Justia Contracts Opinion Summaries

The question before the Supreme Court in this appeal was whether a defendant who pled no contest to disorderly conduct in a criminal action could be collaterally estopped from relitigating the elements of that crime in a related civil declaratory judgment action regarding insurance coverage, thereby precluding coverage. Kent Bearden pled no contest to disorderly conduct for punching Paul Rasmussen. Rasmussen subsequently filed a civil complaint against Bearden, and Bearden tendered the lawsuit to State Farm Insurance Company to defend and indemnify him under his homeowners insurance policy. State Farm sought declaratory relief and moved for summary judgment on the ground that Bearden's conduct could not be considered an "accident" within the meaning of the insurance policy because his no-contest plea collaterally estopped him from relitigating the issues of mens rea and self-defense. The superior court granted the motion. Finding no error with the superior court's decision, the Supreme Court affirmed. View "Bearden v. State Farm Fire & Casualty Co." on Justia Law

A jury found Ronald Brooks liable to his former brother-in-law, Timothy Hollaar, for the full amount of loans that had been memorialized by four promissory notes. On appeal, Ronald argued: (1) that the trial court erred in allowing Timothy to recover more than nominal damages, since Timothy was not the real source of the money and intended to pay any recovery to the family members who supplied it; (2) that the trial court erred by failing to make special findings of fact on Timothy’s promissory estoppel claim; and (3) that the trial court erred in naming Timothy the prevailing party. Because Timothy could lawfully sue to recover the loans, the promissory estoppel claim was properly submitted to the jury, and Timothy was the prevailing party, the Supreme Court affirmed the judgment. View "Brooks v. Hollaar" on Justia Law

Leisnoi, Inc. retained the law firm of Merdes & Merdes to represent it in litigation against Omar Stratman over its certification of and title to certain lands Leisnoi claimed under the Alaska Native Claims Settlement Act. Leisnoi and Merdes entered a contingency fee agreement under which, if Leisnoi was successful, Merdes would receive an interest in the lands Leisnoi obtained or retained. The case was resolved in 1992 in favor of Leisnoi, although Stratman appealed and the related litigation continued for another decade. In October 2008, the Stratman litigation finally concluded in Leisnoi's favor. The following year, Merdes moved the superior court to issue a writ of execution. Leisnoi opposed the motion, arguing among other things that the judgment was void under 43 U.S.C. 1621(a)'s restrictions on contingency fee contracts involving Alaska Native Claims Settlement Act lands. In January 2010, the Superior Court issued an order denying Leisnoi's motion and granting Merdes's motion to execute. Six months later, Leisnoi paid Merdes the remaining balance. Leisnoi then appealed the superior court's ruling. The issue before the Supreme Court concerned questions of waiver and whether the superior court's judgment was void or voidable. Upon review of the matter, the Court concluded: (1) Leisnoi did not waive its right to appeal by paying Merdes the balance due on the judgment; (2) an Arbitration Panel's fee award and the superior court's 1995 entry of judgment violated 43 U.S.C. 1621(a)'s prohibition against attorney contingency fee contracts based on the value of Native lands that were subject to the Act; (3) the superior court's 2010 order granting Merdes's motion to execute on the 1995 judgment separately violated the Act's prohibition against executing on judgments arising from prohibited attorney contingency fee contracts; (4) notwithstanding the illegality of the Arbitration Panel fee award and the 1995 judgment, Leisnoi was not entitled to relief pursuant to Civil Rule 60(b) (the 1995 order was voidable rather than void for purposes of Civil Rule 60(b), and therefore not subject to attack under Civil Rule 60(b)(4)); and (5) Leisnoi was not entitled to relief under Civil Rule 60(b)(5) or 60(b)(6). Accordingly, Merdes was ordered to return Leisnoi's payment of the balance on the judgment, but Leisnoi was not entitled to recover payments made prior to the issuance of the writ of execution. View "Leisnoi, Inc. v. Merdes & Merdes, P.C." on Justia Law

In this appeal, the issue before the court concerned whether monetary damages are available to a prisoner for violations of the terms of a judicial decree approving the "Cleary Final Settlement Agreement." In 2004 appellee Corrections Corporation of America contracted with the State to house Alaska inmates at Corrections Corporation's Red Rock Correctional Center in Arizona. Byran Perotti was an Alaska inmate at Red Rock. He filed a complaint against Corrections Corporation alleging that Corrections Corporation violated provisions of its contract with the State, as well as various State Department of Corrections policies. He asserted standing as a third-party beneficiary to the contract between the State and Corrections Corporation. He based his argument on his status as a Cleary class member and the provisions of the Cleary Final Settlement Agreement, which settled the class action involving various inmate claims against the State of Alaska, Department of Corrections (DOC). Perotti's complaint sought liquidated damages under the DOC-Corrections Corporation contract, as well as compensatory damages, nominal damages, and punitive damages. Upon review, the Supreme Court concluded that the Cleary Final Settlement Agreement did not contemplate the award of monetary damages to enforce its provisions. Therefore the Court affirmed the superior court's decision granting Corrections Corporation's motion for summary judgment and dismissed all of Perotti's claims. View "Perotti v. Corrections Corporation of America" on Justia Law

Sea Hawk Seafoods, Inc. sued the City of Valdez for damages after Valdez applied for a grant from the State of Alaska for funding to convert Sea Hawk's seafood processing facility into a fish meal plant but then declined to accept the $600,000 grant that the State conditionally awarded to Valdez. On pre-trial motions, the superior court dismissed Sea Hawk's claims for breach of contract, breach of an agreement to negotiate, and breach of a duty to negotiate in good faith. Valdez and Sea Hawk filed cross-motions for summary judgment on Sea Hawk's remaining claim for promissory estoppel, which the court denied. Shortly before trial, the court dismissed Sea Hawk's promissory estoppel claim as a discovery sanction. Sea Hawk and Valdez both appealed. Upon review, the Supreme Court affirmed: Sea Hawk's claims were based on statements made and a letter sent by the Valdez City Manager to the owner of Sea Hawk. Because these communications, even when viewed in the light most favorable to Sea Hawk, were insufficient as a matter of law to support Sea Hawk's claims. The Court reversed the lower court's ruling denying Valdez summary judgment on Sea Hawk's promissory estoppel claim.

The issue presented to the Supreme Court in this case was whether under the Unfair Trade Practices and Consumer Protection Act a misrepresentation by a seller of a used motor home is subject to a defense that the misrepresentation was made in good faith. Plaintiff Robert Borgen bought a used Travelaire motor home from A&M Motors, Inc. in 2004. The motor home had previously been owned by Thom and Linda Janidlo; the Janidlos traded in the vehicle to A&M Motors about two weeks before Borgen bought it. When the Janidlos traded in the motor home, they indicated that it was a 2002 model. At some point, someone changed the model year to 2003 on the documents at A&M Motors. The title from the State of Alaska showed that the motor home was a 2003 model, but the vehicle identification number (VIN) indicated that the motor home was a 2002 model. Both trial experts testified that the tenth digit of a VIN of a chassis indicates the model year of the chassis, but their testimony as to whether the same holds true for the VIN of a coach was unclear. The VIN on the chassis is the VIN on the vehicle’s title, but a motor home’s model year is determined by the model year of the coach. A&M Motors sold the Travelaire to Borgen as a 2003 model. In August 2005 Borgen discovered documents in the motor home indicating the motor home was actually a 2002 model. He contacted A&M Motors to complain; the only compensation they offered him was a $1,000 service contract. Borgen sued A&M Motors, pleading three causes of action: (1) misrepresentation, (2) violation of the Unfair Trade Practices and Consumer Protection Act (UTPA), and (3) breach of contract. Borgen moved for summary judgment on his UTPA claim in February 2008. The trial court denied that motion, and a jury ultimately decided that A&M Motors had not engaged in an unfair or deceptive act in its dealings with Borgen. Finding that the trial court did not err by finding the UTPA implied an unknowing affirmative misrepresentation of material fact would not give rise to liability, the Supreme Court affirmed the trial court's judgment with respect to Borgen's UTPA claims, but remanded for further proceedings on treble damages.

In 1995, Alaska Interstate Construction's assets were sold to a joint venture but it continued to be operated by its founder, John Ellsworth, through a company he owned called Pacific Diversified Investments, Inc. In 1998, Alaska Interstate conveyed a 20% ownership interest to Ellsworth and entered into an operating agreement that provided for Ellsworth's continued management of its operations through Pacific Diversified Investments. Alaska Interstate filed suit against Pacific and Ellsworth in 2005, principally alleging fraud, breach of the covenant of good faith and fair dealing, violation of the Unfair Trade Practices Act, breach of the parties' operating agreement, and conversion. The jury returned a verdict of $7.3 million in favor of Alaska Interstate on its Unfair Trade Practices Act claims and $7.3 million on its claims for common law fraud and breach of fiduciary duty. The parties filed many post-trial motions. Though the jury decided that Pacific Diversified Investments and Ellsworth engaged in conduct that was fraudulent, it decided that they did not materially breach the parties' operating agreement. Alaska Interstate filed a post-verdict motion for judgment notwithstanding the verdict arguing the jury's finding of fraud required the finding that the operating agreement was materially breached. That motion was denied. But the superior court did enter judgment notwithstanding the verdict nullifying the $7.3 million award for violations of the Unfair Trade Practices Act. Alaska Interstate Construction appealed; Pacific cross-appealed. Upon review, the Supreme Court affirmed the superior court's denial of the motion for judgment notwithstanding the verdict which found that the Unfair Trade Practices Act did not apply to intra-corporate disputes. The Court reversed the superior court's judgment notwithstanding the verdict on Pacific's argument that Alaska Interstate's claims were exempt from the Unfair Trade Practices Act. The Court reversed the superior court's ruling on material breach and held that the jury's findings of fraud and wilful misconduct, under the circumstances of this case, required the finding that Pacific materially breached the operating agreement as a matter of law. The Court reversed the superior court's order denying the motion for judgment notwithstanding the verdict on Pacific's fraud in the inducement claim, and we vacated the superior court's determination of prevailing party, award of attorney's fees, and award of prejudgment interest.

Appellee Wayne Manning told Appellant Diane Roberson he would give her his share of their jointly purchased mobile home. Without her knowledge, he then transferred title of the mobile home to his name only and sold it to co-Appellee Dennis Wilson. Wilson attempted to terminate Roberson's tenancy in the mobile home. Roberson filed suit in the superior court to be declared the owner of the home. The court concluded that Manning did not give his share of the home to Roberson and that Wilson was a good-faith purchaser and therefore the owner. Roberson appealed, arguing that she is the owner because Manning's gift to her was valid and the sale to Wilson was invalid. Upon review, the Supreme Court vacated the superior court's conclusion that Manning did not give Roberson the home. The Court also vacated the superior court's determination that Wilson was a good-faith purchaser. The case was remanded for additional findings.

Petitioner Eleanor Oakes owned a 7/8 undivided interest in a 20-acre parcel of land in Council, while Respondents David and Sine Holly owned a 1/8 undivided interest in the property. The parties went to court to partition the property, and each agreed to submit up to three partition proposals for the court’s selection after it heard evidence about the choices. The superior court selected one of Petitioner's proposals, and she hired a surveyor to implement the division of the property. The survey revealed a significant error in the map presented to the superior court of the selected proposal. The error resulted in the Hollys acquiring more river frontage than Petitioner had intended in her proposal which was selected by the superior court. Petitioner moved to amend the proposal, but the Hollys urged that the selected proposal be implemented as surveyed. The superior court concluded that under the doctrine of mutual mistake, Petitioner bore the risk of the drafting mistake in her proposals, and it enforced the proposal with the drafting error. But because the error in the property description did not occur in the formation of contract, the Supreme Court in its review concluded that the doctrine of mutual mistake was inapplicable. "Instead, the error occurred during the evidentiary hearing and formed a mistaken factual premise for the trial court's decision." The Court therefore remanded the case back to the superior court to determine whether it was appropriate to grant relief for mistake, and if so, to repartition the property in compliance with state law.

In 2001, Bill Kiernan owned American Towing & Recovery (Kiernan) and Willie Creech owned Vulcan Towing & Recovery (Creech). That year Kiernan and Creech decided to share a lot for their towing businesses. They agreed to split all costs associated with the lot evenly. The parties did not put their agreement in writing. While Creech asserted that under the oral agreement, Kiernan was merely a lessee with a conditional option to purchase a 50% interest, Kiernan testified in a sworn deposition that in exchange for paying half of the costs, he was to receive a 50% ownership in the lot. The relationship between the parties eventually broke down. In 2007 Kiernan became aware that Creech had taken out a second mortgage on the property without telling him, and Kiernan sued Creech. The issue on appeal involved whether their oral agreement provided that they would co-own the property, or that the Kiernan party would lease from the Creech. Creech moved for summary judgment on the ground that the statute of frauds barred any oral co-ownership agreement between the parties. The superior court granted the motion. Kiernan appealed. Upon review, the Supreme Court reversed the grant of summary judgment because the substance of the oral agreement was a disputed fact material to resolving whether an exception to the statute of frauds applied.