Totem Marine Tug & Barge, Inc. v. Alyeska Pipeline Service Co.,

Facts

P entered into a contract with D under which P was to transport pipeline construction materials from Houston, Texas, to a designated port in southern Alaska, with the possibility of one or two cargo stops along the way. P was to have completed performance by approximately August 15, 1975. D represented that approximately 1,800 to 2,100 tons of regular uncoated pipe were to be loaded in Houston and that perhaps another 6,000 to 7,000 tons of materials would be put on the barge at later stops along the west coast. Upon the arrival of the tug and barge in Houston, however, P found that about 6,700 to 7,200 tons of coated pipe, steel beams, and valves, haphazardly and improperly piled, were in the yard to be loaded. This situation called for remodeling of the barge and extra cranes and stevedores and resulted in the loading taking thirty days rather than the three days which P had anticipated it would take to load 2,000 tons. The lengthy loading period was also caused in part by D's delay in assuring Totem that it would pay for the additional expenses, bad weather and other administrative problems. It soon became apparent that the vessels were traveling more slowly than anticipated because of the extra load. In response to D's complaints and with its verbal consent, on August 13, 1975, P chartered a second tug, the 'N. Joseph Guidry.' When the 'Guidry' reached the Panama Canal, however, D had not yet furnished the written amendment to the parties' contract. Afraid that D would not agree to cover the cost of the second tug, P notified the 'Guidry' not to go through the Canal. After some discussions in which D complained of the delays and accused P of lying about the horsepower of the first tug, D executed the amendment on August 21, 1975. The 'Guidry' had lost its preferred passage through the Canal and had to wait two or three additional days before it could go through. The three vessels encountered the tail of a hurricane which lasted for about eight or nine days and which substantially impeded their progress. On D's orders, the vessels pulled into port at Long Beach, California. D's agents commenced off-loading the barge, without P's consent, without the necessary load survey, and without a marine survey, the absence of which voided P's insurance. After much wrangling and some concessions by D, the freight was off-loaded. On or about September 14, 1975, D terminated the contract. The termination was affirmed a few days later at a meeting at which D officials refused to give a reason for the termination. P submitted termination invoices and began pressing the latter for payment. The invoices came to something between $260,000 and $300,000. D told P that they would look over the invoices but that they were not sure when payment would be made - perhaps in a day or perhaps in six to eight months. P was in urgent need of cash as the invoices. P's creditors were demanding payment, and without the case P would go bankrupt. P then turned over the collection to its attorney, Roy Bell, directing him to advise D of P's financial straits. Bell met with P officials in Seattle, and after some negotiations, P received a settlement offer from D for $97,500. P signed an agreement releasing D from all claims by P in exchange for $97,500. P then filed a complaint against D, which was subsequently amended. P sought to rescind the settlement and release on the ground of economic duress and to recover the balance allegedly due on the original contract. P alleged that D had wrongfully terminated the contract and sought miscellaneous other compensatory and punitive damages. D moved for summary judgment. The superior court granted D's motion for summary judgment. This appeal followed.

Issues

Rule of Law

Holding and Decision

Legal Analysis

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