Alaska Fur Gallery, Inc. v. First National Bank Alaska

Summary

The Alaska Supreme Court affirmed judgments arising from a family of business owners’ claims that First National Bank Alaska negligently and fraudulently induced investments in a hotel project. The court held that alleged inconsistencies in bank officers’ testimony did not constitute fraud upon the court, although the bank’s litigation conduct supported an award of enhanced attorney’s fees for the first trial. The opinion also addresses standards of review, attorney’s fees, jury issues, evidence, equitable estoppel, and civil rules.

Holdings

1. Fraud upon the court may be found only in the most egregious circumstances involving corruption of the judicial process itself, and the plaintiffs did not prove that standard by clear and convincing evidence based on the Bank's allegedly misleading testimony in either trial or on appeal.
2. The superior court did not abuse its discretion by awarding enhanced attorney fees for the plaintiffs' work relating to the first trial while denying enhanced fees for the second trial.
3. The superior court properly denied directed-verdict and JNOV motions because reasonable jurors could differ on whether McGrew acted solely as a permitted bank finder.
4. The superior court did not abuse its discretion by excluding the McCullough Report and limiting McCullough's testimony.
5. The special verdict form did not produce plain error or a double reduction of damages.
6. The plaintiffs' common-law tort claims were not barred by the statute of limitations because the Bank was equitably estopped from asserting the defense.
7. The question whether the Inn investment was a security was moot, and the collateral-consequences exception did not apply.
8. The plaintiffs were the prevailing party and were properly awarded attorney fees and costs; the contractual fee provision did not govern, the Bank's Rule 68 offers were invalid, and costs did not require further apportionment.

Questions Presented

1. Whether the Bank's allegedly inconsistent testimony and litigation conduct constituted fraud upon the court.
2. Whether the superior court properly denied directed-verdict and JNOV motions concerning whether McGrew acted solely as a federally permitted bank finder.
3. Whether the superior court abused its discretion by excluding or limiting evidence concerning the McCullough Report.
4. Whether the special verdict form and related jury instructions produced plain error or a double reduction of damages.
5. Whether the Bank's statute-of-limitations defense was barred by equitable estoppel based on McGrew's alleged assurances of replacement financing.
6. Whether the issue of whether an interest in the Inn was a security was moot.
7. Whether the awards of attorney fees and costs, including enhanced fees, were proper and whether the Bank's offers of judgment complied with Alaska Civil Rule 68.

Disposition

affirmed