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Jim Psenak Construction v. State11/16/2005
aska Supreme Court memorandum decision for the proposition that AS 36.30.687(a)(1) requires that any allegedly falsified information must have been material and relied on by the State to justify the hearing officer's forfeiture ruling.
a. Did the hearing officer correctly find that Psenak intentionally misrepresented to the State the quantities of excavation it had performed?
As an initial matter, Psenak does not dispute that it presented volume calculations to the State as accumulated quantities. Thus, this inquiry turns on the contract and what it allows in regard to the accumulation of volume calculations between surveys for determining compensation.
Under the terms of the contract, Psenak was paid based upon the amount of cut or excavation it performed. The method of measurement for determining the amounts of excavation that had been produced was set out specifically in the contract in 109-1.02 of the Standard Specifications and provided that "the average end area method" would be employed.
This specification, on its face, does not appear to forbid the accumulation of quantities. However, the contract also provides that:
The Contractor shall measure quantities for items that are paid for by volume or by area and record the quantities in a format acceptable to the Engineer . . . .
Special Provisions, Section 642-3.01 (emphasis added). This provision shows that when Psenak reported accumulated volume calculations, without reporting them as accumulated, to the State against the State's September 13, 1999 instruction that " alculations should reflect only the total cut and fill to date to avoid prior volume calculations," Psenak knowingly and intentionally misrepresented its work to receive payments to which it was not entitled. The contract, at a minimum, provided the State with the right to request quantity measurements in the form it requested. The State requested calculations that reflected how much excavation had occurred from original ground, not the accumulation of the various interim surveys. Psenak knew this was required but instead falsely reported accumulated quantities such that it would receive payment for the numerous times the material was moved within the cut area.
Psenak's behavior was not accidental or negligent. Mr. Psenak specifically instructed Simons to report accumulated quantities to trick the State into overpaying Psenak. This intent to deceive the State is even more apparent when considering that Psenak directed Eric Simons to accumulate quantities and present them in the same format as their previous surveyors, Slana Surveys, which did not accumulate quantities. Thus, it is clear that the hearing officer correctly found that Psenak intentionally misrepresented the quantities of excavation it had performed.
b. Were Psenak's misrepresentations material and relied on by the State?
Psenak cites the Alaska Supreme Court's Memorandum Opinion and Judgment in Azimi-Tabrizi v. State of Alaska, Dept. of Transportation, 2003 WL 23002625, as the first Alaska Supreme Court decision regarding AS 36.30.687. Psenak cites the case for this statement, " bsent reliance, any misrepresentation that occurred was not material, and does not entitle AMAT to relief." Id. at *10.
There are a number of problems with Psenak's citation of this case. For example, by rule he is not allowed to cite summary decisions of the Alaska Supreme Court. See Alaska Rules of Appellate Procedure 214(d). Such decisions are without precedential effect. See id. But even if Alaska law required reliance to affect a forfeiture of claims under AS 36.30.687, clearly there was reliance in this case. The State
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