Reeves v. Alyeska Pipeline Service Co.

Viewed in Reeves’s favor, the evidence supported an inference that Burke promised confidentiality and promised that Alyeska would not use Reeves’s proposal without entering a deal with him. Reeves testified that Burke said the idea was “between us,” requested the proposal, and later said Alyeska was going to proceed with the deal. Those facts could establish a distinct agreement supported by Reeves’s disclosure of his idea.

The statute of frauds did not apply to this alleged disclosure agreement. The agreement could be performed within one year because, if Alyeska elected to implement the idea, the contemplated arrangement was to be made by the 1991 tourist season. In addition, Reeves fully performed his side of the disclosure agreement when he disclosed the idea.

The court explained that protection for ideas depends on the theory of recovery. Patent and copyright law did not protect Reeves’s unpatented business idea itself, but state contract and contract-like theories may protect a person who discloses or develops an idea in circumstances warranting compensation. The court did not require novelty or originality to dispose of Reeves’s disclosure-based express-contract claim, because Reeves characterized his consideration as his services and disclosure rather than ownership of the idea as property.

An oral twenty-year lease falls squarely within Alaska’s statute of frauds because it concerns a lease longer than one year and could not be performed within one year. Reeves therefore needed to establish an exception to enforce the alleged lease agreement.

Reeves did not fully perform the lease agreement. His disclosure of the visitor-center idea was consideration for the separate disclosure agreement, not performance of his purported duties under the lease. Nor did submitting the proposal constitute full performance: the proposal stated that Reeves proposed to lease the site, showing that it contemplated a future agreement, and Reeves never began operating the center, paying ten percent of gross receipts, or performing the other claimed lease obligations.

Promissory estoppel did not prevent Alyeska from invoking the statute of frauds. Reeves’s disclosure and written proposal occurred before the alleged lease or promise to reduce the agreement to writing, so they could not have been induced by those later promises. His decision not to hire a lawyer was not a substantial detrimental change of position, particularly because there was no evidence Alyeska would have signed an agreement had Reeves presented one.

The court adopted the prevailing rule that a promise to execute a written memorandum of an agreement subject to the statute of frauds is itself subject to the statute. Otherwise, a party could evade the statute simply by recasting an unenforceable oral agreement as an oral promise to put that agreement in writing.

Even assuming Burke’s alleged promise to have Alyeska’s lawyers draw up documents included a promise to execute them, the promise remained tied to the long-term lease. Because no signed writing satisfied the statute, Reeves could not recover on a separate memorialization-agreement theory.

An implied-in-fact contract rests on the parties’ inferred intent, as shown by their conduct and the circumstances of disclosure. The court distinguished unsolicited ideas that are involuntarily received, which ordinarily create no contract, from solicited submissions, where a request for an idea can imply a promise to pay if the recipient uses it.

Reeves alleged that Burke asked to hear the idea and later requested a written proposal. A fact-finder could regard those actions, coupled with Alyeska’s later implementation of a visitor center, as an implied promise to compensate Reeves for his disclosure. But a fact-finder could also conclude that Reeves volunteered the idea before Burke took any action suggesting payment. That factual dispute precluded summary judgment.

The court chose the California approach rather than the stricter New York rule and declined to require novelty or originality for an implied-in-fact contract claim. Parties may bargain for the disclosure, timing, presentation, or development of even a non-novel idea, and courts generally do not reassess the adequacy of the consideration the parties chose.

Promissory estoppel requires a promise that induces a substantial and foreseeable change of position, plus enforcement necessary to avoid injustice. Reeves’s disclosure substantially changed his position because, once Alyeska knew the idea, his ability to negotiate terms for it was materially reduced.

A promise of confidentiality and a promise to include Reeves in any use of the idea could foreseeably induce disclosure. Reeves’s testimony created factual disputes over whether Alyeska made those promises and whether they actually induced his disclosure. The interest-of-justice inquiry likewise depended on factual issues ordinarily unsuitable for summary judgment.

The claimed lease and memorialization promises could not support promissory estoppel based on disclosure because those promises necessarily came after Alyeska learned the idea. A promise made after disclosure could not have induced Reeves to disclose it.

A quasi-contract claim requires that the plaintiff confer a benefit, the defendant appreciate it, and the defendant retain it under circumstances making nonpayment inequitable. It is a judicially created restitution obligation, not an agreement between the parties.

To recover for the value of an idea itself under a property-based theory, Reeves had to show that the idea was sufficiently novel or original to be treated as something he could exclusively possess and confer. He could not do so: Alyeska had received a similar visitor-center suggestion from its employee club in 1987 and already operated a visitor center in Valdez. Burke’s personal ignorance of the earlier proposal did not make the concept novel to Alyeska.

But Reeves also claimed that Alyeska benefited from his work rather than merely from ownership of the idea. Burke allegedly requested a proposal, Reeves had experience in Fairbanks tourism, and Alyeska had previously rejected a similar concept before receiving Reeves’s presentation. A fact-finder could conclude that Reeves’s proposal, timing, endorsement, or specialized services provided a benefit that Alyeska unjustly retained without compensation.

Every Alaska contract carries an implied covenant of good faith and fair dealing. Because Reeves presented evidence from which a fact-finder could find a disclosure agreement, the covenant claim tied to that agreement could not be dismissed on the ground that no contract existed.

The superior court had dismissed Reeves’s fraud and negligent-misrepresentation claims for lack of detrimental reliance. But Reeves’s disclosure of the idea supplied evidence of detrimental reliance on alleged promises of confidentiality and participation. Those tort claims therefore required remand to the extent they arose from the disclosure agreement.

The court affirmed dismissal of the corresponding claims tied to the lease and memorialization theories, because Reeves had not shown reliance sufficient to overcome the statute of frauds or otherwise establish those agreements.

Reeves requested calendars, diaries, and notes referring or relating to meetings or discussions with him. Alyeska produced a redacted calendar and explained that it removed material unrelated to the request and to the litigation.

The superior court reasonably accepted Alyeska’s interpretation of the scope of the request. Because the record did not show an abuse of discretion in permitting redaction of unrelated entries, the Alaska Supreme Court affirmed the discovery ruling.