Wassink v. Hawkins, S-2398

Decision Date04 November 1988
Docket NumberNo. S-2398,S-2398
PartiesHarry WASSINK and Consuelo Wassink, Appellants, v. Tom HAWKINS, Director, Division of Land and Water Management, Alaska Department of Natural Resources, Elvin E. Johnson, Stephen & Sons, Inc., and the Agricultural Revolving Loan Fund, Appellees.
CourtAlaska Supreme Court

J. Jeffrey Mayhook, Hedland, Fleischer, Friedman, Brennan & Cooke, Anchorage, for appellants.

Lance B. Nelson, Asst. Atty. Gen., Anchorage, and Grace Berg Schaible, Atty. Gen., Juneau, for appellees.

Before MATTHEWS, C.J., and RABINOWITZ, BURKE, COMPTON and MOORE, JJ.

OPINION

COMPTON, Justice.

This case arises from an attempt by the Division of Land and Water Management, Alaska Department of Natural Resources to terminate a land sale contract regarding a Point Mackenzie dairy farm. The purchasers under the contract, Harry and Consuelo Wassink, entered into a stipulation with the state to waive all defenses to a breach of contract action previously filed against them by the state in exchange for a one-year extension of the date of performance. The Wassinks failed to meet the extended deadline, and the state attempted to enter judgment and take back the land. Before the trial court, the Wassinks raised several grounds as to why the stipulation should not be enforced. The trial court held for the state on all grounds. The Wassinks appeal.

I. FACTUAL AND PROCEDURAL BACKGROUND

On September 11, 1982, the state held a lottery for the disposal of dairy parcels at Point Mackenzie. Melody Wassink, the daughter of Harry and Consuelo Wassink, was the winner of Tract 8, a 474.22 acre parcel. She signed a contract with the state for the purchase of the parcel in the fall of 1982.

The contract provided in part:

Farm Development Schedule. The Purchaser must comply with the following schedule of development:

....

By September 11, 1985 the Parcel must be stocked with at least 46 cows. By that date the cows must be regularly milked on the Parcel in a Grade A facility.

Melody proceeded to prepare a farm conservation plan and submit loan applications to the state's Agricultural Revolving Loan Fund (ARLF). She entered into a $119,421 clearing loan with the ARLF in December 1982.

In November 1984 Melody assigned her interest in the parcel to her parents. The Wassinks assumed Melody's land clearing loan in December 1984. In April 1985 the state approved the Wassinks' modified farm conservation plan. By September 1985 the Wassinks had planted 265 acres. Unfortunately the Wassinks failed to meet the September 1985 deadline of regularly milking in a grade A barn.

In November 1985 the Wassinks were notified of their breach of the land sale contract. The Wassinks failed to cure the breach and in December 1985 the director of the Division of Land and Water Management sought to terminate the Wassinks' contract for failure to comply with the September 1985 deadline. In the course of the litigation, the state proposed the stipulation which is the subject of this appeal. In part, the stipulation provides:

2. If, on or before October 1, 1986, the Wassinks have remedied the breaches and deficiencies outlined in the Complaint, the plaintiff agrees that he will stipulate to a dismissal of this lawsuit, with prejudice.

3. If the Wassinks have not strictly and completely remedied all the breaches and deficiencies by October 1, 1986, they agree to waive any and all defenses to this action, whether legal or equitable, by statute or by contract, including, but not limited to, defenses based on the Wassinks' "substantial compliance" with the terms of the contract, defenses based on any action or inaction of the Agricultural Revolving Loan Fund, including any commitment to lend or disburse monies, and defenses arising out of the burning of or inability to burn berm piles.

....

5. This stipulation does not in any way bind or affect the Agricultural Revolving Loan Fund. In particular, this stipulation should not be viewed as a guarantee or commitment to lend or disburse monies under any prior loan transactions between defendants Harry and Consuelo Wassink and the Agricultural Revolving Loan Fund, or as a waiver of any defaults under any loan documents between defendants Harry and Consuelo and the Agricultural Revolving Loan Fund.

The Wassinks, through their counsel, signed the stipulation in February 1986.

In a letter to the Wassinks dated August 25, 1986, Bill Heim, then the Director of the Division of Agriculture, purportedly altered- the conditions in the stipulation. The letter read in part:

It has been the policy of ARLF to not have livestock in Alaska before the buildings are ready to shelter them. In the past ARLF has experienced some real disasters by not following this policy. In your case, because of your milking deadline it puts you in a real tight squeeze. Your stipulation requires that cows be milked in your barn on October 1st. I can, and will, give you some leeway on what must be done on this date. One, your barn must be completed, but I can give you a 30 day extension (November 1) that the cows need to be milking. With the schedule as tight as yours this is entirely reasonable. This will give you 30 days more before you must ship your cows.

On October 3, 1986, a team from the Divisions of Agriculture, Land and Water Management and Department of Law conducted a Point Mackenzie compliance inspection trip. Their report indicated that "the Wassinks are in the process of constructing 2 barns. Neither barn is complete. The milking parlor is about 1 week away from completion. The foreman feels that they could be milking in about 2 weeks."

According to Wassink, sometime after this inspection trip, the State Attorney General's office repudiated the altered conditions contained in the Heim letter. The state acknowledged the repudiation but did not provide a date for it.

Because the Wassinks failed to meet the 1985 requirements by October 1, 1986, in March 1987 the state moved for entry of judgment pursuant to the stipulation. As of that date the Wassinks still had not met the contract requirements. Wassink explained that "[o]nce the state repudiated the Bill Heim extension as well as refused to turn over the already-approved cow loan, the Wassinks were forced to miss the extended deadline. They might have fully completed the barn, but saw no purpose in doing so with the state poised to take it away."

By agreement of the parties the state's motion was treated as one for summary judgment. The Wassinks argued that the stipulation should be unenforceable on grounds of economic duress, equitable estoppel, the state's unclean hands, frustrated performance, substantial compliance and the state's modification and waiver of the stipulation.

The state argued that the sole issue was whether there was strict compliance by October 1, 1986. The state argued waiver of "any and all defenses" means just that, and is not limited to defenses which arose prior to the stipulation.

The superior court, without opinion, granted summary judgment in the state's favor. The Wassinks appeal.

II. STANDARD OF REVIEW

When reviewing a grant of summary judgment this court must determine whether there was a genuine issue of material fact and whether the moving party was entitled to judgment on the law applicable to the established facts. Zeman v. Lufthansa German Air Lines, 699 P.2d 1274, 1280 (Alaska 1985). The party moving for summary judgment has the burden of proving an absence of issues of material fact. McGee Steel Co. v. State, 723 P.2d 611, 615 (Alaska 1986). The party opposing summary judgment is not required to show it will prevail at trial. But if the movant establishes prima facie that it is entitled to judgment as a matter of law, the party opposing summary judgment must demonstrate that there exists a genuine issue of material fact to be litigated. Champion Oil Co. v. Herbert, 578 P.2d 961, 963 (Alaska 1978), cert. denied, 439 U.S. 980, 99 S.Ct. 565, 58 L.Ed.2d 650 (1979).

III. DISCUSSION

We begin by considering the question of whether the stipulation is enforceable against the Wassinks, who make several arguments against its enforceability.

First, the Wassinks argue that they were under economic duress when they signed the stipulation. We have set forth the test for economic duress as follows:

[economic] duress exists where: (1) one party involuntarily accepted the terms of another, (2) circumstances permitted no other alternative, and (3) such circumstances were the result of coercive acts of the other party.

Totem Marine Tug & Barge v. Alyeska Pipeline Serv. Co., 584 P.2d 15, 21 (Alaska 1978). The Wassinks argue that they had no reasonable alternative to the stipulation because they were in strained financial circumstances. In Totem we explained that, under the third element of the test, the strained circumstances must have been a result of the other party's "wrongful acts or threats." Id. at 22.

According to the Wassinks, the state acted wrongfully in singling them out for foreclosure. However, the evidence the Wassinks offered in ...

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1 cases
  • Hudkins v. Public Retirement Bd.
    • United States
    • Supreme Court of West Virginia
    • June 13, 2007
    ...party suffers resulting prejudice; and (4) the estoppel serves the interest of justice so as to limit public injury. Wassink v. Hawkins, 763 P.2d 971, 975 (Alaska 1988). Crum, 936 P.2d at 1256. In Crum the Alaska Supreme Court held that the four elements of Wassink were This Court held in S......

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