Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Craig Stowers, Judge. Supreme Court No. S-13367 Superior Court No. 3AN-07-12062 CI
The opinion of the court was delivered by: Fabe, Justice.
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, e-mail email@example.com.
Before: Carpeneti, Chief Justice, Fabe, Winfree, and Christen, Justices.
CHRISTEN, Justice, dissenting in part.
An employee of Doyon Universal Services sustained a head injury while working at a pipeline pump station. She applied for and received workers' compensation benefits for the injury. She also brought a tort suit against Alyeska Pipeline Service Company, the operator of the pipeline pump station, alleging that its negligence was a proximate cause of her injuries. Alyeska sought summary judgment in the lawsuit,
asserting that it was a statutory employer under the Alaska Workers' Compensation Act and thus was immune from suit. The superior court granted summary judgment to Alyeska and also awarded it Alaska Civil Rule 68 attorney's fees. Because Alyeska is a project owner, and immune from suit based on that status, we affirm the summary judgment order dismissing the lawsuit. But we reverse the award of Rule 68 attorney's fees because the offer of judgment was not valid.
II. FACTS AND PROCEEDINGS
Sharin Anderson was injured while working for Doyon Universal Services at Pump Station 5 on the Trans-Alaska Pipeline System. Alyeska Pipeline Service Company, which operates the pipeline, contracted with Doyon to provide security, medical support, lodging, and catering services for employees who operate and maintain the pipeline. As part of its contract with Doyon, Alyeska agreed to provide workers' compensation insurance for Doyon's employees.
On July 25, 2007, Anderson was helping the head cook clean the loading dock area where food was stored. While Anderson was vacuuming, the head cook moved a "heavy duty industrial cart" that was used for food storage from its position near a wall. A table weighing at least seventy pounds had been placed in a vertical position behind the cart; the cases of food on the cart obscured the table from view.
Anderson was squatting while vacuuming. When the head cook removed the cart, the table, which was unsecured, fell directly on Anderson, hitting her in the head. According to the head cook, the force of the table hitting Anderson pushed her ten to twelve feet from her original position. Anderson was unconscious for at least three or four minutes after the table hit her. The head cook reported that Anderson "was having severe convulsions," and he was afraid that she would die. She was transported to Fairbanks Memorial Hospital by helicopter. She filed a report of injury with the Alaska Workers' Compensation Board and received more than $72,000 in workers' compensation benefits on the claim.
An investigation by Alyeska concluded that the table, which belonged to Alyeska, had been propped against the wall for several months. On December 20, 2007, Anderson filed a negligence action against Alyeska in superior court, seeking damages in excess of $500,000. Before Alyeska filed its answer, it wrote a letter to Anderson's attorney, highlighting the 2004 amendments to the exclusive liability provisions of the Alaska Workers' Compensation Act. The exclusive liability provisions limit an injured worker's remedy against the employer for work-related injuries to workers' compensation when the employer secures payment of compensation.*fn1 Alyeska informed Anderson that the amendments extended the exclusive liability provisions to project owners, not just employers. Alyeska contended that it was a "project owner" as defined in the amendments and therefore immune from suit for Anderson's injuries.
Alyeska answered Anderson's complaint on January 15, 2008, and raised these exclusive liability provisions as an affirmative defense. A little more than two weeks after its answer, Alyeska made an offer of judgment to Anderson in the amount of ten dollars, plus prejudgment interest, costs, and Alaska Civil Rule 82 attorney's fees. The fax transmittal that accompanied the offer of judgment stated that Alyeska "believe[d] the exclusive remedy protection of AS 23.30.055 applie[d] to this case." Anderson did not accept the offer.
Alyeska moved for summary judgment on March 6, 2008; it asked for a judgment dismissing Anderson's suit because Alyeska was her statutory employer and exempt from suit under AS 23.30.055, the exclusive liability provisions of the Alaska Workers' Compensation Act. Anderson opposed the motion, arguing that the statute should not be construed to include Alyeska within its ambit because Alyeska was not a "project owner" within the meaning of the statute. Anderson argued that applying the definition of "project owner" in AS 23.30.045(f) would create absurd results and that the court should construe "project owner" according to its common usage. She then argued that the pipeline was not a "project," that Alyeska did not own it, and that Alyeska was therefore not protected by the exclusive liability provisions of AS 23.30.055. In response, Alyeska disagreed with Anderson's proposed method of statutory construction and maintained that it fell within the statutory definition of "project owner." It argued in the alternative that maintenance of the pipeline was a project and that it was a "project owner" even if the term was construed according to its common usage.
The superior court granted summary judgment to Alyeska after oral argument on the motion. The court found that there were no genuine issues of material fact. It concluded that Alyeska was a "project owner" within the statutory definition and was therefore entitled to judgment as a matter of law. The court specifically limited its holding to the facts of the case because of the policy arguments Anderson made, noting that "there [was] some power and force" to Anderson's argument that the statute should not be construed broadly.
After the superior court entered final judgment, Alyeska moved for Alaska Civil Rule 68 and 82 attorney's fees in the amount of $12,409.88. Anderson opposed the motion for Rule 68 attorney's fees, asserting that Alyeska's offer of judgment was a "token offer" and should not trigger the provisions of Rule 68. She did not oppose imposition of Rule 82 attorney's fees. In response, Alyeska claimed that its offer was made in good faith and thus it was entitled to Rule 68 fees. Alyeska maintained that it had good reason to believe when it made its offer that "its exposure was nominal." It pointed out that it had notified Anderson's attorney before it filed its summary judgment motion that it would be relying on the exclusive ...