427 P.3d 745
Alaska2018Background
- Roberta Sheldon placed Mountain House, LLC and other assets into a revocable trust naming her three children Holly, Robert, and Kate as beneficiaries and naming Robert as successor trustee; the trust included a penalty clause to disinherit anyone who contested the trust.
- After Roberta’s death, disputes arose over Robert’s administration and distribution of trust assets; Holly and her company, Sheldon Air Service, LLC (SAS), sued Robert individually and as trustee in 2015.
- The parties mediated in December 2015 before retired Judge Eric Sanders and signed a "Mediator’s Proposal" setting settlement terms and providing in paragraph 11 that any disputes about the Proposal would be "resolved finally and completely by Eric Sanders."
- Holly later asserted the Proposal was not a binding settlement (claiming she thought it was only a proposal and lacked information), and sought further litigation and discovery; Robert treated the submissions to Sanders as arbitration and asked Sanders to decide whether a binding settlement existed.
- Sanders concluded in February 2016 that the parties had reached a binding settlement and directed execution of a mutual release; the superior court confirmed Sanders’s decision, entered final judgment, denied Holly’s petition to review trustee compensation under AS 13.36.055 as moot, and awarded Robert enhanced Rule 82 attorney’s fees for Holly’s post-mediation conduct.
Issues
| Issue | Plaintiff's Argument (Holly) | Defendant's Argument (Robert) | Held |
|---|---|---|---|
| Whether Sanders could decide if the Mediator’s Proposal was a binding settlement (i.e., whether arbitrator had authority) | Holly: Arbitrator lacked authority to decide enforceability; she participated only in mediation and reserved rights | Robert: Paragraph 11 delegated disputes to Sanders; Holly implicitly submitted the dispute and waived any challenge by participating | Court: Holly forfeited timely objection to arbitrator’s authority by participating and awaiting Sanders’s decision; superior court properly confirmed Sanders’s arbitration decision |
| Whether the settlement was induced by fraud or lack of informed consent | Holly: Robert withheld material trust information so consent was not justifiable | Robert: Holly knew costs existed and still agreed; no justifiable reliance on alleged nondisclosure | Court: Record supports Sanders’s finding Holly’s consent was not vitiated by fraud; settlement enforceable |
| Whether superior court should have entertained Holly’s AS 13.36.055 petition to review trustee compensation after final judgment | Holly: Court should review trustee compensation and fees under AS 13.36.055 | Robert: Final judgment settling all claims ended the case; petition should be in separate proceeding | Court: Final judgment disposed of the case; court did not abuse discretion in requiring separate proceeding for AS 13.36.055 review |
| Whether enhanced attorney’s fees under Alaska R. Civ. P. 82 were proper | Holly: Robert was not prevailing party for post‑mediation phase; fees improper | Robert: He prevailed on post‑mediation litigation; Holly’s post‑mediation conduct was vexatious, warranting enhanced fees | Court: Robert prevailed on post‑mediation matters; superior court did not abuse discretion in awarding enhanced Rule 82 fees due to vexatious post‑mediation litigation |
Key Cases Cited
- Advocate Fin. Grp. v. Poulos, 8 N.E.3d 598 (Ill. App. 2014) (participation in arbitration without timely objection forfeits challenge to arbitrator’s authority)
- McAlpine v. Priddle, 321 P.3d 345 (Alaska 2014) (standard of review for confirmation of arbitration award is de novo)
- State v. Alaska Pub. Emps. Ass’n, 199 P.3d 1161 (Alaska 2008) (courts defer broadly to arbitrator’s factual and legal findings)
- Kollander v. Kollander, 400 P.3d 91 (Alaska 2017) (trial court has broad discretion to award Rule 82 fees and must state reasons when departing from schedule)
- DeSalvo v. Bryant, 42 P.3d 525 (Alaska 2002) (plaintiffs can sometimes achieve litigation goals without formal relief; context matters for prevailing‑party analysis)