Will Totem Be Successful In Suring Alyeska For The Rest Of Its Money

TOTEM MARINE T. B. v. ALYESKA PIPELINE, ETC Supreme Court of Alaska. (Aug 25, 1978) Aug 25, 1978
Subsequent
References
CaseIQ^TM
(AI Recommendations)

584 P.second xv

Important Paras

Turning to the instant case, we believe that Totem's allegations, if proved, would support a finding that it executed a release of its contract claims confronting Alyeska under economic duress. Totem has alleged that Alyeska deliberately withheld payment of an acknowledged debt, knowing that Totem had no choice simply to take an inadequate sum in settlement of that debt; that Totem was faced with impending bankruptcy; that Totem was unable to run across its pressing debts other than by accepting the immediate greenbacks payment offered by Alyeska; and that through necessity, Totem thus involuntarily accustomed an inadequate settlement offering from Alyeska and executed a release of all claims under the contract. If the release was in fact executed under these circumstances, we call up that under the legal principles discussed in a higher place that this would constitute the type of wrongful bear and lack of alternatives that would render the release voidable past Totem on the footing of economic duress. We would add that although Totem need not necessarily bear witness its allegation that Alyeska's termination of the contract was wrongful in order to sustain a claim of economical duress, the events leading to the termination would be probative as to whether Alyeska exerted whatsoever wrongful pressure on Totem and whether Alyeska wrongfully withheld payment from Totem.Go to
Economic duress does not exist, withal, merely because a person has been the victim of a wrongful human activity; in addition, the victim must have no pick simply to concur to the other political party'due south terms or face serious fiscal hardship. Thus, in order to avoid a contract, a political party must also show that he had no reasonable alternative to agreeing to the other political party's terms, or, as it is often stated, that he had no adequate remedy if the threat were to be carried out. Beginning National Bank of Cincinnati v. Pepper, 454 F.2d 626, 632-33 (2nd Cir. 1972); Austin Musical instrument, supra, 324 N.Y.S.2nd at 25, 272 Due north.Due east.2d at 535; Capps, supra; Ross Systems five. Linden Dari-Delite, Inc., 35 N.J. 329, 173 A.2nd 258, 261 (1961); Leeper five. Beltrami, 53 Cal.2nd 195, 1 Cal.Rptr. 12, xix, 347 P.2d 12, xix (1959); Tri-Country Roofing Company of Uniontown v. Simon, 187 Pa. Super. 17, 142 A.2d 333, 335-36 (1958). What constitutes a reasonable culling is a question of fact, depending on the circumstances of each instance. An available legal remedy, such as an activeness for breach of contract, may provide such an alternative. First National Bank of Cincinnati, supra; Austin Musical instrument, supra; Tri-Land Roofing, supra. Where one party wrongfully threatens to withhold goods, services or money from some other unless certain demands are met, the availability on the marketplace of similar goods and services or of other sources of funds may also provide an alternative to succumbing to the coercing party's demands. Austin Musical instrument, supra; Tri-State Roofing, supra. Generally, it has been said that "[t]he adequacy of the remedy is to exist tested past a practical standard which takes into consideration the exigencies of the situation in which the alleged victim finds himself." Ross Systems, 173 A.2d at 262. See too Showtime National Bank of Cincinnati, supra at 634; Dalzell, Duress By Economic Pressure I, 20 North. Carolina L.Rev. 237, 240 (1942).Go to
This appeal arises from the superior court'due south granting of summary judgment in favor of defendants-appellees Alyeska Pipeline Services, et al., in a contract action brought by plaintiffs-appellants Totem Marine Tug Clomp, Inc., Pacific, Inc., and Richard Stair.Go to
Many courts state the exam somewhat differently, eliminating use of the vague term "free will," but retaining the same basic idea. Under this standard, duress exists where: (1) one political party involuntarily accepted the terms of another, (2) circumstances permitted no other alternative, and (3) such circumstances were the outcome of coercive acts of the other party. Undersea Engineering Construction Co. v. International Phone Telegraph Corp., 429 F.2d 543, 550 (9th Cir. 1970); Urban Plumbing and Heating Co. five. Us, 408 F.second 382, 389, 187 Ct.Cl. 15 (1969); W.R. Grimshaw Co. v. Nevil C. Withrow Co., 248 F.2nd 896, 904 (8th Cir. 1957); Fruhauf Southwest Garment Co. v. Usa, 111 F. Supp. 945, 951, 126 Ct.Cl. 51 (1953). The third element is farther explained as follows:Go to
As thus stated, the superior court'south decision clearly misstated the standard applicative on motions for summary judgment. A party opposing summary judgment need not establish that he will ultimately prevail at trial. Gablick v. Wolfe, 469 P.2d 391, 395 (Alaska 1970). Although we may assert a trial court's grant of summary judgment if culling grounds exist for upholding its judgment, Moore v. State, 553 P.second 8, 21 (Alaska 1976), nosotros do not believe that summary judgment was properly granted in this case.Get to
ane. The political party alleging economical duress must show that he has been the victim of a wrongful or unlawful human action or threat, and

two. Such act or threat must exist one which deprives the victim of his unfettered volition.
Go to
To avoid summary judgment once the moving party meets its burden, the non-moving party must produce competent evidence showing that there are bug of material fact to be tried. Id. The respondent must set forth specific facts showing that it could produce admissible prove reasonably disposed to dispute the movants evidence or establish an affirmative defense. Id. The court and so must draw all reasonable inferences in favor of the non-moving party and against the movant. E.m., Clabaugh v. Bottcher, 545 P.2d 172, 175 n. 5 (Alaska 1976).Get to
Our test of the materials presented by Totem in opposition to Alyeska's motion for summary judgment leads us to conclude that Totem has fabricated a sufficient factual showing every bit to each of the elements of economic duress to withstand that move. There is no dubiousness that Alyeska disputes many of the factual allegations made by Totem and drawing all inferences in favor of Totem, we believe that 18-carat issues of material fact be in this case such that trial is necessary. Admittedly, Totem's showing was somewhat weak in that, for instance, it did non produce the testimony of Roy Bell, the attorney who represented Totem in the negotiations leading to the settlement and release. At trial, it will probably exist necessary for Totem to produce this evidence if it is to prevail on its claim of duress. Nonetheless, a party opposing a motion for summary judgment need non produce all of the bear witness information technology may have at its disposal but demand only show that issues of cloth fact be. 10 C. Wright and A. Miller, Federal Exercise and Procedure: Civil, § 2727 at 546 (1973). Therefore, nosotros hold that the superior court erred in granting summary judgment for appellees and remand the case to the superior courtroom for trial in accordance with the legal principles set forth in a higher place.Go to
At the outset it is helpful to acknowledge the various policy considerations which are involved in cases involving economic duress. Typically, those challenge such coercion are attempting to avert the consequences of a modification of an original contract or of a settlement and release understanding. On the 1 hand, courts are reluctant to set aside agreements because of the notion of liberty of contract and because of the desirability of having private dispute resolutions be final. On the other mitt, there is an increasing recognition of the police's role in correcting inequitable or unequal exchanges betwixt parties of disproportionate bargaining power and a greater willingness to not enforce agreements which were entered into nether coercive circumstances.Go to
In many cases, a threat to alienation a contract or to withhold payment of an admitted debt has constituted a wrongful act. Hartsville Oil Mill v. United States, 271 U.South. 43, 49, 46 Southward.Ct. 389, 391, seventy L.Ed. 822, 827 (1926); Austin Instrument, Inc. 5. Loral Corp., 29 N.Y.2d 124, 324 N.Y.Due south.2d 22, 25, 272 Northward.E.2d 533, 535 (1971); Capps five. Georgia-Pacific Corporation, 253 Or. 248, 453 P.2nd 935 (1969); see too 13 Williston, supra, § 1616A at 701. Implicit in such cases is the boosted requirement that the threat to breach the contract or withhold payment be done in bad faith. Run into Louisville Title Insurance Co. 5. Surety Title Guaranty Co., 60 Cal.App.3d 781, 132 Cal.Rptr. 63, 76, 79 (1976); Restatement (Second) of Contracts, § 318 annotate (east).Get to
Ane purpose of summary judgment, however, is to pierce the allegations in the pleadings in an attempt to make up one's mind whether genuine issues of fact be. As the moving party, Alyeska had the burden of showing that there were no such genuine bug and that it was entitled to judgment equally a matter of law. E.thousand., Brock five. Rogers and Babler, Inc., 536 P.second 778, 782 (Alaska 1975). Alyeska showed that Totem had executed the release, that Totem had been represented by counsel at the negotiating session leading to the settlement and release and that appellant Stair, who actually signed the release on behalf of Totem, was fully aware of the consequences of such a release. Such evidence, by itself, would have entitled Alyeska to summary judgment in its favor. As a matter of law, there is no uncertainty that a valid release of all claims arising nether a contract volition bar any subsequent claims based on that contract.Become to
Totem is a closely held Alaska corporation which began operations in March of 1975. Richard Stair, at all times relevant to this case, was vice-president of Totem. In June of 1975, Totem entered into a contract with Alyeska under which Totem was to ship pipeline construction materials from Houston, Texas, to a designated port in southern Alaska, with the possibility of one or two cargo stops along the way. In lodge to deport out this contract, which was Totem's beginning, Totem chartered a barge (The "Marine Flasher") and an ocean-going tug (the "Kirt Chouest"). These charters and other initial operations costs were made possible by loans to Totem from Richard Stair individually and Pacific, Inc., a corporation of which Stair was principal stockholder and officer, as well as by guarantees by Stair and Pacific.Become to
Post-obit termination of the contract, Totem submitted termination invoices to Alyeska and began pressing the latter for payment. The invoices came to something between $260,000 and $300,000. An official from Alyeska told Totem that they would look over the invoices but that they were not sure when payment would be made — perhaps in a day or maybe in half dozen to 8 months. Totem was in urgent need of cash every bit the invoices represented debts which the company had incurred on ten-30 day payment schedules. Totem'south creditors were demanding payment and according to Stair, without immediate greenbacks, Totem would go broke. Totem then turned over the collection to its attorney, Roy Bell, directing him to advise Alyeska of Totem's fiscal straits. Thereafter, Bell met with Alyeska officials in Seattle, and after some negotiations, Totem received a settlement offer from Alyeska for $97,500. On November 6, 1975, Totem, through its president Stair, signed an agreement releasing Alyeska from all claims past Totem in exchange for $97,500.Go to
We believe that the lower court erred in refusing to publish the Stair deposition and in ruling that the deposition was not part of the record before it. In Jennings v. State, 566 P.2d 1304 (Alaska 1977), the trial courtroom had ruled on a motion for summary judgment past referring simply to the pleadings.Get to
As the above indicates, one essential chemical element of economic duress is that the plaintiff show that the other party by wrongful acts or threats, intentionally acquired him to involuntarily enter into a particular transaction. Courts accept not attempted to ascertain exactly what constitutes a wrongful or coercive human activity, as wrongfulness depends on the particular facts in each case. This requirement may be satisfied where the declared wrongdoer's conduct is criminal or tortious only an human activity or threat may also be considered wrongful if information technology is wrongful in the moral sense. Restatement of Contracts, § 492, annotate (g); Gerber 5. First National Depository financial institution of Lincolnwood, 30 Sick. App.3d 776, 332 N.Due east.2d 615, 618 (1975); Fowler v. Mumford, 48 Del. 282, ix Terry 282, 102 A.second 535, 538 (Del.Supr. 1954).Go to
Present, a wait of even a few weeks in collecting on a contract claim is sometimes serious or fatal for an enterprise at a crisis in its history. The business of a creditor in financial straits is at the mercy of an unscrupulous debtor, who demand but propose that if the creditor does not intendance to settle on the debtor's own hard terms, he can sue. This state of affairs, in which promptness in payment is vastly more important than even approximate justice in the settlement terms, is as well common in modern business relations to exist ignored past lodge and the courts.
Go to
Before filing an answer, Alyeska moved for summary judgment against the plaintiffs on the ground that Totem had executed a binding release of all claims against Alyeska and that equally a matter of law, Totem could not prevail on its claim of economic duress. In opposition, plaintiffs contended that the purported release was executed under duress in that Alyeska wrongfully terminated the contract; that Alyeska knew that Totem was faced with large debts and impending defalcation; that Alyeska withheld funds absolutely owed knowing the effect this would have on plaintiffs and that plaintiffs had no alternative merely to involuntarily accept the $97,500 in lodge to avert defalcation. Plaintiffs maintained that they had thus raised 18-carat bug of cloth fact such that trial was necessary, and that Alyeska was not entitled to judgment every bit a matter of law. Alyeska disputed the plaintiffs' assertions.Become to
Where a political party to an activity has filed a motility for summary judgment, pursuant to Rule 56, Alaska R.Civ.P., the trial court's initial task is to determine whether at that place be 18-carat issues of material fact such that trial on these issues is necessary. Unremarkably, the parties submit affidavits, depositions, sworn admissions, answers to interrogatories or similar material in order to bear witness the existence or non-existence of those facts material to the instance. Civil Rule 56(c) and (due east); see 10 C. Wright and A. Miller, Federal Practice and Process: Civil, § 2721 at 475-76 (1973). On the basis of these materials together with the pleadings, the trial courtroom and so decides whether genuine issues of fabric fact exist. If such issues do exist, summary judgment is denied; if not, the court enters judgment for the party prevailing equally a affair of law. Civil Rule 56(c).Become to
Following entry of summary judgment in Alyeska's favor and kickoff of this entreatment past Totem, Totem submitted a motion to the superior court requesting it to publish Stair's degradation so that it could become part of the tape on appeal. Despite the extensive use of this deposition, it plain had not been formally opened and presented to the court during the proceedings below. The superior court denied the motion on the ground that the deposition was non before it during the proceedings and thus was not part of the record before the court.Go to
Fifty-fifty though the parties did little to call the superior court'southward attention to other items, including the three depositions on file, the superior courtroom should have gone outside the pleadings to consider the unabridged setting of the case to the extent that the textile was brought to the courtroom'due south attention by the parties on the movement.
Go to
In the instant case, dissimilar Jennings, the parties did refer frequently to the Stair deposition in the court below. Although Totem did not move formally to publish the deposition at the time of the hearing, we recall the superior court was obliged to consider, on its own motion, at least those portions of the deposition to which reference was made in the memoranda and arguments of the parties. Therefore, we consider the degradation to be properly part of the record on appeal. Ordinarily, we would remand this case to the superior courtroom for a new decision on Alyeska's motility for summary judgment, at which time information technology could take into consideration the facts found in the deposition. However, nosotros take elected to examine the pertinent portions of the deposition for ourselves, in order to avoid further delay in the ultimate resolution of this instance.Go to
See Witt v. Watkins, 579 P.2d 1065 (Alaska 1978), for similar considerations involved in a accommodate seeking to void a release in a personal injury example.Get to
Professor Williston states the basic elements of economic duress in the post-obit fashion:Go to
In gild to substantiate the allegation of economic duress or concern compulsion, the plaintiff must go beyond the mere showing of reluctance to accept and of financial embarrassment. There must be a showing of acts on the part of the defendant which produced these ii factors. The assertion of duress must be proven by evidence that the duress resulted from defendant'south wrongful and oppressive acquit and not past the plaintiff's necessities.
W.R. Grimshaw Co., supra, 111 F. Supp. at 904.Go to
This view finds support in Capps v. Georgia Pacific Corporation, 253 Or. 248, 453 P.2d 935 (1969). There, the plaintiff was owed $157,000 equally a commission for finding a lessee for defendant's property merely in exchange for $5,000, the plaintiff signed a release of his claim against defendant. The plaintiff sued for the balance of the committee, alleging that the release had been executed nether duress. His complaint, however, was dismissed. On appeal, the courtroom held that the plaintiff had stated a claim where he alleged that he had accepted the grossly inadequate sum because he was in danger of immediately losing his home past mortgage foreclosure and other property past foreclosure and repossession if he did not obtain immediate funds from the defendant. 1 basis for its holding was found in the post-obit quote by a leading commentator in the area of economic duress:Become to
The plaintiffs, specifically Mr. Stair, assert the release and settlement should exist held for naught because of duress and coercion exerted upon him and his corporation by the defendants' action.

Mr. Stair fails to bear witness that the release and settlement negotiated by his attorneys was involuntary on his part. Mr. Stair did not personally participate in the negotiations which resulted in the release and settlement. No affidavit or other suggestion of evidence has been submitted to demonstrate that upon trial the plaintiffs could sustain their burden of proof required to set bated the release and settlement.
Go to

Will Totem Be Successful In Suring Alyeska For The Rest Of Its Money

0 Response to "Will Totem Be Successful In Suring Alyeska For The Rest Of Its Money"

Post a Comment

Iklan Atas Artikel

Iklan Tengah Artikel 1

Iklan Tengah Artikel 2

Iklan Bawah Artikel