Category: Alaska Contracting

Alaska contracting matters including but not limited to topics such as: offers, acceptance, consideration, damages, good faith and fair dealing, statutes of limitations, construction contract, insurance contracts, credit cards, notes, loans, business acquisition. Editor, Clayton Walker. Publisher, Alaska Law Offices, Inc., 240 E. Tudor Rd. Ste. 230, Anchorage, AK 99503

Posted on

Alaska Overtime — Professional Employee Exemption Doesn’t Cover Pilots

Alaska Overtime law requires covered employers to pay overtime to covered employees.  One exemption to the overtime law is the Professional Employee Exemption.  The old Alaska exemption was not the same as the Federal Exemption and was particularly vague.  The Alaska Supreme Court provided guidance on interpreting the old statute in Dayhoff v. Temsco Helicopters, Inc.,  848 P.2d 1367, 1371 (Alaska 1993).  In Dayhoff the court provided a four-part test to define whether an employee was an exempt professional.  Under Dayoff, an employee was an exempt professional if:

  1. the employee’s primary duty is to perform work requiring knowledge of advanced type,
  2. the work requires consistent exercise of discretion,
  3. the work [is] predominantly intellectual and varied, and
  4. the work [is] compensated on a fee basis.”

Under this test commercial pilots were exempt employees.  This position was previously affirmed in  Era Aviation, Inc. v. Lindfors,17 P.3d 40 (Alaska 2000). It was also the opinion other states had reached. Paul v. Petroleum Equip. Tools Co., 708 F.2d 168 (5th Cir. 1983); Kitty Hawk Air Cargo, Inc. v. Chao, 304 F. Supp. 2d 897 (N.D. Tex. 2004).  But these cases preceded the amendment to 29 C.F.R. § 541.301 in 2004.

The Alaska legislature amended the Alaska Overtime law (Alaska Wage and Hour Act) in 2005.  The legislature adopt the federal definition of this exemption.  However, the federal code of federal regulation implementing the federal definition was itself amended in 2004.  The new federal regulation restricted the exemption to employees in “professions where specialized academic training is a standard prerequisite.”   29 C.F.R. § 541.301(d) (2014).

Since the 2004 amendment of 29 C.F.R. § 541.301(d), every federal court considering whether pilots fall within the professional exemption has concluded that they do not, because commercial piloting does not require specialized academic training as a standard prerequisite. In Pignataro v. Port Authority, the Third Circuit Court of Appeals upheld a trial court’s determination that helicopter pilots did not qualify for the professional exemption under the Fair Labor Standards Act. The appellate court acknowledged the significant credentials required to become a Port Authority helicopter pilot: 2,000 hours of flying time, a commercial helicopter pilot certificate, a second class medical certificate, knowledge of the FAA’s rules and regulations, and a high school diploma or GED. But critically, none of those credentials involved the attainment of an advanced academic degree — the “pilots’ knowledge and skills were acquired through experience and supervised training as opposed to intellectual, academic instruction.” For this reason, the court concluded that the pilots were “not ‘learned professionals’ and . . . not exempt from the provisions of the [Fair Labor Standards Act].

Alaska Pilots are not exempt employees from the Overtime laws.  Accordingly, they are entitled to time and a half for any hours over 8 in a day or 40 in a week.  How many other professions don’t require specialized academic training as a standard perquisite?

Alaska Pilots Earn Overtime
Jerome Hoffman 2015.

No. 6966 S-14864/14883 Moody v. Royal Wolf Lodge

 

 

 

 

 

 

 

Posted on

Watch the Details When Leasing

When it comes to Landlord Tenant relationships, you need to watch the details.

Representing Landlords or Tenants in Lease Review
Representing Landlords or Tenants in Lease Review

In general, most people want to be liked and don’t want to sow seeds of hate and discontent.  When given the opportunity to agree and be amiable about something, and if there’s no obvious downside, we jump right up on that wagon and go for the ride.  But when it comes to legal relationships, rethink that impulse.

When one moves into a new property there is the inevitable signing of lease agreements, walk-through, and a myriad of other formalities.  Unfortunately, too often these formalities are either overlooked or ignored altogether.

Lease terms:  Know what the lease says.  Unfortunately most renters have little or no say in what the terms are.  Many leases are just basic forms someone swiped off the internet and was never designed for your specific property.  Know who’s responsible for what.  Know what the late fee terms are.  Know how to get a hold of your landlord or management company if there’s a problem.  Many see this as just a routine formality, but if there are later problems it’s the lease terms that tell you what you can and can’t do to fix it.

The walk-through:  this gets a lot of folks in trouble.  We all want to be nice and not complain, to go along to get along.  But your failure to note each item out-of-place is essentially your acceptance.  Who wants to complain to the little ol’ lady showing you the apartment?  You’re all best buds, aren’t you?  They won’t do you wrong.  What’s a little carpet staining, anyway?  Well, two years later that carpet stain belongs to you.  So does the scratched linoleum floor in the kitchen.  And the cracked window.  And the hole in the wall behind the kid’s bedroom door.  And anything else you felt just wasn’t important enough to mention.  Put all of this down on the report.  Your security deposit depends upon it.

When things do go wrong:  Sooner or later something comes up.  The heat goes out, the entry walk lights burn out, the neighbors just bought their teenaged son a new bass guitar, or the local nocturnal recreational pharmaceutical distributor just moved in next door.  Don’t hesitate to contact the landlord.  Better yet, and often required, put such notices in writing.  You don’t want to cause waves, after all, who wants to move out in the middle of winter?  But your ability to properly address the problems can depend on who you notified when, and how.  Landlords must give all notices in writing.  Tenants, too, if they wish to get out of their lease under proper circumstances, usually must also notify the landlord of any problems in writing.  When there’s a later argument about the right to terminate the lease, you will want to make sure you have all the documentation you can get.

Don’t be afraid to speak up and write things down.  When getting into that new apartment, make sure you are not taking the responsibility for old carpets and broken fixtures.  You can be sure that on the move-out report the landlord will list each anomaly they see.  If it you didn’t note it at the beginning then they will probably blame you.   Legal relationships require you to think about the details in the beginning or suffer consequences later.

These are just a few of the things to be thinking about in leases.

 

Posted on

Transaction Questions

Please consider and answer the following questions to help us efficiently evaluate and structure your transaction, and help you address issues prospectively.

General information about the proposed transaction:

1. Is there a confidentiality agreement in place?

2. Is the transaction an asset purchase or a purchase of the ownership interest of an entity?

a. Will the transaction cause a termination of the entity?

b. Would you like the purchase of the ownership interest of the entity to be treated as an asset purchase?

3. What is the purchase price?

a. Are there any adjustments to the purchase price (e.g. floors/ceilings/allowances)?

b. Will the purchase price be paid in installments?

c. Is there a reason to hold back any part of the purchase price?

4. How is the purchase price allocated?

5. Is the transaction seller-financed?

a. What are the terms of the promissory note?

Posted on

Unsuccessful Public Contract Bid Process

Unsuccessful Public Contract Bid Process

The Alaska Supreme Court issued an opinion addressing a litigants complaints about an unsuccessful public contract bid process.  The full opinion can be found here.  There are a number of interesting issues addressed in the matter that have application outside the construction field. However, some factual background always makes the matter more memorable.

Factual Background

Back in 2002, Bachner Company, Inc. and  Bowers Investment  Company bid for the Alaska Department of Transportation office Building in Fairbanks.  They were not awarded the project.  So, Bachner filed bid protests alleging bid scoring irregularities in the scoring process.  Bachner lost the appeal, found here. Undeterred, Bachner mounted an attack on four of the committee members that voted in awarding the contract to a competitor.   Bachner’s claims were dismissed in part based on absolute immunity.  Bachner appealed that decision. The supreme court remanded the matter back to the state court, holding that the committee members were only entitled to qualified immunity and Bachner’s allegations of bad faith, if proven, would fall outside of qualified immunity. Decision found here.

Board Member Qualified Immunity

“Under a rule of qualified immunity, a public official is shielded from liability . . . when discretionary acts within the scope of the official’s authority are done in good faith and are not malicious or corrupt.”  Thus, “ ‘malice, bad faith or corrupt motive transforms an otherwise immune act into one from which liability may ensue.’ ” Qualified immunity “ ‘protect[s] the honest officer who tries to do his duty,’ ” but it does not protect “malicious, corrupt, and otherwise outrageous conduct.”  When committee members raise qualified immunity as a defense and testify that they acted in good faith, the committee members are entitled to judgment as a matter of law unless the plaintiffs can present some admissible evidence that creates an issue of fact as to whether the committee members acted in bad faith or with an evil motive.  The supreme court then analyzed Bachner’s evidence offered to support the claims and found that even in the light most favorable to Bachner that it did not have a case.

Public Service Litigant Attorney Fee Shield Denied

Having concluded that Bachner did not present a genuine issue for trial and that the statutory exclusive remedy rule barred the claim, the court awarded defendants their attorney fees.   defendants, who had been defended by the State attorneys didn’t actually incur any fees but was awarded $93,871.85.    In Alaska attorney fee awards are within the very broad discretion of the trial court.  They are seen as a powerful tool to discourage litigants from filing frivolous suits against the state and its employees.  An exception to the attorney fee award is available for public servant litigants.  The court denied Bachner public service litigant status “due to its significant financial interest in this case.”

Posted on

Alaska’s New Security Interest Law

Security interest law concerns security interests in personal property rather than real property.  The law is generally known as UCC 9, or the Uniform Commercial Code section 9.  We find the statute at Alaska Statute 45.29.101-709.    Alaska recently adopted the 2010 changes to the security interest law.  The law is effective for security interests after July 1, 2013.

The law instituted significant changes between the old recording rules and the new rules.  The impact of not recording your security interests may mean that you can’t collect your debt if the debtor becomes bankrupt.

 

What you need to record a lien.

You must give value to a debtor.  The debtor must have rights in the collateral.  The Debtor must give an acknowledged security agreement to you.

Properly Recording Perfects the Lien.

Properly recording the security interest provides notice to the world of your rights and perfects your interest.  The new rule changes substantially change the recording rules.

Account Debtors Must Comply With Notice of Debt Assignment

The statute includes new provisions that need debtors to pay the assignee of a debt rather than the original creditor.  A debtor’s failure to pay the assignee after notice of an assignment leaves the debtor liable to pay twice.

Filing Financing Statements

You will still use form UCC-1 to file the financing statement.  In most circumstances you will only need to file a single document and not multiple documents in several jurisdictions.  You don’t need to get the debtor’s signature on the financing statement to file the document.  You also don’t need to have the organization’s ID or the form of their entity.  If the proper filing place is in Alaska you can file online here.

Foreclosure After Default

You can still engage in self-help repossession of property as long as you can go ahead without breaching the peace.  You can also start a judicial foreclosure.  There are also still the rights of proceeding with a strict foreclosure.

Substance over Form

The statute will apply to transactions, even if you word your agreement in a way to try and escape the statute.  The bankruptcy court is likely to consider whether there is an obligation and whether it is secured by collateral. For example, the sale of Accounts can still be considered simply a UCC 9 security agreement transaction.  The risks of not recording the financing statement are that someone else may claim priority over you or a bankruptcy judge could rule that you are not perfected and therefore not collateralized.  Similarly transactions where you keep title may be treated as a security interest, requiring perfection.  It also applies to consignments, sales of intangibles, sales of promissory notes and accounts.

The New Location Rules

Where you record the financing statement depends on the debtor.  The debtors place determines the choice of law and the place of filing.  Registered organizations must be recorded at the place where they are organized.  Alaska companies in Alaska.  Delaware companies in Delaware.  Individual debtors in the state of their residence.  Other entities at the chief executive office.

Foreign Debtors are recorded in their own country, if their laws are like our UCC9; otherwise, you will need to record in Washington DC.  For all Canadian provinces, except Quebec you would file in Canada.  For other countries you can take a look at Prof. Arnold S. Rosenberg’s work at Thomas Jefferson School of Law here.

Other Means of Perfection

There are other means of perfection such as control or automatic perfection.  The control generally concern accounts, such as deposits, investments, electronic chattel paper and letters of credit.

Recording your Financing Statements

The financing statement lasts for six years without a continuation.  When you search the state records you do not know whether the recorded documents were actually authorized.  They are based solely on the name of the debtor as typed by the submitting party.  All financing statement once recorded stay in the system, even if they have been terminated. If the financing statement has been wrongfully terminated your interest may be subject to the existing claims.  Accordingly, reviewing the state documents is merely the start of your due diligence.

Debtor Name Trap

Many people working for companies don’t actually know what the official name for their business is as recorded in the State’s records.  If you simply take your debtor’s word for the name of the enterprise, it is likely the name will be incorrect and that could leave you unsecured.  It is a best practice to get a copy of the record recorded with the state.  You want the name from the articles of incorporation.  When the debtor is an individual you want to use their name as typed on their current drivers license issued by the State of Alaska.

 

For more information on the changes to Alaska UCC 9 give us a call.

[contact-form to=’[email protected]’ subject=’ALOINC UCC 9 ‘][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Website’ type=’url’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form]

Posted on

Alaska LLC Operating Agreements

Alaska LLC Operating Agreements

Partnerships have been around forever.  Corporations have been with us for 400 years. The American LLC was invented in Wyoming in 1977.  Alaska joined the fray more recently; however, they seem to have selected this entity as their entity of choice because the state makes it available for self filing online.  An Anchorage LLC lawyer helps point out some of the issues the State leaves out on their web site and why a visit with a lawyer can pay dividends later. Continue reading “Alaska LLC Operating Agreements”

Posted on

Alaska Contractor’s Outlook with Government Shut Down

Government Shut Down Affects Contractors
http://flickr.com/photos/[email protected]/10111702255

How will the government shut down affect Alaska contractors?

Considering all the moving parts and implications of the government shutdown what should Alaska contractors focus on now.  In short, brace yourself, what is happening now is not a one-off situation; this is  ground-zero for the foreseeable future.

Sequestration happened in March.  During that time federal job losses averaged 9,000 per month, or 72,000 jobs lost. We anticipate that federal payroll decline will escalate.

We expect continued:

1. Reduction in new contracts;
2. Changes in administration contract administration on existing contracts;
3. Changes in procurement type;
4. Increase in Bid Protest activity; and
5. Increase in CDA Claims activity

Cost and need will drive new contracts. The government will likely focus on existing programs over long-term projects. On vehicle usage, conservatism should be anticipated as the rule; the Fed has lots of flexibility for greater restrictions – so dot the I’s and cross the T’s.  You can expect a frequent use legacy indefinite in quantity contracts  (IDIQ) and a desire to lock contractors in to  Firm Fixed Price contracts.

Alaska Contractors can expect the government to offload risk to the contractor community.  Alaska Contractors will need to  manage this increased risk.  Alaska Contractors should approach opportunities with a focus on discipline and rigorous risk evaluation. Fully-funded contracts and phases should be safe; forward phases and contract options are  at risk and should be re-negotiated as soon as possible.

The same applies to your IDIQ task-orders.  The funded task or delivery orders should be safe.   Those that are not are at risk. You should determine 1) whether your contract relates to a sequestration exempt program; 2) whether it is impacted by any new congressional budget, 3) whether it is fully or incrementally funded, 4) when the agency anticipates exercise of options or issuance of task orders, and 5) what changes are planned.

With scarce contract opportunities; we expect an impact on Bid Protests and CDA Claims. The GAO shutdown creates doubt that protests will trigger an automatic stay.   If the GAO protests fails to stop disputed contracts, you may reconsider rolling the dice in more expensive litigation at the U.S. Court of Federal Claims. However, if you decide to engage the GAO; the Agency has issued guidance to federal contractors about how bid protests and related filings will be handled during this period.

[contact-form to=’[email protected]’ subject=’ALOINC Web Prospect’][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Website’ type=’url’/][contact-field label=’Comment’ type=’textarea’ required=’1’/][/contact-form]

Posted on

Alaska Online Workman Compensation Coverage Checker

Workers’ Compensation Requirements for Employer
Requirements for Employers

The Alaska Workers’ Compensation Act requires each employer having one or more employees in Alaska to get workers’ compensation insurance, unless the employer has been approved as a self insurer. Determining employee status is accomplished utilizing the relative-nature-of-the-work-test as set out in Alaska Regulation 8 AAC 45.890.

There are few exceptions to those who must be covered under a workers’ compensation policy. Generally speaking, those include: sole proprietors in a sole proprietorship; general partners in a partnership; executive officers in a nonprofit corporation, members in a member managed limited liability company, part-time baby-sitters, cleaning persons (non-commercial), harvest help and similar part-time/transient help, sports officials for amateur events, contract entertainers, commercial fishers, taxicab drivers whose compensation is by contractual arrangement, a participant in the Alaska temporary assistance program, and professional hockey team players and coaches if those persons are covered under a health care insurance plan. In addition, executive officers in a for-profit corporation may exempt themselves by filing an Executive Officer Waiver with the department.

Businesses get Insurance coverage from commercial insurance carriers. Employers should contact their insurance agent or broker to buy a workers’ compensation policy. Businesses unable to get coverage from an insurance company, may buy insurance through Alaska’s Assigned Risk Pool.  The National Council on Compensation Insurance (NCCI) administers Alaska Pools. Alaska does not have workers’ compensation group pools. Once an employer has coverage, they must give proof of workers’ comp insurance to the Division of Workers’ Compensation on form 07-6119 (usually submitted by the insurance company). There are huge civil and criminal penalties that apply to an employer who fails to keep up coverage and/or fail to pay compensation.

The the employer’s payroll, type of business risk (classification assignment), and the employer’s loss history determine the cost for coverage. If an employer believes that their premium is too high, or that their business is improperly classified, they can request arbitration from the NCCI, and the Alaska Review and Advisory Committee.

Alaska Online Workman Compensation Coverage Checker

So, who wants to know if a given employer has worker’s compensation coverage.  Employees want to know, because if they are hurt they would like insurance to pay for the hospital bills.  Property owners hiring contractors want to know because they are liable for injured workers if the contractor fails to insure his workers.  General contractors want to know because they hire subcontractors and need to know they are hiring insured workers.  Business owners want to know if their leased employees are actually covered by the employee leasing company.  Business owners also want to know that their competitors carry insurance — because they want to make sure the competition is paying their fair share of injured worker claims.  Alaska provides the following checker here:

Alaska Employer Workman Compensation Coverage Verification

This link takes you off site.  When clicking on the coverage verification link above, you will be leaving our site and going to an external web site not maintained by us or the Alaska Department of Labor.  This is the same site the Alaska Department of Labor would presently uses for verification.  The list does not include self insured businesses nor those employers for which coverage is provided on a statutory basis.  The site requires cookies and javascript to be enabled in order for it to function correctly.

If you are an employer and have been served with a Failure to Insure for Workers’ Compenstion Liablity, a discovery demand and give us a call at 907-375-9226.

 

 

 

 

Posted on

Property Damage Lawyers Defeats Insurance Company Exclusion Claim

The Knowles owned rental property. Fidelity Co-operative Bank (Fidelity) owned the mortgage on the property.   Nova Casualty Company (Nova) insured the property. A 2008 tropical storm caused substantial damage to the building interior.   The Town  closed the building. The Knowles submitted a claim for reimbursement for the water damage with Nova, which denied the claim. Due to Nova’s denial of coverage the Knowles could not afford to repairs the building.  The building remained vacant and was vandalized. Nova also refused to cover the vandalism claim. The Knowles defaulted on their mortgage due to the lack of rent.  Rather than foreclosing In 2010, Fidelity, individually and as assignee of the Knowles, pursued the insurance claim against Nova for the property losses and the lost business income under the all-risk insurance policy. The trial court granted summary judgment for the insurer. The  Appeals Court reversed and ordered the parties to trial on the damage claims.

The full decision is  here.

If you are a lender, property owner, property manager or real estate agent with a client that has incurred property damage that you think an insurance policy should cover, give us a call at 907-375-9226 for an appointment to review the matter.

Clayton Walker, JD

Anchorage Business Attorney

Alaska Law Offices, Inc.

 

Posted on

Real Property Lawyer Wins Client a Right to Trial on HAMP Violation Claim

A real property lawyer filed a case to protect his client against a bank foreclosure action.  The homeowner lost the right to a trial on motion in the trial court.  The Real property lawyer appealed the case for the homeowner.

On August 8th, 2013, the 9th Circuit overturned the dismissal of a HAMP violation claim.  The court held that under the Home Affordable Modification Program (HAMP) the bank was contractually required to offer the homeowner a permanent mortgage modification after the homeowner complied with the banks Trial Period Plan (TPP).  The court held the homeowners complaint sufficient because they showed that the bank accepted and retained the payments demanded under the TPP, event though the bank failed to offer or notify the homeowner they were entitled to the modification as required by the TPP.

Corvello v. Wells Fargo Bank, NA doing business as America’s Servicing Company, Doing business as Wells Fargo Home Mortgage can be found here.

 

If you are an Alaskan homeowner, or a realtor with a homeowner listing, in default on a home mortgage or have recently received a notice of foreclosure and would like a Real Property Lawyer to help you consider your options give us a call at 907-375-9226 for an appointment.

Clayton Walker, JD