Totem Marine Tug and Barge v. Alyeska Pipeline Co Case Brief

Summary of Totem Marine Tug & Barge v. Alyeska Pipeline Co
S Ct AK 584 P 2d 15 [1978]

Avoidance of the K: Duress

Relevant Facts: Pl, Totem, entered into a K w/ Df, Alyeska, to transport pipeline construction materials from TX to AK. Pl chartered a barge and a tug to accomplish this. Upon arrival Pl discovered that Df had mislead Pl about the volume of material. In waiting for assurances and an amendment to the K, Pl’s second tug was delayed getting through Panama Canal, the transport dealt w/ a hurricane, and then Df unloaded the materials at Long Beach w/o Pl’s consent which nullified Pl’s insurance. Df terminated the K w/o providing a reason and stated payment would be in either 1 day or w/i 6-8 mos. Totem received a settlement and signed a release for $97,500 when the debt amt was btwn $260K and $300K.

Legal Issue(s): Whether any genuine issues of material fact relating to whether there had been economic duress which would permit avoidance of the release precluded summary judgment for defendants exist ?

Court’s Holding: Yes

Procedure: Sup Ct granted Summary DF; Pl appealed; S. Ct of AK Reversed and remanded

Law or Rule(s): Duress exists where 1) one party involuntarily accepted the terms of another; 2) circumstances permitted no other alternative; 3) such circumstances were the result of coercive acts of the other party. Economic D uses a RP standard to determine if Freewill was overcome.

Court Rationale: One essential element of economic duress is that the Pl show the other party, by wrongful acts or threats, intentionally caused him to involuntarily enter into a particular transaction. In many cases a threat to breach K, or w/h payment of debt = wrongful act. Some cts require bad faith accompany the wrongful act. Economic D does not exist merely b/c a person has been the victim of a wrongful act, in addition the victim must have no reasonable alternative choice but to agree to the other party’s terms, or that he had no adequate remedy if the threat were to be carried out. An available alternative or remedy may not be adequate where the delay involved in pursuing the remedy would cause immediate and irreparable loss to one’s economic or business interest. As a matter of law, and upon exam of the materials presented in opposition to Df’ M 4 Summary, Pl has made a sufficient showing as to each of the elements of economic D to w/stand that motion.

Plaintiff’s Argument: Df deliberately w/h payment knowing that Pl had no choice but to accept an inadequate sum in settlement of that debt, thus b/c of necessity Pl involuntarily accepted an inadequate settlement and executed a release.

Defendant’s Argument: Totem, via V.P. Stair, executed a release when Pl was represented by counsel at the negotiating settlement conference, fully aware of the legal consequences.

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