Opinion ID: 2514808
Heading Depth: 3
Heading Rank: 2

Heading: 2001 Through December 2004

Text: In early 2001 Ahtna, Inc. fired Darryl Jordan, the company president who had invited Harris to join in forming Ahtna Government Services. Ken Johns replaced Jordan as president of Ahtna, Inc. in April of that year. In March Neil Anderson, Ahtna, Inc.'s new chief financial officer, reviewed Ahtna, Inc.'s books and found accounting irregularities in many subsidiaries. In May 2001 Harris was fired. On October 19, 2001, Ahtna Government Services filed suit against Harris for breach of fiduciary duty and for rescission of the stock purchase agreement. Harris answered in December and filed counterclaims and a third-party complaint against Ahtna, Inc. on thirteen counts: actual fraud, constructive fraud, conversion, wrongful termination in violation of public policy, defamation, defamation to business reputation, intentional and negligent infliction of emotional distress, breach of contract, intentional and negligent misrepresentation, breach of the covenant of good faith and fair dealing, and tortious interference. Harris amended his third-party complaint in February 2002 to add a number of defendants, including Ken Johns (president and CEO of Ahtna, Inc.), Laura Gould (vice-president and CFO of Ahtna Government Services), Paul Tony and Neal Anderson (Ahtna, Inc. board members), and John Does I-X. [3] On September 11, 2003, Ahtna Government Services filed a motion requesting that the court place the burden on Harris to prove that the transactions were reasonable under AS 10.06.478, the statute governing related party transactions. A few days later, Ahtna, Inc. joined that motion and also filed a motion for summary judgment on Harris's non-compliance with AS 10.06.478. Harris opposed these motions in early October. On October 30 the trial court issued its order on burden of proof. It ruled that Harris was required to prove by a preponderance of the evidence that the transactions were fair, and that a majority of Ahtna Government Services's disinterested directors knew the material facts of the transactions and approved them. If he could not prove the former  the fairness of the transactions  the matter would be resolved against Harris. If he could not prove the latter, Harris was required to prove the fairness of the transactions by clear and convincing evidence. The trial court denied Ahtna, Inc.'s motion for summary judgment. The case advanced to a bench trial. The proceedings lasted from November 3, 2003 to November 13, resumed on December 8, and concluded on December 12. On August 16, 2004, the trial court entered an oral decision into the record. It found against Harris on all claims and directed Ahtna Government Services to prepare findings of fact and conclusions of law for its review. Harris filed objections to Ahtna Government Services's proposals, but the trial court overruled Harris's objections and adopted all of Ahtna Government Services's proposed findings except certain findings concerning Jordan. The trial court denied Ahtna, Inc.'s motion for enhanced attorney's fees, awarding the company $39,072 as calculated under Alaska Civil Rule 82(b)(2), but it granted full reasonable attorney's fees to Johns, Tony, and Anderson due to the vexatious nature of Harris's claims against them. The final judgment against Harris in favor of Ahtna Government Services was $802,753.44; the judgment in favor of Ahtna, Inc. was $58,647.31; and the judgment in favor of Johns, Tony, and Anderson was $91,929.24. Harris appeals. [4]