Johnson v. Albin Carlson & Co.

• Docket Number: Supreme Court S-18615,18625
• Decision Date: 13 June 2025
• Citation: Johnson v. Albin Carlson & Co., 18625, Supreme Court S-18615 (Alaska Jun 13, 2025)
• Parties: MORRIS O. JOHNSON JR. d/b/a JOHNSON CONSTRUCTION COMPANY, Appellant and Cross-Appellee, v. ALBIN CARLSON & CO., and PATRICK ALBIN CARLSON JOINT VENTURE, LLC, Appellees and Cross-Appellants.
• Court: Alaska Supreme Court

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MORRIS O. JOHNSON JR. d/b/a JOHNSON CONSTRUCTION COMPANY, Appellant and Cross-Appellee, v. ALBIN CARLSON & CO., and PATRICK ALBIN CARLSON JOINT VENTURE, LLC, Appellees and Cross-Appellants.

Supreme Court Nos. S-18615, 18625

Supreme Court of Alaska

June 13, 2025

Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Superior CourtNo. 3AN-16-07503 CI William F. Morse, Judge.

Appearances: Kevin T. Fitzgerald, Ingaldson Fitzgerald, P.C. Anchorage, for Appellant and Cross-Appellee.

Sarah C. Gillstrom, Davis Wright Tremaine LLP, Anchorage, for Appellees and Cross-Appellants.

Before: Maassen, Chief Justice, and Carney, BorghesanHenderson, and Pate, Justices.

OPINION

CARNEY, Justice.

I.INTRODUCTION

A contractor hired a subcontractor to undertake part of the construction of a remote bridge.The initial scope of the contracted work soon changed.Neither the contractor nor the subcontractor kept detailed records of the changes and their associated costs.Years after the project was completed, the subcontractor sued for damages, claiming that it had not been paid for the work it completed.

The superior court concluded that the subcontract did not govern the extra work.It awarded the subcontractor damages on some claims and denied others.The court also precluded the subcontractor from pursuing some claims at trial because of discovery violations.The court found that the contractor was the prevailing party following trial and awarded attorney's fees to the contractor.

Both the contractor and subcontractor appeal.We conclude that it was an abuse of discretion to preclude the subcontractor from pursuing claims without first considering less severe sanctions.We also reverse some of the damages awards and vacate the court's prevailing party determination and resulting attorney's fees award.We otherwise affirm the judgment and remand for further proceedings consistent with this opinion.

II.FACTS AND PROCEEDINGS

A.Facts

Because the legal issues in this appeal are based upon specific events that occurred during the years that the bridge was being constructed, we set forth the facts in some detail.

In 2010, a Chicago-area construction company, Patrick Albin Carlson Joint Venture, LLC(PAC) was awarded a $1.7 million contract from the United States Forest Service to design and build a trail bridge over a river in the Chugach National Forest.The bridge's location was ten miles from the nearest road but was accessible by railroad for part of the year.When the railroad was not in operation, however, crews could only access the site by boat, snowmachine, or helicopter.

PAC is comprised of Albin Carlson &Co.(Albin) and Patrick Engineering Inc.It subcontracted with one company to build the bridge; it subcontracted with another, Goode Construction, to complete earthwork and assemble and lift the bridge into place.

PAC also entered a subcontract with Johnson Construction Co.(Johnson) to drive the piles to support the bridge.Johnson is a sole proprietorship of Morris Johnson, a contractor and crane operator.Johnson initially submitted a $950,000 bid to perform nearly all of the work for PAC, but PAC subcontracted with Johnson only to drive temporary and permanent piles for the bridge.

1.The subcontract

The subcontract between PAC and Johnson incorporated by reference work identified in two separate work orders.Work OrderNo. 1 directed Johnson to install eight permanent piles, four on each side of the river.Work OrderNo. 2 required Johnson to install two temporary piles on each side of the river to support the bridge as it was being erected.The orders required the work to be substantially completed by October 1, 2011.PAC agreed to pay Johnson $82,500 for Work OrderNo. 1 and $30,000 for Work OrderNo. 2, for a total of $112,500.

The subcontract contained a changes clause allowing PAC to alter the scope of the work.The clause required that such changes "shall be authorized only by a written and properly executed Change Order from [PAC], or by a verbal or written directive from [PAC's] Project superintendent based upon directions from the [Forest Service]."Verbal or written changes ordered by the superintendent were required to be documented in a change order by PAC as promptly as possible.Finally, the subcontract provided that "[n]o change in the Work, whether by way of alteration or addition to the Work, shall be the basis of an addition to the amount to be paid to [Johnson] . . . unless and until such alteration or addition has been authorized by a Change Order executed by [PAC]."

The subcontract also contained various recordkeeping and documentation requirements.As a "condition precedent" to payment, it required Johnson to give PAC an invoice with receipts, original waivers of lien, and other evidence showing Johnson's expenses related to the work.It also provided that:

Whenever the requirements of the [contract between PAC and the Forest Service] are such that as a prerequisite to receipt of payment, [PAC] must furnish the [Forest Service] with documentation of any nature whatsoever from [Johnson] . . ., including but not limited to certified payrolls, compliance statements and other documents required under applicable laws or [that contract], [Johnson] shall promptly furnish [PAC] with such required documentation, and [PAC] may withhold payment until such documentation has been furnished. ....

Final payment shall in no event become due to [Johnson] until . . . [Johnson] submits to [PAC], as may be required by [PAC]: (i) an affidavit that all payrolls, bills for materials and equipment, and all other indebtedness of [Johnson] related to its performance of the Work, have been fully paid or otherwise satisfied, and (ii) complete and final lien waivers from [Johnson] ....

2.The 2011 construction season

The project quickly encountered delays.Johnson mobilized equipment to the construction site in late September 2011 and began driving the permanent piles on the east side of the river.Soon after beginning, Johnson hit an underground obstruction that drove one or more piles out of alignment.David Voss, PAC's onsite representative, directed Johnson to pause its work on the east side and begin driving the west side piles.

Again Johnson encountered trouble.Although it had been able to move equipment to the east side of the river by rail, Johnson could not do the same on the west side because the bank was too steep.Nor could its equipment ford the river.The parties decided that Johnson would build an ice bridge over the river to move its equipment to the west side.PAC agreed to compensate Johnson for this work on a time and materials basis.Johnson built the ice bridge as soon as temperatures and snowfall allowed its employees to snowmachine to the site.

PAC requested Johnson's certified payrolls, as required by its contract with the Forest Service, several times throughout the project.^[1] In mid-November 2011 Voss sent Morris Johnson the certified payroll form and explained that it "need[ed] to be filled out."Two weeks later, PAC again sought the certified payrolls from Morris Johnson and sent him the form to be completed.Johnson did not send any certified payrolls to PAC in 2011.But PAC paid Johnson's first invoice - $36,250 for driving the permanent piles under Work OrderNo. 1 and $15,000 for supplying and installing temporary piles under Work OrderNo. 2.

3.The 2012 construction season

Johnson completed the ice bridge in March 2012.It then moved its equipment to the west side of the river, where it remained until work resumed in the spring.

That spring Voss approved Johnson's request to purchase a boat to facilitate site access and orally agreed that PAC would reimburse Johnson for its use of the boat.He also directed Johnson to take over some of the bridge lifting work that had been assigned to Goode Construction.The added work required Johnson to bring crane mats and an additional, much larger crane to the work site.

In June PAC again requested Johnson's certified payrolls.Johnson eventually provided its certified payrolls covering October 9, 2011 to August 4, 2012.

In July PAC replaced Voss with Neil Hunt.In September PAC and Johnson prepared Invoice 2, billing PAC $50,000 under Work OrderNos. 1 and 2 for driving the permanent piles, welding pile caps on the west side piles, and installing some temporary piles.PAC paid the invoice.

Also in September, Hunt sent Morris Johnson an email summarizing the agreed-upon extra work.Among the work included was Johnson's previous work building the ice bridge.The email reiterated that the work would be compensated on a time and materials basis.

Hunt also identified additional work to be completed: additional crane work, support for Goode Construction on the bridge superstructure, and dirt work to build pads to stage and lift the bridge.The email stated that this work was also to be done on a time and materials basis and would include equipment rates provided by Johnson.It also stated that Johnson would provide travel to and from the worksite via boat.Hunt concluded the email by requesting to discuss the additional work with Morris Johnson so that PAC could issue a change order.There is no evidence of a response from Johnson.

In October Hunt sent Morris Johnson a proposed written change order authorizing Johnson to lift the bridge into place.Under the proposed terms, Johnson would be paid $33,000 to mobilize and demobilize a crane to the worksite to lift and install the bridge.Hunt proposed authorizing up to $20,000 in labor costs at a rate of $130 per hour.Neither PAC nor Johnson signed the change order.

Johnson completed the work specified in the unsigned change...