After city failed to fulfill its promise to build access road across property owners’ land in exchange for property owners’ grant of utility easement to city, subject to obtaining permits and funding, property owners sued city, claiming that city had fraudulently induced them to sign the easement agreement, breached the agreement, and breached the covenant of good faith and fair dealing. Following a bench trial, the Superior Court ruled against property owners and they appealed.
The Supreme Court of Alaska held that:
- City’s obligation to build the road was unambiguously conditioned upon available funding and permitting approval;
- Evidence supported finding that city had made no misrepresentations of material fact to property owners;
- City did not breach the agreement; and
- City did not breach covenant of good faith and fair dealing.