Chugach Electric Ass'n v. Northern Corp.

562 P.2d 1053, 1977 Alas. LEXIS 490
CourtAlaska Supreme Court
DecidedApril 8, 1977
Docket2779, 2891
StatusPublished
Cited by19 cases

This text of 562 P.2d 1053 (Chugach Electric Ass'n v. Northern Corp.) is published on Counsel Stack Legal Research, covering Alaska Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chugach Electric Ass'n v. Northern Corp., 562 P.2d 1053, 1977 Alas. LEXIS 490 (Ala. 1977).

Opinion

RABINO WITZ, Justice.

The instant appeal and cross-appeal mark the third occasion this litigation comes before us. 1 Prior to discussing the numerous specifications of error which have been advanced in the appeal and cross-appeal, the history of this case will be related.

*1055 In 1966 Northern Corporation and Chu-gach Electric Association entered into a contract for the repair and protection of the upstream face of the Cooper Lake Dam. Due to circumstances not here relevant, Northern and Chugach amended the contract to provide that riprap and filter layer stone was to be quarried at the opposite end of the lake from the dam and transported across Cooper Lake to the dam site when the lake was frozen to a sufficient depth to permit the hauling of heavy loads. Northern began the ice haul method in the winter of 1966-67 but encountered serious difficulties. By the time the ice was thick enough to support hauling, there were water overflows of one to two feet in certain areas. Northern tried many routes in an attempt to find a safe crossing and made objections to Chugach about the condition of the ice, but Chugach insisted on performance. On March 11, 1967, a Euclid front end loader, which was used to clear the snow from the ice, broke through the ice and was lost. Chugach was informed of the loss but, in a letter dated March 21, again insisted on performance. On March 27, Northern was directed by Chugach to resume operations by the following morning or be held in default. Northern complied with this directive. After repeated efforts to haul the rock involving a number of near losses of equipment, including one small tractor, Northern stopped work on March 31, 1967. A letter, dated March 31, 1967, was sent to Chugach informing them of the suspension of all work. The stoppage of work at this time was done apparently with the approval of Chugach. Some of Northern’s equipment was left at the work site. 2

During the summer and fall of 1967, Northern made repeated attempts to ascertain their position with respect to the subject contract; Chugach did not respond until January 8,1968. The January 8 letter from Chugach informed Northern that:

Because CEA cannot permit this work to drag on indefinitely, please take notice that, except that you commence this work and prosecute it with proper diligence so as to have hauled all rock by April 1, 1968, CEA will declare you in default under the contract and take such further steps with your surety or otherwise as may be necessary under the circumstances.

In a letter dated January 20, 1968, Northern informed Chugach they were mobilizing for a haul at Cooper Lake. The ice conditions at Cooper Lake were much improved over what they had been the previous winter. There was only a small amount of snow, the ice was frozen to what was believed to be the proper depth, and there were no overflow problems.

On February 1, 1968, Northern began hauling the rock across the ice in trucks that were only partially loaded. Two trucks broke through the ice, resulting in the death of both drivers and the loss of the trucks. Northern stopped all operations at this point and informed Chugach on February 16, 1968, that it would “make no further attempts to haul across the ice.” By letter of March 28, 1968, Northern declared a termination of the contract.

In September 1968, Northern brought suit against Chugach seeking $139,957.25 in damages, the difference between the amount it expended in attempting to perform the contract and the amount received from Chugach. Chugach counterclaimed for liquidated damages in the amount of $28,250. 3 After an aborted trial before Judge Eben Lewis, the case was tried, with *1056 out a jury, before Judge James Singleton. The superior court ruled that both parties to the contract were discharged from further performance due to a supervening impossibility, i.e., the inability to transport the rock by the ice haul method. No damages or attorneys’ fees were awarded.

In our opinion in the first appeal of this matter, we held that the contract was incapable of performance. Northern Corp. v. Chugach Electric Ass’n, 518 P.2d 76, 80 (Alaska 1974). However, we did not approve of the superior court’s resolution of the damage issue. Although we agreed with the superior court’s determination that the parties’ modification of their contract to include utilization of the ice haul method was the result of arm’s length bargaining, we held that Northern’s increased costs incurred “after such time as Chugach was reasonably placed on notice that it was not feasible to perform the contract” should be recompensed. 4

Chugach petitioned for rehearing, claiming, inter alia, that the decisional law cited in our opinion did not support the change order theory which we had employed in our first opinion. The petition was granted and further briefing ordered on the damage issue. In our Opinion on Rehearing we abandoned the rationale of an implied change order and focused instead on the alteration in the parties’ relationship once Northern had notified Chugach that it did not believe the contract could be performed by the ice haul method and Chugach had insisted on performance. We held that Northern was entitled to recover its extra costs from that point until some future time, prior to the termination of the contract, when Northern “had actual knowledge or should have known that the ice haul method was impossible.” 5 Under our Opinion on Rehearing, the matter was remanded to the superior court with instructions to make the “determinations” indicated in our opinion.

On remand, Northern moved for a hearing in order to introduce further evidence relating to the matters highlighted in the Opinion on Rehearing. That motion was denied. The superior court requested counsel to submit memoranda pointing out matters in the record which were relevant to the issues delineated by our Opinion on Rehearing. On September 18, 1975, the superior court rendered its decision, finding that Northern “reached the conclusion that there was a substantial likelihood that they could not successfully perform the contract, and so notified Chugach” at the time that the Euclid loader broke through the ice and the smaller tractor broke through the overflow. The trial court separated the construction season of 1966-67 from that of 1967-68. Thus, the superior court ruled that for the 1966-67 season Northern was entitled to damages from the middle of March 6 to March 31, 1967, when Northern ceased operations. As to the 1967-68 season, the superior court found that due to the dramatic change in ice conditions at the lake neither party

had actual knowledge that the ice-haul method was not feasible in ’68 at any time until the trucks went through the ice.

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Bluebook (online)
562 P.2d 1053, 1977 Alas. LEXIS 490, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chugach-electric-assn-v-northern-corp-alaska-1977.