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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Osbakken v. Whittington (12/7/2012) sp-6729

Osbakken v. Whittington (12/7/2012) sp-6729

        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, email 

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                 THE SUPREME COURT OF THE STATE OF ALASKA 



TAWNYA OSBAKKEN, PETER                          ) 

BARNES, and TAMARA BLACK,                       )       Supreme Court No. S-14126 

                                                ) 

                        Appellants,             )       Superior Court No. 3AN-07-06440 CI 

                                                ) 

        v.                                      )       O P I N I O N 

                                                ) 

PEGGY JO WHITTINGTON, d/b/a                     )       No. 6729 - December 7, 2012 

ILLIAMNA SERVICES.                              ) 

                                                ) 

                        Appellee.               ) 

                                                ) 



                Appeal from the Superior Court of the State of Alaska, Third 

                Judicial District, Anchorage, John Suddock, Judge. 



                Appearances: Nikole Nelson, James J. Davis, Jr., and Robert 

                P. Lynch, Alaska Legal Services Corporation, for Appellants. 

                No appearance by Appellee. 



                Before:      Carpeneti,     Chief    Justice,   Fabe,   Winfree,     and 

                Stowers, Justices. 



                CARPENETI, Chief Justice. 



I.      INTRODUCTION 



                Five    disabled    Alaskans     sued   their   former    representative    payee    (an 



individual   appointed   by   the   Social   Security   Administration   to   receive   benefits   for 



someone unable to manage his or her money).                At the conclusion of trial, the superior 



court awarded both compensatory and punitive damages to the plaintiffs; it also entered 


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certain injunctive   relief against the representative payee as to both parties and non- 



parties.  But it declined to enter other injunctive relief as to non-parties.            Three of the 



plaintiffs appeal.  They argue that the superior court failed to understand that non-party 



injunctive relief was available under Alaska's Unfair Trade Practices and Consumer 



Protection Act.  Because the superior court actually entered non-party injunctive relief, 



we disagree with the plaintiffs' characterization of the superior court proceedings and 



affirm the superior court in all respects. 



II.     FACTS AND PROCEEDINGS 



                                           1 

                Five disabled Alaskans  (the beneficiaries) who received social security and 



other   government   benefits   sued   Peggy   Jo   Whittington,   their   former   representative 

payee.2   The beneficiaries alleged that Whittington violated several legal duties owed to 



them while managing their finances. 



                The     central   issue   in  this  appeal    regards    plaintiffs'   allegation    that 



Whittington violated the Unfair Trade Practices and Consumer Protection Act (UTPA). 



The superior court concluded that Whittington violated UTPA by: implying the fee she 



charged   was   approved   by   the   Social   Security   Administration;   continuing   to   charge 



        1       The five plaintiffs were Tawnya Osbakken, Peter Barnes, Tamara Black, 



Ethel Bruce, and Elizabeth Wolford. Bruce and Wolford passed away before this appeal 

was taken. 



        2       "A representative payee is an individual or organization appointed by [the 



Social Security Administration] to receive Social Security and/or [Supplemental Security 

Income] benefits for someone who cannot manage or direct someone else to manage his 

or her money.   The main responsibilities of a payee are to use the benefits to pay for the 

current and foreseeable needs of the beneficiary and properly save any benefits not 

needed     to  meet   current   needs."    SOCIAL     SECURITY     ADMINISTRATION ,  FAQS            FOR 

REPRESENTATIVE PAYEES , http://www.ssa.gov/payee/faqrep.htm (last visited November 

20, 2012).  Whittington was doing business as Illiamna Services, IS, Inc., and Alliance 

Services. 



                                                  -2-                                             6729
 


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monthly fees after clients provided notice of termination; failing to provide statements 



to clients upon request; sending out a letter providing that Whittington would be joining 



another   individual   in   a   joint   venture,   where   no   definitive   intent   ever   existed;   and 



appointing herself paid trustee for clients without their permission. 



                 The beneficiaries also alleged that Whittington was professionally negligent 



in   her  duties.    The    superior   court   concluded      that   Whittington    was    professionally 



negligent by: paying client bills from client's checking or savings account, where the 



bills could   have been paid from a separate trust; failing to provide clients with their 



living allowances; failing to account for money; charging double termination fees; and 



engaging in a "pervasive pattern of incompetence in the running of [her] business." 



                 The superior court awarded compensatory damages and punitive damages 



to the beneficiaries. The superior court also ordered the following injunctive relief in the 



event Whittington ever goes "back into the business": Whittington may not act in a 



fiduciary capacity for more than 30 clients at a time; she must provide all future clients 



with monthly statements; and she must notify all future clients "that she was found liable 



for unfair trade practices and . . . professional negligence."            Although the beneficiaries 



had requested additional relief, primarily non-party injunctive relief, the superior court 



found that "it [was] not appropriate to grant non-party relief in this case."  The superior 



court added, "[i]f you want non-party relief in general, you have to file a class action." 



                 Plaintiffs appeal what they view as the superior court's failure to recognize 



that non-party injunctive relief is available under UTPA. 



                                                    -3-                                              6729
 


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III.    STANDARD OF REVIEW 



                "Questions regarding the interpretation and application of a statute   are 

questions of law to which we apply our independent judgment."3  We  adopt "the rule of 



law most persuasive in light of precedent, reason, and policy."4 



IV.     DISCUSSION 



        The   Superior   Court   Understood   That   Non-Party   Injunctive   Relief   Was 

        Available Under Alaska's UTPA. 



                The beneficiaries' sole argument on appeal is that "the trial court erred in 



holding   that,   absent   a   class   action,   non-party   injunctive   relief   is   unavailable   under 



Alaska's     UTPA."      The    beneficiaries    contend    that  the  superior    court's   order   "is 



inconsistent with both the plain language of [AS 45.50.535] and legislative intent." 



                Alaska     Statute  45.50.535     provides   for  private   injunctive   relief  under 



UTPA.     In particular, AS 45.50.535(a) reads: 



                Subject to (b) of this section and in addition to any right to 

                bring an action under AS 45.50.531 or other law, any person 

                who was the victim of the unlawful act, whether or not the 

                person    suffered   actual   damages,   may     bring   an  action  to 

                obtain    an  injunction    prohibiting    a  seller  or  lessor  from 

                continuing to engage in an act or practice declared unlawful 

                under AS 45.50.471. 



(Emphasis   added.)   We   agree   with   the   beneficiaries   that   the   plain   language   of   AS 



45.50.535(a) resolves the issue of whether non-party injunctive relief is available under 



        3       State v. Jeffery, 170 P.3d 226, 229 (Alaska 2007). 



        4       Jacob v. State, Dep't of Health & Soc. Servs., Office of Children's Servs. , 



177 P.3d 1181, 1184 (Alaska 2008) (citations omitted). 



                                                  -4-                                              6729 


----------------------- Page 5-----------------------

UTPA   -       the   benefit   of   an   injunction   broadly  prohibiting   a   seller   or   lessor   from 

continuing to engage in unfair trade practices would absolutely apply to non-parties.5 



                 But while we agree with this legal argument in the abstract, we disagree 



with the characterization of the superior court's action.              The beneficiaries rely on the 



final two sentences of the superior court's order, which provides: "Next, I find that it is 



not appropriate to grant non-party relief in this case.             If you want non-party relief in 



general,   you   have   to   file   a   class   action." Based   on   this   language,   the   beneficiaries 



contend the superior court held "that, absent a class action, non-party injunctive relief 



is unavailable under Alaska's UTPA." 



                 But this is clearly not the superior court's holding.              The superior court 



recognized that non-party injunctive relief was available under AS 45.50.535, because 



in the same order the court entered non-party injunctive relief (that is, injunctive relief 



that will pertain to persons who are not parties to this case).  It issued several orders that 



will effectively prohibit Whittington from continuing to engage in unfair trade practices. 



It ordered that Whittington may not act in a fiduciary capacity for more than 30 clients; 



she must provide monthly statements to clients; and she must notify all future clients 



"that she was found liable for unfair trade practices and . . . professional negligence." 



This injunctive relief will benefit non-parties by effectively prohibiting Whittington from 



engaging in unfair trade practices.   We interpret the two sentences that the beneficiaries 



focus on as representing the superior court's decision not to grantfurther  non-party relief 



beyond that which it had already ordered. 



        5        The legislative history regarding the intent of AS 45.50.535 to provide non- 



party injunctive relief under UTPA is equally compelling.                  See, e.g., Minutes, House 

Judiciary Comm. Hearing on H.B. 203, 20th Leg., 2d Sess. (Feb. 9, 1998) (statement of 

Rep. Fred Dyson and testimony of Julia Coster) (each explaining AS 45.50.535's intent 

to allow private citizens to act as private attorneys general). 



                                                    -5-                                              6729
 


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                Finally,   to   the   extent   that   appellants   seek   further   injunctive   relief,   the 

superior court's power was discretionary and it chose not to enter such relief.6                  The 



beneficiaries have not challenged this discretionary decision on appeal. 



V.      CONCLUSION 



                The superior court understood that it had the power to issue non-party 



injunctive relief because it issued such relief. For that reason, we reject the beneficiaries' 



claim that the superior court held that non-party injunctive relief is unavailable without 



a class action in Alaska, and AFFIRM the decision of the superior court. 



        6       The beneficiaries appear primarily interested in an order that would require 



Whittington to produce accountings for all of her former clients.                Because the court 

decided not to enter such an order and the beneficiaries have not challenged this decision 

on appeal, we do not reach the issue of whether the superior court had the power to order 

an accounting for non-parties in this case. 



                                                  -6-                                              6729 

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