author: BRYNER, Justice.

text:
    Chris FROINES, Appellant, v. VALDEZ FISHERIES DEVELOPMENT ASSOCIATION, INC., Appellee.
    No. S-10340.
    Supreme Court of Alaska.
    July 25, 2003.
    Michael T. Stehle, Law Office of Michael Stehle, Anchorage, for Appellant.
    Stephen MeAlpine, Law Office of Stephen McAlpine, Anchorage, for Appellee.
    Before: FABE, Chief Justice, MATTHEWS, BRYNER, and CARPENETI, Justices.
   OPINION

BRYNER, Justice.

I. INTRODUCTION

Chris Froines sued the Valdez Fisheries Development Association for breaching an agreement to renew an annually issued vessel charter contract making him a member of the association's fishing fleet. The superior court entered summary judgment against Froines, ruling that the parol evidence rule barred him from using extrinsic evidence to prove that the association had promised to renew his charter contract, which, by its own terms, expired at the end of the fishing season in which it was issued. Froines appeals, contending that evidence of the association's renewal policy was admissible under the par-ol evidence rule because it neither modified nor contradicted the annual charter contract's terms. Because the superior court overlooked extrinsic evidence raising triable issues of fact as to the scope and meaning of the annual charter agreement, we reverse its summary judgment order.

II. FACTS AND PROCEEDINGS

The Valdez Fisheries Development Association is a private, non-profit corporation organized by a group of Valdez fishermen in 1978 to run a salmon hatchery in the Eastern District of the Prince William Sound. The association recovers its hatchery costs through a program that allows it to harvest and sell some of its returning salmon each year. The association determines its operation costs, negotiates a price-per-pound with local fish processors, and figures the amount of salmon it needs to catch to recover its costs. It then arranges for the fish to be harvested during a one-month limited entry season between mid-June and mid-July. The remaining salmon are "common property" and are harvested by commercial and sport fishermen.

Since beginning its cost-recovery program, the association has used several arrangements for harvesting its returning salmon. For the first few years of the program, it contracted with a single individual to catch all the fish; for the next few years, it conducted its cost-recovery fishing through volunteer participation, allowing anyone with a permit to join in the fishing. But in 1994 the association converted to a "fleet" system of fishing. Under this system, it recruited ten local fishing vessels and entered into vessel charter agreements with their owners. The individual vessel charter contracts covered the one-month cost-recovery season and set out detailed terms addressing the fishing duties and compensation rates that would apply during this period. Under the terms of the charter agreements, fleet members would fish individually during the first ten days of the cost-recovery season, and each would be paid on the basis of its own production, receiving ten percent of the value of its catch or a minimum of $500 per day. During the balance of the cost-recovery season, if the association began harvesting more fish than it could sell, the charter contracts required the fleet members to fish together as a "combine fishery" under the direction of the association's cost-recovery fleet manager. For this combined fishing effort, the charter agreements provided that each vessel would be paid an equal share of the entire fleet's production.

The association evidently planned to retain the same fleet in 1995 that it used in 1994. But in response to inquiries from persons interested in joining the cost-recovery fishery, the association's board of directors and cost-recovery fleet manager, Mike Wells, began discussing ways to introduce new boats into the fleet. In a memo to the board during the 1994-95 off-season, Wells proposed a system to replace "the boat with the lowest landing each season." Wells favored the idea because it "would at least ensure that a spot becomes available each season" and "because it would help to put some additional incentive on the fishermen to not be the last in line."

The board discussed Wells's suggestion at its February 14, 1995, meeting, and the suggestion was apparently well received; the minutes of the board's meetings noted that

Mike wrote a letter proposing that each year we drop the bottom boat. This would allow the group to change over time. The replacement list would be from past experience and a local or greater interest. We will notify the fleet this year and see what they have to say.

A short time later, Wells described the new renewal arrangement in a cover letter sent to fleet members with their 1995 charter contracts:

In talks with the VFDA's Board of Directors, I was asked to come up with a fair and equitable way to add new boats into our cost recovery program. After much consideration, we have decided to replace the boat with the lowest total pounds caught each year. A new vessel will be selected out of a pool of names to replace the number 10 boat. Of course someone will always be last and in the event that one of the remaining nine does not return, the tenth vessel will be offered a position.

After the 1995 cost-recovery season-the second season of fleet fishing and the first under the newly announced renewal arrangement-one of the fleet's ten original vessels decided to drop out of the fleet. This made it unnecessary to eliminate the lowest producing boat, and the association ultimately opted to keep the fleet at nine boats for the 1996 season. Wells explained the situation to fleet members in his cover letter to their 1996 vessel charter contracts: "Because VEDA will not fill the tenth vessel position for 1996, VFDA will not seek to drop the boat with the lowest pounds landed at the end of the [1995] season."

The situation remained unchanged after the 1996 season: the fleet retained its nine remaining original members, and the association elected not to add a new vessel. In his cover letter distributed with the 1997 vessel charter contracts to members of the fleet, Wells indicated that a price reduction was "the only change from our previous programs" and noted that "all other aspects of the harvest will remain the same."

Froines fished with the fleet from its opening season in 1994 through 1997. His boat, the Nikkt An, was the fourth highest producing boat during the 1997 cost-recovery season. After that season ended, most fishermen in the Valdez area went on strike to protest the low prices being offered by area processors. But Froines declined to join the strike. His decision to continue fishing during the strike upset many of the association's board members and officers. As the 1998 season approached, Wells recommended that Froines's boat be terminated from the fleet for unspecified "past performance" reasons. The board voted to follow Wells's recommendation in May 1998, and the association declined to renew Froines's contract as a member of the cost-recovery fleet.

Froines sued the association. He claimed that, by declining to renew his fishing contract in 1998, it breached its promise to retain all but the least productive vessel in its fleet from year to year. During pretrial discovery, Wells and various association board members gave deposition testimony in which they arguably acknowledged that the association had implemented the alleged renewal policy in 1994 and that the policy remained in effect when the association refused to renew Froines's fishing contract in 1998. For example, in responding to questions about the May 1998 meeting at which the board voted to replace Froines's vessel, Jason Wells, a former association board member, admitted that the main concern "was that the board follow its policy and base that decision on production." Wells then confirmed that the policy at issue was the one "put into place at the end of the '94 season, beginning of [the] '95 season, that the lowest producing boat would, in fact, be dropped or replaced with a new boat."

There was also deposition testimony acknowledging that some board members were angry with Froines for his refusal to join the fishing strike during the 1997 fishing season and that they wanted to eliminate him from the fleet for that reason. Furthermore, Mike Wells conceded that the Nikki Ann had been one of the fleet's most productive boats in 1997. Wells nonetheless claimed that the Nigk1 Ann's production levels were lower in 1995 and 1996 and that Froines had generally put forth little effort during the fleet's periods of "combine" fishing. Froines denied these claims, pointing out that they were based on statistics compiled after the board voted not to renew his contract.

Shortly before trial, Froines moved for partial summary judgment on liability; relying on the deposition testimony and other documentary evidence, he claimed that the association had effectively admitted that it violated its renewal policy. The association opposed Froines's motion. In addition, it moved to exclude any evidence offered by Froines to suggest that an enforceable renewal contract existed. According to the association, the parol evidence rule barred this evidence because proof of a promise to renew fleet membership would contradict the terms of the annual vessel charter contracts, which expressly limited the duration of the fishing contracts to the one-month cost-recovery season each year, contained no renewal provisions, and included an integration clause declaring that "there are no other agreements or understandings, oral or written, between the Owner and the Corporation."

After reviewing all evidence submitted in connection with the pending motions, hearing oral argument, and offering to hold a hearing to allow further evidence, the superi- or court entered a decision denying Froines's summary judgment motion and granting the association's parol evidence motion. In so ruling, the court concluded that extrinsic evidence of the renewal agreement would violate the parol evidence rule by modifying the express terms of the annual charter contracts. - Because the parties agreed that this ruling effectively granted summary judgment to the association, the superior court entered a final judgment against Froines. Froines appeals.

III. DISCUSSION

A. - Standard of Review

We independently review - orders granting summary judgment, drawing all reasonable inferences in favor of the non-moving party to determine whether the ree-ord raises a genuine dispute as to any facts material to a viable legal theory and whether the moving party is entitled to judgment as a matter of law.

B. Parol Evidence Ruling

When a written statement sets out the terms of an agreement between contracting parties, the parol evidence rule generally precludes the parties from using evidence of prior agreements to contradict the written terms. If the writing expresses part of the parties' agreement, the agreement is considered to be partially integrated; a writing that sets out the parties' complete agreement is deemed fully integrated. The parol evidence rule forbids contradiction of partially integrated terms but allows them to be "explained or supplemented ... by evidence of consistent additional terms." In contrast, the rule does not allow the terms of a fully integrated contract to be varied by evidence of additional terms, even if those terms are consistent."

Our case law describes a three-step process for resolving parol evidence issues, requiring trial courts to consider: (1) whether the contract is integrated, (2) what the contract means, and (8) whether the prior agreement conflicts with the integrated agreement. We have summarized the requisite inquiry as follows:

The parol evidence rule is implicated when one party seeks to introduce extrinsic evidence which varies or contradicts an integrated contract. Once the rule is triggered, the parties' reasonable expectations are determined by applying a three-step test. The first step is to determine whether the contract is integrated. The second step is to determine what the contract means. Determining the meaning of a contract is treated as a question of law for the court except where there is conflicting extrinsic evidence on which resolution of the contract's meaning depends.... If the language is susceptible to [two] asserted meanings, then interpreting the contract is a question of fact for the jury. Extrinsic evidence may always be received in resolving these first two inquiries. The third step is to determine whether the prior agreement conflicts with the integrated writing. Whether there is conflicting extrinsic evidence depends on whether the prior agreement is inconsistent with the integration. Inconsistency is defined as "the absence of reasonable harmony in terms of the language and respective obligations of the parties." ... While extrinsic evidence is important, nonetheless after the transaction has been shown in all its length and breadth, the words of an integrated agreement remain the most important evidence of intention.[]

In the present case, the superior court acknowledged the need to conduct this three-step inquiry and briefly addressed each step. But the court did not clearly recognize that it was required to consider the totality of the evidence, including extrinsic evidence of the renewal agreement, in addressing the first two issues-integration and contractual meaning. The point is significant, since our cases have consistently emphasized that "[elxtrinsic evidence may always be received in resolving [the] first two inquiries."

Addressing the first issue, integration, the superior court simply quoted the charter agreement's integration clause and cited Kupka v. Morey for the proposition that "contracts containing such clauses are partially integrated so that parol evidence may not be used to prove a provision that contra-diets or is inconsistent with a specific term of the contract." The court then turned to the issue of contractual meaning. Noting that time charter agreements are inherently fixed-period contracts and that the agreements at issue here expressly fixed the duration of the charters to "the period of June 20 ... to July 20" each year, the court summarily ruled that "(tlhe meaning of this term is fairly clear from the language of the time charter, and Froines does not identify any ambiguity in this language." Turning to the third-step issue of conflict, the court, again appearing to rely exclusively on the plain meaning of the written charter agreements, concluded that Froines's allegation of a renewal agreement "was inconsistent with the unambiguous terms of the time charter in that it contradicted the provision for the anticipated duration of the charter."

Since Froines has not challenged the validity of the charter agreements' integration clauses or alleged that those agreements do not accurately memorialize part of the parties' overall agreement, we agree with the trial court's reliance on Kupka v. Morey to establish that the integration clauses alone allowed the charter agreements to be treated as partially integrated contracts. But the court's conclusion on this point did not eliminate the need to consider and weigh the totality of the evidence for purposes of determining the intended scope and meaning of the charter agreements in relation to the alleged renewal agreement. To the contrary, recognizing the charter agreements to be partial expressions of the parties' agreement made it crucial to determine the scope and meaning of the full agreement in light of all available evidence-including Froines's proposed evidence of a renewal agreement.

As we indicated earlier, however, the superior court's second-step determination of contractual meaning focused narrowly and exelu-sively on the literal terms of the charter contracts' one-month duration provisions. The superior court saw no need to look further, noting that "Froines does not identify any ambiguity in this language." This finding suggests a belief by the court that Froines's extrinsic evidence of a renewal agreement could not be considered without an initial showing of ambiguity in the written provisions. Yet we have expressly recognized that a trial court's duty to consider the totality of the evidence in resolving issues of integration and contractual meaning extends to all cases and requires no preliminary indication of ambiguity in the written agreement:

In the past, this court has stated or implied that resort to extrinsic evidence can take place only after a preliminary finding of ambiguity. Thus, a court would review extrinsic evidence to make a preliminary finding of ambiguity and only then consider extrinsic evidence in construing the contract. A minority of this court has repeatedly criticized this two-tiered test as artificial and unduly cumbersome, noting that it offers no advantage over one which initially turns to extrinsic evidence for such light as it may shed on the reasonable expectations of the parties. We think this criticism is sound and hold, as we have intimated before, that a court in this jurisdiction may initially turn to extrinsic evidence in construing a contract.[]

Here, under the evidence before the superior court at the time of its ruling, the seope and meaning of the charter agreements were hotly disputed issues. The association denied formally adopting the alleged renewal policy and maintained that the charter agreements were fully integrated contracts that expressed the parties' complete agreement, ruling out any possibility of an enforceable renewal agreement. Froines, on the other hand, asserted that the association had all but admitted the renewal policy's existence. Portraying the charter agreements as contracts that were limited in subject and seope to governing the fleet's fishing activities during the cost-recovery season proper, Froines characterized the renewal policy as a supplemental contractual term that was consistent with the charter agreements because the renewal policy merely enabled the parties to determine how the fleet would be selected between each season of fishing.

"Generally, the interpretation of: a writing is a task for the court. However, where 'interpretation of a written instrument turns on the acceptance of extrinsic evidence, the process of weighing such evidence should be for the trier of fact.. " More specifically, we have explained that

[wJhether there is conflicting extrinsic evidence is a question resolved by the court. Even where there is conflicting extrinsic evidence the court decides the question of meaning except where the written language, when read in context with its subject matter, is reasonably susceptible to both asserted meanings. If the language is susceptible to both asserted meanings, then interpreting the contract is a question of fact for the jury. Extrinsic evidence may always be received in resolving [this issue].[]

Viewing the totality of the evidence in the present case in the light most favorable to Froines, we find extrinsic evidence that, if accepted, is reasonably susceptible to being viewed as proof of a renewal policy that would supplement, rather than contradict, the terms of the annual vessel charter agreements. In context, the alleged renewal policy could reasonably be seen as merely determining how the association would select candidates for its fleet from season to season-a subject beyond the narrower scope of the fixed-period charter agreements. So construed, the renewal policy would neither extend nor alter the terms of the annual charter agreements; it would simply promise those vessel owners who were invited to join the current year's fleet that, in return for a productive season of fishing under the current charter agreement, they would be invited back to fish with the fleet the following year under whatever terms the association might offer them-assuming that the association elected to retain its fleet method of cost-recovery fishing." Accordingly, the alleged renewal policy would not contradict the terms of the vessel charter agreements.

Because the alleged renewal policy is not inconsistent with the charter agreements, the parol evidence rule does not bar extrinsic evidence tending to prove the policy's adoption and continued existence. And because reasonable jurors viewing the evidence in the light most favorable to Froines could find that the association adopted and breached a policy of this kind, we conclude that entry of summary judgment for the association amounted to error.

IV. CONCLUSION

For these reasons, we REVERSE the superior court's judgment and REMAND the case for further proceedings.

EASTAUGH, Justice, not participating.

      . The board also voted to terminate a second vessel from the fleet in 1998, the Kerrt Lynn, a vessel that had consistently been the fleet's lowest producer and whose owner had experienced ongoing problems maintaining a regular fishing schedule. Because the projected cost-recovery harvest for 1998 had increased significantly over prior years, the board decided to add three new boats to the fleet: two to replace the Nikkt Ann and the Kerrt Lynn, and a new boat to restore the fleet to its original size of ten vessels.

      . Froines also moved to exclude the testimony of other fishermen expressing their subjective impressions concerning whether the board's actions amounted to the adoption of a contractually binding renewal policy, and to preclude the association from relying on its annual vessel charter contracts as a legal basis for denying the existence of a renewal policy as a matter of law.

      . E.g., Philbin v. Matanuska-Susitna Borough, 991 P.2d 1263, 1265 (Alaska 1999).

      . E.g., id. at 1270; Alaska Diversified Contractors, Inc. v. Lower Kuskokwim Sch. Dist., 778 P.2d 581, 583 (Alaska 1989). Alaska's version of the parol evidence rule is stated in AS 45.02.202:
      Final written expression; parol or extrinsic evidence. Terms with respect to which the confirmatory memoranda of the parties agree, or which are otherwise set out in a writing intended by the parties as a final expression of their agreement with respect to the terms included in the writing, may not be contradicted by evidence of a prior agreement or of a contemporaneous oral agreement, but may be explained or supplemented
      (1) by course of dealing or usage of trade (AS 45.01.205) or by course of performance (AS 45.02.208); and
      (2) by evidence of consistent additional terms unless the court finds the writing was intended also as a complete and exclusive statement of the terms of the agreement.
      This provision codifies the parol evidence rule in section 2-202 of the Commererar Cope and parallels section 215 of the Restatement (Seconp) or Contracts. See Alaska N. Dev., Inc. v. Alyeska Pipeline Serv. Co., 666 P.2d 33, 36, 39 n. 5 (Alaska 1983).

      . Restatemznt (SEconp) or Contracts § 210 (1981).

      . AS 45.02.202(2); see also Restatement (SEconp) or Contracts §§ 215, 216(1) (1981).

      . AS 45.02.202(2); Restatement (Secomp) or ConTracts § 216(1) (1981).

      . E.g., Alaska Diversified Contractors, Inc., 778 P.2d at 583.

      . Western Pioneer, Inc. v. Harbor Enters., Inc., 818 P.2d 654, 657 n. 4 (Alaska 1991) (citations omitted).

      . Western Pioneer, Inc., 818 P.2d at 657 n. 4; see also Northern Timber Corp. v. State, Dep't of Trans. & Pub. Facilities, 927 P.2d 1281, 1287 (Alaska 1996) (quoting Western Pioneer, Inc. and applying the three-part test); Neal & Co., Inc. v. Ass'n of Village Council Presidents Reg'l Hous. Auth., 895 P.2d 497, 504 (Alaska 1995) (same).

      . 541 P.2d 740, 748 (Alaska 1975).

      . The court went on to determine that evidence of the renewal agreement also could not be admitted as proof of a separate contract, concluding that it would have been natural for the parties to have included the renewal agreement in the charter contracts if they had meant to adopt it. But as the superior court itself seems to have recognized, this analysis would have applied only if the court had found the charter agreements to be fully integrated contracts-an issue that the court never addressed. In any event, our conclusion that reversal is necessary because the alleged renewal agreement would not necessarily have contradicted the charter agreements makes it unnecessary to address this alternative analysis.

      . Under Kupka v. Morey, however, an integration clause is not completely self-validating, since parol evidence must be considered to determine whether the clause is valid:
      [CJontracts containing such clauses are partially integrated so that parol evidence may not be used to prove a provision that contradicts or is inconsistent with a specific term of the contract (other than the integration clause itself).
      541 P.2d at 748. Here, of course, the superior court had no need to consider parol evidence in determining the validity of the integration clause under Kupka, since Froines essentially acknowledged that the charter contracts were partially integrated agreements.

      . - Alyeska Pipeline Serv. Co. v. O'Kelley, 645 P.2d 767, 777 n. 1 (Alaska 1982) (citations omitted).

      . Id. at 771 n. 2 (citation omitted) (quoting Hausam v. Wodrich, 574 P.2d 805, 809 (Alaska 1978)).

      . Western Pioneer, Inc. v. Harbor Enters., Inc., 818 P.2d 654, 657 n. 4 (Alaska 1991) (citations omitted).

      . | In our view, the evidence in the record fails to suggest any implied promise or commitment by the association to retain its fleet method of fishing from one year to the next, thus necessarily making any right of renewal accruing to successful fleet members at the end of a season contingent on the association's election to pursue the same method of cost-recovery fishing the following year.

      . In analyzing the viability of the alleged renewal policy as a separate contract, the superior court expressed the view that this kind of arrangement would fail for want of sufficiently specific terms and for lack of consideration. We disagree. As described, the terms of the bargain are fairly specific: in return for a productive season of fishing (defined as not being the least productive boat in the fleet), the alleged renewal policy promises that if the fleet method is continued, current fleet members will be invited back to fish again the following season. Nor would this arrangement lack mutual consideration. From the association's point of view, as Mike Wells observed when he recommended the renewal policy to the board in 1995, the policy offered an equitable way of rotating new boats into the fleet, while simultaneously encouraging more efficient production by helping "to put some additional incentive on the fishermen to not be the last in line." And from the cost-recovery fleet's perspective, the policy offered a way of earning the right to be invited to fish again if the association retained its fleet system the following year.

      . - Froines additionally maintains that the superi- or court erred in denying his motion for partial summary judgment on the issue of liability. We find no merit to this point since, in our view, substantial evidence supports both parties' positions and raises genuine issues of material fact that preclude summary judgment. Froines separately argues that the court erred in denying his motion to exclude testimony concerning subjective impressions as to the scope and meaning of the disputed renewal policy. But this argument raises evidentiary issues that are ordinarily committed to the sound discretion of the trial court in the first instance. Because the court's denial of Froines's motion to exclude this evidence appears to have been dictated by its ruling on the parol evidence issue, which we have now reversed, we see no need to address this evidentia-ry point at present.


source: Caselaw Access Project

author: DURHAM, Chief Justice:

license: Public Domain

text:
    2003 UT 29
    The COMMITTEE OF CONSUMER SERVICES, Department of Commerce, State of Utah, Petitioner, v. PUBLIC SERVICE COMMISSION OF UTAH, Questar Gas Company, and Magnesium Corporation of America, Respondent.
    Nos. 20000893, 20020810.
    Supreme Court of Utah.
    Aug. 1, 2003.
    See also 34 P.3d 218.
    Reed T. Warnick, Asst. Att'y Gen., Robert A. Peterson, Salt Lake City, for petitioner.
    Michael Ginsberg, Asst. Att'y Gen., Gary G. Sackett, Sander J. Mooy, C. Seott Brown, Colleen Larkin Bell, Salt Lake City, for respondent.
   DURHAM, Chief Justice:

T1 The Committee of Consumer Services (Consumer Services), seeks review of an order by the Utah Public Service Commission (the Commission) approving a gas rate increase. The increase was sought to cover costs resulting from the construction and operation of a carbon dioxide (CO;) processing plant by an affiliate of Questar Gas Company (Questar Gas).

BACKGROUND

12 On November 25, 1998, Questar Gas submitted an application to the Commission under Utah Code sections 54-4-1 and 54-7-12(8)(a) and commission rule 746-100-8 for approval of a proposed contract with its affiliate, a Questar Pipeline Company subsidiary (Questar Pipeline). The contract provided that Questar Pipeline would construct a processing plant (CO; plant) to reduce CO; in coal seam gas that Questar Pipeline was transporting interstate to external destinations. The processing plant was needed because the CO; brought in by upstream gas caused gas heat (BTU) levels in Questar Gas service areas that, according to Questar Gas, posed a safety risk to its customers. In its application, Questar Gas also requested authorization to include the costs of constructing and operating the CO; plant in calculating its account 191, ultimately transferring these costs directly to ratepayers. In its December 3, 1999 report and order, the Commission denied Questar Gas's request on the basis that the CO; plant costs were not the kind of expenses that could be allowed under Utah Code section 54-7-12@B)(d)G), which is known as the pass-through statute. In re Questar Gas Co., 1999 Utah PUC Lexis 86. The Commission acknowledged its own authority to fix rates and set accounting practices for utilities but recognized as well that "when we do change rates we must follow procedures which ensure rates will be just and reasonable," and that "whatever the procedure by which rates are changed, the utility still has the burden of establishing that the rates will be just and reasonable." Id. at *7, 9. The Commission noted that Questar Gas had an additional burden to establish the prudence of its contract with Questar Pipeline because of their affiliate relationship. Id. at "11 n. 2 (citing U.S. West Communications v. Utah - Pub. Serv. Comm'n, 901 P.2d 270 (Utah 1995)). The Commission purposely did not address whether Questar Gas's decision to enter into the contract with Questar Pipeline was prudent, whether the terms of the contract were reasonable, or whether the expenses incurred under the contract were "legitimate and reasonable utility expenses that may be recovered from utility customers." Id. at *13. Rather, it determined that, even assuming the prudence of the contract and the reasonableness of its terms, Questar Gas had failed to present substantial evidence that the resulting rates would be just and reasonable. Id.

13 Questar Gas sought judicial review of the Commission's decision in this court. In Questar Gas Co. v. Utah Pub. Serv. Comm'n, 2001 UT 93, 34 P.3d 218, we set aside the Commission's report and order, holding that Questar Gas's use of account 191 to recover costs was not limited to requests under the pass-through statute. In that case, Questar had argued that the use of account 191 "is ... a separate mechanisgm-with its own procedures-used to facilitate the transfer of certain unexpected costs on a dollar-for-doi-lar basis from the utility to its customer." Id. at ¶ 6. We based our decision on the Commission's own prior practices, noting that the Commission, when reviewing Ques-tar Gas's use of account 191, determined in an informal proceeding whether the resulting rates were "just, reasonable and cost justified" and whether their approval was "in the public interest." Id. at 114. We held, further, that the 191 account mechanism should yield a just and reasonable rate because Questar Gas's tariff, previously approved by the Commission, already set out the formula by which rates would be determined, based on the costs and revenues assigned to different accounts. Id. at 115. We remanded the case to the Commission for further consideration in accord with the 191 account mechanism procedures. Id. at 1 20.

{4 On December 17, 1999, over a year before we issued our 2001 decision, Questar Gas filed a general rate proceeding, which included a request under Utah Code section 54-1-12(8)(a) for interim rate relief of over $7 million annually to cover the CO; plant operating costs. Questar Gas also included previously unrecovered CO; plant operating costs in its general assessment of its total revenue deficiency. Questar Gas did not, however, seek approval of its contract with Questar Pipeline. The Commission held a hearing to consider Questar Gas's request for interim rate relief and granted the request on January 25, 2000. On February 14, 2000, Consumer Services petitioned the Commission for reconsideration or rehearing regarding the interim rate increase, arguing that the increase was not legally proper, factually supported, or in the public interest. By declining to respond to Consumer Services's request, the Commission affirmed its January 25th order. On June 2, 2000, Questar Gas and the state Division of Public Utilities (the Division) filed a stipulation (the CO; Stipulation) that "resolvied] between them the issues of cost recovery and ratemaking treatment of gas processing costs," and agreed that annual CO; plant costs in the amount of $5 million should be passed on to ratepayers. In re Questar Gas Co., 203 P.U.R.4th 356 at 29, 2000 WL 1451221 (Utah 2000). The Commission held a hearing regarding the CO; Stipulation on June 23, 2000. Subsequently, two of the intervenors in the rate proceeding, the Large Customer Group and the Industrial Gas Users, withdrew their objections to the COs; Stipulation. Consumer Services, however, continued to object. Nevertheless, in its final report and order, issued on August 11, 2000, the Commission accepted the CO; Stipulation.

T5 In making this decision, the Commission determined that it need not rule on whether Questar Gas's decision to contract with its affiliate Questar Pipeline was prudent. The Commission specifically acknowledged that "[tlhe record is insufficient to permit us to determine whether [Questar Gas]'s analysis of options prior to early 1998 was sufficiently objective and thorough, that is, to reach a conclusion whether options were ruled in or out as a result of the influence of affiliate interests. Nor can a sufficient record be developed." Id. at 34. The Commission acknowledged that Questar Gas's prudence in this matter remained "[the most troubling question" and that the burden to demonstrate prudence was on Questar Gas. Id. at 35. However, the Commission went on to determine that "[olnee coal seam gas became a persistent threat to the BTU content of [Questar Gast's gas supply, customer safety was threatened and an effective response was mandatory." Id. at 34. The Commission reasoned that it could decide the legitimacy of recovering COz plant operating costs from ratepayers without determining whether the underlying affiliate contract was prudent because Questar Gas had not specifically applied for a decision on the latter issue. Id. at 35. The Commission then accepted the argument that $5 million per year, which represented 68% of the costs of CO; processing, represented a "fair and reasonable settlement of the cost recovery issue," based on the Commission's assessment of the probable result if the allocation issue had been brought before the Federal Energy Regulatory Commission (FERC) in the first place. Id. at 36.

T6 In dissent, commission chairman Stephen F. Mecham argued that since "[the CO;2 gas processing plant issue turns on what [FERC] would have done had Questar Gas first taken the case there," the Commission should have required Questar Gas to obtain a ruling from FERC before making its deci-gion. Id. at 60 (noting that the Commission had been "left with too many questions the answers for which [it] can only surmise"). According to Chairman Mecham, while FERC might have imposed COs plant costs on consumers, "[it is just as conceivable that the FERC would have required producers to meet Questar Gas's needs" rather than fore-ing Questar Gas to cover the cost itself by raising rates. Id.

T7 After the Commission refused Consumer Services's petition for reconsideration, Consumer Services sought judicial review in this court under Utah Code section 78-2-(2002).

STANDARD OF REVIEW

¶ 8 Section 63-46b-16 of the Utah Administrative Procedures Act governs this court's review of administrative agency decisions based on formal adjudicative hearings. Utah Code Ann. § 63b-46b-16 (1997 & Supp. 2002). The statute provides, in pertinent part, that a court may grant relief to a petitioner seeking review of a final agency action where:

(d) the agency has erroneously interpreted or applied the law;
(e) the agency has engaged in an unlawful procedure or decision-making process, or has failed to follow prescribed procedure;
(g) the agency action is based upon a determination of fact, made or implied by the ageney, that is not supported by substantial evidence when viewed in light of the whole record before the court;
(h) the agency action is:
(i) an abuse of the discretion delegated to the agency by statute;
(Mi) contrary to the agency's prior practice, unless the ageney justifies the inconsistency by giving facts and reasons that demonstrate a fair and rational basis for the inconsistency; or
(iv) otherwise arbitrary or capricious.

Id. § 68-46b-16(4). Unless the legislature has granted discretion to an agency to interpret statutory language, we review an agency's construction of statutory provisions under a correction of error standard, granting the agency no deference. Hegarty v. Bd. of Oil, Gas, & Mining, 2002 UT 82, ¶ 17, 57 P.3d 1042; WWC Holding Co. v. Pub. Serv. Comm'n, 2001 UT 23, ¶ 8, 44 P.3d 714.

{ 9 The parties dispute the applicable standard of review in this case. While Consumer Services contends that the correction of error standard applies and that the Commission's ruling was also an abuse of discretion, the Commission argues that the ruling was within its discretion and was supported by substantial evidence. We discuss the proper standard of review in the course of our analysis below.

ANALYSIS

110 Consumer Services argues that the Commission abused its discretion by failing to determine whether Questar Gas's initial decision to enter into a contract with its affiliate Questar Pipeline to construct and operate the CO; plant was prudent. The Commission's obligation to make a prudence determination stems, according to Consumer Services, from the Commission's own prior pronouncements on the need for close regulation of Questar Gas's affiliate transactions. Consumer Services argues further that the Commission's failure to conform to its previously-stated policy rendered its approval of the CO; Stipulation invalid as a matter of law because the prudence of the underlying contract was a necessary prerequisite to a determination that the rates proposed in the COz Stipulation were just and reasonable. In other words, Consumer Services maintains that Questar Gas's burden of proof in establishing that its proposed rates are just and reasonable includes the burden of showing that the underlying contract between Ques-tar Gas and Questar Pipeline was prudent. Intervenors Crossroads Urban Center and Salt Lake Community Action Program (collectively, Crossroads) argue that Questar Gas bore this burden regardless of the affiliate relationship between it and Questar Pipeline, pointing out that, otherwise, Questar Gas would never have to justify any decisions resulting in increased costs in order to recover these costs from ratepayers. Crossroads also argues that the Commission had no authority to accept the CO; Stipulation because the stipulation was contested by some of the parties and could not, consistent with the Commission's statutory obligations, serve as a substitute for an independent determination that the proposed rate increase was just and reasonable.

{11 In response, the Commission argues that its decision to assign a percentage of CO; plant costs to ratepayers is within its regulatory discretion. The Commission maintains that the CO; plant was Questar Gas's only available option to ensure the safety of its customers and that therefore a determination of the prudence of Questar Gas's choice to contract with Questar Pipeline to build and operate the plant was irrelevant. Because the result was "necessary," it would not be just or reasonable to prevent Questar Gas from recovering its costs even if its decisionmaking process was flawed. Moreover, the Commission notes that the need to reduce CO; levels resulted from Questar Gas's "uniquely high BTU and CO; content standards," thus suggesting that allocating the cost to Questar Gas ratepayers was justified. The Commission argues that the cost allocation proposed in the CO; Stipulation was reasonable based on the Commission's prediction of what FERC would have done. Intervenor Questar Gas argues that the Commission's approval of the CO; Stipulation must be upheld because it is supported by substantial evidence in the record. Ques-tar Gas faults the petitioners for failing to marshal the evidence in support of the Commission's findings and to demonstrate that the evidence was insufficient. In addition, Questar Gas maintains that it met its burden to show that its transaction with Questar Pipeline was justified and that the Commission met its obligation to establish just and reasonable rates.

112 We first note that, despite Questar Gas's position on this point, the record clearly indicates that the Commission did not make a determination that the CO3 plant contract between Questar Gas and Questar - Pipeline was prudent. Indeed, the Commission stated that there were insufficient facts in the record for it to make such a determination, nor could a sufficient record be developed. We note further that the Commission does not contest Consumer Services's claim that a utility is generally obligated to establish that its transaction with an affiliate is prudent before receiving commission approval for the transaction, and that this prudence determination is a prerequisite to the determination of whether a consequent rate increase is just and reasonable. In fact, as noted above, the Commission explicitly recognized these obligations in its original 1998 report and order,. Thus, the real issue in this case is whether the Commission may rely on a "safety exception" that relieves Questar Gas of its burden to demonstrate the prudence of its contract with Questar Pipeline to construct and operate the CO; plant under terms that caused Questar Gas to incur the costs it now seeks to pass on to ratepayers.

T13 Even assuming that the requirement of a prudence review was initially within the Commission's discretion rather than a mandatory legal obligation, it is now an established Commission practice to which the Commission must adhere unless it presents "facts and reasons that demonstrate a fair and rational basis for the inconsistency." Utah Code Ann. § 63-46b-16(4)(h)(ii); see Questar Gas Co. v. Utah Pub. Serv. Comm'n, 2001 UT 93, ¶¶ 18-19, 34 P.3d 218. We hold that the Commission's safety rationale is neither an adequate nor a fair and rational basis for departing from its prudence review standard. While safety concerns may have necessitated the construction and operation of a CO; plant, they do not establish who should bear the cost of these measures. If the record had permitted, the Commission could have carried out its initial obligation to review the prudence of the COs; plant contract and its terms, holding Questar Gas to its burden of establishing that its decision to enter into the contract and the costs it agreed to were prudent and not unduly influenced by its affiliate relationship with Ques-tar Pipeline. Since the Commission found that no such record was or could be made available, it should have refused to grant a rate increase that included CO; plant costs. We therefore overturn the Commission's decision to accept the CO; Stipulation and to grant the rate increase proposed therein.

{14 We note that we would reach the same result under a correction of error standard because the Commission's decision to accept the CO; Stipulation's proposed rate increase constitutes an erroneous application of the law. The Commission erred by failing to hold Questar Gas to its burden of showing that the increase was just and reasonable. Section 54-8-1 mandates that "[alll charges made, demanded or received by any public utility ... for any product or commodity furnished or to be furnished, or for any service rendered or to be rendered, shall be just and reasonable." Utah Code Ann. § 54-8-1 (1997 & Supp.2002). As this court has previously recognized, "[the first prerequisite of a rate order [by the Commission] is that it be preceded by a hearing and findings. At such a hearing the legislature intended there be evidence adduced which could reasonably be calculated to resolve the issue presented for determination," which in that case as in this one was a rate increase. Utah Dep't of Bus. Regulation v. Pub. Serv. Comm'n, 614 P.2d 1242, 1245 (Utah 1980). The utility bears the burden of presenting the evidence necessary to support the Commission's "essential finding{[s]": "In the regulation of public utilities by governmental authority, a fundamental principle is: the burden rests heavily upon a utility to prove it is entitled to rate relief and not upon the Commission, the Commission staff, or any interested party or protestant, to prove the contrary." Id. The Commission "is entitled to know and before it can act advisedly must be informed of all relevant facts," otherwise, "it could not effectively determine whether a proposed rate was justified." Id. at 1246. The utility must therefore put forth substantial evidence to establish that its proposed increase is "just and reasonable." Id. at 1245-46, The Commission, in turn, bears responsibility for holding the utility to its burden.

{15 Here, the Commission focused on its determination that Questar Gas's decision to construct and operate the CO; plant "yielded the required result" by protecting customer safety. In re Questar Gas, 203 P.U.R.4th 356 at 35, 2000 WL 1451221 (Utah 2000). Therefore, the Commission reasoned, COz plant costs "can be legitimately recovered in rates." Id. The CO; Stipulation, the Commission ruled, was a "fair and reasonable settlement of the cost recovery issue" even though there was "[in]sufficient record support to suggest the probable outcome had the case gone to FERC." Id. at 35-36. This analysis fails to hold Questar Gas to its burden of proof. By accepting the CO; Stipulation with no consideration of the prudence of the underlying source of the new costs (Le., the contract between Questar Gas and its affiliate Questar Pipeline), the Commission abdicated its responsibility to find the necessary substantial evidence in support of the proposed rate increase in the record. We are far from certain, moreover, that the Commission could conceivably determine whether a rate increase is just and reasonable without examining whether the underlying cost-incurring activity was reasonable, which in turn seems to require some attention to the utility's decisionmaking process, most particularly where negotiations with an affiliate are involved. Questar Gas's decision not to seek a cost allocation determination from FERC, given the possibility that FERC might have imposed the entire cost on producers rather than on ratepayers, raises further questions regarding the utility's fidelity to its obligations to its customers. See Utah Dep't of Admin. Servs. v. Pub. Serv. Comm'n, 658 P.2d 601, 618 (Utah 1983) (stating that a utility's "monopoly position" imposes upon it a "consequent duty to operate in such manner as to give to the consumers the most favorable rate reasonably possible," and that this obligation is reflected in the statutory "just and reasonable" requirement (internal quotation marks omitted)). While the Commission correctly recognized Questar Gas's obligation to ensure the safety of its customers, it incorrectly concluded that this factor provides a near-automatic justification for a rate increase regardless of how the initial threat to safety arose or how the utility sought to alleviate it.

CONCLUSION

116 We reverse the Commission's order and reject the rate increase proposed by the CO; Stipulation.

1 17 Associate Chief Justice DURRANT, Justice PARRISH, Justice NEHRING, and Judge NOEL concur in Chief Justice DURHAM's opinion.

1 18 Having recused himself, Justice WILKINS does not participate herein; Third District Judge FRANK NOEL sat.

      . According to Questar Gas, BTU levels in its service area were historically high relative to the rest of the United States. Appliances in Questar Gas's service area had therefore originally been set to operate in this higher BTU range. As a result of the decrease in BTU content, Questar Gas had previously filed for and received the Commission's approval to change the standard BTU settings set forth in its tariff, on which vendors and manufacturers rely, effective May 1, 1998. However, Questar Gas maintained in the CO2 plant application that resetting all customer appliances to this new range would be prohibitively expensive, and that treating the gas in the COz plant was a preferable solution.

      . Account 191, part of the Uniform System of Accounts set forth in 18 C.F.R. § 201 (2003) and adopted by the Commission, see Utah Admin. Code R746-320-7 (1993), allows gas utilities to recover gas costs directly from consumers. See Questar Gas Co. v. Utah Pub. Serv. Comm'n, 2001 UT 93, ¶¶ 8-9, 18, 34 P.3d 218.

      . Questar Gas estimated the annual cost at between $7.5 and $8.5 million, or $8 to $9 per customer, which it would pay to Questar Pipeline under the proposed contract.

      . Based on the Commission's finding, discussed below, "that it was impossible to make a [prudence] determination because the record was insufficient and could not be created," we limited our 2001 holding to the question of "the procedure Questar [Gas] should have followed to recover processing costs incurred between June 1999 and August 2000." Questar Gas Co., 2001 UT 93, ¶ 6 n. 7, 34 P.3d 218.

      . The federal government regulates pipeline companies that transport gas in interstate commerce under the Natural Gas Act, 15 U.S.C. §§ 717 et seq. (1992). The Natural Gas Act requires FERC's regulation to be in the public interest.

      . Consumer Services cites the Commission's 1984 decision allowing the reorganization of Mountain Fuel Supply Company as Questar Corporation, In re Mountain Fuel, Case No. 84-057-10, at 22-23 (Utah P.S.C. Oct. 1, 1984), in which the Commission conditioned its approval of the reorganization on continued close regulation by the Commission.

      . According to the Commission, the issue of whether the Commission can accept a contested stipulation was not preserved for judicial review.

      . - Alternatively, if Questar Pipeline had received a determination of the proper cost allocation from FERC, and if the Commission had accepted it, such a determination would likely have constituted a fair and rational basis for departing from the Commission's regular prudence review requirement.


author: GOLDEN, Justice. LEHMAN, Justice,

text:
    2003 WY 101
    Bruce HOOS, Appellant (Defendant), v. The STATE of Wyoming, Appellee (Plaintiff).
    No. 00-224.
    Supreme Court of Wyoming.
    Aug. 26, 2003.
    Representing Appellant: Dion J. Custis, Cheyenne, Wyoming.
    Representing Appellee: Hoke MacMillan, Wyoming, Attorney General; Paul S. Rehu-rek, Deputy Attorney General; D. Michael Pauling, Senior Assistant Attorney General; ~Georgia L. Tibbetts, Senior Assistant Attorney General.
    Before HILL, C.J., and GOLDEN, LEHMAN , KITE, and VOIGT, JJ.

       Chief Justice at time of expedited conference

   GOLDEN, Justice.

[11] In this appeal, the primary issue we must consider is whether the presence of the alternate juror for a brief forty minutes during jury deliberations presents reversible error. Appellant Bruce Hoos was convicted for one count of conspiracy to commit livestock rustling and challenges the presence of the alternate as a constitutional violation. He presents other issues; however, we agree that the presence of the alternate juror during deliberations warrants reversal and is dispositive of this appeal.

[12] We reverse and remand for a new trial on one count of conspiracy to commit livestock rustling.

ISSUES

[13] Hoos and the State agree on the following statement of issues:

I. Whether the trial court violated Wyoming Rules of Criminal Procedure 24(e) and appellant's constitutional right to a fair jury when it allowed an alternate juror in the jury room during deliberations?
a. Did the trial court abuse its discretion and commit reversible error when it denied Appellant's motion for a mistrial?
II. Whether there was sufficient evidence to convict appellant of conspiracy without substantial evidence?
III. Whether the prosecution engaged in misconduct when he admitted inadmissible evidence to jury knowing that the evidence was improper 404(b) and 608 evidence?

FACTS

[14] Tally Sharpe and Joseph Merante, college friends of Hoog' son, claimed they were recruited by Hoos to steal horses to sell to him. The two stole five horses from a Lusk, Wyoming, rancher and sold them to Hoos for $1,500.00. Hoos sold one of the stolen horses at a public auction. The purchaser of the horse was the Lusk rancher from whom the horses had been stolen. The sale prompted a police investigation during which Hoos told authorities that he had raised the horses, but he later admitted that he had bought the horses from Sharpe and Merante. Sharpe and Merante provided police with confessions implicating Hoos in a conspiracy to steal horses. Hoos was charged and tried for accessory before the fact in violation of Wyo. Stat. Ann. § 6-1-402(e) and conspiracy to commit livestock rustling in violation of Wyo. Stat. Ann. § 6-1-803 and § 6-4-402(c).

[T5] Before trial, Hoos requested notice of W.R.E. 404(b) and W.R.E. 608 evidence that was not received and filed a motion in limine to prohibit the State from introducing prior misconduct evidence. The record shows that a pretrial order was entered prohibiting the State and its witnesses from mentioning prior drug usage and/or prior convictions involving the defendant. At trial, during Hoog' eross-examination, the State asked whether he had been fired as a brand inspector twenty years earlier for making out false expense vouchers. Hoos' objection to the line of questioning was sustained, and further questioning was prohibited; however, his motion for mistrial was denied.

[T6] At the close of trial, the alternate juror retired with the rest of the jury to the jury room for deliberations. Forty minutes later, the jury notified the trial court that the alternate juror had not been dismissed. The court instructed the bailiff to notify the jury to stop deliberating and gave counsel two alternatives: either stipulate to a thirteen person jury or bring the jury back, discharge the alternate juror, and issue an instruction to the remaining jurors to disregard anything said by the alternate. Hoos objected and moved for a mistrial based on the error. The trial court denied the motion and instructed the jury to disregard the alternate juror's input and returned them to the jury room for further deliberations. The instruction given stated:

For the rest of you, ladies and gentlemen, I am going to ask that you return to the jury room and deliberate and decide this case without any regard to [the alternate's juror's input]. If she participated, and we don't know whether she participated and had input in your deliberations at this point or not, but if she did, I will ask you to reconsider all of that deliberation without her input.

[17] The jury returned a verdict acquitting Hoos' on the accessory charge but convicting for the conspiracy. This appeal followed.

DISCUSSION

[T8] On appeal, Hoos contends that the trial court's failure to ascertain the extent of the alternate's input into the deliberations requires reversal and remand for a new trial because either (1) it is error per se; (2) the State failed to show the absence of prejudice; or (8) the trial court's instruction failed to properly instruct the jurors to begin deliberations anew. This argument presents a question of law that we review de novo.

[19] Hoos focuses his argument on the plain language of W.R.Cr.P. 24(e), which provides:

Alternate jurors. -The court may direct that not more than six jurors in addition to the regular jury be called and impanelled to sit as alternate jurors. Alternate jurors in the order in which they are called shall replace jurors who, prior to the time the jury retires to consider its verdict, become or are found to be unable or disqualified to perform their duties Alternate jurors shall be drawn in the same manner, shall have the same qualifications, shall be subject to the same examination and challenges, shall take the same oath and shall have the same functions, powers, facilities and privileges as the regular jurors. An alternate juror who does not replace a regular juror shall be discharged after the jury retires to consider its verdict.

(emphasis added).

[{10] We have previously decided that with proper procedural safeguards, an alternate juror who has been discharged may subsequently replace a juror although the jury has begun deliberations, Alcalde v. State, 2008 WY 99, 110. This case requires that we determine the prejudicial effect of a trial court's failure to dismiss an alternate juror as required by Rule 24. The rule is modeled after an early version of the federal rule of eriminal procedure and contains the same language that the United States Supreme Court has noted is mandatory. United States v. Olano, 507 U.S. 725, 737, 113 S.Ct. 1770, 1779, 123 L.Ed.2d 508 (1993). Generally, our approach to such an instance is to look to federal case law for guidance in the interpretation of our rule of criminal procedure where the state and federal rules of eriminal procedure are similar. Brock v. State, 981 P.2d 465, 469 (Wyo.1999).

[T11] Olano examined whether a federal appeals court had properly applied the plain error review standard where attorneys had consented to the presence of an alternate during jury deliberations. The Court noted that a judge's failure to abide by the strictures of Rule 24(c) violates the cardinal principle that the deliberations of the jury shall remain private and secret in every case. Olano, 507 U.S. at 737, 113 S.Ct. at 1779. Although defense attorneys had consented to the alternate's presence and the trial court had instructed the jurors that the alternate was not to participate in the deliberations in any fashion, the Court held that the right to a jury free from outside influence cannot be waived. Id.

[112] Olano recognized that the presence of alternate jurors during jury deliberations might prejudice a defendant specifically or presumptively either because the alternates actually participated in the deliberations, verbally or through "body language," or because the alternates' presence exerted a "chilling" effect on the regular jurors. Id. at 739, 113 S.Ct. at 1780. Olano's particular facts did not require it to presume prejudice. Id. at 740, 113 S.Ct. at 1781. In Hoos' trial, no hearing was held to determine whether the alternate actually participated in jury deliberations, raising the issue of whether this matter should be remanded to the trial court for such a hearing. That option, however, appears to be precluded by W.R.E. 606(b)'s restrictions to the seope of inquiry that can be made into jury deliberations. It states:

(b) Inquiry Into Validity .of Verdict or Indictment.-Upon an inquiry into the validity of a verdict or indictment, a juror may not testify as to any matter or statement occurring during the course of the jury's deliberations or to the effect of anything upon his or any other juror's mind or emotions as influencing him to assent to or dissent from the verdict or indictment or concerning his mental processes in connection therewith, nor may his affidavit or evidence of any statement by him concerning a matter about which he would be precluded from testifying be received but a juror may testify on the questions whether extraneous prejudicial information was improperly brought to the jury's attention or whether any outside influence was improperly brought to bear upon any juror.

Olano recognized that F.R.E. 606(b) would be implicated if a hearing had been requested; however, it determined that it need not address the issue on its facts. Olano, 507 U.S. at 740, 113 S.Ct. at 1781. Additionally, Olano's majority, concurring, and dissenting opinions all noted concern with protecting the integrity of jury deliberations and the difficulties in determining the effect on jury deliberations caused by an alternate's participation.

[T183] Wyoming's W.R.Cr.P. 24(e) and W.R.E. 606(b) articulate the means for protecting the integrity of Wyoming jury deliberations, and we find that the more pertinent teachings of Olano should be carefully considered. "The presence of alternate jurors during jury deliberations is not the kind of error that 'affects substantial rights' independent of its prejudicial impact." Olano, 507 U.S at 737, 113 S.Ct. at 1779. We agree that, without more, the mere presence of alternate jurors during deliberations is not error per se and our ultimate inquiry is whether, by their presence, any participation occurred. We, therefore, assess whether the presence of an alternate juror throughout the deliberations of the jury prejudiced the defendant either "specifically or presumptively." Id. at 739, 113 S.Ct. at 1780. "[Thhe Supreme Court has cautioned that some errors to which no objection was made should be 'presumed prejudicial if the defendant cannot make a specific showing of prejudice." United States v. Brown, 316 F.3d 1151, 1159 n. 3 (10th Cir.2003) (citing United States v. Adams, 252 F.3d 276, 285 (3d Cir.2001)(quoting Olano, 507 U.S. at 735, 113 S.Ct. at 1778)). We agree that the prejudice or its absence arising from an alternate's participation during jury deliberations cannot be assessed, and, in any event, after a verdict has been rendered an attempt could not be made without impermissibly inquiring into the effect of the matter upon each juror's mind in violation of Rule 606(b). Manning v. Huffman, 269 F.3d 720, 725 n. 2 (6th Cir. 2001).

[T14] In this case, however, the particular facts show that participation must be presumed to have occurred. The trial court was notified during deliberations that the jury had been sent to the jury room to deliberate and presumably had been deliberating for some forty minutes before notifying the court of the alternate juror's presence. Because deliberations had actually commenced, participation either by words or gestures must be presumed to have occurred. The juror's participation requires that we determine that prejudice is manifest and the defendant has no obligation to show that he has been prejudiced by the error.

[115] Such participation by an alternate is a violation of W.R.Cr.P. 24(e). Trial courts are charged with the responsibility to consistently administer all procedural rules; however, we must disagree with Hoos' contention that this error is reversible error per se. Although Hoos may have no obligation to show error, the presumption of prejudice requires that the State show that the prejudicial influence of the alternate juror's participation in deliberations had no effect on the jury's final verdict. We have determined that, in some cireumstances, adequate procedural safeguards or the trial court's curative action can overcome such prejudice and "ensure that the defendant received a fair trial." See Alcalde, 2003 WY 99, ¶ 10 (prejudice can be rebutted "upon a showing that adequate procedural safeguards were undertaken," but case reversed because trial court did not utilize adequate procedural safeguards).

[116] W.R.E. 606 does not prohibit inquiry of jurors during trial that is limited to an assessment of whether jurors will be able to begin deliberations anew upon receiving instructions designed to cure prejudice arising from the failure to dismiss the alternate on schedule. Recognizing the rule violation, the trial court attempted to cure the error by dismissing the alternate and instructing the jury to begin deliberations anew. The prejudice to the defendant posed by the alternate's presumed participation required that upon discharging the alternate juror, the trial court should have instructed the remaining jurors to "recommence deliberations anew and [should have inquired] whether they would be capable of disregarding their previous deliberations and any opinions formed during those deliberations." Alcalde, ¶ 9.

[117] Only by these curative instructions and procedural safeguards can the State show the absence of prejudice regarding the jury's final verdict. The trial court's failure to inquire of the remaining jurors necessitates that we find that the State has not carried its burden of proving that the alternate's participation had no prejudicial influence on the jury's deliberations and final verdict. Consequently, this case is reversed and remanded for new trial on the conspiracy charge.

[118] Reversed and remanded for proceedings consistent with this opinion.

GOLDEN, J., delivers the opinion of the court; LEHMAN, J., files a dissenting opinion.

LEHMAN, Justice,

dissenting.

[119] I respectfully dissent.

[120] I agree that the inadvertent failure to dismiss the alternate juror violated W.R.Cr.P. 24(e), which specifies, "An alternate juror who does not replace a regular juror shall be discharged after the jury retires to consider its verdict." (Emphasis added.) However, while it is surely error to allow an alternate to participate in jury deliberations, I cannot say that the inadvertent presence of an alternate, who is for all purposes as qualified as every other juror in a case, for a portion of the deliberations irretrievably prejudices the regular jury.

[121] -In United States v. Olano, 507 U.S. 725, 787-88, 118 S.Ct. 1770, 1779-80, 128 L.Ed.2d 508 (1993) (emphasis added), the Court stated:

The presence of alternate jurors during deliberations is not the kind of error that "affect[s] substantial rights" independent of its prejudicial impact....
. Although the presence of alternate jurors does contravene " 'the cardinal principle that the deliberations of the jury shall remain private and secret, " Advisory Committee's Notes on Fed. RuleCrim.Proc. 28(b), 18 U.8.C.App., p. 785 (quoting United States v. Virginia Erection Corp., 385 F.2d 868, 872 (C.A.4 1964)), the primary if not exclusive purpose of jury privacy and secrecy is to protect the jury's deliberations from improper influence. "[If no harm resulted from this intrusion [of an alternate juror into the room,] reversal would be pointless." United States v. Watson, 669 F.2d 1374, 1391 (C.A.11 1982).

Such statements suggest a harmless error standard be applied in jury intrusion situations, especially considering that the phrase "substantial rights" appears in both the plain error and the harmless error standard. W.R.Cr.P. 52(a) and (b).

[122] In that respect I would embrace the analysis of the Eleventh Circuit in United States v. Acevedo, 141 F.3d 1421 (11th Cir.1998). In Acevedo, the alternate jurors were inadvertently sent to deliberate with the regular jury and did, in fact, deliberate with the jury for less than an hour, even reaching a unanimous verdict. Id. at 1422. The judge sealed the verdict, dismissed the alternates, and instructed the regular jurors "to commence deliberations as if anew, taking into consideration all of the instructions I previously gave you." Id. at 1423. The jury deliberated for approximately five more minutes and returned a guilty verdict. Id. Acevedo made a motion for mistrial, which the district court denied. On appeal, Acevedo claimed that the error was reversible as a matter of law and that the prejudice he suffered from the alternates' presence was incurable.

[123] In resolving this issue, the Eleventh Cireuit opined:

The Supreme Court has held that the mere presence of an alternate in the jury room during deliberations is not inherently prejudicial to the defendant. See United States v. Olano, 507 U.S. 725, 739-41, 113 S.Ct. 1770, 1780-81, 123 L.Ed.2d 508 (1993). The Court, however, implied that once the alternate participates in any way-whether through words or gestures-prejudice is manifest. See id. at 739, 118 S.Ct. at 1780 (prejudice may arise "either because the alternates actually participated in the deliberations, verbally or through 'body language'; or because the alternates' presence exerted a 'chilling' effect on the regular jurors" (citations omitted)).

Id. at 1424. Nevertheless, the decision then went on to say that the court would assume that the alternates were a prejudicial influence on the jury's deliberations but that a mistrial is only warranted if there is a reasonable possibility that the violation actually prejudiced Acevedo by affecting the jury's final verdict. Id. The Eleventh Circuit further decided that any prejudice caused by such an error is in fact curable. Therefore, the true question becomes whether the district court's instruction eliminates the threat of prejudice to the defendant posed by the alternate's initial participation. Id. at 1426.

[124] In Olano, at least one alternate juror stayed for the entire deliberations. Here, the alternate was in deliberations for only forty minutes and was excused before a verdiet was reached. While time is not nee-essarily determinative of the level of prejudice, it may indicate the extent to which the alternate actually participated. - Furthermore, it must be recognized that an alternate juror is not simply an outside intrusion. I simply cannot equate an alternate juror to a stranger. I agree with the statement made by Justice O'Connor in Olano, when she said:

The Court of Appeals was incorrect in finding error "inherently prejudicial." Until the close of trial, the 2 alternate jurors were indistinguishable from the 12 regular jurors. Along with the regular jurors, they commenced their office with an oath, received the normal initial admonishment, heard the same evidence and arguments, and were not identified as alternates until after the District Court gave a final set of instructions.

Olano, at 740, 113 S.Ct. at 1781 (citations omitted.) I would further add that, under our established rules in Wyoming, the alternate juror was required to go through the same voir dire process, to have the same impartiality, and to have the same qualifications as the regular juror counterparts. Thus, I would hold that whatever prejudice might have resulted from the alternate's presence was minimal in this case.

[125] The ultimate inquiry is whether the trial court's instructions cured the threat of prejudice. We have long held we assume that the jurors followed the court's instructions. Marquez v. State, 12 P.3d 711, 717 (Wyo.2000) (citing Burke v. State, 746 P.2d 852, 857 (Wyo.1987)). The jury was instruct, ed to disregard what the alternate had said. The jurors were to "reconsider all of that deliberation without her input." While the instruction was not as explicit as that in Acevedo, explicitly informing the jury that they should begin anew, I would consider it sufficient in this case.

[126] Accordingly, I would hold that, in light of the judge's instruction, the violation of Rule 24(e) did not affect Hoosg' substantial rights and is, therefore, harmless error.

      . FR.Cr.P. 24(c) (West Group 1999) provided:
      ALTERNATE JURORS. The court may direct that not more than 6 jurors in addition to the regular jury be called and impanelled to sit as alternate jurors. Alternate jurors in the order in which they are called shall replace jurors who, prior to the time the jury retires to consider its verdict, become or are found to be unable or disqualified to perform their duties. Alternate jurors shall be drawn in the same manner, shall have the same qualifications, shall be subject to the same examination and challenges, shall take the same oath and shall have the same functions, powers, facilities and privileges as the regular jurors. An alternate juror who does not replace a regular juror shall be discharged after the jury retires to consider its verdict. Each side is entitled to 1 peremptory challenge in addition to those otherwise allowed by law if 1 or 2 alternate jurors are to be impanelled, 2 peremptory challenges if 3 or 4 alternate jurors are to be impanelled, and 3 peremptory challenges if 5 or 6 alternate jurors are to be impanelled, The additional peremptory challenges may be used against an alternate jury only, and the other peremptory challenges allowed by these rules may not be used against an alternate juror.