FABE, Chief Justice.
Tamarack Air, Ltd. negligently damaged James Madonna's airplane while it was on Tamarack's airfield after it had been in Tamarack's shop for routine maintenance. Tamarack offered to fix the plane, but Madonna refused that offer. Instead, he elected to ship the plane to Wyoming and had the plane repaired at the original factory. Tamarack argued that Madonna had failed to mitigate his damages and refused to compensate Madonna for the full cost of these repairs. A jury awarded Madonna most, but not all, of the cost of having the plane repaired out of state. Madonna now argues that the trial court erred by refusing to let him present several other claims for damages related to the accident. But we find no error and therefore affirm the trial court in all respects.
James Madonna owns a two-seat fabric-covered airplane called an Aviat Husky. Airplanes need regular repair, and Madonna orally contracted with Tamarack Air, Ltd. to perform annual inspections and maintenance on his plane. Tamarack regularly serviced Madonna's plane for several years, until, in 2009, while the plane was on Tamarack's airfield following inspection, a Tamarack employee accidentally towed the Husky into two other planes and damaged it.
Vicky Domke, owner of Tamarack, called Madonna to tell him about the accident. A few days later, Madonna inspected the damage and drafted a letter outlining his expectation that Tamarack would be responsible for organizing and conducting repairs on the aircraft. Soon after delivering this letter to Tamarack, Madonna received a reply from Allstate Insurance Company, Tamarack's insurer, informing Madonna that Allstate would pay for the repairs at a shop of his choice, the reasonable cost of alternative transportation, and any loss of value to the aircraft. Allstate's letter also indicated that Madonna was responsible for having these repairs done and mitigating his damages.
Madonna asked Domke for an estimate of the damage, and Madonna and Domke, together with another local mechanic, Steve Conatser, met to discuss the necessary repairs. Domke presented Madonna with details of the necessary repairs, including a list of parts and labor. Domke thought that most of the work could be done at Tamarack but she recognized that the plane would have to be flown to Conatser's shop for painting and fabric repair. Domke estimated that the needed repairs would cost about $20,000, although that estimate was open-ended because she could not be certain about the extent of the damage until repairs were underway.
Madonna was not satisfied with Domke's repair plan. He worried that Tamarack was "going to patch this thing together, give it a[n] inferior paint job and [that he] was going to get the plane returned in a less than desirable condition." Madonna never gave Domke permission to make the suggested repairs.
Instead, Madonna made arrangements to repair the plane on his own. He solicited repair estimates from three local shops. He consulted a knowledgeable friend for advice. And he finally decided to dismantle the plane and ship it back to the Aviat factory in Wyoming, where it could be rebuilt and repaired. Although the cost of parts and labor was about the same for repair at the factory as local repair, Madonna had to pay much more to have the plane transported to and from Wyoming. Madonna paid to have the Husky disassembled, crated, and shipped to Wyoming; hired a pilot to fly to Wyoming and then fly the Husky back to Alaska;
At trial, Tamarack conceded liability for the accident but argued that Madonna had chosen an unreasonably expensive course of repair and thus had failed to mitigate his damages. Madonna presented evidence that only the factory had the necessary equipment (called "jigs") to remedy any twisting of the wings, which can be dangerous in flight. Tamarack presented contrary evidence that several mechanics in Fairbanks had the skills necessary to make satisfactory repairs. While Madonna claimed $50,909 in damages for the cost of repairs, the jury awarded Madonna $43,878 in damages. It also awarded $5,000 for the cost of chartering a flight Madonna had hoped to make in his Husky. The trial judge awarded 3.75% prejudgment interest on the award, as well as attorney's fees and costs.
Madonna now challenges the award on a number of grounds. He claims that the trial court made seven errors: failure to allow presentation to the jury of a claim for breach of contract; failure to allow presentation of a claim for punitive damages; failure to allow questioning of Domke regarding whether she had received a letter revealing his plan to ship the Husky to Wyoming; denial of Madonna's claims for lost income to his business and for the cost of a charter trip to the Brooks Range; and denial of his claim for the lost interest on the value of the plane while it was damaged. Madonna also challenges the award of prejudgment interest at the statutory rate and the denial of his request for post-trial discovery. We address these arguments in turn.
Interpretation of an established contract is a question of law and is reviewed de novo.
We review a trial court's discovery rulings and decisions to exclude evidence for abuse of discretion.
Whether an entire type of damages is allowed is a question of law, which we review de novo.
The superior court treated this case as a straightforward trial for tort damages. But Madonna has consistently advanced a theory of the case that sounds in contract
The trial court refused to let Madonna's contract theory go to the jury. At a pretrial hearing, the trial court entertained arguments on the issue and ruled that Madonna would not be allowed to present evidence about any contractual duties Tamarack may have had to repair the plane after the accident.
On the first day of trial, Madonna again attempted to admit evidence that Tamarack had a contractual obligation to help him repair his plane. The trial court again ruled that such evidence would not be admitted, but it allowed Madonna to make an offer of proof and preserve his objection for appeal. Madonna offered two pieces of evidence to support his claim. First, he testified that Domke had promised to "care for [the plane] with all the attention that she would give her own airplane and maintain it in excellent condition." Second, he testified that Tamarack had once refastened, for free, an exhaust clamp bracket it had forgotten to tighten during the annual inspection.
We agree with the trial court that Tamarack had no contractual obligation to repair the plane after the accident. Madonna's proffered evidence does not indicate otherwise. The loose exhaust clamp, unlike the accident at issue, was a defect covered by the bargained-for annual maintenance. Tamarack's contractual duty to perform satisfactory maintenance on the plane obliged it to fix any problems that arose during the maintenance process for no further charge, but here no work was being done on the plane when it was damaged.
Madonna also points to Domke's promise to "care for [the plane] with all the attention that she would give her own airplane and maintain it in excellent condition." We have previously held that a contract must have reasonably definite and certain terms to be enforceable.
It is also fatal to Madonna's claim that Domke did offer to make repairs on the plane after reviewing the damage with him and estimating the cost. Madonna rejected this repair plan. Madonna cannot now argue that Domke breached some duty to repair the plane herself unless he takes the untenable position that Tamarack had a perpetual obligation to submit repair plans until Madonna was satisfied and accepted one. Any
Madonna also argues that we held in Burgess Construction Co. v. Hancock that a bailee is always obligated to repair bailed property damaged in her possession.
Madonna argues that Tamarack breached the covenant of good faith and fair dealing implicit in every Alaska contract by refusing to coordinate the repairs to Madonna's plane after it was damaged and by failing to compensate him for the cost of repairs without the need for legal intervention. Madonna sought punitive damages based upon this alleged breach of the implied covenant of good faith and fair dealing. Madonna asked the trial court to submit the question of punitive damages to the jury. Tamarack filed a motion for summary judgment on this point, and the trial judge granted it. Tamarack also asked the trial court to exclude evidence of communications between Madonna and Tamarack's insurer, which Madonna planned to use to show Allstate's misconduct. The trial court granted this motion too. Madonna appeals these rulings.
Punitive damages are a harsh remedy not favored in law.
Ordinarily, punitive damages are more readily available in a tort case than a contract case. But Madonna allows that Tamarack did nothing so outrageous as to be sanctioned with punitive damages in tort. Instead, Madonna argues that Tamarack had a contractual duty to help him repair the plane, that Tamarack breached the covenant of good faith implicit in this contract by refusing to make those repairs, and that this breach warrants punitive damages. But we have already held that Tamarack had no contractual obligation to make repairs itself. Moreover, even if such a contract had existed, Madonna's argument that punitive damages are warranted is based primarily on the actions of Allstate, Tamarack's insurer. But we held in O.K. Lumber Co. v. Providence Washington Insurance Co. that an injured claimant may not sue the defendant's insurer for breach of the duty of good faith and fair dealing.
On August 20, 2009, Madonna wrote a letter to Allstate and included the estimated cost of sending the plane to the Aviat factory in Wyoming. At trial, Madonna tried to ask Domke if she had received or had knowledge of this letter. Tamarack objected to the question, and the trial court sustained the objection. Madonna now appeals this ruling.
Madonna argues that receipt of the letter is evidence that Tamarack knew of Madonna's plan to repair the Husky in Wyoming, yet said nothing. He argues in turn that Tamarack's silence is evidence that the plan was reasonable. Thus, he claims, the letter was relevant and its exclusion was erroneous.
But even if exclusion of the letter was erroneous, Madonna bears the burden of showing that this evidentiary ruling was prejudicial.
The letter includes Aviat's estimated cost to repair the Husky and Aviat's address in Wyoming. From this Tamarack could have deduced Madonna's plan to repair the plane out of state. But the jury's award was far higher than Tamarack's estimated cost of repairing the plane locally, so we must assume that the jury accepted Madonna's argument that it was reasonable to repair the plane in Wyoming. In fact, it appears that the only costs the jury did not reimburse him for were a few expenses associated with unloading the plane in Wyoming.
Madonna is a professor emeritus of geology at the University of Alaska. He currently runs a gemstone shop and museum, selling prospecting and mining equipment as well as valuable rocks and minerals. The shop is only open five months a year, from April to September. Madonna is the only employee, and the specialized knowledge required to run the shop and museum makes it difficult to hire additional help.
Madonna asserts that he was forced to spend a significant amount of time arranging for repairs of his plane after the accident. Madonna claims that this prevented him from working in his shop and significantly reduced his income. He was prepared to present evidence that his earnings for the 2009 year were significantly lower than average. The judge refused to allow Madonna to present this evidence, ruling that, without more corroboration or specific evidence, it was too speculative to go to a jury. Madonna appeals this ruling.
As a general rule, an injured party should be compensated for profits lost due to that injury if those losses are reasonably certain.
Madonna has presented no evidence to suggest that the trial court erred by ruling that the claim was too speculative to go to the jury. At oral argument before us, Madonna conceded that he never made an offer of proof beyond testimony about the time it took to address the repairs and evidence that Madonna's shop made less than the prior year. And as the trial court judge pointed out:
We cannot conclude that the trial court erred by ruling that a claim for lost profits based on this evidence alone was too speculative to reach the jury.
Madonna claims that while his Husky was damaged, he wanted to take two charter flights, one to the Black Rapids Glacier and one to the Brooks Range. Madonna solicited bids for both trips and received estimates that it would cost $5,000 for a trip to the Black Rapids Glacier and $8,800 for four round trips to the Brooks Range.
The trial court allowed Madonna to ask the jury for compensation for the cost of the Black Rapids Glacier trip, but not the cost of the Brooks Range charter flights. Madonna now appeals the trial court's ruling.
Madonna cites Burgess Construction Co. v. Hancock for the proposition that the owner of damaged property is entitled to recover the rental cost of replacement equipment while it is down for repairs.
Madonna argues that he should be compensated for the "lost interest on his investment in the plane" while it was damaged. It appears that this is a claim for the interest Madonna would have earned during the period the Husky was damaged if he had never bought the plane and had instead invested the purchase money.
The trial court did not allow this claim to go to the jury, finding that Madonna would be appropriately compensated for this hypothetical lost return on his money by pre- and post-judgment interest. That analysis is correct.
Madonna argues that the money he used to repair his plane would otherwise
Alaska Statute 09.30.070(a) fixes prejudgment interest for all judgments except for "a judgment or decree founded on a contract in writing." Here, the trial court correctly ruled that there was no contract.
Madonna argues that support for his contention can be found in Tookalook Sales & Service v. McGahan.
Madonna argues that "[s]ince a plaintiff can recover the cost of borrowed funds, Madonna should be able to recover the lost interest from his own investment account. Both are caused by the same thing and both are readily quantified." But in Tookalook, the plaintiff had a written contract to repay money at the higher-than statutory rate. In the current case, Madonna had no such contract. Therefore, we conclude that the trial court did not err by setting prejudgment interest at the statutorily set rate.
Along with his motion asking the trial court to set prejudgment interest at a rate higher than the statutory default rate, Madonna also noticed an Alaska Civil Rule 30(b)(6) deposition of "the person at Defendant or its insurer most familiar with the rate of interest or appreciation Defendant's insurer has earned on its investments from June 5, 2009 to the present." Madonna hoped this deposition would reveal that Allstate earned significant interest on the money it saved by not paying for repairs immediately. This, he argues, would have bolstered his case that the statutory prejudgment interest rate was inadequate. Tamarack informed Madonna that it objected to the proposed deposition and would seek sanctions if he persisted with his plan.
Nevertheless, Madonna attempted a telephonic deposition. By all accounts it was a failure. Tamarack offered to have Tamarack's owner testify, but refused to produce anyone from Allstate or anyone with knowledge of Allstate's investments. Madonna, in turn, said that he was not interested in talking to anyone from Tamarack. After the deposition, Tamarack filed a motion for a protective order or for sanctions. A day later, Madonna filed a motion to compel Tamarack to produce a witness pursuant to his deposition notice. The trial court denied Madonna's motion to compel and awarded Tamarack $200 in attorney's fees. Madonna now argues that those decisions were erroneous.
Tamarack makes several convincing arguments that the attempted deposition was improper.
Madonna also argues that, in any case, the trial court should have awarded attorney's fees to Madonna, not Tamarack. Citing Alaska Civil Rule 37(d), Madonna argues that attorney's fees are mandatory whenever the opposing party fails to attend a deposition. But this is not true. That rule says that "the court shall require the party failing to act ... to pay the reasonable expenses, including attorney's fees, caused by the failure, unless the court finds that the failure was substantially justified or that other circumstances make an award of expenses unjust."
Because the trial court did not err in its rulings, we AFFIRM that court in all respects.
CARPENETI, Justice, not participating.
