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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Bingman v. City of Dillingham (8/12/2016) sp-7118

Bingman v. City of Dillingham (8/12/2016) sp-7118

           Notice:   This opinion is subject to correction before publication in the P                           ACIFIC  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  

                                                                                                                                  

            corrections@akcourts.us.  



                        THE SUPREME COURT OF THE STATE OF ALASKA                                            



JAMES HENRY BINGMAN, SR.,                                            )  

                                                                     )          Supreme Court No. S-16041           

                                  Appellant,                         )  

                                                                                                                                             

                                                                     )          Superior Court No. 3DI-13-00107 CI  

           v.	                                                       )  

                                                                                                      

                                                                     )          O P I N I O N  

                                                                                       

CITY OF DILLINGHAM,                                                  )  

                                                                                                                         

                                                                     )          No. 7118 - August 12, 2016  

                                  Appellee.	                         )
  

                                                                     )
  



                                                                                                                                

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

                                                                                                         

                       Judicial District, Dillingham, Pat L. Douglass, Judge.  



                                                                                                                        

                       Appearances:                  James          Henry         Bingman,            Sr.,      pro      se,  

                                                                                                               

                       Dillingham, Appellant. Charles A. Cacciola, Boyd, Chandler  

                                                                                  

                       & Falconer, LLP, Anchorage, for Appellee.  



                                                                                                                       

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

                                                                                       

                       Bolger, Justices.  [Fabe, Justice, not participating.]  



                                               

                       MAASSEN, Justice.  



I.          INTRODUCTION  



                                                                                                                                        

                       Adelinquent taxpayer sought to redeemhis foreclosed property by offering  



                                                                                                                                                 

the city a promissory note for the amount due, without interest, that would mature 20  



                                                                                                                                                

years later.  The taxpayer asserted that his offer would be deemed accepted unless the  



                                                                                                                                               

city satisfied certain requirements to "terminate its power of acceptance."   The city  



                                                                                                                                          

explicitly rejected the offer by letter and, at the close of the statutory redemption period,  



                                                                                                                                               

filed for a tax deed in superior court.   The taxpayer intervened, arguing that he had  


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

redeemed the property, but the superior court ruled there was no contract between him                                                                                          



 and the city.              The taxpayer appeals; finding no error, we affirm.                                           



 II.           FACTS AND PROCEEDINGS           



               A.            Facts  



                             James Henry Bingman, Sr., the owner of 14 parcels of real property in the  

                                                                                                                                                                                 



 City of Dillingham, did not pay property taxes on the parcels from 2006 to 2011.  He  

                                                                                                                                                                                 



 eventually paid  the 2006-2007 taxes,  but the City  petitioned  for foreclosure of his  

                                                                                                                                                                                



property because of the taxes still outstanding.  

                                                                                                     



                             The superior court entered a judgment and decree of foreclosure in June  

                                                                                                                                                                              



 2014, conveying Bingman's property to the City subject to a statutory one-year right of  

                                                                                                                                                                                   

redemption.1  

                                                                                                                                                              

                              Four days later the City received from Bingman a "Security Agreement"  



                                                                                                                                                                                 

 and a "Promissory Note."  In the security agreement, Bingman accepted liability for the  



                                                                                                                                                                           

 2008-2011 taxes and penalties.  The promissory note, which would mature in 20 years,  



                                                                                                                                                                                 

 stated that Bingman "promise[s] to pay to the order of the City of Dillingham . . .  



                                                                                                                                                                              

 $88,250.49," the present value of the delinquency (but without future interest).  The  



                                                                                                                                                                                 

 agreement provided that once the note was delivered to and accepted by the City, its tax  



                                                                                                                                                                                   

judgment would be deemed satisfied and, in exchange, the City would be entitled to  



                                                                                                                                                                                

 enforce  the  note  against  Bingman.                                           In  essence,  Bingman  offered  to  satisfy  the  tax  



                                                                                                                                                                      

judgment against him with his own promise that he would pay the taxes in 20 years.  



                                                                                                                                                                           

                             The security agreement required the City, in order to effectively reject  



                                                                                                                                                                   

 Bingman's offer, to (1) return the agreement and all attachments; (2) deliver a corrected  



                                                                                                                                                                             

 statement of account; (3) deliver notification of refusal of tender and provide legal  



               1             AS 29.45.400 (providing that aparty                                         with an interest in foreclosed property                      



may redeemthe property within                                      one year); DillinghamMunicipal Code (DMC) 4.15.270                                                

 (2016) (providing a one-year redemption period for an interested party).                                                                                  



                                                                                         -2-                                                                                 7118
  


----------------------- Page 3-----------------------

 citations explaining why the tender was defective; and (4) deliver a signed notification                                                                                                                                                                                     



 of rejection with legal citations and an affidavit explaining why the agreement was                                                                                                                                                                                                                     



 unreasonable, in a form admissible in court.                                                                                                                     The City was given 14 days to reject the                                                                                                  



 agreement; silence or an inadequate rejection would constitute acceptance.                                                                                                                                                                                                           And any   



 correspondencemailed                                                               toan addressother than Bingman's California"ServiceAddress"                                                                                                                                        



 would not be considered "received" by Bingman.                                                                                                



                                                 On   June   16,   2014,   the   City   mailed   a   letter   in   which   it   rejected   all   of  



 Bingman's "terms, offers, proposals, and requests"; the letter was sent to Bingman's                                                                                                                                                                                          



 Dillingham address instead of the California address he had designated for service. The                                                                                                                                                                                                                 



 City did not return the promissory note or any other of Bingman's documents. Bingman                                                                                                                                                                                                  



 asserts that by June 28 - after his 14-day deadline - he had not received the City's                                                                                                                                                                                                            



 letter.  Over the year that followed he did not make any other attempts to redeem the                                                                                                                                                                                                                      



 property.   



                         B.                      Proceedings  



                                                 On July 20, 2015, after publishing notice that the redemption period was                                                                               



 expiring, the City asked the superior court to issue a tax deed for 13 of Bingman's                                                                                                                                                                                           



                                       2  

 properties.                                                                                                                                                                                                                                                                                                

                                                 The court allowed Bingman to intervene as a party of interest "for the  



                                                                                                                                                                                                                                                                                            

 limited purpose of litigating whether he exercised his right of redemption."  In support  



                                                                                                                                                                                                                                                                               

 of  a  motion  to  compel  the  City  to  acknowledge  his  satisfaction  of  the  underlying  



                                                                                                                                                                                                                                                                                                             

judgment of foreclosure, Bingman argued that he had redeemed the property because the  



                                                                                                                                                                                                                                                                                                    

 City accepted his offer through silence, kept the promissory note as "tender," and failed  



                                                                                                                                                                                                                                                                                

 to satisfy his requirements for a proper rejection.  The superior court denied Bingman's  



                                                                                                                                                                                                                                                                                                             

 motion and concluded that he had not redeemed the property, noting that he had tried the  



                         2                       One of Bingman's 14foreclosed properties had been redeemed by someone  

                                                                                                                                                                                                                                                                                         

 else.  

                   



                                                                                                                                                        -3-                                                                                                                                                           7118  


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                                                                                                                        3  

same strategy unsuccessfully in an earlier tax case.                                                                         The court held that no contract                        



existed because there was no meeting of the minds and that in any event Bingman's                                                                                            



proposed contract would have been unenforceable under the statute of frauds. Bingman                                                                                              



moved for reconsideration, which the superior court denied.                                                                                 Bingman appeals.   



III.            STANDARDS OF REVIEW                           



                               We review "questions of contract formation and interpretation de novo" in                                                                                           

the absence of factual disputes.                                          4  

                                                                                                                                                                                                

                                                                                Factual findings relevant to contract formation are  



                                                        5  

                                                                                                                                                                                        

reviewed for clear error.                                   "Findings are clearly erroneous if review of the entire record  



                                                                                                                                                                                    6  

                                                                                                                                                                                  

leaves us with 'a definite and firm conviction that a mistake has been made.' " 



                                                                                                                                                                                               

                               A  trial  court's  denial  of  a  motion  to  compel  acknowledgment  of  the  



                                                                                                                                              7  

                                                                                                                      

satisfaction of a judgment is reviewed for abuse of discretion. 



               3               See Bingman v. City of Dillingham (Bingman I)                                                                 , No. S-15706, 2015 WL   



 8521289 (Alaska Dec. 9, 2015).                                             



                4              Chilkoot  Lumber  Co.  v.  Rainbow  Glacier  Seafoods,  Inc.,  252  P.3d  

                                                                                                                                                                                           

 1011,1014 (Alaska 2011) (citing Copper River Sch. Dist. v. Traw, 9 P.3d 280, 283  

                                                                                                                                                                                              

(Alaska 2000)).  

                    



                5              Id. at 1014 n.2 (citing Munn v. Thornton, 956 P.2d 1213, 1217-18 (Alaska  

                                                                                                                                                                                     

2000)).  



                6              Sherman B. v. State, Dep't of Health & Soc. Servs., Office of Children's  

                                                                                                                                                                              

Servs., 290 P.3d 421, 427-28 (Alaska 2012) (quoting Barbara P. v. State, Dep't of  

                                                                                                                                                                                                  

Health & Soc. Servs., Office of Children's Servs., 234 P.3d 1245, 1253 (Alaska 2010)).  

                                                                                                                                                                                      



                7              See  AS  09.30.300(a)  ("[U]pon  motion,  the  court  may  compel  an  

                                                                                                                                                                                                

acknowledgment of satisfaction or may order the entry of satisfaction to be made without  

                                                                                                                                                                                      

it."); cf. Flores v. Huppenthal, 789 F.3d 994, 1000-01 (9th Cir. 2015) (noting that an  

                                                                                                                                                                                                 

abuse of discretion standard applies to a federal district court's decision whether "to  

                                                                                                                                                                           

relieve a party from final judgment if 'the judgment has been satisfied, released, or  

                                                                                                                                                                                                 

discharged' " (quoting Fed. R. Civ. P. 60(b)(5))).  

                                                                                         



                                                                                                -4-                                                                                        7118
  


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

IV.	         DISCUSSION  



             The City Did Not Accept Bingman's Offer.  

                                                                                            



                           Bingman argues that he formed a contract with the City because the City  

                                                                                           



"did not terminate its power to accept . . . in accordance with the terms of the offer,"  

                                                                                                                                                              



manifested  assent by  accepting  and  retaining  the promissory note as "tender," and  

                                                                                                                                                                    



intended its silence to operate as acceptance. These arguments have no support in either  

                                                                                                                                                                 



the law or the facts.  

                             



                          Until an offeree unequivocally accepts the offeror's terms, there is no  

                                                                                                                                                                      

contract.8  

                                                                                                                                                                      

                     The mere fact that the offeree has not "terminate[d] its power to accept" the  



                                                                                                                                                          

offer is not, without more, evidence that it has accepted.  And in this case the evidence  



                                                                                                                                                                   

shows the opposite:  that the City explicitly rejected Bingman's offer.  The City's June  



                                                                                                                                                           

 16, 2014 letter to Bingman stated that "[a]ll the terms, offers, proposals, and requests  



                                                                                                                                                                   

contained in your correspondence are rejected. The City does not agree to grant any kind  



                                                                                                                                                      

of security interest to you for any reason, nor does it accept your apparent proposal to  



                                                              

enter into a promissory note."  



                                                                                                                                                                      

                           Bingman argues that the City actually accepted his offer because it did not  



                                                                                                                                                                     

return the promissory note to him along with its rejection letter.   But a debt is not  



                                                                                                                                                                         

automatically discharged or suspended simply because the debtor mails the creditor a  



                                                                                                                                                                       

promissory note and the creditor keeps it.  Alaska Statute 45.03.310(b) provides that "if  



                                                                                                                                                                      

a note . . . is taken for an obligation, the obligation is suspended to the same extent the  



                                                                                                                                                                     

obligation would be discharged if an amount of money equal to the amount of the  



             8            See Municipality of Anchorage v. Stenseth                                              , 361 P.3d 898, 906 (Alaska                



2015) (identifying "an unequivocal acceptance of the terms [of the offer] by the offeree"                                                                   

as one of the requirements for the formation of an express contract (quoting                                                                             Childs v.   

Kalgin Island Lodge                      , 779 P.2d 310, 314 (Alaska 1989))).                     



                                                                                   -5-	                                                                          7118
  


----------------------- Page 6-----------------------

instrument were taken."  But " '[t]aking' the instrument . . . requires more than simply                                             



its   delivery   by   the   obligor   to   the   obligee.     The   obligee   must  perform some                                      act   of  



                                                                                                                                              9  

accepting the instrument in either conditional or absolute payment of the obligation."                                                            



                                                                                                                                             

An obligee who returns the instrument clearly has not taken it; one who negotiates or  



                                                          10  

                                                                                                                                         

deposits the instrument clearly has.                           But if an "obligee retains the instrument but does  



                                                                                                                                 

not  negotiate  or  deposit  it,"  then  "his  intent  to  accept  the  instrument  in  payment  



                                                                                                                            11  

                                                                                                                                               

determines whether he takes the instrument for the underlying obligation."                                                       In such a  



                                                                                                                                             

case, "[t]he court should examine what objectively appears to be the obligee's intent as  



                                            12  

                              

evidenced by his actions." 



                                                                                                                                            

                      The City's actions clearly indicate that it did not intend its retention of the  



                                                                                                                                        

note to operate as an acceptance of Bingman's proposal.  Its rejection letter could leave  



                                                                                                                                        

no doubt in a reasonable mind; and even if Bingman did not receive the City's letter  



                                                                                                                              

because it was not mailed to his stipulated service address, as he contends, the letter is  



                                                                                                                                          

still objective evidence of the City's contemporaneous intent.  The City confirmed this  



                                                                                                                                             

intent by its later, wholly consistent conduct.   If a property is redeemed, the City is  



                                                                                                                                  

required by statute to "record the redemption and issue a certificate containing a property  



                                                                                                                                            

description,  the  redemption  amount,  and  the  dates  of  judgment  and  decree  of  



           9          6  WILLIAM  D.  HAWKLAND  &  LARY  LAWRENCE,  HAWKLAND 'S UNIFORM  



COMMERCIAL  CODE  SERIES    3-310:1  (Frederick  H.  Miller  ed.,  rev.  ed.  2016);  see  also  

6B   DAVID   FRISCH,   LAWRENCE 'S   ANDERSON   ON   THE   UNIFORM   COMMERCIAL   CODE  

  3-310:6  (3d  rev.  ed.  2016)  ("[T]he  obligee's  receipt  by  mail  of  an  instrument  does  not  

constitute  her  taking  of  the  instrument  for  the  underlying  obligation.").  



           10         HAWKLAND  &  LAWRENCE,  supra  note  9.  



           11         Id.  



           12         Id.  



                                                                      -6-                                                              7118
  


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                             13  

foreclosure."                     But the City never recorded Bingman's "redemption," nor did it issue a                                                                                       



certificate indicating that he had redeemed the property.                                                                        Instead, beginning June 11,                              



2015, the City published a "Notice of the Expiration of Redemption Period" for four                                                                                                     



                                                                                                                                                                    14  

consecutive weeks and sent copies of the notice to all lienholders of record.                                                                                                               

                                                                                                                                                                         On July 20  



                                                                                                                                                                                       

the City moved for the properties to be transferred by tax deed because they had not been  



                                                                                                                                                                                      

redeemed. It requested a tax deed for only 13 of the 14 properties it had foreclosed upon  



                                                                                                                                                                            

because a different person redeemed one of the lots (even though, according to Bingman,  



                                                                                                                               

he had already redeemed that lot himself by his security agreement).  



                                                                                                                                                                                            

                              Bingman also argues that it was the City's responsibility to make sure he  



                                                                                                                                                                                  

knew about its rejection, because he had informed the City he would interpret its silence  



                                                                                                      

as acceptance.  The Restatement (Second) of Contracts notes that "[t]he mere fact that  



                                                                                                                                                                                           

an offeror states that silence will constitute acceptance does not deprive the offeree of his  



                                                                                                                                                                                            

privilege to remain silent without accepting," and "the offeror who has invited such an  



                                                                                                                                                                          15  

                                                                                                                                                                                          

acceptance  cannot complain  of the resulting  uncertainty  in  his position."                                                                                                   As the  



                                                                                                                                                                                         

plaintiff, Bingman bore the burden to prove "unequivocal acceptance by the [City] and  



                                                                                                                                         16  

                                                                                                                                                                              

an intent to be bound" by the terms of the purported contract.                                                                                 The evidence supports  



               13             AS 29.45.410; DMC 4.15.280.                     



               14             See  AS 29.45.440(a) (providing for notice and preparations before the  

                                                                                                                                                                                          

expiration of the redemption period); DMC 4.15.310(A).  

                                                                                                   



               15             RESTATEMENT   (SECOND)   OF   CONTRACTS    69 cmt. c (A                                                                          M. L      AW. I        NST .  



 1981).  



               16             Magill v. Nelbro Packing Co.                                       , 43 P.3d 140, 142 (Alaska 2001) (quoting                                    



Davis v. Dykman                        , 938 P.2d 1002, 1006 (Alaska 1997)).                                 



                                                                                              -7-                                                                                     7118
  


----------------------- Page 8-----------------------

only the conclusions that the City did not remain silent at all and that, through its letter                                                                                                            

to Bingman and its subsequent conduct, it fully intended to reject Bingman's proposal.                                                                                                                           17  



V.               CONCLUSION  



                                                                                                                                              18  

                                                                                                                     

                                 We AFFIRM the superior court's judgment. 



                 17              Wenecessarily rejectBingman'sargumentthatherepurchasedtheproperty                                                                                               



pursuant to AS 29.45.470, which allows a taxpayer to repurchase foreclosed property                                                                                                             

that remains in municipal ownership.                                                           His June 2014 offer was made well before the                                                                  

repurchase period, which began when the deeds transferred the property to the City in  

                                                                                                                                                                                          

July 2015. And his offer failed to meet any of the provisions of the statute for calculating  

                                                                     

the purchase price.  See AS 29.45.470(a)(1)-(4).  



                                                                                                                                                                                                            

                                 Bingman also argues briefly that he has been deprived of due process and  

                                                                                                                                                                                              

equal protection because the superior court failed to "exercise due care."  But Bingman  

                                                                                                                                                                                                          

has not demonstrated that the superior court committed any error, let alone any that rises  

                                                                                                     

to the level of a constitutional violation.  



                                                                                                                                                                                                                 

                                 Finally, because of our decision that there was no contract, we find it  

                                                                                                                                                                                                             

unnecessary to reach the statute of frauds, the superior court's alternative ground for  

                                                  

denying Bingman's motion.  



                 18              In light of the frivolousness of Bingman's arguments, we will entertain a  

                                                                                                                                                                                

motion by the City for its full reasonable attorney's fees incurred on appeal.  See Alaska  

                                                                                                                                                                                                    

R. App. P. 508(e)(2)-(3).  

                            



                                                                                                       -8-                                                                                              7118
  

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