Burton v. Fountainhead Development, Inc.
2017 Alas. LEXIS 35
Alaska2017Background
- Burton was hired seasonally by Princess Tours as a guest service host, primarily to work at Bear Lodge (a Fountainhead property) because he lacked transportation to other hotels.
- During training Burton criticized Bear Lodge parking; Fountainhead managers recalled past complaints and told Princess that Burton was “not allowed” on Fountainhead property and made two specific allegations: an altercation with a guest and that he “defaced” Fountainhead property.
- Princess removed Burton from the schedule and ultimately terminated him after Burton stated he could not reliably work at locations other than Bear Lodge due to transportation limits; Princess also marked him ineligible for rehire.
- Burton sued Fountainhead for tortious interference with a prospective business relationship (Princess) and defamation. At bench trial the court found Fountainhead privileged generally but that two statements were defamatory per se; it awarded $15,000 general damages, denied special and punitive damages, and denied Burton’s post-trial motion to amend to add a mid‑trial republication claim.
- The superior court concluded Burton’s termination resulted from his refusal/inability to work at other Princess locations (causation), not Fountainhead’s statements; it found the conditional business privilege was abused only with respect to the two defamatory statements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Denial of post‑trial amendment to add mid‑trial republication libel | Burton: mid‑trial letter was a new publication and was tried by consent, so amendment should be allowed | Fountainhead: republication was treated as evidence of failure to cure, not a separate claim; no notice or opportunity to defend a new claim | Denial affirmed — no implied consent to try a new, separate claim; letter was considered as evidence for damages on pleaded claim |
| Existence and scope of privilege for reporting employee concerns to Princess | Burton: Fountainhead’s conduct was motivated by animus/malice, so no privilege | Fountainhead: had a direct business interest in excluding Burton from its property; conditional privilege applies unless abused | Privilege applies (conditional business privilege); court did not clearly err in concluding Fountainhead acted to protect legitimate interests except for two unprivileged defamatory statements |
| Causation for tortious interference / special damages | Burton: Arnold’s statements were a substantial factor in Princess’s decision to terminate and make him ineligible for rehire | Fountainhead: Burton’s inability/refusal to work elsewhere caused termination; no but‑for causation from the defamatory statements | Court: no clear error — termination was caused by Burton’s refusal/inability to work other locations, not the statements; special damages not proved |
| Damages (general, special, punitive) | Burton: award should include lost wages (special damages), higher general damages because of republication, and punitive damages due to reckless/disregard | Fountainhead: general damages appropriate; no special damages causally proved; punitive damages not supported by clear & convincing evidence | Court: $15,000 general damages affirmed; no special damages (economic loss not causally tied to defamation); punitive damages properly denied (recklessness not shown by clear and convincing evidence) |
Key Cases Cited
- Bendix Corp. v. Adams, 610 P.2d 24 (Alaska 1980) (recognizes conditional privilege where defendant has direct interest in contractual relations)
- Winschel v. Brown, 171 P.3d 142 (Alaska 2007) (explains substantial‑factor test for proximate cause)
- Alaskasland.com, LLC v. Cross, 357 P.3d 805 (Alaska 2015) (sets elements of defamation claim, including per se rule and damages framework)
- Beaux v. Jacob, 30 P.3d 90 (Alaska 2001) (discusses standard of review and trial court discretion in damages determinations)
- Wasserman v. Bartholomew, 38 P.3d 1162 (Alaska 2002) (bench‑trial fact‑finder receives deference on credibility and factual findings)
- Tufco, Inc. v. Pac. Envtl. Corp., 113 P.3d 668 (Alaska 2005) (addresses Civil Rule 15(b) and difficulty of proving implied consent to try unstated issues)