author: FABE, Justice.

text:
    CITY OF ST. MARY'S, Appellant, v. ST. MARY'S NATIVE CORPORATION and Alaska Commercial Company, Appellees.
    No. S-8963.
    Supreme Court of Alaska.
    Sept. 29, 2000.
    Rehearing Denied Nov. 27, 2000.

      Katherine C. Tank, Perkins Cole, LLP, Anchorage, for Appellant.
    David S. Case, P.C., Copeland, Landye, Bennett & Wolf, LLP, Anchorage, for Appel-lee St. Mary's Native Corporation.
    Gregory A. Miller and Colleen J. Moore, Birch, Horton, Bittner & Cherot, Anchorage, for Appellee Alaska Commercial Company.
    Before MATTHEWS, Chief Justice, EASTAUGH, FABE, BRYNER, and CARPENETI, Justices.
   OPINION

FABE, Justice.

I. INTRODUCTION

In 1986 the voters in St. Mary's approved a three percent sales tax. In implementing the voter-approved tax, the city council exempted transactions exceeding $1,000. In May 1994 the St. Mary's city council repealed that exemption. Because the voters had already approved the three percent tax in 1986, the city council believed that further voter ratification was unnecessary. Alaska Commercial Company and St. Mary's Native Corporation contend that repeal of the exemption was invalid because it was not the subject of a public vote and that notice of the public hearing on the tax was insufficient. Based on these arguments, the superior court invalidated the ordinance repealing the exemption. Because we conclude that a public vote was not required to ratify the repeal of the exemption and that a genuine issue of material fact exists as to whether public notice was sufficient, we reverse.

II, FACTS AND PROCEEDINGS

The citizens of the City of St. Mary's voted in November 1986 to approve this ballot measure: "Shall the City of St. Mary's levy a 8% sales tax?" The ballot measure passed, receiving over sixty percent of the votes. One month later the St. Mary's city council passed Ordinance 86-3, which implemented the voter-approved sales tax. Ordinance 86-3 was more detailed than the original ballot measure and provided for many exemptions. Notably, the ordinance limited application of the three percent tax to the first $1,000 of each sales transaction.

St. Mary's introduced proposed Ordinance 94-4 in April 1994 to eliminate the exemption for sales in excess of $1,000. The council scheduled a public hearing on the ordinance for May 3, 1994. Representatives of Alaska Commercial Company (ACC) and St. Mary's Native Corporation (SMNC) attended the meeting at which the city council set the May 3 hearing. The representatives voiced their opposition to the passage of the proposed ordinance.

St. Mary's took steps to give the public notice of the hearing. In accordance with St. Mary's publication procedures, City Manager Walton Smith directed the police to post copies of proposed Ordinance 94-4 and an agenda for the May 3 hearing at the city offices, post office, school, and two local stores, including ACC's store. An officer posted these documents as directed. Smith also faxed copies of proposed Ordinance 94-4 and the meeting agenda to ACC's attorney before the May 3 meeting. The city did not publish the proposed ordinance or notice of the meeting in any newspaper.

The St. Mary's city council held the May 8 meeting as scheduled. The members present passed Ordinance 94-4 unanimously. St. Mary's did not hold a popular vote to ratify the ordinance. ~

SMNC leased to ACC two commercial properties subject to the St. Mary's sales tax. The leases exceeded $1,000 per month, but SMNC and ACC refused to pay the sales tax on either lease. The city commenced an action in October 1995 to collect back taxes. It also sought a declaratory judgment that Ordinance 94-4 was lawful.

SMNC and ACC moved for partial summary judgment in May 1996. They first argued that Ordinance 94-4 was invalid because it had not been ratified by the voters pursuant to AS 29.45.670. That provision requires that a majority of voters ratify an ordinance enacting "a new sales and use tax or an increase in the rate of levy of a sales tax." Alternatively, they contended that St. Mary's failed to publish notice of the hearing for Ordinance 94-4 in the newspaper of general circulation in St. Mary's, the Tundra Drums, as required by AS 29.25.020(b)(8) St. Mary's responded by arguing that its tax was not "new" and that it did not "increase the rate of levy" and therefore the ordinance did not require voter approval. It also claimed to have complied with the notice requirements. Finally, St. Mary's argued that SMNC and ACC lacked standing to challenge Ordinance 94-4 on notice grounds because they had actual notice of the hearing.

The superior court granted summary judgment to ACC and SMNC. The court reasoned that Ordinance 94-4 was either a new tax or an increase in the rate of levy of a tax that required voter ratification. The superi- or court reasoned alternatively that St. Mary's failed to satisfy AS 29.25.020(b)(8)'s publication requirement. The court concluded that St. Mary's failed to produce admissible evidence to prove that it properly posted the notices of the ordinance and hearing date. The court also concluded as a matter of law that the Tundra Drums was a newspaper of general circulation in St. Mary's, thus requiring St. Mary's to publish a summary of Ordinance 94-4 in it. The court entered judgment, and St. Mary's appeals.

III. STANDARD OF REVIEW

We review a grant of summary judgment de novo. We will uphold a grant of summary judgment when the record presents no genuine issue of material fact and one party is entitled to judgment as a matter of law. In making this determination, we draw all reasonable inferences of fact in favor of the non-moving party. We review a lower court's resolution of statutory interpretation issues de novo.

IV. DISCUSSION

A. Alaska Statute 29.45.670 Did Not Require the Voters of St. Mary's to Ratify Ordinance 91-4.

Whether AS 29.45.6740 required the voters to ratify Ordinance 94-4's repeal of the exemption for transactions over $1,000 is a question of statutory construction. Alaska Statute 29.45.670 provides: "A new sales and use tax or an increase in the rate of levy of a sales tax approved by ordinance does not take effect until ratified by a majority of the voters at an election." Therefore, if removing the exemption for transactions exceeding $1,000 can be considered either a "new" sales tax or "an increase in the rate of levy of a sales tax," St. Mary's would have been required to submit the ordinance to a vote, and failure to do so would invalidate Ordinance 94-4.

1. Ordinance 94-4 did not increase the "rate of levy."

The "rate of levy" is the fraction that, when multiplied by the value of the transaction or property subject to the tax, determines the amount of tax to be assessed. The classification and valuation of property and transactions to be taxed are determinations independent of quantifying the "rate of «levy." Alaska Statute 29.45.650(a) permits municipalities to grant tax exemptions by ordinance without voter ratification and to decide which transactions may be taxed. Accordingly, repealing the exemption on the second $1,000 of a $2,000 transaction is not an increase in the rate of levy, but an application of the same rate of levy to a portion of a transaction previously immune. Because Ordinance 94-4 simply subjected previously exempt portions of transactions to the original three percent sales tax, the ordinance did not increase the rate of levy of the tax.

ACC and SMNC argue that the term "levy" implies an assessment or collection of tax dollars and not just prescription of the percentage rate at which assets or transactions will be taxed. According to ACC and SMNC, because Ordinance 94-4 applies a three percent tax to the entire transaction, the amount of the tax has jumped, resulting in an increase in the "rate of levy."

ACC and SMNC rely on cases that refer to "rate" as the process of the classification, valuation, and assessment of tax on property or income. But these cases fail to define specifically the term "rate of levy." ACC and SMNC then define the term "levy" as "[tlo assess; raise; execute; exact; tax; collect; gather; take up; seize." ACC and SMNC cobble these definitions of "rate" and "levy" together to conclude that the " 'rate of levy of a sales tax' must refer to the entire method of determining the amount of tax due."

This interpretation of the phrase "rate of levy," however, is erroneous. As explained above, the "rate of levy" is the percentage that, when multiplied by the value of the taxable transaction or property, determines the amount of tax owed. Accordingly, St. Mary's elimination of its exemption by ordinance simply subjected transactions exceeding $1,000 to the existing "rate of levy” of three percent.

The Arkansas Supreme Court's resolution of a similar issue is persuasive. In Morley v. Remmel, the Arkansas Supreme Court considered whether an act of the legislature eliminating a tax deduction violated a provision of the Arkansas constitution. That provision states that "InJone of the rates for property, excise, privilege or personal taxes, now levied shall be increased" without either voter approval or approval by a three-fourths majority of the legislature. In upholding the legislature's repeal of the deduction, the court differentiated between the rate of taxes and the valuation of the property or transaction to be taxed. The court concluded that the elimination of the deduction «did not increase the rate of taxation but simply subjected more income to the same rate of taxation, an act that was within the legislature's power. Moreover, the court reasoned that equating the rate of taxation with the amount of taxation was erroneous and unreasonably tied the hands of the legislature.

The Morley decision supports St. Mary's contention that there is a distinction between increasing the rate of levy and repealing a specifically granted exemption. Because repealing the exemption for transactions over $1,000 did not increase the rate of levy, voter ratification of Ordinance 94-4 was not required unless it could be considered a "new" tax.

2. Ordinance 94-4 is not a "new" tax.

In the alternative, ACC argues that applying the sales tax to a previously exempt transaction constitutes a "new" tax requiring voter approval. But Ordinance 94-4 did not create a new tax; the city simply exercised ifs statutory authority to remove an exemption to the tax previously approved by the voters. ACC and SMNC argue, however, that AS 29.45.650(a) only grants local governments the power to reduce taxes without voter approval, not increase them. We reject this contention.

Alaska Statute 29.45.650(a) grants a municipality the power to grant an exemption to a sales tax by ordinance without voter approval. We conclude that this grant of power implies the power to repeal such an exemption by ordinance. As one commentator has observed:

Specific grant of power to repeal ordinances, however, ordinarily is not necessary since it is the general rule that power to enact ordinances implies power, unless otherwise provided in the grant, to repeal them. It is patently obvious that the effectiveness of any legislative body would be entirely destroyed if the power to amend or repeal its legislative acts were taken away from it.[]

Moreover, Alaska's constitution and our pri- or case law require us to interpret AS 29.45.650(a) in favor of the broad power of municipal governments. We have concluded that article X, section 1 of the Alaska Constitution restrains us from implying limitations "on the taxing authority of a municipality where none are expressed. We therefore conclude that when a local government grants an exemption by ordinance and the exemption is not subjected to a public vote, it may repeal that exemption by ordinance without a public vote.

Moreover, we conclude that an ordinance repealing a sales tax exemption is not a "new" sales tax requiring voter ratification. Because Ordinance 94-4 did not create the St. Mary's sales tax, but simply modified it, it was not "new" within the meaning of AS 29.45.670. ACC and SMNC argue that because Ordinance 94-4 caused a change in the tax schedule, this change must be considered "new." But ACC's and SMNC's interpretation is too broad. If we were to accept ACC's and SMNC's definition, any alteration of the sales tax would require voter ratification. Not only would this procedure make the refinement of municipal tax schemes cumbersome, but it would also render the phrase "increase in the rate of levy" in AS 29.45.670 superfluous. We construe a statute "so that no part will be inoperative or superfluous, void or insignificant." We conclude that when a municipality repeals a sales tax exemption it does not create a "new" tax for the purposes of AS 29.45.670.

Because Ordinance 94-4 neither increased "the rate of levy" of a sales tax nor created a "new" sales tax, voter ratification of the ordinance was not required. Moreover, no genuine issue of material fact remains with respect to whether a public vote is required. We therefore direct the superior court to enter summary judgment in favor of the City of St. Mary's with respect to the voter ratification requirement.

B. A Genwine Issue of Material Fact Exists as to Whether St. Mary's Complied with the Public Notice Requirements.

Even if AS 29.45.650 and .670 did not require St. Mary's to submit Ordinance 94-4 to a public vote, the city was nevertheless required to provide adequate notice of the public hearing regarding adoption of the ordinance that repealed the exemption for transactions exceeding $1,000. Underlying our analysis of whether St. Mary's provided adequate notice is the presumption that the proceedings of a local government are valid. Accordingly, ACC and SMNC have the burden of establishing that St. Mary's did not provide adequate notice.

Alaska Statute 29.25.020(b)(8) requires notice of a hearing before the adoption of a new ordinance: "At least five days before the public hearing a summary of the ordinance shall be published together with a notice of the time and place for the hearing." Alaska Statute 29.71.800(18) defines "published" as "appearing at least once in a newspaper of general circulation distributed in the municipality, or if there is no newspaper of general circulation distributed in the municipality, posting in three public places for at least five days...." Accordingly, ACC and SMNC can overcome the presumption by demonstrating that a newspaper of general cireulation exists in St. Mary's and that St. Mary's failed to publish notice in that newspaper. St. Mary's concedes that it did not publish notice in any newspaper, including the Tundra Drums. ACC and SMNC contend that the Tundra Drums is a newspaper of general circulation in St. Mary's and that by failing to publish notice in it the city failed to comply with AS 29.25.020(b)(8).

1. ACC and SMNC have standing to argue that St. Mary's did not comply with the motice requirements despite having actual notice of the public hearing.

As a threshold matter, we must ascertain whether ACC and SMNC have standing to raise the argument that notice of the public hearing on Ordinance 94-4 was insufficient. St. Mary's contends that because ACC and SMNC had actual notice of the May 3, 1994 hearing, they lack standing to contest the alleged lack of proper notice.

But St. Mary's argument rests on the assertion that the challenged notice procedure did not injure ACC and SMNC because they had actual notice. This argument oversimplifies Alaska's "interest-injury" test for standing. "[A] party asserting standing must demonstrate a sufficient personal stake in the outcome of the controversy to ensure the requisite adversity." If the ordinance is valid, ACC and SMNC's taxes will rise substantially. This possibility is a sufficient personal stake in the outcome to provide ACC and SMNC with standing.

Moreover, ACC and SMNC have standing under Alaska's "taxpayer-citizen" test. "Taxpayer-citizen status is a sufficient basis to challenge allegedly illegal governmental conduct when the issues raised are of significant public concern and when the taxpayer-plaintiff is a suitable advocate of the issues involved in the lawsuit." ACC and SMNC are certainly interested taxpayers. Although a court may properly deny standing to a taxpayer-plaintiff where "there is a plaintiff more directly affected by the challenged conduct in question" who is a more likely litigant, St. Mary's does not indicate an appropriate alternative plaintiff who had no notice of the hearing. We conclude that ACC and SMNC's actual notice of the May 3, 1994 hearing does not preclude them from having standing in this case.

2. Publication in a newspaper of general circulation is mandatory.

We next consider St. Mary's argument that the publication requirement is directory rather than mandatory. If publication is mandatory, then St. Mary's must strictly comply with the notice provision. If publication is directory, then the ordinance is valid if St. Mary's substantially complied with the publication requirement. To make this determination, we consider three primary factors: (1) whether the words of the statute compel us to consider the requirement mandatory, (2) whether the statute is "designed to protect taxpayers in their dealings with the taxing authority" or was designed to serve as a guideline "for the orderly conduct of public business," and (8) whether "serious practical consequences will follow" from characterizing the statutory guidelines as mandatory.

First, we consider whether the statute contains "negative words that signify that the acts shall not be done," which would indicate that "non-compliance invalidates all subsequent attempts at compliance. If such words of limitation are present, we are constrained to consider the provision mandatory. But the publication requirement contains no such words, stating merely that "a summary of the ordinance shall be published." Because the express words of limitation contemplated by the court in City of Yakutat v. Ryman are absent, we must examine the other factors.

Second, we are likely to consider as mandatory those "statutory requirements designed to protect taxpayers in their dealings with the taxing authority." While the publication requirement applies to every ordinance, this case involves a tax ordinance. And our case law supports the proposition that statutory notice provisions with respect to tax liability "must be strictly construed." On the other hand "[sItatutory requirements which are intended to serve primarily as guidelines for the orderly conduct of public business are more likely to be considered directory." In this context, the publication requirement is more like a statute requiring notice of tax liability. The publication requirement prescribes the method municipalities must use for communicating with the public. Adequate public notice is the way that taxpayers learn of potential changes in their tax liability. Therefore, the publication requirement is more than an administrative guideline; it is an integral part of the relationship between a municipality and its citizens.

Last, we consider the "serious practical consequences [that] will follow from characterizing the statutory deadlines in this case as mandatory." Characterizing the requirements of AS 29.25.020(b)(8)'s publication requirement as mandatory has serious consequences. Because St. Mary's has an established policy of posting public notices, classifying the requirement as mandatory could call into question the validity of other ordinances passed by the City of St. Mary's since 1994. Moreover, there is no evidence in the record that other bush communities publish notice in the Tundra Drums.

But considering the publication requirement to be directory has serious consequences as well. Requiring publication of ordinances serves important policy goals because it helps facilitate the local government process. As one commentator has observed:

[A] publication requirement operates to avoid hasty or ill-considered action. Although not an insurance against local maladministration, action by ordinance is a reflective process that affords an opportunity for expression of opinion; this manifestly is the rationale of statutory requirements of publication or notice of pendency of ordinances. Other purposes of a publication requirement may be to advise those interested that the matter is up for consideration, or to inform them with reference to any ordinance that has been adopted so that they may regulate their actions and conduct accordingly.[]

Indeed, the publication requirement plays such an important role in local government that many jurisdictions have held that, when statutes require publication of ordinances in a newspaper of general circulation and such a paper exists in a community, publication of an ordinance in that newspaper is mandatory.

We conclude that the better approach is to declare the publication requirement mandatory rather than directory. In order to satisfy the publication requirement of AS 29.45.670, local governments must publish notice in a newspaper of general circulation when such a newspaper exists in a communi-1337.

3. A genwine issue of fact exists as to whether the Tundra Drums is a newspaper of general circulation in St. Mary's.

We next address whether there was a newspaper of general circulation in St. Mary's in 1994. The superior court agreed with ACC and SMNC that the Tundra Drums was, as a matter of law, a newspaper of general cireulation in St. Mary's. The superior court reasoned that the city's failure to place a notice in the Tundra Drums resulted in inadequate notice of the public hearing.

In Moore v. State, we determined that a newspaper is one of "general cireulation" in a community when it "contains news of general interest to the community and reaches a diverse readership."

In support of its contention that the Tundra Drums satisfies the "general interest" prong of the Moore test, ACC and SMNC offered the affidavit of Bonnie Jack, the circulation manager for the Tundra Drums. Jack stated that "[the Tundra Drums contains news on a variety of subjects of general interest including, but not limited to, public notices, news articles regarding events in various village communities including St. Mary's, a calendar of events in various villages, listings of employment opportunities, and various news articles concerning relevant political events."

ACC and SMNC also offered the affidavits of St. Mary's residents Raphael Mike, a member of the SMNC Board of Directors, and Lawrence Mike, the President of SMNC. Both asserted that the paper contains news of general interest to the people of St. Mary's.

The evidence offered in support of the second, "diverse readership" prong of the Moore test is less clear. Jack's affidavit states that in one week in April 1996, almost two years after the May 3, 1994 hearing on Ordinance 94-4, just over 100 copies of the Tundra Drums were sent to St. Mary's for sale. Twenty-one of those copies were returned. In March and July 1994, approximately 100 copies were sent to St. Mary's, with no report of how many were returned.

Although ACC and SMNC's evidence generates a genuine issue of material fact as to whether the Tundra Drums was a newspaper of general circulation in St. Mary's in 1994, it is not sufficient to support the trial court's conclusion that the newspaper is one of general circulation as a matter of law. The affidavits do not establish that the distribution was widespread at the time of the public hearing, and there was no evidence that anyone in St. Mary's subscribes to the Tundra Drums. And a St. Mary's ordi-rance specifies that the city shall publish notice by posting in public places, which may reflect the council's view that there is not a newspaper of general circulation in St. Mary's. The Tundra Drums is delivered only to St. Mary's two stores and the post office. Also, there is no evidence in the record that other bush communities publish their ordinances in the Tundra Drums. As noted, AS 29.71.800(18) contemplates that there may be no newspaper of general cireu-lation distributed in particular municipalities. Under such cireumstances, the statute calls for posting in three public places. In our view, in cases where it is fairly and reasonably debatable as to whether there is a newspaper of general circulation distributed in a community, the presumption of government regularity requires deference be afforded to that position which upholds the ordinance.

Finally, our case law on publication requirements reflects deference to the government's decision whether a newspaper is one of "general cireulation." In Moore, we concluded that the Division of Lands satisfied a publication requirement when it decided to publish notice in the Anchorage Times for a land sale in the Kachemak Bay area. In that case we relied on evidence that 1830 of Homer's 3,500 residents subscribed to the Anchorage Times to conclude that it was a paper of general circulation in Homer. But Moore should not be interpreted as setting a threshold ratio of the number of papers to the number of residents required to establish that a newspaper is one of general cireulation. Instead, Moore stands for the principle that courts should defer to a government's judgment regarding whether a newspaper is one of general circulation. In Moore, we concluded that the Anchorage Times was a newspaper of general circulation despite the fact that a relatively small percentage of Homer residents subscribed to it. Nothing in Moore suggests that if the Division of Lands had decided that the cireulation of the Anchorage Times in Homer was insufficient to make it a newspaper of general cireulation, such a determination would not also have been upheld.

In this case, St. Mary's decision not to publish the notice in the Tundra Drums does not appear to be an attempt to frustrate public notice. Instead, St. Mary's acted according to its established publication procedures, which require posting at three locations, including the city offices, for at least five days. Here, the police posted copies of the ordinance and the agenda for the May 3 hearing at the city offices, the post office, the school, and two local stores, including ACC.

Because courts should defer to the judgment of local government as to what constitutes a "newspaper of general circulation" in the community, and because a genuine issue of fact exists as to whether the Tundra Drums was a newspaper of general cireulation in St. Mary's, we conclude that the superior court erred in deciding this issue as a matter of law.

4. If St. Mary's need mot have placed a public notice in the Tundra Drums, public notice was otherwise proper.

If St. Mary's was not required to publish notice in the Tundra Drums, it would have been required by statute to post notices "in three public places for at least five days." The superior court found that St. Mary's failed to produce admissible evidence of actual postings and thus ruled that the notice provided was ineffective and in violation of the statutory posting requirement. We disagree.

Although ACC and SMNC had the burden to overcome the presumption that the proceedings of this municipal government were conducted in accordance with the law, St. Mary's did produce evidence supporting the validity of its notice. City manager Smith stated in an affidavit that he directed police officer James Webb to post the notices. The minutes of the May 3, 1994 meeting also indicate that the notices were posted and re-posted after having been torn down at the post office and the ACC store. Given this evidence, and the fact that ACC and SMNC never made a prima facie showing that the posting of notice was inadequate, the superi- or court erred in concluding that St. Mary's failed to post adequate notice as an alternative basis for granting ACC and SMNC summary judgment.

V. CONCLUSION

Because St. Mary's neither created a new sales tax nor increased the rate of levy of its sales tax, AS 29.45.670 did not require a public vote ratifying Ordinance 94-4. As a result, the superior court erred when it invalidated Ordinance 94-4 on this basis. We also disagree with the superior court's conclusion in the alternative that no genuine issue of material fact existed as to whether St. Mary's provided adequate public notice of the hearing on Ordinance 94-4, A genuine issue of material fact exists as to whether the Tundra Drums was a newspaper of general circulation in St. Mary's in 1994. We therefore REVERSE the grant of summary judgment and REMAND for further proceedings consistent with this opinion.

      . AS 29.45.670.

      . AS 29.25.020(b)(3) prescribes the requirements for a notice of a hearing adopting a new ordinance: "[Alt least five days before the public hearing a summary of the ordinance shall be published together with a notice of the time and place for the hearing." AS 29.71.800(18) defines "published" as "appearing at least once in a newspaper of general circulation distributed in the municipality or, if there is no newspaper of general circulation distributed in the municipality, posting in three public places for at least five days."

      . See Mount Juneau Enters., Inc. v. City & Borough of Juneau, 923 P.2d 768, 772-173 (Alaska 1996).

      . See Semlek v. National Bank of Alaska, 458 P.2d 1003, 1005-06 (Alaska 1969).

      . See Zeman v. Lufthansa German Airlines, 699 P.2d 1274, 1280 (Alaska 1985).

      . See Boone v. Gipson, 920 P.2d 746, 748 (Alaska 1996).

      . See Dennehy v. Dep't of Revenue, 305 Or. 595, 756 P.2d 13, 19-20 (1988).

      . See Trollwood Village Limited Partnership v. Cass County Bd. of County Comm'rs, 557 N.W.2d 732, 734-35 (N.D.1996) ("Section 57-02-01(13), N.D.C.C., also defines 'taxable valuation' as 'the valuation remaining after deducting exemptions and making other reductions from the original assessed valuation, and is the valuation upon which the rate of levy finally is computed and against which the taxes finally are extended.' ").

      . "[A] borough may levy and collect a sales tax on sales, rents, and on services provided in the borough. The sales tax may apply to any or all of these sources. Exemptions may be granted by ordinance." AS 29.45.650(a).

      . See Boyer v. Boyer, 113 U.S. 689, 695, 5 S.Ct. 706, 28 L.Ed. 1089 (1885); General Elec. Credit Corp. v. Oregon State Tax Comm'n, 231 Or. 570, 373 P.2d 974, 980 (1962); State v. Wiley, 177 Wash. 65, 31 P.2d 539, 543 (1934).

      . See Boyer, 113 U.S. at 695, 5 S.Ct. 706; General Elec., 373 P.2d at 980; Wiley, 31 P.2d at 543.

      . Black's Law Dictionary 629 (abr. 6th ed.1991).

      . See Dennehy, 756 P.2d at 19-20; Trollwood, 557 N.W.2d at 734-35.

      . 215 Ark. 434, 221 S.W.2d 51 (1949).

      . Id. at 52-53.

      . Id. at 53.

      . See id. at 54-55.

      . See id. at 57.

      . See AS 29.45.650(a) ("Exemptions may be granted by ordinance."). ,

      . 6 Eugene McQuillin, The Law of Municipal Corporations § 21.10, at 261 (rev.3d ed.1998) (footnotes omitted).

      . 'The purpose of this article is to provide for maximum. local self-government with a minimum of local government units, and to prevent duplication of tax-levying jurisdictions. A liberal construction shall be given to the powers of local government units." Alaska Const. art. X, § 1.

      . Liberati v. Bristol Bay Borough, 584 P.2d 1115, 1121 (Alaska 1978).

      . Alascom, Inc. v. North Slope Borough, Bd. of Equalization, 659 P.2d 1175, 1178 n. 5 (Alaska 1983) (citing 2A C. Sands, Statutes & Statutory Construction § 46.06 (4th ed.1973)).

      . Although the parties dispute whether the inclusion of the exemption in Ordinance 86-3 affected the voter approval of the sales tax in 1986, this factual dispute is immaterial to the resolution of this case. The language the voters approved in the ballot measure said nothing of the sales tax exemption, and asked simply: "Shall the City of St. Mary's levy a 3% sales tax?" It was only after the voters approved the three percent tax levy that the city council passed Ordinance 86-3 with its exemptions. Once the voters approved the three percent sales tax, the city council was free to exempt certain transactions, and conversely repeal those exemptions, by ordinance without a public vote.

      . See Liberati, 584 P.2d at 1118. In Liberati we considered whether a local government had held an appropriate public hearing or was required to hold an additional hearing after amending a proposed sales tax ordinance. Id. at 1118. We stated that '"[t}here is a presumption that proceedings of the governing body of a municipality have been conducted in accordance with law." Id. at 1118 (citing Antieau, Municipal Corporation Law § 4.19, at 4-38 (1978)).

      . Kleven v. Yukon-Koyukuk Sch. Dist., 853 P.2d 518, 525 (Alaska 1993).

      . Id. (quoting Hoblit v. Commissioner of Natural Resources, 678 P.2d 1337, 1340 (Alaska 1984) (internal punctuation omitted)).

      . Id.

      . Id. at 526 (citing Trustees for Alaska v. State, Dep't of Natural Resources, 736 P.2d 324, 329 (Alaska 1987); State v. Lewis, 559 P.2d 630, 635 (Alaska 1977), cert. denied, 432 U.S. 901, 97 S.Ct. 2943, 53 L.Ed.2d 1073 (1977)).

      . Id.

      . See City of Yakutat v. Ryman, 654 P.2d 785, 789-91 (Alaska 1982).

      . See id.

      . Id.

      . Id. at 789.

      . See id.

      . AS 29.25.020(b)(3).

      . Ryman, 654 P.2d at 790.

      . Id.;see Stephens v. Rogers Constr. Co., 411 P.2d 205, 207 (Alaska 1966); Johnson v. Miller, 391 P.2d 437, 440-41 (Alaska 1964).

      . Ryman, 654 P.2d at 790.

      . Id. at 791.

      . 5 Eugene McQuillin, Municipal Corporations § 16.76, at 372 (footnotes omitted).

      . See Town of Beverly Shores Plan Comm'n v. Enright, 463 N.E.2d 246, 248 (Ind.1984); Board of Zoning Appeals of Monroe County v. Berndt, 502 N.E.2d 1349, 1352 (Ind.App.1987); State v. Allen, 361 Mo. 963, 237 S.W.2d 489, 490 (1951); Lower Gwynedd Township v. Gwynedd Properties, Inc., 527 Pa. 324, 591 A.2d 285, 287-88 (1991) ("The right of the public to participate in the enactment of municipal ordinances required that municipalities strictly follow the prescribed notice procedures in order to validate any ensuing legislation."); Wilgus v. City of Murfreesboro, 532 S.W.2d 50, 52 (Tenn.App.1975); City of Bells v. Greater Texoma Util. Auth., 790 S.W.2d 6, 13 (Tex.App.1990).

      . See AS 29.71.800(18).

      . 553 P.2d 8 (Alaska 1976).

      . Id. at 21.

      . This evidence was not sufficient to satisfy the requirement that the newspaper must "reach[ ] a diverse readership." Moore, 553 P.2d at 21. In Moore, copies of the Anchorage Times were delivered to peoples' homes. See id. But here there was no evidence that a diverse readership actually purchased the Tundra Drums; ACC and SMNC only offered affidavits that the papers were delivered to St. Mary's stores and comparatively few were returned. Because the trial court, was required to view the evidence in light most favorable to the non-moving party, see Zeman v. Lufthansa German Airlines, 699 P.2d 1274, 1280 (Alaska 1985), it should not have presumed that the papers reached a diverse St. Mary's readership.

      . It is ironic that the Tundra Drums was only available in St. Mary's at the ACC store, Yukon Traders, and the post office-the very places that St. Mary's claims to have posted its public notices. Accordingly, any person acquiring the Tundra Drums in the days before the May 3, 1994 hearing would have had the opportunity to see the notice of the meeting in these public places.

      . See supra pp. 11-12.

      . Moore, 553 P.2d at 21.

      . Id.

      . See id.

      . See id.

      . In Moore, we implied that The Kenai Cheecha-ko News was also a newspaper of general circulation in the vicinity. Id. at 21.

      . AS 29.71.800(18).

      . See Liberati v. Bristol Bay Borough, 584 P.2d 1115, 1118 (Alaska 1978).


source: Caselaw Access Project

author: CARPENETI, Justice.

license: Public Domain

text:
    Lance ANDERSON, Appellant, v. TUBOSCOPE VETCO, INC. and Olsten Staffing Services, Appellees.
    No. S-9080.
    Supreme Court of Alaska.
    Oct. 6, 2000.

      Michael J. Schneider, Anchorage, and John C. Dittman, Anchorage, for Appellant.
    Robert L. Griffin and Linda J. Hiemer, Law Offices of Robert L. Griffin, Anchorage, for Appellees.
    Before MATTHEWS, Chief Justice, EASTAUGH, FABE, BRYNER, and CARPENETI, Justices.
   OPINION

CARPENETI, Justice.

I. INTRODUCTION

Lance Anderson appeals the superior court's grant of summary judgment to Tubo-scope Veteo, Inc. (Tuboscope) and Olsten Staffing Services (Olsten) on Anderson's negligence claim against Tuboscope for injuries he suffered while working as a temporary employee at Tuboscope's plant. Anderson argues that the superior court erred in ruling that Tuboscope was Anderson's special employer and was therefore exempted from suit by the exclusive remedy provision of the Alaska Workers' Compensation Act. Anderson further argues that the superior court erred in failing to assess a portion of Tuboscope's costs and fees against Olsten as a partially subrogated insurer.

Because the superior court ruled correctly on both the summary judgment and the attorney's fees issues, we affirm.

II, FACTS AND PROCEEDINGS

A. Facts

In 1991 Olsten and Tuboscope entered into a continuing contract agreement for Ol-sten to provide temporary employees to Tu-boscope to assist Tuboscope in its business of providing oilfield-related materials and services. Olsten provided Tuboscope with various categories of temporary employees, including "personnel transfer plan" (PTP) employees. Tuboscope recruited, hired, placed, and directly and exclusively supervised PTP employees; Olsten provided the payroll administration, benefits, and workers' compensation coverage for PTP employees.

In October 1994 Tuboscope hired Anderson as a PTP employee. Pursuant to the provisions governing PTP employees laid out in Tuboscope and, Olsten's contract, Anderson was recruited, interviewed, and placed in his position by Tuboscope. Tubo-scope also set Anderson's wages and had the authority to fire him without the prior approval or consent of Olsten.

Anderson's daily work activities at the Tu-boscope job site were supervised by Tubo-seope employees. His direct supervisor was Tuboscope employee Frank McAnally.

On December 80, 1994, Anderson was injured at Tuboscope's job site in Kenai when Ronald Finch, a Tuboscope employee, picked up some drill pipe in a manner that caused Anderson to fall and hurt his shoulder. Anderson's injury occurred while he was performing job duties directed and supervised by McAnally. Subsequent to his injury, Anderson received workers' compensation benefits through the policy secured by Ol-sten. .

B. Proceedings

In December 1996 Anderson filed a complaint against Tuboscope in superior court. Tuboscope filed a third party complaint against Olsten in April 1997 to enforce its agreement with Olsten that Olsten would hold harmless and indemnify Tuboscope.

The parties cross-moved for summary judgment, seeking a determination as to whether the exclusivity provisions of the Alaska Workers' Compensation Act (the Act) barred Anderson's suit. Olsten later filed an opposition to Anderson's motion for summary judgment, alleging that Tuboscope was a joint or dual employer of Anderson and was therefore immune from common law tort liability.

On March 27, 1998, the superior court granted Tuboscope's motion for summary judgment, finding that an implied contract of employment existed between Anderson and Tuboscope and that Anderson's claims against Tuboscope were consequently barred by the exclusive remedy provision of the Act. The superior court also assessed $5,693.70 in costs and attorney's fees against Anderson, declining to rule that Olsten was liable for a portion of the costs and fees. Anderson now appeals.

III, STANDARD OF REVIEW

We review a grant of summary judgment de novo. The question of whether the superior court erred in failing to enter a portion of Tuboscope's costs and fees against Olsten as a partially subrogated insurer is a legal question that we also review de novo.

IV. DISCUSSION

A. As Anderson's Employer, Tuboscope Is Immune from Tort Liability under the Exclusive Remedy Provision of the Alaska Workers' Compensation Act.

The primary question raised in this appeal is whether a labor service company's employee, who is assigned to a temporary employer, makes a contract of hire with the temporary employer and thus comes under the exclusive remedy provision of Alaska's Workers' Compensation Act. Anderson argues that Tubo-scope is subject to tort Hability for his injury because he is not a Tuboscope employee. We disagree. Temporary employees are employees of the temporary employer for workers' compensation purposes as a matter of law.

1. Tuboscope was Anderson's employer at the time of his injury .

Although this is a case of first impression in Alaska, the question of a temporary employee's ability to sue a temporary employer in tort has been addressed in numerous jurisdictions.

Under the "special employment" doctrine, temporary agency employees are employees of both the temporary agency and the company to which they are assigned. This doctrine states that if a labor broker contracts to provide the services of a temporary employee to a customer company, which serves as a temporary employer, the labor broker is considered a "general employer" and the company is considered a "special employer." As a special employer, the temporary employer is considered to have the same rights and privileges as a regular employer for workers' compensation purposes. Consequently, the exclusive remedy provision of the workers' compensation act generally precludes a temporary employee from suing the temporary employer for negligence in connection with a work-related activity.

In his treatise on workers' compensation law, Professor Larson sets forth a commonly used test for determining whether a special employer is liable for workers' compensation (and therefore immune from tort liability):

When a general employer lends an employee to a special employer, the special employer becomes liable for workmen's compensation only if: |
(a) the employee has made a contract of hire, express or implied, with the special employer; _
(b) the work being done is essentially that of the special employer; and
(c) the special employer has the right to control the details of the work.
When all three of the above conditions are satisfied in relation to both employers, both employers are liable for workmen's compensation.

Although we have: not previously addressed the question at issue in the instant case, we have recognized and used Professor Larson's test in other contexts. In keeping with our earlier decisions, we today adopt this test as the standard for determining workers' compensation liability in the temporary employee context. We hold that Tubo-scope meets all three requirements of this test.

a. Anderson had an implied contract of employment with Tuboscope.

The very nature of the contract between Olsten and Tuboscope suggests that an implied employment contract existed between Tuboscope and Anderson. The contract between Olsten and Tuboscope regarding PTP employees effectively provided that Tuboscope would interview, hire, train, and employ the PTP employees, while Olsten would provide payroll administration and workers' compensation insurance premiums. Under this arrangement, Anderson's primary employment contact from the time of his initial interview was with Tuboscope. He had no contact with Olsten whatsoever except to fill out forms for them and receive his paycheck from them. When he worked, all of his assignments were given to him by Tuboscope management and were performed for the sole benefit of Tuboscope, not Olsten. Aside from the fact that Olsten performed administrative tasks for Tuboscope regarding his employment, there is no essential difference between Anderson and a regular Tubo-scope employee.

If the temporary employer hires, trains, employs, directs, and reserves the right to terminate the temporary employee, and the labor broker merely acts in the capacity of a payroll and benefits administrator, an employment contract exists between the temporary employer and the temporary employee. The type of temporary employment situation existing in the instant case satisfies this standard.

When Anderson first sought employment with Tuboscope, he interviewed directly with the company. His job duties and the terms of his employment were communicated to him by Tuboscope personnel. Anderson was also told that Tuboscope had the right to terminate him without the consent of Olsten. He did not have any contact with Olsten until after he was hired by Tuboscope, at which time he filled out various forms and paperwork. Anderson worked at Tuboscope's facility and was directly supervised and given assignments by a Tuboscope employee. Tu-boscope provided his tools and equipment. Anderson's only contact with Olsten, after he filled out the forms, was to receive his paychecks from Olsten.

Tuboscope's acts of hiring Anderson, assigning him work, and paying him, manifest its consent that Anderson would act on its behalf and under its control. Anderson's acts of accepting work from Tuboscope, and working at its facilities under the exclusive control and supervision of Tuboscope employees, constitute consent by him to act on Tuboscope's behalf and under its control. Therefore, Anderson and Tuboscope had an implied employment contract.

Because an implied employment contract between Anderson and Tuboscope existed, the first prong of the Larson test for determining whether Tuboscope is a special employer that is covered by the Act's tort immunity is satisfied.

b. Anderson performed his work exclusively for Tuboscope.

The second prong of the Larson test-that the work being done by the employee must be essentially that of the special employer - is met here. It is undisputed that all of Anderson's work was for Tubo-scope. He worked exclusively at Tubo-seope's facilities, performed tasks as directed by Tuboscope management, and was exclusively supervised by a Tuboscope employee. Tuboscope provided his tools and equipment.

Anderson's limited relationship with Olsten provides further evidence that the work he performed was solely for Tuboscope. His only contact with Olsten was to receive his paychecks; he performed no duties for Ol-sten. In fact, Anderson never even met in person with Olsten management or employees. We therefore conclude that the second prong of the Larson test is met.

c. Tuboscope had complete control over Anderson's work.

The third prong of the Larson test is that the special employer must have the right to control the details of the employee's work. In this case, Tuboscope clearly had the right to control the details of Anderson's work. As mentioned above, he was supervised only by Tuboscope employees. His work never came under the review of Olsten.

Because (1) Anderson and Tuboscope had an implied contract of employment; (2) the work performed by Anderson was exclusively for Tuboscope; and (8) Tuboscope had the right to control Anderson's work, the three parts of the Larson test are satisfied. Consequently, Tuboscope is the type of special employer that comes under the reach of the Alaska Workers' Compensation Act, and Anderson's exclusive remedy against Tubo-seope is workers' compensation. The trial court's grant of summary judgment to Tubo-seope was therefore proper.

B. Olsten Is Not Liable for the Superior Court's Award of Costs and Attorney's Fees Against Anderson.

Anderson argues that the trial court erred in entering an award of attorney's fees and costs against him only and not against him and Olsten jointly and severally. He asserts that had he prevailed in this action, Olsten would be unjustly enriched by recouping the workers' compensation payment its insurer made to Anderson without Olsten having to bear the costs and burden of litigation. Anderson also contends that Olsten is liable for costs and fees because it is a "partially subrogated insurer" that is essentially a real party in interest in the present case. We disagree.

The general principle of the doe-trine of unjust enrichment is that "one person should not be permitted unjustly to enrich himself at [the] expense of another, but should be required to make restitution of or for property or benefits received, retained or appropriated." As its definition indicates, the doctrine of unjust enrichment is predicated on the theory of restitution: When a party unjustly receives, retains, or appropriates property or a benefit, the party should repay the source of the property or benefit. There is nothing in this doctrine that suggests that a party must pay restitution for the creation of a rather slim possibility that the party may receive some benefit in the future.

In the present case, Anderson lost on summary judgment. Therefore, Olsten gained nothing by Anderson's prosecution of his action against Tuboscope. If anything, Olsten lost by having to defend Tuboscope's third-party suit. Consequently, Anderson's unjust enrichment argument fails, and Olsten is not liable for attorney's fees and costs on this ground.

Anderson alternatively argues that our decision in Truckweld Equipment Co. v. Swen-son Trucking & Excovating, Inc. requires us to hold that Olsten is a "partially subro-gated insurer" who is a real party in interest subject to an assessment of fees and costs. However, Anderson disregards our explicit statement that "our holding in Truckweld should not be applied in the workers' compensation context due to the specific statutory procedures set out in AS 23.30.015."

Because Anderson's arguments as to why Olsten should be held jointly and severally liable for the attorney's fees and costs arising out of this action are meritless, we affirm the superior court's ruling that these fees and costs be assessed only against Anderson.

V. CONCLUSION

Because the trial court ruled correctly on both the summary judgment and the attorney's fees issues, we AFFIRM.

      . Olsten issued Anderson's paycheck, based on the hours he worked for Tuboscope. Tuboscope reimbursed Olsten for Anderson's wage, plus an additional 32% to cover Anderson's payroll administration and workers' compensation insurance. There is no record of Anderson having any other contact with Olsten.

      . On August 14, 1995, Tuboscope hired Anderson as a full-time regular employee. From this point forward, Anderson was no longer a PTP employee for whom administrative services were provided by Olsten. Tuboscope now pays Anderson directly, provides him with benefits, and covers him for workers' compensation.

      . See Wilson v. Municipality of Anchorage, 977 P.2d 713, 719 (Alaska 1999).

      . See State v. Arbuckle, 941 P.2d 181, 184 (Alaska 1997) (stating that attorney's fees award is reviewed under the de novo standard because it involves contract interpretation); Palmer G. Lewis Co. v. ARCO Chemical Co., 904 P.2d 1221, 1234 n. 31 (Alaska 1995) ("Review of attorney's fees based on indemnity is a question of law which we may review de novo.").

      . Alaska Statute 23.30.055 provides that workers' compensation is the exclusive remedy available against an employer to an employee injured at work. In this case, the parties do not dispute that workers' compensation is the exclusive remedy available to an employee against the employer, nor do they dispute any facts. Rather, the parties dispute the legal consequences of the undisputed facts. Therefore, the question before us is whether Anderson was an employee of Tuboscope.

      . See cases cited infra note 11.

      . See Wedeck v. Unocal Corp., 59 Cal.App.4th 848, 69 Cal.Rptr.2d 501, 505 (1997); Ruble.v. Arctic General, Inc., 598 P.2d 95, 97 n. 3 (Alaska 1979) (citation omitted). Although we have not previously addressed the present situation, we have acknowledged the "special employment" doctrine in the context of deciding whether a general employment relationship existed at the time of the employee's accident. See id. at 97-98.

      . See 3 Arthur Larson & Lex K. Larson, Larson's Workers' Compensation Law § 48.23, at 8-524, 528, 532 (1997).

      . See Wedeck, 69 Cal.Rptr.2d at 505.

      . See AS 23.30.055.

      . See Pettaway v. Mobile Paint Mfg. Co., 467 So.2d 228, 229-30 (Ala.1985); Araiza v. U.S. W. Bus. Resources, Inc., 183 Ariz. 448, 904 P.2d 1272, 1276 (Ariz.App.1995); Wedeck, 69 Cal.Rptr.2d at 505; Kelly v. Geriatric and Med. Servs. Inc., 287 N.J.Super. 567, 671 A.2d 631, 634, aff'd sub nom. Kelly v. Geriatric & Med. Ctrs., Inc., 147 N.J. 42, 685 A.2d 943 (1996) (per curiam); Vigil v. Digital Equip. Corp., 122 N.M. 417, 925 P.2d 883, 887 (N.M.App.1996), Shoemaker v. Manpower, Inc., 223 A.D.2d 787, 635 N.Y.S.2d 816, 817-18 (1996); Poirier v. Manpower Inc. of Providence, 689 A.2d 1036, 1036-37 (R.I.1997) (per curiam); Goodman v. Sioux Steel Co., 475 N.W.2d 563, 564-65 (S.D.1991).

      . Larson & Larson, supra note 8, § 48.00, at 8-434. Cases that apply this test in similar contexts include Pettaway, 467 So.2d at 229; Vigil, 925 P.2d at 886-87; and Goodman, 475 N.W.2d at 564-65. While this test focuses on liability for workers' compensation, it is useful here because an employer's liability to an employee for common-law negligence is precluded by that employer's liability for workers' compensation under the Alaska Workers' Compensation Act. See AS 23.30.055.

      . See Cluff v. NANA-Marriott, 892 P.2d 164, 168-71 (Alaska 1995) (using portions of this test to determine workers' compensation coverage in lent-employee context); Ruble, 598 P.2d at 97-98 (using this test to determine whether employee of subcontractor could sue general contractor for negligence). ,

      . The parties do not dispute that there was no express employment agreement between Anderson and Tuboscope.

      . Anderson does cite a number of superficial differences between PTP employees and regular Tuboscope employees. However, it is immaterial that Tuboscope treated Anderson differently from its other employees. Tuboscope is Anderson's special employer, not his general employer; therefore, he shares a different relationship with Tuboscope than its general employees. This special employment relationship does not bring Anderson or Tuboscope out of the ambit of workers' compensation.

      . In Cluff v. NANA-Marriott, we stated that [aln implied employment contract is formed by a relation resulting from the manifestation of consent by one party to another that the other shall act on his behalf and under his control, and consent by the other so to act." 892 P.2d at 171 (internal quotation marks omitted) (quoting Childs v. Kalgin Island Lodge, 779 P.2d 310, 314 (Alaska 1989)).

      . Anderson argues that Tuboscope should not be considered an employer for workers' compensation purposes because Olsten, not Tuboscope, paid for his workers' compensation insurance premiums. However, the fact that Tuboscope did not directly provide workers' compensation coverage is immaterial. Under the contract between Tuboscope and Olsten, Tuboscope reimbursed Olsten for the wages it paid Anderson; Tuboscope also paid Olsten an additional 32 percent to cover Olsten's payroll administration and other costs associated with Anderson. Because the contract between Olsten and Tuboscope specified that Olsten must provide workers' compensation coverage for PTP employees, a portion of Tuboscope's 32 percent payment effectively constitutes a payment of Anderson's workers' compensation premium. See Sorenson v. Colibri Corp., 650 A.2d 125, 130 (R.1.1994).

      . See Larson & Larson, supra note 8, § 48.00, at 8-434.

      . Id.

      . Black's Law Dictionary 1535 (6th ed.1990).

      . 649 P.2d 234, 238-39 (Alaska 1982) (stating that where plaintiff was suing for property damage for which it had been partially reimbursed by insurer, insurer could be considered a real party in interest if insurer was timely joined in action).

      . Exxon Corp. v. Alvey, 690 P.2d 733, 744 (Alaska 1984).


author: MATTHEWS, Chief Justice.

text:
    Gary E. DOBOS and Julma L. Swartout, Appellants/Cross-Appellees, v. Rick D. and Eva INGERSOLL, as parents of Margarita Ingersoll, minor, Appellees/Cross-Appellants.
    Nos. S-8567, S-8707.
    Supreme Court of Alaska.
    Oct. 6, 2000.

      RN. Sutliff, Anchorage, for Appellants/Cross-Appellees.
    Tim Dooley, Anchorage, for Appel-lees/Cross-Appellants.
    Before MATTHEWS, Chief Justice, EASTAUGH, FABE, BRYNER, and CARPENETI, Justices.
   OPINION

MATTHEWS, Chief Justice.

I. INTRODUCTION

Gary Dobos hit pedestrian Margarita In-gersoll with his taxi. At the scene, taxi passenger Dorman Lodge made a statement to a police officer. This statement was admitted at the personal injury trial by the trial court under the present sense impression exception to the hearsay rule. The jury subsequently found Dobos liable for the accident. Dobos appeals the decision to admit this statement, claiming that it prejudiced his trial. He also appeals the trial court's denial of his motion for a directed verdict. Inger-soll cross-appeals, contesting the trial court's decision not to award attorney's fees under Alaska Civil Rule 87(c)(2). Because the admission of the statement was harmless, the denial of the directed verdict was proper, and the denial of Rule 37(c)(2) fees for failure to admit negligence and causation was appropriate, we affirm the trial court in those respects. Because Rule 87(c)(2) fees should have been granted to Ingersoll for Dobos's failure to agree to the admissibility of certain medical records, we remand to the trial court for a determination of appropriate attorney's fees and costs.

II. FACTS AND PROCEEDINGS

A. Facts

On September 28, 1994, Gary Dobos was driving a taxi in Kodiak. During his evening shift, he was summoned by police to the Westmark Hotel to drive Dorman Lodge to another hotel. The Westmark had refused to rent a room to Lodge. When Lodge entered Dobos's taxi, he was unruly, had been drinking, and reeked of fish. Dobos headed for the Shelikof Lodge.

On the way to the Shelikof Lodge, Lodge changed his mind and told Dobos to take him to the Star Motel instead. Because Dobos had already passed the access road leading to the Star Motel, he decided to cut through the parking lot in front of Mack's Sporting Shop. To enter the parking lot, Dobos had to drive over the sidewalk.

Margarita Ingersoll, an eight-year-old, and her family were walking from the Shelikof Lodge to the Krafts Store. Ingersoll was wearing jeans, a plaid shirt, a light purple jacket, and pink shoes with velero straps. The family had just passed McDonald's Restaurant when Ingersoll paused to strap her shoe. Ingersoll then hurried to catch up with her family, moving at either a sprint or a fast walk. Ingersoll and her family walked along the sidewalk next to the parking lot in front of Mack's Sporting Shop. According to Victor Larionoff, who was walking with In-gersoll's family, the area was well-lit from the McDonald's, the Mack's Sports Shop, and the gas station across the street. Police Officer John Palmer, who investigated the accident, testified that there was also a streetlight in the parking lot.

Dobos saw Ingersoll's family to his left, but did not see Ingersoll, who was to the right of the vehicle because she had lagged behind the group. As he drove into the parking lot, Dobos was angling to the left and did not look to his right. Dobos's car hit Ingersoll in the leg, knocking her to the ground. At the time of impact, Dobos estimated that he was traveling no more than five miles per hour. Dobos knew that there were no bumps in the parking lot, so he realized that he was on top of something and stopped the car. Rosemarie Berdi, Inger-soil's half-sister, attempted to pull Ingersoll out from under the tire, but was unable to do so. Ingersoll was trapped under the front tire of the car for over a minute, until Dobos backed the car off of her, under Larionoff's instruction. Dobos then radioed for an ambulance and waited in his vehicle until the police arrived. '

The ambulance arrived "shortly," followed "shortly" by the police. Sergeant Michael Andre conducted tape-recorded interviews of the witnesses on the scene, including Lodge. Sgt. Andre observed that Ingersoll was wearing "dark clothing" and that Lodge was "somewhat intoxicated." Ingersoll was taken to the hospital and released to her mother's care that night. '

B. Proceedings

Rick and Eva Ingersoll, Margarita's parents, brought suit on behalf of themselves and their daughter. Their claims included strict liability, reckless behavior, negligence, assault and battery, infliction of emotional distress, and loss of consortium. Rosemarie Berdi joined the suit as a plaintiff as well, claiming loss of consortium and infliction of emotional distress. The suit named as defendants Dobos and his employers Julma Swartout, A & B Taxi Dispatch Company, Fred Coyle, and Irene Coyle. Berdi, Rick, and Eva were dismissed as plaintiffs by stipulation, leaving only Margarita. On summary judgment, defendants Fred and Irene Coyle and A & B, Taxi Dispatch Company were dismissed from the suit.

After Ingersoll presented her case to the jury, Dobos moved for a directed verdict. The court denied the motion. Following a three-day trial, the jury found Dobos liable for negligence, finding that Dobos was one hundred percent responsible for the accident, and awarded Ingersoll $42,382.80 in damages, including past and future economic and non-economic losses. Judge Donald. Hop-wood accepted the decision of the jury . and entered a judgment in favor of Ingersoll for the amount awarded by the jury plus interest, Civil Rule 79 costs, and Civil Rule 82 attorney's fees. Judge Hopwood declined to award Civil Rule 37 attorney's fees or costs. This appeal and cross-appeal followed.

III. STANDARDS OFP REVIEW

We review the trial court's decision to admit evidence under a hearsay exception for abuse of discretion. Decisions about the admissibility of evidence are committed to the sound discretion of the trial court. We reverse only if upon review of the record as a whole, we are left with a definite and firm conviction that the trial court erred in its ruling and the error affected the substantial rights of a party.

In reviewing the trial court's denial of a motion for a directed verdict, we do not weigh conflicting evidence or judge the eredi-bility of witnesses. Instead, we "determine whether the evidence, when viewed in the light most favorable to the non-moving party, is such that reasonable persons could not differ in their judgment as to the facts."

The standard of review for reviewing the denial. of Rule 37(0)(2) sanctions will be discussed in the sanctions section of this opinion.

IV, DISCUSSION

A. Any Error the Trial Court May Have Made in Admitting Lodge's Statement Is Harmless.

At the scene of the accident, Sgt. Andre conducted interviews of the witnesses, including Lodge. Sgt. Andre spoke to Lodge for approximately two or three minutes. Lodge was not called as a witness at the trial, apparently because of unavailability. Instead, Sgt. Andre testified about what he heard Lodge say. According to Sgt. Andre, Lodge told him that, as the cabdriver began turning into the driveway of Mack's Sport Shop next to McDonald's Restaurant, Lodge saw a child and said "hey, man, watch it," and Dobos hit Ingersoll two or three seconds later. Lodge opined to Andre that Dobos "just wasn't paying attention" and that he had hit the child "almost dead center." Do-bos challenged as inadmissible hearsay Sgt. Andre's testimony recounting his interview with Lodge. The testimony was admitted over Dobos's objection under the present sense impression exception.

According to Alaska Rule of Evidence 801(c), hearsay is "a statement, other than one made by the declarant while testifying at the trial or hearing, offered in evidence to prove the truth of the matter asserted." The parties do not dispute that Lodge's statement is hearsay. They only dispute whether the evidence is nonetheless admissible under a hearsay exception.

Rule 803(1) sets out the present sense impression exception to the hearsay rule: a "statement describing or explaining an event or condition made while the declarant was perceiving the event or condition or immediately thereafter" is not excluded by the hearsay rule. Thus, to fall within the present sense impression. exception, a statement must meet three requirements: it must describe or explain the event or condition; it must be made during or immediately after the event; and it must be based on the perception of the declarant. The burden is on the proponent of the evidence to establish the foundational facts necessary for the hearsay exception .

Lodge's statement plainly is descriptive and was based on his personal perception of the events surrounding the accident. Therefore the only serious question as to whether the present sense impression exeeption applies is whether the statement was sufficiently contemporaneous to meet the "immediately thereafter" standard of the rule. Because of the substantial uncertainty in the record concerning when the statement was taken by Sgt. Andre, it is unclear whether the contemporaneity foundation for admission of the statement was established. But we need not resolve this question, because we hold that even if admission of the statement was erroneous, it was harmless error.

Under the harmless error test "[the members of this court must necessarily put themselves, as nearly as possible, in the position of the jury in order to determine whether, as reasonable [people], the error committed probably affected their verdict." The burden is on Dobos to show prejudice.

Absent Lodge's statement, the evidence of Dobog's negligence consists of Ingersoll's testimony that she was walking quickly on the sidewalk when she was hit, Dobos's testimony that he was focused on angling to the left rather than looking to the right, the testimony that the area was well-lit, and Larionoff's testimony that Dobos did not back his car off of Ingersoll for over a minute. Based on this testimony, it seems likely that the jury would have found Dobos negligent, both for his failure to look both ways before driving over the sidewalk and for his decision not to back the car off of Ingersoll sooner.

Significant factors in determining whether an error was harmless or prejudicial may include how central the testimony was relative to the overall length of the trial and how the testimony was used at closing argument. In this case, Sgt. Andre's repetition of Lodge's statement took up a short period of time over the three-day trial. Sgt. Andre does not appear to have been on the stand for more than fifteen or twenty minutes. The issue was also discussed with Dobos in testimony that lasted less than five minutes. Lodge's statement was alluded to in closing argument, when Ingersoll's counsel said "Iwle heard about the passenger Dorman Lodge. He's able to see something." In light of the length of the closing argument, this reference to Lodge was exceedingly brief. It is also quite vague. The Lodge testimony was a small segment of the plaintiffs case. Additionally, the fact that Lodge was intoxicated suggests that the jury would have accorded little weight to his testimony, making it even less likely that his statement affected the verdict.

Because Lodge's statement played a very small role in the trial, and the other evidence was strong enough that the jury would probably have found Dobos to be negligent, we find that any error the trial court may have made in admitting this evidence is harmless.

B. The Trial Court Did Not Err in Denying Dobos's Motion for a Directed Verdict.

Dobos argues that, assuming that the trial court should have excluded Lodge's statement, there was no evidence supporting In-gersoll's claim that Dobos was negligent. But our outline of the evidence in the preceding discussion clearly shows this argument to be without merit.

C. Civil Rule 87(c)(2) Attorney's Fees and Costs

1. Facts and proceedings

During the course of litigation, Ingersoll sent Dobos requests for admission for a number of documents and exhibits. Dobos conceded the admissibility of the majority of these documents and exhibits, declined to admit others, and indicated that some would be admissible if further proofs of foundation were made. Specifically, Dobos denied that Ingersoll's medical records from Kodiak Island Hospital and North Pacific Medical Center were non-hearsay or admissible. Consequently, Ingersoll called doctors to testify in order to lay a foundation for the medical records identified above; the records were admitted without objection.

Ingersoll also sent requests for admission asking that Dobos concede that he was at least partially negligent and had caused pain and injury to Ingersoll. Dobos denied that he was at all negligent. At the end of the trial, the jury concluded that Dobos was negligent and one hundred percent responsible for Ingersoll's damages and injury.

Ingersoll requested costs and attorney's fees under Civil Rule 37(c)(2), which provides as follows: If a party fails to admit the genuineness of any document or the truth of any matter as requested under Rule 36, and if the party requesting the admissions thereafter proves the genuineness of the document or the truth of the matter, the requesting party may apply to the court for an order requiring the other party to pay the reasonable expenses incurred in making that proof, including reasonable attorney's fees. The court shall make the order unless it finds that (A) the request was held objec-

If a party fails to admit the genuineness of any document or the truth of any matter as requested under Rule 86, and if the party requesting the admissions thereafter proves the genuineness of the document or the truth of the matter, the requesting party may apply to the court for an order requiring the other party to pay the reasonable expenses incurred in making that proof, including reasonable attorney's fees. The court shall make the order unless it finds that (A) the request was held objectionable pursuant to Rule 86(a), or (B) the admission sought was of no substantial importance, or (C) the party failing to admit had reasonable ground to believe that the party might prevail on the matter, or (D) there was other good reason for the failure to admit.

The trial court denied this request. Inger-soll cross-appeals this denial of Rule 87(c)(2) fees and costs.

2. Standard of review

Those exceptions to Rule 87(c)(2) that raise legal questions we review de novo. Those exceptions that rely on factual findings we review for clear error. The fourth exception, whether there was other good reason for the failure to admit, requires an exercise of judgment. We review this exception for abuse of discretion. Once the trial court has determined that the failure to admit was not subject to any exception, Rule 37(c)(2) sanctions are mandatory; the trial court lacks the discretion not to award them. The amount of the attorney's fees awarded is a discretionary decision, reviewed under the abuse of discretion standard.

3. The "reasonable grounds" exception excuses Dobos's failure to admit negli-genee or causation.

The "reasonable grounds" exception applies to Dobos's failure to admit his negligence and causation. The issue is whether Dobos acted reasonably in believing that he might prevail. This is an objective test; courts look at the record to see if there was a basis for concluding that he would prevail. That the evidence was ultimately admitted or the factual admission ultimately proven does not mean that it was unreasonable not to concede it.

a. Negligence

Ingersoll argues that if Dobos had admitted his negligence when she sent him the request for admission, she would not have had to go to trial at all. She therefore argues that she is entitled to the cost of the entire trial. However, even though the evidence against Dobos was strong, it was not so compelling that he had a duty to admit that he was negligent. Whether Dobos was negligent was a question of fact properly determined by the jury.

At the time that Dobos answered the request for admission of his negligence, he could reasonably have believed that he would prevail on the negligence issue. From his perspective, he was driving slowly and carefully. Furthermore, Ingersoll had testified at her deposition that she was running when the car hit her; it was not until the trial that she testified that she had been walking. Because there was a factual dispute as to whether Dobos was negligent, he was not required to admit his negligence when the admission was requested. Therefore, the trial court did not err in denying Rule 37 fees based on Dobos's failure to admit his negligence.

b. Causation

Dobos's refusal to admit to causation was also reasonable. Request for Admission No. 5 asked Dobos to admit that his negligence caused Ingersoll's injuries. Since he reasonably denied negligence when its admission was specifically requested, it was also reasonable to deny negligence when its admission was requested in combination with causation. Requests for Admission Nos. 6-9 are connected to Request for Admission No. 5, so conceding any of these would also concede negligence. In addition, Dobos may have reasonably believed that Ingersoll's future earnings potential was not decreased and that she would not need further surgery. The trial court did not abuse its discretion in concluding that the "reasonable grounds" exception applied to the causation issues.

4. Dobos's failure to concede the admissibility of certain medical records entitles Ingersoll to Civil Rule 37(c) fees.

Under Civil Rule 36, a party can request that the opposing party admit the genuineness of any documents. "Rule 37(c) provides a sanction for the enforcement of Rule 36 dealing with requests for admission. * Thus, the failure to admit the genuineness of documents subjects a party to Rule 37(c) attorney's fees and costs unless an exception applies.

Dobos argues that it was reasonable not to acknowledge that the medical records were admissible because they were hearsay. Because the proponent of hearsay bears the burden of proving that the hearsay falls within an exception, Dobos argues that he did not have to admit that the records were admissible and not hearsay until Ingersoll laid a foundation. However, medical records, including doctors' chart notes, opinions, and diagnoses, fall squarely within the business records exception to the hearsay rule. That exception provides:

A memorandum, report, record, or data compilation, in any form, of acts, events, conditions, optmions, or diagnosis, made at or near the time by, or from information transmitted by, a person with knowledge acquired of a regularly conducted business activity, and if it was the regular practice of that business activity to make and keep the memorandum, report, record, or data compilation, all as shown by the testimony of the custodian or other qualified witness, unless the source of information or the method or cireumstances of preparation indicate lack of trustworthiness. The term "business" as used in this paragraph includes business, institution, association, profession, occupation, and calling of every kind, whether or not conducted for profit.!

Moreover, to the extent that the rule's text leaves any doubt about the admissibility of the hospital records, the commentary to this provision definitively resolves the question. Noting that entries in the form of opinions are "commonly encountered with respect to medical diagnoses, prognoses, and test results," the commentary states that in order to make clear its adherence to the trend of admissibility of such items, "the rule specifically includes both diagnoses and opinions, in addition to acts, events, and conditions, as proper subjects of admissible entries."

The purpose of Civil Rule 36 is to expedite and streamline discovery and litigation by establishing facts over which there is no real dispute. "Requests for admission as to genuineness of documents can be particularly useful in helping parties determine which documents that are to be introduced at trial will present foundational problems and which will not." Requesting that documents which clearly fall within a hearsay exception be admitted without having to put the record-keeper on the stand would seem to be one of the central purposes for which Rule 86 was designed. Requiring testimony that medical records were made and kept in the regular course of business is a waste of time unless there is some reason to believe that the records are not genuine or trustworthy.

That Ingersoll had the burden of proving that the documents were not hearsay is irrelevant. "A request is not objectionable on the ground that ... the request relates to matters on which the requesting party has the burden of proof." The purpose of the rule is to avoid unnecessary testimony, regardless of where the burden lies.

Dobos conceded at oral argument that he had no reason to believe that the medical records were inauthentic He explained that the reason he denied the request to admit was so Ingersoll would put the doctors on the stand, as Dobos wished to cross-examine them about some of their medical conclusions. However, if Dobos wished to question Ingersoll's doctors, he could have called them to the stand himself. Denying the admissibility of medical records when there was no reasonable question as to their admissibility violates Rule 86(a).

Because Dobos had no reason to deny the admissibility of the medical records, he should have been subjected to Rule 37(c)(2) sanctions for these denials. The failure to sanction him was error. On remand, the court should award reasonable fees and costs for calling witnesses who testified to the facts needed to admit Ingersoll's medical records.

V. CONCLUSION

The trial court's decision to admit the hearsay evidence under the present sense impression exception was at worst harmless error. The motion for a directed verdict was appropriately denied, since there was a triable issue of fact on Dobos's negligence. We therefore AFFIRM the trial court in these respects. -

The denial of attorney's fees based on the failure to admit negligence and causation was not an abuse of discretion. Dobos could reasonably believe that he was not negligent; this is sufficient to avoid Rule 87(c)(2) fees. We AFFIRM this aspect of the denial of attorney's fees under Rule 37. However, it was error not to award attorney's fees and costs for Dobosg's refusal to admit the genuineness of the medical records. We therefore REMAND for a determination of attorney's fees and costs relating to this item.

      . The facts and proceedings affiliated with the Rule 37(c)(2) issue are set forth in Part IV.C.

      . See Wyatt v. State, 981 P.2d 109, 112 (Alaska 1999).

      . See Hawley v. State, 614 P.2d 1349, 1361 (Alaska 1980).

      . See Wyatt, 981 P.2d at 112; Alaska R.Civ.P. 61.

      . See Mullen v. Christiansen, 642 P.2d 1345, 1348 (Alaska 1982).

      . Id.; see also Alyeska Pipeline Serv. Co. v. Aurora Air Serv., Inc., 604 P.2d 1090, 1094 (Alaska 1979).

      . See Bentley v. State, 706 P.2d 1193, 1197-98 n. 2 (Alaska App.1985) (citing Ohio v. Roberts, 448 U.S. 56, 74-75, 100 S.Ct. 2531, 65 LEd.2d 597 (1980).

      . Alyeska Pipeline Serv. Co. v. O'Kelley, 645 P.2d 767, 773 (Alaska 1982) (citation omitted).

      . See Zerbinos v. Lewis, 394 P.2d 886, 889 (Alaska 1964).

      . See Alyeska Pipeline Serv. Co., 645 P.2d at 773 (admission of irrelevant evidence was harmless error because it took a short time in a multiple-day trial and was not mentioned at closing argument).

      . A few examples of issues that took up considerably more time than the Lodge statement in this closing argument include the attorney's discussion of Hollywood's depiction of gavels and black female judges, a rock being thrown into a pond, the value of a mechanical crane, the trauma of a girl being forced to dress as a boy in a play, and the battle of Trafalgar.

      . Because we have already concluded that the admission was not prejudicial error, the motion for directed verdict was properly denied.

      . Civil Rule 36(a) allows a party to serve a written request for the admission of the truth of any matters relating to fact or the application of law to fact, including the genuineness of documents.

      . See Strong Enters., Inc. v. Seaward, 980 P.2d 456, 458 (Alaska 1999) (legal questions associated with attorney's fees are reviewed de novo).

      . See Cockerham v. State, 933 P.2d 537, 539 n. 9 (Alaska 1997) (trial court's factual decisions reversed only if clearly erroneous).

      . See Pierce v. Pierce, 949 P.2d 498, 500 (Alaska 1997) (applying abuse of discretion standard to trial judge's discretionary decision about relief from judgment).

      . See Marchand v. Mercy Med. Ctr., 22 F.3d 933, 937 (Oth Cir .1994); Booker v. Stauffer Seeds, Inc. (In re Stauffer Seeds, Inc.), 817 F.2d 47, 49 (8th Cir.1987); Scheufler v. General Host Corp., 915 F.Supp. 236, 238 (D.Kan.1995).

      . Alaska R.Civ.P. 37(c)(2)(C).

      . See Washington State Dep't of Transp. v. Washington Natural Gas Co., 59 F.3d 793, 805-06 (9th Cir.1995).

      . See 7 James Wm. Moore et al., Moore's Federal Practice § 37.74[4] (3d ed.1997).

      . See Comeaux v. Brown & Williamson Tobacco Co., 915 F.2d 1264, 1275 (9th Cir.1990); Scheufler, 915 F.Supp. at 239.

      . See Schumacher v. City and Borough of Yakutat, 946 P.2d 1255, 1256 n. 1 (Alaska 1997) (quoting Gordon v. Alaska Pac. Bancorporation, 753 P.2d 721, 725 (Alaska 1988)).

      . See, eg., Board of Dirs., Water's Edge v. The Anden Group, 136 F.R.D. 100, 105-06 (E.D.Va.1991) (court looks at information available at the time of request for admission to determine reasonableness).

      . See Berry v. Federated Mut. Ins. Co., 110 F.R.D. 441, 443 (N.D.Ind.1986) (noting that Rule 36 is used to determine which documents will have foundational problems). Cf. Bernstein v. IDT Corp., 638 F.Supp. 916, 920 (S.D.N.Y.1986) (allowing plaintiff to file a Rule 36 request for admission to establish genuineness of documents); Friedman v. Prudential Life Ins. Co. of Am., 589 F.Supp. 1017, 1021 (S.D.N.Y.1984) (implying that Rule 36 applies to medical records and that Rule 37(c) sanctions would follow for failure to admit the genuineness of medical records).

      . Fed.R.Civ.P. 37 advisory committee's note (1970 amend.).

      . See Johnson Int'l Co. v. Jackson Nat'l Life Ins. Co., 812 F.Supp. 966, 985-90 (D.Neb.1993) (addressing whether failure to admit foundation of medical and prescription records violated Rule 36, mandating an award under Rule 37(c)).

      . Alaska R.Evid. 803(6) (emphasis added).

      . Alaska R.Evid. 803(6) cmt.

      . See Moore, supra note 20, § 36.02[1].

      . Id. § 36.10[9].

      . 8A Charles Alan Wright et al., Federal Practice and Procedure: Civil § 2254, at 528-29 (1994).

      . See Moore, supra note 20, § 37.70 ("Admissions not only eliminate unnecessary proofs at trial, but also streamline discovery and motion practice. ...").