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KENAI CHRYSLER CENTER, INC., an Alaskan Corporation, DaimlerChrysler Insurance Agency, Inc., a Michigan Corporation, Appellants/Cross-Appellees,
v.
Dorothy and Michael DENISON, as guardians of David Denison, Appellees/Cross-Appellants.
Supreme Court of Alaska.
*1244 Dennis R. Acker, Anchorage, for Appellants/Cross-Appellees.
Thomas A. Dosik, Disability Law Center of Alaska, Anchorage, for Appellees/Cross-Appellants.
Before: BRYNER, Chief Justice, MATTHEWS, EASTAUGH, FABE, and CARPENETI, Justices.
OPINION
BRYNER, Chief Justice.
I. INTRODUCTION
Kenai Chrysler Center, Inc., sold a car to David Denison, not knowing that David was developmentally disabled and subject to the legal guardianship of his parents. When the Denisons tried to return the car and insisted that the contract was void, Kenai Chrysler refused to take it back and demanded restitution to rescind the contract. The Denisons sued Kenai Chrysler[1] and won an award of *1245 treble damages under Alaska's Unfair Trade Practices Act. On appeal, Kenai Chrysler challenges the jury verdict and various rulings made by the superior court. The Denisons cross-appeal, challenging the superior court's award of attorney's fees and its failure to impose sanctions against Kenai Chrysler. We find no merit in the parties' arguments and affirm the superior court's judgment.
II. FACTS AND PROCEEDINGS
A. Facts
David Denison is a developmentally disabled young man who has been under the legal guardianship of his parents since 1999, when he turned eighteen. In October 2002 David was living in his own apartment, but his parents strictly controlled his finances. They visited him at least once each week to make sure he had a clean and safe place to live and was budgeting his food money properly. They also visited him socially several times every week. They spoke with David nearly every day.
The Denisons first learned that David wanted to buy a car when David called his father, Michael, from Kenai Chrysler and asked him to cosign for a used car; David did not tell his father where he was when he called. Michael refused to cosign. The next day, David again tried to purchase a car from Kenai Chrysler. This time, he was trying to buy a new car, a Dodge Neon, which he could finance without a cosigner. David called his mother, Dorothy, to ask for money for a down payment. Dorothy refused and told him not to buy a car. She assumed her word would be final because she did not realize that David could obtain any appreciable amount of money with his debit card.
David used his debit card and bought the Neon. Kenai Chrysler charged $16,614 for the car and $945 for the dealership's extended service plan. With additional charges, fees, and taxes, the total price came to $17,802. Kenai Chrysler gave David credit for trading in his 1994 Pontiac Grand Am, and applied a $2,000 factory rebate to the down payment, which allowed David to buy the new Neon with only $500 in cash. Kenai Chrysler financed the remaining $12,851.77 at 11.99% APR for five years.
One or two days after David signed the contract, Dorothy came to Kenai Chrysler with David and informed the salesman who had sold David the car and a Kenai Chrysler manager that David was under the legal guardianship of his parents and had no legal authority to enter into a contract to buy the Neon. Dorothy showed the manager David's guardianship papers and asked him to take back the car. The manager refused; according to Dorothy, he told her that Kenai Chrysler would not take back the car, and that the company sold cars to "a lot of people who aren't very smart." Dorothy insisted that the contract was void, but the Kenai Chrysler manager ignored her and handed the keys to David over Dorothy's objection. David drove off in the new car. Dorothy contacted Duane Bannock, the general manager of Kenai Chrysler, the next day; he told her that he had seen the guardianship papers, but he still thought that the contract was valid and that David was bound by it.
A couple of days after Kenai Chrysler gave David back the keys, David damaged the Neon in a one-car accident. The Denisons then managed to get the car away from David and return it to Kenai Chrysler, but six days later, when David called Kenai Chrysler to ask for his Pontiac back, someone at the dealership told him that he could not have it but could pick up his new car any time. David got a ride to Kenai Chrysler and picked up the Neon. The next day the Denisons were able to convince David to return the car to Kenai Chrysler yet again, and this time he left the car there.
While they were trying to handle the immediate challenge of returning the Neon to Kenai Chrysler and preventing anyone there from giving it back to David, the Denisons also sought legal advice about the validity of the contract. They consulted the Alaska State Association for Guardianship and Advocacy *1246 and the Disability Law Center; advocates at both offices confirmed Dorothy's belief that the contract was void. Michael Denison also contacted the court-appointed investigator for David's guardianship case. The investigator contacted Kenai Chrysler's general manager, Bannock, and advised Bannock that the guardianship did indeed make the contract legally void; Bannock refused to listen to the advice. An advocate from the Disability Law Center contacted Robert Favretto, the owner of Kenai Chrysler, on the Denisons' behalf. Favretto would not listen to the advocate's advice. Despite these contacts, Kenai Chrysler sought no legal advice concerning the validity of the sales contract until November 15, a full month after the sale.
During this time, Kenai Chrysler continued in its active efforts to enforce the contract. The company promptly assigned David's loan to the General Motors Acceptance Corporation (GMAC) but never informed GMAC of David's incapacity. It also demanded storage fees from David for keeping the Neon on its lot. It sold David's Pontiac trade-in on the same day the Denisons brought the Neon back for the second time, even though the Denisons were still contesting the sale.
GMAC eventually repossessed the Neon and sold it, resulting in a deficiency on the loan. After the Denisons' attorney informed GMAC of David's guardianship, GMAC agreed to treat the loan as uncollectible. Kenai Chrysler paid GMAC the deficiency without asking whether GMAC intended to collect the loan.
B. Proceedings
On December 4, 2002, Kenai Chrysler petitioned in probate court to modify David's guardianship order so that it would allow him to purchase the car. The company claimed to have standing to file the probate petition as "a person interested in the ward's welfare." The probate court denied the petition and awarded the Denisons attorney's fees, expressly finding the petition to be frivolous and without good cause.
The day after Kenai Chrysler filed its petition in probate court, the Denisons sued the company, seeking a judgment declaring that the sales contract was void because of the guardianship. The Denisons also sought an injunction to prevent Kenai Chrysler from enforcing the contract, monetary damages under the Unfair Trade Practices Act (UTPA),[2] and punitive damages. Kenai Chrysler counterclaimed for restitution, including reimbursement for paying the deficiency to GMAC.
The parties filed cross-motions for summary judgment on Kenai Chrysler's liability under the UTPA. The superior court denied both motions, but noted that the Denisons appeared to be entitled to summary judgment on their claim to declare the contract void as a matter of law. The court also observed that, even though Kenai Chrysler had cited the Restatement (Second) of Contracts to support the validity of the contract, the company had "failed to address the section of the restatement dealing directly with the capacity of persons under guardianship by reason of an adjudication of mental illness or defect to incur contractual duties."
The Denisons then moved for summary judgment on their claim for declaratory relief. Kenai Chrysler requested a continuance for discovery to determine whether the Denisons had abandoned their guardianship. The company characterized this issue as the key to proving that the Denisons owed restitution. The superior court granted the continuance, but Kenai Chrysler failed to seek any appropriate discovery on the issue. The Denisons renewed their motion for summary judgment after the close of discovery, and Kenai Chrysler did not oppose their motion. The court granted the Denisons' motion for summary judgment and declared the sales contract void as a matter of law. It also summarily granted judgment against Kenai Chrysler on its affirmative defenses and counterclaims.
The Denisons' case proceeded to trial before a jury on the Denisons' UTPA claim. During the trial, the Denisons sought to refresh the memory of a Kenai Chrysler employee *1247 by referring to a rental rate quote that Dorothy had obtained from the company. The trial court allowed the Denisons to rely on the quote for this purpose, even though Kenai Chrysler objected that the quote had not been disclosed to it before trial.
The trial court also directed Kenai Chrysler general manager Duane Bannock to rely on a prepared script in responding to questions by Kenai Chrysler that asked Bannock to describe the legal advice he had received concerning the Denisons' claim.
At the conclusion of the trial, the jury returned a verdict in the Denisons' favor. The verdict awarded David $500 for loss of his down payment, $4,650 for the value of his Pontiac trade-in, and $5,000 for the loss of use of his Pontiac after the sale. Although the jury found that Kenai Chrysler had demonstrated "reckless indifference" to David's interests, the jury foreman advised the court that the jury did not favor awarding punitive damages. Upon learning of the foreman's advice, the Denisons indicated that they would waive their claim for punitive damages. The superior court later awarded the Denisons treble damages under the UTPA; the award totaled $30,450.
The Denisons also requested $63,280 in attorney's fees. After subtracting fees incurred by the Denisons in the probate matter, the superior court awarded them eighty percent of the amount they requested. The court noted that while it did "not challenge the accounting or hourly rate, it [did] find that the time spent in pursuit of the claim was more than should [have been] reasonably charged to the Defendants under the circumstances. . . ." The court then entered final judgment against Kenai Chrysler. In entering judgment, the court neglected to rule on two motions the Denisons had previously filed asking the court to impose sanctions against Kenai Chrysler; the court had reserved ruling on the motions until the conclusion of trial, but evidently forgot to address them before entering judgment.
Kenai Chrysler appeals on various grounds. The Denisons cross-appeal, contesting the award of attorney's fees and the trial court's failure to sanction Kenai Chrysler.
III. KENAI CHRYSLER'S APPEAL
A. The Superior Court's Summary Judgment Rulings
Kenai Chrysler first challenges the superior court's summary judgment orders.[3]
1. Summary judgment for Denisons on claim for declaratory relief
The Denisons moved for summary judgment on their claim for a declaratory judgment that the contract between David and Kenai Chrysler was void and not merely voidable; they filed their initial motion before the close of discovery. Kenai Chrysler argued in opposition that issues of fact existed as to whether the Denisons neglected and abandoned their duties as guardians; the company moved for a continuance under Alaska Civil Rule 56(f) until discovery was complete. The court granted the continuance. The Denisons renewed their motion for summary judgment after the close of discovery and supported their renewed motion with an affidavit of Dorothy Denison describing the duties the Denisons performed as David's guardians. Kenai Chrysler failed to oppose the renewed motion and offered no evidence suggesting that the guardianship had been abandoned. The superior court granted the renewed motion for *1248 summary judgment, declaring the sales contract void as a matter of law. On appeal, Kenai Chrysler contests the order granting summary judgment.
As a preliminary matter, we note that Kenai Chrysler abandoned this issue by failing to oppose the Denisons' renewed motion for summary judgment. Even if Kenai Chrysler had preserved the issue, moreover, the company's position would be unpersuasive. Kenai Chrysler points out that Alaska has not expressly held that a valid guardianship order automatically voids an attempt by the ward to create a binding contract. In Kenai Chrysler's view, the party contracting with the ward should at least be entitled to restitution; and in any event, Kenai Chrysler maintains, factual issues existed here as to the validity of David's guardianship.
These arguments lack merit. Under the Restatement (Second) of Contracts, the existence of a valid legal guardianship precludes the formation of a valid contract with the guardianship's ward.[4] In keeping with the Restatement's view, we ruled in Pappert v. Sargent that a party who attempted to enter into a contract with a ward would be entitled to restitution only in the absence of actual or constructive knowledge of the ward's incompetence.[5] Kenai Chrysler nevertheless cites Pappert as a case supporting its position that a genuine issue of material fact existed as to whether the dealership had notice of David's guardianship. But Kenai Chrysler misreads Pappert. The incompetent party in Pappert was not under a legal guardianship,[6] and the circumstances of the disputed transaction in that case failed to create any reason to suspect incompetence.[7] By contrast, in the present case, David Denison was a ward under a formal guardianship order that declared him incompetent to enter into a contract. And under the Restatement (Second) of Contracts, the guardianship order gave notice to the public of David's incapacity:
The guardianship proceedings are treated as giving public notice of the ward's incapacity and establish his status with respect to transactions during guardianship even though the other party to a particular transaction may have no knowledge or reason to know of the guardianship: the guardian is not required to give personal notice to all persons who may deal with the ward.[[8]]
Since Kenai Chrysler had constructive notice of David's incapacity, it was not entitled to restitution under Pappert v. Sargent.[9]
Kenai Chrysler's position also ignores Alaska's territorial case law. In The Emporium v. Boyle, the Alaska territorial court followed opinions from several states recognizing that "an adjudication of insanity is notice to all the world of the fact that from that time on neither the lunatic nor his estate can be held upon any contract except those completed before that time."[10] Applying this principle, the court in The Emporium held that a letter of credit authorizing another person to purchase goods on account was automatically revoked when the person who wrote the letter was declared incompetent.[11] This conclusion was justified, the court explained, "because the world was charged with notice of the adjudication."[12]
Based on these authorities, we conclude that the superior court correctly interpreted and applied the law. We also reject Kenai Chrysler's suggestions that factual issues *1249 concerning David's state of mind at the time of the sale precluded summary judgment on the Denisons' claim for declaratory relief.
The Restatement makes it clear that a ward does not regain the ability to enter into a contract merely by having a "lucid interval"; instead, to establish restored ability to enter into a contract, the evidence must show that the guardianship was "terminated or abandoned."[13] Although Kenai Chrysler argues here that evidence of the Denisons' neglect might have supported a finding of restored capacity, the Restatement's standard requires more than a showing of mere neglect. The Restatement refers to the termination of a guardianship occurring by death or removal of the guardian, or by lapse where the "ward resumes full control of his property without interference over a substantial period of time."[14]
To support its claim that the Denisons abandoned David as their ward, Kenai Chrysler alleges that the Denisons (1) failed to produce evidence that they had filed a visitor report as required by AS 13.26.118(a); (2) allowed David to use his own bank account; (3) permitted David to work in a retail establishment where he used a cash register; (4) failed to prevent David from entering into the Dodge Neon transaction; (5) failed to inform Kenai Chrysler promptly of the guardianship's existence; (6) failed to prevent David from driving the Neon; and (7) failed to appoint a conservator for David when they encountered trouble controlling his purchases. But these circumstances fail to raise a genuine question of material fact on the issue of abandonment.
The absence of a routine report hardly amounts to abandonment. Nor can abandonment be shown by evidence suggesting that the Denisons encouraged David to act independently. To the contrary, the terms of David's guardianship order instructed his guardians to encourage David to be as independent as possible while still protecting him. Allowing David a bank account and a job falls squarely within the scope of these instructions by encouraging David's development.
Furthermore, the guardianship order did not oblige the Denisons to watch David's every movement in order to prevent him from trying to enter into contracts. Instead, as we have already observed, the guardianship order itself gave legal notice to all potential contracting parties to avoid entering into a bargain with David. Accordingly, neither the Denisons' failure to prevent the Kenai Chrysler contract nor their failure to give Kenai Chrysler advance warnings could reasonably be construed to imply abandonment of the guardianship.[15]
Finally, the Denisons' supposed inability to control David's spending does not reasonably suggest an abandonment; the uncontradicted evidence of their ongoing efforts to control David's finances shows just the opposite. The Denisons are David's guardians, not his guarantors.
In short, Kenai Chrysler failed to adduce any evidence sufficient to raise a genuine issue of material fact precluding the superior court from ruling as a matter of law that David's status as a ward rendered his contract with Kenai Chrysler void. We thus affirm the superior court's summary judgment order declaring the contract void as a matter of law.
2. Summary judgment for the Denisons on Kenai Chrysler's affirmative defenses
The superior court also granted the Denisons' summary judgment motion on all of Kenai Chrysler's affirmative defenses. Kenai Chrysler argues on appeal that summary judgment was inappropriate, specifically contending that the trial court erred in precluding the company from defending on the *1250 grounds that the Denisons failed to mitigate their damages and neglected to join a necessary party, GMAC.
a. Mitigation of damages
Kenai Chrysler argues that the superior court erred in granting summary judgment to the Denisons on the issue of their alleged failure to mitigate their damages. The Denisons recognize that they had a duty to act on David's behalf to mitigate his damages, but argue that they did everything they could to comply with that duty. The only money damages ultimately implicated by Kenai Chrysler's mitigation defense were those resulting from the company's UTPA violations: specifically, the jury awarded the Denisons damages for the $500 down payment Kenai Chrysler refused to refund, the $5,000 in damages David incurred by losing the use of his Pontiac, and the $4,650 representing his permanent loss of the car itself.
Under the undisputed facts, only one of these three items of damages—lost-use damages—arguably fell within the Denisons' control. Kenai Chrysler had the sole power to mitigate the $500 down payment it received from David. But the company refused to unwind the contract and refund the cash. Similarly, only Kenai Chrysler could have mitigated David's damages for the permanent loss of his Pontiac. But the company refused to give the car back, and thus permanently deprived David of its fair market value. The superior court's summary judgment order properly barred Kenai Chrysler from raising a mitigation defense as to these damages.
The court's order granting summary judgment becomes more problematic as applied to the Denisons' claim for damages attributable to David's loss of use of his car. Our case law does not preclude lost-use damages in cases involving permanent deprivation. In fact, we have specifically allowed an award of loss of use damages even when property has been totally destroyed.[16] We have further held that a plaintiff who loses property is not always made whole by being paid fair market value at some later time; we have recognized that, as long as the delay in finding a suitable replacement is reasonably necessary, the plaintiff in such cases can be awarded damages exceeding the property's fair market value.[17] We have also ruled that a plaintiff who claims loss of use need not incur any actual costs for temporary replacement; the claimant may instead rely on an estimate of the cost for temporary replacement.[18]
On the other hand, as the superior court's instructions recognized, our case law unquestionably precluded the Denisons from claiming loss of use damages beyond the time reasonably necessary to replace David's Pontiac.[19] Because the Denisons needed to take reasonable steps to limit the duration of their lost-use damages, the trial court's summary judgment order was inappropriate to the extent that it purported to rule as a matter of law that the Denisons had actually met their duty to mitigate, thereby precluding Kenai Chrysler from maintaining that their delay in replacing the Pontiac was unreasonable. Since the reasonableness of the Denisons' delay was disputable when the superior court granted summary judgment, we agree with Kenai Chrysler that its right to raise a mitigation defense on this point could not be denied as a matter of law.
The appellate record nevertheless establishes that any error in granting summary judgment against Kenai Chrysler on the Denisons' duty to mitigate their loss of use damages amounted at most to harmless error. Specifically, the record establishes *1251 that, despite the seeming breadth of its summary judgment order, the superior court allowed Kenai Chrysler to contest the reasonableness of the Denisons' claim for loss of use damages and to argue that they could have limited their losses through reasonable action.
At trial, the Denisons specifically objected to evidence presented by Kenai Chrysler that challenged the reasonableness of their loss of use claim, insisting that this evidence violated the trial court's order granting them summary judgment on Kenai Chrysler's affirmative defense of mitigation. But the trial court overruled this objection, allowed Kenai Chrysler to rely on the disputed evidence, and specifically ruled that Kenai Chrysler could argue to the jury whether the lost-use damages claimed by the Denisons were "reasonable under the circumstances." By submitting the issue of reasonableness to the jury after allowing the parties to contest the point, the trial court effectively avoided any prejudice stemming from the overbreadth of its summary judgment order.
Although Kenai Chrysler relatedly contends that it was prejudiced by the superior court's failure to give a proper instruction on the Denisons' duty to limit their lost-use damages, the record belies this claim of error. At trial, Kenai Chrysler objected to the Denisons' proposed instruction on the issue of loss of use of David's Pontiac. The company proposed an alternative instruction, asserting that the language of its proposed version more closely approximated Alaska's pattern jury instruction on lost-use damages.[20] Kenai Chrysler's proposed instruction provided:
Plaintiffs also claim they have been damaged by the loss of use of the 1994 Pontiac. If you find that the defendant caused the loss of the 1994 Pontiac, then the plaintiff is entitled to be compensated for the fair value of the use of the 1994 Pontiac for the time period reasonably necessary to replace it.
The court ultimately instructed the jury on loss of use of property as follows:
Plaintiffs also claim on behalf of David Denison that he was damaged by the loss of use of the 1994 Pontiac since the time it was delivered to Kenai Chrysler. The plaintiffs are entitled to be compensated for the fair value of the use of the 1994 Pontiac for the time period reasonably necessary to replace it.
Kenai Chrysler now objects that the court's instruction modified Alaska's pattern loss of use instruction. But the company fails to explain exactly what change it objects to, why the change amounted to legal error, and how any error caused actual prejudice. Kenai Chrysler's argument is also puzzling because the company's own proposed instruction seems to stray further from the pattern instruction than the instruction the trial court actually gave.[21] In light of Kenai Chrysler's conclusory briefing on this point, we conclude that it has failed to adequately preserve the issue.[22]
Kenai Chrysler also complains that the trial court erred in failing to give the jury a specific instruction on the Denisons' duty to mitigate their damages. But while the trial court did not specifically instruct on the duty to mitigate as such, its instruction on loss of use damages communicated the substance of that requirement.
Alaska's Pattern Jury Instruction on mitigation speaks in terms of "avoidable consequences" and uses the language of reasonableness, informing the jury that a plaintiff may not recover for a loss that could have been avoided with reasonable efforts and that the jury may not require the defendant to pay for any loss that the plaintiff could reasonably *1252 have avoided.[23] In this case, as we have seen, the trial court's instruction on loss of use damages specifically told the jury that the Denisons were "entitled to be compensated for the fair value of the use of the 1994 Pontiac for the time reasonably necessary to replace it." We see no practical distinction between this instruction and Alaska's Pattern Instruction on the duty to mitigate, as it would have applied to the Denisons' loss of use claim.
Hence, to the extent that the trial court's error in granting summary judgment against Kenai Chrysler caused the court to omit a specific instruction on mitigation, we conclude that this omission proved inconsequential. We therefore hold that the trial court's order granting summary judgment against Kenai Chrysler on its mitigation defense did not result in reversible error.
b. Failure to join a necessary party
Kenai Chrysler claimed as an affirmative defense below that the Denisons' claims under the UTPA were barred because the Denisons had failed to join GMAC as a necessary party under Alaska Civil Rule 19(a).[24] Kenai Chrysler reasoned that GMAC needed to be named because no other party had legal authority to rescind the sales contract once Kenai Chrysler assigned it to GMAC. Kenai Chrysler now challenges the superior court's order granting the Denisons summary judgment on this point, renewing the claim it asserted below.
Because it is undisputed that Kenai Chrysler assigned the Neon's financing contract to GMAC shortly after David signed it, the only controversy is whether the assignment to GMAC precluded the Denisons from obtaining "complete relief" from Kenai Chrysler without naming GMAC.[25] As the superior court correctly recognized in addressing this point, there was no valid contract for Kenai Chrysler to assign to GMAC. GMAC therefore played no necessary role in the Denisons' action. Their claims under the UTPA concerned Kenai Chrysler's treatment of David Denison and his guardians, not whether the Denisons were entitled to rescind a contract that had never been validly formed. The superior court properly granted summary judgment on this point.
B. The Superior Court's Refusal To Compel Discovery
Kenai Chrysler moved under Civil Rule 37(a)(2) to compel "proper and sufficient responses" to a list of discovery requests. The Denisons opposed that motion on the ground that Kenai Chrysler had not made a good faith attempt to meet and confer with them, as required under Civil Rule 37(a)(2)(B); they alternatively contended that Kenai Chrysler was not entitled to the information it sought. Kenai Chrysler challenges the superior court's denial of its motion to compel these responses.[26]
Although the superior court did not specify its reasons for denying Kenai Chrysler's motion to compel discovery, it was well within the court's discretion to deny the motion based on Kenai Chrysler's failure to meet and confer. Civil Rule 37(a)(2)(B) requires a party moving to compel discovery to certify that it "has in good faith conferred or attempted to confer with the person or party failing to make the discovery in an effort to secure the information or material without court action."[27] When the Denisons initially refused to comply with Kenai Chrysler's discovery requests, the company sent the Denisons a letter demanding that they comply or *1253 face a motion to compel. The letter itemized the discovery requests at issue but failed to respond to the Denisons' objections of overbreadth and irrelevance except in a cursory fashion. The letter also nominally claimed to be an attempt to confer, but it included no offer to actually meet with the Denisons or to engage in a dialogue in any medium.[28]
In moving to compel discovery from the Denisons, Kenai Chrysler's counsel certified that Kenai Chrysler's letter to the Denisons met Rule 37(a)(2)(B)'s requirement of an "offer to meet and confer." But given these circumstances, the superior court could reasonably have found that Kenai Chrysler made no genuine attempt to resolve the disputed discovery issues before turning to the court with its motion to compel. Because the superior court properly could have denied Kenai Chrysler's motion on this basis, we find no abuse of discretion.
C. The Superior Court's Evidentiary Rulings
Kenai Chrysler challenges two evidentiary rulings made by the superior court during trial.
1. Refreshing the memory of Kenai Chrysler's general manager
The Denisons called Justin Goodman as a witness at trial. Goodman was the general manager of Kenai Chrysler and frequently gave rate quotes for car rentals. The Denisons' counsel asked Goodman whether he remembered providing a rate quote to Dorothy Denison for a rental car. Goodman replied that he did not. The Denisons' counsel then showed Goodman two documents—a fax cover sheet addressed to Dorothy Denison and a price quote signed by Goodman estimating the rental rate for a compact car. The day before, the superior court had refused to admit the same rental quote into evidence after Kenai Chrysler's counsel objected that the Denisons had not disclosed the document in advance of trial. Kenai Chrysler objected when the Denisons sought to use the rate quote to refresh Goodman's recollection, relying on the court's earlier order excluding it from evidence. In response to the renewed objection, the trial court ruled that the Denisons would not be barred from using it to refresh Goodman's recollection.
Kenai Chrysler now argues that the trial court erred in allowing the documents' use to refresh recollection, contending that the company suffered unfair surprise because the Denisons failed to produce the rate quote before trial.
Alaska Rule of Evidence 612(a) governs this issue, stating "[a]ny writing or object may be used by a witness to refresh the memory of the witness while testifying."[29] Under this rule, a document need not be admissible to be used to refresh a witness's memory.[30] Instead, if the party using the document does not wish to admit it, Rule 612(a) simply allows any party seeking to impeach the witness whose memory is refreshed the right "to inspect the writing . . ., to cross-examine the witness thereon, and to introduce those portions which relate to the testimony of the witness."[31] By expressly granting the right to immediate inspection, the rule implicitly recognizes the absence of a pretrial duty of disclosure.
Under the rule, then, Kenai Chrysler had the opportunity to inspect the rate quote and to use it as a basis for impeaching Goodman during cross-examination. But the rule gave it no right of earlier disclosure. Kenai Chrysler cites no other authority requiring early disclosure for this limited use. Nor does it specify how the rate quote's use to refresh memory caused any actual prejudice. Moreover, we note that Kenai Chrysler was given a copy of the rate quote the day before *1254 the Denisons used it to refresh Goodman's recollection. Under these circumstances, the superior court did not abuse its discretion in allowing the Denisons to use the rate quote for this purpose.
2. Requiring Kenai Chrysler's witness to answer questions by reading written answers prepared by the trial court
During Kenai Chrysler's direct examination of Kenai Chrysler's former general manager, Duane Bannock, Kenai Chrysler's trial counsel asked Bannock whether he had sought advice from an attorney about David Denison's situation and, if so, what advice he had received. The Denisons objected; in response, Kenai Chrysler's counsel insisted that Bannock's testimony on this point was necessary to show that the dealership's actions merely reflected its good faith efforts to follow the legal advice of its counsel. Kenai Chrysler's trial counsel assured the court that "we're not arguing about the rule of law. . . . We're not trying to state a legal conclusion here. . . . We're trying to get to Duane Bannock's state of mind and the position of Kenai Chrysler during that time period, and whether or not they were acting fairly or whether or not they had a reasonable basis for their actions."
After consulting with counsel for both sides and with the witness, the trial court prepared two questions and responses that it believed sufficient to allow Bannock to make Kenai Chrysler's desired point without dwelling on legal details that might lead the jury to view the legal advice as a correct and authoritative statement of applicable law. The court ruled that questions and answers along the lines it proposed would be admissible.
After the jury returned to the courtroom and Bannock's direct examination resumed, Bannock began to stray beyond the scope of the responses the court had ruled admissible. When the Denisons objected, the court instructed Bannock to read from the paper if he was unable to confine his answers to conform to the court's written responses. The court then informed the jury that the court had drafted the responses for Bannock's use and that jurors should therefore not hold it against Bannock or question his credibility if his answers did not appear to be spontaneous.
On appeal, Kenai Chrysler challenges the superior court's decision to require Bannock to read from answers prepared by the court. But Kenai Chrysler has failed to preserve this point for appeal. Specifically, Kenai Chrysler never objected to the trial court's rulings and made no offer of proof as to the details excluded from Bannock's proposed testimony.[32]
Under Alaska Rule of Evidence 103(a)(2), a party may not claim error in a ruling that excludes evidence unless "the substance of the evidence was made known to the court by offer or was apparent from the context."[33] These requirements have not been met here, since Kenai Chrysler made no formal offer to establish a record of the evidence it sought to include, and since the context provided by the current record fails to make clear what testimony the trial court excluded.
As it stands, the appellate record provides no basis for meaningful appellate review of Kenai Chrysler's claim of prejudicial error. Accordingly, Kenai Chrysler's failure to raise the issue below, coupled with its failure to provide an adequate offer of proof, precludes it from challenging the superior court's ruling for the first time on appeal.[34]
We find no sign of plain error here.[35] The questions and responses directed by the trial court appear to have captured the main point that Kenai Chrysler's trial counsel believed to be crucial—namely, that Kenai Chrysler's conduct comported with advice received from its lawyer. Furthermore, Bannock's testimony addressing this point was marginally relevant, at most, because the *1255 advice Bannock described was received a month after the disputed sale—well after Kenai Chrysler had taken numerous steps committing the dealership to its position that the contract was valid and would be enforced. We thus see no basis for overturning the superior court's rulings concerning Bannock's testimony.
D. Unfair Trade Practices Act Claim
Kenai Chrysler next argues that the evidence failed to support the jury's finding of liability under the UTPA and that the company's conduct did not violate the UTPA as a matter of law.[36]
In arguing this point, Kenai Chrysler insists that a merchant's attempt to enforce what it sees as a valid contract cannot, as a matter of law, amount to an unfair trade practice under the UTPA. Kenai Chrysler appears to contend that the evidence here showed nothing more.[37]
The Denisons sued under two sections of the UTPA: AS 45.50.471(a) and AS 45.50.471(b)(14). Subsection .471(a) is the UTPA's catchall provision; it states that "[u]nfair methods of competition and unfair or deceptive acts or practices in the conduct of trade or commerce are declared to be unlawful." Subsection .471(b)(14) further provides that: "[t]he terms `unfair methods of competition' and `unfair or deceptive acts or practices' include, but are not limited to, the following acts: . . . representing that an agreement confers or involves rights, remedies or obligations which it does not confer or involve, or which are prohibited by law."
As a general matter, a prima facie case of unfair or deceptive acts or practices under the UTPA requires proof of two elements: "(1) that the defendant is engaged in trade or commerce; and (2) that in the conduct of trade or commerce, an unfair act or practice has occurred."[38] We have previously ruled that "[a]n act or practice is deceptive or unfair it if has the capacity or tendency to deceive."[39] The plaintiff need not prove that the defendant intended to deceive; it is enough to show that the acts and practices were "capable of being interpreted in a misleading way."[40] Hence, an act or practice can be unfair without being deceptive.[41]
A variety of factors can be considered in determining the existence of an unfair practice, including
(1) whether the practice, without necessarily having been previously considered unlawful, offends public policy as it has been established by statutes, the common law, or otherwise—whether, in other words, it is within at least the penumbra of some common-law, statutory, or other established concept of unfairness; (2) whether it is immoral, unethical, oppressive, or unscrupulous; (3) whether it causes substantial injury to consumers (or competitors or other businessmen).[[42]]
The trial court in this case instructed the jury on these provisions.
*1256 Kenai Chrysler correctly asserts that these provisions require proof of something more than the mere assertion of a good faith but mistaken belief that a contract was valid.[43] Yet courts have broadly interpreted similar provisions to prohibit merchants from going beyond mere assertion of mistaken beliefs by engaging in conduct that is deceptive, unethical, or unfair.[44] The Fourth Circuit Court of Appeals, for example, described an unfair trade practice as an "inequitable assertion of power or position," ruling that "[a]lthough it may be rare that the exercise of a contractual right will meet this stringent standard, it is possible for such an exercise, when it involves egregious and aggravating conduct, to constitute an unfair . . . trade practice under North Carolina's UTPA."[45]
Likewise, Georgia has recognized that a seller can commit an unfair trade practice by failing to investigate the validity of the seller's title after learning of a potential problem with it; applying this principle, the Georgia Court of Appeals held that, under the circumstances before it, the seller's inaction amounted to an unfair practice because it reflected a "blatant disregard of the rights of innocent purchasers."[46]
Many other jurisdictions define "unfair or deceptive acts or practices" to extend beyond conduct specifically prohibited by statute or common law;[47] instead of looking for expressly prohibited conduct, these cases focus on the unfairness of the disputed practice under the specific circumstances presented.[48]
Applying the flexible, case-specific approach used in these cases, we think that reasonable jurors could fairly find that Kenai Chrysler's conduct went far beyond a simple assertion of the company's good faith belief that the sale contract was valid.
The jury heard substantial evidence tending to show that Kenai Chrysler waited a full month after actually learning of David's disability before it first consulted its lawyer about the guardianship's effect on the disputed contract. In the interim, and every step of the way, Kenai Chrysler actively fought to defeat the Denisons' efforts to rescind the sale. The company charged ahead with selling David's trade-in and finalizing the DMV paperwork for the sale. Its employees repeatedly ignored the express requests of David's legal guardians by returning the keys directly to David; they also advised David that the car was his, despite their knowledge that the state had declared him developmentally disabled and had appointed his parents as legal guardians. Later, after it knew of the guardianship, Kenai Chrysler sent a letter to David himself demanding that he remove the Neon from its lot or incur *1257 storage charges. And even though GMAC agreed to treat the unpaid balance of David's loan as uncollectible, Kenai Chrysler after paying the balance to GMAC nonetheless counterclaimed against the Denisons for the amount it had paid.
In our view, a jury considering the totality of these circumstances in the light most favorable to the Denisons could reasonably have found that Kenai Chrysler's attempts to enforce the sales contract blatantly disregarded the Denisons' rights and amounted to unethical conduct.[49] We thus conclude that the evidence as a whole was sufficient to support the Denisons' claims under the UTPA.
E. Jury's Award
Kenai Chrysler challenges the jury's assessment of damages for the value of David's 1994 Pontiac and for his lost use of the car.
1. Value of David's Pontiac
The jury awarded the Denisons $4,650 in damages for David's permanent loss of his Pontiac. David had purchased the Pontiac from another car dealership in Kenai for $5,500, a few months before he traded it in at Kenai Chrysler. Evidence of the price charged by the local dealership a few months before Kenai Chrysler took David's car provided the jury a sufficient basis for determining the value of the Pontiac when he traded it in for the Neon. David still owed about $850 for the car. It appears that the jury subtracted this amount from David's original purchase price and awarded him the balance. Although Kenai Chrysler had valued David's trade-in at only $1,300, the jury was not obliged to rely on this price, since it reflected the car's wholesale value. Kenai Chrysler's own manager acknowledged that the Pontiac's retail value would be between $4,000 and $5,000. The dealership offered no estimate of the cost required to restore the Pontiac to retail condition. Given this evidence, the record supports the jury's award for the car.
2. Loss of use of David's Pontiac
The jury awarded David an additional $5,000 for loss of use of his car. As we have previously mentioned, the superior court instructed the jury that it could award David "the fair value of the use of the 1994 Pontiac for the time period reasonably necessary to replace it." The court also instructed the jury that "[t]he value of the use of the 1994 Pontiac is to be measured by the cost of obtaining a substitute for it during the period of loss of use." At the time of trial, David had not yet replaced the Pontiac; the Denisons claimed that their delay in replacing the car was reasonably necessary because David was unable to afford a replacement.
When the jury returned its verdict awarding loss of use damages, about twenty months had elapsed since the date of the sale. Spread over the twenty months, the $5,000 award amounts to $250 per month for David's loss of use of the Pontiac.
Justin Goodman, the general manager of Kenai Chrysler and former manager of its rental fleet, testified that he had seen rental rates as low as $499 per month in the Kenai area. He also recalled that on at least one occasion he had quoted a price of $1,200 per month for a new compact car. He further testified, however, that if the Denisons had asked, he could have allowed David to use a car free of charge.
Kenai Chrysler contends that this evidence fails to support the award for loss of use damages. In Ben Lomond, Inc. v. Campbell, we held that testimony concerning the reasonable rental value for a diesel generator was sufficient to support a jury award for loss of use of a comparable generator.[50] Here, if the jury found the Denisons' twenty-month delay to be reasonably necessary and disbelieved Goodman's after-the-fact contention that a free car would have been available, Goodman's testimony concerning rental value provided a substantial basis to support the jury's award: the award, amounting to $250 per month for twenty months, would fall well below the lowest rental value mentioned by Goodman—$499 per month. And it would *1258 nearly have matched Goodman's low range estimate if the jury found that the Denisons should reasonably have replaced the Pontiac within ten months after the sale.[51]
Kenai Chrysler also argues that the jury's award for loss of use damages was excessive because it was disproportionate to the value of David's Pontiac. To be sure, even if supported by solid evidence of monthly rental value, an award for loss of use over an extended period of time could at some point become excessive—especially if the award was combined, as it was here, with an additional award for permanent loss of the property's value. But in Ben Lomond, Inc. v. Campbell, we emphasized that "[t]he question of whether damages are inadequate, or excessive, is in the first instance committed to the discretion of the trial judge."[52] In light of the trial court's broad discretion over the issue, we recognized in Ben Lomond that a trial court's award for lost-use damages could be overturned as excessive only "in the most exceptional circumstances to prevent any miscarriage of justice."[53] Relying on this standard, we specifically declined to hold "that a loss of use award should be limited to the value of the property,"[54] noting that we had "explicitly rejected this position"