following: Misrepresenting their intent to

contract with Pathfinder for its services; representing that

Pathfinder’s services had approval and status [they] did not

have; engaging in conduct creating a likelihood of confusion or

misunderstanding which misled, deceived and damaged

Pathfinder in connection with the sale of good and services,

specifically transportation services; and knowingly making

false or misleading statements regarding the existence of a

contract.[55

]

Plaintiff’s UTPA claim in its amended complaint is identical to the UTPA claim in

its original complaint except for the allegation that defendants knowingly made false or

misleading statements regarding the existence of a contract. Defendants argue that this

55

First Amended Complaint at 17, ¶ 66, Docket No. 21. 

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 18 of 20
new allegation is not sufficient to save plaintiff’s UTPA claim because plaintiff has not pled

any factual support for its allegation that Griffith’s representations about the existence of

a contract were false when made. Defendants insist that statements made about the

parties’ contract priorto Hilcorp’s acquisition of XTO were true and only became false after

the Hilcorp acquisition. 

But, as discussed above, plaintiff has adequately alleged that at least some of

Griffith’s statements were false when made. False or misleading statements can be

considered an unfair or deceptive act. See, e.g., Golber v. BayBank Valley Trust Co., 704

N.E.2d 1191, 1194 (Mass. Ct. App. 1999) (holding that negligent misrepresentation may be

an unfair and deceptive act). Thus, plaintiff has stated a plausible UTPA claim. 

Finally, defendants move to strike plaintiff’s prayer for punitive damages. 

Defendants argue that even if plaintiff has alleged viable tort claims, which the court finds

that plaintiff has, plaintiff’s prayer for punitive damages should still be stricken because

plaintiff has not alleged that defendants’ conduct was 1) outrageous or done with malice

or bad motives or 2) evidenced reckless indifference to the interests of another person. AS

09.17.020. Defendants point out that “[i]f the evidence does not give rise to an inference of

actual malice or conduct sufficiently outrageous to be deemed equivalent to actual malice,

then the trial court need not submit the issue of punitive damages to the jury.” Hayes v.

Xerox Corp., 718 P.2d 929, 935 (Alaska 1986). Defendants insist that plaintiff has not

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Case 3:15-cv-00200-HRH Document 26 Filed 05/04/16 Page 19 of 20
alleged that they acted outrageously or with malice or bad motives. Rather, defendants

contend that all plaintiff has alleged is a breach of contract.

Plaintiff has alleged more than a breach of contract here. A reasonable jury could

conclude that defendants acted outrageously or with malice if, as plaintiff has alleged, XTO

was negotiating with Hilcorp at the same time it was encouraging plaintiff to develop the

infrastructure and buy the helicopters necessary for the contract. 

Conclusion

Defendants’ motion to dismiss plaintiff’s negligent misrepresentation and UTPA

claims is denied as is their motion to strike plaintiff’s prayer for punitive damages. 

DATED at Anchorage, Alaska, this 4th day of May, 2016. 

/s/ H. Russel Holland 

United States District Judge

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