Casey v. Semco Energy, Inc., 92 P.3d 379 (Alaska 2004). · Go Syfert
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Casey v. Semco Energy, Inc., 92 P.3d 379 (Alaska 2004). Cases Citing This Book View Copy Cite
“the intent of the parties is the primary issue, and their intent can be drawn from extrinsic evidence, especially their express attempts to comply with the contract as they understood it.”
86 citation events (86 in the last 25 years) across 4 distinct courts.
Strongest positive: Black v. Whitestone Estates Condo. Homeowners' Ass'n (alaska, 2019-08-16)
Treatment trajectory · 2004 → 2026 · click a year to view as-of
2004 2015 2026
Statutes interpreted (leading-cases list)
#1 29 U.S.C. § 1051(2) cited 1× in this case · 3 total citations of statute
Top citers, strongest first. 48 distinct citers. How cited ↗
discussed Cited as authority (quoted) Black v. Whitestone Estates Condo. Homeowners' Ass'n
Alaska · 2019 · signal: see also · quote attribution · 1 verbatim quote · confidence low
the intent of the parties is the primary issue, and their intent can be drawn from extrinsic evidence, especially their express attempts to comply with the contract as they understood it.
discussed Cited as authority (rule) First Evangelical Church of Anchorage Alaska v. Michael L. Foster & Associates, Inc.
Alaska · 2026 · confidence medium
Specifically, in a deposition, First Covenant’s attorney asked Foster whether he believed his failure to timely provide the documentation was in good faith, to which Foster replied: “No.” At trial the superior court rejected First Covenant’s argument that Foster’s statement was proof of bad faith, noting that “if no additional information had been provided, that would be one thing, but additional information was provided.”35 Foster was “not bound by the fact that he made a comment” that he acted in bad faith, the court explained, because “his subsequent behavior has to be e…
discussed Cited as authority (rule) Crowley Marine Services, Inc., Crowley Maritime Corporation, Northland Fuel, LLC, Yukon Fuel Company, Northland Vessel Leasing Company, LLC, and Yutana Barge Lines, LLC v. State of Alaska and Delta Western, LLC, Crowley Fuels LLC v. Delta Western LLC F/K/A Delta Western, Inc.
Alaska · 2025 · confidence medium
See Asher v. Alkan Shelter, LLC, 212 P.3d 772, 783 (Alaska 2009) (“When [the appellant] filed her notice of appeal, the trial court lost jurisdiction over the matter.”), abrogated on other grounds by Shaffer v. Bellows, 260 P.3d 1064 (Alaska 2011). 9 See Pavone v. Pavone, 860 P.2d 1228, 1231-32 (Alaska 1993); McKnight v. Rice, Hoppner, Brown & Brunner, 678 P.2d 1330, 1334 (Alaska 1984). 10 Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004) (citing Vezey v. Green, 35 P.3d 14, 20 (Alaska 2001)). 11 Alaskans for a Common Language, Inc. v. Kritz, 3 P.3d 906, 912 (Alaska 2000) (citing …
discussed Cited as authority (rule) Snead v. Wright
D. Alaska · 2025 · confidence medium
Before case consolidation, the Court dismissed the fraud claims pleaded in Case No. 3:19-cv-00209-SLG at Docket 146 at 9–11. 171 Docket 181 (SEALED) at 32. 172 Docket 181 (SEALED) at 33. 173 Casey v. Semco Energy, Inc., 92 P.3d 379, 384 (Alaska 2004). agreement.”174 It works to “effectuate the reasonable expectations of the parties, not add to them.”175 Here, it is undisputed that Mr. Snead had a contractual relationship with Merrill Lynch through his Client Agreement and that this contract included language notifying Mr. Snead that Merrill Lynch owed “certain fiduciary responsibilit…
discussed Cited as authority (rule) Bachner Company Incorporated v. State of Alaska, Department of Administration, Division of General Services
Alaska · 2025 · confidence medium
In Bachner II, we remanded the issue of “whether Bachner waived its claim to rent for the additional 1,434 square feet.” 25 We also described this as “the company’s claim to rent for space not identified in the 22 Casey v. Semco Energy, Inc., 92 P.3d 379, 384-85 (Alaska 2004) (quoting Ramsey v. City of Sand Point, 936 P.2d 126, 133 (Alaska 1997)). 23 Soules v. Ramstack, 95 P.3d 933, 940 (Alaska 2004) (citing Alaska Sales & Serv.
discussed Cited as authority (rule) State of Alaska v. Debby Ward, Debby Ward v. State of Alaska (2×)
Alaska · 2024 · confidence medium
We conclude that although the superior court correctly 10 See Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004) (citing Vezey v. Green, 35 P.3d 14, 20 (Alaska 2001)); cf. Lake & Peninsula Borough Assembly v. Oberlatz, 329 P.3d 214, 221 (Alaska 2014) (applying clear error standard of review to superior court’s factual findings following trial de novo under Alaska Appellate Rule 609(b)). 11 Casey, 92 P.3d at 382 . 12 816 P.2d 140, 142 (Alaska 1991) (“[A] discharge for ‘just cause’ is one which is not for any arbitrary, capricious, or illegal reason and which is one based on fac…
discussed Cited as authority (rule) Ahtna Design-Build, Inc. v. Asphalt Surfacing, Inc.
D. Alaska · 2024 · confidence medium
Co., 90 P.3d 136, 142 (Alaska 2004) (quoting Guin v. Ha, 591 P.2d 1281,1291 (Alaska 1979)). 285 Casey v. Semco Energy, Inc., 92 P.3d 379, 384 (Alaska 2004). 286 Docket 75 at 31. 287 Id. at 31–32. that it was entitled to seek payment before remediating the alleged slurry issues.
discussed Cited as authority (rule) David Spigai v. Deborah Spigai
Alaska · 2023 · confidence medium
It reasoned that the dissolution agreement’s provision for David to deposit the children’s PFDs in a college savings account implied an agreement that the children could attend college and that “both parents [would] take the steps reasonably required by the college admission process, including applying for financial aid.” The court explained that it sought to “give effect to the reasonable expectations of the parties, considering the terms of their agreement, the ends sought to be achieved by the agreement, [and] any extrinsic evidence of their intent at the time the contract was ent…
discussed Cited as authority (rule) The Estate of Josiah Wheeler pursuant to the assignment of rights of insured Deborah Overly and Terry Summers v. Garrison Property and Casualty Insurance Companya subsidiary of USAA INSURANCE COMPANY
D. Alaska · 2022 · confidence medium
Alaska contract law allows a court to “fill gaps” by “supply[ing] an essential term that has been omitted from an otherwise sufficiently defined contract” to “ensure fairness where the reasonable expectations of the parties are clear.”60 But a court may only do so “[when], in fact, there is an essential term or circumstance for which the parties failed to plan.”61 Alaska law “does not permit a court ‘to rewrite a contract for the purpose of accomplishing that which, in the court’s opinion, might appear proper’ or to ‘create substantive rights under the guise of doing …
discussed Cited as authority (rule) Gavora, Inc. v. City of Fairbanks (2×)
Alaska · 2021 · confidence medium
Co., 389 P.3d 27, 29 (Alaska 2017). 12 Brown v. Knowles, 307 P.3d 915, 923 (Alaska 2013) (stating applicable standards of review); Rausch v. Devine, 80 P.3d 733, 737 (Alaska 2003) (applying clear error review to credibility determination). 13 Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004). 14 N. Slope Borough v. Brower, 215 P.3d 308, 311 (Alaska 2009) (quoting Alyeska Pipeline Serv.
discussed Cited as authority (rule) Andrew B. v. Abbie B.
Alaska · 2021 · confidence medium
The meaning of the phrase “earnings by reason of employment or personal services” is a question of contract interpretation and therefore a question of intent.17 To determine the intent of the parties, we assess “the language used in the contract, case law interpreting similar language, and relevant extrinsic evidence, including the subsequent conduct of the parties.”18 “Extrinsic evidence is evidence ‘other than the language of the contract that bears on the parties’ intentions.’ ”19 “The extrinsic evidence that may be considered includes ‘the language and conduct of the …
discussed Cited as authority (rule) Danyelle D. Kimp v. Fire Lake Plaza II, LLC
Alaska · 2021 · confidence medium
P. 56(c); Christensen, 335 P.3d at 517 . 9 See Achman, 323 P.3d at 1126 . -8- 7507 We have repeatedly stated that “[t]he goal of contractual interpretation is to give effect to the reasonable expectation of the parties.”10 In giving effect to those expectations, we generally decide the meaning of contractual language as a matter of law.11 We give primary effect to the language of the contract but also consider extrinsic evidence of “the parties’ intent at the time the contract was made.”12 When the parties assert a different intended meaning for contractual language, we first determi…
discussed Cited as authority (rule) Polar Environmental Technologies, Inc v. Rust-Oleum Corporation
D. Alaska · 2020 · confidence medium
“A party must act in subjective good faith, meaning that it cannot act to deprive the other party of the explicit benefits of the contract, and in objective good faith, which consists of acting in a 36Exclusive Sales and License Agreement at 3, ¶ 9, Appendix 1, First Amended Complaint, Docket No. 14. -11- manner that a reasonable person would regard as fair.” Casey v. Semco Energy, Inc., 92 P.3d 379, 384 (Alaska 2004). “[T]he purpose of the covenant is to effectuate the reasonable expectations of the parties, not add to them and ‘cannot be interpreted to prohibit what is expressly per…
discussed Cited as authority (rule) John P. Beardsley, Janet N. Beardsley, and Seaport Air Group, LLC v. Robert N. Jacobsen & Darlene F. Jacobsen Living Trust and Wings Airline Services, Inc. (2×)
Alaska · 2020 · confidence medium
Co., 420 P.3d 1160, 1166 (Alaska 2018) (footnote omitted) (quoting ConocoPhillips Alaska, Inc. v. Williams Alaska Petroleum, Inc., 322 P.3d 114, 122 (Alaska 2014)). 3 Casey v. Semco Energy, Inc., 92 P.3d 379, 383 (Alaska 2004) (citing Exxon Corp. v. State, 40 P.3d 786, 793 (Alaska 2001)). 4 Alaska Diversified Contractors, Inc. v. Lower Kuskokwim Sch.
discussed Cited as authority (rule) Joshua M. Martinez & Robert Martinez v. Government Employees Insurance Company, Charles E. Burnett v. Government Employees Insurance Company
Alaska · 2020 · confidence medium
In that opinion we observed that “GEICO may owe Burnett an independent duty under [Restatement (Second) of Torts] § 323, and he should have an opportunity to try to establish that independent duty at an evidentiary hearing or trial”; we therefore remanded the case “for further proceedings consistent with this opinion.”8 The superior court held an evidentiary hearing on remand, announcing at the outset that 4 Ivy v. Calais Co., 397 P.3d 267, 272 (Alaska 2017). 5 Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004). 6 Paula E. v. State, Dep’t of Health & Soc.
discussed Cited as authority (rule) Coleman v. Alaska USA Federal Credit Union
D. Alaska · 2020 · confidence medium
“A party must act in subjective good faith, meaning that it cannot act to deprive the other party of the explicit benefits of the contract, and in objective good faith, which consists of acting in a manner that a reasonable person would regard as fair.” Casey v. Semco Energy, Inc., 92 P.3d 379, 384 (Alaska 2004). “[T]he purpose of the covenant is to effectuate the reasonable expectations of the parties, not add to them and ‘cannot be interpreted to prohibit what is expressly permitted.’” Id. at 384–85 (quoting Ramsey, 936 P.2d at 133 ).
cited Cited as authority (rule) Alaska Fur Gallery, Inc. v. Tok Hwang
Alaska · 2017 · confidence medium
Dist., 214 P.3d 259, 267-68 (Alaska 2009) (first citing Casey v. Semco Energy Inc., 92 P.3d 379, 384 (Alaska 2004); then citing Ellingstad v. State, Dep't of Nat.
discussed Cited as authority (rule) Silverbow Construction v. Alaska Department of Administration, DGS
Alaska · 2016 · confidence medium
DISCUSSION The court applies its “independent judgment to questions of law, including contract interpretation, adopting the rule of law most persuasive in light of precedent, reason, and policy.”4 Additionally, “[t]he applicability of estoppel principles to a 4 Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004).
discussed Cited as authority (rule) Laybourn v. City of Wasilla (2×) also: Cited "see"
Alaska · 2015 · confidence medium
Casey v. Semco Energy, Inc., 92 P.3d 379, 384 (Alaska 2004) (alterations in original) (quoting Gordon v. Foster, Garner & Williams, 785 P.2d 1196 , 1199 n. 6 (Alaska 1990)). 39 .
cited Cited as authority (rule) Wilson v. State, Department of Law
Alaska · 2015 · confidence medium
Id. (citing Gunter v. Kathy-O-Estates, 87 P.3d 65, 68 (Alaska 2004)). 15 , Id. (quoting Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004)) (internal quotation marks omitted). 16 .
discussed Cited as authority (rule) 2002 Lawrence R. Buchalter Alaska Trust v. Philadelphia Financial Life Assurance Co. (2×)
S.D.N.Y. · 2015 · confidence medium
See Young v. Kelly, 334 P.3d 153, 157 (Alaska 2014) (“Courts will fill in gaps where parties’ reasonable expectations are clear, but they cannot impose performance where it is not clear the parties had a meeting of the minds.”), reh’g denied (Sept. 29, 2014); Renaissance Alaska, 263 P.3d at 40 (“[T]he threshold inquiry in determining whether a case is an appropriate one for gap-filling is whether, in fact, there is an essential term or circumstance for which the parties failed to plan.” (brackets and internal quotation marks omitted)); Casey v. Semco Energy, Inc., 92 P.3d 379, 386 …
discussed Cited as authority (rule) Alaska Fur Gallery, Inc. v. First National Bank Alaska (2×)
Alaska · 2015 · confidence medium
Co., 234 P.3d 1282, 1286 (Alaska 2010) (citing Ellison v. Plumbers & Steam Fitters Union Local 375, 118 P.3d 1070, 1073-74 (Alaska 2005)). 14 Ford v. Municipality of Anchorage, 813 P.2d 654, 655 (Alaska 1991). 15 Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004) (citing Old Harbor Native Corp. v. Afognak Joint Venture, 30 P.3d 101, 104 (Alaska 2001)). 16 The Hernandezes’ motion sought a finding of “Contempt Upon This Court (Similar To Fraud Upon the Court),” which the superior court analyzed under Alaska’s “fraud upon the court” law.
discussed Cited as authority (rule) Alaska Fur Gallery, Inc. v. First National Bank Alaska (2×) also: Cited "see"
Alaska · 2015 · confidence medium
Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004) (citing Old Harbor Native Corp. v. Afognak Joint Venture, 30 P.3d 101, 104 (Alaska 2001). 16 .
discussed Cited as authority (rule) Brown v. Knowles (2×)
Alaska · 2013 · confidence medium
Once a bankruptcy case has been initiated by the filing of a bankruptcy petition,11 section 362(a)(3) of the Bankruptcy Code12 operates as an automatic stay of “any act to obtain possession of property of the estate or of property from the estate or 6 Id. (quoting Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004)). 7 Dashiell R. v. State, Dep’t of Health & Soc.
discussed Cited as authority (rule) Brown v. Knowles
Alaska · 2013 · confidence medium
Once a bankruptcy case has been initiated by the filing of a bankruptcy petition,11 section 362(a)(3) of the Bankruptcy Code12 operates as an automatic stay of “any act to obtain possession of property of the estate or of property from the estate or 6 Id. (quoting Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004)). 7 Dashiell R. v. State, Dep’t of Health & Soc.
discussed Cited as authority (rule) Nautilus Marine Enterprises, Inc. v. Exxon Mobil Corporation (2×)
Alaska · 2013 · confidence medium
Casey v. Semco Energy, Inc., 92 P.3d 379, 383 (Alaska 2004) (internal citations omitted). 13 .
cited Cited as authority (rule) Griffin v. Weber
Alaska · 2013 · confidence medium
In re Protective Proceedings of W.A., 193 P.3d 743, 748 (Alaska 2008) (quoting Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004). 3 .
cited Cited as authority (rule) Williams v. GEICO Casualty Co.
Alaska · 2013 · confidence medium
In re Protective Proceedings of W.A., 193 P.3d 743, 748 (Alaska 2008) (quoting Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004)). 4 .
discussed Cited as authority (rule) Todd Christianson v. First National Bank of Alaska, First National Bank Alaska v. Todd Christianson, individually
Alaska · 2012 · confidence medium
The superior court awarded First National the unpaid principal and interest, finding that Christianson “[a]t all relevant times . . . as sole decision maker for plaintiffs, knowingly and willingly intermingled their assets and disregarded their respective limited liability/corporate/limited partnership forms for purposes of their dealings with [First National].” Christianson argues that the superior court’s finding of intermingling could not “reasonably apply to CFLP,” that CFLP should not be liable on the consolidated loan because it was not the maker or guarantor of the loan, that …
discussed Cited as authority (rule) Dan v. Dan (2×)
Alaska · 2012 · confidence medium
In re Protective Proceedings of W.A., 193 P.3d 743, 748 (Alaska 2008) (quoting Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004)). .
cited Cited as authority (rule) McGraw v. Cox
Alaska · 2012 · confidence medium
In re Protective Proceedings of W.A., 193 P.3d 743, 748 (Alaska 2008) (quoting Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004)). .
discussed Cited as authority (rule) Day v. Williams (2×)
Alaska · 2012 · confidence medium
Farmer v. Farmer, 230 P.3d 689, 693 (Alaska 2010) (quoting Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004)). .
cited Cited as authority (rule) Renaissance Alaska, LLC v. Rutter & Wilbanks Corp.
Alaska · 2011 · confidence medium
Casey v. Semco Energy, Inc., 92 P.3d 379, 386 (Alaska 2004). 18 .
cited Cited as authority (rule) Price v. Eastham
unknown court · 2011 · confidence medium
In re Protective Proceedings of W.A., 193 P.3d 743, 748 (Alaska 2008) (quoting Casey v. Semo Energy, Inc., 92 P.3d 379, 382 (Alaska 2004)). 20 .
cited Cited as authority (rule) Smith v. State, Department of Transportation & Public Facilities
Alaska · 2011 · confidence medium
Casey v. Semco Energy, Inc., 92 P.3d 379, 384 (Alaska 2004). 20 .
cited Cited as authority (rule) Barnett v. Barnett
Alaska · 2010 · confidence medium
In re Protective Proceedings of W.A., 193 P.3d 743, 748 (Alaska 2008) (quoting Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004)). 6 .
cited Cited as authority (rule) Farmer v. Farmer
Alaska · 2010 · confidence medium
Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004) (citing Vezey v. Green, 35 P.3d 14, 20 (Alaska 2001)). 8 .
discussed Cited as authority (rule) Farmer v. Farmer
Alaska · 2010 · confidence medium
P. 53(d)(2). [7] Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004) (citing Vezey v. Green, 35 P.3d 14, 20 (Alaska 2001)). [8] In re W.A., 193 P.3d 743, 748 (Alaska 2008) (citing Casey, 92 P.3d at 382 ). [9] AS 13.26.165(2). [10] See Dodson v. Dodson, 955 P.2d 902, 907 (Alaska 1998) (quoting Demoski v. New, 737 P.2d 780, 784 (Alaska 1987)) ("We `will generally accept the determination of witnesses' credibility that are made by the court as a trier of fact, since the court heard and observed the witnesses first hand.'"). [11] See AS 13.26.165(2)(A) (providing that a court may appoint a…
discussed Cited as authority (rule) AAA Valley Gravel, Inc. v. Totaro (2×)
Alaska · 2009 · confidence medium
Casey v. Semco Energy, Inc., 92 P.3d 379, 383 (Alaska 2004) (citing Exxon Corp. v. State, 40 P.3d 786, 793 (Alaska 2001)); Norville, 84 P.3d at 1004 ; Williams v. Crawford, 982 P.2d 250, 253 (Alaska 1999). .
discussed Cited as authority (rule) Askinuk Corp. v. Lower Yukon School District (2×)
Alaska · 2009 · confidence medium
Casey v. Semco Energy Inc., 92 P.3d 379, 384 (Alaska 2004) (citing Ellingstad v. State, Dep't of Natural Res., 979 P.2d 1000, 1009 (Alaska 1999)). .
discussed Cited as authority (rule) Polar Equipment, Inc. v. Exxon Mobil Corp.
9th Cir. · 2009 · confidence medium
Aso, although the parol evidence rule precludes introduction of evidence about prior agreements or negotiations if there is an integrated contract embodying the final agreement of the parties, “extrinsic evidence is always admissible on the question of the meaning of the words of the contract itself.” Casey v. Semco Energy, Inc., 92 P.3d 379, 383 (Alaska 2004).
discussed Cited as authority (rule) Polar Equipment, Inc. v. Exxon Mobil Corp.
9th Cir. · 2009 · confidence medium
Aso, although the parol evidence rule precludes introduction of evidence about prior agreements or negotiations if there is an integrated contract embodying the final agreement of the parties, “extrinsic evidence is always admissible on the question of the meaning of the words of the contract itself.” Casey v. Semco Energy, Inc., 92 P.3d 379, 383 (Alaska 2004).
cited Cited as authority (rule) In Re the Protective Proceedings of W.A.
Alaska · 2008 · confidence medium
Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004). 4 .
cited Cited as authority (rule) Alaska Construction & Engineering, Inc. v. Balzer Pacific Equipment Co.
Alaska · 2006 · confidence medium
Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004). 9 .
discussed Cited as authority (rule) Harris v. Ahtna, Inc.
Alaska · 2005 · confidence medium
When reviewing the interpretation of contracts under the independent judgment standard, we "adopt[] the rule of law most persuasive in light of precedent, reason, and policy.” Casey v. Semco Energy, Inc., 92 P.3d 379, 382 (Alaska 2004). 6 .
cited Cited as authority (rule) Matanuska Electric Ass'n v. Chugach Electric Ass'n
Alaska · 2004 · confidence medium
Casey v. Semco Energy, Inc., 92 P.3d 379, 383 (Alaska 2004). 36 .
discussed Cited "see" Polar Environmental Technologies, Inc v. Rust-Oleum Corporation
D. Alaska · 2022 · signal: see · confidence high
See Renaissance Alaska, LLC v. Rutter & Wilbanks Corp., 263 P.3d 35, 40 (Alaska 2011) (“‘A court may supply an essential term that has been omitted from an otherwise sufficiently defined contract.’ . . . [C]ourts may fill a gap to ‘ensure fairness where the reasonable expectations of the parties are clear.’ . . . [T]he ‘threshold inquiry in determining whether [a] case is an appropriate one for gap-filling is whether, in fact, there is an essential term or circumstance for which the parties failed to plan.’” (citations omitted) (fourth alteration in original) (quoting Casey v. …
discussed Cited "see" Faulkner Walsh Constructors v. National Casualty Company
D. Alaska · 2022 · signal: see · confidence high
See Laybourn, 362 P.3d 447, at 458 (‘A party asserting a breach of the covenant must prove that the other party failed to act in subjective good faith, ‘meaning that it cannot act to deprive the other party of the explicit benefits of the contract,’ or that it failed to act “in objective good faith, which consists of acting in a manner that a reasonable person would regard as fair.’” (quoting Casey v. Semco Energy, Inc., 92 P.3d 379, 384 (Alaska 2004)).
Retrieving the full opinion text from the archive…
Timothy J. CASEY and David L. Sinclair, Appellants,
v.
SEMCO ENERGY, INC., Appellee
S-10830.
Alaska Supreme Court.
Jun 11, 2004.
92 P.3d 379
Bruce E. Gagnon and Jerome H. Juday, Atkinson, Conway & Gagnon, Anchorage, for Appellants., John C. MeCarron and Dani Crosby, Ash-burn & Mason, P.C., Anchorage, for Appel-lee.
Fabe, Bryner, Carpeneti, Matthews, Eastaugh.
Cited by 51 opinions  |  Published
1 passage pin-cited by 1 case
Pinpoint authority: bottom 70%
Citer courts: Alaska Supreme Court (1)

OPINION

CARPENETI, Justice.

I. INTRODUCTION

Timothy Casey and David Sinclair appeal the superior court's decision that Semeo En'ergy, Inc. did not breach the covenant of good faith and fair dealing when its counsel decided that their inclusion in an early retirement program would jeopardize the program's tax-exempt status under federal law. They argue that the superior court should have construed their severance contracts to provide them other benefits of the early retirement program that were not affected by federal law. Because the superior court properly interpreted the contract, and because the covenant of good faith and fair dealing does not add duties to a contract, we affirm.

II. FACTS AND PROCEEDINGS

A. Facts

In November 1999 Appeliee Semco Energy, Inc. (Semeo) purchased ENSTAR Natural Gas Company. The next month Semeo terminated ENSTAR managers Timothy J. Casey and David L. Sinclair effective at the end of the year, despite its assurances, given during the negotiations for the sale, that it intended to retain ENSTAR's management. A condition of the sale was that the top management sign severance agreements, which they did in October 1999, providing for[*381] lump-sum severance payments and several months of health insurance coverage in the event of involuntary termination or voluntary termination following a significant change in duties. Two other managers, Richard Barnes and Thomas Waldock, left ENSTAR voluntarily in early December 1999 after their salaries were reduced.

The four departing managers later decided that the severance agreements were inadequate, and Barnes and Waldock began negotiating for additional benefits on their collective behalf. On December 15, 1999 the parties raised the possibility that Semeo would offer an early retirement program or plan (ERP), perhaps adding three or five years of age and service to an employee's existing benefit level, to encourage other ENSTAR employees to leave. Semco President Carl Porter said that if the ERP was offered he would "make it happen" for the four departing managers. A draft agreement to this effect dated December 16, 1999 provided that "[ilf SEMCO implements an Early Retirement Program on or before [date], Employee will be considered as having retired for purposes of that Early Retirement Plan. SEMCO makes no commitment to Employee that it will implement such a Plan." Waldock, an attorney, consulted an advisor who specialized in benefit plans who warned that applying any new ERP retroactively only to certain highly-compensated employees would probably disqualify the plan from tax-exempt eligibility under section 1051 of the Employee Retirement Income Security Act (ERISA). [1] Wal-dock passed this concern along to Bud Madi-gan, an attorney and one of Semeo's primary negotiators on the issue.

Negotiations followed, and on January 14, 2000 the four managers signed settlement agreements under which they dropped all outstanding claims against Semco in exchange for large lump-sum severance payments, inclusion in the ENSTAR retiree medical program, and inclusion in the possible future ERP if the ERISA risk could be avoided. Specifically, paragraph II(D) of the settlement agreements provided:

If Semeo implements an Early Retirement Plan for the employees of the ENSTAR Natural Gas Division on or before June 80, 2001, Employee will, subject to the following provisions of this paragraph, be considered as having retired for purposes of that Early Retirement Plan. Employee will not be so considered if in SEMCO's sole judgment exercised in good fuith, based upon an opinion of SEMCO's counsel, the inclusion of the Employee in such an Early Retirement Plan would result in a risk that the ENSTAR Natural Gas Retirement Plan For Salaried Employees would no longer be a Qualified Plan under Section 401 of the Internal Revenue Code. SEM-CO makes no commitment to Employee that it will implement such an Early Retirement Plan.

(Emphasis added.) At the time that this paragraph was drafted, Waldock warned all the managers in an e-mail that "we will be included UNLESS in SEMCO's sole judgment our inclusion would jeopardize the ERISA qualification of the Plan. SEMCO will not offer any cash payment in lieu thereof. You can bet that SEMCO will be VERY conservative when it assesses the risk of Plan disqualification."

In July 2000 Semeo adopted an ERP consisting of a severance payment equal to nine months' pay, a twenty percent discount on co-payments for medical visits, and a pension plan enhanced by five years of age and five years of service. But Semeo did not include the four managers in the plan. Semco submitted the question of ERISA disqualification to its actuary, Ray Shapiro, and its counsel, Larry Gagnon, both of whom issued opinions stating that allowing the managers to participate would jeopardize the tax status of the plan under ERISA. Waldock called Madigan in late August 2000 to ask whether the managers would be eligible for just the severance pay and health insurance aspects of the ERP, since these benefits would not disqualify the pension program. Waldock[*382] asked whether the opinion had been issued on the assumption that the ERP would be offered only to the four managers in question, or whether it would still be discriminatory if offered to all otherwise eligible employees who had retired in the period prior to the ERP being officially offered. Madigan responded that he had only instructed his advisors to investigate the possibility of discrimination if the four managers were included. Madigan then asked Gagnon to research how many otherwise eligible employees had retired or left ENSTAR during the relevant period. Gagnon discovered that no such employees had left during the relevant period, and wrote another opinion in late September 2000 stating that even if the discrimination testing had taken all relevant employees into account, there would still have been the risk of disqualification of the ERP's ERISA status.

B. Proceedings

Casey and Sinclair filed suit in November 2000, alleging breach of contract, violation of the covenant of good faith and fair dealing, and misrepresentation. Trial was held on January 7-9, 2002 before Superior Court Judge John Reese. At trial, Casey and Sinclair presented the testimony of an expert, Norman Milks. Milks testified that Casey and Sinclair's inclusion in the ERP could indeed have created a risk of disqualification of the ERP's ERISA status, but that Semco could have provided Casey and Sinclair with the ERP benefits or their equivalent by creating a benefit plan that applied to any employee who retired at about the same time as the managers, by simply making lump-sum payments to Casey and Sinclair that were equivalent to the pension benefits, or by creating a "top hat" plan in which Casey and Sinclair would have received periodic cash payments equivalent to those under the ERP pension. Milks also testified that Semeo could have provided Casey and Sinclair with just the severance pay and medical co-payment aspects of the ERP without any risk to its ERISA status. Milks also testified that Semco could have eliminated the risk of ERISA disqualification by obtaining an opinion letter to that effect from the IRS.

The superior court denied all of Casey and Sinclair's claims. The court held that the settlement agreement only required Semeo to obtain a good faith opinion from its counsel about whether inclusion of Casey and Sinclair in the ERP might jeopardize its ERISA status, that Semeo had met this condition when Gagnon issued his opinion in good faith, and that any of Porter's statements that "we'll take care of it" were unclear and unenforceable in light of the settlement agreements' integration clauses. Casey and Sinclair appeal.

III. STANDARD OF REVIEW

We apply our independent judgment to questions of law, [2] including contract interpretation, [3] adopting the rule of law most persuasive in light of precedent, reason, and policy. [4] We review a trial court's factual findings for clear error, which is found when we are left with a definite and firm conviction based on the entire record that a mistake has been made. [5] Whether there has been a breach of the covenant of good faith and fair dealing is a question of fact, and is therefore reviewed only for clear error. [6] It is the function of the superior court, rather than this court, to weigh conflicting evidence and assess the credibility of witnesses. [7]

IV. DISCUSSION

Casey and Sinclair challenge the superior court's factual findings, its application of the[*383] covenant of good faith and fair dealing to the agreement, and its refusal to "fill the gap" by granting them two of the three benefits of the early retirement program. We reject each of these challenges.

A. - The Parties Did Not Intend the Settlement Agreements To Require Semco To Exhaust All Means of Including Casey and Sinclair in the Early Retirement Plan.

The goal of contractual interpretation is to give effect to the reasonable expectation of the parties. [8] 'We consider disputed language in its context in the contract as a whole and look to the purposes of the contract, the cireumstances surrounding its formation, and the case law on similar contractual provisions. [9] The parol evidence rule provides that an integrated contract (one that is intended to describe the entire agreement cannot be varied through the introduction of evidence about prior negotiations or agreements. [10] However, extrinsic evidence is always admissible on the question of the meaning of the words of the contract itself. [11] If the parties disagree about the interpretation of a provision, we inquire into what the parties knew or had reason to know of each other's position; [12] a party prevails when he or she did not know or have reason to know that the other side interpreted the provision differently, but the other party did know or have reason to know of the disagreement. [13] When a phrase in a contract is understood differently by the parties and is sufficiently ambiguous to support both meanings, no contract exists. [14]

Casey and Sinclair contend that the true meaning of paragraph II(D) was that "Semco [could] avoid giving Casey and Sinclair the early retirement benefits only if there was a risk of ERISA disqualification that Semeo could not avoid by reasonable means." They argue that their interpretation is consistent with the purpose of the settlement agreements, which was to give them more benefits than they had obtained in the severance agreements. They also argue that their interpretation is consistent with Porter's statements that he would "make it happen" for them and Madigan's statements that he expected that Semeo would "find a way to put them in the plan if [it] could." In effect, they argue that the superior court should have weighed the testimonial evidence more heavily in their favor. We reject that argument.

-It is the role of the trial court, not the appellate court, to evaluate the credibility of the witnesses and to weigh the evidence. [15] Although Sinclair testified that his understanding of "good faith" was that Semeo would have to make serious efforts to include him in the early retirement plan, he also suggested that his expectation that he would be included was based more on Carl Porter's statements, which he received second-hand, than on the words of the settlement agreement. In contrast, Madigan testified that the disputed language had been drafted at the last moment and that his intent was to "put them in the plan if we could do it without a risk to qualification," not to research alternative ways to approximate benefits similar to those in the plan if the risk of disqualification was determined to exist. The court found Madigan's testimony to be "eredible and convincing." There was ample evidence to support the superior court's decision to accept Semeo's rather than Casey and Sinclair's version of the facts.

Casey and Sinclair argue that the superior court's interpretation of the contract constitutes legal error because it violates the rule[*384] that contracts should be interpreted so as to give effect to all their provisions and to find all provisions meaningful to the extent that this is possible. [16] They point out that a certain amount of ERISA risk had already been identified by the time that the final version of paragraph II(D) was drafted-indeed, this risk was the very reason why the paragraph was redrafted-and that conditioning their inclusion in the plan on a risk assessment by Semeo's counsel would be a redundant exercise, the outcome of which was almost certain. Thus, they claim, it is more reasonable to interpret paragraph II(D) as requiring Semco to find a way to include them. Semco argues that requiring it to find a way to include Casey and Sinclair by any reasonable means renders part of the text of paragraph II(D) meaningless. [17] The central mystery of Casey and Sinclair's case is why they would agree to such a narrowly drawn provision, especially in light of their representative's warnings that "SEMCO will not offer any cash payment in lieu" of the plan and "[ylou can bet that SEMCO will be VERY conservative when it assesses the risk of Plan disqualification."

Nonetheless, "parties are free to make arrangements that seem unreasonable to others." [18] The intent of the parties is the primary issue, and their intent can be drawn from extrinsic evidence, especially their express attempts to comply with the contract as they understood it. [19] Based on the superior court's factual findings regarding the parties' intent in drafting the contractual language, and upon our reading of that language, we hold that paragraph II(D) required only that Semeo obtain its counsel's good faith opinion regarding ERISA disqualification.

B. The Covenant of Good Faith and Fair Dealing Did Not Require Sem-co To Find a Way To Include Casey and Sinclair in the Early Retirement Plan.

Casey and Sinclair argue that because the covenant of good faith and fair dealing requires a party to take reasonable steps to ensure the occurrence of a condition precedent to a contract, Semeo had to take reasonable steps to include them in the ERP. Because the covenant of good faith and fair dealing cannot add terms to a contract or prohibit what a contract explicitly permits, we reject Casey and Sinclair's claim that Semeo breached the covenant of good faith and fair dealing.

The covenant of good faith and fair dealing is implied in all contracts in Alaska. [20] "[W]here a party has promised to attempt to satisfy a condition, the attempt must be made in good faith." [21] A party must act in subjective good faith, meaning that it cannot act to deprive the other party of the explicit benefits of the contract, and in objective good faith, which consists of acting in a manner that a reasonable person would regard as fair." [22] "Where a duty of one party is subject to the occurrence of a condition, the additional duty of good faith and fair dealing ... may require ... refraining from conduct that will prevent or hinder the occurrence of that condition or ... taking affirmative steps to cause its occurrence. [23] But the purpose of the covenant is to effectuate the reasonable expectations of the parties, not add to them, [24] and "cannot be interpreted[*385] to prohibit what is expressly permitted." [25]

Casey and Sinclair rely on the doctrine that a party cannot be excused from contractual performance by the nonoccurrence of a condition over which that party has control. The Restatement (Second) of Contracts seetion 245 provides that "[where a party's breach by non-performance contributes materially to the non-occurrence of a condition of one of his duties, the non-occurrence is excused." [26] The classic case of a breach of the covenant of good faith and fair dealing regarding contractual conditions occurs when an obligation is conditioned on a party's ability to obtain financing or insurance, but the party fails to make reasonable efforts to obtain such financing or insurance. [27] Where a condition is within the sole control of a single party, most authorities require that party to take "reasonable" steps to obtain the occurrence of the condition. [28] The superior court found that Semco and its agents acted in good faith, both subjectively and objectively, in fulfilling Semeo's contractual obligations to Casey and Sinclair. It also found Casey and Sinclair's argument that Semeo could have included them in a separate retirement plan to be irrelevant because "neither the express language of the Settlement Agreements nor the implied good faith and fair dealing covenant require[s] Semeo to provide more than the parties bargained for."

Casey and Sinclair argue that taking reasonable steps to obtain the occurrence of the condition required Semeo to "consider[] ways to extend the benefits of the plan" to them. They argue that the superior court misunderstood the application of the covenant of good faith and fair dealing to their case, because the superior court read the settlement agreements as requiring Semeo only to submit the question of whether Casey and Sinclair's inclusion would create a risk of ERISA disqualification to counsel, and as requiring Semeo's counsel to consider the question in accordance with the law and without being arbitrary.

The superior court was correct in its interpretation of paragraph II(D) of the settlement agreements. "The covenant of good faith and fair dealing is implied in every contract in order to effectuate the reasonable expectations of the parties to the agreement, not to alter those expectations." [29] The covenant of good faith and fair dealing "will not create a duty where one does not exist." [30] The doctrine "does not provide courts with carte blanche to rewrite contracts [31] and cannot be interpreted to permit what is expressly prohibited by the contract. [32] While the text of paragraph II(D) promises Casey and Sinclair that they could be included in the ERP, it specifically disclaims any responsibility for Semeo to adopt an ERP, and further conditions their inclusion on Semeo's counsel not finding any potential risk to the ERP's ERISA qualification. The language is so carefully hedged that Semeo has very little responsibility at all; it must merely adopt a plan and submit it to counsel for an opinion. Moreover, the paragraph defines "implement[ing] an Early Retirement Plan" as "amend[ing] the ENSTAR Natural Gas Retirement Plan for Salaried Employees ... to provide enhanced benefits (such as increased years of service) which function as incentives to employees to accelerate termination of employment to a date preceding[*386] July 1, 2001." It would considerably increase Semeo's duties to require it to put forth all reasonable efforts to structure the plan so that these four employees may be included, or to put forth all reasonable efforts to provide benefits to these employees that are similar to but outside of the structure of the plan. Since Casey and Sinclair do not allege that Semco and its counsel reached their conclusion about ERISA disqualification in bad faitht-indeed, their own expert agreed that such a risk existed-wé uphold the superior court's conclusion that there was no breach of the covenant of good faith and fair dealing.

Casey and Sinclair also argue that Semeo breached the covenant of good faith and fair dealing by refusing to grant them the severance pay and medical benefit components of the ERP solely because they were ineligible for the pension aspect of the ERP. They argue that this violated the covenant as defined in Restatement section 205, which states that a breach of the covenant includes "abuse of power to specify terms." [33] While Semeo could have provided those benefits, it was not required to do so under the settlement agreement. Therefore we affirm the holding of the superior court that Semeo did not breach the implied covenant of good faith and fair dealing.

C. The Superior Court Did Not Err in Declining To "Fill the Gap" in the Agreements by Requiring Semco To Give Casey and Sinclair Two of the Three Components of the Early Retirement Plan.

Finally, Casey and Sinclair argue that because the ERISA risk foreseen in paragraph II(D) affected only one of the three components of the ERP-the enhanced pension benefit adding five years of age and five years of service, but not the additional twenty percent of medical visit co-payments to be paid by the company or the nine months transitional pay in a lump sum-the parties had left a "gap" in the contract. Casey and Sinclair argue that the superior court should have filled this gap by implying a new term granting them the two remaining benefits of the ERP. Semco responds that "filling the gap" in this manner would be inappropriate because Semeo never would have agreed to the terms proposed by Casey and Sinclair.

A court may supply an essential term that has been omitted from an otherwise sufficiently defined contract. [34] Because the parties cannot plan for all contingencies that might arise, a court may fill in gaps to ensure fairness where the reasonable expectations of the parties are clear." [35] But based on the integration clauses in the settlement agreements and the superior court's findings regarding the parties' intent, we conclude that there were no contractual gaps to fill.

The threshold inquiry in determining whether this case is an appropriate one for "gap-filling" is whether, in fact, there is an essential term or cireumstance for which the parties failed to plan. Casey and Sinclair argue that their settlement agreements were "skeletal" ones in which the possibility of only one aspect of the plan causing a risk to ERISA qualification was never discussed or planned for, primarily since the content of the future Semeo ERP amendment was unknown at the time. But our reading of the contractual language and the superior court's factual finding regarding the intent of the parties lead us to conclude that Semeo was required under the contract only to obtain a good faith legal opinion from its counsel as to whether inclusion of Casey and Sinclair in the ERP would risk disqualification under ERISA. The settlement agreements were fully integrated: Both contain integration clauses that state, "[this is the entire Agreement between Employee and SEMCO. SEMCO has made no promises to Employee other than those in this agreement." We therefore reject Casey and Sinclair's argument that the superior court should have read new terms into the agreement in order to fill contractual gaps because we find that there were no gaps to fill.

[*387] v. CONCLUSION

Because the superior court did not err in its interpretation of the severance agreements, we AFFIRM.

MATTHEWS and EASTAUGH, Justices, not participating.
1

. 29 U.S.CA. § 1051(2) (West 2003) (providing that tax exemption of employee pension plan under Employee Retirement Security Act shall not apply to "a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees"").

2

. McCormick v. Reliance Ins. Co., 46 P.3d 1009, 1012 (Alaska 2002).

3

. Old Harbor Native Corp. v. Afognak Joint Venture, 30 P.3d 101, 104 (Alaska 2001).

5

. - Id. (internal citations omitted).

4

. Vezey v. Green, 35 P.3d 14, 20 (Alaska 2001) (quoting Guin v. Ha, 591 P.2d 1281, 1284 n. 6 (Alaska 1979)).

6

. Luedtke v. Nabors Alaska Drilling, Inc., 834 P.2d 1220, 1223 (Alaska 1992). If the case presents only undisputed facts, then the covenant of good faith and fair dealing can be reviewed de novo. Id.

7

. Krossa v. All Alaskan Seafoods, Inc., 37 P.3d 411, 415 (Alaska 2001).

8

. Exxon Corp. v. State, 40 P.3d 786, 793 (Alaska 2001).

9

. Zuelsdorf v. Univ. of Alaska, Fairbanks, 794 P.2d 932, 934 (Alaska 1990).

10

. Alaska Diversified Contractors, Inc. v. Lower Kuskokwim Sch. Dist., 778 P.2d4 581, 583 (Alaska 1989).

11

. Id. at 584 (citing Restatement (Secomp) or ConTracts § 214 cmt. b (1981)).

12

. Id. at 584 n. 3 (quoting RestaremEnt (Seconp) or Contracts § 214 cmt. b).

13

. - Restatement (SEcowmp) or Contracts § 201(2).

14

. Krossa v. All Alaskan Seafoods, Inc., 37 P.3d 411, 416 (Alaska 2001).

16

. See, eg., Grant v. Anchorage Police Dep't, 20 P.3d 553, 556 (Alaska 2001); Peterson v. Wirum, 625 P.2d 866, 872 n. 11 (Alaska 1981).

17

. See Grant, 20 P.3d at 556.

18

. Restatement (SEconp) or Contracts § 203 ermt. c.

19

. Sprucewood Inv. Corp. v. Alaska Hous. Fin. Corp., 33 P.3d 1156, 1162 (Alaska 2001).

20

. Ellingstad v. State, Dep't of Natural Res., 979 P.2d 1000, 1009 (Alaska 1999).

21

. - Gordon v. Foster, Garner & Williams, 785 P.2d 1196, 1199 (Alaska 1990).

22

. Ramsey v. City of Sand Point, 936 P.2d 126, 133 (Alaska 1997).

23

. Gordon, 785 P.2d at 1199 n. 6 (quoting Restatement (SEcomp) or Contracts § 245 cmt. a).

24

. Era Aviation, Inc. v. Seekins, 973 P.2d 1137, 1141 (Alaska 1999).

26

. Quoted in Gordon, 785 P.2d at 1199 n. 6, and Klondike Ind. Corp. v. Gibson, 741 P.2d 1161, 1167 (Alaska 1987).

27

. Eg., Cauff, Lippman & Co. v. Apogee Fin. Group, Inc., 807 F.Supp. 1007, 1022-24 (S.D.N.Y.1992) (finding breach of covenant of good faith and fair dealing where party refused to proceed with certain meetings and finance agreements so as to obtain financing for contract); Gordon, 785 P.2d at 1199-1200 & n. 8 (remanding to find whether intent of parties required party to attempt to obtain insurance, or actually required insurance itself).

28

. Dayan v. McDonald's Corp., 125 Ill.App.3d 972, 81 Ill.Dec. 156, 466 N.E.2d 958, 972 (1984); Jorn Epwarp Murray, Jr, Murray on Contracts § 111(B), at 622-23 (3d ed.1990).

29

. Ramsey, 936 P.2d at 133 (internal citation omitted).

30

. Lorenz v. CSX Corp. 736 F.Supp. 650, 656 (W.D.Pa.1990).

33

. - Restatement (Seconp) or Contracts § 205 cmt. d (1981).

34

. Id. at§ 204.

35

. Magill v. Nelbro Packing Co., 43 P.3d 140, 142 (Alaska 2001). .