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.”

A Negligence Primer — Good Samaritan Defense

This was originally written for my EMS friends, but the basic concepts still apply:  duty, breech, causation, and damages.

Setting the stage:  It’s 3am (of course), and you just laid down after watching a Star Trek – The Next Generation marathon when the tones go off, and the dispatcher announces another of a long line of winter vehicle rollovers.  Blah, blah, blah, icy roads and drunk drivers.  Wind and snow, minor extrication, neck pain and minor bleeding from the head, the patient intoxicated but friendly.  C-collar, the requisite uncomfortable backboard, and couple of big IVs just because, and a quick drop off at the local ER.  The next afternoon you hear the patient began seizing shortly after you left the ER, and died a short time later from a massive subdural.  Three years later you get the summons and complaint, naming you, your partner, your duty supervisor, your service, the hospital, the ER Doc, the radiologist, and the high school janitor as defendants in a lawsuit claiming negligence.

First, let’s dispense with the Good Samaritan defense.  You were on duty and paid a decent hourly wage.  Therefore, you’re not covered under the statute.

Negligence in the common parlance simply means you screwed up and you should have known better.  However, in legal terms, “negligence” has a very specific meaning, and very specific elements that require evidence to reach the conclusion that someone is “legally” negligent.  If the plaintiff is unable to prove each element of negligence, then the defendant cannot be found liable.

In order to be legally negligent, the plaintiff must show that the defendant had a duty to act (duty), that the defendant failed to follow the standard of required conduct (breach), that the failure was the cause of harm to the victim (causation), and that actual harm resulted (damages.)  These four elements: duty, breach, causation, and damages, must all be proven in order to prevail.  The Good Samaritan statute, which all EMTs seem to consider when thinking of negligence, speaks to two levels of negligence – simple negligence and gross negligence.  Outside of this narrow statute, however, the level of egregiousness is relevant only in the amount of punishment given.

Let’s flesh out this discussion a bit.  “Duty” is the easy one – did you have a duty to provide care to the patient.  Yes or no.  In the above case, for example, you were on duty and being paid to respond.  Therefore, yes, you had a duty.  This is the easiest of the four elements to prove, or to defend.  You’re off duty and drive past an accident scene which already has numerous responders present.  No duty, no negligence claim.  Volunteers can sometime have a bit more difficult time, but the standard becomes whether you in any way held yourself out at the time of the event to be available to respond.  If you were “on call,” duty attaches, if not, duty likely does not attach.

“Breach” is slightly more difficult to prove, but still often relatively easy.  Did you do (or not do) something beyond or outside the industry standard?  In other words, did you breach your duty to treat a particular illness or injury in an appropriate manner?  This is gross simplification, of course, because evidence would be required at trial about what, exactly, was the “standard of care” required in the given circumstance.  This makes this particular element the most wishy-washy, as dueling experts vie for the attention of the judge or jury.

“Causation” is the often missed elements by the lay public.  This means that your actions, or inactions, actually caused the harm being alleged.  If your patient was hit in the head by a pipe wrench, and you later drop him injuring his knee, you’re only responsible for the knee injury, not the whole shebang.  This can often be difficult to determine.  For example, a COPD patient presents with severe respiratory distress.  You provide high flow oxygen, but not CPAP; when the patient continues to deteriorate you elect to sedate and intubate, causing dental trauma, increased swelling to the throat and worsening of the distress.  The patient eventually arrests due to extreme hypoxemia.  How much was your fault, if any?  Would she have continued to deteriorate regardless of your actions?

“Damages” is reasonably straight forward, if the above elements have been met and determined.  First, were there actual injuries that caused harm to the patient?  It’s the “no harm, no foul” rule of negligence.  You should have given Amiodarone, not lidocaine, for an SVT according to your medical standing orders.  But the patient persevered and lived despite your best efforts.  You had a duty to act, you breached that duty, but you did not cause compensable harm.  While you may be on the soup line because you dangerously violated your standing orders, at least you won’t end up in court.   However, if actual harm was caused by you, then you are responsible for those damages.

One can be negligent in the common sense but not be legally negligent.  While this may be of little real comfort, EMTs should have a basic understanding of the general concepts of legal negligence.  As for the scenario mentioned above?  A good attorney will bring in a lot of questions.  Was the alcohol masking signs and symptoms of head trauma the EMTs and hospital should have recognized earlier?  Should the patient have been taken to a trauma center rather than just the local ER?  Did the EMTs adequately describe for the ER staff the circumstances surrounding the crash such that the physician and staff could better assess the totality of the patient’s potential injuries?  Obviously there aren’t enough details to make any reasoned response, and in the end it may take a judge or jury to flesh out all the answers.  Such is the nature of the legal world.

Are You An Employer? Workers Compensation Required?

Do you laugh at the home and garden shows on cable TV?  Do you snort in derision watching those folks spend tens of thousands of dollars on contractors?  Do you smirk to yourself because you know you can do the same thing better, faster, and cheaper?  Well of course you do, you’re an Alaskan.  Even before Home Depot and Lowes came to town we had Spenard Builder’s Supply, Eagle Hardware, and you could quote the price of a spanner wrench at your local ACE store.  When it comes to adding on or building from scratch, no one beats an Alaskan at getting things done.  And not just with Visqueen, blue tarps, and duct tape, either.

On a normal day you could sheetrock a hanger holding Alaska Airlines’ latest 737-stretch in an easy day’s work.  But what happens when you only have a morning?  Perhaps your spouse has lined you up for a snowshoe softball game this evening, or some fish is running in some creek somewhere.  Unfortunately your best bud is rough-necking on the Slope this week, and your brother is sleeping off a 4-pack of wine coolers on a beach in Hawaii.  What now?

Well, normally if you needed a little extra help you’d head on down to Beans Café where there are plenty of folks looking for honest work.  The modern version is to check on Craig’s List from your smartphone while driving to the local man store.  Either way you’ll find some chap willing to hammer, screw, lay tile, hang ‘rock, or just generally clean up your mess when you’re done.  For a hundred bucks or a promise of fresh salmon, Alaskan men will do most anything.

Unfortunately, you have now begun to tread upon the realm of The Man.  The Government.  The State.  The usurious villainy of a democratic republic.  A homeowner, or anyone else for that matter, who chooses to hire someone to do something, must comply with all the rules and regulations just like those fancy contractors who have websites and their names on their pickups.  This can be a rude awakening for many.  You just needed someone to haul Trex around the house while you’re putting on the hot tub deck, or perhaps someone to mix and pour concrete on the motorhome pad next to the garage.  But if you’re paying them, you’re an employer in the eyes of the state.

Fortunately this probably doesn’t mean you’ll have to read up on Obamacare.  But you do have certain responsibilities.  Perhaps the foremost of real concern is workman’s compensation.  Didn’t come to mind?  Paying insurance for just hiring some dude off the internet now and again?  Actually, yes, you are responsible.  If that poor fella trips over the water hose, bangs his thumb with a hammer, or slips and cracks his head while shoveling your driveway, he is a worker by Alaska standards and you are his employer.  It is necessary to report to the state that you have worker’s compensation insurance, and of course pay necessary premiums.

There are other requirements, too, such as keeping records of your employees, tax records, immigration forms, minimum wage laws, etc. etc. etc.  If nothing ever goes wrong one never has to worry, right?  More or less.  Of course our laws aren’t written for when things go right, but for when the unexpected happens.  Let’s say that poor fella really does get hurt.  There he is banging away with the nail gun and the compressor hose bursts.  Safety glasses are for wimps, so naturally splinters and other debris fly straight to his face blinding him for all eternity.  Or at least until the trial is over.  The State will try to hold you responsible for the entirety of his medical care and later disability, and will be knocking on your door grinning from ear to ear.  Actually you’ll get a nasty little letter letting you know that a worker’s comp claim has been filed, the State presumes you are responsible for the costs, and, by the way, there will be fines galore for not having the proper insurance in place and on file.

So what does this all actually mean?  The average Joe Alaska isn’t going to run out and get worker’s compensation insurance.  He’s also not going to be checking the bonafides of his day help.  He may not be keeping records or reporting employment taxes to the IRS.  This is Alaska, free man’s country, where we take care of things up front and don’t need nor want the government standing around looking over our shoulder making sure the paint is the proper color, consistency, and lead-free.  This ain’t Bolder or San Francisco, it’s Willow, or Tok, or Aleknagik.  What it means is that we need to carefully consider what we’re doing, how we’re doing it, and who’s doing it.  We  need to remain aware that we are responsible if something untoward happens.  After an accident you’ll probably think hiring that licensed small business contractor who already has the proper employment credentials and insurance would have been faster and cheaper.  He hires the fella from Beans or off Craigslist and actually insures them.

Will anything change after reading this little blerb?  Likely not, but us attorneys are around when the unthinkable or the unknowable happens.  So if your brother is snoring away on a tropical isle and your high school buddy is raking in big coin in the oil patch and you still need help slinging mud, keep in mind you are an employer, and subject to the crushing wheels of justice.

Alaska Contractor’s Outlook with Government Shut Down

Government Shut Down Affects Contractors
http://flickr.com/photos/84539227@N00/10111702255

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.

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Alaska Supreme Court Orders Closer Look at Offer of Judgment

By:  Clayton Walker, JD

 

 DEARLOVE

v.

CAMPBELL

OPINION No. 6785

May 31, 2013

Offer of Judgment In Alaska
Ice Biking the Turnagain Arm, Anchorage, Alaska

 

A driver caused injury to the passenger of another car in a two-car accident. The passenger brought suit for damages, including her insurer’s subrogated claim for medical expenses. State Farm Insured both the driver and passenger. The driver made an early offer of judgment, which the passenger did not accept. State Farm then made a direct payment to itself reducing the  amount from the passenger’s potential recovery. The driver then made a second offer of judgment, which the passenger did not accept. After trial both parties claimed prevailing party status; the driver sought attorney’s fees under Alaska Civil Rule 68.

The superior court ruled that the Driver’s first offer of judgment did earnRule 68 fees, but the second offer did. Both parties appealed, arguing the superior court improperly considered the State Farm Insurance’s  payment in its Rule 68 rulings. The Alaska Supreme Court concluded that the trial court must take into account State Farm’s payment to itself had when evaluating the offers of judgment.

The Supreme Court found the record unclear on the nature of State Farm’s.  The Alaska Supreme Court vacated the decision that the second offer of judgment entitled the driver to Rule 68 fees and remanded for further proceedings on this issue. Hopefully a closer look at the effect of State Farm’s treatment of its insureds results in a fair outcome for their policy holders.

 

 

 

Bike to Work Anchorage 2013

May 17, 2013Anchorage Bike to Work

Anchorage Bike to Work Day is a local celebration of the national event initiated in 1956 by the League of American Bicyclists. Each May, the event provides a stimulus to get bodies and bicycles in shape for a season of riding. Teams are organized among coworkers and other social groups for education and mutual support. Team registration has quadrupled since 2007; more than 3,800 cyclists were counted at key intersections in May of 2012.

Continue reading “Bike to Work Anchorage 2013”

Property Line Disputes

 

Property Line Disputes
The subject Property in Dispute

Property Line Disputes

 

The Kaylors live in the north parcel, 4500 E 135th.  The McCarrey’s live in the south parcel, 4530 E 136th.  Between them lies a strip of land that looks like a road.  The parties agree that the strip of land is owned by the McCarreys; but, they don’t agree as to whether the McCarrey’s can exclude the Kaylor’s from their own property.

The Kaylors like to store their Alaska toys at the back of their lot so they don’t have to see their own collection of used vehicles.  Instead, they’d like to leave them in full view of the MCCarrey’s front windows and drive way.  The McCarrey’s proposed fencing the area and installing a gate to reduce the Kaylor’s access and to encourage them to store their stuff somewhere else.  The Kaylors sued to prevent the fence.

The trial court granted the injunction.  The Alaska Supreme court overruled this holding and remanded the matter back to the trial court for additional findings.  Specifically, the land grant that created the interest provided for a public right of way.  However, the parties had not addressed any evidence to the issue of whether the public right of way grant had been accepted by any governmental agency.  If it turns out that the grant was accepted as a public right of way the Kaylors can keep piling stuff up in the McCarrey’s front view.

http://www.courts.alaska.gov/ops/sp-6767.pdf

 

 

Buy-Sell Provisions in LLC Operating Agreements

Buy-Sell Agreements
Alaska Business Attorney

Closely held businesses with more than a single owner should have buy-sell provisions that address what happens on the death or disablility of an owner.  These agreeements can also address proposed exit strategies, dispute resolution, managment structure, noncompete agreements, antidilution provisions and valuation methods.  The meat of the agreement tends to be the right or obligation to buy or sell an owners interest. Continue reading “Buy-Sell Provisions in LLC Operating Agreements”