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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Lot 04B&5C, Block 83 Townsite v. Fairbanks Northstar Borough (05/22/2009) sp-6373
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
| LOT 04B&5C, BLOCK 83 | ) |
| TOWNSITE, | ) Supreme Court No. S- 12660 |
| ) | |
| Appellant, | ) Superior Court No. 4FA-05-01566 CI |
| ) | |
| v. | ) O P I N I O N |
| ) | |
| FAIRBANKS NORTH STAR | ) No. 6373 May 22, 2009 |
| BOROUGH, | ) |
| ) | |
| Appellee. | ) |
| ) | |
Appeal from the Superior Court of the State
of Alaska, Fourth Judicial District,
Fairbanks, Douglas L. Blankenship and Charles
R. Pengilly, Judges.
Appearances: Wolfgang Falke, pro se,
Fairbanks, Appellant. Cynthia M. Klepaski,
Assistant Borough Attorney, and A. Ren‚
Broker, Borough Attorney, Fairbanks, for
Appellee.
Before: Fabe, Chief Justice, Eastaugh,
Carpeneti, and Winfree, Justices. [Matthews,
Justice, not participating.]
FABE, Chief Justice.
I. INTRODUCTION
This action arises from a foreclosure proceeding
brought by the Fairbanks North Star Borough. In March 2005 the
Borough filed for foreclosure against all properties for which
property tax payments for 2004 or earlier years remained unpaid.
The list of properties included Wolfgang Falkes residential
property. Although Falke admitted that he had not paid his
property taxes, he argued that his tax assessment was incorrect
because of the Boroughs unlawful denial of a partial tax
exemption based on Falkes failure to pay the prior years property
taxes in a timely manner. Falke argued that the Borough
ordinance restricting the exemption to those who are current on
their property taxes is contrary to Alaska statutes and violates
the Alaska Constitutions guarantee of equal protection under the
law. Falkes response to the Boroughs foreclosure action
purported to speak not only for Falkes property, but also for all
other properties similarly situated. The superior court granted
summary judgment to the Borough and Falke appeals, arguing that
the superior court erred on the law and that it abused its
discretion in certain decisions related to the case caption.
Because the superior courts decisions were correct on the law and
did not represent an abuse of discretion, we affirm the judgment
in all respects.
II. FACTS AND PROCEEDINGS
In March 2005 the Borough filed a petition for judgment
under AS 29.45.330, seeking foreclosure of the Boroughs liens
against all properties on which property taxes for tax year 2004
or earlier were not fully paid. Among these was Falkes
residential property: Lot 04B&5C, Block 83 Townsite. Falke filed
an answer and counterclaim on behalf of . . . Lot 4B&5C Block 83
Townsite . . . and on behalf of all other properties similarly
situated. Falke argued that his tax liability should be reduced
because a partial property tax exemption provided by Fairbanks
North Star Borough Code (FNSBC) 03.08.020 should have been
applied to his property and all similarly situated properties.
The Borough applies the partial exemption to owner-occupied
residential property on which no back taxes are owed as of May 10
of the relevant tax year.1 Falkes property was denied the
exemption for the 2004 tax year because prior years property
taxes had not been fully paid by May 10, 2004. Falkes answer and
counterclaim argued that conditioning the exemption on payment of
all back taxes violated AS 29.45.250 and article I, section 1 of
the Alaska Constitution.
After Falke responded, the superior court assigned
Falkes case a separate case number, naming Falke as the
defendant. Falke filed a motion to reconsider, asking the court
to amend the caption of the case to list his property, rather
than Falke himself, as the defendant. Falkes motion and proposed
order suggested that the caption list Falkes property as the
defendant on its own behalf and on behalf of all other properties
similarly situated. The Borough then filed a partial opposition
to Falkes motion for reconsideration, explaining that while the
Borough did not object to listing Falkes property as the party,
it did object to the addition of language implying that the case
was a class action. Falke then filed an objection to the
Boroughs opposition, arguing that under Alaska Rule of Civil
Procedure 77(k)(3), the Borough was precluded from filing a
response unless requested by the court. Falkes objection asked
the superior court to strike the document from the record and
return it to the Borough. The superior court issued an order
granting Falkes motion for reconsideration and directing a change
in the caption, listing Lot 04B&5C, Block 83 Townsite as the
defendant in the action. The superior court also removed from
the caption the reference to other similarly situated properties.
After oral argument the superior court granted summary judgment
for the Borough. Falke appeals on behalf of his property.
III. STANDARD OF REVIEW
We review a grant of summary judgment de novo,
affirming if the record presents no genuine issue of material
fact and if the movant is entitled to judgment as a matter of
law.2 In making these determinations, [w]e view the facts in the
light most favorable to the non-moving party.3 When reviewing
questions of law we apply our independent judgment, adopting the
rule of law most persuasive in light of precedent, reason, and
policy. 4 When we interpret the meaning of a statute, we apply
our independent judgment, interpreting the statute according to
reason, practicality, and common sense, considering the meaning
of the statutes language, its legislative history, and its
purpose.5
IV. DISCUSSION
Falke challenges the constitutionality and legality of
FNSBC 03.08.020(I).6 The ordinance, as applicable to tax year
2004 and prior years, exempted the first twenty percent of the
assessed value of the property, up to $10,000, if the property
owner had applied for the exemption and was not delinquent in
paying property taxes as of May 10 of the tax year for which the
exemption was sought.7 Falke argues that the ordinance violates
Alaskas constitution because it denies equal protection by
discriminating against the poor and that it violates Alaska
statutes because it amounts to a penalty for late payment of
taxes in excess of the statutory penalty cap.8 Falke also
maintains that summary judgment was not proper because there were
genuine disputes of fact material to resolving his claims on the
merits.9 Finally, Falke argues that various rulings of the
superior court relating to the case caption were improper.
A. Summary Judgment Was Proper on the Equal Protection
Claim.
Falke argues that the Borough ordinance violates the
guarantee of equal protection in the Alaska Constitution. We
examine equal protection claims under a sliding scale of scrutiny
levels.10 We begin by weigh[ing] the importance of the interests
affected.11 As the right asserted becomes more fundamental
. . .[,] the challenged law is subjected to more rigorous
scrutiny at a more elevated position on our sliding scale.12
Purely economic interests, such as freedom from disparate
taxation[,] lie[] at the low end of the continuum of interests
protected by the equal protection clause and so are subject to
the most relaxed scrutiny on our sliding scale.13 Under this
relaxed scrutiny, we will uphold laws if they serve a legitimate
public purpose14 and impose only classifications that bear[] a
fair and substantial relationship to that purpose.15 Because the
classification imposed by the Borough ordinance affects only
economic interests, the fair and substantial relationship test
applies.16
Falke argues that disputed facts precluded summary
judgment on his constitutional challenge. Specifically, he
maintains that the ordinance does not actually motivate some
property owners to pay their taxes on time.17 Falke also argues
that regardless of the resolution of any factual dispute the
Borough was not entitled to judgment as a matter of law. We
disagree on both points.
There is no dispute of fact that precludes summary
judgment as to the first prong of the fair and substantial
relationship test that is, whether the ordinances purpose is
legitimate. According to the Borough, the purpose of the
ordinances classification is to encourage prompt payment of
residential property taxes. Falke contends that the ordinance
does not in fact encourage those in arrears to pay and argues
that he is entitled to prove this through witness testimony.
Though his argument may be relevant to the second prong of the
test whether the ordinances classification is fairly and
substantially related to its purpose we can fully address the
first prong of the test without resolving claims about the
ordinances effectiveness in achieving its purpose. The Boroughs
goal in limiting the exemption to those who are current in their
taxes is to motivate prompt payment of taxes, and this is a
legitimate public purpose.18
Turning to the second prong of the test, we must
examine whether the Borough has demonstrated a fair and
substantial relationship between means and end. Falkes argument
seems to be that penalizing late payment of taxes in any way
discriminates against the poor. But this reasoning would apply
to late-payment penalties authorized by AS 29.45.250 a statute
that Falke does not seek to invalidate, but rather relies on.
Moreover, his argument does not address the main issue. It is
not enough to show that an otherwise fair and reasonable law
fails to achieve its purpose in a handful of individuals. Falkes
argument does not explain, as it must, why the ordinances effect
directly motivating most residents to act in a certain manner
does not bear a fair and substantial relationship to the
ordinances purpose motivating just such an action. Falke raises
no credible argument to challenge the Boroughs position that
rewarding Borough residents by a small reduction in their future
taxes will encourage them to pay their taxes promptly and that
the exemptions restrictions thus bear a fair and substantial
relationship to the purpose of motivating prompt payment of
residential property taxes.
B. Summary Judgment Was Proper on the Statutory Claim.
Falke argues that because the partial property tax
exemption is available to all owner-occupied lots except those
that are behind in their taxes, the ordinance granting the
exemption effectively lowers the base level of taxation and
creates a penalty for late payment in the form of denial of the
exemption. Falke argues that in some cases this penalty is in
excess of the twenty percent limit imposed by AS 29.45.250. To
resolve this claim we must determine whether denial of the
exemption is a penalty subject to the limits of AS 29.45.250.
The phrasing of AS 29.45.250 suggests its drafters did
not contemplate treating the denial of an exemption as a penalty.
The statute states, in pertinent part, [a] penalty not to exceed
20 percent of the tax due may be added to all delinquent taxes.19
The statute treats the penalty as an amount separate from the
original amount due, calculated from the original amount due and
added to the original amount due only after the failure to pay on
time. A forgone exemption under the ordinance lacks these
qualities.
While the ordinance may function to penalize a property
owner for delinquent taxes, the additional tax burden imposed is
not added to [the] delinquent taxes. First, the amount of this
additional burden is not due with the taxes that occasion the
penalty, but with the following years taxes, and so is not added
to [the] delinquent taxes. Second, the amount of the additional
burden is not added at all, as it is imposed as part of the
original assessment of taxes in the year following the tax year
for which tax is not promptly paid.
The size of the additional tax burden is not calculated
from, nor related to, the delinquent amount because the effects
of a forgone exemption are felt in the year after a late payment.
If assessed value changes dramatically so will the amount of the
additional tax burden, making it unrelated to the amount of the
tax that was paid late. Thus, to the extent the ordinance
imposes an added tax burden, it is not one that is added to or
calculated based on the amount due. Treating the ordinance as a
penalty would thus be inconsistent with the wording of the
statute.
Where the wording of a statute is not ambiguous, but
suggests a common sense interpretation, we will not give a
different meaning to the statute without clear legislative
history demonstrating that the common sense meaning is incorrect.
As we have explained, [w]here the statutes meaning appears clear
and unambiguous . . . the party asserting a different meaning
bears a correspondingly heavy burden of demonstrating contrary
legislative intent.20 Falke has not met this burden. Therefore,
we determine that denial of the partial property tax exemption is
not a penalty within the meaning of AS 29.45.250, and so is not
subject to the statutes twenty percent limit.
C. Falkes Procedural Claims Are Moot.
In its June 14, 2005 order, the superior court granted
Falkes request, made in his motion for reconsideration, to
substitute the property as the defendant in the foreclosure
actions caption. At the same time, the superior court accepted
the Boroughs suggestion, raised in its unsolicited partial
opposition to Falkes motion for reconsideration, to strike from
the caption the reference to properties similarly situated. Falke
now complains that the Borough should not have been permitted to
file an opposition absent the courts invitation and that the
superior court erred in striking this language from the caption.21
But the only arguable effect of the actions that Falke complains
of was denial of class certification. Our reading of the record
suggests that the superior court had not made a decision as to
class certification but instead intended to postpone that
question until after determining which, if any, of Falkes claims
survived summary judgment.22 In any event, even if the superior
courts actions constituted denial of class certification, that
ruling was not error because Falke, as a pro se litigant, cannot
represent a class.23
V. CONCLUSION
For the reasons discussed above, we find that
enforcement of FNSBC 03.08.020 does not violate the equal
protection clause of the Alaska Constitution or AS 29.45.250.
Accordingly, we AFFIRM the judgment of the superior court.
_______________________________
1 For the tax years relevant to this appeal, the
exemption amount was twenty percent of the assessed value of the
property up to $10,000. FNSBC 03.08.020 (2003). In 2005 the
maximum exemption was raised to $20,000. FNSB Ord. 2005-79 2.
In 2006 the deadline for payment was changed from May 10 to April
1. FNSB Ord. 2006-73 3. Because this litigation arises from
unpaid taxes for 2004 and previous tax years, the earlier version
of the ordinance applies.
2 Beegan v. State, Dept of Transp. & Pub. Facilities, 195
P.3d 134, 138 (Alaska 2008).
3 McCormick v. Reliance Ins. Co., 46 P.3d 1009, 1011
(Alaska 2002) (citing Mathis v. Sauser, 942 P.2d 1117, 1120
(Alaska 1997)).
4 Jacob v. State, Dept of Health & Soc. Servs., Office of
Childrens Servs., 177 P.3d 1181, 1184 (Alaska 2008) (quoting
Guin v. Ha, 591 P.2d 1281, 1284 n.6 (Alaska 1979)).
5 Parson v. State, Dept of Revenue, Alaska Housing Fin.
Corp., 189 P.3d 1032, 1036 (Alaska 2008) (citing Grimm v.
Wagoner, 77 P.3d 423, 427 (Alaska 2003)).
6 The exemption is laid out in subsection (I) of the
current code. It appears that the exemption has been codified in
other subsections in prior years. See, e.g., FNSB Ord. 2003-69
3 (re-lettering the provision from J to I).
7 FNSBC 03.08.020 (2003).
8 AS 29.45.250 provides in part that [a] penalty not to
exceed 20 percent of the tax due may be added to all delinquent
taxes, and interest not to exceed 15 percent a year shall accrue
upon all unpaid taxes, not including penalty, from the due date
until paid in full.
9 Falke also argues that summary judgment was improper
because AS 29.45.370s direction that the court make its decision
in summary proceedings does not apply. Falke is correct that the
statute does not apply to his case; his claim that this fact
precludes summary judgment is without merit.
10 Stanek v. Kenai Peninsula Borough, 81 P.3d 268, 270
(Alaska 2003) (citing Gonzales v. Safeway Stores, Inc., 882 P.2d
389, 396 (1994)).
11 Matanuska-Susitna Borough Sch. Dist. v. State, 931 P.2d
391, 398 (Alaska 1997).
12 Stanek, 81 P.3d at 270 (quoting Gonzales, 882 P.2d at
396) (internal quotation marks omitted).
13 Id. at 270-71 (quoting Matanuska-Susitna Borough Sch.
Dist., 931 P.2d at 398) (internal quotation marks omitted).
Regardless of the interests at stake, more rigorous scrutiny is
proper when a classification is based on a suspect factor such as
race. Id. at 270 (quoting Gonzales, 882 P.2d at 396). Such is
not the case here.
14 Katmailand, Inc. v. Lake & Peninsula Borough, 904 P.2d
397, 401 n.6 (Alaska 1995).
15 Stanek, 81 P.3d at 270 (quoting Gonzales, 882 P.2d at
396).
16 We have before referred to this test as the legitimate
reason test, but the requirement that the classification bear a
fair and substantial relation to its purpose is the more
stringent and thus the more substantive aspect of the test.
Id. (internal quotation marks omitted).
17 The only other dispute plausibly factual in nature is
the amount of tax Falke would owe were the property tax exemption
granted for the years in question. We think the precise amount
of taxes owed is almost certainly a legal, not a factual matter.
In any event, Falkes repeated protests that only the Borough is
authorized to calculate this number demonstrate that this matter
is not actually in dispute. Additionally, it seems clear that
this matter is not material to Falkes claims on the merits, but
only to the question whether he qualifies as a public interest
litigant. Because Falke failed to address this claim in his
opening brief, it is waived. See Karrie B. ex rel. Reep v.
Catherine J., 181 P.3d 177, 187 n.31 (Alaska 2008) ([A]rguments
presented for the first time in reply briefs are considered
waived. (quoting Danco Exploration, Inc. v. State, Dept of
Natural Res., 924 P.2d 432, 435 n.1 (Alaska 1996)) (internal
quotation marks omitted)); Alaska R. App. P. 212(c)(3) (stating
that the reply brief may raise no contentions not previously
raised in either the appellants or appellees briefs).
18 Falke argues that because the exemption is available
only to owner-occupied residential properties, this demonstrates
that the ordinances purpose is not to motivate prompt payment but
to give relief from double property taxation. Regardless of the
merit of this argument, the purpose of conditioning the exemption
on non-delinquency is to motivate prompt payment. It is this
classification that Falke challenges, not the distinction between
rental and owner-occupied residential property.
19 AS 29.45.250(a).
20 Gerber v. Juneau Bartlett Meml Hosp., 2 P.3d 74, 76
(Alaska 2000) (quoting Gossman v. Greatland Directional Drilling,
Inc., 973 P.2d 93, 96 (Alaska 1999) (internal quotation marks
omitted)).
21 Falke also argues that accepting the opposition denied
him due process. This argument is waived because it is
inadequately briefed. See Brady v. State, 965 P.2d 1, 20 (Alaska
1998) (holding that [d]espite our solicitude for pro se
litigants, the pro se appellant waived a claim by failing to
brief it adequately).
22 At the hearing on the Boroughs motion for summary
judgment the superior court judge explained, Ive postponed
certifying [a class] until I rule on this motion for summary
judgment. After indicating that he had decided to grant summary
judgment to the Borough, the judge attempted to end the dispute
over class certification, concluding, if you prevail in the
Supreme Court, you come back to me and then well have to . . .
address [the] issue [of class certification].
23 See Hallam v. Holland Am. Line, Inc., 27 P.3d 751, 754
n.14 (Alaska 2001) (holding that policy concerns prevent the
court from certifying a class if the would-be class
representative will not be represented by counsel).
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