Opinion ID: 1449762
Heading Depth: 2
Heading Rank: 3

Heading: Is Article 6 Applicable by Estoppel?

Text: Matanuska Maid's alternative argument is that even if article 6 is inapplicable to the sale of a restaurant, the article is applicable by estoppel because ABM's notice to creditors expressly stated that the sale was being conducted in accordance with the Alaska Statutes governing Bulk Sales. Matanuska Maid contends that ABM may not now deny that Article 6 governs the transaction and that Matanuska Maid was entitled to payment from the escrow funds held by ABM. In Jamison v. Consolidated Utilities, Inc., 576 P.2d 97 (Alaska 1978), we explained that [t]he general elements required for the application of the doctrine of equitable estoppel are the assertion of a position by conduct or word, reasonable reliance thereon by another party, and resulting prejudice. Id. at 102 (footnote omitted). In our view, the record is devoid of evidence that Matanuska Maid relied upon ABM's notice to creditors, or that Matanuska Maid will be prejudiced unjustly should the requirements of Article 6 not be applied in this case. Therefore, we reverse the superior court's ruling that Article 6 is applicable by estoppel. Our conclusion rests in part on a review of the evidence adduced at trial. Matanuska Maid received ABM's notice to creditors on January 29, 1979. The notice instructed creditors to send their bills to ABM and informed creditors that the closing would take place sometime between February 5 and 28. Moses Lacson, Matanuska Maid's controller, testified that upon receiving ABM's notice he instructed an employee in charge of billings to send a statement to ABM as well as to the A & W. He further stated that he was certain that Matanuska Maid had sent a copy of the bill to ABM because the employee charged with that task was an efficient, reliable employee. [13] The only proof offered that Matanuska Maid had sent a bill to ABM was a copy of a statement dated March 31, 1979, which was addressed not to ABM but to the A & W restaurant. [14] The district court found that Matanuska Maid did not send any bill to ABM until late June, after Lacson called ABM to ask when payment would be forthcoming. This finding has not been challenged and in any event is supported by the record. The uncontradicted testimony of the ABM employee who handled the escrow of the restaurant, Beth Hafkey, was that ABM received no word from Matanuska Maid until late June, when Lacson called her to inquire when Matanuska Maid would be paid. When asked by the court why he waited five months to look into the status of Matanuska Maid's bill, Lacson replied that he had made no earlier inquiry because the amount involved was not large enough. [15] In short, the record establishes not that Matanuska Maid relied on ABM's notice and therefore looked solely to ABM for payment of its bill, but rather that Matanuska Maid did nothing in response to ABM's notice because the amount involved was insignificant. Finally, there is no evidence that Matanuska Maid will be prejudiced if Article 6 is not applied by estoppel. Of course, Matanuska Maid will not be able to collect its bill from ABM, but absent Article 6 it had no right to demand payment from the proceeds of the sale to begin with. Thus, Matanuska Maid is in no worse a position than it would have been in had ABM not represented that the sale of the restaurant was being conducted in accordance with Article 6. Its recourse, as before, is against the persons to whom it extended credit. Thus, we conclude that the superior court erred in reversing the district court's judgment and in ruling that ABM was estopped to deny the applicability of Article 6. [16] REVERSED and REMANDED with instructions to affirm the district court's judgment.