Moody v. Royal Wolf Lodge , 339 P.3d 636 ( 2014 )


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    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, email
    corrections@appellate.courts.state.ak.us.
    THE SUPREME COURT OF THE STATE OF ALASKA
    JEFF MOODY,                                    )
    )        Supreme Court No. S-14864/14883
    Appellant and                    )
    Cross-Appellee,                  )        Superior Court No. 3AN-08-07621 CI
    )
    v.                                       )        OPINION
    )
    ROYAL WOLF LODGE,                              )        No. 6966 – November 14, 2014
    LINDA BRANHAM, and                             )
    CHRIS BRANHAM,                                 )
    )
    Appellees and                    )
    Cross-Appellants.                )
    )
    Appeal from the Superior Court of the State of Alaska, Third
    Judicial District, Anchorage, Stephanie E. Joannides, Judge.
    Appearances:     Kenneth W. Legacki, Anchorage, for
    Appellant and Cross-Appellee. William M. Bankston and
    John R. Crone, Bankston Gronning O’Hara, P.C., Anchorage,
    for Appellees and Cross-Appellants.
    Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and
    Bolger, Justices.
    BOLGER, Justice.
    I.    INTRODUCTION
    A pilot who worked at a remote fishing lodge filed a claim under the Alaska
    Wage and Hour Act (AWHA) for unpaid overtime wages. Applying the four-part test
    of Dayhoff v. Temsco Helicopters, Inc.,1 the superior court concluded that the pilot was
    a “professional employee” who was exempt from the overtime requirement. But the
    legislature amended AWHA in 2005 to adopt the federal definition of this exemption.2
    The federal definition restricts the exemption to employees in “professions where
    specialized academic training is a standard prerequisite.” 3 Applying this definition, we
    conclude that the pilot was not exempt under AWHA and reverse.
    II.    FACTS AND PROCEEDINGS
    A.      Facts
    Chris and Linda Branham own and operate the Royal Wolf Lodge, a fishing
    lodge that operates seasonally from June to September. The lodge is located in Katmai
    National Park, a remote location without access to roads. Employees reside on the
    premises during the season, and all materials must be flown in by airplane. The lodge
    first hired Jeff Moody as a pilot for the 2002 summer season and terminated him after the
    2007 season.
    Moody was the only pilot who flew the lodge’s de Havilland Beaver
    aircraft. The parties contest the details of Moody’s responsibilities at the lodge, but they
    agree that Moody was responsible for many tasks involving the airplane. For example,
    Moody flew clients between the lodge and the fishing destinations, prepared and cleaned
    the airplane, and monitored it for potential mechanical problems. He also flew food,
    fuel, and other supplies to the lodge. When he was not on duty, Moody was allowed to
    engage in personal errands and leisure activities.
    1
    
    848 P.2d 1367
    , 1371 (Alaska 1993).
    2
    Ch. 90, § 2, SLA 2005.
    3
    29 C.F.R. § 541.301(d) (2014).
    -2­                                       6966
    Although Moody does not have a college degree and did not receive flight
    training in a formal academic setting, he hired flight instructors to teach him, and he
    studied from manuals to take the Federal Aviation Administration’s (FAA) oral and
    written tests. Moody holds a commercial pilot license, an airline transport pilot license,
    a certified flight instructor rating, an instrument rating, a multi-engine rating, a single
    engine land rating, a single engine sea rating, and a second class medical certificate. His
    experience includes over 14,000 hours of flight time.
    B.     Proceedings
    Moody filed a complaint against Chris Branham, Linda Branham, and the
    Royal Wolf Lodge (together “Royal Wolf Lodge”) for unpaid overtime wages from the
    2006 and 2007 seasons. Moody had a written employment agreement for those seasons,
    and he was paid $9,500 per month in 2006 and $9,750 per month in 2007. Moody
    claimed that he had worked more than eight hours per day and more than 40 hours per
    week and that he was therefore entitled to overtime pay under AWHA. Royal Wolf
    Lodge contended that Moody was a professional employee and was thus exempt from
    AWHA’s protections.
    At trial, Royal Wolf Lodge presented evidence that Moody was paid a set
    monthly salary equivalent to 40 hours regular pay and 32 hours overtime pay per week.
    But some of Royal Wolf Lodge’s evidence was inconsistent. Chris Branham testified
    that Moody’s salary was for a 30-day period, but he also testified that Moody was paid
    by calendar month. Moody’s employment contract specified that his salary was based
    on 30 days per month, but it listed hourly rates inconsistent with Chris Branham’s
    testimony. The parties also disagreed about whether Moody worked overtime hours.
    -3-                                       6966
    Applying the four-part test of Dayhoff v. Temsco Helicopters, Inc.,4 the
    superior court ruled that Moody was an exempt professional employee who was not
    entitled to overtime pay under AWHA, regardless of the number of hours he worked.
    But the court determined that, by the terms of his employment contract, Moody was
    entitled to extra pay if he worked more than 30 days per calendar month or more than six
    days per week. The court found that Moody worked every day during the 2006 and 2007
    seasons and awarded him unpaid wages for the 31st days of July and August for both
    seasons as well as for the extra day per week he worked.
    Both sides moved to adjust the award. Royal Wolf Lodge sought attorney’s
    fees under Alaska Civil Rules 68 and 82. Moody opposed this motion, arguing that he
    was the prevailing party and that, under AS 23.10.110(f), a defendant cannot be awarded
    attorney’s fees when a plaintiff litigates his AWHA claim in good faith. Moody also
    reiterated his claim that Royal Wolf Lodge had violated AWHA and argued that he was
    entitled to mandatory liquidated damages and attorney’s fees under AS 23.10.110(a)
    and (c). He further claimed that he was entitled to receive an additional penalty payment
    from Royal Wolf Lodge under AS 23.10.140.5
    The superior court determined that Moody was the prevailing party and that
    Royal Wolf Lodge was not entitled to an award of attorney’s fees. But the court, noting
    its previous conclusion that Moody was exempt from AWHA, also rejected Moody’s
    argument for a larger award under AS 23.10.110. And the court rejected Moody’s
    argument for a penalty payment under AS 23.05.140 based on its findings that Moody’s
    right to overtime compensation was unsettled when he left Royal Wolf Lodge and that
    
    4 848 P.2d at 1371
    .
    5
    It appears Moody intended to cite AS 23.05.140, which provides the
    penalty award he claimed. AS 23.10.140 penalizes employers for AWHA violations but
    does not benefit employees.
    -4-                                     6966
    Royal Wolf Lodge had not intentionally withheld compensation from him. The superior
    court issued a final judgment for Moody in the principal amount of $12,833.40. Moody
    subsequently moved for attorney’s fees under Civil Rule 82, which the superior court
    granted.
    Moody appeals the decision denying his AWHA claim. Royal Wolf Lodge
    cross-appeals the contract damages and attorney’s fees awards.
    III.   STANDARD OF REVIEW
    Whether an employee is an exempt professional under AWHA is a question
    of fact.6 “We review factual findings for clear error, and will uphold the superior court’s
    findings unless we are left with a definite and firm conviction on the entire record that
    a mistake has been made . . . .”7 However, the interpretation of the controlling statutes
    and regulations is a legal question which we review de novo.8 “Whether the superior
    court violated a party’s due process rights is [also] a question of law, which we review
    de novo.”9
    6
    See Era Aviation, Inc. v. Lindfors, 
    17 P.3d 40
    , 50-51 (Alaska 2000).
    7
    Simmonds v. Parks, 
    329 P.3d 995
    , 1007 (Alaska 2014) (quoting John v.
    Baker, 
    30 P.3d 68
    , 71 (Alaska 2001)) (internal quotation marks omitted).
    8
    Mech. Contractors of Alaska, Inc. v. State, Dep’t of Pub. Safety, 
    91 P.3d 240
    , 244 (2004) (citing Therchik v. Grant Aviation, Inc., 
    74 P.3d 191
    , 193 (Alaska
    2003)).
    9
    McCarrey v. Kaylor, 
    301 P.3d 559
    , 563 (Alaska 2013) (citing A.M. v. State,
    
    945 P.2d 296
    , 302 (Alaska 1997)).
    -5-                                       6966
    IV.	   DISCUSSION
    A.	     Federal Law Now Governs AWHA’s Definition Of “Professional
    Employee.”
    AWHA requires an employer to pay overtime compensation “at the rate of
    one and one-half times the regular rate of pay” for hours worked in excess of eight hours
    per day or 40 hours per week.10 But this requirement does not apply to the employer of
    “an individual . . . employed in a bona fide executive, administrative, or professional
    capacity.”11
    In Dayhoff v. Temsco Helicopters, Inc. we adopted a four-part test to
    determine whether an employee was a “professional employee.”12 Under Dayhoff, an
    employee was considered an exempt professional if “1) the employee’s primary duty is
    to perform work requiring knowledge of advanced type, 2) the work requires consistent
    exercise of discretion, 3) the work [is] predominantly intellectual and varied, and 4) the
    work [is] compensated on a fee basis.”13 These factors were based on the definition of
    “professional employee” then found in the Alaska Administrative Code.14
    In 2005, however, the Alaska Legislature amended AWHA to adopt the
    federal definition of “professional employee.”15 The federal definition itself had been
    10
    AS 23.10.060(b).
    11
    AS 23.10.055(a)(9)(A).
    12
    
    848 P.2d 1367
    , 1371 (Alaska 1993).
    13
    
    Id. 14 Id.
    (citing 8 Alaska Administrative Code (AAC) 15.910(a)(11) (1993)).
    15
    Ch. 90, § 2, SLA 2005 (adding subsection (c) to AS 23.10.055 and
    explaining that “ ‘bona fide executive, administrative, or professional capacity’ has the
    meaning and shall be interpreted in accordance with 29 U.S.C. 201-219 (Fair Labor
    (continued...)
    -6-	                                     6966
    amended in 2004, and the 2004 amendments provide additional interpretive guidance,
    even for the parts of the definition that appear facially similar to the Dayhoff factors.16
    However, the amended federal regulation differs significantly from the first Dayhoff
    factor. While the regulation defines a professional employee as one whose “primary
    duty is the performance of work . . . [r]equiring knowledge of an advanced type in a field
    of science or learning,” it clarifies that this knowledge must be “customarily acquired by
    a prolonged course of specialized intellectual instruction.”17
    Most importantly for this case, the federal regulation provides a detailed
    explanation of the phrase “customarily acquired by a prolonged course of specialized
    intellectual instruction”:
    The phrase “customarily acquired by a prolonged course of
    specialized intellectual instruction” restricts the exemption to
    professions where specialized academic training is a
    standard prerequisite for entrance into the profession. The
    best prima facie evidence that an employee meets this
    requirement is possession of the appropriate academic degree.
    However, the word “customarily” means that the exemption
    is also available to employees in such professions who have
    substantially the same knowledge level and perform
    substantially the same work as the degreed employees, but
    15
    (...continued)
    Standards Act of 1938), as amended, or the regulations adopted under those sections.”).
    16
    See Defining and Delimiting the Exemptions for Executive, Administrative,
    Professional, Outside Sales and Computer Employees, 69 Fed. Reg. 22,122, 22,265-66
    (Apr. 23, 2004). Like the second Dayhoff factor, the work must include tasks “requiring
    the consistent exercise of discretion and judgment.” 29 C.F.R. § 541.301(b) (2014).
    Like the third Dayhoff factor, the work must be “predominantly intellectual in
    character.” 
    Id. And like
    the fourth Dayhoff factor, the employee must be
    “[c]ompensated on a salary or fee basis.” 29 C.F.R. § 541.300 (2014).
    17
    29 C.F.R. § 541.300(a)(2).
    -7-                                      6966
    who attained the advanced knowledge through a combination
    of work experience and intellectual instruction. Thus, for
    example, the learned professional exemption is available to
    the occasional lawyer who has not gone to law school, or the
    occasional chemist who is not the possessor of a degree in
    chemistry. However, the learned professional exemption is
    not available for occupations that customarily may be
    performed with only the general knowledge acquired by an
    academic degree in any field, with knowledge acquired
    through an apprenticeship, or with training in the
    performance of routine mental, manual, mechanical or
    physical processes. The learned professional exemption also
    does not apply to occupations in which most employees have
    acquired their skill by experience rather than by advanced
    specialized intellectual instruction.[18]
    This definition of “work . . . [r]equiring knowledge of an advanced type
    . . . customarily acquired by a prolonged course of specialized intellectual instruction”
    is narrower than the definition we used in Era Aviation, Inc. v. Lindfors, where we
    upheld a jury’s finding that a commercial airline pilot was an exempt professional based
    on her “hundreds of hours of training” and flying time.19 As the 2004 regulatory
    amendment makes clear, the professional exemption is “restrict[ed] . . . to professions
    where specialized academic training is a standard prerequisite for entrance into the
    profession.”20
    18
    29 C.F.R. § 541.301(d).
    19
    
    17 P.3d 40
    , 50-51 (Alaska 2000).
    20
    29 C.F.R. § 541.301(d) (emphasis added). In contrast, the pre-2004
    regulation was less definite, stating that “the word ‘customarily’ implies that in the vast
    majority of cases . . . specific academic training is a prerequisite for entrance into the
    field.” 29 C.F.R. § 541.301(d) (2003) (emphasis added).
    -8-                                       6966
    Because the federal definition of “professional employee” differs from the
    state regulation that informed our Dayhoff analysis, the four-part Dayhoff test no longer
    controls whether an employee is an exempt professional under AWHA. Instead, trial
    courts should look to 29 C.F.R. §§ 541.300 and .301 in making this determination.
    Specifically, they should apply the “primary duty test” of §§ 541.300 and .301, paying
    special attention to the clarifications provided by § 541.301(b) through (f).
    In this case, the superior court correctly recognized that Alaska now relies
    on 29 C.F.R. §§ 541.300 and .301 to determine whether the professional exemption
    applies to an AWHA claim. But the court incorrectly paraphrased § 541.301(d) as
    follows:
    The requirement that the knowledge be customarily acquired
    through prolonged specialized instruction generally restricts
    the exemption to fields where specialized academic training
    is a prerequisite. However, the word “customarily” broadens
    the exemption such that it may also apply to professions that
    have “substantially the same knowledge level and perform
    substantially the same work as the degreed employees, but
    who attained the advanced knowledge through a combination
    of work experience and intellectual instruction.”[21]
    Using this formulation and continuing to apply the Dayhoff factors, the superior court
    concluded that the required credentials of a lodge pilot like Moody were similar to the
    credentials of pilots in cases where those pilots have been found to be exempt.22
    But all of these cases preceded the amendment to 29 C.F.R. § 541.301 in
    2004. And contrary to the superior court’s determination, the word “customarily” in the
    21
    Emphasis added and citations omitted.
    22
    See Era Aviation, Inc. v. Lindfors, 
    17 P.3d 40
    (Alaska 2000); Paul v.
    Petroleum Equip. Tools Co., 
    708 F.2d 168
    (5th Cir. 1983); Kitty Hawk Air Cargo, Inc.
    v. Chao, 
    304 F. Supp. 2d 897
    (N.D. Tex. 2004).
    -9-                                      6966
    primary duty test does not broaden the exemption to include entire professions where
    advanced training — but not academic or intellectual instruction — is required. Instead,
    “customarily” broadens the exemption only to individual employees who lack specialized
    academic training but nevertheless work in professions where such training is “a standard
    prerequisite for entrance into the profession.”23 The regulation provides as examples “the
    occasional lawyer who has not gone to law school, or the occasional chemist who is not
    the possessor of a degree in chemistry.”24 Both examples involve professions in which
    specialized academic instruction is generally required. Incorrectly paraphrasing §
    541.301(d) led to the application of the wrong legal standard.
    Since the 2004 amendment of 29 C.F.R. § 541.301(d), every federal court
    considering whether pilots fall within the professional exemption has concluded that they
    do not, because commercial piloting does not require specialized academic training as
    a standard prerequisite.25 In Pignataro v. Port Authority, the Third Circuit Court of
    Appeals upheld a trial court’s determination that helicopter pilots did not qualify for the
    professional exemption under the Fair Labor Standards Act.26 The appellate court
    23
    29 C.F.R. § 541.301(d) (2014).
    24
    
    Id. 25 Pignataro
    v. Port Auth., 
    593 F.3d 265
    , 269-71 (3d Cir. 2010); McCoy v. N.
    Slope Borough, Docket No. 3:13-CV-00064-SLG, 
    2013 WL 4510780
    , at *1, 6-8 (D.
    Alaska Aug. 26, 2013); Howard v. Port Auth., 
    684 F. Supp. 2d 409
    , 415 (S.D.N.Y.
    2010). The Second Circuit recently commented in dicta that “even experienced
    professionals, from airline pilots to surgeons, utilize checklists and standardized
    protocols.” Pippins v. KPMG, LLP, 
    759 F.3d 235
    , 247 n.4 (2d Cir. 2014). But the issue
    of whether pilots were professional employees under §§ 541.300 and .301 was not before
    the appellate court.
    
    26 593 F.3d at 269-71
    (alteration in original) (citations omitted) (internal
    quotation marks omitted).
    -10-                                      6966
    acknowledged the significant credentials required to become a Port Authority helicopter
    pilot: 2,000 hours of flying time, a commercial helicopter pilot certificate, a second class
    medical certificate, knowledge of the FAA’s rules and regulations, and a high school
    diploma or GED.27 But critically, none of those credentials involved the attainment of
    an advanced academic degree — the “pilots’ knowledge and skills were acquired through
    experience and supervised training as opposed to intellectual, academic instruction.”28
    For this reason, the court concluded that the pilots were “not ‘learned professionals’ and
    . . . not exempt from the provisions of the [Fair Labor Standards Act].”29
    In Howard v. Port Authority, which also involved Port Authority helicopter
    pilots, the federal district court adopted Pignataro’s reasoning and found that “Port
    Authority helicopter pilots obtain the required advanced knowledge primarily through
    experience rather than academic study.”30
    And in McCoy v. North Slope Borough, the federal district court determined
    that North Slope Borough search and rescue pilots are not exempt professionals.31 Much
    like the helicopter pilots in Pignataro, the pilots in McCoy were required to have
    extensive credentials, including an airline transport license, a first class medical
    certificate, and 3,000 hours of flight time (including 500 hours in remote or arctic
    27
    
    Id. at 269.
    28
    
    Id. at 270.
    29
    
    Id. 30 684
    F. Supp. 2d at 415.
    31
    Docket No. 3:13-CV-00064-SLG, 
    2013 WL 4510780
    , at *1, 6-8 (D. Alaska
    Aug. 26, 2013).
    -11-                                       6966
    areas).32 But while the pilots’ training was both specialized and prolonged, it was “not
    a course of specialized intellectual instruction akin to an academic degree.”33
    The United States Department of Labor, which promulgated 29 C.F.R. §§
    541.300 and .301, also takes the position that pilots are not professional employees. As
    early as 1975, the Department concluded that aviation is not “work requiring knowledge
    of an advanced type in a field of science or learning customarily acquired by a prolonged
    course of specialized intellectual instruction and study.”34 The Department maintained
    this position in its comments accompanying the amendment to § 541.301 in 2004.35 And
    it reiterated this view in a 2009 Wage and Hour Opinion Letter sent to an employer of
    pilots holding airline transport and commercial licenses.36
    We agree with the analysis in Pignataro, Howard, and McCoy. Under the
    primary duty test of 29 C.F.R. §§ 541.300 and .301, Moody is not eligible for AWHA’s
    professional exemption. We acknowledge the superior court’s findings that Royal Wolf
    Lodge requires its pilots to have commercial pilot licenses, to comply with the
    requirements of 14 C.F.R. §§ 135.61-.129, and to pass written and oral tests
    demonstrating their knowledge of FAA rules. And we note Chris Branham’s assertion
    32
    
    Id. at *1.
             33
    
    Id. at *8
    (emphasis in original).
    34
    Dep’t of Labor Wage and Hour Opinion Letter WH-303 (Jan. 20, 1975)
    (internal quotation marks omitted).
    35
    Defining and Delimiting the Exemptions for Executive, Administrative,
    Professional, Outside Sales and Computer Employees, 69 Fed. Reg. 22,156 (Apr. 23,
    2004) (noting also that pilots employed by commercial airlines are exempt from overtime
    under a different section of the Fair Labor Standards Act).
    36
    Dep’t of Labor Wage and Hour Opinion Letter FLSA 2009-6 (Jan. 14,
    2009).
    -12-                                    6966
    that he would only consider hiring pilots with at least 1,500 hours of total flying time.
    But none of these requirements involves “specialized intellectual instruction” as required
    by the federal regulations.
    It is true that Moody had additional credentials and experience that
    exceeded Royal Wolf Lodge’s hiring requirements. But the relevant determination is not
    whether Moody personally acquired specialized intellectual instruction, but whether that
    instruction is a standard prerequisite for entrance into the aviation profession. The
    record in this case shows that piloting — even commercial piloting — does not generally
    require academic training. Therefore we cannot say that the “primary duty” of a pilot
    such as Moody requires “knowledge of an advanced type . . . customarily acquired by
    a prolonged course of specialized intellectual instruction.”37
    Because Moody was not an exempt employee under AWHA, we remand
    for further proceedings on whether Moody in fact worked overtime as defined by
    AS 23.10.060 and whether he is entitled to recover compensation for unpaid overtime.38
    B.	    The Superior Court’s Determination That Moody Took No Days Off
    And Was Entitled To Contract Damages Was Not Clearly Erroneous.
    Although the superior court rejected Moody’s AWHA claim, it nevertheless
    awarded him contract damages. After reviewing extensive oral testimony from witnesses
    and documentary evidence from both sides, the superior court found:
    The 2006 and 2007 contracts, when considered together and
    in relation to the 2005 contract, provide guidance as to the
    intent of the parties. The intent of the parties was that Moody
    37
    29 C.F.R. § 541.300(a)(2) (2014).
    38
    Royal Wolf Lodge claims the superior court found that Moody never
    worked more than 40 hours per week. But the superior court merely disclaimed a factual
    finding on the issue, stating, “I did not find that Moody actually worked over 40 hours
    a week.” We conclude that this issue remains unresolved.
    -13-	                                     6966
    would be paid an agreed upon sum per month for a 30 day
    period and that his contract did not contemplate any overtime
    for any work done in that 30 day period. . . .
    But the court also noted that the 2006 and 2007 contracts stated that “[o]ne day off a
    week is provided, or accumulated for time off” and that Moody’s salary was “based on
    30 days per month; or pro rated per day.” Relying on Moody’s work records, which the
    court found to be more credible than Royal Wolf Lodge’s documents, the superior court
    determined that Moody took no days off during the 2006 and 2007 seasons. As a result,
    it awarded him contract damages for his unpaid work on the 31st days of July and
    August and on the seventh day of each week of both seasons.
    Royal Wolf Lodge does not challenge the court’s interpretation of Moody’s
    employment contracts, but it argues that the superior court clearly erred in finding
    Moody took no days off during the 2006 and 2007 seasons.39
    First, Royal Wolf Lodge cites its employees’ testimony that Moody did not
    work over 40 hours per week and that he did not contribute to tasks other than piloting
    and maintaining his aircraft. But this testimony concerns only the total number of hours
    Moody worked each week and whether he engaged in general maintenance work at the
    lodge. It provides no insight into which days Moody worked.
    Second, Royal Wolf Lodge argues that the superior court gave insufficient
    consideration to Chris Branham’s post-decision affidavit, which attested that there were
    “days [Moody] did not fly at all.” But this untimely affidavit was submitted more than
    five months after the superior court’s decision. Because Royal Wolf Lodge did not
    39
    While Royal Wolf Lodge argues in its briefing that Moody took “days” off
    in 2006 and 2007, it conceded at oral argument that, with the exception of June 26, 2006,
    Moody worked every disputed day.
    -14-                                     6966
    submit this affidavit in conjunction with an Alaska Civil Rule 60(b) claim,40 the superior
    court was under no obligation to consider this new evidence after it issued its decision.
    We decline to credit the document now.
    Finally, Royal Wolf Lodge points to Moody’s testimony that he flew zero
    hours on June 26, 2006. But in his testimony, Moody did not admit taking the day off;
    he merely acknowledged that his work that day did not involve flying. Moody further
    testified that he worked 11 hours on June 26. Even Royal Wolf Lodge’s log records,
    while contradicting Moody’s claim as to the number of hours, state that he worked two
    hours that day.
    For these reasons, we find no clear error in the superior court’s finding that
    Moody worked every day during the 2006 and 2007 seasons. We affirm the superior
    court’s award of contract damages.41
    C.	   The Superior Court Did Not Violate Royal Wolf Lodge’s Due Process
    Rights When It Determined That Moody Was Entitled To Contract
    Damages.
    Royal Wolf Lodge argues it did not receive adequate notice that the
    superior court could award contract damages because Moody pled his overtime claim
    solely under AWHA.
    A trial court violates due process if it does not provide a party with
    adequate notice and an opportunity to be heard on the claims addressed by the court’s
    40
    The affidavit was attached to a post-judgment brief concerning attorney’s
    fees.
    41
    If on remand the superior court determines that Moody is entitled to
    damages under AWHA, the court may need to reconsider whether contract damages
    remain appropriate given the possibility of a double recovery.
    -15-	                                      6966
    decision.42 “[T]he due process analysis is a flexible and contextual one focusing on the
    interest and not the outcome, [but] there must be some actual prejudice . . . and not
    merely the ‘theoretical possibility of prejudice.’ ”43 Therefore, “[a] the party raising a
    due process objection must show that it has suffered actual prejudice, even in a case
    where the notice is clearly inadequate.44
    Although Moody pled no contract claims in his complaint, Royal Wolf
    Lodge put Moody’s employment contracts at issue by raising their interpretation and
    application as a defense against Moody’s AWHA claim. Moreover, at oral argument
    before this court, Royal Wolf Lodge conceded it would not have litigated the case any
    differently had it received prior notice that Moody could be awarded contract damages.
    Royal Wolf Lodge thus did not suffer any prejudice from the court’s decision to award
    Moody contract damages, and we conclude that the superior court’s decision did not
    violate due process.
    V.    CONCLUSION
    We REVERSE the determination that Moody was an exempt professional
    employee under AWHA and REMAND for further proceedings. We VACATE the
    42
    Price v. Eastham, 
    75 P.3d 1051
    , 1056 (Alaska 2003); Cushing v. Painter,
    
    666 P.2d 1044
    , 1046 (Alaska 1983) (reversing a custody decision because the parties
    were not given adequate notice that the court would make a final custody award after an
    interim custody hearing).
    43
    Paula E. v. State, Dep’t of Health & Soc. Servs., Office of Children’s Servs.,
    
    276 P.3d 422
    , 433 (Alaska 2012) (citations omitted) (quoting D.M. v. State, Div. of
    Family & Youth Servs., 
    995 P.2d 205
    , 212 (Alaska 2000)).
    44
    See 
    id. (applying Mathews
    v. Eldridge, 
    424 U.S. 319
    , 334-35 (1976)).
    -16-                                    6966
    superior court’s orders declaring Moody to be the prevailing party and awarding him
    attorney’s fees.45 We AFFIRM the superior court’s decision on all remaining issues.
    45
    Because the merits of Moody’s AWHA claim remain unresolved, we need
    not reach these issues.
    -17-                                    6966