Alaskasland.com, LLC v. Cross

• Decision Date: 25 September 2015
• Docket Number: No. S–15270.,S–15270.
• Parties: ALASKASLAND.COM, LLC, Appellant, v. Kevin CROSS d/b/a Cross & Associates and Salman Group ; William W. Jacques; Matt Dimmick ; and Keller Williams Realty—Alaska Group, Appellees.
• Court: Alaska Supreme Court

357 P.3d 805

116 U.S.P.Q.2d 1724

ALASKASLAND.COM, LLC, Appellant

v.Kevin CROSS d/b/a Cross & Associates and Salman Group ; William W. Jacques; Matt Dimmick ; and Keller Williams Realty—Alaska Group, Appellees.

No. S–15270.

Supreme Court of Alaska.

Sept. 25, 2015.

Brian J. Stibitz, Reeves Amodio LLC, Anchorage, for Appellant.

Matthew W. Claman and James B. Stoetzer, Lane Powell LLC, Anchorage, for Appellees.

Before: FABE, Chief Justice, WINFREE, STOWERS, MAASSEN, and BOLGER, Justices.

OPINION

WINFREE, Justice.

I. INTRODUCTION

Using three photographs taken from a neighboring subdivision's marketing materials—including one portraying the subdivision's stylized entrance sign—a realtor group listed adjacent property for sale on a multiple listing service website. The listing also contained a property appraisal stating that (1) based on plat-related information, existing legal access to the property might compromise the neighboring subdivision's gated community perimeter fencing, and (2) based on statements made to the appraiser by employees of the local electric association, the neighboring subdivision's electric service might be subject to legal issues. The subdivision's developer then sued the realtors for misappropriation of the photos, trade name infringement, and defamation. The superior court granted summary judgment to the realtors and awarded them enhanced attorney's fees; the developer appeals. Because there are no material factual disputes and the realtors are entitled to judgment as a matter of law, we affirm the superior court's grant of summary judgment (although in part on grounds not relied upon by the superior court). And because we cannot conclude that the superior court abused its discretion in awarding attorney's fees, we affirm that decision as well.

II. FACTS AND PROCEEDINGS

A. Facts

Alaskasland.com, LLC (Alaskasland) is the owner-developer of a gated subdivision located between the Parks Highway and the Susitna River. Asbury Moore is Alaskasland's general manager, and Duane Mathes is its real estate broker. Since 2008 Alaskasland has marketed its subdivided lots under the name “Susitna Shores,” but the name was not registered. Alaskasland constructed a prominent concrete sign at the subdivision entrance featuring the Susitna Shores name and logo, and it has used the name and logo on its website and in printed marketing materials. Alaskasland estimates it spent almost 900 hours and approximately $160,000 on developing and distributing promotional materials for Susitna Shores. Of the subdivision's 37 lots, 15 had been sold by the time the superior court granted summary judgment in July 2013; the most recent sale was in May 2011.

In 2009 Bryan and Tara Goode inherited property (Goode property) from Florence Sawby. The Goode property is bounded on three sides by the Susitna Shores subdivision and on the fourth by the Susitna River. Alaskasland had been interested in purchasing the property and had unsuccessfully offered Sawby $45,000 for it in 2007.

Gregory Brooker appraised the Goode property and valued it at $150,000. His appraisal noted that “[t]he electric service in the [Susitna Shores] subdivision may be subject to legal issues due to the lack of [Matanuska Electric Association] participation in construction of the infrastructure.” The appraisal also noted that “the [Goode property] has an undeniable access right that crosses the access to [the Susitna Shores] subdivision boat ramp—and that access could be developed and probably left open, thereby defeating the gated subdivision.”

In August 2011 the Goodes listed their property for sale with realtor Kevin Cross, associated with Keller Williams Realty—Alaska Group (Keller Williams), for $146,000. Because the Goodes did not provide Cross any photographs of the property, his assistant located on the internet photographs that came from Alaskasland's website depicting: Susitna Shores' entrance sign with its stylized logo; Mt. McKinley; and Moore fishing with his family on a river. Mathes had taken the first two photographs himself and had obtained the third from Moore. The photographs were appended to the Goode property listing on the Alaska Multiple Listing Service (MLS) website. MLS maintains a comprehensive online database of real estate listings on both a realtor-only website, called the FlexMLS site, and a separate publicly accessible site. Brooker's appraisal also was appended to the Goode property listing on the FlexMLS website; it was never available on the publicly accessible MLS website.

In early November 2011 Mathes discovered that the Goode property was listed for sale and informed Moore. After viewing the MLS listing Moore determined that the three Alaskasland photographs were being used to market the Goode property, and Mathes promptly notified MLS that Cross was improperly using these photographs. Mathes then contacted Cross to express interest in purchasing the Goode property. Mathes asked Cross for a copy of the appraisal, which Cross immediately sent to him. Mathes apparently also viewed the appraisal through the FlexMLS site at various times. Mathes then conveyed to Cross an offer from Moore to purchase the Goode property for $95,000, which the Goodes promptly rejected.

In response to the information received from Mathes, MLS confirmed to Cross that the photographs appended to the Goode property listing “were taken from another licensee[']s listing and website” and that MLS was removing the photographs from the listing. In mid-December Cross notified Mathes that he had been informed the photographs were still viewable through other real estate listing sites due to a flaw in MLS's system, and that Cross had contacted the other sites to request that the photographs be removed immediately. Cross stated he was “assured that this is being taken care of,” and Moore later confirmed he could not find the photographs on any other website after December 2011.

Because the Goodes had received only the one offer from Moore, they decided to cancel their listing in mid-December 2011. Shortly thereafter William Jacques, the Broker in Charge at Keller Williams, notified Cross that the appraisal remained a part of the cancelled listing on the FlexMLS site and that Moore and Mathes wanted it removed. Cross apparently was under the impression that cancelling the listing had removed the appraisal from the site. At some point Cross contacted MLS “to see what had to be done” to remove the appraisal. MLS removed the appraisal in early May 2013.

B. Proceedings

In January 2012 Alaskasland filed suit against Cross, Jacques, Keller Williams and another Keller Williams employee, and the Goodes (collectively the Realtors). The complaint, as later amended, alleged several common law causes of action: (1) “injunction” for harm from posting the photographs and appraisal; (2) misappropriation of Alaskasland's advertising materials, specifically the photographs from Alaskasland's website; (3) trademark and trade name infringement through use of the Susitna Shores sign photograph; (4) publication of false and defamatory information by posting the Brooker appraisal; (5) interference with existing and prospective business relationships; (6) conspiracy to defraud by false representations; and (7) negligent supervision of Cross and vicarious liability on the part of Keller Williams employees and the Goodes. Alaskasland sought a permanent injunction and damages.

The Realtors moved to dismiss all claims. In its opposition Alaskasland notably waived any copyright, trademark violation, and unfair competition claims under state and federal statutes. The superior court denied the motion to dismiss.

Alaskasland moved for partial summary judgment on its misappropriation, trade name infringement, defamation, and negligent supervision claims. The Realtors opposed and cross-moved for summary judgment on all claims. After being granted permission during oral argument, the parties supplemented the record with expert reports. Shortly thereafter Moore reached an agreement with the Goodes to purchase their property for $155,000.

The superior court granted summary judgment to the Realtors on all claims. The court dismissed the “injunction” claim as moot because by then the photographs and the appraisal had been removed from the MLS website. The court noted that Alaska has not yet recognized the tort of misappropriation, but that even if it did, Alaskasland had failed to satisfy what the court considered the tort's elements: “1) time, labor, and money expended in the creation of the thing appropriated; 2) competition; and 3) commercial damage to the plaintiff.”¹ The court implied that at least some time and labor were expended in creating the photographs and concluded that the parties were in competition, but held that “[t]his claim truly fails upon the third element, damages.” The court stated: “Alaskasland has failed to provide a scintilla of evidence that any purchaser other than Mathes and Moore saw the photos.”

Turning to the trade name and trademark infringement claims, the superior court explained that such claims require establishing both that: (1) “the symbol [is] recognizable to the public in a way that distinguishes it as unique to a particular business”; and that (2) “the defendant's actions ... cause a likelihood of confusion among the relevant buyer class.”² Because the name “Susitna Shores” is geographically descriptive, the first prong required Alaskasland to show that the name has secondary meaning—a mental connection between the trade name and a single business.³ The court found persuasive the Realtors' argument that Alaskasland's failure to sell at least half its lots—and none in the prior two years—evidenced that its marketing efforts had failed to produce a secondary meaning in the minds of the public. The court therefore granted summary judgment dismissing the trade name and trademark infringement claims.

The superior court then explained that a defamation claim requires establishing...