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Jim Psenak Construction v. State11/16/2005
NOTICE
Memorandum decisions of this court do not create legal precedent. See Alaska Appellate Rule 214(d). Accordingly, this memorandum decision may not be cited for any proposition of law or as an example of the proper resolution of any issue.
MEMORANDUM OPINION AND JUDGMENT
No. 1228
Before: Bryner, Chief Justice, Matthews, Eastaugh, Fabe, and Carpeneti, Justices.
In this appeal Jim Psenak Construction challenges the decision of an independent hearing officer adjudicating claims of Psenak and the State arising out of the performance of a contract for the reclamation of an abandoned coal mine pit and spoil pile. The major conclusions of the hearing officer were as follows: (1) the State was not in material breach of its contract at the time that it terminated Psenak for default; (2) the State had adequate grounds to terminate Psenak for default; (3) under AS 36.30.687(a)(1) Psenak forfeited all claims relating to the contract because he made intentional misrepresentations to the State as to the quantities of excavation performed; (4) the State should recover the cost of substitute performance in order to have the contract completed in the sum of $206,886; (5) the State should recover the cost of overpayments that it made to Psenak in the sum of $182,806; and (6) the State should recover liquidated damages in the sum of $87,450.
The commissioner of the Department of Transportation and Public Facilities approved the hearing officer's decision without change. On appeal to the superior court, Judge Peter A. Michalski affirmed the decision of the commissioner. Judge Michalski's memorandum opinion and judgment states the relevant facts and resolves most of the contentions now made by Psenak on appeal to this court. We agree with Judge Michalski's opinion and set it out at this point.
MEMORANDUM OPINION AND JUDGMENT
This matter comes before the court on appeal from a determination by the Commissioner of the State of Alaska Department of Transportation and Public Facilities.
The Superior Court has jurisdiction to hear and decide this appeal pursuant to AS 22.10.020(d) (Administrative Appeal) and Alaska Rule of Appellate Procedure 601.
This court, having fully considered the arguments and record on appeal, hereby orders that the decision of the Commissioner is AFFIRMED. The court finds that appellant was properly terminated for default, that AS 36.30.687 (Misrepresentations and fraudulent claims) forfeits all claims appellant has relating to the contract, and that the appellee should recover all costs and damages awarded by the Commissioner.
I. The Issues Presented
The appellant, Jim Psenak Construction ("Psenak"), claimed it was wrongfully terminated for default in its construction contract with appellee, State of Alaska, Department of Transportation and Public Facilities ("State"). Psenak claimed damages arising out of the alleged wrongful termination. The State argued that the termination for default was appropriate and claimed damages against Psenak based on overpayment to Psenak for its performance, liquidated damages, and for the cost of the work Psenak contracted to do, but did not finish. The Commissioner of the Department of Transportation and Public Facilities, adopting the Recommended Decision of the hearing officer in its entirety, ruled in favor of the State. On appeal, Psenak argues that (1) the State was in material breach of the contract at the time of termination, and was therefore barred from terminating Psenak for default, (2) Psenak was not in default at the time the State terminated it, and (3) the hearing officer incorrectly applied AS 3
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