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Fairbanks North Star Borough v. State of Alaska (2/28/92), 826 P 2d 760
<![CDATA[
Notice: This is subject to formal
correction before publication in the Pacific
Reporter. Readers are requested to bring
typographical or other formal errors to the
attention of the Clerk of the Appellate
Courts, 303 K Street, Anchorage, Alaska
99501, in order that corrections may be made
prior to permanent publication.
THE SUPREME COURT OF THE STATE OF ALASKA
FAIRBANKS NORTH STAR BOROUGH, ) Supreme Court File No.
) S-4345
Appellant, ) Superior Court File No.
) 4FA-90-261 Civil
)
v. ) O P I N I O N
)
STATE OF ALASKA, )
)
Appellee. ) [No. 3815 - February 28, 1992]
______________________________)
Appeal from the Superior Court of the
State of Alaska, Fourth Judicial District,
Fairbanks, Richard D. Savell, Judge.
Appearances: Ronald L. Baird, Bradbury,
Bliss & Riordan, Anchorage, for Appellant.
E. John Athens, Jr., Assistant Attorney
General, Fairbanks, and Charles E. Cole,
Attorney General, Juneau, for Appellee.
Before: Rabinowitz, Chief Justice,
Burke, Matthews, Compton and Moore, Justices.
MOORE, Justice.
I. INTRODUCTION
This appeal arises from an action filed by the
Fairbanks North Star Borough (FNSB) against the State of Alaska
for trespass, inverse condemnation, quiet title, ejectment, and
rescission and restitution. The superior court held that, to the
extent that FNSB's action turned upon a review of matters that
were raised or could have been raised in a prior administrative
hearing, the action was barred as an untimely appeal of an
administrative determination. The superior court also held that
the rescission and restitution claims were barred by the six-year
statute of limitations provided by AS 09.10.120, and that res
judicata barred the appeal. The superior court dismissed the
case pursuant to Rule 54(b) of the Alaska Rules of Civil
Procedure. FNSB appeals the superior court's decision to dismiss
the action. We affirm.
II. FACTS AND PROCEEDINGS
In June 1979, FNSB filed an application, pursuant to
the municipal land entitlement program, for certain lands
designated ADL 400700. In April 1981, the Department of Natural
Resources (DNR) approved the selections of those lands. On April
22, 1981, FNSB and the state executed a Cooperative Easement
Agreement (CEA) in order to provide a means for the future
designation of easements for access to and across lands selected
by FNSB as part of the municipal land entitlement program. The
CEA provides in paragraph 2:
If access to State . . . lands is
required prior to development . . . of
Borough lands, the State in consultation with
the Borough may designate an access easement
or easements across the conveyed lands.
The CEA also provides that its terms will be incorporated by
reference within all state patents conveying land to FNSB "where
access easements appear necessary and have yet to be identified."
In September 1981, DNR issued patent number 5978 which conveyed
to FNSB Tracts G and H of ADL 400700, the land at issue in this
case. The patent specified that it was issued subject to the
CEA.
In August 1984, the Northern Regional Office of DNR
stated in a letter to FNSB that it was invoking the CEA to
designate an easement over Tracts G and H for the construction of
a segment of the South Fairbanks Expressway. By letter dated
September 6, 1984, FNSB rejected this proposed easement. In
rejecting the invocation of the CEA, FNSB argued that the CEA was
inapplicable to the project because the state did not seek a
right of way for access, but rather "to facilitate traffic
movement itself." In addition, FNSB claimed that the CEA was
inapplicable because it is to be utilized only "where access
easements appear necessary and have yet to be identified." FNSB
complained that invocation of the CEA would result in a taking of
more than 27 acres of land previously conveyed by the state and
charged against FNSB's municipal entitlement.
Thereafter, pursuant to the procedure provided for in
the CEA, the matter was appealed to the Director of the Division
of Forest, Land and Water Management of DNR. The Director upheld
the decision of the Northern Regional Office of DNR to invoke the
CEA to obtain an easement for the South Fairbanks Expressway.
In January 1985, FNSB appealed the Director's decision
to the Commissioner of DNR. FNSB again argued that the CEA could
not be used to obtain the right-of-way for the South Fairbanks
Expressway, claiming that the right-of-way sought by the state
was intended to facilitate through traffic, not access to
adjacent lands. On May 14, 1985, Commissioner Wunnicke rendered
a decision upholding the Director's decision.
Almost a year later, in January 1986, FNSB formally
asked Commissioner Wunnicke to reconsider her decision. In
seeking reconsideration, FNSB acknowledged that "[t]he question
at hand seems to be one of interpretation of the Cooperative
Easement Agreement." In April 1986, the request to reconsider
was denied because it was untimely and presented no new
information. FNSB was told that construction of the highway
project had already begun. FNSB again sought
reconsideration of Commissioner Wunnicke's decision on August 8,
1988, this time before Commissioner Brady, the new Commissioner
of DNR. In repeating its arguments for reconsideration, FNSB
again acknowledged that the dispute turned on the interpretation
of the CEA. Reconsideration was again denied for reasons similar
to those previously identified. FNSB did not appeal the decision
further.
On February 21, 1990, FNSB filed an action against the
state as a result of the state's decision to invoke the CEA to
designate an easement on Tracts G and H. FNSB argued that the
CEA is unenforceable, void, or voidable because: (1) it is
against public policy; (2) it was entered into as a result of
unilateral or mutual mistake regarding the applicability of
certain Alaska statutes; or (3) FNSB's assent to the CEA was
induced by the innocent or negligent misrepresentation of the
state regarding the applicability of those statutes. FNSB's
complaint set forth four causes of action: trespass and inverse
condemnation; quiet title; ejectment; and rescission and
restitution. In its quiet title cause of action, FNSB claimed
that the state has no interest in Tracts G and H and all other
lands subject to the CEA.
The state moved to dismiss this action, arguing that
the matters raised in the complaint were administratively
adjudicated in 1984 and 1985, and thus barred by Alaska Rule of
Appellate Procedure 602(a)(2) as an untimely appeal of an
administrative decision. The state also argued that, to the
extent FNSB's fourth cause of action for rescission and
restitution was not a challenge to agency action, it should be
dismissed because AS 09.10.120 imposes a six-year statute of
limitations for actions in the name of political subdivisions.
FNSB responded to the state's motion to dismiss by
arguing that the CEA authorizes DNR to adjudicate only those
issues involving the width and location of easements, and that
DNR's determinations of issues other than the width and location
of easements were therefore not barred by Rule 602(a)(2). FNSB
also argued that DNR had no authority under the agreement to
determine whether the agreement itself was enforceable, and that
DNR's determinations did not bar FNSB's claim that the CEA is
unenforceable, void, or voidable. As to the state's claim that
the statute of limitations barred the claims for rescission and
restitution, FNSB argued that the statute of limitations was
inapplicable because the claim was filed within six years of the
state's entry on the plot.
Judge Savell held that Rule 602(a)(2) mandates
dismissal of those FNSB claims which involve matters that were
raised or could have been raised in DNR proceedings. He also
held that the agreement between the state and FNSB was valid and
that FNSB's rescission and restitution claims were barred by the
six-year statute of limitations set forth in AS 09.10.120. He
dismissed the complaint with the exception of the claim to quiet
title to lands, not contained in Tracts G and H, which the state
claims are governed by the CEA. This appeal followed.
III. DISCUSSION
Appellate Rule 602(a)(2) provides that an appeal from
an administrative agency to the superior court must be taken
within 30 days from the date of the administrative decision.
However denominated, a claim is functionally an administrative
appeal if it requires the court to consider the propriety of an
agency determination. Haynes v. State, 746 P.2d 892, 893 (Alaska
1987); Owsichek v. State, 627 P.2d 616, 620 (Alaska 1981); State
v. Lundgren Pac. Constr. Co., 603 P.2d 889, 893 (Alaska 1979);
Winegardner v. Greater Anchorage Area Borough, 534 P.2d 541, 545
(Alaska 1975).
FNSB disagrees with the superior court's conclusion
that Appellate Rule 602(a)(2) mandates dismissal of those claims
that were raised or could have been raised in the DNR
proceedings.1 FNSB claims that the CEA only authorized DNR to
determine the optimal width and location of easements on lands
subject to the agreement. DNR did not have authority to decide
other issues, FNSB argues, and Rule 602(a)(2) therefore should
not apply to those DNR decisions not involving the width and
location of easements.
FNSB's argument that Rule 602(a)(2) is inapplicable to
its suit is unconvincing for two reasons. First, as the superior
court concluded, FNSB's argument that the administrative process
created by the CEA applies only to the optimal width and location
of land subject to the agreement "is without merit." Paragraph 3
of the Agreement provides:
The width, location and number of
easements required shall be determined
according to the following criteria . . . .
Paragraph 6 of the Agreement then provides for administrative
resolution of "[a]ny rejections"of the proposed easements of the
other party. There is nothing in the CEA to suggest that the
term "rejections"in Paragraph 6 refers only to the width and
location of proposed easements. On the contrary, the CEA
unambiguously envisioned an administrative determination of the
width, location, and number of easements.
The second, and more fundamental, problem with FNSB's
argument is that FNSB already challenged both the invocation of
the CEA and the decisions made pursuant to it during the
administrative process. Although FNSB's suit is styled as an
independent action advancing different issues than were
considered by DNR, the relief sought is essentially the same as
that sought before DNR. For example, FNSB explicitly contested
the applicability of the CEA during the DNR administrative
proceedings, at one point even arguing that the "question" was
"one of interpretation of the CEA." Because FNSB had ample
opportunity to advance such objections at the administrative
level, and because FNSB alleges no surprise or injustice,
Appellate Rule 602(a)(2) applies.2 Having fully availed itself
of the administrative review process afforded by the CEA, FNSB
was required to challenge the administrative determination within
thirty days of that determination.
FNSB attempts to avoid the time limit on administrative
appeals by distinguishing each of its present claims from the
issues which were, or could have been, considered by DNR.
Relying largely upon Owsichek v. State, 627 P.2d 616 (Alaska
1981), FNSB maintains that its claim for inverse condemnation
arises under the takings clauses of both the Alaska and United
States Constitutions, and is therefore subject to our statement
in Owsichek that "the Alaska Constitution can sometimes serve as
the jurisdictional basis for an action that might otherwise be
characterized as an appeal from an administrative decision."
Owsichek, 627 P.2d at 620 n.7. This argument fails. We
explained in Owsichek that the Alaska Constitution can serve as
such a jurisdictional basis for only certain types of actions:
We held in [Moore v. State, 553 P.2d 8,
29 (Alaska 1976)] that the plaintiffs' action
was not barred by the statute of limitations
specified in Appellate Rule 45 because the
action was independent of the earlier
administrative proceedings and was based on
article VIII, section 10, of the Alaska
Constitution. This section sets forth the
due process requirements applicable to the
lease or sale of state lands. Our holding in
Moore was based in part on the fact that the
plaintiffs were not parties to the earlier
administrative proceedings and could not have
appealed from the agency's decision. 553 P.2d
at 29.
Owsichek relies upon much broader
constitutional provisions and could have
appealed from the Guide Board's decision. We
therefore conclude that our holding in Moore
is inapplicable to this case.
627 P.2d at 620 n.7. Because FNSB relies on a rather broad
constitutional provision, and because FNSB was a party to the DNR
proceedings and could have appealed from DNR's determinations,
FNSB's claim for inverse condemnation should be viewed as an
appeal of the administrative determination.
The borough argues in the alternative that, even if
inverse condemnation claims based on regulatory takings are
subject to the time limit on administrative appeals, its
condemnation claim challenges the state's physical invasion of
borough lands, and therefore is not subject to the time limit. A
permanent physical taking is qualitatively more intrusive than
regulatory takings, FNSB claims, and therefore warrants greater
protection under the takings clauses. The borough maintains that
the state, as the party entering on the land of another and
disturbing another's possession, bears the burden of proving a
privilege to do so. This argument fails primarily because it is
not possible to divorce the state's use of the land from the
administrative action. The right-of-way exists only because of
the administrative action. FNSB's claim that the state has no
legal right to construct the highway on its lands is a direct
challenge to the administrative decision, and is therefore
impermissible under Lundgren Pacific Construction Co. since it is
untimely filed.
FNSB next argues that its claims for quiet title and
ejectment are independent of any appeal from the administrative
proceedings because these claims arose from the state's entry on
borough land. In reality, these actions are but another attempt
by FNSB to do indirectly what it could not do directly. After
Lundgren Pacific Construction Co. and its progeny, these actions
must be dismissed because they force the court to reconsider the
propriety of an agency determination.
FNSB claims that its final causes of action, rescission
and restitution, are distinguishable from the administrative
appeal because DNR had no authority to determine the validity of
the CEA itself. The crux of the borough's argument is that the
CEA should be rescinded because AS 38.04.050 and AS 38.04.055,
which the CEA explicitly relies upon, specifically pertain to
private land and therefore were not intended to have any
application to the disposal of lands by the state pursuant to the
municipal land entitlement program.3
FNSB also argues that the CEA is void because it
contravenes the public policy reflected in former 29.18.201 et
seq. that DNR was to concern itself solely with the external
boundaries and not the internal subdivision of lands to be
conveyed under the municipal entitlement program. Even if the
CEA is not void as a matter of law, the borough claims the CEA
should be rescinded because it was entered into as a result of
unilateral or mutual mistake regarding the applicability of AS
38.04.050 and AS 38.04.055.
We find it unnecessary to consider whether FNSB's
claims for rescission and restitution are barred by Rule
602(a)(2) because those claims are clearly without merit. While
municipal entitlement land may not normally be thought of as
private land, DNR evidently considered that the land would become
private land and, as such, AS 38.04.050 and AS 38.04.055 were
applicable. "The construction of a statute by those charged with
its administration is entitled to substantial deference." United
States v. Rutherford, 442 U.S. 544, 553 (1979). More
importantly, the CEA indicates that it was not executed solely
because of those statutes. The CEA provides:
Whereas it is in the best interest of
residents of the Fairbanks North Star Borough
and State of Alaska that access to public and
private lands be appropriate to the need
being served;
Thus, regardless of the applicability of AS 38.04.050 and AS
38.040.055, there exist valid independent purposes for the CEA.
Furthermore, contrary to FNSB's arguments, former AS 29.18.201 et
seq. do not clearly indicate a legislative intent to reserve to
local governments the power to subdivide lands conveyed pursuant
to the municipal entitlement program. Because the CEA does not
contravene public policy, and because FNSB and the state were
authorized to enter into an agreement of this nature, the CEA is
not void.4
AFFIRMED.
_______________________________
1. FNSB apparently concedes that the DNR determinations
made pursuant to the CEA's dispute resolution provisions are
"administrative determinations"for purposes of Rule 602(a)(2).
In State v. Lundgren Pacific Construction Co., 603 P.2d 889
(Alaska 1979), we held that where a corporation which had
contracted with the Department of Highways appealed a decision
made pursuant to the contract's dispute resolution provisions,
the appeal was an appeal of an administrative decision.
Similarly, in Kollodge v. State, 757 P.2d 1028 (Alaska 1988),
this court held that a contractually-created Step IV employee
grievance hearing, which was conducted by a hearing officer whose
recommendations were acted upon by the Commissioner of
Administration, was "agency"action. The DNR determinations made
pursuant to the CEA's dispute resolution provisions differ in no
material respects from the administrative determinations in
Lundgren Pacific Construction Co. and Kollodge.
2. In Owsichek v. State Guide Licensing, 627 P.2d 616
(Alaska 1981), this court relaxed the time limit on
administrative appeals provided by Rule 45, the predecessor of
Appellate Rule 602(a)(2), in order to avoid surprise and
injustice to the appealing party. Id. at 622. See also State v.
Burgess Constr. Co., 575 P.2d 792, 796 (Alaska 1978)("It is
generally held to be incumbent upon the party seeking relaxation
of the rules to make a sufficient showing that enforcement of the
rule will result in surprise and injustice to that party."). The
Borough does not allege surprise or injustice in the present
case.
3. The CEA provides:
Whereas AS 38.04.050 states that
"Wherever State land is surveyed for purposes
of private use, adequate rights-of-way and
easements shall be reserved as necessary for
access . . ."and AS 38.04.055 states that
"The director shall reserve easements and
rights-of-way on and across land which is
made available for private use as necessary
to reach or use . . . public and private
land."; and
. . . .
4. Because we hold that the Borough's claims are barred, we
find it unnecessary to consider whether res judicata or the
statute of limitations bar the Borough's actions.
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