Court Opinion

ID: 9625620
Source: CourtListenerOpinion
Date Created: 2023-08-22 07:46:02.940577+00
Date Added: 2024-06-11T14:56:56.880311
License: Public Domain

CONNOR, Justice
(dissenting).
The majority opinion appears to conclude that the non-competition covenant in this case was unambiguous with respect to the sale of credit life insurance, and determines that such sales were included within the covenant’s, coverage. I respectfully dissent.
The covenant provided that until December 31, 1971,
“The Seller will not engage in the insurance agency business on the Island of Kodiak, either directly or indirectly.”
The critical question is the meaning of the phrase “insurance agency business.”
The non-competition covenant appears in an addendum to the contract of sale. The addendum is specifically appended to and made part of the main contract. Looking to that main contract, then, I note that the “good will’ sold to Brooks in 1962 included “the right to conduct the insurance agency business presently conducted by the Seller . . . . ” (emphasis added). At the time the contract was made the Kodiak Building & Insurance Corporation,1 the seller, did not sell credit life insurance. Therefore the sale of credit life was not a business “presently conducted” by the agency sold to Brooks. Since in the main contract the attention of the parties was focused on the insurance agency business as then conducted by Kodiak Building & Insurance Corporation, it is not likely that they contemplated inclusion of credit life insurance in the term “insurance agency business” as used unmodified in the covenant.
The surrounding circumstances clarify this ambiguity.2 While the sale of credit *592life was no part of the insurance agency business conducted by Kodiak Building & Insurance Corporation, the National Bank of Alaska did sell credit life through its loan department. Thus I would find that, in the context of the covenant, the sale of credit life insurance was considered part of the “banking business” rather than part of the “insurance agency business.” In this belief I am fortified by the consideration that national banks are permitted to engage in this limited form of insurance sales, which are incident to banking transactions, by 12 U.S.C. §§ 24, 84, 371 and Comptroller of the Currency Ruling 7110.
Moreover, the evidence shows that Arthur F. Brooks, the original buyer of the insurance agency business, either knew or reasonably should have known that credit life insurance was not part of the “insurance agency business” sold under the contract. Additionally, the corporate successor to Brooks, through its officers, Brooks and Guhrke, had the same knowledge. Despite this knowledge, payments were made to the seller from 1962 until 1969 without any objection being made that the seller was selling credit life insurance.
Since there is no basic factual dispute concerning the surrounding circumstances, the questions pertaining to the meaning of contract terms are treated in the same manner as questions of law, and we are not bound by the “clearly erroneous” standard.3 Thus I would find that the term “insurance agency business” is ambiguous within the terms of the contract. In light of the surrounding circumstances, I would find ' that the National Bank of Alaska’s sale of credit life insurance did not constitute a breach of contract. I would reverse and remand for entry of judgment in favor of appellant on the counterclaim.

. The company was styled so in the contract. I note, however, that both appellant and appellee refer to the company as the “Kodiak Insurance and Building Corporation.”

. I find no need in this case to confront the issue of whether “all the circumstances” must be examined to determine the existence of ambiguity. Since I would find the crucial phrase “insurance agency business” ambiguous within the contract itself, an examination of the surrounding circumstances is in order to the extent that it will aid in interpretation.

.Day v. A & G Constr. Co., 528 P.2d 440, 443 (Alaska 1974); Peters v. Juneau-Douglas Girl Scout Council, 519 P.2d 826, 834 (Alaska 1974).