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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Estate of Patroky Polushkin v. Maw (10/26/2007) sp-6176
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,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
| ESTATE OF PATROKY POLUSHKIN | ) |
| by DAVID POLUSHKIN, Personal | ) Supreme Court No. S- 11775 |
| Representative of the Estate, | ) |
| ) Superior Court No. | |
| Appellant, | ) 3HO-03-60 CI |
| ) | |
| v. | ) |
| ) O P I N I O N | |
| ROLAND MAW, | ) |
| ) | |
| Appellee. | ) No. 6176 October 26, 2007 |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Third Judicial District, Homer,
Harold M. Brown, Judge.
Appearances: Michael Hough, Homer, for
Appellant. Peter R. Ehrhardt, Kenai, for
Appellee.
Before: Bryner, Chief Justice, Matthews,
Eastaugh, Fabe, and Carpeneti, Justices.
MATTHEWS, Justice.
I. INTRODUCTION
In October 1989 Patroky Polushkin purchased an Upper
Cook Inlet salmon drift fishery permit from Roland Maw. An
addendum to the purchase agreement provided that Maw would retain
all rights to claims or benefits resulting from the March 1989
Exxon Valdez oil spill that were associated with the permit. The
question presented in this case is whether Maw is entitled to
damages resulting from the oil spill that Polushkin suffered
after the transfer of the permit. We answer in the negative
because the language of the addendum is ambiguous, extrinsic
circumstances suggest that the clause was intended to ensure that
Maws right to damages was not transferred with the permit, and
reading the addendum to be an assignment of Polushkins future
claims to Maw would lead to unreasonable results. Because there
is no relevant conflicting extrinsic evidence, we conclude that
summary judgment should be entered in favor of Polushkins estate.
II. FACTS AND PROCEEDINGS
A. Facts
In the fall of 1989 commercial fisherman Roland Maw
listed his Upper Cook Inlet salmon drift fishery permit for sale.
Patroky Polushkin offered to buy it. With the help of their
brokers (Bruce Martinson1 of the Seattle brokerage firm GSI for
Maw and Roseleen Moore of the Homer firm Northern Enterprises
Boat and Permit Brokerage for Polushkin), the parties agreed on
Maws asking price of $186,000 and executed an earnest money
agreement in October 1989. Maw testified that there had been no
haggling over the sales price. According to Moore, the price was
a bit high but was within about $10,000 of the going market price
for Upper Cook Inlet salmon drift net permits at that time.
At the same time that they signed the earnest money
agreement, Maw and Polushkin, as well as their brokers, signed an
addendum to the agreement. The text of the addendum follows:
By their signatures below, the buyer and
seller agree to modify their agreement
regarding the sale of Alaska Cook Inlet
Salmon Drift Gillnet Entry Permit number
S03H61467Z as follows:
Seller shall retain all rights of
ownership and effect associated with the
above referenced Alaska Entry Permit, to
claims, settlements, and/or benefits
resulting from the March 1989 Exxon oil
spill, against the vessel Exxon Valdez, and
the 1987 Glacier Bay oil spill.
Maw testified that he directed his broker, Martinson,
to draft the addendum.2 According to Maw, one of the GSI brokers
characterized the addendum as boiler plate. Maw also stated that
Polushkin himself suggested that the parties and the brokers all
sign the addendum in order to avoid issues and misunderstandings
about it in the future.
Polushkin fished the permit in 1990, 1991, and 1992.
He died in October 1992. The permit was then transferred to
another person, who is not a party to this case. David Polushkin,
Patrokys son, serves as the personal representative of Patrokys
estate.
The 1987 Glacier Bay oil spill referred to in the
addendum involved the spill of oil from the vessel Glacier Bay
into Cook Inlet.3 The record does not indicate that claims were
made that this oil spill caused damage after October 1989. The
Exxon Valdez oil spill occurred in March 1989 in Prince William
Sound. Some of the oil drifted into Cook Inlet and caused state
fisheries regulators to cancel the drift gillnet salmon fishery
in the inlet for 1989. Both the Glacier Bay spill and the Exxon
Valdez spill resulted in class-action litigation in which holders
of Cook Inlet drift permits were class members.4 In 1991 and
1992 Maw received three separate payments, totaling $54,945.57,
for damages for the Glacier Bay oil spill. These funds were to
compensate Maw for the reduction to his 1987 fishing income
caused by the spill, and Maw was obliged to pay from these funds
the percentage he owed to crew members who were percentage
shareholders in his 1987 fishing income. Polushkin did not claim
any interest in these funds.
The Exxon Valdez spill was much larger than the Glacier
Bay spill and the litigation it engendered was more complex.5 A
multi-billion dollar punitive damages award to class members only
now may be nearing a final resolution.6 In 1997 a plan of
distribution of present and future recoveries in the Exxon Valdez
litigation in favor of Upper Cook Inlet salmon drift net
claimants was approved by the United States District Court for
the District of Alaska.7 This plan explains the types of claims
held by Upper Cook Inlet fishermen.
The largest claims are for seasonal lost income. The
season with the greatest loss is the 1989 season, and the
greatest allocation of the anticipated proceeds is made for that
year. Smaller allocations are made for seasonal funds for 1990,
1991, 1994, and 1995. Concerning the 1990 and 1991 seasonal
funds, the plan of distribution notes that the price of salmon
was negatively impacted as a result of the spill . . . resulting
in lost income to UCI salmon drift claimants. According to the
plan, the 1994 and 1995 seasonal funds were created not because
the price of salmon in those seasons had been reduced but because
of poor predicted returns for those seasons said to be the result
of overescapement into the Kenai River system resulting in long-
term damage to the salmon stocks from that system.
The plan also provides a method of compensating permit
holders for the devaluation of permits sold between the second
quarter of 1989 and the fourth quarter of 1992. According to the
plan, disbursements will be proportioned to the amount by which
actual market values of permits fall short of what they would
have been without the spill. The shortfall is based on economic
studies and is set forth in tabular form in the plan.8 According
to the plan, the predicted value in the fourth quarter of 1989
for an Upper Cook Inlet permit was $192,381 and the actual value
was $180,500. Without the oil spill, according to the table, the
value in the fourth quarter of 1992 should have been $234,373,
but the actual value was $83,250. Thus, a hypothetical seller
who sold in the fourth quarter of 1989 suffered a projected loss
of $11,881, whereas the buyer of the same permit at that time
would have suffered an actual loss as of the fourth quarter of
1992 of $97,250 ($180,500 less $83,250) and a projected loss of
$151,123.
A third fund is created to compensate for the spill-
caused decline in market value of fishing vessels used in the
fishery. Distributions from this fund are said to be based on
market values rather than individual vessel values because
[a]ccounting for variations in individual vessel values would be
unreasonably, if not prohibitively, expensive and time-consuming.
Every owner of a vessel used in the fishery between March 24,
1989, and December 31, 1992, is eligible. Fund proceeds are to
be distributed to vessel owners in a manner proportional to the
amount by which vessels are estimated to have declined in value
from March 24, 1989 through December 31, 1992, using loss in
permit values as a measure.
In December 1992 an attorney from Faegre & Benson, a
law firm in Minneapolis representing both the class in the Exxon
Valdez litigation and Maw, wrote to David Polushkin seeking
confirmation that he had no objection to Maws obtaining your
fathers 1990 and 1991 fishing records from the Commercial
[Fisheries Entry] Commission for Mr. Maws use in pursuing his
claim against Exxon. The attorney stated: As you are probably
aware, Mr. Maw retained rights to recover all damages accruing
under the permit at the time he sold it to your father.
According to Maws affidavit filed in connection with the summary
judgment motion in this case, the requested records were provided
by the estate without comment. But Maw contradicted this
affidavit in his deposition, stating he had no knowledge of what
David Polushkin did in response to the letter; all he knew was
that his claims were submitted.
In December 1994 David Polushkin was given a payment of
$2,337.56 by a Kenai law firm disbursing funds from a partial
settlement with the Alyeska Pipeline Service Company, a co-
defendant in the Exxon case. This payment was for his fathers
lost fishing income in the 1990 and 1991 fishing seasons and was
based on his fathers catch history on the permit in question.
Maw received two payments from Faegre & Benson funded by the same
partial settlement: the first was in January 1994, and the
second was in July 1995, totaling $7,558.64. According to the
letter transmitting the January 1994 payment the breakdown for
the initial payment to Maw was as follows:
Net Allocation for 1989:
$3869.22
Net Allocation for 1990:
$1293.68
Net Allocation for 1991:
$1118.41
Net Allocation for permit devaluation:
$813.27
In late 2002 a Seattle law firm, Davis Wright Tremaine,
administering the Exxon Qualified Settlement Fund, sent two
letters to the estates attorney. In the first letter the Davis
Wright firm asserted that the plain language of the addendum
granted all claims to Maw, whether such claims arose before or
after the sale of the permit. The second letter, dated December
4, 2002, acknowledged that the estates counsel disputed the Davis
Wright interpretation. It warned that unless the estate
presented a release of claims signed by Maw by February 15, 2003,
Davis Wright would honor Mr. Maws lien against the estates claims
on behalf of Mr. Polushkin.9
B. Proceedings
On March 13, 2003, David Polushkin, as the personal
representative of the Estate of Patroky Polushkin, filed a
complaint against Maw. The complaint sought a declaratory
judgment that Polushkin and derivative claimants (such as crew
members) are entitled to the Exxon litigation claims that arose
after Polushkin acquired the permit in October 1989.
After answering the complaint, Maw moved for summary
judgment. Polushkin opposed the motion and cross-moved.
While the motions for summary judgment were pending,
Maw removed the case to the United States District Court for the
District of Alaska. Both the estate and Maw renewed their
motions for summary judgment in the district court, but the court
remanded the case to state court without deciding the motions.
Once back in state court the parties again renewed their motions.
Superior Court Judge Harold M. Brown granted summary
judgment in Maws favor, without comment, ordering that Maw
shall retain all rights of ownership to all
claims, payments and settlements from the
1989 Exxon Oil Spill relating to Permit
#S03H61467Z, whether such claims arose before
or after the sale of the permit to Patroky
Polushkin. Mr. Maw is entitled to all
claims, payments and settlement funds from
that case relating to this permit.
The superior court also denied Polushkins cross-motion for
summary judgment. Polushkin appeals.
III. STANDARD OF REVIEW
We review the grant or denial of summary judgment de
novo to determine whether there are any genuine issues of
material fact and whether the moving party is entitled to
judgment as a matter of law on the established facts.10 We draw
all reasonable inferences of fact against the moving party and in
favor of the non-moving party.11 Questions of contract
interpretation are generally questions of law which will be
reviewed de novo.12 However, fact questions are created when the
meaning of contract language depends on conflicting extrinsic
evidence.13 The question of the meaning of a written contract,
including a review of the extrinsic evidence to determine whether
any of the extrinsic evidence is conflicting, is a legal question
which we review de novo.14
IV. DISCUSSION
A. The Addendum Is Ambiguous.
When interpreting a contract, our duty is to ascertain
and give effect to the reasonable intentions of the contracting
parties.15 We determine the parties reasonable intentions by
resort[ing] to the language of the disputed provision and other
provisions, relevant extrinsic evidence, and case law
interpreting similar provisions.16 It is not necessary to find
that an agreement is ambiguous before looking to extrinsic
evidence as an aid in determining what it means.17
Both parties presented extrinsic evidence to aid in
interpreting the addendum. We have held that
[i]nterpreting a written contract is
generally a task for the trial court;
however, interpretation becomes a task for
the trier of fact when the parties present
extrinsic evidence to clarify a contracts
meaning, when this evidence points toward
conflicting interpretations of the contract,
and when the contract itself is reasonably
susceptible of either meaning. In such
cases, the trial court initially determines
whether the extrinsic evidence meets the
criteria to create a jury question; when the
court finds that the extrinsic evidence does
not conflict or is incompatible with the
terms of the written contract, interpretation
remains a question of law for the courts
determination.[18]
The 1989 addendum states that Maw will retain all
rights of ownership and effect associated with the . . . Permit,
to claims, settlements, and/or benefits resulting from the March
1989 Exxon oil spill, against the vessel Exxon Valdez, and the
1987 Glacier Bay oil spill. The estate argues that this language
was designed to ensure that the transfer of the permit did not
carry with it the claims for losses that Maw had suffered as a
result of the oil spills. Maw, on the other hand, contends that
the language was meant to assign to him future damages that
Polushkin might suffer as a result of the spills.
The language of the addendum conceivably could support
the interpretation of either party. On the one hand, the verb
retain suggests that only claims that Maw had at the time of
transfer were the subject of the transaction. He could hardly
retain claims for damages that Polushkin might suffer in the
future though Polushkin might assign those claims to him. On the
other hand, the all rights language with no explicit time cut-off
could suggest that an assignment of future claims was intended.
The language of the addendum is therefore ambiguous. Rules in
aid of contract interpretation must be employed in an effort to
determine its meaning.
B. Relevant Extrinsic Circumstances Indicate That No
Assignment of Future Claims Was Intended.
The rules in aid of contract interpretation are set out
in section 202 of the Restatement (Second) of
Contracts. The first and generally most important
rule is that [w]ords and other conduct are
interpreted in the light of all the circumstances,
and if the principal purpose of the parties is
ascertainable it is given great weight.19
1. Maws account of his subjective intent is not
probative.
In support of his motion for summary judgment Maw filed
an affidavit explaining his view of the purpose of the addendum.
The affidavit states in relevant part:
At the time of entering into and signing
the agreement and addendum it was the intent
of Mr. Polushkin and I and we understood and
agreed that Polushkin had no interest in my
Exxon or Glacier Bay claims and that I was to
receive all proceeds or money from those
claims.
(Emphasis added.)
Polushkins counsel argues that the emphasized language
indicates that the addendum was only intended to apply to
existing claims. He argues:
Mr. Polushkin, if he were alive, would
hardly state it better: Mr. Polushkin had no
interest in my (Mr. Maws) Exxon or Glacier
Bay claims and that I (Mr. Maw) was to
receive all proceeds or money from those
claims. The operative words are my claims,
and those claims, referencing my claims.
Although this argument has some plausibility, we do not view Maws
affidavit as an admission that the addendum was only intended to
cover claims suffered by Maw. Given Maws theory that he reserved
all claims for past and future losses, his use of the term my
claims could simply be a reference to the full scope of what he
contends he contracted for.
In a later affidavit, made after Polushkin made the
argument noted above, Maw offered a modified account regarding
the intent of the parties:
At the time of entering into and signing
the agreement and addendum it was the intent
of Mr. Polushkin and I that Polushkin had no
interest in any claim, settlement or benefit
resulting from the March 1989 Exxon oil spill
against the vessel Exxon Valdez and the 1987
Glacier Bay oil spill and that I retained all
rights to those claims. It was understood
and agreed between Mr. Polushkin and myself
that those were my claims not his and I was
to receive all future proceeds or money from
those claims.
Further, in subsequent deposition testimony Maw interpreted the
agreement using these words: I kept those rights, that was a
part of the agreement from day one. Nobody knew where this thing
was going to go, but wherever it went, those were mine.20
None of these post-litigation statements are probative
extrinsic evidence. Statements as to the subjective intent of
parties to a contract made during litigation do not create issues
of fact regarding the meaning of the contract. As we stated in
Still v. Cunningham: [W]e are . . . justified in disregarding
parties statements made during litigation as to their subjective
impressions or intent at the time of a transaction unless the
party in some way expressed or manifested his understanding at
the time of contract formation. 21 In a footnote to this
statement we set forth the following language from the seminal
case of Peterson v. Wirum:
Differences of opinion among the parties as
to their subjective intent, expressed during
the litigation, do not establish an issue of
fact regarding the parties reasonable
expectations at the time they entered into
the contract, since such self-serving
statements are not considered to be
probative. Rather, the court must look to
the express manifestations of each partys
understanding of the contract in attempting
to give effect to the intent behind the
agreement.[22]
Maws testimony as to what was understood or intended at the time
of the transaction does not relate what was stated or written23
between the parties at the time of contract formation. It is
thus not probative extrinsic evidence as to the meaning of the
addendum.
2. Extrinsic evidence indicates that a normal
allocation of claims was intended.
Maws testimony as to what was said during the
transaction is entitled to weight. Maw stated that he was told
by his broker that the addendum language was merely boiler plate.
This means that the addendum was thought to be a part of a
normal, as distinct from an unusual, allocation of claims between
a buyer and seller of a permit.
Polushkins broker in the transaction, Roseleen Moore,
testified by affidavit that while she did not recall this
specific transaction, she would have read the addendum to mean
that Maw would keep the damages that he suffered as a result of
the spills and that Polushkin would have any damages he might
suffer in the future. Moore also testified that such an
allocation would be normal for the industry. She testified that
she participated in perhaps 100 or more similar transactions
involving Cook Inlet drift permits and has never been involved in
any permit sale in which the seller kept the right to future
damages caused by the Exxon Valdez or Glacier Bay spill. Moore
made it clear that the reason for claims retention clauses was so
that sellers would not be thought to have transferred their
rights to damages they suffered to permit buyers:
When the Exxon spill happened, as well
as to a lesser degree when the Glacier Bay
oil spill occurred in 1987, sellers of
permits were concerned about making sure they
kept whatever rights they had regarding the
damages they suffered as a result of the
spills. The sellers wanted to be sure their
rights to damages did not pass with the
permit.
Moore also detailed some reasons why it would be
atypical for a seller to retain damages accruing after a permit
is sold. She stated:
I believe it would be very unusual that a
seller would retain future damages after the
permit was transferred because those damages
would be based on the participation and catch
history of the purchaser. The future losses
and damages, primarily lost income, would be
based on catch and price and consider the
size of the crew the purchaser used, his or
her expenses, use of a spotter pilot, the
markets available to the purchaser, whether
the permit holder was experienced in the
fishery, whether the vessel used was ideal
for the specific fishery and other variables
all focused on the abilities and
participation of the purchaser.
Moores testimony as to the normal allocation of claims
in permit transfer transactions is not refuted. Maw, at his
deposition, could not think of any other permit transfer
transaction in which a seller claimed to be retaining future
damage suffered by a buyer.24 Maw did not attempt to refute
Moores account as to the normal allocation of claims between
sellers and buyers of Cook Inlet permits.
There is therefore uncontested evidence suggesting that
both Maws broker and Polushkins broker regarded the allocation of
claims that the addendum addressed to be normal for transfers of
Cook Inlet permits. The evidence is also uncontested that the
normal allocation for such permits is that claims accrued as of
the time of transfer are retained by the seller whereas losses
that might be suffered in the future belong to the buyer.
3. Extrinsic evidence indicates that the price for
the permit was not discounted.
Another undisputed item of extrinsic evidence relates
to the price of the permit. The price of the permit was slightly
above the average. Moore testified that the price Polushkin paid
to Maw, $186,000, was, in her view, a slight premium price and
that it was not discounted. Maw testified at his deposition that
he did not know of any sales at the time of this particular sale
where a permit had been sold for a higher price. If the
transaction were intended to entail an assignment of Polushkins
future claims to Maw, one would expect that the sales price would
be discounted. Permits are fungible, there is an active market
in them, and there is no reason why Polushkin would have assigned
his claims to Maw without receiving compensation in the form of a
reduced sale price. Yet it is clear that there was no such
compensation as Polushkin paid a market price for the permit
rather than a discounted price. This, in turn, suggests that no
assignment was intended.25
4. There is no probative course of performance
evidence.
Maw claims that there is extrinsic evidence concerning
the parties course of performing the contract that indicates that
post-transfer claims for losses suffered by Polushkin were meant
to be assigned to Maw. Extrinsic evidence of a course of
performance can be an aid in interpreting the meaning of a
contract. Subsection 202(4) of the Restatement (Second) of
Contracts states concerning course of performance: Where an
agreement involves repeated occasions for performance by either
party with knowledge of the nature of the performance and
opportunity for objection to it by the other, any course of
performance accepted or acquiesced in without objection is given
great weight in the interpretation of the agreement. Comment g
explains that the rationale for the use of course of performance
evidence is that [t]he parties to an agreement know best what
they meant, and their action under it is often the strongest
evidence of their meaning. But the comment goes on to state that
action on a single occasion or the action of one party only is
not entitled to weight:
The rule of Subsection (4) does not apply to
action on a single occasion or to action of
one party only; in such cases the conduct of
a party may be evidence against him that he
had knowledge or reason to know of the other
partys meaning, but self-serving conduct is
not entitled to weight.
The Uniform Commercial Code Sales adopted in Alaska
also requires repeated occasions for course of performance
evidence.26 The reporters comment with respect to course of
performance states that [a] single occasion of conduct does not
amount to a course of performance.27 The Uniform Commercial Code
Sales governs the sale of goods, a broad term that nonetheless
does not encompass limited entry permits.28 But this does not
mean that the UCC is irrelevant. This court has previously
relied on the UCC to resolve contract disputes not strictly
governed by the act.29 Other courts have done the same. [T]he
UCC is regarded as a modern restatement of the law of contracts
that has the seal of legislative approval. Consequently, there
is a very strong tendency to apply the UCC to non-UCC contracts
either directly or by way of analogy.30
In light of these considerations we believe that it is
appropriate to be guided by the provisions of the UCC Sales
statute and the consistent principles of the Restatement (Second)
of Contracts 202 in considering whether there is relevant course
of performance or practical construction evidence in this case.
As course of performance evidence Maw claims that David
Polushkin, on behalf of the estate, provided Maws counsel with
Patroky Polushkins fishing records for 1990 and 1991.31 This is
not course of performance evidence for two reasons. First, David
Polushkin was not a party to the contract and thus did not know
what the parties meant when they made the agreement. His
performance, therefore, would not be evidence of Patroky
Polushkins understanding of the meaning of the addendum.32 Second,
David Polushkins action occurred on only a single occasion.
Course of performance evidence to be relevant requires repeated
occasions.33
Maw also claims that his receipt of the Glacier Bay oil
spill proceeds is relevant course of performance evidence. This
argument lacks merit because all the Glacier Bay proceeds were
for losses incurred prior to the transfer.
Finally, Maw claims that his receipt of Alyeska
settlement proceeds for the years 1990 and 1991 is relevant
course of performance evidence. This argument also lacks merit.
This is self-serving conduct of one party only. As such, as the
commentary to the Restatement makes clear, it is not entitled to
weight.
C. Interpreting the Addendum To Be an Assignment of
Polushkins Future Losses Would Be Unreasonable.
One important guide to the meaning of a contract is
that interpretations that give a reasonable meaning to a contract
are preferred to those that impart an unreasonable meaning. As
section 203(a) of the Restatement (Second) of Contracts provides:
[A]n interpretation which gives a reasonable, lawful, and
effective meaning to all the terms is preferred to an
interpretation which leaves a part unreasonable, unlawful, or of
no effect. The commentary to this section further explains this
rule: In the absence of contrary indication, it is assumed that
each term of an agreement has a reasonable rather than an
unreasonable meaning, and that the agreement is intended to be
lawful rather than unconscionable, fraudulent or otherwise
illegal.34
Interpreting the addendum to be an assignment of
Polushkins future claims to Maw would have unreasonable, arguably
unconscionable, consequences. Focusing only on the decline in
value of the permit, Maws projected loss was $11,881.35 His
actual loss was only about half that because he sold the permit
to Polushkin for a slight premium. By contrast, Polushkins
actual loss between the time of his purchase and the time of his
death was $102,750, and his projected loss was $151,123.36 To
construe the addendum to assign losses of this magnitude to Maw
would be unreasonable, given that Maw paid nothing for an
assignment and will be fully compensated for the losses that he
suffered. The same is also true with respect to Maws claim for
the loss in value to Polushkins fishing boat. Polushkin did not
buy his boat from Maw, yet Maw claims that he acquired the right
to claim damages for its spill-related depreciation. Again, and
for the same reasons as those previously expressed with respect
to the decline in value of the permit, such a claim is
unreasonable. Maws claim to loss of income suffered by Polushkin
on account of Polushkins fishing endeavors in 1991 is also
unreasonable for the same reasons.37
V. CONCLUSION
Although the words used in the addendum to the purchase
agreement arguably could support the interpretation offered by
either party, the relevant extrinsic evidence and the rule that
contracts should be interpreted to have a reasonable meaning in
the absence of a contrary indication demonstrate that the
addendum was not meant to assign losses suffered by Polushkin to
Maw. Since there are no genuine issues of material fact, the
Estate of Patroky Polushkin is entitled to summary judgment on
this issue. Accordingly, the judgment of the superior court is
REVERSED, and this case is REMANDED for further proceedings in
accordance with this opinion.
_______________________________
1 Neither party has been able to locate Martinson.
2 A handwritten client activity log apparently kept by
Maws broker, GSI, includes the following entry by DF for October
11, 1989: Drafted Addendum Re: Exxon Bennys. Faxed to Roland
Maw.
3 See In re The Glacier Bay, 71 F.3d 1447, 1449 (9th Cir.
1995).
4 Id.
5 See In re The Exxon Valdez, 472 F.3d 600 (9th Cir.
2006).
6 See In re Exxon Valdez, 490 F.3d 1066 (9th Cir. 2007)
(denial of rehearing en banc). Exxon has filed a petition of
writ of certiorari to the United States Supreme Court.
7 In re Exxon Valdez, No. A89-095-CV (D. Alaska Apr. 22,
1997).
8 The table provides in relevant part as follows:
Year Qtr
Predicted Value
Actual Value
Predicted-Actual Gap
Sellers Share
Buyers Share
1989.2
$184,764
$173,353
($11,411)
7.55%
92.45%
1989.3
$188,573
$176,927
($11,646)
7.71%
92.29%
1989.4
$192,381
$180,500
($11,881)
7.86%
92.14%
1990.1
$210,597
$197,591
($13,006)
8.61%
91.39%
. . .
1992.1
$183,651
$90,091
($93,560)
61.91%
38.09%
1992.2
$202,306
$89,207
($113,099)
74.84%
25.16%
1992.3
$218,340
$86,229
($132,111)
87.42%
12.58%
1992.4
$234,373
$83,250
($151,123)
100%
0%
9 Copies of these letters were sent to Maw in care of
Faegre & Benson.
10 Zok v. Collins, 18 P.3d 39, 41 (Alaska 2001).
11 Id.
12 Burns v. Burns, 157 P.3d 1037, 1039 (Alaska 2007).
13 Norville v. Carr-Gottstein Foods Co., 84 P.3d 996, 1000
n.1 (Alaska 2004).
14 Still v. Cunningham, 94 P.3d 1104, 1109 (Alaska 2004);
Little Susitna Constr. Co. v. Soil Processing, Inc., 944 P.2d 20,
23 (Alaska 1997).
15 W. Pioneer, Inc. v. Harbor Enters., Inc., 818 P.2d 654,
656 (Alaska 1991).
16 Id.
17 Alyeska Pipeline Serv. Co. v. OKelley, 645 P.2d 767,
771 n.1 (Alaska 1982) ([A] court in this jurisdiction may
initially turn to extrinsic evidence in construing a contract.);
Peterson v. Wirum, 625 P.2d 866, 871 (Alaska 1981).
18 Little Susitna, 944 P.2d at 23 (citing Alaska
Diversified Contractors, Inc. v. Lower Kuskokwim Sch. Dist., 778
P.2d 581, 584 (Alaska 1989); Alaska N. Dev., Inc. v. Alyeska
Pipeline Serv. Co., 666 P.2d 33, 39 (Alaska 1983); Restatement
(Second) of Contracts 212(2) (1981)).
19 Restatement (Second) of Contracts 202(1) (1981).
20 Maw gave this answer in connection with the meaning of
the terms of the plan of distribution for Upper Cook Inlet drift
gillnet permit holders. Maw, who was at one time the executive
director of the Upper Cook Inlet Drift Fishermens Association,
participated in the development of the standards of the plan.
21 94 P.3d 1104, 1110 (Alaska 2004) (quoting Norville v.
Carr-Gottstein Foods Co., 84 P.3d 996, 1003 (Alaska 2004)).
22 Id. at 1110 n.14 (quoting Peterson v. Wirum, 625 P.2d
866, 870 (Alaska 1981)).
23 The negotiations were conducted without face-to-face
meetings.
24 The record does reveal one other case where such a
claim was made. This case, which was brought to Maws attention
during his deposition, and with which Moore was also familiar,
resulted in litigation and a consent judgment in which the claims
were allocated between buyer and seller as of the time of
transfer (except for the vessel devaluation claim where the
dividing line was the calendar year of transfer).
25 The plan of distribution recognizes the logical
relationship between an assignment of future claims and a
discounted sale price. Thus the plan states as follows:
In some cases, permit buyers and sellers
agreed to assign litigation rights and this
was taken into consideration in arriving at
the permit sale price. Plaintiffs counsel
would abide by such agreements which are
reflected in written contracts, (e.g.,
contracts which contain language such as It
is hereby agreed that all right, title and
interest in all claims for damages arising
out of the Exxon oil spill incurred by the
seller prior to and including the closing
date of the sale of the permit, shall remain
with the seller or Both parties agree that
the sale and transfer shall not convey to the
buyer any right, title or interest of the
seller in any claim arising as a result of
the Exxon Valdez oil spill on or about March
24, 1989 which claims arose prior to the sale
and transfer) to the extent not disputed by
the parties. To the extent the intent of
such contracts are disputed by the parties,
plaintiffs counsel would hold back any
affected distributions until the parties
disagreement is resolved.
(Emphasis added.)
26 AS 45.02.208 provides:
Course of performance or practical
construction.
(a) If the contract for sale involves
repeated occasions for performance by either
party with knowledge of the nature of the
performance and opportunity for objection to
it by the other, a course of performance
accepted or acquiesced in without objection
is relevant to determine the meaning of the
agreement.
(b) The express terms of the agreement
and the course of performance, as well as the
course of dealing and usage of trade, shall
be construed when reasonable as consistent
with each other; but if the construction is
unreasonable, express terms control the
course of performance and the course of
performance controls both the course of
dealing and usage of trade (AS 45.01.205).
(c) Subject to the provisions of AS
45.02.209 on modification and waiver, the
course of performance is relevant to show a
waiver or modification of terms inconsistent
with the course of performance.
27 Uniform Commercial Code (UCC) 2-208 cmt. 4.
28 AS 45.02.102; AS 45.02.105(a) (defining goods as all
things . . . movable at the time of identification to the
contract for sale other than . . . investment securities, and
things in action). As one commentator states, the [Sales]
Article does not apply to licenses, whether that term is used in
the property sense or as representing a governmental grant. 2
Larry Lawrence, Lawrences Anderson on the Uniform Commercial Code
2-105:74 (3d ed. rev. 2004).
29 See Cousineau v. Walker, 613 P.2d 608, 615-16 (Alaska
1980) (analogizing to the UCCs treatment of caveat emptor in a
real property contract dispute); Firemans Fund Ins. Co. v. Sand
Lake Lounge, Inc., 514 P.2d 223, 226-27 (Alaska 1973)
(analogizing to UCC statute of limitations provisions in an
insurance contract dispute over the interpretation of a
limitations clause); Rego v. Decker, 482 P.2d 834, 838 (Alaska
1971) (drawing from the UCCs provision that a contract will not
fail for indefiniteness if there is a reasonably certain basis
for providing a remedy in a contract dispute involving an option
contract for the sale of land); see also Veach v. Meyeres Real
Estate, Inc., 599 P.2d 746, 749 n.5 (Alaska 1979) (citing the UCC
by analogy).
30 1 Larry Lawrence, Lawrences Anderson on the Uniform
Commercial Code 1-101:42 (3d ed. rev. 2003).
31 On this record, whether this actually occurred is in
doubt, given Maws subsequently declared lack of knowledge. But
for the purpose of the present opinion we assume that David
Polushkin provided the records. See supra Part II.A. In support
of his argument, Maw cites Exxon Corp. v. State, 40 P.3d 786, 795-
96 (Alaska 2001). In Exxon this court considered course of
performance evidence in interpreting whether an agreement between
Exxon and the state granted to the state the discretion to deny
an enlargement of an oil-producing unit area. In affirming the
states discretionary authority we relied on course of performance
evidence by Exxon acknowledging such authority on three
occasions. Id.
32 [C]ourse of performance when employed to interpret a
contract is an indicator of what the parties intended at the time
they formed their agreement. It is an expression by the parties
of the meaning that they gave to the terms of the contract that
they made. Arthur Linton Corbin, Corbin on Contracts 24.16, at
136 (rev. ed. 1998) (emphasis added).
33 Although evidence of conduct on a single occasion does
not amount to a course of performance, action on a single
occasion by a party, as comment g to section 202 of the
Restatement notes, may be evidence against him that he had
knowledge or reason to know of the other partys meaning . . . .
Such evidence can be important because where parties have
attached different meanings to an agreement it is interpreted in
accordance with the meaning attached by one of them if at the
time the agreement was made the other party either knew or had
reason to know of the meaning attached by the first party.
Restatement (Second) of Contracts 201(2)(a) & (b) (1979). But
this use of conduct evidence could not be applied to David
Polushkin because he was not party to the contract and thus
lacked both knowledge and reason to know of the meaning attached
by Maw to the contract at the time it was made.
34 Restatement (Second) of Contracts 203 cmt. c.
35 See supra Part II.A.
36 See supra Part II.A.
37 Further, one would expect that if the contract actually
contemplated that Maw would receive damages for Polushkins future
loss of fishing income, provisions requiring diligence and
reporting would have been built into the contract.
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