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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Anchorage Chrysler Center, Inc. v. DaimlerChrysler Corporation (02/24/2006) sp-5993

Anchorage Chrysler Center, Inc. v. DaimlerChrysler Corporation (02/24/2006) sp-5993, 129 P3d 905

     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

ANCHORAGE CHRYSLER )
CENTER, INC., ) Supreme Court No. S- 11421
)
Appellant,)
) Superior Court No.
v. ) 3AN-99-9780 CI
)
DAIMLERCHRYSLER ) O P I N I O N
CORPORATION, )
)
Appellee. ) [No. 5993 - February 24, 2006]
)
          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, William F. Morse, Judge.

          Appearances:   Randall  Simpson,   Blair   M.
          Christensen, Jermain, Dunnagan & Owens, P.C.,
          Anchorage,   for   Appellant.    Jeffrey   M.
          Feldman,  Ruth Botstein, Feldman &  Orlansky,
          Anchorage,  and  Mark  F.  Kennedy,  Mark  T.
          Clouatre, Wheeler Trigg Kennedy LLP,  Denver,
          Colorado, for Appellee.

          Before:   Bryner,  Chief  Justice,  Matthews,
          Eastaugh,  and  Carpeneti, Justices.   [Fabe,
          Justice, not participating.]

          MATTHEWS, Justice.

I.   INTRODUCTION
          This  appeal  arises  out  of  a  dispute  between   an
automobile manufacturer and one of its dealers in Anchorage.  The
dealer and the manufacturer entered into a short letter agreement
that  required  (among other things) the dealer to  make  certain
changes to its facilities in return for the right to open  a  new
dealership  in  Wasilla.  The parties relationship  deteriorated:
the  dealer refused to remodel its dealership as the manufacturer
wanted,  and  the  manufacturer  ended  up  opening  a  competing
dealership   in   Anchorage.   The  car   dealership   sued   the
manufacturer, alleging breach of contract, misrepresentation, and
breach  of the covenant of good faith and fair dealing.  After  a
bench  trial,  the  superior court made  findings  of  facts  and
conclusions  of  law,  and  entered  judgment  in  favor  of  the
manufacturer on all claims.  We believe the superior court  erred
in failing to consider (1) the dealers entitlement to declaratory
relief   on   what  facility  changes  the  agreement   required,
notwithstanding the dealers failure to attempt such changes;  (2)
whether alleged half-truths about the manufacturers plans to open
a   new  dealership  amounted  to  a  misrepresentation  by   the
manufacturer;  (3) whether the manufacturer failed  to  supply  a
letter  of  intent  authorizing the dealer to  open  a  store  in
Wasilla,   as  the  agreement  required;  and  (4)  whether   the
manufacturer  breached  the  covenant  of  good  faith  and  fair
dealing.   We vacate the superior courts judgment and remand  the
case for further consideration.
II.       BACKGROUND
          The  account below is drawn primarily from the superior
court opinion, which has not been overtly challenged as wrong  on
the facts.
          During  the period relevant to this dispute,  plaintiff
Anchorage  Chrysler  Center (ACC) operated a  dealership  selling
Chrysler,  Plymouth,  and  Dodge  vehicles,  all  of  which  were
distributed  to ACC by defendant DaimlerChrysler Motors  Company,
LLC    (DCMC)   (formerly   known   as   DaimlerChrysler   Motors
Corporation).   ACC  sold  the  vehicles  out  of  two   adjacent
buildings on Fifth Avenue:  Plymouths and Chryslers were sold out
of  one building, and Dodges out of the other.  ACC operated  the
dealership  pursuant to Sales and Service Agreements between  ACC
and DCMC.
          These  sales and service agreements gave DCMC the right
to  authorize  other dealers to sell the same cars  in  the  same
locality  as DCMC determines to be appropriate.  The  other  DCMC
dealer  in  Anchorage  was Johnson Jeep.  The  only  DCMC  models
Johnson Jeep carried were Jeep and Eagle.
          In the mid-1990s, DCMC developed a merchandise strategy
it  called  Project 2000.  Dealers were encouraged to sell  Dodge
vehicles  in  facilities that were separate from  the  facilities
used to sell Chrysler, Plymouth, Jeep, and Eagle vehicles.  DCMC,
ACC,  and  Johnson  Jeep entered into discussions  about  how  to
achieve  Project  2000s  goal  of the  same  dealer  selling  the
Chrysler, Plymouth, Jeep, and Eagle lines.  DCMC and ACC began to
negotiate what would eventually become a letter agreement between
ACC  and  DCMC under which ACC would not object to Johnson  Jeeps
selling  Chryslers  and  Plymouths.   As  part  of  this   letter
agreement, DCMC required ACC to rearrange its showrooms  so  that
Dodges  would  be  sold  in what had been  the  Chrysler/Plymouth
showroom, with the other lines (including a new Jeep line) moving
to  the  former Dodge showroom.  As part of the deal  DCMC  would
also  agree  to  authorize  ACC to open  a  Dodge  dealership  in
Wasilla.
          Getting  this letter agreement signed involved  a  long
period of negotiation, extending over several years and involving
some false starts.  One source of contention was the Wasilla part
of the deal, which ultimately took the form of a letter of intent
that DCMC was required to provide as one of its obligations under
the letter agreement.  Another concern ACC had (though the degree
to  which  this  concern was reflected in  the  parties  deal  is
disputed on this appeal) was whether DCMC would establish another
Dodge  dealership in Anchorage to compete against ACCs  lucrative
Dodge  franchise.   In March 1999, as the negotiations  began  to
enter the home stretch, DCMCs in-house lawyer David King sent  an
email to ACCs lawyer, attaching a rough draft of a Wasilla letter
of  intent.  Under this draft of the letter of intent, ACC  could
get  a  dealership  in  Wasilla  if  it  began  constructing  the
dealership  over time periods to be determined (i.e.,  the  draft
had  blanks for all the milestones).  This letter of intent draft
also  addressed  the issue of other Dodge stores  in  Alaska,  by
obligating ACC not to protest if DCMC established another  dealer
selling  the  same lines as ACC.  The cover memo by DCMCs  lawyer
explained to ACCs lawyer that any disagreement over this language
should  be  resolved  as  a result of the understandings  already
reached.   My  clients  have not informed me  of  any  plans  for
additional  dealerships  in  Alaska.   Later,  after   DCMC   had
announced  that it would open another Dodge dealership  in  south
Anchorage,  this  statement became one basis of ACCs  claim  that
DCMC had promised or represented not to open another Dodge store.
          ACC  responded  by proposing revised language  for  the
letter  agreement.  The letter agreement proposed by ACC  deleted
all references to DCMCs providing a letter of intent and required
ACC  to  commit to a new Wasilla dealership within  five  years.1
ACC  also proposed new language that would commit the parties  to
the  proposition  that the Project 2000 agreements  between  ACC,
DCMC,  and  Johnson  Jeep does not include  the  Dodge  franchise
language apparently intended to insure that Johnson would not get
Dodge.   On May 21, 1999, DCMC responded with a letter from  Carl
Fleck,  DCMCs regional manager.  DCMC said it was unnecessary  to
add language to the agreement precluding DCMC from giving Johnson
Jeep  a  Dodge  dealership:  As to awarding  a  Dodge  Sales  and
Service   agreement  to  Johnson  Jeep,  I   can   confirm   that
DaimlerChrysler  has  no plan to add Dodge  to  this  dealership.
This  would  become another statement used to support ACCs  claim
that DCMC had at least implicitly promised or represented not  to
start a new Dodge dealership in Anchorage.
          The  May  21  DCMC letter also seemed  to  reject  ACCs
Wasilla  proposal. Fleck enclosed another draft of the letter  of
intent,  which  was  not signed by DCMC but looked  ready  to  be
signed  by  both parties.  Under this version of  the  letter  of
intent, DCMC promised to award ACC a Wasilla dealership for Dodge
and all other DCMC vehicles, provided ACC met certain milestones.
Under  this  draft of the letter of intent, the  first  milestone
proposal of a suitable site for the dealership  needed to be  met
by  June  2002 (a little more than three years) and  ACC  had  to
finish  the  dealership  by July 2004 (a little  more  than  five
          years).2  One of the issues in this appeal is whether this May 21
letter  of intent was in form and substance the letter of  intent
contemplated  by  the letter agreement that was concluded  a  few
days later.
            On  May 28, 1999, ACC and DCMC had a conference call,
attended by Fleck on DCMCs side and by several managers  on  ACCs
side.   What happened on the call was disputed at trial.   First,
ACC  asked  about  the  letter agreements  requirement  that  ACC
establish  separate and complete showrooms for Dodge on  the  one
hand  and for Chrysler/Plymouth/Jeep on the other.  According  to
the  superior  courts findings, Fleck told ACC that  because  ACC
already  had  two  showrooms  and  combined  service  and   parts
facilities  and staff, the changes needed would  be  minor.   ACC
also  asked Fleck about Dodge.  What was said on this  point  was
hotly  disputed  at  trial.  ACC witnesses testified  that  Fleck
responded by promising not to put a new Dodge dealership  of  any
kind in Anchorage.  But the superior court found (based on Flecks
testimony)  that Fleck made only a brief reference to  Dodge  and
only  in the context of what [Johnson Jeep] was to get (or rather
to confirm what [Johnson Jeep] would not get).
          The letter agreement giving rise to this litigation  is
dated  May  26, 1999.  ACC signed the agreement on May 28,  1999,
after  the  parties conference call; DCMC signed it  on  June  1,
1999.3   The  letter  contains three bullet  points.   The  first
bullet  bestows  a  Jeep dealership on ACC,  contingent  on  ACCs
establishment  of separate and complete facilities.   The  second
bullet says that ACC will not object to DCMCs giving Johnson Jeep
the  Chrysler  and  Plymouth franchises (no mention  is  made  of
Dodge).   The  third bullet says DCMC will provide ACC  with  its
standard  five  year  Letter of Intent.   Altogether,  the  three
bullets read as follows:
           Subject    to    [ACCs]   meeting    [DCMCs]
           qualification requirements, DCMC will  enter
           into  its  standard Jeep Sales  and  Service
           Agreements  with ACC.  As a part of  meeting
           DCMCs  qualification requirements  ACC  will
           establish  a  complete  Chrysler,  Plymouth,
           Jeep  (CPJ) operation in ACCs current  Dodge
           dealership  facilities.  As  a  result,  ACC
           will  establish a separate Dodge  dealership
           operation  with  a separate dealer  code  in
           ACCs  current  Chrysler Plymouth  dealership
           facility.   ACC  may  choose  to  set  up  a
           separate legal entity under which the  Dodge
           dealership  will operate or ACC may  operate
           each  of  the  two  dealerships  under  ACCs
           existing   corporate  entity  with  separate
           d/b/a   names   for  the   CPJ   and   Dodge
           operations.
           
           ACC  understands and agrees that subject  to
           Johnson  Jeep  meeting  DCMCs  qualification
           requirements,  DCMC  will  enter  into   its
           standard  Chrysler  and Plymouth  Sales  and
          Service  Agreements  with  Johnson  Jeep   at
           Johnson  Jeeps  current Jeep location.   ACC
           agrees   to  not  protest  or  oppose   this
           establishment  in any administrative,  court
           or other proceeding.
           
           DCMC  will  provide You  and  ACC  with  its
           standard  five year Letter of Intent  giving
           You  and  ACC  the right to qualify  and  be
           approved as a Dodge, Chrysler, Plymouth  and
           Jeep   dealership  in  the  Wasilla,  Alaska
           Sales  Locality.   Such a Letter  of  Intent
           will   be  conditioned  upon  You  and   ACC
           meeting     DCMCs    standard     dealership
           qualifications  applicable to  the  Wasilla,
           Alaska   Sales   Locality,   including   the
           requirement  of  adequate  facilities.   The
           Letter  of Intent will be drafted to  become
           effective  as  of the date of  the  standard
           Jeep  Sales and Service Agreement referenced
           above.
           
          Soon  after  signing, the parties disagreed about  what
changes  ACC  had to make to its showrooms to make each  complete
and separate under the agreement.  DCMC wanted separate managers,
separate  service areas, separate parts counters, separate  sales
staff,  separate financial statements, and separate dealer codes.
ACC  understood  the changeover merely to involve using  separate
dealer   codes,   swapping   signs,  and   making   other   minor
modifications.
          In September 1999, without making any attempt to create
separate and complete facilities, ACC filed its complaint in this
action.   DCMC had never sent any Jeeps to ACC, and never  (after
May  21)  sent  ACC  another  letter  of  intent  for  a  Wasilla
dealership.   The  complaint alleged, among  other  things:   (1)
that,  by insisting on a significant transformation of ACC  as  a
precondition  to  receiving  Jeeps,  DCMC  breached  the  May  28
agreement  and violated the duty of good faith and fair  dealing;
(2)  that  DCMC misrepresented its intention not to  establish  a
dealer in south Anchorage; (3) that DCMC breached its promise  to
give ACC five years to establish a dealership in Wasilla; and (4)
that  a  new  dealership  would violate  the  agreement  and  the
covenant  of  good faith and fair dealing.  The complaint  sought
declaratory  relief,  injunctive  relief,  and  compensatory  and
punitive damages.
           Less  than  two months after the complaint was  filed,
DCMC  formally approved a plan to open a new Dodge store in south
Anchorage, although not at Johnson Jeep.
          The  matter  eventually came to a  bench  trial  before
Superior  Court  Judge William F. Morse.  He issued  findings  of
facts  and  conclusions of law rejecting ACCs claims (though  one
issue  on  this appeal is whether the opinion actually  addresses
certain  claims), and on this basis entered a judgment dismissing
all  claims  against DCMC.  The superior courts rulings  will  be
discussed  in  detail  below,  but  can  be  summarized  briefly.
Rejecting  ACCs claim that DCMC breached the contract by  failing
to  provide Jeeps, the court held that the contract required  ACC
to make at least some changes to its facilities, and that without
attempting  to  make such changes ACC could not complain  of  any
breach  by  DCMC.   On the issue of the new Dodge  dealership  in
south Anchorage, the court rejected ACCs contractual claims after
finding that DCMC never promised to refrain from establishing  an
entirely new dealership.  The court also rejected ACCs claim that
DCMC   misrepresented  its  intentions  to  open  a   new   Dodge
dealership, finding that ACC was not justified in relying on  the
hedged statements made by DCMC, that ACC did not actually rely on
these  statements, and that the statements were technically true.
As  to  the Wasilla letter of intent, the court found that  DCMC,
having  sent a letter of intent on May 21 (a few days before  the
letter  agreement was signed), was not required to  send  another
letter  of intent under the letter agreement, at least  when  ACC
had never requested that DCMC send such a new letter of intent.
III. DISCUSSION
          ACC  has four claims on appeal.  First, it argues  that
the superior court should have determined what facilities changes
the  letter  agreement required ACC to make as a precondition  to
getting  Jeeps.  Second, it argues that the superior court  erred
in finding that the letter agreement did not include a promise by
DCMC  to  refrain  from opening a new Dodge store  in  Anchorage.
Relatedly  (and  we  will consider these  points  together),  ACC
argues  that it was entitled to rely on DCMCs statements about  a
new Dodge dealership in Anchorage, and that these statements were
half-truths  actionable as misrepresentations under  Alaska  law.
Third,  ACC argues that the superior court erred in finding  that
the May 21 letter of intent was the letter of intent contemplated
under the letter agreement, and further erred in requiring ACC to
demand  a new letter of intent when the letter agreement  imposed
no  such requirement.  Fourth, ACC argues that the superior court
erred  by failing to discuss altogether ACCs claim for breach  of
the covenant of good faith and fair dealing.  As discussed below,
these  allegations of error raise mostly (but not entirely) legal
issues, and to this extent our review will be de novo.4
     A.   The Jeep Agreement and the Facilities Makeover
          The May 28 letter agreement required ACC to establish a
Dodge dealership and a separate Chrysler/Plymouth/Jeep dealership
on   its   adjoining  properties  on  Fifth  Avenue   (and   more
specifically  to  put the new Dodge operation  in  ACCs  existing
Chrysler/Plymouth  property, with the new  Chrysler/Plymouth/Jeep
operation to be located on the former Dodge property).  This  was
made  a  condition  of  ACCs receipt of a Jeep  dealership.   The
Chrysler,  Plymouth,  Jeep dealership needed  to  be  a  complete
operation  and  the  Dodge  dealership  needed  to  be  separate.
Shortly  after  signing  the  May  28  agreement,  ACC  and  DCMC
developed a disagreement about what changes ACC needed to make to
satisfy  the  complete and separate requirements.   The  sticking
point  appears  to have been that DCMC wanted not  just  separate
dealer  codes and different signs for each building but  separate
managers  and separate parts and service departments in  each  of
          the two operations.  ACC contends that these demands contradicted
assurances  DCMC  made before the agreement was  signed,  to  the
effect  that  the  changes required by this  condition  would  be
simple  and  easy.   ACC  never even attempted  to  separate  its
business  along the lines contemplated by the agreement,  whether
under ACCs interpretation of the agreement or DCMCs.  Instead  it
filed  the  complaint  in  this  case.   After  amendments,   the
complaint  alleged  that  DCMC  breached  the  contract  by   not
providing Jeeps; sought damages based on this breach; and  sought
a declaration that DCMC must provide Jeep vehicles to [ACC] under
its  standard sales and service agreement without requiring [ACC]
to  build and maintain additional repair and parts facilities  or
retain  a  second  general  manager.   ACC  never  got  the  Jeep
dealership.
          While the superior court seemed inclined to accept ACCs
version  of  the facts,5 it never decided whose understanding  of
the  agreement  was correct.  Instead, the court  relied  on  the
undisputed  fact  that  ACC  never  attempted  to  make  whatever
transformation might have been required by the May 28 agreement:
          [Rod]   Udd   [ACCs  president  and   primary
          shareholder] could have made changes  to  ACC
          in short order, but he wanted more.  That was
          an unfortunate decision.
          
               DCMC did not breach the agreement by not
          shipping  ACC  Jeeps.  ACC failed  to  comply
          with   the   precondition.    ACC   did   not
          substantially  comply with the transformation
          requirements.   Thus, DCMC was  excused  from
          shipping the Jeeps.
          
          The  superior  court  seems  to  have  understood  ACCs
obligation  to  establish  separate  facilities  as  a  condition
precedent  to  ACCs  shipping  the  Jeeps.   According   to   the
Restatement of Contracts, a condition is an event, not certain to
occur,  which must occur, unless its non-occurrence  is  excused,
before  performance under a contract becomes due.6  The  separate
facilities requirement is such a condition, because the agreement
says  DCMCs  obligation to provide Jeeps  is  [s]ubject  to  ACCs
meeting  the  requirement  of establishing  separate  facilities.
Since it is also undisputed that ACC did not ever comply with the
condition, DCMC was not required to perform its conditional  duty
to   supply  Jeeps.   As  the  Restatement  of  Contracts   says:
Performance  of a duty subject to a condition cannot  become  due
unless  the  condition occurs or its non-occurrence is  excused.7
So  the court was correct in holding that DCMC did not breach the
agreement to supply Jeeps.
          Yet notwithstanding ACCs failure to make any changes to
its  facilities,  the superior court should have considered  ACCs
claim   for  a  declaration  specifying  the  facilities  changes
required  by  the letter agreement.  Alaska Statute  22.10.020(g)
says in part: In case of an actual controversy in the state,  the
superior  court, upon the filing of an appropriate pleading,  may
declare  the  rights and legal relations of an  interested  party
          seeking the declaration, whether or not further relief is or
could  be  sought.    We  have said that declarations  concerning
hypothetical or advisory questions or moot questions  should  not
be  rendered,8 and that relief may be withheld when the grant  of
such   relief  would  not  terminate  the  controversy   or   the
uncertainty which gave rise to the declaratory proceeding.9   But
declarations  are  appropriate  where  there  is  a   substantial
controversy,  between parties having adverse legal interests,  of
sufficient  immediacy and reality to warrant the  issuance  of  a
declaratory judgment.10  As one federal court has usefully stated
(quoting Professor Borchard), the
          two principal criteria guiding the policy  in
          favor of rendering declaratory judgments  are
          (1)  when  the judgment will serve  a  useful
          purpose in clarifying and settling the  legal
          relations  in  issue, and (2)  when  it  will
          terminate   and   afford  relief   from   the
          uncertainty,   insecurity,  and   controversy
          giving rise to the proceeding.[11]
          
          The  superior  court apparently never  considered  ACCs
claim  for  declaratory relief, but ACC has a  strong  case  that
these  standards are met here.  ACC asserts that  the  facilities
changes  demanded by DCMC would require substantial expenditures,
and it seems obviously useful12 for the superior court to issue a
declaration  stating whether or not these changes  are  required,
particularly now that the court has taken so much evidence on the
question.   A declaration would also presumably end this part  of
the  controversy between the parties.  And although ACCs  failure
to  fulfill  a  condition  precedent bars  its  claim  that  DCMC
breached  this  part of the letter agreement,  it  does  not  bar
issuance  of  a  declaration specifying what changes  the  letter
agreement  requires  ACC  to undertake in  order  to  get  Jeeps.
Declaratory  judgments  are  appropriate  to  resolve  pre-breach
disputes  over contractual language, giving useful  guidance  for
the  parties  or  others  contemplating a  contingent  course  of
action.13
          Normally we review a superior courts decision to  grant
or refuse declaratory relief for abuse of discretion.14  However,
in light of the superior courts failure to address ACCs claim for
declaratory relief,15 and the apparent suitability of declaratory
relief  in this case, we vacate that part of the superior  courts
judgment  dismissing  ACCs  claim for declaratory  relief.16   On
remand,  the superior court should determine whether the criteria
for  issuing  a declaratory judgment are satisfied  and,  if  so,
decide   whether  DCMCs  demands  concerning  creating   separate
dealership  operations  were  in  accordance  with  the  May   28
agreement.17
     B.   The New Dodge Dealership
          At  trial ACC claimed that in the negotiations  leading
up to the May 28 agreement, DCMC employees made three promises to
ACC  not to establish another Dodge dealership in Anchorage.  ACC
argues both that the superior court erred in failing to read  the
agreement  to include these three alleged promises and also  that
the same statements constituted tortious misrepresentations.  The
three alleged statements and the courts rulings were as follows:
          (i)  A  March 1999 email by David King, DCMCs  in-house
counsel, to ACCs attorney: My clients have not informed me of any
plans  for additional dealerships in Alaska.  The superior  court
found  that this statement was true, because DCMC did not have  a
concrete plan to add a dealership when it made this statement. It
also  found  that the statement was so hedged that  ACC  was  not
justified in relying on it, and that ACC did not in fact rely  on
it, in that it kept seeking more formal assurances from DCMC.
          (ii)  A statement in the May 21, 1999 letter to ACC  by
DCMC manager Carl Fleck: As to awarding a Dodge Sales and Service
agreement to Johnson Jeep, I can confirm that DaimlerChrysler has
no  plan to add Dodge to the [Johnson Jeep] dealership.  This was
in  response to a request by ACC to add language clarifying  that
the  agreements  between ACC, DCMC, and Johnson  Jeep  would  not
include  the Dodge franchise.18  The superior court characterized
Flecks statement as merely address[ing] [ACC President] Udds oft-
stated  concern and understanding of the scope of the discussions
that had been ongoing for over a year.  Udd wanted to protect his
Dodge franchise from [Johnson Jeep].
          (iii)  A statement to ACC on a conference call  by  the
same DCMC manager, the day ACC signed the agreement, allegedly to
the  effect  that DCMC would not establish a Dodge dealership  in
south   Anchorage.   Fleck,  the  manager,  testified  that   his
statement  was simply a confirmation that Johnson Jeep would  not
be  getting a Dodge franchise, rather than a promise not to  open
an entirely new dealership.  The court found Flecks evidence more
credible than ACCs.  The Court finds that it is not credible that
Fleck,  at  this stage of the lengthy discussions  regarding  the
realignment of vehicle lines between [Johnson Jeep] and ACC,  and
especially  at the end of a brief, unexpected phone  call,  would
agree  to  forego  the placement of a Dodge dealership  in  south
Anchorage.
          These  three statements are the basis of several issues
on appeal.  First, there is ACCs claim that the statements amount
to  additional promises that ought to be incorporated in the  May
28  letter agreement.  The only statement of the three that could
possibly be construed as a promise (as opposed to a statement  of
present intention) is Flecks statement on the May 28 phone  call,
which  is number (iii) in the list above.  But the superior court
found,  based  on Flecks testimony at trial, that Fleck  made  no
such  promise  on  the  phone call.  This is  a  factual  finding
reviewed for clear error.19  Since the finding is supported by at
least some evidence, we will not disturb it here.
          The  more difficult issue raised by ACC is whether  the
superior  court properly considered whether the three  statements
might  amount  to a misrepresentation.  Alaska cases  follow  the
Restatement  (Second) of Torts on what constitutes  a  fraudulent
          misrepresentation.20  The Restatement identifies several elements
of  intentional  misrepresentation:  (1) a  misrepresentation  of
fact  or  intention, (2) made fraudulently (i.e., with scienter),
(3)  for the purpose of inducing another to act in reliance,  (4)
with justifiable reliance by the recipient, (5) causing loss.21
          The superior court rejected the misrepresentation claim
related to the King email (paragraph (i), above) because it found
the statement was technically true, because the statement was  so
hedged  that ACC was not justified in relying on it, and  because
the  court  found that ACC did not in fact rely on the statement,
in  that  ACC  kept  seeking more formal  assurances  from  DCMC.
Whether  the  statement  was misleading in  spite  of  its  being
technically  true is open to question; the problem of half-truths
is  discussed  more  below.  But the finding  that  ACC  did  not
justifiably  rely  on any misleading statement  by  King  was  an
adequate  basis to reject any misrepresentation claims  based  on
the  King  email.   ACC does not challenge the  finding  that  it
continued  to  seek  assurances  that  there  would  be  no   new
dealerships,  and  from  this fact the superior  court  plausibly
inferred   that  ACC  did not actually rely on  the  King  email.
Moreover,  the court did not err in finding that, even  if  there
had  been actual reliance by ACC on Kings hedged statements, such
reliance  would  have  been unreasonable.  Although  some  courts
appear  to  hold that determinations as to whether  reliance  was
justified  can be a question of law reviewed de novo,22  our  own
precedents suggest that it is a question of fact,23 and it  seems
that  most jurisdictions that have addressed the issue say it  is
either  a  purely factual issue or a mixed question  of  law  and
fact, to be reviewed for clear error in either event.24  We  will
therefore  extend deference to the superior courts  determination
and  reverse  only  if reasonable minds could not  disagree  that
reliance was justified.25  Under this standard, we think  it  was
reasonable  for  the superior court to conclude that  someone  in
ACCs  shoes  would  have acted unreasonably in relying  on  Kings
statements as precluding new DCMC dealerships in south Anchorage.
Since   actual  reliance  and  justifiable  reliance   are   both
prerequisites   to   claims   of   negligent   and    intentional
misrepresentation,26  the court did not  err  in  rejecting  ACCs
claims that the King email was a misrepresentation.27
          The   superior  courts  treatment  of  the  other   two
statements (the Fleck letter and the May 28 conference call  with
Fleck)  is more problematic.  The court did not directly  address
whether   these   statements   were  intentional   or   negligent
misrepresentations, although it did find that  Flecks  statements
were  merely  true statements that DCMC did not  intend  to  give
Johnson  Jeep the Dodge line.  What is problematic  is  that  the
superior court did not appear to appreciate that a statement  can
be    literally   true   and   yet   still   be   an   actionable
misrepresentation.   Section 529 of the Restatement  (Second)  of
Torts says: A representation stating the truth so far as it  goes
but which the maker knows or believes to be materially misleading
because  of his failure to state additional or qualifying  matter
is  a  fraudulent  misrepresentation.28  Under this  standard,  a
partial  disclosure  is  fraudulent  if  the  person  making  the
          statement knows or believes that the undisclosed facts might
affect the recipients conduct in the transaction in hand.29   The
Restatement  gives  some examples, including  a  prospectus  that
fails to list all the companys debts; a statement that a title to
land  has  been  upheld by a particular court without  mentioning
that  the courts decision has been appealed; and a statement that
tenants  in a building all pay a certain rent, without mentioning
that  the  rent  is still subject to approval by a  rent  control
agency.30   In  addition, this court has held that  a  defendants
offer  to pay property taxes on the plaintiffs behalf might  have
implied that the plaintiffs owned the land, such as to give  rise
to at least a question of fact as to whether the defendant misled
the plaintiffs about the status of their ownership interest.31
          Here  it  appears that ACC was concerned  that  Johnson
Jeep  would get a Dodge dealership, apparently without adequately
considering  whether DCMC might withhold Dodge from Johnson  Jeep
and  yet still open an entirely new Dodge dealership in Anchorage
soon thereafter.  DCMC may have known that a new Dodge dealership
was  a distinct possibility (even though it had not yet developed
concrete  plans),  and  that ACC would  never  sign  the  May  28
agreement  if it appreciated the possibility of a new dealership.
DCMC  might therefore have decided to exploit ACCs tunnel  vision
by  crafting its reassurances to ACC to cover Johnson Jeep and no
more.   These anyway are ACCs allegations,  supported by at least
some  evidence,  and there is little or nothing in  the  superior
court  opinion  that rejects this version of the facts.32   Under
this  scenario,  would DCMCs statements about  withholding  Dodge
from  Johnson Jeep, combined with Kings earlier denial of knowing
about any expansion, be misleading because of [DCMCs] failure  to
state   additional  or  qualifying  matter   namely,  the  likely
possibility  of a new Dodge dealership in Anchorage in  the  near
future?   Did  DCMC  know or believe that the  undisclosed  facts
might [have] affect[ed] the recipients conduct in the transaction
in hand?  The superior court seemed to focus on the literal truth
of DCMCs statements, and does not appear to have considered these
questions, even though ACCs pre-trial papers presented them in  a
straight forward fashion.33
          Although  the  question of whether a  misrepresentation
exists  is  normally  a question of fact, we think  the  superior
courts  failure  to  make  factual findings  appropriate  to  the
relevant  legal  test  (here,  Section  529  of  the  Restatement
(Second)  of  Torts) was an error of law, just as erroneous  jury
instructions are an error of law.34  We appreciate that, even  in
ACCs  version of events, these two statements were probably  less
radically  incomplete  than  the illustrations  provided  in  the
Restatement  (e.g., a company that fails to list all its  debts),
particularly  since  at least one of them,  the  May  21  letter,
appears  to have been made in response to a specific question  by
ACC  about  Johnson  Jeep.  Still, the question  of  whether  the
statements  were  fraudulent under the  relevant  standard  is  a
question  for  the  trier of fact, which in  this  case  was  the
superior court.
          Finally,  DCMC  argues that any oral misrepresentations
about  new  dealerships are irrelevant, because ACCs basic  sales
          and service agreements give DCMC the right to place new Dodge
dealerships  in  Anchorage, and these same agreements  cannot  be
amended except in writing.  Yet the question is not whether  DCMC
retained  a  right,  notwithstanding any oral  misstatements,  to
establish  another dealership in Anchorage under  the  sales  and
service agreements  if it were, DCMC might well be right to argue
that  any  such  statements  would be irrelevant.   Instead,  the
question  is  whether DCMCs alleged oral statements  (which  DCMC
appears to have been reluctant to commit to writing) were a fraud
inducing  ACC  to  enter into the May 28 letter  agreement.   Put
differently, an oral statement that would be unenforceable  as  a
promise  under  the  terms of Contract A may yet  be  a  tortious
misstatement  if  it induces the recipient of  the  statement  to
enter into Contract B.
          For  these  reasons,  we  vacate  the  superior  courts
decision  as  to  the claims that the two Fleck  statements  were
negligent and/or intentional misrepresentations, and remand  this
part of the case for further consideration.
     C.   The Wasilla Letter of Intent
          In  the  days leading up to the May 28, 1999 agreement,
the  parties negotiated over the terms of a letter of  intent  by
which ACC would obtain the right to open a dealership in Wasilla.
DCMC sent a draft to ACC in March 1999 and then another draft  on
May  21,  1999.  The parties did not sign either draft,  although
the  May 21 draft appears to be a document in final form, without
blanks or brackets.  On May 28, 1999, ACC signed the short letter
agreement  that  gave  rise  to  this  litigation.   The   letter
agreement said that DCMC will provide ACC with its standard  five
year  Letter of Intent to give ACC a dealership in Wasilla.   The
agreement  further  stated that [t]he Letter of  Intent  will  be
drafted  to become effective as of the date of the standard  Jeep
Sales  and Service Agreement referenced above.  But DCMC did  not
send  a  letter of intent at any point after May 26, the day  the
letter  agreement was dated, either in the May 21 version  or  in
any  other version.  Similarly, ACC never signed the May 21 draft
it  had  already received and it never asked DCMC to send  a  new
one.   In  its complaint, ACC claimed by implication  that  DCMCs
failure  to send a new letter of intent was a breach of contract.
The  court rejected this claim, on the ground that ACC had a duty
to sign the May 21 draft or ask for a new one:
               ACC   might  have  read  the  May   1999
          agreement  to  require  that  DCMC   send   a
          proposed  LOI  [letter of intent]  after  Udd
          signed on 28 May (whether different from  the
          21  May LOI or not).  But ACC never made that
          demand to DCMC.
          
               ACC never demanded that the draft LOI be
          modified.    Instead  ACC  did   nothing   to
          implement  the May 1999 agreement  concerning
          Wasilla.  After ACC filed its lawsuit .  .  .
          objecting  to  DCMCs demands  concerning  the
          transformation of the ACC sales complex,  ACC
          and DCMC met without counsel to resolve their
          disagreements.  They appeared  to  have  made
          progress    toward    understanding    and/or
          compromise.   Nonetheless, ACC  never  signed
          the  LOI.   That was a breach of the  28  May
          1999 agreement.
          
(Citations omitted.)
          ACC   argues  that  the  superior  courts  ruling   was
erroneous for several reasons. First, ACC points out that the May
28  letter  agreement says DCMC will provide a letter of  intent,
and  DCMC never did so; there is no requirement that ACC  make  a
demand.   ACC also argues the May 21 letter of intent  cannot  be
the  agreement  contemplated  by the  May  28  letter  agreement,
because  it requires ACC to take certain actions as soon as  June
2002  and  was  therefore  not the five  year  Letter  of  Intent
referred to in the contract.
          We  do not agree with ACC that, merely because the  May
21  letter of intent requires that some deadlines be met in  less
than  five  years, it cannot possibly be the five year Letter  of
Intent  contemplated by the agreement.  But we do  think  ACC  is
entitled to a remand on this issue.  ACC is correct that there is
nothing  in  the  May 28 letter agreement that  required  ACC  to
demand  that DCMC provide the letter of intent; DCMCs  obligation
to  provide  the  letter  of  intent was  unconditional.   It  is
possible  that ACCs failure to insist on this right could  be  an
implied  waiver  of its right to be offered a letter  of  intent.
But  the  standard  for an implied waiver  is  high  and  factual
findings  are required.35  The superior court in its opinion  did
not make findings on this subject.
          But what about the May 21 letter of intent?  If the May
21  letter of intent was in form and substance the standard  five
year Letter of Intent described in the May 28 agreement, the case
would be simpler.  Then DCMCs breach, if any, would merely be its
failure to re-send this letter of intent to ACC.  And the damages
flowing  from such a picayune breach would probably  be  nominal,
inasmuch  as ACC essentially concedes that it ultimately  refused
to  sign the agreement in this form.  Yet the superior court  did
not  make  a finding as to whether the words standard  five  year
Letter of Intent  referred to the May 21 letter of intent  or  to
an  agreement  having  different terms.  It explicitly  refrained
from  deciding  this  question.36  And there  is  at  least  some
evidence  suggesting that ACC was not satisfied with the  May  21
letter  of  intent because it required ACC to meet some deadlines
in  less than five years, and that DCMC knew the May 21 letter of
intent  would have to be changed when the parties signed the  May
28  letter  agreement.37  If it were the case that ACC understood
the  letter  agreement to refer to a letter of intent with  terms
different from those in the May 21 letter of intent, and if  DCMC
knew  this,  ACCs understanding of standard five year  Letter  of
Intent should prevail over DCMCs.38  Alternatively, it may be that
both  parties understood standard five year Letter of  Intent  to
mean different things, in which case the result may be there  was
no  contract at all.39  Or it may be that both parties understood
the  May 21 letter of intent was the one being referred to in the
          May 28 agreement, in which case the courts dismissal would prove
to be the proper course after all.
          We  therefore remand the case to the superior court for
additional findings, with directions to the court as follows.  If
it  determines  that  both parties understood  that  the  May  28
agreement referred to the May 21 letter of intent, then it should
reject  ACCs breach claim because it seems clear ACC never  would
have  signed that letter of intent.  If it believes that ACC  had
in  mind a different letter of intent, and that DCMC was aware of
this,  then it should consider whether ACC implicitly waived  its
right  to  receive this letter of intent by failing  to  complain
when  DCMC  did not send a revised letter of intent.  This  would
require  a  consideration  of the circumstances  surrounding  the
contentious  period  that  followed the  signing  of  the  letter
agreement  under  the standards for an implied  waiver  described
above.  If there was no waiver by ACC, then DCMCs failure to send
a  revised  letter  of intent would amount to  a  breach  of  its
obligation  under  the letter agreement to  supply  a  letter  of
intent.  Finally, if the court concludes that the parties did not
have  a  meeting of the minds on what constituted the  letter  of
intent so vaguely identified in the May 28 letter agreement, then
the  court  may  choose to take briefing on  what  remedy  should
issue.40
     D.   The Covenant of Good Faith and Fair Dealing
          ACC  claimed several breaches of the covenant  of  good
faith  and fair dealing: (1) DCMCs failure to notify ACC that  it
intended to establish a new south Anchorage dealership,  (2)  its
alleged  revocation of the Wasilla letter of intent, and (3)  its
allegedly  unreasonable demands for changes in  ACCs  facilities.
ACC  argued that these breaches were  manifested by, among  other
things,  the  timing of DCMCs decision to open a  new  dealership
(allegedly in retaliation for ACCs filing its complaint), and  by
DCMCs  treating Johnson Jeep more favorably than ACC.   ACC  also
suggests  that  we  should evaluate DCMCs  conduct  in  light  of
Relevant  Market Area legislation enacted in Alaska in  2002,  by
which car manufacturers are required (among other things) to give
dealers  notice and to have good cause before setting up  another
local dealership.41
          As  ACC points out, the superior court did not make any
findings on these claims.  The closest it came was when the court
rejected the notion that Relevant Market Area legislation enacted
after  the dispute arose had any bearing on the case.  With  this
much we agree; a court should not anticipate legislation imposing
tort  duties  inconsistent with existing common  law  principles.
But  the  court  never  decided or even mentioned  whether  DCMCs
conduct might have otherwise violated the covenant of good  faith
and  fair  dealing, nor did it make the factual findings incident
to  such  a  ruling.   We therefore vacate  the  superior  courts
judgment  to  the  extent it fails to address these  claims,  and
remand the case for consideration of this issue as well.
IV.  CONCLUSION
          We  VACATE the superior courts judgment insofar  as  it
fails to consider (1) the claim for a declaration as to what  ACC
must  do  to  receive Jeeps under the letter agreement;  (2)  the
claim  alleging misrepresentations by Fleck; (3)  the  breach  of
contract claim related to the Wasilla letter of intent;  and  (4)
the  claim  for  a  breach of covenant of  good  faith  and  fair
dealing.  We also VACATE the superior courts attorneys fee award,
inasmuch as it was based on DCMCs having prevailed on all claims.42
The   case  is  REMANDED  to  the  superior  court  for   further
proceedings.
_______________________________
     1     This  commitment by ACC was initially made subject  to
viable  economic  circumstances, although a few weeks  later  ACC
agreed to drop this particular condition.

     2    Unlike DCMCs prior draft, this letter of intent did not
contain any language that purported to preclude ACC from opposing
DCMCs establishment of competing dealers.

     3     According  to  the terms of the letter  agreement,  it
became effective on June 1, 1999, the date that it was signed  by
an  authorized representative of DCMC.  The superior court  chose
to  refer to the letter agreement as the May 28 letter agreement,
based  on  the  date ACC signed the agreement.  For  purposes  of
clarity, we will continue to refer to the agreement as the May 28
letter agreement.

     4    In re Schmidt, 114 P.3d 816, 820 (Alaska 2005).

     5     The superior court found that the issue of which party
breached the Jeep deal [was] the most difficult of the case, that
there was evidence that supports ACCs allegations, that DCMC  may
have  made life difficult after the agreement was signed  because
it  clearly preferred to have different [dealers] in southcentral
Alaska,   and that some of DCMCs actions in the period after  the
agreement  was  signed  were more than a little  troubling.   The
findings also state that Flecks subordinates were making  demands
that  ACC  did not perceive to be consistent with Flecks  earlier
assurances of simplicity.

     6    Restatement (Second) of Contracts  224 (1981).

     7    Id.  225(1); see also Kennedy Assocs., Inc. v. Fischer,
667  P.2d  174, 178 (Alaska 1983) (explaining that  a  plaintiffs
failure to perform condition precedent is complete defense).

     8     Jefferson v. Asplund, 458 P.2d 995, 999 (Alaska  1969)
(citations omitted).

     9    Id. at 998 (citations omitted).

     10     Id. at 999 n.20 (quoting Maryland Cas. Co. v. Pacific
Coal & Iron Co., 312 U.S. 270, 273 (1941)).

     11     Broadview Chem. Corp. v. Loctite Corp., 417 F.2d 998,
1001   (2d   Cir.  1969)  (quoting  Edwin  Borchard,  Declaratory
Judgments 299 (2d ed. 1941)), cert. denied, 397 U.S. 1064 (1970).
If   either  prong  is  met,  the  action  must  be  entertained.
Broadview Chem., 417 F.2d at 1001.  The D.C. Circuit has made the
test  still  more  specific.  Under its rule,  the  court  should
consider

          whether  [declaratory relief]  would  finally
          settle  the controversy between the  parties;
          whether other remedies are available or other
          proceedings pending; the convenience  of  the
          parties;  the  equity of the conduct  of  the
          declaratory judgment plaintiff; prevention of
          procedural fencing; the state of the  record;
          the   degree   of  adverseness  between   the
          parties;  and  the public importance  of  the
          question to be decided.
          
Jackson  v. Culinary Sch. of Washington, Ltd., 27 F.3d  573,  580
(D.C.  Cir.  1994), vacated and remanded for application  of  the
correct standard of review by 515 U.S. 1139 (1995).  Our cases on
declaratory  judgments generally follow federal cases  construing
the  federal Declaratory Judgment Act.  Lowell v. Hayes, 117 P.3d
745, 755 (Alaska 2005); Jefferson, 458 P.2d at 997 n.7.

     12    Broadview Chem., 417 F.2d at 1001.

     13     See, e.g., Fidelity & Deposit Co. of Maryland v. City
of  Sheboygan Falls, 713 F.2d 1261, 1265 (7th Cir. 1983) (holding
that   where  plaintiff  was  indemnified  for  certain   amounts
potentially  owed by plaintiff to defendant, and where  plaintiff
had  interest  in  collecting on indemnity  quickly,  declaratory
action  would lie to determine plaintiffs liability to defendant,
even  though  defendant  had  not  yet  sought  to  collect  from
plaintiff); Salomon Bros., Inc. v. Carey, 556 F. Supp.  499,  502
(S.D.N.Y.  1983)  (permitting brokerage to  bring  a  declaratory
action to establish that it was not liable to its customer,  even
though  customer had merely advised brokerage that he thought  he
had  a  claim and wanted to settle it: This courts judgment  will
serve  a  useful  purpose  in  alerting  other  Salomon  Brothers
customers  .  .  . of the legal consequences of Salomon  Brothers
actions under both contract and agency law and will terminate the
uncertainty and controversy giving rise to the proceeding.);  see
also 8 Catherine M.A. Mc Cauliff, Corbin on Contracts  30.9 (rev.
ed.  1999)  (Certain judicial remedies may be  available  and  an
action   for  them  maintainable  even  before  any   breach   of
contractual duty has occurred and while the duty [to perform]  in
question  is  still future and conditional.  .  .  .   For  these
purposes,  declaratory  judgments  and  equitable  remedies   are
available.).

     14     Lowell,  117 P.3d at 750 (In light of the significant
role  of judicial discretion in the administration of declaratory
judgment, we will reverse the dismissal of a declaratory judgment
action that is not based on prudential grounds only when we  find
that  the superior court abused its discretion.); see also Wilton
v. Seven Falls Co., 515 U.S. 277, 289-90 (1995).

     15    Of course, if it turns out that the relevant condition
precedent  (establishment of separate facilities  and  compliance
with any other requirements) can for some reason no longer occur,
the  case  for  declaratory  relief would  be  much  weaker.  See
Restatement  (Second) of Contracts  225(2) (Unless  it  has  been
excused,  the non-occurrence of a condition discharges  the  duty
when the condition can no longer occur.).

     16     See Jackson v. Culinary Sch. of Washington, Ltd.,  59
F.3d 254, 256 (D.C. Cir. 1995) ([W]e believe it essential for the
district court to give explicit consideration to whether the case
is appropriate for declaratory judgment. . . .  [W]e find that  a
remand of the case is necessary so that the district court has an
opportunity to exercise its discretion . . . .).

     17    A final issue is whether ACC has waived its entitlement
to  declaratory relief, here or in the superior court.  We  think
there  has  not been a waiver.  First, we believe ACC  adequately
raised  the  issue  on appeal.  Although ACC did  not  explicitly
mention  declaratory relief until its reply  brief,  its  opening
brief  makes  the  argument  in  substance  if  not  in  form  by
contending that the superior court failed to determine  what  the
Agreement required ACC to do to transform its sales complex.   In
our  view,  this  is  good enough to avoid  waiver.   Second,  we
believe  the  issue was adequately raised in the superior  court.
ACCs   complaint   quite   plainly  seeks   declaratory   relief.
Declaratory  relief  is not explicitly mentioned  in  ACCs  trial
brief or in its proposed findings of fact and conclusions of  law
(both  of  which  seek damages and delivery of  Jeeps),  but  the
latter  seeks  legal rulings that are effectively  a  declaratory
judgment,  including a proposed conclusion that  ACC  may  comply
with  the May 28 agreement by implementing a simple location swap
and  a  signage  change.  We think this is enough  to  avoid  any
waiver in the superior court.

     18    Rod Udd, the primary shareholder and president of ACC,
had  written  DCMC:   I will add the Jeep line  as  part  of  the
Project  2000,  if  the third paragraph of our  agreement  letter
read[s]  as  follows:  . . . The Project 2000  agreement  between
[ACC],  Johnson  Jeep[,] and [DCMC] does not  include  the  Dodge
franchise.

     19    Hall v. TWS, Inc., 113 P.3d 1207, 1210 (Alaska 2005).

     20    Carter v. Hoblit, 755 P.2d 1084, 1086-87 (Alaska 1988)
(relying on Restatement).

     21     Restatement  (Second)  of  Torts   525  (1977).   The
scienter  requirement  in  the case of  a  claim  of  intentional
misrepresentation is met where the speaker knows or believes that
the  matter is not as he represents it to be, does not  have  the
confidence in the accuracy of his representation that  he  states
or  implies,  or knows that he does not have the  basis  for  his
representation that he states or implies.  Id.  526.

     22     Gardner  v. Gardner, 527 N.W.2d 701, 710  (Wis.  App.
1994) (holding that where there was no debate over the facts, the
question  of  whether a particular statement was  fraudulent  and
justifiably  relied  upon  would be  reviewed  de  novo),  review
denied, 531 N.W.2d 327 (Wis. 1995).

     23    Indus. Commercial Elec., Inc. v. McLees, 101 P.3d 593,
601  (Alaska  2004)  (holding that whether  the  level  of  trust
between  the parties to a settlement agreement was sufficient  to
justify  reliance  was  an issue of fact that  precluded  summary
judgment: Whether reliance is justified in a given case seems  to
us  more  likely  to turn on the course of dealings  between  the
parties before and during the dispute.); Ambassador Ins.  Co.  v.
Kenneth  I. Tobey, Inc., 618 P.2d 572, 574 (Alaska 1980) (holding
that  whether  reliance was reasonable was one  of  many  factual
disputes precluding summary judgment).

     24     See,  e.g.,  Minnesota Forest Prods., Inc.  v.  Ligna
Machinery,  Inc.,  17  F.  Supp. 2d  892,  912  (D.  Minn.  1998)
(explaining that under Minnesota law, [t]he question of whether a
party  justifiably  relied  upon anothers  representations  is  a
question of fact for the jury); Smith v. Pope, 176 A.2d 321,  325
(N.H.  1961)  ([T]he conclusion that the plaintiffs reliance  was
justified  is implicit in the verdict. If a different view  might
have  been taken upon the evidence, we cannot say that the  trier
of  the  facts who heard and saw the parties was compelled  as  a
matter  of  law to adopt it.); Bolser v. Clark, 43  P.3d  62,  66
(Wash.  App.  2002)  (Whether a party  justifiably  relied  is  a
question  of  fact unless reasonable minds could  reach  but  one
conclusion, in which case the issue may be determined as a matter
of  law.); cf. In re Rovell, 194 F.3d 867, 870-71 (7th Cir. 1999)
(holding  that reasonable reliance is mixed question of  law  and
fact, but is still reviewed for clear error:  The case law firmly
establishes the proposition that a finding of reasonable reliance
is reviewed for clear error . . . .).

     25    Bolser, 43 P.3d at 66.

     26     As noted above, justifiable reliance is an element of
intentional  misrepresentation.  Restatement  (Second)  of  Torts
525.    Section  552(1)  of  the  Restatement  makes  justifiable
reliance one of the elements of negligent misrepresentation.

     27     Our conclusion that the King email was not in and  of
itself   worthy  of  reasonable  reliance  should  not   preclude
consideration of whether the King email helped create  a  context
that made subsequent statements misleading.

     28     This standard has been cited with approval by  Alaska
courts.  See Carter, 755 P.2d at 1086.

     29    Restatement (Second) of Torts  529 cmt. b.

     30    Id.  529 cmt. a and illustration 2.

     31    Carter, 755 P.2d at 1086.

     32    As the superior court pointed out, Fleck testified that
if,  before completion of the Project 2000 realignment, DCMC  had
revealed  to  ACC  . . . DCMCs intent to open a  south  Anchorage
Dodge, he doubted [ACC] would have consummated the realignment of
vehicle lines.

     33     ACCs Proposed Findings of Fact and Conclusions of Law
referred  to all three alleged misrepresentations and  emphasized
Flecks  testimony that he did not want to spell . . .  out  DCMCs
plans to open a new dealership.  ACCs trial brief noted that half-
truths  and  true  remarks  that omit  material  information  are
actionable  misrepresentations under Alaska law, relying  on  the
Carter case cited above.

     34     See,  e.g., Zaverl v. Hanley, 64 P.3d 809,  817  n.16
(Alaska 2003) (jury instructions); Freeman v. Southwire Co.,  605
S.E.2d  95, 96 (Ga. App. 2004) (explaining that factual decisions
based  on erroneous theories of law . . . are subject to  the  de
novo standard of review).

     35    This court has previously explained:

          An  implied waiver arises where the course of
          conduct  pursued  evidences an  intention  to
          waive  a  right, or is inconsistent with  any
          other  intention  than  a  waiver,  or  where
          neglect  to insist upon the right results  in
          prejudice  to another party. .  .  .  [T]here
          must    be    direct,   unequivocal   conduct
          indicating a purpose to abandon or waive  the
          legal right, or acts amounting to an estoppel
          by the party whose conduct is to be construed
          as a waiver.
          
Milne  v.  Anderson, 576 P.2d 109, 112 (Alaska  1978)  (citations
omitted);  see also Wausau Ins. Cos. v. Van Biene, 847 P.2d  584,
589  (Alaska 1993) (holding that neglect to insist upon  a  right
only  results  in  an estoppel, or an implied  waiver,  when  the
neglect  is  such that it would convey a message to a  reasonable
person  that the neglectful party would not in the future  pursue
the legal right in question and refusing as a result to uphold  a
finding  of implied waiver where evidence suggested mere  neglect
or an internal mistake).

     36     The superior court said:  ACC might have read the May
1999 agreement to require that DCMC send a proposed LOI after Udd
signed on 28 May (whether different from the 21 May LOI or  not).
(Emphasis added.)

     37    DCMC manager Carl Fleck testified:

          Q.   In  fact,  did [ACC President  Ron  Udd]
               provide  you  any  comments  about  this
               document [the May 21 letter of intent]?
          A.   This document?
          Q.   Correct.
          A.   The  only comments that Im familiar with
               is  he  was  concerned  about  the  time
               tables,  the time  the numbers on here.
          Q.   Okay.  And would that  and that was some
               certainly something you were willing  to
               work on?
          A.   Sure.
               
     38     See  Restatement  (Second)  of  Contracts   201(2)(a)
(stating that where A understands contract to mean one thing, and
B knows this, As meaning prevails over Bs).

     39     See  id.   201(3) (Except as stated in this  Section,
neither party is bound by the meaning attached by the other, even
though the result may be a failure of mutual assent.).

     40     See  id.  201 cmt. d (There may be a binding contract
despite  failure  to  agree as to a term,  if  the  term  is  not
essential or if it can be supplied.  See  204.  In some  cases  a
party can waive the misunderstanding and enforce the contract  in
accordance with the understanding of the other party.); id.   204
(When  the  parties to a bargain sufficiently  defined  to  be  a
contract  have  not  agreed  with respect  to  a  term  which  is
essential to a determination of their rights and duties,  a  term
which  is  reasonable in the circumstances  is  supplied  by  the
court.).

     41    AS 45.25.180.

     42     ACC  claimed that the attorneys fees awarded  by  the
superior  court  to  DCMC  were too  high  and  provided  several
examples of what it said was over-lawyering on DCMCs part.  It is
unnecessary  to consider this challenge in light of our  decision
to  vacate the superior courts resolution of the merits  and  the
fee award that was based on the merits resolution.

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