Alaska-Canadian Corp. v. Ancow Corp.

• Decision Date: 05 December 1967
• Docket Number: No. 815,ALASKA-CANADIAN,815
• Citation: 434 P.2d 534
• Parties: CORPORATION, a Delaware corporation, Appellant, v. ANCOW CORPORATION, an Alaska corporation, Appellee.
• Court: Alaska Supreme Court

Page 534

434 P.2d 534

ALASKA-CANADIAN CORPORATION, a Delaware corporation, Appellant, v. ANCOW CORPORATION, an Alaska corporation, Appellee.

No. 815.

Supreme Court of Alaska.

Dec. 5, 1967.

Lewis S. Armstrong, Seattle, Wash., and P. J. Gilmore, Jr., Ketchikan, for appellant.

W. C. Stump, Stump & Bailey, Ketchikan, for appellee.

Before NESBETT, C. J., and DIMOND and RABINOWITZ, JJ.

OPINION

NESBETT, Chief Justice.

In its complaint appellee, as plaintiff below, sued to rescind an agreement for the sale and purchase of certain patented mining claims entered into by predecessors in interest of the parties hereto; to have declared void a recorded deed thereof and for a declaration that all of the interest of the original sellers was in appellee. The trial court eventually granted appellee's motion for summary judgment on the ground that there was no genuine issue of any material fact which affected the validity of a written settlement agreement entered into by the parties on June 7, 1966.

Appellant contends that error was committed because issues of material questions of fact were raised in the trial court, in that:

(a) It had disputed the authority of appellant's attorneys to enter into the written settlement agreement, and

(b) It had disputed the validity of the settlement agreement on the ground that, instead of having been accepted by appellee, it had been rejected by a counter-offer.

In its brief appellant asserts that an issue of material fact existed concerning the validity of the settlement agreement of June 7, 1966, but neglects to mention what issue of fact was raised and whether it bore on the authority of appellant's attorney or on the question of rejection by counter-offer.

Appellant's omission was commented on by appellee in its brief. In its reply brief appellant explains that although the written settlement agreement was dated June 7, 1966, it was not filed in this action until July 20, 1966. Appellant seems to rely on the fact that subsequent to the execution of the settlement agreement of June 7, 1966, and on approximately June 23, 1966, appellee submitted a proposed modification of the June 7th settlement agreement which was never accepted by appellant. Appellant does not attempt to discuss the legal significance of either of the foregoing matters.

Appellant's briefs have not been enlightening. We have nevertheless taken the trouble to examine the entire record in an effort to determine whether it contains any support for appellant's contention that issues of material fact existed when summary judgment was granted.

In support of appellee's motion for summary judgment the affidavit of W. C. Stump, counsel for appellee, was filed. This document described in detail a meeting had in Seattle on June 6, 1966, at the invitation of counsel for appellant, the meeting being attended by affiant as counsel for appellee; by Paul S. Charles, principal stockholder of appellee corporation; by George Leedy and R. L. Jernberg, counsel for appellant; and Peter A. Schwerdt, Secretary-Treasurer of appellant corporation. The affidavit describes settlement negotiations which occupied the entire day of June 6, 1966, culminating in a stipulated settlement of the suit which was reduced to writing on June 7, 1966, executed by counsel for both parties on that date, and thereafter filed with the court. The affidavit is lengthy and among other matters describes in detail certain business arrangements entered into in reliance on the June 7th settlement and refers to letters subsequently written by Peter A. Schwerdt denying that any settlement agreement had ever been reached and claiming that the June 7th agreement was not legal. The affidavit of Paul S. Charles substantiated most of the allegations contained in W. C. Stump's affidavit and specifically alleged that at the Seattle meeting Peter A. Schwerdt held himself out to be the authorized representative of appellant corporation; that 'after protracted bargaining between affiant and Peter A. Schwerdt the agreed settlement was reduced to writing by the respective counsel of the parties, executed by the proper persons and filed in this Court'; that a document entitled 'Authority to Represent Defendant', executed by the last board of directors of appellant corporation confirmed the authority of appellant's counsel to make a final settlement of the suit. The latter mentioned document of authority was filed with the court. It stated that it was executed by the last duly elected directors of appellant corporation who

* * * do, on behalf of and as directors of said corporation, authorize and employ ALLEN, DeGARMO & LEEDY of Seattle, Washington, and ROBERT L. JERNBERG of Ketchikan, Alaska, as attorneys to represent said corporation in the above-entitled case, giving them full authority in all respects to conduct said case, make all pleadings and proceedings whatsoever, compromise and settle said case or otherwise conduct said case as they see fit, for the benefit of the Defendant, subject to fees and expenses of said attorneys in the conduct of or with respect thereto and with authority of said attorneys to receive any compromise settlements or proceeds of said case.

It was dated May 17, 1966, and signed by three directors, one of whom was stated to be president and another secretary-treasurer. Concurrently a memorandum was filed by appellee pointing out to the court that no genuine issue of material fact remained.

At this point in the proceedings Civil Rule 56(c) became applicable. In pertinent part it states:

The adverse party not later than two days prior to the hearing may serve opposing affidavits, a concise 'statement of genuine issues' setting forth all material facts as to which it is contended there exists a genuine issue necessary to be litigated, and any other memorandum in opposition to the motion. Judgment shall be rendered forthwith if the pleadings, depositions and admissions on file, together with the affidavits, show that there is no genuine issue at to any material fact and that any party is entitled to a judgment as a matter of law.

In construing this rule in Gilbertson v. City of Fairbanks ¹ this court held that where a clear showing in support of a motion for summary judgment had been made, it was incumbent that the party opposing the motion clearly state its position or defense and show the court how it planned to support its position or defense with facts which would be admissible in evidence at the trial.

In opposition to the motion the affidavit of Peter A. Schwerdt was filed. This document admitted that affiant was Secretary-Treasurer of appellant corporation, that affiant attended the settlement negotiations in Seattle on June 7, 1966, and then stated:

At this time, a tentative settlement was reached. All parties were aware, however, that settlement was contingent on the consent of the defendant corporation through its officers and directors. To my knowledge, no such consent was ever granted. Counsel for the defendant corporation were aware that they lacked authority to enter into a binding settlement stipulation in June of 1966, without first acquiring corporate consent.

The above affidavit failed to deny or to fairly meet many material allegations of fact contained in the affidavits of W. C. Stump, Paul S. Charles and the documents filed with the court, in that:

(1) It omitted to inform the court why the written agreement of June 7th was only a 'tentative settlement' and what admissible evidence would be produced at trial to support this allegation when, by its terms, the agreement purported to be a final compromise and settlement of the suit.

(2) It wholly failed to advise the court what admissible evidence would be produced at trial to show that all parties to the settlement realized that the settlement was only contingent and must be approved by the officers and directors of the corporation when, by its terms, the written authority under which counsel participated gave them unrestricted authority to 'compromise and settle said case or otherwise conduct said case as they see fit'.

The affidavit did not deny that throughout the negotiations affiant had held himself out to be the authorized representative of appellant corporation and that he had personally negotiated with the affiant Paul S. Charles until a satisfactory compromise had been reached, as...