Nautilus Marine Enterprises, Inc. v. Exxon Mobil Corporation, 305 P.3d 309

Settlement Agreement (Sept. 2006) between Exxon and Nautilus/Cook Inlet about prejudgment interest for Exxon Valdez claims; issue whether interest must be compounded annually or could be simple/variable per law.
District Court had applied federal law and Treasury bill rate with annual compounding; Alaska rate (10.5% simple) contested.
Letter Agreement and Draft Settlement stated that prejudgment interest would be determined by the District Court with rights to appeal; capital terms were not fully settled.
Exhibit A (Proposed Final Judgment) repeatedly used language about compounding; parties did not discuss a universal compounding requirement.
Integration clause and recital that Exhibit A was a form for Judge Holland to implement the agreement; ambiguity potential acknowledged by trial court.
Superior Court interpreted the Settlement as not mandating compound interest and reserving the computation method to Judge Holland; this interpretation was upheld on appeal.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the Settlement Agreement required compound interest in all circumstances.	Nautilus argues for compound interest regardless of governing law.	Exxon argues the agreement reserved the method for Judge Holland and allowed simple or compound per law.	Not clearly erroneous; extrinsic evidence shows no agreement to constant compounding.
Whether the parol evidence rule barred extrinsic evidence in interpreting the integration of the Settlement.	Nautilus contends parol evidence should bar extrinsic evidence.	Exxon contends extrinsic evidence appropriate to determine integration/intent.	Proper to consider extrinsic evidence to interpret contract; no violation of parol evidence rule.
Whether Exxon is the prevailing party warranting fees.	Nautilus challenges prevailing party status due to interpretation error.	Exxon prevailed on the contract interpretation.	Exxon is the prevailing party; upheld.

Alyeska Pipeline Serv. Co. v. O’Kelley, 645 P.2d 767 (Alaska 1982) (guides extrinsic evidence in contract interpretation; integration analysis)
Alaska Diversified Contractors, Inc. v. Lower Kuskokwim Sch. Dist., 778 P.2d 581 (Alaska 1989) (parol evidence framework: integrated contract; how to apply parol rule)
Casey v. Semco Energy, Inc., 92 P.3d 379 (Alaska 2004) (extrinsic evidence admissible to interpret contract; reasonable expectations)
Beal v. McGuire, 216 P.3d 1154 (Alaska 2009) (consider extrinsic evidence in contract interpretation; avoid ambiguity hurdle)
Estate of Polushkin ex rel. Polushkin v. Maw, 170 P.3d 162 (Alaska 2007) (extrinsic evidence used to determine contract meaning)