Krossa v. All Alaskan Seafoods, Inc.

37 P.3d 411, 2001 Alas. LEXIS 144, 2001 WL 1673384
CourtAlaska Supreme Court
DecidedOctober 12, 2001
DocketS-9576
StatusPublished
Cited by20 cases

This text of 37 P.3d 411 (Krossa v. All Alaskan Seafoods, 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
Krossa v. All Alaskan Seafoods, Inc., 37 P.3d 411, 2001 Alas. LEXIS 144, 2001 WL 1673384 (Ala. 2001).

Opinion

*413 OPINION

FABE, Chief Justice.

I. INTRODUCTION

John Krossa signed a contract with All Alaskan Seafoods to fish for crab in exchange for a percentage of the "gross receipts" from the excursion. After about a week fishing in Russian waters, he learned that due to the unusual structure of All Alaskan's business venture, the boat on which he fished would not sell the crab or receive "gross receipts" in the conventional sense. Rather, All Alaskan calculated crew shares based on a complicated formula using a fixed price per pound of crab caught. Krossa fulfilled the remainder of the contract and returned for a second term, this time under a contract which made explicit All Alaskan's payment formula. He later sued for breach of the first contract. The superior court held that because there was no meeting of the minds as to the meaning of "gross receipts," no contract existed until Krossa learned All Alaskan's terms and ratified them by his actions. We affirm the superior court's holding that, after one week of work, Krossa accepted All Alaskan's payment terms and the parties formed a contract. For the week during which Krossa worked without a contract, he has already received reasonable compensation. We therefore conclude that the superior court correctly denied any additional damages.

II FACTS AND PROCEEDINGS

In 1994 All Alaskan Seafoods formed a joint venture with a Russian company, Dal-moreproduct, which owned the rights to a quota of crab in Russian waters. All Alaskan provided catcher vessels, a processing ship, and experienced crews that could teach their Russian counterparts how to catch and process crab for the frozen crab market. Dai-moreproduct apparently retained ownership of the crab and received all direct profits from the venture. The Russian company then paid All Alaskan a management fee.

As part of its initial deal with Dalmorepro-duct, All Alaskan developed an unusual formula for paying crew members. Because the boats passed the crab directly to Dalmore-product rather than themselves selling the crab to processors, the crew members were not compensated based on the price brought by their catch. Instead, they were compensated based on an artificial rate of $.50 per pound. This figure was well below the market rate, but the All Alaskan crew share amounted to nearly 100% of the total crab captured; by contrast, a typical crew in Alaska waters might be paid based on the price of the erab sold by the boat, but be paid for only 35-40% of the total catch. In addition, All Alaskan did not take the usual deductions out of the crew members' earnings for fuel, bait, and loss of gear.

Before the venture began, All Alaskan's crab processing vessel was destroyed in a fire; thereafter, some of All Alaskan's fishing vessels had to spend time hauling the catch the long distance to the replacement processing vessel instead of fishing. As a result, All Alaskan added another unusual aspect to their crew contract: Crew compensation was based on the crab delivered by all ten boats in the fleet collectively, rather than on the deliveries of each individual boat. Hence, each person's compensation was based on the pooled catch of the entire fleet.

The resulting payment formula was somewhat complicated. As later expressed in a contract spelling out its terms, it paid crew members

[gross weight of processed crab for the season] divided by 0.64 (the recovery rate) to arrive at the estimated raw weight of fish caught by the fleet during the season. This gross poundage will be multiplied by $0.50 per pound for all species of crab caught, then divided by the number of boats in the fleet, then multiplied by the crewmember's crewshare percentage of --%, to arrive at a full season share aboard the vessel at the crewmember's percentage. This number will be divided by the number of days in the season, to arrive at a daily rate at the crewmember's percentage. The crewmember's pay will then be calculated based on the number of days aboard the vessel, minus $20.00 per day for groceries.

This formula compensated the crew at a sufficiently competitive rate that some crew *414 members-including the plaintiff in this case-returned to the fleet for additional work under the same terms.

Although All Alaskan explained its payment formula verbally and through informational meetings with some contractors, it apparently failed in many cases to ensure that individual contractors understood the formula prior to embarking on the venture At least four lawsuits, including this one, have arisen based on the contracts used in 1994 and early 1995. 1 In some of the suits, courts concluded. that All Alaskan had never explained the payment system to particular plaintiffs. In this case, the superior court concluded that All Alaskan did at the start of the fishing season "make more than reasonable efforts to describe the specific terms" by holding meetings in which the payment formula was explained and written pay projections based on the $.50 price were provided to the crew. However, Krossa apparently did not attend a meeting because he hired on in Juneau later in the season. The contract that he signed stated simply:

I understand that my share to be paid is 9% of the gross receipts after local taxes which may apply, if any. In addition, groceries will be charged at $20.00 per day. 2

Although this language is apparently similar to language typically used in Alaska crab fishing contracts, it did not refer to a typical financial arrangement. As the Court of Appeals for the Ninth Circuit explained in an unpublished decision considering the same All Alaskan contract:

In the Alaska fishery, the boat owns the crab and sells it. As the judge found, "gross receipts" means the number of pounds caught and sold multiplied by the price per pound, which is to say, what the boat gets paid. That trade custom could not apply in this case, because the boat did not own the crab. Nor was the crab delivered to processing boats that paid for it, as was usual in the trade. Instead, the engagement with the Russians (the terms of which the fishermen did not know in any detail) established that the Russians would own the crab from the time it was caught, and the boat would not sell the crab at all. On behalf of the Russian owners, the boats delivered the crab to processing vessels for processing and delivery to the Japanese customers. There were no fish tickets or invoices to show how much crab each vessel delivered, and all ten boats' catches were added together and divided by ten, to get a figure for each boat, unlike the usual fishing voyage. Thus there were no "gross receipts" in the customary sense that the words were used in the trade. 3

As the Ninth Cireuit's opinion also pointed out, applying the conventional definition of gross receipts as "what the boat is paid for the fish it delivers," gross receipts in this venture were zero. 4

John Krossa joined the venture as a deckhand on the F/V SHELIKOF in Juneau in April of 1995.

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Cite This Page — Counsel Stack

Bluebook (online)
37 P.3d 411, 2001 Alas. LEXIS 144, 2001 WL 1673384, Counsel Stack Legal Research, https://law.counselstack.com/opinion/krossa-v-all-alaskan-seafoods-inc-alaska-2001.