Alaska Applies Single Occurrence Clause

Friday, August !7, 2013

USAA v. Neary, 

Supreme Court Nos. S-14580/14600

The Backdrop

In a single occurrence, a child fired a single shot from a revolver belonging to his parents, killing a friend and seriously wounding another. The victims parents sued the child, his parents, and their insurance company.

The insurance policy provided a $300,000 limit for “Each Occurrence” of “Personal Liability.” The trial court multiplied the limits by the number of insured and ruled that the policy afforded $900,000 of coverage.   The trial court explained that the child and his parents were each entitled to a separate per-occurrence policy limit.

Continue reading “Alaska Applies Single Occurrence Clause”

Alaska Paves Way for More Employment Discrimination Claims

Yesterday the Alaska Supreme Court issued opinion

Employment Discrimination Claims
Hall Sign

No. 6809 S-14762 Kennedy v. Municipality of Anchorage.  The case concerned employment discrimination claims.  The opinion’s focus was discovery issues, jury instructions, evidence and argument on Mental Anguish Damages.  Employment discrimination victims are entitled to compensation for mental anguish, among other things.

Employment Discrimination Claims — Recovering Mental Anguish Damages

Mental anguish on the other hand is fairly ephemeral.  Just how much is a bad day worth? How do you quantify embarrassment?  What evidence may an employer force the employee to give them to test whether the employee: is faking a bad day; having a bad day from some other reason; or, has a preexisting bad day condition.

Employment Discrimination Claims — Discovery Scope

The general rule on discovery is:  you get to seek not just admissible evidence; but, also those things that will lead to admissible evidence.  Many states simply adopted the rule that when a person makes a mental anguish claim, the defendant gets to look at their mental health medical records.  Many of the decisions underlying the original rule arise from tort claims and not employment.  The torts of intentional or negligent infliction of emotional distress also provide for compensation.  For the claimant to recover the claimant must suffer severe emotional distress.  As a bright line rule courts adopted severe distress required medical treatment.  Statutory discrimination claims were created in part to lower the evidentiary standard for damage recovery.

Alaska Rejects Automatic Disclosure in Employment Discrimination Claims

Alaska rejected the automatic disclosure rule and paved the way for “garden variety” emotional distress claims in employment discrimination claims.  In Alaska, Employees can now assert embarrassment and bad day claims without automatically exposing their mental health medical records to their employer, juries and the public.  The employee can choose to limit exposing their medical records by carefully limiting their claim and the testimony that they give.  These non severe “garden variety” claims will be compensated in Alaska employment discrimination claims.  Alternatively, the employee can claim severe mental damages and waive your privilege to keep your medical records confidential.

To discuss which may be a better choice for you give us a call at 907-375-9277.


Clayton Walker, JD

Alaska Law Offices, Inc.







Alaska Contractor Lien — Getting Paid for Your Work

You don’t need a mechanics lien if you’re just making cardboard forts.

Mechanic’s and Materialmen Liens: Getting Paid. 

This outline is very brief and does not include provisions concerning public works contracts under the US Miller Act or the Alaska statutes.  It also does not address any statutory changes subsequent to the author date.  It also does not address any issues with respect to court interpretation.  This information is provided for general information purposes so that you can learn about the general information to protect your business and know the importance of seeking counsel within thirty days of job completion when you have not been paid.  Most important take away is time.  You only have 120 days from last working on the property to assert your lien.  You only have six months to sue on the lien claim unless you extend it.  The time period used to be 90 days but was extended by statute effective September 7, 2010.  These rights are among the post powerful collection tools at a contractor’s disposal.  The following pages address twelve significant aspects of construction lien enforcement.


Who can claim a Contractor Lien?  (Alaska Stat. 34.35.050)

Those performing labor on real property at the request of the owner or the agent of the owner for the construction, alteration or repair of a building or improvement.

  1. The trustee of an employee benefit trust for the benefit of the individuals performing in section a.
  2. Those furnishing materials that are delivered to and used upon the real property under a contract with the owner or the agent of the owner for the construction, alteration or repair of a building or improvement.
  3. Those furnishing equipment that is delivered to and used upon real property under a contract with the owner or the agent of the owner for the construction, alteration or repair of a building or improvement.
  4. Those performing services under a contract with the owner or the agent of the owner in connection with the preparation of plans, surveys, or architectural or engineering plans or drawings for the construction, alteration, or repair of a building or improvement, whether or not actually implemented on that property.
  5. A general contractor.

What land is subject to the Contractor Lien?  (Alaska Stat. 34.35.055)

  1. The land upon which a building or other improvement described above, together with a convenient space about the building or improvement as is required for the convenient use of the property.
  2. If the person owns less than a fee simple interest, only that person’s interest is liened.
  3. If the owner was only a tenant and they forfeit possession, the leinor can protect their interest by paying all arrears of rent and money required under the lease.
  4. If the landlord regains possession before commencement of the construction, alteration or repair the lien is only protected by the right to remove the improvement within 30 days after the purchase and the landlord gets first recovery of the sale of removed goods to satisfy unpaid rent until the date of removal.

Which Contractor Lien gets paid first: Priorities?  (Alaska Stat. 34.35.060)

  1. Generally, liens recorded first get paid first.
  2. A recorded notice of right to claim a lien takes priority over subsequently recorded liens.
  3. Liens in favor of individual workers performing labor or a trustee of an employee benefit trust take first priority position, even over prior recorded liens; but, only for “original construction.”

The Stop-Lending Notice.  (Alaska Stat. 34.35.062)

a.         If you are entitled to a lien and your bill is past due, you may issue the lender a Stop-Lending notice.  The notice must concurrently be given to the owner and each prime contractor with whom or through whom you have contracted.

b.         The Stop-Lending notice must state:

(1)        to instruct the lender to stop disbursing, advancing, or otherwise providing construction financing for the project;

(2)        it must be verified by the claimant;

(3)        the claimant’s name, address and telephone number;

(4)        the description of the labor, material, service, or equipment furnished by the claimant and state the name of the person to whom furnished;

(5)        the description of the real property improved by the labor, material, service, or equipment and state the name of the person the claimant believes to be the owner of the real property; and

(6)        the amount due and unpaid to the claimant for the labor, material, service or equipment.

c.         The Stop-Lending notice lasts only 91 days from the date the lender receives the notice unless you file a suit on the claim.  You may revoke the Stop-Lending Notice.  Failure to file suit timely or revocation of the Stop-Lending notice terminates the lender’s liability.

d.         Lenders that disburse, advance or otherwise provide financing for the project after receiving the stop-notice is liable to the lienor for the lesser of:

(1)        The amount of money subsequently disbursed.  If there are multiple stop notices outstanding when funds are disbursed the proceeds are applied in order of the priority rules.

(2)        The amount owed to the lienor including interest, costs, and attorneys fees for labor, material, service or equipment furnished for the project by the claimant as established by a written agreement signed on or after the date of the stop-lending notice, by the claimant, owner and prime contracted; or by a court judgment in a suit by the lienor against the owner, the claimant and the claimants debtors were named and served.

(3)        150% of the amount in the stop lending notice.

What is the Contractor Notice of Right to Lien.  (Alaska Stat. 34.35.064).

a.         The notice of right to lien must be given in writing to the owner before commencing work under the contract.  If you give this notice then the owner bears the burden of proving that they did not know of or consent to your contract. Without this notice you bear the burden of proving the owner knew and consented to the contract.

b.         The notice must provide all of the following information:

(1)        a legal description of the real property;

(2)        the name of the owner;

(3)        the name and address of the potential leinor;

(4)        the name and address of the party with whom the potential leinor contracted;

(5)        a general description of the labor, materials, services, or equipment to be provided;

(6)        a statement that you may be entitled to record a claim of lien; and


(7)        “WARNING: Unless provision is made for payment of sums that may be due to the undersigned, your above property may be subject to foreclosure to satisfy those sums even though you may pay a prime contractor or other person for the labor, material, service or equipment furnished by the undersigned.”

c.         The owner, lender or prime contractor that receives the notice of right to claim a lien may request disclosure of the amounts owed and anticipated to be owed under the contract along with a description of the services and materials provided under the contract.  This request must be responded to within five days.

d.         If you record your notice of right to claim a lien, the recording date will become the date for your lien claim priority if one arises subsequently.  Alaska Stat. 34.35.067 and 34.35.060.

Contractor Liens are Powerful:  What about Protecting innocent owners of land.  Alaska Stat. 34.35.065.

a.         The owner must have knowledge of the construction for the lien to attach.

b.         An owner with knowledge of the construction has three days from learning of the construction to issue a Notice of Nonresponsibility.

c.         The Notice of Nonresponsibility must be posted on the property in a conspicuous place and recorded in the deed records.  The notice must be signed by the owner and two witnesses or the owner before a notary.  The posting of the property must be attested to by a witness.

How soon must the Contractor claim their lien?  (Alaska Stat. 34.35.068).

a.         If the owner does not record a notice of completion, the lien claim must be recorded not later than 120 days after the claimant completes:

(1)        the contract; or

(2)        ceases to furnish labor, material, services or equipment for the construction, alteration, or repair of the owners property.

b.         If the owner does record a notice of completion, the lien claim must be recorded,        The following must record within not later than 15 days after the notice of completion was recorded:

A.        if you received advance notice of the date the notice of completion would be recorded; or

B.         you failed to provide notice of right to claim a lien under Alaska Stat. 34.35.064.


(2)        The following must record within the time under the rules of part a:


A.        claimants that record their notice of right to lien before or within the period; or

B.         claimants that record a notice of right to lien but did not receive advance notice that completion was to be recorded.


What has to be in the Contractor Lien Claim.  (Alaska Stat. 34.35.070).

a.         The lien must be verified by oath of the claimant or person having knowledge of the facts and state:

(1).       the legal description of the real property subject to the lien;

(2)        the name of the owner;

(3)        the name and address of the claimant;

(4)        the name and address of the person with whom you contracted;

(5)        a general description of the labor, materials, services or equipment furnished for the construction, alteration, or repair and the contract price of the labor materials, services and equipment;

(6)        the amount due for each category in (5); and

(7)        the date of last services rendered.


b.         Risks for improper notices:

(1)        Verification of the facts is necessary and mere authentication is insufficient.

(2)        You must give due credit for all just credits and offsets or you will lose the lien claim on the remaining balance.

(3)        Inclusion of improper items voids the lien.  For example there is no right to claim a lien for transportation costs.

(4)        Failure to name all owners exempts the unnamed owners interest from the lien.

(5)        A violation of the claim of lien section makes the violator a guarantor regarding any damages another person suffers that are caused by the violation.

(6)        If you are not successful on all counts of your lien suit, you may not be entitled to costs or attorneys fees and the successful defenders may offset their costs and attorneys fees against your claim.  See, e.g., Brand v. First Fed. Sav. & Loan Ass’n, 478 P.2d 829 (Alaska 1970).


Contractors need to Watch Our for: The Notice of Completion.  (Alaska Stat. 34.35.071)


a.         The owner should give at least five days notice to claimants that have given a notice of right to lien or stop-lending notice to the owner and at least ten days notice to the lender.

b.         The notice must be signed and verified by the owner and state:

(1)        the date of completion;

(2)        the name and address of the owner;

(3)        the nature of the interest or estate of the owner;

(4)        the legal description of the property sufficient for identification; and

(5)        the name of the general contractor.

c.                     Notices of completion before actual completion have no effect.

d.         Services provided after the notice of completion is recorded, if for warranty obligations, remedy of defective or unsatisfactory construction, alteration or repairs for which no additional consideration is owed, do not give rise to lien rights.


Contractor Lien:  How Long Does the Lien Provide Protection?  (Alaska Stat. 34.35.080)

a.         The lien only lasts 6 months from the date of recording unless you file a suit or file an extension within the original 6 months that refers to the prior recorded lien notice by date, book, page or instrument on the original lien and the balance owing.

b.         Buyers for value without notice of your lien suit take free of your lien.  To protect your claim you must file a lis pendens that conforms with the requirements of Alaska Stat. 09.45.940.


The Contractor Action to Enforce the Lien – Foreclosure.  (Alaska Stat. 34.35.110)

a.         The action must be brought in superior court.

b.         The lienor is entitled to the claim, costs of recording, filing and reasonable attorneys fees.

c.         All persons personally liable and all lienholders whose claims have been filed for record under A.S. 34.35.070 shall be made parties.

d.         The priority of claims from the proceeds of a foreclosure sale are:

(1)        persons other than prime contractors that provide labor under Alaska Stat. 34.35.050(1);

(2)        trustees of employment benefit trusts for persons described in (1);

(3)        all other material men and subcontractors;

(4)        claims under Alaska Stat. 34.35.050(5) and prime contractors other than the general contractor; and

(5)        the general contractor.

e.         All claims of a given class shall be paid before claims of a lesser class.  Claims of a class shall either be paid in full or pro rata if insufficient funds are available.


Contractor Waiver of Lien rights.  (Alaska Stat. 34.35.117)

a.         An individual may not waive their lien rights before performing the work and the attempt to do so is void.

b. A written waiver by all other claimants is valid and binding, even without consideration.  But, the waiver cannot relate to any events subsequent to the date of the waiver.

Conclusion:  Contractor Liens

Contractor’s and supplier’s liens are powerful tools to collect money that is due to your firm.  One of the most important keys to enforcement is time.  You have to act fast to enforce these rights.  You should seek counsel to assist you in the preparation and assertion of these rights.

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 lenderproperty 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.


Real Property Lawyers win New Trial in Landlord “Bachelor Pad Ad” Case

Real Property Lawyers applied the Fair Housing Act’s section 3604(c)  to a Craigslist advertisement for a one-bedroom apartment. The Connor Group placed an ad on Craigslist for an apartment in Dayton, Ohio, advertising a “great bachelor pad for any single man looking to hook up.” The Miami Valley Fair Housing Center brought suit against the Connor Group for violating the Fair Housing Act. The case went to trial.  The jury found that the ad did not violate the act. Miami Valley appealed the district court’s denial of their  Rule 59 motion for a new trial. The Connor Group cross-appealed because after winning the trial they were denied a recovery of their attorney fees.   On appeal the court sent the parties back for a new trial.  The court ruled that the jury instructions improperly stated the law.  The full case can be found here.

If you are an Alaskan landlord, Alaskan property manager or Alaskan real estate agent and want to avoid Fair Housing Act violations call us at 907-375-9226 to review your advertisement policy.

Clayton Walker, JD

Anchorage Real Property Lawyer



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


Arbitration — Be Careful What You Wish For

After undergoing major heart surgery in 2001, Dr. Zev Lagstein, a nuclear cardiologist, made a claim on a disability insurance policy he had purchased from Certain Underwriters at Lloyd’s of London. Lloyd’s pussyfooted for years only to eventually deny the claim, so Dr. Lagstein sued in the United States District Court for the District of Nevada. Lloyd’s moved to arbitrate pursuant to the policy, and the District Court granted the motion.

Illustrating the maxim “be careful what you wish for,” the arbitration was wildly successful for Dr. Lagstein, resulting in a total damages award of over $6 million against Lloyd’s, including $4 million in punitive damages. Lloyd’s, unhappy with the result of the arbitration it had demanded, successfully moved in the District Court to vacate the award.4 LAGSTEIN V. CERTAIN UNDERWRITERS

Dr. Lagstein appealed, and this court reversed and remanded with instructions to confirm the award. The District Court then confirmed the award but denied Dr. Lagstein’s request for interest and attorneys’ fees. Dr. Lagstein now appeals the District Court’s ruling on interest and attorneys’ fees, and Lloyd’s cross-appeals requesting return of an alleged overpayment to Dr. Lagstein from a fund which held the award in escrow pending the outcome of litigation. As discussed below, we REVERSE and REMAND on the issues of interest and attorney’s fees, and AFFIRM on the issue of overpayment.

Lagstein, M.D v. Certain Underwriters at Lloyd’s of London

Filed August 5, 2013

To discuss this or other litigation matters call for an appointment at 907-375-9226


Chilkoot Charlies Headed to Trial on Alcohol Server Case

Today the Alaska Supreme Court in a three to two decision, sent Chilkoot Charlies to trial on an Alcohol Server wrongful death claim.  The Alaska statute only imposes liability on bars and servers of alcohol if they serve alcohol to someone who is visibly drunk.  The plaintiff did not offer testimony that the person was intoxicated when they Chilkoot Charlies served the alcohol. Instead, the plaintiff offered circumstantial evidence about the drinkers condition before and after leaving Chilkoot Charlies, and how much they had drunk at Chilkoot Charlies.  The Alaska Supreme Court stated circumstantial evidence was sufficient to allow the Plaintiff’s to present their case to a jury.

No. 6805 S-13899 Kalenka v. Jadon [other civil]

Clayton Walker, JD