Henrichs v. Chugach Alaska Corp.

Summary

The Alaska Supreme Court affirmed a jury verdict holding Robert Henrichs liable for breach of fiduciary duty arising from his conduct as chair of Chugach Alaska Corporation's board. The court rejected arguments concerning a statutory reliance-on-counsel safe harbor, the business judgment rule and gross negligence standard, equitable defenses, and the jury instructions. It also upheld the superior court's five-year ban on Henrichs serving on CAC's board.

Holdings

1. Any error in failing to repeat the statutory reliance-on-counsel language in the second jury instruction was harmless because Henrichs presented no evidence that he relied on counsel's advice or that counsel approved the proxy letter, and he failed to show that the omission probably affected the verdict.
2. The superior court properly refused to instruct the jury that Henrichs could be held liable only for gross negligence. Alaska's common-law business judgment rule was not replaced, redefined, or codified by AS 10.06.450(b), but the rule does not protect volitional and egregious misconduct constituting a breach of fiduciary duty.
3. The superior court did not err by refusing to instruct the jury on Henrichs's equitable defenses because CAC's claims seeking money damages were legal claims, the jury was advisory as to the equitable board-service remedy, and the trial court had discretion whether to use or rely on an advisory jury.
4. Henrichs was not entitled to specific findings on his unclean-hands defense because he presented no evidence that CAC's alleged wrongdoing related to the events litigated in the action.
5. The superior court did not abuse its discretion by barring Henrichs from serving on CAC's board for five years.

Questions Presented

1. Whether the superior court erred by failing to repeat the statutory reliance-on-counsel language in a second jury instruction.
2. Whether the jury should have been instructed that Henrichs could be liable for breach of fiduciary duty only upon a showing of gross negligence under the business judgment rule.
3. Whether the superior court erred by refusing to instruct the jury on Henrichs's equitable defenses, including unclean hands.
4. Whether the superior court abused its discretion by barring Henrichs from serving on CAC's board for five years.

Disposition

affirmed