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Winther v. Samuelson (10/20/00) sp-5325
Winther v. Samuelson (10/20/00) sp-5325
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
JOHN R. WINTHER; and OMEGA-3, )
INC., as successor in ) Supreme Court No. S-9008
interest to DOUGLAS BART )
EATON; all individually and )
as partners in PROWLER ) Superior Court No.
PARTNERSHIP, ) 1JU-96-540 CI
)
Appellants, )
)
v. ) O P I N I O N
)
GAINHART SAMUELSON, )
)
Appellee. ) [No. 5325 - October 20, 2000]
______________________________)
Appeal from the Superior Court of the State of
Alaska, First Judicial District, Juneau,
Walter L. Carpeneti, Judge.
Appearances: David D. Clark, Law Office of
David D. Clark, Anchorage, for Appellants. Charles W. Cohen, Cohen
& Associates, Juneau, for Appellee.
Before: Matthews, Chief Justice, Eastaugh,
Fabe, and Bryner, Justices. [Carpeneti,
Justice, not participating.]
MATTHEWS, Chief Justice.
I. INTRODUCTION
This case involves a dispute over the proper ownership of
federally awarded individual fishing quota ("IFQ") shares. John
Winther, Omega-3, Inc., and Gainhart Samuelson filed separate
applications for IFQ shares based on their joint ownership of a
fishing vessel, the F/V PROWLER. After a full adjudication, the
federal agency determined that the parties had owned the vessel as
individual tenants-in-common and awarded each party one-third of
the F/V PROWLER's IFQ shares. Winther and Omega-3 brought suit in
state court, claiming that, under state law, the parties had owned
the boat as a partnership and that Samuelson had sold his future
fishing rights to them when he sold his partnership interest in
1989.
The superior court granted summary judgment to Samuelson,
ruling that Samuelson could not have sold his future fishing rights
as part of his partnership because the federal adjudication had
already determined that the rights never vested in the partnership.
The court further found that the statute of frauds would bar
enforcement of any alleged contract for future fishing rights when
those rights were not identified in the contract itself. Because
we agree that the federal adjudication and the statute of frauds
resolve all outstanding issues of material fact, we affirm.
II. FACTS AND PROCEDURAL HISTORY
A. The Purchase and Sale of F/V PROWLER
In 1985 John R. Winther, Douglas Bart Eaton, [Fn. 1] and
Gainhart "Bud" Samuelson purchased the F/V PROWLER, a freezer
vessel. They registered the title with the United States Coast
Guard, listing Samuelson, Eaton, and Winther as equal individual
owners. They also entered into a co-ownership agreement to
formalize the purchase. Under the agreement, they owned the F/V
PROWLER as tenants-in-common, each owning one-third interest in the
vessel. The agreement explicitly stated that the parties did not
own the vessel in partnership:
3. No Partnership Intended. In no
event shall the Vessel be considered to be owned or operated by a
partnership composed of the parties and each party acknowledges
that he is an independent contractor and not a partner or joint
venturer with respect to the Vessel or to the management or
operation thereof. . . .
Despite this provision, there is evidence that the parties believed
that they owned and operated the boat as part of a partnership
called the Prowler Partnership.
From 1985 through 1989, the F/V PROWLER made legal
landings of sablefish off the coast of Alaska. In 1989 Samuelson
sold his ownership interest in the F/V PROWLER pursuant to an
"Agreement for Sale of Ownership Interest." Winther and Eaton
agreed to buy Samuelson's one-third interest in the vessel and the
parties agreed to terminate the "joint venture partnership that
operates the F/V PROWLER."
In 1990 the parties entered into a release agreement
whereby they agreed that Samuelson would be paid in full by
February 1990 for any monies due and owing pursuant to the sale
agreement. The release also stated that
[t]his agreement to receive payment and
release of any and all claims is a final settlement between the
parties of any partnership claims known or unknown and this
settlement is a final settlement from which no claims of any manner
known or unknown now or in the future may be brought.
B. The Federal Individual Fishing Quota Program
In 1976 the federal government enacted the Magnuson
Fishery Conservation and Management Act for the purpose of
conserving and managing the fishery resources found off the coasts
of the United States. [Fn. 2]
In 1993, pursuant to this Act, the United States
Secretary of Commerce promulgated regulations to limit access to
sablefish and halibut fisheries in the Gulf of Alaska and the
Bering Sea. [Fn. 3] The regulations replaced the previously open
system of fishing with a quota share program administered by the
National Marine Fisheries Service ("NMFS"). [Fn. 4]
Under the new system, NMFS determines initial allocations
of quota shares to "qualified persons." [Fn. 5] These initial
quota shares are then used each year to determine the annual
individual fishing quota for each qualified person. [Fn. 6] To
qualify for an initial allocation of quota shares, an applicant
must have owned or leased a vessel that made legal landings of
halibut or sablefish during 1988, 1989, or 1990. [Fn. 7] An
applicant can be an individual, corporation, partnership,
association, or other entity. [Fn. 8] Former partners of now
dissolved partnerships are also eligible. [Fn. 9] Once the
applicant qualifies, the actual amount of quota shares awarded
depends on the highest landing the vessel achieved during 1984
through 1989. [Fn. 10]
The regulations specify the documents that NMFS should
consider in determining whether an applicant owned or leased a
qualifying vessel. [Fn. 11] Evidence of ownership is limited to
(1) a United States Coast Guard ("USCG") Abstract of Title, (2) a
certificate of registration that is determinative as to vessel
ownership, or (3) a bill of sale. [Fn. 12]
C. The Federal Adjudications
In 1994 Samuelson and Winther filed competing claims for
the IFQ shares associated with the F/V PROWLER. Both Samuelson and
Winther agreed that the Prowler Partnership owned the vessel during
the qualifying years. However, Samuelson claimed that the
partnership had dissolved in 1989 when he sold his co-ownership
interest, and that he was therefore entitled to one-third of the
F/V PROWLER shares based on his status as a former partner of a now
dissolved partnership. Winther claimed, in contrast, that the
Prowler Partnership still existed and that Samuelson had sold his
future fishing rights when he sold his partnership interest.
Winther argued that Winther and Omega-3, as the remaining partners
of the Prowler Partnership, were entitled to one hundred percent of
the F/V PROWLER IFQ shares.
The competing claims were resolved by a NMFS Initial
Administrative Determination which determined that the parties had
owned the vessel as individuals and that Samuelson was therefore
entitled to one-third of the IFQ shares. NMFS rejected both
parties' contention that the partnership had owned the vessel,
stating that "[i]f anything on this record is clear, it is that no
entity called the 'Prowler Partnership' ever held any ownership
interest whatsoever, in the vessel known as the F/V PROWLER." NMFS
noted that both the USCG title and the parties' own co-ownership
agreement established that the parties owned the vessel as
individuals, not in partnership.
The Prowler Partnership appealed. On appeal, NMFS,
Office of Administrative Appeals, issued a new decision, affirming
the Initial Administrative Determination. The decision on appeal
reiterated that the best evidence of ownership was the USCG title.
Because the title listed the owners as individuals, the shares
belonged to the owners as individuals, not as partners in the
partnership. NMFS declined to decide "whether the release creates
any contractual rights that [the partnership] can seek to enforce
in another forum."
The Prowler Partnership moved for reconsideration,
raising for the first time the argument that the Prowler
Partnership had leased the F/V PROWLER. NMFS found this argument
untimely and reaffirmed the original decision. On March 14, 1996,
the NMFS Decision on Reconsideration was affirmed by the regional
director and became the final agency action.
The Prowler Partnership appealed the agency action to the
United States District Court for the District of Alaska. [Fn. 13]
The federal court held that the agency's finding of individual
ownership was within its discretion. [Fn. 14] However, the court
remanded the case back to the agency for consideration of the
lessee argument. [Fn. 15]
D. State Court Proceedings
Shortly after the NMFS decision became the final agency
action, Winther, Omega-3, and the Prowler Partnership (hereinafter
"Winther") filed suit against Samuelson in state court. The
complaint alleged that the Prowler Partnership had owned the F/V
PROWLER and that Samuelson had sold his future fishing rights when
he sold his partnership interest. It requested either the transfer
of Samuelson's IFQ shares to the partnership or an award of damages
commensurate with their value. [Fn. 16]
Samuelson moved for summary judgment, claiming that the
NMFS action had resolved all these issues. The superior court
agreed, concluding that,
[i]n this case, NMFS allocated IFQ shares to
Samuelson based on his individual ownership in the Prowler, not on
a partnership interest. This allocation has been upheld by a
federal court. Therefore, pursuant to federal law, no fishing
rights ever vested in the Prowler Partnership. Consequently, even
if this court determines that the Prowler Partnership owned the F/V
Prowler and that Samuelson sold his partnership interest, it cannot
find that Samuelson's partnership interest included future fishing
rights -- the vesting of such rights is solely within the
jurisdiction of the federal government. (Footnotes omitted;
emphasis in original.)
The court further noted that, insofar as a private agreement may
have existed whereby Samuelson agreed to transfer his future
fishing rights to the partnership, such an agreement would be
unenforceable because of the statute of frauds.
Winther now appeals to this court.
III. STANDARD OF REVIEW
We review a grant of summary judgment de novo, affirming
the superior court's decision if there are no genuine issues of
material fact and the moving party is entitled to judgment as a
matter of law. [Fn. 17] In reviewing the motion for summary
judgment, we draw all reasonable inferences of fact in favor of the
nonmoving party. [Fn. 18]
IV. DISCUSSION
A. Samuelson Did Not Sell His Future Fishing Rights as Part
of His Partnership Interest Because the Fishing Rights Never Vested
in the Partnership.
Winther's claim to Samuelson's shares rests primarily on
his theory that Samuelson sold his future fishing rights as part of
his partnership interest in 1989. But Winther fails to acknowledge
that he has already litigated -- and lost -- this issue. For
Samuelson to sell his future fishing rights as part of his
partnership interest, the fishing rights must have been part of his
partnership interest. Yet NMFS awarded Samuelson his IFQ shares
based on his individual ownership of the vessel, not based on his
partnership interest. Therefore, pursuant to federal law, no
fishing rights were owned by the partnership. Samuelson could not
have sold his future fishing rights as part of his partnership
interest because those rights belong to him as an individual, not
as partner in the Prowler Partnership. [Fn. 19]
Winther attempts to obscure the repetitive nature of this
litigation by claiming that the federal adjudication never
determined whether the Prowler Partnership owned the F/V PROWLER
under state partnership law. This is true but wholly irrelevant.
Regardless of whether the Prowler Partnership owned the vessel
pursuant to state partnership law, the fact remains that, for
purposes of IFQ allocation, the federal government has already
determined that the parties owned the vessel as individuals. Thus,
the fact that the Prowler Partnership may, in one sense, have
"owned" the vessel pursuant to state law does not change the fact
that pursuant to federal law the IFQ shares belong to the
individual owners.
Winther argues that the prior federal adjudication should
not prevent him from claiming that the partnership is the true
owner of the IFQ shares. He points out that if he had litigated
the issue of ownership in state court prior to the federal
litigation, he might have been able to change the USCG title to
reflect the partnership's ownership, hence altering the outcome of
the federal adjudication. But this argument is not only
speculative, it is irrelevant. Regardless of what action Winther
could have taken prior to the federal litigation, the fact remains
that NMFS has issued its decision and the ownership of the vessel
for purposes of IFQ allocation has already been determined.
Winther attempts to analogize this case to our prior
cases that involved allocation of IFQ shares in the context of
divorce. [Fn. 20] In these cases we held that IFQ shares should be
considered marital property to the extent that the IFQ entitlement
was earned during the marriage. [Fn. 21] Winther argues that,
similarly, in the present case the IFQ shares should be considered
partnership property because they were earned through the
expenditure of partnership assets and effort. But Winther's
analogy between partnership law and divorce law is inexact. The
designation of particular property as "marital" says nothing about
who owns the property. Rather, "marital property" may be "joint or
separate." [Fn. 22] The term merely describes whether property
must be taken into account in a divorce property division. By
contrast, partnership property is a type of ownership. [Fn. 23]
Thus while there is no conflict between NMFS awarding IFQ shares to
an individual and a state court designating them marital property
for divorce property division purposes, there is a conflict between
NMFS awarding IFQ shares to an individual on the basis of his
individual ownership and a state court determining that the IFQ
shares actually belonged to a partnership.
Winther's claim to Samuelson's IFQ shares as part of the
partnership interest that Samuelson sold in 1989 fails as a matter
of law for one simple reason: The federal adjudication has already
determined that Samuelson's IFQ shares belong to Samuelson as an
individual, not as a partner in the Prowler Partnership. Whatever
else Samuelson may have sold as part of his partnership interest in
1989, he cannot have sold his IFQ shares because those shares never
accrued to the partnership interest in the first place.
B. The Statute of Frauds Bars Any Possible Contract Between
Samuelson, Winther, and Eaton for Samuelson's Individual IFQ
Shares.
Although Samuelson could not have sold his IFQ shares as
part of his partnership interest, it is still possible that he
agreed to sell his individual shares as part of a separate
transaction with the remaining partners of the Prowler Partnership.
Significantly, Winther did not argue to the superior court below
that the parties had entered into such an agreement.
However, on appeal, Winther implies that the parties
actually entered into such an agreement and that Samuelson fully
understood that he was selling his future fishing rights in
addition to his partnership assets and ownership interest. But, as
the superior court recognized, even if the parties had entered into
such an agreement, the statute of frauds bars any enforcement of
that contract.
Alaska Statute 45.01.206 provides, in relevant part,
a contract for the sale of personal property
is not enforceable by action or defense beyond $5,000 in amount or
value of remedy unless there is a writing which indicates that a
contract for sale has been made between the parties at a defined or
stated price, reasonably identifies the subject matter, and is
signed by the party against whom enforcement is sought or by an
authorized agent.
The IFQ shares are worth over $5,000. Therefore, the contract must
"reasonably identify," in writing, the future fishing rights in
order to be enforceable. But the only subject matter identified in
the sale agreement is Samuelson's "one-third (33.33%) co-ownership
interest in the F/V PROWLER." The agreement says nothing about
"future fishing rights."
Winther argues that the statute of frauds is nevertheless
inapplicable to his case because he has fully performed his part of
the contract. Alaska recognizes an exception to the statute of
frauds if "there has been full performance on one side accepted by
the other in accordance with the contract." [Fn. 24] But Winther's
alleged "full performance" -- payment of the full sale price of the
vessel -- does not qualify under this exception because its meaning
is unclear. There is nothing about Winther's delivery of the full
sale price that suggests that the sale price was intended to pay
for both the vessel and Samuelson's future fishing rights. Indeed,
the sale agreement mentions only the "value of F/V PROWLER."
Therefore, Winther's delivery of the sale price contributes nothing
to a further understanding of the parties' contract and is not
sufficient to remove the contract from the statute of frauds.
Winther alternatively argues that there is sufficient
writing in the contract to satisfy the statute of frauds and
"extrinsic evidence" should be used to "flesh out" the subject
matter of the sale. In Fleckenstein v. Faccio, [Fn. 25] we
recognized the possibility that extrinsic evidence could be used to
flesh out a defective description of land. [Fn. 26] In
Fleckenstein the sellers contended that only five acres had been
sold, while the buyer contended that eleven acres had been sold.
[Fn. 27] There was a memorandum of agreement which was consistent
with the buyer's contention and inconsistent with the sellers'.
[Fn. 28] Given these limited choices we held that the writing was
sufficient to satisfy the statute of frauds. [Fn. 29] But we
cautioned that "[t]here must, of course, be some descriptive
identification of the particular tract of land for the contract to
be enforceable." [Fn. 30] This case does not resemble
Fleckenstein. Here the writings do not contain any reference to
future fishing rights nor do they refute in any way Samuelson's
position that no fishing rights were sold. The "fleshing out" of
the contract for future fishing rights that Winther claims exists
goes well beyond what the law allows.
V. CONCLUSION
Winther asserts two possible theories to support his
claim to Samuelson's IFQ shares: (1) that Samuelson indirectly sold
his future fishing rights as part of his partnership interest; or
(2) that Samuelson knowingly sold his individual interest in his
future fishing rights at the same time as he sold his co-ownership
and partnership interests. The first claim fails as a matter of
law because the federal adjudication has already determined that no
fishing rights accrued to the partnership and therefore could not
be sold as part of the partnership assets. The second claim also
fails as a matter of law because the statute of frauds bars
enforcement of any alleged contract for Samuelson's future fishing
rights.
Therefore, because Samuelson is entitled to judgment as
a matter of law on his motion for summary judgment, we AFFIRM the
superior court's order granting the motion.
FOOTNOTES
Footnote 1:
In 1986 Eaton transferred his 1/3 interest in the F/V PROWLER
to Omega-3, Inc., a closely held corporation that he and his wife
owned.
Footnote 2:
16 U.S.C. sec.sec. 1801-1883 (1994 & Supp. IV 1998).
Footnote 3:
See 50 C.F.R. sec.sec. 679.1-679.50 (1999).
Footnote 4:
See Ferguson v. Ferguson, 928 P.2d 597, 598 (Alaska 1996)
(describing the IFQ program).
Footnote 5:
50 C.F.R. sec. 679.40(a).
Footnote 6:
See id. sec. 679.40(c).
Footnote 7:
See id. sec. 679.40(a).
Footnote 8:
See id. sec.sec. 679.2, 679.40(a)(2)(i).
Footnote 9:
See id. sec. 679.40(a)(2)(iii) ("A former partner of a
dissolved
partnership or a former shareholder of a dissolved corporation who
would otherwise qualify as a person may apply for [quota share] in
proportion to his or her interest in the dissolved partnership or
corporation.").
Footnote 10:
See id. sec. 679.40(a)(4).
Footnote 11:
See id. sec. 679.40(a)(3)(ii)-(iii).
Footnote 12:
See id. sec. 679.40(a)(3)(ii).
Footnote 13:
See Prowler Partnership v. National Marine Fisheries Serv.,
Case No. A96-126 CV, Slip Op. at 9 (D. Alaska Dec. 9, 1997).
Samuelson is not a party to the federal district court action.
Winther and NMFS stipulated that if the Prowler Partnership is
awarded one hundred percent of the IFQ shares for the F/V PROWLER,
Samuelson will retain the shares already awarded to him.
Footnote 14:
See id. at 9.
Footnote 15:
See id.
Footnote 16:
Winther has abandoned the claim for specific performance on
appeal.
Footnote 17:
See Ganz v. Alaska Airlines, Inc., 963 P.d 1015, 1017 (Alaska
1998).
Footnote 18:
See Brady v. State, 965 P.2d 1, 8 (Alaska 1998).
Footnote 19:
Cf. State, Child Support Enforcement Div. v. Bromley, 987 P.2d
183, 192 (Alaska 1999) ("The . . . doctrine of collateral estoppel
(issue preclusion) prevents relitigation of an issue already
litigated and decided . . . .").
Footnote 20:
See, e.g., McGee v. McGee, 974 P.2d 983 (Alaska 1999); Johns
v. Johns, 945 P.2d 1222 (Alaska 1997).
Footnote 21:
See McGee, 974 P.2d at 988; Johns, 945 P.2d at 1226.
Footnote 22:
AS 25.24.160(a)(4).
Footnote 23:
See AS 32.05.030(a).
Footnote 24:
AS 09.25.020(1).
Footnote 25:
619 P.2d 1016 (Alaska 1980).
Footnote 26:
See id. at 1017.
Footnote 27:
See id. at 1019.
Footnote 28:
See id. at 1020-21.
Footnote 29:
See id. at 1021.
Footnote 30:
Id. at 1020.
