Opinion ID: 2538455
Heading Depth: 3
Heading Rank: 1

Heading: The Superior Court Erred in Granting Seuffert Summary Judgment on the Issue of the Equipment and Facilities in the Old Town.

Text: Seuffert's summary judgment motion argued that K & K was not entitled to the Old Town or its contents under its agreement with AGC or, alternatively, that K & K and Seuffert had reached an accord and satisfaction at the injunction hearing whereby K & K released its claim concerning the Old Town and its contents. K & K's summary judgment contended that the contract encompassed all equipment and facilities associated with the operation of the dredge, regardless of where located on AGC's Chicken claims. The superior court granted Seuffert's motion and denied K & K's, but it is unclear if the court based this decision on contract interpretation or on the accord and satisfaction argument. Because genuine issues of material fact exist, we reverse the grant of summary judgment to Seuffert.
We review orders granting or denying summary judgment de novo. [3] Drawing all reasonable inferences in favor of the nonmoving party, we will uphold summary judgment if no genuine issue of material fact exists and the moving party is entitled to judgment as a matter of law. [4] In particular, a grant of summary judgment based upon contract interpretation is subject to de novo review because interpretation of contract language is a question of law. [5] The intent of the parties when entering a contract is a question of fact and is thus reviewed under the clearly erroneous standard; summary judgment is improper when the evidence before the superior court establishes a factual dispute as to the intent of the contracting parties. [6] 2. Contract interpretation could not support a grant of summary judgment to Seuffert or K & K as to personal property and equipment in the Old Town of Chicken, but the buildings in the Old Town were not included in the contract. Seuffert maintains that under K & K's contract with AGC to remove the dredge, K & K was only entitled to attached equipment and related facilities located on # 5 Below Discovery. K & K counters that the contract includes facilities associated with the operation of the dredge in the Old Town and implies that this includes the buildings in the Old Town. In determining a contract's meaning, [t]he parties' expectations must be gleaned not only from the contract language, but also from extrinsic evidence. [7] The words of the contract are nevertheless the most important evidence of intention. [8] The plain language of the contract states: AGC agrees ... to sell to K & K all of its right, title and interest in and to gold dredge # 4 (the Dredge), together with all attached equipment and related facilities, located on the # 5 Below Discovery placer mining claim in the vicinity of Chicken, Alaska ... for the sum of One Dollar ($1.00) and other considerations. K & K focuses on the phrase together with all attached equipment and related facilities and argues that while the contract uses the mining claim to identify the location of the dredge, K & K is entitled to any equipment or facilities related to that dredge regardless of location. Indeed, Seuffert conceded at oral argument that dredge parts could be in the Old Town and that a factual issue exists as to whether K & K and AGC intended those items to be part of the sale. It seems unlikely looking at the contract language that the Old Town itself was included. But Eagan, AGC's Fairbanks agent who was consulted on the contract's wording, testified by affidavit that he advised AGC that the related facilities language essentially encompass[ed] everything on the Chicken claims except for the claims themselves. Clearly every building and all facilities, and all of the equipment on the Chicken claims were there for purposes of supporting the dredging operation, and related directly to the dredging operation. When that language remained in the contract, Eagan concluded that AGC intended the contract to include not only the dredge but also all equipment and facilities in the pipe yard and the Old Town. Eagan however did not testify that he conveyed his understanding of the meaning of the related facilities language to Karl before or contemporaneously with the making of the agreement. Gary Barker, AGC's president who had knowledge of the contract as Watson's supervisor, similarly stated in an affidavit that K & K was entitled to remove the dredge from # 5 Below Discovery and to remove dredge parts from any other area. He maintained, however, that he would not have allowed K & K to remove buildings or other items, except for dredge parts, from the Old Town without a separate contract and further payment. The affidavits of Eagan and Barker, both of whom were AGC agents at the time, confirm that the contract was meant to include dredge parts wherever they may be located, including in the Old Town, and create a genuine issue of material fact as to whether the contract encompasses other related facilities in the Old Town. But conduct and admissions of K & K preclude the inclusion of the buildings in the Old Town as related facilities. When the agreement reflected in the proceedings of September 21, 1998 was negotiated, Karl was aware of the existence of the Old Town yet made no claim to the buildings that are there. In his letter of September 10, 1998, Joseph Sheehan, attorney for K & K, discusses the remaining disagreement over attached equipment and related facilities. He states in part that I am further informed that the equipment and related facilities are unique to this dredge and would only fit this dredge. These items should be fairly easy to identify. This description of equipment and related facilities plainly excludes the Old Town buildings. Moreover, sometime before October 16, 1998, Karl walked through the Old Town and identified equipment he thought was associated with the dredge. Richard Haggart, attorney for Seuffert, faxed Sheehan a letter suggesting that now that the dredge was moved as well as all of the materials identified in court, a stipulation dismissing the case would be appropriate. Sheehan faxed back on October 16 as follows: In response to your October 15, 1998, correspondence, you are correct, the Dredge move has been completed. As of yet, not all of the equipment and related facilities have been moved. I cannot give you a list of items left to be moved, however, I am told that there are a number of items, some of which are in the warehouse, blacksmith shop, machine shop, and parts in the vicinity of these buildings. K & K has not moved any of these items, because Mr. Seuffert was not available when K & K was ready to make the move. K & K has since demobilized for the winter. K & K will complete the movement of the remaining equipment and related facilities as soon as the spring weather permits. K & K is not prepared to dismiss the pending litigation until all of the property is moved. I will be filing a status report with the court advising my understanding of where we are. (Emphasis added.) The language of this letter makes it clear that what is in dispute are the items contained within and in the vicinity of these buildings, not the buildings themselves. An affidavit signed by Bernie Karl, president of K & K, dated October 30, 1998, also makes clear that what is in dispute is a substantial amount of equipment and related facilities located in the warehouse, blacksmith shop, machine shop, and in the vicinity of these buildings not the buildings themselves. Karl continues in his affidavit: Previously, when I had discussions with Mr. Seuffert concerning the equipment and related facilities, no mention was made of the items in the warehouse, blacksmith shop, machine shop, and the vicinity of these buildings. I do not know if Mr. Seuffert is aware of what is in these buildings, or whether he is aware that these items are only usable with the dredge owned by K & K. On November 9, 1998, Haggart on behalf of Seuffert again inquired of K & K's counsel as to what K & K was now claiming with respect to `related equipment and facilities': I have reviewed the tape of proceedings before Judge Funk on September 21, 1998, and it appears quite clear that the parties placed a settlement on the record stating that all issues relating to identification and division of the related equipment and facilities had been resolved. It now appears that K & K is taking the position that additional material is due them under the contract, which would be a change from what was stated in court. This does not seem appropriate given the fact that K & K presumably had ample opportunity to inspect the property it was buying at the time it negotiated the sale with AGC, it had an opportunity to identify all property claimed prior to the court hearing of September 21st, and the settlement placed on the record in open court clearly specified that the issue had been entirely resolved between the parties. If we are talking a matter of a few feet of pipe, then obviously Mr. Seuffert is not interested in returning the matter to full scale litigation. If K & K's claims are more extensive, please provide a specification of exactly what is claimed, and why K & K, at this late date, believes it is entitled to set aside the previous settlement agreement. Sheehan responded in part: Mr. Karl did not mention the equipment located in the warehouse, blacksmith shop, machine shop, and in the vicinity of those buildings because he was unaware of what was in these buildings. Mr. Seuffert represented that there was no other equipment and related facilities, other than what was in plain view. As far as an inventory, I do not have one. Perhaps the best way to address this problem is have Seuffert and Karl coordinate a time to meet in Chicken to review and inventory the property. We are open to a suggested date this winter or early spring. Let me know how you want to proceed. (Emphasis added.) Again, in specific response to Seuffert's counsel's request to identify what K & K was claiming as related equipment and facilities, Sheehan responded that equipment in the buildings was included, and did not list the buildings themselves. On December 1 Sheehan tentatively suggested that the inspection and inventory take place on April 1, 1999. The meeting did not take place then. But on April 28, 1999, Sheehan wrote Haggart proposing a meeting on May 9 or May 10 [w]ith respect[ ] to the remaining personal property.... By referring to the outstanding dispute as one concerning remaining personal property the claim clearly excluded the Old Town buildings. Similarly, Karl in his affidavit of October 30, 1998, refers to the items that he was still due under the AGC agreement as personal property: When I returned in September to move the dredge, it had been broken into and some items of personal property had been removed. I found most of these items of personal property in the dredge warehouse. I do not know who is responsible for this conduct, however, I do know that these items along with a number of other items in the buildings which I have identified, belong to the dredge and can only be used in conjunction with the particular dredge. Other items are associated with the dredge in that they are used as support equipment. By the time I discovered these other items of personal property Mr. Seuffert was gone, K & K was already in the process of demobilizing, and winter was setting in. For these reasons I did not move any of these items. My intent is to return in the spring, soon after breakup, to retrieve these items. (Emphasis added.) In view of the above, there can be no genuine issue of material fact but that related facilities as used in the contract was a reference to personal property and did not include the buildings in Old Town. Because genuine issues of material fact exist as to which items in the Old Town count as equipment and related facilities, we conclude that contract interpretation could not support a grant of summary judgment to any of the parties on this issue with respect to personal property. However, conduct and admissions of K & K make clear that the buildings in Old Town were not included in K & K's contract with AGC.