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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Cutler v. Kodiak Island Borough (12/21/2012) sp-6738

Cutler v. Kodiak Island Borough (12/21/2012) sp-6738

        Notice: This opinion is subject to correction before publication in the PACIFIC REPORTER . 

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CEDRIC CUTLER,                                    ) 

                                                  )   Supreme Court No. S-14215 

                       Appellant,                 ) 

                                                  )   Superior Court No. 3KO-10-00062 CI 

        v.                                        ) 

                                                  )   O P I N I O N 

KODIAK ISLAND BOROUGH,                            ) 

                                                  )   No. 6738 - December 21, 2012 

                       Appellee.                  ) 


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

               Judicial District, Kodiak, Steve W. Cole, Judge. 

               Appearances:       Melvin M. Stephens, II, Kodiak, and Jill C. 

               Wittenbrader, Law Office of Jill Wittenbrader, Kodiak, for 

               Appellant.     Matthew Singer and Cheryl Mandala, Jermain 

               Dunnagan & Owens, P.C., Anchorage, for Appellee. 

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

               Justices.   [Fabe, Justice, not participating.] 

               WINFREE, Justice. 


               Boroughs are statutorily authorized to provide and charge residents for 

garbage-collection services.  The primary issue in this appeal is whether boroughs also 

have the implied or incidental authority to record a real property lien to secure payment 

of garbage-collection fees.     We conclude they do not have that authority. 

----------------------- Page 2-----------------------


                In 2007 Virgilio and Rosemarie Sabado hired Roger David to tear down a 

fire-damaged      house   on   their  property   in  Kodiak.    In   September     David   opened    a 

commercial garbage account with the Kodiak Island Borough (Borough) and paid a 

deposit for placement of a construction dumpster near the property. David accrued about 

$5,000 in garbage-service charges. The Borough applied David's deposit to this amount 

and   began   sending   him   monthly   bills   for   the   balance. No   payment   was   made   and 

David's account became delinquent. 

                In October 2008 the Sabados sold the property to Cedric Cutler, who was 

unaware of David's garbage account with the Borough.  In December the Borough sent 

David a letter advising him that a lien could be placed on the property if the account 

remained unpaid.  No payment was made, and in January 2009 the Borough recorded a 

lien against the property.      The Borough then sent lien-notice letters to David and the 

Sabados, who were still listed as the property owners in the Borough's tax files. 

                In February 2010 the Borough petitioned to foreclose outstanding tax and 

garbage-service   liens   for   years   2009   and   prior.  Cutler   learned   of   the   foreclosure 

proceeding and filed an answer and counterclaim, asserting the lien against his property 

was invalid and seeking damages for wrongful recording of a nonconsensual common 

law (NCCL) lien.1 

                In April the Borough released the lien and sought dismissal of Cutler's 

counterclaim.     Cutler argued that the lien had been wrongfully recorded and dismissal 

        1       See AS 09.45.169(2) (defining NCCL lien as not provided for by state or 

federal statute, not dependent on property owner's consent for its existence, and not 

imposed by a court recognized under state or federal law); AS 09.45.167(a) (providing 

that a person who records an NCCL lien is liable to the property owner for damages, 

costs, and attorney's fees). 

                                                 -2-                                           6738

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was   inappropriate.     He   also   argued   that   the   superior   court   should   not   enter   default 

judgment with respect to the Borough's foreclosure of other garbage-service liens. Both 

parties moved for summary judgment on Cutler's counterclaim. 

                In June the superior court entered default judgment with respect to the other 

garbage-service liens. In December the court granted the Borough's summary judgment 

motion and denied Cutler's summary judgment motion, ruling that the Borough's lien 

was not a wrongful NCCL lien.           The court did not address the Borough's alternative 

argument that even if the lien were a wrongful NCCL lien, the Borough was entitled to 

statutory immunity. 

                Cutler appeals the superior court's summary judgment ruling and                default 

judgment entry with respect to the other garbage-service liens. 


                We review a grant of summary judgment de novo, affirming "when there 

are   no   genuine   issues   of   material   fact,   and   the   prevailing   party   .   .   .   was   entitled   to 

judgment as a matter of law." 2        "The interpretation of a statute is a question of law to 

which we apply our independent judgment, interpreting the statute according to reason, 

practicality, and common sense, considering the meaning of the statute's language, its 

legislative   history,   and   its   purpose."3 The   applicability   of   state-law   immunity   is   a 

        2       Fraternal Order of Eagles v. City & Borough of Juneau , 254 P.3d 348, 352 

(Alaska 2011) (quoting Rockstad v. Erikson , 113 P.3d 1215, 1219 (Alaska 2005)). 

        3       Henrichs v. Chugach Alaska Corp. , 260 P.3d 1036, 1040 (Alaska 2011) 

(quoting Parson v. State, Dep't of Revenue, Alaska Hous. Fin. Corp. , 189 P.3d 1032, 

 1036 (Alaska 2008)). 

                                                  -3-                                            6738

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question of law that we review de novo, applying "the rule of law that is most persuasive 

in light of precedent, reason, and policy."4 


        A.      The Lien 

                1.      Background 

                The Borough recorded the garbage lien under Kodiak Island Borough Code 

(KIBC)   08.25.065(E),   which   then   provided   that   "[e]very   charge   to   a   person   .   .   .   in 

connection with garbage collection . . . constitutes a lien chargeable against the property 

and has a status the same as if the charge had been levied or assessed as a property tax."5 

The provision also provided that the Borough could foreclose such a lien "in the same 

manner as any other lien or mortgage against the property for nonpayment."6 

                Cutler argued the lien was an NCCL lien, statutorily defined as a lien that: 

"(A) is not provided for by a specific state or federal statute; (B) does not depend on the 

consent   of   the   owner   of   the   property   affected   for   its   existence;   and   (C)   is   not   an 

equitable, constructive, or other lien imposed by a court recognized under state or federal 

law[.]"7  A person who wrongfully records an NCCL lien is liable to the property owner 

for actual and punitive damages, as well as costs and reasonable attorney fees.8 

        4       Yi v. Yang, 282 P.3d 340, 344-45 (Alaska 2012) (quoting State v. Native 

Vill. of Tanana, 249 P.3d 734, 737 (Alaska 2011)) (citing Russell ex rel. J.N. v. Virg-In , 

258 P.3d 795, 802 (Alaska 2011)). 

        5       KIBC 08.25.065(E) (1996) (superseded in 2010). 

        6       Id. 

        7       AS 09.45.169(2). 

        8       AS 09.45.167(a). 

                                                  -4-                                            6738

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                To   determine   whether   the   lien   was   an   NCCL   lien,   the   superior   court 

considered   two   issues:     (1)   whether   the   Borough   ordinance   was   a   state   statute,   its 

equivalent, or not a state statute at all; and (2) if it was a state statute or its equivalent, 

whether the   ordinance was an authorized borough power.                  The court concluded the 

ordinance was the equivalent of a state statute because "all borough powers are state 

powers with which the state has entrusted the borough."              The court also concluded the 

Borough had authority to enact and enforce KIBC 08.25.065(E) because state statutes 

give boroughs authority to provide garbage-collection services, set service rates, and 

assess penalties for violation of garbage ordinances.9 

                2.      Lack of authority for code provision 

                Cutler argues the Borough does not have authority to create liens to secure 

payment for garbage services. He notes that neither AS 29.35.050 nor AS 29.35.210, the 

statutes   from   which   the   Borough   derives   its   garbage-service   authority,   "makes   any 

mention of the authority to turn garbage collection charges into . . . liens against the real 

property served."       He also argues that authority to impose penalties does not include 

authority to record liens, especially liens having the same priority as property tax liens. 

The Borough responds that "when viewed within the liberal construction afforded grants 

of authority to boroughs, the statutes authorizing creation and enforcement of a garbage 

services   system   'necessarily   or   fairly   imply'   authority   to   penalize   non-payment   of 


        9       See AS 29.35.210(a)(4) (authorizing boroughs to provide garbage services, 

subject    to   AS   29.35.050);     AS    29.35.050(a)(1)     (authorizing     garbage    collection); 

AS     29.35.050(a)(6)       (authorizing     garbage-collection       fees);   AS    29.35.050(a)(7) 

(authorizing penalties for garbage-ordinance violations). 

                                                  -5-                                               6738 

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                 We recognize that the Borough's authority to pass ordinances is liberally 

construed,10 but its "powers are not unbounded."11                The Borough may only exercise 

powers "specifically enumerated in Title 29 of the Alaska Statutes, or those 'necessarily 

or fairly implied in or incident to the purpose of all powers and functions conferred in 

[that] title.' "12  The Borough has specific authority to provide garbage services and to 

set   charges   and   non-payment   penalties,   but   not   to   record   liens   for   failure   to   make 

payment.      We are left, then, with the question of whether the authority to record real 

property   liens   to   secure   payment   of   garbage-service   charges   is   necessarily   or   fairly 

implied in or incident to its statutory garbage-collection authority. 

                 We conclude that the Borough lacks authority to record nonconsensual 

property liens to secure payment for garbage-related charges.                  We do not believe that 

when the legislature authorized municipalities to "require property owners or occupants 

of   premises   to   use   the   garbage   .   .   .   system   provided"   and   to   fix   charges   for   those 

services,13 it intended to authorize property liens, especially liens having the same super- 

priority as property tax liens,14 to secure payment for those services.                  Otherwise, we 

would be forced to conclude that municipalities may record property liens anytime the 

        10       AS 29.35.400 ("A liberal construction shall be given to all powers and 

functions of a municipality conferred in this title."). 

        11      Kenai Peninsula Borough v. Associated Grocers, Inc. , 889 P.2d 604, 606 

(Alaska 1995). 

        12      Id. (quoting AS 29.35.410). 

        13       AS 29.35.050(a)(5)-(6). 

        14       See AS 29.45.300(b) (providing property tax lien "is prior and paramount 

to all other liens or encumbrances against the property"). 

                                                    -6-                                              6738

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legislature authorizes them to provide property-related services and fix charges for those 

services.   We reject such an interpretation. 

                 Our conclusion is supported by the fact that in another municipal service 

context, the legislature specifically granted municipalities authority to record property 

liens.  The legislature expressly authorized municipalities to impose fees on residential 

property owners if the municipal police department goes to the property an excessive 

number of times, and to record property liens (without the same priority as property tax 

liens)   to  secure    the  fees.15  This    specific   grant   of   authority   strongly   suggests    the 

legislature   does   not   intend   that   municipalities   have   the   general   authority   to   record 

property   liens   securing   payment   for   property-related   services,   and   certainly   not   the 

authority to record such liens with the same priority as property tax liens. 

                 Public policy dictates the same conclusion.             In another context where a 

municipality recorded a lien without express statutory authority, we stated that "[p]ublic 

policy would be thwarted" if each municipality were allowed to develop a number of 

different   lien   systems   and   noted   that   "the   determination   of   lien   priorities   would   be 

unduly complicated."16        We further explained that the lien-recording issue "should be 

addressed by specific legislation rather than by municipal, or judicial, fiat."17             This holds 

true in the present context as well - if the Borough believes lien-recording powers are 

        15       AS 29.35.125. 

        16      Fairbanks N. Star Borough v. Howard , 608 P.2d 32, 34 (Alaska 1980) 

(holding property lien for nonpayment of sales tax was beyond borough's authority to 

collect sales tax). 

        17      Id. Following our Howard opinion, the legislature five years later expressly 

granted municipalities authority to record property liens, without the super-priority for 

property tax liens, to secure sales tax payment.              AS 29.45.650(e); ch. 12,  12, SLA 


                                                    -7-                                              6738

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necessary to secure payment for garbage services, it should ask the legislature to provide 

authority for such powers. 

                We     therefore   conclude     that  the  Borough     did   not  have   authority    to 

implement its code provision.  The authority to record property liens is neither incident18 

to nor implied19  in the Borough's authority to provide garbage services and set related 

charges, nor in the Borough's authority to set penalties.20   Accordingly, we reverse the 

superior court's ruling on this issue. 

                3.      Lack of consent 

                Cutler further argues the lien is an NCCL lien because he did not consent 

to its existence.21   The Borough responds that the Sabados consented to the lien when 

they, through their agent David, opened the commercial garbage account and promised 

to comply with the garbage ordinances, including the lien provision.                 The Borough's 

argument is unpersuasive. 

                The    record   does   not   support   the   Borough's     claim   that  the  Sabados 

authorized   David   to   act   as   their   agent   when   applying   for   the   commercial   garbage 

account, let alone to act as their agent in consenting to the imposition of a lien on their 

property.   And even if the record could support that claim, David's promise to comply 

        18      See BLACK 'S LAW DICTIONARY  830 (9th ed. 2009) (defining "incident" as 

"[d]ependent      upon,    subordinate    to,  arising   out   of,  or  otherwise    connected     with 

(something else, usu[ally] of greater importance)"). 

        19      See id. at 822 (defining "implied" as "[n]ot directly expressed; recognized 

by   law as existing inferentially"). 

        20      See    id. at   1247  (defining   "penalty"    as  "a  sum    of   money   exacted    as 

punishment for either a wrong to the state or a civil wrong"). 

        21      See AS 09.45.169(2)(B) (defining NCCL lien in part as a lien that "does not 

depend on the consent of the owner of the property affected for its existence"). 

                                                  -8-                                            6738

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with garbage ordinances could not equate to consent to the application of an invalid lien 

ordinance.    Thus, we conclude there was no consent to the lien. 

                4.      Conclusion 

                Because the garbage lien was not provided for by state statute and there was 

no   consent,   the   lien   was   an   NCCL   lien. We   therefore   reverse   the   superior   court's 

summary judgment ruling to the contrary. 

        B.      Borough Immunity 

                Alaska Statute 09.65.070(d)(2) immunizes a municipality from exercising 

or   failing   to   exercise   a   discretionary   function.22 Discretionary   function   immunity 

preserves the separation of powers inherent to our form of government by recognizing 

that it is the function of the state and municipalities, and not the courts or private citizens, 

to govern.23    Accordingly, decisions involving basic planning or policy are entitled to 

immunity, but "those that are merely operational in the sense that they implement plans 

or carry out policy" are not.24 

                The Borough argued to the superior court that it had discretionary function 

immunity under AS 09.65.070(d)(2) from Cutler's damages claim. Because the superior 

court   concluded   the   lien   was   not   an   NCCL   lien,   it   did   not   address   the   Borough's 

immunity defense. 

        22      AS 09.65.070(d)(2) specifically provides that "[a]n action for damages may 

not be brought against a municipality . . . if the claim . . . is based upon the exercise or 

performance or the failure to exercise or perform a discretionary function or duty by a 

municipality . . . whether or not the discretion involved is abused." 

        23      Guerrero ex rel. Guerrero v. Alaska Hous. Fin. Corp., 123 P.3d 966, 976 

(Alaska 2005) (citing Estate of Arrowwood v. State, 894 P.2d 642, 645 (Alaska 1995)). 

        24      Id. (citing Johnson v. State , 636 P.2d 47, 64 (Alaska 1981)). 

                                                  -9-                                             6738

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                 Cutler argues on appeal that the Borough is not entitled to immunity under 

AS 09.65.070(d)(2). He contends the Borough failed to satisfy our planning-operational 

test because it did not argue that the lien involved basic planning or policy formulation. 

Cutler also argues that even if the Borough's actions involved basic policy, immunity is 

not available because the lien violated clearly established law.  The Borough responds 

that   the   garbage-lien   provision   is   policy-level   action   to   collect   "valid   debts."   The 

Borough explains that it "has established guidelines as to the circumstances under which 

it   chooses   to   exercise   [its   lien]   authority"   and   argues   that   such   "budgetary   policy 

choices" are entitled to immunity. 

                 We agree with the Borough that it is immune from damages in this case. 

The Borough enacted the garbage-lien provision as a means to collect unpaid garbage- 

service fees. Because this represented the balancing of competing elements of legislative 

policy, the Borough is entitled to immunity for passing this ordinance.25                  The Borough 

is also immunized for recording the lien.  The garbage-lien provision did not require the 

Borough   to   record   a   lien   for   unpaid   garbage-service   fees;26   instead,   it   provided   the 

Borough and its agents discretion in determining whether to record and foreclose on 

garbage-service   liens.        With   this   discretion,   the   Borough   established   guidelines   to 

balance the competing elements of executive and budgetary policy.  Here, the Borough, 

or more specifically its agents, balanced these elements when deciding to record the lien 

        25       See id. at 977 ("Our cases have recognized that if decisions require the state 

to balance 'the detailed and competing elements of legislative or executive' policy, they 

nearly always deserve protection by discretionary function immunity." (quoting Indus. 

Indem. Co. v. State , 669 P.2d 561, 563 (Alaska 1983))). 

        26       KIBC 08.25.065(E) (1996) (superseded in 2010). 

                                                   -10-                                              6738

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and foreclose on it.     Accordingly, the Borough's actions are entitled to discretionary- 

function immunity.27 

        C.      Claims Of Non-Appearing Parties 

                Cutler argues the superior court abused its discretion and erred when it 

entered default judgment against the other properties.            He argues the court should not 

have entered default judgment while his challenge to the Borough's authority to assert 

those liens was before the court. 

                Adversity is the basic requirement for standing.28          Other than his general 

interest in preventing the Borough from recording property liens to secure payment of 

garbage fees, Cutler does not point to a personal interest in the other properties that is 

adversely affected.29    Accordingly, Cutler lacks standing to challenge the entry of default 

judgment against the other properties. 


                Based on the foregoing, we REMAND the case to the superior court to 

determine the prevailing party, if any, and to award attorney's fees, if appropriate. 

        27      See State, Dep't of Transp. & Pub. Facilities v. Sanders, 944 P.2d 453, 457- 

58 (Alaska 1997) (holding that where Department of Transportation regulations did not 

require department officials to enforce vehicle regulations, the department's decision not 

to do so was discretionary).       We also reject Cutler's argument that the Borough is not 

entitled   to   immunity   because   it   violated   "clearly   established   law"   -   this   additional 

inquiry is only necessary where it is alleged that a government official, rather than a 

municipality, has violated a statute or ordinance.          See Integrated Res. Equity Corp. v. 

Fairbanks N. Star Borough , 799 P.2d 295, 301 (Alaska 1990) (discussing discretionary 

function immunity of government officials). 

        28      Trs. for Alaska v. State, 736 P.2d 324, 327 (Alaska 1987) (citing Moore v. 

State, 553 P.2d 8, 24 n.25 (Alaska 1976)). 

        29      See   id.   ("Under   the   interest-injury   approach,   a   plaintiff   must   have   an 

interest adversely affected by the conduct complained of."). 

                                                 -11-                                              6738 

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