Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-akd-3_89-cv-00095/USCOURTS-akd-3_89-cv-00095-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

---

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ALASKA

In re: ) 

THE EXXON VALDEZ ) 

_______________________________________) 

) 

This document relates to: ) 

) No. 3:89-cv-0095-HRH

NAUTILUS MARINE ENTERPRISES, )

M. THOMAS WATERER, and the )

EXXON DEFENDANTS )

_______________________________________) 

O R D E R

Motion to Lift Stay and for Entry of Judgment

Exxon Mobil Corporation and Exxon Shipping Company (referred to collectively as

“Exxon” hereinafter) move1to lift the stay that was entered in this case in 2009 and for entry

of final judgment in favor of Nautilus Marine Enterprises in the amount of $2,245,622.87

less an offset of $496,724.26 for fees and costs awarded to Exxon in state court. This motion

is opposed in part and Nautilus Marine Enterprises and M. Thomas Waterer2(referred to

collectively as “NME” hereinafter) cross-move for entry of judgment in their favor in the

1Docket No. 9804. 

2Docket No. 9812. 

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Case 3:89-cv-00095-HRH Document 9843 Filed 11/28/16 Page 1 of 18
amount of either $8,537,834.23 or $7,044,360.28, with no offset.3 The cross-motion is

opposed.4 Oral argument was not requested and is not deemed necessary. 

Background

On or about September 29, 2006, Exxon, NME,5and Cook Inlet Processing (“CIP”)

entered into a settlement agreement, which resolved NME’s and CIP’s claims

6

against Exxon

for 1992 and 1993 damages arising out of the grounding of the Exxon Valdez. However, the

parties were not able to agree as to the amount of prejudgment interest that should be paid

on the principal amount of the settlement. Exxon contended that federal law controlled the

prejudgment interest question; NME and CIP contended that Alaska law controlled the

prejudgment interest question. The parties agreed that the prejudgment interest dispute

would be submitted to this court for resolution. 

On February20, 2007, NME and CIP filed motions on the prejudgment interest issue.7

After the briefing was completed on those motions, but before this court had ruled on the

3The cross-motion indicates that it is also being brought by Waterkist Corporation. 

However, Waterkist is not and never has been a party to this lawsuit. 

4Docket No. 9820. 

5Waterkist Corporation, although not a party to this action, was a party to the

Settlement Agreement. Settlement Agreement between Exxon and the Nautilus Marine and

Cook Inlet Processing at 4, ¶ 2.8, Exhibit 1, Affidavit of Dawn Sestito [etc.], Docket No.

9805. 

6NME’s and CIP’s claims were originally filed in state court but removed by Exxon

based on federal question jurisdiction. 

7Docket Nos. 8467 and 8468. 

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motions, the Ninth Circuit issued a decision in the Sea Hawk Seafoods case. See In re Exxon

Valdez, 484 F.3d 1098 (9th Cir. 2007). Sea Hawk was a fish processor which, like NME and

CIP, had pursued claims against Exxon arising out of the grounding of the Exxon Valdez. 

Sea Hawk and Exxon reached a settlement as to Sea Hawk’s claims but could not agree on

whether federal or state law should apply to the determination of prejudgment interest. This

court had ruled that federal law applied, but the Ninth Circuit reversed, holding that state law

governed prejudgment interest. 

After the Sea Hawk decision issued, this court called for supplemental briefing from

the parties.8 The parties agreed that pursuant to Sea Hawk, the Alaska prejudgment interest

rate of 10.5 percent should be applied to them. The parties also agreed that Alaska state law

provides that prejudgment interest should be simple interest, unless the parties had otherwise

agreed. Exxon contended that there was no agreement between the parties as to whether

prejudgment interest should be simple or compound. NME and CIP contended that the

parties had agreed that prejudgment interest would be compound no matter which rate

governed. 

In Order No. 370,9

 this court held that NME and CIP were “entitled to prejudgment

interest at a rate of 10.5% compounded annually.”10 In reaching this holding, the court

focused upon the structure and text of the parties’ integrated Settlement Agreement. The

8Docket No. 8502. 

9Docket No. 8616. 

10Id. at 15. 

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integrated Settlement Agreement included a proposed final judgment which provided for

compounded interest, regardless of what rate of interest applied. After observing that the

Settlement Agreement was silent about the compounding of interest issue, this court found

that it was “the unequivocal statement of the agreed judgment form that the prejudgment

interest should be compounded.”11

Exxon moved for reconsideration12 of Order No. 370 and for leave to file a

Supplemental Answer to NME’s complaint.13 Exxon sought to amend its answer to include

a claim for reformation of the Settlement Agreement. This court denied the motion for

reconsideration and the motion for leave to supplement.14

After Exxon’s motions for reconsideration and leave to supplement were denied, this

court entered a Final Judgment.15 On August 17, 2007, Exxon appealed Order No. 370 and

the Final Judgment.

On October 17, 2007, Exxon filed a complaint in state court which alleged a single

cause of action for reformation of the Settlement Agreement. On November 2, 2007, NME

and CIP removed the reformation case to this court pursuant to 28 U.S.C. § 1441. Exxon

moved to remand, arguing that there was no jurisdictional basis for removal. On April 22,

11Id. at 8. 

12Docket No. 8628. 

13Docket No. 8629. 

14Docket No. 8635. 

15Docket No. 8634. 

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2008, this court denied the motion to remand.16 NME and CIP then moved to dismiss

Exxon’s complaint. On November 18, 2008, this court granted the motion to dismiss,

holding that Exxon’s reformation claim was barred by res judicata,17 and a final judgment

dismissing the reformation case was entered.18

Exxon appealed. However, before the parties had begun briefing the appeal, on

March 10, 2009, the Ninth Circuit ruled on Exxon’s appeal of Order No. 370 and the Final

Judgment in the interpretation case. The Ninth Circuit held that this court “erred in failing

to consider extrinsic evidence regarding whether the parties agreed to compound interest.” 

In re Exxon Valdez, Case No. 07-35715, 2009 WL 605900, at *2 (9th Cir. March 10, 2009). 

The court of appeals also held that this court “did not abuse its discretion in denying leave

to supplement the answer to add a counterclaim for reformation.” Id. Thus, the court of

appeals reversed in part and remanded the interpretation case to this court. Upon remand,

this court vacated the Final Judgment, Order No. 370, and the portion of its July 23, 2007

order that addressed Exxon’s motion for reconsideration.19

16Docket No. 27 in Case No. 3:07-cv-0224-HRH. 

17Order re Motion to Dismiss at 20, Docket No. 53 in Case No. 3:07-cv-0224-HRH. 

18Docket No. 54 in Case No. 3:07-cv-0224-HRH. 

19Docket No. 9202. 

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Case 3:89-cv-00095-HRH Document 9843 Filed 11/28/16 Page 5 of 18
On May 14, 2009, the Ninth Circuit vacated the judgment in the reformation case

because it was based upon the Final Judgment in the interpretation case, which had been

reversed in part.20 The reformation case was remanded to this court for further proceedings. 

On June 5, 2009, Exxon filed a second complaint in Alaska state court seeking a

declaratory judgment interpreting the parties’ rights and obligations under the Settlement

Agreement, or, in the alternative, for reformation of the Settlement Agreement. NME and

CIP removed the 2009 case to this court.21 Exxon moved to remand both the original

reformation case and the 2009 case to state court.

22 The court granted both motions to

remand23 and stayed the interpretation case pending the outcome of the state court cases.24

The state court cases were consolidated and trial was scheduled for November 2010. 

Shortly before the trial, CIP and Exxon reached a settlement. 

NME and Exxon proceeded to trial. On March 17, 2011, the state court judge entered

Findings of Fact and Conclusions of Law.25 The state court judge 

[a]fter reviewing the written exchange of offers and counteroffers, the Letter Agreement, as well as the testimony of Mr.

20Docket No. 68 at 1 in Case No. 3:07-cv-0224-HRH. 

21Case No. 3:09-cv-0131-HRH. 

22Docket No. 69 in Case No. 3:07-cv-0224-HRH; Docket No. 8 in Case No. 3:09-cv0131-HRH. 

23Docket No. 77 in Case No. 3:07-cv-0224-HRH; Docket No. 14 in Case No. 3:09-cv0131-HRH. 

24Docket No. 9307. 

25Exhibit 3, Sestito Affidavit, Docket No. 9805. 

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Daum and Mr. Weidner [the two attorneys who negotiated the

Settlement Agreement], ... f[ound] there is no evidence that the

parties discussed and reached agreement that only compound

interest would apply regardless of whether state or federal law

controlled.[26]

In short, the state court judge concluded that “[a]ll of the extrinsic evidence demonstrates that

the parties never agreed that interest would be compounded” and “that the proposed

judgment ... was intended to provide a form of judgment that [this court] could use to

implement the parties’ agreement” but that “[t]he proposed judgment was not intended to

include or be an agreement to pay compound interest.”27 

Judgment was entered in the consolidated state court case in Exxon’s favor and Exxon

was awarded attorney’s fees. NME appealed the trial court’s conclusion that the parties had

not agreed that interest would be compound. On July 19, 2013, the Alaska Supreme Court

affirmed the trial court’s decision. Nautilus Marine Enterprises, Inc. v. Exxon Mobil Corp.,

305 P.3d 309, 312 (Alaska 2013). NME also appealed the award of attorney’s fees to Exxon. 

On August 22, 2014, the Alaska Supreme Court “reverse[ed] the awards of attorney fees and

costs and remand[ed] for a recalculation of the fees award based on local rates and for the

apportionment of fees and costs” but affirmed as to “all other issues.” Nautilus Marine

Enterprises, Inc. v. Exxon Mobil Corp., 332 P.3d 554, 565 (Alaska 2014). 

26Id. at 8, ¶ 33. 

27Id. at 25, ¶¶ 94-95. 

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After the attorney’s fees were re-calculated, on October 8, 2015, the state trial court

entered a second revised final judgment.28 The second revised final judgment provided: 

1. The September 2006 settlement between Exxon ... and

NME did not require Exxon to paycompound interest regardless

of the applicable law. The parties intended that Judge Holland

of the U.S. District Court determine both the correct rate of

interest and the method of computing that interest under federal

or state law. 

2. Plaintiff Exxon’s request for reformation is denied.

3. It is for Judge Holland to decide the appropriate law that

applies, the proper interest rate, and the method of calculating

that interest rate. 

4. Exxon is awarded attorneys’ fees in the amount of

$340,211, expert costs in the amount of $67,500 and costs

of $89,013.26 for a total award of $496,724.26.[29] 

The state court proceedings having been completed, Exxon now moves to lift the stay

of this case (the interpretation case) and for entry of judgment in NME’s favor. NME does

not oppose lifting the stay nor does NME oppose entry of judgment in its favor. However,

the parties disagree as to the amount of the judgment to be entered. 

Discussion

There being no disagreement between the parties, the stay is lifted. 

With the stay lifted, what remains is for the court to enter judgment. In order to enter

judgment, the court must determine the amount that is still owed to NME under the

Settlement Agreement. 

28Exhibit 4, Sestito Affidavit, Docket No. 9805. 

29Id. at 4. 

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Case 3:89-cv-00095-HRH Document 9843 Filed 11/28/16 Page 8 of 18
Under the Settlement Agreement, Exxon paid NME and CIP an initial settlement

amount of $8,500,000.30 This amount represented $824,601.09 for CIP’s 1992 and 1993

damages and $3,726,556.16 for NME’s 1992 and 1993 damages plus prejudgment interest

on both of those amounts calculated at the applicable federal rate.31 NME received $5

million of the initial settlement amount and CIP received $3.5 million.32 Exxon also agreed

to pay a Supplemental Settlement Amount, which would be “the amount, if any, that may

become payable pursuant to the provisions of paragraphs 3.1, 3.2 and/or 3.3” of the

Settlement Agreement.33

Paragraph 3.1 requires Exxon to pay the difference between prejudgment interest

calculated at the federal rate and prejudgment interest calculated at whatever rate the court

finds is the correct rate.34 There is now no dispute the correct rate of prejudgment interest

is the state rate of 10.5% simple. The parties agree that the difference between prejudgment

interest calculated at the federal rate up to November 1, 2006 and the state rate of 10.5%

simple is $3,470,716.32.35 

30Settlement Agreement between Exxon and the Nautilus Marine and Cook Inlet

Processing at 3, ¶ 2.6, Exhibit 1, Sestito Affidavit, Docket No. 9805. 

31Id. at 3-4. 

32Id. at 11, ¶ 5.1. 

33Id. at 5, ¶ 2.13. 

34Id. at 6, ¶ 3.1. 

35NME has transposed the 1 and 6 in its briefing, but there is no disagreement that this

(continued...)

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Case 3:89-cv-00095-HRH Document 9843 Filed 11/28/16 Page 9 of 18
The $3,470,716.32 number is based on the report of Exxon’s expert, Bruce Budge.

Budge reached this number by calculating prejudgment interest at a rate of 10.5% simple on

CIP’s and NME’s combined 1992 damages ($3,778.584.56) and on CIP’s and NME’s

combined 1993 damages ($2,862,112.94).36 Adding these two numbers together results in

the total prejudgment interest on CIP’s and NME’s 1992 and 1993 damages through

November 1, 2006, when calculated at 10.5% simple, being $6,640,697.50.37 In the initial

settlement amount, Exxon paid CIP and NME $3,169,981.19 in prejudgment interest.38 The

difference between $6,640,697.50 and $3,169,981.19 is $3,470,761.13. 

Despite the $3,470,761.13 being based on both CIP’s and NME’s 1992 and 1993

damages, NME argues that it is entitled to the entire $3,470,716.32. NME argues that

paragraph 3.1 is not ambiguous and that it does not provide for any allocation of any

additional prejudgment interest that might become payable. NME argues that if there were

confusion over how the additional prejudgment interest was to be paid, then Exxon should

35(...continued)

number is based on the expert report of Bruce P. Budge. Budge’s report calculated the

“additional prejudgment interest due using the method in the Settlement Agreement and a

rate of 10.5% simple interest [to] equal $3,470,716.31[.]” Expert Report of Bruce P. Budge

at 4, Exhibit 11, Declaration of Edward P. Weigelt, Jr., Docket No. 9813. Exxon has raised

a number of objections to the averments in Mr. Weigelt’s declaration, which is filled with

improper legal argument and improper opinions. However, Exxon raised no objections to

the exhibits attached to Mr. Weigelt’s declaration.

36Budge Expert Report at 3, Exhibit 11, Weigelt Declaration, Docket No. 9813. 

37Id.

38Id. at 4. 

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Case 3:89-cv-00095-HRH Document 9843 Filed 11/28/16 Page 10 of 18
have moved to reform paragraph 3.1, which it did not do. NME contends that Exxon has

never claimed that the language of paragraph 3.1 is vague or ambiguous. NME argues that

Exxon is relying on a subrogation theory to attempt to modify its obligations under the

Settlement Agreement and that such an attempt should fail. NME contends that Exxon’s

status in this case is that of a debtor which had an obligation to pay NME and CIP and thus

any monies that Exxon paid to CIP were in payment of Exxon’s own obligations to CIP and

not payments of NME debts.39 NME insists that any claim of allocation is between NME and

CIP, not NME and Exxon. NME insists that there is simply no contract provision that would

allow modification of Exxon’s liability under paragraph 3.1 due to a settlement with one

party to the Agreement. 

NME is not entitled to the entire $3,470,716.32. Paragraph 5.1 of the Settlement

Agreement provides that “[a]ny Supplemental Settlement Amount shall be paid pursuant to

further written instructions from Seafood Processors Counsel, Counsel for NMI, Tom

Waterer, and Mike Shupe [CIP’s president].”40 That both CIP and NME had to provide

payment instructions as to anySupplemental Settlement Amount is a clear indication that any

Supplemental Settlement Amount was to be allocated between CIP and NME.

39NME’s position that it is entitled to the entire $3,470,716.32 seems to be driven in

large part by the fact that it does not know the details of CIP’s settlement with Exxon. NME

repeatedly refers to this as a “secret” settlement. 

40Settlement Agreement between Exxon and the Nautilus Marine and Cook Inlet

Processing at 11, ¶ 5.1, Exhibit 1, Sestito Affidavit, Docket No. 9805. 

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The Settlement Agreement is silent, however, as to how such an allocation should be

made. When faced with such a situation, the Alaska Supreme Court looks to Section 204 of

the Restatement (Second) of Contracts. “Under section 204..., ‘[w]hen the parties to a

bargain sufficiently defined to be a contract have not agreed with respect to a term which is

essential to a determination of their rights and duties, a term which is reasonable in the

circumstances is supplied by the court.’” Disotell v. Stiltner, 100 P.3d 890, 896 (Alaska

2004).

Exxon argues that it would be reasonable for the court to apply the same allocation

formula the parties agreed to at the time of the settlement, which was that NME received

58.82% of the initial settlement amount and CIP received 41.18%. Under that allocation

scenario, NME would be entitled to recover $2,041,475.34 in additional prejudgment

interest. 

But, NME has offered evidence that the payment instructions for the initial settlement

amount were “based on other business relations between [CIP and NME], including loans

and joint fish processing agreements, and also a joint prosecution agreement which included

sharing the initial settlement proceeds”41and that “[t]he joint prosecution agreement and

sharing obligations between CIP and the other parties were terminated shortly after the

41Weigelt Declaration at 4, ¶ 6, Docket No. 9813. 

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settlement.”42 In light of this evidence, it would not be reasonable to allocate the Supplemental Settlement Amount based on how the initial settlement amount was allocated. 

It would, however, be reasonable to allocate the additional prejudgment interest based

on NME’s actual damages. During the negotiations that led to the Settlement Agreement,

the parties’ lawyers signed what became known as the “Letter Agreement” which “[t]hey

intended ... to ‘constitute an agreement’ to settle the case” and which the state court judge

found was “binding between NME and Exxon.”43 In the Letter Agreement, Exxon expressly

agree[d] to pay CIP ... $710,750.06 on account of damages

accrued in 1992 and NMI ... $1,797,859.50 on account of

damages accrued in 1992, and to pay CIP $113,851.03 on

account of damages accrued in 1993, and NMI $1,928,969.65 on

account of damages accrued in 1993, together with pre-judgment interest on those sums as provided by law[.

44

] 

In short, Exxon agreed to pay NME prejudgment interest on the damages that NME actually

incurred. Exxon’s expert has calculated that NME is entitled to $2,864,009.2445 in additional

prejudgment interest based on its 1992 and 1993 damages. Thus, the court finds that NME

is entitled to recover $2,864,009.24 of the $3,470,716.32 in additional prejudgment interest

that has become payable pursuant to paragraph 3.1 of the Settlement Agreement.

42Id.

43Findings of Fact and Conclusions of Law at 8, ¶ 31, Exhibit 3, Sestito Affidavit,

Docket No. 9805. 

44Letter Agreement at 1, Exhibit 3, Weigelt Declaration, Docket No. 9813 (emphasis

added). 

45Budge Report at 4, Exhibit 11, Weigelt Declaration, Docket No. 9813. 

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NME argues, however, that this is not the only amount that has become payable. 

NME argues that it is also entitled to interest from November 1, 2006 to the present on

whatever portion of the $3,470,716.32 is allocated to it. NME argues that the $3,470,716.32

represents the “balance” of NME’s economic damages arising from the oil spill and thus it

is entitled to prejudgment interest on these damages. NME contends that interest is a

consequential economic damage and that under the Settlement Agreement, Exxon still owes

NME its unpaid economic damages. NME argues that it is entitled to prejudgment interest

on its portion of the $3,470,716.32 in order to be made “whole”. NME points out that

prejudgment interest is intended to compensate for the “loss of use of money” that a plaintiff

“actually suffers ... between accrual of his claim and judgment[.]” State v. Phillips, 470 P.2d

266, 273 n.27 (Alaska 1970). Here, NME argues that it has lost the use of its portion of the 

$3,470,716.32 for almost ten years and thus it insists that it is entitled to prejudgment interest

on whatever additional prejudgment interest Exxon owes under paragraph 3.1. NME points

out that under Alaska law “[i]t is only when ... an award” of prejudgment interest “would do

an injustice that it should be denied” and that “[t]he only ground for denial [the Alaska

Supreme Court has] so far recognized has been double recovery.” Farnsworth v. Steiner, 638

P.2d 181, 184 (Alaska 1981). As the court in Farnsworth noted, “[t]he real question in

awarding interest to a judgment creditor is whether the debtor has had use of money for a

period of time when the creditor was actually entitled to it.” Id. Here, NME argues that there

can be no dispute that Exxon had the use of the $3,470,716.32 from November 1, 2006 until

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Case 3:89-cv-00095-HRH Document 9843 Filed 11/28/16 Page 14 of 18
now, a period of time during which NME was actually entitled to a portion of that money. 

NME contends that Exxon could have paid the additional money after the Sea Hawk decision

made it clear that state law would govern the interest issue and thus avoided having to pay

prejudgment interest from November 1, 2006 to the present, as Exxon’s counsel recommended.46 But because Exxon made a business decision to further delay payment and

continue to use the money until now, NME argues that Exxon must live with that choice now

and pay post-November 1, 2006 prejudgment interest. 

NME’s argument ignores the express terms of the Settlement Agreement. Paragraph

3.1 of the Settlement Agreement provides: 

The period for which interest shall be payable on the sum of

$2,508,609.56 shall commence on July 1, 1992, and continue

through November 1, 2006, or the date the Court enters judgment, whichever is earlier. The period for which interest shall

be payable on the sum of $2,042,547.68 shall commence on July

1, 1993, and continue through November 1, 2006, or the date on

which the Court enters judgment, whichever is earlier.[47] 

There is nothing ambiguous about this provision. It plainly provides that the accrual

of prejudgment interest stops on November 1, 2006. NME has long been aware that this is

what the Settlement Agreement provided. During oral argument before this court in July

2007, NME’s attorney, Mr. Weidner, stated that Exxon “bargained for and got an agreement

46SEALED Exhibit 15 at 3, Docket No. 9833. 

47Settlement Agreement between Exxon and the Nautilus Marine and Cook Inlet

Processing at 6, ¶ 3.1, Exhibit 1, Sestito Affidavit, Docket No. 9805. 

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that the interest would stop last November, that’s about seven months ago, because under

state law the interest goes all the way until the judgment.”48 Mr. Weidner further stated that 

we’re not asking for any more prejudgment interest than we

agreed to in the settlement. We’re not saying, hey, wait a

minute, go back and start the accrual a couple months extra or

it’s been seven months because we thought the judge was going

to rule by then, give us the seven months. A deal’s a deal and

we’re sticking with it.[49]

In addition, in the proposed final judgment that NME submitted to the court on July 20, 2007,

NME calculated prejudgment interest as accruing only through November 1, 2006.50

NME’s contention that the parties to the Settlement Agreement did not intend there to be a

“gap” period is unavailing. While the parties may not have foreseen that it would take almost

ten years to resolve their prejudgment interest dispute, the parties expressly agreed that

prejudgment interest would stop accruing on November 1, 2006. NME is not entitled to postNovember 1, 2006 prejudgment interest. 

As set out above, the Supplemental Settlement Amount is also to include any amounts

that became payable under paragraph 3.2, which governs the issue of attorney’s fees. The

parties agree that NME is entitled to attorney’s fees in the amount of 10% of whatever the

court ultimately decides NME is owed under paragraph 3.1. NME is entitled to

48Transcript of Oral Argument at 37:6-9, Exhibit 5, Sestito Affidavit, Docket No.

9805. 

49Id. at 41:14-18. 

50Exhibit A at 2, Notice of Filing Conforming Proposed Final Judgment Re: Order

Number. 370, Docket No. 8625. 

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$2,864,009.24 in additional interest pursuant to paragraph 3.1, which means that NME is

entitled to $286,400.92 in attorney’s fees pursuant to paragraph 3.2. 

Finally, Exxon argues that it is entitled to an off-set of $496,724.26 in fees and costs

awarded in the state court action plus post-judgment interest on that amount. NME, however,

argues that an off-set would not be appropriate because Exxon’s obligations are to Nautilus

Marine Enterprises, Mr. Waterer, and Waterkist Corporation but only Nautilus Marine

Enterprises owes Exxon money pursuant to the state court judgment. 

The court finds that an off-set would be appropriate here. Exxon has no obligation to

Waterkist Corporation because as noted above, Waterkist Corporation is not now and never

has been a party to this lawsuit. As for Mr. Waterer, Exxon has submitted evidence that Mr.

Waterer is the president and general manager of Nautilus Marine, that his job responsibilities

were “everything relating to the operations, financing and sales of the corporation”, that he

owns 100% of the shares of Nautilus Marine, that he and his wife are Nautilus Marine’s

officers and directors but that his wife is not very involved in the business, that he was

Nautilus Marine’s only live witness in the state court trial, that he attended seven depositions

that were taken in that matter, and that he telephonically attended four of the state court

hearings.51 Given this unrefuted evidence, the court finds that Mr. Waterer is in privity with

51Exhibits 7, 8, and 9, Sestito Reply Affidavit, Docket No. 9821; SEALED Exhibit 5,

Docket No. 9825. 

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Nautilus Marine such that an off-set would be appropriate even though Mr. Waterer was not

a party to the state court action. 

Conclusion

The motion to lift the stay and for entry of judgment is granted. Judgment shall be

entered in favor of Nautilus Marine Enterprises and M. Thomas Waterer in the amount of

$3,150,410.16 ($2,864,009.24 in additional prejudgment interest plus $286,400.92 in

attorney’s fees) with an off-set $496,724.26. 

DATED at Anchorage, Alaska, this 28th day of November, 2016. 

/s/ H. Russel Holland 

United States District Judge

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