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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Guttchen v. Gabriel (6/14/2002) sp-5581

Guttchen v. Gabriel (6/14/2002) sp-5581

     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) 264-0608, fax (907) 264-0878,
     e-mail corrections@appellate.courts.state.ak.us.


            THE SUPREME COURT OF THE STATE OF ALASKA


PETER and BAERBEL GUTTCHEN,   )
                              )    Supreme Court No. S-9648
               Appellants,     )
                              )    Superior Court No.
     v.                       )    3KO-85-563 CI
                              )
GREGORY and EDITHANNE         )    O P I N I O N
GABRIEL,                      )
                              )    [No. 5581 - June 14, 2002]
               Appellees.          )
________________________________)


          Appeal  from the Superior Court of the  State
          of  Alaska, Third Judicial District,  Kodiak,
          Milton M. Souter, Judge.

          Appearances:   Steve Gray,  Steven  P.  Gray,
          P.C.,  Kodiak,  for Appellants.   Michael  D.
          White  and Michael A. Grisham, Patton  Boggs,
          LLP, Anchorage, for Appellees.

          Before:    Fabe,  Chief  Justice,   Matthews,
          Eastaugh, Bryner, and Carpeneti, Justices.

          BRYNER, Justice.


I.   INTRODUCTION

          Peter  and  Baerbel  Guttchen  sought  leave  under  AS

09.35.020  to  execute on a judgment lien more  than  five  years

after  entry of the judgment; the lien pertained to a  parcel  of

land  that the judgment awarded to Gregory and Edithanne  Gabriel

and secured the judgment's award of costs and attorney's fees  in

favor of the Guttchens.  The superior court denied the Guttchens'

motion  for  execution,  ruling that  the  Gabriels'  intervening

bankruptcy  had rendered the lien invalid, since, in the  court's

words,  "[o]nce  the valid underlying judgment is  discharged  in

bankruptcy, it cuts the legs out from under the lien." We reverse

and  remand  with  directions  to grant  the  Guttchens'  motion,

holding  that  the  superior  court  erred  in  dismembering  the

Guttchens'  lien  and  that  undisputed  evidence  satisfies   AS

09.35.020's  demand for a "just and sufficient reason"  to  allow

execution.1

II.  FACTS AND PROCEEDINGS

          This  case  began as a dispute between three parties  -

Baerbel  and  Peter Guttchen, Edithanne and Gregory Gabriel,  and

Joseph Brodman - over the ownership of a small, remote parcel  of

land  on  Raspberry  Island, near Kodiak.   The  litigation  that

ensued  eventually  led to two unpublished  decisions  from  this

court.2   In  the  first, we summarized the background  facts  as

follows:

               Joseph  Brodman owned 4.8 acres  of
          land on Raspberry Island.  He agreed  to
          give  1.5 acres of the parcel to Gregory
          Gabriel,   in  exchange  for  electrical
          supplies Gabriel had given him.  Brodman
          executed  a quitclaim deed, intended  as
          security   only,  in  favor   of   [the]
          Gabriels, conveying to them an undivided
          one-half   interest  in  the  4.8   acre
          parcel.    Prior   to   delivering   the
          quitclaim   to  the  Gabriels,   Brodman
          executed a lease to the Guttchens which,
          on  its  face, conveyed the  entire  4.8
          acres.   Brodman and the Guttchens  also
          executed, but did not record, a separate
          agreement   acknowledging    that    the
          Gabriels  had been given the 1.5  acres.
          Mr.   Gabriel  discovered  the  recorded
          Guttchen lease.  Difficulties among  the
          three  parties  ensued,  culminating  in
          this lawsuit.
          
               The jury trial resulted in verdicts
          for  Brodman  against the Gabriels,  the
          Guttchens against the Gabriels, and  the
          Guttchens  against  Brodman.   The  jury
          awarded   Brodman  and   the   Guttchens
          considerable punitive damages  from  the
          Gabriels.  The court quieted title[ ] in
          Brodman, subject to the Gabriels' "right
          of  possession" of the 1.5  acres.  .  .
               .[3]
          
          Our  first  decision  vacated  the  award  of  punitive

damages,  amended  the  judgment to  grant  the  Gabriels  a  fee

interest  in  1.5 acres, and directed the parties  to  "have  the

property  surveyed  and  to  establish  boundaries  for  the  two

parcels"; we recognized, however, that the Kodiak Island  Borough

might  refuse to allow the property to be subdivided.4   We  also

vacated  the original award of prevailing-party attorney's  fees,

leaving it to the trial court to reconsider the issue on remand.5

          On  remand, the superior court modified the judgment as

directed  and,  by a judgment entered July 5, 1989,  awarded  the

Guttchens  $7,526.02  in attorney's fees and  costs  against  the

Gabriels.   The judgment specifically directed the  Gabriels  and

Brodman  to  survey  the parcel and establish  boundaries  within

sixty  days.  The Guttchens recorded the judgment in  the  Kodiak

Recording District office on July 17, 1989, perfecting their lien

on the Gabriels' 1.5 acre parcel.

          The  Gabriels  appealed the superior court's  award  of

attorney's fees.  While the appeal was still pending, they  filed

for  personal  bankruptcy;  the bankruptcy  action  stayed  their

appeal.   The United States Bankruptcy Court for the District  of

Alaska  discharged  the Gabriels' debts on  September  24,  1990.

Thereafter, appellate proceedings resumed, and, on July 17, 1991,

we  issued the second unpublished decision in the case, affirming

the attorney's fees awarded on remand.6

          The Guttchens took no immediate action to execute their

judgment  lien  after  we affirmed their  attorney's  fee  award.

Similarly,  the Gabriels took no immediate steps  to  survey  the

Brodman  property in order to establish the boundaries  of  their

1.5 acre parcel.

          On   May  10,  1994,  the  Gabriels  quitclaimed  their

property  interest  to their children, Gregory  Gabriel  Jr.  and

Brian  Gabriel.   The  Guttchens - who  had  previously  acquired

Brodman's  interest  -  offered to buy the  children's  interest;

          their offer was rejected.  In 1999 Gregory Jr. requested the

Kodiak  Island Borough to grant a variance that would enable  him

to subdivide the Brodman property; the borough denied the request

on June 17, 1999, and Gregory Jr. appealed to the superior court.

On  August  3, 1999, after learning of Gregory Jr.'s  efforts  to

obtain  the variance, the Guttchens filed their motion for  leave

to  execute  after  five  years.  Following  oral  argument,  the

superior  court denied the motion, ruling that under  common  law

the  Guttchens'  judgment  lien did not  survive  the  bankruptcy

court's discharge of the Gabriels' underlying debt.

          The Guttchens appeal.

III. ANALYSIS

     A.   The Parties' Arguments

          The Guttchens argue that the superior court erroneously

concluded  that  the Gabriels' bankruptcy discharge  extinguished

their judgment lien.  While acknowledging that the superior court

never  considered  whether  they had established  good  cause  to

execute,  the Guttchens urge us to direct the superior  court  to

grant  their  motion for leave to execute because, they  contend,

the undisputed record establishes good cause for leave to execute

as  a  matter of law.  In response, the Gabriels tacitly  concede

that  the  superior court applied the wrong legal  standard  with

respect to the judgment lien's survival, but nevertheless urge us

to affirm because, in the Gabriels' view, the Guttchens failed as

a matter of law to show good cause for leave to execute late.

     B.   Standard of Review

          Whether  the superior court applied an incorrect  legal

standard  is  a  question  of  law  that  we  review  using   our

independent  judgment.7   We  may  apply  a  legal  doctrine   to

undisputed facts without giving deference to the superior court.8

     C.    The  Superior Court Applied the Wrong Standard in  Its

     Decision.

          The  superior  court  ruled  from  the  bench  at  oral
argument  that, under common law doctrine, the discharge  of  the
underlying debt in the Gabriels' bankruptcy effectively nullified
the Guttchens' judgment lien:

               I   have  substantial  doubt  that   the
          judgment   and  lien  can  have  a   separate
          existence.   The case law that  I'm  familiar
          with  from  the common law is to  the  effect
          that in order for the judgment lien to exist,
          there has to be a valid underlying judgment.
          
               Once  the  valid underlying judgment  is
          discharged  in bankruptcy, it cuts  the  legs
          out  from  under the lien.  The  lien  cannot
          have a separate existence.  And I am prepared
          to  hold to that effect at this time,  but  I
          will  give  counsel  a chance  to  argue  the
          point.
          
Accordingly,  the court denied the Guttchens' motion  to  execute

without  further considering its merits.  But the superior  court

erred concerning the effect of the bankruptcy discharge.

          The  United  States  Supreme  Court  has  held  that  a

bankruptcy  discharge does not extinguish a valid  lien  on  real

property.9  "[A] bankruptcy discharge extinguishes only one  mode

of  enforcing a claim - namely, an action against the  debtor  in

personam  -  while  leaving intact another -  namely,  an  action

against  the debtor in rem."10  While the Supreme Court's holding

involved a mortgage lien,11 numerous other courts have held  that

judgment  liens similarly survive bankruptcy and are  enforceable

in  rem.12   The  In re Hermansen court held, for  example,  that

"[g]enerally,  valid,  perfected  judicial  liens  which  precede

bankruptcy survive and are enforceable after bankruptcy.  .  .  .

The   bankruptcy   discharge  does  not   prevent   post-petition

enforcement of valid liens.  The secured creditor may proceed  to

enforce   the   lien,   as  an  in  rem  action,   and   is   not

barred . . . ."13

          Accordingly, it was error to deny the Guttchens' motion

for  leave to execute on the ground that the Gabriels' bankruptcy

extinguished both the underlying debt and the lien.

     D.    The Record Establishes Fair and Just Reasons to  Allow

     Execution.

          Because it relied on the assumption that the Guttchens'

lien  could not survive without its underlying debt, the superior

court  did  not address the merits of their motion for  leave  to

execute   late.    Alaska  Statutes  09.35.020  establishes   the

standard:

               When  a  period of five  years  has

          elapsed after the entry of judgment  and

          without an execution being issued on the

          judgment, no execution may issue  except

          by  order of the court in which judgment

          is  entered.  The court shall grant  the

          motion  if  the  court  determines  that

          there  are  just and sufficient  reasons

          for  the  failure to obtain the writ  of

          execution  within five years  after  the

          entry of judgment.[14]

          In   State,   Department  of  Revenue,  Child   Support

Enforcement  Division, ex rel. Inman v. Dean, we  construed  this

statute  to  require  a  showing of "good  cause"  for  delay  in

execution.15   Although  we  noted in Dean  that  "administrative

efforts  to collect delinquent support payments" might show  good

cause,  as  might "[e]vidence of previous attempts to execute,"16

we  have  not  otherwise defined what would suffice to  meet  the

statutory  requirement of "just and sufficient  reasons  for  the

failure to obtain the writ of execution within five years."17

          Here,  both parties urge us to sustain their respective

positions  on  the issue of "just and sufficient  reasons"  as  a

matter  of law.  Although the issue typically involves a  factual

component  and  is therefore usually consigned  to  the  superior

court's   discretion,18  both  parties  in  this  case  had   the

opportunity to present their positions to the superior  court  in

their  memoranda  and  affidavits,  neither  party  requested  an

evidentiary  hearing before the superior court, and the  critical

facts   surrounding  the  issue  are  undisputed.   Given   these

          circumstances, we find no impediment to deciding the issue of

just  and  sufficient reasons for late execution as a  matter  of

law.19

          The  undisputed facts in the record show the following:

(1)   the  1989  attorney's  fees  award  and  recorded  judgment

established a lien against any interest the Gabriels held in  the

Raspberry Island property; (2) the Guttchens perfected their lien

before  the Gabriels filed for bankruptcy in March 1990; (3)  the

bankruptcy  discharged the Gabriels' personal liability  so  that

the  only method of enforcing the judgment was the judicial  lien

on  the  Raspberry  Island property; (4) the  Gabriels'  property

interest  in the Raspberry Island parcel could only be  perfected

by  surveying  the  property, establishing  its  boundaries,  and

obtaining  a  variance from the Kodiak Island  Borough  to  allow

subdivision;20  (5) despite a provision in the  superior  court's

July  5,  1989,  judgment requiring the Gabriels  to  survey  and

establish  their  boundaries  within  sixty  days,  neither   the

Gabriels nor their successors -  their children - applied  for  a

variance  until  1999;  (6) in response, the  Guttchens  filed  a

motion for leave to execute on their lien.21

          We  find that these circumstances establish good  cause

for  late  execution  as a matter of law:  the  Raspberry  Island

property  was  the  only  property of  the  Gabriels  subject  to

execution, the Gabriels controlled the process of subdividing the

property,  and they did not timely act upon the superior  court's

order  to apply for a variance in order to subdivide.  When  Greg

Gabriel  Jr.  applied  for  a variance  in  1999,  the  Guttchens

promptly  filed their motion for leave to execute.   Because  the

Gabriels  controlled  the  subdivision  process,  discharged  the

underlying debt in bankruptcy, and failed to act to perfect their

own  interest in the 1.5 acre parcel for ten years, the Guttchens

had  compelling  reason  to  delay execution  until  Gregory  Jr.

ultimately attempted to subdivide the property.

          Moreover,  the Gabriels failed to produce any  evidence

          below suggesting that a delayed execution might actually

prejudice  them:  their personal debt had long  been  discharged,

they  had quitclaimed the parcel to their children in 1994,  they

no  longer claimed any personal interest in it, and they  offered

no  factual  basis to establish standing to assert any  potential

prejudice to their successors in interest.22

          On  this record, then, we hold as a matter of law  that

denial of the Guttchens' motion for leave to execute would be  an

abuse of discretion.

IV.  CONCLUSION

          We VACATE the superior court's judgment and REMAND with

directions to enter a judgment granting the motion for  leave  to

execute late.

_______________________________
     1    The Guttchens have additionally challenged the superior
court's  award of prevailing-party attorney's fees.  Our decision
reversing the superior court's judgment on the merits moots  this
issue.

     2    See Gabriel v. Guttchen, Mem. Op. & J. No. 434 (Alaska,
January 25, 1989) (Gabriel I); Gabriel v. Brodman, Mem. Op. &  J.
No. 561 (Alaska, July 17, 1991) (Gabriel II).

M    m. Op. & J. No. 561 at 2-3.. 434 at 2.

     4    Id. at 3-4.

     5    Id. at 4.

     o    e, 817 P.2d 453, 456-57 (Alaska 1991).8Foss

     7    Lowe v. Lowe, 817 P.2d 453, 456-57 (Alaska 1991).

     9    Johnson v. Home State Bank, 501 U.S. 78, 82-84 (1991).

     10   Id. at 84.

     11   Id. at 80-81.

     12   See, e.g., In re Hermansen, 84 B.R. 729, 733 (Bankr. D.
Colo.  1988); Songer v. Cooney, 264 Cal. Rptr. 1, 2-4 (Cal.  App.
1989)  (noting  that  judgment is enforceable  absent  bankruptcy
court  order avoiding lien in its entirety); First Nat'l Bank  in
Toledo  v.  Adkins,  650  N.E.2d 277,  279-80  (Ill.  App.  1995)
(allowing  judgment lien to be revived pursuant to statute  after
statute  of  limitations  had run despite intervening  bankruptcy
discharge  of personal liability on judgment lien);  Pimentel  v.
White,  720  P.2d  758, 760 (Or. App. 1986); Hayden  v.  American
Honda Motor Co., 835 S.W.2d 656, 660 (Tex. App. 1992).

     13   84 B.R. at 733 (citation omitted).

14     Alaska  Civil  Rule  69(d)  implements  this  statute   by
setting forth procedures for executing more than five years after
judgment:

          (d)    Execution   After   Five   Years.
          Whenever  a  period of five years  shall
          elapse without an execution being issued
          on  a judgment, no execution shall issue
          except  on  order of the  court  in  the
          following manner:
          
          (1)  The judgment creditor shall file  a
          motion  supported by affidavit with  the
          court where the judgment is entered  for
          leave to issue an execution.  The motion
          and  affidavit shall state the names  of
          the parties to the judgment, the date of
          its  entry,  the reasons for failure  to
          obtain a writ for a period of five years
          and the amount claimed to be due thereon
          or  the  particular  property  of  which
          possession was adjudged to the  judgment
          creditor remaining undelivered.
          
          (2)    Upon   filing  such  motion   and
          affidavit  the  judgment creditor  shall
          cause  a  summons to be  served  on  the
          judgment debtor . . . .
          
          (3)   The judgment debtor . . . may file
          and  serve  a  verified answer  to  such
          motion  .  .  . alleging any defense  to
          such motion which may exist. . . .
          
          (4)   The order shall specify the amount
          for which execution is to issue . . . .
          
          (5)   At  the time of filing the  motion
          for  leave to issue execution or at  any
          time  thereafter before the final  order
          is  entered,  the judgment creditor  may
          cause   the  property  of  the  judgment
          debtor  to  be attached and held  during
          the  time  said  motion is  pending  and
          until the final order is entered. . .  .
          In  the event that the court shall order
          that   execution  be  issued,  it  shall
          further order that any property  of  the
          judgment debtor attached hereunder shall
          be  sold  for the satisfaction  of  such
          execution . . . .
          
     15   902 P.2d 1321, 1324 (Alaska 1995).

     16   Id. at 1325.

     17   AS 09.35.020.

     18    See State, Dep't of Revenue v. Dean, 902 P.2d at 1325-
26  (child  support); see also Perry v. Newkirk, 871  P.2d  1150,
1156  (Alaska 1994) (same); Jones v. Cent. Peninsula Gen.  Hosp.,
779 P.2d 783, 789 (Alaska 1989) (motion for summary judgment).

19    Foss  Alaska  Line,  Inc. v. Northland  Servs.,  Inc.,  724
P.2d  523, 526 (Alaska 1986) (stating that we may apply  a  legal
doctrine  to  undisputed  facts without deferring  to  the  trial
court).   In  Dean, we did find it necessary to  remand  for  the
superior  court  to determine the existence of a  fair  and  just
reason.   902  P.2d at 1325-26.  But unlike the  parties  in  the
present  case,  the parties there had not had an  opportunity  to
litigate the issue before the superior court.  Accordingly,  Dean
does not support the proposition that a remand is necessary here.

     20    Following  this  court's first  decision,  the  Kodiak
Island  Borough notified the Gabriels that they needed to file  a
subdivision plat to subdivide, that the Raspberry Island property
was  in  a  conservation district where the minimum lot size  was
five acres, and that they therefore would need a variance.

     21   It is also undisputed and relevant to the issue of good
cause that the Guttchens had attempted to execute against several
bank accounts without success prior to the bankruptcy stay.   See
Dean,  902  P.2d  at  1325  (noting the "[e]vidence  of  previous
attempts to execute" might show good cause for subsequent delay).

     22    In  their  brief,  the Gabriels suggest  prejudice  to
Gregory Jr. by portraying him as "an innocent third party."   But
the  record hardly supports the description:  Gregory Jr. was  on
notice  of  the  Guttchens' lien when the Gabriels  conveyed  the
property  in  1994,  and their quitclaim  deed  could  convey  no
greater  interest  to  Gregory Jr. than the  Gabriels  themselves
possessed.