Opinion ID: 2624896
Heading Depth: 3
Heading Rank: 2

Heading: Evidence of Agreement to Share Profits

Text: In order to meet their burden in establishing the existence of a contract, Alaska plaintiffs must show: an offer encompassing all essential terms, unequivocal acceptance by the offeree, consideration, and an intent to be bound. [5] The contract amount, in particular, must be definite and specific. [6] Because contracting parties cannot plan for all contingencies that might arise, courts may fill gaps in contracts to ensure fairness where the reasonable expectations of the parties are clear. [7] But the courts should not impose on a party any performance to which he [or she] did not and probably would not have agreed. [8] The following evidence was presented at trial: (1) Magill's testimony that he and Nelbro representatives discussed the entire 1995 Togiak herring profit-sharing venture at their March 9 meeting, and that they agreed Nelbro would take the hard costs of processing, grounds price, and tendering out, and [the Magill group and Nelbro] would split 50-50 whatever was left; (2) the deposition testimony of Mike Lee, Nelbro's president, in which he admitted that [t]here was some discussion of a possible profit sharing program but insisted that there was never a formal agreement put together; and (3) documentary evidence variously referring to some form of joint/share of the misery type operation, [9] and a commit[ment] by Nelbro to purchase herring for a[n] established advance price with some form [of] profit sharing. [10] The Magill group argues on appeal that the trial court clearly erred in concluding that the plaintiffs failed to meet their burden of establishing an agreement with Nelbro to share profits. The court concluded that Magill's trial testimony set forth terms that [were definite and] specific enough to be enforced, but found insufficient evidence that the parties had actually agreed to these terms. The trial court declined to credit Rick Magill's trial testimony because it was substantially different from the testimony he had given at his deposition. We conclude that the trial court's assessment is reasonably supported by the record. At his deposition, Magill was asked to identify the general terms of the 1995 Togiak herring venture as they were discussed with Nelbro representatives. Magill failed to mention the specific and definite terms of the March 9 conversation that he would later recount at trial. Magill's description of the agreement was much less detailed: It would be simply a fishermen-Nelbro venture using some of the Baypack fishermen and some of the non-Baypack fishermen. And we would simply get the profitgrounds price and profitsharing thereafter. On appeal, Magill has explained that he failed to mention the specific terms of the agreement at the deposition because he was not asked specifically about the details. Although this explanation is plausible, the trial court still acted within the proper bounds of its discretion when it noted Magill's inconsistency and decided not to credit his testimony. The trial court instead gave credit to Lee's deposition testimony that there was never a formal agreement put together. The court found that Lee testified inconsistently in the past. But because Lee never gave any details as to the share to be allocated to each [party to the agreement], the method of determining the profit or whether ... the product would be marketed in a certain way, the trial court decided not to treat Lee's testimony as corroborating Magill's assertion that the parties had reached an enforceable profit-sharing agreement. We likewise conclude that the trial court's assessment of Lee's statement was reasonably supported by the evidence in the record. Even if Lee's 1999 testimony disclaiming his earlier statement about profit-sharing was not credible, his earlier statement still could not corroborate the crucial 50/50 profitsplit term that Magill described at trial. Assuming the trial court gave too much credit to Lee's testimony, such an misassessment would not amount to reversible error. Lee's initial testimonythat the profit sharing meant that once [Nelbro had] taken all the costs that were involved in processing the product and shipping the product, if there was any profit left over after costs were deducted, then it would be split, paid backdid not describe terms so specific and definite that the trial court was obliged to find that the parties had agreed upon definite and specific profit-sharing terms. Applying the standard articulated in Davis, it is not clear that an agreement to split and pay back any profit left over after costs were deducted describes either an amount of payment or a method of calculating an amount of payment due under the profit-sharing arrangement with sufficient definiteness and specificity to render the agreement enforceable. [11] Regardless, the trial court's decision to credit Lee's 1999 deposition testimony and to place little emphasis upon his 1998 statements was not clearly erroneous. The trial court also reviewed several documents the plaintiffs offered in attempting to prove the existence of an enforceable profit-sharing agreement; it concluded that the writings were insufficient. The court characterized one such writing as vague and a far cry from the detailed terms that Magill says were articulated in the March 9 agreement. The trial court found the documentary evidence insufficient to establish an enforceable profit-sharing agreement. We conclude again that the trial court's assessment was reasonably supported by the evidence in the record. The documentary evidence variously referring to some form of joint/share of the misery type operation, and a commit[ment] by Nelbro to Magill to purchase herring for a[n] established advance price with some form [of] profit sharing, does not set forth price terms sufficiently definite and specific to compel the conclusion that the parties had an enforceable agreement to share profits. We therefore conclude that the evidence left uncertainty as to the profit element and potential uncertainty as to the advance payment term that the plaintiffs sought to enforce. Although the trial court might have assessed the evidence differently, Judge Torrisi's written decision contained a thorough discussion of the evidence and articulated a well-reasoned resolution of the issues. The trial court did not clearly err in holding that the parties did not agree on terms.