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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. National Bank of Alaska v. Ketzler (6/6/2003) sp-5696

National Bank of Alaska v. Ketzler (6/6/2003) sp-5696

     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


NATIONAL BANK OF ALASKA,      )
                              )    Supreme Court No. S-9945
             Appellant,                 )
                              )    Superior Court No.
     v.                       )    4FA-00-141 PR
                              )
NANCY KETZLER, PERSONAL       )
REPRESENTATIVE FOR DONALD     )
KETZLER,                                          )    O P I N I
                              O N
                              )
             Appellee.                  )    [No. 5696 - June 6,
                              2003]
________________________________)


          Appeal from the Superior Court of the State
          of Alaska, Fourth Judicial District,
          Fairbanks, Mary E. Greene, Judge.

          Appearances:  David J. Schmid, Law Offices of
          David J. Schmid, Anchorage, for Appellant.
          Richard W. Wright, Fairbanks, for Appellee.

          Before:  Fabe, Chief Justice, Matthews,
          Eastaugh, and Carpeneti, Justices.  [Bryner,
          Justice, not participating.]

          CARPENETI, Justice.


I.   INTRODUCTION

          I.   Donald Ketzler executed a deed of trust in favor of the

National Bank of Alaska in order to secure a loan.  After Donalds

death, his widow Nancy Ketzler moved to have the deed set aside.

The superior court ruled in favor of Nancy under AS 34.15.010,

setting aside the deed because Nancy did not join in the

conveyance and because she brought an action to set the deed

aside within the one-year period.  National Bank of Alaska

appeals the decision of the superior court.  Because we uphold

the superior courts interpretation of AS 34.15.010, we affirm.

II.  FACTS AND PROCEEDINGS

     A.   Facts

          Nancy and Donald were married in 1975.  Beginning in

1976, the couple lived in a house Donald acquired from his

father.  The Ketzlers occupied the house as their marital

residence and raised their three children there.  Title to the

house was solely in Donalds name.  Donald executed a will in 1983

that appointed Nancy as personal representative and left her all

of his estate.

          On August 6, 1999 Donald executed a deed of trust on

the house in favor of National Bank of Alaska (NBA) in return for

a $55,000 loan.  The deed contained a provision that Nancy was

required to sign in order to waive her homestead rights.  The

parties have stipulated that Donald forged Nancys signature on

that portion of the deed.  The deed was recorded on August 12,

1999.

          On August 13, 1999 Nancy received documents from NBA

that informed her of the loan Donald had secured against the

house.  Nancy promptly notified NBA that the signature on the

deed was not hers.  NBA responded with a letter stating that it

would consider the document purporting to waive her homestead

rights invalid.  NBA also contacted Donald and obtained

additional security on the loan including a truck and an all-

terrain vehicle.  On December 25, 1999 Donald committed suicide.

After Donalds death, NBA accelerated the loan, declared it to be

in default, and sought to foreclose on the house.

     B.   Proceedings

          A.   Nancy applied for informal probate of Donalds will.  She

applied for and was appointed personal representative of the

estate.  Nancy then filed a motion to have the deed of trust

declared void and to enjoin the foreclosure, along with a motion

to establish exempt property and to set a family allowance.  It

appears that Nancy subsequently recorded a notice of homestead.

          Oral argument was heard and a recommendation made by

Standing Master Alicemary L. Closuit.  Master Closuit recommended

that the superior court deny Nancys motion to have the deed

declared void.  Master Closuit stated that, since Nancy had no

ownership interest in the house, the deed was still valid and NBA

could foreclose.

          The superior court rejected Master Closuits

recommendations and granted Nancys motion to set the deed aside.

The superior court noted that AS 34.15.0101  requires both

spouses to join in a conveyance of the family home.  However, the

court went on to note that the statute does not automatically

invalidate a deed when a spouse not appearing on the title fails

to join in the conveyance.  And since Nancys name did not appear

on the title of the house, the deed was not invalid on its face.

Rather, the superior court determined that the deed could be set

aside under AS 34.15.010(d) because Nancy filed a motion to have

the deed set aside within one year of its execution.  Therefore,

the superior court granted Nancys motion, and set the deed aside.

          NBA appeals.

III. STANDARD OF REVIEW

          We use our independent judgment in interpreting

statutes.2  The goal of statutory construction is to give effect

to the legislatures intent, with due regard for the meaning the

statutory language conveys to others.3  In interpreting statutes,

we look to the meaning of the language, the legislative history,

and the purpose of the statute in question.4  We  adopt the rule

of law that is most persuasive in light of precedent, reason, and

policy. 5

IV.  DISCUSSION
     
          NBA argues that the superior court erred in finding

that AS 34.15.010 alone allowed for the setting aside of the

deed.  NBA argues that AS 34.15.010(c) provides that the

requirement that a spouse join in a conveyance does not give that

          spouse any interest in the property that the spouse did not

previously have.  According to NBA, AS 34.15.010(d) allows for

invalidation of the deed only if the spouse that failed to join

in the deed appears on the title; the statute does nothing to

invalidate the deed if the spouse does not appear on the title.

Consequently, NBA asserts that the deed is valid and enforceable

because Nancys name does not appear on the title.

          The superior court concluded that, when a spouse does

not join in the conveyance and that spouses name appears on the

title, the deed is invalid on its face under AS 34.15.010.

However, when a spouse does not appear on the title, the superior

court stated that the spouse must either file a notice of

interest with the recording district or bring an action to set

the deed aside within one year from the recording of the

conveyance to invalidate the deed under AS 34.15.010(d).  In

order to determine whether the superior courts interpretation of

AS 34.15.010 is the proper interpretation, we analyze the statute

section by section.6

          First, AS 34.15.010(b) provides that [i]n a deed or

conveyance of the family home or homestead by a married man or a

married woman, the husband and wife shall join in the deed or

conveyance.  The statute makes no distinction between spouses

whose names appear on the title and spouses whose names do not

appear on the title.  The statute unequivocally states that, if

one spouse attempts to convey the property used as the family

home, then the other spouse must, as shown by the use of the word

shall, join in the conveyance.  NBA seems to agree that this is

the appropriate reading of AS 34.15.010(b).

          Second, AS 34.15.010(c) provides that [t]he requirement

that a spouse of a married person join in a deed or conveyance of

the family home or homestead does not create a proprietary right,

title, or interest in the spouse not otherwise vested in the

spouse.  This section supports NBAs assertion that the statute

does not give Nancy any interest in the house that she did not

          previously have.  The superior court agreed with this conclusion,

stating that [s]ubsection (c) would mean that a spouse who is not

on the title would not acquire title in the property simply by

joining in the other spouses conveyance of an interest in the

property.  Given the language of the statute, it appears that the

legislature intended to make clear that the requirement that a

spouse join in the conveyance of a homestead interest would not

create any proprietary right, title, or interest in that spouse.

          Third, AS 34.15.010(d) provides:

          Failure of the spouse to join in the deed or
          conveyance does not affect the validity of
          the deed or conveyance, unless the spouse
          appears on the title. The deed or conveyance
          is sufficient in law to convey the legal
          title to the premises described in it from
          the grantor to the grantee when the deed or
          conveyance is otherwise sufficient, and
                    (1) no suit is filed in a court of
          record in the judicial district in which the
          land is located within one year from the date
          of recording of the deed or conveyance by the
          spouse who failed to join in the deed or
          conveyance to have the deed or conveyance set
          aside, altered, changed, or reformed; or
                    (2) the spouse whose interest in
          the property is affected does not record,
          within one year in the office of the recorder
          for the recording district where the property
          is situated, a notice of an interest in the
          property.
          
The first sentence of this subsection means that, if a spouse who

appears on the title does not join in a conveyance of the family

home, the conveyance is per se invalid.  The second sentence

addresses the situation in which a non-titled spouse does not

join in the conveyance: the conveyance is valid and enforceable

as long as it is otherwise sufficient, that is, it meets the

requirements of subsection (a) and so long as the non-titled

spouse neither files suit to set the conveyance aside within one

year from the recording of the conveyance nor files a notice of

interest in the property within the same period.  This is the way

the superior court interpreted this subsection.  We agree,

provided that the interest asserted within the one-year period

has a source independent of the joinder requirement of AS

34.15.010(b).

          NBA asserts that subsection (d) applies only to deeds

in which the spouses name appears on the title and that spouse

did not join in the conveyance.  The bank argues that subparts

(1) and (2) of subsection (d) apply to situations in which a

spouse is named on the title and does not join in the conveyance.

NBA argues that in those situations, the deed or conveyance would

not be per se invalid; rather, the spouse would still have to

bring an action to set aside the conveyance or file a notice of

interest in the recording district in order to have the

conveyance set aside.  However, as the superior court noted, this

interpretation reads subsection (b) out of the statute, as the

requirement that both untitled and titled spouses join in deeds

would be meaningless if there was no way for untitled spouses to

enforce the rights protected by that requirement by invalidating

a deed.

          The use of the word unless in subsection (d) implies

that the situation in which the spouse does appear on the title

and does not join in a conveyance is the situation in which the

deed is automatically invalid.  Therefore, the requirement of

either filing a suit or recording a notice of interest applies to

spouses whose names do not appear on the title.  In the absence

of such a reading, the blanket requirement that a spouse join in

the conveyance in subsection (b) would be meaningless as there

would be no consequence for a spouse not joining if that spouse

does not appear on the title.  Non-titled spouses can invalidate

deeds and conveyances under AS 34.15.010 in the event that they

follow the procedure set out in AS 34.15.010(d) and are asserting

a right not created by AS 34.15.010.

          NBA cites the territorial Alaska case of  Spracher v.

Spracher7 in support of its interpretation of AS 34.15.010.

Spracher was a divorce action in which the husband mortgaged the

          homestead without the wifes signature and the wife sought to set

aside the conveyance.8  The statute at issue in Spracher was

almost identical to the statute at issue here.9  The court held

that the statute did not give the wife an interest in the

property, but this holding is inapposite in this case.  The wifes

inability to invalidate the conveyance was based on the divorce,

as the court held that her homestead rights did not survive the

divorce.10

          We agree that the statute does not give an untitled

spouse an interest in property.  Instead, the interest asserted

must have a source independent of the statute.  But our case is

different from Spracher.  Here, Nancys interest in the property

survived her husband, in fact it vested with his death.11

          Nancy had at least two valid interests in the property

within the scope of AS 34.15.010s protection.  The interest

required for Nancy to challenge the deed is supplied by the

probate homestead allowance12 and her right to inherit the

decedents property (according to his valid will,13 by exercising

her right to an elective share of his estate,14 or through the

laws of intestate succession15).  Because Donalds will left the

property to Nancy, she was entitled to inherit the decedents

interest in the home.  Likewise, the probate homestead exemption

would have protected Nancys interest in the home.  These

interests are not created by AS 34.15.010, but are precisely the

type of rights that AS 34.15.010 is intended to protect.  The

statute protects for one year Nancys right to inherit the

property she would have been entitled to inherit in the absence

of an improperly acquired deed against that property.  Because

invalidation of the deed would protect a right to inherit the

home, Nancy has the right under AS 34.15.010 to invalidate the

deed.

          Because Nancy Ketzler timely took the action that the

statute provides will invalidate a deed that fails to contain the

signature of the untitled spouse in order to protect her right of

          inheritance, the superior court correctly held that the banks

deed could be invalidated and proceeded to invalidate it.

Therefore, we uphold the superior courts decision to set aside

the deed of trust.

V.   CONCLUSION

          Because we find that the superior court properly

interpreted AS 34.15.010, we AFFIRM the setting aside of the deed

of trust.


_______________________________
     1    AS 34.15.010 states:

               (a)  A  conveyance of  land,  or  of  an
          estate  or interest in land, may be  made  by
          deed,  signed and sealed by the  person  from
          whom  the  estate or interest is intended  to
          pass,  who is of lawful age, or by the lawful
          agent   or   attorney  of  the  person,   and
          acknowledged  or  proved,  and  recorded   as
          directed  in this chapter, without any  other
          act or ceremony whatever.
               (b)  In  a  deed  or conveyance  of  the
          family home or homestead by a married man  or
          a  married woman, the husband and wife  shall
          join in the deed or conveyance.
               (c)  The requirement that a spouse of  a
          married  person join in a deed or  conveyance
          of  the  family  home or homestead  does  not
          create   a   proprietary  right,  title,   or
          interest  in the spouse not otherwise  vested
          in the spouse.
               (d) Failure of the spouse to join in the
          deed  or  conveyance  does  not  affect   the
          validity  of  the deed or conveyance,  unless
          the spouse appears on the title. The deed  or
          conveyance is sufficient in law to convey the
          legal  title to the premises described in  it
          from the grantor to the grantee when the deed
          or conveyance is otherwise sufficient, and
                    (1) no suit is filed in a court  of
          record in the judicial district in which  the
          land is located within one year from the date
          of recording of the deed or conveyance by the
          spouse  who  failed to join in  the  deed  or
          conveyance to have the deed or conveyance set
          aside, altered, changed, or reformed; or
                    (2)  the  spouse whose interest  in
          the  property  is affected does  not  record,
          within one year in the office of the recorder
          for the recording district where the property
          is  situated, a notice of an interest in  the
          property.
          
     2     Alderman  v. Iditarod Props., Inc., 32 P.3d  373,  380
(Alaska 2001).

     3    Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746
P.2d 896, 905 (Alaska 1987).

     4     Muller v. BP Exploration (Alaska) Inc., 923 P.2d  783,
787 (Alaska 1996).

     5     Berger  v. Wien Air Alaska, 995 P.2d 240, 242  (Alaska
2000)  (quoting Williams v. Utility Equip., Inc., 837 P.2d  1112,
1117 (Alaska 1992)).

     6    Our search of the legislative history uncovered nothing
that  assists interpretation of the statute, and the parties have
not  referred us to useful legislative history.  The  statute  as
originally  codified  in   22-3-1  ACLA  1949  consisted  of  one
paragraph   containing  the  provisions  now   codified   as   AS
34.15.010(a)-(b).  The legislature amended the statute in 1953 to
add the text now codified as AS 34.15.010(c)-(d).

     7    17 Alaska 698 (D. Alaska 1958).

     8    Id. at 702-03.

     9    Id. at 702.

     10    Id. at 705.

     11     The  territorial courts opinion that  the  spouse  in
Spracher  had  no  interest  that survived  the  divorce  is  not
necessarily  consistent with contemporary legal  standards.   The
property  in question there would be considered marital  property
under todays standards because a divorce was pending and as  such
would be subject to division in the divorce even though held only
in the name of the husband.  Marital property is not a species of
ownership  but  it arguably represents a sufficient  interest  to
receive  protection  under the statute.   This  question  is  not
presented in this case and we do not resolve it here.

     12    AS 13.12.402.

     13    AS 13.12.501-13.12.921.

     14    AS 13.12.202(a).

     15    AS 13.12.102.