Court Opinion

ID: 9796242
Source: CourtListenerOpinion
Date Created: 2023-08-31 03:52:39.013864+00
Date Added: 2024-06-11T08:49:21.660146
License: Public Domain

FABE, Chief Justice,
with whom MATTHEWS, Justice, joins, dissenting.
Today's decision departs significantly from our analysis in Reeves v. Alyeska Pipeline Service Co. (Reeves I)1 of the remedy for breach of an implied-in-fact contract. I disagree with today's plurality opinion because I believe that the trial court erred by failing to limit the jury's consideration of damages to the value of the services Reeves provided in developing and disclosing his unoriginal idea to Alyeska. In my view, the trial court should have instructed the jury that in the absence of an express agreement regarding compensation, the jury could only consider the value of the services provided by Reeves, not the potential commercial value of the non-novel idea. For this reason, I respectfully dissent.
In our decision in Reeves I, we touched on the question of the proper measure of damages for development and disclosure of an unoriginal or non-novel idea. At the trial on remand, Alyeska proposed a jury instruction that was consistent with the guidance that we provided in Reeves I and that would have limited damages for breach of the disclosure agreement of Reeves's unoriginal idea to the value of Reeves's services:
[Ylou may not compensate Mr. Reeves for the value, if any, of the idea itself:... [I]f you decide that Alyeska breached the disclosure agreement by developing the pipeline viewing area by using Mr. Reeves' idea, then you should consider kow much money, if any, Mr. Reeves should be paid for his services in disclosing his idea.
(Emphasis added.)
The trial court rejected Alyeska's proposed instruction and instead gave the jury five separate jury instructions on the measure of damages that corresponded to Reeves's various theories of recovery for breach of the disclosure contract. For breach of the express contract, the trial court instructed the jury to determine the amount necessary to place Reeves "in the same position that he would have been in had Alyeska kept its promise" to allow him to participate in implementing the visitor center. For breach of an implied-in-fact contract, the trial court instructed the jury to determine damages "in the amount of the value of the idea to Alyes-ka." The trial court instructed the jury to determine damages based on the promissory estoppel theory "in the amount of the value of any benefit [Reeves] conferred upon Alyeska." The unjust enrichment jury instruction directed the jury to determine damages "in the amount of the value of the benefit which Alyeska unjustly retained." On the final theory of recovery for misrepresentation, the trial court directed the jury to determine the amount of damages "that will, as nearly as possible, place [Reeves] in the *673position he would have occupied had it not been for [Alyeska's] misrepresentation."
We recognized in Reeves I that contract and contract-like theories may protect individuals who spend their time and energy developing unoriginal or non-novel ideas that may benefit others because "[ilt would be inequitable to prevent these individuals from obtaining legally enforceable compensation from those who voluntarily choose to benefit from the services of the 'idea-person.' 2 We noted in our discussion of the implied-in-fact contract claim that when parties bargain for an individual's services in disclosing a non-novel or unoriginal idea, the services provided are like those of a writer, a doctor, or a lawyer: "each may provide a product that is not novel or original.3 Thus, "although Reeves is not a writer, his ideas are entitled to no less protection than those of writers, doctors, or lawyers." 4
So, in the context of our discussion of Reeves's contract theories, we intimated that, as with those of a doctor or lawyer, the value of Reeves's services in developing and disclosing an unoriginal idea would be the correct measure of damages, absent an express contract with a price term defined. We also noted in the context of our discussion of Reeves's quasi-contract claim that "lf Reeves' services unjustly enriched Alyeska, he should be compensated for the value of those services." 5
As we explained in Reeves I, "[ilf parties voluntarily choose to bargain for an individual's services in disclosing or developing a non-novel or unoriginal idea, they have the power to do so.6 If the parties reach an express agreement for monetary compensation in return for disclosure, then that agreed-upon amount would comprise the damages to be awarded upon a finding of breach of the express contract. Here, however, there was no evidence of an agreed-upon price for disclosure of Reeves's idea.
I agree with the court that the jury's finding of an implied-in-fact contract should be upheld. Reeves argued that Alyeska solicited his idea and that its manager asked him to reveal the substance of the idea. In addition, Reeves contended that Alyeska's later use of the idea created an implied contract for payment. This theory was consistent with our decision in Reeves I that "a reasonable fact-finder could determine that [the manager's] actions implied a promise to pay for the disclosure of Reeves' idea." 7
But although the lack of a specific term for payment for disclosure of an unoriginal idea does not render such an agreement invalid, it does limit the damages to the value of Reeves's service in developing and disclosing the idea. And in this case, the measure of damages is the same, whether the jury used theories of implied-in-fact contract, promissory estoppel, or quasi-contract to reach its conclusion that the disclosure agreement had been breached. In proposing its instruction, Alyeska correctly recognized that where there is no contract establishing the price term for the development and disclosure of an idea, a court must base its equitable remedy on the value of the performance of one party, here Reeves, unjustly retained by the other, here Alyeska.8
As we suggested in Reeves I, if Reeves's experience or the written plan benefitted Alyeska, either in its timing or how it was presented, Reeves should be compensated for the value of his services in developing and disclosing his idea.9 "An injured party usually seeks, through protection of either his expectation or his reliance interest, to en-foree the other party's broken promise. However, he may, as an alternative, seek, through protection of his restitution interest, to prevent the unjust enrichment of the other *674party."10 Moreover, "[olecasionally a party chooses the restitution interest even though the contract is enforceable because it will give a larger recovery than will enforcement based on either the expectation or reliance interest."11
As we noted in Reeves I, by disclosing his idea to Alyeska, Reeves substantially changed his position-he had significantly reduced his ability to bargain for the terms of the disclosure.12 Under a theory of promissory estoppel, the court can remedy the breach of promise by enforcing that promise.13 The amount of damages for the remedy, however, would equal the restitutionary remedy, the same remedy for unjust enrichment under a quasi-contract theory.
In summary, the appropriate measure of damages in this case, in light of the absence of express agreement establishing the amount of compensation for Reeves for the disclosure, is the fair market value of Reeves's services in disclosing the idea. Yet, the trial court directed the jury that, if it found in Reeves's favor on the implied contract claim, it should award "the amount of the value of the idea to Alyeska." The jury awarded Reeves $1,820,000 using this measure. Because the jury based its award on the revenues produced by the visitor center as well as the value of improving public relations and fostering goodwill for Alyeska, rather than evidence of the value of Reeves's services in developing and disclosing the idea, I believe that the jury's award should be vacated and the case remanded for a new trial on damages. I therefore dissent.
Order
On consideration of the Petition for Rehearing,
IT IS ORDERED:
1. In Reeves v. Alyeska Pipeline Service Co., this court divided evenly on the proper measure of compensatory damages for Alyes-ka's breach of contract, with two members of the court favoring one of the special verdiet's alternative awards and two concluding that none of the verdiet's theories correctly decided the issue.1 Addressing the effect of this divided vote, our opinion concluded "that the votes favoring the greatest degree of affir-mance will determine the outcome of this case but that the decision on compensatory damages will have no precedential effect."2
2. Alyeska has petitioned for rehearing, arguing in part that this court "overlooked the inability of an evenly divided Supreme Court to direct a trial judge to enter a new judgment." In advancing this argument, Alyeska maintains that "an evenly divided Court eannot order a trial judge to enter a new judgment that he did not previously enter."
3. Alyeska's argument misunderstands the nature of the court's ruling on this issue. Although this court was evenly split on the proper measure of damages, all members of the court agreed upon the effect of its divided vote. The court was thus unanimous in holding that the two votes favoring the greatest degree of affirmance should prevail.
4. Having considered the parties' supplemental briefing on rehearing, the court finds no reason to disturb the original ruling. At least one other state supreme court has reached the same conclusion under almost identical circumstances,3 and Alyeska has cited no convincing authority supporting its position. Accordingly, the court unanimously denies rehearing on this point.
5. The court also unanimously denies rehearing on Alyeska's contention that the case should be reheard with a fifth justice participating.
6. Alyeska's remaining points address the opinion's ruling on the appropriate measure *675of damages. Rehearing on these points is denied by an evenly divided vote: Justices Bryner and Carpeneti vote to deny the petition on these points; Chief Justice Fabe and Justice Matthews dissent, voting to grant the petition.
The petition for rehearing is therefore DENIED.
Entered by the direction of the court.
EASTAUGH, Justice, not participating.

. 926 P.2d 1130 (Alaska 1996).

. Id. at 1135 (citing 3 David Nimmer, NimmEr on Copywricnt § 16.01, at 16-3 (1994)).

. Reeves I, 926 P.2d at 1142.

. Id.

. Id. at 1144 (emphasis added).

. Id. at 1142.

. Id. at 1141.

. Id. at 1144.

. Id.

. Restatement (Seconp) or Contracts § 373 cmt. a (1981).

. Restatement (SEcomp) or Contracts § 344 crt. d (1981).

. Reeves I, 926 P.2d at 1142.

. Resratemzent (Seconp) or Contracts § 90 (1981).

. Reeves v. Alyeska Pipeline Service Co., 56 P.3d 660, 663, n. 1 (Alaska, 2002).

. Id.

. See Ringsby v. Dixon, 496 P.2d 179 (Wyo.1972).