The Alaska Supreme Court remanded to the trial court to determine whether the parties reached agreement in their settlement on the number of occurrences. McCormick v. Chippewa, Inc., 2020 Alaska LEXIS 20 (Alaska March 20, 2020).
Brent McCormick was injured while working aboard the vessel owned by Chippewa, Inc. McCormick sued Chippewa.
Chippewa had a policy with a $500,000 per-occurrence limit less defense costs. McCormick's attorney, Gerald Markham, sent Chippewa an offer to settle the lawsuit "for any and all injuries occurring or arising out of Mr. McCormick's employment on the vessel in exchange for the policy limits" of Chippewa's insurance policy. The offer described two accidents McCormick suffered during this time. Chippewa accepted the "demand for payment of the remaining policy limits."
Thereafter, Markham called Chippewa's attorney, Laura Farley, to discuss the settlement. The next day, he sent a letter to Farley indicating a dispute existed regarding the number of occurrences under the policy. The letter suggested that Farley had stated that the insurer accepted McCormick's policy limits offer to pay limits "whatever they might be." Markham attached a signed settlement agreement, releasing Chippewa from liability "in consideration of the remaining policy limits available." Markham dismissed the lawsuit.
Chippewa sent McCormick a letter stating that the remaining policy limit after deduction of defense costs was $424,040.05, which would be paid to McCormick. McCormick did not respond to the letter.
McCormick then filed a new lawsuit, seeking enforcement of the purported settlement agreement. In a motion for partial summary judgment, McCormick clarified that he believed there had been three "occurrences," under the policy, which would triple the available policy limits. The trial court granted Chippewa's motion for summary judgment, concluding the parties had entered into a binding settlement agreement, leaving only an issue of interpreting the phrase "remaining policy limits" in the agreement,. The court concluded that "remaining policy limits" referred to the remainder of a single limit of $500,000, not the sum of multiple occurrences with each having a $500,000 limit.
The Alaska Supreme Court reversed. The record indicated that the expressed intent of the parties regarding an essential term of the purported settlement agreement was in dispute. Markham submitted an affidavit detailing the phone call between the attorneys. He stated his belief that there was more than one occurrence, but the attorneys agreed to settle while leaving the number of occurrences unresolved. In light of this account, when McCormick signed the purported settlement agreement, it could have been with the understanding that the parties had not yet decided on the limits. Markham's account was contradicted by Farley, who testified in an affidavit and deposition that the parties never discussed the number of occurrences during the call.
Given the interplay between the number of occurrences and policy limits, the conflicting evidence abut the phone call presented a genuine issue of material fact. The case was remanded to allow the trier of fact to determine whether the parties reached an agreement and, if so, what terms they agreed to.