from the Superior Court No. 3AN-17-04294 CI of the State of
Alaska, Third Judicial District, Anchorage, Frank A.
C. Pharr, Law Offices of John C. Pharr, P.C., Anchorage, for
Michael C. Geraghty, Oles Morrison Rinker & Baker LLP,
Anchorage, for Appellee.
Before: Bolger, Chief Justice, Winfree, Stowers, Maassen, and
parties entered into a construction subcontract that
contained a broad dispute resolution provision. When disputes
arose, the parties engaged in mediation as their subcontract
required, reaching a settlement agreement by which they each
"absolutely release[d] the other of and from any and all
claims, demands and obligations of any kind arising from [the
subcontract]." The settlement agreement, unlike the
subcontract, contained no dispute resolution provision.
weeks after settlement the subcontractor filed suit against
the contractor in superior court, seeking damages and an
order setting aside the settlement agreement on grounds that
the contractor had concealed facts that made it difficult for
the subcontractor to obtain releases essential to the
settlement. The contractor moved to dismiss, arguing that the
subcontractor's claims were subject to the
subcontract's dispute resolution provision. The superior
court granted the contractor's motion and awarded it
attorney's fees. The subcontractor appealed.
conclude that the case should not have been dismissed because
the parties, by the express language of their settlement
agreement, released each other from "any and all"
obligation to engage in dispute resolution as required by the
subcontract. We therefore reverse the superior court's
judgment and remand for further proceedings.
FACTS AND PROCEEDINGS
parties assumed the following facts to be true for purposes
of the motion to dismiss giving rise to this appeal.
early 2016 Jet Commercial Construction, LLC (Jet), an
Oklahoma corporation, entered into a contract with Kona
Grill, Inc., for the construction of a restaurant in
Honolulu, Hawaii. In May Jet entered into a subcontract with
SMJ General Construction, Inc. (SMJ), an Alaska corporation,
"to supply the materials and labor for the construction
of the building and other improvements." The subcontract
contained a dispute resolution provision that required the
parties to first mediate any dispute and then submit it to
arbitration if mediation was unsuccessful. The subcontract
also included a choice-of-law and venue provision designating
Oklahoma law and the courts of Cleveland County, Oklahoma for
any lawsuits "pertaining to the enforcement of the
provisions of this Agreement."
parties had a number of disputes during construction. SMJ
alleged, among other things, that after it bid on the basis
of one set of building plans Jet switched them for another;
that Jet failed to give SMJ the money necessary to pay its
sub-subcontractors and suppliers and paid some of them
directly, without SMJ's knowledge and with money Jet owed
to SMJ; and that Jet constantly revised the building plans
and ignored the change-order process set out in the
parties mediated their disputes as required by the
subcontract's dispute resolution provision. On January 5,
2017, with the assistance of a professional mediator, they
reached the following three-paragraph, handwritten settlement
agree as follows:
(1) Each party hereby absolutely releases the other of and
from any and all claims, demands and obligations of any kind
arising from contract of May 2016 regarding Kona Grill,
Honolulu project. SMJ will execute and deliver Release of all
claims and waiver of liens. Mr. Chang will sign same
individually. Counsel for Jet to prepare release.
(2) Jet will pay to SMJ the sum of $150, 000.00 if SMJ will
deliver to Jet within 30 days of today's date a fully
executed release of all claims and lien waiver from Dong Hwan
Kim individually and Hyan [sic] Yang Construction, said
release & waiver to be notarized and on the form prepared
by Jet's counsel.
(3) This yellow memorandum reflects the essential &
material terms of the parties' agreement and will be
followed by a more formal memorialization of same, to be
prepared by Jet's counsel.
Chang was SMJ's president, and Han Yang Construction,
owned by Don Hwan Kim, was one of SMJ's
sub-subcontractors on the project. Neither Jet nor SMJ
asserts that "a more formal memorialization of the
handwritten agreement, as contemplated by paragraph 3, was
after the agreement was reached, SMJ learned of conduct by
Jet, preceding the mediation, that impaired SMJ's ability
to obtain the release from its sub-subcontractor, Han Yang
Construction, as required by paragraph 2 of the settlement
agreement. According to SMJ, Jet falsely informed a city
inspector that Han Yang Construction had contracted directly
with Kona Grill. SMJ alleged that Jet created a fictitious
agreement to show this contractual relationship, signed the
fictitious agreement on behalf of Kona Grill as the
"Owner's rep" when it lacked the authority to
do so, and filed the fictitious agreement with the City of
Honolulu. SMJ asserts that Jet "concealed material facts
from SMJ [during the mediation], namely that its fraudulent
actions rendered the condition precedent to the settlement
impossible for SMJ to comply with."
weeks after the mediation, SMJ filed a complaint in superior
court. The complaint alleged three causes of action: fraud
and misrepresentation, breach of the covenant of good faith
and fair dealing, and negligence. It sought a ruling that the
settlement agreement was void and "[a] money judgment
against [Jet] in the principal amount of $782, 061.48."
unusual difficulty effecting service of process on Jet in its
home state of Oklahoma. But Jet, through counsel, eventually
filed a motion to dismiss pursuant to Alaska Civil Rule
12(b)(3) (improper venue) and (6) (failure to state a claim),
while asserting a right to contest personal jurisdiction
later. Jet argued that SMJ's claims were not properly
before the court because of the subcontract's dispute
resolution provision and the requirement that suits be filed
in Oklahoma. In opposition, SMJ argued that the parties could
no longer ...