In June 1975, Totem Marine Tug & Barge, Inc., a closely held Alaska corporation that began operations in March 1975, entered into a contract with Alyeska Pipeline Service Co. to transport pipeline construction materials from Houston, Texas, to a designated port in southern Alaska. Richard Stair, vice-president of Totem, arranged charters of the barge Marine Flasher and the tug Kirt Chouest, financed in part by loans and guarantees from Stair individually and from Pacific, Inc., a corporation of which Stair was principal stockholder and officer.
Performance difficulties began immediately upon arrival in Houston, where Alyeska presented approximately 6,700 to 7,200 tons of coated pipe, steel beams, and valves instead of the anticipated 1,800 to 2,100 tons of regular un-coated pipe. The unexpected volume and condition of the cargo required barge remodeling, extra cranes and stevedores, and extended loading to thirty days. After departure the vessels traveled more slowly than expected; Totem chartered a second tug, the N. Joseph Guidry, with Alyeska's verbal consent, but the Guidry waited additional days at the Panama Canal until Alyeska executed a written contract amendment on August 21, 1975. The vessels then encountered the tail of a hurricane lasting eight or nine days.
Upon reaching California, Alyeska ordered the vessels into Long Beach rather than San Pedro and began off-loading the barge without Totem's consent, without a load survey, and without a marine survey that voided Totem's insurance. After off-loading, Alyeska terminated the contract on or about September 14, 1975.
Totem submitted termination invoices totaling between $260,000 and $300,000. An Alyeska official indicated payment might occur in a day or in six to eight months. Facing creditor demands on 10- to 30-day schedules and impending bankruptcy, Totem referred collection to attorney Roy Bell. After negotiations in Seattle, Totem received and accepted a $97,500 settlement offer; on November 6, 1975, Stair signed a release of all claims against Alyeska.
On March 26, 1976, Totem, Stair, and Pacific filed a complaint, later amended, seeking rescission of the release on economic-duress grounds and recovery of additional contract amounts. Alyeska moved for summary judgment on the release. The superior court granted the motion on November 30, 1976. Totem appealed, and a dispute arose over whether the Stair deposition, extensively referenced in the summary-judgment memoranda below, formed part of the appellate record.
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