Mitford v. de Lasala
| Decision Date | 20 May 1983 |
| Docket Number | No. 6755,6755 |
| Citation | 666 P.2d 1000 |
| Court | Alaska Supreme Court |
| Parties | 115 L.R.R.M. (BNA) 4254 S.B. MITFORD, Appellant, v. Ernest Ferdinand de LASALA, Australaska Corporation, Cosmopolitan Development Corporation, Alaska Enterprises Limited, Compass Enterprises, Inc., San Miguel Navigation Co., S.A., Pan-Pacific Navigation Co, Inc., Ocean Bulkers, Inc., John Manners & Co., Ltd., John Manners (Holdings) Ltd., San Roberto Steamship Company, S.A., Oceanic Finance Co., S.A., Summit Finance Co., S.A., North Breeze Navigation Co., Ltd., South Breeze Navigation Co., Ltd. (Hong Kong), San Jeronimo Steamship Company, S.A., Cosmopolitan Finance Corp., South Breeze Navigation Co., Ltd. (Liberia), Compania Nueva Del Oriente S.A., Indo-Pacific Corp., Java International Corp., Compass Shipping Co., Ltd., and Northern Enterprises, Ltd., Appellees. |
David G. Shaftel and Wayne Anthony Ross, Anchorage, for appellant.
Richard A. Helm, Burr, Pease & Kurtz, Anchorage, for appellees Ernest de Lasala, Australaska Corp., Cosmopolitan Development and Alaska Enterprises Limited.
William H. Bittner, Patrick Owen, Birch, Horton, Bittner, Monroe, Pestinger & Anderson Before BURKE, C.J., RABINOWITZ, MATTHEWS and COMPTON, JJ., and DIMOND, Senior Justice. *
Anchorage, for appellees Compass, San Miguel, Pan-Pacific, Ocean Bulkers, John Manners, San Roberto, Oceanic Finance, Summit Finance, North Breeze, South Breeze, San Jeronimo, Cosmopolitan Finance, Compania Nueva Del Oriente, Indo-Pacific, Java Intern., Compass Shipping and Northern Enterprises.
This case is an appeal from several partial summary judgment rulings that had the effect of disposing of all issues before the superior court. The issues on appeal concern interpretation of an employment contract, quantum meruit, and attorney's fees. The case involves 23 defendants. Defendants Ernest Ferdinand de Lasala, Australaska Corporation, Cosmopolitan Development Corporation, and Alaska Enterprises, Ltd. at times will be referred to collectively as "Australaska." The remaining 19 defendants will be collectively referred to as "Compass."
In 1961, S.B. Mitford moved from Hong Kong to Anchorage. At that time, he had been employed for approximately nine years as an accountant and later comptroller in Hong Kong for various corporations owned or controlled by Robert P. de Lasala. According to a letter of September 27, 1961 written by Robert's son Ernest de Lasala, Mitford was to "attach [himself] as the accountant of Australaska Corporation and Cosmopolitan Development Corporation and their affiliates, ..." Australaska and Cosmopolitan were both owned by the de Lasala family and were primarily involved in long-term investment in Alaska real estate. According to the same letter, Mitford was to be employed on "the same terms and conditions as Mr. Don Smith, viz letter to him of 15th August, 1960." Don Smith's employment agreement stated that the
terms of employment ... are that you would receive a remuneration in lieu of a fixed salary based on 10% (Ten percent) of profits as computed in accordance with the rules of Federal Income Tax BUT with a minimum drawing allowance of $850.- per month in all ....
The period of your employment with us is for an indefinite period subject to determination by either side giving 3 months notice.
On July 2, 1962, Mitford wrote to Robert de Lasala inquiring about the terms of his employment as they related to his leave pay. De Lasala responded on July 6, addressing Mitford's leave and indicating that "[i]n order to avoid any misunderstanding in the future," he would write to Mitford "officially on the matter." The official letter, dated July 7, 1962, and signed by Robert P. de Lasala, states in full:
AUSTRALASKA CORPORATION
COSMOPOLITAN DEVELOPMENT CORPORATION.
I wish to refer to letter addressed to you by Mr. E.F. de Lasala on 27th September 1961 and would confirm that as from 2nd October 1961 you are employed as Treasurer of the above mentioned Corporations at a remuneration in lieu of a fixed salary based on 10% (ten percent) of profits as computed in accordance with the rules of Federal Income Tax but with a minimum guaranteed drawing allowance of US$850.- per month in all and in such proportion chargeable to each Corporation as the Directors might decide at the end of each financial year.
The period of your employment is for an indefinite period subject to determination by either side giving three months notice.
For the sake of good order kindly confirm your understanding and acceptance by signing two copies of this letter.
Mitford signed this letter under the typewritten phrase "I HEREBY CONFIRM MY UNDERSTANDING AND ACCEPTANCE OF THE ABOVE."
Mitford, who became an officer and director of Australaska and Cosmopolitan, managed those corporations' real property holdings over the ensuing sixteen years, as well as property owned by Alaska Enterprises, Ltd., another defendant in this action. He additionally performed services for a group of other de Lasala owned corporations at the direction of either Robert or Ernest de Lasala. In 1971, he requested an increase in his drawing allowance, but the request was denied.
In 1977, Mitford reminded Ernest de Lasala, now presiding over the de Lasala corporate milieu since his father's death, of the 10% profit-sharing arrangement contained in his employment agreement. De Lasala responded by letter on October 7, 1977, indicating that he did "not recall the existence of the letter which is very ambiguous at best." De Lasala interpreted the employment agreement to give Mitford a choice between 10% of the profits in Alaska or a share in another venture in which Mitford had participated.
Mitford replied on October 19, 1977, with his interpretation of the employment agreement. He asserted that his subsequent participation in the other de Lasala venture was separate from the employment agreement, that all ambiguities in the employment agreement would be construed against de Lasala, and that since the profits were to be "computed in accordance with the rules of Federal Income Tax," each year of Mitford's employment must stand on its own. Accordingly, profits from later years could not be offset against drawing allowance payments of previous years.
On October 28, 1977, de Lasala again wrote to Mitford, stating:
Your most uncalled for letter 19/10/77 compels me to hereby give you three months' notice of termination of agreement as set out in letters 27/9/61 and 15/8/60.
On December 3, 1977, Mitford filed a complaint that named Ernest de Lasala, Australaska, Cosmopolitan, and Alaska Enterprises as defendants. The complaint alleged various breach of contract claims and asserted entitlement to 10% of the corporate defendants' profits. The defendants answered, admitting that Mitford was entitled to 10% of the profits of Australaska and Cosmopolitan as computed in accordance with the rules of federal income tax with a minimum guaranteed drawing allowance of $850 per month, and denying any other liability. Mitford later amended his complaint to name the remaining defendants in this action, as well as a partnership later dismissed by stipulation. The amended complaint alleged that each new defendant was an "affiliate" of Australaska, Cosmopolitan, and Alaska Enterprises, and was therefore liable to Mitford under his employment contract for 10% of their profits. The four original defendants answered as before, and the new defendants answered, denying any liability.
On October 4, 1979, Mitford amended his complaint again by leave of court. The second amended complaint alleged a right to compensation in quantum meruit from Ernest de Lasala, Alaska Enterprises, and Compass, and claimed that all defendants had prevented Mitford from collecting his share of the profits by firing him and by "prevent[ing] profits from being realized" during his employment. All defendants denied any liability under these new claims.
A series of partial summary judgment rulings then disposed of the case. On June 15, 1979, Judge Mark Rowland ruled that the remuneration term of the employment agreement was unambiguous and
that plaintiff contracted to receive ten percent of the profits, as computed in accordance with the rules of Federal Income Tax with a minimum of $850.00 per month, of the defendant entities Cosmopolitan Development Corporation and Australaska Corporation only.
The court also ruled that the term relating to which defendants were liable for Mitford's remuneration was ambiguous and that summary judgment on that issue would be inappropriate on the state of evidence at that time. On January 24, 1980, Judge Rowland granted motions by Australaska and Cosmopolitan, finding that Mitford was not entitled to 10% of the unrealized appreciation of real estate owned by Australaska and Cosmopolitan. That same day, the court also granted summary judgment to the defendants on Mitford's quantum meruit and prevention claims. On September 2, 1981, the court ruled that Mitford's 10% of the profits of Australaska and Cosmopolitan would be "10% of the taxable income of the corporations as reported to the Internal Revenue Service," which amounted to $35,545.10. Only Australaska and Cosmopolitan were held liable for these damages.
The parties filed a Stipulation Respecting Remaining Issues on March 22, 1982, in order to perfect an appeal to this court. This stipulation left all parties free to move for an order determining the appropriate allocation of costs and attorneys' fees. The court later awarded attorneys' fees to all defendants as prevailing parties. Mitford appealed the original judgment on March 31, 1982, and later filed a brief regarding the attorneys' fees questions pursuant to order of this court.
We must first determine the identity of Mitford's employers, whose profits he was to share, and who is liable to pay his remuneration.
The interpretation of this contract turns in part upon whether...
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