Tufco, Inc. v. Pacific Environmental Corp.

113 P.3d 668, 2005 Alas. LEXIS 72, 2005 WL 1316925
CourtAlaska Supreme Court
DecidedJune 3, 2005
DocketS-11132
StatusPublished
Cited by20 cases

This text of 113 P.3d 668 (Tufco, Inc. v. Pacific Environmental 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
Tufco, Inc. v. Pacific Environmental Corp., 113 P.3d 668, 2005 Alas. LEXIS 72, 2005 WL 1316925 (Ala. 2005).

Opinion

OPINION

BRYNER, Chief Justice.

I. INTRODUCTION

Tufco, Inc., leased property to Pacific Environmental Corporation (Penco) for use in a business that cleans up environmental contamination. As part of the agreement, Tuf-co’s owner, Todd Fisher, worked as a Penco employee. In the course of his employment, Fisher helped arrange, and then actively participated in, cleanup work that required storing hazardous materials on Tufco’s property. Later, acting on behalf of Tufco, Fisher sued to evict Penco, claiming that it had breached a lease provision that prohibited storing hazardous materials on Tufco’s property. The superior court held a trial and concluded that Fisher’s conduct estopped Tufco from enforcing the hazardous-materials provision. Tufco then moved to amend its complaint to include a new claim — an allegation that the lease had recently been modified — that Tufco contended the parties had actually tried; the court denied this motion, finding that the new issue had neither been raised nor tried. In entering judgment, the court awarded Penco the full reasonable fees and costs it incurred from the time it received Tufco’s notice of default, basing this ruling on a lease provision that allowed recovery of prevailing-party costs and attorney’s fees. Tufco challenges these rulings. We affirm, concluding that the record supports the superior court’s finding of estoppel, that the court properly declined to amend the complaint to include Tufco’s post-trial issue because the issue had not actually been tried, and that the court correctly interpreted and applied the lease’s provision allowing prevailing-party costs and fees.

II. FACTS AND PROCEEDINGS

Todd Fisher owned Jesco, an Alaska company that specialized in tank inspections and tank cleanings. Jesco had recently purchased a building in Anchorage when Penco, a Hawaii-based corporation doing similar work, approached Fisher about purchasing Jesco. The parties negotiated a lease/purchase agreement. The terms of the agreement called upon Penco to purchase the Jes-co business for a sum of $400,000 and a share *670 of the business’s ongoing profits; in addition, Penco would lease Jesco’s Anchorage building and property from Fisher for a renewable five-year term. The agreement also required Penco to employ Fisher and one of Jesco’s existing Anchorage employees, George Shedlock, as Penco’s Alaska representatives. To carry out the agreement, Fisher formed a new company, Tufco, which acquired Jesco’s assets, sold the Jesco business to Penco, and acted as the lessor of the Anchorage building and property.

Jesco and Penco signed the sale and lease agreements in March 1999. The building lease contained a provision prohibiting Penco from storing hazardous materials on Tufco’s premises. It also included a provision that entitled either party to recover prevailing-party costs and attorney’s fees if the party needed to retain counsel to enforce its rights under the lease.

In late summer, Penco negotiated a contract with a company called Envirosolve that gave Penco ongoing responsibility for recovering and storing hazardous chemicals seized by various law enforcement agencies during raids on illicit methamphetamine laboratories in Alaska. Penco designated Fisher and Shedlock to lead teams of Penco employees in the hazardous-materials recovery operations. The contract required Penco employees to go through extensive training on handling hazardous materials and to be fingerprinted by government agencies. It also required Penco to build a storage facility for the hazardous materials on its Anchorage property and to secure the storage facility with an alarm and razor-wire fencing.

In September or October 2002 Envirosolve conducted a seminar for Penco employees to demonstrate the procedures involved in carrying out the contract. Fisher participated in the seminar. Soon after, Fisher began acquiring the equipment needed for Penco to build the new secure-storage facility. The equipment included a connex storage trailer — which Fisher purchased from a company owned by his wife — and razor wire for the fence surrounding the trailer. Once the con-nex trailer was placed on Tufco’s Anchorage property, Fisher spent several nights and weekends installing the razor-wire fence around the trailer.

In November Fisher participated in Pen-co’s first meth-lab cleanup job, storing the hazardous materials in the trailer on Tufco’s property. Later the same month, acting on behalf of Tufco, Fisher sent Penco a notice of default, claiming that it had breached the lease agreement’s hazardous-materials provision by storing hazardous materials on Tuf-co’s property. Penco responded with a letter denying this claim, asserting that Fisher had effectively consented to the use of Tufco’s property for storage of hazardous materials by helping Penco secure the Envirosolve contract and by preparing the site for storage of hazardous materials. In reply, Tufco notified Penco that its breach of the hazardous-materials provision had terminated the lease but that Tufco would be willing to allow Penco to remain on the premises for a higher rent. Over the next several months the parties discussed ways to resolve this conflict, including the possibility of a new lease agreement expressly allowing Penco to store the Envirosolve materials on Tufco’s property. Meanwhile, Penco continued to recover hazardous materials from meth labs and store them on Tufco’s property; and Fisher continued to participate in this work.

The parties’ settlement efforts ultimately proved unsuccessful. In May 2003 Tufco filed an action to evict Penco from the property and for damages resulting from its breach of the lease. At Tufco’s request, the superior court held an expedited trial; Fisher and Shedlock testified for Tufco, and four Penco officers testified for Penco. The superior court ruled in favor of Penco, finding that Tufco was estopped from invoking the hazardous-materials provision because, by helping Penco obtain the Envirosolve contract, purchasing materials, and building the secure storage facility, Fisher had effectively led Penco to believe that he had approved Peneo’s storage of these hazardous materials on Tufeo’s property. 1

*671 Tufeo moved for reconsideration, insisting that Fisher’s conduct was not inconsistent with enforcing the lease, because he had merely acted as a Penco employee and had adequately communicated his opposition to Penco’s hazardous-materials storage by discussing the issue with Shedlock, who was then working as Penco’s Alaska area manager. Tufeo separately moved under Alaska Civil Rule 15(b) for leave to amend its pleadings to conform to the evidence presented at trial. Tufeo asserted that during the parties’ settlement discussions before trial, Penco had agreed, as a condition of remaining on the property, to purchase insurance covering pollution damage; in Tufco’s view, this agreement amounted to a modification of the original lease. Tufeo insisted that the parties had actually litigated the lease-modification issue at trial, so it requested that its complaint be amended to conform to the issues actually tried by adding an allegation of lease modification and a claim for declaration of the parties’ obligations under the modified lease.

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Cite This Page — Counsel Stack

Bluebook (online)
113 P.3d 668, 2005 Alas. LEXIS 72, 2005 WL 1316925, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tufco-inc-v-pacific-environmental-corp-alaska-2005.