Opinion
No. 07-35806.
Argued and Submitted December 8, 2008.
Filed December 19, 2008.
Michael T. Schein, Kevin P. Sullivan, Esquire, Sullivan Thoreson, Seattle, WA, John G. Young, Young Denormandie, PC, Seattle, WA, for Plaintiff-Appellant.
Douglas J. Serdahely, Esquire, Patton Boggs LLP, Anchorage, AK, Drew Breuder, Esquire, John Daum, O'Melveny Myers, LLP, Los Angeles, CA, for Defendants-Appellees.
Appeal from the United States District Court for the District of Alaska, H. Russel Holland, District Judge, Presiding. D.C. No. CV-89-00095-HRH.
Before: O'SCANNLAIN, GRABER, and BYBEE, Circuit Judges.
This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3.
In Sea Hawk Seafoods, Inc. v. Exxon Corp. (In re Exxon Valdez), 484 F.3d 1098, 1102 (9th Cir. 2007), we held that Alaska law, not federal law, supplied the rate of prejudgment interest for the settlement agreement between Plaintiff Sea Hawk Seafoods and Defendant Exxon Mobil Corp. We remanded to the district court for further proceedings so it could decide whether the rate should be simple or compound. Id. at 1103.
Under Alaska law, statutory interest is simple interest unless the parties agree to compounding. Alaska Stat. § 09.30.070(a); Alyeska Pipeline Serv. Co. v. Anderson, 669 P.2d 956 (Alaska 1983) (per curiam). After taking evidence and hearing arguments, the district court found that the parties did not agree to compounding. That finding is not clearly erroneous. See Stephens v. City of Vista, 994 F.2d 650, 655 (9th Cir. 1993) (noting that when the interpretation of a contract includes review of factual extrinsic evidence, the findings of fact are reviewed for clear error).
Although a letter from Exxon to Sea Hawk stated in part that the parties "agreed that prejudgment interest will be compounded annually," that statement appeared in the context of a ruling by the district court that the federal interest rate applied. The remainder of the letter suggests that the parties made their entire agreement in the light of that ruling and, therefore, in the expectation that federal law governed.
Moreover, the district court did not abuse its discretion, see Engquist v. Or. Dep't of Agric, 478 F.3d 985, 1000 (9th Cir. 2007), in refusing to invoke judicial estoppel against Exxon. Although the court recognized that Exxon had previously taken the position that it had voluntarily agreed to compound interest, the court understood the agreement to be limited to federal law. That is, the court was not misled. See New Hampshire v. Maine, 532 U.S. 742, 750-51, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001).
AFFIRMED.
I respectfully dissent, because the district court clearly erred in finding that the agreement to pay compound interest depended on application of the federal rate of interest. First, Exxon's letter states without qualification that the parties had agreed to annual compounding of interest. Because the question whether state or federal law supplied the rate was being litigated actively, and had been reserved for appeal, the lack of qualification is significant. Second, under Alaska law, a contractual ambiguity is construed against the drafter, which was Exxon. Ledgends, Inc. v. Kerr, 91 P.3d 960, 963 (Alaska 2004) (per curiam) (appendix A). Third, the provision makes the most sense when applied to Alaska law, which requires an agreement to support compounding of interest.