Kachemak Seafoods, Inc. v. Century Airlines, Inc.

641 P.2d 213, 1982 Alas. LEXIS 396
CourtAlaska Supreme Court
DecidedMarch 5, 1982
DocketNo. 5768
StatusPublished
Cited by2 cases

This text of 641 P.2d 213 (Kachemak Seafoods, Inc. v. Century Airlines, Inc.) 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
Kachemak Seafoods, Inc. v. Century Airlines, Inc., 641 P.2d 213, 1982 Alas. LEXIS 396 (Ala. 1982).

Opinion

OPINION

MATTHEWS, Justice.

This appeal involves the construction and application of AS 10.05.690.1 That statute denies an unregistered foreign corporation “transacting business” in the state the right to maintain suit in an Alaska court. In the proceedings below, appellant moved for summary judgment, arguing that appellee’s suit against it was barred under AS 10.05.-690. The trial court denied that motion and, after trial and a judgment in appellee’s favor, this appeal was taken. We affirm.

Century Airlines, Inc. is a Michigan corporation owned by Clark Cryderman and his wife. Its sole office is located in Pontiac, Michigan and, with one exception, Century has never stationed employees or representatives outside of that state. Prior to 1975, Century’s business consisted of chartering airplanes, selling aviation fuel and occasionally selling airplanes. Century had never had any contact with Alaska or Alaskan businesses before the events which have led to this appeal occurred.

A foreign corporation transacting business in the state without a certificate of authority may not maintain an action, suit or proceeding in a court of the state until it obtains a certificate of authority. A successor or assignee of a foreign corporation transacting business without a certificate of authority may not maintain an action, suit or proceeding in a court of the state on a right, claim or demand arising out of the transaction of business by the corporation in the state until a certificate of authority is obtained by the corporation or by a corporation which has acquired all or substantially all of its assets.

Sometime in 1975, an officer of Kodiak Western Airlines, Inc., an Alaska corporation, called Cryderman to inquire about leasing a DC3 airplane from Century for the summer. Century had never before leased aircraft, but as a result of this conversation Century agreed to lease Kodiak a DC3. Kodiak prepared and signed the lease in Alaska and then mailed it to Michigan, where Cryderman signed it on Century’s behalf. Under the lease, Century was to supply all parts that might be needed for repairs, and to perform engine overhauls or replacements. Kodiak was otherwise responsible for maintaining and servicing the leased aircraft.

Prior to the airplane’s delivery, Kodiak agreed to sublease it to Kachemak Sea-foods, Inc. Kachemak is an Alaska corporation headquartered in Togiak, Alaska, and owned by Robert Needham and his wife. Kachemak processes and markets salmon, using aircraft from June to mid-September to fly salmon into Anchorage which are then flown to Seattle for marketing.

The leased DC3 was flown from Michigan to Togiak by a Kachemak pilot. Cryder-man went along on this flight to view Kachemak’s operations and to see the state. He remained in Alaska for about a week and while in Togiak spoke with Needham. During that conversation, Needham brought up the possibility of Century leasing aircraft directly to Kachemak in future [215]*215years, but Cryderman stated that he “wasn’t interested in circumnavigating [Kodiak] to go direct.”

At the end of the 1975 lease period as the plane began its ferry flight back to Michigan, it developed engine problems in Dill-ingham, Alaska. Cryderman talked to both the Kachemak pilot and a Kodiak mechanic and learned that the engine had seized. He had a spare engine and a Century mechanic flown to Dillingham who, with the assistance of Kodiak’s mechanics, changed the engine.

A dispute later arose between Century and Kodiak regarding responsibility for the labor cost of installing the engine and the cost of ferrying the plane back to Michigan. Century had borne these costs and felt that it was entitled to reimbursement by Kodiak. Although Century did not pursue the matter at that time, Century decided not to lease to Kodiak again.

In the fall of 1975, Needham wrote to Cryderman expressing his interest in leasing directly from Century. Cryderman did not respond and sometime in 1976 Needham again wrote Cryderman. This time Cryder-man answered, stating that Century would not enter into any further leasing arrangements until it had been paid for the previous year, referring to the amount assertedly still owed Century by Kodiak. Needham replied that Kachemak would take care of that debt if that was what it would take to get Century to lease aircraft to Kachemak. This resulted in the June 11, 1976 lease agreement,2 which was prepared and signed by Kachemak in Alaska and signed by Century in Michigan.

The 1976 lease covered two DC3 aircraft. The lease was for a minimum of two months but could be renewed semimonthly at Kachemak’s option. Kachemak was to pay the cost of ferrying the planes to Alaska and returning them to Michigan. Kachemak was also to procure liability insurance and to reimburse Century for the cost of hull insurance on the aircraft for the lease period. The lease obligated Kache-mak to provide the flight crews and the fuel and lubricants for operating the leased planes, and to perform all maintenance and repairs other than the major overhaul or replacement of engines and airframes. Unlike its 1975 lease with Kodiak, Century was not responsible for supplying parts for ordinary wear and tear.3

In late August of 1976, Cryderman traveled to Alaska to try to collect the money Kodiak allegedly still owed Century and to negotiate the sale of one of its leased aircraft to Kachemak. Upon arriving, Cryder-man learned that one of the DC3s had developed engine troubles, apparently due to a damaged cylinder, so he flew to Togiak where the plane was grounded. After he arrived, Kachemak mechanics changed the cylinder and started the engine, but then shut it off as the engine was not running smoothly.

At this point, according to Cryderman, Kachemak’s mechanics concluded that the engine had failed, and Needham told Cry-derman that Century was responsible for fixing the engine and for returning the plane to Michigan. Needham, on the other hand, stated that it was Cryderman that concluded the engine had failed and that “Cryderman took effective control of the aircraft.” Cryderman had an engine and a Century mechanic flown to Alaska where, with the aid of several local mechanics, the replacement engine was installed, and the plane was then flown back to Michigan.

While still in Alaska, Cryderman continued negotiating with Needham the sale of the other leased aircraft. They agreed that Century would sell the plane to Kachemak, subject to Kachemak’s approval after inspecting the plane and its maintenance history. The sale, however, was never consummated. According to Cryderman, Kachemak failed to tender the full purchase price in time, so he had the plane flown [216]*216back to Michigan. Needham stated that there was no definite date by which the purchase price had to be tendered and that Century removed the plane before Kache-mak had a reasonable opportunity to inspect it.

In August of 1977, Century filed a complaint in superior court alleging that Kache-mak had breached the 1976 lease. Kache-mak denied all liability and filed a counterclaim alleging that Century had breached the sales agreement. In July of 1980, Kachemak moved for summary judgment on the ground that Century’s suit was barred by AS 10.05.690. This motion was denied and the case was then tried before the lower court sitting without a jury.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
641 P.2d 213, 1982 Alas. LEXIS 396, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kachemak-seafoods-inc-v-century-airlines-inc-alaska-1982.