Court Opinion

ID: 3031410
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:45:56.711319+00
Date Added: 2024-06-11T12:46:55.951293
License: Public Domain

FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

TANADGUSIX CORPORATION; BERING           
SEA ECOTECH, INC.,
                Plaintiffs-Appellants,
                  v.
DIERDRE HUBER, Director, Property
Management Division, General
Services Administration, in her               No. 02-36142
official capacity; STEPHEN A.
                                                D.C. No.
PERRY, Administrator, General
Services Administration, in his             CV-02-00032-A-
official capacity; HECTOR V.                      RRB
BARRETO, Administrator, Small                  OPINION
Business Administration, in his
official capacity; UNITED STATES OF
AMERICA; JAMES JOBKAR, Alaska
Department of Administration,
Division of General Services, in
his official capacity,
               Defendants-Appellees.
                                         
        Appeal from the United States District Court
                 for the District of Alaska
        Ralph R. Beistline, District Judge, Presiding

                    Argued and Submitted
              July 7, 2004—Anchorage, Alaska

                     Filed April 21, 2005

  Before: Cynthia Holcomb Hall, Andrew J. Kleinfeld, and
           Kim McLane Wardlaw, Circuit Judges.

                              4583
4584   TANADGUSIX CORP. v. HUBER
       Opinion by Judge Kleinfeld
                TANADGUSIX CORP. v. HUBER           4585

                      COUNSEL

Thomas P. Schlosser, Morisset, Schlosser, Jozwiak &
McGaw, Seattle, Washington, for the appellants.

Marjorie L. Vandor (briefed), Assistant Attorney General,
Alaska Department of Law, Juneau, Alaska, for appellee
James Jobkar, Alaska Department of Administration.

Thomas M. Bondy, Department of Justice, Washington, D.C.,
for the federal appellees.
4586                TANADGUSIX CORP. v. HUBER
                             OPINION

KLEINFELD, Circuit Judge:

   We construe a federal surplus property agreement to deter-
mine whether the government correctly treated a condition of
a transfer as breached.

                                 Fact

   The Aleutian Islands extend so far west of Alaska that,
crossing the 180th Meridian, they become the easternmost
part of the United States. They are a two thousand-mile-long
archipelago of cold, rain, snow, and wind, that separates the
North Pacific Ocean from the Bering Sea. Hundreds of miles
north of the Aleutians lie the even more remote Pribilof
Islands, St. Paul and St. George. The islands were uninhab-
ited, except by seals during mating season, until the Russian
promyshleniki enslaved Aleuts and brought them there to har-
vest the seals.1 After the United States purchased Alaska in
1867, the Aleuts living in the Pribilofs continued to harvest
seals, under a federal monopoly managed for the government
by its lessee, the Alaska Commercial Company.2

  The Aleuts again faced terrible times during World War II.
In 1942, the Japanese invaded the Aleutian islands of Attu
and Kiska. The Japanese shipped a number of the islands’
inhabitants to Japan, where many of them died in war prisons.
To protect the rest of the Aleuts, the federal government evac-
uated them to Southeast Alaska, where they were then
neglected and housed in conditions that produced consider-
  1
    See generally William R. Hunt, Alaska: A Bicentennial History 11-31,
41-58 (1976); Russia’s American Colony 105-43 (S. Frederick Starr ed.,
1987).
  2
    See generally Ernest Gruening, The State of Alaska 17-29 (1968);
Claus-M. Naske & Herman E. Slotnick, Alaska: A History of the 49th
State 23-44 (2d ed. 1987).
                    TANADGUSIX CORP. v. HUBER                    4587
able disease and death. Meanwhile, after a year and a half —
and a battle that produced more casualties in proportion to the
number of American soldiers involved than any other battle
except Iwo Jima — we won back Attu and Kiska from the Japa-
nese.3 But the Aleuts were still kept far from home until long
after the danger had passed and only about half returned after
the war.

   Today, more favorable events have turned the Aleuts away
from this tragic history. The Alaska Native Claims Settlement
Act4 established regional and village corporations for the
native peoples of Alaska, and caused large amounts of land
and money to be settled upon these native corporations. The
largest community in the Pribilofs is St. Paul, a village of less
than 700 people, mostly Aleuts, with a few Eskimos, Indians,
and whites. The plaintiff in this case, Tanadgusix, which does
business as TDX, is the St. Paul village corporation organized
under the Alaska Native Claims Settlement Act. Bering Sea
Ecotech is TDX’s subsidiary.

   Like the Aleuts, the federal government is still dealing with
matters left over from World War II. A vessel called a “float-
ing dock,” the Competent, was built during World War II to
serve the military as a dry dock. Later it was towed to Subic
Bay in the Philippines, where it was used from 1969 to 1978,
then towed to Guam for repairs, and finally used to support
submarines in Pearl Harbor from 1980 until its deactivation in
1997. The decommissioned dry dock is now called the Ex-
Competent.

  In March 2000, TDX wrote to Alaska’s senior senator ask-
ing for help getting the Ex-Competent transferred to the cor-
poration through Congress — bypassing the General Services
  3
     See generally Brian Garfield, The Thousand-Mile War: World War II
in Alaska and the Aleutians 273-409 (1969); Naske & Slotnick, supra, at
118-39.
   4
     43 U.S.C. §§ 1601-1629e.
4588               TANADGUSIX CORP. v. HUBER
Administration (“GSA”) — to “diversify the economic oppor-
tunities for island residents.” TDX told the senator that its
plan was to use the dry dock “in an active shipyard outside the
State of Alaska” for development of the Bering Sea’s indus-
trial infrastructure and for training the village corporation’s
shareholders. TDX requested a congressional transfer, rather
than going through GSA, because, although GSA had helped
the State of California remove a decommissioned dry dock
from a foreign military sale to Turkey, GSA had not assisted
Alaska in a similar effort. The planned sale of the Ex-
Competent to Greece was cancelled only after direct interven-
tion by Alaska’s senior senator.

   TDX did not succeed in getting the congressional transfer,
but GSA was advised that the State of Alaska had an interest
in the Ex-Competent. TDX wrote to the state property alloca-
tion officer involved, reiterating its interest in the vessel as “a
training platform for Aleut shareholders.” TDX’s letter
pointed out that St. Paul was “located in a remote region
where the commercial infrastructure and level of development
severely limits the options available for commercially viable
and beneficial commerce as well as infrastructure develop-
ment.” This language might cause the reader to infer that
TDX’s plan was to move the Ex-Competent to St. Paul to
remedy what TDX said were the problems, but the letter did
not explicitly say this. As plans moved forward, TDX and a
Hawaiian business, Marisco, Ltd., signed a “Letter of Under-
standing,” agreeing that TDX would leave the Ex-Competent
in Marisco’s Hawaii shipyard for at least five years. In
exchange, Marisco would tow and repair the Ex-Competent,
pay TDX $250,000 for the use of the vessel, and ensure that
“training and employment opportunities will be made avail-
able to qualified Aleuts and TDX shareholders.”

   There are two critical documents in this case. One is a “let-
ter of intent” sent by TDX to the State of Alaska property
officer, which was later incorporated into the document that
conditionally transferred the vessel to TDX. This letter of
                  TANADGUSIX CORP. v. HUBER                 4589
intent, like previous TDX letters, discusses the dire economic
situation in St. Paul, which was “reeling from a collapse in
crab stocks” and seeking “employment opportunities for our
shareholders.” The letter of intent says that Marisco’s letter to
TDX had been provided to GSA, and explains that Marisco’s
rehabilitation of the Ex-Competent in Hawaii was necessary
before the vessel “could be feasibly and safely transported
any long distances.” Again, a reader might infer that TDX
planned to provide employment opportunities for Aleuts and
others in St. Paul by eventually bringing the Ex-Competent to
Alaska, after the vessel was rehabilitated in Hawaii, but the
letter of intent does not say so in so many words. The letter
of understanding between TDX and Marisco suggests that
TDX planned to keep the vessel in Hawaii for at least five
years.

   The most critical document in the case is GSA’s “Vessel
Conditional Transfer Document,” since this is the paper that
gave TDX the Ex-Competent. It states that the property is to
be used “for all the following purpose(s) and plan as set forth
in the Donees’s ‘Letter of Intent.’ ” Beyond that, the Vessel
Conditional Transfer Document makes the transfer of title in
the Ex-Competent from the federal government (acting
through the State of Alaska) to TDX subject to several
express conditions, with the property to revert to the federal
government if the conditions are not met. The express condi-
tions relevant here are first, that TDX has only twelve months
to put the vessel into use for the stated purposes (condition
number 3), second, that after that twelve-month period, TDX
may use the vessel only for the stated purposes for another
four years (condition number 4), and third, that during those
five years TDX may not lease or lend the Ex-Competent, or
“remove it permanently for use outside the State,” without
GSA’s prior written consent (condition number 8).

  GSA subsequently received an inquiry from the senior
United States senator from Hawaii regarding a constituent’s
concerns about the Ex-Competent. GSA wrote the senator that
4590                TANADGUSIX CORP. v. HUBER
“[t]he dock will be used for economic development, including
job training, in Alaska” and that “TDX certifies that there is
no rent or lease agreement for use of the vessel with Marisco
or any other entity.” A few weeks later, in July 2001, TDX
wrote GSA that “movement of the vessel across the open
ocean to Alaska may prove to be impossible physically with-
out sinking or damaging the vessel and probably not finan-
cially attainable either.” TDX acknowledges in the letter that
condition number 8 of the Vessel Conditional Transfer Docu-
ment “forbids removing it permanently for use outside of the
State [of Alaska].” The bracketed words “[of Alaska]” appear
in TDX’s letter. Accordingly, TDX requested that GSA “con-
sider such a waiver that would let us operate where we are
presently, and relieving the burden of moving the vessel to
Alaska, that No. (8) appears to require.” The State of Alaska
supported consideration of a waiver.

   Negotiations with GSA did not work out, so TDX and its
subsidiary, Bering Sea Ecotech, sued GSA’s officers for
declaratory and injunctive relief. The gist of the complaint is
that GSA knew all along that TDX’s plan was to use the Ex-
Competent as a training facility for Aleuts in Hawaii, that
there was no place or market for the vessel in St. Paul, that
GSA had misrepresented the facts in its letter to the inquiring
senator from Hawaii, and that GSA was wrongfully treating
TDX as being in breach of the conditions of its transfer. The
injunction TDX sought would have required GSA to transfer
the Ex-Competent to TDX’s subsidiary under a different pro-
gram that would allow use of the vessel in Hawaii.

  On cross motions for summary judgment, the district court
granted the government’s motion. TDX and Bering Sea Ecot-
ech appeal.

                              Analysis

  We review summary judgment de novo.5 A contract entered
  5
   United States ex rel. Ali v. Daniel, Mann, Johnson & Mendenhall, 355
F.3d 1140, 1144 (9th Cir. 2004). Because our review is de novo, we need
                      TANADGUSIX CORP. v. HUBER                         4591
into under federal law by the United States and another party
is controlled by general principles of federal contract law.6
We construe the contract by reading it as a whole and inter-
preting each part with reference to the entire contract.7 The
terms of the contract control, regardless of the parties’ subjec-
tive intentions shown by extrinsic evidence. Where there is no
ambiguity in the contract, there is no genuine issue of fact.8
“A contract is ambiguous if reasonable people could find its
terms susceptible to more than one interpretation.”9

   TDX argues that the evidence establishes a genuine issue
of fact about whether GSA understood full well that TDX’s
plan all along was to use the Ex-Competent in Hawaii to train
Aleuts in marine repair, welding, and other marketable skills.
Reading the record most favorably to the party against whom
summary judgment was taken, as we must,10 the filings could
indeed establish a genuine issue of fact. The letter of intent
from TDX to the State of Alaska property officer states that
Marisco’s letter to TDX (which manifested an intention to
keep the vessel in Hawaii for at least five years) had been pro-

not resolve TDX’s argument that, in evaluating the government’s motion,
the district court gave insufficient attention to the papers TDX filed in sup-
port of its own motion for summary judgment. We have examined all the
papers filed by both sides in connection with their cross motions. Like-
wise, we need not consider TDX’s argument that the district court erred
by converting the government’s motion from a motion to dismiss into a
motion for summary judgment. The motion purported to be both, materials
outside the pleadings were submitted by both sides, and both the district
court and we have considered those materials with full notice.
   6
     Kennewick Irrigation Dist. v. United States, 880 F.2d 1018, 1032 (9th
Cir. 1989).
   7
     Id. (citation omitted).
   8
     See Maffei v. N. Ins. Co. of New York, 12 F.3d 892, 898 (9th Cir.
1993); Radobenko v. Automated Equip. Corp., 520 F.2d 540, 543 (9th Cir.
1975).
   9
     Kennewick, 880 F.2d at 1032 (citation omitted).
   10
      United States v. City of Tacoma, 332 F.3d 574, 578 (9th Cir. 2003).
4592              TANADGUSIX CORP. v. HUBER
vided to GSA. Although TDX used the economic conditions
in St. Paul to justify transferring the vessel, nowhere did TDX
ever say, in so many words, that it planned to take the vessel
from Hawaii to Alaska. TDX’s summary judgment papers
included an affidavit from its president establishing that he
had explained to GSA’s people the impracticality of towing
the Ex-Competent to Alaska or using it in Alaska’s small mar-
ket, and explaining TDX’s plan to use the vessel in Hawaii for
job training of St. Paul Aleuts. According to TDX’s president,
he and the GSA people had agreed that either GSA would
grant a waiver of the requirement that the vessel be in Alaska,
or TDX would transfer the Ex-Competent back to GSA for
retransfer to TDX’s subsidiary under another federal program,
for which Bering Sea Ecotech would qualify, that would not
require the vessel to be in Alaska.

   A trier of fact could accept these representations as true. A
trier of fact could even go so far as to conclude that the people
involved — on GSA’s side as well as TDX’s — knew full
well that they were transferring to the St. Paul village corpo-
ration a vessel that would stay in Hawaii, and that the only
misrepresentation made by anyone was when GSA told a sen-
ator from Hawaii that the vessel was going to be taken to
Alaska. Maybe, until there was a complaint from the Hawai-
ian senator’s constituent, GSA really did plan to make it pos-
sible for TDX to keep the dry dock there, with a waiver or a
reversion and transfer under a different program.

   [1] Perhaps TDX is right that the best way to use the Ex-
Competent to further economic development on St. Paul
Island is to fly Aleuts to Hawaii so that they can work on the
vessel and learn marine trades, while Marisco sends the vil-
lage corporation regular checks. Quite a few Alaskans com-
mute a thousand miles or more to work, and many Aleuts
travel as many as 2,000 miles just to see a doctor in Anchor-
age. There is indeed a genuine issue of fact on this record
about whether, as GSA claims, TDX intended and represented
during negotiations that it would take the vessel to Alaska, or
                  TANADGUSIX CORP. v. HUBER                4593
whether, as TDX claims, TDX legitimately intended and hon-
estly represented that it would use the vessel in Hawaii for the
betterment of the Aleuts in St. Paul.

   [2] The problem for TDX is that this issue of fact is not
material. Condition number 8 of the Vessel Conditional
Transfer Document is unambiguous. If, after taking a year to
repair the vessel, TDX did not keep it in Alaska for the fol-
lowing four years, title would revert to the federal govern-
ment. Even if TDX’s plans, hopes, and discussions were as it
says, it did not get a deal in accord with them. TDX got a deal
that required the vessel to be moved to Alaska.

   [3] TDX acknowledged that its agreement with GSA
required that the vessel be moved to Alaska when it sought a
waiver from that agreement. TDX asked GSA for a waiver
“that would let us operate where we are,” which shows that
TDX knew it needed a waiver to keep the Ex-Competent in
Hawaii without losing it. And TDX acknowledged that condi-
tion number 8 prohibited permanently removing the Ex-
Competent “for use outside of the State [of Alaska]” [sic].
Accordingly, TDX requested that GSA “consider such a
waiver that would let us operate where we are presently, and
relieving the burden of moving the vessel to Alaska, that No.
(8) appears to require.”

   TDX argues that the word “State” in the Vessel Conditional
Transfer Document is ambiguous, and that it could mean
Hawaii rather than Alaska. The word is singular, so it can
only mean one of those two states. This argument requires
that we disregard TDX’s own contemporaneous admission of
what it understood condition number 8 to mean when it
requested a waiver. Even if we disregard that admission, how-
ever, “State” still unambiguously meant Alaska. The Letter of
Intent (which was incorporated in the Vessel Conditional
Transfer Document) refers to “the State GSA Program,”
meaning Alaska’s program. The letter states that TDX is
obtaining the vessel “through the State,” meaning the State of
4594                TANADGUSIX CORP. v. HUBER
Alaska. The letter also states that TDX has a plan for “remov-
al” of the dry dock and for use of it to alleviate the dire eco-
nomic conditions of St. Paul Island, and it says that Marisco’s
Hawaii shipyard is “where rehabilitation will take place.” The
phrase “the State” in the Letter of Intent unambiguously
means the State of Alaska. Though, in the Letter of Intent,
TDX never explicitly says that it plans to take the Ex-
Competent 5,000 miles north from Pearl Harbor to the Pribilof
Islands, condition number 8 of the Vessel Conditional Trans-
fer Document explicitly says that TDX will.

   TDX offers a reading of the relevant GSA regulations11 that
would permit a conditional transfer under the program, even
though the transferee planned to permanently use the property
outside the state. And TDX offers an argument, as explained
above, that GSA personnel said GSA would work something
out — a waiver, or a reversion and retransfer under another
program — so that TDX could keep the dry dock permanently
in Hawaii. Neither matters, however, because the only con-
veyance made was the one made in the Vessel Conditional
Transfer Document. That document unambiguously required
the Ex-Competent to be taken to Alaska within a year and
then used in Alaska for at least four years before TDX could
get unencumbered title. Whatever deal TDX could have made
with GSA, this is one it actually made.

  [4] The Vessel Conditional Transfer Document unambigu-
ously establishes that the Ex-Competent reverts to the federal
government if the vessel is not kept for four years in Alaska.
TDX did not satisfy the condition and the reversion properly
occurred.

  AFFIRMED.

  11
    41 C.F.R. §§ 101-44.206(d), 102-37.265 (2001).