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K & K Recycling11/14/2003
's alleged misconduct. K&K;challenges the court's denial of its summary judgment motions on these issues as well. In addition, AGC argues that it was the prevailing party in the case and should have been awarded attorney's fees. We affirm all of the superior court's rulings on these matters.
1. The court did not err in denying AGC summary judgment on whether the assignment was a breach of contract.
The statutory provision in dispute between AGC and K&K;concerning assignment is AS 45.02.210(b), which states that a contract for sale of goods cannot be assigned if "the assignment would materially change the duty of the other party, increase materially the burden or risk imposed on the other party by the contract, or impair materially the chance of obtaining return performance." AGC contends that the assignment did not materially change anything, since AGC's only duties were to provide a bill of sale when K&K;tendered performance and to provide reasonable access so the dredge could be moved, while the only difference for K&K;was that it had to tender to Seuffert instead of to AGC.
The evidence certainly supported K&K;s contention that the test of AS 45.02.210(b) was met. AGC was aware that Seuffert had a substantially different motive than AGC with respect to the dredge, since Seuffert considered it an asset to be kept for use as a tourist attraction instead of a liability to be eliminated. AGC thus knew that Seuffert had every incentive to burden K&K;s performance, which Seuffert did by increasing K&K;s costs, delays, and risks. The jury therefore justifiably concluded that AGC's assignment to Seuffert was a breach of contract. The superior court did not err in denying AGC summary judgment on this question.
2. There was no novation.
Generally, an assignor remains liable on an assigned contract. AGC argues, however, that it should not be held liable, and that the court erred in failing to grant its summary judgment motion arguing as much, because the agreement between Seuffert and K&K;constituted a novation. We disagree.
"A novation is a substituted contract that includes as a party one who was neither the obligor nor the obligee of the original duty." As with accord and satisfaction, any breach of a novation provides no right of action on the old duty. A novation must have "all of the essential elements of an original contract and also an intention that the agreement operate as an immediate discharge of the first contract."
AGC locates the novation not only in the "pipe yard" agreement, but also in K&K;and Seuffert's correspondence in August and September 1998 making changes to contract terms such as the performance bond requirement, the obligation to provide a bill of sale within ten days of tender, and the date by which K&K;was to remove the dredge equipment and facilities. AGC contends that these were negotiations for substitute performance and that Seuffert and K&K;s agreement discharged AGC.
AGC's novation argument fails for the same reason Seuffert's accord and satisfaction argument fails - there was no evidence of intent to supersede the original contract. K&K;started dealing with Seuffert only after it received AGC's unequivocal rejection of its tender. K&K;characterizes its contacts and compromises with Seuffert as its efforts to mitigate the harm caused by AGC's breach. K&K;repeatedly conditioned its dealings with Seuffert and AGC by reserving all its rights.
K&K;s actions are consistent with its explanation of doing what it was forced to do once AGC refused to be involved. K&K;was merely modifying the contract terms as
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