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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Yates v. Halford (7/18/2003) sp-5712

Yates v. Halford (7/18/2003) sp-5712

     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,


ROBERT L. YATES,              )
                              )    Supreme Court No. S-10438
               Appellant,          )
                              )    Superior Court No.
     v.                       )    3AN-98-11656 CI
RICHARD W. HALFORD and        )    O P I N I O N
VECO CORPORATION,             )
               Appellees.           )     [No. 5712  -  July  18,

          Appeal  from the Superior Court of the  State
          of    Alaska,   Third   Judicial    District,
          Anchorage, John Reese, Judge.

          Appearances:  William F. Brattain  II,  Baker
          Brattain   LLC,  Anchorage,  for   Appellant.
          Thomas  E.  Williams, Keith  A.  Christenson,
          Eagle  River, for Appellee Halford.  Todd  J.
          Timmermans,  Price  & Price,  Anchorage,  for
          Appellee VECO Corporation.

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

          MATTHEWS, Justice.

          The  question in this case is whether summary  judgment

was  properly  granted  in  favor of a  party  who  had  strictly

foreclosed  a  land  sale  contract.  We  conclude  that  summary

judgment was improper because the grounds relied on by the movant

were  both  factually disputed and legally insufficient  and  the

movant  failed to show that he was entitled to strict foreclosure

as a matter of law.


     A.   Background

          In 1994 Richard Halford sold Robert Yates real property

consisting  of a lodge and some seventy-four acres  located  near

the Denali Highway.  The sale was accomplished under an Agreement

for  Purchase and Sale of Real Estate and Personal Property.  The

purchase price was $320,000, payable by means of a $6,000 deposit

upon execution of the agreement, $34,000 cash at closing, and the

remainder  of  $280,000 to be paid per the terms of a  promissory

note:   $30,000 in principal for each of the following two  years

plus  interest,  with  the  balance  due  in  August  1997.   The

promissory  note was secured by a deed of trust on the  property.

Yates hoped to renovate the lodge in order to start an ecotourism

venture.  The agreement contained default remedies, including  an

option for termination of the agreement upon written notice.1

          After  apparently fulfilling his obligations  at  least

through  1995,2 Yates defaulted on his obligations.  Rather  than

foreclose,  Halford proposed that the parties enter  into  a  new

agreement.  Yates agreed and the parties on July 30, 1997, signed

a  new  agreement  characterized as a conveyance back and  resale

that  both  incorporated and made changes to the 1994 Agreement.3

Notably,  the  purchase was narrowed to only the  fifteen  acres,

immediately  surrounding the Lodge, and the  purchase  price  was

reduced  to  $118,035.80.   The price  was  payable  as  follows:

$5,000  upon  execution of the agreement; $33,035.80 at  closing;

followed  by sixteen quarterly installments of $5,000  each  plus

interest.   The  new agreement also included a  two-year  option,

personal to Robert Yates,4 to purchase the remaining acreage  for


          The  parties closed the new agreement on September  16,

1997.   Yates  paid  the required down payment  and  the  parties

signed  a  separate document entitled Closing of  Sale  Contract,

containing the following language:

               The  Purchaser  has repaired  the  lodge
          roof  and  has  agreed to  re-roof  prior  to
          September 1, 1998.
               The  Purchaser represents that  all  the
               taxes are current at this time.
               Thirty  days  after  written  notice  of
          default, the Seller may declare a default and
          repossess the property.
               Both  the Seller and the Purchaser agree
          that  all other terms and conditions  in  the
          Agreement  for Purchase and Sale are  binding
          and in full effect.
 (Emphasis added.)

          According   to  Yatess  subsequently  filed  complaint,

almost  three  months  after the closing  of  the  sale  contract

Halfords attorney, Thomas E. Williams, advised Jerald Briske, who

was  acting  as an agent and assistant to [Yates],  that  [Yates]

would  have  to  pay an additional sum of $500 for attorneys  and

platting waiver fees.  Yates claims that Briske delivered a check

to  Williams  in that amount, drawn on the account of  Coast-Line

Enterprises,  Inc.  and signed by Briske.  Briske  supports  this

account in an affidavit.

          On  January  28, 1998, four months after  the  closing,

Williams  sent  Yates a letter that declared  the  transaction  a

failure  and  purported  to terminate  the  agreement.   Williams

alleged that Yates was unable or unwilling to complete the  terms

of  closing and listed multiple delinquencies, including  failure

to  pay  past due taxes as well as the quarterly payment  due  in

December 1997.

          On February 18, 1998, Yatess attorney, Joan Travostino,

responded by letter claiming that termination of the contract was

premature  because  Halford had never given thirty  days  written

notice  of  default,  not  even in the January  28th  letter.   A

written  notice of default states what performance is in  default

and  what is owing.  The January 28 letter does not do this.  She

concluded therefore that Yates still had time to cure.

          Enclosed  with  Travostinos letter were  three  checks,

each  in  the  amount of $4,010.  A breakdown detailed  that  the

$12,030  covered all the back taxes, some survey work, a platting

waiver  fee,  and the missed payment, including interest  through

December  15.   Each  check  came  from  a  different  bank   and

referenced a different maker, Yates, Briske, and John Lutz.

          On  March  5  Williams refused the uncashed checks  and

explained  why  Yates was deficient in his efforts  to  cure  the

defaults.5   Williams  stated  that  the  new  agreement  clearly

established  that this sale was to be directly to Mr.  Yates  and

should there be a subsequent sale, the loan would be accelerated.

He  also  noted that the option to purchase the remaining acreage

was  personal  to  Mr.  Yates.  Williams also  accused  Yates  of

misrepresentation  concerning payment of  taxes  and  failing  to

fulfill a condition of the contract:

          The  new  sale  was  merely  a  contract   to
          purchase.   On September 16, 1997, Mr.  Yates
          represented  to  Mr. Halford  that  the  1996
          taxes had been paid.  In fact, they were  not
          paid  until Mr. Halford himself paid them  in
          1998;  therefore, the conditions of the  sale
          contract were never completed.
Williams also implied that Yates had received adequate notice  of

default  because  Mr. Yates and Mr. Halford  had  many  telephone

exchanges  between September and the termination of the  contract

whereby  Mr. Halford told Mr. Yates that he needed to finish  the

details of the closing.

          On  April 2, 1998, Yates renewed his effort to cure the

default  by re-tendering $12,030.  This tender was rejected.   On

October  20,  1998,  Yatess new attorney,  Marshall  K.  Coryell,

advised  Halford  that a sum covering the December  1997  payment

plus the March, June, and September 1998 payments plus other sums

in  dispute had been deposited with a title company and would  be

available to Halford upon reinstatement of the transaction.  This

offer was ignored.  Meanwhile, on or about June 30, 1998, Halford

sold all the property to VECO Corporation.  When Yates learned of

the sale he vacated the property.

     B.   Proceedings

          Yates  sued  Halford  and VECO on  December  22,  1998,

seeking  to  set aside the strict foreclosure and  reinstate  the

          sale contract.

          After  settlement  negotiations Halford  offered  Yates

three different settlement options, ostensibly under Alaska Civil

Rule  68,  requiring Yates to either pay off the  debt  or  bring

payments  current on specified dates; interest  was  included  in

each option.  But Yates objected to the interest calculations and

no  agreement  was reached.6         Depositions of  Halford  and

Yates  were  taken.   At  his  deposition  Yates  disclosed   the

existence  of  a  Memorandum  of Understanding  between  himself,

Briske,  and Lutz.  In response to this disclosure Halford  moved

for  sanctions  against Yates. Halford argued that  Yates  should

have  disclosed  these relationship earlier, and that  Yates  had

mischaracterized Briskes role in the complaint  by  referring  to

him  as an agent and assistant.  Halford also contended that  the

existence  of the memorandum of understanding proved  that  Yates

had  already sold the property, thus triggering the due  on  sale

clause  and  nullifying  the option to purchase  the  200  acres.

Halford added that, because Briske and Lutz were real parties  in

interest to the property, they were indispensable parties to  the

action for specific performance.7

          Halford attached to the motion a copy of the memorandum

of  understanding.   Of particular concern  to  Halford  was  the

following portion of the memorandum:

               1.   It is the intent of the Partners to
          obtain  share equal ownership of the property
          and  to create an appropriate business entity
          organized  under Alaska law for the  purposes
          of such equal ownership;
               . . . .

               3.   It is the intent of the Partners to
          accept  an  assignment  of  all  rights   and
          delegation of all duties heretofore  held  by
          Robert Yates under the terms of the July  30,
          1997 Agreement[.]
          Yates did not contest the existence of an understanding

between  himself,  Briske,  and Lutz.   Rather,  he  argued  that

Halford had always been fully aware of the relationship and  that

          any nondisclosure was an irrelevant oversight.  Yates attached an

affidavit  from  Briske  detailing  his  numerous  contacts  with

Halford regarding the property.  Briske added:

               Another associate, JOHN LUTZ, and I have
          had  an  agreement in place since  September,
          1997  with Mr. Yates whereby we would  become
          partners in the Susitna Lodge operation after
          Mr.   Yates   purchased  the   property   and
          exercised   his  option  on  the   additional
          acreage  around the Lodge under the terms  of
          the  1997  Agreement Mr. Yates had  with  Mr.
          Halford to buy the property.  At no time have
          we  ever  claimed a current interest  in  the
          property . . . .
(Emphasis  in  original.)  Finally, Yates attached a  segment  of

Halfords   deposition   where  Halford  acknowledged   having   a

conversation with Lutz about the property and hearing, by  rumor,

that Briske had made a $500 payment on behalf of Yates.

          Superior Court Judge John Reese denied Halfords  motion

for sanctions.  The order stated:

               Defendant Halford requests sanctions for
          plaintiffs    failure   to    disclose    his
          relationship  to  Lutz  and  Brisk[e].    The
          record  does  not  disclose  a  close  enough
          relationship to the property by these two men
          to  make  their non-disclosure a  requirement
          under Civil Rule 26.  The motion is DENIED.
          Halford   subsequently  moved  for  summary  judgment,8

premising  the motion partly on the courts ruling that  Lutz  and

Briske were not closely associated with the property:

          [The motion for sanctions] was denied by  the
          Court.   In  making that decision, the  Court
          effectively made the determination  that  Mr.
          Yates    ostensible    partners    are    not
          indispensable parties to the Plaintiffs case.
          That determination thereby became the law  of
          the case.
Halford  contended that Yates has admitted at deposition that  he

didnt  and  doesnt  have the financial ability  to  complete  the

transaction  he is trying to enforce.  According to Halford,  two

quotes  in Yatess deposition indicated that Yates was  not  in  a

financial position to accomplish the necessary renovation without

borrowing  from  some  source. Halford then  cited  a  recognized

requirement of Alaska case law:

          It  is  axiomatic  that  to  obtain  specific
          performance, a buyer must prove not only that
          he  was ready, willing and able to perform at
          the  time  the contract was entered into  but
          that he continued ready, willing and able  to
          perform at the time suit was filed and during
          the  prosecution of the specific  performance
Halford  concluded  that, because Yates was asking  for  specific

performance of the contract but was not actually in a position to

perform, the case must be dismissed.

          At  the  time Yates was without counsel.   He  filed  a

motion  for extension of time.  In case the extension was denied,

he also included in the same motion his opposition argument.  The

opposition  portion of his motion focused on his current  ability

to  pay:  Currently,  I certify to the Court  that  my  financial

circumstances  have  improved and that  with  the  assistance  of

potential  investors, I would be able to bring the Note  payments


          On August 29, 2001, the superior court granted Halfords

motion  for  summary  judgment, and  subsequently  entered  final

judgment in favor of both Halford and VECO.

          Yates appeals.


          We  review grants of summary judgment de novo.10  It is

the  duty  of  the court to determine whether there are  disputed

factual  issues that would preclude the entry of  judgment  as  a

matter  of  law.11   The  facts offered  in  support  of  and  in

opposition to a motion for summary judgment will be construed  in

a  light most favorable to the non-moving party.12  The burden is

on  a  party seeking summary judgment to show that there  are  no

genuine  issues  of  material fact and that  he  is  entitled  to

judgment as a matter of law.13

          In  granting summary judgment, the superior court  gave

no  reasons  in  support of its order.  In such circumstances  we

          review all grounds on which the movant relied to determine

whether  any  grounds  were sufficient.14  In  the  present  case

Halford  and  VECO  offered only one reason in support  of  their

joint  motion,  namely  that Yates was not entitled  to  specific

performance  because he lacked the financial ability  to  perform

his obligations under the contract.

          In  making  this argument Halford relied on the  courts

ruling  denying sanctions against Yates to the effect  that  Lutz

and  Briske did not have a sufficiently close relationship to the

property  to  make their nondisclosure sanctionable  under  Civil

Rule 26.  According to Halford, this ruling became the law of the

case.   He  argued that Yates stands alone with  respect  to  his

purchase  of  this property . . . and it is Mr. Yates  alone  who

must  establish his financial ability to fulfill the  obligations

of the contract he is seeking to enforce.

           But  there  was  nothing in the courts  order  denying

sanctions  that  implied  that Yates  would  be  prohibited  from

borrowing  funds from Briske and Lutz, or from anyone else.   The

courts  ruling was nothing more than a determination  that  Yates

should not be sanctioned for discovery violations.

          Halford  and VECO also point to two passages in  Yatess

deposition that they contend prove that Yates lacks the financial

ability  to comply with his contractual obligations.   The  first

statement  is:  But, see, because I knew from the get-go  that  I

didnt have the . . .  the clout to  to go out and borrow $500,000

to  do  the  remodel  and  so on . . . .   This  is  a  reference

concerning renovations necessary to convert the lodge to make  it

suitable for Yatess ecotourism plans.  The only alteration of the

lodge  that  Yates was contractually required to perform  was  to

replace  the  roof, surely not the whole subject of the  $500,000

remodel that Yates is referring to in the above excerpt.

          The second quote is fragmented.

          Q:    But  financially,  you  alone,  Im  not
          talking about borrowing from anyone else,  no
          matter  whom,  but you alone were  not  in  a
          position to accomplish the renovations?
          A:   Thats correct.  Thats correct.
          . . . .
          A:   Okay.  Let me back up one step.  The one
          step  is,  I alone could not have  done  this
          well,  it would have made a heck of a lot  of
          difference if Id received the $250,000 that I
          was  going  to get on the sale [of  unrelated
          property  Yates owned in Montana],  and  that
          was  due in 1996.  It obviously didnt happen.
          So  without that, surely, no, I was not  able
This fragment again is concerned with renovations rather than the

purchase price. Further, the fragment is artificially limited  to

Yatess  personal financial resources rather that  what  he  might

obtain from his prospective partners or other sources.

          VECO  claims that Yates admitted by implication in  his

pro se opposition in response to Halfords summary judgment motion

that  he  has  not  at  all times since the making  of  the  1997

Agreement  been  financially  able  to  fulfill  his  contractual

obligations.   In his opposition Yates stated: I certify  to  the

court that my financial circumstances have improved and that with

the  assistance of potential investors, I would be able to  bring

the Note payments current.  VECO apparently assumes that by using

the  word  improved  Yates  is here  conceding  that  during  the

litigation he lacked the financial ability to bring the  payments


          VECOs  argument  is both factually and legally  flawed.

Factually,  because Yatess statement contains  no  specific  time

reference  and  may  merely  be  referring  to  circumstances  in

December  of  1997  when  he missed the quarterly  statement  and

before  he  tendered  the  checks that  would  have  brought  him

current.   Legally, because the premise that Yates  must  at  all

times  during the litigation have had the ability to  perform  is

wrong.   Dismissing  Yatess suit would give effect  to  a  strict

foreclosure.   Our  case law cautions against strict  foreclosure

remedies.15   We have never held that financial inability  at  an

interim  point  in  litigation  disqualifies  a  purchaser   from

          equitable relief that he can afford when the relief is granted.

Further,   Yates  was  acting  pro  se  and  was  responding   to

allegations  made by Halford based on quotes dealing with  Yatess

ability   to   make  renovations  most  of  which  he   was   not

contractually  obliged to make.  Drawing, as we must,  reasonable

inferences in favor of the non-movant we conclude that Yates  was

not  admitting  an  inability to perform the contract  after  the

December 1997 default.16

          We  conclude  that  summary judgment was  inappropriate

based  on the grounds offered by Halford and VECO.  But  we  also

observe that Halfords showing in support of summary judgment  was

deficient in other respects as well.  He did not show that he had

complied with the clause requiring thirty-days notice of default,

or  that  Yates  had not timely tendered a cure of  any  default.

Further, he did not show that this case was inappropriate for the

sort  of  equitable  relief  from  strict  foreclosure  that  has

frequently been approved by this court.17


          The  judgment is REVERSED and this case is REMANDED for

further proceedings consistent with this opinion.

     1     A  section entitled DEFAULT; REMEDIES provided in part
that,  in  the  event of a material breach or default  by  either
seller  or  purchaser, the injured party had  the  right  to  (a)
demand  and have specific performance of this Agreement;  or  (b)
terminate  this  Agreement upon written notice without  liability
[to the other.]

          Also incorporated into the 1994 agreement was a deed of
trust  concerning  delivery  of title  upon  fulfillment  of  the
promissory  note.  Regarding default, the deed of trust  read  as

               Upon  default by Trustor in  payment  of
          any   indebtedness  secured  hereby   or   in
          performance  of any agreement hereunder,  all
          sums  secured hereby shall immediately become
          due   and  payable  at  the  option  of   the
          Beneficiary.    In  the  event   of   default
          Beneficiary may execute or cause the  Trustee
          to  execute a written notice of such  default
          and  of his election to cause to be sold  the
          herein  described  property  to  satisfy  the
          obligation hereof, and, if the written notice
          is  executed, shall cause such notice  to  be
          recorded  in  the office of the  recorder  of
          each  recording  precinct wherein  said  real
          property  of  [sic]  some  part  thereof   is
               . . . .

               In  the alternative, the Beneficiary may
          foreclose under AS 09.45.
     2     Yates  claimed in his deposition that $80,000  from  a
land sale in Montana was forwarded to Halford as payment for  the
land after closing.

     3     Regarding the incorporation of the 1994 Agreement, the
1997 Agreement included the following paragraph:

               The parties understand and agree that by
          incorporating  the June 22,  1994  agreement,
          many   provisions   may  no   longer   apply,
          partially  because of the Sellers three  year
          possession, and because of Sellers possession
          between  the  date of signing this  agreement
          and  the closing date of September 15,  1997.
          The   parties   specifically  agree   to   be
          reasonable in re-applying the June  22,  1994
          contract  to  this contract  dated  July  29,
     4     The  option stated that it cannot be sold or separated
from the purchase and sale of the Lodge.

     5     We  assume by the negative tone of Williamss  March  5
letter that he refused the checks.  He more explicitly made  this
refusal in a June 23 letter.

     6     Halford made another Rule 68 offer in July of 1999  to
settle in exchange for payment of arrearages simplified as to its
terms.   But  this offer again included full interest  and  Yates
again failed to accept.

     7     Halford  cited Sowash v. Garrett, 630 P.2d  8  (Alaska

     8     VECO  filed  a joinder in motion for summary  judgment
four days later.

     9     Quoting  Foster  v. Hanni, 841 P.2d 164,  172  (Alaska

     10    Beilgard v. State, 896 P.2d 230, 233 (Alaska 1995).

     11     Drake  v.  Hosley, 713 P.2d 1203,  1206-1207  (Alaska

     12    Beilgard, 896 P.2d at 233.

     13     Powell  v.  Tanner, 59 P.3d 246, 248  (Alaska  2002);
Braund, Inc. v. White, 486 P.2d 50, 53-54 (Alaska 1971).

     14     State v. Appleton & Cox of California, Inc., 703 P.2d
413,  414 (Alaska 1985); Austin v. Fulton Ins. Co., 444 P.2d 536,
540 (Alaska 1968).

     15     Kennedy Assocs., Inc. v. Fischer, 667 P.2d  174,  182
(Alaska  1983)  ([A] forfeiture of contractual rights  is  to  be
avoided, whenever possible.); Hendrickson v. Freericks, 620  P.2d
205,  212 (Alaska 1980) ([F]orfeitures are not favored and  never
enforced  in  equity unless the right thereto is so clear  as  to
permit no denial.) (quoting Shoemaker v. Shaug, 490 P.2d 439, 441
(Wash.  1971)); Moran v. Holman, 501 P.2d 769, 771 (Alaska  1972)
(It  is  also  well established in this jurisdiction that  equity
abhors  a forfeiture and will seize upon slight circumstances  to
relieve  a party therefrom . . . where adequate compensation  can
be  made equity discharges the forfeiture, upon such compensation
being  made.  (quotations and citations omitted));  McCormick  v.
Grove,  495 P.2d 1268, 1269 (Alaska 1972) (A trial court  may  in
its  discretion refuse to enforce the forfeiture provisions of  a
contract if the equities of a particular situation so dictate.).

     16    Beilgard, 896 P.2d at 233.

     17     See,  e.g.,  Moran, 501 P.2d at 771, and  authorities
there cited.