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Sharpe v. Trail (8/18/95), 902 P 2d 304
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Notice: This opinion is subject to correction before
publication in the Pacific Reporter. Readers are
requested to bring errors to the attention of the Clerk
of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, phone (907) 264-0607, fax (907) 276-5808.
THE SUPREME COURT OF THE STATE OF ALASKA
JEFF SHARPE and DEBBIE SHARPE,)
) Supreme Court No. S-5618
Appellants, )
) Superior Court No.
v. ) 1KE-92-266 Civil
)
GEORGE TRAIL and LANA TRAIL, ) O P I N I O N
)
Appellees. ) [No. 4239 - August 18, 1995]
______________________________)
Appeal from the Superior Court of the
State of Alaska, First Judicial District,
Ketchikan,
Thomas E. Schulz,
Judge.
Appearances: Michael J. Zelensky,
Ketchikan, for Appellants. Gregory W.
Lessmeier, Hughes, Thorsness, Gantz, Powell &
Brundin, Juneau, for Appellees.
Before: Moore, Chief Justice,
Rabinowitz, Matthews, Compton, Justices, and
Bryner, Justice pro tem.*
BRYNER, Justice pro tem.
RABINOWITZ, Justice, with whom COMPTON,
Justice, joins, concurring in part and
dissenting in part.
I. INTRODUCTION
Jeff and Debbie Sharpe sued George and Lana Trail,
alleging wrongful eviction from a mobile home park in Ketchikan.
Superior Court Judge Thomas E. Schulz granted the Trails' motion
for summary judgment. The Sharpes appeal, contending that
genuine issues of material fact existed as to the Trails'
compliance with AS 34.05.225, the statute governing eviction from
mobile home parks. We affirm.
II. FACTS AND PROCEEDINGS
The Sharpes owned a "double wide"mobile home on a
rented space -- space 147 -- in the Mountain View Trailer Courts,
a mobile home park in Ketchikan. On April 10, 1990, the Trails,
who had purchased the mobile home park the previous year, sent
notice to the Sharpes requesting that they remove the mobile home
from the park by November 1, 1990. The notice stated, in
relevant part, that the Trails were "planning on converting that
space to parking." Unable to sell or move their mobile home, the
Sharpes vacated it. The home was repossessed and was removed
from the trailer park in the fall of 1991.
In the spring of 1990, shortly after the Sharpes
vacated the mobile home but while it still remained in place, the
Trails began parking construction equipment on space 147. After
the mobile home was removed, the Trails added some fill material
to the property. In the fall of 1991, the Trails removed the
construction equipment from the property and began allowing
travel trailers and recreational vehicles to park on it, but did
not allow the space to be used by mobile homes.
On March 20, 1992, the Sharpes filed suit alleging,
among other things,1 wrongful eviction. The Trails answered and
moved for summary judgment. As to the Sharpes' wrongful eviction
claim, the Trails' summary judgment motion asserted compliance
with subsection (a)(4) of AS 34.03.225, the statute governing
eviction of mobile homes from mobile home parks. Subsection
(a)(4) of the statute authorizes the owner of a mobile home park
to evict a tenant upon 180 days notice if the owner desires to
make "a change in the use of the land comprising the mobile home
park, or the portion of it on which the mobile home to be evicted
is located." The Trails asserted that they had provided the
Sharpes with the requisite 180-day notice and had in fact changed
the use of the land on which the Sharpes' mobile home had been
located.
In response, the Sharpes alleged the existence of two
disputed issues. First, the Sharpes claimed that the Trails' use
of the property to park commercial vehicles did not amount to a
"change in the use of the land"within the meaning of AS
34.03.225(a)(4); second, they asserted that the Trails acted in
bad faith in evicting them "under the guise of a change in land
use." In support of their claim of bad faith, the Sharpes
pointed out that the Trails had recently begun renting space 147
for use by travel trailers and recreational vehicles -- a use the
Sharpes characterized as identical to the original use. In
addition, the Sharpes presented evidence of statements the Trails
had made indicating that they wanted to evict the Sharpes' mobile
home because it was unsightly. The Sharpes argued that these
statements, coupled with the Trails' recent rental of space 147
for parking by travel trailers and recreational vehicles, created
a factual inference that the Trails had never intended to change
the use of the property.
Judge Schulz rejected the Sharpes' arguments,
concluding that no material factual issues remained in dispute
and that the Trails were entitled to judgment as a matter of law.2
The Sharpes then filed this appeal, in which they argue that the
superior court erred in rejecting their bad faith claim and in
finding a change in the use of space 147.
III. DISCUSSION
A. Standard of Review
In ruling on a summary judgment motion, the trial court
"must determine whether any genuine issue of material fact exists
and whether the moving party is entitled to judgment on the law
applicable to the established facts. All reasonable inferences
of fact from proffered materials must be drawn against the moving
party and in favor of the non-moving party." Wright v. State,
824 P.2d 718, 720 (Alaska 1992) (citations omitted). On review,
this court uses its independent judgment and will reverse the
trial court's ruling "if the pleadings and evidence presented
reveal either the existence of any genuine issues of material
fact or that the moving party is not entitled to judgment as a
matter of law." Foster v. Hanni, 841 P.2d 164, 170 (Alaska
1992).
B. Change in Use of the Land
The trial court found that the Trails satisfied the
statutory requirements of AS 34.03.225 in that they changed the
use of the property and provided the Sharpes with the requisite
180 days notice. The Sharpes argue that the trial court erred as
a matter of law in reaching this conclusion. The Sharpes contend
that "the conversion to parking is insufficient to satisfy"the
statutory requirement of "a change in use of the land comprising
the mobile home park or the portion of it on which the mobile
home to be evicted is located." AS 34.03.225(a)(4).
We have previously noted that the purpose of Alaska's
mobile home eviction statute is to protect the rights of mobile
home owners:
AS 34.03.225 limits a landlord's right
to evict a mobile home tenant to only four
reasons. Several other states have similar
laws, the rationale of which has received
considerable attention. Such legislation
provides mobile homeowners with a measure of
protection in their dealings with mobile home
park operators. Mobile homeowners are
thought to need more protection than do
ordinary renters because the general shortage
of mobile home spaces places them in an
unequal bargaining position which can lead to
abuses by the landlord, and because eviction
entails the expense of moving a mobile home
which could result in a loss of equity in the
mobile home.
Osness v. Dimond Estates, Inc., 615 P.2d 605, 607-08 (Alaska
1980) (footnotes omitted).
Although we have not previously interpreted the "change
in use"provision of subsection (a)(4), the provision is not
unique. Courts of other states, construing virtually identical
provisions, have held that a viable "change in use"need not be a
drastic one or one entailing substantial alteration of the land
occupied by a mobile home. For example, in Crown Diversified
Industries, Inc. v. Watt, 415 So. 2d 803, 805 (Fla. App. 1982),
the Florida Court of Appeals held that a change in use need not
be so substantial as to justify rezoning. And in Harris v.
Martin Regency, Ltd., 576 So. 2d 1294, 1298 (Fla. 1991), the
Florida Supreme Court stated "[i]f the park owner in good faith
merely wants to leave land vacant, the owner may do so under the
statute." Id. at 1298.
The foregoing cases provide strong support for the
conclusion that a sufficient change in use occurred here. In the
present case, it is undisputed that, following the eviction of
the Sharpes' mobile home, the Trails used space 147 by parking
construction vehicles on the property, and, later, by renting the
property for parking by travel trailers and recreational
vehicles. The parking of construction vehicles on space 147
plainly amounts to a new use of the property. The Sharpes cite
no authority to support the proposition that this new use should
be deemed insufficient to qualify as a "change in use"under AS
34.03.225(a)(4).
The Trails' more recent use of the property for rental
to travel trailers and recreational vehicles presents a
marginally closer issue. In our view, however, renting to travel
trailers and recreational vehicles amounts to a significantly
different use than rental for occupancy by a mobile home. Case
law appears to recognize a distinction between mobile homes and
other vehicles that are capable of being occupied: "'The mobile
home is a detached, single family dwelling unit designed for long
term occupancy, which distinguishes it from the motor home or
travel trailer.'" Cider Barrel Mobile Home Court v. Eader, 414
A.2d 1246, 1248 n.3 (Md. App. 1980) (quoting Stubbs, The
Necessity for Specific State Legislation to Deal with the Mobile
Home Park Landlord-Tenant Relationship, 9 Ga. L. Rev. 212 n.1
(1974-75)).
This distinction serves as the basis for the special
protection Alaska law accords to mobile home occupants. Statutes
like AS 34.03.225, which limit the rights of landowners to evict
mobile homes from rented spaces, give recognition to the unique
character of mobile homes and to the special relationship that
arises when a mobile home owner rents space:
Mobile homes come to rest in established
parks, the wheels are generally removed, they
are anchored to the ground, because of forces
of the wind, connections with electricity,
water and sewerage are made . . . . The
removal from one park to another becomes more
than a mere hitching to a truck or tractor
and pulling it away.
Palm Beach Mobile Homes, Inc., v. Strong, 300 So. 2d 881, 886
(Fla. 1974). See also Osness, 615 P.2d at 607-08. Indeed, the
distinct status of mobile homes is implicitly recognized and
given legal significance in Alaska's eviction statute: by its
own terms, AS 34.03.225 applies only to "mobile homes,""mobile
home park operators,"and "mobile home dwellers"and does not
extend to travel trailers or recreational vehicles.3
We conclude that the Trails' undisputed use of space
147 for the parking of commercial vehicles, travel trailers and
recreational vehicles constitutes a "change in the use of the
land"under AS 34.03.225(a)(4).
C. Good Faith
The Sharpes separately argue that a genuine factual
dispute existed as to the Trails' good faith in ordering their
eviction. "[E]ven if a park owner offered a facially legitimate
reason for eviction, the eviction may be voided if the mobile
home owners can prove the park owner acted in bad faith."
Harris, 576 So. 2d at 1298. But, as the trial court correctly
recognized in the present case, good faith is not an abstract
proposition, but must instead be determined by reference to the
statutory "change in use"requirement. As the trial court
stated:
[I]n order to find a lack of good
faith, I think that the court would have to
find or be able to infer from the evidence at
least, that there was a factual issue whether
the defendants actually changed the use of
the land. I don't think there is.
Under AS 34.03.320, the Trails were required to act in
good faith in evicting the Sharpes.4 However, AS 34.03.360(5)
defines "good faith"to mean "honesty in fact in the conduct of
the transaction concerned." Under the statutory definition of
good faith, if the Trails honestly decided to change the use of
space 147 -- in other words, if they acted with "honesty in fact"
in undertaking the change in use -- their underlying motives for
doing so were immaterial.5 Cf. Crown Diversified, 415 So. 2d at
806 (proof of bad faith through fraudulent representations would
suffice for relief).
Here, undisputed evidence in the record establishes
that, upon evicting the Sharpes, the Trails did in fact change
the use of space 147. This change in use continued in effect at
the time the trial court ruled on the Trails' motion for summary
judgment. We may accept as true the evidence suggesting that the
Trails wanted to evict the Sharpes because they found their
mobile home unsightly. In the face of uncontradicted proof
establishing an actual and continuing change in use, however,
this evidence cannot, standing alone, support an inference that
the Trails acted in bad faith in carrying out the eviction.6
IV. CONCLUSION
The superior court properly concluded that undisputed
evidence established the Trails' compliance with the eviction
requirements of AS 34.03.225(a)(4); accordingly, the court did
not err in granting the Trails' motion for summary judgment.
The judgment is AFFIRMED.
RABINOWITZ, Justice, with whom COMPTON, Justice, joins,
concurring in part and dissenting in part.
I agree with the court's holding that the Trails
satisfied the "change in use"provision found in AS
34.03.225(a)(4) (governing eviction of mobile homes from mobile
home parks). I disagree with the court's interpretation of the
good faith requirement of AS 34.03.320 and therefore dissent from
Part II.C of the opinion.7
In interpreting AS 34.03.320, the court adopts an
objective standard for determining whether the Trails acted in
good faith. Alaska Statute 34.03.360(5) defines "good faith"as
"honesty in fact in the conduct of the transaction concerned."
The court reasons,
Under the statutory definition of good
faith, if the Trails honestly decided to
change the use of space 147 -- in other
words, if they acted with "honesty in fact"
in undertaking the change in use -- their
underlying motives for doing so were
immaterial.
I think this holding is incorrect for the following reasons.
First, in interpreting a statute we generally favor a
reading of the statute which gives effect to all its provisions.
Homer Elec. Ass'n v. Towsley, 841 P.2d 1042, 1045 (Alaska 1992).
If the trailer park owner must violate one of the other
substantive provisions of the chapter in order to violate AS
34.03.320, then this section is superfluous. For example, in the
present case, if the Sharpes had a remedy under the "change in
use"provision they would not have needed to argue that the
Trails had acted in bad faith.8
Second, a majority of other jurisdictions have held
that the identically worded good faith requirement in the Uniform
Commercial Code9 is independently actionable and requires a
subjective inquiry into the motivations of the contracting
parties.10 For example, in Reid v. Key Bank of Southern Maine,
Inc., 821 F.2d 9 (1st Cir. 1987), the court held that the
defendant bank had violated its duty to perform in good faith by
requiring accelerated payment of the plaintiff's loan even though
the loan agreement provided that the bank could do so at will.
In upholding the following jury instruction, the court focused on
the subjective definition in UCC 1-201(19):
One acts with good faith, in
general, when one acts honestly.
Good faith means that one acts
without any improper motivation. One acts
with the truth and not for some ulterior
motive that is unconnected with the substance
of the agreement in question when one is
acting with good faith.
Id. at 14-15 & n.2. Under the court's view in the present case,
AS 34.03.320 does not require a similar search for "an ulterior
motive."
Finally, the court's construction of AS 34.03.360(5)
deviates from this court's precedents. In both Mitford v. de
Lasala, 666 P.2d 1000, 1007 (Alaska 1983) and Hagans, Brown &
Gibbs v. First National Bank of Anchorage, 783 P.2d 1164, 1168
(Alaska 1989), we engaged in subjective inquiries into the
motivations of the defendants in order to determine if they had
breached the implied covenants of good faith and fair dealing in
their respective contracts. In Luedtke v. Nabors Alaska
Drilling, Inc., 834 P.2d 1220, 1224 (Alaska 1992), we expanded
the analysis, holding that the UCC covenant of good faith and
fair dealing imposes both an objective and subjective standard.
Only recently in Hillman v. Nationwide Mutual Fire Insurance Co.,
855 P.2d 1321, 1324 (Alaska 1993), did we deviate from this
course by holding that in order to recover for the tort of bad
faith in first party insurance cases, the insured must prove
objective bad faith on the part of the insurer. Because the
weight of authority suggests that good faith is comprised of both
subjective and objective components, I am of the view that the
holding in Hillman should be limited to its facts.
In conclusion, I think that case law supports a reading
of AS 34.03.320 which makes a good faith requirement
independently actionable; that the duty to act in good faith
whether implied contractually or imposed statutorily requires
more than mere compliance with the letter of the law; and that
determining whether a party has fulfilled such a duty requires a
subjective inquiry into the motivation of the party in acting as
they did. This is precisely the evidence which the Sharpes
proffered in their affidavits to demonstrate that a genuine issue
of material fact prevented the entry of summary judgment.11 I
would therefore reverse the superior court's order granting
summary judgment against the Sharpes on their claim under AS
34.03.320 and remand the case to afford the Sharpes an
opportunity to present evidence to the superior court on the
issue of the Trails' good faith under AS 34.03.320 and AS
34.03.360(5).
_______________________________
* Sitting by assignment made pursuant to article IV,
section 16 of the Alaska Constitution.
1 The Sharpes also alleged that they were the
beneficiaries of an agreement between the Trails and the prior
owners of Mountain View Trailer Park that was intended to assure
the Sharpes' continued occupancy of space 147 after the Trails
purchased the property. The Trails' motion for summary judgment
denied any agreement protecting the Sharpes' occupancy, and the
superior court granted the Trails' motion for summary judgment on
this issue. The Sharpes do not challenge this aspect of the
superior court's summary judgment order.
2 In relevant part, Judge Schulz stated:
So I think the change of use was, ah,
met the conditions of the statute. I don't
[think] there has to be an awful lot done to
the land as such, I think all that has to
happen is that the owner of the land decides
that he is going to use it for something else
or not use it at all. And under our statute,
he's entitled to do that and he gave them six
months notice. That finding, of course, kind
of deals also with the plaintiffs' good faith
argument because in order to find a lack of
good faith, I think that the court would have
to find or be able to infer from the evidence
at least, that there was a factual issue
whether the defendants actually changed the
use of the land. I don't think there is.
The plaintiffs have contended that Mrs. Trail
didn't like the looks of their trailer. She
has filed an affidavit that says that she
thought their trailer looked fine and she
never told them she didn't like it, and so
there's a factual dispute there, but given
the terms of our statute and the notice they
gave the plaintiffs and the use to which they
put the land, I can't, there's no triable
issue on that record.
3 Cf. AS 45.30.100, which defines a "mobile home" for
purposes of Alaska's Mobile Home Sales Act, AS 45.30.011-.100, as
"a vehicle designed and equipped for human habitation, and which
may be drawn by a motor vehicle only when authorized by a
permit." Under this definition, typical travel trailers and
recreational vehicles, which are designed for routine highway
travel, are plainly excluded from the definition of "mobile
home,"since Alaska regulations require permits only for oversize
and overweight vehicles. See 17 AAC 25.010.110; 3 AAC 35.120.
4 AS 34.03.320 provides:
Every duty under this chapter and
every act that must be performed as a
condition precedent to the exercise of a
right or remedy under this chapter imposes an
obligation of good faith in its performance
or enforcement.
5 The dissent is mistaken in asserting that our decision
applies an objective standard of good faith. We apply a
subjective test, but hold that good faith must be defined in
reference to AS 34.03.225(a)(4), which expressly grants owners
the right to evict on short notice for purposes of changing the
use of the land. The requirement of good faith is thus satisfied
if the owner acts in subjective good faith in effecting a
permanent change in the use of the land on which a mobile home is
situated. Of course, the same might not be true if the
underlying basis for the Trails' decision to evict were
independently impermissible (e.g., racial discrimination) or
otherwise violated public policy (e.g., retaliatory conduct). In
the present case, however, the evidence suggesting that the
Trails were motivated by their displeasure with the appearance of
the Sharpes' mobile home reveals no independently impermissible
basis for the decision to evict.
6 The Sharpes' argument that the evidence supports a
factual inference of bad faith might have merit if we accepted
their premise that the Trails' recent use of space 147 for travel
trailers and recreational vehicles was essentially identical to
the use of the space for a mobile home. Accepting this premise,
the evidence would arguably tend to support the view that the
Trails intended to change the use of their property only
temporarily, as a pretext for the eviction. In light of our
conclusion that rental to travel trailers and recreational
vehicles amounts to a changed use, however, this aspect of the
Sharpes' good faith argument is moot.
7 AS 34.03.320 provides:
Obligation of good faith. Every duty
under this chapter and every act that must be
performed as a condition precedent to the
exercise of a right or remedy under this
chapter imposes an obligation of good faith
in its performance or enforcement. The
aggrieved party has a duty to mitigate
damages.
8 In note 5 of its opinion, the court suggests that
the good faith provision may require a subjective inquiry in a
narrow set of cases where the letter of the law has been
satisfied but where the owner's motive is "independently
impermissible (e.g. racial discrimination) or otherwise violated
public policy (e.g., retaliatory conduct)." This interpretation
of the statute runs up against the same objection. Retaliatory
conduct is prohibited by AS 34.03.310, and it is tautological
that conduct which is independently impermissible, must be
impermissible because it runs afoul of another statute or the
constitution.
9 The official commentary to 1.302 of the Uniform
Residential Landlord and Tenant Act (AS 34.03) states that the
good faith requirement was adapted from 1-203 of the Uniform
Commercial Code. The UCC provides that an implied duty of good
faith exists in the performance of every contract. UCC 1-203
(AS 45.01.203).
10 See Reid v. Key Bank of Southern Maine, Inc., 821
F.2d 9, 13 (1st Cir. 1987) (listing jurisdictions which have
allowed recovery on theories of breach of good faith); see also
K.M.C. Co. v. Irving Trust Co., 757 F.2d 752, 761 (6th Cir. 1985)
(suit under New York law). Contra Management Assistance, Inc. v.
Computer Dimensions, Inc., 546 F.Supp 666, 677 (N.D.Ga. 1982),
aff'd, 747 F.2d 708 (11th Cir. 1984) (interpreting Georgia law);
Chandler v. Hunter, 340 So.2d 818, 821 (Ala. App. 1976).
11 The Sharpes argue that the Trails changed the use
of the lot which the Sharpes mobile home was on because the
Trails had moved into a house located nearby and did not like the
appearance of the "double-wide"mobile home. Debbie Sharpe
stated by affidavit that "Mrs. Trail had often complained of the
`unsightliness' of our mobile home."
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