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Danco Exploration v. DNR (10/17/96), 924 P 2d 432
Notice: This opinion is subject to correction before publication in
the Pacific Reporter. Readers are requested to bring errors to the
attention of the Clerk of the Appellate Courts, 303 K Street,
Anchorage, Alaska 99501, phone (907) 264-0607, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
DANCO EXPLORATION, INC., )
) Supreme Court No. S-7012
) Superior Court No.
v. ) 3AN-93-7009 CI
STATE OF ALASKA, DEPARTMENT ) O P I N I O N
OF NATURAL RESOURCES, )
Appellee. ) [No. 4414 - October 17, 1996]
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Glen C. Anderson, Judge.
Appearances: Robert C. Erwin, Law Offices of
Robert C. Erwin, Anchorage, for Appellant.
Virginia B. Ragle, Assistant Attorney General,
Bruce M. Botelho, Attorney General, Juneau,
Before: Compton, Chief Justice, Rabinowitz,
Matthews, Eastaugh, Justices, and Shortell,
Justice pro tem.
This case concerns the claim of Danco Exploration, Inc.,
to interest on funds submitted in connection with seven State oil
and gas tracts on which Danco was declared high bidder.
In a State lease sale Danco submitted a deposit of money
equal to twenty percent of its bonus bids. On February 12, 1993,
the Division of Oil and Gas of the Department of Natural Resources
(DNR) notified Danco that it was the winning bidder for the seven
tracts and that it must submit executed leases and stipulations and
the balance of the bonus bids within thirty days. Danco timely
paid the balance of the bonus bids, but was one day late in
returning some of the other documents. On April 19, 1993, DNR
notified Danco that the leases would not be issued, that the twenty
percent deposit, $77,718.24, was forfeited, and that the balance of
the bids would be returned to Danco.
Danco promptly requested reconsideration. This request
was denied on May 11, 1993, by the director of the division. Danco
appealed the director's decision on June 7, 1993, to the
commissioner of DNR, who, on June 30, 1993, upheld the decision.
Meanwhile, on May 10, 1993, DNR mailed Danco a check in
the sum of $343,763.48, representing the bonus bids paid by Danco,
less the amount forfeited. This was received by Danco some time
before May 18, 1993. Danco, however, did not cash the check.
Instead, when Danco filed its appeal to the commissioner it
included the uncashed check as an appeal document. The
commissioner returned the check to Danco with his decision
upholding the director.
Danco then filed an appeal in the superior court, while
at the same time seeking a rehearing before the commissioner. The
commissioner denied Danco's petition for rehearing on August 27,
1993. Danco initially claimed that when this occurred it cashed
the check. The record reflects confusion on this point; for on
August 30, 1993, DNR issued a stop payment order on the check and
ordered a new check. The new check was tendered to Danco on
September 21, 1993, and promptly cashed.
On October 10, 1994, the superior court reversed the
commissioner's decision and ordered the commissioner to issue the
leases upon receipt of the funds which had been refunded to Danco,
plus interest. Credit would be given for the forfeited deposit.
Danco then moved for an award of interest on the deposit from the
date of forfeiture until the date of the superior court's decision
and on the balance of the bonus payment from the time of forfeiture
until Danco cashed the check. The State opposed this motion. The
superior court ruled in favor of the State. From this ruling Danco
"[O]nly the legislature has the power to direct the
assessment of interest against the sovereign." Stewart & Grindle,
Inc. v. State, 524 P.2d 1242, 1245 (Alaska 1974). It follows that,
except where the constitution directs otherwise, interest may not
be assessed against the State except where interest is specifically
authorized by the legislature. Id. ("[U]nless interest is specif-
ically authorized by legislative enactment, it may not ordinarily
be assessed against that State in any action.").
Danco argues with respect to the bid deposit that AS
09.50.280 authorizes the award of interest. That section provides:
If judgment is rendered for the
plaintiff, it shall be for the legal amount
found due from the state with legal interest
from the date it became due and without
Section .280 only applies where AS 09.50.250 establishes a
substantive cause of action. Stewart & Grindle, 524 P.2d at 1245.
Section .250, in turn, provides in relevant part:
A person or corporation having a
contract, quasi-contract, or tort claim
against the state may bring an action against
the state. A person who may present the claim
under AS 44.77 may not bring an action under
this section except as set out in AS
44.77.040(c). A person who may bring an
action under AS 36.30.560 - 36.30.695 may not
bring an action under this section except as
set out in AS 36.30.685.
Danco argues this case can be characterized as either a
tort case for conversion or a contract claim and that either way
the claim is within AS 09.50.250. Since Danco did not purport to
bring this claim under section .250 its claim must be that it could
have done so, and that it would be unduly technical to deny it
interest based on a mere matter of form. We examine Danco's claim
in this light.
Danco's claim that it could have sued the State in tort
or in contract lacks merit. Oil and gas lessees and lease bidders
which have grievances with the State must pursue the administrative
procedures provided by 11 AAC 02.010, et seq. See Standard Alaska
Production Co. v. State, 773 P.2d 201, 206-208 (Alaska 1989).
Under these procedures the commissioner is the final administrative
adjudicator. 11 AAC 02.010(c). A party aggrieved by the decision
of the commissioner may appeal to the superior court "in accordance
with the rules of court and to the extent permitted by applicable
law." 11 AAC 02.010(d). The rules governing such appeals are set
forth in Part VI of the Rules of Appellate Procedure. 11 AAC
02.010 appeals are not encompassed within AS 09.50.250. A party
who brings an appeal from a commissioner's decision to the superior
court is bound by the result of such an appeal and may not maintain
a separate action under section .250. 11 AAC 02.010(d). Thus
Danco could not have maintained a section .250 action for the
Concerning the balance of the bonus bids, Danco has
presented no comprehensible argument on which an award of interest
might be based. (EN1) Thus we consider Danco's argument concerning
interest on the balance of the bonus bids to be waived. See
Adamson v. University of Alaska, 819 P.2d 886, 889 n.3 (Alaska
1991) ("[W]here a point is given only a cursory statement in the
argument portion of a brief, the point will not be considered on
appeal."); L.E. Spitzer Co. v. Barron, 581 P.2d 213, 218 (Alaska
1978) (a party waived an argument to which he gave only cursory
treatment and for which he cited no authority); Wernberg v.
Matanuska Elec. Ass'n, 494 P.2d 790, 794 (Alaska 1972) (although an
argument was raised, the issue had only been given cursory
treatment and was waived where no citation to any authority was
1. Danco's argument is merely conclusory. It states: "The State
of Alaska is liable for such interest for depriving Danco the use
of the money for such period of time [until the check was returned
the second time by the division] because the State had acted
wrongfully in refusing to enter into the leases in question." In
its reply brief Danco adds a new theory based on 11 AAC 82.475
applicable to the return of deposits of unsuccessful bidders (which
must be accomplished within five working days after a lease sale).
This argument lacks merit for Danco was not an unsuccessful bidder
and thus the regulation does not apply. Further, new arguments
presented for the first time in reply briefs are considered waived.
See Sumner v. Eagle Nest Hotel, 894 P.2d 628, 632 (Alaska 1995)
("This issue has been waived because it was raised first in the
reply brief."); Conam Alaska v. Bell Lavalin, Inc., 842 P.2d 148,
158 (Alaska 1992) ("[A] reply brief may not raise contentions not
previously raised in either the appellant's or appellee's
briefs."); Alaska Appellate Rule 212(c)(2) ("This [reply] brief may
raise no contentions not previously raised in either the
appellant's or appellee's briefs.").