Opinion ID: 1241029
Heading Depth: 2
Heading Rank: 2

Heading: Application of the Statutory Bar to Western Modular

Text: Although I concur in the majority's conclusion as to the eighth exception to AS 08.18.161 as applied to WM, I wish to add a few observations which I think compel the result reached by the court. I do not think that the result can be explained on the basis of case law alone. There is, I think, a significant difference between the products involved in the Steinbrenner [7] and Achttien [8] cases cited in the majority opinion (doors, trim, plywood, and cabinets in Steinbrenner, and doors, door jambs, valances, handrails, and cabinets in Achttien ) and an entire prefabricated house. As the superior court found, Western Modular did not supply just windows, doors, lumber, and things of that nature... . It supplied a complete house... . Similarly, there are significant differences between the statutes in the cases relied upon by the court and the one involved here. For example, the new Arizona statute (noted in footnote 8 of the majority opinion) exempts from registration materialmen or manufacturers of finished products, materials, or articles of merchandise who do not install them. The Alaska statute exempts a person who only furnished materials, supplies or equipment without fabricating them into, or consuming them in the performance of, the work of the contractor. I think a prefabricated house is easily classified as a finished product under the Arizona statute, but I have more problems classifying it as materials, supplies or equipment under the Alaska statute. And I can accept the proposition that WM did not install the house under the Arizona statute, but it is less explainable how WM prefabricated the houses without fabricating them under the wording of the Alaska statute. Last, I think that the usefulness of similar statutes and prior case law is limited by the imprecision in the use of the word prefabricate. My reading of the word's definition is that it can refer either to a house completely assembled prior to transport or a house transported in component sections and assembled on-site. [9] Especially in light of the lower court's findings of fact, [10] under which WM would seem to be required to register, I think a fuller explanation should be forthcoming as to why we find on these facts that it was not required to do so. I think that neither the case law nor the wording of the statute compels a conclusion either way in this case. I can only reach a conclusion by examining the policy tensions underlying this case. The policy to be served by bringing WM within the scope of the statutory bar  i.e., excluding WM from the exemption  is fairly clear from prior case law. The policy of the statute is to protect the public by ensuring competence and financial responsibility in contractors. Sumner Development Corp. v. Shivers, 517 P.2d 757, 763 (Alaska 1974). That the public should be protected from on-site incompetent or irresponsible electricians installing wiring, plumbers installing faucets, carpenters installing wallboard, etc., but not be protected from the same professionals performing the same work off-site, is a distinction without merit as far as protection of the public goes. On the other hand, the distinction may be given merit by policies apparent from the perspective of firms in WM's position. If such a firm enters into a contract for the sale of a prefabricated product like the one involved here, it may not be a good policy to impose a requirement that the firm be registered as a contractor in every state to which the product may be shipped by its buyer. The unduly burdensome nature of such a requirement, and drastic nature of the sanction for non-compliance (forfeiture of claims and defenses), would place an unwarranted damper on technological development and growth in this area. My suggestion is that resolution of these conflicting policies be made by resort to the particular contract. If the contract specifies that the prefabricated products are to be used in a particular area, and the selling firm's warranty or other contractual provisions clearly contemplate on-site work, then the firm may reasonably be expected to ascertain and comply with the applicable requirements and regulations for conducting such operations in that area. If, on the other hand, the contract does not specify a particular location for the placement of the prefabricated product, or no contractual provision reasonably contemplates on-site work by the seller, then no duty to ascertain and comply would attach to the seller. In this case, the contract did not specify that the homes were to be located in Fairbanks, and additionally a provision put the onus of compliance with local building codes on IPL. As such, I think the court's conclusion is correct. Thus, I concur in the court's conclusion that the statutory bar should not be invoked against Western Modular, but I dissent from the conclusion that the statutory bar is to be invoked against Industrial Power & Light. I would bar neither party and let the litigation proceed accordingly.