Opinion ID: 1184357
Heading Depth: 4
Heading Rank: 1

Heading: Appellant's breach

Text: Construction of the swimming pool. The record discloses that construction of the swimming pool was completed by the date of closing. The pool was then open for swimming and adequate for its purpose as a fire protection reservoir. Nevertheless, it was apparent at the pool's earliest use that it had serious structural defects. These prevented swimming for more than one hundred fifty days from June, 1970, to the spring of 1971. [1] Repair required pouring an entire new floor secured with rods to the original walls. Given evidence of construction so defective from the outset that the structure was unsuited to one of its intended uses for a lengthy period, the superior court made no clear error in finding that substantial completion of the pool did not occur until repairs had been made in the spring of 1971. Payment of overdue interest. We are also satisfied that the superior court was correct in determining that Ficke did not pay overdue interest as he had agreed. Under the contract Ficke was to pay all interest on the hotel loans up to May 23, 1970, with the appellees responsible for interest accruing thereafter. Ficke never made this payment. On September 18, 1970, after the date for closing had passed, the appellees paid interest overdue from November, 1969, in order to keep the bank from foreclosing on the property and to promote refinancing in their attempt to perform. Ficke did not object to this payment, nor did he allocate any of the funds he later paid to the bank as interest for the period preceding May, 1970. Tender of inventory. We are also unable to find error in the superior court's determination that Ficke breached a promise to tender an inventory of the purchased properties. Ficke concedes that no inventory was provided but contends that under the agreement one had not been promised. During examination of one of the appellees' negotiators in the sale, there was testimony that the desire for an inventory was raised before Ficke and two of his attorneys and that one of his representatives promised that an inventory would be attached to the bill of sale. The only rebuttal to this testimony was Ficke's statement that no inventory was delivered because he didn't know it was his responsibility. An attorney retained to negotiate the terms of an agreement binds his client to promises made within the scope of that authority. Robertson v. Carvey, 9 Alaska 488, 498 (1939). The promise here was made by Ficke's principal representative. An inventory was incidental to the subject matter of the sale and therefore was within the scope of his attorney's authority. Consequently, the promise to provide an inventory binds his client. With directly conflicting evidence, we are unable to say that the superior court committed error in finding that delivery of an inventory became a part of the bargain but that tender never occurred. Tender of marketable title. However, we conclude that it was a clear error for the superior court to find that Ficke did not escrow a marketable title to the property. The land which Ficke was obligated to convey under the June agreement was part fee land and part land leased from the state by Alyeska and assigned to Ficke. He agreed to assign his interest in the leased land to Resort. However, the prior assignment of the lease to him from Alyeska had never been recorded and was not among the exceptions to the title report enumerated in the June agreement as acceptable to the appellees. Existence of the assignment was discovered from court records in the course of a title search by the appellees. Ficke's assignment would have transferred his entire interest to Resort free of any claim under the unrecorded lease, but the lease itself would have remained a blemish on the chain of title. The superior court's finding that title to the leased property was unmarketable was based upon this outstanding interest. Yet because Alyeska had been merged with Resort and Ficke was prepared to assign his entire interest to Resort, the unrecorded assignment from Alyeska to Ficke posed no real threat of a conflicting claim to the property. While there was testimony by a title examiner that the unrecorded lease would remain in the chain of title until a mutual termination was signed by Ficke and Alyeska or a quitclaim deed given back to Alyeska, the witness also stated that Ficke's promised assignment would give Resort a title free of any claims under the unrecorded lease. The meaning of marketable title is not determined by title examining practices; a marketable title is not a perfect one. The test is whether a conveyance carries with it a reasonable probability that the purchaser will be subjected to a lawsuit. 6 R. Powell, The Law of Real Property § 928, at 340 (1973). See, e.g., Brown v. Herman, 75 Wash.2d 816, 454 P.2d 212, 216-217 (1969). That Ficke's assignment from Alyeska would remain outstanding is only a technical defect which does not support a reasonable question of the validity of the appellees' prospective title. In sum, although it was a clear error to conclude that the title Ficke was prepared to tender was not marketable, there was adequate evidence to support the superior court's findings that Ficke breached the June agreement when he failed to complete construction of the hotel swimming pool by the day of closing, did not pay overdue interest on the hotel loans up to May, 1970, and did not provide an inventory of the personal property to be conveyed.