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You can search the entire site. or go to the recent opinions, or the chronological or subject indices. Arcticorp v. C Care Services, LLC (7/20/2018) sp-7261

Arcticorp v. C Care Services, LLC (7/20/2018) sp-7261

          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  



ARCTICORP,                                                        )  

                                                                  )    Supreme Court No. S-16452  

                                                                                                       

                              Appellant,                          )  

                                                                  )    Superior  Court  No.  3AN-15-05556  CI  

          v.                                                      )  

                                                                                           

                                                                  )    O P I N I O N  

                                            

C CARE SERVICES, LLC and                                          )  

                                                                                                       

                                     

STATE OF ALASKA, DEPARTMENT                                       )    No. 7261 - July 20, 2018  

                                          

OF HEALTH & SOCIAL SERVICES,                                      )  

                                                                  )  

                              Appellees.                          )  

                                                                  )  



                                                                                                        

                                 

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

                                                                                            

                    Judicial District, Anchorage, Eric A. Aarseth, Judge.  



                                                                                                     

                    Appearances:             Douglas R. McMillan and John W. Colver,  

                                                                                                                  

                    Colver   &  McMillan,   LLC,   Anchorage,   for   Appellant.  

                                                                                                           

                     Scott D. Friend, Assistant Attorney General, Anchorage, and  

                                                                                                  

                    Jahna Lindemuth, Attorney General, Juneau, for Appellee  

                                                                                                            

                     State of Alaska, Department of Health & Social Services. No  

                                                                                     

                    appearance by Appellee C Care Services, LLC.  



                                                                                                     

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

                                         

                    and Carney, Justices.  



                                        

                    WINFREE, Justice.  



I.        INTRODUCTION  



                                                                                                                        

                    A commercial tenant breachedits leaseandowedunpaid rent. Thelandlord  



                                                                                                                        

sued and obtained a writ of attachment against any funds owed the tenant from Alaska's  


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

Department of Health and Social Services (DHSS).                                                                                  DHSS replied to the writ by stating                                     



it owed nothing to the tenant because a recent audit showed the tenant owed DHSS $1.4                                                                                                                           



million. Without responding to DHSS's reply the landlord moved for a writ of execution                                                                                                            



against DHSS, which the superior court denied after finding there were no funds to                                                                                                                                   



attach. The court denied the landlord's motion for reconsideration, as well as its request                                                                                                               



for a hearing to examine DHSS.                                                          The landlord appeals the denial of its motion for                                                                         



reconsideration and seeks a remand for a hearing to examine DHSS.                                                                                                                   We affirm the                 



superior court's orders.                                     



                                                       

II.              FACTS AND PROCEEDINGS  



                                  Arcticorp, a commercial real estate company, leased property to C Care  

                                                                                                                                                                                                              



Services, LLC for a five-year term beginning July 1, 2014.  The following month the  

                                                                                                                                                                                                                   



federal government apparently shut down C Care pending a criminal investigation for  

                                                                                                                                                                                                                   



Medicare and Medicaid billing fraud.  Unable to operate, C Care failed to pay rent after  

                                                                                                                                                                                                               



October 2014.  

                                       



                                  Arcticorp filed a complaint for breach of contract in March 2015 and  

                                                                                                                                                                                                                



simultaneously movedfor a prejudgment writ of attachment against CCare under Alaska  

                                                                                                                                                                                                          

Civil Rule 891 and AS 09.40.010.2   Arcticorp also sought to attach any funds DHSS may  

                                                                                                                                                                                                                



have owed for services C Care rendered prior to its forced closure.  Arcticorp did not  

                                                                                                                                                                                                                  



attempt to serve DHSS the writ papers.  

                                                                                                      



                                  Around  the  time  Arcticorp  filed  its  complaint,  DHSS  was  seeking  to  

                                                                                                                                                                                                                     



recover funds it was owed by C Care for Medicaid billing fraud.  After an audit, in mid- 

                                                                                                                                                                                                               



March DHSS informed C Care that Medicaid overpayments made to C Care exceeded  

                                                                                                                                                                                



                 1                See  Alaska R. Civ. P. 89 (providing procedures for writs of attachment).                                                                                                               



                 2  

                                                                                                                                                                                                                    

                                  See  AS  09.40.010(a)  (enumerating  actions  in  which  attachment  is  

                                

authorized).  



                                                                                                          -2-                                                                                                 7261
  


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

 $1.4 million.   Before DHSS began its recovery process C Care had an opportunity to                                                                                                                                                                                                                               



appeal that determination, but it did not.                                                                                                                                     The decision not to appeal may have been a                                                                                                                                                   



consequence of a plea agreement C Care's owner entered into in May in a state criminal                                                                                                                                                                                                                                                        



case against her.                                                        According to Arcticorp's summary of the plea agreement, C Care's                                                                                                                                                                                                           



owner agreed not to appeal certain overpayment and restitution findings and to forward                                                                                                                                                                                                                                                         



any funds received from others to pay C Care's debt to DHSS.                                                                                                                                                                                                                  



                                                         In early April C Care answered Arcticorp's complaint and admitted to all                                                                                                                                                                                                                                     



allegations of breach and money owed. Shortly thereafter the superior court issued a writ                                                                                                                                                                                                                                                                   



of attachment, ordering DHSS's accounting department to attach any and all accounts   



owed to C Care to satisfy its debt to Arcticorp. Later that month Arcticorp wrote a letter                                                                                                                                                                                                                                                             



notifying DHSS of the writ; it was addressed "To Whom It May Concern" and mailed                                                                                                                                                                               



to   a   post   office   box   of   the   "Alaska   Department   of   Health   and   Social   Services."     

Arcticorp did not attempt to serve the writ on DHSS according to the Civil Rules.                                                                                                                                                                                                                                                                               3  In  



August C Care confessed judgment in Arcticorp's favor, and both parties entered a  

                                                                                                                                                                                                                                                                                                                                                                           



stipulation and covenant not to execute.  

                                                                                                                                                                              



                                                         In September, five months after the court issued the writ of attachment,  

                                                                                                                                                                                                                                                                                                                               



DHSS replied to Arcticorp that no money was owed C Care and that there were no funds  

                                                                                                                                                                                                                                                                                                                                                         



to attach.  DHSS explained that the Office of the Attorney General serves as counsel for  

                                                                                                                                                                                                                                                                                                                                                                     



DHSS and that the writ of attachment, although sent to DHSS, had not been forwarded  

                                                                                                                                                                                                                                                                                                                                     



                            3                            Alaska Civil Rules 4(d)(7) and (8) provide that service of process upon a                                                                                                                                                                                                                                          



 State agency must be made "by registered or certified mail to the Attorney General of                                                                                                                                                                                                                                                                                  

Alaska" in Juneau (and the chief of the Attorney General's Office in Anchorage or                                                                                                                                                                                                                                                                                      

Fairbanks if the matter is filed in the Third or Fourth Judicial District) and by "delivering                                                                                                                                                                                                                                    

a copy of the summons and of the complaint to such . . . agency."                                                                                                                                                                                                                             See also                                STATE OF   

ALASKA, DEP 'T  OF  LAW, OP. ATT'Y  GEN., 1977 WL 21953, at *2 (Mar. 31, 1977)                                                                                                                                                                                                                                                                        

                                                                                                                                                                   

(concluding legislature intended that Rules 4(d)(7) and (8) also apply to service of                                                                                                                                                                                                                                                                                   

attachment papers).                                                                      



                                                                                                                                                                                   -3-                                                                                                                                                                       7261
  


----------------------- Page 4-----------------------

                                                                                                                              

to the Office of the Attorney General until August.  DHSS further noted that before the  



                                                                                                                          

writ of attachment was issued DHSS had audited C Care and determined C Care owed  



                                                                                                                    

DHSS over $1.4 million.  DHSS's reply included the affidavit of its medical assistance  



                                                                                                                           

administrator  who  conducted  the  audit,  as  well  as  its  correspondence  with  C Care  



                                            

concerning the audit results.  



                                                                                                                                

                    In October, after receiving DHSS's reply, Arcticorp requested an entry of  



a final judgment on confession against C Care; the court entered the final judgment in  



December.  



                                                                                                                           

                    Arcticorp moved for a writ of execution against DHSS in May 2016, eight  



                                                                                                                               

months  after  DHSS  had  indicated  there  were  no  funds  to  attach  in  response  to  



Arcticorp's writ.  The court denied the motion.  It found credible DHSS's explanation  



                                                                                                                            

that no funds were payable to C Care. The court reasoned that "[b]ecause no funds exist  



                                                                                                                              

and because [DHSS] bears no duty otherwise to pay the defendant's debts, entry of the  



                                                                                                                             

requested  order  would  be  futile."                  The  court  also  observed  that  Arcticorp  had  not  



                                                                                                                        

properly served DHSS the original motion for a writ of attachment, delaying the court's  



                                                                                                                       

receipt of important information until after it entered the writ of attachment and denying  



                                                                                                                              

DHSS "due process within which to confirm or deny that such funds existed."  But the  



                                                                                        

court noted DHSS had not asked that the writ be vacated.  



                                                                                                                           

                    Arcticorp moved for reconsideration, advancing three arguments.  First,  



                                                                                                                       

Arcticorp had no duty to serve the motion for a writ of attachment on DHSS because  



                                                                                                                      

DHSS was not a required party to the action.   Second, the court should ignore DHSS's  



                                                                                                                            

reply because DHSS, a non-party, had not properly intervened under Alaska Civil Rule  



                                                                                                                                    

24.   Finally, DHSS had not met its burden to show that it owed C Care no funds.  



                                                                                                                             

Arcticorp also requested a garnishee proceeding, requiring DHSS to "show cause and  



                                                                                                                           

submit evidence in support of [its] position" that it owed C Care no funds.  The court  



                                                                                                                         

invited C Care and DHSS to respond to Arcticorp's motion, but neither did so.  



                                                               -4-                                                        7261
  


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

                                                  The superior court denied Arcticorp's motion for reconsideration.                                                                                                                                                                                               The  



 court found Arcticorp had not provided DHSS proper notice of the original motion for                                                                                                                                                                                                                                    



 a writ of attachment and characterized Arcticorp's Rule 24 intervention argument as                                                                                                                                                                                                                                       



 "absurd," given that it "invited DHSS['s] participation in the case when it sought the                                                                                                                                                                                                                                 



 [w]rit   of   [a]ttachment."     Questioning   Arcticorp's   standing   to   "challenge   DHSS['s]  



 determination that it does not owe [C Care] money," the court rejected Arcticorp's                                                                                                                                                                                                     



 "contention that the burden of proof falls on DHSS."                                                                                                                                                        The court held that DHSS had                                                                             



provided "sufficient evidencetoshowthat execution is not warranted"                                                                                                                                                                                               and that, although                



the "[w]rit . . . froze any money DHSS might owe" C Care, "the [w]rit did not establish                                                                                                                                                                                                            



that in fact DHSS actually held money owed to [C Care]."                                                                                                                                                                      



                                                  Arcticorpseeks reversal                                                                  oftheorder denyingits                                                                motion for reconsideration,   



 arguing that DHSS failed to timely intervene under Rule 24.                                                                                                                                                                                      Arcticorp also seeks                                        



remand for a garnishee proceeding to examine DHSS.                                                                                                                                                           



                                                                                               

III.                      STANDARD OF REVIEW  



                                                  "The respective burdens to be borne by 'garnisher' . . . and 'garnishee' "  

                                                                                                                                                                     

involve questions of statutory interpretation.4                                                                                                                                 We apply our independent judgment to  

                                                                                                                                                                                                                                                                                                                            



 such questions, reviewing a court's interpretation of statutes de novo and "adopting the  

                                                                                                                                                                                                                                                                                                                         

rule of law that is most persuasive in light of precedent, reason, and policy."5                                                                                                                                                                                                                      We also  

                                                                                                                                                                                                                                                                                                                     



                         4                        See von Gemmingen v. First Nat'l Bank of Anchorage                                                                                                                                                     (von Gemmingen I                                                   ),  



 789   P.2d   353,   355   (Alaska   1990);   Anchorage   Helicopter   Serv.,   Inc.   v.  Anchorage  

 Westward Hotel                                              , 417 P.2d 903, 906 & n.1 (Alaska 1966).                                                                                           



                         5                        Ruerup v. Ruerup, 408 P.3d 1203, 1206 (Alaska 2018) (quoting Stephanie  

                                                                                                                                                                                                                                                                                               

F. v. George C., 270 P.3d 737, 746 (Alaska 2012)).  

                                                                                                                                                                      



                                                                                                                                                             -5-                                                                                                                                                  7261
  


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

apply   our   "independent   judgment   to   decide   whether   it   was   error   not   to   hold   an  



                                                                                           6  

evidentiary hearing" to resolve a disputed factual issue.                                     



IV.        DISCUSSION  



                                                                                                                                        

                      We  begin  our  analysis  with  an  overview  of  writs  of  attachment  and  



                                                                                                                                           

garnishee proceedings.  After a civil action commences, Rule 89 permits a plaintiff to  



                                                                                                                            

apply to the court to "attach" the property of the defendant "as security for satisfaction  



                                                             7  

                                                                                                                                 

of a judgment that may be recovered."                           The plaintiff must file a motion with an affidavit  



                                                                                                                                       8  

                                                                                                                                          A  

showing the existence of a contractual debt and the plaintiff's right to recover it. 



                                                                                                                                          

court may issue the writ of attachment only after the defendant is (1) served notice of the  



                                                                                                                                            9  

                                                                                                                                                

motion and a copy of the affidavit, and (2) given an opportunity for a judicial hearing. 



                                                                                                                                         

At the hearing the plaintiff must "establish by a preponderance of the evidence the  



                                                                                                                                        

probable validity of the plaintiff's claim for relief in the action and the absence of any  



                                                                                                                                           10  

                                                                                                                                                

reasonable probability that a successful defense can be asserted by the defendant." 



Upon this showing the court must issue a writ of attachment against the defendant, which  

                                                                                                                                     



"shall be directed to a peace officer and shall require the peace officer to attach and  

                                                                                                                                        



           6          See  Limeres  v.  Limeres,  367  P.3d  683,  686  (Alaska  2016)  (quoting  Routh  



v.  Andreassen ,   19  P.3d  593,  595  (Alaska  2001)).   



           7          Alaska  R.  Civ.  P.  89(a).  



           8          Alaska  R.  Civ.  P.  89(b).    



           9          Alaska  R.  Civ.  P.  89(c)(1)-(2).   



           10         Alaska  R.  Civ.  P.  89(d).   



                                                                     -6-                                                              7261
  


----------------------- Page 7-----------------------

                                                                                                                      11  

safely keep property of the defendant not exempt from execution."                                                         Debts owed by   

third parties to the defendant may be attached.                                 12  



                       Third-partydebtors holding property that cannotbetakenintocustodymust  

                                                                                                                                               

                                                                                                                                       13   Upon  

be served a writ of attachment and a notice specifying the property attached.                                                               

                                                                                                                        



service of the writ and notice, AS 09.40.060 provides that the third party "shall within  

                                                                                                                                           



a reasonable time and in any event within 24 hours furnish . . . a statement designating  

                                                                                                                                  



the amount and description of any personal property . . . belonging to the defendant, or  

                                                                                                                                                   



any debt the person owes to the defendant."  If the plaintiff is unsatisfied by the third  

                                                                                                                                              



party's response, or the third party fails to respond at all, the third party "may be ordered  

                                                                                                                                         

to appear before the court and be examined concerning . . . the debt."14  

                                                                                                              



                       Rule  89(l)  governs  the  in-court  examination  of  a  third  party,  called  a  

                                                                                                                                                    

                                          15  a third-party debtor who is ordered to appear before the court  

"garnishee proceeding";                                                                                                                       

                     

for  such  an  examination  is  called  a  "garnishee."16                                     The  equivalent  of  a  service  of  

                                                                                                                                                  

                                                                                  17    During  garnishee  proceedings  the  

summons  must  be  made  upon  the  garnishee.                                                                                                  

                                                                



            11         Alaska R. Civ. P. 89(e).                   



            12         AS 09.40.040 ("All persons having in their possession personal property  

                                                                                      

belonging to the defendant or owing a debt to the defendant at the time of service upon  

                                                                                                                                              

them of the writ and notice shall deliver, transfer, or pay the property or debts to the  

                                                                                                                                                 

peace officer . . . .").  

                                     



            13         Alaska R. Civ. P. 89(f)(3).  We note that nothing in Rule 89 suggests a  

                                                                                                                                                    

third-party debtor mustbeserved theoriginal motion for prejudgment writ ofattachment.  

                                                                                                                                   



            14         AS 09.40.060.  

                               



            15         See Alaska R. Civ. P. 89(l).  

                                                                         



            16         Alaska R. Civ. P. 89(l)(1).  

                                                                       



            17         Id. ("The order . . . shall be served upon the garnishee and return of service  

                                                                                                                                          

                                                                                                                              (continued...)  



                                                                        -7-                                                                  7261
  


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

"plaintiff may utilize the rules of discovery . . . with respect to all matters relating to                                                          



                                                                                                                                    18  

property of the defendant believed to be in the possession of the garnishee."                                                                        

                                                                                                                                        Issues of  



                                                                                          19  

                                                                                                

                                                                         

fact may be resolved through a trial with witnesses. 



                                                                                                                                                  

                       The court may enter judgment against the garnishee if the court finds that  



                                                                                                                                         

the garnishee has any property of the defendant, whether "beyond the amount admitted  



                                                                                                                                                     20  

                                                                                                                                                          

in  the  garnishee's  statement,  or  in  any  amount  if  a  statement  is  not  furnished." 



Execution of the writ of attachment "may issue upon a judgment against a garnishee as  

                                                                                                                                                     

upon a judgment between plaintiff and defendant."21  

                                                                      



                       Given this framework, we address Arcticorp's arguments that the superior  

                                                                                                                                          



court erred by (1) considering DHSS's reply to the writ of attachment because it failed  

                                                                                                                                              



to timely intervene and was not a party to the action, and (2) denying Arcticorp's request  

                                                                                                                                            



                                                                                                       22  

for a show-cause hearing in its motion for reconsideration.                                                 

                                                                           



            17          (...continued)
  



                                                                                                                                                       

made in the manner provided for service of summons and return thereof in Rule 4.").
  



            18         Alaska  R.  Civ.  P.  89(l)(3).   



            19         Alaska  R.  Civ.  P.  89(l)(4).   



            20         Alaska  R.  Civ.  P.  89(l)(5).   



            21         Alaska  R.  Civ.  P.  89(l)(7).   



            22         Although  Arcticorp  briefed  the  issue  whether  it  properly  served  the  writ  of  



attachment  on  DHSS,  DHSS  did  not  ask  for  the  writ  of  attachment  to  be  vacated  on  this  

or  any  other  basis  in  the  superior  court,  and  it  does  not  do  so  in  this  court.   Because  the  

superior  court's  decision  to  deny  the  motion  for  a  writ  of  execution  rested  on  a  different  

ground  -  the  unavailability  of  funds  to  attach  -  we  do  not  address  whether  Arcticorp  

failed  to  properly  serve  the  writ  of  attachment.    



                                                                         -8-                                                                   7261
  


----------------------- Page 9-----------------------

                 A.	              It   Was   Not   Error   To   Consider   DHSS's   Reply   To   The   Writ   Of  

                                  Attachment.  



                                  Arcticorp argues the superior court erred by considering DHSS's reply to                                                                                                               



the writ of attachment because DHSS neglected to file a timely motion to intervene under                                                                                                                       



Rule 24. Arcticorp urges reversal of the order denying the writ of execution because the                                                                                                                              



court   should    not    have    allowed    DHSS    a    "de    facto    intervention."       Arcticorp  



misunderstands garnishment procedures.                                                                     



                                  We have held that garnishment procedures are "narrowly construed" to                                                                                                                  



                                                                                                                                                                                                                         23  

"protect the innocent garnishee from liability to either garnishor or judgment debtor."                                                                                                                                        



                                                                                                                                                                                                                        

Neither Alaska's statutes nor civil rules require formal intervention for a garnishee to  



respond to a writ of attachment.  They rather require that a garnishee receive notice of  



                                                                                                                                                            24  

                                                                                                                                                                                                    

the writ of attachment and be given an opportunity to respond.                                                                                                    Together AS 09.40.060  



                                                                                                                                                                                                     

and Rule 89(l) require the garnishee to furnish a reply describing the debt allegedly  



                                                                                                                                                                                                     

owed, and, in anticipation of a dispute arising from the reply - i.e., that the garnishee  



                                                                                                                                                                                                                          

might contest the amount of debt allegedly owed to the defendant - they provide a  



                                                                             25  

                                                      

procedure to resolve disputes. 



                                  Alaska Statute 09.40.060 describes the procedure for response by a third  

                                                                                                                                        



party indebted to a defendant and states in its entirety:  

                                                                                                                      



                                  When a peace officer with a writ of attachment applies to a  

                                                                                                                                                                                        

                                  person for the purpose of attaching property mentioned in the  

                                                                                                                                                                                    

                                  attachment, the person shall within a reasonable time and in  

                                                                                                                                                                                       

                                  any event within 24 hours furnish the peace officer with a  

                                                                                                                                                                                        

                                  statement  designating  the  amount  and  description  of  any  

                                                                                                                                                                                 

                                  personal property in the person's possession belonging to the  

                                                                                                                                                                                    



                 23               Beery v. Browning                               , 717 P.2d 365, 368 (Alaska 1986).                                                          



                 24               See id.           ; AS 09.40.060; Alaska R. Civ. P. 89(f)(3), (                                                                  l).   



                 25               See  A.S. 09.40.060; Alaska R. Civ. P. 89(                                                                  l).   



                                                                                                           -9-	                                                                                                  7261
  


----------------------- Page 10-----------------------

                    defendant, or any debt the person owes to the defendant.  If  

                                                                                                            

                    the   person   refuses   to   do   so,   or   if   the   statement   is  

                                                                                                             

                    unsatisfactory to the plaintiff, the person may be ordered to  

                                                                                                           

                    appear  before  the  court  and  be  examined  concerning  the  

                                                                   

                    property or debt.  (Emphases added.)  



                                                                                                                         

The statute not only allows the third party to respond to a writ of attachment, it requires  



                                                                         

a response upon receiving notice of the writ of attachment.  



                                                                                                                               

                    Rule 89(l)(5), governing judgments following a garnishee proceeding, also  



                                                                                    

contemplates a reply upon service of the writ, stating:  



                                                                                                            

                    If it shall be found [after a hearing] that the garnishee, at the  

                                                                                                           

                    time of service of the writ of attachment and notice, had any  

                                                                                                           

                    property of the defendant liable to attachment  beyond the  

                                                                                                          

                    amount  admitted  in  the  garnishee's  statement,  or  in  any  

                                                                                                            

                    amount if  a  statement is not furnished, judgment may be  

                                                                                             

                    entered against the garnishee . . . .  (Emphases added.)  



                                                                                                                                  

Both Rule 89(l) and AS 09.40.060 thus provide a third party the opportunity to reply to  



                                                                                                                            

a writ of attachment prior to garnishment without resorting to formal intervention under  



                                                                                                                                  

Rule 24.  As a named third party in the writ of attachment, DHSS was not required to  



                                                                                                          

formally intervene under Rule 24 for the court to consider its reply.  



                                                                                                                              

                    It is true that DHSS responded to the writ of attachment five months after  



                                                                                                                        

it issued, and, by DHSS's own report, nearly a month after its legal counsel received  



                                                                                                                                 

Arcticorp's  letter  notifying  DHSS  of  the  writ;  the  delay  apparently  was  due  to  

                                                              26   Arcticorp argues that DHSS's reply "was  

                                                                                                                             

Arcticorp's informal service of the writ. 



moot because of the untimeliness of the filing."   But Arcticorp raises its timeliness  

                                                                                                                     



argument to us only briefly under its theory of intervention under Rule 24, rather than  

                                                                         



          26  

                                                        

                    See note 3 and related text.  



                                                               -10-                                                         7261  


----------------------- Page 11-----------------------

under the relevant statutes pertaining to garnishee proceedings.                                                                                   Given the inadequacy  

of the briefing, the issue is waived and we will not consider it.                                                                              27  



                                                                                                                                                                                       

                B.	            It Was Not Error To Deny Arcticorp's Request For A Show Cause  

                                                                                                 

                               Hearing In Its Motion For Reconsideration.  



                                                                                                                                                                                               

                               Arcticorp contends that the audit was insufficient evidence that DHSS was  



                                                                                                                                                                                                

not indebted to C Care and that the court erred by  placing the burden of proof on  



                                                                                                                                                                                

Arcticorp  to  show  otherwise.                                              Arcticorp  argues  that  it  is  entitled  to  a  garnishee  



                                                                                                                                                                                              

proceeding  to  propound  discovery  on  DHSS  under  Rule  69(a),  Rule  89(l)(1),  and  



                                                                                                                                                                                         

AS 09.40.060.                          Arcticorp also  argues that C Care's owner's plea agreement raises  



                                                                                                                                                                                              

important new "avenues of inquiry" for a garnishee hearing, "particularly where [the  



                                                                                                                                                                                                

owner] agreed that C Care would 'assign any and all future awards paid . . . to cover the  



                                                                                                                                    

above identified overpayments.' "  (Emphasis omitted.)  



                                                                                                                                                                          

                               Contrary to Arcticorp's assertions, it is not "entitled" to an examination  



                                                                                                                                                                                              

without making some showing that DHSS owes a debt to C Care.  We have held that  



                                                                                                                                                                                                   

"(1) a judgment creditor bears the burden of showing that the garnishee has property of  



                                                                                                                                                                             

the judgment debtor, and (2) the garnishee has the burden of proving an affirmative  

                                                                                 28   The superior court did not err in its determination  

                                                                                                                                                                       

defense to the garnishment action." 



                27             A party may waive its challenge to a lower court action by failing to brief                                                                                  



the issue adequately.                            See Hagen v. Strobel                            , 353 P.3d 799, 805 (Alaska 2015) ("[W]here                                    

a point is given only a cursory statement in the argument portion of a brief, the point will                                                                                                   

not be considered on appeal." (alteration in original) (quoting                                                                                   Glover v. Ranney                         , 314   

P.3d 535, 545 (Alaska 2013))).                                            



                28             von Gemmingenv. First Nat'lBankof Anchorage (von Gemmingen II),890  

                                                                                                                                                                                               

P.2d 60, 64 (Alaska 1995); see also von Gemmingen I, 789 P.2d 353, 355 (Alaska 1990);  

                                                                                                                                                                                        

Steenmeyer Corp. v. Mortenson-Neal, 731 P.2d 1221, 1225 (Alaska 1987); Anchorage  

                                                                                                                                                                              

Helicopter Serv., Inc. v. Anchorage Westward Hotel, 417 P.2d 903, 906 (Alaska 1966).  

                                                                                                                                                                                                         



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----------------------- Page 12-----------------------

that Arcticorp bore the burden of "establishing that at the time of garnishment process"                                                    



                                                                                                                                                 29  

-  service of the writ of attachment and notice - DHSS was indebted to C Care.                                                                          



                         We conclude the superior court did not err in finding Arcticorp never met  

                                                                                                                                                     



its burden, particularly in the face of DHSS's strong and credible evidence of offset.  

                                                                                                                                                             



Arcticorp offered no evidence of DHSS's debt to C Care in its prejudgment motion for  

                                                                                                                                                      



a  writ  of  attachment.                    Neither  the  attached  affidavit  nor  the  complaint  detail  any  

                                                                                                                                                    



arrangement between DHSS and C Care. Apart from the motion's conclusory statement  

                                                                                                                                           



that DHSS "owes C Care . . . for the professional services rendered prior to the start of  

                                                                                                                                                        



any investigation by the [FBI]," Arcticorp made no showing that DHSS owed a "debt . . .  

                                                                                                                                                           

which would be recoverable" at the time of service of process.30  

                                                                                                  



                        DHSS metits burden of "proving an affirmative defense to the garnishment  

                                                                                                                                      

              31   DHSS's reply included an affidavit from a medical assistance administrator  

action."                                                            



with personal knowledge of the audit, as well as its letter to C Care enclosing the audit  

                                                                                                                                                  



and stating C Care owed DHSS over $1.4 million.  It was not error to conclude that this  

                                                                                                                                                     



was sufficient evidence that DHSS was not indebted to C Care.   Arcticorp did not  

                                                                                                                                                     



produce any evidence showing otherwise in the eight months that elapsed between  

                                                                                                                                            



receiving DHSS's reply and moving for a writ of execution. And Arcticorp's request for  

                                                                                                                                                      



a hearing, raised for the first time in its motion for reconsideration, was also devoid of  

                                                                                                                                                        



any showing.  At no point did Arcticorp produce any affidavits or documents raising  

                                                                                                                                               



            29          von Gemmingen I, 789 P.3d at  355 (quoting  Steenmeyer Corp.,  731 P.2d  



at   1225).    



            30          See  Anchorage  Helicopter  Serv.,  Inc.,  417  P.2d  at  906  &  n.1  (citing  

                                                                                                                                               

AS 09.40.040).  

                             



            31          von Gemmingen II, 890 P.2d at 64.  

                                                                                        



                                                                          -12-                                                                    7261
  


----------------------- Page 13-----------------------

triable issues of fact with respect to DHSS's reply.32  It was not error to find a hearing                                                                                       



was unwarranted.   



                              As for Arcticorp's contention that the substance of the plea agreement                                                                          



merits a hearing, Arcticorp failed to raise this argument before the superior court and it                                                                                                         

                                                                                   33   And the argument is unavailing.  The agreement  

therefore is not preserved for appeal.                                                                                                                                         



provision Arcticorp cites - C Care's agreement to forward future awards from Xerox  

                                                                                                                                                                           



State Healthcare to DHSS to pay off C Care's debts - does not change the fact that  

                                                                                                                                                                                             



DHSS owes C Care no money and C Care owes DHSS over $1.4 million.  If Arcticorp  

                                                                                                                                                                                



now wishes to pursue funds owed from another entity to C Care, Arcticorp may request  

                                                                                                                                                                                      



that the court issue additional writs of attachment.  Requiring DHSS to participate in  

                                                                                                                                                                                                 



court proceedings over a nonexistent debt to C Care is not an appropriate remedy.  

                                                                                                                                                                                             



V.             CONCLUSION  



                               The superior court's orders denying the motion for a writ of execution and  

                                                                                                                                                                                              



denying the hearing request are AFFIRMED.  

                                                                          



               32             See  Alaska R. Civ. P. 89(                                   l)(4) (providing for trial if issues of fact arise                                              



between plaintiff and garnishee).                                            



               33             Ivy v. Calais Co., 397 P.3d 267, 275 (Alaska 2017) ("An argument is  

                                                                                                                                                                                                  

ordinarily not preserved for appeal if it was not raised below, or if it was only raised after  

                                                                                                                                                                                            

the party filed a motion for reconsideration." (footnote omitted)).  

                                                                                                                               



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