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McCormick v. Chippewa, Inc.

Supreme Court of Alaska

July 30, 2014

BRENT MCCORMICK, Appellant,
v.
CHIPPEWA, INC. and LOUIS OLSEN, Appellees

Appeal from the Superior Court of the State of Alaska, Third Judicial District, Anchorage, Paul E. Olson, Judge. Superior Court No. 3AN-11-12131 CI.

Gerald W. Markham, Kodiak, for Appellant.

Laura L. Farley, Farley & Graves, P.C., Anchorage, for Appellees.

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

OPINION

Page 346

WINFREE, Justice.

I. INTRODUCTION

Parties to a settlement agreement later disagreed on a material term of the agreement;

Page 347

they sought to enforce the agreement based on their respective understandings of the term. During summary judgment proceedings, one party asked for time to conduct discovery regarding the parties' intent. The superior court granted summary judgment to the other party and denied the discovery request as moot. Because it was an abuse of discretion not to allow discovery before ruling on the summary judgment motion, we vacate the summary judgment order and remand so that appropriate discovery may be conducted.

II. FACTS AND PROCEEDINGS

A. Injury Complaint, Settlement Negotiations, And Settlement-Enforcement Complaint

On August 14, 2007, Brent McCormick suffered a back injury while pushing a net reel aboard the F/V Chippewa, owned by Chippewa, Inc. The day after his injury McCormick was treated with ibuprofen. Later that night rough seas caused him to fall out of his bunk and hit his head. McCormick continued to suffer back pain and dizziness and later was treated by medical specialists in Anchorage.

In August 2010 McCormick filed a complaint against Chippewa, Inc. and Louis Olsen,[1] the vessel's captain, alleging " unseaworth[i]ness" of the F/V Chippewa and negligence in failing to ensure workplace safety and provide proper medical care. Chippewa had a liability insurance policy with a $500,000 per occurrence limit, including a " cannibalizing" provision specifying that costs and expenses spent " investigating and/or defending any claim" would be deducted from the policy limit.

In early January 2011 McCormick's lawyer corresponded with an insurance claims adjuster, discussing the policy's terms. In a later email to McCormick's lawyer, the claims adjuster defined the " policy limit" as $500,000. McCormick's lawyer then hand-delivered a settlement offer to the claims adjuster, proposing to:

unconditionally settle all aspects of all claims held by my client Brent McCormick . . . for any and all injuries occurring or arising out of . . . McCormick's 2007 employment on the F/V Chippewa . . . in exchange for the " policy limits" of the [insurance policy] . . . .

The settlement offer described the claims as arising out of " two accidents" suffered by McCormick on August 14 and 15, 2007.

Chippewa's lawyer responded to the settlement offer on March 3, writing to " accept [McCormick's] demand for payment of the remaining policy limits . . . which has a Protection & Indemnity face limit of [$500,000]." The acceptance letter specified that " [a]t this point, we estimate the remaining limits are approximately $370,000." A proposed settlement agreement was attached.

McCormick's lawyer later sent Chippewa's lawyer a letter noting that he had indicated during a March 21 telephone conversation that he " viewed the policy limits in the . . . policy to be different than those [Chippewa's lawyer] estimated in [her] letter of March 3." McCormick's lawyer stated that he understood Chippewa's lawyer to have " responded [in that conversation] that regardless, it was [Chippewa's] intention in [the] letter of March 3 . . . to pay 'limits' what ever they may be (which was [McCormick's] offer's intent)." McCormick's lawyer indicated in his letter that deducting any further expenses and costs from the policy based on investigating and defending the claim should cease because " we have a settlement ...


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