Court Opinion

ID: 2831983
Source: CourtListenerOpinion
Date Created: 2015-08-28 17:02:11.428156+00
Date Added: 2024-06-11T11:31:46.299470
License: Public Domain

Notice: This opinion is subject to correction before publication in the P ACIFIC R EPORTER .
      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.us.

               THE SUPREME COURT OF THE STATE OF ALASKA

OAKLY ENTERPRISES, LLC,                        )
and RYAN FRIESEN,                              )        Supreme Court No. S-15159
                                               )
                      Appellants,              )        Superior Court Nos. 3PA-08-01671 CI
                                               )        and 3PA-08-01349 CI (Consolidated)
      v.                                       )
                                               )        OPINION
NPI, LLC; NPI TIMBER, LLC; and                 )
COREY WHITNEY, individually                    )        No. 7042 - August 28, 2015
and d/b/a WHITNEY LOGGING,                     )
                                               )
                      Appellees.               )
                                               )

              Appeal from the Superior Court of the State of Alaska, Third
              Judicial District, Palmer, Kari Kristiansen, Judge.

              Appearances: David D. Clark, Law Office of David Clark,
              Anchorage, for Appellant. Jonathon A. Katcher, Pope &
              Katcher, and Debra J. Fitzgerald, Anchorage, for Appellees.

              Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and
              Bolger, Justices.

              MAASSEN, Justice.

I.    INTRODUCTION
              This case arises from a dispute over whether the owner of a wood chipper
may be held jointly and severally liable, along with two property owners, for damages
caused to their property by the chipper’s leak of diesel fuel. The chipper’s owner had
leased it to another person, who abandoned it. The property owners claim they were
only severally liable, if at all, for a portion of the damages and that the chipper’s owner
was liable for the rest. A jury found that the chipper did not contaminate one of the two
properties, but as for the other the jury found its owner jointly and severally liable, along
with the chipper’s owner. The superior court then equitably allocated damages among
the liable property owner, the owner of the chipper, and the chipper’s lessee. This
allocation left the property owner liable for most of his own loss.
              Both property owners appeal the superior court’s decision to equitably
allocate damages.1 They also appeal an evidentiary ruling and the award of attorney’s
fees. We affirm, holding that the superior court properly construed the governing
statutes and the evidence rules and that its award of attorney’s fees was not an abuse of
discretion.
II.    FACTS AND PROCEEDINGS
              Ryan Friesen and Oakly Enterprises, LLC, own properties across the road
from each other in Wasilla. Oakly Enterprises is a family-owned corporation, owned
half by Friesen and half by his father and stepmother.
              In 2004 a logger named Corey Whitney leased wood chipping equipment
from NPI, LLC, a company involved in construction and timber leases. Whitney later
entered into a lease with Oakly Enterprises for a shop and a place to store some of the
leased equipment. He entered into another lease with Friesen for a heavy equipment
parking area, where he parked the piece of equipment at issue here — a 1995 Peterson
chipper he had leased from NPI.
              In early 2006 the Alaska Department of Environmental Conservation
discovered several diesel spills on the Oakly Enterprises property, near the chipper. In

       1
              Although the property owners fared differently in the superior court, they
present their arguments jointly on appeal.

                                            -2-                                        7042
June the Department sent notices of violation to Whitney and Oakly Enterprises,
asserting that they had violated state regulations2 by failing to contact the Department
and submit a site characterization plan before cleaning up surface stains from the diesel
spills. Neither Whitney nor Oakly Enterprises was cooperative. In May 2007 Whitney
notified Oakly Enterprises that he would vacate its property at the end of June, and in
early July he transported some of the leased equipment back to NPI at Port MacKenzie,
a commercial and industrial area on Cook Inlet. Whitney left the remainder of the
equipment, including the Peterson chipper, in place on Friesen’s and Oakly Enterprises’
properties.
              In July 2007 Friesen hand-delivered a letter to NPI claiming he had become
“aware of some pretty large oil spills” on his property and would “start cleanup [him]self
to prevent further pollution” if NPI did not respond within five days. Four days later he
moved the Peterson chipper to property owned by his father. During the months that
followed, NPI removed most of its remaining equipment from the Friesen and Oakly
Enterprises properties, but it did not undertake any environmental cleanup. It recovered
the Peterson chipper in October 2008.
              In 2009 Friesen and Oakly Enterprises brought suit against NPI and
Whitney, seeking damages in excess of $150,000 for the contamination of their
properties, costs of cleanup, and rent.3 Whitney did not answer the complaint, and a

      2
              18 Alaska Administrative Code (AAC) 75.335 (2015) provides in relevant
part, “(a) Before proceeding with site cleanup under the site cleanup rules, a responsible
person shall characterize the extent of hazardous substance contamination at the site. (b)
A responsible person shall submit a site characterization workplan to the department for
approval before beginning site characterization work.”
      3
              Oakly and Friesen each brought suit under a variety of theories, including
                                                                          (continued...)

                                          -3-                                       7042

default judgment was entered against him. The superior court initially granted summary
judgment to NPI, holding that NPI was not liable for Whitney’s actions in polluting the
Friesen and Oakly Enterprises properties as the “operator” of the involved “facility” (as
these terms are defined for purposes of AS 46.03.822, which imposes strict liability for
damages and other costs “resulting from an unpermitted release of a hazardous
substance”); as the lessor of the Peterson chipper; as Whitney’s principal in an agency
relationship; or through a veil-piercing “sham transaction” theory. On reconsideration,
however, the superior court found genuine issues of material fact regarding NPI’s
liability under several theories, including whether it could be held liable as an “owner”
or “operator” under AS 46.03.822 and whether it was liable for rent and other costs
incurred after Whitney abandoned the Peterson chipper on the plaintiffs’ property. The
superior court also granted NPI’s motion in limine to exclude a report on environmental
conditions at NPI’s Port MacKenzie property, which Friesen had planned to introduce
“to rebut [NPI’s] assertion that it ran a clean camp.”
              The superior court conducted an eight-day jury trial on the issue of whether
NPI was liable for any of Friesen’s and Oakly Enterprises’ damages. The jury
instructions included one on “avoidable consequences,” proposed by NPI, and a
corresponding verdict form asking the jury to affix a dollar amount to the damages
Friesen reasonably could have avoided, if any.4 Answering specific questions on the

       3
       (...continued)
trespass, negligence, and agency liability, but they ultimately limited their environmental
claims to strict liability under AS 46.03.822, and their cases were consolidated.
       4
              The instruction stated:
              Ryan Friesen is not entitled to be paid for any loss or for part
              of any loss he could have avoided with reasonable efforts and
                                                                              (continued...)

                                           -4-                                        7042

special verdict form, the jury found that NPI was not the “operator of a facility” from
which diesel fuel was spilled on Oakly Enterprises’ property but that the diesel spill on
Friesen’s property came from the Peterson chipper. It found that “the reasonable costs
of repairing the damage to the Ryan Friesen real property from the diesel spills” was
$38,437, and that Friesen reasonably incurred $14,990 in expenses “in an effort to avoid
or reduce other losses he reasonably believed were caused by NPI’s 1995 Peterson
Chipper on his land.”5 Finally, the jury answered “Yes” to the question whether Friesen
could “reasonably have avoided all or part of the diesel spill on [his] property,” and it
found that “the dollar amount of loss to Ryan Friesen due to the diesel spill on [his]
property that [he] reasonably could have avoided” was $7,687.40 (20 percent of the total
amount it had found to represent the reasonable costs of repair).
                 NPI filed a post-trial motion asking the court “to equitably allocate damages
among the parties through the contribution process found in AS 46.03.882(j).” The court
granted NPI’s motion in a comprehensive order that detailed the history of the parties’
dispute, set out the jury’s factual findings, and identified the equitable factors the court
considered relevant. These included the “Gore factors,” which the court described in

       4
           (...continued)
                  without undue risk, hardship, or embarrassment, even though
                  the loss originally resulted from an act or omission for which
                  NPI or Whitney is legally responsible. If you decide that it
                  is more likely true than not true that Ryan Friesen could have
                  avoided any loss or any part of any loss with reasonable
                  efforts and without undue risk, hardship or embarrassment,
                  you may not require NPI or Whitney to pay the amount Ryan
                  Friesen could have reasonably avoided.
       5
             This latter amount, representing Friesen’s expenses in moving the chipper
from his property to property owned by his father, was reduced by remittitur to $10,787.

                                              -5-                                       7042

shorthand as “1) fault, 2) amount, 3) toxicity, 4) involvement, 5) care[,] and
6) cooperation.”6 Other equitable factors the court found relevant were “failure to
mitigate environmental damage, laches, unclean hands, and moral culpability.” Applying
these factors to the facts of the case, the court concluded that “[t]he most equitable and
fairest means of dividing responsibility for the diesel spill is to allocate fault based upon
the amount of time each party had responsibility for and control over the leaking
chipper.” The court found that for 115 days — 96 percent of the 119 days the chipper
was leaking diesel onto Friesen’s property — “both Whitney and Ryan [Friesen] knew
or should have known that the chipper was leaking, and had the ability to control the
chipper and/or the land,” whereas NPI had knowledge of the leak and control over the
chipper for only the remaining four percent of time, after Friesen delivered his notice.
The court therefore made this initial allocation of fault: 48 percent to Whitney,
48 percent to Friesen, and four percent to NPI.

       6
              “[T]he so-called ‘Gore Factors[]’ find their source in the legislative history
(and unsuccessful amendment) of CERCLA [the federal Comprehensive Environmental
Response, Compensation and Liability Act] by then-Representative Al Gore.” Lockheed
Martin Corp. v. United States, 35 F. Supp. 3d 92, 123 (D.D.C. 2014). In longhand, the
factors are “[1.] the ability of the parties to demonstrate that their contribution to a
discharge, release or disposal of a hazardous waste can be distinguished; [2.] the amount
of the hazardous waste involved; [3.] the degree of toxicity of the hazardous waste
involved; [4.] the degree of involvement by the parties in the generation, transportation,
treatment, storage, or disposal of the hazardous waste; [5.] the degree of care exercised
by the parties with respect to the hazardous waste concerned, taking into account the
characteristics of such hazardous waste; and [6.] the degree of cooperation by the parties
with Federal, State or local officials to prevent any harm to the public health or the
environment.” Id. (alterations in original) (quoting Envtl. Transp. Sys., Inc. v. ENSCO,
Inc., 969 F.2d 503, 508 (7th Cir. 1992)).

                                            -6-                                        7042

              The court further concluded that Whitney’s share of damages was
uncollectible and was thus an orphan share.7 It divided the orphan share between Friesen
and NPI in proportion to their relative shares of damages, with the result that Friesen was
responsible for $35,423.54 of the costs of remediating Friesen’s property and NPI was
responsible for the remaining $3,013.46. The court subsequently applied the same
analysis to Friesen’s expenses in removing the chipper from his property (the $14,990
the jury found to be his removal expenses, reduced on remittitur to $10,787). It found
that NPI could have recovered the chipper for considerably less money than Friesen
spent moving it but that Friesen and his father “unreasonably and unjustifiably refused
to return the chipper to NPI for fifteen months.” Using the same percentages it had used
for the costs of repair, the court concluded that Friesen was responsible for $9,941.30 of
the removal expenses and NPI was responsible for the remaining $845.70.
              The court found that neither NPI nor Friesen was the prevailing party on
the claim between them. However, it found that NPI prevailed over Oakly Enterprises,
and it awarded NPI attorney’s fees from Oakly Enterprises in the amount of $36,764.63.

       7
               Under CERCLA, “orphan shares” have been defined as response costs
attributable to bankrupt or financially insolvent potentially responsible parties, which are
allocated or apportioned among all solvent potentially responsible parties to the
litigation. See Charter Twp. of Oshtemo v. Am. Cyanamid Co., 898 F. Supp. 506, 508-09
(W.D. Mich. 1995).
               “Potentially responsible party” is another term of art, “promulgated by the
EPA to represent parties subject to liability for cleanup costs under CERCLA section
107(a).” Larry M. Sargent, Environmental Law — AM International, Inc. v.
International Forging Equipment: Release Agreements Between Private Parties Under
CERCLA, 21 M EM . ST . U.L.REV . 423, 426 n.28 (1991). It is reflected in Alaska law:
“Any entity that may be required to take financial responsibility for cleaning up a
contaminated site is a potentially responsible party.” Fed. Deposit Ins. Corp. v. Laidlaw
Transit, Inc., 21 P.3d 344, 349 (Alaska 2001) (citing AS 46.03.822(a)(3)).

                                           -7-                                        7042

             Friesen and Oakly Enterprises appeal the superior court’s decision to grant
NPI’s motion for contribution. They argue that the jury’s avoidable consequences
finding apportioned the harms caused by the diesel spill under AS 46.03.822(i) and
contribution was unnecessary. They also appeal the superior court’s exclusion of the
report evidencing the condition of NPI’s Port MacKenzie property, as well as the
calculation of NPI’s attorney’s fee award.
III.   STANDARDS OF REVIEW
             The superior court’s decision to allocate and apply contribution to a damage
award involves the interpretation and application of a statute.8 Questions regarding the
interpretation and application of a statute are “questions of law to which we apply our
independent judgment.”9 We interpret statutes “according to reason, practicality, and
common sense, taking into account the plain meaning and purpose of the law as well as
the intent of the drafters.”10 “Whether the superior court applied an incorrect legal
standard is a question of law that we review using our independent judgment.”11
             We set aside factual findings of a lower court “only when they are clearly
erroneous.”12 “[F]actual findings are clearly erroneous when, after a review of the record
as a whole, we are ‘left with a definite and firm conviction that a mistake has been
made.’ ”13

       8
             See AS 46.03.822.

       9
             Grimm v. Wagoner, 77 P.3d 423, 427 (Alaska 2003).

       10

             Native Vill. of Elim v. State, 990 P.2d 1, 5 (Alaska 1999).
       11
             Guttchen v. Gabriel, 49 P.3d 223, 225 (Alaska 2002).
       12
             Fred Meyer of Alaska, Inc. v. Bailey, 100 P.3d 881, 883 (Alaska 2004).
       13
             Id. at 884 (quoting Bennett v. Bennett, 6 P.3d 724, 726 (Alaska 2000)).

                                          -8-                                       7042

              “We review the superior court’s decision to admit or exclude evidence for
an abuse of discretion.”14 But “[t]he correct scope or interpretation of a rule of evidence
creates a question of law ‘to which this court applies its independent judgment, adopting
the rule most persuasive in light of reason, precedent and policy.’ ”15
              “We review an award of attorney’s fees under an abuse of discretion
standard.”16 “The trial court has broad discretion in awarding attorney’s fees; this court
will not find an abuse of discretion absent a showing that the award was arbitrary,
capricious, manifestly unreasonable, or stemmed from improper motive.”17
IV.	   DISCUSSION
       A.	    The Superior Court Did Not Err When It Granted NPI’s Post-Trial
              Request For Contribution And Equitable Allocation Under
              AS 46.03.822(j).
              Alaska Statute 46.03.822(a) provides that “the owner and the operator of
a . . . facility, from which there is a release . . . of a hazardous substance,”18 is “strictly
liable, jointly and severally, for damages.”19 This is Alaska’s analog to the federal
Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA),

       14
Greene v. Tinker, 332 P.3d 21, 31 (Alaska 2014).
       15
            City of Bethel v. Peters, 97 P.3d 822, 825 (Alaska 2004) (quoting State v.
Coon, 974 P.2d 386, 389 (Alaska 1999)).
       16	
              Ware v. Ware, 161 P.3d 1188, 1192 (Alaska 2007).
       17
            Id. (quoting United Servs. Auto. Ass’n v. Pruitt ex rel. Pruitt, 38 P.3d 528,
531 (Alaska 2001)).
       18
              AS 46.03.822(a)(2). “Facility” is broadly defined to include such things
as a “structure,” “equipment,” and a “site or area at which a hazardous substance has
been deposited, stored, disposed of, placed, or otherwise located.”
AS 46.03.826(3)(A)(i), (ii).
       19
              AS 46.03.822(a).

                                             - 9 -	                                      7042

which imposes strict joint and several liability under similar circumstances.20 Because
this case was brought under section .822, our analysis turns first to the plain language of
that statute;21 federal law interpreting CERCLA is persuasive but not controlling.22
              A person can escape the joint liability imposed by subsection .822(a)
through apportionment. Under subsection .822(i), “a person otherwise jointly and
severally liable under [subsection .822(a)] is relieved of joint liability and is liable
severally for damages and costs . . . if the person proves that (1) the harm caused by the
release . . . is divisible; and (2) there is a reasonable basis for apportionment of costs and
damages to that person.”23 “Equitable considerations play no role in the apportionment

       20
              42 U.S.C. § 9607 (2012). We have recognized that the Alaska legislature
crafted the current version of AS 46.03.822 using CERCLA “as a pattern.” Fed. Deposit
Ins. Corp. v. Laidlaw Transit, Inc., 21 P.3d 344, 353-54 (Alaska 2001); see also Berg v.
Popham, 113 P.3d 604, 606 (Alaska 2005) (identifying section .822 as “Alaska’s version
of [CERCLA]”).
       21
             State, Dep’t of Commerce, Cmty. & Econ. Dev., Div. of Ins. v. Alyeska
Pipeline Serv. Co., 262 P.3d 593, 597 (Alaska 2011) (explaining that under the “sliding
scale approach” to statutory interpretation, “[t]he plainer the statutory language is, the
more convincing the evidence of contrary legislative purpose or intent must be.” (quoting
Gov’t Emps. Ins. Co. v. Graham-Gonzalez, 107 P.3d 279, 284 (Alaska 2005))).
       22
              See Berg, 113 P.3d at 609 (“Th[e] difference between Alaska and federal
law reflects our legislature’s intent to expand liability beyond CERCLA’s standards.”).
       23
             AS 46.03.822(i). Cf. Burlington N. & Santa Fe Ry. Co. v. United States,
556 U.S. 599, 614 (2009) (“[A]pportionment is proper when ‘there is a reasonable basis
for determining the contribution of each cause to a single harm.’ ” (quoting
RESTATEMENT (SECOND ) OF TORTS § 433A(1)(b) (1965))). Subsection .822(i) is similar
to Restatement § 433A, which allows apportionment of damages “among two or more
causes where (a) there are distinct harms, or (b) there is a reasonable basis for
determining the contribution of each cause to a single harm.” Subsection .822(i) differs
in that it requires a showing of both distinct harms and a reasonable basis for
apportionment.

                                            - 10 -                                      7042

analysis; rather, apportionment is proper only when the evidence supports the divisibility
of the damages jointly caused by the [potentially responsible parties].”24 Persons
relieved of joint and several liability by apportionment are liable for only their own
divisible shares of costs and damages. The burden of proof is on the party seeking to
avoid joint and several liability; this furthers the legislative policy that determinations of
liability should be based on status, not fault, and should not stand in the way of prompt
environmental response.25
              “Not all harms are capable of apportionment, however”;26 jointly and
severally liable parties who cannot prove the divisibility of harm and a reasonable basis
for apportionment remain liable for the entire harm.27 But they may bring claims for
contribution against other persons who are also jointly and severally liable for the same
harm, either in the same civil action or in a subsequent one.28 Thus, once a party with
a direct claim for damages against another has been found jointly and severally liable for

       24
              Burlington N., 556 U.S. at 615 n.9.
       25
              See Laidlaw Transit, 21 P.3d at 348 (“When the legislature created a strict
liability regime for hazardous substance contamination, it expressed its judgment that
negligence remedies were not adequately controlling the hazardous substance
contamination problem.”).
       26
              Burlington N., 556 U.S. at 614-15.
       27
             See Spruce Equip. Co. v. Maloney, 527 P.2d 1295, 1298 (Alaska 1974)
(“Where the harm is single and indivisible, it is not apportioned between the plaintiff and
the defendant, in the absence of a statute providing for such division of the damages
upon an arbitrary basis.” (quoting RESTATEMENT (SECOND ) OF TORTS § 465 cmt. c
(1966))).
       28
             AS 46.03.822(j); Laidlaw Transit, 21 P.3d at 354-55 (recognizing direct
private cause of action, as well as cause of action for contribution, to recover for
damages to property caused by environmental contamination under AS 46.03.822).

                                            - 11 -                                      7042

a release of hazardous substances, the court may, as it did here, “recast the direct claim
as a claim for contribution upon conclusion of the litigation.”29
             In contrast with apportionment, which relates to the responsibility of a
particular cause for a particular amount of damages, contribution claims essentially seek
to allocate damages equitably among those who share responsibility.30 Contribution
under subsection .822(j) allows parties who are jointly and severally liable to recover
from each other on the basis of equitable factors that the superior court determines are
appropriate to the case.31 But a person who has been “relieved of joint liability and is
liable severally for damages and costs attributable to that person” under the
apportionment analysis of subsection .822(i) cannot be made to contribute to persons
who remain jointly and severally liable for all the damages; such a person is no longer
an “other person who is liable under (a) of this section” and who can be pursued for
contribution under subsection .822(j).
             On this appeal, there is no dispute that Friesen and NPI were both strictly
liable under section .822(a) for the diesel spill on Friesen’s property, as owners and
operators of the “facility” (broadly defined by statute to include both the equipment and

      29
             Id. at 350.
      30
             See McLaughlin v. Lougee, 137 P.3d 267, 275-79 (Alaska 2006)
(discussing history of contribution claims in Alaska and recognizing common law
contribution remedy “because it furthers the goal of apportioning of tort losses in
accordance with each responsible person’s percentage of fault”).
      31
              See Laidlaw Transit, 21 P.3d at 350 (recognizing that “when a potentially
responsible party sues for direct damages under the federal counterparts to subsections
.822(a) and (j), the federal statutes allow the claim, but leave room for equitable
distinctions upon conclusion of the litigation”).

                                          - 12 -                                    7042

the site32) where the spill occurred. But Friesen argues that the superior court erred when
it granted NPI’s claim for contribution and applied the equitable analysis. He contends
that contribution was inappropriate in this case because the jury had already apportioned
the damages for which he could be held severally liable under subsection .822(i) when,
in response to the verdict’s questions about avoidable consequences, it identified the
amount of damages he reasonably could have avoided. In his view, the jury’s finding
that he reasonably could have avoided some of the damages was a determination that he
was not responsible for any of the other damages. We reject this argument for the
reasons that follow.
              1.	      The jury’s finding of avoidable consequences was not an
                       apportionment under AS 46.03.822(i).
              In its most common configuration, the damages rule of avoidable
consequences bars injured parties from recovering damages for any harm they could
have avoided “by the use of reasonable effort or expenditure after the commission of the
tort.”33 When a fact-finder has concluded that an injured party reasonably could have
avoided some of the harm, the injured party’s damages may be reduced by
apportionment.34 But as noted above, a party seeking apportionment under subsection

       32	
              See supra note 18.
      33
              RESTATEMENT (SECOND ) OF T ORTS § 918 (1979); see also Anchorage
Indep. Sch. Dist. v. Stephens, 370 P.2d 531, 533 (Alaska 1962) (“It is a cardinal rule in
the law of damages that a plaintiff, with an otherwise valid right of action, is denied
recovery for so much of the losses as are shown to have resulted from failure on his part
to use reasonable efforts to avoid or prevent them. This rule . . . is known as the
avoidable consequences rule.”).
       34
             See R ESTATEMENT (SECOND ) OF TORTS § 433A cmt. f (1979) (“The
damages rule as to avoidable consequences, stated in § 918, which denies recovery for
the aggravation of personal injuries or other harm resulting from the plaintiff’s failure
                                                                          (continued...)

                                          - 13 -	                                    7042

.822(i) must make a threshold showing that the harm is divisible and there is a reasonable
basis for apportionment. Here, we conclude that the jury’s finding of avoidable
consequences was not an apportionment under subsection .822(i), as Friesen argues,
because neither the parties nor the court intended it to be and because Friesen did not
make the threshold showing.
              The jury was specifically instructed to determine whether there was any
loss Friesen “could have avoided with reasonable efforts and without undue risk,
hardship or embarrassment, even though the loss originally resulted from an act or
omission for which NPI or Whitney is legally responsible.” In its special verdict form
the jury identified $7,687.40 as “the dollar amount of loss to Ryan Friesen due to the
diesel spill on the Ryan Friesen property that Ryan Friesen reasonably could have
avoided.” The jury made no other findings on the subject of Friesen’s liability. Its
finding that he could have avoided some consequences of the spill did not resolve his
liability as an owner for the remainder of the harm the spill caused — liability which,
absent the required findings, was joint and several strict liability regardless of fault.
              A review of the trial proceedings shows that the parties did not intend the
jury to use the “avoidable consequences” instruction to apportion to Friesen a several
share of harm. Friesen initially took the position that the jury should not be asked to
apportion damages; NPI’s counsel, on the other hand, suggested that “the court could be
helpfully informed by the jury’s input on apportionment” without feeling bound by it.
But the parties’ positions evolved over several days, as their counsel debated whether the
jury should have any input into the apportionment of damages and, if not, whether it
should be informed of the court’s role in apportioning damages after trial. Friesen asked

       34
        (...continued)
to use due care to avoid it after the commission of the tort, frequently requires such
apportionment, and is merely an application of the rule stated here.”).

                                           - 14 -                                     7042

that the jury be instructed, “You will be asked to determine the total amount of damages
to the property; the court will also decide . . . how much damages to assign to each
party.” NPI objected, arguing that such an instruction would confuse the jury, cast doubt
on its work, and prompt it to speculate about what the court would do. The court decided
not to inform the jury about the possible post-verdict process.
              At the end of NPI’s case Friesen moved for a directed verdict on whether
harm could be apportioned, on grounds that NPI had failed to prove the factual
prerequisites. The court suggested, as it had before, that the jury be asked to decide the
issue, to which Friesen’s counsel responded that NPI “hasn’t produced any evidence
regarding divisib[ility]. So it’s not a question that can go to the jury.” The court denied
the motion, explaining that it was still unclear whether the issue would be submitted to
the jury in a second trial phase or decided post-trial by the court. The court asked for
briefing on the issue, but it does not appear the parties submitted any before the close of
trial.
              Still, it is clear from the record that both parties ultimately understood the
jury was not being asked to apportion damages. Friesen’s counsel told the jury in his
closing argument that it was being asked to determine the total amount of damage caused
to his clients’ property but not “to do any kind of allocation of fault . . . I don’t want you
to go back to the jury room and say, . . . we think perhaps NPI is only 30 percent
at . . . fault; and, therefore, 30 percent of the total damages we’re going to write in here.
That’s not how you do it.” Before the court sent the jury out to deliberate, and referring
specifically to “[subsection] (i) of the State CERCLA statute [the apportionment
provision], whether that becomes a jury question or not,” the court asked the parties
whether they now were in agreement that apportionment was a question to take up only
after the verdict. NPI agreed that it was. Friesen argued that the jury should at least be

                                            - 15 -                                      7042

allowed to allocate damages as between Friesen and Whitney, but the court explicitly
disagreed.
              Finally, after the jury returned its verdict and the jurors were polled, the
court asked the parties whether they “need[ed] the court to do any further inquiry on
damages or apportionment or anything; the jury can go?” to which counsel for both
parties answered in the affirmative.
              In sum, though positions shifted during trial, it is clear that neither party
ultimately expected that the jury would decide how damages would be apportioned for
purposes of subsection .822(i), notwithstanding the “avoidable consequences”
instruction, and neither party asked that the jury make factual findings that could satisfy
the prerequisites of that subsection. We conclude, therefore, that the jury’s finding of
avoidable consequences as to some damages was not, and was not intended to be, an
apportionment of damages for purposes of subsection .822(i). By deciding that Friesen
could have avoided certain damages with reasonable effort, the jury was not deciding
that he was not jointly and severally liable for the rest.
              2.	    The superior court properly ordered contribution pursuant to
                     AS 46.03.822(j).
              Following trial, NPI filed a motion for “contribution and equitable
allocation” under AS 46.03.822(j). The superior court granted the motion and properly
“recast the direct claim as a claim for contribution.”35 It conducted an analysis pursuant
to subsection .822(j), in which it equitably allocated the entire $38,437 in remediation
damages among Whitney, Friesen, and NPI. It properly relied on the jury’s finding that
Friesen could have avoided some of his damages to hold that he was “a non-innocent
[potentially responsible party]” who could not avail himself of an “innocent landowner”

       35
              See Laidlaw Transit, 21 P.3d at 350.

                                           - 16 -	                                   7042
defense. And the court was acting within its authority under Alaska law when it made
equitable findings in the contribution phase independent of the jury findings to support
its allocation of damages.36
              The court applied the same contribution analysis to the jury’s award of
$14,990 (reduced on remittitur to $10,787) for “expenses Ryan Friesen reasonably
incurred in an effort to avoid or reduce other losses he reasonably believed were caused
by NPI’s 1995 Peterson Chipper on his land” — damages Friesen labels as “mitigation
damages.” He argues that “[i]nterpreting AS 46.03.822(j) to allow contribution for
mitigation is an absurd result.” But he does not explain how section .822 could be
interpreted in any other way, or why mitigation expenses should be treated any
differently than any other recoverable damages for purposes of contribution.
              Strict liability under subsection .822(a) was the only cause of action that
went to the jury. The parties apparently agreed that among the damages Friesen could
ask the jury to award under subsection .822(a) were the mitigation expenses he incurred
in moving the chipper from his land. The court so instructed the jury, the mitigation
expenses were awarded under that category on the special verdict form, and there is no
argument on appeal that the removal costs were not recoverable as damages under
subsection .822(a).37 The “damages and costs” that may be allocated under subsection

       36
               See Vinson v. Hamilton, 854 P.2d 733, 736 (Alaska 1993) (“In Alaska, the
right to a jury in civil cases ‘is preserved to the same extent as it existed at common law,’
in suits where the amount in controversy is more than $250. If a party seeks only
equitable relief, then there is no right to a jury trial.” (quoting Alaska Const. art. I, § 16)).
       37
             Under the statutes’ broad definitions, “damages” include “damages to
persons,” AS 46.03.822(m)(1), and “include but are not limited to injury to or loss of
persons or property, real or personal, loss of income, loss of the means of producing
income, or the loss of an economic benefit.” AS 46.03.824 (emphasis added). We
observed in Kodiak Island Borough v. Exxon Corp., 991 P.2d 757, 764 (Alaska 1999),
                                                                         (continued...)

                                             - 17 -                                        7042

.822(j) are not defined any differently than they are in subsection .822(a). We see no
error in the court’s analysis.38
       B.	    The Superior Court Did Not Abuse Its Discretion By Excluding The
              Environmental Report Regarding NPI’s Port MacKenzie Property.
              The superior court granted NPI’s motion to exclude a consultant’s report
on the environmental condition of NPI’s property at Port MacKenzie, three years after
the diesel spill at issue here, concluding that the report was “inadmissible Rule 404
evidence and would result in confusion to the jury.” Alaska Evidence Rule 404 governs
the admissibility of “propensity” evidence;39 it provides that “[e]vidence of other . . . acts
is not admissible if the sole purpose for offering the evidence is to prove the character
of a person in order to show that the person acted in conformity therewith.”40 Propensity
evidence may be admitted, however, if it is offered “for a proper purpose, ‘including, but

       37
         (...continued)
that “[n]othing in the wording or legislative history of the hazardous substances statutes
hints that subsection .822(a)’s more recently added examples of compensable harms
were meant to exclude other claims for different spill-related harms or to constrict the
universe of future recovery — for municipalities or for any other prospective claimants.”
(Emphasis added.)
       38
             Friesen does not challenge the findings that form the factual basis for the
superior court’s allocation of damages or the equitable factors that it chose to apply.
       39
             “In this context, the phrase ‘propensity evidence’ is legal shorthand; it
means: evidence of a person’s other bad acts whose sole relevance is to prove the
person’s character, so that the person’s character can then be used as circumstantial
evidence that the person acted true to character during the episode being litigated.”
Bingaman v. State, 76 P.3d 398, 403 (Alaska App. 2003).
       40
              Alaska R. Evid. 404(b)(1).

                                            - 18 -	                                     7042

not limited to, proof of motive, opportunity, intent, preparation, plan, knowledge,
identity, or absence of mistake or accident.’ ”41
             Oakly Enterprises argues that the environmental report was admissible
under Alaska Evidence Rules 404 and 406 to show that the spill from the Peterson
chipper was due to “NPI’s corporate culture [which] allowed for polluting” and was
therefore not the “result of a mistake or an accident.” We reject this argument. The
proposed use of the evidence can only reasonably be characterized as to show a
propensity — i.e., because NPI was responsible for pollution found at a different
location, it must be responsible for the pollution on Friesen’s and Oakly Enterprises’
property three years earlier.42 The superior court’s decision to exclude the report under
Evidence Rule 404 was not an abuse of discretion.
             Nor was the report admissible under Evidence Rule 406, which allows
evidence of a person’s habit or an organization’s routine practice “to prove that the
conduct or the person or organization on a particular occasion was in conformity with
the habit or routine practice.” To be admissible, evidence of habit or routine practice
must demonstrate, at the very least, a “regular practice of meeting a particular kind of
situation with a specific type of conduct.”43 A habit is one that occurs with such

      41
            Conley v. Alaska Commc’ns Sys. Holdings, Inc., 323 P.3d 1131, 1136
(Alaska 2014) (quoting Alaska R. Evid. 404(b)(1)) (emphasis omitted).
      42
             See Wickwire v. Arctic Circle Air Servs., 722 P.2d 930, 934 (Alaska 1986)
(“[E]vidence of negligence in inspecting one plane is not admissible as proof of
negligence in inspecting another plane.”); Am. Nat’l Watermattress Corp. v. Manville,
642 P.2d 1330, 1336 (Alaska 1982) (holding that it was error to allow testimony in
negligence action against waterbed manufacturer when it concerned the manufacturer’s
post-accident conduct in not recalling the product or issuing warning).
      43
             Commentary, Alaska R. Evid. 406, first paragraph (quoting M C CORMICK
                                                                       (continued...)

                                          - 19 -                                   7042

frequency as to become nearly reflexive and automatic.44 This view “aligns with a policy
of caution in admitting evidence of a pattern of conduct as habit, out of concern that the
rule admitting habit evidence will swallow the rule excluding character evidence.”45 As
applied to this case, it would be unreasonable to conclude that a report of environmental
contamination three years after the diesel spill at issue shows NPI’s “regular practice of
meeting a particular kind of situation with a specific type of conduct.” The superior
court did not abuse its discretion when it held the evidence inadmissible under Rule 406.
             Finally, evidence admissible under other rules must still be excluded under
Alaska Evidence Rule 403 if its probative value is outweighed by its unfairly prejudicial
effect.46 And Evidence Rule 404(b)(1)’s presumption that propensity evidence is
inadmissible “alters the normal Rule 403 balancing test” so that the party seeking to pass
the test “must show that the evidence’s use for non-propensity purposes will be
substantial enough to outweigh the substantial risk of prejudice that such evidence
always carries.”47 Evidence of conditions at NPI’s Port MacKenzie property had little
relevance to whether NPI’s Peterson chipper caused pollution on Oakly Enterprises’
property. The three-year span between the spill and the report made its conclusions even

      43
        (...continued)
ON E VIDENCE § 195, at 462 (2d ed. 1972)).

      44
             See Wacker v. State, 171 P.3d 1164, 1169 (Alaska App. 2007).
      45
           Id. (citing STEPHEN A. SALTZBURG ET AL., 2 FEDERAL RULES OF EVIDENCE
M ANUAL § 406.02 (9th ed. 2006)).
      46
              See Conley, 323 P.3d at 1136 (noting that if a court determines that
propensity evidence is admissible for a proper purpose under Evidence Rule 404(b)(1),
then Evidence Rule 403 “requires the court to weigh the probative value of the evidence
against the danger of unfair prejudice”).
      47
             Id. at 1144 (Fabe, C.J., dissenting).

                                          - 20 -                                    7042

less relevant to the issues being litigated. And the superior court, in excluding the report,
further noted that it would confuse the jury, likely because of its remoteness from the
events at issue in terms of both time and geography. For all these reasons, we see no
abuse of discretion in the superior court’s exclusion of the report.
       C.	    The Superior Court Did Not Abuse Its Discretion In Its Award of
              Attorney’s Fees Against Oakly Enterprises.
              For cases that go to trial, prevailing parties who do not recover money
judgments are entitled to fee awards that are 30 percent of their “reasonable actual
attorney’s fees which were necessarily incurred.”48 The superior court determined that
neither Friesen nor NPI was a prevailing party on the claim between them, but that NPI
had prevailed over Oakly Enterprises and was entitled to attorney’s fees of $36,764.63.
The court’s starting point in calculating the fee award was NPI’s claimed actual fees of
$321,812.50. From this amount it subtracted $76,715, reflecting work done during the
contribution phase when Oakly Enterprises was only minimally involved. The court
divided the remainder, allocating half to NPI’s litigation against Friesen and half to its
litigation against Oakly Enterprises. Of the half of the total attributable to the litigation
against Oakly Enterprises, the court awarded NPI 30 percent of it as required by Alaska
Civil Rule 82(b).
              Oakly Enterprises contends that NPI’s fees should have been further
reduced because they were disproportionate to both Oakly Enterprises’ fees, which it
claims were only $75,000, and the amounts ultimately at issue.
              We have held that “[a]n attorney’s fees decision ‘should not be disturbed
unless it is manifestly unreasonable.’ ”49 The reasonableness of fees depends on a

       48
              Alaska R. Civ. P. 82(b)(2).
       49
              Alaskan Crude Corp. v. State, Alaska Oil & Gas Conservation Comm’n,
                                                                      (continued...)

                                            - 21 -	                                    7042

number of factors, including whether there was a trial, “the complexity of the litigation,
the length of trial, and the reasonableness of the attorneys’ hourly rates and the number
of hours expended.”50 A large discrepancy between the fees incurred by the winning and
losing sides “can be some evidence that [the prevailing party’s] fees are unreasonable,”
but “it is not conclusive on that point as there are a number of other possible explanations
for such a discrepancy.”51 For example, “burdens assumed by opposite sides of litigation
are not necessarily equal, and it is a judgment call as to whether such a discrepancy
reflects over-preparation and over-billing.”52 In this case, Oakly Enterprises’ claim
against NPI involved summary judgment proceedings and an eight-day jury trial. The
trial judge was personally aware of the quality and quantity of the work NPI’s attorneys
performed. Her calculation of the award — including a list of reductions for specific
entries devoted to post-trial proceedings — shows that she carefully reviewed the
itemized billing records in support of NPI’s application. We see no abuse of discretion
in her conclusion that a discrepancy in fees did not require further reduction.53

       49
       (...continued)
309 P.3d 1249, 1254 (Alaska 2013) (quoting Miller v. Matanuska-Susitna Borough, 54
P.3d 285, 289 (Alaska 2002)).
       50
             Krone v. State, Dep’t of Health & Soc. Servs., 222 P.3d 250, 253 (Alaska
2009) (internal quotation marks omitted).
       51
              Gamble v. Northstore P’ship, 28 P.3d 286, 289-91 (Alaska 2001).
       52
              Id. at 289-90.
       53
             Oakly Enterprises highlights the work on an attorney’s fees motion as an
example of what it claims to be excessive billing by NPI’s attorneys. The motion,
apparently drafted episodically over the course of several months, summarized the case’s
history before addressing the prevailing party issue, attorney’s fees under both Alaska
Civil Rule 68 and Rule 82, and the allocation of fees and costs between Oakly
                                                                          (continued...)

                                           - 22 -                                     7042

              Oakly Enterprises correctly observes that NPI’s total fees exceeded the
amount in controversy. But “[w]e have never stated that spending more on attorney’s
fees than the amount in controversy is per se unreasonable.”54 Friesen and Oakly
Enterprises alleged in their complaint that their property damage and cleanup costs
would “exceed $150,000,” and the summary judgment motions, jury trial, and extensive
post-trial proceedings provide an explanation for why the costs of litigation were hard
to contain. Again, the claimed lack of proportionality does not cause us to question the
superior court’s exercise of its discretion.55
V.     CONCLUSION
              The judgment of the superior court is AFFIRMED.

       53
         (...continued)
Enterprises and Friesen. Giving due deference to the superior court’s closer view of the
attorneys, their work, and its significance in the litigation, we see no abuse of discretion
in the court’s failure to reduce the fees claimed for this activity.
       54
             Okagawa v. Yaple, 234 P.3d 1278, 1282 (Alaska 2010). Cf. Rhodes v.
Erion, 189 P.3d 1051, 1053 (Alaska 2008) (stating “that whether [defendant] spent more
on her defense than the amount in controversy is not dispositive” when determining
whether attorney’s fees award should be reduced).
       55
             Friesen includes a challenge to the superior court’s prevailing party
determination in the appellants’ statement of issues presented for review, but it is not
addressed in his argument, and we therefore consider it waived. See Adamson v. Univ.
of Alaska, 819 P.2d 886, 889 n.3 (Alaska 1991) (“[W]here a point is given only a cursory
statement in the argument portion of a brief, the point will not be considered on
appeal.”).

                                           - 23 -                                     7042