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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Jimerson v. Tetlin Native Corporation (09/29/2006) sp-6050

Jimerson v. Tetlin Native Corporation (09/29/2006) sp-6050, 144 P3d 470

     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

SHIRLEY DAVID JIMERSON and )
RAMONA DAVID, ) Supreme Court No. S- 11757
)
Appellants,)
) Superior Court No.
v. ) 4FA-99-586 CI
)
TETLIN NATIVE CORPORATION, ) O P I N I O N
)
Appellee. ) No. 6050 - September 29, 2006
)
          Appeal  from the Superior Court of the  State
          of    Alaska,   Fourth   Judicial   District,
          Fairbanks, Charles R. Pengilly, Judge.

          Appearances:  Fred W. Triem, Petersburg,  for
          Appellants.  Davis S. Case, Cynthia M.  Hora,
          Anchorage, for Appellee.

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

          MATTHEWS, Justice.

I.   INTRODUCTION
          Plaintiffs seek to enforce a settlement agreement.  The
superior  court  determined that the agreement  is  unenforceable
because  the  agreements stock repurchase provision violates  the
Alaska  Native Claims Settlement Acts (ANCSA) prohibition on  the
alienation of shares.  Because we conclude that transfer of ANCSA
stock  back  to a Native corporation in exchange for stock  in  a
newly created corporation violates ANCSA, we affirm.
II.  FACTS AND PROCEEDINGS
          The  Tetlin  Native  Corporation  (TNC)  is  a  village
corporation formed pursuant to ANCSA and organized as  an  Alaska
business   corporation.   On  July  17,  1996,  TNC   transferred
approximately  643,174 acres of its land  to  the  Tetlin  Tribal
Council.1 This left TNC with 100,000 acres of land.
          Subsequently,  the  appellants,  Shirley  Jimerson  and
Ramona  David,  conducted  a campaign to  recall  TNCs  board  of
directors.  The campaign was successful, and on January 12, 1999,
Jimerson and David were elected to the board.
          On  March  15,  1999, TNC and Jimerson  and  David,  as
directors  and individual shareholders (collectively  Jimerson),2
filed  a  complaint in Alaska Superior Court in Fairbanks against
certain shareholders and directors of TNC.  The complaint alleged
breach of fiduciary duties and wrongful transfer of TNC land, and
requested  $257,200,000 in damages and declaratory and injunctive
relief.   On  April 20, 1999, the case was removed to the  United
States District Court for the District of Alaska.
          On  August  6,  1999, the Jimerson board was  recalled.
The  new board passed a resolution that TNC dismiss all law suits
brought by the Jimerson board.  On October 6, 1999, TNC moved  to
dismiss   without  prejudice  all  claims  it  had  against   the
shareholders  and  former  and current  directors  of  TNC.   The
district  court  denied  TNCs motion to  dismiss  and  urged  the
parties to reach a settlement.
          The courts advice bore fruit, and the parties reached a
settlement agreement.  In August 2001 the district court approved
the  agreement  and  entered judgment  on  it.3   The  settlement
agreement  acknowledged that TNC shareholders may not  have  been
fully  informed  regarding dissenters rights  in  the  1996  land
transfer and provided for
          [a]  transfer  of a portion of Tetlin  Native
          Corporations remaining lands . . . to  a  new
          corporation   to  be  formed  by   dissenting
          shareholders  .  .  . who elect  to  transfer
          their  shares  of  Tetlin Native  Corporation
          ANCSA  stock  back  to  the  corporation   in
          exchange for shares in the new corporation.
          
          In  May 2003 Jimerson filed a motion in district  court
to  enforce the settlement agreement.  TNC opposed the motion and
moved  for relief from the judgment, contending that the district
court  lacked  subject-matter jurisdiction.  The  district  court
concluded that the case presented no substantial federal question
and  declared the judgment based on the settlement agreement void
for  lack  of  jurisdiction.  The case was then remanded  to  the
superior court.
          On  February 23, 2004, Jimerson filed a motion  in  the
superior court to enforce the settlement agreement.  TNC  opposed
the   motion,   arguing   that  the  settlement   agreement   was
unenforceable as against public policy for three reasons: (1) the
agreement  provided  for an exchange of shares  in  violation  of
ANCSAs prohibition on alienation, (2) the agreement violated  the
Alaska Corporations Code, and (3) the attorney for plaintiffs had
a conflict of interest.
          On  June  18, 2004, the superior court denied Jimersons
motion  to  enforce the settlement agreement on the grounds  that
the  agreement  was  unenforceable  because  it  violated  ANCSAs
          prohibition on alienation.4
          Jimerson appeals this denial.
III.      DISCUSSION
          We  have  adopted  the Restatement principle  that  [a]
promise or other term of an agreement is unenforceable on grounds
of public policy if legislation provides that it is unenforceable
. . . .5  This court has no power, either in law or in equity, to
enforce  an  agreement which directly contravenes  a  legislative
enactment.6
          The  issue before this court is whether the transaction
contemplated by the settlement agreement is prohibited by  ANCSA.
The  settlement agreement transferred a portion of TNCs remaining
land   to   a   new  corporation  and  then  allowed   dissenting
shareholders   to   transfer  their  shares  of   Tetlin   Native
Corporation  ANCSA stock back to the corporation in exchange  for
shares in the new corporation.
          Issues of statutory interpretation are questions of law
which we review de novo.7
          ANCSA  section  7(h)(1)(B) prohibits ANCSA  stock  from
being sold, pledged, assigned, or otherwise alienated, subject to
exceptions set out in section 7(h)(1)(C).8  ANCSA does not define
the  term  alienated,  and this court has  not  had  occasion  to
interpret  the  term.   [U]nless words have acquired  a  peculiar
meaning,   by   virtue  of  statutory  definition   or   judicial
construction, they are to be construed in accordance  with  their
common  usage.9   Blacks  Law Dictionary  defines  alienate:   To
transfer  or convey (property or a property right) to  another.10
Websters defines alienate:  to convey or transfer (as property or
a  right) [usually] by a specific act rather than the due  course
of  law.11  The settlement agreement contemplates that dissenting
shareholders  transfer  their ANCSA shares  to  TNC.   Dissenting
shareholders do not retain any right or interest in  their  ANCSA
shares.   The  language  of the statute suggests  that  the  term
alienate  includes  transfer of ANCSA stock  back  to  a  village
corporation in exchange for stock in a newly created corporation.
          Jimerson  argues that the specific prohibitions  listed
in  subsection 7(h)(1)(B)(i)-(v) do not apply to organic  changes
such  as  the  share  exchange  contemplated  in  the  settlement
agreement.   Jimerson argues that under the principle of  ejusdem
generis  the general term otherwise alienate refers only  to  the
same  kinds  of  transactions specifically listed  in  subsection
7(h)(1)(B)(i)-(v)  and  therefore  does  not  refer  to  a  share
exchange made during an organic change.
          We  do  not find Jimersons argument persuasive for  two
reasons.   First,  Jimerson  points  to  no  authority  for   the
proposition that subsection 7(h)(1)(B)(i)-(v) does not  apply  to
organic  changes.   As we discussed above, the  language  of  the
statute  suggests  that an individual shareholder  alienates  her
stock  by  transferring  it  back to  a  village  corporation  in
exchange for stock in another corporation.12  We see no reason why
the  same principle would not apply to situations where  many  or
all shareholders act at once.  Whether shares are alienated by  a
single  shareholder or by many shareholders pursuant to a  formal
plan  for  organic change, there is no indication  that  Congress
          intended to eliminate statutory protections by allowing ANCSA
shareholders  to  exchange  their shares  for  those  of  another
corporation.  Second, ANCSA provides specific exceptions  to  the
section   7(h)(1)(B)  restrictions.   When  Congress   enumerates
exceptions  to  a  rule, we can infer that  no  other  exceptions
apply.   Section  7(h)(1)(C) lists three  exceptions  that  allow
stock  to be transferred to a Native or a descendent of a Native:
(1)  pursuant to a court decree of separation, divorce, or  child
support,  (2) if the stock limits the holders ability to practice
his  or  her profession, or (3) as an inter vivos gift to certain
relatives.13   Section 7(h)(2) permits shares to escheat  to  the
corporation if the holder has no heirs, and permits a corporation
to  repurchase  shares  transferred  by  the  laws  of  intestate
succession  to  a person who is not a Native or descendant  of  a
Native.14    The  transaction  contemplated  by  the   settlement
agreement  does  not  fall within any of  these  exceptions.   We
therefore infer that no exception applies for transfer  of  ANCSA
stock  back  to a Native corporation in exchange for stock  in  a
newly created corporation.
          Jimerson  argues that the legislative  history  of  the
1987  ANCSA  amendments shows that section  7(h)(1)(B)  does  not
prevent  holders  from  transferring  shares  back  to  a  Native
corporation.  While Jimerson argues that allowing holders to sell
their  shares  back  to a Native corporation is  not  necessarily
inconsistent with the legislative history, she has  not  shown  a
contrary  legislative purpose to a plain language  interpretation
of the statute.15  The legislative history available is sparse and
equivocal.16  In fact, portions of the legislative history suggest
that  a  Native corporation does not have the power to repurchase
its own shares.17
          The  language of section 7(h)(1)(B) indicates that  the
transaction  contemplated  by the settlement  agreement  violates
ANCSA.    That  the  transaction  does  not  fall  within   ANCSA
enumerated exceptions confirms this interpretation.  Jimerson has
failed  to  demonstrate through the use of legislative history  a
contrary  legislative  purpose.   We  therefore  hold  that   the
settlement   agreement  is  unenforceable  because  it   directly
contravenes the section 7(h)(1)(B) restrictions on ANCSA stock.
IV.  CONCLUSION
          We  AFFIRM  the  superior courts  denial  of  Jimersons
motion for enforcement of the settlement agreement.
_______________________________
     1     On January 31, 1996, TNC transferred by quitclaim deed
all  743,174.34 acres it owned to the Tetlin Tribal  Council  for
ten  dollars.  This deed was never recorded.  The July  17,  1996
deed  was recorded and is the land transfer referred to  in  this
case.

     2     Flora  Joe  was also a named plaintiff.   She  is  not
participating in this appeal.

     3     After  the  district  court  approved  the  settlement
agreement,  TNC  expressed  concern  about  the  calculation   of
attorneys fees, and a third party moved to intervene on the basis
of  his  interest in a land claim before the tribal council.   On
June  24,  2002, the court entered an amended judgment  upon  the
settlement  dealing with these issues.  The amended judgment  did
not alter the portion of the settlement agreement relevant to our
disposition of this case.

     4    The court also concluded that the attorney representing
both  Jimerson and TNC had a conflict of interest and  that  this
conflict  provided alternative grounds for finding the  agreement
unenforceable.  Because we affirm on the ANCSA issue, we  do  not
consider whether there was a conflict of interest or whether  the
agreement violated the Alaska Corporations Code.

     5     Pavone  v.  Pavone, 860 P.2d 1228, 1231 (Alaska  1993)
(adopting the Restatement (Second) of Contracts  178(1) (1981)).

     6    Id.

     7     Kodiak  Island Borough v. Roe, 63 P.3d 1009, 1012  n.6
(Alaska 2003) (citing Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska
1979)).

     8    43 U.S.C.  1606(h)(1)(B), (C).  These sections provide:

               (B) Except as otherwise provided in this
          subsection, Settlement Common Stock, inchoate
          rights  thereto, and rights to  dividends  or
          distributions  declared with respect  thereto
          shall not be--
               (i) sold;
               (ii) pledged;
               (iii)  subjected to a lien  or  judgment
          execution;
               (iv) assigned in present or future;
               (v) treated as an asset under--
                    (I)   Title  11  or  any  successor
          statute,
                    (II)   any   other  insolvency   or
          moratorium law, or
                    (III)    other    laws    generally
                    affecting creditors rights; or
               (vi) otherwise alienated.
               (C) Notwithstanding the restrictions set
          forth  in subparagraph (B), Settlement Common
          Stock  may  be transferred to a Native  or  a
          descendant of a Native--
               (i)  pursuant  to  a  court  decree   of
          separation, divorce, or child support;
               (ii)  by a holder who is a member  of  a
          professional  organization,  association,  or
          board  that  limits  his or  her  ability  to
          practice his or her profession because he  or
          she holds Settlement Common Stock; or
               (iii)  as  an  inter vivos gift  from  a
          holder  to  his  or  her  child,  grandchild,
          great-grandchild, niece, nephew, or  (if  the
          holder  has  reached the age of  majority  as
          defined  by the laws of the State of  Alaska)
          brother   or   sister,   notwithstanding   an
          adoption,  relinquishment, or termination  of
          parental  rights  that may  have  altered  or
          severed  the  legal relationship between  the
          gift donor and recipient.
          
     9    Tesoro Alaska Petroleum Co. v. Kenai Pipe Line Co., 746
P.2d  896, 905 (Alaska 1987); accord Williams v. Taylor, 529 U.S.
420,  431  (2000) (We give the words of a statute their ordinary,
contemporary,  common  meaning,  absent  an  indication  Congress
intended   them  to  bear  some  different  import.)   (citations
omitted).

     10    Blacks Law Dictionary 80 (8th ed. 2004).

     11     Merriam Websters Collegiate Dictionary 28  (10th  ed.
1998).

     12    See supra p. 6.

     13    43 U.S.C.  1606(h)(1)(C).

     14    43 U.S.C.  1606(h)(2) provides as follows:

               (A)  Upon  the  death  of  a  holder  of
          Settlement  Common Stock, ownership  of  such
          stock  (unless  canceled in  accordance  with
          subsection  (g)(1)(B)(iii) of  this  section)
          shall  be transferred in accordance with  the
          lawful  will  of such holder or  pursuant  to
          applicable  laws of intestate succession.  If
          the  holder  fails to dispose of his  or  her
          stock   by  will  and  has  no  heirs   under
          applicable laws of intestate succession,  the
          stock  shall escheat to the issuing  Regional
          Corporation and be canceled.
               (B)  The  issuing  Regional  Corporation
          shall  have  the  right to purchase  at  fair
          value  Settlement  Common  Stock  transferred
          pursuant  to  applicable  laws  of  intestate
          succession  to  a person not a  Native  or  a
          descendant  of  a  Native after  February  3,
          1988, if--
               (i) the corporation--
                    (I)   amends   its   articles    of
                    incorporation  to  authorize   such
                    purchases, and
                    (II)  gives  the  person  receiving
                    such  stock written notice  of  its
                    intent  to  purchase within  ninety
                    days   after  the  date  that   the
                    corporation  either determines  the
                    decedent's heirs in accordance with
                    the  laws  of the State or receives
                    notice  that such heirs  have  been
                    determined, whichever later occurs;
                    and
               (ii)  the  person receiving  such  stock
          fails  to  transfer  the  stock  pursuant  to
          paragraph (1)(C)(iii) within sixty days after
          receiving such written notice.
               (C)   Settlement  Common  Stock   of   a
          Regional Corporation--
               (i)  transferred by will or pursuant  to
          applicable laws of intestate succession after
          February 3, 1988, or
               (ii)  transferred by any means prior  to
          February 3, 1988, to a person not a Native or
          a  descendant  of  a Native shall  not  carry
          voting rights. If at a later date such  stock
          is  lawfully  transferred to a  Native  or  a
          descendant  of a Native, voting rights  shall
          be automatically restored.
          
     15     Cf. Muller v. BP Exploration (Alaska) Inc., 923  P.2d
783,  788 (Alaska 1996) (applying plain meaning absent convincing
evidence of a contrary legislative purpose).

     16     Our  focus on textual analysis in construing acts  of
Congress is supported by the United States Supreme Courts  recent
expressions of doubt as to the utility of legislative history  in
statutory interpretation.  See City of Rancho Palos Verdes,  Cal.
v. Abrams, 544 U.S. 113, 122 (2005) (looking only to the text and
its express or implicit indications for guidance).

     17     In  discussing this specific grant of  the  right  to
repurchase stock, the Senate Report explains that the  power  [to
repurchase  stock] only exists if the corporation is the  issuing
corporation   and   has   suitably  amended   its   articles   of
incorporation.  S. Rep. No. 100-201, at 28 (1987),  as  reprinted
in  1987  U.S.C.C.A.N. 3269, 3278.  This suggests  a  legislative
intent  to  grant  a Native corporation the power  to  repurchase
shares   only  in  special  circumstances  and  where  procedural
requirements have been met.

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