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Bishop v. Clark (9/13/2002) sp-5626
Bishop v. Clark (9/13/2002) sp-5626
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,
e-mail corrections@appellate.courts.state.ak.us.
THE SUPREME COURT OF THE STATE OF ALASKA
GEORGE W. BISHOP, )
) Supreme Court No. S-9232
Appellant, )
) Superior Court No. 3KN-97-859
CI
v. )
) O P I N I O N
STACEY A. CLARK, )
) [No. 5626 - September 13,
2002]
Appellee. )
________________________________)
Appeal from the Superior Court of the State
of Alaska, Third Judicial District, Kenai,
Harold M. Brown, Judge.
Appearances: Claire Steffens, Law Offices of
Claire Steffens, Anchorage, for Appellant.
Allan Beiswenger, Robinson & Beiswenger,
Soldotna, for Appellee.
Before: Fabe, Chief Justice, Matthews,
Eastaugh, Bryner, and Carpeneti, Justices.
EASTAUGH, Justice.
FABE, Chief Justice, with whom MATTHEWS,
Justice, joins, concurring in part and
dissenting in part.
I. INTRODUCTION
I. Was it error to award Stacey A. Clark a one-half
interest in certain property accumulated while she cohabited with
George W. (Will) Bishop? Because we hold that it was error to
conclude that a settlement agreement the parties executed in 1998
superseded their 1996 agreement which allocated some of the
disputed property to Will, we reverse and remand for
consideration of Staceys claim that she signed the 1996 agreement
under duress. Because we affirm the finding that the parties
impliedly agreed to share in the fruits of [their] relationship
as though they were married, we affirm Staceys award of a one-
half interest in property not allocated by the 1996 agreement.
II. FACTS AND PROCEEDINGS
Stacey and Will began dating in 1979 and cohabited
between 1983 and 1996, when they separated.1 They never married.
They had two children. One was born in 1989; the other was born
in 1993.
In 1980 Will purchased a Bristol Bay setnet permit to
fish for salmon at Coffee Point. Stacey worked that summer for
Will as a deckhand and received a crew share of the proceeds. In
1981 Will transferred the setnet permit to Stacey and purchased a
second permit; Will explained that this arrangement was necessary
because AS 16.43.140(c) prohibits a person from holding more than
one entry permit for the same fishery.2 Between 1981 and 1995
the parties fished the permits as a joint enterprise. They
testified at trial that they considered the Bristol Bay fishing
enterprise to be a partnership. They sold fish under both
permits, and they listed sales in either of their names based
purely on convenience. Although Stacey declared for personal
income tax purposes all the income generated from sales
attributable to her permit, she gave Will all of the proceeds,
except for an allowance she kept for personal expenses. Will was
responsible for managing the finances of the fishing enterprise,
and according to Stacey, she worked right beside him, [doing]
just as much as he did. [She] picked the fish, . . . took the
fish to the market, . . . did the paperwork, . . . did the
cooking, the cleaning, [and] took care of the crew.
Will began lobster fishing in California in 1986. The
extent of Staceys participation in lobster fishing was disputed
at trial. Stacey generally did not accompany Will on the lobster
boat; rather, she baited traps, managed gear, obtained parts, and
prepared lunches. In 1994 Will purchased a hull and put together
a twenty-five-foot lobster boat for use in this fishery.
Will purchased a lot in 1990 in the Mountain View
subdivision in Homer for $32,000. Although the lot was titled in
Wills name, [t]he proceeds used to pay for the lot came from the
parties commingled funds. The lot was sold for $42,000 in
February 1996.
Will built a cabin on his sisters property on East Hill
Road in Homer in 1994. Will and Stacey resided in the cabin
whenever they were in Homer between 1994 and January 1996. Will
and Stacey separated in January 1996. After they separated,
Stacey continued to live in the cabin with her boyfriend/fiancee
and her mother.
On June 7, 1996, the parties reached the following
agreement:
To Whom it may concern:
This is a fair distribution of the business
assets based on the capital investments and
contributions to this partnership.
Stacey A. Clark is to keep all of her banking
accounts, IRA accounts, 1990 Honda Accord
automobile, Bristol Bay Setnet site and
Bristol Bay Setnet Permit and Equipment
necessary to operate said permit and site and
any debts [incurred] as of this date.
George W. Bishop is to keep all of his
banking accounts, IRA accounts, Bristol Bay
Setnet site and Bristol Bay Setnet Permit and
any equipment necessary to operate said
permit and site, 1989 Chevy Blazer, 1989 GMC
Pickup, 25 foot Force Boat, Lobster gear,
House located mile .2 East Hill Road and any
debts [incurred] as of this date.
(Emphasis added.)
Stacey filed a complaint for property division, child
custody, child support, and attorneys fees in November 1997.
Will counterclaimed, seeking joint physical custody of the
children.
A May 5, 1998 order required Will to pay interim child
support of $1,362 per month and awarded Stacey interim attorneys
fees of $2,500.
In June 1998 the parties entered into a second
agreement. It was titled PROPERTY SETTLEMENT AGREEMENT. We
discuss its terms in more detail in Part III.A. The 1998
agreement stated that the parties had identified additional
property which each has claimed an interest in. Paragraphs 2, 3,
and 4 of the agreement listed and distributed additional items to
the parties. In paragraph 5 the parties agreed to give up all
potential claims against each other for all property other than
as provided herein. Paragraph 6 stated that this settlement
resolves all property issues except those concerning (1) the East
Hill Road cabin; (2) the personalty, furnishings and appliances
in the East Hill Road cabin; (3) the 1997 fishing season; (4) the
sale of a piece of real property after June 7, 1996; (5) the
lobster boat; and (6) arrearages for interim child and spousal
support. The superior court adopted this agreement on September
3, 1998.
In October 1998 the parties entered into a child
custody agreement which the superior court adopted, as amended,
on February 10, 1999.
The case proceeded to trial in February 1999. The
trial was limited to the issues of distributing: the East Hill
Road cabin, the furniture and appliances in the cabin, income
from the 1997 fishing season, the Mountain View lot, and the
lobster boat; and determining: child support arrearages,
prospective child support, and the management of the childrens
permanent fund dividends.
Finding an implicit agreement of the parties to live
together indefinitely and to share in the fruits of that
relationship as though they were married, the superior court
awarded Stacey a one-half interest in the disputed property. The
court also ordered Will to pay child support arrearages and
calculated prospective child support based on an average of Wills
1995 and 1996 adjusted gross income.
Will unsuccessfully moved for reconsideration. The
superior court entered final judgment for Stacey on July 19, 1999
for $81,942.17, including Alaska Civil Rule 82 attorneys fees of
$9,001.44. Will appeals.
III. DISCUSSION
A. It Was Error To Conclude that the 1998 Settlement
Agreement Superseded the 1996 Agreement as to the
Disputed Property.
Finding an implicit agreement of the parties to live
together indefinitely and to share in the fruits of that
relationship as though they were married, the superior court
awarded Stacey a one-half interest in certain property
accumulated during the time parties cohabited. Thus, Stacey
received a one-half interest in (1) the East Hill Road cabin,3
(2) the furniture and appliances in the cabin, (3) the proceeds
from the sale of the Mountain View lot, and (4) the lobster boat
and lobster-fishing gear. Even though the 1996 settlement
agreement allocated the East Hill Road cabin, the lobster boat,
and the lobster-fishing gear to Will, the superior court awarded
Stacey a one-half interest in these items. The superior court
concluded that the 1998 agreement, which stated that it did not
resolve issues concerning these items, superseded the 1996
agreement. Thus, the superior court stated: [I]t seems clear to
the court that the parties agreed that the issues identified in
the 1998 agreement as unresolved were to be addressed by the
court without reference to the 1996 agreement. Will challenges
this conclusion.
Whether the 1998 agreement superseded the 1996
agreement is a matter of contract interpretation to which we
apply our independent judgment.4
A leading treatise explains the conditions under which
a subsequent contract will supersede an earlier agreement:
A subsequent contract completely covering the
same subject-matter, and made by the same
parties, as an earlier agreement, but
containing terms inconsistent with the former
contract, so that the two cannot stand
together, rescinds, substitutes, and is
substituted for the earlier contract and
becomes the only agreement of the parties on
the subject.[5]
Thus, a second contract will not supersede the first by
implication unless the agreements are so inconsistent that the
two cannot subsist together.6
We conclude that the 1998 settlement agreement did not
supersede the 1996 agreement in whole or in part, because the two
agreements are not so inconsistent that the two cannot subsist
together.7 We note that the 1998 agreement characterizes the
1996 agreement as allocating certain properties between [the
parties]. (Emphasis added.) Paragraph 1 of the 1998 agreement
similarly states that the earlier agreement allocates to each
party the equipment necessary to operate their respective
permits; use of the present tense implies that the 1996 agreement
was still in effect. Paragraph 1 also states that the 1996
agreement is deemed to have allocated to Stacey certain equipment
necessary to operate her setnet site. This also suggests that
the parties intended the earlier agreement to remain in effect,
so that they could each continue to operate their respective
permits and sites. Furthermore, the 1998 agreement states that
the parties have identified additional property which each has
claimed an interest in. (Emphasis added.) The words additional
items also appear in the three paragraphs (paragraphs 2, 3, and
4) of the 1998 settlement agreement which purport to allocate
specific items. This usage implies that the parties did not
intend to supersede the 1996 agreement, but rather intended to
supplement that agreement by addressing issues not resolved by
that agreement. Finally, we note that the 1998 agreement fails
to address many of the items which the 1996 agreement had
previously allocated; this also suggests that the parties did not
intend to supersede the earlier agreement.
True, paragraph 6 of the 1998 agreement provides that
[t]he parties agree this settlement resolves all property issues
except issues concerning, among others, the East Hill Road cabin
and the lobster boat. But this does not mean that the 1998
agreement is inconsistent with the 1996 agreement, which
allocated the East Hill Road cabin and the lobster boat to Will.
Simply acknowledging that the parties agree that issues exist
does not mean that the parties are agreeing to set aside
provisions in a prior contract that arguably resolved those
issues. We therefore hold that it was error to conclude that the
1998 settlement agreement superseded the 1996 agreement.
Stacey argued in her trial brief that she signed the
1996 agreement under duress, in large part due to physical abuse
by Will.8 Stacey presented evidence at trial that the parties
had argued and shoved each other a day before they signed the
agreement, and that she had not seen the agreement until just
before she signed it. The superior court, however, made no
findings regarding Staceys duress claim, having noted that
whether the document was signed under duress is irrelevant
because the court finds that it was superseded by the agreement
of June 1998 . . . . Because we conclude that the 1998 agreement
did not supersede the 1996 contract, we must remand for findings
regarding duress. If the superior court concludes on remand that
Stacey did not sign the 1996 agreement under duress, it must
award the East Hill Road cabin, the lobster boat, and the lobster-
fishing gear to Will, per the terms of the 1996 agreement.9 If
the superior court concludes that Stacey signed the 1996
agreement under duress, the 1996 agreement would be void and
should not control the ultimate property disposition.10
B. It Was Not Error To Award Stacey a One-Half Interest in
the Disputed Property Not Allocated by the 1996
Agreement.
1. It was not error to find an implicit agreement
between Will and Stacey to share in the fruits of
[their] relationship as though they were married.
In granting Stacey a one-half interest in the disputed
property, the superior court found an implicit agreement of the
parties to live together indefinitely and to share in the fruits
of that relationship as though they were married. (Emphasis
added.) The court explained:
Here the parties co-habitated and worked
together from 1979. They lived together, at
least during the summers starting in 1980
when the first set net permit and site was
purchased, until 1982 when plaintiff
graduated from high school. Following
graduation and until January of 1996 the
parties resided together, worked together,
vacationed together and gave birth to two
children. Defendant kept the books, and was
in charge of finances. Plaintiff worked
alongside him until the children arrived and
thereafter had no significant employment
outside of the home.
We treat the courts decision as finding that these
cohabiting parties impliedly agreed to the distribution of
property accumulated during cohabitation. Will challenges this
finding. We review it de novo.11
In Wood v. Collins, we held that property accumulated
during cohabitation should be divided by determining the express
or implied intent of the parties.12 Quoting Beal v. Beal, we
stated:
We believe a division of property accumulated
during a period of cohabitation must be begun
by inquiring into the intent of the parties,
and if an intent can be found, it should
control that property distribution. While
this is obviously true when the parties have
executed a written agreement, it is just as
true if there is no written agreement. The
difference is often only the sophistication
of the parties. Thus, absent an express
agreement, courts should closely examine the
facts in evidence to determine what the
parties implicitly agreed upon. In summary,
we hold that courts, when dealing with the
property disputes of a man and a woman who
have been living together in a nonmarital
domestic relationship, should distribute the
property based upon the express or implied
intent of those parties.[13]
In determining the intent of cohabiting parties, courts
consider, among other factors, whether the parties have (1) made
joint financial arrangements such as joint savings or checking
accounts, or jointly titled property;14 (2) filed joint tax
returns;15 (3) held themselves out as husband and wife;16 (4)
contributed to the payment of household expenses;17 (5)
contributed to the improvement and maintenance of the disputed
property;18 and (6) participated in a joint business venture.19
Whether they have raised children together or incurred joint
debts is also important.
Although it is a close question in this case, we
conclude that the totality of circumstances supports the superior
courts finding of an implied agreement between Will and Stacey to
share in the fruits of [their] relationship as though they were
married. Both parties testified that they considered the Bristol
Bay fishing enterprise to be a partnership. Will commingled
income from the fishing partnership with his separate income by
depositing the funds in his separate accounts; payments for the
disputed property and other household expenses were made from
those accounts. The parties also had joint checking and savings
accounts, from which household expenses were paid. Finally, the
parties had two children together. We therefore conclude that it
was not error to award Stacey a one-half interest in the disputed
property not allocated by the 1996 settlement agreement i.e.,
the furniture and appliances in the East Hill Road cabin and the
proceeds from the sale of the Mountain View lot.
2. It was not error to conclude that issues regarding
the division of the proceeds from the sale of the
Mountain View lot were open to adjudication.
Paragraph 5 of the 1998 settlement agreement provides
that [t]he parties agree that they give up all potential claims
each against the other for all debts and all property other than
as provided herein. Paragraph 6(d) of the 1998 agreement
provides that the agreement does not resolve issues pertaining to
sale of a piece of real property after June 7, 1996. (Emphasis
added.)
Stacey argues that paragraph 6(d) refers to the sale of
the Mountain View lot. Stacey asked the superior court to award
her an interest in that lots sale proceeds. Will responded, and
maintains on appeal, that because the Mountain View lot was sold
in February 1996, it is not the real property referred to in
paragraph 6(d). Will therefore concludes that under paragraph 5
of the 1998 agreement, issues regarding the division of the
proceeds from the sale of the lot are not open to adjudication.
The superior court, while noting that the Mountain View
lot was sold in February 1996, stated that the 1998 agreement was
prepared by [Will] and he affords no explanation as to what is
the real property referred to at that point in the agreement.
The court therefore awarded Stacey a one-half interest in the
Mountain View lot sale proceeds.
Because the superior court interpreted paragraph 6(d)
of the 1998 settlement agreement to apply to the sale of the
Mountain View lot an interpretation contrary to the language of
the agreement the court essentially reformed the 1998 agreement.
Reformation of an instrument is the proper remedy where it is
alleged that the instrument does not conform to the actual
intentions of the parties.20 It is a means of correcting mutual
mistakes and of conforming a contract to the clear intention of
the parties.21 Reformation may be granted, however, only when it
is shown by clear and convincing evidence that it is appropriate.22
It does not appear that the superior court applied the
clear and convincing evidence standard in reforming the parties
agreement. But even if it had applied that proof standard, it is
difficult to imagine how it could have reached a different
result. There is no evidence in the record of any other property
which paragraph 6(d) of the 1998 agreement could have been
describing. Wills argument would render the provision completely
meaningless. Although he insists that paragraph 6(d) does not
contemplate the sale of the Mountain View lot, he has provided no
alternative explanation for the provision and has identified no
other property to which paragraph 6(d) might have referred.
Therefore, we hold, as a matter of law, that paragraph 6(d)
refers to the sale of the Mountain View lot. Accordingly, issues
regarding the division of proceeds from the sale of that lot were
open to adjudication. The superior court therefore permissibly
chose to divide those proceeds.
3. It was harmless error to apply divorce law to
divide the parties property.
In dividing the parties property, the superior court
applied the same body of law that would be applied in resolving a
property dispute between parties seeking a divorce. The court
stated that it [saw] no reason not to look to factors A through I
enumerated in AS 25.24.160(a)(4) [the statutory provision
governing division of property in a divorce action].
It was error to apply divorce law to divide the parties
property. In Sugg v. Morris, we held that the equitable
principles which apply to the judicial division of marital
property of a man and woman who had been living together in
lawful wedlock or in a bona fide putative marriage are not
applicable where the man and woman have been knowingly living in
a [non-marital] relationship . . . .23 Moreover, AS 25.24.160(a)
applies by its terms only to action[s] for divorce or action[s]
declaring a marriage void . . . . As we noted above in Part
III.B.1, the property the couple accumulated must be divided in
accordance with their intentions.
But because the superior court would have reached the
same result without relying on divorce law, the error was
harmless. Its July 20, 1999 order noted that whether the
interests of the parties are determined through applications of
the factors enumerated in AS 25.24.160(a)(4) or the principles of
partnership law where the relative contributions of the parties
cannot be determined and the partners co-habit, the results are
the same. The property should be divided equally. Because the
superior court found elsewhere that the parties agreed to share
in the fruits of their long-term relationship, it would have
divided equally the property accumulated during the period of the
parties cohabitation even had it not relied on divorce law.
C. Other Issues
1. Separate property
Will argued below that he purchased the Mountain View
lot and the furniture and appliances in the East Hill Road cabin
with funds from a $200,000 inheritance he received after his
fathers death in 1984. The superior court declined to award
these items to Will as his separate property. It reasoned that
it is almost impossible for this court to track the use of
defendants inheritance and he made little effort to do so during
trial. It also noted that [a]ll monies earned or inherited by
the couple were comingled . . . . Finally, it stated that given
the nature of the [parties] relationship, the court finds that it
was [Wills] intention to gift a share of the inheritance to
[Stacey] as it was expended.
Will argues on appeal that it was error to award Stacey
an interest in property purchased with funds from his
inheritance. Assuming without deciding that the concept of
separate property applies to the division of property accumulated
during cohabitation, a party arguing that assets were purchased
with separate funds has the burden of proving the source of the
funds.24 Because Will admitted at trial that he commingled the
proceeds from the Bristol Bay fishing enterprise with his
inheritance, and because he offered no evidence at trial tracing
the source of the funds he used to purchase the disputed
property, we affirm the award to Stacey of an interest in
property allegedly purchased with the inheritance.
2. Jurisdiction
Will argues that the superior court lacked jurisdiction
to determine Staceys interest in the East Hill Road cabin,
because Wills sister, Phyliss Bishop, on whose property the cabin
was built, was not joined as an indispensable party. Will cites
Silvers v. Silvers, where we stated that [a]s a general rule, an
owner of property must be joined as an indispensable party in any
action that may adversely affect her interest in the property. 25
The superior courts award did not purport to affect Phyliss
Bishops interest in the East Hill Road property. It merely
awarded Stacey one-half of the value of the cabin independent of
the underlying real estate. In effect, the court was simply
dividing the interest which Will elsewhere asserted was his. We
perceive no jurisdictional error.
3. Interim attorneys fees
The superior court awarded Stacey interim attorneys
fees of $2,500, without citing legal authority for the award.
Will argues that there was no permissible basis for this award.
This argument lacks merit. We have held that in actions between
unmarried couples that resemble divorce proceedings the rules
governing the award of attorneys fees in divorce cases will be
applied.26 When the court awarded interim attorneys fees, the
present case closely resembled a divorce action, given the short
period of time between the breakup of the parties relationship
and the filing of the action and the fact that property division,
child custody, and child support issues were in dispute. Because
courts have the authority to enter interim awards of attorneys
fees in divorce litigation, such authority also applies to cases,
like this one, that closely resemble divorce litigation. As we
stated in Sanders v. Barth, [the rule concerning attorneys fees
in divorces] should be reserved for cases that closely resemble
divorce actions and for cases that involve disputes such as
disputes about custody or the initial division of property for
which it is of paramount importance that the parties be able to
litigate on a fairly equal plain. 27 Based on Bergstrom and
Sanders, we conclude that the superior court had inherent
authority to award interim fees. We also hold that it did not
abuse its discretion in doing so.
4. Rule 82 attorneys fees
The superior courts July 19, 1999 judgment included an
Alaska Civil Rule 82 attorneys fees award of $9,001.44 to Stacey.
The award was calculated under Rule 82 based on the value of the
property awarded to Stacey. Will argues on appeal that it was an
abuse of discretion to award attorneys fees under Rule 82, rather
than under the divorce case standard, which takes into account
the parties relative economic circumstances.
Wills argument is not well taken. We have held that in
a dispute between unmarried individuals limited to the issues of
child custody and support, attorneys fees and costs should be
governed by the standard used in divorce actions; that standard
considers the parties relative economic circumstances.28 But in
property disputes between unmarried cohabitants, we have upheld
attorneys fees awards under Rule 82.29 It was not an abuse of
discretion to award Stacey attorneys fees under Rule 82 based on
the value of the property awarded to her.
4. Interim child support
On May 5, 1998 the superior court ordered Will to pay
interim child support of $1,362.00 per month, retroactive to
December 1, 1997. Will appeals this award, arguing that the
superior court erred (1) by awarding interim child support
without properly determining child custody; and (2) by not basing
the award on the actual percentage of time the children were with
each parent.
Will first contends that the superior court violated
his due process rights by failing to hold a hearing to determine
the childrens bests interests before awarding Stacey primary
interim physical custody. But Will did not request a hearing
until after the superior court entered its May 5, 1998 order; by
then the court had already reviewed Staceys motion for interim
relief, Wills opposition, and Staceys reply. Furthermore, Will
does not claim any adverse effect causally related to the lack of
hearing. In contrast, Wills authority for this contention
consists of cases presenting much more significant due process
concerns than any alleged deprivation here.30 We therefore
decline to reverse the interim child support order on this
ground.
Will next argues that although the superior courts
interim custody order awarded primary physical custody of the
children to Stacey, Will had physical custody of the children
forty-three percent of the time in the period before the parties
reached a custody agreement. Will argues that it was therefore
error not to calculate the interim child support under the shared-
physical-custody formula set out in Alaska Civil Rule 90.3(b).
We have consistently held that child support awards
should be based on the courts custody or visitation order rather
than on the parties actual custody arrangement.31 We therefore
affirm the interim child support award of $1,361 per month
because it was based on the superior courts May 5, 1998 interim
award of the childrens primary physical custody to Stacey. But
because the May 5, 1998 interim custody award was made
retroactive to December 1, 1997, and there was no previous child
custody order before the May order was entered, we reverse and
remand for recalculation of the child support due based on the
parties actual custody arrangement for periods before May 5,
1998.
5. Prospective child support
The superior courts June 1999 decision stated that
[f]or purposes of calculating [prospective] child support
payments, the court will average [Wills] 1995 and 1996 reported
adjusted gross income. Will argues that it was an abuse of
discretion to base the prospective child support award on his
1995 income, because his income in 1995 was [aberrently] high,
due to a record salmon return. Moreover, Will contends that the
superior court failed to consider that the Bristol Bay fishery
had collapsed in 1997.
The superior courts June 1999 decision specifically
acknowledged the recent low salmon runs experienced in Bristol
Bay. But given strong evidence that losses or expenses from the
operation of [Wills] business during 1997 were attributed to
[Will] resulting in a negative adjusted gross income, while
income from the same operation was attributed to his wife, the
superior court decided to calculate Wills child support
obligation by averaging his 1995 and 1996 reported adjusted gross
income. Because the record contains adequate evidence of what the
court called Wills creative bookkeeping, we hold that the
superior court did not abuse its discretion in choosing to base
the prospective child support award on an average of Wills 1995
and 1996 adjusted gross income.32
IV. CONCLUSION
Because it was error to conclude that the 1998
settlement agreement superseded the 1996 agreement, we REVERSE
and REMAND for a determination whether the 1996 agreement was
signed under duress. We AFFIRM the superior courts finding of an
implied agreement between the parties to share in the fruits of
[their] relationship as though they were married, and therefore
AFFIRM the award to Stacey of a one-half interest in the property
not distributed by the 1996 agreement. We REMAND for
recalculation of the interim child support to be awarded for the
period December 1, 1997 to May 5, 1998. We otherwise AFFIRM the
child support award. We AFFIRM the attorneys fees awards.
FABE, Chief Justice, with whom MATTHEWS, Justice, joins,
concurring in part and dissenting in part.
Although I agree with most aspects of the courts
opinion, I disagree with Part III.A and its conclusion that the
trial court erred in finding that the June 1998 settlement
agreement superseded certain terms of the 1996 agreement. The
courts opinion relies on a 1945 Texas case concerning total
substitution of one contract for another and concludes that the
1996 and 1998 agreements in this case are not so inconsistent
that the two cannot subsist together. 1 What the courts opinion
fails to recognize, however, is that the 1998 agreement was not
intended to rescind the entire 1996 agreement and thus only
partially superseded the earlier agreement.
Where parties to a contract make an agreement of
partial recission, under which they agree to discharge some, but
not all, of their duties of performance under the original
contract, that agreement is treated as a modification of the
original contract, rather than a complete recission. An attempt
to make an agreement of partial recission that would discharge
less than all of [the parties] remaining duties under the
existing contract is considered a modification . . . and not an
agreement of recission.2 And when the parties agree to a new
contract that modifies some terms of their original contract, the
terms of the new contract are found partly in the original
contract and partly in the modifying contract.3 Thus, a new
contract, which contains a term that is inconsistent with the
term of an earlier contract, is interpreted as including an
agreement to rescind the inconsistent term in the earlier
contract.4 This modification of discrete terms of the original
contract does not require an agreement to rescind the entire
original contract: The parties may or may not at the same time
agree to rescind all of the other provisions of the earlier
contract. The extent of the substitution is a matter of their
intent.5
Although the courts opinion appears to recognize these
black letter principles, it ignores the fact that Stacey and Will
did not intend to rescind the entire 1996 contract they intended
only to modify certain provisions of the 1996 agreement. Indeed,
in the 1998 agreement the parties recognized and reaffirmed most
aspects of the property distribution of the 1996 agreement,
modifying it only as to the East Hill Road cabin with its
furnishings and appliances, and the lobster boat with its gear.
While the 1996 agreement purported to accomplish a final
distribution of all of the parties property, including the cabin
and its furnishings and the boat and its gear, the 1998 agreement
modified the earlier agreement by leaving the resolution and
distribution of these specific items of property up to the court.
Thus, the 1998 agreement modified the contract and rescinded the
original contracts terms as to those items of property.
Whether Stacey and Will intended to modify certain
aspects of their original agreement presents a question of fact.
The trial court found that Stacey and Will intended to have the
court decide the distribution of certain items of property that
were originally covered by the 1996 agreement. [I]t seems clear
. . . that the parties agreed that the issues identified in the
1998 agreement as unresolved were to be addressed by the court
without reference to the 1996 agreement. This finding regarding
Stacey and Wills intent is amply supported by the context in
which the 1998 agreement was entered.
The parties were in the process of litigating the
effect and validity of the 1996 agreement when they entered into
the 1998 settlement agreement. This fact alone lends strong
support to the trial courts conclusion that the parties decided
to reaffirm the resolution of some property issues, leaving the
remainder to the court to decide. When Will filed his answer to
Staceys complaint, he alleged in a counterclaim that the parties
had resolved all interests in their informal partnership by the
1996 contract. Staceys answer to the counterclaim disputed this
assertion. It was only after Stacey and Will understood that
there was a contest as to the validity of the 1996 agreement and
were proceeding with their pending lawsuit that they entered the
new settlement agreement in June of 1998. Wills acquiescence in
the 1998 settlement agreement to leaving certain property items
open for resolution by the court was contrary to his earlier
pleadings and position that Staceys claims were barred by the
1996 agreement. Moreover, Will drafted the 1998 agreement. If
it was his view that disposition of the lobster boat and gear and
the East Hill Road cabin and furnishings were conclusively
resolved by the 1996 agreement, he could easily have stated that
those items remained covered by the terms of the original
agreement.
For these reasons, I would affirm the superior courts
finding that the 1998 agreement modified the 1996 agreement on
the issues of distribution of the East Hill Road cabin, its
furnishings, the lobster boat, and gear. Moreover, I would
affirm the superior courts distribution of those items of
property. Therefore, I respectfully dissent.
_______________________________
1 During this period, however, Will and Stacey spent
considerable time apart. For example, Stacey spent the winters
in 1985 and 1986 in Everett, Washington. Will spent several
months in 1994 and 1995 in California fishing for lobster without
Stacey.
2 By transferring Bristol Bay setnet permits to trusted
friends or family members, Stacey and Will eventually acquired
two additional permits, for a total of four.
3 Will built the East Hill Road cabin on property owned
by his sister, Phyliss Bishop. The cabin was appraised at
$35,000, independent of the underlying real estate. The superior
court awarded the cabin to Will because of the relationship with
his sister, but ordered Will to pay Stacey $17,500 representing
her interest in the cabin.
4 See Key Pacific Mortgage, Inc. v. Indus. Indem. Co.,
845 P.2d 1087, 1089 (Alaska 1993).
5 15 Walter H. E. Jaeger, Williston on Contracts 1826,
at 485-86 n.9 (3d ed. 1972) (citation omitted); see also id. at
485 (A contract containing a term inconsistent with a term of an
earlier contract between the same parties is interpreted as
including an agreement to rescind the inconsistent term in the
earlier contract.) (citation omitted); Restatement of Contracts
408 (1932); see also Juneau Educ. Assoc. v. City & Borough of
Juneau, 539 P.2d 704, 706 (Alaska 1975) ( [I]t is a well settled
principle of law that [a] later contract supersedes [a] former
contract as to inconsistent provisions. (quoting NLRB v. Intl
Union of Operating Engrs, Local No. 12, 323 F.2d 545, 548 (9th
Cir. 1963)). Because no court order adopted the 1996 agreement,
the superior court correctly treated this as a supersession
dispute. It is not clear whether the superior court found that
the 1998 agreement completely or only partially superseded the
1996 agreement. The courts order stated that [t]he court finds
that the June 1996 agreement although incorporated in part by
reference was superseded by the 1998 agreement. This finding
suggests that the court considered the 1996 agreement to have no
independent effect after the parties entered into the 1998
agreement. And the court decided that Staceys argument that she
signed the 1996 agreement under duress was irrelevant given its
finding that the 1998 agreement superseded the 1996 agreement.
In any event, the court resolved the four property disputes
without referring to the 1996 agreement or relying on its terms.
6 Willeke v. Bailey, 189 S.W.2d 477, 479 (Tex. 1945).
7 Id.
8 In D.M. v. D.A., 885 P.2d 94, 96 (Alaska 1994), the
superior court voided a settlement agreement between cohabiting
parties because it was signed under duress. The finding of
duress was based on a history of domestic violence between D.M.
and D.A., including an incident two days prior to the signing of
the contract. Id. at 96 n.2. D.M. did not challenge that
finding on appeal. See id.
9 On remand, the superior court may not redistribute the
disputed property allocated by the 1996 settlement agreement.
When the superior court distributes property accumulated during
non-marital cohabitation, it must determine the express or
implied intent of the parties with respect to each item of
property. Lacher v. Lacher, 993 P.2d 413, 421 n.28 (Alaska 1999)
(citing Wood v. Collins, 812 P.2d 951, 956 (Alaska 1991)).
10 See Helstrom v. North Slope Borough, 797 P.2d 1192,
1197 (Alaska 1990).
11 See Wood, 812 P.2d at 955-56, 955 n.4 (Applying the law
to a given set of facts is a question of law subject to de novo
review.).
12 812 P.2d 951, 956 (Alaska 1991) (citing Beal v. Beal,
577 P.2d 507, 510 (Or. 1978) (en banc)).
13 Wood, 812 P.2d at 956 (quoting Beal, 577 P.2d at 510
(internal ellipses omitted)).
14 See D.M., 885 P.2d at 98.
15 See, e.g., Carroll v. Lee, 712 P.2d 923, 925 (Ariz.
1986).
16 See, e.g., id.
17 See, e.g., Rissberger v. Gorton, 597 P.2d 366, 370 (Or.
1979).
18 See, e.g., Beal, 577 P.2d at 510.
19 See, e.g., Western States Constr., Inc. v. Michoff, 840
P.2d 1220, 1221-22 (Nev. 1992).
20 D.M., 885 P.2d at 96.
21 Oaksmith v. Brusich, 774 P.2d 191, 197 (Alaska 1989).
22 See D.M., 885 P.2d at 97; see also Ahwinona v. State,
922 P.2d 884, 887 (Alaska 1996) (holding party wishing to reform
contract bears burden of establishing through clear and
convincing evidence that omission was mutual mistake) (citation
omitted).
23 392 P.2d 313, 316 (Alaska 1964).
24 See Zimin v. Zimin, 837 P.2d 118, 122 (Alaska 1992) (It
is the duty of the parties . . . to ensure that all necessary
evidence is before the court in divorce proceedings.); cf.
Coffland v. Coffland, 4 P.3d 317, 321-22 (Alaska 2000) (affirming
trial courts determination that husband failed to show sufficient
evidence of marital debt).
25 999 P.2d 786, 792 (Alaska 2000) (quoting B.B.P. Corp.
v. Carroll, 760 P.2d 519, 525 (Alaska 1988)).
26 Bergstrom v. Lindback, 779 P.2d 1235, 1238 (Alaska
1989); see also Sanders v. Barth, 12 P.3d 766, 768-69 (Alaska
2000) (explaining rule).
27 12 P.3d 766, 769 (Alaska 2000).
28 See Bergstrom, 779 P.2d at 1238.
29 See Wood, 812 P.2d at 957; Levar v. Elkins, 604 P.2d
602, 604 (Alaska 1980).
30 For example, in Cushing v. Painter, 666 P.2d 1044, 1046
(Alaska 1983), we held that the mother was deprived of due
process where the superior court scheduled an expedited hearing
solely to determine the childs school placement for the upcoming
year, but spontaneously and without notice transformed the
proceeding into one that decided the issue of permanent custody.
We further noted that the mothers lack of notice adversely
affected her ability to adequately present her case. Id.
31 See Bennett v. Bennett, 6 P.3d 724, 727 (Alaska 2000);
Turinsky v. Long, 910 P.2d 590, 595 (Alaska 1996).
32 Will asserts that in calculating child support the
superior court failed to include in Staceys income rental
payments of $550 Stacey received monthly. We do not reach this
issue because Will does not adequately brief it. He does not
discuss the issue in the argument portion of his opening brief;
he mentions the failure to include the rent only in passing in
his statement of the case; and he addresses the issue in only one
sentence in the argument portion of his reply brief. We
therefore consider the issue waived. Shearer v. Mundt, 36 P.3d
1196, 1199 (Alaska 2001) (stating that generally issues not
briefed or only cursorily briefed are considered waived).
1 Slip Opinion at 7 (citing Willeke v. Bailey, 189 S.W.2d
477, 479 (Tex. 1945)).
2 Restatement (Second) of Contracts 283 cmt. b, at 391
(1981).
3 Restatement (Second) of Contracts 149 cmt. a, at 374
(1981).
4 15 Walter H.E. Jaeger, Williston on Contracts 1826, at
485 (1972).
5 Id. at 485-86 (emphasis added).
