Opinion ID: 1368807
Heading Depth: 2
Heading Rank: 3

Heading: did the superior court err in granting summary judgment against merdes?

Text: Merdes contends that the superior court erred in entering summary judgment against him and that neither equitable estoppel nor quasi-estoppel provides a basis for its decision. 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 Airlines, 699 P.2d 1274, 1280 (Alaska 1985) (quoting Brock v. Alaska Int'l Indus., 645 P.2d 188, 190 n. 6 (Alaska 1982)). All reasonable inferences of fact from proffered materials must be drawn against the moving party, and in favor of the non-moving party. 699 P.2d at 1280. The party seeking summary judgment has the burden of proving that his opponent's case has no merit. Riley v. Northern Commercial Co., 648 P.2d 961, 966 (Alaska 1982). Where there is a factual dispute, the non-moving party's version of the facts is assumed correct. MatSu/Blackard/Stephan & Sons v. State, 647 P.2d 1101, 1102 n. 1 (Alaska 1982) (citing B-E-C-K Constructors v. State, 604 P.2d 578, 581 n. 4 (Alaska 1979)). [2] Merdes contends that statements contained in tax returns are not binding admissions, and that their accountants' tax strategy was known to Underwood and reflected at most a pragmatic way of reporting taxes. He further argues that the evidence offered showed no agreement on his part to pay interest, and that estoppel is not applicable because Underwood was not misled by the tax strategy. Underwood replies that the uncontroverted facts support the superior court's summary judgment ruling under a quasi-estoppel theory. He contends that it is unconscionable for Merdes now to assert that he did not agree to repay the Alaska Feed debt at simple 12% interest, because of Merdes' January 29, 1980 letter, his (Underwood's) forbearance from litigation and consequent deterioration of evidence, the preparation of the amortization table, Merdes' treatment of his payments for tax reporting purposes, Merdes' position that he made interest payments in the context of the tax audit, and Underwood's forbearance on his claim for compound interest. The elements of equitable estoppel are the assertion of a position by conduct or words, reasonable reliance thereon by another party, and resulting prejudice. Jamison v. Consolidated Utils., 576 P.2d 97, 102 (Alaska 1978). The core of the doctrine of quasi-estoppel is the existence of facts and circumstances making the previous assertion of a position inconsistent with the one now taken unconscionable. Id. at 102. We conclude that genuine issues of material fact exist as to whether the elements of equitable estoppel or quasi-estoppel have been met here, and therefore hold that the superior court erred in granting summary judgment against Merdes on estoppel grounds. Viewing the evidence in the light most favorable to Merdes, we are of the opinion that genuine issues of fact remain concerning whether Underwood reasonably relied on and was thereby prejudiced by any representations on Merdes' part. [3] There is no indication in the record that Merdes represented to Underwood that he would repay the Alaska Feed debt at 12% simple interest. His correspondence to Underwood's attorney indicates disagreement on a specific interest term. Both of Merdes' accountants testified that they did not know whether there was a specific agreement to pay interest on the debt. As previously noted, Merdes wrote to Underwood's counsel indicating his acceptance of the settlement terms providing however, that interest on the judgment against the company is at the statutory legal rate. Absent uncontroverted evidence of a representation by Merdes to Underwood that he agreed to pay the debt at 12% simple interest, there remains a genuine issue of fact as to whether Underwood reasonably relied upon Merdes' representations to the IRS. Prejudice or injustice cannot be established unless Underwood was misled. [4] As to the application of the doctrine of quasi-estoppel here, we are of the further view that the presence of genuine issues of material fact precluded the superior court from grounding its result on this theory. As we stated in part in Jamison: Among the many considerations which may indicate that an inconsistent statement is unconscionable and the doctrine of quasi-estoppel should be applied are whether the party asserting the inconsistent position has gained an advantage or produced some disadvantage through the first position; the magnitude of the inconsistency; [and] whether the inconsistency was relied on by the party claiming estoppel to his detriment... . 576 P.2d at 102. Again, we find it significant that there has been no uncontroverted showing that an agreement to pay 12% interest on the OHM debt existed or that Underwood had been misled or relied on Merdes' representations to the IRS. While Underwood may have had knowledge of the 12% interest representation to the IRS, evidence also indicates that he may have known that this was not a complete representation as to an interest agreement on the Alaska Feed debt and therefore, may not have been disadvantaged by it. Further, the record indicates that Merdes could have deducted the debt payment as either principal or interest, and thus there has been no conclusive showing that Merdes gained any advantage by his assertion. Thus, tax simplification is a plausible and not unconscionable reason for the possible inconsistency of Merdes' representation to the IRS.