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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Jarvis v. Ensminger (05/05/2006) sp-6010

Jarvis v. Ensminger (05/05/2006) sp-6010, 134 P3d 353

     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

TROY JARVIS, )
) Supreme Court No. S- 11581
Appellant, )
) Superior Court No.
v. ) 3AN-02-9287 CI
)
GARY ENSMINGER, JAMES )
JOHNSON, MOTORS, INC., and )
FAIRBANKS NISSAN, INC., ) O P I N I O N
)
Appellees. ) No. 6010 - May 5, 2006
)
          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, Morgan Christen, Judge.

          Appearances: Kevin T. Fitzgerald,  Ingaldson,
          Maassen  &  Fitzgerald, P.C., Anchorage,  for
          Appellant.  Mark E. Wilkerson and Wallace  H.
          Tetlow,    Wilkerson,   Hozubin   &    Burke,
          Anchorage, for Appellees.

          Before:   Bryner,  Chief  Justice,  Matthews,
          Eastaugh, Fabe, and Carpeneti, Justices.

          CARPENETI, Justice.

I.   INTRODUCTION
          Troy Jarvis was hired as the sales manager at Fairbanks
Nissan.    His   employment  contract  included   a   performance
incentive: by meeting certain sales benchmarks he could  earn  an
option  to  purchase as much as thirty percent of the  shares  in
Fairbanks  Nissans parent corporation, Motors, Inc.   Jarvis  met
those  benchmarks but Motors refused to honor his option.  Jarvis
sued,   claiming  breach  of  contract,  misrepresentation,   and
promissory estoppel. The superior court granted summary  judgment
to  Motors,  holding that the contract contained  an  unsatisfied
condition precedent and that defendants were entitled to judgment
regarding  Jarviss  misrepresentation  and  promissory   estoppel
claims.  Jarvis appeals.  We affirm the superior court in  regard
to Jarviss contract claim but reverse and remand in regard to his
misrepresentation and promissory estoppel claims.
II.  FACTS AND PROCEEDINGS
     A.   Facts
          Fairbanks Nissan, Inc. is a subsidiary of Motors,  Inc.
Prior  to July 10, 1997 all 7,500 outstanding Motors shares  were
held by the James E. Johnson Revocable Trust (Johnson Trust),  of
which  James E. Johnson was, and is, the trustee and beneficiary.
On  July  10,  1997  the Johnson Trust and  Gary  Ensminger,  the
general  manager  of  Fairbanks Nissan,  executed  a  shareholder
agreement  issuing  7,500 new Motors shares  to  Ensminger.   The
shares were issued to Ensminger on August 26, 1997.
          The  shareholder agreement specified that  Johnson  and
Ensminger  would compose the board of directors of  Motors,  with
Johnson     serving    as    president    and    Ensminger     as
secretary/treasurer.1   Even  though  the  shareholder  agreement
rendered Ensminger and the Johnson Trust co-owners, each  holding
fifty   percent  of  the  outstanding  shares  in   Motors,   the
shareholder agreement specified that Johnson, both as the trustee
of  the  Johnson Trust and as president of Motors,  would  retain
corporate control until September 1, 2000.2
          The  agreement  established three  ways  in  which  the
shares  held  by the Johnson Trust might be obtained  by  Motors.
When  Johnson  reached the age of seventy, the corporation  would
receive a call option and the Johnson Trust would receive  a  put
option.   The call option entitled Motors to purchase the  shares
held by the Johnson Trust and the put option entitled the Johnson
Trust  to  sell those same shares to the corporation.  The  price
for  the  shares under either option was to be determined  by  an
agreed-upon  formula  contained  in  the  shareholder  agreement.
Additionally,  the agreement specified that upon Johnsons  death,
the  corporation was obligated to purchase the shares held by the
Johnson Trust.
          Ensminger recruited Jarvis to work as the general sales
manager  of  Fairbanks  Nissan  in  November  1997.   Jarvis  and
Ensminger initially agreed that Jarvis would receive six and one-
half  percent of the gross sales profit for new and used cars  as
commission.  This compensation package was amended by  a  written
agreement  on  February  1,  1998.3   The  February  1  agreement
specified that Jarvis would receive only six percent of the gross
sales  profit,  but would also receive an option  to  buy  up  to
thirty  percent of the shares in Motors, or 4,500 shares,  if  he
met  certain sales benchmarks.  The agreement further stated that
[t]he  percentage that is being made available  are  Jim  Johnson
Trust shares which must first be bought from Jim Johnson by  Gary
Ensminger/Fairbanks   Nissan.    Additionally,   the    agreement
established  a time frame within which Jarvis could exercise  his
option.  If Jarvis met his benchmarks, the agreement stated  that
[t]he  performance option stock transfer will be exercised  after
the   purchase   from   Jim  Johnson  Trust   account   by   Gary
          Ensminger/Fairbanks Nissan or December 31, 2000, whichever is
[later].
          On  November  27, 1998 Ensminger and the Johnson  Trust
amended  the shareholder agreement to provide Ensminger with  the
option  of  buying the Johnson Trust shares between September  1,
2000 and October 15, 2000.
          Shortly  after executing this amendment, Ensminger  and
Johnson  had  a  falling  out  and Ensminger  was  terminated  on
February  26,  1999.4  Ensminger never exercised  any  option  to
purchase  shares  from  the  Johnson  Trust.   At  the  time   of
Ensmingers termination, Motors had not exercised its call  option
and the Johnson Trust had not exercised its put option.
          Jarvis  left his job with Fairbanks Nissan in  February
2001.   On  February 9, 2001 he sought to exercise his option  to
purchase  4,500  shares of Motors.5  Johnson refused  and  Jarvis
sued.
     B.   Proceedings
          Jarvis  filed suit against Ensminger, Johnson,  Motors,
and   Fairbanks  Nissan  in  July  2002,  seeking   $100,000   in
compensatory damages plus undetermined punitive damages.   Jarvis
alleged  that  the  failure  to honor  his  option  breached  the
explicit terms of his contract as well as the implied covenant of
good  faith  and fair dealing.  He also claimed misrepresentation
and   promissory  estoppel.   Jarvis  argued  that  because   the
defendants  acted with intentional bad faith he  is  entitled  to
punitive  damages.  On September 19, 2002 the defendants answered
the   complaint   and   asserted  several  affirmative   defenses
including an assertion that no relief could be granted  based  on
Jarviss  claim because the February 1, 1998 employment  agreement
contained   an   unfulfilled  condition  precedent.    Defendants
contended that Jarviss purchase option was conditioned on  Motors
obtaining  shares from the Johnson Trust, and that since  neither
Motors  nor  Ensminger ever obtained any shares from the  Johnson
Trust, Jarviss purchase option never ripened.
          Defendants  moved  for summary judgment  in  July  2003
based  on this last affirmative defense.  The motion for  summary
judgment did not address Jarviss claims for misrepresentation  or
promissory estoppel.  Jarvis replied that the contract  specified
that  he  could exercise his option either upon the  purchase  by
Motors of Johnson Trust shares or on December 31, 2000, whichever
occurred  later.   Jarvis maintained that the issuance  of  7,500
shares  to  Ensminger pursuant to the July 10,  1997  shareholder
agreement6  counted  as  a  relevant purchase  of  Johnson  Trust
shares.   Consequently, Jarvis contended that his option  ripened
on December 31, 2000.
          In  an  October  29, 2003 order, Superior  Court  Judge
Morgan  Christen  denied the defendants summary  judgment  motion
without prejudice.  The court observed that it could rule on  the
condition  precedent as a matter of law.  This was  the  superior
courts  only reference to the condition precedent in  this  case.
The court held, however, that there existed a factual dispute  as
to  whether the parties had intended for the 7,500 shares held by
Ensminger  at  the  time of agreement to be  subject  to  Jarviss
purchase option.
          Defendants moved for reconsideration, claiming that the
parties could not have intended for Ensmingers 7,500 shares to be
subject to Jarviss option because the contract contemplate[d]  an
option  to  purchase Johnson shares that at some  point  in  time
after  the  signing of the Jarvis Agreement, might be  bought  by
Ensminger  from Johnson.  (Emphasis in original.)   The  superior
court  appeared to accept this argument7 but rejected the  motion
without  prejudice  since it remained unclear whether  the  7,500
shares  were transferred to Ensminger before the signing  of  the
February 1, 1998 employment agreement.
          In response to this order defendants produced the stock
certificate reflecting that the 7,500 shares had been transferred
to  Ensminger  on  August 26, 1997 and renewed their  motion  for
summary  judgment.   The court granted this  renewed  motion  for
summary judgment in March 2004.  Jarvis appeals this ruling.
III. STANDARD OF REVIEW
          We  review a superior courts decision to grant  summary
judgment  de  novo, drawing all reasonable factual inferences  in
favor  of  the non-movant and affirming if the record reveals  no
genuine  issues  of material fact and the movant is  entitled  to
judgment as a matter of law.8
          The  meaning of a contract is ordinarily a question  of
law  that  we  review  de novo.9  If the superior  court  weighed
conflicting  extrinsic evidence in interpreting the contract,  we
apply  the  more  deferential clearly erroneous standard  to  the
conclusions  drawn  by  the  superior court  from  the  extrinsic
evidence.10
IV.  DISCUSSION
     A.   The  Superior  Court  Did Not Err in  Granting  Summary
          Judgment on the Contract Claims.
          
          The  superior court granted summary judgment  based  on
its  conclusion that Jarviss option was conditioned on  a  future
purchase of Johnson Trust shares by Ensminger or Motors11 and its
finding  that  the  parties did not intend for the  7,500  shares
acquired by Ensminger pursuant to the shareholder agreement to be
subject to the option.  We agree with both and therefore affirm.
          1.   Jarviss  option was conditioned on the acquisition
               of Johnson Trust shares by Motors.
               
          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.12  We have embraced the
well-settled rule of contract interpretation that conditions  are
disfavored  and  will not be found in the absence of  unambiguous
language   indicating  the  intention  to  create  a  conditional
obligation.13  To be enforceable, a condition must be expressed in
plain, unambiguous language or arise by clear implication.14 This
interpretive  rule protects both parties to the  transaction  and
also  does not involve the consequences that a slight failure  to
perform wholly destroys all rights under the contract.15
          We    conclude   that   Jarviss   employment   contract
conditioned  his  purchase option on the future sale  of  Johnson
Trust  shares to Motors, for the language of the contract clearly
          indicates that the parties intended to create a condition.
          Two  provisions of the employment contract suggest that
Jarviss  option was conditioned on a future purchase  of  Johnson
Trust shares by Motors.   The first addresses when Jarviss option
could be exercised:
          The performance option stock transfer will be
          exercised after the purchase from Jim Johnson
          Trust  Account  by  Gary  Ensminger/Fairbanks
          Nissan  or  December 31, 2000,  whichever  is
          later.
          
(Emphasis added.)  The second discusses an event that must  occur
before Jarvis might exercise his option:
          The  percentage that is being made  available
          are Jim Johnson Trust Shares which must first
          be   bought   from   Jim  Johnson   by   Gary
          Ensminger/Fairbanks Nissan.
          
Under  these  provisions, Jarvis could not  exercise  his  option
until  after  Motors  acquired the Johnson Trust  shares.   Thus,
whether  this  language  creates  a  condition  depends  on   the
certainty of that sale.16  If the parties reasonably expected that
the  sale  was  a  certainty, this language would  not  create  a
condition;  instead,  it would specify the mechanics  of  Jarviss
option.   Based on the interaction of Jarviss employment contract
with  the  July 15, 1997 shareholder agreement, we conclude  that
the  parties could not have reasonably believed that  the  future
sale was certain to occur.17
          As discussed above, the shareholder agreement specified
three  ways  that Motors might acquire the Johnson Trust  shares:
(1)  Motors  could  exercise a call option on the  Johnson  Trust
shares  at  any time following Johnsons seventieth birthday,  (2)
Johnson  could  exercise a put option at any time  following  his
seventieth  birthday, and (3) Motors could fulfil its  obligation
to  purchase  the Johnson Trust shares in the event  of  Johnsons
death.18
          Whether  the call or put option would be exercised  was
uncertain;  neither  Motors nor Johnson was obliged  to  exercise
them.   Moreover, the employment contract specified that  Jarviss
option would ripen after the purchase of Johnson Trust shares  or
December  31,  2000, whichever is later.  This  alternate  timing
would  be  superfluous  if the parties had expected  that  Motors
would  purchase  the Johnson shares as soon as the  call  or  put
option  ripened,  or at some other relevant time  (such  as  when
Motors had sufficient cash or received financing to purchase  the
shares).   And  while Johnsons death itself is a  certainty,  the
timing  of  his death is sufficiently unknown as to preclude  the
parties  from  reasonably considering  it  a  certain  event  for
purposes of this contract.
          But  while  the contract does not use magic words  like
conditioned  or  contingent,  the most  natural  reading  of  the
contract  includes a condition.  Considering the  evidence  as  a
whole,  a  clear implication arises that a condition was intended
by  the  parties.19  Indeed, the disputed language  makes  little
          sense as anything but a condition.
          Based  on  the foregoing, we conclude that the  parties
intended  for  Jarviss  option to be conditioned  on  the  future
purchase of the Johnson Trust shares by Motors.
          2.   The  parties did not intend for Ensmingers  shares
               to be subject to the option.
               
          The  superior court also concluded that the parties did
not  intend  for  the issuance of 7,500 shares  to  Ensminger  to
trigger  Jarviss  option.20   The basis  for  the  courts  second
conclusion   is   two-fold:  (1)  the  words  of   the   contract
unambiguously indicate that the parties intended only for  shares
owned  by the Johnson Trust as of February 1, 1998 to be  subject
to  the  option; and (2) it is undisputed that Ensminger obtained
his shares on August 26, 1997.
          In  his  brief,  Jarvis disputes the finding  that  the
parties  intended only for shares that had not yet been purchased
from  the Johnson Trust to be subject to his option.  He contends
that  the parties understood that Ensmingers shares were  subject
to  the  Jarvis  purchase option.  As evidence  for  this  claim,
Jarvis  points to his November 26, 2003 affidavit.  The affidavit
expresses  Jarviss  belief  that, as of  February  1,  1998,  the
parties  understood  that Ensmingers shares were  subject  to  my
option to purchase agreement.
          Motors  replies  that this interpretation  ignores  the
plain  meaning  of  the contract and gives  too  much  weight  to
Jarviss subjective understanding of the contract.  The defendants
also  point  to  the  words of the February  1,  1998  employment
contract which indicate that the shares subject to Jarviss option
were to be purchased from the Johnson Trust at a future time.  We
agree with the defendants for three reasons.
          First, Jarviss interpretation of the contract conflicts
with  language in the contract indicating that the  shares  which
would  be  made available to him had not yet been purchased  from
the Johnson Trust.  The contract states, in relevant part:
          The performance stock option transfer will be
          exercised after the purchase from Jim Johnson
          Trust  Account  . . . or December  31,  2000,
          whichever is [later].
          . . . .
          The  percentage that is being made  available
          are Jim Johnson Trust shares which must first
          be   bought   from   Jim  Johnson   by   Gary
          Ensminger/Fairbanks Nissan.
          
(Emphasis  added.)   This  language clearly  indicates  that  the
parties  intended that Jarviss option would allow him to purchase
shares  that  had not yet been purchased from the Johnson  Trust.
Jarvis  does  not  dispute that he was aware that  Ensminger  had
received  his  shares prior to the negotiation of the  employment
contract.21   Moreover, [i]n reaching a reasonable interpretation
of  a  contract, we attempt to give effect to all of its terms.22
Jarviss   interpretation  would  render  the   timing   provision
superfluous  since a timing provision would be pointless  if  the
option had already ripened.
          Second,   the   parties  could  not   have   reasonably
considered Ensmingers shares to have been Johnson Trust shares.23
According  to the employment contract, [t]he percentage  that  is
being  made  available are Jim Johnson trust  shares  which  must
first  be  bought  from  Jim Johnson by Gary  Ensminger/Fairbanks
Nissan.   (Emphasis  added.)  The contract  further  states  that
[a]ll  parties have read and understand the shareholder agreement
dated July [10], 1997.  A review of the July 10, 1997 shareholder
agreement indicates that Ensmingers shares were new shares issued
by Motors and were not purchased from the Johnson Trust.
          The  shareholder  agreement described  Ensminger  as  a
prospective shareholder of Motors, Inc. pending issuance of  7500
shares  of  Motors, Inc. stock to him by Motors,  Inc.  (Emphasis
added.)   The  shareholder agreement also described  the  Johnson
Trust  as  a  present shareholder of Motors, Inc. . .  .  holding
7,500 shares of its common stock.  Taken together, these recitals
indicate:  (1)  that  Ensminger received his  7,500  shares  from
Motors,  rather than the Johnson Trust; and (2) that the  Johnson
Trust  could not have sold Ensminger 7,500 shares because such  a
sale would have exhausted its holdings.  In light of these facts,
the  parties  could  not  have reasonably  considered  Ensmingers
shares  to  have  been shares that had been  purchased  from  the
Johnson Trust.
          Lastly,  Jarviss  evidence that the parties  understood
that  Ensmingers shares would be subject to the  option  was  not
sufficient to avoid summary judgment.  A party moving for summary
judgment  bears the initial burden of showing the absence  of  an
issue of material fact and that it is entitled to judgment  as  a
matter  of law.24  Once the movant has met this dual burden,  the
burden shifts to the non-movant to produce facts showing that  he
will be able to present admissible evidence tending to dispute or
contradict  the movants evidence.25  After Motors  supported  its
motion  for  summary  judgment with the text  of  the  employment
agreement,  the shareholder agreement, and a copy of  the  August
26,  1997  stock  certificate, the burden shifted  to  Jarvis  to
present contradictory evidence.  Jarviss evidence consisted  only
of his own conclusory affidavit.  He stated:
          At  the  time  I entered into the  employment
          agreement  with the defendants,  I  believed,
          based upon representations made to me by Gary
          Ensminger, that he was a 50% owner of Motors,
          Inc.   I  understood  that  he  received  the
          shares  that  made him a 50% owner  from  Jim
          Johnson.   These shares were  subject  to  my
          option to purchase agreement.
          
(Emphasis   added.)    This  statement  is  not   sufficient   to
demonstrate  a factual dispute over the meaning of the  contract.
[P]arties   testimony  as  to  their  subjective  intentions   or
understandings   will  normally  accomplish  no   more   than   a
restatement of their conflicting positions.26  We generally ignore
such statements in favor of express manifestations of each partys
understanding of the contract in attempting to give effect to the
intent behind the agreement.27  In this case, Jarvis has not  put
forward any other evidence to support his interpretation.
          We  thus affirm the superior courts conclusion that the
parties did not consider Ensmingers 7,500 shares to be subject to
the option.
     B.   It   Was   Error   To   Dismiss  Jarviss   Claims   for
          Misrepresentation and Promissory Estoppel.
          
          The   superior  court  dismissed  Jarviss  claims   for
misrepresentation and promissory estoppel even though Motors  did
not  move  for  summary judgment regarding these  claims.28   The
superior  court  did not explain this decision.  Jarvis  contends
that  this was erroneous, arguing that it was improper  to  grant
summary  judgment because Motors did not present evidence showing
that there were no issues of material fact and because he had  no
opportunity  to  present contradictory evidence.  Motors  asserts
that  summary judgment would have been appropriate in  regard  to
the     misrepresentation    claim    because     the     alleged
misrepresentations  were, in fact, true.  Motors  also  maintains
that  Jarviss  misrepresentation and promissory  estoppel  claims
merely restated his contract claims and were, therefore, properly
dismissed.
          We agree with Jarvis that it was error to grant summary
judgment  in  regard  to  his  misrepresentation  and  promissory
estoppel  claims.   On summary judgment, it is the  moving  party
that  bears  the  initial burden of proving,  through  admissible
evidence,  the  absence  of  genuine  factual  disputes  and  its
entitlement  to judgment.29  The non-movant is not  obligated  to
make  any  factual showing until the moving party makes  a  prima
facie  showing  of  its  entitlement to judgment  on  established
facts.30   Motors  never  moved for  summary  judgment  regarding
Jarviss  claims for misrepresentation or promissory  estoppel  or
presented  evidence showing the absence of any genuine issues  of
material  fact.   The  burden of showing any  genuine  issues  of
material fact, therefore, never shifted to Jarvis and his  claims
should not have been dismissed for failure to carry this burden.31
          We  consider  in  turn whether the erroneous  grant  of
summary   judgment   regarding  Jarviss   misrepresentation   and
promissory estoppel claims was harmless.
          1.   Summary  judgment  regarding the misrepresentation
               claim was not harmless.
               
          Motors contends that any procedural error in dismissing
Jarviss  misrepresentation claim was harmless because Motors  was
entitled  to  summary judgment.  Motors claims that the  relevant
representations  that form the basis of Jarviss tort  claim  were
shown to be true and that Jarviss tort claims merely restate  his
breach of contract claim.  We disagree.

               a.   Ensmingers  alleged  misrepresentations  were
                    not shown to be true.
                    
          Jarviss     complaint    maintains    that    Ensminger
misrepresented  basic terms of the contract to induce  Jarvis  to
sign the agreement.  Jarvis has claimed that Ensminger made three
          misrepresentations: (1) that Ensminger had a right to acquire the
remaining  7,500 shares in the Johnson Trust, (2) that  Ensminger
was  involved  in  the process of acquiring them,  and  (3)  that
Ensmingers shares were subject to Jarviss option.  Based  on  the
record,   we  cannot  conclude  that  Ensmingers  alleged   false
statements were proven true.
          Jarvis swore:
          I   also   believed,  based  upon  Ensmingers
          representations, that by virtue  of  his  own
          employment agreement he was entitled  to,  or
          in   the  process  of,  receiving  additional
          shares which would make him a 100% owner.
We are unable to conclude that these alleged representations were
shown  to  be  true, because we cannot review their  truth.   The
record  does not contain Ensmingers employment contract.  We  are
confident  that  such  a  document  exists  because  of  multiple
references  to it in the shareholder agreement and  the  November
27,  1998  amendment to the shareholder agreement.   Its  absence
from  the  record, however, precludes us from agreeing  that  any
representation  regarding its contents was, as Ensminger  argues,
proven undisputably true.
          Jarvis also swore that:
          At  the  time  I entered into the  employment
          agreement  with   Motors, I  believed,  based
          upon representations to me by Gary Ensminger,
          that  he was a 50% owner of Motors,  Inc.   I
          understood  that he received the shares  that
          made him a 50% owner from Jim Johnson.  These
          shares  were subject to my option to purchase
          agreement.
          
(Emphasis  added.)   Motors is correct  that  Ensmingers  alleged
representation  that he was a fifty percent owner  is  true,  but
Jarvis  never  asserted the falsity of this statement.32   Jarvis
does  assert, however, that Ensminger represented that his shares
were  subject  to Jarviss option.  The grant of summary  judgment
was  inconsistent with that claim.  Moreover, it cannot  be  said
that Ensmingers alleged misrepresentations were shown to be true.
               b.   Jarvis  asserted a breach of  an  independent
                    duty.
          Motors  also  maintains that Jarviss  misrepresentation
claim  was  properly dismissed because it merely  repeat[ed]  his
claim  that  the  contract means something  other  than  what  is
written.  We disagree.
          We  have  recognized that [p]romises  set  forth  in  a
contract  must  be enforced by an action on that contract.   Only
where  the  duty  breached  is one imposed  by  law,  such  as  a
traditional tort law duty furthering social policy, may an action
between  contracting parties sound in tort.33  As  the  New  York
Court of Appeals recognized in NYU v. Continental Insurance  Co.,
Inc.:34
          A tort obligation is a duty imposed by law to
          avoid  causing injury to others.  It is apart
          from  and  independent of promises  made  and
          therefore apart from the manifested intention
          of  the parties.  Thus, [a] defendant may  be
          liable in tort when it has breached a duty of
          reasonable care distinct from its contractual
          obligations,  or  when  it  has  engaged   in
          tortious conduct separate and apart from  its
          failure    to    fulfill   its    contractual
          obligations.[35]
          
Thus  a  violation of a duty arising from contract  such  as  the
duty  to pay wages under an employment contract or tender payment
for  goods  does not give rise to a tort claim.  However, when  a
partys  actions violate a general duty of care, its  actions  may
give  rise  to  an  action in tort, even if  the  violation  also
breaches a contract.36
          Alaska law imposes an independent duty to refrain  from
the   tort   of  intentional  misrepresentation.   The  essential
elements  of that tort are: (1) a false representation  of  fact,
(2) knowledge of the falsity of the representation, (3) intention
to  induce reliance, (4) justifiable reliance, and (5) damages.37
Jarvis  has  asserted that Ensminger violated his duty  to  avoid
such  conduct.38   We therefore conclude that Jarviss  claim  for
misrepresentation alleges a breach of a duty independent  of  the
contract.
          2.   Dismissal of Jarviss promissory estoppel claim  is
               not conclusively harmless.
               
          The  superior  court also dismissed Jarviss  promissory
estoppel  claim  without  a  motion  for  dismissal  or   summary
judgment.   Motors again contends that any procedural  error  was
harmless,  here  because the alleged . .  .  promissory  estoppel
representations are subsumed by the written contract.
          Promissory  estoppel  is  an  equitable  doctrine  that
allows  the  enforcement  of  a  promise  made  unenforceable  by
technical  defects  or defenses.39  The Restatement  (Second)  of
Contracts sets out the doctrine:
          A   promise   which   the   promisor   should
          reasonably   expect  to  induce   action   or
          forbearance on the part of the promisee or  a
          third  person  and  which  does  induce  such
          action or forbearance is binding if injustice
          can  be  avoided only by enforcement  of  the
          promise.[40]
          
A  claim  for promissory estoppel requires that an actual promise
was made and itself induced the action or forbearance in reliance
thereon.41  But such a claim is a theory, independent of contract,
for  awarding reliance damages.42  And when a defect in  contract
formation  or  validation  for example, failure  of  a  condition
prevents  action  on the contract, courts recognizing  promissory
estoppel  perceive the correlative rights and duties as  distinct
from contract.43
          We  have  concluded  that the superior  court  properly
granted  summary judgment to Motors because of the failure  of  a
condition  of  the contract.44  But this determination  does  not
          require the conclusion that Jarvis could not establish the
existence  of  promissory  estoppel.   That  a  requirement   for
enforcement  of  a contract is lacking, denying a  legal  remedy,
does not mandate denial of the equitable remedy here.  Especially
in  light of the complete failure on the part of Motors  to  even
request   summary  judgment  (or  dismissal)  of  the  promissory
estoppel  claim, we cannot say that the grant of summary judgment
as to this claim was conclusively harmless.
V.   CONCLUSION
          Because  a  future sale of the Johnson Trust shares  to
Motors  was  a  condition  precedent to  Jarviss  stock  purchase
option,  and  this  sale  never occurred,  Jarviss  option  never
ripened.   We  therefore  AFFIRM the  superior  courts  grant  of
summary  judgment in regard to Jarviss contract claims.   Because
there was no motion for summary judgment regarding Jarviss claims
for  misrepresentation and promissory estoppel, we conclude  that
it  was  error  to grant summary judgment on these issues.   This
error  was  not  harmless in regard to Jarviss  misrepresentation
claims  and  we  cannot  say  that it  was  harmless  as  to  his
promissory  estoppel claim.  We therefore REVERSE  the  grant  of
summary  judgment  on  Jarviss misrepresentation  and  promissory
estoppel claims and REMAND those claims to the superior court for
further proceedings consistent with this opinion.
_______________________________
     1    The agreement also stated that on September 1, 2000 the
respective positions would be switched.

     2     The  trust accomplished this in two ways.   First,  it
stipulated  that until September 1, 2000 the Johnson  Trust  must
approve of any corporate act.  Second, it also stipulated that if
the board of directors disagreed (the board was composed only  of
Johnson  and  Ensminger), the presidents decision would  control.
Until September 1, 2000 Johnson was to serve as president.

     3     There  is some dispute over whether Johnson personally
consented to Jarviss contract, but Ensmingers authority  to  bind
Motors is not at issue in this appeal.

     4      Jarvis  replaced  Ensminger  as  general  manager  of
Fairbanks  Nissan.  Ensminger contended in an affidavit  attached
to defendants January 7, 2004 renewed motion for summary judgment
that  Jarvis subsequently renegotiated his employment terms  with
Johnson after taking Ensmingers job.  This affidavit is the  only
evidence  in the record that Jarvis renegotiated the February  1,
1998 contract.  However, on appeal, neither party has placed  any
significance on the alleged renegotiation.

     5     Defendants do not argue that Jarvis failed to meet the
performance benchmarks that entitled him to the option.

     6     In  his opposition to the motion for summary judgment,
Jarvis  stated that the shareholder agreement was dated July  10,
1998   though  he  admitted in a footnote  that  there  was  some
confusion as to whether the correct year was 1997 or 1998.

     7     The  courts Order on Motion for Reconsideration, dated
December  31, 2003, rejected summary judgment because  assertions
of  uncontested  facts  in the pleading  were  disputed  at  oral
argument.   This  includes the date the initial shares  of  stock
were transferred to Ensminger.

     8    Matanuska Electric Assn, Inc. v. Chugach Electric Assn,
Inc., 99 P.3d 553, 558 (Alaska 2004).

     9    Harris v. Ahtna, 107 P.3d 271, 274 (Alaska 2005).

     10    Id.

     11     The  superior  court addressed the existence  of  the
condition  only  in  its October 29, 2003  order.   However,  the
courts  conclusion  that  the  parties  intended  to  include   a
condition precedent to the option in the contract is essential to
the  courts  determination that the parties did  not  intend  for
Ensmingers shares to be subject to the option.

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

     13    Logghe v. Jasmer, 686 P.2d 694, 698 (Alaska 1984); see
also  Peterson  v.  Wirum, 625 P.2d 866, 873 n.14  (Alaska  1981)
(holding that contract language purporting to condition repayment
of  partner loans on receipt of financing from specific bank  was
not  sufficiently unambiguous to constitute condition precedent);
Catherine  M.A. McCauliff, Corbin on Contracts  30.14, pp.  29-30
(Rev.  Ed. 1999) (If the non-occurrence of a condition  causes  a
forfeiture,  the  law will try to reduce the risk  of  forfeiture
within  the limits allowed by the competing policy of freedom  of
contract.);  Restatement (Second) of Contracts   227  (1981)  (In
resolving doubts as to whether an event is made a condition of an
obligors  duty,  and  as  to the nature  of  such  an  event,  an
interpretation is preferred that will reduce the obligees risk of
forfeiture,  unless the event is within the obligees  control  or
the circumstances indicate that he has assumed the risk.).

     14     Prichard  v.  Clay, 780 P.2d 359, 362  (Alaska  1989)
(quoting Wirum, 625 P.2d at 873); see also Norton v. Herron,  677
P.2d 877, 882 (Alaska 1984) (clause in agreement to purchase real
property  in  Fairbanks calling for purchaser to use  funds  from
sale of own property in Montana for monthly payments on Fairbanks
property  not  condition  precedent  permitting  vendor  to  void
purchase agreement simply because purchaser used other source for
payments  where vendor completely failed to inquire as to  equity
in purchasers Montana property).

     15    Norton, 677 P.2d at 882 (quoting Wirum, 625 P.2d at 873
n.14).   The  Restatement  of  Contracts  articulates  a  similar
justification   for   this  rule,  observing   that   since   the
non-occurrence of a condition of an obligors duty may  cause  the
obligee  to  lose his right to the agreed exchange after  he  has
relied substantially on the expectation of that exchange  .  .  .
[,]  [w]hen  .  . . it is doubtful whether or not  the  agreement
makes an event a condition of an obligors duty, an interpretation
is preferred that will reduce the risk of forfeiture. Restatement
(Second) of Contracts,  227 cmt. b.

     16     See  Restatement (Second) of Contracts  224 & cmt.  b
(1981) (there is inherent in the concept of condition some degree
of  uncertainty as to the occurrence of the event. .  .  .  [T]he
mere passage of time, as to which there is no uncertainty, is not
a  condition  and  a  duty is unconditional if  nothing  but  the
passage  of  time  is  necessary  to  give  rise  to  a  duty  of
performance.).

     17     Jarviss employment contract states that [a]ll parties
have read and understand the shareholder agreement dated July 15,
1997.   Thus  the  provisions  of the shareholder  agreement  are
relevant to understanding the parties expectations. Additionally,
Jarvis  presented  evidence to the superior court  regarding  his
reasonable expectations; he swore in an affidavit that  Ensminger
led him to believe that by virtue of his own employment agreement
he  was  entitled to, or in the process of, receiving  additional
shares  which  could make him a 100% owner.  No  such  employment
agreement  appears in the record.  Jarvis does not contend  here,
nor  did he below, that the superior court did not allow  him  to
discover such a document.

     18       Indeed,  given  the absence  of  any  reference  to
Johnsons  age  in the record, it may well be that  Johnson  would
have  reached  his  seventieth birthday  while  still  exercising
corporate control under the shareholder agreement; thus,  Johnson
would have the authority to decide whether either option would be
exercised.

     19    Prichard v. Clay, 780 P.2d 359, 362 (Alaska 1989).

     20    The court noted in its October 29, 2003 ruling that it
could  rule on the condition precedent as a matter of  law.   The
court then observed that a possible factual dispute existed as to
whether the parties intended that Ensmingers shares be subject to
the  option.  The courts December 31, 2003 ruling similarly  held
that summary judgment would be premature without evidence of when
Ensminger  acquired his shares.  After Motors presented  evidence
that  Ensminger had obtained his shares on August 26,  1997,  the
court  granted summary judgment.  Presumably, the court concluded
that  the  parties  intended for only shares purchased  from  the
Johnson  Trust  by  Gary  Ensminger/Fairbanks  Nissan  after  the
execution of the employment agreement to be available to  Jarvis,
and  that  Ensmingers shares had been purchased from the  Johnson
Trust  at some point.  Under this theory, the only question  left
was  whether Ensminger bought his shares during the relevant time
frame.   Once the court was convinced that Ensminger had acquired
his  shares  prior to February 1, 1998, the court concluded  that
the  condition  had  not  been satisfied  and  Jarvis  could  not
prevail.

     21    See Complaint  2.

     22    Matanuska Electric Assn, Inc. v. Chugach Electric Assn,
Inc., 99 P.3d 553, 562 (Alaska 2004) (citations omitted).

     23     Although this issue was not discussed by the superior
court  or  raised by the parties, we may affirm  a  lower  courts
decision  on  any grounds supported by the record.   Marshall  v.
First Natl Bank of Alaska, 97 P.3d 830, 835 (Alaska 2004).

     24    Shade v. CO & Anglo Alaska Service Corp., 901 P.2d 434,
437 (Alaska 1995).

     25    Id.

     26     Sprucewood Invest. Corp. v. Alaska Housing Corp.,  33
P.3d 1156, 1162 (Alaska 2001).

     27     Id.  (quoting Peterson v. Wirum, 625  P.2d  866,  870
(Alaska 1981)).

     28    Defendants did not address these claims in any of their
summary  judgment motions.  See Memorandum in Support  of  Motion
for  Summary Judgment; Reply to Opposition to Motion for  Summary
Judgment;  Memorandum  in  Support of Reconsideration;  Reply  to
Supplemental Opposition to Motion for Summary Judgment;   Renewed
Motion  for  Summary  Judgment; Reply to  Opposition  to  Renewed
Motion  for  Summary Judgment.  The superior  court  stated  that
these issues were not briefed.

     29    Shade, 901 P.2d at 437 (citations omitted).

     30    Id. (citations omitted).

     31    We do not consider whether a genuine issue of material
fact exists regarding Ensmingers alleged misrepresentations.

     32    See Complaint  2.

     33    Alaska Pacific Assur. Co. v. Collins, 794 P.2d 936, 946
(Alaska 1990) (citing Tameny v. Atlantic Richfield Co., 610  P.2d
1330, 1334 (Cal. 1980)); see also ARCO Alaska, Inc. v. Akers, 753
P.2d  1150,  1154 (Alaska 1988) (Alaska law does not  allow  tort
recovery  for  breach of covenant of good faith and fair  dealing
implied in all employment contracts unless breach rises to  level
of traditionally recognized tort, such as infliction of emotional
distress).

     34    87 N.Y.2d 308 (1995).

     35    Id. at 316 (citation omitted).

     36    See Restatement (Second) of Torts  549(2) (1977).

     37     City of Fairbanks v. Amoco Chem. Co., 952 P.2d  1173,
1176 n.4 (Alaska 1998) (citations omitted).

     38     He claims that Ensminger knowingly misrepresented his
rights  and  his plans to purchase the Johnson Trust  shares  and
thereby  induced  Jarvis to rewrite his employment  contract  and
accept  deferred compensation in the form of the purchase option.
We  do  not  reach  any  conclusion  on  the  merits  of  Jarviss
misrepresentation claim.  We only hold that it alleges  a  breach
of a tort duty.

     39    Brady v. State, 965 P.2d 1, 10 (Alaska 1998); see also
Eric  Mills  Holmes,  Restatement  of  Promissory  Estoppel,   32
Willamette L. Rev. 263, 271-86 (1996).

     40    Restatement (Second) of Contracts  90(1) (1981).

     41     Valdez Fisheries Dev. Assn v. Alyeska Pipeline  Serv.
Co., 45 P.3d 657, 668 (Alaska 2002).  We have adopted a four-part
test  for claims of promissory estoppel.  See id. ((1) The action
induced amounts to a substantial change of position; (2)  it  was
either  actually  foreseen  or  reasonably  foreseeable  by   the
promisor;  (3) an actual promise was made and itself induced  the
action or forbearance in reliance thereon; and (4) enforcement is
necessary in the interest of justice.) (citing Zeman v. Lufthansa
German Airlines, 699 P.2d 1274, 1284 (Alaska 1985)).

     42    Holmes, supra n.39 at 289.

     43    Id.

     44    See supra Part IV.A.

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