Opinion ID: 1164418
Heading Depth: 2
Heading Rank: 2

Heading: Whether the superior court erred in granting the Wirums' cross-motion for summary judgment and denying Peterson's opposing motion for summary judgment.

Text: Peterson's primary argument in support of her contention that she is entitled to summary judgment is that the language of the October agreement is unambiguous in stating that the Pacific Mutual loan was a condition precedent to the enforcement of the agreement. She therefore claims that extrinsic evidence should not have been considered in construing this term of the contract. Since we have recently ruled that extrinsic evidence regarding the intent of the parties may be used to interpret a contract regardless of whether the contract appears to be ambiguous on its face or not, this argument must be rejected. See Wright v. Vickaryous, 598 P.2d 490, 497 n. 22 (Alaska 1979). [9] In a case where the extrinsic evidence is not in dispute, we are not limited to the clearly erroneous standard in our review of the superior court's decision to grant or deny summary judgment on the basis of its interpretation of a contract. In such cases, interpretation of the contract is treated in the same manner as a question of law. See Wessells v. State, Dep't of Highways, 562 P.2d 1042, 1046 n. 9 (Alaska 1977). Although we consider the question a close one, we have concluded that the superior court's grant of summary judgment to the Wirums and its denial of summary judgment to Peterson should be affirmed. The primary purposes of the October agreement seem clear from its content  to establish what PTA owed to each partner, provide for present repayment of a portion of the large debt owed to Hickel/Palmer, and to provide for future distribution of profits to each partner for the purpose of reducing the indebtness of PTA to each party. [10] As indicated previously the paramount legal question presented to the superior court for decision was whether the language upon receipt of financing from Pacific Mutual is a condition precedent. Peterson contends that the October 28, 1977, agreement was a compromise and that the obtaining of a loan on the very favorable terms offered by Pacific Mutual was a material term of the compromise. Peterson argues that the term in question is rendered superfluous if not construed as a condition precedent. [11] In further support of her position Peterson points to the two letters sent by Mary Wirum. In the first of those letters, Wirum stated to the PTA tax accountant that the October agreement was based on the assumption that the Pacific Mutual loan would be approved; she subsequently stated to Peterson that she supposed the agreement isn't worth much now since the loan was not received. Peterson also disputes the Wirums' contention that the source of the loan to repay Hickel was not material. Her argument is that the low interest, long-term loan offered by Pacific Mutual was substantially more favorable to her interests in obtaining maximum short-term distribution of cash than other loan agreements would have been. The Wirums characterize the relevant language in the contract as shorthand for the agreement to obtain a loan to pay the Hickel/Palmer debt, and argue that Pacific Mutual was specified only as the probable source of the loan at the time the agreement was entered into, since all parties were aware that the loan had not yet been approved. They dispute Peterson's conclusions regarding the Wirum letters, maintaining that these communications demonstrate that the parties could not have considered the Pacific Mutual loan to be a condition precedent. They point to language in the first letter to the effect that if the Pacific Mutual loan is not approved, ... we'll have to face that problem with some other solution, as evidence that obtaining a loan from another source was an expected contingency. [12] The Wirums also emphasize that the conduct of Peterson after the Pacific Mutual loan fell through indicated that for some time thereafter she acquiesced in the agreement by attempting to carry out its terms, agreeing to look for other loan sources, expressing an interest in loaning money herself to PTA, and accepting cash disbursements from PTA. They contend that Peterson's interpretation of the Pacific Mutual loan provision as a condition precedent is unreasonable under these circumstances, and that, given PTA's substantial cash flow, the exact terms of the loan agreement were not critical to any of the partners. The Wirums have additionally advanced several legal arguments in support of the superior court's rulings on the summary judgment motions. [13] They refer to the genuine reluctance of courts to give effect to conditions precedent and the accepted requirement that such conditions be expressed in plain, unambiguous language or arise by clear implication. U.S. v. Schaeffer, 319 F.2d 907, 911 (9th Cir.1963), cert. denied, 376 U.S. 943, 84 S.Ct. 798, 11 L.Ed.2d 767 (1964); McAtee v. Wes-Lee Corp., 566 P.2d 442, 444 n. 1 (Okl. 1977); Cheever v. Schramm, 577 P.2d 951, 953 (Utah 1978). [14] The Wirums refer specifically to two cases in other jurisdictions which, they argue, indicate that a term specifying a certain fund source for the discharge of an existing debt does not necessarily create a condition precedent to performance unless the specification of that source as the only means of payment is express and unambiguous. Campisano v. Phillips, 547 P.2d 26 (Ariz. App. 1976); Mignot v. Parkhill, 391 P.2d 755 (Or. 1964), appeal after remand, 430 P.2d 1007 (Or. 1967). Peterson attempts to distinguish these cases on the ground that the amount and terms of the payment to Hickel/Palmer were in dispute prior to the October agreement, and argues that the terms of the Pacific Mutual loan were a part of the compromise reached in settling this dispute rather than merely an agreement to pay the debt out of a certain fund. Since the contracts in both Mignot and Campisano also fixed the amount and terms of payment of the debts, we are not persuaded that Peterson's proffered distinction is a persuasive one. [15] On the basis of the record in this case, and the foregoing, we hold that the superior court's conclusion that the Pacific Mutual loan was not intended as a condition precedent should be affirmed. The language of the provision itself is not sufficiently unambiguous, given the larger purposes of the agreement, to establish that the Pacific Mutual loan was the only means of paying the Hickel/Palmer debt acceptable to the parties. In our view it would have been unreasonable to void the entire agreement, which established the equities and cash flow entitlements of all the parties, on the basis of Pacific Mutual's refusal to finance payment of the debt owed to Hickel/Palmer, especially when it is undisputed that PTA owes Hickel/Palmer more than $650,000. Further, many of Peterson's actions indicate that she acquiesced in and did not question the validity of the October 28, 1977, agreement until several months after learning of the failure to obtain additional monies from Pacific Mutual. We further note that a fairly persuasive argument is made that the terms of the Seafirst loan were not substantially dissimilar to those anticipated from Pacific Mutual. Given the foregoing and the disfavor with which conditions precedent are viewed by the law, we affirm the superior court's grant of summary judgment to the Wirums and its denial of summary judgment to Peterson. [16]