Alaska Employment Law

UTPA May Play Powerful Role in Employment Cases 

This site has previously raised the possibility that plaintiffs might use the state’s Unfair Trade Practices Act to enforce selected employment-related claims.  If that possibility comes to pass, Friday’s opinion from the Alaska Supreme Court will be very important. 

In Kenai Chrysler Center, Inc. v. Denison, Op. No. 6167 (Alaska Sept. 21, 2007), the parent-guardians of an incapacitated child sued to void their son’s agreement to buy a car, and to recover damages under the state’s Unfair Trade Practices Act.  A jury returned a verdict agaisnt the car dealer, and Judge Harold Brown awarded the parents most of their actual fees. 

UTPA liability.   On appeal, the Supreme Court held that the son’s incapacity automatically voided the contract, without regard to the dealership’s knowledge.  Op. at pp. 8-10.   For their UTPA damages claim, the

parents relied on AS 45.50.471(b)(14), previously discussed on this site.  That section of UTPA provides:

[t]he terms ‘unfair methods of competition’ and ‘unfair or deceptive acts or practices’ include, but are not limited to, the following acts: . . . representing that an agreement confers or involves rights, remedies or obligations which it does not confer or involve, or which are prohibited by law.

After noting that “an act or practice can be unfair without being deceptive,” the Court adopted a “flexible, case-specific approach” that looks to whether the defendant’s conduct “went far beyond a simple assertion of the company’s good faith belief that the sale contract was valid.”  Op. at p. 27.  The Supreme Court held that the evidence before the jury supported a conclusion that the dealer’s “attempts to enforce the sales contract blatantly disregarded the Denisons’ rights and amounted to unethical conduct.”  Op. at p. 28.  Among the facts supporting this conclusion were the dealer’s one-month delay in consulting its attorney about the validty ofthe contract, and its counterclaim against the guardians and ward to enforce the contract. 

UTPA damages.  The Court also affirmed the jury’s damages calculations.  In so doing, the Court noted that UTPA assigns the imposition of treble damages to the trial  court, and makes such an award automatic upon a finding of liability (without regard to the nature of the defendant’s mental state).  Op. at pp. 34-36 & n.65.  Moreover, the Court held, a successful UTPA plaintiff may also recover punitive damages if it shows the necessary heightened mental state.   Id.   The Court seemed to agree that an UTPA treble damages award, unlike an UTPA punitive damages award, was not subject to sharing with the state under AS 09.17.020(j).  Op. at p. 35.

UTPA fees.  UTPA authorizes an award of “full reasonable attorney fees” to a successful plaintiff.   AS 45.50.537(a).  The Supreme Court affirmed the trial court’s exclusion of fees attributable to an ancillary proceeding (in the probate court) because that proceeding was subject to a separate fee award, and affirmed the court’s court reduction of the remaining fees by 20 % because of excessive time.  Op. at pp. 37-39.

Justice Matthews dissented from Chief Justice Bryner’s majority opinion on a damages issue not relevant to this discussion. 

Kenai Chrysler Center, Inc. v. Denison, Op. No. 6167 (Alaska Sept. 21, 2007). 

The parent-guardians were represented by Thomas Dosik from the Disability Law Center of Alaska.  Dennis Acker of Anchorage represented the car dealer.