Peterson v. Wirum, 4704

• Citation: 625 P.2d 866
• Decision Date: 27 March 1981
• Docket Number: No. 4704,4704
• Parties: Leah J. PETERSON, Appellant, v. C. Harold WIRUM and Mary Lou Wirum, Vernon C. Hickel and Louis Palmer, Appellees.
• Court: Supreme Court of Alaska (US)

Page 866

625 P.2d 866

Leah J. PETERSON, Appellant, v. C. Harold WIRUM and Mary Lou Wirum, Vernon C. Hickel and Louis Palmer, Appellees.

No. 4704.

Supreme Court of Alaska.

March 27, 1981.

John H. Bradbury and Ann K. Stokes, Bradbury, Bliss & Riordan, Inc., Anchorage, for appellant.

Theodore M. Pease, Jr., Burr, Pease & Kurtz, Inc., Anchorage, for appellees Wirums.

William K. Jermain and Randall Simpson, Jermain, Dunnagan & Owens, Anchorage, for appellees Hickel and Palmer.

OPINION

Before RABINOWITZ, C. J., CONNOR, BOOCHEVER and BURKE, JJ., and HANSON, Superior Court Judge. ^*

RABINOWITZ, Chief Justice.

The parties to this appeal are partners in a partnership known as Peterson Towers Associates (PTA), formed for the purpose of constructing and operating an office and condominium complex in Anchorage. The partners are appellant Leah Peterson (one-third interest), appellees Harold Wirum and Mary Wirum (collectively a one-third interest), and appellees Vernon Hickel and Louis Palmer (collectively a one-third interest). ¹ Substantial differences arose among the partners concerning construction cost overruns and the amount owed by PTA to each partner. ² After the structure was substantially completed, the partners entered into an agreement to resolve a number of these outstanding disputes. This agreement was reduced to writing and signed by all partners on October 28, 1977 (hereinafter "October agreement"). This agreement established, among other things, that PTA owed $1,365,000 to Hickel and Palmer, and specified that PTA was to pay $650,000 to Hickel and Palmer to reduce the debt, "upon receipt of financing from Pacific Mutual."

Pacific Mutual Insurance Company subsequently declined to lend the $650,000. In May 1978, Peterson informed the other partners that she did not consider the October agreement to be valid. The Wirums subsequently filed a complaint against Peterson, Hickel, and Palmer, seeking a declaratory judgment that the October agreement was valid and an order compelling the parties to carry out the terms and intent of the October agreement, including the requirement that PTA borrow $650,000 to repay Hickel and Palmer. Hickel and Palmer filed an answer admitting all the allegations in the Wirum complaint and a cross-claim against Peterson which incorporated those allegations. Peterson answered the complaint by alleging that the loan from Pacific Mutual was a condition precedent to enforcement of the October agreement, failure of which rendered the agreement invalid.

Both Peterson and the Wirums moved for summary judgment on the issue of the validity of the October agreement. The superior court denied Peterson's motion and granted the Wirums' motion.

Shortly after the Wirums had filed their complaint seeking enforcement of the October agreement, Vern Hickel Construction Co. (VHCC) filed a claim of lien against the partnership property for labor and materials valued in excess of $1,300,000 and interest thereon from the date of the October agreement. Subsequently, Hickel had $300,000 in partnership funds transferred to VHCC and the Alaska National Bank of the North to pay construction costs for the partnership project. Hickel did this while the Wirums were out of town and without Peterson's knowledge and consent, and with knowledge of the Wirums' action to enforce the October agreement, but claims that extenuating circumstances justified the move. Upon learning of the transfer of partnership funds, Peterson filed a cross-claim against Hickel, alleging violations of fiduciary duty and of the partnership agreement, and requesting preliminary and permanent injunctive relief against further unilateral withdrawals by Hickel as well as immediate return of the $300,000. Peterson's motion for a preliminary injunction was denied.

VHCC in the meantime filed suit against PTA seeking foreclosure on its lien in the amount of the $1,300,000 debt to VHCC less the $300,000 already transferred by Hickel. VHCC, Hickel, and Palmer then filed a complaint against PTA and the other partners individually, seeking damages, accounting, and dissolution of PTA. Both these suits were joined with the original Wirum action.

In granting the Wirums' motion for summary judgment on February 15, 1979, the superior court ordered all the partners to cooperate in obtaining a loan for $650,000 on the best terms available. Peterson then moved for reconsideration of the judgment on February 22, 1979. However, two days later Peterson, apparently without informing her attorneys, and the other partners signed a loan commitment with Seafirst Mortgage Company for $650,000. Thereafter, Peterson moved for vacation of the summary judgment, and for the entry of judgment dismissing the entire consolidated case with prejudice, on the basis of a clause in the Seafirst loan commitment which conditioned the loan on:

Release with prejuduce (of) any and all claims between the partners arising from the litigation filed in Superior Court of Alaska, Third Judicial District, Cause No. 78-5713 and related lawsuits.

Judgment in accordance with the February 15 summary judgment order was entered on April 6, 1979. The Wirums then opposed Peterson's motion to vacate and moved to amend the April 6 judgment to specifically order the partners to close the Seafirst loan. In this motion it was further requested that Peterson's cross-claim against Hickel for the $300,000 appropriation of partnership funds be dismissed with prejudice on grounds of mootness, and that VHCC's actions against PTA and the other partners be dismissed without prejudice. The superior court granted the Wirums' motion and entered an amended judgment.

Peterson's response was to file a notice of appeal to this court and a motion for a stay of judgment. The Wirums countered by moving under Civil Rule 70 for an order directing the clerk of the superior court to execute the Seafirst loan documents on behalf of Peterson. The superior court signed the Civil Rule 70 order, commenting that it was not requiring Peterson to do anything she had not previously agreed to do in writing. ³

I. Whether the superior court correctly disposed of the issue of the enforceability of the October 28 agreement by summary judgment.

Peterson's first contention in this appeal is that to reach the conclusion that the October 28 agreement was enforceable, despite the failure to obtain the loan from Pacific Mutual, the superior court must have determined that the parties considered the source of the loan to be immaterial. Peterson argues that this reasoning required the superior court to consider and weigh extrinsic evidence regarding the intent of the parties, and thus that summary judgment in favor of the Wirums was inappropriate under Civil Rule 56. ⁴

Peterson is correct in asserting that summary judgment is inappropriate when the affidavits and other evidence before the trial court establish that a factual dispute exists as to the expressed intent of the parties. Kincaid v. Kingham, 559 P.2d 1044, 1047 (Alaska 1977); Smalley v. Juneau Clinic Building Corp., 493 P.2d 1296, 1305 (Alaska 1972). But in the present case, the evidence before the superior court at the time of the cross-motions for summary judgment did not indicate any dispute as to the material facts pertaining to the intent of the parties. In such circumstances, summary judgment is appropriate. Alaska R.Civ.P. 56(c); Wilcox Associates v. Fairbanks North Star Borough, 603 P.2d 903, 906 (Alaska 1980). ⁵ 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. ⁶ Rather, the court must look to express manifestations of each party's understanding of the contract in attempting to give effect to the intent behind the agreement. ⁷

The contract clause in question appears on a page of the agreement which tabulates the financial interests of the various partners in chart form. This chart lists $650,000 as a deduction from the Hickel/Palmer share, with the notation that that amount was "to be paid to Hickel/Palmer upon receipt of financing from Pacific Mutual."

The extrinsic evidence submitted to the court included two letters written by Mary Wirum. One, dated the same day as the agreement, was sent to PTA's tax accountants for use in keeping the partnership books. It states in pertinent part:

The agreement is based on the assumption that we will receive from Pacific Mutual an increase of $650,000.00 in the existing first deed of trust. We expect their final approval of this amount by the end of next week. If the increase is not approved (and at this point we feel rather confident that it will be), we'll have to face that problem with some other solution.

The other letter was sent to Peterson on November 21, 1978, after Pacific Mutual denied the loan, and largely concerned Hickel's intent to sell his partnership interest. This letter referred to disbursements of PTA funds to the partners "in accordance with the October 28 agreement," but Wirum observed that she anticipated that Hickel "will object that all monies did not go to him since the Pacific Mutual thing fell through." The letter went on to state:

According to that 10/28 agreement, which I suppose isn't worth much now since the $650,000.00 wasn't received from Pacific Mutual, Vern was owed $280,000.00 k $732,835.17 k $650,000.00 from the partnership = $1,662,835.17 total. ( ⁸ )

In our opinion, the admissible extrinsic evidence cited by the parties thus reveals no dispute over any material issue of fact pertinent to discerning the intent of the parties in executing the October agreement. Therefore the superior court did not err in disposing of the dispute by way of summary judgment.

II. Whether the superior court erred in granting the Wirums' cross-motion for...