Bachner Company Incorporated v. State, Dept. of Administration
387 P.3d 16
Alaska2016Background
- Bachner leased office space to the State (10-year firm term starting 2003, with ten 1-year renewal options); lease was procured via RFP and incorporated procurement terms.
- At the end of the firm term the State exercised a one-year renewal (Oct 1, 2013) and continued occupying 1,400 sq ft that had been rent‑free during the firm term; parties later agreed the space should be charged $2.35/ft and that the adjustment was retroactive to the renewal start.
- Bachner claimed the State failed to pay the retroactive rent, sent notice of default, and asserted the lease terminated for uncured breach; Bachner sued in Fairbanks superior court seeking eviction and damages rather than pursuing administrative remedies under the procurement code.
- The State moved to dismiss under Civil Rule 12(b)(6), arguing the procurement code (AS 36.30.560–.699, esp. .620 and .690) governs disputes over state leases and provides the exclusive administrative remedy that must be exhausted before suit.
- The superior court granted dismissal; the Alaska Supreme Court affirmed, holding the dispute is a contract claim covered by the procurement code, not an exempt payment dispute, and thus Bachner had to exhaust administrative remedies before filing suit.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the lease rent dispute is governed by the State procurement code and barred from original suit in superior court | Bachner: this is a simple landlord–tenant breach/payment dispute and the procurement code does not apply to a long‑expired procurement or to a later lease dispute | State: the procurement code expressly covers leases and all phases of contract administration; AS 36.30.620/.690 provide exclusive administrative remedies and an appeal path to superior court | Held: The procurement code governs ongoing lease disputes; Bachner must use the AS 36.30.620 administrative process and appeal to superior court if needed; original suit dismissed |
| Whether the procurement code applies only to solicitation/award phase, not ongoing contract administration | Bachner: “procurement” ends when contract executed; code remedies limited to bid/protest context | State: statutory definitions cover "all phases of contract administration" and AS 36.30.620 specifically governs contract claims, including lease rate adjustments | Held: Procurement definition includes contract administration; AS 36.30.620 applies to ongoing contracts |
| Whether the dispute is an exempt "payment dispute" under AS 36.30.620(g) (governed instead by AS 37.05.285) | Bachner: this is a payment dispute for services and thus exempt from AS 36.30.620 | State: leasing office space is "supplies" (real property) under the procurement code, not "services" covered by AS 37.05.285 | Held: The payment‑dispute exemption does not apply; lease is for "supplies" (real property) and falls under the procurement code |
| Whether superior court erred by deciding the 12(b)(6) motion without examining the lease or converting to summary judgment | Bachner: court should have considered the lease and possible conflicting contractual forum/remedy provisions | State: dismissal proper on the face of the complaint because the complaint pleads a contract claim governed by the code; no extra‑pleading materials were necessary | Held: No error — the complaint’s allegations alone showed the claim was subject to the procurement code and dismissal under Rule 12(b)(6) was appropriate |
Key Cases Cited
- J & S Services, Inc. v. Tomter, 139 P.3d 544 (Alaska 2006) (procurement code’s exclusive remedy bars original superior court actions on covered procurement claims)
- Roberson v. Southwood Manor Assoc., LLC, 249 P.3d 1059 (Alaska 2011) (standards for Rule 12(b)(6) review and dismissal disfavored)
- Clemensen v. Providence Alaska Medical Center, 203 P.3d 1148 (Alaska 2009) (pleading standards and de novo review of statutory interpretation)
- Maines v. Kenworth Alaska, Inc., 155 P.3d 318 (Alaska 2007) (issues raised first in reply brief are waived)