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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

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.   René
          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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