## Facts

- Totem Marine Tug & Barge, Inc., a newly formed Alaska carrier, contracted with Alyeska Pipeline Service Company in June 1975 to transport pipeline construction materials from Houston to Alaska with possible West Coast stops.
- Totem alleged Alyeska represented a smaller initial Houston load and additional tonnage to be picked up later, but Totem encountered a much larger and disorganized load in Houston, requiring barge modifications and extra loading resources.
- Loading took far longer than expected, and additional delays occurred during transit, including the need for a second tug for the heavier load.
- Before delivery to Alaska, Alyeska directed Totem to dock in San Pedro, California, unloaded the cargo, and terminated the contract.
- Totem billed Alyeska roughly $260,000–$300,000 for services performed.
- Totem alleged it was in severe financial distress, needed immediate cash to pay creditors and avoid bankruptcy, and that Alyeska knew of this condition.
- Totem alleged Alyeska stated payment might be delayed six to eight months and offered $97,500 on a take-it-or-leave-it basis conditioned on a broad release of all claims.
- Totem accepted the $97,500 and executed the release, then sued to rescind the settlement and pursue contract claims, asserting the release was procured by economic duress.

## Issues

1. Whether the settlement and release were voidable for economic duress.
2. Whether genuine issues of material fact on economic duress made summary judgment enforcing the release improper.

## Decision

- The Alaska Supreme Court reversed the grant of summary judgment for Alyeska and remanded.
- The court held that the record, viewed in the nonmovants’ favor, presented genuine issues of material fact on each element of economic duress.
- Because credibility and competing inferences could not be resolved on summary judgment, the release could not be enforced as a matter of law at that stage.

## Legal Principles

- A contract release is voidable for economic duress when: (1) the victim involuntarily accepts the other party’s terms, (2) the victim has no reasonable alternative, and (3) the circumstances result from the other party’s wrongful or coercive acts, not merely hard bargaining or market pressure.
- “Wrongful” conduct for economic duress may include deliberately withholding or delaying payment (including in the shadow of a disputed or asserted obligation) to exploit the other party’s financial distress and force a discounted settlement.
- On summary judgment, the court must view evidence and reasonable inferences in favor of the nonmoving party and may not weigh credibility or choose among competing factual inferences.

## Conclusion

The Alaska Supreme Court held that a settlement release may be avoided for economic duress when the evidence could support findings of involuntary assent, lack of reasonable alternatives, and coercive or wrongful conduct, and it ruled that such disputed facts required trial rather than summary enforcement of the release.


Totem Marine Tug & Barge, Inc. v. Alyeska Pipeline Serv. Co., 584 P.2d 15 (Alaska 1978)