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Munn v. Thornton (4/17/98), 956 P 2d 1213
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Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the attention of
the Clerk of the Appellate Courts, 303 K Street, Anchorage, Alaska 99501, phone
(907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
STEVE MUNN and JEANNIE MUNN, )
) Supreme Court No. S-7574
Appellants, )
) Superior Court No.
v. ) 3KN-94-643 CI
)
JONATHAN E. THORNTON, d/b/a ) O P I N I O N
J.E. THORNTON GENERAL )
CONTRACTORS, ) [No. 4972 - April 17, 1998]
)
Appellee. )
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Kenai,
Charles K. Cranston, Judge.
Appearances: William G. Royce, Anchorage, for
Appellants. Sanford M. Gibbs, Brown, Waller & Gibbs, Anchorage,
and P. Dennis Maloney, Maloney & Haggart, Anchorage, for Appellee.
Before: Matthews, Chief Justice, Compton,
Eastaugh, Fabe, and Bryner, Justices.
FABE, Justice.
I. INTRODUCTION
Jonathan Thornton, a general contractor, entered into an
oral contract to build a house for Steve and Jeannie Munn.
Thornton maintains that he agreed to build the house for the cost
of time and materials plus 15 percent with no cap on the total
cost. The Munns contend that their agreement included a cap on
total cost for the house. The cost escalated above this alleged
cap, and the Munns refused to pay the outstanding balance.
Thornton filed a complaint against the Munns. After a trial, the
superior court ruled in Thornton's favor, finding that he was
entitled to recovery under an oral contract or under the doctrines
of unjust enrichment and promissory estoppel. The trial court also
found that Thornton did not breach his duties under the contract,
that he had a paramount lien on the Munns' house, and that the
Alaska Unfair Trade Practices Act did not apply to this litigation.
We affirm.
II. FACTS AND PROCEEDINGS
After a fire damaged a house owned by the Munns, they
solicited bids to replace it. Thornton submitted an estimate of
$149,800 to rebuild the 1200-square-foot house. Steve Munn then
gave Thornton a modified set of plans for a 2316-square-foot house
with a 372-square-foot deck. The Munns hired Thornton to drive
steel pilings for the house's foundation, agreeing orally to pay
Thornton his cost for labor and materials plus 15 percent for this
work. The Munns paid Thornton's bill of $4,815.53 for the work,
including $30 per hour straight time for labor.
Thornton submitted a new estimate of $169,620 to build
the "new custom house as per plans,"including his work on the
pilings. Thornton testified that he did not consider this to be a
"firm estimate"because the plans were not complete. He also
testified that Steve Munn responded that the bid was less than he
had expected and that "he had another $50,000 to $80,000 to play
with."
The Munns and Thornton agree that Thornton offered two
options for building the house. They also agree that the first
option involved building it for the total price of $169,620 with
written change orders to accommodate modifications at either a
negotiated price or on a time and materials basis. They disagree,
however, about the terms of the second option, under which they
eventually proceeded. Specifically, they dispute whether the
second option included a cap on cost, and whether labor was to be
billed at a flat rate. Although Steve Munn conceded that Thornton
"didn't say in those specific words there's a cap of [$]169,620,"
Munn testified that, under the second option, Thornton offered to
build the house for the cost of time and materials plus 15 percent,
subject to a cap of $169,620. He believed that the contract was
subject to this cap because Thornton told him "that the [$]169,620
was a very good number, he was very comfortable with it, he had a
very good crew, and he could build the house for less than that."
According to Steve Munn, Thornton made this alternative offer
because Steve Munn planned to be away from the site during much of
the building, and he and Thornton believed that this alternative
would avoid the need for Jeannie Munn to "deal with change orders."
Finally, Steve Munn testified that he understood that Thornton's
actual cost for labor was generally $30 per hour.
In contrast, Thornton testified that under the second
option he offered to build the house for the cost of time and
materials plus 15 percent. Thornton testified that he explained
that he would provide the Munns with a statement of his expenses
and copies of invoices for materials or subcontractors at the end
of each month. He also testified that he informed the Munns that
he would bill carpenters at $30 per hour. Thornton and the Munns
agree that Thornton said he would prepare a written contract, but
never did.
On October 18, 1993, Steve Munn called Thornton and told
him to begin construction on the house. Thornton began
construction and sent detailed bills in November, December,
January, and February. The bills itemized labor costs for each
employee, generally billed at $30 per hour straight time and $45
overtime. The bills also included itemized costs for materials and
subcontractors, and additional charges for "15% Profit"on these
subtotals. The Munns paid these first four bills, totaling (along
with the bill for the pile driving) $173,440.72. Steve Munn
testified that he believed that this amount was within the cap,
considering the extra $10,000 cost of an entertainment center he
had instructed Thornton to build.
In January 1994 a loan officer with the Munns' bank
called Thornton and asked him to estimate how much it would cost to
complete the house. Thornton guessed that it would cost $20,000
over the original estimate of $169,620. Later in February,
Thornton estimated in a conversation with Munn that it would cost
an additional $47,000. [Fn. 1] Finally, Thornton testified that
Munn came to his office after the February billing:
Well, Mr. Munn came in my office and his first
comment was "how bad is it", and we sat down and we began
discussing and I told him that right now we were at, I believe,
$173,440, something like that. And I told him to the best I could
come up with, that it was gonna take another [$]77,400 to finish.
And he stated that, oh, that was more than he expected, but he
loved the house, if he were to do it again he wouldn't change a
thing, the quality was great, and -- and then we went on to discuss
the entertainment center in more detail of what he was wanting.
And then about the money, he said that he'd used up all of his
insurance proceeds, and that he was arranging some type of a note
at the bank. He said that he couldn't close on that, and that his
funds would be available when the house was done, so he wanted to
know if I could give him one final bill. And at that point I was
thinking, well, we're about 45 days or so from completion, I bill
about every 30 days, I'd just be holding -- holding the final bill
for another 15 days. I told him I didn't think that'd be a
problem. He told me that if I needed to get interim financing to
go ahead and do that and bill him for the interest and the fees
associated with that, and -- And he said that I could check with
[his loan officer] if I needed to inquire about the funds.
Steve Munn agreed that he told Thornton that he was
planning to obtain additional financing to complete the house and
requested that all remaining charges be combined in one final bill.
Steve Munn also acknowledged that he did not protest any of
Thornton's bills, explaining that if the cost of the entertainment
center and other items Munn had supplied were subtracted, the total
amount he would owe Thornton would still be close to $170,000. [Fn.
2] Finally, he testified that he received a loan.
Thornton borrowed $85,000 in order to continue work on
the house and finished it in early May. The Munns refused to pay
the outstanding amount of $109,503.28 claimed by Thornton.
Thornton initiated a civil action based on claims of
breach of contract, foreclosure of his mechanics lien, unjust
enrichment, misrepresentation and equitable estoppel. The Munns
moved for summary judgment. The superior court granted the motion
with regard to the misrepresentation claim, but otherwise denied
it. Trial without a jury took place before Superior Court Judge
Charles K. Cranston over thirteen days between September 19 and
October 19, 1995. The court ruled in favor of Thornton, concluding
that the Munns breached an oral agreement with Thornton and owed
him $107,783.21 for unpaid bills. The trial court ordered that the
house be sold to pay Thornton's lien, and awarded Thornton
attorney's fees, costs, and prejudgment interest. The Munns
appeal.
III. DISCUSSION
A. The Superior Court Did Not Err in Finding an Oral
Contract on the Terms Urged by Thornton.
The superior court found that the parties entered into an
oral contract (1) with no cap on cost, and (2) with a flat rate of
$30 per hour for labor. These findings will be discussed in turn.
1. Cap on costs
The superior court found that "the parties' statements,
both written and oral, and actions, support the conclusion that
after on or about October 18, 1993, the parties had an oral
agreement that Thornton would construct the Munn house on a time
and materials plus 15% basis, with no cap of $169,620." The Munns
argue that this finding was in error. [Fn. 3] They contend that
there was no "meeting of the minds"with regard to the existence of
a cap. [Fn. 4] Because the superior court's finding that the
parties reached a "meeting of the minds"and so formed a contract
is a question of fact, we review it under the clearly erroneous
standard. Young v. Hobbs, 916 P.2d 485, 487-88 (Alaska 1996).
In determining whether the parties have agreed upon the
terms of a contract, the court looks to the "objective meaning of
words used." Zeman v. Lufthansa German Airlines, 699 P.2d 1274,
1281 (Alaska 1985) (citation omitted). "A party cannot rely on its
subjective intent to defeat the existence of a contract if its
words and actions objectively and reasonably led another to
believe"that the party did intend to be bound. Id. Furthermore,
"it is permissible to infer the elements of the contract from past
dealings of the parties, their conversations and business custom."
Howarth v. First Nat'l Bank of Anchorage, 596 P.2d 1164, 1168
(Alaska 1979). Additionally, "the parties' conduct after entering
into the contract is probative of the intent behind the agreement."
Municipality of Anchorage v. Gentile, 922 P.2d 248, 259 (Alaska
1996).
The record supports the court's finding that the parties
agreed to a cost-plus contract without a cap. In addition to
Thornton's testimony that he offered to build the house for the
cost of time and materials plus 15 percent, Steve Munn testified,
albeit somewhat ambiguously, that he never asked and Thornton never
expressly offered to make the contract subject to a cap. [Fn. 5]
Together, their testimony supports the court's finding that
Thornton's offer was not subject to a cap and that the Munns' words
and actions, regardless of their subjective intent, objectively and
reasonably led Thornton to believe that they accepted the terms of
that offer. See Zeman, 699 P.2d at 1281.
Moreover, the superior court properly relied upon the
parties' interactions before and after entering into the contract
in reaching the conclusion that the parties did not intend the
contract to be subject to a cap. See Howarth, 596 P.2d at 1168;
see also Gentile, 922 P.2d at 259. First, the court found that
prior to entering the agreement Thornton provided foundation and
piling work to the Munns on a time and materials plus 15 percent
basis. Second, the court found that after entering the agreement
Thornton billed the Munns for four months in a manner consistent
with an agreement not subject to a cap and that the Munns "paid
these bills without question." It further found that the Munns
never told Thornton that they believed there was a cap of $169,620;
rather, when informed that the cost of the house would be an
additional $77,400 over the amount of the cap, Steve Munn "told
Thornton he was going to get bank financing"and requested that
Thornton "put all the charges on one final bill." The court also
found that the Munns subsequently applied for a loan. These
undisputed findings support the court's conclusion.
Finally, the court weighed the testimony of the parties
and found that "[t]o the extent that the Munns' testimony is
inconsistent with their actions . . . their actions [are] more
persuasive than their testimony"and that "Thornton's testimony
[is] more credible than Munn's on the contractual issue." "When
the trial judge's decision is dependent largely upon oral testimony
of the witnesses seen and heard at trial, this court must give due
regard to the trial judge's opportunity to judge the credibility of
those witnesses." Evans v. Evans, 869 P.2d 478, 480-81 (Alaska
1994).
In summary, the superior court's finding of an oral cost-
plus agreement with no cap is supported by the testimony concerning
contract formation, documentary evidence, the parties' prior
dealings, and the parties' subsequent words and actions. Its
finding was therefore not clearly erroneous. [Fn. 6]
2. Labor charges
The superior court also found that Thornton had explained
to Steve Munn that billing for labor would be at a flat rate of $30
per hour. The Munns contend that they never agreed to a "flat"$30
per hour straight time charge for laborers, as opposed to the
"actual"cost of labor plus 15 percent. They claim that they
understood that Thornton paid his workers $30 per hour and argue
that Thornton should have charged them the actual labor cost for
construction plus 15 percent. Instead, Thornton billed out most
workers at $30 per hour straight time and $45 per hour overtime.
Workers were actually paid between $18 per hour and $5 per hour.
[Fn. 7]
The evidence supports the superior court's finding that
the oral agreement provided for a flat rate of $30 per hour maximum
for laborers. Thornton testified that he explained to Steve Munn
when he offered to build the house that he would bill carpenters at
a flat rate of $30 per hour. The superior court specifically found
this testimony more credible than Steve Munn's testimony on the
issue. See Evans, 869 P.2d at 480-81 (noting that this court gives
due regard to trial judge's opportunity to judge the credibility of
witnesses).
As the Munns apparently never disputed the labor charges
on Thornton's bills, [Fn. 8] the trial court's finding on this
issue is also supported by the Munns' subsequent conduct. See
Gentile, 922 P.2d at 259. Additionally, the superior court relied
on evidence that prior to entering the contract, the Munns paid
Thornton's bill for foundation and piling work which included a $30
per hour rate for labor. [Fn. 9] Again, such prior dealings may be
probative of the parties' agreement. See Howarth, 596 P.2d at
1168.
Given Thornton's testimony regarding contract formation,
the conduct of the parties, and the prior dealings of the parties,
the superior court's finding that the oral agreement provided for
a flat rate of $30 per hour maximum for laborers is not clearly
erroneous.
B. The Cost-Plus Contract Did Not Create a Fiduciary
Relationship between Thornton and the Munns.
The superior court found that no fiduciary duty exists
between an owner and a building contractor in a cost-plus contract.
The Munns argue that a cost-plus contractor under the terms adopted
by the superior court "is in a special relationship of trust and
confidence with respect to the owner,"and that a fiduciary duty
should therefore be recognized. They emphasize Thornton's
knowledge that Steve Munn would be away from the construction site
during much of the building. We exercise our independent judgment
in reviewing questions of law, such as whether a cost-plus contract
creates a fiduciary relationship. See Summers v. Hagen, 852 P.2d
1165, 1169 (Alaska 1993). Our "duty is to adopt the rule of law
that is most persuasive in light of precedent, reason, and policy."
Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979).
We have stated that a "fiduciary relationship exists when
one imposes a special confidence in another, so that the latter, in
equity and good conscience, is bound to act in good faith and with
due regard to the interests of the one imposing the confidence."
Paskvan v. Mesich, 455 P.2d 229, 232 (Alaska 1969). We have also
noted that "[l]oyalty and the disavowal of self interest are
hallmarks of the fiduciary's role." Wagner v. Key Bank of Alaska,
846 P.2d 112, 116 (Alaska 1993). Fiduciary relationships are
generally defined by a level of trust beyond that in ordinary
business relationships. See Black's Law Dictionary 625 (6th ed.
1990) (stating that fiduciary duty is "the highest standard of duty
implied by law"). Thus, we have recognized fiduciary relationships
between business partners or co-owners, see, e.g., Paskvan, 455
P.2d at 232, between professionals such as lawyers and their
clients, see, e.g., Cummings v. Sea Lion Corp., 924 P.2d 1011, 1021
(Alaska 1996), and in relationships involving trusts and
guardianships. See, e.g., Alaska State Employees Assoc. v. Alaska
Public Employees Assoc., 825 P.2d 451, 459 (Alaska 1991). We have
not, however, recognized a fiduciary relationship between
contractor and owner.
The Munns' only precedential support on this issue is
Jones v. J.H. Hiser Construction Co., 484 A.2d 302 (Md. Spec. App.
1984), in which the court held that a cost-plus contractor owed a
fiduciary duty to the owners of a home. [Fn. 10] See id. at 305.
The court in Jones, however, relied on an express provision in the
parties' contract that the contractor "accepted a 'relationship of
trust and confidence'"with the owners, "agreed to further their
interests by performing 'the Work . . . in the most . . .
economical manner consistent with' their interests,"and promised
"to 'keep . . . full and detail[ed] accounts.'" Id. at 304.
Because Jones deals with a breach of the express provisions of a
contract, it offers scant support for implying a fiduciary duty in
this case.
As fiduciary duties are reserved for relationships
involving heightened levels of trust, we decline to create a
fiduciary relationship between contractor and owner under a cost-
plus contract.
C. Thornton Did Not Breach the Duty of Good Faith and Fair
Dealing.
The relationship between contractor and owner is
governed by the covenant of good faith and fair dealing implied in
every contract under Alaska law. See Guin, 591 P.2d at 1291. This
implied covenant provides "that neither party will do anything
which will injure the right of the other to receive the benefits of
the agreement." Id. (footnote omitted). The superior court
concluded that although Thornton was bound to act in conformity
with the covenant of good faith and fair dealing, there was
insufficient evidence to support a finding that he had failed to do
so.
The Munns argue that Thornton breached the implied
covenant of good faith and fair dealing in several ways. First,
they assert that Thornton breached his duty to inform them "prior
to performing work [that would] materially increase the cost over
estimates." The Munns cite no authority in support of this alleged
duty and fail to specify any costs of which Thornton failed to
advise them. Moreover, by the Munns' own admission, Thornton
informed them that the cost of completion would significantly
exceed the estimate before he completed the construction. The
record, therefore, does not support their allegation that Thornton
acted improperly.
Second, the Munns contend that Thornton breached his duty
to charge only actual costs for the installation of carpeting and
vinyl. Again, they cite no authority in support of their claim and
fail to demonstrate that Thornton charged more than reasonable
costs.
Finally, the Munns argue that Thornton breached his "duty
to monitor subcontractors['] work." They contend that a plumbing
and heating subcontractor overcharged for its work. Yet, the Munns
do not contend that the subcontractor's charges were unreasonable
or not actually incurred. The Munns also argue that Thornton's
failure to monitor the work and costs of subcontractors is
exemplified by overbilling for the cost of a "double throw breaker
switch." They contend that a subcontractor overcharged for the
switch and that Thornton passed on the extra cost to them. The
evidence the Munns rely on in support of this argument, however, is
inconclusive. Moreover, the Munns fail to point to any evidence
regarding the amount Thornton actually charged them for the switch;
they merely point to a document that estimates costs "to show the
general nature of the changes that have developed on the Munn
custom home."[Fn. 11]
Because the record does not provide support for the
Munns' argument that Thornton breached the implied covenant of good
faith and fair dealing, this argument fails. The superior court
did not err in its ruling on this issue.
D. The Superior Court Did Not Err in Granting Thornton a
Paramount Lien on the Munns' Property.
After ruling in favor of Thornton, the superior court
declared that Thornton had a paramount lien upon the Munns'
property. The Munns argue that the superior court erred in making
Thornton's lien paramount to their homestead exemption. We
disagree. As a provider of "labor or materials furnished to make,
repair, improve, preserve, store, or transport the property,"AS
09.38.065(2)(B), Thornton may enforce a lien against property
falling under the homestead exemption provided by AS 09.38.010(a).
Thus, the superior court did not err in ordering a paramount lien
against the Munns' property. [Fn. 12]
E. The Superior Court Did Not Err in Ruling that the Unfair
Trade Practices Act Does Not Apply to the Litigation.
The superior court ruled that the Alaska Unfair Trade
Practices and Consumer Protection Act, AS 45.50.471-.561, did not
apply to this litigation. Specifically, the trial court found that
the Munns' reliance on the statute was misplaced because the
contract between the Munns and Thornton was not an "installment
sale"under the statute. The Munns argue that this ruling was
erroneous.
The Unfair Trade Practices Act does not define the term
"installment sale." An "installment sale"is defined generally as
a "[c]ommercial arrangement by which buyer makes initial down
payment and signs a contract for payment of the balance in
installments over a period of time." Black's Law Dictionary 799
(6th ed. 1990). The definitions of "retail installment contract"
and "retail installment transaction"found in the Alaska Retail
Installment Sales Act and the Installment Sales Act are aimed at
sales contracts that create a debt obligation between buyer and
seller. [Fn. 13] AS 45.10.220(9), (10); see also AS 45.10.010.
The contract between the Munns and Thornton is not an installment
sale under these definitions. Instead of providing for the Munns
to pay off a previously agreed-upon sum over time, the contract in
this case required the Munns to pay Thornton for his labor and
expenses as he incurred them. Although these payments occurred in
response to monthly billings, the parties did not treat them as
payments on an existing debt between the Munns and Thornton nor did
they include a "service charge." As the trial court found, these
payments are more properly characterized as "progress payments to
plaintiff, more or less consistent with plaintiff's expenditures on
the project." Therefore, the provision relied on by the Munns
dealing with installment sales contracts is not applicable to this
case, and the superior court's ruling was not in error. [Fn. 14]
IV. CONCLUSION
We AFFIRM the decision of the superior court.
FOOTNOTES
Footnote 1:
Although it is not entirely clear from Thornton's testimony,
it appears that the estimate of $47,000 was in addition to the
original estimate of $169,620.
Footnote 2:
It appears that Steve Munn's testimony was based on the
assumption that when Thornton informed him it would take $77,400 to
complete the project, the Munns had paid him $137,000 (as opposed
to $173,440). The Munns' brief, however, contradicts this
testimony. It states that "[l]ater in February when Thornton [had]
submitted billings bringing the project total to $173,440, he
stated that it would require an additional $77,400 to finish the
home."
Footnote 3:
In making this argument, the Munns focus on the Restatement
(Second) of Contracts  27 (1981) and comment c to that section.
This case, however, does not present the issue addressed by  27 of
whether a party intends to be bound in the absence of a written
agreement; all the evidence, including the Munns' own testimony,
suggests that the Munns did. Rather, the dispute is whether the
record supports the superior court's finding that the Munns agreed
to be bound to the terms as alleged by Thornton.
Footnote 4:
The Munns further attack the superior court's finding of an
oral contract with the claim that the superior court "was unable to
find that the parties reached an express agreement as to the
essential terms of the contract as urged by Thornton." (Emphasis
omitted.) This argument is contradicted by the court's express
findings. The Munns base their contention on an introductory
statement by the court that "whatever the parties' agreement may
have been on or about October 17, 1993, the agreement changed."
Understood in the context of the court's findings, it is clear that
this statement means that even if the parties had not agreed to a
cost-plus contract with no cap before that date, they did reach an
oral agreement on those terms at a later date. Indeed, the court
plainly stated that "after[,] on[,] or about October 18, 1993, the
parties had an oral agreement"on the terms urged by Thornton.
Footnote 5:
On cross-examination, the following exchange took place
between Munn and Thornton's attorney:
Q: You say you had an understanding. Mr.
Thornton didn't say there was a cap of [$]169,620, did he?
. . . .
A: Mr. Thornton didn't say in those specific
words there's a cap of [$]169,620, no.
Q: All right, so there was no cap of
[$]169,620, was there?
A: Yes, there was, sir.
Q: In your mind there was, is that what
you're saying?
A: That is correct.
Q: But Mr. Thornton never told you that?
A: Mr. Thornton told me that the [$]169,620
was a very good number, he was very
comfortable with it, he had a very good crew, and he could build
the house for less than that.
Footnote 6:
Because we conclude that the superior court did not err in
finding that the Munns were liable to Thornton under an oral cost-
plus contract with no cap, we need not reach the questions of
whether the Munns were liable to Thornton under the doctrines of
unjust enrichment and promissory estoppel.
Footnote 7:
The $5 per hour worker was charged out at $10 per hour, the
$12 per hour workers were charged out at $20 and $25 per hour, and
the $16 and $18 per hour workers were charged out at $30 per hour.
Footnote 8:
If the Munns believed that Thornton paid each worker $30 per
hour, they should have expected the bills they received to show the
charge as $30 per hour plus employer contributions and 15 percent.
Thornton's bills, however, always stated a flat labor charge for
each worker. Furthermore, these bills included specific markups of
15 percent for materials, subcontractors, and equipment but never
showed a 15 percent markup for labor.
If, on the other hand, the Munns believed that the $30
per hour charge included the 15 percent markup over the actual
labor cost, they never explained why they thought that Thornton did
not set out the actual labor subtotal in the bills and then
specifically include a 15 percent markup as he did with materials,
subcontracts, and equipment.
Footnote 9:
This bill differs, however, from the other bills in that it
does not include a 15 percent markup for materials and
subcontracts.
Footnote 10:
The Munns also cite to a clause in a standard form contract
published by the American Institute of Architects. The form
contract played no part in the dealings between the parties and
provides weak support for the Munns' position.
Footnote 11:
At oral argument before this court, the Munns argued that
Thornton's construction costs were not reasonable. As this issue
was raised for the first time at oral argument and was neither
listed in the points on appeal nor adequately briefed, we do not
address it. See Wren v. State, 577 P.2d 235, 237 n.2 (Alaska 1978).
To the extent that this issue was subsumed by the Munns' argument
that Thornton breached implied duties, the Munns failed to address
the court's findings and conclusion, based on the testimony of
expert witnesses in the residential construction industry, that
"the total cost of construction claimed by Thornton is reasonable."
Footnote 12:
The Munns also argue that under AS 34.35.050, the statute
providing for mechanics' liens, lien protection cannot extend
beyond "contract price." They contend that Thornton's breach of
implied duties under an implied contract should decrease the
contract price and thus limit Thornton's recovery. Because we
affirm the superior court's finding of an oral contract on the
terms urged by Thornton and reject the argument that Thornton
breached implied duties, this argument fails.
Footnote 13:
AS 45.10.220(9) & (10) provide:
(9) "[R]etail installment contract". . .
means a contract, other than a retail charge agreement or an
instrument reflecting a sale price made under a retail charge
agreement, entered into or performed in the state for a retail
installment transaction; "retail installment contract"includes
(A) a chattel mortgage;
(B) a conditional sale contract; and
(C) a contract in the form of a bailment
or a lease if the bailee or lessee contracts to pay a sum
substantially equivalent to or in excess of the value of the goods
sold as compensation for their use and if it is agreed that the
bailee or lessee is bound to become, or for no other or a merely
nominal consideration, has the option of becoming the owner of the
goods upon full compliance with the provisions of the bailment or
lease;
(10) "retail installment transaction"means a
transaction in which a retail buyer purchases goods or services
from a retail seller under a retail installment contract or a
retail charge agreement which provides for a service charge under
which the buyer agrees to pay the unpaid balance in one or more
installments[.]
Footnote 14:
The superior court also found that the statute "does not apply
to real property transactions." Because we conclude that the
contract between the parties was not an installment sale and that
the Unfair Trade Practices Act therefore does not apply to this
litigation, we need not address this issue.
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