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Riley v. NORTHERN COM'L CO., MACHINERY DIV.
648 P.2d 961
Alaska
1982
Check Treatment

*1 RILEY, T. John d/b/a Shamrock

Excavating, Appellant, COMPANY,

NORTHERN COMMERCIAL DIVISION, Appellee.

MACHINERY

No. 5754.

Supreme Court of Alaska. *2 AND

I. FACTUAL PROCEDURAL

BACKGROUND Prоmissory Note Claim A. 12, 1975, Riley executed December On $51,209.20 in favor of for promissory note existing liquidated Riley’s The note NC. supplies and for services account with NC invoices, Ninety-five previously rendered. provided signed by Riley, none of which are the note. full consideration for pay- one making defaulted after Riley Fos- James H. McCollum and W. Richard ensued. litigation on the note. This McCollum, Anchorage, for sey, Bankston & he executing that in the note Riley submits appellant. all amounts acknowledge to did not intend claimed owed NC. Eide, Rudd, Anchor- Phillip Ely, & Guess age, appellee. for NC, was unable deposed by When invoices specify ninety-five which of the RABINOWITZ, BURKE, J., Before C. were, view, to Civil in his invalid. Pursuant COMPTON, CONNOR, MATTHEWS re- propounded then certain NC JJ. regarding ninety- quests for admissions substance, sought In five invoices. which of the invoices were not dis- identify OPINION puted. COMPTON, Justice. requests were due Riley’s responses (NC) Company Northern Commercial In a letter to NC’s August. near the end of 3,1978 John filed suit on November counsel, the re- Riley’s counsel stated (Ri- Excavating T. d/b/a Shamrock during the La- sponses would be furnished ley) promissory to collect amounts due on a to ex- parties agreed Day bor week. note. owing denied full indebted- deadline, September tend this first ness, addition, and in filed a counterclaim to however, Riley, then September recover unrelated amounts owed on an respond. did not Following Riley’s transaction. failure partial summary for NC filed a motion file a timely response requests to certain asserting October admissions, granted NC’s respond to the upon Riley’s failure to motion for on the summary judgment deemed admits requests, such were promissory Subsequently, note claim. ted. court also NC’s on November summary judgment responses on the contractual served his principal 19, 1979, counterclaim. a dead- appeal, Riley’s On almost two months after argument presents is that each claim triable line his already extended application issues of fact. We also was without response, Riley address stated that he prejudg- of Civil Rule 36 and the verify award of sufficient information to ment interest. ninety-five invoices.1 Riley’s response provided pertinent part: ordinary kept course of voices are in the again, only pérson (a) business. Once Defendant is without sufficient infor- plaintiff. would know that is the mation or belief as to whether the listed in- (c)Defendant copies sufficient infor- voices is without are true and correct originals. only person he received mation and belief as to whether who would know plaintiff. parts that is in the invoic- or services referred to (b) Defendant is without sufficient infor- es. Dеfendant does not remember signed mation or belief since he has not as to whether the listed in- these invoices and Ratzlaff,

B. Counterclaim of the mistake. There is some whether Ratzlaff ambiguity referred Riley initially performed excavation and Reese, to Mark or whether Ratzlaff himself backfilling services for to an pursuant pursued the matter with Reese.2 Under oral agreement. provided That contract version, either Riley claims that Reese ulti- lump payment. sum Riley performed ad- mately agreed correct the matter. Reese ditional contemplated by work not the oral *3 is now deceased. Riley completed рerform- work, agreement. part For of Riley this ance of the contract in and ac- obtained payment extra at the rate of $2.40 per cepted ton final for gravel supplied. payment fill the excavation specified work at the rate in the contract. negotiated subsequently pursue His failure to this claim immediate- Riley perform contract for to more exten- asserts, ly, he is attributable to the parties’ sive backfilling excavation and work. Riley long relationship. business submits that the written contract followed understanding an to “work it on the same contract,

principles.” The prepared by II. NOTE CLAIM PROMISSORY agent NC’s consulting engi- served as A. Deemed Admissions neers on project, consulting firm of Reese, Mark G. stated payment that Riley argues that court erred be at a rate of cubic of filled yard $3.33 deeming requests in NC’s for admissions gravel. Riley signed April contract admitted.3 We thus address whether it was 17, 1975, purportedly under the mistaken abuse of discretion for the impression that Reese had calculated the respons to fail to allow to submit late Riley rate of payment (in in the second contract es to requests NC’s for admissions. See terms of yardage) equiva- filled to be the Co., 201, 204 Palzer v. Serv-U-Meat lent of in employed the first n.13 Thomp cf. Miracle v. (in tons). contract terms оf Riley cites in son, (Alaska 1978)(abuse regard this a letter from Reese which states of discretion in review of Rule standard that “we herewith authorize an extension 60(b) motion). previous you proceed contract for subject excavation and backfill.” as- problem At issue is the vexatious serts that NC was aware of his misunder- untimely requests how to treat answers to standing at the time the contract was for proper admissions. NC submits that it formed. ly appropriate procedure utilized the litigation, streamline the obtaining pending

After that progress his first pay- ment, Riley realized if Civil Rule 36 is to value in any that the rates of serve pay- ment were in fact not еquivalent. Riley expediting litigation, Riley should not be then notified NC’s store manager, Gary responses cursory allowed submit almost them, any reasonably contrast, Riley’s he believes he did with Ratzlaff. affidavit any receive of them. suggests merely Defendant has that Ratzlaff referred inquiry made Reese, reasonable into Riley subsequently ‍‌​​​‌‌​‌‌​‌‌‌​‌‌​​‌‌​‌‌‌‌​‌​​‌‌‌‌‌​​‌‌​‌‌​​‌‌​‌‌‍his records and and that met with these records do not reflect Fomby, defendant Reese himself. affidavit Dale parts ever received of these and/or serv- Riley’s employee, supports this version. ices. (d) owing Defendant denies sums file did not a motion to withdraw a by plaintiff. claimed admission, prescribed by deemed the method requests A number of the for admissions con- Equal Employment Opportunity Rule 36. subpart (e). Riley tained submits that he did Baby Comm’n v. Prods. 89 F.R.D. 129 requests not realize that some of the 95 con- (E.D.Mich.1981). Riley instead filed a motion result, request, tained an additional and as a after the trial court reconsideration provide any subpart failed to answer partial judgment. motion A NC’s (e). procedure pursued in Palzer v. similar Serv-U-Meat It is unclear whether sole contact was See also Bittner v. 627 P.2d 648 Riley’s deposition, though with Ratzlaff. some- unclear, suggests only what dealt the ten time day period prescribed by extended due already two months after an hand, court, Riley, conсluding date. on the other 36. The trial adjudication it is him an inequitable deny for admissions were deemed admit- delay responding where the the merits pursuant grant- ted to the terms of Rule negligence.4 to counsel’s attributable re- summary judgment. sought ed Palzer We stated that “cir- judgment. lief from that a provides Civil Rule 36 exist adher- may cumstances where strict party with written serve other requirements of the rules will ence ... of the truth requests “for the admission ” objectives.” rules’ not advance the pro The rule further any matters.... 206, quoting Hedberg, Sanuita v. responding party does vides that where the (Alaska 1965); see also response not submit a within the time con We concluded that оn Alaska R.Civ.P. 94. Rule, deemed straints of the the matter is “the trial particular presented, facts of an untimely admitted. The submission aspects the technical court’s adherence to response equivalent is thus the of an at *4 Civ.R. 36 has resulted in the denial of sub- tempt express to withdraw an admission. 419 P.2d at justice appellants.” stantial in its discretion a provides we held that the failure Accordingly, respondent court allow the to with grant judg- relief from trial court presentation draw an “when the admission ment was an abuse of discretion. of the will be subserved merits the action who obtained the thereby party and the distinguishable quite readily Palzer is admission fails tо the court that satisfy controversy. prime A from the will prejudice withdrawal or amendment in Palzer was that the re- consideration him in or maintaining his action defense extended the questing party apparently the merits.”5 responses period, proffered time so that the Co., 419 were at several late.7 In con- days In Palzer v. Serv-U-Meat most (Alaska 1966), trast, a similar almost two Riley’s response we addressed was late, despite claim for relief from the effect of a deemed months the fact that the dead- admission.6 That case a suit line been extended for one previously involved had goods sureties Another considera- month was that important received a third Palzer failed to tion to the Palzer court party. respond requests requesting party for admissions within the trial court and the had filing prejudice party allowing to withdraw late will notes that were he allowed admissions, requests. E.g., propounded the deemed NC could file a motion Warren 37(c) Teamsters, pursuant to Civil Rule to recover all rea- Bhd. of 544 F.2d 334 416 International (8th establishing expenses States, 1976); sonable incurred United Cir. French v. note, validity though, of the We (9th 1969); Joseph invoices. Moosman v. F.2d 1149 P. Cir. pursuant 37(c) imposed sanctions to Rule are Blitz, Inc., (2d Weva 358 F.2d 686 Cir. appropriate only party willfully where a Corp. Corp., v. Belсo Petroleum 68 F.R.D. Oil impede discovery process. tends to See (N.D.W.Va.1975). Edwards, Hawes Firearms 634 P.2d 377 Co. Sales, 15 6. See also Jackson v. Kotzebue Oil (respond- (1955) 17 F.R.D. Alaska ing party granted parallels 5. Civil Rule 36 Federal Rule of Civil respond additional time employ Procedure prong 36. Federal courts two- Legisla- since counsel served in the Territorial party test to determine should whether ture). opportunity be afforded an to submit an un timely response. Hill Bank v. Pleasant United 7. In the recent case of Bittner States, (W.D.Mo.1973). gener 60 F.R.D. 1 requests (Alaska 1981), responses ally ‍‌​​​‌‌​‌‌​‌‌‌​‌‌​​‌‌​‌‌‌‌​‌​​‌‌‌‌‌​​‌‌​‌‌​​‌‌​‌‌‍Miller, Wright C. Federal Practice and & A. days four late. The admissions were submitted superior Finman, (1970); Proсedure at 719-20 summary judgment. On Request For in Federal Civil Admissions party appeal, requesting conceded that it Procedure, 432-33 Yale L.J. requests inequitable to hold prong The first of the test is whether the late We were deemed admitted. for admissions agreed, response presentation of the will subserve the reversed the order of summa- and thus prong case on the merits. The second ry judgment. issue, test, typically more at addresses whether information, record, such the we say other available sources cannot the court affidavit, which in sub- principal’s as the failing abused its discretion in to afford request. denials stance constituted opportunity responses. to file late has 207.8 NC not had Summary Judgment B. comparable benefit of information. In- next genuine issues of deed, it is noteworthy that when did dispute material fact remained in even af- respond, responses quite perfuncto- his were ter for admissions were Riley responded that was without ry.9 he sufficient information to either confirm or deemed admitted. thus submits that deny the veracity any of the invoices. it improper grant for the trial court to acknowledge any failure to partial summary judgment. NC’s motion for indebtedness is particularly questionable

given long and active business appli We recently summarized relationship. Many the invoices con- legal principles: cable cerned service allegedly work which NC A party summary judg- is entitled to performed on Riley’s equipment. It is rea- ment when “the pleadings, depositions, sonable to assume that the infor- requisite interrogatories, answers to and admis- mation to confirm deny or such invoices file, affidavits, together sions with the upon would be accessible reasonable in- genuine show that there is no as to issue quiry.10 material fact and that [the] We conclude that the trial court did not entitled to as a law.” matter of abuse its discretion in the present case. 56(c). determining Alaska R.Civ.P. *5 Civil Rule 36 is intended expedite litiga- whether summary judgment рroper tion through the elimination of uncontested case, particular a the trial court’s func- sure, issues. To be compel Rule 36 does not determining tion is limited to whether or the rejection automatic responses. of late genuine not a issue of material fact ex- demonstrates, As the result in Palzer such Pollet, 381, ists. Wilson v. 384 rigid rule unjustified would result in the (Alaska 1966). Where record suppression of the merits. In the same fact, presents such an ques- issue vein, however, too liberal sufferance of a ruling tion must be resolved at trial. “In litigant’s procrastination is equally undesir- on a all summary judgment able, since such policy would undermine proofs of- reаsonable inferences from purposes of the rule. The superior fered are drawn movant and court must therefore exercise its discretion light viewed in the most favorable to the to balance the desirability expediting litigation party opposing with need the motion.” Id. at 383- promote presen- tation of the Upon Rent-A-Car, merits. our review of also Alaska Inc. v. See Moses, 397, performed 8. See Moses v. 180 Colo. 10.The invoices service work (1973) (en banc) (trial 1302 equipment allegedly court abused its owned were dated failing response discretion in to allow late since and included a serial number identification interrogatories clearly placed equipment description answers to mat- involved as well as a dispute). performed. ter in of the work answering party may give “An lack of party 9. Where a submits an re- insufficient knowledge as a reason for fail- information or ure to admit or sponse, may the court take the matter as ad- deny unless he states that he mitted or order a further answer. Alaska inquiry the infor- has made reasonable and that generally Wright R.Civ.P. 36. See 8 C. & A. readily him is mation known or obtainable Miller, Federal Practice and Procedure 2261 deny.” insufficient to enable him to admit or (1970). Alternatively, requesting party merely 36. A denial which Alaska R.Civ.P. tracks the Rulе 36 compel responding file a motion language does not necessari- respond greater specificity. ly satisfy respondent’s obligation to avoid Cosmetics, Inc., Pomianowski v. Merle Norman evasive or meritless denials. See Asea F.Supp. (S.D.Ohio 1980). 507 439 Transp. 1246 Southern Pac. 669 F.2d (9th 1981). Cir. 966 essentially in this motion restate identified 1139

Ford Motor Haner, contention that the full indebtedness Ransom v. 362 (Alaska Riley submits 1961). Thus, appeal, was not owed. On n.24 P.2d the contention that that at least judgment party seeking summary re- procedure to a settlement agreed had that his proving “has the entire burden of settle- dispute. Any purported mained in opponent’s case hаs no merit.” Nizinski of little though, would be procedure, Ass’n., Inc., 509 Valley Electric Golden since the effect of the admis- consequence, (Alaska 1973), quoting P.2d amounts acknowledge that all sions was White, Braund, P.2d the other Similarly, were in fact owed. signifi- no by Riley issues identified had Municipality Anchorage, Williams v. were deemed ad- cance after the (Alaska 1981). pro entry partial mitted. “conclusively vides that admissions are es judgment proper.13 purposes litigation. tablished” for Travel, Inc., Molitor v. ATZ Post-judgment Prejudgment C. (Alaska 1976).11 Summary Interest

therefore, may be based on deemed admis dispositive. sions if such facts are Palzer v. respect The last issue with 206; Co., 419 P.2d at Moоs Serv-U-Meat pre the award of promissory note concerns Blitz, Inc., man Joseph P. 358 F.2d interest. The post-judgment Furthermore, (2d Cir. since note, in December executed the entire in deemed admissions validated pay “inter provided debtedness, met its initial burden to lawful maturity est after show summary judgment. entitlement on July contract rate.” The note matured Thus, Riley produce had the burden to com 2, 1976. petent showing evidence there were Where a contract does not contain material dispute.12 issues still in agreement, prejudgment interest express

We conclude that failed to es is set at the rate. 45.45.- tablish that material ‍‌​​​‌‌​‌‌​‌‌‌​‌‌​​‌‌​‌‌‌‌​‌​​‌‌‌‌‌​​‌‌​‌‌​​‌‌​‌‌‍issues remained in dis 010(a).14 рarties may agree Alternatively, *6 pute. Riley genuine interest, filed a statement of to an rate providing opposition issues in par to NC’s motion for that such a rate does not exceed the rate tial summary judgment. The five proscribed by application issues of the variable Dependahl Brewing summary judgment appeal. 11. But see v. Falstaff See Williams v. 1188, Corp., F.Supp. (E.D.Mo.1980) Valdez, 483, City (Alaska 1979). 491 1194 P.2d 603 488 (deemed given admissions not conclusive ef- executed, 14.At the time the contract was as fect, only evidence). but considered as matured, 45.45.010(a) well as when the debt AS legal set the rate An of interest at amend- 6%. Borough 12. State v. Fairbanks N. Star School 45.45.010(a), September to AS effective Dist., 1329, 621 P.2d 1331 Totem 12, 1976, legal raised the rate of interest to 8%. Tug Barge, Alyeska Pipe Ma rine & 159, 1, Ch. SLA 1976. § Co., 15, (Alaska 1978). line Serv. 24 legal Amendments to the rate of interest af accrued, ter the action but before during argument 13. We note that oral on NC’s govern they from the date become effective. summary judgment, Riley’s counsel City Borough of Juneau Commercial stated: Co., 957, (Alaska Union P.2d 959 Ins. 598 So if Tra-Mar, Inc., this court —if this court 1979); deems 33 A.D. Rachlin & Co. v. purposes litigation 153, of this that the Admis- 308 N.Y.S.2d 158 Were AS admitted, sions are 45.45.010(a) applicable deemed then the —Mr. contro prevailed Summary Judgment Eide has versy, in his prejudgment interest would therefore Summary Judg- through Mоtion. He is September entitled to from set at 6% only 12, 1976, ment. The issues left in the case is on and thereafter at A 1980 amend 8%. 45.45.010(a), legal counterclaim. raised ment to AS which applicability. We need 10.5%, not address whether this statement rate of interest no has prevents Riley challenging entry from 4 SLA §§ Ch. agreement. rate formula set forth in 45.45.- The AS note does not spe- state a 010(b).15 cific rate of interest. Nor does it expressly refer to the variable interest rate formula court awarded prejudg- set 45.45.010(b). forth in AS omis- Such ment interest at the rate of nine and one- sions, however, do not necessarily render half cent. This result reflects an inter- 45.45.010(b) inapplicable. AS “The terms pretation provision the interest in the ‘highest legal interest,’ interest’ or ‘lawful note require Riley to pay interest on the distinguished as legal interest, from means highest note at the rate sanctioned by AS up rate of interest 45.45.010(b)at that fixed by the date of maturity. Riley statute as the maximum that the did not rate at which in- “expressly agree” rate, to an interest so terest can be appli- that the contracted for.” 45 Am. Jur.2d, governed cable rate is 45.45.010(a), Interest and Usury AS at 16-17 (1969). Quite alternatively, that interest should be simply, rate set forth in determined by 45.45.010(b) reference to 45.45.010(a) AS is not the highest legal rate as it interest; existed at the time the contract was of only by application of the vari- executed, not when the debt matured.16 able possible interest rate formula is it ascertain the of interest. “The purpose of contract interpretation is Riley and specifically addressed to ascertain and effectuate the reasonable terest rate issue in negotiating contract. expectations parties.” Stordahl v. The contractual provision they adopted is Co., Government Employees Insurance sufficient in our view to constitute an ex- (Alaska P.2d 1977); Wright accord press Here, interest agreement.17 the ex- 490, 497 Vickaryous, (Alaska 1979); press agreement is to set intеrest at the Day v. A & G Construction highest rate by application sanctioned (Alaska 1974). Since neither party the variable interest rate formula. To hold alleges that the surrounding circumstances otherwise in an era of interest rate instabil- are in dispute, interpretation of the words ity unduly impair the ability par- of the contract is appeal treated on in the ties to a commercial transaction to allocate same questions manner as of law. Wessells the risk nonperformance. Day v. A & G Construction argument alternative is that any Thus, P.2d at 443. this court “need not “express agreement” in the note at most defer to the judgment of thе trial 45.45.010(b) referred to AS as it existed ” judge.... LeGrue, Alesna v. 614 P.2d the time the executed the contract. statutory formula was modified subse- reject

We first Riley’s argument quent to the formation of the contract but note does not contain an express interest support before the debt matured. of his matured, Dist., 15. At the Borough time the debt AS 45.45.- N. Star School *7 010(b) provided: (Alaska 1981); 1331 n.4 Wessells v. may charged by express No interest Consequently, be P.2d Riley agreement parties any ambiguities the in a contract or loan submits that should commitment NC, dated after June 1976 which resolved the who drafted the percentage points is more than five Owens, above the agreement. Sеe Tsakres v. charged annual rate member for banks ad- Const., Modern by vances that the 12th Federal Reserve District Barce, Inc., prevailed day on the 25th of the month present We conclude that in the context preceding the commencement of the calendar provision the contractual after matu —interest quarter during which the contract or loan rity highest at the lawful contract rate —is not commitment is made. A contract or loan ambiguous. principal commitment in which the amount $100,000 exempt exceeds is from the limita- Corp. 17.But see Universal C.I.T. Credit v. In tion of this subsection. gel, (1964) 347 Mass. 196 N.E.2d (interest also 16. provi- legal notwithstanding that thе contractual due at provided “highest ambiguous reasonably subject sion is to rate”). since it is the note lawful differing interpretations. State v. Fairbanks provi- interest 45.45.010(b) parties adopted usurious Riley notes that AS position, formu- time a contract or loan commit- expressly provides that the amended sion at the here, dated after June applies only question, la to contracts ment was executed. The 4, 1976, signed subsequent legislative whereas enact- not whether 1975. note December interest or an ment validates a rate of which was usurious when interest formula argu- persuaded by Riley’s We are not executed, agree to рarties may but whether trans- ment. In the context of the maximum inter- by whatever the be bound action, with the intent it is most consistent maturity. be at the date of est rate interpret “highest to lawful at least where the inter- We conclude that as an to be maturity” agreement rate at to establish com- provision est is intended for- by statutory bound modifications to the the detention of damages for pensatory prior maturity. mula enacted to This is not language does money, statutory nego- to parties attempted a case where the from agree- to a contract preclude ‍‌​​​‌‌​‌‌​‌‌‌​‌‌​​‌‌​‌‌‌‌​‌​​‌‌‌‌‌​​‌‌​‌‌​​‌‌​‌‌‍parties Rather, tiate a cost of credit. it is most future modifications in ing to be bound likely intended the interest statutory formula.22 provision indemnify damages to NC for by Riley’s perform. curred failure to As inter- disposition prejudgment Our persuasively argues, Riley could have court’s est issue validates avoided all interest timely repay- interest at the rate post-judgment award of ment of the debt.18 It would be anomalous per cent. 09.30.070 of nine and one-half which, adopt rising to a rule due to interest provides post-judg- rate of rates, failing perform, rewards unless ment interest is and, generally, more creates an incentive specifies a is on a written contract which for debtors default.19 promis- interpret rate of interest. We the note give Our decision effect to inter- sory specify prejudgment note to provision in a manner most consistent with cent, the per est is set at nine and one-half parties’ contrary intent is not of matu- rate allowable on the date statutory recognize limitation. We that at 45.45.010(b)interest rity pursuant to the AS 45.45.010(b)pro- the time of maturity AS proper It was therefore rate formula. applied vided that formula amended post-judg- court to award NC only to contracts executed after June nine and one- ment interest at the rate of 1976.20 It is our view that the limitation half cent. statutory reflects rule that a the settled amendmеnt of the rate will legal II. CONTRACTUAL RILEY’S applied not be retroactively if it alters COUNTERCLAIM rights existing and duties under an con- Thus, the statutory Riley argues inappropriate tract.21 limitation bars that it was application concerning of the amended formula where resolve the counterclaim legislature enforcing subsequently the re- 18. This rationale is noted in cases deleted agreements pay maturity application of the revised formula interest after at a striction on higher usury dated after permitted to contracts or loan commitments rate than laws. 1, 2, Annot., SLA generally (1969) June 1976. Ch. §§ 28 A.L.R.3d (“Provision Maturity At A For Interest After Am.Jur., Usury generally 21. See Interest and Legal Ratе in As Usurious Excess Of Rate Or Annot., (1969); at 23-25 A.L.R.2d 932 Illegal”). Otherwise *8 Mid-Jersey Fidelity-Mort- 19. See Bank Nat’l v. Gawart, Mich.App. Campbell cf. v. 46 22. But gage Investors, 640, (3rd 518 F.2d 645 Cir. 529, (1973) (in land sale con- 208 N.W.2d 607 1975) (“Equity by permitting is not served tract, by agreement to be bound increases repayment debtor to refuse of a note when it legal given legisla- in the rate not effect since by delay profit becomes due and then resulting only prospec- ture intended amendment to have ensuing litigation.”). from Annot., application). 60 A.L.R.3d tive See also (1974). 473

969 where, of services Reformation is payment by appropriate for excavation summary judgment.23 mistake, of mutual agree. by We reason the written does agreement not accurately reflect trial court NC’s v. bargain intended Durkee summary judgment on the contractual Busk, 588, (Alaska 591 Ref 1960). 355 P.2d counterclaim, of the belief apparently out party ormation also available where is “a the purported that mistake in actuality was knowing written executes a instrument in an error business and in any the other terms intention of as to the event, was Riley’s unilateral error. The therein, knowing to be and embodied noted that Riley experienced court was an writing express does accurately not [the] excavator, thus suggesting Riley Hill, P.2d Straight that intention.” v. 622 have been payment should aware that at 425, (Alaska 1981) Holiday Inns quоting 428 per yard equivalent cubic is not the of $3.33 America, Peck, 94 520 P.2d per at ton. $2.40 Wolfe, (Alaska also v. See Gablick general rule is is that reformation gener 394 469 P.3d not available obtain relief from unilat- Corbin, Corbin on ally § A. Contracts eral mistake. Lathrop Lampert, Co. v. 583 (1960); at 692 Restatement of Contracts (Alaska Alaska Hill, (1932). Straight at Foods, Inc. v. American Manufacturer’s concluded, particularly this in words court Mutual Insurance case, applicable that: 1971). NC, (Alaska apparently trial there was which Whether a mistake for well, as court view as an at- Riley’s claim de should be allowed will reformation tempt renegotiate rate after thе contract part on the pend credibility in discovering margin was in- profit in whom the relied affiants length sufficient. As ap- at judg opposing summary seeking and peal, reformation is not to obtain available credibility are questions of ment. Such relief from a mistake of business trial, particularly apt for resolution at regarding express- a risk which the contract summary judgment proceedings. in allocates to the ly aggrieved party. Fowler Wolfe, quoting Gablick v. City Anchorage, 583 P.2d P.2d at (Alaska 1978). This view that Ri- assumes argument. also raises a related ley, an excavator for should have years, agent that an agreed He contends of NC consequences pay- known the rate of during contract the course reform the specified in the contract.24 such performance. NC submits that view, however, In our trial both the was is of no effect since it modification misperceive legal argu- and NC the central Riley, unsupported by consideration. gravamen ment advanced by Riley. The under an contractual argues, existing counterclaim is entered that he perform the work at the terms obligation impression contract under the mistaken position stated in contract. NC’s the rate of in the payment specified on the view that had again premised contract, per yard gravel cubic $3.33 Assuming obtain reformation. no basis to excavation, equivalent filled was the requisite proof can establish the ton gravel, the rate used reformation, $2.40 to be entitled consideration prior impor- in a More transaction. for the modification is oral furnished tantly, avers that aware that NC was Stinnett, itself. compromise See Fieser v. entered into the contract under this Kan. deposition Thus, existed, mistake. Riley’s affidavit and whether oral contract so, contract, adequately position. corroborate his if what were the terms of the previously Anchorage Paving Asphalt 23. We 24. See Lewis set forth the principles 1978) (еxperienced in review con- of a motion judgment. charged knowledge tractor of subsurface conditions). soil *9 45.45.010(b)as 1976 is control- modified in only of can be fact which present questions amendment, raised the Hastreiter, ling; the 1976 which at trial. Curran resolved rate,1 by lawful is its v. maximum interest Jackson the White, inapplicable to the note and thus terms controlling. rate preamendment is support motion Riley submitted unambiguously NC noted that The 1976 amendment which the contract billings to NC used applicable only $3.33 states that it is to contracts accepted gravel 4, 1976; rate for and that v/as Riley’s dated after June note facts the at rate. Such final assuming $3.33 dаted December 1975. Even finding that necessarily preclude a do not in parties changes the intended or, in the alterna- is warranted reformation ap- statutory ceiling the interest tive, the contract. the modified note, legisla- the plicable to the in this case Riley’s of requisite the elements Though change applicable ture did not the rate estab- may prove difficult to counterclaim the note and thus intent is parties’ is lish, conclude that the counterclaim we Therefore, irrelevant. appropriate particularly is premised theory on a which by pre- terest rate is that prescribed by apt for resolution trial.25 45.45.010(b). amendment version of AS of is The court part, in part,

AFFIRMED in REVERSED proceedings

and REMANDED for further

in opinion.26 accordance this

RABINOWITZ, Justice, in dissenting part. OF SISTERS PROVIDENCE IN WASH I find that I am with the agree unable INGTON, INC., Appellant, majority’s ruling on the of the rate question prejudgment postjudgment DEPARTMENT OF HEALTH AND SO Riley. by note executed SERVICES, Alaska, CIAL State provided note “interest after Clinic, Inc., Appellees. Lake Otis maturity at lawful contract highest No. 6156. agree ruling rate.” I do with the court’s that “the rate” re- lawful contract Supreme Court of Alaska. prescribed by fers to rate 45.45.- AS 1982. 010(b) charged maximum that can be —the having without a contract—rather usurious Rehearing Amended Denial As than the rate 45.45.- by established AS 30, 1982. Sept. 010(a), applies which when a contract does agreе, not state an I do not interest rate. AS by the rate established

however, that arguments parties’ We need address the is not avail- that reformation 25. NC also attorney’s The concerning fees. fully award executed where the contract has been able light attorney’s in is vacated award of fees rejected in similar claim We a both disposition issue. We Wolfe, only our the counterclaim 395-96. Gablick P.2d at ultimately prevail were NC note that counterclaim, NC, Board of Trustees authority cited may consider Training Boys D. Wilson School for v. O. Nat’l ascertaining appropriate both claims (D.C.Cir.1943), inapplicable is 133 F.2d 399 attorney’s award оf fees. There, formed facts. a contractor on the realizing to a clerical after that due contract 45.45.010(b) the 1976 amendment Prior to held low. The court mistake his bid too percent- provided of “four for a maximum rate contractor, chose not to seek charged mem- age points above annual rate contract, rescission, ‍‌​​​‌‌​‌‌​‌‌‌​‌‌​​‌‌​‌‌‌‌​‌​​‌‌‌‌‌​​‌‌​‌‌​​‌‌​‌‌‍com- could not into a enter Federal the 12th for advances ber banks performance, plete reformation. and then seek time; particular District” Reserve County Lemoge of San See also Electric v. “five”, changed thus rais- “four” amendment Mateo, 46 Cal.2d agree ceiling. that “five ing points ...” the annual above 9.5%.

Case Details

Case Name: Riley v. NORTHERN COM'L CO., MACHINERY DIV.
Court Name: Alaska Supreme Court
Date Published: Jul 30, 1982
Citation: 648 P.2d 961
Docket Number: 5754
Court Abbreviation: Alaska
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