Justia Contracts Opinion Summaries

Appellant Zebuleon Whitney collided with a bicyclist in his pick-up truck, seriously injuring the bicyclist. The bicyclist sought a settlement agreement in excess of the maximum coverage of the driverâs insurance policy. Appellee State Farm Mutual Automobile Insurance Company (State Farm) responded with an offer to tender policy limits, which the bicyclist refused. After a series of court proceedings in both state and federal court, Appellant sued his insurance company, complaining in part that his insurance company had breached its duty to settle. State Farm moved for partial summary judgment on a portion of the duty to settle claims. The superior court granted the motion. The parties then entered a stipulation by which Appellant dismissed all remaining claims, preserving his right to appeal, and final judgment was entered in the insurance companyâs favor. Because State Farmâs rejection of the bicyclistâs settlement demand and its responsive tender of a policy limits offer was not a breach of the duty to settle, the Supreme Court affirmed the superior courtâs grant of summary judgment to that extent. But because the superior courtâs order exceeded the scope of the insurance companyâs motion for partial summary judgment, The Court reversed the superior courtâs order to the extent it exceeded the narrow issue upon which summary judgment was appropriate. The Court remanded the case for further proceedings concerning the surviving duty to settle claims.

Landowner Appellant Charles Miller contracted with Handle Construction Company, a manufacturer of pre-fabricated steel hangars, to erect a steel hangar on his land. After completing its work, the Company sued Appellant for unanticipated costs it incurred as a result of manufacturing defects in the hangar. Appellant made an offer of judgment which the Company accepted. When the Company received a separate payment from the hangar's manufacturer, Appellant refused to pay the full amount, arguing that an offset was warranted. The superior court rejected Appellant's argument and ordered him to pay the full amount of the offer. The case was submitted to the Supreme Court for review, but the Court determined that the basis for the superior court's decision was unclear. The Court reversed the decision and remanded the case for additional factual findings.

In 2006, Appellant Yvan Safar contracted with developer Per Bjorn-Roli to construct a 12-unit condominium project. Appellee Wells Fargo agreed to finance the project. By early 2007, the developer paid Appellant the entire amount of his contract, and Wells Fargo disbursed the entire loan, but the units were not complete. Appellant allegedly used his own funds to meet his payroll needs on the project. The project overran its budget, and Wells Fargo had to foreclose. Appellant contended that the bank promised to reimburse him for monies he spent in contemplating the completion of the project. After trial, the superior court found that Wells Fargo made no enforceable promise to Appellant to reimburse him. Upon review, the Supreme Court found that the bank did not make any promise or commitment to Appellant sufficient to meet the "actual promise" element of promissory estoppel. Accordingly, the Court affirmed the lower court's dismissal of Appellant's case.

Gas producers that lease land from Alaska must pay royalties calculated on the value of the gas produced from the leased area. The royalty may be calculated in one of two methods: the âhigher ofâ pricing or contract pricing. âHigher ofâ pricing is the default method of calculating royalties and is calculated using market data and the prices of other producers. The Department of Natural Resources (DNR) usually does not calculate the royalty payments under âhigher ofâ pricing until years after production. Under contract pricing, the lesseeâs price at which it sells gas is used to determine the royalty payment. Appellant Marathon Oil requested contract pricing from 2008 onward and sought retroactive application of contract pricing for 2003-2008. The DNR approved contract pricing from 2008 onward but denied the retroactive application. The superior court affirmed the DNRâs decision. On appeal to the Supreme Court, Marathon argued that the statute that governs contract pricing permitted retroactive application of contract pricing. Upon review of the arguments and the applicable legal authority, the Supreme Court concluded that though the statute was ambiguous, it would defer to the DNRâs interpretation. Accordingly, the Court affirmed the superior courtâs decision to uphold the DNRâs order.

Chilkoot Lumber Company, a commercial landlord (Chilkoot) and its tenant, Rainbow Glacier Seafood (Rainbow) resolved their lease dispute by settlement and entered the terms of the settlement on the record at trial. Rainbow did not follow through with its duties under the settlement agreement. After the time for performance by Rainbow had expired, Chilkoot moved the court to enforce the agreement. The superior court denied the motion to enforce. On reconsideration, the parties tentatively agreed to reinstate the settlement agreement with new deadlines for performance. When they could not agree on new deadlines, the superior court entered an order that enforced the settlement agreement as modified by Rainbowâs proposed deadlines. Chilkoot subsequently violated the order, and the superior court ordered it to pay $1,000 per day it violated the agreement. Chilkoot appealed to the Supreme Court, arguing that the superior court erred by imposing its own deadlines and sanctioning Chilkoot $1,000 per day. Upon review of the record, the Supreme Court reversed the superior courtâs order. The Court held it was an error for the lower court to conclude that the parties had not reached a settlement agreement and to deny Chilkootâs motion to enforce the agreement. Furthermore, the Court found that the courtâs sanctions against Chilkoot were "coercive and remedial, rather than punitive." The Court reversed the superior courtâs order and remanded the case for further proceedings.