Notice: This opinion is subject to correction before publication in

the Pacific Reporter. Readers are requested to bring errors to the attention of

the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone

(907) 264-0608, fax (907) 264-0878.

THE SUPREME COURT OF THE STATE OF ALASKA

E. E. WALDROUP, D.C. d/b/a )

CHIROPRACTIC HEALTH CLINIC ) Supreme Court No. S-9409

and HEALTHBEAT OF ALASKA, )

) Superior Court No.

Appellants, ) 3AN-97-9446 CI

)

v. ) O P I N I O N

)

MELISSA A. LINDMAN, and ) [No. 5448 - August 10, 2001]

ALLSTATE INSURANCE COMPANY, )

)

Appellees. )

______________________________)

Appeal from the Superior Court of the State of

Alaska, Third Judicial District, Anchorage,

John Reese, Judge.

Appearances: Richard G. Haggart and David W.

Murrills, Law Offices of Richard G. Haggart,

Anchorage, for Appellants. Barry J. Kell and Audrey H. Faulkner,

Wilkerson & Associates, Anchorage, for Appellees.

Before: Fabe, Chief Justice, Matthews,

Eastaugh, Bryner, and Carpeneti, Justices.

EASTAUGH, Justice.

I. INTRODUCTION

The insurer of a chiropractor's patient denied payment

for treatment the insurer considered unreasonable and unnecessary.

It offered to defend the patient if the chiropractor sued her for

payment. The chiropractor sued the insurer, alleging interference

with contractual relations. Was it error to grant summary judgment

to the insurer on that claim? Because the insurer had a direct

financial interest in the contractual relationship between its

insured and the chiropractor, and because there was insufficient

evidence to raise a genuine issue of material fact to support a

claim that an improper purpose motivated the insurer, we hold that

any interference by the insurer was privileged as a matter of law.

We therefore affirm the grant of summary judgment.

II. FACTS AND PROCEEDINGS

On February 15, 1995 a vehicle rear-ended an automobile

in which Melissa Lindman was a passenger. Lindman was insured

under an Allstate Insurance Company automobile insurance policy

which provided for payments for "all reasonable expenses incurred

for necessary treatment actually rendered within one year of [an]

accident because of [a] bodily injury."

Lindman went the next day to the Chiropractic Health

Clinic, the clinic of E.E. Waldroup, Doctor of Chiropractic.

Lindman complained of back and neck pain and headaches.

Before Dr. Waldroup examined her, Lindman completed and

signed a patient intake form, which provided:

I understand and agree that health and

accident insurance policies are an arrangement between an insurance

carrier and myself. Furthermore, I understand that the

Chiropractic Health Clinic will prepare any necessary reports and

forms to assist me in making collection from the insurance company

and that any amount authorized to be paid directly to the

Chiropractic Health Clinic will be credited to my account on

receipt. However, I clearly understand and agree that all services

rendered me are charged directly to me and that I am personally

responsible for payment. I also understand that, if I suspend or

terminate my care and treatment, any fees for professional services

rendered me will be immediately due and payable.

Lindman also signed a personal injury office policy form containing

similar language.

Dr. Waldroup administered chiropractic care to Lindman at

the clinic between February and May 1995. [Fn. 1] In June

Dr. Waldroup referred Lindman to HealthBeat of Alaska, a physical

rehabilitation clinic owned by Dr. Waldroup. Lindman again

completed and signed a patient intake form and a personal injury

office policy form. She also signed a doctor's lien form, which

provided:

I fully understand that I am directly and

fully responsible to said doctor for all physical rehabilitation

bills submitted by him for service rendered me, and that this

agreement is made solely for said doctor's additional protection

and in consideration of his awaiting payment. And I further

understand that such payment is not contingent on any settlement,

claim judgment or verdict by which I may eventually recover said

fee.

Dr. Waldroup treated Lindman at HealthBeat of Alaska

until December 1995. On December 8, 1995 Allstate, acting as

Lindman's insurer, informed Dr. Waldroup in writing that it would

deny payment for any treatment Dr. Waldroup rendered at HealthBeat

of Alaska after June 30, 1995, unless Dr. Waldroup submitted

"additional objective documentation" supporting the treatment as

"reasonable, necessary and accident related." Allstate also wrote

Lindman on the same date. This letter advised Lindman of its

decision to deny payment for the treatment and assured her that "if

Allstate denies payment of these bills as not being reasonable and

necessary treatment we will defend you if Chiropractic Health

Clinic and/or HealthBeat of Alaska pursues you for payment."

In May 1996 Dr. Waldroup demanded payment from Lindman.

Lindman refused to pay.

In November 1997 Dr. Waldroup sued Lindman and Allstate

in superior court. By amended complaint, Dr. Waldroup and

HealthBeat of Alaska (collectively "Waldroup") alleged breach of

contract and breach of the covenant of good faith and fair dealing

against Lindman; they alleged interference with contractual

relations and intentional/malicious conduct against Allstate.

In October 1998 Allstate and Lindman moved to amend their

answer to assert the affirmative defenses of breach of contract and

breach of fiduciary obligations. Dr. Waldroup opposed that motion

and cross-moved to strike the affirmative defense of unclean hands.

The superior court granted the defendants' motion to amend their

answer. The superior court's order did not address Dr. Waldroup's

cross-motion.

In May 1999 Dr. Waldroup asked the superior court to

appoint an expert advisory panel under AS 09.55.536 and Alaska

Civil Rule 72.1 to evaluate defendants' affirmative defenses. The

superior court denied this request.

Allstate had previously moved for summary judgment on

Dr. Waldroup's claim for interference with contractual relations.

The superior court granted Allstate's motion in August 1999 and

entered a Civil Rule 54(b) final judgment for Allstate. [Fn. 2]

In October 1999 the parties agreed to submit

Dr. Waldroup's claims for breach of contract and breach of the

covenant of good faith and fair dealing to arbitration, with the

superior court retaining jurisdiction as to any legal issues

arising from the arbitration.

Dr. Waldroup appeals the superior court's orders (1)

granting summary judgment on Dr. Waldroup's claim for interference

with contractual relations; (2) granting Allstate and Lindman leave

to amend their answer; and (3) denying Dr. Waldroup's request to

appoint an expert advisory panel.

III. DISCUSSION

A. Standard of Review

We review a grant of summary judgment de novo and affirm

if the evidence in the record fails to disclose a genuine issue of

material fact, and the moving party is entitled to judgment as a

matter of law. [Fn. 3] We view the facts in the light most

favorable to the non-moving party. [Fn. 4] We apply our

independent judgment to any questions of law, adopting the rule of

law that is most persuasive in light of precedent, reason, and

policy. [Fn. 5]

B. It Was Not Error to Grant Summary Judgment on

Dr. Waldroup's Claim for Interference with Contractual

Relations.

The superior court dismissed Dr. Waldroup's interference-

with-contractual-relations claim on summary judgment, finding as a

matter of law that any interference by Allstate was privileged. On

appeal, Dr. Waldroup argues that it was error to grant summary

judgment because he claims: (1) Allstate did not have a "direct

financial interest" in the contractual relationship between Dr.

Waldroup and Lindman; (2) genuine issues of material fact regarding

Allstate's motivation precluded summary judgment; (3) Allstate's

interference "pervade[d] the entire physician-patient relationship

and not merely that part of it relating to Allstate's interest in

the automobile accident"; and (4) public policy dictates against

granting insurance companies a privilege to interfere with the

physician-patient relationship.

The tort of intentional interference with contractual

relations requires proof that "'(1) a contract existed, (2) the

defendant knew of the contract and intended to induce a breach, (3)

the contract was breached, (4) defendant's wrongful conduct

engendered the breach, (5) the breach caused the plaintiff's

damages, and (6) the defendant's conduct was not privileged or

justified.'" [Fn. 6] Allstate conceded for purposes of its summary

judgment motion that there was sufficient evidence of the first

five elements to preclude dismissal of Dr. Waldroup's claim on

summary judgment. Allstate's motion and Dr. Waldroup's response

focused on the sixth element of the tort -- whether Allstate's

conduct was privileged or justified.

In Ran Corp. v. Hudesman, we held that "where an actor

has a direct financial interest, he [or she] is privileged to

interfere with a contract for economic reasons, but not where he

[or she] is motivated by spite, malice, or some other improper

objective." [Fn. 7] We added that "'where there is a direct

financial interest in a contract, the essential question in

determining if interference is justified is whether the person's

conduct is motivated by a desire to protect his economic interest,

or whether it is motivated by spite, malice, or some other improper

objective.'" [Fn. 8]

1. Allstate had a direct financial interest in the

contractual relationship between Dr. Waldroup and Lindman.

The superior court found as a matter of law that

"Allstate [had] a direct financial interest in the contract between

Dr. Waldroup and Ms. Lindman, as to medical care related to the

subject automobile accident." Dr. Waldroup argues on appeal that

Allstate did not have a "direct financial interest" in the

contractual relationship between himself and Lindman, because

Allstate's interference did not expose it to both potential gain

and loss.

In Bendix Corp. v. Adams, we considered whether a parent

corporation was privileged to interfere with a contractual

relationship of its subsidiary. [Fn. 9] We held that "where a

direct interest in a contract is involved, there is reason to be

more liberal in granting the privilege to interfere with an

existing contract." [Fn. 10] We explained:

There appears to be a significant distinction

. . . between the interests of a person in his [or her]

competitor's contracts and those contracts in which he [or she] has

some direct financial interest. One who interferes with a

competitor's contracts ordinarily has little to lose and much to

gain by successfully causing a breach of contract. Encouraging

contractual stability may require imposing legal liability to stop

such behavior when it steps beyond limits acceptable to society.

But in a case where a person has some direct financial stake in a

contract, it appears logical that a person's own economic self-

interest would discourage causing a breach of contract because

there would be some personal loss. For example, it seems that a

stockholder in a closely held corporation would not ordinarily want

to interfere in the corporation's contracts because the corporation

would become liable for breach of contract, jeopardizing the value

of the stockholder's own investment.[ [Fn. 11]]

Citing Bendix, Dr. Waldroup contends that to find that a

defendant has a "direct financial interest" in the contractual

relationship of a plaintiff alleging interference with contractual

relations, the defendant must be exposed to both potential gain and

loss as a result of its interference. Because "Allstate could gain

by interfering in the Lindman-Waldroup contract [but] could not

lose anything Allstate was not already obligated to provide to

Lindman," Dr. Waldroup argues that Allstate did not have a "direct

financial interest" in the contractual relationship between Lindman

and Dr. Waldroup. We disagree.

We do not read Bendix to hold that a finding of a "direct

financial interest" in a contractual relationship requires that an

interfering defendant must be exposed to both potential gain and

loss as a result of its interference. [Fn. 12] Rather, exposure to

both gain and loss is a factor that courts consider in determining

whether a defendant has a "direct financial interest" in a

contractual relationship. [Fn. 13] As we noted in Bendix, "[o]ne

who interferes with a competitor's contracts ordinarily has little

to lose and much to gain by successfully causing a breach of

contract. Encouraging contractual stability may require imposing

legal liability to stop such behavior when it steps beyond limits

acceptable to society." [Fn. 14] "[T]he essential question in

determining if interference is justified is whether the

[defendant's] conduct is motivated by a desire to protect [its]

economic interest, or whether it is motivated by spite, malice, or

some other improper objective." [Fn. 15] Thus, in cases in which

a defendant's interference exposes it to potential gain but not

loss, the interference may nevertheless be privileged if it does

not step beyond limits acceptable to society -- i.e., if it is not

motivated by spite, malice, or some other improper objective. [Fn.

16]

For example, we held in Ran that a landlord had a direct

financial interest in a lessee's proposed assignment of a lease

because: (1) "[a]n effective lease assignment makes the assignee

the tenant of the owner; the assignee becomes the lessee and has a

direct contractual relationship with the owner"; [Fn. 17] (2)

"[t]he tenant also has an obligation to pay rent directly to the

owner, and the use, or abuse, of the property by the assignee may

affect its value to the owner"; [Fn. 18] (3) "the owner may know of

another potential assignee who will pay more rent than the

prospective assignee"; [Fn. 19] and (4) "the owner may wish to

terminate the lease based on knowledge of a more profitable use for

the property." [Fn. 20] We did not discuss whether the landlord's

interference also exposed him to potential loss. [Fn. 21] Because

there was "no evidence of spite, malice or other improper

objective," [Fn. 22] we concluded that the landlord was privileged

to interfere with his tenant's lease assignment contract. [Fn. 23]

In any event, Allstate's alleged interference with the

contractual relationship between Lindman and Dr. Waldroup subjected

it to both potential gain and loss. Dr. Waldroup concedes that

Allstate could potentially gain by interfering with the contract

between Lindman and Dr. Waldroup: "Allstate's interference in the

contract between Dr. Waldroup and Lindman . . . could result in

Allstate paying less than it would otherwise be required to pay

under its insurance contract with Lindman." Lindman's auto

insurance policy with Allstate obligated "Allstate [to] pay to or

on behalf of a person insured all reasonable expenses incurred for

necessary treatment actually rendered within one year of [an]

accident because of [a] bodily injury." By interfering, Allstate

could potentially gain because Dr. Waldroup might decide not to

pursue legal action given the dollar amount in question and the

cost of litigation, or might settle for less than the full amount

Lindman owed.

Allstate's alleged interference also exposed it to

potential loss. Allstate's letter promised to defend Lindman in

any action filed by the clinic or HealthBeat of Alaska, even though

its insurance policy did not clearly require it to do so. Thus, by

interfering with the contractual relationship, Allstate was

prospectively exposed to the cost of defending Lindman if Dr.

Waldroup sued her for payment.

Dr. Waldroup also cites Speer v. Cimosz, in which the

Court of Appeals of New Mexico upheld a jury verdict against a

workers' compensation insurer for interference with contractual

relations. [Fn. 24] In Speer, a workers' compensation insurer had

denied payment to a chiropractor for treatment it considered

unreasonable and had assured its insureds that "'in the event suit

is filed against you, the company will provide a complete defense

of any action . . . .'" [Fn. 25] On appeal, the insurer argued

that the trial court had erred by denying its motion for a directed

verdict. [Fn. 26] But the court of appeals held that "the evidence

[at trial] sustained the claim of interference and the jury was not

erroneously instructed thereon." [Fn. 27] Dr. Waldroup argues that

Speer necessarily implies that an insurer is not privileged to

interfere with its insured's contractual relationship with a

healthcare provider.

But Speer is distinguishable. The court there defined

"privilege" as "a good faith assertion or threat by the one

interfering to protect a legally-protected interest of his [or her]

own which he [or she] believes might otherwise be impaired or

destroyed by performance of the contract." [Fn. 28] The court then

held that the insurer's argument that it would have lost the

"right" to pay its insureds' medical bills if it did not inject

itself into the contracts between its insureds and the chiropractor

was "'full of sound and fury, signifying nothing.'" [Fn. 29] The

court's definition of privilege did not turn on whether the

defendant had a "direct financial interest" in the plaintiff's

contractual relationship. [Fn. 30] Dr. Waldroup's reliance on

Speer is therefore misplaced.

The terms of Allstate's insurance policy with Lindman and

evidence of Lindman's February 1995 automobile accident made out a

prima facie case for summary judgment on the issue of Allstate's

"direct financial interest" in the contractual relationship between

Dr. Waldroup and Lindman. Because Dr. Waldroup did not raise a

genuine fact dispute regarding Allstate's "direct financial

interest," we affirm the grant of summary judgment on this issue.

2. No genuine issues of material fact regarding

Allstate's motivation precluded summary judgment.

Dr. Waldroup next argues that even if Allstate had a

"direct financial interest" in the contractual relationship between

Dr. Waldroup and Lindman, it was nevertheless error to dismiss the

interference-with-contractual-relations claim on summary judgment,

because the question whether Allstate's interference was improperly

motivated is one for the trier of fact. Dr. Waldroup cites Geolar,

Inc. v. Gilbert/Commonwealth Inc., where we held that the question

whether a defendant's interference with a plaintiff's contractual

relationship is motivated by an improper objective is normally one

for the trier of fact. [Fn. 31]

We note initially that Dr. Waldroup did not preserve the

issue of improper motive in the superior court. Dr. Waldroup's

opposition to Allstate's summary judgment motion did not address

that issue. Nor did Dr. Waldroup file a statement of genuine

issues of material fact regarding Allstate's motivation, as

permitted by Alaska Civil Rule 56(c). [Fn. 32] But in any event,

we find Dr. Waldroup's argument unpersuasive.

Dr. Waldroup argues that the record before the superior

court when it granted summary judgment contained sufficient

evidence of Allstate's improper motivation to preclude summary

judgment. Dr. Waldroup first asserts that the record contained

evidence that "Allstate cut off payment as of June 30, 1995, but

did not bother telling either Lindman or Dr. Waldroup that they

were doing so until after the treatment regime had been completed."

This assertion is inaccurate. Dr. Waldroup's deposition testimony

establishes that during the physical rehabilitation phase of

Lindman's treatment, he was aware, based on communications with an

Allstate agent, that Allstate was going to deny payment for

portions of Lindman's treatment.

Dr. Waldroup next asserts that the record included

evidence that "Allstate told Lindman not to pay Dr. Waldroup and

offered to pay for a defense" even though it had no contractual

obligation to do so. It is true that Allstate offered to pay for

Lindman's legal defense. But Dr. Waldroup cites no evidence that

would support a finding that Allstate advised Lindman not to pay

Dr. Waldroup. And Allstate's offer to pay for Lindman's legal

defense, standing alone, is insufficient to give rise to an

inference of improper purpose. That offer arguably tends to

establish the element of Allstate's wrongful conduct in inducing a

contract breach by Lindman, but it sheds no light on Allstate's

motivation for its conduct. Therefore, evidence of Allstate's

offer to pay for Lindman's legal defense did not raise a genuine

factual dispute material to the improper motivation issue.

Finally, Dr. Waldroup argues that summary judgment was

precluded by evidence that "it was not until after this lawsuit was

filed[] that Allstate hired an expert to try to find fault with

Dr. Waldroup's treatment." First, this assertion is inaccurate.

A letter dated October 10, 1995, prepared by a chiropractor at

ADP/National Biosystems, Inc., establishes that Allstate consulted

an expert regarding Dr. Waldroup's treatment of Lindman about ten

months before Dr. Waldroup filed suit. Moreover, Dr. Waldroup does

not explain how any delay in consulting with an expert would tend

to prove an improper motive.

Did Allstate present sufficient evidence to make out a

prima facie showing of entitlement to summary judgment on the issue

of improper motive? [Fn. 33] Although Allstate did not support its

summary judgment motion with an affidavit addressing the issue, the

record contained enough circumstantial evidence of good faith to

satisfy Allstate's initial burden. First, evidence of Allstate's

direct financial interest in the contractual relationship between

Lindman and Dr. Waldroup [Fn. 34] is circumstantial evidence of

good faith, because business firms generally act in accordance with

their financial interest. Furthermore, Dr. Waldroup testified in

a deposition that he "actually . . . had a pretty good working

relationship with Allstate." Finally, Allstate's December 1995

letter to Lindman was narrowly tailored to the exact nature of its

dispute with Dr. Waldroup and did not reflect any improper

motivation. That letter merely advised Lindman of Allstate's

decision to deny payment for the treatment it claimed was

unnecessary and unreasonable, and assured Lindman that "if Allstate

denies payment of these bills as not being reasonable and necessary

treatment we will defend you if Chiropractic Health Clinic and/or

HealthBeat of Alaska pursues you for payment." Because Allstate

made out a prima facie case for summary judgment on the issue of

improper motive, and because Dr. Waldroup countered with no

contrary evidence on that issue, we affirm the grant of summary of

judgment on this issue.

3. Dr. Waldroup did not present evidence of treatment

for reasons independent of Lindman's automobile accident.

Dr. Waldroup argued in the superior court, and maintains

on appeal, that to the extent Lindman's need for treatment was

independent of Lindman's automobile accident, Allstate did not have

a "direct financial interest" in the physician-patient

relationship. The superior court's order granting Allstate's

motion for summary judgment noted that Dr. Waldroup had failed to

present evidence raising a genuine issue of material fact about

whether "the medical care involved in the collection suit [was]

from some other cause."

Dr. Waldroup argues on appeal that evidence of Lindman's

preexisting back and neck injuries raised a genuine factual dispute

regarding the scope of Allstate's "direct financial interest" in

the contractual relationship between Lindman and Dr. Waldroup. Dr.

Waldroup therefore concludes that it was error to grant summary

judgment. We disagree.

Although the record before the superior court contained

evidence of Lindman's preexisting injuries, it contained no

evidence that Lindman's treatment in 1995 was related to her

preexisting injuries. Indeed, even Dr. Waldroup's affidavit did

not aver that Lindman's treatment in 1995 was related to her

preexisting injuries. We therefore hold that there was no genuine

fact dispute regarding the scope of Allstate's "direct financial

interest" precluding the summary judgment.

4. Public policy considerations do not dictate against

granting insurers a privilege to interfere with the physician-

patient relationship.

Dr. Waldroup also argues that public policy

considerations dictate against granting insurance companies a

privilege to interfere with the physician-patient relationship:

If Allstate's actions herein are upheld as

permissible as a matter of law, an open invitation is extended to

medical insurers generally to utilize their economic power to

influence and control the physician/[p]atient relationship for

monetary, rather than medical reasons - all to the potential

detriment of the health of their fiduciaries, the insureds.

Allstate responds:

The typical health care consumer lacks any

real degree of sophistication with respect to medical treatment,

billing, and insurance; patients generally obtain the treatment

their physicians prescribe, and rely on their insurers to pay for

that treatment. Where, as here, a dispute arises as to the

reasonableness of medical treatment, the insurer plays an important

role in assuring the medical care providers do not seek to take

advantage of patients.

Because we are not convinced that Dr. Waldroup's public

policy argument, unsupported by evidence, is more plausible than

Allstate's, we choose not to rely upon the parties' irreconcilable

public policy arguments in deciding this case.

C. It Was Not Error to Grant Allstate and Lindman's Motion

to Amend Their Answer.

In October 1998 Allstate and Lindman moved to amend their

answer to assert the affirmative defenses of breach of contract and

breach of fiduciary obligations. Dr. Waldroup opposed the motion

and cross-moved to strike the affirmative defense of unclean hands.

Dr. Waldroup argued that all three affirmative defenses were

"simply disguised counterclaims for malpractice, and should have

been asserted in that manner." The superior court granted Allstate

and Lindman's motion to amend their answer. The superior court's

order did not address Dr. Waldroup's cross-motion. It was

therefore denied by implication. Dr. Waldroup appeals this ruling.

Dr. Waldroup's argument is not properly before us. The

superior court's order granting Allstate and Lindman leave to amend

their answer, the order from which Dr. Waldroup appeals, permitted

Allstate and Lindman to plead affirmative defenses to Dr.

Waldroup's contract claims. But the superior court has not entered

final judgment as to those claims. Rather, the parties agreed to

submit the contract claims to arbitration, with the superior court

retaining jurisdiction as to legal issues arising from the

arbitration. Because Alaska Appellate Rule 202(a) requires that

appeals to the supreme court be taken from a final judgment entered

by the superior court, [Fn. 35] we lack jurisdiction to consider

this issue. But because the parties have fully briefed this issue,

we choose to treat it as if it were raised by a petition for review

and review its merits to avoid a possible future appeal on this

issue. [Fn. 36]

Dr. Waldroup contends that the superior court erroneously

allowed Allstate and Lindman to assert the affirmative defenses of

breach of contract, breach of fiduciary obligation, and unclean

hands, because, he argues, they are no longer recognized under

Alaska common law in cases between a physician and a patient, and

must be pleaded as a medical malpractice counterclaim. We

disagree.

Dr. Waldroup cites M.A. v. United States for the

proposition that a cause of action for breach of fiduciary

obligations is no longer recognized in Alaska in cases between a

physician and a patient and must be asserted as a medical

malpractice claim under AS 09.55.540(a). [Fn. 37] Dr. Waldroup

misreads the holding of M.A. That case held that a physician's

negligent failure to diagnose a pregnancy gave rise to a valid

cause of action for medical malpractice under AS 09.55.540(a). [Fn.

38] That holding was based in part on the fiduciary responsibility

of physicians toward their patients. [Fn. 39] But M.A. did not

hold that a cause of action for breach of fiduciary obligations is

no longer available in Alaska in cases filed by patients against

physicians. [Fn. 40] Dr. Waldroup also cites cases holding

that if an attorney has made the client no express promise, the

client's malpractice action sounds in tort and the two-year statute

of limitation applies. [Fn. 41] Dr. Waldroup argues that these

cases stand for the proposition that Alaska no longer recognizes "a

breach of contract claim between doctor and patient with respect to

treatment rendered." Not only does Dr. Waldroup misread the

holding of these cases, but these cases were overruled in Lee

Houston & Associates, Ltd. v. Racine, which held that the two-year

limitation period for personal injury actions does not apply to

actions arising out of professional service relationships which

primarily involve economic injury. [Fn. 42]

Finally, Dr. Waldroup cites no authority to persuade us

that the affirmative defense of unclean hands is not recognized

under Alaska law in a contract action between a physician and a

patient. We therefore affirm the order granting Allstate and

Lindman leave to amend their answer.

D. It Was Not Error to Deny Dr. Waldroup's Request for

Appointment of an Expert Advisory Panel.

Waldroup claims that the superior court erred by denying

his request under AS 09.55.536 [Fn. 43] and Alaska Civil Rule 72.1

[Fn. 44] to appoint an expert advisory panel to evaluate the

defendants' affirmative defenses. Because Dr. Waldroup's request

arises out of his contract claims, and because there is no final

judgment as to those claims, we lack jurisdiction to consider this

issue on direct appeal. [Fn. 45]

In any event, Dr. Waldroup's arguments lack merit. He

argues that the affirmative defenses of breach of contract, breach

of fiduciary obligations, and unclean hands are "simply disguised

counterclaims for malpractice" which trigger the provisions in AS

09.55.536 and Rule 72.1 for appointing an expert advisory panel.

But Rule 72.1(a) provides that "[e]ither party in a health care

malpractice action subject to AS 09.55.536 may request that the

court appoint an expert advisory panel to evaluate the claim."

(Emphasis added.) Alaska Statute 09.55.536 applies only to "an

action for damages due to personal injury or death based upon the

provision of professional services by a health care provider

. . . ." [Fn. 46] Even if Allstate and Lindman's affirmative

defenses are characterized as counterclaims for medical

malpractice, they do not allege death or personal injury based on

Dr. Waldroup's services. Alaska Statute 09.55.536 and Rule 72.1

therefore do not apply. The superior court properly denied

Dr. Waldroup's request to appoint an expert advisory panel.

IV. CONCLUSION

For these reasons, we AFFIRM the superior court's

judgment in all respects.

FOOTNOTES

Footnote 1:

Lindman received no treatments between February 20, 1995, and

April 24, 1995, because she was in Mississippi for Air National

Guard training.

Footnote 2:

Although Allstate did not move for summary judgment on Dr.

Waldroup's claim for intentional/malicious conduct, Dr. Waldroup's

brief concedes that the superior court's grant of summary judgment

on the interference-with-contractual-relations claim also

effectively precluded a claim for intentional/malicious conduct,

because the court's conclusion that Allstate's conduct was

privileged as a matter of law precluded a finding that the same

conduct was intentionally or maliciously tortious.

Footnote 3:

See Mathis v. Sauser, 942 P.2d 1117, 1120 (Alaska 1997).

Footnote 4:

See id.

Footnote 5:

See id.

Footnote 6:

Ran Corp. v. Hudesman, 823 P.2d 646, 648 (Alaska 1991)

(quoting Knight v. American Guard & Alert, Inc., 714 P.2d 788, 793

(Alaska 1986)) (internal ellipses omitted).

Footnote 7:

823 P.2d 646, 648 (Alaska 1991).

Footnote 8:

Id. at 649 (quoting Bendix Corp. v. Adams, 610 P.2d 24, 31

(Alaska 1980)).

Footnote 9:

610 P.2d 24, 25-32 (Alaska 1980).

Footnote 10:

Id. at 30.

Footnote 11:

Id. (emphasis added).

Footnote 12:

See id. at 29-32.

Footnote 13:

See id.

Footnote 14:

Id. at 30 (emphasis added).

Footnote 15:

Id. at 31. We address Dr. Waldroup's arguments regarding

Allstate's allegedly improper motivation in Part III.B.2.

Footnote 16:

See id.

Footnote 17:

Ran Corp., 823 P.2d at 649.

Footnote 18:

Id.

Footnote 19:

Id.

Footnote 20:

Id.

Footnote 21:

See id. at 647-50. But see id. at 651 (Burke, J., dissenting)

("[The landlord] stood to lose nothing by forcing [its tenant] to

relinquish his right to assign his lease to the person of his

choice.").

Footnote 22:

Id. at 650.

Footnote 23:

See id.

Footnote 24:

642 P.2d 205, 207 (N.M. App. 1982).

Footnote 25:

Id.

Footnote 26:

See id.

Footnote 27:

Id. at 210.

Footnote 28:

Id. at 209 (citing Williams v. Ashcraft, 381 P.2d 55, 56 (N.M.

1963)).

Footnote 29:

See id.

Footnote 30:

See id.

Footnote 31:

874 P.2d 937, 941 (Alaska 1994).

Footnote 32:

Alaska R. Civ. P. 56(c) ("The adverse party . . . may serve .

. . a concise 'statement of genuine issues' setting forth all

material facts as to which it is contended there exists a genuine

issue necessary to be litigated . . . .").

Footnote 33:

See Cannone v. Noey, 867 P.2d 797, 801 n.4 (Alaska 1994) ("A

summary judgment movant bears the burden of demonstrating the

absence of any genuine issue of material fact and entitlement to

judgment as a matter of law.").

Footnote 34:

See supra Part III.B.1.

Footnote 35:

Alaska R. App. P. 202(a) ("An appeal may be taken to the

supreme court from a final judgment entered by the superior court

. . . .").

Footnote 36:

See Alaska R. App. P. 402(b)(2) (providing that petition for

review will be granted where an "order or decision involves an

important question of law on which there is substantial ground for

difference of opinion, and an immediate review of the order or

decision may materially advance the ultimate termination of the

litigation"); City of North Pole v. Zabek, 934 P.2d 1292, 1296

(Alaska 1997) (holding that this court may treat appeal improperly

brought from non-final judgment as petition for review).

Footnote 37:

951 P.2d 851 (Alaska 1998).

Footnote 38:

See id. at 853-54.

Footnote 39:

See id.

Footnote 40:

See id.

Footnote 41:

See, e.g., Jones v. Wadsworth, 791 P.2d 1013 (Alaska 1990);

Van Horn Lodge, Inc. v. White, 627 P.2d 641 (Alaska 1981),

overruled by Lee Houston & Assocs., Ltd. v. Racine, 806 P.2d 848

(Alaska 1991).

Footnote 42:

806 P.2d 848, 854-55 (Alaska 1991).

Footnote 43:

AS 09.55.536(a) provides:

In an action for damages due to personal

injury or death based upon the provision of professional services

by a health care provider, . . . the court shall appoint . . . a

three-person expert advisory panel unless the court decides that an

expert advisory opinion is not necessary for a decision in the

case.

(Emphasis added.)

Footnote 44:

Alaska Civil Rule 72.1(a) provides: "Either party in a health

care malpractice action subject to AS 09.55.536 may request that

the court appoint an expert advisory panel to evaluate the claim."

Footnote 45:

See supra Part III.C.

Footnote 46:

AS 09.55.536(a) (emphasis added).