Anderson v. Alyeska Pipeline Service Co.

Supreme Court of Alaska · 2010 · Contracts

ContractsWorkers' CompensationStatutory InterpretationOffers of JudgmentAttorney's Feesproject ownerexclusive liabilityworkers' compensation

Facts

Anderson was injured while working for Doyon Universal Services at a Trans-Alaska Pipeline pump station operated by Alyeska. Alyeska had contracted with Doyon to provide security, medical support, lodging, and catering services for pipeline employees, and as part of that contract Alyeska agreed to provide workers' compensation insurance for Doyon's employees. After Anderson was struck in the head by an unsecured table belonging to Alyeska, she received more than $72,000 in workers' compensation benefits and then sued Alyeska in negligence. Alyeska asserted that it was immune from suit because it qualified as a project owner under AS 23.30.045 and AS 23.30.055, and it also made an early ten-dollar offer of judgment.

Issue

Whether Alyeska qualified as a "project owner" under AS 23.30.045 so that the exclusive liability provision of AS 23.30.055 barred Anderson's tort suit. Whether Alyeska's ten-dollar offer of judgment, made shortly after answering the complaint, was valid for purposes of triggering Rule 68 attorney's fees.

Rule

When the legislature has expressly defined a statutory term, courts generally apply that statutory definition rather than the term's common meaning unless a narrow exception applies, such as a circular definition or ambiguity in the definitional language. Under AS 23.30.045(f)(2), a "project owner" is a person who, in the course of the person's business, engages the services of a contractor and enjoys the beneficial use of the work; a person who meets that definition is an "employer" for purposes of AS 23.30.055's exclusive liability provision. A nominal offer of judgment made at the outset of litigation is invalid as a matter of law when, given its timing and amount, it has no reasonable prospect of acceptance and no reasonable prospect of encouraging negotiation or settlement.

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North Slope Extraction Services operates several oil-field support sites near Prudhoe Bay, Alaska. It hires Tundra Meal Support, a contractor, to provide daily food and janitorial services for site personnel; a Tundra employee is injured on site, receives workers' compensation benefits, and then sues North Slope in negligence, arguing that a company running ongoing operations cannot be a "project owner" because the word "project" ordinarily means a temporary undertaking.

How should the court rule on North Slope's claim of immunity under the exclusive liability statute?

Explanation. The majority held that when the legislature expressly defines a statutory term, courts generally use that definition rather than common usage unless a narrow exception such as circularity or ambiguity applies. The statutory definition of "project owner" is not limited to construction or short-duration work. If North Slope, in the course of its business, engaged a contractor and enjoyed the beneficial use of the work, it falls within the statutory definition and receives exclusive-liability protection.