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Sprucewood Investment Corp. et al. v Alaska Housing Finance Corp. (10/19/2001) sp-5489
Sprucewood Investment Corp. et al. v Alaska Housing Finance Corp. (10/19/2001) sp-5489
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
SPRUCEWOOD INVESTMENT )
CORPORATION, and NORTHERN ) Supreme Court No. S-9371
CONSTRUCTION & EQUIPMENT )
COMPANY, ) Superior Court No.
) 4FA-98-1879 CI
Appellants, )
)
v. )
)
ALASKA HOUSING FINANCE ) O P I N I O N
CORPORATION, )
)
Appellee. ) [No. 5489 - October 19, 2001]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Fourth Judicial District, Fairbanks,
Richard D. Savell, Judge.
Appearances: Michael R. Wirschem, Law Office
of Paul D. Stockler, Anchorage, for Appellant Sprucewood Investment
Corporation. Frederic E. Brown, Fairbanks, for Appellant Northern
Construction & Equipment Company. Steven D. DeVries, Assistant
Attorney General, Anchorage, Bruce M. Botelho, Attorney General,
Juneau, for Appellee.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
MATTHEWS, Justice.
I. INTRODUCTION
The main question presented in this case is how to
interpret a "demolition"contract. In isolation, the contract
might be interpreted to permit the removal and sale of buildings,
but at the time the contract was made, both parties actually
believed that it required the buildings' destruction. Because a
contract is interpreted in accordance with the parties' intent at
the time of contracting, we conclude that the demolition contract
required the buildings' actual destruction.
II. FACTS AND PROCEEDINGS
In early 1997 Alaska Housing Finance Corporation ("AHFC")
created a development plan for the revitalization of Spruce Park,
a low-income housing facility in Fairbanks owned and operated by
AHFC. The plan called for selling seven buildings, demolishing
fifteen others, and constructing new housing on the cleared land.
AHFC chose to demolish some of the buildings rather than
rehabilitate them because refurbishing the buildings to AHFC's
health and safety standards was not deemed to be cost-effective.
In February 1998 AHFC issued an "Invitation to Bid"on
the Spruce Park project. The Invitation to Bid was entitled "Bid
Packet to Demolish a Portion of the Spruce Park Project." The bid
packet's "General Description"of the work stated that: "[The
buildings] will have asbestos floor tile and mastic removed and the
buildings and foundations will be completely razed. All debris
will be removed from the site . . . ." The packet's General
Description referenced two subsequent sections in the packet, one
of which -- section 02055 -- was to apply if the contractor
demolished the building with the asbestos-containing materials left
in place. [Fn. 1] Section 02055 described the "Scope of the Work"
as "the removal and satisfactory disposal of all buildings,"and
the section's General Description again repeated that "the
buildings and foundations will be completely razed."
Section 02055 also included a salvage provision, which
stated that "[r]emoved items will become the property of the
Contractor." After one of the prospective contractors asked if
AHFC would permit the buildings to be cut into large pieces and
removed to a different location for salvage, AHFC attached an
addendum to the bid packet that stated that "The disposal of the
building materials is at the contractor's discretion."
As provided for in the Invitation to Bid, AHFC held a
prebid conference on February 17, 1998, to address questions from
prospective bidders about the contract's requirements. AHFC
employee Steven Pannone advised the bidders that:
All those buildings back behind us get[]
razed, get[] razed. We're looking for the buildings to be
completely demolished, utilities capped at the surface. Any
overhead power lines pulled back to the pole. There is asbestos
containing material in the buildings. The -- we made an
arrangement with the landfill people that if -- you can either take
the material out separately or take the whole building down and
take the asbestos material over with the building material.
Northern Construction and Equipment's president, Gerald Timmons,
participated in the conference. After Pannone described the nature
of the project and another contractor asked if the utility poles
were to be left standing, Timmons asked Pannone whether the
utilities were to be capped at the surface or back at the main.
Northern Construction put in a bid of $148,400 on the
project, which was the lowest bid. Prior to issuing the "Notice of
Intent to Award"the contract to Northern Construction, AHFC's
Procurement Officer, Gloria Dunmore, contacted Timmons to discuss
the contract's requirements. Dunmore advised Timmons that if
Northern Construction did not intend to demolish the buildings, it
would not be awarded the contract. According to Dunmore and AHFC
Construction Coordinator Dave Gonzales, Timmons agreed to demolish
the buildings. Before Northern Construction was awarded the
contract on March 31, 1998, Gonzales and AHFC Engineer Steven
Pannone talked with Timmons over the phone. Timmons asked if the
contract would permit Northern Construction to remove the buildings
intact from the site and sell them. Timmons was told that Northern
Construction was required to "completely demolish"the buildings,
and could not sell them.
Timmons has admitted that at the time he bid on the
contract, it was not his intention that the buildings be left
standing at any location following his salvage operations.
Instead, he intended to "crush"the parts of the buildings that
were not cost-effective to remove, and take them to the dump.
Ultimately, however, Timmons decided to remove the buildings and
sell them rather than destroy them. One question in this case is
when Timmons changed his mind.
Northern Construction's own brief suggests that Timmons
did not decide to remove and sell the buildings until after
Northern Construction had been awarded the contract:
After Northern was awarded the contract,
[Timmons] learned that one of the other bidders had planned, if
successful, to move the buildings off the site and salvage them.
After considering this for a time Timmons made an agreement with
Sprucewood that Northern would sell them the buildings after they'd
been salvaged. Both he and Hugh Ashlock of Sprucewood were relying
on the salvage provisions in the contract.
In his deposition testimony, moreover, Timmons testified that he
did not consider removing the buildings intact until after he
learned that some of the other contractors had planned to do so.
Because Timmons did not learn that any of the other bidders had
planned to move the buildings off site instead of destroying them
until after Northern Construction had been awarded the contract,
Timmons could not have formed his intention to remove the buildings
intact and sell them until after the contract was awarded.
Northern Construction was awarded the contract on March
31, 1998, and was issued a "Notice to Proceed"on April 1, 1998.
The contract required "substantial completion"of the entire
project 120 calendar days following the date of the notice to
proceed. On April 24, 1998, Northern Construction sent AHFC a
letter requesting permission to move the buildings off site for
demolition. On April 30, 1998, Northern Construction sent a second
letter, asking for AHFC's "non-objection"to sell the buildings
intact after moving them off site. AHFC replied on May 4, 1998,
noting that "Every building specified for demolition in the
contract must be completely demolished within the allotted contract
time,"and referencing section's 02055's requirement that "the
buildings and foundations be completely razed."
On May 18, however, Northern Construction began
negotiating the sale of the buildings to Sprucewood Investment
Corporation. During the negotiations, Northern Construction
informed Sprucewood that AHFC was contesting its right to salvage
the buildings, although Northern Construction downplayed the
seriousness of AHFC's concerns. On June 20, 1998, Northern
Construction sold the buildings to Sprucewood for $150,000 plus
costs.
In subsequent letters to AHFC, Northern Construction
asserted that "[d]ealing with the buildings off-site is a secondary
priority,"and that "[t]he secondary issue of off-site salvage
should not be cause for stopping work." Not knowing that the
buildings had already been sold, AHFC repeatedly requested
confirmation that Northern Construction was planning to demolish
the buildings. On July 10 Timmons sent a letter to AHFC stating
that Northern Construction did not plan to "'raze each building' in
a destructive manner,"and that instead the buildings would be
available for "total salvage." AHFC expressed concern over
Northern Construction's intent not to "'raze each building' in a
destructive manner"and requested clarification of Northern
Construction's plans.
On July 27 AHFC asked Northern Construction to provide
"unequivocal confirmation,"by the next day, that the buildings
would be completely demolished as required by the contract.
Northern Construction asked for ten days to respond. On July 29,
however, AHFC learned that the buildings had already been sold to
Sprucewood. AHFC then sought and, on August 20, 1998, received a
temporary restraining order barring Northern Construction and
Sprucewood from doing anything with or to the buildings except as
necessary to comply with Northern Construction's contractual
obligations to raze the buildings.
Subsequently, Superior Court Judge Richard D. Savell
granted summary judgment on AHFC's breach of contract claims
against Northern Construction. At the same time, Judge Savell
granted summary judgment dismissing Sprucewood's counterclaims
against AHFC for negligence and economic waste, and dismissing
Northern Construction's counterclaims against AHFC for negligence,
breach of contract, and breach of the implied covenant of good
faith and fair dealing.
Judge Savell also issued an order granting AHFC's motion
for access to property, allowing AHFC to demolish the buildings at
their current location or remove them for disposal as AHFC saw fit.
Sprucewood requested a stay of proceedings, which Judge Savell
granted contingent upon Sprucewood's securing and filing proof of
$10,000,000 all risk liability insurance. Sprucewood apparently
never obtained this insurance, and so the stay was dissolved on
November 8, 1999, and AHFC took possession of the buildings.
Rather than demolish the buildings, AHFC agreed to sell
them to Jalasco Investments, following a competitive bidding
process, for $210,125. Judge Savell denied Sprucewood's Civil Rule
60(b) motion for relief from final judgment. Judge Savell
concluded that because Northern Construction had breached its
contract, Sprucewood had acquired no interest in the buildings, and
AHFC's right to insist that its buildings be demolished in
accordance with the contract did not prohibit it from choosing not
to demolish them once the contract had been breached.
Sprucewood and Northern Construction appeal the court's
issuance of the temporary restraining order, the court's grant of
summary judgment in favor of AHFC on its breach of contract claim,
the court's grant of summary judgment against Northern Construction
on its breach of contract counterclaim, and the court's grant of
summary judgment against Sprucewood and Northern Construction on
their negligence and economic waste counterclaims. Because
Northern Construction has essentially adopted Sprucewood's
presentation of the case, and because the identity of the parties
does not affect our conclusions, the appellants will be referred to
collectively as "Sprucewood."
III. STANDARD OF REVIEW
This court applies an abuse of discretion standard in
reviewing an order granting a temporary restraining order, [Fn. 2]
and in reviewing an order denying a motion for relief from judgment
under Civil Rule 60(b). [Fn. 3]
This court reviews the superior court's grant of summary
judgment de novo, determining whether any issues of material fact
exist and whether the moving party is entitled to judgment as a
matter of law. [Fn. 4] On a breach of contract claim, "[s]ummary
judgment is inappropriate where the evidence before the trial court
establishes that a genuine factual dispute exists as to the
parties' intent."[Fn. 5] Where there is no conflicting extrinsic
evidence as to the parties' intent, however, "questions of
interpretation of the meaning of written documents are treated as
questions of law for the court."[Fn. 6]
IV. DISCUSSION
A. Is Sprucewood's Appeal of the TRO Moot?
As a preliminary matter, Sprucewood appeals the superior
court's grant of a temporary restraining order, essentially arguing
that Judge Savell erred in granting the TRO because he improperly
interpreted the contract. But AHFC argues that its sale of the
buildings to Jalasco Investments has rendered Sprucewood's appeal
of the TRO moot, as Sprucewood would not be able to do anything
with or to buildings Sprucewood does not own even if this court
reversed the grant of the TRO. In reply, Sprucewood argues that
the sale of the buildings to Jalasco Investments has not rendered
all of the legal issues in the case moot, as "the legal issue of
whether AHFC owed NCE and Sprucewood money for damages . . . is far
from moot."
This court will "refrain from deciding questions 'where
the facts have rendered the legal issues moot.'"[Fn. 7] "A case
is moot if the party bringing the action would not be entitled to
any relief even if they prevail."[Fn. 8] We have noted that
"Alaska Civil Rule 65(b) states that a TRO expires by its own terms
within 10 days unless the restrained party agrees to an extension
and the reasons for extension are entered of record."[Fn. 9]
Judge Savell entered a temporary restraining order pending "a trial
on the merits or determination of a preliminary injunction." The
TRO has long since expired and does not constrain Sprucewood's
freedom of action. Because Sprucewood does not need, and thus
could not receive, relief from the TRO, its appeal of the TRO is
moot.
Our conclusion would be no different if the superior
court had entered a preliminary injunction instead of a TRO. We
have previously held that a dispute is technically moot where a
party has "submitted to an order by the superior court, the effects
of which cannot be undone."[Fn. 10] Sprucewood does not deny that
it complied with the terms of the court's restraining order, or
that it no longer has possession of the buildings. A reversal of
the restraining order would not enable Sprucewood to do anything to
the Spruce Park buildings, as they are now owned by Jalasco
Investments. As the effects of the superior court's order cannot
be undone, Sprucewood's appeal of the order is moot. [Fn. 11]
Although Sprucewood concedes that it complied with the
terms of the TRO, it insists that the TRO ruling cannot be moot
because Sprucewood still possesses viable damages claims against
AHFC. But Sprucewood confuses the survival of its case with the
survival of an issue in its case. Compliance with a preliminary
injunction does not moot a party's damages claims, only an appeal
from the injunction. [Fn. 12] Sprucewood's damages claims can be
adequately addressed in Sprucewood's appeal from the superior
court's grant of summary judgment, so the existence of those claims
does not save Sprucewood's appeal of the TRO from mootness.
B. Did the Superior Court Err in Granting Summary Judgment
on AHFC's Breach of Contract Claims Against Northern Construction?
1. Did the superior court err in concluding that the
contract called for the demolition, rather than removal and sale,
of the Spruce Park buildings?
Sprucewood's main argument is that Judge Savell erred in
granting summary judgment on AHFC's breach of contract claims,
because Sprucewood presented extrinsic evidence -- of other
bidders' intentions to remove and sell the buildings, of trade
practice consistent with the removal and sale of buildings
scheduled to be "demolished,"and of AHFC's employees' concessions
that the contract did not specify how the buildings were to be
demolished -- which raised a material issue of fact as to Northern
Construction's "reasonable expectations"in entering into the
demolition contract. In reply AHFC argues that Sprucewood's
extrinsic evidence does not create a material issue of fact, as the
undisputed evidence is that, at the time of contracting, both AHFC
and Northern Construction understood the contract to require the
complete destruction of the Spruce Park buildings.
"In interpreting the provisions of a contract, it is the
duty of the courts to ascertain and give effect to the intentions
of the parties."[Fn. 13] To determine the intentions of the
parties, we look not only to the written contract, but also to
extrinsic evidence regarding the parties' intent at the time the
contract was made. [Fn. 14] Because the parties' testimony as to
their subjective intentions or understandings will normally
accomplish no more than a restatement of their conflicting
positions, [Fn. 15] this court will generally look instead to
"express manifestations of each party's understanding of the
contract in attempting to give effect to the intent behind the
agreement."[Fn. 16]
As a matter of law, "[w]hen, at the time of formation,
the parties attach the same meaning to a contract term and each
party is aware of the other's intended meaning, or has reason to be
so aware, the contract is enforceable in accordance with that
meaning."[Fn. 17] Because it is the intent of the parties that
governs the court's interpretation of a contract, a party will thus
be "bound not by the outer limits of an ambiguous document, but by
the terms agreed upon by the parties."[Fn. 18] The key question
in this case, then, is what meaning the parties attached to the
terms of the demolition contract at the time the contract was made.
Sprucewood does not seriously dispute AHFC's claim that
AHFC believed the contract required the Spruce Park buildings to be
completely destroyed. After examining the evidence presented by
Sprucewood, the most that can be said is that while all of the AHFC
employees testified that the contract required the buildings to be
broken into pieces, each also acknowledged that the contract did
not require those pieces to be broken into small pieces. [Fn. 19]
The testimony of the AHFC employees might be relevant to the
question of whether the contract, considered in isolation from the
extrinsic evidence, was subject to reasonable alternative
interpretations. But it does not challenge AHFC's claim that, when
the contract was formed, AHFC believed that it required destruction
of the buildings rather than their removal and sale.
More importantly, there is also no serious dispute over
whether Northern Construction believed, when the contract was
formed, that the contract allowed the buildings to be removed and
sold instead of destroyed. In its brief to this court, Northern
Construction essentially admits that its president, Timmons, did
not form an intention to remove and sell the buildings until after
the contract was formed. [Fn. 20]
Given AHFC's specific representations to Northern
Construction prior to the contract's formation, it is not hard to
understand why Northern Construction initially believed the
contract required the buildings' destruction. AHFC Procurement
Officer Gloria Dunmore affied that she informed Northern
Construction that it would not be awarded the contract if it did
not intend to demolish the buildings, and also affied that Timmons
agreed to demolish them. Similarly, Construction Coordinator Dave
Gonzales affied that before Northern Construction was awarded the
contract, Timmons asked if the contract allowed Northern
Construction to remove the buildings from the site and sell them,
but was told that Northern Construction was required to completely
demolish the buildings and could not sell them. In its briefs,
Northern Construction does not contest the accuracy of these
assertions.
Because AHFC and Northern Construction attached the same
meaning to the contract's terms, and knew or had reason to know
(through the discussion between AHFC's representatives and Timmons)
of the other's intended meaning, the contract is enforceable in
accordance with that meaning. [Fn. 21]
Sprucewood argues that the contract could reasonably be
interpreted to permit removal and sale of the buildings, pointing
to the extrinsic evidence of other bidders' belief that the
contract permitted removal and sale, trade practice, and the
discretionary salvage provisions of the contract itself. But what
any other bidder could have understood the contract to mean is
irrelevant, as there is no dispute over the terms to which the
parties actually agreed. [Fn. 22] Because there is no dispute
that, when the contract was formed, both AHFC and Sprucewood
believed that it required complete demolition of the Spruce Park
buildings rather than their removal and sale, and there is no
question that Northern Construction removed and sold the buildings
rather than demolishing them, the superior court did not err in
granting summary judgment in favor of AHFC on its breach of
contract claim and against Northern Construction on its breach of
contract counterclaim. [Fn. 23]
2. Did Judge Savell err by failing to require
exhaustion?
Sprucewood also briefly argues that Judge Savell erred by
not requiring AHFC to exhaust the contract's dispute resolution
procedure, which required claims to be submitted to the contracting
officer, before seeking relief in court. In reply, AHFC argues
that requiring AHFC to exhaust the contractual dispute resolution
proceeding would have been futile because the buildings were under
the control of Sprucewood, over whom the contracting officer had no
power.
"[T]he failure to exhaust remedies may be excused due to
severe impracticality or futility."[Fn. 24] The attorney for
Northern Construction acknowledged at oral argument before the
superior court that any decision by the contracting officer could
not be enforced against Sprucewood, a non-party to the contract
which had control over the buildings. Moreover, the contracting
officer herself rejected Northern Construction's request that she
hear the case, holding that a determinable controversy no longer
existed because neither AHFC nor Northern Construction had present
control over the buildings. Because resort to the contractual
dispute resolution procedure would have been futile, AHFC was not
required to exhaust that contractual remedy before seeking relief
before the superior court.
3. Did Judge Savell err in his remedies ruling?
Finally, Sprucewood argues that Judge Savell abused his
discretion by rejecting Sprucewood's Rule 60(b) motion and
permitting AHFC to sell the Spruce Park buildings at a competitive
auction instead of requiring AHFC to demolish them as originally
planned. But Sprucewood offers no legal support for its argument,
asserting only that Judge Savell's ruling was "unjust." Absent
adequate argument, Sprucewood's claim is waived. [Fn. 25]
Sprucewood has separately argued, moreover, that AHFC's demolition
of the buildings would have been "wasteful"and a violation of
AHFC's statutory obligations to provide housing for Alaskans. But
if it would have been wasteful and a violation of AHFC's statutory
obligations for AHFC to demolish the buildings, then it cannot have
been an abuse of discretion to permit AHFC to sell them instead.
C. Did Judge Savell Err in Dismissing Sprucewood's
Negligence Counterclaims?
Sprucewood argues that Judge Savell erred in dismissing
its claims against AHFC for negligently drafting an ambiguous
contract. Interpreted in light of the extrinsic evidence of the
parties' intent at the time of contracting, however, the contract
was not ambiguous. [Fn. 26] If the contract was not ambiguous,
then AHFC cannot have drafted -- negligently or otherwise -- an
ambiguous contract. Sprucewood does not allege that AHFC breached
any duties to Sprucewood other than its alleged duty to prepare an
unambiguous contract. Accordingly, Judge Savell did not err in
granting summary judgment against Sprucewood on its negligence
claims.
D. Did Judge Savell Err in Granting Summary Judgment Against
Sprucewood on Its Economic Waste Counterclaim?
Finally, Sprucewood argues that AHFC should be liable for
"waste." Waste occurs when "the owner of a possessory estate
engages in unreasonable conduct that results in physical damage to
the [property] and substantial diminution in the value of estates
owned by others in the same [property]."[Fn. 27] Although AHFC
was seeking to demolish the buildings when Sprucewood initially
asserted waste in its counterclaim, AHFC ultimately did not
demolish the buildings and thus did not physically damage the
property. Because the property was never physically damaged,
Sprucewood's waste claim has been rendered moot.
Even if AHFC had demolished the buildings, moreover,
AHFC's actions would not have diminished the value of Sprucewood's
estate in the property. Given the resolution of AHFC's breach of
contract claims, Northern Construction had no right to sell the
buildings to Sprucewood, and thus Sprucewood had no estate in the
property. Because Sprucewood had no estate in the property, it was
not injured by AHFC's conduct, and so had no standing to bring an
action for waste. Judge Savell thus did not err in granting
summary judgment to AHFC on Sprucewood's "economic waste"
counterclaim.
V. CONCLUSION
Because the TRO had expired of its own terms Sprucewood's
appeal of the TRO is MOOT. Because the undisputed extrinsic
evidence reveals that the parties' intention at the time of
contracting was to completely demolish the Spruce Park buildings,
because the contract was not ambiguous, and because Sprucewood did
not have an interest in the Spruce Park buildings, we AFFIRM the
superior court's decision in all respects.
FOOTNOTES
Footnote 1:
Section 02085 contained detailed specifications governing the
removal of asbestos-containing materials "prior to building
demolition."
Footnote 2:
See State v. Kluti Kaah Native Village, 831 P.2d 1270, 1272
n.4 (Alaska 1992).
Footnote 3:
See DeVaney v. State, Dep't of Revenue, CSED ex rel. DeVaney,
928 P.2d 1198, 1199-1200 (Alaska 1996).
Footnote 4:
See Alaska Tae Woong Venture, Inc. v. Westward Seafoods, Inc.,
963 P.2d 1055, 1065 n.4 (Alaska 1998).
Footnote 5:
Neal & Co., Inc. v. Association of Village Council Presidents
Reg. Hous. Auth., 895 P.2d 497, 502 (Alaska 1995).
Footnote 6:
Alaska Diversified Contractors, Inc. v. Lower Kuskokwim Sch.
Dist., 778 P.2d 581, 584 (Alaska 1989).
Footnote 7:
Hayes v. Charney, 693 P.2d 831, 834 (Alaska 1985) (quoting Doe
v. State, 487 P.2d 47, 53 (Alaska 1971)).
Footnote 8:
Maynard v. State Farm Mut. Auto. Ins. Co., 902 P.2d 1328, 1329
n.2 (Alaska 1995).
Footnote 9:
Ostrow v. Higgins, 722 P.2d 936, 939 (Alaska 1986).
Footnote 10:
Municipality of Anchorage v. Anchorage Daily News, 794 P.2d
584, 588 (Alaska 1990).
Footnote 11:
See Honig v. Students of the California Sch. for the Blind,
471 U.S. 148, 149 (1985) (per curiam) (holding appeal moot where
tests that had been ordered under the preliminary injunction had
already been carried out); University of Texas v. Camenisch, 451
U.S. 390, 398 (1981) ("[T]he question whether a preliminary
injunction should have been issued here is moot, because the terms
of the injunction . . . have been fully and irrevocably carried
out.").
Footnote 12:
See, e.g., Harris v. Blue Cross Blue Shield of Missouri, 995
F.2d 877, 879-80 (8th Cir. 1993).
Footnote 13:
AMFAC Hotels v. State, Dep't of Transp. & Public Facilities,
659 P.2d 1189, 1194 (Alaska 1983), overruled on other grounds by
Atlantic Richfield Co. v. State, 723 P.2d 1249, 1252 (Alaska 1986).
Footnote 14:
See Municipality of Anchorage v. Gentile, 922 P.2d 248, 256
(Alaska 1996).
Footnote 15:
See Larsen v. Municipality of Anchorage, 993 P.2d 428, 433
(Alaska 1999).
Footnote 16:
Id. (quoting Peterson v. Wirum, 625 P.2d 866, 870 (Alaska
1981)).
Footnote 17:
5 Margaret N. Kniffin, Corbin on Contracts sec. 24.5, at 16
(rev.
ed. 1998); see also Restatement (Second) of Contracts sec. 201(1)
(1981) ("Where the parties have attached the same meaning to a
promise or agreement or a term thereof, it is interpreted in
accordance with that meaning.").
Footnote 18:
Kilmer v. Dillingham City Sch. Dist., 932 P.2d 757, 765
(Alaska 1997).
Footnote 19:
AHFC Construction Director Vicki Williams testified that the
contract required the contractor to disassemble the Spruce Park
buildings, although it was not required to "mash up the floors into
a million little pieces." AHFC employee John Felton also testified
that the contract required the contractor to disassemble the
buildings, although it was not required to "chop up the floor [or]
. . . the roof in certain size pieces." Similarly, Pannone
testified that the contractor was required to knock the buildings
into pieces, but was not required to "sit there and chop up the
roof [or] . . . floor -- the wood into really small pieces. . . ."
So, too, did Gonzales, who testified that the contractor was
required to break the building into pieces, but didn't have to
"mash [the pieces] up."
Footnote 20:
See supra p. 5.
Footnote 21:
See Kniffin, supra note 17, sec. 24.5 at 15. The same would
be
true even if, when the contract was formed, Northern Construction
had harbored a secret belief that the contract's terms allowed the
buildings to be moved and sold, given the fact that AHFC told
Northern Construction that AHFC understood the contract to require
complete demolition of the buildings and Northern Construction did
not challenge AHFC's understanding of the contract's terms. See
id. at 18 ("If the parties attach different meanings to a contract
term at the time of formation and one party is aware of the second
party's meaning or has reason to know of it, and provided that the
converse is not true, a contract is formed, and the term is
interpreted in accordance with the second party's meaning.").
Footnote 22:
See Kilmer, 932 P.2d at 765 ("[A party will be] bound not by
the outer limits of an ambiguous agreement, but by the terms agreed
upon by the parties."). Nor is the fact that AHFC drafted the
allegedly ambiguous contract relevant. This court has previously
held that the principle that ambiguities in contracts should be
construed against their drafters should not be resorted to when
other means of ascertaining the reasonable expectations of the
parties are available, as they were here. See Consolidated Pac.
Engineering, Inc. v. Greater Anchorage Area Borough ex rel. Greater
Anchorage Area Borough Sch. Dist., 563 P.2d 252, 256 (Alaska 1977).
Footnote 23:
Sprucewood briefly argues that the contract's demolition
provisions should be overridden in order to further the public
policy interest in providing "safe and sanitary"housing and
"rehabilitat[ing]"housing. But to rewrite the contract as
Sprucewood desires would deny AHFC the power to control the
disposition of its own property. Further, allowing Sprucewood to
unilaterally rewrite the contract by non-performance would give
Sprucewood an undeserved windfall, as it would not have to pay to
purchase the buildings from AHFC.
Footnote 24:
Kleven v. Lower Yukon-Koyukuk Sch. Dist., 853 P.2d 518, 524
(Alaska 1993).
Footnote 25:
See Gates v. City of Tenakee Springs, 822 P.2d 455, 460
(Alaska 1991) (treating claims addressed only in cursory manner as
waived).
Footnote 26:
See Part IV.B.1., supra.
Footnote 27:
See McKibben v. Mohawk Oil Co., Ltd., 667 P.2d 1223, 1228
(Alaska 1983), overruled on other grounds by Wien Air Alaska v.
Bubbel, 723 P.2d 627, 631 n.4 (Alaska 1986).
