Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Girdwood Mining Co. v. Comsult LLC

Supreme Court of Alaska

July 3, 2014

GIRDWOOD MINING COMPANY, Appellant,
v.
COMSULT LLC and RODGER DAVIS, Appellees. COMSULT LLC and RODGER DAVIS, Appellants,
v.
GIRDWOOD MINING COMPANY, Appellee

Page 195

Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Patrick J. McKay, Judge. Superior Court No. 3AN-10-11956 CI.

William D. Artus, Anchorage, for Appellant/Appellee Girdwood Mining Company.

Michael R. Mills and Katherine E. Demarest, Dorsey & Whitney LLP, Anchorage, for Appellees/Appellants Comsult LLC and Rodger Davis.

Before: Fabe, Chief Justice, Winfree, Stowers, Maassen, and Bolger, Justices.

OPINION

Page 196

FABE, Chief Justice.

I. INTRODUCTION

A mining company contracted with a consultant to help the company obtain new capital investments. The company later brought suit against the consultant, seeking declaratory judgment that the contract violated Alaska securities law, as well as equitable rescission of the contract and cancellation of shares of stock and royalty interests granted under the contract. The superior court granted summary judgment to the consultant on two grounds: (1) the company's suit was barred as a matter of law by AS 45.55.930(g), which provides that " [a] person who makes or engages in the performance of a contract in violation of [Alaska's securities law] . . . may not base a suit on the contract" ; and (2) the company's suit was barred as a matter of law by res judicata in light of a prior suit instituted by the consultant against the company in which the company did not raise its present claims defensively. We reverse the superior court's grant of summary judgment on both grounds.

II. FACTS AND PROCEEDINGS

Girdwood Mining Company and Comsult LLC, a consulting company, entered into two agreements in August 2003: a Management Agreement and a Fundraising Agreement. Under the Management Agreement, Comsult would provide management services for Girdwood Mining and in return would receive a retainer in the form of a grant of stock plus regular cash payments. Under the Fundraising Agreement, Comsult would bring new capital investment to Girdwood Mining and in return would receive royalty interests and stock. For purposes of argument on the summary judgment motion practice in the superior court and in this appeal, the parties have assumed that the Fundraising Agreement violated Alaska securities law in order to reach the other legal issues presented in this case. Comsult has reserved the ability to argue in any further proceedings that the Fundraising Agreement did not violate Alaska securities law. We therefore do not address that substantive issue in this appeal.

After the business relationship between Girdwood Mining and Comsult soured, the parties executed a Memorandum of Understanding in July 2004 terminating both prior agreements. Under the Memorandum, Girdwood Mining was to compensate Comsult for its performance under the Management Agreement by issuing a promissory note, and Girdwood Mining was to compensate Comsult for its performance under the Fundraising Agreement by awarding Comsult 60,000 shares of stock and a one-percent precious-metals royalty. In October 2007 Comsult sued Girdwood Mining, seeking payment on the unpaid promissory note, and Girdwood Mining confessed judgment in February 2008. Girdwood Mining did not argue as a defense to that suit that any of the agreements between Girdwood Mining and Comsult were illegal and unenforceable.

The current case began in November 2009 when Girdwood Mining sued Comsult [1] seeking to cancel Comsult's stock and royalty interests that compensated Comsult for the termination of the Fundraising Agreement under the Memorandum. Girdwood Mining argued that the relevant portions of the agreements are illegal under Alaska securities law and that they are therefore void and the interests granted thereunder are subject to rescission on equitable grounds.

The superior court granted summary judgment to Comsult on two grounds. The superior court held that AS 45.55.930(g), which provides that " [a] person who makes or engages in the performance of a contract in violation of [Alaska's securities law] . . . may not base a suit on the contract," barred suit by Girdwood Mining in this case. The superior court also held that Girdwood Mining's claims in this case were barred by res judicata

Page 197

in light of Girdwood Mining's failure to raise similar counterclaims or defenses in Comsult's suit against Girdwood Mining in 2007 and 2008. Girdwood Mining appeals the superior ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.