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Leisnoi, Inc., v. Stratman (4/10/98), 956 P 2d 452
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
LEISNOI, INC., )
) Supreme Court No. S-8005
) Superior Court No.
v. ) 3AN-96-5493 CI
OMAR STRATMAN, ) O P I N I O N
Appellee. ) [No. 4965 - April 10, 1998]
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
John Reese, Judge.
Appearances: Edgar Paul Boyko and John Richard
Fitzgerald, Edgar Paul Boyko & Associates, Anchorage, for
Appellant. Jerald M. Reichlin, Fortier & Mikko, P.C., Anchorage,
Before: Matthews, Chief Justice, Compton,
Eastaugh, Fabe, and Bryner, Justices.
This case concerns another dispute between Omar Stratman
and Leisnoi, Inc., an Alaska Native Village Corporation, over
rights to land near Kalsin Bay. Stratman and Leisnoi negotiated
and agreed to the entry of a permanent injunction limiting
Stratman's right to come onto Leisnoi's land. Shortly after the
trial court entered the permanent injunction, Stratman began to
extract gravel from Leisnoi's land pursuant to a quitclaim deed.
Based on this conduct, Leisnoi moved for an order to show cause why
Stratman was not in contempt for violating the injunction.
Stratman argued in response that the injunction was only intended
to limit his rights under a grazing lease and in no way affected
his rights as the deeded owner of sand and gravel. The trial court
agreed with Stratman and denied Leisnoi's motion. Interpreting the
injunction as a contract negotiated by the parties, we are
persuaded by the uncontested extrinsic evidence that the parties
did not intend for the injunction to affect Stratman's rights under
the quitclaim deed. We therefore affirm the trial court's
II. FACTS AND PROCEEDINGS
The history of the contest between the two parties is
thoroughly outlined in Leisnoi, Inc. v. Stratman, 835 P.2d 1202,
1203-06 (Alaska 1992). For the purposes of this case, a limited
history will suffice. Stratman holds grazing leases over
approximately 20,000 acres of Leisnoi's lands. Leisnoi owns the
surface estate, but Stratman claims title to the sand and gravel
beneath the surface based on interests Koniag, Inc. conveyed to him
in a quitclaim deed.
In July 1996 Leisnoi filed a complaint asking for an
injunction to prohibit Stratman from entering upon its land "for
purposes of a guided horseback operation or horse rental operation
. . . ." Apparently, Stratman believed that his rights under the
grazing lease permitted him to conduct a horseback riding business
on the land included in the lease. Leisnoi and Stratman resolved
their dispute over the scope of the grazing lease without
protracted litigation. In exchange for Leisnoi waiving its claim
for attorney's fees and costs under Alaska Civil Rule 82, Stratman
consented to the entry of a permanent injunction. The injunction
was drafted by Leisnoi, but Stratman made modifications to its
language. The Final Judgment granting the injunction, entered on
August 7, 1996, was stipulated to by both parties and approved by
Superior Court Judge John Reese. In relevant part, the judgment
provided that Stratman was prohibited from
trespassing on or entering upon Leisnoi's land
for any purposes other than (i) tending to or rounding up
livestock, suppressing fires, or tending to fences pursuant to
whatever rights, if any, Omar Stratman has under the Kalsin Bay
Grazing Lease; or (ii) making lawful use of public BLM easements of
record. Specifically, and without limitation, Mr. Stratman is
enjoined from conducting or operating guided horseback tours or a
horse rental operation on Leisnoi's land (other than upon public
BLM easements of record), and from allowing his customers,
wranglers or employees to enter upon Leisnoi's land (other than
upon public BLM easements of record) while using horses rented
from, owned, operated, or controlled by Omar Stratman . . . except
for employees entering for grazing purposes.
One month after the entry of the permanent injunction,
Stratman began to extract subsurface gravel from Leisnoi's land.
Pursuant to Alaska Civil Rule 90(b), Leisnoi moved the trial court
for an order requiring Stratman to show cause why he was not in
contempt of the August 1996 permanent injunction. Stratman argued
in response that the 1996 injunction "was never intended to enjoin
Omar Stratman's activities as an owner of the subsurface estate
underlying Leisnoi's lands." Instead, Stratman contended, the 1996
injunction resolved only the question of whether his rights under
the grazing lease permitted him to run a commercial horseback
riding business on Leisnoi's land.
Judge Reese, who had initially issued the injunction,
denied Leisnoi's motion for an order to show cause. Agreeing with
Stratman's interpretation of the injunction, he ruled that the
August 1996 judgment resolved a trespass claim based on Stratman's
horseback riding enterprise, and that determining the extent of
Stratman's rights under the quitclaim deed would require separate
litigation. Judge Reese denied Leisnoi's motion for
reconsideration, and Leisnoi appeals.
Stratman argues that we should decline to exercise our
appellate jurisdiction in this case because the denial of an order
to show cause is not a final judgment. We disagree. Because the
motion for an order to show cause initiated a post-final judgment
proceeding, the denial of the motion disposed of the "entire case,"
thus satisfying the finality requirement. See City and Borough of
Juneau v. Thibodeau, 595 P.2d 626, 628 (Alaska 1979).
B. Interpreting the 1996 Injunction
Despite the assortment of issues raised by Leisnoi in its
brief, this case poses only one fundamental question: how should
the August 1996 injunction be interpreted? Because Stratman
consented to the entry of the 1996 injunction and negotiated with
Leisnoi about its language, the injunction is a settlement
agreement. This court interprets a settlement agreement like a
contract, "provided that it meets minimal contractual
requirements." Singh v. State Farm Mut. Auto. Ins. Co., 860 P.2d
1193, 1199 (Alaska 1993); see also Davis v. Dykman, 938 P.2d 1002,
1006 (Alaska 1997). In this case, Leisnoi's waiver of its claim to
Rule 82 attorney's fees and costs in exchange for Stratman's
consent to the entry of the injunction constitutes valuable
consideration and therefore justifies treating the agreement as a
contract. See Singh, 860 P.2d at 1199.
In determining a contract's meaning, we consider its
language as well as relevant extrinsic evidence, including the
subsequent conduct of the parties. See Municipality of Anchorage
v. Gentile, 922 P.2d 248, 256 (Alaska 1996). We may consult
extrinsic evidence without first finding that the contract's
language is ambiguous. Id. at 256 n.5. Where, as in this case,
there is no conflict in the extrinsic evidence, the interpretation
of the contract is a question of law. See Little Susitna Constr.
Co., Inc. v. Soil Processing, Inc., 944 P.2d 20, 23 (Alaska 1997).
The extrinsic evidence in this case unquestionably
establishes that the 1996 injunction was intended only to prohibit
Stratman from conducting a horseback riding business on Leisnoi's
land. In its complaint, Leisnoi sought to enjoin Stratman from
entering upon its land "for purposes of a guided horseback
operation or horse rental operation . . . ." Recognizing that
Stratman could legitimately come onto its land in some
circumstances, Leisnoi stated that "[e]xcluded from the scope of
the requested injunction are public easement trails marked by the
Bureau of Land Management, and uses of land for grazing purposes .
. . under the so-called Kalsin Bay Grazing Lease." The language of
the complaint demonstrates that Leisnoi was concerned with ending
Stratman's horseback riding business; nothing in the complaint
suggests that Leisnoi was also seeking adjudication of any rights
that Stratman may have under the quitclaim deed for sand and gravel
from Koniag, Inc.
Additionally, prior to filing the motion for an order to
show cause, Leisnoi filed a separate lawsuit, requesting an
injunction to prohibit Stratman from extracting gravel until a
series of conditions were met. This course of action is
inconsistent with Leisnoi's position that the 1996 injunction
already prohibited Stratman from coming onto its land to extract
gravel. If Leisnoi reasonably believed that the prior injunction
proscribed Stratman's actions, it is difficult to understand why it
initially filed a complaint for a new injunction specifically
forbidding gravel extraction. The chronology of Leisnoi's legal
actions suggests that its reliance on the 1996 injunction to stop
the gravel extraction was an afterthought.
Leisnoi has failed to point to any extrinsic evidence
supporting its interpretation of the agreement. Instead, Leisnoi
encourages us to rely solely on the language of the injunction. As
we stated above, however, extrinsic evidence is important in
understanding the parties' intentions. Leisnoi's inability to
provide extrinsic evidence to support its view of the injunction's
purpose undermines the viability of its suggested interpretation.
Given the lack of conflict in the extrinsic evidence, we
find that the language of the injunction is insufficiently clear to
tip the balance in favor of Leisnoi's interpretation. We note at
least one aspect of the injunction's language that detracts from
its clarity. Prior to the injunction's entry, Stratman claimed two
sources of interests in Leisnoi's land: the grazing lease and the
quitclaim deed to sand and gravel. Leisnoi argues that the 1996
injunction defined and limited Stratman's rights to Leisnoi's land
under both the lease and the quitclaim deed. However, although the
injunction specifically discusses Stratman's rights as a
leaseholder, stating that he can round up livestock, suppress fires
and tend fences on Leisnoi's land pursuant to the lease, the
injunction does not acknowledge the existence of the quitclaim
deed. The absence of a reference to the quitclaim deed, in
contrast to the presence of specific language in the injunction
discussing Stratman's rights under the lease, persuades us that the
parties intended the injunction to limit only Stratman's rights as
a leaseholder. [Fn. 2]
Consideration of the extrinsic evidence, coupled with the
language of the injunction, leads us to conclude that the 1996
injunction was intended to resolve only Stratman's rights under the
grazing lease and not his subsurface rights pursuant to the
quitclaim deed. Therefore, Stratman was not in contempt of the
injunction when he extracted gravel from Leisnoi's lands. The
trial court's denial of Leisnoi's motion for an order to show cause
Although the trial court did not explicitly follow the rules
of contract interpretation in analyzing the injunction, we conclude
that a remand is unnecessary because we are in as good a position
as the trial court to interpret the injunction's meaning as a
matter of law.
We note that the trial court reached the same substantive
conclusion as we do when it held that the injunction did not
prohibit Stratman from extracting gravel because "[t]he Final
Judgment of August 7, 1996 resolved the grazing and horseback
trespass claims raised in the complaint."