Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER. 

Readers are requested to bring errors to the attention of the Clerk of the Appellate Courts, 

303 K Street, Anchorage, Alaska 99501, phone (907) 264-0608, fax (907) 264-0878, email 

corrections@akcourts.gov. 

THE SUPREME COURT OF THE STATE OF ALASKA 

THE HAPPY FARMER, LLC, 

d/b/a Releaf Alaska, 

Appellant, 

v. 

ALASKA STATE FAIR, INC., 

Appellee. 

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) Supreme Court No. S-17928 

Superior Court No. 3PA-18-02656 CI 

O P I N I O N 

No. 7561 – October 29, 2021 

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Appeal from the Superior Court of the State of Alaska, Third 

Judicial District, Palmer, Kari Kristiansen, Judge. 

Appearances: John C. Pharr, Law Offices of John C. Pharr, 

P.C., Anchorage, for Appellant. A. Michael Zahare and 

Kenneth G. Hannam, Clayton & Diemer, LLC, Anchorage, 

for Appellee. 

Before: Winfree, Chief Justice, Maassen, Borghesan, and 

Henderson, Justices. [Carney, Justice, not participating.] 

WINFREE, Chief Justice. 

I. INTRODUCTION 

A vendor entered into an agreement for a merchandise booth inside a 

fairground building. After an unknown thief broke into the building and stole a 

significant amount of the vendor’s merchandise, the vendor sued the fair organization 

on contract and bailment theories. The superior court granted summary judgment in 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

favor of the fair organization, and the vendor appeals one aspect of the superior court’s 

decision regarding bailment law. Based on the undisputed facts we see no error in the 

superior court’s application of bailment law, and we affirm the superior court’s decision. 

II. FACTS AND PROCEEDINGS 

A. Facts 

Happy Farmer, LLC, d/b/a Releaf Alaska (Releaf) entered into a written 

agreement, referred to as a lease, with Alaska State Fair, Inc. (Fair) for indoor vendor 

space during the 2017 Palmer fair. The agreement incorporated a vendor handbook. The 

handbook indicated that although some liability insurance coverage was included for 

most vendors: “This insurance does not cover merchandise and it is recommended that 

vendors purchase individual coverage.” The handbook noted that Fair provided 24-hour 

security services but cautioned in bold text: “Fair takes no responsibility for theft, loss, 

or vandalism of any type. This is the vendor’s sole responsibility.” 

Releaf set up its indoor booth and brought merchandise to the fairground 

building, using its own locking display cases and cabinets for which only Releaf had 

keys. Fair’s security company locked the building each night and unlocked it each 

morning. An unknown thief broke into the building one night and stole a significant 

amount of Releaf’s merchandise. 

B. Proceedings 

Releaf sued Fair, alleging breach of contract and bailment claims.1 Fair 

1 “A bailment is ‘a delivery of personal property by one person to another in 

trust for a specific purpose, with an express or implied contract that the property will be 

returned or accounted for when the specific purpose has been accomplished or when the 

bailor reclaims the property.’ ” Alaska Constr. Equip., Inc. v. Star Trucking, Inc., 128 

P.3d 164, 168 n.13 (Alaska 2006) (quoting United Truck Rental Equip. Leasing, Inc. v. 

Kleenco Corp., 929 P.2d 99, 103 (Haw. App. 1996)); see also 8 C.J.S. Bailments § 1 

(continued...) 

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sought summary judgment,2 arguing that there was no breach of contract because the

 lease agreement did not obligate Fair to “safeguard . . . inventory from theft” and that 

there was no bailment relationship between the parties. Releaf opposed Fair’s summary 

judgment motion and sought partial summary judgment on Releaf’s bailment claim. The 

superior court granted summary judgment to Fair on both the contract and bailment 

claims, concluding that under the contract Fair was not responsible “for property theft 

or damage” and that Fair was not a bailee of Releaf’s merchandise. 

Releaf appeals, contending that the superior court erred by granting Fair 

summary judgment and by denying Releaf partial summary judgment on its constructive 

or implied bailment claim. Releaf does not appeal the court’s rulings that there was no 

express bailment relationship and that Fair was entitled to summary judgment on the 

breach of contract claim. 

III. STANDARD OF REVIEW 

“We review a grant of summary judgment de novo,”3 and we must 

“determine whether there was a genuine issue of material fact and whether the moving 

1 (...continued) 

(Aug. 2021 Update) (“A ‘bailment’ is an agreement, either express or implied, that one 

person will entrust personal property to another for a specific purpose and that, when the 

purpose is accomplished, the bailee will return the property to the bailor or otherwise 

deal with it according to the bailor’s directions, or keep it until the bailor reclaims it, as 

the case may be.” (footnotes omitted)). 

2 See Alaska R. Civ. P. 56(c) (allowing party to seek summary judgment if 

it can “show[] that there is no genuine issue as to any material fact and that the moving 

party is entitled to judgment as a matter of law”). 

3 Arnoult v. Webster, 480 P.3d 592, 596 (Alaska 2020) (quoting Harrell v. 

Calvin, 403 P.3d 1182, 1185 (Alaska 2017)). 

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party was entitled to judgment on the law applicable to the established facts.”4 

IV. CONSTRUCTIVE OR IMPLIED BAILMENT 

A. Constructive Bailment 

A constructive bailment is implied by law5 and is created when a person 

comes into lawful “possession of personal property of another and holds it under 

circumstances whereby [that person] should, on principles of justice, keep it safely and 

restore it or deliver it to the owner.”6 Constructive bailment arises when “possession of 

goods or chattels passes to a person (who is not the owner) by mistake, accident,” or 

other circumstances imposing legal obligations and duties.7 

Releaf does not explain how a constructive bailment theory applies to this 

case’s facts. Fair did not mistakenly or accidentally come into possession of Releaf’s 

merchandise, and it is unclear what other circumstances or considerations would require 

4 Id. (quoting Palmer v. Borg-Warner Corp., 818 P.2d 632, 634 (Alaska 

1990)). 

5 See Bailment, BLACK’S LAW DICTIONARY (11th ed. 2019) (defining 

constructive bailment as “[a] bailment that arises when the law imposes an obligation on 

a possessor of personal property to return the property to its rightful owner, as with an 

involuntary bailment[;] . . . . [f]or example, a police department becomes a constructive 

bailee for an impounded vehicle”). 

6 8 C.J.S. Bailments § 14 (Aug. 2021 Update); see also Bank of N.Y. v. 

Sumter Cnty., 691 S.E.2d 473, 479 (S.C. 2010) (“A constructive bailment arises when 

one person has lawfully acquired possession ofanother person’spersonal property, other 

than by virtue of a bailment contract, and holds it under such circumstances that the law 

imposes on the recipient of the property the obligation to keep it safely and redeliver it 

to the owner.” (quoting Hadfield v. Gilchrist, 538 S.E.2d 268, 272 (S.C. App. 2000))); 

Woodson v. Hare, 13 So.2d 172, 174 (Ala. 1943) (“A constructive bailment arises where 

a person having possession of a chattel holds it under such circumstances that the law 

imposes upon [that person] the obligation to deliver it to another.”). 

7 19 WILLISTON ON CONTRACTS § 53:3 (4th ed. 2016). 

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the law to impose a constructive bailment for Releaf’s benefit. The superior court thus 

did not err by concluding there was no constructive bailment. 

B. Implied Bailment 

Bailment also may be implied by fact: 

A contract of bailment may be implied from the 

circumstances of a transaction or from the words and acts of 

the parties evincing a purpose to enter into that relation 

toward the property . . . . [A]bsent some form of understanding between the parties, the formation of an implied-infact bailment contract cannot take place. . . . The facts 

surrounding the transaction in question must be analyzed to 

determine the existence of an implied-in-fact bailment.[8] 

At minimum, facts must show an understanding that one party will have “exclusive 

possession, control, and dominion over” the property at issue.9 

Releaf suggests that a bailment may be implied based primarily on the 

following: (1) Fair agreed to allow Releaf to occupy booth space for a flat fee; (2) Fair 

permitted Releaf to leave merchandise in the space overnight; (3) Fair provided 

overnight security for the fairgrounds; and (4) Fair’s security had the only keys to the 

building where the booth was located. But these facts are insufficient to reasonably infer 

8 8A AM. JUR. 2D Bailments § 37 (2021); see also Green v. Koslosky, 384 

P.2d 951, 952 (Alaska 1963) (footnotes omitted) (suggesting bailor/bailee relationship 

need not be express). 

9 SeeJ.P. Enters.v.UrsinSeafoods, Inc., 777 P.2d 1165,1166(Alaska1989) 

(“The test in determining whether a transaction is a bailment or a lease is whether the 

person leaving the property made such a delivery of the property as to amount to a 

relinquishment of exclusive possession, control, and dominion over the property so that 

the person on whose premises it was left can exclude the possession of all others.” 

(quoting 8 C.J.S. Bailments § 8 (1988))). 

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Fair’s exclusive possession, dominion, and control over Releaf’s merchandise.10 

Thefundamental flawin Releaf’s argument is its failure to pointtoany noncontractual action by Fair that could give rise to an inference of an implied in fact 

bailment. Releaf concedes that Fair had no contractual duty to protect Releaf’s 

merchandise. And Releaf concedes the contractual agreement did not create an express 

bailment. Releaf acknowledged that its agreement with Fair did not require leaving 

merchandise in the booth overnight, that other vendors took their merchandise home 

every night, and that Releaf did not pay a fee for leaving its merchandise overnight. 

Releaf maintained some degree of possession over the merchandise by locking it inside 

its own cabinets and display cases and retaining the only keys to them. Under the 

agreement’s terms Fair clearly disclaimed any obligation for Releaf’s merchandise. The 

relevant undisputed facts thus reflect that Fair did not have exclusive possession of 

Releaf’s merchandise after operating hours. 

Releaf argues that this case is similar to J.P. Enterprises v. Ursin Seafoods, 

Inc.11 J.P. Enterprises operated a storage yard where it permitted fishing gear storage, 

and Ursin stored crab pots in J.P.’s yard.12 J.P. billed Ursin annually based on the pots 

it stored, and Ursin was permitted to move its pots in and out of the yard but had to 

provide written notice before removing pots that it sold.13 Ursin noticed some pots were 

missing, and it sued J.P. for the value of the missing pots. The issue was whether J.P. 

10 S

11 Id. at 1165. 

12 Id. 

13 

ee id. 

Id. 

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and Ursin had a bailee/bailor or lessee/lessor relationship.14 We held that J.P. was a 

bailee, reasoning that J.P. had “exclusive possession, control, and dominion over the 

property”15 based on the following facts: (1) Ursin could remove and store its pots at 

will, but J.P. required notice if Ursin sold its pots; (2) J.P. assessed a fee based on the 

number and type of pots stored; and (3) “J.P. restricted entry to the storage yard by 

fencing the area and providing keys to its customers.”16 

The lease or bailment analysis central to J.P. Enterprises is not on point for 

this case. The issue in that case was whether the parties’ agreement was properly 

characterized as a lease of land to store crab pots or as a bailment contract.17 Releaf and 

Fair agree that their agreement permitted Releaf to use the designated booth space inside 

Fair’s building to sell merchandise during operating hours. They dispute the nature of 

their agreement regarding the merchandise after operating hours. Releaf argues that the 

agreement between Fair and Releaf is properly categorized as a license rather than a 

lease. But assuming Releaf is correct that the agreement “merely entitle[d] [Releaf] to 

use the land of another for a specific purpose, subject to the management and control 

retained by the owner,” the agreement concerns booth space, not merchandise, and does 

not suggest an implied bailment. Concluding that the parties’ agreement described a 

lease, license, or something else during operating hours is irrelevant to their agreement 

regarding after-hours possession of and obligations about the merchandise. Even if Fair 

controlled all aspects of Releaf’s use of the booth space, it begs the question whether Fair 

also agreed to an after-hours bailment obligation for the merchandise. 

14 Id. 

15 Id. at 1166 (quoting 8 C.J.S. Bailments § 8 (1988)). 

16 Id. at 1165. 

17 Id. 

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18 Id. 

19 Id. at 1166. 

The facts ofthis case also aredistinguishable fromthose in J.P. Enterpris

rprises involved an agreement that required notice of items sold, but Releaf 

ired to inform Fair about where Releaf’s merchandise was located or whet

pt in the booth overnight. In J.P. Enterprises a fee was assessed based on 

and type of pots stored,18 but the flat fee Releaf paid for booth space was 

r leaving its merchandise overnight. Finally, J.P. “restricted entry to the stor

encing the area and providing keys to its customers.”19 Although Fair simila

he doors to its building, Releaf maintained possession of its merchandise 

its products in display cases and keeping the only keys. Unlike in J

es. 

J.P. Ente was 

not requ her 

it was ke the 

number no 

higher fo age 

yard by f rly 

locked t by 

locking .P. 

Enterprises, the facts do not suggest that Fair took exclusive possession, control, and 

dominion over Releaf’s merchandise. 

Based on the foregoing, we conclude that the superior court did not err by 

granting summary judgment to Fair on the issue of implied in fact bailment. 

V. CONCLUSION 

We AFFIRM the superior court’s decision. 

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